1 GOLD AND COPPER PRICES SURGE WWW.UBPOST.MN PUBLISHED:2025/04/02      2 REGISTRATION FOR THE ULAANBAATAR MARATHON 2025 IS NOW OPEN WWW.MONTSAME.MN PUBLISHED:2025/04/02      3 WHY DONALD TRUMP SHOULD MEET KIM JONG- UN AGAIN – IN MONGOLIA WWW.LOWYINSTITUTE.ORG  PUBLISHED:2025/04/02      4 BANK OF MONGOLIA PURCHASES 281.8 KILOGRAMS OF PRECIOUS METALS IN MARCH WWW.MONTSAME.MN PUBLISHED:2025/04/02      5 P. NARANBAYAR: 88,000 MORE CHILDREN WILL NEED SCHOOLS AND KINDERGARTENS BY 2030 WWW.GOGO.MN PUBLISHED:2025/04/02      6 B. JAVKHLAN: MONGOLIA'S FOREIGN EXCHANGE RESERVES REACH USD 5 BILLION WWW.GOGO.MN PUBLISHED:2025/04/02      7 185 CASES OF MEASLES REGISTERED IN MONGOLIA WWW.AKIPRESS.COM PUBLISHED:2025/04/02      8 MONGOLIAN JUDGE ELECTED PRESIDENT OF THE APPEALS CHAMBER OF THE ICC WWW.MONTSAME.MN PUBLISHED:2025/04/01      9 HIGH-PERFORMANCE SUPERCOMPUTING CENTER TO BE ESTABLISHED IN PHASES WWW.MONTSAME.MN PUBLISHED:2025/04/01      10 LEGAL INCONSISTENCIES DISRUPT COAL TRADING ON EXCHANGE WWW.UBPOST.MN PUBLISHED:2025/04/01      УСТСАНД ТООЦОГДОЖ БАЙСАН УЛААНБУРХАН ӨВЧИН ЯАГААД ЭРГЭН ТАРХАХ БОЛОВ? WWW.BLOOMBERGTV.MN НИЙТЭЛСЭН:2025/04/02     САНГИЙН ЯАМ: ДОТООД ҮНЭТ ЦААСНЫ АРИЛЖАА IV/16-НААС МХБ-ЭЭР НЭЭЛТТЭЙ ЯВАГДАНА WWW.BLOOMBERGTV.MN НИЙТЭЛСЭН:2025/04/02     МОНГОЛБАНКНЫ ҮНЭТ МЕТАЛЛ ХУДАЛДАН АВАЛТ ӨМНӨХ САРААС 56 ХУВИАР, ӨМНӨХ ОНЫ МӨН ҮЕЭС 35.1 ХУВИАР БУУРАВ WWW.BLOOMBERGTV.MN НИЙТЭЛСЭН:2025/04/02     Б.ЖАВХЛАН: ГАДААД ВАЛЮТЫН НӨӨЦ ТАВАН ТЭРБУМ ДОЛЛАРТ ХҮРСЭН WWW.EAGLE.MN НИЙТЭЛСЭН:2025/04/02     1072 ХУВЬЦААНЫ НОГДОЛ АШИГ 93 500 ТӨГРӨГИЙГ ЭНЭ САРД ОЛГОНО WWW.EAGLE.MN НИЙТЭЛСЭН:2025/04/02     Н.УЧРАЛ: Х.БАТТУЛГА ТАНД АСУУДЛАА ШИЙДЭХ 7 ХОНОГИЙН ХУГАЦАА ӨГЧ БАЙНА WWW.NEWS.MN НИЙТЭЛСЭН:2025/04/02     “XANADU MINES” КОМПАНИ "ХАРМАГТАЙ" ТӨСЛИЙН ҮЙЛ АЖИЛЛАГААНЫ УДИРДЛАГЫГ “ZIJIN MINING”-Д ШИЛЖҮҮЛЭЭД БАЙНА WWW.BLOOMBERGTV.MN НИЙТЭЛСЭН:2025/04/02     ТӨМӨР ЗАМЫН БАРИЛГЫН АЖЛЫГ ЭНЭ САРЫН СҮҮЛЭЭР ЭХЛҮҮЛНЭ WWW.MONTSAME.MN НИЙТЭЛСЭН:2025/04/02     “STEPPE GOLD”-ИЙН ХУВЬЦААНЫ ХАНШ 4 ХУВИАР ӨСЛӨӨ WWW.BLOOMBERGTV.MN НИЙТЭЛСЭН:2025/04/02     ҮЙЛДВЭРЛЭЛИЙН ОСОЛ ӨНГӨРСӨН ОНД ХОЁР ДАХИН НЭМЭГДЖЭЭ WWW.GOGO.MN НИЙТЭЛСЭН:2025/04/01    

