Asian markets cheer up as China’s 200% trade surplus defies effects of trade spat with US www.rt.com

Exceeding all the analysts expectations, exports of goods from China saw a dramatic surge in May as Chinese trade activity demonstrated stiff resistance against the ongoing trade battle with Washington.
China’s trade surplus last month totaled $41.65 billion, marking nearly a 200 percent monthly growth against $13.84 billion fixed in April, according to the latest data released by China’s General Administration of Customs.

Mongolia declares war against syphilis www.xinhuanet.com

ULAN BATOR, June 10 (Xinhua) -- Mongolian Health Minister Davaajantsan Sarangerel on Monday declared war against the sexually transmitted disease (STD) syphilis, a growing public health concern in the East Asian country.

China's foreign trade up 4.1% in the first five months www.chinadaily.com.cn

China's foreign trade of goods went up 4.1 percent year-on-year in the first five months to 12.1 trillion yuan, customs data showed on Monday.

Foreign Minister holds official talks with his Singaporean counterpart www.montsame.mn

Ulaanbaatar/MONTSAME/. Paying an official visit to the Republic of Singapore, Minister of Foreign Affairs D.Tsogtbaatar held official talks with his Singaporean counterpart Vivian Balakrishnan on June 6.

Stock Exchange weekly review /June 3-7/ www.montsame.mn

Ulaanbaatar /MONTSAME/. During the week of June 3, 2019 to June 7, 2019, MNT515,524,704.78 worth of securities were traded through 5 trading sessions on the MSE.

Mongolia’s economy needs diversification www.zgm.mn

Blog by O.Bayarkhuu:
Mongolia’s unique feature or a particular thing that differentiates the country from others? Our special feature is a democracy and freedom of the press. Indicators of democracy are great enough. On papers and international reports, Mongolia is a beautiful country like a rose, a brilliant star of democracy. In reality, it is completely different.

Democracy is being separated from real life. It has been 30 years without a “freedom of development.”

Let us continue with the corruption-filled series of poverty alleviation of Mongolians, the emergence of populism, the issues in the independence of the judiciary, the obstacles of public institutions, and the societal stresses. Poverty did not improve significantly since 1995. Discussions on necessary improvement began in the XXI century. There are still no results. I am writing to make a conclusion about it.

Our economy needs only a few important factors. Let us look at the economy at a macro level. Only the mining sector growth is visible, but it is accounting for a big part of the economy. However, it is not a good thing in the long term as a macroeconomy. Why does the mining growth affect the economy? The IMF has implemented six programs in our country. IMF recommends that more flexible, budget-free economy and more importantly, higher employment, and profitable businesses. In the 1990s, the transition program was successful. The “Stand by” program has helped a lot in 2008-2009 during the global economic crisis. The next program started in 2016-2017. There is a light. The debt burden equaled 100 percent of GDP, which now stands at 70 percent. Mongolia has a GDP of USD 11 billion. The IMF’s sustainable development program is worth 5.5 billion. The economic growth has fallen from 17 percent to negative 2 percent when the IMF’s sustainable development program started. What has saved us improved the economy is actually the growth of China’s coal imports.

Our economy is dependent on many things. The infrastructure is not developed enough. Until now, almost 3 percent of the 1000 km of the road had pavement, the only line of the north-south railway, which is dependent on Russia’s geopolitics. When we try to build another railway, we will have to deal with Russia’s geopolitical interest. As long as we have Ulaanbaatar Railway JV, there will be Russian interests. I do not want to blame it.

However, the multi-pillar foreign policy choice is invoking to be friendly with all countries around the world. There is no such relationship with all countries. Also, there is no noticeable economic relationship improvement with any country. Although it is the world’s least densely populated area, Mongolia is clumping in the capital. Huge social issues are created because of this.

The dissociation had already processed and different social conditions are growing rapidly. Social licensing issues are serious. Anti-mining conflicts and disputes tend to rise in mining-dependent countries, and civil movements trigger social disintegration. Even with 70 million livestock, agriculture does not strengthen social capital. Mining has also dominated other sectors, which is a negative impact. We only talk about a single line of cashmere to improve the non-mining sector. There is no ongoing activity in the development of rural areas and the overall turnover of agriculture. If our cashmere enters the world market, China will be our rival.

There is no coordination between mining and other economic sectors, so there is a war between mining and livestock. Disintegration is accompanied by populism. Populism has started to break the fundamental principles of democracy.

