TRQ to spend USD 1.3 billion underground development www.zgm.mn

Turquoise Hill Resources (TRQ) announced fourth-quarter 2019 production for Oyu Tolgoi (OT) as well as operational and financial guidance for 2020. Copper production in Q4’19 of 32,905 tons was lower compared to Q4’18 due to decreased head grade driven by the transition from Phase 4a and Phase 6a, to Phase 4b, Phase 6b and lower grade stockpiles, the company said in a report.Equally, gold production in Q4’19 of 24,343 ounces was also lower compared to Q4’18 due to the transition from Phase 4a to low-grade sources of Phase 4b and stockpiles.

2020 OUTLOOK

OT 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.Although the mid-point copper production range guidance is higher in 2020 versus the 2019 guidance, a lower gold production year is expected for 2020. This is due to the need to mine through lower grade material on the periphery of the South West pit as Phase 4b sinks towards the highest gold and copper grades in the bottom of the pit. It is anticipated that the higher grade ore will be accessed in 2021, resulting in a significant increase in gold production in 2021. Mill throughput for 2020 is expected to be approximately 40 million tons. Operating cash costs for 2020 are expected to be USD 800 million to USD 850 million. Capital expenditure for 2020 on a cash-basis is expected to be approximately USD 80 million to USD 120 million for open-pit operations and USD 1.2 billion to USD 1.3 billion for the underground development exclusive of any expenditure on power.Open-pit capital is mainly comprised of deferred stripping, equipment purchases, tailings storage facility construction, and maintenance componentization. Underground development capital includes both expansion capital and VAT. C1 cash costs are expected to be in the range of USD 1.80 to USD 2.20 per pound of copper produced, up from 2019 guidance largely reflecting the reduced gold production estimate. Unit cost guidance assumes the midpoint of expected 2020 copper and gold production ranges and commodity assumptions of USD 2.71 per pound copper and USD 1,362 per ounce gold.

UNDERGROUND DEVELOPMENT UPDATE

Construction of shaft 2 was completed in October 2019 allowing for the movement of 300 people per cage cycle versus a maximum of 60 people per cage cycle through shaft 1. Underground development material is also being lifted to surface via the Shaft 2 production hoist. Productivity improvements resulted in increased underground lateral development rates during the fourth quarter, with an average rate of 1,607 equivalent meters (eqm) compared to 1,214 eqm in the third quarter, with December seeing a record 1,809 eqm.Construction is progressing on shafts 3 and 4 with both collars now installed. Final preparations are now underway to enable commencement of main sinking operations for both shafts during the second quarter of 2020 Detailed analysis work on the mine design is still anticipated to be completed during the first half of 2020, and the Definitive Estimate, which will include the estimate of cost and schedule for the underground project based on the updated design of Panel 0, is still expected to be delivered in the second half of 2020.

Quality of life in Mongolia www.montsame.mn

Ulaanbaatar /MONTSAME/ The ‘Vision-2050’ is a policy document, which was formulated by a working group comprising of 1500 people, including scholars, experts and state secretaries of 13 ministries, heads of some government agencies, authorities of universities and representatives of non-government organizations. According to the Prime Minister's order No: 52 dated April 30, 2019, the working group analyzed development stages of the past 30 years of Mongolia and formulated the policy document that will define long and mid-term development policy until 2050. We are presenting 9 fundamental goals of the development policy in detail.

Ambassador of Japan pledges to increase Mongolian exports to Japan www.montsame.mn

Ulaanbaatar /MONTSAME/. On January 20, Minister of Foreign Affairs of Mongolia D.Tsogtbaatar met with Japanese Ambassador to Mongolia Hiroyuki Kobayashi to congratulate him on presenting his diplomatic credentials and assuming office.

Electric buses start running in Ulaanbaatar www.news.mn

Mongolia has imported 10 electric buses from China for transportation in Ulaanbaatar. The electric buses began operation earlier today (20 January) on a three month-long trial. According to officials, the buses can handle -50 and -60 Celsius temperatures and can be recharged after 15-20 minutes. The buses have 36 seats and run 200 km when fully charged.