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Events

Events

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MBCC “Doing Business with Mongolia seminar and Christmas Receptiom” Dec 10. 2024 London UK MBCCI London UK Goodman LLC

NEWS

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Crypto facing tougher regulation – watchdog www.rt.com

The crash of the FTX exchange has made regulating the cryptocurrency industry a more urgent matter, according to the new chair of the global securities watchdog IOSCO.
Jean-Paul Servais told Reuters that targeting such ‘conglomerate’ platforms will be the focus for 2023.
In an interview with the news agency, he said regulating crypto platforms could draw on principles from other sectors which handle conflicts of interest, such as at credit rating agencies and compilers of market benchmarks, without having to start from scratch.
While regulators have been slow to write new rules for crypto assets such as Bitcoin, the implosion of the FTX exchange could help change that, Servais said. “The sense of urgency was not the same even two or three years ago. There are some dissenting opinions about whether crypto is a real issue at the international level because some people think that it's still not a material issue and risk.”
The chief executive added: “Things are changing and due to the interconnectivity between different types of businesses, I think it's now important that we are able to start a discussion and that's where we are going.”
The Madrid-based International Organization of Securities Commissions (IOSCO) coordinates rules for G20 countries and others. The body, which has already set out principles for regulating stablecoins, will now reportedly focus on platforms which trade in them.
FTX boss accused of using offshore funds after bankruptcy
According to Servais, crypto ‘conglomerates’ such as FTX have emerged, performing multiple roles including brokerage services, custody, proprietary trading, and issuance of tokens all under a single roof, thereby giving rise to conflicts of interest.
“For investor protection reasons, there is a need to provide additional clarity to these crypto markets through targeted guidance in applying IOSCO’s principles to crypto assets,” Servais said, adding that the IOSCO intends to publish a consultation report on those matters in the first half of 2023.
FTX, which is based in the Bahamas due to loose tax laws, collapsed on November 11 in a scandal that has cost crypto investors more than $11 billion. The debacle followed reports of mishandled customer funds and abandoned acquisition plans by rival exchange Binance.
The scandal has triggered a crisis of confidence in the cryptocurrency market and caused the value of assets including Bitcoin to sink.
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Electrokinetic mining allows for green, efficient recovery of REEs www.mining.com

