Consultancy service to conduct a policy research on the realisation of optimal mineral prices determination and government participation in strategically important mines
Reference: A1/CS/017
Client: Ministry of Finance
Category: Consultancy Service
Advertised: 2020.01.23
Deadline: 2020.02.06 17:00:00  

Ad Invitation

A. BACKGROUND

Mongolia has received a credit from the International Development Association (IDA) for the Strengthening Fiscal and Financial Stability Project (“SFFSP”). The development objective of Strengthening Fiscal and Financial Stability Project for Mongolia is to contribute to the Government of Mongolia’s efforts to strengthen fiscal and financial stability and improve the quality of expenditure. The project is designed into five components: (I) Strengthening Macroeconomic and Fiscal Management; (II) Improving the Efficiency of Public Financial Management; (III) Enhancing Financial Sector Stability; (IV) Strengthening the Social Protection System; (V) Project Management and Monitoring. The objectives are to: Strengthening fiscal responsibility and implementing relevant policy measures, improving fiscal discipline, strengthening the resiliency of the banking system, improving public expenditure quality in social protection, providing support for Project implementation, coordination, monitoring and evaluation, including, inter alia, audit arrangements, reporting requirements, procurement and financial management activities respectively. For more details, please refer to the Project Appraisal Document Report No. PAD2269.

A country’s reliance on its mining sector may have beneficial or detrimental effects on the country’s economic growth. Over the years, socio-economic development of Mongolia has become closely connected to the mining industry. The mining industry, as part of the policy to promote export-oriented industries, has been identified as a priority sector for the country’s economic development. Despite a series of past declines in commodity prices, the extraction of main mining products and the volume of exports did not fall sharply, and contributed positively to the country’s economy. As of 2018, the mining sector alone contributed one-fourth of the nation’s gross domestic product. 

Having an accurate understating of major mining products’ prices is vital to effective decision-making in state budget management. The reference price is a benchmark price set by the Government of Mongolia for the major mining products. It is also the basis for setting custom values for the mining products except for coal and iron ore. As a tool for the government to determine mining resources royalty; any reference price set higher than the fair value may negatively affect the overall competitiveness of those business in the field of mining. Therefore, analysing the short and/or long-term impact of reference pricing against the endpoints by both the government policy makers and the private sector is vital for the public finance management. 

Besides reference pricing, the optimal role of government in mining sector development is another area of growing debate among the country’s policy makers. The government needs to be more proactive, and take a more hands-on, strategic role in the mining sector development. However, an excessive degree of state intervention in the mining sector may hinder the overall economy. The Challenge of “Getting It Right” remains. 

B. OBJECTIVE OF THE ASSIGNMENT

The objective of this consultancy service is a) to critically appraise the methods to set reference price for the mining products as they are applied in different settings on selected mining industry outcomes internationally, and b) to conduct comparative analyses on mineral regimes (licensing, contracts, etc.) in the country’s context. 

C. SCOPE OF THE WORK

The scope of work has the tasks as follows: 

   1) Task 1: Inception report

      • Write an inception report after an initial review of relevant documentation. It sets out the conceptual framework to be used in an evaluation, the key evaluation questions and methodology, including information on data sources and collection, sampling and key indicators. The inception report also includes a timeline for the evaluation project and drafts of data collection instruments. The consultant will seek an approval from the component coordination consultant. 

   2) Task 2.1:Literature review on methods to set reference price

      • Conduct a detailed literature review on methods to set reference price for the mining products. A literature review should:

        - Be organised around a coherent set of questions;

        - Include the major classic studies related to the questions guiding the study;

        - Acknowledge the author’s biases, as well as the limitations of the review process;

        - Critically evaluate the quality of the research according to clear criteria;

        - Present critical evidences in the form of quotes, illustrations, graphs, and/or tables;

        - Present logical arguments and build a clear rationale for additional research;

        - Have an accurate and up -to-­date bibliography that adheres to recognised style guidelines;

      Task 2.2: Recommendation on developing method with Mongolian economic characteristics to set reference price

      • Write a recommendation report on developing a method with Mongolian economic characteristics to set reference price for the mining products. A method should: 

        - Have conceptual foundations and methodological implications have been presented in the relevant literature so far;

        - Provide an ideal way to incorporate expert judgment and quantitative information;

        - Be testable against data that were not used to estimate it and against data

        - that were not available when it was specified;

        - Be able to describe the events occurring after it was formulated and estimated, at least for a few quarters or years;

        - Incorporate other useful models as special cases;

   3) Task 3.1: Examination of socio-economic implications of mining settlement

      • Examine the socio-economic implications of mining settlement in the country’s context by comparing cases: Erdenet versus Oyu Tolgoi (long-distance commuting);

