Kazakhs celebrate Nowruz across Mongolia

Cultural events held on Sukhbaatar Square mark the Kazakh’s New Year

Kazakh people erected a ger on Sukhbaatar Square where they held a Nowruz feast in traditional Kazakh clothing

On March 21, Kazakh people in Mongolia celebrated their traditional New Year, Nowruz. Nowruz marks the first day of spring and the beginning of the New Year according to the Iranian calendar.
On this day, Kazakh people living in Ulaanbaatar gather on Sukhbaatar square to publicize Kazakh culture, art and tradition. The “Nowruz-2013’ event at the main square attracted many people with their Kazakh gher, traditional foods and dishes, music, dances, games, colorful costumes and even an eagle was there giving opportunity to take photos. Prime Minister N.Altankhuyag and President Ts.Elbegdorj also participated in the Nowruz celebration event. In his Nowruz greeting to Kazakh people, President Ts.Elbegdorj said “Nowruz is an auspicious holiday for Kazakh people to meet relatives and neighbors, respect elders and plan the coming year with good views by reviewing last year’s successes and failures’. He underlined that Bayan-Olgii Aimag, where most ethnic Kazakhs live in Mongolia, holds an important position
in the western region and the aimag’s economic growth was 27.2 percent last year. The president also said that Mongolia supports Kazakh people, highly valuing their contribution to independence, sovereignty and the development of the nation and respects their unique culture and religion.
While attending the Nowruz event on Sukhbaatar Square Prime Minister N.Altankhuyag said that he learned
about the lifestyle and traditions of Kazakh people through his secondary school college and wished Kazakh
people all the best on the occasion of Nowruz. A.Bakei, MP and head of the UB based local council of Bayan-Olgii Aimag noted, “Any nation’s culture and tradition are well preserved in their traditional holidays. Therefore Nowruz was officially registered on the UNESCO List of the Intangible Cultural Heritage of Humanity in 2009”.

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Delay in Oyu Tolgoi copper production will have severe macroeconomic effect

At a press conference on Monday ‘The Report: Mongolia 2013’ was unveiled at the Kempinski Hotel Khan Palace.
The Report: Mongolia 2013 sheds light on Mongoia’s foreign investment laws that are causing current concerns. The Report also provides key information on the state of Mongolian infrastructure, capital and expertise to investors.
Regional Editor Paulius Kuncinas said that Mongoia’s exports of coal, copper and iron should rise on the back of a favorable global outlook for commodities.
“This should help stabilize government finances, whilst increasing foreign reserves and also play a part in improving fragile investment confidence. The most significant milestone in 2013 remains the launch of commercial production at Rio’s copper mine, set to become the second largest in the world.”
On the question on TavanTogloi and Chalco during the press conference, Peter Markey of Ernst & Young commented: “The heart of the TavanTolgoi and Chalco problem is that they don’t have the money at TavanTolgoi that Chalco had paid.”
He notes that although it may seem that this responsibility lies in Mongolia’s previous Government, he highlighted that:“From an outsider’s perspective, a Government is a Government and the Government of Mongolia must have some kind of continuity. 
TheProblem at TavanTolgoi was that the Government regarded it as an extension of its treasury department. When it has some cash, it [the Government] said ‘give it to us.’ What we need to see is proper structures in place.”
Paulius Kuncinas stated: “I don’t want to take sides in the renegotiation. It has happened in other countries. It is taking place in Indonesia it did take place in Papua New Guinea.”
He emphasizeson the risk that every plan or forecast assumes that the copper production will start –even the reason the USD 1.5 billion was such a big deal was that everybody assumes that copper production will not be suspended for any reason. If it does, it will have “severe macroeconomic effects on currency and capital flows”.
The Report: Mongolia 2013 is the second in-depth and informative analysis report published by the Oxford Business Group (OBG) on Mongolia. D. Achit-Erdene from Mongolian International Capital Corporation (MICC), Paulius Kuncinas of Oxford Business Group, Jim Dwyer of Business Council Mongolia, Peter Markey of Ernst & Young and B. Enkhbat of Khanlex Advocates were at the press conference to answer questions.

Source: ubpost.mongolnews.mn

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Mongolia to have an oil refinery in the next three years

Mongolia to have an oil refinery in the next three years

Each year, over a million tonnes of oil come to
Mongolia from refineries abroad

Annually, Mongolia imports approximately 1.1 million tonnes of oil products, of which 98.2 percent is from Russia, 1 percent from China and 0.6 percent from S. Korea, spending approximately USD1 billion. 60 percent of the imported oil products are sold wholesale and 40 percent is sold retail.

As of 2011, Mongolia’s consumption of oil products reached 1.050 million tonnes, of which 32 percent were petroleum, 2.27 percent—fuel for airplanes, 60 percent-diesel fuel, 1.7 percent- fuel oil, 3.8 percent –bitumen and 1.0 percent- liquefied gas. Growth of oil products consumption of any country directly connects with growth in GDP. According to a study of the recent decade, 1 percent growth of Mongolia’s GDP resulted in a 1.0-1.35 percent growth of fuel consumption. To estimate GDP to be an average of 14 percent in 2013-2016, annual fuel consumption is likely to reach 1.7-1.8 million tonnes.

For Mongolia, that depends almost entirely on one country for its fuel, it is necessary to establish an oil refinery in order to eliminate oil dependence and maintain economic security. Does Mongolia have sufficient oil extraction to justify establishment of an oil refinery? How much oil reserve products does Mongolia have?

Mongolia became an oil exporter, exporting 351,500 tonnes in 2011 and extracting 3.38 million barrels of oil by 2012. It is estimated that it has the potential to extract 1.5 million tonnes of oil by 2015. Income from oil to the State Budget are increasing year by year. In 2012, Tgs104 billion came to the State Budget from oil. It was planned to bring Tgs14 billion in 2013 and Tgs300 billion in 2016 from oil to the budget. Mongolia has been registered to have an identified exploitable reserve of 35-42 million tonnes of oil. Therefore, it is intended to establish a refinery with the capablity of processing no less than a million tonnes of oil per year.

