Mongolia Brief July 31, 2014 Part II
Turning wind into profit
July 31 (UB
Post) Mongolia is “a renewable energy paradise,” according to asia.nikkei.com.
In fact, Mongolia has winds capable of producing 946 terawatts of energy per
hour (one terawatt equals 10 trillion watts). However, 95 percent of all energy
in Mongolia comes from coal.
“By 2025, it is
necessary to produce a minimum of 1,545 megawatts of energy to meet domestic
demand,” said Chief of the Regulatory Authority for Policy Implementation of
the Ministry of Energy Ts.Bayarbaatar. If the government actualizes policy
projects in the energy sector, by 2030, renewable energy will conquer 30
percent of all energy production in Mongolia.
Experts say
Mongolia is perfect for producing renewable energy, and can take advantage of
its resources to become an exporter. The 50 mw capacity Salkhit wind farm, the
country’s first big source of renewable energy, was launched last year by Clean
Energy LLC.
Umnugovi wind
farm now in the works
CleanTech is
leading the construction of a 250 mw wind farm in Khanbogdsoum of Umnugovi
Province, 37 kilometers from Gashuunsukhait port. The construction of a wind
power plant will start next spring. This project will be developed in two
stages. The first stage, building a 102 mw power source, will be launched in six
months.
CleanTech is
developing an investment contract with HappyWind Holding (Sweden) and General
Electric (USA), said an expert from the company. The power plant’s estimated
cost will be 170 million USD.
Sinohydro, a
leading construction company from China, is working on the construction of
another wind farm in Khanbogd soum.
Big banks
interested in investing
A 52 mw wind
power plant will be built 15 kilometers from Sainshand in Dornogovi Province.
“Since an investment contract with Ferrostaal of Germany was signed in February
2014, much work has been done. Domestic companies are working on landscape
research. Construction of a wind power plant will start in spring next year,
and will take 18 months,” said Director of Sainshand Wind Park R.Davaanyam. He
added that they have announced a tender for power plant construction and wind
turbine importing. Through August 8, they will receive the documents of tender
bidders, and the results will be presented by August 25. General Electric,
Siemens, Danish and Chinese companies have expressed interest in importing
turbines. Several international banks and financial organizations have accepted
credit requests, including European Bank of Reconstruction and Development, KfW
Development Bank of Germany, and ten other financial organizations from the
USA, the Netherlands and Belgium. To actualize this project, Mongolia needs 120
million USD.
Thanks to
Sainshand Wind Park, every year, 100,000 families will receive energy. This is
the fourth largest power producer in Mongolia, following Power Plant no.4,
Power Plant no.3 and Darkhan Power Plant.
Mongolia can
fetch nine billion USD
The main
principles of the Asian Supergrid project “Gobitech” are to build big wind
farms in the Mongolian Gobi and export energy to China, Japan and South Korea.
Mongolia and Russia can export their produced energy to these three countries
using transmission lines.
Last month, the
Ministry of Energy organized a forum on “Renewable Energy in East Asia:
Gobitech and the Super Network of Asian Power ,” which the Mongolian President
attended.
“Mongolia has a
certain initiative, which is called ‘Gobitech,’ to become an active user of the
renewable energy of the Gobi,”said President Ts.Elbegdorj.
Within the
“Gobitech” project, there is the possibility of constructing solar and wind
power plants with a capacity of 50 gigawatts each. Project experts report that
Mongolia will benefit most from the projects. Over a span of 16 years, Mongolia
could earn nine billion USD, create 880,000 jobs, and build better roads by
engaging in this project. There is a 100 percent chance of actualizing this
project here report experts. The total cost of the project would be 237 billion
USD, but the Gobi has resources capable of producing 2,600 terawatts of solar
and wind energy per hour.
Turkish company
Aydiner Global plans to spend 94 million USD to build a wind farm next year
near Choir soum of Govisumber Province. Additionally, Clean Energy Asia is
conducting research on building 50 and 100 megawatt wind farms in Umnugovi Province.
