1 / 18

Ministry of Road, Transportation, Construction and Urban Development of Mongolia

Capitalizing on Mongolia’s mineral resources as key engine for infrastructure development and economic growth May 2010 • Beijing.

sorley
Download Presentation

Ministry of Road, Transportation, Construction and Urban Development of Mongolia

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Capitalizing on Mongolia’s mineral resources as key engine for infrastructure development and economic growth May 2010 • Beijing Mongolia’s Ministry of Road, Transportation, Construction and Urban Development prepared this presentation according to resolution decree # 68 issued by the Prime Minister of Mongolia on July 8, 2009, as well as National Development Strategy, endorsed on January 31, 2008 by resolution 12 of Parliament of Mongolia. Ministry of Road, Transportation, Construction and Urban Development of Mongolia

  2. 2

  3. 12% 10% 8% Per capita income (US$) 6% Real GDP (% chg.) Real GDP per capita (% chg.) 4% General government balance (% of GDP) General government gross debt (% of GDP) 2% General government net debt (% of GDP) Gen. gov. interest expenditure/gen. gov. revenue (%) 0% Dom. credit to private sector and NFPEs* (% of GDP) Mongolia "BB" Median Ukraine Philippines Indonesia Nigeria Venezuela CPI inflation (average % chg) Five-year average 2002-2006 2007 forecast Mongolia has a comparative advantage in natural resources and is looking to transform it to a competitive advantage Major Rating Factors (1) Strengths Weaknesses • Improved growth prospects on the back of a burgeoning mining sector • Strong donor country and multilateral support • A comparatively stable political environment for this rating category • Vulnerabilities inherent in a small, undeveloped, primarily commodity-based, low-income economy • High degree of financial sector vulnerabilities as a result of ongoing robust credit growth, relatively high level of past-due loans, and the need for continued improvement in banking supervision S&P Rating Detail (December 19, 2008) (1) Mongolia Sovereign Credit Rating BB-/Stable/B Sovereign Credit Ratings History Real GDP per capita growth comparison In % • Economic Prospects • A heavy reliance on commodity exports, inadequate infrastructure, and vulnerability to high energy prices, preclude stable, broad-based growth • Continued delays in negotiating new mineral investments point to challenges ahead • High minerals prices, vast copper and coal potential, and increased tourism make medium-term growth prospects robust 24-Dec-07 BB-/Stable/B 22-Dec-06 B+/Positive/B 28-Dec-05 B/Positive/B Mongolia Select Statistics (1) ‘BB’ Median 2007f 2007f 2,931.0 1,588.0 6.2 9.0 5.1 8.2 (1.2) (0.7) 38.4 36.3 31.8 22.3 8.6 1.4 na 35.3 6.2 7.5 f - Forecast (1) Standard & Poor’s Research: Mongolia, December 19, 2008 revision

  4. Mongolia is a country of contentment with vast lands, abundant natural resources, admirable history, and glorious future. We, Mongols, shall respect our history and culture, have our national dignity, be highly educated and confident in ourselves so as to realize our desires and aspirations, live comfortable, prosperous and contented lives in our homeland. Mongolia’s development is a guarantee of its security and independence. The root source of its development lies in the national unity. 2007 ­ 2015 period 2007 ­ 2015 2016 – 2021 period • Synchronize EGSPR with NDS • Increase jobs (unemployment rate at max 3%) • Create a nation-wide database • Provide economic incentives for new jobs • Enhance coordination for poverty reduction • Create a sovereign wealth fund • Reduce poverty GDP growth: 14% GDP per capita: $5,000 GDP growth: 12% GDP per capita: $12,000 Millennium Development Goals based Comprehensive National Development Strategy of Mongolia National Development Strategy of Mongolia National Development Strategy (NDS) of Mongolia* Vision Strategy Goals Mongolia successfully developed its economic growth vision and now it is working on the process on how to achieve these targets * Parliament of Mongolia resolution 12 dated Jan. 31, 2008 endorsing National Development Strategy of Mongolia

  5. Mongolia’s National Development Strategy objectives in perspective with other Asian advanced and developing countries $40,000 35,000 30,000 25,000 20,000 15,000 2021 Objectives: GDP per capita $12,000 10,000 2015 Objectives: GDP per capita $5,000 5,000 0 Fiji Laos India Nepal China Korea Japan Tonga Brunei Kiribati Samoa Bhutan Taiwan Vietnam Vanuatu Pakistan Thailand Maldives Malaysia Mongolia Myanmar Sri Lanka Indonesia Cambodia Singapore Papua NG Philippines Hong Kong Afghanistan Bangladesh Timor-Leste Solomon Isd Achievement of the National Development Strategy would place Mongolia into one of the key economic powers in the regions * International Monetary Fund, World Economic Outlook Database, October 2009

