BCM 2019 January Monthly Meeting Recap

BCM 2019 January Monthly Meeting Recap

MONTHLY MEETING RECAP

 

The Business Council of Mongolia’s monthly meeting was held on Wednesday, 30 January 2018 at the Shangri-La with BCM Chairman B.Byambasaikhan hosting for an audience of around 120 members.

Today’s meeting focused on the Mongolian resource sector and expectations for 2019.

This was the first Monthly Meeting of 2019. The BCM’s membership drive is going well, with a renewal rate of 73% currently.

The BCM would also like to extend congratulations to Vice Chairman Cameron McRae on the birth of his child.

2018 was a transformative year for the BCM. Some of the major changes include:

  1. In July 2018, BCM had a Board retreat, after which the process of renewing mission statement of the organization began. The mission statement now reads as follows: “To deliver value for the public, the members, and the employees by advocating economic freedom and property rights provided by the Constitution of Mongolia and protecting and promoting the common lawful interests of members for a fair, stable, and internationally competitive business environment.” (BCM Charter, Article 1.6)
    • To realize this Vision, BCM will strive for the following (Article 1.8):
      • To equip members with an information platform that provides up-to-date policy and business research, training and knowledge sharing
      • To develop and promote economic and sector policy recommendations through engagement with the BCM members, the government and the wider public
      • To provide networking and other services that support doing business in Mongolia
  2. BCM underwent restructuring in 2018, and on 16 January 2019, the Board of Directors, Executive Committee, and Working Group Chairs were newly elected. The Board of Directors now comprises 15 members, each serving for a term of two years. Click here to view information on each member of the Board of Directors.
    In addition, each Board member will also serve as either as Chair or Vice Chair of a Working Group as follows:
    1. Banking, Finance and Capital Markets Working Group
      Chair:    R. Koppa, TDB
      Vice Chair:    D. Hulan – Tavan Bogd Group
    2. Economic Freedom and Competitiveness Working Group 
      Chair:    D. Jargalsaikhan, Gund Investment/TUSS Solution
      Vice Chair:    E. Orchlon – Clean Energy Asia
    3. Energy, Infrastructure and Connectivity Working Group
      Chair:    E. Temuulin, PwC Mongolia
      Vice Chair:    Ts. Tumentsogt – Ministry of Mining and Heavy Industry
    4. Growth and Innovation Working Group
      Chair:    Tatsuya Hamada – Mobicom Corporation
      Vice Chair:    Jon Lyons – Erdene Resources Corp
    5. Resources and Environment Working Group
      Chair:    Armando Torres, Oyu Tolgoi LLC
      Vice Chair:    P. Gankhuu – Erdenes Mongol
    6. Tax/Legal/Ethics Working Group
      Chair:    B. Solongoo, Avinex LLP
      Vice Chair:    D. Munkhtushig – Rio Tinto Mongolia
       
  1. The BCM Secretariat has also been strengthened, with the hiring of three new Directors. They are:
    • S.Ganzorig - Director of Policy and Planning
    • B.Javkhlan - Director of Working Groups
    • D.Sayan - Director of Board Affairs

The BCM invites companies to renew membership and for new companies to become members. BCM is a platform, and how you want to use this platform is up to you without limits.

PRESENTATION BY THE CHAIR OF BCM’S GROWTH AND INNOVATION WORKING GROUP MR. TATSUYA HAMADA, CEO OF MOBICOM: “TOWARD SMARTER SOCIETY” 

Click here to view the full presentation.


In 2019, the BCM will operate six Working Groups. The Growth and Innovation Working Group is a new working group chaired by Chairman and CEO of Mobicom, Mr. Tatsuya Hamada. Mr. Hamada has been in Mongolia for three years, hailing from Tokyo. His expertise is in information and communication technology (ICT).

“Innovation” is a term with broad meanings. However, the Working Group will strive to realize three things: 1) to educate and inform business entities, the government, and the public of the potential opportunities and challenges for research and development; 2) to promote and advance the benefits of business growth and innovation in Mongolian society; 3) to enable organizations to grow and innovate, not limited to those sectors ordinarily thought of as innovators (e.g. start-ups).

Many start-ups are initiated by young people, often just after school or university. Unfortunately, they lack experience, knowledge, and resources. In that case, we would like to support them, thereby supporting Mongolia’s economy from the bottom-up.

The world is undergoing a digital transformation, with things such as AI, RPA, blockchain, Internet of Things, Fintech, Industry 4.0, and Omni Channel. Google AI has defeated chess grandmasters. Fintech has revolutionized digital finance.

As for blockchain, many people think it is related only to bitcoin and other cryptocurrencies. However, its applications are much broader than just coins, which are only a part of its massive potential.

7 key objectives:

  1. Digitalization of services, processes, and business operations
  2. Infrastructure, both physical and virtual
  3. Digital financial services "fintech"
  4. Information and data security (storage, protection, secure privacy)
  5. Resource efficiency (people, energy, water, etc.)
  6. Roles of investment and public policy
  7. Intellectual property protection

Actions to be planned for the Working Group:

  1. Intake of interested BCM members into the Working Group
  2. Education/awareness raising session in March
  3. Events for key objectives (BCM Summit, ad-hoc)
  4. Dialog, guidance, and advisory for governmental organs

As a first step, the Growth and Innovation Working Group needs members. Thus, any and all interested individuals are encouraged to reach out. The first meeting will be held very soon, at which the Working Group will discuss what areas to focus on. Upon deciding that, goals and objectives will be set.

PRESENTATION BY P.GANKHUU, CEO OF ERDENES MONGOL, ON THE “LEGAL ENVIRONMENT OF ASSET MANAGEMENT”

Click here to view the full presentation (Mongolian only).

Erdenes Mongol, established in 2007, is a fully state-owned holding company for major state-owned enterprises, including ownership of Mongolia’s 34% stake in Oyu Tolgoi through Erdenes Oyu Tolgoi. A full list of companies under its umbrella can be found in the presentation linked above.

Mining is responsible for 22% of GDP and 72% of foreign investment. It also accounts for 74% of manufacturing and 90% of exports.

In addition to operation of state-owned assets, the company also implements management of assets, especially of strategic deposits. Furthermore, Erdenes Tavan Tolgoi will also issue 2 million additional preferred shares by 2024.

Work was initiated by regulators to clarify the legal environment, with Erdenes Mongol providing comments on what needs to be fixed. BCM Board member Solongoo is also engaged in this effort, noted Mr. Gankhuu.

The biggest focus of operations right now is the IPO of Erdenes Tavan Tolgoi, which will be conducted on the Hong Kong Stock Exchange.

Erdenes Mongol’s strategic objectives for 2018-2023 include 4 points:

  1. Hold licenses for strategic deposits and act on behalf of the government regarding government-owned stakes in such deposits
  2. Undertake projects and programs in energy, infrastructure, logistics, and processing industries
  3. Implement prudent asset management, attract investment, and finance projects
  4. Implement good corporate governance and ensure sustainable development

Another important goal is to export more value-added products, instead of export raw commodities.

The government has issued a directive to Erdenes Mongol last year to establish an investment fund.

There have been many impediments to growth and development, many of which can be attributed to an unclear legal environment. The company has been engaging government bodies to make the law clearer, eliminate contradictions and overlaps.

Erdenes Mongol will also be the head company which will be in charge of a sovereign wealth fund, which has been talked about for many years, but looks to be finally realized. However, the bill and other questions of legalities are still under development by lawmakers. As such, input from business and the public is still being considered by lawmakers.
 

PRESENTATION ON “RESPONSIBLE MINING” BY MR. ARMANDO TORRES, CEO OF OYU TOLGOI


Oyu Tolgoi is the single biggest investment in the mining business in the world. “OT is a showcase of best practices,” said Mr. Torres. The Brazilian CEO has been working in the mining business for 29 years, in countries all over the world.

Mr. Torres also serves as the Chair of the BCM’s Resources and Environment Working Group. Based on the charter of the Working Group, there are three elements of focus: 1) Defining and understanding the concept responsible mining, and sharing best practices; 2) Advocacy – how we build a platform that advocates for business interests; 3) Public relations – how we work to educate the public and stakeholders.

There are six criteria in the Responsible Mining Index:

  1. Economic development
  2. Business conduct
  3. Lifecycle management
  4. Community wellbeing
  5. Working conditions
  6. Environmental responsibility

Mr. Torres went on to outline how OT fulfills each of these criteria at Oyu Tolgoi:

Economic development

  • The company has spent USD 8.7 billion in-country since 2010
  • Implementing the “Made in Mongolia” strategy
  • Largest private-sector employer in Mongolia
  • Top taxpayer two years in a row

Business conduct

  • The Way We Work is who we are at Oyu Tolgoi and Rio Tinto
  • The way we work outlines how we deliver both our purpose and strategy
  • We have fair and transparent procurement and HR policies

Lifecycle management

  • At least 75 years of future operation
  • Clear roadmap towards the vision.
  • Careful and professional planning in every area.

Community wellbeing

  • USD 6.2 million spent on sustainable, long-term projects in 2018
  • Spent USD 413 million on procurement from Umnugovi since 2010
  • Constructed critical infrastructure for Khanbogd soum, including water, power, roads, healthcare and education
  • Over one-fifth of the workforce is from Umnugovi Province

Working conditions

  • Safety remains top priority, with an All Injury Frequency Rate at 0.16
  • Safest operation in Rio Tinto, winning the 2017 CE safety award
  • With legislative change allowing women to operate haul trucks and work in the Underground
  • Encourage Inclusion and Diversity

Environmental responsibility

  • 88% water recycles, used 0.4 cubic meters of water per ton of ore
  • Has rehabilitated a total of 1,557 hectares of land
  • Approximately 70 thousand saplings planter per annum

Focus areas of the Resources and Environment Working Group

  • Share best practices in responsible mining
  • Business associations, the government, and NGOs to work closely together
  • Align with the Government of Mongolia
  • Communication framework to educate the public on responsible mining and an investment-friendly environment
  • Support the GoM at international forums and events to attract future investors
  • Focus national forums at sharing best practices and attract potential investors

The challenge of advocacy is to influence regulators and lawmakers to create an environment to success in business and investment. To do this, alliances are important. The question is, what are the groups that can support us in this goal of advocacy? “We cannot be like us and them. We need to move together as ‘we’”, Mr. Torres stated.

On top of success in business and attracting investment, we must relay messages of success to people both domestic and international. Mongolia has experiences to share in best practices, and we must also let the world know of the potential of Mongolia as well as the successes thus far.

PANEL AND Q&A

BCM Vice Chairman Randolph Koppa moderated the panel discussion, with the presenters coming back on stage to answer questions.

When asked when the OT underground mine will be commission, CEO Armando Torres stated that construction is expected to be completed in 2022 or 2023, with sustainable production starting in 2024. An audience member then asked whether Oyu Tolgoi will be one of the projects in Rio Tinto’s big push for more robotics and automation. Mr. Torres replied that before making a large investment in robotics and automation, the company will look to improve efficiency in other ways first. One such focus is on data management and digital transformation. He did note, however, that OT does indeed employ state-of-the-art technology in its equipment, especially ones involved in tunneling and blasting. Regarding the cumulative impacts of mining, as opposed to the impact of one company or project, the CEO stated that one way the company is addressing this is by sharing best practices as a foundation.

Regarding BCM Working Groups, they have worked well in the past to provide information to those who are interested in keeping track of developments in a particular sector or tax issues, and will continue to serve this important function. The number of participants in a Working Group will depend on the interests of the members. As for advocacy, issues that are important would be raised through BCM management and driven in a more centralized approach in cooperation with the Working Groups. For instance, in the past, we established a united front with other business associations to raise a unified voice to lawmakers. Members should be business leaders from member organizations who can add knowledge and drive to the Working Group.

The one strict prerequisite for joining a Working Group is that you must be a member of the BCM.

Working Groups are now more sector-focused. There will be target areas that each Working Groups will take up, which we will then advocate for as BCM to government or to the public. The Working Groups will do the thinking, writing, and recommending. The Executive Committee will decide on what the appropriate advocacy approaches are: whether we use IFIs, embassies, NGOs, etc. We will also look at what we need to do manage our social profile and get messages out to the public – how we can be influential.

Before heading off to networking, Dr. Oliver Schnorr from Euro Khan asked Mr. Gankhuu a poignant question regarding rare earth minerals and the notion that the government plans to nationalize deposits. There is an intergovernmental agreement between Mongolia and Germany to support extraction of rare earth elements. Dr. Schnoor asked what guarantees Mongolia can give to ensure that these investments will be safe and secure.

Mr. Gankhuu stated that “there is no nationalizing” and that the government wants to discuss how they it can cooperate with private companies. Licenses for operations involving rare-earth elements are all owned by private companies in Mongolia. There is an economic committee under the German-Mongolian intergovernmental commission that will work on rare earth elements and other high-tech investments from Germany. Mr. Gankhuu stated that he believes he will head up this committee. These internal issues will be discussed and resolved before the next meeting near the end of May. Finally, he reiterated that right now, the most important thing we have to work on is the legal environment.

 


The BCM would like to extend our appreciation to all the presenters and attendees.

BCM NewsWire 785 – 2 June 2023

NEWSWIRE
 
NewsWire

Issue 785 –  2 June 2023
Top stories of the week

BCM NewsWire provides short summaries of news collected from around the world. Each article is kept to a maximum of 150 words for brevity, but click on the link next to “Source” to read the full article.

Economy

  • Mongolia-China Shivee Khuren-Ceke railway starts construction, benefiting coal exports

  • Mongolia to commence its first oil production in 2026

  • Mongolia making achingly slow progress in rare earth elements insiders say

  • Goverment Pays Special Attention on Revival of Industrialization

Politics

  • Mongolia raises the number of MPs to 126

  • Kyrgyz Foreign Minister Pays Official Visit to Mongolia

  • Government Funds’ Information Made Open

  • The renewed friendship between Bishkek and Ulan Bator

  • First Tripartite Meeting of Mongolia, Republic of Korea and USA Held

  • Development Bank Raises USD 75 Million by Issuing Private Bonds

  • Macron in Mongolia – valuable metal and a “one-man theater”? - Editorial

  • Mongolia’s Paper Fleet Is Helping Russia Dodge Sanctions - Editorial

  • Ambassador Of Mongolia Launched GTTCI – Mongolia Forum - Video

  • Balancing Policy Reforms for Sustainable Job Creation - Editorial

  • Mongolia embroiled in a major corruption scandal over the allocation of educational loans - Interview

  • More pride and less prejudice - Editorial

Business

  • XacBank Goes Public

  • Value-Added Tax in Mongolia

  • How a Mongolian Company is Providing Jobs and Hope for People with Disabilities

  • Domestic Flights to Get up to 70 pct Cheaper

  • Scooter rental service launches in UB

  • TMK Energy and Talon Energy complete drilling at Lucky Fox-3, Mongolia

  • Monthly volume-weighted average price of coal will be calculated and released to the public

  • Petro Matad – Chasing The Mongolian Raptors

  • We will double our production - Steppe Gold's Aneel Waraich on miner's next steps - Video

  • Why should businesses respect human rights? - Editorial

Global and Regional Trends

  • Asia's seaborne thermal coal imports hit record high as prices slip

  • Trio of critical signs point to global economic slowdown

  • British consortium to invest USD 9 billion in Indonesia mining, EV batteries, minister says

  • India’s GDP expanded 6.1 pct in 2022-23’s last quarter

  • Japan's Q1 GDP growth seen revised up on strong capex

  • OPEC+ unlikely to deepen oil supply cuts at June 4 meeting, sources say

  • Global factories struggle for momentum amid patchy demand

  • ESG investors push international firms to rethink Myanmar projects

  • How Taiwan became the indispensable economy - Editorial

BCM Updates

  • BCM Quarterly Report, Q1 2023

  • The BCM appoints Raphaël Goué as official BCM representative in Europe

  • UNICEF: Guidance for employers on flexible work arrangements and other good workplace practices in the context of Covid-19

  • UNICEF: Call for actions of the private sector to reduce children’s exposure to air pollution in UB

  • BCM Guideline for Companies to Combat Air Pollution

  • Member-to-member special offers & benefits

Economic Indicators

  • Inflation

  • Central Bank Policy Rate

  • Sovereign Credit Rating

  • Currency Rates
 
Sponsors:
 

 
 



 
 

ECONOMY

MONGOLIA-CHINA SHIVEE KHUREN-CEKE RAILWAY STARTS CONSTRUCTION, BENEFITING COAL EXPORTS

Mongolia has started construction of a 7.1-km railway linking Shivee Khuren and China's Ceke border port, which is likely to boost bilateral coal trades through the artery after it completes construction by late October, Mongolian media reported.
Shivee Khuren port handles 48% of the fuel exports to China, and construction of the railway project is expected to take 6 months, Mongolia's Prime Minister, Luvsannamsrai Oyun-Erdene said during his atendence in the groundbreaking ceremony.
Oyun-Erdene emphasized the strategic significance of connecting the Shivee Khuren with Ceke via the railway, as it marks the beginning of the west trans-border railway, a part of the China-Russia-Mongolia economic corridor.
With the completion of the cross-border railway, the port's export clearance capacity of cargoes is expected to double to reach up to 20 million tonnes, which will help to improve efficiency and reduce transportation costs.

Source: sxcoal.com, Mining Insight, RailFreight.com, Montsame
See also: China's Ganqimaodu's Mongolian coal imports exceed 12 Mt
China's Erenhot coal imports climb 117.5% YoY in Jan-Apr

MONGOLIA TO COMMENCE ITS FIRST OIL PRODUCTION IN 2026

On April 28, 2023, a significant event took place with the inauguration of the main technological and mechanical assembly of the Mongolian oil refinery's pipelines. This event marked a major milestone for the oil industry, as it brought together three key players - Mongolia, India, and China - to collaborate as a team. While there is a sense of friendly competition among them to drive development forward, their partnership underscores a shared commitment to advancing the oil industry collaboratively and sustainably. The opening ceremony commenced with D.Altantsetseg, the Executive Director of the Mongolian Oil Refinery, who started by greeting and shaking hands with the Mongolian, Indian, and Chinese workers and representatives who had contributed to the construction of the oil refinery.
In his opening remarks, he expressed his gratitude to the Government of BNR for their unwavering support of the project from its inception. We express our gratitude to Megha Engineering Limited and Norinco International Cooperation, both of China, for their continuous involvement in the construction of the Oil refinery.

Source: Mining Insight

MONGOLIA MAKING ACHINGLY SLOW PROGRESS IN RARE EARTH ELEMENTS INSIDERS SAY

Rare earth element (REE) resources in Mongolia are viewed by some observers as potentially very much part of the solution when it comes to countering China's global monopoly on these critical minerals. However, the likelihood of Mongolia becoming a major REE producer any time soon seems rather low due to several obstacles.
The most significant is the lack of proper policy and legislation to accommodate REE mining.
In a survey conducted in 2009, Mongolia's REE deposits were estimated as equivalent to 16.8% of known REE reserves worldwide, but the data was based on a general survey of all minerals rather than REE specifically. “It was an estimate because it was based on a general survey of all minerals, rather than a specific rare earth survey, but no other survey has been made on REE in the country,” said Dagva Myagmarsuren, a mining consultant at Qualified Management Consultants.

Source: bne IntelliNews

GOVERMENT PAYS SPECIAL ATTENTION ON REVIVAL OF INDUSTRIALIZATION

By the initiative of Prime Minister L. Oyun-Erdene, the National Conference on Industrialization has taken place today in the State Palace.
One of the key goals of the Government's "New Revival Policy" is "Revival of Industrialization." The main purpose of the Conference is to provide concrete solutions on a large scale for enhancing the utilization of energy and infrastructure potential and coordination of public and private sectors, which are crucial for the sector’s investment, legal environment, and the recovery of industrialization. Approximately 1000 domestic and foreign representatives are participating in the conference, which is co-organized by the National Industrialization Committee, Ministry of Mining and Heavy Industry, National Mining Association, and "Erdenes Mongol" Association.   
Prime Minister L. Oyun-Erdene underlined that the significance of this Conference is to determine the solutions to increase the export of mining products, which is a backbone of the country’s economy, and diversify the economy.

Source: Montsame

POLITICS

MONGOLIA RAISES THE NUMBER OF MPS TO 126

Mongolia will hold its parliamentary elections in spring of 2024.
At an irregular session 31 May, the parliament approved amendments to the country’s Constitution, which increased the number of MPs from 76 to 126.
According to the amendments, the parliament remains unicameral, but with 126 members, which is 50 more than the previous one.
Parliamentary elections will be held under a mixed electoral system. 78 members will be elected by majoritarian system or from constituencies, and 48 members by proportional system or party list.

Source: News.mn, Montsame
See also: Empowering the people: MEPs hear about constitutional transformation in Kazakhstan and Mongolia

KYRGYZ FOREIGN MINISTER PAYS OFFICIAL VISIT TO MONGOLIA

Minister of Foreign Affairs of the Kyrgyz Republic Zh.Kulubaev is currently paying an official visit to Mongolia, commencing on May 29 at the invitation by Minister of Foreign Affairs of Mongolia (MFA) B. Battsetseg.
Minister Zh.Kulubaev arrived at the Chingis Khaan International Airport, where he received a warm welcome from the Acting State Secretary and Director General of the Department of Public Administration and Management of MFA, S. Zoljargal and Ambassador Extraordinary and Plenipotentiary of Mongolia to the Kyrgyz Republic S. Ganhuyag, and other dignitaries.
The visit by Minister Zh.Kulubaev holds great significance as it marks a decade since the last visit by the Minister of Foreign Affairs of Kyrgyzstan to Mongolia. During the visit, Zh.Kulubaev will pay a courtesy call to the President of Mongolia Khurelsukh Ukhnaa, and the Foreign Ministers will hold official talks.

Source: Montsame
See also: Mongolian and Kyrgyz Banks to Cooperate in Digital Transition
President Receives Kyrgyz Foreign Minister
Foreign Minister Holds Official Talks with Her Kyrgyz Counterpart
 

GOVERNMENT FUNDS’ INFORMATION MADE OPEN

Today, Minister of Digital Development and Communications N. Uchral briefed the press on the Government funds of which information is made available on shilen.gov.mn under the Government’s Five W Campaign against corruption.
According to the Minister's presentation, all information on the Government Funds for Environment and Climate, Science and Technology, Crime Victim Compensation, Film Art, and Aid for Citizens Abroad has been fully uploaded to and updated on the website. In addition, information on the other four Government Funds, namely the Public Service Fund, Health Insurance Fund, Budget Stabilization Fund, and the Government's Reserve Fund, will be uploaded to the site for public access next week.
Minister of Digital Development and Communications N. Uchral said, "The Government provides over 25 funding schemes, but it should be noted that not all of them are funded by the Government. Indeed, we do need these funds. Most importantly, the target groups of the funds must be reached and benefit from them…

Source: Montsame

THE RENEWED FRIENDSHIP BETWEEN BISHKEK AND ULAN BATOR

After ten years without meeting, also due to ancient and recent grudges that have never been completely put to rest, the foreign minister of Kyrgyzstan, Zheenbek Kulubaev, met with his counterpart from Mongolia, Batsetseg Batmonkh, to officially discuss joint projects between the two countries, where the Turkish-Mongolian souls of Central Asia meet, as reported by the Middle Asian News agency.
The talks took place in a very friendly and fruitful atmosphere, in which the parties assessed the current conditions of Mongolian-Kyrgyz relations and looked for ways to revive cooperation at the national and regional level.
Batsetseg emphasised that, albeit in alternating phases, relations have developed very positively over the past 30 years since the end of the USSR, between two landlocked countries with different peoples, divided by the Chinese corridor of Xinjiang Uyghur.
Kulubaev expressed his thanks for the warm welcome, saying he was happy to finally be able to make this visit to a 'brother people' of the Kyrgyz.

Source: AsiaNews.it

FIRST TRIPARTITE MEETING OF MONGOLIA, REPUBLIC OF KOREA AND USA HELD

The first tripartite meeting between Mongolia, the Republic of Korea, and the United States was held in Ulaanbaatar on May 30.
The Mongolian side was led by Director of the Policy and Planning Department of the Ministry of Foreign Affairs G. Byambasuren, representatives of the Republic of Korea – by Director of the Department of Northeast Asia of the Ministry of Foreign Affairs Choi Yong jun, and the US representatives – by Assistant Secretary of the Department of State Mark Lambert. 
At the first meeting, the parties exchanged views on a wide range of regional and international security issues of mutual interest and agreed to cooperate in the fields of transport and logistics networks, energy, mineral resources, food security, climate change, and development cooperation.
The parties agreed to organize the tripartite meeting on a regular basis further and issued a joint statement.

Source: Montsame, Yonhap News

DEVELOPMENT BANK RAISES USD 75 MILLION BY ISSUING PRIVATE BONDS

In accordance with the Resolution No. 22 of April 24, 2023 of the Board of Directors of the Development Bank of Mongolia, capital equal to USD 75.0 million has been raised from foreign investors by issuing private bonds in OTC market. On May 12 of this year, an agreement was signed with "Mopane Securities" LLC, registered in London, and the aforementioned capital has been raised.
It was informed that investment without risks associated with foreign currency rate, i.e. issuing securities in MNT provides an opportunity to diversify the resources of the Development Bank and protect against the risk of foreign exchange rate fluctuations.
Out of USD 500 million “DBM 2023” bond USD 99.7 million was redeemed.
In 2018, the Development Bank of Mongolia issued USD 500.0 million worth "Euro" bonds or "DBM 2023" bonds with 7.25 percent interest rate to the international market independently without government guarantees. The bond is listed on the Singapore Stock Exchange and is publicly traded in international markets.

Source: Montsame

MACRON IN MONGOLIA – VALUABLE METAL AND A “ONE-MAN THEATER”? - EDITORIAL

On May 21, 2023, the first official visit of the President of France to Mongolia in the almost sixty-year history of relations between the two countries took place. The visit was accompanied by a number of “rituals of respect” – in particular, a solemn ceremony in the main square of Ulaanbaatar, as well as a trip by the French leader to the Genghis Khan Museum. At the end of the visit, a joint declaration was presented and the desire of the countries to achieve the level of “comprehensive strategic partnership” in bilateral relations was expressed.
Such “surprises” occur in Mongolian practice more and more often – as Jarantai Myadagbadam notes, in recent years the number of foreign visits to Mongolia of the highest and high levels has increased up to four times – primarily due to the so-called “third neighbors” of Mongolia – the developed countries of the West.  Since the beginning of the year, the US Secretary of State and the President of Poland have visited the country, and the President of Mongolia had a telephone conversation with the President of Ukraine.

Source: New Eastern Outlook

MONGOLIA’S PAPER FLEET IS HELPING RUSSIA DODGE SANCTIONS - EDITORIAL

Mongolia is the world’s second-largest landlocked country. On paper, though, it sails more than 3,000 ships. The North Asian country has established a shipping registry that, like other nations taking advantage of shipping’s sketchy rules, has become a preferred choice for a dubious clientele of shipowners.
he decades after the 1920s—when some U.S. companies began reflagging their ships to Panama to be able to serve passengers alcohol—saw decidedly modest maritime powers such as Panama, Liberia, and the Marshall Islands establish the concept of “flag of convenience,” as they allowed shipping companies from any country to register their vessels under their flags. The flag-of-convenience states made money, and the shipping companies could circumvent their own countries’ pesky rules and regulations. Today, Panama, Liberia, and the Marshall Islands are the world’s top three shipping countries measured by dead-weight tonnage.
Now Mongolia is gaining clients—especially shipping companies transporting sanctioned Russian goods.

Source: Foreign Policy

AMBASSADOR OF MONGOLIA LAUNCHED GTTCI – MONGOLIA FORUM - VIDEO

Mr. Dambajavyn Ganbold, Ambassador of Mongolia while inaugurating GTTC India – Mongolia Forum Saud that he is very happy to inaugurate that forum. He said that objectives of this important forum is very clear. They want to bring India – Mongolia closer, the people of two countries come much more closer based on that to bring opportunities and access to each other in buisness and other activities.
His excellency told TEN NEWS that they would like to start a Mongolian business newspaper in India and also Indian newspaper in Mongolia, it is mutually beneficial for two countries.
Ambassador of Mongolia also released the book ‘RIch History and Cultural of Mongolia’ writern by Gaurav Gupta. he said that there are lot of books about Mongolia but this book will translated into Hindi and will be distributed to more people which help the Indian people to know about the broader aspects of Mongolia.

Source: TenNews.in
See also: Bharat Express Chairman Upendrra Rai Attends The Launch Of GTTC India Mongolia Forum

BALANCING POLICY REFORMS FOR SUSTAINABLE JOB CREATION - EDITORIAL

Mongolia faces significant challenges in its labor market, including an aging population, low workforce participation, high unemployment rates, and low labor productivity. Recently, the Prime Minister met with private employers to discuss labor force issues and wage policies. As Mongolia seeks solutions, striking a balance between policy reforms and sustainable job creation becomes crucial.
Mongolia's heavy reliance on the public sector, where 22% of the employed population works, is unsustainable.
To address this, the government aims to outsource work to the private sector, reducing the burden on the government while creating job growth opportunities. However, concerns raised by private sector representatives regarding social insurance payment burdens and skill shortages must be considered.
Private sector representatives highlight the tax burden on employers and the scarcity of job-ready skilled workers. They fear that wage increases for public sector employees may disrupt the private sector's competitiveness.

Source: Mongolia Weekly

MONGOLIA EMBROILED IN A MAJOR CORRUPTION SCANDAL OVER THE ALLOCATION OF EDUCATIONAL LOANS - INTERVIEW

After facing the nation’s biggest corruption scandal in January 2023, the Mongolian government has its hands full with another major corruption case. The country’s media space blew up on May 16 with the report on systemic corruption surrounding the State Educational Loan Fund. Based on the audit data in the report, the fund has been ridden with violations and corruption since 1997, when it started issuing loans to students pursuing higher education abroad. The list of all loan recipients, including their names and remaining loan amounts, was published on May 22, further exposing the scale of corruption and mounting pressure to pay back the loans.
Independent investigation illustrates lack of transparency and competition in the allocation of loans. Global Voices spoke to Batnairambal Otgonshar, who was the first one to bring this case to the public’s attention, to learn about the State Educational Loan Fund and the corruption surrounding it. Batnairamdal is a former Deputy Minister of Mining and Heavy Industry of Mongolia and the International Secretary of the ruling Mongolian People’s Party.

Source: Global Voices

MORE PRIDE AND LESS PREJUDICE - EDITORIAL

Just as in other countries across the globe, being a member of the LGBTQI+ community in Mongolia can still expose one to harassment and physical assault. But the last few years has seen a seeming softening among many Mongolians — particularly the youth — toward LGBTQI+ people.
For instance, a 2021 study conducted by the private marketing research company Axon Neurolab found that 85.5 percent of Mongolian university students were not opposed to same-sex marriage, indicating a growing trend toward acceptance and tolerance of diverse sexual orientations and gender identities in the country. A 2019 baseline study by the United Nations Development Programme (UNDP) on gender equality in public administration also showed that public administrators’ understanding of gender rights had significantly increased, and gender rights, which were once seen as pertaining to women’s rights, have shifted to a broader scope. 

Source: Asia Democracy Chronicles

BUSINESS

XACBANK GOES PUBLIC

XacBank IPO, one of Mongolia's top 5 banks, is set to begin this week. Here are some key insights.
Must Knows

  • Valuation: XacBank aims to raise ₮37.5 billion by offering 5.01% of its shares to the public at ₮677 per unit. As a result, the bank will get valued at ₮712.7 billion after the IPO.
  • Allocation: The bank plans to allocate 70% of its IPO shares to strategic investors and the remaining 30% to the general public.
  • Subscription Period: May 29th - June 5th.
What sets apart XacBank?
  • High ROE: XacBank 's return on equity (ROE) for the previous year stood at 27.6%, surpassing the average of the Top 5 banks. Furthermore, the bank's total assets have grown by 13.4% over the past year, reaching ₮4 trillion.
  • Low NPL: XacBank boasts the lowest percentage of non-performing loans (NPL) among systematically important banks, with NPL standing at 4%.
  • Low ownership concentration: …

Source: Inside Mongolia
See also: XacBank, the first green bank in Mongolia

VALUE-ADDED TAX IN MONGOLIA

Our Mongolian lawyers have recently been assisting a company to register as a withholding Value-Added Tax payer in Mongolia. This post contains the questions that have arisen during that process, along with my answer.
A VAT withholding taxpayer may be an individual, legal entity or representative of foreign legal entity whose sale amount of goods, work or services in Mongolia has reached 50 million MNT or more. They obliged to withhold value added tax and pay to the government under the Mongolian VAT law. Whereas, the VAT payer is the last user, ultimately accountable for the VAT cost. If an individual or entity determined as a withholding tax payer, registration must be submitted to the relevant tax office within 10 working days of exceeding the amount of sale, and the tax authority will issue a VAT certificate to the individual or entity confirming its registration within 3 working days.

Source: LehmanLaw Mongolia

HOW A MONGOLIAN COMPANY IS PROVIDING JOBS AND HOPE FOR PEOPLE WITH DISABILITIES

  • Despite the passage of the Mongolian Law on the Rights of Persons with Disabilities in 2016, a large percentage of people with disabilities have yet to find their place in the Mongolian workforce.
  • Following a $15-million financing in 2020 to Mongolia's Ulaanbaatar Flour and Tavan Bogd Foods to help their operations during the pandemic, ADB provided an $18 million loan for the Tavan Bogd COVID-19 Food Security and Inclusive Job Creation Project.
  • ADB's funding not only helps ensure a stable supply of wheat flour and mitigate disruptions to the food supply chain in Mongolia, but also helps create a more disability and gender-inclusive workforce.

Employment opportunities for people with disabilities are limited in Mongolia, as they are in many countries. In this landlocked country of 3.4 million people, 42% of households with people with disabilities live in poverty, compared with 18% of households with persons without disabilities. Despite the Mongolian Law on the Rights of Persons with Disabilities that came into effect in 2016, employees with disabilities are not common in the Mongolian workforce.

Source: ADB

DOMESTIC FLIGHTS TO GET UP TO 70 PCT CHEAPER

MIAT, Mongolia’s state-owned flagship airline, has said it will restart regular domestic flights to destinations such as Choibalsan, Dalanzadgad, Murun, and Khovd from July. The government hopes the move will slash ticket prices to those places by up to 70%, boosting tourism and economic activity.
Hunnu Air and Aero Mongolia are the only two of the country’s 11 airlines that offer regular domestic flights, but the prices are prohibitive. A flight from Ulaanbaatar to Ulgii, the westernmost city home to ethnic Kazakhs, costs ₮1.6 million ($460), comparable to flights to Tokyo and Seoul.
Mongolia’s rural regions have long suffered from a vicious circle of poor connectivity and low economic activity. Aside from flights, they are only reachable by the country’s notorious road network which often breaks down and takes up to 36 hours.
As part of its efforts to boost tourism, the Mongolian government has implemented several initiatives to reform its air transport industry…

Source: Inside Mongolia

SCOOTER RENTAL SERVICE LAUNCHES IN UB

et Sharing Mongolia LLC introduced a scooter rental service in the capital city. A total of 3,000 scooters were planned to be placed on the streets and squares of Ulaanbaatar, and 700 of them are released on a trial basis. The project implementers will deploy all the scooters after understanding the demand and organizational structure.
The “Ninebot” model scooter, which allows the citizens of Ulaanbaatar to change their ride, is connected to a smart system or a special application and it also has a locator. To operate the scooter, the user must install the “Jet Scooter” application on their phone and create an account. After that, it will be possible to start the journey by loading the wallet with at least 4,000 MNT and scanning the QR code on the steering wheel. The first minute of renting a scooter is 500 MNT, and the second minute is 200 MNT. Specifically, a user who recharges the wallet with 4,000 MNT can ride a scooter for 18 minutes.

Source: The UB Post

TMK ENERGY AND TALON ENERGY COMPLETE DRILLING AT LUCKY FOX-3, MONGOLIA

  • TMK Energy (TMK) finishes up drilling at the Lucky Fox-3 well, completing the drilling phase at its Gurvantes XXXV CSG project in Mongolia
  • The final well intersected 68 metres of gassy coal, marking the thickest intersection of the three pilot production wells
  • The major drilling rig is being removed from the site as TMK prepares to install pumps and surface facilities for the commencement of production testing in July
  • After that, the wells will be commissioned, and then the dewatering process will begin, with the first gas breakthrough aimed for within one or two months after the wells are placed on pump
  • TMK shares are up 7.14 per cent and trading at 1.5 cents at 3:30 pm AEST, while shares in TPD are down 3.03 per cent and trading at 16 cents at the same time

Source: The Market Herald
See also: Talon Energy's partner wraps up pilot well drilling at Mongolian project safely, on time and on budget

MONTHLY VOLUME-WEIGHTED AVERAGE PRICE OF COAL WILL BE CALCULATED AND RELEASED TO THE PUBLIC

According to order No. A/79 of the CEO of the Mongolian Stock Exchange, dated May 23, 2023, the volume-weighted average price of each type of coal traded on the Mongolian Stock Exchange will be calculated on the last day of the month, and the information is available to the public through the COAL TRADE menu on the main website of the Mongolian Stock Exchange. 
Please click here to view the monthly VWAP for coal.

Source: MSE

PETRO MATAD – CHASING THE MONGOLIAN RAPTORS

The countdown has started as Petro Matad recently announced that it the rig for the drilling of its Velociraptor-1 exploration well is just days away from being onsite.
Investors are still excited that the £74.5m capitalised Petro Matad, which is focussed on oil exploration, development and production in Mongolia, could still be sharing very good news within the next two months.
At the current time, the Isle-of-Man based Petro Matad holds a 100% working interest and the operatorship of two Production Sharing Contracts with the Government of Mongolia.
The country’s leading explorer has 100% interests in production sharing contract blocks, including Ongi Block V that covers an area of approximately 7,937 sq kms; and Matad Block XX that consists of an area of approximately 218 sq kms in Mongolia.
Block XX is in the far eastern part of the country and Block V is in the central western part of the country.

Source: MasterInvestor.co.uk

WE WILL DOUBLE OUR PRODUCTION - STEPPE GOLD'S ANEEL WARAICH ON MINER'S NEXT STEPS - VIDEO

Steppe Gold has a lot of room to grow, said Aneel Waraich, executive vice president and director.
Waraich spoke to Kitco in mid-May.
Steppe Gold describes itself as Mongolia’s premier precious metals company.
Steppe commenced production in 2020 from the ATO Gold Mine, Phase 1 oxide zone, comprising 160k oz Au. The company recently updated its ATO Phase 2 expansion project to approximately 103,000 ounces of gold per annum, with a 12 year mine life, for a total of 14 years to 2036 at all-in-sustaining cost of $850.
"So we will essentially more than double our production profile from 2023 to 2025," said Waraich.  "In 2025 onwards will produce over 100,000 ounces per year at an industry-leading cost of $850 to $900 all in cost."
"That's more than our market cap...so a lot of growth opportunity. We think that the 12-year mine life will significantly grow as we continue to drill these deposits."

Source: Steppe Gold

WHY SHOULD BUSINESSES RESPECT HUMAN RIGHTS? - EDITORIAL

A respect for human rights is not just a moral obligation, but also a fundamental necessity for any business that seeks to operate in a just, inclusive, and sustainable environment. 
Businesses’ failure to respect and prioritize human rights in their operations could result in many adverse impacts on their employees, customers, and community. 
For instance, the near absence and lack of standard ramps has become a widespread human rights issue in Mongolia affecting various group of people including persons with disabilities despite the existence of building standards for construction companies. 
Businesses’ failure to pay their employees on time or not at all and injuries or even loss of lives caused by not complying with the proper safety standards are also serious violations of human rights. 
These are just some examples of how business operations could infringe on human rights or worse abuse it despite their critical roles and contribution to development of the country and creation of jobs. 

Source: UNDP

GLOBAL AND REGIONAL NEWS

ASIA'S SEABORNE THERMAL COAL IMPORTS HIT RECORD HIGH AS PRICES SLIP

Asia's imports of seaborne thermal coal surged to the highest on record in May as cheaper prices tempted buyers in the region's developing economies.
A total of 78.38 million tonnes of the fuel used primarily to generate electricity is likely to be offloaded across Asia in May, according to data compiled by commodity analysts Kpler.
This is the most in Kpler data going back to January 2017, while Refinitiv data also shows record imports in May in data stretching back to January 2015.
The robust May outcome comes on the back of strength in both March and April, with those two months being the second- and third-strongest months according to Kpler data.
Rising thermal coal imports come as seaborne prices for the fuel continue to decline, with two of the more popular grades slipping to 16-month lows in the week to May 26.

Source: Reuters

TRIO OF CRITICAL SIGNS POINT TO GLOBAL ECONOMIC SLOWDOWN

Three leading indicators, namely lower copper prices, the inverted U.S. yield curve and depressed shipping rates, have converged to warn of a slowdown in global economic growth.
The price of copper has recently fallen around 20% from this year's peak, according to an index based on three-month futures traded on the London Metal Exchange. Zinc similarly plunged 30% or so, and aluminum by about 20%.
Copper is used in a wide range of sectors, such as infrastructure, automobiles and consumer electronics. So movements in its price usually predict the overall health of the economy, giving the metal the nickname "Dr. Copper."
The slide in copper prices indicates concern over economic stagnation in China, which accounts for 60% or so of global copper demand. China consumes the metal primarily for copper wire in construction.
Chinese investment in real estate development fell 6.2% on the year for the January-April period.

Source: Nikkei Asia

BRITISH CONSORTIUM TO INVEST USD 9 BILLION IN INDONESIA MINING, EV BATTERIES, MINISTER SAYS

A British consortium that includes mining giant Glencore will invest about $9 billion in Indonesia's mining and electric vehicle (EV) battery sectors, a minister said on Wednesday, as the resource-rich country tries to lure a host of multinational firms.
Indonesia, which has the world's biggest nickel reserves, is keen to develop downstream industries with the ultimate aim of producing batteries and vehicles for the world's biggest electric car manufacturers.
Investment Minister Bahlil Lahadalia did not provide a breakdown of the $9 billion but said it would go into an industrial park in the Bantaeng region on Sulawesi island powered by wind energy, with a completion target of September.
The ministry confirmed the British consortium included firms such as Glencore, Indonesian state miner Aneka Tambang, materials company Umicore and energy company Envision Group.
"The investment is about $9 billion if it is according to plans. If we can speed it up we'll do it," Bahlil told reporters.

Source: Reuters

INDIA’S GDP EXPANDED 6.1 PCT IN 2022-23’S LAST QUARTER

India’s GDP growth accelerated to 6.1% in the January to March 2023 quarter, lifting the economy’s uptick in 2022-23 to 7.2% from the 7% estimated earlier, according to the provisional national income data released by the National Statistical Office (NSO) on Wednesday.
The Gross Value Added (GVA) in the economy is reckoned to have risen 7% in 2022-23, compared to 8.8% in 2021-22, with manufacturing GVA growth sliding to just 1.3% from 11.1% a year ago, despite a 4.5% rebound in the final quarter after six months of contraction.
Economists noted that though several sectors delivered a positive surprise, especially in the last quarter of the year, consumption remained tepid and the overall growth pattern remains uneven.
The farm and services sector buoyed economic outcomes as just three of eight broad economic activity segments recorded a higher GVA growth than in 2021-22.

Source: The Hindu

JAPAN'S Q1 GDP GROWTH SEEN REVISED UP ON STRONG CAPEX

Japan's economy likely grew more than initially estimated in the first three months of this year, thanks to solid investments by manufacturers, a Reuters poll showed.
Revised real gross domestic product (GDP) data is expected to show the world's third-largest economy expanded at an annualised rate of 1.9% in the first quarter, higher than a preliminary reading of 1.6%, according to the poll of 18 economists.
A forecast 1.3% increase in capital expenditure, larger than the provisional estimate for a 0.9% rise, would be the main driver of upgrade, analysts said. Ministry of Finance data on Thursday showed Japanese firms ramped up spending on plant and equipment in January-March at the fastest rate since 2015.
"Manufacturers' investments are growing vigorously on top of non-manufacturers' spending, suggesting that the global manufacturing downturn has not brought big impacts to Japan," SMBC Nikko Securities analysts wrote in a note.

Source: Reuters

OPEC+ UNLIKELY TO DEEPEN OIL SUPPLY CUTS AT JUNE 4 MEETING, SOURCES SAY

OPEC and its allies are unlikely to deepen supply cuts at their ministerial meeting on Sunday despite a fall in oil prices toward $70 per barrel, four sources from the alliance told Reuters.
OPEC+, which groups the Organization of the Petroleum Exporting Countries and allies led by Russia, pumps around 40% of the world's crude and supplies around 60% of the oil export market, meaning its policy decisions can have a major price impact.
As the economic outlook worsened, several members of OPEC+ in April pledged voluntary cuts starting from May and to continue to the end of the year.
This was in addition to a 2 million barrels per day (bpd) cut agreed in early October to output targets versus an August 2022 production baseline. It brought total output cuts to 3.66 million bpd, or about 4% of global consumption.

Source: Reuters

GLOBAL FACTORIES STRUGGLE FOR MOMENTUM AMID PATCHY DEMAND

Sluggish global demand deepened the decline in manufacturing activity across Europe and the United States and remained a major challenge for many of Asia's big exporters, business surveys for May showed on Thursday.
Purchasing managers' indexes (PMIs) for the euro zone moved further below breakeven despite factories cutting prices for the first time since September 2020. In Britain, output fell for a third month in a row and new orders declined at the fastest pace in four.
In the U.S., manufacturing contracted for a seventh straight month as new orders continued to plummet amid higher interest rates, but factories boosted employment to a nine-month high.
And while PMIs from China and Japan showed swings in factory activity to growth last month, they stood in contrast to weak indicators from South Korea, Vietnam and Taiwan, where declines continued.

