The DQE Testing Rig #1 has been mobilized from Block XIX to the Heron-1 location and rigged up, and testing operations have now commenced. If required, reservoir stimulation equipment is in Block XIX and is readily available. The testing operations on Heron-1 are expected to be completed during October.

At the nearby Gazelle-1 well, drilling with DQE International rig #40105 is progressing on schedule.

The Bank is providing a US$ 5 million convertible loan to the Erdene Resource Development Corporation of Canada, a company that is listed on the Toronto Stock Exchange and the Mongolian Stock Exchange and is active in precious and base metals exploration and development in Mongolia.

The EBRD loan will help complete a pre-feasibility study, carry out an environmental and social impact assessment and obtain the licenses and permits necessary to advance the Khundii Gold project into operation by 2021.

Gold mining represents a significant source of foreign currency revenue for Mongolia. In 2018 alone, the country extracted over 21 tonnes of gold, which contributed almost US$ 700 million to the national foreign reserves.

The EBRD will have an option to convert the principal and accrued interest of the convertible loan into Toronto Stock Exchange-listed ordinary shares of Erdene.

In Mongolia the EBRD works to support building a diverse economy by developing the private sector and supporting infrastructure improvements. The Bank has invested more than €1.7 billion in 104 projects in the country since it started operations there in 2006.

Gianni Infantino is arriving to Mongolia for the first time as President of FIFA at the invitation of President of Mongolian Football Federation (MFF) A.Ganbaatar which was given to him during A.Ganbaatar’s attendance to “FIFA BEST” Awards Ceremony. He visited to Mongolia in 2013 when he was serving as the Vice-President of Union of European Football Associations (UEFA) along with former President of UEFA Michelle Platini.

The purpose of his visit is to go over the progress of implementation of “FIFA Forward” Project, the operation of Mongolian Football Federation (MFF) and its vision. Moreover, he will pay a courtesy call on the President of Mongolia Kh.Battulga and exchange views on government support and contribution on football development in Mongolia.

One of the highlights of his visit is to attend the opening ceremony of a football field which was built in Shine Yarmag within the framework of “FIFA Forward” Project. In addition, he will attend the cocktail party to be held on the occasion of 60th anniversary of Mongolian Football Federation (MFF) together with council members and other representatives.

Gianni Infantino is being accompanied by 1998 FIFA World champion, 2000 UEFA Champion Youri Djorkaeff in the course of his visit to Mongolia.

The discussion was attended by ministry officials, representatives of the ‘Mongolian Cosmetics Cluster’ NGO, Mongolian National Chamber of Commerce and Industry, Mongolian Agency for Standardization and Metrology, Mongolian Customs General Administration, Mongolian Academy of Sciences as well as representatives of over 30 cosmetics companies.

As of 2018, domestic manufacturers have produced cosmetics worth MNT 4 billion. In the last 5 years, production has grown by 21 percent each year, with the variety of products continuing to increase. The export of products made with organic commodities without any additives is speculated to grow in the next few years. Currently, Mongolia is exporting organic cosmetic products to 16 countries, such as China and Korea. While only 4 percent of the products being manufactured were exported in 2013, the percentage has increased to over 30 percent in the recent years.

It was proven by a study conducted by the EU-funded Trade Related Assistance of Mongolia (TRAM) project that Mongolian cosmetic products made with organic commodities have the potential to be exported. However, as domestic manufacturers take only 2 to 5 percent of the total market despite its quick development in the last 30 years, it shows that it is necessary to improve competitiveness, the legal framework for the sector, and a pleasant business environment. Thus, in aims of bringing the sector to a new level, 27 manufacturing companies and over 40 commodity supplying companies have banded together to establish the ‘Mongolian organic cosmetics cluster’ NGO. The organization’s aim is to have the unique cosmetic products of Mongolia enter the global market.

The participants mainly discussed the current state of the domestic cosmetics market, pressing issues and opportunities for export, quality standards for commodities, legal framework, and establishing a platform for the value-added system.

The new contract includes construction of a natural gas processing chemical plant in a small town near Russia’s shores at the Gulf of Finland. The plant will comprise two sets of ethylene cracking facilities with an annual capacity of 1.4 million tons. It will also have six sets of polyethylene facilities with an annual capacity of 480,000 tons, two sets of LAO facilities with an annual capacity of 137,000 tons and an outside battery limiter (OSBL).

The project is divided into three phases: infrastructure extension, early stage engineering and then project implementation. The contract period is five years.

CNCEC said in a statement it would continue to tap the Russian market, promote cooperation for mutual benefits and win-win results.

