The document summarizes the signing of an agreement between the Mongolian government and mining companies Ivanhoe Mines and Rio Tinto regarding development of the Oyu Tolgoi copper-gold mining project in Mongolia. Key details include:
- Ivanhoe Mines chairman called the agreement "the godfather of new beginnings" for Mongolia.
- Representatives from Ivanhoe Mines and Rio Tinto praised the Mongolian government's commitment during negotiations.
- The agreement will make Oyu Tolgoi one of the largest copper and gold mines in the world, operating for at least 60 years.
Ever since Corona Pandemic began, employee retention and employment
generation have inevitably become most important responsibilities of
Governments at the Centre, States & also Private Entrepreneurs. Mining,
Quarrying and Water resources management are the biggest outdoor sources of
employment besides Agriculture, for lakhs of youth, many of whom have
migrated back to their villages & towns. The mining sector has the potential to
grow to employ about 48lakh persons directly and create a total of 5 crore jobs
in mines and related ancillary industries and services, by 2025. The ratio of
direct to indirect employment in the Mining Sector is 1:10. “An investment of
US$ 1 in exploration is estimated to give a return of US$15” (Ernst and Young
Rept.-2011, p. 34). Another independent study says, that “for every rupee of
investment in mining there is an investment of Rs.12 in the downstream value
chain ancillary industries". Specially in case of gold, every tonne of gold mined
will save 55million US$ in Forex and ploughs Rs.150 to 200 Crores into the
Local Rural Economy in the form of wages, ancillary industries, supplies of
materials and machinery, skill development, rural infrastructure , education,
health care, entertainment etc., besides generating revenue to the Govt.
Therefore, mining serves to alleviate poverty to a large degree. As per
McKinsey Global Institute, India needs to create 150 million non-farm jobs by
2025, to significantly reduce poverty. The Confederation of Indian Industry
(CII) in 2011 had done a study for the Ministry of Mines and brought out a
“Skill Mapping Report”. As per this report, in the period up to 2025, there will
be a need for some 3,000 geoscientists and 40,000 mining engineers over and
above the normal supply. Achieving self-sufficiency in minerals and reducing
the dependence on import of metals and minerals, on a fast track investment
mode, are the other most important national goals set by the Hon’ble Finance &
Corporate Affairs Minister as a follow up on the Prime Minister’s call for a
“Self-reliant India Movement” on the 12 th May2020. The Hon’ble Finance Min-
ister made Policy Reforms -related pronouncements to fast track investments
into Coal Sector & Non-coal Minerals Sector.
Ever since Corona Pandemic began, employee retention and employment
generation have inevitably become most important responsibilities of
Governments at the Centre, States & also Private Entrepreneurs. Mining,
Quarrying and Water resources management are the biggest outdoor sources of
employment besides Agriculture, for lakhs of youth, many of whom have
migrated back to their villages & towns. The mining sector has the potential to
grow to employ about 48lakh persons directly and create a total of 5 crore jobs
in mines and related ancillary industries and services, by 2025. The ratio of
direct to indirect employment in the Mining Sector is 1:10. “An investment of
US$ 1 in exploration is estimated to give a return of US$15” (Ernst and Young
Rept.-2011, p. 34). Another independent study says, that “for every rupee of
investment in mining there is an investment of Rs.12 in the downstream value
chain ancillary industries". Specially in case of gold, every tonne of gold mined
will save 55million US$ in Forex and ploughs Rs.150 to 200 Crores into the
Local Rural Economy in the form of wages, ancillary industries, supplies of
materials and machinery, skill development, rural infrastructure , education,
health care, entertainment etc., besides generating revenue to the Govt.
Therefore, mining serves to alleviate poverty to a large degree. As per
McKinsey Global Institute, India needs to create 150 million non-farm jobs by
2025, to significantly reduce poverty. The Confederation of Indian Industry
(CII) in 2011 had done a study for the Ministry of Mines and brought out a
“Skill Mapping Report”. As per this report, in the period up to 2025, there will
be a need for some 3,000 geoscientists and 40,000 mining engineers over and
above the normal supply. Achieving self-sufficiency in minerals and reducing
the dependence on import of metals and minerals, on a fast track investment
mode, are the other most important national goals set by the Hon’ble Finance &
Corporate Affairs Minister as a follow up on the Prime Minister’s call for a
“Self-reliant India Movement” on the 12 th May2020. The Hon’ble Finance Min-
ister made Policy Reforms -related pronouncements to fast track investments
into Coal Sector & Non-coal Minerals Sector.
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हम आग्रह करते हैं कि जो भी सत्ता में आए, वह संविधान का पालन करे, उसकी रक्षा करे और उसे बनाए रखे।" प्रस्ताव में कुल तीन प्रमुख हस्तक्षेप और उनके तंत्र भी प्रस्तुत किए गए। पहला हस्तक्षेप स्वतंत्र मीडिया को प्रोत्साहित करके, वास्तविकता पर आधारित काउंटर नैरेटिव का निर्माण करके और सत्तारूढ़ सरकार द्वारा नियोजित मनोवैज्ञानिक हेरफेर की रणनीति का मुकाबला करके लोगों द्वारा निर्धारित कथा को बनाए रखना और उस पर कार्यकरना था।
role of women and girls in various terror groupssadiakorobi2
Women have three distinct types of involvement: direct involvement in terrorist acts; enabling of others to commit such acts; and facilitating the disengagement of others from violent or extremist groups.
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‘वोटर्स विल मस्ट प्रीवेल’ (मतदाताओं को जीतना होगा) अभियान द्वारा जारी हेल्पलाइन नंबर, 4 जून को सुबह 7 बजे से दोपहर 12 बजे तक मतगणना प्रक्रिया में कहीं भी किसी भी तरह के उल्लंघन की रिपोर्ट करने के लिए खुला रहेगा।
In a May 9, 2024 paper, Juri Opitz from the University of Zurich, along with Shira Wein and Nathan Schneider form Georgetown University, discussed the importance of linguistic expertise in natural language processing (NLP) in an era dominated by large language models (LLMs).
The authors explained that while machine translation (MT) previously relied heavily on linguists, the landscape has shifted. “Linguistics is no longer front and center in the way we build NLP systems,” they said. With the emergence of LLMs, which can generate fluent text without the need for specialized modules to handle grammar or semantic coherence, the need for linguistic expertise in NLP is being questioned.
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1. BUSINESS COUNCIL of MONGOLIA
NewsWire
www.bcmmongolia.org
info@bcmongolia.org
Issue 89, October 9, 2009
NEWS HIGHLIGHTS:
Business:
Ivanhoe chief calls OT agreement “the godfather of new beginnings”;
Investors praise Government’s sense of commitment;
Elbegdorj greets “investors yesterday, partners today”;
OT agreement is an agreement for total economic revival;
OT to remain important for Mongolia's economy “100 years from now”;
Taxation environment to be kept stable;
Comprehensive skills training plan for Mongolians soon;
Special benefits for Umnugovi region, nomadic herders;
Investors to submit regular environmental progress report;
Ivanhoe can access electricity from outside Mongolia for first four years;
Cases filed against 57 borrowers at Anod Bank;
Polo Resources reports coal reserve estimate of 807 million tons at Erds;
Areva to increase investment in Mongolia;
Rio Tinto sells U.S. coal mine for USD764 million;
Russian uranium miner ARMZ eyes projects with Cameco.
Economy:
Central Bank submits draft guidelines for next year’s monetary policy;
Minister wants more economic cooperation than loans and aid;
“Our emergency loans saved banks,” claims Central Bank official;
5 banks enough for Mongolia, says Central Bank president;
Trade office soon in Tianjin;
No market for products makes life harder for herders;
MDG progress report says poverty will not be eliminated by 2015;
Khuvsgul meeting on mining hears complaints on delay over licenses;
Consultative Council prepares three recommendations;
Mongolia lures luxury goods makers;
Ulaanbaatar property market ready to boom;
How Russia plays its nuclear card, in Mongolia and elsewhere;
New policy document to change Mongolian economy, claims joint venture chief;
Seminar on October 14 on raising capital;
World copper supply gap could reach 10 million tons in 2020;
Copper price seen at record high by 2013 as market tightens;
Gold to hold above USD1,000 per oz, predicts miner;
Chinese consumers to lead the world out of recession;
China set to become world’s second largest economy sooner than thought.
