Pentagon chief to visit Mongolia www.news.mn

Mark Esper, Trump’s new defence secretary, is scheduled to visit Mongolia next week as part of a trip to Asia, Australia and New Zealand. The trip is scheduled to start on 2 August from Australia followed by New Zealand, Mongolia, South Korea and Japan.

Turquoise Hill swings to loss on Mongolia mine woes www.mining.com

Rio Tinto-controlled Turquoise Hill Resources said an impairment charge at the cash-generating unit of its Oyu Tolgoi copper mine in Mongolia led to the company missing estimates for second-quarter profit on Wednesday.

Mongolian President talks cashmere, horse names with Trump www.cnn.com

Washington (CNN)When Mongolia's President visited the White House on Wednesday, he was hoping President Donald Trump could relay some important information: the name of the horse he gave Barron Trump.

Mongolian president gifts Trump’s son Barron horse named ‘Victory’ www.nypost.com

President Trump on Wednesday welcomed Mongolian President Khaltmaa Battulga — who gave a horse to first son Barron Trump, which the commander in chief said would be named “Victory.”

President Donald J. Trump is Expanding Our Partnership with Mongolia www.whitehouse.gov

"Our success depends on a coalition of strong and independent nations that embrace their sovereignty to promote security, prosperity, and peace for themselves and for the world."

President Donald J. Trump

ENHANCING OUR STRONG PARTNERSHIP: President Donald J. Trump is expanding our critical security and economic partnership with Mongolia.

President Trump was pleased to welcome President Battulga of Mongolia for a bilateral meeting at the White House today.
This visit presents a vital opportunity to enhance the already strong United States–Mongolia relationship.
The United States supported Mongolia’s establishment of a free democratic society after renouncing communism in 1990, creating a foundation of goodwill that remains today.
President Trump and President Battulga are engaging on a range of issues, including defense and security, trade and investment, and sovereignty and rule of law.
We are working closely with Mongolia to deepen our security ties and promote a healthy economic relationship between our two countries.
The United States and Mongolia have agreed that their relationship has reached the level of a “strategic partnership.”

STRENGTHENING SECURITY COOPERATION: Mongolia is an important security partner and is working with us to sustain a free and open Indo-Pacific region.

Mongolia and the United States share a dynamic security relationship and together we are building an even closer partnership for the future.
Mongolian troops stood side-by-side with American forces in Iraq and Afghanistan.
Mongolia has pledged to commit troops in Afghanistan through at least 2021.
Mongolia has been supportive of our sanctions on North Korea and our negotiation efforts.
Through its “Third Neighbor Policy” Mongolia looks to maintain close ties to democratic partners like the United States, Japan, and South Korea.
The United States enjoys a strong diplomatic information sharing relationship with the government of Mongolia.
Mongolia has been an important host for multinational peacekeeping and security exercises.

EXPANDING ECONOMIC OPPORTUNITIES: The United States is working closely with Mongolia to bolster economic opportunities and increase bilateral trade.

In 2018, the United States had a $111 million trade surplus with Mongolia, reflecting the significant importance of the country as an export market for American goods such as automobiles and heavy machinery.
We are urging Mongolia to fully implement the 2017 transparency agreement between our two countries, which will help improve Mongolia’s business and investment climate.
The United States is working with Mongolia to improve opportunities for investment, invest in infrastructure, and enhance education.
The United States Agency for International Development (USAID) is working to help increase transparency and provide greater access to finance in Mongolia.
In 2018, Mongolia signed a $350 million compact with the Millennium Challenge Corporation that aims to improve water supply infrastructure in Mongolia’s capital.
The Peace Corps has volunteers working in 21 provinces in Mongolia to provide health education and English language instruction, and plans to increase its presence.

Mongolian Banksy finishes giant artwork www.news.mn

Melbourne-based street artist Kh.Khosnaran AKA Heesco recently finished his giant graffiti in Karoonda, a town in Australia. His monumental work of art covers a wall and is on 30 by 10 metres. Heesco spent over 200 hours spraying graffiti using 600 cans of spray paint and 160 liters of acrylics.

Mongolia's capital covered with smog from wildfires in Siberia www.xinhuanet.com

ULAN BATOR, July 31 (Xinhua) -- Smog from massive wildfires currently raging in Russia's Siberia has already reached some parts of Mongolia, authorities said on Wednesday.