Source: Unuudur
World Chess Olympiad kicks off today
July 31 (UB
Post) The 41st World Chess Olympiad kicks off today in Tromso, Norway.
The chess
Olympiad is organized once every two years. Mongolian chess players first
attend the Chess Olympiad in 1956 in Moscow, Russia. Since then, Mongolian male
chess players attended 23 Olympiads and female chess players participated in
16th competitions. The Olympiad will continue for two weeks.
This time, the
Mongolian team will be led by Ch.Chuluunbaatar, sport master and vice president
of the Mongolian Chess Federation. Ch.Chuluunbat will train the women’s team
and coach of the National team and Grand Master D.Sharavdorj will train the
men’s team.
Mongolian
National Chess team team
Men
1. Grand Master
(GM) Ts.Batchuluun – Aldar Sports Committee, Century Chess Club
2. GM B.Gundavaa – Shunkhlai Group
3. International Master (IM) G.Munkhgal – Uvurkhangai Province
4. IM N.Battulga – Khangarid Sports Club
5. GM B.Khatanbaatar – Zavkhan Province
2. GM B.Gundavaa – Shunkhlai Group
3. International Master (IM) G.Munkhgal – Uvurkhangai Province
4. IM N.Battulga – Khangarid Sports Club
5. GM B.Khatanbaatar – Zavkhan Province
Women
1. GM
B.Munguntuul – Aldar Sport Committee
2. GM T.Batchimeg – Monchess lub, Suld Sports Committee
3. FIDE master (FM) U.Lkhamsuren- Khan Altai Chess Club
4. IM B.Ankhchimeg- Mobicom Group
5. Sport master B.Bayarmaa- New Progress Group
The following are the results of Mongolian chess players in previous Olympiads.
- In 1960, Leipzig, Germany – IM L.Myagmarsuren – golden medal
- In 1964, Tal Aviv, Israel – IM T.Uitumen – golden medal
- In1970, Siegen, German – IM T.Uitumen – silver medal
- In 1992, Manila, Philippines – GM B.Khatanbaatar – bronze medal
- In 2000, Istanbul, Turkey – FM Z.Byambaa – bronze medal
- In 2002, Bled, Slovenia – FM Z.Byambaa – silver medal
- In 2004, Palma, Spain – GM B.Khatanbaatar – bronze medal
- In 2004, Palma, Spain – IM T.Battsetseg – bronze medal
2. GM T.Batchimeg – Monchess lub, Suld Sports Committee
3. FIDE master (FM) U.Lkhamsuren- Khan Altai Chess Club
4. IM B.Ankhchimeg- Mobicom Group
5. Sport master B.Bayarmaa- New Progress Group
The following are the results of Mongolian chess players in previous Olympiads.
- In 1960, Leipzig, Germany – IM L.Myagmarsuren – golden medal
- In 1964, Tal Aviv, Israel – IM T.Uitumen – golden medal
- In1970, Siegen, German – IM T.Uitumen – silver medal
- In 1992, Manila, Philippines – GM B.Khatanbaatar – bronze medal
- In 2000, Istanbul, Turkey – FM Z.Byambaa – bronze medal
- In 2002, Bled, Slovenia – FM Z.Byambaa – silver medal
- In 2004, Palma, Spain – GM B.Khatanbaatar – bronze medal
- In 2004, Palma, Spain – IM T.Battsetseg – bronze medal
Through team
points, the Mongolian men’s team ranked 16th in the 13th World Chess Olympiad
in 1970, held in Siegen, Germany and the women chess team ranked 13th in the
29th Chess Olympiad in 1990, held in Novi Sad, Yugoslavia.
Memorials of Tod script presented to public
July 31 (UB
Post) Residents of Khovd Province celebrated the 370th anniversary of Galdan
Boshigt Khaan from July 21 to 27. In relation to the anniversary, a scripture
and sutra exhibition was held, and source material and academic treatise
related to Galdan Boshigt Khaan are being presented to the public.
Memorials of
Tod script are linked to the historical and cultural heritages of Galdan
Boshigt Khaan.
Examples of Tod
script, which were created in the 17th to 18th century, and other creations
were displayed at the exhibition.
