Mongolia’s export coal mines are now entering their third month of standby. By the first four months of this year, Mongolia exported merely 4.1 million tons of coal marking a record low in the past ten years. The last time coal export experienced such low numbers was when Erdenes Tavan Tolgoi JSC had just been established. Even during the steep decline in prices in 2014-2015, the situation was significantly better than today. In short, Mongolia’s export coal sector is sinking into a deep crisis.
The export coal sector becomes the starting point for the economy’s large chain network of foreign exchange reserves, budget revenues, employment, and procurement. Tax revenues from coal have already been disrupted by the hundreds of billions of tugrugs, rendering it impossible to pay 1.5 trillion MNT in taxes this year. Also, the 3 billion USD revenue from coal exports is expected to be disrupted by at least one billion USD.
The first blow from this disruption is felt by the foreign exchange reserves and the tugrug rates. Despite making a 1.1 billion USD intervention in the first quarter, USD strengthened by almost 2 percent. There’s no doubt we will see a free flight in USD rates after the election, despite putting enormous effort into maintaining stable rates until the election. It’s just a matter of 10 percent or 20 percent. Asia Mining Magazine is reminding everyone how USD rates jumped in the past years and especially after previous elections.
According to 2018 reports, the export coal sector employs over 8000 jobs. Around 20 percent are rural residents. Although companies are scraping by through half-paid or unpaid leaves in the last three months following the halt in exports, it’s unfortunately clear that this situation will not recover soon, putting thousands of jobs will be at risk. In this edition, Asia Mining Magazine addresses the current situation of this part of the economic chain network along with the export coal sector. Can we weather the coming storm from the coal crisis?
We all saw how oil prices crashed and even reached a negative 40 USD for the first time in history. What’s certain is that the world’s biggest oil-consuming economies all went under quarantine driving down consumptions, while top oil producers are experiencing the lower spread of the covid-19. Meanwhile, Mongolians perceive this as a possible drop in fuel prices. Although it’s certainly possible to drive down fuel prices to 1000 MNT, we must carefully consider whether Mongolia would gain or lose from this drop in oil prices. We are presenting you - our readers – a small calculation on this.
“Erdenes Tavan Tolgoi” IPO awaits the next Prime Minister
The Cabinet went back on its decision to draw investment by offering a 30 percent stake of “Erdenes Tavan Tolgoi Mining” LLC in an external foreign stock exchange.
Mongolia’s gains and losses from oil plunges
Mongolia generates an equal amount of revenues from both oil exports and petroleum product imports
USD rate continues to strengthen despite a billion-dollar intervention
The Bank of Mongolia has intervened one billion 68 million USD by the first four months of this year,
Grim picture for the export coal sector
Due to the coronavirus, coal exports which form a source of Mongolia’s revenues have fallen 2.7 times.
M.Tulgat: Coal production slowed down and may stop anytime
Vice President of Business Development, Khishig Arvin Industrial LLC
90 percent of job losses in coal transport
China continuing its coal imports, the limited amount is driving thousands of truck drivers into unemployment and back to their home.
Pandemic stricken labor market
A major concern for low and middle-income countries is the fact that the worst-hit industries and services have a high proportion of low-wage workers in informal employment.
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.