May 19 (Xinhua) -- The Mongolian government has decided to provide one-time financial assistance of 10 million Mongolian Tugriks (about 3,508 U.S. dollars) to each athlete who qualified for the Olympic Games, the government's press office said Wednesday.

So far, 30 Mongolian athletes have qualified for the Tokyo 2020 Olympic and Paralympic Games to be held in Tokyo, Japan this year, the press office said in a statement.

The athletes are expected to compete in 12 sports.

The national currency in circulation reached MNT 1.0 trillion at the end of April 2021, increased by MNT 78.2 billion (7.8%) from the previous month, and increased by MNT 225.7 billion (26.3%) from the same period of the previous year.

At the end of April 2021, the time deposit in domestic currency amounted to MNT 14.7 trillion, increased by MNT 524.1 billion (3.7%) from the previous month, and increased by MNT 4.1 trillion (38.6%) from the same period of the previous year.

In terms of type of time deposit in domestic currency, 88.6% (MNT 13.0 trillion) was individuals’ deposits and 11.4 percent (MNT 1.7 trillion) was deposits of enterprises. The time deposits in foreign currency amounted to MNT 4.5 trillion, increased by MNT 122.3 billion (2.8%) from the previous month, and increased by MNT 747.0 billion (19.9%) from the same period of the previous year.

In April 2021, consumer price index at the national level increased by 2.4% from the previous month, by 5.5% from the end of the previous year and by 5.6% from the same period of the previous year.

The 5.6% increase in consumer price index from the same period of the previous year was mainly contributed by 12.4% increase in prices of food and non-alcoholic beverages group (non-alcoholic beverages by 5.6%), 2.2% increase in prices of alcoholic beverages and tobacco group, 3.2% increase in prices of clothing, cloth and footwear group, prices of housing, water, electricity and fuels group increased by 6.3% (electricity, gas and other fuels increased by 7.6%), 4.3% increase in prices of medicine and medical service group.

The 5.5% increase in consumer price index from the end of the previous year was mainly contributed by 12.8% increase in prices of food and non-alcoholic beverages group, 1.2% increase in prices of alcoholic beverages and tobacco group, 14.9% increase in prices of housing, water, electricity and fuels group, 1.8% increase in prices of medicine and medical service group, 1.0% increase in prices of transport group. The 2.4% increase in CPI from the previous month was mainly due to resulted from 4.3% increase in prices of food and non-alcoholic beverages group (meat and meat products by 10.9%), 12.0% increase in prices of housing, water, electricity and fuels group, 0.3% increase in prices of medicine and medical service group, 0.2% increase in prices of alcoholic beverages and tobacco group.

The inflation rate was 6.0% in April 2018, 7.0% in April 2019, 4.7% in April 2020 and reached 5.6% in April 2021, increased by 0.9 percentage points from the same period of the previous year.

In April 2021, the highest increase in CPI for goods was 7.5% in Ulaanbaatar city, and the highest increase in CPI for services was 2.2% in Ulaanbaatar city.

The Civil Aviation Authority of Mongolia (CAA) introduced charter flights scheduled for June.

A total of 20 repatriation charter flights will be operated next month to countries namely South Korea, Japan, Hungary, Turkey, Germany, Russia and Kazakhstan.

Citizens, who want to buy ticket in accordance with the approved flight schedules should directly contact to aviation companies, reports the CAA.

Canada’s Centerra Gold (TSX: CG) has enacted a series of measures to protect shareholder rights after Kyrgyzstan officially seized control on Monday of the company’s Kumtor gold mine.

On a conference call with reporters and analysts on Tuesday, chief executive Scott Perry said the Toronto-based miner is already in contact with Canadian and English authorities, who have offered their support.

“As a significant investment partner of the Kyrgyz Republic, Canada is very concerned about continued developments in the mining sector,” Canadian Foreign Affairs Minister Marc Garneau and International Trade Minister Mary Ng said in a joint statement on Monday.

“Canada is also disappointed that this dispute between foreign investors and the Government of the Kyrgyz Republic was not allowed to be resolved transparently by the parties working together.”

The European Bank for Reconstruction and Development (EBRD), which has provided financing to the Kumtor project, has said that the mine seizure “would put in doubt the commitment of the Kyrgyz Republic to stand by its obligations to its international partners and foreign investors.”

The London-based bank also said the takeover risked “the country’s economic recovery and its reputation as a secure place for investors to operate.”

