1. BUSINESS COUNCIL of MONGOLIA
NewsWire
www.bcmongolia.org
info@bcmongolia.org
Issue 92, October 30, 2009
“SPECIAL DISCOVER MONGOLIA 2009 ISSUE”
NEWS HIGHLIGHTS:
Business:
China Nuclear may start mining Gurvanbulag uranium in two years;
Chinese wealth fund invests USD500 million in SouthGobi Energy Resources;
Chinalco eyeing investing in Oyu Tolgoi;
Ivanhoe gets USD388 million injection as Rio boosts stake;
Ivanhoe targeting 20 million tons of coal output in Mongolia;
Ivanhoe “ready to start building” at Oyu Tolgoi, says Friedland;
Mongolia shortlists 8 bidders for Tavan Tolgoi;
Jindal Steel in race for Tavan Tolgoi;
Shenhua Energy profit rises 14.6% on higher output;
CIC to invest up to USD700 million in second Mongolian deal of the week;
Entree Gold receives mining licenses providing “long-term security”;
SouthGobi’s expansion plans to create jobs and develop regional infrastructure;
TDB and Ulaanbaatar City Bank to merge;
Suppliers exhibit their products and services, from aircraft to laundry;
Chinese oil discoveries in Mongolia “minor and economically not viable”;
Petro Matad engages Ansai Yuehua to drill Block XX;
Miners’ debts to curtail future supplies, warns report.
Economy:
“Stop interfering, or I quit,” Central Bank President tells MPs;
Labor boss warns of nationwide strike, tax boycott;
Political change roils mining prospects;
Assessment of banking legal framework completed;
Former Central Bank chief calls for transparency;
Welfare allowances no substitute for jobs;
MNT78 billion distributed to 1.3 million citizens;
Medical practitioners talk of strike;
Need to streamline and improve work at border ports;
Herdsmen receive MNT24.6 billion for unsold cashmere;
Xinjiang starts importing coal from Mongolia;
90% of SME development loan amount distributed;
MNT10-billion Mongolian Mortgage Corporation bond subscribed in one day;
BHP chairman asks China to get over hostility;
Economic recovery, weaker dollar combine to boost gold;
Economic trouble leads investors to place faith in gold.
2. Politics:
Su.Batbold takes over as Prime Minister;
“Keep the Cabinet as it is,” Bayar pleads in farewell speech;
Mongolia will miss Bayar’s aura of authority;
Five reasons to thank Bayar;
Interior Minister wants more vigilant monitoring of gold miners;
H1N1 virus claims 4 lives so far;
Mongolian police deny they helped China seize and take back doctor;
Mongolia attends 20-nation military conference hosted by USA;
Prisoners receive vocational training to help in rehabilitation;
Bank embezzler expects release under amnesty law;
LV store opens in glittering ceremony;
Woman with orchard in Khovd gets UN award;
An anthropologist discovers the “secret lovers” of Ulaanbaatar;
Experts worry as population and hunger grow.
BCM MONTHLY MEETING RECAP
The BCM monthly meeting on October 26, with Mr. Laurenz Melchers in the chair and 61 members in
attendance, featured two presentations: the first by Mr. Sergey Gromov on ―Investment
Opportunities with Chinggis Khaan Bank‖, of which he is CEO, and the second by Mr. B.Batbayar,
CEO, National Life, on ―High-end Health Care Products and Services‖.
Mr. Gromov said his bank was not a retail bank and did not accept deposits from customers. It was a
direct investment bank, with its MNT60 billion in capital coming from abroad and total assets
approximating MNT150 billion. It also arranges syndicated loans. He gave details of several
Mongolia-based companies whose financial needs the bank had helped meet.
Mr. Batbayar said National Life‘s insurance schemes were meant to provide services to Mongolians
who spend a relatively enormous amount of money in seeking medical care abroad. The company
has various options, some with an overall annual limit as high as USD1,000,000 and covering all
countries of the world, and some others for Asia-only with a coverage limit of USD300,000. Group
plans offer better terms than individual policies and he hoped companies would be interested in
them.
Mr. Randy Myer, Chairman of BCM‘s TVET Working Group, gave an update on its work. The
Millennium Challenge Corporation has recently allocated USD23 million more to its original
allocation of USD25 million for vocational training, and training in heavy equipment technology has
now been added to the initial areas of mining, health, and construction.
Earlier, Executive Director Jim Dwyer welcomed the three new members since the last meeting.
They are Mongolia Energy Corporation (MoEnCo), an energy and resources developer which has
approximately 330,000 hectares of concession areas in western Mongolia for coal, and ferrous and
non-ferrous metal resources, aside from other projects in Mongolia and China; Landex Company,
which has been operating international freight forwarding since its establishment in 2000; and
Bayankhundii Company, founded in 2001 to provide domestic freight forwarding service for heavy
industrial machinery under contract. Jim reported that the 2009 membership year ended with 131
members. The Board has high hopes most all members will renew as part of the 2010 membership
drive which also envisions a significant number of new members.
See BCM website, BCM News & Press for further information.
3. BUSINESS
CHINA NUCLEAR MAY START MINING GURVANBULAG URANIUM IN TWO YEARS
China National Nuclear Corp., the nation‘s biggest operator of reactors, plans to start mining
uranium from the Gurvanbulag deposit in eastern Mongolia within two years. China Nuclear‘s stake
in the mining venture will be decided soon, Mr. Ts. Gombo, a director at MonAtom, Mongolia‘s
state-owned company in charge of uranium, said in Beijing. The Mongolian Government must own at
least 51 percent of any uranium project, he said. China National declined to comment when
contacted by Bloomberg.
The Gurvanbulag deposit holds 10,000 to 15,000 metric tons of Mongolia‘s proven reserves of about
62,000 tons of the nuclear fuel, Mr. Gombo said. The International Atomic Energy Agency‘s estimate
of Mongolia‘s uranium reserves is more than 1.2 million tons. China Nuclear got access to
Gurvanbulag after its acquisition this year of a majority stake in Canadian mining company Western
Prospector Group, which discovered the reserves.
China‘s own uranium resources can meet domestic demand until at least 2020.
Source: Bloomberg.com
CHINESE WEALTH FUND INVESTS USD500 MILLION IN SOUTHGOBI ENERGY RESOURCES
SouthGobi Energy Resources Ltd. said on Monday it plans to accelerate the development of its
Mongolian coal projects with a USD500-million investment from a subsidiary of China's sovereign
wealth fund, China Investment Corp (CIC). However, the reaction from SouthGobi's Canadian-listed
stock price was largely muted, due to limited liquidity. SouthGobi is almost 80 percent owned by
Vancouver-based Ivanhoe Mines with the bulk of its remaining shares being held by institutional
investors and mutual funds.
SouthGobi is focused on exploring and developing metallurgical and thermal coal deposits in
Mongolia and its flagship project is the Ovoot Tolgoi coal mine in the South Gobi region of the
country. The mine is expected to produce about 1.5 million tons of coal this year, but the company
plans to ramp up production to 8 million tons in the next three to five years. It also plans to
develop its Soumber deposit, which is located about 20 km east of Ovoot Tolgoi.
SouthGobi said CIC's investment will give it the right to nominate one director to SouthGobi's board,
which currently consists of eight members. CIC's investment, in the form of convertible debentures,
also gives it the right of first offer for any direct and indirect sale of Ivanhoe's ownership stake in
SouthGobi.
