The impact estimation of large mining projects using system dynamics methodology

Every year, countries around the world keep the economic and social balance and further prosper by implementing projects in all areas in accordance with their long-term and medium-term plans. Our country has planned a number of similar long-term and medium-term projects. For example, the ’Vision 2050 longterm development policy document of Mongolia’ envisages 157 projects with 9 basic objectives, and a number of medium-term projects planned for the five-year development plan for Mongolia in 2021-2025. This system dynamics model was developed to estimate the economic impact of 26 mega-projects in three sectors from these projects and to prioritize their implementation. Mining projects cannot be implemented on their own, and infrastructure projects (energy, roads, railways) need to be developed in parallel, so these large projects have been taken into consideration as well. For this model, the experimental simulation period will start in 2010 and will run until 2030. This means that a simulation analysis is made on general characterictics of the dynamics for the next 10 years based on the historical data and statistics from the previous 10 years. The system dynamics model for estimating the economic impact of the mega projects is built on 38 sectors consisting of 37 common differential equations with a total of more than 2,000 variable parameters that can generate and view some basic social, economic and environmental indicators of 21 aimags and the capital city of Mongolia individually. The model was developed using the system dynamics modeling method in the Vensim program, calculated using the Runge-Kutta 4th-order numerical method, and the social, economic, and environmental impacts of each of the major projects were demonstrated.