In August 2021, consumer price index (CPI) at the national level rose by 0.4% from the previous month, by 8.9% from the end of the previous year and by 8.9% from the same period of the previous year.

The 8.9% increase in consumer price index from the same period of previous year was mainly contributed by 13.7% increase in prices of food and non-alcoholic beverages group (meat and meat products by 16.8% non-alcoholic beverages by 8.6%), 3.8% increase in prices of alcoholic beverages and tobacco group, 4.0% increase in prices of clothing, cloth and footwear group, prices of housing, water, electricity and fuels group increased by 7.0% (electricity, gas and other fuels increased by 8.1%), 6.4% increase in prices of medicine and medical service group and 16.3% increase in prices of transport group.

The 0.4% increase in CPI from the previous month was mainly resulted from 2.2% decrease in prices of food and non-alcoholic beverages group (meat and meat products by 6.1%), 0.5% increase in prices of alcoholic beverages and tobacco group, 0.9% increase in prices of medicine and medical service group and 2.7% increase in prices of transport group.

The inflation rate was 6.0% in August 2018, 8.9% in August 2019, 2.1% in August 2020 and reached 8.9% in August 2021, increased by 6.8 percentage points from the same period of previous year.

In terms of contribution of price changes of goods and services groups to 8.9% inflation rate in August 2021, 3.7 units (41.6%) were contributed from changes in prices of food and non-alcoholic beverages group.

The price of 373 items was collected for the consumer goods and services basket at the national level and prices of 344 items collected for goods and services basket in Ulaanbaatar. Out of 373 selected items of goods and services, 200 items were imported goods and services, which accounts for 45.5% of the total weight.

In August 2021, 49.4% of 8.9% inflation rate was mainly contributed by an increase in prices of imported goods and services, reported the National Statistics Office of Mongolia.

At its regular meeting on September 29, the Cabinet made the following decisions:

The Cabinet discussed and decided to submit to the State Great Khural the 2022 budget framework statement, amendments to the budget assumption for 2023-2024, and draft laws on the 2022 budget of Mongolia, 2022 budget of the Social Insurance Fund, 2022 budget of the Health Insurance Fund, and 2022 budget of the Future Heritage Fund and accompanying bills.

A progress report on the development of the law on intensifying economic recovery during the pandemic was presented and it was decided that the draft law would be presented at the Cabinet’s meeting next week.

The draft law on mining exchange was discussed at the Cabinet meeting and will be submitted to the State Great Khural.

The Cabinet discussed a decree President of Mongolia U.Khurelsukh issued to mitigate climate change, protect forest and water resources, and ensure ecological balance and decided to make some proposals to the President after approving it in principle.

The Cabinet heard a progress report on the activities of the working group tasked with improving Mongolia' rating in Corruption Perception Index. The working group has completed a study of the special rights, permission, and licenses issued by government organizations to make some activities exempt from those permissions, digitize the process, and create a database.

On September 29, the opening ceremony for the 'Ice Palace' took place in the capital city’s Khan-Uul district.

Unique for being Mongolia’s first-ever indoor ice arena that complies with the standards of the International Olympic Committee, the architectural design and blueprints for the sports palace was done by a team of young Mongolian architects at Anagram LLC, with the advice and consultancy of professional institutions and architects specialized in sports facilities such as the Canadian architecture firm HDR and VDA Architecture Ltd.

With the ‘Ice Palace’ put into operation, it becomes possible for those interested in winter sports as well as many generations of ice skaters and hockey players to hone their skills no matter the season. Alongside competitions for certain winter sports such as hockey and figure skating, various other sports events such as basketball, handball, and boxing as well as concerts and performances, and conferences are able to be organized in the arena. The venue has a capacity of seating 2,600-3,600 people.

The opening ceremony of the Winter Sports Palace was attended by President of Mongolia U.Khurelsukh, who gave remarks congratulating the project implementing body.

He said in his remarks, “During my time as the Deputy Prime Minister four years ago, I became acquainted with the construction project for the winter sports palace and held discussions with the corresponding organizations about its construction alongside former President Kh.Battulga. The “ice” palace has been constructed through the partnership between domestic companies. I express my sincere gratitude to you all for completing this large-scale project by introducing new engineering technologies and overcoming the challenging obstacles and circumstance.”

Governor of the Capital City and Mayor of Ulaanbaatar city D.Sumiyabazar, Chief of the Physical Culture and Sports Authority Ts.Sharavjamts, and representatives of foreign countries’ embassies in Mongolia attended the ceremony.