Source: Reuters.com
CHINALCO EYEING INVESTING IN OYU TOLGOI
Rio Tinto and Chinalco have begun talks about jointly investing in Oyu Tolgoi, only months after
falling out over one of the largest and most acrimonious non-deals in corporate history. The project
is only 200 km from the Chinese border and will require Chinese infrastructure, logistics and
marketing co-operation. "Chinese investment is inevitable," said an investment banker who advises
Chinese companies on Mongolian and other investments. "Rio Tinto needs China to make or
transport the mining machinery, connect the electricity and water, build the rail link and of course
to buy all the product," he said.
Chinalco, which is Rio Tinto's largest shareholder, is considered the most likely possible Chinese
investor in the project. It is understood to have got in first to register its interest with the National
Development and Reform Commission, the agency responsible for trying to co-ordinate China's
outward investment forays. Sources close to both Chinalco and Rio Tinto confirmed that the
companies are proceeding cautiously with early discussions about investment and co-operation at
Oyu Tolgoi.
The Oyu Tolgoi investment agreement says additional investors cannot be brought in without the
consent of all parties, notably the Mongolian Government. Alternatively, Chinalco could gain
exposure to Oyu Tolgoi by seeking to invest directly in Ivanhoe Mines. Rio Tinto holds its interest in
Oyu Tolgoi through a 19.7 per cent stake in Ivanhoe and has options to raise its stake to 43 per
cent.
Read more…
Any involvement by Chinalco will be acutely politically sensitive, given Rio Tinto's present low
4. standing in China and China's political and public relations problems in Mongolia. Mongolia has bitter
collective memories of Chinese imperial rule which are now overlaid with anxieties about economic
annihilation. A well-placed Mongolian official has said that his Government rejected a request by
Chinese Premier Wen Jiabao to visit earlier this month. "We have something in our blood about
China," the official said. "It will be very difficult for Chinalco to come into Mongolia."
Ivanhoe this week demonstrated its good relations with potential Chinese investors when its
subsidiary SouthGobi Energy Resources issued a USD500-million convertible note to China
Investment Corporation, China's main sovereign wealth fund, to develop an adjacent coal resource.
China Shenhua Energy, China's largest coalmining company, is one of two front-runners to develop
Talvan Tolgoi, the world's largest undeveloped coking coal resource. Shenhua is leading a
consortium to build a rail link up to the Mongolian border that could haul coal and copper
concentrate from Oyu Tolgoi and Talvan Tolgoi into China.
Source: The Sydney Morning Herald (www.smh.com.au)
IVANHOE GETS USD388 MILLION INJECTION AS RIO BOOSTS STAKE
Rio Tinto has doubled its holding in Ivanhoe Mines for USD388 million, the firms announced on
Wednesday. Rio now owns 19.7% of Ivanhoe, up from the previous 9.9%. The investment was
completed as part of a 2006 agreement between the two companies.
The cash received from the private placement increased Ivanhoe's current consolidated cash
balance to around USD610 million. Rio has said that, if it were to exercise and convert all of its
remaining warrants and securities of Ivanhoe, it would own approximately 257.9 million or 43.1% of
Ivanhoe's common shares.
The two companies are due to complete an updated development plan for Oyu Tolgoi in the next
couple of weeks.
Source: www.miningweekly.com
IVANHOE TARGETING 20 MILLION TONS OF COAL OUTPUT IN MONGOLIA
Ivanhoe Mines Ltd. is targeting long-term coal production of 20 million tons a year from Mongolia.
The company, through its SouthGobi Energy Resources Ltd. unit, wants to supply 1 percent of
China‘s coal supply within 10 years, Chairman Robert Friedland said last week in Beijing. China is
the world‘s biggest coal consumer.
Mongolia may become the ―Saudi Arabia of coal‖, Mr. Friedland said earlier at the China Eurasia
Investment Forum.
SouthGobi‘s Ovoot Tolgoi mine, located 45 km north of the border with China, has 114.1 million
metric tons of coal reserves. It is targeting sales of almost 15 million tons by 2015. Ivanhoe Mines,
based in Vancouver, owns 80 percent of SouthGobi.
Source: Bloomberg.com
IVANHOE “READY TO START BULDING” AT OYU TOLGOI, SAYS FRIEDLAND
Ivanhoe Mines Chairman Robert Friedland has said his company, developing the Oyu Tolgoi project
with Rio Tinto Group, is ready to start mine construction at the USD4-billion copper and gold
operation. The venture is ―ready to start full-scale mine construction‖, he told the China Eurasia
Investment Forum in Beijing.
Source: Bloomberg.com
MONGOLIA SHORTLISTS 8 BIDDERS FOR TAVAN TOLGOI
Mongolia has shortlisted eight potential partners for the huge Tavan Tolgoi coking coal project,
according to, deputy director of Erdenes MGL, the Mongolian Government company that will hold at
least 51 percent of the equity. The eighty, selected from among 11 bidders, were BHP Billiton,
India's Jindal, Brazil's Vale, US coal miner Peabody, China's Shenhua, South Korea's COPEC
consortium, a group of Japanese companies, and a Russian consortium including Gazprom and
Renova.
Mr. Ganzorig said it could take the Government two to three months to make its final choice.
"There are feasibilities to be clarified, options such as to divide the deposits into two to three
blocks," he told reporters on the sidelines of a China Eurasia investment seminar. Mongolia has
hired JPMorgan and Deutsche Bank to sell up to a 49 percent stake in the mine.
Source: Reuters.com
5. JINDAL STEEL IN RACE FOR TAVAN TOLGOI
Jindal Steel & Power Ltd (JSPL) is in the race for the Tavan Tolgoi coal project, one of the 10
biggest deposits in the world. Mr. Vikrant Gujral, vice-chairman and CEO, JSPL, said, ―We made a
presentation before the Group of Ministers. We have been informed that we are one of the
shortlisted bidders for a 49 per cent stake in Tavan Tolgoi. This is a big deposit and we are the only
Indian company to be shortlisted.‖
Tavan Tolgoi has six billion tons of coal, of which two billion is coking. The balance 51 per cent
stake would be held by a Government-owned company. Though Mr. Gujral did not specify the value
of the deal, pointing out that this would have to be studied, industry sources said it could run into
billions of dollars as it is an operational mine. Mr. Gujral said the coking coal could be transported
to cater to JSPL‘s steel plants in India. However, he pointed out that Mongolia is a landlocked
country and the mineral would have to be routed through either China or Russia.
Indian steel companies have been scouting for raw material assets overseas in the past few years.
Coking coal accounts for around 50 per cent of the raw material costs and proven reserves of prime
coking coal in India are at 4.6 billion tons, but production is around seven million tons only. Also,
the quality of Indian coking coal is poor and it has to be blended with imported coal.
Source: Business Standard
SHENHUA ENERGY PROFIT RISES 14.6% ON HIGHER OUTPUT
China Shenhua Energy Co., the nation‘s biggest coal producer, said profit in the first nine months
rose 14.6 percent on increased output. ―The company achieved outstanding results in production
and operation. The continuous good performance of the macro economy is favorable for coal
demand,‖ a statement said.
Shenhua intends to pursue domestic and overseas acquisitions, focusing on large-scale integrated
coal fields, Chairman Zhang Xiwu Zhang has said. It has submitted a ―competitive bid‖ for the
Tavan Tolgoi mine in Mongolia, and has been shortlisted by the Mongolian Government for the final
choice.
Mongolia may choose at least one partner for the USD2-billion coal project and will give priority to
bids that offer to develop the mine‘s infrastructure, Mongolian Deputy Minerals and Energy Minister
B. Ariunsan has said, adding that a decision may be expected by the end of this year.
Source: www.tehrantimes.com
CIC TO INVEST UP TO USD700 MILLION IN SECOND MONGOLIAN DEAL OF THE WEEK
China Investment Corp. has reached a deal to invest up to USD700 million in Mongolia-focused Iron
Mining International Ltd., partly owned by Chinese private equity firm Hopu and Singapore‘s state
investor Temasek, according to people familiar with the situation.
