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ADB Asian Development Bank : Mongolian Growth Exceeds Expectations Due to Strong Economic Performance www.4-traders.com
ULAANBAATAR, MONGOLIA (26 September 2017) - Mongolia's strong economic performance in the first half of 2017 will likely continue for the rest of the year, as coal exports and business confidence continue to strengthen. Continued commitment to macroeconomic stability, coupled with a favorable external environment, should mean that Mongolia's recovery continues, according to a new Asian Development Bank (ADB) report.
In an update of its flagship economic publication, Asian Development Outlook (ADO) 2017, ADB forecasts continued growth for Mongolia's economy at 4% and 3% in 2017 and 2018, respectively, compared to the 2.5% and 2% previously projected.
'Mongolia's growth has been stronger than expected in 2017,' said Yolanda Fernandez Lommen, ADB Country Director in Mongolia. 'Continued government commitment will be key to ensuring that planned investment into large ongoing mining projects-critical for future growth prospects-moves ahead. While it is important to create a sound investment environment in Mongolia's mineral wealth, more will be needed to ensure that mining-led growth is sustainable and inclusive, and the conditions are created to support economic diversification and higher productivity growth.'
Mongolia's economy grew by 5.3% in the first half of 2017, recovering strongly from the 1.2% growth rate recorded in 2016. The main drivers of growth over the forecast period are the strong export performance of coal, which is expected to continue in the short-term, and the approval of the International Monetary Fund's reform package in May, which has helped restore business confidence.
Fiscal deficit for the first half of the year fell by 34.1%, to the equivalent of 5.8% of gross domestic product (GDP), on the back of a 41.1% increase in revenues while expenditures increased by 9.6%. As coal exports surged in the first half, trade surplus widened by 69.5% year-on-year, and the current account deficit narrowed by 42.8%, to 5.6% of GDP. Gross reserves at the end of June remained unchanged from the end of 2016 at $1.3 billion, enough to cover 2.6 months of imports. Reflecting these developments, the togrog appreciated 5.6% against the US dollar as of June.
Inflation averaged 3% in the first half of the year as the togrog depreciation from 2016 began to affect prices through higher import prices. The inflation forecast is revised down as a higher excise tax on fuel did not push up fuel prices as expected. With strong imports set to continue in the second half of 2017, the current account deficit is now seen widening this year and the next.
Downside risks to growth are vulnerability to commodity price downswings and prevailing drought that may affect crop and livestock production. Upside risks include stronger growth in the People's Republic of China, shocks affecting its domestic coal supply, and rising copper prices.
ADB and the Government of Mongolia agreed on a new 4-year Country Partnership Strategy in May this year, which will help the country sustain inclusive growth in a period of economic difficulty. ADB will provide Mongolia up to $1.2 billion in financing until 2020. Focus will be on three pillars: economic and social stability, infrastructure for economic diversification, and strengthening environmental sustainability. The strategy also includes the cross-cutting themes of public sector management and gender equality.
ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, ADB is celebrating 50 years of development partnership in the region. It is owned by 67 members-48 from the region. In 2016, ADB assistance totaled $31.7 billion, including $14 billion in cofinancing....
Thousands of miles away from the Western world and in the heart of the Asian continent, lies the vast country of Mongolia, one of the 20 largest countries in the world yet one of the least densely populated.
Long isolated from the world Mongolia eventually experienced the winds of change that had brought down the Iron Curtain. With the adoption of a new political system came the introduction of an economic model that allows the country to address the challenges it faces.
One of the biggest challenges is in the area of energy. Mongolia, famed for its raw beauty and wilderness, for grand sand dunes and vast steppes, also has an extreme climate, with winter temperatures of -40C and summers that often exceed 45C. The era of Soviet economy has left the country with a legacy of severe pollution and dependence on coal-fired power stations.
But there is huge potential and the EBRD is playing a major role in developing and maturing it. By developing wind power Mongolia can take advantage of the winds that sweep across the country’s seemingly endless deserts. It is a wind of change of a different kind.
This journey towards renewables started in 2009 with the first commercial windfarm project. With a capacity of 50 MW, the Salkhit wind farm near the capital, Ulaanbaatar, was constructed with financing of US$ 47.5 million from the EBRD, an amount matched by FMO, the Dutch development bank.
