|Frontier's "Invest Mongolia Tokyo 2018"||Frontier Securities||Tokyo Japan|
|"Open to Export" ICC WTO International business award||ICC WTO||London|
The public and private sector convened on March 28 at the “Uniting Power” pre-session for the Mongolian Economic Forum.
State officials presented speeches on the government’s actions, policies, strategies and future targets at the forum, promoting stronger public-private partnership.
One of the highlights of the forum was Head of the Cabinet Secretariat G.Zandanshatar’s presentation on Mongolia’s Three-Pillared Development Strategy, enacted in 2015 with the intention to develop the nation through 27 criteria of nine chapters and three fundamental goals to be achieved by 2050.
The strategy is aimed to establish a just, disciplined, responsible and stable government system, enhance economic competitiveness through a general national development policy, and improve public livelihood. For sustainable economic development, projects will be targeted at food exportation, agriculture, tourism, industry and infrastructure. For governance reform, the government plans to revise the Constitution and reform the legal governance and public services. For public livelihood improvement, a package law to support wealth creators, Development Program for Mongolians, and Policy to Reduce Unemployment and Poverty will be executed.
The government has decided to launch Smog-Free Ulaanbaatar 2020, Shine Khuduu (New Countryside) and Tavan Tolgoi projects along with projects for Industrial and Technical Park for Agriculture, Oil Refinery, Central Wastewater Treatment Plant, Recycling Factory, and New Ulaanbaatar International Airport. Although the government is set on financing these projects through the state budget, private investments, foreign loans, and grants, it has not provided an estimate for their total cost or budget.
Participants were intrigued to find out that the Three-Pillared Development Strategy is expected to open 263,000 new jobs, especially since Mongolia’s unemployment rate fluctuates between 100,000 and 150,000 people.
“One in every three people in Mongolia live in poverty. The biggest cause of poverty is unemployment. Creating new jobs will reduce unemployment,” stated S.Mungunchimeg, the deputy minister of labor and social protection.
Another keynote speech was focused on the package tax law reform. Minister of Finance Ch.Khurelbaatar relayed that through the reform, the government hopes to relieve financial burden on entities, raise tax collection base, and mold a legal environment with longer reporting time.
He reported that enterprises, public and private organizations and individuals proposed 1,082 amendments to laws related to tax and that 19 percent of proposals are ready for submission to Parliament. The government rejected 26 percent of all submitted proposals because they requested either excessive discount or exemption.
“A sustainable economy is starting with the tax law package reform,” Ch.Khurelbaatar claimed. He believes that revising tax laws will lessen burden on small and medium-sized enterprises.
According to the Ministry of Finance, 398,000 out of over 100,000 registered companies account for 85 percent of the total tax revenue of Mongolia. Minister Ch.Khurelbaatar reassured that tax revenue will not diminish if the tax rate is lowered.
During the discussion, President of the Mongolian National Chamber of Commerce and Industry B.Lkhagvajav explained, “Lowering tax rate will uncover the underground economy and increase tax revenue.”
Ch.Khurelbaatar declared that the package tax law reform will be approved before the end of July and related procedures and regulations will be passed in November after public discussion sessions. If these laws are enacted, they will take effect starting next year.
The main event of the Mongolian Business Forum will kick off on May 21 and 22 in Ulaanbaatar....
The Ulaanbaatar mayor’s council went over road construction projects, strategies for tackling traffic, and development projects for the education sector planned for this year last week.
City to focus on reducing traffic
Deputy Mayor in charge of Infrastructure and Ger Area Development P.Bayarkhuu introduced that the construction of an overpass at the intersection of the Traffic Police Department will be completed in 1.6 years, starting next month. To reduce traffic expected during the construction work, eight sub-roads will be newly built or expanded with 1.3 billion MNT. For example, 393 million MNT is required to build a 0.4-kilometer road connecting Mahatma Gandhi Street to Sun Road, 198.2 million MNT to build 0.3-kilometer road connecting Niislel Khuree Avenue to the National Academy of Governance, and 31.6 million MNT to build permanent traffic barriers along the 0.3-kilometer road between Khunnu Street, Saruul Town and Soyolj. Other plans include the construction of a 0.14-kilometer bridge between Road Workers’ Street and 13th microdistrict.