It requires taking 3-4 years and USD680-750 million to establish an oil refinery which is capable of processing 2 million tonnes oil a year.

Mongolia has the potential to extract
1.5 million barrels of oil by 2015

“Mongolia’s oil extraction reaches production levels; therefore, we seek to establish an oil refinery which can provide 60-70 percent of the domestic oil supply within the next three years,” said G. Olziiburen, acting chief of the Oil Authority. The government set up a working group on establishing an oil refinery and reflected it in the 2013 State Budget as a relevant expense to work out a Feasibility Study for the refinery. A joint working group of the Ministry of Mining, Ministry of Foreign Relations and Ministry of Economic Development is working on this issue.

To build a refinery which is capable of processing   million tonnes of oil, it will require USD680-750 million. To build a refinery with 1.5 million tonnes capacity, the government needs to spend USD550-650 million.

Source: THE MONGOL MESSENGER

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Wu Bangguo Arrives in Ulan Bator for Official Goodwill Visit to Mongolia

2013/01/30

At the invitation of Zandaakhuu Enkhbold, chairman of the Mongolian State Great Hural, Wu Bangguo, chairman of the Standing Committee of the National People's Congress of China, arrived in Ulan Bator on the morning of January 30, 2013 for his official goodwill visit to Mongolia, his second to the country in 16 years. Before the visit, Wu attended the 21st annual meeting of the Asia-Pacific Parliamentary Forum in Vladivostok, Russia.

In the afternoon after his arrival, Wu held a meeting with Enkhbold in the Government Palace of Mongolia. Wu said that since China and Mongolia established diplomatic relations over 60 years ago, the bilateral relationship has always featured friendship and cooperation. In particular, recent years has seen frequent exchange of visits between high-ranking officials of the two countries, yielding tangible results in all fields of exchange and cooperation. Since China and Mongolia forged a strategic partnership in 2011, bilateral relations have entered a new stage of development. China appreciates Mongolia's long-term support on issues of Taiwan, Xinjiang Uyghur Autonomous Region, and Tibet. China respects Mongolia's sovereignty, independence and territorial integrity, as well as the path of development the Mongolian people have chosen for themselves. Wu stressed that China will always view and develop relations with Mongolia from a strategic perspective, and is willing to work with Mongolia to enrich the connotation of their bilateral ties. He put forward a four-point proposal to further ties. Firstly, China and Mongolia should consolidate the political foundation of their relations through strengthening their strategic mutual trust, continuing to support each other on issues concerning their core interests, strengthening communication and coordination on major issues, and carrying out close cooperation in law enforcement and non-traditional security areas. Secondly, the two countries should deepen mutually beneficial cooperation in the three important areas of mining, infrastructure construction and finance, and push for new achievements in economic and trade cooperation, so that the economic foundation of their relations can be strengthened. Thirdly, the two countries should consolidate the social and cultural aspects of their relations by intensifying people-to-people exchanges between their youths, media and local governments in a bid to strengthen mutual understanding and consolidate their traditional friendship. Fourthly, China and Mongolia should also beef up their cooperation on multilateral issues and continue to support each other in global and regional issues to safeguard their common interests. China supports Mongolia's bid to be an Asia-Pacific Economic Cooperation member and is willing to help Mongolia become better involved in regional cooperation in Northeast Asia and have stronger collaboration with Shanghai Cooperation Organization members.

When it comes to relations between parliaments, Wu stressed that inter-parliamentary exchanges are an important part of state-to-state relations. In recent years, China's National People's Congress and the State Great Hural of Mongolia, the two countries' parliaments, have carried out close and friendly exchanges, adding new contents and injecting new forces into the bilateral relations. In addition, Wu expressed his hopes that the two legislative bodies should further strengthen communication at all levels, share experiences in governance and democratic and legal practices, and create a legal environment conducive to pragmatic cooperation.

For his part, Enkhbold extended his warm welcome to Wu, stating that Wu's visit will have an important and far-reaching impact on the relations between the two parliaments as well as the two countries. He said that the Mongolian people and the Chinese people enjoy profound traditional friendship. Developing friendly and good neighborly relations with China has been the common stance and strategic choice of the Mongolian government and Parliament. The State Great Hural of Mongolia is ready to strengthen friendly relations with the National People's Congress of China, push forward cooperation with China in the fields of politics, trade and economy, and humanity, as well as on global and regional issues, and contribute to the comprehensive development of China-Mongolia relations.

After the end of their meeting, Wu and Enkhbold signed the Memorandum of Cooperation between the National People's Congress of the People's Republic of China and the State Great Hural of Mongolia. They also attended the signing ceremony of agreements in economic and technology cooperation between the two governments.

Source:Ministry of Foreign Affairs of People's Republic China.

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Mongolia’s top 9 events for 2012

1. Regular parliamentary and local elections ran with DP taking the largest number of seats. 

Regular parliamentary and local elections ran this year, resulting in the Democratic Party taking the majority of seats. As a result of the Parliamentary Election, 73 members have been sworn in, of whom 32 MPs are from DP, 26 from MPP, 10 from the ‘Justice’ Coalition of MPRP-MNDP, 2 from CWGP and 3 independent. DP and the ‘Justice’ Coalition established what they call the ‘Government for Changes’.

In the local elections, DP became the majority for the first time in its history.

2. The 850th birth anniversary of Chinggis Khaan was marked, creating the ‘Day of Mongolian Pride’

According to a Presidential Decree and a Parliamentary Resolution, it was decided to celebrate the birth anniversary of the Great Chinggis Khaan on the first day of the first winter month every year.

