SMILE FOR KIDS
Our company implements projects every year within the framework of social responsibility, and in 2019, we donated 30,000,000 MNT to the Misheel Children's Fund for dental treatment for 100 children.
We are very happy to announce that we are nearly finished with 132 children's dental treatment. The Dental clinic we are working together has done an excellent job in a very short time. Especially in this very difficult period. Treating 132 children, some of them have 10 to 19 teeth to treat means, that there must go many times to the dental clinic. Also, the root canal treatment request at least 3 appointments to successfully complete treatment only for one tooth.
All child's teeth are professionally flourished, this is long-term protection. In the next couple of days, we will go back to do again education and nutrition training before they all go to the summer camp.In 8 to 12 months' time, we will redo a dental check-up and looking forward to having a great result with nearly any treatment needed.
We are very happy to see the kids smile; this is the most touching gift you can get in life. We would like to express our special gratitude to Misheel Kids Foundation and the City Orphanage team.
EK RENEWED ITS MISSION AND VISION
VISION
The one-stop solution in energy and mining sectors
MISSION
Create long-lasting profitable projects and capacitate our staff to lead the community as a socially & environmentally responsible company for positive changes through high-value innovative technologies, reliable clean energy solutions, and custom-made financing
CORE VALUE
• Enthusiasm: EK always conduct business with vigor and enthusiasm, achieving our goals with vitality because success is our passion.
• Entrepreneurism: at EK, we want our team to behave as they own the company and be creative about how to develop the business further in the market. We are a company of owners and owners take reaching results as personal goal.
• Development: in EK we believe that a company is only as good as the people who are in it. Therefore, we strive to work with excellent people, which are given space to grow with speed proportionate to their talent and who are compensated in line with how much value they bring to the company. Every one of us must strive to become a better version of ourselves in the next day. We select, develop, and retain people that can become better than ourselves to contribute to the Human Resource development of the country.
• Common sense: We believe that common sense and simplicity are better orientations than sophisticated and complex solutions.
• Leadership by example: We walk the talk and do not talk the talk.
• Excellence: We do not take shortcuts. Integrity, hard work, consistency, and responsibility are essential for building our company to supreme heights.
• Knowledge transfer: We aim to bridge international standard innovation, technologies, and expertise to Mongolian market.
• Thankful: We are grateful to all stakeholders for opportunities.
“CHULUUT” FLUORSPAR PROCESSING PLANT PROJECT UPDATE
The construction of our project "Chuluut" has been restarted after the covid19 lockdown. The construction is progressing in a professional manner and our team is excited to deliver the first 97% fluorspar concentrate to our valued international customers in July 2020.
EK SALES SUCCESSES
EK supplied Magswitch brand hand lifters to APC LLC and safety consumables item to Water and Sewerage Authority. Moreover, Sorex and Durofix brand welding sample have been delivered to local Komatsu dealer in Mongolia.
Magswitch lifting magnets are the solution for your heavy lifting, plate handling applications, sheet alignment and de-stacking needs. Built to be fail-safe, our heavy lifting magnets have the capacity to hold strong on both thin and thick steel. Unlike older technology, Magswitch lifters exert full hold on thinner steel. With numerous impressive features such as dual hook, single hook, replaceable pole shoes and more, Magswitch lifters are increasing productivity and safety in every workplace!
ECONOMY
MOODY'S CHANGES MONGOLIA'S OUTLOOK TO NEGATIVE FROM STABLE; AFFIRMS B3 RATING
Moody's has today changed the outlook on the Government of Mongolia's issuer ratings to negative from stable and affirmed the long-term B3 issuer and foreign currency senior unsecured bond ratings and the (P)B3 senior unsecured MTN program rating. The short-term issuer ratings are affirmed at Not Prime.
The decision to change the rating outlook to negative reflects rising external vulnerability risks related to a sharp fall in export revenue at a time when access to external financing is highly uncertain, threatening already weak foreign exchange reserves adequacy. Moreover, the government's borrowing requirements will increase markedly, in part to fund a large stimulus package, which raises liquidity risks.
