Recent news

  • The news of how one herder was shot dead by another in Tsogttsetsii soum, Umnugovi aimag during a dispute on whose livestock had claim to a water source shocked Mongolians into the awareness that scarcity of water could make a killer of a peaceful man. This was in 2019, and in April the next year, Tsetsii Movement, This concern over scarcity of water marked the first Gobi Water – Green Development Research and Innovation Forum held in Dalanzadgad, Umnugovi aimag on September 10. As researchers and members of the aimag parliament talked at the Forum about how depletion of water resources in the Gobi has led to drying up of wells for livestock and a drop in the underground water level for human use, I found in my later interaction with ordinary people that they were glad to get a chance to articulate their concerns and suggest solutions. It is now for those who take decisions and make policy to take note of these.
  • A. Temuujin is Manager of a project unit set up last year to improve the legal environment for exploration, mining and extraction of rare earth elements and to assess their economic efficiency. In this interview he tells E.Odjargal what the unit has been doing and what we might see in the coming days.  Given the global demand for them, Mongolia can expect sizable foreign investment in its rare earth elements deposits. How can we use this opportunity?  Today, we are in the age of the fourth industrial revolution, and rare earth elements or REE are crucial to keeping our society running smoothly as they are used in many devices that people use every day such as computer hard drives, DVDs, rechargeable batteries, cell phones, catalytic converters, magnets, fluorescent lighting and also in things that will be used more and more in the coming days, such as electric car engines, solar panels, and wind turbines.
  • The refrain in the Gobi now is “Bring the water”.  So much has been said for so long about the mega project to pipe water to them from distant rivers that the people wonder how long they have to wait for the dream to come true.  With more and more mining, but not solely because of this, underground water reserves are being depleted fast, a matter of national concern but felt more acutely by the people living in the Gobi. They appreciate the importance of mining, but not if -- as experts have been warning -- the Gobi would start facing acute water shortage as early as 2025, and the situation could become catastrophic in just a few years. All Mongolians have a stake to avert such an eventuality and the demand has been growing that there should be a new national water policy that treats all water related issues on a scientific basis. In other words, there should be proper “water governance”. The term is new but the idea behind it is old.
  • The Water Authority, set up as an implementing agency in pursuance of a government decision in April 2020, is presently making an exhaustive review of the various aspects of the Khukh Mori (Blue Horse) project intended primarily to provide water to deficit regions by, one, finding new surface water sources and, two, redirecting water flows. In 2019, the then Minister of Nature, Environment and Tourism (MNET), N. Tserenbat, brought together all projects on surface water utilization under one umbrella and named it The Blue Horse Project. Some of the component projects had been under discussion for many years and several had made some progress with their feasibility studies. The Minister said the component related to the Orkhon and Ongi Rivers was to be given priority, as its impact would be felt in four aimags in the Gobi region.
  • We highlighted some important issues related to the mining industry in Mongolia: • The state budget deficit • Coal and gold export • Mineral project valuation • Rare earth elements
  • Saranchimeg Purevgerel followed up her degree in geology with an MBA in Mining, before doing an MSc in Mineral Economics at the Western Australian School of Mines. She specialises in Mineral Project Evaluation and has worked on various projects in mineral exploration, resource development and investment. Currently a director of MSA Global, she talks to Iderkhangai about the importance of following international norms in valuation of mineral resources.   Does Mongolia have a mineral project evaluation procedure that is internationally accepted? Not yet, but not because we lack the manpower or the skills. The reason these are not properly utilized is that our legal environment for undertaking such work for investment purposes is not adequately developed. Once this changes, our mining professionals will certainly be able to do all that is done in developed countries to support investment decisions and to be acceptable at the time of initial public offerings (IPOs). 
