EK HAS ACQUIRED THE SOLAR PV
POWER PLANT PROJECT COMPANY ERCHIS UNDRAGA LLC
As the developer of the biggest wind power plant
Sainshand Wind Park, Euro Khan has been active in renewable energy sector for the
past years. After long and proactive negotiation, we have jointly acquired the
majority of the shares Erchis Undraga LLC together with our partner VSB Holding
GmbH at the end of May to further develop 30 MW Solar PV power plant in
Arvaikheer city, Uvurkhangai. The power plant will supply electricity to
Central Energy System and ensure the reliable use of electricity in the region.
Most of the licenses and approvals have been issued to the project company and
we strongly believe the project will be a success.
Economy
·
Fiscal Framework Statement predicts
·
FDI up by 7.5 pct in Jan-April
·
BoM injects USD 850 million throughout this year to stimulate economy
·
Demand for investment rises in agriculture as livestock heads increase
·
Oil price decline may impact Mongolia’s fuel prices
·
Nonperforming loans jump by MNT 84.5 billion
·
EU scheme to support Mongolia yak and camel wool trade
·
World Competitiveness Ranking 2019 introduced
·
NASA imagery: The Urbanization of Ulaanbaatar
·
Capital safer for foreign tourists with student volunteers
·
The railway riddle – Editorial
Business
·
Mongolia braces for delay of state coal giant’s IPO
·
InvesCore NBFI IPO oversubscribed
·
Oyu Tolgoi seeking Supply of Made in Mongolia Winter boots
·
Registration of Trademark Abroad
·
Mongolia-Kazakhstan business meeting takes place
·
Mongolia-Poland business forum to take place
·
Seoul-based Rhinos Asset Management launches Mongolian subsidiary
·
HempMongolia makes history with first trials
·
Steppe Gold is Mining Responsibly in Mongolia
·
Road to 2022 World Cup begins in Mongolia
·
Blockchain – The internet’s new revolution
THE MAIKHAN HYDRO POWER PLANT
PROJECT TOOK ONE STEP FORWARD
EK has been codeveloping the 12-18 MW HPP project in
Bayan-Ulgii province since April. The technical committee of Energy Regulatory
Commission has evaluated and decided to issue the special license to build
hydro power plant to the project company on Wednesday, June 5. The special license
is one of the main approvals that are issued by the government agencies within
the development of renewable energy project in Mongolia. The project team is
now focusing on approvals for feed-in-tariff and Power Purchase Agreement.
EK HAS ATTENDED ESCAP PROJECT
MEETING ON REGIONAL ENERGY CONNECTIVITY
On June 6, a parallel session themed ‘Promoting
Energy Cooperation in Northeast Asia’ of the Sixth International Conference of
the ‘Ulaanbaatar Dialogue on Northeast Asian Security’ was organized by the United
Nations Economic and Social Commission for Asia and the Pacific and European
Union.
In the first half of the session, participants
exchanged views on regional countries’ prospects for strengthened Northeast
Asian energy cooperation as well as recent developments in neighboring
countries’ energy relations. Stressing that it is technically and economically
feasible to connect the regional countries to an integrated power system, they
unanimously pointed out the need for coherence between political support and
coordination.
In the session’s second part, EU specialists and
researchers gave presentation on Europe’s experience of building an integrated
energy system.
CHILDREN’S DAY
EK prepared customized children’s books age and
interest from our organization to our beloved kids. Children were excited and
happy about their parent’s company gifts.
EK HAS ATTENDED GERMAN GALA
CONCERT
To mark the 45th anniversary of the establishment of
diplomatic relations between Germany and Mongolia, the German Embassy Ulaanbaatar
organized a gala concert of German classical music on June 6 at the Mongolian
State Academic Theatre and Opera. EK was one of the sponsors of this
event. For the first time in many years, on this occasion the orchestras
of the opera house and philharmonic hall were together on stage under the
direction of the German conductor Thomas Hennig. Highlight of the event was the
guest contribution of the renowned Mongolian baritone, G. Ariunbaatar, who
presented Franz Schubert’s “Serenade” together with the choir and soloists of
the opera house in German language. The Ambassador of the Federal Republic of
Germany highlighted the valuable relations between Mongolia and Germany that
were – on the cultural perspective – also seen on stage on that day and as a surprise
he conducted himself the last piece of Johan Strauss’ “Radetzky March”.
