On May 25, Ambassador of Hungary to Mongolia Dr. Borbala Obrusánszky visited the Mongolian Academy of Sciences (MAS) to discuss partnership in the science sector. Alongside being an Ambassador, she is also a scholar that has a doctoral degree specializing in Mongolian Studies.

During the meeting, MAS President D.Regdel said, “We were delighted to learn that a scholar specializing in Mongolian Studies had been appointed as the Ambassador to Mongolia. As you have a wide range of knowledge about the country, I believe that the bilateral cooperation between the two countries will be significantly enhanced. As of currently, Mongolia is planning to prioritize research in the biotechnology sector in the coming years. Thus, we wish to cooperate with Hungary in this field.”

Hungarian Ambassador Borbala Obrusánszky said, “I am pleased with the Memorandum of Cooperation signed between the Hungarian Academy of Sciences and the Institute of Archeology at the Mongolian Academy of Sciences on launching a large-scale archeological research named, ‘Belkhiin Uv (Heritage of Belkh)’ from June. Alongside this large-scale research, we are interested in cooperating in water management as well as advanced research in biotechnology as you have suggested.”

As the Hungarian Academy of Science marks Science Day in November of each year, the Ambassador also put forth a suggestion to mark the day in Mongolia this year.

Cryptocurrency miners, including HashCow and BTC.TOP, have halted all or part of their China operations after Beijing intensified a crackdown on bitcoin mining and trading, hammering digital currencies amid heightened global regulatory scrutiny.

A State Council committee led by Vice Premier Liu He announced the crackdown late on Friday as part of efforts to fend off financial risks. It was the first time China's cabinet has targeted virtual currency mining, a sizable business in the world's second-biggest economy that some estimates say accounts for as much as 70% of the global crypto supply. read more

Cryptocurrency exchange Huobi on Monday suspended both crypto-mining and some trading services to new clients from mainland China, adding it will instead focus on overseas businesses.

BTC.TOP, a crypto mining pool, also announced the suspension of its China business citing regulatory risks, while crypto miner HashCow said it would halt buying new bitcoin mining rigs.

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Crypto miners use increasingly powerful, specially-designed computer equipment, or rigs, to verify virtual coin transactions in a process which produces newly minted crypto currencies such as bitcoin.

"Crypto mining consumes a lot of energy, which runs counter to China's carbon neutrality goals," said Chen Jiahe, chief investment officer of Beijing-based family office Novem Arcae Technologies.

The crackdown is also part of China's stepped-up drive to curb speculative crypto trading, he added.

Bitcoin took a beating after the latest Chinese move, and is now down nearly 50% from it's all-time high. It shed as much as 17% on Sunday, before paring some losses and was last trading steady in Asia. Elsewhere, Ether fell to a two-month low on Sunday, down 60% from a record peak hit just 12 days ago,

Investor protection and money laundering are particular concerns of global financial regulators who are grappling with whether and how they should regulate the cryptocurrency industry.

The latest shakeout in digital currencies also stems from tighter scrutiny in the United States. Last Thursday, U.S. Federal Reserve Chairman Jerome Powell said they pose risks to financial stability, and indicating that greater regulation of the increasingly popular electronic currency may be warranted. read more

"Huobi always strives to abide by the evolving policies and regulations of each jurisdiction," Huobi said in a statement to Reuters.

BTC.TOP founder Jiang Zhuoer said in a micro blog post via Weibo that its mining business will no longer be open to mainland China, while HashCow said it would suspend new businesses in China in a notice to clients. BTC.TOP and HashCow could not be immediately reached for comment

DIRTY BUSINESS

The annual energy consumption of China's cryptocurrency miners is expected to peak in 2024 at about 297 terawatt-hours, greater than all the power consumption by Italy in 2016, according to a study recently published in scientific journal Nature Communications.

Chinese President Xi Jinping has pledged carbon neutrality by 2060.

China has already lost its position as a global cryptocurrency trading centre after Beijing banned crypto exchanges in 2017.

"Eventually, China will lose crypto computing power to foreign markets as well," BTC.TOP founder Jiang wrote, predicting the rise of U.S. and European mining pools.

Chen of Novem Arcae said the crypto craze, if not curbed, could turn into froth similar to the Dutch tulipmania in the 17th century - often regarded as the first financial bubble in recorded history.

"The only difference is that after the tulip bubble burst, there were still some beautiful flowers left," Chen said.

"But when the virtual currency bubble bursts, what would be left are merely some computer codes."

