Iron ore export resumes through Burgastai border checkpoint www.montsame.mn

Gobi-Altai /MONTSAME/ Burgastai border checkpoint in Altai soum of Gobi-altai aimag has reopened and iron ore export to China has resumed through the checkpoint.

Financing agreement on cable car project approved www.montsame.mn

Ulaanbaatar/MONTSAME/. Yesterday, May 14, the Parliament passed a bill on ratifying the financial agreement to be established between the Governments of Mongolia and the French Republic.

Turquoise Hill expects Oyu Tolgoi blowout to top $1.8bn www.mining.com

Canada’s Turquoise Hill Resources (TSX, NYSE: TRQ) said this week that an ongoing expansion of the giant Oyu Tolgoi copper-gold-silver mine in Mongolia is expected to cost as much as an additional $1.8 billion.

The Rio Tinto-controlled company and mine operator had expected the underground expansion to cost $5.3 billion when it was approved in 2015. Last year, however, Turquoise Hill flagged stability risks associated with the original project design, adding that amendments to it could increase costs by as much as an additional $1.9 billion.

The Vancouver-based miner also warned at the time of further delays of up to two and a half years, noting it wouldn’t know the exact scale of schedule and costs blowouts until mid-2020.

Oyu Tolgoi’s operator now says the expansion will need an estimated $1.5 billion, in a range of $1.3 billion to $1.8 billion. This may change due to any additional scheduling delays or increases in capital costs arising from the impacts of the covid-19 pandemic, it said.

In terms of project completion, Turquoise anticipates it would take two extra years than originally planned for the project to begin production, with a 21 to 29 months range.

“It is still a range. It is still fairly broad, but it is narrower (than the 2019 estimates), and importantly, it stayed within the range we have given,” chief executive officer Ulf Quellmann said.

Block caving
Turquoise Hill’s boss noted the company had selected block caving for the mine design, as it considers it a “more resilient mine plan that provides the best opportunity for success.”

Quellmann also said that the decision was based on an extensive trade-off analysis taking into account the reserve recovery, geotechnical, constructability, operability, schedule, as well as cost and value risks.

Turquoise Hill has $1.8 billion, which Quellmann says is sufficient to fund operations, underground and power development into the third quarter of 2021.

He also said that a definitive estimate will be published in the second half of the year.

Turquoise Hill is currently in discussions with Oyu Tolgoi’s 50.8%-owner, Rio Tinto (ASX, LON, NYSE: RIO), regarding a proposal for an interim $4 billion funding over and above the liquidity currently available.

The massive deposit was discovered in Mongolia’s south Gobi Desert in 2001. Rio Tinto gained control of it in 2012, with the government of Mongolia retaining one-third ownership of the asset.

The ongoing expansion is expected to lift production from 125,000–150,000 tonnes in 2019 to 560,000 tonnes at peak output, targeted for 2025. This would make it the biggest new copper mine to come on stream in several years.

Oyu Tolgoi produced 35,203 tonnes of copper and 26,154 ounces of gold in the first three months of this year, which puts it on track to achieve 2020 production guidance.

One of Rio Tinto’s top investors, US hedge fund Pentwater Capital, said in April it would push for a management shakeup at the operation, due to what it calls “a massive devaluation” of the asset.

Mongolia issues severe weather warning www.marketwatch.com

Mongolia's National Agency for Meteorology and Environmental Monitoring on Thursday issued a dust and snow storm warning.

Sales revenue of OT contracts 62.9% to USD 130.7 million www.zgm.mn

Turquoise Hill Resources Ltd (TRQ) on Thursday announced its financial results and operational review for the period ended March 31, 2020. According to the report, Oyu Tolgoi (OT)’s revenue decreased 62.9 percent to USD 130.7 million year-on-year. This is primarily due to both a 78.2 percent drop in gold production and a 23.1 percent fall in copper production. Even though the pandemic has led to unprecedented challenges, OT open pit has continued to operate without interruptions and the underground development has been progressed. The average price of copper downturned by 9.1 percent, mainly influenced by the impact of the pandemic on global copper demand. Additionally, OT’s concentrate sales fell in the first two months of this year due to the COVID-19, but intensified in March, exceeding its quarterly plan. The company reported a net profit of USD 105.2 million a year ago, declined to USD 19 million this year. At the end of Q1’20, OT’s workforce including employees and contractors totaled approximately 13,600, of which 94 percent were Mongolians. Oyu Tolgoi is expected to produce 140,000 to 170,000 tons of copper and 120,000 to 150,000 ounces of gold in concentrates in 2020 from both the open pit and the beginning of the underground development material being processed. The production in 2021 is predicted to increase of 170,000 to 200,000 tons of copper, and 450,000 to 500,000 ounces of gold, as a transition to the higher grade ore in the lower benches of the pit and continue to raise the amount of underground development material processed. Previously, Oyu Tolgoi LLC had stated that the expansion and excavation of the underground mine could be delayed by 30 percent due to COVID-19, restricting the access of foreign experts to the mine. This affects the operations of underground mining subcontractors. For example, GIP, which is involved in the construction of Shafts III and IV, has announced that it may lay off 400-500 employees.