CFT REPRESANTATIVE VISITED EK
On June 6th CFT GmBh Sales Director Michael Kuerten
visited Mongolia. EK employees received certified CFT product training from Mr.
Kuerten. He did site visit and met local clients during his visit in Mongolia.
ECONOMY
FISCAL FRAMEWORK STATEMENT
PREDICTS
Mongolia’s legislative body
approved the Fiscal Framework Statement last week, approving the economic
prediction of next year, draft fiscal framework for 2020 and 2021-2022 budget.
The key indicators of the next year’s fiscal policy are written below.
Experts warn that in the coming year, the economic crisis may embrace the
global market. Mongolia’s economy expanded by 8.6 percent in the first quarter
of this year and has seen an unprecedented increase in the last few years. This
year’s growth is expected to decline, according to the Fiscal Framework
Statement. As a result, GDP growth is expected to stand at about 6 percent. The
Asian Development Bank and the World Bank are slightly optimistic about the
GDP growth of Mongolia with 6.3- 6.9 percent growth estimations. The World
Bank forecasted Mongolia’s GDP to grow 6.5 percent in 2021. Economic growth is
expected to be supported by mining, agriculture, industry, and services.
Source: ZGM Daily
FDI UP BY 7.5 PCT IN JAN-APRIL
Mongolia has attracted foreign direct investment
(FDI) worth 661.8 million U.S. dollars in the January-April period, up by 7.5
percent year-on-year, the country’s central bank said Thursday.
Over 90 percent of the FDI goes to the Oyu Tolgoi copper-gold mine, which is
partly owned by the Mongolian government, the Bank of Mongolia said in a
statement.
The mine is expected to produce an average of 430,000 tons of copper and
425,000 ounces (about 12,050 kg) of gold annually for 20 years.
It will attract at least 1.3 billion U.S. dollars of FDI this year, making up
one third of government revenue in 2019, according to the Mongolian Finance
Ministry.
Mongolia is rich in natural resources, and FDI in the mining sector has been
one of the main drivers of the country’s economic growth.
Source: Xinhua
BOM INJECTS USD 850 MILLION
THROUGHOUT THIS YEAR TO STIMULATE ECONOMY
The Bank of Mongolia (BoM) pumped USD 850 million
into the banking system to intervene in the growing USD rate this year. Officials
are highlighting the fact that the net amount of the first few months of this
year is nearing the full year funds of 2018.
The BoM is continuing to inject liquidity to strengthen the weakening exchange
rate of the MNT, as well as holding a policy to increase foreign currency
reserves. Although the FX reserves have increased by 3-4 times over the past
three years, international organizations previously estimated FX rates to
stabilize if the reserve expanded by another USD 1-2 billion. Accordingly, the
greenback reserves, which currently stands at about USD 3.8 billion, need to to
reach at least USD 5.5 billion in the following years.
As of April 18, the BoM purchased USD 660 million from “Oyu Tolgoi”, “Erdenet
Mining Corporation” and “Erdenes Tavan Tolgoi” LLC this year.
Source: ZGM Daily
DEMAND FOR INVESTMENT RISES IN
AGRICULTURE AS LIVESTOCK HEADS INCREASE
According to the statistical data on the growth of
livestock heads in Mongolia, the share of livestock in the macroeconomy is
declining, calling for investment in the field. The agricultural sector
accounts for only about 10-15 percent of the gross domestic product (GDP)
according to the Ministry of Food, Agriculture and Light Industry (MOFA). The
amount falls further for animal husbandry.
Foreign trade partners and delegations tend to emphasize the potentials of
animal husbandry in Mongolia; however, the agriculture accounts for only
0.04-0.08 percent of direct foreign investment (FDI) in Mongolia. The sheer
amount displays the investors’ interest and value in the sector. The
agricultural sector, especially, animal husbandry is highly dependent on the
weather condition. The sun, wind, and rain affect the number of livestock and
benefits of it. The traditional animal husbandry sector has been facing
difficulties due to risks including the carrying capacity of a pasture, the low
livelihood of herders, and animal diseases.
