ESTABLISHMENT OF AN INTERNATIONALLY RECOGNIZED TRAINING AND ADVANCED TRAINING IN THE FIELD OF WELDING IN MONGOLIA
Schachtbau Nordhausen and Hasu Megawatt want to expand their commitment to minimize the lack of expertise, technology and welding know-how in Mongolia. To this end, under the coordination of GIZ (Deutsche Gesellschaft für Internationale Zusammenarbeit), the public and private partnership named as “Establishment of an internationally recognized training and advanced training in the field of welding in Mongolia” began on November of this year and it will have a total duration of 2 years. In order to achieve the goals of the cooperation, the welding training facilities of Erdenet University of Applied Sciences, the German-Mongolian Welding Center in Ulaanbaatar and the vocational school in Dalanzadgad will be supported in means of the development of a sustainable training and certification system according to German standards. The Mongolian economy will benefit directly from the results of the project due to the high demand for well-trained welding specialist in the market.
EURO KHAN CELEBRATED NEW YEAR PARTY
As we are approaching the end of this year, EK celebrated the early New Year Party on November 27. Our CEO Dr. Oliver Schnorr expressed gratitude to all employees for their effort in making the organization a successful one and bringing it to this position and grateful for painstaking effort in work. We’ve come through a year that was filled with both challenges and victories. We offer our best wishes and happiness to you and your families as we all look forward to a successful year!
ECONOMY
TRADE TURNOVER IN FIRST 11 MONTHS REACH USD 12.6 BILLION, UP 6.6 PCT
In the first 11 months of 2019, Mongolia traded with 150 countries from all over the world and total trade turnover reached USD 12.6 billion, of which USD 7.1 billion were exports and USD 5.6 billion were imports. In November 2019, exports and imports reached to USD 526.9 million and USD 519.3 million, respectively. Compared to the previous month, exports decreased by USD 55.7 million and imports increased by USD 53.5 million.
Total foreign trade turnover increased by USD 787.1 (6.6%) million, of which exports increased by USD 574.8 million (8.9%) and imports increased by USD 212.3 million (4.0%) compared to the same period of previous year. In the first 11 months of 2019, foreign trade surplus reached USD 1.5 billion, which increased by USD 362.6 million from USD 1.1 billion in the same period of 2018. In November 2019, foreign trade surplus reached to USD 7.6 million. Compared to the previous month, foreign trade surplus decreased by USD 109.2 million.
Source: Montsame
MNT SETS HISTORIC LOWS AGAINST USD
The USD rate against MNT has been mounting and reached MNT 2,723.60 on Wednesday following Mongolia’s inclusion in the grey list. Specifically, the tugrik depreciated against the dollar by MNT 21 in only one month, which is the highest in decades.
For the country with a small economy, open foreign trade and dependency on import, the quality of life depends on the exchange rate. As the data analysis shows, the key driver of the decline in consumer purchasing is the devaluation of the national currency.
Growth in the market has been intense during the period of USD appreciation and fiscal and monetary policy discussions. As of Tuesday, the central bank made an intervention, supplying USD 27 million on a regular foreign exchange auction, but this did not show significant results. The Bank of Mongolia (BoM) provided a total of USD 164 million to the market.
Source: ZGM Daily
SALES OF INDUSTRIAL PRODUCTION INCREASE BY MNT 1.9 TRILLION IN FIRST 11 MONTHS, UP 12.8 PCT
In the first 11 months of 2019, the gross industrial output reached MNT 16.0 trillion, showing an increase of MNT 1.8 trillion (12.8%) from the same period of previous year. This increase was mainly due to an increase of mining and quarrying gross output by MNT 1.4 trillion (13.3%), of which mining of coal increased by MNT 1.4 trillion (38.1%) and other mining and quarrying increased by MNT 15.3 billion (12.6%).
In November 2019, the gross industrial output reached MNT 1.5 trillion, it is decreased by MNT 102.8 billion (6.6%) compared to the previous month.
In November 2019, the seasonally adjusted industrial production index was 171.5 (2010=100), decreased by 2.9% from the same period of previous year and by 3.6% from the end of previous year, whereas, it is increased by 1.5% from the previous month.