Canada’s Centerra Gold (TSX: CG) has sued the new external manager of Kumtor mine, which was seized by Kyrgyzstan last weekend, claiming that he conspired to steal the asset from the company while he was a director.

The Toronto-based miner alleges that former board member Tengiz Bolturuk secretly co-operated with Canadian and US lawyers, as well as with the government of Kyrgyzstan to stage the mine expropriation, it said in a statement.

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In the suit, filed in the Ontario Superior Court on Thursday, Centerra claims that Bolturuk, a dual Canadian and Kyrgyz citizen, breached his duty of loyalty and confidentiality to the company.

Bolturuk joined the board of Centerra December 2020 and resigned on May 17, 2021, exactly two days before Kyrgyz authorities announced he had been appointed as “external manager” of the miner’s wholly owned subsidiary, Kumtor Gold Company (KGC), which operated Kumtor until its seizure.

Centerra also claims that prior to the seizure of the mine, state-owned company Kyrgyzaltyn JSC tried diverting $29 million to an unauthorized bank account using a forged payment instruction sent to a third party.

Centerra sues ex director over Kumtor mine expropriation

Tengiz Bolturuk. (Image: Linkedin profile.)

Kyrgyzstan has said it took control of the Kumtor mine because of the “abdication of its fundamental duties of care” by Centerra, charging that it had suspended deliveries of materials needed to operate the mine and had disabled “critical sensors” used to monitor the stability of the mine and the movement of nearby glaciers.

“We can assure our shareholders that we are pursuing all avenues available to us in connection with recent events, including against any persons who violate their obligations to Centerra and its shareholders,” said Centerra CEO Scott Perry said in the statement.

“In the meantime, to deflect attention from their unprecedented and unprovoked seizure of the Kumtor Mine, Kyrgyz officials and Mr. Bolturuk continue to make unjustified claims related to environmental and safety conditions,” Perry added.

Uncertain future

This week’s events have left Centerra’s future in the balance. Kumtor is the largest of its three gold mines, accounting for over 50% of the company’s total output.

The operation is also crucial to Kyrgyzstan. The mine accounts for a fifth of the ex-Soviet country’s total industrial output and has produced more than 13.2 million ounces of gold between 1997 and the end of 2020. Last year’s output was slightly over 556,000 ounces.

Arbitration proceedings can take up to ten years and even if the Canadian miner succeeds, there is not guarantee it will be paid the stipulated amount.

Dalton Baretto of Canaccord Genuity said in a note last week that he wasn’t surprised by Kyrgyzstan’s move.

“We have been anticipating something like this since President Japarov took power on January 10; however, the speed and breadth of these reforms has caught us off-guard,” he wrote.

Centerra moves to protect investors after Kumtor seized

Kumtor is Kyrgyzstan’s biggest industrial enterprise, providing employment to more than 4,000 people. (Image courtesy of Kumtor Gold.)

The analyst added he believed the government has opened the door to what is likely going to be a multi-year degradation of the relationship between Centerra and the Kyrgyz State.

“While Centerra Gold will leverage all available avenues of international trade disputes, we believe these are unlikely to be effective in the long term,” Baretto said.

Kumtor has been the focus of a number of disputes between the company and the Kyrgyz government.

Japarov, who seized power after violent riots last October, once campaigned for the nationalization of the mine. After assuming the post, however, he said he no longer considered it necessary.

Kyrgyzstan has a history of popular uprisings and political turmoil, ever since gaining its independence after the collapse of the Soviet Union in 1991. Protesters had ousted two prior PMs in revolutions in 2005 and 2010.

May 24 (Xinhua) -- Mongolia registered 630 new COVID-19 cases in the last 24 hours, bringing the national tally to 53,100, the country's heath ministry said Monday.

The ministry said that the latest cases were local infections and that 5,849 samples were tested in the past day across the country.

Meanwhile, the number of recoveries rose by 410 in the last 24 hours to 46,748, while five fatalities were added to the death toll which stands now at 266, the ministry said in a statement.

Mongolia launched a nationwide COVID-19 vaccination campaign in late February, aiming to cover at least 60 percent of its population of 3.3 million.

More than 1,830,600 Mongolians have so far received their first dose, and over 773,900 have been fully vaccinated.

Terex last week named Newcom Mining Services LLC as an authorized distributor for Terex Construction, Cranes, Aerial Work Platforms and Materials Processing equipment in Mongolia. Newcom Mining now provides equipment sales, applications expertise, and service and parts support for a wide range of Terex equipment used in construction, infrastructure, quarrying, mining, refining, recycling, energy and utility industries.

