1 MONGOLIA'S INDUSTRIAL OUTPUT RISES 19.5 PCT IN FIRST 11 MONTHS WWW.XINHUANET.COM PUBLISHED:2018/12/13      2 POWER FOR EVERY STAGE OF THE MINE LIFECYCLE WWW.AGGREKO.COM PUBLISHED:2018/12/13      3 CHINA EXPRESS PLANS SCHEDULED FLIGHTS TO MONGOLIA, LAOS, THE PHILIPPINES AND SINGAPORE IN 2019 WWW.KUCINTA-SETIA PUBLISHED:2018/12/13      4 REVENUE OF RAIL AND AIR TRANSPORTS INCREASES RESPECTIVELY WWW.MONTSAME.MN PUBLISHED:2018/12/13      5 TAX REVENUE INCREASES BY 30.8 PERCENT WWW.MONTSAME.MN PUBLISHED:2018/12/13      6 CONSTRUCTIONAL PROJECT OF THERMAL POWER PLANTS ADVANCES WWW.MONTSAME.MN PUBLISHED:2018/12/13      7 GOVERNOR OF BOM COMMENTS ON FX INTERVENTION OF THIS YEAR WWW.ZGM.MN PUBLISHED:2018/12/13      8 SME DEMAND FOR GREEN CREDIT TOTALS USD 1.5 BILLION WWW.ZGM.MN PUBLISHED:2018/12/13      9 MONGOLIA CALLS FOR POLITICAL FINANCE REFORM AMID POLITICAL TURMOIL WWW.IDEA.INT PUBLISHED:2018/12/12      10 RIO TINTO'S PARTNER IN AUSSIE COPPER PROJECT REPORTS 'WEAK MINERALIZATION' WWW.MINING.COM PUBLISHED:2018/12/12      АГААРЫН БОХИРДЛЫГ БУУРУУЛАХАД БНСУ-ЫН БАНКНААС 60 САЯ АМ.ДОЛЛАР ЗЭЭЛНЭ WWW.BLOOMBERGTV.MN НИЙТЭЛСЭН:2018/12/13     2019 ОНД ЭКСПОРТЫН ОРЛОГО ТӨЛӨВЛӨСӨН ХЭМЖЭЭНД ХҮРЭХГҮЙ БАЙХ БОДИТ ЭРСДЭЛ БАЙНА ГЭЖ ЭДИЙН ЗАСАГЧИД АНХААРУУЛАВ WWW.BLOOMBERGTV.MN НИЙТЭЛСЭН:2018/12/13     “ЭРДЭНЭС ТАВАН ТОЛГОЙ”-Н IPO-Г ЗАСГИЙН ГАЗАР, УИХ-Д ТАНИЛЦУУЛНА WWW.NEWS.MN НИЙТЭЛСЭН:2018/12/13     ИНФЛЯЦИ 2018 ОН ГАРСНААС ХОЙШИХ ХАМГИЙН ӨНДӨР ТҮВШИНД ХҮРЛЭЭ WWW.GOGO.MN НИЙТЭЛСЭН:2018/12/13     ТОКИОД МОНГОЛ УЛСЫН ХУДАЛДААНЫ ТӨЛӨӨЛӨГЧИЙН ГАЗАР НЭЭНЭ WWW.EAGLE.MN НИЙТЭЛСЭН:2018/12/13     НИЙТИЙН ТЭЭВРИЙНХЭНД 73.4 ТЭРБУМ ТӨГРӨГ ӨГНӨ WWW.UNUUDUR.MN НИЙТЭЛСЭН:2018/12/13     “ОЮУ ТОЛГОЙ” ХХК-ИЙН ХЭРЭГЖҮҮЛЖ БУЙ ДОТООДЫН ТЭТГЭЛЭГТ ХӨТӨЛБӨРТ 2018-2019 ОНЫ ХИЧЭЭЛИЙН ЖИЛД ХАМРАГДАХ 30 ОЮУТАН ШАЛГАРЛАА WWW.OT.MN НИЙТЭЛСЭН:2018/12/13     БНСУ-ЫН БАЙГУУЛЛАГУУД МОНГОЛД ОЙЖУУЛАХ ТӨСӨЛ ХЭРЭГЖҮҮЛНЭ WWW.MONTSAME.MN НИЙТЭЛСЭН:2018/12/13     2019 ОНД ХӨГЖЛИЙН БЭРХШЭЭЛТЭЙ ИРГЭДИЙН ТЭТГЭВРИЙГ НЭМЭГДҮҮЛЭХЭД 21.2 ТЭРБУМ ТӨГРӨГ ЗАРЦУУЛНА WWW.UNUUDUR.MN НИЙТЭЛСЭН:2018/12/12     ЕРӨНХИЙ САЙД ЯПОН УЛСЫГ ЗОРИЛОО WWW.DNN.MN НИЙТЭЛСЭН:2018/12/12    