Mongolia's Long Road To Mining Wealth www.npr.org

Gulnara Dariiga has been stuck in traffic for two days in the Gobi Desert in southern Mongolia. The 38-year-old mother of four eats and sleeps in a heavy-duty North Benz truck, assigned to her by her Chinese employer — a coal buyer across the border.

"I think today we will cross," she says with a grin. She shifts from park to drive, clenching her teeth to fight the stiff steering wheel. Her truck is laden with 90 tons of coal briquettes from Mongolia's Tavan Tolgoi mine, ready for delivery.

This trade road and the immense gridlock of hissing trucks lined up like dominoes, waiting to cross the Mongolia-China border, are an indication of Mongolia's future: The nation is shifting away from an economy based on agriculture and herding to one based on mining. With economic transformation comes opportunity, but also environmental damage and growing pains for local residents, as the landscape is carved up by mining machinery and trucks.

"Selenge is beautiful, with a nice river and berries. The problem is there's no jobs there for young people," Gulnara says.

Mongolians are migrating away from rural areas, seeking work elsewhere. And one of the places they're going is Ömnögovi, a mineral-rich province in the South Gobi, home to the mega-mining projects Tavan Tolgoi (coal) and the Oyu Tolgoi (gold, copper and silver). Two decades ago, Ömnögovi was the least populated province in Mongolia. Now, it's a destination for those seeking formal and off-the-books work.

Roads — some paved, some rutted by tires — are appearing in places they never were before. Drivers, mechanics, retailers and other business owners are setting up shop. There's money to be made on the way to the border. But driving along the roads, some more than a decade old now, the scars become apparent.

"Like lines on a human palm"

Landlocked between Russia and China, Mongolia sends its exports overland by railway and truck. The Mongolian government pledged to build a separate railway from the Tavan Tolgoi coal mine by 2021 to expedite coal deliveries to China through the South Gobi corridor, but has failed to secure financing.

The coal trade depends on trucks like Gulnara's, and on a network of roads leading directly from the mines. Prior to this job, she rode shotgun alongside her husband. "I can do this too," she thought, and secured her own truck last December. She outfitted the North Benz with a gas stove and stretched a clothes line across the sleeper cab. She applies makeup with the aid of her rearview mirror, eyebrows perfectly drawn.

Gulnara will be paid 1,800 Chinese yuan ($260) for delivering this load of coal. She completes two trips a month minimum, generating a monthly income of $520, more than double Mongolia's median monthly wage of $250, according to the National Office of Statistics.

She's proud of this. All her children are enrolled in school. The money she and her husband make pays for their education.

On the way to a paycheck, however, are dangerous, exhausting road conditions. Entry to China is slow, as vehicles carrying people and goods converge on a single point.

The line of thousands of trucks to the border crossing between Gashuun Sukhait, Mongolia, and Gants Mod, China, regularly spans 15 miles and drivers know it can take days of waiting.

Gulnara has waited up to seven days to cross. Men smoke cigarettes outside their trucks in small clusters. Their vehicles are outfitted with string lights on the grille and pictures from home on the dashboard.

She watches movies to pass the time and scrolls through photos of Selenge on her phone. Her kids are still there, taken care of by their grandmother, and she calls them daily. The few other women doing this trucking work wave to her as they pass.

Every morning, she prepares suutei tsai, traditional milk tea with salt. She tosses the pearly drink into the sky as an offering to the spirits of the land, deities of shamanic ancestry. She prays that no driver will be harmed during the journey.

To jump the line, trucks often weave into the contraflow lane. Collisions are common. Twisted metal from flaming car wrecks and shards of pavement line the road. "You have to be alert all the time," Gulnara cautions. "You have to look at the passing truck."

Otgonduu Khuudeg, 51, remembers the arrival of cross-border trade between Tavan Tolgoi and China in 2011. The usual quiet of the region's pastureland was disrupted by the rumble of cars on an unpaved road. Trucks kicked up fragile topsoil, churning clouds of dust in their wake. Some in the area mounted protests, smashing truck windows and reporting drivers to local authorities.

"The Gobi road became like lines on a human palm. Trucks were hitting groups of animals," he says. He lost half a dozen camels to vehicles accidentally colliding with his herd.

