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![mining development, the block cave mining method. "This method requires construction of
significant underground infrastructure prior to ore production," according to Rio Tinto. "In
anticipation of this need, Rio Tinto Technology & Innovation has been engaged in a long running
development program to significantly improve both the safety and speed of constructing
underground infrastructure such as shafts and tunnels."
Mr. David Stewart, chief executive of Leighton Holdings, detailed the involvement the company has
in Mongolia, and its commitment to contribute to the local communities. "The bulk of the mine
workers are local people. We employ 680 local people and we have a long term view at the mine
site." He said the facilities in the country are conducive to successful mining operations and the
company strives to understand and participate in the cultural customs. "When I've been there, I've
been very impressed with the airport, phone service, and the camp site was extraordinary. There
are 35 ethnic groups and 45 religions, and they work in every province in the country.‖ Mr. Stewart
said the weather conditions in Mongolia often presented a challenge. "The environment is harsh,
and temperatures range from minus 40 to plus 40."
Mr. Ch. Khashchuluun, Chairman of the National Development and Innovation Committee in
Mongolia, said one of the benefits of Mongolian mining is the type of people who are available to
work there. "Mongolia has a very young population," he said, adding that with the movement of the
new growth areas, the nation is in need of infrastructure and investment in schools, hospitals and
other necessary services.
Mr. Sloane said a World Bank economist estimates the Mongolian Government will need to invest
around AUD4 billion in infrastructure over the next decade, which is set to cause headaches as the
budget of the Government is around the same size as the city of Brisbane. According to Mr.
Khashchuluun, 800 km of railway is planned for 2011, and 3,000 km more over the next four years.
Some 600 km of specialized highways and truck auto roads for mining is also in the planning, as well
as copper smelting, gold refining, coal processing and oil processing plants and facilities.
At Tavan Tolgoi, there is a plan to build an 11,000-km railway to Russia, despite it being only 300
km from China, so as not to be dependent on the Chinese. Mr. Sloane explained that the Mongolians
―are wary of both the Russians and the Chinese, but are hedging their bets, and would actually like
to turn some of its thermal coal into electricity after which it could export the power generated."
Mr. George Lhagvaa, managing director of Hunnu Coal, perfectly demonstrated the extent of the
mining boom in Mongolia at the forum, when he told of a conversation with his mother. "The other
day my 70-year-old mother wanted to discuss how mining affects Mongolia. That shows its impact
on the country's economy," he said. "Growth in Mongolia can be compared to growth in the Western
Australian mining regions."
Mr. Rod Commerford, Austrade's Senior Export Advisor, told the forum that Mongolia is at the
beginning of its mining boom, and ―the business opportunities for Australians are huge, because we
are generally viewed more favorably than Canadians and Americans for our direct approach to doing
business‖. Mr. Thornton added that Australian miners dominate the junior miner space.
Source: Australian Mining
ASIAN CITIES’ APPEAL TO WEALTHY INCREASING
Six of the 10 cities worldwide that most appeal to wealthy individuals as places to live and invest
will be located in Asia within a decade, according to research that highlights how the region is
rapidly closing the gap with the west. The 2011 Wealth Report, published on Wednesday by Citi
Private Bank, shows that Shanghai, Mumbai and Beijing are expected to shoot up the rankings by
2020, outpacing western rivals. Mumbai – expected to rise from 38th place this year to seventh by
2020 – stands out as one of the fastest movers. Shanghai is forecast to leapfrog Beijing to become
the third-highest ranked city in the world.
New York and London will fight off competition from rapidly growing markets to retain the first two
spots, according to the report, but other European cities – including Paris, Brussels, Berlin and
Frankfurt – are set to experience a decline in popularity.
The increasing appeal of Asian cities reflects the region‘s strong economic growth rates relative to
western markets, as well as high employment levels, lower taxes and ―liveability‖ – their good
education systems and infrastructure. ―When compared [with] other regions, Asia continues to be
an attractive location for global talent, as it offers good job opportunities as well as a relatively
easy environment for family relocation,‖ said Mr. Kwang-Meng Quek, global co-head of real estate
investment at Citi.
The yearly report looks at the attitudes of wealthy individuals based on a survey of 160 of Citi‘s
global wealth advisers. Their views represent about 5,000 investors in 36 countries who are each
worth more than USD100 million on average. Assessment criteria included the level of economic](https://image.slidesharecdn.com/bcmnewswireissue162-160215153601/85/08-04-2011-NEWSWIRE-Issue-162-10-320.jpg)
![Jiabao, the Chinese premier, told reporters last month. The government predicts that headline
inflation will continue to rise and peak around June or July. But official economists made the same
forecast at the start of last year and were proved wrong.
An overabundance of bank credit resulting from the government‘s post-crisis economic stimulus
package is the main cause of inflation, although officials also blamed ―external factors‖ such as
soaring oil prices.
Read more…
As well as raising rates, Beijing has also increased the proportion of deposits that banks must hold
in reserve with the central bank nine times since the start of last year in an attempt to limit the
amount they can lend. Large banks in China are now subject to required reserve ratios of at least
20 per cent.
Analysts remain divided on whether China‘s economy is slowing or if more concerted action is
needed to avoid overheating and runaway inflation. The Chinese economy grew 10.3 per cent last
year and Beijing has announced plans to bring the headline rate down while trying to encourage
more balanced and sustainable growth.
Source: The Financial Times
POLITICS
MONGOLIA SOUNDED ABOUT STORING NUCLEAR FUEL SPENT ELSEWHERE
The Obama administration has held informal talks with Mongolia about the possibility that the
Central Asian nation might host an international repository for its region's spent nuclear fuel, a
senior U.S. diplomat said last week. U.S. Energy Department officials and their counterparts in
Ulaanbaatar are in the early stages of discussion and there has been no determination yet about
whether to proceed with the idea, according to Mr. Richard Stratford, who directs the State
Department's Nuclear Energy, Safety and Security Office.
Speaking at the biennial Carnegie International Nuclear Policy Conference, Mr. Stratford said a
spent-fuel depot in the region could be of particular value to Taiwan and South Korea, which use
nuclear power but have few options when it comes to disposing of atomic waste. "If Mongolia were
to do that, I think that would be a very positive step forward in terms of internationalizing spent-
fuel storage," he said during a panel discussion on nuclear cooperation agreements. "My Taiwan and
South Korean colleagues have a really difficult time with spent fuel. And if there really was an
international storage depot, which I have always supported, then that would help to solve their
problem."
The United States provides fresh uranium rods to selected trade partners in Asia, including South
Korea and Taiwan. For Mongolia to accept and store U.S.-origin spent fuel from these or other
nations would require Washington to first negotiate a nuclear trade agreement with Ulaanbaatar.
Although Energy Department officials have reportedly engaged in informal talks with Mongolian
representatives for several months, Mr. Stratford has not yet had any contact with Ulaanbaatar on
the matter, he said. It is not yet certain whether formal negotiations on a nuclear trade pact will
move forward.
Read more…
Energy Department officials traveled to Mongolia last fall for meetings on the matter, according to
Mr. Mark Hibbs, a senior associate with the Nuclear Policy Program at the Carnegie Endowment for
International Peace. He chaired the discussion on nuclear cooperation. "It was a fruitful discussion,"
Mr. Hibbs said. "They went into some details [but] it was very exploratory."
In most nations, the idea of accepting foreign spent fuel has seemed an anathema. Russian officials
have discussed building an international repository on their territory, but the idea appears to have
faded due to domestic opposition. Nuclear expert Jeffrey Lewis said he wonders if the situation
would be any different in Mongolia. "I think these guys are fooling themselves [if they] believe we
will put a spent-fuel depot in Mongolia. I don't think Mongolia is going to accept being a regional
spent-fuel repository," he said.
Mr. Hibbs said that as "a country that's surrounded by two big powers" -- Russia and China --
Mongolia is "trying to carve a niche out for itself economically in the region". Broadening its
involvement in the nuclear energy sector might serve as just such an economic lever, he said. It
could seek to step up mining of its natural uranium deposits and potentially expand into a wider
array of services, such as providing foreign nations with fresh fuel and then taking back the atomic
waste at a later date, according to regional experts. This type of move would come at a time when
neither Russia nor China has acted on similar concepts for what is termed "leasing" of nuclear](https://image.slidesharecdn.com/bcmnewswireissue162-160215153601/85/08-04-2011-NEWSWIRE-Issue-162-13-320.jpg)
![material.
There could also be interest among officials in and outside the Mongolian government in developing
nuclear power to meet that nation's own growing energy needs, according to some sources.
Ulaanbaatar recently signed a memorandum of understanding with Seoul to cooperate on peaceful
nuclear technologies and expertise. Mr. Lewis, who directs the East Asia Nonproliferation Program
at the Monterey Institute of International Studies, said it was difficult to believe that Mongolia
would find it profitable to enter a field that has been dominated for decades by established nuclear
energy powers such as Russia and France.
"I don't understand why Mongolia wants to be involved in the fuel-cycle business to begin with," he
said. "If I were running Mongolia, I could think of a bunch of other things to spend that kind of
industrial investment on before it came down to fuel-cycle services." Nor would it likely prove
politically palatable for Mongolia to become a final destination for its neighbors' atomic waste, he
argued. "Without some compelling evidence -- like a statement by the government of Mongolia that
they're willing to be the region's nuclear waste dump -- I don't see why anybody thinks they would
do this," Mr. Lewis said.
If Mongolia ultimately does see merit in offering nuclear fuel services, inking a nuclear trade
agreement with the United States would be a shot in the arm, Mr. Hibbs said. "Having the blessing
of the US would be very valuable for them," he said. "Mongolia is emerging as a very Western-
friendly country. ... [Getting] the agreement would basically underscore that the US supports the
development of nuclear energy activities in Mongolia."
Mr. Hibbs said it is highly unlikely that Mongolia is exploring its atomic energy options with an eye
toward eventually developing a nuclear weapon. ―I think it's inconceivable that Mongolia would be
interested in nuclear weapons in the environment that they're in," he said. "It realizes that by being
a member of good standing in the [1970 Nuclear Nonproliferation Treaty], it's better served than
getting involved in a hair-brained arms race with either the Russians or the Chinese."