Under the parliamentary decision, Chinggis Khaan’s birthday was named ‘Day of Mongolian Pride’ and was made a public holiday beginning this year. Within the Day of Mongolian Pride, the Government declared the Falcon as ‘Bird of National Pride’.

3. Mongolian athletes grabbed five medals at the London-2012 Summer Olympic Games 

Mongolian athletes — honored wrestler N. Tuvshinbayar and boxer N. Togstsogt grabbed silver medals in the judo and boxing competitions. Also, honored wrestler S. Battsetseg, boxer U. Munkh-Erdene and wrestler S. Nyam-Ochir won bronze medals. In connection, the Government made a decision to give lifetime monthly benefits to Mongolian athletes who win medals at Olympic Games, Paralympics and world championships. The benefits will start being given on January 1, 2013.

4. For the first time, Mongolia successfully traded ‘Chinggis Bonds’ at the international market

The Government made a decision to issue mid-term bonds worth USD5 billion on the world stock market. On December 5, bonds worth USD1.5 billion were successfully traded, bringing USD1.5 billion or approximately Tgs2 trillion to the account of State Fund.

The Government plans to spend income from the bond trading on infrastructure and constructional projects, but prohibits spending on recovering state budget losses and social welfare. USD500,000 of the USD1.5 billion Chinggis Bond that was traded at the international market have a 5-year term and annual interest of 4.125 percent; whereas bonds worth USD1 billion have a term of 10 years and annual interest of 5.125 percent.

6. Japan-DPRK talks held in Mongolia

On November 15-16, official intergovernmental talks between Japan and DPRK was held in Ulaanbaatar, Mongolia with support of Mongolia’s President Ts. Elbegdorj. The last meeting of a working group responsible for normalizing DPRK-Japan relations which was first organized within six-party talks on Korean peninsula ran in Mongolia in September, 2007. At the meeting, DPRK delegates were led by Song Il-ho, Ambassador in charge of Japan-DPRK talks and the Japanese delegates led by Sh. Sugiyama, Director-General of Japan’s Foreign Ministry’s Asian and Oceanian Affairs Bureau.

According to Mr. Sugiyama, the sides held talks in a friendly atmosphere. Mongolia considers that its agreement with relevant bodies to host this meeting in Ulaanbaatar is its contribution to satisfy regional stability in Northeast Asia and believes the meeting to be effective to normalize DPRK-Japan relations and deepen mutual understanding, reported the Ministry of Foreign Affairs.

7. Decline in coal exports cause a reduction in economic growth

According to expected performance of the macro economy for 2012, actual economic growth was predicted to be about 12 percent. It is quite lower compared to last year’s 17 percent growth in the economy. This reduction of economic growth was influenced by a reduction in China’s economic growth. The greater part of Mongolia’s exports go to China. China’s economic growth became sluggish due to the world financial and economic crisis and the European debt crisis. For instance, external and internal demand reduction caused China’s steel making production to decrease and its coal imports decreased by 10.7 percent in July of 2012 against the previous month. It led coal exporters of Mongolia to cut the coal export volume and some stopped exporting.

8. ‘Healthy Child’ campaign gives results

The Government implemented a nationwide campaign called ‘Healthy Child’ with the purpose to involve all children aged 0-18 in health examinations and built an e-database of the health state of all children. In the campaign, 816,941 children or 83.6 percent of all children were involved.

Some 68 percent of children involved in the health examinations have been found to have health problem such as cavities. Also, treatment activities for children who were diagnosed with illness started treatment.

9. Former President N. Enkhbayar received imprisonment sentence

Former President and Chairman of MPRP N. Enkhbayar was accused of misusing his official position and sentenced to prison. Last August, the Sukhbaatar District Court sentenced him to 4 years in prison. The Court of Appeal later confirmed the sentence. However on December 7, the supervising court at the Supreme Court discussed the case and remitted the sentence to 2.6 years. President Enkhbayar was accused of misusing official position in the privatization of the ‘Urgoo’ UB Administration-owned hotel and Ulaanbaatar Times Newspaper, causing a financial loss to the State.

10. Illegally smuggled skeleton of a ‘Tyrannosaurus Bataar’ dinosaur will be returned to Mongolia

Mongolia drew world attention to the case of a very rare Tyrannosaurus Bataar dinosaur skeleton which was uncovered in Mongolia’s Gobi desert and smuggled to the USA. It was attempted to be sold by Mr.Eric Prokopi through ‘Heritage’ Auctions. A relevant lawsuit was settled and the dinosaur fossil was returned to Mongolia’s ownership. The event makes Mongolia known worldwide for safeguarding its rare finds legally and joined international conventions and treaties. The illegally-smuggled dinosaur skeleton will soon be returned to Mongolia.

Source: The Mongol Messenger

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Leather industries to be supported with Tgs200 billion in bonds

National milk industry proposed

Parliament is deliberating to issue Tgs200 billion in bonds to support leather industries. On December 18,

the budget and economic standing committees of parliament met and discussed this issue and the majority of MPs supported Parliament’s resolution draft to issue bonds.

“Issuing Tgs300 billion in bonds with 7 percent interest for 7 years to support the wool and cashmere branch was successful; this is why parliament decided to propose issuing the following securities”, declared Kh.Battulga, Minister of industry and agriculture. “Mongolia produces good leather boots but has no domestic processing industries. By importing processed hides from Russia, we experience significant economic losses, said the minister, pointing out the importance of developing national leather processing industries.

The draft resolution envisaged spending Tgs140 billion of the total Tgs200 billion on leather and hide manufacturing and Tgs60 billion as encouragement to herders who provide and supply raw material. MP G.Uyanga proposed increasing the capacity of waste water purification facilities engaged in leather production, introduce technology for primary chemical cleaning of leather and hides, and close industries that pour sewage and waste into the central purification facility.