  • Extraction at the Oyu Tolgoi underground mine, shown as Hugo North in maps, is likely to start in 2023 but will end sooner than expected. This is because the updated Feasibility Study recently prepared by Turquoise Hill Resources puts the extractable ore reserve there – from which will finally come the copper, gold, and silver -- at 400 million tonnes, which is 47 million tonnes or 11 percent less than earlier estimated.  According to the Oyu Tolgoi 2020 feasibility study, the lower ore reserve would mean 1.3 million tonnes less copper, 1 million ounces less gold, and 8.1 million ounces less of silver. The total value of the “lost” reserves would be roughly $10 billion. This is almost the same as the Oyu Tolgoi project’s entire cost.  OT says the ore has to be left as it is in the interests of mine safety and long-term sustainable operation.
  • With Parliament approving amendments to this year’s budget on August 28, the four months remaining of the year would be given to arresting, if not undoing, the damage the pandemic has been causing to the economy. Revenue is already MNT1.2 trillion less than expected and the budget deficit up to the end of June stood at MNT2.1 trillion, which had been estimated as the figure for the whole year. However, not all is lost. Rising mineral prices hold out hope that recovery is possible sooner than it seemed possible at one stage.  With an estimated revenue of MNT9.7309 trillion and projected expenses of MNT14.5775 trillion -- 25.2 percent and 37.7 percent respectively of GDP -- the revised budget shows a deficit of MNT4.8466 trillion or 12.5 percent of GDP, instead of the 5.1 percent in the original. This is obviously very high, and several drastic measures would be taken to see that revenue reaches the required level.
  • Erdmin LLC, recipient of The Mongolian Mining Journal Best Technology Award in 2013, was a pioneer in adapting the prevalent cathode copper production technology to Mongolian climatic conditions. An Honoured Industrial Worker of Mongolia, Dr. J. Damdinjav played a very large role in setting up Erdmin, where he was Executive Director and Director General. Currently a consultant to the company, he traces the history of Erdmin in this conversation with G.Iderkhangai and talks about old times with nostalgia.      Did you start your working life at Erdenet Mining?  My father crafted nice items from copper and silver and out of admiration for his work, quite early in life I decided to be a metallurgist though in those days I understood the profession as that a gold refiner. When I finished school I was lucky enough to be among those chosen to study non-ferrous metallurgy in the Soviet Union.  
  • Sandvik Mining and Rock Technology will host the first Innovation in Mining Virtual Event, 29–30 September 2020, where they will showcase an exceptional lineup of new equipment and solutions, as well as the latest technologies for digitalization, automation and electrification for the mining industry. The Innovation in Mining Virtual Event is a global event for miners who face the challenges that come with leading mining operations in the modern environment. The event will provide mining professionals the opportunity to learn about Sandvik’s most innovative solutions for the mining industry and learn how those solutions can deliver value to their operations. Sandvik will showcase a lineup of innovative solutions for all of their product offerings including rock drilling, rock cutting, crushing and screening, loading and hauling, electrification, and automation.
  • Turquoise Hill Resources has announced increased 2021 gold production outlook, and filed an updated technical report for the Oyu Tolgoi Project (OTTR). Gold production outlook for 2021 has increased to a range of 500,000 ounces– 550,000 ounces from 450,000 ounces – 500,000 ounces, the result of initiatives that have brought the higher grade gold bearing ore from the South West pit forward into 2020 and 2021.
  • The first major mining-related headline since the ruling party’s return to power came on June 28 when Rio Tinto announced that the Government, Rio Tinto and Turquoise Hill Resources had reached an agreement on the preferred domestic power solution for Oyu Tolgoi that clears the way for the Government to fund and construct a power plant at Tavan Tolgoi. This renders infructuous the TTPP Power Source Framework Agreement signed in 2018. The parties have also agreed to conclude a power purchase agreement by next March. Construction will begin by July 1, but the target date for the commissioning of the plant has been pushed back a year to 2025, with no explanation for the delay.