Mr. Lewis had a slightly different take on the matter. "I don't think Mongolia has any interest in
developing a bomb right now," he said. "But if Mongolia wants to move from uranium mining into
the fuel cycle, that could contribute to an unwelcome spread of sensitive facilities."
Source: Global Security Newswire
NEA OFFICIALS DENY REPORTS ON TALKS ABOUT NUCLEAR FUEL STORAGE
Officials of the Nuclear Energy Authority of Mongolia have denied reports that the U.S.
administration has held any talks with Mongolia about setting up an international storage facility for
the region's spent nuclear fuel. They categorically denied that any agreement has been concluded
with any foreign government, company or individual on the matter.
They have asserted that Mongolia is a signatory to the international nuclear non-proliferation treaty
and is committed to using nuclear energy only for peaceful purposes. Besides, it has a law
prohibiting import or transit through Mongolia to a third country of any form of harmful waste. The
Ministry of Foreign Affairs and Trade will ask U.S. officials about the reports.
Source: News.mn
MONGOLIA WILL CHECK WORLD SENTIMENT BEFORE GOING FOR NUCLEAR POWER PLANT
Mongolia will take its cue from the global reaction to Japan‘s nuclear disaster before continuing
with plans to build atomic power plants, according to the deputy chairman of state-owned nuclear
company Monatom. ―It will depend on how the world community reacts‖ to the accident at the
Fukushima Dai-Ichi nuclear station that occurred last month, Mr. T. Gombo said in an interview in
Singapore. ―We don‘t think it‘s a big problem for the industry as a whole. It may be a little setback
in the timeframe.‖
Mongolia, which has at least 1 percent of the world‘s uranium resources, was planning to start
operating its first nuclear power plant by 2020 and build a nuclear fuel center, Mr. Gombo said.
Russia‘s Rosatom Corp. last year set up a venture with Monatom to mine uranium, used to make
nuclear fuel. Rosatom agreed also to help Mongolia develop its nuclear industry strategy.
Japan‘s situation is unlikely to dampen interest in Mongolian uranium deposits or stop the nation
from working with Japanese nuclear companies, Mr. Gombo said. ―Currently there is not much
foreign investment in the uranium sector, but we expect there would be huge investments because
the superpowers -- U.S, Russia and China -- are all interested and competing with one another,‖ Mr.
Gombo said. Mongolia would favor developing its nuclear industry together with the U.S., France
and Japan, as opposed to its two neighbors Russia and China to ―balance‖ its interests, he said.
Source: Bloomberg](https://image.slidesharecdn.com/bcmnewswireissue162-160215153601/85/08-04-2011-NEWSWIRE-Issue-162-14-320.jpg)
![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]
February 28, 2011 *11.0% [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 - April 7, 2011
Currency Name Currency Rate
US dollar USD 1,208.55
Euro EUR 1,726.66
Japanese yen JPY 14.18
British pound GBP 1,973.26
Hong Kong dollar HKD 155.47
Chinese Yuan CNY 184.68
Russian Ruble RUB 42.77
South Korean won KRW 1.11
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.](https://image.slidesharecdn.com/bcmnewswireissue162-160215153601/85/08-04-2011-NEWSWIRE-Issue-162-21-320.jpg)
Uploaded byThe Business Council of Mongolia
08.04.2011, NEWSWIRE, Issue 162
The document is a newsletter from the Business Council of Mongolia that provides news highlights from Mongolia in business, economy, and politics. Some of the key business highlights include: Oyu Tolgoi is expected to begin copper and gold production in August 2012; SouthGobi Resources updated coal reserves at Ovoot Tolgoi; and Winsway Coking Coal plans to issue $500 million in senior notes to finance investments including in Mongolia. Economic highlights include a 30% increase in minimum wages and plans for Mongolian citizens to receive shares in Erdenes MGL. Political highlights discuss Mongolia considering nuclear power and investigations related to riots in July 2010.
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08.04.2011, NEWSWIRE, Issue 162
- 1. BUSINESS COUNCIL ofMONGOLIA NewsWire www.bcmongolia.org info@bcmongolia.org Issue 162, April 8 2011 NEWS HIGHLIGHTS: Business: Oyu Tolgoi to begin production in August 2012; SouthGobi Resources updates NI 43-101 compliant coal reserves for Ovoot Tolgoi; Prophecy Resource on way to changing name; Top 100 Mongolian companies named in 10th annual list; Voyager Resources raising money for Khongor project; Winsway to issue five-year USD500 million senior notes; Aspire Mining confirms high quality coking coal at Ovoot; Shenhua building processing project on China-Mongolia border; Chinalco sees Rio Tinto as key partner; Minmetals in USD6.5 billion bid for Equinox; MIAT boss facing investigation for embezzlement; Golomt Bank, TDB apply for underwriting licenses; MAC Capital welcomes Eurasia Capital to Global Alliance Partners; International SOS runs clinics and centers in 70 countries. Economy: Agreement signed, vests MSE management in LSE; PM suggests incentives for employment generators; MNT800 billion in FDI in 2010; Electricity to cost more from May 1; Minimum wages increased by 30%; Plan to give every citizen one preference share of Erdenes MGL; Speaker asks MSE to submit proposals to develop capital market; LSE to train Mongolians at its own academy; Trade union chief presses for public monitoring of budget expenses; 2-step selection process for projects under Concession Law; Russia sends much less diesel than Mongolia asked for; Government wants domestic services, goods to substitute imports; Mongolia gets ready to become a nation of shareholders; One job per household is an achievable goal, says MONEF head; Deputy PM seeks funds for apartment construction program; Australia rides into the wild, wild east; Asian cities’ appeal to wealthy increasing; London top city for financial services; ADB wants preemptive action to curb Inflation; Australia deals blow to SGX bid for ASX; China ups rates in bid to down inflation. Politics: Mongolia sounded about storing nuclear fuel spent elsewhere; NEA officials deny reports on talks about nuclear fuel storage; Mongolia will check world sentiment before going for nuclear power plant; Probe group says July 1 riots were not “a spontaneous outburst of protest”;
- 2. Ex-President seesgross violation of human, economic rights; Spring session of Parliament begins; Moscow shows Mongolia one way to be rid of corruption; Supreme Court says Green Party rule changes illegal; Draft Right to Information law has several weaknesses; MP’s comment raises questions; Innocents in detention not allowed to go on hunger strike; Mongolia's struggle with liver cancer; China warns of military competition in Asia. *Click on titles above to link to articles. BUSINESS OYU TOLGOI TO BEGIN PRODUCTION IN AUGUST 2012 The Oyu Tolgoi copper-gold project is expected to begin production in August 2012, sooner than forecast, said Mr. T. Ganzorig, Deputy Director of Erdenes MGL which partners with Ivanhoe Mines and Rio Tinto in developing the site. Mr. Ganzorig said expedited construction has helped move the production date ahead. Ivanhoe Mines had earlier said commercial production would begin in the first half of 2013. Source: Reuters SOUTHGOBI RESOURCES UPDATES NI 43-101 COMPLIANT COAL RESERVES FOR OVOOT TOLGOI SouthGobi Resources Ltd. has said that new, independent estimates have updated coal resources and proven and probable mineral reserves contained at its Ovoot Tolgoi complex, comprising the Ovoot Tolgoi coal mine and the Ovoot Tolgoi underground deposit. Independent estimates for coal resources have also been updated for the company's Soumber deposit. Total proven and probable surface coal reserves at the Ovoot Tolgoi complex as of December 11, 2010, are estimated to be 106.8 million tons, approximately 59% of which is classified in the proven reliability or assurance category, and the remaining 41% in the probable category. The Soumber deposit area is estimated to contain measured plus indicated coal resources of 61.4 million tons (approximately 187% increase), with an additional inferred coal resource of 65.8 million tons (approximately 19% increase) as of January 25, 2011. Source: SouthGobi Resources PROPHECY RESOURCE ON WAY TO CHANGING NAME Prophecy Resource Corp. and Pacific Coast Nickel Corp. have signed the definitive agreement to sell Prophecy's Wellgreen PGM Ni-Cu and Lynn Lake Nickel projects to PCNC. Upon completion of the deal, Prophecy will change its name to Prophecy Coal Corp. Source: Prophecy Resource Corp. TOP 100 MONGOLIAN COMPANIES NAMED IN 10TH ANNUAL LIST Even though the Russian-Mongolian joint venture Erdenet Copper Mining is at the top, companies in the private sector dominate the recently published 10th annual list of the top 100 businesses in Mongolia, compiled jointly by the Mongolian National Chamber of Commerce and Industry and the Mongolian Government. Six of the top 20 on the list are mining companies while another six are in the petroleum sector. Ranking is determined by revenue, employment, investment, taxes paid and contribution to social responsibility. Private enterprises accounted for 88 percent of all those employed in 2010, and were responsible for generating around 80 percent of Mongolia‘s GDP. The top 20 companies are Erdenet, MCS Group, Mongolian Alt, Energy Resources, APU, NIK, MobiCom, Boroo Gold, Tavan Tolgoi JSC, JUST Group, Petrovis, Magnai Trade, Sodmongol Group, Monnis International, Nomin Holdings, Wagner Asia, the Shunkhlai Group, Tsairt Mineral, Tavan Bogd Group, and Power Plant No. IV. Source: Udriin Sonin VOYAGER RESOURCES RAISING MONEY FOR KHONGOR PROJECT Voyager Resources has announced a proposed placement and underwritten renounceable rights