In addition,
the Mongolian Language Department of Khovd University also brought Tod scripts
that were stored at the Mongolian Heritage and Culture Institute.
Over 180
scriptures written in Tod script are kept at the Heritage and Culture
Institute.
D.Galsandorj: Although copper export revenue doubled, coal export revenue dropped considerably
August 1 (UB
Post) The following is an interview with
the President of the Mongolian Exporters’ Association, state consultant mining
engineer and professor D.Galsandorj about the recently released customs report.
The customs report for the first half of
2014 was released. Did export revenue increase or decrease?
Compared to
last year, export revenue for the first half of 2014 increased by 450 million
USD, specifically by 22 percent. Some 83 percent of total export revenue
consists of mining products. Exportation for mineral products, cashmere and
woolen products also increased. Foreign trade had a deficit of 157 million USD.
Experts are saying that the deficit, which was measured in billions of USD in
previous years, has decreased. This is connected to the decrease in
importation. Equipment, material and fuel imports dropped due to the closing
down of many factories, especially in the mining sector. Some have even started
operating with smaller work capacity.
Overall,
Mongolian mining industries are trying to operate without terminating
completely. Fluorite, coal and iron mining operations are shrinking down. Even
Energy Resource LLC isn’t doing exploration and instead, selling coal from
their warehouse. MAK company is exporting small amounts of coal. On the other hand,
Erdenes Tavan Tolgoi state-owned company is operating well.
You just mentioned that export revenue
increased by 22 percent. Reports showed that export goods and raw material
volume doubled. Is this true?
Both copper
exportation volume and price doubled. People must have understood this as
export revenue doubling. Total export revenue became 2.4 billion USD and the
volume increased by 25 percent. In terms of volumes, compared to 2013, copper
concentrate exports increased by 300 thousand tons, coal exports by 1.8 million
tons, and oil exports by 1.1 million barrels. As for revenue, copper
concentrate export revenue increased by 500 million USD and oil export by 117
million USD. Although coal exportation volume increased, the revenue dropped
due to price decrease. The average price of a ton of coal exports in the first
half of 2013 was 72 USD. The average price of a ton of coal exports of 2014
decreased by 30 percent and became 47 USD, meaning that coal revenue decreased
by 97 million USD compared to the first half of 2013.
In general, how are Mongolia’s mineral
product prices?
Apart from coal
price decrease, iron export prices decreased by some 20 percent. Copper and
zinc prices are rising in international markets. Compared to 2013, copper
concentrate price increase by some 18 percent and zinc prices by 10 percent.
Industries that use these minerals should be supported. The price of a ton of
copper was set at 6,800 USD in the 2014 state budget. At the moment, the price
has reached approximately 7,100 USD. Budget revenue will increase accordingly.
Can it be concluded that copper concentrate
exports of Oyu Tolgoi led to this take-off?
Yes. Within the
first six months of 2014, Mongolia exported 580 thousand tons of copper
concentrate, specifically Erdenet Mining Corporation exported 260 thousand tons
of copper concentrate and Oyu Tolgoi exported 320 thousand tons. Some 660
million USD came from copper concentrate exports of Oyu Tolgoi. Mongolia gets
100 percent of Erdenet Mining Corporation’s currency income. Unfortunately,
only 20 to 30 percent of Oyu Tolgoi goes to Mongolia. In Oyu Tolgoi’s
investment agreement, it was agreed that currency income would be transferred
directly to the parent company so it doesn’t come into Mongolia. This is a
major mistake in the agreement. At least 34 percent of its share revenue should
go through Mongolian commercial banks. Australia and Chile requires revenues of
foreign investors to be circulated through the nation’s commercial banks.
In addition,
5.4 tons of gold was exported from Oyu Tolgoi mine in the first half of 2014.
Customs officers are including this revenue into the copper concentrate export
revenue. They need to improve customs statistics by specifically reporting on
how much USD revenue they got from gold and how much from copper concentrate.
Many are saying that mines are ceasing
operations. Yet, why are mineral and raw material exportation amounts of
Mongolia increasing? For example, coal export volume increased.
