The document summarizes news from the Business Council of Mongolia newsletter. It reports that Ivanhoe Mines has made a significant new discovery at the Oyu Tolgoi mine in Mongolia, indicating there are greater resources than previously estimated. It also reports that Newcom Group and GE have signed an agreement to explore business opportunities in Mongolia, and that Mongolian Mining Corp has increased the price range for its upcoming IPO on the Hong Kong exchange.
हम आग्रह करते हैं कि जो भी सत्ता में आए, वह संविधान का पालन करे, उसकी रक्षा करे और उसे बनाए रखे।" प्रस्ताव में कुल तीन प्रमुख हस्तक्षेप और उनके तंत्र भी प्रस्तुत किए गए। पहला हस्तक्षेप स्वतंत्र मीडिया को प्रोत्साहित करके, वास्तविकता पर आधारित काउंटर नैरेटिव का निर्माण करके और सत्तारूढ़ सरकार द्वारा नियोजित मनोवैज्ञानिक हेरफेर की रणनीति का मुकाबला करके लोगों द्वारा निर्धारित कथा को बनाए रखना और उस पर कार्यकरना था।
27052024_First India Newspaper Jaipur.pdfFIRST INDIA
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‘वोटर्स विल मस्ट प्रीवेल’ (मतदाताओं को जीतना होगा) अभियान द्वारा जारी हेल्पलाइन नंबर, 4 जून को सुबह 7 बजे से दोपहर 12 बजे तक मतगणना प्रक्रिया में कहीं भी किसी भी तरह के उल्लंघन की रिपोर्ट करने के लिए खुला रहेगा।
Welcome to the new Mizzima Weekly !
Mizzima Media Group is pleased to announce the relaunch of Mizzima Weekly. Mizzima is dedicated to helping our readers and viewers keep up to date on the latest developments in Myanmar and related to Myanmar by offering analysis and insight into the subjects that matter. Our websites and our social media channels provide readers and viewers with up-to-the-minute and up-to-date news, which we don’t necessarily need to replicate in our Mizzima Weekly magazine. But where we see a gap is in providing more analysis, insight and in-depth coverage of Myanmar, that is of particular interest to a range of readers.
In a May 9, 2024 paper, Juri Opitz from the University of Zurich, along with Shira Wein and Nathan Schneider form Georgetown University, discussed the importance of linguistic expertise in natural language processing (NLP) in an era dominated by large language models (LLMs).
The authors explained that while machine translation (MT) previously relied heavily on linguists, the landscape has shifted. “Linguistics is no longer front and center in the way we build NLP systems,” they said. With the emergence of LLMs, which can generate fluent text without the need for specialized modules to handle grammar or semantic coherence, the need for linguistic expertise in NLP is being questioned.
role of women and girls in various terror groupssadiakorobi2
Women have three distinct types of involvement: direct involvement in terrorist acts; enabling of others to commit such acts; and facilitating the disengagement of others from violent or extremist groups.
01062024_First India Newspaper Jaipur.pdfFIRST INDIA
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Future Of Fintech In India | Evolution Of Fintech In IndiaTheUnitedIndian
Navigating the Future of Fintech in India: Insights into how AI, blockchain, and digital payments are driving unprecedented growth in India's fintech industry, redefining financial services and accessibility.
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ys jagan mohan reddy political career, Biography.pdfVoterMood
Yeduguri Sandinti Jagan Mohan Reddy, often referred to as Y.S. Jagan Mohan Reddy, is an Indian politician who currently serves as the Chief Minister of the state of Andhra Pradesh. He was born on December 21, 1972, in Pulivendula, Andhra Pradesh, to Yeduguri Sandinti Rajasekhara Reddy (popularly known as YSR), a former Chief Minister of Andhra Pradesh, and Y.S. Vijayamma.
1. BUSINESS COUNCIL of MONGOLIA
NewsWire
www.bcmongolia.org
info@bcmongolia.org
Issue 138, October 1 2010
NEWS HIGHLIGHTS:
Business:
“Rare” find at Oyu Tolgoi indicates “an awful lot more resource”;
Newcom and GE sign MoU for strategic cooperation in Mongolia;
Mongolian Mining ups HK IPO price range by 3%;
Marubeni to help build oil refinery in Darkhan, Mongolia‟s first;
USD7 million EBRD subscription to Petro Matad announced;
Erdene initiates exploration on new copper-gold discovery;
Miners in Mongolian land rush;
Rio and Ivanhoe attempt to outmaneuver each other;
Oyu Tolgoi will spend MNT36 billion on training 3,300 workers;
Human Rights Commission finds questions for trainees violate law;
Ulaanbaatar Railway meeting to name new head postponed:
People want to know more about progress on Erdenet Tavan Tolgoi.
Economy:
PM sees Canada as “a crucial player in Mongolia's development”;
Canada, Mongolia agree to deepen economic ties;
Convergence of three booms makes it a good moment to open a Mongolian bourse;
MSE will change, sooner rather than later;
Reuters “misreported” PM on London Stock Exchange;
LSE offers help and support to develop capital market in Mongolia;
Too much money all at once worries economists;
Draft state budget for 2011 shows surplus;
Mongolia teeters on the brink of a mining boom;
Not enough skilled manpower to fill jobs on offer, and those to come;
NAMBC meeting focuses on lack of skilled manpower for projects;
Businessmen vocal about having to “pay bribes at every step”;
MPs and CEOs come together to talk about PPP;
Meeting deplores discrepancy in unemployment data;
Compensation claims for license cancellation will be thoroughly checked, says MP;
200 attend workshop on reclamation;
Russia‟s ban on beef import hits meat producers;
Mongolia main source of unprocessed molybdenum for China;
Japan calls for improved investment environment;
Use of SME loans under examination;
Labor leader wants minimum wages in private sector doubled;
Canada expands agricultural cooperation with Mongolia;
Use of public money to help joint venture make up for loss criticized;
MCA project to arrange training for media on property rights;
ADB warns on China‟s long-term growth.
2. Politics:
PM urges more help for landlocked countries;
20 'missing' Chinese migrant workers found, await repatriation;
Russia winning the Mongolian "Great Rail Game";
Registration deadline extended by a month;
Province authorities trained on anti-corruption measures;
Beijing, Moscow boost ties on energy;
USAID project helps those with disabilities achieve a better life;
U.S. official stresses need to cooperate for sustainable energy future;
Sukhbaatar‟s statue removed for repairs;
1,200 „smokeless‟ taxis in Ulaanbaatar planned;
Genghis Khan still points the way forward.
MONTHLY MEETING RECAP
The BCM monthly meeting on September 27, with Mr. Laurenz Melchers in the Chair, was attended
by 85 members. Executive Director Jim Dwyer welcomed the three new members since the last
meeting. They are Resource Investment Capital, better known as ResCap, Wagner Global Services,
and Red Hill Mongolia, a unit of Prophecy Resource. Membership now stands at 163, and the
steady rise in numbers every year is reason for optimism that 200-plus will be reached before BCM
is five years old in 2012. However, this will be possible only if failure to renew memberships is kept
at a minimum.
Mr. N. Algaa, Executive Director, Mongolian National Mining Association, provided an update on
developments in the mining sector. The General Customs Authority have stuck to their decision to
raise certain mineral export duties by ten times and an appeal will now be made to the Government
to see reason. The MNMA continues to be unhappy that the Government does not seek its views, or
of businesses in general, before taking measures that affect the industry.
Mr. Tomas Petrzela, Vice President-Incoming Exchange, AIESEC Mongolia, described how the AIESEC
internship program is expanding here. Total incoming interns this year have numbered 16, while 18
Mongolians were placed in other countries. The target for next year is 24 and 35 respectively. He
urged member concerns to take in more interns, for any period from 6 weeks to 18 months, from
the 108 countries where AIESEC is present.
Mr. Tim Baitch, Operations Manager-Mongolia, Runge, said even though the company opened an
office in Ulaanbaatar only recently, it has been active in Mongolia for longer, having completed
around 50 assignments in the mining and related services industries sector in the past few years.
Mr. Dan Feder, Partner, PricewaterhouseCoopers, one of the Big Four professional services firms in
the world, and the first to open a full-service office in Mongolia, listed the services it offers in
assurance, tax and advisory.
BUSINESS
“RARE” FIND AT OYU TOLGOI INDICATES “AN AWFUL LOT MORE RESOURCE”
Ivanhoe Mines shares soared on Tuesday after it had announced a ―remarkable‖ kilometer-long gold
and copper find at Oyu Tolgoi. ―There could be there than originally thought, and that‘s providing a
lot of excitement out there,‖ said John Hughes, mining analyst at Desjardins Securities in Toronto.
―While Oyu Tolgoi already is one of the world‘s largest deposits of gold and copper, (the find) is
consistent with our long-held view that the Oyu Tolgoi mineralized system contains significantly
more gold and copper than we have delineated to date. We are particularly pleased to see this
outstanding intersection right where the advanced technology, induced-polarization section
indicated it would be found," Ivanhoe executive chairman Robert Friedland said in a statement. The
area of the find, previously known as the New Discovery Zone, now has been renamed Heruga
North. Heruga means ―supreme happiness‖.
The legendary promoter and company founder announced that the Canadian firm has found an
almost one-kilometer-long section of nearly continuous mineralization at what is already considered
to be one of the top three copper and gold mines in the world. ―To intercept almost one kilometer
3. of copper and gold mineralization in a new drill hole is a remarkable development, considering that
we already have drilled more than 1,650 holes totaling almost 900 kilometers at the project during
the past 10 years,‖ Friedland added.
The drill hole intercepted 112 meters grading 1.36 grams of gold per ton and 0.34 per cent copper.
And individual two-meter samples near the bottom of the hole returned gold assays of 10 grams per
ton -- among the highest gold grades ever drilled at Oyu Tolgoi.
―This is definitely rare,‖ noted Hughes. ―There‘s not much in the world that could compare to that
kind of tonnage. It‘s re-confirmation that there is a lot of material there to be mined, and Canada
has a toe-hold there. This is certainly very good news.‖
Read more…
The mine is scheduled to begin initial production by late 2012. Oyu Tolgoi is forecast to produce 1.2
billion pounds of copper and 650,000 ounces of gold annually in its first 10 years. The mine is
expected to cost USD4.6 billion to build.
Mr. Friedland said that the discovery allows for considerable flexibility in future development
phases at Oyu Tolgoi. "It's possible that Heruga and Heruga North eventually could be developed
together as one of the world's largest underground gold mines."
Source: The Toronto Star, Ivanhoe Mines Ltd.
NEWCOM AND GE SIGN MoU FOR STRATEGIC COOPERATION IN MONGOLIA
A memorandum of understanding to jointly explore business opportunities in Mongolia, signed with
Newcom Group last week in New York, makes U.S.-based General Electric Company (GE) the largest
multinational company to operate in the country. The two companies agreed on the principles and
basis to explore a sustained partnership in key sectors of the economy, including power, civil
aviation, healthcare, railways, water, mining, lighting and financial services.