Traffic is one of the most pressing challenges in Ulaanbaatar. Around 80 percent of all vehicles in Mongolia are driven in the capital, with some 40,000 imported each year. However, research shows that not a single car has been sent to the wreckage yard in recent years, reported Ulaanbaatar Mayor S.Batbold.
“Two large overpass projects will be launched in Ulaanbaatar, meaning that traffic will increase tremendously. We will pay special attention to this matter. We hope that the public will understand this and be patient as road constructions commence. With public support, spring development projects will be completed within a short period of time at highest efficiency and quality,” he said.
Some traffic restrictions will be placed from April 15 to October 1 to prevent traffic, according to P.Byarkhuu. Officials are debating two traffic restriction proposals. The first is to launch a driving restriction based on the last digit of license plates only in Baga Toiruu. In specific, vehicles with license plates ending with an odd number can drive along this road on Mondays and Wednesdays, while those ending with an even number drive on Tuesdays and Thursdays. On Fridays, large markets such as Narantuul and Bumbugur will be closed. Officials believe this will enable smoother passage on other roads.
The second option is to allow cars with license plate ending with an odd number to drive from Sapporo intersection to Officers’ Palace on Mondays and Wednesdays, whereas those ending with an even number on Tuesdays and Thursdays and all cars on Fridays. Offiicials decided to conduct a public pollto determine which option to take.
Schedule for infrastructure projects released
City officials outlined a general schedule for infrastructure projects at the meeting. It includes 241 projects for 10 directions, according to B.Oyuntuya, the head of the Engineering Infrastructure Planning Division of the General Ulaanbaatar Urban Development Office.
“Investment for infrastructure projects to be carried out is expected to increase this year. Project targeted at developing ger areas will intensify in summer with loans from international financial organizations. They will be implemented according to a general schedule. Associated organizations must follow the new schedule, avoid causing hindrance to local residents, and deliver precautionary announcements and notices on time,” stated Ulaanbaatar Mayor S.Batbold.
He reminded that hot water outages must not prolong for a month like in previous years and should last a week at most. “We’re striving to do repair and maintenance work for pipes without cutting off hot water if possible,” the mayor said.
18 new schools to be built
This year, the city administration plans to build 18 new schools and expand 27 schools, according to Deputy Mayor Sh.Ankhmaa.
The construction of nine new schools and expansion of 25 schools will be executed with state funds. Seven new schools will be built with a grant from the Chinese government and the rest of the projects with a grant from the Japanese government. Construction work has been scheduled for 56 kindergartens — 42 kindergartens will be newly constructed and 10 kindergartens expanded with state funds, two kindergartens with a discounted loan from the Asian Development Bank, and another two kindergartens with a discounted loan from UNICEF.
Moreover, the government has projected financing for three elementary school and kindergarten complexes and five sport halls in the state budget.
Sh.Ankhmaa reported that Beijing Construction Engineering Group has started assembling framework for five of the seven schools to be built with the Chinese grant.
“Our plan is to reduce general education school shifts to two and increase availability of kindergartens to up to 85 percent by 2020. Many educational projects have been planned for 2018. Right now, land issues for 17 schools and kindergartens need to be resolved. These matters will soon be introduced to the government,” said Mayor S.Batbold....
Ulaanbaatar /MONTSAME/ A resolution of the 7th meeting of the Mongolia-Kazakhstan Intergovernmental Commission has reflected the issue of establishing gold refining plant in Mongolia.
Minister of Mining and Heavy Industry D.Sumiyabazar who is attending the Intergovernmental commission meeting reported about it. "Kazakhstan’s example on gold refining plant and other related information will be presented to the Cabinet meeting and decisions on investment, funding and location of the gold refining plant will be resolved. Moreover the Bank of Mongolia will resolve issues related to getting rights to sell the refined gold on global market. The two parties of the commission agreed that corresponding entities of Kazakhstan get permissions in August, 2018 and to run operations according to international standards, " said Minister D.Sumiyabazar . He also noted that Kazakhstan has introduced high technology of gold refining and reserves all its gold in the central bank and Mongolia shoud introduce this practice.