Source: Reuters

ESG INVESTORS PUSH INTERNATIONAL FIRMS TO RETHINK MYANMAR PROJECTS

Pressure from investors concerned about environmental, social and corporate governance (ESG) issues, coupled with U.S. and European Union sanctions, is encouraging international companies to pull their cash out of Myanmar.
Indian conglomerate Adani Group announced the sale of a port project underway in Myanmar for just $30 million after critics said money from the project had been diverted to companies affiliated with Myanmar's military, which ousted the country's elected government in February 2021.
The project, undertaken by Adani Ports and Special Economic Zone, an Adani Group company, entails building a container terminal in Yangon, the country's commercial capital.
Promising to invest $290 million, the company obtained approval for the project from the Myanmar Investment Commission in April 2019, when Aung San Suu Kyi's National League for Democracy was governing the country.
Although the project is entirely private, the Indian government has been keeping a close eye on it as a counterbalance to China's infrastructure development in Myanmar.

Source: Nikkei Asia

HOW TAIWAN BECAME THE INDISPENSABLE ECONOMY - EDITORIAL

In the days after then US House Speaker Nancy Pelosi visited Taiwan last year, Taiwanese suppliers to American tech giants including Apple, Google, Meta and Amazon were inundated with requests from their customers. Could they produce from outside Taiwan to secure supplies, in case Beijing went to war over the island?
Pelosi’s visit had sparked more than a diplomatic spat between Washington and Beijing, which conducted unprecedented military exercises around Taiwan in response to her trip. It triggered a tech industry crisis, which may now threaten the global electronics supply chain.
“If anyone hits Taiwan, or there is a serious disruption . . . the tech and electronics industry worldwide is basically screwed,” says Hsieh Yong-fen, founder of chip and material testing provider MA-tek.
Taiwan is best known for making cutting-edge semiconductors. But its companies also turn out other crucial components from printed circuit boards to advanced camera lenses and they run huge device assembly operations in China.

Source: Financial Times

 

BCM QUARTERLY REPORT, Q1 2023

The Business Council of Mongolia delivers you its First Edition of the BCM Quarterly Report of 2023. The first edition covers all events organised by the BCM through the months of January - March. The fuller version of the articles can be found in the highlighted "details" part on the report.

PDF:  2023 First Quarterly Report 

Source: BCM

THE BCM APPOINTS RAPHAËL GOUÉ AS OFFICIAL BCM REPRESENTATIVE IN EUROPE

The Business Council of Mongolia is pleased to announce Mr. Raphaël Goué as an official BCM Representative in Europe.

Raphaël Goué is an expert in energy and banking, having spent more than 12 years in Asia as well as being involved in Europe-Asia cross-border projects since the mid-90s, with a focus on financial services, energy and telecommunications.

Mr. Goué has a wealth of experience in supporting global financial institutions and energy companies in their strategies in Asia, as well their development and M&A. He has previously held various positions in organizations such as Société Générale, Vivendi Universal, Booz & Co and Capital One in Europe, Africa and Asia. As a senior advisor of the global retail banking association EFMA, Raphaël has been supporting the development of banking’s leading association in selected Asian markets, and supporting EFMA in the fintech sector in Europe.

He holds an engineering degree from the École Nationale Supérieure de Géologie in Nancy, France, a master in material science from École de Mines de Nancy, and a MBA from HEC (Paris) he finalized at the Columbia Business School (New York).

The BCM is looking forward to expanding its reach to Europe with Mr. Goué’s leadership and assistance.
 

UNICEF: GUIDANCE FOR EMPLOYERS ON FLEXIBLE WORK ARRANGEMENTS AND OTHER GOOD WORKPLACE PRACTICES IN THE CONTEXT OF COVID-19


A family friendly workplace or employer is one whose policies and practices make it possible for employees and/or workers to more easily achieving work-life balance, and to fulfil both their work and family obligations. These policies may include, but are not limited to, childcare, breastfeeding rooms, flexible work arrangements, paid leave, safe transport, parenting education and so on. 
In Mongolia and various other countries, authorities have enforced kindergarten- and school closure policies as part of the preparedness and response to contain the COVID-19 epidemic. In addition to the impacts on children’s education, there are concerns about children’s protection and well-being as children are left alone or without adequate care as many parents still need to go to work. COVID-19 may also have negative effects on mental health and wellbeing of patients (if any), caregivers, children and adolescents and the public, such as experiencing fear of the consequences of infection with a new virus, and triggering stigma. Those placed in quarantine (or self-isolated) may experience boredom, loneliness, and anger.
By promoting flexible working arrangements such as adjusted working hours, working from home and/or support childcare, your employees will be in better position to address any childcare challenges and not be distracted by concerns about their children’s safety and wellbeing at home.

Click here to view in English.

Click here to view in Mongolian.

UNICEF: CALL FOR ACTIONS OF THE PRIVATE SECTOR TO REDUCE CHILDREN’S EXPOSURE TO AIR POLLUTION IN UB
 
Too many children are at risk of dying in UB due to air pollution each year. In addition to longer-term measures to reduce overall levels of air pollution in Ulaanbaatar, UNICEF recommends that companies address some of their CSR activities in the following ways:
  1. Provision of air purifiers to kindergartens, schools and clinics. Children spend a considerable amount of their time in school. Air purification systems are demonstrated to be effective in reducing air pollution levels within a home or classroom. Recent innovations have made these more affordable, durable and effective. Every classroom should have an air purifier.
  2. Provision of electric heaters to kindergartens, schools and clinics. Electric heaters can help to reduce ambient air pollution. Reducing financial barriers to access can also help improve use of electric heaters.
  3. Improved construction and insulation in kindergartens, schools and clinics. This can help reduce the amount of air pollution that enters facilities where children spend most of their time. It also saves considerably on heating costs. Studies show some improvements can decrease air exchange by up to 40%.
  4. Provision of air pollution monitoring devices in kindergartens, schools and clinics. Monitoring devices are often a first, major step to understanding one’s own risk to air pollution. It can not only inform improved practices to reduce exposure, but it is also an effective mechanism for communities to better understand what is causing air pollution, and when it is particularly harmful.
  5. Improved awareness and behaviour-change campaigns. Low awareness amongst communities about the impacts of air pollution on child health and how to respond is a key barrier to addressing the air pollution crisis. There is a need to influence policymakers, relevant government institutions, businesses, CSOs, development partners, and the general public (including families and children) about the risks that air pollution poses to their health, as well as provide guidance and recommendations on various ways to address some of the most immediate threats.
These actions will reduce children’s exposure to air pollution, safeguarding them from the worst impacts at the same time as building momentum and creating an enabling environment for longer plans that reduce air pollution. UNICEF will provide guidance on these recommendations where possible. UNICEF can also help facilitate connections between actors, agencies and institutions, including schools/ clinics where children are particularly affected. However, in order to maximize efficiency, these projects should be planned, developed, implemented and monitored by the private sector company involved. Nor will any funding go through UNICEF. This helps enhance accountability, and allows private sector donors to be more actively involved in the solution of directly supporting children in UB to breathe cleaner, healthier air.
For more information and guidance, please contact UNICEF for (Amy Wickham, This email address is being protected from spambots. You need JavaScript enabled to view it.; and Sunjidmaa Jamba, This email address is being protected from spambots. You need JavaScript enabled to view it.)
 
BCM GUIDELINE FOR COMPANIES TO COMBAT AIR POLLUTION

Purpose: This Guideline document is to help CEOs and business leaders quickly identify possible actions they can implement in their organizations against air pollution.

Resources for information on Air Pollution

Specific ACTIONS that companies can take NOW:

Educate employees about air pollution; invite guest speakers; encourage employees to share information with friends and family; discuss possible solutions with employees

  • Possible topics: damages and causes of air pollution, protection measures, energy consumption & efficiency; indoor air quality (smoking indoors); breastfeeding & healthy diet; vehicle idling; vehicle maintenance;

Work environment:

  • Improve energy efficiency in building/office to reduce energy consumption;
  • Plant & maintain trees; install air cleansing plants in the office;
  • Install HEPA air filter and air purifiers to tackle indoor air pollution (For an affordable solution, visit http://smartairfilters.com/mn/en/;
  • Install monitoring devices;
  • Smart Air Mongolia masks

Work activities:

  • Ensure company vehicles are well maintained to reduce pollution emissions;
  • Drivers/employees instructed to not idle & to turn off vehicle engine when not moving;
  • Implement carpooling activities;
  • In polluted air, ensure employees wear pollution masks;

Social responsibility:

  • Focus CSR (corporate social responsibility) initiatives to tackle air pollution
  • Tackle air pollution in UB: UNICEF recommends focusing on areas where children are especially affected, and where urgent interventions need to be put in place to protect them as soon as possible. These include the provision of air filtration systems and electric heaters in kindergartens and schools in some of the worst-affected regions. For more information and guidance, please contact UNICEF for (Nicholas Rees, This email address is being protected from spambots. You need JavaScript enabled to view it.; and Sunjidmaa, This email address is being protected from spambots. You need JavaScript enabled to view it.);
  • Run marketing/PR campaigns & contests that raise awareness about air pollution.

List of distributors for pollution masks:

  • BRB – 70119967, 99658555
  • BOX shop – 99062387, 75557007, 90878111 – Facebook: RZ утааны маск
  • CATD LLC – 11327308, 99114346
  • Mmarket – 75758001 – Facebook: Утааны Маск
  • MONOS Pharmacy – 99190858
  • Seven summits – 11317923
  • 3M Mongolia Premier Service - 9400-3088, 9910-3335
  • Utaanii Mask – 99906643 – Facebook: Утааны маск + Агаар шүүгч
  • Cycling World Mongolia LLC authorized distributor of RESPRO pollution masks- 77110444
​MEMBER-TO-MEMBER SPECIAL OFFERS & BENEFITS:
 
- Orchuulga 24 is providing a 15% discount on written translation services to BCM Members
- Ombol LLC is offering free Hepatitis C medication to employees of BCM member organizations, provided that the individual pays into state health insurance.
 

ECONOMIC INDICATORS

HISTORIC ANNUAL INFLATION

Year 2009   *4.2% [source: NSOM]
Year 2010 *13.0% [source: NSOM]
Year 2011 *10.2% [source: NSOM]
Year 2012 *14.0% [source: NSOM]
Year 2013 *12.5% [source: NSOM]
Year 2014 *11.0% [source: NSOM]
Year 2015   *1.9% [source: NSOM]
Year 2016   *1.1% [source: NSOM]
Year 2017   *6.4% [source: NSOM]
Year 2018   *8.1% [source: NSOM]
Year 2019   *5.2% [source: NSOM]
Year 2020   *2.3% [source: NSOM]
Year 2019   *13.4% [source: NSOM]
*Year-over-year (y-o-y), nationwide

CENTRAL BANK POLICY LOAN RATE

December 31, 2008 - 9.75% [source: IMF]
March 11, 2009 - 14.00% [source: IMF]
May 12, 2009 - 12.75% [source: IMF]
June 12, 2009 - 11.50% [source: IMF]
September 30, 2009 - 10.00% [source: IMF]
May 12, 2010 - 11.00% [source: IMF]
April 28, 2011 - 11.50% [source: IMF]
August 25, 2011 - 11.75% [source: IMF]
October 25, 2011 - 12.25% [source: IMF]
March 19, 2012 - 12.75% [source: Mongol Bank]
April 18, 2012 - 13.25% [source: Mongol Bank]
January 25, 2013 - 12.50% [source: Mongol Bank]
April 8, 2013 - 11.50% [source: Mongol Bank]
June 25, 2013 - 10.50% [source: Mongol Bank]
July 30, 2014 - 12.00% [source: Mongol Bank]
January 14, 2015 - 13.00% [source: Mongol Bank]
January 14, 2016 - 12.00% [source: Mongol Bank]
May 6, 2016 - 10.50% [source: Mongol Bank]
August 18, 2016 - 15.00% [source: Mongol Bank]
December 19, 2016 - 14.00% [source: Mongol Bank]
June 15, 2017 - 12.00% [source: Mongol Bank]
December 22, 2017 - 11.00% [source: Mongol Bank]
March 23, 2018 - 10.00% [source: Mongol Bank]
November 27, 2018 - 11.00% [source: Mongol Bank]
March 11, 2019 - 10.00% [source: Mongol Bank]
April 13, 2020 - 9.00% [source: Mongol Bank]
September 14, 2020 - 8.00% [source: Mongol Bank]
November 11, 2020 - 6.00% [source: Mongol Bank]
January 1, 2022 - 6.50% [source: Mongol Bank]

SOVEREIGN CREDIT RATING

Moody’s Fitch S&P
B3     – stable – 16 Mar 2021
B3     – negative – 8 May 2020
B3     – stable – 18 Jan 2018
Caa1 – stable – 30 Mar 2017
Caa1 – neg. watch – 15 Feb 2017
Caa1 – stable – 18 Nov 2016		 B   – stable – 9 Jul 2018
B-  – positive – 17 Nov 2017
B-  – stable – 22 Nov 2016
B   – stable – 24 Nov 2015
B+ – negative – 13 Dec 2013		 B   – stable – 10 Nov 2018
B-  – stable – 19 Aug 2016
B   – stable – 03 Nov 2015
B+ –   neg.  – 29 Apr 2015


CURRENCY RATES –  1 June 2023

Currency     Rate
U.S. dollar USD   3,447.50
Euro EUR   3,679.86
Japanese yen JPY   24.67
British pound GBP   4,261.63
Hong Kong Dollar HKD      440.14
Russian ruble RUB        42.63
Chinese yuan CNY      485.00
South Korean won KRW          2.60
Copyright © 2023 *Business Council of Mongolia*, All rights reserved.

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BCM NewsWire 784 – 26 May 2023

NEWSWIRE
 

NewsWire

Issue 783 –  19 May 2023
Introducing BCM's AI-generated video of top news stories of the week.

BCM NewsWire provides short summaries of news collected from around the world. Each article is kept to a maximum of 150 words for brevity, but click on the link next to “Source” to read the full article.

Economy

  • GDP increases by 7.9 pct in the first quarter of 2023 y/y

  • Household real income decreases 3.9 pct y/y

  • Foreign Trade Turnover Reaches USD 7.7 Billion

  • Gross industrial output down 11.2 pct m/m, up more than double y/y

  • Fitch Affirms Mongolia at 'B': Outlook Stable

  • Can Mongolia ‘survive’ and protect the economy during net-zero transition? - Editorial

  • Enduring Earth: Protecting Mongolia’s Grasslands - Video

Politics

  • President of France Emmanuel Macron to Visit Mongolia

  • Citizens' opinions collected on possible constitutional amendment

  • Vietnam holds important position in Mongolia's foreign policy: official

  • Mongolian peacekeepers support refugees return home in South Sudan from war-torn Sudan

  • Government Takes Steps towards Salary Equality

  • United States Launches New Grant Program to Advance Clean Energy in Mongolia

  • The Current State of Migration to Mongolia

  • Slovenian-Mongolian Parliamentary Friendship Group Established

  • UB Mayor: Partnership between Ulaanbaatar and Seoul to be brought to a new level - Interview

  • Dornogovi province will establish a new standard for collaboration with mining companies - Interview

  • Dr. D. Altantsetseg: The Refinery Project Moves Forward to Construction Phase - Interview

  • Will North Korea’s Foreign Minister Visit Mongolia This Year? - Editorial

  • Mongolia shows Canadian foreign policy dominated by mining companies - Editorial

  • Unveiling the Path to Preventing Conflict of Interests - Editorial

Business

  • Primary market trading of “Trade and Development Bank of Mongolia” will start

  • Prague to Ulaanbaatar direct flights launching this June

  • Action plan for increasing participation of Top-100 companies in the capital market approved

  • EBRD and Khan Bank promote women entrepreneurship in Mongolia

  • TMK Energy and Talon Energy complete drilling at Lucky Fox-2, Mongolia

  • Steppe Gold unveils positive financial results for first quarter of 2023, outlines future outlook

  • Elixir Energy to expand Nomgon Pilot Project as commercial potential for CBM grows in Mongolia

  • EBRD promotes new retail format in Mongolia with GS25

  • IT Companies Consortium to Take Part in Online Coal Trading

  • EBRD and XacBank continue green lending partnership in Mongolia

  • There are no standards set in tourism services - Editorial

Global and Regional Trends

  • Global warming set to break key 1.5C limit for first time

  • Chile greenlights mining tax reform that boosts government take

  • Japan Q1 economy expands annualised 1.6 pct qtr/qtr

  • Global debt nears record highs as rate hikes trigger ‘crisis of adaptation,’ top trade body says

  • Copper and zinc sink to fresh lows amid China economic uncertainty

  • G-7 set for a show of resolve in Hiroshima: 5 things to know

BCM Updates

  • BCM Quarterly Report, Q1 2023

  • The BCM appoints Raphaël Goué as official BCM representative in Europe

  • UNICEF: Guidance for employers on flexible work arrangements and other good workplace practices in the context of Covid-19

  • UNICEF: Call for actions of the private sector to reduce children’s exposure to air pollution in UB

  • BCM Guideline for Companies to Combat Air Pollution

  • Member-to-member special offers & benefits

Economic Indicators

  • Inflation

  • Central Bank Policy Rate

  • Sovereign Credit Rating

  • Currency Rates
 
Sponsors:
 

 
 



 
 

ECONOMY

GDP INCREASES BY 7.9 PCT IN THE FIRST QUARTER OF 2023 Y/Y

In the first quarter of 2023, by preliminary estimation of the production approach, Gross Domestic Product (GDP) at current prices was MNT 13.6 trillion, which increased by MNT 4.0trillion (42.1%) compared to the same period of the previous year. GDP at 2015 constant prices was MNT 5.6 trillion, which is increased by MNT 413.6 billion (7.9%) compared to the same period of the previous year.
GDP at 2015 constant prices decreased by 3.9% in the first quarter of 2022 while increasing by 7.9 in the first quarter of 2023.
In the first quarter of 2023, seasonally adjusted GDP at 2015 constant prices increased by 0.8% compared to the previous quarter.
In the 7.9% increase in the first quarter of 2023, the agriculture sector contributed -0.2 percentage points, the mining and quarrying sector contributed 5.3 percentage points, industry and construction sectors contributed -0.3 percentage points, the service sector contributed 3.8 percentage points and net taxes on products contributed-0.7 percentage points.

Source: NSO
See also: Mongolia Shows Promising Economic Growth Boosting Current Administration Ahead of 2024 Elections

HOUSEHOLD REAL INCOME DECREASES 3.9 PCT Y/Y

According to the result of the Household Socio-Economic Survey in the first quarter of 2023, the monthly average household income was MNT 1.9   million, increased by MNT 101.1 (5.7%) thousand compared to the same period of the previous year and increased by MNT 39.9 (2.2%) thousand compared to the previous quarter.
In the first quarter of 2023, the average monthly real income (price changes adjusted) reached 1.2 million MNT, decreased by MNT 47.5 (3.9%) thousand compared to the same period previous year and increased by MNT 13.5 (1.2%) thousand compared to the previous quarter. The 3.9% decrease from the same period previous year was mainly resulted from MNT 52.6 (15.9%) thousand decrease in real income from pensions and allowances.
The monthly average household monetary income in the first quarter of 2023 was MNT 1.8 million, increased by MNT 134.3 (8.2%) thousand compared to the same period of the previous  year.

Source: NSO

FOREIGN TRADE TURNOVER REACHES USD 7.7 BILLION

In the first four months of this year, Mongolia traded with 134 countries. Foreign trade turnover amounted to USD 7.7 billion, of which export is USD 5.1 billion and import USD 2.7 billion.  
Total turnover increased by USD 2.6 billion (50.5%), specifically exports by USD 2.3 billion (81.8%), and imports by USD 310.5 million (13.2%) compared to the same period of the previous year. However, in April of this year, exports decreased by USD 198.7 million (13.1%), and imports by USD 20.2 million (2.7%) compared to the previous month.
The foreign trade balance in the first four months of 2023 indicated a surplus of USD 2.4 billion, an increase of USD 2 billion (5.4 times) compared to the same period of the previous year. However, in April of this year, there was a profit of USD 597.7 million, which decreased by USD 178.5 million (23%) from the previous month.

Source: Montsame, NSO

GROSS INDUSTRIAL OUTPUT DOWN 11.2 PCT M/M, UP MORE THAN DOUBLE Y/Y

By the preliminary results, in the first 4 months of 2023, the gross industrial output reached MNT 10.8 trillion, which increased by MNT 5.7 trillion (2.1 times more) from the same period of the previous year.  This increase was mainly due to the mining and quarrying production output increase by MNT 5.2 trillion (2.6 times more) and the manufacturing production output of 279.7 billion (23.0%), respectively.
By the preliminary results, in the first 4 months of 2023, the mining and quarrying gross output reached MNT 8.5 trillion, which increased by MNT 5.2 trillion (2.6 times more) from the same period of the previous year. This increase was mainly due to increases in coal and lignite mining by MNT 4.3 trillion (8.6 times more) and mining of metal ores by MNT 468.2 billion (17.7%) from the same period of the previous year.

Source: NSO

FITCH AFFIRMS MONGOLIA AT 'B': OUTLOOK STABLE

Fitch Ratings has affirmed Mongolia's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'B' with a Stable Outlook.
Strong Growth, External Vulnerabilities: Mongolia's ratings are underpinned by favourable medium-term growth prospects and high per capita income relative to 'B' rated peers. The ratings are constrained by the country's high reliance on external funding and commodity exports to China amid high external debt and low foreign-exchange reserves. Mongolia scores well on World Bank Governance Indicators relative to 'B' peers, but has suffered from political volatility around issues of resource nationalism.
Growth Rebound: We forecast real GDP growth of 5% in 2023, similar to 2022, on stronger mining activity and steady domestic demand. Growth will likely accelerate in 2024. Coal exports are rebounding after China's removal of border pandemic controls. Export capacity will rise further once cross-border rail links become fully operational in the next one-two years. The strategic Oyu Tolgoi copper mine's underground phase started production in March 2023, although most of the volume gains will only come from 2025.

Source: Fitch, Montsame

CAN MONGOLIA ‘SURVIVE’ AND PROTECT THE ECONOMY DURING NET-ZERO TRANSITION? - EDITORIAL

Global warming manifests itself in different ways depending on the region, zone, and location. In particular, chief economist of the Asian Development Bank (ADB) Albert Park said at the bank’s Annual Meeting on May 3 in Incheon, South Korea that given its geographic features and socioeconomic circumstances, developing Asia is vulnerable to climate-related risks. More specifically, 76.9 percent of Mongolia’s land area is estimated to have been affected by desertification.
According to the Asia in the Global Transition to Net Zero: Asian Development Outlook 2023 Thematic Report of ADB, at current levels of greenhouse gas emissions, Asia would, by itself, exhaust the remaining global carbon budget consistent with limiting warming to 1.5 degrees Celsius by 2040. Therefore, countries and international organizations are working carefully in this direction and announcing important projects and programs. For instance, this year, ADB has launched the Innovative Finance Facility for Climate in Asia and the Pacific (IF-CAP), a landmark program which will help ADB accelerate much-needed climate financing.

Source: The UB Post

ENDURING EARTH: PROTECTING MONGOLIA’S GRASSLANDS - VIDEO

Mongolia's grasslands provide a way of life for millions of people and habitat for a wide array of unique species, but they are increasingly threatened due to climate change. Protecting nature at the scale it needs to survive requires unprecedented collaboration alongside bold action. In a new initiative known as Enduring Earth, The Nature Conservancy has partnered with other global conservation organizations to assist countries with their environmental goals. 
Enduring Earth is an ambitious collaboration that works alongside nations as they accelerate and amplify conservation for a more sustainable, prosperous future for people and planet. Central to our approach is Project Finance for Permanence, an innovative and proven model that fully funds conservation projects to ensure durable and scalable impact. 

Source: The Nature Conservancy

POLITICS

PRESIDENT OF FRANCE EMMANUEL MACRON TO VISIT MONGOLIA

President of the French Republic Emmanuel Macron will pay a State Visit to Mongolia at the invitation of President of Mongolia Ukhnaagiin Khurelsukh on May 21-22. It will be a historic visit as it is the first visit at the level of the Head of State from France.
In the course of the visit, Mongolian President U. Khurelsukh and French President Emmanuel Macron will hold official talks and discuss advancing the relations and expanding cooperation between the two countries, with particular emphasis on increasing investment.
Issues on expanding the relations in fields such as green energy, road transport, health, agriculture, culture, education, and humanitarianism, and implementing mutually beneficial joint projects are expected to be topics of the talks.
Moreover, the Heads of State of the two countries will discuss cooperation within the framework of the National Campaigns, namely “Food Revolution”, “One Billion Trees” and “President’s Scholar-2100” and brief the press on the outcomes of the Visit.

Source: Montsame
See also: Mongolie: Macron en visite dimanche, une première pour un président français

CITIZENS' OPINIONS COLLECTED ON POSSIBLE CONSTITUTIONAL AMENDMENT

Parliamentarians are working in their respective constituencies to present the draft amendment to the Constitution and receive the citizens’ suggestions and opinions in accordance with an order by the speaker of Parliament. 
In particular, legislators are working in Darkhan-Uul Province, and held a meeting and discussion to get citizens’ opinions. Residents expressed their support for a mixed electoral system, while making suggestions related to manual counting of ballots and fair elections. In addition, in order to strengthen the representative capacity, the citizens supported to expand Parliament to include representatives of social groups and sectors and increase the number of members.
Members of Parliament Ts.Munkhtsetseg and D.Tsogtbaatar are meeting the Sukhbaatar District residents. They informed that in order to improve the Parliament’s ability to represent the people, the number of lawmakers will be increased to 152 in accordance with the population, and fifty percent of the total members will be elected by majority and fifty percent by proportional method in accordance with the draft amendment.

Source: The UB Post
See also: New Constitutional Amendments Toward Expansion of Parliament and Proportional Representation in Parliamentary Elections
Citizens Voice their Opinions on Constitution Amendments

VIETNAM HOLDS IMPORTANT POSITION IN MONGOLIA'S FOREIGN POLICY: OFFICIAL

Mongolia is proud to be a friend of Vietnam - a country with increasing international prestige and position in the region and the world, which has a vital position in Mongolia's foreign policy in Southeast Asia, Secretary of the National Security Council of Mongolia Jadamba Enkhbayar told President Vo Van Thuong at their meeting in Hanoi on May 17.
President Thuong highlighted the fruitful friendship between the two nations in the last nearly seven decades, saying that the bilateral relations have been continuously consolidated and developed strongly.
He highly valued the outcomes of the working session between the Mongolian delegation with the Ministry of Public Security and relevant agencies of Vietnam, stressing that on the basis of important results of the bilateral cooperation relationship, the two countries will make joint efforts to upgrade their relations and further promote comprehensive cooperation in the new context.

Source: Vietnam Plus

MONGOLIAN PEACEKEEPERS SUPPORT REFUGEES RETURN HOME IN SOUTH SUDAN FROM WAR-TORN SUDAN

South Sudanese refugees, who initially sought shelter from conflict in 2013 by fleeing to their northern neighbour, Sudan, are now heading back to their home country, given escalating violence in Sudan's capital, Khartoum.
These twice-displaced individuals urgently require humanitarian assistance and on 5 May 2023, a team of military, police, and civilian peacekeepers from the United Nations Mission in South Sudan (UNMISS), visited the South Sudan-Sudan border area, Panakuach, to assess their situation.
The team coordinated with Mongolian peacekeepers during their visit and spoke with the South Sudanese border police area commander and humanitarian workers.
According to South Sudan's Relief and Rehabilitation Commission (RRC), as of 4 May, some 1,198 returnees were recorded.
“We are doing everything we can to secure the populations returning from Sudan. In collaboration with officials from Rubkona county, we have allocated some land for them to temporarily settle, but they lack food and water. They need more assistance,” said David Lung Tuorek, an official from the RRC.

Source: UN Mongolia

GOVERNMENT TAKES STEPS TOWARDS SALARY EQUALITY

At today's Cabinet session, the Prime Minister has issued an order to take measures aimed at equalizing the salaries of employees in the culture, sports, and health sectors with those in the education and science sectors. In accordance with the Culture Law, the Cabinet has approved a procedure for providing cash benefits equivalent to six months' basic salary to cultural sector employees working in rural areas once every five years. The Minister of Culture, Ch. Nomin, and the Minister of Finance, B. Javkhlan, have been tasked with coordinating and financing these measures within the 2023 budget and reflecting the financial source in the annual state budget in the future.
Currently, Mongolia has 4,470 employees working in 432 rural-owned cultural organizations. According to the regulation, 70 percent of these employees will receive cash benefits. It is worth noting that wages in the cultural sector are lower compared to other public service sectors.

Source: Montsame

UNITED STATES LAUNCHES NEW GRANT PROGRAM TO ADVANCE CLEAN ENERGY IN MONGOLIA

The United States Agency for International Development (USAID) today launched the Mongolia Energy Research and Innovation (MERI) Fund, a small grants program to bolster Mongolia’s economic growth by facilitating the transition to clean energy.  
The grant program is part of USAID’s five-year, $12 million Mongolia Energy Governance project, which is assisting Mongolia in developing a more resilient and sustainable energy sector.  Through the project, USAID is working with key government and private sector partners to develop a more competitive and financially sustainable energy sector that will increase economic competitiveness, create a more stable and secure domestic energy supply, and develop more renewable energy projects.  
“The U.S. government is pleased to provide these funding opportunities that will help build a robust energy sector ecosystem, strengthen the institutional and human capacity of Mongolian organizations, and develop the necessary tools to facilitate the energy sector transition,” USAID Deputy Development Advisor Steve Winkates said at the launch event. 

Source: U.S. Embassy in Mongolia

 

THE CURRENT STATE OF MIGRATION TO MONGOLIA

With a mining-reliant economy and environmental factors contributing to desertification and the loss of agricultural resources, it is not surprising that Mongolians migrate internally from rural to urban centers. Mongolia’s capital, is close to several mines and is almost always the desired destination. There, migrants can find urban jobs and social infrastructure not as readily available in rural communities.
Besides the Mongolians themselves, there are anti-war Russians and their families seeking refuge or temporary stays in Ulaanbaatar. Despite the icy capital being over 200 miles away from the closest border, Russians are undeterred by the distance. Vladimir Putin’s military conscription, which occurred in late 2022, was the leading cause of this exodus.
The fight for a new home and way of life is not easy and challenges exist for those who cross the border and enter the capital: overcrowding, expensive housing and limited social services to name a few. With the current system, there are evident inadequacies and wealth disparity.

Source: Borgen Magazine
See also: Internal Migration Situation in Mongolia: Situation Analysis Report

SLOVENIAN-MONGOLIAN PARLIAMENTARY FRIENDSHIP GROUP ESTABLISHED

On her visit to the Republic of Slovenia, Minister of Foreign Affairs B. Battsetseg paid a courtesy call on President of the National Assembly of Slovenia Mrs. Urška Klakočar Zupančič, and exchanged views on the possibility of expanding relations and cooperation between Mongolia and Slovenia.
At the beginning of the meeting, Minister of Foreign Affairs B. Battsetseg conveyed the greetings of Chairman of the State Great Khural of Mongolia G. Zandanshatar, and talked about expanding economic cooperation between Mongolia and Slovenia and working together in the fields of tourism, forest management, information technology, water management, and renewable energy.
President of the National Assembly Urška Klakočar Zupančič informed about the establishment of the Slovenian-Mongolian parliamentary friendship group in the National Assembly of the Republic of Slovenia.

Source: Montsame

UB MAYOR: PARTNERSHIP BETWEEN ULAANBAATAR AND SEOUL TO BE BROUGHT TO A NEW LEVEL - INTERVIEW

Governor of the capital city and Mayor of Ulaanbaatar D.Sumiyabazar is working on an official appointment in the Republic of Korea. In this context, he met with Chairman of the Seoul Metropolitan Council Kim Hyeon-gi, and the Mayor Oh Se-hoon. Mayor D.Sumiyabazar explained about cooperation between the two cities and future possibilities.
-What are the possibilities for cooperation in the future?
-Seoul is a leading city in the region. Therefore, the two cities can work together to increase investment and trade, fight against climate change, and solve urban problems. Special attention will be paid to localize and study the experience of smart and rational solutions and decisions implemented by Seoul in the direction of reducing air and environmental pollution, increasing green areas, reducing traffic congestion, and increasing access to public transportation. The content of the meeting with the Mayor of Seoul and the Chairman of the Seoul Metropolitan Council was also aimed at this.

Source: Mayor's Office
See also: Mayor met with the Chairman of the Seoul Metropolitan Council
Ulaanbaatar to cooperate with Seoul in four directions
Cooperation with KOICA in development projects discussed
The public transport payment system to be improved

DORNOGOVI PROVINCE WILL ESTABLISH A NEW STANDARD FOR COLLABORATION WITH MINING COMPANIES - INTERVIEW

In recent years, the issue of local mining relations has become a major problem. It has become common for companies with mining lilicenses to go to local communities and face opposition from the people. Therefore, Mining Insight Odjargal.E spoke with the Batjargal.O Governor of Dornogovi province to convey the views of the local people at a time when the discussions on the revisions to the Minerals Law are in full swing.
How does the mining industry contribute to the economy of the province in terms of its position and role?
Dornogovi province has been the mining hub of Mongolia since the socialist era, with significant infrastructure and railways established to support it. The establishment of the Erdenet Mining Corporation led to the creation of "Mongolrostsvetmet" fluorspar concentration plants in Urgun and Dalanjargalan soums, transporting their products via railroad. Additionally, the Zuunbayan oil refinery was also established in the region. In recent years, there has been a rise in the development of major infrastructure related to mining…

Source: Mining Insight

 

DR. D. ALTANTSETSEG: THE REFINERY PROJECT MOVES FORWARD TO CONSTRUCTION PHASE - INTERVIEW

Montsame interviewed Dr. D. Altantsetseg, the Executive Director of the state-owned company “Mongol Refinery” LLC, Mongolia's Consulting Engineer, about the progress of the Mongol Refinery Project.
The Government of Mongolia is implementing the Project to establish a grass root Oil Refinery Plant based on domestic crude in Dornogobi aimag, located in Southeastern part of the country, within the framework of the soft loan extended by the Government of India to ensure energy independency and expand the industry diversification. 
Upon approving the Detailed Feasibility Study and selecting "Engineers India Limited" as Project Management Consultant in 2019, the design and engineering works had started, and from this year on, the mechanical erection of the main technological facilities will start at full capacity. 
Out of four main EPC packages planned for the project, the first package, which comprises of non-technological facilities, such as civil buildings (office-training center, first aid center, fire station, warehouse, laboratory, workshop, canteen…

Source: Montsame
See also: 

WILL NORTH KOREA’S FOREIGN MINISTER VISIT MONGOLIA THIS YEAR? - EDITORIAL

In 2023, Mongolia and North Korea will mark both the 75th anniversary of the establishment of their diplomatic relations and the 35th anniversary of the visit of late North Korean leader Kim Il Sung to Mongolia.
Amid the pandemic, people’s exchanges and economic and trade relations were temporarily suspended for three years, but the two sides strengthened their friendly relations and exchanged greetings on the occasion of national traditional festivals every year.
In articles published by the Korean Central News Agency, North Korea’s main state mouthpiece, Mongolia has been mentioned more than 100 times in the past three years. Mongolian President Khurelsukh Ukhnaa was mentioned nine times, Foreign Minister Battsetseg Batmunkh was mentioned eight times, and Prime Minister Oyun-Erdene Luvsannamsrai was mentioned once.
In 2018-19, Mongolia caused an unexpected stir by offering to host a summit between then-U.S. President Donald Trump and North Korean leader Kim Jong Un in Ulaanbaatar.

Source: The Diplomat
See also: Mongolia detains 4 North Koreans who illegally crossed into country from China

MONGOLIA SHOWS CANADIAN FOREIGN POLICY DOMINATED BY MINING COMPANIES - EDITORIAL

An important facet of Canadian foreign policy is advancing the interests of mining companies. In Mongolia it’s largely all Global Affairs Canada does. 
Canadian ambassador Catherine Ivkoff regularly travels to Canadian-run mines, speaks at international mining conferences, does interviews with mining publications and talks up the sector in various other business and political forums. “We will be working to promote Canadian Green Mining solutions and initiatives in Mongolia”, noted a recent headline based on an interview with Ambassador Ivkoff. 
In a recent Canadian Journal of Development Studies article headlined “Mining self-interest? Canadian foreign aid and the extractive sector in Mongolia”, Stephen Brown points out that Canada’s aid in the Central Asian nation is largely designed to advance mining interests. An embassy official told Brown that Canadian aid in the country of 3.5 million people is “focused exclusively in the extractive sector” even though the World Bank warned that Mongolia’s economy was excessively reliant on mining.

Source: Spring Magazine

UNVEILING THE PATH TO PREVENTING CONFLICT OF INTERESTS - EDITORIAL

Proposed amendments to the law on the regulation of public and private interests, as well as the prevention of conflict of interest in public service, seek to restrict high-ranking politicians and senior officials from engaging in business ventures with the government. To ensure the effectiveness of this law, robust oversight measures are imperative.
Since its establishment in 2006, the anti-corruption agency has been striving to address conflicts of interest among politicians that not only erode public trust but also undermine effective governance.
In December 2022, public outrage reached its peak, manifesting in a significant demonstration in Ulaanbaatar's main square.
In response, Prime Minister Luvsannamsrain Oyun-Erdene launched an ambitious anti-corruption campaign earlier this year, encompassing operations such as "whistleblow" to expose corruption crimes, "wipe-out" to remove "parasites" from public offices, and to bring back overseas escapees. This comprehensive campaign also aims to recover illegal funds hidden offshore.

Source: Mongolia Weekly

BUSINESS

PRIMARY MARKET TRADING OF “TRADE AND DEVELOPMENT BANK OF MONGOLIA” WILL START

According to Resolution No.180 of the Financial Regulatory Commission dated May 12, 2023, and Order No. A/68 of the CEO of the Mongolian Stock Exchange dated May 3, 2023, “Trade and Development Bank of Mongolia” LLC will offer 2,530,047 shares to the public at MNT 33,000. 
The primary market trading of the “Trade and Development Bank of Mongolia” LLC will be organized through the MSE IPO system from May 18, 2023, to May 23, 2023.
“Trade and Development Bank of Mongolia”s leading underwriter is “Mirae Asset Securities Mongolia UTsK” LLC and “TDB Securities UTsK” LLC is the co-underwriter.
Please click here for the detailed prospectus.

Source: MSE, FRC

PRAGUE TO ULAANBAATAR DIRECT FLIGHTS LAUNCHING THIS JUNE

Mongolia’s Eznis Airways company will introduce direct flights from Prague to Ulaanbaatar as of June. Direct flights are another step in developing Mongolian and Czech tourism after Mongolia lifted visa requirements for Czech tourists.
Details on the flight frequency and departure dates have not yet been announced. A bilateral agreement on direct flights was made in 2017, but the flights failed to materialize. There was renewed diplomatic interest in the idea in 2020, but the pandemic and other issues caused delays.
Mongolian students will come to Czechia starting in 2024 as part of a scholarship program. Czech Foreign Minister Jan Lipavský and his Mongolian counterpart Battsetseg Batmunkh announced the developments at a press conference after their talks in Prague yesterday. In addition to education, both foreign ministers discussed cooperation in trade and the environment.

Source: Expats.cz

ACTION PLAN FOR INCREASING PARTICIPATION OF TOP-100 COMPANIES IN THE CAPITAL MARKET APPROVED

Mr. D.Bayarsaikhan (Chairman, Financial Regulatory Commission) and Mr. O.Amartuvshin (President, Mongolian National Chamber of Commerce and Industry) approved the Action plan for increasing the participation of TOP-100 companies in the capital market.
Mr. D.Bayarsaikhan highlighted that as a result of the comprehensive policy and regulatory measures taken by the Financial Regulatory Commission (FRC) within the framework of the Strategy to Reduce Loan Interest Rates, Banking Reform, and Privatization of State-Owned companies, 60 new financial products have been issued in the last 2 years, and as of 17 May 2022, the market capitalization reached MNT8.7 trillion, an increase of 26.8% compared to the same period of 2022. In addition, while 5 companies issued IPOs and raised MNT340 billion, one company issued open-end bonds with a value of MNT20 billion. On the OTC market, 76 companies issued more than 100 new products and raised MNT1.1 trillion.

Source: FRC

EBRD AND KHAN BANK PROMOTE WOMEN ENTREPRENEURSHIP IN MONGOLIA

Women-led businesses in Mongolia will benefit from new funds made available by the European Bank for Reconstruction and Development (EBRD) through the country’s largest commercial lender, Khan Bank.
The EBRD’s loan of up to US$ 20 million to Khan Bank, its client since 2007, will help promote women’s entrepreneurship and business activity by assisting with access to finance and technical advice. It is expected that up to US$ 5 million of the total amount will be earmarked to support digitalisation of these businesses, as envisaged by the Bank’s Central Asian Women in Business Programme.
As part of the project, Khan Bank will be able to develop the financial products and lending practices that these women-led micro, small and medium-sized enterprises need, including for their digitalisation.  This activity is supported through grant funds provided under the Women Entrepreneurs Financing Initiative (We-Fi).

Source: EBRD

TMK ENERGY AND TALON ENERGY COMPLETE DRILLING AT LUCKY FOX-2, MONGOLIA

TMK Energy has completed drilling at the Lucky Fox-2 well as part of its pilot well drilling program at the Gurvantes XXXV CSG project in the South Gobi Basin in Mongolia.
The Lucky Fox-2 well was drilled to a depth of 407 metres, intersecting up to 62 metres of gassy coal.
Drilling and installation of production casings and tubing were completed on May 15.
TMK Energy reported the rig would soon be moved to the site of the final well in the pilot well program, Lucky Fox-3.
“The rig is now moving to the final well in the program, Lucky Fox–3, which is expected to commence drilling in the next few days following the rig move and some routine maintenance,” he said.
The pilot well program includes the drilling of three individual production wells spaced approximately 200 metres apart, with drilling expected to be completed by the end of May.

Source: The Market Herald, The West Australian

STEPPE GOLD UNVEILS POSITIVE FINANCIAL RESULTS FOR FIRST QUARTER OF 2023, OUTLINES FUTURE OUTLOOK

Steppe Gold Ltd has reported positive financial results for the first quarter of 2023 and outlined its future outlook.
The company's revenue for the quarter amounted to $9,525,000 generated from the sale of 5,008 ounces of gold and 651 ounces of silver. The average realized prices per ounce were $1,899 and $19, respectively.
Steppe Gold produced 6,993 ounces of gold and 19,877 ounces of silver during the quarter, resulting in an operating income of $6,024,000 from mine operations before depreciation and depletion.
The company's consolidated group adjusted EBITDA, after stream payments, reached $2,141,000 for the quarter. Steppe Gold reported an all-in-sustaining cost (AISC) of $679 per ounce sold during the quarter.
Mining activity during the period involved the extraction of 87,362 tonnes of ore, with 195,196 tonnes stacked on the leach pad, carrying an average gold grade of 0.94 grams per ton (g/t) and an average silver grade of 5.81 g/t.

Source: Proactive Investors
See also: Steppe Gold Announces Q1 2023 Financial Results

ELIXIR ENERGY TO EXPAND NOMGON PILOT PROJECT AS COMMERCIAL POTENTIAL FOR CBM GROWS IN MONGOLIA

Elixir Energy Ltd has revealed an expansion of the Nomgon Pilot Project underway at the Nomgon IX Coal Bed Methane (CBM) Production Sharing Contract (PSC) in the South Gobi Basin of Mongolia.
As part of the expansion plan for the pilot production project, the company will extend the flow period and drill an additional pilot well.
This comes as the company believes the commercial potential for CBM in Mongolia is significant due to comparatively much lower drilling costs and access to gas prices that reflect the East Asian region as an LNG importer rather than an exporter.
Elixir's strong view is that the commerciality of CBM in the Mongolian context has material advantages over the likes of Australia.
Elixir completed the workover of the two-well pilot project at Nomgon IX in early April 2023. This involved the existing completions being removed, cleaned out and replaced.

Source: Proactive Investors

EBRD PROMOTES NEW RETAIL FORMAT IN MONGOLIA WITH GS25

The European Bank for Reconstruction and Development (EBRD) is helping to introduce new retail formats in Mongolia by supporting the expansion of Digital Concept, an operator of convenience stores.
Digital Concept, which runs the GS25 convenience store franchise chain, will use a Bank loan of up to US$18 million to open as many as 63 new shops by the end of 2023 and to finance the construction of a food factory and logistics centre.
The Bank’s financing will underpin the company’s investment programme, aimed at opening more than 100 new stores a year to 2027 in the country’s capital, Ulaanbaatar, as well as in the cities of Darkhan and Erdenet.
The programme will implement a popular GS25 Korean convenience store model, introduce new food retail industry standards to the country and bring a wide range of food products, everyday items, and fresh food and drinks to Mongolian customers.

Source: EBRD

IT COMPANIES CONSORTIUM TO TAKE PART IN ONLINE COAL TRADING

Given the Mining Exchange Law will come into effect on July 1, the parties involved in online coal trading of the Mining Exchange began to be identified. "Erdenes IT Consortium", an association of information and technology companies is evidence. They intend to work together to create an eco-system in the mining industry by developing transport logistics, payment, and IT modules in online coal trading. To this end, a joint forum was organized under the theme "Ensuring the participation of parties in the operation of the Mining Exchange" on May 10.
The information and technology consortium participating in online coal trading includes 11 companies such as "Itzone," "iTools," "Gerege systems," "Cody," "Digital Finex," "Utility solution," "InnoSolution," "Itauco," "DPS" (Digital Payment Solution), and "Anicar" which have a long history of operating in the field of information technology in Mongolia. Executive Director of "Erdenes IT Consortium" B. Buyannemekh clarified, "Currently, in the mining ecosystem of our country a complex platform for product spot, forward and futures trading, option transactions, their payment and tracking of transport logistics has been developed."