The memorandum was signed by Mr. Ts. Boldbaatar, Chairman of Newcom, and Mr. Mark Norbom,
President and CEO of GE Greater China, in the presence of Prime Minister S.Batbold. ―GE is very
excited to explore growth opportunities in Mongolia with a strong partner like Newcom. Each
company brings strengths that are well-aligned with Mongolia‘s growth needs -- GE brings
technologies and expertise in infrastructure and financial services and Newcom brings established
relationships and operations in the market,‖ said Mr. Norbom.
―Newcom is happy to be GE‘s partner of choice in Mongolia. Indeed, we are a perfect match – it is
imagination and innovation that drives our two companies. As GE has stood at the forefront of
imagination and progress in the world for over a century, Newcom has been a pioneer in new and
innovative technologies in democratic Mongolia. Together we are set to team for growth and take
on big development challenges in emerging Mongolia,‖ said Mr. Boldbaatar.
Source: Newcom Group
MONGOLIAN MINING UPS HK IPO PRICE RANGE BY 3%
Mongolian Mining Corp, Mongolia's largest privately held domestic producer and exporter of coking
coal, raised its initial public offering price range by 3 percent, according to a term sheet, in a sign
investors are hungry for exposure to Mongolia's emerging resources sector. The coal miner now
plans to raise up to USD702 million from the IPO instead of an earlier plan of up to USD681 million,
according to the term sheet. Mongolia Mining will be the first company listed in Hong Kong to be
fully based and operated in Mongolia.
Citigroup Inc. and JPMorgan Chase & Co. are managing Mongolian Mining‘s IPO. The shares are being
priced at 11.6 times to 13.6 times the company‘s forecast 2011 profit and 7.6 to 8.9 times its
estimated 2012 earnings. Of the proceeds, about 50 percent will be used to improve transport links
and infrastructure, Chief Executive Officer G. Battsengel told a press briefing in Hong Kong. About
40 percent will go toward exploration and acquisitions, he said.
Mongolian Mining‘s IPO will be the biggest on record by a company from the landlocked Asian
nation. The stock being sold represents about 20 percent of the company, which would give
Mongolian Mining an estimated market capitalization of USD3.5 billion. ―Receptions should be
positive for such stocks as coking coal is scarce compared with thermal coal,‖ said Lawrence Lau,
an analyst of Bank of China (Hong Kong) Ltd. ―The market sentiment has improved with people
taking on more risk.‖
Mongolia has drawn serious attention from global investors and Mongolia's domestic companies are
seeking foreign capital to help them expand, and the government is trying to connect local
companies and its stock market with the rest of Asia -- from Hong Kong to South Korea to Japan --
hoping to turn domestic names into regional or international brands.
Chinese coking coal logistics company Winsway -- which imports and distributes Mongolian coal -- is
4. selling 990 million shares in a Hong Kong IPO that is scheduled to start trading on October 11.
Winsway, partly owned by China-focused private equity fund Hopu Investments, accounts for about
65 percent of total Mongolian coal imported into China in 2009.
Source: Reuters, Bloomberg
MARUBENI TO HELP BUILD OIL REFINERY IN DARKHAN, MONGOLIA‟S FIRST
Marubeni Corp. has said it has joined Mongol Sekiyu, a local Mongolian government-backed firm,
and Japan's Toyo Engineering Corp on a USD600-million project to build the first oil refinery in
Mongolia. The refinery, slated to be up and running in autumn 2014 and located in Darkhan city
about 200 km north of Ulaanbaatar, will help the country reduce its full dependence on imports of
oil products from Russia.
Capacity is seen at an estimated 44,000 barrels of crude per day to produce 1 million tons of gas,
630,000 tons of gasoline and 60,000 tons of jet fuel, each per year, Japan's No.5 trading firm said.
Marubeni would work with Toyo to build, maintain and operate the facility.
Marubeni said it plans to deliver oil to the refinery from Russia's Irkutsk Oil Co, which signed a
comprehensive business pact with Marubeni in June on supplies. Crude supplies will also come from
Kazakhstan. Mongolia, which sits on vast quantities of untapped mineral wealth, currently produces
crude oil near the border with China for export to the neighboring nation via a pipeline.
At a meeting with Parliament Speaker D.Demberel in Ulaanbaatar on Tuesday, Mr. Eiji Okada of
Marubeni said they intend to train Mongolians in skills that would be in demand at the refinery.
Source: Reuters, Montsame
USD7 MILLION EBRD SUBCRIPTION TO PETRO MATAD ANNOUNCED
The European Bank for Reconstruction and Development (the EBRD) has told Petro Matad that it will
conditionally subscribe for 3,367,003 new ordinary shares of US$0.01 each in the company at a price
of USD2.08 per share. Following this EBRD subscription of approximately USD7 million, the
aggregate amount raised by Petro Matad in its September fundraising is approximately USD54
million. The EBRD will now hold 17.4% of the company's enlarged issued share capital.
Source: Petro Matad Limited
ERDENE INITIATES EXPLORATION ON NEW COPPER-GOLD DISCOVERY
The highlights of an update provided by Erdene Resource Development on its ongoing exploration
programs for coal and metals in Mongolia include:
-- New Copper-Gold Discovery - Detailed Nomin Exploration Program Initiated
-- Regional Coal Targets Being Tested - Zarman Coal Drilling Initiated
-- Galshar Coal Royalty - Xanadu Acquires Galshar Project
-- Zuun Mod Molybdenum-Copper Deposit - Scoping Study Level Work Underway
-- Zuun Mod Exploration - Geophysical Program Commences.
The Nomin Project is providing encouraging early stage copper-gold results and will be subject to
more detailed exploration during the remainder of 2010. The Nomin prospect is a new discovery;
however, previously undocumented ancient workings (shallow pits) have been found on the
property. The 2010 metals exploration program is focused on evaluating newly acquired exploration
licenses, follow-up of anomalous results from the 2009 regional exploration program and field
evaluation of the expanded 2010 regional porphyry evaluation program.
Drilling of coal targets in the Zarman basin commenced September 14 with a planned eight-hole,
2,700meter drill program designed to test an area 10 km by 17 km. A budget of USD1.9 million is in
place for 2010 coal exploration programs, which is fully funded by Xstrata Coal Canada Ltd. through
the Erdene-Xstrata Coal Alliance.
Read more…
Following the official registration of the Zuun Mod Resource by the Mongolian Minerals Resource
Council in July, the company accelerated its efforts in regard to exploration and development of
the Zuun Mod project. In September, the Company continued to advance the project with the
initiation of hydro-geological studies which will include a geophysical survey and a drilling program
designed to confirm water resources in support of mine development. Zuun Mod is a porphyry
molybdenum-copper deposit in Bayankhongor Province and Erdene controls it through a single
exploration license totaling 49,538 hectares.
Several new drill targets have been identified and preparations are under way to conduct a
specialized geophysical induced polarization survey to test for possible extensions of mineralization
in this area and to better define and prioritize drill targets. The planned survey is expected to start
before the end of September.
5. Source: Erdene Resource Development Corp.
MINERS IN MONGOLIAN LAND RUSH
Kell Nielsen has looked at between 80 and 100 mineral projects in the past eight weeks. That's how
it is in Mongolia these days. Nielsen, who heads Voyager Resources (VOR), knows the race is on
between mining companies to lock up ground in Mongolia, which might be best described as the
Next Big Thing in the resources world.
Voyager is not a stock that has commanded all that much interest -- or support, for that matter.
But its first pass drilling at the Daltiin Ovor project turned up some interesting intersections,
including 3m at 50.59 grams/ton gold, 4 per cent copper and 31.3g/t silver, starting just 6m below
surface. Nielsen is planning to do more testing of the high-grade areas, but using a diamond drill
rather than a reverse circulation one. The latter is fine for resource statements under ASX rules,
but the Mongolians require diamond drilling results when applications are made for licenses.
But back to those 80-plus projects. Voyager is casting its net widely, excluding only ferrous metals
and coal. Its focus so far has been copper-gold, but it is looking at base metals projects, too. And
especially tin, with that metal now coming on to many investor radar screens. Last year, Nielsen
thought he would have a two-year window for picking up projects in Mongolia, but the land rush has
just picked up significantly in recent months. He'll be looking to bed down deals as soon as possible.
And we hear there's mounting excitement at Aspire Mining (AKM) regarding the present drilling at
its Ovoot coking coal project as the company gets near its initial JORC resource statement. It has to
be big, mainly to justify building a railway line of about 500km to the remote location -- although
the economics of that would be helped if other large deposits en route, including magnetite and
phosphate, were also to be developed.
Read more…
By the way, for those who still think of Mongolia as a basket case, the International Monetary Fund
reported this month that the country had witnessed a dramatic turnaround in the past 18 months.
In early 2009, growth had been stalling, international reserves were rapidly being depleted, there
was insufficient financing to meet the spending needs of the government, and the banking system
was under pressure. The economy was on the verge of collapse.
But look at Mongolia now, with growth for 2010 expected to come in at 8 per cent and, as the IMF
summed it up, "international reserves are at an all-time high, public finances are on a sound
footing, and the banking system has been strengthened".
Source: The Australian
RIO AND IVANHOE ATTEMPT TO OUTMANEVER EACH OTHER
Rio Tinto is creeping its way towards control of Canada‘s Ivanhoe Mines at a slow but relentless
pace, drawing investors‘ attentions away from a multi-billion dollar mining transaction that could
be as significant for Rio as Canada‘s Potash Corp. looks to be for BHP Billiton.
Over the past six months a conflict has erupted between Rio and Ivanhoe, developers of Oyu Tolgoi,
a copper project that many analysts consider to be one of the best in the world. With a stake in
Ivanhoe that rose to 35 per cent recently, Rio can feel confident that it is best placed for an
eventual takeover. It has invested more than USD1 billion in Ivanhoe and its Oyu Tolgoi mine since
2006.
But under Robert Friedland, the legendary mining entrepreneur, Ivanhoe has been making plain that
Rio‘s money will not buy its love. It has engaged investment bankers to assess ―strategic options‖.
Over the summer it pushed through a shareholder rights plan, otherwise known as a poison pill, to
protect against what it calls ―coercive and creeping takeovers‖.
The markets are giving credit to Ivanhoe‘s maneuvers. One London-based analyst ascribed the
performance of its share price to investors‘ intrinsic faith in Mr. Friedland‘s ―wiliness‖ and record
of coming out ahead. The Toronto-listed shares have stayed elevated since July when the company
adopted the poison pill, causing Rio to launch arbitration against Ivanhoe. It canceled a restriction
against selling more than 5 per cent of its shares to a strategic partner. But despite Ivanhoe‘s
much-advertised search for alternative options all year, no third-party offer has materialized. ―This
is completely in keeping with Robert‘s personality,‖ said one banker who has worked for Ivanhoe.
