Mongolia has joined the Asia-Pacific Trade Agreement (APTA) and is expected to implement tariff concessions with member countries staring next year, allowing both Chinese and Mongolian companies and people to enjoy more benefits.

According to a statement by China's Ministry of Commerce on Monday, Mongolia will reduce tariffs on 366 items, including seafood products, vegetables, fruits, animal and vegetable oil, minerals, chemical products, woods, cotton yarn, machinery and other items. The average tariff reduction level is 24.2 percent.

In return, Mongolia can enjoy relevant tariff reduction policies by other member countries under the APTA, including China.

"Mongolia's joining will further push forward the regional integration of developing economies in the Asia-Pacific region, promote the Belt and Road Initiative and enhance the level of bilateral trade liberalization and facilitation," the ministry said.

For years, China has become Mongolia's largest trade partner and the second largest source of investment.

Last year, China-Mongolia trade value grew 2.1 percent year-on-year to $8.16 billion. China's investment to Mongolia grew 132 percent year-on-year in 2019 to $270 million.

The APTA is the first regional preferential trade pact that China joined. Its member countries include Bangladesh, India, South Korea, Laos, Sri Lanka and Mongolia.

So far, the pact has implemented four rounds of tariff reductions. Six member countries have reduced tariffs on more than 10,000 items with the average reduction of 33 percent.

Mongolia shipped twice as much metallurgical coal to the Chinese market than Australia in September, confirming its position as the key supplier of the steelmaking raw material to China.

Mongolia sent 3.89 million tonnes of coking coal to China in September, while Australia shipped 1.98 million tonnes. In August, China imported 3.07 million tonnes of coking coal from Mongolia, and 3.02 million tonnes from Australia.

A buyer source from China said that imports from Mongolia will continue to be sizable in October, especially since imports from Australia were halted in early October.

China imported a total of 6.72 million tonnes of coking coal in September, down 15.6% from 7.96 million tonnes in the same month in 2019 and down by 6.3% month on month.

Coking coal imports in September were valued at 4.2 billion yuan ($631 million), down by 45.1% year on year and 20.2% lower month on month, according to customs data.

Fastmarkets’ index for premium hard coking coal, cfr Jingtang averaged $130.26 per tonne in September, down by 20.1% from $163.09 per tonne a year earlier, but up by 12.9% from $115.37 per tonne last month.

In early October, steel mills in China received an official verbal notice to halt imports of Australian coal, which led to the slump in seaborne coking coal prices, especially for premium hard coking coal.

Fastmarkets’ index for premium hard coking coal, fob Australia stood at $113.25 per tonne on October 23, down $21.30 per tonne from $134.55 per tonne on October 1.

Sh.Batkhuu, former director of the ‘Just Group’ was sentenced on 22 October to eight years in prison and ordered to pay MNT 140 billion to compensate the government after years of investigation and court delays. However, the Khan-Uul District Court dismissed charges against five others involved in the notorious case of South African Standard Bank.

Back in 2013, Mongolia’s anti-corruption agency begin investigating Sh.Batkhuu in connection to his offering up the Erdenet Mining Corporation as collateral for USD 110 million loans obtained from the South African Standard Bank.

The case began to be heavily publicised after the London Court of International Arbitration ruled in favour of the South African Standard Bank. According to Deputy PM U.Enkhtuvshin, the Mongolian Government has paid USD 40 million to the Standard Bank from EMC’s Emergency Fund.

Ulaanbaatar /MONTSAME/. The State Emergency Commission today, October 26, convened to decide on whether to extend the heightened state of readiness amid the COVID-19 pandemic.

At the meeting, it was resolved to extend the duration of the restriction imposed to all passengers, including Mongolian nationals, on the movement across the country’s all auto road, air and railway border crossing points until the end of this year or December 31.

Moreover, the regime of ‘heightened state of readiness’ will remain effective through December 31, 2020 to prevent from the spread of COVID-19, as decided by the SEC.

The cabinet is expected to discuss and approve today’s decision by the State Emergency Commission on Wednesday, October 28.

As a measure to prevent from COVID-19 outbreak, Mongolia started gradually closing its borders to all passengers, including its own citizens, since early February this year. All people returning from abroad either on government-arranged charter flights or across border crossing checkpoints in an organized manner are being placed under 21-day mandatory isolation at government-designated facilities.

Thanks to these measures, all 339 cases of COVID-19 confirmed in Mongolia are imported and no local transmission of the virus has been detected.

Domestic public events, activities and businesses and all levels of educational institutions were allowed to return to normal operations after different levels of restrictions that had been imposed on their operations since January 2020, were lifted on September 14, 2020.

Russia's largest gold miner Polyus said it is working on securing 100 percent ownership of the Sukhoi Log gold deposit in Siberia, which has estimated reserves of 540 million tons of ore, containing 40 million troy ounces of gold.

