OIL EXPLORATIONS BEING CONDUCTED ON 25 SITES
Ulaanbaatar /MONTSAME/ The Petroleum Authority has reported that more than USD 50 million is expected to be invested in oil exploration in 2017. As of June, 21 contracted companies are conducting exploration on 25 sites. Deals for exploration on three other sites and one open exploration, and a tender is underway for two sites, reports the authority.
The most successful among the international companies that have been operating in Mongolia is Petro Matad. The company secured a deal with Sinopec and is starting drilling works this September. As of last Friday, price of Petro Matad’s stock rose by 1.49 percent at the London Stock Exchange.
The Government has set a goal to accumulate MNT 233.5 billion from the oil exports to the government budget. In the first five months of this year, MNT 83.7 billion was accumulated, with 42.2 percent export completion. Also, USD 452 million is going to be invested in extraction of oil.
DELEGATES FROM 100 COUNTRIES
Ulaanbaatar /MONTSAME/ “Expo Mongolia 2017” international exhibition and conference will be held at the Misheel Expo on October 10-12, with aim to support the growth of major economic sectors, such as mining, construction and transportation and introduce advanced technology. The 5th exhibit is expected to be attended by more than 2,000 guests, representatives and experts from over 100 countries and will discuss business partnerships and product sales and introduce advanced innovation technologies. The exhibition will be organized jointly by the Ministry of Mining and Heavy Industry, Ministry of Road and Transport Development, Ministry of Construction and Urban Development, the Governor’s Office of the Capital, Mongolian National Chamber of Commerce and Industry as well as the Federal Ministry of Economic Affairs and Energy of the Federal Republic of Germany, and the “Heavy Equipment Manufacturers Association” and the American Chamber of Commerce in Mongolia and French and Mongolian Chamber of Commerce. Exhibitors will be able to schedule and hold meetings with international guests, through organizers.
EXTERNAL TRADE SURPLUS SURGES
Ulaanbaatar /MONTSAME/ In the first half of 2017, Mongolia traded with 139 countries and total trade turnover reached USD 5.0 billion, of which USD 3.1 billion were made up by exports and USD 1.9 billion, by imports.
Total foreign trade turnover increased by USD 1.3 billion, in which, exports increased by USD 913.3 million, and imports, by USD 431.5 million against the same period of 2016.
In the first half of 2017, foreign trade surplus reached USD 1.2 billion, representing increase of USD 481.8 million from USD 693.3 million in the same period of 2016. The export rise of USD 913.3 million was due to increase of USD 960.9 million in mineral products export, particularly an increase of USD 989.2 million in coal export; however, export of precious metals decreased by USD 100.0 million.
The import increase of USD 431.5 million mainly reflected USD 148.2 million increase in mineral products import, especially, USD 108.0 million increase in diesel import and USD 30.1 million increase in petrol import, USD 99.1 million rise in machinery, equipment, electric appliances, USD 96.3 million increase in transport vehicles, their spare parts and USD 40.3 million in base metals.
Source: National Statistics Office
Q1 export revenue, trade surplus highest ever
Figures revealed by the National Statistics Office show that foreign trade turnover in the first quarter of 2017 reached $2.76 billion, the highest amount for the first quarter in the past 5 years. Export revenue reached $1.3 billion, a 35% increase on a YoY basis, and also the highest first quarter earning ever, largely due to the fivefold increase in coal export earnings.
The $523-million trade surplus was also the highest ever in the first quarter of a year.
Minerals export makes up the highest share in the export revenue.
Export of copper concentrate dropped to 366 million tons, or 11% YoY. Income from export was $380 million, a 21% decrease YoY. The share of copper concentrate in total exports was 29.2%, compared to 50% in the first quarter of 2015.
Coal export reached 8.1 million tons, up by 4.8 million YoY. Revenue rose by 5 times YoY to $541.3 million, having been $99 million in the corresponding period last year. The share of coal in total exports stood at 41.6%, highest in the past 4 years. This is the first time since mining started at Oyu Tolgoi when coal revenue has exceeded that of copper. The increase is directly linked to the rise in coal price. In March alone, coal export reached 3.3 million tons, earning $214 million.
Iron ore export reached 1.1 million tons, or an 11% YoY increase. Earning stood at $70.1million, $40 million more YoY.
Gold export shrank by 1.8 tons reaching 1.1 tons. Revenue fell to $43.7 million, 60% or $111 less YoY.
Oil export decreased by 17% to 1.8 billion barrels. However, revenue increased by around $20 million and reached $93.1 million. The share of oil in total exports was 7% compared to 7.6% in the same period in 2016.
Export of these 5 products earned a total $1.1 billion and was 86.8% of total exports, 4% more than last year’s 82.8%.
Source: Mongolian Mining Journal
Coal’s come back year
The first five months of the year saw Mongolia exporting 15 million tonnes of coal and earning $1 billion from it, taking us back to the heady days of 2011 when more coal than ever before was exported. Then, as now, the export success gave a big boost to a national economy in crisis.
The 2011 export figure of 21.1 million tonnes was surpassed in 2016 when 25.8 million tonnes were exported. However, the lower prices prevailing in 2016 kept the export revenue for that year at $973 million, substantially less than the $2.25 billion earned in 2011. Coal export revenue in the first five months of this year is already higher than that in 2016 as a whole. Additionally, in these five months, coal has outperformed copper in terms of earning, again something that was first seen in 2011. That was a year when coal prices skyrocketed but then they started falling, and from the next year until now, copper has again been on top. This could well be coal’s comeback year.
