Mongolia’s frontier market and vast mineral reserves represent potentially lucrative opportunities for investors but vulnerability to external economic and financial shocks, ineffective dispute resolution, and lack of input from stakeholders during rulemaking warrant caution. Mongolia imposes few market-access barriers, and investors face few investment restrictions, enjoying mostly unfettered market access. Such franchises as fast food and convenience stores, outperforming expectations, suggest that investors can bring successful international business models to Mongolia. The cashmere-apparel and agricultural sectors also show strong promise. However, investing into such politically sensitive sectors as mining carry higher risk.

Mongolia attracts investors’ attention but has trouble converting interest into actual investments. Unless and until Mongolia embraces a stable business environment that both transparently creates and predictably implements laws and regulations, many investors will find its market too risky and opt for more competitive countries. An essential step to mitigating these risks is for Mongolia to implement the U.S.-Mongolia Agreement on Transparency in Matters Related to International Trade and Investment (known as the Transparency Agreement), which requires a public-comment period before new regulations become final. Mongolia has implemented some of this agreement but is five years behind full implementation of public-notice commitments.

2021 also saw resolution of some of the disputes hampering progress of the Oyu Tolgoi copper and gold mine, expected to provide 25 percent of Mongolia’s GDP as soon as 2024. Agreements over cost- and debt-sharing of a portion of the mine’s development, and commitments to more transparency by Oyu Tolgoi’s partners over management and development decisions, signals that Mongolia can and will work out disputes within the terms of its contractual obligations.

Government and parliament continue to address threats to judicial independence by implementing 2019 constitutional amendments and 2020 statutory judicial reforms that have improved transparency and reduced political influence in the appointment and removal of judges. Investors, however, continue to cite long delays in reaching court judgments, followed by similarly long delays in enforcing decisions, as well as reports that administrative inspection bodies, such as the tax authority, will fail to act on politically sensitive decisions or cases involving politically exposed Mongolians. Businesses note substantial and unpredictable regulatory burdens at all levels; and cite an excessively slow tax dispute resolution process as an indirect expropriation risk. In June 2022, parliament streamlined procedures for, and reduced the required number of, permits and licenses. Government effort to move delivery of most services onto digital platforms may also increase the efficiency of its business registration processes.

COVID-19 and Russia’s invasion of Ukraine are stressing Mongolia’s economy. In late 2021, Mongolia’s parliament passed its New Recovery Policy, a 10-year development plan to increase national productivity by improving transport logistics, energy production, industrialization, urban and rural infrastructure, and green development. This program depends on restoring market access for mining exports, the primary revenue source. However, as of early 2022, China’s zero-COVID policies continue to create bottlenecks along the Mongolia-China border. Meanwhile, Russia’s invasion of Ukraine, prompting unprecedented international sanctions on Russia, has created uncertainty about access to imports of petroleum products, electricity, and such key commodities as wheat and fertilizer.

See full statement on the link https://mn.usembassy.gov/2022-investment-climate.../

Twenty-eighth seed Mongolian women's team caused the biggest upset in the Women's Chess Olympiad, blanking seventh seed United States 3-1 in the third round of the Women's Chess Olympiad here at the four points Sheraton.

A determined effort on the top two boards helped the Mongolian eves keep the balance, and on the last two boards, they proved superior to cruise to what would be remembered as a remarkable victory. This early loss for the United States might prove crucial.

With eight rounds still to come in the 11-round team event, as many as 19 teams remained unscathed and now share the lead on 6 points apiece from three matches. With each match won by a minimal score of 2.5 points counted as two points, sometimes the relevance of the individual games between players gets under wrap.

The three Indian teams in the fray, including the top seed India A got into the winner's bracket for the third day running, but most of the closest rivals also cruised home with victories. Second seed Ukraine scored an impressive 4-0 victory over Slovakia, wherein top board player Mariya Muzychuk shrugged off her second-round loss and prevailed over Zuzana Borosova.

Third seed Georgia had to work hard for a full match point, but Nino Batsiashvili came to the team's rescue scoring an important win over Joanna Worek to secure a 2.5-1.5 victory as all other games ended in draws.