Source: Montsame
MONGOLIA RANKED 92ND IN THE 2019 HUMAN DEVELOPMENT INDEX
According to the ‘Human Development Index-2019’ released by the United Nations Development Programme, Mongolia has been ranked 92nd among 189 countries.
The Human Development Index (HDI) is a composite statistic (composite index) of life expectancy, education, and per capita income indicators, which are used to rank countries into four tiers of human development.
In the Human Development Index -2019 under the theme ‘Beyond income, beyond averages, beyond today: Inequalities in human development in the 21st century’, Mongolia has been ranked 107th with its life expectancy, 103rd with its education indicator and 120th with its per capita income indicator.
HDI-2019 was topped by Norway, followed by Switzerland, Ireland, Germany, Hong Kong, Australia, Island, Sweden, Singapore and Netherlands.
Source: Montsame
Click here to view the full index
TWO PERCENT OF NATIONAL GDP TO BE SPENT ON GREEN ECONOMY IN 2020
With the United Nations defining the main tool to reach sustainable development goals as the green economy, Mongolia approved the Green Development Policy document in 2014, and its implementation plan in 2016. As a result, there has been certain progress made in not only the environment but also various economic sectors with the green development policy successfully being implemented in Mongolia. The matter was highlighted at the consultative meeting held under the theme, ‘Green Economy and Modelling’, on December 4.
Mongolia will be implementing the green development policy in two stages: from 2014 to 2021, and from 2021 to 2030. Starting from 2020, two percent of the GDP is to be spent on investing in green economy.
Head of Green Development Policy Department at the Ministry of Environment and Tourism T.Bulgan said, “Production of renewable energy takes 18 percent of the total energy being produced nationwide…
Source: Montsame
BUDGET REVENUE AMOUNTS TO MNT 9.7 TRILLION
In the first 11 months of 2019, total equilibrated revenue and grants of the General government budget amounted to MNT 9.7 trillion and total expenditure and net lending amounted to MNT 9.2 trillion, resulting a surplus of MNT 486.7 billion in the equilibrated balance.
In the first 11 months of 2019, tax revenue reached MNT 8.8 trillion, increased by MNT 1.4 trillion or 19.0% compared with the same period of previous year. This growth was mainly affected by increases of MNT 422.2 billion or 22.5% in income tax, MNT 323.1 billion or 22.8% in social security revenue, MNT 260.9 billion or 13.3% in value added taxes, MNT 175.0 billion or 26.4% in other tax, MNT 102.2 billion or 14.8% in excise taxes and MNT 101.3 billion or 16.4% in revenue from foreign activities.
Source: Montsame
ROLE OF WOMEN IN MONGOLIA’S BUSINESS SECTOR EXCEEDS WORLD AVERAGE
At the Forbes Women’s Summit 2019 in Mongolia on December 5, participants from the community of inspiring women leaders from all industries came together to support women’s participation in decision making and growth management. Panel discussions focused on a more diverse future, through keynotes from international speakers, breakout sessions and networking.
Innovative visionaries’ ambitious actions are changing the world at an unprecedented scale. The summit held a panel discussion under topics, namely Growth Management and Women, Investment Environment and Women, Employment and Women, and Women’s Participation and Leadership.
“Mongolia’s social, economic and political situation is not completely stable. Women in Mongolia account for nearly half of all educated personnel, but they do not hold such a position in the economy. Mongolians focus on girls’ education but require them to have families and children to care when they should be contributing to society and themselves. Women also need to support one another than men do,” said Dolgion Erdenebayar.
Source: ZGM Daily
COAL EXPORT HITS NINE-MONTH LOW AS CHINA’S IMPORTS FALL
Coal exports have reached the lowest of the last nine months due to China’s downturn in coal imports. According to the Customs General Administration, Mongolia exported a total of 34.8 million tons of coal in the first 11 months of the year, up by 4.2 percent from the same period of last year.
However, coal exports have dropped to 2.45 million tons in November, down 24 percent from the previous month. Mongolia, the mineral resource reach country, plans to export 42 million tons of coal in 2019.
