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Rapport 2005/4 - Small-scale mining in Mongolia

 
A survey carried out in 2004. Small-scale mining (artisanal) mining is practiced in many parts of the world. In 1999 the International Labour Organisation (ILO) estimated that at least 10 million people were directly engaged in artisanal and small-scale mining activities in developing countries, with another 80 to 100 million people directly or indirectly dependent on them. There is a general reluctance of many governments to accept small-scale mining as a necessity for millions of people. The reluctance stems from in part from the serious environmental and social problems arising from the small-scale mining activities. There are, however, also significant advantages with a well-developed small-scale mining. It supports a large group of people and it significantly reduces the migration from rural areas to cities. De Nationale Geologiske Undersøgelser for Danmark og Grønland (GEUS)

Appel, P.W.U. 2005:
Small-scale mining in Mongolia – A survey carried out in 2004.
Danmarks og Grønlands Geologiske Undersøgelse Rapport 2005/4, 42 pp.

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G E U S
3
Contents
Summary
6
Introduction
10
Field investigations
11
Small-scale mining for gold ............................................................................................ 11
Small-scale hard rock gold miners ............................................................................ 12
Needs assessment hard rock small-scale gold miners.............................................. 13
Small-scale placer gold miners ................................................................................. 14
Needs assessment.................................................................................................... 15
Small-scale mining for coal ............................................................................................16
Field investigations.................................................................................................... 16
Needs assessment.................................................................................................... 18
Small-scale mining for fluorspar ..................................................................................... 18
Field investigations.................................................................................................... 19
Needs assessment.................................................................................................... 20
Small-scale mercury miners........................................................................................... 20
Gender issues
22
Small-scale hard rock gold mining ................................................................................. 22
Small-scale placer gold mining ...................................................................................... 22
Small-scale coal mining ................................................................................................. 23
Small-scale fluorspar mining .......................................................................................... 23
Needs assessment.................................................................................................... 23
Proposed mining law for small-scale mining
24
Needs assessment.................................................................................................... 24
Teaching and training course for small-scale miners and owners of gold
extraction plants
25
Needs assessment.................................................................................................... 25
Workshop for government officials and parliament members held at World
Bank Ulaan Baator 7
th
October 2004
26
Brief summary of needs assessment
27
Comments to the follow-up proposals
28
Short description of a Training program for medical doctors and small-scale
miners in handling problems with mercury in Mongolia
30
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Short description of a suggested Pilot Project: Cleaning of a major mercury
spill in Boroo River area, Mongolia
33
Annex 1. People met
35
Annex 2. Technical description of recycling of mercury
37
Annex 3. Teaching and training course for small-scale miners and owners of
gold extraction plant in Bornuur town, North of Ulaan Baator 4
th
October 2004.
39
Annex 4. List of participants in a workshop on small-scale mining for
government officials and parliament members held at the World Bank,
Ulaan Baator 7
th
October 2004
41
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5
Before embarking on a long travel in Mongolia you walk around a pile of rubble marked
with blue cloth. Each traveller ads a rock to the pile
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Summary
1. In 2003 World Bank carried out a survey: Mining sector Sources of Growth study. The
Sources of Growth study dealt briefly with small-scale mining, but the Bank decided
that further investigation into the sector was warranted. However, in 2003 a very com-
prehensive baseline survey of small-scale mining was carried out in Mongolia financed
by Canadian funding
1
. Another relevant study on small-scale mining and its role in mer-
cury pollution in Northern Mongolia
2
was published in 2003. Since a recent baseline
study of small-scale mining had already been carried out it was decided that the pre-
sent World Bank project should describe the development and changes in the patterns
of small-scale mining during 2004 with emphasis on the objectives of a needs assess-
ment. The present survey was financed by Danish trust funds and carried out by a con-
sultant from the Geological Survey of Denmark and Greenland (GEUS), Copenhagen,
Denmark. During both in country visits the consultant liased closely with officials from
several ministries (see list in Annex 1).

2. Small-scale mining also termed artisanal mining did not start in Mongolia until 1998.
The popular term for these miners in Mongolia are Ninja miners. This term comes from
the circular green pans many of the gold miners hang on their backs while walking from
the gold fields, making them resemble the `Ninja turtles' of movie and cartoon fame.
The Canadian funded report estimated that 100.000 small-scale miners were active in
Mongolia in 2003. There is no indication that this number is decreasing. As pointed out
by the Canadian funded report the number has increased over the last years and in all
likelihood will increase considerably. The drastic increase is partly due to severe
weather conditions making herding very difficult and also the general lack of other
working opportunities. The very good and only little explored potential for gold in Mon-
golia supports the assumption that small-scale mining for gold will increase over time.
Small-scale miners in Mongolia mine several commodities but the by far most important
are gold, fluorspar and coal. Few are mining dimension stone and mercury.

3. There has been a significant change in the distribution patterns of small-scale miners in
Mongolia. Prior to 2004 virtually no small-scale mining was carried out in the Gobi de-
sert. Early 2004 very rich vein gold deposits were discovered in the southern part of the
Gobi desert. Some of these occurrences unfortunately occur in protected areas. This,
however, did not deter small-scale miners to move in and start mining. The government
immediately sent in the police and military to clear the area. Shortly after having been
forced out a new group of small-scale miners moved in and this has been going on ever
since. The area was visited during this mission and several small-scale miners were in-
terviewed. This took place during night since the small-scale miners only work at night
in order to avoid being caught by the police. There are strong indications for the police
receiving bribes from the small-scale miners. Small-scale mining for placer gold is rap-
1
Ninja miners of Mongolia. Assistance to policy formulation for the informal gold mining sub-sector in
Mongolia. By Mongolian Business Development Agency for Canada fund Mongolia (2003)
2
Action research on mercury pollution in Boroo area Mongolia. Compiled by B. Tumenbayar for Japan
International Cooperation Agency Mongolia Office (2003)
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idly increasing in the Gobi desert. An estimate based on talks with officials from several
aimags and what was observed during a field trip through Gobi desert gave an excess
of 5000 small-scale miners active in the area.

4. Some of the hard rock small-scale miners in Gobi claim that they truck ore either to
Ulaan Baator or even further north in Mongolia for extracting the gold. Newspapers
have indeed reported that several large trucks carrying gold ore have been spotted and
confiscated by the police in Ulaan Baator. Several of the hard rock ninjas in the Gobi
desert, however, only truck their gold ore to nearby milling centers. These centers are
not located in villages or soum centers, but far away from populated areas.

5. Mercury is used widely in Mongolia for extracting gold. It is so far mainly used by hard
rock miners and not by placer miners. This is in contrast to other countries e.g. Kyrgyz
Republic where mercury is used by virtually all placer miners but not by hard rock min-
ers. There are some placer miners using mercury and it is likely that many more placer
small-scale miners will use mercury in the future since it increases their recovery of
gold. During the field trip in the Gobi desert one milling and gold extraction center for
hard rock gold ore was visited. This center used as much as 5 kg of mercury for every 3
to 4 tons of gold ore. Fortunately the owner of this particular center had learned the
technique of recycling mercury by using a retort. The owner did, however, admit that
30% of the mercury he used was released to the environment through the fines and
overflow. The mercury in the tailings is likely to contain appreciably amounts of gold.
The owner was very keen to learn alternative gold extraction methods. He was also in-
formed that the mercury and the gold in the tailings could be recovered. The total
amount of mercury used and lost to the environment in Mongolia is difficult to estimate.
In 2003 Japan International Co-operation Agency Mongolia Office carried out an: Action
research on mercury pollution in Boroo area Mongolia (cited above). This report con-
cluded that in Bornuur soum, a small area North of Ulaan Baator, about 500 kg of mer-
cury is released to the environment by small-scale miners every year. This represents
just a small fraction of the total number of small-scale miners in Mongolia. Questioning
small-scale miners during the present project in Bornuur area reveal that the number of
small-scale miners has increased and the release of mercury likewise since the Japa-
nese survey took place.
6.
One of the main problems encountered for hard rock small-scale gold miners and own-
ers of local gold extraction centers is the release of mercury during the amalgamation
process for extracting gold. Most of them are aware of the toxicity of mercury, but in
most cases they have no knowledge of how to recycle mercury or knowledge of alter-
native methods of extracting gold without the use of mercury. When confronted with the
method of recycling mercury most of them claim interest in learning this technique. One
teaching and training course was held in the Bornuur area North of Ulaan Baator. This
course was highly successful and several mercury-recycling devices (retorts) were
given to the participants of the course. The distributed retorts were copies of retorts in-
vented in South America and described in detail in numerous UNIDO reports. The lack
of knowledge of how to recycle mercury combined with the lack of knowledge by local
medical doctors on diagnosing mercury poisoning has made it appropriate to suggest a
new follow up project. A teaching and training project for medical doctors and small-
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scale miners in handling problems with mercury in Mongolia has been discussed with
the Mongolian Government

