EK HIGHLIGHT
Originally initiated by our CEO Dr. Oliver Schnorr EK started implementing creative initiation of our employees based on the Pareto Principle rule since January 2020. Let me introduce our January and February winner’s Pareto initiatives.
According to our Environmental Policy, we aim to reduce the use of natural resources and waste generation such as printer cartridges and papers. Our January winner, business development manager Mr. Khangalsaikhan Bayaraa initiated the idea of placing printouts holder and implemented it, thus our printer section become more organized. Moreover, now we order paper online. Small things make a big difference!
EK prioritizes to ensure the health and safety of every individual who is affected in our business operation and activities and strives to reduce any possible hazards to achieve ZERO ACCIDENT. February winner, Marketing manager Ms. Ankhmanlai Jargalsaikhan initiated the “EK share” morning meeting includes safety share, challenges, success share and exercise sessions led by different team members weekly which can encourage employees' leadership skills. Employee recognition board for Pareto Principle winners agreed to place on EK hall.
We believe this initiation will play an important role in our HSE policy.
Our management team grasped the opportunity to implement other good initiatives such as improvement of department system, foosball for break room, equal bereavement paid leave for direct and indirect family members. It’s a pleasure to see each of us motivated to cultivate self-aptitudes, improve our workplace and environment. Keep up the good work!
ECONOMIC STIMULUS PACKAGE TO LIMIT COVID-19 IMPACT TO BE SUBMITTED TO PARLIAMENT
On April 1, at its regular meeting, the Cabinet held a discussion on a draft parliamentary resolution and accompanying bills on a package of measures to protect the health and income of people, preserve employment and stimulate the economy. The package contains 14 measures in four areas, as introduced by Prime Minister U.Khurelsukh on last Friday.
All entities and companies, excluding state and local government entities, are exempt from social insurance contributions paid for pension insurance, benefit insurance and industrial accident and occupational disease insurance of their employees, who are Mongolian nationals. The decision takes effect from April 1, 2020 until October 1, 2020 and the insured will be automatically considered to have paid for social insurance contribution during this period.
Social insurance contributions can also be paid on a voluntary basis and the six-month exemption also applies to self-employed people.
Source: Montsame, GoGo News
See also: Government to spend MNT 5 trillion to support economy
Government unveils MNT 5.1 trillion plan to help those affected by COVID-19
Finance Minister shed light on economic relief measures
ECONOMY
EXPORTS FALL BY 34.4 PERCENT IN Q1
Mongolian custom officials reported today (1 April) the export and import statistics for the first quarter of 2020. Export revenue reached USD 1 billion 139.6 million in the first quarter of 2020; however – which represents a 34.4 percent decrease on the same period in 2019. Exports stopped entirely when Mongolia closed its borders. The country is still almost entirely dependent on coal and ore exports to China. Coal trucks have only recently resumed deliveries to China via the Gashuun Sukhait and Shivee Khuren border crossings. Exports totalled 3 million 104 thousand tonnes of coal in the first quarter; a fall of 59.8 percent on the same period in 2019.
Mongolia imported goods worth USD 1 billion 211.1 million in the first quarter of 2020; a decrease of 11.2 percent on last year.
Source: News.mn
THROUGHPUT GROWS IN CHINA-MONGOLIA BORDER CUSTOMS DESPITE COVID-19
The land checkpoint of Erenhot in north China's Inner Mongolia Autonomous Region saw an increase in throughput in the first two months, despite measures taken to reduce gatherings for the prevention and control of the novel coronavirus disease (COVID-19).
According to the Erenhot customs, the volume of imports and exports through the customs reached 2.28 million tonnes in the first two months, up 25.9 percent year on year. Among them, imports accounted for more than 90 percent of the total, up over a quarter year on year, while exports also saw an increase of 12.6 percent year on year.
The customs attributed the surge to the China-Europe freight train services importing Mongolian commodities and livestock products, and exporting Chinese fruits, vegetables as well as mechanical and electrical products. As of March 13, Erenhot had seen 30,000 TEUs of goods imported and exported since the start of this year, up 61.3 percent year on year.
Source: China.org.cn
BANKS FULFILL MNT 446 BILLION WORTH OF LOAN PAYMENT DEFERRALS
The central bank of Mongolia gave an information on the difficulties borrowers are experiencing on meeting their loan repayments due to the impacts of COVID-19. Around 26 thousand borrowers with total debts of MNT 2.5 trillion have been struggling to make loan payments due to the pandemic, report the Bank of Mongolia.
