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BUSINESS COUNCIL of MONGOLIA NewsWire
www.bcmongolia.org
Issue 139, October 8 2010
Special Issue: MONGOLIA INVESTMENT SUMMIT 2010 – Hong Kong, Oct 14
NEWS HIGHLIGHTS:
Business: Mongolian Mining raises USD650 million in HK IPO;
Petro Matad interim report lists areas of progress;
Entree Gold increases exploration budget;
Canada announces funds for social projects at Boroo Gold;
MCS awards toll collection system contract to Canadian firm;
Leyshon Resources apply for licenses in southwestern Mongolia;
Cooperation agreement to help XacBank implement plans and ideas;
Altan Dornod case is not an appeal against court decisions here, says tax official;
MonBiz Mongolia Index adds 5 new members, drops 1;
Winsway Coking Coal raises USD472 million from Hong Kong IPO.
Economy: Main problem is managing the wealth, says PM;
Batbold speaks to investors in Canada, visits Toronto Stock Exchange;
Japan to help Mongolia develop rare-earths;
Private sector JV to build highway to carry coal to China;
Finnish firm to prepare feasibility study on copper smelter;
Everybody to get MNT21,000 per month in 2011;
Diversify or perish, entrepreneur tells seminar;
Not much specific progress in reforming business environment, but work goes on;
MP sad at lack of progress of decentralization measures;
Road company explains secret behind lower costs;
Lack of finance and expertise main hurdle to resource exploitation;
People’s poverty still stalks resource-rich Mongolia;
Mongolia mines a rich seam;
Mongolian GDP per capita set to rise faster than China's;
Forced currency revaluation will lead to disaster, Wen cautions;
IMF chief warns of exchange rate wars;
Physical gold storage space in banks at a premium;
IMF backs Australia’s mining tax, says could be broader.
Politics:
Chief of the State Property Committee likely to be axed;
Hush-hush about arrest of senior Mongolian official in London;
MP wants Government to show “iron face” to arrogant miners;
MPRP leaders say criticism is welcome, but not insults;
DP leader criticizes Labor Ministry’s incompetence;
Parliament session opens;
Lack of consensus casts doubt on passage of election law;
MPRP primary organizations show wide support for proposed changes;
Census begins next week;
Asashoryu bids the ring a formal farewell;
Job advertisements on BTV;
Ulaanbaatar clinic offers sophisticated neurosurgical facilities.
*Click on titles above to link to articles.
BUSINESS
MONGOLIAN MINING RAISES USD650 MILLION IN HK IPO Mongolian Mining Corp, Mongolia's largest privately-held domestic producer and exporter of coking coal, has raised USD650 million by pricing its Hong Kong initial public offering at the middle of an indicative range, sources familiar with the deal said. The company sold 719 million shares at HKD7.02 each (USD1=HKD7.76), the middle of the range of HKD6.48 to HKD7.56 each, said sources directly involved with the deal but not authorised to speak publicly on the matter. At the offering price range, Mongolian Mining is valued at 12.6 times of the forecast 2011 earnings estimated by joint bookrunners, Citigroup and JP Morgan, who are also joint global co-ordinators for the IPO. The company‘s trading debut is set for October 13. It generated orders for more than 10 times the shares initially on offer to Hong Kong retail investors, one source said, adding that Henderson Land Chairman Lee Shau-kee and GIC also invested in the stock. The company, partly owned by Mongolia's largest private conglomerate MCS Holding and Kerry Group, has engaged Sedgman Consulting to build a coal handling and washing plant in order to recover the margins linked with coal washing, currently being conducted by third parties.
Source: Reuters
PETRO MATAD INTERIM REPORT LISTS AREAS OF PROGRESS Petro Matad, the AIM quoted Mongolian oil explorer, has highlighted the following in its unaudited interim results for the six months ended June 30, 2010 and update for shareholders on events since the end of that period.
Initial drilling success from Company's first exploration well
Drilling program ongoing
Funding secured to accelerate development of the Company's assets
Strong technical team appointed
New institutional shareholders. Since the end of the period under review, the company has made significant progress in both its exploration and corporate activities. The most important of these was the success of Davsan Tolgoi-1 which was then followed by the closure of the recent fund raise. A proud achievement of Petro Matad has been its being the first "in-residence" professional western technical team in the history of Mongolian petroleum exploration. Petro Matad now has the personnel, and contractors to take full advantage of the exploration opportunities presented by its PCSs and drilling operations. Drilling operations on the DT-2 well were completed on October 4 at a depth of 1,336 meters below surface. Following the spudding of DT-1, the company commissioned a 2D seismic survey on its Blocks IV and V in central Mongolia. This is the first ever seismic survey done in this region of Mongolia, a matter of considerable pride for the company. Under Petro Matad's management and supervision a Mongolian geophysical contracting company, Khet LLC, undertook the 345-km survey, covering 7 seismic lines. It has now been completed and the results are being processed before interpretation by an in-house professional team. Seismic acquisition during 2010, rather than during 2011 as originally planned, was the result of rapid advancement of the company's geological knowledge of the central Mongolian basins. The company's in-house exploration team completed field expeditions with the assistance of international and Mongolian experts. These activities streamlined the exploration program and advanced the goal of defining potential drillable targets in a much shorter time frame than originally envisaged.
Source: Petro Matad Limited
ENTRÉE GOLD INCREASES EXPLORATION BUDGET Entree Gold Inc. has committed a further USD1.9 million to continue its systematic work targeting prospective formations on its 100%-owned Shivee West property in Mongolia. The Shivee West exploration program reflects Entree's strategy to explore for and potentially expand its growing portfolio of gold and copper resources in Mongolia and on its other projects worldwide. In February 2010, the Company approved a budget of USD4.0 million for exploration in Shivee West. Surface work began in April. The program has been successful in furthering understanding of the geology of Shivee West, resulting in the budget expansion to continue exploring. A further four holes are planned to complete the Company's 2010 exploration program. Mr. Greg Crowe, President of Entree, has said they are ―excited at the growing potential for additional discoveries both on our 100%-owned ground and on the Entree-Ivanhoe JV ground‖. Surface work and/or drilling is either planned or under way on the joint venture ground located both to the north and south of the Oyu Tolgoi mining license. Rio Tinto and Ivanhoe Mines are major shareholders of Entree, holding approximately 13% and 12% of issued and outstanding shares, respectively.
Source: Entree Gold Inc.
