Mining The Resources
Minding the future
Эрдсийг эрдэнэст
Ирээдүйг өндөр хөгжилд
Market
Uncertain future oil  prospects due to the Russia-Ukraine War  The energy sector seems to be the “winner” in the war between Russia and Ukraine. In any case, oil and natural gas producers proudly report record profits for their investors.
Crypto-Coins and monetary policy There are two ways to get people to act on their own. The first is to encourage or promise them a reward for taking a certain step. The second is to control or punish them based on fear. Crypto-coin investors are affected in both ways. First, there is the naive expectation that the coins they buy will grow and generate huge profits. Some may have even planned an expensive vacation to the tropics. Second, is the fear of being left empty-handed when everyone says you can buy and sell coins and make lots of dollars.
China’s ban on Australian coal:  Russia edging out Mongolia  to fill market vacuum While China barred the import of Australian coking coal, an interesting competition was on to fill the large space thus left vacant in the Chinese market, the world’s largest. Data from December, 2020 show China imported no coking coal at all from Australia, 1.5 million tonnes from Mongolia, and 1.1 million tonnes from Russia, some 700,000 tonnes more than the monthly average. A China-based coal news agency, Today Think Thank, has wondered if Australian coal entered China through a third country. Even with the year-end ban, figures for 2020 as a whole show that Australia was the major coking coal exporter to China, accounting for 35.5 million tonnes or more than half of China’s total import of this major component of steel manufacture.  The ban is unlikely to be lifted in the first quarter of the year, though in January China did allow some ships carrying Australian coking coal that were stuck in ports to unload their cargo.    
Will 2021 be the year of copper? Last year was not good for Mongolian coal, with exports earning almost $1 billion less than in 2019. This year, too, exports are not expected to top the 28.6 million tonnes in 2020, which was the lowest since 2017, when the figure stood at 33.4 million tonnes. According to the National Statistics Office, the total revenue from mineral exports in 2020 was $5.26 billion, down 17.6 percent from the previous year, mainly because of the decline in coal exports. The loss to the country would have been greater if gold had not come to the rescue. The more than 30 tonnes sold by The Bank of Mongolia earned around $1.8 billion, offsetting the loss from coal`s underperformance. However, gold is unlikely to repeat its feat in 2021. In any case, of the 30 tonnes exported last year, only 23.6 tonnes had been bought by the central bank during the year, the rest comong from its reserves.
Foreign trade shows $2.28-billion surplus in 2020 Mongolia’s foreign trade turnover for the full year in 2020 reached $12.9 billion, 6.4% or $876.9 million less YoY. Exports accounted for $7.6 billion, down 0.6% YoY, and imports fell 13.6% YoY to $5.3 billion. The foreign trade balance shows a $2.28-billion surplus. In terms of mineral exports, 28.6 million tonnes of coal were exported, 7.9 million tonnes or 21.6%  less YoY. Revenue from this fell 30.9% to $2.12 billion. The figures for December show that 1.6 million tonnes were exported, 5.6% less YoY and 49.3% less than in November. Gold was the second largest earner among minerals exported, with 30.5 tonnes exported for $1.79 billion, showing a YoY increase of 236% in volume and 327% in value. Exports in December stood at 2.8 tonnes and earnings at $163 million.
Coal export limping back, but “normal” is far off Note: All figures in this report are from data released by the National Statistics Office and cover the period 1 January to 15 April. Mongolia’s total foreign trade turnover reached $2.54 billion, a drop of 30.9% YoY.  Exports accounted for $1.18 billion of this and imports for $1.36 billion, down 43.7% and 13.7% respectively. The foreign trade deficit of $175.9 million was mainly because of the dramatic decline in mineral exports. The last days of the period under review showed some improvement in coal and oil exports, but this is only when they are seen against the situation in most of March, when exports were almost stopped. Any return to the pre-pandemic levels is still a long way off. 
