• 1 Sep, 2019

COUNTDOWN 5 DAYS AWAY TO EK WORKSHOP

EK is organizing a workshop under the name of “Responsible and Innovative Approach for Mining and Energy Sector” on September 4. Our partners including TAKRAF, VEOLIA KOREA and CFT will give a presentation and introduce their products and services to more than 100 guests of Mining, Energy, Environmental sectors and state agencies.

EK ATTENDED PRIME MINISTER’s BUSINESS MEETING WITH ENTREPRENEURS

Mongolian Prime Minister U.Khurelsukh and ministers of the cabinet held a business meeting with entrepreneurs and businessmen at the Mongolian National Chamber of Commerce and Industry (MNCCI) on August 27. The business meeting brought together over 250 businessmen and representatives of more than 20 non-governmental organizations.

The Prime Minister briefed about Mongolia’s present socio-economic situation and government policy and further actions on promoting the business environment and their activities.

Entrepreneurs also proposed to organize a discussion together with the government on pressing issues in every sector. The PM supported this idea and agreed to hold the business meeting every quarter.

Economy

·         Income from mining sector increases by 24 percent

·         Tavan Tolgoi-Gashuun Sukhait railway project to proceed

·         Revenues of top companies rise

·         Mongolia eyes business opportunities at China-Mongolia expo

·         ADB: Improving Management of Natural Resource Revenues in Mongolia

·         BoM to issue mortgage loans until 2020

·         Record number of Taiwanese tourists in Mongolia

·         University tuition averages 1.6 million to 3.6 million MNT

·         Mongolia to supply domestic demand for wheat

·         UNICEF seeking international individual consultancy on strengthening social service workforce

·         MNCCI President: Mongolia’s economy is smaller – Interview

Business

·         SouthGobi Announces Termination of Mining Licenses for the Soumber Deposit

·         Mongolia sees healthy competition and strong broadband growth – R&M

·         MSE market cap increases 4.8 pct in H1

·         Turquoise Hill: Catching Falling Knives At This Point

·         Xanadu Mines results highlight shallow oxide gold starter potential at Kharmagtai project

·         Japanese interested in producing export products using Mongolian milk

·         Prophecy’s stock price jumps 56 pct after announcing a spin-off plan

·         MSE holds open event to demonstrate capital market knowledge

·         China’s Hainan and Mongolia establish direst flights

·         B.Javkhlan: ‘People used to buy four walls and a ceiling, but now they buy lifestyle’ – Interview

·         Meet The Sisters Behind Mongolia’s Hottest – And Most Progressive – Fashion Brand, Michel&Amazonka – Interview

·         African footballers stranded around the world with crushed dreams – Editorial

ECONOMY

INCOME FROM MINING SECTOR INCREASES BY 24 PERCENT

The Ministry of Mining and Heavy Industry today issued the sector’s statistics for first seven months of 2019.

As of seven months of the year, the sector accumulated MNT 1.7 trillion billion to the state budget as taxes, fees and royalties. MNT 22.2 billion has come from gold mining, MNT 788.7 billion–from coal, MNT 53.6 billion — zinc, MNT 723.1 billion –copper, MNT 14.5 billion –iron, MNT 19 billion –fluorspar and MNT 41 billion from others.

Against the same period of the previous year, the income from major commodities increased by MNT 321.3 billion or 24 percent; incomes from coal extraction increased by MNT 230.4 billion (41.3 percent), copper–by MNT 97.9 billion (15.7 percent), iron—by MNT 5.1 billion (53.8 percent) and fluorspar –by MNT 9.3 billion (96.9 percent).
Also, there are registered 2889 exploration and mining licenses of mineral resources throughout the country.

