“CHULUUT” FLUORSPAR PROCESSING PLANT PROJECT UPDATE
The Chuluut project’s total progress is reached up to 76% this week constituted by equipment foundation 96%, sandwich panel 99%, structural and covering material 100%, electrical installation 52%, pipe and plumbing work 66%, external boiler 32%, and flooring 100% completion. We are currently recruiting experts in our fluorspar mine and the recruitment process reached up to 82%.
EK SIGNED CONTRACT WITH ERDENET MINING CORPORATION SOE
On October 1, EK received an award notice from EMC for Ore Sorting Technology Study. Our business development manager Mr. Khangalsaikhan Bayaraa and Sales manager Mr. Zolboo Bold visited EMC headquarters on October 6 to successfully signed the Ore Sorting Technology Study agreement which will continue for the next 6 months. We believe that Euro Khan LLC and Erdenet Mining Corporation SOE will continue to strengthen the partnership and cooperation well into the future.
EK SIGNED SUPPLY CONTRACT WITH STEPPE GOLD LLC
We are glad to inform you that Steppe Gold chose us as a major distributor for consumables and special electrodes. We will strive to provide our customers with the highest quality all the time. Thank you for your cooperation.
ECONOMY
GDP TO CONTRACT BY 2-4 PERCENT: BOM
Mongolia’s gross domestic product is projected to contract by 2 to 4 percent in 2020 due to the prolonged containment measures on the COVID-19 pandemic, the country’s central bank said on Friday, possibly sending the country into its first recession since 2009.
However, the country’s GDP is expected to recover at an annual growth rate of 8.2 percent next year, the Bank of Mongolia said in a statement.
The Asian country’s mining-dependent economy decreased by 9.7 percent year on year in the first half of 2020 due to restrictive coronavirus measures.
Source: News.mn
EXPORTS DECREASED BY 13.4 PERCENT COMPARED TO PREVIOUS YEAR
According to the first nine months of 2020, Mongolia traded with 141 countries from all over the world, and the total trade turnover reached USD 9.1 billion, of which USD 5.1 billion were exports and USD 3.9 billion were imports. Total foreign trade turnover decreased by USD 1.5 billion (13.9%), of which exports decreased by USD 799.0 million (13.4%), and imports decreased by USD 670.7 million (14.6%) compared to the same period of the previous year.
In September, exports and imports reached to USD 668.2 million and USD 474.9 million, respectively. Compared to the previous month, exports decreased by USD 22.0 million (3.2%), and imports declined by USD 36.3 million (7.1%).
The foreign trade balance was in surplus of USD 1.2 billion in the first nine months of 2020, while it was in surplus of USD 1.3 billion in the first nine months of 2019, decreased by USD 128.3 million from the same period of the previous year.
Source: Montsame
FOREIGN VISITORS TO MONGOLIA DOWN 88.5 PCT IN FIRST THREE QUARTERS DUE TO COVID-19 PANDEMIC
The number of foreign visitors to Mongolia dropped 88.5 percent year on year in the first three quarters of 2020, according to the latest report released by the country's National Statistics Office (NSO) on Monday.
Mongolia received a total of 60,500 foreign visitors in the January-September period, the report said.
The sharp decline in foreign tourist arrivals is directly related to the prolonged containment measures due to the COVID-19 pandemic, according to NSO experts.
The Asian country entered a heightened state of readiness on Feb. 12 to prevent the spread of COVID-19, with measures including the suspension of international passenger flights.
Source: Xinhua
MONGOLIAN COAL EXPORTS MIGHT RISE AS CHINA HALTS AUSTRALIAN SHIPMENTS
China has given ‘verbal notice’ to state-owned power companies and steel mills to stop importing Australian coal ‘immediately’, according to a report in S&P Global Platts.
The newswire’s sources said that Huaneng Power International, Datang International Power Generation Company, Huadian Power International and Zhejiang Electric Power all received verbal notice to stop buying Australian thermal and coking coal.
Thermal coal is used for electricity generation, whilst coking coal has a higher energy content and is generally used for making steel.
China restricted imports of cheaper Australian thermal coal in May this year but left higher value Australian coking coal untouched. Australian media have cited the resumption of steady coal supplies from Mongolia, which dropped due to pandemic-related border closures in the first half of the year, as one reason for China to now target Australian coking coal.
