Mongolia Might Store Foreign Spent Nuclear Fuel, Senior U.S. Official Says

By Elaine M. Grossman

Global Security Newswire

WASHINGTON -- The Obama administration has held informal talks with Mongolia about the possibility that the Central Asian nation might host an international repository for its region's spent nuclear fuel, a senior U.S. diplomat said yesterday (see GSN, March 9, 2010).

U.S. Energy Department officials and their counterparts in Ulaanbaatar, the Mongolian capital, are in the early stages of discussion and there has been no determination yet about whether to proceed with the idea, according to Richard Stratford, who directs the State Department's Nuclear Energy, Safety and Security Office.

Speaking at the biennial Carnegie International Nuclear Policy Conference, Stratford said a spent-fuel depot in the region could be of particular value to Taiwan and South Korea, which use nuclear power but have few options when it comes to disposing of atomic waste.

"If Mongolia were to do that, I think that would be a very positive step forward in terms of internationalizing spent-fuel storage," he said during a panel discussion on nuclear cooperation agreements. "My Taiwan and South Korean colleagues have a really difficult time with spent fuel. And if there really was an international storage depot, which I have always supported, then that would help to solve their problem."

Stratford is Washington's lead envoy for nuclear trade pacts, which are sometimes called "123 agreements" after the section of the Atomic Energy Act that governs them.

The United States provides fresh uranium rods to selected trade partners in Asia, including South Korea and Taiwan. For Mongolia to accept and store U.S.-origin spent fuel from these or other nations would require Washington to first negotiate a nuclear trade agreement with Ulaanbaatar.

Although Energy Department officials have reportedly engaged in informal talks with Mongolian representatives for several months, Stratford has not yet had any contact with Ulaanbaatar on the matter, he said. It is not yet certain whether formal negotiations on a nuclear trade pact will move forward.

In fact, the senior diplomat said he was unaware of the idea until roughly eight weeks ago, when a colleague mentioned, "Your Energy folks are talking to Mongolia about various types of [nuclear] cooperation," Stratford told Global Security Newswire following the panel discussion. "And I said, 'OK, I didn't know that. But now that I do, I will add Mongolia to my [planning] list and then watch what happens.'"

Energy Department officials traveled to Mongolia last fall for meetings on the matter, according to Mark Hibbs, a senior associate with the Nuclear Policy Program at the Carnegie Endowment for International Peace. He chaired the discussion on nuclear cooperation.

"It was a fruitful discussion," Hibbs told GSN yesterday. "They went into some details [but] it was very exploratory."

The long-term disposal of even domestically produced nuclear waste has proven problematic around the world, with publics deeply wary of the potential health hazards associated with storing radioactive or toxic materials.

For its part, the U.S. government has been unable to settle on a solution following an Obama administration decision last year to formally abandon earlier concepts for entombing spent fuel and other atomic waste at Yucca Mountain in Nevada (see GSN, March 14).

In most nations, the idea of accepting foreign spent fuel has seemed an even greater anathema. Russian officials have discussed building an international repository on their territory, but the idea appears to have faded due to domestic opposition.

Nuclear expert Jeffrey Lewis said he wonders if the situation would be any different in Mongolia.

"I think these guys are fooling themselves [if they] believe we will put a spent-fuel depot in Mongolia," he told GSN in a brief interview, noting surprise at Stratford's remarks. "I don't think Mongolia is going to accept being a regional spent-fuel repository."

Hibbs said that as "a country that's surrounded by two big powers" -- Russia and China -- Mongolia is "trying to carve a niche out for itself economically in the region."

Broadening its involvement in the nuclear energy sector might serve as just such an economic lever, Hibbs said.

Mongolia could seek to step up mining of its natural uranium deposits and potentially expand into a wider array of services, such as providing foreign nations with fresh fuel and then taking back the atomic waste at a later date, according to regional experts (see GSN, Jan. 19).

This type of move would come at a time when neither Russia nor China has acted on similar concepts for what is termed "leasing" of nuclear material.

There could also be interest among officials in and outside the Mongolian government in developing nuclear power to meet that nation's own growing energy needs, according to some sources. Ulaanbaatar last week signed a memorandum of understanding with Seoul to cooperate on peaceful nuclear technologies and expertise.

Lewis, who directs the East Asia Nonproliferation Program at the Monterey Institute of International Studies, said it was difficult to believe that Mongolia would find it profitable to enter a field that has been dominated for decades by established nuclear energy powers such as Russia and France.

"I don't understand why Mongolia wants to be involved in the fuel-cycle business to begin with," he said. "If I were running Mongolia, I could think of a bunch of other things to spend that kind of industrial investment on before it came down to fuel-cycle services."

Nor would it likely prove politically palatable for Mongolia to become a final destination for its neighbors' atomic waste, he argued.

"Without some compelling evidence -- like a statement by the government of Mongolia that they're willing to be the region's nuclear waste dump -- I don't see why anybody thinks they would do this," Lewis said.

If Mongolia ultimately does see merit in offering nuclear fuel services, inking a nuclear trade agreement with the United States would be a shot in the arm, Hibbs said.

"Having the blessing of the United States through a 123 agreement would be very valuable for them," he said. "Mongolia is emerging as a very Western-friendly country. ... [Getting] the 123 agreement would basically underscore that the United States supports the development of nuclear energy activities in Mongolia."

Hibbs said it is highly unlikely that Mongolia is exploring its atomic energy options with an eye toward eventually developing a nuclear weapon.

"I think it's inconceivable that Mongolia would be interested in nuclear weapons in the environment that they're in," he said. "It realizes that by being a member of good standing in the [1970 Nuclear Nonproliferation Treaty], it's better served than getting involved in a hair-brained arms race with either the Russians or the Chinese."

Lewis had a slightly different take on the matter.

"I don't think Mongolia has any interest in developing a bomb right now," he said. "But if Mongolia wants to move from uranium mining into the fuel cycle, that could contribute to an unwelcome spread of sensitive facilities."


Xanadu buys Mongolian copper prospect

Exploration minnow Xanadu Mines Ltd says it has acquired the Mogoin Gol copper prospect, covering 488 square kilometres, in northern Mongolia.

The Mogoin Gol project is 40km northwest of the producing Erdenet deposit, which produces 530,000 tonnes per annum of copper concentrate and delivers it into Russia and China via the Trans Mongolian railway.

"Following extensive due diligence, it is Xanadu's view that the Mogoin Gol project is one of the best untested porphyry copper targets in Mongolia, having been subject to minimal drill testing almost a decade ago," chairman Brian Thornton said in a statement on Wednesday.

The copper market is currently underpinned by demand from China, which is expected to grow by 25 per cent from 6.8 mtpa in 2010 to more than 8.5 mtpa in 2015, Xanadu says.

Source:AAP (Australian Associated Press)


Mongolia Growth Group Ltd. Publishes March 2011 Monthly Letter to Shareholders

(via COMTEX News Network)--

Mongolia Growth Group Ltd. (YAK - CNSX),is pleased to announce the release of its March 2011 letter to shareholders.

March 2011 Shareholder Letter

To The Shareholders Of Mongolia Growth Group Ltd.,

Jordan and I recently spent three weeks in Mongolia setting up infrastructure, investigating opportunities, and negotiating on our first significant transaction. In every way, this trip was a success-particularly as we were able to partner with an outstanding group of individuals for the creation of an insurance company.

Upon landing in Ulaanbaatar (UB) in early February, the first thing you notice is the cold. I had been mentally prepared, but the human body isn't quite physically prepared for the 100 degree temperature change from Miami to UB. The other thing you notice is just how much economic activity is going on around you. Written accounts cannot convey the feel of a true boomtown.In UB, people are largely oblivious to the cold-they are focused on commerce and the success of Mongolia.

Our mandate at Mongolia Growth Group Ltd. (MGG) is simple: find ways to gain leverage to the growth of the Mongolian economy. There are many avenues towards achieving this goal. As we strolled around the downtown of UB, we constantly explored our options and tried to focus our opportunity set. We have a broad mandate, but we cannot do everything-the Mongolian economy is just too diverse. Rather, we want to focus on sectors that are undeveloped and where we can deploy significant quantities of capital in an intelligent manner. Fortunately, we have a roadmap to use in our quest for opportunities.

Mongolia isn't the first country to experience rapid growth in the past few decades-there are plenty of examples to learn from and use as templates. If history is any guide, excluding the resource sector which is leading the boom, the sectors we should focus on are financial services and the real estate sector. Of course, we will not exclude a good opportunity just because it falls outside of our targeted sectors.

Over time, real estate prices are correlated with changes in wealth and disposable income. As the Mongolian economy expands, real estate should be a sector that will take advantage of such trends. While we are open to attractive construction opportunities, our preference is to purchase and rent out existing properties. We see rental yield as a tangible metric in determining the value of a property portfolio. More importantly, existing properties produce cash flow almost immediately after you acquire them. As a young company, we are determined to achieve profitability and reduce funding risk. Unfortunately, we are limited by the number of properties that are currently available for sale at attractive prices.

As an economy grows, the need for financial services grows with it. Our research shows that this process isn't exactly linear-rather, the demand for financial services should eventually grow at a faster pace than the overall economy. If we can partner with good operators, this should produce substantial operating leverage for MGG, particularly as financial services tend to have high returns on capital to begin with.

As consumers and businesses acquire more valuable assets, they naturally want to find ways to mitigate losses due to exogenous events. It is said that you don't realize the need for insurance until you have to file an insurance claim. The recent earthquake in Japan reminds us all of the need for insurance. We intend for insurance to be the first business of what we hope will be an integrated financial services company. We did not set out to build an insurance company first-instead, we happened to find an insurance management team that we admired first.

