1. BUSINESS COUNCIL of MONGOLIA
NewsWire
www.bcmmongolia.org
info@bcmongolia.org
Issue 108, March 5 2010
NEWS HIGHLIGHTS:
Business:
OT material and service requirements to be announced on March 12;
NEA threatens cancellation of license, Khan Resources sticks to its guns;
Khan Resources charges ARMZ with “opaque political maneuvering”;
ARMZ withdraws bid for Khan Resources, CNNC offer launched;
Mardai licenses to be regularized;
Tavan Tolgoi investors asked to meeting;
Partnership essential to face challenges, stresses OT executive;
Rio Tinto beefs up position in Ivanhoe Mines;
Government to name members of OT board soon;
Altandornod reported to have won case at tribunal;
Sprit Bal Buram introduces platinum-and-silver dual filters;
Trendfield buys licenses in South Gobi.
Economy:
Japan Bank approaches Mongolia for Samurai bond sales;
Bond sale planned for last quarter of 2010;
Sovereign debt losing advantage;
Proposals received to build oil refinery;
Compensation for canceled mining licenses still an issue;
ADB project to study economics of climate change in Mongolia;
New World Bank country director named;
Mongolia short of cashmere as prices rise globally:
MINETECH-2010, trade show of mining equipment and services, in April;
UNDP plans radio programs on pasture management;
Seminar discusses health insurance;
MCA-M holds workshop on capacity building in TVET;
China data drives copper prices higher;
China stocks at 5-week high, upside seen limited;
China faces labor shortage as stimulus creates jobs locally.
Politics:
South Korea announces grant of USD13 million;
No charge to be brought against any suspect in July 1 deaths;
MNT18.8 trillion needed to make Ulaanbaatar smoke-free;
Media asked to leave MCA-M Board meeting;
MPRP conference will bring internal bickering into the open;
Coming inner-party elections to determine the image of DP;
New Union says it is pro-democracy, not anti-government;
The coalition experiment has failed, says Democratic Party MP;
Official defends spending MNT 5.5 billion on removing animal carcasses;
100 frozen wolves seized at border;
2. U.S.-Mongolia Annual Bilateral Consultations held in Washington;
British MPs recall UK-Mongolia ties during debate;
Mongolia ready to help six-party talks resume;
Vegetarianism sprouts in Mongolia;
Mongolian acrobat in USA plans trip home against domestic violence;
Zambia, China sign mining cooperation deal;
Understanding Beijing's "Go Global" strategy.
*Click on titles above to link to articles.
BUSINESS
OT MATERIAL AND SERVICE REQUIREMENTS TO BE ANNOUNCED ON MARCH 12
Oyu Tolgoi LLC will be meeting with Mongolian suppliers and service providers, especially those
already operating in Umnugobi aimag, on March 12 to provide information on its requirements for
the Oyu Tolgoi project. The investment agreement stipulates that a fair amount of the equipment,
raw material, and supply material for the project will be Mongolian, provided trade terms are
acceptable, the quality competitive, and the supply schedule reliable.
The event will be attended by representatives from the Government Secretariat, the Ministry of
Mineral Resources and Energy, the Ministry of Finance, and the National Development and
Innovations Committee.
Source: Undesnii Shuudan
NEA THREATENS CANCELLATION OF LICENSE, KHAN RESOURCES STICKS TO ITS GUNS
The Nuclear Energy Agency has reminded Khan Resources of provisions of the Nuclear Energy Law of
Mongolia pertaining to sale of shares and asked it to ―note‖ that failure on the part of the license
holder to fulfill its legal obligations ―shall invalidate the license". A statement delivered to the
company says the Agency has ―learned from the Internet that CNNC Inc offered to buy shares of
Khan Resources registered at the Toronto stock Exchange‖. Article 7.1 of the Nuclear Energy Law
stipulates that any sale, collateralization or transfer to others of more than 5 percent of shares of a
company ―can be valid‖ only when the transaction is confirmed by the Agency. A similar permission
is required before a company can be re-structured ―by merging, integrating, splitting and
separating‖.
Article 7.2 of the law further stipulates that the Agency must receive a copy of the authorized
decision of the company to enter into any such deal involving more than 5 percent of shares in a
company, along with other documents, within 14 days of the decision being taken. The Agency
could then ask for more information if it finds this necessary.
―If a license holder does not fulfill its obligations specified in article 7.4 of the Nuclear Energy Law
the state administrative authority in charge of nuclear energy issues shall invalidate the license,"
the Agency statement concludes.
The company has not so far indicated that it has received any direct communications from the
Agency. However, it said on Monday it had noted that a statement has been posted on the website
of the Agency to the effect that the CNNC offer requires the approval of the NEA in accordance
with the law, and that the licenses held by Khan's subsidiaries in Mongolia may be revoked if such
approval is not sought and obtained. ―Although these statements are not official government
actions and have no legal effect, Khan's indirect wholly-owned subsidiary Khan Resources LLC and
its indirect 58% subsidiary Central Asian Uranium Company, LLC are writing to the NEA to register
their objection to the statements. Khan has obtained legal opinions that Articles 7.1 and 7.2 apply
only to transfers of shares of the direct holders of Mongolian mining and exploration licenses in
Mongolia. They do not apply to an acquisition of shares of Khan Resources Inc., a Canadian
company,‖ a company statement on March 1 said.
Source: Montsame, www.khanresources.com
KHAN RESOURCES CHARGES ARMZ WITH “OPAQUE POLITICAL MANEUVERING”
Acknowledging the intention of Atomredmetzoloto JSC (ARMZ), a Russian state-owned nuclear
energy corporation, to withdraw its unsolicited offer to purchase all outstanding common shares of
Khan Resources, the company has said ―it is unclear‖ if the reasons cited by ARMZ for the
abandonment are based on fact. ARMZ said its decision was influenced by the recent announcement
3. by the working group established by the Standing Committee on Security and Foreign Policy that a
number of uranium exploration and mining licenses in the Dornod province should be invalidated
because of alleged and unspecified violations of Mongolian law. It is unclear if the licenses held by
Khan's Mongolian subsidiaries are implicated in these allegations as Khan has received no
notifications from the Government of Mongolia on this matter.
Khan believes that it and its Mongolian subsidiaries have always operated and continue to operate
in strict compliance with all applicable Mongolian laws, including the Mineral Law and the Law on
Mineral Energy, as well as the more recent Nuclear Energy Law. Khan says it has learnt that ARMZ
has alleged in the Russian media that Khan's licenses have been annulled and further, that it plans
to proceed with a joint venture with Mongolia, called the Dornod Uranium joint venture, which
agreement was signed in August 2009 and excludes any mention of Khan‘s legitimate property rights
to the Dornod property.
―Although unsolicited, we were hopeful that ARMZ‘s offer for Khan demonstrated their recognition
of the validity of transparent Western rules designed to protect shareholders and their investment
in public companies,‖ said Mr. Martin Quick, CEO of Khan. ―Instead, it is clear that ARMZ plans to
continue to advance its interests in the Dornod property through opaque political maneuvering and
unsubstantiated allegations without recognizing Khan‘s or its shareholders‘ rights.‖
Source: www.khanresources.com
ARMZ WITHDRAWS BID FOR KHAN RESOURCES, CNNC OFFER LAUNCHED
Khan Resources of Canada announced on February 26 that CNNC Overseas Uranium Holding (CNNC)
has launched its offer to buy the uranium junior, offering CAD0.96 a share. Khan has recommended
that shareholders accept the offer. Khan's flagship asset is a stake in the Dornod uranium project.