Source: Mongolia Weekly
MINING AND QUARRYING GROSS OUTPUT DECREASED BY MNT 2.1 TRILLION
According to the preliminary results, the gross industrial output reached MNT 11.1 trillion in the first nine months of 2020, decreased by MNT 2.3 trillion (17.2%) from the same period of the previous year. This decrease was mainly due to MNT 2.1 trillion (21.5%) decrease in the mining and quarrying gross output. However, the electricity, thermal energy, and water supply production output increased by MNT 62.4 billion (7.9%) compared to the same period of the previous year.
By preliminary results, the mining and quarrying gross output reached MNT 7.6 trillion, in the first nine months of 2020, decreased by MNT 2.1 trillion (21.5%) from the same period of the previous year. This decrease was mainly due to declines in the mining of coal and lignite by MNT 2.2 trillion (52.8%) and the extraction of crude petroleum by MNT 503.6 billion (66.0%) compared to the same period of the previous year.
Source: Montsame
TAVANTOLGOI-GASHUUNSUKHAIT RAILWAY 208 KM EARTHWORK OUT OF 240 KM
The Deputy Prime Minister of Mongolia visited the construction work of 240 km Tavantolgoi-Gashuunsukhait railway. 240 km of railway will be built in Tsogttsetsii, Bayan-Ovoo and Khanbogd soums of Umnugovi province.
The first-class railway will have 16 bridges, 126 pipelines and eight livestock crossings. Currently, the project employs 1,801 engineers, technicians and workers, and uses more than 770 machineries.
The first 208 km of earthworks have been completed, 98 percent of the drainage pipes, 97 percent of the livestock crossings, and 46 percent of the infrastructure work and 106 km of the main road, have been completed. Work on the shipment circle began in September and earthwork is under progress.
After the railway is in operation, 30 million tons of coking and thermal coal can be transported and exported per annum and 2000 working places will be created.
Source: GoGo News
NPLS ACCOUNT FOR 11.4 PCT OF TOTAL LOANS, UP 0.5 PERCENTAGE POINTS Y/Y
At the end of September 2020, the total amount of outstanding loan to entities and individuals amounted to MNT 17.3 trillion, decreased by MNT 30.9 billion (0.2%) from the previous month, and by MNT 802.6 billion (4.4%) from the same period of the previous year. In the total outstanding loans, MNT 8.9 trillion (51.5%) was individual loans.
The performing loans reached to MNT 14.2 trillion at the end of September 2020, decreased by MNT 46.5 billion (0.3%) from the previous month, and by MNT 0.9 trillion (6.3%) from the same period of the previous year. The performing loans make up to 82.0% of the total loans, and decreased by 1.7 percentage points from the same period of the previous year.
At the end of September 2020, the non-performing loans in the banking system amounted to MNT 2.0 trillion, increased by MNT 4.6 billion (0.2%) from the previous month while it is decreased of MNT 1.8 billion (0.1%) from the previous year.
Source: Montsame
INVESTORS BET ON MONGOLIA'S SUSTAINABILITY PLANS
A $600 million Mongolian bond deal to allow for greater government spending on sustainability objectives has attracted 'strong interest' from international investors.
As a first-of-its kind sustainable sovereign transaction in Asia, Mongolia’s issuance extended the maturity profile of the government’s debt and reduced debt servicing costs.
These cost savings should enable the Mongolian government to increase spending in accordance with Mongolia’s sustainability objectives.
These objectives include the development of hydropower projects and schools, as well as the continuing development of affordable housing to reduce substandard living conditions in the ger districts, where winter heating requires burning wood or low-quality coal that exacerbates urban pollution.
The sovereign issuance is a rare occurrence in the Asia-Pacific, according to law firm Mayer Brown.
Source: Mongolia Weekly
See also: Mongolia makes USD 600 million offering to focus on sustainability
TERM DEPOSITS IN FOREIGN CURRENCY INCREASED BY 74.7 PERCENT FROM LAST YEAR
The national currency in circulation reached MNT 950.1 billion at the end of September 2020, increased by MNT 21.9 billion (2.4%) from the previous month, and MNT 60.3 billion (6.8%) from the same period of the previous year.
At the end of September 2020, the term deposit in domestic currency amounted to MNT 11.6 trillion, increased by MNT 216.9 billion (1.9%) from the previous month, and increased by MNT 779.6 billion (7.2%) from the same period of the previous year.
The composition of the total term deposit in domestic currency shows that 89.4 percent (MNT 11.6 trillion) were individuals deposits and 10.6 percent (MNT 1.2 trillion) were entities deposits.