CANADA ANNOUNCES FUNDS FOR SOCIAL PROJECTS AT BOROO GOLD The Canadian government will contribute CAD270,000 in funding to support social projects near Centerra Gold's Boroo mine site in north-central Mongolia, its International Trade Minister Peter Van Loan has revealed. The funding, which is being contributed through the Government of Canada's Investment Cooperation program, will support environmental and vocational training and community development initiatives at the Boroo mine. The two countries are in negotiations towards a foreign investment promotion and protection agreement (FIPA). At the end of 2009, Canadian direct investment in Mongolia totalled CAD601 million. Bilateral merchandise trade between Canada and Mongolia has grown more than 60-fold in the decade between 2000 and 2009, from CAD2.6 million in 1999 to CAD163.8 million in 2009. A bilateral FIPA would provide greater predictability and certainty for Canadian investors considering investment opportunities in Mongolia, the Canadian government has commented.
Source: miningweekly.com
MCS AWARDS TOLL COLLECTION SYSTEM CONTRACT TO CANADIAN FIRM International Road Dynamics Inc. of Saskatchewan has been awarded a new contract in Mongolia by MCS Electronics valued at CAD769,000. The project involves the supply and installation of IRD's weigh-in-motion and toll collection systems along the Tavantolgoi–Gashuun Sukhait toll road, a crucial route being used to enhance mining development and expansion in the Gobi region bordering China. The toll road is built to transport coal to China from the Ukhaa Khudag (UHG) coal deposit. The contract involves the supply of a toll system at 4 plazas as well as 4 pre-selection slow speed weigh-in-motion sorting systems to keep overloaded trucks off the road. Further, the contract involves the use of RFID tags and readers to collect tolls from the trucks using the toll way. All over-weight trucks will be prevented from using the toll road. MCS Electronics will act as the contractor for this project which is scheduled to be commissioned in early 2011.
Source: International Road Dynamics
LEYSHON RESOURCES APPLY FOR LICENSES IN SOUTHWEST MONGOLIA Leyshon Resources has applied for exploration licenses over a large area in the Gobi Altai region of southwest Mongolia, as part of a broader strategy to target and acquire high quality coal assets located in western China and Mongolia. The license applications for five areas totaling 2,664 km2 cover a region between 35 to 100 km from a recently re-established Mongolia-China border crossing at Laoyemiao. The applications are subject to Mongolian government approval. One has been accepted while the other four are located in an area where licenses will be issued after bidding. Source: Leyshon Resources
COOPERATION AGREMENT TO HELP XacBank IMPLEMENT PLANS AND IDEAS XacBank, M-ICP, and M-CAM of the USA have signed an agreement to cooperate in increasing business possibilities in Mongolia, to get a larger share of the emerging capital market. Mr. M. Bold,
Executive Director of XacBank, said that the access promised in the agreement to financial resources and technology would now enable his bank try out several plans and concepts that are in need of a facilitating mechanism.
Source: Udriin Sonin
ALTAN DORNOD CASE IS NOT AN APPEAL AGAINST COURT DECISIONS HERE, SAYS TAX OFFICIAL Mr. O. Tengis, Head of the Legal Department of the Mongolian Tax Administration, does not think the decision of Altan Dornod Mongol, a Russian-owned gold mining company, to take the Mongolian Government to international arbitration over the 68% windfall profits tax should be seen as a challenge to the country‘s judicial system. It is true that the company has lost its case in domestic courts, but the issues before the tribunal are not quite the same as those decided in Mongolia. Mr. Tengis also said Altan Dornod could have gone in for a 15-year Sustainability Agreement, much like what Boroo Gold had done, but instead decided on controversy and confrontation. The tax system in Mongolia is simple to understand and apply. Corporate income tax has just two stages, at 10% and 25%. The second applies to those whose annual taxable income is more than MNT3 billion. Only 1% of taxpayers, most of them mining companies, belong to this bracket. With the repeal of the windfall profits tax, Mr. Tengis felt, foreign investors should find Mongolia‘s taxes light and the tax environment favorable.
Source: Undesnii Shuudan, MonBiz
MONGOLIA INDEX ADDS 5 NEW MEMBERS, DROPS 1 Eurasia Capital, a Hong Kong-based investment bank, and MonBiz Media Ltd. updated the MonBiz Mongolia Index on October 1 and increased the number of benchmark members to 24 from 20. Actually five companies were added -- Mongolia Investment Group, Central Asia Metals Plc, Shariin Gol, Aspire Mining Ltd, and Asia Gold Ltd -- but Kiu Hung Energy Holdings was excluded from the Index because company's acquisitions of coal assets in Mongolia had been canceled. The MonBiz Mongolia Index covers publicly listed companies with the total market capitalization of US$21 billion (as of October 1), including seven companies from the Mongolia Stock Exchange, seven from the Hong Kong Stock Exchange and ten companies listed on the New York, Toronto, London and Australia Stock Exchanges. The New York Stock Exchange (NYSE) leads in terms of its share in the index's total market capitalization. Ivanhoe Mines, the NYSE-listed bellwether member of the index, contributes 47.4% of the Index's total market capitalization. The Hong Kong and Toronto-listed companies are the 2nd and 3rd largest members with 23% and 21.8%, respectively. In terms of industry breakdown of the Index, the metals & mining companies dominate with 96.1% of the benchmark's total market capitalization.
Source: Eurasia Capital
WINSWAY COKING COAL RAISES USD472 MILLION FROM HONG KONG IPO Winsway Coking Coal Holdings Ltd. raised USD472 million selling stock in an initial share sale in Hong Kong, according to terms for the transaction. Winsway, which processes and transports coal from Mongolia into China, sold 990 million shares at HKD3.70 apiece, the terms show. That‘s lower than the mid-point of the HKD3.25-HKD4.50 range specified in the company‘s IPO prospectus. Winsway has an option to sell a further 148.5 million shares, the terms show. Deutsche Bank AG, Goldman Sachs Group Inc. and Bank of America Corp.‘s Merrill Lynch & Co. unit managed the sale, according to Winsway‘s IPO prospectus.
Source: Bloomberg
ECONOMY MAIN PROBLEM IS MANAGING THE WEALTH, SAYS PM The following is the transcript of an interview Prime Minister S. Batbold gave to Mr. Charlie Rose, as released by Bloomberg TV. What do you expect Mongolia's growth rate to be over the next five years? Despite losses in agriculture—we had a very hard winter and lost almost one-fifth of our [livestock]—we're still anticipating almost 8 percent GDP growth this year. And according to World Bank and IMF estimates, for the next five years we are expected to have growth above 10 percent per annum.