Minister D.Sumiyabazar met Vice Minister of Investment and Development of Kazakhstan Arystan Kabikenov on March 30. At the meeting they established a memorandum of cooperation in fields of geology, mining and civil aviation. In the frame of the memorandum, the sides will collaborate in exchanging information, good practices and technology in mining sector and in training specialists.
Erdenes Tavan Tolgoi JSC (ETT), which plans to export 10 million tons of coal in 2018, has failed to reach a deal with Chalco. As of March, the company is selling coal at USD 68.1 per ton at the mine, informed Ariunbold Dorj, CEO of ETT. Presently, Mongolyn Alt LLC, SouthGobi Sands and Usukh Zoos are mining in Nariinsukhait residual deposits.
This year, Mongolyn Alt LLC has exported 1.5 million tons of coal. Vice President of the Company Tsogt Galsan notified that the company is selling coal at CNY 500, or USD79.4, at the mine. Around one third of coal in Nariinsukhait consists of coking coal, while the remaining are considered thermal coal.
As for SouthGobi Sands LLC, the average price of coal was CNY 280 or USD 44.5 per ton. The company plans to export 5.5 million tons of coal this year, as well as producing 800 thousand tons of processed coal. The company estimates the processing coal price to reach CNY 500-600.
Aspire Mining LLC, who purchased the special permission to mine in Nuurstei Coking Coal deposit, informed that it expects coking coal price to remain stable throughout the year.
Ulaanbaatar /MONTSAME/ The Independent Authority Against Corruption (IAAC) has arrested three suspects in the course of its investigation of the Oyu Tolgoi Investment Agreement.
Namely, former Minister of Finance S.Bayartsogt, former Director of the Mongolian Tax Administration B.Ariunsan and former CEO of Erdenes Tavan Tolgoi LLC B.Byambasaikhan have been suspected of breaking the law during the establishment of the 2009 Investment Agreement and the 2015 Agreement signed in Dubai.
The individuals are currently being held at the 461st detention center of the General Executive Agency of Court Decision, the IAAC said.
The IAAC is expected to provide an update on the issue soon.
Moscow and Riyadh, backed by OPEC, are negotiating a deal that would allow them long-term control of oil prices. If successful, Russia and Saudi Arabia would manage oil markets for the next two decades.
At the moment, Russia and OPEC are signing agreements on oil production cuts on a yearly basis. However, the next deal could be much longer.
“We are looking for a very long-term cooperation between OPEC and non-OPEC producing countries,” OPEC Secretary General Mohammad Barkindo said on Wednesday.
Saudi Crown Prince Mohammed bin Salman announced the plan in an interview with Reuters on Monday. “We are working to shift from a year-to-year agreement to a 10-20 year agreement,” he told the news agency. “We have agreement on the big picture, but not yet on the detail.”
If such a deal is signed, it would be unprecedented. Russia and Saudi Arabia have worked together in previous oil crises, but such long agreements have never been reached.
“I think it’s certainly something that OPEC would like very much… And I think the agreement that they struck – that is with OPEC and non-OPEC members – actually took them quite a large step towards that,” Colin Smith, oil analyst at Panmure Gordon, told CNBC.
“I think getting to a fully-fledged agreement in which Russia becomes a de facto member is a bit of a push at the moment,” he added.
In December 2016, OPEC, Russia, and other major producers agreed to curb production by 1.8 million barrels per day (bpd) for six months. The agreement has been extended twice. In this period, oil prices have grown from $54 to above $70 per barrel and analysts have reported the supply overhang has almost been eliminated.
Bitcoin fell below $7,000 on Friday, moving closer to the lows the world's number one virtual currency reached in February.
The value of all cryptocurrencies has now dipped to $250 billion – having lost an astonishing $580 billion in value from record highs late last year. This is fueling fears among some investors that the crypto-bubble is about to burst.
The price of bitcoin dropped to $6,753 at 5:00am GMT on Friday, losing nearly two-thirds of its value since peaking above $19,000 in December. Sell volumes have reportedly increased across all the major cryptocurrency exchanges, with the entire market likely affected by a sharp increase in trading volumes in bitcoin futures at the Chicago Board Options Exchange (Cboe) and CME Group.