The opening ceremony was also attended by executives of the companies in charge of the project’s construction and financing, including ‘Ice Palace’ project initiator and lead, Chairman of the Board of Directors at Steppe Arena LLC P.Tsagaan, CEO of Anagram LLC B.Zolboo, CEO of Achit Ikht LLC D.Erdenetsetseg, CEO of Steppe Arena LLC N.Batmunkh, CEO of Steppelink Holding LLC Ts.Munkhtuvshin, Head of the Policy Committee at Mongolyn Alt (MAK) LLC B.Nyamtaishir, and CEO of United Projects Corporation LLC Ts.Uuganbayar.

As Mongolia has no prior experience in constructing indoor venues for organizing winter sports competitions and events, an invitation for bid was issued for companies in the regions of North America and Europe for the supply of products, its installation, and appropriate corresponding training. AST Eis- und Solartechnik GmbH, an Austrian company specialized in constructing professional ice rinks, was selected for constructing the Olympic-size ice rink at the venue.

A total of 95 Mongolian companies and six foreign companies, 1,600 construction workers and engineers were involved in the construction of the ‘Ice Palace’.

On the occasion of the event, President of the International Olympic Committee Thomas Bach has also sent greetings to Acting President of the Mongolian National Olympic Committee Ch.Naranbaatar. In the letter, he congratulated the committee on the establishment of the venue that will allow international sports events to be organized, and wished success for the preparation of athletes for the 2022 Winter Olympics.

China’s current energy crisis can be traced back in part to a legal amendment targeting miners that garnered little notice when it went into effect in March.

Article 134 in China’s criminal law elevated penalties for a series of violations from fines to possible jail time in response to an increase in mining-related accidents. However, that law led to a newfound hesitancy among miners to boost production and intensified a supply deficit that could not come at a worse time for President Xi Jinping as the country faces a severe power crunch amid a surge in energy demand. The crisis also threatens to slow economic growth and snarl global supply chains.

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The heightened punishments are a key reason that miners were hesitant to increase their output despite government calls to ameliorate the power crisis, according to five traders and analysts who spoke to Bloomberg this week on the condition of anonymity. The industry’s ability to flexibly respond to demand surges has been further stymied by increased safety inspections and an anti-corruption campaign in a major coal-producing region.

China’s current power crunch is affecting about 20 provinces and regions, representing over 66% of its GDP. Coal has long been central to China’s power generation, and broader economy — the country produced around 3.8 billion tons of coal every year in past decade, the same level as the rest of the world combined.

Prior to the enactment of the legal amendment, the miners were able to respond more nimbly. For example, when the industrial recovery from the pandemic caught miners by surprise last winter and led to coal shortages and power cuts during a December freeze, miners drove production to an all-time record that month amid orders to boost output. The surge in prices cooled by the end of February.

But that ramped up production came at a cost. Mining deaths reversed a years-long trend and rose. Officials later placed the blame on companies for allowing unsafe practices in their rush to benefit from higher prices. Article 134, aimed at reducing casualties, came following those tragedies.

Along with the stricter penalties came increased safety inspections ahead of the Communist Party 100th anniversary celebrations in July. The party has long been associated with coal miners, as a young Mao Zedong helped organize a historic strike among coal miners in the city of Anyuan in Jiangxi province, an effort that was immortalized in one of the most famous paintings of the iconic leader.

Further exacerbating the problems for coal miners is a corruption probe that begin in early 2020 in the autonomous region of Inner Mongolia, which was once the top producer of coal in China. Output there has fallen for two straight years since 2019, while a nationwide effort to reduce overcapacity in the past decade forced closures of many outdated and dirty coal mines.

The result: Coal production overall has stalled. Output was up 16% year-over-year at the end of the first quarter, but that has dropped to just 4.4% at the end of August. Meanwhile, thermal power demand is up 14%, leaving coal inventories shriveled and prices soaring to record levels.

Coal is now so expensive in China that most power plants are operating at a loss. Some are running at reduced levels or shutting for maintenance to avoid hemorrhaging more cash, contributing to the electricity shortages. A possible La Nina weather event this winter, which would bring colder-than-usual temperature, would further worsen the crisis.

(By Alfred Cang, with assistance from Dan Murtaugh)

50 percent of vegetables and 15 percent of wheat are harvested in Mongolia so far, Montsame reports citing the Ministry of Food, Agriculture, and Light Industry.

The harvest rate is about the same level as last year.