Politics:
Anti-Corruption Authority probing complaint against Enkhbayar;
Subcommittee favors expelling ex-Minister Gundalai from Parliament;
2. Bayar returns to South Korea for medical consultation;
EU aid to increase every year until 2015;
What will Russia demand next?
Zorigt seen as favoring pragmatism over politics;
Deadly toxicity stalks Khongor region, despite official denials;
Elbegdorj receives report on Zorig murder investigation;
Honeymooners fill MIAT chartered flight to Jeju in South Korea;
India to help Mongolia exploit seabuckthorn potential.
_____________________________________________________________________________________
BUSINESS
IVANHOE CHIEF CALLS OT AGREEMENT “THE GODFATHER OF NEW BEGINNINGS”
Ivanhoe Mines signed at a state ceremony in Ulaanbaatar on Tuesday a long-term Investment
Agreement with the Government of Mongolia that establishes a comprehensive framework for the
construction and operation of the Oyu Tolgoi copper-gold mining complex in the South Gobi Region.
The ceremony was attended by hundreds of invited guests, including the President, the Prime
Minister, Cabinet members, the Speaker and Members of Parliament, and representatives of the
international diplomatic community. Thus culminated nine years of exploration successes that have
established Oyu Tolgoi as the world's largest, undeveloped copper-gold porphyry project.
The agreement creates a partnership between the Mongolian Government - which will acquire a 34%
interest in Oyu Tolgoi's license holder, Ivanhoe Mines Mongolia Inc. - and Ivanhoe Mines, which will
retain a controlling 66% interest in the project. Global miner Rio Tinto, which joined Ivanhoe Mines
as a strategic partner three years ago, presently holds a 9.9% interest in Ivanhoe Mines. Under the
current financing agreement with Ivanhoe Mines, Rio Tinto may increase its stake to up to 43.1%,
with a right to go to 46.6% through purchases on the open market during the next two years.
The Investment Agreement was signed by Mr. Peter Meredith, Deputy Chairman of Ivanhoe Mines,
Mr. Bret Clayton, Chief Executive of Rio Tinto's Copper and Diamonds Group, and Mr. Keith
Marshall, Managing Director of Ivanhoe Mines Mongolia Inc. Signing for the Mongolian Government
were Mr. S. Bayartsogt, Minister of Finance, Mr. D. Zorigt, Minister of Mineral Resources and Energy,
and Mr. L. Gansukh, Minister of Environment and Tourism, all members of the Government's
Working Group that negotiated the terms of the final agreement.
In his speech at the ceremony, Mr. Clayton said that Rio Tinto is excited by the significant
exploration upside potential offered at Oyu Tolgoi. “While Oyu Tolgoi is clearly a world-class asset,
we believe that the area has the potential, over time, to become a world-class mining district.”
Ivanhoe Mines' Chairman Robert Friedland said it is appropriate that the Mongolian Government
carefully considered the symbolic significance of staging the signing on October 6, traditionally an
auspicious day for new beginnings, based on Mongolian Buddhist astrological calendars.
"This is the godfather of new beginnings for Mongolia, whose revered founding leader helped shape
the history of the world. Today, there is a new, outward-looking determination rising among
Mongolians, who have resolved to draw on the country's remarkable and largely untapped mineral
wealth to help build an independent nation for the millennium."
Source: Ivanhoe Mines
INVESTORS PRAISE GOVERNMENT’S SENSE OF COMMITMENT
Mr. Sam Regal, who led the investors’ side at the long negotiations that culminated in the signing of
three agreements on Oyu Tolgoi on Tuesday, said at a press conference after the event that both
Ivanhoe Mines and Rio Tinto had made many agreements with other nations “but never before have
we seen a Government like the present one in Mongolia that was so focused, tried so hard, and had
such an ethical and professional approach”. The investors, he promised, would “establish the
biggest mining factory in the world to repay your efforts”.
Mr. Peter Meredith, Deputy Chairman of Ivanhoe Mines, denied rumors that any part of the USD250
million advance payment would be taken from China. “If you visit Ivanhoe’s website, you will find
the company has more than USD300 million in cash and has no need to borrow money, from China
or elsewhere,” he said.
Clarifying aspects of the employment prospects, Mr. Keith Marshall, Managing Director of Ivanhoe
3. Mines Mongolia Inc., said all such projects have two stages. In the first stage of construction, many
international professionals will be needed but Mongolian workers will be no less than 60 percent of
the total. This will rise to about 90 percent when the second stage, that of production, begins.
Asked about the total quantum of the investment and where it will come from, Mr. Regal said the
investors “have enough financial resources needed in the first stage” which would cost USD 2.1
billion. USD2 billion more would be needed later, and “we have started talking to international
financial organizations”.
Source: www.news.mn
ELBEGDORJ GREETS “INVESTORS YESTERDAY, PARTNERS TODAY”
President Ts.Elbegdorj greeted senior Rio Tinto and Ivanhoe Mines officials at a meeting on
Wednesday with the words, “You were investors until yesterday. Today you are our partners.”
Congratulating everybody on the successful signing of the agreement, he said, “We share a
responsibility to usher in a new era for the Mongolian economy that will fulfill the dreams of our
people.”
The team that called on him was led by Rio Tinto CEO Tom Albanese, and included Mr. Peter
Meredith, Deputy Chairman of Ivanhoe Mines, Mr. Bret Clayton, Chief Executive of Rio Tinto's
Copper and Diamonds Group, and Mr. Keith Marshall, Managing Director of Ivanhoe Mines Mongolia
Inc.
The President told them Mongolians were sure the mine will become “a model for the world”. The
project should be “responsible, transparent and safe”, he said, adding, “We trust you to honor the
rights of our people.”
Mr. Albanese reassured the President that Rio Tinto has an excellent record wherever it works, and
the Oyu Tolgoi project also will “protect the interests of the people, the nature and the future of
the Mongolia”. The project will employ the newest technology and the best professionals, he said.
The President’s parting words echoed this. He said, “Mongolia has for the past 20 years been known
for its commitment to democracy and a free economy. Now, it will have a new identity as the place
that has the most efficient and transparently run mine.”
Source: Ardiin Erkh
OT AGREEMENT IS AN AGREEMENT FOR TOTAL ECONOMIC REVIVAL
Mongolians want Oyu Tolgoi to be more than a strategic deposit, and are looking forward to the
investment agreement to become an agreement for national revival. It must be used to rejuvenate
a moribund economy, acting as the motor for progress. For too long has the whole country been
dependent on just one milch cow, the Erdenet copper plant, and now that doors to opportunities
are opening wide for domestic companies, it is for them to make best use of these. Only when all
the promises held out by development of Oyu Tolgoi are fulfilled will it be possible to forget six
years of politicization of an issue that was essentially economic.
Source: Udriin Sonin
OT TO REMAIN IMPORTANT FOR MONGOLIA’S ECONOMY “100 YEARS FROM NOW”
Based on Ivanhoe Mines' discoveries there in the past nine years, independently verified estimates
indicate that Oyu Tolgoi contains approximately 79 billion pounds of copper and 45 million ounces
of gold in measured, indicated and inferred resources. Ivanhoe plans to issue a revised Integrated
Development Plan soon, but initial indications are that the current resources will support planned
open-pit and underground mining for 60 years. Annual production during the mine's life is expected
to exceed the levels projected at present.
“The overall size and scope of the deposits have not been established and exploration is continuing.
