1 FOREIGN RELATIONS OF MONGOLIA’S ROAD TRANSPORT SECTOR BROADENING WWW.MONTSAME.MN PUBLISHED:2019/02/21      2 MONGOLIA EXPRESSES READINESS TO CONTRIBUTE TO STRENGTHENING ASIA-EUROPE COOPERATION WWW.MONTSAME.MN PUBLISHED:2019/02/21      3 OYU TOLGOI FUNDED 35.1 KM ROAD OPENS IN KHANBOGD WWW.GOGO.MN PUBLISHED:2019/02/21      4 POLYMER BITUMEN TO BE DOMESTICALLY PRODUCED WWW.MONTSAME.MN PUBLISHED:2019/02/21      5 KHURELBAATAR CHIMED: 319 ENTITIES DREW LOANS FROM TWO FUNDS WWW.ZGM.MN PUBLISHED:2019/02/21      6 CONSTRUCTION OF TAVANTOLGOI-GASHUUNSUKHAIT ROAD TO BE INTENSIFIED WWW.MONTSAME.MN PUBLISHED:2019/02/20      7 OVER 30 MEASURES PLANNED FOR REDUCTION OF ENVIRONMENTAL POLLUTION WWW.MONTSAME.MN PUBLISHED:2019/02/20      8 MONGOLIA SAYS IT EARNS OVER 169 MLN USD FROM COAL EXPORTS TO CHINA IN JAN WWW.HELLENICSHIPPINGNEWS.COM  PUBLISHED:2019/02/20      9 RUSSIA’S GAZPROM TO START CHINA GAS PIPELINE BY DECEMBER 1 WWW.RT.COM PUBLISHED:2019/02/20      10 MONGOLIA'S FOREIGN TRADE UP 41.6 PCT IN JAN. WWW.XINHUANET.COM PUBLISHED:2019/02/20      УГСАРМАЛ ОРОН СУУЦНЫ ДУЛААЛГАД ЗОРИУЛЖ 12.7 ТЭРБУМ ТӨГРӨГИЙГ УЛСЫН ТӨСВӨӨС ГАРГАХААР БОЛЖЭЭ WWW.IKON.MN НИЙТЭЛСЭН:2019/02/21     2018ОНД ЦАГААН БУДАА , ЭЛСЭН ЧИХЭР , ТАХИАНЫ МАХНЫ ИМПОРТ 24-32 ХУВИАР ӨСЖЭЭ WWW.BLOOMBERGTV.MN  НИЙТЭЛСЭН:2019/02/21     ДЦС IV: 2018 ОНД НИЙТ АШИГ 4.7 ДАХИН ӨСӨЖ , 4.48 ТЭРБУМ ТӨГРӨГ БОЛСОН WWW.BLOOMBERGTV.MN  НИЙТЭЛСЭН:2019/02/21     ТУСГАЙ САНГУУДААС ГАРГАСАН ЗЭЭЛИЙН 100 ОРЧИМ ТЭРБУМ ТӨГРӨГ ХУГАЦАА ХЭТЭРСЭН ӨР БОЛЖЭЭ WWW.BLOOMBERGTV.MN  НИЙТЭЛСЭН:2019/02/21     МОНГОЛ УЛСЫН БОРЛУУЛАЛТЫН МЕНЕЖЕРҮҮДИЙН ИНДЕКС СҮҮЛИЙН 12 САРД АНХ УДАА УНАЛТЫН БҮСЭД ШИЛЖИВ WWW.BLOOMBERGTV.MN НИЙТЭЛСЭН:2019/02/21     2018 ОНД ХАМГИЙН ЧИНЭЭЛЭГ БҮЛГИЙН ХЭРЭГЛЭЭ ЯДУУ БҮЛГИЙНХНЭЭС 5.1 ДАХИН ИХ БАЙВ WWW.BLOOMBERGTV.MN НИЙТЭЛСЭН:2019/02/21     ХОВД ГОЛД ОСОЛДСОН 6 НАСТАЙ ХҮҮХДИЙН ЭРЛИЙГ ЗОГСООЛОО WWW.MONTSAME.MN НИЙТЭЛСЭН:2019/02/21     ДБНХ-НООС П.ОРХОНЫ БАРИЛДАХ ЭРХИЙГ 4 ЖИЛЭЭР ХАСАВ WWW.MONTSAME.MN  НИЙТЭЛСЭН:2019/02/21     УУХҮЯ: II САРЫН БАЙДЛААР НИЙТ НУТАГ ДЭВСГЭРИЙН 5.6 ХУВЬД АШИГТ МАЛТМАЛЫН ЛИЦЕНЗ ОЛГОСОН WWW.BLOOMBERGTV.MN  НИЙТЭЛСЭН:2019/02/20     300 ОРТОЙ ТӨРӨХ ЭМНЭЛГИЙН БАРИЛГЫН АЖИЛ 80%-Д ХҮРЧ ГУРАВДУГААР САРЫН 1-НЭЭС ДУЛААНД ХОЛБОГДОХООР БОЛЖЭЭ WWW.IKON.MN НИЙТЭЛСЭН:2019/02/20    