660,000 hectares of land nationwide have been sown, of which grain was sowed on 420.2 thousand hectares (wheat on 389.4 thousand hectares), potatoes on 19.8 thousand hectares, vegetables on 9.9 thousand hectares, oil plants on 100.4 thousand hectares, fodder plants on 100 thousand hectares, and fruits and berries on 4.7 thousand hectares.

Mongolia’s Ministry of Environment and Tourism signed an agreement with The Korea Forest Service on Friday to work together to combat desertification and sand and dust storms. The two nations have decided to cooperate actively in combating desertification and climate change, preventing natural disasters, and reducing environmental pollution.

South Korea has been working closely with Mongolia on its forestation efforts in recent years, having helped plant 3,000 hectares of forest in Mongolia from 2007 to 2017. The second phase of a bilateral reforestation project included planting some 40 hectares of forest within Ulaanbaatar, the capital, with trees that can endure the dry, cold climate of Mongolia. In the third phase of cooperation, the two countries have an $8 million project to reforest northern areas of the country that have been damaged by wildfires and carry out research and training on agroforestry from 2022 to 2026.

Part of the Korean-Mongolian cooperation dovetails with the Mongolian government’s program to reforest areas between the Gobi and Steppe regions through 2035, known as the Green Belt National Program of Mongolia.

On September 29, 2,515 new cases have been detected after conducting tests nationwide within the past 24 hours, reported the Ministry of Health.

More specifically, 1,067 new cases were detected in the capital city, with 1,448 cases in rural regions.

As of today, the total number of confirmed COVID-19 cases in Mongolia now stands at 301,434. 6,616 patients have made recoveries in the past 24 hours.

Furthermore, 16 new COVID-19 related deaths have been reported, raising the country’s death toll to 1,185. Currently, 20,325 people are receiving hospital treatment for COVID-19 whilst 64,019 people with mild symptoms of COVID-19 are being isolated at home.

A German research group has identified Mongolia’s South Gobi region as an ideal location for the production of cost-competitive green hydrogen. Elsewhere, the U.K. is seeing more on and offshore-powered renewable hydrogen projects.

A collaboration between researchers at the Energy Safety Research Institute at Swansea University and cement producer Hanson UK has seen the installation of a new green hydrogen demonstration unit at the company’s Regen GGBS plant in Port Talbot, South Wales.

While water scarcity could be an issue, researchers from Germany's NewClimate Institute and Fraunhofer ISI have pinpointed Mongolia as a nation with abundant potential for producing affordable green hydrogen. “We find that green hydrogen could be produced relatively affordably, at $3.30-4.70/kg … compared to a global average [cost] of $4.80/kg in 2020,” stated an announcement on Friday about the research. “The … optimal location for green hydrogen production with respect to … cost effectiveness, is in the South Gobi region.” The researchers suggested heavy-duty mining vehicles could drive demand for the gas. “As most [of Mongolia's] mining activities are located in the South Gobi area, green hydrogen can be produced at lowest cost close to the end-use site[s] and, therefore, has the advantage of not having to develop any transportation infrastructure for the green hydrogen, which otherwise could significantly impact the cost-effectiveness,” added the authors of the study.

U.K.-based energy company Chariot has signed a memorandum of understanding with the government of Mauritania to develop up to 10 GW of solar and wind-powered green hydrogen. “Benefiting from Mauritania’s world class solar and wind resources, Project Nour has the potential to allow Mauritania to produce the cheapest green hydrogen in Africa and to become one of the world’s main producers and exporters of green hydrogen and its derivative products, close to potential, large European markets,” Chariot wrote yesterday, adding Project Nour has secured exclusivity for pre-feasibility and feasibility studies for an onshore and offshore area of around 14,400km.

The U.K. and Welsh governments have approved the £58.7 million ($80.4 million) Swansea Bay City Deal’s Supporting Innovation and Low Carbon Growth program, which comprises seven projects, one of which concerns hydrogen. The latter project aims to enable “a demonstrator to prove [the] commercial viability of carbon-free hydrogen supply to fuel hydrogen vehicles,” and includes Swansea University as a partner. The university this year joined cement maker Hanson UK to install a green hydrogen demonstration unit at the latter’s Regen GGBS plant in Port Talbot, South Wales.

U.K.-based offshore engineering business Aquaterra Energy has signed a partnership with renewable hydrogen producer Lhyfe and offshore drilling contractor Borr Drilling to develop a concept for offshore green hydrogen production in the North Sea. “The organizations behind Project Haldane will develop an industrial scale offshore green hydrogen production concept through the deployment of an electrolyzer system on a converted jack-up rig,” read an announcement last week. The aim is to solve the challenges of grid connectivity to exploit North Sea wind, “providing an off take for the electricity produced in the immediate vicinity of the wind farm.”

