The Bank of Mongolia launched the three-month “Mongol Gold” campaign on August 1, which runs until November 1. Within the framework of this campaign, the Central Bank is seeking to promote the submission of gold to the bank through the legal procedures and workshops on gold purchases for government and NGOs, and raising awareness of legal procedures.
The Bank of Mongolia began purchasing gold in December 2016 at the latest rates announced by the London Metal Exchange. As gold and minerals fees dropped from 68 percent to 2.5 percent, the submission of gold increased significantly. In 2013, when gold and minerals fees were 68 percent, only two individuals submitted 5.6 kg gold to the Bank of Mongolia, rising to 130 individuals submitting 3.2 tonnes of gold the following year. However, according to D. Altansukh, Senior Economist with the Bank of Mongolia’s Treasury Department, many challenges persist, including multiple evaluations, testing, obtaining a new license for minerals extraction, and a lack of financial support.
Although the Bank of Mongolia operates 17 branch offices in rural areas, they cannot collect gold because they have no testing facilities; hence, building testing facilities has become a priority. Commercial banks have begun collecting gold. They purchase gold in exchange for cash, or as collateral for loans. Eighty percent of all gold deposited is for low-interest loans with a duration of up to three months.
There is also a new service for storing gold. G. Munkh-Erdene from Golomt Bank said this applied to people hiring commercial banks to store their gold with an exchange hedging service. In recent years, the term “ecological gold”, also known as fairmined extraction, has gained global recognition. This applies to gold that presents a place of origin and the payment of responsible mining fees, meeting the standards for fairmined and ecological gold.
World renowned brands now prefer fairly extracted fairmined and ecological gold. High-end luxury accessories by Chopard and Gucci now use fairmined and ecological gold in their products, and Nobel Prize laureates now receive medals made from fairmined and ecological gold.
Mongolia also has begun exporting fairmined and ecologicalgold. Although only 1 kg of this gold has been exported, Mongolia has become the second exporter of fairmined and ecological gold in Asia. Mongolia is also planning to import pure silverised gold from abroad for goldsmiths who produce products made of gold and silver. Mongol Bank Treasury Department Director Erdenetuya said this would enable goldsmiths to use pure gold and silver, and their customers to buy reliable products.
Due to the illegal export of Mongolia’s gold, the Bank of Mongolia is seeking to raise awareness on the submission of golf to the Central Bank, and is increasing the deposit of foreign currency reserve for citizens and enterprises. The “Mongol Gold” campaign will be implemented in collaboration with a variety of partners, including the SAM Project.
