Steppe Gold Ltd announced that it has entered into a turnkey engineering, procurement and construction (EPC) contract with Hexagon Build Engineering LLC for the Phase 2 Expansion at the ATO Gold Mine in Mongolia.

The precious metals producer said the contract amount payable to Hexagon for the full performance of the work under the EPC contract is approximately USD 148.4 million, which is fully funded by a USD 150 million project finance package that has been made available to the company and its affiliates by TDB Capital Pte Ltd and certain of its affiliates, along with the Trade and Development Bank of Mongolia.

Steppe Gold noted the Phase 2 Expansion is estimated to be complete by the end of 2025 and commence commercial production by 2026.

It added that Phase 2 is expected to increase the company’s production from 30,000 to over 100,000 ounces per annum for 12 years at approximately USD 900 per ounce gold equivalent and is anticipated to produce over 1.2 million ounces of gold equivalent on a recovered basis.

The ATO Gold Mine has produced over 100,000 ounces of gold and generated over USD 185 million in gross revenue, with a further anticipated 65,000 ounces until the end of 2025, according to the company.

Steppe Gold is Mongolia’s premier precious metals producer, with about 4.5 million gold equivalent ounces in resources.

Minister of Road and Transport Development S. Byambatsogt received Kitanaka Takefumi, CEO of "New Ulaanbaatar International Airport" LLC, and exchanged views on increasing the capacity of Chinggis Khaan International Airport and transferring domestic flights to Buyant-Ukhaa International Airport.

Minister S. Byambatsogt highlighted, “Chinggis Khaan International Airport is a symbol in relations between Mongolia and Japan. However, there are a lot of complaints from the citizens about the insufficient number of registration desks and long waits for passenger luggage. We plan to receive 2 million 200 thousand passengers this year, so we need to focus on reducing complications and obstacles by adding registration desks and improving management for quickly handing over luggage. Also, domestic flight destinations have been increased to nine from last July, which was three. Domestic flights are mostly served by the elderly, mothers with infants and young children, and people with disabilities. Therefore, we propose to move domestic flights to "Buyant-Ukhaa" International Airport to ensure the interests and comfort of its citizens.”

Kitanaka Takefumi, CEO of "New Ulaanbaatar International Airport" LLC, noted, “Certain works have been carried out to expand the conveyor belt for luggage and increase the space. We will continue to work following our plan. The number of registration desks was increased from 16 to 18. There will be 20 registration desks by next May. We are also studying the possibility of using domestic flight registration desks for international flights. We are focusing on improving the quality of our services and ensuring that all employees of the public and private sector airlines are dedicated to their work and being responsible.”

The Ministry of Road Transport Development reported that at the end of the meeting, the two sides agreed to take necessary measures to increase the airport’s capacity and transfer domestic flights.

The number and frequency of flights have increased by 2-3 times, and air passengers reached 1 million 750 thousand in 2023 as a result of achievements made in transport liberalization within the Government’s ‘New Revival Policy’. Out of 400,000 passengers served by domestic flights last year, 340,000 were on "Oyutolgoi" flights.

Translated by Sainzaya Davaajamts

Mongolian President U.Khurelsukh signed an agreement worth of USD 1.7 billion investment by French government-owned Orano Mining in October 2023, during his visit to France. The agreement allows Orano to establish Mongolia’s first uranium mining and processing venture. For Mongolia’s landlocked economy, mining partnerships are strategic tools for foreign policy endeavors.

The economic benefits of the Orano agreement are substantial. According to the government, Ulaanbaatar is estimated to earn a total of $1 billion in tax revenue across the forecasted 30-year lifetime of the mine.

A significant portion of the revenue, approximately USD 47 million, will be designated as payment for Orano’s use of Mongolia’s mineral resources. As per the Environmental Protection Law of Mongolia, the state assumes ownership of natural resources and requires payment from non-government entities to use natural resources.

The project has been established by Badrakh Energy – a collaborative effort between Orano and the Mongolian state-owned enterprise MonAtom – and is expected to span a total of 47 years. Preparatory work is scheduled from 2024 to 2027, uranium production from 2028 to 2060, and subsequent rehabilitation activities from 2061 to 2070.

Uranium has long been a critical mineral for the global energy system, fuelling vast amounts of reliable and low-carbon nuclear energy. As the world strives towards net-zero emissions targets, uranium is poised to enable unprecedented expansion of nuclear generation.

It is this global transition that is driving Mongolia’s ambition to emerge as a new leader in the uranium market, adding diversity to its already prosperous copper export capabilities. The World Nuclear Association notes that Mongolia’s uranium reserves are approximately 60,500 tonnes. Since the closure of the uranium mining town, Mardai, Mongolia has established uranium exploration agreements with China, Russia and the Czech Republic. But France will be the first to exploit and extract uranium from Mongolia.

France derives about 70% of its electricity from nuclear energy and it has been active in pursuit of uranium in Mongolia and Central Asia, including Kazakhstan and Uzbekistan.