Events

Name organizer Where
“Doing business with Mongolia”, “UK Investors show” бизнес хөтөлбөр March 27-April 02. 2019 ЛОНДОН ХОТ, ИХ БРИТАНИ Mongolian Business Database London UK
SYMPOSIUM ON GLOBAL MARKETS Nationalism and Protectionism: The United States in the International Arena June 17-18, 2019 The Center for American and International Law Plano, Texas, USA The Center for American and International Law (CAILAW) Plano Texas June 17-18 2019
"Open to Export" ICC WTO International business award ICC WTO London

NEWS

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Mongolia imports 93.9 tonnes of coffee www.news.mn

In 2016, Mongolia Marketing Consulting LLC conducted a nationwide survey to determine how many people drink coffee. According to the survey, 53 percent of Mongolians aged between 15 and 60 drink coffee daily.

A total of 73 percent of Mongolians drink instant coffee, 20 percent medium coffee and the remainder Americano, the national survey said. Mongolians spend about MNT three billion on coffee in a year.

Coffee consumption is clearly rising: Mongolia imported 93.9 tonnes of coffee worth USD 803 thousand in 2017.

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Former Minister S.Bayartsogt loses DP membership www.montsame.mn

Ulaanbaatar /MONTSAME/ The Democratic Party (DP) has expelled former Minister of Finance S.Bayartsogt in the wake of corruption allegations against him.

The Party representatives led by Secretary-General Ts.Tuvaan held a press conference today at the party's headquarters, holding an ordinance dated March 20 and signed by Party Chairman S.Erdene, which effectively excludes the former Minister from the party membership.

According to the Secretary-General, the party’s corresponding bodies have taken urgent measures after media reports surfaced regarding DP member S.Bayartsogt’s alleged link to corruption, thus resulting in expulsion.

Following its meeting today, the DP Political Council issued a statement saying, “The party believes that an individual must be held responsible before the law despite of his rank and power if he is found guilty by the court for establishing disadvantageous agreement on behalf of Mongolia or accepting bribe. We demand immediate and resolute actions to settle the recent corruption allegations against the members of former Prime Minister S.Bayar’s Cabinet and other Mongolian politicians.”

The statement also cites the possibility of reconsidering the 2009 Oyu Tolgoi Investment Agreement if S.Bayartsogt is convicted.

The Independent Authority Against Corruption of Mongolia (IAAC) also reported today that it is cooperating with the Office of the Attorney General of Switzerland on the investigation of a criminal case on former Minister S.Bayartsogt. The press release also confirmed the seizure of a certain of amount of money in a Swiss bank account. 
Kh.Aminaa

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China's trade with Russia will soon reach $100 billion www.rt.com

The volume of trade between Russia and China increased by more than 20 percent last year and is still growing, according to Chinese Prime Minister Li Keqiang.
“We believe that Sino-Russian cooperation in the business sector has huge untapped potential. Trade turnover between our two big economies is currently about $80 billion,” said the head of the government during a press conference in Beijing. He expressed confidence that the trade volume could grow to $100 billion soon.

