🤝 PM VISIT TO US | PUBLIC BANKS EARNINGS | METHANE GAS EXTRACTION

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In today’s edition:

• PM’s official visit to US

• Earnings: Bank

• Methane gas in Mongolia

Let’s dive in!

🤝 Prime Minister to officially visit the US

At the invitation of United States Vice President Kamala Harris, Prime Minister Oyun-Erdene.L will pay an official visit to America between 2-8th of August. This will be his first visit to America since becoming PM in 2021.

High-level visits

Mongolian and American leaders have met frequently in recent years, with visits from both sides. In 1990, the first Mongolian PM, Byambasuren.D visited the US. The most recent visit was in 2018 when former PM Khurelsukh.U met with Vice President Mike Pence. In addition to the prime ministers, all 5 Mongolian presidents have visited the US during their tenure in office. Let’s take a look at US Presidents who came to Mongolia.

• In 1944: 43 years before the establishment of diplomatic relations between Mongolia and the US, the US Vice President visited Mongolia for the first time.

• In 2005: President George W. Bush

• In 2011: Vice President Joe Biden

Joint statements

These visits have been essential for strengthening the bilateral relationship between Mongolia and the US. To highlight some of the accomplishments from their visits:

• In 2007: Mongolia received $285 million in grants under the Millennium Challenge Compact.

• In 2018: the second Millennium Challenge Fund Compact Agreement of $350 million was signed.

• In 2019: Mongolia and the United States became strategic partnership countries from comprehensive partnership countries.

A new roadmap for the new partnership

The roadmap for the expanded economic partnership between the two countries was announced in 2018. However, the pandemic, the Russia-Ukraine crisis, and a new level of partnership necessitated the creation of a new strategic partnership roadmap. The roadmap's priority focus is on:

• The full implementation of the 2013 Trade and Investment Transparency Agreement.

• The establishment of direct flights between the two countries.

• The expansion of renewable energy cooperation etc.

Opportunities to strengthen ties

Mongolian and American diplomatic relations have been heating up in recent years. The PM's upcoming visit will be a chance to discuss a wide range of issues, from trade and investment to security and climate change. Stay tuned for more updates!

DATA STORY: Mongolian public banks release half-year results for 2023

While the combined profits of the top five banks showed little change compared to the same period last year, outcomes were different for each bank. Leading the pack by miles, Khan Bank showcased a remarkable 21% surge in profit, soaring to ₮272 billion. However, TDB and State Bank experienced a notable decline in profit, facing a downturn of 38-40%, while Golomt Bank and XacBank increased their profit by 36.5% and 27%, respectively.

🏗️ TMK Energy (TMK): Set to extract methane gas in Mongolia

The pilot program of the coal seam gas extraction project in Gurvantes sum, Umnugovi province is nearing completion.

What is Gurvantes XXXV?: Dubbed the Gurvantes XXXV project, it is an exploration project for Coal Seam Gas (CSG). The initiative, which has been underway for 18 months, is overseen by TMK Energy (TMK), a company listed on the Australian Securities Exchange.

Resource

Covering a substantial project area, the reserves within are estimated to hold 1.2 trillion cubic feet of CSG with a value of $12.8 billion once production commences.

Proven reserves: The project so far has yielded the confirmation of 1.2 million cubic meters of reserves within a mere 1% of the expansive 8,400 km² licensed exploration area.

Project Benefits: With the project's successful implementation, Mongolia stands to secure a reliable source of gas supply. Furthermore, it presents a lucrative opportunity to export excess gas to Asia's growing markets, notably China, which has long been a key player in the international natural gas trade and has been working to build extensive long-distance pipelines to the regions like Central Asia, Russia, and Myanmar.

In China

In 2022, China shipped 63.4 million tons of liquefied natural gas solely by tankers, constituting a substantial 41% share of its total liquefied natural gas imports.

It should be noted that the China-Mongolia border is less than 20 km away from Gurvantes. The project gains further traction due to its location in close proximity to the established natural gas transmission and distribution network in northern China.

And in Mongolia… Gurvantes XXXV project enters its final stages amidst ongoing discussions surrounding a potential natural gas pipeline from Russia to China through Mongolian territory. Industry experts suggest that the pipeline project could optimize the energy sources' structure, reduce reliance on imports and unlock new opportunities for utilizing natural gas. Yet the Gurvantes XXXV project presents a timely opportunity for Mongolia to extract natural gas domestically, effectively meeting its energy needs and potentially exporting the surplus.

🏃 QUICK STORIES

🔵 This boost was primarily driven by an 89% rise in domestic sales, amounting to ₮49.3 billion. A notable portion, around 28%, of these were attributed to tourist sales. Analyzing the net profit figures, the company faced a loss of ₮10 billion during this period, which is a 43% decrease when compared to the same period in the previous year.

🔵 M bank has recorded a 190% increase in its total equity and liabilities, soaring to ₮420.9 billion since the start of the year. This surge in capital has resulted in a total loan portfolio of ₮155.3 billion and a 51% increase in interest income compared to the previous year-end figures. 

🔵 APU (APU) reported 32.4% year-on-year surge in sales revenue in the first half of the year, reaching ₮517.9 billion. Despite this revenue upswing, the company faced a setback in its net profit, experiencing a decline of 13% to 71.6 billion. This decline marks a departure from the positive trend observed since 2020, where the company consistently improved its half-year profitability. However, this year, APU was unable to sustain its growth trajectory in terms of net profit.

🔵 Oyu Tolgoi LLC has signed an agreement with KHAN Bank (KHAN) and KhasBank (XAC) to provide pension and savings fund services to its employees. Starting from August 1, the company's main employees will make monthly savings from their salaries, and the company will add an amount equal to a certain percentage of the basic salary.

🔵 The Asian Development Bank will finance the expansion of Intermed Hospital with its first health bond. The bank raised ₮35 billion by issuing the bond, which is a two-year bond with an interest rate of 11.25% semi-annually.

⭐ TOP NEWS

• Who will succeed the Dalai Lama? (Economist)

• Mongolia 'B/B' Ratings Affirmed; Outlook Stable (S&P Global Ratings)

• Will Mongolia’s crackdown on graft unlock its mineral riches? (FT)

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Editor: E.Zolbayar
Writer: A.Purevjargal & M.Khulan

Disclaimer: The information Inside Mongolia provides is for educational and informational purposes only. It is not intended to be and does not constitute financial advice, trading advice, or any other advice. The decision whether to consider the information we provide is solely our readers' independent decision.