After the Parliament approved the Mining Products Exchange Law, Mongolia began trading not only coal, but also iron ore concentrates on the Mongolian Stock Exchange.

Iron ore concentrate was traded on the stock exchange for the first time on September 15. A total of 113,400 tons of iron concentrate are traded on the exchange. 72,000 tons of iron concentrate with a 65% content of the Mongolrostsvetmet state enterprise and 6,800 tons of iron concentrate with a 58% content of the Darkhan Metallurgical Plant were sold in the first trade. The price offered by the seller increased by 10-50% after trading.

The first commercial delivery began on October 4. The first 100 cars of iron concentrate sold by Mongolrostsvetmet were transported by rail from the terminal of the Bor-Ondor mining plant to the port of Erenhot, China, on October 5. The shipment of 50 cars of products from the Darkhan Metallurgical Plant began on October 7.

Russia is strategically seeking to diversify its trade partnerships, aiming to replace lost European trade with new allies in the east. Russia has long-standing ties with Mongolia, which has grown in importance since the G7 sanctions regime was imposed last year and is home to trillions of dollars-worth of natural resources.

Deep-rooted cultural ties have spanned decades, with numerous Mongolian leaders, artists and scientists having received their education in the USSR or its Eastern European allies.

In recent years, Russia's business ties with Mongolia have grown stronger. Mongolia's role as a key player in enhancing Russia's connectivity with China is pivotal, benefiting both nations. Russia stands to bolster economic relations with China and the Asia-Pacific region, while the activity drives Mongolia's economic growth.

Mongolia's geographical location provides crucial transit and transport corridors, strategically significant for Russia. The Trans-Mongolian Railway, linking China to Russia's Trans-Siberian railway system, serves as a key route for the movement of goods between Russia and East Asia.

Over the past 25 years, Russian exports to Mongolia have steadily expanded at an annualised rate of 8.8%, from $218mn in 1996 to $1.81bn in 2021. In 2022, Russian-Mongolian trade surged by nearly 50% compared to 2021, reaching a historical high of $2.7bn, with expectations of surpassing $3bn by year-end. Russian exports make up nearly 95% of this trade turnover.

Russia's key exports to Mongolia include mineral products, particularly fuels, oils, energy commodities, as well as food products, agricultural raw materials, machinery, equipment, vehicles, chemical industry products, metals, and metal products. In contrast, Russia's primary imports from Mongolia consist of mineral products such as salt, sulphur, earth, stone, plastering materials, lime, and cement, along with articles of clothing and clothing accessories, machinery and railway locomotives.

Presently, Mongolia's exports to Russia account for less than 1% of its total exports. Nevertheless, Russia's supplies constitute a significant portion of Mongolia's imports, particularly for certain commodities: over 90% of petroleum products, 27% of foodstuffs, and 30% of electric power.

Building new ties in a post-Soviet world

The early 1990s marked a pivotal shift in Mongolia's relationship with the Soviet bloc, as Mongolia transitioned to its first democratically elected government. This transformation led to the cooling of previously close ties and the discontinuation of Russian technical aid after 1992. Additionally, Russia requested repayment of aid received from the Soviet Union from 1946 to 1990, amounting to nearly $180mn. However, since the turn of the millennium, Russia has been diligently working to strengthen its bond with Mongolia, aiming to elevate its status as a regional power – an effort that has only been spurred on by Russia’s break with the West.

In 2000, Russian President Vladimir Putin visited Mongolia and renewed a significant bilateral treaty, resulting in reduced prices for oil and energy exports to Mongolia and an upswing in cross-border trade. In 2016, Russia forgave 98% of Mongolia's state debt.

Russia aims to bolster its eastern relations through the Eurasian Economic Union (EEU), with Mongolia becoming the first state to sign a memorandum of co-operation with the Eurasian Economic Commission in 2015. Subsequently, a working group was established to explore expanding economic ties between EEU member states and Mongolia.

Russia also advocates for Mongolia's full membership in the China-led Shanghai Cooperation Organization (SCO), as Mongolia has been an observer state for over two decades. Mongolia has expressed interest in joining ASEAN (Association of Southeast Asian Nations) and has attended its meetings in the past. Russia is a dialogue partner within ASEAN.

All three countries – Russia, Mongolia and China – have signed several tripartite agreements since 2016, simplifying border clearance processes and promoting seamless transportation via road and railway along the corridor. A noteworthy agreement involves the comprehensive development of the China-Mongolia-Russia (CMR) economic corridor.