As more and more spooked investors are pressing the panic button, bitcoin charts show the cryptocurrency is on its way toward the so-called death cross – a point in a stock’s lifetime where the 50-day moving average (MA) crosses below the 200-day MA. This means that the price has fallen in 50 days as much as it would usually fall during the last 200 days.
The cryptocurrency market has followed bitcoin's plunge, wiping out most of the gains seen at the end of 2017 and the beginning of 2018. The crypto market cap has dropped to $250 billion, compared to $829 billion in early January, right before the price crash.
“This run-up was fueled by speculation rather than technological advances and so many people entered the space drawn by the price headlines only,” said Edward Cooper, head of mobile at digital banking firm Revolut, as quoted by Inverse Innovation. “We are now seeing a return to more normal trading where the price consolidates and any increases are driven by technological advances and increased adoption rather than the news cycle.”
The nation's efforts to reduce overcapacity in the steel industry will benefit global mining giant Rio Tinto Group Plc and others, rather than hurt their business interests, according to its CEO Jean-Sebastien Jacques.
The industry is undergoing restructuring in the country but the reduction in capacity does not mean a reduction in production, he said.
High quality raw materials are still necessary as the move entails a shift to high quality steel and shutting down of the smaller and more polluting blast furnaces while switching to the newest, largest blast furnaces, he added.
China has been witnessing massive overcapacity in its iron and steel sector and has vowed to reduce capacity. It plans to eliminate 100 million tons to 150 million tons of crude steel capacity in the five years from 2016. In 2017 alone, the country slashed its crude steel production capacity by more than 50 million tons, exceeding its annual target, as part of efforts to improve the competitiveness of the bloated sector.
The country also phased out the production of 140 million tons of low-quality steel made from scrap metal last year.
The industry's profitability has substantially improved, with major steel producers' profits surging 613.6 percent, according to data from the China Iron and Steel Association.
According to Jacques, Rio Tinto is well-positioned to provide the right product with the right quality to the right customers.
On the other hand, eyeing the rapid development of electric vehicles and batteries, Rio Tinto said the company would focus more on metals like copper and aluminum.
Jean-Sebastien Jacques, CEO of Rio Tinto Group Plc
"As China shifts from fast speed development to high quality development, industries like electric cars will also drive up demand for copper and aluminum, and we believe such commodity demand will rise in the future as new energy vehicles will be prevalent on China's streets in seven to 10 years. As a multinational corporation, we aim to provide high quality products to meet the demand," he said.
Jacques, head of the world's second-biggest mining company, said China has been the company's biggest customer and Rio Tinto generates more than 44 percent of its global revenue from the country, supplying lots of products including copper and iron ore for steel, and bauxite for aluminum and diamonds.
Jacques said the mining group welcomes the Belt and Road Initiative, which would lead to infrastructure improvements and drive up demand including copper and aluminum, while providing a boost for companies in related sectors.
"Infrastructure is fundamental to global growth," he said adding that, "It underpins communities and builds nations. China has shown the world what can be achieved."
The Ministry of Education, Culture, Science and Sports (MECSS) is currently engaged in modernising the school system across Mongolia. Over the next two years a total of 142 kindergartens and 97 schools are expected to built in the country.
As a part of this project, construction of seven schools and one kindergarten began today (29 March) with non-refundable assistance from the Chinese Government.
Beijing Construction Engineering Group Co.,Ltd, has been selected as the project contractor. The company plans to complete construction of seven schools within a year.The project will be implemented in three stages, with funding worth approximately CNY150 million for 1st and 2nd stages.
This will be the first school using the Cambridge international educational standards in the Songinokhairkan district of Ulaanbaatar.
Mongolia will build an electric power plant at the Baganuur coal mine under the concessional agreement, Mongolian media report.
The 700MW power plant will make a significant contribution to reducing air pollution and dependence on energy imports, said Vice President of Financial Management/CFO of Erdenes Mongol G.Ganbold.
Ganbold told about the activities of subsidiaries of Erdenes Mongol LLC speaking at the sub-session of Mongolia Economic Forum 2018 themed ‘Development of Mining and Heavy Industry and Infrastructure.’