Source: ZGM Daily
OIL PRICE DECLINE MAY IMPACT
MONGOLIA’S FUEL PRICES
Crude oil prices fell for five consecutive days
reaching the lowest level in May, which is likely to have an effect on
Mongolia’s economy and potentially reduce fuel price. Brent crude price slumped
0.51 percent to USD 60.97 per barrel on Wednesday. Brent crude oil price, which
reached USD 75 since late April, decreased around USD 15 over the last month.
Particularly, the price of oil decreased by USD 9 per barrel last week, which
was a multiple-month sharp drop. However, the decline in crude oil prices will
not have immediately trigger Mongolia’s fuel price to decrease. The oil price
changes takes longer time to have an effect on Mongolia’s economy.
The joint council on fuel price held a meeting on Tuesday and submitted a
suggestion containing four or five articles. “Global price of oil usually rise
in April and May. In addition, commodity prices rose in recent months, due to
the Iranian ban and Libya and Venezuela crisis. However, prices are likely to
decline this month.
Source: ZGM Daily
NONPERFORMING LOANS JUMP BY MNT
84.5 BILLION
At the end of April, the amount of outstanding loan
to entities, enterprises and individuals amounted to 17.5 trillion MNT, up by
182 billion MNT (1.1 percent) from the previous month and by 3.2 trillion MNT
(21.9 percent) from the same period of last year.
On the other hand, the number of new loans issued to individuals increased by
28 percent to stand at 9.1 trillion MNT as the number of new loans issued to
private organizations rose by 15 percent, reaching 8.2 billion MNT.
While loan performing normally rose by 31 billion MNT, or 0.2 percent, from
March to April this year, nonperforming loans hiked by 84.5 billion MNT, or 4.5
percent. Loans to private organizations account for 85 percent of all
nonperforming loans.
As for overdue loans, 79 percent belonged to organizations.
Source: The UB Post
EU SCHEME TO SUPPORT MONGOLIA
YAK AND CAMEL WOOL TRADE
An EU-funded initiative is to support the
development of the yak and camel wool trade in Mongolia, helping to improve
access to international markets and the formation of partnerships with foreign
companies.
A meeting of the TRAM project – Trade Related Assistance for Mongolia (EU TRAM)
– last month discussed establishing a yak and camel wool cluster to manufacture
end products and promote them overseas.
According to the MNCCI, the aim is to create high-standard products as competitive
as Mongolian cashmere goods.
Launched in March last year, EU TRAM is a four-year project, worth almost EUR5m
(US$5.6m) with the aim of increasing and expanding Mongolian exports, and
contributing to sustainable economic growth and development of the country. It
has a special focus on specific products/sectors with high potential for
export.
Mongolia has preferential duty-free access to the EU market under GSP+ scheme,
yet there is low usage of these benefits due to low capacity of Mongolian
products to fulfil EU market requirements.
Source: Just-Style.com
WORLD COMPETITIVENESS RANKING
2019 INTRODUCED
On June 3, Economic Policy and Competitiveness
Research Center introduced IMD World Competitiveness ranking 2019.
This year, Singapore, Hong Kong and the USA topped the ranking. Mongolia is
ranked at 62nd, remaining unchanged from previous year’s ranking.
Mongolia’s consumer price index or inflation, living cost and rental costs of
apartments and offices ranked lower as compared with that of other countries,
reported I.Odonchimeg, deputy director of EPCRC.
In the economic performance category, one of four basic categories, Mongolia is
ranked at 58th. Last year, it stood at 48th in the same category. The decline
of Mongolia’s competitiveness score was mainly influenced by the worsening
indications of current account, transparency and pension fund, alongside
weakness of employment, business law, health, environment and educational
index.
Since 2010, The EPCRC, in cooperation with the World Competitiveness Center,
has been publishing Mongolia in World Competitiveness Report.
Source: Montsame
NASA IMAGERY: THE URBANIZATION
OF ULAANBAATAR
Mongolia’s capital, Ulaanbaatar, sits near the
confluence of the Selbe and Tuul rivers on a plateau at the foot of a large,
forested mountain. This was not always the case. When the town was initially
established in the 1600s, it was a migratory settlement built as a center for
Buddhist priests. It changed locations more than two dozen times.
Several teams of scientists have used Landsat images to monitor how the
city—particularly the ger districts—have changed over several decades.