Researchers at China’s Guangzhou Institute of Geochemistry have developed a new technique, electrokinetic mining (EKM), for the green and efficient recovery of rare earth elements from weathering crusts.
The technique exerts a voltage on the top and bottom of the ion-adsorption rare earth deposits (IADs), which generates an electric field to accelerate REE and water migration toward the cathode.
Compared with conventional techniques, EKM achieves ~90% recovery efficiency, ~80% decrease in leaching agent usage, and ~70% reduction in metallic impurities in the obtained REEs.
To get to those figures, the scientists first carried out bench-scale experiments in a homemade prototype with a simulated IAD. Results suggested that the REE recovery efficiency achieved by the EKM technique was 2.6 times higher than that achieved by the commonly used ammonium leaching technique.
Electrokinetic mining allows for green, efficient recovery of REEs
Illustration of IAD mining via EKM and AIP mechanisms. (Graph by Nature Sustainability.)
Then, they carried out scaled-up experiments at the kilogram scale (20 kg) in a larger EKM setup. The results were consistent with the bench-scale trials, that is, the EKM technique was able to achieve higher recovery efficiency and required less treatment time.
Based on the successful bench-scale and scaled-up experiments, the researchers applied the EKM technique to an actual IAD (~14 t-scale) during an on-site field experiment. Results suggested that the REE recovery efficiency was higher than 90% in 264 hours.
The group, thus, decided to further explore the mechanisms underlying the high REE recovery efficiency of the EKM. They noticed that the applied electric field that accelerates REEs and water migration unidirectionally towards the designed place via electromigration and electroosmosis is the key to enhancing REE recovery efficiency.
According to head researcher He Hongping, apart from its sustainability and high recovery efficiency, the EKM technique shows selectivity for REEs from other metallic impurities, namely, Al3+, Ca2+ Na+, and K+.
“We identified an autonomous impurity purification mechanism during the electrokinetic process, which is based on velocity and reactivity diversity between REE and other active metal ions,” He said.
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In cold, dry Mongolia floods are now common–with devastating urban impacts www.eco-business.com