In September 2019, Russia and Mongolia signed a comprehensive strategic partnership agreement, bolstering their collaboration in politics, economy, trade, business, infrastructure and culture. Additionally, the two nations established the Russian-Mongolian Investment Cooperation Fund.

Efforts are underway to modernise the central railway corridor, including doubling railways, electrification and repairs. Practical implementation is expected to commence in 2024. The Eastern Railway Corridor is also taking shape, connecting the Trans-Siberian Railway, Northeast China's railways and Mongolia's eastern aimags. Mongolia plans to construct the missing Choibalsan-Huut-Bichigt section.

Road connections are expanding, with a significant portion of the AN-4 highway in western Mongolia now open, linking Western Siberia in Russia with China's Xinjiang Uygur Autonomous Region.

Crucially, the Power of Siberia 2 natural gas pipeline project is set to begin construction in 2024. Spanning 2,600 km, the pipeline connects Russia and China via Mongolia, with a gas capacity of 50bn cubic metres per year. It is anticipated to be operational by 2030, generating substantial transit fees and gas.

Russian agricultural holding SibAgro rolled out plans to build a pig farm in Mongolia to sell finishers to local customers.

With a planned output of 18,000 tonnes per year, the farm is designed to grow piglets imported from SibAgro’s East Siberian pig farm in Russia’s Buryatia republic. The company has already signed an investment agreement with the Mongolian government and is working on finishing the farm’s design documentation. “Our territorial proximity to the borders of this country makes shipping animals fast and safe,” Yulia Shishkina said. She is a branch director of SibAgro.

Springboard

The farm is expected to become a springboard for SibAgro to expand its presence in the Asian markets. The company said it eyed the Chinese market and those of other countries in Southeast Asia. SibAgro has not disclosed the project’s timeline or the investment costs.

In 2022, SibAgro disclosed that the East Siberian pig farm expanded its presence in the Mongolian market during the previous years. The farm started exporting pork to Mongolia in 2017 and delivered 10,000 tonnes of pork in total, Shishkina estimated. Every year, the supplies have been growing, and the company intended to pick up the pace, she added.

A logical move

Launching pig farms abroad is a logical solution for Russian companies as it allows them to avert Western sanctions. Konstantin Korneev, executive director of Rincon Management, a Moscow-based think tank, explained about that strategy in local publication Agroinvestor. “The establishment of extraterritorial projects in friendly countries is an organic solution for many Russian companies,” Korneev said, describing this as a win-win solution since Russian farms could help other countries improve their food security. It should also contribute to a further rise in Russian pork exports. “It would be good if Russian banks and financial institutions supported such projects when implemented abroad.”

Mongolia is a good start

Mongolia is characterised by low population density and the absence of centralised developed retail, Korneev continued. Another advantage is an absence of religious restrictions for building pig farms, unlike, for example, Uzbekistan and Kyrgyzstan, where such activity is prohibited by Islamic traditions. On the other hand, Korneev pointed out logistic issues, as live animal delivery and storage to Mongolia will be associated with relatively high costs.

A low concentration of pig farms in Mongolia would be beneficial from the point of view of biological safety, Korneev added.

Summary of this week's events on October 9-15:

In Ulaanbaatar:

October 10: Regular Meetings of the Mongolian People’s Party Group and Democratic Party Group in the State Great Khural will take place.

October 9: The “Change and Tendency of Social Morality in Today's Mongolian Society” discussion will be held in the Sukhbaatar Hall of the State Palace.

October 9: “Mongolia through Our Eyes” photo exhibition will be opened on the 2nd floor of the Chinggis Khaan International Airport.

October 9: Professor Angela Fitzgerald, Associate Dean (Education), School of Education RMIT University, Melbourne, Australia will give a lecture on “Embracing inclusive education: Fostering an equitable learning environment” at the Department of Sociology and Social Works, the National University of Mongolia.

October 9: The "Urban Landscape Architecture-2023-Urban Nature-based Solutions" international conference will be held at the Agricultural University. In the event's framework, an exhibition "Spatial Solutions for Landscape Architectural Planning based on Nature" will be held at the Khatan Tuul theater on October 9-10.

October 9-13: “Mining week-2023” conference will take place.

October 10, 11: Sessions of Standing Committees of the State Great Khural will take place.

October 10, 11: Puppet theatre “Ulger” of the Republic of Buryatia, the Russian Federation will present “Duuch manjin (Singing turnip)” performance at the Russian Center for Science and Culture.

October 11: The regular Cabinet Session will be held at the State House.

October 11: “Ulaanbaatar – Photography Week” joint exhibition will be opened at Misheel Expo.