The company has been defending itself against a hostile takeover bid by Russia's Atomredmetzoloto,
but the Russian company announced on Friday it would allow its CAD0.65 a share offer to expire on
March 1. ARMZ said the decision not to increase or extend its offer was a response to uncertainty
over licensing and ownership of the uranium property. "ARMZ has determined that continuing our
offer at the current time is not prudent," director-general Vadim Zhivov has said in a statement.
The CNNC offer for Khan requires approval by at least two-thirds of Khan's shareholders, and will be
open for acceptance until April 6, unless withdrawn or extended.
CNNC Overseas Uranium Holding Ltd. (a wholly-owned branch of China Uranium Corporation Ltd.) is
incorporated in Hong Kong and is an indirect wholly-owned private subsidiary of China National
Nuclear Corporation, China's leading uranium development and nuclear fuel company.
Source: www.khanresources.com
MARDAI LICENSES TO BE REGULARIZED
According to a briefing by the Director of the Government Office, Mr.Ch.Khurelbaatar, the
Government meeting last week heard the report of the Director of the Nuclear Energy Authority on
several issues in the uranium sector, including how licenses are issued and how foreign license
holders have been selling their shares. It was decided that all the licenses in Mardai, which had
been issued apparently in violation of the law but have been re-registered after December 15, will
now be regularized. A working group will be asked to suggest ways how this can be done in
conformity with laws now in vogue. Among the companies that hold the licenses are Emeelt Mines,
Western Prospector, and Adamas Mining.
The Government also decided to advertise the nuclear law and its provisions so that companies in
Mongolia and abroad clearly know what they can or cannot do. For example, no company can sell or
transfer more than five percent of its shares without permission from the Nuclear Energy Authority.
Unconfirmed reports say the Prime Minister did not hide his annoyance over the role of the head of
the Nuclear Energy Agency in the whole matter and had favored revocation of all licenses granted
against the law. Others who did not wish to go so far prevailed on him but some administrative
measure against Mr. S. Enkhbat, the Agency head, is a distinct possibility.
Source: Onoodor, Zuunii Medee
TAVAN TOLGOI INVESTORS ASKED TO MEETING
Despite assurances from Minister for Minerals and Energy D.Zorigt that there will be no dearth of
takers for the contract mining offer favored by Prime Minister S.Batbold to allow Mongolia to retain
100% ownership of Tavan Tolgoi, there has so far been no indication of how investors see the
proposal. With Erdenes MGL inviting the 11 shortlisted investors to a discussion this week, this may
now be known.
The final decision is scheduled to be discussed at the Spring session of Parliament, to begin in April.
4. It is believed the Government will ask the investors to bear all the costs of developing the massive
coal deposit without owning any equity in the project.
Source: Ardiin Erkh
PARTNERSHIP ESSENTIAL TO FACE CHALLENGES, STRESSES OT EXECUTIVE
―There are going to be a lot of challenges, a lot of risks. We will not be able to manage the risks
and seize the opportunities unless we do it in partnership with qualified experts,‖ says Mr. Layton
Croft, Executive Vice President for Corporate Affairs and Social Responsibility at Oyu Tolgoi LLC.
The scale and the nature of OT's operations are certain to have a variety of direct and indirect
socio-economic and cultural impacts on communities and stakeholders, both positive and negative.
The company has already floated tenders for consultancy in designing a long-term Cultural Heritage
Program, and for a Health Safety and Security Program. More than 30 groups, from Mongolia and
nine other countries, are believed to have submitted bids. Some of them are well-known and
experienced, while for others it will be a new challenge.
A base line study of Umnugobi province was prepared in 2008 by Ivanhoe Mines together with the
province authorities and assisted by the NGO Responsible Mining. A similar study was made in 2009,
with the focus narrowed to the project‘s direct impact area – Khanbogd district - and to the
indirect impact districts of Manalai, Bayan-Ovoo, and Dalanzadgad. These two are the bases for all
activities planned in the coming five years.
As stated in the investment agreement, OT together with government agencies is engaged in long
term infrastructure planning, development, and management on both national and regional levels.
The team is focused on urban planning, infrastructure planning, public services, public service
delivery issues, and influx management.
Read more…
The evaluation committee for proposals in the culture program includes a mixture of several
stakeholders. OT published the list of questions the evaluators will have to answer, the proportional
weight of each aspect in the proposal, and the evaluation process itself. OT is interested in quality.
Therefore the weight of the proposed cost is only 20 percent; 40 percent is allotted for the quality
of the proposed method, and 40 percent for the quality of the team.
Besides, the project is collaborating with the School of Economic Studies at the National University
of Mongolia, with technical advice from the Rio Tinto Economics Department in London, in the
preparation of the macro-economic assessment of what Rio Tinto calls the Multi-Year Community
Plan. This will analyze the impact of the project on the economy on the local, regional and national
levels. Its report will be published and should become an essential tool for economic planning in
Mongolia.
Mining entails complex environmental challenges. The initial work regarding environmental issues
will be the Environmental Information Disclosure. Long-term design of monitoring and preventive
programs will follow.
OT's Procurement and Commercial departments are engaged in long term local business and
economic development initiatives. Their aim is to promote local entrepreneurship, and sustainable
economic growth that is not dependent solely on mining, so that when the mining is terminated,
the towns that were economically dependent on employment at the mines do not collapse
economically.
Source: Mongolia-web.com
RIO TINTO BEEFS UP POSITION IN IVANHOE MINES
Rio Tinto will increase its stake in Ivanhoe Mines by 2.7 percent to 22.4 percent for USD233 million,
in a move tied to plans to jointly develop the giant Oyu Tolgoi copper-gold mine. The move beefs
up Rio Tinto's position in Ivanhoe just after the Canadian group announced plans for possible
corporate action to lift shareholder value.
Ivanhoe hired investment bankers from Citigroup and mining sector specialist Hatch Corporate
Finance last month to look at a range of options, including offering new shares or bonds and
"various corporate transactions‖. Rio, which has long coveted Oyu Tolgoi, said on Monday it will buy
15 million Ivanhoe shares at C$16.31 per share, a 3 percent discount to Ivanhoe's close on February
26.
The share issue fulfills an arrangement Rio had with Ivanhoe in 2008 to finance equipment for the
Oyu Tolgoi complex. "Our further investment in Ivanhoe Mines underlines our confidence in the
quality of the world class deposit and its priority in our project portfolio," Rio Tinto's copper chief
executive Andrew Harding said in a statement.
The two companies are working to complete their investment agreement with the Mongolian
5. Government ahead of moving into developing the project. Under its partnership agreement with
Ivanhoe, Rio can lift its stake to the "high 40s percentage" of Ivanhoe's shares over the next two
years, based on factors that are all in Rio Tinto's control, a Rio Tinto spokesman said.
Source: Reuters.com
GOVERNMENT TO NAME MEMBERS OF OT BOARD SOON
Minerals and Energy Minister D.Zorigt has said the Government will soon decide on the names of
those representing the Mongolian side to sit on the Executive Board of Oyu Tolgoi LLC. He also said
that the Government will announce its final decision on Tavan Tolgoi negotiation in April after
further talks with the 10 bidders for the deposit.
Source: www.business-mongolia.com
ALTANDORNOD REPORTED TO HAVE WON CASE AT TRIBUNAL
Sources close to Mr. S. Paushok report that his Altandornod Company has won its case against the
Mongolian Government in an international arbitration tribunal. The Russian-owned company had
sought exemption from paying the 68% windfall tax on grounds of previous agreements which
continued to be in force. The sources say the tribunal upheld the Altandornod claim that its
investment in Mongolia was protected by a bilateral agreement between Mongolia and the Russian
Federation, and it was discriminatory to impose any fresh tax on it.