In addition, Mongolian politics is a restriction to economic and social development. The policy is unstable and uncertain. There are 140 development policies and programs to be followed. Most recently, the “National Program on Unemployment and Poverty Reduction” was adopted. It was supposed to promote economic growth, reduce unemployment, alleviate poverty, become an exportoriented country, and encourage other products, leading sectors, public-private partnerships, and implement the goal of reducing unemployment and poverty by human development and social protection policies. I hope these do not diverge and eventually be forgotten or changed by the next program.

There are 2000 draft documents, conventions, and recommendations. There is no mechanism to control the implementation of these documents. None at all

In fact, the economics of postcommunist countries that transcend Central and Inner Asia are even more profound. Mongolia is left behind by economic diversification. Mongolia has been marked as the country with the unspecified economy. Even worse than Tajikistan. When it comes to primary products, it does not go further than adding value to natural gas. That is why there is no diversity, just as President Battulga Khaltmaa said, it is simply an “inefficient economy.”

Those people who received loans from the SME Development Fund should diversify the economy. Government funds do not cover the SMEs, but international funding is effective. However, it does not reach the level of economic diversification. Having an export-oriented economy can save this country, and the government expects that poverty will be eradicated with an exportbased economy. They convince people to believe it. However, they do not go farther than talks.

Worcester couple preparing to take part in 4,000 mile Mongol Rally www.worcesternews.co.uk

A couple from Worcester will take on the challenge of a lifetime as they take on an epic 4,000 mile journey across Europe and Asia.

Francesca 'Frankie' Jones and her partner Jon Drinkwater decided to take on the challenge of completing the Mongol Rally, an annual endurance driving challenge which invites drivers to get to Mongolia in “The worst car they can find” which must be one litre or less.

The duo’s journey will begin in Prague in July before heading through Belarus, Latvia, Russia and into Mongolia before coming back into Russia for the final destination of Ulan-Ude in Siberia.

In total, the pair’s drive is expected to take around two months, and they have been preparing themselves for the journey and the difficulties they could face

Miss Jones, 23, said: “We have been preparing by driving the Mitsubishi Pajero that we will be using and getting used to it.

“We have got a tent in the roof which we will be sleeping in and we have got part of another Pajero which we will be using for spare parts when we need to make repairs.

“The journey will be interesting because the visa laws have changed meaning we only have 30 days to get across Russia so it will be a bit of a race against the clock.

"We will be taking it in turns behind the wheel and splitting it into shifts to make it easier.

“We aren’t quite sure what to expect climate-wise because in Mongolia we have been told it is extremely hot in the day and extremely cold at night.

"It is daunting because some of the areas we will be going can be pretty wild, but we are so excited for it we will just have to see for ourselves what it is like."

As part of the challenge, Miss Jones and Mr Drinkwater are raising money for two charities: Cool Earth, which is a rainforest charity, and The Ickle Pickles Children’s Charity, which provides incubators for babies.

One of the criteria for taking part in the Mongol Rally is that teams must raise at least £1,000 for charity, as well as being unsupported and ensuring their car is removed from Mongolia after the completion of the drive.

The Mongol Rally was first started in 2004 when six teams started and four finished the course.

Drivers are given a starting point, just outside of Prague, and an ending point in Russia, after that they can decide on their own route.

In 2015, the final destination was moved 500 km north from Ulaanbaatar in Mongolia to Ulan-Ude in Russia to save money on exporting the cars back home.

In the guide to the Mongol Rally, the organisers say that the adventure is not for the faint-hearted, saying: "If it's not dangerous and you aren't lost, you're not on an adventure.

"Any ‘Help! We’re broken down in Tajikistan,’ type phone calls to Rally HQ will be met with a snort of derision and a click of the receiver."

For more about Frankie and Jon's fund raising efforts, go tojustgiving.com/fundraising/frankie-jones8 andcoolearth.org/campaigns/25864/mongol-rally-2019-2/

World's corporate giants project $1 trillion damage costs over global warming www.rt.com

Widely-debated climate change may cost the world’s biggest corporations nearly $1 trillion, according to the latest survey data from 215 listed firms, ranging from Apple and Microsoft to Nestle and UBS.
The study, compiled by a non-profit charity CDP (Carbon Disclosure Project), reveals that corporations realize that much of the pain may be inflicted in the next five years. At the same time, data reportedly shows that many corporations still underrate all the damaging impacts that may be potentially created if no cuts in carbon emissions occur in the near future.

“The contribution of ETT to Mongolia’s economic growth and development to vastly increase’” www.news.mn

Mr B.Gankhuyag, Chief Executive Officer of state owned Erdenes Tavantolgoi, a joint stock company where every citizen of Mongolia is a shareholder and owns and operates the largest undeveloped coking coal mine in the world. Erdenes Tavantolgoi JSC alone controls over 7 billion tons of coal reserves located in the South Gobi province and the company alone constituted over 6 percent% of the state budget in 2018 through taxes and fees alone.

