Indian delegation identifies forms of cooperation in mining

An Indian government and business joint delegation on the mines sector, led by the seniormost bureaucrat at the Ministry of Mines, Ms. Santha Sheela Nair, visited Mongolia recently. The delegation called on Prime Minister S. Batbold and briefed him about the proceedings of the Mongolia-India joint working group (JWG) meeting and identification of specific issues. Batbold urged the Indian side to aim at mineral-based value addition projects and associated infrastructure development. The second meeting of the JWG would be hold in New Delhi by October this year.

The JWG identified five different forms of cooperation to be pursued to achieve mutually beneficial results. They are: first, technical cooperation between the Geological Survey of India and its Mongolian counterpart in the areas of training, satellite based mapping, targeted surveys and studies; second, technical cooperation between the Indian Bureau of Mines and its Mongolian counterpart in the areas of mineral processing, laboratory scale studies and training, information sharing and computerized ore body modeling; third, formation of a consortium of Indian companies from both the public and private sectors to seek mining and mineral concessions from Mongolian authorities for exploration and/or development; fourth, possible formation of joint venture companies among Government of India backed companies and development of mineral and mining assets including uranium and coking coal; and , fifth, conducting studies on infrastructure issues associated with development of mineral resources.

Minister for Mineral Resources and Energy D.Zorigt wanted participation of Indian companies in different sectors, and the Deputy Minister for Foreign Affairs and Trade, B.Bayarbaatar, pledged the support of his Ministry to facilitate movement on the issues identified.

The delegation also visited the Mongolian University of Science and Technology, where the University President expressed interest in collaborating on mining and geology R&D projects, exchange of scholars and students and industry specific research.

Mongolia Celebrates Sports Day in UB

Mongolian Sports federation celebrated Sports day on June 25, 2010.

They demonstrated the marching parade at the Sukhbaatar Square; also, the federation distributes flowers to athletes and accounted their success and victory in future.

There were many champions of continent and world, leading trainers and sport’s lover gather at the Square. Also, as a festival, there were organized closing ceremony of the 4th National sport festival, and it was become more splendor.

In addition, they played their gala concert in the National Academic Theatre of Opera and Ballet. In a festival Prime Minister, S.Batbold and S.Lambaa, Member of Parliament and minister of health handover cash award of MNT 336 million to famous Mongolian athletes, Kh.Tsagaanbaatar, S.Nyam-Ochir, E.Enkhtor, Ch.Yondon, M.Munkhmaa, Ts.Munkhzaya, D.Tumurkhuleg, Ts.Munkhzul, S.Miyaragchaa, T.Batchimeg and M.Badralmaa. In addition, 88 sports men became the best employee of sport federation, Association of National wrestling, archery and ankle-bone shooting organized successfully the 4th National sports festival, was awarded by the Mongolian State Committee of Physical Culture an Sports
source: The UB Post

Mongolia coal railway to link with Russia

Mongolian lawmakers have approved plans for a rail line linking with Russia to help tap large coal deposits in the south, the latest move in the long-delayed project that will help make the poor but mineral-rich nation less dependent on exporting to China.

The landlocked country of 2.7 million people is trying to retain more of its natural wealth from its huge mineral deposits, including copper, gold and coal. Plans to expand output and open new mines have stalled as the government struggles to re-negotiate terms on mining concessions with big foreign companies.

The huge Tavan Tolgoi coking coal deposit in the south Gobi region, estimated to have more than 6 billion tons of coal, has attracted interest from 10 international mining companies including China's Shenhua Energy, a Russian consortium led by Gazprom, and Australia's BHP Billiton.

Lawmakers on Thursday voted nearly unanimously in favor of building the line and making it broad gauge, refering to the distance between the rails, so it could link up with Russia's rail network. There were concerns that if the rail were standard gauge like China's rail system, too much of the commodity would end up flowing to coal-hungry China at bargain prices. China currently takes about two thirds of Mongolia's exports.

The deposits are located only about 200 kilometers (124 miles) from the Chinese border but Transportation Minister Battulga Khaltmaa said Mongolia would rather sell processed coal to Japan and South Korea. "The policy will greatly boost the economic development of Mongolia. Instead of shipping raw materials directly to one market, jobs and value-added production will be created in Mongolia," he said.

The 1,100 kilometer (683.54 mile) railway will connect Tavan Tolgoi to the Russian border, the minister said. The country will invite international bidding for the railway's construction, which is expected to be completed in two years.

Tavan Tolgoi was discovered in the 1950s, when Mongolia was a Soviet satellite. The country made a peaceful transition to democracy in the early 1990s.

Mining giant BHP Billiton earlier held rights to the project but judged the deposit too expensive to develop.

Mongolian studies being promoted abroad

Dr. Anna Tsendiin continues in her father’s research
In the past, Mongolian studies were centered in Russia but now are moving in the direction of Hungary, Germany and within Russia to Buryatia. Dr. Anna Tsendina, a professor and researcher of Institute for Oriental Cultures and Antiquity, Russian State university for the humanities, characterizes the direction and orientation of Mongol study in this way. According to her findings, Mongol study or the investigation and research of Mongolian history and culture has been seriously weakened.
Anna is the daughter of well-known Mongolian liguist and writer Tsendiin Damdinsuren . The Mongol Messenger talked with Doctor Anna Tsendina about the past, present and future of Mongol study and her research works.

-Your book, “Tsendiin Damdinsuren”, is devoted to the centenary anniversary of your father. What kinds of research are covered in your book?

In his last years, my father studied much the Shambala. He investigated and studied whether Shambala was a real land, whether there was any historical foundation for that, or was it an abstract idea. He wrote several articles that were included in the book. My father and researchers from a number of countries were involved in comparable research. In my book,I included articles of foreign researchers who had a similar theme as my father’s. My father’s own letters and reminiscences are an important part of the book.
-How should we understand the Shambala?
-Historic foundations for the existence of Shambala have been found. Shambala is related with the sutra of the time wheel. Unfortunately my father didn’t complete his study.
-Russia is one of the countries traditionally engaged in Mongol studies. What is the situation today?
-Mongol study in Russia is powerful. Russia became interested in Mongolia, and began studying Mongolian language and Mongol sources 200 years ago, around the end of the 18th century. St.Peterburg has a rich Mongol book collection. By the end of the 19th century, there were many reputed Mongolian scholars who relied on this collection. None of them were left after the turbulent years of the 1930s. Oriental study suffered greatly in this period as well. Certain parts of traditional studies have been interrupted and a new direction appeared. This was the investigation of the new era. Everything related with the past was considered as capitalist and outdated. It was so difficult for me in 1984 to defend my scientific thesis on religion, but only because I was the daughter of a celebrated scientist would they allow me to defend my thesis. Today Mongol studies are developing, but with the proportion changed. In the past, Mongol studies were strong in Russia and America. But today, the centre of Mongol study moved from Russia to Hungary, Germany and within Russia to Burytia. As far as Russia was concerned, the biggest research centers and institutes operate in Petersburg, Buryatia and Kalmyk republic. While classic Mongol studies develop in Saint Petersburg, contemporary Mongol studies dominate in Moscow.
I wouldn’t say that Mongol studies are being liquidated, but the classic study of Mongolia or the investigation of the Mongolian history and culture has significantly shrunk in Russia and Europe. I think the situation is different in Japan and China.
-What is the reason for that and what steps should be taken to develop it successfully?
The policy of the State is important. For example, Russia is not paying due attention to humanitarian branches, nevertheless it is interested to study Mongolia. However, because of insufficient wages and finances, many of those who would otherwise continue with Mongolian studies go into other fields. The Mongolians themselves must influence Mongol study. I think that people who want to write about Mongolia and to study this country can be found without difficulty.
-What are you studying now?
-Together with Mongolian researcher R.Otgonbaatar, we started a project to study new manuscript discoveries that were found in North Mongolia.
Inner Mongolian resource study continues because there is more funding from a variety of sources and almost all their original texts are being investigated and published.
But the original texts, literature and the book printing blocks which are available in Khalkh Mongolia were not investigated. So, I intend to work on the general characteristics of the original texts.
source: The Mongol Messenger

China Daily interviews Mongolian PM

On June 22, Prime Minister S. Batbold was interviewed by journalists of ‘China Daily’ newspaper in connection with the paper’s pending special edition about Mongolia. In the interview, the Prime Minister underlined that the mechanism for bilateral high-level meetings plays an important role to develop Mongolia-China ties and cooperation and bring them to a higher level.
He also reported that Chinese Premier Wen Jiabao’s visit to Mongolia, paid in early June, contributed significantly to bilateral relations and cooperation; especially for solving definite matters of economic collaboration.

The PM said that during Mr. Jiabao’s visit, the two sides agreed to strengthen cooperation in areas including mining, infrastructure, culture and education, and to increase trade volume. The Chinese side promised to give assistance proposed by Mongolia in matters such as deep process mining and agricultural raw materials and distributing them to Chinese and third markets, increasing logistics and transit transportation, the Prime Minister said.
Mr. Batbold said the two countries have great opportunities to cooperate in manufacturing valueadded products and developing infrastructure, providing jobs in the agriculture sector, and especially for founding an enterprise that produces final products.
Regarding the business environment, he said the Mongolian government would continue its open policies and would strictly obey laws, more actively support key sectors by tax and financial policies, encourage the development of socially responsible enterprises with environmentallyfriendly technologies, and concern for regional development.
source: The Mongol Messenger

New maternity hospital planned

Mothers are hopeful to give birth in a more secure and comfortable environment. Government head and Health Minister promised that a new maternity hospital would be built and current maternity hospitals will be modified by next year. After seeing the maintenance work and activity of Maternity Hospital #1 on June 18, Prime Minister S. Batbold said, “I met mothers and they are satisfied. It is the start of our works to be implemented for the health of mothers and infants.

