Members of the working group in charge of implementing the parliamentary resolution No.92 dated November 21, 2019, titled ‘Ensuring the interests of Mongolia in the exploitation of the Oyu Tolgoi gold-copper mine’ led by Minister of Justice and Home Affairs Kh.Nyambaatar yesterday held a meeting with representatives of Rio Tinto.

During the meeting, the sides exchanged views on accelerating the negotiations on Oyu Tolgoi project and developing a working plan to resolve certain issues surrounding the project in the near future. The working group members stressed the need to pay special attention to ensuring the full implementation of the parliamentary resolution No.92.

The meeting was attended by Minister of Mining and Heavy Industry G.Yondon, Minister of Energy N.Tavinbekh, Deputy Minister of Justice and Home Affairs B.Solongoo, CEO of Erdenes Oyu Tolgoi LLC N.Tserenbat. Whereas, Copper Chief Executive of Rio Tinto B.Bold, Head of Rio Tinto Ventures Andrew Latham, Country Director in charge of Rio Tinto’s operation in Mongolia Kh.Amarjargal and advisor B.Usukhbayar represented the company.

A press conference was held today to present the activities being carried out to mark the 100th anniversary of the establishment of diplomatic relations between Mongolia and the Russian Federation.

Deputy Minister of Foreign Affairs B.Munkhjin, Director of the Neighboring Countries Department of the Ministry of Foreign Affairs T.Battsetseg and Ambassador Extraordinary and Plenipotentiary of the Russian Federation to Mongolia I.K.Azizov participated in the press conference.

The sides have approved a joint plan to celebrate the 100th anniversary of the two countries' diplomatic relations and are implementing the activities set out in the joint plan throughout this year.

During their telephone conversation in February, Foreign Ministers of Mongolia and Russia B.Battsetseg and L.Lavrov announced that the celebration of the diplomatic anniversary had begun.

Deputy Foreign Minister B.Munkhjin said, "A joint plan that covers 92 activities in the fields of politics, defense, trade, economy, culture, science and the humanities has been approved. The anniversary will be celebrated on November 5. The following major events will be held during the remaining period of this year:

On November 4, the Russian State Academic Dance Ensemble ‘Alan’ will perform at the Mongolian Central Palace of Culture.

On November 5, the unveiling ceremony of the postage stamp dedicated to the 100th anniversary will be held.

On November 12, the Embassy of Mongolia in Russia will host a reception in Moscow.

Moreover, the two sides are planning to hold high-level reciprocal visits for the rest of the year."

Ambassador I.K.Azizov said, "Plans are underway to organize a number of political and economic events within the framework of the anniversary. For instance, members of the State Council of Russia are planning to pay a visit to Mongolia on November 4-7. Representatives of the Ministry of Education will also visit Mongolia to discuss the establishment of a Mongolia-Russia joint school.

Director of the Neighboring Countries Department of the Ministry of Foreign Affairs T.Battsetseg emphasized that the two countries have set a goal to take trade and economic cooperation to a new level in the next century by jointly implementing major development projects such as the Erdenet plant and the Ulaanbaatar railway."

Today, October 27, marks the 60th anniversary of Mongolia's accession to the United Nations. On the occasion of the anniversary, Minister for Foreign Affairs B. Battsetseg delivered a congratulatory message.

The Minister stated, “I wish to sincerely congratulate my fellow Mongolians on the 60th anniversary of Mongolia’s full-fledged membership to the United Nations.

The United Nations was founded on October 25, 1945, when the thick fog of World War II was not yet fully lifted by nations who had suffered from the war that caused an immeasurable loss in the history of humanity and took millions of precious lives to avoid another such a calamitous disaster and build lasting peace.

Although nations of the world today greatly vary in their history, culture, customs, political-economic systems, and development levels, the United Nations represents humanity as one whole family. This historic 60th anniversary of Mongolia’s entrance as the 101st member of this large family, proclaiming its sovereignty and independence of its state to the world, is an auspicious day for all Mongolians.

The United Nations was founded on the principles of equal rights and participation of all nations, irrespective of whether they are large or small and developed or developing. Therefore, as a landlocked and developing nation with a small population, Mongolia gained an opportunity to express its own voice and positions for the well-being of humanity and peace on a global stage by becoming its member.