The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, and falling asset prices are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented.
Source: Moody's, The UB Post, ZGM Daily
FOREIGN TRADE DOWN 30.8 PCT IN Q1 OVER COVID-19 PANDEMIC
Mongolia's foreign trade turnover declined by 30.8 percent year on year in the first quarter of 2020, the country's National Statistics Office (NSA) said Wednesday.
According to the NSA, Mongolia's foreign trade totaled 3 billion U.S. dollars in the first four months of this year, exports fell 45.3 percent to 1.4 billion dollars, while imports dropped 10.2 percent to 1.6 billion dollars.
The drop in foreign trade is largely related to restrictive measures to contain the spread of COVID-19, according to experts of the NSA.
The Asian country traded with a total of 125 economies around the world in the January-April period.
China maintained its position as Mongolia's biggest trade partner during the period and took up 56.5 percent of Mongolia's total foreign trade, said the statistical agency.
Source: Xinhua
EXTERNAL DEBT DOUBLES GDP
Government debt of Mongolia is lower than 70 percent of GDP, while the total external debt twofold the domestic economy. As of the end of 2019, the country’s foreign debt totaled USD 30.7 trillion of which government debt accounts for USD 7.8 trillion, and over USD 18 billion comprises loans of entities. Developing countries are experiencing a sharp deterioration in economic performance due to the continuing COVID-19 pandemic. Total debt of 66 countries classified as a developing country reached USD 17 trillion, making up 24 percent of the global debt.
The International Monetary Fund (IMF), the World Bank, JPMorgan, and the Central Bank combined data to assess the financial capacity of 66 developing countries. In accordance with the Economist estimation, based on four measures on financial strength, Mongolia ranked 59th out of 66 countries as the most vulnerable amid economic crises.
Source: ZGM Daily
EXPORTS DECREASE BY 45.3 PERCENT COMPARED TO PREVIOUS YEAR
In the first 4 months of 2020, Mongolia traded with 125 countries from all over the world and the total trade turnover reached USD 3.0 billion, of which USD 1.4 billion were exports and USD 1.6 billion were imports.
Total foreign trade turnover decreased by USD 1.3 billion (30.8%), of which exports decreased by USD 1.1 billion (45.3%) and imports decreased by USD 179.9 million (10.2%) compared to the same period of the previous year. In April 2020, exports and imports reached to USD 337.8 million and USD 424.8 million, respectively. Compared to the previous month, exports increased by USD 72.7 million and imports increased by USD 13.2 million.
The foreign trade balance was in deficit of USD 212.7 million, while it was in surplus of USD 745.8 million in the first 4 months of 2019, and decreased by USD 958.5 million from the same period of 2019.
Source: Montsame, News.mn
CUSTOMS: COAL EXPORT DECLINED BY NEARLY THREE TIMES YOY
Since the beginning of the year to May 10, a total of 4.6 million tons of coal was exported at USD 374.5 million, according to the preliminary data of the General Customs Administration (CGA). Compared to the same period last year, it is 2.7 times less and 2.8 times less in price. A total of 482,000 tons of coal have been exported in May alone. According to the Minister of Finance, 470 trucks exported coal at Gashuunsukhait port and 233 trucks at Shiveekhuren port last Friday. Despite the increase in coal exports, the CEO of Tavan Tolgoi JSC said that it would return to normal only if more than 500 trucks produce coal at the Gashuunsukhait port daily. Erdenes Tavan Tolgoi, which plans to sell 9.2 million tons of coal this year, said it is expecting a 30 percent drop in coal exports.
Source: ZGM Daily
See also: Coal transports recovering at key China-Mongolia border crossing
CUSTOMS: CRUDE OIL EXPORT CONTRACTED BY 6 TIMES IN THE FIRST FIVE MONTHS
According to the preliminary study of the Customs General Administration (CGA), Mongolia exported 533,600 barrels of crude oil worth USD 21.6 million from January to May of 2020. Compared to the same period of the previous year, it decreased by 4.3 times in physical quantity and six times in sales revenue.