The prime minister explained that the current situation on the global raw materials market and with world trade as a whole had a negative effect on the two countries’ trade cooperation. Despite that, trade volume between Russia and China has increased by 20.8 percent year-on-year, reaching $84.07 billion in 2017.

“…We must understand that our countries are the largest neighboring states. I am confident that the stable development of relations… and cooperation with Russia is beneficial for both sides and the whole world,” he said.

In 2017, Chinese exports to Russia grew by 14.8 percent, to $42.88 billion; according to data from China’s General Administration of Customs. Chinese imports of Russian goods increased by almost 28 percent, to more than $40 billion. In December alone, trade turnover between the two nations stood at $8.13 billion.

The sides have been steadily expanding economic cooperation and will make additional efforts to increase trade to $200 billion in the coming years, said Russian Prime Minister Dmitry Medvedev. He added that preferential trade rules between the countries are being considered, which would increase the use of the ruble and yuan in settlements.

The two nations have established a Russian-Chinese investment fund worth 68 billion yuan (over $10 billion) to develop trade, economic investment, and scientific cooperation.

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Mongolian c.bank rejects interest rate cap as austerity bites www.reuters.com

ULAANBAATAR, March 20 (Reuters) - Mongolia’s central bank has rejected lawmakers’ proposals to cap or cut interest rates, currently among the world’s highest, as rifts deepen over an economic rescue package agreed with the International Monetary Fund (IMF) last year.

As parliament discusses a bill to prevent interest rates on commercial bank loans from exceeding 18 percent, Bank of Mongolia president Bayartsaikhan Nadmid proposed an alternative strategy during a forum on Tuesday.

“The central bank supports the strategy to decrease interest rates by enabling a macroeconomic environment for it, not by force or control,” he said.

Mongolia secured a $5.5 billion bailout with the IMF last May after an economic crisis left the landlocked Asian nation struggling to pay off its debts and sent its currency, the tugrik, into a tailspin.

The terms of the deal forced the government to raise taxes and cut spending, and also urged Mongolia to strengthen the independence of its banking system and make it less vulnerable to political interference.

Most of the austerity measures have been enacted by the ruling Mongolian People’s Party, but opposition politicians have expressed concern about the economic impact of high interest rates and are seeking powers to force banks to make cuts.

Mongolia has some of the world’s highest interest rates, averaging 19.4 percent in January, according to the central bank. The high rates have reduced economic activity and discouraged small businesses, analysts say.

Inflation currently stands at 6.9 percent, according to the Bank of Mongolia, below an 8 percent target.

Mongolia began subsidising mortgages in 2013 allowing homes to be bought at a rate of 8 percent. According to the Mongolian Mortgage Corporation, which manages the portfolio, total outstanding mortgages as of December 2016 stood at around 4 trillion tugrik ($1.67 billion).

However, the IMF has discouraged the central bank from participating in programmes it describes as “quasi-fiscal activity”.

Demberel Sambuu, a former legislator and head of an economic think tank, said demand for lower interest rates has been on the rise in recent years, but forcing banks to comply was not the solution.

“Fixing the maximum rates on loan interest would be an inefficient way,” he said.

$1 = 2,398 tugrik Reporting by Munkhchimeg Davaasharav and Terrence Edwards Editing by David Stanway and Sam Holmes

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Tree rings tell tale of drought in Mongolia over the last 2,000 years www.sciencenews.org

A new analysis is shedding light on drought in Mongolia, both past and future.

By studying the rings of semifossilized trees, researchers constructed a climate history for the semiarid Asian nation spanning the last 2,060 years — going 1,000 years further back than previous studies.

It was suspected that a harsh drought from about 2000 to 2010 that killed tens of thousands of livestock was unprecedented in the region’s history and primarily the result of human-caused climate change. But the tree ring data show that the dry spell, while rare in its severity, was not outside the realm of natural climate variability, researchers report online March 14 in Science Advances.

“This is a part of the world where we don’t know about the past climate,” says Park Williams, a bioclimatologist at Columbia University’s Lamont-Doherty Earth Observatory in Palisades, N.Y., who was not involved with the study. “Having this record is a great resource for trying to understand past droughts in the region.”