Global investments pour into China as Covid-19 turmoil grips financial markets www.rt.com

China has seen more capital flow into its stock markets as a result of market dislocations caused by the Covid-19 crisis. According to some strategists, this is part of a longer-term trend.
Allocation to Chinese stocks among more than 800 global funds reached nearly a quarter of their almost $2 trillion in assets under management, according to data from EPFR, a company which provides fund flow and asset allocation information to financial institutions around the world. That’s up from about 20 percent a year ago.

Record number of new COVID-19 cases confirmed, total surges to 98 www.montsame.mn

Covid-19 test results of the Mongolian military students who arrived from Russia on May 13, yesterday, have all come out, and 55 of them were resulted positive for the virus, bringing the total number of Covid-19 cases in Mongolia to 98.

ADB, Mongolia sign 3 loans to boost COVID-19 response, renewable energy www.montsame.mn

Ulaanbaatar /MONTSAME/ The Asian Development Bank (ADB) and the Government of Mongolia today signed two loans to mitigate the severe health and economic impacts of the novel coronavirus disease (COVID-19) pandemic and one loan and grant to install the country’s first large-scale advanced battery energy storage system (BESS).

The loans and grant comprise of $100 million loan for the COVID-19 Rapid Response Program, $30 million additional financing for the Fifth Health Sector Project to further strengthen the country’s preparedness and response to COVID-19, and $100 million loan and $3 million grant for the First Utility Scale Energy Storage Project.

Signing for ADB was Country Director for Mongolia Pavit Ramachandran while Khurelbaatar Chimed, Minister of Finance, signed for the Government of Mongolia. Minister of Health Sarangerel Davaajantsan and Minister of Energy Davaasuren Tserenpil attended the ceremony.

“The two COVID-19 related loans will assist the government as it manages the impact and responds to health and social protection needs arising from the pandemic,” said Mr. Ramachandran. “The Energy Storage Project will help tap the country’s rich renewable energy potential in wind and solar power to meet the country’s future power demand.”

The COVID-19 Rapid Response Program will support the government’s ongoing initiatives, including a National Emergency Response Plan to contain the spread of COVID-19 and strengthen the health system as well as social protection measures targeting poor and vulnerable groups, households, and businesses. It will also supply medical equipment and supplies and strengthen standards on infection control and testing capacity in hospitals across the country.

The additional financing of $30 million for the Fifth Health Sector Development Project will increase the coverage of upgraded sterilization departments to all referral (secondary and tertiary) hospitals nationwide and boost the capacity of hospitals to diagnose and treat COVID-19 patients, including by providing intensive care and ambulance services. It will also establish a warehouse to manage centralized stockpiles of medicines and medical devices in Ulaanbaatar.

ADB approved the Fifth Health Sector Development Project in December 2012, with ADB contributing the equivalent of $30 million to the $38.38 million project cost to promote safe blood transfusion services, medical waste management, and hospital hygiene. The World Health Organization provided cofinancing of $480,000.

The renewable energy project will install 125 megawatts of advanced BESS making it among the largest battery storage systems globally. The BESS will be resilient to Mongolia’s extremely cold climate and equipped with a battery energy management system enabling it to be charged entirely by renewable electricity. This will then discharge clean electricity to supply peaking power in the central energy system grid. The project will also provide regulation reserve to integrate additional renewable energy capacity in the transmission grid.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.

Source: Asian Development Bank

Mongolia: How Nalaikh’s Youth See Democracy www.thediplomat.com

Youth in Nalaikh, Mongolia are eager to engage with their local government and participate in community-driven social initiatives, but a disconnect between democracy in theory and democracy in practice may be impeding their ability to do so. With Mongolia’s 2020 election around the corner, it is essential for leaders to note that Nalaikh’s youth view democracy in a positive light but are unclear on the role they play within it. Proactive, youth-specific outreach is required to capitalize on their enthusiasm and increase civic engagement among young Mongolians (especially if COVID-19 containment measures create barriers to election participation).