Since May, Mongolia has exported 45.500 barrels of crude oil. The Mineral Resources and Petroleum Authority (MRPAM) reported that there are no difficulties in exports to China through the Bayankhoshuu border and disinfection is being carried out. PetroChina Daqing Tamsag LLC is exporting through the Bayankhoshuu border as well.
Mongolia has imported 169,000 tons of gasoline since the beginning of the year. This is a decrease of 14.4 percent compared to the previous year. Imports of diesel fuel dwindled by 24 percent to 272,800 tons. Additionally, the price of petroleum products imported by Mongolia is highly dependent on fluctuations in the price of Brent oil.
Source: ZGM Daily
RENT-TO-OWN HOUSING PROJECT TO HOUSE CITIZENS THROUGH SECURITIZATION
At his weekly virtual briefing on May 11, Governor of the capital city and Mayor of Ulaanbaatar S.Amarsaikhan informed that a project is underway to house citizens including the 220 thousand ger area families in Ulaanbaatar through securitization for the first time.
The Capital City Housing Corporation is working to purchase ready-to-occupy apartments on sale through the issuance of an asset-backed securities and house citizens on a rent-to-own basis. According to the Governor, the project has been introduced to the Parliament and the Cabinet and relevant decisions have been made.
The Ulaanbaatar city government introduced a rent-to-own option to its housing program for ger area redevelopment last year and has provided homes for around 3,000 families so far by freeing up their land lots only after presenting them keys to ready-to-occupy apartments.
So far, 35 thousand citizens have submitted their requests to be involved in the rent-to-own housing project.
Source: Montsame
WHAT CONSTITUTES “LOCAL”? EXPLORING HOW TO CREATE LOCAL VALUE FROM MINING IN RURAL MONGOLIA
There is growing recognition that successful projects are those that generate social and environmental value as well as economic value. Yet measuring social value is notoriously difficult. This has been especially true in the global mining sector where the proposed land use may be contested, where there may be competition for scarce resources, or where world views collide.
The South West Gobi Desert in Mongolia is a sparsely populated area that nomadic herders have called home for generations. It is also an area that has attracted the attention of mineral exploration companies, including Canada’s Erdene Resource Development Corp. As efforts get underway to develop the region’s first gold mine, Bayan Khundii, researchers at the University of British Columbia are investigating how to bridge the values of a land-based culture and the mining sector to create and share value.
Source: University of British Columbia
RURAL URBAN FRAMEWORK'S GER INNOVATION HUB ENABLES A SENSE OF COMMUNITY IN MONGOLIA
rural urban framework (RUF) has designed a structure in ulaanbaatar, the capital of mongolia, that seeks to foster a sense of community in a city with a large formerly nomadic population. ulaanbaatar’s ger districts are sprawling settlements comprising traditional felt tents, known as gers, and self-built brick homes. residents of these areas have no running water or sewage systems and, during the cold winter months when temperatures drop to -40°C (-40°F), coal is used as a source of heat, resulting in debilitating air pollution. the majority of new migrants to ulaanbaatar are nomads, drawn to the city in the hope of a better quality of life. these new arrivals erect their ger, dig a pit-latrine, and stake out a plot of land.
‘in this process of becoming urban, nomadic residents are confronted with a new set of challenges,’ explains rural urban framework.
Source: DesignBoom.com
NO2 CONCENTRATION EXCEEDS ACCEPTABLE LEVEL IN APRIL
In April, the average nitrogen dioxide concentration in some parts of Ulaanbaatar exceeded the allowable levels, the statistics showed. Although PM10 and PM2.5 particles decreased by about 15 percent from a year ago, sulfur dioxide and nitrogen dioxide were 30.8 and 37.5 percent higher respectively. In 2019, Ulaanbaatar banned the consumption of raw coal and began using enhanced coal briquettes, but carbon monoxide (CO) levels in the air increased 9.3 times during the peak of the year, and more than 1,000 people called the Emergency Center for CO poisoning. At the same time, several European studies have shown that the death rate from the COVID-19 epidemic is relatively higher in countries with great levels of air pollution. For example, in five regions above the permissible level of nitrogen dioxides, such as northern Italy and Spain, the death rate is 78 percent.