It is planned to build a new maternity hospital that will be implemented through stages. The required budget of Tgs19 billion was included in this year’s budget to maintain Maternity Hospital #2 and to build a new hospital. The Health Ministry was assigned to manage fast and quality construction of the new maternity hospital.” He also stated there much to be done in the health sector. Infants became infected due to a sewage leak in Maternity Hospital #1.
Pregnant mothers and patients were transferred to other hospitals and the hospital’s activity was halted from January 18, 2010. After three months maintenance work, medical services and treatments resumed at the hospital.
Despite growing number of births in recent years, there have been no new maternity hospitals, currently operating hospitals have not been substantially maintained, and the maternity hospitals operate over capacity. It causes unsanitary conditions in the hospitals and some cases of infectious disease occur. During that period, the Prime Minister told MPs that conditions are alarming and infant’s infectious disease may occur because the space per an infant is smaller by three-fold than the standard due to increased density at maternity hospitals and not having a new hospital.
Maternity Hospital #1 was put into operation in 1959 and was enlarged in 1971. The enlargement section (11,000 sq.m) of the hospital was completely maintained and sanitation and ventilator systems suitable for the hospital were installed. The maintenance work cost a total of Tgs2.1 billion. The hospital has 240 beds. It was resolved to build a new one and replace the old two story section of the hospital instead of maintaining it. Health Minister S. Lambaa said that a modern 8-story maternity hospital will be built.
source: The Mongol Messenger

Pronouncement - Oyu Tolgoi mine

BNP Paribas and Standard Chartered have won the mandate to work on the $4.6bn Oyu Tolgoi copper and gold mine scheme being developed by Ivanhoe Mines and Rio Tinto in Mongolia. The two will work on structuring the proposed 1.2 bn B loan part of the debt financing backed by the EBRD and the IFC. The decision on the two will now need to be approved by the project company’s board.
The EBRD and the IFC are considering providing a two-part debt package in a limited- recource project financing consisting of up to US$300m each as part of a group of primary lenders and mobilising of a further $1.2bn from
commercial banks under a B loan structure.

Ivanhoe Mines has received expressions of interest from export credit agencies to provide up to a further $500m in direct financing.
Canada’s EDC is likely to be involved. Other agencies could be US Ex-Im and KfW. In addition, it is believed the Oyu Tolgoi funding package could include a Chinese bank tranche totalling $1bn. However, the eventual size of all the tranches in the deal will depend on what can be raised in the
market at the time of financing. It is not expected that the deal will be in the market officially until at least early next year.
The financing options are complicated by the scheme being essentially two projects - a surface operation and an underground mine. If both were financed together,the project would take seven years to complete. It
might be easier to finance the first phase and then to start producing cashflows. The underground part would enable more export credit type financing to be procured, based on heavy equipment orders.

A total of 13 commercial banks submitted expressions of interest on the deal. Other banks shortlisted for the structuring mandate are believed to have included
Credit Agricole, ING, HSBC, SG and Standard Bank. Hatch Corporate Finance is advising Ivanhoe. It is possible that the Chinese will become more involved in the project. Chinalco has a 9% stake in Rio Tinto and Chinese co-operation and involvement would also be politically sensible, albeit politically sensitive.
While the project is expected to send its output to China, political issues
surrounding Inner Mongolia have strained relations between Mongolia and China. The
Mongolian government is aiming to list the Oyu Tolgoi mine on the local and international stock markets, Sugar Dulam, chairman of the State Property Committee of Mongolia, said at Frontier Securities’ Mongolia Capital Raising Conference earlier this week.
Oyu Tolgoi will be one of the largest and highest-grade copper-gold mines in the world. According to the company, securing the
proposed financing package and combining it with possible additional subscriptions of more than $1bn through existing agreements with Rio Tinto and the funds from its cash position earmarked for project development expenditures - would advance construction of the Oyu Tolgoi mine.
The recently released 2010 Oyu Tolgoi Integrated Development Plan (IDP-10)
estimated that the initial capital cost required to acheive first production from the open-pit mine on the Southern Oyu deposits was US$4.6bn. This amount includes $1.1bn to be spent advancing underground development at the Hugo North Deposit in preparation for the start of block-cave mining following the start of production from the open pit.
source: The Mongol Messenger

Khan Resources prepares suit against Mongolia, claiming licences taken illegally

TORONTO - Khan Resources Inc. (TSX:KRI) says it's pursuing legal action to recover what it alleges was "illegal expropriation" of its uranium licences in Mongolia and has hired a Washington, D.C. law firm to handle the case.

Crowell & Moring LLP will start international arbitration proceedings against the Mongolian authorities, pointing to the Mongolian Nuclear Energy Agency in particular, the Toronto-headquartered company said Tuesday.

The dispute revolves around claims the agency has no legal authority to invalidate a mining licence held by Central Asian Uranium Company, a subsidiary of the Canadian firm.

"Khan believes that it has a strong case and intends to seek a substantial damages award that reflects the significant value that Khan has created in the Dornod Uranium Project, as demonstrated by the definitive feasibility study completed in March 2009," the company said in a release.

Khan has previously suggested the nuclear agency may be acting for political reasons in order to transfer all the mineral rights within the Dornod uranium region to a company that would be owned by Mongolia and Russia.

"Khan and its legal counsel intend to vigorously defend its rights and interests, including pursuing all available rights and remedies in Canada, Mongolia and elsewhere, as necessary," the company added.

Khan Resources also announced Martin Quick is retiring as the company's CEO.

Quick will remain as a director of the company, and will be replaced as chief executive officer by Khan director Grant Edey on an interim basis.

The company said Quick originally planned to retire last fall, but agreed to stay on during recent takeover bids, which included a $51.8-million bid from China National Nuclear Corp. that expired after the Chinese company failed to get regulatory approval from its government.

Petro Matad spuds Davsan Tolgoi-1 exploration well in Mongolia

Petro Matad says that the Davsan Tolgoi-1 (DT-1) exploration well was spudded at 2 a.m. Mongolian time on 23rd June (1900 hours on 22nd June 2010, BST).

The DT-1 well is being drilled vertically to an estimated target depth of approximately 1440 metres.The well is being drilled in accordance with the Company's drilling contract with Chinese operator Ansai Yuehua Oil Tech Company Ltd ("Ansai Yuehua"). Drilling operations are expected to take approximately 30 days and a further announcement will be made once drilling is completed.

DT-1 is the first exploration well to be spudded as part of Petro Matad's2010 drilling programme on itsProduction Sharing Contract on Block XX in Eastern Mongolia, one of three exploration blocks owned and operated by the Company in Mongolia

Additions to the Petro Matad team Petro Matad has secured the services of Mr Frank Witteman as Wellsite Geologist and Petrophysicist for the plannedthree-well programme. Mr. Witteman was Lead Wellsite Geologist and Petrophysicist on three of the initial SOCO plc discovery wells in the Tamsag Basin.

The Company is contracting global oilfield services group,Weatherford,to undertake certain functions within the drilling programme. Weatherford Chinawill be engaged to acquire an advanced wireline log suiteand Weatherford Laboratories, based inHouston, Texas will be used for petrologic and geochemical analysis. Waanders Palynology Consulting, based in California, will be engaged to undertake biostratigraphic analysis of well samples.

Foot and Mouth Disease Outbreak in Mongolia

Dornod province of Mongolia alone has destroyed 1,308 animals infected with highly contagious foot and mouth disease, the Government spokesperson stated this week.

In three eastern provinces of Dornod, Sukhbaatar and Khentii, burying of infected herds and disinfection measures are being taken by local authorities in an attempt to contain the high risk of disease not spread into major urban settlements especially Ulaanbaatar.

A strict quarantine regime was imposed in some part of the provinces, no animals are allowed to graze out of the area. Dornod province, according to preliminary conclusion by authorities, especially its Khalkh Gol, Matad, Bayantumen, and Bulgan soums, were a focal point of the infection.

Administration of Ulaanbaatar city earlier banned trading of live animals and meat products with those three provinces. Also, western provinces have banned to get breeding animals from those three provinces in next two years.

All vehicles are getting close screening and disinfection at the major vehicles checkpoint in Bayanzurkh where it has lately saw reinforcement by police and veterinary officers.
The Government of Mongolia decided to spend MNT330 million for the strict measures to contain the disease outbreak.
source: The UB Post

Red Hill Energy Inc.: Drilling Completed at Prophecy's Chandgana-Khavtgai Coal Project, Updated NI 43-101 Resource Report Is Expected by August

VANCOUVER, BRITISH COLUMBIA, Jun 21, 2010 (MARKETWIRE via COMTEX) -- Prophecy Resource Corp. ("Prophecy" or the "Company") (CA:PCY 0.57, -0.01, -1.72%) (PINK SHEETS: PRPCF)(FRANKFURT: 1P2) is pleased to report the successful completion of its spring exploration program on its 100% owned Chandgana-Khavtgai license in Khentii aimag (province), Mongolia. The work program consisted of 12 drill holes for a total of 2,205 metres including 903 metres of core drilling, and five lines of seismic geophysical survey for a total of 7.4 line km.
The focus of the current work program is aimed at increasing the confidence in the inferred Mineral Resources such that they can be elevated to the Measured and Indicated category. The drilling confirms that nearly all of the resource is contained in a single 18-60 metre thick coal seam found 10 to 250 meters below the surface and covering an area of approximately 1,800 hectares. Further, preliminary results indicate the coal resources and coal quality will be confirmed and the geological limits to the resource are more accurately mapped.

An existing Mineral Resource estimate for Chandgana Khavtgai is provided in the Technical Report prepared by Mr C. M. Kravits (2008) available at The Measured and Indicated Mineral Resources are 657 Mt. There is an additional 409 Mt of inferred Mineral Resources.

In addition to Chandgana Khavtgai, Prophecy also owns 100% of the 141 Mt Chandgana Tal coal project which is 9 km away within the Nyalaga basin. Prophecy is targeting a potential 1 billion tonnes of Measured and Indicated coal in the basin. A new NI 43-101 resource report incorporating the recent drilling is expected to be completed in August.

The Changana thermal coal deposits are located near the Mongolian power grid and could fuel a Mine Mouth Power Plant Complex which could provide power to Mongolia, Russia and China. Prophecy intends to commission a Power Plant/Mine complex study this year.

