BAYARTOGTOKH.BOyu Tolgoi LLC established “Gobi Oyu Development Support Fund” NGO in 2015, and has annually allocated USD 5 million on average for the fund to support local development projects and programs. In this regard, we’ve covered a story on the impact of mega-mining projects on the development, production, services, and the business environment of provinces and localities. The tourist season is beginning as the flow of domestic and foreign tourists grows significantly.
The entire industry went under great difficulty and uncertainty over the last two years due to the pandemic. For tourism to recover and conventional activities to normalize, days of responsibility and business await. The tourism industry is one of the most important sectors of the Mongolian economy. On International Museum Day, a new “product” was introduced in Mongolia this year. The Gobi Museum of Nature and History is opening its doors to tourists traveling from across the continent to see the Mongolian Gobi. A highly meaningful development that is significant for progressing the fields of culture, education, and sciences was completed during the pandemic in Dalanzadgad soum of Umnugovi province, opening its door to the public on May 18, 2022.
The Gobi Oyu Development Support Fund allocated MNT 10.9 billion for the museum, which began construction works in mid-2018. The new museum is fully decorated and equipped with modern museum world standards. The museum has a collection of more than 4,000 exhibits and artifacts in its halls with world-class designs and equipment. There are also ancient and paleontological findings from the Tsakhiurt Valley, Bayanzag, and Tugrugiin Shiree landmarks that proved human civilization in Umnugovi province about 4,500-5,000 years ago, as well as artistic works and samples of blacksmiths and artisans. You can also see ornaments, utensils, religious items, idols, and musical instruments from the Stone, Bronze, and Iron Ages in addition to the unique blacksmith silverwares of the Noyon Sevrei. The Gobi Museum of Nature and History has an annual capacity of receiving over 20,000 visitors.
During the opening ceremony, Oyu Tolgoi’s Director of Mining Operations and Gobi Oyu Development Support Fund’s Chairman of the Board Andrew Wilson said “Local cultural heritage is one of the most important areas of our relationship and cooperation. From the exploration phase of the mine, we have paid special attention to the protection and preservation of local historical and cultural heritage. We hope that this new museum will be a popular destination for children and young tourists committed to the knowledge of the past, as well as a bridge to get to know the Gobi Desert, one of the wonders of our world”. Deputy Minister of Culture Batbayar.M, during the museum’s opening ceremony, said “I would like to express my gratitude for the outstanding development not only in Umnugovi province but also in the field of culture and culture tourism in Mongolia. There is no doubt that we will provide quality services and bring direct benefits to the economy”.
The Governor of Umnugovi province Seddorj.R addressed “the Gobi Museum of Nature and History will allow scholars investing in their knowledge, as well as travelers from all over the world, to visit the prehistoric world. Furthermore, I hope it will make a valuable contribution to promoting the history of Mongolia to the world.” Umnugovi was ranked fourth in the Provincial Competitiveness Report 2021. The Economic Policy and Competitiveness Research Center (EPCRC) has measured 21 provinces on 180 different criteria across four main indicators, namely economic performance, governance efficiency, business efficiency, and infrastructure. EPCRC prepares the list on an annual basis. Orkhon, Umnugovi, Dornogobi, and Darkhan-Uul provinces were ranked the highest in last year’s list. The key factor in these rankings is that these provinces have miners, refineries, and mineral processing plants. For example, Umnugovi is one of the six provinces that consistently ranks within the top five of the list thanks to the amount of revenue generated in the state budget and thanks to the fact that they do not receive subsidies. However, mining, heavy, and light industries are not the only competitiveness factor. Partnerships, mutually beneficial cooperation, consensus, and trust between local communities and the private sector are considered within the indicators.