Mr. T. Altangerel, Head of Policy Implementation and Coordination at the Ministry of Justice and
Internal Affairs, has been in charge of the case. He has denied that the tribunal has given its
opinion. ―Any news is supposed to come to me directly, and nothing has,‖ he has said.
Mr. Paushok had earlier said that in the event of his success at the tribunal, he would ask for
USD500 million in compensation for three years‘ lost business. The Government spent MNT6 billion
on presenting its case before tribunal which heard the case in May.
Source: Udriin Sonin
SPRIT BAL BURAM INTRODUCES PLATINUM-AND-SILVER DUAL FILTERS
Sprit Bal Buram has introduced dual filters with platinum and silver in its alcohol production. This
use of most recent technology will help filter fluid with precision up to 0.01 mkm. The new filters
have a capacity of 3000-4000 liters per hour.
Source: Zuunii Medee
TRENDFIELD BUYS LICENSES IN SOUTH GOBI
Hong Kong-based THL Mongolia Ltd, a fully owned subsidiary of Trendfield Holdings Ltd, a pre-IPO
mining and consulting group, has purchased 70% of KMNG LLC holdings with the option to purchase
another 20% within 3 years. KMNG is located in Ulaanbaatar and owns 3 exploration licenses
covering 1,935.5 sq. km in the South Gobi. Trendfield feels these permits, their location and
proximity to Oyu Tolgoi makes this a win-win project for all parties involved. ―We see this as an
opportunity to expand our commodity base and begin to develop our projects and partnerships on
the ground in Asia. We believe that these licenses may offer interesting exploration prospects for
copper, gold, and rare earth elements,‖ Mr. Ying Yu Tang, President, THL Mongolia Ltd, has said in
a statement.
Trendfield Energy and Resources has offices in China, Mauritania, Niger, Mongolia and Hong Kong
and representation offices in Ecuador, Guinea and Korea.
Source: www.trendfieldonline.com
ECONOMY
JAPAN BANK APPROACHES MONGOLIA FOR SAMIRAI BOND SALES
Japan Bank for International Cooperation, the state-run lender that backed a USD1.1 billion
Samurai bond issue by the Philippines last month, has approached Vietnam and Mongolia to discuss
similar sales. ―The process will take time because we need to do due diligence on its credit
profile,‖ Mr. Hiroki Sekine, a senior JBIC official, has said.
Samurai bond sales plunged 43 percent last year after Lehman Brothers Holdings Inc. became the
first U.S. borrower to default on its yen notes in Japan.
Mongolia plans to sell as much as USD1.2 billion of bonds overseas this year in the nation‘s first
―benchmark‖ offering of dollar-denominated debt. Finance Minister S. Bayartsogt has said the
Government favors dollars for the sale, but ―Japanese banks are giving us very attractive
proposals‖. According to Mr. Sekine, discussions with Mongolia are ―still in a preliminary stage‖.
6. Source: Bloomberg.com
BOND SALE PLANNED FOR LAST QUARTER OF 2010
Mongolia‘s planned global bond sale to raise up to USD1.2 billion is likely to take place in the fourth
quarter this year, according to an unidentified Finance Ministry official.
The money will be used to fund major development projects in areas such as mining and
infrastructure.
Source: Reuters.com
SOVEREIGN DEBT LOSING ADVANTAGE
Mr. Bill Gross, manager of the world's largest mutual fund, the USD200 billion Pimco Total Return
Fund, says the debt of some nations may in the future be no better than private debt issued by
corporations. Sovereign debt has typically offered lower yields than corporate credit because of the
presumed ability of governments to self-finance. Mr. Gross thinks the worst-hit countries of the
financial crisis might see that advantage erode.
National debts have spiraled as governments try to dig out of the global recession, spurring concern
that the quality of those credits will be impaired. ―Government bailouts and guarantees such as
those evidenced and envisioned in Dubai and Greece, as well as those for the last 18 months with
banks and large industrial corporations across the globe, suggest a more homogeneous 'unicredit'
type of bond market,‖ Mr. Gross wrote in his latest Investment Outlook, published Monday.
―If core sovereigns such as the U.S., Germany, U.K. and Japan 'absorb' more and more credit risk,
then the credit spreads and yields of these sovereigns should look more and more like the markets
that they guarantee,‖ he wrote. ―Sovereign yields will narrow in spreads compared to other high-
quality alternatives. In other words, sovereign yields will become more credit-like.‖
This would make it more expensive for countries to finance themselves because it would raise the
cost of servicing their debts, which could hurt their economies. And, at a time when many countries
are still battling recession and high unemployment, this ―places a potential ‗cap‘ on the ‗debt‘ that
supposedly can be created to get out of the ‗debt crisis‘,‖ Mr. Gross wrote.
Read more…
It also suggests potential pitfalls for investors: No longer could they assume sovereign debt is
airtight. ―Investors should obviously focus on those sovereigns where fundamentals promise lower
credit or inflationary risk,‖ wrote Mr. Gross. This worry over some sovereign-debt issuers is part of
his broader view of what he calls the ‗New Normal‘, in which aggregate demand and output will be
at lower levels than in recent years, and unemployment will be higher.
―A deficiency of global aggregate demand and the potential impotency of policy makers to close the
gap are evolving into a life or death outcome for the weakest sovereigns,‖ he wrote.
Source: The Wall Street Journal Asia
PROPOSALS RECEIVED TO BUILD OIL REFINERY
The Mineral Wealth Council of Mongolia has approved the estimated reserve of 199.2 million tons of
oil in the Toson Uul – XIX oil field in Tamsag basin of Dornod aimag. According to Mr.
D.Amarsaikhan, Head of the Oil Authority of Mongolia, this takes the proven reserve of oil in
Mongolia to 1.6 billion tons, making it the 33rd largest country in the world in terms of oil deposits.
More than 10 proposals have already been received to build an oil refinery in Dornod province with
production capacity of 150,000-200,000 tons. Total investment in the oil sector has crossed USD1.1
billion.
Source: www.business-mongolia.com
COMPENSATION FOR CANCELED MINING LICENSES STILL AN ISSUE
Mr. M.Ariunbayar, Director of Geology in the Mining Department, has said the total number of
special mining licenses in the country has reached 4,704, of which 1,091 are for extraction and
3,613 for exploration. The licenses are held by 1,910 companies, 77.8 percent of them domestic,
14.5 percent fully foreign, and 7.7 percent joint companies. Asked by media about the ability of
Mongolia to raise money from international markets for the mining sector, as the Government
wants, he said it should not be difficult to raise such money for mines with clear estimates of their
reserve. ―Our chances are bright, but we need to make proper preparations. A training course on
how to raise money in stock exchanges was held recently. Our mining professionals are fully
capable of acquiring this new skill,‖ he said.
Asked why the law prohibiting mining operations near water sources and rivers, passed several
months ago, is yet to be implemented, and if any Ministry is actually against the implementation,
7. Mr. Ariunbayar said the work on marking the borders of the prohibited areas is over. ―If there has
been a request to postpone the implementation it must have come from the Ministry of Nature and
Environment. The Ministry for Minerals and Energy did not certainly make any such request. We
support the law,‖ he said.
He clarified that the issue of paying compensation for cancellation of licenses is still being
discussed. This may be as much as MNT300 billion but is applicable only to exploration licenses. The
law says a special license will be treated as canceled only after the compensation is fully paid. It
may take 2-3 years to settle the accounts of over 900 companies and they will keep adding to their
reimbursable costs in this period. His view was that ―imposing such restrictions usually does not
work out well‖. In any case, Mongolia already has ―enough laws enforcing protection of nature‖.
The problem is that these are not enforced. ―The present law will be better after some
amendments bring it in tandem with the other existing laws,‖ the official hoped.