“Over the past few months, we have seen increased demand in Mongolia due to the local investments in mining and infrastructure,” said Steve Filipov, president of developing markets for Terex Corp. “Supplying the Mongolian market with the exact equipment it needs, and providing the best local service to our customers, are major priorities for Terex.”

"Our first year in business has been very rewarding. We have nearly completed construction on what will be the largest rental facility in the Gobi Desert,” said John Karlsen, CEO of Newcom Mining Services. “In addition, we are excited to become the authorized Terex dealer in Mongolia. We are proud to bring this world-class manufacturer to Mongolia, and glad that they have decided to be represented, here, by a Mongolian-owned company."

Newcom Mining Services is a construction and mining equipment rentals and sales company established in July 2011 by Newcom to contribute to the infrastructure and economic development of the Gobi region. The company offers a full range of services including rentals, technical support, operators and logistical services.

Terex Corp. is a diversified global manufacturer of a broad range of equipment for many applications, including the construction, infrastructure, quarrying, mining, shipping, transportation, refining, energy, utility and manufacturing industries.

On 24 May, Oyu Tolgoi LLC, Mongolia's largest copper and gold mining company - a strategic partnership between the Government of Mongolia, Turquoise Hill Resources and Rio Tinto, released its latest performance scorecard, highlighting key performance metrics for the first quarter of 2021, providing an update on the underground development, and its ongoing COVID-19 mitigation measures.

Some highlights from the performance scorecard are:

Continued its globally competitive safety performance

Strengthened our COVID-19 response and mitigation measures

Maintained its highest water use efficiency per tonne of ore production

In-country spend reaches US$12.3 billion

Spent US$98 million on national procurement

“The first quarter of 2021 has been challenging due to the COVID-19 global pandemic and increase of community cases in Mongolia. We are constantly adapting to the changing circumstances to prioritize the health and safety of our workforce, suppliers and communities.” the update says.

A site-wide lockdown was implemented in March for two weeks to mitigate the potential COVID-19 transmission risks on site. Self-isolation controls were quickly mobilized at camp. Currently, site-wide COVID-19 testing is in place and preparations to rollout a vaccination programme are progressing.

Oyu Tolgoi chief executive officer, Armando Torres, said, “We would like to express our gratitude to the Government of Mongolia, all levels of the State Emergency Commission, the Ministry of Health, the Ministry of Mining and Heavy Industry, and all other relevant agencies and frontline personnel working hard to keep us safe during this unprecedented time. I would especially like to thank our employees, communities, contractors, and suppliers for their hard work, perseverance, unwavering commitment and ability to quickly adapt to rapidly evolving situations.”

Despite the challenges, Oyu Tolgoi has maintained its business continuity while protecting its people and communities. COVID-19-related limitations around the movement of goods and people, border crossing restrictions, and enhancing our on-site controls, however, have impacted operations including the underground development, and copper concentrate shipments. First-quarter shipments have been affected by Chinese border restrictions due to increased cases of COVID-19.

“We declared force majeure on shipments from 30 March and continue to work closely with authorities and our customers to manage the risk of supply chain disruptions. Oyu Tolgoi vaccinated all its copper concentrate shipment drivers and logistics support teams on site, and has a number of controls in place related to disinfecting vehicles and testing to mitigate transmission risk. We partially resumed cross-border concentrate shipments into China on 15 April, however, the situation continues to be fluid with the COVID-19 resurgence in Mongolia.”

Operational Update

Prioritised the safety and achieved an All Injury Frequency Rate (AIFR) of 0.20 per 200,000 people/hours worked. This still indicates Oyu Tolgoi’s strong safety performance among other operations of Rio Tinto where the average AIFR stood at 0.35 for the same quarter.

96 percent of Oyu Tolgoi’s workforce are Mongolian citizens.

Paid US$417 million in the form of taxes, fees and other payments to the Government of Mongolia in the first quarter of 2021. Since 2010, Oyu Tolgoi has paid US$3.3 billion in taxes, fees and other payments, including VAT to Mongolian suppliers.

Partnered with 494 suppliers in the first quarter of 2021, including 431 national businesses, accounting for 77 percent of the total operations procurement spend.

Q1 2021 Performance Scorecard can be viewed here.

Production Update

Mined copper production from the open pit was 29 percent higher than the same quarter of 2020 with the anticipated move to higher grade from the open pit, leading to higher head grade and copper recovery. In the first quarter, pit phasing delivered higher gold production (+457%) compared to the same period in 2020. Access to higher copper and gold grades is expected to continue throughout 2021.

