On May 25, the Minister of Foreign Affairs of Mongolia, B. Battsetseg, held a meeting with Her Highness Princess Haifa bint Muhammad Al-Saud, the Deputy Minister of Tourism of the Kingdom of Saudi Arabia.

During the meeting, Minister B. Battsetseg expressed the intention to support the development of the tourism industry between Mongolia and the Kingdom of Saudi Arabia, following the declaration of "Years to Visit Mongolia" by the Mongolian Government for the period 2023-2025.

The parties agreed to establish joint communication and promotional efforts between enterprises in the tourism industry of both countries.

Additionally, Minister B. Battsetseg proposed the establishment of direct flights to enhance tourism activities between the two countries, as well as air transport connections between Mongolia and the Kingdom of Saudi Arabia.

Moreover, discussions were held on activating trade and economic investment activities between the two nations, specifically focusing on the supply of halal meat and meat products from Mongolia to the Kingdom of Saudi Arabia.

Her Highness Princess Haifa bint Muhammad Al-Saud, the Deputy Minister of Tourism, expressed her commitment to improving and expanding activities related to tourism and cultural development with Mongolia.

Furthermore, members of the Saudi Arabian Motorsport Association expressed their interest in visiting Mongolia during the upcoming summer.

Global thermal coal prices are stabilising this year in a range near $200 a tonne that is less than half of 2022’s record highs, analysts and industry officials say, with rising supplies providing respite to consumers roiled by last year’s volatility.

Analysts expect the benchmark Newcastle coal index to average $175-$212 a tonne this year, a steep premium to the $86 average for the ten years preceding Russia’s 2022 invasion of Ukraine, but down more than 50% from September’s highs at $440.

Last year, punitive Western sanctions on Russia pushed European buyers to pay top dollar for fuel to fire power plants, pushing up global prices. Russia was Europe’s biggest supplier of coal and natural gas before the war.

Coal prices in the tighter range expected this year, though, will help utilities and other users better plan fuel purchases, easing pressure on economies battling high inflation. Fuel prices typically account for more than half the total cost of generating electricity.

Alexandre Claude, chief executive of London-based analytics firm DBX Commodities, said he expects lower volatility in 2023 compared with 2022 because trade flows had stabilized after the “energy shock” that followed the invasion of Ukraine.

Argus Consulting expects global coal exports to rise 4.4% this year, with imports set to increase 5%. China is seen ramping up imports by 11%, with Australian exports rising 9.4% after declining for three straight years.

July Ndlovu, chairman of the World Coal Association (WCA) and chief executive of South Africa’s Thungela Resources, said Europe’s “disproportionate” role in deciding coal prices was over.

“Going forward … what happens with China and India is what would drive the fundamentals for energy, because that’s where growth and energy demand is,” Ndlovu told Reuters.

Australia’s Westpac said this month it expects the Newcastle benchmark to average $193 per tonne over the nine months ending December 2023, while Citi said in April it expected the index to average $175 over 9-12 months. Australia’s chief economist expects Newcastle benchmark prices to average $212 this year.

As of Monday, Newcastle coal was just over $159 a tonne on a free-on-board basis, at the low end of a $159-$179 range it has held during the current quarter and a long way from the $180-$403 band of the first quarter.

“We expect coal prices including the Newcastle benchmark to remain supported mostly due to higher cash (production) costs for the coal miners,” said DBX’s Claude, explaining why prices likely aren’t headed back to pre-invasion, pre-pandemic levels.

Demand and supply

Top exporters Indonesia and Australia are expected to ramp up shipments to meet higher demand from India and parts of Southeast Asia, making up for small declines in supply from elsewhere including Russia, according to estimates by Australia’s chief economist and Argus.

The Australian chief economist’s office expects supplies from Australia to jump 7.8% and Indonesian exports to rise 2.4%, while imports by Asia rise 2.3% to 852 million tonnes and shipments to Europe fall more than 15%.

Global coal demand and supply Global coal demand and supply

Exports from Russia are expected to be lower, Argus and Australia’s estimates show, with the narrowing spread between Russia’s discounted coal and other benchmarks reducing the competitiveness of Russian coal.

Steep discounts to benchmark prices helped Russia lure Asian buyers after the Western sanctions prevented sales to Europe, but that advantage is disappearing.

The forecast for an El Nino weather pattern, typically associated with drier conditions, could also reduce rain-related disruptions to supply and support higher coal output from key regions and ease prices back from the highs of the past year.

A plunge in natural gas prices is expected to aid Europe’s shift away from coal this year as well and that will have a similar effect.