The term deposits in foreign currency amounted to MNT 5.1 trillion, increased by MNT 438.8 billion (9.4%) from the previous month and MNT 2.2 trillion (74.7%) from the same period of the previous year.
Source: Montsame
BUDGET DEFICIT DECREASES BY 56.7 PCT M/M
According to the preliminary results in the first nine months of 2020, the total revenue of the general government budget was MNT 7.3 trillion. The equilibrated revenue of the general government budget was MNT 6.7 trillion and 91.6% of the total revenue of the general government budget. On the other hand, the total expenditure and net lending was MNT 9.4 trillion in the first nine months of 2020, resulting in a deficit of MNT 2.7 trillion in the equilibrated balance.
In September 2020, the total equilibrated revenue and grants of the general government budget was MNT 1.0 trillion, increased by MNT 202.9 billion or 25.4%, the total expenditure and net lending was MNT 1.1 trillion, increased by MNT 94.7 billion or 9.6% compared to the previous month.
In September 2020, the equilibrated balance of the general government budget was in deficit of 82.7 billion, decreased by MNT 108.2 billion or 56.7% compared to the previous month.
Source: Montsame
REVENUE FROM RAIL TRANSPORT INCREASED BY 9.5 PERCENT
In the first 9 months of 2020, 22.1 million tonnes of freight were carried by railway transport, increased by 1.7 million tonnes (8.1%) compared to the same period of the previous year. This increase was mainly due to 1.4 million tonnes (18.8%) increase in export freight, 258.4 thousand tonnes (8.8%) increase in transit freight, respectively.
In September 2020, carried freight reached 2.7 million tonnes and increased by 52.1 thousand tonnes (2.0%) compared to the previous month. In the first 9 months of 2020, 82.6% of carried freight by railway transport was mining product, 10.6% was construction materials, 1.8% was black iron, 0.8% were agricultural products, 0.9% was consumer food products, 0.5% was wood products and 2.8% was other products. In the first 9 months of 2020, 1.6 million passengers (double counting) carried by railway transport.
Source: Montsame
REGISTERED UNEMPLOYED DECREASES BY 2.5 PERCENT IN SEPTEMBER
In September 2020, Labour agencies in aimags and the Capital city registered 4.7 thousand new unemployed, 1.4 thousand persons from the unemployment register hired on a new job, and 3.7 thousand persons removed from the unemployment register due to inactive job seeking. In Ulaanbaatar, 1.7 thousand persons newly registered in Labour agencies of municipal and the district offices, and 456 persons from the unemployment register were hired in September 2020.
Compared to the same period of the previous year, newly registered unemployed decreased by 2.6 thousand persons (35.7%), the number of persons from unemployment register hired on a new job decreased by 1.0 thousand persons (42.5%) and the number of persons removed from the unemployment register due to inactive job seeking decreased by 2.0 thousand persons (35.0%).
Registered unemployed decreased by 2.6 thousand (12.7%) from the same period of the previous year and 461 (2.5%) from the previous month. Out of the total registered unemployed, 9.4 thousand or 53.0% were women.
Source: Montsame
RUSSIAN RAILROAD SPECIALISTS WORKING ON UBTZ MAIN LINE UPGRADE
Over 20 railroad specialists from Eastern Siberian Railway of the Russian Federation have arrived in Mongolia, bringing over 100 machines and tools of their own, to help upgrade the 18 km railroad between Shargyn Ovoo junction and Zamyn-Uud station.
Ulaanbaatar Railway (UBTZ) joint venture company is putting special emphasis on enhancing the transport capacity of its main line as the railroad transport volume has been increasing. Starting October 8, the Russian specialists are working as the main line upgrade project’s subcontractor. The equipment operators will work here until the end of this month.
The involvement of the Russian railroad workers with its machinery in the project allows UBTZ to use its equipment in the construction of Zuunbayan-Tavantolgoi railroad and the extension of Darkhan, Chuluut, Bayan and other stations and junctions.
Following their arrival in the country, the specialists from Russia were quarantined for monitoring as part of the COVID-19 preventive measures.
Source: Montsame
4.4 THOUSAND FOREIGN WORKERS FROM 92 COUNTRIES EMPLOYED IN MONGOLIA
In the third quarter of 2020, 4.4 thousand foreign workers from 92 foreign countries were employed with labor contract in Mongolia including persons in employment work for pay or profit and persons in volunteer work without pay or profit. Compared with the same period of the previous year, the number of countries decreased by 9 and the number of foreign workers decreased by 6.0 thousand persons (57.7%).
