EURO KHAN HAS MADE A CONTRACT WITH ONE OF THE BIGGEST COKING AND THERMAL COAL DEPOSIT MINE ERDENES TAVAN TOLGOI JSC
Due to increased environmental regulations and awareness of both Mongolian authorities and national and international investors, Erdenes Tavantolgoi and Euro Khan have agreed to prepare a mine closure and remediation study according to the best international practice and signed a contract last week.
The study will cover two of Erdenes Tavan Tolgoi JSC’s opencast mines in the Tavan Tolgoi deposit, both located close to each other in the territory of Umnugobi Province, Tsogttsetsii soum and will last approximately 5 months.
EURO KHAN SIGNED CONTRACT WITH ERDENES MINING CORPORATION SOE
Euro Khan successfully awarded Erdenet Mining Corporation’s Heavy equipment bearing supply tender on December 5. The Heavy equipment bearing supply contract signed on December 27. Euro Khan’s Sales Manager Mr. Zolboo Bold will hand over the goods on December 30 to EMC.
We believe that Euro Khan LLC and Erdenet Mining Corporation SOE will continue to strengthen the partnership and cooperation well into the future.
EK GREETINGS FOR THE SEASON
With sincere appreciation for your continued support and partnership, we wish you a joyous holiday season and a New Year filled with success and happiness. May the year 2020 bring prosperity in your business and career.
ECONOMY
BOM: POLICY RATE LEFT UNCHANGED AGAIN
The Bank of Mongolia (BoM)’s Monetary Policy Committee presented the last policy rate decision. Some of the members suggested to reduce the monetary policy rate by 0.5 percent, but it remained at 11 percent as the majority of the committee members have agreed. It also decided to increase the official foreign currency reserve ratio of commercial banks by three units to 15 percent.
Lkhagvasuren Byadran, President of the Bank of Mongolia said, "In connection with the slowdown in economic growth and easing lending, the Monetary Policy Committee discussed reducing interest rates. However, given the performance of the Fiscal function and the uncertainty of the external environment, we decided not to change the monetary policy rate this time. To decision has been made to increase relative foreign exchange reserves by three units to maintain relative returns and to reduce fluctuations in tugrik.”
Source: ZGM Daily
View the BoM Statement
See also: Mongolia maintains rate but raises FX reserve ratio
WEIGHTED AVERAGE INTEREST RATE ON NEW LOANS NOVEMBER AT 17 PERCENT
According to the Bank of Mongolia’s statistics, the weighted average interest rate on new loans issued in November was 17 percent. The average interest rate on loans which fell to 16.8 percent in the previous month increased by 0.2 percentage points.
However, the interest rate has dropped by 0.2 percentage points since the beginning of the year. Particularly, the average interest rate on loans issued to citizens in the corresponding month reached 16.9 percent and to private entities 17 percent.
“Stable macroeconomic environment contributes to lower interest rates,” said director of the BoM’s Statistics Department. The central bank’s interest rate reduction strategy is in progress with 60 percent.
A total of 340 measures were taken within the framework of the strategy. Most recently, the Bank of Mongolia has kept the policy interest rate at 11 percent. The policy rate has been maintained steady for the last year.
Source: ZGM Daily
MONGOLIA RECEIVES NO FUNDING UNDER THE EFF PROGRAM IN 2019
Under the IMF’s Extended Fund Facility (EFF) program in Mongolia, no additional funding has been provided in 2019. Thanks to the program, international banks and donor countries have issued USD 728 million to Mongolia in 2017.
In 2018, total funding of USD 300 million out of expected USD 836 million have been issued. In other words, the country received almost USD one billion funding since the beginning of the EFF program, which is due in May 2020.
Therefore, the currency swap arrangement between the Bank of Mongolia (BoM) and the People’s Bank of China will end in August 2020. The agreement allowed the two central banks to swap CNY 15 billion (USD 2.2 billion) for MNT 5.4 trillion.
The countries first entered into the swap arrangement in 2011 and it was extended three times in 2012, 2014 and 2017. The extension agreement, which began in Shanghai in August 2019, is ongoing and has not been finalized.
Source: ZGM Daily
MONGOLIA'S FOREX RESERVES EXPECTED TO REACH 4.2 BLN USD BY END-DECEMBER
Mongolia's foreign exchange reserves are expected to reach 4.2 billion U.S. dollars by the end of this year, the country's central bank said Friday.