      Task 3.2: Comparative analyses on mineral regimes in the country’s context

      • Conduct a comparative analysis on mineral regimes in the country’s context to help the government policy makers to reach more favourable deal for host governments and the communities affected by the mining investment. A literature review should: The analysis is expected to:

        - Be well written, clearly structured and expressed in a way that suits the ministry staff; 

        - Be accurate, clear and objective on results and analysis;

        - Contain conclusions and recommendations based on findings;

          An analysis report should contain: 

          - Title page;

          - Executive summary/abstract;

          - Table of contents;

          - Introduction;

          - Body. The body of a science report contains the bulk of the information and writing. It typically contains the following:

          - Methods: a precise and concise explanation of what the consultant did. It is important that this is written in such a way that it could be replicated by other researchers;

          - Results: present assessment findings with appropriately and clearly presented graphs, tables, charts, and explanations;

          - Conclusion;

          - References;

          - Appendices;

   4) Task 4: Workshop 

      • Organise 2 workshops on a) Developed method with Mongolian economic characteristics to set reference price for the country’s mining products; and b) Comparative analyses on mineral regimes in the country’s context. 

D. DELIVERABLES

The key deliverables include but not limited to the reports for all tasks as specified under “Scope of Work” as follows: 

   1) Inception report;

   2) Literature review on methods to set reference price;

   3) Recommendation on developing method with Mongolian economic characteristics to set reference price for the mining products;

   4) Report on socio-economic implications of mining settlement in the country’s context;

   5) Comparative analyses on mineral regimes in the country’s context;

   6) Workshops on a) Method with Mongolian economic characteristics to set reference price for the country’s mining products; b) Socio-economic implications of mining settlement in the country’s context; and c) Comparative analyses on mineral regimes in the country’s context;

E. REQUIRED QUALIFICATIONS

The Consultancy service will be provided by a firm.The firm should ensure that the appropriately qualified experts are available, as required, for the tasks outlined. 

The Consulting firm must:

a) have proven track of successful consultancy projects in the field of research and economic analytics, 

b) at least 2 years operational track proven with the documentary evidence; and 

c) will have preferably previous satisfactory project experience related to the public-private entities and the international organisations. 

d) Excellent time management skills including ability to effectively manage and prioritise a diverse and complicated work load is expected.

It is also expected that the assignment will be led by an appropriately qualified team leader, accompanied by both key (at least 2 macroeconomic analysts) and supporting experts. 

The Consultant's team is expected to include the following key experts (the 'Key Experts'):

   • Key expert 1: Project Manager/Team Leader preferably with an advanced university degree or equivalent qualification, preferably with 10 years of previous professional experience in the field of social science discipline of business and economics, with comprehensive experience of similar assignments.  He/she should demonstrate management and administration experience, including experience with procedures of international financing agencies or similar (preferably the World Bank). Excellent command of written and spoken skills in both English and Mongolian is expected;

   • Key expert 2 and 3: 2 analysts with a master’s degree or higher qualification, preferably with 5 years of previous professional experience in the field of social science discipline of business and economics, with specific previous professional experience of similar assignments;

Where appropriate, the firm may arrange other professionals with appropriate skills and experience to work on the project, provided that they are supervised by the team leader. Be advised that the Consultant will bear sole responsibility for the consultancy services.  

Interested consulting firms should provide information demonstrating that they have the required qualifications and relevant experience to perform the Services.

A consulting firm will be selected in accordance with the Consultant’s Qualification-based Selection method set out in the World Bank’s Procurement Regulations for IPF Borrowers (issued July 2016,revised November 2017 and August 2018) and which can be found at www.worldbank.org.

Please submit the following documents no later than 17:00, February 06, 2020:

- Letter of Expressions of Interest;

- Company introduction along with a copy of state registration certificate;

- Evidence of specific experience and qualification information of the firm relevant to the assignment.

Expressions of Interest should be submitted in an sealed envelope and clearly marked “Expression of Interest for Consultancy service to conduct a policy research on the realisation of optimal mineral prices determination and government participation in 

strategically important mines, Reference number: A1/CS/017.

The submitted documents will not be returned to the applicants. Please note that incomplete applications would not be considered for evaluation. Only selected candidates will be contacted. Candidates can be interviewed. Detailed terms of reference can be requested from procurement@sffs.mn.

Contact address: Attn: Ms.L. Bayarmaa, Procurement Specialist, Strengthening Fiscal and Financial Stability Project. Room #204, Negdsen undestnii 8/2, 4th khoroo, Chingeltei District, Ulaanbaatar, Mongolia; Tel: 70120582

Contact Info

70120582

Attachments

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