7. Some small-scale miners sell their gold to Mongol Bank whereas most of them sell their
gold to dealers in the field or to dealers in towns and villages. Signs with Buying Gold
are seen in many shops in soum and aigmag centers. The price they obtain is close to
world market price with a deduction for refining the gold. Placer small-scale miners
sometimes recover gold nuggets. Few miners get an extra few percent on top of the
gold price for gold nuggets whereas most only get the official gold price. Gold nuggets
are collectors item and thus often fetch as much as 20% over the world market price. It
would be good for small-scale miners if they could sell their nuggets to the proper price.
Present estimates indicate that small-scale miners recover about 7 tons of gold per
year (
60 Mio. US$)
3

8. The geologic setting of Mongolia and the fact that commercial mining companies as
well as small-scale miners frequently make new discoveries of gold occurrences indi-
cate that small-scale mining for gold is not a passing phenomenon. It is likely that it will
go on for several decades and will sustain an increasing number of small-scale miners.

9. Small-scale miners can so far not obtain any license since no mining law for small-
scale mining has been passed through the Parliament. Due to their illegal status many
of the small-scale miners are harassed by officials and bribing of police officers is often
necessary. However, in one aimag placer miners have obtained an agreement whereby
they pay 4000 tugrug (3.3 US$) per mining group per month. A mining group is typically
one family. For this sum the authorities leave the small-scale miners alone.

10. The majority of small-scale gold and fluorspar miners are men, but during summer time
many women and children participate in the mining operation. The ratio in summertime
is 50% men and 50% women and children. In the summer season many students carry
out small-scale mining in order to finance their studies. This information was collected
by the Canadian funded survey and the present survey confirmed the figures in the ar-
eas investigated.

11. Fluorspar small-scale miners work in an area south of Ulaan Baator. Their main prob-
lem apart from safety problems in the pits is that they have to stockpile the fluorspar un-
til a buyer turns up. It often takes several months before they can sell the fluorspar.
These miners have obviously a serious cash flow problem. If the government can es-
tablish funds giving microcredits to the fluorspar miners their cash flow problem will be
solved. The ore is generally mined by men, but breaking the ore into smaller pieces and
bagging it is often done by children and women.

12. Small-scale coal miners mainly work during the period October to April. During sum-
mertime many of them are small-scale gold miners. Coal production by large commer-
cial mines cannot meet the needs of private households, so small-scale coal miners
3
Ninja miners of Mongolia. Assistance to policy formulation for the informal gold mining sub-sector in
Mongolia. By Mongolian Business Development Agency for Canada fund Mongolia (2003)
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9
play an important role in supplying coal for cooking and heating. The small-scale coal
miners have serious safety problems. They dig tunnels more than 100 meters down.
The roofs in the tunnels are not supported and frequent collapse of tunnels cause fatal
casualties. In order to prevent a major disaster due to destabilization of the area where
small-scale coal miners work a mining engineer should be brought in to check the
ground and give recommendations. There are a number of mining engineers employed
by the commercial coal mines in the area, so it should not be too costly to bring some
of them into the field of small-scale coal mining for short term jobs. Following the rec-
ommendations of the mining engineers the necessary material, mainly timber, should
be supplied. Often methane in the coal seams explodes causing severe and some-
times fatal casualties. Methane detectors could be of great help. There is a well func-
tioning mining rescue group in the coal mining area also supporting the small-scale
miners, which does a good, job but lacks resources.

13. Small-scale mercury miners recover mercury from a large mercury spill from a closed
down Chinese placer mining operation. There is so much mercury so droplets of metal-
lic mercury can be seen on the surface. This mercury travels downstream and danger-
ous high mercury contents are recorded in river water, river sediments, in human tissue
and urine
4
. A pilot project of cleaning up an area of the Boroo River has been negoti-
ated with the Mongolian Government.

14. Small-scale mining cause degradation of land surface. The problem in hard rock mining
is minor. Placer gold mining results in many small holes and tunnels dug in riverbanks.
Small-scale miners should of course level the heaps of gravel and fill the holes they
have dug. It should, however, be emphasized that much of small-scale mining activity
takes place in areas, which have previously been exploited by commercial companies,
and these companies have left the areas without reclaiming. The small-scale mining
degradation is very minor compared to what the commercial companies have caused. It
may therefore be difficult to persuade them to reclaim the land they have spoilt consid-
ering that most of the major placer mining companies do not reclaim the areas where
they have mined. In the Gobi Desert where no commercial placer gold mining has
taken place but thousands of small-scale miners mine placer gold some degradation
takes place. Especially holes pose a danger to people. These holes are not fenced off
and people and animals can easily fall into the holes was fatal results.

15. There is still no legislation in Mongolia dealing with small-scale mining. There are sev-
eral versions of a draft mining law in circulation. In May 2004 during the first in-country
visit a general election was due in July. Thus nobody had any interest in a dialog of
how the future mining law for small-scale miners should be written. During the second
in country visit September-October the ministers for the different ministries had not
been elected so no dialog was possible at this time either.
4
Action research on mercury pollution in Boroo area Mongolia. Compiled by B. Tumenbayar for Japan
International Cooperation Agency Mongolia Office (2003)
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Introduction
Small-scale mining (artisanal) mining is practiced in many parts of the world. In 1999 the
International Labour Organisation (ILO) estimated that at least 10 million people were di-
rectly engaged in artisanal and small-scale mining activities in developing countries, with
another 80 to 100 million people directly or indirectly dependent on them. There is a gen-
eral reluctance of many governments to accept small-scale mining as a necessity for mil-
lions of people. The reluctance stems from in part from the serious environmental and so-
cial problems arising from the small-scale mining activities. There are, however, also sig-
nificant advantages with a well-developed small-scale mining. It supports a large group of
people and it significantly reduces the migration from rural areas to cities.

In Mongolia small-scale mining started in 1998 with few small-scale miners, but the number
has increased rapidly ever since. Presently an estimated 100.000 depend on small-scale
mining. People have had to find their own solutions, most often outside the formal econ-
omy. Serious cuts in production of the state owned coalmines resulted in massive loss of
jobs and a shortage of coal supplies for household cooking. Many of the mineworkers for-
merly working in the state owned coalmines thus turned to small-scale coal mining. General
loss of job opportunities has forced many people into placer and hard rock small-scale gold
mining.

Much criticism on small-scale mining has come from various groups. Commercial mining
companies claim that they have problems with small-scale miners exploiting within their
concession areas. This is partly true, but in most cases small-scale miners exploit minor
deposits which cannot be exploited on a commercial basis by large companies. It should
also be pointed out that there are many examples from different parts of the world where
small-scale miners have discovered mineral deposits, which have later been exploited by
commercial companies. Criticism has also come from central and local government. Criti-
cism from administrative side is mainly on the land degradation, pollution of the environ-
ment and the social problems arising from small-scale mining. Many of these problems can
be dealt with by a good regulatory framework and education of the small-scale miners. It
should be emphasized that one of the major advantages of small-scale mining is that it
keeps thousands and thousands of people in the rural areas and prevents their migration to
urban areas.

The present report address the inherent development dilemma of small-scale mining: Can
the potential negative impacts of this activity be avoided, minimized or mitigated, while
maintaining or even expanding its income, business, and employment generating potential?
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Field investigations
Small-scale mining takes place in most parts of Mongolia. The exact number of small-scale
miners is difficult to obtain, but an estimate from the Canadian funded project carried out in
2003
4
gathered that about 100.000 people were dependent on small-scale mining. Talks
during the present survey with officials from aimag centers and government officials indi-
cate that the number is rapidly increasing. During the present project small-scale gold min-
ing operations in the area North and North-West of Ulaan Baator have been visited. In an
area South-East of Ulaan Baator small-scale mining for coal and for fluorspar have been
visited. Finally a significant part of the Gobi desert has been traversed and talks with small-
scale gold miners, owners of gold extraction centers and aimag officials have been held.

Small-scale miners extract a number of commodities in Mongolia but the vast majority of
the small-scale miners work on gold, coal and fluorspar.
Small-scale mining for gold
The majority of the estimated 100.000 small-scale miners in Mongolia mine gold. This
started as early as 1998 in Northern Mongolia and has since gradually spread to other
parts of the country. Early 2004 the first small-scale gold miners appeared in the Gobi de-
sert, and it is estimated that in excess of 5000 people mine gold in the desert on a small-
scale basis.