However, the open pit wall failure experienced in the fourth quarter of 2020, combined with the cumulative effects of COVID-19 mitigation measures, have resulted in a downward revision in gold production guidance for 2021, from 500,000 – 550,000 ounces to 400,000 to 480,000 ounces, while the copper guidance range has expanded from 160,000 – 180,000 tonnes to 150,000 – 180,000 tonnes.

On May 20, officials of the Civil Aviation Authority of Mongolia (MCAA) held a meeting with representatives of foreign airlines that conduct regular scheduled flights in Mongolia, including Korean Air, Air Busan, Asiana Airlines, Turkish Airlines, Air China, and Aeroflot.

Per the Government Resolution No. 134 issued in 2020, the Chinggis Khaan International Airport was decided to be opened on July 1, 2021.

In connection with the decision, the Minister of Road and Transport Development approved a comprehensive plan to ensure preparations for the opening of the new airport. Thus, MCAA First Deputy-Director B.Altantsom organized the meeting as head of the working group in charge of moving.

At the meeting, MCAA officials introduced the comprehensive plan for preparing the new airport’s opening, current state of the civil aviation sector, and information about the summer flight schedule, and preparations being made to lift the restrictions that are currently in place for passenger traffic coming through the air checkpoint.

MCAA Deputy-Director B.Altantsom expressed gratitude for providing comprehensive support during the COVID-19 pandemic, and gave a briefing on the pandemic’s effect on the civil aviation sector.

Compared to 2019, the number of international flights decreased by 86 percent, and domestic flights decreased by 34 percent in 2020. With the total number of flights decreasing by 74 percent, flyovers also decreased by 47 percent, he mentioned. He then informed about the reason behind constructing the new international airport of Ulaanbaatar city, and gave details regarding the new airport including passenger capacity, fire safety, runway length, area of the terminal complex, and parking spaces in comparison to the Buyant-Ukhaa International Airport.

In connection with moving operations to the Chinggis Khaan Airport starting from June 1 per the comprehensive plan developed by 21 organizations including the Ministry of Road and Transport Development, government organizations, MCAA, domestic air carriers, and the New Ulaanbaatar International Airport LLC, it was also informed that regulations are currently being developed regarding the entry of passengers, transport vehicles, and goods and products during the COVID-19 pandemic as well as a guideline for preventive measures against infection for international flights.

An updated summer flight schedule will be approved for the duration between July 1 and October 30, 2021. However, we will prioritize keeping the previous flight schedules of airlines that have operated in the country for numerous years, said MCAA First-Deputy Director B.Altantsom.

During the meeting, representatives of the foreign airlines expressed that they will provide comprehensive support and cooperate with the plans to put the new Chinggis Khaan International Airport into operation.

Mongolia’s quadrennial presidential election of 2021 is scheduled on June 9, Wednesday. The General Election Commission (GEC) has approved the candidates nominated by three political parties and coalitions with seats in the State Great Khural.

On May 24, today, the GEC handed over the candidacy cards to the approved presidential candidates, who are Khurelsukh Ukhnaa from the ruling Mongolian People Party, Erdene Sodnomzundui from the Democratic Party and Enkhbat Dangaasuren from The Right Person Electorate Coalition.

After receiving his candidacy card, Former Prime Minister of Mongolia and Chair of the Mongolian People’s Party U. Khurelsukh pledged that if elected, he will be working towards firstly, strengthening the social justice, and independent legislative and judicial systems and secondly, strengthening the rule of law in the government with respect to parliamentary governance, human rights and free market economy.

“Continuing the past achievements on providing benefits from natural resources to Mongolians, I will establish sovereign wealth fund, carry out development projects and enable each and every citizen of the country to reap equal benefits from natural wealth as dividends. I also vow to pay more attention on reaffirming Mongolia’s reputation on an international level and creating a country with a ‘powerful economy’ as reflected in the government’s Vision – 2050 policy guideline, and maintaining the unity of our nation.” He then added that his election platform was developed on scientific basis, the government’s four-year action plan, Vision – 2050 long term policy document and the Constitution.

Presidential candidate from the Democratic Party S. Erdene “I feel confident that I can be a president who could overcome the difficulties encountered by the nation by exerting all my efforts. I nominated myself for the presidency as it is now my responsibility to protect the democracy”. He continued that the main principle of his platform for the election will be strict compliance with ‘freedom’.