Events

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"Open to Export" ICC WTO International business award ICC WTO London

NEWS

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Mongolia's industrial output rises 19.5 pct in first 11 months www.xinhuanet.com

ULAN BATOR, Dec. 12 (Xinhua) -- Mongolia's industrial output rose 19.5 percent in the first 11 months this year, compared to the same period last year, official data showed Wednesday.

The industrial output amounted to 14.1 trillion Mongolian Tugriks (over 5.3 billion U.S. dollars) in the January-November period, according to the data released by the National Statistical Office.

Output of the main mining products increased by 18.3 percent year on year, which is a key engine of industrial production growth in Mongolia.

In particular, raw coal production increased by 57.9 percent, and iron ore production rose 3.3 percent year-on-year in the period.

Mining is the main industry of the landlocked Asian country. Currently, the industry accounts for about a quarter of the mineral-rich nation's gross domestic product and about 90 percent of exports.

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Power for every stage of the mine lifecycle www.aggreko.com

Aggreko has supplied CITIC Pacific Mining with critical load-testing capacity along with a highly flexible, supplementary power package during the construction of the Sino Iron project, located at Cape Preston, 100 km south west of Karratha, Western Australia. The project is the largest magnetite mining and processing operation under construction in Australia. Aggreko supplied 12 MVA of loadbank capacity to test the power generation capability of the on-site gas-fired power plant. Once fully commissioned, the 450 MW power plant will provide power to the entire operations at the mine: including the processing plant, the specially built port and the living quarters of the mine’s employees.

Loadbanks are used during commissioning to test the precise power-generating capacity of a power plant before it goes into operation. In addition to load-testing, Aggreko supplied 2.5 MW of power that was used at different stages of the project. This included 1,600 kVA for the commissioning of the processing plant and 350 kVA to power the intake pump of the project’s desalination plant. A further 13 generators were utilised for the commissioning of the dewatering plant.
”Aggreko’s contribution to the Sino Iron project highlights our ability to deliver multi-faceted, fully customised and highly flexible power solutions to our customers,” commented Asterios Satrazemis, Managing Director, Aggreko Australia-Pacific. “Our ability to cope with the complexity and size of the project, along with the constantly evolving demands placed on our equipment, is a great endorsement of both our people and our fleet.” Once fully commissioned, the mine’s own 450 MW power plant would be used to provide power to everything from the mine’s very own port to the many processing facilities. Testing the load on the plant was critical, and our 14 load banks were up to the task.

Our back-up power helped CITIC Pacific tick all those other construction jobs off their list. With our help, they moved closer to the final commissioning of this massive magnetite ore mine.

To learn more about our products and services you may at our site www.aggreko.com or please contact us at Mongolia@aggreko.com or Begench.Turayev@aggreko.com for more information

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China Express plans scheduled flights to Mongolia, Laos, the Philippines and Singapore in 2019 www.kucinta-setia

According to the flight permit notice of CAAC on 12 December 2018, China Express, short for China Express Airlines, plans to launch direct scheduled flights from different Chinese cities to Mongolia, Laos, the Philippines and Singapore in 2019. The proposed routes are listed below:

China Express plans up to thrice-weekly cargo/passenger flights from Hohhot to Ulaanbaatar, the capital of Mongolia, in January 2019.