Oyunchimeg Dechinlhundev lives in the outskirts of Mongolia’s capital, Ulaanbaatar. She makes a living from raising chickens and geese, and growing vegetables.
“When I was a child, 10 days of rain never flooded our street,” Oyunchimeg, who is in her late 40s and has lived here her entire life, remembers. “But several times in the past decade 10 minutes of rain have destroyed everything I planted.”
Flooding caused by heavy rain has destroyed her crops and killed her chickens on multiple occasions. “Now, we panic and worry when the rain starts to drop,” Oyunchimeg says.
In an attempt to prevent the damage, every year at the start of summer she and her neighbours reinforce their fences with barriers made from earth.
Rainfall patterns have changed in Mongolia over the past 40 years, meteorologists have found. While overall the country receives the same amount of annual precipitation, deluges are replacing the light rain that previously would fall for more than a week. This has negative consequences for the wildlife and livestock on Mongolia’s grasslands, as well as people living in its fast-expanding cities.
In 2004, only nine incidents of heavy rains and floods were recorded by Mongolia’s National Emergency Management Agency (NEMA). In the 18 years since that number has risen, with official data recording 72 disasters just last year.
When I was a child, 10 days of rain never flooded our street. But several times in the past decade, ten minutes of rain have destroyed everything I planted.
Mongolia’s average temperature has increased by 2 degrees Celsius over the past 70 years, according to the National Agency for Meteorology and the Environmental Monitoring.
Dulamsuren Dashkhuu, senior researcher and director of the Climate Change Research Department at the Information and Research Institute of Meteorology, Hydrology and Environment, a government agency in Ulaanbaatar, explains that hotter temperatures mean more evaporation. More humidity in the air means more frequent and intense rainfall and cloudbursts – an impact of climate change.
People leave pasturelands for cities
The Mongolian Plateau is cold and dry, and annual precipitation ranges from 50 to 400 mm. For thousands of years Mongolian nomadic herders have adapted to the harsh conditions. But recently, they have had to cope with more erratic weather as sudden downpours and long periods of drought become more frequent.
This is leading to a cycle of droughts, floods and the degradation of pastureland, says Dulamsuren. “When heavy rainfall falls on dry soil, it never goes deep into the soil. Instead, the rainfall flows away or washes away the soil, or even animals and gers [traditional Mongolian yurts, which also translates as ‘home’],” she explains. According to NEMA, between 2004 and 2021 over 75,000 livestock were lost because of flooding and heavy rain.
In 1991, nomadic households accounted for more than half of the population, data from Mongolia’s National Statistical Office shows. As of 2020, they were only 26 per cent. In the past 30 years, extreme harsh weather events called dzuds have become more common, with climate change one of the driving factors, scientists have said.
Although the reasons for rural-to-urban migration are multiple and complex, a common thread is that following the loss of their animals, herders have moved from Mongolia’s pasturelands to the provincial capitals, with newcomers flocking to the biggest cities of Ulaanbaatar, Erdenet and Darkhan. Between 1990 and 2021, official data shows, the population of Ulaanbaatar nearly trebled, growing from 590,000 to 1.6 million. (It is likely much higher in reality, the result of a ban on new inflows in 2017-20 that has resulted in large numbers of unregistered residents in informal settlements.)
A UN International Organisation for Migration study in 2018 found that migrant families settle where they can afford to live – normally in a city’s outskirts, without access to central heating, running water and the sewage system. Their gers have expanded the areas of slum and informal housing, called “ger districts”.
The cheapest or free sites are on the slopes of hills or valleys – the sites most exposed to environmental hazards such as sewage runoff and flooding.
Ulaanbaatar’s slum districts the worst-equipped to deal with changing climate
In Mongolia’s harsh winters, gers are sturdy against the wind and keep out the cold. But these domed tented homes are easily damaged by running floodwater and can be washed away.
Since 2004, more than 3,500 gers have been destroyed by floods and heavy rain in Mongolia; over half of this damage occurred in just the past four years, according to NEMA.
Changing rainfall patterns around Ulaanbaatar, combined with urbanisation, have resulted in an increase in flooding around the metropolis. Jambajamts Lkhamjamts from the Department of Meteorology and Hydrology at the National University of Mongolia says that previously just over 10 incidents of light rainfall per year “was the norm” for the city, which received about 400 millimetres of annual precipitation.
“However,” he says, “after 1990, only up to five [incidents of] rains, with stronger fall rates, were recorded.” Cloud formations around the city have changed, he says, explaining that “light rain falls from low-level horizontal clouds, but heavy rain falls from vertical clouds. In Ulaanbaatar, 16 km-tall [vertical] cumulonimbus clouds are commonly observed while we don’t see lower horizontal clouds anymore.”
Mother-of-three Munkhtuya Tumurkhuyag lives in the same ger district as Oyunchimeg Dechinlhundev and has experienced the harsh impacts of the city’s changing weather first-hand. Three years ago in July, floodwater streamed through her house. She and five of her neighbours had to be hospitalised shortly afterwards with diarrhoea and vomiting, where they were told they had dysentery. “So much water and faeces came through our window. We were vomiting and had chronic diarrhoea. Plus we got pneumonia because of the cold,” she says.
The floodwaters, Munkhtuya says, swept away pit toilets used by people living in the hilly ger districts and brought the raw sewage downhill, to where her house is.
Every year for the past five years, dysentery, salmonella and hand, foot and mouth disease cases have peaked between June and August, data from the Mongolian government’s Health Development Center shows.
Munkhtuya’s house has not flooded since 2019, as a United Nations Human Settlements Programme project installed three sewage systems in the ger districts.
But Munkhtuya’s experience points to the wider problems experienced by a city whose population has grown quickly without accompanying infrastructure development. Ulaanbaatar lacks roads, electricity lines and sewage systems. Earlier this year the city’s mayoral office announced that the Ulaanbaatar city authorities have been building new sewage systems, but it has also said the city still needs to build a 300 km sewage system and water reservoir.
The city’s changing weather and lack of infrastructure have multiple societal and public health impacts. Nandintsetseg Mygmarbaatar, 34, is disabled and walks with a crutch. After heavy rain her street floods and becomes muddy, and her crutch slips easily. She says she has fallen about a dozen times and broken her ankle and elbow.
“Once our streets have been flooded, muddy puddles linger here the whole summer,” says Nandintsetseg. “Sometimes the local authorities dump some dirt to dry up the puddles, but then it floods again. Elders or people like me are forced to stay home for our safety.”
This story was published with permission from The Third Pole.
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Opening of Zuunbayan-Khangi railway set to deliver major boost to Mongolian exports and economy www.finance.yahoo.com