―He wants the best deal for his shareholders. He wants to make sure that Rio does not have a 100
per cent stranglehold on his company.‖
Read more…
Robert Friedland is a legend in the mining industry. The superlatives he enjoys range from ―best
entrepreneur‖ to ―biggest genius‖ to ―luckiest stiff‖. This last tag refers to his big break in the
1990s. Mr. Friedland was a large investor in an exploration company called Diamond Fields
6. Resources. In the course of exploring for diamonds in Canada‘s Labrador province the company
struck a motherlode deposit of nickel. The company‘s sale to Inco netted Mr. Friedland a fortune
that helped him launch Ivanhoe.
In 2000 Ivanhoe took over an exploration program in Mongolia, then an unpromising mining zone,
from BHP Billiton. Ivanhoe spent several years proving that the Oyu Tolgoi copper-gold deposit is
one of the biggest and world‘s best new sources of copper. Mr. Friedland evangelized the promise
of Mongolia to investors with his Steve Jobs-like knack for the grand narrative. He laid the
groundwork for the Mongolia fever that has swept the mining industry since Oyu Tolgoi won
government approval in October 2009.
An early convert to his vision for Oyu Tolgoi was Tom Albanese, currently chief executive of Rio. In
2006 Mr. Albanese headed Rio‘s copper and exploration division, and he led the deal that created
the Rio-Ivanhoe partnership. Both men appear to have an affinity for Oyu Tolgoi. They also are
known to be personally friendly in spite of the widening rift between the two companies. Over the
summer Mr. Albanese stayed at Mr. Friedland‘s home in Ulaanbaatar.
Ivanhoe and Oyu Tolgoi stand to be the most important venture of Mr. Friedland‘s career. That, say
some, is why this owner of 20 per cent of shares wants to ensure a good outcome. Seeing the
project through and possibly selling at a premium might also expunge his reputation as Toxic Bob, a
name he earned in 1993 when one of his early gold projects leaked cyanide, causing an
environmental disaster.
―He has gotten hundreds of millions of dollars from Rio so far,‖ the banker continued, ―but the
[Oyu Tolgoi] copper deposit is clearly worth billions.‖ Rio‘s rigid agreements with Ivanhoe, which
owns 66 per cent of Oyu Tolgoi, may give the Canadian miner less flexibility than is appreciated. In
2006, when its Mongolian project carried heavy political risk, it agreed a financing deal with Rio
that essentially gave the Anglo-Australian miner a path to ownership that it could exercise in 2011.
Over the years Rio has released project financing in return for tranches of equity. Over the past
year it has raised its stake from 19.7 per cent to 34.9 per cent. In Canadian law there is no level
above which a shareholder must make a bid for the full company.
Rio‘s agreements with Ivanhoe, however, stipulate a maximum stake of 47 per cent until October
2011, when a ―standstill agreement‖ preventing takeover moves lapses. It is toward that October
2011 date that both companies are hurtling, amid attempts to outmaneuver each other. Ivanhoe
has pushed back the date of the standstill agreement by adopting a poison pill. So far the
companies have not yet agreed on a Canadian arbitrator to hear Rio‘s request that the defense be
struck down.
Today the Oyu Tolgoi mine is taking shape in a bleak area of Mongolia‘s south Gobi desert. Mongolia
has become one of the world‘s leading frontiers for metals and mining, largely because its rich
deposits of copper and coal lie so close to the border of China. Oyu Tolgoi‘s strategic position has
led to speculation that Ivanhoe could find a white knight in a state-owned Chinese company.
But the 2006 agreement gives Rio right of first refusal over any offer made from a third party. This
places Ivanhoe in the dangerous position of offering its shares to a bidder, only to see Rio pre-empt
and possibly move to immediate control of the company. Ivanhoe‘s best tactic, said one person
involved in the 2006 deal, may be to find a bidder whose offer is so high that Rio cannot follow.
Chinalco, the Chinese state-owned aluminum producer, is one potential bidder for Ivanhoe, as it is
attempting to diversify out of aluminum. Chinalco, however, is also Rio‘s largest shareholder. That
raises the possibility that Chinalco would be more likely to join with Rio to take control of the
group than pay a high premium to buy Ivanhoe on its own.
―There aren‘t that many players who can play,‖ said one Canadian banker familiar with both
companies. ―This project is about the big boy miners and governments. It‘s about countries as big
as China and companies as big as Rio or BHP. The permutations are very small.‖
Source: The Financial Times
OYU TOLGOI TO SPEND MNT36 BILLION ON TRAINING 3,300 WORKERS
Oyu Tolgoi LLC will spend MNT36 billion on vocational training for some 3,300 people in the next
three years. A memorandum of mutual understanding to this effect was signed between Minister of
Education, Science and Culture Yo.Otgonbayar, Minister of Social Welfare and Labor T. Gandhi and
Mr. Keith Marshall, Executive Director of Oyu Tolgoi LLC.
Work on the program has been under way for some time now, and 1,000 people have until now been
registered by the Ministry of Education, Science and Culture to study in selected vocational training
centers starting from October. According to the Prime Minister's instruction, the remaining 2,300
will be registered in November in the provinces.
After finishing training, they will be tested and those found suitable will be selected for work in the
7. Oyu Tolgoi project.
Source: Montsame
HUMAN RIGHTS COMMISSION FINDS QUESTIONS FOR TRAINEES VIOLATE LAW
The National Human Rights Commission (NHRC) has concluded that several questions Oyu Tolgoi LLC
is asking those who wish to join its vocational training program are in violation of the labor law. An
applicant has to mention if he/she is member of a political party, and if yes, which party; and also
to give details of any close relative who works for a State organization, or a fully or partly State-
owned economic entity, or an international organization such as the UN, the Asian Development
Bank or the World Bank.
The NHRC feels a company should not have such data. About 3,000 of the trainees are expected to
be offered employment at the mine project, and their families would include 15,000 people, and
relatives a much larger number. The issue came to light when some Oyu Tolgoi LLC employees drew
the attention of the Parliamentary Human Rights Sub Council to the question about a month ago.
The MPs referred the matter to the NHRC which has now concluded that the company‘s questions
violate the human rights of citizens guaranteed and also the labor law in several provisions.
Source: News.mn
ULAANBAATAR RAILWAY MEETING TO NAME NEW HEAD POSTPONED
The meeting of the Executive Board of the Russia-Mongolia joint venture Ulaanbaatar Railway,
scheduled for the end of September, has been postponed, without assigning any reason and without
setting a date. The Board has six members, three each from the two sides. It is believed that the
Russian members had intimated they were too busy to come in September.
The meeting is important as it will select the next head of the company. It is the turn of a Russian
to be nominated, but the Mongolian side hopes for a change in tradition as Mr. D.Jigjidnyamaa has
been appointed the acting head after the previous Mongolian incumbent had retired.
Source: English.News.mn
PEOPLE WANT TO KNOW MORE ABOUT PROGRESS ON ERDENET TAVAN TOLGOI
When media recently asked Mr. B. Enebish, Executive Director of Erdenet MGL, how and when
members of the Executive Board of Erdenes Tavan Tolgoi would be selected, his answer was a curt
―I don‘t know‖. This new company is to be responsible for everything to do with putting the Tavan
Tolgoi deposit into operation, yet the people of Mongolia are told nothing about when it will begin
the real work, who will manage it and, more important, if their selection will be done in secret.
This is all the more surprising as Parliament gave the go-ahead for formation of Erdenes Tavan
Tolgoi, as a daughter company of Erdenet MGL, as long ago as July 7, but the government, which is
supposed to implement this resolution, is remarkably reticent about how it is moving. From time to
time Mr. Enebish tells the nation that movement of soil has begun in parts of Tavan Tolgoi, or that
sites for camps have been chosen, but he does not share any information on the really important
things. He says work is going on schedule, as evidenced by the advertisement seeking an Executive
Director for Erdenes Tavan Tolgoi, but people would like to know that more is done and would also
like to be reassured that decisions are taken openly.
Source: Zuunii Medee
ECONOMY
PM SEES CANADA AS “A CRUCIAL PLAYER IN MONGOLIA‟S DEVELOPMENT”
Outside Mongolia‘s Government Palace, a massive statue of Genghis Khan looms over the city‘s
central square. It is a symbol of the days in the 13th and 14th centuries when the Mongol Empire
conquered its neighbors and became one of the most powerful in the history of the world. Inside
the palace today, Prime Minister S. Batbold is dealing with a much more modest but equally
imposing challenge: raising the standard of living for his tiny population of three million people.
Unlike many of his predecessors, he is turning to the capital markets, and partners that include
Canada, to do it. In a wide-ranging interview in his office, Mr. Batbold talked about the need to
introduce more tools of a market economy to his country, including a truly international stock
exchange. He also sees Canada, which is the second-biggest investor in Mongolia after China, as ―a
crucial player in the country‘s development‖.
―I think Canada is a good example, and could even be a model for Mongolia. There are a lot of
natural similarities between our two countries,‖ he said, pointing out that both are cold, sparsely
populated and have extremely powerful neighbors on their borders. Mr. Batbold, 47, is now in
8. Canada for his first official visit to the country, and the first by a Mongolian leader since 2004. He
went to Ottawa after a visit last week to New York, where he addressed the United Nations and
reportedly met with Wall Street investors.
Read more…
Mongolia has done almost everything possible to open its doors to outside investment in recent
years, but Mr. Batbold is aware that a lot more needs to be done. The country is only 20 years
removed from the days of Soviet control, and is still finding its feet as an established democracy.
Relics of the Soviet era can be found everywhere, including a surreal statue of Lenin in front of
Ulaanbaatar‘s most famous hotel.
As Canadian mining companies in Mongolia know well, breaking free of that legacy has been a
challenge, with rapid progress but occasional missteps along the way. Like many developing
nations, Mongolia is massively rich in natural resources, but does not have enough to show for it. Its
unemployment rate has remained well above 30% for years, and has remained high despite the
rapid development of its resources in recent years.
Mr. Batbold, an entrepreneur with a successful business background who became prime minister
last year, believes that something as simple as a functioning stock market would allow Mongolians
to benefit from the billions of dollars of investments being made in the country. Mongolia has had a
stock exchange since 1991, and while it lists many domestic companies, liquidity is extremely poor.
It is open for less than two hours a day and does not have the standards needed to attract any
international companies. ―It doesn‘t really operate as a capital market,‖ Mr. Batbold said.
By the end of the year, he hopes to open a proper international exchange managed by a leading
global player. While the choice has not been made, the London Stock Exchange Group PLC is the
frontrunner. To help kickstart the exchange into relevancy, Mongolia is planning an initial public
offering of Tavan Tolgoi, a large government-owned coal mine, as well as other state assets that
should be attractive to domestic and foreign investors. Mr. Batbold wants foreign players with
Mongolian business interests to list as well, but that could be tougher: They remain wary of the lack
of international standards and the general lack of demand from the Mongolian market.
But as least one Canadian company is eager to take the plunge. SouthGobi Resources Ltd., the coal-
mining spinoff of Vancouver-based Ivanhoe Mines Ltd., hopes to be the first international company
with a Mongolian listing. It has already hired an armada of lawyers to help the government deal
with the impediments to foreign listings, from the proper defining of a security to putting in
limitations on directors‘ liabilities.