Cargo/passenger flights from Tianjin to Ulaanbaatar are planned to be operated by China Express up to four times a week starting from January 2019. Aircraft is either Bombardier CRJ900 or Airbus A320-200 aircraft.

China Express plans daily flight from Chongqing to Vientiane, the capital of Laos, using Airbus A320 aircraft. Inaugural flight is planned to take off in January 2019. If there is no opposition from Lao Airlines, Vientiane will be the first airport outside China to welcome China Express' A320-200 aircraft.

In February 2019, China Express plans to launch daily flight from Chongqing to Manila in February 2019 using A320-200 aircraft.

Finally, China Express plans to launch non-stop flight from Guiyang to Singapore Changi Airport in April 2019. Cargo/passenger flights using A320 aircraft will be operated on this route up to four times a week.

If the flight frequencies are not opposed by other air transport operators in China before 18 December 2018 and are approved by the respective airport authorities, China Express will avail the flight schedules and ticket prices on its web-site www.chinaexpressair.com and on-line ticketing platforms such as Ctrip and Trip in due course.

Currently, China Express operates flights from the Guangxi port city of Zhanjiang to Phnom Penh and Don Mueang using Bombardier CRJ900 aircraft.

China Express has a fleet of 6 A320-200 and 38 Bombardier CRJ900 aircraft.

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Revenue of rail and air transports increases respectively www.montsame.mn

Ulaanbaatar/MONTSAME/ In the first 11 months of 2018, 23.4 million tonnes of freight and 2.4 million passengers (double counting) were carried by railway transport. Compared to the same period of previous year, the volume of carried freight increased by 2.8 million tonnes (13.5 percent), whereas the number of carried passengers decreased by 78.2 thousand passengers (3.2 percent).

In November 2018, 2.3 million tonnes of freight and 194.4 thousand passengers transported by railway transport. The freight volume decreased by 136.4 thousand tonnes (5.7 percent), and the number of passengers decreased by 21.2 thousand (9.9 percent) compared to the previous month.

In the first 11 months of 2018, 39.7 percent of the total carried freight through railway was domestic freight, 36.0 percent was export freight, 11.1 percent was import freight and 13.2 percent was transit freight. Export and import freights increased by 1.0 points and 0.9 points, while domestic freight and transit freight decreased by 1.7 points and 0.3 points from the same period of the previous year respectively.

In the first 11 months of 2018, the revenue from railway transport reached MNT 561.2 billion, increased by MNT 80.6 billion (16.8 percent) compared to the same period of previous year.

In the first 11 months of 2018, 2.9 thousand tonnes of freight and 867.5 thousand passengers (double counting) transported by air transport. The freight volume increased by 73.8 tonnes (2.6 percent) and the number of carried passengers increased by 97.6 thousand (12.7 percent) compared to the same period of previous year. In November 2018, 240.5 tonnes of freight and 71.1 thousand persons transported by air transport. The freight volume decreased by 63.4 tonnes (20.9 percent), and the number of carried passengers decreased 7.2 by thousand (9.2 percent) from the previous month.

In the first 11 months of 2018, the total of domestic passengers travelled by air transport reached 325.5 thousand (37.5 percent) showing a rise of 36.6 thousand passengers (12.7 percent) from the same period of previous year. The number of international passengers reached 542.0 thousand (62.5 percent), reflecting an increase of 61.0 thousand passengers (12.7 percent) compared with the same period of previous year.

The revenue from air transport reached MNT 395.9 billion, increased by MNT 37.9 billion (10.6 percent) compared to the same period of previous year. In November 2018, revenue from air transport reached MNT 24.0 billion, decreased by MNT 2.1 billion (8.0 percent) compared to the previous month.