I just interviewed the President of Chile. Its largest market is China—especially for copper. Give us a sense of what the market is for minerals in Mongolia. We are already the No. 4 exporter of coal to China. We are a quite serious exporter of copper to China, and with our copper and gold project with Rio Tinto, we would easily double and triple [copper] exports to China. There is huge potential. On top of that, we have new commodities to export to China—iron ore, zinc—and we do have some prospects for oil and gas and important reserves of uranium. But we are a landlocked country...and transit costs equal almost 10 percent of GDP. So with encouragement from my government, we are [looking beyond the export of raw materials] to adding value in processing and putting more priority on industrialization, which will create jobs. Are you entertaining the idea of nuclear power? Not at this moment, but we are working closely with France, the U.S., Japan, Russia, and China, because we have so many reserves of uranium. We have lots of other sources of energy. Mongolia is, interestingly enough, the world's richest wind tunnel. So wind power could be huge? Wind power could be a major opportunity for Mongolia and for export to China. You're opening a national bourse that I think will be managed by the London Stock Exchange. It's not decided yet...but the London Exchange is one of the strong candidates because it is a mining-specialized exchange. That decision will be made by an independent board. Here's what I hear you saying. You have a country the size of Western Europe, a small population, lots of mineral resources, a developing market system, and predicted double-digit growth in GDP. What's the problem? The big problem is: How do we manage this wealth? We have about 4 or 5 percent unemployment. That is the official number, but a substantial segment of the population is not registered yet. And the poverty level is above 35 percent. So we need to channel this wealth to combat poverty. And eliminate the possibility of social tension? Absolutely. What's the economic model? Is it more like the U.S. or China? Or is it some hybrid? After 20 years of transition, we're trying to define which would be the best model for us. And we have seen the Chilean model, because Chile is a mining country. We are looking now at Canada and what it has achieved because although there are big differences in development and other things, there are a lot of natural similarities between Mongolia and Canada. We're cold countries with vast territories, smaller populations relatively, and mining and agriculture are key. And we're next door to major neighbors like the U.S., China, and Russia. Do you have influence with North Korea? To say influence is a little difficult. What we have are very good relations. We have an embassy in Pyongyang; they have one in Ulaanbaatar. We have cultural-exchange events on a continuing basis. And we even have economic and trade commissions that work together. We try to keep this channel warm. Do you have any national security concerns? We do have a standing army in a certain limited way. But we do not have major political and territorial problems with our neighbors, China and Russia. So when you're not running the country, what's the most fun thing to do in Mongolia? For me, the fun is probably sports. I like playing basketball and tennis. The fantastic thing is to go out to the countryside and see how beautiful my country is, how different the landscape is because it's a vast land. This is one of the most untapped and wildest countries in terms of nature. On top of that, we still maintain the traditions of our nomadic culture. Any golf courses over there? Yes, we have one.
Source: Bloomberg For the complete interview, please visit BCM NewsWire – News, Interviews.
BATBOLD SPEAKS TO INVESTORS IN CANADA, VISITS TORONTO STOCK EXCHANGE An important item on the agenda of Prime Minister S.Batbold‘s week-long visit to Canada was a visit to the Canada-Mongolia Investors' Forum on September 30 in Toronto. Representatives of many of the biggest companies of the country, particularly mining giants like Riо Tinto, Centerra Gold, SouthGobi Resources, and Ivanhoe Mines – all of which are active in Mongolia – welcomed him to the forum. Mr. Batbold spoke of the investor-friendly environment and laws in Mongolia and asserted that the present coalition government‘s policy was to install an open and sustainable regime where business would thrive. The Premier also visited the Toronto Stock Exchange (TSE), the largest of its kind in North America. Senior officials told him that 19 mining companies registered at the TSE work in Mongolia. When Mr. Batbold expressed Mongolia‘s desire to study closely how the TSE worked, these officials said they would be happy to develop a comprehensive relationship of cooperation with the Mongolian Stock Exchange. Later in Vancouver the next day, the Prime Minister told another meeting of investors that Canada could become the model country for the development of Mongolia not only in mining, but also in agriculture, public governance and education. He assured them that the Government and Parliament of Mongolia will work for protection of their investment and urged them to consider setting up processing factories like those in Canada so that Mongolia can come beyond exporting only raw minerals. Source: Montsame
JAPAN TO HELP MONGOLIA DEVELOP RARE-EARTHS Japan will cooperate in promoting projects to develop rare-earth minerals in Mongolia as it seeks to diversify sources of materials needed for high-tech products. Japanese Prime Minister Naoto Kan and his Mongolian counterpart S.Batbold agreed on such cooperation during a meeting in Tokyo on Saturday evening, Japan's foreign ministry said in a release. Japan is heavily dependent on imports from China, which had curbed exports to Japan amid a diplomatic spat. "Development of mine resources in resource-rich Mongolia will benefit both countries. Our country's research team will launch exploration of rare metals this month," Mr. Kan said. Japan's Economic and Fiscal Policy Minister Banri Kaieda said in a recent interview that Japan should diversify sources by accelerating the development of alternative materials outside China. Japan depends on China for 96% of its rare-earth minerals, while China controls more than 90% of the world's output. Japan will help Mongolia look for rare-earth minerals and other metals with its technologies under the agreement. Executives from some Japanese companies also attended the meeting, the foreign ministry said, including those from trading companies such as Itochu Corp., Sumitomo Corp., Mitsui & Co. and Mitsubishi Corp. Rare earths consist of 17 elements such as neodymium, dysprosium and cerium, and are used in the production of high-tech products such as cell phones, digital cameras, flat-panel televisions and hybrid vehicles.
Source: The Wall Street Journal Asia
PRIVATE SECTOR JV TO BUILD HIGHWAY TO CARRY COAL TO CHINA A new highway linking China and Mongolia will be jointly built by the two countries and is expected to improve coal transportation as well as promote economic development in both nations. The 245-km highway, costing around USD375 million, will run from Mongolia's southwest Omnogovi Province to Ganqimaodu, a border town in China's Inner Mongolia Autonomous Region. Two firms from China and Mongolia plan to set up a joint venture to be the main builder of the highway. The Mongolia firm will own 51 percent of the joint venture. Construction is scheduled to be completed in two years. The project plan has already been submitted to the authorities of the two countries. Trade between China's Inner Mongolia Autonomous Region and Mongolia reached USD5.33 billion and jumped 33.5 percent year on year over the first eight months of this year. As of September 22, around 5.24 million tons of coal has been transported to China via Ganqimaodu.