Third candidate for the forthcoming presidential election from The Right Person Electorate Coalition, D.Enkhbat delivered remarks to the public as well, confirming that he will be working to strengthen the democracy, perfect the economy and society, improve livelihoods of the Mongolia people, establish justice and fight against corruption while contributing to the growth of Mongolia and creating a new Mongolia of the XXI century based on knowledge, skills and technology. His campaign slogan is ‘We all Mongolians can’ - Mongolian herders can, Mongolian engineers can and Mongolian youths can, he explains.

With the announcement of the final list of candidates, the official election campaigning launched today to run through the end of June 7, Monday – 24 hours prior to the polling day. The candidates’ declaration of income and assets as well as action plan are placed open to the public by the National Audit Office and the Independent Authority Against Corruption from this day.

In line with the law on presidential election, the election campaigning will take place for 15 days and during this period, the candidates have the opportunity to meet with voters and political parties and their candidates running for the presidential election will undertake eight types of permitted campaign activities, including distribution of promotional materials to voters, political advertising on radios, TVs and online, outdoor billboard advertisements and operating campaign offices.

In order to increase trade and investment between Mongolia and Japan, the National Development Agency, Japan External Trade Organization (JETRO), Embassy of Mongolia in Japan, International Finance Corporation (IFC), and Irbis Ventures hosted "Invest in Mongolia - Tokyo 2021", an online Mongolian-Japanese business forum on May 20. The Ministry of Foreign Affairs of Mongolia and the Ministry of Economy, Trade and Industry of Japan (METI) also cooperated as supporting organizations.

During the forum, Japanese investors and entrepreneurs were introduced to Mongolia’s economic cooperation, investment, and business climate reform plans, and the success stories of Japanese investors and entrepreneurs who have invested in Mongolia. In particular, CEO of Mobicom Corporation Tatsuya Hamada, CEO of And Global B.Khos-Erdene shared their experiences on investment and Board Member of Newcom Group E.Orchlon shared his views on the future and opportunities of Mongolia’s renewable energy sector.

Furthermore, projects selected and enhanced through the Project Capacity Building Program, carried out in cooperation with the National Development Agency, Irbis Ventures, and GMG Consulting, have been presented at the forum based on their high investment potential. For instance, introduction of projects by companies such as Chimege Systems (software, voice tech, AI/ NLP), Solongo Kharaa Company (health), Urban Lily (agriculture), Zoson Fashion (light industry) and “Mongolian Artisan Cheesemakers Union” attracted interest of Japanese investors.

Over 400 Japanese and Mongolian delegates attended the forum, representing the areas including banking and finance, construction, food production, light industry, other manufacturing sectors, transport, trade and education.

Incidentally, Mongolian-Japanese trade turnover reached USD 416.5 million by the end of 2020, a decrease of 30.7 percent compared to the previous year. Mongolia’s exports to Japan reached USD 9.68 million and imports reached USD 406.7 million in 2020, which is a year on year decrease of 38.6 percent and an increase of 30.6 percent respectively. The main export items were combed cashmere and cashmere products, while the main import items were passenger vehicles, trucks, public transport vehicles, rice, and synthetic fabrics.

Japan’s foreign direct investment in Mongolia from 1990 to 2020 was about USD 1 billion, ranking ninth out of 123 countries. Japan accounts for 4.4 percent of foreign direct investment in Mongolia. Trade and catering accounted for 45 percent of investment; 8.23 percent was in light industry; 14 percent was in construction, engineering, and construction materials; 9.6 percent was in banking and finance; and 23.17 percent was invested in other sectors. There are 670 Japanese direct foreign investment companies registered in Mongolia. Trade and catering account for 63.13 percent of these enterprises (423), light industry for 10.30 percent, banking and financial activities for 7.01 percent, tourism for 2.69 percent and other sectors for 16.87 percent.

May 20 (Xinhua) -- Mongolia on Thursday decided to further ease COVID-19 restrictions imposed in early April to contain the COVID-19 pandemic in the country.

Major markets, hotels, restaurants, resorts, tourist camps and saunas across the country can resume their operations at 50-percent capacity starting Saturday with strict observation of social distancing guidelines and wearing face masks, Tseden-Ish Ganzorig, head of government press office, told a press conference.

However, only people who have received two doses of the COVID-19 vaccine will be allowed to enter these units, said Ganzorig.

The ban on all kinds of gaming, religious and entertainment services, bars, and mass gatherings such as sports events and cultural activities across the country will stay unchanged, according to the official.

Mongolia imposed a nationwide lockdown on April 10 to curb the steep surge in local COVID-19 cases, and the lockdown restrictions have been eased gradually since May 8.

As of Thursday, the Asian country has registered 50,618 COVID-19 cases with 247 related deaths. Most of the total confirmed cases were locally transmitted.