China's sovereign wealth fund agreed to terms for a USD500 million convertible loan to Iron Mining
International, and the company has an option of increasing the loan to USD700 million, according to
these people. The company, formerly known as Hong Kong Lung Ming Investment Holdings Ltd., is
planning to raise USD1 billion through an initial public offering in Hong Kong next year.
CIC announced another sizeable Mongolian deal this week when it agreed to invest USD500 million
in SouthGobi Energy Resources Ltd. CIC is rapidly deploying its capital this year to try to catch the
upside of a global economic recovery by buying into natural resources and property assets.
Source: The Wall Street Journal
ENTRÉE GOLD RECEIVES MINING LICENSES PROVIDING “LONG-TERM SECURITY”
Entree Gold‘s exploration concessions for Shivee Tolgoi and Javhlant have been converted into
mining licenses after its application for this was approved by the Mineral Resources Authority of
Mongolia. The eastern portion of the Shivee Tolgoi license and the entire Javhlant license are
subject to a joint venture with Ivanhoe Mines Ltd. Mining licenses have a 30-year term with two
renewals of 20 years each possible.
Mr. Greg Crowe, President and CEO of Entrée, has stated that the grant of the mining licenses
―provides the long-term security‖ necessary to advance the known deposits at Oyu Tolgoi through
development to production. It also provides sufficient time for testing the potential along strike
extensions to Entree's Hugo North Extension and Heruga deposits and for the diligent and systematic
exploration of other copper, gold and molybdenum prospects. ―The granting of these mining
licenses represents a pivotal moment in the advancement of our Mongolian assets," he said.
6. Source: www.entreegold.com
SOUTHGOBI’S EXPANSION PLANS TO CREATE JOBS AND DEVELOP INFRASTRUCTURE
Mr. Alexander Molyneux, President and CEO of SouthGobi Energy Resources Ltd., says the improving
investment climate in Mongolia has enabled the company to secure an attractive financing package,
through which ―we can accelerate the transformation of Mongolian coal resources into jobs,
enhanced prosperity and sustainable development for Mongolia. This is not just about expanding our
mining capacity. This investment program will see us take the first step toward establishing value-
added processing in Mongolia, which now is a priority for the Mongolian Government. SouthGobi's
plans include building a large and sophisticated coal-washing facility to sell processed coal
products. We also will work with Mongolian partners in building transportation infrastructure in the
region."
Revealing that ―continued exploration successes have significantly expanded our coal resources in
Mongolia's South Gobi,‖ Mr. Molyneux added, ―Now we are in a position to develop our company
into a prominent regional producer and exporter." SouthGobi's accelerated investment program will
provide many benefits for Mongolia and the Mongolian people, including:
- Increased revenues to the Government of Mongolia through royalties, fees and taxes.
- Additional training, employment and professional development opportunities. As at the end of
September, a total of 97% of its 278 employees are Mongolian nationals and the company now
expects to double its total employee base by 2014.
- The introduction of modern technologies to Mongolia to add value by manufacturing processed
coal products.
- The stimulation of economic growth in the South Gobi Region and elsewhere in Mongolia.
Southgobi Sands already sources more than 90% of its supplies within Mongolia.
Source: www.southgobi.com
TDB AND ULAANBAATAR CITY BANK TO MERGE
The Trade and Development Bank and the Ulaanbaatar City Bank have sought the permission of the
Central Bank to merge. Since the President of the Central Bank favors mergers as a way to bring
down the number of banks, their request should be approved without any problem. Another point in
their favor is that the same principal is the principal shareholder in both banks. Customers and
account holders are expected to benefit from the move.
Source: Zuunii Medee
SUPPLIERS EXHIBIT THEIR PRODUCTS AND SERVICES, FROM AIRCRAFT TO LAUNDRY
The Business Council of Mongolia (BCM) arranged a Mining Supply Chain Supplier Exhibition on
Wednesday at the Khan Bank Theater. A wide variety of goods and services that will be needed as
the mining sector expands was on show, from packaged flour and work uniforms, to cement and all
the necessities of mining companies, including heavy equipment.
The exhibitors included big names like Honda and Panasonic displaying state-of-the-art technology,
to Metro Express, aiming to dot the countryside with its laundry network. Eznis Airways offered to
charter its planes, while English EZ has developed a program to teach English to Mongolian mining
workers.
Khan Bank represented the banking sector, offering various services to mining companies. According
to an official of the bank, suppliers listed in the BCM database will be eligible to take loans from
the bank without collateral on the basis of their agreement with the Oyu Tolgoi project. ―We wish
to support domestic manufacturers and the interest rate will not be harsh,‖ said the official.
Source: Ardiin Erkh
CHINESE OIL DISCOVERIES IN MONGOLIA “MINOR AND ECONOMICALLY NOT VIABLE”
Chinese oil major CNPC has earmarked half a billion dollars this year for oil drilling in Mongolia, but
has so far only made a small discovery, a Mongolia Government official has said. "Altogether, 26
blocks have been taken by companies including Sinopec and CNPC, but the discoveries they've made
are minor and are not economically viable to develop," Mr. T. Ganzorig, deputy director of Erdenes
MGL, a Mongolian state company, told a forum in Beijing.
Both Sinopec and CNPC entered into production sharing contracts with Mongolia a few years ago to
7. explore for oil in eastern and southern parts of the country, he added. The Government might open
three new oil blocks to foreign companies, but he did not provide a timetable.
Source: Steelguru
PETRO MATAD ENGAGES ANSAI YUEHUA TO DRILL BLOCK XX
Mongolia-focused Petro Matad Ltd. has hired Ansai Yuehua Oil Tech Company to drill its Davsan
Tolgoi prospect on Block XX in eastern Mongolia. The agreement provides for the drilling of the first
well Davsan Tolgoi-1(DT-1) with the option to continue the drilling agreement until the completion
of work on up to five additional wells.
Petro Matad opted to accelerate drilling on the prospect after a study by independent well drilling
consultancy IPS Australia showed that the program could commence in 2009 with all safety,
environmental and engineering issues covered by the budget.
The DT-1 well will be located 5 km off the nearest oil discovery well and 10 km updip from the
Tolson Uul oil field in the adjacent Block XIX. Ansai Yuehua has provided a drilling rig which has
already been mobilized to the drilling location. Data from a 3D seismic survey put Block XX‘s
unrisked prospective resource at 638 mmbbl (million barrels of oil) and risked resource at 112
mmbbl.
Source: Proactive Investors UK
MINERS’ DEBTS TO CURTAIL FUTURE SUPPLIES, WARNS REPORT
Pressure on miners to reduce debt and the lower availability of new loan facilities will likely play a
big role in curtailing future supplies of metals and minerals, Ernst & Young (E&Y) said in a report on
Monday, titled Mining and Metals: The Wall of Debt. The study tracked the performance of a sample
of the world‘s largest listed mining and metals companies over almost three decades, and suggests
that debt levels remain a ―major concern‖ across the mining and metals sector due to the dramatic
levels of borrowing that occurred during the peak of the cycle in 2007/08.
―The sharp reduction of investment at all levels of the industry, from exploration through
expansions, has cost the global economy, according to some opinions, at least two years of capacity
expansion in mining and metals production.‖ The pipeline on new projects has been reduced
―dramatically‖, with new bank debt very difficult to obtain, and the corporate bond market
essentially only open to companies with acceptable credit rating, E&Y said. ―And even they are
constrained by credit limits.‖
Management correctly turned its attention to debt restructuring and the curtailment of operating
costs and capital outlay last year, but the ability to finance the pipeline of new projects has been
significantly reduced as a result. ―Long term fundamentals for metals and minerals demand remain
robust, but supply is being curtailed and there is a real danger of a supply gap emerging in several
metals and minerals.‖
Source: www.miningweekly.com
ECONOMY
“STOP INTERFERING, OR I QUIT,” CENTRAL BANK PRESIDENT TELLS MPs
Central Bank President L.Purevdorj recently told members of the Parliamentary Standing
Committee on the Economy that he would be forced to resign if MPs continued to interfere in his
work and take decisions that ran counter to the monetary policy without any discussion with him.