The Prime Minister of Mongolia, L. Oyun-Erdene, has today opened a major new rail link which will provide a significant boost to the country's export competitiveness and wider economy as part of the Government's 'New Recovery Policy'.
The Prime Minister of Mongolia L. Oyun-Erdene speaking at the opening of the Zuunbayan-Khangi railway on 25 November.
The Prime Minister of Mongolia L. Oyun-Erdene speaking at the opening of the Zuunbayan-Khangi railway on 25 November.
The Zuunbayan-Khangi railway, which runs for 226.9km across south eastern Mongolia, provides a vital connection between the Tavantolgoi-Zuunbayan railway and the Khangi-Mandal border crossing on the Mongolia-China border.
Through a further connection to a new railway under construction on the Chinese border, the transportation distance for freight across this important economic corridor will be almost halved, significantly boosting trade in minerals such as iron ore.
With construction of the Zuunbayan-Khangi railway only beginning in March 2022, the completion of this project is set to lead to a rapid 30% increase in Mongolian export freight volume, with annual freight volumes set to stabilise at around twice their current level of 10.4 million tonnes from 2025, significantly boosting state budget revenues and local employment.
Speaking following the opening, the Prime Minister of Mongolia, L. Oyun-Erdene, said:
"The new Zuunbayan-Khangi railway was built in just eight months, through a public-private-partnership investment model, and is Mongolia's new gateway for transporting mining export products competitively to the global marketplace.
" Today's opening marks a major milestone in the Government of Mongolia's 'New Recovery Policy', which is focused on strengthening the country's economy following the pandemic and making Mongolia into a leading Asian country by 2050."
Having no access to the sea, Mongolia relies on 42 dry-road border points for its trade, yet as of March this year only three of them were connected by railroads. The completion of this project delivers a second new railway crossing in the south of the country, and the ambition of the New Recovery Policy is to ensure that all border points are connected by roads, railways and highways in consecutive steps.
180 companies and over 3,500 workers took part in the construction of the railway.
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China's Inner Mongolia region sees robust foreign trade growth with Mongolia www.xinhuanet.com

In the first ten months of 2022, North China's Inner Mongolia autonomous region saw robust foreign trade growth with neighboring Mongolia, local authorities said.
During the period, the region's total import and export value to Mongolia was 35.43 billion yuan ($4.95 billion), up 31.1 percent year-on-year, reaching a new high in the recent five years, according to Hohhot Customs.
Among them, Inner Mongolia imported 19.13 billion yuan of coal from Mongolia, up 150.1 percent year-on-year.
Since the beginning of this year, Hohhot Customs has carried out container lifting operations and segmented transportation at land border ports under its jurisdiction, which has successfully ensured smooth cross-border cargo transportation on the premise that foreign freight drivers do not enter the country, thus reducing the risk of epidemic transmission and promoting the rapid increase of coal imports.
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China-Mongolia cooperation to be boosted by presidential visit: traders www.globaltimes.cn