Source: Montsame

EBRD AND XACBANK CONTINUE GREEN LENDING PARTNERSHIP IN MONGOLIA

Companies and households across Mongolia will be able to modernise production, increase their energy efficiency and improve their climate resilience thanks to a new financing package organised by the European Bank for Reconstruction and Development (EBRD) for the country’s most active green lender, XacBank.
The package of up to US$25 million, arranged under the EBRD’s Green Economy Financing Facility, consists of an EBRD loan of up to US$ 18.75 million and financing of up to US$ 6.25 million provided by the Green Climate Fund (GCF).The funds will be on-lent to borrowers to reduce energy consumption, promote the use of renewable energy sources and support local businesses in adopting environmentally friendly practices.
XacBank, one of the largest banks in Mongolia, was the first local financial institution to join the EBRD’s GEFF. It supports green lending to micro, small and medium-sized enterprises through 72 branches across the country.

Source: EBRD

THERE ARE NO STANDARDS SET IN TOURISM SERVICES - EDITORIAL

A tour operator of Mongolia cooperated with a foreign company manager and organized a trip involving well-known and famous people, however the manager shook his head and said, “Mongolia is not ready yet.” Tourists who came here to get to know Mongolia’s winter stayed at the recreation and tourism complex in Arkhangai Province, which operates throughout the four seasons and is considered the largest in our country. But this was just a name. From the characteristic, attitude and service of the employees, many things did not meet the travelers’ expectations. Although it was a holiday and tourism complex, the electricity and hot water are cut off shortly as they are on, and the food does not arrive on time, leaving foreigners surprised. When the manager from the tour operator company complained to the resort, they almost threatened to kick them out because of their high demands. The young man, who expressed his frustration said, “When the service organizations are in this poor state, our country should not talk or dream about receiving one million tourists.”

Source: The UB Post
See also: "Mongolia-Japan Tourism Forum-2023" in Tokyo

GLOBAL AND REGIONAL NEWS

GLOBAL WARMING SET TO BREAK KEY 1.5C LIMIT FOR FIRST TIME

Our overheating world is likely to break a key temperature limit for the first time over the next few years, scientists predict.
Researchers say there's now a 66% chance we will pass the 1.5C global warming threshold between now and 2027.
The chances are rising due to emissions from human activities and a likely El Niño weather pattern later this year.
If the world passes the limit, scientists stress the breach, while worrying, will likely be temporary.
Hitting the threshold would mean the world is 1.5C warmer than it was during the second half of the 19th Century, before fossil fuel emissions from industrialisation really began to ramp up.
And breaking the limit even for just one year is a worrying sign that warming is accelerating and not slowing down.
The 1.5C figure has become a symbol of global climate change negotiations. Countries agreed to "pursue efforts" to limit global temperature rises to 1.5C under the 2015 Paris agreement.

Source: BBC

CHILE GREENLIGHTS MINING TAX REFORM THAT BOOSTS GOVERNMENT TAKE

Lawmakers in Chile’s lower house of Congress gave final approval on Wednesday for a long-awaited mining tax reform that now requires only the signature of leftist President Gabriel Boric, who has publicly backed it, to become law.
The reform will require large copper and lithium producers that operate in the mineral-rich Latin American nation to pay more taxes and royalties to the government.
Chile is the world’s top copper producer and No. 2 in lithium, both seen as key to making future fleets of electric vehicles powered by rechargeable batteries.
By a vote of 101 in favor to 24 against, lawmakers approved modifications to the tax and royalty bill endorsed by the Senate last week.
The lopsided vote was hailed by Finance Minister Mario Marcel, who underscored that the higher government take required of mining companies would address past abuses.

Source: Reuters

JAPAN Q1 ECONOMY EXPANDS ANNUALISED 1.6 PCT QTR/QTR

Japan's economy grew an annualised 1.6% in January-March from the previous quarter, as firm private consumption and an unexpected rise in capital expenditure offset shrinking external demand, government data showed on Wednesday.
The first-quarter gross domestic product figures was much larger than economists' median estimate for a 0.7% annualised growth. The expansion translated into a quarterly increase of 0.4%, the data showed.
Domestic private consumption, which makes up more than half the economy, grew 0.6% quarter-on-quarter in January-March, and capital expenditure, a key engine of growth, gained 0.9%, against economists' estimate for a decrease.
External demand, or net exports, shaved off 0.3 percentage point off the first-quarter gain, which was more than offset by positive domestic-demand contribution of 0.7 percentage point.

Source: Reuters
See also: ‘Foreign investors are back’: Japan stocks surge to their highest since 1990

GLOBAL DEBT NEARS RECORD HIGHS AS RATE HIKES TRIGGER ‘CRISIS OF ADAPTATION,’ TOP TRADE BODY SAYS

The global debt pile grew by $8.3 trillion in the first quarter to a near-record high of $305 trillion as the global economy faced a “crisis of adaptation” to rapid monetary policy tightening by central banks, according to a closely-watched report from the Institute of International Finance.
The finance industry body said the combination of such high debt levels and rising interest rates has driven up the cost of servicing that debt, triggering concerns about leverage in the financial system.
Central banks around the world have been hiking interest rates for over a year in a bid to rein in sky-high inflation. The U.S. Federal Reserve earlier this month lifted its fed funds rate to a target range of 5%-5.25%, the highest since August 2007.
“With financial conditions at their most restrictive levels since the 2008-09 financial crisis, a credit crunch would prompt higher default rates and result in more ‘zombie firms’ — already approaching an estimated 14% of U.S.-listed firms,” the IIF said in its quarterly Global Debt Monitor report late Wednesday.

Source: CNBC
See also: Debt in advanced economies is piling on to global challenges, says World Bank president

COPPER AND ZINC SINK TO FRESH LOWS AMID CHINA ECONOMIC UNCERTAINTY

Prices for nonferrous metals like copper and zinc have slumped this month despite predictions of shortages just a few weeks ago, on concerns that the shortfalls could turn into surpluses if Chinese demand recovers more slowly than expected.
Three-month zinc futures on the London Metals Exchange, an international benchmark, fell to $2,483 per tonne at one point Tuesday, the lowest since October 2020 and down by roughly half from the all-time high reached in spring 2022.
Copper sank as low as $8,090.50 per tonne the same day, its weakest in nearly half a year, while lead has slid to a three-month nadir. All three commodities, used in a range of construction and industrial applications, have seen especially sharp declines this month in particular.
This came as a surprise to many market players, as it occurred after industry groups and investment banks had forecast tighter supplies than previously expected.

Source: Nikkei Asia

G-7 SET FOR A SHOW OF RESOLVE IN HIROSHIMA: 5 THINGS TO KNOW

The Group of Seven leaders will gather on Friday in Hiroshima for a three-day summit where, in light of Russia's invasion of Ukraine, they are expected to reaffirm their commitment to an international order rooted in the rule of law.
The leaders are also scheduled to visit historic spots in Hiroshima, the target of one of two atomic bombs the U.S. dropped in World War II. By showcasing that legacy, Japanese Prime Minister Fumio Kishida aims to underscore the need for a world "without nuclear weapons" at a time when nuclear threats are rising.
A number of leaders from outside the G-7 -- including Indian Prime Minister Narendra Modi and South Korean President Yoon Suk Yeol -- are also invited.
Here are five things to know.

Source: Nikkei Asia, CNBC
See also: G7 Japan summit to target Russian exports in latest Ukraine war sanctions

 

 

BCM QUARTERLY REPORT, Q1 2023

The Business Council of Mongolia delivers you its First Edition of the BCM Quarterly Report of 2023. The first edition covers all events organised by the BCM through the months of January - March. The fuller version of the articles can be found in the highlighted "details" part on the report.

PDF:  2023 First Quarterly Report 

Source: BCM

THE BCM APPOINTS RAPHAËL GOUÉ AS OFFICIAL BCM REPRESENTATIVE IN EUROPE

The Business Council of Mongolia is pleased to announce Mr. Raphaël Goué as an official BCM Representative in Europe.

Raphaël Goué is an expert in energy and banking, having spent more than 12 years in Asia as well as being involved in Europe-Asia cross-border projects since the mid-90s, with a focus on financial services, energy and telecommunications.

Mr. Goué has a wealth of experience in supporting global financial institutions and energy companies in their strategies in Asia, as well their development and M&A. He has previously held various positions in organizations such as Société Générale, Vivendi Universal, Booz & Co and Capital One in Europe, Africa and Asia. As a senior advisor of the global retail banking association EFMA, Raphaël has been supporting the development of banking’s leading association in selected Asian markets, and supporting EFMA in the fintech sector in Europe.

He holds an engineering degree from the École Nationale Supérieure de Géologie in Nancy, France, a master in material science from École de Mines de Nancy, and a MBA from HEC (Paris) he finalized at the Columbia Business School (New York).

The BCM is looking forward to expanding its reach to Europe with Mr. Goué’s leadership and assistance.
 

UNICEF: GUIDANCE FOR EMPLOYERS ON FLEXIBLE WORK ARRANGEMENTS AND OTHER GOOD WORKPLACE PRACTICES IN THE CONTEXT OF COVID-19


A family friendly workplace or employer is one whose policies and practices make it possible for employees and/or workers to more easily achieving work-life balance, and to fulfil both their work and family obligations. These policies may include, but are not limited to, childcare, breastfeeding rooms, flexible work arrangements, paid leave, safe transport, parenting education and so on. 
In Mongolia and various other countries, authorities have enforced kindergarten- and school closure policies as part of the preparedness and response to contain the COVID-19 epidemic. In addition to the impacts on children’s education, there are concerns about children’s protection and well-being as children are left alone or without adequate care as many parents still need to go to work. COVID-19 may also have negative effects on mental health and wellbeing of patients (if any), caregivers, children and adolescents and the public, such as experiencing fear of the consequences of infection with a new virus, and triggering stigma. Those placed in quarantine (or self-isolated) may experience boredom, loneliness, and anger.
By promoting flexible working arrangements such as adjusted working hours, working from home and/or support childcare, your employees will be in better position to address any childcare challenges and not be distracted by concerns about their children’s safety and wellbeing at home.

Click here to view in English.

Click here to view in Mongolian.

UNICEF: CALL FOR ACTIONS OF THE PRIVATE SECTOR TO REDUCE CHILDREN’S EXPOSURE TO AIR POLLUTION IN UB
 
Too many children are at risk of dying in UB due to air pollution each year. In addition to longer-term measures to reduce overall levels of air pollution in Ulaanbaatar, UNICEF recommends that companies address some of their CSR activities in the following ways:
  1. Provision of air purifiers to kindergartens, schools and clinics. Children spend a considerable amount of their time in school. Air purification systems are demonstrated to be effective in reducing air pollution levels within a home or classroom. Recent innovations have made these more affordable, durable and effective. Every classroom should have an air purifier.
  2. Provision of electric heaters to kindergartens, schools and clinics. Electric heaters can help to reduce ambient air pollution. Reducing financial barriers to access can also help improve use of electric heaters.
  3. Improved construction and insulation in kindergartens, schools and clinics. This can help reduce the amount of air pollution that enters facilities where children spend most of their time. It also saves considerably on heating costs. Studies show some improvements can decrease air exchange by up to 40%.
  4. Provision of air pollution monitoring devices in kindergartens, schools and clinics. Monitoring devices are often a first, major step to understanding one’s own risk to air pollution. It can not only inform improved practices to reduce exposure, but it is also an effective mechanism for communities to better understand what is causing air pollution, and when it is particularly harmful.
  5. Improved awareness and behaviour-change campaigns. Low awareness amongst communities about the impacts of air pollution on child health and how to respond is a key barrier to addressing the air pollution crisis. There is a need to influence policymakers, relevant government institutions, businesses, CSOs, development partners, and the general public (including families and children) about the risks that air pollution poses to their health, as well as provide guidance and recommendations on various ways to address some of the most immediate threats.
These actions will reduce children’s exposure to air pollution, safeguarding them from the worst impacts at the same time as building momentum and creating an enabling environment for longer plans that reduce air pollution. UNICEF will provide guidance on these recommendations where possible. UNICEF can also help facilitate connections between actors, agencies and institutions, including schools/ clinics where children are particularly affected. However, in order to maximize efficiency, these projects should be planned, developed, implemented and monitored by the private sector company involved. Nor will any funding go through UNICEF. This helps enhance accountability, and allows private sector donors to be more actively involved in the solution of directly supporting children in UB to breathe cleaner, healthier air.
For more information and guidance, please contact UNICEF for (Amy Wickham, This email address is being protected from spambots. You need JavaScript enabled to view it.; and Sunjidmaa Jamba, This email address is being protected from spambots. You need JavaScript enabled to view it.)
 
BCM GUIDELINE FOR COMPANIES TO COMBAT AIR POLLUTION

Purpose: This Guideline document is to help CEOs and business leaders quickly identify possible actions they can implement in their organizations against air pollution.

Resources for information on Air Pollution

Specific ACTIONS that companies can take NOW:

Educate employees about air pollution; invite guest speakers; encourage employees to share information with friends and family; discuss possible solutions with employees

  • Possible topics: damages and causes of air pollution, protection measures, energy consumption & efficiency; indoor air quality (smoking indoors); breastfeeding & healthy diet; vehicle idling; vehicle maintenance;

Work environment:

  • Improve energy efficiency in building/office to reduce energy consumption;
  • Plant & maintain trees; install air cleansing plants in the office;
  • Install HEPA air filter and air purifiers to tackle indoor air pollution (For an affordable solution, visit http://smartairfilters.com/mn/en/;
  • Install monitoring devices;
  • Smart Air Mongolia masks

Work activities:

  • Ensure company vehicles are well maintained to reduce pollution emissions;
  • Drivers/employees instructed to not idle & to turn off vehicle engine when not moving;
  • Implement carpooling activities;
  • In polluted air, ensure employees wear pollution masks;

Social responsibility:

  • Focus CSR (corporate social responsibility) initiatives to tackle air pollution
  • Tackle air pollution in UB: UNICEF recommends focusing on areas where children are especially affected, and where urgent interventions need to be put in place to protect them as soon as possible. These include the provision of air filtration systems and electric heaters in kindergartens and schools in some of the worst-affected regions. For more information and guidance, please contact UNICEF for (Nicholas Rees, This email address is being protected from spambots. You need JavaScript enabled to view it.; and Sunjidmaa, This email address is being protected from spambots. You need JavaScript enabled to view it.);
  • Run marketing/PR campaigns & contests that raise awareness about air pollution.

List of distributors for pollution masks:

  • BRB – 70119967, 99658555
  • BOX shop – 99062387, 75557007, 90878111 – Facebook: RZ утааны маск
  • CATD LLC – 11327308, 99114346
  • Mmarket – 75758001 – Facebook: Утааны Маск
  • MONOS Pharmacy – 99190858
  • Seven summits – 11317923
  • 3M Mongolia Premier Service - 9400-3088, 9910-3335
  • Utaanii Mask – 99906643 – Facebook: Утааны маск + Агаар шүүгч
  • Cycling World Mongolia LLC authorized distributor of RESPRO pollution masks- 77110444
​MEMBER-TO-MEMBER SPECIAL OFFERS & BENEFITS:
 
- Orchuulga 24 is providing a 15% discount on written translation services to BCM Members
- Ombol LLC is offering free Hepatitis C medication to employees of BCM member organizations, provided that the individual pays into state health insurance.
 

ECONOMIC INDICATORS

HISTORIC ANNUAL INFLATION

Year 2009   *4.2% [source: NSOM]
Year 2010 *13.0% [source: NSOM]
Year 2011 *10.2% [source: NSOM]
Year 2012 *14.0% [source: NSOM]
Year 2013 *12.5% [source: NSOM]
Year 2014 *11.0% [source: NSOM]
Year 2015   *1.9% [source: NSOM]
Year 2016   *1.1% [source: NSOM]
Year 2017   *6.4% [source: NSOM]
Year 2018   *8.1% [source: NSOM]
Year 2019   *5.2% [source: NSOM]
Year 2020   *2.3% [source: NSOM]
Year 2019   *13.4% [source: NSOM]
*Year-over-year (y-o-y), nationwide

CENTRAL BANK POLICY LOAN RATE

December 31, 2008 - 9.75% [source: IMF]
March 11, 2009 - 14.00% [source: IMF]
May 12, 2009 - 12.75% [source: IMF]
June 12, 2009 - 11.50% [source: IMF]
September 30, 2009 - 10.00% [source: IMF]
May 12, 2010 - 11.00% [source: IMF]
April 28, 2011 - 11.50% [source: IMF]
August 25, 2011 - 11.75% [source: IMF]
October 25, 2011 - 12.25% [source: IMF]
March 19, 2012 - 12.75% [source: Mongol Bank]
April 18, 2012 - 13.25% [source: Mongol Bank]
January 25, 2013 - 12.50% [source: Mongol Bank]
April 8, 2013 - 11.50% [source: Mongol Bank]
June 25, 2013 - 10.50% [source: Mongol Bank]
July 30, 2014 - 12.00% [source: Mongol Bank]
January 14, 2015 - 13.00% [source: Mongol Bank]
January 14, 2016 - 12.00% [source: Mongol Bank]
May 6, 2016 - 10.50% [source: Mongol Bank]
August 18, 2016 - 15.00% [source: Mongol Bank]
December 19, 2016 - 14.00% [source: Mongol Bank]
June 15, 2017 - 12.00% [source: Mongol Bank]
December 22, 2017 - 11.00% [source: Mongol Bank]
March 23, 2018 - 10.00% [source: Mongol Bank]
November 27, 2018 - 11.00% [source: Mongol Bank]
March 11, 2019 - 10.00% [source: Mongol Bank]
April 13, 2020 - 9.00% [source: Mongol Bank]
September 14, 2020 - 8.00% [source: Mongol Bank]
November 11, 2020 - 6.00% [source: Mongol Bank]
January 1, 2022 - 6.50% [source: Mongol Bank]

SOVEREIGN CREDIT RATING

Moody’s Fitch S&P
B3     – stable – 16 Mar 2021
B3     – negative – 8 May 2020
B3     – stable – 18 Jan 2018
Caa1 – stable – 30 Mar 2017
Caa1 – neg. watch – 15 Feb 2017
Caa1 – stable – 18 Nov 2016		 B   – stable – 9 Jul 2018
B-  – positive – 17 Nov 2017
B-  – stable – 22 Nov 2016
B   – stable – 24 Nov 2015
B+ – negative – 13 Dec 2013		 B   – stable – 10 Nov 2018
B-  – stable – 19 Aug 2016
B   – stable – 03 Nov 2015
B+ –   neg.  – 29 Apr 2015


CURRENCY RATES –  18 May 2023

Currency     Rate
U.S. dollar USD   3,459.33
Euro EUR   3,741.96
Japanese yen JPY   25.10
British pound GBP   4,306.87
Hong Kong Dollar HKD      441.84
Russian ruble RUB        43.07
Chinese yuan CNY      492.15
South Korean won KRW          2.59
Copyright © 2023 *Business Council of Mongolia*, All rights reserved.

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BCM NewsWire 783 – 19 May 2023

NEWSWIRE
 

NewsWire

Issue 783 –  19 May 2023
Introducing BCM's AI-generated video of top news stories of the week.

BCM NewsWire provides short summaries of news collected from around the world. Each article is kept to a maximum of 150 words for brevity, but click on the link next to “Source” to read the full article.

Economy

  • GDP increases by 7.9 pct in the first quarter of 2023 y/y

  • Household real income decreases 3.9 pct y/y

  • Foreign Trade Turnover Reaches USD 7.7 Billion

  • Gross industrial output down 11.2 pct m/m, up more than double y/y

  • Fitch Affirms Mongolia at 'B': Outlook Stable

  • Can Mongolia ‘survive’ and protect the economy during net-zero transition? - Editorial

  • Enduring Earth: Protecting Mongolia’s Grasslands - Video

Politics

  • President of France Emmanuel Macron to Visit Mongolia

  • Citizens' opinions collected on possible constitutional amendment

  • Vietnam holds important position in Mongolia's foreign policy: official

  • Mongolian peacekeepers support refugees return home in South Sudan from war-torn Sudan

  • Government Takes Steps towards Salary Equality

  • United States Launches New Grant Program to Advance Clean Energy in Mongolia

  • The Current State of Migration to Mongolia

  • Slovenian-Mongolian Parliamentary Friendship Group Established

  • UB Mayor: Partnership between Ulaanbaatar and Seoul to be brought to a new level - Interview

  • Dornogovi province will establish a new standard for collaboration with mining companies - Interview

  • Dr. D. Altantsetseg: The Refinery Project Moves Forward to Construction Phase - Interview

  • Will North Korea’s Foreign Minister Visit Mongolia This Year? - Editorial

  • Mongolia shows Canadian foreign policy dominated by mining companies - Editorial

  • Unveiling the Path to Preventing Conflict of Interests - Editorial

Business

  • Primary market trading of “Trade and Development Bank of Mongolia” will start

  • Prague to Ulaanbaatar direct flights launching this June

  • Action plan for increasing participation of Top-100 companies in the capital market approved

  • EBRD and Khan Bank promote women entrepreneurship in Mongolia

  • TMK Energy and Talon Energy complete drilling at Lucky Fox-2, Mongolia

  • Steppe Gold unveils positive financial results for first quarter of 2023, outlines future outlook

  • Elixir Energy to expand Nomgon Pilot Project as commercial potential for CBM grows in Mongolia

  • EBRD promotes new retail format in Mongolia with GS25

  • IT Companies Consortium to Take Part in Online Coal Trading

  • EBRD and XacBank continue green lending partnership in Mongolia

  • There are no standards set in tourism services - Editorial

Global and Regional Trends

  • Global warming set to break key 1.5C limit for first time

  • Chile greenlights mining tax reform that boosts government take

  • Japan Q1 economy expands annualised 1.6 pct qtr/qtr

  • Global debt nears record highs as rate hikes trigger ‘crisis of adaptation,’ top trade body says

  • Copper and zinc sink to fresh lows amid China economic uncertainty

  • G-7 set for a show of resolve in Hiroshima: 5 things to know

BCM Updates

  • BCM Quarterly Report, Q1 2023

  • The BCM appoints Raphaël Goué as official BCM representative in Europe

  • UNICEF: Guidance for employers on flexible work arrangements and other good workplace practices in the context of Covid-19

  • UNICEF: Call for actions of the private sector to reduce children’s exposure to air pollution in UB

  • BCM Guideline for Companies to Combat Air Pollution

  • Member-to-member special offers & benefits

Economic Indicators

  • Inflation

  • Central Bank Policy Rate

  • Sovereign Credit Rating

  • Currency Rates
 
Sponsors:
 

 
 



 
 

ECONOMY

GDP INCREASES BY 7.9 PCT IN THE FIRST QUARTER OF 2023 Y/Y

In the first quarter of 2023, by preliminary estimation of the production approach, Gross Domestic Product (GDP) at current prices was MNT 13.6 trillion, which increased by MNT 4.0trillion (42.1%) compared to the same period of the previous year. GDP at 2015 constant prices was MNT 5.6 trillion, which is increased by MNT 413.6 billion (7.9%) compared to the same period of the previous year.
GDP at 2015 constant prices decreased by 3.9% in the first quarter of 2022 while increasing by 7.9 in the first quarter of 2023.
In the first quarter of 2023, seasonally adjusted GDP at 2015 constant prices increased by 0.8% compared to the previous quarter.
In the 7.9% increase in the first quarter of 2023, the agriculture sector contributed -0.2 percentage points, the mining and quarrying sector contributed 5.3 percentage points, industry and construction sectors contributed -0.3 percentage points, the service sector contributed 3.8 percentage points and net taxes on products contributed-0.7 percentage points.

Source: NSO
See also: Mongolia Shows Promising Economic Growth Boosting Current Administration Ahead of 2024 Elections

HOUSEHOLD REAL INCOME DECREASES 3.9 PCT Y/Y

According to the result of the Household Socio-Economic Survey in the first quarter of 2023, the monthly average household income was MNT 1.9   million, increased by MNT 101.1 (5.7%) thousand compared to the same period of the previous year and increased by MNT 39.9 (2.2%) thousand compared to the previous quarter.
In the first quarter of 2023, the average monthly real income (price changes adjusted) reached 1.2 million MNT, decreased by MNT 47.5 (3.9%) thousand compared to the same period previous year and increased by MNT 13.5 (1.2%) thousand compared to the previous quarter. The 3.9% decrease from the same period previous year was mainly resulted from MNT 52.6 (15.9%) thousand decrease in real income from pensions and allowances.
The monthly average household monetary income in the first quarter of 2023 was MNT 1.8 million, increased by MNT 134.3 (8.2%) thousand compared to the same period of the previous  year.

Source: NSO

FOREIGN TRADE TURNOVER REACHES USD 7.7 BILLION

In the first four months of this year, Mongolia traded with 134 countries. Foreign trade turnover amounted to USD 7.7 billion, of which export is USD 5.1 billion and import USD 2.7 billion.  
Total turnover increased by USD 2.6 billion (50.5%), specifically exports by USD 2.3 billion (81.8%), and imports by USD 310.5 million (13.2%) compared to the same period of the previous year. However, in April of this year, exports decreased by USD 198.7 million (13.1%), and imports by USD 20.2 million (2.7%) compared to the previous month.
The foreign trade balance in the first four months of 2023 indicated a surplus of USD 2.4 billion, an increase of USD 2 billion (5.4 times) compared to the same period of the previous year. However, in April of this year, there was a profit of USD 597.7 million, which decreased by USD 178.5 million (23%) from the previous month.

Source: Montsame, NSO

GROSS INDUSTRIAL OUTPUT DOWN 11.2 PCT M/M, UP MORE THAN DOUBLE Y/Y

By the preliminary results, in the first 4 months of 2023, the gross industrial output reached MNT 10.8 trillion, which increased by MNT 5.7 trillion (2.1 times more) from the same period of the previous year.  This increase was mainly due to the mining and quarrying production output increase by MNT 5.2 trillion (2.6 times more) and the manufacturing production output of 279.7 billion (23.0%), respectively.
By the preliminary results, in the first 4 months of 2023, the mining and quarrying gross output reached MNT 8.5 trillion, which increased by MNT 5.2 trillion (2.6 times more) from the same period of the previous year. This increase was mainly due to increases in coal and lignite mining by MNT 4.3 trillion (8.6 times more) and mining of metal ores by MNT 468.2 billion (17.7%) from the same period of the previous year.

Source: NSO

FITCH AFFIRMS MONGOLIA AT 'B': OUTLOOK STABLE

Fitch Ratings has affirmed Mongolia's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'B' with a Stable Outlook.
Strong Growth, External Vulnerabilities: Mongolia's ratings are underpinned by favourable medium-term growth prospects and high per capita income relative to 'B' rated peers. The ratings are constrained by the country's high reliance on external funding and commodity exports to China amid high external debt and low foreign-exchange reserves. Mongolia scores well on World Bank Governance Indicators relative to 'B' peers, but has suffered from political volatility around issues of resource nationalism.
Growth Rebound: We forecast real GDP growth of 5% in 2023, similar to 2022, on stronger mining activity and steady domestic demand. Growth will likely accelerate in 2024. Coal exports are rebounding after China's removal of border pandemic controls. Export capacity will rise further once cross-border rail links become fully operational in the next one-two years. The strategic Oyu Tolgoi copper mine's underground phase started production in March 2023, although most of the volume gains will only come from 2025.

Source: Fitch, Montsame

CAN MONGOLIA ‘SURVIVE’ AND PROTECT THE ECONOMY DURING NET-ZERO TRANSITION? - EDITORIAL

Global warming manifests itself in different ways depending on the region, zone, and location. In particular, chief economist of the Asian Development Bank (ADB) Albert Park said at the bank’s Annual Meeting on May 3 in Incheon, South Korea that given its geographic features and socioeconomic circumstances, developing Asia is vulnerable to climate-related risks. More specifically, 76.9 percent of Mongolia’s land area is estimated to have been affected by desertification.
According to the Asia in the Global Transition to Net Zero: Asian Development Outlook 2023 Thematic Report of ADB, at current levels of greenhouse gas emissions, Asia would, by itself, exhaust the remaining global carbon budget consistent with limiting warming to 1.5 degrees Celsius by 2040. Therefore, countries and international organizations are working carefully in this direction and announcing important projects and programs. For instance, this year, ADB has launched the Innovative Finance Facility for Climate in Asia and the Pacific (IF-CAP), a landmark program which will help ADB accelerate much-needed climate financing.

Source: The UB Post

ENDURING EARTH: PROTECTING MONGOLIA’S GRASSLANDS - VIDEO

Mongolia's grasslands provide a way of life for millions of people and habitat for a wide array of unique species, but they are increasingly threatened due to climate change. Protecting nature at the scale it needs to survive requires unprecedented collaboration alongside bold action. In a new initiative known as Enduring Earth, The Nature Conservancy has partnered with other global conservation organizations to assist countries with their environmental goals. 
Enduring Earth is an ambitious collaboration that works alongside nations as they accelerate and amplify conservation for a more sustainable, prosperous future for people and planet. Central to our approach is Project Finance for Permanence, an innovative and proven model that fully funds conservation projects to ensure durable and scalable impact. 

Source: The Nature Conservancy

POLITICS

PRESIDENT OF FRANCE EMMANUEL MACRON TO VISIT MONGOLIA

President of the French Republic Emmanuel Macron will pay a State Visit to Mongolia at the invitation of President of Mongolia Ukhnaagiin Khurelsukh on May 21-22. It will be a historic visit as it is the first visit at the level of the Head of State from France.
In the course of the visit, Mongolian President U. Khurelsukh and French President Emmanuel Macron will hold official talks and discuss advancing the relations and expanding cooperation between the two countries, with particular emphasis on increasing investment.
Issues on expanding the relations in fields such as green energy, road transport, health, agriculture, culture, education, and humanitarianism, and implementing mutually beneficial joint projects are expected to be topics of the talks.
Moreover, the Heads of State of the two countries will discuss cooperation within the framework of the National Campaigns, namely “Food Revolution”, “One Billion Trees” and “President’s Scholar-2100” and brief the press on the outcomes of the Visit.

Source: Montsame
See also: Mongolie: Macron en visite dimanche, une première pour un président français

CITIZENS' OPINIONS COLLECTED ON POSSIBLE CONSTITUTIONAL AMENDMENT

Parliamentarians are working in their respective constituencies to present the draft amendment to the Constitution and receive the citizens’ suggestions and opinions in accordance with an order by the speaker of Parliament. 
In particular, legislators are working in Darkhan-Uul Province, and held a meeting and discussion to get citizens’ opinions. Residents expressed their support for a mixed electoral system, while making suggestions related to manual counting of ballots and fair elections. In addition, in order to strengthen the representative capacity, the citizens supported to expand Parliament to include representatives of social groups and sectors and increase the number of members.
Members of Parliament Ts.Munkhtsetseg and D.Tsogtbaatar are meeting the Sukhbaatar District residents. They informed that in order to improve the Parliament’s ability to represent the people, the number of lawmakers will be increased to 152 in accordance with the population, and fifty percent of the total members will be elected by majority and fifty percent by proportional method in accordance with the draft amendment.

Source: The UB Post
See also: New Constitutional Amendments Toward Expansion of Parliament and Proportional Representation in Parliamentary Elections
Citizens Voice their Opinions on Constitution Amendments

VIETNAM HOLDS IMPORTANT POSITION IN MONGOLIA'S FOREIGN POLICY: OFFICIAL

Mongolia is proud to be a friend of Vietnam - a country with increasing international prestige and position in the region and the world, which has a vital position in Mongolia's foreign policy in Southeast Asia, Secretary of the National Security Council of Mongolia Jadamba Enkhbayar told President Vo Van Thuong at their meeting in Hanoi on May 17.
President Thuong highlighted the fruitful friendship between the two nations in the last nearly seven decades, saying that the bilateral relations have been continuously consolidated and developed strongly.
He highly valued the outcomes of the working session between the Mongolian delegation with the Ministry of Public Security and relevant agencies of Vietnam, stressing that on the basis of important results of the bilateral cooperation relationship, the two countries will make joint efforts to upgrade their relations and further promote comprehensive cooperation in the new context.

Source: Vietnam Plus

MONGOLIAN PEACEKEEPERS SUPPORT REFUGEES RETURN HOME IN SOUTH SUDAN FROM WAR-TORN SUDAN

South Sudanese refugees, who initially sought shelter from conflict in 2013 by fleeing to their northern neighbour, Sudan, are now heading back to their home country, given escalating violence in Sudan's capital, Khartoum.
These twice-displaced individuals urgently require humanitarian assistance and on 5 May 2023, a team of military, police, and civilian peacekeepers from the United Nations Mission in South Sudan (UNMISS), visited the South Sudan-Sudan border area, Panakuach, to assess their situation.
The team coordinated with Mongolian peacekeepers during their visit and spoke with the South Sudanese border police area commander and humanitarian workers.
According to South Sudan's Relief and Rehabilitation Commission (RRC), as of 4 May, some 1,198 returnees were recorded.
“We are doing everything we can to secure the populations returning from Sudan. In collaboration with officials from Rubkona county, we have allocated some land for them to temporarily settle, but they lack food and water. They need more assistance,” said David Lung Tuorek, an official from the RRC.

Source: UN Mongolia

GOVERNMENT TAKES STEPS TOWARDS SALARY EQUALITY

At today's Cabinet session, the Prime Minister has issued an order to take measures aimed at equalizing the salaries of employees in the culture, sports, and health sectors with those in the education and science sectors. In accordance with the Culture Law, the Cabinet has approved a procedure for providing cash benefits equivalent to six months' basic salary to cultural sector employees working in rural areas once every five years. The Minister of Culture, Ch. Nomin, and the Minister of Finance, B. Javkhlan, have been tasked with coordinating and financing these measures within the 2023 budget and reflecting the financial source in the annual state budget in the future.
Currently, Mongolia has 4,470 employees working in 432 rural-owned cultural organizations. According to the regulation, 70 percent of these employees will receive cash benefits. It is worth noting that wages in the cultural sector are lower compared to other public service sectors.

Source: Montsame

UNITED STATES LAUNCHES NEW GRANT PROGRAM TO ADVANCE CLEAN ENERGY IN MONGOLIA

The United States Agency for International Development (USAID) today launched the Mongolia Energy Research and Innovation (MERI) Fund, a small grants program to bolster Mongolia’s economic growth by facilitating the transition to clean energy.  
The grant program is part of USAID’s five-year, $12 million Mongolia Energy Governance project, which is assisting Mongolia in developing a more resilient and sustainable energy sector.  Through the project, USAID is working with key government and private sector partners to develop a more competitive and financially sustainable energy sector that will increase economic competitiveness, create a more stable and secure domestic energy supply, and develop more renewable energy projects.  
“The U.S. government is pleased to provide these funding opportunities that will help build a robust energy sector ecosystem, strengthen the institutional and human capacity of Mongolian organizations, and develop the necessary tools to facilitate the energy sector transition,” USAID Deputy Development Advisor Steve Winkates said at the launch event. 

Source: U.S. Embassy in Mongolia

 

THE CURRENT STATE OF MIGRATION TO MONGOLIA

With a mining-reliant economy and environmental factors contributing to desertification and the loss of agricultural resources, it is not surprising that Mongolians migrate internally from rural to urban centers. Mongolia’s capital, is close to several mines and is almost always the desired destination. There, migrants can find urban jobs and social infrastructure not as readily available in rural communities.
Besides the Mongolians themselves, there are anti-war Russians and their families seeking refuge or temporary stays in Ulaanbaatar. Despite the icy capital being over 200 miles away from the closest border, Russians are undeterred by the distance. Vladimir Putin’s military conscription, which occurred in late 2022, was the leading cause of this exodus.
The fight for a new home and way of life is not easy and challenges exist for those who cross the border and enter the capital: overcrowding, expensive housing and limited social services to name a few. With the current system, there are evident inadequacies and wealth disparity.

Source: Borgen Magazine
See also: Internal Migration Situation in Mongolia: Situation Analysis Report

SLOVENIAN-MONGOLIAN PARLIAMENTARY FRIENDSHIP GROUP ESTABLISHED

On her visit to the Republic of Slovenia, Minister of Foreign Affairs B. Battsetseg paid a courtesy call on President of the National Assembly of Slovenia Mrs. Urška Klakočar Zupančič, and exchanged views on the possibility of expanding relations and cooperation between Mongolia and Slovenia.
At the beginning of the meeting, Minister of Foreign Affairs B. Battsetseg conveyed the greetings of Chairman of the State Great Khural of Mongolia G. Zandanshatar, and talked about expanding economic cooperation between Mongolia and Slovenia and working together in the fields of tourism, forest management, information technology, water management, and renewable energy.
President of the National Assembly Urška Klakočar Zupančič informed about the establishment of the Slovenian-Mongolian parliamentary friendship group in the National Assembly of the Republic of Slovenia.

Source: Montsame

UB MAYOR: PARTNERSHIP BETWEEN ULAANBAATAR AND SEOUL TO BE BROUGHT TO A NEW LEVEL - INTERVIEW

Governor of the capital city and Mayor of Ulaanbaatar D.Sumiyabazar is working on an official appointment in the Republic of Korea. In this context, he met with Chairman of the Seoul Metropolitan Council Kim Hyeon-gi, and the Mayor Oh Se-hoon. Mayor D.Sumiyabazar explained about cooperation between the two cities and future possibilities.
-What are the possibilities for cooperation in the future?
-Seoul is a leading city in the region. Therefore, the two cities can work together to increase investment and trade, fight against climate change, and solve urban problems. Special attention will be paid to localize and study the experience of smart and rational solutions and decisions implemented by Seoul in the direction of reducing air and environmental pollution, increasing green areas, reducing traffic congestion, and increasing access to public transportation. The content of the meeting with the Mayor of Seoul and the Chairman of the Seoul Metropolitan Council was also aimed at this.

Source: Mayor's Office
See also: Mayor met with the Chairman of the Seoul Metropolitan Council
Ulaanbaatar to cooperate with Seoul in four directions
Cooperation with KOICA in development projects discussed
The public transport payment system to be improved

DORNOGOVI PROVINCE WILL ESTABLISH A NEW STANDARD FOR COLLABORATION WITH MINING COMPANIES - INTERVIEW

In recent years, the issue of local mining relations has become a major problem. It has become common for companies with mining lilicenses to go to local communities and face opposition from the people. Therefore, Mining Insight Odjargal.E spoke with the Batjargal.O Governor of Dornogovi province to convey the views of the local people at a time when the discussions on the revisions to the Minerals Law are in full swing.
How does the mining industry contribute to the economy of the province in terms of its position and role?
Dornogovi province has been the mining hub of Mongolia since the socialist era, with significant infrastructure and railways established to support it. The establishment of the Erdenet Mining Corporation led to the creation of "Mongolrostsvetmet" fluorspar concentration plants in Urgun and Dalanjargalan soums, transporting their products via railroad. Additionally, the Zuunbayan oil refinery was also established in the region. In recent years, there has been a rise in the development of major infrastructure related to mining…

Source: Mining Insight

 

DR. D. ALTANTSETSEG: THE REFINERY PROJECT MOVES FORWARD TO CONSTRUCTION PHASE - INTERVIEW

Montsame interviewed Dr. D. Altantsetseg, the Executive Director of the state-owned company “Mongol Refinery” LLC, Mongolia's Consulting Engineer, about the progress of the Mongol Refinery Project.
The Government of Mongolia is implementing the Project to establish a grass root Oil Refinery Plant based on domestic crude in Dornogobi aimag, located in Southeastern part of the country, within the framework of the soft loan extended by the Government of India to ensure energy independency and expand the industry diversification. 
Upon approving the Detailed Feasibility Study and selecting "Engineers India Limited" as Project Management Consultant in 2019, the design and engineering works had started, and from this year on, the mechanical erection of the main technological facilities will start at full capacity. 
Out of four main EPC packages planned for the project, the first package, which comprises of non-technological facilities, such as civil buildings (office-training center, first aid center, fire station, warehouse, laboratory, workshop, canteen…

Source: Montsame
See also: 

WILL NORTH KOREA’S FOREIGN MINISTER VISIT MONGOLIA THIS YEAR? - EDITORIAL

In 2023, Mongolia and North Korea will mark both the 75th anniversary of the establishment of their diplomatic relations and the 35th anniversary of the visit of late North Korean leader Kim Il Sung to Mongolia.
Amid the pandemic, people’s exchanges and economic and trade relations were temporarily suspended for three years, but the two sides strengthened their friendly relations and exchanged greetings on the occasion of national traditional festivals every year.
In articles published by the Korean Central News Agency, North Korea’s main state mouthpiece, Mongolia has been mentioned more than 100 times in the past three years. Mongolian President Khurelsukh Ukhnaa was mentioned nine times, Foreign Minister Battsetseg Batmunkh was mentioned eight times, and Prime Minister Oyun-Erdene Luvsannamsrai was mentioned once.
In 2018-19, Mongolia caused an unexpected stir by offering to host a summit between then-U.S. President Donald Trump and North Korean leader Kim Jong Un in Ulaanbaatar.

Source: The Diplomat
See also: Mongolia detains 4 North Koreans who illegally crossed into country from China

MONGOLIA SHOWS CANADIAN FOREIGN POLICY DOMINATED BY MINING COMPANIES - EDITORIAL

An important facet of Canadian foreign policy is advancing the interests of mining companies. In Mongolia it’s largely all Global Affairs Canada does. 
Canadian ambassador Catherine Ivkoff regularly travels to Canadian-run mines, speaks at international mining conferences, does interviews with mining publications and talks up the sector in various other business and political forums. “We will be working to promote Canadian Green Mining solutions and initiatives in Mongolia”, noted a recent headline based on an interview with Ambassador Ivkoff. 
In a recent Canadian Journal of Development Studies article headlined “Mining self-interest? Canadian foreign aid and the extractive sector in Mongolia”, Stephen Brown points out that Canada’s aid in the Central Asian nation is largely designed to advance mining interests. An embassy official told Brown that Canadian aid in the country of 3.5 million people is “focused exclusively in the extractive sector” even though the World Bank warned that Mongolia’s economy was excessively reliant on mining.

Source: Spring Magazine

UNVEILING THE PATH TO PREVENTING CONFLICT OF INTERESTS - EDITORIAL

Proposed amendments to the law on the regulation of public and private interests, as well as the prevention of conflict of interest in public service, seek to restrict high-ranking politicians and senior officials from engaging in business ventures with the government. To ensure the effectiveness of this law, robust oversight measures are imperative.
Since its establishment in 2006, the anti-corruption agency has been striving to address conflicts of interest among politicians that not only erode public trust but also undermine effective governance.
In December 2022, public outrage reached its peak, manifesting in a significant demonstration in Ulaanbaatar's main square.
In response, Prime Minister Luvsannamsrain Oyun-Erdene launched an ambitious anti-corruption campaign earlier this year, encompassing operations such as "whistleblow" to expose corruption crimes, "wipe-out" to remove "parasites" from public offices, and to bring back overseas escapees. This comprehensive campaign also aims to recover illegal funds hidden offshore.

Source: Mongolia Weekly

BUSINESS

PRIMARY MARKET TRADING OF “TRADE AND DEVELOPMENT BANK OF MONGOLIA” WILL START

According to Resolution No.180 of the Financial Regulatory Commission dated May 12, 2023, and Order No. A/68 of the CEO of the Mongolian Stock Exchange dated May 3, 2023, “Trade and Development Bank of Mongolia” LLC will offer 2,530,047 shares to the public at MNT 33,000. 
The primary market trading of the “Trade and Development Bank of Mongolia” LLC will be organized through the MSE IPO system from May 18, 2023, to May 23, 2023.
“Trade and Development Bank of Mongolia”s leading underwriter is “Mirae Asset Securities Mongolia UTsK” LLC and “TDB Securities UTsK” LLC is the co-underwriter.
Please click here for the detailed prospectus.

Source: MSE, FRC

PRAGUE TO ULAANBAATAR DIRECT FLIGHTS LAUNCHING THIS JUNE

Mongolia’s Eznis Airways company will introduce direct flights from Prague to Ulaanbaatar as of June. Direct flights are another step in developing Mongolian and Czech tourism after Mongolia lifted visa requirements for Czech tourists.
Details on the flight frequency and departure dates have not yet been announced. A bilateral agreement on direct flights was made in 2017, but the flights failed to materialize. There was renewed diplomatic interest in the idea in 2020, but the pandemic and other issues caused delays.
Mongolian students will come to Czechia starting in 2024 as part of a scholarship program. Czech Foreign Minister Jan Lipavský and his Mongolian counterpart Battsetseg Batmunkh announced the developments at a press conference after their talks in Prague yesterday. In addition to education, both foreign ministers discussed cooperation in trade and the environment.

Source: Expats.cz

ACTION PLAN FOR INCREASING PARTICIPATION OF TOP-100 COMPANIES IN THE CAPITAL MARKET APPROVED

Mr. D.Bayarsaikhan (Chairman, Financial Regulatory Commission) and Mr. O.Amartuvshin (President, Mongolian National Chamber of Commerce and Industry) approved the Action plan for increasing the participation of TOP-100 companies in the capital market.
Mr. D.Bayarsaikhan highlighted that as a result of the comprehensive policy and regulatory measures taken by the Financial Regulatory Commission (FRC) within the framework of the Strategy to Reduce Loan Interest Rates, Banking Reform, and Privatization of State-Owned companies, 60 new financial products have been issued in the last 2 years, and as of 17 May 2022, the market capitalization reached MNT8.7 trillion, an increase of 26.8% compared to the same period of 2022. In addition, while 5 companies issued IPOs and raised MNT340 billion, one company issued open-end bonds with a value of MNT20 billion. On the OTC market, 76 companies issued more than 100 new products and raised MNT1.1 trillion.

Source: FRC

EBRD AND KHAN BANK PROMOTE WOMEN ENTREPRENEURSHIP IN MONGOLIA

Women-led businesses in Mongolia will benefit from new funds made available by the European Bank for Reconstruction and Development (EBRD) through the country’s largest commercial lender, Khan Bank.
The EBRD’s loan of up to US$ 20 million to Khan Bank, its client since 2007, will help promote women’s entrepreneurship and business activity by assisting with access to finance and technical advice. It is expected that up to US$ 5 million of the total amount will be earmarked to support digitalisation of these businesses, as envisaged by the Bank’s Central Asian Women in Business Programme.
As part of the project, Khan Bank will be able to develop the financial products and lending practices that these women-led micro, small and medium-sized enterprises need, including for their digitalisation.  This activity is supported through grant funds provided under the Women Entrepreneurs Financing Initiative (We-Fi).