MP S.Byambatsogt proposed to issue Tgs100 billion in addition to the Tgs200 billion to support milk and dairy production. Mongolia consumes 380 million liters of milk each year. The country has more than 40 million head of animals but imports more than 70 percent of its milk need from abroad. “We have all the conditions to develop a national milk industry and supply the population with safe, good quality of Mongolian milk. By issuing bonds and supporting national milk dairy production, we will be able to ensure the population with good quality, inexpensive milk and dairy products”, said S.Byambatsogt.

By developing the national farming economy, Mongolia will succeed to produce milk products, increase technology of milk industries and produce dry power milk at home, thus reducing milk prices which today is being imported for US $3.7 per kilo. The standing committees agreed to set up a working group to study the proposal of the MPs expressed in connection with the draft Bill.

On November 28, the government sold Tgs 1.5 billion in bonds on the world market. US $500 million in bonds has been loaned for five years at 4.125 percent interest, and US $1 billion for ten years at 5.125 percent interest. Much money will be paid in interest every day. While the government has not yet defined how to spend this money, much money is lost every passing day, criticize some MPs, economists and press. For instance, the ‘Undesnii Shuudan’ Daily posted a warning in its December 19 issue saying ‘The government debt for this day reached Tgs4 billion, 117 million in interest. On which project has the bond money started to be spent? . On December 17, Prime Minister N.Altanhuyag made a statement to the DP group about how to spend the money they received from the bond. Construction of the projects to be implemented with Tgs 1.5 billion bond will start next spring. In the first stage, this money will be spent to build paved roads connecting six aimags with Ulaanbaatar, to build oil refineries and reduce housing prices by balancing the housing demand and supply. Also, the 5th power plant in Ulaanbaatar and other power plants relying on coal mines will be built. “For the purpose of effectively managing the spending of the Tgs 1.5 billion and guarantying positive macro-economic influence, the government decided to conclude an agreement with the Mongolbank”, said the Prime Minister.

Source: THE MONGOL MESSENGER

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Latest software system launched at Mongolia’s Stock Market

Automated system allows online transactions, payment, control and savings capabilities

Ribbon-cutting ceremony at the Mongolian Stock Exchange by Mongolian and Australian dignitaries

On December 17, Prime Minister N.Altankhuyag attended a launching ceremony for the MSE’s new comprehensive system called Millennium IT. The PM noted that this is the second wave of changes in the Mongolian Stock Market that enables the MSE to work at international standards and opens new opportunities for citizens and companies to expand their businesses. “A massive privatization program of twenty years ago laid the foundation for people to have their own businesses and a stock exchange was established for the first time”, he mentioned. Mr. David Lester, Director of Corporate Strategy of the London Stock Exchange Group, said that the new system was tested and installed in just 18 months in Mongolia; whereas, it took several decades in some nations to introduce similar systems. This was a significant achievement, he added.

The Government has been working with the London Stock Exchange at the strategy and management level to bring Mongolia’s Stock Exchange’s (MSE) activity to international standards. Within the cooperation,

a comprehensive information technology system Millennium IT was installed and came into operation at the MSE. 

MSE has been operating the Millennium IT system since July this year, testing the software and making necessary modifications throughout the system. Key professionals and brokerage firms had a chance to attend training and learn the system in this short period of time, making it possible for the software to be fully

operational and be handled by the national team.

Millennium IT, a leading technology solutions provider and part of the London Stock Exchange Group, provides a fully automated trading system with transaction, payment, control and savings capabilities.

Source: THE MONGOL MESSENGER

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UN independent expert warns economic growth in Mongolia is not benefiting the poor

While the Mongolian economy has experienced continued growth, this has not benefited the country’s poor, a United Nations independent expert warned today, urging the Government to adopt poverty reduction strategies based on human rights approaches.
“While some parts of the country are being transformed, poverty remains very high and is becoming entrenched not only in rural areas but also in urban centres as the income gap widens and inequality increases” said the Special Rapporteur on extreme poverty and human rights, Magdalena Sepúlveda, following a visit to the Central Asian country.

She added, “The fact that poverty levels remain high and there are increasing inequalities is a clear demonstration that the benefits of economic growth have not trickled down to the poor.”
Ms. Sepúlveda expressed concern about the challenges faced by vulnerable groups affected by poverty and social exclusion in Mongolia, such as women, children, persons with disabilities, older persons, migrants, herders and nomadic communities; ethnic minorities; lesbian, gay, bisexual and transgender people; persons living with HIV/AIDS, and stateless persons.
During her five-day visit, Ms. Sepúlveda met with senior Government officials, donor agencies, international organizations, financial institutions, civil society and communities living in poverty both within the capital, Ulaanbaatar, and surrounding districts, as well as Erden soum in the Tuv province.
The Special Rapporteur urged the Government to immediately address the critical needs of the poorest and most marginalized, ensuring that their rights are protected and they are provided with adequate resources and access to basic services.
“I have found that, for the most part, Mongolia has established a robust legal framework, recognizing that everyone must enjoy the rights to education, health, housing, food, etc. –however, the laws do not necessarily translate into the everyday reality for many Mongolians,” she said, stressing that “there are severe implementation gaps in almost all social policies, ranging from domestic violence to trafficking.”
Accountability mechanisms to monitor the implementation and progress of poverty reduction strategies will be necessary, Ms. Sepúlveda noted.
“Mongolia must foresee the necessary budgetary implications and ensure sustainability in the long term and implement the strategy with strong cross-sectorial coordination through the leadership of a designated ministry,” she said. “Those living in poverty in Mongolia can wait no longer.”
Independent experts, or special rapporteurs, are appointed by the Geneva-based Council to examine and report back on a country situation or a specific human rights theme. The positions are honorary and the experts are not UN staff, nor are they paid for their work. Ms. Sepúlveda is scheduled to report her findings during this visit to the Council in June 2013.

