• Ts.Nanzaddorj, the new head of the State Property Committee, tells O.Khostsetseg of the tasks ahead and privatisation plans.
  • Following approval by Parliament,the new government’s manifesto for its entire term has become the formal map for the country’s direction in the coming four years. We give below an English version of the parts of it that are of interest to our specialised readership.
  • In his first interview to the media since assuming office as director of the Mineral Resource Authority -- an Implementing Agency of the Government -- G.Altansukh answers wide ranging questions from G.Iderkhangai of the Mongolian Mining Journal. 
  • Minister of Finance Ch.Ulaan announced in August that State revenue until then was MNT1.2 trillion less than what had been estimated in the budget.

    Mark the figure; it is not MNT100 billion, MNT200 billion or even MNT500 billion, but a whopping MNT1.2 trillion. The shortfall has put the Human Development Fund in a critical situation and it is not clear how State-funded construction works will continue. Just before his statement, several coal companies had put exports on hold. Overall coal and iron ore prices have dropped drastically. Exports this July were 46 per cent less than they were in July, 2011 and 69 per cent less than in June, 2012. Revenue from coal was $81 million in July, $200 million less than in the previous month. The major part of our budgeted revenue comes from copper, coal and iron ore exports, so all these figures are of serious concern.
  • We give below selected parts of the 2012-2016 Action Plan formulated by the Government and awaiting approval by Parliament.

    Every Mongolian to have a job and an income

    •    Keep inflation in single digit and the purchasing power of the MNT stable.
    •    Restrict budget deficit to no more than 2% of GDP.
    •    80% of imports by sectors other than mining will be exempt from tax.
    •    Export tax waived on all products except from mines.
    •    Construction of Ulaanbaatar-ZamiinUud road.
    •    Increase carrying capacity of ZamiinUud port to resist artificially induced inflation.
    •    Consult public opinion when passing fresh amendments to tax regulations.
  • Mongolia’s newly elected government is implementing “Resource Nationalism” to restrict foreign investments. Currently China controls 70% of Mongolia’s mining assets and politicians are looking to limit foreign control. Last month, Chalco was forced to give up the acquisition of SouthGobi. Still Chinese control is prominent. For instance, Chalco holds a 30% stake in Winsway as well as TavanTolgoi. Chalco is able to use their prominent influence to breakthrough restrictions on railway usage and other operations restrictions. Mongolian politicians must restore balance to its foreign investors and be careful not to kill off their golden goose – China. Chinese State Councilor Dai Bingguo visited Ulaanbaatar on August 24, becoming the first foreign officials to meet with the new government of Mongolia. The control of the OyuTolgoi mine and similar sites were under discussion.
  • With the election behind us, the Human Development Fund in its present form is all set to receive a make-over, and we shall have fresh discussions on new approaches to social welfare and new uses for the Fund. Work on the 2013 budget will also have to begin withoutdelay.
  • Before coming to these, let me clarify some legal regulations pertaining to the new company. The Mongolian Railway Transportation Law, passed by the State Great Khural in 2007, is the governing document of this sector, and regulates all aspects of railway transportation.
  • Prophecy Coal Corp expects to raise $800 million in debt and equity financing by September to build a coal-fired 600-megawatt power plant in Mongolia, and expects to conclude a power purchase agreement with the Mongolian government by May.The price is expected to be slightly less than what the Government currently pays for importing electricity from Russia, said Joseph Li, a director and chief operating officer of Toronto-listed Prophecy Coal.The agreement is expected to last at least 25 years.
  • Expectations of reduced energy dependence were raised when Mineral Resources and EnergyMinisterD.Zorigt declared at the Economic Forum that once “some important agreements” were out of the way, the Government wouldpay serious attention to developing the country’s shale oil resources.
Do you agree with increasing state participation in the Draft New Mining Law?
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