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February 01, 2016

Mongolia Attracting Increased Interest from Exporters
Australian businesses are taking an increased interest in Mongolia as market opportunities expand from mining which accounts for approximately 20 per cent of GDP to the economy, to include water management solutions.

Brendan Coyne, Austrade’s Trade Commissioner and Consul-General in Mongolia, said the relationship between Australia and Mongolia was strong as demonstrated by the large presence of Australian companies and the opening of the Australian Embassy in Ulaanbaatar in December 2015.

‘There are many Australian mining business operating in Mongolia, especially Australia’s world-class and highly regarded mining equipment, technology and services (METS) companies,’ said Coyne.

There are an estimated 200 Australian businesses that have already provided services valued at more than $US83 million to the Oyu Tolgoi (OT) copper-gold mine in the South-Gobi region.

The OT mine, which provides the majority of the copper-gold ore in Mongolia, is planning to commence an underground expansion and recently a multinational finance deal valued at $US4.4 billion was secured to support this expansion.

Institutions involved in this deal included export credit agencies from Canada, the US and Australia through Efic.

While numerous initiatives have been held for Australian METS companies to explain the opportunities in Ulaanbaatar, a recent ‘Doing Business in Mongolia’business breakfast involving AustCham Mongolia attracted over 90 participants – which was AustCham’s largest attended event.

‘The business breakfast featured a panel discussion involving five experts covering different aspects of commencing and undertaking business within the mining sector in Mongolia.

‘It also leveraged off a major forum Oyu Tolgoi held promoting its Underground Development to suppliers that attracted over 600 organisations and approximately 50 Australian organisations attended which included nearly 30 companies who travelled from outside Mongolia,’ said Coyne.

The opportunities for Australian companies to work with Mongolia were further highlighted at the recent opening of a groundwater monitoring network in the city of Choir, approximately 200 km south of Ulaanbaatar.

‘While mining is important to the economy of Mongolia, there is recognition that water management is central to allow sustainable economic development to occur, particularly in rural areas where agriculture is a part of life.

‘This recognition presents growing opportunities for Australian businesses that can offer new technology and solutions to address water management and conservation concerns,’ said Coyne.

Austrade has also just developed the “Mongolian Mining Projects Report 2015” which provides a comprehensive guide for Australian METS exporters considering doing business in Mongolia.

Organising ASEM if an Honor and a Historic Opportunity
D.Gankhuyag, State Secretary of the MFA and Chairman of the ASEM Mongolia Office, is invited to our column ‘interview’ to talk about the significance of organizing the ASEM summit, the status of the preparations for the summit and other related issues.

Good day. Shall we begin our interview first with a reflection on the Mongolia-ASEM history?

ASEM is not only a forum between Asia and Europe. It is also an informal process of dialogue and cooperation, based on promoting equal partnership and enhancing mutual understanding. It is also an open forum for decision makers, policy makers, researchers and academics, civil society figures and businesspeople to discuss issue and express opinions of common interest. Mongolia became an ASEM member only in 2008, and within this short span of time we are hosting this important forum in our country. This can be viewed as a major accomplishment for our country, a huge responsibility, as well as a rare historical opportunity.
Since ancient times, Mongols have been striving to link the West with the East and to establish peace and tranquility à la Pax Mongolica. They have played an important role as a geographical, economic and cultural bridge, linking the West and the East and we hope to continue to carry out this important responsibility in the future, too. The successful organization of the ASEM Summit would give us additional opportunities to make the world better understand and appreciate Mongolia.

For the first time ever Mongolia would be hosting the Heads of state and government of more than 50 countries at one and the same time. How well are the preparations for the ASEM Summit proceeding?

The Prime Minister-headed National Council as well as the Council’s working groups and the ASEM Mongolia Office are all successfully fulfilling their respective duties and functions to ensure the successful preparation of the summit. The expansion of the capacity of the Chinggis Khaan International airport has been ensured and additional aircraft stands have been built. A lot of work has already been accomplished by way of selecting the hotels that would accommodate the high level guests and accompanying delegates, working groups, journalists and media people coming for the ASEM Summit, improving the quality of hotel services, and building the capacity of the hotel personnel. The construction of the ASEM Villa that would house the heads of the delegations to the Summit is nearing completion.
Roads, bridges and fly-overs have been built anew, expanded or renovated with the objective of improving the traffic in the city of Ulaanbaatar.
We are also working closely with the European Union and the European member countries of ASEM in training translators and interpreters for, as well as managing the protocol of the ASEM Summit.
Planned actions for promoting Mongolia to the world, promoting its history, and culture, socio-economic development are already being implemented in anticipation of the Summit.