Source: EBRD

TMK ENERGY AND TALON ENERGY COMPLETE DRILLING AT LUCKY FOX-2, MONGOLIA

TMK Energy has completed drilling at the Lucky Fox-2 well as part of its pilot well drilling program at the Gurvantes XXXV CSG project in the South Gobi Basin in Mongolia.
The Lucky Fox-2 well was drilled to a depth of 407 metres, intersecting up to 62 metres of gassy coal.
Drilling and installation of production casings and tubing were completed on May 15.
TMK Energy reported the rig would soon be moved to the site of the final well in the pilot well program, Lucky Fox-3.
“The rig is now moving to the final well in the program, Lucky Fox–3, which is expected to commence drilling in the next few days following the rig move and some routine maintenance,” he said.
The pilot well program includes the drilling of three individual production wells spaced approximately 200 metres apart, with drilling expected to be completed by the end of May.

Source: The Market Herald, The West Australian

STEPPE GOLD UNVEILS POSITIVE FINANCIAL RESULTS FOR FIRST QUARTER OF 2023, OUTLINES FUTURE OUTLOOK

Steppe Gold Ltd has reported positive financial results for the first quarter of 2023 and outlined its future outlook.
The company's revenue for the quarter amounted to $9,525,000 generated from the sale of 5,008 ounces of gold and 651 ounces of silver. The average realized prices per ounce were $1,899 and $19, respectively.
Steppe Gold produced 6,993 ounces of gold and 19,877 ounces of silver during the quarter, resulting in an operating income of $6,024,000 from mine operations before depreciation and depletion.
The company's consolidated group adjusted EBITDA, after stream payments, reached $2,141,000 for the quarter. Steppe Gold reported an all-in-sustaining cost (AISC) of $679 per ounce sold during the quarter.
Mining activity during the period involved the extraction of 87,362 tonnes of ore, with 195,196 tonnes stacked on the leach pad, carrying an average gold grade of 0.94 grams per ton (g/t) and an average silver grade of 5.81 g/t.

Source: Proactive Investors
See also: Steppe Gold Announces Q1 2023 Financial Results

ELIXIR ENERGY TO EXPAND NOMGON PILOT PROJECT AS COMMERCIAL POTENTIAL FOR CBM GROWS IN MONGOLIA

Elixir Energy Ltd has revealed an expansion of the Nomgon Pilot Project underway at the Nomgon IX Coal Bed Methane (CBM) Production Sharing Contract (PSC) in the South Gobi Basin of Mongolia.
As part of the expansion plan for the pilot production project, the company will extend the flow period and drill an additional pilot well.
This comes as the company believes the commercial potential for CBM in Mongolia is significant due to comparatively much lower drilling costs and access to gas prices that reflect the East Asian region as an LNG importer rather than an exporter.
Elixir's strong view is that the commerciality of CBM in the Mongolian context has material advantages over the likes of Australia.
Elixir completed the workover of the two-well pilot project at Nomgon IX in early April 2023. This involved the existing completions being removed, cleaned out and replaced.

Source: Proactive Investors

EBRD PROMOTES NEW RETAIL FORMAT IN MONGOLIA WITH GS25

The European Bank for Reconstruction and Development (EBRD) is helping to introduce new retail formats in Mongolia by supporting the expansion of Digital Concept, an operator of convenience stores.
Digital Concept, which runs the GS25 convenience store franchise chain, will use a Bank loan of up to US$18 million to open as many as 63 new shops by the end of 2023 and to finance the construction of a food factory and logistics centre.
The Bank’s financing will underpin the company’s investment programme, aimed at opening more than 100 new stores a year to 2027 in the country’s capital, Ulaanbaatar, as well as in the cities of Darkhan and Erdenet.
The programme will implement a popular GS25 Korean convenience store model, introduce new food retail industry standards to the country and bring a wide range of food products, everyday items, and fresh food and drinks to Mongolian customers.

Source: EBRD

IT COMPANIES CONSORTIUM TO TAKE PART IN ONLINE COAL TRADING

Given the Mining Exchange Law will come into effect on July 1, the parties involved in online coal trading of the Mining Exchange began to be identified. "Erdenes IT Consortium", an association of information and technology companies is evidence. They intend to work together to create an eco-system in the mining industry by developing transport logistics, payment, and IT modules in online coal trading. To this end, a joint forum was organized under the theme "Ensuring the participation of parties in the operation of the Mining Exchange" on May 10.
The information and technology consortium participating in online coal trading includes 11 companies such as "Itzone," "iTools," "Gerege systems," "Cody," "Digital Finex," "Utility solution," "InnoSolution," "Itauco," "DPS" (Digital Payment Solution), and "Anicar" which have a long history of operating in the field of information technology in Mongolia. Executive Director of "Erdenes IT Consortium" B. Buyannemekh clarified, "Currently, in the mining ecosystem of our country a complex platform for product spot, forward and futures trading, option transactions, their payment and tracking of transport logistics has been developed."

Source: Montsame

EBRD AND XACBANK CONTINUE GREEN LENDING PARTNERSHIP IN MONGOLIA

Companies and households across Mongolia will be able to modernise production, increase their energy efficiency and improve their climate resilience thanks to a new financing package organised by the European Bank for Reconstruction and Development (EBRD) for the country’s most active green lender, XacBank.
The package of up to US$25 million, arranged under the EBRD’s Green Economy Financing Facility, consists of an EBRD loan of up to US$ 18.75 million and financing of up to US$ 6.25 million provided by the Green Climate Fund (GCF).The funds will be on-lent to borrowers to reduce energy consumption, promote the use of renewable energy sources and support local businesses in adopting environmentally friendly practices.
XacBank, one of the largest banks in Mongolia, was the first local financial institution to join the EBRD’s GEFF. It supports green lending to micro, small and medium-sized enterprises through 72 branches across the country.

Source: EBRD

THERE ARE NO STANDARDS SET IN TOURISM SERVICES - EDITORIAL

A tour operator of Mongolia cooperated with a foreign company manager and organized a trip involving well-known and famous people, however the manager shook his head and said, “Mongolia is not ready yet.” Tourists who came here to get to know Mongolia’s winter stayed at the recreation and tourism complex in Arkhangai Province, which operates throughout the four seasons and is considered the largest in our country. But this was just a name. From the characteristic, attitude and service of the employees, many things did not meet the travelers’ expectations. Although it was a holiday and tourism complex, the electricity and hot water are cut off shortly as they are on, and the food does not arrive on time, leaving foreigners surprised. When the manager from the tour operator company complained to the resort, they almost threatened to kick them out because of their high demands. The young man, who expressed his frustration said, “When the service organizations are in this poor state, our country should not talk or dream about receiving one million tourists.”

Source: The UB Post
See also: "Mongolia-Japan Tourism Forum-2023" in Tokyo

GLOBAL AND REGIONAL NEWS

GLOBAL WARMING SET TO BREAK KEY 1.5C LIMIT FOR FIRST TIME

Our overheating world is likely to break a key temperature limit for the first time over the next few years, scientists predict.
Researchers say there's now a 66% chance we will pass the 1.5C global warming threshold between now and 2027.
The chances are rising due to emissions from human activities and a likely El Niño weather pattern later this year.
If the world passes the limit, scientists stress the breach, while worrying, will likely be temporary.
Hitting the threshold would mean the world is 1.5C warmer than it was during the second half of the 19th Century, before fossil fuel emissions from industrialisation really began to ramp up.
And breaking the limit even for just one year is a worrying sign that warming is accelerating and not slowing down.
The 1.5C figure has become a symbol of global climate change negotiations. Countries agreed to "pursue efforts" to limit global temperature rises to 1.5C under the 2015 Paris agreement.

Source: BBC

CHILE GREENLIGHTS MINING TAX REFORM THAT BOOSTS GOVERNMENT TAKE

Lawmakers in Chile’s lower house of Congress gave final approval on Wednesday for a long-awaited mining tax reform that now requires only the signature of leftist President Gabriel Boric, who has publicly backed it, to become law.
The reform will require large copper and lithium producers that operate in the mineral-rich Latin American nation to pay more taxes and royalties to the government.
Chile is the world’s top copper producer and No. 2 in lithium, both seen as key to making future fleets of electric vehicles powered by rechargeable batteries.
By a vote of 101 in favor to 24 against, lawmakers approved modifications to the tax and royalty bill endorsed by the Senate last week.
The lopsided vote was hailed by Finance Minister Mario Marcel, who underscored that the higher government take required of mining companies would address past abuses.

Source: Reuters

JAPAN Q1 ECONOMY EXPANDS ANNUALISED 1.6 PCT QTR/QTR

Japan's economy grew an annualised 1.6% in January-March from the previous quarter, as firm private consumption and an unexpected rise in capital expenditure offset shrinking external demand, government data showed on Wednesday.
The first-quarter gross domestic product figures was much larger than economists' median estimate for a 0.7% annualised growth. The expansion translated into a quarterly increase of 0.4%, the data showed.
Domestic private consumption, which makes up more than half the economy, grew 0.6% quarter-on-quarter in January-March, and capital expenditure, a key engine of growth, gained 0.9%, against economists' estimate for a decrease.
External demand, or net exports, shaved off 0.3 percentage point off the first-quarter gain, which was more than offset by positive domestic-demand contribution of 0.7 percentage point.

Source: Reuters
See also: ‘Foreign investors are back’: Japan stocks surge to their highest since 1990

GLOBAL DEBT NEARS RECORD HIGHS AS RATE HIKES TRIGGER ‘CRISIS OF ADAPTATION,’ TOP TRADE BODY SAYS

The global debt pile grew by $8.3 trillion in the first quarter to a near-record high of $305 trillion as the global economy faced a “crisis of adaptation” to rapid monetary policy tightening by central banks, according to a closely-watched report from the Institute of International Finance.
The finance industry body said the combination of such high debt levels and rising interest rates has driven up the cost of servicing that debt, triggering concerns about leverage in the financial system.
Central banks around the world have been hiking interest rates for over a year in a bid to rein in sky-high inflation. The U.S. Federal Reserve earlier this month lifted its fed funds rate to a target range of 5%-5.25%, the highest since August 2007.
“With financial conditions at their most restrictive levels since the 2008-09 financial crisis, a credit crunch would prompt higher default rates and result in more ‘zombie firms’ — already approaching an estimated 14% of U.S.-listed firms,” the IIF said in its quarterly Global Debt Monitor report late Wednesday.

Source: CNBC
See also: Debt in advanced economies is piling on to global challenges, says World Bank president

COPPER AND ZINC SINK TO FRESH LOWS AMID CHINA ECONOMIC UNCERTAINTY

Prices for nonferrous metals like copper and zinc have slumped this month despite predictions of shortages just a few weeks ago, on concerns that the shortfalls could turn into surpluses if Chinese demand recovers more slowly than expected.
Three-month zinc futures on the London Metals Exchange, an international benchmark, fell to $2,483 per tonne at one point Tuesday, the lowest since October 2020 and down by roughly half from the all-time high reached in spring 2022.
Copper sank as low as $8,090.50 per tonne the same day, its weakest in nearly half a year, while lead has slid to a three-month nadir. All three commodities, used in a range of construction and industrial applications, have seen especially sharp declines this month in particular.
This came as a surprise to many market players, as it occurred after industry groups and investment banks had forecast tighter supplies than previously expected.

Source: Nikkei Asia

G-7 SET FOR A SHOW OF RESOLVE IN HIROSHIMA: 5 THINGS TO KNOW

The Group of Seven leaders will gather on Friday in Hiroshima for a three-day summit where, in light of Russia's invasion of Ukraine, they are expected to reaffirm their commitment to an international order rooted in the rule of law.
The leaders are also scheduled to visit historic spots in Hiroshima, the target of one of two atomic bombs the U.S. dropped in World War II. By showcasing that legacy, Japanese Prime Minister Fumio Kishida aims to underscore the need for a world "without nuclear weapons" at a time when nuclear threats are rising.
A number of leaders from outside the G-7 -- including Indian Prime Minister Narendra Modi and South Korean President Yoon Suk Yeol -- are also invited.
Here are five things to know.

Source: Nikkei Asia, CNBC
See also: G7 Japan summit to target Russian exports in latest Ukraine war sanctions

 

 

BCM QUARTERLY REPORT, Q1 2023

The Business Council of Mongolia delivers you its First Edition of the BCM Quarterly Report of 2023. The first edition covers all events organised by the BCM through the months of January - March. The fuller version of the articles can be found in the highlighted "details" part on the report.

PDF:  2023 First Quarterly Report 

Source: BCM

THE BCM APPOINTS RAPHAËL GOUÉ AS OFFICIAL BCM REPRESENTATIVE IN EUROPE

The Business Council of Mongolia is pleased to announce Mr. Raphaël Goué as an official BCM Representative in Europe.

Raphaël Goué is an expert in energy and banking, having spent more than 12 years in Asia as well as being involved in Europe-Asia cross-border projects since the mid-90s, with a focus on financial services, energy and telecommunications.

Mr. Goué has a wealth of experience in supporting global financial institutions and energy companies in their strategies in Asia, as well their development and M&A. He has previously held various positions in organizations such as Société Générale, Vivendi Universal, Booz & Co and Capital One in Europe, Africa and Asia. As a senior advisor of the global retail banking association EFMA, Raphaël has been supporting the development of banking’s leading association in selected Asian markets, and supporting EFMA in the fintech sector in Europe.

He holds an engineering degree from the École Nationale Supérieure de Géologie in Nancy, France, a master in material science from École de Mines de Nancy, and a MBA from HEC (Paris) he finalized at the Columbia Business School (New York).

The BCM is looking forward to expanding its reach to Europe with Mr. Goué’s leadership and assistance.
 

UNICEF: GUIDANCE FOR EMPLOYERS ON FLEXIBLE WORK ARRANGEMENTS AND OTHER GOOD WORKPLACE PRACTICES IN THE CONTEXT OF COVID-19


A family friendly workplace or employer is one whose policies and practices make it possible for employees and/or workers to more easily achieving work-life balance, and to fulfil both their work and family obligations. These policies may include, but are not limited to, childcare, breastfeeding rooms, flexible work arrangements, paid leave, safe transport, parenting education and so on. 
In Mongolia and various other countries, authorities have enforced kindergarten- and school closure policies as part of the preparedness and response to contain the COVID-19 epidemic. In addition to the impacts on children’s education, there are concerns about children’s protection and well-being as children are left alone or without adequate care as many parents still need to go to work. COVID-19 may also have negative effects on mental health and wellbeing of patients (if any), caregivers, children and adolescents and the public, such as experiencing fear of the consequences of infection with a new virus, and triggering stigma. Those placed in quarantine (or self-isolated) may experience boredom, loneliness, and anger.
By promoting flexible working arrangements such as adjusted working hours, working from home and/or support childcare, your employees will be in better position to address any childcare challenges and not be distracted by concerns about their children’s safety and wellbeing at home.

Click here to view in English.

Click here to view in Mongolian.

UNICEF: CALL FOR ACTIONS OF THE PRIVATE SECTOR TO REDUCE CHILDREN’S EXPOSURE TO AIR POLLUTION IN UB
 
Too many children are at risk of dying in UB due to air pollution each year. In addition to longer-term measures to reduce overall levels of air pollution in Ulaanbaatar, UNICEF recommends that companies address some of their CSR activities in the following ways:
  1. Provision of air purifiers to kindergartens, schools and clinics. Children spend a considerable amount of their time in school. Air purification systems are demonstrated to be effective in reducing air pollution levels within a home or classroom. Recent innovations have made these more affordable, durable and effective. Every classroom should have an air purifier.
  2. Provision of electric heaters to kindergartens, schools and clinics. Electric heaters can help to reduce ambient air pollution. Reducing financial barriers to access can also help improve use of electric heaters.
  3. Improved construction and insulation in kindergartens, schools and clinics. This can help reduce the amount of air pollution that enters facilities where children spend most of their time. It also saves considerably on heating costs. Studies show some improvements can decrease air exchange by up to 40%.
  4. Provision of air pollution monitoring devices in kindergartens, schools and clinics. Monitoring devices are often a first, major step to understanding one’s own risk to air pollution. It can not only inform improved practices to reduce exposure, but it is also an effective mechanism for communities to better understand what is causing air pollution, and when it is particularly harmful.
  5. Improved awareness and behaviour-change campaigns. Low awareness amongst communities about the impacts of air pollution on child health and how to respond is a key barrier to addressing the air pollution crisis. There is a need to influence policymakers, relevant government institutions, businesses, CSOs, development partners, and the general public (including families and children) about the risks that air pollution poses to their health, as well as provide guidance and recommendations on various ways to address some of the most immediate threats.
These actions will reduce children’s exposure to air pollution, safeguarding them from the worst impacts at the same time as building momentum and creating an enabling environment for longer plans that reduce air pollution. UNICEF will provide guidance on these recommendations where possible. UNICEF can also help facilitate connections between actors, agencies and institutions, including schools/ clinics where children are particularly affected. However, in order to maximize efficiency, these projects should be planned, developed, implemented and monitored by the private sector company involved. Nor will any funding go through UNICEF. This helps enhance accountability, and allows private sector donors to be more actively involved in the solution of directly supporting children in UB to breathe cleaner, healthier air.
For more information and guidance, please contact UNICEF for (Amy Wickham, This email address is being protected from spambots. You need JavaScript enabled to view it.; and Sunjidmaa Jamba, This email address is being protected from spambots. You need JavaScript enabled to view it.)
 
BCM GUIDELINE FOR COMPANIES TO COMBAT AIR POLLUTION

Purpose: This Guideline document is to help CEOs and business leaders quickly identify possible actions they can implement in their organizations against air pollution.

Resources for information on Air Pollution

Specific ACTIONS that companies can take NOW:

Educate employees about air pollution; invite guest speakers; encourage employees to share information with friends and family; discuss possible solutions with employees

  • Possible topics: damages and causes of air pollution, protection measures, energy consumption & efficiency; indoor air quality (smoking indoors); breastfeeding & healthy diet; vehicle idling; vehicle maintenance;

Work environment:

  • Improve energy efficiency in building/office to reduce energy consumption;
  • Plant & maintain trees; install air cleansing plants in the office;
  • Install HEPA air filter and air purifiers to tackle indoor air pollution (For an affordable solution, visit http://smartairfilters.com/mn/en/;
  • Install monitoring devices;
  • Smart Air Mongolia masks

Work activities:

  • Ensure company vehicles are well maintained to reduce pollution emissions;
  • Drivers/employees instructed to not idle & to turn off vehicle engine when not moving;
  • Implement carpooling activities;
  • In polluted air, ensure employees wear pollution masks;

Social responsibility:

  • Focus CSR (corporate social responsibility) initiatives to tackle air pollution
  • Tackle air pollution in UB: UNICEF recommends focusing on areas where children are especially affected, and where urgent interventions need to be put in place to protect them as soon as possible. These include the provision of air filtration systems and electric heaters in kindergartens and schools in some of the worst-affected regions. For more information and guidance, please contact UNICEF for (Nicholas Rees, This email address is being protected from spambots. You need JavaScript enabled to view it.; and Sunjidmaa, This email address is being protected from spambots. You need JavaScript enabled to view it.);
  • Run marketing/PR campaigns & contests that raise awareness about air pollution.

List of distributors for pollution masks:

  • BRB – 70119967, 99658555
  • BOX shop – 99062387, 75557007, 90878111 – Facebook: RZ утааны маск
  • CATD LLC – 11327308, 99114346
  • Mmarket – 75758001 – Facebook: Утааны Маск
  • MONOS Pharmacy – 99190858
  • Seven summits – 11317923
  • 3M Mongolia Premier Service - 9400-3088, 9910-3335
  • Utaanii Mask – 99906643 – Facebook: Утааны маск + Агаар шүүгч
  • Cycling World Mongolia LLC authorized distributor of RESPRO pollution masks- 77110444
​MEMBER-TO-MEMBER SPECIAL OFFERS & BENEFITS:
 
- Orchuulga 24 is providing a 15% discount on written translation services to BCM Members
- Ombol LLC is offering free Hepatitis C medication to employees of BCM member organizations, provided that the individual pays into state health insurance.
 

ECONOMIC INDICATORS

HISTORIC ANNUAL INFLATION

Year 2009   *4.2% [source: NSOM]
Year 2010 *13.0% [source: NSOM]
Year 2011 *10.2% [source: NSOM]
Year 2012 *14.0% [source: NSOM]
Year 2013 *12.5% [source: NSOM]
Year 2014 *11.0% [source: NSOM]
Year 2015   *1.9% [source: NSOM]
Year 2016   *1.1% [source: NSOM]
Year 2017   *6.4% [source: NSOM]
Year 2018   *8.1% [source: NSOM]
Year 2019   *5.2% [source: NSOM]
Year 2020   *2.3% [source: NSOM]
Year 2019   *13.4% [source: NSOM]
*Year-over-year (y-o-y), nationwide

CENTRAL BANK POLICY LOAN RATE

December 31, 2008 - 9.75% [source: IMF]
March 11, 2009 - 14.00% [source: IMF]
May 12, 2009 - 12.75% [source: IMF]
June 12, 2009 - 11.50% [source: IMF]
September 30, 2009 - 10.00% [source: IMF]
May 12, 2010 - 11.00% [source: IMF]
April 28, 2011 - 11.50% [source: IMF]
August 25, 2011 - 11.75% [source: IMF]
October 25, 2011 - 12.25% [source: IMF]
March 19, 2012 - 12.75% [source: Mongol Bank]
April 18, 2012 - 13.25% [source: Mongol Bank]
January 25, 2013 - 12.50% [source: Mongol Bank]
April 8, 2013 - 11.50% [source: Mongol Bank]
June 25, 2013 - 10.50% [source: Mongol Bank]
July 30, 2014 - 12.00% [source: Mongol Bank]
January 14, 2015 - 13.00% [source: Mongol Bank]
January 14, 2016 - 12.00% [source: Mongol Bank]
May 6, 2016 - 10.50% [source: Mongol Bank]
August 18, 2016 - 15.00% [source: Mongol Bank]
December 19, 2016 - 14.00% [source: Mongol Bank]
June 15, 2017 - 12.00% [source: Mongol Bank]
December 22, 2017 - 11.00% [source: Mongol Bank]
March 23, 2018 - 10.00% [source: Mongol Bank]
November 27, 2018 - 11.00% [source: Mongol Bank]
March 11, 2019 - 10.00% [source: Mongol Bank]
April 13, 2020 - 9.00% [source: Mongol Bank]
September 14, 2020 - 8.00% [source: Mongol Bank]
November 11, 2020 - 6.00% [source: Mongol Bank]
January 1, 2022 - 6.50% [source: Mongol Bank]

SOVEREIGN CREDIT RATING

Moody’s Fitch S&P
B3     – stable – 16 Mar 2021
B3     – negative – 8 May 2020
B3     – stable – 18 Jan 2018
Caa1 – stable – 30 Mar 2017
Caa1 – neg. watch – 15 Feb 2017
Caa1 – stable – 18 Nov 2016		 B   – stable – 9 Jul 2018
B-  – positive – 17 Nov 2017
B-  – stable – 22 Nov 2016
B   – stable – 24 Nov 2015
B+ – negative – 13 Dec 2013		 B   – stable – 10 Nov 2018
B-  – stable – 19 Aug 2016
B   – stable – 03 Nov 2015
B+ –   neg.  – 29 Apr 2015


CURRENCY RATES –  18 May 2023

Currency     Rate
U.S. dollar USD   3,459.33
Euro EUR   3,741.96
Japanese yen JPY   25.10
British pound GBP   4,306.87
Hong Kong Dollar HKD      441.84
Russian ruble RUB        43.07
Chinese yuan CNY      492.15
South Korean won KRW          2.59
Copyright © 2023 *Business Council of Mongolia*, All rights reserved.

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BCM NewsWire 782 – 12 May 2023

NEWSWIRE
 


NewsWire

Issue 782 –  12 May 2023
Introducing BCM's AI-generated video of top news stories of the week.

BCM NewsWire provides short summaries of news collected from around the world. Each article is kept to a maximum of 150 words for brevity, but click on the link next to “Source” to read the full article.

Economy

  • Inflation stands at 11.3 pct in April

  • Mongolia Jan-Apr coal exports to China surge 5.4-fold YoY

  • Industrial producer prices increased by 2.8 pct from the previous month, down 0.6 pct y/y

  • Explainer: Why large parts of Mongolia are affected by desertification

  • Apartment price expected to drop

  • Ger areas around Doloon Buudal, Chingeltei Avenue to be redeveloped

  • Get Ready for the 12th Annual "Mongolia Mining 2023" Expo in October!

  • ‘Considering young population’s skills is essential for Mongolia to thrive in the future’ - Interview

  • Unless you pay these professionals well, it won’t matter if it’s a sought-after profession - Editorial

  • Mongolia's building boom traps capital residents in concrete jungle - Editorial

Politics

  • The cabinet submits the constitutional amendments to the parliament

  • All High-Ranking Officials to be Prohibited from Participation in Government Procurement Activities

  • Minister of Foreign Affairs on Visit to the Czech Republic

  • Canada-Mongolia Parliamentary Group Re-established

  • Electricity Tariff Twice Cheaper than Its Cost

  • Chongqing to Cooperate in Ulaanbaatar Development Projects

  • City administration to use RFID chips to monitor traffic

  • Ch. Nomin: The Cultural Essence is the Cornerstone of Our Existence

  • Signing of Memorandum of Understanding with Switzerland Tourism

  • Mongolia's coal anti-corruption storm: How did pillar industries become "high-ranking officials' businesses"? - Editorial

  • An Interview With the Prime Minister of Mongolia - Interview

  • Mitigation Q&A: Mongolia’s experiences in NDC implementation - Interview

  • Press Interview on Mongolian Foreign Minister Battsetseg’s Working Visit to the PRC - Interview

  • Third Neighbors Unhampered by Two Neighbors - Editorial

  • Defacto Review, May 7 - Video

Business

  • Climate-tech start-up URECA launches platform for individuals and corporates to invest in carbon credits

  • Steppe Gold reaches definitive deal to acquire Canada’s Anacortes Mining

  • Oyu Tolgoi Production Will Reach Its Peak by 2030

  • Mongolia-Korea Forum of Tour Operators

  • Mongolian Gers are being Exported to the USA and Australia

  • Best taxpayers awarded

  • FRC Chairman meets with representatives of the Commodity Futures Trading Commission of the U.S.

  • Shinhan Bank signs digital finance business agreement with Khan Bank of Mongolia

  • TMK pushes ahead in Mongolian coal seam gas hunt

  • Katja Fjellström: The key ingredient of a successful startup is being prepared to pivot - Interview

Global and Regional Trends

  • Central bank gold demand hits first-quarter record, investments surge on U.S. banking turmoil

  • Vietnam boosts rare earths output by tenfold - data

  • World Health Organization Says COVID-19 Is No Longer a Global Emergency

  • China’s imports fall in April as clouds gather for economic outlook

  • Africa needs USD 700bn of finance for green energy and metals

  • Australia exports first copper to China since 2020, industry hopes end to ban near

  • Red metal rising: Argentina sets lofty sights on global copper top 10

  • Philippines hits 6.4 pct GDP growth in Q1 2023 despite inflation pressures

  • ASEAN's patchy economic growth suggests long road to recovery - Editorial

BCM Updates

  • BCM Quarterly Report, Q1 2023

  • The BCM appoints Raphaël Goué as official BCM representative in Europe

  • UNICEF: Guidance for employers on flexible work arrangements and other good workplace practices in the context of Covid-19

  • UNICEF: Call for actions of the private sector to reduce children’s exposure to air pollution in UB

  • BCM Guideline for Companies to Combat Air Pollution

  • Member-to-member special offers & benefits

Economic Indicators

  • Inflation

  • Central Bank Policy Rate

  • Sovereign Credit Rating

  • Currency Rates
 
Sponsors:
 

 
 



 
 

ECONOMY

INFLATION STANDS AT 11.3 PCT IN APRIL

Mongolia's inflation, as measured by the consumer price index, rose 11.3 percent year on year in April, data from the country's National Statistics Office (NSO) showed Tuesday.
The increase was mainly related to the higher prices of imported goods, especially food products, the NSO said.
More than half of over 400 items of the landlocked country's consumer goods and services basket are imported, according to the statistical agency.
Mongolia has aimed at reducing its inflation rate to a single digit by the end of this year, the country's central bank has said.

Source: Xinhua, NSO

MONGOLIA JAN-APR COAL EXPORTS TO CHINA SURGE 5.4-FOLD YOY

Mongolia's coal exports totaled 19.05 million tonnes during January-April 2023, surging 15.26 million tonnes or 402.41% year on year, showed data from the Mongolian Customs General Administration (MCGA).
The export amounts totaled $3.06 billion during the first four months, jumping 187.66% year on year.
MCGA didn't release the specific figure for April, and Sxcoal calculated the shipments at 5.27 million tonnes based on the overall exports published by the administration.
The volume surged 315.37% or 4 million tonnes year on year and decreased 11.4% or 0.68 million tonnes month on month, data showed.
In April, the export amounts totaled $818 million, with the average price calculated at $155.26/t, down $151.33/t year on year and $8.79/t month on month.
Mongolia exported 18.76 million tonnes of coal to China over January-April, soaring 444.04% year on year, taking up 98% of the total.

Source: sxcoal.com
See also: Mongolia will open a new export gateway at Gashuunsukhait port for coal traded through the stock exchange

INDUSTRIAL PRODUCER PRICES INCREASED BY 2.8 PCT FROM THE PREVIOUS MONTH, DOWN 0.6 PCT Y/Y

In April 2023, by preliminary results, the industrial producer price index (2015=100) reached 221.7, which decreased by 0.6% from the same period of the previous year, but increased 2.8% from the previous month.
Producer prices in the industrial sector decreased by 0.6 percent in April 2023 compared to the same period of the previous year due to a 3.3% decrease in producer prices of mining and quarrying subdivision (18.8% in the extraction of crude petroleum and natural gas).
In April 2023, the 2.8% increase in the industrial producer prices from the previous month was mainly resulted from 3.0% increase in producer prices of mining and quarrying subdivision (price of mining of coal and lignite 5.8%, mining of metal ores increased by 3.9%, and 0.3% increase in extraction of crude petroleum and natural gas by).
The 0.6% decrease in industrial producer prices from the same period of previous year mainly resulted from 2.8 percentage point in the producer price of mining and quarrying.

Source: NSO

EXPLAINER: WHY LARGE PARTS OF MONGOLIA ARE AFFECTED BY DESERTIFICATION

Strong winds and heavy dust storms are frequent occurrences in Mongolia as the Asian country is facing worsening desertification and land degradation, with a steady decline in vegetation cover year by year.
Mongolia has a total land area of 1,564,116 square km, but only around 8 percent is covered by forests.
Around 77 percent of Mongolia's total territory has been affected by desertification and land degradation, according to official data from the country's Ministry of Environment and Tourism.
It is said that climate change and human activities are the two main causes of desertification in Mongolia.
In April, most parts of the country were hit by strong winds and dust storms almost every day, according to Mongolia's weather monitoring agency.
Climate change-related desertification has been the main factor behind the increasing frequency of yellow dust storms in Mongolia in recent years, according to the country's environment ministry.

Source: Xinhua

APARTMENT PRICE EXPECTED TO DROP

On May 4, the Construction Development center presented information about the revival of the construction industry and housing prices during a press conference. Founder of Barilga.mn G.Batsukh said, “The construction industry’s growth and decline lags behind the growth and decline of the economy. There was a small bump during the pandemic and the construction works have not started much. However, construction work is now starting and recovering from this month.
During the pandemic, the demand for housing and real estate increased thanks to the 10-billion economic stimulus program, the increase in the amount of mortgage loans and the influx of cash. The prices of new and old apartments have increased accordingly. There is no regulation to control this as there is a secondary trading of the real estate market. As for citizens, they are responsible for the rise and fall of prices based on the principle of supply and demand.”

Source: The UB Post
See also: Housing price index, in April of 2023

GER AREAS AROUND DOLOON BUUDAL, CHINGELTEI AVENUE TO BE REDEVELOPED

The meeting of the Council of Governor of the capital city was held on May 4 to discuss the issue of determining the location, size, boundaries, and purpose of the project for redeveloping and building a new residential area in the 14th and 15th khoroos of Sukhbaatar District, or Doloon Buudal.
The amendment of the Ulaanbaatar 2020 Master Plan and Development approach 2023 include the development of Ulaanbaatar into eight regions and 47 units. Selbe sub-center of the northern region belongs to the ninth unit. The sub-center was established to reduce over-concentration of the capital's population, increase the access to affordable housing, create healthy and safe working and living conditions for citizens, and reduce air, soil, and water pollution.
As part of the development of the Selbe sub-center, road, heat, electricity, communication, water supply, sewerage network, flood protection dam, landscaping, and green areas works were executed with soft loans from the Asian Development Bank.

Source: The UB Post

GET READY FOR THE 12TH ANNUAL "MONGOLIA MINING 2023" EXPO IN OCTOBER!

The twelfth rendition of the "Mongolia Mining 2023" International Mining and Oil Expo is set to take place from October 4th to 6th at the Buyant-Ukhaa Complex in Ulaanbaatar. This highly anticipated event will showcase cutting-edge solutions, equipment, and techniques from around the world, all of which are designed to drive innovation and advance the mining sector. With a focus on the latest technologies and best practices, this exhibition promises to be an invaluable platform for industry professionals, investors, and stakeholders alike.
Mongolia Mining 2023 exhibition is set to be bigger than ever, with more than 200 leading mining supplier companies from around the world participating. Representing countries such as England, China, Turkey, Poland, Canada, Australia, the Czech Republic, India, Belarus, and Russia, these exhibitors will showcase a wide range of innovative products and services. Attendees can expect to see geophysical exploration and research companies, mining technology providers, ore processing and crushing plant equipment suppliers…

Source: Mongolian Mining Journal

‘CONSIDERING YOUNG POPULATION’S SKILLS IS ESSENTIAL FOR MONGOLIA TO THRIVE IN THE FUTURE’ - INTERVIEW

The 56th Annual Meeting of the Board of Governors of the Asian Development Bank (ADB) took place between May 2 and 5 in Incheon, South Korea. During the meeting, we interviewed Director General of the East Asia Department of the bank Teresa Kho and Country Director for Mongolia Pavit Ramachandran to talk about the implementation of the projects and programs, and what will be done within the Innovative Finance Facility for Climate in Asia and the Pacific (IF-CAP) recently announced by the bank. They stated their respective positions in the following interview. 
Under the theme of Rebounding Asia: Recover, Reconnect, and Reform, this year’s Annual Meeting has been held. This is the first fully in-person annual meeting since 2019. Therefore, this year, the post-covid revival and reform is highlighted. What proposals and initiatives are countries making in this context? How compatible are these with the goals of our country?  
…

Source: The UB Post

UNLESS YOU PAY THESE PROFESSIONALS WELL, IT WON’T MATTER IF IT’S A SOUGHT-AFTER PROFESSION - EDITORIAL

At the end of last March, Mongolian government re-approved the priority areas of development and in-demand professions. In doing so, 83 professions were included in the priority areas of higher education, and 38 were in demand. These professions were determined based on policy documents such as “Vision-2050”, “Medium-term plan for the development of the education sector through 2021 to 2030”, and reports issued by international organizations in the fields of labor market and economy, says expert of higher education of Ministry of Education and Science.
The priority areas of higher education are mining, geology, information and communication, engineering production, nanoscience, biotechnology, energy, agriculture, animal husbandry, forestry, construction, architecture, transport, logistics, defense, soil majors, agrochemistry, and water supply. Education, tourism, health, food production, forestry, culture, and art professions are in demand. The aforementioned professions are in demand in the Mongolian labor market and will continue to be this way in the foreseeable future.

Source: The UB Post

MONGOLIA'S BUILDING BOOM TRAPS CAPITAL RESIDENTS IN CONCRETE JUNGLE - EDITORIAL

Across Ulaanbaatar, high-rises are replacing the yurts that Mongolians have for centuries called home, symbols of a nomadic life that is fading away.
Locals say the construction boom -- fuelled by a decade-long mining windfall -- is squeezing out room for much-needed public services, from new hospitals to children's playgrounds.
"When I was a child I spent all day outside," said Otgoo, who only gave one name. "We used to play soccer, running like a wolf or rabbit in big empty spaces."
"My kids can't run like us. All places are filled with new apartment buildings."
Mongolia's mining boom drove double-digit growth, with vast profits from coal making up a quarter of the country's gross domestic product in 2022.
The industry has sparked a wave of demand for office space and luxury apartments in Ulaanbaatar.
The boom, however, has largely not included vital civic infrastructure, leaving many children growing up without outdoor recreational facilities, parents told AFP.

Source: France24

POLITICS

THE CABINET SUBMITS THE CONSTITUTIONAL AMENDMENTS TO THE PARLIAMENT

The cabinet, on May 3, discussed the bill on the amendments to the constitution of Mongolia and decided to submit it to the parliament.  Afterward, D. Amarbayasgalan, Chief of the Cabinet Secretariat, submitted the bill to G. Zandanshatar, Speaker of the Parliament. 
The amendments include the proposal to increase the number of parliament members from 76 to 152.  
The Mongolian constitution approved in 1992 states that the parliament consists of 76 members. At that time, one parliament member represented 27,000 voters. The researchers say the number has increased to 44,000. Policymakers and researchers believe that increasing the number of parliament members can improve the parliament's ability to represent the people.
The amendments also include the proposal to use a mixed electoral system for holding parliamentary elections. Mongolia conducted the 2016 and 2020 parliamentary elections using the majoritarian system. Legislators believe that this prevents representatives of all sectors of society from working at the decision-making level and making their voices heard.

Source: Government of Mongolia

ALL HIGH-RANKING OFFICIALS TO BE PROHIBITED FROM PARTICIPATION IN GOVERNMENT PROCUREMENT ACTIVITIES

Prime Minister Oyun-Erdene presented the draft amendment to the Law on Regulation of Public and Private Interests and Prevention of Conflict of Interest in Public Service and addressed the Parliament session on May 4. We present the summarized transcript of his speech for your perusal:
"As we gather today, we are reminded of our historical responsibility to rebuild trust in government and by protecting the reputation of the fundamental pillars of democratic governance - the legislative, executive, and judiciary powers. It is our duty to put an end to the mistakes and corruption of the past 30 years, to respect the interests of the people, to truly fulfill the right of citizen representation, and to usher in a new era of ethical leadership for the next 30 years.
We, as members of State Great Khural, belong to the people, and we must lead by example. Ethical, disciplined, and responsible leadership should begin with us, in this hall.”

Source: Montsame
See also: Speaker: Law on Ethics of Public Servants to Serve as the Foundation for Combating Corruption

MINISTER OF FOREIGN AFFAIRS ON VISIT TO THE CZECH REPUBLIC

Minister of Foreign Affairs B. Battsetseg is on a Visit to the Czech Republic between May 11 and 12.
Within the framework of the Visit, the Minister of Foreign Affairs Battsetseg will hold official talks with Jan Lipavský, the Minister of Foreign Affairs of the Czech Republic to discuss expanding relations and cooperation in trade, economy, investment, and other sectors between the two countries. Other meetings are planned with the President of the Senate, Deputy Prime Minister, and Minister of Industry and Trade of the Czech Republic.
Traditionally, Mongolia and Czech maintain active cooperation in the geology and mining sectors. To that extent, during the Visit, a Memorandum of Cooperation will be signed, with a particular emphasis on reviving and further intensifying the relations in these sectors.
As part of the Visit, Minister B. Battsetseg will meet Mongolian citizens residing in the Czech Republic and exchange views on their social welfare, pension, and implementation of the Agreement on Social Security, which was signed by the governments of Mongolia and the Czech Republic.

Source: Montsame

CANADA-MONGOLIA PARLIAMENTARY GROUP RE-ESTABLISHED

A ceremony was held in the Parliament of Canada on May 10 in connection with the re-establishment of the Canada-Mongolia Parliamentary group in the Parliament of Canada.     
The Canada-Mongolia Parliamentary Caucus in the Canadian Parliament has 18 members of the Senate and the House of Commons, and is chaired by Senator Michèle Audette. The Canada-Mongolia Parliamentary Group was first established in the Canadian Parliament in 2003. Cooperation between the supreme legislative bodies is an important component of the relationship between Mongolia and Canada, and it has made a valuable contribution to strengthening the common democratic values of the two countries.
Speaker of the Senate of the Canadian Parliament George J. Furey, who was an official visit to Mongolia in 2022, representatives of the Canadian Ministry of Foreign Affairs and other honored guests attended the event.

Source: Montsame

ELECTRICITY TARIFF TWICE CHEAPER THAN ITS COST

Chairman of the Executive Office of the Energy Regulatory Commission B. Bolor-Erdene informed journalists today about the real cost, consumption, and demand of electricity in Mongolia.
The cost of electricity is currently MNT 224 for one kWh and it is sold to consumers for an average of MNT 211-213. Household consumers purchase one kWh of electricity for MNT 141-142. This is 58 percent lower than the actual cost. As for heating energy, consumers get 55 percent lower of its cost; loss is proportionate. Last year the energy sector’s operating loss amounted to MNT 187 billion.
The losses are increasing. This leads to such risks as an increase in debts, inability to carry out necessary maintenance and repair at thermal power stations and heating and electricity networks, and delay of equipment renewal.
This situation will negatively affect the reliable supply of electricity and heat to consumers. The urgent need to bring the price of energy to its real cost is obvious.

Source: Montsame

CHONGQING TO COOPERATE IN ULAANBAATAR DEVELOPMENT PROJECTS

Chongqing, one of the major cities of China, the center of car manufacturing, technology, and finance in the country, has agreed to cooperate in the development projects of Ulaanbaatar. Yesterday "Ulaanbaatar City Development Corporation" JSC and Chongqing Federation of Industry and Commerce signed a Memorandum of Understanding on Cooperation.
General Manager of Chongqing Qianyi Trading Co., LTD Li Wenjun informed that they would supply the required equipment and machinery for public utilities of Ulaanbaatar. The Chinese side will provide necessary financial support for leasing and purchasing equipment.
"We will renew the city and public utility fleet of auto vehicles and machinery in the frame of this cooperation. The essence is to carry out this work in cooperation with foreign and domestic businesses and investors without loading the burden on the budget. Such an opportunity opens today," said Executive Director of Ulaanbaatar City Development Corporation N. Bayarchimeg.

Source: Montsame

CITY ADMINISTRATION TO USE RFID CHIPS TO MONITOR TRAFFIC

Digitalization and Smart technologies can play a crucial role in tackling the issues that Ulaanbaatar city is facing. As 50 percent of the total population of Mongolia resides in the capital city, Ulaanbaatar is grappling with numerous challenges, such as air pollution, traffic congestion, and inadequate infrastructure.  
The Capital City Department of Digital Development and Information Technology has been developing a unified transport system to be the next E-Mongolia of the road sector. The objective is to improve the registration and monitoring process of 654 thousand vehicles in Ulaanbaatar by utilizing the RFID system. Currently, 161 RFID antennas have been installed throughout the capital city and the system is expected to significantly improve the detection of traffic violations. 
Moreover, a live traffic map is slated to be launched this year. This Map will show real-time traffic information, including public transportation, the location, and route of child buses, traffic congestion, and available parking spaces.

Source: Montsame
See also: Mongolian officials check out the MMDA’s traffic management measures

CH. NOMIN: THE CULTURAL ESSENCE IS THE CORNERSTONE OF OUR EXISTENCE

The Ministry of Culture has launched the "Cultural Revival" Campaign, in line with the State policy on Culture and a goal of strengthening national common values, which included in "Vision-2050", Mongolia's long-term development policy, and ensuring the implementation of cultural laws.
Yesterday, the opening of the campaign was inaugurated by the Minister of Culture Ch. Nomin and the Chairman of the Tuv Aimag’s Citizens’ Representatives Meeting Ts. Jambalsuren at the "Mongol Tuurgatan" Theater of Tuv Aimag.
In her opening remarks, Minister of Culture Ch. Nomin highlighted that Preserving and developing national history, language, culture, heritage, and customs is the foundation of our existence and the vital immunity of Mongolians. The State's policy on having common values and being unified with its culture and tradition has been reinforced, and cultural issues are deeply reflected in the policy decisions of the President, the State Great Khural, and the Government of Mongolia.

Source: Montsame

SIGNING OF MEMORANDUM OF UNDERSTANDING WITH SWITZERLAND TOURISM

On 8 May 2023, Ambassador D. Gerelmaa and Mr. Federico Sommaruga, Director of the Emerging Markets and Special Projects of Switzerland Tourism signed a Memorandum of Understanding for cooperation in the field of tourism between the Tourism Development Center of Mongolia and Switzerland Tourism.
Within the framework of the three-year Memorandum of Understanding the parties will work together to develop cooperation between educational institutions that train professionals in the field of tourism and will publish content, books, and magazines promoting the history, culture, tradition, and natural features of the two countries as well as to intensify mutual advertising and increase the flow of tourists.

Source: Montsame

MONGOLIA'S COAL ANTI-CORRUPTION STORM: HOW DID PILLAR INDUSTRIES BECOME "HIGH-RANKING OFFICIALS' BUSINESSES"? - EDITORIAL

Mongolia enacted an anti-corruption law in 12, and in 2006, following the model of Singapore, Hong Kong and other places, established anAnti-corruption agency independent of the government and parliament. Mongolia's Minister of Law and Internal Affairs Niambaatar recently revealed that the corruption case of the country's largest state-owned coal enterprise has involved more than 200 people, including at least six current members of the national Great Hural (parliament), a number of former presidents, current or former ministers, etc.
After the corruption case at the Taben Tolgoi coal mine came to light, another former Mongolian president, Bagabandi, resigned as a director of Oyu Tolgoi, another pillar mining company in the country, on April 4. Mongolia enacted an anti-corruption law in 12, and in 2006, following the model of Singapore, Hong Kong and other places, established an anti-corruption agency independent of the government and parliament, IAAC, with full responsibility for anti-corruption supervision and investigation.