Source: www.business-mongolia.com

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Mongolia’s export of gold and copper fell in 2012

Mongolia is rich in copper, coal and gold. These commodities play an important role in the economy and represent large portion of the country’s exports.

National Statistics Office (NSO) of Mongolia has recently released data on exports of various products including minerals. The nation has exported 18.8 million tons of coal in the first 11 months of this year. There has been a slight increase if compared to last year’s export, which was at 18.4 Million Tons. Government revenue to the date from the sale of coal totals to MNT 1.151 Trillion.

The gold export, however, has been significantly decreased to 2.3 tons in 2012 from 3.2 tons 2011. Interestingly, the amount of gold extracted in the country grew a bit from 5.4 tons to 5.5 tons.

Export of copper concentrate was also declined in 2012. 544 thousand tons of copper was sold overseas within the first 11 months of the year, compared to 524 thousand tons exported in 2012.

There was a growth in the export of iron ore in 2012. Mongolia exported 5.743 Million tons of iron ore to date this year, increasing from 5.085 in 2011.

Source: www.business-mongolia.com

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Mongolian Bonds Rebounds after Taking a Hit due Political Uncertainty

By B.KHASH-ERDENE

After taking a hit due to political uncertainty, Mongolia’s bonds rebounded with the 2018s quoted at 97.50/98.50 and the 2018s around 98.15/99.15, which is fastrecovery considering it reached levels as low as 93.50 and 94.50.

Mongolian bonds plunged 7-8 USD on Wednesday due to the news that the Mongolian People’s Revolutionary Party (MPRP) refusingto work with the Democratic Party.
Prime Minister N.Altankhuyag was in Kyrgyzstan and no one has yet officially accepted the MPRP’s resignation.
The MPRP ordered all its members holding ministerial posts to resign during a meeting on Monday. General Secretary of MPRP, G. Byambasuren said the decision was made as a protest against Enkhbayar’s imprisonment.
This news lead the bond prices to plummet until the next day (Thursday), institutional investors were picking them up, which boosted prices by as much as 5 USD. The bonds are still below reoffer of 99.996 and par and have not recovered to the 101.50/102.00 which they reached shortly after being priced.
During its launch, Mongolia’s 1.5 billion USD debt offering was 10 times oversubscribed or 15 billion USD demand which is twice the size of Mongolian GDP. The attraction of Mongolia is that it is rich in resources such as copper, uranium and coal and its 17.3 percent rate of economic growth in 2011.
Mongolia’s government has stated that it plans to sell a total of 5 billion USD in bonds to finance the infrastructure required to develop its flourishing mining sector.
“It’s one of the fastest-growing economies in the world, with greatly improved policies, and Mongolia is considerably less likely to default in the next few years than Spain,” said Charles Robertson, chief economist at Renaissance Capital to the Wall Street Journal.
The final outcome of the MPRP’s departure could “depend on how the exit is handled”, said Vidur Jain, an analyst at local investment bank Monet Capital to Reuters.”This may affect the yields on the recently issued bonds, and make a second bond issuance more expensive.”
The MPRP is a part of the “Justice Coalition”, which fought the June parliamentary elections on a largely resource-nationalist platform.This means, MPRP’s departure could eventually be welcomed by foreign investors if it helps lift fears of growing resource nationalism in the country.
“If the current (Democratic Party) government could maintain control it would be positive for investors, provided the fallout is handled effectively, as the MPRP was strongly opposed to foreign investment,” Jain said.
The MPRP’s partner in the Justice Coalition, the Mongolian National Democratic Party, said it would remain a part of the coalition government.

Source: ubpost.mongolnews.mn

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Magnai Trade received a soft loan of MNT 14.6 Billion

The Bank of Mongolia is jointly implementing a program called SIFS with the Mining Ministry in order to finance the importation of petroleum products at minimal expense, prevent from sudden price increases at the local market and ultimately, maintain retail prices paid by consumers.

In the framework of this initiative, Magnai Trade, one of the largest importers of petroleum goods in Mongolia, received a loan of MNT 14.6 Billion at an annual interest rate of 3.8% for a period of one year. The financing was provided through Golomt Bank.

This is the fourth loan issued to private companies by this particular program and the total amount of the financing is now MNT 41.4 Billion. It is hoped that these participating companies, having received a loan with favorable terms, will be able to maintain stability for retail prices on the fuel products regardless of fluctuations of the foreign currency rates.

Source: http://www.business-mongolia.com

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In Mongolia, a backdoor to the Hermit Kingdom

They come and they go without much international fanfare: delegations of North Korean ministers in Mongolia, invited by the pro-Western government to discuss trade, cultural ties and questions of “mutual interest.”