For the last 60 years, Mongolia fully seized this opportunity, strictly adhered to the Goals and Principles of the UN Charter, and contributed to strengthening international peace and security, promoting social and economic development, and securing human rights, which are the three pillars of the United Nations activities. Today, Mongolia has established diplomatic relations with 193 countries of the world and became the member of more than 80 international and intergovernmental organizations and acceded to more than 290 international treaties.

Taking this opportunity, I would like to express my sincere thanks to the UN and its agencies for providing invaluable assistance to support Mongolia’s economic and social development.

Within the framework of ‘the Vision 2050: the long-term development policy,’ which was designed in coordination with the Sustainable Development 2030 Agenda, the Government of Mongolia plans to offer no less than 90% of all government services through the ‘E-Mongolia’ central platform in 2021-2024 and will closely collaborate with the United Nations to digitize all services and reach the goal of becoming a ‘Digital Nation’.”

On October 25, representatives of coal mining companies and entities held a discussion under the theme, ‘Standard Rate and the Mining Royalties’, on taxes and corresponding fees for coal at the Mongolian National Chamber of Commerce and Industry.

Regarding the event, CEO of Mongolian Coal Association J.Zoljargal said, “The fee for exploitation of mineral resources (royalty) is required to be paid by all mining companies that are running exploitation and putting the resources on the market for sales, and they have indeed made the corresponding payments so far. However, the Government began to implement standard rates for the royalties from this July. As a result, expenditure have increased, putting the companies in risk of stopping operations.

In 2016, the Government approved the ‘Assessment for export products sales, and sources to establish internationally standard rates’. In its framework, the Ministry of Finance announces the monthly rate for the coal market. This time, however, the Ministry announced an unrealistic rate which has put on unfair tax burdens on entities that mine coal.”

Noting how Mongolian coal companies have been unable to make corresponding profits due to infrastructure and border restrictions despite the increased demand for coal in China, he underlined how the increase in fees could lead to a deficit for entities.

Deputy Director of ‘Khishig Arvin’ LLC B.Nasanbileg said, “The sudden increase in taxes and fees are creating uncertainty in the mining sector. For example, while the fee for 1 ton of coking coal was over USD 100, now we will have to pay a fee that is two times as much, resulting in an increase in expenses once more.

In our current situation where the country earns most of its foreign currency reserves through minerals, and especially coal, it is necessary to continue to keep the competitiveness on the global market by supporting companies and employers.”

CEO of ‘Erdenes Tavantolgoi’ JSC B.Gankhuyag said, “The royalty is becoming another burden on top of the current pandemic situation. For a single ton of coking coal priced at USD 83, a fee of over USD 260 was imposed in the third quarter of this year. There is no point in running a business if we have to pay a royalty of USD 15 for our coal that was sold at USD 13. Our company has reached a point where we had to stop mining coal from October 20. We contributed a total of MNT 2.4 trillion to the state budget so far. Out of this, MNT 2.2 trillion was contributed to the state budget in the last four years. 25 percent of our company’s sales income of MNT 8 trillion was also used as payment for various forms of tax. Furthermore, we had a significant amount of expense in the framework of works carried out for corporate social responsibility during the pandemic. Thus, I believe it would not be right to impose the fee on top of all this. Despite how the royalty is supposed to be 10 percent, we are currently paying a fee that amounts to 34-37 percent.”

According to international standards, royalty is calculated by taking income sales and the amount stated on the agreement into consideration - all of which are conducted transparently. However, the process has become reversed by calculating profits beforehand, highlighted the participants. Thus, they expressed their demand for appropriate decisions to be made by the working group in charge of calculating royalty for mining products. The Mongolian National Chamber of Commerce and Industry expressed support for the demand being put forth by coal mining companies and acknowledged the further risks being created as a result.

Today, October 27, the Ministry of Health reported 1,669 COVID-19 infections and 12 deaths in the 24 hours. In detail, 917 cases were reported in Ulaanbaatar city, with 752 cases in 21 provinces.

As of today, the cumulative infection tally in Mongolia increased to 353,504, with the death toll to 1,616. Currently, 17,688 people are receiving hospital treatment for COVID-19 whilst 52,698 people with mild symptoms are being treated at home.

As of today, October 27, the coverage of 1st dose is 69.3 percent or (2,254,866) and 2nd dose – 65.7 percent (2,138,490) of the total population. 393,631 people have received 3rd dose or a booster shot of COVID-19 vaccines in Ulaanbaatar city and 21 provinces.