Source: TellerReport.com

AN INTERVIEW WITH THE PRIME MINISTER OF MONGOLIA - INTERVIEW

The incumbent prime minister of Mongolia, Oyun-Erdene Luvsannamsrai took office in 2021. While the new administration was under immediate pressure to strategize a post-COVID economic recovery plan, both internal and external challenges continue to soar. 
The prime minister answered questions from The Diplomat’s Bolor Lkhaajav on his administration’s policies and solutions for fighting corruption, maintaining a strong foreign policy, and streamlining foreign direct investment (FDI). The interview below has been lightly edited for clarity.
Considering Mongolia’s mining-dependent economy, diversification is necessary. What are some of the diversification plans and investment opportunities Mongolia is currently initiating with third neighbors?
We have a number of diversification plans in place to boost investment opportunities in Mongolia stemming from our landmark “New Recovery Policy,” which will create an investment-friendly climate. Our overarching message to foreign investors is clear: Mongolia is open for business.

Source: The Diplomat

MITIGATION Q&A: MONGOLIA’S EXPERIENCES IN NDC IMPLEMENTATION - INTERVIEW

The NDC Action project supports Mongolia in its focus on energy efficiency in the industrial sector and on climate resilient agriculture.
In these short interviews two of our partners explain how the project has assisted in implementing mitigation measures in the industry sector, where Mongolia focuses on improving the energy efficiency of industrial electric motors and installing energy-efficient lighting, implementing international standards for energy management and improving energy consumption norms per unit of production.
Khiimorisain Purevdorj, Specialist at Energy Conservation Department, Energy Regulatory Commission:

  1. How the NDC Action project is helping/has helped Mongolia reach the goals in the priority areas?

I believe that the project had a good contribution on identifying potential setbacks, policy gaps, and measures to tackle these when implementing the NDC Implementation Action Plan 2021-2025. With the Action Plan being the official document outlining the commitments Mongolia made towards climate mitigation and adaptation together with other countries, the project performed very necessary work of connecting the key stakeholders and providing consolidated information.

Source: UN Environment Programme

PRESS INTERVIEW ON MONGOLIAN FOREIGN MINISTER BATTSETSEG’S WORKING VISIT TO THE PRC - INTERVIEW

Minister of Foreign Affairs of Mongolia Batmunkhiin Battsetseg paid a working visit to China on May 1-2, 2023 at the invitation of a member of the State Council and Minister of Foreign Affairs of the People's Republic of China Qin Gang.
-What were the concrete issues that were agreed?
-President of Mongolia Ukhnaagiin Khurelsukh paid a state visit to the PRC in November 2022, during which he met with President Xi Jinping. Both sides reached an agreement at the highest level on issues such as promoting and developing bilateral relations and cooperation in the new era. In order to significantly contribute to the nation’s development we are mainly focusing on putting these agreements into action.
One of the priorities of Mongolia’s foreign policy is to develop friendly relations with our two neighbors. China too attaches great importance to its relations and cooperation with Mongolia and considers Mongolia as its good neighbor, good friend and good partner.

Source: Montsame

THIRD NEIGHBORS UNHAMPERED BY TWO NEIGHBORS - EDITORIAL

We have seen that the special operation of the Russian military in Ukraine (actually, the "Russian-Ukrainian war") shocked Mongolians, dividing and quarreling them for a whole year.
The standpoint of the Mongolian State is clear. The recent State visit of the President of Poland and the visit of the US Under Secretary of State have confidently demonstrated that Mongolia has been maintaining a multi-pillar, peace-loving, and active foreign policy.
President  Khurelsukh stated, "May this beautiful BROTHERLY friendship between Mongolia and Poland flourish for generations!"
It is the Mongolian State’s assessment of the representative of the brotherly Polish people and the definition of the significance of the visit in one phrase. Do you agree?
“Poland is one of the third neighbors and close partners of our country, and the relations and cooperation between the two countries have been continuously developing even during difficult times. We are happy that Poland has decided to restore its Embassy in Mongolia and is officially opening it during the State visit,” said the President. 

Source: Montsame

DEFACTO REVIEW, MAY 7 - VIDEO

Highlights of the week:
1. Another constitutional law amendments were submitted by the Government
2. About oil refinery project
3. A discussion on amendments to the Investment Law

Source: Jargal Defacto

BUSINESS

CLIMATE-TECH START-UP URECA LAUNCHES PLATFORM FOR INDIVIDUALS AND CORPORATES TO INVEST IN CARBON CREDITS

Singapore-headquartered climate-tech start-up URECA has launched its climate investing platform to allow individuals and corporations to buy, sell and trade carbon credits from key projects aimed at reducing greenhouse gas emissions.
The platform is available for web, Android and iOS smartphones, and will connect investors with project developers that are accredited by some of the world’s biggest international carbon offset standard programs, including clean development mechanism (CDM), Gold Standard, Verra and the Spanish registry of carbon footprint by the Ministry for the Ecological Transition and the Demographic Challenge (MITECO) in Spain.
Investors can access specific details of the respective projects on the marketplace, such as the developer details, credit rating details, the sustainable development goals attained and the methodology adopted for each project.
The platform also allows investors to invest in household-level projects which are powered by URECA’s digital measurement, reporting and verification (MRV) standards, through IoT engineering and machine learning to remotely verify carbon offsets.

Source: The Edge Singapore

STEPPE GOLD REACHES DEFINITIVE DEAL TO ACQUIRE CANADA’S ANACORTES MINING

Mongolia-based precious metals company Steppe Gold has signed an arrangement agreement to acquire Canadian miner Anacortes Mining.
The deal is expected to result in the formation of a leading junior gold producer with the prospect of ‘significant’ growth in the near term.
It will see Steppe Gold purchasing all of the issued and outstanding common shares of Anacortes, which owns 100% of the Tres Cruces gold project in north-central Peru.
The project is 127km from Trujillo, on the Pacific coast.
Steppe Gold and Anacortes signed a binding letter of intent for the acquisition in March and extended the agreement last month.
Situated near the existing Lagunas Norte project, the Tres Cruces project includes a large and underexplored land package.
It has indicated resources of 2.5 million ounces at 1.65g/t and inferred resources of 104,000oz at 1.26g/t, inclusive of 630,000oz of high-grade 1.28g/t of leachable gold.

Source: Mining Technology
See also: Steppe Gold building Mongolia's premier precious metals group and progressing ATO mine expansion plans
Steppe Gold raises $12.1 million for expansion in Mongolia

OYU TOLGOI PRODUCTION WILL REACH ITS PEAK BY 2030

On March 13, Mongolia announced to have built the world's fourth largest mine. This mega project, started on a solitary steppe, has expanded into a site employing 20 thousand people. A decade ago, there were speculations whether it was right or wrong, profitable or unprofitable to mine the wealth beneath the southern Gobi soil, now we can conclude that this debate has been irreversibly resolved. In fact, implementation of any mega project is a very scrupulous endeavor. Opening of the underground mine has clearly demonstrated that the Mongolians in cooperation with specialists of 44 countries around the world succeeded to implement this mega project within a short period of time
Mongolian Youth and World Knowhow
The Mongolians, constituting 97 percent of the total 20 thousand workforce, have managed to get used to instructions and knowhow of foreign specialists within a very short time. The ability to compete with the mines of the world and show off the intelligence and skills of Mongolian people is the biggest benefit from this project.

Source: Montsame

MONGOLIA-KOREA FORUM OF TOUR OPERATORS

Forum of tour operators of Mongolia and the Republic of Korea was held last weekend at the Corporate Convention Center. Representatives of some 90 tourism companies from South Korea had tet-a-tet meetings with their Mongolian counterparts.
Minister of Environment and Tourism of Mongolia B. Bat-Erdene noted that the first forum is the realization of the initiative of Mongolian Prime Minister L. Oyun-Erdene to reciprocally organize tourism forums of the two countries in the frame of the “Years to Visit Mongolia” during his visit to the Republic of Korea.   
Secretary of the Embassy of the Republic of Korea in Mongolia in charge of tourism Jung Phil Hyun and related officials took part in the forum, at which a discussion on the topics "Mongolian Tourism Products and Trends" and "Characteristics and Features of Korean Tourists" took place.  

Source: Montsame

MONGOLIAN GERS ARE BEING EXPORTED TO THE USA AND AUSTRALIA

Mongolian ger, or yurt as it is known worldwide, is attracting many people as eco-friendly, affordable home for off-grid living, glamping and a variety of other purposes such as yoga studio.
Mongolia exports around 1000 yurts a year to China, Russia, Australia, Belgium, Canada, Germany, Spain, France, England, Netherlands, South Korea, the United States, Hungary and other countries.
Most of the gers are exported through intermediaries, which are often foreign nationals and companies, who buy cheap yurts in Mongolia and resell at big margins. Thus, most of the profit from yurt exports are retained by the intermediaries, and local makers gets only a small portion of the total value-added.
Ashid Ger LLC is the only company in Mongolia making yurts in its own workshop and delivering yurts directly to its customers without any intermediaries. The company offers their yurts for sale through their website OriginalYurts.com.

Source: News.mn

BEST TAXPAYERS AWARDED

Some of the companies that pay the biggest amount of tax are:
- Erdenet Mining Corporation SOE (1.2 trillion MNT)
- Erdenes Tavan Tolgoi JSC (990 billion MNT)
- Oyu Tolgoi (440 billion MNT)
- Energy Resource LLC (289 billion MNT)
- Tavan Tolgoi JSC (261.6 billion MNT).
It can be seen that A rating companies are mining and mineral producing companies.
Big segment companies are:
- Mobicom corporation LLC (62 billion MNT)
- Unitel group LLC (61 billion MNT)
- MCS Coca-Cola LLC (39 billion MNT)
Some of the medium segment companies are:
- U-Plant LLC (4.7 billion MNT)
- Master Time LLC (4.1 billion MNT)
- Best Western Tech LLC (2.5 billion MNT)
…

Source: The UB Post, Montsame

FRC CHAIRMAN MEETS WITH REPRESENTATIVES OF THE COMMODITY FUTURES TRADING COMMISSION OF THE U.S.

The Law on Mining Products Exchange, which was approved by the Parliament, is set to be enforced from the 30th of next month. In order to ensure the effective implementation of the law and to make necessary preparations, the Financial Regulation Commission (FRC) has established a working group with the participation of representatives from relevant organizations. The FRC is taking measures related to the drafting of regulation stipulated by the law and ensuring readiness for trading of mining products and its’ clearing and settlement.
To support these efforts, the Chairman of the FRC, D. Bayarsaikhan, met with Mr.Kevin Piccoli, Head of Technical Assistance of the Office of Foreign Affairs of the US Commodity Futures Trading Commission, and a representative of the US Embassy in Mongolia. During the meeting, they discussed the importance of foreign and domestic experts' knowledge and advice in carrying out the tasks related to the Law on Mining Products Exchange.

Source: FRC
See also: Meeting with Asian Development Bank Officials
FRC Chairman Receives IMF Resident Representative

SHINHAN BANK SIGNS DIGITAL FINANCE BUSINESS AGREEMENT WITH KHAN BANK OF MONGOLIA

Shinhan Bank announced on the 8th that it has signed a strategic business agreement with Mongolia’s largest bank, Khan Bank, to promote digital finance.
Established in 1991, Khan Bank operates over 540 branches throughout Mongolia, and is the largest commercial bank in Mongolia, used by about 80% of Mongolia’s total population.
Recently, Khan Bank set ‘digital innovation’ as its strategic goal to promote digital-based banking innovation and chose Shinhan Bank as its benchmark.
Key executives and board of directors visited Shinhan Bank twice last year to experience various cases of digital innovation, including the futuristic store model ‘Digilog Branch’. Go’ was newly established in Mongolia.
Khan Bank then asked Shinhan Bank to share its know-how on overall digital finance, including digital strategy, innovative service, and ICT system.

Source: PostsEn.com

TMK PUSHES AHEAD IN MONGOLIAN COAL SEAM GAS HUNT

TMK Energy is pushing ahead with its second pilot well, Lucky Fox-2, after pulling up 60m of gaseous coal from its maiden Lucky Fox-1 production well at its Gurvantes XXXV coal seam gas (CSG) project in Mongolia.
Lucky Fox-2 was spudded earlier this week and has been drilled down to almost 140m.
The Perth-based oil and gas explorer is plunging three pilot production wells spaced about 200m apart into the highly-prospective coal seam. The wells are centred on an exploration well, known as Snow Leopard-2, which was drilled in last year’s exploration campaign that returned 91m of gaseous coal recording 97 per cent methane content.
Once drilling is completed, the company is set to install downhole pumps and connect surface facilities to the wells. TMK expects its first gas breakthrough within one or two months from the commissioning of the pilot well pumps, which is slated for the third quarter of this year after a period of controlled dewatering of the wells.

Source: The West Australian

KATJA FJELLSTRÖM: THE KEY INGREDIENT OF A SUCCESSFUL STARTUP IS BEING PREPARED TO PIVOT - INTERVIEW

Mongolian Economy Magazine spoke with Katja Fjellström, a Business Coach at Minc, about how Minc has become one of the most successful startup incubators in Sweden, how entrepreneurs can join Minc programs and what successful startups have in common.
-Could you briefly introduce yourself to our readers?
-My name is Katja Fjellström and I work as a business coach at Minc in the City of Malmö. My main work is to provide support to early-stage founders at the programs offered by Minc. I was born and raised in Malmö and studied e-commerce at IHM Business School. In the past I have worked in the areas of sales, marketing and retail.
-What led you to pursue a career in business coaching? Would you mind telling the story behind it?
-When I was studying e-commerce at IHM Business School, I found myself deeply interested in business development. It indeed felt like a good match considering my marketing background mixed with my high interest in people.

Source: Mongolian Economy

GLOBAL AND REGIONAL NEWS

CENTRAL BANK GOLD DEMAND HITS FIRST-QUARTER RECORD, INVESTMENTS SURGE ON U.S. BANKING TURMOIL

Demand for gold among central banks notched a first-quarter record high in the three months to the end of March as overall global demand painted an otherwise “mixed picture,” according to the World Gold Council.
Gold prices broke through the $2,000 per ounce barrier this week and are flirting with record highs as global economic uncertainty, a possible pause in Federal Reserve interest rate hikes and potential further trouble in the U.S. banking sector drive investors toward the precious metal.
Total gold demand, however, was up 1% from the first quarter of 2022 thanks to a recovery in the OTC market.
In the three months to the end of March, central banks added 228 tons to global reserves, the highest rate of purchases seen in a first quarter since the data series began in 2000, though a slower rate than in recent quarters.

Source: CNBC

VIETNAM BOOSTS RARE EARTHS OUTPUT BY TENFOLD - DATA

Vietnam's mined output of rare earths soared tenfold last year, U.S. data showed, as global firms have flocked to the Southeast Asian country with the world's second largest estimated deposits to reduce reliance on China for the key industrial metals.
Past attempts to build up Vietnam's rare earth industry have stuttered due to falling prices and regulatory hurdles, but growing sales of electric vehicles (EVs) and firms' efforts to diversify their suppliers has revived interest in Vietnam.
Australian Strategic Materials Ltd (ASM) said on Monday that it would buy 100 tonnes of rare earth oxides this year from Vietnam Rare Earth Co and is looking for a longer term supply agreement.
ASM said a longer-term agreement with the Vietnamese firm would provide it with a multi-source feedstock option and additional supply security for its processing plant in South Korea.
Vietnam's rare earth mine production jumped to 4,300 tonnes last year from 400 tonnes in 2021, according to the United States Geological Survey.

Source: Reuters

WORLD HEALTH ORGANIZATION SAYS COVID-19 IS NO LONGER A GLOBAL EMERGENCY

The World Health Organization said Friday that COVID-19 no longer qualifies as a global emergency, marking a symbolic end to the devastating coronavirus pandemic that triggered once-unthinkable lockdowns, upended economies worldwide and killed at least 7 million people worldwide.
WHO said that even though the emergency phase was over, the pandemic hasn’t come to an end, noting recent spikes in cases in Southeast Asia and the Middle East. The U.N. health agency says that thousands of people are still dying from the virus every week.
“It’s with great hope that I declare COVID-19 over as a global health emergency,” WHO Director-General Tedros Adhanom Ghebreyesus said.
“That does not mean COVID-19 is over as a global health threat,” he said, adding he wouldn’t hesitate to reconvene experts to reassess the situation should COVID-19 “put our world in peril.”

Source: Time, BBC

CHINA’S IMPORTS FALL IN APRIL AS CLOUDS GATHER FOR ECONOMIC OUTLOOK

China’s import volume posted its biggest contraction in a year last month, while exports expanded at a slower pace than expected, casting doubt over the pace of the country’s economic recovery after three years of pandemic restrictions.
Imports fell 7.9 per cent year on year in April, a far deeper decline than analysts’ expectations of a 0.2 per cent contraction, according to a Bloomberg poll. Exports in the month rose 8.5 per cent compared with a year earlier, following an unexpected jump in March and benefiting from a low base last year.
Tuesday’s mixed trade data release was closely watched across markets for clues on the state of China’s economy, which has thrown off conflicting signals as it emerges from three years of closure under anti-coronavirus rules.
Gross domestic product expanded 4.5 per cent in the first quarter of the year and exports expanded after months of weakness, while tourism over a recent national holiday surpassed pre-pandemic levels for the first time.

Source: Financial Times
See also: China’s exports rose 8.5%, continuing its growth streak at a slower pace
China’s service sector remains a bright spot as factory data disappoints

AFRICA NEEDS USD 700BN OF FINANCE FOR GREEN ENERGY AND METALS

Africa will need more than $700-billion in finance over the next decade to develop renewable power and mines to extract the metals required for the green energy transition, according to Standard Bank Group.
The continent’s financial institutions won’t be able to provide even half of that and most of the money will need to come from investors from elsewhere, Kenny Fihla, chief executive officer of Standard Bank’s corporate and investment banking unit, said.
“Many of the minerals that are required to build solar panels, lithium batteries, wind turbines and so on, are found in sub-Saharan Africa,” Fihla said. “Our team has also quantified the amount of investment that is required in that space as in the order of hundreds of billions of dollars.”
African governments are under pressure to extend power supply to the 600-million people — about half of the continent’s population — who currently don’t have access to electricity.

Source: Mining Weekly

AUSTRALIA EXPORTS FIRST COPPER TO CHINA SINCE 2020, INDUSTRY HOPES END TO BAN NEAR

Australia exported roughly $40 million worth of copper ore and concentrate to China early this year, Australian customs data shows, a sign of industry hope that trade in the red metal will resume as diplomatic relations improve.
Australian trade data shows exports worth A$60.5 million ($41.04 million) of copper ore and concentrate to China in January, though the cargoes have not appeared in Chinese customs data. It was the first month of exports since December 2020, Australian data showed.
China is gradually easing a raft of unofficial restrictions and tariffs on Australian imports including coal, copper ore and concentrate and barley that were imposed in 2020 at the height of a diplomatic spat over trade, security and the origins of COVID-19.
Trade Minister Don Farrell said last week he would travel to Beijing "very soon" for trade talks with his counterpart after a virtual meeting in February. An unofficial ban on Australian coal imports was lifted in January.

Source: Reuters

RED METAL RISING: ARGENTINA SETS LOFTY SIGHTS ON GLOBAL COPPER TOP 10

Argentina, known better for its Malbec than its mining, has its sights set on becoming a top ten copper producer by 2030, with an investor friendly stance luring global players like Glencore and Lundin Mining to its mountainous north.
The South American country has a pipeline of copper projects that could produce 793,000 tonnes a year by the end of the decade, government forecasts show, well below neighboring No. 1 producer Chile but near big players like Australia and Zambia.
While a lofty goal - Argentina produces no copper currently after its last working mine closed in 2018 - it could position the country as an important new supplier as demand globally for the metal rises along a global electrification push.
Leading the way is Lundin Mining's Josemaria project in northern San Juan province, aiming to produce over 130,000 tonnes a year and that is a pre-construction phase.

Source: Reuters

PHILIPPINES HITS 6.4 PCT GDP GROWTH IN Q1 2023 DESPITE INFLATION PRESSURES

The Philippines’ gross domestic product (GDP) grew at a slower pace of 6.4% in the first quarter of 2023, but beat analysts’ estimates and fell within the government’s target range.
The latest figure reported by the Philippine Statistics Authority on Thursday, May 11, marks the eighth consecutive quarter of growth. Services contributed the most to the GDP figure with 5%, followed by industries with 1.2%, and agriculture, forestry, and fishing with 0.2%.
It is a drop from the 8% growth seen in the same period in 2022, but exceeds the 6.1% median estimate of analysts polled by BusinessWorld.
The economy had come off a strong year, with annual GDP for 2022 beating the government target at 7.6% and fourth quarter growth hitting 7.1%.
The higher-than-expected growth comes in an environment of high inflation and continued interest rate hikes. Though inflation slightly eased to 6.6% in April, it remains above the target range of 2% to 4%, still eating into the wallets of consumers.

Source: Rappler.com

ASEAN'S PATCHY ECONOMIC GROWTH SUGGESTS LONG ROAD TO RECOVERY - EDITORIAL

Southeast Asia's governments are set to introduce projects to collectively raise the bar on progress in the region, although the outcomes of these are uncertain as several regional economies are struggling with weak growth.
According to a draft statement seen by Nikkei Asia from the Chair of the 10-country Association of Southeast Asian Nations, which is rotated among the bloc's members and held by Indonesia this year, initiatives from rural development to digital payments will occupy the region's governments in the coming years.
"We reaffirmed our commitment to strengthen cooperation and accelerate ASEAN's key agenda in narrowing the development gap," the statement said.
The bloc's leaders have gathered in the Indonesian coastal town of Labuan Bajo this week for the two-day ASEAN Summit, amid a heavy security presence along the narrow streets near the event, with western tourists navigating road blocks on their way to island-hopping adventures.

Source: Nikkei Asia

 

 

 

BCM QUARTERLY REPORT, Q1 2023

The Business Council of Mongolia delivers you its First Edition of the BCM Quarterly Report of 2023. The first edition covers all events organised by the BCM through the months of January - March. The fuller version of the articles can be found in the highlighted "details" part on the report.

PDF:  2023 First Quarterly Report 

Source: BCM

THE BCM APPOINTS RAPHAËL GOUÉ AS OFFICIAL BCM REPRESENTATIVE IN EUROPE

The Business Council of Mongolia is pleased to announce Mr. Raphaël Goué as an official BCM Representative in Europe.

Raphaël Goué is an expert in energy and banking, having spent more than 12 years in Asia as well as being involved in Europe-Asia cross-border projects since the mid-90s, with a focus on financial services, energy and telecommunications.

Mr. Goué has a wealth of experience in supporting global financial institutions and energy companies in their strategies in Asia, as well their development and M&A. He has previously held various positions in organizations such as Société Générale, Vivendi Universal, Booz & Co and Capital One in Europe, Africa and Asia. As a senior advisor of the global retail banking association EFMA, Raphaël has been supporting the development of banking’s leading association in selected Asian markets, and supporting EFMA in the fintech sector in Europe.

He holds an engineering degree from the École Nationale Supérieure de Géologie in Nancy, France, a master in material science from École de Mines de Nancy, and a MBA from HEC (Paris) he finalized at the Columbia Business School (New York).

The BCM is looking forward to expanding its reach to Europe with Mr. Goué’s leadership and assistance.
 

UNICEF: GUIDANCE FOR EMPLOYERS ON FLEXIBLE WORK ARRANGEMENTS AND OTHER GOOD WORKPLACE PRACTICES IN THE CONTEXT OF COVID-19


A family friendly workplace or employer is one whose policies and practices make it possible for employees and/or workers to more easily achieving work-life balance, and to fulfil both their work and family obligations. These policies may include, but are not limited to, childcare, breastfeeding rooms, flexible work arrangements, paid leave, safe transport, parenting education and so on. 
In Mongolia and various other countries, authorities have enforced kindergarten- and school closure policies as part of the preparedness and response to contain the COVID-19 epidemic. In addition to the impacts on children’s education, there are concerns about children’s protection and well-being as children are left alone or without adequate care as many parents still need to go to work. COVID-19 may also have negative effects on mental health and wellbeing of patients (if any), caregivers, children and adolescents and the public, such as experiencing fear of the consequences of infection with a new virus, and triggering stigma. Those placed in quarantine (or self-isolated) may experience boredom, loneliness, and anger.
By promoting flexible working arrangements such as adjusted working hours, working from home and/or support childcare, your employees will be in better position to address any childcare challenges and not be distracted by concerns about their children’s safety and wellbeing at home.

Click here to view in English.

Click here to view in Mongolian.

UNICEF: CALL FOR ACTIONS OF THE PRIVATE SECTOR TO REDUCE CHILDREN’S EXPOSURE TO AIR POLLUTION IN UB
 
Too many children are at risk of dying in UB due to air pollution each year. In addition to longer-term measures to reduce overall levels of air pollution in Ulaanbaatar, UNICEF recommends that companies address some of their CSR activities in the following ways:
  1. Provision of air purifiers to kindergartens, schools and clinics. Children spend a considerable amount of their time in school. Air purification systems are demonstrated to be effective in reducing air pollution levels within a home or classroom. Recent innovations have made these more affordable, durable and effective. Every classroom should have an air purifier.
  2. Provision of electric heaters to kindergartens, schools and clinics. Electric heaters can help to reduce ambient air pollution. Reducing financial barriers to access can also help improve use of electric heaters.
  3. Improved construction and insulation in kindergartens, schools and clinics. This can help reduce the amount of air pollution that enters facilities where children spend most of their time. It also saves considerably on heating costs. Studies show some improvements can decrease air exchange by up to 40%.
  4. Provision of air pollution monitoring devices in kindergartens, schools and clinics. Monitoring devices are often a first, major step to understanding one’s own risk to air pollution. It can not only inform improved practices to reduce exposure, but it is also an effective mechanism for communities to better understand what is causing air pollution, and when it is particularly harmful.
  5. Improved awareness and behaviour-change campaigns. Low awareness amongst communities about the impacts of air pollution on child health and how to respond is a key barrier to addressing the air pollution crisis. There is a need to influence policymakers, relevant government institutions, businesses, CSOs, development partners, and the general public (including families and children) about the risks that air pollution poses to their health, as well as provide guidance and recommendations on various ways to address some of the most immediate threats.
These actions will reduce children’s exposure to air pollution, safeguarding them from the worst impacts at the same time as building momentum and creating an enabling environment for longer plans that reduce air pollution. UNICEF will provide guidance on these recommendations where possible. UNICEF can also help facilitate connections between actors, agencies and institutions, including schools/ clinics where children are particularly affected. However, in order to maximize efficiency, these projects should be planned, developed, implemented and monitored by the private sector company involved. Nor will any funding go through UNICEF. This helps enhance accountability, and allows private sector donors to be more actively involved in the solution of directly supporting children in UB to breathe cleaner, healthier air.
For more information and guidance, please contact UNICEF for (Amy Wickham, This email address is being protected from spambots. You need JavaScript enabled to view it.; and Sunjidmaa Jamba, This email address is being protected from spambots. You need JavaScript enabled to view it.)
 
BCM GUIDELINE FOR COMPANIES TO COMBAT AIR POLLUTION

Purpose: This Guideline document is to help CEOs and business leaders quickly identify possible actions they can implement in their organizations against air pollution.

Resources for information on Air Pollution

Specific ACTIONS that companies can take NOW:

Educate employees about air pollution; invite guest speakers; encourage employees to share information with friends and family; discuss possible solutions with employees

  • Possible topics: damages and causes of air pollution, protection measures, energy consumption & efficiency; indoor air quality (smoking indoors); breastfeeding & healthy diet; vehicle idling; vehicle maintenance;

Work environment:

  • Improve energy efficiency in building/office to reduce energy consumption;
  • Plant & maintain trees; install air cleansing plants in the office;
  • Install HEPA air filter and air purifiers to tackle indoor air pollution (For an affordable solution, visit http://smartairfilters.com/mn/en/;
  • Install monitoring devices;
  • Smart Air Mongolia masks

Work activities:

  • Ensure company vehicles are well maintained to reduce pollution emissions;
  • Drivers/employees instructed to not idle & to turn off vehicle engine when not moving;
  • Implement carpooling activities;
  • In polluted air, ensure employees wear pollution masks;

Social responsibility:

  • Focus CSR (corporate social responsibility) initiatives to tackle air pollution
  • Tackle air pollution in UB: UNICEF recommends focusing on areas where children are especially affected, and where urgent interventions need to be put in place to protect them as soon as possible. These include the provision of air filtration systems and electric heaters in kindergartens and schools in some of the worst-affected regions. For more information and guidance, please contact UNICEF for (Nicholas Rees, This email address is being protected from spambots. You need JavaScript enabled to view it.; and Sunjidmaa, This email address is being protected from spambots. You need JavaScript enabled to view it.);
  • Run marketing/PR campaigns & contests that raise awareness about air pollution.

List of distributors for pollution masks:

  • BRB – 70119967, 99658555
  • BOX shop – 99062387, 75557007, 90878111 – Facebook: RZ утааны маск
  • CATD LLC – 11327308, 99114346
  • Mmarket – 75758001 – Facebook: Утааны Маск
  • MONOS Pharmacy – 99190858
  • Seven summits – 11317923
  • 3M Mongolia Premier Service - 9400-3088, 9910-3335
  • Utaanii Mask – 99906643 – Facebook: Утааны маск + Агаар шүүгч
  • Cycling World Mongolia LLC authorized distributor of RESPRO pollution masks- 77110444
​MEMBER-TO-MEMBER SPECIAL OFFERS & BENEFITS:
 
- Orchuulga 24 is providing a 15% discount on written translation services to BCM Members
- Ombol LLC is offering free Hepatitis C medication to employees of BCM member organizations, provided that the individual pays into state health insurance.
 

ECONOMIC INDICATORS

HISTORIC ANNUAL INFLATION

Year 2009   *4.2% [source: NSOM]
Year 2010 *13.0% [source: NSOM]
Year 2011 *10.2% [source: NSOM]
Year 2012 *14.0% [source: NSOM]
Year 2013 *12.5% [source: NSOM]
Year 2014 *11.0% [source: NSOM]
Year 2015   *1.9% [source: NSOM]
Year 2016   *1.1% [source: NSOM]
Year 2017   *6.4% [source: NSOM]
Year 2018   *8.1% [source: NSOM]
Year 2019   *5.2% [source: NSOM]
Year 2020   *2.3% [source: NSOM]
Year 2019   *13.4% [source: NSOM]
*Year-over-year (y-o-y), nationwide

CENTRAL BANK POLICY LOAN RATE

December 31, 2008 - 9.75% [source: IMF]
March 11, 2009 - 14.00% [source: IMF]
May 12, 2009 - 12.75% [source: IMF]
June 12, 2009 - 11.50% [source: IMF]
September 30, 2009 - 10.00% [source: IMF]
May 12, 2010 - 11.00% [source: IMF]
April 28, 2011 - 11.50% [source: IMF]
August 25, 2011 - 11.75% [source: IMF]
October 25, 2011 - 12.25% [source: IMF]
March 19, 2012 - 12.75% [source: Mongol Bank]
April 18, 2012 - 13.25% [source: Mongol Bank]
January 25, 2013 - 12.50% [source: Mongol Bank]
April 8, 2013 - 11.50% [source: Mongol Bank]
June 25, 2013 - 10.50% [source: Mongol Bank]
July 30, 2014 - 12.00% [source: Mongol Bank]
January 14, 2015 - 13.00% [source: Mongol Bank]
January 14, 2016 - 12.00% [source: Mongol Bank]
May 6, 2016 - 10.50% [source: Mongol Bank]
August 18, 2016 - 15.00% [source: Mongol Bank]
December 19, 2016 - 14.00% [source: Mongol Bank]
June 15, 2017 - 12.00% [source: Mongol Bank]
December 22, 2017 - 11.00% [source: Mongol Bank]
March 23, 2018 - 10.00% [source: Mongol Bank]
November 27, 2018 - 11.00% [source: Mongol Bank]
March 11, 2019 - 10.00% [source: Mongol Bank]
April 13, 2020 - 9.00% [source: Mongol Bank]
September 14, 2020 - 8.00% [source: Mongol Bank]
November 11, 2020 - 6.00% [source: Mongol Bank]
January 1, 2022 - 6.50% [source: Mongol Bank]

SOVEREIGN CREDIT RATING

Moody’s Fitch S&P
B3     – stable – 16 Mar 2021
B3     – negative – 8 May 2020
B3     – stable – 18 Jan 2018
Caa1 – stable – 30 Mar 2017
Caa1 – neg. watch – 15 Feb 2017
Caa1 – stable – 18 Nov 2016		 B   – stable – 9 Jul 2018
B-  – positive – 17 Nov 2017
B-  – stable – 22 Nov 2016
B   – stable – 24 Nov 2015
B+ – negative – 13 Dec 2013		 B   – stable – 10 Nov 2018
B-  – stable – 19 Aug 2016
B   – stable – 03 Nov 2015
B+ –   neg.  – 29 Apr 2015


CURRENCY RATES –  11 May 2023

Currency     Rate
U.S. dollar USD   3,464.85
Euro EUR   3,787.25
Japanese yen JPY   25.75
British pound GBP   4,353.93
Hong Kong Dollar HKD      442.29
Russian ruble RUB        46.04
Chinese yuan CNY      499.38
South Korean won KRW          2.61
Copyright © 2023 *Business Council of Mongolia*, All rights reserved.

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BCM NewsWire 781 – 05 May 2023

NEWSWIRE
 


NewsWire

Issue 781 –  5 May 2023
Introducing BCM's AI-generated video of top news stories of the week.

BCM NewsWire provides short summaries of news collected from around the world. Each article is kept to a maximum of 150 words for brevity, but click on the link next to “Source” to read the full article.

Economy

  • Forex reserves rise to 3.7 bln USD

  • Foreign trade up 50.4 pct in 4 months

  • B.Javkhlan: The "Gerege" bond has been fully paid off

  • EIL's PMC Project in Mongolia organised Ground breaking ceremony for EPC packages 02 & 03

  • Macro Assessment presented

  • Designing a Grid-Connected Battery Energy Storage System: Case Study of Mongolia - Paper

  • If they don’t get paid more, artists are ready to take their strikes to next level - Editorial

Politics

  • Minister of Foreign Affairs visits China

  • Speaker of Hungarian Parliament László Kövér to Visit Mongolia

  • Amendments To The Law On Permits

  • Macron's Visit and Mongolia's Nuclear Potential

  • Suggestions given to amend Investment Law

  • Tender bill discussed

  • Time to prioritize social justice - Editorial

  • Charting a New Path: Understanding the Effects of Generational Shift on Politics and Economics - Editorial

  • PM’S visit: new future in minerals cooperation - Editorial

  • Polish President’s Visit to Mongolia Highlights Ulaanbaatar’s Ukraine Approach - Editorial

Business

  • Dornogovi province offers businesses tax incentives

  • MSE market evaluation reaches historical high

  • Oyu Tolgoi releases Q1 2023 performance results

  • LB Bulgaricum grants dairy production licence to Mongolia's APU

  • Mongolian Stock Exchange and Budapest Stock Exchange Sign Memorandum of Understanding

  • Insurance market participants discussed digital transition

  • Erdene Closes Second Stage of Strategic Alliance with Mongolian Mining Corporation and Reports Q1 2023 Results

  • Denode selects GTN to offer global investment opportunities to Mongolian investors

  • Marc Meleard: Mining of uranium deposits will greatly contribute to Mongolian energy independence - Interview

  • Copper mine flashes warning of 'huge crisis' for world supply - Editorial

  • Golomt Bank: The Open Bank vision driving a brighter future for Mongolia - Interview

Global and Regional Trends

  • US interest rates raised to highest level in 16 years

  • China and India to drive half of 2023's global economic growth: IMF

  • Euro-Zone Core Inflation Slows, Supporting Smaller ECB Hike

  • Bank of Japan sticks to negative rates while announcing policy review

  • Q&A: Addressing Intertwined Challenges in Central Asia and the Caucasus through Regional Cooperation

  • Taiwan slips into recession as Q1 GDP hits 14-year low

  • Brent falls below USD 75 per barrel ahead of Fed's expected interest rate hikes

  • Investment in developing nations may hit 20-year low: World Bank official

  • Mexico’s ‘shock’ new mining law hurts juniors most

BCM Updates

  • BCM Quarterly Report, Q1 2023

  • The BCM appoints Raphaël Goué as official BCM representative in Europe

  • UNICEF: Guidance for employers on flexible work arrangements and other good workplace practices in the context of Covid-19

  • UNICEF: Call for actions of the private sector to reduce children’s exposure to air pollution in UB

  • BCM Guideline for Companies to Combat Air Pollution

  • Member-to-member special offers & benefits

Economic Indicators

  • Inflation

  • Central Bank Policy Rate

  • Sovereign Credit Rating

  • Currency Rates
 
Sponsors:
 

 
 



 
 

ECONOMY

FOREX RESERVES RISE TO 3.7 BLN USD

Mongolia's foreign exchange (forex) reserves rose to 3.7 billion U.S. dollars at the end of April, Minister of Economy and Development Chimed Khurelbaatar said Wednesday.
"The Mongolian government repaid around 369 million U.S. dollars of Gerege Bond debt on April 28. After that, our country's forex reserves stood at 3.7 billion U.S. dollars," Khurelbaatar told media after a regular meeting of the government.
"We believe that the currency market has stabilized," he said.
The Asian country's forex reserves stood at 3.4 billion dollars at the end of 2022, according to the central bank.

Source: Xinhua

FOREIGN TRADE UP 50.4 PCT IN 4 MONTHS

Mongolia's total imports and exports expanded 50.4 percent year on year to 7.7 billion U.S. dollars in the first four months of 2023, the Mongolian Customs General Administration said on Wednesday.
The Asian country registered a surplus in foreign trade balance as exports exceeded imports by around 2.4 billion dollars, mainly due to a significant increase in the exports of mining products, the administration said.
Mining products accounted for 88.7 percent of the mineral-rich country's total exports in the four-month period.
During the same period, the landlocked country traded with 125 economies.

Source: Xinhua

B.JAVKHLAN: THE "GEREGE" BOND HAS BEEN FULLY PAID OFF

Minister of Finance B.Javkhlan announced today that the outstanding balance of the "Gerege" bond has been fully paid off, totaling USD 368 million.
He stated "- The total amount of this bond is USD 800 million. The Government has entered into multilateral loan agreements since 1990. Seven Government bonds have been issued so far. The first bond, called "Chinggis" was issued in 2012 to finance largest projects. Since then, one bond was issued in 2015 and two bonds in 2016, which were spent for offsetting the budget deficit. While, we have issued "Khuraldai", "Gerege", and "Nomad" bonds since 2017 for refinancing the previous bonds due to the repayment difficulties.
“The Government has received a total of USD 2.9 billion of debt from the six bond packages. These bond payments have been made through two methods. The Government has made a direct payment when the amount is affordable for the state budget, otherwise, we have refinanced, extending the repayment period and reducing the bond interest rate,” said Minister Javkhlan. 

Source: Montsame

EIL'S PMC PROJECT IN MONGOLIA ORGANISED GROUND BREAKING CEREMONY FOR EPC PACKAGES 02 & 03

The Mongol Refinery project being executed by Engineers India Limited (EIL) as PMC achieved a critical milestone when the ground breaking ceremony of EPC packages viz. EPC-02 & EPC-03 got underway on 28th April 2023 at Sainshand, Mongolia.
His Excellency Mr. M P Singh, Ambassador of India to Mongolia, Hon’ble Mr. Delgersaihan, Member of Parliament, Mongolia, Hon’ble Mr. Enkhtuvshin, Member of Parliament, Mongolia, Hon’ble Batjargal, Governor of the Dornogovi Province, Hon’ble Ganzorig, Chairman of the Dornogovi Council and Western Development, Dr. Altantsetseg Dashdavaa, Executive Director - Mongol Refinery and other senior officials of all stakeholders graced the occasion.
Commencement of Construction activities of EPC 02 & 03 packages is an important milestone towards completion of the 1.5 MMTPA Mongol Refinery funded by the Government of India under Line of Credit (LOC).
EIL is committed to successfully executing this prestigious G2G collaboration project of national importance that will give fillip to the energy security of Mongolia.

Source: PSUConnect.in, Montsame
See also: Oil refinery development progresses
Mongolia to train 300 engineers for oil refinery

MACRO ASSESSMENT PRESENTED

Every year, by May 1, the general macro assessment of the annual budget is presented to the government. The Minister of Finance gave information in regards to it, recently.
Minister B.Javkhlan said, “Mongolia’s economy is expected to stabilize and grow. However, there may be a risk looking at the international situation, if we do not keep our economic growth.
Next year, real GDP growth will be 6.5 percent. Inflation, or the increase in the prices of consumer goods, will be kept at eight percent.”
The minister then continued, “The balanced income of the consolidated budget is around 21 trillion MNT. The maximum amount of expenditure is about 23 trillion MNT. Budget expenditures are estimated to increase by 10 percent from 2023. The government has presented a budget estimate of loss of the total balance worth 1.833 trillion MNT. This vision will be submitted to the Parliament on Monday.”

Source: The UB Post

DESIGNING A GRID-CONNECTED BATTERY ENERGY STORAGE SYSTEM: CASE STUDY OF MONGOLIA - PAPER

This paper highlights lessons from Mongolia on how to design a grid-connected battery energy storage system (BESS) to help accommodate variable renewable energy outputs.
The paper suggests how developing countries can address technical design challenges, such as determining storage-capacity size, and regulatory issues to do with ownership, safety, sustainability, and commercial viability. It aims to help governments accelerate BESS solutions and expedite progress toward carbon-neutral societies.

Source: ADB

IF THEY DON’T GET PAID MORE, ARTISTS ARE READY TO TAKE THEIR STRIKES TO NEXT LEVEL - EDITORIAL

Workers in the cultural sector, including professional art organizations, have started making demands to the government to increase their salaries. They expressed their voices through their Trade Union committees. In the past, local workers from Darkhan-Uul Province demonstrated. However, a new event is expected to include larger scale. Director of Trade Union of National Academic Drama Theatre G.Amgalanbaatar said, “The Minister representing our sector in the government could not increase our salaries. Hence, the Minister should take responsibility for it and give up their job. The theatre and ensemble have almost no workforce. They began going to South Korea to work. There is no possibility to live off our salaries. We are ready to take this fight to the next level unless the Minister of Culture respond positively to our demands.” When trying to clarify about the form of the next fight they talked about going on a strike. The theatre and ensemble workers said that if the strike doesn’t work, they will interrupt the state concerts and the opening of the festival this summer.

Source: The UB Post

POLITICS

MINISTER OF FOREIGN AFFAIRS VISITS CHINA

As result of the Foreign Affairs Minister’s visit, following arrangements are discussed and approved:
• Within the framework of the goal of intensifying trade and economic cooperation between Mongolia and China and increasing the trade turnover to 20 billion USD in the coming years, work to be conducted on the long-term and stable supply of our country’s mining products to the Chinese market and to increase the export of agricultural products;
• To improve the infrastructure of the border ports of the two countries and to intensify the work of connecting them by rail, renew the 1955 Mongolia-China border railway agreement, and to intensify the construction work of the Gashuunsukhait-Gantzmod border port railway;
• To advance the issue of adding the Hangi-Mandal railway port to the agreement between the Government of Mongolia andthe Government of China on the border ports of the countries;
• …

Source: The UB Post, China.org.cn
See also: China pledges closer ties with Mongolia on trade, train links, tackling sandstorms
China-Mongolia Cooperation: Trade volume reached $12.2 billion in 2022
Foreign Minister B. Battsetseg Visits iFLYTEK

SPEAKER OF HUNGARIAN PARLIAMENT LÁSZLÓ KÖVÉR TO VISIT MONGOLIA

A delegation led by Speaker of the National Assembly of Hungary László Kövér will pay an official visit to Mongolia on May 4-7, at the invitation of Chairman of the State Great Khural of Mongolia Gombojaviin Zandanshatar.
During the visit, Speaker of the Parliament of Mongolia G. Zandanshatar and Speaker of the National Assembly of Hungary László Kövér will hold official talks and exchange views on bilateral relations, inter-parliamentary cooperation, and other issues of mutual interest. Prime Minister of Mongolia L. Oyun-Erdene will pay a courtesy call on Speaker László Kövér.
Mongolia established diplomatic relations with Hungary on April 28, 1950. This visit is the second visit of the Head of the National Assembly of Hungary to Mongolia, and will be of considerable significance for the expansion of relations between the two countries and the development of inter-parliamentary cooperation.

Source: Montsame

AMENDMENTS TO THE LAW ON PERMITS

On June 17th, 2022, the Great Khural of Mongolia officially approved the "Law on permits" ("the PL") and it has been enacted and became effective as of January 1st, 2023.
The following is a summary of amendments to the Law of Mongolia on Permits (2022) dated January 6, 2023, including newly added, amended, and deleted clauses.
New Provisions
1) Changes have been made to the list of permit
The list of special permits in Article 8.1 of the Law on Permits has been changed as follows:
Special permits added to the list of licenses and issuing authorities
2) Grounds for the revocation of permits have been added
If the state stamp duty has not been paid within the period specified in Article 42.6 of the Law of Mongolia on State Stamp Duties, the permit shall be revoked.

Source: Mondaq.com

MACRON'S VISIT AND MONGOLIA'S NUCLEAR POTENTIAL

Mongolia is exploring the possibility of building a nuclear power plant with France, as it seeks to reduce its reliance on fossil fuels and Russian energy imports.
B. Choijilsuren, the energy minister, said on Friday that a potential visit by Emmanuel Macron, the French president, later this month could pave the way for cooperation on uranium mining and nuclear energy.
Mongolia has the world’s 12th-largest uranium reserves, with 200,000 tonnes of proven deposits. The country has been working with Orano Group, the French state-owned nuclear company, since 1999 through a joint venture called Badrakh Energy, formerly known as Areva Mines. The venture’s main project, the Zuuvch Ovoo uranium mine, is expected to start production soon.
According to official data, Mongolia relies on fossil fuels for 96% of its 6Mtoe energy supply. It also imports 13% of its electricity and all of its oil from Russia, making it vulnerable to price fluctuations and political pressure from Moscow.