According to some estimates, ger districts now hold more than 60 percent of
Ulaanbaatar’s population.
The Landsat 7 and 8 satellites captured these natural-color images of the city
in 2000 and 2018. Notice the development in the river valleys (green linear
features) that lead out of the city. Note also how forested areas in the hills
north and south of the city have lost tree cover over the years, probably due
to people harvesting wood to heat their homes.
Source: NASA
CAPITAL SAFER FOR FOREIGN
TOURISTS WITH STUDENT VOLUNTEERS
A total of 40 selected students are working in the
Mongolian capital as volunteers to provide information services for foreign
tourists as part of local efforts to boost tourism, according to a local official
Tuesday.
The students who are proficient in English are expected to provide foreign
tourists with all the information they need and protection-related services
during the tourism peak season or until the end of August. They started working
on Monday under an annual program launched six years ago, which is aimed at
making Ulan Bator a safer place for foreign visitors.
“Majority of foreign tourists visiting Mongolia travel through the capital
city. So, ensuring the safety of tourists is one of the priorities for us,”
Tsend Enkhtuvshin, deputy head of Ulan Bator’s tourism department, told Xinhua.
Source: Xinhua
THE RAILWAY RIDDLE – EDITORIAL
As he laid the foundation stone of the 414.6-km
railroad between Tavantolgoi and Zuunbayan on May 24, President Kh. Battulga
noted that something was at last happening on the ground to implement the State
Policy on Railway Transportation adopted by Parliament in 2010. For nine years,
he said, domestic politics and politicians with personal stakes in coal mining
had not allowed anything to move.
Recalling his days as Minister of Road Transportation in the coalition
government, Battulga said he had tried to build the railroad in the northern
part of the country. He had formed a team, determined routes, signed
agreements, laid foundation stones, obtained loans and had spent some of the
money, too. Yet, not one km of railroad has been built. There is only piled
earth and crumbling embankments on the route from Tavantolgoi to
Gashuunsukhait. The government is paying interest on the $200-million loan and
the principal must be repaid in 2022.
Source: Mongolian Mining Journal
BUSINESS
MONGOLIA BRACES FOR DELAY OF
STATE COAL GIANT’S IPO
The head of Mongolia’s parliament said that plans to
list the state company that controls one of the world’s largest coal mines
could be delayed.
Gombojav Zandanshatar, chairman of the State Great Hural, told the Nikkei Asian
Review in an interview that elections and other factors could impede the market
debut of miner Erdenes Tavan Tolgoi this year. He was speaking on the sidelines
of Nikkei’s Future of Asia conference, held on Thursday and Friday, in Tokyo.
Previously, Erdenes had unveiled plans to raise up to $3 billion in a public
stock offering in Hong Kong within 2019.
Mongolia plans to hold a general election in 2020. And in a by-election this
June, more than 10 parties will compete to fill a seat that was left vacant
after a parliament member stepped down following a rape allegation.
Source: Nikkei Asian Review
INVESCORE NBFI IPO
OVERSUBSCRIBED
‘Invescore NBFI’ JSC, the fourth newly listed
company on the Mongolian Stock Exchange in 2019, has offered its 1,613,878
shares or 15 percent of the total outstanding shares to strategic investors and
public. The subscriptions were received from May 22nd 2019 until May 30th 2019.
The subscription for the stock from public has reached MNT2,899,735,069 which
was an oversubscription of 15.9 percent, ordered by 336 investors. With regard
to the subscriptions from strategic investors, 14 investors have subscribed for
shares worth MNT16,004,292,500 which was an oversubscription of 6.1 percent.
The shares were offered by the book building approach in accordance with the
“Primary Market Trading Rules of MSE” and the price has been set at MNT1600 for
public subscription. The orders placed at the price lower than MNT1600 will not
be fulfilled and the orders placed at the price above MNT1600 will be fulfilled
at the proportion of 90.84%. The orders received from strategic investors have
been fully fulfilled.
Source: Mongolian Stock Exchange
OYU TOLGOI SEEKING SUPPLY OF
MADE IN MONGOLIA WINTER BOOTS
“Oyu Tolgoi” LLC would like to invite potential and/or
experienced suppliers to submit their Expression
of Interest (EOI) in relation to supply of Made in Mongolia Winter Boots.
