Events
Name | organizer | Where |
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MBCC “Doing Business with Mongolia seminar and Christmas Receptiom” Dec 10. 2024 London UK | MBCCI | London UK Goodman LLC |
NEWS

Zasag Chandmani mining dispute is a litmus test for Mongolia www.intellinews.com
Maximilian Johnson, the younger half-brother of Britain's prime minister, has run into trouble in Mongolia. He works for a Hong Kong-based fund GRF2 that invested $19mn along with several other big investors into the Zasag Chandmani multi-metal mine, but now the owner appears to have run off with most of the money.
The Mongolian police - the economic crimes and fraud squad - has investigated the case and found evidence of fraud, embezzling and money laundering by the mine’s owner, Buyantogtokh Dashdeleg, and two other senior managers at the mine, the CEO, Erdenebatkhaan and the CFO, Tsend-Ayush of the project company Zasag Chandmani Mines.
Arrest warrants were issued and their passports were confiscated. However, in 2019 Dashdeleg appealed to a regional court that overturned the arrest warrant and he immediately skipped town and is now believed to be in the US.
After a year of inactivity Johnson and his partners complained to the authorities, who kicked the case up to the General Prosecutor, who ordered a trial. That was four months ago and the investors are now waiting for the case to be called. With a new government in office following general elections the case has become a litmus test for the government, which has promised to improve Mongolia’s battered investment image in an effort to attract more money into the country.
Long road
Johnson has had a colourful career and the road that brought him to Ulaanbaatar was a long one. Born in Brussels where the brothers' father was working for the European Commission, he studied Russian at Oxford. He ended up as a metals trader in Hong Kong for five years and also did a stint at Goldman Sachs, where he got to know Simon Murray, a famous investor and the former head of investment company Hutchison Whampoa and commodity trader Glencore, as well as being the founder of the Orange mobile phone company, amongst other things.
Murray was interested in Mongolia and his private investment vehicle GEMS set up GRF2 to invest into the Zasag Chandmani mine. As Murray and Johnson were acquainted and Murray knew that Johnson spoke Russian he invited the younger man to come into the firm and oversee the Mongolian project in 2018.
“Murray knew I spoke Russian and asked me to help on the mine project,” says Johnson. “It should have been a good project. It's a poly-metallic deposit with gold, copper and iron ore. We lent $19mn in a convertible credit note to finance getting the mine going, along with other investors.”
The GRF2 convertible debt could eventually be turned into a 30% share of the company. GRF2 followed the commodity trader Nobel Resources into the deal that had also committed $15mn. The money was supposed to be used on equipment and starting production, but things soon began to go wrong.
Both investors did their due diligence, but as time passed production at the mine failed to start.
“We had seats on the board, but the company didn't call many board meetings. They were sending us reports and management accounts – but, well, those were produced by the management,” says Johnson, who is currently based in Indonesia due to the coronavirus (COVID-19) situation. “At one point GRF2 asked for audited accounts, but the management said they had no money and if the investors wanted audited accounts we would have to pay for it ourselves. It was around then the alarm bells began to ring.”
Investigations and charges
As relations deteriorated the investors began to demand their money back. Johnson reports that Dashdeleg offered to repay the credit at 20 cents on the dollar, which all parties refused. However, eventually Nobel did accept some sort of deal and exited the deal.
GRF2 decided to stick to its guns and at least try to recover the principal; under Mongolian law if you go to court to recover a debt you can only claim the principal amount and interests incurred are bad debts in your books, unlike in the west.
Johnson took the case to the local economic crimes and fraud squad, which opened an investigation.
“The police were fantastic and investigated the case thoroughly. They uncovered a considerable amount of evidence that showed the details of embezzlement and money laundering,” Johnson said.
The police then issued travel bans on the company’s CEO and CFO and confiscated their passports in the beginning of 2020, following the flight by the mastermind, Buyantogtokh. Amongst other scams, the police discovered that the mine was signing purchase orders with service companies at vastly inflated prices that turned out to be shell companies controlled by the owner and his staff, or their friends and close relatives.
“It wasn't even clear if these goods and services were ever delivered,” says Johnson. Some of the credits were spent on equipment but the police evidence suggests some $10mn-$15mn was drained out of the company using shell companies and related party transactions.