―The government says it wants [foreign companies] to list on the Mongolian Stock Exchange.
Everyone else says ‗that‘s stupid, there‘s no rules for foreign companies, blah blah blah,‘ ‖ said
Alex Molyneux, SouthGobi‘s chief executive. ―But we want to list there because we want the
Mongolian public to participate in this creation of value. And it‘s much easier for them if they have
a market at home for the stock.‖
While it may seem far-fetched to investors today, Mr. Molyneux envisions a day when Mongolia is a
source of capital along the lines of Dubai, with a powerful sovereign wealth fund and massive
resource-related revenue as it realizes the wealth from its mineral deposits.
He wants to get in early. ―Maybe we can only do USD10 million [on the Mongolian exchange] at
first. So what? In Kazakhstan, the stock market increased 1,000% in size in the space of about six
years. It‘s going to happen in Mongolia,‖ he said.
Of course, Mongolia‘s biggest source of wealth in coming years will be Oyu Tolgoi, the massive
copper-gold deposit being developed in the Gobi Desert by Ivanhoe Mines and its partner Rio Tinto
Ltd. They continue to co-operate despite an ongoing spat at the corporate level. After years of
tense negotiations, an investment agreement on the project was reached between the government
and Ivanhoe last year. Mine construction is now moving quickly, with about 4,500 people at the site.
By the time full production is reached, expected by 2018, Oyu Tolgoi should make up an astonishing
30% of Mongolia‘s gross domestic product on its own.
Mr. Batbold visited the site with his Cabinet in August and was amazed at what he saw. ―It‘s
something really astonishing,‖ Mr. Batbold said. ―I have never seen such a sophisticated
underground operation. Probably this is even unique on a world scale.‖ He views Oyu Tolgoi as just
one example of what can happen when companies from Canada and elsewhere invest in Mongolia,
and he hopes it is a catalyst for more Canadian investment in the country, and closer links between
the two nations across a number of sectors.
―We see that Canada has made great success in many areas, and we think it‘s interesting to learn
from the Canadian experience. Free trade, technology transfer, mining, agriculture and
infrastructure, are all very important,‖ he said. ―We need to make a more sophisticated
institutionalized society here, so we need to learn from your experience.‖
9. Source: Financial Post
CANADA, MONGOLIA AGREE TO DEEPEN ECONOMIC TIES
Canada's Prime Minister Stephen Harper and his visiting Mongolian counterpart, S. Batbold on
Tuesday agreed to deepen their nations' economic ties, eventually opening free trade talks. "Our
countries are committed to developing our relationship," Harper said in a statement. "We look
forward to further strengthening our ties, including cooperating on institutional reform and peace
and security."
The two leaders signed memorandums of understanding to improve trade and market access, as
well as to share expertise on agriculture technology, standardization and running a non-partisan
public service. Mongolia‘s public service would likely seek Canada‘s Public Service Commission‘s
advice on avoiding corruption, recruiting and training, and government regulation of industry.
As well, they agreed to fast-track negotiations on a deal to protect and promote foreign
investment, holding a next round of talks by year end. Ratification of the Foreign Investment
Promotion and Protection Agreement "would be followed by bilateral exploratory discussions
regarding a possible agreement on free trade," Harper's office said.
Canada is the second-largest overall foreign investor in Mongolia after China, with more than
CAD600 million invested in the country. In 2009, two-way merchandise trade was valued at CAD164
million. China, Russia and India all have interests in the uranium being mined in Mongolia –
sometimes leaving Canadian mining firms caught in the middle. Earlier this year, Canadian-owned
Khan Resources took legal action against the government after a mining license was revoked.
Source: AFP, The Globe and Mail
CONVERGENCE OF THREE BOOMS MAKES IT A GOOD MOMENT TO OPEN A MONGOLIAN BOURSE
The Mongol conqueror Gengis Khan may have been globalization‘s most ardent early supporter. But
Mongolia has taken its time embracing international capital markets. Now this ―mortar economy‖
(the country is wedged between Russia and China, two of the BRIC countries) may be set for rapid
growth.
Mongolia is on the verge of opening a new national stock exchange. The market will finally plug the
landlocked nation into the grid of global finance, facilitating privatizations, investment and the
flow of capital to would-be entrepreneurs among its three million people. And the money almost
certainly will flow. Renaissance Capital reckons Mongolia‘s economy, while small at around USD6
billion, will be the world‘s fastest growing over the next five years, increasing to USD23 billion by
2013. Handling that growth will be a big challenge.
Luckily for Mongolia, it doesn‘t, for example, have to reinvent the wheel with its bourse. The
London Stock Exchange is the front-runner among four contenders to run the new Ulaanbaatar
exchange. In theory, that will allow the nation to vault overnight from markets not so different
from the Naran Tuul bazaar right to electronic trading.
That should help the government start its privatization program. It is committed to handing a tenth
of all proceeds to its citizenry, almost a third of which is still nomadic. Developing a modern
exchange means Mongolians can receive tradable securities in state companies with market prices.
That should avoid the missteps of Eastern European nations that handed out vouchers without
obvious value that were quickly accumulated by today‘s oligarchs. There are also plenty of case
studies that may help Mongolia manage cash inflows and their potential impact on its currency, the
tugrug, and its economy.
Perhaps more by luck than judgment, Mongolia‘s tardy return to the global scene may also be well
timed. It is estimated to have the world‘s second-biggest reserves of copper and uranium, and the
11th biggest stock of coal. Put it all together, and some eight centuries after its last big
international venture, Mongolia stands to benefit from the convergence of three booms: in China, in
commodities and in emerging markets.
Source: The New York Times
MSE WILL CHANGE, SOONER RATHER THAN LATER
Russian funds made a hoopla out of the leading RTS index giving the Chinese stock market a
drubbing over the last decade, returning five times as much, or a bit more than 750%. But they go
quiet when you mention Mongolia, the best performing market in the world over the last decade,
up a bit more than 1,600% over the same period.
The Russians needn't be too abashed, as the two exchanges barely warrant comparison: Moscow
sees a daily turnover of some USD2 billion- USD3 billion a day and half the investors are foreign,
whereas the Mongolian Stock Exchange (MSE) has a daily turnover on a good day of just USD100,000
10. and there are almost no foreign investors to speak of. Indeed, a businessman with a gold Visa card
and a penchant for a flutter on a mining stock could move the MSE index by several points on his
own.
The MSE is tiny. The entire market capitalization is a mere USD500 million. There are no global
custodians in the country, making it all but impossible for foreign investors to buy shares, even if
they wanted to. And the trading is subject to manipulation and razor-thin free floats.
Reform of the market has yet to start and its existence remains the legacy of the privatization
process in the 1990s. Many of the companies currently listed are the end result of the voucher
privatization programme, where the Mongol and Russian experiences are very similar with managers
walking off with their companies. Moreover, some of these companies are now defunct (but remain
listed), while others that are operating don't bother to meet the financial reporting requirements
because no one has got round to enforcing the rules.
But change will come, sooner rather than later. The MSE is currently considering bids by the London
Stock Exchange, Sweden's OMX HEX and South Korea's main exchange to provide management
services for the national exchange and supply it with new trading technology. A decision on the
winner is expected before the end of the year. "We are offering them technology as well as business
development," says Mr. Jon Edwards, who spearheads the LSE's business in Eastern Europe. "The
market is small and the listings need to be cleaned up, but the potential is phenomenal. Mongolia
could do better than Kazakhstan if they can put all the pieces in place."
Source: businessneweurope.eu
REUTERS “MISREPORTED” PM ON LONDON STOCK EXCHANGE
The Prime Minister‘s Foreign Policy Advisor O. Och and the Director of the Press Office have
clarified that the Reuters interview with Mr. S.Batbold in New York (carried extensively in the
Mongolia media and in the NewsWire last week) was ―misleading‖ in that the Prime Minister had not
made any categorical mention of the London Stock Exchange being the front runner in the race to
be awarded the contract for privatizing and restructuring the Mongolian Stock Exchange. All he had
said was that the LSE was among the three present favorites for winning the bid.
Source: Udriin Sonin
LSE OFFERS HELP AND SUPPORT TO DEVELOP CAPITAL MARKET IN MONGOLIA
The conference organized this week by the London Stock Exchange (LSE) in Ulaanbaatar discussed
issues relating to investment in Mongolia, the future of the Mongolian Stock Exchange (MSE),
corporate governance and plans to develop the capital market. The LSE had held a similar
conference last year and followed it up with a Mongolian Companies‘ Day at LSE in the summer.
Ms. Tracy Piers of the LSE later told journalists that work should begin without delay on developing
the capital market in Mongolia, so that the expansion in mining received financial support. LSE
would help sustain the flow of foreign investment in Mongolian companies if it was asked to act as
advisor to the MSE. Much preparatory work will be needed before any IPO or bond sales and the LSE
is ready to offer its support. Refuting a suggestion that the LSE had organized the conference to
bolster its prospects in the MSE selection race, Ms. Piers said the LSE is confident its reputation,
expertise, and experience will be duly noted.
Source: News.mn
TOO MUCH MONEY ALL AT ONCE WORRIES ECONOMISTS
Once one of the poorest nations on earth, the biggest problem Mongolia will have to face in the
near term is coping with too much money arriving all at once. A raft of mining projects are
expected to bring billions of dollars into the USD5-billion economy over the next decade, with
USD4.6 billion arriving in the next three years alone from the Oyu Tolgoi copper-gold mine being
developed by Ivanhoe Mines.
Mongolia was walloped along with the rest of the region by the international economic crisis, and
then smacked by a severe winter. Nevertheless, the country continues to enjoy one of the strongest
recoveries of any country in the world (albeit from a low base). The agricultural sector was
particularly hard hit by a winter so harsh that it killed one in three animals of herders, but the
construction and services sectors held up well and actually put in growth of 8.3% and 20%
respectively in 2009.
All in all, the Central Bank is very upbeat on the country‘s future over the next few years. After the
nasty contraction in 2009, the economy is expected to grow by 7-8% for the rest of the year, Mr. N.
Zoljargal, deputy governor, told investors at a recent conference in Ulaanbaatar. The International
Monetary Fund agrees, forecasting 7.1% and 7.2% growth in 2011 and 2012 respectively.
11. The major problem facing Mongolia is how to manage the wall of money that will hit once Oyu
Tolgoi starts producing. The fiscal stability law, adopted on June 24, aims to constrain fiscal
spending to sustainable levels, as well as keep expenditure under the rate at which the economy is
growing. It also demands that a portion of the OT revenue is invested overseas to offset the
possibility of rising exchange rates and an increasingly uncompetitive manufacturing sector, a
condition commonly known as Dutch Disease.
The rising tide of dollars flowing into the country is already making itself felt on the national
currency, the MNT, and the central bank is trying to reign in the fast appreciation of the currency
that could put a brake on growth. In August, the MNT dipped below 1,300 to the dollar, a new
record, but had settled at around 1,323 at the start of September after a 17-month period of
stability. Longer term, the MNT is expected to continue to appreciate, which is likely to pull in
more investment and imports.