Showing the resolve they are known for, the Polish team had a field day against Vietnam and romped home with a 3-1 win, while Italian eves could only eke out one point out of four against fifth seed France winning by the same score.

With each round worth two points and most of the top seeds still in there with a clean score, the battles are only going to get tougher in the coming days.

Standings after Round 3 can be found at https://chessolympiad.fide.com/women-standings.

For a complete list of results, please visit the official website at https://chessolympiad.fide.com/women-results.

Ports in North China's Inner Mongolia Autonomous Region linking Mongolia are reopening as the COVID-19 outbreaks have eased there, which an expert said will further promote trade despite global uncertainties and geopolitical tensions. And, booming trade is expected to help alleviate Mongolia's economic difficulties.

Zhuengadabuqi Port in Dong Ujimchin Banner, bordering Mongolia, has formally resumed customs services, after it was shut down on September 15, 2021 due to the latest wave of coronavirus outbreaks along the China-Mongolia border, a staff member from Dongwu Customs, which is in charge of the port, told the Global Times on Sunday.

"In order for the port capacity to recover as soon as possible, the port opened a 'green passage' on July 25 that allows the passage of people and cargo from both sides, including vehicles and machines," said the staff member. By Saturday, a total of 108 vehicles and 350.6 tons of goods had been exported to Mongolia via the port, according to the staff member.

To prevent cross-border transmission of COVID-19, local authorities have set up specific areas for containers of coal and crude oil, while efforts have also been made to put the port under closed-loop management, the staff member said.

The reopening of ports linking China and Mongolia will boost the exchanges of major commodities including coal, crude oil and machinery, Sun Huijun, an expert on relations between China, Mongolia and Central Asian countries, told the Global Times on Sunday.

According to industry newspaper China Metallurgical News, Mongolia's coal exports surged 225.8 percent on a yearly basis to reach 2.36 million tons in June, the highest since February 2021. The country's coal exports to China jumped 224.2 percent year-on-year in the month to hit 2.1 million tons, it said.

Generally, major goods imported from Mongolia to China via Zhuengadabuqi Port are crude oil, coal and iron ore. In 2021, more than 145,000 tons of crude oil, 379,700 tons of coking coal and 1,270 tons of iron ore were imported through Zhuengadabuqi Port, according to customs data.

"With an international energy crisis amid the Russia-Ukraine conflict, increasing coal and oil imports from Mongolia will help increase strategic reserve of leading industrial materials for China," Sun said, noting that "ensuring smooth trade between the two countries will effectively reduce Mongolia's heavy economic pressure caused by the pandemic."

A report released by the World Bank in April projected that Mongolia's economy could grow by 2.5 percent in 2022, saying that its economic growth is being dragged down by protracted trade disruptions and logistical bottlenecks due to border closures.

In a sign of rapidly recovering trade, Xuzhou in East China's Jiangsu Province has launched a new freight train service to Mongolia, the Xinhua News Agency reported. Carrying about 440 tons of goods valued at $1.4 million, including motorbikes, aluminum empty cans and security doors, the train is expected to arrive in Ulan Bator on August 1, it said.

On July 20, a batch of aid commodities including steel plates, street lights and electric gates were transported through Uligi port in Inner Mongolia to Mongolia, marking the first temporary opening of the port this year, said a statement on the Hohhot customs website.

Due to the impact of the COVID-19 pandemic, Uligi Port was ordered to open only from the 15th to 25th of each month from March to December, and was first opened in 2022 on July 20, a staff member from Alxa customs, which is in charge of Uligi Port, told the Global Times on Sunday.

A total of 26.3 tons of cargo valued for 862,000 yuan was exported through the Uligi Port to the Mongolia on the first port-opening day, said the staff member.

"Mongolia on the other side of Uligi Port has abundant mineral reserve, including the world's largest coking coal mine," said the staff member, while noting that bilateral mineral trade has not started yet via the port.

The Chinese and Mongolian economies are complementary and have great cooperation potential, with China owning a large market, advanced technologies and sufficient capital, while Mongolia is home to rich mineral resources.