Mr B.Gankhuyag has personally been involved in the Tavantolgoi project since inception of Erdenes Mongol LLC in 2007 and held various positions most recent being Senior Vice President of mine operations at Erdenes Tavantolgoi JSC (ETT) and in 2018 he was appointed the CEO of the company to lead the company into its next stage of growth.

Under his management ETT has been able to fully pay off all long and short term debts within the last 2 years, grow sales revenue to almost 2 trillion tugriks per annum last year and achieve a net profit of 807.7 Billion tugriks.

– First of all, we would like to thank you for accepting our invititaiton for the interview. From your biography, you have been connected with the Tavantolgoi project from the beginning, can you briefly tell us about your involvement?

– In 2007 in accordance with the Minerals Law, a state owned company Erdenes Mongol LLC was incorporated with the purpose of managing and bringing deposits of strategic importance into development. Erdenes Mongol LLC started with a workforce of only 5 employees which included myself, during my time I was involved in the management and development of strategic deposits on behalf of the state and worked on projects including Erdenet copper, Oyu-Tolgoi, Tavantolgoi, Baganuur and others for the purpose of maximizing the benefits received from the development of the strategic deposits by the state and the citizens of Mongolia.

On a personal note, my career at Erdenes Mongol LLC and Erdenes Tavantolgoi JSC has taken me through various roles from specialist, department head to Vice President, Senior Vice President and most recently in my current role as CEO of Erdenes Tavantolgoi JSC. In terms of coal, up until a few years ago coal and in general global commodities market had been in a slump with steep price declines, however prices have seen a tremendous increase since 2016 and coking coal prices are expected to remain stable at current levels over the medium term, supported by favorable supply and demand dynamics.

I can say that our company has been able to capture this price increase efficiently, over the last few years we have fully paid of the initial prepayment amount received from Chinese state owned Chalco in the amount of $350 million, plus $200 million received from the Development Bank of Mongolia and millions of dollars more in loans from domestic commercial banks from our sales revenue and still remain with a very strong cash flow and balance sheet. In 2011, ETT only exported roughly about 280 thousand tons of coal but has now grown to finish 2018 with 13.1 million tons of coal exported, 2 trillion tugriks in revenue and finished the year with 807.7 billion tugriks in net profit. Furthermore, since the beginning of 2019 our company is still continuing to grow our production and increase our coal exports and as of May this year has reached over 6.5 million tons of coal exported and plan to finish the year with over 1 billion USD in sales revenue.

Our company is working very hard to develop ETT into a world class coking coal project. In recent years, we have been revising our corporate strategy, focusing on raising capital and development of special projects such CHPP, power plant, railroad and also internally focusing on improving our operations, efficiency, reducing our costs, opening new logistical routes, increasing our revenue and margins. Furthermore, in accordance with related parliamentary and GOM resolutions regarding the company, my team is working diligently to list ETT on international stock exchanges.

– What do you believe are the core assets of your company and how would you review the performance of ETT JSC been under your leadership?

Core asset of any company is not equipment, physical plant, technology or even intellectual property but the most valuable asset is the people who work there or the human capital. Any and all plans to move your company forward always begins with the people who work there. Therefore, I would have to say the core asset of ETT are the employees and the miners and their dedication to this company.

ETT has come a long way since its inception in 2011, the company was initially heavily burdened with debt but still survived through the difficult commodity price cycles and now has come out stronger than before. The company has been able to turn a net profit of 343 Billion MNT in 2017 and 807.7 Billion MNT in 2018, whereas all the previous years operated at a loss. The recent demand for coking coal has played a major role in the turnaround of the company but importantly the management team and employees of our company have sacrificed much through their relentless work efforts and their dedication to this company and have been able to capture this upswing.

I was grateful to see our teams and miners’ efforts, dedication and the performance of ETT being honored in 2018 as we won “Best Management” category from the “Bloomberg Awards”. It was a great honor to receive this award on behalf of our team as it highlighted the dedication, persistency of our employees and their efforts to see the Tavantolgoi project succeed and become the driving engine of economic growth for Mongolia. Chamber of Trade and Commerce has also recognized ETT for its corporate performance and management improvements in 2018 and placed our company as the top 2 corporate performers in the country alongside Erdenet Copper mining. In terms of various taxes and the contribution to the state budget ETT has been a top contributor within the last 2 years with 236 Billion MNT in 2017 and 479 Billion MNT in 2018.

I would contribute the performance improvements and the successes of the company to our valued employees and miners, over the years our workers have become much more efficient at their jobs with experience gained over the years. ETT has been through many tough times but has always been able to pull through and come ahead.

