Ulaanbaatar /MONTSAME/. At the cabinet meeting held on October 28, today, Minister of Road and Transport Development L.Khaltar delivered a presentation on the financial difficulties encountered in the national air transportation industry.

Concerning this, corresponding officials from government agencies and ministers were charged to study possibilities on bailout for national airlines conducting flights to international and domestic destinations - MIAT Mongolian Airlines state-owned enterprise, Hunnu Air and Aero Mongolia, and to provide funding required for relocating domestic airlines to the new international airport named after Chinggis Khaan and maintaining their normal operations.

Due to the suspension of international flights since February 2020, some 1,370 scheduled flights by the MIAT Mongolian Airlines had been cancelled, and the national airline have operated a total of 75 repatriation charter flights on different routes, as of September 30.

MIAT had planned 1,657 flight services in the first three quarters of 2020 to earn around 410 MNT billion. However, the number of flights performed by the company during this period was only 287, with MNT 130 billion in revenue.

In spite of some cost-saving regulations taken by the MIAT, such as postponement of non-essential expenditures and investments, wage cuts and employee adjustments, the company will find it difficult to ensure its ability to pay by the second quarter of 2021, if this situation continues, reports the Press Office of the Cabinet Secretariat.

China and Mongolia are expecting lower tariffs in bilateral trade after Mongolia’s recent accession to the Asia-Pacific Trade Agreement (APTA), China’s Ministry of Commerce said on Monday.

Starting on 1 January 2021, Mongolia will cut tariffs on 366 categories of commodities, such as aquatic products, vegetables and fruits, timber and chemical products. Meanwhile, Mongolia will also enjoy favorable tariff policies, according to a statement posted on the website of the ministry.

Mongolia’s accession to the agreement will further promote the integration of developing economies in the Asia-Pacific region, deepen Sino-Mongolian economic and trade cooperation, and improve bilateral trade liberalization and facilitation, according to the statement.

Thus far, the member countries have implemented four rounds of tariff concessions, with the fourth one coming into effect on 1 July 2018. (Xinhua)

Chinese steel mills and power stations have started buying more coal from Mongolia after Beijing imposed a ban on imports from Australia, but price, quality and logistical difficulties mean it will not be easy for some users to make the switch.

While politics might have played a role in the decision to shut off Australian coking and thermal coal, the practical difficulties in doing without it may force a rethink of the ban over time, analysts said.

Coal from Mongolia, which borders China to the north, is the most obvious replacement for Australian coal, particularly due to the inability of suppliers located further away – such as the United States, Russia and Canada – to meet a short-term increase in demand, S&P Global Platts said in a recent update.

But while users in northern China will largely be able to make the change, those in southern China will find it more difficult to do so because of the logistical difficulty and expense of transporting coal from Mongolia. This is likely to force many to rely on more expensive domestic coal if they can no longer access Australian imports.

So far, the ban on Australian coal imports has largely been successful, with coal traders turning to supply from other countries, industry sources said. Due to the lack of cost-effective alternatives, analysts expect demand for Mongolian coal to pick up.

“The one bright spot is Mongolia, whose coal quality is a good substitute for generic hard coking coal,” S&P Global Platts’ analysts Jeffery Lu and Yile Weng said in a note on Friday.

“The landlocked country has been increasing exports to China and is now sending more than 1,000 trucks a day laden with coal.”

The increasing use of Mongolian coal might allow the country to retake its position as the top supplier of the commodity to China, particularly coking coal used in steelmaking.

Mongolia slipped from the top spot earlier this year after lockdowns and border closures cut production and disrupted supply chains.

Australia miners stepped in to fill the shortfall, exporting more coking coal to China to date this year than in each of past three years, according to S&P Global Platts.

Simon Wu, commodities market analyst for consultancy CRU Group, said the stronger political relationship between China and Mongolia favoured the use of Mongolian coal.

China and Mongolia are due to increase bilateral trade after Mongolia agreed to cut tariffs on 366 categories of Chinese exports, including aquatic products, fruit and vegetables and chemical products last week following its accession to the Asia-Pacific Trade Agreement (APTA).

China’s Ministry of Commerce said Mongolia would enjoy reciprocal tariff reductions in line with the agreement and added that Mongolia’s accession to APTA could open up more opportunities for Belt & Road Initiative projects.

The steel mills that relied heavily on Australian coking coal before will have to make hard choices, and currently only Mongolian coking coal is widely available

“Mongolian coking coal is already widely used in China, especially by Hebei steel mills [in northern China]. However, the steel mills that relied heavily on Australian coking coal before will have to make hard choices, and currently only Mongolian coking coal is widely available,” Wu said.

