Mongolia’s Parliament has initiated public consultations to amend the country’s constitution and adopt a parliamentary system of governance. Lawmakers are campaigning about the need to update the constitution and strengthen democracy while touting the virtues of the Westminster system. If the amendment is ratified, the president would be stripped of much of his power.

A new parliamentary system could help improve governance, ensure regulatory stability and promote more accountability, transparency and participation in major economic decision-making.

This should make it easier for businesses operating in Mongolia and contribute more to broader economic growth. If accepted, the proposed changes would end the long-standing debate on whether Mongolia should have a presidential or parliamentary system of governance.

Parliament Speaker Gombojavyn Zandanshatar Source: The State Great Hural (Parliament) of Mongolia

What You Need To Know:

The current semi-presidential system in Mongolia has provided opportunities for the president to check and balance the prime minister and Cabinet. Under this arrangement of cohabitation, a publicly elected president serves alongside a powerful prime minister.

Mongolia’s governance has been plagued with friction and stalemates lately. This was most recently evidenced during a showdown between then-President Khaltmaagiin Battulga and then-Prime Minister Ukhnaagiin Khurelsukh from 2020-2021.

Public opinion over the last decade has favored a stronger leader in the form of a president. With one-party domination since 2016, the argument has now shifted toward modernizing governance and rebalancing political power to stabilize the economy in view of Mongolia's current financial and geopolitical hardships.

The most recent constitutional amendments in 2019 transferred some powers from the president to the prime minister. The ruling Mongolian People’s Party (MPP) aims to reduce the president to a ceremonial figurehead, bolster parliamentary governance and elevate the prime minister, who is also a party head. Under this scenario, Parliament would elect the president, as is the case in some other countries, including Germany.

President Ukhnaagiin Khurelsukh has not revealed his thoughts about the new proposals to change the constitution, but he is a known supporter of parliamentary democracy. His one-time term ends in 2026, so new constitutional reforms will likely not affect him.

The MPP hopes to push for constitutional changes before the country’s parliamentary elections in June 2024.

The remainder of 2022 and early 2023 are expected to be crucial to consult and educate the public about the benefits of the Westminster system. Constitutional referendums are not being considered given the MPP’s supermajority control of Parliament.

Lawmakers are considering enlarging Parliament to bolster governance. The latest thinking is to double the current number of members from 76 to 152 to reflect population growth since 1992. Half of the expanded Parliament would be elected on a proportional basis and the other by the winner-take-all method.

Reintroducing a proportional representation mixed electoral system, which failed to get support in 2019, is now gaining more traction. The opposition and smaller political parties hope this would help them win seats in Parliament and encourage more political diversity.

The prime minister wants to increase the current cap on the number of lawmakers who can enter his Cabinet. Two Cabinet portfolios are vacant, and non-parliamentarian ministers are perceived to be weak when challenged in the parliamentary sessions.

A rule prohibiting constitutional changes before 2027 remains a significant obstacle to adopting parliamentary governance. The MPP aims to change that rule during public consultations.

Not everyone in Mongolia supports constitutional changes. Some critics strongly oppose reintroducing the proportional voting system. They allege that corrupt politicians can be hidden within party lists, therefore diminishing voters’ say.

Several political elders have appealed to the Constitutional Court and accused Parliament of conducting an unconstitutional public discussion. They have argued that basic rules should not be easily or frequently changed.

The main opposition Democratic Party said the government should prioritize economic problems over constitutional changes and has accused the government of wasting time.

The European Union has agreed on ground-breaking rules for regulating crypto assets, EU lawmakers said on Thursday, as the rout in bitcoin piles pressure on authorities to rein in the sector.

Globally, crypto assets are largely unregulated, with national operators in the EU only required to show controls for combating money laundering.

Representatives from the European Parliament and EU states thrashed out a deal on the markets in crypto assets (MiCA) law, which is expected to come into force around the end of 2023.

"Today, we put order in the Wild West of crypto assets and set clear rules for a harmonized market," said Stefan Berger, the center right lawmaker who led negotiations on behalf of the parliament.

"The recent fall in the value of digital currencies shows us how highly risky and speculative they are and that it is fundamental to act," Berger said.

MiCA will be the first comprehensive regime for crypto-assets in the world and will contain strong measures to guard against market abuse and manipulation, added Ernest Urtasun, a Green Party lawmaker in the parliament.

The new law gives issuers of crypto assets and providers of related services a "passport" to serve clients across the EU from a single base, while meeting capital and consumer protection rules.

The United States and Britain, two major crypto centers, have yet to approve similar rules.

Crypto assets came under pressure after the collapse of TerraUSD and luna tokens last month, with major US cryptocurrency lending company Celsius Network this month freezing withdrawals and transfers.