According to the firm, the undeveloped Siberian deposit is the largest in the world. “As of May 31, 2020, ore reserves are initially estimated at 540 million tons with an average gold grade of 2.3 grams per ton. This is equivalent to 40 million ounces,” said Polyus chief executive Pavel Grachev. “This confirms Sukhoi Log's status as the world’s largest new and active gold mine.”

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Grachev explained that the new deposit secures Polyus’ position as the world’s second-biggest gold mining company by attributable reserves. Last month, Polyus agreed to pay $128.2 million to buy the remaining 22 percent stake in the giant deposit.

Polyus is the largest gold producer in Russia with assets in the Krasnoyarsk territory, Irkutsk and Magadan regions, and in the Republic of Sakha (Yakutia). In 2019, the company produced 2.8 million ounces of gold, and plans to produce the same amount in 2020.

Ulaanbaatar/MONTSAME/. On October 21, the Asian Development Bank (ADB) has approved up to $420 million for a multitranche financing facility (MFF) to improve economic opportunities and living conditions among communities along the border between the Inner Mongolia Autonomous Region (IMAR) in the People’s Republic of China (PRC) and Mongolia.

“The IMAR-Mongolia border is one of the world’s longest and the setting for a remote and often hostile environment for the communities at border crossings,” said ADB Senior Financial Sector Specialist Seung Min Lee. “The ADB program will upgrade and modernize facilities at five border communities to ensure that the benefits of growing bilateral and regional trade can be shared by both sides of the border. The program’s technical design, environmental improvements, and robust economic and financial returns will ensure its long-term sustainability and benefits.”

Although the border communities serve as the main cross-border focal points for the rapidly expanding trade between the PRC and Mongolia, they lack access to basic infrastructure and services, including medical facilities, as well as job opportunities.

The poor infrastructure and inefficient processes at the IMAR border crossings stifle the potential for development and international trade on both sides of the border. Storage and quarantine facilities are lacking, a deficiency compounded by outdated and inefficient management systems, customs procedures, and standards. A one-stop customs process has not been established, and goods clearance is not yet automated or integrated with sanitary and phytosanitary measures.

Trade doubled between the PRC and Mongolia from $4 billion in 2010 to $8 billion in 2018, and about $5 billion of this total was between Mongolia and the IMAR alone. Greater efficiency at the IMAR border crossing points could further accelerate this trade growth. Trade by the PRC and Mongolia with third party countries, including those in Europe, would also grow.

The program will enhance living conditions and sustainability of target border regions by supporting the use of such advanced technologies as smart drip irrigation with reclaimed water for forestation, smart port management based on information and communication technology, and smart waste collection and transfer.

Expanded financial and business support to small and medium-sized enterprises (SMEs) will spur local income growth. International best practices in gender equity will be applied through targeted support for women-led SMEs, the gender-sensitive design of border town facilities, and poverty alleviation program support for low-income households headed by women.

The program will also address the climate change and adaptation challenges that confront both the IMAR and Mongolia. This will include support for carbon pollution reduction by building protective forest strips and the use of renewable and clean energy for heating supply. The establishment of an agricultural value chain will enhance livelihoods on both sides of the frontier.

Three tranches are envisaged for the MFF. The first of $196.3 million will help finance the delivery of a smart port management system in the Erenhot–Zamyn-Uud economic cooperation zone (ECZ), a service area and customs supervision center at the Mandula port, and upgrade of equipment at the international hospital in Erenhot. Ecological restoration will be carried out in the ECZ, and a smart waste collection system established in Erenhot. SME financing support, the construction of a quarantine station at the Mandula port, and the establishment of a product tracing and management system and Poverty Alleviation Program (PAP) will contribute to expanding income-generating opportunities.

These first tranche activities will benefit 2.95 million people in Erenhot and Baotou municipalities by providing greater livelihood opportunities for the poor and the overall population. The program will have strong regional spillover benefits for Mongolia, with expanded trade creating about 3,300 direct and indirect jobs in Mongolia. Health and other services will benefit disadvantaged communities on both sides of the border.

The project also closely complements other ADB projects in Mongolia, including an Economic Cooperation Zone project at Zamyn-Uud free zone approved in June 2020 that will create jobs and serve as a catalyst for diversifying Mongolia’s economy and additional financing for Regional Improvement of Border Services approved in 2019.

The total cost of the investment program is $888.35 million, of which the government will provide $351.42 million, and $116.93 million will come from other sources. The closing date for the third tranche is the end of September 2031.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.

Source: ADB

Ulaanbaatar/MONTSAME/.The 3rd economic policy consultation meeting between Mongolia and the USA has taken place virtually today, October 23.

From the Mongolian side, Deputy Minister of Foreign Affairs B. Munkhjin has made an opening address at the consultation meeting. In his speech, Mr. Munkhjin underlined the importance of U.S. participation, investment, and cooperation in infrastructure development projects to expand Mongolia-U.S. trade and economic relations.

In addition, he said that it expects U.S. Congress to approve the Mongolia Third Neighbor Trade Act that will grant Mongolian cashmere duty-free access to the United, and it is possible to develop bilateral air transport relations and carry out direct flights.

