During his attendance, D.Sumiyabazar met with Deputy Prime Minister of Russia Arkady Dvorkovich, exchanging views on fuel supply and geology sector’s cooperation. Minister D.Sumiyabazar put proposals regarding reliable and constant fuel supply and reducing fuel price. In response, Arkady Dvorkovich told that Russian side is ready to render support on the matter. The Mining Minister agreed to hold a meeting with authorities of ‘Rosneft’, Russian Oil Company, on January 29 in Ulaanbaatar.

The same day, Minister D.Sumiyabazar met with Turkish Deputy Prime Minister Mehmet Simsek and discussed about bilateral cooperation and mining sector’s outlook. The meeting was followed by another meeting with authorities of ‘Lazard Freres’ financial advisory and asset management firm of France.The firm seeks cooperation with Mongolia for conducting structural changes of state-owned companies operating in mining sector and raising money from international financial market.

M. Unurzul

Tobacco smoking is the main cause of death that is preventable. A study conducted by the Mongolian Health Ministry in 2017 on tobacco use in the country showed that 61.3 percent of teenagers have smoked once or twice. According to a WHO study, Mongolians spend an average of MNT 100 billion on 3.2 billion cigarettes annually.

“The plan is to create a standard for kilobars that can be adopted around the world, delivered anywhere, possibly using blockchain to identify the bars, their origins,” a physical gold trading source said. “Rigid standards and blockchain would bring in people who are worried they could be getting conflict metal.”

The kilobar measure dominates Asian trade as gold contracts on the Shanghai Gold Exchange, Shanghai Futures Exchange, and Hong Kong Exchanges and Clearing are all in kilobars.

However, lack of transparency about their origin and the absence of a global standard thwart their use on exchanges elsewhere. They cannot be accepted at London Metal Exchange clearing arm LME Clear because they differ from its standard bars which are typically around 400 ounces.

According to sources’ estimates, top consumer China imports about 95 percent of gold in kilobars, while second-largest consumer India imports 80 percent in kilobars. The WGC estimated China’s 2017 gold demand at up to 1,000 tons and India’s at 650 tons.

“The Asian consumer market is in kilobars, it dominates gold trade,” a gold industry source said. “If you want to trade on the LME and you want to lodge your collateral in kilobars in another location, why shouldn’t you be able to? There are vaults all over the world.”

“You can add a lot of information with blockchain, where the gold was mined, where it was refined, serial numbers, who owned it previously. It could bring new demand to the market,” a physical market source said.

Furthermore, environmental and social impact assessments, as well as field research and engineering geology analysis have been completed. The industry experts prioritize research and estimation of a railway project. Therefore, the working group is preparing a detailed study of the project. “Establishment of a complex infrastructure in the east will have a significant impact in the regional development and will provide transit transportation for the two neighbors, remarked Tsengel Bold, CEO of Mongolian Railways state-owned company.

A deposit with around 200-300 million tons of mineral resource is located in the Khuut-Bichigt route. The infrastructure will intensify mineral turnover and will allow Mongolian mining products to be traded in the international markets. Also, the early estimation show that some percentage of freight transports of Russian and PRC in the Trans-Manchuria railways could be transited through Khuut-Bichigt. The Government’s 2016-2020 Action Plan stated to establish Tavantolgoi-Gashuusukhait and Khuut-Bichigt route railroads. The 239 km long Khuut-Bichigt railroad will also provide around 800 workplaces. Although the investment amount is still unknown, the related officials informed that the initial cost will be around USD 1 billion.

Mongolia, Russia and PRC have agreed to establish a trilateral economic corridor within the frames of “Belt and Road” initiative of PRC and “Development Road” initiative of Mongolia. Accordingly, 33 projects will be implemented for the corridor, which will consist of central, western and eastern regional development. Additionally, the related officials and investors of Khuut-Bichigt project have gathered to convene at the Corporate hotel on January 22-23.

Tugsbilig.B

� The Cabinet decided to submit to the Parliament a draft bill on General Program on Funding established between the Government of Mongolia and the Asian Development Bank. Financing of USD 468 million will be spent for diversifying economy, improving business environment, ensuring stability of social protection sector and creating jobs.

