Invest Mongolia's Monday Memo - June 22nd, 2015

22 June 2015

June 22nd, 2015

Executive Summary


This week saw a number of exciting developments in the economic and political spheres:
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Mongolian coal miner, Sharyn Gol, has signed a major deal to ship coal to North Korea's Rason port. This is the latest effort to find new ways to reach overseas markets such as South Korea and Japan. Mongolia currently ships 90% of its exports to China, and so it becomes extremely difficult to negotiate competitive prices. Markets such as South Korea and Japan are requiring more energy as Japan begin to move away from nuclear energy to coal powered energy generation.
In the currency market, the US dollar appreciated against the Mongolian tugrik falling by 2.96% to trade at MNT 1,917.38.


United Arab Emirates ("UAE") Prime Minister met with Mongolia's PM Saikhanbileg and discussed improving communications between the two nations and the possibility of establishing a UAE embassy in Ulaanbaatar. In addition, the United Arab Emirates expressed its readiness to establish relations between the law enforcement sectors of the two countries and enroll Mongolian experts for short and medium term vocational training.


According to Bloomberg News, Khan Resources have taken the Mongolian government to US Court over unpaid payments of $104m. The Mongolian government has refused to pay out the compensation after Khan Resources won the international arbitration case against them. Khan's statement says that confirmation of the compensation award would make it executable in the U.S as a court judgement. Khan's CEO Edey told the media that the whole situation "raises a question of whether investors should be investing in a country that does not respect international laws".


The Mongolian Stock Exchange's Top 20 Index continued to soar last week rising by 6.89%. Amongst the biggest movers, leather producers Mongol Savkhi and coal giant Mogoin Gol shares went up by 30.48% and 24.72% respectively.



According to local media, the Tuul river has been polluted for many years despite recent emergency repairs. The current state of the river might have been the result of the recent developments at the Waste Water Treatment Facility. Experts reckon there is a faulty turbine with the waste flow, which is causing the river to become polluted.