With a focus on curbing political risk to encourage new investment, Mongolian authorities are striving to build a competitive industry to develop the country’s abundant natural resources. Copper regained its place as Mongolia’s top export in 2014, and is the primary focus of new exploration alongside gold and niches like fluorspar and rare earths. With metallurgical minerals prices still depressed, Mongolia must improve efficiency in coking coal operations to compete in the Chinese market, with construction of much-needed railways continuing to be a pressing concern for the sector.
While the coalition government has toned down its rhetoric of resource nationalisation, the challenge will be in implementing regulations and its treatment of existing disputes (see analysis). Movement on phase two of the landmark Oyu Tolgoi (OT) mine is therefore crucial in helping to restore investor confidence.
Boasting the world’s second-largest copper reserves at 117m tonnes as well as the fourth-largest coal deposits at 175.5bn tonnes, Mongolia also holds ample reserves of gold (2493 tonnes), iron ore (1.17bn tonnes), zinc (1.74m tonnes), fluorspar (1.01bn tonnes), uranium (170,000 tonnes), oil (333m tonnes) and shale oil (788bn tonnes), according to 2013 figures from the Ministry of Mining. Roughly the size of Alaska, Mongolia holds over 6000 deposits of some 80 minerals, according to the World Bank, though it remains vastly under-explored, with 400 deposits defined and 160 in production.
The Mineral Resources Authority of Mongolia (MRAM) has built on Soviet-era surveying by shooting new satellite imagery, although only around 30% of the country is covered in high-definition. The Law of the Prohibition of Mining Operations in the Headwaters of Rivers, Protected Zones of Water Reservoirs and Forested Areas (known as the Long Name Law) in 2009 effectively froze all exploration and mining licences within 200 metres of rivers and forests, and led to a moratorium on new exploration licences nationwide in June 2010, though this was later rescinded in July 2014.
Land Under Licence
The proportion of land under exploration or mining licence declined from around 44% in 2008 to 9.1% in 2014, with just 0.5% of land covered by mining licences and 0.01% in active production, according to MRAM figures. The number of licences has also fallen sharply, from 3540 in 2012 to 2783 by August 2014, with most nearing the end of their tenure.
Roughly one-third (36%) of licences are for gold, followed by 17% for coal, 12% for fluorite, 4% for iron ore and 2% for tungsten. Amidst plunging commodity prices and gradually expiring licences, the number of junior exploration firms dropped by three-quarters between 2012 and 2014, with around 200 foreign-invested firms operating formally in Mongolia.
Copper had long been Mongolia’s main export, with the Russo-Mongolian 49:51 Erdenet copper mine opened in 1974 accounting for roughly 40% of GDP until 2006. Output of thermal coal from part-state-owned mines at Baganuur and Shivee Ovoo is channelled to four major power plants, while over 100,000 informal “ninja” miners supply low-income ger (yurt) dwellers. However, starting in the mid-2000s Mongolian miners such as Mongolyn Alt Corporation (MAK) and MCS started exporting unprocessed coking coal to China, exposing Mongolia to volatile commodity prices at the super-cycle’s peak.
Coal production more than doubled from 9.7m tonnes in 2008 to 24.4m tonnes in 2014, of which 80% (19.5m tonnes) was exported, while iron ore output increased seven-fold from 1.4m tonnes in 2008 to 10.3m tonnes in 2014. Copper regained its position as the country’s top export, as output increased from 126,800 tonnes of copper in concentrate in 2008 to 1.1m tonnes in 2014. Meanwhile, gold production, constrained by the 2009 Long Name Law and declining output at the maturing Boroo Gold mine, fell from around 530,000 oz in 2008 to roughly 405,000 oz in 2014.
As Chinese coal prices slumped beginning in mid-2012, exports from Mongolia faced quickly worsening terms of trade. With only one coal washing and processing plant with roughly 11m tonnes of annual capacity for hard coking coal, Mongolia exports a largely unprocessed semi-soft product. In the absence of rail links to China, most Gobi coal is trucked to the border, either using one of two private road concessions or, more often, unpaved roads that come at a high environmental cost.
Back & Forth
Mongolia has sent mixed messages over its coal mining policy in its treatment of the massive Tavan Tolgoi (TT) deposit, with 7.42bn tonnes of coal and 1.4bn tonnes of coking coal, according to state-owned operator Erdenes Tavan Tolgoi (ETT). At the height of its coking coal exports to China in 2012 the Mongolian government made two key policy reversals that rattled investor sentiment.