The specifics of these meetings are hard to nail down.
“The two sides exchanged views on the issue of further developing the exchange and cooperation between security organs of the two countries and matters of mutual concern,” one news release stated in November.
But unrevealing as these news releases may be, they hide a more interesting relationship: Mongolia, a fast-growing democracy whose mineral riches have made it the darling of global capitalism, has cultivated perhaps the warmest relationship of any country with the notorious Hermit Kingdom.
Intelligence and diplomatic officials see the Mongolian connection as a source of information on the North’s activities, as well as a potential conduit for dialogue with the unpredictable regime in Pyongyang.
With the North again rattling swords — a long-range rocket now stands ready for launch — opportunities to sound out senior officials are rare.
At the moment, for instance, North Korea watchers are reading tea leafs, trying to figure out whether longtime defense minister, Marshal Kim Jong Gak, has been replaced by Gen. Kim Kyok Sik, who is reputed to have closer ties to the ruling Kim Jong Un.
“This is exactly the kind of stuff that drives us crazy,” a Western diplomat in Seoul said, requesting anonymity. Kim Kyok Sik “commanded the units that launched the unprovoked artillery attack on the South that killed a bunch of people in 2010.”
And this is exactly where Mongolia comes in handy.
“Working through China is very difficult,” the diplomat said. “But the Mongolians might be able to just make a phone call.”
Sandwiched as it is between giants China and Russia, Mongolia is expert at navigating the rocky diplomatic territory between friendly disagreement and impudence.
It shouldn’t come as a surprise then that it has proven adept at balancing ties with Washington and other Western powers while pursuing warm relations with North Korea, Iran and other pariahs.
The Mongolian press regularly refers to the United States as “our third neighbor.” Mongolian President Tsakhia Elbegdorj met President Barack Obama at the White House in 2011, and President George W. Bush dropped in on Elbegdorj’s predecessor in 2005 — in part to thank Mongolia for sending troops to join US-led forces in Iraq and Afghanistan.
Even as foreign direct investment from G7, Russian and Asian investors has surged in Mongolia, earlier this year Elbegdorj became the first foreign leader allowed to visit the Iranian centrifuge array at the uranium enrichment center in Natanz.
Mongolia also has strong ties with two energy-rich Central Asian states known for their standoffish attitude, Uzbekistan and Turkmenistan. And it has kept strong ties with China, its largest trading partner, in spite of open criticism in Mongolia’s press about the suppression of their ethnic cousins in China’s province of Inner Mongolia.
But it is the relationship with Pyongyang that stands out most starkly.
During the Korean War, when Mongolia was effectively a communist satellite caught between China and Russia, Mongolia sent 200,000 head of cattle to help feed the North’s population.
The tacit alliance ended in 1990, when Mongolia recognized South Korea and embraced market reforms and democracy. But after some rocky times later that decade, ties have flourished again.
A top-level North Korean military delegation’s visit to the Mongolian capital was revealed in 2009, partly by accident — literally, an automobile accident. The crash made the local papers since North Korea’s deputy defense minister required treatment at an Ulan Bator hospital.
So what exactly is discussed when the North and Mongolia meet? North Korea may press Mongolia to follow China’s example and turn over North Korean defectors who use Ulan Bator’s air links as a gateway to South Korea. To date, the Mongolian government has held its ground, winning praise from human rights groups.
But land-locked Mongolia also has serious economic interests in developing the so-called Rahon Special Economic Zone, a port development at the northern tip of North Korea that offers Mongolia a way to export manufactured goods via the trans-Siberian railroad, bypassing Chinese and Russian ports.
There is also a controversial labor arrangement whereby some 5,000 North Koreans work in Mongolia’s booming mines and factories. Many work under miserable conditions, according to The Independent, and are likely forced to turn their pay over to Pyongyang — in effect, allowing North Korea to raise hard currency otherwise banned under sanctions.
The fact that neither the US, South Korea nor Japan has made an issue of these workers suggests there are good reasons not to upset Mongolia’s ties with the North.
But don’t oversell the Mongolia-North Korea friendship, experts say.
“These [North Korean] ties are based neither on common interests nor shared values but exclusively on the psychological imperative to defend maximum sovereignty and maintain room for maneuver,” wrote Munkh-Ochir Dorjjugder, director of Mongolia’s Institute for Defense Studies, in a paper for the Brookings Institution.
“The last thing the Mongolian government is willing to do is to act, once again, as the ‘mouthpiece’ and ‘promoter of ideology’ of any neighbor, real-world or virtual.”

Source: www.business-mongolia.com 

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Mongolia's former president jailed for corruption

Nyamdorj Enkhbayar, Mongolia's former President, has been jailed for four years on corruption charges after a court verdict hat could threaten the country's fragile government's coalition.

Nyamdorj Enkhbayar, Mongolia's former President

After a three-day trial, Enkhbayar was found guilty of charges that included the illegal privatisation of a hotel and newspapers and the misuse of donated television equipment to broadcast from his own television station.

Enkhbayar accused state prosecutors of twisting facts and said the corruption charges were politically driven. "I'm not afraid of anyone. I will fight for justice and a new Mongolia," he said.

His wife, Onon Tsolmon, blamed Mongolia's current President Tsakhia Elbegdorj and vowed to fight "the injustice" by all means.

Enkhbayar was president from 2005 to 2009, before narrowly losing to President Elbegdorj in the 2009 presidential election. He was arrested in April by the country's anti-corruption authority.

The court also ordered Enkhbayar to pay more than 54 million tugriks (£26,000) in damages.

Resource-rich Mongolia is in the middle of a mining boom that is set to transform its tiny economy, but political uncertainties have threatened to overshadow its efforts to attract the foreign investment needed to develop mines and build vital infrastructure.

The young nation held its parliamentary elections in July and the ruling Democratic Party, which won just 31 out of 76 seats, was forced to form a coalition with Justice Coalition, which is led by Enkhbayar's Mongolian People's Revolutionary Party (MPRP).

Although Enkhbayar was barred from taking part in the elections, he remains as the chairman of the MPRP, which won the third-largest block of seats in parliament.

"The Democratic party needs the Justice Coalition without them, it doesn't work and the partnership may now fall apart," said Luvsandendev Sumati, director of the Sant Maral Foundation, a polling agency.

Election results last month left more than a quarter of the parliament in the hands of politicians who advocate local control of mines. Investors said the latest episode could worsen the political gridlock and increase uncertainty for foreign investors.

Key decisions pending for major mining projects, such as the development of the massive Tavan Tolgoi coal mine, may also be delayed.

Enkhbayar, who served as president of the landlocked central Asian country from 2005 to 2009, has called for the $13 billion Oyu Tolgoi copper and gold mine project with Ivanhoe Mines

to be renegotiated to grant better terms to the government, and also wants to keep the coveted Tavan Tolgoi coal mine, potentially one of the world's biggest coal suppliers, in local hands.

Rio Tinto has a majority stake in Ivanhoe and has full operational control over the Oyu Tolgoi mine, which is due to start production this year.