Centerra initiated on Sunday binding arbitration against the Kyrgyzstan government, after the parliament passed a law allowing the state to temporarily take over the company’s Kumtor gold mine, the country’s biggest industrial enterprise.

Kyrgyzstan’s move came after a court fined Kumtor Gold (KGC) more than $3 billion for allegedly dumping mining waste on glaciers near the mine 4,000 meters above sea level. A state commission also recently alleged that KGC owes more than $1 billion in unpaid taxes.

Late on Monday, Centerra also placed restrictions on the sale of shares held by state-owned Kyrgyzaltyn JSC, which has a 26% stake in the Canadian mining company.

The miner also said it had accepted the resignation of Kyrgyzaltyn nominee Tengiz Bolturuk from the board with immediate effect, adding it did not intend to make any further public comments regarding this matter unless required by law.

“Rest assured that we’re taking all measures possible to ensure that we’re protecting the rights of the organization and the rights of our shareholders,” Perry said on Tuesday.

Kumtor, which accounts for a fifth of the ex-Soviet country’s total industrial output, 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.

Multi-year “degradation“

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.

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.

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.)

“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.

Midday Tuesday, Centerra’s stock was up over 7% in Toronto. The company has a C$2.7 billion market capitalization.

By preliminary result of the first four months of 2021, the gross industrial output reached MNT 6.2 trillion, increased by MNT 2.0 trillion (48.2%) from the same period of previous year. This increase was mainly due to MNT 1.6 trillion (59.2%) increase in mining and quarrying gross output and MNT 370.1 billion (38.3%) increase in manufacturing output. Also, the electricity, thermal energy and water supply production output increased by MNT 45.9 billion (9.6%) and the water supply, and sewerage, waste management, and remediation activities production output increased by MNT 6.3 billion (14.3%) from the same period of previous year.

In April 2021, the gross industrial output reached MNT 1.5 trillion, decreased by MNT 157.8 billion (9.4%) from the previous month. This decrease was mainly due to MNT 96.3 billion (8.3%) increase in mining and quarrying, while MNT 50.8 billion (13.9%) decrease in manufacturing gross output.

In April 2021, the mining and quarrying gross output reached MNT 1.1 trillion, increased by MNT 446.6 billion (72.9%) from the same period of previous year. This increase was mainly due to increases in mining of coal and lignite by 171.3 billion (3.5 times), extraction of crude petroleum by MNT 74.2 billion (15.9 times) and mining of metal ores by MNT 228.9 billion (46.7%) from same period of the previous year.

By the preliminary results of the first four months of 2021, in the mining and quarrying sector, extraction of gold, copper concentrate, iron ore, brown coal, fluorspar, hard coal and crude oil increased by 6.4 percent to 3.6 times compared to the same period of the previous year. In manufacturing sector, production of copper cathode 99%, alcoholic beverage, wheat flour, wheat flour, milk, combed cashmere, cement, coal briquette, meat, concentrated coal and cigarettes increased by 1.4 percent to 9.8 times compared to the same period of the previous year.

However, in the manufacturing sector, productions of lime, water, soft drink, juice, face covering, alcohol, metal steel, sanitizer and cashmere products decreased by 1.0-60.6% compared to the same period of the previous year.

By the preliminary results of the first four months of 2021, the sales of industrial output reached MNT 7.9 trillion, increased by MNT 3.5 trillion (81.8%) compared to the same period of the previous year. This increase was mainly resulted from MNT 3.1 trillion (2.2 times) increase in sales of mining and quarrying output.

The sales of mining and quarrying output increased by MNT 3.1 trillion (2.2 times), compared to the same period of the previous year. This increase was mainly resulted from MNT 1.8 trillion (2.0 times) increase in sales of mining of metal ores output, MNT 1.1 trillion (2.9 times) increase in sales of mining of coal and lignite and MNT 228.8 billion (5.0 times) increase in sales of crude petroleum output, respectively.

In the total sales of industrial output, MNT 5.3 trillion (67.2%) was export, of which MNT 4.8 trillion (91.0%) was export of mining and quarrying output. In terms of commodity types of total export outputs, 62.3% was metal ores, 30.2% was coal and lignite, 5.9% was crude petroleum, 1.5% was other mining and quarrying output. In April 2021, the seasonally adjusted industrial production index was 170.8 (2015=100), increased by 79.4 percent from the same period of previous year and by 24.3% from the end of the previous year.