- 3. issue to raiseapproximately AUD10.4 million before costs. The funds raised will be utilized to continue exploration and drilling programs on the company‘s recently acquired Khongor Copper Gold Porphyry Project in Mongolia. The Company plans to drill at least 20,000 meters of diamond drill core and reverse circulation drilling on its projects in 2011 with the aim of identifying initial JORC compliant resources later this year. Source: Voyager Resources WINSWAY TO ISSUE FIVE-YEAR USD500 MILLION SENIOR NOTES Winsway Coking Coal, which is bidding for the Tavan Tolgoi deposit, will issue 8.5% senior notes due 2016 in the aggregate principal amount of USD500 million. The estimated net proceeds will be about USD488 million to be used for financing the investment in the subsidiaries, joint ventures and/or certain entities to purchase rolling stock and other transportation-related vehicles and invest in railway-related infrastructure, for financing investments in upstream resources through new acquisitions and/ or joint venture projects and otherwise to secure upstream resources as well as for working capital and other general corporate purposes. Deutsche Bank, Merrill Lynch International, Goldman Sachs and ICBC International Capital are the joint book runners and Deutsche Bank, Merrill Lynch International, Goldman Sachs and ICBC International Securities are the joint lead managers in respect of the offer and sale of the notes. Source: ETNet ASPIRE MINING CONFIRMS HIGH QUALITY COKING COAL AT OVOOT Aspire Mining Ltd. has now received all outstanding raw coal sample analyses from its 2010 drilling program. These results have confirmed the high quality of its coking coal resource at the Ovoot Coking Coal Project in northern Mongolia. Aspire will now incorporate the raw coal data into the Ovoot resource model for future mine planning and open pit optimization. Besides confirming the high quality of the final raw coal, the analysis results also categories Ovoot coal as being high quality bituminous coking coal. A second open hole drilling rig has now been mobilized to site. Aspire has also received an interpretation of two-dimensional seismic program undertaken over the winter. This has provided a number of drilling targets, extending the resource area. It is expected these targets will be progressively tested over the coming months. Two-dimensional seismic work continues to be performed over the Zuun Del Prospect on the eastern portion of the Ovoot license area. Source: Aspire Mining SHENHUA BUILDING PROCESSING PROJECT ON CHINA-MONGOLIA BORDER China Shenhua Energy Co. Ltd., the country's largest coal producer, has planned a huge investment to build a coal processing project on China-Mongolia border to better use coal imports from Mongolia. The government of north China's Inner Mongolia Autonomous Region confirmed on Sunday that construction of Shenhua's project with a planned investment of USD1.5 billion has started in Ganqimaodu Customs Processing Park. Ganqimaodu Customs is China's major energy imports gateway with Mongolia. It handled 7.71 million tons of coal imports last year. The imports of raw coal via the customs soared by 131.8 percent year-on-year in the first quarter to reach 1.6 million tons. The first phase of production at the Shenhua project, slated for 2012, would have an annual capacity of washing 6 million tons of coal, coking 2.4 million tons, and producing 4.8 million tons of methanol and 30,000 tons of tar, respectively. Source: Bernama CHINALCO SEES RIO TINTO AS KEY PARTNER Chinalco, the Chinese aluminum group, has no plans to sell down its shares in Rio Tinto, viewing the mining house as a key strategic partner as Chinalco expands overseas. ―We can‘t go out to fight alone,‖ said Chinalco chairman Xiong Weiping, explaining that co-operation with global miners was essential for overseas development. ―With Rio being one of the top mining companies in the world, Chinalco can learn a lot from them, including in operational management, asset operation and risk management.‖ His remarks on strategic co-operation underline the challenges that Chinese miners face as their expansion plans run into political opposition in resource-rich countries such as Australia. Chinalco has seen its own share of disappointments there, including a failed USD19.5-billion investment in Rio in 2009. Chinalco is Rio Tinto‘s largest shareholder, controlling nine per cent of the global miner, in a symbiotic relationship that has also seen the two companies sign joint ventures for
- 4. projects in Guineaand in China. Mr. Xiong said he was hunting for high-grade copper, bauxite, iron ore and coal resources, the minerals that China needs to fuel its urbanization. ―Our target areas are mainly countries next to China, for example south-east Asia, Mongolia and Central Asia.‖ He also confirmed that Chinalco was keenly interested in Oyu Tolgoi, a copper and gold deposit in Mongolia that is being developed by Rio Tinto and Ivanhoe. ―We hope to contribute Chinalco‘s expertise to the development and construction of this project because it is right on our border,‖ he said, mentioning processing and distribution in particular. The Chinese miner is also in discussions with a Mongolian state-owned company about potential resources projects. Read more… Speculation has long centered on whether Chinalco might sell down its stake, acquired in a dawn raid during the contested USD147-billion bid for Rio launched by BHP Billiton, which ultimately failed. Mr. Xiong said that ―at present, we do not plan to increase or decrease our shares.‖ He added, ―Through our purchases of Rio stock, we developed a deep understanding of Australian law, Australia‘s stance and attitude towards its own resources, and Australian public opinion.‖ Source: The Financial Times MINMETALS IN USD6.5 BILLION BID FOR EQUINOX China‘s Minmetals Resources has launched a USD6.5 billion unsolicited bid for Equinox Minerals, the Australian-Canadian copper miner, in the largest-ever unsolicited takeover attempt by a Chinese mining company, at a time when China‘s miners are increasingly seeking to go abroad. Minmetals‘ interest is another sign of Chinese companies‘ voracious appetite for raw materials, and of the scramble among miners around the world for scarce copper supplies. China accounts for about 40 per cent of global copper demand. Minmetals Resources is a listed subsidiary of Minmetals Group, a Chinese state-owned company that is one of the country‘s largest metals traders. It acquired Oz Minerals, an Australian base metals producer, for USD1.7 billion in 2009. Source: The Financial Times MIAT BOSS FACES INVESTIGATION FOR EMBEZZLEMENT The Criminal Investigation Authority has assessed several charges of corruption and misappropriation of funds amounting to several billions of MNT against MIAT Executive Director Ts.Orkhon and concluded that there is enough merit in them to warrant further investigation. In recent days, many senior officials of MIAT have been condemned for entering into contracts on terms unfavorable to the airline. Source: Undesnii Shuudan GOLOMT BANK, TDB APPLY FOR UNDERWRITING LICENSES Golomt Bank and Trade and Development Bank have applied for grant of underwriting licenses under the Banking Law approved in January 2010. The request from one of the banks has been sent back for resubmission with more supporting documents while the other is being processed. Source: News.mn MAC CAPITAL WELCOMES EURASIA CAPITAL TO GLOBAL ALLIANCE PARTNERS MAC Capital Limited, a founding member of the Global Alliance Partners (GAP), has announced that Eurasia Capital Limited has joined its GAP network. Eurasia Capital, headquartered in Ulaanbaatar, is a pan-regional investment bank with focus on Mongolia, supporting the massive investor interest in its natural resources. It also has capabilities in Russia, China, Hong Kong and Central Asia. It will provide access to and usher investors into the world's largest untapped mining province via all the GAP members. Joining GAP gives Eurasia access to the world-wide network of investment bankers, asset managers, private wealth advisors and securities traders, which compose this fast growing global network. GAP employs almost 2,000 staff in 20 countries and provides international equity and economic research and equity trading capabilities in a multitude of jurisdictions. As a demonstration of the GAP Group‘s support for Eurasia‘s efforts in Mongolia, the member firm Quam Limited, announced that it, through its asset management subsidiary, will launch a new fund investing in the Mongolia market to assist Eurasia to expand its client and product base. In addition, a significant Investors Conference is planned in Ulaanbaatar for GAP Members and their clients in late May, 2011 to further show support for GAP‘s newest partner. Source: Eurasia Capital
- 5. INTERNATIONAL SOS RUNSCLINICS AND CENTERS IN 70 COUNTRIES For international companies, the health and safety of overseas employees can be a significant cost and worry. International SOS is a Singapore-based firm that operates medical clinics and alarm centers in 70 countries, including Mongolia, and also provides clients with security and logistical services, including evacuation assistance. The firm was founded in Singapore in 1985 by Mr. Arnaud Vaissié, now 56 and International SOS chairman and CEO, and his childhood friend, Pascal Rey-Herme, a doctor. Then known as AEA International, the firm had 15 employees. The privately held company, renamed International SOS in 1999, now has 7,000 employees including 1,000 doctors, and said it had sales of USD1 billion in 2010. Asked what executives and doctors can learn from each other, Mr. Vaissié said the training of a physician is to meet with a patient, to do an instant analysis and execute instantly. It's a one-on- one relationship, whereas business is all about group decision. The diagnosis is slow and the execution is even slower. ―Physicians are absolutely convinced that executives are incompetent because where a physician sees a problem, he finds a solution, instantly proposes a solution, and executes a solution. Whereas an executive...three months later it's still not fixed and it's a very complex dynamic. It explains why you have such antagonism between executives and physicians and also such waste in health care,‖ he said. Mr. Vaissié said there are certain qualities they look for in potential employees. ―For physicians, what we're asking them to do is much more complicated than the usual practice because they are outside their home environment, or even in a hostile environment. We recruit people with at least five to 10 years of experience because of the complexity of the job,‖ he said. Read more… Mr. Vaissié feels the challenge in Asia is ―to create strong and stable partnerships‖. They have realized that in Asia, ―if you make the wrong choice of partner, you can never go back—you're doomed. There's no way to fix it.‖ He feels the cost of hiring expatriates is their most expensive component in developing countries, whereas the cost of expertise is higher in developed countries. Source: The Wall Street Journal Asia SPONSORS Khan Bank Eznis Airways Kempinski Hotel Khan Palace Mongolian National Broadcasting Mongolian Star Melchers ECONOMY AGREEMENT SIGNED, VESTS MSE MANAGEMENT IN LSE The London Stock Exchange took over management of the Mongolian Stock Exchange (MSE) with the signing of the Master Service Agreement soon after Thursday midday at the MSE building. Mr.