For several utilities in the southern part of China, importing thermal coal makes more sense than relying on Mongolia or domestic sources, especially when contract prices are low and logistics easier, S&P Global Platts thermal coal expert Deepak Kannan said.

Seaborne cargo can be delivered directly to southern Chinese ports while rail-transported coal from Mongolia and other parts of China are subject to delays caused by accidents and heavy traffic on main freight rail lines.

The low availability of alternative sources for short-term demand will force Chinese steelmakers to use more expensive domestic coking coal, hurting profit margins in the process, Lu and Weng said in their note.

For example, alternative sources from Canada, the US, Mozambique and Russia are already overbooked or in short supply. Moreover, it takes too long for the coal to arrive – at least 21 days from western Canada and 45 days from the US, the latter meaning orders placed in the next few weeks would not be delivered until late December or early January.

“For Chinese buyers seeking spot [on-demand] cargoes to cover immediate needs, this is too long to wait,” Lu and Weng said.

In addition to limited alternative import options, quality concerns are another factor that could hurt users in China.

“Australian premium hard coking coal has a number of sought-after attributes, including high coke strength after reaction, low sulphur and low ash, which only a few countries can offer,” Lu and Weng said.

“A number of steelmakers told Platts that while 100 per cent self-sufficiency remains a possibility, the absence of high-quality Australian grades to blend [with other coal] would reduce production efficiency in the steelmaking process, leading to lower profit margins.”

The price of coking coal using seaborne delivery has fallen sharply since the start of the ban on Australian coal imports, making it more attractive to Chinese steel mills.

Australia, in the interim, is working hard at finding alternative markets for its commodities exporters with no end in sight to its deteriorating relationship with China.

For example, Australia’s trade marketing agency Austrade is looking to Latin America for new markets. It recently announced a webinar for mining equipment exporters to focus on the continent’s post-pandemic economic recovery, with Australian exports of gold, copper and lithium being increasingly used by the tech sector.

Ulaanbaatar, October 26, 2020 — On September 25th, The Asia Foundation launched a four-year Women’s Economic Empowerment Project in Mongolia funded by Global Affairs Canada.

The launch event was attended by a range of leaders active in Mongolia’s gender equality movement. Those gathered represented Mongolian civil society, government, the private sector, international organizations, and embassies. Women’s participation and leadership in the Mongolian economy has decreased on average by ten percent over the past 20 years while men’s labor participation has remained relatively stable with a slight two percent decrease. The launch was a key opportunity to enhance coordination and cooperation with others working on women’s empowerment and gender equality.

“The project will support women’s participation and leadership in the economy through supporting Mongolian CSO’s to work on a range of economic empowerment issues facing women, while building capacity and multi-stakeholder coalitions to pursue change,” remarked Tricia Turbold, the director of Economic Empowerment Programs for The Asia Foundation Mongolia.

“The Covid-19 pandemic has not only exacerbated the variety of issues women face in Mongolia, but has brought about a new set of challenges. For example, one in three women experience domestic violence perpetrated by their intimate partners in Mongolia, and there has been a drastic increase in these rates since the pandemic began. Through close coordination with our local partners we will implement a holistic approach to address and respond to these complex challenges.”

The Women’s Economic Empowerment project has three main objectives: i) improve the management, programming and sustainability of civil society organizations working on women’s economic empowerment; ii) support and develop coalitions and networks for gender-sensitive social and economic policy change; and iii) nurture current and aspiring women-owned businesses, building on the success of The Asia Foundation’s Women’s Business Center.

ULAANBAATAR, Mongolia – In Bayanzurkh District, 50 households are selected to receive the CHIP (cooking, heating, and insulation products) packages. The CHIP package essentially gives ger dwellers stable, clean heating and warmth throughout the winter months. The selected families will act as champions to promote the CHIP package to other households within their community.

Financed by UNICEF, the Swiss Agency for Development and Cooperation (SDC), Manitoba Council for International Cooperation and the Government of Mongolia and implemented by People In Need INGO and the Mongolian University of Sciences and Technology, the CHIP package was developed by leading international and local scientists and experts that designed an affordable, yet effective, solution to take down chimneys and eliminate the use of coal in people’s Gers.

“The CHIP solutions are a comfortable and affordable alternative to coal-burning stoves. The heating is stable and easy to use, while also helping us to reduce both indoor and outdoor air pollution. I encourage households to explore CHIP as a viable option to heat their Gers this winter,” said Ulambayar, Deputy Governor of Bayanzurkh District in Ulaanbaatar.

The CHIP packages are now available in Bayanzurkh District and across Ulaanbaatar for purchase. Households that are interested can also access finance through the Government of Mongolia’s ‘Green Loan’ programme.