"Currently, our country has a total of 4 billion U.S. dollars of foreign exchange reserves. The number is expected to reach 4.2 billion U.S. dollars by the end of this year," said Byadran Lkhagvasuren, governor of the Bank of Mongolia, at a press conference.
He said the Mongolian central bank has been striving to continuously increase its foreign exchange reserves to ensure economic stability.
The mineral-rich Asian country's foreign exchange reserves reached 3.5 billion dollars by the end of 2018, up almost 20 percent from the previous year.
Source: Xinhua
BOM AND ERDENES MONGOL SIGN AGREEMENT WORTH USD 500 MILLION
Erdenes Mongol LLC, Erdenes Silver Resources (ESR) and Bank of Mongolia (BoM) have concluded a sale and purchase agreement for precious metals yesterday and sent a sample of the refined silver from the Salkhit silver deposit to the State Treasury. Within the five-year agreement, ESR will extract pure silver, which is worth USD 500 million in forex reserves in cash, and send the silver from the Salkhit Silver Deposit to the Treasury Bank of the Treasury. As a start, the BoM will receive a silver with a price of at least 850-980 specimens. “The recently adopted Constitution amendment has begun to take effect, making an opportunity to
the people for equal access. Furthermore, the agreement signed between Erdenes Silver Resources and the Bank of Mongolia will result in major treasury management activities, including pledging gold and silver bonds,” said Parliament Speaker, Zandanshatar Gonbojav in the signing ceremony.
Source: ZGM Daily
See also: Erdenes Silver Resource LLC to refine 750 tons of silver within five years.
CONSTRUCTION INDUSTRY FACES RISK OF SLOWING DOWN
The Bank of Mongolia (BoM) will implement the eight-percent mortgage lending program jointly with the government until 2020. The construction market has grown 5.3 times over the last six years as the mortgage loan program with an annual 8 percent interest rate was initiated in 2013. Regarding the IMF’s Extended Fund Facility (EFF) program, the central bank plans to halt the mortgage loan funding next year, risking the market to decline.
“The government budgeted only MNT 60 billion for the program, which plays an important role in decreasing air pollution, and it may carry risk for the construction sector,” said Hashchuluun Chuluun- dorj, Member of Monetary Policy Council of the Bank of Mongolia.
He also addressed that the budgeted funding is not adequate for supporting the sector to develop. In other words, government funding will shrink three times in 2020 com- pared to this year; current funding will be cut as the central bank exits the project.
Source: ZGM Daily
ENTREPRENEUR 2019 SELECTS TOP NATIONAL ENTITIES
Promoting top entities and businesspeople who contribute to the national economy, the Entrepreneur Ceremony took place on December 20, 2019 for the 23rd year organized by the Mongolian National Chamber of Commerce and Industry (MNCCI).
The top entities that immensely contributed to the Mongolian economy were selected in recognition of their annual business achievement, profits, social responsibility, employment, export and others. This year’s Entrepreneur Grand Prix went to ‘Erdenet’ State-owned Enterprise. This year’s Top-10 entities were Oyu Tolgoi LLC, ‘Energy Resource’ LLC, Nomin Holding LLC, TESO Corporation, Suu JSC, MCS Coca Cola LLC, Monos Group, Khanbogd Cashmere LLC and Uguuj Chikher Boov LLC.
Moreover, the Trophies were awarded to companies in 26 nominations including national producer-entrepreneur, excellence in governance, exporter-entrepreneur as well as others.
Source: Montsame
NEW WORLD BANK LOAN APPROVED TO BOOST PRODUCTIVITY OF MONGOLIA’S LIVESTOCK SECTOR
The World Bank’s Board of Executive Directors approved US$30 million in loan financing for the Mongolia Livestock Commercialization Project on December 13. The project will help improve the health and productivity of livestock and increase value of products such as meat and dairy by commercializing targeted value chains in selected locations.
With more than 60 million livestock and wide pasturelands, the Mongolian agriculture and livestock sectors have huge potential to drive economic diversification and as a key source of broad-based employment.
However, major challenges such as low productivity, animal health issues, and vulnerability to climate change and extreme weather events, limit the sector’s potential. About 56 percent of Mongolia’s herders own 200 head or fewer of livestock and are trapped in a low-input, low-output, low-productivity cycle. Animal disease, coupled with poor food hygiene and inadequate nutrition, limit the output and quality of meat and dairy products.