- 6. D.Sugar signed forthe State Property Committee (SPC) of Mongolia, while the LSE was represented by its CEO, Mr. Xavier Rolet. Both were confident the partnership would be smooth and productive. Prime Minister S.Batbold was present at the ceremony and said in his opening remarks that the development of the Mongolian capital market would be of great significance for the economy and expected the MSE-LSE cooperation to contribute substantially to this. The LSE will charge USD14.2 million for running the MSE for two years under the agreement. This includes payment for the Millennium IT system to be installed at the MSE, and salaries for the LSE management team. An official of the LSE will be appointed Executive Director of the MSE. The SPC will borrow the amount from a consortium of 6 local banks for the time being, and repayment is likely to be made from the state budget when it is amended for the purpose. Source: Zuunii Medee, News.mn PM SUGGESTS INCENTIVES FOR EMPLOYMENT GENERATORS Prime Minister S.Batbold told the third meeting of the National Committee of Employment Support Year on Wednesday that generating or providing employment should not be seen as an end in itself, as the Government‘s goal was to have a more equitable society where there are jobs. He said that family business activity would be supported, as these tend to be more permanent, offering opportunities not just seasonal or occasional. He favored tax and other incentives for employers, but did not want these to be like social welfare measures. He also wanted efforts to be made to make it easier and cheaper to start a business or to take up any other employment-generating activity in remote areas, and asked the meeting to consider the issue of compensation for citizens incapacitated by occupational diseases. Source: English.News.mn MNT800 BILLION IN FDI IN 2010 The Foreign Investment and Foreign Trade Agency of Mongolia (FIFTA) has revealed that Mongolia attracted MNT 800 billion in direct foreign investments in 2010. FDI has been rising annually for the last six years, especially since the law on investments was amended to ensure investment capital guarantee. As of today, Mongolia has investment agreements with some 40 countries. Source: Montsame ELECTRICITY TO COST MORE FROM MAY 1 A formal announcement is yet to be made, but it is almost certain that the Energy Regulation Board will go ahead with its previously declared intention to raise electricity price in Ulaanbaatar from May 1, charging MNT110 for a unit instead of the present MNT79. The board has mentioned two basic compulsions behind its decision. First, equipment needs a near total overhaul and this is expensive. Almost all equipment in the transmission network for the central region was installed between 1960 and 1980, and cannot any longer meet the needs of the vastly increased present demand. Money must be found for maintenance, repair and upgrading. Second, MNT264.5 million is the share of the central region network of the total interest now due on foreign soft loans used for several projects and programs. The Ministry of Finance has also determined that power and heating companies in this region have to repay MNT928 million as part of what was borrowed from foreign organizations. This was to be paid in 2011, but the companies have been given another year. Source: Ardiin Erkh MINIMUM WAGES INCREASED BY 30% Minimum wages have been increased by 30% or to MNT140,400 from April 5, following an agreement among the Government, employers and trade unions based on suggestions from four studies by analysts. However, fresh talks will begin next month to set different minimum wages in different sectors, especially in fields such as mining. There is also a proposal to help organizations not to trim their work force following the present increase. They may get loans double the amount now allowed from the Employment Support Fund. Source: News.mn PLAN TO GIVE EVERY CITIZEN ONE PREFERENCE SHARE OF ERDENES MGL This week‘s weekly Government meeting agreed in principle to a suggestion made by the State Property Committee (SPC) to issue to all citizens one preference share of Erdenes MGL LLC, but a final decision will be taken only after further discussion at the next meeting. If the decision is taken, citizens would hold 536 common shares in Erdenes Tavan Tolgoi LLC and one preference
- 7. share in ErdenesMGL. Children born after April 1, 2011 would also be eligible for the preference shares. A preference share is capital stock which provides a specific dividend that is paid before any dividends are paid to common share holders, and which takes precedence over common share in the event of liquidation. The SPC plans to issue 3 million preference shares for Mongolians, to cover the existing population and new births up to a cut-off date. Source: English.News.mn SPEAKER ASKS MSE TO SUBMIT PROPOSALS TO DEVELOP CAPITAL MARKET Parliament Speaker D. Demberel and members of the Standing Committee on the Economy recently visited the Mongolian Stock Exchange (MSE) and the Financial Regulatory Authority (FRA), to hold talks with Mr. D. Sugar, Chairman of the State Property Committee, Mr. B. Bold, Chairman of MSE, Mr. Kh. Altai, Acting CEO of MSE, Mr. Ts. Bayarsaikhan, Chairman of FRA, and other officials on the progress on work to upgrade and expand the capital market. Answering their questions on dual listing of companies with operations in Mongolia, Mr. Altai said this would not be a sensible idea at the moment. Mr. Demberel asked the officials to submit ―well- written proposals and draft regulations‖ for development of the stock market so that Parliament can consider them. He was told drafts of a Securities Market Law, Company Law, Insurance Law and new Investment Fund Law are being developed. FRC representatives at the meeting said they proposed to have supervisory powers over the Development Bank and will submit detailed plans to the Government in April. Source: News.mn LSE TO TRAIN MONGOLIANS AT ITS OWN ACADEMY Leading a London Stock Exchange (LSE) delegation, its CEO, Mr. Xavier R. Rolet, told Prime Minister S.Batbold on Wednesday that the LSE had plans to train Mongolians at its own academy to prepare them to manage a modern and international capital market center by themselves. Mr. Batbold hoped the LSE‘s work at the Mongolian Stock Exchange will prove to be fruitful. He hoped the LSE would introduce latest systems and technology, which would help attract foreign investments in mining and infrastructure, and also arrange to train Mongolians. Source: Montsame TRADE UNION CHIEF PRESSES FOR PUBLIC MONITORING OF BUDGET EXPENSES A discussion on Wednesday on a draft budget law, jointly organized by the Standing Committee on the Budget and the Confederation of Trade Unions (CTU), was attended by representatives of 18 organizations, including the Mongolian National Chamber of Commerce and Industry and the Institute of Professional Bookkeepers, but left CTU President S.Ganbaatar unhappy. Members of the committee said the draft was comprehensive and covers all aspects of the budget, but Mr. Ganbaatar criticized what he saw was an effort to restrict the freedom of civil organizations with a grant of some amount of money from the budget to them. Talking to media after the meeting, he said some sort of serious public monitoring of how budget money is spent is essential, and the draft should set out the definite ways in which this can be done. ―I suggested giving the responsibility to representatives of some corporate houses or the employers‘ union or trade union organizations or reputable NGOs, but Minister for Finance S.Bayartsogt said they are not qualified to act as auditors,‖ he said. Mr. Ganbaatar‘s view was that this monitoring was not meant to be a formal audit, but, if necessary, professional audit organizations could be asked for help to make the exercise effective, ―as a public service or on payment‖. Insisting that some sort of public oversight is the only way to ensure transparency, Mr. Ganbaatar said ―allowing budget organizations to keep their accounts data secret is the surest way to permit misuse of funds‖, and that corruption is spreading in all state services as ―the taxpayer‘s money is spent without any fear of being checked or challenged‖. This is what public monitoring would stop, he said. Source: Ardiin Erkh 2-STEP SELECTION PROCESS FOR PROJECTS UNDER CONCESSION LAW May 11 is the deadline for responding to last month‘s advertisements from the State Property Committee (SPC) for projects to be implemented under the concession law. These include an auto road project in Tavan Tolgoi-Khanbogd-Khangi, another in Nariinsukhait-Shiveesuren, a highway project in Ulaanbaatar and an airport at Khushigiin Khundii. All the projects will be of the build-
- 8. exploit-transfer type. The selectionprocess will be in two stages. In the first, four companies will be short-listed on the basis of their financial capacity, technological skill, and manpower resources. The final selection will consider the companies‘ capacity to implement the project according to plan and to maintain the time schedule. Source: News.mn RUSSIA SENDS MUCH LESS DIESEL THAN MONGOLIA ASKS FOR The Russian decision to restrict fuel export has meant that Mongolia is receiving less than it asked for. If this trend continues, there could be a shortage of petroleum products in the country as 92% of Mongolia‘s fuel import is from Russia. The Deputy Chief of the Petroleum Authority, Mr. Ts.Amraa, has revealed that the latest import consignment contained 12 tons of AI92 while the order was for 18 tons. In addition, Rosneft LLC has supplied only 35 tons of diesel or half what Mongolia asked for. Source: Udriin Sonin GOVERNMENT WANTS DOMESTIC SERVICES, GOODS TO SUBSTITUTE IMPORTS This week‘s Government meeting approved some measures to support national production, particularly in the processing sector. These include a list of services and goods produced locally that will have to be bought when the money comes from the state and local budgets. Organizations that charge more than the market price or do something unfair will be blacklisted. Producers will face action if they fail to maintain proper quality and standards. The measures have to be ratified by Parliament. The Government has appealed to the people to support national production by buying less imported stuff, pointing out that import substitution would also bring down prices. The meeting also approved the draft of a protocol to be submitted to Parliament on raising import taxes on certain goods, to spur domestic production and create jobs. Source: Mongoliin Medee MONGOLIA GETS READY TO BECOME A NATION OF SHAREHOLDERS The Government of Mongolia has announced the following format to distribute shares in the state- owned Erdenes Tavan Tolgoi LLC to every citizen: - 1.5 billion shares will be divided among 2,796,341 citizens, or each Mongolian will receive 536 shares - Strategic deposits will be put into production in stages and profits from natural resources will be distributed in fair, equal and inclusive manner to every citizen - The exact price of the share will be determined at the time of the global IPO of Erdenes TT - To protect citizens from risk, citizens will not be permitted to sell shares until the price of shares stabilizes in a realistic manner after extraction and coal exports stabilize; paved roads, railroads, and power supply are resolved; and construction of CHPP started - The GoM will regularly inform about the process of putting TT into production in order to make it transparent, open and understandable - However, citizens being shareholders must be responsible themselves and exercise supervision, this possibility will be opened to each citizen/shareholder, mistakes of past privatization will not be repeated - The government will pay attention to educate citizens/shareholders about how the capital market works, and they should do their best to improve their understanding - The TT project will be developed as a model for future projects - Distribution of TT shares will be organized by the State Property Committee, State Registration Agency, Central Depositary of Securities Payments and Clearances and Labor, Welfare and Service Agency. Record of share ownership is to be made at the Human Development Fund record book for each citizen - The next step (of many to be done) is the selection of investor and contractor, preparation of technical and economic justification (related to feasibility study) and IPO on MSE and international stock exchange These steps will effectively make every Mongolian citizen a wealthy individual and, if successful, may well be extended to the sharing in a similar manner of other state owned assets. Source: www.2point6billion.com/news