However, a district court judge later overturned the travel ban on 31st December, when people were preparing for the New Year’s Celebration, and within three hours of the ruling, Buyantogtokh left the country for Korea. Since then Interpol has issued a Red Notice warrant for Dashdeleg, who is now on the international wanted list. After continuing to push the case was reactivated and Johnson and GRF2 are now waiting for a case to go to court where the project company, Zasag Chandmani Mines, it’s CEO and CFO will be tried on charges of fraud, embezzlement, money-laundering and counterfeiting.
“At this point all we want to do is get our money back,” says Johnson, who has been quietly lobbying to move the process forward. “This case is important not just for us but for the wider investment climate. Mongolia needs to show there is a level playing field for investors, that the rule of law works.”
GRF2 is not the only investment that has gone awry, but the government badly needs to bring in investors to exploit its huge mineral deposits, as it doesn't have the money to do this on its own.
And the government has been making progress. In August five representatives of the Paris-based Financial Action Task Force (FATF) flew into Ulaanbaatar on an inspection mission of crucial significance to the nation’s economy. Experts from the UK, US, Japan, China and Russia were considering whether Mongolia should be removed from the organisations grey list, which was introduced in 2000. Countries on the FATF grey list represent a much higher risk of money laundering and/or terrorism financing, but unlike those on the black list they have formally committed to working with the FATF to develop action plans that will address their deficiencies.
Mongolia was added to the FATF’s grey list in 2013 after which the government initiated reforms and started to meet some of the organisation’s conditions.
However, in 2016 FATF criticised Mongolia for backsliding and urged the government to enforce the laws with a set of recommendations, including enhancing economic transparency, improving oversight on the financial market, and holding those who break laws accountable. To comply with the recommendation, the Mongolian government formed the National Council to Combat Money Laundering and Terrorism in April 2017, which is the basis of the law enforcement agencies that GFR2 appealed to in its case.
The new government, recently elected, has also committed itself to improving the investment climate and in August new Prime Minister Oyun-Erdene Luvsannamsrain, the finance minister and Chairman of the State Great Khural (parliament) all separately made presentations to FATF officials to put forward their plan of action. Mongolia has borrowed heavily on the world’s bond markets over the last decade, and between 2021 and 2024 much of this will come due. Refinancing costs will be much more affordable if the country can establish a reputation for financial integrity and honesty.
Litmus test for a battered investment image
The case has turned into a litmus test for Mongolia’s investment climate. The country has enormous potential, as it is home to hundreds of billions of dollars worth of mineral deposits, but investment into developing these assets has not gone well.
The biggest project in recent years has been the Oyu Tolgoi mine in the Gobi Desert, another gold/copper deposit, that was agreed with international investors Ivanhoe Mines and Rio Tinto in 2011.
Oyu Tolgoi caused a lot of excitement at the time as the billions of dollars in revenue the mine was supposed to generate were expected to lead to an explosive boom for Mongolia’s economy. Analysts were predicting extraordinary annual percentage growth rates in the 20s and 30s and a step-up in incomes for the population.
The project didn't take off and got bogged down in bitter wrangling with the government, and since then the international partners have changed and Ivanhoe Mines has been replaced by the New York-listed Turquoise Hill Resources.
In July this year the UK’s Financial Conduct Authority (FCA) started a probe into Rio Tinto and the late-running $6.75bn Oyu Tolgoi underground copper mine which may have breached its listing rules.
In July 2019, Rio announced that the Oyu Tolgoi underground expansion would require an additional $1.2bn-$1.9bn in capital and would be 16 to 30 months late. It pointed to difficult ground conditions that meant that a rethink of the design and development schedule would be necessary. However, according to some investors and a former employee, Rio knew the expansion of the copper mine was in trouble months before the difficulties were disclosed to investors and didn't say anything. But the mine is now in production and reported 36,735 tonnes of copper output in the second quarter of this year and 113,054 oz of gold.
The start of last decade was Mongolia’s day in the sun and other investors got equally excited. New York-based Firebird Management LLC bought 40% of the free float on the Mongolian exchange in anticipation of the mooted economic boom. That investment didn't work out as planned either.
Mongolian’s investment image has been battered by these misfires and made more difficult by the economic blows dealt to the economy by the recent crises. However, the new government is keen to remake the country’s image and with commodity prices flying – especially copper prices that have almost doubled in the last year to hit a record $10,000 per tonne – mining is once again a sexy sector.
