A

Жижиг

A

Дунд

A

Том
http://zgm.mn/post/3387/

Bold: 30 percent of net profit will be distributed to shareholders as dividends

The company’s net profit reached MNT 2.6 billion in 2018 and MNT 2.9 billion in the third quarter of 2019

 0 сэтгэгдэл

A

Жижиг

A

Дунд

A

Том
http://zgm.mn/post/3387/

Tumen Shuvuut JSC, listen on the Mongolian Stock Exchange (MSE), has recently presented its quarterly financial performance. Since its establishment in 2004, Tumen Shuvuut has been con-stantly expanding its operations in egg production and poultry farm-ing. The company launched its IPO on January 16. The Official Gazette sat down with Bold.J, Executive Director of Tumen Shuvuut JSC, to discuss about the IPO and the company’s financial performance.

Shall we start from the spending of the money raised in initial public offering?

-As of today, our company has invested about MNT 13 billion of which, MNT 10 billion has been raised from the IPO. The company also spent the money, including the MNT 3 billion from accumulated net income on four major projects. 

-According to the recent announcement, Tumen Shuvuut reported a 52 percent increase in net profit. How will the company benefit from the gain?­

The economic situation of Mongolia was relatively stable in 2019, reflecting on our company’s performance. The company’s net profit reached MNT 2.6 billion in 2018 and MNT 2.9 billion in the third quarter of 2019. We are aiming to increase this amount to MNT 4 billion by the end of 2019. The net income will be spent on improving the company’s production. In the framework of the Tumen Shuvuut­2 project, we’re planning to build factories to raise broiler chickens for harvesting meat and produce organic fertilizers. Also, 30 percen of the net profit will be distributed to shareholders as dividends after paying taxes. The shareholders will finalize the date in its annual meeting after the final financial performance is released. 

-Mongolia is now providing its domestic demands and reduced its reliance on importing eggs. What kind of changes has been seen in the market?

-According to a study, Mongolians consume 300 million eggs annually. It shows about 100 egg consumption for each person. However, its lower than the world average. Mongolia imports 50 percent of its egg consumption from Russia. We are working to improve domestic production, for an egg is a food  that should be used freshly. 

-A massive waste has been made, followed by the egg factory. What are the measures that the company is taking?­

We are using chicken manure as an organic fertilizer since it has a lot of advantages. We also use egg peel for animal feed.









A

Жижиг

A

Дунд

A

Том

MRPAM revokes another 28 mining licenses in October

Economists raise concerns over a mass anti-mining act by the Government of Mongolia, saying it may carry potential risk for the foreign investment environmen

 0 сэтгэгдэл


Atotal of 28 mineral licenses were revoked in October, according to the Mineral Resources and Petroleum Authority of Mongolia (MRPAM), of which 12 licenses were expired and 16 were dismissed due to the license payment. This follows revocation of 39 licenses in the prior month. In 2019, the government is pursuing a strict policy on mineral licenses. Economists raise concerns over a mass anti-mining act by the Government of Mongolia, saying it may carry potential risk for the foreign investment environment. In August alone, 25 licenses, including Soumber Licenses of SouthGobi Resources Ltd. (SRG), have been withdrawn due to environmental destruction. Specifically, Soumber Licenses have been terminated pursuant to Clause 56.1.5 of Article 56 of the Minerals Law, Clauses 4.2.1 and 4.2.5 of Article 4 and Clause 28.1.1 of Article 28 of the General Administrative Law and a decision order of a working group established under an order of the Minister of Environment and Tourism of Mongolia. According to this decision order, the working group determined that SGS had violated its environmental reclamation obligations with respect to the Soumber Deposit. In 2017-2019, 254 lawsuits filed on revocation, extension, and exploration of license application, and cases regarding the termination of the mining license made more than half of them. As of October 2019, 63 companies have been selected, 58 exploration licenses were issued by the Mineral Resources and Petroleum Authority, and five licenses are in discussion. Also, 2020 State Budget for mineral license fees is estimated to be at MNT 36 billion.

A

Жижиг

A

Дунд

A

Том

Bilguun: Minerals royalty may burden entities

Parliament should conclude and make the environmentto pay royalty as soon as possible

 0 сэтгэгдэл

In 2018, the GDP increase of Mongolia was 7.2 percent. But it decreased by 0.9 percentage point, to 6.3 percent in 2019.

CEO of BIMG, Bilguun Ankhbayar sat down with the Official Gazette. He believes that the amendments to the Constitution of Mongolia may carry positive change in the economy and the mining sector.

-Parliament recently approved amendments to the Constitution. It enacted Article that stated, “Natural resource is the state and public property.” How will it affect the mining sector?

-I expect positive results from it. As previously stated in the Constitution, natural resources belonged to the state, and now it shall be the wealth of the public as well. I assume there is no negative consequence in it. The key changes in the Constitution have been made to stabilize the investment climate. I believe eliminating overlap of legislative and executive branches is relatively good for solid governance since foreign investors will come to a well­governed country. Thus, four members of the Cabinet are allowed to join the Parliament. It is hoped that those who are familiar with the sector will work in the government.

-Change in Minerals Royalty fee is currently in discussion. What is your view on it?


-Well, the case proves that the mining sector is not working properly. Companies pay a portion of their gains from using natural resources for Minerals fee. There is no need to address this issue of whether to pay a royalty or not. Mining companies agree to pay this fee. However, there is a disagreement over whether payments are high or low. Parliament should conclude and make the environment to pay royalty as soon as possible.

