Hunched against the early winter chill, Dashpurev Tserendeleg points out the horses on a nearby mountain slope, while a small throng of students and tourists peer through binoculars and take pictures on their phones.

With their stocky bodies and thick necks, they resemble ponies more than horses. Known to Mongolians as takhi and to the rest of the world as Przewalski’s horse, they are the only equine breed never to be domesticated – and the fruits of one of the most successful ever wildlife reintroduction schemes.

“Horses are central to our culture. Everyone is glad to have them back,” Dashpurev says.

Hunted to extinction in the wild in the 1960s, today there are nearly 1,000 Przewalski’s horses at three sites in Mongolia, with more in China and Kazakhstan. The biggest population – numbering 423 – is in central Mongolia’s Hustai national park, the descendants of 84 animals airlifted from European zoos in the 1990s.

Each year they attract tens of thousands of visitors to this small patch of pristine mountain steppe just 100km from the capital, Ulaanbaatar.

“Before the reintroduction, nobody believed we could save this species,” says Dashpurev, who runs Hustai national park. Since then, the International Union for Conservation of Nature (IUCN) has downgraded the risk status of Przewalski’s horse twice: “Our biggest achievement,” he says.

The success stands in stark contrast to other parts of Mongolia. Over the past three decades, the country’s wildlife has been decimated by a combination of hunting, the climate crisis and overgrazing, with creeping desertification turning huge tracts of its vast grasslands into dust.

“Mongolia’s wildlife is in crisis,” says Tungaa Ulambayar, the local representative of the Zoological Society of London. “It is in real danger of being wiped out.”

This crisis began with the fall of the iron curtain in the 1990s, which heralded the end of Mongolia’s communist era and forced an abrupt transition to a free-market economy. The result was economic chaos, shuttered factories and mass unemployment.

“The country basically collapsed,” says Kirk Olson, an American wildlife biologist who spent more than two decades in Mongolia. “It was a free-for-all and the only resource left was the natural environment, so everyone hunted to survive. You would see cartloads of marmot skins, antlers and wolf parts in the market. Anything with four legs was sought out.”

Two saiga, a type of bulbous-nosed antelope, in Mongolia.

A group of red deer females in Hustai national park, Mongolia

Three argali, a wild mountain sheep, running in grassland

A tarbagan marmot in Hustai national park, Mongolia.

After the fall of communism in the 1990s, numbers of many species plummeted, including, clockwise from top left: saiga, a type of bulbous-nosed antelope; red deer; marmot; and argali, a wild mountain sheep

The effects were devastating. Red deer numbers plummeted from 130,000 in 1986 to just 8,000 by 2004, while the marmot population fell from 40 million to 5 million in 2002. Between 1999 and 2004, numbers of saiga, a type of bulbous-nosed antelope, dropped by 85%; and argali, a wild mountain sheep with spiral horns, fell by 75% between 1975 and 2001.

At the same time, communist-era limits on private property were lifted and livestock numbers surged. Today, the national herd stands at 71 million animals, according to the government – far outstripping the carrying capacity of Mongolia’s grasslands, 70% of which are degraded. An environment ministry spokesperson says this overgrazing could lead to the “eventual extinction of natural plants.”

“When you travel around Mongolia, you think, ‘Wow, there’s nothing out there,’” says Olson. “But actually, it’s full of domestic animals. That means less grass for wildlife, except in a few rocky crags the livestock can’t get to. Everything else gets bitten right down to the dirt.”

Even in protected areas like Hustai, livestock are causing difficulties. On a recent afternoon, a herd of 50 domestic horses could be seen grazing less than 200 metres from a group of eight wild Przewalski’s horses. Each winter, people release between 4,000 and 5,000 domestic horses in the protected area, says Batmunkh Tserennorov, a Hustai ranger. “We have to chase them off every day.”

The climate emergency is putting more pressure on the country’s wildlife. Temperatures on the Mongolian steppe are rising three times faster than the global average, bringing more extreme weather events, including droughts, flash floods and harsh winters that wipe out large numbers of domestic and wild animals.

These have particularly severe effects on species that stay in one place, such as marmots. Mobile species such as gazelles and antelopes, meanwhile, are having migratory routes cut off by new roads and railways, built to serve the vast copper and coalmines that have emerged in the southern Gobi desert over the past two decades.

Faced with this crisis, the government has launched several initiatives to conserve and replenish wild areas. In 1998, Mongolia pledged to protect 30% of its territory by 2030 – a goal adopted by 100 other countries in 2021. So far it is on 21%. Last year, the president launched a drive to plant 1 billion trees by 2030 and tough fines have had success in curbing illegal hunting.

