Opportunity opens for Mongolian coal to trade at global prices

Press and Public Relations Department of President

2017-09-07 13:05 GMT+8

ULAANBAATAR (GoGo Mongolia) - On September 6, Mongolia's President Kh.Battulga addressed the opening of a Mongolia-Russia Business Forum which took place in frames of the Economic Forum Eastern Economic Forum (EEF) in Vladivostok, Russia.

The Forum was attended by some 150 officials, such as D.Ganbat, Mongolian Minister of Road and Transportation Development, B.Delgermaa, Ambassador Extraordinary and Plenipotentiary of Mongolia to the Russian Federation, Z.Enkhbold, Chief of Staff of the Office of the President; B.Battsetseg, Vice Minister of Foreign Affairs, I.Ye.Levitin, Envoy of the Russian President, S.Donskoy, Russian Minister of Natural Resources and Ecology, I.K.Azizov, Ambassador Extraordinary and Plenipotentiary of the Russian Federation to Mongolia, and O.V.Belozyorov, President of Russian Railways JSC.

Beginning his remarks, the President of Mongolia expressed thanks to participants of the Forum which aimed at promoting products and services of Mongolian and Russian producers, exporters and businessmen, and underlined the Forum’s importance for boosting bilateral relations and increasing investment and trade. He pointed out that Mongolia endeavors to seek environmentally-friendly and sustainable development cherish its open political system, embrace responsible governance, create a multi-pillar system for the national economy, and further develop its infrastructure. Mongolia aims to maintain friendly cooperation in all fields with its two eternal neighbors, he added.

The President said that the private sector accounts for over 80 percent of the Mongolian Gross Domestic Product (GDP) and has become the driving force for the nation's economy. 

“The tax rate has stood at the lowest level among Asia-Pacific countries thanks to supporting foreign investors in all economic sectors. For instance, the customs tax stands at 5 percent, VAT--10 percent and income tax for enterprises range from 10 to 25 percent” the President said. 

“During the 1990s, I had experience and close cooperation with Russian businessmen when I engaged in small businesses during the economic transition period of Mongolia. When I was elected Parliamentarian three times and served as a government member twice, I focused great attention on agriculture and infrastructure. As we know, the Erdenet Mining Corporation was jointly built by our countries. The factory still gives profits to the Mongolian economy thanks to good fundamentals of feasibilities and preparation of staff. Likewise, I want to establish a joint enterprise in Sainshand, Dornogobi, like Erdenet Corporation. My idea is to build the entity and process minerals rather than export them raw” Battulga said.

“Mongolia has almost 70 million head of livestock. We export 10-15 million leather hides a year without VAT. I want herders to have a more fruitful business when the agricultural raw materials are processed,” he said, and then forwarded a proposal for businessmen to boost cooperation in agriculture which it has stagnated for over 20 years. 

Talking about his tour to Vostochny port, the President emphasized that he saw an opportunity to sell Mongolian coal in East Asia. The trade of coal transported from Khakas comes from a longer distance than that in Mongolia, he said.

“I and my delegates witnessed a chance to sell our coal at world standard prices. We need infrastructure in order to export our coal overseas. In this regard, we have presented the Russian Minister of Transportation with a proposal to construct a 458 km railway in the route from Tavantolgoi to Sainshand within a project on building a 5,000 km of railways. The Russian Minister positively accepted our proposal” Battulga said. He added that another project on infrastructure has been presented to the neighboring countries.

“According to statistics, the trade turnover between Mongolia and Russia reached USD 705.3 million in first seven months of 2017, an increase of 46.8 percent compared to the same period of the previous year. The size of Mongolian export to Russia was USD 33.4 million, showing an increase of 8.5 percent. The import from Russia was USD 671.9 million indicating an increase of 49.5 percent. Although trade turnover increased, the figures are still not enough for the countries bordering on lands for about 4,000 km” the President said.

The President said he also put forward a proposal to establish a free trade agreement with countries of the Eurasian Economic Union (EEU) in order to maximize trade turnover with Russia and abolish tariffs and non-tariff obstacles.

Mr. Battulga believes that setting-up an economic corridor for Mongolia,
Russia, and China, will contribute to economic development of the Far East and improve the infrastructure environment. He also underlined the importance of the EEF for Mongolian and Russian producers, exporters and businessmen for promoting their services and products, establishing business ties and settling negotiations. 

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