Source: National Statistics Office

Convenience store chain GS25 is opening three locations in Mongolia, in its second major overseas foray, the company said on Tuesday.

According to GS Retail, the firm behind the chain, it has partnered with Shunkhlai Group, one of leading conglomerates in the country, to enter the Mongolian market.

A launch event was held in both South Korea and Mongolia, livestreamed online on Tuesday, with company officials as well as dignitaries from both countries in attendance, including the South Korean ambassador to Mongolia Lee Yeo-hong who provided a congratulatory message, GS Retail said. The opening ceremony was also broadcast on Mongolia’s NTV, a local television broadcaster, the company added.

The three convenience stores are in the capital Ulaanbaatar, and one of the branches is located in the center of the city, close to the Genghis Khan Square and government buildings.

GS Retail said it has signed a master franchise contract with Shunkhlai Group, and will receive royalty fees from the partnership. The company aims to expand its business there to introduce 500 GS25 convenience stores in the country by 2025, it added.

Considering that over 70 percent of Mongolia’s population is under 40 years old, GS Retail will employ various marketing strategies to target young consumers, the company said.

By Jo He-rim (herim@heraldcorp.com)

Rio Tinto Canada is investing C$25.6 million for an 8% stake in Western Copper and Gold (TSX: WRN; NYSE-AM: WRN), which is advancing its copper-gold Casino project in the Yukon. The funds will be put towards economic studies and permitting.

“We’ve always said advancing this project with a big copper or gold company made sense and now we’ve got that with Rio Tinto,” Paul West-Sells, Western Copper and Gold’s president and CEO, says in an interview, adding that confidentiality agreements were signed about 18 months ago.

SIGN UP FOR THE COPPER DIGEST

“We’re ecstatic. Rio has experience in northern Canada with the Diavik diamond mine, they are big investors in Canada with their Alcan aluminum assets, and they have been a really good group to work with so far.”

Under the deal, Rio Tinto Canada, a subsidiary of Rio Tinto (NYSE: RIO; LSE: RIO; ASX: RIO), is acquiring 11.81 million common shares at a price of C$2.17 per share. Over the last year, the junior’s shares have traded in a range of C$0.96 and C$2.42.

News of Rio Tinto’s investment sent the company’s shares up 16.1% or C$0.32 to C$2.31 in mid-morning trading on the Toronto Stock Exchange.

The strategic investment includes an investor rights agreement under which Rio Tinto has the right to appoint a member to the project’s technical committee and send an observer to Western Copper and Gold’s board meetings, as well as second as many as three people to the project. If Rio Tinto takes a bigger stake (12.5%), then it has the right to appoint a member to the board. In addition, it has the right to participate in any future equity issuances to maintain its stake in the company.

WESTERN IS PROPOSING A MINE, A 120,000 T/D MILL, AND A 25,000 T/D HEAP LEACH OVER 22 YEARS

Western Copper and Gold plans to complete a feasibility study on Casino before the end of the year, and in the interim, will put out a preliminary economic assessment in the next six weeks. The studies will evaluate an open-pit operation, a concentrator to recover copper, gold silver and molybdenum and a solid waste facility to store mine waste rock and mill tailings. The company says the project will include a heap leach facility to recover gold, silver and copper from oxide ore.

Infrastructure will include a 130 km access road and a power generation facility to meet power demand. In addition, an airport will be relocated and some roads re-routed to lower the overall footprint.

The studies will be based on an updated resource estimate released in July 2020 that included results from 2019 drilling, as well as drilling between 2010 and 2012 that was not included in the initial resource estimate in 2010.

Casino now has measured and indicated resources of 2.17 billion tonnes grading 0.16% copper, 0.18 gram gold per tonne, 0.017% molybdenum and 1.4 grams silver per tonne (0.36% copper equivalent) for 7.4 billion lb. copper, 12.7 million oz. gold, 812 million lb. molybdenum and 100.2 million oz. silver. Inferred resources add 1.43 billion tonnes grading 0.10% copper, 0.14 gram gold, 0.01% molybdenum and 1.2 grams silver (0.24% copper equivalent) for 3.2 billion lb. copper, 6.4 million oz. gold, 323 million lb. molybdenum and 54 million oz. of silver.

The deposit remains open at depth.

Once in production, the pit could run more than 800 metres deep and 2 km by 1.8 km in diameter.