In recent years, many studies have sought to unsnarl the role of anthropogenic climate change from natural variability on extreme weather events (SN: 1/20/18, p. 6). Such work is necessary for more accurately predicting future climate trends and helping governments prepare for the most severe scenarios, says study coauthor Amy Hessl, a physical geographer at West Virginia University in Morgantown. This is especially true in countries like Mongolia that lack certain infrastructure, such as enough water reservoirs, to ease the impact of events like prolonged drought.

Hessl and her colleagues studied tree rings in hundreds of samples of Siberian pines, well-preserved by Mongolia’s naturally dry climate. A ring’s width indicates how much the tree grew in a year. In wet years, the rings are wider; in dry years, skinnier.

The recent dry spell was the severest in recorded history. But the rings showed that an even more severe drought took place around the year 800, long before anthropogenic climate change began.

Still, computer simulations suggest that about a third of the recent drought’s severity could have been caused by elevated temperatures linked to climate change, the researchers found. The finding is consistent with studies on how climate change has affected other recent droughts in South Africa and California.

Using computer simulations, Hessl and her colleagues conclude that droughts in coming decades may not be any worse than those seen in Mongolia’s past. The team predicts that as global temperatures rise over the next century, Mongolia will first become drier, then wetter. Increased heat initially will dry out the plains. But at a certain point, hot air holds more moisture, leading to increased precipitation.

Those climate patterns will likely guide how Mongolia develops, Hessl says, because they have in the past. In 2014, she and colleagues published a paper detailing how a 15-year period of unprecedented temperate and rainy conditions in 13th century Mongolia may have led to the rise of Genghis Khan

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Oyu Tolgoi sets operational records in 2017 www.ubinfo.mn

According to its 2017 financial results and operational review, Oyu Tolgoi JSC set operational records for its total material mined and concentrator throughput during 2017. Oyu Tolgoi's copper production totalled 157,400 tonnes and gold production - 114000 ounces in 2017, meeting the company’s guidance. It was highlighted that Oyu Tolgoi achieved an All Injury Frequency Rate of 0.27 per 200 thousand hours worked for the whole year. The company's revenue resulted USD 939.8 million in 2017, reflecting lower sales volumes partially offset by higher copper prices compared with USD 1,203.3 million in 2016. For 2017, the company recorded income of USD 110.9 million and net income attributable to owners of Turquoise Hill Resources (TRQ) of USD 181.2 million or USD 0.09 per share. TRQ generated cash flow from operating activities before interest and tax of USD 325.8 million in 2017, with net cash generated from operating activities of USD 118.0 million. Oyu Tolgoi’s cost of sales was USD 2.32 per pound of copper sold, cash cost per unit of extracting and processing the metal products were USD 1.92 per pound of copper produced and all-in sustaining costs were USD 2.39 per pound of copper produced. Operating cash costs of USD 711.6 million in 2017 beat the Company’s guidance.

It was highlighted that underground lateral development made good progress during 2017, completing 6.1 equivalent kilometres for the year which was in-line with the 2016 Technical Report expectations of the company. During 2017, total underground expansion spending totalled USD 835.7 million, meeting guidance and resulting in total underground project spending since January 1, 2016 of approximately USD 1.1 billion. In the document of financial results, it was noted that Oyu Tolgoi expects to produce 125,000 to 155,000 tonnes of copper and 240,000 to 280,000 ounces of gold in concentrates in 2018. On March 15, 2018, Oyu Tolgoi filed a notice of dispute with the Government of Mongolia for the January 2018 tax assessment.

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Mongolia to recover dinosaur fossils from South Korea, France www.xinhuanet.com

ULAN BATOR, March 19 (Xinhua) -- Mongolia is working to recover dinosaur fossils which were illegally trafficked into South Korea and France, the Department for Economic Crime of the Mongolian General Police Department said Monday.

The competent authorities concerned found out that the dinosaur fossils were smuggled from Mongolia into South Korea and France, the department said in a statement.

A South Korean court has officially ordered returning of the dinosaur fossils, and the French side said the fossils will be returned to its native Mongolia if the country submits a petition for the recovering of the fossils.