Until April,
coal taxes were imposed in relations to a reference price, but now, we started
imposing them on prices dictated by the contract. It’s beneficial for coal
mines when taxes are paid from contracted prices. This is why mines exported
large amounts of coals for some time and increased exportation. However, mines
started closing up their work since June and some even stopped operations.
In terms of
revenue, copper makes up 40 percent of total export, coal makes up 18 percent,
and oil makes up 13 percent. Furthermore, iron ore makes up eight percent and
zinc makes up two percent of total export revenue. For exports, copper and oil
is covering revenues for products with reduced prices and offset overall export
value.
It seems that Mongolia will get majority of
its revenue from copper concentrate exports in the future. What do you think
awaits the coal industry in the future?
It’s certain
that copper concentrate will continue to be the leading export product of
Mongolia for the next four to five years. If Tsagaan Suvarga copper mine is
commissioned in 2016, copper export amounts will increase considerably. The
time when coal made up 40 percent of export revenue has passed. I think it’s
unnecessary to transport coal with trucks in an environment that’s initiating responsible
mining and protection of the environment. Mongolia doesn’t have management for
establishing coal export agreement. Therefore, it’s selling coal at low prices.
One-ton of refined coal of Energy Resource Company is sold at an average price
of 37 USD. The amount of valuable refined coal should be increased. Energy
Resource Company is only utilizing 30 percent of its concentrator’s capacity.
The concentrator can process up to 15 million tons of coal. Other companies can
use the remaining capacity to process coal.
There are talks that Erdenes Tavan Tolgoi
Company is negotiating to process coal at Energy Resource’s plant. Can you
comment on this?
It’s correct.
Our association sees that it’s required for the three corporations operating at
Tavan Tolgoi mine to partner in coal production, transportation and logistics,
and work with integrated policy and export agreement.
Is there hope for reviving coal and iron
prices?
Iron prices may
revive. Bargilt iron ore deposit of Mongolrostsvetmet Company is selling iron
concentrate for 70 USD per ton. Bayangol mine is selling for around 50 USD and
AltainKhuder Company for 40 USD. Since iron demands in the Chinese market are
increasing, it’s likely for iron prices to increase. Coal prices dropped and
made situations difficult because Mongolia didn’t have an integrated policy. We
need price regulations. The Ministry of Mining is actively working to establish
a Mineral Exchange. This work should be hastened. If an exchange is
established, Mongolia will be able to sell coal at standard integrated price
and quality. Mongolia gets price cuts because we’re unable to negotiate with
big Chinese corporations. We only negotiate with smaller corporations.
If raw materials are processed, they can be
sold for higher prices. What are your thoughts on this?
Actually, the
government is talking about increasing the quantity of value added export
products. Although they said that they’ll give funds from government bonds to
iron concentrator plants, they still haven’t given them. They were supposed to
give funds to major projects of Erdenet, Tsagaan Suvarga, and Bor-Undur
concentrator plants. They’re wasting time. They even said that they’ll build a
plant to produce final products at Sainshand city in Dornogobi Province.
However, there’s no finalized technical and economic feasibility study or
investment. It’s a good dream. They talk so well on television. Even if
Mongolia produces final products, will China purchase? Chinese exportation tax
increases as products are refined. Many things need to be considered. It’s
enough to utilize our capacity and sell 15 million tons of refined coal a year.
Yet, people are talking nonsense by saying that they’ll export 31 to 50 million
tons. It’s useless to build a railway if we can’t supply competitive products
consistent with Chinese standards. I’m not sure if Mongolia can benefit from
constructing a railway with a huge amount of money. If Mongolian coal isn’t
going to be sold, what’s the point of constructing a railway?
Do you think that it’s better to establish
at least a steel mill?
Mongolia will
probably export iron from 2015 to 2030. MPs are saying that two to three plants
will be built in the next two years, and then, steel will be exported. This is
a lie. Before talking about exporting, Mongolia needs to be able to
domestically produce 600 thousand tons of steel bars that it imports from
foreign countries. Mongolians love to talk about exportation when they aren’t
even able to supply their own domestic demands. There are people who even talk
about increasing oil exports when the country isn’t producing a drop of
petroleum fuel. People also mentioned exportation of energy. But Mongolia is
buying energy from Russia and China. Instead, they should be talking about
supplying Mongolia with domestic energy.