Source: en.News.mn
ADB PROJECT TO STUDY ECONOMICS OF CLIMATE CHANGE IN MONGOLIA
An Asian Development Bank (ADB) comprehensive study on the economics of climate change in four
Northeast Asian countries - China, Japan, South Korea and Mongolia - will help regional and
country-level decision makers address the issue of climate change and to develop low-carbon
growth strategies in their countries and the region. The study is being financed by a USD1 million
technical assistance grant from the ADB, and a USD800,000 grant from South Korea.
It will complement parallel climate change studies being carried out by the ADB in South Asia and
Pacific developing member countries, as well as draw on findings from ongoing and planned climate
change initiatives in participating countries. It is set to run for 24 months, ending in November
2011.
The study will cover four distinct phases. First, it will map out and assess current climate policy and
adaptation measures in the four countries and at the regional level. Second, it will involve the
preparation of marginal abatement cost curves to analyze the greenhouse gas mitigation potential
of technology options. Third, a climate policy simulation tool will be developed to generate
economic indicators to conduct quantitative and qualitative assessments and eventually show the
economic consequences of different packages of climate policies. Last, a final report will be
prepared covering all the findings.
Source: www.adb.org
NEW WORLD BANK COUNTRY DIRECTOR NAMED
Mr. Klaus Rohland has been named the next World Bank Country Director of Mongolia, China and the
Republic of Korea. He will be based in Beijing. This is his fourth term as Country Director with the
Bank. He has served in the same capacity in Russia, and before that in Vietnam. A German national,
Mr. Rohland has been with the Bank since 1981. He knows the region well, having managed the
World Bank Program in China in the mid-1990s.
Source: Montsame
MONGOLIA SHORT OF CASHMERE AS PRICES RISE GLOBALLY
National cashmere manufacturers have been taken by surprise by prices of the wool doubling to
MNT 40,000 per kilo in only a short while and find that they do not have enough stock. What should
have been a great opportunity to Mongolia, has actually meant that companies here are importing
from China cashmere that was originally produced in Mongolia. They are also making deals in
Afghanistan. According to Mr. G.Yondonsambuu, Director of the Mongolian Wool and Cashmere
Union, Parliament‘s decision to annul the MNT 4,000 export tax on cashmere is largely to blame for
the situation as this facilitated 60-65 percent of the total being taken to China.
Mongolia has 12 factories that process cashmere and then manufacture garments. Some 50 others
are engaged in some more basic stages of processing. Around 200 small factories import yarn from
China, South Korea and Taiwan and make garments and other products. Given that in the 1990s
Gobi was the only company in the sector, it may seem that the industry is blooming, but the rise in
numbers is misleading. Gobi used to export USD20-30 million worth of products a year and
contributed USD17-25 million to the state budget. This amount has not increased over the years.
With restricted access to capital, most of the big players use only 20-30 percent of their capacity.
Mongolians began cashmere production in 1976 after being trained by Japanese and with UN
assistance. Now the main problem is that Mongolian cashmere has become 1 micron thicker. This
makes products less durable. A Canadian who studied the industry concluded that global demand
for Mongolian cashmere is still strong, but its reputation is gradually falling. Mongolia needs to
8. create its own brand identity to succeed in the global market, he said.
Source: Ardiin Erkh
MINETECH-2010, TRADE SHOW OF MINING EQUIPMENT AND SERVICES, IN APRIL
The Mongolian National Mining Association will be holding MINETECH-2010, an exhibition of mining
machinery and equipment on April 2-3 at Misheel Expo Center. The exhibition is planned as an
annual trade and exchange event for mining machinery and equipment producers and service
providers, and buyers in the industry. Distributors and dealers are also expected to be present in
numbers.
Source: www.miningmongolia.mn
UNDP PLANS RADIO PROGRAMS ON PASTURE MANAGEMENT
The UNDP has launched a program called Livestock Husbandry Tomorrow together with the National
Radio. It is part of the bigger Sustainable Land Management for Combating Desertification Project,
aimed at educating the general public and herding communities on causes and effects, and methods
to combat desertification and land degradation that pose a serious threat to Mongolia's economy
and undermining livelihoods, especially those of herders, and promoting sustainable pasture/land
management practices. The radio program is to be aired every Wednesday at 7.30 p.m., the peak
time for radio listeners in rural Mongolia, according to the Mongolian Radio survey. It will
concentrate on community-based natural resources management as a main strategy to cope with
effects of climate change, and will be broadcast for 3 years.
―We strive to increase awareness, which leads to a knowledge base, change in attitudes,
development of skills, and finally to a solid practice. In combating desertification and land
degradation, the public awareness is the first crucial step to change people‘s attitudes and practice
of pasture and land use,‖ the UNDP Mongolia Country Office has said.
Source: UNDP
SEMINAR DISCUSSES HEALTH INSURANCE
A national seminar was held this week to formulate guidelines for a health insurance policy on local
and national levels and also to ensure methods of its easy implementation. The seminar was
organized by the Standing Committee on Social Policy, Education, Culture and Science and was
attended by representatives from all 21 provinces. The proceedings are planned to be published as
recommendations.
Source: Montsame
MCA-M HOLDS WORKSHOP ON CAPACITY BUILDING IN TVET
The Millennium Challenge Account-Mongolia (MCA-M) Technical and Vocational Education and
Training Project (TVET) organized a workshop on capacity building of specialists last week, as part
of its sub-project on Policy and Operational Framework Reform (POFR). The workshop discussed on-
going reforms in the Vocational Education and Training (VET) sector, and ways of strengthening
Public Private Partnerships (PPP) at regional and local levels.
In the past year, the project has trained 19 national specialists in institutional capacity building.
They reported their achievements at the workshop, and also presented their future work plans.
Participants stressed the need to involve those already trained as well as other competent
specialists in future activities of the project and the sub-projects to ensure the sustainability of the
POFR project outputs.
Source: Montsame
CHINA DATA DRIVES COPPER PRICES HIGHER
China, not Chile, remains in the driving seat for copper as the market shifts focus from earthquake-
related production problems to still-strong growth in the Asian giant. Although the world's largest
copper producer continues to reel from a quake that caused outages at mines and severe damage to
infrastructure, brokers and investors say the related price reaction was going to be short-lived.
Copper leapt 5.6% from Friday's close when London Metal Exchange trade started in Asia on Monday,
to peak at a six-week high of USD7,600 a metric ton, but the market pared gains to about
USD7,400/ton as the impact on Chile's metal production was deemed only temporary. Attention
then turned to data released by the China Federation of Logistics and Purchasing —helping push
prices higher, to USD7,440/ton. China's government-backed Purchasing Manufacturers Index fell to
52.0 in February from 55.8 in January, revealing a slower, but still very strong, pace of growth in
the country. While disappointing, this easing on the pedal of China's growth engine was to be
9. expected, economists say, given the Lunar New Year holiday.
Copper bulls have naturally seized on the still-strong growth data as a reason to keep their faith in
the industrial metal. They cite tight supplies, noting still-reduced capacity utilization rates at
plants following the global economic downturn, strikes and production shortfalls at various
operations. Even the short-term disruptions in Chile will only add to existing supply problems and
increase support for prices.
Source: The Wall Street Journal Asia
CHINA “HAS TO KEEP BUYING GOLD”, SAYS OFFICIAL
China has to keep buying gold over a long period and any price fall will present a good buying
opportunity, Mr. Xia Bin, head of the financial institute of the Development Research Centre, a
think-tank under the Cabinet, has said. "The long-term strategy should be very clear, that is, China
has to keep buying gold; but the detailed timing should be decided by the price curve."