Many side events would be organized during the ASEM Summit. Can you please elaborate what they would be?

Besides the Summit-level meeting, 9 different side events are planned to be organized during the Summit involving the business, civil society, parliamentarians and the youth. The host countries of the previous ASEM Summit had not organized this many side events during an ASEM summit. This is an expression of the enormous trust being bestowed on us by the Asian and European countries. This is precisely why we are also trying our best to ensure the success of the Summit.
Another important feature of the Summit in 2016 is that it coincides with the 20th anniversary of ASEM itself. Mongolia has now a dual important responsibility of drawing the road map for the next 20 years of ASEM. In order to live up to this important responsibility with honor, many ASEM member countries are working closely with us.

The hosting of the ASEM Summit would become a historical event for our country. Can you share with us your thoughts on the significance of this event?

Mongolia for the first time ever would be organizing a large-scale summit that is expected to bring together the Heads of state and government of many Asian and European countries. The organization of this summit in the country can be regarded not only as a matter of honor and great responsibility but also as the peak of success and accomplishments of the country in its foreign relations and diplomatic efforts 25 years after Mongolia’s transition to democracy and renewal of its foreign policy doctrine.
The successful organization of the Summit will help further solidify Mongolia’s international prestige, ensure many more countries support our foreign policy doctrine and active international efforts, and expand cooperation with them.
The Summit would also help make progress in the national tourist and services sector, and have a positive impact on reintroducing the flow of foreign investment in the country. The Summit would not only help popularize the centuries-old national history, customs and traditions, arts and culture throughout the world, but would also help consolidate the historical experience and gains in social relations.
What’s more, we would gain new experience in organizing international level meetings and forums in the future. And we are confident that this would make it possible to host many more similar international activities.

Thank you very much.

Thank you, and taking this opportunity, I would like to thank and wish good luck to everyone for their sincere contribution, effort and time to ensure the successful organization of this landmark event in the country.

Mongolia Included in "Top 10 Ethical Travel Destinations in 2016"
Help has arrived for travelers who've resolved to avoid spending their tourism cash in countries with poor human rights and environmental records.
Non-profit group Ethical Traveler -- a project of the Berkeley-based Earth Island Institute -- has just released its annual list of the 10 most forward-thinking countries in the developing world.
According to the California-based group, each country is reviewed for its performance in the areas of human rights, social welfare, animal welfare and environmental protection.
At the same time, it also needs to have plenty of appeal as a travel destination.
Five first-timers have made this year's list -- Grenada, Micronesia, Mongolia, Panama and Tuvalu.
"By spending travel dollars in forward-thinking countries, explorers can reward the good guys -- and encourage humane practices worldwide," says Ethical Traveler's report.

The 2016 winners, in alphabetical order, are:
1. Cape Verde
2. Dominica
3. Grenada
4. Micronesia (Federated States)
5. Mongolia
6. Panama
7. Samoa
8. Tonga
9. Tuvalu
10. Uruguay

"There are seven island nations on the 2016 list, marking a continuing trend in the winners' circle," says the report.
"Climate change affects islands dramatically, so island nations tend to put extra effort toward effective environmental policies."
Mongolia's inclusion is also significant, as it's the first developing mainland Asian country to ever appear on the list.
"While we acknowledge that no country is perfect, we honor those that strive to build a better, more sustainable society," says Ethical Traveler co-founder and travel author Jeff Greenwald.
Source: CNN

Mongolia will become founding member and shareholder in the Asian Infrastructure Investment Bank
Ambassador Ts.Sukhbaatar to the People’s Republic of China receives mandate to sign on the Memorandum of Understanding between founding countries of the Asian Infrastructure Investment Bank.
The Asian Infrastructure Investment Bank was initiated by Chairman Xi during his visit to Mongolia and its importance lays on the solution of capital resource in the infrastructure sectors of the developing countries in the region, effective coordination of the capital and monetary flow and bringing acceleration in the regional development.
Government of People’s Republic of China made proposal to Mongolia to become its founding member and the Cabinet Meeting approved such involvement. Draft of the Memorandum of Understanding of the Asian Infrastructure Investment Bank is composed and it will be signed by the representatives of founding countries on October 24. This signing will enable further contract building process and founders are planning that by the end of 2015, the bank will start its operation.
The bank establishment will add a new financial option for the Mongolian infrastructure and other sectors that require investment.