The challenges the project faced were enormous: working out how to build and operate a wind farm in -35C, transporting the wind turbines over 200 km of unpaved road, and creating the commercial and legal conditions for an unprecedented venture in the country.
When the plant at Salkhit – which means “windy mountain” in Mongolian – was connected to the grid in 2013, Nandita Parshad, currently EBRD Managing Director, Energy and Natural Resources, said: “Salkhit’s impact goes far beyond its immediate effects. It makes concrete a vision of Mongolia’s future that takes the benefits of the country’s resources and uses them to create a sustainable and diversified economy.”
And Salkhit was just the beginning. With that one successful project the country realised the potential of renewables and changed its approach to energy sources. Today, under the new energy efficiency strategy, Mongolia is seeking to raise the installed capacity of its renewable energy sources by up to 20 per cent by 2020 and 30 per cent by 2030.
The EBRD remains closely involved as the Bank also demonstrated this week with the visit of its First Vice President Phil Bennett to Mongolia. The Bank signed an agreement to finance the 50 MW Tsetsii wind farm in the south of the country last year. Tsetsii aims to be operational by the end of 2017. A third project, the Sainshand wind farm, with a 55W capacity and located south-east of Ulaanbaatar, was approved by the EBRD Board in June 2017.
As a result, wind currently accounts for 10 per cent of the country’s total installed power generation capacity. This is good for the economy and good for the environment. With the help of the EBRD the winds of change have also provided Mongolia with a breath of fresh air....
On September 26, 2017, 198,303 shares of 30 firms listed as Tier I, II, and III were traded. 13 firms’ shares increased, 7 decreased in price and 10 remained unchanged. Technicimport JSC was the top performer, increasing 14.96 percent, whereas Autoimpex JSC was the worst performer, decreasing 6.34 percent.
On the primary market for government bonds, 250,000 bonds were issued for MNT 23.9 billion.
On the secondary market for corporate bonds, 951 bonds worth MNT 6,600,000 were traded.
The MSE ALL Index rose 0.42 percent to stand at 1068.98. The MSE market cap stands at MNT 2,094,869,771,139 .
Russia could soon ban Facebook as the company continues to defy a law, which obliges social networks operating in the country to keep user data in Russia.
"We are well aware that Facebook has a significant number of users on the territory of the Russian Federation. On the other hand, we understand that this is not a unique service, there are other social networks," said the head of Russia's internet watchdog Roscomnadzor Aleksandr Zharov in an interview with the Interfax news agency.
According to Zharov, Facebook's position is that it "continues to consider" options for complying with the Russian law, which obliges internet companies to store personal data of Russian users on servers inside Russia.
"There have been no official letters from them," Zharov said, adding that Facebook can repeat the fate of LinkedIn, which was blocked in November last year.
"In any case, we will either ensure that the law is implemented, or the company will stop working in the territory of the Russian Federation, as, unfortunately, happened with LinkedIn. There are no exceptions," Zharov said.
Many companies including Viber, eBay, and others complied and moved or started moving servers containing personal data to Russia. LinkedIn refused to comply with the law and was banned in November last year.
Zharov said Facebook will be checked to see if it is complying with the law in 2018.
Other companies are cooperating with the Russian government, according to Zharov, pointing out Twitter, which plans to transfer personal data by mid-2018.
"We will give Twitter some slack because the company wrote us an official letter. Twitter won't be checked now, but immediately after the set date," he said.
ULAANBAATAR (Reuters) - The ruling Mongolian People’s Party (MPP) has nominated former vice premier Ukhnaa Khurelsukh as the country’s new prime minister, a party spokesman said Tuesday, as it bids to unlock an IMF bailout package and restore investor confidence.
Members of the ruling party deliberated until the early hours of the morning to decide their nomination to replace prime minister Jargaltulga Erdenebat, who was ousted earlier this month amid accusations of corruption and incompetence in his administration.
The International Monetary Fund said earlier this month that it would wait for a new prime minister to reaffirm Mongolia’s commitments to reform before it would begin disbursing funds from a $5.5 billion economic bailout package.
Khurelsukh’s appointment is expected to be a formality, with the MPP controlling 65 of the total 76 seats.
