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http://zgm.mn/post/2478/

Mongolia’s GDP rises 8.6 percent in Q1

National currency in circulation reaches MNT 933.0 billion

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http://zgm.mn/post/2478/


In the first quarter of 2019, GDP of Mongolia at 2010 constant price reached MNT 3.5 trillion by preliminary estimation of production approach, increased by MNT 279.9 billion or 8.6 percent compared to the same period of the previous year. This increase was mainly driven by the 8 percent increase in the service sector, which is worth MNT 127.7 billion (wholesale and retail trade sector by MNT 52.2 billion or 13.9 percent) and industry, construction sector by MNT 124.9 billion or 11.2 percent.

In addition, the inflation measured by the consumer price index (CPI) at the national level increased by 1 percent from the previous month, by 2.8 percent from the end of the previous year and by 7 percent yoy.

7 percent increase of CPI was mainly contributed by increases in prices of food and non-alcoholic beverages group by 8.3 percent (meat and meat products by 20.4 percent, non-alcoholic beverages by 6.6 percent and milk, dairy products and eggs by 1.5 percent), alcoholic beverages and tobacco group by 3.6 percent, transport by 5.5 percent, housing, water, electricity and fuels group by 8.9 percent (electricity, gas and other fuels by 9.6 percent), and health by 9.5 percent.

The money supply (broad money or M2) reached MNT 19.9 trillion at the end of April 2019, showing an increase of MNT 188.7 billion from the previous month and by MNT 3.6 trillion from the same period of the previous year.

The national currency in circulation reached MNT 933 billion, increased by MNT 35.2 billion or 3.9 percent from the previous month. But the number is MNT 4.6 billion lower than the previous year.

In the first four months of 2019, the total equilibrated revenue and grants of the General Government Budget amounted to MNT 3.1 trillion and total expenditure and net lending amounted to MNT 2.8 trillion, resulting in a surplus of MNT 286.5 billion in the equilibrated balance.

In April, the equilibrated revenue and grants of the General Government Budget reached MNT 968.6 billion, an increase of MNT 259.5 billion or 36.6 percent, whereas total expenditure and net lending reached MNT 876.4 billion, and by MNT 59.6 billion or 7.3 percent from the previous month. In the first quarter of 2019, current and capital account balance deficit by preliminary result reached USD 277.4 million, which is USD 70.8 million lower compared to the same period of last year. The current account deficit reached USD 297.6 million, which was mainly due to USD 553.2 million deficit in services account and USD 196.2 million deficit in the primary account.

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Miners start the year with revenue growth

Oyu Tolgoi spent USD 296.4 million on underground development in the first quarter

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Mining projects that have a major impact on Mongolia’s economy saw splendid expansion in the first  quarter. The Top 100 Mongolian firms included Erdenet Mining Corporation (EMC), Erdenes Tavan Tolgoi (ETT) and Oyu Tolgoi (OT). These companies paid a total of MNT 2.1 trillion to the state budget last year.

Copper

Oyu Tolgoi, one of the main mining projects in Mongolia, spent USD 296.4 million on underground development in the first quarter of this year. The second shaft is still ongoing and it is expected to end in October.

Xanadu Mines, listed on the Australian Stock Exchange announced the result of additional exploration at Kharmagtai deposit. In the first quarter of this year, the capital balance of the company reached AUD 3.1 million, while post-tax losses nearly halved from the same period last year. The share price of the company reached AUD 0.08 at the Australian Stock Exchange.

Gold

Erdene Resource Development Corp. (ERD), Toronto Stock Exchange (TSX) and the Mongolian Stock Exchange (MSE) listed firm, has conducted drilling at the Khundii field and expanded the mineralization of the Bayan Khundii deposit. The company explained its plans in a report to support the feasibility study of the project. “The exploration of the project on the Midfield area found 5.9 grams of gold per tonne at a depth of 112 meters per. This affirms the high mineralization in the main part of the Bayan Khundii deposit,” said the CEO of the company Peter Akerley. The share prices of ERD at the TSX reached CAD 0.19.