As Jordan and I strolled around UB, we were constantly reminded of two facts-it's quite cold-but more importantly, MGG will only be as successful as our Mongolian partners can make it. Jordan and I would be challenged to run an insurance company in America-we would find it impossible in Mongolia; the same goes for many other enterprises. The barriers of culture, customs, relationships and especially language are not quickly overcome.

We are allocators of capital and over the past decade, we have been very successful at investing in others. I don't see any reason to adjust a proven model just because we are in a different country. We have no desire to bring hordes of Western managers with us. There is more than enough entrepreneurial talent in Mongolia. We just need to find it. As investors, we feel that we bring Western knowledge and a decade of investment experience to the table, but primarily, we bring capital. We actively seek out potential partners in need of capital.

Our foray into insurance is our first such partnership. We structured it in a creative way that allows management of the insurance company to use their bonuses to acquire part of that company. Naturally, they can add their own capital as well and we are hopeful that they will. Finally, our partners, through options, have the ability to benefit from the success of MGG. We believe this is an ideal model for future partnerships.

As we continue to explore the Mongolian economy, we are constantly struck by how being undercapitalized can hold back business growth. Our desire is to partner with other successful entrepreneurs so that they can grow their businesses more rapidly and invest in the latest equipment and technology to increase productivity. It's good for Mongolia, it's good for the businesses, and hopefully it's good for us as investors.

It bears repeating that MGG will only be as successful as our Mongolian partners can make it. We feel very confident in the integrity and experience of our insurance partners. I have invested in lots of businesses during my career; I cannot think of an investment that started off with more confidence. I welcome our new friends at UMC Group to MGG and hope that this is the start of a very successful partnership.


Harris Kupperman

Chairman & CEO

Mongolia Growth Group Ltd.

For further details on the foregoing document, please refer to the Corporation's filing on SEDAR.

For more information on Mongolia Growth Group Ltd., please see our website:

Or contact:

Jordan Calonego


Harris Kupperman

Forward-looking Information Cautionary Statement

Except for statements of historic fact, this news release contains certain forward-looking information within the meaning of applicable securities law. Forward-looking information is frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur. Forward-looking statements are based on the opinions and estimates at the date the statements are made, and are subject to a variety of risks, uncertainties and other factors that could cause actual events or results to differ materially from those anticipated in the forward-looking statements including, but not limited to delays or uncertainties with regulatory approvals, including that of the CNSX. There are uncertainties inherent in forward-looking information, including factors beyond MGG's control. MGG undertakes no obligation to update forwardlooking information if circumstances or management's estimates or opinions should change except as required by law. The reader is cautioned not to place undue reliance on forward-looking statements. Additional information identifying risks and uncertainties that could affect financial results is contained in MGG's filings with Canadian securities regulators, which filings are available at The CNSX has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

Read more:

Source:Mongolia Growth Group


Ivanhoe says Oyu Tolgoi continues to progress

TORONTO, March 28 (Reuters) - Ivanhoe Mines Ltd (IVN.TO: Quote) said on Monday that key parts of its Oyu Tolgoi copper-gold-silver project in Mongolia are currently ahead of schedule.

The massive project, which Ivanhoe is being developing in partnership with Anglo-Australian miner Rio Tinto (RIO.AX: Quote) (RIO.L: Quote), is expected to begin commercial production in the first half of 2013.

Rio Tinto currently owns a 42.1 percent stake in Ivanhoe and can gradually raise this stake up to 49 percent. The Oyu Tolgoi project itself is 66 percent owned by Ivanhoe with the government of Mongolia owning the remainder.

Ivanhoe estimates capital expenditures on the project will be about $2.3 billion in 2011. Ivanhoe said as of March 28, its consolidated cash position was about $1.9 billion. (Reporting by Euan Rocha, editing by Gerald E. McCormick)



Steppe into the void

Nigel Richardson goes off the map to the geological freak shows and dinosaur boneyards of the southern Gobi Desert.

MONGOLIANS have a word for it: zud. A zud is a winter so harsh animals cannot feed through the frost and ice encrusting the steppe. In the winter of 2009-10, Mongolia suffered its worst zud for nobody knows how long - "for decades", some say, or "in living memory". Ten million head of livestock are reckoned to have died.

As I gazed from the vehicle window at the stony desert steppe, I wasn't sure whether I was seeing the dramatic fallout of that zud or whether the ribcages and skulls were the usual cull exacted by nature in this most thrillingly harsh of environments. Whatever the case, the black vultures, sitting like homeless undertakers on the scattered boulders, were making the most of it.
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We were travelling through South Gobi, the largest and most sparsely populated of the five provinces that make up the Gobi Desert. The Gobi is the no man's land between China to the south and the rest of Mongolia and the central Siberian plateau in the north. It is also a byword for the most barren place of the imagination. But deserts, like imaginations, are invariably fertile, even this one.
The Gobi is not just sand and gravel and dead animals. It diversifies into mountains and evergreen forest and geological freak shows - including a dune system as long and high as a mountain range - and sustains an array of endangered species that includes wild ass, wild camels and snow leopards.

That dune system - Khongoryn Els - was our immediate goal. The only road in South Gobi runs for a handful of kilometres between Gurvan Saikhan Airport and the provincial capital, Dalanzadgad. Arriving on a flight from the Mongolian capital, Ulaanbaatar, we headed the other way: off-road, off-map, into emptiness.

Our ship of the desert was a Russian-built Furgon, a military vehicle adapted for civilian use and uniquely suited to this terrain. Up front sat the driver, Uulzi, a native of Dalanzadgad. Bouncing along in the back with me was Don Morley, a former US Air Force colonel who happens to be a world-class modern pentathlete.

After we had driven past a pile of brown blankets that turned out to be a dead camel, Morley reached into his pocket and produced a palm-size electronic device that he held up to the raised sunroof of the Furgon. "SPOT Messenger," he said, explaining that it was now firing off emails to 10 designated recipients with a link to Google Earth that pinpointed his position.

"One of the recipients is a two-star general who worked at the Pentagon," he added casually.

For a moment I thought I had woken up in a remake of Dr Strangelove but this was just Morley's way of making sense of space that made even his home state of Texas seem claustrophobic.

My preferred coping strategy for the Gobi, in those first few hours, was to hallucinate.

As we drove west, following a skein of tyre tracks that constantly diverged, subdivided and converged across the scrubby steppe, distant mountain ranges took on the shape of city skylines while wooded islands shimmered in petroleum-fume seas along the horizon.

The corollary of those murderous winters is summers that turn the vast, stony plains into sizzling frying pans with no respite of shade. We slipped in through an autumn window of pleasantly warm days and evenings. Even now, in such balmy Mediterranean-style weather, it was hard to imagine people living and laughing in such emptiness. But they do.

Mid-morning we stopped by a well, where nomadic herders had brought their flocks of kashmir goats and fat-tailed sheep. Their gers - traditional moveable dwellings, circular and made of felt - lay in the distance, looking like squishy buttons on the ragged brocade of the steppe. The watering of livestock was a focus of activity. Wearing deels, traditional calf-length tunics, the men came and went on motorbikes while their children showed off by riding horses bareback.

The life of the desert herders is unimaginably harsh but it has bred in them a unique sense of hospitality. Or, as a tour guide put it: "These are nomadic people still living as Genghis Khan did but they invite you in for tea." Not just tea but fermented mare's milk, feasts of freshly slaughtered goat - and tales of survival. Meeting these people, understanding both the meagreness and nobility of their existence, is like touching fingertips with one's ancestors - and, who knows, with one's descendants, too, for one day we may all need again to live so frugally.

One herder woman I met in the remote south-west of the province spoke somberly of climate change. "There has been a sequence of dry summers followed by bad winters," she said. "The wells are drying up. I see less and less wildlife ..."

Last winter, in that terrible zud, many young people gave up the herder's life and headed to towns and cities in search of work. Those who are left - in the case of many families, just the women and the elderly - are pessimistic about what will become of their way of life if nature does not turn kinder.

From the well we rattled on west, driving for six hours and 210 kilometres (and passing just one road sign and two other vehicles) to reach our first-night's camp. Juulchin Gobi 2 camp is a group of gers with bathroom and dining blocks, within a kilometre or two of one of South Gobi's most dramatic and distinctive features.

The sand dunes of Khongoryn stretch for more than 160 kilometres and rise 370 metres above the plain at their highest point. To reach them, we walked across a channel of spring water with vivid-green margins where hoopoes flitted in the soft evening light. As we puffed to the top of the ridge, the setting sun was turning the vast particulate drifts lilac, malachite-green and what in a fashion catalogue might be termed teal, or possibly taupe.

That evening, the balloonists arrived in camp. The Gobi Desert is forever acting as a vacuum on the human imagination, sucking in restless energies. While we were there, for instance, a Swiss woman named Sarah Marquis was pushing a shopping trolley across it. The Great Mongolian Balloon Adventure was in the same tradition but with rather more point.

No one, you see, had flown a hot-air balloon in Mongolia before, let alone in the Gobi Desert. So a bunch of European balloonists - mostly English, with some French, Germans and Swiss - had brought over four balloons and were trucking around and taking off in them at every available opportunity, creating fires and spheres in the desert skies and astonishing the herders, not to mention their camels.

The following morning, we watched them sail into the sunrise then headed back through a wide corridor of steppe between two mountain ranges, the southerly range being shadowed by the dunes of Khongoryn. Winding up through the mountains, we came across a Buddhist monastery that had been razed in the Communist purges of the '30s.

The monks who lived here were no doubt executed, as some 17,000 Buddhist monks lost their lives in a countrywide extermination. In the Victims of Political Persecution Memorial Museum in Ulaanbaatar is an exhibit of 20 monks' skulls, each with a single bullet hole in it.

But we were travelling back to a more innocent time in the history of Mongolia. No one epitomises the spirit of madcap adventure that finds challenge and inspiration in the Gobi more than Roy Chapman Andrews. He was the gung-ho American adventurer said to have inspired the character of Indiana Jones and in the 1920s he made a discovery that put the Gobi Desert on the front page of every newspaper in the world.