Additional Information on Prophecy's Coal projects

Chandgana Khavtgai and Tal projects ("Chandgana")

The Nyalga coal basin, of which Chandgana-Khavtgai and Chandgana Tal are part, ranks among one of the largest coal deposits in Mongolia. The Chandgana Khavtgai license is located in southeast central Mongolia and is a sister property to Prophecy's 100% owned Chandgana Tal property located 9 km to the northeast. These licenses are contiguous to Vale's largest coal deposit in Mongolia. The Chandgana projects have a combined Measured and Indicated coal resource of 798 Mt with an additional 409 Mt inferred resources.

Assurance-of-Existence Category
Property Measured (Mt) Indicated (Mt) Inferred (Mt)
Chandgana-Khavtgai 187.7 469.3 409.0
Chandgana-Tal 141.3 0 0

The coal at Chandgana is thermal coal that on an air-dried basis averages 10.34% ash, 0.53% sulphur and has a heating value of 4,358 kcal/kg (7,842 Btu/lb). Most of the coal resource is contained in a single seam 18 to 60 meters in thickness with good outcrop access and an average strip ratio of approximately 2.1:1.

Chandgana is only 160 km from the railway and 2 x 220 kV Central Electricity System (CES) transmission line that powers 90% of Mongolia electricity demand and the line which also connects to the Russian Republic. The project is located right in the path of a government proposed Mongolian transmission grid extension. Chandgana is 300 km east of Ulaan Bataar and 400 km from the China border. The project lies only 16 km from the paved Mongolian Highway AO51.

Ulaan Ovoo Project

The Ulaan Ovoo Coal Project is located in northern Mongolia, only 12 km from an established border crossing station with Russia. The project has an NI 43-101 Measured and Indicated Mineral Resource of 208.8 Mt. consisting of 174.5 million tons Measured and 34.3 million tons Indicated and a further 35.9 million tons of Inferred thermal coal. Please see the May 2009 Pre-Feasibility Study conducted by Minarco-MineConsult of Sydney, Australia which demonstrates the economic potentials of the project. This report is available at the Company's profile at .

The coal is of low ash (less than 15%) and sulfur quality (less than 1%) at 5,204 kcal/kg (9,365 Btu/lb). A Coal Quality by Seam Specification prepared by SGS Laboratories is available at Prophecy's website. The average seam thickness over the deposit is 53.9 metres. Ulaan Ovoo is scheduled to start production at the rate of 50,000 tonnes a month in 2010, ramping up to 150,000 tonnes a month in 2011 with a life-of-mine stripping ratio of 2.0:1.

Visit for cross sections of Chandgana Khavtgai, Drill locations, Nyalga basin licenses map, and a map of Mongolia's central energy grid.

This news release has been reviewed and approved by Christopher M. Kravits, PGeo, and a Qualified Person as defined in NI 43-101. Mr. Kravitz has 34 years of U.S. and international relevant coal geology experience. He has been active in Mongolia since 2007.


Prophecy Resource Corporation is an internationally diversified company engaged in developing, energy, nickel and platinum group elements projects. The company controls over 1 billion tonnes of open-pittable thermal coal in Mongolia. In Canada Prophecy owns Lynn Lake Nickel Project, a 10% equity stake in Victory Nickel and agreed to merge with Northern Platinum /quotes/comstock/11v!e:nth (CA:NTH 0.28, 0.00, 0.00%) on June 15, 2010. Mineral resources that are not mineral reserves do not have demonstrated economic viability.


John Lee, Chairman

This news release includes certain statements that may be deemed "forward-looking statements". All statements in this release, other than statements of historical facts, including, without limitation, statements regarding expected production or potential mineralization, the estimation of mineral resources, the realization of mineral resource estimates, interpretation of prior exploration and potential exploration results, the timing and success of exploration activities generally, the timing and results of future resource estimates, permitting time lines, metal prices and currency exchange rates, availability of capital, government regulation of exploration operations, environmental risks, reclamation, title, and future plans and objectives of the companies are forward-looking statements that involve various risks and uncertainties. . Although Prophecy believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. Forward-looking statements are based on a number of material factors and assumptions. Factors that could cause actual results to differ materially from those in forward-looking statements include unsuccessful exploration results, changes in project parameters as plans continue to be refined, results of future resource estimates, future metal prices, availability of capital and financing on acceptable terms, general economic, market or business conditions, risks associated with operating in foreign jurisdictions, uninsured risks, regulatory changes, defects in title, availability of personnel, materials and equipment on a timely basis, accidents or equipment breakdowns, delays in receiving government approvals, unanticipated environmental impacts on operations and costs to remedy same, and other exploration or other risks detailed herein and from time to time in the filings made by the companies with securities regulators. Readers are cautioned that mineral resources that are not mineral reserves do not have demonstrated economic viability. Mineral exploration and development of mines is an inherently risky business. Accordingly the actual events may differ materially from those projected in the forward-looking statements. For more information on Prophecy and the risks and challenges of its business, investors should review its filings that are available at .

"Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release."

Prophecy Resource Corp.
Scott Parsons
+1.604.642.2625 ext 106

Prophecy Resource Corp.
John Lee

SOURCE: Prophecy Resource Corp.

Mongolian Christians want to connect to global body

Mongolia (MNN) ― Though the world's second largest landlocked country, Mongolia is sparsely populated with only 2.9 million people, and less than one percent of Mongolians are Christians.

However, the number is steadily increasing, and believers are excited and vocal about their faith. Through church outreach, 300 home groups have been started throughout the country, and they have sent missionaries to five other countries.

This fervor was evident when earlier this month Global Advance held a Frontline Shepherds Conference. Some 300 pastors and lay leaders attended the conference. Jonathon Shibley of Global Advance said 100 of these leaders felt led to plant a church, and they believe they can do so without leaving their current occupation.

"God had really opened their eyes to: I can stay in my lane of business or commerce and plant a ministry right there within the work of what I'm doing," Shibley said.

Yet, even though these leaders are willing, Shibley said Mongolia still needs many more leaders: "The harvest is ripe, but we need to pray for more workers, and discipleship is a huge key, as people are open to the Gospel they've got to be rooted and grounded in the faith."

To aid in this discipleship and church planting, Shibley said, "We really want to walk alongside them in that effort, so we're going to do our best from our end to send encouragers over from the states and other places who can walk with them in that process."

In addition to sending these mature Christians to guide them in church planting, Global Advance also created a church planting guide in their language, Khalkha Mongolian.

With the leadership and guidance these believers have received so far, they are expanding their vision to more than just a community of believers in their own town, city or even country: "There's a fresh work that's going on there among the Mongolian people: they're so open to wanting to identify and connect with the greater global body of Christ," Shibley said.

Pray for God to call more leaders, in the church and in the marketplace, who will exemplify Christ and disciple new followers.

Also, visit Global Advance's website to support their ministry and the sending of these leaders.

Mongolia, gold and a relaxed yuan - David Hargreaves, Mining Consultant: WH Ireland

A look at the difference between steel industry metals and LME metals, the impact of a relaxed yuan, a bit on precious metals and the outlook for Mongolia

GEOFF CANDY: Welcome to this weeks' edition of's weekly Newswrap podcast and joining me on the line is mining consultant to WH Ireland, David Hargreaves. David it has been quite an interesting week for gold. It hit all time highs again last week and we've seen some relaxation of the Yuan in China and that's been having some impact not only on gold, but on base metal prices as well. If we start with gold though, what has been driving it up to these new highs?

DAVID HARGREAVES: We still have the world's economic worries and therefore gold is popular but we are now allowing or facilitating small people to buy small amounts of gold and we have six billion small people on the planet and they are buying gold at a ferocious rate in the form of small bars and coins such that whilst there is no shortage of physical metal, what we have is a shortage of minting capacity. So it's really quite serious.

GEOFF CANDY: How much of that is happening predominantly in Europe and how much are we seeing it in the likes of Brazil for example and markets like India?

DAVID HARGREAVES: India of course and China, they've always liked gold in any case and this if freeing them up to buy it. One ounce and less than one ounce in denominations, buy 20gr or 10gr worth even. So the major developing world is still doing it but there is quite a lot of it in Europe generally, particularly with the fears over the euro.

GEOFF CANDY: There was a great piece by Frank Holmes that is on the Mineweb website at the moment about the fact that gold is now legitimate and by that he means that the more popular price he is talking about gold investment where there was a big spread in the Sunday Times over the weekend on it and for a lot of investors that usually signals the time to get out of an investment class but that doesn't seem to be the case this time around for gold.

DAVID HARGREAVES: No I don't think so. I have been trying to find a reason why gold should crash. I can't find it right now. The euro crisis is going to take a long time. We still have concerns on the dollar, not just the oil slick, but the dollar generally and as long as we have those currency worries, then gold is going to stay where it is and in particular what is going to happen at the G-20 if the yuan floats against the dollar.

GEOFF CANDY: If we move from gold to base metals now and look briefly at copper, there have been some interesting moves around copper given the relaxation of the peg to the dollar for the Yuan. There is a lot of expectation that the Yuan would strengthen and this caused some obvious movement in the copper price. How is that likely to affect things going forward?

DAVID HARGREAVES: We are having a divergence between the steel industry metals, and the demand thereof, and LME-based metals where copper across the board, copper, lead, tin, wood, zinc, aluminium are extremely weak, very weak indeed in relative terms which tends to indicate that consumer demand is not too good whereas with the steel-industry metals - coking coal, iron ore, theyre going for their lives and my only interpretation is this, that there is nearby consumer weakness and we are seeing that in the car industry but there is tremendous strength in the steel industry looking long term for construction.

GEOFF CANDY: The car industry is something I want to come back to but if we look at aluminium briefly. In your latest update newsletter you talk about aluminium being in serious trouble and talk about the comments made by the President of Chalco, the aluminium corporation of China saying that domestic prices have dropped below the cost of production. What is happening in that aluminium market?