Source: Inside Mongolia

SUGGESTIONS GIVEN TO AMEND INVESTMENT LAW

The Ministry of Economy and Development organized a discussion on amendments to the Investment Law. The discussion was attended by representatives of international organizations, foreign embassies in Mongolia, and representatives of investors.
An order to draft the revision of the Investment Law was given by the Minister of Economy and Development, and Deputy Prime Minister on April 5.
Head of the Investment Policy Department of the Ministry of Economy and Development B.Anar said, “The draft law on investment includes how to register foreign investment, how to attract investment and what kind of support and tax exemptions will be provided. It has characteristic that foreign investors clarify the mechanism of how to solve the problems in their activities. Also, issues related to land relations are still very unclear. If foreign investors want to come and set up a factory and use the land, there is a regulation on land use for a very short period of time in the Land Law…”

Source: The UB Post

TENDER BILL DISCUSSED

Parliament reviewed a draft revision of the Law on Procurement of Goods, Works and Services with State and Local Funds (known as the Tender Law) during its plenary session on April 27.
Under the bill, projects and actions on the list of development projects to be implemented as part of the New Revival Policy will be processed with the establishment of contracts. The law will not be followed if less than 30 percent of the funding for a project or an action is provided from a state owned or state controlled enterprise. 
It has become possible to make procurement arrangements online and retrieve necessary information from state databases. Therefore, the proposed amendments include the reduction of the timeframe for the client to make a decision and establish a contract from 30 days to 15 days.
As there are times when the budgeted cost rises beyond the control of the client or the contractor for some long-term projects and actions…

Source: The UB Post

TIME TO PRIORITIZE SOCIAL JUSTICE - EDITORIAL

May 1st is widely known as Labour Day, a day when we celebrate the contribution of workers worldwide. It is a moment for pride, celebration and hope.
After three years of the COVID-19 crisis, followed by inflation, conflict, and food and fuel supply shocks, we badly need this.  But the promises of renewal made during the pandemic, of ‘building back better’, have so far not been delivered for the great majority of workers worldwide. 
Globally, real wages have fallen, poverty is rising, inequality seems more entrenched than ever.
Enterprises have been hard hit.  Many could not cope with the cumulative effects of recent unexpected events.  Small and micro-enterprises were particularly affected, and many have ceased operations.
People feel that the sacrifices they made to get through COVID-19 have not been recognized, let alone rewarded. Their voices are not being heard clearly enough. This, combined with a perceived lack of opportunities, has created a disturbing level of mistrust.

Source: The UB Post

CHARTING A NEW PATH: UNDERSTANDING THE EFFECTS OF GENERATIONAL SHIFT ON POLITICS AND ECONOMICS - EDITORIAL

Born in the 1970s and 80s first Mongolians have experienced the country’s transition from communism to democracy in 1990 at a relatively young age. This is a generation that grew up during shaky economic times and a shifting cultural landscape. Despite lacking modern technological conveniences in their early years, they have since witnessed the rapid evolution of mobile phones, among other advancements.
Today, younger generations of Mongolians are slowly but surely taking charge of the politics and economy in Mongolia. It is exciting to explore the trends and implications of this generational shift and to see how this generation will shape the future of our country.
The Reign of the “50s-60s Generation”: 1990s to 2020
The economy underwent significant changes during the 1990s as Mongolia transitioned from a centrally planned system to a market-oriented one. This shift led to the privatization of many state-owned factories.

Source: Mongolia Focus

PM’S VISIT: NEW FUTURE IN MINERALS COOPERATION - EDITORIAL

Prime Minister L.Oyun-Erdene, during his official visit to Germany on October 12-15, 2022, discussed several topics, including the joint processing of minerals and rare earth elements. In the first half of 2023, Germany is scheduled to make a return visit in this direction. At such a time, it is important to understand what Mongolia has proposed and hopes to cooperate with.
"Mineral Partnership" between Germany and Mongolia
In 2010, Germany developed a strategic policy for minerals and raw materials to ensure the reliability of the supply. Under this strategy, Mongolia was one of the countries that decided to establish a partnership agreement with a few countries with natural resources. In October 2011, German Chancellor Angela Merkel paid her first visit to Mongolia and signed an agreement on "cooperation in the field of minerals, industry, and technology". This agreement was signed by the Government of Germany for the first time with the Government of Mongolia.

Source: Mining Insight

POLISH PRESIDENT’S VISIT TO MONGOLIA HIGHLIGHTS ULAANBAATAR’S UKRAINE APPROACH - EDITORIAL

Polish President Andrzej Duda paid a state visit to Mongolia from April 24 to 26. The visit has been in the works for some time; during his visit to Mongolia in 2022, Zbigniew Rau, the rotating chairman of the Organization for Security and Cooperation in Europe and Polish foreign minister, stated that the Polish president’s visit has been planned for a long time.
Marcin Przydach, head of the International Policy Department of the Polish Presidential Office, emphasized that although Mongolia and Poland are geographically distant, both countries have important geographical and geopolitical positions.
During his visit, the Polish president praised Mongolia’s democracy and highlighted the role Mongolia could play in resolving the ongoing conflict in Ukraine. “Poland has for years observed and appreciated Mongolia’s efforts not only to build democracy in the internal arena but to ensure peace and security in the world,” Duda said.

Source: The Diplomat

BUSINESS

DORNOGOVI PROVINCE OFFERS BUSINESSES TAX INCENTIVES

As part of the New Recover Policy, the Mongolian government is implementing the policy of Rural Recovery to improve living conditions in rural areas. In this regard, when organizing the Open Dornogovi event, Dornogovi province has announced measures and programs to attract residents from the Capital city, offering businesses tax incentives.  
The People's Representatives Khural of Dornogovi Province has set the minimum amount of real estate tax, vehicle tax, and land fee. That is 20-27 percent less than the rate set by Ulaanbaatar City and other provinces.
The heating and electric power production project shall receive a tax credit of 90% for the first three years and 50% for the following three years, starting from the subsequent reporting period of gaining profit. Also, the local authorities decided to provide tax relief to companies that moved their factories and warehouses from the capital to Dornogovi province. 

Source: Government of Mongolia

MSE MARKET EVALUATION REACHES HISTORICAL HIGH

When the secondary market trading of Khan Bank shares started last Monday, the exchange rate rose by 15 percent and equaled to 1,102 MNT per unit. As a result, the market value was 2.1 trillion MNT, which was higher than that of other companies. Previously, on January 5, 2022, APU became the first company whose market value reached two trillion MNT. Currently, APU, Golomt Bank, Tavan Tolgoi, and State Bank are the first five in the list of highest valued company along with Khan Bank. The value of top five companies reached 8.7 trillion MNT on May 1, reaching a historical high.
The market value of MSE exceeded seven trillion MNT for the first time at the beginning of last March and the trading volume of MSE last month increased to 219.2 billion MNT. The issuance of Khan Bank’s IPO of 183.3 billion MNT has affected it. Some experts mentioned that about 19 trillion MNT were traded in company bonds and asset-backed securities.

Source: The UB Post
See also: "Mongolian Stock Exchange" JSC organized its first shareholders ordinary meeting

OYU TOLGOI RELEASES Q1 2023 PERFORMANCE RESULTS

  • Safely commenced the production of the underground mine, which contains the majority of the Oyu Tolgoi’s values
  • Maintained one of the highest water use efficiency per tonne of ore produced compared to similar global operations
  • Paid MNT312 billion in taxes, fees and other payments in Q1 2023

Oyu Tolgoi released its latest performance scorecard, highlighting key performance metrics for the first quarter of 2023 and providing an update on the underground mine production.
Following the safe blasting of 21 drawbells in its block cave mine, Oyu Tolgoi announced the commencement of underground production. The management team is committed to safely ramping up the underground mine to achieve a tripling in production to 500,000 tonnes of copper per year. This will be achieved through the construction of approximately hundreds of drawbells in operation by 2028-2036. The Oyu Tolgoi mine is a result of a successful partnership and collaborative efforts between the Government of Mongolia and Rio Tinto.

Source: Oyu Tolgoi
See also: Inside Rio Tinto's prized $7 billion underground copper mine in Mongolia

LB BULGARICUM GRANTS DAIRY PRODUCTION LICENCE TO MONGOLIA'S APU

Bulgaria’s economy ministry said on Wednesday that state-owned dairy company LB Bulgaricum granted a licence to Mongolia's APU Company to develop, produce and distribute on the Asian country's market yoghurt and dairy products based on LB's technology.
The licence has been granted for a period of five years, requiring food and beverage producer APU Company to pay licence fees to LB Bulgaricum, the ministry said in a press release, without providing financial details of the deal.
APU Company, which counts brewer Heineken among its main shareholders, was founded in 1924 and holds a 31% share of the Mongolian dairy market. It has over 320 products in its portfolio and opened an own dairy factory in 2014.
The Mongolian company said it will use Bulgaria's traditional technology for the production of yoghurt and dairy products for the domestic market. 

Source: SeeNews.com

MONGOLIAN STOCK EXCHANGE AND BUDAPEST STOCK EXCHANGE SIGN MEMORANDUM OF UNDERSTANDING

Mongolian Stock Exchange and Budapest Stock Exchange have signed a virtual Memorandum of Understanding (MoU) via online meeting today (2023.05.03).
The virtual signing ceremony was attended by ALTAI Khangai, the CEO of the Mongolian Stock Exchange (MSE), KHASH-ERDENE Tamiraa, the Chief Business Development Officer of MSE, Javkhlan Ivanov, the Chief Operating Officer of MSE, RICHÁRD Végh, the CEO of the Budapest Stock Exchange,  ISTVÁN Máté-Tóth, the Deputy CEO of BSE, and LUYI Pintér, International Analyst of the Central Bank of Hungary, and led by executives of two stock exchanges who signed the MoU.
The objectives of the Memorandum of Understanding include exchanging market information between the parties, developing equity, debt, and investment fund products, improving corporate governance, organizing joint research projects and seminars, and developing platforms and joint products.

Source: MSE

INSURANCE MARKET PARTICIPANTS DISCUSSED DIGITAL TRANSITION

In recent years, while every country is rapidly moving towards digitalization, Mongolia is also taking relevant measures regularly to introduce advanced technology in financial sector. However, there are still necessities to introduce artificial intelligence and big data in the financial sector of Mongolia. Within this framework, an Insurtech workshop was organized for insurance market participants in cooperation with the Asian Development Bank (ADB) on 27 April 2023.
In his opening speech, Mr D. Bayarsaikhan (Chairman, Financial Regulatory Commission) stated that "The creation of a favourable and flexible regulation aligned with fast-evolving technology changes has become one of the main policy priorities of regulatory authorities worldwide. In this context, the FRC is working to enhance the legal and regulatory environment in a more risk-based and technological manner”. At the end of his speech, he commended the significance of the today’s workshop for accomplishing our future goals of the successful introduction of insurtech.

Source: FRC

ERDENE CLOSES SECOND STAGE OF STRATEGIC ALLIANCE WITH MONGOLIAN MINING CORPORATION AND REPORTS Q1 2023 RESULTS

Erdene Resource Development Corp. is pleased to announce the close of the second stage of the Strategic Alliance with Mongolian Mining Corporation, to provide an update on the Bayan Khundii (“BK”) Gold Project development and exploration in the Khundii Minerals District (“KMD”), and to report operating and financial results for the quarter ended March 31, 2023. This release should be read in conjunction with the Company’s Q1 2023 Condensed Consolidated Interim Financial Statements and MD&A, available on the Company’s website and SEDAR.
Quotes from the Company:
“The first quarter of 2023 was another productive period for Erdene as we made significant progress advancing our Bayan Khundii (“BK”) Gold Project towards construction,” said Peter Akerley, Erdene’s President and CEO. “With the recent close of the second stage of our MMC Strategic Alliance, we are launching early construction works and expect to make a full construction decision in mid-2023.”

Source: Erdene Resource Development Corp.

DENODE SELECTS GTN TO OFFER GLOBAL INVESTMENT OPPORTUNITIES TO MONGOLIAN INVESTORS

GTN, a successful fintech pioneer with decades of success making investment and trading accessible for all, joined forces with Mongolian fintech Denode. The partnership will provide retail investors in Mongolia with a comprehensive range of tokenised assets from various regions, enabling global market access.
Denode is a blockchain-based digital trading platform operating within a regulated financial environment, providing clients with access to various tokenised asset classes. The collaboration with GTN will enable Denode to enhance its services and cater to the dynamic needs of investors locally and globally.
Ankit Shah, GTN Global Head of Fintech, said there is a fundamental shift in the mindsets and expectations of Mongolian retail investors. "Their expectations continue to evolve quickly in line with those in other frontier markets; they seek to diversify their investments into different markets and asset classes," he said.

Source: PRNewsWire.com

MARC MELEARD: MINING OF URANIUM DEPOSITS WILL GREATLY CONTRIBUTE TO MONGOLIAN ENERGY INDEPENDENCE - INTERVIEW

By D.Oyunchimeg Interviewed Marc Meleard, executive director of “Badrakh Energy” company about Zuuvch-Ovoo project, the most advanced uranium project in Mongolia.
- Badrakh Energy company completed a uranium production pilot test in Ulaanbadrakh soum of Dornogobi aimag. There are always various allegation and rumors about your company around people and animals being poisoned since uranium is radioactive substance. Can you provide clear information about this project?  
 -  First of all, it is best to explain what uranium is as a radioactive mineral. Our company will mine natural uranium.
There is nothing comparable between natural radioactivity generated from natural uranium and radioactivity coming from nuclear fuel to generate energy. Therefore, I see this as a deliberate or unintentional spreading of confusing information, using differences of radioactivity from natural uranium and from enriched uranium. Actually, it is possible to stop radioactivity from natural uranium with a single sheet of paper.

Source: Mongolian Mining Journal

COPPER MINE FLASHES WARNING OF 'HUGE CRISIS' FOR WORLD SUPPLY - EDITORIAL

Accompanied by tinny taped music and overall-clad workers, Rio Tinto Group executives and Mongolian officials gathered a kilometer beneath the freezing Gobi Desert earlier this year to open one of the world’s richest underground copper mines.
As demand for copper surges, supply is increasingly likely to come from mines like this one on the arid steppe: expensive, technically complex, outside traditional copper jurisdictions and operating under the eye of governments jealously guarding their natural resources.
“There’s a huge crisis,” says Doug Kirwin, one of the earliest geologists to work at the deposit that became Oyu Tolgoi, or Turquoise Hill, named after the area’s rocks, stained by oxidized copper.
“There’s no way we can supply the amount of copper in the next 10 years to drive the energy transition and carbon zero. It’s not going to happen,” adds Kirwin, now an independent consulting geologist. “There’s just not enough copper deposits being found or developed.”

Source: Mining Weekly

GOLOMT BANK: THE OPEN BANK VISION DRIVING A BRIGHTER FUTURE FOR MONGOLIA - INTERVIEW

Golomt Bank – one of the nation’s top three banks – is on a mission to spearhead Mongolia’s digital transformation through a unique “Open Bank” strategy that is creating a digital ecosystem with local innovators for Mongolia’s social empowerment and sustainable growth.
Pioneering A.I.-enabled solutions and consistently strong financial results – even during the pandemic – enabled Golomt Bank to make Mongolian Stock Exchange history in November, 2022 with the bourse’s biggest ever initial public offering, attracting MNT 118.8 billion.
CEO Norihiko Kato and CIO Sainbileg Mandakh speak about the digitally-driven future of an institution at the forefront of Mongolian sustainable development.
- Please tell us about the vision behind Golomt Bank’s Open Bank strategy?
- SM: The Open Bank model is about digital empowerment for all Mongolians. We believe in a sharing economy, working with fin-tech and non-financial sector partners, to reimagine a better future for Mongolia. The vision is not only for banking and financial literacy solutions…

Source: GoGo News

GLOBAL AND REGIONAL NEWS

US INTEREST RATES RAISED TO HIGHEST LEVEL IN 16 YEARS

The US central bank has raised interest rates to the highest level in 16 years as it battles to stabilise prices.
The Federal Reserve increased its key interest rate by 0.25 percentage points - its 10th hike in 14 months.
That pushed its benchmark rate to between 5% and 5.25%, up from near zero in March 2022, although the Fed hinted the rise may be its last one for now.
The European Central Bank has also raised rates again, although by a smaller amount than in previous months.
The ECB lifted its three key interest rates by 0.25 percentage points, whereas the three preceding meetings have all seen a larger rise.
In the US, higher rates have sharply raised borrowing costs, spurring a slowdown in sectors such as housing and playing a role in the recent failures of three US banks.

Source: BBC, Reuters
See also: Fed recap: Here are Chair Powell’s market-moving comments after the latest rate hike

CHINA AND INDIA TO DRIVE HALF OF 2023'S GLOBAL ECONOMIC GROWTH: IMF

China and India will account for more than half of this year's global growth, the International Monetary Fund predicts, underscoring the Asia-Pacific region's strength amid rising uncertainty over the U.S. economy.
The IMF forecast in April that Asia-Pacific real gross domestic product will increase 4.6% in 2023, an upgrade of 0.3 percentage point from last October's projection. It sees the global economy expanding 2.8%.
China will contribute 34.9% of the global growth, and India 15.4%, according to the IMF. These add up to 50.3%.
The Asia-Pacific region as a whole is projected to drive about 70% of global international economic growth, increasing its presence as Western growth slows. This is "a much larger share than we've seen in the past few years," said Krishna Srinivasan, director of the IMF's Asia and Pacific Department, in a news conference here Tuesday.

Source: Nikkei Asia, CNBC

EURO-ZONE CORE INFLATION SLOWS, SUPPORTING SMALLER ECB HIKE

Underlying inflation in the euro area eased for the first time in 10 months, backing the case for the European Central Bank to slow the most aggressive interest-rate hiking campaign in its history later this week.
Consumer prices stripping out volatile items like fuel and food costs rose 5.6% from a year ago in April — down from March’s record 5.7% advance and in line with the median estimate in a Bloomberg poll of economists.
The headline inflation rate, meanwhile, ticked up to 7% — a touch more than the 6.9% analysts anticipated and still far above the 2% target. Services prices and a less favorable annual comparison for energy costs than in March drove the acceleration.
The report could further tilt the debate over how much the ECB should raise borrowing costs on Thursday toward those advocating a downshift to a quarter-point.

Source: Bloomberg
See also: European Central Bank raises rates by 25 basis points, slowing the pace of hikes

BANK OF JAPAN STICKS TO NEGATIVE RATES WHILE ANNOUNCING POLICY REVIEW

The Bank of Japan left its interest rates unchanged in newly appointed Governor Kazuo Ueda’s first policy meeting.
The decision was in line with economist expectations for no changes to the benchmark interest rate, which has been held at -0.1% since the central bank took rates below zero in 2016.
The central bank also kept the tolerance range for 10-year Japanese government bonds unchanged at 50 basis points above and below its target of 0%.
In December, the central bank shocked global bond markets by unexpectedly widening its tolerance range for 10-year Japanese government bonds from 25 basis points to 50 basis points above and below 0%.
weakened roughly 0.8% to 134.75 against the U.S. dollar after the announcement. The yield on the 10-year JGB fell slightly to 0.425%.
While maintaining current policies, the Bank of Japan said it “decided to conduct a broad-perspective review” of its easing measures.

Source: CNBC

Q&A: ADDRESSING INTERTWINED CHALLENGES IN CENTRAL ASIA AND THE CAUCASUS THROUGH REGIONAL COOPERATION

Central Asia and the Caucasus are facing several intertwined challenges including climate change impacts, food insecurity, and the economic effects of geopolitical conflicts.
ADB Director for Regional Cooperation in Central and West Asia Lyaziza Sabyrova explains how regional cooperation can address these challenges, and how ADB supports the region through the Central Asia Regional Economic Cooperation (CAREC) Program.
CAREC is a partnership of countries and development partners working together to promote sustainable development through cooperation. As one of the development partners supporting CAREC, ADB hosts the CAREC Secretariat and helps to facilitate projects that deliver regional benefits.
What are the major issues facing Central Asia and the Caucasus today?
There are several intertwined challenges mainly caused by the impacts of geopolitical conflicts and climate change.
The Russian invasion of Ukraine disrupted supply chains last year and drove up inflation, which remains high in some countries.

Source: ADB

TAIWAN SLIPS INTO RECESSION AS Q1 GDP HITS 14-YEAR LOW

Taiwan's export-dependent economy contracted more than expected in the first quarter and slipped into recession as exports were hit by slowing global tech demand and broader economic woes, but should hit a 2% growth target this year.
Gross domestic product (GDP) shrank 3.02% in January-March from a year earlier, following a contraction of 0.41% in the previous quarter, preliminary data from the statistics agency showed on Friday.
That marked the economy's worst performance since 2009 and lagged a fall of 1.25% predicted in a Reuters poll.
"The first-quarter GDP was the worst since the financial crisis," Wu Pei-hsuan from the Directorate General of Budget, Accounting and Statistics told reporters, referring to the 2008-2009 global crisis.
"This quarter's external demand was weak, but private consumption was strong."
There is still a chance, though, for the 2023 full-year GDP to hit 2% growth, the statistics department said.

Source: Reuters

BRENT FALLS BELOW USD 75 PER BARREL AHEAD OF FED'S EXPECTED INTEREST RATE HIKES

Oil prices extended losses on Wednesday after plunging 5% in the previous session, as investors fretted about the health of the US economy ahead of an expected Federal Reserve interest rate hike later in the day.
Brent futures fell $1.99, or 2.6%, to $73.33 a barrel by 1225 GMT, while West Texas Intermediate crude (WTI) fell $2.03, or 2.8%, to $69.63.
Both benchmarks closed at their lowest since late March in the previous session, when they also recorded their biggest one-day percentage declines since early January.
"The Federal Reserve is expected to deliver another quarter-point increase later today as part of its long-running battle against inflation," PVM Oil analyst Stephen Brennock said.
He added that concerns about the health of the U.S. banking sector and downbeat U.S. jobs data "did nothing to dispel fears that the U.S. economy is barrelling towards a shallow recession".

Source: The India Times

INVESTMENT IN DEVELOPING NATIONS MAY HIT 20-YEAR LOW: WORLD BANK OFFICIAL

Plunging investment in developing countries could lead to lower growth in the long term and exacerbate problems, said Hiroshi Matano, executive vice president at the World Bank Group's Multilateral Investment Guarantee Agency, in a recent interview.
"If the economic slowdown further intensifies, we believe that foreign direct investment into developing countries may fall to its lowest level in 20 years in 2023," Matano told Nikkei.
While the total of MIGA's guarantees for the current fiscal year are likely to reach a new record, the situation in sub-Saharan Africa and other poor developing areas remains dire, he warned.
Edited excerpts from the interview follow.
Q: What is MIGA's response?
A: Owing to the difficulty of the situation, demand for MIGA's guarantee coverage is increasing, as is the number of new projects. Our annual new-guarantee amount has been seesawing since the record high of $5.5 billion in fiscal 2019 but is likely to hit a record high for the current fiscal year ending June.

Source: Nikkei Asia

MEXICO’S ‘SHOCK’ NEW MINING LAW HURTS JUNIORS MOST

Canadian juniors in Mexico were blindsided by a new mining regime on Apr. 29, after the Mexican Senate rushed through a contentious bill that experts say will deter investment.
Mining entrepreneur Ross Beaty, who’s made a career of investing in high-risk jurisdictions across Latin America, including Mexico, tells The Northern Miner the “aggressive” move by the government is “extremely damaging” to Mexico’s mining industry. “It’s a very significant negative to Mexico’s previously good investment climate for mining,” he says.
The Senate unanimously and with little debate approved two constitutional reforms and a new mining law which the Mexican mining chamber and the Canadian federal government had as recently as April 26 admonished.
Mexico’s federal government is led by the Morena party under President Andres Manuel Lopez Obrador (AMLO), a charismatic populist elected in a landslide victory in 2018. Since then, no new mining concessions have been issued in Mexico.

Source: Mining.com

 

 

BCM QUARTERLY REPORT, Q1 2023

The Business Council of Mongolia delivers you its First Edition of the BCM Quarterly Report of 2023. The first edition covers all events organised by the BCM through the months of January - March. The fuller version of the articles can be found in the highlighted "details" part on the report.

PDF:  2023 First Quarterly Report 

Source: BCM

THE BCM APPOINTS RAPHAËL GOUÉ AS OFFICIAL BCM REPRESENTATIVE IN EUROPE

The Business Council of Mongolia is pleased to announce Mr. Raphaël Goué as an official BCM Representative in Europe.

Raphaël Goué is an expert in energy and banking, having spent more than 12 years in Asia as well as being involved in Europe-Asia cross-border projects since the mid-90s, with a focus on financial services, energy and telecommunications.

Mr. Goué has a wealth of experience in supporting global financial institutions and energy companies in their strategies in Asia, as well their development and M&A. He has previously held various positions in organizations such as Société Générale, Vivendi Universal, Booz & Co and Capital One in Europe, Africa and Asia. As a senior advisor of the global retail banking association EFMA, Raphaël has been supporting the development of banking’s leading association in selected Asian markets, and supporting EFMA in the fintech sector in Europe.

He holds an engineering degree from the École Nationale Supérieure de Géologie in Nancy, France, a master in material science from École de Mines de Nancy, and a MBA from HEC (Paris) he finalized at the Columbia Business School (New York).

The BCM is looking forward to expanding its reach to Europe with Mr. Goué’s leadership and assistance.
 

UNICEF: GUIDANCE FOR EMPLOYERS ON FLEXIBLE WORK ARRANGEMENTS AND OTHER GOOD WORKPLACE PRACTICES IN THE CONTEXT OF COVID-19


A family friendly workplace or employer is one whose policies and practices make it possible for employees and/or workers to more easily achieving work-life balance, and to fulfil both their work and family obligations. These policies may include, but are not limited to, childcare, breastfeeding rooms, flexible work arrangements, paid leave, safe transport, parenting education and so on. 
In Mongolia and various other countries, authorities have enforced kindergarten- and school closure policies as part of the preparedness and response to contain the COVID-19 epidemic. In addition to the impacts on children’s education, there are concerns about children’s protection and well-being as children are left alone or without adequate care as many parents still need to go to work. COVID-19 may also have negative effects on mental health and wellbeing of patients (if any), caregivers, children and adolescents and the public, such as experiencing fear of the consequences of infection with a new virus, and triggering stigma. Those placed in quarantine (or self-isolated) may experience boredom, loneliness, and anger.
By promoting flexible working arrangements such as adjusted working hours, working from home and/or support childcare, your employees will be in better position to address any childcare challenges and not be distracted by concerns about their children’s safety and wellbeing at home.

Click here to view in English.

Click here to view in Mongolian.

UNICEF: CALL FOR ACTIONS OF THE PRIVATE SECTOR TO REDUCE CHILDREN’S EXPOSURE TO AIR POLLUTION IN UB
 
Too many children are at risk of dying in UB due to air pollution each year. In addition to longer-term measures to reduce overall levels of air pollution in Ulaanbaatar, UNICEF recommends that companies address some of their CSR activities in the following ways:
  1. Provision of air purifiers to kindergartens, schools and clinics. Children spend a considerable amount of their time in school. Air purification systems are demonstrated to be effective in reducing air pollution levels within a home or classroom. Recent innovations have made these more affordable, durable and effective. Every classroom should have an air purifier.
  2. Provision of electric heaters to kindergartens, schools and clinics. Electric heaters can help to reduce ambient air pollution. Reducing financial barriers to access can also help improve use of electric heaters.
  3. Improved construction and insulation in kindergartens, schools and clinics. This can help reduce the amount of air pollution that enters facilities where children spend most of their time. It also saves considerably on heating costs. Studies show some improvements can decrease air exchange by up to 40%.
  4. Provision of air pollution monitoring devices in kindergartens, schools and clinics. Monitoring devices are often a first, major step to understanding one’s own risk to air pollution. It can not only inform improved practices to reduce exposure, but it is also an effective mechanism for communities to better understand what is causing air pollution, and when it is particularly harmful.
  5. Improved awareness and behaviour-change campaigns. Low awareness amongst communities about the impacts of air pollution on child health and how to respond is a key barrier to addressing the air pollution crisis. There is a need to influence policymakers, relevant government institutions, businesses, CSOs, development partners, and the general public (including families and children) about the risks that air pollution poses to their health, as well as provide guidance and recommendations on various ways to address some of the most immediate threats.
These actions will reduce children’s exposure to air pollution, safeguarding them from the worst impacts at the same time as building momentum and creating an enabling environment for longer plans that reduce air pollution. UNICEF will provide guidance on these recommendations where possible. UNICEF can also help facilitate connections between actors, agencies and institutions, including schools/ clinics where children are particularly affected. However, in order to maximize efficiency, these projects should be planned, developed, implemented and monitored by the private sector company involved. Nor will any funding go through UNICEF. This helps enhance accountability, and allows private sector donors to be more actively involved in the solution of directly supporting children in UB to breathe cleaner, healthier air.
For more information and guidance, please contact UNICEF for (Amy Wickham, This email address is being protected from spambots. You need JavaScript enabled to view it.; and Sunjidmaa Jamba, This email address is being protected from spambots. You need JavaScript enabled to view it.)
 
BCM GUIDELINE FOR COMPANIES TO COMBAT AIR POLLUTION

Purpose: This Guideline document is to help CEOs and business leaders quickly identify possible actions they can implement in their organizations against air pollution.

Resources for information on Air Pollution

Specific ACTIONS that companies can take NOW:

Educate employees about air pollution; invite guest speakers; encourage employees to share information with friends and family; discuss possible solutions with employees

  • Possible topics: damages and causes of air pollution, protection measures, energy consumption & efficiency; indoor air quality (smoking indoors); breastfeeding & healthy diet; vehicle idling; vehicle maintenance;

Work environment:

  • Improve energy efficiency in building/office to reduce energy consumption;
  • Plant & maintain trees; install air cleansing plants in the office;
  • Install HEPA air filter and air purifiers to tackle indoor air pollution (For an affordable solution, visit http://smartairfilters.com/mn/en/;
  • Install monitoring devices;
  • Smart Air Mongolia masks

Work activities:

  • Ensure company vehicles are well maintained to reduce pollution emissions;
  • Drivers/employees instructed to not idle & to turn off vehicle engine when not moving;
  • Implement carpooling activities;
  • In polluted air, ensure employees wear pollution masks;

Social responsibility:

  • Focus CSR (corporate social responsibility) initiatives to tackle air pollution
  • Tackle air pollution in UB: UNICEF recommends focusing on areas where children are especially affected, and where urgent interventions need to be put in place to protect them as soon as possible. These include the provision of air filtration systems and electric heaters in kindergartens and schools in some of the worst-affected regions. For more information and guidance, please contact UNICEF for (Nicholas Rees, This email address is being protected from spambots. You need JavaScript enabled to view it.; and Sunjidmaa, This email address is being protected from spambots. You need JavaScript enabled to view it.);
  • Run marketing/PR campaigns & contests that raise awareness about air pollution.

List of distributors for pollution masks:

  • BRB – 70119967, 99658555
  • BOX shop – 99062387, 75557007, 90878111 – Facebook: RZ утааны маск
  • CATD LLC – 11327308, 99114346
  • Mmarket – 75758001 – Facebook: Утааны Маск
  • MONOS Pharmacy – 99190858
  • Seven summits – 11317923
  • 3M Mongolia Premier Service - 9400-3088, 9910-3335
  • Utaanii Mask – 99906643 – Facebook: Утааны маск + Агаар шүүгч
  • Cycling World Mongolia LLC authorized distributor of RESPRO pollution masks- 77110444
​MEMBER-TO-MEMBER SPECIAL OFFERS & BENEFITS:
 
- Orchuulga 24 is providing a 15% discount on written translation services to BCM Members
- Ombol LLC is offering free Hepatitis C medication to employees of BCM member organizations, provided that the individual pays into state health insurance.
 

ECONOMIC INDICATORS

HISTORIC ANNUAL INFLATION

Year 2009   *4.2% [source: NSOM]
Year 2010 *13.0% [source: NSOM]
Year 2011 *10.2% [source: NSOM]
Year 2012 *14.0% [source: NSOM]
Year 2013 *12.5% [source: NSOM]
Year 2014 *11.0% [source: NSOM]
Year 2015   *1.9% [source: NSOM]
Year 2016   *1.1% [source: NSOM]
Year 2017   *6.4% [source: NSOM]
Year 2018   *8.1% [source: NSOM]
Year 2019   *5.2% [source: NSOM]
Year 2020   *2.3% [source: NSOM]
Year 2019   *13.4% [source: NSOM]
*Year-over-year (y-o-y), nationwide

CENTRAL BANK POLICY LOAN RATE

December 31, 2008 - 9.75% [source: IMF]
March 11, 2009 - 14.00% [source: IMF]
May 12, 2009 - 12.75% [source: IMF]
June 12, 2009 - 11.50% [source: IMF]
September 30, 2009 - 10.00% [source: IMF]
May 12, 2010 - 11.00% [source: IMF]
April 28, 2011 - 11.50% [source: IMF]
August 25, 2011 - 11.75% [source: IMF]
October 25, 2011 - 12.25% [source: IMF]
March 19, 2012 - 12.75% [source: Mongol Bank]
April 18, 2012 - 13.25% [source: Mongol Bank]
January 25, 2013 - 12.50% [source: Mongol Bank]
April 8, 2013 - 11.50% [source: Mongol Bank]
June 25, 2013 - 10.50% [source: Mongol Bank]
July 30, 2014 - 12.00% [source: Mongol Bank]
January 14, 2015 - 13.00% [source: Mongol Bank]
January 14, 2016 - 12.00% [source: Mongol Bank]
May 6, 2016 - 10.50% [source: Mongol Bank]
August 18, 2016 - 15.00% [source: Mongol Bank]
December 19, 2016 - 14.00% [source: Mongol Bank]
June 15, 2017 - 12.00% [source: Mongol Bank]
December 22, 2017 - 11.00% [source: Mongol Bank]
March 23, 2018 - 10.00% [source: Mongol Bank]
November 27, 2018 - 11.00% [source: Mongol Bank]
March 11, 2019 - 10.00% [source: Mongol Bank]
April 13, 2020 - 9.00% [source: Mongol Bank]
September 14, 2020 - 8.00% [source: Mongol Bank]
November 11, 2020 - 6.00% [source: Mongol Bank]
January 1, 2022 - 6.50% [source: Mongol Bank]

SOVEREIGN CREDIT RATING

Moody’s Fitch S&P
B3     – stable – 16 Mar 2021
B3     – negative – 8 May 2020
B3     – stable – 18 Jan 2018
Caa1 – stable – 30 Mar 2017
Caa1 – neg. watch – 15 Feb 2017
Caa1 – stable – 18 Nov 2016		 B   – stable – 9 Jul 2018
B-  – positive – 17 Nov 2017
B-  – stable – 22 Nov 2016
B   – stable – 24 Nov 2015
B+ – negative – 13 Dec 2013		 B   – stable – 10 Nov 2018
B-  – stable – 19 Aug 2016
B   – stable – 03 Nov 2015
B+ –   neg.  – 29 Apr 2015


CURRENCY RATES –  4 May 2023

Currency     Rate
U.S. dollar USD   3,471.46
Euro EUR   3,838.74
Japanese yen JPY   25.78
British pound GBP   4,363.45
Hong Kong Dollar HKD      442.35
Russian ruble RUB        43.94
Chinese yuan CNY      502.12
South Korean won KRW          2.62
Copyright © 2023 *Business Council of Mongolia*, All rights reserved.

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BCM NewsWire 780 – 29 April 2023

NEWSWIRE
 
NewsWire

Issue 780 –  28 April 2023
Introducing BCM's AI-generated video of top news stories of the week.

BCM NewsWire provides short summaries of news collected from around the world. Each article is kept to a maximum of 150 words for brevity, but click on the link next to “Source” to read the full article.

Economy

  • Mongolia's Mar coal output jumps 282 pct YoY; iron ore slumps 72 pct

  • China, Mongolia trade via Gants Mod Port exceeds 10 mln tonnes

  • Why Clean Energy Transition Boosts Mongolia’s Energy Independence

  • Digital transition in mining industry discussed

  • Record-breaking amount of cargo transported by UB Railway past decade

  • Mongolia refinery to be built by India by 2025

  • Almost 25,000 livestock exported

  • How to Fix Mongolia’s Mining Industry - Editorial

  • Focusing on only mining sector holds back development - Editorial

Politics

  • Polish, Mongolian presidents meet hoping for revival of mutual ties

  • Mongolia Election Law Revision Explained: How It Aims to Boost Representation and Transparency

  • Mongolia eyes Indian firms to expand its rail network

  • Air Service Agreement with Qatar Approved

  • Saranchimeg Named as One of 10 MPs Who Are Active on IPU Committees

  • Letters: Russia and China’s renewed closeness benefits Mongolia - Editorial

  • Guest Post: The Backbone of the New National Anticorruption Strategy will be the Private Sector and Civil Society - Editorial

Business

  • Mongolian-Polish Business Forum

  • Amendments to the Regulation on Fitness and Propriety

  • Business cooperation with Inner Mongolia to expand

  • China's Hopu raises USD 141m for Mongolia buyout fund

  • UB construction and industrial projects presented

  • Crude oil pipeline from Tamsag to Altanshiree commences construction

  • Thiess: A good example of supporting employment of people living with disabilities and Diversity and Inclusion

  • FRC Chairman discusses cooperation with Polish Presidential Advisor

  • TMK Energy and Talon Energy intersect gassy coal at Lucky Fox-1, Mongolia

  • Fitch Assigns Mongolian Mining's Proposed USD Notes 'B'

  • “Khovd Eco Cement” Factory Put into Operation

  • Edinburgh Cashmere set for Mongolian production boost

Global and Regional Trends

  • ADB: Benefits of Global Net-Zero Transition Can be 5 Times the Costs in Developing Asia

  • South Korea’s economy barely avoids recession amid rocky outlook

  • Vietnam readies another sales tax cut to prop up flagging economy

  • Singapore doubles property tax on foreigners to 60pc

  • Indian venture capitalists chase Asian cash as U.S. money dries up

  • Japan to subsidize half the costs of lithium, critical minerals projects – report

  • Argentina's lithium pipeline promises 'white gold' boom as Chile tightens control

  • Congo state miner and China's CMOC reach agreement on royalties

  • Chile uses an old copper template for new lithium plan: Andy Home

BCM Updates

  • BCM Quarterly Report, Q1 2023

  • The BCM appoints Raphaël Goué as official BCM representative in Europe

  • UNICEF: Guidance for employers on flexible work arrangements and other good workplace practices in the context of Covid-19

  • UNICEF: Call for actions of the private sector to reduce children’s exposure to air pollution in UB

  • BCM Guideline for Companies to Combat Air Pollution

  • Member-to-member special offers & benefits

Economic Indicators

  • Inflation

  • Central Bank Policy Rate

  • Sovereign Credit Rating

  • Currency Rates
 
Sponsors:
 

 
 



 
 

ECONOMY

MONGOLIA'S MAR COAL OUTPUT JUMPS 282 PCT YOY; IRON ORE SLUMPS 72 PCT

Coal production of Mongolia came in at 5.95 million tonnes in March, surging 281.46% year on year and rising 19.36% month on month, showed data from the National Statistical Office of Mongolia.
The inland country produced a total 16.9 million tonnes of coal in the first quarter of 2023, up 226.78% from the year prior.
Mongolia's iron ore production was 306,300 tonnes in March, down 71.6% on the year but up 13.91% on the month.
Iron sand output was 187,200 tonnes in March, down 77.72% year on year but up 12.5% from February, while iron concentrate production was 119,100 tonnes, falling 50.06% from a year ago but rising 16.2% month on month.
Production of iron ore in Mongolia totaled 914,000 tonnes during first three months this year, slumping 58.69% year on year.
Iron sand output was 582,600 tonnes, down 66.14% year on year, and iron concentrate production was 331,400 tonnes, down 32.7%.

Source: sxcoal.com
See also: Mongolia Mar rail coal shipment drops; iron ore up for 4th mth

CHINA, MONGOLIA TRADE VIA GANTS MOD PORT EXCEEDS 10 MLN TONNES

The trade volume between China and Mongolia via Ganqmod Port, the largest highway port between the two countries, has surpassed 10 million tonnes so far this year, the port's administration authority said on Monday.
Situated in north China's Inner Mongolia Autonomous Region, Ganqmod Port handled approximately 10.02 million tonnes of goods from Jan. 1 to April 22, with a daily average of 112,600 tonnes.
Ganqmod Port is the first highway port in the region to reach the 10-million-tonne mark in 2023, hitting the target nearly four months earlier than in 2022.
The port has been striving to raise its clearance efficiency by implementing more measures to facilitate trade, said the administration authority.
Ganqmod Port is a major energy import channel for the country, and an important hub on the China-Mongolia-Russia economic corridor.

Source: en.ce.cn

WHY CLEAN ENERGY TRANSITION BOOSTS MONGOLIA’S ENERGY INDEPENDENCE

As the world moves toward phasing out fossil fuels and embracing clean energy in the next decade, Mongolia faces a challenge to transition from its heavy reliance on coal.
Mongolia's commitment to cut its greenhouse gas emissions is complicated by Russia's closer energy cooperation with China in the regional market, which could increase Mongolia's dependence on its two giant neighbors.
Although the Power of Siberia 2 project, a new Russian-Chinese gas pipeline that could run through Mongolia's territory, was not mentioned in the recent Xi-Putin summit announcement in Moscow, it is likely that the project is still on the table and could offer Mongolia some benefits from its energy transition away from coal.
However, Mongolia's clean energy market also offers a promising alternative to meet its energy demand and lower its GHG emissions, while reducing its reliance on Russian energy imports and avoiding the uncertainty of a distant gas pipeline.

Source: Mongolia Weekly

DIGITAL TRANSITION IN MINING INDUSTRY DISCUSSED

Last week, ‘Digitalization in Mining Mongolia’ forum was held at the Shangri-La Hotel. The representatives of the mining companies participating in the conference emphasized the possibility of digital transition to bring the leading mineral sector in Mongolia’s economy to a new technological stage.
The Ambassador Extraordinary and Plenipotentiary of Australia to Mongolia Katie Smith participated in the Digitalization in Mining Mongolia activity organized with the support of the Australian Governments Trade Commission (Austrade), the Mongolian Mining Association and the Mongolian Mineral Processing Association. She said, “Mining sector is important in ensuring the economic development and growth both to Mongolia and Australia. Investing in human resource capacity building and developing necessary skills is vital in developing innovation in the mining sector.” She then emphasized that as Australia’s mining industry is world leading in innovation and technological innovation in terms of sustainable development, increasing profitability, safety, and competitiveness of the industry, which is why they have a lot to offer and share to Mongolia in this field.

Source: The UB Post

RECORD-BREAKING AMOUNT OF CARGO TRANSPORTED BY UB RAILWAY PAST DECADE

In Q1 2023, UB Railway managed to transport 8.1 million tons of cargo, which is an unprecedent achievement in the past decade. This achievement is happening thanks to facts that the difficulties of the pandemic are disappearing and the train exchange between Zamyn-Uud-Erenhot Port is increasing, which is the main export and import gateway of our country. Since the beginning of April, 15 trains have been sent per day to the Chinese side on the Zamyn-Uud-Erenhot Port broad-gauge railway because of UB Railway’s active collaboration with the railways of neighboring countries to increase train exchange. In last February, it was officially agreed to increase the exchange of broad-gauge trains from 14 to 15 per day with the Chinese side. In the future, if UB Railway works at this pace, it will break the historical record set before the COVID-19 pandemic, and it shows that there is a possibility of transporting 32 million tons of cargo in 2023.

Source: The UB Post

MONGOLIA REFINERY TO BE BUILT BY INDIA BY 2025

Mongolia will have its first oil refinery up and running by 2025. The first phase of the $1.2 billion Indian soft loan-funded Mongol Oil Refinery will be finished by the end of the year. Given that Russia is the only source of energy imports for Mongolia, the development has strategic ramifications.

  • The refinery will enable Mongolia to satisfy 70% of its domestic demand.
  • According to the nation’s ambassador, Dambajav Ganbold, the first oil refinery in Mongolia, which is being constructed on the outskirts of the capital city of Ulaanbaatar with funding from India, would be finished by 2025.
  • Mongolia also intends to entice investment from India in its mining and metals industries with intentions to start shipping coking coal to India by 2024.

Source: Adda247.com

ALMOST 25,000 LIVESTOCK EXPORTED

To increase the economic circulation of livestock and meat products, the export of livestock has restarted in October, 2022. Accordingly, this year, Mongolia has exported 24,540 sheep, goats, and horses. By the end of 2022, some 28,500 animals were exported. As of the first quarter, the export of livestock and animal products was 51.5 million USD, and the export of ready to eat food products was 55.4 million USD, making up a significant part of Mongolia’s exports.
 In the last three years, Mongolia has exported an average of 2.3 million livestock.
It is allowed to export up to 20 percent of nonbreeding male sheep and goats from provinces and soums where there is no outbreak of serious livestock diseases for the purpose of increasing the income of herdsmen and citizens in accordance with the number of herds, head growth, pasture capacity, hay and fodder supply due to the increase in the number of livestock and the need for necessary regulation…

Source: The UB Post

HOW TO FIX MONGOLIA’S MINING INDUSTRY - EDITORIAL

Mongolia is blessed with a wealth of mineral resources, and mining has always been an important part of Mongolia’s economy. However, mining revenues are not allocated wisely; instead of using mineral wealth to reduce its dependence on the extractive sector, Mongolia has become “addicted” to it. 
In addition, the industry is plagued by corruption. The Corruption Perceptions Index 2023 by Transparency International ranks Mongolia 116th out of 180 countries. The corporate corruption of state-owned mining companies took society by storm in December 2022. Thousands of Mongolians protested in the freezing cold, demanding the government hold officials accountable for the alleged theft of 385,000 tons of coal. 
Basically, Mongolia hasn’t been managing its mineral wealth well. So how can Mongolians address these shortcomings moving forward?
Transparency and accountability initiatives have emerged as a potential solution to combat corruption and increase public benefits from the extractive sector in resource-abundant countries.