Yet these efforts are hamstrung by a lack of funding. According to a recent study, Mongolia has by far the fewest rangers to each square kilometre of protected territory of any country in Asia. As a result, some of its conservation areas are “paper parks”, says Buuveibaatar Bayarbaatar, a scientist at the Wildlife Conservation Society. A spokesperson for the government says it was “supporting the policy of updating and improving the equipment required for the work of the rangers”.

Crucially, Mongolia has no law regulating the use of its pastureland. Introducing this legislation would be difficult but it is the most important measure needed to bring down the number of livestock and address overgrazing, says Buuveibaatar.

“The government wants to grow the economy, that’s the key thing for them, so they are putting a lot of effort into expanding agriculture and mining,” says Buuveibaatar. “Wildlife is not a priority.”

The environment ministry spokesperson says that according to Mongolia’s long-term policy plan “the national traditional customs of nature protection will be preserved,” that “economic and industrial development will be environmentally friendly” and new infrastructure projects are subject to environmental impact assessments. They added that a livestock tax was passed in 2020 to bring down the total number of domestic animals.

Olson says legal protection should apply to more areas. “There needs to be a much more integrated approach that doesn’t just focus on the protected areas, but on the whole ecosystem,” he says. “Places outside the protected areas are pretty important for wildlife, too.”

Hustai national park provides a possible conservation model. Alongside the Przewalski’s horse, it has rebounding populations of marmots, deer and gazelles.

At his office near the park’s entrance, Hustai’s wildlife biologist Dorj Usukhjargal explains the elements behind its success: long-term international partnerships, decades of scientific research and rangers who collect data alongside evicting livestock.

The Przewalski’s horse reintroduction scheme took decades of preparation, starting in 1974 with efforts to map out the genetics of the last surviving animals in captivity, and select the most robust and genetically diverse horses.

Compensation was offered to herders who lost grazing access to the area when it became a park, with funds provided by the Dutch government. Hustai national park is managed by an independent trust, rather than the government, and is free to raise its own funds. It does this by running a small camp for tourists who to come see the horses, and by charging an entrance fee.

The park is small, covering just 506 sq km (195 sq miles), compared with the 27,000 sq km of Gobi Gurvansaikhan national park, which makes it easier to patrol. Hustai is also a short drive from the capital, making it accessible to tourists, who mostly come to see the horses.

But most of Hustai’s principles could be easily applied elsewhere, Usukhjargal says. “The Przewalski’s horse reintroduction scheme is a worldwide example of how to save a large mammal,” he says. “Every country can follow it.”

Mongolia's economy will grow by 5.8% in 2023, 6.2% in 2024 and 6.4% in 2025, the World Bank said in the latest report.

Inflation is expected to moderate slightly in most countries in East Asia and the Pacific, depending on slowing global commodity prices, improving food supplies and realistic inflation expectations.

Inflation rates are expected to remain high in Laos and Mongolia, the report noted. In particular, factors such as currency depreciation and high prices for imported goods and products will continue to affect the economy.

Tight monetary policy is also expected to continue beyond 2022, which will curb economic growth in near future.

A slowdown in Chinese production will cause damage to regional commodity exporters including Indonesia, Mongolia, Myanmar and the Solomon Islands, leading to lower commodity demand and prices.

BEIJING/SINGAPORE, Jan 12 (Reuters) - China's imports of Mongolian coking coal may rise to a record in 2024, after more than doubling in 2023, on improving transport links and its lower price versus domestic and international supplies, traders and miners said.

China is the world's biggest steel producer and coal importer and a shift to abundant Mongolian supplies could come at the expense of Australian imports of the steelmaking ingredient. Australia, the world's second-biggest coking coal miner, was China's largest supplier until a 2020 diplomatic dispute.

This year's coking coal imports from landlocked Mongolia may rise more than 10% as newly expanded road links enable more truck traffic, a Beijing-based coal trading executive estimated. China imports Mongolian coal mostly by truck through seven ports along a border that stretches more than 4,600 km (2,858 miles).

Beijing and Ulaanbaatar have simplified customs clearances to bolster coal imports, which have been hindered by transport bottlenecks, said several Chinese coal traders. More truck lanes have been added at land ports and customs staff have been asked to expedite document checks, while automated vehicles are being deployed to move coal across the border to warehouses on the Chinese side, said the Beijing-based executive.

"The expanding trade is very much driven by the two governments," said a Singapore-based senior Chinese coal dealer.

"During the Australian coal ban, the Chinese government looked to Mongolia as a prospective replacement and has since worked on improving the transport links," said the trader.