The Gobi Museum of Nature and History is one of the highlights of Oyu Tolgoi’s local investment and cooperation. This is a clear result of the Gobi region’s focus on preserving and protecting its rich historical traditions, heritage, culture, and unique natural resources, as well as increasing its access to the public. Oyu Tolgoi has spent MNT 99.73 billion or USD 38.96 million over the seven years from 2015 to 2022 through the Gobi Oyu Development Support Fund to Umnugovi province. Of this, 89.05 percent or USD 35 million in financings were provided to more than 300 projects and programs. The museum cost MNT 10.9 billion in total, including the interior decoration is one of the highest amounts of funding from the fund for one project. In addition, Oyu Tolgoi LLC has included information in the unified geographical database from 707 historical and cultural sites, 5 paleontological sites, and 11 cultural heritage sites identified in the Cultural Heritage Survey. The Oyu Tolgoi project is a good example of how mega-mining projects contribute to local development. For example, in less than a decade, the population in Dalanzadgad soum has doubled to 25,000. Also, the number of migrants has increased sharply.
As a result, demand for trade, services, health, education, and culture has expanded accordingly. The Gobi Oyu Development Support Fund receives the most proposals for projects on establishing new schools and kindergartens. The fund’s major investments include building basic social services such as two schools, six kindergartens, three hospitals, and a museum. The largest investments were also made in social infrastructure. These include water treatment plants, waste disposal facilities, drainage lines, flood dams, afforestation, and freshwater wells. The Gobi Oyu Development Support Fund has become the main investor in local development in Umnugovi province. Water is vital in the Gobi region. 102 new wells were drilled over the years. With the investment of this fund, 484 permanent jobs have been created in the countryside, and 760,000 locals people have benefited from projects, programs, social infrastructure, and development in a double count. To diversify the local economy and support small and medium-sized enterprises operating in the region, Oyu Tolgoi has provided MNT 1.4 billion in soft loans to 51 businesses in Umnugovi through the Gobi Oyu Development Support Fund.
We have visited and had an au-fait with the activities of these lenders. One of them was DUDU PIZZA or “Paradise of the Gobi”, which is located in the center of Dalanzadgad soum. Its founder and director Tsetsegmaa.G emphasized, “In addition to location, the importance of comfort and service”. The biggest challenge for young entrepreneurs is start-up financing. The support of the Gobi Oyu Development Support Fund has helped overcome this obstacle. DUDU PIZZA started its operations two years ago with a low-interest loan of MNT 20 million. Despite the difficulties of the pandemic, its operations have stabilized and it has become one of the favorite places to serve people. DUDU PIZZA produces 15 types of products and has created more than 10 new local jobs. Oyu Tolgoi LLC partners with 577 suppliers as of the first quarter of 2022, including 409 domestic businesses, which accounted for 76% of the total operations procurement spending. For example, in the first quarter of the year, the company purchased goods and services worth USD 59 million from 85 registered suppliers in Umnugovi province. One of the 85 local suppliers is Khasud Bat LLC.
The company has been operating in the field of leather goods and textiles since 1995. Khasud Bat became a supplier for Oyu Tolgoi LLC in 2010 and was named its best supplier. They supply special welding clothes, winter, and summer work gloves, belts, and winter jackets. The workshop, which started with four members of one family, now has more than 30 fulltime employees and is one of the largest local manufacturers. Khasud Bat LLC supplies about 20,000 leather gloves every month to OT. Over the past 11 years, the product output has soared by 40 percent. Good Root Inter Trading LLC is another company that has successfully expanded its production as Oyu Tolgoi’s supplier. They provide 80 percent of workers’ daily meat demand to OT’s kitchen. The rest is sold to local grocery stores, hospitals, schools, and kindergartens. Founded in 2019, the company employs about 10 people. In addition, Erdenes Oyu Tolgoi LLC and Oyu Tolgoi LLC have agreed to jointly plant 100 million trees by 2030 as part of the “One Billion Tree” national movement initiated by the President of Mongolia. The Gobi Oyu Development Support Fund has decorated the area with six greenhouses for the Greenhouse Complex Training Center in Umnugovi province for MNT 600 million. “Everything can be done through a strong partnership,” said Oyu Tolgoi’s new Chief Executive Officer.
