Prime Minister's Working Visit to Countryside Continues

2023-09-19 13:25:54

Ulaanbaatar, September 19, 2023 /MONTSAME/.The Prime Minister of Mongolia Oyun-Erdene Luvsannamsrai continues his working visit in provinces. The Prime Minister is working in Arkhangai aimag after visiting Dundgobi, Gobi-Sumber, Selenge and Darkhan-Uul aimags to oversee operations of public organizations and state-owned companies as well as implementation process of new projects.

In Arkhangai aimag Prime Minister Oyun-Erdene got acquainted with the construction process of a new 300-bed general hospital in the aimag center. The new hospital building that meets the requirements of modern medical standards, consisting of eight blocks, including an ambulatory, an inpatient unit, an oxygen plant and diesel station, is being built at a cost of MNT 25.2 billion from the state budget. Currently, the construction is 85 percent complete.


The Aimag General Hospital was put into operation in 1979 and has a capacity of 160 beds, but now it provides referral level health care services with more than 200 beds. The aimag authorities have developed a project to turn the old building of the general hospital into a Nursing training, research, health care and service complex, which is estimated MNT 19.2 billion is needed.

During his visit to Darkhan-Uul aimag, the Prime Minister visited the Darkhan Metallurgical Plant. Established in 1990 to use iron ore deposits in the Darkhan-Selenge region, the Plant processes iron ore of the Tumurtolgoi iron ore deposit, having established an open-pit mine. The Darkhan Metallurgical Plant annually produces 100,000 tons of steel products and 2.5 million tons of iron ore concentrate, supplying both domestic and international markets.

In 2014, QSC LLC established a concession agreement with the Ministry of Economy and Development for a mining and metallurgical complex project. However, on April 13, 2022, the Government, canceled the agreement due to the company's failure to meet its obligations. During the implementation of the concession agreement for the mining and metallurgical complex construction, the production process faced disruptions. This was due to the concessionaires' failure to maintain the plant's technology and machinery, as well as discontinuing the procurement of spare parts and inventory.

Following the government decision, the plant was returned to state ownership and underwent management reform. G. Dugarjav, the Executive Director of the Darkhan Metallurgical Plant reported that the Plant had a loss of MNT 9.6 billion in April 2022 but thanks to the management reform, it has achieved a net profit of MNT 17.3 billion in 2023. This year the plant has contributed MNT 15.2 billion to the state budget, of which MNT 13 billion to the Darkhan-Uul Aimag budget.

Prime Minister L. Oyun-Erdene directed the Minister of Finance to address the damages incurred by the plant due to QSC. He underscored the significance of the Darkhan Metallurgical Plant becoming the cornerstone of steel production in Mongolia. Moreover, the Prime Minister instructed relevant officials to enhance the plant's capacity to meet domestic market demands.

There is a plan to construct a steel processing complex centered around the Darkhan Metallurgical Plant in three phases, with the goal of having it operational by 2027. Based on an analysis of the demand and supply of steel products, Mongolia's annual demand in 2023 stands at approximately 500-600 thousand tons, with projections of surpassing 1 million tons by 2027.

Prime Minister L. Oyun-Erdene of Mongolia Shivee-Ovoo JSC operations in Gobisumber aimag. The Shivee-Ovoo coal mine is particularly noteworthy, suplying 30 percent of Mongolia's energy coal demands, boasting a 2.7 billion tons of coal reserves. With an annual production and sale of two million tons of coal, Shivee-Ovoo JSC makes a significant contribution to the budget revenue of Gobisumber aimag, representing 83 percent of it. In the previous fiscal year, the company achieved outstanding sales figures, totaling MNT 67.5 billion.

The company sells one ton of coal to power plants for only MNT 39,000 MNT, which is lower than its mining cost of MNT 45,000. Consequently, Shivee-Ovoo JSC is operating at a deficit. In the past year, it operated at a loss of MNT 18.6 billion, and this year's loss has already reached MNT 15 billion.

Prime Minister L. Oyun-Erdene issued directives to address the company's financial losses. The construction of a 200 MW power plant based on the Shivee-Ovoo coal mine was proposed and the Prime Minister instructed to conduct the feasibility study for it.

In addition to its current supply to thermal power plants Shivee-Ovoo JSC has a potential for exporting coal. S. Narantsogt, the Director of Erdenes Mongol stated that they are studying export opportunities.

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