At a place named Bayanzag is a convulsive gash in the steppe, a geological phenomenon of wind-sculpted sandstone known as the Flaming Cliffs. It was given this name by Chapman Andrews because the sandstone glows red in the light of the setting sun. He also called it "this treasure vault of world history" because of what he found here. The Flaming Cliffs are a dinosaur boneyard.

Chapman Andrews camped at Bayanzag on a series of expeditions from what was then known as Peking. He found not just lots of dinosaur bones but "the first dinosaur eggs ever seen by a human being". Two were broken in half, revealing the white bones of unhatched baby dinosaurs.

In the moment that discovery was made, a new branch of science was born: palaeoembryology.

As Chapman Andrews noted, this is a hugely significant site in the history of planet Earth. Were it in any other country it would be marked by a car park, a museum and visitor centre, interpretation boards, way-marked footpaths - and a shop selling Indiana Jones figurines.

But here there is almost nothing - certainly not a car park, for there are not even roads. A few herders have set up trestle tables to sell drinks and draughts sets (the pieces are tiny gers). And there is a museum - housed in a ger and containing about three dinosaur bones - but it is pitiful.

Among the entertainingly shaped rocks that Chapman Andrews likened to mediaeval castles, no one popped up to offer to guide us, or to pass off a camel scapula as a piece of old velociraptor. Instead, my companions and I made our own fun, seeing vast thigh bones and eye sockets everywhere, though, in truth, we hardly knew what to look for. Our only definite reptile sighting was of a living one, a scuttling sand lizard.

That evening, the balloon circus rolled into Gobi Mirage camp, where we were staying, and the following morning I hitched a flight on a claret balloon named Road to Mandalay. Its owner, Phil Dunnington, said Mandalay had "sat in a bag in Frinton-on-Sea for 10 years" before receiving this unlikely airing in a place so different it seems incredible they share planet space.

In the oblique and dusty light of dawn, we lifted free of the steppe in our wicker basket with its leatherette lip. With height attained, the pilot, Phil's wife, Allie, closed the gas valve that fed the envelope with propane. The roar of flame died. Peace. No sound came from below. For as far as I could see, there were no roads, no cars, no dwellings, no fences or boundaries, no buildings, no pylons or poles, no advertising. Just a motionless ocean of land.

Trip notes

Getting there

Korean Air flies from Sydney to Ulaanbaatar via Seoul, priced from $1964 return. (02) 9262 6000, Air China flies from Sydney via Beijing, priced from $1349. (02) 9232 7277,

Touring there

World Expeditions has several Gobi Desert itineraries, including the 14-day Highlights of the Gobi tour, which includes Khongoryn Els and Bayanzag, priced from $3450 a person, twin share. 1300 720 000,

Gap Adventures hosts a 21-day Nomadic Mongolia tour priced from $3509 a person, twin share, departing Ulaanbaatar on selected dates between May and September. Includes staying in a ger camp and exploring Bayanzag and two days spent in the Khongoryn Els region. 1300 796 618,

Gobi Tours, based in Ulaanbaatar, has a 10-day southern Gobi overland trip that takes in Bayanzag, Khongoryn Els, visiting a camel-breeding family and Yolyn Am, priced from $US1200 a person, twin share. +976 11 322 339,

Further information

Source:Sydney Morning Herald


Mongolia TT mine IPO may come by yr end; rail deal signed

* IPO for Tavan Tolgoi expected by end 2011, early 2012

* Mongolia to decide on listing venue as early as June

* South Korea's Lotte signs deal for connecting railway (Adds details on rail link)

By Elzio Barreto

HONG KONG, March 25 (Reuters) - The highly anticipated initial public offering by Mongolia's Erdenes-Tavan Tolgoi will take place at the end of 2011 or the first quarter of 2012, a top Mongolian government official said on Friday, while a South Korean consortium has a deal to build a railway line for the world's largest untapped coking coal deposit.

The IPO is a key step for impoverished Mongolia to raise funds and develop its massive mining resources, with fast-growing nations such as China, India and Korea clamouring for more minerals.

The Mongolian government could announce the listing venue for the IPO by as early as June. The IPO is estimated by bankers to be in a range of $1.5-5 billion, Enebish Baasangombo, chief executive of state-owned Erdenes MGL, told Reuters in an interview on the sidelines of the Mines and Money conference in Hong Kong.

"Consultation on the stock exchange will be done with the banks after discussions with the Hong Kong stock exchange and the London stock exchange," he added. "We need to see which will be more beneficial. There are many issues."

Baasangombo declined to comment on the potential size of the IPO, saying: "It's a little early to talk about the size of the offering, but we have high expectation on that."

The deal would also be a boon for Goldman Sachs Group Inc , Deutsche Bank AG , BNP Paribas SA and Macquarie Group Ltd , which have been short-listed to manage the offering.

Erdenes, the state-owned company in charge of the eastern block of Tavan Tolgoi, plans to keep 50 percent of the project, and will distribute 10 percent of the shares to local residents, 10 percent to Mongolian companies and 30 percent in the form of the IPO. The west Tsankhi block of the mine has 1.2 billion tonnes of coal reserves and could produce 15 million tonnes annually for more than 30 years.

Mongolia has short-listed ArcelorMittal SA , Vale SA and Xstrata Plc among six bidders to develop Tavan Tolgoi.

U.S. coal miner Peabody Energy Corp , a consortium of China's Shenhua Group and Japan's Mitsui & Co Ltd , and a separate consortium of Japanese, South Korean and Russian companies were the other preferred bidders.


Unlisted Lotte Engineering & Construction said in a statement on Friday that the rail project connected with Mongolian Railway was expected to cost $3 billion and the company aimed to begin construction in the first half of 2012, around the same time as the planned IPO.

The 1,040 km railway will link Tavan Tolgoi in the South Gobi Desert and the eastern city of Choibalsan, Lotte added.

Demand for coking coal from big Asian buyers such as China, Japan and South Korea has pushed prices to near record highs this year.

(Additional reporting by Ju-min Park in SEOUL; Editing my Matt Driskill)

Source:Reuters news wire service


Mongolian PM condemns N. Korea for its deadly attack on S. Korea

SEOUL, March 25 (Yonhap) -- Mongolian prime minister on Friday condemned North Korea for its deadly attack on a South Korean warship and vowed to make efforts to enhance peace on the divided Korean Peninsula.

Tensions have been lingering on the peninsula following the North's two attacks last year, including the sinking of a South Korean warship that killed 46 sailors. The North still adamantly denies its involvement.

The North also shelled a front-line South Korean island in November that killed two soldiers and two civilians, further escalating tensions and worsening inter-Korean ties to their lowest level in decades.

"The Mongolian government strongly censures the act of North Korea's attack" against the warship, Mongolian Prime Minister Sukhbaatar Batbold said in an interview with Yonhap News Agency.

He is in Seoul for a three-day trip to celebrate the 20th anniversary of the establishment of diplomatic relations between South Korea and Mongolia.

He also expressed hope that regional powers will hold talks and coordinate policies in resolving issues on the peninsula, noting Mongolia will do its best if there is any role to play. He did not elaborate.

Mongolia is not a party to the international talks aimed at ending North Korea's nuclear weapons programs.

The North has expressed its willingness to rejoin the disarmament talks it walked away from in 2009, but Seoul and Washington demand Pyongyang first demonstrate its denuclearization commitment by action. Seoul also wants Pyongyang to apologize for its two deadly attacks.

The disarmament-for-aid talks also include China, Japan and Russia.

Pyongyang severed diplomatic relations with Mongolia in 1999, but they reportedly reestablished their ties in 2002.

Batbold also talked about the prospects of boosting economic cooperation with South Korea, noting Mongolia has abundant natural resources, including coal, and strong growth potential.

On Thursday, he held talks with his South Korean counterpart and they agreed to expand exchange visits of high-level officials and hold regular talks between their top diplomats. They also agreed to study a free trade deal. No details were given.

Also on Friday, Batbold was to attend the opening ceremony of events for the "Year of Mongolia."

Seoul designated 2011 as the Year of Mongolia and Ulan Bator named 2010 as the "Year of Korea" as part of efforts to boost their relations.

Source:Yonhap, South Korean News Agency


Tuva man makes false claims to please Medvedev about origin of throat singing and milk vodka

Tuvan Singer Kongar Ondor said Mongolia is not original place of throat singing and milk vodka. Well, I don't know about Tuva. All i know is my grandma used to make milk vodka from cow and horse milk. It is something she learned from her mom. Milk vodka is original in Mongolia for centuries.We lack fruits and berries. All we have is milk and much of it. So how can milk vodka be not native in Mongolia land of five animals!

I also know that throat singing in Kovd and Uvs, most western provinces of Mongolia is tradition and people from all over the world come to Mongolia to learn throat singing. How can Kongar Ondar say these things? How can he put Mongolia in line with China? He must have tried hard to please his Russian master by making these false claims. He must have forgotten that Tuva was part of Mongolia before 1920s. It was called Uriankhai region.

You lying Tuva man Kongar Ongar better watch you mouth next time. I understand that you was brought to Kremlin by Russians and you was nervous and afraid. Maybe it is slip of tongue.

By Shagai, contributor of

Here is original story distributed by Russian News Agency Ria-Novosti.

Russian President Dmitry Medvedev promised a singer from the Southern Siberian republic of Tuva to invite U.S. President Barack Obama to listen to the republic’s world-famous throat singing.

During a meeting between Medvedev and cultural figures in Moscow on Thursday, Kongar Ondar, a throat singer from Tuva, complained to the president that China and Mongolia often “falsely” claim that “throat singing and milk vodka” originated from their countries.

Then U.S. President George Bush professed a liking for both during a visit to Mongolia in 2005.