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Tax revenue increases by 30.8 percent www.montsame.mn

Ulaanbaatar/MONTSAME/ In the first 11 months of 2018, total equilibrated revenue and grants of the General Government Budget reached MNT 8.2 trillion and total expenditure and net lending amounted to MNT 8.0 trillion. In the first 11 months of 2017, the equilibrated balance was in deficit of MNT980.4 billion, however, it is in surplus of MNT 266.4 billion in first 11 months of 2018.

In November 2018, equilibrated revenue and grants of the General Government Budget decreased by MNT 303.2 billion and total expenditure and net lending increased by MNT 33.9 billion from the previous month.

Tax revenue reached MNT 7.4 trillion, increased by MNT 1.7 trillion or 30.8 percent compared to the same period of the previous year. This growth was mainly affected by increases of MNT 483.6 billion or 32.7 percent in value added tax, MNT 437.2 billion or 30.5 percent in income tax, MNT 264.3 billion or 22.9 percent in social security income, MNT 230.5 billion or 50.1 percent in excise taxes, MNT 160.8 billion or 35.3 percent in revenue of foreign activities and MNT 134.9 billion or 25.5 percent in other taxes.

The General Government revenue were comprised of 81.4 percent of tax revenue, 9.6 percent of non-tax revenue, 6.7 percent of the future heritage fund and 2.2 percent of stabilization fund.

In the first 11 months of 2018, total expenditure and net lending of the General Government Budget amounted to MNT 8.0 trillion, increased by MNT 522.6 billion or 7.0 percent compared to the same period of the previous year. This growth was affected by increases of MNT 379.2 billion or 6.3 percent in current expenditure, MNT 80.4 billion or 37.3 percent in net lending, MNT 63.0 billion or 5.4 percent in capital expenditure, whereas, subsidies decreased by MNT 26.3 billion or 12.1 percent and MNT 33.5 billion or 3.4 percent in interest compared to the same period of the previous year.

The General Government expenditure and net lending were comprised of 80.7 percent of current expenditure, 15.3 percent of capital expenditure and 4.0 percent of net lending.
source: National Statistics Office

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Constructional project of thermal power plants advances www.montsame.mn

Ulaanbaatar/MONTSAME/ At its regular meeting on December 12, the Cabinet decided to authorize the Minister of Finance Ch.Khurelbaatar to sign a loan agreement for ‘Project to construct thermal power plant in centers of 10 aimags’ to be established between the Ministry of Finance of Mongolia and the Export-Import Bank of Korea.

Within the project, thermal power plants will be constructed in Arkhangai, Bayankhongor, Gobi-Altai, Gobisumber, Dundgobi, Zavkhan, Uvurkhanga, Sukhbaatar, Khentii and Tuv aimags alongside expansion of heating network and modernization of equipment.

The plants will be built with the soft loan worth over USD148 million. The loan with 0.15 percent interest will be repaid within 40 years and will have a moratorium period of 10 years.

Moreover, the Cabinet made a resolution on authorizing to sign the Loan Agreement objecting to the reduction of air pollution of Ulaanbaatar city.

The agreement reflects that USD40 million out of USD60 million which is stipulated to be a budgetary support will be received this year and remaining USD20 million will be received in the third quarter of next year. The loan has repayment term of 30 years, interest of 1.5 percent and moratorium period of 10 years.

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Governor of BoM comments on FX intervention of this year www.zgm.mn

Governor of the Bank of Mongolia (BoM) Bayartsaikhan Nadmid has released a statement to explain the current economic situations and measures, in which he highlighted that the bank supplied USD 1.2 billion for foreign exchange (FX) market intervention this year.

According to Mr. Bayartsaikhan, the FX reserves of Mongolia currently stands at a record-high of USD 3.4 billion. “Although the reserves hit USD 4.1 billion in 2012, USD 2.1 billion were raised from Chinggis and Development Bank bonds that year. The current amount may seem high; however, it is still insufficient for the current economic situation. Mongolia needs to settle its foreign debts, which reached USD 27.9 billion. There is a high risk of collapse in global economy. Major bond repayments will mature starting from the second half of 2020. Thus, it is ill-advised to utilize the FX reserves instead of saving it.”