Source: Montsame

TAVAN TOLGOI-GASHUUN SUKHAIT RAILWAY PROJECT TO PROCEED

The project of the Tavantolgoi-Gashuunsukhait railway, which was stopped since 2015, to continue from this year as the basic conditions have been made. Feasibility study on transportation and border railway are currently undergoing.
In June of 2018, Parliamentary resolution No.73 “Paths to develop the coal mining on intensifying activities in Tavantolgoi” instructed the Government of Mongolia to take on intensifying activities of the railway project between Tavantolgoi coal deposit and Gashuunsukhait.
The Tavantolgoi-Gashuunsukhait railway will be approximately 240 km long with 2 stations, 5 passing loops and will pass through Tsogttsetsii, Bayan-Ovoo, Khanbogd soum of Umnugovi province. With this railway built, Mongolia can increase export capacity by 30 million tons of coking and thermal coal annually. Also, Mongolia’s mining companies will be able to compete in the global market for cheaper exports, which will support coal exports and China’s ports.

Source: ZGM Daily, Montsame

REVENUES OF TOP COMPANIES RISE

The total net profit of the top 12 largest companies which lead the top 20 Index by trading volume and activity reached MNT 52 billion. For example, LendMN NBFI JSC’s net profit doubled and totaled MNT 2.5 billion. As of August, 80 of 200 MSE-listed companies have announced their financial results for the first half of 2019.
Tavantolgoi JSC accounted for 44 percent of the top 20 index’s total revenue. The company’s net profit increased 19 percent, to MNT 23 billion compared to the same period of last year. Sales revenue of the company reached MNT 123.7 billion, increasing by 36.7 percent as the coal price and exports were stable. SUU JSC, one of the main players in the food sector, also increased its net profit by 71 percent, to MNT 4.79 billion.

Source: ZGM Daily

MONGOLIA EYES BUSINESS OPPORTUNITIES AT CHINA-MONGOLIA EXPO

Mongolia will explore ways of expanding trade and investment cooperation with China at the upcoming China-Mongolia expo.
The third edition of the biennial China-Mongolia expo is scheduled for Sept. 6-10 in Hohhot, the capital of China’s Inner Mongolia Autonomous Region, and in the cities of Tongliao and Ulanqab in the region.
“Mongolian companies have already been ready to participate in the expo. The expo is a great chance for our country to further boost trade ties with China, which is the world’s second-largest economy,” Banzai Batkhuu, head of the Light Industry Policy Implementation and Coordination Department at the Ministry of Food, Agriculture and Light Industry, told Xinhua in a recent interview, noting that Mongolia attaches great importance to the expo.
About 400 companies are expected to attend this year’s expo, which will be organized under core programs of the exhibition, covering cultural exchanges, conferences and investment, said Batkhuu.

Source: Xinhua

ADB: IMPROVING MANAGEMENT OF NATURAL RESOURCE REVENUES IN MONGOLIA

This policy note discusses how Mongolia can achieve sustained macroeconomic stability by improving the management of its natural resource revenues.
Mongolia’s economic fortunes are closely tied to the performance of its major commodities, especially those in the mineral sector. As a result of commodity dependence, the economy is exposed to boom and bust cycles. This policy note draws on the experience of other countries to offer solutions toward a more resilient and sustainable economy. The recommendations focus on strengthening public financial management and policy implementation as well as the need to foster greater economic diversification.

Source: ADB

BOM TO ISSUE MORTGAGE LOANS UNTIL 2020

The Bank of Mongolia (BoM) has been continuing to dispense mortgage funding for two years, considering the social significance of the mortgage lending program. The program will be implemented jointly with the government until 2020. According to this agreement, the BoM shall finance the fund from its bonds guaranteed by its credit until 2019.
As of August, funding worth MNT 283 billion has been given to 4,000 lenders for mortgage loans from three different sources.
The three sources, including the central bank, government, and other banks, are providing the mortgage funds with MNT 36 billion per month. A total of MNT 430 billion will be allocated tothe fund in 2019. In specific, the BoM issues MNT 16 billion from its bond revenue each month. The government also provides funding to loan from the state budget and other banks issue at least 10 billion of its reserves.