“I can’t promise anything as far as Bush is concerned, but I’ll try to invite Obama to listen,” Medvedev promised.

MOSCOW, March 24 (RIA Novosti)

Mongolian throat singing videos.


S. Korea, Mongolia talk economic, civilian ties

Prime ministers and foreign ministers of South Korea and Mongolia held talks here Thursday, discussing how to improve their economic ties and better cooperate in easing tensions on the peninsula, the Seoul government said.

Meeting with his South Korean counterpart Kim Hwang-sik, Mongolian Prime Minister Sukhbaatar Batbold expressed “solid support” about Seoul’s planned investment in developing mineral resources in his country and agreed on taking active measures to expand economic cooperation.

In a joint press release, the two countries also agreed to positively consider forging a free trade deal, expand cooperation on education, construction, energy, farming and green growth, and increase cultural exchanges.

Mongolia also expressed support about Seoul’s policies toward North Korea, echoing demand that the communist state must give up its nuclear facilities based on a U.N. Security Council resolution and its previous pledge made during the six-nation talks.

South Korea will continue and increase financial support to Mongolia for development particularly in the fields of medical and environment, the Prime Minister’s Office said.
Meeting with Mongolian Foreign Minister Gombojav Zandanshatar, South Korea’s Kim Sung-hwan discussed policies toward North Korea, exchange of senior officials and financial development, the Foreign Ministry said in a separate press release.

The two senior officials were among the Mongolian delegation visiting here to mark the “Year of Mongolians in Korea.” The delegation will leave the country Friday after attending an ceremony marking the year, the Prime Minister’s Office said.

Forging diplomatic ties in March 1990, Mongolia and South Korea have been increasing economic cooperation, particularly in the energy sector, within the recent years.

Earlier this week, the two countries signed a preliminary pact calling for cooperation in a clean coal development project aimed at improving energy efficiency of the fossil fuel resource.

Under the agreement, South Korea will transfer technology related to upgrading coal quality used for heating and power generation, and help developing coal and other minerals in the resources-rich country.

Several local companies, including Korea Gas Corp., Korea Coal Corp., POSCO and SK Innovation Ltd. are interested in developing resources in Mongolia, a government source said.

By Shin Hae-in (
Prime Minister Kim Hwang-sik (right) shakes hands with his Mongolian counterpart Sukhbaatar Batbold prior to their talks at his office Thursday. (Yonhap News)


Foreign ministers of S. Korea, Mongolia agree to deepen cooperation

SEOUL, March 24 (Yonhap) -- Foreign Minister Kim Sung-hwan met with Mongolian Foreign Minister Gombojav Zandanshatar on Thursday and agreed to deepen relations and cooperation between the two countries, the ministry said.

Zandanshatar arrived in Seoul on Wednesday to accompany Prime Minister Sukhbaatar Batbold on a three-day visit at the invitation of South Korean Prime Minister Kim Hwang-sik to mark the Year of Mongolia here.

In Thursday's talks, Kim and Zandanshatar expressed appreciation for the rapid development of relations between the two sides since their 1990 establishment of ties and agreed to further move the relations forward, the ministry said in a statement.

The ministers also agreed to strengthen substantial cooperation in senior officials' exchanges, polices on North Korea and energy and resources development, the statement said.


Source:Yonhap news agency of South Korea


Mongolia revokes decision to allow leopard hunting for science

ULAN BATOR, March 23 (Xinhua) -- The Mongolian government had revoked a decision it made earlier this month to allow foreigners to hunt leopards for scientific purpose, local media reported Wednesday.

Mongolian Environment and Tourism Minister L. Gansukh canceled the permission to kill four leopards for scientific purpose this year, after meeting researchers and representatives of non-government organizations to discuss the issue.

The researchers opposed the decision made by the cabinet on March 2. They said genetic research and other modern technologies made it possible to do scientific research without killing the highly endangered species.

The decision to allow four leopards to be hunted incurred opposition worldwide. Snow Leopard Network, a major organization aimed at protecting the species, sent a written appeal to the government, urging it to reverse its decision.

The Convention on International Trade in Endangered Species of Wild Fauna and Flora, an international agreement which entered into force in 1975 to protect wild animals and plants, has listed the snow leopard as one of species threatened with extinction which are or may be affected by trade.

Snow leopards normally live between 3,000 and 5,500 meters above sea level in the rocky mountain ranges of Central Asia. According to a survey conducted in 2009 and 2010, there are more than 1,200 leopards in Mongolia.

Source:Xinhua news service


Mongolia faces critical water shortfall warns UNEP report

Climate change and rapid urbanization are threatening fragile water resources in Mongolia, where more than half of the inhabitants have no access to clean water, says a report released today by the Mongolia Water Authority and the United Nations Environment Programme (UNEP).

According to the 'Urban Water Vulnerability to Climate Change in Mongolia' report, extreme temperatures and natural disasters such as droughts, flooding and heavy snowfalls are becoming more frequent and annual average temperatures have increased by 2.1° Celsius since the 1940s.

According to the report, the Mongolian climate will continue to change dramatically over the next century. Study results are emerging on the likely pattern of this future climate and projections suggest higher temperatures all year round, with more snow in winter and less rain in summer.

'Mongolia's temperature has already risen by more than 2C in the last seventy years. The study's climate scenarios suggest that the country will have to get used to having much less water in the future,' says Dr. Z. Batbayr, Deputy Director of Mongolia Water Authority. 'The impact of this will be seen across the board, through the degradation of the natural environment, ecosystems, and harm to the economy.'

All surface water in Mongolia is covered by ice for about six months a year and so groundwater is the primary source of water supply for major urban and industrial centres and the extensive animal husbandry sector. It is expected that climate change will affect groundwater resources throughout the country.

The effects of climate change have been compounded by rapid urbanization, reducing the availability of water for domestic and industrial use.

The situation is particularly serious in urban areas like the capital of Ulaanbaatar, where nearly 40 percent of the country's population resides and where increasing demand and pollution is exerting added pressure on water supplies, sanitation and other public services, adds the report.

Source: United Nations Environment Programme (UNEP)


US ambassador to Mongolia visits AAF Base in Kabul

438 Air Expenditure Wing

Story by Vladimir Potapenko

KABUL, Afghanistan - The U.S. Ambassador to Mongolia visited the Afghan Air Force Base in Kabul, March 21, as part of his tour of Mongolian military operations in Afghanistan.

As part of his visit, Ambassador Jonathan S. Addleton was presented a brief detailing the role Mongolian Air Force troops serving in regard to the continuing development of the AAF. The brief highlighted MAF efforts in instructing Afghan airmen on the engine and body maintenance of the Mi-17 transport helicopter.

Since October 2011, the six-man Mongolian contingent on the AAF Base in Kabul have been teaching courses focused on the up-keep of the Mi-17, the centerpiece of the AAF rotary-wing force.

Following the brief, Addleton presented the Mongolian team with NATO ISAF service medals as recognition of their contribution to NATO Training Mission-Afghanistan and NATO Air Training Command-Afghanistan.

“The main reason I came out here was to show appreciation for the Mongolian contribution here,” said Addleton, going on to explain how impressed he was with the level of professionalism and commitment to mission that the Mongolian troops working with NATC-A and the rest of NTM-A display on a daily basis.

Addleton cited the fact that Mongolian instructors are able to use Russian, a common historical language shared with Afghans, to communicate with AAF airmen as a particular example of their industriousness and ability to succeed in the face of challenges presented by the region.

“It was great to have someone come and recognize our work here,” said Lt. Ayushjav Myagmardorj, the Mongolian liaison officer with the 440th Air Expeditionary Advisory Squadron and NATC-A. “The work we do here is important and it is nice to see people appreciate that fact.”

“It also feels good to have a sense of home brought to us while we are away,” he added, commenting on the Mongolian cookies, newspapers and other trinkets the ambassador brought with him to Kabul.

Currently, there are approximately 200 Mongolian troops in Afghanistan, though that number is due to increase in light of a recent agreement between Mongolia and NATO to nearly double the number of troops serving in the region.


SouthGobi Resources Q4 loss narrows on higher coal prices

(Reuters) - Canadian coal miner SouthGobi Resources Ltd posted a narrower quarterly loss, as it sold more mineral at a higher price, and said it sees further improvement in prices in the first quarter.

The company, which owns the Ovoot Tolgoi Mine and two development projects in Mongolia, expects first-quarter average realized selling price per ton to rise by half, sequentially.

It sees sales to exceed the previous comparable quarter's 426,000 tons, but to be lower sequentially.

SouthGobi Resources, which sells metallurgical and thermal coal to customers in China -- one of the largest consumers of coal in the world, sold 1.5 million tons at an average realized price of $32 per tonne in the quarter, up from sales of 0.36 million tons at $29 per ton, last year.

For the October-December quarter, the company posted a net loss of $28.7 million against last year's $69.2 million.

Revenue quadrupled to $41.6 million.

China's coal imports have more than quadrupled since 2006 to 165 million tons last year, overtaking South Korea to be the world's No. 2 buyer after Japan.

Shares of the company closed down about 4 percent at $14.13 on Monday on the Toronto Stock Exchange. (Reporting by Arnika Thakur in Bangalore; Editing by Joyjeet Das) (; within U.S. +1 646 223 8780; outside U.S. +91 80 4135 5800; Reuters Messaging:

Source:Reuters news service


Denison Mines increases resources at Hairhan uranium deposit

Denison Mines (TSE:DML)(AMEX:DNN) announced Monday that it has signficantly increased uranium resources at its Hairhan deposit in Mongolia, part of the Gurvan Saihan joint venture.

Denison holds a 70% interest in the venture, with Mongolian state-owned entity Mon-Atom holding 15%, and Russian concern Geologorazvedka holding the remainder. The joint venture owns six exploration licenses, including Hairhan, totaling 181,574 hectares in the South Gobi region.