Nuclear and renewables are both needed for electricity and hydrogen production, to cut dependency on fossil fuels, power analyst Aurora Energy Research wrote in a report on Saturday. The statement read: “Together, nuclear and renewables can provide the hydrogen volumes needed for net zero in 2050. Deploying large volumes of nuclear alongside renewables is economically efficient, reducing the net present value of total system spend by 6-9% (£40-60 billion [$54.8-82.2 billion]) to 2050.” According to the report, commissioned by British energy company Urenco, cumulative greenhouse gas emissions to 2050 can be reduced by 80 MtCO2e and gas usage in power and hydrogen by 8 PWh.

Swedish–Swiss technology company ABB and China’s PERIC Hydrogen Technologies have signed a memorandum of understanding to accelerate the adoption of hydrogen as an energy source. “Both companies will explore how integration of ABB’s automation, electrification and digital solutions with PERIC’s electrolyzers can help reduce hydrogen generation costs in the future,” ABB wrote today. The aim is for a detailed action plan and specific agreement to be defined within three months. ABB highlighted a focus on automation, electrification, digital solutions, rectifiers, distributed control systems, energy management, advanced analytics, instrumentation and telecommunication.

Saudi Arabian energy company Aramco, U.S.-based Air Products, and Saudi utility ACWA Power have announced agreements for the acquisition and project financing of a $12 billion air separation unit (ASU), gasification and power joint venture (JV) in Jazan Economic City, Saudi Arabia. “The JV is purchasing the ASUs, gasification, syngas clean-up, utilities and power assets from Aramco,” the partners announced yesterday. “The JV owns and operates the facility under a 25-year contract for a fixed monthly fee. Aramco will supply feedstock to the JV, and the JV will produce power, steam, hydrogen and other utilities for Aramco.”

In support of Mongolian capital city's green and digital transition, IFC and the Municipality of Ulaanbaatar today signed a memorandum of understanding (MoU) to jointly identify investment opportunities and collaborate with the aim of bolstering private financing for modern infrastructure facilities. The agreement is part of IFC's broader strategy to boost sustainable economic growth and climate resilience in Mongolia.

Almost half of Mongolia's population lives in Ulaanbaatar, with a rapid increase in the number of households living in the ger areas, or settlements of low- and middle-income households. The number of registered vehicles also reached 652,000 this year in a city with 1.4 million people. Subsequently, the city faces a range of urban challenges, including air and soil pollution, urban sprawl, centralization, and traffic congestion.

Under the MoU, IFC will provide advisory support to the Municipality of Ulaanbaatar with the objective of identifying new ways to implement sustainable development in key areas such as green transport, waste treatment and sanitation, street lighting, district heating, and green housing. The two parties will also work with other stakeholders to support structural reforms that will accelerate private sector participation in sustainable urban infrastructure and services.

"The partnership with IFC will help Ulaanbaatar access the expertise and financing needed to modernize our infrastructure and deliver better urban services. We will continue to focus on forging innovative partnerships to make our city greener, smart and more competitive," said Sumiyabazar Dolgorsuren, Governor of the Capital City and Mayor of Ulaanbaatar.

At the Climate Ambition Summit last December, Mongolia committed to a higher Nationally Determined Contribution (NDC) target of 27.2 percent reduction in greenhouse gasses by 2030. According to an IFC study, $11.5 billion in climate investments will be required to achieve this new target.

"Through developing sustainable and smart urban infrastructure, the Municipality of Ulaanbaatar will be able to improve energy efficiency of its services and reduce green-house emissions, thereby helping Mongolia reach its Nationally Determined Contribution targets," said Alfonso Garcia Mora, IFC's Regional Vice President for Asia and Pacific. " IFC's Cities initiative is uniquely positioned to support Ulaanbaatar in its endeavors to diversify and enhance its funding sources in order to successfully implement its climate resilience agenda."

Since 2004, IFC has invested and mobilized over $9 billion in more than 280 projects in the Cities infrastructure space. This is IFC's first project in East Asia and the Pacific region under its Cities initiative.

About IFC

IFC—a member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2021, IFC committed a record $31.5 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of the COVID-19 pandemic. For more information, visit www.ifc.org or www.ifc.org/infrastructure or www.ifc.org/cities