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

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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.

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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.

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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’.


Source:www.mizzima.com (Burmese News Portal)

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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.


Source:worldpoliticsreview.com

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Wrestling 'in our blood,' says Bulldogs' Luvsandorj

Turtogtokh Luvsandorj

By Jeff Hartsell

jhartsell@postandcourier.com

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.

Source:www.postandcourier.com (American newspaper in Charleston, South Carolina)

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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

Source:agmetalminer.com (Sourcing & Trading Intelligence for Global Metals Markets)

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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.


Source:www.atimes.com (Asia Times)

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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 (www.mofa.go.jp/

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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 [seungjung@joongang.co.kr]

Source:joongangdaily.joins.com

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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.

Sincerely,
Chris Mayer
Penny Sleuth

Source:www.istockanalyst.com

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Ivanhoe, BHP have new discovery in Mongolia

TORONTO, March 14 (Reuters) - Ivanhoe Mines (IVN.TO: Quote) said on Monday it discovered a new shallow copper, molybdenum and gold zone located about 10 kilometers north of its huge Oyu Tolgoi copper-gold project in Mongolia.

The new discovery known as Ulaan Khud North is within an exploration area that is a part of Ivanhoe's joint-venture with giant Anglo-Australian mining company BHP Billiton(BHP.AX: Quote)(BLT.L: Quote).

Ivanhoe, which is run by well known mining financier Robert Friedland, said it believes the near-surface discovery at Ulaan Khud North may be part of a much larger deposit. (Reporting by Euan Rocha, editing by Gerald E. McCormick)


Source:Ivanhoe Mines

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Trendfield Holdings Limited Believes That Its Mongolian License 13602X Has the Potential to Be a World-Class Epithermal Polymetallic (Ag, Au, Pb, Cu) Deposits

BEIJING--(Marketwire - March 14, 2011) - In March 2010 THL Mongolia Ltd. purchased 70% of KMNG LLC (KMNG) holdings. KMNG is located in Ulaanbaatar, Mongolia and owns 3 exploration licenses 13602X, 13603X and 13408X. These licenses are located in the South Gobi Province at the southern border of Mongolia, in the territories of Hanboulag, Khanbogd, Sayshand and Dalanazadgad. The cumulative area of the licenses is 1935.5 km2.

KMNG's geological mapping program took place over a three month period (from July 19, 2010 to 25 October, 2010). This phase resulted in a collection of 491grab samples. The grab samples were submitted to Act-labs Mongolia and analyzed for Au, Ag, As, Cu, Mo, Pb, Zn and Sb contents. In total, 4 338.45 line-km of geological traverses were completed over the 3 licenses during the first phase of exploration works.

The 3 licenses lie within the southern Mongolian Paleozoic tectonic superblock. They overlap on the Khutag uul cratonal block and the Sulinkher accretionnary wedge. The stratigraphy consists of Neoproterozoic Limestone and quartzite, trusting over the Lower to Upper Devonian volcano-sedimentary sequences and intruded by Middle to Upper Devonian Khatanbulag intrusive complex. The lithology of intrusive rocks consists of gabbro, diorite, quartz diorite, granodiorite, biotite granite and leucogranite. Numerous dykes of granite porphyry, syenite porphyry, rhyolite porphyry are widely distributed within the Khatanbulag intrusive complex. Flat lying Cretaceous and quaternary sediments deposited in small basins cover a large proportion of Nomgon Uul and Shand Uul licenses.

The hydrothermal system consists of clay alteration, widespread zones of limonitization, structurally controlled extensive quartz veins, frequently occurring manganese oxides and galena, little pyrite and epidote. Calcite veinlets are usually observed along quartz veins.

The 3 exploration licenses chosen by THL were initially selected based upon their impressive polymetallic historical geochemical anomalies associated with favorable geological, tectonic and structural settings. These favorable criteria were confirmed by the results of recent exploration works, especially in the Khairkhan Uul tenement (license 13602X). This permit itself holds potential for different types of mineralization, and as a result, is sectioned into 3 primary targets and other prospective zones.

The Altan Khudag target (Northeastern area of the license 13602X) is highly prospective for polymetaliic epithermal Ag, Au, Pb, Cu mineralization. These occurrences have many similarities with Low-sulphidation epithermal Au-Ag mineralization and seem to be closely related to an ellipsoidal granitic intrusion of Late Paleozoic located in the NE end of the license. This zone is our key target for the discovery of a polymetallic epithermal Au, Ag, Pb, Cu deposits.

The Dergehiin Khuda target located in the central region of the license 13602X has potential for porphyry Cu, Sn, W type mineralization as suggested by the presence of numerous small veins mineralized in wolframite, Tin and copper hosted within a shallow porphyritic intrusive body of irregular shape.

The southern region of license 13602X has potential for skarn related mineralization, as suggested by the identification of skarns along the contact of a late Permian sub-volcanic intrusion with Devonian limestone. A magnetite rich body of 350 m long and 2.6 m wide crops out within this target.

Based on geological, structural, and alteration mapping combined with assay results of grab samples THL believes License 13602X has the potential to be a world-class epithermal polymetallic ( Ag, Au, Pb, Cu) deposits. A 3.5 km long and 700 m wide zone has been clearly defined to contain high grade Silver-Lead, Arsenic, Stibnite and moderate grade gold, copper and zinc in grab samples. The average silver grade of all grab samples randomly collected from this zone is about 200g/t. In this type of mineralization, gold and silver grade usually increases at depth within the ore body. Very high and consistent grades are therefore sought in drill intercepts.

This area has been prioritized for the next step of exploration work including systematic soil sampling, ground geophysics, trenching and an initial exploratory drilling. The next phase of exploration will begin spring 2011.

