Polaris solar PV net news: at present, Mongolia is rich in coal, oil, copper and other mineral energy and infrastructure projects, has attracted more than 7,000 Chinese enterprises into the covered investment. Along with in-depth exchange of high-level visits, all kinds of good news, so that more companies will eye to Mongolia. However, because there are differences between Sino-Mongolian cultural environment, legal policy-changing series of investment risk, and a crisis of confidence, affected some Chinese enterprises ‘ investment and business activities in Mongolia, making extremely cautious investment in Mongolia.
From reality situation view, restricted Mongolia export growth of factors, both external global bulk mineral resources supply excess, and to China for representative of abroad market needs sharply slowed, objective factors, also has Mongolia export market single, and based facilities weak, and external investment policy legal not stable, and investment environment poor, and environmental policy strictly, and currency fluctuations big, and place privileges more serious, internal factors, its which is led to many China enterprise in cast investment frustrated of important causes.
Because of China’s geographical advantages, coupled with strong industrial structure relationship between Mongolia and China, along with the determination of the bilateral all-round strategic cooperation relationship in August 2014, more broad prospects for Sino-Mongolian trade development and set the year 2020-Mongolia bilateral trade target of 10 billion dollars. It is not difficult to find, the two sides still have much room for cooperation.
Integrated view, we think, in the cast energy mineral of investment development and bilateral trade, is entered new of strategy opportunities period, Mongolia coal and the nonferrous metals mineral resources development, and coal chemical market, and power market, and wind and the solar, clean energy and based facilities construction, will will is future five years Mongolia investment of focus field and direction, and energy mineral of directly export and local conversion utilization will is future Mongolia energy development of new form.
And rich energy resources in Mongolia market
Mongolia is a major energy resources, its reserves of the world’s top 20. Has been found in the country and has identified more than 80 types of energy resources, mainly coal, oil, copper, tungsten, aluminum and other mineral resources. At present, there are more than more than more than 800 mines and more than 8,000 mining points. According to the Mongolia country Department of energy statistics, its geological prediction of 173.3 billion tons of coal reserves, exploration and 23.5 billion tons of reserves, recoverable reserves total about 21 billion tons. To that end, Mongolia called the “coal industry in Saudi Arabia.”
Coal distribution, Eastern Mongolia as much as brown coal, the central area for brown coal into coking coal stage, and desert areas in Western China for coking coal and bituminous coal. 80% of coking coal in the South Gobi region of Mongolia, and half the coal concentration in tabentaole cover mine in the South Gobi. Mongolia 99% coal mine open pit, great development potential and lower development costs.
Mongolia’s tabentaole cover outfit of the mine is the world’s biggest untapped coking coal fields, mining the coal storage area of 400 square kilometers, seam thickness of 190 m, 16-story, the coal mine belongs to high quality coking coal, coal coke rate of more than 60%, is more hot coals in the world. Meanwhile, Mongolia’s high grade iron ore, iron content of above 35%, mining of higher value, abundant. The country mainly coloured cord and kelulun ores two ore belt of the ore zone. In addition, Mongolia has substantial amounts of copper, gold, silver, lead, zinc and other resources.
In the second, the energy analysis of trade development
For years, China has been Mongolia’s largest trading partner and its largest foreign investor. Sino-Mongolian economic and trade scale between 20 and 50 times times. Figures show that in 1994, Sino-Mongolian bilateral trade only 120 million dollars by the year 2013, trade between the two countries has risen to us $ 6 billion, accounting for more than half of Mongolia’s total foreign trade volume, the main reason is strong industrial structures of the two countries are highly complementary.
In August this year, the Chinese President after a visit to Mongolia, between the Sino-Mongolian relationship to a comprehensive strategic partnership, in this context, in accordance with financial cooperation in mineral resources development and infrastructure construction, “Trinity, and manpower to promote” General ideas for economic and trade cooperation, set up “in 2020, the bilateral trade volume reached 10 billion dollars” goal, between the Sino-Mongolian economic and trade cooperation will enter a new era.
Coal was the first large Sino-Mongolia trade products, China is also the only Mongolian coal exporter. At present Mongolia is mining and export of coal mine in the South Gobi region, from China’s borders the latest coal mine is only 50 kilometers, only 260 km far. In recent years, the number of China’s Coal imports from Mongolia has revealed an increasing trend as a whole, only 2013 due to falling domestic demand and falling coal prices the exception.
