Industry of Mongolia: features and statistics

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

The basis of the Mongolian economy has historically been considered agriculture and animal husbandry. The lands of this state, located in the southeastern part of Asia, are rich in vast deposits of natural resources. The Mongols mine copper, coal, molybdenum, tungsten, tin and gold. The mining industry in Mongolia accounts for a significant state-economic sector, but the extraction of raw materials is not the only industry in which the population of the country is involved.

History of the economy

The history of Mongolian industry dates back to 1924 - the year of the proclamation of the Mongolian People's Republic. Before this period, there was no industry, no such thing as a working class. All that the population was engaged in was the processing of livestock products, including the dressing of leather, sheepskins, felt rolling, blacksmithing and carpentry. Suchtypes of production had handicraft features and were aimed at serving the on-farm needs of the local population. Manual production was represented by enterprises for the primary processing of wool and leather, carpentry, locksmith, blacksmith and other workshops.

The only industry in Mongolia at that time was the coal mines in the Nalaykha tract. In some regions of the country, foreigners were illegally engaged in the extraction of gold and precious metals.

In the first half of the last century, the Asian state was completely dependent on the import of manufactured goods from abroad. That is why one of the primary tasks of the government of the republic was the creation of its own industrial enterprises. Two problems stood in the way of the young and economically immature state: the lack of qualified personnel and material resources. The Soviet Union provided assistance in resolving these issues.

Industrial development period

At the first stages, the formation of light and food industries in Mongolia began. The young republic of that time laid the foundation for the modern energy block of the economy. Back in the 1920s, the construction of processing enterprises began everywhere. In 1933, brick, sawmill and mechanical factories began to work in Ulaanbaatar, the first power plant was opened.

It is rather difficult to tell briefly about the industry of Mongolia. The progressive development of the light and food sectors of the economy needed such a fuel and energy industry thatable to meet the rate of production growth. A certain leap in development was made by the coal industry of Mongolia. Most of the coal mines in Nalaikha were expanded and mechanized, and the development of new deposits began in the Under-Khane, Yugotszyr, and Sain-Shande regions. The Mongolian coal industry to a greater extent met the domestic demand for solid fuels. In particular, local coal was used at the unified power plant of Ulaanbaatar in 1939 and small power plants.

In the same period, another specialization of Mongolian industry emerged - metalworking enterprises, including an iron foundry. Printing, paper mills, enterprises specializing in the manufacture of building materials, gold processing, etc. were built one by one.

Mongolia today

After the collapse of the USSR, assistance from the Soviet republics, which accounted for almost a third of external GDP, ceased to arrive, which led to a protracted decline in the Mongolian economy. Industries were in need of fundamental economic reforms.

The country's government has adopted a new course in the development of the country, aimed at building a market economy. In the course of the reforms, a number of radical decisions were made in most areas of the national economy. The state has ceased to control the pricing process. Through the liberalization of domestic and foreign economic activity, attempts were made to rebuild the banking system, the energy sector, and programs for the privatization of land andimplementation of measures to attract foreign investment. Mongolia to participate in international tenders.

However, the reform process was put on hold as a result of resistance from the communist movement and political instability due to the frequent change of governments.

The peak of the economic crisis came in 1996 after a series of natural disasters and falling world prices for copper and cashmere. But despite this, the next year, 1997, was recognized as the year of the country's economic growth. In the same year, Mongolia became a full member of the WTO. And although Russia's decision to ban the export of oil and oil products in 1999 had the most adverse effect on the state of the Mongolian economy, the country continued to move forward with confident steps.

Since 1999, by decision of the WTO, this young and promising state has been annually provided with financial assistance by partner countries: China, Russia, South Korea, Japan. And although the economic indicators and the degree of industrial development in Mongolia can hardly be called advanced, many experts consider the economy of this country to be the most progressive in the world. In their opinion, the potential of the state is huge, given the reserves of mineral raw materials, the development of which is still at an early stage.

The basis of industry: natural and labor resources

Despite the many deposits of valuable mineral raw materials, their development is not carried out in full due to numerous restrictions. In Mongolia, brown coal is being mined at fourdeposits, and in the southern part of the country, in the area of the Taban-Tolgoi mountain range, deposits of coal were discovered. According to preliminary data, geological reserves amount to billions of tons. Small tungsten subsoils and areas rich in fluorspar are being actively developed. The discovery of copper-molybdenum ores on Mount Erdenetiin-ovoo served as the basis for the creation of a mining and processing plant, around which the industrial town of Erdenet is located.

The oil industry of Mongolia has been actively developing since the middle of the last century. One of the main enterprises in this industry is an oil refinery in Sain Shanda, a city located near the border with China.