Any indication of a slower-than-expected economic recovery in China, however, could have a larger impact on prices despite this year’s growth in imports and rising domestic coal output.

“Price stability will probably be driven by how the Chinese central government decides in terms of their energy policies,” said WCA chairman Ndlovu.

(By Sudarshan Varadhan and Carman Chew; Editing by Tom Hogue)

Mongolia is keen to tap India as a probable partner for supply of coking coal and has reportedly approached the Steel Ministry to explore probable tie-ups, those familiar with the developments told businessline.

Coking coal is a key steel-making raw material and India — the world’s second largest crude steel producer — is amongst the largest importer of the feedstock. Most of the imports are met from Australia, followed by the US, Indonesia and Mozambique.

However, in view of increasing volatility of coking coal prices in recent times, India’s steel mills have been keen to tap into alternate markets like Russia. US and Indonesian shipments nearly doubled in FY23. In FY23, coking coal imports were 54.3 million tonnes (mt).

“Mongolia is keen to supply coking coal to Indian mills and has approached the Ministry with proposals. In fact, some company level discussions were also held. But the decision has to be taken by steel makers,” the official aware of the discussions said.

It is being said, Mongolia is building a washing station for coking coal — with a 2024 deadline — and it could help export coking coal here. Joint venture tie-ups could also be explored.

Major concerns

According to officials in the Ministry, one of the major concerns raised by Indian mills is the “land-locked nature of Mongolia” and the possibility of transporting coal “over long distances” leading to an increase in costs. Then there are other concerns on whether the quality of Mongolian coking coal will suit or blend with that of the blast furnaces of Indian mills.

Reportedly, Mongolia has rail connectivity to Russia and China and the ports of these countries. The push is towards leveraging these lines for exporting coal. Three major rail projects have been commissioned in 2022 and four new railroad checkpoints will be opened, primarily with a focus on mineral transportation.

Mongolian coal on exchanges

Mongolia, incidentally, is exporting its coal at prices set via auctions on the Mongolian Stock Exchange (MSE), beginning February, and has reportedly stopped signing direct sales contracts with overseas buyers.

The government there approved a regulation requiring parties involved in coal exports to make their trades through open electronic trading via the MSE.

Under the previous trading mechanism, buyers only paid mine-mouth prices to miners and sorted out the logistics by themselves. The new so-called “border prices” will factor in the transportation fees and aim to simplify the coal export process, it is being said.

Mongolia will host the 17th Conference of the Parties (COP17) of the United Nations Convention to Combat Desertification (UNCCD) in 2026, the country’s Ministry of Environment and Tourism on Monday announced on Monday.

The Convention entered into force in 1996, becoming the first, and so far only legally binding international framework to address desertification, a priority in the fight against climate change.

The Conference of the Parties (COP) is the UNCCD’s supreme decision-making body; in addition to overseeing the implementation of the Convention, it is also a platform for information exchange and sharing.

Hosting COP17 will provide Mongolia with an opportunity to raise awareness in the international community about the relationship between desertification and the supply of raw materials necessary for the energy transition.

Desertification is already one of Mongolia’s biggest challenges. Since 2021 it has also been one of the priorities of the Mongolian government under Prime Minister Luvsannamsrain Oyun-Erdene.

According to the Atlas of Desertification published by the National Agency of Meteorology and Environment, more than 76 per cent of the country’s territory has been affected by desertification.

The level of land degradation varies according to the area, but the Atlas shows that more than 20 per cent of the territory is either strongly or very strongly affected by the problem.

This degradation threatens about 90 per cent of Mongolia’s agricultural land, dedicate to farming and pastoral activities, which are important economically and culturally.

Many factors are behind this development, such as the natural expansion of the Gobi Desert, as well as human activities like farming and mining.

The latter is particularly relevant today since the country is rich in coal, copper, gold, as well as rare minerals, which are key to the energy transition.

Mining continues to be Mongolia's main industry, representing about 22 per cent of its GDP in 2021 and more than 80 per cent of exports, this according World Bank data.

In 2020, the government announced Vision 2050, a long-term development plan centred on economic diversification; however, the growing demand for copper and rare minerals is set to slow it down.

Prime Minister Oyun-Erdene wants Mongolia to play a key role in providing the raw materials needed for the energy transition.

Tourism, which accounted for more than 7 per cent of the country's GDP in 2019, was hard hit by the COVID-19 pandemic, not to mention the war in Ukraine which led to sanctions on Russian flight routes.

The mining sector’s growing importance combined with desertification will require considerable efforts to mitigate land degradation.

One of the measures adopted by the government is a massive forestation project to plant “One Billion Trees” in non-forested areas for at least 50 years. As part of this, Prime Minister Oyun-Erdene announced plans to plant more than 40 million trees this year.