In late 2011 it cancelled the concession to develop the West Tsankhi component of TT, which had been awarded to a consortium of the US-based Peabody Energy, China’s Shenhua Group and Russian Railways, due to Japanese and Korean criticism at being excluded. This left ETT as the sole operator for most of the East and West Tsankhi components, though the company has been using contract miners.
In May 2012 Mongolia’s parliament passed legislation giving it discretionary powers over foreign investment. Enacted in response to attempts by Aluminium Corporation of China (Chalco) to take over SouthGobi Resources in early 2012, the Strategic Entities Foreign Investment Law (SEFIL) gave the National Security Council veto powers over investments exceeding 49% in strategic sectors such as mining.
A significant development came in late 2014, when the government announced a tender process for the right to extract under ETT’s mining licences. In December the bid was ultimately awarded to a consortium including China’s Shenhua Energy, Japan’s Sumitomo Corporation and Mongolia’s Energy Resources, though as of early 2015, the deal has yet to be signed.
Three smaller licences at East Tsankhi have been mined since the 1950s by locally owned Tavan Tolgoi joint stock company (known as small TT). Meanwhile, Energy Resources, a subsidiary of MCS’s Hong Kong-listed Mongolian Mining Corporation (MMC), has been operating the Ukhaa Khudag mine, covering 4% of TT deposits, since 2009.
Unwashed coal producers, which make up the majority of coal producers in the country, have struggled with a low reference price set by ETT, which was selling at a discounted price of $32-34 per tonne in mid-2014 under its contract with Chalco. Calculations of the 5% tax on coal are based on a reference price, which is higher than the contract price as it is based on a basket of international prices. This has made Mongolian coal too costly for the market. Furthermore, as the slump in global coal prices ate into miners’ profitability, the country’s share of Chinese coal imports declined from around 20m tonnes in 2011 to 15.4m tonnes in 2013, according to MRAM, while coal’s share of total exports fell from 47% to 26%.
Over 190 companies have licences to mine coal, though only 45 were operating in 2013: 14 companies were exporting, only half of which continued to export without any interruption, according to the Mongolian Coal Association. While coal output rebounded 25.8% year-on-year to 12.6m tonnes, of which 10.4m were exported, in the year to August 2014, surging copper output has drastically altered Mongolia’s production mix.
All that Glitters
First production at the country’s landmark OT copper and gold mine in July 2013 was a watershed for Mongolia. The 66:34-split investment agreement from 2009 between Ivanhoe Mining (Turquoise Hill since 2012) and the government placed Mongolia on investors’ radar and unleashed a flood of investment just as the economy was bailed out by the IMF. For Rio Tinto, which owns 50.8% of Turquoise Hill, OT represents a welcome diversification from depressed iron ore, which accounted for 85% of net income in 2013.
The project, which targets recoverable reserves of 2.7m tonnes of copper and 1.7m oz of gold, is structured in two phases over 50 years. The first, covering roughly 20% of the deposit, is a 280-metre-deep open pit that produced 148,400 tonnes of copper and 589,000 oz of gold in concentrates in 2014. The $6.2bn construction phase to April 2013 proved an important direct economic stimulus, but the largest project finance deal in mining was also key for investor confidence in Mongolia as a whole and led to the 2009 repeal of a 68% windfall profit tax on both copper and gold, which was originally imposed in 2006.
While the country’s total production volume of copper concentrate increased 34.5% year-on-year in 2014 to 1.1m tonnes, exports rose by 6.1% to 1.4m tonnes, according to figures from the Ministry of Mining. OT is also driving a rebound in gold output, which jumped 29.2% to around 405,000 oz in 2014.
The real promise lies in OT’s second underground phase, which would boost the site’s annual output to 450,000 tonnes of copper in concentrate, 650,000 oz of gold and 3m oz of silver. The expanded project – the world’s second largest in copper – could account for roughly one-third of GDP by 2020.
As of September 2014 the second phase had been delayed by two years following disputes between the state and Rio Tinto starting in late 2012. With the disagreements focused on government criticism of the $2.1bn budget over-spend on the original $4.1bn plan for phase one, the cost of funding, Turquoise Hill’s management fee, water usage and taxes, development of phase two was held pending the resolution of outstanding issues. In April 2015 the prime minister, Ch. Saikhanbileg, announced that an agreement had been reached, though the final details had yet to be released.