The two countries have maintained close economic relations. China has been Mongolia's biggest trading partner and the top source of foreign investment for 18 consecutive years. According to data from Chinese Ministry of Commerce, the bilateral trade volume hit $9.12 billion in 2021, up 35.3 percent year-on-year.

By giving play to China's advantage in infrastructure, the two countries should strengthen cooperation in this regard to realize infrastructure connections as soon as possible, Sun said, suggesting the two sides step up cooperation in emerging sectors including logistics, cross-border tourism and finance as well.

He said the booming economic cooperation between China and Mongolia will contribute to the development of the Belt and Road Initiative in the post-COVID-19 era and inject impetus into the recovery of global industrial and supply chains.

In Mongolia, the vaccine against COVID-19 has started being administered to children aged between 5 and 11 years old from today, August 1, on a voluntary basis.

There are about 500 thousand children aged 5-11 nationwide, of whom 25.7 percent are planned to be involved in the vaccination, reported Vaccination Department of the National Center for Communicable Diseases.

The World Bank is pleased to announce the appointment of Mara Warwick as the World Bank’s new Country Director for China and Mongolia and Director for Korea, effective today, August 1, 2022. Based in Beijing, Ms. Warwick leads a team that is managing an evolving partnership with China, a growing program of support to Mongolia, and a deepening knowledge partnership with Korea focused on innovation and technology.

Ms. Warwick has a distinguished World Bank career, serving as Country Director for Tanzania, Malawi, Zambia, and Zimbabwe in her last post. She also has extensive experience in China, Mongolia and Korea, having worked as Portfolio and Operations Manager for these countries in 2012-2016. She has lived in China several times since 1994, including in Beijing when she was the World Bank’s Senior Urban Environment Specialist from 2006-2010.

Ms. Warwick also served in 2016-2020 as World Bank Country Director for Brunei, Malaysia, the Philippines, and Thailand. Previously she was Sector Coordinator for Sustainable Development in Türkiye. Trained as an environmental engineer, she has expertise in flood management, urban environmental services, and disaster risk management. Before joining the World Bank in 2003, she worked as an engineer in the private sector. Ms. Warwick received her B.E. in Civil Engineering from the University of Adelaide, Australia and her M.S. and Ph.D. in Environmental Engineering from Stanford University in the US.

“I am very pleased to come back to China, Mongolia, and Korea,” said Ms. Warwick. “Over the years, I have witnessed firsthand the significant developments in the region since the 1990s. I look forward to working closely with all three countries, as vital World Bank partners, to help address development challenges and strengthen knowledge sharing.”

An Australian national, Ms. Warwick succeeds Martin Raiser, who has moved to Washington, DC to take on the role of Vice President for South Asia.

Over the last forty years, the World Bank’s relationship with China has evolved from one where China was a recipient of World Bank financial and technical assistance, to one where China is now also a contributor to the World Bank. The Bank’s lending and analytical programs in China today are focused on global public goods and institutional reforms to scale up impact, with knowledge and advisory services expected to play a growing role. The lending program has focused on marine plastics, biodiversity and water pollution control in China’s largest rivers, green agriculture, green finance, and food safety. The analytical program is similarly targeting China’s green transition across sectors.

Over the last three decades, the World Bank has provided over US$1.4 billion in development financing to Mongolia. Today, the World Bank Group’s Country Partnership Framework for Mongolia guides the Bank’s work to support Mongolia in overcoming COVID-19 and new emerging crises while working toward a more sustainable, inclusive, and resilient recovery, with a strong focus on job creation and climate resilience.

The World Bank’s work in the Republic of Korea has evolved to match the country’s changing needs as it transformed from low-income to a high-income economy and a global leader in innovation and technology. Through the World Bank Group Korea Office, the World Bank hosts partnerships and joint projects with Korean partners to help developing countries enhance financial sector management, promote green growth innovation and share know-how about information and communication technology.

Source: World Bank Mongolia

Canadian miner Centerra Gold gives up the ‘toxic’ Kumtor mine to Kyrgyzstan.

Kyrgyzstan has regained control over the Kumtor gold mine after an ownership transfer agreement was signed with the mine’s former owner, Canadian miner Centerra Gold, media reported on Saturday.

