Mongolia’s economy shrank by 9.2 percent in the second quarter. No improvement from the previous quarter. The World Bank projected the economy to diminish by 2.5 percent at the end of the year. The Government and other organizations expect the second half of 2020 to be the “mending” period. The hopeful wish towards increased coal exports proves this point.
China, which left behind the difficulties of the pandemic, is creating an immense during and “producing consumption” amid the looming danger of coronavirus. The coal producers went back to work, making an effort to become a part of the growth after the global economic crisis. This puts pressure on everyone that is cautious over the fact that all the efforts and expectations would end up for naught. But the era where China’s growth boosted its trade partners may just be over.
Mongolia’s economy that is partially isolated from the external world has been surviving off of the only two pillars, which are loans and aid from financial institutions, and the gold price hike, for the last few months. Our warning that there is “no option but to rely on gold” is now being proven by evidence. The revenue loss of USD 800 million from the disruptions in coal exports in the first 8 months have almost been covered solely by gold, stealing the spotlight as the hero in shining armor. Independent analysts expect even better news for the gold lovers near the end of the year. This is also why the gold producers were the most active ones in the industry since summer. Since the producers are selling gold, which they spent USD 800 per ton to produce, at USD 1,800, even the waste dirt is lovable to them.
External markets (excluding China) may not be able to quickly escape the crisis and the recovery is expected to be gradual according to the latest reports of the World Bank and the Asian Development Bank. The ADB expects Mongolia’s economy to take at least two years to reach the 2019 level.
The ousting of Jean Sebastien-Jacques, the CEO of the mining industry’s runner-up and Mongolia’s biggest investor Rio Tinto, is causing a sensation. BHP and other mining giants are taking cautious steps to avoid the mistakes he made, while Mongolia is focusing on how it will impact the Oyu Tolgoi, secretly probing into the news. Regardless, it is certain that the future of Oyu Tolgoi will be in the hands of the next CEO that will be appointed 6 months from now.
G.Yondon: License issuing process will be transparent and digitalized
We’re working to determine why the initial excavation length was extended in Feasibily studies
Will the Government benefit from Rio Tinto’s CEO replacement?
On the other hand, the Dubai Agreement originated from Jean-Sébastien Jacques.
Raised luxury spendings and sharply dropped revenue
We spoke with D.Oyunbadam, manager of the Economic program of Open society forum NGO.
Ch.Chinbat: We didn’t lay off a single employee
By June last year, we had exported two million tons. We reached the same number this year by September 21
Brace yourselves: Chinese winter is coming
Although Chinese Foreign Minister Wang Yi’s visit has met with a certain apprehension, it seems Mongolia’s coking coal remains with a green light.
Metals that exceeded expectations
The two metals keeping Mongolia from drowning in the COVID-19 crisis are gold and copper. Especially, the strong performance of gold prices is the main crutch against the losses in coal exports.
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