In September 2019, exports and imports reached to USD 559.0 million and USD 507.5 million, respectively. Compared to the previous month, exports decreased by USD 256.6 million and imports decreased by USD 76.5 million. Total foreign trade turnover increased by USD 911.0 (9.5%) million, of which exports increased by USD 663.3 million (12.6%) and imports increased by USD 247.8 million (5.7%) compared to the same period of previous year.

In the first 9 months of 2019, foreign trade surplus reached USD 1.3 billion, which increased by USD 415.5 million from USD 931.7 million in the same period of 2018. In September 2019, foreign trade surplus reached to USD 51.4 million. Compared to the previous month, foreign trade surplus decreased by USD 180.2 million.

The 663.3 million increase in exports from the same period of previous year was due to the increases of USD 312.5 million in bituminous coal and USD 199.8 million in gold, unwrought or in semi-manufactured forms exports.

The USD 247.8 million increase in imports from the same period of previous year was mainly due to USD 40.9 million increase in mineral products imports, especially, USD 93.6 million increase in diesel imports and USD 179.8 million increase in transport vehicles and its spare parts.

Exports of mineral products, textiles and textile articles, natural or cultured stones, precious metals jewelry made up 95.8 percent of total export. On the other hand, 68.3 percent of imports was mineral products, machinery, equipment, electric appliances, transport vehicle and its spare parts and food products.

Source: National Statistics Office of Mongolia

In September 2019, however, the gross industrial output reached MNT 1.5 trillion, it is decreased by MNT 63.2 billion (4.0%) compared to the previous month.

In September 2019, the seasonally adjusted industrial production index was 166.7 (2010=100), it is decreased by 4.8% from the same period of previous year, by 7.1% from the end of previous year and by 5.1% from the previous month.

In the first 9 months of 2019, in mining sector, crude oil, fluorspar, coal, gravel and iron ore are increased by 2.2-37.3% compared to the same period of previous year, which in manufacturing sector, production of horse meat, vacuum windows and doors, cashmere products, buuz and dumpling, wooden window and door are increased by 13.5% to 2.2 times more.

On the other hand, in mining sector, extraction of zinc concentrate, copper concentrate, extraction of molybdenum concentrate and gold are decreased by 0.3-24.1%. In manufacturing sector, productions of beer, sausage products, wooden products, alcoholic beverage, copper cathode, combed cashmere and fodder are decreased by 1.2-34.4% compared to the same period of previous year.

In the first 9 months of 2019, the sales of industrial production reached MNT 15.1 trillion, increased by MNT 1.9 trillion (14.3%) from the same period of previous year. From the total sales of industrial production, MNT 10.5 trillion (69.9%) were export.

Source: National Statistics Office of Mongolia

In September 2019, equilibrated revenue and grants of the General government budget reached MNT 872.7 billion, increased by MNT 31.5 billion or 3.7% from the previous month and total expenditure and net lending reached MNT 937.8 billion, increased by MNT 111.1 billion or 13.4% from the previous month.

In the first 9 months of 2019, tax revenue reached MNT 7.0 trillion, increased by MNT 1225.1 billion or 21.2% compared with the same period of previous year. This growth was mainly affected by increases of MNT 371.7 billion or 26.3% in income tax, MNT 273.4 billion or 24.0% in social security revenue, MNT 231.9 billion or 15.1% in value added taxes, MNT 135.9 billion or 25.0% in other tax, MNT 104.4 billion or 18.9% in excise taxes and MNT 94.9 billion or 19.4% in revenue from foreign activities.

General Government budget revenue was comprised of 81.0% of tax revenue, 8.5% of non-tax revenue, 9.7% of the future heritage fund and 0.8% of the stabilization fund.

In the first 9 months of 2019, total expenditure and net lending of the General government budget reached MNT 7.3 trillion, increased by MNT 989.4 billion or 15.8% compared with the same period of previous year. This increase was mainly due to MNT 634.7 billion or 12.3% increase in current expenditure and MNT 477.1 billion or 56.6% increase in capital expenditure.

General government budget expenditure and net lending was comprised of 79.6% of current expenditure, 18.2% of capital expenditure and 2.2% of net lending.

Source: National Statistics Office of Mongolia

The Mongolian cabinet has drafted steps to increase the number of civil servants by 3300 in 2020. Because of a recent rise in the number of civil servants rose to over 200,000, there has been fierce public criticism and demands that the number be cut. However, the cabinet said that number of civil servants needs to be increased due to the various newly constructed schools, kindergartens which are coming on line. The cabinet has budgeted an additional MNT 52 billion to cover the salaries of these new people.