Kumtor is one of the largest gold mines in Central Asia and used to be among Kyrgyzstan’s biggest foreign investment projects. However, it came into the spotlight last year when reports emerged of threats to the local environment posed by the mine. As a result, Kyrgyzstan launched a legal battle to reclaim the site from the Canadian firm.

The procedure for the exchange of documents confirming the transfer process took place at Kyrgyzstan’s embassy in the UK.

“On July 29, 2022, all necessary deeds of transfer, powers of attorney, and certificates for the registration of a full transfer of ownership of 100% of shares of Kumtor Gold Company and Kumtor Operating Company in favor of [state-owned miner] Kyrgyzaltyn were given to the ambassador of Kyrgyzstan in the UK Ulan Djusupov,” stated the press release of the office of the Kyrgyz president.

Under the agreement, Kyrgyzstan gets full legal control of the mine and the gold produced there since May 15, 2021. It is also entitled to dividends from Centerra Gold totaling $11 million, a one-time payment of $50 million and the reclamation fund for the Kumtor mine of about $53 million. In exchange, Kyrgyzaltyn will be giving up its 26% stake in Centerra Gold and its 77.4 million common shares, worth roughly $972 million, in the Canadian miner for cancellation.

Centerra Gold has owned and operated the mine through its subsidiary Kumtor Gold under an agreement with the government since 2009. However, in May 2021, the Kyrgyz government took over the mine, citing environmental and safety concerns, as well as its claim that the company had underpaid taxes. Centerra Gold denied those allegations, slammed the move as state appropriation and initiated international arbitration to challenge Kyrgyzstan’s actions. However, in April, the company announced it had agreed to sell its business interests in Kyrgyzstan and exit the country.

Luxembourg has pledged to support Mongolia with about €10 million over the next five years.

Luxembourg will continue to support Mongolia in the area of healthcare. Minister for Development Cooperation and Humanitarian Affairs Franz Fayot was in Mongolia from Tuesday to Saturday and signed two agreements.

The first announcement concerned €5 million over the next five years. This money will mainly be used to expand telemedicine and cardiovascular services.

At the signing ceremony, Minister Fayot, Manuel Tonnar, Director of Cooperation, and Dr Jean Beissel, former Director of the National Institute of Cardiac Surgery and Interventional Cardiology, were awarded the order "Altangadas" for their outstanding contributions to the Mongolian health sector. This is the Mongolian state's highest honour for foreign citizens.

The trip also included a meeting with Khalid Sharifi, head of the United Nations Population Fund (UNFPA) office in Mongolia, where the minister signed another agreement, which provides UNFPA with €5 million over five years to promote the elimination of maternal and perinatal mortality.

The visit took place in the context of the celebration of the 20th anniversary of bilateral development cooperation relations between Luxembourg and Mongolia.

The Speaker of the US House of Representatives, Nancy Pelosi, is beginning a tour of Singapore, Malaysia, South Korea and Japan, her office says - with no mention of a possible visit to Taiwan.

There has been intense speculation that she may visit the self-ruled island.

Taiwan is claimed by China - which has warned of "serious consequences" if she goes there.

No high-ranking US elected official has visited Taiwan in 25 years.

Ms Pelosi, a California Democrat, tweeted that the six-person Congressional delegation tour would seek to "reaffirm America's unshakeable commitment to our allies and friends in the region".

Her office said the tour was to the "Indo-Pacific region" - "including" visits to Singapore, Malaysia, South Korea and Japan.

China sees Taiwan as a breakaway province that must become a part of the country. Beijing has not ruled out the possible use of force to achieve this in the future.

Chinese officials have expressed anger over what they view as growing diplomatic engagement between Taipei and Washington. There was a surprise visit to the island by six US lawmakers in April.

The US has formal diplomatic ties with China, and not Taiwan.

Ms Pelosi has long been a vocal critic of the Chinese leadership, denouncing its human rights record. She has met pro-democracy dissidents and visited Tiananmen Square to commemorate victims of the 1989 massacre.