THL Mongolia Ltd. is fully owned subsidiary of Trendfield Holdings. Trendfield Holding is a private mining exploration company with offices in Beijing, Hong Kong, Niamey and Ulaanbaatar.

Contact Information
Marketing: Christopher Lyon
Office: 86-10-8567-9215
Email: Email Contact
Website: www.trendfieldonline.com


Source:THL Mongolia

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GTSO Eyes April for First Shipment of Mongolian Rare Earth Ore

Rare Earths to be Sent by Rail to Russia and Sold to Highest Bidder

SAN JOSE, Calif.--(BUSINESS WIRE)--Green Technology Solutions, Inc. (OTCBB:GTSO) announced today that its joint venture with Rare Earth Exporters of Mongolia (REE) plans to ship its first batch of rare earth ore from Mongolia in April to be sold to the highest bidder.

GTSO President and CEO John Shearer said on Friday that the rare earth ore will be sent by truck from the mines to Ulan Bator, Mongolia’s capital, where it will be shipped by rail to the international seaport of Vladivostok, Russia. While in port, the ore will be sold to the government or corporation that places the highest bid.

“We’re targeting April for this initial shipment, but the final shipping date may well come sooner,” Shearer said. “We’ve already been contacted by interested parties hoping to purchase Mongolian rare earths from us, and we plan to begin fulfilling demand as soon as we possibly can.”

GTSO and REE formed their joint venture last month to obtain rare earth mining claims and operations in Mongolia. The global supply of rare earth elements, vital to worldwide manufacturing of everything from consumer electronics to superconductors, is dominated by China. The emerging Communist superpower produces more than 95 percent of the world’s rare earths and has repeatedly slashed mining permits and export quotas in recent years as part of the government’s global economic strategy. However, many experts believe that China’s neighbor to the north, Mongolia, contains rare earth deposits rivaling any in the world.

GTSO’s joint venture plans to tap into those deposits to checkmate China’s iron grip over the critical materials and ensure a dependable supply stream to the U.S. and its allies. Last week, the JV executed a new land lease agreement in Mongolia’s mineral-rich province of Tuv. Negotiations for additional mining properties inside the developing nation are ongoing.

Shearer sent a letter last Wednesday requesting the Embassy of Mongolia’s assistance in guiding the joint venture through the proper channels and authorities in transporting mining ore within the country. GTSO is in communication with Russian Railways for the purpose of coordinating rail transport of its mining ore from Ulan Bator to Vladivostok. The company’s strategic exporting plan purposefully avoids moving any mining ore through China.

“We’ve been told by embassy officials that Mongolia is over-reliant on trade with China and that the government seeks to encourage trade with other nations, such as the U.S.,” Shearer said. “We are taking pains to follow the letter of the law in the nation of Mongolia in order to ensure that our dealings there are mutually beneficial.”

For more information on the joint venture’s transportation strategy, please visit http://www.rareearthexporters.com.

Green Technology Solutions commercializes clean and renewable mining technology and products in a sector that includes Cameco Corp. (NYSE: CCJ), Panasonic Corporation (NYSE: PC), Northrop Grumman Corporation (NYSE: NOC) and Rare Element Resources Ltd. (AMEX: REE).

About Green Technology Solutions, Inc.

Green Technology Solutions, Inc. (GTSO) is an OTCQB publicly traded company. OTCQB is the middle tier of the OTC market. OTCQB companies report to the SEC or a U.S. banking regulator, making it easy for investors to identify companies that are current in their reporting obligations. GTSO acquires, develops and implements the newest clean mining technology to enable our partner clients to expand operations throughout the world. Environmental restrictions represent the largest restriction to mining industry growth and operations. GTSO focuses on overcoming these environmental restrictions with brilliant cutting-edge clean mining technology.

For more information, please visit http://www.GreenTech-Solutions.com.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: This news release contains forward-looking information within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements that include the words "believes," "expects," "anticipate" or similar expressions. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the company to differ materially from those expressed or implied by such forward-looking statements. In addition, description of anyone's past success, either financial or strategic, is no guarantee of future success. This news release speaks as of the date first set forth above and the company assumes no responsibility to update the information included herein for events occurring after the date hereof.

Contacts

Green Technology Solutions, Inc.
John Shearer, 408-432-7285
President and CEO

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South Korean consortium presents bid to build US$3 billion railway in Mongolia

SEOUL--A South Korean consortium has presented a proposal for a US$3 billion deal to build a railway serving the world's largest untapped coal mine in Mongolia, a building firm said Thursday.

Lotte Engineering & Construction said the consortium of 19 firms submitted its preliminary proposal to Mongolian officials on Wednesday.

The consortium offered to build a 1,04-kilometer railway linking Mongolia's Tavan Tolgoi mine in the south Gobi desert with the eastern city of Choibalsan over a five-year period, it said.


Source:www.chinapost.com

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Anti-Corruption Views - Launching a “global-local” anti-corruption network in Mongolia

I recently had the opportunity to co-facilitate and present at an anti-corruption meeting in Mongolia that brought together leading players from business, civil society and government agencies. The initial idea to have the meeting came from the Office of the President of Mongolia, which is keen to improve Mongolia’s image from a governance standpoint and make the country an attractive investment destination.

According to the latest Corruption Perception Index released by Transparency International, Mongolia ranks 116th out of 178 countries in terms of level and impact of corruption.

At the meeting, the aim was to explore ways in which the World Economic Forum’s Partnering Against Corruption Initiative (PACI) could support the private sector in Mongolia in a process backed by the Mongolian Government and local non-governmental organizations to improve local corporate governance standards across sectors.

This meeting was part of a larger PACI plan to create replicable and scalable models for harnessing the collective power of the private sector to fight corruption at the country level, working within the context of a public-private partnership.

After the three-day meeting, we came away with a clear commitment to initiate a local anti-corruption network in Mongolia, driven by the private sector with strong multistakeholder support, as a pilot project.