We're confident that additional resources will be delineated and that Oyu Tolgoi still will be an
important part of Mongolia's economy 100 years from now,” Ivanhoe Mines' President and Chief
Executive Officer John Macken has said.
Current planning indicates that initial production can start in mid-to-late-2013.
Source: en.News.mn
TAXATION ENVIRONMENT TO BE KEPT STABLE
The agreement's comprehensive taxation provisions clarify the application of current Mongolian
legislation. In addition, Ivanhoe Mines Mongolia Inc. (IMMI) will receive a 10% investment tax credit
4. on all capital expenditures and investments made throughout the construction period.
Any future taxes introduced will not be imposed on the project unless they are more favorable. If
Mongolia enters into a treaty that provides greater benefits to the investor, Ivanhoe may request
the benefit of such law, regulation or treaty to help ensure that a stable taxation environment is
maintained.
Within 14 days of the Investment Agreement taking effect, after all conditions precedent have been
satisfied, Ivanhoe Mines shareholders will be asked to approve a resolution transferring 34% of the
shares of IMMI to Mongolia's state-owned Erdenes MGL.
Ivanhoe will arrange financing for the construction of Oyu Tolgoi within two years of the Investment
Agreement taking effect; production must begin within five years of financing being secured.
Ivanhoe will fund the Government's share of initial capital costs, to be financed through loans and
equity during the construction and initial production periods. Ivanhoe will receive loan repayments,
redemption of the equity, dividends and interest at a rate of 9.9%, adjusted to the U.S. CPI.
Erdenes will nominate three directors and Ivanhoe will nominate six directors to the nine-member
IMMI board.
Read more…
Ivanhoe will nominate the management team to take responsibility for core operations.
Management services payments will be received, based on capital and operating costs through the
construction period and after production begins.
The Government will have the option to purchase an additional equity interest of 16% of IMMI, at an
agreed upon fair-market value, one year after the expiry of the initial 30-year term of the
Investment Agreement and following the start of the permitted 20-year extension. This would give
the Government a total maximum interest of 50% of Oyu Tolgoi for the remainder of the project's
operational life. Ivanhoe would continue to hold management rights over the project and hold a
deciding vote at board and shareholder meetings.
A condition of ownership is that Erdenes must remain wholly owned and controlled by the State for
the life of the project. The only exception would be if the State listed Erdenes shares on the
Mongolian Stock Exchange, at which time any and all money invested on the Government's behalf
would have to be immediately paid in full.
Ivanhoe Mines has agreed to make advance payments to the Government of Mongolia. The three
payments, which will total USD250 million, will be secured by Mongolian Government bonds that
will mature after five years and pay annual interest of 3.8%.
Source: Ivanhoe Mines
COMPREHENSIVE SKILLS TRAINING PLAN FOR MONGOLIANS SOON
Speaking at the signing ceremony, Mr. Peter Meredith, Deputy Chairman of Ivanhoe Mines, said that
approximately 4,000 Mongolians already have worked on the project during the past nine years of
exploration and development. “More than 500 Mongolian businesses have supplied goods and
services to the project,” he said. “Local procurement, training and employment opportunities will
only increase in size and scope in the future.”
The specific terms of the Investment Agreement include commitments that:
- At least 90% of the project's employees will be Mongolian citizens. During construction and any
expansion periods, at least 60% of the contractors' employees will be Mongolian citizens; and for
mining and mining-related work, at least 75% of contractors' employees will be Mongolian citizens.
- Within five years, at least 50% of engineers will be Mongolian citizens, increasing to at least 70%
within 10 years.
- A comprehensive, five-year Oyu Tolgoi Training Strategy and Plan will be submitted to the
Government for the training of skilled Mongolian workers within 90 days of the agreement taking
effect.
- As part of a graduate scholarship program to be established by Ivanhoe, 120 scholarships will be
given over six years to Mongolian students studying in Mongolia and 30 Mongolian students will be
awarded scholarships to study at universities abroad.
- The Government will support the introduction of international mining education and training
courses at selected universities and vocational training institutions within six months of the
agreement taking effect.
- Ivanhoe will ensure payment of fair wages and equal remuneration for work of equal value.
Source: en.news.mn
5. SPECIAL BENEFITS FOR UMNUGOVI REGION, NOMADIC HERDERS
Ivanhoe and Rio Tinto have agreed to give priority, where possible, to buying and using services
provided by Mongolians, and equipment and materials made in Mongolia, with a preference to
businesses located in the Umnugovi region, which contains Oyu Tolgoi.
Priority will be given to residents of local communities for training assistance and jobs. Support will
be given to special programs to help start and develop local businesses capable of supplying Oyu
Tolgoi and to help Mongolian businesses diversify to reduce their dependence on the project.
Nomadic herder families impacted by the Project will continue to receive compensation.
Ivanhoe will support and participate in the Southern Gobi Regional Development Council, to be
established by the Government, which will formulate a development strategy for the region. Issues
to be addressed will include:
-- Transparent and responsible governance;
-- In-migration influx issues;
-- Urban planning and development;
-- Formal and non-formal education, including English-language and vocational training;
-- Health care, cultural facilities, sport facilities and veterinary services;
-- Capacity building for local governments and civil society.
Source: Ivanhoe Mines
INVESTORS TO SUBMIT REGULAR ENVIRONMENTAL PROGRESS REPORT
Ivanhoe has pledged to apply modern extraction and processing technology that meets Mongolian
and international environmental codes and standards, and to ensure minimum environmental
impact to an economically feasible extent.
- An independent report on the progress of the project's environmental protection plan and
monitoring program will be submitted every three years and made public.
- The cost of eliminating adverse impact on air, water, soil, animals and plants will be borne by the
project.
- The project has the right to use during its life for any purpose connected with it water resources
that Ivanhoe has discovered. Surplus water may be made available to other economic entities
provided Ivanhoe is compensated for its exploration costs.
- Water discovered by Ivanhoe will be made available to herder families and community residents
for household purposes - and Ivanhoe will guarantee the supply of livestock drinking water for
existing users in the area. Water surplus to household requirements will be made available for
local, non-commercial agricultural uses.
- Modern technology and procedures will be applied to minimize water usage and water will be
recycled where practicable.
- Areas closed to further mining will receive environmental rehabilitation and potential hazards will
be addressed to protect the public.
Source: en.News.mn
IVANHOE CAN ACCESS ELECTRICITY FROM OUTSIDE MONGOLIA FOR FIRST FOUR YEARS
As the supply of reliable electricity is critical to the project, Ivanhoe has the right to obtain power
from inside or outside Mongolia, including arranging the construction of a high-voltage line from
Oyu Tolgoi to the Mongolia-China border to connect with Chinese supply. Ivanhoe also has the right
to build or sub-contract construction of a coal-fueled power plant at an appropriate site to supply
the project, which could be supplemented by renewable wind or solar power. Within four years of
the start of mine production, all power requirements must be sourced from within Mongolia, either
from a coal-fueled plant or from the national distribution grid.
Ivanhoe may build an international road from Oyu Tolgoi to the Gashuun Sukhait crossing on the
Mongolia-China border, with costs to be deducted from annual taxable income. The Mongolian
Government would be responsible for maintaining the road and collecting fees from other users.
The Government may construct, or permit a third party to construct, a railway in the vicinity of Oyu
Tolgoi to the Mongolia-China border, to be made available to Oyu Tolgoi on competitive commercial
terms. Ivanhoe would be consulted on the route.
Source: Ivanhoe Mines
6. CASES FILED AGAINST BORROWERS AT ANOD BANK
The Central Bank has revealed that as on August 31 Anod Bank had MNT164.3 billion of loans issued
to 4,642 customers. Of these 13.4% are being repaid on schedule, 2.9% are overdue, and 83.7% are
non-performing. MNT 125.5 billion or 76.4% of the entire loan package is with 40 borrowers. Cases
have been filed against 57 customers who together owe the bank MNT55.1 billion and USD7.7
million.