� The Cabinet resolved to submit to the Parliament a draft law on Mongolia-Korea intergovernmental general agreement on Issuance of Soft Loan from Economic Development Cooperation Fund in 2017-2019. The soft loan equal to USD 700 million has an annual interest of 0.2 percent and 30 years of repayment term and is to be spent for elimination of air pollution of Ulaanbaatar city.

� The Cabinet decided to set amount of undue tax loss at 0.050 percent a day in cases a tax payer does not pay his/her taxes in scheduled time or tax department and inspectors impose and collect unreasonable or excessive taxes.

� The Cabinet adopted methodology to compute index of provincial development, information required and list of organizations to give information. The index should be computed within the first quarter of the year and announced to public.

� The Cabinet decided to deliver information to National Security Council about condition of crime and law violations related to illegal circulation of narcotic drugs, and psychotropic.

� The Cabinet adopted Requirements and registration rule for citizen and legal body who render consulting service. The rule will set requirements for citizens and legal bodies in construction sector to give professional consulting service and regulate other relations.

In a research report consultants Wood Mackenzie said the combination of scheduled mine closures, top producer Glencore's strategic cuts and the impact of environmental inspections in China has depleted global stocks of concentrate.

According to the report global zinc stockpiles fell by a third in 2017 to 1.8 million tons, equivalent to 47 days of global usage. Exchange stocks halved from 500kt to 250kt (equivalent to just 6 days of global consumption) over the same period.

By the end of the second quarter, there will be less than 40 days’ of stock available for consumers; "a critically low level" according to the authors which should propel prices to $4,000 a tonne in the third quarter of this year.

"As the rapid escalation of the price thus far in 2018 has demonstrated, there is a strong possibility that investor
enthusiasm will pre-empt the tightness in the refined market and the cyclical peak in the price could be higher and sooner than
our base case assumption of a Q1 2019 average of $4,100/t."

Zinc has more than doubled since hitting multi-year lows in January 2016 when top producer Glencore curtailed production to shore up prices.

In December, Glencore said it would restart its Lady Loretta mine in the first half of this year, but added that it still expects zinc output to decrease slightly in 2018 to a shade under 1.1 million tonnes. In 2019, Glencore sees its zinc output creeping back up to 1.16 million tonnes.

Overall global zinc supply is to increase with additional capacity coming online in Australia (MMG's Dugald River project) and South Africa (Vedanta's Gamsberg mine).

“The decision has been taken in response to the increase of oil price,” explained Minister of Finance Ch.Khurelbaatar, while adding that oil price was around USD 40 when agreement was reached on the International Monetary Fund’s Extended Fund Facility Program. Oil price remains above USD 60 at the global market now. 
Kh.Aminaa

“Within the first quarter of 2018, the feasibility study on the oil refinery project will conclude, paving the way for the construction works to commence in the second quarter,” said Head of Cabinet Secretariat G.Zandanshatar, reporting on the Cabinet meeting on January 24.

In accordance with the decision, 150 ha area will be designated for special government use.

Moreover, state-owned enterprises and organizations will work on the construction of about 20-km-long railway and road connecting the oil refinery with Sainshand and energy transmission line.

A working group consisted of officials from the General Intelligence Agency, National Police Agency, Independent Authority Against Corruption and the General Authority for Specialized Inspection will be responsible for checking on each stage of the project.

The Oil Refinery Project will be co-implemented with the Republic of India.
Kh.Aminaa

Officials from the EXIM Banks of China and South Korea, Development Bank of Mongolia and Russian Vnesheconombank attended the meeting. The Development Bank of Mongolia chaired NEA EBA in 2017, therefore presided the 8th working-level meeting of the Association.

The GTI is an intergovernmental cooperation mechanism among Mongolia, China, the Republic of Korea and the Russian Federation, established in 1995 and supported by the United Nations Development Programme. The initiative focuses on the priority areas of transport, trade, investment, tourism, agriculture, energy and environment. Three Mongolian aimags – Khentii, Dornod and Sukhbaatar are involved in the initiative.

At the 8th working-level meeting, the sides exchanged views on funding of the 2nd stage of the Specialized Grain Terminal project in the Russian Zarubino port and potential projects and programs for stepping up cooperation.

The NEA EMA was established in 2012 to operate as a financial and economic cooperative mechanism of the GTI. Members of the association - Development Bank of Mongolia, Russian Vnesheconombank and the EXIM Banks of China and South Korea - work towards expanding the scope of cooperation with the Governments of the member states.
M.Anudari