- 9. ONE JOB PERHOUSEHOLD IS AN ACHIEVABLE GOAL, SAYS MONEF HEAD Mr. Kh.Ganbaatar, President of the Mongolian National Employers Foundation, has said his organization feels it is possible to ensure that at least one person from each household has a job at the end of the employment support year. It will lend full support to the national committee headed by Prime Minister S.Batbold set up to implement the program for the year. Mr. Ganbaatar is its secretary as representing the private sector. He said certain employment-related data were being collected so that demand and supply can be matched, taking care that a job goes to at least one person in every household. Source: Zuunii Medee DEPUTY PM SEEKS FUNDS FOR APARTMENT CONSTRUCTION PROGRAM The Deputy Prime Minister and Chief of the National Committee of Apartments (NCA), Mr. M.Enkhbold, on Wednesday reported to the Government meeting his plans on construction of apartment and infrastructure. The NCA wants to spend MNT437.8 billion on this and Mr. Enkhbold hopes to raise the money from three sources. First, he has asked the Minister for Road, Transportation and Urban Development, Kh.Battulga, and Mayor G.Munkhbayar to issue a long-term loan of MNT216.6 billion to the Apartment Finance Corp. Second, he has urged Minister for Finance S.Bayartsogt to allocate MNT221.2 billion from the state budget for the purpose, especially for construction of infrastructure and buildings for public use. He also asked the Chief of the National Development and Innovation Committee, Mr. Ch.Khashchuluun, to consider a bond sale to raise money for apartment construction. Source: Ardiin Erkh AUSTRALIA RIDES INTO THE WILD, WILD EAST Miners are always searching for that latest underdeveloped province, but as the world grows smaller there are fewer and fewer places that are yet to be fully explored. The open barren plains of Mongolia are drawing the mining industry in droves, with more and companies scrambling to ensure they are a part of the booming industry. Australia is one of the countries that are getting in at the ground floor. The current Mongolian Prime Minister, Mr. S. Batbold, was on a visit to Australia in February when he attended the Mongolia Australia Business Forum that brought together those already involved in mining projects in the country and others who are considering tapping into the rich market. The audience heard of Mongolian nationals who complete their training in Australia and enjoy their time and training so much that they refer to themselves as 'Maussies'. Mr. Batbold praised the Australian mining industry and said, "There are a lot of common things between the two countries. Like Australia, we are blessed with an abundance of mining minerals, and they are key to our economic development‖. He said the similarities can be harnessed by the two nations working together on mining developments, training and innovation. "Our two countries can complement each other," Mr. Batbold told the forum. "We have had less than 20 years of modern mining, but the discovery of minerals has put us on a global stage," Mr. Batbold told the forum. "We're not building mines, we're building a mining country, like Australia and Chile. The placement of Mongolia amongst some of the world's most prosperous mining nations will not be an easy or quick task. We're mindful that we need to undergo years and decades of mining exploration to establish ourselves like Canada and Australia.‖ Mr. Brian Thornton, chief executive of Australian coal mining company Xanadu Mines, says there are massive coal fields within the country, adding, "We've been in the country for six years and I never saw so many miners in this country before." Honorary Mongolian Consul Peter Sloane said that Mongolia currently has one of the world's largest under-developed coal projects, the Tavan Tolgoi mine, which could hold around six billion tons of coking coal. "It's so large that there is actually a debate on how to mine it, but it looks like there will be three to four companies mining it, likely larger companies such as Mitsui, Xstrata, Peabody or Mitsubishi," he said. Read more… Mr. Thornton said there was a void in the mining space in Mongolia from 1991 after the Russians left. But in the last few years miners have seen the opportunity in the country as "there is serious exploration potential as Mongolia is not very mature, mining wise," he said. "Mongolia is still highly vulnerable in economic terms," Mr. Batbold said. Mr. Sloane explained that "the development will provide problems for the Mongolian Government, as with all this money flooding into the country it will be difficult to prevent rising inflation". Some of the mining developments in Mongolia will be amongst some of the most technologically advanced in the world with Rio Tinto's Oyu Tolgoi copper gold mine set to use a revolutionary
- 10. mining development, theblock cave mining method. "This method requires construction of significant underground infrastructure prior to ore production," according to Rio Tinto. "In anticipation of this need, Rio Tinto Technology & Innovation has been engaged in a long running development program to significantly improve both the safety and speed of constructing underground infrastructure such as shafts and tunnels." Mr. David Stewart, chief executive of Leighton Holdings, detailed the involvement the company has in Mongolia, and its commitment to contribute to the local communities. "The bulk of the mine workers are local people. We employ 680 local people and we have a long term view at the mine site." He said the facilities in the country are conducive to successful mining operations and the company strives to understand and participate in the cultural customs. "When I've been there, I've been very impressed with the airport, phone service, and the camp site was extraordinary. There are 35 ethnic groups and 45 religions, and they work in every province in the country.‖ Mr. Stewart said the weather conditions in Mongolia often presented a challenge. "The environment is harsh, and temperatures range from minus 40 to plus 40." Mr. Ch. Khashchuluun, Chairman of the National Development and Innovation Committee in Mongolia, said one of the benefits of Mongolian mining is the type of people who are available to work there. "Mongolia has a very young population," he said, adding that with the movement of the new growth areas, the nation is in need of infrastructure and investment in schools, hospitals and other necessary services. Mr. Sloane said a World Bank economist estimates the Mongolian Government will need to invest around AUD4 billion in infrastructure over the next decade, which is set to cause headaches as the budget of the Government is around the same size as the city of Brisbane. According to Mr. Khashchuluun, 800 km of railway is planned for 2011, and 3,000 km more over the next four years. Some 600 km of specialized highways and truck auto roads for mining is also in the planning, as well as copper smelting, gold refining, coal processing and oil processing plants and facilities. At Tavan Tolgoi, there is a plan to build an 11,000-km railway to Russia, despite it being only 300 km from China, so as not to be dependent on the Chinese. Mr. Sloane explained that the Mongolians ―are wary of both the Russians and the Chinese, but are hedging their bets, and would actually like to turn some of its thermal coal into electricity after which it could export the power generated." Mr. George Lhagvaa, managing director of Hunnu Coal, perfectly demonstrated the extent of the mining boom in Mongolia at the forum, when he told of a conversation with his mother. "The other day my 70-year-old mother wanted to discuss how mining affects Mongolia. That shows its impact on the country's economy," he said. "Growth in Mongolia can be compared to growth in the Western Australian mining regions." Mr. Rod Commerford, Austrade's Senior Export Advisor, told the forum that Mongolia is at the beginning of its mining boom, and ―the business opportunities for Australians are huge, because we are generally viewed more favorably than Canadians and Americans for our direct approach to doing business‖. Mr. Thornton added that Australian miners dominate the junior miner space. Source: Australian Mining ASIAN CITIES’ APPEAL TO WEALTHY INCREASING Six of the 10 cities worldwide that most appeal to wealthy individuals as places to live and invest will be located in Asia within a decade, according to research that highlights how the region is rapidly closing the gap with the west. The 2011 Wealth Report, published on Wednesday by Citi Private Bank, shows that Shanghai, Mumbai and Beijing are expected to shoot up the rankings by 2020, outpacing western rivals. Mumbai – expected to rise from 38th place this year to seventh by 2020 – stands out as one of the fastest movers. Shanghai is forecast to leapfrog Beijing to become the third-highest ranked city in the world. New York and London will fight off competition from rapidly growing markets to retain the first two spots, according to the report, but other European cities – including Paris, Brussels, Berlin and Frankfurt – are set to experience a decline in popularity. The increasing appeal of Asian cities reflects the region‘s strong economic growth rates relative to western markets, as well as high employment levels, lower taxes and ―liveability‖ – their good education systems and infrastructure. ―When compared [with] other regions, Asia continues to be an attractive location for global talent, as it offers good job opportunities as well as a relatively easy environment for family relocation,‖ said Mr. Kwang-Meng Quek, global co-head of real estate investment at Citi. The yearly report looks at the attitudes of wealthy individuals based on a survey of 160 of Citi‘s global wealth advisers. Their views represent about 5,000 investors in 36 countries who are each worth more than USD100 million on average. Assessment criteria included the level of economic
- 11. activity in acity, including the number of international business headquarters there; their influence on the global political stage, judged by, for example, the number of embassies and think-tanks that they host; and the quality of life for residents. Source: The Financial Times LONDON TOP CITY FOR FINANCIAL SERVICES London, New York and Hong Kong have solidified their positions as the world‘s top three cities for banking and other financial services, with London retaining its slight lead over the other two cities, according to the latest Global Financial Centres Index. The twice-yearly ranking of 75 world cities by Z/Yen group, the think-tank, is based on surveys of industry professionals and objective factors such as office rental rates, airport satisfaction and transport. Sponsored by the Qatar Financial Centre Authority, the GFCI is a closely watched barometer within the financial services sector. London has led every survey, but New York and more recently Hong Kong have slowly closed the gap. In the ninth report, released on Wednesday, London has 775 points to New York‘s 769 and Hong Kong‘s 759. However, Singapore, which had been closing the gap in previous surveys, dropped six points to 722. Overall, sentiment is falling – 44 centers lost points, versus 25 gainers. The survey reflected the growing interest in Asia – Seoul leapt 25 points and eight places to enter the top 20 for the first time, and there are now eight Asian cities in the top 20, up from three four years ago. Paris, meanwhile, lost eight points and fell to 20th place, and offshore centers such as Jersey and the Cayman Islands continued their slide. Mr. Mark Yeandle, the Z/Yen associate director who runs the survey, said he believed that London and Hong Kong would hold on to their primacy. ―What distinguishes the top centers is their ability to attract the dealmakers and people who add value. The other centers are rising because of the Chinese economy. It‘s going to be a real struggle to attract the really high fliers,‖ he said. This edition of the GFCI was the first to look at how the various cities are perceived by different- sized businesses. While New York did best among people at companies with 2,000 or more employees, London was top among smaller enterprises with fewer than 500 employees, such as boutique advisory and professional services firms and hedge fund managers. Source: The Financial Times ADB WANTS PREEMPTIVE ACTION TO CURB INFLATION Asian policy makers need to make tackling inflation through preemptive action a priority, the Asian Development Bank said Wednesday, warning