Source: Onoodor
POLO RESOURCES REPORTS COAL RESERVE ESTIMATE OF 807 MILLION TONS AT ERDS
Polo Resources Ltd. has announced that its Erds coal project in Mongolia returned a JORC compliant
maiden resource statement, estimating a total indicated and inferred resource of 807 million tons
of thermal coal. The Erds project is being explored by a recently established 50:50 joint venture
with Peabody Energy Corporation. The joint venture has 54 licenses throughout the South Gobi
region and elsewhere in Mongolia which are currently being explored for coal. The Erds project is in
Dornogovi province. It is close to rail and power infrastructure and is around 140km from the border
of China.
The Erds project adjoins a tenement to the west owned by Gulfside Minerals Ltd. who recently
announced a NI 43-101 compliant resource of 1.185 billion tons of thermal coal at the Onjuul coal
deposit. The joint venture company has an extensive footprint in the immediate area around the
Onjuul deposit with the Altanshiree tenements immediately south of the Gulfside resource and
adjoining the Erds resource to the east.
The geology of the coal basin strongly indicates that additional coal resources will be discovered at
Altanshiree. Drilling is due to commence there soon, Polo said. Preliminary observations show
sediments overlying the coal have weak rock strength, which may place constraints on potential
future pit designs. Overall, however, according to Polo Resources managing director Neil Herbert,
“The Erds coal deposit has very good potential for development into a large scale mine with a low
strip ratio, producing a low rank thermal coal product for power stations.”
Source: www.poloresources.com
AREVA TO INCREASE INVESTMENT IN MONGOLIA
A memorandum of understanding was signed between the Nuclear Energy Agency and the Areva
Group of France during a one-day visit by the company chairperson, Mrs. Anne Lauvergeon, to
Mongolia on October 5. Areva has been exploring uranium in various provinces of eastern Mongolia
for 11 years and more recently in Dornogobi and Sukhbaatar provinces. Areva is planning to increase
its investments, intensify exploration work, and train professionals according to the present MoU.
It would also like to establish some joint activity with the State-owned MonAtom.
Mrs. Lauvergeon called on President Ts.Elbegdorj, Prime Minister S.Bayar, and Foreign Minister
S.Batbold, and told them her Group is ready to help Mongolia reduce its unemployment rate and go
on contributing to local development.
Source: Undesnii Shuudan
RIO TINTO SELLS U.S. COAL MINE FOR USD764 MILLION
Diversified resources giant Rio Tinto has sold its Jacobs Ranch coal mine in the US to Arch Coal for
USD764 million. Rio, which is selling non-core assets to pay down debt, agreed in March to sell the
mine for USD761 million in cash, but the price was adjusted to reflect the closing working capital
balance.
Source: www.miningweekly.com
RUSSIAN URANIUM MINER ARMZ EYES PROJECTS WITH CAMECO
Russian uranium miner ARMZ Holding is holding talks with Cameco on projects in Australia and
Africa after strategic investment laws stalled the Canadian miner's projects in Russia. State-
controlled ARMZ, which mines uranium in Russia and Kazakhstan, has also raised its 2009 output
forecast to 4,700 tons from an earlier estimate of 4,300 tons, the company has said.
“Cameco at present is offering us projects in other countries,” a company official said, adding
these projects were in Africa and Australia, without being more specific.
Demand for uranium is growing worldwide as more nuclear power plants are panned to be built by
countries trying to cut emissions and reduce fossil-fuel dependence. However, spot uranium is
7. trading at USD46 per pound, down from around USD136 in June 2007.
ARMZ plans this month to hold talks in Namibia with French state-controlled nuclear reactor maker
Areva on uranium projects in Africa, the Russian company's general director, Mr. Vadim Zhivov, said
last month. President Dmitry Medvedev visited Namibia in June as part of a trip to promote Russia's
economic interests in Africa. Namibia's uranium resources are attractive to the Kremlin, which plans
to build over two dozen new reactors in the next 15 years.
ARMZ, the mining arm of state nuclear concern Rosatom, plans to increase uranium production to
4,700 tons this year from 3,880 tons in 2008.
Source: Reuters
ECONOMY
CENTRAL BANK SUBMITS DRAFT GUIDELINES FOR NEXT YEAR’S MONETARY POLICY
The Central Bank has submitted to Parliament Speaker D.Demberel a draft of guidelines for the
monetary policy in 2010. The President of the Bank, Mr. L.Purevdorj, said the guidelines covered a
wide range of measures to reverse the economic decline and to restore growth to the level of 2008,
slow down inflation and maintain stability of the MNT.
He also discussed with the Speaker the Central Bank’s plans for a special program aimed at
resolving difficulties in the banking sector, especially at reducing the number of bad loans as well
as the financial risks, and at raising the sense of discipline and responsibility in all banks.
Source: Undesnii Shuudan
MINISTER WANTS MORE ECONOMIC COOPERATION THAN LOANS AND AID
Minister for Road, Transportation and City Development Kh.Battulga has stressed the need to give
due importance to economic matters when foreign relations are discussed. He has also urged that
more attention be paid to forging international economic cooperation, instead of negotiating only
for loans and aid.
He favors building a 500-km railroad from Tavan Tolgoi to Sainshand and another 500 km to connect
Sainshand and Choibalsan. “Not all mining products can be sold to China or exported through
China,” he said, adding that this railroad would afford access to the sea and to the Korean
peninsula. The USD10 billion needed for this is beyond the capacity of Mongolia and “we need to
attract foreign investors”, he said.
Asked why investors’ regular requests to build a railroad to Bichigt port in Sukhbaatar province are
not heeded, the Minister said a railroad has to be seen “not only as a business proposition, but also
as a tool in geopolitics and geo-economics”. The railroad to Bichigt will certainly help miners export
ore to China “but Mongolia has to look beyond providing other countries with unrefined products to
help their industries”.
Mr. Battulga revealed that both Russia and China had turned down a Mongolian request to build an
oil and gas pipe line from Russia to Asian countries through Mongolian territory. “They are both
great nations but they did not favor the proposal,” he said.
Source: Onoodor
“OUR EMERGENCY LOANS SAVED BANKS,” CLAIMS CENTRAL BANK OFFICIAL
The Director of Monetary Policy and Research in the Central Bank, Mr. D.Boldbaatar, has strongly
refuted the allegations of a former President of the Bank and now Member of Parliament, Mr.
O.Chuluunbat, that loans given by the Central Bank to commercial banks last year were illegal and
some of them have not been paid back. Mr. Chuluunbat had alleged that the Central Bank had
provided more than MNT100 billion to commercial banks as bail-out funds without any
authorization.
Mr. Boldbaatar asserted that the Central Bank did not need any permission from outside to give
loans to commercial banks. A number of requests were received from commercial banks in
November and December for loans. Related departmental directors and a working group under the
direct control of the Bank President and Vice President studied the requests and agreed to bail the
banks out, mostly through offering mortgage loans.
The Bank had estimated it would need MNT147.9 billion, but MNT129.5 billion was lent and the
commercial banks have repaid the amount in full. This figure does not include the money used to
8. keep Anod Bank afloat. He reiterated that 2008 had been a very difficult year and claimed that the
commercial banks in Mongolia had been saved by the Central Bank’s action.
Source: en.News.mn
5 BANKS ENOUGH FOR MONGOLIA, SAYS CENTRAL BANK PRESIDENT
Central Bank President L.Purevdorj thinks the small population of Mongolia does not warrant the
country having 16 commercial banks as at present. According to him, five of them would be enough
and they should be the ones that are largest.