China had to increase its gold reserves to underpin the yuan's international role, he said, but did
not give details on when China should buy. "It is not my job to judge whether the price is low or
high," he said. "Price is a relative thing - the price is high now compared with before, but for the
future, who knows? It may rise to USD2,000, who knows?"
He had no idea if China would buy the 191 tons of gold being offered for sale by the International
Monetary Fund, but said China should be open to both buying in the international market and
investing in overseas gold mines.
Source: Reuters.com
CHINA STOCKS AT 5-WEEK HIGH, UPSIDE SEEN LIMITED
China's key stock index rose 1.18 percent on Monday to its highest close in five weeks, led by
copper miners, as a sharper-than-expected slowdown in a business survey boosted expectations this
month's Chinese parliamentary session would reaffirm a relatively loose monetary policy.
Copper mining stocks jumped as copper prices rose on supply worries after an 8.8-magnitude
earthquake in top producer Chile.
The index stood above the 125-day moving average for the first time since late January, indicating
market sentiment had improved, but analysts warned against excessive optimism about the near-
term trend as the supply of liquidity in the market had decreased after official quantitative
tightening over the past two months.
"Supervision of bank lending has been greatly enhanced, effectively cutting off funds that flowed
improperly into the market via grey-area channels," said one.
Source: Reuters.com
CHINA FACES LABOR SHORTAGE AS STIMULUS CREATES JOBS LOCALLY
Just a year after laying off millions of factory workers, China is facing an increasingly acute labor
shortage. Unskilled factory workers in China‘s industrial heartland are being offered signing
bonuses, with factory wages having risen as much as 20 percent in recent months.
Telemarketers are turning away potential customers because recruiters have fully booked them to
cold-call people and offer them jobs. Some manufacturers, already weeks behind schedule because
they can‘t find enough workers, are closing down production lines and considering raising prices.
Such increases would most likely drive up the prices American and other global consumers pay for
all sorts of Chinese-made goods. Rising wages could also lead to greater inflation in China. In the
past, inflation has sown social unrest.
The immediate cause of the shortage is that millions of migrant workers who traveled home for the
long lunar New Year earlier this month are not returning to the coast. Thanks to a half-trillion-
dollar government stimulus program, jobs are being created in the interior. But many economists
say the recent global downturn also obscured a longer-term trend: China has drained its once vast
reserves of unemployed workers in rural areas and is running out of fresh laborers for its factories.
Since China does not release reliable, timely statistics on employment, wages are considered the
best barometer of labor shortages. And temp agencies in Guangzhou last week raised their rate for
factory workers to USD1.17 an hour, from 95 cents an hour before the New Year holiday. The rate
was 80 cents an hour two years ago, before the global financial crisis temporarily depressed wages
and demand.
At many factories, white-collar managers and engineers were forced to spend time on assembly
lines to meet deadlines before the lunar New Year, because laborers were in such short supply.
Read more…
Higher wages could ease labor shortages by prompting factories to reduce their work forces. But
10. many factories already pay well above the minimum wage. They are wary of further pay increases
because it is not certain they can pass the increased costs on to their customers.
Rising wages suggest the re-emergence of a worker shortage that was becoming evident before the
financial crisis. A government survey three years ago of 2,749 villages in 17 provinces found that in
74 percent of them, there was no one left behind who was fit to go work in city factories — the
labor pool was dry. Mass layoffs in late 2008 and early 2009 because of the global financial crisis
temporarily masked the developing shortage of industrial workers. But two powerful trends were
still working to reduce the supply of young people headed for factories.
For one, the Chinese government has rapidly expanded postsecondary education. Universities and
other institutions of higher learning enrolled 6.4 million new students last year, compared to 5.7
million in 2007 and just 2.2 million in 2000. At the same time, China‘s birth rate has been sliding
steadily ever since the introduction of the ―one child‖ policy in 1977. Labor shortages have
returned quickly in recent weeks as these long-term trends have collided with a recovery in
overseas demand for Chinese goods.
Far more jobs are available these days in China‘s interior. Government projects like rail and
highway construction have absorbed millions of workers, particularly after Beijing allocated nearly
USD600 billion to economic stimulus spending in 2009 and 2010.
Source: The New York Times
POLITICS
SOUTH KOREA ANNOUNCES GRANT WORTH USD13 MILLION
South Korean Prime Minister Chung Un-chan has told visiting Parliament Speaker D.Demberel that
his Government will extend USD13 million in non-refundable aid to Mongolia.
Source: Undesnii Shuudan
NO CHARGE TO BE BROUGHT AGAINST ANY SUSPECT IN JULY 1 DEATHS
The families of the five people killed on July 1, 2008 were formally told last week that no case will
be filed against any of the suspects. Investigations have finally cleared all officials of any charge.
The families are not happy. The father of one of the victims has said he will address foreign
organizations if Mongolian courts do not settle the issue.
Source: Onoodor
MNT18.8 TRILLION NEEDED TO MAKE ULAANBAATAR SMOKE-FREE
The working group entrusted with developing the Smokeless Ulaanbaatar program has said in its
report to the Government that MNT18.8 trillion will be required for the entire work. The program
will focus on developing low-pressure stoves to burn coal at home, on less polluting means of
transportation, building apartments, reducing internal migration and increasing greenery. If the
work is taken up, air pollution will be reduced by 30 percent by 2012 and by 50 percent in 2016.
Prime Minister S. Batbold, who assigned the group the task, said the problem has to be met
nationally, with help from foreign countries with the necessary experience and technology. The
draft program will be submitted to Parliament in April for consideration.
The group says the priority is to construct apartments in the ger districts, and MNT8 trillion is
needed to build 100,000 of them. It also proposes to spent MNT6 trillion to construct new roads to
connect provinces with one another and thus divert migration to Ulaanbaatar. MNT 33 billion is
needed to change over to gas as public transportation fuel.
Director of Eco-Asia Institute Ts.Adiyasuren criticized the approach of the group. Pollution
producers must be penalized and everything cannot be left to the State. He also opposed so much
new construction in Ulaanbaatar, instead of moving out of the city.
Source: Ardiin Erkh
MEDIA ASKED TO LEAVE MCA-M BOARD MEETING
Media covering last week‘s meeting of the executive board of Millennium Challenge Account –
Mongolia were asked to leave the hall to allow Finance Minister S. Bayartsogt to clarify an issue
related to the non-inclusion of the financial component in tenders for the 2009 procurement plan.
Minister of Education, Culture, and Science Yo. Otgonbayar had faulted the practice, and Mr. S.
Bayarbaatar, Executive Director of the MCA-M, who had presented a performance report to the
Board for its approval, had defended it by saying ―such explicit mention was likely to cause
difficulties and complicate the selection process‖. Prime Minister S. Batbold, who is Chairman of
the Board, was present.
11. Later, the Press Office of the Government sent an email to all media organizations saying that the
report had been approved, adding that ―there was no need to publicize details of the proceedings
or give much more information‖. It is believed one more meeting will be held to discuss the matter.
Source: Udriin Sonin
MPRP CONFERENCE WILL BRING INTERNAL BICKERING INTO THE OPEN
After 89 years of presenting a united façade in public, the coming general conference of the MPRP
is likely to take the cover off the ugly fractures in the oldest political party in Mongolia. The
conference, initially scheduled for last autumn, is now to be held in April. The date was set after
the party Secretary General U.Khurelsukh, Minister for Food, Agriculture and Light Industry
T.Badamjunai, and Minister for Minerals and Energy D.Zorigt had met the ailing party chairman
S.Bayar in the USA last month. The agenda as decided among them does not include changing the
leader.
