The Mongolian government expects to pass a new foreign direct investment law this year to streamline the approval of investments by foreign state-backed firms, according to a senior official. Saikhanbileg Chimed, a member of parliament and the chief of the cabinet secretariat, said, under proposed legislation, investment by foreign state-backed firms in Mongolia's strategic industries would be vetted by the Ministry of Economic Development. "The process is quite time consuming now, (and) the new law will simplify and quicken the process," he said, adding that the industries covered included banking, mining and telecommunications. Current law stipulates that foreign state-backed firms buying more than a 49 per cent stake in an asset in the industries need approval from parliament, he said. The parliament is in recess and will resume in October. The proposal to cut red tape comes as the country grapples with slower economic growth, as commodities prices, especially those of its key exports - coal and copper - fall. A marked economic slow-down in the mainland, its largest export market for the commodities, has not helped. The landlocked nation tightened its vetting of foreign investment - both by private and state-owned firms - in May last year, just before a parliamentary election that saw a change in government. The move was seen as a populist sop to gain votes amid a heightening of resource nationalism. In April this year, Ulan Bator revised the law to exempt privately owned foreign firms from the new restrictions. In addition to bureaucracy, repeated delays at Australian mining company Rio Tinto's giant Oyu Tolgoi copper and gold mine due to disputes with the Mongolian government dented foreign investors' confidence in the nation. Rio last week put on hold a US$5 billion underground expansion of the project after being told that the parliament would need to approve financing for the project, Reuters reported. Saikhanbileg Chimed said a meeting between representatives of the government and Rio was needed to resolve "technical issues". Mongolia was concerned about a US$2 billion cost blow-out from the originally budgeted US$4 billion, which has resulted in a much delayed dividend payout time frame for Ulan Bator, he added.