The idea is to have a strong nucleus of leading companies in Mongolia commit to adopting a zero-tolerance policy towards bribery and corruption and to implement a world-class corporate anti-corruption programme modelled on a framework developed by PACI. The network will be self-policing, and participation in the network will be taken into account by governmental agencies in the award of tenders for public contracts. Civil society will ideally play an oversight role to ensure the credibility of the network.

Corruption is all over the news all the time, and most businesses are acutely aware of the impact of corruption on the cost of doing business globally, which is currently estimated at up to 10%. These statistics represent a formidable obstacle to the socio-economic development of many countries, with total bribes paid in 2003 estimated at least US$ 1 trillion.

Until now, most anti-corruption initiatives have been global in nature. A worldwide effort across countries and industries coordinated through global anti-corruption initiatives such as the United Nations Convention against Corruption for the public sector and PACI for the private sector are clearly necessary.

That said, with the emergence of strong national chambers of commerce in many countries as well as substantial resource flows within countries with the potential to support high levels of in-country corruption, more needs to be done to support the development of country-based, private sector driven anti-corruption networks. Furthermore, these networks need to be closely linked with the global anti-corruption initiatives.

I am very excited about the initiation of this project because I only see great things to come. First, joining local and national anti-corruption networks with global initiatives will offer smaller organizations the credibility they need to attract a critical mass of leading local companies, while at the same time retaining local ownership of the corporate anti-corruption fight to ensure a high level of local engagement.

Second, the approach provides local companies with the tools they need to upgrade their own corporate anti-corruption programmes and further enables them to take advantage of world-class anti-corruption expertise by joining a global corporate network.

Finally, the integrated approach enables local companies to effectively and collectively engage with other key stakeholders, for example governmental agencies, to develop solutions to corruption.

We have high hopes for this project and are confident that key lessons and valuable models for other countries and global anti-corruption initiatives will soon follow. Ending corruption will not happen if only one company, one industry or one country takes the initiative. The fight against corruption requires the collective action and partnership of every player, at every level. What we have recently accomplished in Mongolia is just one more step in the long march towards a corruption-free world.

Arthur Wasunna is the Partnering Against Corruption Initiative project manager and a Global Leadership Fellow at the World Economic Forum. PACI is a global multi-sector, anti-corruption initiative established by CEOs to level the playing field among industries and help consolidate anti-corruption efforts. PACI brings together more than 160 companies to fight bribery and corruption.


Source:www.trust.org

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Crazy English man got lost in the Bogd Khaan Mountain and refused to be treated by Mongolian doctors

This is deja vue. Another western expatriate got lost in Bogd khan mountain in north of UB again. Last July, a young american man who was an intern in President's office froze to death in the mountain. The american hiked in the mountain with another expatriate and asked him to continue the journey without him as he was feeling tired and said he'll catch up with him in town. But he never came back to town. He got lost and wondered to mountain top with high cliffs.While it was scorching hot in UB, heavy rain storm hit that day. The man froze to death in the mountain top in middle of hot UB summer.Able bodied young man in his early 20s.

Now this time, a British man went to hike in the mountain. As usual, he got lost and whole British embassy was on its feet and started the search party. Luckily,he was found. The weirdest part is he refused to be treated by Mongolian doctors after he was found. The Mongolians wondered what a weird man. The doctors are there to help him... Maybe he thought he will catch infection:TB, AIDS.Mongolian hospitals like any other hospitals in world can offer emergency medical services without risk of infection. I remember one expatriate who got burnt his thigh by industrial boiler in a mine site. He was immediately taken to local soum (village) hospital and offered emergency help. Mongolian doctor was a young girl who just graduated Mongolian school of medicine. She treated the wound and put oil and bandaged it. The expatriate went home and treated by his local doctor. He recovered and came back to Mongolia and found the local Mongolian doctor and thanked her and passed words of his western doctor who said the oil and bandaging of mongolian doctor was very professional and therefore, i was able to continue the treatment.Thank her for your full recovery. Trust Mongolian doctors. Maybe they lack equipments and medicines. But they have good knowledge. Probably the weird British man will never get it.

So here is my advice to all expatriates who likes to hike. Don't go by yourself in the mountain. Maybe you are very able bodied man or woman. There is a reason that you don't hike in mountain by yourself. You will see that Mongolians always travel in groups in Bogd Khaan mountain. There is reason for it. It is very easy to get lost in that mountain. Check with your Mongolian colleagues for weather report and ask for advice. Just don't think " I can do it by myself. I jog everyday and I'm fit. I don't smoke or drink like these local Mongolians. I must be better and wiser than these people."

Here is Mongol Messenger story about that weird or crazy man. He must be real psycho. He claims he is buddhist who went to pray in monastery on other side of the mountain. Let be it. Maybe he should pay all the costs associated with finding him. Mongolian government does not have much extra money to spend for gone crazy englishman. One third of Mongolian's 2.9 mill people are living less than 2 dollars a day.