Source: Bernama FINNISH FIRM TO PREPARE FEASIBILITY STUDY ON COPPER SMELTER The Finnish company Outotec will conduct a feasibility study for a copper smelter in Sainshand, according to an agreement with the National Development and Innovation Committee (NDIC), signed during the visit of President Ts.Elbegdorj to Finland. "We were chosen as the technology partner for developing the Mongolian mining and metallurgical industry because of our leading
technological capabilities and our strong reputation in delivering complete solutions to our customers", says Outotec´s CEO Pertti Korhonen.
Source: Outotec
EVERYBODY TO GET MNT21,000 PER MONTH IN 2011 Minister of Finance S. Bayartsogt has said the draft budget for 2011 may not have a smooth passage in Parliament as it has been proposed in compliance with the new Fiscal Stability Law and may not meet traditional expectations. However, it also reflects the fact that Mongolia is coming out of the crisis and that its economy is rapidly developing. If all goes as envisaged, the budget will henceforth be responsible for providing funds for public service, while finance for economic development will come from the Development Bank. The coalition government is committed to meeting the election pledges of political parties, as it begins collecting revenue from strategic deposits. The technical basis for this is almost ready to be put in place. This year‘s draft budget has MNT780 billion for wages and pensions, and MNT805 billion to be spent from the Human Development Fund. The amount distributed among people will rise by MNT500 billion this year. Every Mongolian will receive MNT21,000 per month in 2011. Besides MNT82.5 billion will be spent on allocating MNT500,000 towards the tuition fee of every post-school student, MNT10.9 billion to health insurance, and MNT9.3 billion to those without health insurance coverage now.
Source: Udriin Sonin
DIVERSIFY OR PERISH, ENTREPRENEUR TELLS SEMINAR Mr. M. Davaasuren, General Director of Gan Khiits, told a recent seminar on the Mongolian industrial scene, that individual sectors in the country were too small and companies have to diversify to expand, if not just to survive. His company began with construction, but has now achieved success in several other fields. It has supplied metal designs and the workforce to install them in the tallest building coming up in Ulaanbaatar. It also builds all kinds of electricity tower bases and is now responsible for meeting 25% of the demand in Mongolian. It also wants to produce something for the individual consumer, and edible mushroom, sold under the brand name Husandai, is grown year round. Mr. Davaasuren says his formula for success has not changed in the seven years he has been in business. ―I do not demand any subsidy from the government but domestic industries cannot survive and flourish without easier access to affordable credit,‖ he said, adding that the alternative was exempted manufacturing units from paying tax, maybe for just the first year of operation. He called upon Mongolians to be more industry-minded. ―We receive free or heavily subsidized education, and can pay back our debt to the state by generating employment and producing import substitutes,‖ he said. Mongolian engineers have all the skills required for this. All they need is encouragement and a little initial support.
Source: Udriin Sonin
NOT MUCH SPECIFIC PROGRESS IN REFORMING BUSINESS ENVIRONMENT, BUT WORK GOES ON He did not say it in so many words, but the answers Mr. B.Arvinbayar, Chief of the Private Sector Policy of the National Development and Innovation Committee (NDIC), gave to journalist‘s questions made it clear that nine months after the beginning of the year dedicated to reforming the business environment little specific has been achieved, though opinions continue to be collected and views ascertained. A progress report has been submitted to the Government. The Ministry of Justice had 81 laws relating to the legal environment for business, many of which repeated the same provisions. Some were difficult to understand and interpret. The Ministry began a screening and pruning process with help from the German organization GTZ. The program also framed new regulations, such as on loan collateral, on raising capital in the market, and on insurance. A working group headed by the First Deputy Prime Minister and including State Secretaries and private sector representatives will decide on which ones are to go. The International Financial Corporation has also helped with suggestions. As regards the construction field the Professional Monitoring Agency will give 4 permissions instead of 7, and the Ministry of Roads, Transportation, Construction and Urban Planning has also reduced its 7 to 4. Some of these have taken effect and time is also saved by some Ministries and Agencies offering one-point service. However, most of the permissions are taken from the local administration. These have not yet been touched as the private sector has not said which ones they find unnecessary. Nothing much could be done about providing small and medium entrepreneurs with easier access to
credit because the program was not allocated any funds this year. Next year it expects to be allocated MNT16 billion as capital and another MNT16 billion from repaid loans. There should also be a second-phase grant from the Japanese Government, Mr. Arvinbayar said.
Source: English.News.mn
MP SAD AT LACK OF PROGRESS OF DECENTRALIZATION MEASURES Mr. Ts. Sedvanchig, a DP member of Parliament from Khuvsgul, finds it strange that his proposed amendments to the law on inviting tender bids have not been submitted to Parliament even after one year of their submission. Policy reforms have been introduced in several areas, and his proposals would give more financial decision-making power to local authorities. Such decentralization is an essential component of the intended reforms, but the MP feels vested interests in the bureaucracy do not wish to let got of their authority in any way and are against giving the regions the power even to decide who paints the roof of local schools or the walls of hospitals. He submitted his draft to Minister of Finance S. Bayartsogt more than a year ago but has received no specific response. ―It would be difficult for me to say whether the Minister himself does not realize its significance or whether his structural servants don‘t allow it to go forward,‖ he said. He also expressed surprise and regret that the failure of two of the designated banks to provide their share of SME credits even after nine months of the year are over has badly affected business development in the provinces, but the Government has not managed to come up with any other solution. Source: Undesnii Shuudan
ROAD COMPANY EXPLAINS SECRET BEHIND LOWER COSTS Selenge-Zuunkharaa, a road construction company, has been in the news for building hard roads for MNT80 million per kilometer, while the usual market rate is MNT700. Its head, Mr. Ch. Batsaikhan, says they have built more than 13 km of such road in the past four years. All of it is 6 meters wide and 17 cm thick. He explained there were many reasons why their costs are low. First, their roads are of concrete, and not tar. Then, almost all the raw material is supplied free by the soum administration. Local citizens supply food to the workers. Some donation also comes from both foreign and domestic sources. Mr. Batsaikhan said they do not use expensive modern technology and all workers are local but the company brings in a foreign specialist for two months to oversee the work. He feels concrete is a better choice in many areas because of its lower cost but long-term durability. He would like the experiment of local initiative, enterprise and collaboration to be replicated elsewhere, so that some employment is generated and the community gets at a low cost something it needs.