Source: World Bank
TRAVELLERS CAN NOW BRING MORE CASH INTO MONGOLIA
When travelling, it makes sense to many people to carry some cash. Most countries have laws about how much cash you can cross their borders with. As for Mongolia, travellers may bring up to MNT 15 million in currency, coins and specific monetary instruments without having to make a customs declaration. According to the Mongolian Custom Agency, the limit of cash money to bring up country was MNT 5 million; it now has been raised by three times. Please note, today’s exchange rate is MNT 2730.91 to the dollar.
If you bring more than the limit into the country, this must be notified to customs, otherwise you will be fined or, worse still, risk having your money confiscated.
The purpose of the customs cash limit is to catch criminals and prevent money being used to fund illegal activity like money laundering or drug trafficking.
Source: News.mn
BOM MONETARY POLICY COMMITTEE MEMBER: MONGOLIA’S ECONOMIC GROWTH IS LIKELY TO SLOW AMID GLOBAL TENDENCY - INTERVIEW
Bank of Mongolia (BoM) recently made its monetary policy decision, which is the last in 2019, and kept the policy rate unchanged at 11 percent. Munkhbayar Tsedevsuren, member of the BoM’s Monetary Policy Committee gave an interview to discuss the recent announcement of the central bank and economic outlook in Mongolia.
-Monetary Policy Committee of the central bank maintained the policy rate for three consecutive meetings this year. Especially, the last decision has been made amid suggestions to decrease the rate slightly. What was the main reason to keep policy rate unchanged again?
-Well, inflation is likely to be stabilized around the central bank’s target rate, economic growth may slow, and the
uncertainty in the economic situation may proceed. These are the main three reasons. Growth of the bigger economies is expected to decrease in the following year, which will affect Mongolia directly.
Source: ZGM Daily
BUSINESS
ASPIRE MINING TO PAY MNT 2.3 TRILLION IN TAXES OVER 10 YEARS
Aspire Mining Ltd, listed on the Australian Stock Exchange (ASX), announced to pay MNT 2.3 trillion for taxes to the state in the first 10 years of its Ovoot Coking Coal Project (Ovoot) implementation. Of which, about MNT 193 billion will be allocated to the Khuvsgul province budget.
Aspire is a large coal tenement holder in the Orkhon-Selenge Coal Basin in northern Mongolia with a 100 percent interest in the world-class Ovoot project, a 90 percent interest in the Nuurstei Coking Coal Project, and a strategic infrastructure owner via its 80 percent interest in Northern Railways LLC.The company plans to create at least 40 workplaces, employing at least 40 local people, through the Ovoot project. The Ovoot project has an estimated 227 million tons of coking coal resources, according to the Mineral Resources Professional Council.
Source: ZGM Daily
JAPANESE MEAT DEALER HUNGERS FOR FRESH START IN MONGOLIA
Meat dealer Aono Freshmeat is aggressively expanding its business in Mongolia, from machine leasing to farming, as small to midsize Japanese companies try their fortunes elsewhere to offset shrinking domestic market.
An aging and shrinking population has hit Japanese companies, particularly those in the countryside. Aono is based in Shizuoka, an area close to Mount Fuji. But unlike many other Japanese companies that have sought business opportunities overseas by moving or expanding away, Aono is investing in Mongolia in areas that have little relation to its main business, such as the leasing of heavy machinery for mining, greenhouse cultivation of vegetables and dairy farming.
The leasing service will start in 2020. It plans to rent five Japanese-made used power shovels and lease them to coal mining companies. Aono is also developing a gold mine in Mongolia and will use the machinery for excavation and will lease them out during the winter when the mine shuts down.
Source: Nikkei Asian Review
ELIXIR ENERGY COMPLETES THREE GAS WELLS AT ITS MONGOLIAN PROJECT
Elixir Energy Limited today provided an update on its drilling operations in its 100% owned Nomgon IX coalbed methane (CBM) production sharing contract (PSC) on the Mongolia-China border.
The three wells in the Ugtaal region in the mid-South of the Nomgon PSC (the Ugtaal-1 core-hole and the BO-CH-1 and BO-CH-2 chip-holes) are now finished and their respective sites are being remediated.