Source: ZGM Daily

RECORD NUMBER OF TAIWANESE TOURISTS IN MONGOLIA

According to statistics from the Ministry of Environment and Tourism, Mongolia received a total of 215780 tourists in the first half of the 2019; this represents an increase of 6.48 percent or 13,132 people on the same period last year.
The number of Taiwanese tourists to Mongolia increased to 2020 visitors (30.1 percent or 467 people) in the first half of 2019 in comparison with the same period last year. Regarding some other countries: Belarus increased by 23.4 percent, Japan by 19.7 percent, Germany by 17.1 percent, China by 8.8 percent and South Korea by 6 percent.
Huang Kuo-Jung, Taipei’s representative to Mongolia noted that Mongolian travel agencies actively advertised Mongolia as a destination at the Taipei International Tourism Expo which directly contributed to the rise of tourists. For example, the Mongolian khuumii artist D.Davaasuren’s performance with morin khuur at the expo attracted much attention. The Taiwanese love to travel – over 10 million people travel abroad annually.

Source: News.mn
See also: Mongolia welcomes 215 thousand tourists in the first half of 2019

UNIVERSITY TUITION AVERAGES 1.6 MILLION TO 3.6 MILLION MNT

Representatives from the Ministry of Education, Culture, Science and Sports provided an update on kindergarten and school registration, university tuition and other information related to the new academic year on Tuesday.
Minister of Education, Culture, Science and Sports Yo.Baatarbileg, Deputy Minister G.Ganbayar and State Secretary B.Bayarsaikhan attended the press conference.

The ministry estimates that over 10,000 students will enroll into local universities. On average, university tuition in Ulaanbaatar ranges between 1.6 million MNT and 3.6 million MNT. The national tuition rate will reportedly be finalized by August 25.
“The number of university students used to increase by 30,000 to 40,000 in the past but this year, around 10,000 students will enter university. This is connected to the age structure of the population,” stated Minister Yo.Baatarbileg. “The curriculum is being improved for the 2019-2020 academic year. This will ensure there is no delay in the contents, teachers aren’t overworked, and parents are more involved.”

Source: The UB Post

MONGOLIA TO SUPPLY DOMESTIC DEMAND FOR WHEAT

Mongolia is expected to harvest 420,000 tons of wheat to meet domestic demand, according to the preliminary balance. The Ministry of Food, Agriculture and Light Industry estimates 176,800 tons of potatoes, 91,000 tons of vegetables and 38,000 tons of oil will be harvested.
75.6 percent of the total planted area, or 250,000 hectares of land, is well-growing. The crop of this year are predominant in Bulgan, Khuvsgul, Orkhon, Arkhangai, Uvurkhangai, Uvs and Selenge provinces. However, the yield may be slightly reduced due to overheating and drought in the northern part of Tuv, Darkhan-Uul, Dornod, Khentii, Sukhbaatar and Selenge provinces.
According to weather forecasts, the snow will fall in early September due to heavy rainfall in late August. Therefore, we are working to keep harvesting efficient during the technological period, said the Minister of Food, Agriculture and Light Industry.

Source: ZGM Daily

UNICEF SEEKING INTERNATIONAL INDIVIDUAL CONSULTANCY ON STRENGTHENING SOCIAL SERVICE WORKFORCE

The purpose of this technical assistance is to provide strategic and practical guidance on how to strengthen the social service workforce for UNICEF Mongolia and national partners engaged in strengthening the social service workforce across all sectors, especially for child protection programming.
Expected results:  

·         A 2-day workshop is organized in Ulaanbaatar sensitizing 30 national partners on the three strategic pillars of planning, development, and support to strengthen the social service workforce and increasing their understanding about the role and function of the social service workforce within the child protection system;

·         An action plan inclusive of context specific strategies and interventions is developed for strengthening the social service workforce in the short, medium and long term;