His outburst came when he met the Standing Committee to discuss MPs‘ demands for reducing loan
interest rates, having Euro and gold apart from USD in foreign currency reserves, and conducting
trade with foreign countries in MNT.
An extremely agitated Purevdorj is believed to have asserted that he had the assigned responsibility
to formulate and implement the monetary policy, but ―today Parliament is usurping this
prerogative‖, bypassing him and the Central Bank. If things continue like this ―I shall have to
resign‖, he said, cautioning that fixing interest rates at 12% per year ―will certainly lead all banks
to bankruptcy‖. MPs had earlier expressed concern that high interest rates were putting
―unacceptable pressure on one-fourth of the herders and half of the private entities in the country‖
that had bank loans to repay.
Mr. Purevdorj said the MPs could have sent all their suggestions earlier, instead of pressing for
8. revisions to the monetary policy for 2010 after it has been prepared. ―It is unrealistic to demand a
restoration of the old economic model,‖ he said.
Source: Udriin Sonin, Zuunii Medee
LABOR BOSS WARNS OF NATIONWIDE STRIKE, TAX BOYCOTT
The head of the Mongolian Labor Union, Mr. S.Ganbaatar, has warned of a possible strike by the
union if the Government does not withdraw the Finance Minister‘s ―stupid proposal‖ to raise the
amount of social insurance payments by three percent and to end the practice of free treatment at
state hospitals of all children up to the age of 18. ―I fear they would use the extra money to pay for
what has been already spent. This would be very wrong. The people should not be made to pay for
the Government‘s extravagance or mismanagement,‖ Mr. Ganbaatar said.
If the Government ―continues to play deaf‖, Mr. Ganbaatar said his next step will be to call upon
the people to stop paying taxes. The Tax Payers‘ Union has supported the idea and a campaign will
have to be planned if the Government and Parliament do not respond to the demand. ―We hope not
to burn the house to save it from cockroaches,‖ he said.
The labor leader is now on a sit-in strike at Sukhbaatar Square in protest against the Government‘s
use of money in the social insurance fund to meet budgetary expenses. He is sitting surrounded by
boards reading ―Government, repay your debt‖, but like most borrowers in life, the Government
pays little heed. The issue, however, is of serious concern to many ordinary people‘s future.
Read more…
He told media he has received a letter from the Finance Minister ―which can be understood as
saying, ‗Ganbaatar, you should be more wise and more practical‘.‖ Calling this an ―act of
provocation from a weak politician‖, Mr. Ganbaatar said the present social crisis stems from the
Government‘s failure to equitably distribute the national wealth.
The State budget had MNT400 billion in 2000, and the amount has gone up to MNT2.5 trillion. Even
with this six-fold increase in the budget, the number of poor people keeps rising. ―The mechanism
to distribute the social resources has been deliberately dismantled, allowing the rich to grow richer
while ordinary citizens become poorer,‖ he said.
Mr. Ganbaatar said his fight is to assert the justice of the principle that social insurance benefits
must be given to people when they are old or sick, adding, ―MNT2 trillion paid by the people to the
state to guarantee their future is missing. This means the common man will get only MNT25,000 as
monthly retirement benefit after 2015, while the President‘s pension has been fixed at
MNT108,000. Instead of rectifying the injustice of this, the Finance Minister is trying to burden the
people even more.‖
Source: Ardiin Erkh
POLITICAL CHANGE ROILS MINING PROSPECTS
The change of Prime Ministers raises questions about the future of the coalition government leading
the resource-rich country, which has been one of the world's most promising new mining
destinations. Mr. S.Bayar was instrumental in overcoming years of heated domestic debate over
how to use the country's resources.
As the prime minister is in charge of the Government's day-to-day operations and the economy, Mr.
Bayar's successor will have significant power to shape the country's policy on foreign investment in
its coveted natural resources.
The country has been trying to wring greater concessions from foreign companies, but the global
economic slowdown curbed demand for commodities, weakening Mongolia's negotiating position and
leaving the country still deeply divided over when and how to exploit its resources. "An able
successor is crucial both to foreign investment and the future of the governing coalition," said a
consultant who has been involved in the negotiations over the Oyu Tolgoi deal.
Mr. Nick Cobban, a spokesman for Rio Tinto, said it does not expect Mr. Bayar‘s departure to have
any impact on the deal. "That investment agreement was signed with a very broad coalition
representing 80% of the members of Parliament. It wasn't the Prime Minister. We are quite
confident that his decision to stand down won't impact the agreement," Mr. Cobban said.
Source: The Wall Street Journal
9. ASSESSMENT OF BANKING LEGAL FRAMEWORK COMPLETED
The USAID-funded Economic Policy Reform & Competitiveness Project has recently completed a
review of the current Banking Law and the Central Bank Law, and of proposed draft amendments to
both in the context of international best practices. The Central Bank had asked for the review.
A well conceived regulatory framework should allow bank supervisors to distinguish between
symptoms and causes of problems. A banking law should also guide bank supervisors to identify and
tackle problems at an early stage, before they become severe. Banking laws should unequivocally
mandate that supervisors take prompt actions based on the principles of speed, cost efficiency,
flexibility, consistency, transparency, cooperation, and avoidance of moral hazard.
The recommendations of the review of the Banking Law include provisions for:
- Adoption of a more comprehensive definition of ―related parties transactions‖ and more stringent
regulations on such transactions to reduce the risks of abuses and conflicts of interests;
- Enforcement of regulatory compliance;
- Raising of minimum capital requirements;
- Regulation of banks‘ mergers and acquisitions;
- Greater transparency and information disclosure;
- Strengthened consolidated supervision;
- Clarification of extrajudicial and judicial insolvency regime as applied to bank receivership;
- Requirement of an independent professional on the boards of directors of banks.
The review of the Central Bank of Mongolia Law was based on the principle that it should primarily
support the Central Bank‘s autonomy and accountability aimed at strengthening monetary policy
and securing price and financial sector stability.
The recommendations include:
- Restrictions of granting credit to banks;
- Prohibition or severe restriction of granting credit to the Government so as to strengthen the
Central Bank‘s autonomy to conduct monetary policy;
- More explicit provisions regarding coordination of fiscal and monetary policy;
- Provisions for improved transparency, communication and accountability.
A stronger banking system in Mongolia will also require a proper market and legal infrastructure.
The review has recommended how this can be put in place.
Source: EPRC newsletter
FORMER CENTRAL BANK CHIEF CALLS FOR TRANSPARENCY
Mr. J.Unenbat, a former President of The Central Bank and now a teacher at the Institute of
Finance and Economics, has called for more transparency in the banking sector. Regretting that the
people have no way of ascertaining the real financial health of a bank before they decide where to
invest, he said this increased the responsibility of the Central Bank all the more. He wanted the
public to have more information about the principal and active shareholders of a bank, so that the
Mongolian practice of choosing a bank only on the basis of the terms it offers is ended.
Mr. Unenbat is firmly against the establishment of a development bank as ―our administrative skills
are not enough to withstand pressure from irresponsible political lobbies and powerful private
interests who are certain to get their way‖.