Australian coking coal imports plunged when Beijing slapped an unofficial ban on several commodities after Canberra called for an investigation into the origins of the COVID-19 pandemic, although trade resumed last year as relations warmed.

To bolster Mongolian imports, authorities in the Chinese border town of Ganqimaodu, the entry point for nearly 60% of China's Mongolian coking coal, invested 40 million yuan ($5.58 million) in 2023 to improve infrastructure, according to Chinese state media.

As a result, in the first week of December, an average of 1,136 trucks crossed each day at Ganqimaodu, data from Haitong Securities showed, up 39% from a year earlier.

CHEAPER MONGOLIAN COAL

Thinning margins at Chinese steelmakers caused by the downturn in China's property sector have boosted the demand for cheaper Mongolian coal, analysts said.

"Both Chinese domestic and other major international coking coals are unaffordable to Chinese steel mills, who have been struggling to make ends meet," said Simon Wu, a consultant at Wood Mackenzie.

Mongolian coking coal was imported at an average of 974 yuan ($135.98) per ton last year, some 20% below Russian coal and half the cost of Australian coal, a Reuters analysis of Chinese customs data shows.

China's imports last year of Mongolian coking coal likely topped 50 million metric tons, traders estimated, doubling 2022 levels and dwarfing the 2.3 million tons imported from Australia recorded by Chinese customs in the first 11 months of the year.

The import boom has boosted shares of top Mongolian producer Tavan Tolgoi JSC (TTL.MNE) by more than double since the start of 2023, and shares of Hong Kong-listed Mongolian Mining Corp (MMC) (0975.HK) have more than tripled over the same period.

MMC, with two mines in the southern Gobi, expects to operate near full capacity this year, matching the 1.6 million to 1.7 million tons of coking coal it shipped to China each quarter in 2023, CEO Battsengel Gotov told Reuters.

In 2022, Mongolia completed a 30 million to 50 million ton per year rail line from Tavan Tolgoi to the town of Gashuun Sukhait, across the border from Ganqimaodu, but it has not been linked to China's rail network.

"The next important task will be to complete the cross-border railway interconnections," said MMC's Gotov.

New railway lines are expected to increase Mongolia's railway export cargo volume of all types of goods from 8.2 million tons in 2023 to 80 million tons by 2030, according to data cited by China's People's Daily in December.

($1 = 7.1626 Chinese yuan renminbi)

Reporting by Chen Aizhu in Singapore and Andrew Hayley in Beijing; Editing by Tony Munroe and Christian Schmollinger

Central Asian countries, Afghanistan and Mongolia raised their imports of Russian fuel by around 28% in 2023 to almost 6 MMt, partially offseting a decline in Russian supplies to Europe, according to traders and industry data.

Russia has drastically cut supplies of commodities, including oil and gas, to Europe amid deteriorating relations over the conflict in Ukraine.

Afghanistan's Taliban government doubled purchases of Russian liquefied petroleum gas (LPG) last year to 103,850 tons, while Russia tripled gasoline exports to the country in 2023 to 325,000 tons, according to the data.

Russia has not formally recognized the Taliban as the legitimate government in Afghanistan, but was one of the first countries to make contacts and clinch business deals with the group following its return to power in 2021.

A year later, Afghanistan and Russia signed a deal for gasoline, diesel, gas and wheat supplies after Moscow offered the Taliban administration a discount to average global commodity prices.

The move was the first known major international economic deal struck by the Taliban since it returned to power.

Russia supplies fuel to Central Asia mainly via railways, while pipeline exports of diesel to the region account for some 9% of total deliveries to the ex-Soviet republics of Kyrgyzstan, Kazakhstan, Tajikistan and Uzbekistan.

Russian oil pipeline monopoly Transneft said this week that it increased fuel supplies to Central Asia by 29.3% to 530,000 tons in 2023.

According to traders and industry data, Russian gasoline exports to Central Asia, Mongolia and Afghanistan jumped by a third last year to 2.441 million tons.

Supplies of diesel to those markets increased by 26% to 2.943 million tons, while flows of jet fuel rose by 21% to 554,000 tons.

Fuel oil exports jumped 2.8 times to 719,500 tons, while bitumen and LPG deliveries doubled to 500,000 tons and 469,000 tons respectively.

Mongolia accounted for most of Russian motor fuel supplies. It imported 708,000 tons of gasoline via railways last year, an increase of 12%. Its diesel purchases rose 39% to 1.222 million tons.

U.Khurelsukh, President of Mongolia, gave an official invitation to the heads of state of the two neighboring countries, China and Russia, to pay a state visit to Mongolia this year.

