According to the first four months of 2018, gross production of industrial sector reached MNT 4.5 trillion, with an increase of MNT798.8 billion (21.5 percent) as compared with the same period of the previous year.

The production of mining and extractive industries increased by MNT567.9 billion (21.0 percent), which was mainly influenced by the increase of extractions of coal (35.4 percent) and metal ores (14.6 percent). Extractive industry makes up 72.3 percent in the gross production of industrial sector.

Major commodities of mining and extractive industries include 14.9 million tons of coal, 445.4 thousand tons of copper concentrate, 2.9 tons of gold, 1.8 thousand tons of molybdenum concentrate, 1.0 million tons of iron ore concentrate, 21.3 thousand tons of spar concentrate, 30.0 thousand tons of zinc concentrate, 2.3 million barrels of oil and 4.8 thousand tons of copper cathode.

As of the first four months of the year, the sector accumulated MNT694.8 billion to the state budget as taxes, fees and royalties. MNT 11.5 billion was accumulated from gold mining, MNT 255.8 billion--from coal, MNT 37.7 billion -- zinc, MNT 352.0 billion --copper, MNT 8.3 billion --iron, MNT 4.6 billion --fluorspar and MNT 25.0 billion from others. The income accumulated to the state budget increased by MNT 229.8 billion or 1.5 times, compared to the same period of the previous year.

In 2018, it is planned to extract 8.1 million barrel or 1.1 million tons of oil, accumulating MNT223.4 billion at the state budget. As of May 11, it has extracted 2.44 million barrel or 310 thousand tons of oil, with a 30.16 percent fulfillment of the plan. Moreover, 2.38 million barrel or 300 thousand tons oil were exported. As of April 30, the oil export brought MNT73.4 billion to the state budget.

M.Unurzul

ADB operations in 67 countries, 48 in the Asia Pacific region, totaled 32.2 billion USD, including 11.9 billion USD in co-financing, last year.

As of March 31, 2018, the Mongolian government received 2.14 billion USD in loans (58 concessional loans and 14 ordinary capital resources), 103.8 million USD through 107 technical assistance and grants, 101.6 million USD in project and technical assistance co-financing, 94.5 million USD in non-sovereign loans (four loans), and 101.5 million USD in grant funding from the Japan Fund for Poverty Reduction.

To date, 38 loans and grants have been distributed to Mongolia through 29 projects with the total net amount of 1.15 billion USD. Currently, there are 43 ongoing technical assistance, 14 of which were approved in 2017. These assistances are worth 9.7 million USD. The total value of all ongoing technical assistance amount to 42.92 million USD and if we look closer at their allocation, 24 of them are for capacity building, 11 for project preparatory, seven for policy advisory, and one for regional technical assistance.
Loans and Grants approved in 2017

Last year, ADB projected almost 400 million USD for six new and ongoing projects.

No Project Name Amount (million USD) Source
1 Social Welfare Support Program, Phase II (PBL) 150.0 OCR
2 Banking Sector Rehabilitation and Financial Stability Strengthening Program 100.0 OCR
3 Ulaanbaatar Urban Services and Ger Areas Development Investment Program (Tranche-2) 67.85 OCR
4 Sustaining Access to and Quality of Education During Economic Difficulties Project 50.0 COL
5 Ensuring Inclusiveness and Service Delivery for Persons with Disabilities Project 25.0 COL
6 Community Vegetable Farming for Livelihood Improvement 3.0 JFPR
7 Ensuring Inclusiveness and Service Delivery for Persons with Disabilities 2.0 JFPR
TOTAL: 397.85 
OCR = ordinary capital resources, COL = concessional OCR lending, JFPR = Japan Fund for Poverty Reduction, PBL = policy-based loan

Speaking at the Bank of America Merrill Lynch conference in Miami, chief executive Jean Sebastien-Jacques said he remained optimistic about the medium to long-term global growth outlook. However, he mentioned volatility in markets, trade wars and governments efforts to get greater share of their mineral wealth — most times to the detriment of private companies — as growing concern for investors in the natural resources sector in the short-term.

Last year, Rio Tinto was responsible for half of the total cash returns across the mining sector.
“From the DRC and South Africa to Mongolia and Australia [resource nationalism] is gaining momentum,” he said, adding he was optimistic that common sense in all those cases would prevail.

Major miners operating in the Democratic Republic of Congo, Africa’s top copper producer and source of over 60% of the global cobalt supply, are vigorously fighting a new mining code. The fresh legislation strips away a stability clause protecting existing investments from changes to the fiscal and customs regime for 10 years, introduces a 50% windfall profits tax and gives powers to the mines minister to hike royalties on minerals considered “strategic”.

It all began in Indonesia, which imposed new rules on the exports of unprocessed ore early last year. Tanzania followed suit imposing two months later a ban on exports of gold concentrates. Something similar happened in South Africa, which last year unveiled a revised mining code that would have imposed a 1% tax on mining companies’ revenues – as opposed to their profits, as is common.

In Mongolia the government claims that Oyu Tolgoi, a copper joint venture run by Rio, owes $155 million in unpaid taxes. A claim the company denies.