United Nations Secretary-General Antonio Guterres appointed Major General B.Erdenebat of Mongolia as force commander of the United National Peacekeeping Force in Cyprus (Unficyp). According to an announcement on Tuesday evening, B.Erdenebat succeeds Major General Ingrid Gjerde of Norway.

The UN published a short CV of Major General B.Erdenebat according to which he has had a distinguished career in the Mongolian Armed Forces, serving most recently as the Chief of Staff at the Mongolian Air Force Command (2020-2023). He was previously Senior Officer in the General Staff of the Mongolian Armed Forces (2017-2018) as well as Chief of the Peace Support Operation Division within the General Staff of the Mongolian Armed Forces (2014-2017).

“He has been deployed in eight United Nations and North Atlantic Treaty Organization peacekeeping and peace support operations including in Iraq, Sierra Leone, Sudan and South Sudan. Notably, he served as a Contingent Commander in United Nations Mission in Liberia (2010-2011), and as a Battalion Commander in UN Mission in South Sudan (2013-2014). He also held the positions of Chief of Staff in UNMISS Sector South (2018-2019) and Juba Sector Commander (2021-2022),” the UN said.

Major General B.Erdenebat holds a master’s degree from the National University of Defence in Ulaanbaatar, Mongolia, specialising as an Infantry officer. He is a graduate of the Air Command and Staff College and the Army War College in the United States. He is fluent in English and Mongolian.

Mongolia hopes to double its GDP-per-capita to $10,000 before the decade is out but that will require a huge ramp up in investments in its key mining and metals sector, the country’s Finance Minister Javkhalan Bold said on Tuesday.

The landlocked and mineral resources-rich country derives a quarter of its gross domestic product and 90% of exports from mining, and is home to Oyu Tolgoi, one of the world’s largest-known copper and gold deposits in the Gobi desert.

“Both in terms of explorations for the mining or the exploitation and also even in the processing … we would be very much happy to look to work with foreign investors,” said Javkhalan, declining to give any details on projects in the works.

It expects GDP-per-capita to rise to $6,000 this year from $5,000 last year, aiming to reach $10,000 before 2030.

To realise its growth targets, Mongolia needs another two or three projects the size of Oyu Tolgoi, in which the government had invested as much as $10 billion, the minister said, adding the terms of any arrangement would have to be win-win for both sides.

Wedged between China and Russia, the country has garnered attention from governments such as the United States and company bosses including Tesla CEO Elon Musk seeking to secure access to metals to power the green energy boom.

But Mongolia has struggled in the past to cash in on its riches, with poor governance of its state-owned mining companies leaving the country saddled with billions of dollars of debt.

In August, the country said it had settled almost all of its outstanding tax issues with Rio Tinto over development of Oyu Tolgoi, which is owned 66% by the Australian mining company and 34% by the government respectively. Some of those issues were still outstanding, the minister said.

“Of course we will try to reach some depth of understanding without any court process,” he said, adding that going to court would be a last resort – though he did not expect this to be an impediment to the future project development.

Credit rating hopes

On the wider economy, where inflation is running at 8.6% in November according to central bank data, Javkhalan said he had no expectations that “Mongolia’s policy rate will go down anytime soon” with the benchmark interest rate standing at 13%.

However, he was hopeful to advance talks with credit rating agencies this year.

“It is very likely that Mongolia will be successful in terms of getting our sovereign country rating upgraded,” Javkhalan said. Fitch reaffirmed Mongolia’s rating at B in 2023.

Javkhalan also said the government had no plans to issue on international markets, having completed a buyback of a 30-billion yen ($208 million) Development Bank of Mongolia bond and a tender of its 2024 note, with the next international bond coming due in 2026.

The government will ramp up its support for corporate issuance from Mongolian companies and was also looking into supporting the capital Ulaanbaatar in launching its debut municipal bond in the near future.

($1 = 143.9900 yen)

(By Jorgelina do Rosario and Karin Strohecker; Editing by Emelia Sithole-Matarise)

In a bold bid to boost its economic strength, Mongolia plans to double its Gross Domestic Product (GDP) per capita to $10,000 by the end of this decade. The ambitious target hinges on substantial investment in the country’s dominant mining and metals sector, as announced by Finance Minister Javkhalan Bold. Rich in mineral resources, Mongolia depends heavily on its mining industry, which contributes to a quarter of its GDP and accounts for 90% of its export revenue.

Untapped Potential of a Mineral-Rich Nation

The vast Oyu Tolgoi copper and gold deposits in the Gobi desert are a testament to Mongolia’s mineral wealth. The country, now open to partnerships with foreign investors for exploration, exploitation, and processing within the mining sector, sees this as a pivotal step to achieve its economic goal. However, the government has not yet revealed specific project details.

From a GDP per capita of $5,000 last year, Mongolia is projecting an increase to $6,000 this year. To reach the ambitious $10,000 target, the nation would need to develop two or three projects on the scale of Oyu Tolgoi, signifying a substantial investment. In the past, the government has invested around $10 billion in Oyu Tolgoi, which it partially owns alongside Australian mining giant Rio Tinto.

