1 US-MONGOLIA 'THIRD NEIGHBOR TRADE ACT' ON THE WAY WWW.THEDIPLOMAT.COM PUBLISHED:2018/11/17      2 CHINA'S FIGHT AGAINST SMOG MAKES PALLADIUM 2018'S BEST METAL WWW.MINING.COM PUBLISHED:2018/11/17      3 MILLENNIUM CHALLENGE CORPORATION PRESENTS GMS LICENSES WWW.MONTSAME.MN PUBLISHED:2018/11/17      4 MONGOLIA CALLS FOR GLOBAL ATTENTION ON CLIMATE CHANGE WWW.NEWS.MN PUBLISHED:2018/11/17      5 ADB OPENS A NEW WASTEWATER TREATMENT PLANT IN ARVAIKHEER, MONGOLIA WWW.AGENPARL.EU PUBLISHED:2018/11/17      6 CHINA TO BOOST COOPERATION WITH INDIA, MONGOLIA: DEFENSE MINISTER WWW.GLOBALTIMES.CN PUBLISHED:2018/11/17      7 DEATH ON MONGOLIA’S ‘COAL ROAD’ WWW.NEWS.MN PUBLISHED:2018/11/17      8 MONGOLIA SHAKEN BY WIDENING LOAN SCANDAL WWW.ASIA.NIKKEI.COM PUBLISHED:2018/11/17      9 MONGOLIA’S UNEMPLOYMENT FALLS BY 2.2 PERCENT WWW.NEWS.MN PUBLISHED:2018/11/16      10 MEETING MEAT DEMAND: MONGOLIA TO TRADE 17.9 PERCENT OF LIVESTOCK WWW.NEWS.MN PUBLISHED:2018/11/16      БНСУ-ЫН АЖ АХУЙН НЭГЖҮҮДИЙН АУТСОРСИНГ ЗАХИАЛГЫГ ГҮЙЦЭТГЭХ ЗАЛУУЧУУДЫГ СОНГОН, ШАЛГАРУУЛНА WWW.UNUUDUR.MN НИЙТЭЛСЭН:2018/11/17     НҮҮРСНИЙ ЭКСПОРТ 10 ХУВИАР ӨСӨЖ, 31.3 САЯ ТОНН БОЛОВ WWW.GOGO.MN НИЙТЭЛСЭН:2018/11/17     СУДАЛГААГААР ЖДҮ ЭРХЛЭГЧИД ЗЭЭЛИЙН ХҮҮНИЙ ЗАРДАЛ ХАМГИЙН ИХ ХҮНДРЭЛ УЧРУУЛДАГ ГЭЖ ХАРИУЛЖЭЭ WWW.BLOOMBERGTV.MN НИЙТЭЛСЭН:2018/11/17     ERDENE RESOURCE DEVELOPMENT: ХАЙГУУЛЫН ЗАРДАЛ III УЛИРАЛД 42 ХУВИАР БУУРСАН WWW.BLOOMBERGTV.MN НИЙТЭЛСЭН:2018/11/17     ГОРХИ, ТЭРЭЛЖИЙН БАЙГАЛИЙН БОХИРДОЛД АНХААРАЛ ХАНДУУЛЖ ЭХЛЭВ WWW.MONTSAME.MN НИЙТЭЛСЭН:2018/11/17     ИРЭХ БААСАН ГАРАГТ ХОТЫН ДАРГЫГ ОГЦРУУЛАХ ЭСЭХИЙГ ХЭЛЭЛЦЭНЭ WWW.MONTSAME.MN НИЙТЭЛСЭН:2018/11/17     “АМГАЛАН” ХОТХОНД БАЙРЛАХ ГЭРТЭЭ КАННАБИС ТАРЬЖ, УРГУУЛЖ БАЙСАН ТУРК ИРГЭНИЙГ БАРИВЧИЛЖЭЭ WWW.MEDEE.MN НИЙТЭЛСЭН:2018/11/17     ӨНӨӨДӨР АВТОМАШИНЫ ДУГААРЫН ХЯЗГААРЛАЛТ ҮЙЛЧЛЭХГҮЙ WWW.EAGLE.MN НИЙТЭЛСЭН:2018/11/17     ГАШУУНСУХАЙТЫН НҮҮРСТЭЙ МАШИНЫ ЦУВАА 120 КМ БОЛЖЭЭ WWW.EAGLE.MN НИЙТЭЛСЭН:2018/11/16     ТАТВАРЫН ОРЛОГО 32.2 ХУВИАР ӨСӨЖ, ТӨСВИЙН ТЭНЦЭЛ 341.9 ТЭРБУМ ТӨГРӨГИЙН АШИГТАЙ ГАРЛАА WWW.BLOOMBERGTV.MN НИЙТЭЛСЭН:2018/11/16    