Many bankers and economists find it strange that the country’s chief banker should have such
opinion. Three banks -- Chinggis Khaan Bank, Savings Bank and Mongol Shuudan Bank -- are owned
by one man, the Russian businessman Sergey Gromov, while Zoos Bank is in talks with a Chinese
buyer. Several other banks also have foreigners owning the majority of their shares. Is this healthy
for the economy? Is it not a surrender of independence and national security to have foreigners
controlling a most important sector of the national economy? One would expect the Central Bank to
encourage the coming up of more and stronger nationally owned financial institutions, instead of
widening the space for foreign interests in our small economy.
Source: Udriin Sonin
TRADE OFFICE SOON IN TIANJIN
Mongolia will soon set up an Ulaanbaatar Representative Office in Tianjin, China to help Mongolian
organizations work in the free trade area there, in pursuance to a decision taken during the visit of
Prime Minister S.Bayar to China in April.
Source: Zuunii Medee
NO MARKET FOR PRODUCTS MAKES LIFE HARDER FOR HERDERS
Parliament’s decision to waive tax on export of raw cashmere came at a time when the Chinese had
banned imports on hygienic grounds. This unfortunate coincidence has put herders and local traders
in real difficulty. Stall holders at the wholesale market at Emeelt have left to seek other ways of
making a living.
They blame the Government for willful delay and say the decision was taken after herders and
traders had already sold a considerable quantity of raw cashmere to Chinese, at a buyers’ price.
China now has enough stock and will not be looking for cashmere even when the health scare has
passed. Trade with domestic companies is not a favored option, as they buy on credit, and pay
either too late or not at all. Even if they traded fairly, domestic processing capacity can deal with
only 20% of the national annual output of 6,500 tons cashmere, 25,000 tons of lamb’s wool, 2,000
tons of camel wool, and 600 tons of yak wool per year.
Instead of encouraging cheaper export of the raw material, efforts should be made to develop
domestic production of finished goods. The logic is the same as in the mining sector, but the
politicians’ commitment to boosting the herder economy is more fragile, it seems.
Source: Undesnii Shuudan
MDG PROGRESS REPORT SAYS POVERTY WILL NOT BE ELIMINATED BY 2015
The Government has ratified the third national report on Mongolia's progress toward reaching the
Millennium Development Goals which places overall implementation so far at a healthy 66.0-66.3
per cent. Four different methods were used for the evaluation.
The report covers the work done in 2007-2008 and 24 goals and their 67 criteria. The
implementation rate in 2008 stood at 77.8 percent, an increase of 17.2 points over the previous
report. However, the report stresses that poverty is not likely to be reduced by 2015 in Mongolia.
Source: Zuunii Medee
KHUVSGUL MEETING ON MINING HEARS COMPLAINTS ON DELAY OVER LICENSES
A number of participants at a recent meeting on the status of extractive industries in Khuvsgul,
organized jointly by the province administration, the Open Society Forum and a coalition of civil
movements, openly blamed “some bureaucrats who make a business of selling licenses" for the long
delay in beginning mining work in the region. At present there are 15 mining licenses and 125
exploration licenses covering the province. Following environmental concerns being raised, these
and new applications are being carefully reviewed.
9. Source: Montsame
CONSULTATIVE COUNCIL PREPARES THREE RECOMMENDATIONS
The Consultative Council on Investment Climate and Private Sector Development in Mongolia has
recommended that the Minister of Finance, the Governor of the Central Bank, the Chairman of the
Financial Regulatory Committee, and the Director of the General Authority for State Registration be
urged to take steps so that information on individuals and legal entities can be exchanged easily. It
also wants these authorities to see that a relevant legal environment is created allowing the private
sector to be included in the database of the credit information bureau.
The Council also wants the Ministry of Finance, the Ministry of Food, Agriculture and Light Industry,
and the Financial Regulatory Committee to study how Public-Private-Partnership principles can be
applied to the loan guarantee service sector, so that SMEs get reliable and fruitful access to
financial sources.
The Council has also recommended that the Minister of Finance, the National Development and
Innovation Committee, and the General Authority for State Registration be requested to take
measures in collaboration with other relevant agencies to implement the Ten-Month Action Plan
developed by IFC.
Source: www.consultativecouncil.mn
MONGOLIA LURES LUXURY GOODS MAKERS
Could Ulaanbaatar be the new front line for luxury goods makers? Later this month, Louis Vuitton
and Ermenegildo Zegna will open shops on Sukhbaatar Square, and other luxury brands are on the
same trail.
“I’m looking for a partner there,” said Mr. Andrea Bonardi, managing director of La Perla Asia, the
luxury lingerie company. “It’s a very niche market, but one which has potential. The right time is
now. They’re hungry for new things.”
Mongolia is still one of the poorest nations in Asia, but a small wealthy elite has slowly emerged —
one that shops at department stores and parties at swanky and cool nightclubs. Like pockets of
wealthy people in many emerging locations, that group is attracting luxury goods companies.
“They’re looking forward to showing off their status by buying luxury goods,” Mr. Bonardi said.
“First-comers into the market are therefore at an advantage to reap the benefits of a growing
demand.”
Mongolia is not the only place off the beaten path where luxury brands are expanding. “For global
luxury brands, any market with sufficient critical mass of affluent and wealthy consumers, or an
anticipated critical mass of affluence in the next 10 years, should be a strategic imperative,” said
Mr. Milton Pedraza, chief executive of the Luxury Institute, an independent research institute based
in New York.
Source: The New York Times
ULAANBAATAR PROPERTY MARKET READY TO BOOM
The collapse in the price of copper greatly impacted the unprepared Mongolian economy. Most
property prices fell between 20 to 50%. However, this was not true everywhere. Some sectors not
only remained stable but appreciated in value, for example the high-end prices have remained
generally stable while properties that benefit from an excellent location and middle to high end
pricing have gained in value as they are considered a safer investment. The demand for quality
properties has not dropped (if at all) as fast as the supply has. Not everyone in the Mongolian
economy was hit equally hard, indeed some benefited handsomely from the crisis.
Since the winter, property prices have slowly risen again even if they are still a far cry from their
pre-crisis levels. As the economy explodes after the signing of the Oyu Tolgoi investment
agreement, it is likely that the property market will follow. New investments will undoubtedly
affect the demand of real estate; more office space will be required by companies, and new
comfortable apartments will be needed for expat families, not to mention the increasing need for
hotels, restaurants and shops.
The bulk of the new demand will come from the increasingly wealthy Mongolian middle class. They
are the end user and the main players in this market, and it is their new found wealth that will
dictate the property prices in most areas of the market. As Mongolian commercial banks recover
and mortgages are once again available, the market will gradually move from cash-only purchases
10. to mortgage-driven acquisitions, thereby making house ownership affordable to a larger segment of
the domestic market.
While the levels of demand are expected to increase exponentially, there will be an equally distinct
lack of new supply. It will take at least two to three years before we experience again a consistent
supply of new properties on the market. This supply is not only limited by financial constraints, and
the harsh weather conditions which limit the available construction time, but also by the lack of
available buildable land. With no serious Government commitment to infrastructure development
predicted in the near future, buildable land will command an even greater premium and property
prices will rise accordingly.
Source: www.degruben.com
HOW RUSSIA PLAYS ITS NUCLEAR CARD, IN MONGOLIA AND ELSEWHERE
According to estimates from the International Atomic Energy Agency, global reliance on nuclear
energy will double by 2030. The nuclear boom has boosted uranium prices by more than 10 times
over the past five years Countries with uranium reserves and nuclear technology will hold sway in
the global power industry for the next two to four decades.
As President Dmitry Medvedev put it recently, Russia could claim a quarter of the world’s “nuclear
pie”.
Russia is a member of an elite nuclear club which offers huge future benefits. First, few countries
in the world know the secrets of building state-of-the-art and reliable power plants. Second, few
countries possess uranium enrichment technology. And finally, the countries producing fuel for
nuclear power plants can be counted on the fingers of one hand. Russian companies are ready to
provide the entire cycle of production, from uranium mining to nuclear power plant construction.
