The document discusses the challenges facing the mining industry in Mongolia, including uncertainty in regulations leading to project delays and production issues. This has made business planning difficult and forced companies like Wagner Asia Group to take steps like cutting costs, shedding assets, and laying off over 500 Mongolian employees over the past 18 months to deal with declining revenues and profits. These outcomes have also led to increased operating costs, cash flow challenges, and higher bad debts.

1. A Supply Side View
BCM Meeting, May 20th 2014
S.J.(Steve) Potter,
Executive Director Wagner Asia Group

2. Challenges
• Uncertainty in the regulatory & legal framework
have lead to;
– mining project delays
– production slow-downs and stoppages
which all make business planning difficult;
– Prime Product Inventory
– Parts Inventory
– Manpower
– Facilities

3. Outcomes & Consequences
• Additional Operating Costs
• Cash Flow Challenges
• Increase in bad debts (receivables)
• Shedding Assets
• Redundancies & Hiring Freezes
Although 100% foreign owned, over 98% of WAGNER Asia
employees are Mongolian nationals and by June over 500
of them will have lost their jobs in the last 18 months as a
result of cost cutting because of declining sales revenues
and profits.