Source: UNICEF

MNCCI PRESIDENT: MONGOLIA’S ECONOMY IS SMALLER – INTERVIEW

The Boao Forum for Asia was held in Ulaanbaatar on August 19- 21, discussing several crucial issues in the region. Amartuvshin Otgondavaa, President of Mongolian National Chamber Of Commerce and Industry (MNCCI) gave a brief interview to talk about the significance of the forum and planned projects of the chamber.
-Recently, some mining companies’ licenses were revoked. What is your opinion on this?
-It’s about lacking connectivity between the government and local entities. And investment needs time. Instead of interfering with mining companies, the government should improve its connectivity with middle-level administrations of the provinces. Private entities are not responsible for the order that has been made already. On the other hand, it’s not right to blame the entire business sector for the illegal activities of a few companies.

Source: ZGM Daily

BUSINESS

SOUTHGOBI ANNOUNCES TERMINATION OF MINING LICENSES FOR THE SOUMBER DEPOSIT

SouthGobi Resources Ltd. announces that SouthGobi Sands LLC, the wholly-owned Mongolian operating subsidiary of the Company, received a letter on August 26, 2019 from the Mineral Resources and Petroleum Authority of Mongolia  notifying that the Company’s three mining licenses (MV-016869, MV-020436 and MV-020451) for the Soumber Deposit have been terminated by the Head of Cadastre Division of MRAM effective as of August 21, 2019.
According to the Notice Letter, the Soumber Licenses have been terminated pursuant to Clause 56.1.5 of Article 56 of the Minerals Law, Clauses 4.2.1 and 4.2.5 of Article 4 and Clause 28.1.1 of Article 28 of the General Administrative Law and a decision order of a working group established under an order of the Minister of Environment and Tourism (Mongolia). According to this decision order, the working group determined that SGS had violated its environmental reclamation obligations with respect to the Soumber Deposit.

Source: GlobeNewsWire.com

MONGOLIA SEES HEALTHY COMPETITION AND STRONG BROADBAND GROWTH – R&M

Mongolia possesses a liberalised and competitive telecoms market served by multiple competing players, reports Research & Markets.
South Korea’s KT Corp completed the sale of its 40% stake in Telecom Mongolia back to the Mongolian government, although the incumbent operator no longer holds a dominant share of the country’s market. Meanwhile, the Mongol Sat-1 platform was launched in partnership with Asia Broadcast Satellite (ABS).
The growing popularity of mobile broadband has underpinned overall broadband and telecoms growth. This trend is consolidating Mongolia’s position as a mobile first telecoms market and shaping the future direction of Mongolia’s developing digital economy.
The penetration of fixed lines in Mongolia has increased strongly over the past five years as a higher proportion of residences decide to take a fixed line access option. Penetration is however predicted to only increase slightly over the next five years to 2023.

Source: DevelopingTelecoms.com

MSE MARKET CAP INCREASES 4.8 PCT IN H1

The “Mongolian Stock Exchange” state-owned company has achieved the following results in the first half year of 2019, but not limited to:

MSE traded total of 376.9 million shares worth MNT 82.3 billion on primary and secondary markets while 79.8 thousand units of Government bonds worth MNT 7.9 billion on secondary market. In total, the market turnover reached MNT 90.2 billion which showed an increase of 16.1 percent or MNT 12.5 billion compared to the same period of last year.

·         The market capitalization grew by 4.83 percent to MNT 2.6 trillion as compared to the previous year.

·         MSE experienced the record number of IPOs, 4 new issues in a half year, in the reporting period. The primary market trades amounted to MNT 42.5 billion which indicates a three-fold growth.

·         In order to ensure compliance of listed companies, MSE has delisted 22 issuers who failed to perform its obligations as well as whose trade suspended for a long period.

Source: MSE, ZGM Daily

TURQUOISE HILL: CATCHING FALLING KNIVES AT THIS POINT

Summary

·         Turquoise Hill has had a brutal year so far in 2019, as shares of TRQ are down an astounding -73.33% since the start of the year.

·         Shares of TRQ were worth ~$9 billion at one point in 2015, and the current market cap is just ~$886 million.