DAVID HARGREAVES: The production of aluminium is in major over supply. Of that there is no doubt. Poor old Rio Tinto must be shaking in its boots at what it did with its aluminium foray a few years ago. So we have a long term production surplus, huge LME stockpile, a massive overhang there which won't present any rise in the near future, but we then have some dangers attaching to the supply of bauxite - its raw material - particularly in Guinea and we are also seeing that Russia and China have an increasing role to play in that China's Chalco, probably the largest smelter in the world, if not the number two and is now crying of course that its selling prices are below its cost of production and this is almost certainly true. So unless it turns off the tap, which it won't want to, I see the surplus aluminium continuing.

GEOFF CANDY: You mentioned car prices earlier and that's clearly going to impact platinum prices because as we know one of the big uses of that metal is for auto catalytic converters in cars. There's been a substantial clear out of stocks or investments in the platinum sector in the ETF sector. What is going on in the platinum sector?

DAVID HARGREAVES: We have to look at automobile demand and the fact that when you store platinum physically as an ETF, there is much more of an opportunity for it to come out if either the price goes up or the price falls, rather than gold. People who like gold, like gold, so I don't see a run on that at all, but I do in platinum at the moment. The Bushveld complex is giving us more and more platinum by the day. Everybody is opening up a new mine, so we are not in danger of a supply fall, unless we are in danger from South Africa itself. So that's the reason why the ratio is closing in, platinum being physical and being an industrial metal, whereas gold, ever the store in value and platinum is not really seen as a store of value.

GEOFF CANDY: David just to close off with now, moving from the metals themselves to the political situations around them. Mongolia is a very resource rich country and there has been some talk in that country about listing their stake in the OYU Tolgoi project that is being developed by Rio Tinto and Ivanhoe and things like the coal deposits Tavan Tolgoi and there has been a flurry of activity from the various exchanges in the region as to who might get those IPOs. Are we likely to see an investment boom into Mongolia?

DAVID HARGREAVES: We might if they have the good sense to look at the models of other nations and put in a favourably economic investment for their performance. If they give a formula which will encourage the miners to come in there, then we will see a real investment rush because as you say it is a very metal-rich country.

Runge opens Mongolian office, wins new contract

Queensland-based mining technology services company Runge has won a significant scoping study contract for a Mongolian mining house just months before opening its own office within the country.

The contract for Oyuny Undra Holdings, which has a Tungsten/Lithium Project in the South East Mongolia, represents the largest single pure technical consulting job won by Runge North Asia business to date.

Continued investment within the region will see Runge open an office in Ulaanbaatar in May.

Runge Asia General Manager for China and Mongolia, Philippe Baudry, says the company will soon be well positioned to expand its support to key contract holders.

“We have been working closely with Oyuny Undra Holdings since January this year, assisting them to bring this mining project up to International JORC Standard,” Baudry says.

“To date we have been providing assistance with assessing the current data, compiling preliminary estimates as well as giving advice on the deposit in terms of the potential risks and opportunities,” he says.

Herders awarded for best practices

Herder receiving award from M. Enkhbold and
Akbar Usmani
Within the scope of the ‘Cash-for-Work’ initiative undertaken by the National Emergency Agency of Mongolia and UNDP Mongolia, awards were given to 54 herders who passed last winter’s dzud disaster with little loss due to careful preparation and hard efforts. On June 10, Deputy Prime Minister M. Enkhbold and UNDP Resident Representative a.i Akbar Usmani met with 12 of these herders at the State House and presented them awards.
The herders have between 250 and 1600 animals and passed the harsh winter with the survival of over 90 percent of their livestock.

The best herders were selected from every soum of Khovd, Dundgobi, Ovorkhangai and Tov aimags where the ‘Cash-for-Work’ initiative has been realized. It is intended to introduce their experience and methods to others so they could maintain their animals.
In line with the initiative, over 2.6 million livestock carcasses were removed in these aimags. It means about 35 percent of the estimated 7.8 million livestock carcasses were removed throughout the country and roughly 20,000 herders received cash up to Tgs300,000, (about USD1.4 million) for their removal works.
It was reported by M. Enkhbold, Deputy Prime Minister and head of the State emergency Commission, Akbar Usmani, UNDP Resident Representative a.i, and B. Batsaikhan, Deputy CEO of Khaan Bank.
Even though herders who lost animals volunteered for this activity, UNDP Mongolia implemented the project for the purpose to help them to get income, reduce health risks and prevent soil and water pollution. Along with being provided cash for work, the 51 soums involved in the project received decontamination equipment and tools.
source: The Mongol Messenger

Japanese media interviews Mongolia’s PM

On June 14, Prime Minister S. Batbold was interviewed by journalists of Japanese television and daily newspapers.
During the interview, the Prime Minister expressed his satisfaction with full partnership relations developing with Japan and reported that Mongolia’s Government made a decision to let the Japanese make 30 days visa-free travel to Mongolia for the purpose of developing relations with the people of two countries, especially to bring tourism to a new level. He followed by saying that this step will create a new opportunity for Japanese tourists to become introduced to Mongolian people, nature, customs and civilization.

Moreover, the PM told journalists, the mining sector’s development would play an important role to move Mongolia to a greater stage of economic development. He said the Government owns 51 or more percent of the Tavan Tolgoi coal deposit and is willing to collaborate under mutualprofitable and fruitful principles with domestic and foreign companies that can introduce environmentally harmless state-of-the-art techniques and technologies, produce valueadded end-products, and create jobs.
Mr. Batbold also said that Mongolia aspires to develop foreign relations and cooperation based on its own potentiality and experience in order to satisfy, strengthen and safeguard international, in particular northeast Asian, security and stability.

‘Demographic window’ contributes to a brighter future

There is a growing demand for a young, professional workforce.

The period when demographic structure of the population becomes younger and the able-bodied number of the population reaches its height is called the ‘Demographic Window’. In Mongolia, the 1980s were the years when the birthrate for the population was very high, the children born in the 1980s are now able-bodied and in the reproductive age category.
In 2008, 28.1 percent of the population was made-up of children of 0 to 14 years and 65.8 percent the people were aged 15 to 59 years, marking a significant change in the age structure, when a favorable period in the ‘Demographic Window’ opened. From the point of view of prospective plans, the share of able-bodied population from now to 2025 is not expected to reduce from 66.5 percent, showing that the demographic window in Mongolia is expected to continue until 2025–2030.
The opening of the ‘Window’ warns us to speed up the country’s economic progress, improve the population’s profit and subsistence level to support the population growth.
A National Consultative Meeting, under the government’s targetoriented framework, was called to increase employment and create new workplaces with the goal to effectively utilize the ‘Demographic Window’ and issue recommendations for legislators and decision-makers to reflect and implement this question in development policy.
On June 9 The National Consultative Meeting was held with the standing committee of Parliament, the UN Population Fund and the Demographic Education and Research Center of the MSU.
If the period of the ‘Demographuc Window’ is successfully utilized, labor productivity will improve, economic growth will speed-up, and the GDP per capita will create a condition for every citizen to save and accumulate money. After a certain span of time, when the ‘Demographic Window’ closes, demographic changes begin with a decline in the population’s aging. In this stage, the budget will experience a greater burden of spending on health and social protection for elders. This was stressed at the opening of the consultative meeting by Ms Arjentina Matawel, UN Population Fund representative. She advised to carefully consider policy and planning of demographic policy; otherwise she said, this might negatively affect the development programs, and scarce budget reserves. Family savings will grow and national investments increase if the burden to feed others is reduced.
Nevertheless, in order to successfully take advantage of the demographic transition period, the government must invest in citizens and enable every person to become a knowledgeable, educated and able-bodied workforce.
In her reports, Minister of Social Welfare and Labor, T.Gandi stressed that in this period, when the number of women of the reproductive age grows, it is important to maintain this rate. She emphasized the need to improve the correlation of relevant branches and sub-branches, to increase production capacity where more people can be employed, and train and retrain professional and skilled workers in branches where they are in great need. In order to be ready for the next demographic generation that will come after 20 years, it is imperative to improve the social insurance structure, develop health and social services favorable to elders, unite programs designed for population growth, improve population research and investigation, and set-up a national committee responsible for population and family development.
A new and big program is being implemented in Mongolia, said Ch.Khashchuluun, chief of National Development and Innovation Committee, this requires a new professional workforce. As of today, more than 47 thousand people are employed in industrial processing branches, but in the coming 5 years the workplace is expected to grow by 10,000 or more to reach 60,000, he said.
In the next 5 years the mining and the processing spheres will be commissioned and according to calculations, more than 20 thousand workplaces will be needed. Some 6800 engineers and technical workers and 33 thousand skilled employees will be required for mining, processing and infrastructure branches where 83 percent of the workforce needs to be skilled and qualified personnel. Ch. Khashchuluun said that population resettlement might influence preparation and employment of the skilled workers and that this problem must be carefully studied.Roughly 115 thousand people are expected to be involved in this migration movement, most of whom are expected to resettle in Umnugobi Aimag.
Over 150 representatives participated in the national forum including Parliament and government officials, aimag and city governors, government agencies, and NGOs who exchanged views and issued policy recommendations.
source : The Mongol Messenger

