Mongolia Business and Mongolian Daily Business News

Yesterday, representatives discussed about future state of the Mongolian development during the “Development Region” meeting of the Democratic union. The meeting started with the speech of MP D.Odkhuu and he reported that areas of North-West borders (Bayan Ulgi and Uvs provinces) to the South region of the country are rich of oil commodity. Uvs, Zavkhan, Khovd, Bayankhongor, Gobi-Altai, Umnugobi, Dundgobi, Dornogobi, Khentii, Sukhbaatar and Dornod provinces are included in the areas with rich resources of oil.

The next step is to manufacture products and goods out of these oil commodities in order to reduce oil and petrol importing. D.Odkhuu also made plans to build railway roads across the country to link the West and the East. This railway project will ensure faster economic growth and will open ways to export coals to South Korea and Japan. B.Ganbat, Advisor of Construction and Urban Development Minister said that this project will secure Mongolia to reach its Macro Economic targets. The cost of the Railway project is calculated to be around USD 14 billion.

During the press conference of the Mongolian Economic Forum, media representatives made few questions about forum and other related issues. Officials answered as follows:

Q: Oyu Tolgoi Investment Agreement was signed. But the feasibility study is not completed and reserve is not clearly stated?

Minister for MRE, D.Zorigt: Oyu Tolgoi reserve is approved. It was announced during the investment agreement. It is misleading information. Within 150 days or until April 6 2010, after the signature of the Investment Agreement, Feasibility Study will be discussed. If one reads the agreement, it was clearly stated.

Q: What will be your explanation on your attendance at the ceremony of marking % years of successful trading of Ivanhoe Mines at NYSE? People say it was promoting Ivanhoe Mines.

Minister for Finance S.Bayartsogt: Thanks to Oyu Tolgoi, Mongolia unlocks its development gateway. I believe that a Mongolian ringing bell at NYSE is promotion for Mongolia than Ivanhoe Mines. Over 120 million people, who are active in capital market, business and economy, are watching morning trade opening ceremony. Therefore, it was purely promotion for Mongolia. I don’t want to argue much more because many Mongolians have poor knowledge of stock market. Read the rest of this entry »

The Mongolian Economy Forum will be held on February 8 – 9 2010, organized by the National Innovation Committee. The forum will host many topics and decision makers and representatives from scholars, business community and civil society.

Prime Minister S.Batbold and Mr. Hernando De Soto, a Peruvian economist known for his work on the informal economy and on the importance of business and property rights, will deliver speech at the Forum.

The details of the Economy Forum will be revealed during the press conference, scheduled at 11 am at the Government House, Thursday, February 4 2010.

official website of the forum is www.meforum.mn

In the year 2010, total of 94.2km of roads and 100 meters of bridges will be constructed in the Capital UB. MNT 6.5 billion is budgeted into the fund of authority of roads this year. Roads near Narantuul market will be expanded, roads in 10th district, Baga toiruu, Ikh toiruu and Chingisin urgun chuluu are planned to be renewed by the budget of the Capital. MNT 4 billion distributed from the state budget will be spent on over 10 different areas in the Capital this year.

photo courtesy of gogo.mn

Prime Minister S.Batbold made press conference on “Principles of privatizing the state properties”. Prime Minister was accompanied by Mr. D.Sugar, Chairman of the State Property Committee, MSE Director R.Sodkhuu and other officials when sharing his view towards people’s savings at banks and issuing shares.

Prime Minister stated that “Government’s intention of privatization of the state property in 2010 – 2012 and the state’s support in increasing private companies’ involvement in the privatization” and informed that the plan is presented to the State Great Khural.

Priority is to raise fund for the state owned companies through listing them at the foreign capital markets based on the mineral resources and deposits in Mongolia. According to the Prime Minister, foreign mining companies, operating in Mongolia, managed to raise $15 billion at the international capital market. If the Mongolian companies start operation with its own fund, it will unlock our opportunity to become competent at the foreign markets and relieve Mongolia from short term loan with higher rate. Read the rest of this entry »

Mining is the primary industry of the Mongolian economy and lets see what is expected to accomplish in 2010.

Oyu Tolgoi project will invest in construction, worth of $758 million

John Macken, the General Director of Ivanhoe Mines, reported that it adopted construction budget of $758 million.

Work in 2010 is planned to include:

• • Resumption of the sinking of the 10-metre-diameter Shaft #2, which will be used to hoist ore to the surface from the deep, underground, copper-gold-rich Hugo Dummett Deposit.

• •Construction of a 97-metre-tall (approximately 31 storeys), reinforced-concrete headframe for Shaft #2.

• Pouring the concrete foundation for the 100,000-tonne-per-day concentrator and deliveries of building materials for the concentrator and infrastructure. Read the rest of this entry »

Monday, the finance minister S. Bayartsogt and U.S. Ambassador to Mongolia Jonathan S. Addleton signed a bilateral grant agreement worth USD 10 million. The purpose of this donation is to assist Mongolia in overcoming the negative impacts of the global financial crisis.

By the request of the government of Mongolia, the US AID secured approval from the US Congress for USD 10 million cash transfer to Mongolia’s state budget.  This support will help the government to cut its budget deficit and maintain the welfare programs that involve those who have suffered the most from the crisis. Read the rest of this entry »

Prime Minister S.Batbold presented a draft resolution on the main direction of privatizing state properties in year 2010 – 2012 to D.Demberel, the Speaker of the State Great Khural. He stated a new concept of privatization, such as increasing the involvement of people and improving the activities and governance of state owned companies. Capital market and the Stock Exchange shall develop along with it. When privatizing state properties, they will be privatized through the Stock Exchange, securing transparency of the privatization.

After receiving the draft resolution, Speaker Demberel asked few questions: Read the rest of this entry »

The year 2009 must have a hard year for the taxpayers as the tax revenues were fallen by a significant amount. In comparison to the previous year, tax revenues were decreased by 200 billion MNT. The statistics reveals that over 80 percent of the state budget is generated by the private sectors. Experts say that fall in tax revenues were caused due to connection between the private businesses and the commercial banks as most owners run their businesses through loans.

On the 30th of December 2009, the SGK approved the law on Human Development Fund, law on budget of the Human Development Fund and law on the distribution of the grants to the people. Questions were asked from the Speaker of the Parliament regarding these laws.

Q: How much money is needed from the Human Development fund for the first time around?

D.Demberel: We have population of 2.7 million and we need 150 billion MNT if population is multiplied by 70 thousand MNT. This amount will not be distributed all at once. Read the rest of this entry »