Today, Russia accounts for 40 percent of the world’s uranium enrichment facilities, 17 percent of
the international fuel market, 28 percent of the plant building capacity and 8 percent of uranium
mining.
So far, Russia’s uranium needs are covered from Soviet-era stockpiles of nuclear weapons, but what
will happen next? To be on the safe side, Moscow has decided to secure access to foreign uranium
reserves. Russia’s Rosatom Nuclear Energy State Corporation has already signed uranium contracts
with South Africa and Australia. Another way is to deepen co-operation with uranium-rich nations in
the first place, for example Central Asian republics and Mongolia. Neighboring Kazakhstan has the
world’s third largest reserves of uranium, after the US and South Africa. Mongolia is next, occupying
fourth place, but its prospective reserves (1.3m tons) could make it one of the world’s largest
uranium suppliers.
Read more…
Today, Russia has joint uranium mining projects with Kazakhstan, Armenia and Namibia. Rosatom is
also preparing to initiate production in Mongolia. Fifteen foreign companies have tried to start up
uranium production in Mongolia over the past 15 years, but were unable to plough the country’s
virgin nuclear soil. Russia’s exploration and production technology now allows for the development
of deposits that were earlier deemed unrecoverable.
Those countries that co-operate with Rosatom in uranium production will receive nuclear fuel
supply guarantees for the next 60 years. Russia is also ready to offer the unique services of an
international uranium enrichment centre in the Siberian city of Angarsk.
Source: Russia Now
NEW POLICY DOCUMENT TO CHANGE ECONOMY, CLAIMS JOINT VENTURE CHIEF
Mr. V.V.Morozov, Executive Director of Infrastructure Development, the Russia-Mongolia joint
venture established in May to steer new developments in the Mongolian railway, has said a policy
document formulated by the company will serve as a foundation for increased international trade,
economy and cooperation in the region, going beyond railway and transport issues.
The document covers all areas of the Mongolian economy. Industrialization will be at the core of
development and this cannot be successful without transit transport facilities. There must be a
railway line connecting Europe and Asia and the present capacity of Ulaanbaatar Railway should
also be increased.
The document will be presented at an international conference on October 15 where senior
officials, large delegations from China and Russia, and international investors are expected to
attend. The document, Mr. Morozov clarified, does not reflect the position of any investor or
11. country. The authority to take decisions lies with the Mongolian Government.
Source: Onoodor
SEMINAR ON OCTOBER 14 ON RAISING CAPITAL
A seminar on "Raising capital--New Opportunities for Mongolian Companies" will be held on October
14 in Ulaanbaatar. It is being jointly organized by a leading asset management company, the Bank
of New York Mellon, and the London Stock Exchange with cooperation from Khan Bank, Golomt
Bank, Trade and Development Bank of Mongolia and Tengri Securities.
BNY Mellon planned the conference to provide Mongolian companies with a broad range of
information about raising capital in both domestic and international markets and stocks issuing, and
to discuss aspects of corporate governance. Participation is free.
Source: www.bny.mellon.com
WORLD COPPER SUPPLY GAP COULD REACH 10 MILLION TONS IN 2020
A copper supply shortage is looming, but top-tier copper resources that could fill the supply gap are
not only hard to find, but would take time to turn to account. Independent consultancy GFMS says a
copper deficit of 88,000 tons is likely, which, it says, is likely to push copper price to USD7,500 a
ton in 2010. GFMS expects higher prices each year, stretching out to 2012.
BHP Billiton base metals marketing director Dave Martin says, “We have a challenge in copper
supply and need the industry to develop resources.” Mr. Martin calculates that there will be a
copper supply gap of 10 million tons in 2020. He arrives at the figure by adding the supply from the
current mines, planned expansions, mines under construction and probable greenfield expansions.
Some of that gap will be filled by copper scrap, but the question remains about how all of it is going
to be filled.
The vehicle-related and general consumer-related copper sales are collectively up there as the
biggest single driver of demand, and growing in prominence is the use of underground copper
cabling that is being used increasingly to distribute electricity, particularly in China. The view of
several market analysts is that China will provide the demand in growth over the coming years and
that the mining challenge will be the meeting of that demand.
Source: www.miningweekly.com
COPPER PRICE SEEN AT RECORD HIGH BY 2013 AS MARKET TIGHTENS
Copper is likely to reach a new high by 2013 as the market moves into a deficit and further tightens
in the coming years, RBS Global Banking & Markets has said. “Copper remains our most favored base
metal,” RBS said in a research note on October 1, in which it forecast an average cash copper price
of USD9,000/t by 2013, a rise of more than 46% from the current cash price on the London Metal
Exchange.
“Copper's demand prospects are not among the best, but we believe copper producers will have the
most difficulty in keeping up with growing demand. We forecast an underlying market deficit by
2011 and that by 2013 it will be fast approaching pre-recession tightness,” the bank said.
Copper, used extensively in construction, has doubled in price since the beginning of the year on
the back of restocking from China, the world's top consumer of the metal and on expectations of a
recovery in the global growth.
Gold was set to average USD950/oz this year, RBS said, adding gold would benefit from uncertainty
ahead, potential dollar weakness and anticipation of inflationary pressures.
Source: Reuters.com
GOLD TO HOLD ABOVE USD1,000 PER OZ, PREDICTS MINER
The chief executive of a South African gold mining company has said the price of gold could stay
above USD1,000 per oz this year after it hit a new record this week, with dollar weakness
continuing to support sentiment by attracting fresh investment in the precious metal.
Mr. Graham Briggs, CEO of Harmony, the world's fifth-biggest gold producer, said, “My preference is
that it should not rocket fast, but that it should creep up steadily. The fundamentals have
supported the expectation that the price was likely to go up, because of lack of new supply, rising
production costs and the fact that successful explorations have been few and far between.”
Source: Reuters.com
12. CHINESE CONSUMERS TO LEAD THE WORLD OUT OF RECESSION
One year after the global economy went into a tailspin, many economists are wondering whether
Chinese consumers, once a thrifty lot, will lead the world out of the recession. Last week, the
International Monetary Fund said China would do just that, thanks in part to the Government's
USD600 billion stimulus package and a flood of bank lending. The IMF increased its forecast of
Chinese growth to 8.5 percent in 2009 while lowering its forecast for the U.S. economy, which it
said would shrink 2.7 percent.
In the past, yanking the world economy out of the doldrums has been the job of American
consumers, who have accounted for about two-thirds of U.S. gross domestic product and who for
years bought enough imports to keep factories running from southern China to northern Mexico to
central Europe. But as debt-laden American consumers tighten their belts, some officials hope that
Chinese consumers will loosen theirs.
In China, consumer spending accounts for only 36 percent of GDP. The country has the world's third-
largest economy, but it ranks only fifth in consumption, according to a recent McKinsey Quarterly
article, which called spending "anemic by almost any measure". Its savings and investment rates are
higher than those of any of the frugal "Asian tiger" countries.
So the Government has been stoking the economy not only with big infrastructure projects, but also
with incentives for things like new television sets. Mortgages are cheap and plentiful. Morgan
Stanley estimated that, using conservative projections, China's total consumer spending will surpass
that of the US by 2018. In the first seven months of the year, vehicles sold in China reached 12.3
million on an annualized basis, exceeding the US for the first time ever, according to Morgan
Stanley.
Read more…
After years of socking away their meager earnings in banks, Chinese consumers are also starting to
spend on services, a category where they lag behind U.S. consumers. According to marketing
research by Ogilvy & Mather, 70 percent of Chinese children attend at least one extracurricular
program, mostly English classes. Ten million are learning to play violin. One million Chinese people
a year get cosmetic surgery.
Even though scores of millions of Chinese toil for low wages in factories, Chinese consumers buy 12
percent of the luxury goods sold worldwide, and the number of people able to afford such items is
expected to quadruple in two years, to 160 million. Sixty percent of Chinese say luxury goods are a
sign of success and social status, according to Ogilvy.