TT Issues under discussion

Parliament supported ‘in principle’ the draft parliamentary resolution, tender documents and draft investment agreement regarding Tavan Tolgoi coal deposit, submitted by the government, and decided to discuss them.
Parliament is planning to approve the matter during the spring session;
however, the process of discussion is not so speedy. Government submitted the documents to Parliament on May 27 and Parliament made a decision on June 7 to discuss the matter. In the past week, only Parliament’s working group held a meeting.
At its first meeting, the working group which consists of five members from MPRP Group in Parliament and four members from DP Group agreed to hear suggestions and recommendations from MPs, experts, specialists and government and non-government organizations. The working group members plan to go on site and get au fait with Tavan Tolgoi and Ukhaa Khudag coal mines.
D. Damba-Ochir, MP and head of the working group said, “The working group has a very busy schedule and intends to complete combined suggestions and recommendations by July 1. For an investment agreement for Tavan Tolgoi deposit, government must introduce the draft agreement to Parliament and receive a permit. After selecting an investor by tender and holding negotiations with the investor, the draft investment agreement may be submitted this autumn.”
“First of all, a proposal to bring Tavan Tolgoi deposit into economic circulation was based on an ideology to become a developed country with creative people. Also, it includes intensively developing the mining sector’s supplementary industry and infrastructure sector, equally allocating economic profits to 2.7 million citizens in the form of a share, and giving citizens an opportunity to use the share for their needs in health services, education and apartment purchases. Our important goal is to develop value-added production and retain profits in Mongolia. Processing coal of the Tavan Tolgoi deposit is an inseparable part of this project. It will be implemented as real outcome,” stated Prime Minister S. Batbold in his speech introducing the government’s position at the Parliament session. Government worked out a taxation and financial policy in that direction and some bills on amending tax laws with the concept of supporting valueadded production. The Prime Minister said that when a policy is prioritized to develop domestic industries, Mongolia aspires to export the processed coal and outputs of Tavan Tolgoi deposit to markets of neighboring countries and third countries through as many directions and exits as possible.
Besides, a discussion of the issue of a railway, a main condition to implement this policy, is sluggish in Parliament. A meeting of the working group which was scheduled to discuss state policy on railway transport was delayed 6 times due to lack of turnout;
at last it convened on June 15 and then the Economic Standing Committee discussed the issue. Some proposals offered by the working group caused disputes among members and could not get support from the majority. In a draft State policy on railway transport, it states to construct the basic structure for a 5,500km railroad and realize this work in three stages.
In the first stage, a 1770km railroad will be constructed in route to Tavan Tolgoi-Zuunbayan and Sainshand- Baruun Urt-Choibalsan. In the second stage, a 312.5 km railroad will be constructed in route to Tavan Tolgoi- Gashuunsukhait and Nariinsukhait- Shiveekhuren. In other words, although private sectors were given permission to construct a railroad linking to China before; Government prefers the construction of railroad to Sainshand Industrial Park first. However, the working group offered a proposal to combine two stages. R. Rash, head of the working group explained that the working group’s proposal included resolving the issue of linking Tavan Tolgoi with the current railway line with investors to speed up construction of basic railway structure. He added that the working group considers it is necessary to start railroad construction in Dalanzadgad- Tavan Tolgoi-Zuunbayan and Sainshand-Baruun Urt-Choibalsan in 2010. Road, Transport, Construction and Urban Development Minister Kh. Battulga categorically denied it. “The proposal of the working group fails government policy. If we combine the stages, it will be possible to start constructing a 5,500km railroad from wherever at the same time. They must not plan to construct more railroads at the same time with the one in Dalanzadgad-Tavan Tolgoi to be started within 2010. Also the working group proposed that the railroad gauge be chosen based on the Feasibility Study. But the FS for a railroad running to the southern border was already done and it is short tracks with length of 47km and 270km. In this case, there will not be possibility to establish an Industrial Park in Sainshand and have a sea exit.”
DP member Z. Enkhbold said that the DP Group in Parliament backed the draft resolution. Therefore, in case the working group’s proposal is backed, the DP group needs to take a break. But when a voting was conducted, the number of members with opposite opinion was equal. It led to remain statements of the draft submitted by government unchanged.At the plenary meeting of Parliament, proposals of the working group will be re-discussed.
source: The Mongol Messenger No. 234(989)

UN Secretary-General praises Mongolian Soldiers

Ban Ki-Moon, Secretary-General of the United Nations (UN) met with Mongolian troops
Ban Ki-Moon, Secretary-General of the United Nations (UN) met with Mongolian troops who are taking part in peacekeeping operations in Sierra Leone. The meeting was held in scope with a working visit of a delegation headed by the UN Secretary-General paid on June 14 to the Special court in that country.

The delegation was welcomed by the Guards of Honor of the 9th contingent of Mongolian military group. After the ceremony the Secretary-General met with authorities of the Special Court and the United Nations Integrated Peace building Office in Sierra Leone (UNIPSEL). Then Mr. Ban Ki-Moon met with Mongolian troops. He pointed out that Mongolian soldiers are tolerant, highly disciplined and able to adapt to any circumstances and said he is satisfied with the successful service of the peacekeepers. In 2006, former UN Secretary- General Kofi Annan met with Mongolian peacekeepers of the first contingent in Sierra Leone. At this time, 2,000 peacekeepers have participated in the UN peacekeeping operations in the country. This 9th contingent of Mongolia’s Armed Forces consists of 150 troops.
source: The Mongol Messenger

Will desertification stretch the Gobi to UB

Award winning photo taken by N.Duinhar in Dornogobi Aimag dramatizes the reality of desertification
Over 90 percent of the land area in Mongolia is classified as a fragile dry-land and 72.3 percent of which is affected by desertification, says the Desertification Research Center of Geo-ecology Institute. The threat of desertification and its affects are cause for concern and measures to combat desertification have increased in recent years. Mongolia marked World Day to Combat Drought and Desertification on July 17, which Mongolia observes since it became a party to the United Nations Convention to Combat Desertification (UNCCD) in 1996. This year, the Day’s slogan is “Enhancing soil anywhere enhances life everywhere”.
Promotion activities including broadcasting the documentary ‘Desertification Mongolia’, ads, publications in the press, street boards and screens, announcement of photo contest results, a photo exhibition and distribution of brochures on simple ways to enhancing soil were taken to address the increase of public awareness on the causes of desertification, as well as the means to cope with and prevent land degradation and desertification. “The threat of land degradation, and consequent desertification, are becoming a serious obstacle for the growth in Mongolia. It affects the national economy and sustainable livelihoods of the rural population. It results in the loss of livestock,pasture degradation, decreased crop production, increased poverty and migration, especially linked with a dry summer followed by a harsh winter, similar to the one we just experienced. With the last dzud, about 8,700 herder families completely lost their livestock’ said, Ms. Shoko Noda, Deputy Resident Representative of UNDP Mongolia at a press conference. She noted that it is not only Government, who has a conservation role, but every citizen can contribute towards conservation and make a difference to conserving nature, by planting trees, by saving water and energy, and by raising their voice on every occasion where they can make a difference. Mongolia endorsed the National Action Program for Combating Desertification in 2003, which was recently updated in April this year, being streamlined with the new 10-year strategy of the UNCCD. A National Committee to Combat Desertification was established, functioning under the Ministry of Nature, Environment and Tourism, and submitted 3 national reports to the UN. Currently, it is preparing the 4th national report to the UNCCD. As the largest portion of Mongolia’s land is used for livestock grazing and there has been an increasing tendency for overgrazing and degradation in recent years, UNDP’s predecessor projects have been contributing towards effective, community-based management of pastureland. According to scientists research results, aridity increased by 3.2-10 percent in steppe and gobi areas and by 10-15 percent in forests and high mountainous areas. Compared to 1960, dust storm days have tripled in steppe and Gobi areas and Gobi and Great Lakes Depression experience 61-127 stormy days a year. This leads to extend sandy areas as well as a decrease in surface water levels. Overgrazing and degradation due to climate change as well as human activities also cause desertification. Some 887 rivers, 2096 springs and 1166 lakes have dried up since 1970. Overgrazing reached 32.5 percent, or by 16 million sheep. A photo contest was organized by the Ministry of Nature, Environment and Tourism, ‘Coping with Desertification Project’, implemented by the Swiss Agency for Development and Cooperation, ‘Sustainable Land Management for Combating Desertification’ project of UNDP and “Gamma” Photo Agency. The contest aims to raise awareness on land degradation and desertification, and their social consequences, to encourage participation of young people in raising environmental awareness and depict the relationship between affected populations and ecosystems. Over 40 photographs were received in the photo contest among which photographer N.Duinhar won first place.
source: The Mongol Messenger

In resource-rich Mongolia, debate lingers on China ties

"So, while there will be a lot of investment from China, there will be limits to that investment. There will need to be a lot of partnership arrangements with Mongolian companies to facilitate Chinese investment."

China, for its part, has been clear about its economic ambitions in the northern land of windswept grassland.

More than 70 percent of Mongolia's exports went to its southern neighbour last year. China's coal giant Shenhua is pitching for a slice of Tavan Tolgoi, one of the world's largest untapped coal deposits, and CIC, China's $300 billion sovereign wealth fund, has backed Mongolia-focused miners such as SouthGobi Energy Resources Ltd (1878.HK: Quote) (SGQ.TO: Quote).

What's more, the bulk of Mongolia's oil is being produced by Chinese firms and most of the big projects now being developed -- including Ivanhoe Mines' (IVN.TO: Quote) $5 billion copper-gold project at Oyu Tolgoi -- are also counting on surging Chinese demand.


These developments continue to sound alarm bells among Mongolia's political elite as the government formulates investment agreements on strategic assets such as Tavan Tolgoi, and massive rail and infrastructure projects.

Feeding into the debate is Mongolia's determination to forge its own path and shed its historical vulnerability as a landlocked country sandwiched between Russia and China.

"Mongolia has been quite careful about its sovereignty -- we don't want to be too dependent on one country," said Oyun Sanjaasuren, a lawmaker and former foreign affairs minister.

"Theoretically, we want to have a one-third, one-third, and one-third balance," Oyun added, referring to China, Russia and a third country such as Japan or the United States.

Mongolian govt to post security bond for Altantuya's family

KUALA LUMPUR: Karpal Singh who is counsel for the family of murdered Mongolian translator Altantuya Shaariibuu said the Mongolian government had agreed to post a security deposit bond of RM60,000 for the family to enable the Court of Appeal to continue with the compensation hearing.

“They (Mongolian government) have agreed to make the payment before June 30. The family’s case seeking compensation will continue now,” Karpal told FMT yesterday.

He said, however, that the court process could take time. The case is currently with the Court of Appeal and will continue to the Federal Court.

Following the court’s order for a security bond, Karpal had appealed to all Pakatan Rakyat MPs and state assemblymen to chip in and help the family with funds.

“But now that the Mongolian government has agreed to assist Altantuya’s father Shaariibuu Setev post the bond, there will be no need to collect donations from the MPs and state reps,” Karpal said.