Source: Zuunii Medee LACK OF FINANCE AND EXPERTISE MAIN HURDLE TO RESOURCE EXPLOITATION The mining sector is the key driver for the Mongolian economy, says the Mongolia Mining Report Q4 2010. In 2001, mining earned just USD110 million and made up 9.5% of GDP. But in 2010, mining revenue is expected to total a comparatively massive USD2.4 billion and to dwarf all other economic sectors, making up over half the total economy. The growth of Mongolian mining however has only just begun; the country has vast and untapped mineral resources which are yet to be fully explored. Leading the way will be two giant projects that should both come on stream in 2013. The biggest is the gold/copper mine at Oyu Tolgoi which is considered to have the potential to be one of the world‘s richest producing mine with reserves that will last 60 years. The other is the 6.4 billion tons of coking coal deposits at Tavan Tolgoi, which while smaller in financial potential is still attracting the attention of the biggest corporate players in the mining world. Mongolia‘s riches are, however, not confined to these two projects and there is much more to be discovered and developed in the future. The difficulty is not resource scarcity, but a lack of finance and expertise as well as the logistical problem of extracting the resources and getting them to buyers. That the nearest road to Oyu Tolgoi is 500 miles away gives an idea of the scale of infrastructural investment required. Indeed, the investment required in Oyu Tolgoi before production can start is estimated at USD4.6 billion and already there are reportedly cracks appearing in the financing agreements between Ivanhoe, Rio Tinto and the Mongolian government. While Rio and Ivanhoe are rowing over who will own what, the government, through a Treasury Bill issue and the use of ‗tax prepayments‘, is planning to raise USD250 million before production has even begun.
This was not the only incident where the spotlight has shone on government interference in the sector. Canadian company Khan Resources suspects that the revocation of its uranium prospecting licenses in April came after pressure from the Russian state-owned uranium miner ARMZ and has successfully argued its case in the Mongolian courts winning two recent judgments. However with the Nuclear Energy Agency (NEA) giving notice that it will appeal, one of the rulings the issue is still unresolved. The Mongolian government is in a potentially difficult spot. Located between Russia and China, there are fears that these geopolitical giants will pressure Mongolia in an attempt to gain access to its valuable resources. Fear of this occurring, as well as the government‘s recent actions, could damage investor perceptions of Mongolia as a business friendly environment. Given the huge capital investment required to get Mongolian mining projects up and running, many global players will be watching developments closely.
Source: marketpublishers.com
PEOPLE‟S POVERTY STILL STALKS RESOURCE-RICH MONGOLIA Mongolia, one of the poorest countries in Asia, is in the sights of foreign investors looking to cash in on the landlocked country's bounty of natural resources, including vast untapped mineral deposits. Luxury brands including Louis Vuitton and Burberry have opened boutiques on Ulaanbaatar's Sukhbaatar Square, which is also home to the country's parliament. Hummers and European sports cars are commonly seen on the pot-holed streets. But for most of Mongolia's 2.7 million citizens, poverty is still the reality. And 20 years after embracing democracy and capitalism, the government is struggling to meet the increasingly urban population's social needs. More than 40 percent of the country's total population lives in the capital city. Thousands of herders have abandoned a traditional nomadic life in search of economic opportunity, or were driven to Mongolia's cities after a devastating winter that killed off much of their livestock. Munkherdene should be in high school. Instead the 15-year-old sifts through mountains of garbage each day at a rubbish tip in Ulaanbaatar, collecting scraps of steel, copper and plastic. Munkherdene, his widower father and elder sister -- who moved into a traditional ger closer to the dump after his mother died -- sell their wares at the markets. For his toil, the teen makes MNT 3,000, or USD2.30, a day. "I couldn't enroll at a new school so it's easier for me to work at the tip," Munkherdene said, explaining that when the family moved they lost their legal urban registration -- and with it the right to education and healthcare. "Ulaanbaatar's population grew from 600,000 in 1989 to 1,000,000 in 2007 and it's expected to be 1.3 million in 2025," UNICEF Deputy Representative Gilles Fagninou said, adding overcrowding is a major obstacle to poverty alleviation. Outside the city centre, almost half of the capital's population lives in the sprawling ger districts, with no access to running water, poor sanitation and limited social services. In parliamentary elections in 2008, both main parties talked about a better distribution of wealth and promised cash payments of about USD1,150 to each citizen but those handouts never came, leading to public protests this year in Ulaanbaatar and the country's west. About 5,000 marched on the capital in April. "We unfortunately don't have a professional government. It consists of a bunch of politicians who were not properly trained," said Mr. Jargalsaikhan, a leading Mongolian economist and political analyst. Read more… Beyond the problem of the long-promised one-off handouts, the country's welfare scheme is woefully flawed. A UN Development Program report points to a failure in the system -- not only were 89.1 percent of poor households receiving cash welfare payments, but 72.2 percent of non-poor households were also getting benefits. "Cash payments solve short-term problems. But what really needs to be looked at is who is targeted," said UNICEF's Fagninou. Experts say mining revenues will not necessarily trickle down to those who need them the most. "I think the expectations are different from the realities," said Mr. Arshad Sayed, who completed his term as the World Bank's country manager for Mongolia in July. "Several things need to be done to generate employment. One of them is realizing mining will not generate jobs. We need to look at other industries where you can add more value, like meat and cashmere," he said. For the foreseeable future, the more than one-third of Mongolia's people living below the poverty line have no way out, but have not forsaken their dreams of a better life. Ariunzaya, just nine years old, cares for her six-year-old sister and three-year-old brother while her parents work at the rubbish tip. The children eat only twice a day, as they are not old enough to use the stove
unsupervised. "I want to be a professional dancer when I get older," Ariunzaya says, seemingly unfazed by her plight. She shows off a few moves learned from other children -- but her home has no electricity, so there is no music. Munkherdene meanwhile says he wants to be a truck driver when he comes of age. "I'll work here until I'm old enough to get my license," he says.