NewsAgency Mongolia estimates there are about 12,000 coal truck drivers ferrying product from Erdenes Tavan-Tolgoi, Energy Resources LLC, and other enterprises that tap the massive Tavan Tolgoi coal deposit. It also reports 51 truck drivers were killed along the road from Tavan Tolgoi to the border between 2015 and 2018.

The road is largely unregulated, with little police presence. Traffic rises and falls in lockstep with China's demand for coal.

"Vulnerable and volatile"

Before the road, there was open rangeland.

For nearly seven decades in the 20th century, Mongolia was a Soviet satellite with a centrally planned economy. Agriculture was the economy's centerpiece. Industrial mining did exist, but it was not until the 1990s — with the transition to free-market democracy — that foreign investors could get involved.

Mining boomed. By 2011, Mongolia had the fastest-growing economy in the world, earning the nickname Minegolia.

While mining ushered in new wealth, it has also opened the door to economic volatility. The government spent beyond its means and when commodity prices dropped, it couldn't repay its loans. The national debt reached untenable levels. In 2017, the International Monetary Fund approved a $5.5 billion bailout package.

Mineral prices have since picked up, and economic growth resumed. But with one boom, in 2011, and bust, in 2016, already under its belt, where does that leave Mongolia today?

"Vulnerable and volatile to commodity prices," says Dorjdari Namkhaijantsan, 45, the country manager of the Natural Resources Governance Institute, a policy nonprofit. "Ninety percent of Mongolian exports are depending on one sector [mining]. That's a risk. And we have to manage it."

While Mongolia's mineral wealth is massive — valued between $1 trillion and $3 trillion in coal, copper and gold — it won't last forever. "If we end up exploiting all our natural resources and still have huge poverty in Mongolia, then obviously we will have lost the opportunity," says Dorjdari.

Mining also comes at tremendous cost to the environment. The greatest tension in the region revolves around water. Climate change impacts — like drought and desertification — have already dried up hundreds of Mongolia's rivers and lakes. Residents worry about how mining, which requires huge amounts of water for processing, could degrade the land even further.

This is especially true for those neighboring the massive mining project at Oyu Tolgoi. Discovered in 2001, Oyu Tolgoi contains among the largest deposits of copper and gold in the world, according to Rio Tinto. It is Mongolia's biggest mining project.

Chartered flights arrive and depart daily from all over the country, as workers arrive for their rotations. With approximately 2,500 employees, the mining project has a hair salon, a movie theater and a cafeteria named after the endangered Gobi brown bear, known as Mazaalai.

Oyu Tolgoi's road to the border is different from the one from Tavan Tolgoi — it's approximately 60 miles of well-maintained concrete. Trucks bearing copper concentrate drive several lengths apart. Seatbelts are mandatory for all employees.

But even this industry leader has come under environmental scrutiny. During construction in 2011, contractors diverted the Undai River. Herding groups in Khanbogd filed a complaint with the compliance adviser ombudsman of the World Bank, claiming that decision dried up local water wells and threatened their herders' livelihood. The parties came to an agreement in March on environmental management and compensation, but tensions persist.

Otgunduu, the herder who lost camels to passing trucks, lived in the path of the construction site. He and his wife were 11 families physically displaced in 2004. Another 89 herding families were "economically displaced," compensated for damages to their livelihood.

While most of his peers have given up herding as mining encroaches on the land, the displacement payment he received from Oyu Tolgoi allowed him to purchase a male cow and continue herding. The company has expressed interest in buying his beef one day to feed miners in the cafeteria and elsewhere.

Cows are not naturally suited to the semiarid conditions of the Gobi Desert, but Otgonduu feels like he has no other choice. "We are already old, and no one will hire us. We can't do other jobs. This is what we know how to do," he says. "We have to adapt to the changing environment and the key for that is water."

For its part, Oyu Tologi is making an effort to protect water for the local community. Erdenebayar Naran, the company's 37-year-old environmental manager, monitors the levels of local water wells and oversees a water diversion project, designed to direct water from a natural riverbed away from future construction.

"If we don't divert water to go around the open-pit [mine]. that subsurface water will be lost," he says. "All the herder wells and natural springs and wildlife will not have any drinking water source."

Erdenebayar picks up trash as he walks the perimeter of the new water spring. As someone who grew up in the South Gobi, the work for him is personal. He is fully aware that Oyu Tolgoi's mineral wealth is finite, slated to last 150 years at best, and wants the process to unfold in an environmentally sustainable way.