  • The rise in the stock price of mining companies working in Mongolia and registered abroad -- such as Xanadu Mines, Mongolia Energy Corporation (MoEnCo), Mongolian Mining Corporation (Energy Resources) and others -- is a welcome indication that foreign investors expect stability here following the MPP’s return to power after a landslide victory in last month’s election. The highest growth the Hong Kong Stock Exchange was recorded by MoEnCo, and though the others did not match its 400-percent rise on a single day, shares of Energy Resources and SouthGobi Resources (SouthGobi Sands) also have risen by between 32% and 45%. It is now up to the new Government to make sure that investors’ confidence is not misplaced. 
  • Banking reforms would have to wait. The Spring session of the present Parliament, its last before members to its successor are elected, ended without completing discussions on them, presented as part of an economic package. Members of the Government were keen to make some progress on the reforms, and so was the IMF as part of its Extended Fund Facility package, but time was against them.  The ante was being upped even before the session began, with Prime Minister U. Khurelsukh saying on 27 March that the time was ripe to change the way the country’s commercial banks worked, warning that “if banks don’t accept our suggestion to reduce their lending rates, we shall have to take stern measures to see that this is done.”  Finance Minister Ch. Khurelbaatar followed this up on 14 April, when he said in Parliament that after two years of calling for banking sector reforms and asking for Parliament’s permission to let foreign banks work in
  • What with the pandemic and the excitement over the election, an important decision taken by the last Parliament just before its final session ended did not receive adequate attention. Following a Constitutional Court decision that Resolution #64 adopted by Parliament in 2014 had violated the Constitution it was resolved that the 267-km Tavantolgoi-Gashuunsukhait (TT-GS) railroad would have a broad gauge, thus closing a debate that had been going  on for years.  
  • The eighth parliamentary election was held successfully on June 24 and what the 73.64 percent of the total electorate voted for is now known. This was the first election since major amendments were made to the Constitution, though this might not have had any direct bearing on the voters’ choice. At 606, the number of candidates was the most ever, though almost nobody from outside the two major parties won. Some candidates were arrested on charges not directly related to the election. The new Parliament has 76 members, as before. Of them, 62 are from the MPP -- three less than in the last parliament, but still giving the ruling party an overwhelming numerical strength -- 11 from the DP, one each from the Right People Electorate Coalition and Our Coalition, and one independent.
  • What has so far been the impact of the COVID-19 situation on the banking and financial sectors? What future risks do you see?  The quarantine imposed by the Government has been good for preventing the virus from spreading but it has also reduced mining output and thus led to lower exports. Trade, travel, transportation and almost all other sectors have been hobbled, and this has in turn caused uncertainty in the banking sector. According to the Bank of Mongolia, repayment of 54,000 loans worth MNT3.5 trillion has been stalled. Banks make up about 90 percent of the financial market in Mongolia, and if this unavoidable failure in repayment of loans continues, banks will have their profitability reduced and assets depleted, forcing them to dip into their reserves. Since almost everybody’s income has been affected, people have no disposable funds and so banks are getting far less deposits. They will issue fewer new loans.
  • Erdenes Tavantolgoi Mining (ETM) was formed with the status of a daughter company of the state-owned Erdenes Tavantolgoi JSC with the specific purpose of facilitating the long-talked-about IPO. Kh.Narankhuu, Director General of Erdenet Mining  Corporation from 2000 to 2007 and a former Member of Parliament, was brought in as CEO to oversee the complex and multi-faceted work of preparing documents and material required by the stock exchange and also to woo investors. Now that the IPO has been put on hold and ETM itself is being wound up, Narankhuu opens up to G. Iderkhangai on what the past months were like. Given his status in the mining sector, his views command special respect and he does not disappoint in this long-ranging conversation.  
  • You are right. When the state budget was discussed at the end of last year, there was much to be optimistic about. The aimags in the Gobi were allocated substantially higher budgets than those that had lower incomes. The budget revenue was calculated differently, with tax revenues included. As part of the reform of taxation laws, the social insurance fee had been increased, but the budget revenue figures show that receipts from this would be 42 percent less.  Things were expected to be quiet until after the end of the parliamentary election, for foreign – and domestic -- investors would decide on their plans only after knowing what the next government looked like.  Commodity prices were high, and we all hoped for a quick end to the China-US trade war. All this has now changed. 