Refusing to be overawed by the economic downturn, he said crises are a part of life, and ―there is
no need either to fear one or to pretend there isn‘t one‖. One should face a crisis as something that
brings a problem to the fore and then try to solve that problem. ―It is a learning experience,‖ he
said.
Source: Ardiin Erkh
WELFARE ALLOWANCES NO SUBSTITUTE FOR JOBS
Of the MNT329.1 billion allocated to the Ministry of Social Security and Labor in the draft budget of
2010, MNT176.3 billion or 53.6 percent of the total will go towards implementing social welfare
programs, while the rest will be spent on direct payment of various welfare allowances. MNT 96.5
billion of the allowance payments will come from the Mongolia Development Fund. This means
about 12 percent of the state revenue is to be spent on social welfare allowances. Following the
revelation that more than half of the population receives at least one form of welfare allowance,
some international organizations began referring to Mongolia as ―a country of welfare‖. The money
for the allowance comes from taxes paid by 21,900 employers and 971,500 employees, which means
10. every taxpayer helps pay for 1.5 citizens who don‘t make any money.
The Government has said it is aiming to merge all social welfare allowances and will restrict them
to the more vulnerable, but the budgeted allocation does not reflect this. This means the weight on
the taxpayers has not been lifted. Instead, the Government has proposed to increase the social
insurance payment by three percent to 23 percent of everybody‘s salary.
The poverty percentage has to be halved by 2015 if Millennium Development Goals are to be met.
The Government‘s policy will achieve precisely the opposite result. While so much money will be
spent on social welfare, only MNT16.5 billion has been made available for programs meant to create
jobs and MNT5.2 billion for small loans from the Employment Encouragement Fund.
Source: en.News.mn
MNT78 BILLION DISTRIBUTED TO 1.3 MILLION CITIZENS
The Social Welfare Fund gave MNT78 billion to 1.3 million people during the first eight months of
the year. The money is given to children, to newly married couples, new mothers, and to senior
citizens, single senior citizens and the disabled. About six percent of the total welfare is given to
disabled people while 27 percent goes to children, 21 percent as pension, 16 percent to new
mothers and new families, and 16 percent to mothers and elders with special state recognition.
Another five percent is given as cash allowances and the rest goes to pregnant women and mothers
with infants.
Source: Udriin Soniin
MEDICAL PRACTITIONERS TALK OF STRIKE
Medical practitioners have urged the Government to spend more money on providing health services
if a crisis of national proportions is to be averted. Budgetary allocations to the health sector, in
terms of GDP percentage, have been decreasing in recent years. If this is not raised and if their
salaries are not increased, doctors may be forced to go on strike.
Over 6,000 members of the medical doctors‘ union have signed a letter to Parliament and the
Government spelling out their grievances and demands.
Source: www.news.mn
NEED TO STREAMLINE AND IMPROVE WORK AT BORDER PORTS
Following a visit by a group of MPs led by Deputy Speaker G.Batkhuu to several border posts, Mr.
D.Tseveenjav, Head of General Customs, was summoned to Parliament to give information on how
customs and trade laws are implemented. This assumes special importance as Mongolia continues to
be heavily dependent on imports that pass through these border posts. Mr. Tseveenjav deposed that
working conditions and facilities need to be improved in a big way if international trade is to be
effectively monitored. There are 169 registered Chinese entities to export products, but most
Chinese imports into Mongolia are handled by individual and unorganized Mongolian traders who do
not deal with them. This makes comprehensive control difficult.
Several MPs regretted that the country still does not have proper regulations governing foreign
trade and feared this lack could jeopardize national security. Things have not changed much since
the end of socialism. Russia uses 29 ports to supply 30% of Mongolian demands, while China uses
only 12 to export double that amount. MPs complained of delays at the border ports and suggested
that foreign expertise be used to streamline their work.
Read more…
Arguing that inflation rises not only when there is excess money in the market but also when supply
of goods does not meet the demand, several MPs said quicker and more regular movement of goods
through border ports has to be ensured. This does not depend on Mongolia alone and both
neighbors‘ cooperation should be sought. Russia wants to close some of the ports but China wants
to open new ones, not only for trade but for tourism also.
President Elbegdorj has also asked for more efficient work at ports as Mongolia survives because of
its foreign trade. Everybody‘s mindset needs be changed as development of strategic mining will
change the entire concept of exports.
Source: Ardiin Erkh, Zuunii Medee
11. HERDSMEN RECEIVE MNT24.6 BILLION FOR UNSOLD CASHMERE
According to figures released by the Government, herders have received MNT 24.6 billion for their
unsold cashmere at the rate of MNT 5,000 per kilo. Exempting herders from paying personal income
tax has also benefited them to the tune of MNT11 billion.
Two recent decisions are also expected to help the herder economy. They do not have to pay
export tax on cashmere any longer and the export can go through all ports now, instead of a
selected few.
There is some criticism that all this money could be better used to create jobs.
Source: Undesnii Shuudan
XINJIANG STARTS IMPORTING COAL FROM MONGOLIA
The Xinjiang Uighur Autonomous Region in northwest China has for the first time imported coal
from Mongolia. Officials at the local frontier station authority say the 260 tons of coal that arrived
last week was just the first step in a plan to annually import more than 2 million tons of resources,
mainly coal, from Mongolia through the Takixken port, which will help promote the border trade
and the region's economic development.
Source: Xinhua
90% OF SME DEVELOPMENT LOAN AMOUNT DISTRIBUTED
About 90% of the MNT30 billion earmarked to be given as loans to small and medium enterprises has
been disbursed to 1,350 applicants. Some of the money allocated to less populated provinces like
Dornod and Govisumber was transferred to areas where demand for credit was higher and that in
some way contributed to the quicker disbursal. A rough survey has revealed that 80% of the
borrower entities have become tax payers with their rise in income.
Source: Zuunii Medee
MNT10-BILLION MONGOLIAN MORTGAGE CORPORATION BOND SUBSCRIBED IN ONE DAY
MNT10 billion of the MNT 25 billion bond registered by the Mongolian Mortgage Corporation (MIK)
with the Financial Regulatory Commission (FRC) on September 18 was fully subscribed on the same
day. The initial investors include the 10 commercial banks that hold shares in MIK, Trade and
Development Bank (TDB), Capitron Bank and Xac Bank. The proceeds of the bond were immediately
used to purchase an equivalent amount in mortgages from the three banks in back-to-back
transactions. This is the culmination of four years of collaboration between the Mongolian banking
community, USAID and MIK and represents the first issue of a fully registered tradable medium-term
bond in Mongolia. This is a major step in the development of Mongolia‘s capital markets which will
eventually create longer term sources of funds and liquidity to finance home construction and
ownership at more affordable rates.
From the time of the acquisition of its first mortgages in November 2007, MIK has been able to
operate profitably while developing its capacity to evaluate, purchase and manage an increasingly
larger portfolio. The registration of this MNT 25 billion bond positions MIK to provide much needed
liquidity to Mongolian mortgage markets while helping to develop the Mongolian capital market by
providing an attractive opportunity for investors to participate in the success of Mongolia‘s first
second-tier mortgage company.
Read more…
Ten commercial banks and the Central Bank signed the Founding Agreement for MIK in 2006, with
all the signatories contributing MNT1 million towards the initial capital. It was decided that the
core activity of the institution would be to lay the groundwork for secondary mortgage market
development; and raise medium- to long-term funds both through the sale of its securities or as a
direct borrower itself. The company would also collaborate with the Government on legal,
regulatory and institutional issues necessary to promote the development of the primary and
secondary mortgage markets; standardize underwriting policies and documentation for issuance of
loans on the primary mortgage market; conduct open market activities to support its core
activities; provide services on securities; and effect foreclosure of mortgaged items.