The Ugtaal-1 core-hole well has been logged and subjected to permeability testing. Key results so far include:
- Logging confirmed the prior estimate of net coals of 43 metres.
- The thickest individual seam recorded was 20 metres.
- Gas desorption is ongoing.
- Permeability testing results are expected next week.
The BO-CH-2 chip-hole well has also been logged and cores extracted. Key results at this point:
- Net coals of 6 metres were logged.
- Coal cores were taken for analysis.
- Permeability testing was not under-taken due to the hole diameter of this chip-hole well.
Source: FinFeed.com, TheMarketHerald.com.au
MNCCI OFFICE TO OPEN IN JAPAN
Ulaanbaatar /MONTSAME/ Founder of JETconnect co.,LTD of Japan Eiki Shigeta has been appointed as an Honorary Representative of Mongolian National Chamber of Commerce and Industry (MNCCI) in Japan. The MNCCI Honorary Representative office will thus officially open in Tokyo, Japan in March, 2020.
The representative office’s activities will target to expanding trade and economic cooperation between Mongolia and Japan, exporting wool and cashmere products to Japan, training skillful personnel, and implementing joint projects and programs.
Source: Montsame
MMC CHOOSES SERVICE SUPPLIERS
Mongolian Mining Corporation (MMC), listed on the Hong Kong Stock Exchange, has chosen Uniservice Solution and M-Armor as its service providers. The company signed an agreement worth MNT 36 billion with Uniservice Solution, which matures in 2022 and as much as MNT 26.9 billion worth agreement with M-Armor. MMC exported 4.5 million tons of coal as of November. The company's stock was down 1.45 percent since the trading started on Monday, reaching HKD 0.68.
Source: ZGM Daily
OT-SUPPORTED FUND BUILDS FIFTH KINDERGARTEN
A new kindergarten, which can take 100 children, has been opened in the Manla Soum in Mongolia’s South Gobi (Umnugobi) Province. The construction of the kindergarten has been fully financed by the Gobi Oyu Development Support Fund (DSF), sponsored by Oyu Tolgoi LLC. This is the fifth kindergarten building financed by the foundation.
The foundation has invested MNT 1.5 billion for the construction of the kindergarten and MNT 165 million for furniture, toys and other types of equipment.
In 2015, the Oyu Tolgoi LLC established a cooperation agreement with its partner communities – composed of South Gobi province aimed at working together towards sustainable development in important areas such as water, environment, pastureland management, cultural heritage, tourism, local business development and procurement. Under the agreement, Oyu Tolgoi makes a contribution of USD 5 million every year to the foundation, established in 2015.
Source: News.mn
ANALYZING ROYAL STANDARD MINERALS INC USA AND TURQUOISE HILL RESOURCES
Royal Standard Minerals Inc USA (OTCMKTS:RYSMF) and Turquoise Hill Resources (NYSE:TRQ) are both small-cap basic materials companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, institutional ownership, valuation, profitability, risk, analyst recommendations and dividends.
Risk & Volatility
Royal Standard Minerals Inc USA has a beta of -140.94, meaning that its share price is 14,194% less volatile than the S&P 500. Comparatively, Turquoise Hill Resources has a beta of 1.15, meaning that its share price is 15% more volatile than the S&P 500.
Profitability
This table compares Royal Standard Minerals Inc USA and Turquoise Hill Resources’ net margins, return on equity and return on assets.
Insider & Institutional Ownership
35.7% of Turquoise Hill Resources shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
Source: TechKnowBits.com
SAMPLE COLLECTION FROM ASGAT SILVER DEPOSIT WRAPS UP
Upon the Government resolution to transfer the special license for the Asgat silver deposit to the full ownership of Erdenes Mongol LLC state owned company and put under economic circulation, Mongolian emergency rescue officers and Asgat Kent Company worked at the deposit to open the deposit and collect technological sampling from November 1 to December 18.
As the deposit remained untouched for a long period of time, the local company of Asgat Kent did not have the sufficient capacity to rebuild the road to the deposit, collect sample for laboratory tests and open the mine shaft on its own. “Therefore, emergency rescue miners of the Emergency Management Agency of Mongolia worked together at the Asgat deposit with us” said director of Asgat Kent Company Kh.Muratai.