There is a strong demand for the coalition to be dismantled by 2011 and for the MPRP to form a
Government on its own with Mr. S.Batbold remaining Prime Minister. Those against it say continuing
with the coalition will help at the election. The DP can be blamed for all failures of the
Government. This does make political sense. With the DP in charge of Finance, Health, Road,
Transportation, Construction and City Development, and Nature, Environment and Tourism, it will
be easy to make it the fall guy if there is a problem with Oyu Tolgoi, for the swine flu scare, and for
environmental issues.
The inclusion of Mr. Zorigt in the small team to visit Mr. Bayar in the USA shows his growing
importance in the party. He himself keeps a low profile, saying he is new to politics and does not
have enough experience to become the MPRP leader. But his grooming has begun. Mr. Bayar wants
to use him as a role model to attract younger people to the party, to help break the stranglehold of
aging leaders.
Read more…
All eyes will be on the dispute between Mr. N.Enkhbayar and Mr. Bayar, even if played out by
proxy. The former President has several times attributed his defeat in the election last May to the
party under Mr. Bayar not providing enough assistance to him. He has not concealed his desire to
come back to mainstream politics, but Mr. Bayar does not have the slightest intention to make this
possible. He postponed the by-election in Chingeltei from before Naadam to mid-October to be able
to come up with a good plan to keep Mr. Enkhbayar away. His final choice of Zorigt as the party‘s
candidate was well received, and after Zorigt had won, Bayar resigned as Prime Minister, relieved
that there would be no Mr. Enkhbayar in Parliament to claim his chair. He will keep his position as
the party head as long as the threat of an Enkhbayar comeback is there. Mr. Bayar is expected to
return to Mongolia this month, and will have time to plan his strategy.
Source: Ardiin Erkh
COMING INNER-PARTY ELECTIONS TO DETERMINE THE IMAGE OF DP
This month‘s rotational election to the National Consultative Council of the Democratic Party will
indicate the specific nature of the alignment of forces inside the junior partner in the coalition
government. The party came into being when many disparate groupings and movements came
together and this is why the party has always had several broad factions fighting among themselves
for dominance. The periodic election of a section of members of the council indicates which way
the wind blows. The present one is especially important because the faction in power will be able
to choose more of its own as candidates at the next election to Parliament.
Every candidate to the present election has to deposit MNT1 million. Most of them find a sponsor,
and thus begins with a debt. Once in the NCC, they will make similar deals to gain the support of
members in the provinces. This will be the order of the day no matter which of the two factions
prevails -- the Altangadas, to which most of the party‘s Ministers belong, or the Mongolian
Democratic Union, whose members have been against joining the coalition. The former now has the
edge but MDU is determined to regain its lost power.
Where is the next generation of DP leadership? This seems to be more of a problem here than for
the MPRP. For long a few senior leaders have played musical chair to grab the top spot. The
factions they lead have not thrown up new faces.
Source: Ardiin Erkh
NEW UNION SAYS IT IS PRO-DEMOCRACY, NOT ANTI-GOVERNMENT
The first general meeting of the Union of Democratic Forces will be held on March 10. Some 800
representatives from all over the nation will discuss its theme -- ―Let‘s create a new Mongolia‖ --
12. and adopt a program to develop the country and to find the right leaders for the job. The leader of
the Union, MP Z.Enkhbold, told media that though he and the six vice presidents of the union are
all Democratic Party MPs, they do not see themselves as just a pressure group inside the party or
aim to disband the coalition government.
They would not allow their party affiliation to restrict their activity. All citizens ready to work for
strengthening democratic principles will be welcome, and, in return, the union will work for the
interests of all who believe in such principles. ―Nobody in Mongolia should be victimized for their
democratic views. Instead, they must be rewarded,‖ he said, adding that reforming the way all
political parties operated in the country must be a part of any wider national restructuring.
―Ours is not a party; it is akin to an NGO with a democratic vision open to all who wish to build a
new Mongolia. We find the present decision making process narrow and partisan but shall not seek
to overthrow the government until and unless it commits serious mistakes and strays from the
action plan adopted when the coalition was formed,‖ Mr. Enkhbold asserted.
Source: Undesnii Shuudan
THE COALITION EXPERIMENT HAS FAILED, SAYS DEMOCRATIC PARTY MP
Recalling that he was among the very few people who opposed the formation of a coalition
government, Democratic Party MP S.Erdene has said the past months have amply vindicated his
stand. Governance can be good only under the watchful eyes of an effective opposition, and the
coalition has, as feared, succeeded in diluting democratic principles. There has been no real
consensus on most issues, merely patchwork compromises. ―We could not amend the Constitution,
work on a new election law, adopt a rational policy on distributing the mining wealth, solely
because we could not agree on any of them,‖ he said.
The Oyu Tolgoi agreement, much heralded as made possible only by a coalition, ―is beginning to fall
apart‖, he has told media, adding, ―There is total lack of clarity on Tavan Tolgoi. Mongolians like to
copy from elsewhere, forgetting that conditions in other countries, rich or developing, are very
different from ours.‖
Source: en.News.mn
OFFICIAL DEFENDS SPENDING MNT5.5 BILLION ON REMOVING ANIMAL CARCASSES
Defending the decision to spend MNT5.5 billion on removing carcasses of livestock, Mr. D.Namsrai,
Deputy Director of the General Emergency Authority, has clarified that the amount is an estimate
made on the basis that the number of dead animals may well reach five million by May, and not on
the present number of 2.7 million. He admitted, however, that the MNT230 million the
Government has already provided to each of the 12 hardest hit provinces include MNT35 million to
be spent on removing carcasses and sterilization.
Source: Zuunii Medee
100 FROZEN WOLVES SEIZED AT BORDER
For the moment, the Zamiin-Uud border port has turned into an animal morgue. Around 100 frozen
wolves were seized on their way to China where they are the new upscale choice as Lunar New Year
gifts. Since the port has no special freezers, the carcasses have begun to defrost and smell but they
cannot be disposed of until the court gives a judgment.
The wolves had been stored in trucks in a specially concealed area for about a month and the
crossing was attempted one day just before the border was to close. There is some irony in that
exigencies of commerce have led to Mongolians killing and exporting wolves, an animal imbued with
spiritual significance here.
The gift of a wolf guarantees favor in China. The skin has high value and the meat sells for about
USD450. A tongue costs USD20 and the liver USD15.
Source: en.News.mn
U.S.-MONGOLIA ANNUAL BILATERAL CONSULTATIONS HELD IN WASHINGTON
The USA and Mongolia held their Annual Bilateral Consultations (ABC) last week in Washington. The
ABC, which rotates between the two capitals, covers the broad range of activity between the two
nations. Assistant Secretary for East Asian and Pacific Affairs Kurt M. Campbell and Mongolian
Ministry of Foreign Affairs State Secretary D. Tsogtbaatar chaired the two delegations at the 2010
ABC.
The topics of discussions included:
U.S. and Mongolian views on regional and global relations;
Expanding senior level exchanges in 2010;
13. Continuing defense and security cooperation between the armed forces of the two
countries;
Status of the ongoing humanitarian and livestock crisis caused by extreme winter conditions
in Mongolia;
Improving bilateral economic relationships, through channels such as the Transparency
Agreement, Extractive Industries Transparency Initiative, and Open Skies - civil aviation
agreement;
U.S. and Mongolian involvement in climate change issues; and
Continued cooperation in development, health, and cultural exchange.