The updated NI 43-101 compliant resource estimate includes results from drilling in 2007 and 2008 in the central portion of the deposit, comprising of 278 holes totalling 46,000 metres.

As a result, the new report by Roscoe Postle Associates, estimated 12.26 million tonnes of indicated resources at a grade of 0.062% U, or 19.78 million pounds of U3O8, representing a 151% increase over the last study in February 2007. Inferred resources were calculated at 5.54 million tonnes grading 0.040% U, or 5.81 million pounds of U3O8, representing a 67% boost over 2007.

The company said the resources were estimated using a cutoff of 0.02% U over a minimum thickness of two metres.

Denison plans to advance the Hairhan exploration license to a mining license, and design a commercial scale acid in-situ recovery plant, as well as initiate site construction and development activities later this year. The company's shares rose 9% on Monday to trade at $2.8 as of 3:13pm EST.

Denison Mines Corp. is an intermediate uranium producer in North America, with mining assets in the Athabasca Basin region of Saskatchewan, Canada and the southwest United States including Colorado, Utah, and Arizona. Further, the Company has ownership interests in two of the four conventional uranium mills operating in North America today. The Company also has a strong exploration and development portfolio with large land positions in the United States, Canada, Mongolia and Zambia.


Mongolia’s historical space flight

30th Anniversary of launching a Mongolian into space
Montsame reporter Ya. Sukhbaatar stands between cosmonauts J.Gurragchaa and Vladimir Janibekov

A Mongolian man was launched into space for the first time on March 22, 1981. Citizen of Mongolia Gurragchaa Jugderdemid and Vladimir Janibekov of the USSR were launched to space from Baikonur space site in a Soyuz-39 spaceship. In space they joined two other Soviet space cosmonauts and spent 7 days 20 hours and 42 minutes there. Two Mongolian cosmonauts were prepared in 1978 to work in space under the Intercosmos program. J.Gurragchaa was chosen to fly and Maidarjavyn Ganzorig was left as Gurragchaa’s backup pilot. We introduce the conversation and reminiscence of the two men who reported on the preparations and launching of the flight on the occasion of 30 years of launching a Mongol man to space.

Witnessing Mongolia’s first manned space flight

By Ya. Sukhbaatar

I was the pupil of the 7th grade secondary educational school in Sukhbaatar Aimag when the historic event, Y.A.Gagarin’s first space flight was launched. My class-mates gathered in the classroom after hearing the news on radio of the launching of the first cosmonaut by the former USSR to the space. Although
Children had a vague idea of what happened, they were noisy and boisterous, discussing the flight of the Soviet cosmonaut and being surprised how a man could reach empty space hundreds kilometers from our planet. An event that happened 20 years ago has left an unforgettable imprint on my memory and in my heart like in the hearts of every Mongolian. In March 198,1 I had a chance to be included in the team of journalists to work for about a month to report on the joint Soviet-
Mongolian space flight. I was happy to see and observe, on some occasions from very close distance, how the space flight was launched, how diverse research and study was made on space orbit, and see the most painstaking moments of the space flight, the return of cosmonauts to the earth. The launching of the “Soyuz-39” space ship was reported by me from the Baikonur Central Space Flight Center near Moscow but the landing of the spaceship back to the earth was broadcast on radio from Jezkazgan, the Kazakh steppe region. That time, I worked in radio broadcasting service. I have to mention the role played in reporting this significant event by late Montsame commentators D.Bazarvaan and Ch.Chagdar.

It was late March 1981 and it was spring in Moscow. Members of the Mongolian delegation, journalists and reporters were housed in “Mir”(Peace) Hotel on Moscow river and they were very busy. We left Moscow to Jezkazgan in a four engine “IL-18” plane one day before Janibekov and Gurragcha’s space flight was completed. The plane “IL- 18” was considered the most reliable and safe flight ship. During our 4-hour flight we got acquainted with our Russian colleagues. Far down, beneath the window we could steppe vegetation, broomgrass, hills and hollows, stagnant waters of gray color and ponds. Soon when the stewardess announced that the plane was approaching Kazakhstan we landed in Jezkazgan. At the airport we were met by city officials, people having business relations with the space flight, and youth with bunches of flowers. Jezkazgan in Mongolian means “the Kazakh copper” and the city was one of the biggest copper processing centers. We were housed in the resort place of copper industry workers and we soon attended the friendship meeting of the engineering and technical staff and became acquainted with the industry’s workshops and departments. The industry was engaged in copper processing by anode-cathode method. Small pieces of pure copper were given to us as a gift which I keep as a souvenir even now.

The governing authorities led by deputy chairwoman of the city executive committee offered a reception for us where words of friendship and historic success were announced. This was the first time I tasted the smoked horse meat prepared the Kazakh way and ate the Kazakh “boortsog” very similar to Mongolian “boortsog” (cookies). Chinaagiin Galzan was the only Mongolian who spoke Kazakh and played the dombra musical instrument, this instrument was then was presented to Gansan as a gift. It was raining outside the next day when we got up early in the morning to meet the cosmonauts. Spring came to the Jezkazgan steppe, it was raining, the soil was muddy and we were provided with rain boots. On board the first plane that flew in the southeast direction, to meet the Soviet and Mongolian space cosmonauts, were official members of the Mongolian delegation, and rescue and medical team members. On board the next plane were reporters and journalists. It was cloudy and raining and I was a little bit worried that landing the spaceship might be impossible to watch. “It is raining and cloudy, we have to wait”, said the crew captain. All of a sudden the plane descended and landed. After landing we curiously observed and watched. Everyone was looking with interest into the sky. We waited for about an hour waiting for that most responsible and the most fascinating moment when a strong bursting sound was heard. “What’s that..?”, I’ve asked from a sports officer who was standing nearby. “This is the sound of the launching pad when it opens”,he explained to me. “Very soon the spaceship will land”, they said. I remember hearing earlier that when the spaceship was landing it would start braking from South America. This means the launching pad is very close to us, the thought flashed across my mind. The crew captain ordered us to occupy our places, the plane took off and we flew for some time and then landed again. The operators of the two planes were in permanent contact with each other. It was impossible to watch the landing of cosmonauts in the place where they landed because of rain and clouds. In order to ensure safe landing our planes stayed some distance and the operators continued to communicate with each other. We flew again and when we landed and approached, the launching pad was already on the ground and there was a long yellow instrument lying on the ground. The launching pad weighted 2.5 tones and the site around it occupied 1000 square meters. The rescue team officials, doctors and other experts were there. Our plane landed some distance away and the journalists, reporters and photo reporters started racing to occupy the most convenient place. When we approached the place, cosmonauts Janibekov and Gurragchaa were sitting in chairs with their legs covered with the green blankets. Nobody was allowed to come very close, the security force stretched a safety belt from the launch pad and the cosmonauts. They said that the technical facility released certain amounts of radiation at that moment. So the journalists were protected from that. I was preoccupied with the thought to come to the cosmonauts as close as possible. In a moment, I found myself behind their chairs, then between them asking about their health, congratulating them on their safe and sound landing and welcoming them with the successful space flight. My report about the flight of the cosmonauts to the space and their successful return back to the earth is preserved in the treasure fund of the national public radio of Mongolia. I noticed that the cosmonauts were sweaty and their faces were a little bit red. The Mongolian delegates handed to them “hadag” and a silver cup with milk. Gurragchaa just tasted the milk but Janubekov drank all the milk. The journalists and reporters began to ask questions and the photo reporters switched on the lights of their cameras. The people helped the cosmonauts to stand up and walk to the launching pad where they put their signatures and the date on the pad. Then, assisted by people, the two cosmonauts approached the plane. We occupied the seats in our plane and flew to Jezkazgan. On board the TU-134 from Jezkazgan, together with the cosmonauts, we flew to Baikonur. After a safe return in the plane, the cosmonauts ate the food with a grand appetite. This proved that they felt good, that nothing was left from weightlessness and that cosmonauts could easily be acclimatized to terrestrial conditions. After the meal, a friendly conversation took place between the cosmonauts and journalists. When we landed at Baikonur airport, the surrounding area was lightened and the sounds of welcoming march music were heard. The gathered cheered and applauded when an order was read aloud to grant the titles of hero of the USSR and MPR and the highest State awards to J.Gurragchaa and V.Janibekov. Then, the caravan of cars with cosmonauts moved to the hotel for the cosmonauts situated in the north of Baikonur in the Leninsk town. One of the city streets is being renamed to “Cosmonauts Street”. According to the tradition established since Yuri Gagarin’s flight to space in 1961. The next morning, the two cosmonauts planted a memorial tree. It was the 51st tree planted after the historic space flight of Yuri Gagarin. I am still confident that Gurragchaa was not the last and that another Mongolian will fly to space again. On the same day V.Janibekov and J.Gurragchaa called for a press conference and shared views with journalists about the space flight and their experience. In his interview with the TASS reporters on April 2, the vice president of the Russian Academy of Sciences, the Intercosmos Council leader, academician Vladimir Kotelnikov, said the following about the results of the space flight: “Though it is too early to make a final conclusion on the joint Soviet-Mongolian scientific space flight, we can say with full confidence that flight was successful.” After having 7 days rest in the Baikonur space hotel J.Gurragchaa and V.Janibekov returned to Moscow and the Space township.

Y.Sukhbaatar is a graduate of the secondary educational school in Sukhbaatar
Aimag and the class of Russian language and literature of the Mongolian State University. After completing his studies at the University, he started his journalistic career as translator and editor at the MONTSAME Foreign Information Desk of the then State Committee on Information, Radio and Television. Serving
the State for more than 40 years, he worked as a translator in the Mongol language broadcaster editorial office of Radio Moscow Chinese language, editorial staff for national regions, as editor and chief editor of the propaganda desk of Radio Mongolia, as chief of the department of Montsame foreign information desk, and as chief editor and senior editor of the desk.