Although the government’s cancellation of a double taxation treaty with the Netherlands in September 2012 did not affect the investment agreement, it reflected intense political pressure to amend the deal. Independent audits from Deloitte, PwC and EY confirmed that over-runs were unavoidable. Another hurdle came in June 2014 when the General Department of Taxation levied $127m in withholding back-taxes. With copper prices at a four-year low and pending resolution of the dispute, OT cut 1700 workers in August 2013 and another 300 in May 2014.
The combination of slumping commodity prices and policy uncertainty created some challenges both in financing and for contractors facing lower work flows. “While the slowdown in China has affected the mining and exploration businesses globally; in terms of some commodities, like copper and gold, it has not been as severe as everyone thinks. In fact, export volumes of most commodities are still relatively high historically,” Andrew Stewart, chief geologist at Xanadu Mines, told OBG. “Right now, the issue is more a credit one, as there is very little money available globally for exploration projects.”
Global mining investment nearly halved from $21bn in 2012 to around $12bn in 2014, according to energy company Platts. Cash-strapped Mongolian miners have had to cut costs aggressively to remain viable, with SouthGobi Resources, MMC and MAK trimming costs on key inputs and seeking more efficiencies in trucking to the border, although not selling assets.
“We have not seen any sales of distressed assets, mainly due to a cultural attitude that prefers to hold onto distressed assets rather than selling them at a loss,” Graeme Hancock, Anglo American’s president and chief representative in Mongolia, told OBG.
International drilling companies have borne the brunt of falling investment in exploration, with idle capacity and few places to ship equipment to. The rush of investment up to 2012 created a base of Mongolian-owned contractors, with local content requirements on projects such as OT at 50% of investment and 90% of staff. Trucking also requires a 9:1 ratio in favour of Mongolians, exacerbating shortages at coal mines in the sparsely populated South Gobi.
While local content requirements forced foreign drillers to incorporate locally, the exodus of junior miners from mid-2012 made most recently imported equipment redundant. Whereas local drillers like Tanan Impex, Mongolian Universal Drilling and LG are more competitive on open-pit mining, foreign drillers like Leighton, Macmahon Holdings and Major Drilling Group International dominate underground drilling, albeit at higher prices. Drilling costs have fallen by 40% in two years, according to local miners’ estimates, with smaller local firms refocusing on construction and oil. Of the estimated 500 drilling rigs, under 100 were active in 2014.
Accounting for 18.5% of GDP, 83.2% of exports, 81% of foreign direct investment and 17.5% of budget revenue in the first half of 2014, mining remains of central importance to the government’s economic recovery plan. “The OT issue has become a barometer for investor confidence in Mongolia,” the former vice-minister of economic development, O. Chuluunbat, told OBG. “Mongolian politicians have now learned the lesson that they can damage the economy with too much resource nationalism.”
Fresh from an electoral cycle ending in June 2013, the government has moved swiftly to enact a raft of new legislation. The new Investment Law of October 2013 superseded the much-maligned SEFIL, putting foreign and local investors on an equal footing and offering tax stabilisation certificates through the new Invest Mongolia Agency. A long-awaited State Policy on Mining issued in mid-January 2014 was markedly pro-business, in stark contrast to previous drafts, and placed limits on state intervention.
Two amendments to the 2006 Minerals Law made in July 2014 provide internationally competitive terms for private exploration. The first cut royalties on gold sold to the central bank to a flat 2.5%, while the second brought broader changes to exploration terms and governance. “Changes to the mining law will not automatically lead to a restart in projects, although this will help,” T. Tuguldur, Mongolia manager at Micromine, told OBG. “That said, there will always be room for well structured projects that make sense economically.”
The government’s 100-day Action Plan in May 2014 went beyond legislative changes, focusing on the progress of key projects. Chief among these were starting OT’s second phase and improving ETT’s profitability through private investment. The government has also been resolving disputes with holders of 106 licences cancelled in early 2013 due to a criminal court conviction of a former-MRAM chairman, setting a key precedent in the tax treatment of mergers and acquisitions (see analysis).
