Min­is­ter D.Su­miyabazar con­fi­dent coal ex­ports will reach 42 mil­lion tons in 2019

The UB Post - - Business & Economics - By D.BOLDSUKH

The gov­ern­ment re­mains con­fi­dent that coal ex­ports will in­crease to 42 mil­lion tons in 2019, said Min­is­ter of Min­ing and Heavy In­dus­try D.Su­miyabazar dur­ing the monthly Re­spon­si­ble and Trans­par­ent Min­ing con­fer­ence or­ga­nized by the min­istry. The min­is­ter un­der­lined that the coal in­dus­try has reached a 900 bil­lion MNT in­dus­try.

In the first nine months of 2018, 33.5 mil­lion tons of coal have al­ready been ex­ported. Min­ing has pro­vided 176.46 bil­lion MNT in rev­enue to the state bud­get. The min­istry re­ported that 979,400 tons of cop­per con­cen­trate, 14.4 tons of gold, 4,000 tons of molyb­de­num, 2,400 tons of iron ore, and 4.8 mil­lion bar­rels of crude oil.

Cur­rently, 3,163 re­source ex­plo­ration and pro­duc­tion li­censes have been pro­vided and are cur­rently in use.

Dur­ing the con­fer­ence, Min­is­ter D.Su­miyabazar also delved into the prospects of the Er­denes Ta­van Tol­goi IPO. The min­is­ter said that meet­ings re­gard­ing the IPO are on sched­ule and have had “en­cour­ag­ing” re­sults. The se­lec­tion process for the con­sul­tants to the IPO is un­der­way and the min­is­ter said they will be an­nounced on Novem­ber 15. A del­e­ga­tion from Cab­i­net and the Min­istry of Min­ing and Heavy In­dus­try re­port­edly met with of­fi­cials from the New York Stock Ex­change (NYSE), the Toronto Stock Ex­change (TSX), and sev­eral in­vest­ment fund rep­re­sen­ta­tives.

“Do­mes­tic com­pa­nies are also sup­port­ing the IPO. Next month, rep­re­sen­ta­tives will be pre­sent­ing the IPO at min­ing con­fer­ences in Aus­tralia and in Lon­don. Oyu Tol­goi has ex­pressed their will­ing­ness to sup­port the IPO and in­tro­duce about Mon­go­lia’s im­prov­ing econ­omy and le­gal en­vi­ron­ment. In ad­di­tion, there are talks that Mon­go­lia’s credit rat­ing will be up­graded to +B and 2B. This sig­ni­fies that in­vestor con­fi­dence in Mon­go­lia is im­prov­ing,” said D.Su­miyabazar.

Ac­cord­ing to the min­is­ter, NYSE, Lon­don Stock Ex­change, and Hong Kong Stock Ex­change have ex­pressed in­ter­est in be­ing in­volved in the IPO. The IPO is re­port­edly planned for April 2019 and a des­ig­nated 15-per­son team is work­ing on the IPO.

D.Su­miyabazar an­swered some ques­tions from the me­dia.

Fuel im­porters have said that fuel prices will in­crease in De­cem­ber. What is the min­is­ter do­ing to de­crease fuel prices?

I ad­mit that I am also wor­ried about fuel price in­creases as any in­creases in fuel prices cause price surges in widely used con­sumer prod­ucts. The fuel pric­ing com­mit­tee has met with fuel im­porters. We con­cluded that oil prices are rel­a­tively de­creas­ing on the global mar­ket. The Min­istry of Min­ing and Heavy In­dus­try is a pol­icy-based min­istry. The min­istry fo­cuses on di­rect­ing pol­icy and main­tain­ing sta­bil­ity in the sup­ply, re­serve, and prices of fuel. The ex­cise tax, im­port tax, and any tax breaks are un­der the author­ity of the Min­istry of Fi­nance. We do not have the author­ity to reg­u­late and man­age the prices in the short-term.

You dis­cussed ne­go­ti­a­tions with Ros­neft dur­ing yes­ter­day’s Cab­i­net meet­ing. Will th­ese ne­go­ti­a­tions bring down fuel prices?