Massive deposits of phosphorites were discovered near Lake Khuvsgul. However, today the development of the field was suspended, not even allowing it to develop to the full extent due to environmental hazards. It is known about the accumulation of zeolites in the bowels of the earth - Mongolia carried out the search for this material jointly with the USSR. Today, however, these minerals of the aluminosilicate group, used in agriculture for biostimulation processes and adsorption, are practically not mined due to lack of funding.

The development of any industry in Mongolia depends on labor resources. The population as of 2018 is 3.119 million people, of which about a third are citizens of working age. Part of the population (about 40%) is employed in agriculture, in the industry of Mongolia - about 20%. The rest of the population works in the service sectorprivate enterprise and housekeeping. The unemployment rate is at 9%.

Food production

Briefly about the industry of Mongolia, which provides the needs of the population for food, we can say this: this sector of the economy accounts for about 40% of the total production. In this industry, the production of dairy and meat products is actively developing. Numerous oil refineries and separator points have been built in small settlements (aimags). It is worth noting that just a few decades ago, Mongolia could not count on the production of commercial butter. Today it is one of the major export positions.

The main ingredient for the food industry in Mongolia is milk. A dairy plant operates in Ulaanbaatar, which processes dozens of tons of milk and cream per day. All production processes at this enterprise have long been automated and mechanized. The capital dairy plant produces pasteurized dairy and sour-milk products, butter, cottage cheese, sweet glazed curds, ice cream. This enterprise is the leading food processing plant in Mongolia.

Not far from Ulaanbaatar, there is a large meat processing plant equipped with modern technology, thanks to which the plant's workshops demonstrate high production results. In the complex of the meat processing plant there are shops for the processing of meat products, departments for the production of semi-finished products, sausages,canned food. The predominant part of the goods of the meat processing industry is exported to other countries.

In addition to meat and dairy production, Mongolia's food industry is represented by dairy, confectionery, bakery, liquor, fish and other industries. A few years ago, a new direction in the food industry began to develop rapidly in the republic - flour milling. Today, the country meets the needs of its citizens in flour at the expense of the products of national producers. In addition to the mill in Ulaanbaatar, which produces more than 30 thousand tons of flour annually, there are a number of mechanized flour mills in the aimags.

Industrial plant in Ulaanbaatar

Among the light industry factories in Mongolia, it is necessary to first of all note the industrial plant in the capital - this is one of the largest enterprises engaged in the processing of agricultural products. The industrial complex in Ulaanbaatar was built in 1934. Subsequently, this enterprise began to be called the forge of professional industrial personnel from the times of socialism. The industrial complex consists of a complex of plants and factories equipped with modern equipment. There are wool-washing, cloth, worsted, felting, shoe, saddlery and textile workshops. The Ulaanbaatar industrial complex also includes a chevrovy, chrome, sheepskin coat, leather and other factories in its structure. The main products that the plant produces:

• various woolen fabrics;
• felt;
• drap;
• cloth;
• shoes for all seasons;
• boots;
• camel wool blankets;
• bags;
• outerwear.

The plant's products are in demand not only within the country, they are exported to other countries. The industrial complex strives to expand the production sphere. With the development of this holding, its individual workshops have long acquired the status of independent enterprises.

Progress in heavy industries

Over the past few years, the country has seen a positive trend in the development of energy, coal, oil, metalworking, mining, construction, woodworking and other industries. Average annual growth rates exceed similar figures in other former socialist republics. Mongolia's industrial growth rate surprises many economic experts, as the country, not so long ago considered the most backward, is steadily moving closer to the level of advanced powers.

In order to develop the main sectors of the national economy, the Mongols are striving to bring industrial production to a new level, corresponding to the world average. The government of the country pays special attention to the creation and establishment of its own chemical-pharmaceutical, biological production, which plays a huge role in expanding the main sector of the economy - livestock and agriculture in Mongolia. The industry, as already noted, employs approximately 20% of the able-bodiedof the population, while almost 40% of able-bodied citizens are engaged in livestock breeding, farming, growing crops.

Industrialization of Mongolian cities and development of the coal industry

Briefly about the specializations and industries of Mongolia, which form the basis of the fuel and energy block of the country's economy, we can say that they are fundamental in the development of the national economy. The coal industry of the republic occupies the main place in this segment. Today, brown and black coal is being mined in 13 large deposits in Mongolia. The most demanded product for export is coking and high-grade coal, which is mined in the Nalaykha district near Ulaanbaatar.

Coal basin of certain regions of Mongolia, in particular in the aimaks of Uverkhangay and Sukhe-Bator, the operating mines fully meet the need for solid fuel not only in their own settlements, but also in some neighboring ones. Not so long ago, new coal mines were put into operation and old enterprises were equipped with new equipment. This step naturally led to an increase in average annual production by more than 10-15%.