In addition, the government plans to expand geological mapping and undertake studies on gold, zinc, coal, fluorspar and rare earths. Authorities also hope to expedite development of strategic deposits such as MAK’s Tsagaan Suvarga in copper, Centerra Gold’s Gachuurt in gold and the Asgat silver mine in a joint venture with Russia’s Mongolrostsvetmet.
After repeated deadline extensions for a $4.1bn project finance package for OT’s second phase, an agreement was reached in August 2014 for a key part of the deal – the construction of a mine-mouth independent power plant at TT to supply 450 MW of power to the enlarged OT from 2017 using 1m tonnes per year of thermal coal. The Tax Dispute Settlement Council cut OT’s tax bill from $127m to $30m in September 2014; however, the matter remains in negotiations.
In compliance with statutory requirements, Turquoise Hill submitted the phase two feasibility study, valued at some $4.9bn, paving the way for a comprehensive agreement on both phases. However, the revised assumptions included a $1.5bn cut in the expansion’s net value and another $800m cut due to the delays. It is likely to take more than six months from financial close for funds to start flowing into Mongolia, although projections are for roughly $1bn worth of investment in phase two annually for at least five years. The more immediate impact will be on investment confidence.
Ties that Bind
State-owned ETT, which currently controls all of TT aside from Energy Resource’s and small TT’s combined four licences, remains shackled by a $350m forward-sale contract in 2011 to China’s Chalco for unprocessed coal, at a 20-30% discount on mine sale market prices, equivalent to around $32-34 per tonne in September 2014.
When $310m in Chalco proceeds was transferred to the Human Development Fund in 2011 to finance cash payouts ahead of the 2012 elections, ETT was left starved of operational capital and relied on a $200m debt injection from the Development Bank of Mongolia (DBM) in 2013. As of July 2014, the $110m of remaining Chalco debt would require more than 3.24m tonnes of ETT output. Chalco also holds the right of first refusal for 80% of East Tsankhi’s output for five years after debt repayment. “The contract between ETT and Chalco was not bad in and of itself; it is normal that Chalco would get a discount since it paid in advance,” N. Enkhbayar, head of the economy, finance and investment division at the Ministry of Mining’s department of strategic policy and planning, told OBG. “The challenge was that as coking coal prices slumped, the discounted sales price to Chalco also declined to very low levels.”
Although ETT’s East Tsankhi mine, with 1.08bn tonnes of reserves (78% coking coal), has been contract mined by Australia’s Macmahon since 2011, production has suffered repeated interruptions due to cash-flow issues, late payments to the contractor and successive temporary contracts with Chalco.
Jumpstarting mining on West Tsankhi, where the concession to private operators was stalled in late 2011, is imperative to generate income. Three Mongolian contractors (Khishig Arvin Industrial, Mera and Mongolian National Operator) mined the 888m-tonne West Tsankhi deposit from September 2013 under a one-year contract, although production was barely profitable given transportation costs, while its thermal coal production was left unsold.
Yet, according to M. Otgonbayar, CEO of Baganuur, “There is a market for more thermal coal in Mongolia. Investments in further exploration and in new technologies from abroad that will increase production capacity make sense, especially if some of the country’s thermal coal mines are privatised.”
The government has much higher ambitions for the strategic deposit, hoping to ramp-up output, boost its contribution to GDP and curb transport costs to China. It planned to select a new shortlist for East and West Tsankhi, combined in November 2014, with the expectation that a Mongolian operator would hold a 51% stake.
While Peabody Energy had been a frontrunner for a foreign-owned partner consortium, the bid was ultimately awarded to China’s Shenhua, a competitor of fellow state-owned Chalco; Japan’s Sumitomo Corporation; and Mongolia’s Energy Resources in December 2014. Although the deal has not yet been signed, the state’s bid conditions include majority Mongolian ownership, construction of a railway to China, a reported $4bn in investment and annual production of 30m tonnes of washed coal, to be delivered to at least two export markets. The consortium also will be responsible for resolving the outstanding Chalco debt.
In total, ETT projects an $893m investment in a new power plant and $650m for the 267-km railway, while a dry washing plant with 30m tonnes of annual capacity would require significant investment in water supply. The deep-pocketed Shenhua is a key developer of train lines linking Inner Mongolia to Eastern China, and signed a 20-year memorandum of understanding with the three TT operators in October 2013 for 50m tonnes of coal per year and the construction of a railway from Mongolia’s Gashuun Sukhait border point to China’s Ganqimaodu (Gants-Mod) port.