Representatives of the Ministry of Finance, the Ministry of Justice and Internal Affairs, the Bank of Mongolia, and the Ministry of Food and Light Industry expressed positions on the cooperation and provided presentations at the consultation meeting.

Ulaanbaatar /MONTSAME/. The global cashmere market began to demand products made with environmentally and economically sustainable commodities in the recent years.

To fulfill the demand in Mongolia, the Sustainable Textile Production and Eco Labelling Project – STeP EcoLab is being implemented by AVSF Mongolia with financing from the European SWITCH-Asia Programme, creating a comprehensive system for sustainable cashmere production. A consultative meeting took place on the implementation of the project on October 22.

STeP EcoLab Project Manager U.Sarangoo said, “Launched in 2018, our project will be implemented until February 2022. So far, we have developed a voluntary code of practice on environmental management that also includes regulations for sustainable production in the domestic textile industry. Alongside the advice being currently offered for manufacturers through the project, we will also be giving assistance in helping them make connections with foreign brands in order to enter the European market.

In partnership with the Mongolian Sustainable Finance Association, the project also plans to introduce green financing in the cashmere industry. Furthermore, in partnership with the School of Industrial Technology of the Mongolian University of Science and Technology and French professors specialized in textile, the next generation of specialists for the cashmere industry is beginning to be prepared by adding the concept of environmentally friendly textile production in the course.

The STeP EcoLab project is working together with over 20 domestic large and small-scale cashmere factories in wool and cashmere processing, combing, and manufacturing final products, such as ‘Cashmere Holding’, ‘Evseg’, ‘Mongol Textile’, and ‘Khanbogd Cashmere’.

Prior to introducing environmentally friendly production, a study is conducted on the current state of the factory. After informing the manufacturers about its importance, the factory’s engineers are trained in environmentally friendly practices by technical experts. Changes are made to the manufacturing process following the completion of technical advisory services. Through this process, Mongolian cashmere products have begun to provide for the luxury demands of global brands.”

The meeting was attended by Deputy Minister of Food, Agriculture, and Light Industry G.Batsuuri, Cooperation Team Leader of the Delegation of the European Union to Mongolia Pierre-Yves Lucas, agricultural attaché of the French Embassy Christophe Lancelot, Country Representative of AVSF Mongolia Guillaume Touati, CEO of National Federation of Pasture User Groups of Herders N.Gankhuyag and corresponding officials. Representatives of cooperatives of Gobi-Altai, Bayankhongor, and Arkhangai aimags and herders also participated in the discussion, introducing their work of preparing commodities for wool and cashmere products in environmentally friendly way.

To date, 548 gold licenses have been issued in Mongolia. As a part of the Gold-II programme by the Mongolian Government, soft loans totaling MNT 107 billion have been allocated to gold explorers. As a result, Mongolia has earned over USD one billion in revenue from gold exploration.

The Central Bank of Mongolia – or Mongol Bank – bought 2.3 tonnes of precious metals from entitles in September. In the first nine months of 2020, the bank purchased 17.1 tonnes of gold; this is an increase of 6.0 tonnes compared to same period last year.

Elixir Energy is ramping up works at its fully owned Nomgon IX coal-bed methane production sharing contract in Mongolia. The company has engaged its Mongolian drilling contractor Erdenedrilling to put a second drill rig to work on the Hutul 1S strat-hole which is due to spud tomorrow.

The hole is stepping-out from the Nomgon sub-basin, and the company said it could potentially identify either a new sub-basin or an extension to the Nomgon sub-basin. Advanced planning is underway for more stat holes to be drilled in the coming months.

Meanwhile, the Nomgon 5S strat-hole encountered several issues and will be re-drilled immediately to the north of its original location. Elixir maintains this will be at little cost to the company, as the drilling contract is on a per metre basis.

Elixir has also received final gas content results for the Nomgon-2 core-hole, showing dry ash free numbers in the main seam averaging 8.6 metres cubed per tonne. These results are similar to those reported in June for the Nomgon-1 well which measured 8.9 metres cubed per tonne.

Further analysis is being carried out on the Nombon-2 core and results from gas adsorption analysis are due next month. Managing Director Neil Young said the company is pleased with how its 2020 program at Nomgon IX CBM PSC is progressing.

“Our 2020 programme in Mongolia is continuing successfully and we are pleased to have agreed with ED to put another rig to work exploring in a new part of the PSC area. Our appraisal programme in the Nomgon sub-basin continues to deliver excellent results and we look forward to further information from the somewhat delayed Nomgon 5S strat-hole that is still underway,”Neil stated. “Our seismic work is proving productive in continuing to add new drilling targets that (in the success case) will add to our inventory of CSG bearing sub-basins across the PSC,” he added.

Finally, the interpretation of 2D seismic data from the 2019 programme and a recently acquired data set is growing the company’s confidence in multiple new drilling targets.