Foreign trade projected with 1.3 billion USD surplus from 2021 to 2023

The Ministry of Finance forecasts foreign trade balance to come out positive, with surplus of 1.3 billion USD, from 2021 to 2023.

This estimation reflected the increased coal export projection and Oyu Tolgoi LLC’s accelerated mine development and production phasing, which is expected to have higher copper and gold grades starting the second half of 2020.

Oyu Tolgoi raised its gold production guidance for 2020 to a range of 155,000 to 180,000 ounces from 120,000 to 150,000 ounces, while copper production remains on track to achieve guidance of 140,000 to 170,000 tons. By the end of the first half of this year, the company generated revenue of 408.6 million USD from its gold and copper production. Oyu Tolgoi’s sales reportedly saw 44.4 percent decline in the first half of the year due to challenges stemmed from the COVID-19 pandemic, including the collapse of copper prices on the global market.

The multibillion dollar Oyu Tolgoi project accounts for over 90 percent of foreign direct investment to Mongolia. Investors announced at the beginning of the year that they will inject 70 million to 90 million USD funding to the open-pit development and up to 1.1 billion USD for underground development this year. However, the amount of investment is likely to be reduced due to COVID-19.

The Ministry of Finance notes that the project will continue to impact Mongolia’s economic growth in the medium-term. Between 2021 and 2023, economic growth is estimated to be around 6 percent.