Source: AFP
MONGOLIA MINES A RICH SEAM The hill that runs along the side of Ulaanbaatar is still covered with yurts, the nomadic tent houses that have been used for millennia by the peoples of the steppe. Some stand in the lee of the power station on the hill and the wires overhead crackle with electricity. The number of tents has actually increased this year following a "dzud" winter in 2009, the Mongolian term for an extremely snowy winter where the livestock can't find food. Many of the new arrivals lost up to a third of their animals, slaughtered the rest and moved to UB - as the locals call the capital - to look for work. Mongolia started this millennium as one of the poorest countries in the world, but since work started on the Oyu Tolgoi (OT) copper-gold mine earlier this year everything has changed. The prospects for the herders in the yurts has improved dramatically in just the last year as the investment from just this one project already lifted the economy by a fifth and will drive growth for the next three years. But when the mine comes online in 2013, the economy should explode. Mongolia is a cornucopia of untouched natural resources. The OT mine is the investment that has primed the pump, but the catalyst that pushed the government into action has been the global economic crisis, and the phenomenal growth in next-door China will provide the fuel for what should become the success story of the decade. The foreign partners own 66% of the mine, while the Mongolian government holds the rest. This year the partners will invest about USD750 million into building the facility in the southern Mongolian desert close to the Chinese border and the investment will only climb from there. "The first pound of copper is not due to be produced until 2013, but by then more than USD3 billion will have been invested into the mine in an economy which creates USD5 billion of wealth a year. It's a massive injection of cash for Mongolia and foreign exchange inflows this year are already up an order of magnitude over last year," says Mr. N. Zoljargal, deputy governor of the country‘s Central Bank. Read more... Work on constructing the OT mine is already well in hand. The exploratory Shaft 1 has been completed, which is being used to better define the size of the deposit. Work on shaft 2 has already started, which will be able to carry over 1,000 workers to the mine face and enable the extraction to start in about two years. The rising tide of money is already being felt on the foreign exchange markets, where the national currency has already started to appreciate strongly against the dollar. As the money keeps coming, the main challenge for the government is how to deal with all the cash flooding into its coffers. But the real boom will arrive when the mine is expected to go on line and the shipping of copper and gold starts. At full capacity, OT is expected to generate some USD3 billion a year of revenues (at current prices), single-handedly increasing the size of the economy by half; the government is forecasting between 7.5% and 8.2% GDP growth for the next two years, but growth will leap by 20.8% in 2013 after OT starts functioning before settling down to around 14% a year thereafter, according to Mongolia's National Development and Innovation Committee. And OT is not the only mining project. China's push to develop its northeast regions is sucking in every raw material Mongolia has to offer – and that is a lot. The country's vast copper, gold, PGM group metals and coal resources remained largely untouched in the Soviet era, as Russia produced all it needed for both internal consumption and export from its own territory. The one exception was the huge Erdenet copper mine built by the Russians in 1975 to exploit Asia's largest deposit of copper ore and the fourth largest copper mine in the world, which has been Mongolia's main source of hard currency earnings for the last four decades. OT is a big political deal that will kick start the economy, but now the country is rapidly opening up, spurred by China's rapid renaissance, and the first resource to be developed on a more commercial basis is coal. Coal as a fuel has made a dramatic revival in recent years in a world worried about energy security. And the fact that 80% of the fuel burnt in Chinese power stations is coal helps. Even the domestic demand for power is going to spike. In the last 30 years, Mongolia has not added a single power plant to its 800 megawatts (MW) of capacity today, but demand is already at 700 MW and the average consumption of power is rising fast from an extremely low base of 0.6 kilowatt (kW) per
person against the averages of 1.6 kW in China and 6 kW in Germany. Prophecy Resource Group is developing the Ulaan Ovoo coal deposit in central Mongolia, among others, which contains about 209 million tons of coal close to the Russian border that is covered by only a few inches of dirt. The coal is of such high quality it doesn't need to be washed and can be shipped out to customers immediately. CEO John Lee literally doesn't have to do anything more than go to the site and start shovelling coal into a wheelbarrow to work toward the first 50,000 tons his firm will produce in November. Ultimately, the mine hopes to produce 5 million tons a year and go from an operating cash flow of USD1 million this year to USD172 million by 2014. "There are coal deposits all over Mongolia, most of which are now being developed by a slew of companies," says Mr. Lee. "Yes, coal has a dirty reputation, but with today's technology it can be made clean." Copper produced at the OT mine will reboot the Mongolian economy, but coal should ultimately overtake it as the main economic driver: The 2009 production of coal was 7 million tons, but that is expected to increase 10-fold over the next few years, worth at least another USD7 billion a year in revenues for Mongolia, at today's prices. "Copper is going to be the main forex earner for the next few years, but a little further down the road, coal will become the most important export," says Mr. Steve Feldman, head of IR at South Gobi Energy Resource. "We have closed deals to develop a large area and China is hungry for coal. It is a captive market." Investors are still playing catch-up with Mongolia's coal developments. SouthGobi listed on the Hong Kong Stock Exchange in January, raising USD400 million, which values its coal at USD5.70 per ton against an average marketing price of about USD100 per ton. However, Prophecy is also listed on Toronto's exchange, but enjoys little coverage by analysts, which is reflected in its share price, which values its coal reserves at a mere USD0.04 per ton of coal, says Mr. Lee. Mongolia is still right at the beginning of developing these resources and most of the coal projects won't start coming online until next year at the earliest, but together they will add to the money flowing into the economy from the OT mine. The few paying attention to the story say the growing affluence will quickly spill over into the rest of the economy as it has done elsewhere in resource-rich economies. "Billions of dollars will be pouring into the country in the coming years as all these projects get going. It is going to spill over to the banks and the real estate sector and the whole economy will be lifted," reckons Mr. H. Ganhuyag from the TenGer Financial group, who is also an economic advisor to the Prime Minister. "The biggest challenges we face going forward is building up the infrastructure and how to handle all this money that is on its way so we don't succumb to things like the Dutch disease. Still, these are not bad problems to have."
Source: Business News Europe MONGOLIAN GDP PER CAPITA SET TO RISE FASTER THAN CHINA‟S Mongolians are set for a bonanza as money pours into the country. Over just the past 12 months, Mongolia has become an attractive investment destination for companies listed on the Hong Kong Stock Exchange. Several such companies have acquired resource assets in Mongolia worth USD966 million in M&A deals. All recent Mongolia M&A deals in which Hong Kong companies were involved were completed through injection of resource assets into the existing publicly listed companies in Ulaanbaatar. Per capita income for Mongolians is expected to rise to USD5,000 within the next two years and to a staggering USD12,000 by 2015. To put that into perspective, that's about what the average Shanghainese earns now. However, the increase per capita income will be faster in Mongolia. As investors clamber all over themselves to get into the Mongolian market, consumer patterns are already changing. Louis Vuitton, Chanel, Salvatore Ferragamo and Cartier have already opened stores in Ulaanbaatar. In what is rapidly becoming a darling amongst the Asian Tigers of Opportunity, Mongolia may well be worth considering if businesses are involved in the mining sector or wish to sell consumables to its newly wealthy. Another industry where Mongolia is starting to develop is solar energy. The sunniest country in the world, it is not uncommon for modern nomads to power their gers with solar panels on the roof and thus enjoy evening TV, video and free energy satellite communications. While China slows, Mongolian GDP and domestic consumption is about to skyrocket, and although a relatively small market, foreign investors capable of dealing with emerging plays would do well to investigate.