Events

Name organizer Where
Frontier's "Invest Mongolia Tokyo 2018" Frontier Securities Tokyo Japan
"Open to Export" ICC WTO International business award ICC WTO London

NEWS

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Centerra Gold halts mill operations in British Columbia due to lack of water www.mining.com

Canada's Centerra Gold (TSX:CG) issued a media statement where it explains that it had to suspend mill processing operations at its Mount Milligan copper-gold project in central British Columbia due to insufficient water resources. The stoppage is expected to last until the end of January 2018.

In reaction to the news, the miner's shares dropped by more than 10% to $6.5 in mid-morning trading.

Drier than normal conditions from March to August together with a limited amount of spring snowmelt resulted in lower than expected reclaim water volumes at the mine’s tailings storage facility. According to Centerra, the water shortage has been exacerbated by unanticipated extremely cold temperatures during the winter, which has resulted in a greater than expected loss of water volumes in the tailings pond due to ice formation.

Even though Mount Milligan’s staff recently drilled additional wells to draw water from nearby aquifers located within the property, the additional water obtained was not sufficient to offset the loss of water volumes due to difficult winter conditions.

“In addition, as a further, longer-term mitigation measure, the Company is pursuing an amendment to Mount Milligan’s Environmental Assessment (EA) to allow pumping of water from a nearby lake (Phillips Lake) and is applying for the additional related permits. It is expected that by the end of January 2018 there will be adequate fresh water available to restart mill processing operations utilizing just one of the ball mills (38,000 tpd to minimize water requirements). The Company expects that additional fresh water will become available after the spring melt, typically in April, at which time it expects to re-start the second ball mill returning mill processing operations to full capacity,” the press release reads.

The Toronto-based firm said that despite this situation, the mine itself, which has produced approximately 225,000 ounces of payable gold and approximately 54 million pounds of payable copper this year, will continue to expose, mine and stockpile additional ores for future processing.

Resource estimates at Mount Milligan are of 5.8 million ounces of gold and 2.1 billion pounds of copper in proven and probable reserves.

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Herders to receive benefit amounted to MNT 22.4 billion www.montsame.mn

Ulaanbaatar /MONTSAME/ As of December, 2017, herders sold a total of 20111 kg wool to domestic manufactures and 86465 herders are eligible to receive incentive amounted to MNT 22.4 billion. 

Members of herder cooperatives and citizens with livestock receive monetary incentives for wool of sheep and camel, if they supply the raw materials to national factories, according to a Parliamentary resolution of 2011 and Government resolution of 2015.

Regarding this year, herders can get fodder instead of monetary incentives through the Livestock Conservation Fund, addressing to Veterinary and Animal Breeding Departments of aimags, capital city and soums.

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December 27, 2017 trading report www.mse.mn

On December 27, 2017, 1,018,081 shares of 28 firms listed as Tier I, II, and III were traded. 5 companies’ shares increased in price while those of 21 companies decreased and 2 companies unchanged. Nogoon Khogjil Undesnii Negdel /JLT +14.98%/ and Jinst Uvs /JIV +14.97%/ were the top performers whereas Uvs Chatsargana JSC /CHR/ was the worst performer, decreasing 13.49 percent.

On the secondary market for block trading for shares, 219,330 bonds were traded for the value of MNT410.1 million.

The MSE ALL Index decreased by 1.09 percent to reach 1,106.70 points. The MSE market cap stands at MNT2,359,141,729,240.