Source:Mongol Messenger, english weekly newspaper of Montsame newspaper, mongolian news agency

Amendments to be made to the Shareholders' Agreement of Oyu Tolgoi Company

At the cabinet meeting held on March 16, government members got au fait with the process of amending the Investment Agreement signed by Government of Mongolia and
Ivanhoe Mines Mongolia, Inc, Ivanhoe Mines Limited, and Rio Tinto International Holdings Limited.During the period since the agreement was established, issues on cutting interest on financing and resolving means and conditions of effectively financing to the Mongolian side were frequently discussed at the negotiations
and meetings of the Board of Directors and shareholders of the company. Minerals and
Energy Minister D. Zorigt said that as a result, the sides reached an agreement.
It was agreed with the investor side to cut the interest of total financing to be made to the Oyu Tolgoi Project into LIBOR (The London Interbank Offered Rate) plus 6.5 percent, to give the Mongolian side a right to make financing and take part in financing the project, to receive financing from a third body in the first instance, to use funding hedging options if required, to alter the issue
on preferential shares that were previously stated in the agreement, as well as to not lower Mongolia’s ownership of 34 percent in any case.

Pursuant to the interest of financing and loans: As a result of the talks, it was
agreed with the investor to change the interest of total financing and loans to be made within frames of the project into LIBOR plus 6.5 percent. Previously, it was 9.9 percent plus the American consumer price index. The newly agreed interest of financing and loans is more effective to the Mongolian side and is equivalent to the interest of a long-term loan being disbursed to State-run entities in the
international market. It will come into effect on January 31, 2011.The right of the Mongolian side tofinance: The sides agreed that the Mongolian side will have a right to make financing equating to its size of ownership in total amount of money required to the project at any time. Also, the company will introduce a plan of required money for next 12 months to the Board of Directors and shareholders when it approves the action plan and budget for the next year with the purpose to create
a condition so the Mongolian side can make financing.
Funding hedging options: The interest of total financing and loan of the project is
LIBOR plus 6.5 percent. In case LIBOR has a higher cost to the company and shareholders, depending on world economics and financial situations, the company will study funding hedging options and take required measures. Also it was agreed together to reconsider the interest of funding and the loan every 7 years.
Project funding from a third body:The Company will get project funding from a third body which is fruitful and suitable for Oyu Tolgoi from the international banking market in the first instance.Mongolia’s ownership will not be lower than 34 percent: It was previously stated inthe agreement that Mongolia’s ownership of 34 percent will not be lowered. It has been confirmed to not lower Mongolia’s ownership without its permission regardless of whether it made a resolution to make financing to the company or not.
Preferential shares: With a purpose to completely change the issue in relation to
preferential shares that was previously stated in the 11th of the Shareholders’ Agreement, it was decided to remove it from the agreement. Instead, it will be financed with a document of loan rights.
Others: According to the agreement, Ivanhoe Mines Limited, and Rio Tinto
International Holdings Limited, have to negotiate the with Mongolian government and
receive permission in writing before they sell or transfer their shares at Oyu Tolgoi Company to any State-owned entity and/or persons who have direct and indirect connections with the Oyu Tolgoi Company. Sides of the Investment
Agreement agreed to verify the issues on limiting to sell and transfer shares by each establishing an agreement and signing it.

Source:Mongol Messenger, English Weekly newspaper of Montsame News Agency.


Mongolia offers deepest condolences to Japan

On March 11, Mongolia’s President Elbegdorj Tsakhia sent a letter of condolences to the Emperor of Japan and the people of Japan. He wrote: “On behalf of the Mongolian
people and myself, I extend our deepest sympathies to You, Your Imperial Majesty the King of Japan and to the people of Japan for the loss of so many lives and property due to the earthquake and tsunami that hit Japan. In our minds and hearts, the people of Mongolia are together with the people of Japan at this difficult time. We are confident that you will overcome the consequences of the natural disaster in a short period of time and bravely and patiently overcome these difficult challenges.” On March 13, Parliament Speaker D.Demberel expressed deep condolences to Takahiro Yokomichi, the speaker of the House of Representatives of Japan’s parliament; to Takeo Nishioka, the speaker of the House of Councilors and to the people of Japan for the loss of many lives and damage to properties caused by the deadly earthquake and tsunami. “On behalf of myself and the Parliament of
Mongolia, I offer my deep sympathies to the parliament of Japan and the Japanese people for the deaths of many people and losses to properties due to the strong earthquakes and tsunami. The Mongolian people are together with the people
of Japan in our hearts, and share the grief at this difficult time. We believe that you will eliminate the disaster consequences in a short period of time and will bravely and patiently overcome these hard challenges,” the letter of condolences
says.On March 11, Prime Minister S.Batbold sent a letter of condolences to Mr. Naoto Kan, his Japanese counterpart.

“Please accept deep condolences from me and our Government over the deaths of many people and the loss of property caused by the deadly earthquake and tsunami that occurred in Miyagi prefecture. We are confident that the industrious and diligent Japanese people will overcome the consequences of the natural disaster in a short
time,” the letter says. On March 12, the Ministry of Foreign Affairs of Mongolia offered deep condolences to the Government and people of Japan for loss of many lives and damage to properties caused by the deadly earthquake and tsunami that took
place in the northeastern part of the Pacific. “The government of Mongolia will give all possible prompt assistance to Japan’s government and people. The people of Mongolia are together with the people of Japan at this difficult time in our hearts. We are confident that you will eliminate the disaster consequences in a short time and will overcome these hard challenges,” the Ministry says.

Source:Mongol Messenger, English weekly newspaper of Monstame News Agency. Montsame is the official news agency of Government of Mongolia.


President Elbegdorj calls Burma’s pro-democracy leader Aung San Suu Kyi on the phone

Chiang Mai (Mizzima) - The president of Mongolia, the first democratic state in Central Asia, has extended his support to Burma’s pro-democracy leader Aung San Suu Kyi in a telephone call, according to the US Campaign for Burma.

President Elbegdorj, who co-drafted Mongolia’s 1992 Constitution, said that Mongolia’s transition from Communism to democracy could be seen as an example of moving from oppression to freedom and that free market reforms and human rights can be linked to economic development in Burma.

‘I would encourage Burma’s rulers to realize that democracy should not be feared but embraced’, said Elbegdorj.

Noting the waves of pro-democracy movements that have spread throughout the Middle East in recent weeks, Elbegorj said he believed that the Burmese people could realize democracy in their own oppressive state.

‘As we continue to watch the millions of people struggling in the Middle East for greater freedoms and oppressive regimes fall, I am confident that the strength of the Burmese people, to peacefully but forcefully push for the democracy that is rightly theirs, will be realized’, he said. ‘No amount of oppression or the longstanding violence against the Burmese and ethnic groups can stand against a people that want to be free’. (Burmese News Portal)


Australia-Mongolia Trade Relations, according to Inner Mongolian professor

Li Narangoa, an Inner Mongolian national and professor of Australian National University gave interview about Mongolia-Australia trade relations to World Politics Review

Australia and Mongolia recently signed a number of agreements to increase bilateral business and educational cooperation. In an e-mail interview, Li Narangoa, a professor in the School of Culture, History and Language at the Australian National University, discussed Australia-Mongolia relations.

WPR: What is the extent of existing trade between Australia and Mongolia?

Li Narangoa: Trade between Australia and Mongolia has been small, with a total value of about $25 million in 2010. Though Australia and Mongolia established diplomatic relations in 1972, a serious trade relationship began only in the 1990s, when Mongolia introduced a democratic political system and free-market reforms. Trade mainly comprises the export of mining equipment and civil engineering services, along with a very limited volume of agricultural products such as wine, beef and lamb sent from Australia to Mongolia.

WPR: What are the areas of greatest potential for further development between the two economies?

Li: The greatest potential for further development between the two countries is the mining and resources sector. Australia and Mongolia are both rich in minerals and energy resources. Mongolia is set to become a mining giant in the Asia-Pacific region, and Australia's considerable experience in mining puts it in a position to assist Mongolia in realizing its potential. The two governments set up a joint working group to discuss collaboration in the mining and energy sectors in 2007, and the group now meets once every two years. In 2008, Mongolia set up an embassy in Australia. During a visit by Mongolian Prime Minister Sukhbaatar Batbold to Canberra in February 2011, a memorandum of understanding was signed on vocational education cooperation, aimed at helping Mongolia build the capacity of its mining workforce.

Roughly 20 Australian companies are already involved in mining and energy exploration in Mongolia -- including Rio Tinto, BHP Billiton and Leighton -- and they hold significant mineral leases there. Moreover, a growing number of Australian companies are interested in doing business in Mongolia. The Australian government has recognized Mongolia's economic potential, and the Australian Trade Commission will open a permanent office in Ulaanbaatar in 2011.

WPR: Beyond trade, what are the opportunities and challenges facing the bilateral relationship going forward?

Li: There are increasing interests in political and scientific exchanges as well as in sharing expertise in education and agriculture. Three additional agreements were signed covering these aspects during Batbold's February visit. By providing scholarships, Australia's development cooperation program has been contributing to Mongolia's human resource development. Mongolian students without a governmental scholarship, however, find it very difficult to get an Australian visa because of the stringent conditions that Australian immigration procedures require -- especially proof of financial support for their studies in Australia.

Both Mongolia and Australia are rich in minerals such as copper, gold, coal and uranium, and they have strong incentives to collaborate in the mining and energy sector, as mineral resources make up a high percentage of their trade incomes. But that means that they are also potential competitors for the same markets in the Asia-Pacific region -- China and Russia in particular. That will present challenges to both countries' efforts to collaborate in areas of common interest. For Mongolia, the priority is to create a stable political and legislative environment for Australian investors.