China-Mongolia trade ties will be further strengthened and expanded to a new level, as Mongolian President Ukhnaa Khurelsukh started a state visit to China on Sunday, during which bilateral cooperation in a wide range of areas is expected to be covered, Chinese traders and analysts said.
Trade of major goods such as coal from Mongolia and manufactured goods from China will continue to play an important role in bilateral trade, along with cooperation in infrastructure, particularly regarding the expansion of transport capacity and coverage, experts and traders said. Cooperation in areas such as agriculture and mining also have great potential under an improved transport system, they noted.
A cross-border import and export agent surnamed Li, who exports about 500 or 600 containers of goods to Mongolia and imports more than 1,000 containers from the country a year, sees even greater potential for bilateral trade.
"Compared with China-Russia trade, the volume and variety of trade between China and Mongolia are not high, with the Chinese side mostly exporting steel products, building materials and daily necessities to Mongolia and importing cashmere, wool and unpolished gems in return," Li said, adding that there is great room for trade growth and the visit is expected to boost bilateral trade.
From January to October, bilateral trade reached $9.67 billion, a year-on-year increase of 22.7 percent, data from the General Administration of Customs showed. Both imports and exports achieved double-digit growth, driven by the surging trade of Mongolian coal and Chinese commodity goods, despite high global inflation and the pandemic.
Political mutual trust between China and Mongolia have created favorable conditions for bilateral economic and trade cooperation, which will further be strengthened amid the high-level meetings during the visit, Da Zhigang, director of the Institute of Northeast Asian Studies at Heilongjiang Provincial Academy of Social Sciences, told the Global Times on Sunday.
"There are great prospects for cooperation in the fields of logistics, infrastructure, energy, agriculture and environmental protection… and both sides will explore the potential of further expanding practical cooperation and seeking the greatest common denominator within the framework of multilateral cooperation," Da said.
The joint development of railway networks with China has enabled Mongolia to buoy trade flows and China to stabilize its market supply of core goods like coal, which is the key area with potential, and the two sides will continue to look to unleash stronger momentum for trade flows, according to Da.
The Mongolian president's visit came just two days after the Zuunbayan-Khangi railway, which runs for 226.9 kilometers across southeastern Mongolia, started operations on Friday, after eight months of construction.
The line provides a vital connection between the Tavantolgoi-Zuunbayan railway and the Khangi-Mandal border crossing on the Mongolia-China border, according to the official website of the Mongolian government, laying the foundation for the opening of another new railway transportation channel between Mongolia and China, after a 233-kilometer cross-border rail line between the Tavan Tolgoi coal field and Gashuun Sukhait on the Chinese border was launched in September.
With the railway line going into operation, the annual import and export cargo capacity will increase by 20 million tons, while the total railway transportation volume will increase by 65 percent, people.cn reported. The distance to the international market will also be shortened by 242 kilometers, meaning major savings in transportation times and costs.
Discussions about stronger transport connections were on the agenda at the recent meeting between China's Minister of Transport Li Xiaopeng and his Mongolian counterpart via video link, during which the two sides discussed plans to enhance cooperation in highways, railways and civil aviation.
"It is hoped that the transportation departments of the two countries will further improve the level of transportation interconnections, ensure the safety, stability and smooth flow of the logistics supply chain, and take cooperation between China and Mongolia in transportation to a new level," Li said.
The railway connection between China and Mongolia is not only tapping into new opportunities between the two countries but the whole regional trade network, which enables Mongolia to have better links with other Asian markets, Da said.
 
 
 
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Mongolia opens new railway to China www.sxcoal.com

Mongolia opens a new rail line to China on November 25 in a move to expand commodity exports despite the COVID-slowed cross-border trades.
The start of the 226.9-kilometer Zuunbayan-Khangi railway will speed up transportation of commodities like coal, copper, and iron ore from Mongolian mines to its main export market China. Rio Tinto's Oyu Tolgoi project in Mongolia will also be benefited from the new line.
This is the second railway export artery to China, 66 years after the construction of the Zamynuud-Erlian railway in 1956.
It was reported the customs clearance capacity of import and export products will increase by 20 million tonnes and the total freight volume of railway transportation will increase by 65% after it was put into operation, saving transportation costs and time.
(Writing by Emma Yang Editing by Tammy Yang)
For any questions, please contact us by inquiry@fwenergy.com or +86-351-7219322.
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Mongolia experiencing extreme cold weather this week www.news.mn