Yet, without a commitment to greater sustainability in the mining sector, the fight against desertification is unlikely to be effective.

More than 290,000 livestock have been killed in the Mongolian provinces of Sukhbaatar and Khentii due to the recent dust and snow storms, local media reported on Thursday.

The overall number of fatalities is however, expected to increase since many livestock still remain still unaccounted for, Xinhua news agency quoted authorities as saying.

Heavy blizzards and intense dust storms swept through Sukhbaatar and Khentii provinces late last week, causing severe damage.

A total of 127 people, primarily nomadic herders, went missing in the provinces due to the storms.

Among them, 125 were found alive, while two were killed.

Mongolia has a harsh continental climate as strong winds, dust and snow storms are common.

Within the framework of the "Years to Visit Mongolia," Minister of Environment and Tourism B. Bat-Erdene received Ambassador Extraordinary and Plenipotentiary of the Russian Federation to Mongolia Yevsikov A.N. and exchanged views on increasing the number of direct flights between Mongolia and Russia.

At the meeting, cooperation possibilities to intensify the work of attracting tourists from the central part of Russia, besides the border regions were underlined.

In addition, the parties agreed to continue cooperation in implementing the "Billion Trees" national movement initiated by the President of Mongolia and to work actively on expanding cooperation in the areas of biodiversity protection and combating desertification.

Mongolian film director Zoljargal Purevdash’s “If Only I Could Hibernate” made history this week at the Cannes Film Festival by becoming the first Mongolian film shown in the Cannes’ official selection. It became one of several dozen chosen out of around 2,000 films submitted to the festival and will now be eligible for several award competitions. The film entered into the “Un Certain Regard” section of the festival, which features original and diverse stories from around the world.

“If Only I Could Hibernate” tells the story of a 15-year-old Mongolian boy Ulzii, who lives in the ger (yurt) district in Mongolia’s capital Ulaanbaatar. Ulzii excels in physics, and his teacher encourages him to enter a national physics competition so he can win a scholarship to attend one of the best schools in the country. The family struggles financially after his father passes away and his alcohol-addicted mother cannot find a job.

Ulzii’s academic plans change when his mother moves to the countryside in search of work and leaves him and his two younger siblings to fend for themselves. His hopes of a better future are undermined by the risky logging job he takes to provide his family with food and fuel to survive the harsh winter. The film’s name comes from a quote by his siblings, who say they wish they could hibernate through the winter like bears and not worry about keeping themselves warm.

The film reflects Purevdash’s personal experiences. Her mom operated a shop in the ger district. She recounts seeing “many different kinds of people [living in the ger district] — some were nomads, some living in difficult situations, some parents buying alcohol for themselves, but no food for their kids, just a few cheap candies.” When discussing her motivation for the film, she adds, “I always wanted to create something for those innocent little children, to tell them a story that would make them happy, or to give them hope.”

Besides giving hope and inspiring the underprivileged youth, the film tackles one of Ulaanbaatar’s biggest issues — air pollution. Since the ger districts are not connected to the city’s heating system, its residents resort to burning coal to keep themselves warm during long and harsh winters, when the temperature can drop to -30 degrees Celsius. About 60 percent of Ulaanbaatar’s 1.5 million population lives in ger districts, and they are often blamed for the city's significant air pollution. Purevdash’s goal is to build connection and understanding among different groups and show that nobody in the ger district is burning coal to intentionally harm others. “I wanted my fellow citizens to understand, feel and embrace the struggles and the joys of one another,” she explains.

The film’s success is poised to kickstart a new era in Mongolia's filmmaking industry. And the government is ready to contribute. In 2022, it established the Mongolian National Film Council and Mongolian Film Fund, which allow filmmakers to receive up to 45 percent of the filming costs for projects produced in Mongolia with minimum spending of USD 500,000. “If Only I Could Hibernate” was Purevdash’s first film. With the new support system being erected around the local film industry, she plans to make more films in the future. With an impressive first-time debut like this, everyone will be watching for her next film.

The gross domestic product (GDP) of Mongolia increased by 7.9% year on year in the first quarter of 2023, the National Bureau of Statistics said.

This occurred mainly due to a significant increase in exports of mining products.

The Mongolian economy grew by 4.8% in 2022 and by 1.4% in 2021.

International banks and financial institutions are optimistic about Mongolia's economic prospects. The Asian Development Bank forecasts its GDP to grow by 5.4% in 2023 and 6.1% in 2024, driven by exports, a recovery in mining, and a positive impact on transport and other activities.