Source: 2point6billion.com FORCED CURRENCY REVALUATION WILL LEAD TO DISASTER, WEN CAUTIONS Forcing Beijing to revalue its currency would lead to a ―disaster for the world‖, Mr. Wen Jiabao, China‘s premier, has warned amid increasing tensions over efforts by governments and central
banks to hold down their exchange rates. Speaking in Brussels, Mr. Wen hit back at international criticism of China‘s currency policy, saying that acceding to demands for a faster rise in the renminbi could cause social unrest in China. ―Do not work to pressurize us on the renminbi rate,‖ he said, departing from prepared remarks. He said Chinese export companies had very small profit margins, which could be wiped out by actions such as the currency import tariffs the US Congress is threatening to impose. ―Many of our exporting companies would have to close down, migrant workers would have to return to their villages,‖ Mr. Wen said. ―If China saw social and economic turbulence, then it would be a disaster for the world.‖ He said a gradual appreciation was already under way and that ―we are going to proceed with the reforms‖, but China has refused to give a guarantee about how quickly the currency will rise.
Source: The Financial Times
IMF CHIEF WARNS OF EXCHANGE RATE WARS Governments are risking a currency war if they try to use exchange rates to solve domestic problems, Mr. Dominique Strauss-Kahn, head of the International Monetary Fund, has warned. ―There is clearly the idea beginning to circulate that currencies can be used as a policy weapon,‖ Mr Strauss-Kahn said. ―Translated into action, such an idea would represent a very serious risk to the global recovery ... Any such approach would have a negative and very damaging longer-run impact.‖ In recent weeks several major economies have taken measures to relieve upward pressure on their currencies. Last week Mr. Guido Mantega, Brazil‘s finance minister, warned of a currency war. ―We have seen reports that some emerging countries whose economies face big capital inflows are saying that maybe it is time to use their currencies to try to gain an advantage, particularly on the trade side,‖ Mr Strauss-Kahn said. ―I don‘t think that is a good solution.‖
Source: The Financial Times
PHYSICAL GOLD STORAGE SPACE IN BANKS AT A PREMIUM Following reports some time back that secure storage space for precious metals in some countries, notably Switzerland, was running out, now it appears that the largest U.S. bank by market capitalization, JP Morgan Chase, is having to re-open an old underground gold vault in New York which it closed some 20 years ago. This is very much indicative of the demand amongst individual investors and institutions for physical gold which requires such storage facilities. The principal holders will be the gold ETFs, but individual holdings have also been soaring as trust in paper currencies continues to diminish. According to a report in London's Financial Times, both Deutsche Bank and Barclays Capital are considering building new secure storage vaults in London, while JP Morgan has recently built a new vault in the Far East in Singapore. With a trend towards shipping physical gold towards the locations of the holders, rather than trusting the big banks to hold what they say they are holding in financial centers like New York and London, the building of such secure vaults, particularly in the Far East, is becoming increasingly important to gold investors - and to the banks which can make serious money out of holding precious metals for customers. As the Financial Times puts it, "The demand for storage comes as investors are buying physical gold rather than investing in precious metals futures or mining equities. Private investors hold about 30,000 tons of gold, according to the consultancy GFMS - more than a sixth of the world's gold and, for the first time in modern history, more than central banks."
Source: Mineweb
IMF BACKS AUSTRALIA‟S MINING TAX, SAYS COULD BE BROADER Australia‘s minerals resources rent tax (MRRT) has received the support of the International Monetary Fund (IMF), which believes that its introduction was ―a step in the right direction‖. The MRRT, proposed by Prime Minister Julia Gillard, would introduce a 30% tax on the profits of coal and iron-ore companies. The MRRT replaced the Kevin Rudd-inspired resources super profits tax (SPT), which aimed to impose a 40% tax on resource profits across all commodity sectors. In a report on its mission to Australia, the IMF stated that the planned introduction of the MRRT would enable a reduction in the company tax rate and would strengthen the automatic stabilizers in the budget. However, the IMF noted that the MRRT was ―less effective‖ in that regard than the originally proposed SPT. ―Consideration should be given to broadening the coverage to other mineral resources,‖ the IMF added. It also stated that another objective of tax reform should be to facilitate the reallocation of
resources so that Australia could fully benefit from improved terms of trade. Source: www.miningweekly.com
POLITICS CHIEF OF THE STATE PROPERTY COMMITTEE LIKELY TO BE AXED There are strong rumors that the present head of the State Property Committee (SPC), Mr. D.Sugar, is going to be replaced. No formal charges have been laid out against Mr. Sugar who has said, ―Nobody can dismiss me.‖ However, his confidantes say Mr. Sugar has realized his days are numbered and is preparing the ground for his own nominee, Mr. T.Ganbold, once the Chief of the iron factory in Darkhan, to succeed him. However, the SPC chief has always been a political appointee and the Secretary-General of the MPRP, Mr. U.Khurelsukh, strongly favors the head of the State Property Management and Privatization Board in the SPC, Mr. Kh.Kherlen, to replace his present boss. The final decision will be made by the Prime Minister. Mr. Sugar is an experienced state official and lawyer, a former MP and also State Secretary of the Ministry of Justice. But not all his actions as Chief of the SPC were taken to be above board. These include the way the SPC under him decided to sell the 131-km railway that had transported uranium from Dornod Mardai, and the way he allowed the Director of Mongolrostsevetmet to give the Asgat silver mine, worth USD8 billion, to Polymetal of Russia. The sales contract was later cancelled by Mr. M.Enkhbold who was then Prime Minister. Mr. Sugar has always maintained that he had nothing to do with the agreement. Prime Minister Batbold and Mr. Sugar share an agreeable relationship and observers do not think their recent spat over selection of an organization for restructuring the Mongolian Stock Exchange is the reason why Mr. Sugar has fallen out of favor. They rather think that the Government does not believe he is the right man for the job at a time when the contours of the economy are going to be radically redrawn. With many new appointments, such as that of the executive management team for the Development Bank, on the anvil, the Prime Minister and his party possibly want somebody ideologically more flexible and with a pragmatic mindset more akin to theirs.