SGK approves two railway lines
The State Great Khural’s resolution on “measurements of implementation of the railway transportation policy” is approved by 84% votes.
According to the resolution draft, new railway line gauge will be 1435 mm between China and mineral enrichment factories, based on the mutual agreement with the Chinese side. Also, if Mongolia and China reaches agreement on the railway transport cooperation, Tavan Tolgoi – Gashuun Sukhait – Sainshand – Zamyn Uud, Khuut – Bichigt new railway line gauge can be 1435 mm, Arts suuri – Erdenet (1), Tavan Tolgoi – Sainshand – Baruun Urt – Khuut – Choibalsan (2), Khuut – Numrug (3) new railway line gauge will be 1520 mm.
The Government proposed three directions in the railway, but Sainshand – Zamyn Uud direction was removed and the above mentioned two directions were approved.

February 18, 2014

Export of food products increased by 40%
Ministry of Industry and Agriculture released a data indicating export of food products has been increased by 40% in 2013 compared to the previous year. Also, the food industry produced MNT737.5 billion worth products and the sales revenue was MNT815.2 which is 12% higher than that was in 2012. The food industry participants emphasized that the improvement on legal environment was a big boost. The new regulation made a clear distinction on roles of food security in the country among producers, exporters, importers and customers.

Food exports of Mongolia in 2013

Exports. Ton

Value in mln USD


Meat products




Animal by-products




Frozen and canned fish




Dairy products








Animal gut




Bone meal
























Brown wheat flour




Canned meat








Bakery Products




Fruits, vegatable juic







Government receives 1100 requests for financing projects that will replace import

In the framework of government’s goal on developing goods and services that will replace imports it announced it will accept requests for projects that will be financed by the Chinggis Bond funds. 1151 projects were received by the government in the period of 20 days. Government assumes that producing domestically will also contribute on MNT appreciation which is one of the main targets for the country’s economic goal.
The majority of the projects were in agriculture and constructions sectors. The amount for the needed projects weren’t announced yet, however, the remaining fund from the Chinggis Bond is around USD234 million. Prime Minister N.Altankhuyag stated publicly that his government is committed to spending all the remaining funds for enterprises that will replace imported goods and services. The announcement of the preliminary selection of the projects will be announced on within 15th of March.

An oil pipe from Mongolia to China

It has been nearly a decade since Mongolia has become an oil exporting country. Most of the oil exploration has been performed in Central and Eastern regions of the country. After the discovery of Tamsag basin when the Chinese companies Petro China Dachin Tamsag and Donshen spent USD1.5 billion in exploring and developing the reserve the companies expressed their disappoint of the volume of the reserve. However, since 1996 these companies exported 800,000 barrels of oil through roadway causing a significant amount of damage in the local environment. Last year, the court ruled that Petro Dachin Tamsag is a subject to a penalty of MNT1.3 billion which is approximately USD1 million at the time.
Also, last year Mongolian government have entered into a swap agreement with the Chinese side to import 10,000 tons of petroleum every month. It has been a first step to try to decrease the complete dependency from Russia. This is the first agreement by Chinese side to export petroleum after China became a net oil importer since 1993. Mongolia imports 1.1 million tons of petroleum annually and expected to reach 1.3 million by 2016. The growing oil demand and the rational need of decreasing oil dependency from Russia, it was logical that Mongolia would invest in building oil refineries and coal liquefaction plants.
Mongolian authorities have issued 1292 operation and 1763 exploration licenses in the mining industry. It comprises 9.7% of overall privately permitted fields. There are  16 companies operating in 20 fields under Profit Sharing Agreement with the government. Mongolia produced 13.9 million barrel or 1.8 million ton of oil and exported 13.3 million barrel.
However, in opposition to this Chinese oil producers have proposed to build oil pipes from Mongolia to China. It has been said that the main reason is the increasing oil production in Tamsag basin and also logistic costs. The authorities are yet to respond to the request and thorough research is being performed by the Petroleum Authority of Mongolia.

