⛏️ START OF OT UNDERGROUND MINING | S&Ls | FOOD GIANTS

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🤔 DID YOU KNOW?

50.7% of Mongolia's population are women.
Their average life expectancy is 76, which is 9.5 years longer than that of men.

⛏️ OT UNDERGROUND PROJECT

Today marks the beginning of underground mining at the Oyu Tolgoi deposit, where 80% of the total reserves are located.

Underground project?

The Oyu Tolgoi underground project has received $15 billion in investment and is poised to become a non-stop, year-round mining operation. Located 1,300 meters beneath the surface, the project will employ block mining techniques, utilizing a 203 km long tunnel with 5 shafts to extract the ore. Once mined, the ore will be crushed and transported to a conveyor belt for further processing.

Underground mining ➡ High income

The opening of the Oyu Tolgoi underground mine marks a major milestone for Mongolia, as the country now boasts one of the world's top 5 most technologically advanced underground mines. This places Mongolia at the forefront of the global copper industry, positioning it as a major player in the years to come.

• Revenue: The annual sales of Oyu Tolgoi are projected to reach $5 billion, and as a result, the royalties paid to Mongolia will increase threefold to ₮700 billion per year.

• Export: Last year, the export of copper concentrate constituted 22% of the total export of mineral products, amounting to 1.5 million tons valued at $2.7 billion. With the advent of underground mining and a consequent tripling of copper production, Mongolia's export income is sure to rise, bringing substantial benefits to the country's economy.

• Contribution: 94% of all underground mine workers are Mongolian workers, including 21% of citizens of Umnugobi province. So, the project directly benefits the livelihood of many Mongolian households.

• Contribution: The Oyu Tolgoi underground mine is noteworthy for the fact that 94% of its workforce is comprised of Mongolian citizens, with 21% coming from the Umnugobi province. This is a direct benefit to many Mongolian households, as the project provides employment and economic opportunities to the local population.

In the future

Rio Tinto (RIO) aims to achieve peak production at Oyu Tolgoi by 2030, with a target of mining 95 thousand tons of ore in a single day. Therefore, the company plans to invest $3 billion in the project, with demand for key products expected to grow by 25% by 2035. This significant investment is expected to drive substantial growth in both income and profits from the Oyu Tolgoi deposit in the years to come.

📈 DATA STORY

Mongolia's liquid food giant APU had a 25.3% rise in sales to ₮838.8 billion, but an 18.7% profit decline to ₮124.8 billion due to increased sales costs and other expenses. SUU, the country’s first milk factory, had an 8.4% sales revenue. However, their total assets decreased by 3.4% to ₮87 billion, with profit dropping by 25% to ₮8.1 billion. This was mostly due to the surge in general/administrative expenses. Talh Chikher saw an increase across all indicators, with sales revenue rising by 33.1% to ₮100.9 billion, and profit increasing by 25.5% to ₮6.4 billion.

💸 SAVINGS AND LOAN ASSOCIATIONS

In the fourth quarter of last year, Savings and Loan Associations (S&L) saw an increase in their total profit, which rose by 8.1% to reach ₮11.6 billion.

Key performance indicators

In comparison to the previous year, the number of operating S&Ls decreased by 6.2%, with a current total of 196. Furthermore, despite a steady increase from 2018-2021, the number of S&L members decreased by 5% to a total of 71,657.

• Concentration: The majority of S&Ls, accounting for 54.6%, are situated in Ulaanbaatar, where a significant portion of the total transactions take place. In fact, transactions totaling ₮24.2 billion, or 60.5%, occurred within the capital city last year.

• Members: Individuals between the ages of 18-45 comprise the majority of S&L members, accounting for 57% of the total membership. Additionally, the average age of S&L members in Ulaanbaatar is notably younger than that of members in provincial areas.

Financial indicators

The total assets of S&Ls decreased by 8.1% to ₮267.7 billion, with a decline of 5.9% in current assets and a substantial drop of 63.1% in non-current assets.

• Savings & Loans: S&Ls experienced a decrease in their total amount of deposits collected, which dropped by 7.9% to ₮187.5 billion as a result of a drop in the number of members. Additionally, the total amount of loans decreased by 1.5% to ₮210.2 billion, while the ratio of non-performing loans declined by 4.7% to ₮7 billion.

• Revenue & Profit: The total revenue of S&Ls grew by 1.7% to ₮59 billion. Of this revenue, 94.8% was attributed to interest income, 1.6% to other operating income, and 3.6% to non-operating income. As a result, the net profit of S&Ls also increased by 8.1%.

🏃 QUICK STORIES

📌 Since the beginning of 2023, Mongolia has exported mining products worth $1.9 billion. Specifically, 7.8 million tons of coal, 0.21 million tons of copper concentrate, 0.83 million tons of iron ore, and 2.4 tons of unprocessed gold were exported.

📌 Central Express CVS (CUMN) reports losses worth ₮25.6 billion. Despite a 2.8 times surge in sales revenue to ₮261 billion, the company’s general and administrative expenses ballooned by 63.3% and financial expenses surged by 1.8 times. As a result, their losses increased by 41.5%.

📌 State-owned mining companies have collected $443.1 million in revenue since the start of the year. These include Erdenes Tavantolgoi JSC, Erdenet Mining Corporation SOE, Mongolrostsvetmet SOE, and Darkhan Metallurgical Plant SOE.

📌 Mongolia ranks 77th on Democracy Index. The Democracy Report, published by the V-Dem Institute, takes into account factors, such as the electoral process and pluralism, civil liberties, and the functioning of government. Mongolia's score of 0.43 has placed it at 77th out of 179 nations in the V-Dem's 2023 report.

⭐ TOP NEWS

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Editor: E.Zolbayar
Writer: Ch.Anuun

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 take into account the information we provide is solely our readers' independent decision.