Source: ZGM Daily
LARGE SCALE BATTERY STORAGE SYSTEM TO BE INSTALLED IN CENTRAL ENERGY SYSTEM GRID
At its regular meeting on May 13, the Cabinet approved the draft loan agreement of the First Utility-Scale Energy Storage Project to be implemented jointly by the Government of Mongolia and the Asian Development Bank and authorized Minister of Finance Ch.Khurelbaatar to establish the loan agreement with ADB.
ADB is providing a soft loan of USD 100 million for the implementation of the project that aims to install large scale battery storage system in the central energy system (CES) grid to ensure stability and safety of the central energy system.
Mongolia’s electricity demand increases by 5 percent or 50 MW during peak periods every year and the power facilities cope with the demand by working at full capacity. Therefore, the project will open up an opportunity for the country to improve its energy independence, support renewable energy use, keep a balance between energy production and consumption, and reduce energy inefficiency.
Source: Montsame, ZGM Daily
CRIME RATE DROPS BY 21 PERCENT SINCE LAST YEAR
In the first quarter of this year, 10.1 thousand crimes were registered, reflecting a decrease of 2802 or 21.7% compared with the same period of the previous year, according to the National Statistics Office.
In April, 2,575 crimes were registered, an increase of 516 (25.1%) from the previous month. The national average of crime per 10 thousand people aged 16 and over was 48 in the first quarter, down by 12 or 20.0% from the same period of the previous year.
At national level, 35.3 thousand went to the sobering-up stations and 5.2 thousand people were arrested in the first quarter which decreased by 2.3 thousand or 6.1% and increased by 1.2 thousand or 29.7% respectively compared with the same period of the previous year.
Source: Montsame
BUSINESS
SALES REVENUE OF OT CONTRACTS 62.9 PCT TO USD 130.7 MILLION
Turquoise Hill Resources Ltd (TRQ) on Thursday announced its financial results and operational review for the period ended March 31, 2020. According to the report, Oyu Tolgoi (OT)’s revenue decreased 62.9 percent to USD 130.7 million year-on-year. This is primarily due to both a 78.2 percent drop in gold production and a 23.1 percent fall in copper production.
Even though the pandemic has led to unprecedented challenges, OT open pit has continued to operate without interruptions and the underground development has been progressed. The average price of copper downturned by 9.1 percent, mainly influenced by the impact of the pandemic on global copper demand.
Additionally, OT’s concentrate sales fell in the first two months of this year due to the COVID-19, but intensified in March, exceeding its quarterly plan. The company reported a net profit of USD 105.2 million a year ago, declined to USD 19 million this year.
Source: ZGM Daily
MOODY'S CHANGES OUTLOOK ON NINE MONGOLIAN BANKS TO NEGATIVE FOLLOWING SOVEREIGN ACTION; AFFIRMS ALL RATINGS
Moody's Investors Service has today changed the outlook to negative from stable and affirmed all ratings and assessments of the nine banks it rates in Mongolia (B3 negative).
The rating action follows the outlook change to negative from stable on the Mongolian government's B3 issuer rating on 8 May 2020.
The nine affected banks are: (1) Bogd Bank LLC, (2) Capitron Bank LLC, (3) Development Bank of Mongolia LLC, (4) Golomt Bank LLC, (5) Khan Bank LLC, (6) State Bank LLC, (7) Trade and Development Bank of Mongolia LLC, (8) Transport and Development Bank LLC, and (9) XacBank LLC.
A full list of the affected ratings can be found at the bottom of this press release.
The change in outlook to negative for the nine Mongolian banks reflects Moody's view that there is high correlation between the creditworthiness of the Mongolian banking system and that of the sovereign, given (1) the concentration of their operations in Mongolia; and (2) their significant direct and indirect exposures to domestic sovereign debt relative to their capital bases.