July 29, 2013

Mongolian Mineral Resources

Ulaanbaatar /MONTSAME/. Mongolia has proven 173.3 billion tons of coal, and it is 21.5 billion tons by exploration works.
By the first half of this year,  some more  2.6  billion  tons  went  in  to  the  reserves and this made Mongolia one of the ten largest by coal countries. It was reported Wednesday at a meeting of the Professional Council of Minerals. It also discussed  81  reports  on  results  of  exploration done in a first half of 2013. According  to  the  report,  Mongolia has  7.82  tons  of  gold,  280.3  thousand tons  of  copper,  70.46  million  tons  of iron,  2,688.8  million  tons  of  coal,  1.15 million tons of fluorite, 319.5 million tons of limestone,  2,403.06  thousand  cubic meters  of  gypsum,  5,015.1  thousand cubic  meters  of  cerolite  and  4,053.58 thousand tons of bauxite.

June 28, 2013

President gets re-elected

Democratic party candidate and previous President Ts. Elbegdorj has won the election and it is confirmed by the General Election Committee. He has won the majority which is  50.23%. MPP Candidate B.Bat-Erdene showed a strong competition after getting 43% of the votes. MPRP Candidate N.Udval gets 6.8% of the vote.
Interestingly, out of 9 city districts and 21 provinces in the country, MPP Candidate B.Bat-Erdene won 7 provinces and 3 districts. In the Umnugobi province, which is major mines are located, Ts.Elbegdorj has won by only 1%, 45% and 46% respectively.
Historical voter participation percentage shows that the participation is decreasing every presidential election as follows:
1. 1993 – 92.73% – DP
2. 1997 – 85.06% – MPRP
3. 2001 – 83.8% – MPRP
4. 2005 – 74.97% – MPRP
5. 2009 – 73.59% – DP
6. 2013 – 62.4% – DP
N.Udval was the first woman to run for president in Mongolia. Although, her calculation was to lean on former-president N.Enkhbayar’s platform, the stronger message was that she is the first to run.
Now, that Democratic Party is the majority in State Great Khural and president in place, the reformist government has no obstacles on the way. The people of country has left only to see and witness their reform and path to the economic which DP is promising.

Mongolia Taps North Korea Oil Potential to Ease Russian Grip

A Mongolian company has tapped one of the world’s most closed markets by taking a stake in a North Korean oil refinery, to help Asia’s fastest growing economy ease its energy reliance on Russia and China.
HBOil JSC, an oil trading and refining company based in Ulaanbaatar, Mongolia, said it acquired 20 percent of the state-run entity operating North Korea’s Sungri refinery, according to an e-mailed statement yesterday. It intends to supply crude to Sungri, which won’t be fully operational for up to a year, and export the refined products to Mongolia.
“Mongolia has had diplomatic relations with North Korea for many years,” Ulziisaikhan Khudree, HBOil’s chief executive officer, said in a June 12 interview in Ulaanbaatar. “There are certain risks, but other countries do business with North Korea so I am quite optimistic the project will be successful.”
The investment comes as ex-communist Mongolia seeks to power its mining-led boom while offering sanctions-hit North Korea a bridge to economic reforms. Since Swiss-educated Kim Jong Un took over the leadership of the totalitarian regime in December 2011, Mongolia has pledged to help its Soviet-era ally implement an economic transition similar to its own of the 1990s.
In March, Mongolia offered to play peacemaker after North Korea said it’s in a “state of war” with its neighbor to the south.

Landlocked Country

Mongolia, a landlocked country squeezed between Russia and China, adopted democracy and free elections in 1990, opening up to foreign investment that has focused mainly on its commodity riches. Rio Tinto Group Plc has invested about $6.2 billion in the country’s Oyu Tolgoi copper and gold mine that’s due to start exporting this month.
Although Mongolia has become one of China’s main suppliers of coking coal, used to make steel, the nation of 2.9 million has limited reserves of crude oil and relies on its two neighbors for fuel, which can periodically lead to shortages.
Mongolia has in the last year encouraged what it saw as signs of economic change in North Korea. After a meeting with Kim Young Nam, the North Korean president of the Presidium of the Supreme People’s Assembly, in September, Mongolian President Tsakhia Elbegdorj said he saw the isolated nation taking steps towards economic reform.
Outside of Mongolia, North Korea’s Kim Jong Un has so far failed to improve international relations since succeeding his father. A rocket launch last year broke a food-aid deal agreed with the U.S. in February 2012. North Korea’s proposal for peace talks with the U.S. on June 16 was met with skepticism.