A number of coal-to-gas and liquids projects are also in the pipeline, backed by Mongolian miners MCS and MAK, as well as foreign investors such as Sinopec, which could lead to significantly higher margins on exports to China if completed (see Energy chapter).
Developing rail to transport coal is crucial for improving the terms of trade for Mongolian coal: the $20-per-tonne cost to the border by truck is roughly twice that of shipping from Australia. Most coal mines still sell to traders at mine mouth, discounting for transport costs, as well as the 10% import tax on Mongolian coal and 17% Chinese value-added tax.
Although MMC completed a $90m paved road from TT to Gashuun Sukhait in 2011, small TT and ETT exports continued on unpaved tracks to avoid the $2.4 per tonne toll for the 250-km road until the state purchased it in August 2013. Although the road helped reduce MMC’s transport costs by 12% to $8.8 per tonne, the cost of the 20-km cross-border trucking remains as high as the 250-km journey from TT. However, in April 2015 producers at the TT deposit agreed to exclusively use the paved road for a fee of $1 per tonne.
ETT estimates that the roughly 1000 trucks it uses account for 40% of its total cost per tonne. SouthGobi Resources completed a second paved 45-km road linking mines at Ovoot Tolgoi to the border at Shivee Khuren in September 2014, under a 15-year concession. The road will be open to other miners in the area, including MAK and Guildford Coal’s Terra Energy, at a cost of approximately $80 per truck.
Rail to the Rescue
Paved roads are an interim measure, however, with several rail projects at various stages of development. The Gashuun Sukhait Railway consortium of Shenhua, ETT, MMC and small TT (in a 49:17:17:17 split) expects to complete the $200m, 18-km border crossing from Gashuun Sukhait to GantsMod by the third quarter of 2015. The crossing will reduce Customs clearance from three days to three hours, expand capacity from 20m to 50m tonnes a year and reduce logistics costs by $3-4 per tonne.
Investment in infrastructure will be key to developing Mongolia’s coal value chain to improve its terms of trade. In June 2010 the State Policy on Railways called for broad gauge for all new projects, though many in the sector advocated for greater flexibility to cater to the Chinese market. “A narrow-gauge railway is crucial to Mongolian coking coal’s competitiveness in the Chinese market,” MAK’s vicepresident, N. Tselmuun, told OBG.
The question of rail gauge – the narrow gauge of China, Mongolia’s main export market, or the wider Russian gauge of the existing Trans-Mongolian line – delayed construction of the 225-km line from TT to Gashuun Sukhait. State-owned rail operator Mongolian Railway (MTZ) awarded the engineering, procurement and construction contract for the $650m project to South Korea’s second-largest construction firm, Samsung C&T Corporation, in May 2013 and expects coal transport costs to fall to $8 per tonne upon completion in 2017. While the groundwork and terracing have been completed, MTZ’s funding capacity remains tied to DBM.
In a watershed moment for the sector, the Parliament voted in October 2014 to allow for two lines fully within Mongolia to be narrow gauge – the Tavan TolgoiGashuun Sukhait and Khuut-Bichigt lines. Upon completion, the lines could help to lower the cost of shipping coal to China by another $2 per tonne.
Planned upgrades to the existing joint Russian-owned Trans-Mongolian Railway will also be crucial to the viability of coalmines in the north. While Prophecy Coal exports to Russia from its Ulaan Ovoo mine through the northern Sukhbaatar rail line, sales remain low at around 5000 tonnes monthly. Expanding the railway’s 20mtonne installed capacity will be key to diversifying export markets. During a visit by the Russian president, Vladimir Putin, to Mongolia in September 2014, Russian Railways, the partner in the Trans-Mongolian Railway, agreed to double-track the existing line and potentially electrify it to boost throughput to an initial 34m tonnes, and then 100m tonnes at a later stage. This would be crucial for Aspire Mining’s 255m-tonne Ovoot blending coking coal deposit, which depends on the construction of a 547-km line to Erdenet for its production starting in 2017, which is planned to expand from 5m tonnes per year to a peak of 12m tonnes annually.
In November 2014 Aspire concluded a framework agreement with China Railways 20 Bureau Group Corporation (CR20G) for the engineering work on the line, as well as the basis for negotiations for a turnkey contract down the line. CR20G will also help to source project financing. In early 2015 the first stage of the rail feasibility study was under way, with preliminary work already started on the first 250 km of maps.