To reach its target, the country needs to export another 7.2million tons of coal until the end of the year. The decline in China’s imports has resulted in the main ports of Mongolia.
Gashuunsukhait port, which exported 19.7 million tons of coal from the Tavantolgoi deposit in the first 11 months, is currently producing 160 trucks loaded with coal per day.
Source: ZGM Daily
See also: Mongolia exports 34.8 mln tons of coal in first 11 months of year
MONGOLIA EXPORTS 40 THOUSAND TONS OF MEAT THIS YEAR
Mongolia has exported a total of 40 thousand tons of meat to China, Russia, Vietnam, Japan, Iran and Kazakhstan this year.
In recent years, meat export to Hong Kong, Iran and Vietnam have been growing. Some 80 percent of the total revenue from meat exports accounts for horse meat and supply of mutton, goat meat and beef showed significant increase.
Mongolia earned approximately MNT400 billion (about USD160 million) from meat export 2018.
Mongolians consume around 10-12 million head of livestock or 300-400 tons of meat per year; thus, the country is potential to put 9 million head of livestock into economic circulation and export over 180 thousand tons of meat, apart from the supply of entire domestic meat needs.
Source: News.mn
REGULATORY ENVIRONMENT CREATED FOR ENABLING THE CREATION OF CLOSED END FUNDS
Mongolian Stock Exchange (MSE) "Closed-end Fund Listing Rules" was approved by the MSE Board of Directors Resolution no.2019/07 dated 28 June 2019 and by the FRC Resolution no.537 dated 13 November 2019. MSE organised a seminar to provide detailed information about the newly approved rules to the market participants such as the asset management companies and securities firms.
"Closed-end Fund Listing Rules" has special importance in that it creates the opportunity for closed-end investment funds to be listed on the MSE and be publicly traded while providing professional fund management services to the investors, channelling a significant portion of their assets under management to the local stock market, and forming the basis of the much-needed long-term institutional investor in the market.
The seminar covered the main concepts and international practices related to the listing and trading of closed-end funds as well as the listing procedure by the FRC and MSE and the ongoing obligations as a listed fund.
Source: Mongolian Stock Exchange
ADB INVESTMENT PROGRAM TO IMPROVE HEALTH SERVICES IN MONGOLIA APPROVED
On December 6, Parliament of Mongolia adopted a bill on ratification of financing general agreement of ‘Improving Access to Health Services for Disadvantaged Groups Investment Program’ to be implemented by the Government of Mongolia and the Asian Development Bank.
The investment program will reinforce past and ongoing sector reforms by expanding and improving access to quality primary and secondary health services in disadvantaged areas of Ulaanbaatar ger areas, in Khovd and Uvs aimags (provinces), and selected soums (aimag subdistricts). The three-stage program with a duration of ten years will also improve the health financing systems and reduce out-of-pocket health care expenses nationwide.
The total investment of the program is composed of USD 158.34 million loan funding from the ADB, including ordinary capital resources of USD 148.34 million and concessional ordinary capital resources lending of USD 10 million as well as USD 3.48 million of grant from the Japan Fund for the Joint Crediting Mechanism.
Source: Montsame
See also: ADB approves program to improve access to quality health services in UB, provinces
NATIONWIDE LIVESTOCK CENSUS STARTS IN MONGOLIA
The annual nationwide livestock census has started in Mongolia. This not only records the number of animals, but also conducts a detailed study of the herder families across the country.
This time last year, there were 66.5 million animals, representing an increase of 241.2 thousand heads compared to 2017.
In 1970s, there were around 13.3 million sheep and 4.2 million goats. The number of goats in Mongolia has shot up grew from 19.8 percent of total livestock in 1990 to 40.8 percent today – this is due to growing global cashmere demands.
Source: News.mn
BARDIE BARCLAY SUTTON: GRATITUDE CHANGES EVERYTHING - EDITORIAL
We interviewed Bardie Barclay Sutton, the program officer of Zorig Foundation. She graduated from the University of Melbourne with a degree in psychology and anthropology. Also she has worked in World Vision Australia, Oaktree Foundation and Australian Volunteers International. We talked with her about the projects and programs she initiated and implemented in Zorig Foundation.