Source: The Diplomat

FOCUSING ON ONLY MINING SECTOR HOLDS BACK DEVELOPMENT - EDITORIAL

Focusing only on the mining sector is undermining the competitiveness of other sectors that generate foreign exchange earnings and increase productivity, and strengthens over-dependence of raw material prices at the border. The report also emphasized that the macroeconomic instability caused by price swings in mining commodities is limiting opportunities for sustainable investment, which is vital in supporting productivity. There are risks that may affect economic growth and these are:
• If the war between Russia and Ukraine prolongs, monetary policies of developed countries tighten more than forecasted
• Major debts of the government (including payment of bonds of the Development Bank)
• Exacerbation of external and fiscal imbalances due to uncertainty surrounding major coal export offtake contracts.
These may cause an increase in inflationary pressure. Given the economic situation and risk conditions, it was emphasized that governance changes aimed at improving fiscal discipline, macroeconomics, and fiscal stability are important.

Source: The UB Post

POLITICS

POLISH, MONGOLIAN PRESIDENTS MEET HOPING FOR REVIVAL OF MUTUAL TIES

Mongolia is an important partner with great potential - we want to cooperate in the future, Polish President Andrzej Duda said on Tuesday after meeting his Mongolian counterpart Uchnaagijn Chürelsüch in Ulaanbaatar.
Earlier, the presidents signed a number of agreements on economic cooperation, including in the fields of natural resources and science.
During the briefing, President Duda expressed hope that his visit will lead to a revival of Polish-Mongolian relations. He estimated that the signed agreements will bring tangible benefits to both countries.
He stressed that Mongolia is a very important partner, with great potential and is rich in natural resources. “We want cooperation with Mongolia in the future,” he declared.
Duda reported that his conversation with the Mongolian president also concerned political cooperation and the difficult international situation, which has been complicated by the COVID-19 pandemic and Russian aggression against Ukraine.

Source: TVPWorld.com
See also: Poland reopens its embassy in Mongolia
Mongolia could help bring Russian war criminals to justice, says Duda
U. Khurelsukh: We agreed to expand and develop cooperation in the fields of road transport, education, geology, and mining
Export from Poland to Mongolia surpasses EUR 70 million
Polish President Presents State Awards to Mongolians
Speaker of Parliament Pays Courtesy Call on Polish President
Mongolia and Poland Conclude Cooperation Documents
Prime Minister Paid Courtesy Call on President of Poland

MONGOLIA ELECTION LAW REVISION EXPLAINED: HOW IT AIMS TO BOOST REPRESENTATION AND TRANSPARENCY

Mongolia is taking steps towards improving the country's election process by introducing a new election law that addresses long-standing issues of representation, transparency, and fairness.
The key provision of this law is a mixed system of elections, where 50 percent of members of parliament will be elected from proportional party lists, and the remaining 50 percent will be elected from constituencies.
This mixed system was previously used in 2012 but was abandoned in 2016. The deadline for the law's finalization is June 2023, ahead of the general election scheduled for June 2024.
The reintroduction of the mixed system aims to shift the parliament's focus from narrow interests of small constituencies to national policies.
The bill's sponsors hope this change will make the parliament more representative of different social groups and address the declining popularity of the parliament in recent years.

Source: Mongolia Weekly

MONGOLIA EYES INDIAN FIRMS TO EXPAND ITS RAIL NETWORK

Mongolia is keen to attract Indian firms to help build rail connectivity in the country, according to Mongolia’s Ambassador to India Dambajav Ganbold.
“We have only one main railway which connects the North of our country to the South. This is the Russian Trans-Siberian Railways that goes through Mongolia to Beijing. This comes from North to South, but for the further development of Mongolia, we would like to have horizontal railway lines, for example from the South to the West. Indian firms are experts in developing infrastructure like railways and highways and this will be an interesting area of cooperation for Indian companies," Ganbold told Mint.
India has some experience with building railway projects in other countries. Rail India Technical and Economic Services (RITES), a public sector enterprise set up in 1974, provides infrastructure study, rolling stock design, equipment design and a suite of engineering services to other countries.

Source: LiveMint.com

AIR SERVICE AGREEMENT WITH QATAR APPROVED

"Air Service Agreement between Mongolia and Qatar" signed on March 7, 2023, in Doha, Qatar was approved at the Cabinet session on April 26.
Upon the Agreement coming into force, airlines of the two countries are able to conduct direct flights, unveiling a wide range of opportunities to expand relations in tourism, business, trade, and economy between the countries.
The national flag carrier MIAT State Owned Joint-Stock Company has been designated as the air carrier for direct flights between Ulaanbaatar and Doha. Now, it is possible to transport passengers and freight from Ulaanbaatar to the Middle East, North Africa, and the Gulf States, as well as Mongolians can travel by Qatar Airways.
Qatar Airways currently flies to more than 160 destinations in 90 countries. As of the fiscal year of 2022, the airline carried just over 18.5 million passengers on its flights. 

Source: Montsame

SARANCHIMEG NAMED AS ONE OF 10 MPS WHO ARE ACTIVE ON IPU COMMITTEES

The Inter-Parliamentary Union has named 10 MPs who are active on IPU committees to promote gender equality, youth participation, peace, and sustainable development, in which Batsukh Saranchimeg, a Mongolian MP and Vice-President of the IPU Standing Committee on Democracy and Human Rights is included.
Mongolia has been actively engaging in IPU activities since joining in 1962. Ms.Saranchimeg was elected as a member of the Bureau of the Standing Committee in 2018.
Batsukh Saranchimeg, Mongolia
Vice-President of the IPU Standing Committee on Democracy and Human Rights
Ms. Saranchimeg, a Mongolian MP, is the Vice-President of the IPU’s Committee on Democracy and Human Rights.
The committee analyses threats and challenges to democracy, proposing parliamentary action that is adopted by all IPU Member Parliaments. Ms Saranchimeg’s role places her at the forefront of the IPU’s work on new technology and its role within democracy.

Source: Montsame

LETTERS: RUSSIA AND CHINA’S RENEWED CLOSENESS BENEFITS MONGOLIA - EDITORIAL

I have a theory: a country is independent if providing other countries with jobs and commodities and dependent if instead it is in need of the two. As a Russian, I often see manual labourers from Central Asia and everyone knows that all countries import hi-tech Chinese products. But what about Mongolia?
My father who directed a radio station in Kyzyl in Siberia once went to that country on a business trip. He said he saw no foreign workers there and only Czech and German broadcasting equipment at a local station. I do occasionally see Mongolian goods, only visiting Kyzyl and never in the Russian capital.
That country’s attempt to reduce reliance on any one nation described in the article, “‘Like a divorce’: Mongolia, landlocked between Russia and China, fears new Cold War” (April 6), is risky.
The current situation is like a reunion between Russia and China after their relations hitting bumps in the road for decades.

Source: South China Morning Post

GUEST POST: THE BACKBONE OF THE NEW NATIONAL ANTICORRUPTION STRATEGY WILL BE THE PRIVATE SECTOR AND CIVIL SOCIETY - EDITORIAL

Mongolia’s IAAC (Independent Agency Against Corruption) announced on April 12, 2023 that it has presented a new national anticorruption strategy to be implemented up to 2030 to its parliament. This draft strategy drastically shifted its previous focus of the national anticorruption program that focused on legislative changes and punishment to objectives more fostering private sector and emphasizing collaboration with civil society and public.
According to the working group who developed a national anticorruption strategy, basic rights such as a) public’s right to information, b) government’s duty to be transparent, c) efficiency and effectiveness of public services, d) inclusiveness in societal life and services and e) digitalization features were considered in every single action which sets a new standard approach that would be taken to reduce corruption. This, as per the developers of the program, will make a national anticorruption strategy a truly worthy document to reduce corruption through human rights -based and public engagement-based approaches.

Source: Mongolia Focus

BUSINESS

MONGOLIAN-POLISH BUSINESS FORUM

In the framework of the State visit of President Poland Andrzej Duda to Mongolia, a Mongolian-Polish Business Forum was held on April 25 at Shangri-La Hotel in Ulaanbaatar.
President Poland Andrzej Duda and President of Mongolia Khurelsukh delivered opening speeches to the Business Forum.
In their speeches, the Presidents of the two countries emphasized that the relations between the Parliaments, Governments, public organizations, citizens, and entrepreneurs have intensified, and the trade turnover of the two countries has reached USD 100 million doubling in the last three years.
Economic Adviser to the President of Mongolia B. Davaadalai stated that this Forum and the State visit would bring considerable results in significantly increasing the economic and trade cooperation between the two countries. He said, "Twenty Polish companies engaged in milk and dairy products, meat and meat products, health, medical equipment, information technology, electricity, energy, construction, and tourism are taking part in this Forum, whilst about 300 companies and entrepreneurs from Mongolia participate in the event.

Source: Montsame
See also: Export from Poland to Mongolia surpasses EUR 70 million

AMENDMENTS TO THE REGULATION ON FITNESS AND PROPRIETY

The meeting approved the composition of the credit operation policy council.  Changes were made to the "Regulation on fitness and propriety" to comply with the recommendations and requirements of the Financial Action Task Force (FATF), adhere to the Law on Regulating Money Lending, and provide opportunities for the implementation of unified and effective regulation within the industry. More specifically, additions and changes were made to the "Regulation on fitness and propriety" to establish criteria for the compliance officer, the reporting entities, and the person engaged in money lending activities. Additionally, the knowledge and education criteria for the board of directors and executive management were modified to align with the "Professional area/program name/index" approved by the Minister of Education and Science, in accordance with industry conditions and trends.

Source: FRC

BUSINESS COOPERATION WITH INNER MONGOLIA TO EXPAND

Mongolian National Chamber of Commerce and Industry (MNCCI) and People’s Government House of Inner Mongolia jointly organized the ‘Manzhouli City Economic Cooperation Project Presentation Meeting and Exhibition 2023’ event in the Great Hall of MNCCI. On this occasion, a meeting was held to present the economic cooperation project of Manzhouli City.
Member of Parliament and Minister of Food, Agriculture and Light Industry Kh.Bolorchuluun, participated in the meeting and noted that the Government attaches importance to the revival of the Port and the development of border tourism, and the construction of the paved road in Choibalsan-Khavirga-Ar Khashaat direction will begin this spring. In the future, Khavirga-Ar Khashaat port will be expanded not only for citizens, but also for the export of tourism, mining and agricultural products. On this occasion, China’s Fada group presented the possibility of importing Mongolian goods into the free border zone duty-free, and Port group presented its travel program to other major Chinese cities.

Source: The UB Post, Mayor's Office
See also: Ulaanbaatar to cooperate with Manzhouli in the field of tourism
PM says gov't will use all means of funding to improve road infrastructure in capital

CHINA'S HOPU RAISES USD 141M FOR MONGOLIA BUYOUT FUND

Hopu Investment Management, a Chinese private equity company, has so far raised about $141 million for the Hopu Magnolia Fund, a buyout fund that invests across Mongolia, according to the company's filing with the U.S. Securities and Exchange Commission (SEC).
The filing showed that the fund, launched in 2021, has already received commitments from at least 18 investors. SEC filings typically reflect funds raised from U.S. investors.
Hopu did not specify the target size for the fund, but earlier reports said the company has trimmed its target to $250 million and is delaying the fund's final close.
DealStreetAsia has reached out to Hopu for confirmation.
In 2022, Hopu Magnolia co-anchored a $70 million additional Series C funding in Laiye, a global intelligent-automation company.
Hopu is an alternative asset manager specializing in proprietary investments, with offices in Beijing, Hong Kong and Singapore.

Source: Nikkei Asia

UB CONSTRUCTION AND INDUSTRIAL PROJECTS PRESENTED

On April 20, the Mayor’s office and National Chamber of Commerce and Industry joined and held UB International Investment and Partnership Forum (UBIIPF) under New Revival-Ulaanbaatar slogan. It is held at the Central Administrative complex of and over 380 representatives of government officials, diplomats, and foreign and domestic enterprises participated. The forum aimed to stimulate the economy of Ulaanbaatar, attract foreign and domestic investors, and present major projects, programs, and developments.
 At the forum, Board Director of Premium group A.Gankhuyag. He said, “Although 70 percent of all businesses concentrate in Ulaanbaatar, only 33 percent of the state budget is spent here. Therefore, it is full of possibilities to invest and develop. The nearest example of a successful development and investment project is the new international airport. Ulaanbaatar is under dire need of funding and the investment possibilities rise with it.”

Source: The UB Post

CRUDE OIL PIPELINE FROM TAMSAG TO ALTANSHIREE COMMENCES CONSTRUCTION

Member of Parliament and Chairman of the Standing Committee on Industrialization Policy T.Enkhtuvshin met with Vice President of China's state-owned Norinco Group Wang Yi Tong and representatives who were selected as the contractor for the oil pipeline construction project in Mongolia. The construction of a crude oil pipeline with a total length of 530 km from the Tamsag oil field in Dornogovi province to the oil refinery being built in Altanshiree soum in Dornogobi province will start on April 28.
Head of the Standing Committee T.Enkhtuvshin emphasized the progress of the oil refinery in Altanshiree Soum and the construction of the Tavantolgoi-Khangi-Mandal railway, and expressed his satisfaction at the beginning of the pipeline to supply raw materials to the oil refinery. He noted that an oil refinery with pipelines for drawing crude oil is very important for the economic development of Mongolia and emphasized that once the plant is put into operation, our country will be able to meet its own domestic fuel needs.

Source: The UB Post

THIESS: A GOOD EXAMPLE OF SUPPORTING EMPLOYMENT OF PEOPLE LIVING WITH DISABILITIES AND DIVERSITY AND INCLUSION

Thiess in Mongolia operates with over 290 employees, of which 9 of them are people living with disabilities. By law, business entities with 25 or more employees are required to employ at least 4% people living with disabilities. Thiess not only welcomes and employs people living with disabilities, but also takes and supports diversity and inclusion initiatives across their operations.
Rolling out diversity and inclusion initiatives across Thiess Group since 2018 underpins and supports creation of more inclusive workplaces within Thiess. Thiess is a leading mining services provider operating across over 20 mining projects in Australia, Indonesia, Mongolia, USA and Chile.
Ms Otgonsuren Balgan, Senior HR officer at Thiess, said “As part of this great initiative, we started providing people living with disabilities access to jobs since 2019. This initiative is focused on providing a safe and inclusive workplace, where everyone is able to bring their full self to work and feels safe, respected and valued regardless of their disabilities, age, sex, religious belief and sexual orientation.

Source: Mongolian Mining Journal

FRC CHAIRMAN DISCUSSES COOPERATION WITH POLISH PRESIDENTIAL ADVISOR

he Chairman of the Financial Regulatory Commission, D. Bayarsaikhan, held a meeting with Mr. Zdzislav Sokal, the Economic Advisor to the President of Poland and Board Director of Polish Investment and Trade Agency, during the state visit of the President of the Republic of Poland, Andrzej Duda, to Mongolia. The visit is of significant importance as it aligns with Mongolia's economic recovery policy, which aims to diversify the economy and establish a sustainable, multi-pillar structure by expanding the participation of the "Third Neighbor" in addition to Mongolia's two neighboring countries.
Chairman D. Bayarsaikhan praised the Republic of Poland for its robust economic growth and stable banking and financial system, which stands out among Southeast and Eastern European nations. He also commended Poland's ability to diversify its economy through targeted support of key sectors, such as agriculture, heavy machinery, food production, and tourism. The FRC has an established partnership with the Polish Financial Supervision Authority, having signed a memorandum of understanding in 2010.

Source: FRC

TMK ENERGY AND TALON ENERGY INTERSECT GASSY COAL AT LUCKY FOX-1, MONGOLIA

Talon Energy (TPD) and TMK Energy (TMK) have intersected 60 metres of gassy coal at the Lucky Fox-1 pilot production well within the Gurvantes XXXV CSG project in the South Gobi Desert of Mongolia.
The project is held in a joint venture between the businesses, with Talon holding 33 per cent and TMK owning the remaining 67 per cent while acting as operator.
Lucky Fox-1 was spudded on April 12 and reached its total depth of 375 metres on April 26.
The well intersected 60 metres of gassy coal in the production interval and was drilled safely, on time and within budget by contractors Major Drilling.
The drill rig is now being mobilised to the site of the Lucky Fox-2 well, just 200 metres from Lucky Fox-1, ahead of the spudding of the second pilot production well.
The drilling of the remaining two production wells is expected to take five weeks.

Source: The Market Herald, Proactive Investors

FITCH ASSIGNS MONGOLIAN MINING'S PROPOSED USD NOTES 'B'

Fitch Ratings has assigned coal producer Mongolian Mining Corporation's (MMC) proposed US dollar notes a 'B' rating with an expected Recovery Rating of 'RR4'. The proposed notes will be issued by MMC and its wholly owned subsidiary Energy Resources LLC, and guaranteed by most of its operating subsidiaries. The notes will constitute senior unsecured obligations of MMC as they represent its unsecured and unsubordinated obligations.
Net proceeds from this issuance will be used to fund a concurrent tender offer for liability management purposes and will be leverage neutral. We expect successful issuance of the notes to alleviate the company's medium-term funding needs for its USD350 million 2024 notes redemption.
The new notes will be used to pay the tender price of any 2024 notes tendered in a concurrent tender and exchange offer. The tender offer has a maximum tender cap equal to the new notes issued. 

Source: Fitch Ratings

“KHOVD ECO CEMENT” FACTORY PUT INTO OPERATION

“Khovd Eco Cement” factory has been officially put into operation, writing a new chapter in the development history of Western Mongolia.
President Khurelsukh attended the opening ceremony and delivered a speech. While highlighting the fact that the “Khovd Eco Cement” factory is the biggest factory that has ever been built in Mongolia since 2020, President said, “A transition from welfare to labor, from extraction to processing and from import to export is starting right here, right from this factory. “Khovd Eco Cement” project will give great impetus for state policy implementation to develop aimag centers into town, reduce rural-to-urban migration and provide rural citizens with adequate living conditions.” 
The “Khovd Eco Cement” is a dry-process cement factory that doesn't use water in its mining, crushing, grinding, and mixing in the correct proportion stages of manufacturing.

Source: Montsame

EDINBURGH CASHMERE SET FOR MONGOLIAN PRODUCTION BOOST

The owner of Edinburgh Cashmere is set to boost production after signing a partnership with with an unnamed manufacturer in Mongolia.
Described as one of the East Asian country's largest luxury textiles producers, the factory is expected to produce up to one million cashmere and lambswool products for Edinburgh Cashemere on an annual basis. Didar Singh Chalana, who set up the Scottish business nine years ago, said the value of these goods will be between £5 million and £10m per year.
The factory is described as using the latest state-of-the-art machinery and techniques, with raw materials sourced sustainably and ethically. Mr Chalana, also known as DC Singh, said the venture will allow Edinburgh Cashmere to keep up with ever-increasing demand.
Born in Punjab, India, Mr Chalana has a background in wholesaling. He was working in Edinburgh’s Royal Mile in 2008 when he first got the idea for setting up his own cashmere company.

Source: The Herald Scotland

GLOBAL AND REGIONAL NEWS

ADB: BENEFITS OF GLOBAL NET-ZERO TRANSITION CAN BE 5 TIMES THE COSTS IN DEVELOPING ASIA

Global efforts to achieve net-zero greenhouse gas emissions can yield substantial economic and social benefits. For developing Asia, these benefits could be 5 times the costs of mitigation, according to a new report from the Asian Development Bank (ADB).
The benefits—including avoided economic losses from climate change, as well as improved health thanks to cleaner air—are achievable through targeted policy reforms, according to the Asian Development Outlook Thematic Report: Asia in the Global Transition to Net Zero, released today. 
In a scenario where the world works together immediately to reduce warming to well below 2°C, in line with the Paris Agreement, the costs to the region would be about 1% of gross domestic product (GDP) annually, before even accounting for climate or air quality benefits.
“To make climate policy pay off, we need to adopt economically efficient approaches, such as carbon pricing,” said ADB Chief Economist Albert Park.

Source: ADB

SOUTH KOREA’S ECONOMY BARELY AVOIDS RECESSION AMID ROCKY OUTLOOK

South Korea’s economy has barely avoided recession amid challenging global economic conditions for Asia’s fourth-largest economy.
South Korea’s gross domestic product (GDP) grew 0.3 percent during January-March, government figures showed on Tuesday, rebounding from a 0.4 percent contraction in the final quarter of 2022.
A recession is typically defined as two consecutive quarters of negative growth.
The rebound came as the country’s exports rose compared with the previous quarter and domestic demand improved.
Private consumption was the biggest growth driver, expanding 0.5 percent, while exports rose 3.8 percent, after falling 4.6 percent the previous quarter.
“Given consumption for leisure and tourism services was particularly strong, we think the reopening boost has continued,” Min Joo Kang, senior economist for South Korea and Japan at ING, said in a note.
“Inflation came down rapidly from last year’s peak and market interest rates also stabilised as the BoK [Bank of Korea] has paused its rate increases since January. These factors probably boosted consumption last quarter.”

Source: Al Jazeera, Reuters

VIETNAM READIES ANOTHER SALES TAX CUT TO PROP UP FLAGGING ECONOMY

Vietnam is preparing to lower its value-added tax just four months after ending the previous round of cuts as stagnating exports weigh on the economy.
Le Minh Khai, the deputy prime minister in charge of the economy, this month signed off on a proposal to decrease the VAT rate. The Finance Ministry, which crafted the proposal, is finalizing the authorization of the tax plan.
The proposal calls for lowering the VAT to 8% from 10% until the end of the year. The cuts would translate to 5.8 trillion dong ($247 million) in lost tax revenue each month.
One shopper at the Vincom Center shopping mall in Hanoi expressed excitement.
"It'll be easier to buy clothes at Uniqlo," said the person.
The government lowered the VAT last year in response to the pandemic, but the cuts were not applicable to the telecommunications and real estate. The upcoming cut will include all goods and services.

Source: Nikkei Asia

SINGAPORE DOUBLES PROPERTY TAX ON FOREIGNERS TO 60PC

Singapore is raising property taxes to cool its red-hot housing market, amid mounting concern that an influx of wealth into the city-state is hurting affordability for locals and its competitiveness as a financial hub.
The government is increasing stamp duties for second home buyers and foreigners purchasing private property, it said in a statement. For foreigners buying any home, the tax rate doubled to 60 per cent from 30 per cent. Shares of Singapore developers fell.
The city-state’s property sector has remained buoyant even as other countries face slowdowns because of soaring interest rates and inflation, partly due to an inflow of money, especially from wealthy Chinese.
A shortage of supply and rising construction costs during the pandemic have also propelled home prices and rents, fuelling discontent among residents.
The increase “may slow the frenzy to move money to Singapore, but maybe not as much as you might expect”, said Bloomberg Economics chief Asia economist Chang Shu.

Source: Australian Financial Review

INDIAN VENTURE CAPITALISTS CHASE ASIAN CASH AS U.S. MONEY DRIES UP

Indian venture capital firms are turning to the Middle East and Southeast Asia for funding as traditional U.S. backers retreat in response to tightening credit conditions and the uncertain outlook for initial public offerings.
The search for investors closer to home marks the latest chapter in a tumultuous period for Indian VC firms, which flourished at the start of the decade on hopes that their country would be the "next China" but hit tougher times in the second half of 2022.
Finding American money for early-stage ventures in the world's most populous country has become so difficult that one Indian VC executive raising his maiden fund compared the experience to gaining a spot at a top-tier U.S. university.
"The bar is very high to raise from the U.S. investors, particularly for people like me, because they have their hands full reassessing their current investments. So, I have to knock on new doors," the executive told Nikkei Asia.

Source: Nikkei Asia

JAPAN TO SUBSIDIZE HALF THE COSTS OF LITHIUM, CRITICAL MINERALS PROJECTS – REPORT

Japan’s Ministry of Economy, Trade and Industry will subsidize up to half the cost of mine development and smelting projects for lithium and other critical minerals by Japanese companies, Nikkei Asia reported on Sunday.
Lithium, manganese, nickel, cobalt, graphite and rare earths are reportedly the main targets for support.
The initiative seeks to secure raw materials used in manufacturing electric car engines and batteries. Japan is planning to diversify its supply chains, as, like most countries, it is dependent on China for many key minerals.
Geological surveys will determine the profitability and quality of mines to be subsidized, Nikkei reported, adding that the initiative will also cover mine development and smelting operations.
China accounts for 60% to 70% lithium and cobalt processing for battery cathode materials and 70% of graphite processing for anode materials, according to the International Energy Agency. China is also responsible for almost all the world’s rare-earths processing.

Source: Mining.com

ARGENTINA'S LITHIUM PIPELINE PROMISES 'WHITE GOLD' BOOM AS CHILE TIGHTENS CONTROL

In Argentina's mountainous north, a strong pipeline of lithium projects close to coming online looks set to unlock a wave of production that could see its output of the key electric vehicle battery metal as much as triple within the next two years.
The world’s fourth largest producer of the silvery-white metal sits within the so-called "lithium triangle" and has been luring investment from Canadian to Chinese mining firms with a regional and market-led model, even as a wave of resource nationalism has spread in the region.
Neighboring Chile, the region's top lithium producer, last week unveiled plans for a state-led public-private model, spooking investors. Bolivia has long maintained strict control over its huge though largely untapped resources, while Mexico nationalized its lithium deposits last year.
In Argentina, despite state energy firm YPF starting to explore for lithium last year, the sector has largely been driven by private enterprise…

Source: Reuters
See also: Argentina plans to produce 200,000 tonnes of lithium by 2025

CONGO STATE MINER AND CHINA'S CMOC REACH AGREEMENT ON ROYALTIES

An agreement on royalties between Congo's state miner and China's CMOC has been reached, paving the way for the resumption of minerals exports from the world's second largest cobalt mine, Congo's finance minister said late on Monday.
Copper and cobalt exports from Tenke Fungurume Mining (TFM) were suspended in July after an escalation in a dispute between its shareholders Gecamines and CMOC.
A temporary administrator appointed by a Congolese court ordered majority owner CMOC to suspend marketing and export of its production.
"CMOC - Gecamines, an agreement has been reached. I have some elements of this agreement but I prefer to let the entities themselves confirm and this will be done in the next few days," Nicolas Kazadi said in response to a question from Reuters.
China's CMOC Group announced in a statement on Wednesday that a "consensus" had been reached on April 18 on the issue of TFM royalties. It referred to a "win-win", without giving further details on this agreement.

Source: Reuters

CHILE USES AN OLD COPPER TEMPLATE FOR NEW LITHIUM PLAN: ANDY HOME

Chile’s assertion of state control over its lithium industry has sent shock waves through the new energy metals sector.
The country’s two big lithium producers, SQM and Albemarle, have seen their share prices fall on the prospect of having to relinquish majority control of their operations or risk losing their licences once they expire in 2030 and 2043 respectively.
Shares in companies such as Pilbara Minerals, Australia’s biggest lithium producer, have risen on the premise of slower investment and project growth in Chile, which hosts the world’s largest deposits of the battery metal.
Chile has been here before. The country nationalised its copper sector in 1971, provoking international outrage, particularly in the United States.
President Gabriel Boric’s lithium “nationalisation” is a more benign version, using an even earlier copper model. Moreover, Chile is far from the only country seeking to channel the new energy metals boom.

Source: Reuters
See also: Chile's lithium nationalization shines light on emerging tech

 

 

BCM QUARTERLY REPORT, Q1 2023

The Business Council of Mongolia delivers you its First Edition of the BCM Quarterly Report of 2023. The first edition covers all events organised by the BCM through the months of January - March. The fuller version of the articles can be found in the highlighted "details" part on the report.

PDF:  2023 First Quarterly Report 

Source: BCM

THE BCM APPOINTS RAPHAËL GOUÉ AS OFFICIAL BCM REPRESENTATIVE IN EUROPE

The Business Council of Mongolia is pleased to announce Mr. Raphaël Goué as an official BCM Representative in Europe.

Raphaël Goué is an expert in energy and banking, having spent more than 12 years in Asia as well as being involved in Europe-Asia cross-border projects since the mid-90s, with a focus on financial services, energy and telecommunications.

Mr. Goué has a wealth of experience in supporting global financial institutions and energy companies in their strategies in Asia, as well their development and M&A. He has previously held various positions in organizations such as Société Générale, Vivendi Universal, Booz & Co and Capital One in Europe, Africa and Asia. As a senior advisor of the global retail banking association EFMA, Raphaël has been supporting the development of banking’s leading association in selected Asian markets, and supporting EFMA in the fintech sector in Europe.

He holds an engineering degree from the École Nationale Supérieure de Géologie in Nancy, France, a master in material science from École de Mines de Nancy, and a MBA from HEC (Paris) he finalized at the Columbia Business School (New York).

The BCM is looking forward to expanding its reach to Europe with Mr. Goué’s leadership and assistance.
 

UNICEF: GUIDANCE FOR EMPLOYERS ON FLEXIBLE WORK ARRANGEMENTS AND OTHER GOOD WORKPLACE PRACTICES IN THE CONTEXT OF COVID-19


A family friendly workplace or employer is one whose policies and practices make it possible for employees and/or workers to more easily achieving work-life balance, and to fulfil both their work and family obligations. These policies may include, but are not limited to, childcare, breastfeeding rooms, flexible work arrangements, paid leave, safe transport, parenting education and so on. 
In Mongolia and various other countries, authorities have enforced kindergarten- and school closure policies as part of the preparedness and response to contain the COVID-19 epidemic. In addition to the impacts on children’s education, there are concerns about children’s protection and well-being as children are left alone or without adequate care as many parents still need to go to work. COVID-19 may also have negative effects on mental health and wellbeing of patients (if any), caregivers, children and adolescents and the public, such as experiencing fear of the consequences of infection with a new virus, and triggering stigma. Those placed in quarantine (or self-isolated) may experience boredom, loneliness, and anger.
By promoting flexible working arrangements such as adjusted working hours, working from home and/or support childcare, your employees will be in better position to address any childcare challenges and not be distracted by concerns about their children’s safety and wellbeing at home.

Click here to view in English.

Click here to view in Mongolian.

UNICEF: CALL FOR ACTIONS OF THE PRIVATE SECTOR TO REDUCE CHILDREN’S EXPOSURE TO AIR POLLUTION IN UB
 
Too many children are at risk of dying in UB due to air pollution each year. In addition to longer-term measures to reduce overall levels of air pollution in Ulaanbaatar, UNICEF recommends that companies address some of their CSR activities in the following ways:
  1. Provision of air purifiers to kindergartens, schools and clinics. Children spend a considerable amount of their time in school. Air purification systems are demonstrated to be effective in reducing air pollution levels within a home or classroom. Recent innovations have made these more affordable, durable and effective. Every classroom should have an air purifier.
  2. Provision of electric heaters to kindergartens, schools and clinics. Electric heaters can help to reduce ambient air pollution. Reducing financial barriers to access can also help improve use of electric heaters.
  3. Improved construction and insulation in kindergartens, schools and clinics. This can help reduce the amount of air pollution that enters facilities where children spend most of their time. It also saves considerably on heating costs. Studies show some improvements can decrease air exchange by up to 40%.
  4. Provision of air pollution monitoring devices in kindergartens, schools and clinics. Monitoring devices are often a first, major step to understanding one’s own risk to air pollution. It can not only inform improved practices to reduce exposure, but it is also an effective mechanism for communities to better understand what is causing air pollution, and when it is particularly harmful.
  5. Improved awareness and behaviour-change campaigns. Low awareness amongst communities about the impacts of air pollution on child health and how to respond is a key barrier to addressing the air pollution crisis. There is a need to influence policymakers, relevant government institutions, businesses, CSOs, development partners, and the general public (including families and children) about the risks that air pollution poses to their health, as well as provide guidance and recommendations on various ways to address some of the most immediate threats.
These actions will reduce children’s exposure to air pollution, safeguarding them from the worst impacts at the same time as building momentum and creating an enabling environment for longer plans that reduce air pollution. UNICEF will provide guidance on these recommendations where possible. UNICEF can also help facilitate connections between actors, agencies and institutions, including schools/ clinics where children are particularly affected. However, in order to maximize efficiency, these projects should be planned, developed, implemented and monitored by the private sector company involved. Nor will any funding go through UNICEF. This helps enhance accountability, and allows private sector donors to be more actively involved in the solution of directly supporting children in UB to breathe cleaner, healthier air.
For more information and guidance, please contact UNICEF for (Amy Wickham, This email address is being protected from spambots. You need JavaScript enabled to view it.; and Sunjidmaa Jamba, This email address is being protected from spambots. You need JavaScript enabled to view it.)
 
BCM GUIDELINE FOR COMPANIES TO COMBAT AIR POLLUTION

Purpose: This Guideline document is to help CEOs and business leaders quickly identify possible actions they can implement in their organizations against air pollution.

Resources for information on Air Pollution

Specific ACTIONS that companies can take NOW:

Educate employees about air pollution; invite guest speakers; encourage employees to share information with friends and family; discuss possible solutions with employees

  • Possible topics: damages and causes of air pollution, protection measures, energy consumption & efficiency; indoor air quality (smoking indoors); breastfeeding & healthy diet; vehicle idling; vehicle maintenance;

Work environment:

  • Improve energy efficiency in building/office to reduce energy consumption;
  • Plant & maintain trees; install air cleansing plants in the office;
  • Install HEPA air filter and air purifiers to tackle indoor air pollution (For an affordable solution, visit http://smartairfilters.com/mn/en/;
  • Install monitoring devices;
  • Smart Air Mongolia masks

Work activities:

  • Ensure company vehicles are well maintained to reduce pollution emissions;
  • Drivers/employees instructed to not idle & to turn off vehicle engine when not moving;
  • Implement carpooling activities;
  • In polluted air, ensure employees wear pollution masks;

Social responsibility:

  • Focus CSR (corporate social responsibility) initiatives to tackle air pollution
  • Tackle air pollution in UB: UNICEF recommends focusing on areas where children are especially affected, and where urgent interventions need to be put in place to protect them as soon as possible. These include the provision of air filtration systems and electric heaters in kindergartens and schools in some of the worst-affected regions. For more information and guidance, please contact UNICEF for (Nicholas Rees, This email address is being protected from spambots. You need JavaScript enabled to view it.; and Sunjidmaa, This email address is being protected from spambots. You need JavaScript enabled to view it.);
  • Run marketing/PR campaigns & contests that raise awareness about air pollution.

List of distributors for pollution masks:

  • BRB – 70119967, 99658555
  • BOX shop – 99062387, 75557007, 90878111 – Facebook: RZ утааны маск
  • CATD LLC – 11327308, 99114346
  • Mmarket – 75758001 – Facebook: Утааны Маск
  • MONOS Pharmacy – 99190858
  • Seven summits – 11317923
  • 3M Mongolia Premier Service - 9400-3088, 9910-3335
  • Utaanii Mask – 99906643 – Facebook: Утааны маск + Агаар шүүгч
  • Cycling World Mongolia LLC authorized distributor of RESPRO pollution masks- 77110444
​MEMBER-TO-MEMBER SPECIAL OFFERS & BENEFITS:
 
- Orchuulga 24 is providing a 15% discount on written translation services to BCM Members
- Ombol LLC is offering free Hepatitis C medication to employees of BCM member organizations, provided that the individual pays into state health insurance.
 

ECONOMIC INDICATORS

HISTORIC ANNUAL INFLATION

Year 2009   *4.2% [source: NSOM]
Year 2010 *13.0% [source: NSOM]
Year 2011 *10.2% [source: NSOM]
Year 2012 *14.0% [source: NSOM]
Year 2013 *12.5% [source: NSOM]
Year 2014 *11.0% [source: NSOM]
Year 2015   *1.9% [source: NSOM]
Year 2016   *1.1% [source: NSOM]
Year 2017   *6.4% [source: NSOM]
Year 2018   *8.1% [source: NSOM]
Year 2019   *5.2% [source: NSOM]
Year 2020   *2.3% [source: NSOM]
Year 2019   *13.4% [source: NSOM]
*Year-over-year (y-o-y), nationwide

CENTRAL BANK POLICY LOAN RATE

December 31, 2008 - 9.75% [source: IMF]
March 11, 2009 - 14.00% [source: IMF]
May 12, 2009 - 12.75% [source: IMF]
June 12, 2009 - 11.50% [source: IMF]
September 30, 2009 - 10.00% [source: IMF]
May 12, 2010 - 11.00% [source: IMF]
April 28, 2011 - 11.50% [source: IMF]
August 25, 2011 - 11.75% [source: IMF]
October 25, 2011 - 12.25% [source: IMF]
March 19, 2012 - 12.75% [source: Mongol Bank]
April 18, 2012 - 13.25% [source: Mongol Bank]
January 25, 2013 - 12.50% [source: Mongol Bank]
April 8, 2013 - 11.50% [source: Mongol Bank]
June 25, 2013 - 10.50% [source: Mongol Bank]
July 30, 2014 - 12.00% [source: Mongol Bank]
January 14, 2015 - 13.00% [source: Mongol Bank]
January 14, 2016 - 12.00% [source: Mongol Bank]
May 6, 2016 - 10.50% [source: Mongol Bank]
August 18, 2016 - 15.00% [source: Mongol Bank]
December 19, 2016 - 14.00% [source: Mongol Bank]
June 15, 2017 - 12.00% [source: Mongol Bank]
December 22, 2017 - 11.00% [source: Mongol Bank]
March 23, 2018 - 10.00% [source: Mongol Bank]
November 27, 2018 - 11.00% [source: Mongol Bank]
March 11, 2019 - 10.00% [source: Mongol Bank]
April 13, 2020 - 9.00% [source: Mongol Bank]
September 14, 2020 - 8.00% [source: Mongol Bank]
November 11, 2020 - 6.00% [source: Mongol Bank]
January 1, 2022 - 6.50% [source: Mongol Bank]

SOVEREIGN CREDIT RATING

Moody’s Fitch S&P
B3     – stable – 16 Mar 2021
B3     – negative – 8 May 2020
B3     – stable – 18 Jan 2018
Caa1 – stable – 30 Mar 2017
Caa1 – neg. watch – 15 Feb 2017
Caa1 – stable – 18 Nov 2016		 B   – stable – 9 Jul 2018
B-  – positive – 17 Nov 2017
B-  – stable – 22 Nov 2016
B   – stable – 24 Nov 2015
B+ – negative – 13 Dec 2013		 B   – stable – 10 Nov 2018
B-  – stable – 19 Aug 2016
B   – stable – 03 Nov 2015
B+ –   neg.  – 29 Apr 2015


CURRENCY RATES –  27 April 2023

Currency     Rate
U.S. dollar USD   3,476.89
Euro EUR   3,841.62
Japanese yen JPY   25.99
British pound GBP   4,333.07
Hong Kong Dollar HKD      442.92
Russian ruble RUB        42.60
Chinese yuan CNY      502.15
South Korean won KRW          2.59
Copyright © 2023 *Business Council of Mongolia*, All rights reserved.

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BCM NewsWire 779 – 22 April 2023

NEWSWIRE
 

NewsWire

Issue 779 –  22 April 2023

BCM NewsWire provides short summaries of news collected from around the world. Each article is kept to a maximum of 150 words for brevity, but click on the link next to “Source” to read the full article.

Economy

Politics

Business

Global and Regional Trends

BCM Updates

Economic Indicators
 
Sponsors:
 

 
 



 
 

ECONOMY

IMF’S ECONOMIC GROWTH FORECAST LOWERED TO 4.5 PCT

International Monetary Fund (IMF) has estimated that Mongolia’s economy will develop at 4.5 percent in 2023. In the previous estimate, it was expected to expand by 5 percent, but in the April report, it lowered.
IMF lowered its 2023 economic growth forecast for Mongolia by 0.5 percentage points and in addition, the forecast for the growth of the GDP in 2024 has been reduced by 1.5 percentage points, as well. As a result, Mongolia’s economy is expected to grow at 5.5 percent next year.
IMF highlighted the challenge of reducing budget deficits at a time of rising interest rates and rising debt levels in Asia and the Pacific. The amount of government debt in the region has increased significantly since before the pandemic.
Most governments are expected to cut their budgets this year and next. However, it warned that this may not be enough to stabilize the debt.

Source: The UB Post

WORLD BANK: MONGOLIA’S ECONOMY TO ACCELERATE IN 2023, BUT REFORMS AND DIVERSIFICATION NEEDED TO SUSTAIN GROWTH

Mongolia’s economy is projected to accelerate to 5.2 percent growth in 2023 from 4.7 percent in 2022 as mining and exports expand and the post-pandemic recovery in services continues.
Growth is also anticipated to be supported this year by household consumption, which is expected to remain steady as the labor market improves, along with substantial public investment, according to the World Bank’s latest Mongolia Economic Update. Services, particularly tourism, are projected to continue recovering from restrictions associated with the pandemic, offsetting sluggish agricultural production due to the recent harsh winter.
However, labor force participation remains below its pre-COVID level. In addition, high inflation, debt, increasing fiscal risks, external sector imbalances, and over-reliance on the mining sector pose challenges to the economy.
Economic growth is expected to accelerate to above 6 percent in 2024-2025 as mining production increases. Nevertheless, reforms to promote economic diversification remain critical to sustaining growth and building resilience to domestic, external, and climate shocks.

Source: World Bank
View the Mongolia Economic Update

EXPORT INCREASED BY 96 PERCENT COMPARED TO THE SAME PERIOD OF THE PREVIOUS YEAR

In the first quarter of 2023, Mongolia traded with 125 countries from all over the world, and the total   trade turnover reached USD 5.7 billion, of which exports were USD 3.8 billion and imports were USD 1.9 billion. The total foreign trade turnover increased by USD 2.1 billion (57.9%), where exports increased by USD 1.8 billion (96.0%) and imports increased by USD 248.9 million (14.7%) compared to the same period of the previous year.  In March2023, exports increased by USD 354.7 million (30.4%) and imports increased by USD 231.3 million (45.3%) compared to the previous month.
The foreign trade balance was in surplus of USD 1.8 billion in the first quarter of 2023 and increased by USD 1.6 trillion (7.  9 times more) compared to the same period of the previous year. In March 2023, Trade balance was in surplus of USD 779.1 million, increased by USD 123.4 million (18.8%) from previous month.

Source: NSO

APARTMENTS IN UB: PRICE RATIO HIGHER THAN IN NEW YORK OR SAN FRANCISCO

The cost-of-living crunch is hitting people all over the world, but there’s no doubt the Mongolians have it hard. Over the past two years, inflation in the country has been in the double digits. It moved as high as around 16 percent in 2022.
The average salary, meanwhile, is approximately USD 450 per month, with a low-level manager on average expected to make toward USD 480. Apartment rentals cost around USD 200 to USD 500 per month.
Among Mongolians there is a tremendous variance in income, with the minimum wage only USD 142 per month. Apartments in Ulaanbaatar are extremely expensive. The price ratio is now 10.8 times the average annual disposable income. And, where 90 square metres is considered as the size of a normal apartment in much of the world, the Mongolian government mortgage programme only provides attractive mortgages for apartments of up to 80 sqm. If you use the 90 sqm figure, then the ratio becomes 11.99 times the average disposable income.

Source: News.mn

TAVAN TOLGOI POWER PLANT TO BE PUT INTO OPERATION IN TWO PHASES

After Wednesday’s parliament meeting, the minister of the sector announced that the Tavan Tolgoi Thermal Power Plant, which will be built based on the Tavan Tolgoi coal deposit, will be divided into two phases, 300+150 MW, and the first stage will be 300 MW. The Minister of Energy was assigned to negotiate and supervise the implementation of the project by receiving applications of all types of financial methods for project financing, cooperation with banking and financial institutions, joint construction and financing of the project (EPC+F), selection of financial proposals with open conditions that do not limit the financing options of the bidder, and to sign contracts with the financiers.
The board of directors of Erdenes Tavan Tolgoi was instructed to finance 30 percent of the EPC+F contract for the 300 MW phase I of the project, be responsible for the operating costs of the Tavantolgoi Thermal Power Plant LLC…

Source: The UB Post

HOW WILL MONGOLIA'S TRANSITION TO COAL AUCTIONS AFFECT CHINESE BUYERS?

*Mongolia to sell 12 mnt via auctions by Jul'23
*Coal prices may decrease on reduced transportation costs
*Weak demand in China to impact auction prices
In a bid to ensure transparency and stop pilferage, the Mongolian government is moving to an auction system for coal sales which will replace the long-term contracts favoured by Chinese buyers.
China is the top buyer of Mongolian coal accounting for 94% of Mongolia's coal exports in 2022. Total export shipments came in at 31.69 million tonnes (mnt) in 2022, surging 101.72% or 15.98 mnt y-o-y, as per data maintain CoalMint.
In 2022, Mongolia had a share of 18% in China's coal imports, according to data maintain with CoalMint. China is by far the biggest buyer of Mongolian goods. Coking coal imports from its northern neighbor amounted to nearly 26 mnt last year-40% of total purchases.

Source: CoalMint.com

GROSS INDUSTRIAL OUTPUT INCREASED BY 12.7 PCT FROM THE PREVIOUS MONTH

By the preliminary results, in the first 3   months of 2023, the gross industrial output reached MNT 8.3 trillion, which increased by MNT 4.6 trillion (2.2 times more) from the previous year.  This increase was mainly due to the mining and quarrying production output increase by MNT 4.2 trillion (2.8 times more) and the manufacturing production output of 212.5 billion (24.8%), respectively.
By the preliminary results, in the first quarter of 2023, the mining and quarrying gross output reached MNT 6.6 trillion, which increased by MNT 4.2 trillion (2.8 times more) from the previous year.  This increase was mainly due to increases in coal and lignite mining by MNT 3.4 trillion (9.3 times more) and mining of metal ores by MNT 510.5 billion (27.0 %) from the previous year.