The last year has seen a rise in resource nationalism — or the risk of thereof —in an extensive and fast-rising number of countries, including top mining countries, market analyst Fitch Solutions finds in its latest industry report.

While resource nationalism had been relatively contained geographically speaking in the past to Sub Saharan Africa, and localised countries such as Indonesia, it is spreading across the world and is now noticeable in SSA (the DRC, Mali, Zimbabwe, South Africa, Guinea), Latin America (Mexico, Peru, Chile), North America (the US), Europe (Russia) and Asia (Indonesia, Mongolia), Fitch reports.

The analyst has long argued that resource nationalism in the mining sector was going to remain a key feature of the sector. In the wake of covid-19, Fitch raised the probability of a rise in resource nationalism on a global basis.

Over the past 12 months, resource nationalism in top mining players has flared up around the world, mostly in emerging markets. Fitch expects this trend to continue over the coming few years, as underlying drivers of resource nationalism and government intervention will remain in play.

Resource nationalism can take several forms, including renegotiation of existing mining contracts to get better terms (currently witnessed in the DRC and Mongolia), increase in taxes or royalties on the mining sector (Chile, Peru, Russia), asset nationalization (forced equity transfers) or the threat of (Zambia, Mexico, Zimbabwe), in- country beneficiation (Indonesia), or export restrictions.

Drivers of resource nationalism remain in play in 2022

A number of factors will incentivise governments to consider intervening in the mining sector and tightening mining regulations, Fitch says, noting that several of those drivers have been clearly accentuated in recent quarters, mostly by the covid-19 pandemic.

The rally in mineral and metal prices in 2020-2021 has revived the interest in the mining and metals sector and boosted potential tax and royalty returns for governments. Fitch forecasts prices to remain elevated in 2022.

Improved prospects for the Green Energy Transition minerals such as copper, nickel, lithium, cobalt, among others, amidst the ongoing acceleration in decarbonisation efforts at multiple levels.

This is leading to a sharp rise in investment in new projects towards these materials, prompting governments to make sure their countries benefit from these trends, Fitch says.

Increased economic/fiscal hardships and rising social inequality in the wake of covid-19 are providing strong incentives for a rise in government intervention in the mining sector.

Another key driver of resource nationalism is political risk linked to elections, Fitch notes.

The recent election of left/ social-leaning governments, in the US and Peru for example is a factor behind potential changes to mining regulations in these countries. Sudden changes in governments, which have happened in some countries recently, also usually increase risks of a change in regulation. Mali for example, saw two coups in 2020-2021.

Finally, contested campaigns also increase nationalism rhetoric ahead of the elections in order to gain support, Fitch forecasts.

This happened in Zambia in 2020-2021 for example, when former President Lundu used a nationalistic rhetoric ahead of the August 2021 elections.

While elections happen on a regular basis, their convergence with economic hardships and social tensions over rising inequalities pose an increased risk of resource nationalism, the analyst asserts.

(Read the full report here)

Mongolia has many advantages which typically create initial interest from foreign investors. However, this initial interest will not lead to significant investment unless there is comprehensive change in the investment environment in Mongolia – which goes beyond one, however crucial – investment law.

The European Mongolian Chamber of Commerce and Industry (EuroChamber) is committed to contributing to stable and positive business and investment climate in Mongolia through its work as a united voice of European business community in policy dialogue with and advocacy towards the Government, Parliament and other public service institutions of Mongolia.

Earlier this autumn in September, the Prime Minister of Mongolia made a speech at the auspicious public-private investors consultative event to ensure that busines will pick-up again in the hopefully dubbed ‘post-pandemic’ period. In his speech the Prime Minister emphasized that Foreign Direct Investment will play a key role in reviving the economy of the country and vowed that all investors will have a more flexible legal framework to cooperate with and that foreign companies can continue business without restraints that were otherwise seen. In addition, he established special Investor protection council to oversee the process.

In support of these Parliament’s and Government’s efforts, EuroChamber has created a fundamental FDI Position paper and delivered it to the President, Parliament Speaker and Prime Minister, as well as to our partner - National Development Agency recently.

EuroChamber represents over 150 European, international and Mongolian member companies. Our ‘Foreign Investment Climate’ position paper is a result of several months of research work and draws on collective opinion and experiences of our members, and expertise of EuroChamber Board of Directors.