Miners are also facing higher costs, Jacque said.“In this environment, asset quality really matters and operating capability is critical. Protecting margins and generating cash will be hard across the industry.”

Rio’s boss said that, despite the challenges, the industry should continue its efforts to keep costs and debt under control and so deliver better returns to shareholders.

“This is why we are actively shaping our portfolio to focus on the best assets…… in commodities with sound long-term fundamentals. This will further drive sector leading return on capital employed,” he said, adding that last year Rio Tinto was responsible for half of the total cash returns across the sector.

More than half of the HIV-infected people are between 20 and 44 years old. About 99 percent of the infections were sexually transmitted, the report said.

The first case of HIV infection in Mongolia was recorded in 1992. Since then, 40 people have died of AIDS in this Asian country with a population of over 3 million.

The 2.5-year project aims to develop local community-based tourism. This is a good way for people to improve their income by introducing their traditional lifestyle to foreign tourists while restoring and preserving the forgotten heritage. The project will be implemented in Bayankhongor, Uvs and Selenge aimags in cooperation with the world’s tourism leader, Thailand.

Deputy Director-General of TICA Banchong Amornchewin said “I am delighted to share Thailand’s experience, achievements and advantages in tourism sector with Mongolia. Last year, Thailand welcomed 35 million tourists. Bangkok is the leader in attracting international tourists, followed by London. We will share not only the achievements, but also the failures we experienced.”

Total budget of this project is about EUR 500.000 and 200.000 will be funded by the German Government, another EUR 200.000 by the Government of Thailand and EUR 50.000 by Mongolian Government.

B.Misheel

He notes that sufficient access to water for nomads’ personal consumption and livestock could help prevent large-scale migration into cities and rural towns.

The industry is gathering in Hong Kong for LME Asia Week, but spirits may be dampened somewhat by a new report giving a muted assessment of the effects of Beijing's ban on certain types of copper scrap imports.

The overall net impact on the supply of copper scrap in China will be much smaller at around 100 kiltonnes
The price of copper rallied from the mid $2.60s when rumours of a ban first emerged in August-September last year, but last month's official confirmation from Beijing has done little for the price.

Yanting Zhou and Sifang Liu, senior consultants for Wood Mackenzie, a research house, says while the ban only comes into effect at the end of the year most of the impact will be felt in 2018.

China's so-called category 7 scrap which includes electrical cables and motors with as little as 5% copper content need processing before it can be used in smelters and refineries and imports have already plummeted this year.

Category 6 imports (average 95% copper content) can be fed directly to refineries and are not banned. Processors outside China have sprung up in anticipation of the ban, and together with rising Chinese domestic scrap supply, would fill most of the shortfall says Wood Mackenzie:

Although import volumes of category 7 copper scrap will decrease in 2018, we anticipate that imports of category 6 copper scrap will rise as scrap-processing capacity is built up outside China. Meanwhile, domestic scrap supply is also expected to accelerate this year.

Overall, we believe the import ban will lead to a loss of around 300 kt of copper contained in imported scrap in 2018. The overall net impact on the supply of copper scrap in China will be much smaller at around 100 kt given the anticipated increase in domestic scrap supply this year.

The authors believe in 2019, Chinese copper scrap supply would return to positive growth again, rising by roughly 70kt.

Sentiment sours
After a 30% price jump in 2017, copper is down 6% so far in 2018 and the shift in sentiment is evident on derivatives markets with changes in the positioning of large-scale derivatives speculators such as hedge funds.

After hitting an all time record in September last year amid the excitement around the Chinese import ban, a month ago net long positions – bets on higher prices in future – fell to the lowest level since October 2016 (copper was trading around $2.20 a pound then).

While bullish positioning has improved, according to the CFTC's weekly Commitment of Traders data, so-called managed money investors were back in selling mode last week reducing net longs by 22%.

The 8th economic forum will focus on tackling pressing issues of the country and the Government will present mid-term investment program, reported G.Zandanshatar, Head of the Cabinet Secretariat. The forum is to held under the slogan ‘Let’s Combine Efforts’ and the plenary session to run under the topic ‘Development Model of Mongolia and General Investment Policy’. Furthermore, 12 sub-sessions on development of agriculture, tourism and economy, decentralization policy, mega projects, pension reforms and treasury fund will take place.

‘Mongolia Economic Forum’ is being organized in two stages this year and during the public and private discussion in this March, the Government's ‘Three Pillar Development Policy’ and amendments to Tax Law were discussed.

"Mongolian economy is expected to have 6-7 percent growth in upcoming two years. It is proper to attach attention on ensuring transparency of the accrued tax income and public funding and intercepting corruption this period of time. It is crucial that the Government to focus special attention to the forum if it intends to cooperate with private sector," stressed President of the Mongolian National Chamber of Commerce and Industry B.Lkhagvajav.

B.Batchimeg

Buman-Olz LLC has been operating at Khuut coal mine which has 294.2 million tonnes of brown coal reserve since 2009. The mine has an annual production capacity of 0.12 million tonnes of coal.

Currently, Buman-Olz LLC employs more than 130 local workers. The company has a plans to increase capacity significantly.