Source: The U.S. Department of State
BRITISH MPs RECALL UK-MONGOLIA TIES DURING DEBATE
During a debate on Mongolia-UK relations in the British Parliament last week, Mr. John Grogan
(Labor) referred to the declaration made at the time Prime Minister Tony Blair met the Mongolian
President in April 2007, which said, ―Our long association has given the UK a special position in
Mongolia, with the Mongolians looking to Britain for advice in their transition to democracy and a
market economy.‖
Mongolia's current gross domestic product per head is only about USD2,500, but it is rising. The
involvement of Rio Tinto in the Oyu Tolgoi project ―means that there is very much a British
interest‖ in Mongolia. He said ―all political parties in Mongolia are determined to ensure that
ordinary Mongolian people get a benefit‖ from the ―8,000 deposits of 440 different minerals across
Mongolia‖ of which only 200 are currently being exploited.
Mr. Grogan is chairman of the all-party group on Mongolia, and a co-chair of the British-Mongolian
chamber of commerce. He expressed the hope that MIAT will introduce direct flights to Ulaanbaatar
―before too long‖, and recalled how Mongolia ―voted at the last minute for London to host the
Olympics, rejecting the blandishments of Paris, and we are eternally grateful for that‖. Many
institutions in Mongolia, he said, look to Britain for advice and examples. ―The old public service
television channel has remodeled itself on the BBC, and is independent of Government. The
Education Minister, who visited Britain only a few weeks ago, is very keen to introduce some of the
Cambridge education board's standards to Mongolia.‖
Read more…
Mr. Chris Bryant, Parliamentary Under-Secretary, Foreign and Commonwealth Office, offered all
British help to ensure that ―the 3 million people who live in Mongolia have not just the structures of
democracy, but the freedom of expression and association that go with them‖. He congratulated
President Ts. Elbegdorj on his announcement of a moratorium on the use of the death penalty.
He said the British Government was ―conscious that we need to do more to reinforce our
relationship with Mongolia‖ and would continue to work so that ―the reciprocal interests between
Mongolia and the United Kingdom are upheld‖.
Source: TheyWorkForYou.com
MONGOLIA READY TO HELP SIX-PARTY TALKS RESUME
Mr. D. Tsogtbaatar, State Secretary of the Ministry of Foreign Affairs and Trade, told a breakfast
meeting of The Korea Society in New York City last week that sandwiched between two nuclear
neighbors, Mongolia is an unassuming country and has sworn to stay nuclear free and made known it
is no danger to anyone. This is Mongolia‘s highest contribution to its region and it could be an
example to North Korea when that State decides to attempt change. Mongolia feels it can smooth
the way to the six-party talks.
As Mongolia embraced democracy, North Korea began to look down upon it and closed its embassy
in 1999, citing economic conditions as the reason. Mongolia watched the South Korean Sunshine
Policy towards North Korea and started to get more and more interested in what goes on in the
Korean Peninsula and in Japan. North Korea is isolated by its own choice – but someone must get
interested in North Korea.
Mongolia does not think that the North Koreans are totally irrational. It also does not believe that
sanctions will work – they only punish the people who then clam up and there is no progress. Mr.
Tsogtbaatar also felt issues related to nuclear weapons could not be resolved by signing agreements
as if one could take legal action against any later breach.
Source: Sustainabilitank.info
VEGETARIANISM SPROUTS IN MONGOLIA
An unlikely vegetarian movement is beginning to take root in Mongolia, where livestock outnumbers
14. people 14 to 1 and meat consumption tops 200 pounds per person a year. Some estimate that
vegetarians number around 30,000 or 40,000, just over one per cent of the population.
The first vegetarian restaurant in Mongolia, Ananda's Café, opened in 2006. Today more than 20
vegetarian and vegan restaurants pepper Ulaanbaatar, and a handful of others are scattered
throughout the country. Ananda's has launched a catering service and another popular restaurant,
Luna Blanca, now sells frozen faux-mutton dumplings in supermarkets.
The restaurateurs, mostly Mongolians, belong to Christian- and Buddhist-influenced spiritual
movements that promote vegetarianism. Mongolians are turning to vegetarianism mostly because of
health. Increased trade with Russia and China and expanding internet access are providing more
information about food and nutrition.
Read more…
Mongolia's brand of Buddhism does not emphasize sparing the lives of animals for food, probably out
of pragmatism. Some in Mongolia consider meat the only real food. The staples here are often
bland, relying heavily on flour, rice and meat, particularly mutton. Dishes that most Mongolians
refer to as the "national foods", buuz and huushuur — mutton-filled dumplings steamed or fried,
respectively — and tsuivan, steamed noodles mixed with meat and root vegetables, originated in
China.
Even more than meat, the traditional Mongolian diet depends on dairy products. One of the
challenges of starting a vegetarian restaurant in Mongolia is getting people to realize that the menu
isn't just dairy. The Mongolian terms are only subtly different; the phrases for dairy products
(tsagaan idée) and vegetarian food (tsagaan khool) both translate to "white food".
The menus of most vegetarian restaurants here use soya-based meat substitutes to mimic
traditional Mongolian dishes. The food's originality, or lack thereof, is often beside the point.
Source: The Christian Science Monitor
MONGOLIAN ACROBAT IN USA PLANS TRIP HOME AGAINST DOMESTIC VIOLENCE
Thrilling, gravity-defying acrobatics and dazzling dance routines were how Southeast Minneapolis
resident Haltarhuu Erdenechimeg (Chimgee) sought escape from domestic violence. Now 45, she
was born in Mongolia, a country where such violence is commonplace and resources for survivors
are scarce. Her late husband beat her so severely her jaw shattered.
She saw an opportunity to escape when Ringling Brothers Barnum and Bailey Circus chose her to
perform with them in America in 1991. Now, almost 20 years later, Chimgee plans to return to her
homeland to share her story and offer hope through a series of circus performances and outreach
speeches. "I want to tell women to stand up for themselves," she said. "We are strong. Be yourself;
don't be afraid."
She grew up with acrobatics, studying gymnastics and auditioning for the Mongolian State Circus
School when she was 16. Out of 550 children auditioning, she was one of eight chosen to study at
the school. Now, she is a head coach at Circus Juventas in St. Paul and beginning to fundraise for
her trip back to Mongolia in August.
Read more…
Chimgee plans to travel for one month through the countryside, entertaining villages with circus
acts and speaking to the villagers about the issue of domestic violence. She plans to fly into
Ulaanbaatar with her family circus, Circus Manduhai. Her son, Tamir; her husband, Eron Woods;
Stewart Lippe, a juggler from Florida; two students from Circus Juventas and five or six hired
Mongolian performers will also be traveling with her. The group plans to rent vans and drive deep
into the northern rural areas of Hovsgul, which is close to Russia.
She has been coordinating with the National Center Against Violence, one of Mongolia's primary
outreach centers. Mongolian women have few resources to turn to because the law against abuse is
newly established, Chimgee said. Women used to have to pay money if they called the police and
their husbands were put in jail. While there are some shelters, women in rural areas have little
access to them.
Though she is excited about the trip, she is concerned that some people won't like to hear what she
has to say. She would like to hire a police officer or other security escort if she can afford it.
Source: www.circusjuventas.org
ZAMBIA, CHINA SIGN MINING COOPERATION DEAL
Zambian President Rupiah Banda and his Chinese counterpart Hu Jintao last week signed a mining
cooperation pact in Beijing that should bolster ties between Africa's largest copper producer and its
biggest single investor. There was no figure put on the memorandum of understanding covering
geology and mining, but China has already poured over USD1.2 billion into the southern African
15. state, and most of that has gone to the minerals sector.
Four other deals signed at the same time covered construction of a road and an industrial park and
other economic, technical and cultural cooperation.
Opposition politicians in Zambia have not been as keen about the booming relationship, and say
Chinese mining firms have created "slave labor" conditions at their Zambian ventures. In 2005,
about 50 Zambians died in an explosives accident at a copper mine run by state-owned China
Nonferrous Metals Industry. In later pay protests, five Zambians were shot and wounded by Chinese
managers. Chinese mining firms say they offer reasonable wages and operate within Zambian labor
laws.