Our key findings and recommendation focus on:

1. Need for long term stability and predictability of the FDI investment climate

2. Need of change of attitude into “competing for FDI as a country”

3. Improving bureaucracy bottlenecks, esp. within the judiciary system, and rule of law

4. Improving public perception of FDI as positive contributor to socio-economic progress

5. Focus on connectivity and logistics infrastructure as a basis for sustainable economic growth

6. Fostering private sector's role as the engine of economic growth, with Government acting as regulator and a catalyst of prosperity and increased business and investment confidence.

This position paper covers in total 14 detailed themes to address in order to achieve a robust business and investment legal framework.

The timing of this coincides with several negative phenomena that have left the public in awe and fury, specifically the fuel shortage and recently highlighted ‘Tianjin Container Crisis’ (see previous press release from July 9th, 2021; https://www.eurochamber.mn/a/9(link is external)), which still remains an issue at large. Mongolia is a very open economy, dependent on foreign trade and connectivity, and thus can benefit from foreign direct investment, while decreasing economic and transport dependence on the two neighboring countries.

EuroChamber and our members have been working since our inception in 2019 on topics like Logistics and connectivity with Europe, Sustainable development and renewable energy, Tourism and hospitality, in support of economic diversification and better trade and investment results.

Now is an opportune time to implement comprehensive changes given the unity at Mongolia’s three levels of state political institutions and the strong interest in mining investment globally. While resource nationalism has been rising in other resource dependent economies (*), Mongolia’s openness and improvements to the investment environment are likely to get noticed positively by the international business community.

(* Verisk Maplecroft, a leading resource sector focused risk consultancy, stated that in 2020-21 resource nationalism rose in a large number (34) of countries included in the resource nationalism index).

About EuroChamber Mongolia

Leading European banks and companies active in Mongolia founded the EuroChamber in 2019 with the aim to foster Europe-Mongolian business relations, investment and trade. The founding member companies are: EBRD, ING Bank, MSM Group, Termigas Impianti Tecnologici and ARI Net Associates. The Chamber enjoys strong cooperation with the EU Delegation and national European diplomatic representations to Mongolia.

EuroChamber concluded a close Cooperation agreement with DMUV, FMCCI and BBG, thus now representing a united voice of European business in Mongolia and over 150 members. The mission of EuroChamber is to contribute to the improvement of business and investment climate in Mongolia through targeted advocacy and policy dialogue with the Government and other stakeholders.

For further information about the EuroChamber, including media requests please call 9009 1557, Mr. Erdenebileg L., Communications officer of the Chamber (email: info@eurochamber.mn(link sends e-mail)).

The China-Mongolia border city of Ejin Banner, one of the regions hit the hardest in the latest coronavirus flare-up, issued an emergency notice on Monday asking all residents and tourists in the city to stay indoors to prevent COVID-19 from spreading further, as the city reported another 12 new confirmed cases on Sunday, bringing the total to 43.

Health experts noted that exchanges of people and goods at the China-Mongolia port in Ejin Banner are highly likely to be the source of this round of infections, as almost all domestically transmitted cases were from tour groups.

The notice came into effect immediately after its release on Monday, requiring residents and tourists in Ejin Banner to report any abnormalities during their indoor stay to relevant personnel in charge.

Those who violate the rule and cause serious consequences will face severe punishments according to the law, the notice said, the China Central Television reported.

According to the regional health authorities, North China's Inner Mongolia Autonomous Region has registered 13 new local confirmed cases, 12 of which are from the Ejin Banner, mounting to a total of 62 in the region and 43 in the city. All of the cases are in designated hospitals for centralized treatment, and all close contacts have been put under quarantine for medical observation.

The sudden lockdown stranded nearly 10,000 tourists in a city with only 35,000 residents, Jimu News reported on Monday. While the city has announced on Thursday to offer free services of goods delivery to tourists including food, medicines, and epidemic prevention supplies, the region is still faced with a lack of daily necessities and medical supplies.

A 28-year-old traveler surnamed Tan came to Ejin Banner from Shanghai on October 17 and was asked to stay inside the youth hostel where she was staying.

Tan told the Global Times on Monday that the local government is providing free lunches, instant noodles, sausages and protective masks every day for stranded tourists. They can tell the management staff what they need in a WeChat group created by the local government and management staff are trying to satisfy their needs.