Johnson’s case is now stuck at the Prosecutor’s Office. GRF2 is waiting for the case to go to trial, where it can stand to recover it’s money.
“We are simply hoping to get our money back,” says Johnson. “We hope that Mongolia’s justice system is fair, as the investment world looks in on our ruling.”
By Ben Aris in Berlin

Coal price surges as largest import channel from Mongolia suspended www.globaltimes.cn
China's coke and coking coal futures surged by their daily limit of about 8 percent on Monday after media reports said that the largest coal import channel from Mongolia -- Ganqimaodu Port in North China's Inner Mongolia Autonomous Region -- may suspend coal imports from Mongolia for two weeks.
Experts said that the temporary suspension may have little influence on either country.
An anonymous source told the Global Times on Monday that the import suspension appears to be true, and it's being implemented due to the uncontrolled COVID-19 pandemic on the other side of the port.
Since the end of April, 11 Mongolian drivers have tested positive before entering, and one of them went in and out of China eight times, according to the source.
The two major mineral imports from Mongolia via the Ganqimaodu Port are coal and copper powder. "The port's import operations for copper powder and common commodities remain normal, but the import of coal has been suspended," said the source. He didn't reveal when the suspension will end.
Mongolia exported 28.6 million tons of coal in 2020. Traders and end users in China, Mongolia's biggest coal export destination, bought over 95 percent of those exports, according to Chinese metal market information provider Mysteel Global. About 14.55 million tons of coal, 54 percent of the total export volume, was shipped via Ganqimaodu Port, data from the local government showed.
Ganqimaodu Port is China's largest land border port, which even kept cargo moving during the global COVID-19 pandemic in 2020 with zero imported cases, according to the local government of Urad Middle Banner.
Zhao Yang, co-founder of Chinese coal market information site Meitan Jianghu, told the Global Times on Monday that even though Ganqimaodu Port is the most important coal import channel for China, the two-week suspension may have little influence on the trading and use of coal in either China or Mongolia.
Although China's electricity usage peak period is coming to an end, demand for thermal coal is still intensive. Another anonymous industry insider suggested that coal futures had risen because of low domestic coal output, affected by multiple safety incidents and disrupted logistics systems due to regional heavy rain.
Zhao said that coal imported from Mongolia is mostly used in steel production, and the steam coal used in China for power generation is largely imported from Indonesia and Russia, so the suspension will not affect China's electricity supply.
"The coal import operations of Ganqimaodu Port have been suspended several times amid the global COVID-19 pandemic since the end of 2019," said Zhao.

IRI Mongolia Poll Shows Strong Support for Democratic Governance, Concerns for Country’s Direction and Ability to Make Change www.iri.org
A new nationwide poll in Mongolia by the International Republican Institute’s (IRI) Center for Insights in Survey Research shows strong enthusiasm for democratic governance while many express their concern over the country’s direction and lament an individual’s ability to influence public policymaking.
When asked about the best possible form of government, 72% of Mongolians prefer a democracy, but acknowledge the need for continued improvement.
“While many people believe that democracy is backsliding around the world, the people of Mongolia are showing strong support for an open and transparent political system,” said Johanna Kao, Regional Director of the Asia-Pacific Division for IRI. “It’s encouraging to see a thirst for democracy in a country that borders both China and Russia.”
However, when asked about the current direction of the country, 48% of Mongolians felt that the country is moving in the wrong direction, expressing concerns over COVID-19, unemployment, healthcare, the economy, and education. Additionally, even though there is a strong preference for a democratic government, 72% of citizens feel that ordinary people are unlikely to influence decisions made at the national level.
“It’s clear that Mongolia’s leaders need to address issues related to healthcare and the economy if they want their constituents to believe the country can move in the right direction,” said Kao. “If they are successful in doing so, more people may feel that they can influence policymakers on the issues they care about the most.”
Methodology
The survey was conducted on behalf of the International Republican Institute’s Center for Insights in Survey Research by Independent Research Institute of Mongolia (IRIM) and made possible by the generous support of USAID. Data collection was conducted between March 11 - April 20, 2021 through computer-assisted telephone interviews from IRIM’s call center. The sample consisted of n=2,520 residents of Mongolia aged 18 and over.