  6. Production Deposit name Minerals Mine Life Capacity Tavan Tolgoi Coal 200+ 15,000-20,000 Ukhaa Khudag Coal 40 10,000 Baruun Naran Coal 20 6,000-10,000 Tsagaan Tolgoi Coal 20 2,000 Highlights of Mining Deposits in Southern Mongolia Nariin Sukhait Coal 40 2,000-4,000 Ovoot Tolgoi Coal 50 14,000 Sumber Coal 50 5,000 Ouy Tolgoi Copper 50 2,000 Tsagaan Suvraga Copper 20 250 Source: Southern Mongolia Infrastructure Strategy, World Bank, 4/2009 Mongolia has some of the largest undeveloped reserves in the world – a comparative advantage for long term growth As mine life could be as high as 200+ years, Mongolia needs to have a long-term development view Source: The Boston Consulting Group, Erdenes MGL LLC

  7. Coal Deposits 1) The minerals study prepared by Mr. Odkhuu, D., a Member of Parliament, lead group of geologists from Geosan LLC, Mongolia. A new railway infrastructure planning should consider linking all mineral deposits of Mongolia(1) Precious Metals Deposits Copper Deposits Oil Deposits

  8. Although China is the main market for Mongolian commodities, other alternative markets, such as Japan, Korea, India, exist Source: The Boston Consulting Group, Railway infrastructure development strategy for Mongolia, October 16, 2009

  9. Objectives National Development Strategy 2007-2021 Cabinet resolutions: R#68 – Natural resources supply forward contract arrangement for building industrial facilities. M#52 – Establishment of industrial park in Sainshand or Choir. In order to achieve its NDS objectives, Mongolia is facing a choice between an extractive versus industrial economy How to achieve NDS goals? Outcome Extractive economy Industrial economy Becoming one of the key economies in the region vs. Mongolia has clearly chosen an industrial path, which requires significant capital investments. However, due to complexity of the task, Mongolia needs help with an investment Master Plan.

  10. In consideration of 4 key principles of industrialization proposed by BCG and all potential locations for an industrial park, Mongolia is tending to choose Sainshand for establishment of the industrial park Source: The Boston Consulting Group, Railway infrastructure development strategy for Mongolia, October 16, 2009

  11. The industrial park in Sainshand would provide basis for further economic diversification of Mongolia Source: The Boston Consulting Group, Railway infrastructure development strategy for Mongolia, October 16, 2009

  12. Building of a new and modernization of an existing railway network would play a vital role in the achievement of the NDS objectives Source: Ministry of Road, Transportation, Construction and Urban Development of Mongolia

  13. Existing and planned regional rail routes would enable Mongolia access to the main and alternative markets for commodities

  14. Mongolia would need totally about $14 bln in investments, of which $8.3 bln are in Sainshand industrial park, excluding highways Source: The Boston Consulting Group, Railway infrastructure development strategy for Mongolia, October 16, 2009

  15. Government Task Force Team Global Project Manager(1) Railway EPC(M) contractors Industrial EPC(M) contractors Coke Plant Met. Facilities Coal Chemical Facilities Copper Smeling Power Plants 1) Bechtel and Fluor have expressed interest in the Global Project Manager’s role. US Eximbank formally issued a letter of interest to support project development activities of these companies. Due to complexity and inter-relation of railway and industrial facilities, the Government will retain local and international advisors to provide an integrated solution for implementation of these projects • The Task Force Team will engage alongside with the Project Manager: • Local advisor • International and local counsel • Financial advisor • Technical advisors

  16. According to BCG’s socioeconomic impact for building railways and Sainshand industrial park… 1 3 2 4 Source: The Boston Consulting Group, Railway infrastructure development strategy for Mongolia, October 16, 2009

  17. BCG estimates that industrialization would bring $41 bln to Mongolian GDP over 11 years compared to $28 bln on extraction and exports option Source: The Boston Consulting Group, Railway infrastructure development strategy for Mongolia, October 16, 2009

  18. Contact address, telephone:Ministry of Road, Transportation, Construction and Urban Development of MongoliaInvestment Task Force TeamGovernment Building XIIBarilgachdyn TalbaiUlaanbaatar, MongoliaTelephone: 976-51-263319Fax: 976-11-329190 Ministry of Road, Transportation, Construction and Urban Development of Mongolia 18

More Related