West-Sells expects the economic studies will estimate a 50 year mine life based on measured and indicated resources and possibly another 25 years based on Casino’s inferred resources. He also expects that capital costs will be in the ballpark of the C$2.4 billion estimated in a 2013 feasibility study.

The mining executive, a metallurgical engineer by training, also points to a very low strip ratio of the mine that is expected to be less than 0.5:1, and also notes that the core of the deposit is higher grade. “We’ll be mining with the first shovels in the ground at the core of the deposit, which is about 330 million tonnes, at grades of about 0.7% copper-equivalent,” he says.

West-Sells notes that the agreement with Rio Tinto is for a work term of about 18 months, which is extendable for another 12 months, and the majority of the money will be going towards some exploration, some engineering studies, and metallurgical and geotechnical work.

“This isn’t a wide open-ended agreement, it has set an amount of time for all this work to happen and then we discuss what’s next,” he says. “Really it’s an opportunity for Rio to get to know the project, for us to get to know Rio, and at the end of the period, we decide what sort of business transaction makes sense going forward.”

The Rio Tinto investment “is exciting for Western Copper and Gold shareholders and exciting for the Yukon,” West-Sells says. “This will be a major mine in the Yukon and to have a company like Rio with a reputation of operating in Canada as well as it has, is a real benefit.”

Work at Casino began in 2009 and 2010.

Western Copper & Gold has about 136 million common shares outstanding for a market cap of about C$314 million.

(This article first appeared in The Northern Miner)

Tremendous mineral reserves, agricultural endowments, and proximity to Asia's vast markets make Mongolia an attractive destination for medium to long-term foreign direct investment (FDI). The Gross Domestic Product (GDP) in Mongolia is worth 16.20 billion US dollars in 2020. The GDP value of Mongolia represents 0.02 percent of the world economy. GDP in Mongolia averaged 4.44 USD Billion from 1981 until 2018, reaching an all the time high of 13.01 USD Billion in 2018 and a record low of 0.77 USD Billion in 1993. The significant features and advantages of Mongolia:

Diversified and growing market exists in Mongolia;

Technology Innovation Hub;

Large mineral resource base that can be leveraged for value added processing;

Developing Industry and Infrastructure;

A bridge between the two economic powerhouses of Russia and China;

Young, well-educated population;

Private Sector & Privatization /privatize major state assets, list Mongolian conglomerates and exploration license aggregators on MSE/;

PPP & Modernizing Infrastructure;

Rule of law &Regulatory Quality &Transparency;

Ensuring guarantee for investors /tax & nontax/;

Promising mega projects; and

Thriving Telecoms & IT sector.

International framework: Mongolia is persistently discussing to enter bilateral and multilateral agreements and actively participates in the process of regional integration. Till to this day, Mongolia has established Foreign Investment Protection and Promotion Agreement with 43 countries and Double Taxation treaties with 26 countries. Moreover, Mongolia is the member of the Seoul Convention establishing the Multilateral Investment Guarantee Agency and Washington convention on the Settlement of Investment Disputes. Consequently, in April, 2014, Mongolia has introduced its investment policy and the law to UN Conference on Trade and Development /UNCTAD/.

Analyzing the overall performance of Mongolia on a global level, international indexes of different type have shown the following results:

According to the World Bank's "Doing business – 2020" report, Mongolia is ranked 81st among 190 economies in the "Ease of doing business"; and

According to "Index of Economic Freedom 2021" by Heritage Foundation organization, Mongolia's economic freedom score is 62.4 and is ranked 86th among 178 countries. The scores in the categories such as Judicial Effectiveness and Government Integrity are low.

Law on Investment /2013/: In 2013, the Parliament of Mongolia passed a new law on investment, which replaced both the old Investment law of 1993 and the Law on Strategic sectors. The new Investment law enables as open as possible investment environment for investors focusing on:

No approval is required to enter into the market and buy a local company;

No discrimination between foreign and local investors;

Fast registration process;

Stability guarantees- Provision of Tax stabilization certificate; and

Flexibility and friendly conditions for investors.

Investment types:

Joint Ventures, Consortium;

Mergers and Acquisition;

Concession (PPP), Product sharing, management contract;

Bond, Securities and other assets;

Financial leasing, Franchising; and

Other investment types.

