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http://zgm.mn/post/2119/

Mongolian Copper Corporation LLC proposes to negotiate with Gov't

MCC expresses willingness to settle EMC's 49 percent stake issue

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http://zgm.mn/post/2119/


Purevtuvshin Tsooj, the CEO of the Mongolian Copper Corporation (MCC) LLC, and Munkhbaatar Myagmar, the Chairman of the company, have offered to negotiate with the Mongolian Government regarding the 49 percent stake in the Erdenet Mining Corporation (EMC).

Mr. Munkhbaatar said, “MCC has submitted a request to Prime Minister Khurelsukh Ukhnaa. The obligation to conclude a deal with our company was provided to the Cabinet by a Parliamentary resolution in 2017. The court had adjourned to restore our company’s ownership of 49 percent stake in the EMC due to the fact that the sides did not settle on a deal. In connection with recent events, we are requesting again to negotiate. Previously, our request was submitted several times to the Prime Minister and other related authorities. The Parliament has approved the Resolution No.23 to instruct the Cabinet to hold negotiations with our company. A deal is a document signed by both parties. However, we have not done that.”

“Investigation on the 49 percent shares of EMC has been going on for over a year. I have given over 10 testimonies to both the Criminal Police and the Independent Authority Against Corruption. We see the Government's actions as a social demand. We are still willing to settle the issue. Our position remains unchanged and to confirm it, we are submitting the request to the PM,” noted Mr. Purevtuvshin.

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Government bond trades at securities market slump

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- The Ministry of Finance plans to sell government bonds at the MSE based on blockchain technology. 

Mongolian government bonds worth MNT 8 billion were sold at the secondary market in the first 10 months of this year. This is only a quarter of the previous year’s trade volume.This is the third consecutive decline of Government bond trade on the domestic market following the Ministry of Finance (MoF)’s decision to halt primary market trade of the product in October 2017. However, the Ministry of Finance plans to sell government bonds at the MSE based blockchain technology. The preparation work had started in 2018. In other words, government bonds will be more accessible to citizens and investors by combining traditional and advanced methods in the coming year. Mongolia’s domestic enterprise ICT Group LLC created the blockchain platform to trade bonds. “Citizens were used to go to the banks only to buy government bonds. But they will be able to trade online by mobile phones,” says the executive director of the company. The government bonds are not simply a source of budget revenue. It is a tool to regulate fiscal policy and stabilize the national currency. Therefore, completely halting the government bond had significant negative consequences. The Ministry of Finance has explained that the 2017 decision to stop trade of the bonds was to avoid increasing government cuts in the domestic market and to prevent the government from capturing the assets of the banks.



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Toxic air pollutants rise amid lack of snow

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  • Concentration of major air pollutants rise despite anti pollution measures
  • Mongolia started to calculate its air quality index based on the human health impact

As of October, air pollutants, namely sulfur dioxide (SO2), nitrogen dioxide (NO2), carbon monoxide (CO), and PM10 have increased significantly compared to the previous year, according to Agaar.mn. Officials believe that toxic pollutants in the air rose mainly due to the dryness, wind speed, and lack of snowfall in Ulaanbaatar. “Sulfur dioxide is present in motor vehicle emissions, as the result of fuel combustion. In the past, motor vehicle exhaust was important, but not the main source of accumulation sulfur dioxide in the air. The reason why its concentrations in the air became relatively higher may be weather conditions. For example, Ulaanbaatar was snowy a year ago, unlike today’s dry weather. It might be the key factor for air quality to reduce,” said a specialist at the National Agency for Meteorology and Environment Monitoring (NAMEM). Sulfur dioxide affects human health when inhaled. Those most at risk of developing problems if they are exposed to sulfur dioxide are people with asthma or similar conditions. In May 2019, burning raw coal in Ulaanbaatar was forbidden. Accordingly, the government coordinated the manufacture and supply of enhanced coal briquettes, which is assumed to reduce air pollution in Ulaanbaatar by 40­50 percent. The fuel replacement was followed by the Ministry of Environment and Tourism’s decision in October 2018 to change how the air quality index (AQI) is calculated. Instead of the previously used one hour average of air pollution being reported, a three­hour moving average is used to calculate AQI. A spokesperson told, “The air quality index aims to provide people with air quality news as fast as possible. Most countries’ air quality index measures include the US Environmental Protection Agency (EPA) and WHO's air pollution indicators. In 2018, Mongolia started to calculate its air quality index considering the impact on human health”.
However, some analysts are against this change. Robert Ritz, Data Scientist and Director of LETU Mongolia, criticized the rule change saying that it smoothes out peaks and troughs, and can easily make it appear that air pollution is reducing. According to a recent report released by the United Nations Development Program (UNDP), Mongolia’s economic costs associated with air pollution were estimated at USD 645 million or MNT 1.6 trillion annually.