Wrestling 'in our blood,' says Bulldogs' Luvsandorj

Turtogtokh Luvsandorj

By Jeff Hartsell

Where Turtogtokh Luvsandorj comes from, wrestling goes back a long way.

And we're not talking the 1980s heyday of Hulk Hogan, either.

Luvsandorj, a sophomore at The Citadel who will participate in the NCAA championships starting today in Philadelphia, is from Ulaanbaatar, Mongolia, the capital city of the Asian country that lies between Russia and China.

And wrestling is deeply ingrained in Mongolian culture, tracing all the way back to cave paintings, of grappling men surrounded by crowds, from 7000 B.C. In the 13th century, Genghis Kahn used wrestling to keep his soldiers combat-ready. Wrestling is one of Mongolian culture's "Three Manly Skills," along with horsemanship and archery.

"It's in our blood," said Luvsandorj, who is ranked No. 15 in the nation at 165 pounds.

Luvsandorj is one of a growing number of Mongolian wrestlers who are putting their heritage to good use at colleges in the U.S.

Ganbayar Sanjaa, a junior at American University, is also from Ulaanbaatar and qualified for the NCAAs at 149 pounds, where he is ranked No. 8. Minga Batsukh, a senior at St. John's University in Minnesota, just won the Division III national title at 149 pounds, his third national championship. He also is from Ulaanbaatar, and like Luvsandorj, attended St. Benedict's Prep in Newark, N.J.

"Little by little, there are more Mongolian wrestlers coming to the States," said Citadel coach Rob Hjerling. "In talking to Turtog, it's expensive to train there, and finances and resources can be an issue. If we can get them over here to train the way we train, they can take that experience back with them, and it would be a win-win for us and for the Mongolians. There are a lot of talented wrestlers there."

Luvsandorj grew up in Ulaanbaatar, where his father and an older cousin introduced him to Khapsagay, the folk wrestling style of Mongolia. And having a twin brother, Turbat, gave him a constant training partner.

When he was 15, Luvsandorj and his brother left Mongolia for St. Benedict's. The head coach of the Mongolian team had taken his squad to the U.S. to compete and met the coach at St. Benedict's when the team practiced there. A pipeline was quickly constructed, with Batsukh the first Mongolian wrestler to make the journey, followed by the Luvsandorj brothers and others.

It was difficult for Turtog at first, especially in the classroom at the all-male Catholic school. He knew little English and struggled even in the English as a Second Language classes. But on the mat, he quickly learned the U.S. style and compiled a 130-23 career record, earning high school All-American honors. Turtog wanted to wrestle at a U.S. college and keep his student visa, but Turbat decided to return home to Mongolia to wrestle for the national team.

By August 2010, Turtog was living in Brooklyn with little money, no college scholarship and his visa about to run out. Turtog had not been interested in The Citadel in the spring, but by August "he was all ears," Hjerling said. Hjerling offered Turtog a scholarship on a Friday, and a week later Luvsandorj was getting his head shaved to prepare for his knob year at the military school.

Hjerling's gamble paid immediate dividends. Turtog went 26-12 as a freshman, won the Southern Conference title at 157 pounds and qualified for the NCAA championships along with the Bulldogs' Oddie Delaney.

This season, Luvsandorj moved up to 165 pounds and compiled a stellar 38-8 record. He was ranked as high as No. 6 in the nation earlier in the season, the highest a Citadel wrestler has ever been ranked. He was named SoCon wrestler of the year, but lost a 4-3 overtime decision to Appalachian State's Kyle Blevins in the final of the SoCon championships.

That loss might have cost Luvsandorj one of the 12 seeds at the NCAA championships. But with an 8-1 record against ranked competition this season, he has a realistic shot at a top-eight finish, which would make him just the second All-American in Citadel history.

"My goal is to win the whole thing," said Luvsandorj, who wrestles today against No. 7 seed Shane Onufer of Wyoming.

He has aspirations beyond this weekend, as well. Luvsandorj plans to return home to Mongolia this summer in an effort to make the national team and compete in the Asian Games and eventually the World Games and Olympics.

"Turtog was good when he got to The Citadel, and he's definitely better now than he was last year," Hjerling said. "He studies himself, he studies his opponents, watches video constantly. He's passionate about the sport."

As he should be. It's in his blood. (American newspaper in Charleston, South Carolina)


Mongolian Coking Coal Project Attracts Global Mining and Steel Companies’ Bids

The rising cost and increasing scarcity of good coking coal supplies are pushing both mining firms and steel makers into competition with each other for the remaining resources in some pretty remote locations. Witness the fierce battle unfolding in Mongolia, where miners like Vale and Xstrata are competing head to head with steel makers like ArcelorMittal and Posco. Throw in various consortiums or trading companies and even the Russian Railways and utility firm Korea Resources Corp. and you have a pretty eclectic mix of bidders!

At stake is reported by Reuters to be the largest untapped coking coal reserve left in the world. Mongolia’s Tavan Tolgoi is estimated to hold some 6 billion tons of coal including coking coal and high-grade thermal coal. Tavan Tolgoi is only 270 kilometers from the Chinese border, although that is still a long way from any major steel manufacturing locations; China is generally considered the most viable market for Mongolian coal. Indeed, the country is already the No. 2 supplier of coking coal to China behind Australia, exporting 16.6 million tons last year, up nearly threefold from 2009 and just 2.5 million tons in 2005. Tavan Tolgoi, in Mongolia’s south Gobi region, consists of six coal fields and Tsankhi (the project currently up for bidding) is the main one, containing most of its coking coal resources. This first phase will add 15 million tons of coal per year to Mongolia’s total production, eventually rising to 30 million tons by the middle of the decade.

Coal is just part of Mongolia’s massive mineral wealth; others include iron ore, copper, gold etc., drawing increasing attention from resource hungry consumers and mining firms. The challenge for all of them is infrastructure. To put it simply, there isn’t any. Rail lines are very limited and roads even more so. Any successful bidder will have to include infrastructure as part of their development costs; consequently, estimates of this first stage project at Tsankhi are in the region of US $7.3 billion, according to one of the South Korean bidders quoted in the article.

Since the 1990s, Mongolia has adopted a largely democratic system and in recent years has begun to open up its economy to foreign investment. Inevitably, for what is in modern legal and voting terms a young country (although millennia old culturally), the challenge will be making the most of these natural resources while keeping the insidious forces of corruption at bay. Parts of Africa are an example of what can go horribly wrong when the curse of mineral riches is the only source of income. Let’s hope for our future security of supply and the well-being of the people of Mongolia that the next decade sees a sharing of the spoils and sympathetic exploitation of one of the last true wilderness regions of the world.

–Stuart Burns (Sourcing & Trading Intelligence for Global Metals Markets)


Iran boosts Mongolia ties

By Alicia Campi

Iran has been steadily increasing its ties with Mongolia and 2010 was a year of increased Iranian overtures toward Ulaanbaatar. In another manifestation of how democratic Mongolia and Iran are looking towards substantially developing their economic ties, it was announced in early December 2010 that a new Mongolian-Iranian joint venture entitled Bayan Meat, Ltd, had signed a sheep meat export contract with Mongolia's largest meat slaughterhouse, Mahimpex of Ulaanbaatar.

Mahimpex is owned by Jenco, whose wealthy president, Khaltmaa Battulga, has been the Mongolian Minister for Road, Transport, Construction and Urban Development of Mongolia since 2008.

In January 2010, an Iranian direct charter plane flew out 75 tonnes
of Halal-slaughtered lamb from the western Mongolian city of Khovd per agreement with Baruun Mongol International in the country's west, which has been exporting fresh lamb and mutton carcasses to Iran since 2007.

The president of Mongolia's Meat Association, M Lhachinbaltai, revealed that Mongolia's target 2010 volume to Iran from the two slaughterhouses was 2,000 tons. In per capita livestock ownership, Mongolia ranks first in the world, with over 35 million head of livestock, including 15.8 million sheep, the bulk of which are not exported.

During 2010, Iran had been exploring its options for Mongolian raw uranium. On October 19, Mongolian President Ts Elbegdorj received the newly accredited Iranian ambassador to China, Mehdi Safari, a former deputy foreign minister, who took up his strategic post in Beijing in the summer of 2010 as part of Iran's plan to shore up Chinese support for its controversial nuclear program.

It may not have been a coincidence that Safari made his first appearance in Ulaanbaatar less than one week after France and Mongolia signed a cooperation agreement in the nuclear energy field, covering uranium exploration and exploitation by Areva, the French nuclear power company. Arreva, which has been expanding its presence from Kazakhstan into Asia, has been cooperating with Japan's Mitsubishi Corporation since December 2009 on uranium exploration licenses on more than 14,000 square kilometers in Mongolia's Dornogobi and Sukhbaatar provinces.

Strong interest by foreign investors in Mongolia's uranium deposits has been a feature of the past year. In June 2010, during Chinese Premier Wen Jiabao's visit to Mongolia, the director-general of the Mongolian Nuclear Energy Agency signed a MOU on Radioactive Minerals and Nuclear Power Cooperation with the General Manager of China's leading uranium development and nuclear fuel company, China National Nuclear Corporation (CNNC), which in 2009 bought out a Canadian company's Mongolian uranium investment.

In January 2010, India and Mongolia renewed their agreement on civil nuclear cooperation and began considering how India would start uranium mining in Mongolia. Other recent market entries were the US company Mongolia Forward and the Canadian company Uranium One Inc. This interest has come on the heels of 2007-2008 Russian protocols with Mongolia on cooperation in the production of Mongolian uranium.