65.1 percent of those debts or MNT 2 trillion are held by business entities and 35 percent or MNT 546 billion are taken out by individuals. In addition, MNT 195 billion of principal payments and MNT 72 billion of interest payments out of the debt service payments due have not been made.
The central bank has been taking necessary measures to alleviate the impacts of the pandemic on the country’s banking and financial areas in line with best practices from world countries and local legislation.
Source: Montsame
MONGOLIA EXPORTS 90,000 TONS OF COAL TO CHINA IN MARCH
Mongolia exported some 90,000 tons of coal to China in March, the Mongolian Customs General Administration (MCGA) said Thursday.
The coal exports were transported to China via four border points, namely Gashuunsukhait, Zamiin-Uud, Shiveekhuren and Khangi, the MCGA said in a statement.
The country resumed exporting coal to China in mid-March after a halt beginning Feb. 10 due to the COVID-19 pandemic.
"We are now working to reopen four more border points, namely Bichigt, Bayankhoshuu, Burgastai and Bulgan in order to increase exports," Yondonsuren Jargalsaikhan, a transport ministry official, told Xinhua.
Mongolia has also resumed the export of other mining products including copper concentrates and iron ores to China, according to the official.
Source: Xinhua
SUCCESS OF THE ULAANBAATAR COAL BAN
In March 2019, the Mongolian government decided to totally ban the use of raw coal in capital city of Ulaanbaatar. Since then, air-pollution in Ulaanbaatar has decreased visibly. According to official data, the levels of harmful microscopic particulate matter – known as PM 2.5 – in the air decreased by nearly 60 percent during winter months of 2019-2020 from the previous year.
Officials from the Ulaanbaatar Metropolitan Specialized Inspection Agency and the Air Pollution Reduction Department have been working to control implementation of the Government decision on banning raw coal usage from 1 October, 2019 to 1 April, 2020.
Smoke from the shantytown ger districts, where over 220,000 families live – or half the population of the capital – has long been identified as the main culprit of Ulaanbaatar’s chronic air-pollution. In the light of the ban, the government has put an alternative product on the market made from semi-coke, a by-product of coal.
Source: News.mn
GOLD PURCHASE RISES FOURFOLD IN Q1
In the first three months of this year, the central bank purchased 5.3 tons of precious metals, increasing fourfold from 1.2 tons in the same period last year. 3.6 tons of precious metals are gold and 1.7 tons is white silver.
The dramatic decline in gold purchases in the first quarter of 2019 was mainly due to the uncertainty of the legal environment in royalties. It may have resulted in this year’s rise as well, according to the officials. In the first months of 2020, increase gold prices dominated. For example, in March, the average purchase price of gold was MNT 141,500 per ounce, which is about 30 percent higher than the same period of the previous year.
In addition, the closure of passenger traffic may have restricted the smuggling of gold. Purchasing gold is one of the key instruments for the Mongolian central bank to increase its official foreign exchange reserves.
Source: ZGM Daily
MONGOLIA EXPORTS 306.6 THOUSAND TONS OF COPPER CONCENTRATE IN Q1
According to the information provided by the Customs General Administration, Mongolia exported 306.6 thousand tons of copper concentrate in the first quarter of this year. This is a decreased performance by 15.2 percent compared to the same period of the previous year.
In monetary terms, copper concentrate export was lowered by 68 percent, reaching USD 351.2 million. Even though the copper concentrate export has not been interrupted in relation with the novel coronavirus, a drop in price of copper on international market directly affected to export performance of Mongolia.
Source: Montsame
COAL EXPORT THROUGH KHANGI BORDER PORT RESUMED
Coal export through Khangi border checkpoint resumed from today, March 31. Even though the country halted its coal export temporarily in prevention of COVID-19 infection, Gashuunsukhait border checkpoint was re-opened on March 23 to restore the coal export.
By resuming operation of Khangi border checkpoint, now coal export is being made through four border crossings – Zamyn-Uud, Khangi, Gashuunsukhait and Shiveekhuren.
According to a directive given by the Government, a working group led by Deputy Prime Minister U.Enkhtuvshin got acquainted with preparations of the border ports on the spot. The working group required the ports to decontaminate vehicles, to ensure so that the drivers, dispatchers and operators work in protective clothes and conduct shipment under the special rule.