Source: washingtonpost.com
CHINA SET TO BECOME WORLD’S SECOND LARGEST ECONOMY SOONER THAN THOUGHT
Though recent wild currency swings could delay the day of reckoning, many economists expect
Japan to cede to China its rank as the world’s second-largest economy sometime next year, as
much as five years earlier than previously forecast. The reversal of fortune will bring an end to a
global economic order that has prevailed for 40 years, with ramifications across arenas from trade
and diplomacy to, potentially, military power. China’s rise could accelerate Japan’s economic
decline as it captures Japanese export markets, and as Japan’s crushing national debt increases and
its aging population grows less and less productive — producing a downward spiral.
Not long ago, Japan was “the economic miracle”, an ascendant juggernaut on its way to rivaling the
US, which has the biggest economy. Now, many ask whether Japan is destined to be the next
Switzerland: rich and comfortable, but of little global import, largely ignored by the rest of the
world.
Japan’s economy shrank at an annualized rate of 11.7 percent in the first three months of the year
before recovering to a modest 2.3 percent annual rate of growth in the second quarter. The
Chinese economy is likely to expand 8 percent in 2009, while economists expect the Japanese
economy to shrink 3 percent for the year before returning to anemic growth of about 1 percent
next year.
China has also surpassed Japan in having the biggest trade surplus and foreign currency reserves, as
well as the highest steel producer. And next year, China could overtake Japan as the largest
automobile producer. Per-capita income in China is still less than a tenth that in Japan. But by
other measures, the Chinese economy long ago overtook that of Japan. In terms of overall
purchasing power, China surpassed Japan in 1992 and will overtake the US before 2020.
Source: The New York Times
13. POLITICS
ANTI-CORRUPTION AUTHORITY PROBING COMPLAINT AGAINST ENKHBAYAR
The Anti-Corruption Authority (ACA) has started investigating a complaint about some financial deal
involving former President N.Enkhbayar. The ACA refused to give any details of the complaint.
Source: Ardiin Erkh
SUBCOMMITTEE FAVORS EXPELLING EX-MINISTER GUNDALAI FROM PARLIAMENT
The Sub-Committee on Parliamentary Privileges has recommended expulsion of DP MP L.Gundalai
from Parliament to facilitate his interrogation by investigators on charges of corruption and abuse
of office when he was Health Minister. The decision now has to be supported by the Standing
Committees on Government Structure and on legislation to become effective. The subcommittee
heard the views of the head of the Anti-Corruption Authority and the director of State General
Prosecuting Authority and also ascertained the opinion of the Constitutional Court before reaching
the decision.
Several earlier moves to settle the issue had failed as there was no unanimity among the four
members of the subcommittee. Finally, responding to numerous complaints from citizens about the
lack of action against Mr. Gundalai, it chose to go by the views of the majority, instead of a
consensus, which was felt to be more of a tradition than a legal binding. The three MPRP members
agreed on expelling Mr. Gundalai, while the sole DP member opposed the move. The subcommittee
comprises the four longest serving Members of Parliament.
One of the MPRP members said the General Prosecuting Authority had made a very convincing case
for starting criminal action against Mr. Gundalai which could be done only if his parliamentary
immunity was revoked. On his part, the dissenting DP member said the Constitutional Court was
wrong in deciding against Mr. Gundalai when the matter was still before Parliament. He admitted
that “Parliament had failed to settle the matter within the legally stipulated period” but said the
Constitutional Court, too, “violated the Constitution by overstepping its authority”. He also felt
Mr. Gundalai should have been heard before a decision was taken on charges against him.
Read more…
Mr. Gundalai reacted to the decision by calling it “an act of political desperation”. He wondered
why the cases against him and the MPRP MP and former Central Bank President O.Chuluunbat were
being treated differently. “Why are the anti-corruption people and the prosecuting authority not
demanding the revoking of Chuluunbat’s immunity as an MP so that they can question him?”
Denying all charges against him, he said one of these was that he had bought equipment from
General Electric and Siemens even though a Chinese company had offered lower prices. “First, a
Minister does not play any part in the choice among bidders. Second, the equipment has proved to
be very useful and there have been no complaints about them. So how has the state lost? If we had
accepted the Chinese bid, all the machines will be broken by now.”
Source: en.News.mn
BAYAR RETURNS TO SOUTH KOREA FOR MEDICAL CONSULTATION
Prime Minister S.Bayar left for South Korea on Wednesday for further medical consultation. In his
absence the regular weekly Government meeting was chaired by First Deputy Prime Minister
N.Altankhuyag.
Source: Onoodor
EU AID TO INCREASE EVERY YEAR UNTIL 2015
The European Union announced at last week’s 12th Joint Committee meeting in Brussels that the
quantum of its assistance to Mongolia would increase by between five and seven million Euro every
year from 2010 to 2015. The meeting exchanged information on the latest political, socio-economic
and foreign policies and concluded with the signing of an agreement on bilateral cooperation.
The EU pledged help to Mongolia in finding export markets for its agricultural products, particularly
those related to livestock. It would grant an additional 2 million Euro next year to help Mongolia
improve its food safety measures. Mongolia was urged to ensure the most efficient use of EU aid
and to see that it benefited areas and people in real need.
The Mongolian side at the meeting was led by Deputy Premier M. Enkhbold and the EU team by Mr.
J.Moran, Chairman of the Asian Department in the General Department of Foreign Relations. They
14. noted that EU-Mongolia trade turnover increased in 2008 despite the global crisis.
Source: Zuunii Medee
WHAT WILL RUSSIA DEMAND NEXT?
Have the Russians started to impose undeclared but nevertheless effective economic sanctions on
Mongolia? Their oil cartel takes advantage of Mongolia’s total dependence on them and increases
prices with little relation to the international situation. It seems they have a different policy for
Mongolia. Recently they brought up the issue of the grand debt again, almost out of nowhere, and
have followed this up by reducing the monthly amount of oil supply.
They have also established rights of ownership in the railways and in the uranium industry, almost
as if they have a legal entitlement to the right of first refusal. The result is that we cannot build
new railway tracks within our sovereign territory without their agreement. There is no guessing
what more they will demand tomorrow, using oil as their main leverage. Will they grab Tavan
Tolgoi? Will they import meat and pay only USD1 per kilo, to meet the desperate shortage in
Siberia? One wonders why our Government appears so docile and accommodating when dealing with
Russian demands.
Source: Udriin Sonin
ZORIGT SEEN AS FAVORING PRAGMATISM OVER POLITICS
The general view among Chingeltei voters is that the MPRP choice to be its candidate at the
upcoming by-election, Minerals and Energy Minister D.Zorigt, has been a wise one. Mr. Zorigt was
the party’s preferred choice over such heavyweights as Mr. N.Enkhbayar, who has served as both
Prime Minister and President, and Mr. U.Byambasuren and Mr. Ts.Tsogzolmaa, both party faithfuls,
and it now remains to be seen how the electorate responds to this political greenhorn with a likable
personality whose stature has been growing steadily. He is also seen as not a divisive political
figure, but as one who wants to get things done by consensus.
Zorigt is a protégé of both former President N.Bagabandi and Prime Minister S.Bayar. He studied in
Russia, Australia and Japan before joining a State-owned organization at an ordinary level and then
finding his way up solely on merit and competence. The Oyu Tolgoi negotiations have added to his
reputation for tenacity and accommodativeness. These are virtues much needed in this important
period of Mongolian politics. A victory in his first electoral outing will be a deserved feather in his
cap.
Source: Udriin Sonin
DEADLY TOXICITY STALKS KHONGOR REGION, DESPITE OFFICIAL DENIALS
Reports from the Khongor district of Darkhan-Uul province lead one to wonder if the authorities are
trying to hide the facts about the toxic effects of the chemical pollution there. State inspectors
have always maintained that they found no abnormal toxicity during their many tests, and doctors
have said the people and livestock there are suffering from some skin disease that has nothing to do
with cyanogens.