Source: www.telegraph.co.uk   

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Mongolia’s Best Scientific Researches Awarded

By M.ZOLJARGAL

On the occasion of the Day of Scientific Researchers, 28 people were granted with ‘The Best Scientific Researcher’ title and medals on November 30. Also, the best scientific researches of 2012 have been selected with dignitary, S.Shatar – the State Honoured Scientist of Mongolia, has won the first place with a four million MNT prize for his three series research of Terpenoid Chemistry. The second place went to D.Regdel, the Science PhD and academician, and S.Enkhtuya, the Science PhD, while Dulmaa who serves at the Institute of Chemistry and Chemical Technology of Mongolia was awarded with the third place for her research. The ‘Honourary Credentials’ of the Mongolian Academy of Sciences were granted to six scientists and two researchers took the Best Young Researchers of 2012. Sh.Tsend-Ayush, the Cultural Merit Worker of Mongolia and writer was also granted with ‘Scientist Writer’ certificate. In 2013, 25.8 billion MNT were budgeted for the science sector and 9.2 billion of which will be used for technological projects.

Source: ubpost.mongolnews.mn 

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Former Mongolia leader detained, triggering protests

The former president of Mongolia -- one of the country's best-known politicians -- was detained Friday on corruption charges, authorities said, sparking clashes between police and supporters.

Nambaryn Enkhbayar has been charged with several misdemeanours, including mis-using television equipment donated to a monastery to set up a television channel, Mongolia's anti-corruption agency said at a news briefing.

The raid on his house early Friday morning was televised, as Enkhbayar was able to call journalists and TV crews to his home when it took place.

Dramatic video footage posted on media websites Friday showed hundreds of policemen forcing their way into his house and clashing violently with his supporters.

The former president told TV9 -- a 24-hour television channel that was present at the time -- that he refused to give any form of testimony. He also claims that police are violating his immunity.

Enkhbayar's arrest has prompted strong support among members of his political party -- the Mongolian People's Revolutionary Party (MPRP) -- and the local population, some of whom protested Friday outside his detention centre.

Supporters claim that he may be being punished for information he has about deadly riots that took place in 2008, when he was still president of the impoverished country.

His lawyer announced Friday that Enkhbayar -- who served as prime minister and then president of Mongolia for almost a decade until losing office in 2009 -- was launching a hunger strike.

Mongolia is one of the poorest nations in Asia, but it is becoming more and more attractive to foreign investors with its rich deposits of copper, gold, uranium, silver and even oil.

Source:AFP News Agency

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Southern Mongolians Protest Land Expropriation, 22 Arrest

New York - On the afternoon of April 2, 2012, hundreds of Mongolians of Tulee Gachaa (gachaa is equivalent to village), Mingren Sum (sum is equivalent to township), Naiman Banner (banner is equivalent to county) of eastern Southern (Inner) Mongolia’s Tong Liao Municipality were met with brutal force by the local Chinese authorities.

The local Mongolians were demonstrating against the expropriation of their lands by a government backed Chinese-run forestry company called “Xing Long Gao Forestry”.

Over 80 heavily armed police with more than 30 police vehicles dispatched from the Naiman Banner Public Security Bureau came to Tulee Gachaa and brutally beat up the local Mongolians who were attempting to stop a Xing Long Gao Forestry bulldozer from turning over their farmland. Twenty two protesters were arrested and taken away by police,
5 were seriously injured.

Chenfuulong, one of the organizers of the protest, told the Southern Mongolian Human Rights Information Center (SMHRIC) over the phone that the local Mongolians have been protesting against the Chinese company’s illegal occupation of lands belonging to Tulee Gachaa since last year.

“The protest concerns a 60,000 mu (about 10,000 acres) area of land that was illegally occupied by Xing Long Gao Forestry for several years,”
Chenfuulong explains the background of the land expropriation, “since last year, they stopped managing the forestry. It should be returned to the legitimate owners of the land, the Mongolians of Tulee Gachaa. Now they are trying to continue to occupy our land.”

According to Chenfuulong, the Mongolians organized themselves and protested in front of different level of government including the Tongliao Municipality Government and the Inner Mongolia Autonomous Region Government during the past several months for a just resolution.
They even sent four representatives to Beijing to attempt to urge the Central Government to address their grievance in a just manner in March of this year.

“Nothing has been addressed. Our Banner government sent security personnel to Beijing and brought us back to Naiman Banner. The Banner Governor met with us not to address the problem but to threaten us with arrest and imprisonment,” Chenfuulong told SMHRIC, “now they are beating and arresting us.”

“I narrowly escaped arrest. They raided my home and confiscated my motorcycle,” Chenfuulong describes the conflict scene, “police violently beat up the protesters with batons; some were bleeding, some were beaten down on the ground; women were pulled by their hair and thrown into police vehicles.” Chenfuulong mentioned that his brother Chenfuudee was also among the 22 detainees.

Another Mongolian witness who asked not to be identified provided SMHRIC with a partial list of the detainees. They are Haschuluu, Shuanzuur, Gowaa, Baochuan, Meirong, Baodee, and Chenfuudee.

“Both parents of some families were taken away and their young kids left unattended. For example, Shuanzuur and Gowaa are husband and wife, and their five year old daughter was left crying at home with no one’s care,” he described the rising tension, “police cars are still patrolling the village and more crack down is expected.”

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China targets Mongolia in SouthGobi move

Beijing (Financial Times) -- China's largest aluminium producer intends to acquire SouthGobi Resources, a Mongolia-focused coal company listed in Toronto, for up to C$925m -- the biggest investment yet by a Chinese mining company in Mongolia as China seeks to tap the vast resources of its neighbour.