October 12: An academic conference dedicated to the 89th birth anniversary of poet Nyamdorj Nyambuu, Laureate of the State Premium of Mongolia, will be held.

October 12-13: XV Asia Pacific Research Committee (APRC) Conference will be organized.

October 12-31: Plenary Session of the State Great Khural will take place.

October 13: During the joint session the Cabinet will discuss the implementation of projects and measures in the road and transport sector included in the New Revival Policy.

October 13-22: BRAVO Circus International Circus will perform in the Wrestling Palace. The circus show consists of performs of the best circus artists from Italy, Russia, Türkiye, Turkmenistan, Ethiopia, Kazakhstan, Georgia, Kyrgyzstan, and Mongolia as well as various animals including ostriches, peacocks, giant snakes, dogs, and goats.

October 14: The exhibition “Chinggis Khaan: How Mongols Changed the World” will be opened in Nantes, France.

October 14-26: Lkham Gallery, along with Mongolian contemporary artists, will display a joint exhibition “White Milk Paints the Blue Sky” in Paris, France.

October 15: The 51st Opening Concert "New Season-2024" of the Mongolian State Philharmonic Orchestra will take place.

October 15: The 50th anniversary of the establishment of diplomatic relations between Mongolia and the Philippines will be celebrated.

October 15: White Cane Awareness Month will be celebrated.

Regional events:

October 9-16: "Development of Darkhan city" photo exhibition will be opened in Darkhan-Uul aimag

October 10: “Erdene Daichin zasag and Teshig soum of Tusheet Khan aimag: History and Culture” scientific conference will take place in Teshig soum, Bulgan aimag.

October 11-13: Advanced flood risk studies will be conducted in Darkhan-Uul aimag.

October 12-14: “Central Region Partnership-2023” exhibition will be held in Darkhan-Uul aimag.

October 13: Dornod aimag’s Musical Drama Theater will premier the musical drama “Man’s Tears.”

The 12th International Mining and Oil Expo "Mongolia Mining 2023" was held at the Buyant-Ukhaa Sports Palace on October 3-5, Montsame reports.

The Expo brought together mining, oil, and exploration companies, service and equipment suppliers, assessment and consulting companies, investors, and about 200 business organizations from China, Russia, Canada, Great Britain, Turkey, Australia, Belarus, Germany, Austria, the United States, Finland, Kazakhstan, South Korea and India.

The exhibitors displayed their products, services, and equipment. At the Expo were presented the strategy for increasing productivity of Erdenes Mongolia LLC, the purchase plan of Erdenes Tavan Tolgoi JSC, Erdenet Mining Corporation, and Oyutolgoi LLC, transparency and accountability in procurement and Komatsu machinery for open-pit mining.

India is participating in "Mongolia Mining 2023" as a business partner.

"Mining is the principal industrial activity in Mongolia. This sector alone accounts for three-quarters of the country's GDP. India has been actively participating in the Exhibition since 2019. This year many companies including oil and gas producers, representatives from the Ministry of Mining and Geology, and research institutes are taking part in this event. India launched construction of an oil refinery capable of processing 1.5 million tons of crude oil per year in Dornogobi province. The contract for the 4th stage of the construction was signed last week. Our cooperation will expand and contribute to the diversification of Mongolia's economy," Indian Ambassador to Mongolia Mohinder Pratap Singh said.

Seven companies from Australia are participating in the Expo.

"Mainly energy companies are taking part in the Expo from Australia. There are over sixty Australian companies engaged in the mining sector in Mongolia. Australia's mining industry faces similar challenges as the Mongolian mining sector. We try to introduce new innovations in the mining industry, develop solutions based on the environment, safety, and AI. In addition to supporting Australian exploration companies in Mongolia, we also support Mongolian mining professionals to be trained in Australia to exchange experience and work in the mining sector of Mongolia upon returning home country," Australian Ambassador to Mongolia Katie Smith said.

Battulga Tumurdash, the initiator of "Mongolia Mining 2023" and President of Minex Mongolia Ltd, emphasized that the Expo is taking place at a time when the mining industry is recovering after the pandemic and the economy is growing rapidly.

The development of the mining industry in Mongolia, global trends, procurement policies and plans of large businesses were discussed at the Expo. Mining professionals and experts exchanged views on issues of responsible mining, investment, and sustainable development and exchanged experiences with colleagues from other countries.

The MIAT Mongolian airlines will perform direct flights to Australia.

The Ministry of Roads and Transport Development said that they are working on an OPEN SKY agreement with Australia, which is one of the countries with the largest number of Mongolian citizens.