that several central banks may be behind the curve and that some economies are still showing signs of overheating. In its annual Asian Development Outlook report, the ADB tipped output in the region to grow solidly over the next couple of years, forecasting gross domestic product to increase 7.8% in 2011 and 7.7% in 2012, a slight moderation from 9% in 2010. But the region faces "critical challenges" to support inclusive growth, it said--most immediately to tackle swelling inflationary pressures, but also to foster new sources of expansion, by strengthening economic links between emerging African, Asian, Latin American and Middle Eastern nations. "Managing inflation is not easy," ADB President Haruhiko Kuroda said in a foreword to the report. He noted that inflation in the region was likely to pick up to 5.3% this year. ―Many countries may already be behind the curve in fighting inflation, and some countries are showing signs of overheating. The task is complicated because lifting interest rates may induce foreign capital inflows, which can add to price pressures," he noted. How best to tackle capital inflows is high up on the International Monetary Fund and the Group of 20 industrialized and emerging nations' list of priorities, and is likely to feature prominently at meetings of financial officials in Washington next week. Capital has flooded into developing nations as growth in emerging markets has bloomed while advanced countries have stagnated. Although inflows are desirable for investment, they can be destabilizing and may also fuel overheating and asset bubbles. Read more… The ADB said that inflation would need to be carefully managed using a "coherent" mixture of tools, rather than relying solely on monetary policy. Exactly what measures were appropriate would depend on the circumstances in the country in question, it said. For countries with persistent current-account imbalances and misalignment between the currency's value and economic fundamentals, more flexible exchange rates may be a better option than raising interest rates or imposing capital controls, the ADB said. "The recent surge in oil prices could undermine the global recovery, and geopolitical and other factors have heightened uncertainty about future prices," it added. It noted that food prices had hit
- 12. record levels inFebruary, and that although core inflation was still benign in industrialized nations, oil and food price pressures could fuel inflation in strongly growing developing countries. Asia's developing countries are home to two-thirds of the world's poor — about 600 million people — who tend to spend more of their incomes on food and will be hit harder by rising food prices. "This widens income inequality and could potentially lead to social tensions," the report said. Source: The Wall Street Journal AUSTRALIA DEALS BLOW TO SGX BID FOR ASX Australia handed Singapore Exchange Ltd. a severe setback Tuesday in its proposed USD8.9-billion takeover of main stock market operator ASX Ltd., saying Australia's foreign investment watchdog believes the deal is not in the nation's interest. Treasurer Wayne Swan said he has not rejected the offer, but that the country's foreign investment watchdog has "serious concerns" about the proposed transaction. The proposed takeover has whipped up a storm of political controversy in Australia with lawmakers claiming the deal would erode national sovereignty and Sydney's role as a financial hub. Because any final approval needs a parliamentary vote, the offer is a political headache for the Labor government, which has a fragile grip on power that depends on the support of independents and the Greens in parliament, who opposed the deal. Under Australian law no single shareholder can own more than 15% of the ASX and any regulation to lift that threshold must be considered by both parliamentary bodies in Canberra. Mr. Swan's concerns come as a blow for Singapore Exchange, which is looking to grow and compete globally with rivals such as the Hong Kong Stock Exchange. A setback on the Australian deal could prompt SGX to consider tie-ups with other exchanges, although many in the West are pursuing mergers with each other already. Mr. Bocker said SGX is not "aggressively" pursuing other acquisitions and that as a company it remains in a very strong position with a solid franchise. By not rejecting the offer completely, the Australian government has effectively dropped the deal while treading a fine line between domestic political concerns and a desire to be seen as an open market welcoming of foreign investment. But politics could make it harder for the government to convince investors that Australia is a suitable destination for investment. SGX had already made a number of concessions after initial talks with regulators, including agreeing to a quota on the number of Australians sitting on the merged entities' board. Read more… SGX's October bid to acquire all of ASX would have created the world's fifth-largest listed exchange operator. It's among the boldest steps toward exchange consolidation in Asia, which lags behind Europe and the U.S. in regional tie-ups. Deutsche Boerse AG and NYSE Euronext are in advanced talks for a merger that could create the world's largest financial exchange, with dominant positions in trading derivatives and equities on both sides of the Atlantic. Most recently, Nasdaq OMX Inc. and InterContinentalExchange Inc. have joined forces to launch a rival bid for NYSE Euronext to rival. London Stock Exchange Group and Toronto-based TMX Group are also in merger talks that would create a trans-Atlantic group heavy on resource and clean energy listings. The flurry of consolidation comes as exchanges are being challenged by new electronic rivals and an evolving regulatory landscape that offers rich rewards for platforms with the cost base and geographic spread to capture new over-the-counter business. For its part ASX said it has an "ongoing belief" in the need for regional and global consolidation. Source: The Wall Street Journal CHINA UPS RATES IN BID TO DOWN INFLATION China this week raised interest rates for a fourth time in five months as it struggles to reduce bank lending, rein in inflation and slow economic growth. The central bank said the official one-year lending and deposit rates would be increased by 25 basis points from Wednesday, raising the deposit rate to 3.25 per cent and the lending rate to 6.31 per cent. Analysts said the increase came earlier than many anticipated and suggested that price rises for March, to be published next week, were probably higher than expected. Consumer price inflation in China rose 4.9 per cent in February from a year earlier, the same as in January. But politically sensitive food prices accelerated and producer prices increased 7.2 per cent, their most since October 2008. Even after the latest rise in official rates, the return on bank deposits in China is deeply negative once adjusted for inflation. Beijing has made fighting inflation its priority, amid fears that runaway price rises could lead to social instability in the one-party state, as they often have in the past. ―Inflation is like a tiger: once it is set free it is very difficult to put it back in its cage,‖ Mr. Wen
- 13. Jiabao, the Chinesepremier, told reporters last month. The government predicts that headline inflation will continue to rise and peak around June or July. But official economists made the same forecast at the start of last year and were proved wrong. An overabundance of bank credit resulting from the government‘s post-crisis economic stimulus package is the main cause of inflation, although officials also blamed ―external factors‖ such as soaring oil prices. Read more… As well as raising rates, Beijing has also increased the proportion of deposits that banks must hold in reserve with the central bank nine times since the start of last year in an attempt to limit the amount they can lend. Large banks in China are now subject to required reserve ratios of at least 20 per cent. Analysts remain divided on whether China‘s economy is slowing or if more concerted action is needed to avoid overheating and runaway inflation. The Chinese economy grew 10.3 per cent last year and Beijing has announced plans to bring the headline rate down while trying to encourage more balanced and sustainable growth. Source: The Financial Times POLITICS MONGOLIA SOUNDED ABOUT STORING NUCLEAR FUEL SPENT ELSEWHERE The Obama administration has held informal talks with Mongolia about the possibility that the Central Asian nation might host an international repository for its region's spent nuclear fuel, a senior U.S. diplomat said last week. U.S. Energy Department officials and their counterparts in Ulaanbaatar are in the early stages of discussion and there has been no determination yet about whether to proceed with the idea, according to Mr. Richard Stratford, who directs the State Department's Nuclear Energy, Safety and Security Office. Speaking at the biennial Carnegie International Nuclear Policy Conference, Mr. Stratford said a spent-fuel depot in the region could be of particular value to Taiwan and South Korea, which use nuclear power but have few options when it comes to disposing of atomic waste. "If Mongolia were to do that, I think that would be a very positive step forward in terms of internationalizing spent- fuel storage," he said during a panel discussion on nuclear cooperation agreements. "My Taiwan and South Korean colleagues have a really difficult time with spent fuel. And if there really was an international storage depot, which I have always supported, then that would help to solve their problem." The United States provides fresh uranium rods to selected trade partners in Asia, including South Korea and Taiwan. For Mongolia to accept and store U.S.-origin spent fuel from these or other nations would require Washington to first negotiate a nuclear trade agreement with Ulaanbaatar. Although Energy Department officials have reportedly engaged in informal talks with Mongolian representatives for several months, Mr. Stratford has not yet had any contact with Ulaanbaatar on the matter, he said. It is not yet certain whether formal negotiations on a nuclear trade pact will move forward. Read more… Energy Department officials traveled to Mongolia last fall for meetings on the matter, according to Mr. Mark Hibbs, a senior associate with the Nuclear Policy Program at the Carnegie Endowment for International Peace. He chaired the discussion on nuclear cooperation. "It was a fruitful discussion," Mr. Hibbs said. "They went into some details [but] it was very exploratory." In most nations, the idea of accepting foreign spent fuel has seemed an anathema. Russian officials have discussed building an international repository on their territory, but the idea appears to have faded due to domestic opposition. Nuclear expert Jeffrey Lewis said he wonders if the situation would be any different in Mongolia. "I think these guys are fooling themselves [if they] believe we will put a spent-fuel depot in Mongolia. I don't think Mongolia is going to accept being a regional spent-fuel repository," he said. Mr. Hibbs said that as "a country that's surrounded by two big powers" -- Russia and China -- Mongolia is "trying to carve a niche out for itself economically in the region". Broadening its involvement in the nuclear energy sector might serve as just such an economic lever, he said. It could seek to step up mining of its natural uranium deposits and potentially expand into a wider array of services, such as providing foreign nations with fresh fuel and then taking back the atomic waste at a later date, according to regional experts. This type of move would come at a time when neither Russia nor China has acted on similar concepts for what is termed "leasing" of nuclear
