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2022 State Budget: Restore the economy by increasing exports and supporting investment
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On November 12, during its plenary session, Parliament discussed and approved the bill on the state budget for 2022, the 2022 budget for the Social Insurance Fund, the 2022 budget for the Health Insurance Fund, and the 2022 budget for the Future Heritage Fund submitted by Cabinet on September 30, 2021.
According to the 2022 state budget, the government aims to support large-scale projects to triple the size of the economy, increase employment, improve the quality and accessibility of public services, and reduce traffic congestion in Ulaanbaatar.
In order to restore the economy by increasing exports and supporting investment, the government plans to invest 1.8 trillion MNT in the road, transportation, energy, construction, and development sectors. According to the 2022 state budget, investment in the road and transportation sectors will increase by 7.1 times, investment in the construction and urban development sector will increase by 3.7 times, and investment in the energy sector will increase by 6.4 percent.
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| SouthGobi Resources operational profits decreased by 88 percent in Q3 2021 |
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SouthGobi Resources, listed on the Hong Kong and Toronto stock exchanges, recorded a one million USD profit from operations in the third quarter of 2021, down from 8.5 million USD in operational profits recorded in the third quarter of 2020.
The Chinese authorities have restricted the number of trucks permitted to enter the country in response to the increased number of COVID-19 infections in Mongolia, which has resulted in the company’s sales decreasing sharply by 83 percent year-on-year to 170,000 tons in the third quarter of 2021.
Due to border restrictions, the company stopped mining in the second quarter of 2021 and sold its reserves. However, the company experienced an increase in the average selling price of coal from 31.6 USD per ton in the third quarter of 2020 to 53.5 USD per ton in the third quarter of 2021, as a result of improved market conditions in China and an improvement of the overall product mix.
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ETT JSC raised 1.5 trillion MNT after issuing a 2 trillion MNT bond
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Erdenes Tavan Tolgoi JSC announced that the company has raised 1.5 trillion MNT from bonds issued on the stock market.
The company plans to raise up to 2 trillion MNT in USD bonds, the highest amount raised in the history of the country’s financial market, to finance construction projects at Gashuun Sukhait Port, a coal concentrator plant, and a thermal power plant.
The first round of trading was organized on the Mongolia Stock Exchange in March and raised 347 billion MNT, the second round of trading raised 519 billion MNT and 53 million USD, exceeding the original plan by 117 percent, with the participation of international and local investors. The last round of trading was organized last week, on November 11, raising 142.5 billion MNT from bonds with a term of three years.
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Mongolia plans to clear 8.94 million coking coal inventory before the end of February 2022
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Mongolia’s government plans to clear its 8.94 million of coking coal inventory before the end of February 2022 and expects the number of Mongolian coal trucks being sent to China to rise in the near term.
According to Guangzhou-based investment consultancy Founder CIFCO Futures, the number of coking coal trucks from Mongolia to China has risen, improving the supply outlook. In October, the number of trucks hauling coal from Mongolia to China averaged 400 a day, doubling September volumes.
The pandemic has disrupted Mongolian coal traffic to China in 2021, with recurring cases delaying customs clearances. China’s customs data shows that over 10.5 million tons of Mongolian coking coal were imported from January to September, down 64 percent year-on-year.
Last year, coal trade from Mongolia to China reached a historic high with about 2,200 trucks hauling coal daily in August 2020, as reported by Platts Coal.
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