Economic Change

The HBOil deal looks like a “one-off” at this point as rhetoric for economic change in North Korea has not translated into real investment — a sign that “real reform” has yet to come, said Daniel Pinkston, a Seoul-based analyst with the International Crisis Group.
Still, like Mongolia, North Korea needs to diversify its sources of supply, technology and investment away from China, and business offers that try to improve its own energy security problems will be seen as favorable by the Kim regime, Pinkston said. “I can see all the incentives for North Korea to desire this kind of arrangement,” he said.
Under the transaction, worth as much as $10 million, the Mongolian Stock Exchange-listed HBOil would swap shares for full ownership of Ninox Hydrocarbons (L) Berhad, a private Malaysian company that owns 20 percent of KOEC International Inc., and issue convertible notes to fund investment at Sungri.

Exploration Rights

The rest of KOEC International is held by North Korea’s national oil company, Korea Oil Exploration Corp., which also has oil production and exploration rights in North Korea.
“This is a chance to take an equity holding in a foreign entity, and will allow us to import petroleum products, which could be lower than the current price,” said HBOil’s Khudree.
HBOil jumped by the daily limit of 15 percent to close at 253 tugrik (18 cents) on the Mongolian stock exchange today.
The deal will be the first purchase by a Mongolian-listed company of a foreign asset, according to Joseph Naemi, chief executive officer of the Ninox parent, Ninox Energy Ltd. The company is in compliance with international sanctions levied against North Korea, he said.
“If the sanctions change, and if they target the oil and gas industry, that would put us out of business, and we will have to comply,” Naemi said. “That is a risk one takes.”
Naemi said he had briefed his North Korean partners on the transaction and that “they are supportive.” No one was available to speak about the deal at North Korea’s embassy in Ulaanbaatar, which is in the middle of a renovation.

Under Orders

North Korean entities are currently under orders “from the top” to boost international deals, attract foreign trade and earn more, according to Pinkston.
North Korea has three onshore oil basins with “proven working petroleum systems” and the country is conducting exploration for new fields, BDSec brokerage, Mongolia’s largest and the underwriter of the bonds HBOil plans to offer, said in a note to investors yesterday.
The Sungri refinery, located in the Special Economic Zone of Rason City in North Korea’s northeast, has a refining capacity of 2 million tons a year and is connected to the Russian railways system, HBOil said in its release.
Oil production in Mongolia rose 42 percent to 3.64 million barrels in 2012 compared with a year earlier, and it exported almost all of that, according to government data. The country, which has no major oil refineries, consumed about 22,000 barrels a day of refined petroleum products in 2011, according to CIA’s World Factbook. That is equivalent to about 1.1 million tons a year.

Alternative Proposal

HBOil has an alternative proposal for delivering petroleum products to Mongolia. The company will offer to sell the North Korean refined oil to the far east of Russia, where there are no local refineries, Naemi said. In exchange, Russian oil companies, most of which own refineries, could send their petroleum products to Mongolia, a shorter route than delivering cargo to the country’s far east, Naemi said.
“We can deliver what they need on the east coast of Russia, and they can deliver the same like product into Mongolia,” Naemi said. “From a Russian perspective it makes sense, so the swap strategy would be the ideal scenario, but sometimes that does not happen.”
HBOil, which recycles fuel used by mining companies in Mongolia, is also “studying the potential to expand its oil product processing and manufacturing business into” North Korea, the company said in the statement.
HBOil is part-owned by New York-based private equity firm Firebird Management LLC, according to CEO Khudree. Firebird also owns stakes in Mongolian companies including coal miner Sharyn Gol.
Additionally, HBOil has signed an option to buy 51 percent of Blacktip Energy Inc., another Ninox Energy Ltd. subsidiary and owner of Korex Ltd., which is an offshore explorer focused on the sea east of North Korea, it said.
Mongolia’s economy grew 12.3 percent last year, compared with 17.5 percent in 2011, according to its central bank.
Source: Bloomberg BusinessWeek

PetroChina to pay MNT1.3 billion for environmental damages

As Mongolia moves to improve its safety and environmental standards many companies have been affected by the law. One of them is “Petrochina Dachin Tamsag” – a oil company operates far east of the country. The wholly China owned company is deemed to pay MNT1.3 billion after three levels of the court established the company guilty for the huge environmental damages it caused in the area. However, the company requested to put the case under review due to new and previously undiscovered evidence and situation.
The court ruled that the “new” evidences submitted the court is nothing new and it is unnecessary for another review on 25th of June.
Now, “Petrochina Dachin Tamsag” is deemed to pay the forfeit of MNT1.3 billion (USD960 thousand) within the time-frame stated in the law.