Overcoming Past Challenges

Mongolia’s journey has not been devoid of obstacles. The country has grappled with issues such as poor management of state-owned mining entities and debt problems. However, the recent settlement of tax disputes with Rio Tinto over Oyu Tolgoi signifies progress and a move towards a more stable economic environment.

The country maintains a cautious approach towards external finances. With a high policy rate of 13% due to inflation concerns, Mongolia has no immediate plans to issue on international markets following recent bond buybacks. The government is also contemplating supporting corporate and municipal bond issuances, with the capital Ulaanbaatar potentially launching its first bond soon.

Hope for a Brighter Economic Future

Mongolia looks forward to improving its sovereign credit rating. The hope was bolstered after Fitch reaffirmed its rating at B in 2023. As the country moves towards its goal, the focus remains on leveraging its rich mineral resources and securing strategic investments in the mining sector, paving the way for a prosperous economic future.

Mongolia will hold an international ice and snow festival to enhance winter tourism, local media reported Tuesday, citing the country's Ministry of Environment and Tourism.

The festival "Mazaalai" co-organized by the ministry and the non-governmental Mongolian Tourism Organization, is to be held at the ski resort Sky Resort on the southeastern outskirt of the capital Ulan Bator from Jan. 14 to Feb. 8.

Competitors from six countries, namely Mongolia, China, Russia, France, the United States and Thailand, will carve ice and snow sculptures with free-style themes, according to the organizers.

During the festival, visitors can enjoy various ice and snow events, folk music and dance concerts, among others.

Currently, Mongolia's economy primarily depends on its export-oriented mining sector, and developing tourism is seen as the most viable way to diversify economy as the Mongolian government has taken measures to promote the development of tourism.

In 2023, the country received over 650,000 foreign tourists and earned 1.2 billion U.S. dollars from the tourism sector, hitting an all-time high.

The capital has initiated the construction of a high-capacity metro in Ulaanbaatar. The Governor of the Capital City, and the Mayor of Ulaanbaatar, Nyambaatar Khishgee, presented this development to journalists yesterday.

The Mayor, in his address, highlighted that the metro construction project has commenced, following recent government discussions and resolution on financing. The capital city itself will bear 100 percent of the budget. Additionally, in the event of a need to guarantee construction performance, the government will issue a partial guarantee.

A meeting of the Governor's Council of the capital is scheduled to discuss the construction. In the upcoming weeks, the budget will be presented at the meeting of the Citizens Representative Khural of the Capital, with subsequent approval of the budget.

The city of Ulaanbaatar collects USD 100-200 million in tax revenue in the state budget. According to this government's resolution, it has been decided that the revenue collected by the capital city can be used to finance the metro project.

Based on a preliminary feasibility study, the metro project has an estimated budget of USD 1.3 billion. The capital city anticipates raising an average of USD 200 million annually through its budget revenues for project financing. The Mayor provided further clarification on the project.

- So, does it mean that the feasibility study for building the metro is ready? Is it a new one, or is it based on the feasibility study previously done by JICA?

- The idea of having the first metro in the capital was discussed in the mid-1980s, and the then urban development management and the scientists and experts of the former Soviet Union jointly drilled 5 large boreholes in the center of Ulaanbaatar and conducted the first analysis.

Since then, discussions have been ongoing since 2005, and the first basic research was carried out until 2013. In 2011, South Korea's "Soosung Engineering" company made the first preliminary feasibility study, and then, by combining the collected analysis and data, in 2013, Japan's international cooperation organization JICA made the preliminary feasibility study that we have now.

According to this feasibility study, the construction of a one-line metro in Ulaanbaatar, along with the depot, is planned to be approximately 18.3 km long horizontally from Tolgoit to Amgalan. Of this, a feasibility study is planned for 6.6 km in the central part of the capital to go underground, and the remaining parts will have a pillar-based bridge structure.

- What preparations have started now?

- Within this month, an international open tender will be announced for the selection of the consultant to manage the project and the contractor. Negotiations will commence with the selected companies and institutions. The finalization of how many years the project will take and at what cost, will be based on the outcomes of the open tenders.

Furthermore, the feasibility study mentions the pre-sale of some immovable assets of the capital during the project's implementation. This preliminary estimate is aimed at financing the metro project by utilizing our internal resources.

In the future, with funding from 2025-2028, the capital's treasury will conduct calculations and research on several scenarios to advance the metro project. Currently, over MNT 300 billion per year is allocated for public transport subsidies in the capital. There are plans to conduct calculations and studies on how to make efficient investments with the funds provided in this manner.

Mongolian police detained 298 suspects involved in drug trafficking and consumption and seized more than 72,000 doses of drugs in 2023, local media reported on Monday, citing data from the country's Main Police Department.

A total of 214 crimes related to the illegal trafficking and consumption of narcotic and psychotropic substances were registered in Mongolia, the official statement noted.

According to experts, there has been a sharp increase in the number of crimes on illicit trafficking and consumption of narcotic and psychotropic substances in Mongolia in recent years.

"The main reasons for the increase in drug crimes in Mongolia are the lack of knowledge about drugs, curiosity and the want to earn money," they added.