By Shagai, contributor of www.mongolianviews.com

Lost Englishman found safe and sound

On March 4, Zuunii Medee Daily reported that UK citizen David Mark who got lost on March 2 while travelling around Bogdkhan (strictly protected) Mountain, in the
southern part of Ulaanbaatar city, was found safe and sound. Over 200 staff members of emergency service searched for him and found him on March 3. As he phoned to the
British Embassy that he got lost and was freezing, the British Embassy
informed NEMA. David Mark’s feet were frozen and he was brought to a Trauma Hospital. He was so obstinate that he would not be treated in the hospital and ran away from the hospital in slippers.A physician despairingly said, “He ran away while his feet were frozen. I was surprised that he would run in slippers without any warm clothes. Both his feet were frozen senseless and his right hand was nearly frozen. He was so obstinate, saying “I will not be under treatment and my feet
will be okay after 30 minutes”. Our hospital’s chief urged him to stay because his feet were very frozen. The Englishman told the physician that he lost his way to Manzushir Monastery but last summer, he had found his way to the monastery alone.
Last year, David Mark studied at the National University of Mongolia as a
Mongolian language researcher and teaches English in Darkhan city. He is a Buddhist and got lost while going to the monastery for prayer. Ch. Namsraijav, Deputy Chief of Ulaanbaatar Emergency Department said, “More than 200 emergency workers, of which 50 were rescuers worked for 12 hours without interruption. It was so difficult
because Bogdkhan Mountain was covered with thick snow. He was scared and his hands and feet were very frozen. We found him 20km from Ulaanbaatar. The danger of freezing and/or being attacked by wolves was possible if search activity
went slower.”

By B.Ooluun

Source:Mongol Messenger-Mongolian English weekly newspaper

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South Korean Ambassador in Ulaanbaatar involved with Mongolian teen girl romanticaly, fathered a child and then refused to pay child support

One of the cases of foreign males in Ulaanbaatar who had Mongolian teen age girl as lover hit the surface..... This time, it was highest ranking South Korean official-its Ambassador.He reportedly had a Mongolian lover, a college girl. She is one of thousands of Mongolian students who learns Korean and ended up abused by the South Korean top official in Ulaanbaatar.
Shame on you South Korea and your people in Ulaanbaatar. There are very few decent South Koreans in Ulaanbaatar. Most are like their ambassador.They can be characterized by unemotional, serious look and not interested in anything except money and sex. Maybe, Japan was right when it dominated Korea before. These people needs some kind of dictator to herd them to factories and do mass production and teach them right or wrong. These are not individualistic people and lacks common human concept of passion, love, decency.Maybe Japanese military should come back and teach them right or wrong... They are very much into material society and only thing they value is money and rotten Kimchi.

About 5000 of robotlike, unemotitional people make up "South Korean community in Ulaanbaatar" that runs laundries, restaurants, hotels and also Christian churches. They basically took over Mongolian small and medium businesses in Ulaanbaatar. They employ many young Mongolian girls and women, many from countryside. We are quiet certain this kind of abuse, sexual slavery is happening in every one of these South Korean businesses in Ulaanbaatar.It is so easy how these Koreans treat their Mongolian employees and staff. Just visit a Korean restaurant. You will see a Korean owner elderly man or woman sitting by cash machine and directing local Mongolians.Once a while, when mongolian employees sit or chat with each other, these ugly looking Koreans start shouting and hit the Mongolians. It is typical for them to act this way. Any of these "Kim" or "Choi" are not different from each other. They are all rotten Kimchis.


SHAME ON YOU SOUTH KOREAN PEOPLE IN ULAANBAATAR. WE KNOW THAT YOU ARE NOT CREAM AND FLOWER OF YOUR COUNTRY AND YOUR PEOPLE.YOU ARE HERE TO ABUSE MONGOLANS AND MAKE MONEY...YOU ARE LIKE SLAVE OWNERS IN ULAANBAATAR

BUT AT LEAST YOU BE DECENT UP TO PAY 'CHILD SUPPORT' TO POOR MONGOLAN GIRL WHO GAVE BIRTH TO YOUR CHILD.

BY SHAGAI, CONTRIBUTOR TO MONGOLIANVIEWS.COM



By Lee Tae-hoon

As the sex scandal involving South Korean diplomats expanded Thursday, it was found that an ambassador to Mongolia resigned last year over an extramarital affair.

Park Jin-ho, who served as ambassador to Ulaanbaatar from 2006 through 2009, stepped down in February 2010 for having had an inappropriate relationship with a Mongolian college girl and fathering a child with her, sources said.

They say she asked for child support, but Kim refused to pay any.

Upon his return to Seoul, she filed a complaint to the South Korean embassy in Mongolia and Korea’s Ministry of Foreign Affairs and Trade (MOFAT).

The ambassador is known to have said that the woman threatened him and asked for an exorbitant sum.

Worrying that the incident could harm Korea’s bilateral relationship with Mongolia, MOFAT reportedly wrapped up the case with the ambassador’s resignation.

The foreign ministry has been at one of its lowest points since last year.

Former Foreign Minister Yu Myung-hwan had to step down in September following the disclosure that the ministry gave preferential treatment in hiring his daughter.

It then vowed to institute reforms including in its recruitment policy.

The ministry, however, was grilled recently when lawmakers discovered errors in the translation of the free trade accord between Korea and the European Union. Then this week, the sex scandal involving a Chinese woman and several South Korean consuls broke, further embarrassing the nation’s diplomatic corps.

Critics say Lee’s tendency to offer consulships as a reward to his aides is to blame for the mistakes that inexperienced politician-turned-diplomats make.

They include Lee’s political appointment of Kim Jeong-kee, the former consul general of Shanghai, and the appointments of Kim Jae-su and Lee Ha-ryong, as consuls general in Los Angeles and Seattle, respectively.

He attempted to nominate a Korean-American who had helped in his election campaign as consul in Atlanta, but he had to withdraw the plan in the face of mounting public criticism

“The problem stems from (Lee’s insistence) to do favors for those who worked for him at the Grand National Party,” said Rep. Park Sun-young of the minor opposition Liberty Forward Party.

Choi Jong-kun, a political professor at Yonsei University, says it was wrong for the President to appoint Kim Jeong-kee as he was inexperienced and unable to handle delicate diplomatic issues.

“It is not absolutely necessary to fill overseas missions with career diplomats,” Choi said. “But it is important to hire someone with professional diplomatic skills.”
leeth@koreatimes.co.kr


Source: Koreatimes.co.kr

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Mongolia Premier Seeks Balanced Growth as Mining Threatens `Dutch Disease'

Mongolia needs to look beyond the coal and copper mines that are driving its economic boom to find a more balanced model of growth, Prime Minister Sukhbaatar Batbold said.