Previously, the Mongolian Government had been trying to get rid of over-reliance on coal exports to China’s situation, tried to open up Japan and the Korea and Taiwan markets, but because of the limited port capacity for customs clearance and other conditions, at present Mongolia’s coal cannot transit the Chinese exports to Japan and other countries. Mongolia is developing measures to actively promote the strengthening of customs clearance capacity, including the construction of a coal mine to tabentaole cover of bayannur city of Inner Mongolia, China railway, which changed the way Mongolian coal entirely dependent on automobile transport, and to reduce the rigidity of the coal enterprise cost.
Third, investment in Mongolia’s policy legal issues
1. Mongolia’s foreign investment laws
At present, about more than more than 7,000 Chinese enterprises to invest in Mongolia, but most of the investments in these companies fail for various reasons, very few succeed. The reason is mainly because most of the Chinese companies, especially private enterprises ‘ subjective awareness of the law is not strong, the detailed legal policy of Mongolia is not known, breach, or partner cheat, fraud, investment programs illegal, unregulated, make investments lost protection, can easily lead to failed investments.
In terms of exploration permits and extraction permits to obtain and costs, only the mineral Act made provision for mining and exploration of specific methods of operation but had no relevant laws and regulations, not only has the legal gaps, there’s room for rent, need to improve the legal system so that more rigorous policies and regulations.
2, Mongolian labor employment system
In recent years, investment projects by Chinese companies in Mongolia increased investment fever running high, especially in the field of energy demand for service workers has been increased. Mongolia labor labor system by national of labor law, and labor output and labor and the technicians entered method, and foreign citizens status method, and mineral resources method, related labor policy, and legal regulations composition, and has competent Labor Affairs of Government central organ or its authorized institutions, and capital, and province, and District Government Office, and related judicial organ on this method of implementation exercise supervision right.
Chinese companies in the development, production, management, transportation and other sectors, requiring levels of a number of senior technical workers, but Mongolia’s domestic service workers lack. China labor resources rich, based quality good, in the enterprises in operation China labor workers into cast for legitimate workers Shi, to faced Mongolia of some policy, and legal regulations of restricted, makes human resources configuration cannot reached optimal of, effects has enterprise in Mongolia of investment progress, also some China citizens through applications tourism visa, and business visa long-term illegal stranded, in Mongolia for illegal of labor work, arrears wage, and labor fraud phenomenon serious, itself of interests cannot get legal of guarantees, Companies using illegal workers will be severely punished according to law in Mongolia, and direct impact on enterprises engaged in production, causing irreparable damage.
3, Mongolia’s tax and fee system
Mongolia’s tax by the State tax and local tax consists of two parts. National tax is refers to by national big call pulled,, and Government determines tax and in national range within General Executive of tax, including enterprise and institutions income tax, and tariff, and VAT, and mineral resources tax,; place tax is refers to province, and capital citizens representative call pulled, determines tax and in this area range within Executive of tax, including personal income tax, and stamp duty, and car transport and the other transport tax, and General mineral using fee, and land using fee,. Great Hural develop, change and cancellation of tax according to law. Taxes authorized by the Great Hural and the meeting of representatives of Government, the provinces and the capital, citizens shall be determined separately.
4, Mongolia energy resources in land use system
The Mongolian Lands Act provides that land owned by the national citizens and the Government. Over the age of 18 and 18 per cent of the citizens of Mongolia, Mongolia’s company, with the help of foreign organizations, in accordance with this power of the legal right to possess or use land. Foreign citizens, foreign organizations, foreign companies can enjoy Mongolian land-use rights. In Mongolia, the State, citizens and legal entities can be used for all human, can transfer their power to others, which can be determined according to all the purposes, objectives and regulations, is entitled to possess, use and dispose of powers.
Four, 2015-2020 Mongolia energy investment forecasts, and recommendations
According to this year August signed of in the cast on established full strategy partners relationship of joint, both will in in the cast energy mineral and interconnected Interworking Cooperation Committee and bilateral other mechanism framework within, accelerated promoted in the cast both in railway, and highway, and port, and car manufacturing, and light, and real estate, based facilities and iron ore, and copper, and coal, and oil, and power, and chemical, mine can resources big project industry of investment cooperation, full upgrade in the cast pragmatic cooperation of scale, and quality and level. In this regard, we propose the following 6-point forecasts and recommendations:
1, coal resource exploitation is the investment of choice. “Trinity, and manpower to promote” General ideas for economic and trade cooperation in the exploitation of mineral resources in the first place, and coal is Mongolia’s largest resource, is also the country’s largest commodities exported. In the medium-and long-term development of the Sino-Mongolian strategic partnership set out in the platform for cooperation, as well as other major projects, enterprises continued to actively develop mutually beneficial cooperation of the two countries. Tabentaole cover outfit of the mine is the world’s biggest untapped coking coal fields, mining the coal storage area of 400 square kilometers, is also Mongolia’s Government to attract more foreign investment, “chip”. Future investment by Chinese companies in Mongolia, coal is still the preferred direction.