Last December China's commerce minister visited Lusaka and signed deals to fund a stadium and a
conference center, as well as sending agricultural experts to boost the sector.
Source: www.miningweekly.com
UNDERSTANDING BEIJING’S “GO GLOBAL” STRATEGY
China has captured the imagination of chief executives and major companies around the world. To
date the focus has largely been on selling in the domestic market, locating production facilities
there or sourcing from Chinese factories. Yet with a growing tide of investments from Chinese
enterprises moving abroad, all this is about to change. Foreign executives' "China strategy" can no
longer focus only on competing in the Chinese market, but must also engage with Chinese
enterprises in global markets.
China's outward investment in 2009 was USD43.3 billion, according to estimates from the Ministry of
Commerce, compared to an average of USD2.4 billion per year between 1990 and 2000. And
authorities such as the Organization for Economic Cooperation and Development have suggested
that these figures substantially underestimate the scale and range of a much larger "Go Global"
strategy. Many of the most important deals, such as multibillion dollar loans for resources deals,
don't even enter the foreign investment statistics. Such loans, plus aid tied to contracts for Chinese
firms, have outstripped Chinese direct investment in Africa by a significant margin.
The vast majority of this outbound investment has been in services, not natural resources. China
Development Bank's acquisition of a minority stake in Britain's Barclays Bank, Industrial and
Commercial Bank of China's purchase of a 20% stake in South Africa's Standard Bank, Bank of China's
acquisition of Singapore Leasing, and China Construction Bank's acquisition of Bank of America
(Asia) are just four recent investments in the financial sector. Enterprises such as China
International Trust and Investment Company, China Overseas Shipping (Group) Company and China
State Construction Engineering Corporation have been making outward investments in trade-related
services, transportation, construction and others for years. The current investment boom is creating
platforms to support even larger outbound investments in the future.
Read more…
China's growing corporate presence abroad is creating new competitive pressures for Western
companies. Chinese enterprises enjoy many advantages over foreign rivals, including a lower cost of
capital, lower wages at home and limited accountability to shareholders. They benefit from an
unparalleled ability to mobilize the state on their behalf, as when they take advantage of Beijing's
political linkages with developing countries to obtain preferential access to resources and business
opportunities.
In part, China's investment expansion is the natural next step for a country that has risen with
unprecedented speed. But it is also part of a broad strategy by the Government and the Communist
Party to strengthen Chinese enterprises in domestic and international markets, and to project soft
and hard power on the international stage. This means that some enterprises will venture abroad
even if it is commercially unprofitable for them to do so.
Western companies will ignore this background at their peril, finding themselves competing with
enterprises whose motivations won't always be purely commercial. To prepare for this new
competition, executives need better strategies and better intelligence. It is not enough to track the
investments of individual Chinese enterprises in particular geographic areas or product markets.
Western companies must understand how overseas investments by Chinese enterprises fit into
China's overall "internationalization" strategy, how the enterprises might be linked to other entities
and how they're likely to measure success.
A more sophisticated understanding of China's moves overseas will also highlight the opportunities
open to foreign companies. Chinese enterprises are inexperienced when it comes to global markets
and have limited international marketing and distribution capabilities. Those expanding abroad will
need suppliers, advisors and partners, providing business opportunities for non-Chinese firms. Aiding
Chinese enterprises abroad could be part of a strategy for developing better relations both with
16. corporate peers and with the government, and better access within China as a result.
The key to meeting the challenges posed by Chinese enterprises will be what it has always been:
understanding the nature of the competition and dealing with it in a comprehensive fashion. A
piecemeal approach to China's internationalization is doomed to failure.
Source: The Wall Street Journal Asia
NEW MONGOLIAN LAWS
The following Law was published in a recent weekly Government bulletin. Unless otherwise
decided by Parliament, it takes effect (10) days after publication.
Date Laws
02/26/2010 Law on Capital Assessment
Please visit BCM‘s website, Legislative Working Group, for a summary of new Mongolian laws. BCM
members who wish complete versions of the laws and regulations in Mongolian language are
welcome to call or email the BCM office: 332345 or info@bcmongolia.org.
ANNOUNCEMENTS
2nd
ANNUAL MONGOLIA-ASIA INVESTMENT FORUM, MARCH 25, THE WESTIN BEIJING
Euromoney Conferences invites you to apply for your free place at the 2nd
Annual Mongolia-Asia
Investment Forum at the Westin Beijing on March 25.
The Panels: Investing in Mongolia‘s Mining Assets; Investing in Infrastructure to support the mining
industry; Developing Mongolia‘s capital markets; Mining Supply Chain Management; Investing in
Mongolia‘s property market. Click here for a copy of the latest agenda.
BCM will again partner with Euromoney on organizing this Forum, to be held in Beijing for the first
time, to strengthen cooperation and trade relationships between Mongolia and the rest of Asia.
There are still a few opportunities left for exhibiting at the conference. Euromoney Conferences
welcomes any organizations who wish to take advantage of this opportunity to showcase their
company to this high profile audience. For further information please contact: Nick Wakefield on
+852 2842 6939 or nick.wakefield@euromoneyasia.com
______________________________________
SEARCH FOR FINANCIAL DIRECTOR
Areva Mongol is looking for a Financial Director, reporting directly to the CEO, in Ulaanbaatar. This
is a new position in the company. The FD will be responsible for financial, accounting, tax,
administration, and project funding issues.
Contact: Mr. Eric de Seze, General Director and CEO, Areva Mongol, at 976-7011-0675 or
eric.deseze@areva.com.
______________________________________
“MM TODAY” ON MNB-TV
BCM is pleased to announce that Mongolian National Broadcasting continues its cooperation with
BCM on ―MM Today‖. This English news program is aired every Friday for 10 minutes and is
scheduled for 21:15 tonight. Tune in to watch this program that reports stories from today‘s BCM
NewsWire.
17. SPONSORS
ECONOMIC INDICATORS
MSE WEEKLY REVIEW
For the week ended February 26, 2010, trading activity on the Mongolian Stock Exchange (MSE)
totaled 3.0 million shares with 35 companies traded. Total market value of transactions was MNT
1.1 billion. Total market capitalization of the 358 stock companies listed on the MSE was MNT 713.4
billion, and increased by MNT 45.1 billion or 6.7% from Feb 19, 2010.
The Top-20 Index increased by 645.44 points or 9.4% compared to the previous week, closing at
7535.52 points. MSE Composite Index increased by 293.73 points or 8.9% compared to the previous
week, closing at 3,639.40 points.
Most active stocks traded were: Khukh gan (1,506,300 shares), Jenco tour bureau (1,035,900
shares), BD Sec (200,000 shares), Apu (118,200 shares), and Gobi (64,000 shares).
Major share price percentage gainers were: Tavan tolgoi (40.6%), Zoos goyol (40.4%), Bayangol ZB
(19.0%), Gazar suljmel (15.0)), and Apu (15.0%).
Major share price percentage losers were: Eermel (13.9%), Talkh chikher (11.7%), Hai bi oil (10.0%),
Darkhan nekhii (4.1), and Naco tulsh (4.0%).
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]
January 31, 2010 *5.7% [source:NSOM]
*Year-over-year (y-o-y)
18. 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 – March 4, 2010
Currency name Currency Rate
US dollars USD 1,440.90
Euro EUR 1,961.71
Japanese yen JPY 16.23
British pound GBP 2,161.71
Hong Kong dollar HKD 185.60
Chinese yuan CNY 211.09
Russian ruble RUB 48.31
South Korean won KRW 1.26
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.
