“COVID-19” and Mongolia’s mining industry
It is apparent that the economic activity of China recovered significantly. The prices of industrial material, including copper and zinc, reached a seven-year high. The coal, iron ore, and gold prices remain at a multi-year high, thus, it is almost as if the gold age of Mongolia’s economic and mining industries of a decade ago is back again.
Unfortunately, the incompetence of our politicians became the source of deficiency for utilizing such an opportunity. The past one month showed us that policy-makers never thought about safekeeping businesses, the economy, and the livelihood of households after all the talks about coronavirus for an entire year when the domestic case was first reported. If the locally transmitted cases keep rising at the current phase, it would not be surprising to see the country facing a nationwide bankruptcy by next Spring as key indicators such as unemployment, household income, budget revenue, and loan quality show a worse fate for the economy.
The potential budget revenue from coal export lowered by USD 580 billion in the first 10 months of the year. The overall revenue from mining has been undercut by USD 824 billion, widening the budget gap further from the far-stretched budget approved 3 months ago. Currently, the budget revenue stands at MNT 1.56 trillion, which is half of the previous year’s amount. The heavy burdens of minerals export-dependent economy are shown again with the disruption in coal exports, oil price drop, and the instability of copper price.
Vaccine development news and the start of vaccinations in developed countries were our presents for the upcoming Christmas. However, the chances of poor nations, such as Mongolia, to fully vaccinate their citizens next year are getting slim. The amount of money required to vaccinate the entire population amounts to two tons of gold and 1.5 million tons of coking coal. We could potentially see what the Government could do with all the deposits they nationalized from private entities. So the problem is not the money, but the lack of reputation we have to be included in the first phase delivery of vaccines.
Miners are working non-stop during a nationwide lockdown with a minimum shift of 35 days and up to 60 days at the mine. Special measures are being taken to take them home because of it. About 30 companies operating in key deposits are maintaining the highest safety level to prevent the virus spread, conducting regular testing. Asia Mining Magazine is highlighting the articles written from the information we retrieved by getting in touch with these miners operating during the emergency.
A Christmas gift
Several financial institutes updated their outlook on commodities in mid-November when multiple vaccine developments were reported and these did not cover gold.
Gold makes up for coal revenue disruptions
Coal export which recovered despite being affected by the pandemic’s restrictions in the first quarter fell by 941 million USD to two million USD by November compared to the same time last year.
Revenue target of the mining sector at 59 percent
Mongolia’s integrated budget revenue reached 8.2 trillion MNT by the first ten months of 2020, down by 1.6 trillion MNT or 16 percent year-over-year.
Smaller mining companies hit hard by the lockdown
When the heightened state of readiness for disaster protection for 14 days was announced, 403 small mining companies whose operations had been disrupted were forced to let go of their employees.
A step up for the government’s policy
This time, Minister G.Yondon talked about starting with the legal regulations to fulfill his previously stated tasks.
Time to discover and operate primary gold deposits
Two primary gold deposit license holder announced that they pulled the investment required for starting-up production.
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Уул уурхайн салбар эдийн засгийг “чирэв”Захиалах