Source: Montsame
See also: Mongolia resumes coal exports to China via 4 border points
Mongolian coking coal prices drop after exports resume
Shiveekhuren border crossing launches coal export
FX AUCTION TOTALS USD 209.6 MILLION IN MARCH
The Bank of Mongolia (BoM) has distributed a total of USD 209.6 million in FX auctions this month. The decline of U.S. dollar outflows was mainly due to lower domestic currency consumption. In addition, the Extended Fund Facility (EFF) program by the International Monetary Fund (IMF) is ending in May. The meetings to discuss the result of the program may be postponed due to the COVID¬-2019 outbreak.
However, the resumption of coal export makes a source of foreign exchange revenue. According to the BoM, the Mongolian tugrik stood at MNT 2775.43 against the U.S. dollar as of Monday. The U.S. dollar exchange rate has been increased by MNT five against tugrik during the past month. Even though BoM cut its interest rate by 1 percentage point to 10 percent, the U.S. dollar gradually tightens against tugrik.
Mongolia’s foreign exchange reserves barely reach USD 4 billion. It shows that the country’s FX reserves are continuing to shrink.
Source: ZGM Daily
THE WORLD BANK APPROVES USD 26.9 MILLION FOR MONGOLIA’S COVID-19 EMERGENCY RESPONSE
The World Bank’s Board of Executive Directors today approved $26.9 million for the Mongolia COVID-19 Emergency Response and Health System Preparedness Project to meet emergency needs in the face of the pandemic and to better prepare for future health crises.
The project will address the immediate needs in response to COVID-19 such as training for emergency care doctors, nurses and paramedical staff; purchase of medical and laboratory equipment and supplies as well as build COVID-19 diagnostic capacity in Ulaanbaatar and all provinces. It will also rehabilitate health facilities; institute infection control measures and training across health facilities; and support public health information and communication campaigns for disease prevention and management.
Although community transmission has not been reported in Mongolia, the country remains at high risk for COVID-19 outbreak spread. The government has made addressing the COVID-19 pandemic an immediate priority.
Source: World Bank
MEAT PRICES DROP
Ulaanbaatar Statistic Office presented its weekly price survey of consumer goods, indicating a drop in meat prices.
In the fourth week of March 2020, the average price of a kilogram of bone-in lamb cost 9,694 MNT. Compared to the previous week, the price of bone-in lamb decreased by 386 MNT (3.8 percent) per kilogram and lamb fillet price decreased by 387 MNT (4.1 percent) per kilogram.
According to last week's observation, lamb is sold at the cheapest price of 7,800 MNT at Kharkhorin food market, was most expensive, at 13,500 MNT per kilogram, at Mercury food market.
The average price of a kilogram of bone-in beef was 11,616 MNT. Compared to the previous week, the price of bone-in beef decreased by 490 MNT (4.1 percent) and beef fillet price was down by 671 MNT (4.7 percent). According to last week's observation, beef is most affordable at Kharkhorin food market, at 9,800 MNT, and most expensive at Mercury food market, at 14,000 MNT.
Source: The UB Post
GOVERNMENT’S HEALTH-RELATED SPENDING REACHES MNT 37.6 BILLION
Since the government of Mongolia started taking actions to prevent the spread of the coronavirus in the country on January 30, the total spending for the health industry reached MNT 37.6 billion.
As introduced at the press conference of March 27, Friday, where the Prime Minister U.Khurelsukh announced coronavirus economic rescue measures, the expenses include MNT 17 billion financed by government’s own funds and MNT 20.6 billion of financing from international soft loans and assistance.
PM Khurelsukh said at the press conference that another MNT 159 billion will be approved for purchasing necessary medical supplies and protective equipment”.
The government’s current healthcare-related spending of MNT 17 billion is comprised of MNT 9 billion for medical supplies and equipment, MNT 6.5 billion for disinfection and sanitation, MNT 1.5 billion to cover additional wages of healthcare providers, introduced Minister of Finance Ch.Khurelbaatar.
Source: Montsame, News.mn
BUSINESS
70 PERCENT OF TOURISTS CANCEL RESERVATIONS IN MONGOLIA IN 2020
According to a survey conducted by the Mongolian Tourism Association, 70 percent of tourists who planned and booked a trip to Mongolia in 2020 canceled their trip.
The spread of COVID-19 worldwide started influencing on tourist sector. In 2018, 577 thousand tourists came to Mongolia. In 2020, the number estimated to increase by 24%.