Why did you choose to work for Zorig Foundation in Mongolia?
I knew when I graduated from University that I wanted to be a part of the Australian Volunteers Program again. When I saw the assignment, it really felt like fate. It was the perfect blend of capitalizing on my existing skill set and providing good opportunities for professional growth. I was finishing up at my job a youth led organization, where at 27 you get retired, but I really wanted to continue working in youth development. I chose to apply for the assignment.
Source: GoGo News
BUSINESS
RIO TINTO SCORES BIG WIN IN MONGOLIA
The world’s second largest miner Rio Tinto (ASX, LON, NYSE: RIO) has scored a major win in Mongolia after the country’s parliament unanimously approved a resolution that reconfirms the validity of all the Oyu Tolgoi mine-related agreements approved since 2009.
The legislators’ resolution brings an 18-month review on the deals governing the copper-gold mine to a close, allowing the company to continue with an ongoing $7 billion expansion of the operation.
The news is something of a relief for Rio Tinto, which feared the government might try to completely renegotiate the agreements on the asset’s development — a 2009 investment agreement, a 2011 amended and restated shareholder agreement and a 2015 underground mine development and financing plan.
The resolution, however, recommends to explore options to improve the deal, including looking at the Mongolian government’s equity share in Oyu Tolgoi, a re-definition of the reserve report and updated feasibility report, and a renewal of environmental and water assessments.
Source: Mining.com
Read Rio Tinto release
See also: Turquoise Hill: While Mongolia Wants More Money Now, The Decrease Of Uncertainty Pushes The Stock Up
TAVAN TOLGOI JSC EQUITY VALUATION REPORT BY CENTRAL SECURITIES
We initiate our coverage of Tavantolgoi Joint Stock Company, listed on the Mongolian Stock Exchange (MSE), with an OVERWEIGHT rating and a target price of MNT10,158.
We consider the Company is undervalued based on its low P/E multiple and our Discounted Cash Flow valuation result. Trailing 12-month P/E ratio of 6.0x is cheap even after considering investment risks mentioned below. Our DCF valuation is based on conservative assumptions including discount rate of 20%. The relatively high dividend yield of 13.4% is also attractive as a short-term trade idea.
Investment risks: Poor governance practice caused by conflicting interests of some of the major shareholders and senior management team members is the most significant risk for minority shareholders. Next, dependence on a single market, i.e. China, its economic situation, and political tension between Mongolia and China is also a major risk for the Company. Finally, fluctuation in global price of coking coal will directly impact the Company’s profit margin.
Source: CTFassets.net (PDF)
10 MONGOLIAN COMPANIES SELECTED TO EXPORT IN THE U.S. MARKET
10 Mongolian companies that will export products to the U.S. market have been selected. Specifically, “Аriunaa Suri”, “ТESO”, “Khaadiin Ger”, “Gazar Shim”, “Resort world Terelj”, “Negun cashmere”, “Mongema”, “Bayangongor LLC”, “Global Nomadic Product”, “Munkhbumuud LLC” have been chosen in selection of joint program ‘Let’s Export to America’ being realized by Mongolian Brand Association NGO in partnership with the Asian American Chamber of Commerce (AACC).
In the framework of the program, four consultants from the AACC namely FAO Global’s CEO Brandon Hughes, Head of Asia-Pacific Strategy of the company Cameron Johnson, Managing Director of Ross Law Group Gary Ross and CEO of Columbia China League Business Advisory Co Joel Gallo worked in Mongolia.
The experts from the U.S. conducted special training to our businesses on opportunities to export their goods to the U.S. market, making project evaluation and offering advice and guidance on international strategy, export consideration, and operational improvements that could be made.
Source: Montsame
XANADU MINES’ IMPROVED COPPER AND GOLD RECOVERIES POINT TO LIFT IN VALUE OF KHARMAGTAI
Xanadu Mines Ltd’s metallurgical test program on sulphide ore from the flagship Kharmagtai project in the South Gobi region of Mongolia has improved copper and gold recoveries.
The new test program has improved copper recoveries by around 4.5% to an average recovery of 89.5% for the two main metallurgical composites.