Read more...
M2 Money supply has also expanded fast as the central bank tries to absorb the incoming capital,
but despite concerns raised by the World Bank, Mr. Zoljargal insists that "inflation is under control".
2010‘s inflation rate is forecast by the central bank at 18%, whereas the World Bank predicts over
20% by the end of the year.
Even so, inflation will get a kick as the Government has promised to grant an MNT 1.5 million
(USD1,145) "gift" next year to each and every Mongolian as part of the two major parties‘ election
promise. The government says it will attempt to soften the blow to the economy by dribbling the
money out in the run-up to next year's elections, but the gift is still worrying economists.
Source: www.stockhouse.com
DRAFT STATE BUDGET FOR 2011 SHOWS SURPLUS
The Government Wednesday approved the draft 2011 state budget, the Social Insurance Fund
budget, and the Human Development Fund budget. These will now be submitted to Parliament for
its final approval. The total income in the three budgets plus local budgets is estimated at
MNT3,114.1 billion, or 39.7% of the GDP, and the total expenditure at MNT3,250.8 billion, or 41.5%
of the GDP. The deficit is MNT136.7 billion.
Taken separately, the state budget income is MNT2,302.3 billion and expenditure MNT2,250.2
billion, showing a surplus of MNT252.0 billion. The HDF budget income will be MNT328.9 billion, and
expenditure MNT795.9 billion, which is MNT461.0 billion more than in 2010. The HDF budget thus
shows a deficit of MNT467.0 billion.
Source: English.News.mn
MONGOLIA TEETERS ON THE BRINK OF A MINING BOOM
Over a bowl of mare's milk, Narnjil, a chubby, middle-aged herder contemplates how mining could
shape the future of his country. Inside his yurt on the outskirts of Ulaanbaatar there is no electricity
so Narnjil knows little of the world delivered through TV and the internet. But he knows all about
Oyu Tolgoi, and about Tavan Tolgoi. Big mining projects are "very good for our country", Narnjil
says.
Some Mongolia watchers say the country is on the cusp of a natural resources boom, thanks to
China's appetite for commodities. But there is a big if - it all hinges on whether Mongolia's mercurial
government manages to put the right partnerships and policies in place.
"The country is sitting on so much coal. For example, it could mine continuously for 10,000 years
before it ran out," Graeme Hancock, the World Bank's senior mining specialist in Mongolia, said.
According to research by Russian stockbroker Renaissance Capital, Mongolia has the 11th biggest
coal reserves in the world. It also has the planet's second-largest copper reserves after Chile; the
world's second-largest uranium reserves behind Australia as well as significant deposits of gold, lead
and zinc. The problem is money, or the lack of it. The government does not have the cash to pay
for capital-intensive mining, and is wary of selling the country's assets too cheaply to foreigners, or
of turning the nation into China's quarry.
Meanwhile, some Mongolia watchers fear the spoils of any resources revolution will not trickle down
to the public. By some estimates, Oyu Tolgoi will eventually create 80,000 jobs. But locals do not
have the necessary skills, so foreign miners are likely to import expatriate workers.
While Mongolia's mineral wealth is enormous, "its poverty rate is even more impressive", World
Vision's Juergen Wellner says. Last year, Mongolia's gross domestic product was only USD4.2 billion,
annual per capita income totaled USD1,630 compared with USD6,600 in China. Roughly one-third of
the population has no access to clean drinking water, and World Vision estimates that more than a
third of Mongolians live on less than USD1 a day. Most Mongolian men do not make it past the age of
12. 65; women live to 70 on average.
Read more…
A tour of the capital city gives some idea of the economic situation. Few roads are paved, groups of
unemployed men stand idle during the day, swigging vodka, and, according to World Vision,
abandoned children often live in tunnels beneath the city.
Like Narnjil, one-third of Mongolia's population is herders, who rely on their livestock for survival.
The fragility of that lifestyle was highlighted last winter when heavy blizzards blanketed the
countryside in snow, and temperatures plunged below minus 50 degrees Celsius in a severe deep
freeze the locals call a dzud. At least 130,000 animals, or about 3 per cent of the total population,
froze to death, the World Bank estimates. Motioning outside the yurt to his family's small collection
of horses and goats, Narnjil mimics a shiver and says: "We lost quite a few."
Today, his friend Luvsandugar is visiting from Ulaanbaatar. Munching on a nomad's snack of pungent
cheese made from sheep's curd, the old man whose mind is clear as a bell at 109 years old, agrees
with Narnjil that mining will be good for Mongolia. It is already paying dividends for his family -
both grandsons are working as carpenters at Oyu Tolgoi. "They bought me a mobile telephone,"
Luvsandugar says, with a toothless beam.
Oyu Tolgoi is a landmark project backed by foreign investors that is set to kick-start Mongolia's
economy and by becoming a key resources supplier to China. Its developer Ivanhoe Mines expects
the mine to produce 540,000 tons of copper and 670,000 ounces of gold a year when it reaches peak
productivity in 2018. Eurasia Capital forecasts that this project alone will increase Mongolia's
economic output by up to 35 per cent a year after the mine begins operating in 2013.
"In a world in which China continues to grow at eight per cent a year, you are going to get a
monster boom in Mongolia," Christopher Wood, chief economic strategist at stockbroker CLSA in
Hong Kong, said. "With GDP growing 30 per cent a year because of the big mining projects, it's the
most interesting story in Asia at the moment."
Others argue that such optimism is premature. That is partly because the next big project in the
pipeline, Tavan Tolgoi, also looks set to take a long time to get going. The deposit has an estimated
1.5 billion tons of coking coal, which is used to make steel and sells at higher prices than thermal
coal, which is used for electricity.
According to Eurasia Capital, Tavan Tolgoi could generate USD4 billion in royalties annually for
Mongolia's cash-strapped government from the date production starts. That all depends on
production starting, though. And up until now, the government has pursued a development model
for Tavan Tolgoi that "simply will have to change", Frontier Securities' Mendoza says.
At first, the government was widely expected to fund the project by selling a stake to an
international mining company. Analysts say there were nibbles from global mining majors, including
Switzerland's Xstrata and BHP Billiton. Then, in an about-face, Mongolia's government announced in
February that it had decided to hold on to 100 per cent of the project. On August 30, the
government invited global mining companies to bid on the mine's management contract. "I cannot
work out how the contractors would get paid," the World Bank's Hancock said.
To raise cash to fund Tavan Tolgoi, the government hit on selling a 10 per cent stake to investors on
Mongolia's stock exchange, which opened in 1991 and boasts 350 companies. But the Mongolian
stock market is too small to handle such a large initial public offering. Investment banks estimate
that, all told, Tavan Tolgoi is worth up to USD20 billion but the total market capitalization of the
Mongolian exchange is just USD940 million, according to Frontier Securities. Because most
Mongolians are too poor to own and trade stocks, a paltry USD14 million worth of shares changed
hands on the exchange in the first eight months of this year, Frontier says.
Mendoza believes some bidders will present counterproposals, involving them taking an equity stake
in the asset to fund its development. But that could reignite government debate, potentially
delaying the start up of Tavan Tolgoi.
Meanwhile, Hancock cautions that ordinary Mongolians have become prematurely optimistic about
reaping rewards from mining projects during their lifetimes. "People are expecting a lot of changes
too soon," he said. What's more, Hancock says, because locals do not yet have specialist skills, the
trickle-down effect will mostly come from mining companies using local suppliers.
Some people warn that a lack of government investment in education also risks simply turning
Mongolia's herders and blue-collar workforce into "metal-bashers", which might not increase their
quality of life. "You have a risk where the population is just focusing on labor-intensive skills rather
than capital-intensive jobs," Mendoza said. But, he adds, this situation is probably inevitable, at
least for a generation. Building an expert Mongolian workforce "will take a generation", Mendoza
says.
Source: South China Morning Post
13. NOT ENOUGH SKILLED MANPOWER TO FILL JOBS ON OFFER, AND THOSE TO COME
The Labor Office says 22% of the registered unemployed are highly educated while 68% have no
professional training. This lack of qualification is why many working places cannot be filled. Offices
and organizations do not have skilled professionals, health organizations look in vain for nursing
sisters, the transportation sector does not have enough mechanics, and apartment owners fail to
find locksmiths. The end result has been that most high-paying jobs that need skills are grabbed by
foreign workers while unemployed citizens roam the streets, drunk or begging.
There are 1.1 million people in the capital city, a 3.1% increase over last year. Almost 70% of the
city population are in the working age group. Of them 57.5% have some work, 14.8% are
unemployed, 22% are studying, and 3.1% are disabled. More and more working age people are
migrating to Ulaanbaatar from the countryside. In the last five years the population has increased
by 38,200 of whom 18,300 are working age.
Demand is also likely to increase. The Ministry of Social Welfare and Labor estimates are that there
will be 22.5% more jobs in agriculture next year, 6.5% in construction, 9.4% in trade, 7.8% in hotels
and restaurants, 3.6% in industry and 6.6% in mining. Some time ago, the Millennium Challenge
Account-Mongolia also listed heavy weight mining vehicle drivers and operators, road construction
workers, all types of mechanics and repairmen and agricultural workers among those to be most in
demand.
There appears to be a failure in policy. If the interests of the employer and the unemployed cannot
converge, society stares a bleak future in the face.
Source: English.News.mn
NAMBC MEETING FOCUSES ON LACK OF SKILLED MANPOWER FOR PROJECTS
Delegates at the 13th Annual Investors Conference of the North America-Mongolia Business Council,
which began on Tuesday, did not discuss the usual issues such as investing capital, exploiting mines
and evaluating business risks. Instead, they focused on availability of manpower at all levels and
how other operational requirements can be met.
Their conclusion, after a detailed study of what Mongolia can offer, is that the education system
here is not up to world standards and that even the trained labor force does not meet market
requirements. They are wary of Government efforts to expand vocational training facilities
because, as a delegate said, these still depend on obsolete Russian equipment and techniques.
Mongolian participants were quick to point out that the reforms in fact cover everything from
training manuals to teaching skills and that all the new training centers will be equipped with
modern software.
Source: Ardiin Erkh
BUSINESSMEN VOCAL ABOUT HAVING TO “PAY BRIBES AT EVERY STEP”
An open debate on Monday on corruption in the private sector was marked by a series of complaints
from participating businessmen. The owner of a sewing company said, ―I have had to pay bribes,
small and big, for all the 17 years I have had my business. Money has to be paid before I get any
order and the list of those demanding money is getting longer. Now it has become such that I get a
contract to supply students‘ uniforms only after paying a bribe to the director, other officials and
even to teachers. Everybody has to be kept satisfied. In other sectors also, officials in state
organizations demand donation from private businessmen whenever there is some anniversary or
celebration. Much of the money thus collected goes into private pockets. The disease is spreading
daily.‖
Another entrepreneur said, ―My experience is that private enterprises cannot take a step if they
don‘t give bribes to corrupt officials everywhere. Nothing will move if money is not paid. The whole
system of tenders is full of holes.‖
A company director said, ―There is no law to protect intellectual property rights in Mongolia. A
company develops some software, only to find some worker leaving with it and joining another
company, or even selling it elsewhere while staying on at his job. We train our employees but when
they achieve skills, other companies promise them high salaries to leave us.‖
The Anti-Corruption Authority (ACA) recently found in a survey of private enterprises that 81.2% of
the respondents felt the country was full of corruption. Some 27% had experience of corruption in
state organizations, 32.4% in capital and province administrative organizations, and 40.7% in the
private sector. The ACA feels that corruption in the private sector has gone up in the last two
years. A new form of corruption has developed recently. With mining companies offering high
salaries, applicants for jobs there are tempted to offer money to middlemen who say they can
arrange for final selection.