Source: NSO

AMEP: ASSESSMENT OF PAST AND ONGOING COMMUNITY ENGAGEMENT AND OUTREACH ACTIVITIES RELATED TO THE EXTRACTIVES SECTOR IN MONGOLIA 

AMEP 2 introduces a final report of the "Assessment of past and ongoing community engagement and outreach activities related to the extractives sector in Mongolia" within the implementation of the activity "Making Mining Valuable". 
Please click here to see the activity report. 
Click here to view in Mongolian.

Source: Australia-Mongolia Extractives Program

MONGOLIA RECOGNIZED AS ONE OF THE SAFEST ASIAN COUNTRIES FOR WOMEN

Mongolia was among TOP-3 countries among Asian countries in the Women, Peace and Security Index 2023 (WPS Index 2023). The country is on the 3rd place after South Korea and Japan.
Mongolia scored 10.7 percent in the average duration of school education among women indicator, 60.4 percent in the employment of women, 100 percent in the usage of smartphones by women, 95 percent in financial security of women, 17.3 percent in women’s representation in parliament, 8 percent in discriminatory norms, 1.03 percent in preference of sons (birth rates ratio between men and women), 82.5 percent in the lack of legal discrimination, 0 percent in organized violence (the number of deaths in armed conflicts per 100,000 people), 46.4 percent in the perception of social security of women, and 12% in current partner abuse.
Mongolia is on the 54th place among 170 countries.

Source: News.mn

NATIONAL PRECIOUS METALS FORUM HELD

The National Precious Metal Forum was held on April 12, 2023, with the aim of making the trade and production sector of precious metals known to the public. The forum, which is being held for the second year, was initiated by the National Association of Precious Metals, and jointly organized by the Financial Regulation Committee and the planet-GOLD Mongolia project.
In the first part of the forum, presentations were made on topics such as problems in the precious metals industry, gold trade, transparency of origin, small-scale mining and ore processing activities, and solutions to them, and relevant information from the Financial Regulatory Committee and the Ministry of Culture were distributed to the participants of the forum. planet-GOLD Mongolia project also discussed the report on “Current situation and registering the origin of gold by small-scale mining”.

Source: The UB Post

B.ULAANKHUU: TO DEVELOP HEALTH SECTOR, WE NEED TO HAVE GOOD INSURANCE SYSTEM - INTERVIEW

In today’s edition, we talked to Dr. B.Ulaankhuu, one of the Mongolian citizens living and working in Turkey. He is a cardiologist and a doctor of immunology. He has been working in the “Acibadem” hospital in Turkey for many years, contributing to ensure people healthy in Turkey.
What do you think needs to be improved in the Mongolian health sector right away?
It is necessary to have a good healthcare system that is accessible to everybody and to keep and protect the health-related information of the person in chronological order. Second, the length of post-graduate education at the university should be brought up to global standards. Of course, the national and international private healthcare system should be active in Mongolia, and the government should constantly invest in its citizens’ health. It is also important to increase citizens’ knowledge and understanding of health and to provide accessible and highly professional preventive care and services.

Source: The UB Post

ARE CITIZENS WITH ECO CAR SUPPORTED, OR NOT? - INTERVIEW

Recently, the use of environmentally friendly and cost-effective electric cars has been increasing rapidly. Mongolia first started using electric trolleybuses in 1988. Currently, as of the first quarter of 2023, there are 632 electric vehicles registered in Ulaanbaatar, 77 in local areas, and a total of 709 electric vehicles in the state vehicle registration fund. Head of the Vehicle Registration Department of the National Center for Transport N.Byambadorj clarified about the use of electric vehicles, “In recent years, there is a steady trend of the number of electric vehicles increasing. For instance, in 2021, 97 new vehicles were registered, while last year it increased to 208.  Most of the vehicles were imported from China and Japan. There are 68 domestically assembled and manufactured electric vehicles. Of the total electric vehicles, 525 are passenger cars, 131 are buses, 12 trucks, 35 mechanisms, five motorcycles, and two special purpose vehicles.

Source: The UB Post

UNCERTAIN FUTURE OIL PROSPECTS DUE TO THE RUSSIA-UKRAINE WAR - EDITORIAL

The energy sector seems to be the “winner” in the war between Russia and Ukraine. In any case, oil and natural gas producers proudly report record profits for their investors.
For example, Shell, a company listed on the London Stock Exchange, announced that 2022 was the most profitable year in its history. Last year they “pocketed” $40 billion in net profit. Speaking of their success, they said, “The Russian-Ukrainian conflict led to higher prices in the energy sector, doubling the profit margin and providing investors with unexpectedly high returns”. In fact, it doubled last year’s net income.
It was a good performance not only for energy investors but exceeded the expectations and estimates of independent analysts. Prior to that, the company made a profit of $31 billion in 2008, its most profitable year.
Not only Shell, but its competitors broke the news that they had doubled their revenues and profits compared to previous years.

Source: Mongolian Mining Journal

POLITICS

POLISH PRESIDENT TO PAY A STATE VISIT TO MONGOLIA

Polish President Andrzej Sebastian Duda  will pay a state visit to Mongolia at the invitation of President of Mongolia U.Khurelsukh on 24-26 April.
During the visit, two sides will hold official talks and discuss broad issues related to traditional friendly relations and cooperation between the two countries, as well as some issues of international affairs.
Also, cooperation possibilities­­­ with Poland in the implementation of Mongolia’s long-term development policy "Vision 2050," and mid-term "New Revival Policy," and the Programs "Food Supply and Safety," and "President’s Scholar- 2100" and National Movement "Billion Trees" will be discussed.
It is planned to sign an Intergovernmental Agreement on International Road Transport Relations, as well as cooperation documents in the fields of trade, investment, science, archives, geology, and veterinary service.
Duda was elected as the President of the Republic of Poland in 2015 and re-elected in 2020. The latest presidential visit from the Republic of Poland to Mongolia since 1990 was the visit of President Bronislaw Komorowski in 2013.

Source: News.mn

UPDATED DRAFT OF THE INVESTMENT LAW IS AVAILABLE FOR COMMENTS AND RECOMMENDATIONS

Revision on the Law on Investment was developed within implementing the objectives and measures in improving the investment environment in the long-term development policy of Mongolia "Vision-2050", "New Recovery Policy", "Action Program of the Government of Mongolia for 2020-2024".
Please look into the draft and submit your comments and recommendations to This email address is being protected from spambots. You need JavaScript enabled to view it..
1. Draft Revision on the Law on Investment - (Mongolian) Download
    - Draft Revision on the Law on Investment - Unofficial translation Download
2. Draft Amendment to the Relevant Laws - (Mongolian) Download
    - Amendment to the Relevant Laws - Unofficial translation Download
 

Source: Ministry of Economy and Development

PRIME MINISTER MEETS US UNDER SECRETARY OF STATE

On April 19, Prime Minister L. Oyun-Erdene received Under Secretary of State for Political Affairs of the United States of America Victoria Nuland.
Prime Minister L. Oyun-Erdene stressed that the Government of Mongolia attaches high significance to its relations with the USA as an important third neighbor, and expressed Mongolia's interest to consolidate the Strategic Partnership further based on common democratic values, to expand and develop mutually beneficial cooperation, particularly, to increase trade and investment, and cooperate in the fields of creative cultural production and digital transformation.
Under Secretary of State for Political Affairs Victoria Nuland spoke that the USA is proud of being an important third neighbor of Mongolia, and the US prioritized consolidating the partnership relations grounded on democratic values, which cherish human rights and freedoms, and further expand cooperation in the fields of trade, economy, investment, and anti-corruption.

Source: Montsame, U.S. Embassy
See also: USAID Announces Five-Year Strategy for Mongolia

DRAFT LAWS ON ELECTIONS AND POLITICAL PARTIES UNDER DISCUSSION

Speaker of Parliament G. Zandanshatar met with representatives of lawyers and scholars on April 18 to discuss changes and amendments to the Draft Law on Elections of the State Great Khural of Mongolia and the revised Draft Law on Political Parties.
At the beginning of the meeting, Speaker of the Parliament G. Zandanshatar emphasized the importance of the amendments to the Law on Elections of the State Great Khural and the Law on Political Parties to animate the 2019 amendments to the Constitution of Mongolia and implement legal reforms. Working groups designated to prepare draft laws for parliamentary discussion will be set up this week and persons concerned are invited to take part.  
Legislative reform is expected to be made through changing the "Money" election, strengthening the internal democracy of parties, and making the financing of political parties transparent.

Source: Montsame

OECD: MONGOLIA COMMITS TO START AUTOMATIC EXCHANGE OF FINANCIAL ACCOUNT INFORMATION BY 2026

Mongolia has committed to implement the international Standard for Automatic Exchange of Financial Account Information in Tax Matters (AEOI) by 2026. The AEOI standard is being implemented on a global scale, with 123 of the 167 members of the Global Forum on Transparency and Exchange of Information for Tax Purposes (Global Forum) now committed to start automatic exchanges by a specific date and the vast majority having commenced exchanges.

"I am delighted to announce Mongolia's commitment to implementing automatic exchange of information standards beginning in September 2026, which will significantly improve our ability to combat tax evasion and promote transparency in our financial system,” said Mr Javkhlan Bold, Minister of Finance of Mongolia. “This is an important step in providing a level playing field for all taxpayers and showcasing Mongolia as a responsible and trustworthy member of the global financial community."

Source: OECD

DIRECT FLIGHTS TO UK DISCUSSED

As part of the liberalization of air transport, the Government has been working toward launching direct flights to the main air transport regions of the world in 2023-2024 and plans to conclude air service agreements with 10 countries.
Minister of Road and Transport Development S. Byambatsogt met with the British Prime Minister’s Trade Envoy to Mongolia Daniel Kawczynski and Ambassador Philip Malone on April 13 and exchanged views on development tendency in the fields of air transport, railways and roads, and expansion of cooperation between the two countries.
Minister S. Byambatsogt expressed his gratitude to the Government of the United Kingdom of Great Britain and Northern Ireland for paying special attention to its economic cooperation with Mongolia and sending the Prime Minister's Trade Envoy to increase trade turnover between the countries and voiced his desire to expand the cooperation in the future.

Source: Montsame

POLITICAL CONSULTATIVE MEETING OF MONGOLIA AND CROATIA

The Political Consultative Meeting between the Ministry of Foreign Affairs of Mongolia and the Ministry of Foreign and European Affairs of the Republic of Croatia was held on April 17 in Zagreb.
The meeting was co-chaired by the State Secretary of the Ministry of Foreign Affairs of Mongolia N. Ankhbayar on the Mongolian side, and Frano Matušić, the State Secretary of the Ministry of Foreign and European Affairs of the Republic of Croatia, and Petar Mihatov, the Directorate-General for Political Affairs on the Croatian side.
During the meeting, the sides discussed the current state of relations and cooperation between Mongolia and Croatia and other cooperation opportunities in politics, economy, education, culture, transportation, and environment. Highlighting the importance of joint commitments against climate change, the Croatian side presented and handed over the draft “Memorandum of Understanding to Cooperate in Forest sector” to the Mongolian side.

Source: Montsame

CHINA, MONGOLIA INK COOPERATION DOCUMENT ON GDI IMPLEMENTATION

On April 17, Luo Zhaohui, chairman of the China International Development Cooperation Agency (CIDCA), signed a cooperation document with Khurelbaatar, deputy prime minister and minister of the economy and development of Mongolia, on the implementation of the Global Development Initiative (GDI), during his visit to the United Nations headquarters in New York.
The two sides also exchanged views on deepening China-Mongolia relations, the GDI's implementation, and specific cooperation projects.
Head of the CIDCA's Global Development Promotion Center Tang Ying, Deputy Director-General of the CIDCA's Department of Policy and Planning Li Ming, and Permanent Representative of Mongolia to the United Nations Vorshilov Enkhbold also attended the meeting. 

Source: CIDCA.gov.cn

INTERVIEW: MONGOLIA VOWS TO BREAK ITS CORRUPTION HABIT

Mongolia has vowed to resolve its deep-rooted corruption problems, a response to the thousands of angry protestors who tried to storm the parliament last December while calling for an investigation into a US$1.8 billion coal theft case.
The Mongolian Independent Authority Against Corruption (IAAC), an independent government body, announced on April 12 that it had unveiled a national strategy to combat corruption in the public sector and set 10 related goals to achieve by 2030.
The mineral-rich nation will seek help if needed from China, which accounts for more than 80% of its total exports, for information about officials or company executives who may have absconded.
“This coal theft case is a very big case, involving more than 200 people,” Khishgeegiin Nyambaatar, Mongolia’s Minister of Justice and Internal Affairs, told Asia Times in an exclusive interview. Those suspected range “from members of the parliament and officials of the customs and tax authority to transportation and mining company executives,” he said.

Source: The Asia Times

HOW MONGOLIA’S GOBI DESERT BECAME A CRITICAL ENVIRONMENTAL BATTLEGROUND - EDITORIAL

When Mongolian Prime Minister Oyun-Erdene Luvsannamsrai arrived at the Musical Drama Theatre in Dalanzadgad soum to meet with local citizens in May, tensions ran high. Citizens had come to the meeting from all over Umnugovi, Mongolia’s southernmost province, armed with slogans and banners, some of which said: “We will never have our sandy Gobi back,” “Let’s leave our homeland to our next generation,” and “Mongolia with unbroken doors!”
Umnugovi residents had prepared for the meeting since 2019, when the central government approved the construction of two heavy-duty roads and a new border crossing with China in the south of the province for freightage of coal. The roads would cut through herding regions and pass very close to a national reserve in the Gobi desert region that enjoys strict environmental protection. Crucially, the new roads and border checkpoint would allow companies owning about 70 mining licenses to start operations in the province.

Source: Global Press Journal

COAL SMUGGLING TRAINS THE MONGOLIAN PUBLIC’S EYE ON SYSTEMIC CORRUPTION - EDITORIAL

Mongolia has substantial coal deposits across the country. Coal is an important source of government revenue alongside mineral exports from mega mines such as Oyu Tolgoi and the Erdenet copper mine. But in September 2022, a coal scandal began to unfold in Mongolia’s capital city of Ulaanbaatar.
Multiple disclosures were made regarding corruption and conflicts of interest associated with the state-owned coal company, Erdenes-Tavan Tolgoi JSC. Then in October 2022, the Mongolian government revealed that coal was being illegally transported across the Chinese border without customs registration. This coal smuggling was allegedly directed by individuals in high-level government positions. Mongolia’s new national opposition political party, the HUN Party, calculated that the total loss of potential revenue to the Mongolian government was equivalent to an estimated 40 trillion Mongolian tugrik (US$13 billion). The Mongolian government did not officially confirm this figure.

Source: East Asia Forum

DR. FERNANDO CASAL BERTOA: ELECTORAL SYSTEM SUPPORTING POLITICAL PARTIES SHOULD BE ADOPTED - INTERVIEW

We interviewed Associate Professor of the School of Politics and International Relations of the University of Nottingham, Fernando Casal Bertoa during the two-day international forum named “Pledge for Equal Representation in Decision-Making”, which took place last week, to talk about the regulations of Mongolia related to election quotas, internal democracy of political parties and electoral system.
At the event, experts and researchers from Bosnia and Herzegovina, Latvia, Nepal, the USA, and Spain as well as representatives of political parties, civil society and media, discussed political party leadership for gender equality and legal reforms to ensure gender equality at the decision-making level. They mainly exchanged views on improving the legal environment, strengthening support mechanisms, and especially increasing the role and leadership of political parties.
Dr. Fernando Casal Bertoa was a Nottingham Research Fellow working on “The Institutionalization of European Party Systems: Explaining Party Competition in 48 Democracies (1848-2016)”.

Source: The UB Post

BUSINESS

REGISTRATION FOR THE POLISH-MONGOLIAN BUSINESS FORUM FOR COMPANIES FROM MONGOLIA, 25 APRIL 2023

The Polish Investment and Trade Agency invites you to participate in the Polish-Mongolian Business Forum, which will take place on April 25, 2023. in Ulaanbaatar.
Only fully completed forms will be accepted. Please also make sure that the email address you provided is correct.
Applications will be accepted until April 21, 2023 Participation in the Forum is free of charge, but the number of places is limited.
The organizer reserves the right to end the acceptance of applications early or reject applications that do not correspond to the nature of the event.
If you have additional questions, please send them to the following e-mail address: This email address is being protected from spambots. You need JavaScript enabled to view it..

Source: Polish Investment and Trade Agency

HEAD OF KHUTUL CEMENT AND LIME RESPONDS TO STRIKE

L Naranbaatar, the head of Khutul Cement and Lime, has responded to a strike at the company by outlining changes made since it was nationalised in 2022. Workers are protesting with demands to add wage incentives and to appoint managers from within the company, according to the UB Post newspaper. They have also alleged that the company is spending its budget illegally.
During a press conference Naranbaatar explained that the company produced 403,000t of cement in 2022, an increase from 2021. It reported a profit of US$3.3m in 2022, the first time it had made a profit in the last decade. However, the producer’s wage bill nearly doubled to just below US$6m in 2022. The company also spent US$2.25m on upgrades to the plant in 2022, the first such investment made in five years, compared to US$171,000 spent on maintenance in 2021.

Source: GlobalCement.com

FRC: SCALING PUBLIC-PRIVATE COOPERATION TO ADVANCE INCLUSIVE GREEN FINANCE

Mr Bayarsaikhan Dembereldash (Chairman, Financial Regulatory Commission of Mongolia) is participating in the Public-Private Dialogue (PPD)  on "Scaling Public-Private Cooperation to Advance Inclusive Green Finance” conducted by the Alliance for Financial Inclusion (AFI). This PPD is being held on the sidelines of the International Monetary Fund and World Bank Group Spring Meetings in Washington DC, USA.
In recent years, countries have increasingly focused on promoting green finance to mitigate climate change. Activities include, among other things, introducing a concept of a sustainable finance market into national development strategies and developing regulatory tools such as climate-related financial risk management guidelines, disclosure guidelines, green taxonomies, and bank stress tests. However, the risks and opportunities of climate change are not equally distributed. Many developing and emerging economies are today facing the impact of climate change and are expected to disproportionately face higher climate risks, with fewer instruments to manage them. 

Source: FRC, The UB Post

HORIZON COPPER ANNOUNCES FINANCING TERMS AND PROVIDES UPDATE ON SANDSTORM TRANSACTION CLOSING

Horizon Copper Corp. is pleased to announce additional details regarding its proposed financing of US$20 million pursuant to the second part ("RTO Part B") of the previously announced reverse takeover transaction with Sandstorm Gold Ltd. ("Sandstorm") whereby Horizon will acquire a 1.66% net profits interest on the low-cost, high-grade Antamina copper mine (the "Antamina NPI").
The financing (the "RTO Part B Financing") is expected to be completed via a combination of a non-brokered private placement financing and the issuance of a convertible debenture. The proceeds from the RTO Part B Financing will be used to satisfy the US$20 million cash component (the "Cash Consideration") payable to Sandstorm to complete the acquisition of the Antamina NPI.
The private placement portion (the "Private Placement") of the RTO Part B Financing will be completed through the issuance of subscription receipts at a price of C$0.80 per subscription receipt (the "Subscription Receipts"). 

Source: Newswire.ca

SOUTHGOBI ANNOUNCES PRIMARY LISTING ON THE MAIN BOARD OF THE HONG KONG STOCK EXCHANGE

SouthGobi Resources Ltd. Reference is made to the announcement of SouthGobi Resources Ltd. (Hong Kong Stock Exchange: 1878; TSX Venture Exchange dated April 4, 2023. The Company, which is focused on the exploration, development and production of its coal deposits in Mongolia's South Gobi Region, announced that the change of its secondary listing status to primary listing on the Main Board of the Hong Kong Stock Exchange became effective today. SouthGobi's common shares are now primary listed on the Hong Kong Stock Exchange and will be listed on the TSX-V as of the opening of trade on April 17, 2023 in Canada. The Company's trading symbol on the Hong Kong Stock Exchange and the TSX-V will remain as "1878" and "SGQ", respectively.
Mr. Mao Sun, the Lead Director of SouthGobi, commented, "With SouthGobi's shares listed on the TSX-V, the Company's current operational and financial position can be better accommodated…”

Source: DigitalJournal.com

TMK RAISES CASH TO CHASE MORE GAS IN MONGOLIA

Perth-based oil and gas explorer TMK Energy has raised nearly $6 million from sophisticated and institutional investors to accelerate and expand its exploration drilling program at its promising coal seam gas project in Mongolia’s South Gobi Basin.
TMK is reporting firm commitments for $5.7 million, before costs, by way of a private placement and says the move is strongly supported by new and existing sophisticated and institutional investors in addition to its own board members.
Company director Professor John Warburton subscribed for four million shares, with fellow director Tim Wise taking up 1.5 million – with both packages subject to shareholder approval at the company’s annual general meeting next month.
TMK will issue more than 393 million shares at an issue price of 1.45 cents per share, representing a 19.4 per cent discount to the company’s last traded share price before it went into a trading halt on Tuesday.

Source: The West Australian, Stockhead
See also: Pilot programs and high contingent resources put Mongolia on the map

FRC: JOINT FORUM WITH PARTICIPANTS IN THE OVER-THE-COUNTER (OTC) MARKET

To determine the current state of the OTC market, and identify appropriate measures to be taken, the management of the Mongolian Association of Securities Dealers and authorized officials of underwriting companies in the market, participated in discussion organized on 12 April 2023.
Relevant officials of the FRC provided presentations and information to the participants; about the control and regulation of the OTC market, and the current situation.
As a result of the discussion:

  • information - about the OTC market – was provided to the public, relating to the creation of a unified market database,
  • underwriting companies (participating in the OTC market) were advised to pay attention to fulfilling the legal obligations of issuers and professional investors, and
  • it was decided to quickly implement measures; such as: establishing a unified standard for publicizing investment and bond information offered by the issuer and developing proposals.

Source: FRC

STATEMENT OF "BADRAKH ENERGY"

On April 10 and 13. 2023, NGOs Forum Asia, and Center for Human Rights and Development organized press conferences respectively in Ulaanbaatar and Sainshand cities, presenting the results of their so-called “Dreams Fading into Dust” Assessment, conducted in 2022 in Dalanjargalan, Khatanbulag and Ulaanbadrakh soums of Dornogovi aimag.
Badrakh Energy LLC, a joint company between the Mongolian state-owned Mon-Atom LLC and Orano Group of France, regrets that this so-called Assessment is, in addition to not having based on fact-checked evidence, distorts facts, unprofessional, it disregards the position, research and information of other stakeholders, and is based solely on information that are baseless hearsay from a few people, with its contents amounting to an attempt to instill fear in the public regarding exploration and mining of uranium.
The claims made by the above NGOs in the press conferences not only serve as an unfounded accusation against our joint company, but by containing clearly false information…

Source: Montsame

MONGOLIA’S SATELLITE INTERNET REVOLUTION: STARLINK’S ARRIVAL

Mongolia is on the verge of a technological revolution. The arrival of Starlink, a satellite internet service provided by Elon Musk’s SpaceX, promises to bring high-speed internet access to even the most remote corners of the country. This development has the potential to transform the lives of millions of Mongolians, connecting them to the global digital economy and bridging the digital divide that has long plagued the nation.
Mongolia’s geographical challenges have historically made it difficult to establish reliable internet infrastructure. With a population of just over 3 million people spread across an area larger than Western Europe, providing internet access to everyone has been a daunting task. Traditional methods of internet delivery, such as fiber-optic cables and cellular networks, are often impractical or too expensive to deploy in the vast rural areas of the country. As a result, many Mongolians have been left without access to the digital world, limiting their opportunities for education, healthcare, and economic growth.

Source: TS2.space

ATMOR LLC BECAME OFFICIAL DISTRIBUTORS FOR BRUGG GROUP

ATMOR LLC providing engineering solutions for ventilation, sanitation and piping systems since 2003. With our 20years experience we also introducing new innovations. To pursue our purpose, we signed distribution contract with BRUGG Group. With 4 divisions, 19 production and 32 sales offices,1800 employees of BRUGG Group offered innovative solutions for infrastructures worldwide. Both companies will be participating Build Mongolia 2023 exhibition to introduce 2 products dedicated for the mining industry.
Contact us:
Address: Bayangol district, Baruun zam Rokmon building center № 202
Tel: 976-77074380, 89854380
E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.
Web site: www.atmor.mn

Source: Mongolian Mining Journal

RARE AND EMERGING OPPORTUNITIES IN THE CRITICAL MINERALS INDUSTRY - EDITORIAL

As I participate in the Future Mineral Forum (January 2023) being held for the second time in Riyadh, Saudi Arabia, I ponder the process of how new countries enter the global market and find their place. How do they connect to the global market and what challenges must they overcome? Additionally, I question the timing of when and how opportunities open and close in this industry.
I was listening to the speech of Saudi Arabia’s Deputy Minister of Mining Khalid Al-Mudaifer, who invited investors to the mining sector of his country. It was strange for a country that thrives on oil revenues to make such a move, which sparked my interest to study it. At that time, Saudi Arabia was just starting to move into the mining industry, and the reason behind this shift was to counter the risk that the world would shift to a green economy by 2050, resulting in no consumers for its oil, and a potential cut-off of its income.

Source: Mining Insight

GLOBAL AND REGIONAL NEWS

CHILE PLANS TO NATIONALIZE ITS VAST LITHIUM INDUSTRY

Chile's President Gabriel Boric said on Thursday he would nationalize the country's lithium industry, the world's second largest producer of the metal essential in electric vehicle batteries, to boost its economy and protect its environment.
The shock move in the country with the world's largest lithium reserves would in time transfer control of Chile's vast lithium operations from industry giants SQM and Albemarle to a separate state-owned company.
It poses a fresh challenge to electric vehicle (EV) manufacturers scrambling to secure battery materials, as more countries look to protect their natural resources. Mexico nationalized its lithium deposits last year, and Indonesia banned exports of nickel ore, a key battery material, in 2020.
"This is the best chance we have at transitioning to a sustainable and developed economy. We can't afford to waste it," Boric said in an address televised nationwide.

Source: Reuters

CHINA’S ECONOMY GREW 4.5 PCT IN Q1, THE FASTEST PACE IN A YEAR

China’s first-quarter gross domestic product rose sharply while global peers face slowing growth as central banks hike rates to tame inflation.
GDP grew by 4.5% in the first quarter, China’s National Bureau of Statistics said Tuesday. That marks the highest growth since the first quarter of last year — when China’s economy grew by 4.8% — and better than the 4% forecast in a Reuters poll. Quarter-on-quarter, the economy grew 2.2%.
China’s growth has been under the spotlight as it reopens after ending most of its strict Covid restrictions that were in place for nearly three years. The economy expanded 2.9% in the fourth quarter of 2022.
Retail sales jumped 10.6% in March as online sales of physical goods picked up. Industrial output rose 3.9%, slightly lower than Reuters’ forecasts of 4%.
The economy grew 3% in 2022, less than Beijing’s official target of around 5.5% set in March last year.

Source: CNBC

FINANCE LEADERS WARN RISING INTEREST RATES ARE SQUEEZING LOW-INCOME COUNTRIES

Leaders of several global financial bodies warned that rising interest rates are increasing pressure on low-income developing countries, around 60% of which are now in or at high risk of debt distress.
Public debt burdens in developing countries have been exacerbated in recent years by back-to-back global crises, with Russia’s invasion of Ukraine coming on the heels of the Covid-19 pandemic, while many heavily-indebted nations are also dealing with idiosyncratic pressures from climate events or conflict.
Major central banks around the world have tightened monetary policy aggressively over the past year in order to rein in soaring inflation. A lot of the debt accrued by low-income countries is coming due over the next couple of years, however, and rising interest rates mean these countries will find it increasingly difficult to meet their repayments.
The International Monetary Fund and the World Bank have established a host of relief measures in recent years.

Source: CNBC

GOOGLE, META LIFT AI STAKES IN ASIA AMID CHATGPT HYPE

Asia's artificial intelligence race is heating up, with U.S. tech giant Google and rival Meta, operator of Facebook, developing AI tools in a battle for regional clout amid a rush for ChatGPT-type applications.
As an advertising slump clips the earnings of the tech titans, the two companies see AI as a means to shore up services for their user bases in the region, with the Microsoft-backed chatbot ChatGPT capturing the imagination of web surfers through its ability to keenly reply to open-ended queries.
In particular, Google and Meta are leaning into "generative" AI, or systems capable of replying with ideas, text, images or other forms of media in response to human prompts, to build new features into their platforms for customers they serve in Asia.
"We're really excited about, you know, the Asia-Pacific angle, because this is where the largest base of our users are," Dan Neary, Meta's vice president for the region, told Nikkei Asia.

Source: Nikkei Asia

UK INFLATION RATE SURPRISES AGAIN WITH MARCH FIGURE HOLDING ABOVE 10 PCT

U.K. inflation unexpectedly remained in double-digits in March as households continued to grapple with soaring food and energy bills.
The consumer price index rose by an annual 10.1%, according to the Office for National Statistics, above a consensus projection of 9.8% in a Reuters poll of economists.
This is a slight dip from the unexpected jump to 10.4% of February, which broke three consecutive months of declines since October’s 41-year high of 11.1%.
On a monthly basis, CPI inflation was 0.8%, above a Reuters consensus of 0.5% and down from the 1.1% of February.
The Consumer Prices Index including owner occupiers’ housing costs (CPIH) rose by 8.9% in the 12 months to March 2023, down slightly from 9.2% in February but well above expectations.
Core CPIH, which excludes volatile food, energy, alcohol and tobacco prices, rose by 5.7% over the 12 months, unchanged from February’s annual climb — which will be a concern for the Bank of England.

Source: CNBC

EVS ON PACE TO MAKE UP THIRD OF CHINA'S AUTO SALES THIS YEAR

Electric vehicles were the stars of Auto Shanghai 2023, one of the world's biggest auto shows that opened on Tuesday, reflecting just how rapidly China is adopting the transformative technology.
Sales of new energy vehicles, a category mostly consisting of EVs, are on track to reach 9 million units this year, about a third of total auto sales.
"This year will have new energy vehicles rising close to 10 million units, and their volume in 2035 will be at least 25 million units and they will account for 80% of all new vehicles sold," said Ouyang Minggao, professor of automotive engineering at Tsinghua University in Beijing.
China is both the largest auto and electric vehicle market in the world, home to an estimated 200 EV manufacturers. Sales of all new vehicles are projected to grow 3% this year to 27.6 million units, according to the China Association of Automobile Manufacturers.

Source: Nikkei Asia
See also: As EV costs tumble in China, an export wave builds
BYD eyes overtaking Tesla this year as world's top EV maker

SOUTH KOREA LOOKS TO FOREIGN WORKERS TO SOLVE DEMOGRAPHIC CRISIS

With South Korea's fertility rate falling at the world's fastest pace and 280 trillion won ($212 billion) or so in government spending over the past 15 years doing little to arrest the decline, one of the world's most ethnically homogenous nations is now recruiting more workers from overseas.
At least partly because of the fertility crisis, one expert predicts that populous Indonesia and Nigeria will overtake South Korea in terms of economic size by 2050, pushing the East Asian nation out of the group of the 15 biggest economies. Another pessimistic view has it that South Korea might disappear as a nation by 2750 if the number of children continues to fall at the current pace.
Despite the hundreds of billions of dollars spent trying to engineer a reversal, the country's birthrate continues to fall, with the average number of children a South Korean woman gives birth to during her lifetime hitting a record low of 0.78 in 2022.

Source: Nikkei Asia

TIGHTEST SUPPLY IN 18 YEARS BOOSTS COPPER AHEAD OF INDUSTRY SHOW

The copper industry isn’t letting tightening credit and slowing growth kill the buzz heading into one of its biggest annual gatherings.
Underpinning the quiet confidence of executives, bankers and traders drifting into the Chilean capital for Cesco Week are the lowest stockpiles of the metal in 18 years — standing at less than a week’s worth of consumption. It’s a measure that speaks to China’s reopening and supply-side stumbles and is a big reason why prices have held up better than most to the uncertainties sweeping through global markets.
“In terms of near-term outlook, I can say that demand for our production continues to be strong,” Richard Adkerson, chief executive officer of top publicly traded producer Freeport-McMoRan Inc., said in an interview.
The longer-term outlook is even more auspicious, with CRU Group, the consulting firm running the main conference in Cesco Week, predicting copper will move above $10,000 a ton from about $9,000 now.

Source: Mining.com
See also: Big copper deals to take centerstage in Santiago as demand heats up
Copper industry warns of looming supply gap without more mines

ARGENTINA LITHIUM EXPORT VALUE JUMPS 133 PCT IN FIRST QUARTER

Argentina exported $233 million in lithium in the year’s first three months, a 133% increase from the same period last year, the country’s mining secretary said in a report Tuesday.
Exports of the white metal reached a monthly best in March, with sales jumping 93% from March 2022 to reach $91 million. Lithium represented 27% of all of Argentina’s mining exports last month.
The top destinations for Argentine lithium in the first quarter were China (31%) and Japan (31%), followed by the U.S. (13%) and South Korea (12%).
Argentina’s mining secretary reports 38 operating lithium projects, but the only ones currently producing are the Salar de Olaroz mine in the Jujuy province, whose majority shareholder is Australia’s Allkem Ltd, and Catamarca province’s Fenix mine, a property of the American Livent Corporation.
Agriculture powerhouse Argentina has been offering tax breaks and security guarantees to lure global mining firms to invest in lithium…

Source: Reuters

THESE ASIA-PACIFIC CENTRAL BANKS HAVE PAUSED RATES FOR NOW. WHO COULD BE FIRST TO CUT?

One by one, countries in Asia-Pacific are putting a pause on their tightening cycles this year after central banks around the world tried to keep pace with the U.S. Federal Reserve’s aggressive rate hikes in 2022.
While inflation in the region remains well above central bank targets, the problem of balancing economic growth and the depreciating currencies — as a result of the U.S. dollar peak in September — appears to be easing for now.
The dollar index is broadly weaker now on expectations the Fed could soon end its tightening cycle. Inflation is also seen to be less sticky in the region compared to the U.S. and Europe — BofA economists led by Helen Qiao said inflation in Asia’s emerging markets has already “peaked out and started to moderate in the region.”
In fact, economists say some central banks may have already reached the end of their tightening cycles and could begin to shift their focus to what will stimulate growth through rate cuts.

Source: CNBC

 

 

 

 

BCM QUARTERLY REPORT, Q1 2023

The Business Council of Mongolia delivers you its First Edition of the BCM Quarterly Report of 2023. The first edition covers all events organised by the BCM through the months of January - March. The fuller version of the articles can be found in the highlighted "details" part on the report.

PDF:  2023 First Quarterly Report 

Source: BCM

THE BCM APPOINTS RAPHAËL GOUÉ AS OFFICIAL BCM REPRESENTATIVE IN EUROPE

The Business Council of Mongolia is pleased to announce Mr. Raphaël Goué as an official BCM Representative in Europe.

Raphaël Goué is an expert in energy and banking, having spent more than 12 years in Asia as well as being involved in Europe-Asia cross-border projects since the mid-90s, with a focus on financial services, energy and telecommunications.

Mr. Goué has a wealth of experience in supporting global financial institutions and energy companies in their strategies in Asia, as well their development and M&A. He has previously held various positions in organizations such as Société Générale, Vivendi Universal, Booz & Co and Capital One in Europe, Africa and Asia. As a senior advisor of the global retail banking association EFMA, Raphaël has been supporting the development of banking’s leading association in selected Asian markets, and supporting EFMA in the fintech sector in Europe.

He holds an engineering degree from the École Nationale Supérieure de Géologie in Nancy, France, a master in material science from École de Mines de Nancy, and a MBA from HEC (Paris) he finalized at the Columbia Business School (New York).

The BCM is looking forward to expanding its reach to Europe with Mr. Goué’s leadership and assistance.
 

UNICEF: GUIDANCE FOR EMPLOYERS ON FLEXIBLE WORK ARRANGEMENTS AND OTHER GOOD WORKPLACE PRACTICES IN THE CONTEXT OF COVID-19


A family friendly workplace or employer is one whose policies and practices make it possible for employees and/or workers to more easily achieving work-life balance, and to fulfil both their work and family obligations. These policies may include, but are not limited to, childcare, breastfeeding rooms, flexible work arrangements, paid leave, safe transport, parenting education and so on. 
In Mongolia and various other countries, authorities have enforced kindergarten- and school closure policies as part of the preparedness and response to contain the COVID-19 epidemic. In addition to the impacts on children’s education, there are concerns about children’s protection and well-being as children are left alone or without adequate care as many parents still need to go to work. COVID-19 may also have negative effects on mental health and wellbeing of patients (if any), caregivers, children and adolescents and the public, such as experiencing fear of the consequences of infection with a new virus, and triggering stigma. Those placed in quarantine (or self-isolated) may experience boredom, loneliness, and anger.
By promoting flexible working arrangements such as adjusted working hours, working from home and/or support childcare, your employees will be in better position to address any childcare challenges and not be distracted by concerns about their children’s safety and wellbeing at home.

Click here to view in English.

Click here to view in Mongolian.

UNICEF: CALL FOR ACTIONS OF THE PRIVATE SECTOR TO REDUCE CHILDREN’S EXPOSURE TO AIR POLLUTION IN UB
 
Too many children are at risk of dying in UB due to air pollution each year. In addition to longer-term measures to reduce overall levels of air pollution in Ulaanbaatar, UNICEF recommends that companies address some of their CSR activities in the following ways:
  1. Provision of air purifiers to kindergartens, schools and clinics. Children spend a considerable amount of their time in school. Air purification systems are demonstrated to be effective in reducing air pollution levels within a home or classroom. Recent innovations have made these more affordable, durable and effective. Every classroom should have an air purifier.
  2. Provision of electric heaters to kindergartens, schools and clinics. Electric heaters can help to reduce ambient air pollution. Reducing financial barriers to access can also help improve use of electric heaters.
  3. Improved construction and insulation in kindergartens, schools and clinics. This can help reduce the amount of air pollution that enters facilities where children spend most of their time. It also saves considerably on heating costs. Studies show some improvements can decrease air exchange by up to 40%.
  4. Provision of air pollution monitoring devices in kindergartens, schools and clinics. Monitoring devices are often a first, major step to understanding one’s own risk to air pollution. It can not only inform improved practices to reduce exposure, but it is also an effective mechanism for communities to better understand what is causing air pollution, and when it is particularly harmful.
  5. Improved awareness and behaviour-change campaigns. Low awareness amongst communities about the impacts of air pollution on child health and how to respond is a key barrier to addressing the air pollution crisis. There is a need to influence policymakers, relevant government institutions, businesses, CSOs, development partners, and the general public (including families and children) about the risks that air pollution poses to their health, as well as provide guidance and recommendations on various ways to address some of the most immediate threats.
These actions will reduce children’s exposure to air pollution, safeguarding them from the worst impacts at the same time as building momentum and creating an enabling environment for longer plans that reduce air pollution. UNICEF will provide guidance on these recommendations where possible. UNICEF can also help facilitate connections between actors, agencies and institutions, including schools/ clinics where children are particularly affected. However, in order to maximize efficiency, these projects should be planned, developed, implemented and monitored by the private sector company involved. Nor will any funding go through UNICEF. This helps enhance accountability, and allows private sector donors to be more actively involved in the solution of directly supporting children in UB to breathe cleaner, healthier air.
For more information and guidance, please contact UNICEF for (Amy Wickham, This email address is being protected from spambots. You need JavaScript enabled to view it.; and Sunjidmaa Jamba, This email address is being protected from spambots. You need JavaScript enabled to view it.)
 
BCM GUIDELINE FOR COMPANIES TO COMBAT AIR POLLUTION

Purpose: This Guideline document is to help CEOs and business leaders quickly identify possible actions they can implement in their organizations against air pollution.

Resources for information on Air Pollution

Specific ACTIONS that companies can take NOW:

Educate employees about air pollution; invite guest speakers; encourage employees to share information with friends and family; discuss possible solutions with employees

  • Possible topics: damages and causes of air pollution, protection measures, energy consumption & efficiency; indoor air quality (smoking indoors); breastfeeding & healthy diet; vehicle idling; vehicle maintenance;

Work environment:

  • Improve energy efficiency in building/office to reduce energy consumption;
  • Plant & maintain trees; install air cleansing plants in the office;
  • Install HEPA air filter and air purifiers to tackle indoor air pollution (For an affordable solution, visit http://smartairfilters.com/mn/en/;
  • Install monitoring devices;
  • Smart Air Mongolia masks

Work activities:

  • Ensure company vehicles are well maintained to reduce pollution emissions;
  • Drivers/employees instructed to not idle & to turn off vehicle engine when not moving;
  • Implement carpooling activities;
  • In polluted air, ensure employees wear pollution masks;

Social responsibility:

  • Focus CSR (corporate social responsibility) initiatives to tackle air pollution
  • Tackle air pollution in UB: UNICEF recommends focusing on areas where children are especially affected, and where urgent interventions need to be put in place to protect them as soon as possible. These include the provision of air filtration systems and electric heaters in kindergartens and schools in some of the worst-affected regions. For more information and guidance, please contact UNICEF for (Nicholas Rees, This email address is being protected from spambots. You need JavaScript enabled to view it.; and Sunjidmaa, This email address is being protected from spambots. You need JavaScript enabled to view it.);
  • Run marketing/PR campaigns & contests that raise awareness about air pollution.

List of distributors for pollution masks:

  • BRB – 70119967, 99658555
  • BOX shop – 99062387, 75557007, 90878111 – Facebook: RZ утааны маск
  • CATD LLC – 11327308, 99114346
  • Mmarket – 75758001 – Facebook: Утааны Маск
  • MONOS Pharmacy – 99190858
  • Seven summits – 11317923
  • 3M Mongolia Premier Service - 9400-3088, 9910-3335
  • Utaanii Mask – 99906643 – Facebook: Утааны маск + Агаар шүүгч
  • Cycling World Mongolia LLC authorized distributor of RESPRO pollution masks- 77110444
​MEMBER-TO-MEMBER SPECIAL OFFERS & BENEFITS:
 
- Orchuulga 24 is providing a 15% discount on written translation services to BCM Members
- Ombol LLC is offering free Hepatitis C medication to employees of BCM member organizations, provided that the individual pays into state health insurance.
 

ECONOMIC INDICATORS

HISTORIC ANNUAL INFLATION

Year 2009   *4.2% [source: NSOM]
Year 2010 *13.0% [source: NSOM]
Year 2011 *10.2% [source: NSOM]
Year 2012 *14.0% [source: NSOM]
Year 2013 *12.5% [source: NSOM]
Year 2014 *11.0% [source: NSOM]
Year 2015   *1.9% [source: NSOM]
Year 2016   *1.1% [source: NSOM]
Year 2017   *6.4% [source: NSOM]
Year 2018   *8.1% [source: NSOM]
Year 2019   *5.2% [source: NSOM]
Year 2020   *2.3% [source: NSOM]
Year 2019   *13.4% [source: NSOM]
*Year-over-year (y-o-y), nationwide

CENTRAL BANK POLICY LOAN RATE

December 31, 2008 - 9.75% [source: IMF]
March 11, 2009 - 14.00% [source: IMF]
May 12, 2009 - 12.75% [source: IMF]
June 12, 2009 - 11.50% [source: IMF]
September 30, 2009 - 10.00% [source: IMF]
May 12, 2010 - 11.00% [source: IMF]
April 28, 2011 - 11.50% [source: IMF]
August 25, 2011 - 11.75% [source: IMF]
October 25, 2011 - 12.25% [source: IMF]
March 19, 2012 - 12.75% [source: Mongol Bank]
April 18, 2012 - 13.25% [source: Mongol Bank]
January 25, 2013 - 12.50% [source: Mongol Bank]
April 8, 2013 - 11.50% [source: Mongol Bank]
June 25, 2013 - 10.50% [source: Mongol Bank]
July 30, 2014 - 12.00% [source: Mongol Bank]
January 14, 2015 - 13.00% [source: Mongol Bank]
January 14, 2016 - 12.00% [source: Mongol Bank]
May 6, 2016 - 10.50% [source: Mongol Bank]
August 18, 2016 - 15.00% [source: Mongol Bank]
December 19, 2016 - 14.00% [source: Mongol Bank]
June 15, 2017 - 12.00% [source: Mongol Bank]
December 22, 2017 - 11.00% [source: Mongol Bank]
March 23, 2018 - 10.00% [source: Mongol Bank]
November 27, 2018 - 11.00% [source: Mongol Bank]
March 11, 2019 - 10.00% [source: Mongol Bank]
April 13, 2020 - 9.00% [source: Mongol Bank]
September 14, 2020 - 8.00% [source: Mongol Bank]
November 11, 2020 - 6.00% [source: Mongol Bank]
January 1, 2022 - 6.50% [source: Mongol Bank]

SOVEREIGN CREDIT RATING

Moody’s Fitch S&P
B3     – stable – 16 Mar 2021
B3     – negative – 8 May 2020
B3     – stable – 18 Jan 2018
Caa1 – stable – 30 Mar 2017
Caa1 – neg. watch – 15 Feb 2017
Caa1 – stable – 18 Nov 2016		 B   – stable – 9 Jul 2018
B-  – positive – 17 Nov 2017
B-  – stable – 22 Nov 2016
B   – stable – 24 Nov 2015
B+ – negative – 13 Dec 2013		 B   – stable – 10 Nov 2018
B-  – stable – 19 Aug 2016
B   – stable – 03 Nov 2015
B+ –   neg.  – 29 Apr 2015


CURRENCY RATES –  21 April 2023

Currency     Rate
U.S. dollar USD   3,486.63
Euro EUR   3,819.95
Japanese yen JPY   26.03
British pound GBP   4,322.72
Hong Kong Dollar HKD      444.30
Russian ruble RUB        42.69
Chinese yuan CNY      505.98
South Korean won KRW          2.62
Copyright © 2023 *Business Council of Mongolia*, All rights reserved.

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