The local people are not convinced. After every rainfall, some people develop rashes all over the
body. Doctors say they have mange, but refuse to say how they are treating it. The rashes turn into
bloody boils. Until now, 52 Khongor residents have died while many are left with scars. Many have
decided to move to another place.
Khongor district has a population of 5,245 and almost every family has an unexplained medical
problem. All this began two years ago when a certain chemical widely and indiscriminately used by
small-scale gold miners was suspected to be the reason. Pregnant animals and people who drank
the water at a certain source had miscarriages or the offspring was stillborn. Not a single miner nor
those who permitted them to use cyanide for washing gold has been interrogated, let alone
punished.
Read more…
Doctors insisted that an elderly man had tuberculosis, but there was no clinical confirmation.
Finally, his abdomen was opened and all his internal organs were found to be full of pus. The man
died soon after. His wife is showing signs of losing her memory. In her case it can be because of age
and the shock of her husband’s death, but there are many other people whose mind seems to be
failing. Young and old all have some kind of spots on their skin. Nasal bleeding has become
common. The doctors do not go beyond mange.
15. Source: Ardiin Erkh
ELBEGDORJ RECEIVES REPORT ON ZORIG MURDER INVESTIGATION
The working group investigating the murder of S.Zorig in 1998 called on President Ts.Elbegdorj last
week to give him information on the progress of their work. The murder in his own apartment of
one of the principal leaders of the 1990 democratic revolution in Mongolia remains unsolved to this
day. Among those who reported to the President were Mr. R.Bold, head of the Central Intelligence
Agency (CIA), and Col. G.Altansukh, the CIA's Deputy Head and chief of the CIA-General Police
Department joint group. The meeting was closed to the media.
Source: Montsame
HONEYMOONERS FILL MIAT CHARTERED FLIGHT TO JEJU IN SOUTH KOREA
The national carrier MIAT has made two direct flights to Jeju Island, a big tourist center in South
Korea. The Airbus with 210 seats was full on both days as ticket price for the chartered flight was
kept low. An economy class seat was USD452, while a business class seat cost USD902.
Most of the passengers on the second flight, on October 8, were young couples going for their
honeymoon after tying the knot on Tuesday, the most auspicious wedding day in the year. A third
flight would depend on the demand.
MIAT plans such special flights to Hongkong and to Hainan in the near future.
Source: Montsame
INDIA TO HELP MONGOLIA EXPLOIT SEABUCKTHORN POTENTIAL
India and Mongolia have joined hands to tap the potential of seabuckthorn, a berry that has high
concentrations of vitamins A, B2 and C and is found in abundance in both countries. After a three-
day visit to Ladakh to see the initiatives taken by the Defense Institute of High Altitude Region
(DIHAR) to make the plant economically useful for the local population, Mongolian Ambassador to
India Voroshilov Enkhbold said, “We have seabuckthorn in Mongolia also, mostly in the western
province. After seeing here how valuable the berry is, I want to establish some relation with India
on how to tap the potential of the plant.”
Mr. Enkhbold will be taking to Mongolia samples of the juice, a herbal anti-oxidant supplement
prepared from the plant, as also herbal tea and some of the 200-odd products prepared by DIHAR
scientists. Two of them will go to Mongolia to help implement a program to make the plant a source
of income for the local population.
Apart from the nutritional value of the berries, the plant is useful in that it fixes atmospheric
nitrogen into the soil, making it more fertile, and checks soil erosion. Its leaves are believed to be
anti-cancerous, prevent tumor and improve immunity.
Source: www.thaindian.com
ANNOUNCEMENTS
BCM MINING SUPPLY CHAIN DATABASE LISTS 1,153 COMPANIES
Altogether 1,153 companies are listed in the Mining Supply Chain database just developed by the
Business Council of Mongolia (BCM). They are all national companies, either manufacturers or
service providers to the mining sector. Ownership is 90% Mongolian, 5% joint ventures, and 5%
foreign. Registration in the database will allow these companies to expand their business, attract
further investment from international and domestic sources, as well as get wider exposure. It is also
the most convenient and comprehensive portfolio for international companies to find trusted
business partners in Mongolia.
Sant Maral Foundation was contracted to conduct the fieldwork which included nationwide notices,
on-the-ground interviews in 7 aimags, and telephone interviews to put together the database. The
interviews took place between March 18 and May 29 nationwide, especially in Ulaanbaatar and in
Darkhan-Uul, Orkhon, Dornod, Dornogovi, Selenge, Zavkhan, and Khovd provinces. The invitation to
participate in the survey and interviews was advertised in daily newspapers and in other ways.
The mining sector, a catalyst for the Mongolian economy, is poised to generate myriad demands in
the domestic market and will play a key role in reducing unemployment, and in raising the
16. competitiveness of SME to meet world standards. Check out the database at
www.bcmongolia.org/mining supply.
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“DISCOVER MONGOLIA” ON NOVEMBER 5-7
“Discover Mongolia 2009” will be held in Ulaanbaatar on November 5-7. This international investors’
forum has established itself as an ideal podium for mining and exploration companies, equipment
producers and suppliers, investment and banking institutions, geology and mining academia,
professional media organizations, and portfolio agencies and departments.
This year’s session is designed to facilitate the most fruitful business exchanges among its
participants through a Mining Conference featuring the most prominent minerals projects, an
Investors’ Exchange Exhibition that will bring together brand names in geological exploration,
mining and support services, the Government Hour where Government officials will respond to
various questions and concerns of investors, a Geological Session, and a visit to an operating mine
or an attractive deposit.
BCM is an official partner of the event.
_______________________________________
“MM TODAY” ON MNB-TV
BCM is pleased to announce that Mongolian National Broadcasting continues its cooperation with
BCM on “MM Today”. This English news program is aired every Friday for 10 minutes and is
scheduled for 9:15 PM tonight. Tune in to watch this program that reports stories from today’s BCM
NewsWire.
_____________________________________________________________________________________
SPONSORS
17. ECONOMIC INDICATORS
MSE WEEKLY REVIEW
For the week ended October 2, 2009, trading activity on the Mongolian Stock Exchange (MSE)
totaled 1,402,900 shares with 43 companies traded. Total market value of transactions was MNT
426.6 million. Total market capitalization of the 358 stock companies listed on the MSE was MNT
723.8 billion, and increased by MNT 31.9 billion or 4.7 % from the previous week.
The Top-20 Index increased by 343.16 points or 4.5% compared to the previous week, closing at
7,937.13 points. The MSE Composite Index increased by 124.99 points or 3.6% compared to the
previous week, closing at 3,629.19 points.
Most active stocks traded were: Khuh gan (589,100 shares), Hermes (511,000 shares), APU (85,000
shares), Genco tur buro (66,700 shares), and UID (64,900 shares).
Major share price percentage gainers were: Shivee ovoo (52%), Talkh chicker (43.6%), NIC (20.4%),
Tavan tolgoi (18.3%), and Sor (15%). Major share price percentage losers were: Remicon (25%),
Genco tur buro (15.4%), Erdenet khuns (9.7%), Khuh gan (9.1%), and Moningbar (8.8%).
INFLATION
Year 2006 6.0% [source: National Statistical Office of Mongolia (NSOM)]
Year 2007 *15.1% [source: NSOM]
Year 2008 *22.1% [source: NSOM]
August 31, 2009 *0.6% [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]
CURRENCY RATES – October 8, 2009
Currency name Currency Rate
US dollars USD 1451.37
Euro EUR 2136.78
Japanese yen JPY 16.46
British pound GBP 2310.22
Hong Kong dollar HKD 187.27
Chinese yuan CNY 212.61
Russian ruble RUB 48.73
South Korean won KRW 1.24
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.