The supplier will be required to carry out all of, but not limited to, the
following work
Scope description:
Manufacture winter safety boots in Mongolia:
Winter Safety boots should comply with following requirements:
– Designed for outdoor work (during winter season only)
– Working temperature up to -70C degrees
– Need to be comply with ISO 20345:2004
– Toecap for providing protection against impact level of 200 Joules
– Water resistant leather
– Penetration resistant
– Slip resistant sole
– Oil and Acid resistant sole
– Cut, split and crack resistant sole
– Shock absorbing
– SIZE: 39-46 EURO
– Estimated usage per annum is 700 pair
for operational use in Oyu Tolgoi Mine site located in Umnugobi aimag,
Mongolia.
Source: Oyu Tolgoi
See also: Turquoise Hill appoints
Jo-Anne Dudley as Chief Operating Officer
REGISTRATION OF TRADEMARK
ABROAD
The product and services of a company is considered
to be its image and furthermore can become the main capital source of it. Any
business enterprises with a well-known trademark has an advantage of
maintaining and enhancing its competitive position in the market.
The legally registered trademark is a source for the prevention of the usage of
the same trademark by other parties and the protection of your legal rights and
interests as a trademark owner. Although there is no legal requirement for the
registration of company’s trademark, it constitutes an exclusive right that
aimed at protecting the rights of the eligible trademark owner from any usage
of similar or consumer-confusing trademarks by others.
In case you are interested in protecting your rights in relation to the trademark,
that is the result of your precious time and effort, from any violations both
in Mongolia and abroad, the registration of it will be of a crucial importance.
Source: LehmanLaw Mongolia
MONGOLIA-KAZAKHSTAN BUSINESS
MEETING TAKES PLACE
Mongolia-Kazakhstan business meeting took place on
June 4. More than 20 representatives of 11 companies from Kazakhstan in
food production, heavy machinery, tech assembly, pharmacy, construction and
automotive manufacturing are participating in the business meeting being held
by the Mongolian National Chamber of Commerce and Industry (MNCCI), the
Foreign Trade Chamber of the Republic of Kazakhstan, the Ministry of Industry
and Infrastructural Development of Kazakhstan and the National Chamber
of Entrepreneurs of Kazakhstan ‘Atameken’.
“Trade turnover of Mongolia reached USD 4.1 billion as of last April and it is
an insufficient result that the country is engaging in trade with Kazakhstan
equal to 0.2 percent of it,” MNCCI President O.Amartuvshin said.
To support regional cooperation, Mongolian part intends to put request to the
Eurasian Economic Union (EAEU), in which Kazakhstan has a membership status, to
give preference on transportation logistics, which is crucial condition for
Mongolia.
Source: Montsame
MONGOLIA-POLAND BUSINESS FORUM
TO TAKE PLACE
On June 3, Chairman of the Mongolian National
Chamber of Commerce and Industry (MNCCI) O.Amartuvshin met with Ambassador of
the Republic of Poland to Mongolia Krzysztof Bojko.
At the meeting, Ambassador Krzysztof Bojko informed that Undersecretary of State
of the Polish Foreign Ministry Maciej Lang is to pay an official visit to
Mongolia on July 9-13 and requested support for the Mongolia-Poland business
forum to be held during the visit. The business forum is scheduled to be
organized on July 9 with attendance of major agricultural, food, and
pharmaceutical companies of Poland.
Mr. O.Amartuvshin expressed his readiness to cooperate in all ways including
promoting business and trade turnover between Mongolia and Poland and ensuring
Mongolian entities’ involvement in the forum.
Source: Montsame
SEOUL-BASED RHINOS ASSET
MANAGEMENT LAUNCHES MONGOLIAN SUBSIDIARY
Seoul-based investment company Rhinos Asset
Management said on June 4 that it had opened a wholly owned overseas subsidiary
in Mongolia a day prior.
This marks the first time that a foreign entity has begun to operate an asset
manager in Mongolia.
The company was established in December last year and obtained a regulatory
license in March, with capital of 526.9 million Mongolian tugrik ($196,100).
Rhinos Asset Management Mongolia during the opening ceremony announced a
corporate debt fund of $11 million to invest in debt issued by Mongolian
financial technology startup AND Systems. The startup raised $2.8 billion
funding from Rhinos in November 2018. Rhinos created Mongolia’s first corporate
debt fund in April.