Source: Unuudur
news http://mongolnews.mn/w/53624
Ulaanbaatar’s only rollercoaster operates with faulty brakes
August 1 (UB
Post) The Ulaanbaatar City Specialized Inspection Agency inspected the
maintenance of the rollercoaster at the National Amusement Park early this week
and detected several safety issues.
The rollercoaster was installed at the park last year and was tested and approved by the State Special Commission on April 16, 2014.
The rollercoaster was installed at the park last year and was tested and approved by the State Special Commission on April 16, 2014.
However, the
on-site inspection revealed that the front spring of the train’s brake which
prevents rollback on tracks was missing, while its rear spring was broken,
which is a clear sign of poor daily maintenance and check-up.
The
rollercoaster operators were trained and documented, although they didn’t have
professional licenses.
In addition,
the inspection found that the rollercoaster staff and operators violated
occupational safety and internal regulations by not showing up to work.
Mongol Rally 2014 is the last for Mongolia
August 1 (UB Post) Mongolia to welcome
the Mongol Rally for the tenth and final year
Around 500
adventurists in 300 “unusual for travelling” cars gathered at Hyde Park in
London, for the launch of the 2014 Mongol Rally and set off to Mongolia on
Saturday, July 20. They are due to arrive in Ulaanbaatar on August 31, after
crossing 17,000 kilometers of challenging terrain in some 20 different
countries along the way.
The
Adventurists, founded by Tom Morgan, organizes the Mongol Rally. The first
rally was completed in 2004 with four teams. The rally is famous worldwide, as
there is nothing like it in the world of rally courses. Organizers say the core
point of it is adventure and the challenge drivers face along the way, rather
than who gets to the finish line first.
This year, no
rally cars will stay behind in Ulaanbaatar. They will either be shipped back to
their countries of origin or rally drivers will travel home with their cars,
unlike previous years.
Though the
rally increases the flow of travelers to Mongolia and contributes to the state
budget, some local residents are critical about the fact that rally cars, which
have been massively degraded on the way, stay in Mongolia for charity.
For the past
nine years, Adventures for Development Mongolia (AFDM) NGO was the Mongolian
organizer and was responsible for receiving and selling the rally cars and
using the profit for charitable donations, according to AFDM representative
G.Baigal.
She also
highlighted that all the Mongol Rally cars which were left in Mongolia passed
AFDM’s requirements for vehicle standards (rally cars must not be older than
ten years), unlike the public’s misunderstanding that the cars are practically
scrap metal, staying only to pollute Ulaanbaatar.
This year, news
that none of the 300 cars faced vehicle-age restrictions spread in the media,
which upset the public. Shataraa, an AFDM representative, spoke with us about
plans for 2014.
We heard the
rally cars didn’t have to pass any requirements on years of usage this year.
Why is that?
None of the rally cars will stay in Ulaanbaatar this year and that is why we haven’t set age restrictions on them. Shipping issues are currently being processed.
None of the rally cars will stay in Ulaanbaatar this year and that is why we haven’t set age restrictions on them. Shipping issues are currently being processed.
The rally cars
used to stay in Ulaanbaatar every year. Why is this year being organized
differently?
Mongol Rally
will not be held here starting next year. The organizers couldn’t deliver accurate
information about the rally to the public, so people seem to have negative
ideas about it. The media spreads false information about the rally, saying we
are willingly bringing scrap metal to the city. Because of this, The
Adventurists are not pleased. So this is the last year to welcome the rally
cars.
How much profit
did Mongol Rally bring to Mongolia in total for the past nine years?
Each rally car
paid special customs tax, and regular customs tax together with VAT. Mongol
Rally brought almost two billion MNT to the state budget in total. Plus, a
total of 4,000 tourists have travelled to Mongolia and spent about six billion
MNT here.
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