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Mongolia’s Modernizing Military www.thediplomat.com

Mongolia’s land-based military has faced many modernizing challenges and opportunities throughout history. The ancient Mongol army, like other great armies, whether the Greeks, Romans, or Ottomans, had its strengths and weaknesses, its historical glories and bruises. When discussing the modernization of Mongolia’s military today, a number of historical aspects remain crucial in shaping military principles, core values, and social influences. These historical aspects link to the fundamental changes, progress, and sometimes regressions of Mongolian military affairs and military diplomacy.

At its peak, the empire of the Mongols stretched from eastern Europe to eastern Siberia and the Korean Peninsula, connecting and bridging cultures, societies, and ideologies. When the Mongol army conquered new areas, it provided the empire with a modernizing opportunity: to gain access to new goods and services, exotic cultures and societies, and, most importantly, access to new military equipment, tactics, and strategies. The Mongols used traditional nomadic weaponry for centuries. The mastering of horsemanship, archery, and the introduction of steel and hooked lances were all part of the modernization of the ancient Mongol military.

Meanwhile, the Mongol conquests of Marv, Balkh, Bukhara, Samarkand, Kashgar, Turpan, Khotan, and many more capitals during the 13th century increased ethnic and cultural diversity under the Mongol empire. This historical interconnectedness paved the way for modern Mongolia to pursue political, economic, and military diplomacy with countries around the world.

In addition to Mongolia’s traditional military principles, Mongolia’s relationship with neighbor Russia became the main source of learning, technology, weapons, and strategies. From Russia, Mongolia learned both the positive and negative aspects of a top-down military structure and military institutionalization. Russia-Mongolia military ties grew strong during Mongolia’s struggle against the Qing dominance in 1911, but improved significantly during World War II. During the war, the Japanese invasion of Inner Mongolia and Manchuria allowed Stalinist Russia and Mongolia to strengthen their military ties while combating Japanese expansion in East Asia. It was the Mongolian army that supplied the Russians with horses, wool, and furs during its winter wars. Accordingly, on the 72nd anniversary of “Victory Day” on May 7, 2017, the Russian government built a large bronze war horse monument commemorating the Mongolian war horses. Mongolia’s involvement in World War II modernized its military capabilities, despite its Soviet satellite state status.

When looking at the modernization of Mongolia’s military and its social impacts, we must analyze both its foreign and domestic contributions. At home, the Mongolian military has a great responsibility to build infrastructure, schools, and hospitals. In a way, the military bridges the gap between government and civilians by constructing the necessary pieces of a modern society.

The National Center for Emergency and Disaster Relief is an important part of the military. According to the government’s official portal, through the NCEDR the military serves as first-responders for earthquakes, wildfires, and forest fires; contagious diseases; and snow and dust storms as well as severe winters (known as zud). The National Center for Emergency and Disaster Relief’s programs have produced humanitarian medics and construction engineers who build schools, hospitals, and emergency centers, especially in rural areas like Gobi-Altai, Bayan-Ulgii, and Orkhon provinces.

Despite these duties at home, Mongolia’s military is also active abroad. Mongolia’s foreign policy objectives coupled with military diplomacy have played a fundamental role in augmenting military relations with a number of countries. Mongolia’s involvement in international missions and peacekeeping operations reflect Mongolia’s historical and contemporary principles and core values. Supporting, advocating, and actively contributing to world peace is also part of the military modernization process.

According to Colonel T. Narankhuu, Mongolia’s defense and military attache to the Embassy of Mongolia in Washington D.C, “As of now, Mongolia has military diplomacy [relationship] with the U.S., Japan, Germany, and 30 other countries and has a close military-technology accord with Russia, China, Turkey, Ukraine, and Belarus.”

Since 2001, the Mongolian military has been involved in the American-led coalition’s counterterrorism efforts in Iraq and Afghanistan. According to First Lt. Mark Larson, writing from the 10th Division in Kabul, “The Mongolians, for certain, provide the most extraordinary example of international support. That Mongolia — a landlocked country of just three million people, nearly half of whom still lead a nomadic life — provides any aid at all to the international force is remarkable.” In 2006, Mongolia became the first country to host a multinational military training in the Northeast Asia region, the U.S.-supported “Command Post Exercise and Field Training Exercise with Global Peace Operations Initiative (GOI).”