A special meeting of shareholders in June 2007 approved further capitalization to the tune of
MNT2.2 billion, which was fully subscribed by the existing shareholders.
Source: EPRC newsletter
12. BHP CHAIRMAN ASKS CHINA TO GET OVER HOSTILITY
BHP Billiton acknowledged last week that it and other iron-ore producers had at times upset their
major customer China and said that Beijing realized it had "to play with the big boys". In a parting
shot at Chinese anger over high iron ore prices and over BHP's plans for a USD116 billion iron-ore
joint venture with rival Rio Tinto, outgoing BHP chairman Don Argus said China needed to get over
any hostility. He echoed comments by Australia's Trade Minister Simon Crean, saying China should
play by international rules. "If you're going to play in this game, then you've got to play with the big
boys -- and they know that," Mr. Argus added.
BHP and Rio announced their joint venture plan in June after Rio scrapped a proposed USD19-billion
tie-up with state-owned metals conglomerate Chinalco. Mr. Argus said BHP's China business
continued normally, despite strained ties between Australia and China after the arrest of four Rio
staff in Shanghai on commercial-espionage allegations. BHP and Rio recently scrapped a plan to
jointly market up to 15% of their combined production in a move that was widely seen as an effort
to allay concerns among Chinese customers and the European Union.
Mr. Argus is due to retire in early 2010 after more than ten years as chairman presiding over the
group's transformation into the world's biggest miner. He will be replaced by former Ford Motor
chief Jac Nasser.
Source: Reuters.com
ECONOMIC RECOVERY, WEAKER DOLLAR COMBINE TO BOOST GOLD
The combination of a stronger global economy, an unchanged policy stance by the major central
banks, and a weakening dollar increased demand for gold as a store of value in the third quarter,
the World Gold Council said in the latest issue of its Gold Investment Digest. The gold price ended
the third quarter at USD995.75/oz on the London PreciousMetals fix, having surpassed the
"symbolic" USD1,000/oz level two weeks before the close of the quarter.
Although the gold market continues to experience more volatility than was the case before the
recession, gold is still one of the least volatile commodities.
Source: www.miningweekly.com
ECONOMIC TROUBLE LEADS INVESTORS TO PLACE FAITH IN GOLD
As the world begins recovering from the worst financial crisis in 70 years, an odd couple of winners
have emerged: stocks and gold. So far this year, the Dow Jones Industrial Average, a bet on
economic recovery, is up 14%. Gold futures, a bet on calamity, are up 19%. The reason: Low
interest rates and heavy government stimulus have poured cheap money into financial markets,
helping both the economy and stocks. But the creation of all that money, together with the U.S.
Federal Reserve's maintenance of near-zero benchmark interest rates and the prospect of heavy
government borrowing to fund deficits, threatens to weaken the dollar and fuel inflation and
economic volatility later.
Already, leaders of China and some oil-producing countries have indicated a desire to diversify
away from unique reliance on the dollar as the world's reserve currency. When governments and
investors lose faith in currencies and fear economic trouble, they turn to gold.
Just a few years ago the idea that paper money was somehow suspect and gold was the best store
of value was the province of a frightened few. No longer. In recent months, gold has been pushed
to new highs as investors who once considered precious metals archaic have been shifting funds in
that direction, to avoid a too-heavy exposure to Western currencies. Plenty of skeptics remain,
among them those who call gold "a greater-fool thing", meaning it is something of little intrinsic
value that people buy when it is booming, in hopes of selling it to a greater fool.
Read more…
Even some of gold's fans are worried it might be getting ahead of itself. On a nominal basis, New
York gold futures have far surpassed their past record of USD825.50 hit in January 1980. Adjusting
for inflation, however, gold would have to double to USD2,291.55 to reach its 1980 high, which its
supporters believe means it could go much higher before becoming expensive compared with its
price during other troubled times.
People no doubt will keep arguing about whether gold is a legitimate currency. Either way, gold has
done well in periods of economic and financial difficulty, such as the 1970s, when the dollar was
weak, inflation was high, and confidence in government was low. Gold began its latest climb in the
period from 1999 through 2001, as government surpluses turned to deficits, the U.S. was hit with
13. the Sept. 11 terrorist attacks and confidence in the financial system was wavering. The financial
crisis that followed Lehman Brothers' collapse last year created still more interest in gold.
Source: The Wall Street Journal
POLITICS
SU. BATBOLD TAKES OVER AS PRIME MINISTER
Mr. Su. Batbold became the 26th
Prime Minister of Mongolia when he received his seal of office on
Thursday afternoon after Parliament had accepted the President‘s proposal to confirm him in the
post vacated by Mr. S.Bayar. Earlier President Elebgdorj had received notification of Mr. Batbold‘s
nomination by the MPRP plenum yesterday and forwarded it to Parliament.
Parliament met at 4 p.m. and 93.9 percent of the 66 MPs present ratified his nomination. President
Elbegdorj watched the proceedings, while Mr. Bayar took part in them. The new Prime Minister
promised to continue with the coalition Government and pledged to follow Mr. Bayar‘s policy of
Five Perfections.
The 46-year-old Su. Batbold was the Foreign Minister in Mr. Bayar‘s government. Educated in
Moscow and London, he is also one of the country's wealthiest men. He headed the Altai Trading
Co. Ltd. between 1992 and 2000, forming a gold mining joint venture with Canadian Centerra Gold
Inc.
At the MPRP plenum on Wednesday evening, all but one of the 180 who were present voted for Mr.
Batbold after outgoing Prime Minister S. Bayar, in his capacity of party chairman, proposed his
name.
Read more…
The nomination followed the approval of Parliament earlier on the day of Mr. Bayar‘s request to
step down as Prime Minister for health reasons. Mr. Bayar has previously sought treatment overseas
for liver problems due to a hepatitis C infection and was hospitalized again last week in
Ulaanbaatar.
Mr. Batbold is expected to continue the party's broadly pro-mining policy, the political risk
consultancy Eurasia Group has said in a research note. "However, he may also be more inclined to
balance growing Russian and Chinese interests in the sector by accommodating Western investors,"
the note said.
Source: en.News.mn, Associated Press (AP)
“KEEP THE CABINET AS IT IS,” BAYAR PLEADS IN FAREWELL SPEECH
After a year and ten months of using the special door meant for dignitaries, Mr. S.Bayar left
Parliament on Wednesday afternoon by the door used by ordinary MPs, quipping to journalists, ―I‘m
still an MP.‖ This was minutes after Parliament had accepted his resignation, and nominated First
Deputy Prime Minister N.Altankhuyag as acting Prime Minister until a successor to Mr. Bayar was
confirmed.
In his farewell speech as Prime Minister, Mr. Bayar said he was ―not feeling sad‖ at leaving office,
―but I do regret that I haven‘t achieved all that I hoped‖. He felt ―guilty that my health should
force me to quit before I finished my course‖, but ―nobody can escape illnesses‖, even if ―it is seen
as my fault that I did not take enough care of myself‖.
He said it had not been easy to take the decision to resign, but he had no doubt ―this was the right
thing to do‖ as whatever job one does should be done properly, and there can be ―no compromise
when the job is that of the Prime Minister‖. He believed in the principle that way has to be made
for someone else ―as soon as one realizes one can no longer give of one‘s best‖.
Mr. Bayar identified the two high points of his tenure as the formation of the coalition government
and finalizing the Oyu Tolgoi investment agreement. ―I have no doubt that a joint government was
the right thing to do. Much of what we have done was possible only because both parties agreed on
them. This unity must be preserved. You will get a new Prime Minister, but the Cabinet should be
left untouched. That is my final plea to you as Prime Minister,‖ he said.