Coal

SouthGobi Resources, operating at Ovoot Tolgoi mines increased its coal sales by over 80 percent to 1.1 million tons in the first quarter of the year. The average selling price of the company has decreased from USD 43 in 2018 to USD 34.9. The net profits have doubled from the previous year to USD 13.4 by reducing the cost.




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Tavan Tolgoi JSC: Coal sales totaled 1.8 million tons in 2018

The company's share price fell 36 percent to MNT 6,400 at MSE in a year

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Tavan Tolgoi JSC: Coal sales totaled 1.8 million tons in 2018 Tavan Tolgoi (TT) JSC was planning to sell 5 million tons of coal in 2018, but the amount totaled only 1.8 million tons, earning MNT 226.4 billion in sales revenue. Net profit was MNT 52.8 billion, according to its financial statement.

The company's share price fell 36 percent to MNT 6,400 at the Mongolian Stock Exchange (MSE) over the last year. The decline is mainly due to the Professional Inspection Agency's activity that caused temporary delay in share sales for over two months in connection with the mining operation of the company.

In addition, the companies that are operating at the residual deposits of Tavan Tolgoi have been facing a major problem in the customs sector last year. The Chinese side delayed the import at the Gantsmod port because of the introduction of smart systems, which resulted in the 21-day suspension of the Tavantolgoi-Gashuunsukhait road to reduce the overload at the road.

The government is working to improve the capacity of the border checkpoint

Tavan Tolgoi JSC reported in its financial statements that the road was closed for 18 days due to weather conditions. However, Erdenes Tavan Tolgoi JSC, which operates at the same deposit with TT exported 13 million tons of coal in 2018, while Energy Resources LLC's coal production reached 10.9 million tons.

The government is working to improve the capacity of the border checkpoint. Umnugovi province Governor's Office reported that the Gashuunsukhait is waiting for a transaction of CNY 140 million or MNT 50 billion in part of the Chinese grant.



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Tavantolgoi-Zuunbayan railway to commence this week

MNT 750 billion will be spent on the project

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The Government is planning to inaugurate the construction of 416.6 km railway from Tavantolgoi to Zuunbayan on May 24. The Minister of Road and Transportation Enkh-Amgalan Byambasuren announced that soldiers will help finish the task. Also, it is estimated that MNT 750 billion will be spent on the project.

The domestic transport revenue of the Tavantolgoi-Gashuunsukhait railway is about USD 8, while the transport revenue of the Tavantolgoi-Zuunbayan railway will be USD 20 (per what? Add measure). The Tavantolgoi-Zuunbayan railway line is scheduled to be completed in 2020 starting from May. A total of 3,647 people will work on the construction of the tunnel and dam, while 1,144 people will participate in building the other development works.

There are seven tasks to build a railway:

● Pre-construction work ● Laying bottom ballast 

● Top ballast

● Water supply 

● Electricity

● Connection 

● Building

“The first task, pre-construction activities will be undertaken by the Mongolian Armed Forces (MAF). Ulaanbaatar Railway will be responsible for the construction of the top ballast, the others will be done by the chosen domestic companies, and 36,000-meter cubic soil work will have completed. MAF and subcontractors will do the soil work,” the Deputy Minister of Road and Transportation.

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Erdenet Methane LLC signs Methane Investment Agreement

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Erdenes Methane LLC and Jade Methane LLC of Australia established Methane gas investment agreement to set reserves of coal seams of coal at Tavantolgoi deposit. Executive Director of Erdenes Methane LLC and Executive Director of Jade Methane LLC have signed the contract on May 17, 2019.

CEO of Jade Methane Joseph Burke said “Mongolia is close to the market of key customers in methane gas. It is seen as a major competitive advantage since the natural gas reserves are relatively close to 600km from Ulaanbaatar. China receives natural gas from other countries through its northern port. Instead of that, if they export natural gas and methane gas from Mongolia, China will have the opportunity to deliver at least cost to its core customers.”

The Board of Directors of Erdenes Mongol LLC made a decision to raise funds from the international market by exchanging exploration and feasibility studies for the Coal Seam methane gas project by foreign investors last year. According to this, Erdenes Methane announced an open tender and Australia's Jade Methane was chosen as the foreign investor to cooperate on the project.