Number of foreign workers with labor contract in Mongolia decreased by www.montsame.mn

Ulaanbaatar /MONTSAME/ At the end of December 2019, 4.6 thousand foreign workers from 95 foreign countries were employed with labor contract in Mongolia including persons in employment work for pay or profit and persons in volunteer work without pay or profit.

Savings in foreign currency increased by MNT464.2 billion from previous year www.montsame.mn

Ulaanbaatar/MONTSAME/. At the end of December 2019, the time deposit in domestic currency amounted to MNT 11.1 trillion, showing an increase of MNT 356.9 billion (3.3%) from the previous month and MNT 923.0 billion (9.1%) from the end of the previous year.

S. Korea to focus on promoting economic cooperation with Russia, Mongolia www.en.yna.co.kr

SEJONG, Jan. 20 (Yonhap) -- South Korea will focus on promoting economic cooperation this year with Russia, Mongolia and other countries located north of the Korean Peninsula in line with the diplomatic initiative of its New Northern Policy, Finance Minister Hong Nam-ki said Monday.

Cable car project discussed with French company www.montsame.mn

Ulaanbaatar /MONTSAME/ To improve public transport bus services and increase their variety and accessibility and reduce traffic congestion, a cable car transport project is planned to be implemented in Ulaanbaatar and a working group was set up in preparation for the project as per the Capital City Governor’s order No. A/198.

Tax revenue increased by 18.8 percent compared to previous year www.montsame.mn

Ulaanbaatar/MONTSAME/. In 2019, general government budget revenue amounted to MNT 11.9 trillion by preliminary results, with MNT 10.8 trillion of which accounted for equilibrated revenue. For the 2019 general government budget revenue structure, 90.5% was accumulated from equilibrated revenue. Total expenditure and net lending amounted to MNT 11.4 trillion, representing a deficit of MNT 627.8 billion in the equilibrated balance.

In December 2019, equilibrated revenue and grants of the General government budget reached MNT 1.1 trillion, increased by MNT 271.7 billion or 32.2% from the previous month and total expenditure and net lending reached MNT 2.2 trillion, increased by MNT 1.3 trillion or 2.5 times more from the previous month.

General Government budget revenue was comprised of 81.7% of tax revenue, 8.8% of non-tax revenue, 8.7% of the future heritage fund and 0.8% of the stabilization fund.

In 2019, tax revenue reached MNT 9.7 trillion, increased by MNT 1.5 trillion or 18.8% compared to the previous year. This growth was mainly affected by increases of MNT 460.8 billion or 22.1% in income tax, MNT 355.0 billion or 21.9% in social security revenue, MNT 288.0 billion or 13.1% in value added taxes, MNT 205.2 billion or 28.8% in other taxes, MNT 109.0 billion or 14.4% in excise taxes and MNT 107.7 billion or 15.8% in revenue from foreign activities.

In 2019, 26.1% of the total tax revenue was accumulated from income tax, 25.5% from value added tax 20.3% from social security contributions, 11.2% from other taxes, 8.9% from excise taxes, 8.1% from foreign activity revenues. The 2019 income tax revenue increased by 0.7 points, other taxes by 0.6 points and social security contributions by 0.5 points, while value added tax decreased by 1.3 points, excise taxes revenue by 0.3 points and foreign activity revenues 0.2 points as compared to the previous year.

In 2019, general government budget expenditure and net lending increased by MNT 2.2 trillion or 23.9% as compared to the previous year, totaling up to MNT 11.4 trillion by preliminary results. This was primarily affected by an increase of MNT 859.7 billion or 11.7% in current expenditure, MNT 136.2 billion or 51.0% in net lending and MNT 1.2 trillion or 75.3% in capital expenditure.

General government budget expenditure and net lending was comprised 71.8% of current expenditure, 24.7% of capital expenditure and 3.5% of net lending. Current expenditure was comprised 48.6% expenditure on goods and services, 37.3% current transfers, 10.5% interest and 3.6% of subsides.