Tourists stranded in the youth hostel are emotionally stable. They talk, play cards and watch movies together. However, not knowing when they can leave, some have started to worry about the high cost of living in the youth hostel. Many also haven't brought enough clothes as the weather gets colder, Tan added.

Alxa League, the region that administers the Ejin Banner, urgently dispatched two batches of materials including facial masks, medical protective clothing, disinfectant, and winter supplies on Wednesday. The local Red Cross has issued a notice on late Sunday night, calling upon social donations to the region.

The latest COVID-19 resurgence, which has spread into 11 provinces in just one week, was triggered by a new imported source identified as being of the Delta variant, according to officials from China's top health authority on Sunday.

Ejin Banner has come under the spotlight amid the latest resurgence that has spread into 11 provinces in just one week, as almost all the domestically transmitted cases were part of tour groups traveling to this county-level division in the region that borders Mongolia, the latest transmission chains showed.

While the source has not been specified, officials from China's top health authority confirmed that the latest outbreaks were triggered by a new imported source of the Delta variant.

A Beijing-based immunologist, who requested anonymity, told the Global Times on Monday that exchanges of people and goods at the China-Mongolia port in Ejin Banner are highly likely to be the source of this round of infections.

"The outbreak is not likely to have been caused by cold-chain logistics as the port does not engage much in this kind of logistics. But as winter approaches, goods exchanges carry viruses in a cold-chain-like manner," he said, adding that the possibility of virus-carrying animals infecting humans cannot be ruled out. Further studies need to be carried out on the region's animals.

He further noted that Lanzhou, the capital city of Northwest China's Gansu Province, is likely to follow suit and implement a form of lockdown, as cases have surged recently in the city, which serves as a crucial transportation hub in Northwest China, an area where there tends to be greater risk of the virus spreading.

On Monday, Lanzhou announced to halt all unnecessary public venues, the city authorities said. All public gatherings are suspended and the city is asking residents to not leave their homes unless it's needed.

Gansu reported another four new confirmed patients on Sunday, including three in Lanzhou. The total local confirmed cases in the province have reached 45, of which 33 are from Lanzhou.

MOSCOW. Oct 25 (Interfax) - Gazprom and Mongolia have agreed on the route of the Power of Siberia 2 gas pipeline and discussed progress with a feasibility study for the project, the Russian gas giant said in a press release following a meeting between Vitaly Markelov, its deputy CEO, and Mongolian Deputy Prime Minister Sainbuyan Amarsaikhan, in Ulaanbaatar last week.

"The Government of Mongolia has already taken a number of measures to provide the project with state support. These include quotas for the hiring of foreign labor by the Gazoprovod Soyuz Vostok special-purpose vehicle, as well as the possibilities of using the regulatory frameworks of Russia and Gazprom during design and construction. In addition, the Mongolian Government has made a decision in principle to reserve land plots for the facilities of the gas pipeline," Gazprom said.

"Thus far, Mongolian contractors have completed in due time the required on-site surveys, engineering and environmental mapping, and route analysis for the gas pipeline, including its crossing points with the existing utilities," it said.

The meeting participants agreed upon the routing plan proposed by the special-purpose vehicle for use during the development of the feasibility study," it said.

Gazprom and the Government of Mongolia signed a Memorandum of Understanding On December 5, 2019. The document provides for a joint assessment of the feasibility of the project for pipeline gas supplies from Russia to China across Mongolia.

The feasibility analysis regarding the construction project for the Soyuz Vostok gas trunk-line was approved In April 2021. The Soyuz Vostok gas pipeline will become an extension of Russia's Power of Siberia 2 gas pipeline in Mongolian territory.

In the course of the feasibility analysis, the basic technical and technological parameters of the project were established. These include the optimal route for the gas pipeline in Mongolian territory, the pipeline's length and diameter, the working pressure, and the number of compressor stations.

The feasibility study regarding the construction project for the Soyuz Vostok gas trunk-line includes a detailed breakdown of the associated investment and operating costs. The study is being prepared by the Gazoprovod Soyuz Vostok special-purpose vehicle.

The Ministry of Health reported that 1,231 new cases of COVID-19 have been reported in the past 24 hours. Specifically, 739 cases were confirmed in Ulaanbaatar city, with 492 cases in rural regions.

As of today, the total number of confirmed COVID-19 cases in Mongolia stands at 351,835.

Furthermore, 11 new COVID-19 related deaths have been reported, raising the country’s death toll to 1,604. Currently, 17,806 p