mongolia - signet.org.uk · history • mongolia established 8oo yrs ago – genghis khan •...
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““I’d strongly recommend that I’d strongly recommend that really adventurous investors really adventurous investors
keep a beady eye on Mongolia keep a beady eye on Mongolia this year.”this year.”
David Stevenson, FT, February 2011David Stevenson, FT, February 2011
MONGOLIAMONGOLIA
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Mongolia
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MongoliaMongolia
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OverviewOverview
• 5th Largest country in Asia• 6 times land area of UK• Population 2.9 m, 1 m in Ulaanbaatar
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HistoryHistory
• Mongolia established 8oo yrs ago – Genghis Khan
• 1921-1990: Communist state
• 1992-present: Democracy. 1st Multi-party elections
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Economic GrowthEconomic Growth
• Mongolia is on the verge of extraordinary economic growth that will make it the richest country per person in Asia by the end of the decade.
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GDP forecast to grow 10x to GDP forecast to grow 10x to $60 billion by 2025$60 billion by 2025
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GrowthGrowth
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Stock ExchangeStock Exchange
• 2006. MSE was the smallest exchange by market capitalisation
• 2008-2010. Market capitalisation doubled
• 2010 Impressive year – best performing equity market globally. Increased by 138%
• Still retains the title this year (March 2010)
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Stock ExchangeStock Exchange
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Official Currency – TugrikOfficial Currency – Tugrik
• Worlds best performing currency in 2010 after the Australian dollar
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3 Major Sectors of the 3 Major Sectors of the Mongolian EconomyMongolian Economy
MiningMining
Agro IndustryAgro Industry
TourismTourism
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Mining RegionsMining Regions
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MiningMining• Mongolia is a ‘MAJOR’ mining frontier• Mineral assets and reserves estimated at
$1.3 trillion• Exports include:
– Coal– Copper– Gold– Potash– Iron ore– Uranium– Rare earths
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Tavan TolgoiTavan Tolgoi
• One of the worlds largest untapped reserves of Coking Coal
• Estimated at 6.5 billion tonnes
• 2nd largest coalfield in the world
• State company
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CoalCoal
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Oyu Tolgoi Copper/Gold MineOyu Tolgoi Copper/Gold Mine
http://www.youtube.com/watch?v=zFCFRMjt5Xg&feature=youtu.be
5-minute video – leads to further Mongolia mining videos
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Petro MatadPetro Matad
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Forecast OutputForecast Output
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Rare Earth Elements – Rare Earth Elements – Not so Rare in MongoliaNot so Rare in Mongolia
• Japanese and Mongolian Governments plan to jointly explore Mongolia’s large deposits of REEs
• Mongolia has 16.7% of world total Scandium
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Infrastructure DevelopmentInfrastructure Development
• Less than 4% of roads are paved
• Sovereign Bonds to be issued by autumn to develop roads/railway
• Population density makes road development expensive
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Agro IndustryAgro Industry
• Mainly a Livestock raising country with extensive grassland.
• Very little scope for vegetable food production
• Mongolia has 40 million livestock, comprising sheep, goats, horses, cattle and camels.
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Mongolia produces a third Mongolia produces a third of the world’s Cashmereof the world’s Cashmere
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CashmereCashmere
• Worlds finest cashmere comes from Mongolia
• The higher the altitude the finer the raw material
• Each goat produces an average of 141 grams of wool
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TourismTourism• Tourism accounted for 18% of GDP in 2006
• Hot Springs and Spa developments
• Approximately 500 Expatriates live in Mongolia
• Within a decade, this is expected to increase to over 5000
• International brands are now opening up operations in Ulaanbaatar
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ConclusionConclusion
• Long term economic prospects are bright• Near term clouded by spending pressure• Vulnerable to global commodity prices• Gross debt currently 43% of GDP –
expected to fall to 20% by 2015• Severe winter (“zud”) of 2010/11 killed a
large number of livestock
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AcknowledgementsAcknowledgements
• Some of the information in this presentation is borrowed from Eurasia Capital LLC (www.eurasiac.com)
• You are recommended to visit their web site to update and pursue your research
Susan Burton, Oxford SIGnet Group