The mining sector - used as “scapegoat” by Mongolian politicians since time immemorial – is the only decently performing sector that brings in tax and currency revenues in the country today. However, it has never been free from vilification and vitriol.
Mongolia has taken full advantage of the well-performing global economy in the past three years. Coal and copper prices were consistently high on the global markets, expanding Mongolian exports, economy and businesses. This, however, didn’t stop populists from masterfully exploiting good foreign market conditions and hard-earned revenues by Mongolian mining companies to achieve their agenda. Specifically, the customary practice of annual public cash handouts during Parliamentary elections has been co-opted by the current authorities, yet again.
Considering the more than 800 billion MNT required for pension forgiveness initiative and the 200 billion MNT from Erdenes Tavan Tolgoi’s stock dividends, Mongolians are set to play election using over one trillion MNT worth of natural resource revenues this year. Although receiving the fair share of natural resources is technically a good thing, it’s also true that money will be replenished from our own pockets a few months later. The cash given out before the 2012 and 2016 elections plunged the MNT rate which acts as guarantee for both the economy and the public’s income. We are laying down specific statistics and evidence. In 2012, the money brought in by Erdenes Tavan Tolgoi, coupled with Erdenet’s tax advance, was given away as hundreds of billion MNT worth cash handout before the election. As a result, the currency rate fell by 6.1 percent to 1400 MNT against the USD in merely three months after the election. Likewise, in 2016, thanks to the 500 billion MNT subsidized before election, MNT rates depreciated 28.4 percent to 2489 MNT within six months after the election. Given this history, it will not require “rocket science” to predict how low currency rates would go down and how much our incomes would be cut this year, especially within six months after the election.
The global economy is bracing for the COVID-19’s impact. By the end of February, the previously calm regions including America and Europe have been shaken by the virus, while the once-devastated countries such as China is finally taking a breath of relief. Major economic drivers are in talks to allocate dozens of billion USD towards supporting their businesses in order to curb the damage from the coronavirus and prevent global crisis. In times when the entire world will inevitably slide into economic crisis if the outbreak isn’t managed, Mongolia is crafting their own DIY (do-it-yourself) crisis through populism instead of taking appropriate measures to prepare for difficult times.
Populists’ vote-poaching promise of cash bait revenue
This is an amount equivalent to five years of tax revenues collected from Erdenet Mining Corporation and Erdenes Tavan Tolgoi combined.
Taxes accumulated from Top 20 mining firms exceed MNT 2.46 trillion
While the copper concentrate firms led the Top 20 companies, half of them are coal companies.
Mongolians to benefit from natural resources for the first time
The first instance where a SOE has given out dividends to public
Coronavirus major threat to the global economy
Quarantine in major Chinese cities has forced factories to shut down. Factory owners from big names such as Apple and General Motors have no idea what to do next in this situation.
Oyu Tolgoi on the brink of a cycle
The latest news suggests that Oyu Tolgoi’s shareholder arguments are beginning to be resolved.
Mineral exploration budget declined three percent
S&P Global Market Intelligence published its World Exploration Trends report.
Asia Mining сэтгүүлд тусгагдсан үзэл бодол нь редакцийн албан ёсны байр суурь байх албагүй. Бид нийтлэгдэж буй мэдээллийг нягтлахад бүхий л хүчээ дайчлан ажилладаг хэдий ч мэдээллийн туйлын үнэн бодит байдлыг баталгаажуулахгүй болно. Тиймээс сэтгүүлд дурдагдсан мэдээлэлд үндэслэн уншигчийн зүгээс гаргах аливаа шийдвэрт Asia Mining сэтгүүл ямар нэгэн хариуцлага хүлээхгүй.
Сар тутмын Asia Mining сэтгүүлийн бүх эрх хуулиар хамгаалагдсан. Иймд сэтгүүлийн эх төдийгүй “Asia Mining Magazine” худалдааны тэмдэгтийг “Asia Mining Magazine”-ийн зөвшөөрөлгүйгээр хэсэгчлэн болон бүтнээр нь дахин хэвлэх, хайлтын системд байршуулах, цахим, механик, фото хуулбар зэрэг ямар ч хэлбэрээр хувилж олшруулах, түгээн тараахыг хатуу хориглоно.