June 11, 2013

Aimag governors to have much power on exploration licenses issuance

Ministry of Minerals is collecting comments and findings from other ministries (legal procedure to adopt law in Mongolia) on its newly drafted Common Mineral Law of Mongolia.
This draft law has 10 chapters and 46 articles. The draft law adopted procedure of issuing mining and exploration licenses of common minerals as it was regulated in the current law, Minerals Law.
Minerals Authority shall receive exploration license application form and review the application, and convey it to the Governor of Aimag for further approval.
The Governor shall make a decision to issue or not and the decision will be reported to the Minerals Authority for further cadastral record, which will eliminate collision of licensed areas. But mining license issuance is remaining the same.

Aimag governors to have much power on exploration licenses issuance

Ministry of Minerals is collecting comments and findings from other ministries (legal procedure to adopt law in Mongolia) on its newly drafted Common Mineral Law of Mongolia.
This draft law has 10 chapters and 46 articles. The draft law adopted procedure of issuing mining and exploration licenses of common minerals as it was regulated in the current law, Minerals Law.
Minerals Authority shall receive exploration license application form and review the application, and convey it to the Governor of Aimag for further approval.
The Governor shall make a decision to issue or not and the decision will be reported to the Minerals Authority for further cadastral record, which will eliminate collision of licensed areas. But mining license issuance is remaining the same.

May 17, 2013

Macroeconomic Indicators Mongolia 2009-2012

In 2009-2012 Mongolian economy has been affected by the global financial crisis started in 2008, European sovereign bond crisis, and zud in 2009-2010. We witnessed the biggest economic downturn since 1992.
GDP was nominally doubled for the past 4 years, mining sector accounting annual rate of 6.4%, and other sectors 9.2% respectively. The GDP per person was also doubled to an estimate of 3611.5 USD.
Foreign Trade:
Foreign Trade volume has increased 2.8 times from 4 billion USD in 2009 to 11.1 billion USD in 2012. However, the trade deficit has also increased from 0.25 billion USD to o2.35 billion USD. Between the years, the export has increased 2.3 times, and import has increased 3.1 times. The most significant increase occurred in 2011 from previous year of 2010. From 2010 to 2011 the export has been increased by 65.6%, import by 106.2%. The increase in coal export was 6.2 times, iron ore 6 times, copper concentrate 1.7 times, and non-processed crude oil 2.9 times. The main factor in import increase was caused by the equipments in mining and oil projects such as Oyu Tolgoi. However, processed and non-processed gold export was decreased by 60.4%.
Foreign Direct Investment:
FDI of 10.94 billion USD was made in 2009-2012 to the country. 4.7 billion USD was invested alone in 2011, mining sector accounting for the majority, 4 billion USD.
National CPI was increased by 14 %, and 14.2% in the capital Ulaanbaatar. The main pushers were increase in meat price, and tax increase in alcoholic drinks. Tax for tobacco products was increased by 54.6%. The price increases in alcoholic drinks and tobacco is 54.6%, beverages 19.9%, hotels and restaurants 21.8%, educational service 16.2% which is are the biggest increases in 2011. However, telecommunications and postal services prices were decreased by 1.2%.
Employment, unemployment and poverty:
The compliment between economic development and population growth in the country resulted positive effects and changes on work force demand and jobs. Growth in working age averaged annual rate of 3.5% which is two times greater than the population growth in 2009-2012. This proves the demographic window of the country. Agriculture and husbandry is still the biggest employer accounting 33% of the total employment. Services sector accounts for 15%, logistics and warehouse 7%, processing and production 6%, and construction sector accounts for the 5%. However, the biggest industry – mining accounts for 4% only.
Poverty in the population decreased from 38.7% to 29.8% in 2009-2012. Poverty level is the poverty scope index which shows the population that is living under the poverty line by their consumption. All of the indicators show that poverty is common in the rural areas.
As the end of 2012, there are 14 banks and their 1382 branches operating nationwide. Total saving holders reached 2.1 million, increased by 264 thousand, and borrowers reached to 614.6 thousand, increased by 8.4 thousand. Total resource reached to 10.2 trillion MNT due to infrastructure projects, long-term financing measurements by the government and Bank of Mongolia combined with increase in savings and total money in the banking system.
Net asset in the banking system reached to 11.4 trillion MNT, 24.2% increase from 2011 which is 2.2 trillion MNT. 22.3% of the net asset is cash, 10.3% is short-term investments, 58.6% is outstanding debt receivables, and 8.8% is other assets.
Stock market:
The stock market value is 12.9% of the GDP of the country and has increased 3 times from 2009-2012 to 1.8 billion MNT. Value of 30 companies account for 85.9% of the stock market.
Insurance market:
As the end of 2012, there are 18 insurance companies with 213 branches, 2357 insurance representatives, 17 insurance brokers, 9 insurance damage appraiser companies, 18 actuaries, and 2419 license holders operating in the country. The total investment in these companies were 107.6 billion MNT which is a 2.6 times increase from 4 years ago.
State budget 2009-2012:
The total budget income and aid was 2 billion MNT in 2009, and 4.8 billion MNT in 2012. The special requirement of the Sustainable Budget Law was implemented in 2011, registering the budget income by balanced method accumulating 328.4 billion MNT in the budget sustainability fund. The purpose of the fund is to stabilize and decrease the effects of economic cycle and commodity price volatility of the state budget.
The budget policy was based on decreasing the budget expansion from the previous years without affecting the public service effectiveness and quality, and targeting inflation when it is absolutely necessary. The budget was 2.3 billion MNT in 2009, 38.6% of the GDP, and increased to 5.92 billion MNT in 2012.
Source: Ministry of Finance and Ministry of Economic Development of Mongolia