Bank savings in Mongolia have exhibited a positive trend, reflecting the financial stability of the nation’s economy.

Steady Growth in National Currency Savings

According to the National Statistical Committee’s latest report, bank savings in the national currency of Mongolia amounted to 13.5 trillion tugriks at the end of April. This represents an increase of 424.8 billion tugriks (3.2%) compared to the previous month. Although there was a decrease of 206.1 billion tugriks (1.5%) compared to the same period last year, the overall trajectory showcases steady growth in national currency savings. This upward trend reflects the confidence of individuals and businesses in the stability of Mongolia’s financial system.

Citizens Hold Majority Share in Bank Savings

Out of the total bank savings, 12 trillion tugriks (88.9%) are owned by citizens, demonstrating the significant contribution of the general population towards the country’s savings pool. This indicates the financial prudence and long-term planning exhibited by Mongolian citizens, as they prioritize building personal savings for future financial security.

Foreign Currency Reserves Maintain Stability

In terms of foreign currency savings, the National Statistical Committee reported a total of 5.3 trillion tugriks. While this represents a slight decline of 616.5 billion tugriks (10.4%) compared to the previous month, foreign currency reserves remain robust. Moreover, when compared to the same period last year, there has been a notable increase of 976.5 billion tugriks (22.4%), signaling the resilience and stability of Mongolia’s foreign currency reserves.

BY

Mamoon Alvi serves as an integral part of our global newsroom team. With a strong background in international news from his time at both BOL TV and Dharti TV, he came on board at BNN well-prepared to contribute. Mamoon's unwavering dedication to journalism drives him to relentlessly pursue the truth and deliver crucial stories to audiences around the world.

During its regular session on May 24, 2023, the Cabinet made the following decisions:

During the Cabinet Session, Prime Minister L. Oyun-Erdene mandated that all information about the Government's Special funds be made open to the public.

Construction of the “Emeelt Light Industry Park” Commenced

Minister of Construction and Urban Development Ts. Davaasuren, Minister of Food, Agriculture and Light Industry Kh. Bolorchuluun, and Governor of the capital city, and the Mayor of Ulaanbaatar D. Sumiyabazar were tasked to take the required measures to get the feasibility studies and partial planning approved and start laying down the basic infrastructure within Q4 2023.

Preparatory works, including research, working drawings, partial planning of the park, and other infrastructure works, such as dam, engineering utilities, power supply, drinking water supply, and temporary power supply for a construction site, have already been completed.

Leather factories are planned to be relocated to the park, which will allow for re-planning and rehabilitation of the area where they are currently operating.

The park is planned with a processing capacity of 4.6 million skins and hides, of which four million sheep and goat skins, 400 thousand cowhides, 200 thousand horsehides, and 15 thousand camel hides. Moreover, it is capable of processing 3.6 thousand tons of wool and 1.2 thousand tons of cashmere.

Starting from July 1, MIAT to Conduct Scheduled Flights to 9 Domestic Destinations

In connection with the Government’s declaration of 2023-2025 “Years to Visit Mongolia”, MIAT Mongolian Airlines will start conducting scheduled flights to 9 domestic destinations in line with the Government’s goal to support tourism, revive domestic flights and reduce ticket prices. The scheduled flights will be conducted to Choibalsan, Dalanzadgad, Murun, Uliastai, Bayankhongor, Altai, Khovd, Ulaangom, and Ulgii, with 40-68 percent reduced prices.

This decision has been made to enhance the availability of domestic flights for local citizens, supporting the development of the tourism sector, and increasing the flow of tourists. It will allow not only local citizens but also tourists to travel comfortably, the Minister of Road and Transport Development highlighted in his presentation.

Development Projects set in the “New Revival Policy” to be Accelerated

The implementation process of the development projects set in the “New Revival Policy” was presented at the Session. Ministry of Economy and Development has taken numerous measures to ensure the smooth implementation and intensify the process of those projects.

Of the 20 development projects launched, 16 are in an active phase of execution and 10 are expected to be completed in 2023.

Brief News:

A consultation meeting on the implementation process and milestones of the “Vision-2050” long-term development policy of Mongolia will be held on June 9.

Variable cost per student of the Vocational training institutes and its methodologies were approved.

Guidelines for the Mongolian delegation to participate in the Second Mongolia-Tailand Intergovernmental Consultation Meeting on Cooperation, which will be held in Bangkok, Thailand on June 2, were discussed and approved.

A consular section will be established in the Embassy of Mongolia in the French Republic.

The list of explosives, tools for blasting, and their raw materials, which are permitted in the territory of Mongolia, was renewed and approved.