Bitcoin collapsed this month to around $17,600, and was trading around $18,900 on Thursday, well below its late March level of $48,200 as investors nurse losses.

Negotiations on Thursday focused on issues such as supervision and energy consumption of cryptoassets.

"We have agreed that crypto asset providers should in future disclose the energy consumption and environmental impact of assets," Berger said.

EU states will be the main regulators for crypto companies, though the bloc's securities watchdog ESMA will have powers to step in if investor protection or financial stability is threatened, lawmaker Urtasun said.

Celebrated on the 3rd of July, International Plastic Bag Free Day, is a global initiative that aims to curb the use of plastic bags and promote a living without throwaway plastic goods by looking for safer alternatives. Although plastic goods have made our life more convenient, their negative environmental impact is tremendous throughout the life cycle.

Countries in East Asia and the Pacific are at the center of the plastics crisis, with some countries in the region representing the biggest contributors and others disproportionately affected by the impacts of marine plastic debris on their shores, as reported by the WorldBank.

In this context, Mongolia is also struggling to implement clear binding policies and targets on plastic reduction and single-use plastics bans. Although in 2018 the Government of Mongolia banned the use, sale, import and production of single-use plastic bags thinner than 0.035 mm, the latter are still being widely used in the country.

The EU-funded SWITCH-Asia Sustainable Plastic Recycling in Mongolia (SPRIM) project is working towards beating plastic pollution through the adoption of circular approaches.

The European Union is taking action to tackle plastic pollution and marine litter and to accelerate the transition to a circular plastics economy in policy and practice. In Mongolia, plastic waste is becoming an issue due to both a lack of plastic recycling awareness among the general public and the absence of official plastic waste sorting, collecting and recycling mechanisms. Through the SPRIM project the EU Delegation is aiming to develop a model for sustainable plastic recycling at both city, district and sub-district levels. We hope this pilot could then serve as model for nationwide replication, said H.E. Ms Axelle Nicaise, Ambassador-designate of the European Union to Mongolia.

As stated in its Zero Waste and Circular Economy: The Way Forward - Position and Recommendations Report (2021), SPRIM’s position is to:

1. Be transparent about the limits and drawbacks of recycling to avoid counterproductive disincentive effects on waste reduction;

2. Condemn and forbid misleading use of the term “recyclable” when recyclability is only theoretical and limited operational recycling processes are implemented in Mongolia;

3. Push industries to systematically switch to reusable packaging and organize reusable packaging take-back;

4. When products cannot be made reusable:

a. Promote priority use of recyclable materials;

b. Ban non-recyclable materials when a recyclable alternative exists;

c. Condemn designs that make effective recycling impossible, even when theoretically recyclable materials are used;

5. Push the packaging industry to:

a. Reduce the range and number of materials they use, especially in terms of plastic types; stop making multi-material packaging that can’t be effectively recycled;

b. Standardise packaging by type of product for all companies and brands, both for reusable and recyclable packaging;

6. Encourage people to adapt their consumers’ habits so as to reduce waste generation in the first place, and/or to favor reusable items and packaging;

7. Call for extensive waste sorting not just by households (who actually produce less than 10% of all waste) but by all waste producers, especially industries (which produce most of our trash);

8. Use extensive sorting not only for direct recycling but also to produce data so as to better understand what non-recycled products and brands currently make up most Mongolian waste and subsequently advocate for adequate measures to be taken.

In practice, how does the SPRIM project act on plastics issues?

To combat plastic pollution, SPRIM is raising public awareness on the 5Rs: Refuse, Reduce, Reuse, Repurpose, Recycle. The project is also building capacities of civil society organizations that are conscious about plastic waste management and is implementing pilot initiatives to better manage plastic waste in rural and urban areas in Mongolia. Furthermore, the team has conducted in-depth assessments and research studies to figure solutions that can support local MSMEs in the plastic recycling industry.

The first fully operational waste management facility was established in the rural area of Khishig-Undur soum of Bulgan province:

In March 2022, the first fully operational waste management facility was established in Khishig-Undur soum (rural area) of Bulgan province of Mongolia. Numerous soum inhabitants have adopted the habit of delivering their sorted waste at the new facility rather than throwing it directly into the landfills.

Copper’s second quarter performance was the worst in more than a decade, but the start of Q3 saw no let up in the bloodletting.

A rebound in manufacturing in China, which consumes more than half the world’s industrial metals, was not enough to offset weakness in the copper market after data released on Friday showed inflation in the eurozone jumping to a record high.

Copper for delivery in September fell over 4% from Thursday’s settlement, touching a low of $3.55 per pound ($7,834 per tonne) in morning trade on the Comex market in New York, the lowest since February 2021. The most-traded August copper contract in Shanghai ended the day 4% weaker at 61,630 yuan or $9,190.