Out of all foreign workers with labour contract in Mongolia, 3.8 thousand (86.7%) were male and 0.6 thousand (13.3%) were female. From all foreign workers in Mongolia, 47.0% is from China, 6.6% is from Russian Federation, 5.9% is from Australia, 4.6% is from South Korea, 4.2% is from Vietnam, 4.0% is from United States, 3.4% is from South Africa, 2.9% is from Philippines, 2.4% is from Great Britain, 1.7% is from Japan and remaining 17.3% is from other countries.
Source: Montsame
MONGOLIA'S CAPITAL TO BUY 200 SCHOOL BUSES TO EASE TRAFFIC, BOOST SAFETY
The municipal government of Mongolia's capital Ulan Bator said Tuesday it is buying 200 more school buses this year to reduce traffic congestion and ensure student safety.
"To improve access to the school transportation, we planned to buy 200 more school buses within this year. Today, we are handing over the first 75 buses to relevant schools," the city's mayor's press office said in a statement.
Traffic congestion has been one of the most pressing issues in the Mongolian capital for many years.
Parents driving their children to school are said to be one of the major factors of the traffic congestion in the city.
To cope with this problem, Ulan Bator, home to more than half of Mongolia's population of 3.2 million, launched a school bus service with 40 buses last year.
Source: Xinhua
MONGOLIA PLANS RIVER DIVERSION AS MINING BOOM SUCKS GOBI DRY - EDITORIAL
In school geography textbooks around the world, Mongolia’s Gobi desert is cited as the main example of a cold desert. It occupies almost the entire southern region of the country, covering approximately 350,000 square kilometres. What is less well known is that this desert is very rich in minerals, that extraction of these minerals has led to a situation where the traditional animal herders of the Gobi do not get enough water, and what they do get is toxic.
Before 2000 there were no mines in South Gobi apart from the state-run Tavan Tolgoi coal mine. But over the past two decades, foreign investment has flooded in, with companies now operating 12 large mines, including Rio Tinto’s Oyu Tolgoi, one of the world’s biggest copper and gold mines. Driven by the mining industry’s growing demands, the government estimates that the region’s groundwater will run dry within a few years.
Source: TheThirdPole.net
BUSINESS
“UNDERVALUED, UNDEREXPLORED”: A LITHIUM MINING OPPORTUNITY LIKE NO OTHER
ION Energy Ltd. is an early-stage exploration Company that currently holds one of the largest world-class grade lithium licenses by area, in a low-cost, skilled labour jurisdiction, neighbouring the major consumers of the world. And the Company is now poised to become a significant player in Asia’s now-booming lithium market. ION Energy boasts a “first-mover advantage in a low-cost operating environment.”
Recently listed on the TSX Venture Exchange, ION has acquired a unique and uniquely large land package in southeastern Mongolia – an area known as the Baavhai Uul.
ION Energy’s understanding and experience in the region made Mongolia an easy choice for the home of the company’s first Lithium project. ION has secured a sizeable 81,758 hectare license in the southern Gobi region of Mongolia and is expected to commence an exploration program on the project in 2020, focusing on two main lithium brine targets.
Source: Stockhouse.com
OYU TOLGOI MINE AWARDED THE COPPER MARK FOR ITS RESPONSIBLE PRODUCTION
Oyu Tolgoi is proud to be awarded the Copper Mark, the copper industry’s new responsible production program.
To be awarded the Copper Mark, Oyu Tolgoi has demonstrated that it meets over 30 criteria for responsible environmental, social and governance operating practices.
Oyu Tolgoi chief executive Armando Torres said, “We are pleased to be among the first in the copper industry to be awarded the Copper Mark, demonstrating our commitment to responsible mining and transparency. We made this achievement together with all our stakeholders and communities in Mongolia. We will continue upholding the highest social and environmental standards and draw on the advice of environmental experts and the communities in which we operate.”
The Copper Mark is the first and only program for responsible production of the copper industry. Originally developed by the International Copper Association with inputs from a broad range of stakeholders including customers, NGOs and producers, the Copper Mark is now an independent entity with a multi-stakeholder council.
Source: GoGo News
SECURITIES TRADED AT STOCK MARKET DROPPED BY 73.2 PERCENT FROM LAST YEAR
According to the first nine months of 2020, securities worth MNT 34.8 billion were traded at the national stock market, which showed a decrease of MNT 94.9 billion (73.2%) compared to the same period of the previous year.