On June 4, 2007, Altantuya’s father, Setev, mother Altantsetseg Sanjaa and her two sons Mungunshagai and Altanshagai Munkhtulga had summoned the Malaysian government, Abdul Razak Baginda, and the two accused – chief inspector Azilah Hadri and corporal Sirul Azhar Umar – to seek RM100 million in compensation for her death.

They alleged that Azilah and Sirul, who were attached to the Special ActionUnit , had shot Altantuya and disposed of her corpse by exploding it using a C4 bomb. Bits of Altantuya’s body were later found in the forest area in Puncak Alam, Shah Alam, on Nov 7, 2006.

Three months to pay

Following the family’s claim for compensation, Abdul Razak and the Malaysian government as well as the defendants filed an application asking that Setev and family prepare a cost guarantee of RM1 million or any amount deemed fit by the court.

The family appealed and the Shah Alam High Court on March 30, 2010, ordered the Setev family to pay a security bond of RM60,000 instead to the Malaysian government and Abdul Razak, who is said to have been Prime Minister Najib Razak’s political adviser.

The plaintiff, Setev, was required to deposit the payment with the court as security to enable court proceedings to continue.

Judicial Commissioner Zaleha Yusof ruled in chambers that Setev had three months to pay RM30,000 each to the Malaysian government and Abdul Razak.

Setev had at that point said he would seek the assistance of MPs in Mongolia and Malaysia to help with the finance because the RM60,000 was too much for the family.

Karpal had said that he would not further burden Setev and family with the deposit because Setev only earned US$200 (RM620) a month and needed it to take care of the family, including Altantuya’s two sons.


Ulaanbaatar, Mongolia, /MONTSAME/ A Mongolian chess player B.Anu won a gold medal in Chess World Cup competitions held on June 11-13 in Nevada State, USA.
The chess competitions named after World champion Susan Polgar brought together 1,114 chess players from various countries. The Mongolian girl B.Anu competed in the under 19-year old age category and won the gold medal without a loss and draw. Another Mongolian player has received a prize for the "National Open" category. The gold medalist B.Anu was awarded with a certificate to study in the Texas Tech University.
One of the world strongest chess masters Susan Polgar is a Hungarian-American chess player. She was born in Hungary and grew up in Budapest city. She is the first woman to win Men's World Chess Championships, and now serves as director of the Susan Polgar Institute for Chess Excellence (SPICE) at the Texas Tech University


Mongolia to sell off mining assets

MONGOLIA'S plan to privatise its state-owned assets will allow international investors access to some of the world's largest untapped mineral resources through initial public share sales, most likely in Hong Kong.

Dulam Sugar, chairman of Mongolia's State Property Committee, said that even though the procedure of equity listings had not been confirmed, the Mongolian government had decided to sell shares in local and international sharemarkets.

He named Erdenet Mining, a Mongolian-Russian copper joint venture, the Tavan Tolgoi coking coal deposit and the Oyu Tolgoi copper mine as the nation's biggest state-owned assets to be privatised. Uranium companies may also be put on the block

''Mongolia doesn't have anybody who has offered shares in international markets yet, that's why we are very cautious,'' Mr Sugar said from Ulaanbaatar, the Mongolian capital. ''We are asking international investors to invest now, particularly those from Hong Kong.''

McKinsey & Co is advising the government, which expects final results in one month.

Mongolia, a landlocked country sandwiched between China and Russia, is betting on overseas capital markets as its primary source of fund-raising over its less liquid domestic market.

The government is striving to boost living standards in the nation of about 2.7 million people, where average per capita income is about $US2000 ($2315) a year.

Erdenet, established by the governments of Mongolia and the former Soviet Union, started operations in 1978. The company produces more than 530,000 tonnes of copper concentrate and 3000 tonnes of molybdenum concentrates a year.

Tavan Tolgoi holds about 6 billion tonnes of coal in the deserts of southern Mongolia, making it one of the world's largest unexploited reserves. While it is fully owned by the government, Mongolia plans to control part of the deposit through a state-run enterprise, with a second tranche to be operated by a group of foreign and domestic companies.

Rio Tinto and Ivanhoe Mines are developing Oyu Tolgoi, which Rio has called the world's largest copper resource.

It may operate for as long as 30 years and generate between $US30 billion and $US50 billion in revenue, the Mongolian President, Tsakhia Elbegdorj, said in September.

Ivanhoe holds 66 per cent of Oyu Tolgoi and Mongolia the rest. Rio owns 22.4 per cent of Ivanhoe and has an option to increase its stake to 44 per cent. Production is scheduled to begin in 2013.

Selling part of its holdings in these assets will require the agreement of Mongolia's joint venture partners.

The average daily turnover of the Mongolian stock exchange is about $US100,000. That compares with $HK64 billion ($9.5 billion) in Hong Kong.

Funds raised in Hong Kong through initial public offerings surged 276 per cent to $HK248 billion in 2009 from a year earlier. The bourse has been targeting listings from emerging markets, particularly companies in the energy, metals and mining industries.


The Two Horses of Genghis Khan -- Film Review

BERLIN -- While some directors find their niches, others create or recreate their own genres. This is definitively the case with Byambasuren Davaa, whose docudrama "The Story of the Weeping Camel" tugged at heartstrings in arthouse cinemas across the world a few years back. Using non-actors and real locations, Davaa managed to bring the traditional culture of her native Mongolia to the screen and attract sizable audiences with the help of her protagonist, an impossibly cute camel colt being spurned by its mother.

After her follow-up, "The Cave of the Yellow Dog" -- which also profited from a cuddly animal -- Davaa now presents her third strike, "The Two Horses of Genghis Khan," which has animals in the title, but rarely on screen.

Commercial prospects are not nearly as good as they were for Davaa's two previous films, since the animals of the title are exactly that. A lovable camel or lost canine on-screen would certainly have help at the boxoffice.

The horses Davaa refers to are part of a long forgotten song. The singer Urna has set out on a quest to honor her grandmother's memory by finding it again. Traveling across Mongolia, she searches for people who might remember part of the lyrics, but also keeps in touch with a maker of violins who is restoring what was left of her grandmother's beloved instrument after the great cultural purge.

But wherever she turns or whomever she meets, be it in urban Ulan Bator or the countryside, the answer is always the same. People might have heard of the song, but don't remember it, a not so subtle metaphor for old traditions and cultures changing to accommodate the new Asia.
Only towards the end of the film, when all that was unique seems to have vanished or faded away, does she meet an ancient woman who still knows the cherished piece of musical heritage, allowing Urna to fulfill her grandmother's greatest wish.

While "The Two Horses of Genghis Khan" presents another step for director Davaa towards a more fictional narrative, her efforts seem more clearly planned and less organic than in her two previous films. The film's heroine, who has traveled the world in real life and this narrative, is clearly more stilted than previous non-actors Davaa employed, as are several other characters and extras who can at times be caught overacting or mugging for the camera.

Technical credits, especially Martijn van Broekhuizen's evocative cinematography are well above par, with the haunting music by Ganpurev Dagvan reaching the lofty level expected from a film about a lost song.

Opened June 10 (Germany)
Production companies: Grasland Film GbR, Atrix Films
Cast: Urna Chahar-Tugchi, Hicheengui Sambuu, Chimed Dolgor
Directorscreenwriter: Byambasuren Davaa
Producer: Beatrix Wesle, Byambasuren Davaa
Director of photography: Martijn van Broekhuizen
Music: Ganpurev Dagvan
Editor: Jana Musik
No rating, 91minutes


Hong Kong Bourse Met With Mongolian Mining Companies on Listing

June 16 (Bloomberg) -- Hong Kong Exchanges & Clearing Ltd. has met Mongolian mining companies seeking to list in the city, said Chief Marketing Officer Lawrence Fok, who is in the North Asian country for a forum on corporate capital raising.

Hong Kong Exchanges, which operates Asia’s third-largest stock market, is processing more than 70 initial public offering applications from both overseas and local companies, Fok said in an interview in Ulaanbaatar yesterday. He declined to name the Mongolian companies or give a time frame for possible listings.

“Hopefully there will be more companies using Hong Kong as a platform,” Fok said. “Mongolia and other resource-rich countries share the same characteristics of having a small population and massive resources, which would benefit from China’s economic growth and its rising demand for resources.”

Funds raised on the Hong Kong market through initial public offerings surged 276 percent to HK$248 billion in 2009 from a year earlier, the exchange said on March 4. The bourse has been targeting listings from emerging markets, particularly companies in the energy, metals and mining industries.

Energy, mining and resources companies account for about 16 percent of both Hong Kong’s market capitalization and daily trading volume, Fok said. Apart from Mongolia, the Hong Kong stock exchange has also met with companies with assets in Kazakhstan, Tajikstan, Russia and Indonesia, he said.

Between six and eight companies are listed in Hong Kong that possess assets in Mongolia, Fok said. The Hong Kong-traded stock of Vancouver-based SouthGobi Resources Ltd. has slumped 28 percent in the past three months. The company started production at its open-cast coal mine in southern Mongolia last year to meet Chinese demand.

Energy, Infrastructure

Mongolian companies “have the story about China’s economic growth and its increasing demand for resources,” Fok said.

Major state-owned companies and assets in energy- and infrastructure-related industries are among those that will seek to raise money selling shares in international and local stock exchanges, Mongolian Prime Minister Sukhbaatar Batbold said at a forum in Hong Kong on April 12.

Mongolia’s companies are seeking to raise funds overseas as they struggle to attract investors in a market with thin trading volume.

The average daily turnover of the Mongolian exchange is about $100,000 this year, according to Khangai Altai, chief operating officer of the Mongolian Stock Exchange. That compares with HK$64 billion in Hong Kong, according to data compiled by Bloomberg.

--Editors: Darren Boey, John McCluskey.

To contact the reporter on this story: Hanny Wan in Ulaanbaatar via Hong Kong newsroom at

To contact the editor responsible for this story: Darren Boey at

Foreign dollars for Mongolia boost

Mongolia is looking for foreign investors to help it boost domestic crude oil production tenfold in the next three years, a senior Mongolian diplomat said today. 