A multi-stage probability sampling method was used to design a nationally representative sample. Due to the COVID-19 pandemic, the data collection was conducted based on a CATI. The contact information list of the households was compiled from the IRIM's internal database. The sample was stratified by region and by urban/rural residency. Households were selected by simple random sampling, and respondents were selected by the last birthday method.
The data was weighted by gender and age groups based on the NSO data for population of Mongolia. The response rate was 27 percent. The margin of error for the full sample is ± 1.92 percentage points. Charts and graphs may not add up to 100 percent due to rounding.

China's Ganqimaodu customs in Inner Mongolia says clearance for imported products normal -official www.reuters.com
BEIJING (Reuters) - China’s Ganqimaodu customs in the Inner Mongolia autonomous region said clearance for imported products are normal, an official told Reuters, after local media reported the border was asked to suspend Mongolian coal for around two weeks.
“We did not receive any official notice from our superior office or pandemic prevention office to halt Mongolian coal,” said an official from local customs, adding that all import activities are normal.
Chinese coking coal, coke and thermal coal futures all hit their upper limit of 8% on Monday on supply concerns following the local media reports.
Reporting by Min Zhang and Shivani Singh; Editing by Tom Hogue

Electric vehicle charging station market to reach $100 billion in less than decade – report www.rt.com
Revenues generated by the global market of Electric Vehicle Charging Stations (EVCS) are expected to grow to $93 billion by 2027, at a compound annual growth rate of nearly 20%, the latest report by Astute Analytica shows.
In 2019, the sector managed to raise a modest revenue of around $23,000, the agency based in the Indian city of Noida said.
According to the study, 819,000 EVCS units were sold in pre-pandemic 2019, with the number of sales moving up at a compound annual growth rate of 17.5%.
Experts from Astute Analytica said the overall growth of the market is slowed by the high cost of construction of EVCS infrastructure, which may prevent the sector from developing.
A well-developed EVCS infrastructure offers opportunities for charging various electric vehicles, including 2-wheelers, 3-wheelers, passenger vehicles, and commercial cars, as well as the use of fast and wireless chargers.
The fluctuating costs of electricity required for EVCSs pose a challenge for construction, financing, maintenance, and operation of the necessary infrastructure.
According to the analysis, the cost of charging infrastructure components for level 2 commercial chargers ranges from $2,500 to $7,210, while 50kW fast DC charging infrastructure costs up to $35,800.

China reports no new local Covid-19 cases for first time since July, as Delta outbreak wanes www.cnn.com
Hong Kong (CNN)China reported no new locally transmitted Covid-19 cases on Monday for the first time since July, according to its National Health Commission (NHC), as authorities double down on the country's stringent zero-Covid approach.
China has been grappling with the spread of the highly contagious Delta variant since July 20, when a cluster of Covid-19 infections were detected among airport cleaning staff in the eastern city of Nanjing.
Since then, it has spiraled into the worst outbreak China has seen since 2020, spreading to more than half of the country's 31 provinces and infecting more than 1,200 people. The surging cases driven by Delta were seen as the biggest challenge yet to China's uncompromising zero tolerance virus policy.
Local authorities responded by placing tens of millions of residents under strict lockdown, rolling out massive testing and tracing campaigns and restricting domestic travels.
The strict measures appeared to be working. Daily infections have fallen steadily over the past week into single digits, down from more than 100 from its peak two weeks ago.
And on Monday, the country reported 21 imported cases and zero locally transmitted symptomatic infections -- the first time no local cases have been recorded since July 16. It also reported 16 asymptomatic cases, all of which were imported too, according to the NHC. China keeps a separate count of symptomatic and asymptomatic cases and does not include asymptomatic carriers of the virus in the official tally of confirmed cases.
If the trend continues, China could become the world's first country to control a major Delta outbreak.
Doubling down on zero-Covid
China is one of a number of countries, including Singapore, Australia and New Zealand, that have sought to completely eradicate Covid-19 within their borders.
Authorities closed off borders to almost all foreigners, imposed strict quarantines for arrivals, and launched targeted lockdowns and aggressive testing and tracing policies to stamp out any cases that slipped through the defenses. And for more than a year, these measures had been largely successful in keeping cases close to zero.
But fresh outbreaks driven by the Delta variant are prompting some countries to rethink their approach.