Gold mining in Mongolia has not been carried out for hundreds of years. The geologic set-
ting of the country, however, seems very favorable for gold mineralizations and many small
and medium sized gold mining companies are already in operation. Small-scale gold min-
ers not only follow the footsteps of the commercial companies, but also discover new prof-
itable gold occurrences themselves. Commercial companies will in all likelihood mine some
of the discoveries made by small-scale miners in the future. On this background it seems
likely that not only can many more small-scale miners as the present number earn a living
from mining gold, but the mining period during which small-scale mining for gold can take
place before the resources are exhausted my last for many decades. If this is the case then
small-scale mining for gold in Mongolia is not a passing phenomenon and must therefore
be dealt with as a long lasting activity giving a significant contribution to the wealth of the
country. At present it is estimated that small-scale gold miners produce in the order of 7
tons of gold per year
5

There are two types of small-scale gold miners, hard rock miners and placer miners. Both
types are active in Northern Mongolia as well as in the Gobi desert.
5
Ninja miners of Mongolia. Assistance to policy formulation for the informal gold mining sub-sector in
Mongolia. By Mongolian Business Development Agency for Canada fund Mongolia (2003)
background image
Small-scale hard rock gold miners
Hard rock gold mining by small-scale miners has up until recently been carried out in
Northern Mongolia only. However early 2004 the first small-scale miners appeared in the
Gobi Desert. The first ones started mining in a protected area in southernmost Gobi desert
(Fig. 1). Rumors of very rich quartz veins spread over Mongolia. There is some controversy
as to where the rumors originated. Some sources say that an exploration company tres-
passed into the protected area and sampled quartz-veins. Later assays revealed very high
grades of gold (50 to 300 grams per ton). This attracted small-scale miners. Other rumors
tell that small-scale miners indeed discovered the rich quartz-veins. Some of them have a
fairly good knowledge of how promising quartz-veins look. These small-scale miners could,
however, benefit from basic training in geology and from support from geologists. As an
example: It should be possible to trace the very rich gold occurrences in the protected area
of Gobi Desert into the non protected part of the Desert, where small-scale miners then
quite legally could exploit the gold.















Figure 1.
Two pits from hard rock gold mining of very rich quartz veins in a protected area
in Southern Gobi Desert
In hard rock mining shafts are sunk down to several tens of meters depth. From the bottom
of the shafts tunnels are dug, often by using explosives. These tunnels are up to several
hundred meters long, but connected to the surface by shafts in order to increase circulation
of air. The mining is carried out by blasting, hammer and chisel. Ore is hauled to the sur-
face by hand. At the surface the ore is broken by hammering to pieces a few centimeters in
size.

Extraction of gold is carried out in two slightly different ways.
1. The centimeter sized rock chips are milled to sand size in milling machines mostly
manufactured in China. The crushed ore is handed over to female small-scale miners
who transport the sand-sized fraction to a nearby river. At the river they add mercury to
the sand sized ore and concentrate the heavies. During that process gold is amalga-


12
G E U S
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mated with mercury. Mercury is subsequently burned off in open air and the residual
gold is sold.
2. The centimeter sized rock chips are milled to sand size, and up to 5 kg of mercury is
added to the mill per 4 ton of rock during the milling (Fig. 2). Up to 30 % of the mercury
is released directly to the environment with the overflow. The milled sand sized material
with mercury is given to the small-scale miners who concentrate the heavies and the
mercury with gold. The mercury is subsequently burned of and lost to the environment.













Figure 2.
Milling of hard rock gold ore. Five kg of mercury is added for every three to
four tons of ore. One third of the mercury is lost directly to the environment with the
overflow.
Needs assessment hard rock small-scale gold miners
During shaft sinking and tunneling the small-scale miners rarely support the roofs. Therefor
cave in with injuries and causalities frequently take place. Teaching and training by mining
engineers can to some extent avoid this. Mining engineers can teach small-scale miners
how to secure roofs and walls of tunnels with timber or alternative materials such as parts
from abandoned cars and trucks.

Release to the environment of mercury used in extracting gold by amalgamation is a very
serious problem not only for the small-scale miners, but also for the population of Mongolia.
It is not possible to estimate the total amount of mercury released to the environment per
year in Mongolia. However, recent studies and present talks with the small-scale miners in
the Bornuur area North of Ulaan Baator indicate that in this small area alone an excess of
500 kg of mercury per year is released to the environment. A recent survey of mercury con-
tent in urine from the population in Bornuur shows more than 10 times the recommended
maximum value
6



G E U S
13
6
Action research on mercury pollution in Boroo area Mongolia. Compiled by B. Tumenbayar for Japan
International Cooperation Agency Mongolia Office (2003)
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It is, however, not difficult to recycle mercury during the amalgamation process (see Annex
2). Implementing a devise, which has been used in South America during many years, can
do this easily and cheaply. It is called a retort. This devise which is constructed of three
common pieces of plumbing tubes is very robust and can last for years. It can recycle up to
95% of the mercury used in amalgamation.

In co-operation with ILO a teaching and training course (Fig. 3) was carried out for small-
scale miners in Bornuur town 04 October 2004 (see Annex 3). The course was highly suc-
cessful and the small-scale miners were very interested in obtaining retorts. A number of
retorts were distributed to the small-scale miners.














Figure 3.
Teaching of small-scale miners in Bornuur town northern Mongolia
In Kyrgyzstan and elsewhere an alternative method to extract gold has been developed,
called acid treatment. This method is probably not in use in Mongolia yet, but may soon be
`imported' from Kyrgyzstan. Acid treatment does not use mercury at all and yields a very
pure gold concentrate. The method is highly toxic, but only for a few minutes. In order to
prevent future fatal accidents with the method small-scale miners should be advised of the
dangers of the method (Annex 2). During a recent small-scale mining mission for WB in
Kyrgyzstan a hand out was prepared explaining the dangers of using acid treatment. The
hand out was printed and distributed by the Swiss Red Cross to village nurses in a large
part of Kyrgyzstan. The nurses could then contact local users of nitric acid. A similar ap-
proach could be used in Mongolia.
Small-scale placer gold miners
This type of small-scale mining is carried out in Northern Mongolia and in the Gobi Desert.
Some of these miners work on abandoned mining sites whereas others mine sites where
no commercial companies have worked. The small-scale miners sink shafts or dig tunnels
several tens of meters into unconsolidated sand and gravel. They have no knowledge and
no means of supporting the roofs in the tunnels. Thus frequent collapse of tunnels take a
heavy death toll on the small-scale miners. In Northern Mongolia where timber is available


14
G E U S
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teaching of small-scale miners in supporting roofs and walls will significantly reduce the
number of accidents.
The small-scale miners in Northern Mongolia where water is abundant concentrate gold by
standard method that is washing pans, the so-called Ninja pan. In the Gobi desert where
water is scarce a dry `washing' technique is used (Fig. 4). Both techniques used in placer
gold mining only capture the fairly coarse gold grains. This means that the small-scale min-
ers loose a lot of gold and they probably only have a recovery of 50 to 60 %, since all or
most of the fine-grained gold is lost.
















Figure 4.
"Dry washing" of gold in the Gobi Desert. The gold is concentrated by me-
ans of airflow from an airpump
Needs assessment
The present project show that there is a great need for teaching and training of small-scale
hard rock gold miners in Mongolia in recycling mercury and in how to support roofs and
walls in the tunnels they dig. Questioning officials in soum and aigmag centers as well as
the Ministry of Health in Ulaan Baator also show that there also is an urgent need for teach-
ing local medical doctors in recognizing the various symptoms on mercury poisoning. See
section below on suggested teaching and training course for small-scale miners and medi-
cal doctors.
Placer small-scale gold miners have mainly too low recovery of gold. However, during dis-
cussions with them they did not appear to be interested in increasing the recovery. This
could be done for the placer miners in North Mongolia by better equipment such as better
sluices. It will be more difficult to help the small-scale miners working in the dry Gobi de-
sert. Equipment, which can be used under dry conditions, has been developed in the US. It
is suggested to look into this equipment and see whether it can be purchased at a reason-
able price for use in Mongolia.