The fossils originated from Mongolia's southern Umnugobi Province, which is known for its large numbers of dinosaur findings, according to the Mongolian Paleontological Institute.

Under Mongolian law, significant fossil discoveries cannot be permanently exported or sold to non-Mongolians, even if privately owned.

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Electric vehicles, higher prices to boost global copper output — report www.mining.com

Global copper production will spike over the next decade as rising prices and increasing demand from the electric vehicles sector encourage project development, a new reports shows.

According to analysts at BMI Research, output for the red metal worldwide will grow an average annual rate of 3.6% over 2018 – 2027 thanks to a number of major projects come online, particularly in Peru and Australia.

As a result, the experts anticipate global copper output to climb from 20.4 million tonnes this year to 28 million tonnes by 2027.

Global copper output is expected to climb from 20.4 million tonnes this year to 28 million tonnes by 2027.
Production in Chile, the world’s top miner of the industrial metal, will return to growth in 2018, following a 4% contraction in 2017 due to strikes and operational disruptions, BMI expects.

The consultancy forecast Chile’s output will increase from 5.4 million tonnes in 2018 to 6.6 million tonnes by 2027, averaging 2.3% annual growth as state-owned miner Codelco moves forward with key developments.

In January, the firm was granted environmental approval for the expansion project at El Teniente, which contributes the most copper to Codelco's production profile. The miner also submitted an environmental impact assessment for a $250 million- expansion at its Andina division.

In addition, mining giant BHP has begun working on a $2.5 billion expansion at its Spence mine, which extend the lifespan of the operation and increase production capacity.

Peru’s copper sector growth will be supported by a strong project pipeline and competitive operating costs, BMI says.

The analysts expect the country's copper output to increase from 2.5 Mt in 2018 to 3.7 Mt by 2027, averaging 4.4% annual growth.

In 2017, MMG Ltd's Las Bambas mine produced 454 kt of copper in its first full year of production, however the firm expects production in 2018 to be between 410 – 430 kt due to lower ore grades as the mine is developed.

The report also highlights projects to come into production in China, the Democratic Republic of Congo and the US, all of which will add to global annual copper production numbers.

BMI’s predictions are supported by a series of other recent studies that highlight the needs of the booming electric vehicles (EVs) sector.

An EV needs about four times more copper than a traditional ICE (internal combustion engine) vehicle, and as much as five times if the charging infrastructure is included.

Following those reports, just by shifting 10m unit sales per year of traditional cars into EVs by 2030 would create an additional copper demand of 100,000 tonnes per year. A more aggressive scenario of 25m EV sales per year sees that figure jump to over 300,000 tonnes.

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Construction Minister discusses China-backed projects www.montsame.mn

Ulaanbaatar /MONTSAME/ Minister of Construction and Urban Development Kh.Badelkhan met Chinese Ambassador Xing Haiming on March 19 to discuss the projects to be implemented in construction and urban development sector on Chinese loan and aid.

The Government of the People’s Republic of China will grant USD 1 billion soft loan to Mongolia, USD 300 million of which will be spent on the construction of a new wastewater treatment plant in Ulaanbaatar.

In connection with the upcoming visit of Prime Minister U.Khurelsukh to China on April 9-12, the sides exchanged views on the possibility of commencement of the project within the second half of this year and project finance.

Moreover, the Mongolian Government decided to allocate Chinese non-refundable aids on the establishment of Service centers in ger areas in an effort to reduce the air and soil pollution in the capital city. The project is co-implemented by the Ministry of Construction and Urban Development and the Mayor’s Office.

The Government also plans to realize a 1,008 Temporary Apartment project with a USD 350 million non-refundable aid from the Chinese Government. The sides have fully ensured readiness for the project, and the matter will be addressed during the prime ministerial visit.
Kh.Aminaa

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Can Mongolia be a new ‘paradise’ for crypto miners? www.chinaeconomicreview.com

“There is a huge potential for Mongolia to seize an opportunity to host big players in the cryptocurrency industry and become a crucial service provider,” said Tsolmon Bayaraa, CEO of Sourceland LLC.