In Australia, several major cities, including Sydney, Melbourne and the capital Canberra, have been placed under weeks of lockdown, but cases have continued to surge. On Saturday, the country recorded its highest single-day caseload since the pandemic began, while thousands of people took to the streets to protest against prolonged lockdowns.
In an opinion piece published in Australian media Sunday, Prime Minister Scott Morrison hinted at an end to the country's zero Covid-19 restrictions, saying the lockdowns "are sadly necessary for now" but "won't be necessary for too much longer." He said the Australian government intended to shift its focus from reducing case numbers to examining how many people were getting seriously ill from Covid-19 and requiring hospitalization.
Singapore, too, has laid out a road map to transit to a "new normal" of living with Covid-19.
China, meanwhile, appears to be resolutely sticking to its zero-Covid approach, with state broadcaster CCTV warning on Monday that the pandemic has not ended, and that people shouldn't become careless in epidemic prevention.
The country has also continued to ramp up its vaccination drive. As of Sunday, it has administered more than 1.94 billion doses of domestically made Covid-19 vaccines, according to the NHC. More than 135 doses have been administered per 100 people, a ratio higher than that of the United Kingdom and the United States.

Mongolia adds 1,566 new COVID-19 cases www.xinhuanet.com
Aug. 23 (Xinhua) -- Mongolia's COVID-19 cases have increased by 1,566 over the past 24 hours to 195,245, the country's health ministry said Monday.
The disease has claimed 902 lives in total after four more fatalities were reported in the past day, the ministry said in a statement.
It said that a total of 5,519 samples were tested across the country in the past day, and the latest confirmed cases were all local infections.
A total of 10,928 COVID-19 patients are now hospitalized across the country, 185 of them in critical condition, it added.
Mongolia launched a nationwide COVID-19 vaccination campaign in late February, aiming to inoculate at least 60 percent of its 3.3-million population.
So far, 63.2 percent of the country's total population have been fully vaccinated.

On the Move With Mongolia’s Nomadic Reindeer Herders www.nytimes.com
A morning mist filled the valley near Hatgal, a small village at the southern tip of Lake Khovsgol in north central Mongolia. Glancing at the figures between the fragrant pines and larches, I could hardly distinguish the silhouettes of the reindeer from those of their herders.
Darima Delger, 64, and her husband, Uwugdorj Delger, 66, gathered their belongings and dismantled a rusty stove. They tossed a coat over the shoulders of their grandchildren who were already sitting on the backs of their animals. The family’s herd stood as still as if in a Flemish painting. Everyone was waiting to depart.
The sound of colliding tent poles — mixed with a swirl of commanding voices — left little doubt: The transhumance to the herders’ summer camp was underway.
Darima and Uwugdorj’s family is part of a small group of semi-nomadic reindeer herders known as the Dukha or Tsaatan. Only a few hundred remain here in northern Mongolia. Their lives revolve around their domesticated reindeer, which supply them with much of their daily needs, including milk (used in tea, and to make yogurt and cheese), leather and a means of transportation. The animals’ velvety antlers, once removed, are sold for use in medicine and dietary supplements. Very few of the animals are killed for their meat — perhaps one or two a year.
The decision to move the herd was not a simple one. In past years, Uwugdorj explained, they moved the reindeer roughly every month. “In reality, we were following them,” he said with a laugh. “The reindeer are smarter than we are.”
But now the rain and snow cycles are changing, Uwugdorj said. Weather within the taiga, the subarctic forest where the animals thrive, has become less predictable. Lichen, a staple of the reindeer’s diet, is especially vulnerable to changes in climate. Moreover, reindeer populations — adversely affected by disease, historical mismanagement and predation by wolves — have declined.
“If we are wrong, we put the whole herd in danger,” Uwugdorj said, checking the straps of his saddles. Then, jumping onto his reindeer, he kicked off the impatient procession along a strip of thick snow.
On horseback, I could hardly keep up with the herd. Compared to reindeer, horses move like elephants.
Despite his injured knee, Uwugdorj wove between the pines and disappeared from view. With Darima and their daughter, I scanned for the few reindeer weakened by winter. Between efforts, I watched the looks the family exchanged. Their faces seemed to acknowledge the uncertainty. “If we lose our animals,” Darima told me at one point, “we lose everything.”