14. Source: Ardiin Erkh
MPs AND CEOs COME TOGEHER TO TALK ABOUT PPP
The Mongolian National Chamber of Commerce and Industry (MNCCI) recently brought together
Members of Parliament and senior executives of top enterprises, including CEOs and Directors, for a
meeting on Development-Investment-Public-Private-Partnership (PPP). MNCCI Chairman S.
Demberel said ―the summit‖, as he called it, had been so named as ―development can come only if
there is investment, and investment will come only if there is partnership between the public and
private sectors‖. The meeting was aimed at identifying areas of development where PPP could be
useful, clarifying the mechanism for this, and specifying programs where medium-term cooperation
can begin as early as next year.
Mr. Demberel said business owners and private sector entrepreneurs were not satisfied with the
progress of the much-heralded plans to reform the business environment in 2010. Not that nothing
had been done, but much more could have been achieved in areas like improving competitive
capacity, stabilizing the business environment, and increasing access to credit. Many laws need to
be amended in keeping with the changing needs of doing business at present times.
Source: Onoodor
MEETING DEPLORES DISCREPANCY IN UNEMPLOYMENT DATA
Participants at the Ulaanbaatar-2010 labor conference expressed dismay that while the National
Statistics Office puts unemployment at 11.2%, the figures from the Ministry of Social Welfare and
Labor says it is only 4%. The conference was organized by the Labor Office and among those present
were representatives of the Ministry, trade unions, and the employers‘ federation. They deplored
such discrepancy in official data and called for better employer-employee relations. The
conference was the first preparatory step to a national labor conference planned in the near
future.
Source: Ardiin Erkh
COMPENSATION CLAIMS FOR LICENSE CANCELLATION WILL BE THOROUGHLY CHECKED, SAYS MP
The Forest and Water Board in The Ministry of Nature, Environment and Tourism has so far
identified 6,959 spots in 109 areas of 18 provinces as being part of a river basin or forest where the
law says there cannot be any mining-related activity, a working group to help implement the law
heard on Tuesday.
MP B.Bat-Erdene of the group later told media that they were concerned about how to keep the
areas free of ninjas or artisanal miners, as all efforts to regulate them have failed so far.
There was also the problem how much of an area under license has to be part of a forest to extend
the ban there. ―Should we stop mining if only 6-8% of the licensed territory is woodland? And just
how far does any water basin extend?‖ he asked and hoped things will be clarified.
Asked where the money for the legally mandated compensation would come from, the MP said all
claims would be carefully scrutinized and all details of expenses that are to be reimbursed will be
checked for justification. The compensation would be paid in phases. The Mines Ministry feels the
amount could total USD 6-7 billion or MNT7-8 trillion. The special license of 890 economic entities is
likely to be canceled and 39% of them have already submitted compensation claims for MNT4.7
trillion.
Source: Ardiin Erkh
200 ATTEND WORKSHOP ON RECLAMATION
Representatives of over 200 mining enterprises attended a recent workshop in Bulgan province
where they discussed technical and biological reclamation of the mined area once extraction is
over. There have been frequent complaints that this mandatory provision is followed mostly in the
breach and the State Specialized Inspection Agency (SIA) has recently tightened its monitoring of
reclamation.
Participants visited the reclamation site of the Ereen coal mine, 18 km north of Saikhan soum. The
workshop was organized by the SIA in collaboration with a German organization, BGR, and Peabody
Winsway Resources.
Source: Onoodor
RUSSIA‟S BAN ON BEEF IMPORT HITS MEAT PRODUCERS
A team of meat producers has urged President Ts. Elbegdorj to intervene and persuade Russia to lift
the ban on import of beef without delay. Russia imposed the ban following an outbreak of the foot
15. and mouth disease in eastern Mongolia but has continued to buy horse meat. The decision has hit
the meat industry badly. With no export, meat stocks are not moving, and there is no fresh
slaughter of animals. Fall in demand for animals has hit herders and failure to sell the ready meat
has hit the trading companies. This is the peak season for trade in animals and meat, and meat
producers are unable to pay back their bank loans. Lack of money is also making it difficult for
them to prepare the meat stock for Ulaanbaatar, Darkhan and Erdenet. The team told officials at
the President‘s Office that delay in providing vaccines had contributed to the spread of the disease.
Source: News.mn
MONGOLIA MAIN SOURCE OF UNPROCESSED MOLYBDENUM FOR CHINA
Mongolia was China‘s top source of unprocessed molybdenum ore in August, the latest figures from
the General Administration of Customs of China show. However, this was less than 10% of China‘s
total import of 1,982 metric tons of molybdenum ore and concentrate in the month, which was
down 67.62% year on year, of this amount, 1,839 mt consisted of roasted ore and concentrate,
while just 143 mt was unprocessed. Mongolia was the source of 107 mt of this.
Source: www.platts.com
JAPAN CALLS FOR IMPROVED INVESTMENT ENVIRONMENT
At a meeting on the sidelines of U.N. General Assembly session in New York, Japan‘s Prime Minister
Naoto Kan urged his Mongolian counterpart S. Batbold to improve the business environment in his
country to spur bilateral economic exchanges. He welcomed the Mongolian policy on cooperation in
mineral resource development in the country and expressed the hope that Japanese companies will
take part in joint development of such resources as coal, copper, uranium and rare metals. Mr.
Batbold reaffirmed his commitment to improve conditions for foreign investment and said they
looked forward to investment from Japan in resource development projects including those
concerning rare metals.
Source: Kyodo
USE OF SME LOANS UNDER EXAMINATION
A three-day check was conducted this week on how small and medium enterprises (SMEs) in the
Ulaanbaatar area are using the loans they took from the SME Development Fund. Altogether 142
enterprises of the city have received MNT6.7 billion of credit, with the maximum amount pegged at
MNT100 million. They will be asked to repay the loan without delay if it is found that the intended
purpose has not been followed.
Source: Onoodor
LABOR LEADER WANTS MINIMUM WAGES IN PRIVATE SECTOR DOUBLED
Mr. S. Ganbaatar, head of the Mongolian Federation of Trade Unions, has proposed that the
minimum wages in the private sector be increased from the beginning of next year from the present
MNT108, 000 per month to MNT216, 000. He justified the demand for a 100% rise by saying there
should be some parity between sectors, and that private sector employees also have to live.
Told that many employers feel their meager profits will not permit them to raise wages, Mr.
Ganbaatar suggested that they ―could talk with us or with their employees in an open manner‖.
Source: Zuunii Medee
CANADA EXPANDS AGRICULTURAL COOPERATION WITH MONGOLIA
Canada is increasing its agriculture cooperation with Mongolia with the signing of an important
Agriculture Memorandum of Understanding (MoU) between the two countries. Signed in the
presence of the Prime Minister of both countries, the MoU will be key to enhancing bilateral
relationships.
"International trade and cooperation is key to making sure Canadian farmers can make their money
from the marketplace", said Agriculture Minister Gerry Ritz. "Our Government is working hard to
build partnerships around the world and this is another example of our progress."
The MOU will offer a sharing platform between the two countries and give Mongolia and Canada a
better understanding of each other‘s systems, policies and regulations. It will facilitate sharing of
best practices as well as strengthen agricultural cooperation and commercial relations between the
two countries.
This cooperation will help foster alliances between commercial interests, facilitate the exchange of
technology, expertise and be a catalyst for future trade. For example, Canada has commercial
opportunities in agricultural machinery and livestock production in Mongolia. Canada‘s world class
16. genetics will certainly contribute to further the development of Mongolia‘s animal industry.
Source: Media Relations, Agriculture and Agri-Food Canada
USE OF PUBLIC MONEY TO HELP JOINT VENTURE MAKE UP FOR LOSS CRITICIZED
The recent government decision to pay MNT783.1 million from the state reserve fund to a joint
venture thermal power plant Cement-Lime to help it recoup accumulated losses of MNT1,193.4
million came after several Cabinet members had expressed disapproval for using public money to
bail out any private or semi-private business. In something like a compromise, Minister of Finance S.
Bayartsogt was allowed to allocate the money to Cement-Lime, but the State Property Committee
has also been asked to work for its full privatization.
Source: Onoodor
MCA PROJECT TO ARRANGE TRAINING FOR MEDIA ON PROPERTY RIGHTS
A training for journalists has been arranged by the Mongolian Millennium Challenge Account under
its Property Rights Project. It will cover aspects such as land development, verification of land
rights, the registration system, and the legal environment. The journalists will also learn about
mapping, land-related taxes and the concession law. They will visit a family in a ger area where the
Property Rights Project is being implemented to discuss and observe the advantages of owing land.
USD 17.2 million has been earmarked for the project, aimed at improving the legal environment to
allow for reliable methods of registration and at clearing obstacles in registering privatized land.
Source: Montsame
ADB WARNS ON CHINA‟S LONG-TERM GROWTH
China‘s average annual rate of economic growth over the next two decades will fall to little more
than half the current level as its ability to sustain huge investment declines, according to the Asian
Development Bank. Such a slowdown would have a dramatic effect on China‘s place in the world,
significantly delaying the moment at which its economy surpasses that of the U.S. as the world‘s
largest, having overtaken Japan as the second largest earlier this year.
Jim O‘Neill, head of global economic research at Goldman Sachs, forecast in 2009 that China could
overtake the US by 2027. However, that prediction relied on China achieving growth of ―close to 10
percent for many years‖. In its first official attempt to quantify China‘s long-term growth
prospects, the ADB said on Tuesday that its baseline projection was just 5.5 percent on average for
the 20 years to 2030, compared with 9.4 percent between 1981 and 2007 and a forecast 9.6 percent
this year.
Growth could average 6.6 percent if China implemented reforms to reduce its dependence on
investment and increase productivity through improvements in education, property rights and
research and development, the ADB said. Jong-Wha Lee, ADB chief economist, said many other
countries in Asia would face the same growth problem because their rapid rates of economic growth
over the past three decades had been underpinned by unsustainable levels of investment. ―We
don‘t think these countries can go back to the previous levels of strong growth that they had before
the global financial crisis,‖ he said.
Read more…
The ADB report forecasts that South Korea‘s long-term economic growth will fall from an average of
6.3 per cent to a baseline projection of 3.9 per cent, Taiwan‘s from 6.1 per cent to 3.1 per cent,
Indonesia‘s from 4.8 per cent to 4.4 per cent and India‘s from 5.5 per cent to 4.5 per cent.