If his appointment is confirmed, Khurelsukh will become Mongolia’s 30th prime minister since the former Soviet satellite transitioned to parliamentary democracy in 1990.
Government instability has been the norm in Mongolia, with no prime minister able to complete a four-year term since 2004.
Khurelsukh, who is not a member of parliament, was deputy prime minister until his resignation last August to distance himself from allegations of corruption in the party as well as the failed presidential run by parliamentary speaker and MPP candidate Mieygombo Enkhbold.
Enkhbold’s loss in the presidential vote was seen as a rejection of austerity policies drawn up to secure the IMF bailout, which Mongolia needed to cope with mounting debt pressures and a collapse in the tugrik currency last year.
“Khurelsukh represents the beginning of healthy reform, the rebranding of the ruling party, and distancing itself from corruption,” said Dale Choi, analyst and head of the Ulaanbaatar-based Altan Bumba Financial Group.
In Mongolia’s parliamentary democracy, the prime minister is the head the government, while the president has limited powers including the ability to veto legislation and to propose his own laws to parliament.
Khurelsukh has spent the majority of his career in politics. He holds the title of colonel, although he served in the Mongolia Armed Forces for only a year from 1989 to 1990.
Reporting by Terrence Edwards; Editing by David Stanway and Simon Cameron-Moore
GENEVA (25 September 2017) – The United Nations torture prevention experts has urged Mongolia to establish a National Torture Prevention body as soon as possible, to protect people deprived of their liberty against torture and cruel, inhuman or degrading treatment.
The call came at the end of the first visit to Mongolia by the Subcommittee on Prevention of Torture (SPT), which took place from 11-20 September 2017.
The SPT stressed the importance of establishing a fully independent national monitoring body, as required under international law, to regularly visit all places of detention and to help guard against the risk of ill-treatment.
“It is vital that all detainees are treated in accordance with the law and that their rights are fully recognized and are effective in practice. The establishment of such a body will greatly assist in this important and pressing task,” said Sir Malcolm Evans, who headed the delegation.
During its stay in Mongolia, the delegation met with government officials, representatives of United Nations and civil society, and held discussions with the National Human Rights Commission of Mongolia.
The SPT also visited police, penitentiary, health, rehabilitation as well as psychiatric and military detention facilities where they conducted confidential interviews with staff members and detainees.
“We were pleased to see that the conditions in many penal institutions have been improving, both as a result of extensive renovation programmes and legal changes, which have reduced numbers of people in detention as well as the maximum periods of detention. We hope this positive trend continues. The SPT will be making a number of important recommendations on these and other matters, and we will be following future developments closely and with interest,” added Sir Malcolm.
Following the visit, the SPT will submit a confidential report to the Government of Mongolia containing observations and recommendations to further the prevention of torture and ill-treatment of persons deprived of their liberty.
The SPT delegation comprised: Sir Malcolm Evans (Head of Delegation), Satyabhooshun Gupt Domah, Marija Definis-Gojanovic, Kosta Mitrovic, Margarete Osterfeld, and Victor Zaharia.
China is expected to slash in half the rate of steel production in Tangshan, a city in the north-east that produces 11 per cent of the country’s total output. The reduction is aimed at diminishing winter pollution from plants that process coking coal, a crucial ingredient in the steelmaking process.
At the same time, the Chinese government said that producers would also be mandated to reduce overall coking coal production by 30 per cent. The directive comes in a moment when coking coal prices showed a downward trend of more than 5 per cent.
Similarly, prices for low-grade iron ore, another key component for steel, have plunged more than 18 per cent in the past month.
The Tangshan cut will affect 20m metric tonnes of steel or 7.5 per cent of national annual production. Other key steel-producing cities such as Shijiazhuang, Anyang and Handan are expected to announce similar cuts.
These reductions are part of a series of suspensions in China’s Rust Belt that will take effect within the next few months as environmental authorities strive to meet their promise to lower the concentration of particulate matter by 22 per cent this winter.
According to the Financial Times, China’s Ministry of Environmental Protection has also scheduled a round of plant inspections in Beijing, Tianjin and 26 other cities to enforce more stringent emissions guidelines.
Ulaanbaatar /MONTSAME/ Acting Deputy Prime Minister U.Khurelsukh has been elected the candidate for the post of prime minister.