  • One after another, mining companies around the world -- big or small – have been announcing since mid-March temporary suspension of their operations or, in some cases, reduction of production. The decisions were taken as governments worldwide imposed total or partial lockdown of their national economy in an attempt to contain the spread of COVID-19. Almost everywhere all non-essential activities were suspended. Mining provides many essential items of daily use, but it was defined as non-essential in countries such as Mexico and Peru, though Australia, Argentina, Brazil and Chile were among those which did not follow suit. Jurisdictions like Quebec shut down mining as a non-essential activity but made a volte face only weeks later. 
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LATEST

  • Уржигдар 11 цаг 29 минутад
    The news of how one herder was shot dead by another in Tsogttsetsii soum, Umnugovi aimag during a dispute on whose livestock had claim to a water source shocked Mongolians into the awareness that scarcity of water could make a killer of a peaceful man. This was in 2019, and in April the next year, Tsetsii Movement, This concern over scarcity of water marked the first Gobi Water – Green Development Research and Innovation Forum held in Dalanzadgad, Umnugovi aimag on September 10. As researchers and members of the aimag parliament talked at the Forum about how depletion of water resources in the Gobi has led to drying up of wells for livestock and a drop in the underground water level for human use, I found in my later interaction with ordinary people that they were glad to get a chance to articulate their concerns and suggest solutions. It is now for those who take decisions and make policy to take note of these.
  • 2020-10-16 16:09
    A. Temuujin is Manager of a project unit set up last year to improve the legal environment for exploration, mining and extraction of rare earth elements and to assess their economic efficiency. In this interview he tells E.Odjargal what the unit has been doing and what we might see in the coming days.  Given the global demand for them, Mongolia can expect sizable foreign investment in its rare earth elements deposits. How can we use this opportunity?  Today, we are in the age of the fourth industrial revolution, and rare earth elements or REE are crucial to keeping our society running smoothly as they are used in many devices that people use every day such as computer hard drives, DVDs, rechargeable batteries, cell phones, catalytic converters, magnets, fluorescent lighting and also in things that will be used more and more in the coming days, such as electric car engines, solar panels, and wind turbines.
  • 2020-10-14 10:59
    The refrain in the Gobi now is “Bring the water”.  So much has been said for so long about the mega project to pipe water to them from distant rivers that the people wonder how long they have to wait for the dream to come true.  With more and more mining, but not solely because of this, underground water reserves are being depleted fast, a matter of national concern but felt more acutely by the people living in the Gobi. They appreciate the importance of mining, but not if -- as experts have been warning -- the Gobi would start facing acute water shortage as early as 2025, and the situation could become catastrophic in just a few years. All Mongolians have a stake to avert such an eventuality and the demand has been growing that there should be a new national water policy that treats all water related issues on a scientific basis. In other words, there should be proper “water governance”. The term is new but the idea behind it is old.
  • 2020-10-07 11:08
    The Water Authority, set up as an implementing agency in pursuance of a government decision in April 2020, is presently making an exhaustive review of the various aspects of the Khukh Mori (Blue Horse) project intended primarily to provide water to deficit regions by, one, finding new surface water sources and, two, redirecting water flows. In 2019, the then Minister of Nature, Environment and Tourism (MNET), N. Tserenbat, brought together all projects on surface water utilization under one umbrella and named it The Blue Horse Project. Some of the component projects had been under discussion for many years and several had made some progress with their feasibility studies. The Minister said the component related to the Orkhon and Ongi Rivers was to be given priority, as its impact would be felt in four aimags in the Gobi region.
  • 2020-10-06 15:17
    We highlighted some important issues related to the mining industry in Mongolia: • The state budget deficit • Coal and gold export • Mineral project valuation • Rare earth elements
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