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15
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G E U S
Small-scale mining for coal
Field investigations
Nalikh area South of Ulaan Baator is the center of coal mining in Mongolia. The main Mon-
golian coalmine was flooded and closed down. There are, however, a number of commer-
cial Mongolian and Chinese coalmines in the area. The commercial coalmines supply coal
to the powerplants of Mongolia.
Coal for household cooking and heating is supplied exclusively by small-scale miners. The
coal produced by small-scale miners is transported to Ulaan Baator and other large towns.
A security officer from the local mining rescue group regularly inspects the small-scale min-
ers in the Nalikh area. He makes monthly statements as to the number of small-scale min-
ers and keeps statistics on number of accidents and casualties. He is in charge of rescuing
operations for the small-scale miners. During the first three months of 2004 the maximum
number of coal small-scale miners were 1882. They were mining coal from 56 tunnels. The
number of small-scale coal miners in September 2004 was 1135. The number will increase
in the autumn and winter when the need for coal for household increases. Furthermore a
number of gold small-scale miners turn to coal mining when the working conditions for gold
mining get too harsh.
The small-scale coal miners work in groups of five to six people. They dig tunnels down to
a depth of more than hundred meters (Fig. 5). The coal seams they mine are up to a meter
in thickness, but often much less. They climb down the tunnels and use a small torch for
light and hammers and chisels for mining the coal. Locally the miners encounter perma-
frost, which makes mining of coal difficult. In these cases they use explosives. They chisel
holes into the coal seams and fill them with explosives. Burning fuses increase the risk of
methane from the coal explodes. They collect the coal in a bucket holding about a hundred-
kilogram. This bucket is pulled to the surface by a cable attached to a tractor. When the
coal reaches the surface it is screened and the large pieces are broken to smaller pieces.
When the heaps of coal are on the surface, they are targets of small boys (called "Small
birds"). These boys steal as much coal from the small-scale miners they can (Fig. 6). They
collect the coal and sell a bag of 10 kg for about 700 tugrug (~ 0.6 US$). The small-scale
miners mine on average 6 tons of coal per day for which they get in the order of 80.000
tugrugs (100 US$). However, not all goes to the small-scale miners. Most of the land in the
Nalikh area is covered by small mining licenses. The license owners employ small-scale
miners to do the mining. The owner of the license takes 10 % of the income. The owners of
the tractor pulling the coal to the surface take another 10% of the income. The remaining
80% of the income are split between the 6 members of the team.
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Figure 5.
Inclined shaft for small-scale coal mining











Figure 6.
"Small Birds". Young boys stealing coal from small-scale coal miners
There are severe safety problems for the small-scale coal miners. The tunnels they dig are
rarely supported so collapse happens frequently (Fig. 7). There are now so many holes dug
by small-scale miners over a comparatively small area so there is an obvious risk of desta-
bilizing the whole area. Lack of air at the bottom of the deeper tunnels also cause prob-
lems. Finally methane from the coal seams take their toll of small-scale miners. During the
first nine months the Mining Rescue office had more than ten rescue operations. During
that period, twenty small-scale miners were rescued from tunnels, but eight died. Most of
the small-scale coal miners are between 18 and 45 years old, and less than 20% are older
than 45. There are virtually no women and children engaged in small-scale mining for coal.
Cracks indicating
collapse of the
shaft in the near
future









G E U S
17
Figure 7.
Cracks near a shaft. These cracks indicate that there will be cave in of the walls
in the near future.
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18
G E U S
Needs assessment
The major problem for small-scale coal miners is safety. A death toll of almost one every
month and many serious injuries during their work is obviously not acceptable. Next to the
area where the small-scale coal miners work are several operating commercial coalmines.
These mines operate underground have thus the expertise and staff to teach the small-
scale coal miners how to operate more safe underground.

In the coal mining district there is a Mining Rescue office which also serves the small-scale
miners. Given some limited funding this office could hire staff from the commercial mines to
teach the small-scale miners. Teaching is obviously not enough. Collapse of tunnels can
only be prevented if sufficient timber or alternative materials are available. Considering the
importance the work of these small-scale miners is for supplying coal for household heating
and cooking it would be reasonable to supply them with supporting material either timber or
metal. It must be borne in mind that the supporting material can be re-used from one tunnel
to the next.

There is a risk that the whole small-scale mining area will be destabilized due to the large
number of holes dug by small-scale miners. Quite deep cracks observed during the field
visit is an indication of initial destabilization. In order to prevent major disasters an experi-
enced mining engineer should have a close look at the area and subsequently teach the
small-scale miners how to support roofs and walls.

Another safety problem for the small-scale coal miners is lack of fresh air in the tunnels.
This problem can only be overcome by using airpumps.

Methane is frequently present in appreciable amounts in coal and when coal seams are
exposed the methane starts to leak from the coal seams into the tunnels. Methane is toxic
and it is highly explosive. Methane in the tunnels frequently causes casualties. Methane
indicators could avoid this. Such indicators are available on the international market. The
price is about 45 US$ each. This price can of course be negotiated if large quantities of
indicators are ordered. Carbon monoxide is also frequent in tunnels were coal seams are
mined. Cheap non-electronic indicators for carbon monoxide can be purchased and distrib-
uted to small-scale coals miners. This could be organized by the mining rescue officers.
Small-scale mining for fluorspar
Mongolia is one of the world leaders in mining of fluorspar (fluorite), and probably the
world's largest exporter of bulk fluorspar of metallurgical grade. Mongolian-Russian JV
"Mongolrostsevetmet" is the largest and leading fluorspar producer and exporter in Mongo-
lia. JV has an underground mine and processing plant at Bor Undur fluorspar deposit in
Hentii aimag (produces annually 120,000 tons fluorspar flotation concentrates of 95-97%
grade), and open pit mines at Airag, Orgon, and Hajuu Ulaan fluorspar deposits in Dor-
nogovi aimag. In total the JV produced in 88,500 tons of flotation conc., and 72,400 tons of
metallurgical grade fluorspar in 2002; and 123,600 tons of flotation conc., and 85,900 tons
background image
of metallurgical grade fluorspar in 2001. It is estimated that 2500 people are employed with
commercial companies mining fluorspar. Well over 500 small-scale miners carry out small-
scale mining of fluorspar.
Field investigations
The fluorspar deposits visited during the mission occur in an area south of Ulaan Baator.
The general pattern is that the potential areas for fluorspar are licensed. The license own-
ers employ small-scale miners to mine the fluorspar. The mining is exclusively done by
hand and the pits are often more than 5 meters deep. They mine with hammers and chis-
els, sometimes using explosives. The fluorspar ore is either broken to smaller pieces (~5
cm) on the spot or in nearby villages. This work is carried out by hand (Fig. 7). The fluor-
spar is then bagged. The bags hold about one ton of rock. Every now and then fluorspar
dealers mainly from the commercial mining companies come and buy the fluorspar.














G E U S
19
Figure 8.
Manual crushing of fluorspar ore
by young boys
Figure 9.
Bagged fluorspar
stockpiled

The license owner pays the small-scale miners about 3000 tugrug per ton. A group of min-
ers may mine up to about 20 ton of fluorspar per month. Crushing and trucking the ore cost
about 5000 tugrug per ton. This gives a total production cost of about 8000 tugrug per ton.
The final bagged product is sold by the license holder to the buyers for about 25.000 tugrug
(~25 US$) per ton.

Men mainly carry out the mining of fluorspar, whereas children mostly do the breaking of
fluorspar ore into small pieces and women often do the bagging.

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Needs assessment
The main problem in small-scale fluorspar mining is the lack of cash flow. Fluorspar is
mined throughout the year and stock piled until a buyer shows up (Fig. 9). This can easily
take several months during which period no cash is available for the license holder to em-
ploy workers.











Figure 10.
Stock piled fluorspar in Gobi Desert

If the Government could provide microcredits to the license owners this would ensure a
stable cashflow which would benefit the small-scale fluorspar miners.

A safety problem is that the tunnels dug by fluorspar small-scale miners are not secured.
Therefore the roofs frequently cave in causing injuries and causalities. Training of safe tun-
neling and supply of supporting timber or metal would solve some of these problems.
Small-scale mercury miners
This is a very special type of small-scale miners, which probably are unique to Mongolia.
Few other places, if any on Earth can small-scale miners recover mercury by small-scale
mining. This, however, is unfortunately the case in the Boroo river area North of Ulaan Baa-
tor.

Early in the previous century a Chinese company started mining gold from the Boroo River
area. They used mercury to extract gold. The mercury was stored in a big tank. Eventually
the company stopped and pulled out. In 1956 the tank exploded and the mercury ran out in
the Boroo river area. An estimated 10 tons of mercury was thereby discarded to the envi-
ronment. The mercury content of the area is so high so droplets of metallic mercury can be
seen on the surface.