In May of this year ETT reached a milestone achievement of 50 million tons of coal produced and exported since beginning in 2011 but Tavantolgoi itself is the largest undeveloped coking coal deposit in the world with JORC compliant ROM resources of 7.4 billion tons. Therefore, you can imagine the potential of this project and the scale of operations that can be achieved in the future and I would see the company achieve production and exports of over 30 million tons per annum as per Feasibility studies within the coming years.

– It is the expectation of many people in Mongolia that ETT will directly benefit the people of the country, can you share with us your views and what the people can expect from ETT?

In the coming years I plan to increase production capacity and coal exports to over 35 million tons per annum from the current 15 million tons per annum. As the company currently prepares for the IPO to raise capital on international markets, ETT plans to use the funds to increase efficiency, improve logistics and to finance projects that add value and will maximize revenues. Under the guidance of the Ministry of Mining and Heavy Industries, our company for the past year has completed the preparation work for the listing and currently is in the process of putting the necessary team of domestic and international advisors and experts to complete the listing process.

I believe as ETT completes the IPO process, the company will come out much stronger and more efficient than before with international expertise and improved governance in place. As previously stated, the potential for the Tavantolgoi project is tremendous given the size of the resources and requires large scale investments in CHPP, water and energy supply and also infrastructure projects such as railroad that can not only vastly increase the amount of coal that can be exported but greatly reduce the cost of logistics and improve profit margins.

ETT is currently 85 percent owned by the Government of Mongolia and 15 percent owned by the citizens and domestic companies, as the value of the company increases so does the holding of the state and the people who own the shares. Therefore, ETT directly can contribute in two ways one being the value of shares increasing over time and the other is more directly through distribution of dividends to shareholders. However, ETT contributes indirectly as we employ over 10,000 people from subcontractors, suppliers, and truck drivers but also as one of the biggest contributes to the state budget in taxes and through funding of social projects such as Tavantolgoi Fuel to reduce smog and pollution in the city of Ulaanbaatar.

I believe that over the coming years the contribution of ETT to the economic growth and development of the country and the financial and social betterment of the citizens of Mongolia will vastly increase and that is what I am striving to achieve.

– Many citizens of Mongolia as shareholders in ETT were expecting dividend payment from the profits made in 2018 but your BOD made the decision not to distribute any dividends, can you explain your position on the matter?

In 2018 the company made a net profit of 807.7 Billion MNT, ETT has operated profitably in the last 2 years since its inception but in 2017 we paid off all short and long term debts to become a debt free company. As for 2018, myself and the other executive managers of ETT concluded that the company was in a financial position to distribute dividends and submitted our proposals to the BOD of the company and in accordance with the company law the BOD made its decision that it was more efficient to invest in infrastructure project, to finance the construction of the railroad and this decision was introduced at our annual shareholders meeting.

As expected this decision was a hot topic of discussion among the general public, with ETT, every citizen of Mongolia is a shareholder and there were lively debates on the necessity to distribute cash to citizens or to use the funds for investment purposes. The BOD has the right to make the final decision on this matter but my personal view has always been that ETT must contribute to the betterment of the citizens of Mongolia and the economic growth of the country and I have always viewed my duty is to lead ETT in reaching its fullest potential and become a world class operation.

– What is being done within the framework of informing public about the operations and activities of the company, in other words creating transparency?

I regularly have make media presentations and updates myself to inform the citizens of Mongolia on the performance of the company and have also opened in various locations “Information Center for 1072 shares” where the general public can come to receive any advice from opening brokerage accounts to information on their shares. Our information centers have been very well received by the general public.

Furthermore, we have formed advisory councils consisting of professionals in their respected fields to advise the management of the company on certain matters, the members of the advisory council were selected by the general public as well.

In terms of ETT, not only are job openings posted on our website like most companies but procurement tenders, coal purchase bids and addition information are publicly accessible. Therefore, I am leading ETT on the path to become the most transparent company in regards to its operations because I believe that being transparent is crucial for ETT as the citizens of Mongolia are shareholders in the company. However, it is quite unfortunate that some people will take advantage of this transparency approach and use it for personal or political gain but regardless our company and our employees will always strive to make ETT reach its full potential and become a world class operation.

– Thank you for your time for the inteview with us. We wish you and your company every success the future.

– Thank you and I wish you and your team the best.

by Ankhtuya Economist

Oyu Tolgoi – the lynchpin of the Mongolian economy www.news.mn

Mongolia attracted foreign direct investment worth USD 661.8 million during the first quarter of 2018, up by 7.5 percent year-on-year.