Legal forms for doing business in Mongolia

Despite the fact that Mongolian legislation provides for a wide range of legal forms of commercial entities (limited liability company or LLC, joint-stock company or JSC and joint venture), in practice, private businessmen and foreign investors mostly prefer with foreign invested LLC. Representative office of foreign legal entities is also common.

Limited Liability Company (LLC) with a foreign investment

According to the law, a foreign invested company is defined as "a business entity with an overall equity of US$100,000 or more (or MNT equivalent), where not less than 25% must be owned by (a) foreign investor(s)". Investments into Mongolia can be made in the following ways:

By establishing a solely or jointly owned business entity;

Through the purchase of a Mongolian companies' shares, bonds, and other types of securities;

Through merging or wholly acquiring Mongolian and foreign companies;

Through the establishment of franchise or financial leasing agreement; and

In other ways acceptable and not prohibited by law.

If two or more investors are planning to incorporate a foreign invested LLC in Mongolia, each investor must invest 100,000 USD or MNT equivalent.

An LLC is the most frequently used form of a legal entity established by one or more individuals or legal entities – founder/s/ or investor/s/ – who are not liable for its obligations while bearing the risk of losses related to the company's activity to the extent of their personal contributions (participatory interests). The liability of the company is limited to its assets.

The bodies of a limited liability company are:

the supreme body of a company shall be the Meeting of Shareholders(MoS).LLC has exclusive powers with respect to the issues covering business, finance, management, and structure of the company.

The executive body of a company (individual or collective). The day-to-day management of the company is performed by the Director (individual executive body) or Board of Directors (collective executive body), who are elected at the MoS. Under Charter of the company, power of management or management team shall be defined clearly. The authorities entrusted to the Board of Directors shall be specified in the Charter of the company. The company may also have a Supervisory Board, which is, however, not mandatory.

Any amendment on Charter such as change of shareholder, address or business activity is required to be registered at the State Registration authority per relevant laws. The state registration certificate of the LLC with foreign investment has a term of 1 or 2 years. Prior to expiry date of the state registration certificate, the representative of the LLC with foreign investment shall apply for extension.

Joint-Stock Companies (JSC)

A JSC is a legal entity, which issues shares in order to raise capital for its activities. The types of JSC shall be open or closed. An "open JSC" is a company whose capital invested by the shareholders is divided into shares, which are registered at the securities trading organization and which may be freely traded by the public. A "closed JSC" is a company whose capital invested by the shareholders is divided into shares, which are registered at the securities depositing organization, and which are traded in the market in a closed extent outside of the securities trading organization.

The open JSC may have an unlimited number of shareholders. Shareholders are not liable for the obligations of the JSC, but bear the risks of losses within the value of their shares. A JSC has assets separated from the assets of its shareholders, and shall not be responsible for their obligations.

The JSC is managed by the Meeting of Shareholders (MoS), Board of Directors, and Executive Body. The MoS is the supreme management body of a JSC, which decides upon the most priority issues such as the company's management, administration, business policy, corporate structure, financial aspects, elections and some other issues.

The Board of Directors performs overall management of a JSC covering lower priority issues such as finances, policies development and implementation, etc., except for the issues referred by the Law and the Charter to the exclusive competence of the MoS.

The management of daily activities shall be performed by the Executive Body. The Executive body may be collective or individual. The Executive Body shall have the right to undertake decisions on the issues relating to the company's activities, which are not considered by the laws/legislative of Mongolia and the company's Charter as being the competence of other bodies and officials of the company.

Representative Office

Representative offices of foreign legal entities are not deemed to be legal entities, but legal entity, a representative office is not entitled to conduct business activity, which would result in income generation in Mongolia. As a subdivision of a foreign legal entity, a branch may fulfill all or a part of the functions of its parent company.

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Daily COVID-19 press briefing for today, May 18, by the Ministry of Health, reported that 349 new coronavirus cases were detected in the past 24 hours across the country.

In specific, 318 new cases were confirmed in Ulaanbaatar city, six were hospital-acquired cases, and 25 cases were detected in rural regions. As a result, the nationwide infection tally is now 49,524.

In the last 24 hours, 877 patients made recovery, making the total recoveries 42,721. As of May 18, a total of 3,870 patients are undergoing treatment at hospitals in Ulaanbaatar city and the rural aimags. Among them, 104 patients are in serious conditions, reports the National Center for Communicable Diseases (NCCD).

The NCCD also reported seven new COVID-19 related deaths, raising the country's death toll to 221.