Such high amounts of mercury are of course attractive to the gold small-scale miners and
some of them specialize in mining mercury form the Boroo River and sell the mercury to
small-scale gold miners. The amounts of mercury extracted by small-scale miners do not
meet the demand of mercury from small-scale miners in Mongolia. It is only a small extra


20
G E U S
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G E U S
21
source. Most of the mercury used by small-scale gold miners in Mongolia is smuggled into
the country mainly from China.

The high amounts of mercury in the Boroo river area pose a serious threat to the local
population. The investigation
7
carried out in 2003 showed that the mercury has traveled at
least 40 km downstream Boroo River towards several towns. The mercury continues travel-
ling down stream and will eventually reach Lake Baikal in Siberia. The river water and the
sediments in the river have mercury contents much higher than the recommended maxi-
mum values. Urine samples from the local population also show alarmingly high contents of
mercury. However, the investigation also demonstrated that most of the mercury is still at
the spill site.

This problem has been discussed with officials from Ministry of Nature and Environment,
Ministry of Trade and Industry, Ministry of Health, Ministry of Labour and Social Welfare
and with UNDP. The problem has also been discussed with several NGO groups. All in-
volved parties agreed that it is a serious problem and if an efficient clean up of the mercury
spill is not carried out in the near future the consequences will be serious. It has been con-
sidered to move groups of people away from the polluted area unless the mercury spill is
removed.

A pilot project has therefore been designed with the purpose of cleaning a limited area and
if the techniques applied works then a large clean-up project can be initiated. In the pilot
project a mercury extracting method will be used which has been designed in South Amer-
ica and has been tested in Brazil and Venezuela. The pilot project has been negotiated
with the Ministry of Nature and Environment in Ulaan Baator. See section below on sug-
gested pilot project of clean up of mercury in the Boroo river area.
7
Action research on mercury pollution in Boroo area Mongolia. Compiled by B. Tumenbayar for Japan
International Cooperation Agency Mongolia Office (2003)
8
Equipment Specification for the Demonstration Units in Tanzania by Marcello Veiga. UNDP Global
Mercury Project. Project EG/GLO/01/G34: Removal of Barriers to Introduction of Cleaner Artisanal
Gold Mining and Extraction Technologies.
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Gender issues
Small-scale hard rock gold mining
Previous investigations as well as investigations carried out during the present project indi-
cate that many children are active in small-scale gold mining. During the summertime fifty
percent of the small-scale gold miners are men and another fifty percent are women and
children. The percentage of children can not be discovered. When the schools start most of
the children are sent to school in villages and towns. They are looked after by relatives. In
hard rock gold mining men mainly carry out the mining whereas women and children break
the rocks, make gold concentrates and do the amalgamation.

Working with mercury in amalgamation is mainly done by women and children. Some of the
women appreciate that mercury as highly toxic, but nevertheless they touch it frequently
with their bare hands. During this project a teaching and training course was held in a small
town North of Ulaan Baator (see Annex 2 and separate chapter in this report). The course
mainly dealt with health and safety problems in small-scale mining for gold.

Working with mercury is dangerous to men and women. However, it is especially critical if
pregnant women work with mercury. The fetus upconcentrate the mercury. Thus if the
pregnant woman has so and so much mercury in her body the fetus will have ten times as
much. This means that pregnant women may show no or weak symptoms of mercury poi-
soning and yet the fetus may become permanently brain damaged.
Small-scale placer gold mining
This type of gold mining is carried out on a family basis, where father, mother and children
participate (Fig. 9). Thus the proportion of men is generally lower than fifty percent. How-
ever, during the winter season most children are sent to school and some of the women
follow the children back to the villages.












22
G E U S
Figure 11.
Child (11 years old) working as small-scale placer gold miner
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G E U S
23
Small-scale miners on gold placers claim that they do not use mercury. It is probably true
that the majority do not use mercury, but it is highly probable that some of them use mer-
cury and this number may very well increase when the small-scale miners realize that they
can extract more gold per ton of rock by using mercury. In Kyrgyz Republic almost all
small-scale placer gold miners use mercury.
Small-scale coal mining
In this type of small-scale mining no female small-scale miners were observed or reported.
Some children `steal' coal from the small-scale miners, but this can hardly be termed child
labor.
Small-scale fluorspar mining
All fluorspar mining is reportedly carried out by men, whereas children and women break
and bag the fluorspar ore.
Needs assessment
An obvious problem for women and children is the use of mercury. Especially for pregnant
women it is dangerous since the fetus concentrates the mercury relative to the mother. It is
thus important to explain the women about the danger of using mercury and teach them re-
cycle mercury. Children should be kept from handling mercury. The Ministry of Health in
Ulaan Baator pointed out that medical doctors in towns and villages do not know the symp-
toms of mercury poisoning. The Ministry thus suggested establishing training courses for
these medical doctors in order to assure good health conditions among the small-scale
miners and the general population.

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24
G E U S
Proposed mining law for small-scale mining
During the first in-country visit in May 2004 none of the officials in any of the visited Minis-
tries wanted to discuss the proposed mining law. The reason was the upcoming general
election for a new parliament in July 2004. During the second in country visit September-
October 2004 the general election had taken place and the new parliament had been es-
tablished. However, the cabinet had not been established. This means that not all ministers
have been elected and many of the officials in the Ministries do not know whether they
have their job tomorrow. Therefor the are all reluctant to discuss the proposed mining law
for small-scale miners.
Needs assessment
A small project to evaluate and discuss the draft mining law when the cabinet has been
established is urgently called for. Robin Grayson, compiler of the Canadian funded baseline
study of small-scale mining in Mongolia 2003 has made a big effort together with some
NGO groups making comments and suggestions to the draft mining law for small-scale
miners.
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G E U S
25
Teaching and training course for small-scale miners
and owners of gold extraction plants
October 4
th
a teaching and training course was carried out for small-scale miners and own-
ers of gold extraction plants in the Bornuur area about 150 Km North of Ulaan Baator in co-
operation with ILO and the NGO group Mongolian Employers federation (see Annex 2).
Prior to the course visits were paid to two gold extraction plants in the area. These plants
used slightly different techniques. At both plants the ore was delivered in small rock bits not
larger then a few centimeters. At one plant the ore was ground to less than one millimeter.
During the grinding about 5 kg of mercury was added per three to four ton of rock. The
overflow, which contains an estimated 30%, of the added mercury was deposited without
any security. The ground ore from the first mill was then delivered to the miners who con-
centrated the heavies and then burned off the mercury thereby recovering the gold. The
second plant only ground the gold ore. The small-scale miners received the ground ore.
They carried the ground ore to a nearby river. There they added mercury to the ground ore
and then concentrated the amalgam. Later they burned off the mercury and recovered the
gold.

20 small-scale miners turned up at the teaching and training course, which was held in a
school in the town of Bornuur. The small-scale miners were informed about the health and
environmental risks by using mercury. They were also told that investigations of urine sam-
ples from inhabitants of Bornur town showed alarmingly high contents of mercury. They
were thus very interested in learning how to recycle mercury by using a retort (see Annex
2).

After the teaching program the small-scale miners received a number of questions regard-
ing their working conditions. The questions were discussed in groups and a representative
from each group subsequently explained the opinion of the group. The questions can be
seen in Annex 3 as well as their answers and a list of participants in the training course.
Needs assessment
The outcome of the group working on the questionnaires was as follows.

The small-scale miners are not particularly interested in obtaining licenses. They fear it will
be too expensive.
They know that mercury is dangerous, but the have no knowledge on how to minimize the
risks. They would also like to have cheap access to ropes, safety helmets etc.
1. Transportation costs are a heavy burden on the budget of small-scale miners. Maybe
the local authorities could organize a form of collective transportation
2. The small-scale miners suggested that the Mongol Bank had branches where they
could sell their gold.
3. The small-scale miners are deeply worried about the lack of social security for them. In
case of accidents or casualties they are have serious problems surviving.
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26
G E U S
Workshop for government officials and parliament
members held at World Bank Ulaan Baator 7
th
Octo-
ber 2004
Agenda
14.30-14.45 Opening
Mr.Peter Appel, Consultant,
World Bank
14.45-15.00
Baseline survey of small-scale min-
ing in Mongolia
Mr. Robin Grayson, Eco-minex
International Co.Ltd
15.00-15.15
Role of mercury in small-scale min-
ing and how to minimize the health
and environmental problems
Mr. Peter Appel, Consultant,
World Bank
15.15-15.30 Discussion
15.30-15.45
Coffee break
15.45-16.00
Introduction of a future project:
Training courses fo rmedical doc-
tors and small-scale miners
Mr. Peter Appel, Consultant,
World Bank and Ms. Enkhsetseq,
Ministry of Health.
16.00-16.30
Introduction of a future project: Pilot
project on cleaning the Boroo river
for mercury
Mr. Peter Appel Consultant World
Bank, and Mr. B. Tumanbayar,
Sans Frontiere Progress Mongo-
lia
16.30-17.30 Discussion
17.30
Closing
Mr. Peter Appel, Consultant,
World Bank
The workshop was well attended, see Annex 4 for list of participants. The results of the
present project were described and the details of the two new projects were described and
discussed in much detail.
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G E U S
27
Brief summary of needs assessment
1. Fluorspar small-scale miners need microcredits to obtain an even cash flow.