"My ancestors lived here," he says. "My generation's offspring will see me. I don't want them saying, 'My father did a terrible job and destroyed this land.'"

But when asked if he feels conflicted working for the mining industry, he says no. "We need economic growth. We don't have technology. We have resources. And we have the Chinese market right next to us. In Mongolia, the only way to make money fast is through the mining industry."

About 15 miles north of the Chinese border is the community of Tsagaan Khad — which means White Rock. The unplanned settlement did not exist 30 years ago. It bloomed in the South Gobi as the road network grew, a gathering of service providers catering to drivers and passerby.

While the mining industry directly employs just 3.6% of Mongolians, the industry's growth has meant many others can find informal employment, responding to needs of industry in the region.

Batdelger Genden, 53, presides like a mother hen in Tsagaan Khad. On a cool evening in late February, she raises a glass of vodka on the opening night of her new restaurant, which she's named "Traveler."

The tables are heaped with candy and soda, while a professional chef hired from Ulaanbaatar, Mongolia's capital, prepares a mutton dumpling soup. The playlist is heavily Dolly Parton and Kenny Rogers.

Batdelger commands the room full of friends and customers with a speech: "May your lives prosper. There are many drivers passing through this road. Here is a place where you can stop and eat good food and have a leisurely time."

Her patrons cheer.

Ts began as a temporary camp of 10 homes in 1993. Now, it is a sprawling community of 10,000 people either staying there or passing through at any given time. Mining has that much pull in the region, creating opportunity where none existed before, in a country where 30% of the population lives in poverty.

In Tsagaan Khad, auto mechanics rub elbows with food purveyors. Dust storms are frequent, driving people indoors. Drivers can get a hot meal, a quick rest, and play a game of cards before embarking on the 15-mile journey to the border.

Batdelger isn't bothered by the dust storms, as long as they don't disrupt her business. She's sympathetic to those trying to make a living in the South Gobi, profiting from what mining has to offer in any way they know how. She calls it "Mongolia's Korea."

"This is like the promised land for the Mongolian unemployed, for those who want to make money for honest work," she says. "Freedom is here."

Mongolia Booms: 2012 Special Series On The Mining Surge In The Country
Mining is not anticipated to slow down, as mineral products and precious metals account for 23% of Mongolia's overall GDP. To take part in the global economy and lift Mongolians out of poverty, the nation is leaning into its mineral wealth. But Mongolia is also warming. Mining directly contributes to climate change. The land is growing increasingly fragile.

How do these two realities square?

As Dorjdari, who tracks the country's mining and government, put it: "When your stomach is empty, you don't think about the environment."

Many NPR spoke with feared the country's new direction in the long term. Tomorchuluun Tavkhai, a 69-year-old herder in the Gobi, said, "Mongolia is like a small island in a blue planet. If we help preserve the environment, I think it will be helpful for the rest of the world."

Emily Kwong (@emilykwong1234) spent nine weeks reporting in Mongolia as NPR's Above the Fray fellow. Additional reporting and translations were provided by Ganbat Namjilsangarav and Enkhbat Doorov. The fellowship is sponsored by the John Alexander Project, which supports foreign reporting in undercovered parts of the world. Follow the fellowship on Instagram (@thejohnaproject) and Twitter (@thejohnaproject).

World Bank Reaffirms Support for Mongolia’s Reforms with US$100 Million Financing www.worldbank.org

WASHINGTON, July 30, 2019 – The World Bank’s Board of Directors approved today US$100 million in financing to help Mongolia further stabilize its economy and move it towards a more sustainable development path. The Second Economic Management Support Operation (EMSO 2) follows on EMSO 1 approved in November 2017, and supports policy reforms aimed at restoring debt sustainability, strengthening the social protection system, and enhancing competitiveness.

Mongolia’s economy has recovered strongly from the brink of a macroeconomic crisis in 2016, but underlying vulnerabilities remain. The economy grew by 6.9 percent in 2018, compared to 1.2 percent in 2016. The country’s fiscal position has improved substantially, as the deficit declined from 16.4 percent of GDP in 2016 to a surplus of 2.7 percent in 2018, resulting in a reduction of Mongolia’s government debt to GDP ratio by nearly 13 percentage points over this period. Poverty increased during the economic slowdown of 2014-16 and declined again only moderately during the subsequent recovery, pointing to continued challenges in the labor market and the need for stronger social support policies.