Investment in mining projects and speculation on the wealth they will create in the world’s most sparsely populated nation have made Mongolia’s tugrik the best-performing currency since the beginning of last year. That’s putting exports such as cashmere at a disadvantage, and adding costs to newer industries such as tourism, food production and metal processing.

“It is important to have a good mining industry,” Batbold said in an interview at a forum in Mongolia’s capital Ulan Bator. “But it is a tool of moving many other things forward. What we want to focus on is creating jobs in many other industries.”

Mongolia needs to avoid developing “Dutch disease,” where the financial benefits of a resource boom lead to a hollowing out of other sectors, according to the World Bank. Sandwiched by Russia’s far east to the north and 1.3 billion-strong, resource- hungry China to the south, the government is looking for ways to lessen its vulnerability to competition from its giant neighbor and reduce its reliance as a customer.

“Mongolia can’t compete with China on wages, but it can certainly find areas in the Chinese economy where it could have an edge,” such as in cashmere, meat, and services, said Rogier van den Brink, lead economist for Mongolia at the World Bank. “Diversifying from resources would be a solution similar to what the Dutch found to combat the resource disease.”
Mineral Projects

The discovery of gas in the Netherlands drove up inflation and damaged manufacturing. In Mongolia, Vale SA (VALE5), the world’s largest iron ore supplier, and Xstrata Plc (XTA), the No. 1 thermal coal exporter, are leading six groups bidding for a 1 billion metric ton concession at the Tavan Tolgoi coal project.

Rio Tinto, the world’s No. 2 mining company, is developing the Oyu Tolgoi copper and gold deposit, which it expects will account for 30 percent of Mongolia’s gross domestic product when completed.

The country also holds oil, potash, iron ore, uranium and the rare earth minerals used in Toyota Motor Corp. hybrid cars and Raytheon Co.’s Tomahawk cruise missiles.

Plans this year to begin mining part of Tavan Tolgoi and preparatory work for the 2012 start-up of Oyu Tolgoi may cause the economy to expand 33 percent in dollar terms, according to Eurasia Capital, an Ulan Bator-based bank. That compares with a 10 percent growth in local currency terms, Eurasia said in a Jan. 11 report.

The tugrik gained 16 percent against the U.S. dollar since Jan. 1, 2010, beating 172 other currencies tracked by Bloomberg. China’s yuan advanced 4.1 percent over the same period.

Cashmere Competition

China, Mongolia’s biggest rival in cashmere and top trading partner, is “stealing jobs” with a more stringent currency policy, Naidansuren Zoljargal, a deputy governor at the nation’s central bank, told the forum.

While the dollar value of greasy cashmere exports rose to about $105 million from $92 million in the first 11 months of 2011, it dropped to 3.6 percent of all exported goods in December in dollar terms, from 4.8 percent a year earlier, according to the World Bank.

Mongolia, which the government estimates has the capacity to produce 30 percent of the world’s cashmere, this year set up a marketing agency to help farmers and herders market their products abroad. This should help producers compete on quality and brand, not price, agency chief Stephen Kreppel told the forum on March 4.
Cashmere Goats

Thirty-four percent of Mongolia’s 1.1 million labor force work in agriculture, primarily tending livestock that includes the goats that yield cashmere fibers. Services employ 61 percent, with industry accounting for 5 percent, according to the CIA World Handbook.

In contrast, industry provides 30 percent of gross domestic product and agriculture 21 percent. As well as raw materials and unprocessed animal products, Mongolia also sells apparel and leather goods and the government aims to support to textiles, infrastructure, tourism and food production, Batbold said.

“We’d like to focus now on value-added products,” he said. Tackling poverty is one reason development in Mongolia has become more urgent, with the mining industry a way to “give better impetus to the economy,” Batbold said.

More than a third of Mongolians live below the poverty line, and per head income in the nation of 2.7 million is $2,111, the International Monetary Fund said in 2010. In December, Russia wrote off about 98 percent of Mongolia’s $172 million debt.

China accounts for 80 percent of Mongolia’s imports and buys about 85 percent of its exports, according to Mongolia’s central bank data. While Mongolian trade turnover surged 54 percent to $6.2 billion last year, imports exceeded exports by $379 million, Eurasia Capital said, citing official data.

Currency Swap

To help mitigate the effects of the rising tugrik, Mongolia’s central bank is in talks with China on a currency swap that would amount to “a few billion” yuan, Zoljargal said in a March 4 interview. The accord allowing trade to bypass the dollar should be ready before July, and a similar deal with Russia is likely to follow, he said.

“This will help us to smooth all those pressures to the local economy,” Zoljargal said.

The Bank of Mongolia last year introduced dollar-tugrik forward contracts to help hedge against jumps in the exchange rate and is supporting plans to set up a market for tugrik- denominated government bonds as soon as this year, Zoljargal said.

The measures will help make any appreciation in the tugrik “smooth” and predictable, Zoljargal said. “We don’t want to fight the trend,” he said. “Our target is more on the inflation, which we’re trying to keep at single digit.”

The IMF in a Feb. 17 report forecast the figure to reach 20 percent by the year’s end due to increased state spending.

To contact the reporter on this story: Yuriy Humber in Ulan Bator, via the Tokyo newsroom at yhumber@bloomberg.net

To contact the editor responsible for this story: Andrew Hobbs at ahobbs4@bloomberg.net

Source:Bloomberg, news wire service

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Vale, Xstrata Vie for Coal Asset Mongolia Sees as Springboard

Vale SA (VALE3), the world’s largest iron- ore supplier and Xstrata Plc (XTA), the No. 1 thermal coal exporter, head two of six groups shortlisted to develop part of Mongolia’s biggest coal asset as the nation seeks to become a resource hub.