2. Coal small-scale miners need methane detectors, equipment and help from mining
engineers to prevent caving in of their tunnels

3. Small-scale gold miners need teaching and training courses in recycling mercury and
help from mining engineers to prevent caving in of their tunnels.

4. Medical doctors need teaching and training courses for diagnosing symptoms of and
cope with cases of mercury poisoning.

5. Legalizing small-scale miners activities by a new mining law for small-scale mining

6. A major mercury spill in the Boroo River area North of Ulaan Baator needs a serious
clean up project.
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28
G E U S
Comments to the follow-up proposals
During meetings with parliament members and government officials from Ministry of Nature
and Environment, Ministry of Industry, Ministry of Labour and Social Welfare and Ministry of
Health it was obvious that the Government of Mongolia is deeply concerned with the prob-
lems of small-scale mining. A few regard small-scale mining as a passing phenomenon,
which will disappear in the near future. Another few are inclined to enforce the banning of
small-scale mining. However, the majority of government officials and parliament members
seem to agree that small-scale mining will not stop tomorrow, but may go on for decades or
even during most of this century. They therefor welcome the initiative of World Bank and
other international groups to teach the small-scale miners of Mongolia better working meth-
ods which will ensure that land degradation is minimized and the negative impact of small-
scale mining on the environment is reduced as much as possible.

Of special concern to the Government officials from all the involved ministries is the wide-
spread use of mercury by small-scale miners and the resulting release of large amounts of
the metal to the environment. The report on mercury pollution from small-scale mining in
the Bornuur area North of Ulaan Baator by the Japanese group has caused much concern
to the Government. All the Ministries have thus reacted very positive to the suggestions of
teaching and training small-scale miners in how to recycle mercury. One of the Ministries
was so enthusiastic so it arranged for manufacturing of a number of retorts for recycling
mercury. The manufactured retorts were then handed out during a training course held
during the mission in Bornuur town North of Ulaan Baator. The small-scale miners partici-
pating in the training course were very eager to use retorts. Bornuur town was a particular
good place to start the teaching and training program because the Japanese survey has
shown that the inhabitants of this town has very high contents of mercury in their urine and
that the mercury stems from amalgamation by small-scale miners.
The Ministry of Health in Ulaan Baator suggested to include a training program for medical
doctors in diagnosing mercury poisoning and to teach medical doctors how to treat mercury
poisoning. The Ministry also suggested to collect and analyze human tissue for mercury
and to establish a database on the results. The database would over time cover most of
Mongolia and help the Health authorities to establish a road map on how to reduce the
growing mercury pollution of the environment and the population of Mongolia.

The proposed teaching and training project for medical doctors and small-scale miners has
been discussed with the UNDP office and the Asian Development Bank office in Ulaan Ba-
ator. Both organizations were very positive. UNIDO in Vienna were likewise interested in
incorporating teaching and training of medical doctors and small-scale miners in Mongolia
in future teaching programs.
9
Action research on mercury pollution in Boroo area Mongolia. Compiled by B. Tumenbayar for Japan
International Cooperation Agency Mongolia Office (2003)
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G E U S
29
The Boroo river mercury spill is of deep concern to the involved Ministries. One attempt to
clean the area has been carried out, but with no success. This failed attempt actually
caused more harm than good in stirring up a lot of mercury-rich river sediments. The Minis-
try of Nature and Environment has placed the proposed pilot clean-up project of the mer-
cury spill of the Boroo River high on their priority list. The project proposal on a pilot clean-
up project of the Boroo river mercury spill has been discussed with the UNDP office in
Ulaan Baator and with the Asian Development Bank office in Ulaan Baator. Both groups
were very positive towards the project. A similar positive attitude came from UNIDO office
in Vienna.
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30
G E U S
Short description of a Training program for medical
doctors and small-scale miners in handling prob-
lems with mercury in Mongolia
Background
The most serious health and environmental problem caused by small-scale mining of gold
is the widespread release of mercury during the extraction of gold. Mercury is used by
small-scale miners themselves but also by owners of gold extraction centers in villages.
Inquiries at gold extraction centers in villages in the Gobi desert revealed that for each 3 to
4 ton of gold ore to be processed 5 kg of mercury were added in the milling process. The
owners of the gold extraction centers estimated that about 30% of this mercury were lost
with the tailings. The remaining mercury evaporated during the refining of gold. It is difficult
to estimate how much mercury is released to the environment in Mongolia each year. A
recent survey
10
showed that in the Bornuur area north of Ulaan Baatar about 500 kg of
metallic mercury was released to the environment every year. There is no indication that
the amount will decrease in the future. The mercury enters the drainage pattern and the
food chain. Alarmingly high amounts of mercury were found in soil, river water and river
sediments. Mercury causes considerable irreparable damage to humans. The Japanese
survey showed that the population in the investigated area had high contents of mercury in
their urine. In one investigated area the mercury pollution stems from an industrial source,
but in other areas the mercury pollution can definitely be ascribed to release of mercury by
small-scale miners.
It is suggested to initiate a teaching and training project not only for small-scale miners but
also for medical doctors who are not trained in symptoms of mercury poisoning. The project
is suggested to comprise the following items.
1. Teaching and training of medical doctors in soum and aimag centers outside the major
cities of Mongolia. The teaching will focus on the symptoms of mercury poisoning and
what precautions can be taken.
2. Teaching and training of small-scale miners and owners of gold extraction centers in
villages, soum and aimag centers. The teaching will focus on methods to recycle mer-
cury during amalgamation and on alternative methods, which do not involve mercury.
3. Teaching and training by international consultants of Mongolian counterparts (trainers)
4. Collection and analyzing blood and urine samples and establish a database for mercury
levels in the population of Mongolia.
5. Establish local information centers where the local population can seek information and
advice on problems related to small-scale mining. Produce hand out which people can
fetch at the information centers.
6. Discussing the problems of small-scale miners with local authorities in villages, soum
and aimag centers in order to create a more positive and cooperative attitude from local
authorities towards the small-scale miners.
10
Action research on mercury pollution in Boroo area Mongolia. Compiled by B. Tumenbayar for Japan
International Cooperation Agency Mongolia Office (2003)
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G E U S
31
Scope of Work
Task 1):
Teaching and training of medical doctors and local trainers
The program is suggested to consist of lectures, discussions on mercury toxicology and
risk assessment and management. In addition there shall be demonstrations of sampling
techniques for environmental and biological monitoring. The scope shall be to provide an
elementary but scientifically up to date introduction to mercury toxicity, risk assessment and
risk management.

The following components shall be included in the program:
1. General mercury toxicology
Physical and chemical properties of various mercury species
Human exposure routes, air, food, skin contact, and placental transfer
Distribution in the body and biochemical reactions
Excretion
2. Diagnostic criteria for acute and chronic mercury poisoning
3. Treatment and prevention
4. Consequences of long-time low-dose exposure
5. Risk assessment and risk management
6. International guidelines for safe exposure
7. Demonstration of sampling techniques for environmental monitoring (air) and biological
monitoring (blood and urine)
Before the start of the courses a handout containing a summary of the most important in-
formation shall be prepared and distributed to the participants.

Task 2):
Teaching and training of small-scale miners, owners of gold extraction centers and trainers
The program shall consist of lectures and group working where the small-scale miners will
discuss and specify the particular problems they are facing. The group workings shall also
comprise discussions on how to improve the working conditions for small-scale mines.