In the shorter term, the ADB said Asia‘s V-shaped recovery from the global financial crisis was
gathering pace in spite of economic weakness in the U.S. and Europe. In its Asian Development
Outlook 2010 Update, which includes the long-term forecasts, the ADB said that Asia excluding
Japan would grow by 8.2 per cent this year, well above last year‘s 5.4 per cent. The development
bank said in April that this year‘s growth was likely to be restricted to 7.5 per cent. It maintained
its forecast for 2011 at 7.3 per cent.
The bank raised its forecasts for all its sub-regions, with south-east Asia predicted to grow at 7.4
per cent this year, East Asia at 8.6 per cent, south Asia at 7.8 per cent and central Asia at 5.1 per
cent.
Source: The Financial Times
POLITICS
PM URGES MORE HELP FOR LANDLOCKED COUNTRIES
Speaking at a round table meeting in New York last week on "Ensuring special needs of the most
17. vulnerable countries", organized as part of the 65th session of the UN General Assembly in New
York, Prime Minister S.Batbold said Mongolia‘s total expenses for transit transportation had grown
to an amount equivalent to 8-10 percent of the country‘s Gross Domestic Product. He cited this as
an example of the severe problems a developing country faced if it was landlocked. Mr. Batbold
said that the seaport nearest to Mongolia was 1,500 km away, in China.
He also described how the global climate change had affected Mongolia's economy, particularly the
traditional livelihood of its herdsmen. "Deprived by death of livestock of their only source of living,
herdsmen are leaving the countryside and moving to cities, to make a new life in conditions they
are not used to. Mongolia needs to create jobs and we repose a lot of hope in the mining sector. For
this, we have to arrange for extensive vocational training," Mr. Batbold said.
He urged international support to enable developing and vulnerable countries take up programs to
develop small- and middle-sized businesses.
In New York, the Prime Minister also met delegates of the Millennium Challenge Corporation (MCC)
headed by Chief Executive Officer Daniel Yohannes, and asked them to consider raising the number
of local businessmen participating in MCC projects, and to see if present programs can be speeded
up so that new ones can begin before the MCC project ends.
Source: English.News.mn
20 „MISSING‟ CHINESE MIGRANT WORKERS FOUND, AWAIT REPATRIATION
Twenty Chinese workers, previously reported missing, have been staying in Mongolia illegally, and
will be repatriated soon, a Chinese diplomat has said. "There are exactly 20 Chinese migrant
workers in this case. None of them has a work visa, thus their stay in Mongolia is illegal," said Liu
Jimin, consul of the Chinese embassy in Ulaanbaatar.‖ The embassy is working with Mongolian
authorities on their repatriation."
According to a newspaper in Hubei Province, a total of 84 migrant workers from Huarong town,
Ezhou, went to Mongolia through a Huangshi-based labor agency. The first group of them, holding
tourist visas, departed August 17. However, after they arrived in Mongolia, their passports were "all
collected and taken away." What happened next is similar to slavery. "Mongolians could buy any one
of us at the price of 4,000 Chinese yuan ($597)," a worker who returned to Hubei earlier this month
told the newspaper. "We were treated like animals."
Another worker who returned to China said that they slept in a hut and did not have much to eat.
They were all sent to different working places and there was always someone there to watch over
them during the night. Their passports had been taken in order to prevent them from escaping.
"There are tens of thousands of Chinese migrant workers being brought into Mongolia to work in
construction and mining sectors like this," an Ulaanbaatar-based source who is quite familiar with
the issue said. "Those Chinese job agencies usually promise the workers a monthly salary of 5,000 to
8,000 yuan." Those agencies usually take the Chinese to the Consulate-General of Mongolia in
Erenhot, a major China-Mongolia border city in the Inner Mongolia Autonomous Region, and apply
for tourism visas for them, the source added.
Source: Global Times
RUSSIA WINNING THE MONGOLIAN “GREAT RAIL GAME”
Analogies to the 19th century's "Great Game" are becoming a bit tired as they get applied to
almost all projects in Central Asia, but another one has been playing out close to the hills where
Rudyard Kipling's characters Kim and his horse-trading friend Mahbub Ali roamed. Except this time
the Russians are winning.
For companies developing Mongolia's raft of mining projects that will start coming on line next year,
the biggest problem is not finding the coal and other minerals, but getting them to the markets of
Russia and China, as Mongolia is about as far away from anywhere in the world as it's possible to be.
Currently, the only major rail route that runs through the country is the Irkutsk-Beijing spur of the
legendary Trans-Siberian express. Even so, Mongolians, terrified of becoming little more than a raw
materials appendage to China, have been resisting Chinese proposals to build a rail line straight
south over the border to China's underdeveloped northeast districts. Instead, they have plumped for
a longer route across the country towards Russia's Vladivostok in the Far East, which has a spur that
turns back into China from Russia.
In June, Mongolia's parliament said priority would be given to a rail link from the 40-year-old Tavan
Tolgoi coalmine to an as-yet uncompleted industrial park in Sainshand, where the coal can be
processed before being shipped north to Russia. The proposed route makes little economic sense, as
the direct route south to China's hungry markets is far cheaper. However, the longer route hands
Mongolia invaluable geopolitical choices: like building expensive oil and gas pipelines, rail links
18. suffer from the same problem that once they are finished, you can only cut off your customers by
cutting off your revenues. The Russian route allows the government in Ulaanbaatar to play the two
emerging superpowers off against each other.
And the rail link is a big project. Mongolia's Deputy Minister of Transport A. Gansukh has said that
the country would need to spend USD8.8 billion to build 5,600 km of critical railway infrastructure
over the next few years to deliver its surging mineral output to foreign markets, instead of the
shorter 1,500-km route to the nearest Chinese port.
Still, some critics say that Mongolia is sacrificing too much to improve its political hand in the
game. Mr. Graeme Hancock, senior mining specialist with the World Bank, told reporters that the
margins on exports of raw materials could be considerably less if goods are sent out via Chinese
ports instead of Russian ports. According to a World Bank report, coal shipment via a rail link to the
Chinese city of Baotou will cost USD33 per ton, whereas the cost to transport it to the Russian
border is USD95. To ease the pain (and to get the job), Russian Railways have already offered a 65%
discount on transport tariffs.
The Mongolian Parliament is not totally unmindful of commerce; a direct route to China is still in
the cards, but only once the Russian route has been built.
Source: Business News Europe
REGISTRATION DEADLINE EXTENDED BY A MONTH
The last date for the new civil registration has been extended by a month to November 1. This was
found necessary as only about half of the 2.7 million people have registered themselves so far since
the program began in July.
Source: English.News.mn
PROVINCE AUTHORITIES TRAINED ON ANTI-CORRUPTION MEASURES
Governors, administration officials, and elected citizens' representatives from all provinces
attended a three-day training this week at the National Center of Law on prevention of corruption
and establishment of justice. The training was co-organized by the Anti-Corruption Authority (ACA)
and the UNDP. The course included a discussion of measures likely to prevent corruption and to
provide justice at the local level, and the best methods to implement them successfully.
Source: Montsame
BEIJING, MOSCOW BOOST TIES ON ENERGY
China and Russia signed a string of agreements earlier this week to boost their new energy
partnership, although finalization of a long-awaited gas-supply pact remained out of reach. The
agreements—signed in the presence of visiting Russian President Dmitry Medvedev and his Chinese
counterpart, Hu Jintao— illustrated the strength and breadth of the new energy partnership,
covering Russian crude oil and gas supplies to China as well as cooperation in coal, electric power,
energy saving, renewable energy and nuclear power.
"The large scale of the delegation I have brought this time shows the high level of cooperation
between the countries, and also shows the prospective future for our relations," Mr. Medvedev said
at the signing ceremony. The two leaders also attended a ceremony marking the completion of the
first oil pipeline between their two countries, which is designed to carry 300,000 barrels a day to
China over the next 20 years under a USD25 billion loan-for-oil agreement struck last year. The
pipeline is the centerpiece of a new era of energy cooperation between Russia and China, now the
biggest producer of energy and its biggest consumer, respectively.
Moscow and Beijing fell out in a row over Communist ideology in 1956. For most of the past two
decades their relations have been confined to Russian arms sales to China, and occasional
cooperation in international organizations. But now Russia wants to divert its energy exports from
Europe toward Asia, while China wants to secure new energy sources and supply routes. Both
countries are keen to expand bilateral trade.
The agreements included one between China Huadian Corp., one of China's five major power
utilities, and Russia's TGK-2, a territorial generating company, on a joint power project in the
Russian city of Yaroslavl. Russia Atomic Energy Corp. signed a technological design contract with
CNNC Jiangsu Nuclear Power Corp. for the third and fourth nuclear reactors at Tianwan Nuclear
Station.
The state-run China National Petroleum Corp., or CNPC, signed an agreement with Russia's state-
run oil giant, Rosneft, on the supply of filling oil for the Russia-China crude oil pipeline. OAO
Gazprom, Russia's state gas monopoly, said CNPC will also agree to a 30-year contract to take 30
billion cubic meters of natural gas annually from the Russian gas exporter.
19. Read more…
Russia's Deputy Prime Minister Igor Sechin said he hoped that agreement would be finalized in the
first half of 2011, and if this happened, the first deliveries would be in 2015. The two sides have
been in talks since 2006 on building two gas pipelines to deliver up to 70 billion cubic meters of gas
annually to China, but price issues remain unresolved. In the meantime, China has lined up supplies
from Central Asia and through a network of liquefied natural gas-receiving terminals it is building
along its coastline.
Other agreements were designed to boost trade, and promote the use of each other's currencies in
settling trade between the two countries, which both advocate creating a new global reserve
currency to replace the USD. Industrial & Commercial Bank of China Ltd. and Russia's VTB Group
increased a trade finance agreement, allowing the Russian state-controlled bank to support yuan-
and euro-denominated trade with China, as well as USD trade, VTB said. Mr. Hu was reported by
China's state-run Xinhua news agency as saying that China will also support a Russian proposal to
commence direct trading between the Chinese yuan and the Russian ruble on each country's
interbank foreign exchange market.
Source: The Wall Street Journal Asia
USAID PROJECT HELPS THOSE WITH DISABILITIES ACHIEVE A BETTER LIFE
There are 115,000 registered people with disabilities (PWDs) in Mongolia, according to the Ministry
of Social Welfare and Labor. However, no general education schools, colleges, universities, or
technical/vocational or training centers are accessible for them. Currently, 146 teacher-training
colleges and universities do not have standards for disability training or how to work with children
with a disability.
Things have begun to change with programs that are part of USAID's Fostering an Inclusive
Environment for Local Disabled (FIELD) Project, implemented by Mercy Corps. Since its inception in
January 2009, the FIELD project has trained over 2,650 disabled people in Mongolia. In December,
project leaders advocated successfully for approval of "National Standards for Accessible
Construction and Walkways" by Mongolia's State Department of Measurement and Standardization.