·         Oyu Tolgoi is on track to produce 125-155k tonnes of copper and 220-230k oz of gold this year, but the company has recently run into issues with its underground development.

·         An estimated $1.2-1.9 billion is needed to fix stability issues which could postpone first production at Oyu Tolgoi Underground until May 2022 to June 2023 time frame (16-30 month delay).

·         There are many headwinds to consider at this time: a Definitive Estimate to determine the exact remedial mine design and costs won’t be completed until H2 2020, an upcoming session with the newly appointed working group set for September 1, potential tax-loss selling, and overall weakness in the market, as falling copper prices and fears of a global recession have become the dominant narrative of late.

Source: Seeking Alpha

XANADU MINES RESULTS HIGHLIGHT SHALLOW OXIDE GOLD STARTER POTENTIAL AT KHARMAGTAI PROJECT

Xanadu Mines Ltd has received high-grade shallow results in the second batch of assays from an oxide gold drilling program at the Kharmagtai Copper-Gold Project in southern Mongolia.
These results form part of the company’s 2019 drilling program which has made substantial progress towards defining a shallow oxide gold resource as part of a strategy to develop a gold starter project.
The new assays have increased the company’s confidence in the emerging oxide gold opportunity at Kharmagtai with Stockwork Hill being the first prospect to be drilled outside the Kharmagtai deposit.
Xanadu’s chief executive officer Andrew Stuart said: “We are very pleased by these new drill results from the mineralised oxide zone above the Stockwork Hill copper-gold deposit which has delivered some pleasant surprises – not least which are the much higher than anticipated gold grades.”

Source: Proactive Investors
See Xanadu release

JAPANESE INTERESTED IN PRODUCING EXPORT PRODUCTS USING MONGOLIAN MILK

On August 23, Chairman of the National Development Agency (NDA) B.Bayrsaikhan together with Mongolian experts and researchers held a meeting with Japanese experts who arrived in Mongolia to explore possibilities for cooperation in studying milk and dairy products derived from Mongolian cattle, which found to be rich in lactic acid bacteria, and putting the products into economic circulation, and investment opportunities.
Informing that an objective for regional development of rural economies has been set in the Government’s action plan, NDA Chairman B.Bayrsaikhan underlined the opportunity to cooperate in processing milk, building factories and plants, and promoting Mongolian brand to the world through advanced technology.
The Japanese side expressed its willingness to bring Mongolian milk and dairy products processed with Japan’s advanced technology to the world market, while speaking of their plan to produce high-grade whiskey with milk and fermented mare’s milk as it is definite that the addition of these products that are rich in lactic acid bacteria will bring taste and quality.

PROPHECY’S STOCK PRICE JUMPS 56 PCT AFTER ANNOUNCING A SPIN-OFF PLAN

Prophecy Development Corp. specializes in mine permitting, construction, and operations. Prophecy has two near-term producing (vanadium, silver) and one producing (coal) mining projects. Prophecy has recently announced the formation of two subsidiaries to facilitate potential future spin-offs of the Company’s wholly-owned Bolivian silver operation and Mongolian coal operation; Silver Elephant Mining Corp. and Asia Mining Inc. in order to facilitate potential future spinoffs of the Company’s wholly owned Bolivian silver operation and Mongolian coal operation.
The Company’s Ulaan Ovoo coal mine is located in northern Mongolia and has received over US$50 million investment since 2010. It features an average strip ratio of 1.8. The mines coal has less than 1% sulfur, and low ash (8 to 11%) which is well-suited for power plants, cement plants and boiler heat applications. Since March 2019 the mine has been operated by a lessee where Asia Mining stands to earn $2 per tonne of Ulaan Ovoo coal sold.

