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5.2. Policy of real economic sector developmentWithin the framework of Mongolia’s development priority 3:The development of real economic sectors will be aimed at achieving the Millennium Development Goals, acceleratingeconomic growth, and establishing a knowledge-based economy. The share of service and industrial sectors in GDP shall becontinuously increased and will reach 85 percent in 2015, 92 percent in 2021, and an economic structure similar to those ofmiddle income countries shall be created.5.2.1. Industrial development policy5.2.1.1. Development policies for geology, mining and minerals, and heavy industryActions shall be taken to exploit mineral deposits of strategic importance based on the use of advanced technologies,intensify economic development, improve the structure of economic sectors, and build up financial capacity and savings fordeveloping a knowledge-based economy.Phase one (2007-2015):Strategic objective 1. Mineral deposits of strategic importance shall be exploited. Pursue a policy that enables the Stateto hold over 51 percent of the share of those mineral deposits geological surveys and resource estimations of which were financedby the Government:• Start the exploitation of mineral deposits: copper and gold of Oyu Tolgoi, copper of Tsagaan Suvarga, coal of TavanTolgoi, silver of Asgat, nonferrous metals of Tsav, iron ore of Tumurtei, coal and bitumen of Choir-Nyalga, browncoal of Tsaidam, uranium of Mardai and Gurvanbulag, and other major deposits of strategic importance.• Increase the capacity of Erdenet Ore-dressing Corporation, and enhance the product processing.• Significantly increase the production of cathode copper and steel.• Start processing coking coal.• Master technologies for extracting fuel and petroleum from coal.• Increase the volume of oil extraction.• Improve the level of mineral raw material processing, and increase the production of end products.• Expand geological exploration and mineral surveys.• Create legal environment for halting the inclusion into economic circulation of those mineral deposits, which havelittle efficiency.• Create legal environment for activities to exploit mineral deposits by micro-mining methods based on principles ofbeing state regulated, environmentally freindly, safe for living environment.Strategic objective 2. Protect nature and environment in mining sector and maintain the ecological balance:• Improve the rehabilitation of mined areas.• Introduce unified standards for exploitation technologies.• Undertake ecological and economic assessment of land in use; improve the mechanism for estimating, imposing andmaking payable penalties for ecological damages, compensation payments and fees.• Improve safety and health conditions of mining, encourage and expand underground exploitation of minerals andprocessing of minerals deep underground.• Create and introduce incentives for mines that produce minimum waste and introduce advanced machinery andtechnologies.• Halt issuing special licenses for minerals exploitation in river outfalls, basins, forest zones, Gobi oasis, lakes andponds, memorable historic places in order to secure the ecological balance paying particular attention to reducingnegative effects including deterioration of surface and underground ecosystems, pasture deficiency caused byclimate change, mining production; take step by step measures to partially limit them in future; improve legalenvironment for developing responsible mining industry.Phase two (2016 -2021):Strategic objective 1. Intensify exploitation of mineral deposits of strategic importance, introducing advancedmachinery and technologies in mining and natural resource sectors; expand processing and sale of end products:• Introduce advanced, sophisticated technologies that maximize the utilization of mineral resources, produceminimum waste and are environmentally friendly.16