“The reforms supported by this operation are critical for sustaining economic growth, improving public finances, and enhancing competitiveness. Their adoption shows the government’s commitment to continue structural reforms in Mongolia. The World Bank will continue to work with the government and with other international development partners in support of Mongolia and the Economic Recovery Program, ” – said Martin Raiser, Country Director for China, Mongolia and Korea.

The program seeks to restore the country’s debt sustainability by consolidating the adjustment already achieved and addressing structural weaknesses in the management of public sector finances. This includes improving the tax system and public investment management, helping to reduce the costs of ongoing investment projects, and tightening the management of special funds financed from the state budget. It also includes publicly disclosing the recent external reviews of the operations of the Development Bank of Mongolia and the Bank of Mongolia, as well as restructuring of the Housing Mortgage Program to expand availability of affordable housing and improve its targeting.

Another focus area is to strengthen the social protection system for poor and vulnerable groups, by promoting employment creation outside the mining sector and better targeting of social policies.

To enhance the competitiveness of the economy, the program also supports measures to improve the business and trade environment such as strengthening investor protection, streamlining permit requirements, and promoting trade facilitation reforms. Moreover, it supports economic diversification by promoting animal health management.

The EMSO series is part of a broader, coordinated effort of development partners to support the government’s medium-term economic recovery program. A third operation under the EMSO series is planned, focusing among other things on completing the ongoing recapitalization of the banking sector in close coordination with the IMF. The EMSO series complements existing World Bank investment and technical assistance projects in areas such as development of non-mineral exports, employment support, fiscal stability, energy, education, ICT development, and central and local governance.

Huawei revenue rises 23.2% despite US restrictions www.chinadaily.com.cn

Huawei Technologies Co said on Tuesday that some US suppliers have been gradually resuming sales to it, but so far the Chinese tech company still did not have access to some crucial US technologies such as the updates of Google's Android operating system.

The comments came as Huawei announced on Tuesday that it posted 401.3 billion yuan ($58.3 billion) in revenue in the first half of 2019, marking a 23.2 percent year-on-year jump, despite all the restrictions it faces from the United States government.

Liang Hua, chairman of Huawei, said: "We have been working hard to ensure smooth operations, and our organization is as sound as ever. With effective management, our business has remained robust in the first half of 2019."

The financial performance came as Huawei is facing restrictions from the US government which put the Chinese company on an "Entity List" in May, banning the Chinese tech company from buying US technologies without special government approval.

"The US entity list has had some impact on our development. But both the scope and extent of this impact is controllable. Our core products have not been significantly affected. Our customers still believe in us," Liang said.

The media recently reported that the US government may grant licenses to some companies to restart new sales to Huawei next month. Reuters reported earlier this month that the US Commerce Department had received applications from more than 35 US companies which are asking for licenses to resume such sales.

Yao Fuhai, chief supplier officer of Huawei, said the Shenzhen-based company has been very grateful to the US suppliers which have supported Huawei while complying the US laws and regulations.

"We welcome the recent positive signals from the US government and wishes it to put into action what it said," Yao said.

But Liang from Huawei highlighted that the sales of some crucial US technologies, including the Android operating system, have still not been resumed.

"In the second half, Huawei's overseas smartphone business will still meet some challenges," Liang said, adding that if Huawei can regain access to the Android operating system, the company will use the system in its smartphones.

But if not, Huawei also has the capability to build its own operating system and relevant ecosystem, the senior executive added.

Huawei said it will invest 120 billion yuan in research and development this year.

According to him, Huawei's overseas smartphone business was indeed affected by the US government restrictions, but recently, the business has rebounded back to 80 percent of its performance before Huawei was put on the trade blacklist.

Huawei's consumer business group accounted for 55 percent of the company's total half-year revenue, with its domestic smartphone businesses gaining strong momentum in China.

Jia Mo, an analyst at market research company Canalys, said the US government's ban on Huawei has caused uncertainty overseas, but "in China, it has kept its foot on the accelerator".

Huawei took a record 38 percent of China's smartphone market in the second quarter of 2019, signifying the highest market share of any vendor in eight years, according to data released by market research company Canalys on Tuesday.

Huawei's global mix has shifted back toward China, with 64 percent of its smartphone shipments in the second quarter going to its home market.