Exports of copper, far less constrained by infrastructure, are growing by roughly 30% per year, as OT overtakes Erdenet’s traditional dominance. Exploration activity is the most active on copper licences: underground drilling has revealed promising results at Turquoise Hill’s Ovoot Hyar and Bronze Fox near the OT copper belt, Erdene Resource Development’s Khuvyn Khar and Xanadu Mines’ Hutag Uul. Overcoming tight credit markets, Erdene struck an original partnership with Canada’s Teck Resources, selling it equity and partnering on its copper exploration while keeping its gold prospecting at Altan Nar separate.
Kincora Copper, whose main asset is the proven copper deposit Bronze Fox, had two of its licences for Tourmaline Hills and North Fox suspended by a court order in 2013; however, these were reissued with a full 12-year term in early 2015. Another junior exploration firm, Xanadu Mines, saw its share price quadruple in early 2014 when, having cancelled a coal project with Noble Group, it reported substantial copper discoveries at its south-eastern Kharmagtai licence.
Meanwhile, MAK’s 240m-tonne Tsagaan Suvarga deposit, 220 km from the rail link at Sainshand, will be key to boosting output. It was part of the 15 strategic deposits identified in May 2014, for which the state is prohibited from exercising its minimum stake. “The government’s tight financial position has hindered its ability to exercise its equity rights in strategic deposits, which was evident when parliament barred the state from taking a 34% stake in Tsagaan Suvarga,” T. Naran, the Mongolian Coal Association’s executive director, said.
MAK expects its copper concentrator to produce some 312,000 tonnes of copper in concentrate per year – roughly 70% of Erdenet’s output – when it begins operations in May 2017. “We expect a global deficit in copper supplies from 2017 onwards, which should lead to rising prices just as our Tsagaan Suvarga mine comes on-line,” Tselmuun told OBG. French bank BNP Paribas has been contracted to reach financial close on the $1bn project finance by the second quarter of 2015.
While gold output remains below its 2009 peak, the government has supported the segment directly to counteract the effects of the 2009 Long Name Law, which banned mining within 200 metres of rivers and forests. With production at Mongolia’s only hard-rock gold mine, Centerra Gold’s Boroo Gold, having processed its last leach heap of 178,000 oz in 2014, the ban on alluvial mining cut the dominant form of gold production. While output has rebounded from 200,000 oz in 2012 to nearly 315,000 oz in 2013 – with OT producing 598,000 oz of gold in concentrates in 2014 – the government wants to support smaller mines. In the January 2014 amendment to the 2006 Minerals Law parliament replaced the 5% royalty on gold and the sliding scale of 0-5% surtax depending on prices with a flat 2.5% royalty on gold sold to the Bank of Mongolia (BOM) in a bid to bolster reserves. While the BOM has increased domestic gold purchases from 4.5 tonnes in 2013 to 10 tonnes in 2014, it also channelled soft loans of MNT200bn ($120m) through Golomt Bank and the Trade and Development Bank of Mongolia in 2014.
Although the 2009 Long Name Law stalled development of the country’s largest hard-rock gold project – Centerra’s Gatsuurt deposit, with some 1.5m oz of recoverable gold – the government was trying to expedite matters. The Canadian gold miner lobbied for Gatsuurt to be added to the list of strategic deposits, which are exempt from the Long Name Law. With the amended Minerals Law giving it discretionary powers to add and subtract from the list, the government labelled Gatsuurt a strategic deposit in September 2014 and exercised a reduced 20% stake, clearing the way for the 110,000-oz-per-year mine to proceed.
Achieving a delicate balance between participating in projects and enabling private investment will be integral to commercialising strategic deposits, as well as building much-needed infrastructure. While investment is flowing to copper and gold, rising production of iron ore, fluorspar and specialised minerals such as uranium and rare earths will help to diversify output in the coming decade. “A considerable number of foreign mining supply companies have left the market in the past few years,” Glenn Betts, director of sector servicing firm Global Welding Mongolia, told OBG. “That said, there is still significant potential in Mongolia if companies are able to ride out the downturn, especially if the issues surrounding OT’s second phase are resolved.” Despite recent delays, the government has made concerted efforts to rebuild investor confidence and expedite development of large projects, to the benefit of both the sector and wider economy.
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