-According to the National Statistics Office, Mongolia’s GDP has increased by 6.3 percent in the third quarter. What do you think the main driver of it?


-In 2018, the GDP increase of Mongolia was 7.2 percent. But it decreased by 0.9 percentage point, to 6.3 percent in 2019. There are several factors that may have triggered it to decline. Firstly, export revenue has dropped, especially, prices of copper and coking coal have fallen due to the trade war. Secondly, FDI has declined respectively since the beginning of 2019. Finally, the inflation rate has reached 7.6 percent in the third quarter, but the Bank of Mongolia has set the target level at 8 percent. In other words, it shows the country’s lack of fulfillment on its inflation plan.

A

Жижиг

A

Дунд

A

Том

ACM annuls former PM decree on Dubai agreement

Oyu Tolgoi, a copper-gold mine in the South Gobi region of Mongolia, holds one of the largest undeveloped high-grade copper deposits in the world.

 0 сэтгэгдэл


Administrative Court of Mongolia (ACM) annulled Former Prime Minister Saikhanbileg Chimed’s order No.27, 99 and 123 on the 2015 Dubai Agreement. The document covers the costly and several times delayed underground expansion of Oyu Tolgoi (OT). Darkhan Mongol Nogoon Negdel NGO had requested ACM to invalidate Saikhanbileg’s order, considering it violated the law. The court decision confirms that the deal was signed illegally and the Dubai agreement has become invalid. However, the Government of Mongolia has the right to appeal to the ACM decision. Erdenes Oyu Tolgoi LLC, the 34 percent shareholder of OT declined to give specific information on the matter. Amongst Mongolians, the Dubai deal refers to an agreement on the pathway forward for starting development of the underground mine, which was signed by representatives of the government of Mongolia, Rio Tinto and Turquoise Hill Resources at a meeting held in Dubai in May 2015. Oyu Tolgoi was launched in 2009 after an investment agreement granted Mongolia its share and the rest to Canada’s Ivanhoe Mines, now the Rio Tinto-controlled Turquoise Hill Resources. Oyu Tolgoi, a copper-gold mine in the South Gobi region of Mongolia, approximately 550 km south of the capital Ulaanbaatar, holds one of the largest undeveloped high-grade copper deposits in the world. Between 2010 and the third quarter of 2019, OT spent over USD three billion on national procurement, of which USD 523 million was spent on procurement from Umnugovi province. The company signed MNT 2.7 billion contract to purchase 5,000 locally made standard leather safety boots from Khos Az LLC for the next three years. Following the opening of the two new factories in Manlai soum, 64 new jobs were created.







A

Жижиг

A

Дунд

A

Том

Economy grows 6.3 percent as service sector increases

Service sector accounted for 2.9 percentage points or 40 percent of the growth, while mining sector growth made about 1.5 percentage points or 24 percent of the GDP rise.

 0 сэтгэгдэл


THE MINING SECTOR GROWTH MADE ABOUT 1.5 PERCENTAGE POINTS OR 24 PERCENT OF THE GDP RISE. SERVICE SECTOR INCLUDES TRADE, TRANSPORTATION, AND COMMUNICATION SECTORS, WHICH DEPEND ON THE MINING SECTOR, SHOWING THAT MONGOLIA’S ECONOMY IS STILL ENCOURAGED BY THE GROWTH IN MINING.

As of first nine months of 2019, Mongolia’s GDP at 2010 constant price increased 6.5 percent, to MNT 13.7 trillion, according to the National Statistical Office (NSO). This was mainly due to increases in the service sector which accounted for 2.9 percentage points or 40 percent of the growth.

The mining sector growth made about 1.5 percentage points or 24 percent of the GDP rise. Service sector includes trade, transportation, and communication sectors, which depend on the mining sector, showing that Mongolia’s economy is still encouraged by the growth in mining. In terms of the largest mining companies’ performance, Erdenes Tavan Tolgoi JSC exported 12.6 million tons of coal in the first 10 months and Energy Resource LLC 4.2 million tons of coal. Coal exports have reached 32.3 million tons, a 5 percent increase from the same period of last year.Thus, 524 national companies have supplied their products and services to Oyu Tolgoi (OT) LLC during the reporting period. OT spent USD 329 million on national procurement and the construction of Shaft 2 at the Oyu Tolgoi mine has been declared complete.The World Bank highlighted in its report in October, “In Mongolia, growth momentum has continued in the first half of 2019, as GDP rose to 7.3 percent from 6.8 percent in 2018. This robust performance has largely been supported by a strong coal sector and increased private investment. However, the report cautions of the risks including political uncertainty, commodity price shocks, cross border bottlenecks, implementation delay mega projects and slower implementation of banking sector reforms.”In addition to the main economic indicators, inflation has also declined. Consumer price index (CPI) at the national level, which increased 9 percent in September, rose 7.6 percent in October. In October 2019, a 5.1 percent increase in CPI from the end of the previous year was mainly due to increases in prices for meat and meat products by 27.4 percent and clothing, cloth and footwear for each group by 5.4 percent and alcoholic beverages, tobacco group by 2.7 percent, respectively.Meat prices have risen by 30 percent year on year, but have dropped by about 4 percent in October, compared to the previous month. However, the inflation rate in Ulaanbaatar is 8.5 percent, which exceeds the Bank of Mongolia (BoM)’s target.