By preliminary results of 2019, capital expenditure amounted to MNT 2.8 trillion, increased by MNT 1.2 trillion or 75.3% from previous year. Equipment expenditure decreased by MNT 22.7 billion or 10.8% compared to previous year, whereas construction expenditure increased by MNT 1.1 trillion or 2.1 times more, renovation expenditure increased by MNT 77.9 billion or 91.7%, other capital expenditure decreased by MNT 22.7 billion or 7.3%, strategic resource expenditure decreased by MNT 7.4 billion or 61.0% resulting an increase in the total capital expenditure.

Of the total capital expenditure, 75.1% accounts for construction expenses, 11.8% for other capital expenses, 6.6% for equipment expenses, 5.8% for renovation expenses and 0.7% for strategic resource expenses. The 2019 construction expenses increased by 13.4 points and renovation expenses by 0.5 points, while other capital expenses decreased by 7.5 points, equipment expenses by 6.5 points and strategic resource expenses by 0.1 points as compared to the previous year.

Source: National Statistics Office of Mongolia

Mongolia’s foreign trade surplus reaches USD 1.5 billion in 2019 www.montsame.mn

Ulaanbaatar/MONTSAME/. In 2019, Mongolia traded with 152 countries from all over the world and total trade turnover reached USD 13.7 billion, of which USD 7.6 billion were exports and USD 6.1 billion were imports. Total foreign trade turnover increased by USD 860.6 (6.7%) million, of which exports increased by USD 608.0 million (8.7%) and imports increased by USD 252.6 million (8.0%) compared to the same period of previous year.

Mongolian foreign trade balance has been in surplus since 2014 and foreign trade surplus reached USD 1.5 billion in 2019, increased by USD 355.4 million (31.3%) from previous year.

In December 2019, exports and imports reached to USD 564.2 million and USD 543.6 million, respectively. Compared to the previous month, exports increased by USD 37.3 million and imports increased by USD 24.4 million.

In December 2019, foreign trade surplus reached to USD 20.5 million. Compared to the previous month, foreign trade surplus increased by USD 12.9 million.

In total turnover, trades with two neighbor countries China and Russia have highest shares where trade with China was USD 8.9 billion in 2019, which is 64.4% of total goods turnover and 89.1 percent of exports.

In total export goods to China, 44 percent was coal and 26.4 percent was copper concentrate. While 77.5% of total export goods to the United Kingdom, 76.7% of total export goods to Singapore and 98.8% of total export goods to Switzerland were gold.

In 2019, imports by main countries, China share to 33.6%, Russia share to 28.2%, Japan share to 9.6%, USA share to 4.7% and Korea share to 4.4% of total imports.

Petroleum products share to 55.8% of Russia’s imports, Cars share to 60.9% of Japan’s imports, trucks share to 13.8% of China’s imports and there are many different types of products share to other percent.

The 608.0 million increase in exports from the same period of previous year was mainly due to the increases in exports of USD 288.2 million in bituminous coal and USD 273.9 million in raw or semi-manufactured gold.

Before the discovery of the major mining sites, agriculture was main economic sector of Mongolia. In 2019 by preliminary estimate, Mongolia exported USD 132.2 million meat and meat products, which is USD 17.2 million or 27.4% lower compared to previous year.

Export of washed cashmere increased by USD 46.3 million, while export of combed raw cashmere decreased by USD 9.6 million. Export of both washed cashmere and combed raw cashmere makes up to 4.3 percent of total export.

The USD 252.6 million increase in imports from the same period of previous year was mainly due to USD 46.5 million increase in mineral products imports, especially, USD 92.6 million increase in diesel imports and USD 267.0 million increase in imports of transport vehicles and its spare parts. In 2019, Mongolia imported 94065 vehicles, in which 69472 were cars. Imported cars increased by 5433 or 8.5% from previous year.

Exports of mineral products, textiles and textile articles, natural or cultured stones, precious metals jewelry made up 94.9 percent of total export. On the other hand, 68.9 percent of imports was mineral products, machinery, equipment, electric appliances, transport vehicle and its spare parts and food products.

Source: National Statistics Office of Mongolia