Mongolia also helps protect women and children from armed militias through UN Peacekeeping Operations in the Middle East and North Africa (MENA). According to the 2016 Ranking of Military and Police Contribution to UN Operations report, Mongolia ranks 30th out of 123 countries with 950 peacekeepers operating in MENA countries.

Mongolian peacekeepers in MENA countries have been recognized by the international community; more than 850 Mongolian peacekeepers, stationed in South Sudan, were awarded the UN Medal in May 2017. Earlier, in March 2017, Srg. T.Buyanzul and O. Tsend-Ayush, from the Mongolian Battalion, saved a 2-year-old Sudanese boy from a war zone. Following this case, in July 2017, 22 armed men made an attempt to break into the refugee camps and were caught by Mongolian peacekeepers. These cases illustrate both the modernization of Mongolia’s military as a whole and its contribution to the global peace.

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Mongolian Embassy’s delegation visits Hoa Binh province www.baohoabinh.com.vn

(HBO) – A delegation from the Mongolian Embassy in Vietnam and the Vietnam-Mongolia Friendship Parliamentarians’ Group led by Ambassador Dash Bilegdorj paid a working visit to Hoa Binh province on December 15. The delegation had a working session with Tran Dang Ninh, Permanent Vice Secretary of the provincial Party Committee and Chairman of the provincial People’s Council; and Bui Van Khanh, Vice Chairman of the provincial People’s Committee.

As part of the trip, the delegation visited two enterprises at Luong Son Industrial Park (IP), namely Esquel Garment Manufacturing Vietnam-Hoa Binh Limited Company and HNT Electronics Company which produces spare parts for mobile phone producer Samsung. Since its establishment 10 years ago, the Luong Son IP has attracted 29 projects, including 14 foreign-invested ones. The 230ha IP has created jobs for workers from Luong Son town, Hoa Binh city and Hanoi’s Chuong My district.

At the working session, Ninh expressed his delight at welcoming the delegation from the Mongolian Embassy in Vietnam and the Vietnam-Mongolia Friendship Parliamentarians’ Group. He informed them of the province’s features as well as its potential and advantages in geographical position, natural conditions and socio-economic development in recent years.

In the investment promotion aspect, Hoa Binh now has eight IPs. Luong Son district alone has three IPs. Hoa Binh has been part of the Hoa Binh-Hanoi development economic region with the focus placed on technology.

Ninh showed his hope that the two sides will work together to foster the bilateral relation and create favourable conditions for businesses of Mongolia and Vietnam, including those from Hoa Binh to meet and strengthen cooperation for mutual development.

Dash Bilegdorj affirmed that Mongolia and Vietnam have maintained a good relationship. He expressed his wish that more economic deals will be signed between Mongolia and Hoa Binh in the time ahead.

On the same day, the delegation offered incense at President Ho Chi Minh statue and visited an orange planting model at Thuy Nga orchard in Cao Phong town (Cao Phong district) and Hoa Binh Hydropower Plant.

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Increases in personal income taxes reveal underlying systematic issues with fair taxation in Mongolia www.theubpost.mn

Beginning on January 1, 2018 Mongolia will introduce a new tax bracket system for the personal income tax. The new tax bracket system intends to replace an old system which imposed 10 percent to all citizens regardless of their income. Most would agree that tax reform in Mongolia has been long overdue but Cabinet’s proposed amendment has been met with fierce opposition. Many unions, including the Oyu Tolgoi mine workers’ union and other businesses have publically opposed the decision and have staged protests.

The Ministry of Finance has justified the move, clarifying that the increases in the personal income tax would only affect eight percent of the population. Of Mongolia’s 900,000 registered taxpayers that pay a personal income tax, 92 percent will be unaffected by the increases and will pay the 10 percent they are accustomed to. Tax breaks for the lowest earners will increase also as part of the new tax bracket system. These are all within the terms that were agreed upon with the International Monetary Fund when Mongolia requested to be enrolled into an extended fund facility.