Vladimir Putin, President of Russian Federation, and Xi Jinping, President of People’s Republic of China, sent new year wishes to U.Khurelsukh, President of Mongolia, and wished him success in work. They also sent new year wishes to all the people of Mongolia and wished Mongolia prosperity and well development.

During the "Belt and Road" conference held in China in October 2023, U.Khurelsukh, President of Mongolia, held meetings with Vladimir Putin, President of Russian Federation, and Xi Jinping, President of People’s Republic of China, and finalized mega projects such as transferring natural gas pipeline through Mongolia, trade tax reduction, and the start of the Erdeneburen hydroelectric power plant project.

The implementation of Resolution No. 07 of 2022, "On Giving Directions to the Government," to support the production of domestic milk and dairy products and increase the Government's support to the sector" was reported to the Standing Committee on Industrialization Policy of the State Great Khural on the 9th of this month.

According to the report by Deputy Minister of Food, Agriculture, and Light Industry M.Gankhuleg, currently, 63.2 percent of milk and dairy products are sourced domestically, and the rest are imported from abroad. He mentioned that efforts are being made to increase and continue providing incentives for milk. Initially, the milk incentive applied only to cow's milk, but starting from November of last year, it has been extended to all types of milk. As of today, MNT 1000 is given for 1.0 liter of milk to 24 factories and workshops in 10 aimags. As part of the "Food Revolution" program initiated by President of Mongolia Khurelsukh Ukhnaa, 22 types of equipment for the production of milk and dairy products were exempted from customs duties. In 2023, loans for circulating capital and investment were granted to more than 1,800 enterprises in the food industry through 10 commercial banks. The five-year loans with a 6.0 percent interest rate for the purpose of establishing intensive dairy farming have been allocated to 49 citizens and enterprises totaling MNT 5.6 billion out of the budgeted MNT 34 billion. Additionally, loans totaling MNT 18.8 billion were granted to eight enterprises for the construction of baby milk and formula processing plants.

In connection with the presentation on the implementation of Resolution No. 07, members of the State Great Khural asked questions. To increase the supply of liquid milk to national industries, Member of the State Great Khural J.Batjargal spoke about the development of intensive farming in agricultural areas, milk collection, the development of high-yielding animals, improvement of breeds, and production of import-substitute products. Meanwhile, Member of the State Great Khural Ts.Tuvaan mentioned that the milk incentive has been effectively implemented since 2020 and stated that it is necessary to extend the incentive period to increase the milk supply in the cool season.

G.Ganbold, Member of the State Great Khural and Chairman of the Standing Committee on Industrialization Policy touched on the inclusion of incentives for locally operating dairy factories and workshops. He warned that it would be impossible to monitor if the incentives were flattened and advised that the regulations should be improved in more detail.

Subsequently, at the meeting of the Standing Committee on Industrial Policy, information was presented about the implementation of the directions given by the Standing Committee on optimizing the financial structure of the state to support small and medium-sized industries, increasing resources, expanding the market, and increasing sales. The Ministry has studied the international experience of the modern financial structure and system for supporting small and medium-sized industries and has developed a proposal for the establishment of a Small and Medium-sized Industry Corporation, submitting it to the relevant departments.

As part of the '10-billion program to protect health and recover the economy' related to supporting jobs a total of MNT 2.0 trillion was provided to 25,000 borrowers in the small and medium industry sector, protecting 110,000 jobs, said Deputy Minister of Food, Agriculture, and Light Industry M.Gankhuleg. The Government's implementing agency, the Department of Small and Medium Enterprises, granted MNT 88 billion in loans from 2020 to 2023. Additionally, the Government approved the decision to exempt new equipment from customs duty until the end of 2026 to update the technology of small and medium enterprises. As a result of the establishment of working groups in four aimags in charge of ensuring the participation of small and medium-sized enterprises in the supply chain of mining companies and major projects, the sales in 2023 reached MNT 4.6 billion in the four aimags while nationwide procurement was more than MNT 200 million in 2019.

Members of the State Great Khural, namely N.Naranbaatar, J.Batjargal, and T.Aubakir, posed questions and made statements related to the implementation of the resolution by the Standing Committee. They articulated their positions on the stability of cooperation between large companies and small and medium-sized enterprises, the repayment status of loans and financing, the enhancement of the loan guarantee system for small and medium-sized enterprises, the augmentation of resources, encouragement of repayment through interest discounts, and the development of small and medium production clusters.

G.Ganbold, Chairman of the Standing Committee on Industrial Policy, advised paying attention to the "10-billion program" and the repayment of loans to small and medium enterprises.