Her original plan was to visit Taiwan in April, but she postponed the trip after she tested positive for Covid-19.

Earlier this month she said it was "important for us to show support for Taiwan".

President Joe Biden has said the US military believes a Pelosi visit to Taiwan is "not a good idea right now".

The statement from her office on Sunday said the tour would "focus on mutual security, economic partnership and democratic governance in the Indo-Pacific region".

Their talks will also cover trade, the climate crisis and human rights.

The delegates accompanying Ms Pelosi are leading members of the House of Representatives: Gregory Meeks, Mark Takano, Suzan DelBene, Raja Krishnamoorthi and Andy Kim.

The last House Speaker to visit Taiwan was Republican Newt Gingrich, in 1997.

Rio Tinto Group said it’s formed a joint venture with the Guinea government and Winning Consortium Simandou to develop infrastructure including a railway and port in a breakthrough that should help unlock the world’s biggest untapped iron ore deposit.

“The parties will now work on next steps including shareholding agreement, finalizing cost estimates and funding, and securing all necessary approvals and other permits and agreements required to progress the co-development of infrastructures,” Rio said in a statement.

Getting the massive Simandou project under development would be a second major win for Rio’s Chief Executive Officer Jakob Stausholm, after striking a deal with Mongolia earlier this year on Rio’s flagship copper project. Since taking the helm just over a year ago, the CEO has prioritized getting stalled projects moving, while rebuilding the company’s reputation after a series of missteps.

The latest agreement hands Guinea’s government a 15% “free-carry” stake in the infrastructure joint-venture, meaning Rio and Winning will bear construction costs. Efforts to develop Simandou have been stymied for years by a litany of disputes over ownership and infrastructure, and by political changes in Guinea.

Simandou offers a potentially huge new source of supply for Rio, the world’s largest iron ore producer, while China sees the project as key to easing its steel industry’s dependence on Australian output.

“The involvement of Rio Tinto would be definitely very positive for the Simandou project” given it is “a very experienced mining company in implementing large-scale, complex infrastructure projects around the world,” Philip Kirchlechner, director at Iron Ore Research Pty, said by phone. “However, it doesn’t at all remove sovereign risk in Africa,” he said, adding “the complexity of building a rail through very difficult terrain is also very challenging.”

Simandou is divided into four blocks, two of which are controlled by Winning — which is backed by Chinese and Singaporean companies — and the others by Rio Tinto in partnership with Aluminum Corp. of China and other Chinese companies. Winning and the Rio-led group will each have a 42.5% of the infrastructure company, with Guinea’s government holding the balance, Rio said.

Who pays?

China, the world’s top steel-producing nation, recently embarked on one of the biggest shake-ups of the global iron ore market in more than a decade by setting up a new state-owned group, designed to be a hub for huge overseas mine investments — including Simandou — and buying the steelmaking material from international suppliers.

Earlier this year, the two consortiums at Simandou struck a deal to jointly build the 600 kilometers of required rail lines linking the mine to a planned port. As part of the deal, the government received a 15% stake in the infrastructure, matching its ownership stake in the mines. Yet talks about how the rail line will be paid for had dragged on.

Negotiations had centered over whether the government should have to pay for its share of the rail and port building costs, according to people familiar with the situation. Rio and the Winning consortium had offered an interest-free loan to cover the government’s costs, while the government had pushed for the free-carry for its stake, the people said.

The railway could cost more than $10 billion, according to earlier estimates, although an updated cost forecast is not expected until after an agreement is struck. No monetary figures for the new joint venture were given in the statement.

Rio’s shares in Australia dropped as much as 1.5% before trading 0.7% higher by 2:03 p.m. Shanghai time.

The Guinean government had sought to force the hand of the companies involved. Earlier this month, the government ordered both consortiums to halt activity in the country, citing their failure to reach a deal on collaboration. Mining Minister Moussa Magassouba also said the country was prepared to develop the project without the two consortiums if an agreement wasn’t forthcoming.

(By Thomas Biesheuvel and Alfred Cang, with assistance from Ougna Camara, Winnie Zhu, Jake Lloyd-Smith and Martin Ritchie)