In London aluminium slipped 1.9% to $2,400 a tonne, zinc dropped 3.5% to $3,045 bringing its losses for the week to 9% and nickel eased 2.4% to $22,150. Tin fell 4% to $25,400 on Friday, but for the week the metal widely used in the electronics sector managed to gain 6%. Lead was the only gainer on Friday – up nearly 1% to $1,924.

Further to fall

Chinese PMI data showed manufacturing activity hit a 13-month high in June, but in a note Capital Economics said market participants, like the research firm itself, are assuming that the indicator “reflects the lifting of lockdown restrictions rather than an economic revival”:

“It is increasingly clear that concerns about demand are taking precedence of supply issues in the metals markets.

“The prices of all the base metals fell by over 20% in the second quarter, despite still high energy prices (which raise the cost of metals production), ultra-low exchange stocks and, in most cases, subdued refined output.

“We think that prices have further to fall in the second half of the year, but we suspect that the big falls are now behind us.”

Shares of major copper producers came under renewed selling on Friday. Units of BHP trading in New York lost 4.8%, Rio Tinto gave up 3.3%, Vale traded down 4.6% while Glencore was the worst performer with a decline of 5.6% in early afternoon trade in New York.

Global oil prices could reach a “stratospheric” $380 per barrel if Western penalties prompt Russia to impose retaliatory output cuts, according to JPMorgan Chase analysts.

“The most obvious and likely risk with a price cap is that Russia might chose not to participate and instead retaliate by reducing exports,” the analysts wrote in a note seen by Bloomberg.

“It is likely that the government could retaliate by cutting output as a way to inflict pain on the West. The tightness of the global oil market is on Russia’s side.”

In late June, US President Joe Biden announced plans to put an embargo on insuring ships transporting Russian oil, as part of sanctions against Moscow over its attack on Ukraine.

Earlier, the Group of Seven nations agreed to explore a possible price cap on Russian oil to limit Moscow’s ability to generate revenue from sales.

First introduce by US Treasury Secretary Janet Yellen, the idea was then taken up by the G7, which is considering an embargo on Russian seaborne crude unless it is purchased at or below a price to be agreed with international partners.

JP Morgan Chase experts noted that sanctions-hit Russia can afford to cut daily crude production by up to five million barrels without excessively damaging the economy, given Moscow’s robust fiscal position.

Top international and domestic companies have been selected as the general contractor for the EPC contract for 10MW Moron solar PV, which is being implemented by the Ministry of Energy and funded by the Asian Development Bank (ADB) within the framework of the Upscaling Renewable Energy Sector Project. In accordance with the terms of the contract, Golomt Bank, in cooperation with the Industrial and Commercial Bank of China, issued Green guarantee on behalf of the General Contractor.

The project will support the Government of Mongolia’s policy of decarbonizing the energy system in remote and less-developed regions; and strengthen institutional capacity to implement the State Policy on Energy, 2015–2030, and Mongolia’s Nationally Determined Contribution under the Paris climate accord, which set the targets of increasing the share of renewable energy capacity in total installed capacity to 20 percent by 2023, and to 30 percent by 2030. The project will develop 40.5MW first-of-its-kind distributed renewable energy system with a variety of renewable energy technologies supplying clean electricity and heat in geographically scattered load centers in the less-developed region of western Mongolia. The subprojects will be implemented in two phases: core subprojects with 25.5MW of capacity in the first batch (2019–2022), and noncore subprojects with 15MW of capacity in the second batch (2020–2024).

Among ADB’s developing member countries, Mongolia has the largest energy dependence on coal and 93 percent of Mongolia’s energy production comes from combined heat and power plants that generate energy by burning coal. Once completed, the project will generate 99 gigawatt-hours of clean electricity annually, enabling the country to reduce its carbon dioxide (CO2) emissions by 82,789 tons per year, thereby delivering clean electricity to 70,000 households.

Golomt Bank continues to support domestic and foreign green projects with customized financing structures and services within the framework of an environmentally friendly and sustainable financing policy.

Source: Golomt bank

Among consumers in developed countries, it is becoming more and more common to choose environmentally friendly and ethical products, and Mongolia has a potential to exploit this market niche. According 'Step Eco Lab Project' implemented by European Union, processing plants and customers are increasingly looking for eco-friendly, sustainable, certified and traceable raw materials. 85% of European retailers say sales of sustainable products have increased over the past five years, and 92% expect sales of sustainable products to further increase over the next five years. For some consumer goods in the US markets, sales of sustainable products have surpassed sales of other products and 47% of US consumers expressed willingness to pay higher prices for sustainable products. At a time when sustainable raw material preparation and production are becoming a competitive factor in the luxury goods market, there is a need to develop traceable and transparent supply chain and present meaningful environmental footprint report/carbon footprint report that meet the needs of responsible consumers and the market.