- 14. material. There could alsobe interest among officials in and outside the Mongolian government in developing nuclear power to meet that nation's own growing energy needs, according to some sources. Ulaanbaatar recently signed a memorandum of understanding with Seoul to cooperate on peaceful nuclear technologies and expertise. Mr. Lewis, who directs the East Asia Nonproliferation Program at the Monterey Institute of International Studies, said it was difficult to believe that Mongolia would find it profitable to enter a field that has been dominated for decades by established nuclear energy powers such as Russia and France. "I don't understand why Mongolia wants to be involved in the fuel-cycle business to begin with," he said. "If I were running Mongolia, I could think of a bunch of other things to spend that kind of industrial investment on before it came down to fuel-cycle services." Nor would it likely prove politically palatable for Mongolia to become a final destination for its neighbors' atomic waste, he argued. "Without some compelling evidence -- like a statement by the government of Mongolia that they're willing to be the region's nuclear waste dump -- I don't see why anybody thinks they would do this," Mr. Lewis said. If Mongolia ultimately does see merit in offering nuclear fuel services, inking a nuclear trade agreement with the United States would be a shot in the arm, Mr. Hibbs said. "Having the blessing of the US would be very valuable for them," he said. "Mongolia is emerging as a very Western- friendly country. ... [Getting] the agreement would basically underscore that the US supports the development of nuclear energy activities in Mongolia." Mr. Hibbs said it is highly unlikely that Mongolia is exploring its atomic energy options with an eye toward eventually developing a nuclear weapon. ―I think it's inconceivable that Mongolia would be interested in nuclear weapons in the environment that they're in," he said. "It realizes that by being a member of good standing in the [1970 Nuclear Nonproliferation Treaty], it's better served than getting involved in a hair-brained arms race with either the Russians or the Chinese." Mr. Lewis had a slightly different take on the matter. "I don't think Mongolia has any interest in developing a bomb right now," he said. "But if Mongolia wants to move from uranium mining into the fuel cycle, that could contribute to an unwelcome spread of sensitive facilities." Source: Global Security Newswire NEA OFFICIALS DENY REPORTS ON TALKS ABOUT NUCLEAR FUEL STORAGE Officials of the Nuclear Energy Authority of Mongolia have denied reports that the U.S. administration has held any talks with Mongolia about setting up an international storage facility for the region's spent nuclear fuel. They categorically denied that any agreement has been concluded with any foreign government, company or individual on the matter. They have asserted that Mongolia is a signatory to the international nuclear non-proliferation treaty and is committed to using nuclear energy only for peaceful purposes. Besides, it has a law prohibiting import or transit through Mongolia to a third country of any form of harmful waste. The Ministry of Foreign Affairs and Trade will ask U.S. officials about the reports. Source: News.mn MONGOLIA WILL CHECK WORLD SENTIMENT BEFORE GOING FOR NUCLEAR POWER PLANT Mongolia will take its cue from the global reaction to Japan‘s nuclear disaster before continuing with plans to build atomic power plants, according to the deputy chairman of state-owned nuclear company Monatom. ―It will depend on how the world community reacts‖ to the accident at the Fukushima Dai-Ichi nuclear station that occurred last month, Mr. T. Gombo said in an interview in Singapore. ―We don‘t think it‘s a big problem for the industry as a whole. It may be a little setback in the timeframe.‖ Mongolia, which has at least 1 percent of the world‘s uranium resources, was planning to start operating its first nuclear power plant by 2020 and build a nuclear fuel center, Mr. Gombo said. Russia‘s Rosatom Corp. last year set up a venture with Monatom to mine uranium, used to make nuclear fuel. Rosatom agreed also to help Mongolia develop its nuclear industry strategy. Japan‘s situation is unlikely to dampen interest in Mongolian uranium deposits or stop the nation from working with Japanese nuclear companies, Mr. Gombo said. ―Currently there is not much foreign investment in the uranium sector, but we expect there would be huge investments because the superpowers -- U.S, Russia and China -- are all interested and competing with one another,‖ Mr. Gombo said. Mongolia would favor developing its nuclear industry together with the U.S., France and Japan, as opposed to its two neighbors Russia and China to ―balance‖ its interests, he said. Source: Bloomberg
- 15. PROBE GROUP SAYSJULY 1 RIOTS WERE NOT “A SPONTANEOUS OUTBURST OF PROTEST” A working group was set up by Parliament Speaker D.Demberel on July 24, 2009 to make a comprehensive investigation into the violent incidents of July 1, 2008, particularly the organization and involvement of police and military forces in events preceding and subsequent to the declaration of a state of emergency. It was led by the Head of the Standing Committee on State Structure, Mr. U.Enkhtuvshin, and its 14 members included 8 MPs, the Head of the National Human Rights Commission, and the President of the National Lawyers' Association. The group spoke to some 50 people, including the then President N.Enkhbayar, then Prime Minister S.Bayar, the head of the MPP group in Parliament then and now, Mr. D.Lundeejantsan, and to senior military, intelligence and police officials. It read a police report that of the 998 people from the crowd of 8,000 that had gathered in Sukhbaatar Square, ostensibly to protest against electoral irregularities and rigging of results, 715 had not voted. The group has concluded that the majority of the organizers of the demonstration were people who had lost in the election, and who would be in a minority in the newly elected Parliament. ―There is no evidence that the riot stemmed from a truly spontaneous reaction of the general public to what was randomly perceived as fraudulent results. There were people regularly distributing money, vodka and other kinds of alcohol, as also rocks and paints to be used against the police,‖ the group writes in its report. Source: Undesnii Shuudan EX-PRESIDENT SEES GROSS VIOLATION OF HUMAN, ECONOMIC RIGHTS A recent public discussion chaired by former President N.Enkhbayar concluded that the economic and human rights of Mongolians ―have been devastated under the presently ruling oligarchy". Several NGOs, including The Human Initiative, participated in the discussion. Mr. Enkhbayar blamed the State policy for creating and nurturing an environment that freely violated human rights, and thus made economic exploitation of the people easier. ―The global average is that 10% of a country‘s budget is spent on corruption. The Mongolian average is clearly double or maybe triple this. This means that with our budget of approximately MNT3 trillion, we spend MNT300 billion on bribery every year. That is a loss of at least MNT100,000 for each Mongolian citizen. In other words, the oligarchy steals this sum from people,‖ Mr. Enkhbayar said, appealing to all NGOs to come together ―to fight this practice‖. He wondered why the Government was taking so much credit for giving people 10% of Tavan Tolgoi shares ―when they can rightfully claim to own 100%‖. Allowing individual citizens to own 100% of strategic deposits would have another beneficial effect, the former President said. ―When Government officials realize there will be no money for the budget from the mining sector, they will be forced to work for the development of other sectors, other industries,‖ he said. Source: Zuunii Medee SPRING SESSION OF PARLIAMENT BEGINS Parliament began its Spring session on Tuesday. President Ts.Elbegdorj and some foreign diplomatic representatives were present when Speaker D.Demberel opened the session. He said it was being held at a time of nationwide regeneration, when strategic deposit mines are being prepared for exploitation, large projects are being taken up, and herders are taking care of new born animals. One MP who did not enjoy the proceedings was Mr. Ts.Shinebayar, representative of the group that wants to take the name MPRP. He later told a press conference that his request to speak at the opening of the session had been turned down on the ground that the law permits only the Speaker to address the opening of any session. The President is the only other person who can give a speech if he wants. Mr. Shinebayar told journalists that the present Parliament has no true opposition and thus cannot criticize the Government. He added that Parliament cannot fight corruption, but fights with the Chief of the Anti-Corruption Authority. He himself will spend most of the present session away from Parliament but among the people. Source: English.News.mn MOSCOW SHOWS MONGOLIA ONE WAY TO BE RID OF CORRUPTION The days when issues related to Mongolia were routinely resolved in Moscow are gone but a recent decision by President Dmitri Medvedev may affect Mongolia‘s fortunes if only our leaders can summon the boldness to follow his lead. Mr. Medvedev has ordered all Ministers in Russia to resign from the boards of State-owned institutions by July 1, so that these can function without political control or interference, which has usually meant use of State capital for personal gain. This
- 16. practice is widelyprevalent in Mongolia, too, and is usually called conflict of interest. In fact, there is no conflict as political and personal interests almost always get the better of the commercial interests of the units. These are in the red year after year, but their politician-directors become wealthy by arranging deals lucrative for themselves. Some MPs, the most active among them being Mr. Kh. Temuujin, have been saying how this system that breeds corruption must stop, but their efforts to put legal restrictions on such conflict of interest in public service have not succeeded so far. Now, with the decision of Mr. Medvedev as an example, Mongolia can take similar measures to allow the business environment to prosper and to give a chance to the forever loss-making State companies to become truly competitive. Among the immediate gains will be a stop to a company owned by a minister from dominating the airline sector and to another minister from supporting small business development by allocating funds from the budget selectively to companies where he has interests. Source: Undesnii Shuudan SUPREME COURT SAYS GREEN PARTY RULE CHANGES ILLEGAL The Supreme Court has ruled in favor of a complaint by Ms. D.Basandorj and Ms. O.Bum-Yalagch that a special meeting of the Green Party on February 19, 2011 acted illegally in changing the party‘s rules. The Court has said it will therefore not register the changed rules. The complainants are opposing the merger between the Green Party and the Civil Will Party and the ruling will give a boost to their campaign. Source: Ardiin Erkh DRAFT RIGHT TO INFORMATION LAW HAS SEVERAL WEAKNESSES The Spring session of Parliament is likely to consider a draft law on the right to information, prepared and submitted by the Ministry of Justice in January 2011. The draft has strengths and weaknesses, according to a critique by the Centre for Democracy and Law. CLD Executive Director Toby Mendel says, ―It has a number of positive features, including a very broad regime for proactive disclosure of information. However, it also has some serious shortcomings, in particular an extremely broad regime of exceptions, which should be addressed before it is passed into law.‖ The regime of exceptions ―both fails to protect key confidentiality interests and renders confidential some issues that should be open,‖ according to Mr. Mendel, who felt there is no public interest override to ensure that information of significant public interest is disclosed. He thinks the coverage of the proposed law is too narrow and the system of promotional measures too weak, and has objected to having sanctions for disclosing information, even if done in good faith. Source: freedominfo.org MP’S COMMENT RAISES QUESTIONS Mr. Sh.Saikhansambuu, MPP MP, was last week called by the Investigation Department of the Anti- Corruption Authority (ACA) in relation to a case where he is suspected of paying bribes. The MP refused to answer any questions or make a statement in the absence of a lawyer, but on leaving the ACA office he was heard to say that the room where he had sat contained several persons to whom he had paid money. One waits to see if he will reveal who they are, why they had to be bribed, and how much was paid. Among Mr. Saikhansambuu‘s assets are the Narantuul Market, a glass factory in Shanghai, and several trans-national businesses outside Mongolia. Source: Undesnii Shuudan INNOCENTS IN DETENTION NOT ALLOWED TO GO ON HUNGER STRIKE In a remarkable example of bureaucratic highhandedness, two police officers who continue to be detained at Gantskhudag prison since 2009, even though investigations have cleared them of the charge against them, were recently denied permission to go on hunger strike, the only option they felt was open to them to demand release. Both are from the Khan-Uul district police and were accused in 2009 of beating up a 17-year-old person. Investigators from the State Prosecutor General‘s Office decided they had committed no crime, but they are still detained. What choice do citizens have to express legitimate protest if the authorities who continue to detain innocent people also have the power to deny them the means of protesting? Certainly it is a basic right to oppose and draw attention to unjust acts, but in Mongolia those in authority decide how far people can go in questioning that authority. Source: News.mn