The company initiated a project called GOBI—standing for Global Operation for the Bit Industry—to build enormous cryptocurrency mining facilities, crypto exchanges and data centers in southern Mongolia to host thousands of miners and entrepreneurs in blockchain technology from all around the world.

The company signed a contract with BW, one of Chinese largest crypto mining companies. Songxiu Hua, CEO of BW, confirmed that the company had made a deal worth $500 million and launched a pilot project in Mongolia to deliver 300,000 crypto mining machines in the first phase.

Mongolia is looking to take advantage of the uncertainty gripping the cryptocurrency industry in China. Until last year, China was by far the world’s largest market for both crypto mining and trading, but in September the Chinese government turned decisively against the industry, banning initial coin offerings (ICOs) and digital currency exchanges. Crypto miners are also being encouraged by local governments to leave China, according to recently leaked government document posted on Twitter by Chinese blockchain industry executive Elly Zhang.

Many of China’s crypto miners are therefore looking to move their operations elsewhere, and many are turning their heads toward Mongolia. Not only does China’s northern neighbor offer cheap energy costs, its sheer proximity to the Middle Kingdom minimizes a key cost for crypto firms in relocating: time spent offline. Furthermore, Chinese miners will want to take advantage of Mongolia’s cheap labor force, high-speed internet, and relatively unrestricted regulatory environment.

It’s all about energy

Nearly 60% of the world’s mining pools are currently based in China. These mining facilities, although found all over China, are mostly concentrated in the northern provinces, where miners often enjoy electricity subsidies due to the many local hydropower plants, and where the cold climate helps reduce costs associated with cooling servers—a significant drain on many mining businesses. However, crypto miners now consume such a huge amount of energy in these regions that the Chinese government has started to pay close attention.

Some entrepreneurs in Mongolia are already cashing in on the growing exodus from south of the border. Gobilink.com, a company that provides hosting services to miners in Mongolia, claims to have received dozens of offers in recent months. “Every week, we are approached by different Chinese miners wishing to move thousands of machines to our facilities,” said CEO Rene Villeneuve. “The biggest challenge is the amount of electricity needed, but we can handle most of what we’re seeing and we’re receiving great local support.”

Currently, the cost of electricity in Mongolia is 5 cents per kWh, which is almost three times cheaper than that in China. Despite this, the country’s current estimated energy capacity is only 1100 MW, as mentioned in the Mongolia’s Energy Sector Report, which will not be enough to feed the large-scale mega projects such as GOBI.

Project developer Tsolmon Bayaraa agreed that “it might be harder at the beginning to attract FDI into the energy sector, in particular to build power plants; but I believe in the long-run all parties would benefit from this win-win cooperation.”

Whilst it may be true that Mongolia at present barely meets its domestic energy demand, having to import electricity from both Russia and China, the country’s rich endowment of untapped natural resources still leaves considerable spare capacity in this area.
Erdenetsogt Energy, a company named after its huge coal deposit in Mongolia’s Dornogovi Province, has also secured permission from the government to build further coal-fired power plants. This will give the company the “possibility for us to provide cheaper electricity as low as 3 cents per kWh,” according to Managing Director Enkhtaivan Chimed.

Uchral Nyam-Osor, a member of the Parliament of Mongolia, says that hosting crypto miners and founding farms in the southern Gobi region would be the solution for a country like Mongolia to reduce its overexposure to mineral resources, on which hinges almost 23% of GDP. The country has been suffering through an economic crisis which brought it to the brink of default in 2016 after a brief stint as one of the world leaders in economic growth in 2012.

“Our focus has always been to find ways of diversifying the economy. If China bans crypto mining operations, Mongolia should embrace it,” he said.

“I assume that what those [crypto] miners want from the government is not regulation, but support for energy supply. Needless to say, that there is a demand for power plants. It would help increasing employment and income levels,” he added.

“One may say that the situation of Mongolia’s light regulation is a disadvantage. Not at all,” said Boldbaatar Bat-Amgalan, former head of Communications Regulatory Commission of Mongolia.

This could well be Mongolia’s stepping stone onto the world’s financial stage

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