The increase in crude production to 10 million barrels a year from 1 million in 2009 would coincide with construction of Mongolia's first oil refinery, enabling the land-locked country to reduce its dependence on neighbouring Russia for gasoline and other refined petroleum goods, Mongolia's ambassador to Australia, Tserendorj Jambaldorj, told Reuters.

The move is the latest by Mongolia to exploit vast untapped natural resources with the help of billions of dollars in foreign capital as it seeks more economic autonomy from its neighbours.

"Right now we export all our crude oil to China and are 100% dependent on Russia, and to a small degree on Kazakhstan and China for oil products," Jambaldorj said.

"We have a plan to build a refinery in Mongolia in order to not be dependent on imports."

Mongolia sits on vast quantities of untapped mineral wealth and analysts say it could be one of the fastest growing economies of the next decade and a key investment target for global resources companies.

Foreign investors are watching to see if the country's fledgling democratic government can build needed infrastructure, improve the rule of law and negotiate its way through the geopolitical pressures exerted by Russia and China.

Mongolia aims to list gold mine; seeks LSE, Nasdaq help

ULAN BATOR June 15 (Reuters) - Mongolia plans to list its Oyu Tolgoi mine, one of the world's biggest untapped copper and gold deposits, and is receiving proposals from global stock exchanges to assist with turning its state-run stock market into a private enterprise, a government official said on Tuesday.

Mongolia hoped to list Oyu Tolgoi on the domestic exchange and an international one, Sugar Dulam, chairman of the State Property Committee of Mongolia, said at the Mongolia Capital Raising Conference.

Mongolia is attracting attention from global investors after it sealed a deal in October with Ivanhoe Mines (IVN.TO: Quote) and Rio Tinto (RIO.AX: Quote) (RIO.L: Quote) to develop the Oyu Tolgoi mine, which some estimate could be worth around $3 billion.

Dulam also said that Mongolia planned to list Tavan Tolgoi, one of the world's largest untapped coal deposits. He added that the London Stock Exchange, the Nasdaq and the Hong Kong Stock Exchange were among the groups that had submitted proposals to Mongolia to assist in privatising its exchange. (Reporting by Joseph Chaney; Editing by Michael Flaherty and Chris Lewis)
source: Reuters

July 1 cases against police reopened

State Prosecutor General D.Dorligjav has ordered a fresh investigation into the police firing on July 1, 2008 which resulted in the death of five citizens. Initially, senior officials such as the head of the General Police Authority, Maj-Gen. Ch.Amarbold, the head of the Metropolitan Police Authority, Mr. O.Zorigt, the head of the Public Discipline Department, Mr. G.Ganbaatar, and the head of the Patrol Department, Mr. Sh.Batsukh, were investigated for abuse of power and causing massive damage. Policemen Ya.Khorlooryembuuchii, D.Tumurbaatar, U.Darjaa, Yu.Gantulga, A.Uuganbayar, B.Battseren and N.Ariunbold were investigated for intended murder.

After 18 months of investigation, the cases against all of them were withdrawn on February 3, 2010 under orders from Mr. Yo.Sagsai, investigating prosecutor at the Metropolitan Prosecuting Authority. The senior officials were cleared under the Amnesty Law, while the cases against the policemen were closed with the explanation that “even though they had admitted to opening fire, it cannot be ascertained who fired the fatal shots.”

There was widespread popular discontent at the decision. Families of the victims kept on complaining to the authorities and even went on a hunger strike, but the Government did not budge. President Ts.Elbegdorj had always said he wished to see the case to an end and his appointment of D.Dorligjav as the Prosecutor General was seen as a step in that direction.

Inflation reaches 16.1 percent in Ulaanbaatar

Inflation at the end of May was 13.1 percent nationwide and 16.1 percent in Ulaanbaatar, where meat prices rose 50 percent and that of vegetables 20 percent. There are concerns that the inflation rate would rise to the level of two years ago, when it stood at 34 percent, with the price of wheat and flour rising the most.

The consumer price index last month was up by 3.2 percent nationwide, and 4.2 percent in Ulaanbaatar. The CPI usually rises by no more than 2 percent a month, and the present higher rate is also traced to the meat price. Price of beverages also rose by 6.4 percent in May, while fuel and diesel prices rose by 2.7-4.2 percent. Inter-city transportation expenses rose by 25 percent last year.

Some 65.8 percent of the total population is between 15-60 years, which means there are 1 million and 111,000 people able to work. Only 975,900 of them have jobs. Of the unemployed, 38,796 are registered as looking for jobs. Of them again, 50.3 percent have lost their job while the rest has never worked. In May, 23,100 people registered anew, while 14,100 were sent to an employer.

Men constitute 76.3 percent of the unemployed. The poverty rate stands at over 35 percent for the third year in a row. People between 16-34 are 54.7 percent of the registered unemployed.

“Nature is taking revenge, it’s all our fault,” rues herder

Talking about the dzud and its devastating effects, P. Zagarzusem, governor of Uyanga, an administrative district and one of the worst-hit areas, told an AP correspondent, "For many herders, livestock is their main source of income. It"s their business. It"s what they do. That"s why the loss the herders are experiencing is the same as when a company or a bank goes bankrupt. Other countries have tsunamis or earthquakes, for example, and people lose their lives and possessions. In Mongolia a dzud is a disaster on a similar scale."

This dzud is raising uncomfortable questions about the herders" way of life, as integral to the Mongolian identity as Chinggis Khaan, whose image graces currency notes and vodka bottles. The constitution enshrines livestock as protected national wealth. Herders form a powerful constituency; parliament rescinded a head tax on livestock to curry favor with them. The government, in a report last year, identified the unfenced grasslands and the herds that roam there as acutely vulnerable to climate change, citing more frequent droughts and harsh dzud winters.

"We Mongolians did not treat nature properly. Nature is taking revenge. It"s all our fault," said a 34-year-old herder who drove his herd of 1,000 through three different counties in the winter trying to find pasture not buried under snow. Only 100 of his herd remain.

Government officials and development experts say herders are contributing to the problem. Since Mongolia dumped the planned economy and its Soviet client-state status for free markets 20 years ago, livestock numbers have more than doubled, to 42 million head. Much of the increase is in goats valued for cashmere, who eat voraciously, damaging the roots of grasses and other plants that anchor the soil and prevent the pasture from turning to desert.

While the government wants to move herders into other lines of work and decrease herds, an uncontrolled exodus from the steppe is already under way. After three harsh winters a decade ago, more than 70,000 herders ended up in Ulaanbaatar, swelling the shanty town fringes of the capital and mainly living on government handouts. The flow is expected to accelerate if the aftermath of the latest dzud is not controlled.

Prophecy Resource ties up with Japanese firm to market Ulaan Ovoo coal

Prophecy Resource Corp. and Sojitz Corporation of Japan have entered into an exclusive agreement to jointly market thermal coal from Prophecy"s 208-million-ton Ulaan Ovoo coal deposit to buyers in China. The agreement also covers Japan and Korea, provided that the coal is sold through the Chinese land border from Mongolia.

By capitalizing on its extensive expertise in international coal trade, Sojitz Corp. and its Beijing affiliate, Sojitz (China), will assist Prophecy on a best efforts basis in securing letters of intent and/or offtake agreements from potential coal buyers for its thermal coal in advance of planned 2010 mining operations. Sojitz will also advise Prophecy on the best pricing parameters including volatility concerns as they apply to specific markets. Sojitz is a widely respected international corporation involved in a multitude of businesses including but not limited to energy (coal, LNG, oil & gas), metals, chemical and functional materials and machinery.

Wardrop Engineering is developing a prefeasibility study specific to the reserves and economic sensitivities of the Ulaan Ovoo deposit. The study is expected to be released in 45 days. On May 11, Prophecy entered into a mine services agreement with Leighton Asia Ltd. for the equipment leasing and mining operation at the deposit. Mine site establishment will commence in July, 2010, to ensure 250,000-ton production in 2010. Ulaan Ovoo is located within 10 km of the Russian border.

Parliament begins discussion of Tavantolgoi proposals

Prime Minister S.Batbold explained the Government’s proposals on the Tavantolgoi coal deposits at Parliament on Thursday.

The plan is to divide the deposit into two. The first part will have some 3.5 billion tons of coal and will be under a state owned company established for the purpose. No less than 10 percent of its shares will be distributed equally among 2.7 million Mongolian citizens according to the provisions of the Human Development Fund. Between 15 million and 30 million tons of coal will be sold annually, some of it after being coked.

In addition, following the Mineral Law, no less than 10 percent of the deposit will be sold in the Mongolian stock exchange, with all 35,000 registered companies and all citizens of Mongolia able to buy them.

During the discussion, MPs gave their opinion about railway construction, regional development, infrastructure and many other issues. S.Byambatsogt proposed construction of a narrow-gauge railway from Tavantolgoi to Gashuun Sukhait. D.Enkhbat worried if people will go and live in areas without urban facilities.

Minister Kh.Battulga said the Government had plans to build a chain of industries and said urban habitations near Tavantolgoi should be built to be used for 150-200 years.

Minister D.Zorigt explained Tavantolgoi will be owned fully by Erdenes MGL, with foreign companies investing in infrastructure development. They will have to collaborate with Mongolian companies.

MPs asking exactly how many companies are operating in Tavantolgoi now were told that apart from the Chinese Daitsuku, Energy Resource operates in Ukhaa Khudag, and Tavantolgoi LC in Tsankhi. The regional administration owns 49 percent of the shares of the last named, while the rest is privately held.

Altogether 31 MPs asked questions on the first day of discussions.

Oyutolgoi Board holds first meeting

The Representative Administrative Board of Oyutolgoi LC has held its first meeting with G.Batsukh in the chair. Over two days the board discussed and then approved working procedures and also set the date of the next meeting.

Keith Marshall, representing Ivanhoe Mines, reported that with the hiring of 1,200 employees in the past two months, the number of Mongolians working in the construction site has gone up to 1,800.