Most parts of Mongolia are experiencing extreme cold weather from Monday and through the entire this week, with overnight temperatures fell to 35-47 degrees Celsius below zero.
The heavy snow and snow storms are hitting the country’s eastern and western parts, urging the public, especially nomadic herders and drivers, to take extra precautions against possible disasters.
Mongolia’s climate is strongly continental, with long and frigid winters. A temperature of minus 25 degrees Celsius is standard during winter. Unstable weather events are also common in the country throughout the year.
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Protests against China's COVID measures spread to Shanghai www.nhk.or.jp

The Chinese government says the number of new COVID cases reached about 38,000 on Saturday, hitting a new record for the fourth consecutive day and topping 4,000 in the capital Beijing for the first time.
Protests against the government's restrictive zero-COVID policy have taken place in Beijing and other Chinese cities.
Videos of people in Shanghai chanting "We do not want PCR tests" have been posted online.
The public anger was sparked by a rumor that the people who died in a fire in Urumqi, the central city of the Xinjiang region, on Thursday could not escape in time because their high-rise apartment building was partially locked down.
Reuters news agency footage shows people gathering at Shanghai's Wulumuqi Road -- which is named after Urumqi -- to mourn the 10 victims.
The protesters held signs that read, "Rise up, those who refuse to be slaves" -- a line from China's national anthem.
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Mongolia to channel natural resource riches into new sovereign wealth fund www.intellinews.com