Source: Moody's
KOREAN AIR PLANS TO RESUME FLIGHTS TO MONGOLIA
South Korean biggest airlines ‘Korean Air’ plans to resume flights on 19 international routes next month as it strives to offset a sharp decline in passenger travel demand with an increased demand for cargo deliveries.
Korean Air said the resumption is aimed at preparing for increased travel demand after countries ease their entry restrictions on incoming passengers to stem the spread of the COVID-19 pandemic.
Its reopening routes include Ulaanbaatar, Washington, D.C., Seattle, Vancouver, Toronto, Frankfurt, Singapore, Beijing and Kuala Lumpur. However, flight resuming must be approved by the Mongolian National Emergency Commission. Mongolia has cancelled all flights since mid- February.
The KDB and Eximbank plan to extend 1.2 trillion won in financial aid to the country’s biggest airline, which is also the national flag carrier.
Source: News.mn
PRODUCTION SHARING AGREEMENT SIGNED FOR METHANE GAS EXPLOITATION
Erdenes Mongol LLC’s subsidiary Erdenes Methane LLC and Australia’s Jade Methane LLC are working together on a project to estimate coal seam methane gas reserves and use the mineral as an energy resource. Since establishing an investment agreement for the project in May 2019, the sides have been exploring coal seam methane gas at Tavantolgoi coal deposits.
They drilled 500-900 m deep wells in eight locations and coal samples were tested for methane gas composition. On April 22, 2020, the Cabinet authorized Erdenes Methane to conclude a production sharing agreement for coal seam methane gas sites at Tavantolgoi coal deposits, making it possible to commence exploration, reserves estimation, and feasibility studies.
On May 6, Director of the Mineral Resources and Petroleum Authority Kh.Kherlen and Executive Director of Erdees Methane D.Amar signed a production-sharing agreement for the exploration and exploitation of coal seam methane gas at Tavantolgoi’s XXXIII exploration site, where methane gas has been detected.
Source: Montsame
BAYAN KHUNDII GOLD PROJECT VALUE TO DOUBLE AS GOLD PRICE RISES
The value of the gold projects has been increased during the time when the gold price climbs. According to Erdene Resource Development Corp. (ERD)’s preliminary feasibility study, the price of gold reflected to stand at USD 1,300 per ounce, but it has risen to USD 1,700 currently, the project’s value has almost doubled to USD 188 million. Additionally, ERD’s stock traded at CAD 0.23 on the Toronto Stock Exchange (TSX) on Friday. The company, which has received mining licenses for the Khundii gold project, is working to complete a detailed feasibility study by mid-2020. At the same time, some discussions related to financing gold companies have been revealed. Moreover, the Speaker of Parliament, Zandanshatar Gombojav highlighted that implementing the Gold 2 program and providing funding to gold companies will help increase foreign exchange reserves and ensure the stability of the tugrik.
Source: ZGM Daily
XANADU MINES BEGINS ON-GROUND EXPLORATION ACTIVITIES AT RED MOUNTAIN JV
• Xanadu Mines (XAM) has begun on-ground exploration activities at the highly prospective Red Mountain joint venture (JV)
• Red Mountain, which is located within southern Mongolia, is a joint venture project between Xanadu and the Japan Oil, Gas and Metals National Corporation (JOGMEC)
• This JV between Xanadu and JOGMEC is relatively new, with both companies having only entered an earn-in agreement in mid-March this year
• Under the JV, JOGMEC can fund up to US$7.2 million over a four year period to earn a 51 per cent interest in Red Mountain
• The aim of this JV is to discover Mongolia's next world-class copper-porphyry deposit.