Since the quarantine related to the Coronavirus spread, tourists have canceled their bookings which will make tourist sector of Mongolia having no income this year.
There are 50-60 thousand employees in this sector, and tourist companies are facing to reduce the employee numbers due to the situation.
31 percent of tourists come to Mongolia are from China, 26 percent from Russia, 16 percent from South Korea, 4 percent from Japan, and the rest from Europe and the United States.
Source: GoGo News
ETT EXPORTS 22.6 TONS OF COAL SINCE BORDER REOPENING
Erdenes Tavan Tolgoi (ETT) JSC has been exported 22.6 tons of coal since the coal export resumed. The Head of Public Relations Manager of ETT said, “Even though our country follows the government measures in connection with COVID-2019 prevention, the company operates normally. ETT has extracted approximately 2.2 tons of coal, loaded 2.1 tons of coal and exported nearly 800,000 tons of coal during the period from January 1st to March. However, coal price dropped and the risk was estimated previously. ”
Moreover, the Mongolian Central Securities Depository (MCSD), Financial Regulatory Commission (FRC) and the State Bank, as well as the Customs, Taxation and Financial Information Technology Center will be involved in organizing efficient work regarding dividends distributing from May. ETT will distribute a total of MNT 1 trillion dividends from the beginning of May. Of these, 85 percent or MNT 199.7 million will be allocated to ETT shareholders and entities.
Source: ZGM Daily
MONGOLIAN CAPITAL MARKET TO SHIFT TO DVP WITH T+2 FINALITY STARTING FROM MARCH 31, 2020
On January 29, 2020, FRC adopted a decision to shift to DvP with T+2 finality system starting from March 31, 2020 by its Resolution No.29.
Under this new system, investors will be able to buy securities with certain amount of margin depending on their risk exposure and transfer the remaining payment for finalising the settlement in 2 business days after the trade takes place, through a brokerage firm who is the clearing member of the Mongolian Securities Clearinghouse (MSCH).
If an investor trades through a brokerage firm who is not a clearing member of the MSCH, he will have to prepay the fund according to the current scheme, however, the settlement will be finalised on T+2 day.
The introduction of DvP with T+2 finality arrangement will help to lower costs associated with trading, improve market liquidity as well as create better market environment to both domestic and international investors.
Source: Mongolian Stock Exchange
TATSUYA HAMADA: MOBICOM GROUP WILL CONTINUE PAY SOCIAL INSURANCE FEE TO CONTRIBUTE THE STATE BUDGET
Currently, we are facing the one of the biggest challenges happening to the world. The global epidemic COVID-19 has a huge impact on our lives, society and economy, and many countries are working hard to take comprehensive measures to protect the health and well-being of their people.
It has been four years since I took the management of Mobicom Corporation, one of Mongolia's largest companies, and its subsidiaries. From my own experience of living and working in Mongolia, the current situation of economy is much worse than the 2016 and 2017 crisis. Cooperation of private sectors and the State is important to face the challenge.
Personally, I deeply appreciate decision made from the government led by PM.Khurelsukh last week. Currently, detailed regulation related to the decision are not definite.
However, as a CEO of Mobicom Group, I am informing to continue paying social insurance fee in order to contribute the State budget in framework of social responsibility. Of course, it’s not easy decision to make, but we need to overcome the challenge together.
Source: GoGo News
RIO TINTO MANAGER TAKES MONGOLIA DISCLOSURE CLAIMS TO ASIC
Australia's market watchdog has been asked to investigate whether Rio Tinto was too slow to disclose cost and schedule blowouts on its controversial Mongolian copper project.
The Australian Financial Review revealed in November that a former general manager on the project had claimed in a United Kingdom court that he warned Rio about cost and schedule blowouts months before they were disclosed to investors.
That former employee, Richard Bowley, has now asked the Australian Securities and Investments Commission (ASIC) to investigate his claims, filing his complaints with the regulator last week.
The request for ASIC to investigate the claims comes after Mr Bowley also raised the matter with the UK's Serious Fraud Office, the UK Financial Conduct Authority and the US Securities Exchange Commission.
Mr Bowley's lawyers decided to refer the matter to market regulators in the three countries after it became clear Mr Bowley's unfair dismissal case in the UK employment tribunal would be significantly delayed by the coronavirus pandemic.