Direct flights from Mongolia to the USA will become possible from the second quarter of 2024. The cost of tickets will drop to $1,000-1,500, and the flight time will be 10-12 hours.

An agreement was also concluded between the government of Mongolia and the government of Greece on air services on August 24.

Mongolia has concluded air service agreements with 42 countries and has established legal mechanisms for direct flights to 115 destinations around the world.

China is willing to work with Mongolia to plan high-level exchanges and priorities in cooperation to push for greater development of bilateral ties, further setting an example in neighborly relations, senior Chinese diplomat Wang Yi said on Thursday.

Wang, a member of the Political Bureau of the Communist Party of China (CPC) Central Committee and director of the Office of the Central Commission for Foreign Affairs, made the remarks when meeting with Mongolian Deputy Prime Minister S.Amarsaikhan, who came to China to attend the third China Xizang Trans-Himalaya Forum for International Cooperation in Nyingchi, southwest China’s Xizang Autonomous Region.

Wang noted that China and Mongolia are friendly neighbors, sharing not just common mountains and rivers but also weal and woe.

The two sides should be guided by the important consensus of the two heads of state, adhere to mutual respect for independence, sovereignty and territorial integrity, as well as respect for each other’s core interests and major concerns, said Wang, urging both sides to strengthen mutual trust, enhance communication and resolutely promote bilateral relations to make steady progress in the new era and advance the building of a China-Mongolia community with a shared future.

For his part, Amarsaikhan said that Mongolia-China relations are developing with sound momentum, and cooperation in various fields has intensified, especially economic and trade cooperation, which has played an important role in Mongolia’s economic development.

Noting the Mongolian side is deeply satisfied with the development of bilateral relations and full of confidence in the future of the relationship, Amarsaikhan said it will firmly pursue a friendly policy towards China, respect each other’s core interests and push bilateral ties to a new level.

The British Embassy will support English language teaching in secondary schools in Mongolia.

On 6 October, Minister of Education and Science L.Enkh-Amgalan received Ambassador of the United Kingdom of Northern Ireland to Mongolia Fiona Blythe. The sides exchanged views on further cooperation in the field of education and science.

L.Enkh-Amgalan visited the UK in May 2023. He met with representatives of the Foreign and Commonwealth Office and thanked them for their support in increasing the Chevening Scholarship during the visit.

The Ambassador stated that during her stay in Mongolia she will prioritize cooperation in the field of education. In particular, she expressed her willingness to cooperate in supporting English language teaching in secondary schools in Mongolia.

Phuket marked a significant milestone as Mongolia inaugurated its honorary consulate on the island, coinciding with the 49th anniversary of its diplomatic ties with Thailand last week. The consulate’s office is located at the Gig Hotel on Soi Bangla in the Patong district.

The opening ceremony saw the attendance of key figures including A.Tumur , Mongolia’s ambassador to Thailand, Nutthaphong Phathakiatpaisan, Mongolia’s Honorary Consul, and Phuket’s governor, Sophon Suwannarat. The consulate’s staff is set to offer assistance to Mongolian visitors in Phuket and its neighbouring provinces, according to the ambassador.

Nutthaphong, who was appointed Mongolia’s Honorary Consul for Phuket on August 28, emphasised the unwavering commitment of both nations to strengthen their bilateral relations through knowledge and cultural exchanges, even after 49 years.

In light of the weekly flights scheduled to commence next month between Phuket and Ulaanbaatar, the Mongolian capital, the island is set to welcome an estimated 15,000 Mongolian visitors in the coming year. Currently, there are three direct flights weekly between Bangkok and Ulaanbaatar.

Nutthaphong expressed optimism that the consulate’s inauguration would also stimulate an influx of Thai visitors to Mongolia.

In the pre-pandemic year of 2019, approximately 6,000 Thais visited Mongolia, with about 16,000 Mongolians visiting Thailand. Despite easing pandemic travel restrictions, only 1,118 Thais visited Mongolia last year, while 5,245 Mongolians made their way to Thailand, reported Bangkok Post.

In an effort to bolster its tourism sector, the Mongolian government has launched a campaign dubbed “Years to Visit Mongolia.” The initiative aims to attract one million foreign visitors, contributing an estimated USD 1 billion to the economy, which is equivalent to roughly 15 percent of the country’s GDP. Moreover, Thais are granted the privilege to travel to Mongolia without a visa.

Thailand and Cambodia have reaffirmed their commitment to strengthen their relationship, with a shared goal of increasing bilateral trade to USD 15 billion by 2025