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Wednesday, 3 February 2010
Page: 369


Senator Bob Brown asked the Minister representing the Minister for Foreign Affairs, upon notice, on 21 October 2009:

Can details be provided, including dates, of financial, diplomatic or other assistance that has been given, or is being given, by the Australian Government to: (a) the Mongolian Government; (b) World Growth Mongolia; (c) Ivanhoe Mines Ltd; (d) Rio Tinto Limited; and (e) the Oyu Tolgoi mining project in Mongolia.


Senator Faulkner (Minister for Defence) —The Minister for Foreign Affairs has provided the following answer to the honourable senator’s question:

(a)   Since Australia’s development cooperation program to Mongolia commenced in 1992-93, successive Australian Governments have provided more than $50 million in aid to Mongolia. The Australian Government expects to provide another $6.4 million in aid to Mongolia in 2009-10. The largest portion of Australia’s aid to Mongolia is administered through AusAID’s bilateral program, the Mongolia Australian Scholarships Program. The remainder is allocated across a number of programs, including the South East Asia Regional Program; the Australia-NGO Cooperation Program; the Australian Youth Ambassadors for Development program; and the Australian Leadership Awards Scholarships. Under AusAID’s bilateral program, Australia provided $3 million in 2008-09 and will provide an estimated $3.3 million in 2009-10 for Mongolians to study in Australia. Scholarships are targeted to assist the human resource needs of particular Mongolian Government agencies and priority economic sectors including agriculture, energy and mining. In addition, since 2006, Australia has contributed a total of $1.45 million to a World Bank administered Extractive Industries Transparency Initiative (EITI) Multi-Donor Trust Fund. Mongolia is an EITI candidate country and has been the recipient of grants and technical assistance sourced from the Trust Fund. EITI is a voluntary scheme aimed primarily at resource-rich developing countries. It sets and manages a global standard for the full verification and publication of company payments and government revenue from oil, gas and mining. In June 2008, AusAID provided $35,000 to fund, in coordination with the World Bank and Mongolia’s Ministry of Foreign Affairs, a study tour to Alaska for Mongolian Government officials from different ministries to learn about the effective utilisation of public revenues generated from natural resources. AusAID provided $100,000 to the World Bank to assist development of an Infrastructure Strategy for Southern Mongolia. Supporting the development of this strategy, a delegation including 11 senior Mongolian Government officials, four private sector officials and three World Bank representatives undertook a study tour to Australia in November 2008, focused on mining infrastructure in Newcastle, the Hunter Valley and Western Australia. In 2008-09, Australia provided $500,000 to enable the start-up and capacity building of an independent mining sector policy think tank in Mongolia. In June 2009, Australia provided $5 million to support a multilateral response to the impact of the global recession in Mongolia. Mongolia’s economy was severely affected by the collapse of mineral prices that accompanied the Global Financial Crisis. Heavily dependent on mining revenues, Government revenues for the first half of 2009 fell by nearly a third in real terms (29.2%) compared with the first half of 2008, largely due to halving of the value of copper and gold exports. In response, the Government of Mongolia negotiated a stand-by loan with the International Monetary Fund (IMF) of almost US$230 million to support Mongolia’s external financing needs. The IMF required Mongolia meet a budget financing gap of US$204 million before the stand-by loan would be released. The Government of Mongolia requested assistance from the international donor community to meet the IMF conditions. Australia’s contribution was channelled through the World Bank, and ear-marked to support key areas, including policy reform in the mining sector, fiscal policy and management, social protection and the banking sector.

(b)   The current Australian Government has not provided any assistance to World Growth Mongolia.

(c)   The current Australian Government has not provided any assistance to the Canadian company Ivanhoe Mines Ltd in respect of its operations in Mongolia.

(d)   The current Australian Government, in pursuit of Australia’s national interests, maintains a good working relationship with Rio Tinto Limited. Rio Tinto has briefed the Australian Government, both in Australia and overseas, on its operations in Mongolia. The Australian Government has not undertaken any direct advocacy on behalf of Rio Tinto with the Mongolian Government, nor provided direct financial, diplomatic or other assistance to Rio Tinto in respect of its operations in Mongolia. The current Australian Government has shown support for Australian companies by raising with senior Mongolian Government officials Australia’s expertise in the mining sector, the strong track record of Australian mining companies in areas such as safety, environment, and community development, and the benefits for Mongolia of opening its mining sector to foreign participation. This general advocacy undertaken by the Australian Government may have indirectly benefited Australian companies with past, current or future interests in the Mongolian mining sector, including Rio Tinto.

(e)   The current Australian Government has not provided any assistance to the Oyu Tolgoi mining project. In a meeting held on 22 July 2009 between the Hon Stephen Smith MP, Minister for Foreign Affairs, and Mr Damdin Tsogtbaatar, State Secretary, Ministry of Foreign Affairs and Trade, Government of Mongolia, Mr Smith said Australia would like to see an investment agreement for the Oyu Tolgoi mine progressed by the Mongolian parliament.