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http://zgm.mn/post/4601/

One thirds of entities cut jobs as pandemic hits economy

One thirds of entities cut jobs as pandemic hits economy
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http://zgm.mn/post/4601/
  • More than 20,000 companies are on the brink of collapse
  • 30 percent of the companies had decreased their operational costs
  • By the result of Labour force survey of the first quarter of 2020, unemployment rate of Mongolia reached 8.1 percent

According to a survey conducted by the Mongolian National Chamber of Commerce and Industry (MNCCI), over 33 percent of enterprises cut jobs amid the COVID-19 outbreak and the restriction to prevent its infection. If the Government can not take appropriate measures immediately, roughly 260,000 people will their jobs and more than 20,000 companies are on the brink of collapse. The survey included over 1,500 entities; of these, 65 percent of them had a decrease in revenue, 42 percent could not continue normal activity, and 30 percent of the companies had decreased their operational costs. By the result of Labour force survey of the first quarter of 2020, unemployment rate of Mongolia reached 8.1 percent. At the end of February, the number of registered job seekers reached 35.6 thousand, of which, 20,600 (57.9 percent) were registered as unemployed and the remaining 15,000 (42.1 percent) were employed but looking for a new job. Moreover, budget deficit remained high during the time in which, the country faces major challenges. Some economists are not satisfied with the Governments measures, saying that the lack of effectiveness may lead to economic crisis in the long term. About 60 percent of the entities that have involved in the survey said, “financial support is essential to save jobs”, while the other 50 percent agreed that delaying the due of social insurance fee is important. 

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CGA: Coal export fell by 59.8 percent in Q1

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  • Mongolia exported 306,600 tons of copper concentrate as of March
  • Mongolia exported 2.05 million tons of iron ore in the first quarter, down 0.7 percent from a year earlier

In the first quarter, Mongolia exported 3.1 million tons of coal, a decrease of 59.8 percent compared to the same period of 2019. It lowered by 39 percent to USD 250.6 million in sales revenue. Currently, coal exports are recovering and coal is being exported through Gashuunsukhait, Shiveekhuren, Zamiin-Uud, and Khangii ports. However, the volume of coal export is less than usual. As of March, the country exported 306,600 tons of copper concentrate, decreased by 15.2 percent year on year. In terms of sales revenue, it dropped by 68 percent to USD 351.2 million. Although copper exports have not been disrupted due to the new restrictions followed by the coronavirus, declining copper prices at the global market have had a direct impact on Mongolia’s exports. During the reporting period, oil exports totaled 322,300 barrels, reaching USD 17.7 million, which is 80 percent less than the previous year. Oil exports are scheduled to begin on April 4, according to the Mineral Resources and Petroleum Authority of Mongolia (MRPAM). However, it plans to export about 20 cars of oil a day. In terms of its share in total exports, coal has decreased to 22 percent this year. Copper concentrate rose from 28 percent of total exports to 30.8 percent this year. As for other mineral products, exports of zinc concentrate fell by 16 percent to 36,900 tons in the first quarter. In total sales revenue, it decreased by 23 percent to USD 48.3 million. Tsairt Mineral LLC, one of the main exporters, was not affected by the new coronavirus infection, but the company said zinc prices were worse than expected this year. Mongolia exported 2.05 million tons of iron ore in the first quarter, down 0.7 percent from a year earlier. In terms of total sales revenue, it increased by 32 percent to USD 140.7 million. Iron ore prices are relatively favorable compared to the same period last year. 

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Xanadu Mines: Exploration at the Kharmagtai deposit was suspended in February

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On Tuesday, Xanadu Mines Ltd., copper and gold exploration company with several advanced exploration projects in Mongolia’s highly mineralised and vastly underexplored south Gobi region, made a statement related to the COVID-19 impact on its operation. The company’s main project, diamond drilling at the Kharmagtai deposit in Umnugovi province, temporarily halted in February. “We have not seen a significant impact on our business to date. However, although there are currently no restrictions on transportation locally, any further deterioration of the situation may result in quarantines and affect Xanadu’s ability to undertake exploration activities in the South Gobi,” the company said in a report. “It is not possible to estimate the impact of the outbreak’s near-term and longer effects or Governments’ varying efforts to combat the out-break and support businesses. This being the case, we do not consider it practicable to provide a quantitative or qualitative estimate of the potential impact of this outbreak on the Group at this time.” Subsequent to end of the financial year, the COVID-19 outbreak was declared a pandemic by the World Health Organization in March 2020. In March 2020, Mongolia reported its first transported case of COVID-19. As a response, the country closed its borders and halted all international flights. As of today, Mongolia had reported 14 cases of COVID-19. Xanadu also revised its 2020 action plan and canceled or postponed activities it considered unimportant. In 2020, the company aims to cut management spending by AUD 1.3 million, or 35 percent, from 2019. On March 24, 2020, the company announced that it entered into an earn-in agreement with Japan Oil, Gas and Metals National Corporation (JOGMEC) to sole fund up to USD 7.2 million in exploration expenditure at the Company’s Red Mountain copper-gold Project in Mongolia.

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Two more imported cases of COVID-19 registered

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The Ministry of Health and the National Center for Communicable Diseases on Wednesday reported that two more imported cases of COVID-19 have been detected in Mongolia. On March 28, the Republic of Korea sent a charter flight to repatriate its citizens in Mongolia and three family members of the staff of the Turkish Embassy in Mongolia arrived by the flight to Ulaanbaatar. “On March 28, three family members of the staff of the Turkish Embassy arrived by a flight of South Korea, but the two of them have been confirmed with COVID-19. Just after landing, they were immediately isolated and tested three days later. 10 people who had close contact with them as well as the others who served them have been also isolated for medical supervision and tests,” said General Director of the National Center for Communicable Diseases. 

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Gold purchase rises fourfold in Q1

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  • 3.6 tons of precious metals is gold and 1.7 tons is silver
  • As of february, foreign exchange reserves amounted to USD 4.3 billion. This is an increase of 0.22 percent from the previous month and 21 percent from the same period of the previous year 

In the first three months of this year, the central bank purchased 5.3 tons of precious metals, increasing fourfold from 1.2 tons in the same period last year. 3.6 tons of precious metals are gold and 1.7 tons is white silver. The dramatic decline in gold purchases in the first quarter of 2019 was mainly due to the uncertainty of the legal environment in royalties. It may have resulted in this year’s rise as well, according to the officials. In the first months of 2020, increase gold prices dominated. For example, in March, the average purchase price of gold was MNT 141,500 per ounce, which is about 30 percent higher than the same period of the previous year. In addition, the closure of passenger traffic may have restricted the smuggling of gold. Purchasing gold is one of the key instruments for the Mongolian central bank to increase its official foreign exchange reserves. As of February, foreign exchange reserves amounted to USD 4.3 billion. This is an increase of 0.22 percent from the previous month and 21 percent from the same period of the previous year. The central bank aims to increase the reserves to at least USD 6.5 billion in the medium term.