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Mongolia and Kazakstan to boost cooperation

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The visit took place 25 years after a treaty on friendly relations and cooperation

Prime Minister of Mongolia Khurelsukh Ukhnaa, who was on an official visit to the Republic of Kazakhstan, held official talks with his Kazakh counterpart Askar Mamin. The two sides agreed on the importance of stimulating cooperation activities to bring bilateral ties between Mongolia and Kazakhstan to a new level. The visit took place 25 years after a treaty on friendly relations and cooperation agreement was signed in 1993.

Relationships between Mongolia and Kazakhstan have been improving stably since diplomatic relations were established in 1992 and a treaty on friendly relations and cooperation agreement was signed in 1993. “These partnership concepts will be strengthened and broadened with new contents of trade, economy, and investment based on the current firm political foundations,” said Prime Minister Khurelsukh.

He also offered to appoint working groups and formulate roadmap and noted that there is a possibility to increase the trade turnover from USD 35 million to USD 130 million to be comprised of more than 70 types of products. The Kazakh side pledged their support for a plan of Mongolian airlines to open flights between Ulaanbaatar and Almaty.

Mongolian Prime Minister Khurelsukh delivered a speech at the Mongolia Kazakhstan Business Forum along with his counterpart Askar Mamin.

During the forum, business entrepreneurs from the two countries have signed several agreements, including constructing gold and precious metal refinery and preparing air freight engineers and technical service specialists.

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Zoljargal: Government’s decision threatens investment

Systematic changes by government risk politicizing the professional field of mining

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Batsaikhan.S /ZGM

Mongolia’s leading economists have expressed their views at a forum on business environment of Mongolia late last week. The Official Gazette sat down with Zoljargal Jargalsaikhan, Executive Director of the Mongolian Coal Association on the occasion. He addressed that the negative outcomes of the unstable policy will burden professional organizations.

-How will the government’s decision to revoke a number of mineral licenses affect the economy?

-It will not affect the mining sector in the short term. Mongolia’s coal companies have enough capacity to produce a sufficient amount of coal but the production is only limited by China’s import. Mongolia’s income from coal will not be affected significantly. But these systematic changes risk politicizing the professional field of mining and may undermine the efforts made by the private sector in the last 30-40 years. This may lead to lack of foreign direct investment in the private sector in 5-10 years. In other words, the government alone will be able to control FDIs. Current licensing issues of private entities will become a serious social problem in the future.

-Enterprises whose rights have been violated have been criticized that they couldn't unite to reach their voice. For example, does the Mongolian Coal Association protect the interest of the companies in the sector?

-Mongolian Coal Association is a professional organization that represents companies in the sector. We submitted our proposal on the government’s revocation of licenses to the relevant authorities. Also, we are working to have relevant regulations amended, and to open up new opportunities to carry out our business operations.

-Could you please mention an example of the inapplicable rules?

-Of course. Recently, numerous licenses have been canceled due to environmental destruction in Umnugobi province. However, some companies amongst them had not started their operation. The government’s decision must be followed by the procedure. Inspection agencies should review and the decision shall base on it. Otherwise, investors will not be interested in Mongolia, since legal stability is crucial amidst every other aspect.