Iran and Mongolia trace their modern political relationship to 1971 when diplomatic relations were first established between the Shah's Government and then communist Mongolia. Two years later, Mongol leader Yu Tsedenbal paid a state visit to Tehran, which was followed in 1976 by an Iranian prime ministerial visit to Ulaanbaatar to sign economic, trade and science agreements. In the Islamic Republic era, Iranian contact was maintained via its embassy in Beijing and since 1997 from Moscow. Mongolian ambassadors in Prague beginning in 1973 were accredited to Tehran, but after Mongolia's democratic revolution, accreditation moved to Belgrade in 1991, Beijing in 1995, and finally to Moscow in 1997.

Since 1990, the economic relationship has been relatively minor for both countries. In that year, Iran hosted a Mongolian delegation of experts from Mongol Gazriin Tos (Mongolian Oil Ltd) and later the Iranians helped to draft the first Mongolian law on petroleum. Additional ambassadorial level discussions on petroleum took place in 2002 in Ulaanbaatar. The Shanghai Cooperation Organization (SCO) has facilitated meetings among defense and security experts of these two permanent observer nations, but Mongolia's reluctance to join the SCO as a full member, has been utilized as a rationale for Russia and China to prevent Iran from entering.

Some level of personal rapport has been established between Mongolian and Iranian leaders at international forums. In 2003, the two presidents met in a Malaysian conference, and that same year Mongolia contributed 1,000 woolen blankets after the Iranian earthquake. At the 2009 Non-Aligned Summit in Havana then Mongolian president N Enkhbayar met with Iranian President Mahmoud Ahmadinejad to reportedly discuss their nations' historical ties and the Hazara minority people. Hazara are Shiite Turko-Mongols in Afghanistan who have been repressed by the Taliban and the Afghan majority Sunni population. Continuous war and brutalities resulted in Hazara migration to Iran as well as to Pakistan; however, Hazaras in Iran accuse the Iranians of maltreatment.

For the last 20 years, Hazara elements have appealed for Mongolian sanctuary and support to prevent Iranian forced repatriation to Afghanistan. Mongolia responds cautiously on this issue, because its balance of power strategy in Eurasia, based on its "Third Neighbor" concept, sees expanding ties to Iran as one partial counterweight to China's economic monopolization.

Mongolian Defense Minister Luvsanvandan Bold will make an important visit to Washington this month to meet with Pentagon officials including US Secretary of Defense Robert Gates. Although it is unclear if Iranian-Mongolian relations will be on the agenda, it may come up in bilateral discussions on how to deepen cooperation on the terrorism issue.

It would be in US interests, as well as Mongolian, to find other ways to utilize Mongolian meat products to counter growing Iranian penetration of this key sector. Around five years ago, there was some discussion by an USAID agricultural expert of encouraging Mongolian meat sales into Afghanistan, which often suffers from meat-shortages, but this concept still has not been realized.

Whether it is meat or uranium, the US policymakers should do more than passively monitor Iranian courting of Mongolian resources and instead try to facilitate its economic ties with other states to offset Iranian inroads into this strategically important country.

Dr Alicia Campi has a PhD in Mongolian Studies, was involved in the preliminary negotiations to establish bilateral relations in the 1980s, and served as a diplomat in Ulaanbaatar. She has a Mongolian consultancy company (US-Mongolia Advisory Group), and writes and speaks extensively on Mongolian issues. (Asia Times)


Mongolia lends helping hand to Japanese brothers and sisters

On Tuesday, March 15, in response to the Tohoku district-off the Pacific Ocean Earthquake, the Government of Japan decided to accept an emergency rescue team from Mongolia. The team is scheduled to arrive at Narita Airport on the afternoon of the same day.

The rescue team is composed of 12 members from the National Emergency Management Agency of Mongolia. (The activity area and the time the team arrives at the site is now being coordinated.)

On March 11, the Government of Japan received from the Government of Mongolia letters of condolences and sympathy from His Excellency Mr. Tsakhia Elbegdorj, President of Mongolia, and His Excellency Mr. Sukhbaatar Batbold, Prime Minister of Mongolia. On March 12, the Government of Mongolia decided to offer 1 million USD and relief supplies (blankets etc.), and proposed that it is ready to dispatch an emergency rescue team. The Government of Japan is deeply grateful to the cooperation of the Government of Mongolia.

(*This is a provisional translation. The above date denotes the date of the issue of the original press release in Japanese.)

Source:Japanese Ministry of Foreign Affairs (

Korean builders eye Mongolian rail

A consortium of 19 Korean construction companies is likely to win a 1,000 kilometer railroad construction project in Mongolia worth $3 billion.

According to Lotte Engineering & Construction, the consortium, along with Korea Rail Network Authority, submitted its preliminary business plan as a part of its bid to the Mongolian representatives a week ago.

This followed an agreement by the Korean government to cooperate on the railroad project at the request of the Mongolian government in 2009.

“Countries such as China and Russia have shown interest in the Mongolian railroad project, but as a result of long cooperation, Mongolia has raised its expectations of our technology and governmental support,” said Lim Young-sik, team leader at Korea Rail Network Authority. “The Mongolian government wishes to start the project as soon as possible.”

Construction of the railroad will take place between Taban Tolgoi and Zuunbayan, and Sainshand and Choybalsan, which stretches over 1,040 kilometers.Building is expected to last five years as the Korean consortium will be responsible for the first stage of the planned 5,500 kilometer railway.

Mongolian government officials are expected to visit Korea to sign a memorandum of understanding with the consortium this month.

The railroad construction is related to the exploitation of Mongolia’s abundant coal reserves.

Although the country has plenty of natural resources such as bituminous coal, copper, zinc, and molybdenum, it lacked infrastructure to extract and ship the raw materials.

“The Korean consortium has received a positive response from the Mongolian side on our business plans to connect the Taban Tolgoi mine with the railroad,” said Do Eun-dae, vice president of Lotte E&C.

Taban Tolgoi is estimated to have coal reserves of 6.4 billion tons, making it one of the biggest coal mines in the world.

By Park Il-han, Jung Seung-hyun []


Opinion: Get Rich In The Land Of The Blue Sky

The story of Mongolia's resurgence is mouthwatering for investors for a very simple reason. Mongolia is rich in natural resources… and it sits next to the world's most voracious consumer of those resources, China.

Beneath Mongolia's rugged mountains and slumbering sands lie huge untapped resources of copper, coal, gold, uranium, iron ore, oil and more — only recently discovered. Already, Mongolia's exports are up 50% from 2009, swelling Mongolia's cash reserves to $1.8 billion.

But there is a long way to go. Production of coal, iron ore and crude oil should rise 10-fold over the next 10 years. As of now, the 10 largest deposits are worth over $1.3 trillion. For perspective, Mongolia has a $4.5 billion economy.

Oyu Tolgoi is one of those big deposits. It is a joint venture between Ivanhoe Mines and Rio Tinto. It is the world's largest new copper and gold mine, with some 80 billion pounds of copper and 46 million ounces of gold. Here is the mind-boggling part: This one mine will represent about 30% of Mongolia's economy when it starts producing. Just one mine!

Another big one is Tavan Tolgoi, which is in what may be the largest undeveloped coking coal district in the world, with more than 6 billion tonnes of coal. This is another multibillion project. They'll start building it sometime this year.

There are staggering piles of wealth for a nation of only 3 million people. Some believe these resources could turn Mongolia into another Qatar or Norway.

Qatar is an example of a country that got rich after exploiting a massive natural resource. In Qatar, it was natural gas. The Qatari stock market went from $4 billion in 1998 to $104 billion by 2010 — a 27-fold increase!

Another example is Kazakhstan, as Brad Farquhar, a correspondent and friend from Regina, Saskatchewan, points out. Farquhar is the co-founder and vice president of Assiniboia Capital. Farquhar has been making regular investing field trips to Mongolia, enthralled by the opportunity he sees there.

"The Kazakhstan stock market went from something like a billion-dollar market cap to $100 billion in eight years," he writes:

"Mongolia, I think, is on a faster growth track with a more diverse resource base. It also has better logistics than Kazakhstan to access markets in China, Eastern Russia, Japan and Korea. Plus, Mongolia is a free and open democracy… And the Mongolian stock market just surpassed the $1 billion market cap mark."

That stock market was the best performing in the world last year, up 125%. My guess is that is only the beginning of a long bull market. Eurasia Capital estimates that Mongolia will be the fastest-growing economy in the world over the next decade.

The Mongolian currency, the tugrik, was the second-best-performing currency last year against the dollar, up 9%. Farquhar sent me a neat little stack of fresh Mongolian tugriks. It's colorful money.

The blue-green five spot features Sükhbaatar, an important figure from Mongolian's struggle for independence in 1921. On the reverse side is a pastoral scene of horses eating grass with mountains in the background.

"I went to Mongolia last summer," our correspondent continues:

"I came home convinced that the country will do incredibly well over the next decade…. In order to try it out myself, I opened an account on the Mongolian Stock Exchange in early November, and I have been searching out companies on other global exchanges that have significant Mongolian exposure. In the first four months, my own Mongolia-specific portfolio is up 84%, and I have some friends and colleagues clamouring to get in."

There should be other opportunities, too, outside of mining. Mongolia will need to double its power output in the next five years at a cost of at least $2 billion. It needs highways and railroads. All that mining will need water. Mongolia has water in deep aquifers beneath its deserts and there are northern rivers it could divert, but all this too costs money. Somebody has put all that together.

Mongolia has waited a long time for another turn at bat in a big game. In the 13th century, Mongolia was the seat of the largest territorial empire the world has ever known. The hordes erupted out of Central Asia, conquered Russia, China and most of the Middle East. (Only the powerful armies of the Mamluks of Egypt checked the hordes' advance at the Battle of Ain Jalut.) Pax Mongolica reigned until the arrival of the Black Death. As far as the rest of history goes, Mongolia hasn't registered much since.

Now, thanks to its mineral wealth, it looks like Mongolia will enjoy another turn on the big stage with the eyes of the world watching — and some getting rich, besides.

Chris Mayer
Penny Sleuth


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