“The CHIP package isn’t only about keeping the ger warm, it’s also about reducing the exposure to air pollution, particularly in households with children and pregnant women. They are at highest risk of damage to their health, including pregnancy outcomes, brain and lung development,” said Sunder, Sustainable Energy Officer at UNICEF Mongolia.

In 2019, UNICEF piloted the CHIPS package in Bayankhongor city in partnership with the local government. Together, they set an ambitious goal to transform Bayankhongor city into the first Smog Free city in Mongolia by 2022. To date, 230 households in Bayakhongor received the CHIP package. So far, the response has been very positive. This year, Umnugobi and Gobi-Altai aimags, as well as communities in Ulaanbaatar, are starting to adopt Bayankhongor’ aimag’s good practice.

Mongolia is planning to operate at least 10 chartered flights in November to bring home more nationals stranded overseas due to the COVID-19 pandemic, the country's foreign ministry said Tuesday.

More than 1,900 Mongolian nationals are expected to return home on the planned flights, according to the ministry.

Following its suspension of international commercial flights, Mongolia has brought more than 26,100 nationals home on chartered flights, buses or trains from different places around the world.

Ulaanbaatar /MONTSAME/ The European Union (EU) Trade Day is running its second day under the theme “Increasing export capacity of Mongolia to the European market.” According to the statistics, export volume of non-mining products has gone up by 15 percent in the last three years. EU-financed Trade Related Assistance for Mongolia (TRAM) project, which aims to increase non-mining product export, is making its contribution in it.

Marketing manager of Mongolian Information and Trade Promotion Center of Europe (MITPC) in Berlin M.Zolzaya pointed out that the center was opened in November last year within the framework of TRAM project. It aims to provide support to Government policies aside from promoting business activities. Currently, 2650 pieces of products worth EUR 50,000 from 22 entities that produce leather, wool and cashmere products have been carried to Frankfurt on charter flight on October 23.

An expert of the TRAM project Carl Krug said “There are plenty of opportunities for Mongolian entities to enter into European market. Especially, I would like to highlight non-mining products. However, Mongolia’s export has inseparable connection with its mining industry. Even though it keeps export sum at high, it causes economic risks. Therefore, it is vital to diversify Mongolia’s export and conduct studies on numerous types of products to export to foreign market. Being less affected by the pandemic and having zero local transmission are advantageous for Mongolia. It is pleasant to see business and production is running normal in Mongolia. While negative impacts of the pandemic is high on global markets. Many businesses are closing in Japan, Korea and the United States due to the pandemic. Mongolian producers need to use this time when businesses are in stagnant condition because of the pandemic. It is important for them to improve quality of their products and ensure preparation of product development well to export to overseas countries. There are opportunities for Mongolian manufacturers to enter into global market with more quality products and with more speed when the pandemic subsides. Most countries of the world are focusing attention and making studies on it.

“GSP Hub” project is organizing a workshop today, providing information on facilitating horizontal collaboration among stakeholders, increasing the use of GSP+ preferences, through identifying routes for export diversification, encouraging European companies to increase their imports from Mongolia, and promoting international sustainability standards.

Over 200 delegates from business entities and private sector that created value-added chain of cluster are participating in the event.

Chinese financial technology giant Ant Group looks set to make the world's largest stock market debut.

Ant, backed by Jack Ma, billionaire founder of e-commerce platform Alibaba, is to sell shares worth about $34.4bn (£26.5bn) on the Shanghai and Hong Kong stock markets.

Advisers to Ant set the share price on Monday amid reports of very strong demand from major investors.

The previous largest debut was Saudi Aramco's $29.4bn float last December.

Ant, an online payments business, is only selling about 11% of its shares. But the pricing values the whole business at about $313bn.

Mr Ma's Ant shares are reportedly worth about $17bn, taking his net worth to close to $80bn and confirming him as China's richest man.

Ant runs Alipay, the dominant online payment system in China, where cash, cheques and credit cards have long been eclipsed by e-payment devices and apps. As well as owning Alipay, which is estimated to have more than one billion users, Ant also offers wealth management, insurance and money transfer services.

The company is expected to make its dual listing in Shanghai and Hong Kong next week, underlining the latter exchange's growing importance as a financing hub.

Hong Kong will stay a key financial hub say experts

The Trump administration has threatened to limit Chinese firms' access to US capital markets, a move that is part of the long-running trade row between Washington and Beijing. In response, China called on its flagship tech giants to list on domestic stock markets.

Chinese tech firms, including NetEase and JD.Com, have already raised billions by selling their shares via the Hong Kong stock market.

