Mongolia legislates caps on foreign investment

Mongolia is capping foreign investment in certain industries, including mining, in an attempt to keep profits inside the mineral-rich nation’s borders.

Wall Street Journal (sub required) reports that Mongolia’s parliament has approved a new law that caps future foreign participation in some sectors:

When it goes into effect, the law will require foreign investors to obtain government review and parliamentary approval for investments at 49% and above into industries such as resources, finance, telecommunications and media, according to analysts in Ulan Bator. The cap is specific to deals valued above about $75 million.

The legislation comes ahead of elections set for June.

Reuters reported earlier this month that the provisions were watered down, fearing a backlash by foreign investors in the mining sector – the foundation of the country’s economy.

Last year gross domestic product  in the nation  of fewer than 3 million people  expanded by 17.3% and this year it should easily top 20% thanks to billions of dollars of foreign investment in the country’s coal, copper and gold mining industry.