Source: Australian Financial Review
See also: Rio Tinto Whistleblower Files Complaint with U.S. Regulators
COVID-19 AND FORCE MAJEURE
The current quarantine measures hold by the Government of Mongolia have become increasingly difficult for the legal entities and individuals conducting business operation in Mongolia due to the Coronavirus epidemic (COVID-19), which is being declared as a pandemic by the World Health Organization.
This recent quarantine creates the risk/problem that business entities will not able to timely fulfill their contractual obligations, such as loan payments, interest and rent payments etc.
In circumstances of force majeure and hardship, the situations which are unable to fulfill their contractual obligations are considered as respectful grounds. In this case, there will be issues that contractual parties have to deal with their obligations, responsibilities and risks to be distributed under the agreement.
Therefore, we provide our clients with legal service and support that seeks to overcome this difficult time with less harm and a release from contract liability in order to the respectful ground as force majeure. The evidence which allow to release the contractual obligation is the certificate proofing the force majeure.
Source: LehmanLaw Mongolia
INTERBANK TRANSACTION FEES REDUCED BY 20 PERCENT
In order to prevent and reduce the risk of COVID-19 pandemic, small amount of interbank transaction fees will be reduced by 20 percent starting from today, April 1, during the period of heightened state of readiness.
The commercial banks including Arig, Bogd, Golomt, Capitron, Credit, Khaan, Xac, State Bank, Transport and Development Bank, National Investment Bank, Trade and Development Bank and Chinggis Khaan Bank are working to implement this initiative of the Bank of Mongolia.
This initiative calls upon the citizens to use internet and mobile banking services for payments instead of going to bank branches to protect their health from any possible risks.
Source: Montsame
XANADU MINES: EXPLORATION AT THE KHARMAGTAI DEPOSIT WAS SUSPENDED IN FEBRUARY
On Tuesday, Xanadu Mines Ltd., copper and gold exploration company with several advanced exploration projects in Mongolia’s highly mineralised and vastly underexplored south Gobi region, made a statement related to the COVID-19 impact on its operation.
The company’s main project, diamond drilling at the Kharmagtai deposit in Umnugovi province, temporarily halted in February. “We have not seen a significant impact on our business to date. However, although there are currently no restrictions on transportation locally, any further deterioration of the situation may result in quarantines and affect Xanadu’s ability to undertake exploration activities in the South Gobi,” the company said in a report.
“It is not possible to estimate the impact of the outbreak’s near-term and longer effects or Governments’ varying efforts to combat the out-break and support businesses. This being the case, we do not consider it practicable to provide a quantitative or qualitative estimate of the potential impact of this outbreak on the Group at this time.”
Source: ZGM Daily
Click here to view the Xanadu release
GOVERNMENT WELCOMES SUPPORT FROM FACEBOOK
The Ministry of Health, Government of Mongolia, has received sponsorship from Facebook to help it to launch public education campaign about COVID-19 on the social media platform. Facebook has provided free advertising support to the health ministry, which is now working with other government departments including Communications and Information Technology Authority (CITA), to keep Mongolian people well informed of latest and most authoritative information related to the situation of COVID-19.
The public education campaign launched by the health ministry via its official verified Facebook page (www.facebook.com/www.mohs.mn) focuses on accurate information about COVID-19 in an effort to combat the spread of coronavirus related misinformation. The health ministry also delivers real-time updates from national health authorities and organizations and will offer resources and tips to the people of Mongolia on how to stay healthy, prevent the virus, and support your family and community.
Source: Montsame
BARLOWORLD DELAYS MONGOLIAN ACQUISITION AMID COVID-19 DISRUPTIONS
Logistics and fleet management group Barloworld has delayed its acquisition of a Caterpillar dealer in Mongolia until October due to the Covid-19 outbreak.
The group said in February it had agreed to purchase Wagner Asia Equipment, though the group now said travel restrictions have delayed the transaction, which had been scheduled to be completed on April 1.
In terms of the sale Barloworld will acquire 100% of Wagner Asia Equipment and 49% of SGMS in the mineral-rich country for R3.252bn.
The target companies are engaged in the business of selling and distributing construction equipment, mining equipment, power systems and related goods and services in Mongolia, primarily under the Caterpillar brand.
Barloworld also warned the coronavirus is expected to further weigh on its operating environment, which had already been under pressure from weak consumer demand in SA, volatile commodity prices and depressed consumer demand.
Source: BusinessLive.co.za