According to the Bloomberg news agency, Mr Ma told a conference in China on Saturday that the flotation would be of huge significance for Shanghai and Hong Kong.

"This was the first time such a big listing, the largest in human history, was priced outside New York City," he told the Bund Summit.

"We wouldn't have dared to think about it five years, or even three years ago," said Mr Ma.

Major investors to have signed up to the share offering ahead of flotation, scheduled for 5 November, include Singapore state investor Temasek Holding and Abu Dhabi sovereign wealth funds GIC and Abu Dhabi Investment Authority.

Analysts said the flotation offered investors a chance to secure a slice of Asia's fast-growing tech sector.

"Digital commerce and infrastructure platforms in Asia provide an unprecedented opportunity for Asian and global investors to be part of the next wave of value creation in Asia," said Varun Mittal, an emerging markets expert at consultancy EY, in Singapore.

"Earlier this year, India saw a rush of international investors keen to invest in infrastructure and platforms ecosystem, which is being replicated in the Chinese ecosystem now."

China’s acceleration of its ‘new infrastructure’ plan will support the government’s beneficiation ambition in the metals industry, boosting production of high-end metals as opposed to primary metals, industry analyst Fitch Solutions finds in its latest report.

Despite this being a long-held strategy as part of the Chinese government’s shift away from export-oriented growth and the pivot towards domestic consumption, the focus on high-tech infrastructure has been more concerted in 2020 following a slowdown in economic activity arising from the covid-19 pandemic as well as heightened tensions between the US and China, the report reads.

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Fitch predicts this new infrastructure plan work in tandem with China’s other industrial policies such as Made in China 2025 and China Standards 2035 Plan – which together signal China’s ambitious long-term strategy of becoming the global leader in high-tech and innovative industries of the future.

New infrastructure projects including 5G networks, data centres and artificial intelligence systems, together with transport and energy infrastructure, namely ultra-high-voltage (UHV) technology, charging stations and high-speed rail, require a substantial amount of metals in their construction, especially lighter and more advanced metals, Fitch reports.

Fitch believes that Chinese domestic demand for high-end copper, aluminium and steel will face a strong boost from 2020 onwards, along with the government’s existing ambition to move up the metals production value chain and strengthen the market share of metal state-owned enterprises (SOEs) who have the technical know- how to produce these higher-end products as compared with smaller private players.

The technical expertise and financial abilities of large metal SOEs will ensure that they emerge as the biggest beneficiaries of this move up the value chain, Fitch asserts.

Fitch anticipates that new infrastructure projects in China would require close to 1mnt of high-end aluminium and 32mnt of specialty steel in 2020 alone, accounting for 3% of domestic demand for both metals.

This figure will rise in 2021 and 2022 as more projects are under construction. UHV power cables will be the key driver of demand for these metals, followed by urban mass transit and high-speed rail, and 5G network base stations.

According to the China Metallurgical Industry Planning and Research Institute, a government think tank, specialty steel includes products with other metal content and a different proportion of carbon that requires additional smelting and processing and has higher physical performance than normal steel products such as rebar used in construction.

Fitch believes that Chinese metal SOEs will benefit significantly from the acceleration of the new infrastructure plan as these larger players with financial buffers have the technical know-how to produce higher-end metals (or the ability to engage in partnerships with foreign companies to acquire the technologies needed) and the economies of scale to profit from them.

Since 2018, the government has already focused on a metals replacement and consolidation strategy whereby outdated and inefficient production facilities have been replaced by cleaner ones producing more advanced higher-end metals. Fitch anticipates the renewed focus on moving up the value chain will further accelerate mergers and acquisitions in order to increase the market share of large metal SOEs.

Fitch believes that China’s 14th Five-Year Plan will include government desire to increase the market dominance of metal SOEs further following on from the 13th Five-Year Plan. This will especially impact the steel sector, where the share of total steel output produced by the top 10 producers is currently only 37% as of the end of 2019, up by 2% from 35% in 2015, according to the China Iron & Steel Association.

The International Copper Association (ICA) estimates that copper consumption in China will increase by 232kt annually up to 2025 due to the installation of higher-efficiency industrial motors and distribution transformers, the electrification of new railways, and new energy vehicles (NEVs) for industrial use.

Chinese metal SOEs will increasingly tap into demand from new infrastructure projects with their existing higher-end product portfolios or engage in partnerships with foreign companies to acquire the technical know- how of producing sustainable and advanced metals required in high-tech infrastructure, Fitch predicts.

China’s accelerated investment in new infrastructure and the ensuing higher-end metals production domestically will also be concomitant with investment in mining projects overseas along the Belt and Road Initiative (BRI) in order to have enough ores for metals production, Fitch reports.