A total of 20 tons of sample was collected from a level of 250-meter below the ground in the deposit at 270-meter underground.
Source: Montsame
WHAT TO EXPECT FROM MONGOLIAN AIRLINES’ FIRST BOEING 787
MIAT Mongolian Airlines is set to receive its first Boeing 787-9 aircraft. It will enable the Ulaanbaatar based airline to fly to European and North American cities, opening up a whole raft of new possibilities for intrepid travellers.
The aircraft will join MIAT Mongolian Airlines through a lease agreement with Los Angeles based Air Lease Corporation. The plane is due for delivery in the northern spring of 2021.
It is only a single aircraft, but Boeing, no doubt happy these days with anything reflects well on them, was positively effusive. A Boeing spokesperson said in a statement;
“It will be wonderful to see the 787 Dreamliner in MIAT Mongolian Airlines’ livery flying in and out of Ulaanbaatar and connecting Mongolia with key destinations across Asia and Europe. The airline has continued to build on its proud aviation history by modernizing its fleet and operations. We are honoured MIAT has selected the 787 and its superior fuel efficiency and range to profitably grow their international network.”
Source: SimpleFlying.com
RUSSIAN ‘LADA’ CARS TO PATROL UB STREETS
The Ulaanbaatar City Police Department has been upgrading its patrol vehicles with Russian-made Lada cars. Over 20 Lada cars have been delivered to patrol the streets of the Mongolian capital. The police plans to buy an additional 65 cars in 2020.
Apart from its ‘Lada’ programme, the UB Police Department has successfully been implementing social campaigns such as ‘One Moment’, ‘No need to rush!’ and ‘Let’s understand and respect’ in 2019 for raising awareness against road accidents and changing public attitudes. As a result, crime statistics have fallen by 20 percent in 2019 on last year.
Source: News.mn
NEW APP TO EARN MONEY FROM WALKING LAUNCHED
An application to help residents of Ulaanbaatar city to avoid traffic jam and stay healthy has been recently launched.
The mobile application ‘We walk Mongolia’ converts daily step count into WePoint, which can be redeemed at application’s partner stores for discounts. A user can earn 300 points per each kilometer they walked and the maximum length of walk is 15 kilometers each day, which equals to MNT 4500.
Since its launch early December, 13 thousand users, mostly aged between 15-40, have already downloaded the ‘We walk Mongolia’ application, which is available on iOS and Android.
Source: Montsame
MSE CEO: TAX EXEMPTIONS CAN BE IMPLEMENTED ON STOCK INVESTMENTS - INTERVIEW
• Total trading in the stock market has reached mnt 139 billion, which is 15.7 percent increase compared to the same period of last year.
• As of December 23, the market capitalization of the Mongolian Stock Exchange (MSE) equals MNT 2.6 trillion. Altai Khangai, CEO of MSE sat down with the Official Gazette, highlighting the possibility to provide a tax benefit to the investors in the stock market.
-Trading in the stock exchange has fluctuated in recent weeks. What was the main reason?
-To sum up this year’s trading performance, IPO was markedly active. Four companies have joined the stock market, issuing their IPOs. Total trading in the stock market has reached MNT 139 billion, which is 15.7 percent increase compared to the same period of last year. Mongolian stock market lacks the professional investors and new products as the IPOs rapidly activate, causing unsteadiness in the secondary market.
Source: ZGM Daily
Q&A WITH BRANDON BOYNTON, WHO TAUGHT ENTREPRENEURISM IN MONGOLIA - INTERVIEW
Brandon Boynton has always been quick to help when needed. When he was 14, for example, he created an app so students could report bullying at school.
So when Boynton, an IUPUI computer science student and entrepreneur, was asked to go to Mongolia this fall as part of the U.S. Speaker Program, he jumped at the chance.
The initiative by the U.S. Department of State aims to help people worldwide understand the cultural context of U.S. policies and institutions. The Mongolian trip’s goal was to share entrepreneurial lessons with the formerly communist country.
And even though he’s just 22, Boynter co-founded Vemity, which created software that allowed companies to integrate artificial intelligence and machine learning without hiring a data scientist. Vemity was a 2018 Mira Award nominee for Best Startup of the Year before it was sold in January to Rover180, a supply chain finance and factoring company. He told IBJ about his Oct. 25 to Nov. 7 trip.
Source: Indianpolis Business Journal