Delving deeper beyond the surface into the tax increases shows us that the measure is not baseless and is in line with IMF’s core values of mitigating the impact of some reform measures on the most vulnerable in society. Tax breaks for the lowest earners will be increased on a step-by-step basis. In 2018, the lowest tax bracket will enjoy a 120,000 MNT tax break. The tax discount will be gradually increased each year, ultimately reaching 240,000 MNT in 2021.

Collecting taxes, especially the personal income tax, based on income brackets is not a new idea and is employed by countless countries around the world. Some might ask then if only eight percent of workers will be affected and if a similar system is employed around the world, why are people still opposed to the increase?

Logically, people who will be most affected by the tax increases will be the most opposed. It is quite rare for any government anywhere to increase taxes and for it to be unopposed.

The Mongolian Association of Woman Business Owners has publically criticized the decision as an impediment to the people’s opportunity for growth and prosperity in addition to being detached from reality.

For some, their opposition stems from the fact that their albeit high-income is the only source of income for a family. For miners, the long working hours and time spent away from the families justifies their relatively high-income salaries and they have been the most vocal opponents of the tax bracket system.

In 2017, revenue from the personal income tax is estimated to be 43 billion MNT. With the introduction of tax bracket system, revenue will jump to 88 billion MNT in 2018 and 84 billion MNT in 2019. Accordingly, the new tax bracket will only supplement an additional 40 billion MNT to the state budget, hardly enough to put a dent in the 737 billion MNT state budget deficit.

However, the issue is not only just that certain high-income individuals will pay higher taxes.

Increasingly, discussion around the issue has transformed into a debate about equal and fair taxation. In theory, a tax bracket system is a fair system of taxation but only if it is imposed fairly and evenly amongst the population. One large segment of Mongolia’s population has been consistently and systematically omitted and unofficially exempt from taxes and more specifically the personal income tax. Taxation of informal sectors has been a common issue for many developing countries and Mongolia is no exception.

There is a bigger systematic reason for the blatant tax exemption that herders enjoy. While the number of herders has been decreasing consistently as rural to urban migration increases, they still remain a major voter base. While the interests of herders might not be at the forefront in Ulaanbaatar, Mongolia still has 20 other provinces. In the majority of those provinces, livestock production is the main source of income and therefore voters tend to vote for politicians that promise to not impose taxes on herders.

The ruling Mongolian People’s Party won a 65 majority seat in Parliament mainly thanks to its platform that it would not create any additional taxes, it was obvious that appeasing to herders was a major reason for its landslide victory.

Herders, along with traders in the city’s markets account for a large unregulated untaxed sector in the economy. In theory, traders and herders alike should all have to pay taxes. Herders and their children all enjoy public services such as education, health insurance, and welfare that is funded by taxpayers without contributing their share.

Deliberately exempting herders from taxes for political gain has created a bad precedent and ultimately concentrated the majority of the tax burden on the 900,000 workers paying a personal income tax.

Admittedly, herding is a tough business in which the herder is solely responsible for any liabilities. It is a sector which can be devastated by weather or natural disease. However, since the transition into a market economy, Mongolia has seen development of whole economic sectors dependent on livestock products from herding as herders are not only subsisting on livestock but profiting.

While this may not be true for all herders, many wealthy herders benefit from not having to pay taxes. In many ways, Mongolia’s reluctance to impose taxes on herders can be likened to the United States’ reluctance to tax churches and religious organizations. A sense of traditional values and morals have become an impediment to fair taxation. In a world where herders are tugrug billionaires and churches are multi-billion dollar businesses, it is irrational to exempt a huge segment of the economy.

Many politicians have tried to skew the argument into something cultural, arguing that imposing taxes on herders would threaten the Mongolian way of living. However, as argued by economics professor G.Khashchuluun at the National University of Mongolia, at the very least, we need to tax herders that have thousands of livestock.

Another argument is that the Constitution states that pasture in Mongolia belongs to the state, classifying it as a natural resource as same as coal or petroleum. Therefore, mining companies and herders both use resources owned by the government for profit but only the mining companies pay taxes.

However, taxing herders is not the be-all and end-all solution to Mongolia’s taxation system. As a whole, the system in which taxes are determined and collected need to be more comprehensive.