After arriving to the new pasture in a pouring rain, the group’s tepee-like tents, called ortz, came up with astonishing speed. About 20 families were in the process of migrating.
Darima went out to milk the reindeer. After attaching the animals to stakes for the night, everyone gathered around a crackling fire.
The Dukha are originally from the Tuva region of Russia, to the north. Tuva was for many years an independent country, until it was annexed by the Soviet Union in 1944. As children under Communist rule, Uwugdorj and Darima were sent to boarding schools and endured countless attempts to erase their identity, they said. Uwugdorj remembered escaping from the village at night because it was too hot in the dorms. “We were hungry, we were cold,” he said. In the winters, pieces of reindeer skin were boiled to make a broth that he swallowed to survive. Furs went to wealthy customers in the cities.
With their savings, Uwugdorj and Darima had a house built in the village of Tsagaannuur, to the west of Lake Khovsgol, so that their grandchildren could receive proper schooling.
Darima Delger prepares tea for the family. In addition to drinking reindeer milk, the Dukha also make cheese, which is dried for weeks on the stakes of the ortz.
The next morning, stepping through moss and lichen, I met a woman in her seventies who was milking her six reindeer. She told me about how dramatically life changed for the Dukha when the border to the north was redrawn — families were separated, their seasonal migrations stunted. Many Dukha became refugees in either the Soviet Union or Mongolia. “We wanted to escape, she said, “from the people who forbade us to live in the taiga.”
Lichen, a staple of the reindeer’s diet, is particularly vulnerable to climate change.
Every summer, a steady stream of tourists — from places like China, Israel, the United States and New Zealand — pass through the taiga to visit the herders. But not all Dukha families profit from the visitors. Instead, they make a living selling antlers and pelts, collecting pine seeds and receiving small subsidies, though “it is insufficient to raise our family,” said Dawasurun Mangaljav, 28, who spoke with me alongside her husband, Galbadrakh, who is 34.
“Strangers think we are free,” Dawasurun said. In fact, she said, money is a constant problem. During the summer, Dawasurun and Galbadrakh’s children live with them in the taiga. They will return to school each September — but only if the parents can afford it.
Uwugdorj, who once worked as a government-employed hunter, knows the land. The climate, he said, is changing; he can see it. Since the 1940s, the average temperature in Mongolia’s boreal forests has risen nearly four degrees Fahrenheit, more than twice the global average.
“We are not statues in a museum,” Uwugdorj said. “We are like our reindeer: on the move.”
And their fight, he added, is to persevere in a world that seems bent on challenging their way of life.
Sumya Batbayar and his elder brother Dawaadorj make their way to a winter camp. Reindeer are kept in remote valleys near the Russian border during the winter. The men stay with them to protect them from the wolves.
Régis Defurnaux is a documentary photographer based in Belgium. You can follow his work on Instagram.

Bogdkhan railway project launched www.montsame.mn
The Bogdkhan railway project was launched today, on August 23. The government of Mongolia plans to begin the construction of the railway bypass line with promptitude and put it into service within three years.
In his remarks during the project launch, Prime Minister L.Oyun-Erdene emphasized that the new railway line will not only contribute to the country’s infrastructure and logistics development, but also is one of the key solutions to reducing congestion in Ulaanbaatar, creating new satellite cities in Tuv aimag, and alleviating traffic congestion.
The Bogdkhan railway line to be built between Rashaant and Maanit stations, bypassing Bogdkhan Mountain, will stretch 135.8 km across Altanbulag and Sergelen soums of Tuv aimag, and Bagakhangai, Khan-Uul and Songinokhairkhan districts of Ulaanbaatar city.

Mongolian scientists begin to develop PCR test www.montsame.mn
Mongolian scientists have started to develop a PCR test, reports Minister of Health S.Enkhbold.
“Scientists of Choros Onosh laboratory have launched a startup company to develop a PCR test to diagnose coronavirus infection” said Minister S.Enkhbold.
Saliva and other main diagnostic tests are thus being produced in Mongolia.
The Ministry of Health is planning to purchase first 10,000 tests from the company in aims to support its operations as much as possible. In the future, the hospitals will be able to order and widely use the diagnosing device.
“This will bring us one step closer to detect and distinguish coronavirus mutations using a domestically produced device,” added the Minister.
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