• Xanadu has ended the day 7.41 per cent in the green with shares trading for 2.9 cents each
Source: TheMarketHerald.com.au
RIO TINTO PLANS BIG TO GO GREEN
In keeping with its position as the world’s second biggest mining company, Rio Tinto has been taking several bold steps to halt contributing to climate change. With the divestment of its last coal project in 2018, it became the first major company to have no fossil fuel asset. This was also when Rio released its first climate change report titled ‘Our approach to the climate change 2018’. This has now been followed by “Our approach to climate change 2019”, which was released in February this year. In this Rio sets out its goal of achieving zero emission from its operations anywhere by 2050. That would cover both direct and indirect emission – in scientific parlance, Scope 1 and Scope 2 emission. CEO Jean Sebastien Jacques has said that the company will spend up to $1 billion in the coming five years on strategizing and getting ready to take up projects to reach the lofty goal.
Source: Mongolian Mining Journal
See also: SOMO: Open letter to Rio Tinto
STEPPE STARTS GOLD AND SILVER SALES IN MONGOLIA
"In a very difficult business environment we have been able to reach this key milestone," executive chairman Matthew Wood said yesterday.
The company said the COVID-19 pandemic had not had a material impact on its operations and it was still expecting to produce about 60,000 ounces this year at cash costs of about US$500/oz.
Steppe said it had sold a total of 5,233oz of gold and 1,372oz of silver to date, in two separate deliveries to the Central Bank of Mongolia, generating cash flow before stream obligations of $8.5 million.
The company said it would put positive cash flow towards studies to expand the openpit and processing, with an aim to increase production to 150,000oz of gold per annum.
Steppe was congratulated in a joint statement on reaching the milestone by the Ministry of Mining and Heavy Industry and the country's Central Bank.
Source: Mining-Journal.com
See also: Steppe Gold Provides an Update on Ore Processing at ATO Gold Mine in Mongolia
BAGANUUR COMPANY WILL MINE AND SELL 4 MILLION TONS OF COAL IN 2020
Baganuur JSC planned to mine and sell 4 million thermal coal this year, which is lower 100 thousand tons than performances of 2019. In particular, the company sold 4.1 million tons coal in 2019, earned MNT 138.5 billion from the sales and operated with profit of MNT 69.7 million. Also, earnings per share of the company equaled with MNT 3.32.
However, the company’s accumulated debts are being the biggest problem for its effectiveness as well as liabilities amount of the company is increasing year by year. For instance, its total liabilities had been MNT 165.8 billion by the end of 2018 whereas the amount increased to MNT 174 billion last year.
As a result, share price of the company has been decreasing during the period. For instance, share price of the company closed at MNT 825 yesterday, which has been the lowest price since 2009.
Source: BDSec
PETRO MATAD CUTS SALARIES
Mongolian oil explorer Petro Matad Limited revealed Monday that it has implemented salary cost saving measures.
According to the company, all executive directors, non-executive directors and other senior managers have agreed to take salary cuts averaging 50 percent, backdated to the start of the second quarter of this year. Petro Matad’s professional advisers have also agreed to reduce fees by up to 45 percent, the company outlined.
The salary cuts were made in order to ensure that Petro Matad’s current financial resources can sustain the organization through the processing of its Block XX exploitation license application, according to the company, which also highlighted that it recognized the impact the pandemic has had on global financial markets.
Following the cuts, the overhead costs of Petro Matad have been halved, the company revealed. Petro Matad said further cost cutting measures have been identified and can be executed “if market conditions make this necessary”.
Source: RigZone.com
TSAIRT MINERAL CEO: ORE SUPPLY MAY BE DISRUPTED DUE TO DELAYS IN OPEN-PIT MINING - INTERVIEW
CEO of Tsairt Mineral LLC, Batkhuu Sarangerel expressed his opinion on COVID-19 impact on the mining industry and how the company is operating amid the pandemic.
-Sales and prices of zinc have been decreasing since January. How did it affect the sector?
-In terms of the zinc price, it plunged off earlier this year and decreased by 35.5 percent compared to last year. And we assume that the price is stable now. Even though Chinese companies had returned back to regular operations, product sales and prices maintained the same level due to the COVID-19 outbreak around the world. In addition, Tsairt Mineral exported a total of 26,000 tons of zinc concentrate since January, which fell by 30 percent from a year ago.
Source: ZGM Daily