ArcelorMittal (MT), Peabody Energy Corp. (BTU), a venture between Mitsui & Co. and Chinese coal producer Shenhua Group, and a Russo-Japanese-South Korean group led by OAO Russian Railways round out the shortlist, Baasangombo Enebish, head of the state- run Erdenes MGL LLC, which owns the asset, said March 5. It may take about four months to pick one to three winners for the Tavan Tolgoi field, he said.

“We see no reason to delay,” Enebish said in Ulan Bator, Mongolia’s capital in an interview. “Tavan Tolgoi is only the start. Mongolia would like to be one of the main commodity suppliers in Asia.”

Coal output doubled to 25 million metric tons to become Mongolia’s top export last year, encouraging the government to speed up Tavan Tolgoi’s development after years of debate. The mining industry can help fund broader economic growth, which may hit 10 percent this year, Prime Minister Sukhbaatar Batbold said last week. That would exceed China’s targeted 8 percent for 2011.

Mongolia attracted 15 initial bids to develop the field as floods in Australia curb supply. The price of steelmaking coal may rise to a record $340 a metric ton in the next quarter, according to UBS AG’s forecast in a Feb. 21 report.

The Asian nation is “definitely” where Noble Group Ltd., a Hong Kong-based commodity supplier backed by China’s sovereign wealth fund, wants to expand coal operations, Chief Executive Officer Ricardo Leiman said March 1.
Initial Offering

Tavan Tolgoi spans some 68,000 hectares, with coking coal located mainly in the central Tsankhi area, Enebish said. Tsankhi has been split into the western bloc, which will be developed by the winners of the tender, and the eastern side, which will be mined by Erdenes TavanTolgoi, a unit of Erdenes MGL. The unit will make an initial public offering of 29 percent to global investors this year or next, Enebish said.

West Tsankhi holds more than 1 billion metric tons of coal, 68 percent of which can be used for steelmaking and the rest as fuel in power plants, Enebish said. The tender winner will pay Erdenes TavanTolgoi royalties for mining and assist in getting the coal to ports in China and Russia for export to Japan and South Korea, among other countries, he said.

Output, marketing, and transport plans for West Tsankhi will be discussed with the bidders, Enebish said. The East Tsankhi block, which Erdenes TavanTolgoi is developing on its own, is due to start coal exports within two months and has an annual production target of 15 million tons, two thirds of which will be coking coal, he said.
China, Russia

“The main market is China, it’s more natural,” Enebish said. “But through China, through Russia, the government of Mongolia plans to reach third markets.”

West Tsankhi is located in the South Gobi region of the country, 270 kilometers (170 miles) north of the Chinese border. The nearest port is China’s Tianjin 1,570 kilometers away, with the closest Russian port of Vanino more than three times the distance, according to a November presentation by the Mongolian government posted on its website.

As coal investors help Mongolia establish the transport, energy and mining infrastructure at Tsankhi it will aid development of other deposits, Enebish said. That will make it easier to attract more investment into resources, he said.

“Mongolia is still an under explored country,” Enebish said. “We’d like to see Erdenes TavanTolgoi in five or ten years as one of the biggest coking coal mining companies.”

The Shenhua Group, which produced 320 million tons of coking and thermal coal in 2009, plans to have a capacity of 560 million tons by 2014, according to its website.

To contact the reporter on this story: Yuriy Humber in Tokyo at yhumber@bloomberg.net

To contact the editor responsible for this story: Andrew Hobbs at ahobbs4@bloomberg.net

Source:Bloomberg

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Mongolia Shortlists 6 Groups to Develop Tavan Coal Field

Mongolia shortlisted six groups from an initial 15 applications to develop the central-west part of the Tavan Tolgoi coal field, said Baasangombo Enebish, executive director of the state-run Erdenes MGL LLC.

The groups are ArcelorMittal (MT), Vale SA (VALE5), Peabody Energy Corp. (BTU), Xstrata Plc (XTA), a venture between Mitsui & Co. and China’s Shenhua Group, and the Russia-Japan-Korea consortium led by OAO Russian Railways, Enebish said in an interview in Ulan Bator today. Erdenes MGL, which owns the asset, will begin talks with the companies and plans to pick one to three winners within four months, he said.

The western side of the central area of Tavan Tolgoi holds more than 1 billion metric tons of coal, 68 percent of which can be used for steelmaking and the rest as fuel in power plants, Enebish said. The central-east side will be developed by a unit of Erdenes MGL, which plans to make an initial public offering to international investors by next year, he said.

“It depends on the negotiations, but we see no reason for delays,” Enebish said. “We’d like to clarify all issues with the west part before the IPO,” he said.

Mongolia is pushing ahead to develop its biggest coal resource after seven years of talks as commodity prices surge and demand from steelmakers in Asia is exacerbated due to supply disruptions from Australia. The entire Tavan Tolgoi area holds more than 6 billion tons of coal, one of the world’s biggest untapped sources of the mineral, Enebish said.

Mongolia wants the winner to help build infrastructure around Tavan Tolgoi, including transportation, to boost further development in the area, he said.

Erdenes Tavan Tolgoi, the unit that will offer stock to foreign investors, will receive royalties from companies that develop the west side, Enebish said. The central-east side of Tavan Tolgoi also has more than 1 billion tons of coal, 75 percent of which is coking coal, he said.

Mongolia plans to export coal from Tavan Tolgoi to China, Japan and South Korea, Enebish said.