Simultaneously with coal deposits during the development of deposits, natural reserves of ores, asbestos, limestone and other valuable raw materials are often discovered. Today, Darkhan-Uul is considered one of the rapidly developing industrial centers. Here, within the Sharyn-Gol coal basin, an industrial and energya complex that will provide coal to all spheres of the national economy and the needs of the population. That is why the Mongols call the city of Darkhan-Uul "the flower of friendship." In the construction of this complex, the countries of the former USSR (Russia, Kazakhstan), China, Japan, Canada provide significant assistance to the republic. The main objects of the complex should be several large coal mining enterprises, a railway transport hub, a high-voltage power line and an elevator. Today, the process of the birth of another economic and cultural center of Mongolia is taking place here.

Oil production, electricity generation

As the fuel base and industrial sectors as a whole grow, the production of electric energy has to be taken to a new level. A few decades ago, electricity was not even heard in remote regions. Today, the need for electrification is explained not only by the household needs of the population, but primarily by the need for mechanization and automation of production in the country and an increase in the performance of finished products. Local power substations operate in aimag centers.

Unlike other industrial sectors, oil refining is a relatively young specialization in the industry of Mongolia. The industry is still in its infancy, but at the same time, the country produces half of the gasoline for its own needs, and imports the rest.

The only major oil refining center is located in the Eastern Gobi. Appeared here not too long agoa young city - Dzunbayan, which also houses infrastructure and cultural and community facilities. The Eastern Gobi meets almost half of Mongolia's fuel needs.

Due to the expansion of the manufacturing and manufacturing industries in Mongolia, electricity costs are increasing every year, prompting the government to consider building new thermal power plants.

Mining of mineral ores and metals

Mining supplies Mongolia:

• gold;
• manganese;
• tungsten;
• magnetic iron ore;
• lead ores;
• rhinestone;
• turquoise and other non-ferrous, precious metals;
• s alt.

Mining and processing enterprises are being built near the places of large deposits. Mongolia exports tungsten, fluorspar and certain types of non-ferrous metals to other countries. Ferrous metallurgy in Mongolia is represented by a mechanical processing plant with an iron foundry in Ulaanbaatar. Agricultural equipment, hand tools, small equipment are produced here for domestic and export sales.

Marble, limestone, asbestos, gypsum, mineral paints are mined in the republic. The extraction of raw materials of this type allows the development of the industrial sector of building materials. Over the past few years, several dozen enterprises have been put into operation, including a house-building plant in Sukhbaatar. They are engaged in the production of lime, cement, brick, slate and otherbuilding goods. Special attention deserves a large-panel housing construction plant in the capital of Mongolia, a glass plant in Nalaikha, reinforced concrete and brick factories in Ulaanbaatar. Complex mechanized technologies are used in the workshops. All enterprises are equipped with modern technology.

The production of building materials and their sale to the population at an affordable price is an important aspect for a people who in the recent past were considered nomadic. The transition of the Mongols to settled life is facilitated by the large-scale construction of comfortable houses, infrastructure facilities, and the development of a public transport network in cities and aimaks.

Agriculture

The Ministry of Agriculture and Light Industry of Mongolia is doing everything to support the agricultural sector of the economy and create the most favorable conditions for its development. Throughout the history of the existence of this state, agriculture has been at the heart of its economy. In the context of the transition to a market model, the importance of the agricultural sector has not decreased. Almost half of the labor reserve of Mongolia is involved in it, although 50-60 years ago this figure reached 80%. Agriculture provides more than 40% of the total GDP. The Mongols rank third in the world in terms of livestock per capita behind Australia and New Zealand.

Almost until the middle of the last century, while industry was in the process of becoming and turning into an independent sphere, the agricultural economy remainedthe only manufacturing industry. Back in those days, finished products were exported, which made it possible to receive almost 60% of the national income. Over time, this share has been declining and today is about 35-40%, with more than half of export products being raw materials.

The most important economic indicators in this country depend on the level and pace of agricultural development. In particular, the cost of agricultural raw materials is the main part of the cost of production of light and food industry goods. The Ministry of Agriculture of Mongolia is constantly working on creating new concepts and methods that would make it possible to minimize costs and increase the productivity of finished products.

Pasture farming is the predominant type of economic activity that the Mongols are engaged in. According to some reports, there are 12 heads of cattle per person. In some aimags, livestock is a conditional monetary unit in transactions of a material nature. Unlike animal husbandry, agriculture plays a secondary role in modern Mongolia.

Finishing

The development of industry led to the formation of the working class on the model of the proletariat of the USSR. The participation of the Soviet Union played an important role in the process of training specialized workers. Part of the Mongols gained experience and knowledge by working at their enterprises under the supervision of sent Soviet masters. They were trained in special circles, technical sections, training centers. Others were educated directlyin the USSR. Thus, Mongolia is an example of a nationwide desire for the economic prosperity of their country through the development of industry, rationalization of production processes and saving resources.