The following components shall be included in the program:
1. Demonstration of methods for recycling of mercury
2. Explanation of alternative methods for gold extraction
3. Improvement of sluices and sieving techniques
4. Basic geology course to facilitate the discovery of gold
5. Methods to recover gold from the mercury-rich tailings left from previous (?) gold ex-
traction
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32
G E U S
Outcome
The expected outcome of the project after two years can be summarized as:
1. Medical doctors and small-scale miners have been taught and trained in recognizing
the effects of mercury poisoning and recycling mercury or using alternative methods in
extracting gold
2. The mercury consumption by small-scale miners has decreased
3. Mongolian trainers are fully capable to continue teaching and training courses for medi-
cal doctors and small-scale miners
4. Training centers are established in soum centers and handouts will be printed
5. Database with information on mercury levels in the population of Mongolia established
Deliverables
During the project the following deliverables should be produced:

1. Handouts for participants of the teaching and training courses
2. PowerPoint presentations for the courses for medical doctors, small-scale mines and
owners of gold extraction centers
3. Compilation of the results from the group workings of the small-scale miners and own-
ers of gold extraction centers
4. Database for mercury contents in human tissue
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G E U S
33
Short description of a suggested Pilot Project:
Cleaning of a major mercury spill in Boroo River
area, Mongolia
Introduction
In 1913 a Chinese mining company started gold mining from river gravel in the Boroo area
about 60 km north of Ulaan Baatar. The company used mercury to extract gold. They
stored the mercury in a tank. In 1956, long after the company had ceased mining and could
be held accountable, the tank broke and released about 10 tons of mercury into the Boroo
River area. The mercury is slowly travelling downstream and dangerously high levels of
mercury in river sediments and river water have been detected more than 40 km from the
spill site. The population in the villages and towns downstream from the site use the pol-
luted river water for drinking, for watering cattle and for irrigation. High contents of mercury
in human tissue and urine have been detected in the people in villages and towns down-
stream from the spill site. The mercury spill will eventually reach Lake Baikal.
It is suggested to carry out a pilot project of cleaning a small area at the Boroo River for
mercury. The techniques employed have been developed in South America, where they
have proved very successful at a number of cases. If a pilot project at Boroo proves suc-
cessful, a full scale cleaning project should be carried out. The mercury spill is a serious
threat to the human population in the Boroo area and further North to Lake Baikal even if
the areal extent of the polluted soil and gravels is limited to 0.9 km
2
. It is not a major, long
lasting task to remove all of the mercury from the limited area are of the polluted site, but it
will have a positive impact on a very large area. If a pilot project proves successful then a
total clean up of the area can probably be carried out over a period of no more than a few
years.
Action
It is estimated that the technical part a pilot project can be carried out over a period of two
to three months. Prior to that will be a period of purchasing equipment and have the equip-
ment shipped to Mongolia.

A pilot project can be divided into five tasks.
Task 1):
Purchase of equipment, internationally and locally. The type of equipment must have been
tested and found efficient. Such equipment can be purchased from various places in South
America.

Task 2):
Sampling soil and analyzing its mercury contents.
Task 3):
Processing of an estimated 800 m
3
of soil mixed with appropriate amounts of water through
the mercury extraction unit.
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34
G E U S
Task 4):
An environmental assessment analyses should be carried out prior to and after completion
of the pilot project.

Task 5):
Reclaiming the test area and collect and analyze soil samples for mercury content.
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G E U S
35
Annex 1. People met
Mr. N. Algaa, Mongolian National Mining Association also Fluorspar Consortium LLC.
jonsh@mobinet.mn mongma@mobinet.mn
Ms. D. Amarjargal, Office, Industrial Policy and Coordination Department, Ministry of Indus-
try and Trade. Amar@jmail.co.jp
Mr. Magvanjav Bazaryn, Director of Mining office, Mineral Resources Authority of Mongolia.
mining@mram.mn
Mr. Baater Damdindorj, General Director, M and Diamond company. Baatarm@mobinet.mn
Mr. Bayantur Bat-Ochir, Senior officer. Ministry of Trade and Industry.
Mr. O. Chuluun, Director Geological Survey, Mineral Resources Authority of Mongolia. Ge-
ologyram@magicnet.mn
Mr. Sharav Dagva, Senior officer in charge of chemical safety, Department of Policy Im-
plementation Coordination, Ministry of Nature and Environment. Dagvas@yahoo.com
Ms. Ts. Delgertsoo, Business consultant, Mongolian Business Development Agency.
mbda@mongol.net
Ms. Enkhtsetseq Shinee, Officer in Charge of Public Health, Ministry of Health, Mongolia:
enkhtsetseg@moh.mng.net shinee_e@hotmail.com
Ms. D. Enkhtuya, Officer, Mining Office. Mineral Resources Authority of Mongolia. De-
menkh@yahoo.com
Ms. Ch. Erdenichimeg, Officer, Labour department, Mongolia Ministry of Social Welfare and
Labour. Ch_chimgee@yahoo.com
Mr. Kh. Ganbaatar, Executive Director, Mongolian Employers Federation.
monef@magicnet.mn
Mr. D. Jargalsaikhan, Chairman, Mineral Resources Authority of Mongolia.
mram@magicnet.mn
Mr. Saha Dhevan Meyanathan, Country Manager and Resident Representative for the
World Bank, smeyanathan@worldbank.org
Mr. Saijaa Nagnai, Director, Environmental Health Research Center, Public Health Institute.
tsengelma@yahoo.com.hk
Mr. A. Namkhai. Director-General of Environment and Sustainable Development Depart-
ment. denco@magicnet.mn
Mrs. L. Narantuya, General director, Public Health Institute, Ministry of Health of Mongolia
pub_health@magicnet.mn
Mr. Tsendsuren Okhindoi, Deputy Director, Policy and Regulation Department for Geology
and Mineral Resources. Mongolia Ministry of Industry and Trade. tebotse@yahoo.com
Ms. Navaan-Yunden Oyundar, Director International Cooperation Department, Ministry of
Nature and Environment. oyundar@mongol.net
Mr. B. Purevdorj, Officer International cooperation Department Secretary. Ministry of Nature
and the Environment. gigini@postmark.net
Mr. Robin Grayson. Eco-Minex International Co. Ltd. Emiweb@magicnet.mn
Mr. G. Tamir. Officer of Policy Implementation and Coordination Department. Ministry of
Nature and the Environment. tamir6226@yahoo.cim
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36
G E U S
Mr. Yadamtsoo Tsedenbaljir, Ministry of Nature and Environment, Department of Strategic
Plannig and Management.
Ms. Amar Tsetsegmaa, Economics officer, Asian Development Bank. Tamar@adb.org
Mr. Baatar Tumenbayar, Director Eco-minex, tumenba@magicnet.mn
Ms. U. Tuul, Head of Business Development Unit, Business consultant, Mongolian Busi-
ness Development Agency. mbda@mongol.net
Mr. O. Zorigt, General Manager, Mongolian National Mining Association
mongma@mobinet.mn
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G E U S
37
Annex 2. Technical description of recycling of mer-
cury
Mercury has been used for more than half a century in South America for extracting gold by
small-scale miners in the so-called amalgamation process. Amalgam is gold partly dis-
solved in mercury. The amalgamation process has spread to Africa and South-East Asia.
Recently amalgamation is also used in Central Asia e.g. Kyrgyz Republic, Mongolia and
China.
The process of amalgamation is very simple. Gold ore, either crushed hard rock, or placer
sand and gravel is first concentrated by various methods. This process discards the light
minerals and keeps the heavy minerals. The final product of this process is a concentrate
consisting of several different heavy minerals including gold. Next step is to discard all
other heavy minerals except gold. This is often done by amalgamation. Mercury is added to
the concentrate and is thoroughly mixed and stirred repeatedly. Gold in the concentrate
forms an amalgam with mercury. The amalgam is separated from the heavy minerals. The
amalgam is then put in a small spoon or iron cup and placed in a fire. The mercury burns of
and the gold is left. The gold is not completely pure. There is always a little mercury left in
the gold. Gold buyers deduct the estimated amount of mercury from the gold price.
The mercury, which has been burned off fall back on the ground and gradually, enters the
drainage system. There it is either directly introduced into the food chain as metallic mer-
cury or it is transferred by bacteria to the even more toxic methylated mercury. The
amounts of mercury released to the environment in Mongolia are alarmingly high exceeding
several tons.
A very simple devise has been invented in South America decades ago is used for recy-
cling mercury. It is called a retort (see box). It has been produced in numerous versions,
but the one described below is one of the cheapest and most robust types
11
It consists of a
few pieces of plumbing tubes and can be manufactured all over the Earth at minimal costs.
The amalgam is placed in the small cup (marked c). The long tube ends in a glass or tin
with water. When the cup is heated mercury evaporates and gradually condenses in the
container with water. 95% of the mercury can be recycled in this way. The retort is used
extensively in South America, Africa and South East Asia.