He then explained the depreciation of MNT, saying “Amid high economic growth, FX reserves and stability in the financial market, the MNT rate fell by around 200 points in the last two months. This is due to the vulnerability of the economy that is highly dependent on mining sector. For instance, China started limiting its coal import in November. Compared to October, FX purchase of private entities grew by over USD 240 million in November and the first month of December.”

Mr.Bayartsaikhan also informed that the BoM, in order to stabilize the situation, injected over USD 400 million into the FX market as an intervention; however, the currency rate further sank, which was the indication of a speculative demand for money. This year in total, the bank administered USD 1.2 billion into the market. Last week alone, the bank supplied USD 130 million, said the Governor of BoM. He further suggested the Government to focus on political stability and avoid uncertainty to boost investors’ confidence and support export. “This is critical at the moment as Erdenes Tavan Tolgoi JSC is seeking to issue an IPO at international stock markets.”

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SME demand for green credit totals USD 1.5 billion www.zgm.mn

On the occasion of the five-year anniversary of the National Roadmap for Sustainable Finance, the Sustainable Finance Forum took place this week under the theme “Diversifying from Sustainable Finance”. According to officials, a total of MNT 1.3 billion was allocated to environmentally-friendly projects since the program inauguration.

In 2012, the Trade and Development Bank of Mongolia, in cooperation with Netherlands Development Finance Company, introduced the first Sustainable Finance program “Environmental and Social Management Systems” (ESMS) in Mongolia. As a result, the national roadmap was approved in the following year. The forum was initiated following an imminent need for private and public cooperation to develop and effectively implement policies, actions, and initiatives in line with the commitment of the Government of Mongolia to the global sustainable development agenda and the Paris Agreement, and the unanimous commitment of the banking sector to advance sustainable finance in the country.

According to the Mongolian Sustainable Finance Association (MSFA), a total of MNT 1.3 billion was granted to environmentally-friendly projects in the last five years. Furthermore, the banking sector financed another MNT 16 billion on environmental projects within this period.

• A total of MNT 1.3 billion allocated to environmentally-friendly projects since the program inauguration.

• Banks financed MNT 16 billion on environmental projects in the last five years.

• SME demand for green loans stands at USD 1.5 billion.

A market study conducted by the Mongolian Bankers Association (MBA) and MSFA shows that the small and medium-sized enterprise (SME) demand for green loans stands at USD 1.5 billion. Specifying by sectors, construction and processing plants require significant amount of loan. Thus, commercial banks informed that a low-interest credit source will allow them to distribute discounted loan for environmentally-friendly projects for SMEs.

Traditionally, the MBA annually selects a flagship bank to steer the business organizations towards environmentally and socially-friendly. In this year’s forum, the association picked Khan Bank to be in charge of green development activities in 2019. Thus, the bank will be responsible for protecting cultural heritage, supporting green economic growth and developing transparency.

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Mongolia calls for political finance reform amid political turmoil www.idea.int

Sandwiched between China and Russia, Mongolia’s democracy is in constant peril. The country’s political turmoil is not only prompted by the geopolitical forces outside of its borders, but also from creeping corruption from within.

The most recent chapter in Mongolia’s democratic experiment included a vote of no confidence against the Prime Minister last week. The move was propelled by a scandal that saw several high-level officials embezzling large sums of money through loans from a government fund that were intended to support small and medium-size businesses.

The Prime Minister dodged the bullet, but it was a close call. The scandal has left a government bruised in the eyes of the public, who already had a negative opinion of politics and politicians. Now, more than ever, Mongolia’s Parliament needs to demonstrate to the public that it’s serious about fighting corruption. Transforming the way that ‘big’ money flows in and out of politics should be the first step.

According to a report on political finance in Mongolia released last week by International IDEA and the Open Society Forum, the main obstacle standing in the way of a healthy political finance system stems from the weak implementation of its regulations.

In Mongolia, there is little oversight of how much private donors are pouring into parties’ coffers, not least because of how unclear the process is to select which party or candidate reports should be audited in the first place. To add insult to injury, political parties don’t even recognize the full authority of the agencies in charge, chiefly the National Audit Office, to request, audit and publish their reports.