The Mongolian People’s Party (MPP) Conference held its meeting on September 25 during which a secret poll was conducted to elect a prime ministerial candidate. The nominees proposed by the party’s Administrative Council to the Conference were Acting Deputy Prime Minister U.Khurelsukh, Parliament members N.Enkhbold and U.Enkhtuvshin.
Acting Deputy Prime Minister U.Khurelsukh won 188 votes or 63.9 percent support, whereas U.Enkhtuvshin got 101 votes or 34.4 percent, and N.Enkhbold--five votes or 1.7 percent support in the poll run among 294 members of the MPP Conference present at the meeting. As such, Khurelsukh Ukhnaa was elected the ruling party’s candidate for prime minister, and the issue will be discussed by Parliament.
The Bank of Mongolia traded 654.2 billion MNT worth 1-week maturity central bank bill (“CBB”), with weighted average yield of 12.0 percent per annum.
1 - week CBBs
1-week CBB plays an important role in managing the reserves of banks and is the core monetary policy instrument of the Bank of Mongolia. The interest rate on CBB will be the policy rate of the BOM and will serve as a guide interest rate on the interbank market. It was first introduced in July 2007, with fixed rate and unlimited bidding, and traded on a regular basis every Wednesday at the interbank market. This had attracted the banks’ interests providing the possibility for the banks to place their excess reserve in short term asset. Since the introduction of this instrument, there has been a substantial change in the way banks manage their reserves. For the favorable adjustment of CBB rate and loan principle along with the well balance of togrog and foreign exchange, 1 - week CBB auction has been held in the form of competitive interest rate since May 2010. In doing so, the upper and lower limits of the bank bids are to set +/- 2 per cent of the policy rate.
Xanadu Mines (ASX:XAM) has confirmed that three of its 19 copper-gold and gold targets are new large-scale porphyry prospects within its flagship Kharmagtai project in Mongolia.
Exploration drilling that is currently still in progress has revealed that at least one shallow drill hole in each of the three targets has returned broad zones of porphyry alteration and mineralisation.
Initial drill results indicate a six kilometre long strike potential for mineralisation.
Dr Andrew Stewart, managing director, commented: “The results of this systematic drill program are proving to be very exciting with three new high-priority targets returning broad zones of porphyry copper and gold mineralisation under shallow cover.
“We plan to test all 19 high-potential copper-gold and gold targets generated during a recently completed bedrock drilling program.”
The three new porphyry targets
The Kharmagtai copper-gold deposits are concentrated along a series of small intrusions coming off the top of the main intrusion on the top of a much larger body at depth.
Shallow drilling in the second half of 2016 generated 19 high-potential copper-gold and gold targets, which are currently being tested by the drilling program underway.
The newly identified porphyry targets are Target 3, Target 4 and Target 6.
Target 3 is a 650x550 metre porphyry target where two shallow drill holes have been drilled with one hole returning 44 metres at 0.19% copper and 0.27g/t gold from 25 metres.
Target 4 is a 800x750 metre circular porphyry target where several broad intercepts have been recorded including three over 80 metres including 91 metres at 0.22% copper and 0.26 g/t gold from 30 metres.
Target 6 is a 1000x400 metre porphyry target where a single drill hole has returned 96 metres at 0.35 g/t gold and 0.10% copper from 95 metres.
Finding the high-grade source
Work is underway at these porphyry targets to vector towards the higher grade core of the system.
Drilling continues and the remaining targets will be tested over the coming months before all targets are assessed to focus the drill rigs on the highest grade and largest systems.
To date, less than half of the system’s footprint and only six of the 19 targets have been tested.
Following on from earlier success
The identification of the porphyry targets follows on from recent high-grade copper-gold intercepts at the Stockwork Hill deposit within the Kharmagtai Project.
- 264 metres at 0.56% copper and 1.46 g/t gold (1.49% copper equivalent) from surface;
- 234 metres at 0.57% copper and 1.04 g/t gold (1.23% copper equivalent) from 466 metres, which defined a new zone of high-grade stockwork mineralisation; and
- 212 metres at 0.36% copper and 0.38 g/t gold (0.61% copper equivalent) from 333 metres, which intersected a broad zone of breccia mineralisation.