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Tesla to make pickup truck after Model Y crossover www.reuters.com

(Reuters) - Tesla Inc will build a pickup truck soon after producing electric crossover vehicle Model Y, Chief Executive Elon Musk said on Tuesday.

"I promise that we will make a pickup truck right after Model Y. Have had the core design/engineering elements in my mind for almost 5 years. Am dying to build it," Musk wrote in a Twitter post. bit.ly/2l1A1JJ

The Model Y, to be built on the same platform as the Model 3 sedan, was tentatively scheduled to begin production in mid-2019, Reuters reported in June.

The electric vehicle maker first announced plans for a pickup truck last July, alongside a “master plan” to develop a commercial truck, a public transport bus and a compact sport utility vehicle.

Musk had said in April that the pickup truck would be unveiled within 18 to 24 months.

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Mongolian Consulate Opens in Busan www.hapskorea.com

Busan City announced that a Mongolian consulate has opened in Busan for active exchanges between Busan and Mongolia.

It is located on the 10th floor of the Sambi Building, 627 Jungang-daero, Busanjin-gu and is open from Monday through Friday, 10 am to 4 pm.

The consulate issues Mongolian visas and promotes cooperation with Busan. It has jurisdiction over Busan, Ulsan, Daegu, Gyeongsangnam-do, Gyeongsangbuk-do, and Jeollanam-do.

Busan City anticipates increased cooperation with Mongolia in various areas, including logistics, medical care and tourism. Direct flights to Ulaanbaatar will begin this June, increasing the number of Mongolian visitors to Busan and vice versa.

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Turkey, Azerbaijan, Kyrgyzstan, Mongolia to form joint military www.irannewsdaily.com

The al-Kawthr network reported that Turkey, Azerbaijan, Kyrgyzstan and Mongolia will have joint military forces under the title of ‘the Joint Army of the Turkic World, the Eurasian Military Force.’

Turkey, Azerbaijan, Kyrgyzstan and Mongolia will have joint military forces.

The army will be set up under the title “The Joint Army of the Turkic World, the Eurasian Military Force,” according to the al-Kawthr network.

In 2013, the Turkic world developed a plan for a joint military force. Based on that, the Eurasian Military Force, the same as the United Nations Peace Force, will protect security in the region.

In the first stage, “military forces with the position of the Eurasian Security Forces” will be established with the participation of Turkey, Azerbaijan, Kyrgyzstan and Mongolia. The Turkish Gendarmerie Command will play an active role in this force.

Because Mongolia had called off a part of its military forces, which was intended to join the “military forces with the status of Eurasian security forces,” the plan was postponed for a while. But now again, the formation of the “”The Joint Army of the Turkic World” has been revived.

The force will begin its activities in 2018. The mission of this force is to maintain peace and security in the region, to exchange information, military and security experience between the united Turkic forces. The gendarmerie of each member state will allocate power based on the quota assigned to “military forces with the position of the Eurasian security forces”. The Turkish gendarmerie and security forces will train the forces of other countries. The security of the embassies will be preserved by the gendarmerie.

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Mongolia borrows $1 billion from India to set up oil refinery www.newsbharati.com

Ulaanbaatar, December 26: To decrease the dependency on China, Mongolia had approached India for funding it for establishing an oil refinery that could boost the nation’s gross domestic product by 10%. In response Mongolians got a smile on face as India has decided to give $1 billion as a loan to Mongolia.

The Mogolian government intends to use $700 million of the loan for an oil refinery and $264 million for oil pipelines, according to a statement on its website last week. Mongolian PM Erdenebat Jargaltulga has instructed relevant ministries to negotiate with the Export-Import Bank of India, according to the statement.
Mongolia is looking to India and other investment partners as its economy contracts and its debt burden grows. Last month, China backed off from talks with Ulaanbaatar over a loan package to help the economy after a dispute over the visit to Mongolia by the Dalai Lama.
The refinery will have a capacity to process 1.5 million metric tonnes of oil per year. It will produce 560,000 tonnes of gasoline, 670,000 tonnes of diesel fuel and 107,000 tonnes of liquefied gas annually. The refinery could boost Mongolia’s GDP by 10%, according to the statement.
The 20-year loan will have an interest rate of 1.75% and principle payments will be waived during the five years.

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