Gold recoveries have increased by around 3% to achieve an average recovery of 69.7% for the two main metallurgical composites.
This work has also resulted in increases in copper concentrate copper and gold grades.
These improvements indicate an uplift in value for the Kharmagtai project, which is in the same region as Rio Tinto plc’s massive Oyu Tolgoi Copper-Gold Project.
Xanadu’s managing director and CEO Dr Andrew Stewart said: “We are extremely pleased with these new metallurgical results from Kharmagtai, which are in line with or better than expected at this stage in the project's life and we are comfortable that additional improvements can be made further down the track.”
Source: Proactive Investors, ZGM Daily
ELIXIR ENERGY HITS TOTAL DEPTH MILESTONE AT MONGOLIAN COAL WELL
Elixir Energy (EXR) has hit rock bottom at its Ugtaal-1 core-hole well in Mongolia.
The gas explorer has now reached a total drilling depth of 752 metres at the well, situated within its Nomgon IX coal-bed methane project.
In an announcement to the Australian Securities Exchange (ASX) today, Elixir says well exploration exceeded previous expectations and the resource also proved to be thicker than prior research indicated.
Well-side geologists managed to intersect 43 metres of net coal during the drilling process. According to Elixir's latest announcement, wireline logs will be run in the next few days to confirm these results.
While the final results from the drilling program are yet to be released, Elixir says the gas recovered from the cores appears to be predominantly methane. The company says a final gas analysis will follow in due course.
Source: The Market Herald, FinFeed.com
ERDENE FILES PRE-FEASIBILITY STUDY FOR THE BAYAN KHUNDII GOLD PROJECT AND COMPLETES THE EBRD FINANCING
Erdene Resource Development Corp. is pleased to announce the filing on SEDAR of the independent Technical Report (the “Report”) for its 100%-owned, high-grade, open-pit, Khundii Gold Project in southwest Mongolia, including a Pre-Feasibility Study (“PFS”) for its Bayan Khundii Gold Deposit (“Bayan Khundii” or “BK”) and an updated Preliminary Economic Assessment (“PEA”) for its Altan Nar Deposit (“Altan Nar” or “AN”), located 16 km from Bayan Khundii. The Report entitled “Khundii Gold Project NI 43-101 Technical Report”, dated December 4, 2019, was prepared in accordance with National Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI 43-101’) by Tetra Tech, Inc. (“Tetra Tech”). The Report is available under the Company’s profile at www.sedar.com and on the Company’s website at www.erdene.com.
The Company is also pleased to announce the receipt of US$5 million (C$6.6 million) from the European Bank for Reconstruction and Development (“EBRD”) and a further C$1 million…
Source: Erdene Resource Development Corp., ZGM Daily
ASPIRE MINING SIGNS NON-BINDING MOU WITH SINOSTEEL MEC
Aspire Mining Ltd., listed on the Australian Stock Exchange (ASX), has secured a non-binding agreement with Sinosteel Equipment and Engineering for the early development of Ovoot Coking Coal Project in Mongolia. The agreement covers potential engineering, procurement, construction (EPC) and trade-based funding opportunities for the Ovoot project.
The announcement was followed by a USD 33.5 million placement with major shareholder Mr. Tserenpuntsag Tsedevdamba, who now owns 51 percent of the company. He has provided commitments to Aspire of loan guarantees of up to USD 100 million to complete ODEP’s construction and development.
Sinosteel MECC is a subsidiary of the CNY 5.7 billion market cap Sinosteel Jilin Carbon Co. Ltd. Aspire’s financial gain is further enabled by Sinosteel’s most recently announced non-binding agreement, which covers potential engineering, procurement, construction and trade-based funding opportunities for the Ovoot Early Development Project (OEDP).
Source: ZGM Daily, MiningWeekly.com, Proactive Investors
GOBI CASHMERE LAUNCHES DE.GOBICASHMERE.COM FOR GERMAN SPEAKERS
Gobi cashmere has officially launched its online store (de.gobicashmere.com) for German speakers on 6th of December. It definitely brings Gobi cashmere much closer to the customers in the German speaking regions.