Source: en.News.mn
14. MONGOLIA WILL MISS BAYAR’S AURA OF AUTHORITY
Mr. S. Bayar's resignation as Prime Minister of Mongolia couldn't have come at a worse time. Having
secured a potentially transformative deal -- a USD4 billion project with Ivanhoe Mines and Rio Tinto
to develop the copper and gold mines of Oyu Tolgoi -- the hope was that Mr. Bayar would be able to
execute a quick succession of similar investments.
His early retirement could dash those hopes. Finding a figure with similar political authority to get
these deals done won't be easy. Mongolia doesn't have a deep bench of capable politicians. What it
does have is substantial reserves of coal and uranium, as well as more copper and gold. To tap
these, the Government had been targeting USD25 billion of investment over the next five years.
The Oyu Tolgoi deal is notable and a significant one, too, for commodities markets: the mine‘s
annual copper production could equal 3% of world supply, Global Insight says. Mr. Bayar was
instrumental in knocking enough heads together to get the deal done.
Read more…
His absence now may frustrate foreign investors keen for exposure to Mongolia's resources, but it's a
more serious concern for the country itself. Given the poor state of its public finances, Fitch
Ratings rates Mongolia's debt at "B" -- below that of Papua New Guinea, for example.
The country faces tough negotiations with major mining companies, private equity firms, the
Russian Government, and China's sovereign wealth fund, to name just a few of those already
sniffing around. Mongolia needs all the talent it can get.
Source: The Wall Street Journal
FIVE REASONS TO THANK BAYAR
The country has five sound reasons to thank Mr. S.Bayar for his stewardship. First, he was the
guiding force behind the final agreement on Oyu Tolgoi being reached and signed. Second, he
persuaded the coalition Government to approve the amnesty law, thereby removing a major area of
contention between the two political parties, and also soothing national nerves. Third, he saw to it
that Mongolia survived the economic recession no worse than it did, with Anod Bank the only bank
to go under. Fourth, he spearheaded the ―Atar-III‖ campaign that holds the promise that
agricultural self-sufficiency is a real possibility. Finally, our thanks go to him for showing that one
does not have to cling to power and for quitting when he found his health would not permit him to
fulfill his responsibilities.
Source: Zuunii Medee
INTERIOR MINISTER WANTS MORE VIGILANT MONITORING OF GOLD MINERS
Stung by criticism that security organizations were not vigilant enough to stop smuggling of gold,
Minister for Internal Affairs Ts.Nyamdorj told the Standing Committee on Legislation that the blame
should fall on the Finance Ministry and the Mineral Ministry. ―It is others who have failed to apply
the law effectively,‖ he said. ―Companies are granted a license on a clear understanding of how
much gold they will mine. If there is any gross discrepancy between this assumption and actual
production, the errant companies are liable to lose their licenses. It is not the job of policemen to
check if companies are violating these laws. Don‘t try to blame me when you are not doing your
own work. I repeat, you have enough powers under the law to control gold companies even if
controlling ninjas may not be possible.‖
Source: en.News.mn
H1N1 VIRUS CLAIMS 4 LIVES SO FAR
The H1N1 virus claimed its first victim in Mongolia this week and the toll soon went up to four, with
the cause of another death not clear. The number of confirmed cases all over the country has
exceeded 400, with large queues at all hospitals waiting to be tested if they have just flu or the
swine flu.
The Government has allocated MNT6.4 billion to be spent on various measures to halt the spread of
the infection. It has imported 4,500 doses of tamiflu from Britain and France, and a consignment of
the World Health Organization vaccine is expected early next month. The autumn recess in schools
was advanced by a week and is likely to be extended. Bars and restaurants have been ordered to
close at 9. The number of pharmacies open for 24 hours has been raised to 48 from 28, while
general practitioners have been asked to extend their working hours until 10 p.m.
An unlikely casualty of the situation has been the three-day international judo world cup
15. tournament beginning in Ulaanbaatar on October 30. This is the first time an international sporting
event of such magnitude is being held in Mongolia, but popular enthusiasm has been smothered by
the Government‘s ban on any event that puts many people together in a closed space. Faced with
severe financial loss, the organizers have been trying hard to get continuous live TV coverage.
Source: www.news.mn
MONGOLIAN POLICE DENY THEY HELPED CHINA SEIZE AND TAKE BACK DOCTOR
Mongolian police have denied media reports saying they had helped police from Inner Mongolia to
seize and take away from Mongolia on October 3 a doctor of Tibetan medicine who was seeking UN
asylum here with his wife and daughter. He had left Inner Mongolia after being involved in a series
of disputes with the Chinese authorities over the right to maintain the Mongolian and Tibetan
characteristics of a medical school he had set up in Ordos city.
Radio Free Asia reported online on October 21 that four Chinese police officers sent from China,
accompanied by more than 10 Mongolian policemen, detained Mr. Batzangaa, his wife and their
nine-year-old daughter as he stepped out of the UN High Commission for Refugees office building in
Ulaanbaatar. He was immediately whisked away to Ordos, without any deportation proceedings
being held, New York-based Southern Mongolian Human Rights Information Center (SMHRIC) was
cited as saying. Mr. Batzangaa‘s wife, released from detention afterwards with her daughter but
placed under house arrest, was notified of her husband‘s formal arrest on October 8.
―Clarifying‖ some details of the incident, Lt. D.Murun of the National Criminal Police Authority has
said they merely acted on a request for help from Chinese authorities to look for a Chinese citizen
who had come to Mongolia, with 52 million yuan that belonged to the local administration. It was
found Mr. Batzangaa, along with his wife and daughter, had entered Mongolia on May 30 with 30
days‘ visa which he had not extended. He had not also registered himself within 7 days of his
arrival, as required by law.
Read more…
Lt. Murun also denied Mr. Batzangaa had been arrested. ―We went to the UN High Commission for
Refugees office with a request to meet with Batzangaa and he came out to talk with the
representative of the Inner Mongolia authorities. We do not know whether he sought political
asylum. After meeting with the officer, Batzangaa wanted to go back to China and solve his
problems with the administration there. He left Mongolia on October 4. We acted strictly according
to our professional responsibilities,‖ he told media accusing them of inaccurate reporting.
Source: TibetanReview.net, Zuunii Medee
MONGOLIA ATTENDS 20-NATION MILITARY CONFERENCE HOSTED BY USA
A four-day conference in Honolulu this week brought together senior military leaders of more than
20 countries to discuss mutual security challenges and to foster security cooperation. Adm. Robert
Willard, commander of the U.S. Pacific Command, hosted defense chiefs or their representatives
from countries like Australia, Canada, France, Indonesia, Japan, Laos, Malaysia, Mongolia, New
Zealand, Pakistan, the Philippines, Singapore, South Korea, Thailand, and Vietnam.
Source: The Associated Press
PRISONERS RECEIVE VOCATIONAL TRAINING TO HELP IN REHABILITATION
Under a program begun last year, about 300 prison inmates have so far been enrolled in training
courses such as construction, tailoring, welding, electric work and blacksmithing to help in their
rehabilitation after release. The courses are for 30-45 days and those who pass a test after this are
issued certificates. The program plans to establish ties with vocational training centers in
Ulaanbaatar, Darkhan, Gobisumber and other places. So far prisoners have helped in the
construction of 72 apartments.
Most of the people in prisons have middle or high school education and about 10 percent are
university graduates.
Source: Ardiin Erkh
BANK EMBEZZLER EXPECTS RELEASE UNDER AMNESTY LAW
Ts.Chimedtseren, who misappropriated MNT14 billion from Savings Bank when he worked as an
accountant there before it was privatized, expects to be released from prison soon under the
amnesty law. According to some people who met him recently, Chimedtseren has been assured that
16. the decision to set him free was imminent. He is believed to have used this money as also MNT200
million he illegally withdrew from accounts for welfare allowances to gamble in casinos in South
Korea. Some Members of Parliament were believed to have shared part of the money, but
Chimedtseren has always insisted he worked alone.