The way private funders can contribute large sums of money to campaigns and parties is also a reason for concern. In a country rich in natural resources, corporate donations make an important part of the financial makeup of elections. And while it’s not rare to allow corporations to fund political parties (this is allowed in almost 70 per cent of countries around the world, according to International IDEA’s Political Finance Database), in Mongolia the problem is that corporations appear to disguise their contributions as individual donations and thus avoid the limits. To make things worse, some of these enterprises enjoy government contracts. It’s no surprise that they expect future favours in return.

Another pervasive practice in Mongolia is the role of candidates funding their own parties. While in other countries candidates receive some support (to more or less degree) from their parties to run for office, in Mongolia, the tables are turned: candidates are expected to contribute large sums of money to their parties in exchange for their nomination. And as election costs rise, so do the amount of money candidates are expected to pledge to their parties. All of this makes it harder, if not impossible, for women and young people to compete in politics, as they typically lack access to these types of large financial sources.

The good news is that Parliament has two windows of opportunity to improve the situation. Legislators are currently debating reforms to the Law on Elections and The Law on Political Parties, respectively. This gives them a golden opportunity to enact changes that address these and other challenges linked to the role of money in politics. After the recent wave of scandals, the public is eager for signs of hope.

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Rio Tinto's partner in Aussie copper project reports 'weak mineralization' www.mining.com

Antipa Minerals (ASX:AZY), the company conducting exploration at a Western Australia-based copper project with partner Rio Tinto (ASX, LON, NYSE:RIO), said Tuesday it had so far failed to find any economically viable veins of ore at the asset.

In an update Tuesday, the junior miner noted "weak mineralization" in the Folly target area that is part of the Citadel project, located in the Paterson province in a remote part of Western Australia’s Great Sandy Desert.

Antipa, which is also carrying out exploration activities on the North Telfer Project, located 40 km north of Newcrest’s world-class Telfer copper-gold-silver mine, noted that at this stage there was "no follow-up envisaged" for the Citadel project.

Antipa, which is also carrying out exploration activities on the North Telfer Project, noted that at this stage there was "no follow-up envisaged" for the Citadel project.
With partner Rio Tinto, Antipa sought to identify gold and copper mineralization at Citadel through the use of geophysical airborne electromagnetic (AEM) conductors. When kicking off the AEM survey in November, the companies both indicated they intended to follow up and test any targets they could identify in 2019.

Through an agreement inked in 2015, Rio has the right to earn up to 75% in Citadel after spending A$60 million (approximately $43m) in exploration over several years.

Citadel is not the only copper project Rio is looking at. The company has applied for nearly 30 exploration licences in the Paterson province, which is seen by many as a clear indicator of highly promising finds.

The Anglo-Australian group is also exploring Mongolia’s metals-rich Gobi desert, where it owns the vast Oyu Tolgoi copper-gold mine, scheduled to be operating by 2027.

Last year, Rio also applied for exploration permits in northern Chile’s Arica region. The firm already owns a minority stake in Escondida, the world’s largest copper mine, but the company doesn’t have its own operation in the country.

Copper rush
Rio is not the only miner on the quest for copper assets, a metal the industry sees as having one of the strongest outlooks. There are expectations that the electric-vehicle boom and demand for renewable energy will increase need for the metal.

The expected deficit will partly be a consequence of increasing demand for power generation (there are 300kg of copper in an electric bus and nine tonnes per windfarm megawatt).

But it’s also related to the fact that the current copper pipeline is at the lowest this century, both in terms of number and capacity.

“After delivery of Cobre Panama (with the main ramp early next year) we are left with a gap until we see the next batch of 200ktpa-plus projects in 2022-23,” Colin Hamilton, director of commodities research at BMO Capital Markets, said in April. “This is when the likes of Kamoa, Oyu Tolgoi Phase 2, and QB2 are likely to offer meaningful supply growth.”

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