Source: InvestorIntel.com

MSE HOLDS OPEN EVENT TO DEMONSTRATE CAPITAL MARKET KNOWLEDGE

In order to improve capital market knowledge of rural citizens, Mongolian Stock Exchange (MSE) JSC organized ‘Capital Markets Open Day’ event in Arkhangai and Khuvsgul provinces on August 19-24, 2019 in cooperation with Mongolian Central Securities Depository, Erdenes Tavantolgoi JSC and Goodsec LLC.
During the event, the training covering basic capital market concepts and the ways to participate in the market through investing and capital-raising were provided to local citizens and corporate personnel.

Source: ZGM Daily, MSE

CHINA’S HAINAN AND MONGOLIA ESTABLISH DIREST FLIGHTS

Direct air traffic has been established between the Chinese resort city of Sanya, Hainan, and Mongolia. The first flight from Mongolia’s capital, according to the Hainan Daily newspaper, landed at Sanya Fenghuang International Airport on August 25.
The flights will be operated aboard Boeing 737-800s by Mongolian Airlines once a week.
Hainan Province is recently becoming closer to the rest of the world. Every year, dozens of new international flights are being established; the move is aimed at attracting not only tourists but also highly qualified personnel, taking into account the creation of a pilot free trade zone on the island and the authorities’ plans to turn Hainan into a large tourist and innovation center with an advanced economy, science and industry.
Hainan Province is recently becoming closer to the rest of the world. Every year, dozens of new international flights are being established.

Source: TASS

B.JAVKHLAN: ‘PEOPLE USED TO BUY FOUR WALLS AND A CEILING, BUT NOW THEY BUY LIFESTYLE’ – INTERVIEW

The UB Post interviewed B.Javkhlan, a real estate expert with 10 years of work experience in Singapore and Mongolia. He is CEO at real estate portal www.oly.mn in Mongolia. In the following interview, he talks about the real estate market in Mongolia. 
There are many new construction projects in Ulaanbaatar. Do you see any significant changes in this sector from previous years?
Right now there are 350 active construction projects in the market in Ulaanbaatar. It is a very large number. From a consumer point of view, there are a lot of choices, but a little bit difficult for users to get the information they are searching for from one source. But, there are many good changes compared to 10 years ago. Mongolian construction companies are researching and studying international standards and implementing them. First of all, there is a change in the real estate sector due to changing customer demand.

Source: The UB Post

MEET THE SISTERS BEHIND MONGOLIA’S HOTTEST – AND MOST PROGRESSIVE – FASHION BRAND, MICHEL&AMAZONKA – INTERVIEW

Style. Not everyone has it. But the designer duo Michel&Amazonka, the hottest – and most progressive – design team in Mongolia at the moment, they do.
And it shows in their collections. Between their updates on traditional deels (the robe-like garments still worn by Mongolians) to their embroidered bomber jackets, where they got their start, the sisters behind the brand are grabbing the attention of Ulaanbaatar’s most fashionable crowd for the risks that they take, and that’s what’s to love about them.
So, I sat down with the girls, Michel, Amazonka and sister-CEO Munkhjargal Choigaalaa (who helped interpret) and asked them about Mongolian fashion, the steps they’re taking towards becoming more sustainable (a concept that isn’t big in Mongolia, yet), finding inspiration locally, what it’s like to balance business and family, and more.

Source: Forbes

AFRICAN FOOTBALLERS STRANDED AROUND THE WORLD WITH CRUSHED DREAMS – EDITORIAL

In Ulaanbaatar, the Mongolian capital, Moshood Afolabi, a 24-year-old aspiring Nigerian footballer, is stranded.
As an undocumented migrant, he has lost the occasional construction work that helped offset his rent of a shared apartment and internet bill.
He arrived in Mongolia on May 10 last year in search of a football career, with the help of an “agent”, at second-tier outfit Khovd Western FC, intending to use the east Asian country as a stepping stone to Europe.
“I didn’t plan to get to Mongolia because I planned to go to the UK [or another European country],” he told Al Jazeera by phone.
Afolabi’s agent lived near his home in Osogbo, in the southwestern Nigerian state of Osun. According to him the agent ran his agency scheme on the side, as he maintained an active football career.

Source: Al Jazeera

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