Source: Zuunii Medee
LV STORE OPENS IN GLITTERING CEREMONY
Rumors that Madonna and Justin Timberlake will perform at the inaugural ceremony of the Louis
Vuitton store last week led to a number of the free invitations changing hands for between USD500
and 1,500. Such big celebrities did not show up but the ceremony was a glittering affair, and bands
from Singapore and Hong Kong did play. The President and Vice President of the fashion House were
there and the former cut the ribbon.
Source: Ardiin Erkh
WOMAN WITH ORCHARD IN KHOVD GETS UN AWARD
During her recent visit to Mongolia the Princess of Thailand presented Mrs. D.Tsendsuren, a citizen
of Khovd, an award from the Food and Agriculture Organization of the UN for her orchard. The
award is given to promote agricultural entrepreneurship and this year Mrs. Tsendsuren was chosen
from a field spanning 43 countries.
Source: Udriin Sonin
AN ANTHROPOLOGIST DISCOVERS THE “SECRET LOVERS” OF ULAANBAATAR
Ms. Caroline Humphrey, Sigrid Rausing professor of collaborative anthropology at Cambridge
University, specializes in the anthropology of communities on the edges of the former Soviet Union,
and has found that in Ulaanbaatar well-educated women are combining traditional and modern to
create something that looks suspiciously like a form of polygamy.
Eschewing the traditional gifts, successful Mongolian families are increasingly giving their daughters
a good education in place of a dowry. In contrast, their brothers often have to leave school early to
either manage the herds or run the family business. "In Mongolian culture, the bride's family is the
senior family; and a bride should be clever. And they had 70 years of communism, so the idea that
women should be well-educated is not new," Ms. Humphrey explains. "Since Mongolia, in common
with Russia, also has a problem with alcoholism, there is an imbalance between urban educated
women and the number of men these educated women deem to be suitable husband-material."
The solution is simple: they just don't get married. Instead, they take what is known as a "secret
lover" – usually a well-educated man who just happens to be married to someone else. Any children
resulting from the union are brought up by their mother and the maternal family.
Read more…
"It is completely accepted. These women are among the elite of Mongolian society – they might be a
member of parliament or a director of a company and they are tremendously admired," Ms.
Humphrey says. "An insufficiency of men, educated women who want to realize themselves, rural
women who want to protect themselves, all these things are going to give rise to arrangements like
polygyny, whether it's called that or not."
Source: guardian.co.uk
EXPERTS WORRY AS POPULATION AND HUNGER GROW
Scientists and development experts across the globe are racing to increase food production by 50
percent over the next two decades to feed the world‘s growing population, yet many doubt their
chances despite a broad consensus that enough land, water and expertise exist. The number of
hungry people in the world rose to 1.02 billion this year, or nearly one in seven people, according to
the United Nations Food and Agriculture Organization, despite a 12-year concentrated effort to cut
the number.
The global financial recession added at least 100 million people by depriving them of the means to
buy enough food, but the numbers were inching up even before the crisis, the UN has noted in a
recent report. ―The way we manage the global agriculture and food security system doesn‘t work,‖
said Mr. Kostas G. Stamoulis, a senior economist at the organization. ―There is this paradox of
increasing global food production, even in developing countries, yet there is hunger.‖
Agronomists and development experts generally agree that the resources and technical knowledge
17. are available to increase food production by 50 percent in 2030 and by 70 percent in 2050 — the
amounts needed to feed a population expected to grow to 9.1 billion in 40 years. But the
conundrum is whether the food can be grown in the developing world where the hungry can actually
get it, at prices they can afford.
Read more…
Agriculture was once a pillar of international aid programs, with World Bank figures showing that it
constituted 17 percent of all foreign assistance in 1980. But the emphasis declined as the number of
hungry people dropped to its lowest recent level, 825 million people, around 1996. By 2000,
agriculture aid had shrunk to 4 percent, although it has since ticked up slowly.
Source: The New York Times
ANNOUNCEMENTS
DISCOVER MONGOLIA 2009 - International Mining Conference & Investors Forum
Discover Mongolia 2009 is to take place on November 5-7, 2009 Ulaanbaatar, Mongolia.
―Discover Mongolia 2009‖ International Mining Investors Forum is an ideal podium for mining and
exploration companies, equipment producers and suppliers, investment and banking institutions,
geology and mining academia, professional media organizations, portfolio agencies and
departments to expand and enrich their client network. The Forum, therefore, is designed to
facilitate fruitful business exchanges among its participants through the Mining Conference,
featuring the most prominent minerals projects, Investors‘ Exchange Exhibition, bringing together
the industry brand names in geological exploration, mining and support services, the ―Government
Hour‖ series of meetings with Government officials to respond to various questions and concerns of
investors, ―Geological Session‖ co-organized with Altan Rio Ltd., and a visit to an operating mine or
an attractive deposit.
Rio Tinto, Ivanhoe Mines, Oyu Tolgoi, Monnis, Erdene Gold, South Gobi Sands, Redpath, Geosan,
Khan Resources, Mongolian Energy Corporation and many other mining majors and juniors are active
participants in the ―Discover Mongolia‖ Forum. The Asia Miner and Mining Journal have traditionally
been the Media of the Event and will be on site at ―Discover Mongolia‖ to cover this major mining
event in the very heart of the Asian continent. BCM is again a Supporting Organization for the
event.
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“MM TODAY” ON MNB-TV
BCM is pleased to announce that Mongolian National Broadcasting continues its cooperation with
BCM on ―MM Today‖. This English news program is aired every Friday for 10 minutes and is
scheduled for 9:15 PM tonight. Tune in to watch this program that reports stories from today‘s BCM
NewsWire.
18. SPONSORS
ECONOMIC INDICATORS
MSE WEEKLY REVIEW
For the week ended October 23, 2009, trading activity on the Mongolian Stock Exchange (MSE)
totaled 1,104,400 shares with 42 companies traded. Total market value of transactions was MNT 2.2
billion. Total market capitalization of the 358 stock companies listed on the MSE was MNT 712.7
billion, and increased by MNT 0.9 billion or 0.1% from the previous week.
The Top-20 Index increased by 30.28 points or 0.4% compared to the previous week, closing at
7,510.76 points. The MSE Composite Index decreased by 11.02 points or 0.3% compared to the
previous week, closing at 3,544.58 points.
Most active stocks traded were: Gobi (392,400 shares), Khuh gan (318,300 shares), HB oil (250,200
shares), UID (41,100 shares), and Eermel (34,100 shares).
Major share price percentage gainers were: HB oil (26.6%), Mongol shir (15%), Atar urguun(15%),
Chatsargana (15%), and Suu (15%). Major share price percentage losers were: Inget tolgoi (14.9%),
Mongol savkhi (10.4%), Guril tejeel Bulgan (10%), Bayangol hotel (7%), and Apu (7%).
INFLATION
Year 2006 6.0% [source: National Statistical Office of Mongolia (NSOM)]
Year 2007 *15.1% [source: NSOM]
Year 2008 *22.1% [source: NSOM]
Sept. 30, 2009 *-2.9% [source: NSOM]
*Year-over-year (y-o-y)
19. 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 29, 2009
Currency name Currency Rate
US dollars USD 1427.10
Euro EUR 2115.96
Japanese yen JPY 15.65
British pound GBP 2335.16
Hong Kong dollar HKD 184.14
Chinese yuan CNY 209.01
Russian ruble RUB 48.91
South Korean won KRW 1.20
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.