Japan firms to build Mongolian international airport

Two Japanese companies said on Monday they will build Mongolia’s second international airport as Tokyo steps up business ties with the mineral-rich country.
Trading house Mitsubishi Corp and engineering firm Chiyoda Corp said in a statement that they had been awarded the construction contract worth 50 billion yen ($493 million) by the Civil Aviation Authority of Mongolia.
Work on the new airport, about 50 kilometres (30 miles) outside the capital Ulan Bator, would start later this year, they said.
Construction of a 3.6-kilometre (2.2 mile) runway and terminal buildings with a capacity to handle up to two million passengers a year was scheduled to be completed by October 2016, a Chiyoda spokesman said.
The project will be about 90 percent financed by Japanese government loans to Mongolia, the spokesman said.
Japanese Prime Minister Shinzo Abe visited Mongolia in March, seeking closer trade and diplomatic ties with the country due its vast mineral reserves and strategic location on neighbouring China’s northern border, as well as its diplomatic ties with North Korea.
Source: AFP

Demand for the Commercial Banks from AFCCP

Agency for Fair Competition and Consumer Protection Mongolia is giving two-week notification to 14 commercial banks effective from tomorrow. Previously the mentioned violations have been in the courts. However, the previous authorities of the agency have failed to appeal in the Supreme Court of Mongolia. Chairman of the agency stated that the following violations should be corrected and banks should take an action to resolve the issues in two weeks:

Mongol-93 hits the market

Mongolian government has started implementing a policy to increase the supplier sources of gasoline and diesel fuels of the country. Relevant orders have been given to the Mining Ministry. Oil export to China has been increasing steadily in the recent years enabling Mongolia to initiate oil processing factories to produce its own gasoline and diesel fuels. However, the timing for the end product from oil is in its development phase. Thus, the government took action to bring the usage of  national gasoline to the country before it builds a factory after making a proposal to the Chinese government.
Contract has been made in April this year between in the Khukh-Khot’s oil refinery of CNPC and Ministry of Mining. CNPC will supply Mongolia with up to 10,000 tons of gasoline called Mongol-93. We believe it is a swap contract made between the sides for reaching 8 percent of CNPC’s  Khukh-Khot refinery oil demand.
Gasoline importers NIC, Shunkhlai and Magnai Trade started the sale of Mongol-93 today and Ulaanbaatar Taxi started its working day with the new fuel. PM Altankhuyag N., other ministers and number of MPs took part in the opening ceremony. PM emphasized the importance of oil independence, and asked the importers and relevant ministers to work hard on lowering the gas price even further. He also added that the government will work hard to build its own refineries to process its own oil.
Mongol-93 is based on export price of the Mongolian oil, therefore if the price falls in China, Mongolia-93′s price will go along. Mongolia supplies 400-500 thousand tons of oil to China. The oil is being traded at SMX under the name Dachin-33.

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