To contact the reporter on this story: Yuriy Humber in Tokyo at yhumber@bloomberg.net

To contact the editor responsible for this story: Jim McDonald at jmcdonald8@bloomberg.net

Source:Bloomberg News Service

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Mongolia Concerned ‘Hot Money’ Heats Economy, Central Bank Deputy Governor says

Mongolia is concerned about the destabilizing effect of “hot money” inflows on the economy as it begins to develop large coal and copper mines, said Bold Javkhlan, the first deputy governor of the central bank.

The country spent an equivalent 180 billion tugrik ($140 million) last year to stabilize the exchange rate and will keep the policy this year as expected commodity price gains and the start of operations at new mines pressure the currency, Javkhlan told a forum in Ulan Bator, Mongolia’s capital. About 40 percent of money inflows into Mongolia are short-term, he said.

“One issue I’d like you all to be concerned with is hot money,” Javkhlan said. “The real exchange rate has quite a gap with the nominal. The more this grows, the more speculative money will come in.”

The tugrik has gained 15.4 percent against the dollar since Jan. 1 last year and 19.2 percent versus the euro as the country’s second-largest export, copper, hit a record $10,190 a metric ton on Feb. 15, and coal prices advanced on supply disruptions from Australia. Mongolian banks hold about 1.5 trillion tugrik of “extra” liquidity, Vice Minister of Finance Ganhuyag Chuluun Hutagt said March 2.
Oyu Tolgoi

Oyu Tolgoi, a copper and gold mine being developed by Rio Tinto Group with Ivanhoe Mines Ltd. and the Mongolian government, is due to start operating in 2012. The mine will account for 30 percent of Mongolia’s gross domestic product when fully operational in 2020, according to the venture.

Erdenes Tavan Tolgoi, operator of the eastern part of the coal field which is estimated to hold some 6.4 billion tons of the fuel, will start mining and exporting within two months. It may produce about 1 million metric tons this year, Lkhagva Ganbat, a company board member, said March 2. Annual output may reach 15 million tons in three years, he said.

“From 2014, when most of the mining projects are up and running we don’t need to be scared of this money flows coming in, because it will be real money going into the economy,” Javkhlan said. “The main goal now is stability of the fiscal system.”

To contact the reporter on this story: Yuriy Humber in Tokyo at yhumber@bloomberg.net

To contact the editor responsible for this story: Andrew Hobbs at ahobbs4@bloomberg.net


Source:Bloomberg news wire service

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China Woos Mongolia as Australia of North Asia

Op-Ed Commentary: Chris Devonshire-Ellis

ULAAN BAATAR, Mar. 2 – China has agreed to provide a soft loan of US$300 million to Mongolia to develop a border free trade zone, along with other major trade and investment projects slated to take place in bilateral trade between the two countries. China’s Foreign Minister Yang Jiechi visited Ulaan Baatar last week to discuss bilateral trade and to seek access and participation in Mongolia’s huge mineral reserves. A new Chinese Ambassador to Mongolia, Wang Xiaolong, has also just been appointed as the two nations look to develop economic ties.

Bilateral trade between the two is currently at US$3.3 billion, however this is expected to increase significantly over the next few years as the economic bonanza promised by Mongolia’s massive mineral wealth starts to materialize. Investors are certainly straining at the leash to get in.

With China already the world’s largest consumer of coal, Mongolia’s massive reserves are finding a ready market. On top of that, Mongolia has significant deposits of gold, copper, molybdenum, tungsten, nickel, zinc, wolfram, fluorspar, tin, silver, various minerals and rare earths. Furthermore, Mongolia is reputed to have significant reserves of oil and natural gas. This was apparently recognized by Stalin, but due to Soviet incompetence never actually realized. “Stalin’s Lost Oil” may yet give another boost to an already rich nation finding itself suddenly awash in mineral wealth.

The world’s largest coal deposit is in Mongolia, the country has the world’s largest reserves of copper, and is the second largest producer of rare earths. Given China’s recent decision to place restrictions upon the exports of its own rare earths, Japanese and U.S. businesses are bypassing China and going directly to this alternative source.

As newfound wealth starts to trickle down, Mongolian consumer patterns are already changing. In Ulaan Baatar, the capital city now home to 50 percent of the nation’s population, opportunities to spend have significantly moved up market. Where there was once just a Soviet-era State Department Store selling boots and essentials, there is a swanky, modern store full of the latest iPads and gadgets, while brands such as Louis Vuitton, Chanel, Salvatore Ferragamo and Cartier have already opened stores in the flagship Central Tower on Sukhbataar Square, Mongolia’s equivalent of Beijing’s Tiananmen.

Mongolia has arrived, and is now one of the 50 countries globally dependent upon natural resources to stimulate growth and development. As much is based on mining and exploration, there is little wonder that the entire country is being compared to Australia, another economy largely dependent on natural resources.

How this development is being managed is the cause of much debate and I will be participating in such discussions at the Mongolian Economic Forum being held this week in Ulaan Baatar. For updates on this, and for comments on the sessions concerning the development of Mongolia and the opportunities for foreign investors, please see our sister web site, 2point6billion.com on which these articles will be published from tomorrow (March 4, 2011).

Chris Devonshire-Ellis is the principal of Dezan Shira & Associates, Asia’s largest independent foreign direct consultancy practice with 17 offices around Asia. The firm specializes in foreign direct investment due diligence, investment law, tax and related matters. He is also the Vice Chairman of the business advisory council for the Greater Tumen Initiative, a UNDP body responsible for North China, Mongolia, Eastern Russia, North Korea, and South Korea with Japan as an observer nation. Chris may be contacted at chris@dezshira.com for advice about investing in the region.

Source:www.china-briefing.com

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Key political risks to watch in Mongolia

By David Stanway

BEIJING, March 1 (Reuters) - Landlocked Mongolia sits on vast quantities of untapped mineral wealth and analysts say it could be one of the fastest growing economies of the next decade, as well as a key investment target for mining giants.