2, the Chinese market for Mongolia to achieve “mining country” strategy is of great significance. The Sino-Mongolian strategic partnership of medium-and long-term program for the development of mineral resources and energy cooperation in the first article notes that the two sides will continue to deepen Sino-Mongolian cooperation in the field of mineral resources, protect the wood mountain ovoo zinc mine and other existing cooperative projects successfully implemented, actively explore the next medium to large projects. 2014 1 September, Mongolian exports 966,200 tons of copper concentrates, 469,200 tons higher than a year earlier, an increase of 105.5%. 2014 1 September, the Mongolian copper export earnings of nearly $ 1.7 billion, well above the $ 679.7 million a year earlier, an increase of 150%. Coal and iron ore exports due to falling prices decline, exports of copper concentrate by leaps and bounds, returning to Mongolia of export commodities in the first place, beneath the attention of investors.
3, chemical market will be another focus of future investment. Based on the occurrence of local resources, increasing the deep processing of in-place conversion and comprehensive utilization of clean coal and other resources is an important development direction of coal resources in Mongolia in the future, coal chemicals, pithead power plant, coal, natural gas, minerals processing and other fields were key areas for bilateral cooperation in the future.
Long-term strategic partnership development in the Sino-Mongolian explicitly laid out the platform, technology, under economically viable conditions, Sino-Mongolian cooperation between both sides in areas such as coal chemical industry actively. August 2014, the two sides also signed a memorandum of understanding on strengthening cooperation of coal processing. The memo said, China supports the national reputation of large enterprises in accordance with market principle, connecting with self advantages involved in large projects in Mongolia cooperation, and will strengthen cooperation with Mongolia’s high-tech and clean-energy sector.
4, power infrastructure is weak, there is a corresponding market space. In particular Mongolia’s power if the implementation on the Chinese market, demand will rise sharply. Mongolia’s power infrastructure is relatively weak, 878.43 MW installed capacity for electricity generation, and 95.5% for thermal power generation. In 2012, the national power generation 4.816 billion kWh, electricity imports 366 million kWh electricity export 21 million kWh, domestic capacity to 5.161 billion kWh. In 2013, the Mongolian electricity 910 megawatts, exceeding its capacity of 3.59%. Use of abundant coal resources to develop the mine power plant, turning coal into clean energy to power, coal for power transmission, by a net importer of electricity into the electricity exporter, is one of Mongolia’s development direction in the future.
5 and the vigorous development of wind and solar is Mongolia’s important part of renewable energies development plan. At present, Mongolia’s energy consumption, renewable energy accounted for 2%-3% to meet Mongolia’s total by 2020, renewable energy accounts for 20% to 25% goals, apart from the central province of salexite wind farms in addition to also prepare construction of game audio and the mountain wind power plant, and many wind power projects. This shows that wind power development and construction will be Mongolia’s key development areas in the coming years, will also become the focus of foreign investment fields.
Mongolia’s solar potential is very promising. It is estimated that the solar energy resources in Mongolia is about 5 tw, solar power potential ranks third in the world. In recent years, with declining price of photovoltaic equipment, as well as for renewable energy by the Government of Mongolia attached great importance to it. In 2012, the Mongolian Government pushing for “renewable energy project in the Gobi region” building, promoting environment-friendly technology, and to further improve the legal environment for renewable energy investments, hopes solar by 2020 renewable energy production reached 20%-25% per cent of total national energy goals. This means that in the next few years, Mongolia will pay more attention to the development of solar power.
6, investment in infrastructure is an important direction. Due to insufficient investment in Mongolia’s infrastructure is weak, economic development and mineral exploitation has become one of the main bottlenecks. Gap is the space for development and cooperation, so that in the Sino-Mongolian Joint Declaration on establishing a comprehensive strategic partnership, referred specifically to accelerate Sino-Mongolian cooperation on railways, roads, ports and infrastructure, such as real estate investment. Specific to the fields of energy, trade and investment, a transit railway and cross-border railway construction, the second is the infrastructure construction of ports. In addition, urban facilities such as roads, water supply and drainage construction and property development are also areas that need development in Mongolia, for domestic enterprises, is an important investment.
Five, the overall findings and conclusions
First, the energy and mineral resources in areas such as investment, development and trade, will enter a new period of strategic opportunities. Second, direct export and in-place conversion of energy mineral resources comprehensive utilization of Mongolia, will be the new form of future energy development in Mongolia. In the third, limiting energy transportation bottlenecks in trade, are being changed. IV, Mongolia’s official folk, to improve China’s complicated emotions still needed time.
Original title: 2015-2020 Mongolia energy report