As graduate students in the Master of Public Policy and Global Affairs (MPPGA) program at the University of British Columbia in Vancouver, Canada, we spent two weeks in Ulaanbaatar center and Nalaikh District in December 2019. Nalaikh is one of the nine districts of Ulaanbaatar. With a population of just over 37,000, it is approximately 48 kilometers southeast of the capital. Working with the Governor’s Office of Nalaikh, we conducted field research to investigate how public policy can address low levels of youth civic engagement in their district.

We conducted a series of focus groups with youth in Nalaikh. These sessions included a “Democracy Mind Map” exercise, in which we divided participants into small groups and gave them a chart with “Democracy’ written in the center. We asked them to fill it in with anything that came to mind when they hear the word “democracy.” When we amalgamated the data from all groups for analysis, the results surprised us.

The majority of youth in our focus groups hesitated when asked to do this activity, and most needed some prompting to start writing. Participants were highly engaged in other activities we ran, often asking for more time or more paper — but when we turned the conversation to democracy, youth seemed less comfortable and less confident. The word cloud below shows all the terms that participants wrote down on their Mind Maps. The larger a word is in the cloud, the more often it was written.

The four translators working with us told us that during the exercise, participants seemed to be trying to recall definitions they had learned in school, rather than describing a lived experience. This inference aligns with a surprising observation from the results: the majority of terms listed are concepts or structures, but the actions of participating in a democracy are largely absent. We drew the conclusion that our focus group participants understand democracy in theory but are less clear on their role in it.

This disconnect could be one of the factors driving low levels of youth civic engagement in Nalaikh. If youth only think of democracy as a concept from a textbook, and do not relate to it personally or see evidence of it impacting their lives, then they may have little incentive to participate in local or national governance. It appears to us that for youth in Nalaikh, the link between actions (like voting or completing a survey) and outcomes (a government that better responds to their needs) is missing.

We also wanted to understand how youth feel toward democracy. We cannot gauge this definitively, because we did not ask participants to categorize their terms as “good” or “bad” during the exercise. However, we have attempted to estimate these sentiments. We assigned a value to each term based on its most common definition: positive for terms indicating an increased standard of living (i.e. “human rights”), negative for terms indicating a decreased standard of living (i.e. “alcoholism”), and neutral for descriptions of things (i.e. “law”) The results are shown in the chart below.

These estimates must be interpreted with caution, but the results do show a telling pattern nonetheless: Many of the things youth associate with democracy are neutral descriptors, but where value judgments are clear, positive associations with democracy outweigh negative ones. Despite the prominent protests against corruption scandals in Mongolia’s democracy in recent years, youth in Nalaikh do believe in democracy as a positive force. This reinforces our conclusion about civic engagement: Low engagement is not driven by opposition or negativity on the part of youth, but a lack of information about how to participate and why it’s important to do so.

There are some caveats to our findings: Our study focused on youth in Nalaikh, specifically, and was constrained by a two-week timeframe for fieldwork. Nonetheless, our data tell an interesting story that is relevant to discussion of democracy and Mongolia’s youth.

As the 2020 election approaches, Mongolian leaders should strive to involve and engage youth in the process. This begins with re-examining any perceptions of youth as apathetic or disengaged. All of the youth that we interacted with in Mongolia were bright, insightful, and passionate, and these impressions are backed up by the data we collected. Governments at all levels have an opportunity to harness this enthusiasm and foster civic engagement in the next generation of its citizens and leaders.

A high level of youth civic engagement is important for any country. Civic engagement is widely considered to be a marker of human development. Youth, in turn, are key actors in an engaged citizenry. An excerpt from the Handbook of Research on Civic Engagement in Youth puts it best: youth citizenship, in the form of “values, attitudes, knowledge, identities, and practices,” has “a direct impact on human and social capital and [creates] the political conditions within which socioeconomic development is possible.” Clearly, the stakes are high. Youth themselves also have a vested interest in the democratic process, as they will eventually inherit the results of political decisions made today.

At this critical juncture, it is essential to capitalize on the positive perceptions of democracy that Mongolian youth hold, and fill in any gaps in their understanding of themselves as democratic participants. There is consensus across various fields of research, from political science to psychology, that direct application and learning through experience are essential to building a robust sense of political efficacy in youth. We believe that if governments provide engagement opportunities catered directly to youth, Mongolia can close the gap between theory and practice and increase youth civic engagement resulting in a more robust democracy.

Claire Casher, Samantha Coronel, Rasmus Dilling-Hansen, and Cassandra Jeffery are students in the Master of Public Policy and Global Affairs program at the University of British Columbia

Korean Air plans to resume flights to Mongolia www.news.mn

South Korean biggest airlines ‘Korean Air’ plans to resume flights on 19 international routes next month as it strives to offset a sharp decline in passenger travel demand with an increased demand for cargo deliveries.