The board discussed how to increase the number of Mongolian companies supplying material and services. USD60 million worth of products must be bought by 2011. A training program will soon be submitted to the Ministry of Education, Culture and Science, involving 3,000 Mongolian workers and five universities


Push to draw Chinalco into Oyu Tolgoi project

THE governments of China and Mongolia are discussing a potential labour agreement which, if finalised, will transfer 2500 Chinese to work for the copper-gold mining project Oyu Tolgoi in Mongolia, the 21st Century Business Herald reported yesterday.

A person involved in the talks, who was not named, said the earliest a decision about whether Chinalco could participate in the development of the Oyu Tolgoi project may come next month.

If the government labour agreement is signed, the person said in the report that the chance for Chinalco to take part in the project would be higher.

Chinalco is now an indirect participant of the mine because it has roughly 9 per cent stake in Rio Tinto, which has a 22.4 per cent stake in Ivanhoe, the operator of Oyu Tolgoi project -- the largest under-developed gold-copper mine in the world.

Rio has an option to increase its stake in Ivanhoe to 46.6 per cent eventually.

Ivanhoe Mines has increased the expected production from the $US4.6 billion ($5.1bn) Oyu Tolgoi copper and gold mine in Mongolia.

It puts average annual output from the South Gobi desert mine at 540,000 tonnes of copper and 670,000 ounces of gold over a 27-year life, with first production in 2013.

Ivanhoe executive chairman Robert Friedland has said the company expects these results will continue to improve to where Oyu Tolgoi will rank alongside Grasberg and Escondida.

Ivanhoe has appointed Citi to review its options, including debt or equity raisings, sale of subsidiaries, project financing or other corporate transactions.


Mongolian ambassador meets head of Russian Railways to urge progress on upgrading railway system

Ambassador to Russia D.Idevkhten met V.I.Yakunin, president of the Russian Railways, which holds half the shares of Ulaanbaatar Railway, to impress upon him the imperative need to extend the UB Railway network and to upgrade its technology so that the new demands of an emerging Mongolian economy can be met .

Idevkhten said collaboration in the railway sector must be developed in the spirit of the bilateral declaration on strategic partnership issued during the visit of the Russian President to Mongolia last year. He wanted to know Yakunin’s views on raising the authorized capital of Ulaanbaatar Railways.

Yakunin replied that the Russian Railways agreed with the need to modernize the operations of Ulaanbaatar Railways and to increase its transit carriage capacity. Both partners have already decided in principle, he reminded the Ambassador, to augment the authorized capital of UR by investing USD125 million each. The Russian side has also agreed to give Mongolia a soft loan for its contribution of the money. However, a final decision on how this will be done has not yet been made, he said. He emphasized the need to keep politics out of matters relating to the railway.

Among others present at the meeting were B.Erdenebileg, advisor to the Ambassador on trade and economics, B.Chimedtseren, first secretary at the Mongolian Embassy in Russia, J.Bayarkhuu, second secretary, G.P.Petrakov, head of the Transportation Agency of the Russian Railways, V.Morozov and A.A.Gorgiladze, both vice-presidents of the Russian Railways, and A.Konovalov, head of its International Cooperation Department.

Chinalco to co-develop Mongolian copper-gold mine

Aluminum Corporation of China, or Chinalco, a large Chinese resources company, is now negotiating with Mongolia about its participation in the project of Oyu Tolgoi, a copper-gold mine of Mongolia. If a labor contract is signed successfully, about 2,600 Chinese workers are expected to work for the project, said a member of the Chinese delegation on Thursday.

The insider released that the earliest time for the final decision of Chinalco's participation would be in July, and the labor contract would be a booster for that.

In March this year, Chinalco's president Xiong Weiping expressed the company's willingness to co-develop the Oyu Tolgoi mine. It is the largest undeveloped copper-gold mine in the world, located 200 kilometers away from the border of the two countries.

Chinalco has strong advantages in participating in this mine's exploration. Located in the interior land, the mine depends largely on the infrastructure of China for the export of its products, and China is the only large country with mineral import around Mongolia.

The insider also said that China Investment Corporation (CIC) plays an important role in the possible cooperation. Oyu Tolgoi is owned by Ivanhoe Mines Ltd. of Canada, whose equity stake is held by Rio Tinto. CIC owns the right to appoint board members and the pre-emption rights of SouthGobi Energy Resources Ltd., a subsidy of Ivanhoe. This means that if Ivanhoe transfers the share of SouthGobi in the future, CIC will have priority right to buy it.

"If necessary, CIC could talk directly to Ivanhoe,” the insider said.

CIC has also been "negotiating with potential partners” including Rio Tinto, Xiong said.

John Connors, managing partner of Baker & McKenzie, told the 21st Century Business Herald that Oyu Tolgoi is a milestone project in the history of foreign investment in Mongolia. "This is an opportunity for foreign funds to hold the stake of Mongolia's domestic mine.” However, Connors added, it was still uncertain whether Chinese enterprises could join this project.

By Xu Lin


Mongolians to share TT profits

Tavan Tolgoi coal deposit will be under 100 percent state ownership and every Mongolian will enjoy a preference to own shares of Tavan Tolgoi, a leading coal deposit in the world with a reserve of 6.4 billion tonne.
Government submitted the draft Investment Agreement on Tavan Tolgoi deposit to Parliament and a draft parliamentary resolution on some issues to exploit the Tavan Tolgoi deposit. The groups of parties in Parliament discussed the documents on June 7 and supported them in principle. The Government drafted a project to possess the deposit by dividing it into two parts.

For the first part of the deposit, it proposes to establish a 100 percent state owned company based on the deposit with coal reserves of 3.5 billion tonne and distribute equal shares to 2.7 million citizens; however, for the second part, it has a proposal to select domestic and foreign investors to exploit the remaining 3 billion tonne of coal. It is interested to mobilize domestic and foreign investors in order to resolve issues including transit shipment, advance payment, infrastructure establishment as well as the funding required for them. Minerals and Energy Minister D. Zorigt highlighted that as Tavan Tolgoi deposit’s license and field are only under state ownership, it is impossible to put the license on pledge or sell it. “A 100 percent state-owned company named ‘Erdenes MGL’ was established for Tavan Tolgoi coal deposit. A specific company for Tavan Tolgoi deposit exploitation will be established under coordination of Erdenes MGL and distribute the company’s shares to 2.7 million citizens pursuant to the Human Development Fund. Actually, it aims at inspiring national companies to become big companies so that it can be competitive in regional and world levels. For this reason, not only distributing shares to Mongolians, but Erdenes MGL Company also considered it necessary to become a large company to be competitive in the world arena and capable to raise money from the international capital market. Another part will remain under 100 percent state ownership and foreign and domestic operators and marketing companies of extraction will be available to participate in this part. For reasons that the license and even fields are completely under state
ownership, the government’s basic goal is to protect the deposit under
state ownership from going astray.” The tender document to select investors was submitted to parliament.
“The 100 percent state-owned company will be established and liable for 3.5
billion tonne of coal reserve of which 2.7 million citizens will receive equal
shares of not less than 10 percent of the company’s capital in accordance
with the Human Development Fund Law. This share will be different from
the practice of previous privatization. Then, failed industries were privatized
and their shares were distributed to all citizens in the form of certified pink
and blue-colored papers to receive their dividends. But it was not friutful and only provided around Tgs3000 to 4000 as a dividend over 20 years. The share of Tavan Tolgoi will actually be and useful for life and will create a condition for every citizen to be an owner of capital.For instance, if the 3.5 billion tonne coal deposit is operated under modern management, it has the potential to annually process 15-30 million tonne of coal for worldwide supply. A certain part of it will be coked for domestic use. In accordance with the Law on Mineral Resources,
not less than 10 percent of the deposit will be traded at Mongolia’s stock
exchange. Not only the 35,000 business entities registered in Mongolia, but
individuals will also be available to take part in this process. Members of our group consider that any of individuals or businesses will not be given preference on this principle and they all will have a right to get shares from the stock market under equal conditions,” said D. Lundeejantsan, head of the MPRP Group in the Parliament. The government estimated that there will be a net profit of USD 5.5 billion if 15 million tonne of coal is extracted annually from the Tavan Tolgoi deposit and be able to supply the market for a period of 30 years. The parliamentary Standing Committee on Economy made a decision on June 8 that a draft investment Agreement of Tavan Tolgoi deposit needs to be discussed in parliament. First of all, the Minerals and Energy Minister reported that the exploitation of Tavan Tolgoi coal deposit aims at respecting national interest, supporting domestic entities and lets all citizens possess shares. The Minister noted that a key purpose of Tavan Tolgoi’s exploitation is to ensure Mongolia’s participation in world market policy on coked coal and setting a tariff, and export products to neighbors and third countries. He said that the government intends to divide Tsankh field of Tavan Tolgoi deposit, which will be first used in two parts; one for domestic businesses, and another for foreigninvested businesses or/and Mongolian companies that incorporated to the businesses. The draft agreement states that by permission of the Government, an investor will invest and cooperate in extracting, concentrating, processing and transporting coal and other infrastructure projects based on a contract established with Stateowned Company. Moreover, the investor will be liable for the total investment, all expenses required for extraction, storage, concentration, production, shipment and trading as well as spending on training national personnel and related fees. Along with it, the investor will be responsible to establish a plant for concentration . For the time being, nine companies and consortiums from eight countries have offered their proposals to exploit the Tavan Tolgoi coal deposit. It is available for other companies to send offers and recently, more two companies put forward requests. The investor company will be selected according to their qualifications including financial capability, experience, capacity to produce value-added products, the volume of investment for railway construction, and advance payment,” answered the Minister to the question by MPs. Minister D. Zorigt mentioned that although construction of a railway is a separate matter, it is a key issue to exploit the Tavan Tolgoi deposit and it is necessary to consider either economic profit or political and geopolitical issues. The government pays attention on transit shipment to reach Russian ports and China’s Tianjin port. While drawing up the draft agreement, the government received assistance from internationally well-known German ‘Deutsche Bank’, JP Morgan and Canada’s consultancy company which is experienced to give advice in the mining sphere. Now it is necessary to intensify water exploration. It is possible to extract annually 15-20 million tonne of coal from the deposit in the scope of study and if there is sufficient water, it will be possible to extract more. source: The Mongol Messenger

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