In September 2020, 1.8 billion pieces of securities worth MNT 14.5 million were traded at the national stock market, with a decrease of MNT 1.4 billion (43.4%), while the amount of traded securities rose by 258.1 thousand (1.8%) pieces of securities compared to the same period of the previous year. The total turnover of stocks decreased by MNT 3.3 billion (64.5%), and the pieces of securities declined by 9.1 million pieces (38.6%) from the previous month.
In September 2020, the average of indices of the top 20 financial markets was 17176.2 units, increased by 457.4 units from the previous month, but decreased by 2141.3 units from the same period of 2019.
Source: Montsame
MONJA STARTUP ACCELERATOR PROGRAM ANNOUNCED
The Japan International Cooperation Agency (JICA), Mongolia-Japan Center (MOJC), and MobiCom Corporation LLC (MobiCom) announced the launch of the MonJa Startup Accelerator Program for businesses emerging during the COVID-19 outbreak.
During the ICT Expo, the JICA and MobiCom Corporation LLC signed a Memorandum of Understanding and started receiving applications for the MonJa Startup Accelerator Program on October 10.
Within the program, the JICA, MobiCom and MOJC will collaboratively promote startup businesses that are developing innovative businesses and technologies, which can be a solution to the socioeconomic changes caused by the COVID-19.
Among the startups that applied for the program, three startups will be selected by a selection committee, a contract of USD30,000 as maximum will be signed with each selected startup as well as technical support such as mentoring service, lectures and networking events will be provided to promote startup's business through the Program for six months. It will also provide networking opportunities, including support in establishing contacts with Japanese companies.
Source: Montsame
ERDENE ANNOUNCES CONVERSION OF EBRD CONVERTIBLE LOAN AND PROVIDES BAYAN KHUNDII GOLD PROJECT UPDATE
Construction readiness activities for Bayan Khundii Gold Project commenced in Q3 2020 and are progressing as outlined below:
• Detailed design and engineering for the Carbon-in-Pulp (“CIP”) Leach processing plant and mine support infrastructure are progressing on schedule, with expected completion in late Q4 2020.
• Tender and contracting for critical facilities and services has begun with the objective to optimize the capital budget for construction.
• Constructability, value engineering, and HAZOPS review are also underway.
• Consultations for the statutory Mongolian Detailed Environmental Impact Assessment (“DEIA”) for the Project are underway and expected to be completed in Q4 2020, subsequent to which the DEIA will be submitted for approval.
• Detailed technical drawings for key Project facilities have been prepared.
• The general arrangement for the site has been submitted for approval, along with the drawings for mine support facilities, including offices, mine dry, security guard house, workshop, warehouse, and permanent camp.
Source: Erdene Resource Development Corp.
INTEGRATED MINERAL RESOURCES INITIATIVE PROGRAMME LAUNCHES IN KHENTII AIMAG
At the request of the local governing body, the German Corporation for International Cooperation (GIZ) has launched the Integrated Mineral Resources Initiative programme in Khentii aimag, which will be implemented for three years. The programme aims to create more job opportunities at small and medium enterprises in the sectors of mining, farming, and tourism.
In correlation with the programme launch, a council on sustainable development and partnership led by Deputy Governor of Khentii aimag G.Kherlenchuluun was established with 13 members, and capacity building training took place for the council members for two days in Chingis city.
With the programme being implemented in 10 aimags, Business Innovation and Growth Centers have been established in Ulaanbaatar city and Dalanzadgad soum, Umnugobi aimag, fully financing 21 projects from the Innovation Fund. A project has also been implemented in Umnugobi aimag with a financing of USD 2 million.
Source: Montsame
TURQUOISE HILL: MORE QUESTIONS THAN ANSWERS - EDITORIAL
Summary
• Rio Tinto's recently signed MOU for re-profiling of TRQ's existing debt is not welcome news for equity holders and is certainly taking a toll on TRQ's share price.
• Time and again, we have seen that RIO's role in Oyu Tolgoi's development has adversely impacted the stock despite the charm of the mine's underground portion.
• While RIO's interest in the property is well protected through its representation on TRQ's Board, the minority shareholders are made to suffer yet again.
• The 10:1 reverse stock split provides potential for further downside and may prove to be a trap for new investors.
• TRQ is a long-term 'buy and hold' that trades at an attractive valuation, however, a short-term 'momentum' trading strategy could be risky.
Source: Seeking Alpha