We have es­tab­lished a joint work­ing group with Ros­neft. The Mon­go­lian gov­ern­ment is rep­re­sented by for­mer Min­is­ter of Man­u­fac­tur­ing and Trade Kh.Narankhuu. The work­ing group is dis­cussing oil ex­plo­ration and pro­cess­ing, the prospect of build­ing a pipe­line, build­ing up re­serves, and the sup­ply of jet fuel to the new in­ter­na­tional air­port. For ex­am­ple, if jet fuel is pur­chased at prices set on the Sin­ga­porean mar­ket, the cost of air­line tick­ets could be low­ered. The agree­ments from the work­ing group will be ready by Novem­ber 15.

Mon­go­lia must fol­low through with its oil re­fin­ery. The prime min­is­ter is head­ing this project and has del­e­gated re­spon­si­bil­i­ties of see­ing the project through. This is a ma­jor strate­gic project that will help pro­tect Mon­go­lia from price surges and will de­crease the bil­lions of MNT that flow out of the coun­try to pur­chase fuel. We fore­cast that the re­fin­ery will help re­tain 500 mil­lion USD within the coun­try. The power sta­tion, rail­way, roads and the in­fra­struc­ture is at 50 per­cent progress. Th­ese en­deav­ors are planned to be com­pleted by Novem­ber 2019. This is when the pro­cess­ing plant and the pipe­line con­struc­tion is set to be­gin. This will open up the op­por­tu­nity to main­tain sta­ble fuel prices. In the short-term, Mon­gol Bank and the Min­istry of Fi­nance can fo­cus on main­tain­ing sta­bil­ity in fuel prices.

In the 2019 state bud­get it has been fore­cast that 42 mil­lion tons of coal will be ex­ported. How re­al­is­tic is this num­ber?

We re­main con­fi­dent that we will reach this num­ber. We are meet­ing with the ad­min­is­tra­tion of Er­denes Ta­van Tol­goi. Bayan­nuur Prov­ince in In­ner Mon­go­lia, China has ex­pressed in­ter­est in rais­ing the ve­hi­cle quota. Re­gard­ing this, we are work­ing to in­crease the 1,500 ve­hi­cles that cur­rently ex­port coal into China to 1,700. This will al­low Er­denes Ta­van Tol­goi alone to ex­port 15 mil­lion tons. We are press­ing to ex­port around 20 mil­lion tons. This is a boost to the IPO. The com­pany ad­min­is­tra­tion is meet­ing with pol­i­cy­mak­ers from the min­istry to work out the de­tails.

Many peo­ple are prob­a­bly skep­ti­cal that coal ex­ports will reach 42 mil­lion tons. I am not skep­ti­cal. The ad­min­is­tra­tion of Bayan­nuur Prov­ince has been in talks with us on cre­at­ing a border gate solely for Er­denes Ta­van Tol­goi.

What is be­ing done in or­der to pre­vent in­vestors from ex­it­ing Mon­go­lia? In­vestors are closely watch­ing the Oyu Tol­goi project. What has be­come of the in­ves­ti­ga­tion into the com­pany?

It is in­evitable that min­ing will be the pri­mary sec­tor for the econ­omy in the next 20 to 30 years. This sec­tor re­lies on for­eign in­vest­ment. We are in talks with Oyu Tol­goi and work­ing hard to reach com­mon ground. The par­lia­men­tary work­ing group on Oyu Tol­goi will likely present their find­ings in the near fu­ture. They will dis­cuss mat­ters con­cern­ing the mine and the In­vest­ment Agree­ment.

In or­der to cor­rectly and sus­tain­ably main­tain such a large project re­quires main­tain­ing a cer­tain bal­ance. Are there things that need to be fixed or amended? Of course. Is the mine help­ing ad­vance the econ­omy and the min­ing sec­tor? Of course.

Oyu Tol­goi is a large com­pany that sup­ports Mon­go­lian busi­nesses and em­ploys 16,000 peo­ple. We have seen that if the mine halts, there is no one that will be held ac­count­able. Due to wrong poli­cies and ir­re­spon­si­ble state­ments made by of­fi­cials, Mon­go­lia’s econ­omy was in cri­sis. The wrong choice of words and state­ments can de­rail years of progress.

The work­ing group and our min­istry is ap­proach­ing the sit­u­a­tion very care­fully. This does not mean we are sup­port­ing any de­fi­cien­cies or wrong­do­ings. In­stead we must work out the kinks and work to­gether for fu­ture suc­cess. There­fore, I am hope­ful that the find­ings of the par­lia­men­tary work­ing group will not cause any ob­sta­cles or stop­pages in the project.

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