11
Equipment Specification for the Demonstration Units in Tanzania by Marcello Veiga. UNDP Global
Mercury Project. Project EG/GLO/01/G34: Removal of Barriers to Introduction of Cleaner Artisanal
Gold Mining and Extraction Technologies
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C
25 cm


Retort



An alternative method of gold extraction is acid treatment. This is a fairly new method seen
in operation in Kyrgyzstan and elsewhere. The concentrate mentioned above consisting of
heavy minerals including gold is dried and treated by a hand magnet. This removes more
than 90 % of the concentrate. The remaining 10 % consist of non-magnetic minerals and
gold. Concentrated nitric acid is added and heated. This dissolves what is left in the con-
centrate apart from gold. The process develops highly toxic nitrogen dioxide and it must be
carried out outdoors or in very well ventilated areas. The brown fumes of nitrogen dioxide
disintegrate rapidly to non-toxic components. The gold extracted by this process is very
pure without any contents of mercury. This gold therefor fetches a high price.
The method is used in different countries, but it has correctly been stated that there are
severe safety problems with the method. It is correctly pointed out that the nitrogen oxides
are highly toxic and can cause death if inhaled. It does thus require considerable technical
knowledge and skills to use the method. However, since the method is already in use in
Kyrgyzstan it may very well spread to Mongolia. Small-scale miners should thus be warned
against the risks involved when using the method. During a small-scale mining mission for
WB in Kyrgyzstan a hand out was prepared explaining the dangers of using acid treatment.
The hand out was printed and distributed by the Swiss Red Cross to village nurses in a
large part of Kyrgyzstan. The nurses could then contact local users of nitric acid.


38
G E U S
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G E U S
39
Annex 3. Teaching and training course for small-
scale miners and owners of gold extraction plant in
Bornuur town, North of Ulaan Baator 4
th
October
2004.
List of participants
Name
Location
Number
of
years, worked
in small scale
mining
Using mercury
for amalgama-
tion
1
Badamtsetseg
Ogoomor bag
2-3 years
Yes
2
Dolzodmaa
Ogoomor bag
1-2 years
Yes
3
Sarantsetseg
Ogoomor bag
2-3 years
Yes
4
Mongontsetseg
Mandal bag
3-4 years
Yes
5
Damdinbazar
Mandal bag
3-4 years
Yes
6
Tserenpil
Mandal bag
3-4 years
Yes
7
Ugtahbayar
Mandal bag
3-4 years
Yes
8
Ganbold
Ogoomor bag
5 years
Yes
9
Dulamsuren
Bichigt bag
3-4 years
Yes
10
Beejin
Bichigt bag
2-3 years
Yes
11
Otgonsuren
Bichigt bag
1-3 years
Yes
12
Jargal
Ogoomor bag
1-2 years
Yes
13
Bolormaa
Bichigt bag
3-4 years
Yes
14
Tsetsegdulam
Bichigt bag
4-5 years
Yes
15
Uranchimeg
Bichigt bag
4 years
Yes
16
Altanhuyag
Ogoomor bag
4 years
Yes
17
Tumenbayar
Ogoomor bag
3 years
Yes
18
Monhtulga
Ogoomor bag
3 years
Yes
19
Monh
Ogoomor bag
3 years
Yes
20
Batzorig
Ogoomor bag
3-4 years
Yes
21
Monhtsetseg
Ogoomor bag
4-5 years
Yes
22
Ariunzaya
Ogoomor bag
4-5 years
Yes
23
Purevsuren
Ogoomor bag
4-5 years
Yes
A questionnaire was distributed to the participants. They were divided into small groups.
They discussed the questions and each group selected one person to present the result of
their discussions.
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40
G E U S
Questionnaire was held among 20 small-scale miners. 40% of participants were 36-45
years old, 25% of participants were 26-35 years old, 25% of participants were 16-25 years
old, 10% of participants were 45-55 years old and 15% of them were men. As for the edu-
cation, all participants, except 1% percent, have secondary and primary education.

Participants were divided into 3 groups and each group has summarized their members'
answers into one presentation. Following are the summarized result of the questionnaire:
First question: Problems in obtaining license and your opinion on how to solve this
problem. They answered that they don't want to obtain license because of its compli-
cated process and expected high costs.
Second question: How is your knowledge on safety measures? Most participants an-
swered that they have general knowledge on safety measures. For example: it's dan-
gerous to use mercury, they should have proper lightning, water proof clothes, safety
helmet, rope, proper equipment for mining. But their knowledge was very low compared
to knowledge, which they should obtain and also they almost don't take any safety
measures.
Third question: Do you face lack of proper clothes? Answers were there's always lack
of safety clothes, but they couldn't afford to buy proper clothes.
Fourths question: How are the transportation cost for small-scale miners from sum and
bags to mining sites? Answers were, transportation cost to mining site is: 2.500 tugrug
for each person (5.000 tugrug for 2 way), 1.500-2.000 tugrug for one sack of rock and
totally it would be 8.000-10.000 tugrug. It's too much for them.
Fifths question: Do small-scale miners have opportunity to sell gold legally and for a fair
price? Answers were, it would be good if Mongol bank branches opened in their prov-
ince or movable bank collect gold from them and pay them fair price for the gold. When
they want to sell gold in banks in UB, they face many problems such as measuring gold
carat, purifying the gold and high transportation cost to city etc. At the present time they
are selling gold to individuals illegally and they pay very low price for the gold.
Sixths question: How is your knowledge about laws and regulations on small-scale min-
ing? Answers were: It is necessary to adopt law by the parliament to make them legal.
At least it would give them opportunity to have social insurance.
Seventh question: Is there any social guarantee for small-scale miners? Answers were
there are no social guarantee for small-scale miners. Government has to take meas-
ures to provide them social guarantee.

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G E U S
41
Annex 4. List of participants in a workshop on
small-scale mining for government officials and par-
liament members held at the World Bank, Ulaan
Baator 7
th
October 2004
List of Participants
No Name
Organization
1
Ms. Oyun
Vice speaker
2
Mr.Radnaa, Member
Parliament of Mongolia
3
Mr.Sukhbaatar, Member
Parliament of Mongolia
4
Mr. Damariran
Head Economic Standing committee
5 Ms.Sh.Enkhtsetseg,
Specialist
Ministry of Health
6
Mr.Bat-Ochir, Specialist
Ministry of Industry and Trade
7
Ms. Navaan-Yunden Oyundar
Ministry of Natur and Environment
8 Ms.Erdenechimeg,
Specialist
Ministry of Social Welfare and Labor
9
Mr.Tsedenbaljir, Specialist
Ministry of Nature and Environment
10
Mr.Damdin, Specialist
Ministry of Nature and Environment
11
Mr.Jargalsaikhan, Director
Mineral Resources Authority of Mongolia
12
Mr. Jargalsaikhan
National Security Council
13
Mr. Saijaa
Academy of Health
14 Ms.
Oyunbileg
ILO
15
Mr. Algaa, Executive director
Mongolian National Mining Association
16
Mr. Enkhbaatar
Ministry of Justice and Internal Affairs
17 Mr.Davaatsedev,
Former
Member
Parliament of Mongolia
18
Ms. Shurentsetseg
Academy of Health
19
Mr. Robin Grayson
Eco-Minex International Co.Ltd
20
Mr.Tumanbayar
Sans Frontiere Progress Mongolia
21
Ms. Tsetsegmaa
Economics officer, ADB
22
Mr.Peter Appel
Consultant of World Bank
23
Mr. Kh.Ganbaatar, Exec. Director
Mongolian Employers' Federation
24
Ms. Oyundadi
Mongolian Employers' Federation
25
Ms. Enkhtuya
Mineral Resources Authority of Mongolia
26 Ms.
Tsevel
Delgaetsoo
Mongolian Business Development Agency
27 Mr.
Erdenesaikhan
UNDP
28
Mr.S.Battulga,
Mineral Resources Authority of Mongolia
29
Mr. B. Magvanjav
Mineral Resources Authority of Mongolia
30
Mr. P. Zorigt
Mongolian National Mining Association
31
Mr. Tamir
Ministry of Nature and Environment
32
Mr. Janchiv
Security department of Nalaikh town
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It is sometimes hard to find your way in the Gobi Desert, then you must ask the locals which
way to drive.


42
G E U S
Rapport 2005/4, Small-scale mining in Mongolia