eep below Mongolia’s vast territory lie billions of dollars worth of coal, copper, gold and other minerals. How to ensure these natural riches are spent wisely and saved for the future has long been debated in the country but the government sees a new sovereign wealth fund (SWF) as the answer.
Mongolia is no stranger to sovereign funds, having set up several over the past two decades. But this fund would be the first to manage domestic assets wholly or in part. And state-owned mining enterprise Erdenes Mongol LLC is seen as best positioned to handle the job.
Transforming the structure of Erdenes Mongol from a state-owned enterprise (SOE) into a sovereign fund will help Mongolia better direct its mining resources, says Batnairamdal Otgonshar, the country’s Vice Minister for Mining and Heavy Industry.
Revenues from the companies under its umbrella can be moved into offshore investment accounts where they can generate more cash. More critically, he adds, the funds will be beyond the grasp of politicians who have a history of raiding government coffers ahead of elections to pay for populist projects.
Batnairamdal Otgonshar (Credit: Instagram account).
“We have done cash handouts in the past, that is the wrong thing to do, especially politically driven cash handouts,” says Batnairamdal. “Basically it boosts inflation and it doesn’t create any value. What we should be doing is investing that money into large infrastructure projects.”
The government’s vision is to transform Erdenes Mongol into a local version of Singapore’s Temasek Holdings or Kazakhstan’s Samruk-Kazyna. It is hoped that, in doing so, cash will be raised that can be converted into new infrastructure, which in turn wil help boost job numbers.
“We are at the point where we need a lot of heavy investment,” adds Batnairamdal. “Obviously the government isn’t going to be able to commit to 100% of those investments, no one does that, but with mega projects you would require a 30% equity commitment.”
The vice minister observes that a 30% equity commitment would need to be shared by partners including the government and others. The government would pay for its commitments through Erdenes Mongol.
Pouring mining profits back into infrastructure will also allow the government to boost the production of value-added products. Investments could include a copper smelter, a coal washing plant and other factories to increase the value of Mongolia’s underground wealth.
Reinvesting revenue also shows investors that they have a committed partner in Ulaanbaatar, says Batnairamdal, adding: “Especially when it comes to large mega projects, I think investors require government commitment”.
Companies under the Erdenes Mongol umbrella produce and export copper, coal, uranium and other minerals.
The portfolio includes the government’s stake in Oyu Tolgoi, the giant copper and gold mine in the Gobi Desert that is being expanded by Anglo-Australian mining giant Rio Tinto. Erdenes Tavan Tolgoi, one of the world’s largest coking coal deposits, is another holding.
Some of Erdenes Mongol’s companies are generating considerable revenue, others are still in development.
The Norwegian global pension fund could be a good model for saving revenue from these businesses, notes Batnairamdal. “You just park the money outside in stocks, bonds, real estate, or a sovereign development fund, then take income generated from natural gas or mining and then invest back into the country with large infrastructure projects,” he says.
Edward Faber, Asian Development Bank’s (ADB’s) country economist for Mongolia, sees SWFs as effective tools for fiscal policy management in resource-abundant countries. Wealth funds can act “as a short- and medium-term stabilisation mechanism as well as a long-term savings mechanism,” considers Faber.
Moving forward there will be the need to deliver a balancing act. Mongolia is highly indebted and there is constant pressure on SOEs to produce revenue so the government can balance paying down the debt and funding social welfare programs.
Another challenge for the government will be keeping Erdenes Mongol out of anyone’s political orbit, while getting its finances in order and made transparent.
"They really want to model Erdenes Mongol after Singapore's Temasek,” says Munkhdul Badral Bontoi, head of market research firm Cover Mongolia. “A good model, but I'm sure they won't be able to separate the management from the politics."
Erdenes Mongol also needs to show it can pay dividends. The company has not yet paid dividends to the state, although some of its subsidiaries have turned a profit. One problem is misdirected expenditures of its subsidiaries.
A 2021 World Bank report showed that 62% of Erdenes Tavan Tolgoi’s costs were attributable to the production of coal, while the remaining 38% was spent on marketing, benefits, travel and entertainment.
Finances at the company and its subsidiaries have been opaque, the report added, and “should be subject to independent external audits that are published on the company’s website, as well as a much higher degree of transparency of financial information and operations.”
If the government succeeds in transforming Erdenes Mongol into a fund it will follow the country’s Fiscal Stability Fund, which has amassed $46.7mn in assets. This fund’s revenues accumulate from windfalls when commodity prices are high and are used to stabilise the economy when those same commodity prices plummet.
It has not been smooth sailing for the fund. The World Bank report described how volatility in government spending has been “increasingly inefficient” during boom times, especially on politically motivated local infrastructure projects. Public debt has also ratcheted up with each decline in fiscal revenues, the World Bank said.
“The inability in [delivering] smooth fiscal expenditures, as Chile, another copper-dependent country, has done, contributed to Mongolia’s fiscal crisis and poor public investment decisions,” the report stated.
The country’s largest SWF, Future Heritage Fund, holds $269mn in assets and is one of the world’s top 100 funds by assets, according to the Sovereign Wealth Fund Institute. The idea behind the fund is to save mineral wealth for future generations that won’t be able to profit from non-renewable resources. But some say it needs better management.
“Royalties just accumulate there but the funds are actively managed. There should be asset management,” said Tumenstogt Tsevegmid, a former head of Erdenes Mongol.
Erdenes Mongol also needs active management but it's not yet clear who will lead that charge. The company has gone through a string of chief executives recently, including one who was arrested in October 2021 on bribery charges. The executive pleaded guilty. Elections and changes in government have also resulted in senior management turnover.
The company’s current interim CEO, O. Khulan, has been running the company for over a year while the government searches for a permanent head of the enterprise. Erdenes Mongol did not respond to a request for comment on its hiring effort.
In September the government declared that the job was open to anyone, regardless of nationality, as long as they come with experience in managing a wealth fund.
“Domestic and foreign citizens with international experience will be considered,” said Cabinet chief Amarbayasgalan Dashzegve. “Especially those who have worked in the field of wealth funds in countries such as Singapore and Norway.”
Hiring a chief executive with SWF experience is a good first step. Hiring a good auditor will also be essential. Retaining any new executive for the long haul, and allowing for a major restructuring of Erdenes Mongol, will amount to a considerable mountain to climb for Mongolia’s young political elite – but one that could yield dividends for decades to come.
By Michael Kohn
 
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