As a result of the campaign, 23 accessible ramps already have been built by government and private
sector agencies at their own cost, and several agencies have also modified their facilities to
accommodate the needs of PWDs.
The FIELD trainings increased PWDs‘ understanding of their situation and their potential. But much
more important has been the regular contact with other people and with the public, which give
them confidence and make daily life more and more pleasant. One of them says that her
participation in the trainings was helpful because she finally understood: ―I can do something to
improve my own situation.‖
Source: FrontLines, USAID
U.S. OFFICIAL STRESSES NEED TO COOPERATE FOR SUSTAINABLE ENERGY FUTURE
In an address titled Building a Sustainable Energy Future, delivered at the Mongolian University of
Science and Technology on September 22, U.S. Deputy Secretary for Energy Daniel Poneman chose
to focus my remarks on what the United States is doing – and what it can do with Mongolia – to build
a prosperous, secure, and sustainable energy future. Their ―excessive dependence on fossil fuels‖
puts the environment of both nations at risk. In addition, ―both countries – indeed, all countries –
face the shared challenge of climate change‖.
Saying that ―the question before us is how do we meet energy demand in a manner that enhances
security, promotes prosperity, and fulfills our responsibility to future generations to avert
catastrophic climate change‖, Mr. Poneman maintained, ―We must build a new, sustainable energy
future where we use energy efficiently and rely on alternative sources of energy to meet demand.
Building this future won‘t be quick or easy, but it is essential.‖
Many fear that ―transitioning toward this future will raise the cost of development and restrict
economic growth‖, but Mr. Poneman said there is no law of physics that says prosperity is
proportional to carbon emissions. ―In fact, moving towards a low-carbon future provides
opportunities to participate in the growing clean energy industry and drive sustainable economic
growth.‖
Recognizing that coal is likely to comprise a major source of electricity generation for the
foreseeable future, the USA has set a goal to advance carbon capture and storage technology to the
point where widespread, affordable deployment is possible within 10 years. Clean coal
technologies could be of great interest to Mongolia, which is heavily dependent on coal.
Read more…
20. Calling the energy and climate challenge ―a global problem that demands global solutions‖, Mr.
Poneman said, ―We can do more together than we can do alone.‖ The USA is working directly with
Mongolia on a number of efforts to promote sustainable development. Civil nuclear cooperation is
one of these. Mongolia is also part of the Methane to Markets Partnership, which is chaired by the
U.S. Environmental Protection Agency and supports projects to capture methane and use it as a
source of clean energy. The Millennium Challenge Corporation is collaborating on energy efficiency
and wind energy projects in Mongolia. And USAID is helping with efforts to increase transparency
and accountability in the energy sector.
This cooperation extends beyond the government-to-government level to a personal level. This
fall, 1,000 student visas were issued to Mongolian students to study in the USA, with both the public
and private sectors helping support this exchange.
Source: U.S. Embassy
SUKHBAATAR‟S STATUE REMOVED FOR REPAIRS
Sukhbaatar Square will spend the winter without the statue of the national hero who gives the
place its name. It was been removed for repairs on September 15 and will not be back before
February. The pedestal will also be rebuilt in granite.
Source: Zuunii Medee
1,200 „SMOKELESS‟ TAXIS IN ULAANBAATAR PLANNED
There are plans to introduce 1,200 new taxis in Ulaanbaatar in the coming months to reduce air
pollution. The first 400 cars are to hit the streets in December, the next 400 in January and the last
400 in May and June. They will all be Hyundai‘s 2010 Elantra and will have engines that emit less
smoke.
Source: News.mn
GENGHIS KHAN STILL POINTS THE WAY FORWARD
I was in Mongolia to look at the past, but in the end it was the future that surprised me most. The
Mongolian Airlines flight out of Seoul leaves not from the shining upper levels of the new Incheon
terminal, but from a dustier lower level better suited to frontier departures. If the red-cheeked
Mongols and the odd smattering of trekkers needed any further confirmation of the untamed nature
of their destination, an announcement that the flight was delayed indefinitely due to gale force
winds in Ulan Bator was quite enough.
Eventually, towards sunset, we came into the proudly named Genghis Khan international airport,
gliding low over an endless vista of shadowy hills and golden grassy plains. Warned that drought and
harsh winters had decimated herds, bringing the nomads into squatter camps on the outskirts of the
capital, I was prepared for something akin to the wild west but found this not quite so. Admittedly,
the airport recalls former Soviet times, but the city center, while small, is clean and boasts a
number of quite passable hotels.
With a population of two and a half million, Mongolia, it seems, also has hope. A young, well-
educated Mongol tells me that the country can build its economy by cautious dealings with China,
that the small population makes it easier for the government to manage change, and that he plans
to travel abroad so that he can return with his young family and make his mark in the new
Mongolia.
Mongolian national identity is vested in its nomadic past, and inevitably in its heroic age under
Genghis Khan. A short distance outside the capital, in a wide grassy valley, a massive stainless steel
statue of the khan on horseback stands gazing out towards the Ordos river of his childhood. Nearby
a uniquely Mongol theme park, reached only by four-wheel drive, provides an authentic Mongol
experience, right down to the spooky camp of the shamans, set in a rocky cleft among wind-blown
pines.
Mongolia is not the only country to elevate bloodthirsty tyrants to the status of national heroes. But
the splendid gleaming presence of this extraordinary monument, not in a city square, but in a vast
open landscape, surrounded only by diminutive tent camps for tourists, speaks much of Mongol
pride and the likelihood that among the older generation there is also hope for the future.
Source: The Guardian Weekly
21. ANNOUNCEMENTS
“MONGOLIA: MONEY & MARKETS”, ULAANBAATAR, OCTOBER 5-6
―Mongolia: Money & Markets‖, a financial forum jointly organized by PrimeInfo Centre and the
Mongolian Financial Regulatory Commission, will be held in Ulaanbaatar on October 5-6. BCM is the
official supporting organization of the event. The forum will be the first of its kind in Mongolia,
bringing together policymakers, financial market participants like banks, insurance and share-
dealing companies, investment banking, non-banking financial service providing companies, saving
and lending partnerships. They will discuss government policy on financial market regulations, and
all other issues related to it.
The Forum‘s official website is www.mongoliamoneymarkets.mn.
___________________________________________
MONGOLIAN-FRENCH BUSINESS MEETING, ULAANBAATAR, OCTOBER 13
The Foreign Investment and Foreign Trade Agency (FIFTA) will hold a ‗Mongolian-French business
meeting‘ on October 13 in Ulaanbaatar as part of the program of the official visit to Mongolia of Ms.
A.M.Idrac, France‘s Secretary of State for Foreign Trade on October 13-14. The aim of the meeting
is to expand bilateral cooperation in trade and investment and to present the Mongolian investment
environment to visiting French businessmen, and to facilitate direct contacts.
Around 20 French delegates from sectors like Transport, Construction, Infrastructure, Mining, Food
and Agriculture, Tourism etc will attend the meeting. Mongolian companies interested in
participating should contact FIFTA (contact person: Т.Enkhbayar, Phone: 320706, 326040,
99899381; Fax: 324076, Email: enkhbayar@investmongolia.com) for registration.
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MONGOLIA INVESTMENT SUMMIT 2010, HONG KONG, OCTOBER 14
The Mongolia Investment Summit 2010 in Hong Kong on October 14 will explore the many exciting
investment opportunities on offer, as Mongolia takes advantage of its mineral-rich geology and
location next to China - the world‘s fastest growing consumer of natural resources.
Conference highlights include
* A range of 10-minute company presentations showcasing major investment opportunities in
Mongolia
* Insights into the investment climate in Mongolia from a range of high-level government and
industry speakers including D. Zorigt, Minister of Mineral Resources and Energy
* Update on the privatization of State-owned enterprises from D. Sugar, Chairman, State Property
Committee
* Insights from the leading companies in Mongolia‘s banking and investment community
* Keynote from Rio Tinto on the Oyu Tolgoi project and the implications for future investment
To view the full line up of speakers at the Summit, visit www.MiningInvestmentInsight.com.
Mongolia Investment Summit is co-organized with Foreign Investment and Foreign Trade Agency
(FIFTA) ensuring the full support of the Mongolian government and key organizations within
Mongolia including the Business Council of Mongolia and the Mongolia National Mining Association.
The Business Council of Mongolia is a supporting association for this event and as such there is a 15%
discount for their members. Please indicate your membership when registering online.
Trade and Development Bank of Mongolia is the Platinum Sponsor, and the Gold Sponsors are Khan
Bank, Mongolia Development Resources, Mongolia Energy Corporation and SouthGobi Resources.
To book, please visit www.mininginvestmentinsight.com or call +852 2219 011.
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“BSPOT" on B-TV
BTV (Business TV) now telecasts a 10-minute English-language news program called BSPOT every
evening from Monday to Friday at 21:30, taking most of the stories from the BCM NewsWire.
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“MM TODAY” on MNB-TV
BCM is pleased to announce that Mongolian National Broadcasting continues its cooperation with
BCM on ―MM Today‖. This English news program is aired every Friday for 10 minutes and is
scheduled for 21:15 tonight. Tune in to watch this program that reports stories from today‘s BCM
22. NewsWire.
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NEW POSTINGS ON BCM WEBSITE‟S „MONGOLIAN BUSINESS NEWS‟
The draft Tavan Tolgoi Investment Agreement which was submitted by the Government to
Parliament is posted in both languages to BCM‘s Mongolian websites, (www.bcmongolia.org) and
(www.bcm.mn), ‗Mongolian Business News‘ for your review.
We are now posting some news stories and analyses relevant to Mongolia on the BCM website's
‗Mongolian Business News‘ as they come, instead of waiting until Friday to put them all together in
the weekly NewsWire. The NewsWire will, however, continue to be issued on Friday, and will
incorporate items that are already on the home page, so that it presents a consolidated account of
the week‘s events.
SPONSORS
ECONOMIC INDICATORS
23. INFLATION
Year 2006 6.0% [source: National Statistical Office of Mongolia (NSOM)]
Year 2007 *15.1% [source: NSOM]
Year 2008 *22.1% [source: NSOM]
Year 2009 *4.2% [source: NSOM]
August 31, 2010 *11.2% [source:NSOM]
*Year-over-year (y-o-y)
CENTRAL BANK POLICY LOAN RATE
December 31, 2008 9.75% [source: IMF]
March 11, 2009 14.00% [source: IMF]
May 12, 2009 12.75% [source: IMF]
June 12, 2009 11.50% [source: IMF]
September 30, 2009 10.00% [source: IMF]
May 12, 2010 11.00% [source: IMF]
CURRENCY RATES – September 30, 2010
Currency name Currency Rate
US dollars US 1,325.59
Euro EUR 1,804.39
24. Japanese yen JPY 15.85
British pound GBP 2,097.08
Hong Kong dollar HKD 170.88
Chinese yuan CNY 198.16
Russian ruble RUB 43.61
South Korean won KRW 1.16
Disclaimer: Except for reporting on BCM‘s activities, all information in the BCM NewsWire is
selected from various news sources. Opinions are those of the respective news sources.