Shares are of real value only when they can be traded The Mongolian People’s Party promised in 2016 that the 1072 shares of Erdenes Tavan Tolgoi held by every citizen would be “made alive and valuable”. The announcement by the company in February that it would distribute dividends before the parliamentary election was welcomed by shareholders -- most of whom would also vote in the election -- as a step in that direction, but for the MPP promise to be truly fulfilled, it is not enough to pay dividends. To be “alive”, the shares must be free to be traded in the stock exchange. Only then would citizens know that they own something “valuable”.  The “small” Tavantolgoi, a company treated as A-Grade by the Mongolian Stock Exchange, earned a net profit of MNT52 billion in 2018 when it sold 1.8 million tonnes of coal.
Mining sector to benefit from campaign to make meat products more hygienic In recent years, demand for meat products has risen sharply because of the rapid development of the mining sector, which now accounts for 90% of Mongolia’s gross industrial product, and employs 60,000 people.
Coking coal prices to keep low in the long term The US-China “trade war” has hurt Mongolia, too, in that our southern neighbour’s demand for coking coal has fallen. However, many analysts feel China will not have to reduce its steel output drastically, and based on that optimism, the market has been showing some positive signs, though this maybe more short-term than is good for Mongolian exports.
Foreign trade turnover up in H1, surplus down Foreign trade turnover reached $6.3 billion at the half-year mark, according to the National Statistics Office, with exports of $3.6 billion and imports of $2.7 billion. The three figures show a 26%, 15.3% and 43.4% YoY increase respectively. Foreign trade surplus fell 30.4% YoY to stand at $822.2 million.
Coal export rises in March after big dip The 7.9 million tonnes of coal exported in the first quarter was 2.62% less than in the corresponding period last year, but things have begun to look up as exports for March, the last month in that quarter, showed an increase of 7.8% YoY.
Big fall in trade surplus, coal main culprit According to data revealed by the National Statistics Office, Mongolia’s exports in the first two months of 2018 were valued at $838.4 million, while imports stood at $726 million, taking total trade turnover to $1.6 billion, which is 18.9% or $248.1 million more than the corresponding figure in the previous year.
Shanxi likely to buy more Mongolian coking coal Shanxi province in Central China has 55 percent of the total coking coal reserves in the country and produces 40.74 percent of the country’s coking coal -- the raw material to produce coke – but even then it now looks set to become a major purchaser of Mongolian coking coal, as Shanxi’s coking industry is being expanded in a big way.
The Outlook for Coal As noted by the International Energy Agency (IEA) coal supplies a third of all energy used worldwide and makes up 40% of electricity generation, as well as playing a crucial role in industries such as iron and steel. Coal is also very important for Mongolia, as it is one of Mongolia’s major exports.
Coal claims 40% share in total exports, trade turnover rises 34% The National Statistical Office reports that foreign trade turnover at the end of July reached $5.9 billion, showing an YoY increase of 33.9% or $1.5 billion. In the same period, exports increased by 38.5% or $979 million to stand at $3.5 billion, while imports rose by 27.5% or $504 million and reached $2.3 billion. The foreign trade balance grew 67% YoY, and showed a surplus of $1.2 billion.
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.
Welcome ‘Standby’ In 2010-2011, Mongolian economy had been hungry for investment. At that time we were excited about mega projects like Tavantolgoi, railway project, Sainshand industrial complex, all together were estimated for MNT17 trillion and we were hoping to raise money by issuing international bond and get loan as fast as we could.
Mongolia to send coal through N. Korean port in trial export Mongolia will ship 25,000 tons of coal to North Korea’s Rajin port this year as part of a trial project, the chairman of the Mongolian Railroad Authority has said.
Russia to start work on Pacific coal export port this year Russia, with plans to quadruple its coal output levels by 2030, will begin building a new coal export terminal on its Pacific coast to increase its exports to Asia Pacific nations.
More Chinese iron ore mines seen shutting in 2015 About a third of China’s iron ore mines have halted production and this could rise as high as 45 per cent by the end of the year if the price of the steelmaking raw material stays below $70 a tonne.
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