The increase in exports is not all due to the way the market has moved but credit also goes to Mongolian coal miners’ success in improving productivity. S.Bold-Erdene’s report in Mongolian in this issue details the hard work put in for this by major miners such as Erdenes Tavan Tolgoi, Energy Resources, the smaller Tavan Tolgoi, Mongolyn Alt, Chinhua MAK Narynsukhait, SouthGobi Sands, MoEnCo, and Usukh Zoos.
Exports perked up late last year, even if it only temporarily, with Mongolian miners grabbing the opportunity to export more as also to sell for a higher price. Now if prices hold in the coming months, Mongolian coal exporters will definitely be in a good position. The amended 2017 budget projects that 25.8 million tonnes of coal will be exported, putting MNT299.4 billion into the state budget. As the first five months have accounted for more than 60 percent of the anticipated volume for the whole year, it is safe to presume that the final results at the end of 2017 will be substantially much better than what has been projected.
Another topic we cover in depth in the Mongolian section in this issue is the likely effect on the Mongolian economy of the Extended Fund Facility (EFF) programme of the IMF. The government is confident of its successful implementation, with progress in mega projects, including Tavan Tolgoi, OT second phase, and Gatsuurt. This is now seen as the most important way to revive our economy, and nothing should be allowed to obstruct the development of these projects. Otherwise, all the money from the IMF programme would not be seen as having been effectively utilised.
China seeks to rebuild the ancient Silk Road connecting the western and eastern worlds under the new name One Belt, One Road. Some $5 trillion is to be spent on the ambitious project, which will allow Chinese President Xi Jinping to present a positive and powerful image of China. The success of his initiative will make dramatic changes to the global economy, and is expected to bring cheer to the global mineral commodity sector. B.Tugsbilegt’s analysis of how realistic such expectations are can be read in the Mongolian section.
It was decided in 2014 that the state will not hold any shares in the Tsagaansuvarga project and MMJ had lauded this decision. A few MPs, however, took certain steps to stall the fate of the project, and for almost three years, the project was in limbo. G.Tsogt, Deputy Director responsible for Production and Project Implementation at Mongolyn Alt, gives MMJ the good news that the project is now back on track.
Source: Mongolian Mining Journal
CABINET MEETING IN BRIEF
Ulaanbaatar /MONTSAME/ During its meeting on July 4, Tuesday, the Cabinet
made following decisions.
• The Cabinet adopted a revised Procedure for formulation of report on Mongolia’s compliance with multilateral international treaties’, and a schedule for institutions in charge of the report.
• The Cabinet discussed and agreed to add a few suggestions to a draft bill on Food services in Kindergartens and Schools, initiated by Member of Parliament B.Undarmaa.
• The Cabinet discussed a draft bill on Management Support to Reproduction,
and agreed to propose a few suggestions to bill initiator Member of Parliament N.Oyundari.
• The Cabinet adopted a procedure dealing with compensations of loss from confiscated properties, turning properties into state property and destruction of properties.
MONGOLIA CALLS FOR
NORTHEAST ASIAN COUNTRIES TO HOLD
Ulaanbaatar /MONTSAME/ Under the theme “25 years of CICA: For Asian Security and Development”, the second nongovernmental forum of Conference on Interaction and Conference-Building Measures in Asia (CICA) took place in Beijing, China on June 28-29. The forum was attended by over 300 delegates including CICA member states, observer states (organizations) and concerned countries in the region and discussed issues such as security situations in Asia, on how to achieve common, comprehensive, cooperative and sustainable security in Asia and jointly build the Belt and Road. Within the framework of the forum, eight roundtable panels focusing on the Asian security situation was held, such as the implementation of the United Nations 2030 Agenda for Sustainable Development, anti-terrorism cooperation, cyberspace security, addressing climate change, financial security, the role of the CICA Non-governmental Forum, and the role of the media. Also, Director of International
Relations’ Department of Mongolian Academy of Sciences PhD. J.Bayasakh
held a discussion on “Northeast Asian Security and Mongolia’s Contribution in the Region” during the roundtable panel on anti-terrorism cooperation.
“Northeast Asia’s security is still delicate. The issues are both bilateral (Japan-
Russia, Japan-China, China-Vietnam) and multilateral (China-ASEAN). And this is only Mongolia in the region which faces no challenges in terms of security. Owing to its geographical location and foreign relationship potentials, Mongolia is pursuing soft power policy in the region, and in taking advantage of its neutrality position it calls other regional countries for holding security dialogues” said PhD. J.Bayasakh during his presentation.
Overseas voter turnout 66.8 percent
Ulaanbaatar /MONTSAME/ Voter turnout in the overseas Presidential election was 66.8 percent, reported a Head Commission of the General Election Commission which was in charge of collecting the votes of Mongolian nationals living abroad.
Present at the press conference to brief journalists were D.Davaasuren, Chief of the Head commission, D.Bayanduuren, Deputy Chief and members N.Ankhbayar and L.Bazarsad.
Out of 7209 registered overseas voters for the 2017 Presidential election, 4816 partook in the election, successfully organized by 45 sub-commissions set up in 33 countries on June 10-11. Voter turnout was 44.6 percent at 2PM on Ulaanbaatar time on June 11.
In the 2013 Presidential election, out of 6233 Mongolian nationals that were registered, 4248 people voted.