The $6 billion Oyu Tolgoi project, jointly owned by Toronto-listed Ivanhoe Mines , Rio Tinto and the Mongolian government, will be the world's biggest copper mine outside top producer Chile once full operation starts in 2013.

To read a multimedia special report on the Oyu Tolgoi copper and gold deposit, click here: r.reuters.com/nas97p

Mongolia also aims to become a major player in the regional coal market by developing the Tavan Tolgoi mine, the world's biggest untapped deposit of its kind. The operator of Tavan Tolgoi, Erdenes MGL, has already chosen the banks that will be entrusted with the listing of Tavan Tolgoi shares in the first half of next year.

Stakes in the western section of Tavan Tolgoi are also on offer to global mining firms. Erdenes said it would choose a shortlist of potential investors "soon".

Foreign companies and investors are watching to see whether the country's fledgling democratic government can build the infrastructure required, maintain stability, improve the rule of law and -- most crucially -- negotiate its way through the geopolitical pressures exerted by its two large neighbours, Russia to the north and China to the south.

Following is a summary of key Mongolia risks to watch:

POLITICAL INSTABILITY

The capricious nature of Mongolia's democratic government can complicate foreign investment projects. The 5-year negotiations on the Oyu Tolgoi property were conducted against a backdrop of damaging political and legal uncertainties, including local ownership requirements and a windfall tax on mining profits that was only rescinded in 2008.

The frequent replacement of key personnel at the top levels of Mongolia's government has also caused concern, with the changes often accompanied by nationalist rhetoric and populist promises to secure more control over the country's assets.

Analysts also complain about the weakness of Mongolia's political parties and its poor regulatory capacity.

Corruption may also prove to be a long-term problem. Transparency International rated Mongolia 116th in its 2010 corruption perception index, up from 120th in 2009 but down from 102nd in 2008.

Political troubles have also arisen from the arrest in London of Mongolia's counter-espionage chief, Bat Khurts.

Several hundred protesters gathered outside the British Embassy in Ulan Bator at the end of February, calling on the government to expel firms like Rio Tinto from the country in retaliation.

Mining is set to transform the Mongolian economy, with investment in the Oyu Tolgoi project set to reach $2.3 billion in 2011, but there has been growing public frustration about how the dividends are spent, as well as the impact of mining on the environment. Armed activists recently opened fire at a gold mine accused of violating regulations.

What to watch:

-- How will Mongolia use the proceeds from its mining projects? It has set up education and fiscal stabilisation funds, but it has also promised direct dividends for Mongolian citizens.

-- How will it deal with rapid economic change as foreign investment transforms large parts of the country's mainly rural economy? Overall investment in Oyu Tolgoi alone will stand at roughly the equivalent of the country's entire GDP of 2009.

REGULATORY RISK

Last April, Mongolia's president ordered a halt to the issuance and transfer of mineral exploitation licences until the government enacts stricter environmental laws. The directive has rekindled some of the uncertainty that for years surrounded mining investment in the country.

It is unclear how long it would take to pass a new law. President Tsakhia Elbegdorj's proposed amendments were discussed by Mongolia's parliament last June, but a final decision has not yet been announced.

Analysts say that while the move is unlikely to affect major projects already agreed like Oyu Tolgoi, it further raises the risk levels for doing business in Mongolia.

In November, the Ministry for Energy and Mineral Resources said it would suspend a further 254 gold mining licenses and review another 1,700 believed to contravene the country's Water and Forest Law.

What to watch:

-- Hints on the likely shape of the new law.

-- How will the government handle populist pressures to maintain greater control over the country's strategic assets?

DEPENDENCE ON CHINA, RUSSIA

The precarious nature of Mongolia's independence was illustrated in 2002 when the exiled Tibetan spiritual leader, the Dalai Lama, was invited to Ulan Bator. Beijing opposed the visit of the man they regard as a separatist and shut down the country's only rail link for two days, stranding 500 passengers.

China already dominates Mongolia's economy, buying 84 percent percent of the country's exports last year. Some Mongolians fear China's bulging population will increasingly lead to immigration into Mongolia for work, especially if Chinese firms take over the bulk of its mining sector.

Russia has also been exerting pressure on its former satellite, especially over uranium. Canadian miner Khan Resources has accused Moscow of working behind the scenes to force it out of a deposit in the northeast. Talks continue on a Russia-Mongolia joint venture to explore and produce uranium.

What to watch:

-- The growing dominance of China in Mongolia's economy has prompted many of Mongolia's elite to lean further towards Russia, but China is unlikely to step aside, and will also have much to say on where and how Mongolia builds its roads and railways.

-- China rejected the bid for Khan Resources by state nuclear firm CNNC after Ulan Bator revoked the company's licenses. Is Russia now in the driving seat in the battle to secure more Mongolian uranium? What will be China's next move?

BALANCING "THIRD NEIGHBOURS"

Mongolia has sought to carefully balance the interests of China and Russia, and to press ahead with its "third neighbour" policy aimed at courting allies like the United States, but analysts say no nation has the clout to underwrite Mongolia's independence or undermine Russia or China's influence.

While the country hopes to develop its resources as quickly as possible, many of its bigger projects have been stymied by geopolitical concerns.

What to watch:

-- Will Mongolia's efforts to bring in overseas investment be derailed by the pressures exerted by Russia and China?

-- Mongolia now plans to list 30 percent of the eastern block of the Tavan Tolgoi project on an overseas stock exchange, distribute 20 percent to local enterprises and residents, and keep 50 percent in the hands of the state. Meanwhile, stakes in the western block of the project have been put up for tender and received 15 bids from mining firms in January.

Will this be the ownership model in other key "strategic resource" projects, or will Mongolia be forced to sell properties outright in order to kickstart economic growth?

(Editing by Daniel Magnowski)

Source:Reuters

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