Chalco, a Hong Kong-listed subsidiary of the Chinese state-owned metals and mining group Chinalco, said it intends to offer C$8.48 per share to acquire a stake of up to 60 per cent in SouthGobi, which trades in Hong Kong and Toronto.

The deal follows years of frustration for Chinese miners trying to gain access to Mongolia's deposits of copper and coal. Although Mongolia has opened up to foreign investors over the past decade, Chinese -companies have often found themselves sidelined because of historic mistrust between the two countries.

The deal could pave the way for more Chinese investment in the Gobi desert, which sits in southern Mongolia right on the common border. The transaction will not require Mongolian approval because the share transfer will take place in Canada, but a representative of SouthGobi said the Mongolian government had been informally notified and was supportive.

Ivanhoe, the Toronto-listed mining company headed by Robert Friedland, has agreed to sell Chalco its 57.6 per cent stake in SouthGobi. China's sovereign wealth fund also holds a 13.7 per cent stake in SouthGobi and has a right of first refusal for Ivanhoe's shares, but the fund is expected to give its approval to Chalco's bid.

Chalco has been eyeing assets in Mongolia for years as it seeks to expand beyond its core aluminium and bauxite business into base metals and energy. Previous discussions with Ivanhoe over a stake in the Oyu Tolgoi copper and gold mine did not come to fruition, bankers say.

South Gobi's main producing asset is a coking coal mine less than 50 km from the Chinese border, and the sale is unlikely to stir the same kind of nationalist debate that has accompanied the development of Mongolia's big state-owned mines, such as Tavan Tolgoi, which plans to list in London later this year.

Alexander Molyneux, president and chief executive of SouthGobi, said the company would benefit from being controlled by a big state-owned miner such as Chalco, which has coal distribution networks inside China and will buy coal from SouthGobi as part of the deal. "SouthGobi will be a more valuable company by having a big brother like Chalco," he said, adding that the company could be a platform for Chalco's overseas coal deals in the future.

Andrew Driscoll, an analyst at CLSA, said the SouthGobi deal was a natural extension of Chalco's coking coal trading business on the Mongolian border. "This marks the most substantial step yet for Chalco in pursuing its diversification strategy," he said.

Shenhua, China's biggest coal miner, appeared to win a leading role in developing part of the Tavan Tolgoi coking coal deposit, but the Mongolian government is now reconsidering the deal after complaints from Japanese and Korean companies.

The offer price represents a premium of 28 per cent to Friday's close in Toronto but is below SouthGobi's historic highs. SouthGobi's share price has fallen by more than half from its peak of C$16.56 in February 2011 amid global investor gloom over resource assets.

Chalco's shares closed down 1.9 per cent in Hong Kong after the announcement, which was made before the start of trading. SouthGobi's Hong Kong share price shot up 18 per cent from the Friday close.

Chalco will make a formal offer to SouthGobi before July 5, the company said, and the acquisition will be funded either by issuing external debt, drawing on internal funds or some combination of the two.

Source:CNN via FT

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China Shenhua says hopes to restart talks on Mongolia mine

* Shenhua in talks to buy assets in N.America, Africa,Australia, Indonesia -CEO

* Coal sales this yr seen exceeding earlier target (Recasts with quotes, details)

By Charlie Zhu and Alison Lui

HONG KONG, March 26 - Shenhua Energy Co Ltd , China's largest coal producer, expects its negotiations to invest in Mongolia's giant Tavan Tolgoi coal mining project to restart after the country's parliamentary elections in June, its CEO said on Monday.

"Because this year is Mongolia's election year, I think we will restart our talks when the election is over," Shenhua CEO Ling Wen told reporters at the company's results briefing.

Shenhua is the most competitive bidder for the project given its technology, transport infrastructure, access to the Chinese market and the backing of the Chinese government, he said.

Shenhua chairman Zhang Xiwu added that the launch of a railway linking Inner Mongolia's Baotou city with Mongolia later this year would give a further boost to Shenhua in the race for a piece of the project.

In July last year, the Mongolian cabinet said it would give Shenhua a 40 percent stake in Tavan Tolgoi's western block and 24 percent to Peabody Energy Corp of the United States. The remaining 36 percent would be given to a Mongolian-Russian consortium led by Russian Railways.

But after bidders from Japan and South Korea branded the process unfair, the Mongolian government backpedaled and said nothing had been decided yet.

Political uncertainty ahead of Mongolia's parliamentary elections in June has worried investors. Politicians in Mongolia are under constant pressure to be seen to getting a good deal for the country from resources investors.

The Tavan Tolgoi coal deposit in Mongolia's south Gobi region has estimated reserves of 6 billion tonnes of coal, including the world's largest untapped deposit of coking coal, used to make steel.

The western Tsankhi block holds about 1.2 billion tonnes of reserves, 65 percent of which is coking coal. It has an estimated production life of more than 30 years at 15 million tonnes a year.

Shenhua is scouring the world for other asset buys and is in talks to buy coal mines in North America, Africa, Australia and Indonesia, Ling told Reuters on the sidelines of the briefing, without giving further details.

Shenhua on Friday posted an 18 percent rise in 2011 net profit on higher domestic coal prices and increased production volume, supported by strong demand in China, the world's top coal producer and consumer, for its power plants, steel and cement industries.

Chairman Zhang told reporters that he expected Shenhua's coal sales volume to reach 425 million tonnes this year, slightly exceeding its previous target.

"From the sales momentum we have seen in the first two months of this year, we feel our full-year sales target now looks a bit conservative," Zhang said, adding that he expected double-digit coal sales growth.

Shenhua CFO Zhang Kehui said Shenhua aimed to keep its coal production cost increase at below 10 percent this year.

Analysts say the outlook for Shenhua and smaller peers Yanzhou Coal Mining and China Coal Energy is clouded by a slowing Chinese economy, government price controls and rising mining costs. (Editing by Chris Lewis and Jonathan Hopfner)

Source:Reuters

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