- 17. MONGOLIA’S STRUGGLE WITHLIVER CANCER High rates of hepatitis C and B infection along with widespread alcohol use have left Mongolia with a burden of liver cancer that it is ill-equipped to handle. Mongolia has the world's highest rate of liver cancer mortality—six times the global average—and the number is increasing. By the time most Mongolians with hepatocellular carcinoma (HCC) are diagnosed, their disease is already inoperable. According to WHO, one of every ten deaths in the country is due to HCC or its frequent precursor, cirrhosis. In turn, nearly all Mongolians with liver disease are carriers of hepatitis B or C viruses or both, and researchers agree that those infections are the main causes of liver disease in the country. More than a quarter of Mongolians are chronic carriers of at least one of the viruses, and almost none are aware of their status. Asia has historically been burdened with a high prevalence of hepatitis B, so Mongolia is not an outlier in this respect. A national childhood vaccination campaign, initiated in 1991, has protected younger cohorts and holds the promise of eliminating the virus in the country's next generation. But what distinguishes Mongolia from the rest of Asia is the additional burden of hepatitis C, for which no vaccine currently exists. Although unsafe surgical procedures and dental practices are thought to play a part, much remains unclear about the origins of the virus in the country and the mechanisms of its continuing transmission. Alcohol use, which hastens progression to cirrhosis for those with concurrent viral infection, is also widespread in Mongolia, compounding the epidemic. The global health community has given little attention to liver disease relative to other public health issues, and Mongolia's experience is no exception. ―The utmost priority is given to HIV, TB, and infectious diseases such as avian influenza‖, commented an officer in the ministry of health's division of international cooperation. ―Viral hepatitis and liver disease are very much less targeted.‖ Read more… Still poor by global standards, Mongolia is thus in the challenging position of dealing with a heavy burden of non-communicable disease that is more typical of the developed world, and which demands a rich country's resources and functioning health system. The Mongolian Government is making organizational and strategic changes to improve the early detection and control of non- communicable diseases, including liver disease, at the primary health-care level, according to a senior office, but such changes will be a challenge, and the extensiveness of the Mongolian countryside is daunting. Even if diagnostics improve, it is not clear what treatments will be readily available. Neither antiviral treatment for hepatitis B nor interferon-based therapy for hepatitis C is presently covered by the national health system, and their high price puts them well out of the reach of most Mongolians. Even for services that the public system covers, much of the financial burden ultimately falls on patients. By necessity, then, Mongolia has turned to palliative care as a final but valuable service for its terminal cancer patients, and with noteworthy success. But this is not yet widely available outside the capital, so patients often travel great distances for treatment. For the foreseeable future, dying in a peaceful place and free of pain might be the most that Mongolian patients with HCC can hope for. Source: The Lancet CHINA WARNS OF MILITARY COMPETITION IN ASIA China has raised concerns over attempts by other countries to contain its growing power, as the US seeks to boost its influence in the region. ―Suspicion about China, interference and countering moves against China from the outside are on the increase,‖ Beijing said in a key military policy document released on Thursday last week, underscoring the growing friction in the Asia-Pacific region. The 2010 white paper was the first to be published since Hillary Clinton, US secretary of state, angered Beijing by calling for a resolution of territorial disputes in the South China Sea involving China and its neighbors, in a speech at a regional summit last July. The release of the biennial white paper also follows a string of stand-offs over regional security issues ranging from US military exercises in Asian waters to North Korea‘s hostile acts against South Korea and flare-ups in territorial disputes between China and several of its neighbors. Its publication was delayed for more than two months over what military experts in Beijing said were China‘s efforts to navigate the multiple issues it considered sensitive, and a desire to include any potential outcome from the visit of US Secretary of Defense Robert Gates to Beijing, and of China‘s President Hu Jintao to the US in January. The recent publication of new military strategies from Japan and the US are also believed to have been reasons behind the long delay. ―They wanted to carefully study these and the result has
- 18. obviously been apolicy document as uncontroversial as possible,‖ said a foreign defense official in Beijing. In the document, China also reiterated previous warnings of ―fierce‖ regional competition and an increasingly ―volatile‖ security picture in Asia. ―Major powers are stepping up the realignment of their security and military strategies, accelerating military reform and vigorously developing new ... military technologies.‖ Read more… China started publishing the biennial white papers on its defense policy in 2000 in response to criticism from foreign militaries, especially the US, that it was not transparent enough about its armed forces. This year Beijing repeated its pledge of transparency, and said it would increase joint exercises and military exchanges with other countries. But the new document included even less detail on the armed forces than the last white paper. Introductions to the different services were shorter than in the 2008 paper, and Beijing did not address the development of key new weapons systems about which the US, Japan and several other neighbors are concerned. The People‘s Liberation Army has been overhauling an old aircraft carrier it purchased from Ukraine, and is expected to start using it for fighter aircraft training this year or next. However, the defense ministry evaded questions about the carrier program, according to a transcript of the press conference for the paper‘s launch. The document did not contain any information on a new missile system designed to target US aircraft carriers in the region. China said earlier in March that it would resume double-digit growth of its official defense spending this year. It has said this year‘s military budget will be USD91.8 billion, 12.7 per cent higher than 2010. However, independent analysts believe the country is spending at least twice its officially declared amount. Source: The Financial Times ANNOUNCEMENTS MINERAL INDUSTRY SAFETY ASSOCIATION FORUM, APRIL 13 The Mineral Industry Safety Association (MISA) will hold its second Workplace Safety Forum on April 13, 2011 from 09.00-12.00 at the Corporate Hotel 3rd floor conference room. The forum will provide essential tips on how to identify threats to workplace safety, and, once identified, how to control and manage them. Attendance is free and all decision makers and safety officers are invited to attend the forum which will be held in both English and Mongolian. Among the speakers are Mr. Matthew Gili, Chairman of MISA and Chief Operating Officer, Oyu Tolgoi LLC; Mr. T.Erdene, from the Ministry of Social Welfare & Labor and a director of MISA; Mr. S. Davaanyam, Head of Occupational Safety and Health at Erdenet Mining Corporation and a director of MISA; and Mr. Sebastien Marneur, Director of Eurofeu Asia. ________________________________________________ RUNGE’S COURSE ON MINING FOR NON-MINERS, ULAANBAATAR, MAY 5-6 Runge is planning a course on Mining for Non-Miners in Ulaanbaatar, designed for people of a non- mining background who interact with mining personnel. The tentative dates are May 5 and 6, with one day focusing on coal mining and the other on metal mining. The course is aimed at providing those from a non-mining background with a comprehensive understanding of the mining industry. After attending it, participants will have a greater understanding of the operational practices pivotal to the mining industry, and will be able to interpret essential terminology and feel more comfortable interacting with core mining staff. The course fee for non-members is USD2,000 but Runge is offering a massive 50% discount to BCM members, who pay USD1,000. The course will be run if minimum numbers can be achieved. Initial interest is quite positive! Please send your expression of interest by email to saruul@bcmongolia.org or call 9913 1377. Runge is a world class mining consulting, software and training company with an office in Ulaanbaatar with expat and local staff. The entire schedule of its upcoming courses for Q2 2011 can be found in the BCM website, Events Calendar. ________________________________________________ 2012-2013 FULBRIGHT STUDENT FELLOWSHIP The Public Affairs Section of the U.S. Embassy to Mongolia is now accepting applications for the 2012 -2013 Fulbright Student Fellowship Program. Fulbright Student Fellowships are part of a U.S. Government-funded academic exchange program, and fund graduate-level (M.A., M.S) studies at
- 19. U.S. universities. FulbrightStudent Fellows are selected by the Public Affairs Section of the U.S. Embassy. Deadline: April 11, 2011. Visit: http://mongolia.usembassy.gov/fulbright_2012-2013.html ___________________________________________ 2012-2013 HUBERT HUMPHREY FELLOWSHIP This is a one-year, non-degree professional exchange program. It provides approximately a year of study and related professional experience in the U.S. to mid-career professionals working in the following public service fields, in either the public or private sector: agricultural Development/Agricultural Economics, communications/Journalism, Substance Abuse Education, Treatment and Prevention, Economic Development, Finance and Banking, Educational Administration, Planning and Policy, Higher Education Administration, HIV/AIDS Policy and Prevention, Natural Resource and Environmental Policy and Climate Change, Human Resources Management, Public Health Policy and Management, Public Policy Analysis and Public Administration, Teaching of English as a Foreign Language, Technology Policy and Management, Trafficking of Persons, Policy and Prevention, Urban and Regional Planning, Law and Human Rights. Application deadline: April 15, 2011. Visit: http://mongolia.usembassy.gov/sholarship_announcements/humphrey2012.html ___________________________________________ “MM TODAY” on MNB-TV, Fridays at 21:15 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 NewsWire. ___________________________________________ “BSPOT” on B-TV, Monday to Friday at 21:30 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. ___________________________________________ NEW POSTINGS ON BCM WEBSITE'S 'PRESENTATIONS' AND 'MONGOLIA REPORTS' Presentations from BCM‘s monthly meetings in the 2011 first quarter, several from the very successful Mines and Money Hong Kong‘s ‗Mongolia Investment Summit Morning‘ on March 25, and by Voyager Resources‘ CEO in both English and Mongolian at a March 16 MICC-sponsored gathering. In addition Mongolia Reports including the U.S. Embassy Mongolia‘s Commercial Section‘s ―2011 Mongolia Investment Climate Statement‖ are among the presentations posted on BCM's website (www.bcmongolia.org) in the "Resource, Presentations" and ―Resource, Mongolia Reports‖ sections 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.
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- 21. 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] February 28, 2011 *11.0% [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 - April 7, 2011 Currency Name Currency Rate US dollar USD 1,208.55 Euro EUR 1,726.66 Japanese yen JPY 14.18 British pound GBP 1,973.26 Hong Kong dollar HKD 155.47 Chinese Yuan CNY 184.68 Russian Ruble RUB 42.77 South Korean won KRW 1.11 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.