With vast grasslands that occupy 70% of total territory and nomadic herding heritage, livestock husbandry is one of the economic comparative advantages of Mongolia. In March 2020, Mongolia has adopted standard MNS 6891:2020 for Responsible Nomads Code of Practices for sustainable nomadic livestock production. The standard and its traceability system aims to ensure a responsible nomadic herding at the primary-herder households level, providing buyers with the tools to appreciate best practices of nomadic herding maintaining healthy rangeland or improving their management and better animal care, and to ensure transparent chain of custody from a herder household to final product, and provide customers with a guarantee that the raw materials of the products they buy are truly from Responsible herder households.

Mongolian Rangeland Coalition identifies the competitive marketing strategy of Mongolian livestock products in the international market as sustainable, traceable, high quality and ethical and aims to support and enable stakeholder collaboration to produce and supply traceable, value-added, sustainably processed products.

-RMTS – Raw Material Traceability System is a smart phone application which can be downloaded from Play Store and App Store

-By clicking on the camera icon, the app allows you to scan the QR code on the product label which is originated from the ear tag code of a livestock

-RMTS verifies that product is manufactured from raw materials, which meet above indicators

Responsible Nomads employs six key indicators that herders must comply with to continue involvement in the Green Pasture Project. These include: responsible actions of herders, maintenance and improvement of rangeland health, keeping up to date with animal health services, ensuring animal welfare, promoting environmental stewardship, and traceability of livestock. Each of these indicators are meticulously measured for each herder through a mobile phone application, recorded within the Responsible Nomads database system. At the same time, the traceability system developed for Responsible Nomads provides end-customers with a guarantee that raw materials have been produced by nomadic herders who maintain responsible rangeland and herd management practices and care for the wildlife sharing the rangelands.

As of May 2021, 44 000 herders and 86 herders’ marketing cooperatives have registered in the system. In 2019, about 180 tons of cashmere were sold through the system. In 2020, it has increased by two fold- 360 tons of cashmere were sold certified through the system and 15 tons were sold to international buyers. The Responsible Nomads traceability system shows incredible promise in promoting and monitoring sustainable rangeland and livestock management.

Ts. Enkh-Amgalan, Mongolian Rangeland Coalition

At least eight children have died and anther five seriously injured after falling from horse in Mongolia so far this year, local media reported Thursday, citing a statement by the country's National Police Agency.

The statement came as issues related to rights and safety of child jockeys are being raised at a time when the Mongolian national holiday Naadam, which features horse racing, archery and wrestling, is approaching.

Inscribed in UNESCO's List of the Intangible Cultural Heritage of Humanity, the official holiday is celebrated from July 11-15.

In 2018, the Mongolian government decided to ban horse races in winter.

According to the Rules of the National Naadam Horse Racing, the minimum age of child jockeys is seven years old. However, this rule does not apply to all horse races organized throughout the year in the country.

China's energy bureau gave nod to construction of a new coal mine in Inner Mongolia after several mines were allowed to expand capacity, in a move to boost coal supply and bring down fuel costs for power generation.

Dongping coal mine, located in Zhunger mining area in coal-rich Inner Mongolia, is designed with annual production capacity of 4 million tonnes as well as a same-scale coal washing plant, according to an official document issued by the National Energy Administration.

The move will help further push ahead with construction of Shendong coal production base, one of the 14 large coal bases in China, which consists of Shenfu and Dongsheng mining areas.

A total 20.3 million tonnes per annum (Mtpa) of capacity expansion has been put on agenda in Inner Mongolia since this year, in response to the central government's call to increase coal production and boost capacity.

In 2021, Inner Mongolia added 169 Mtpa of coal capacity through capacity expansion at 115 coal mines in five batches.

(Writing by Tammy Yang Editing by Harry Huo)

For any questions, please contact us by inquiry@fwenergy.com or +86-351-7219322.

A giant onshore wind power project with a generation capacity of 1 million kilowatts was put into operation after being connected to the national power grid for electric power supply in the Xing'an League of north China's Inner Mongolia Autonomous Region on June 29, 2022.

It signifies the entry into operation of China's first 1 million kilowatt-grade single-unit onshore wind power project. The mega project has been built and installed in the first phase of China's Xing'an League Three Million Kilowatts Wind Power Base built by China General Nuclear Power Group (CGN). The construction of the other two 1 million kilowatt-grade onshore wind power projects in the region is still underway.

The first 1 million-kilowatt project, which is a mountainous wind farm, is capable of generating more than 3 billion kWh on-grid electricity annually. It can save more than 920,000 tonnes of standard coal and reduce nearly 2.5 million tons of carbon dioxide emissions every year.