Since they successfully entered the European market a while ago, their 100% premium cashmere products have become well-known and more accessible to the European customers thanks to their increasing number of branch and online stores.
Gobi cashmere’s emphasis on the customer experience surely strengthens their position in this highly competitive market. Newly launched online store offers compatible shipping and return policies such as free shipping and 1-3 working days delivery within Germany. It also has seasonal offers for customers such as giving away free socks and gift box this holiday season.
Gobi cashmere has total of three branch stores in Berlin and Hamburg and the most recent store was opened at the Mall of Berlin, the largest shopping center in Berlin just two months ago.
Source: News.mn
MINISTER N.TSERENBAT: THE DIRECT FLIGHT OF TURKISH AIRLINES WILL BECOME A BRIDGE THAT CONNECTS MONGOLIA TO EUROPE
In the framework of the working visit to the Republic of Turkey, Minister of Environment and Tourism N.Tserenbat held a meeting with CEO of Turkish Airlines Bilal Ekşi in Istanbul, Turkey on December 6.
At the meeting, the sides noted how the bilateral trade and economic partnership is expected to accelerate alongside bringing tourism to a new level with the launch of the direct flight en route Ulaanbaatar-Istanbul from January 1, 2020.
Turkish Airlines CEO Bilal Ekşi highlighted that aside from prioritizing passenger comfort, it will become possible to transport 10 tons of cargo on each flight. Furthermore, as the airline promotes the destination country in-flight, he expressed that the company is ready to contribute to the tourism sector of Mongolia. Expressing his gratitude to the Minister for solving the matter of conducting the direct flight that had remained unsolved for 7 years, he underlined his confidence in the development of partnership in the tourism sector reaching a high level.
Source: Montsame
ICE RINK IN CHINGELTEI DISTRICT TO OPEN SOON
Behind 39th secondary school, Denjiin myanga, 10th khoroo, Chingeltei district, ice rink with purpose of figure skating and hockey will be into operation soon.
As J.Lkhagvasuren, Deputy Governor of Chingeltei district reported “The rink will be open full seasons and the sport complex will include swimming pool, basketball court and 1000 seats.
The sport complex is built by state budget and current performance is 90% and will be into operation in the beginning of next year due to incomplete furnishing part.
The sport complex will be free for citizens of Chingeltei district.
Source: GoGo News
CANADA MINING ASSOCIATION SENIOR VP: “CHALLENGES ARE MORE OPPORTUNITY THAN PROBLEM” - INTERVIEW
Ben Chalmers, Senior Vice President of The Mining Association of Canada, was in Mongolia in September to spread awareness about the concept of TSM or Towards Sustainable Mining. B. Tugsbilegt finds out from him more about TSM, and how it would help mining meet stricter standards of emission reduction, water management and such environmental challenges.
Tell our readers a little more about Towards Sustainable Mining. How many countries have joined it?
TSM has been around for 15 years and defines environmental and social standards and practices that should be implemented in mining operations. For example, individual mines are required to transparently report on their performance in several environmental and social indicators including tailings management, energy and greenhouse gas management, community engagement, water stewardship, biodiversity, and others. It comes with independent assurance that the data are collected and presented in a proper and truthful manner so that there is public confidence in them.
Source: Mongolian Mining Journal
See also: Ben Chalmers: TSM program can be a roadmap for Mongolia’s mining sector
UNCOVERING NEW NOMADIC BEAUTY IN THE LAND OF BLUE SKIES: A DISCUSSION WITH LHAMOUR SKINCARE FOUNDER KHULAN DAVAADORJ - INTERVIEW
Mongolia is a country that is often overlooked. Bordered by Russia and China, this country is often thought of with respect to its rich cultural history, but it offers a new array of powerful and compelling stories today. Khulan Davaadorj is an undeniable example of this. Awarded Woman of the Year by Mongolia’s Prime Minister in 2016, Davaadorj is an inspiring social entrepreneur whose passion for ethical living drove her to create LHAMOUR. LHAMOUR is Mongolia’s first natural skincare company and it aims to revolutionise the Mongolian economy, empower Mongolian citizens, and inspire all of us to live with compassion and love.
Source: Savant Magazine