Rhinos said in a statement that the new Mongolian unit aims to lay the groundwork
for deal-sourcing capabilities in Mongolia, Russia and Central Asia.
Source: TheInvestor.co.uk
HEMPMONGOLIA MAKES HISTORY WITH
FIRST TRIALS
A bold initiative to grow hemp on a massive scale on
the plains of eastern Mongolia moved a step closer to reality last week as
startup HempMongolia LLC put in the country’s first official hemp grow.
HempMongolia is carrying out trials involving a high-CBD (12-14% CBD; 0.2% THC)
variety it obtained from Spanish breeders, crossbred with Mongolian varieties
to produce an F1 strain. “We want to see how it adapts to local soil and
conditions.” Anar said.
The overall inaugural grow comprises two 8mX50m greenhouses the company
installed near the city of Chinggis on the northern bank of the Kherlen Gol
River. The hybrid trials are in one structure, while strictly Mongolian strains
are being tested in the second. Irrigation is from deep wells that draw pristine
water at ph5-ph6.5, pumped to a reserve basin from which it is piped to the
greenhouses as needed. Local soil is being used with local manure as
fertilizer.
Source: HempToday.net
STEPPE GOLD IS MINING
RESPONSIBLY IN MONGOLIA
Steppe Gold was featured in an article by the
Mongolian Mining Journal about the company’s responsible mining initiatives at
its Altan Tsaagan Ovoo (ATO) project in Mongolia. The 5,393-hectare ATO project
is located in the province of Dornod and is located 152 kilometers away from
the town of Choibalsan. In May 2019, Steppe Gold invited the Mongolian media to
ATO for a mine site visit and tour as a way to help keep the public informed of
its operations as the company pushes the project towards production.
The article outlined the stages that mining companies, such as Steppe Gold,
must go through before they can go into production. Mining companies must get approval
for their pre-feasibility study, mine plan and environmental impact assessment
(EIA) and then keep to the standards set in these plans and assessments upon
implementation. According to the article, Steppe Gold spent over MNT$90 million
on environmental and reclamation studies that were focused on reducing negative
impacts within a 10-kilometer radius of the mine.
Source: InvestingNews.com
See also: Mining
responsibly: A day at Altan Tsagaan Ovoo
ROAD TO 2022 WORLD CUP BEGINS
IN MONGOLIA
The long road to the 2022 World Cup finals begins in
the footballing backwaters of Mongolia on Thursday as the first games that
count towards qualification for Qatar are hosted in Asia.
Mongolia, who have only ever won a single World Cup qualifying match, host
Brunei Darussalam in the first of six first round qualifiers across Asia, which
also serve as early round eliminators for the next Asian Cup in 2023.
The match takes place at the Mongolian Football Federation stadium in Ulan
Bator at 0900GMT, before other games in Laos, Macau, Cambodia and Bhutan and
one on Friday in Malaysia. The arena, built from FIFA funding, has a
5,000-capacity and an artificial pitch against the backdrop of the Mongolian
steppes.
It is the second time in a row Mongolia, 187th in the FIFA rankings, are involved
in the first game of a World Cup qualifying campaign. They were beaten 4-1 away
by Timor-Leste in the Russia 2018 preliminaries but the result was later
expunged when it was discovered the home team was packed with Brazilians.
Source: EuroNews.com
BLOCKCHAIN – THE INTERNET’S NEW
REVOLUTION
With the creation of financial assets based on
blockchain technology, Mongolia is seeing a rise of companies established to
attract foreign investors to make investment in real estate and fixed assets.
An example would be Truss Chain LLC. As a result, the competition to attract
investors by offering a new financial product based on blockchain or other new
technologies is growing fiercer in Mongolia. Currently, over 20 different
companies offer financial technology services (Fintech). Some of these
companies, including LendMN, Ard App, K Mobi, and Numur, offer short-term micro
loans. Some, such as Crowd Asset, provide crowdfunding, while others including
zeel.mn facilitate loans between people via P2P. Most Money and Candy Pay offer
‘wallet’ services that allow people to make payments in an easier way. In
addition, there is a digital bank named M Bank. Some companies have even
started making investments in other countries.
Source: Jargal DeFacto