Source: English.News.mn
HUSH-HUSH ABOUT ARREST OF SENIOR MONGOLIAN OFFICIAL IN LONDON The Mongolian Ministry of Foreign Affairs and Trade has asked the British Foreign Office for the immediate release of Mr. B.Khurts, Chief of Administration at the National Security Council (NSC), who was arrested at Heathrow Airport most likely on September 17. Giving this information at a press conference organized jointly with the NSC, the Ministry spokesperson did not say anything about the British response. Earlier reports said Mr. Khurts has so far been presented in court three times -- on September 17, 23, and 30. His next appearance will be on October 20. There is, however, no detail on who exactly arrested him and on what charges. For days there was no official reaction to the arrest, first reported by Baabar some ten days after the event. Officials said they had not been able to contact the Mongolian Embassy in London because of the time difference. Baabar wrote that Mr. Khurts had been involved in the abduction of Mongolian citizen D.Enkhbat in France years ago, in connection with the 1997 murder of S.Zorig. Once in Mongolia, Mr. Enkhbat was put in prison but was released after some months because of ill health. He died soon after. It seems the case against Mr. Khurts, who then worked in the Central Intelligence Service (CIS), relates to the alleged kidnapping, with the help of three other Mongolians, of Mr. Enkhbat from a McDonald‘s restaurant in Le Gavre in western France in May, 2003. Eyewitness accounts of the abduction appeared in French newspapers soon after the event. Several Mongolian diplomats in Germany, France and Belgium had at that time returned home after their host countries took a very critical view of such violation of human rights on their soil. President Nicolas Sarkozy was the Minister of Internal Affairs in France then. The case was reopened last summer when two French journalists came to Ulaanbaatar to investigate the matter. They talked to relatives of Mr. Enkhbat and also to human rights organizations in Mongolia, including Amnesty International. They said the French Government was not much interested in pursuing the case any longer as many documents have been lost and the international ramifications can turn out to be uncomfortable. However, now that Britain has arrested him, France has been reported as seeking his extradition there for interrogation.
Source: News.mn
MP WANTS GOVERNMENT TO SHOW “IRON FACE” TO ARROGANT MINERS Expressing his support and admiration for Speaker D.Demberel‘s speech opening the Autumn session of Parliament, Mr. S. Byambatsogt (MPRP) said it is time the Government ―showed its iron face‖ and made it clear to ―arrogant mining investors‖ that their writ does not run when State policy is decided. In his speech the Speaker had referred to foreign invested companies disregarding Mongolian laws and resolutions and even clashing with civil society organizations which protested against their conduct. He had also reminded the government that it was responsible for implementation of laws passed by Parliament, and urged it to be more active in several cases where they are perceived to be deliberately left unenforced. Mr. Byambatsogt felt the Speaker was mainly referring to the law prohibiting mining activity near water basins and forests. The MP, too, felt the Government should take action against ―some foreign invested companies‖ which seem to say, ―We will continue with our mining because this law cannot be enforced and will also get it changed because we don‘t like it.‖ It is in this context that he wanted the government to assert its authority. The MP was critical of the policy to distribute more money to people. This merely ―supports laziness‖, he said. The number of unemployed people has gone up, and instead of allocating cash, the government should work for creation of more job opportunities. He said, ―Many of those who say they are unemployed, are found owning a car, and an apartment and are in good health. Why should they receive an allowance?‖ he asked and added no society can afford to have 70% of the population claiming an allowance, which is what is seen in Mongolia today.
Source: Udriin Sonin
MPRP LEADERS SAY CRITICISM IS WELCOME, BUT NOT INSULTS Speaking on behalf of the MPRP Managing Council, the party‘s Secretary-General, Mr. U.Khurelsukh, told a press conference last week that the ensuing 26th General Assembly would discuss issues besides those related to changing the party‘s name and ideology. As the party that has been in power for 16 of the last 20 years, the MPRP will critically evaluate the progress of the country. Since it hopes to be in power in the coming years, too, it will also determine its policy in the next 20 years, he said. He made it clear that in the event of the party changing its name to MMP, the way it was called when it was established in 1921 there would be no question of another party calling itself MPRP. Members of the Managing Council told journalists that they did not attend the recent debate organized by former President N.Enkhbayar because there had been no invitation, unlike on a previous occasion. They did not see this as important as party members are free to gather and talk about the party affairs and ideology. Referring to the comments and criticism of the party leadership in the debate, they said, they always take notice of criticism so that they can improve their performance. ―Nobody is perfect and the party leadership can make mistakes. We are not afraid of fair criticism but are not prepared to be insulted,‖ they said. The managing council, they said, gave Mr. Enkhbayar ―the respect due to a former President and a former party chairman and experienced politician‖. About his criticism that the MPRP is run by a coterie and ordinary members‘ views receive no consideration, they said, ―If there is no public debate, one will say it is rule by coterie. If there is open debate, one will say the MPRP is full of factions. The record of the coalition government shows how things have been run in a spirit of harmony. Cooperation is better than criticism for its own sake.‖ Source: English.News.mn
DP LEADER CRITICIZES LABOR MINISTRY‟S INCOMPETENCE Mr. L.Gantomor, deputy head of the DP group in Parliament, has said the Ministry of Social Welfare and Labor understands itself as a Ministry of calculating and distributing welfare, and has done little for the labor sector. Not merely does it not have any long-term policy to generate employment or on wages in different sectors, it also seems to have done no research on these important areas of the economy and society. On top of that, in two recent reports to Parliament the Ministry gave different unemployment figures, once 3.4% and on another occasion 5%. Both, again, are different from the National Statistics Office figure of 9.5%. There is also no specific data on unemployment among those over 45. Mr. Gantomor wondered why so many state officials are unable to provide accurate unemployment figures, and if the work should be given to NGOs who could do a better job of collecting information. The Ministry must understand, he said, that its main job is to generate jobs and not to arrange for welfare, and that it needs to actively involve the private sector in the work.
Source: Ardiin Erkh
PARLIAMENT SESSION OPENS The Fall session of Parliament opened on Friday after a lengthy summer recess. Speaker D. Demberel told MPs the session sits at a time when the Mongolian economy ―is picking up again‖, with annual economic growth having reached 7.4 percent. ―Government revenue is expected to exceed estimates‘, after prices of major export commodities such as gold, copper, iron ore and cashmere increased in the world market. Foreign currency reserve has reached USD1.6 billion. Fifty-four of the 76 lawmakers were present at the opening ceremony. About 20 draft laws are on the agenda of the session. The more important of the debates will be on issues such as development of the mega mining project of the Tavan Tolgoi coking coal deposit, and development of a heavy industrial complex.
Source: Onoodor
LACK OF CONSENSUS CASTS DOUBT ON PASSAGE OF ELECTION LAW Mr. O.Enkhtuvshin, head of the Standing Committee on State Structure, has said prolonged negotiations between the two major parties have led to agreement on some aspects of the proposed reforms to the present election law but other important areas still elude a consensus. He feels it will be difficult to pass the law in Parliament if these differences are not ironed out. He is not in favor of some MPs‗ suggestion to lump together discussion of amendments to the local election law with the election law to save time. Both are too important and deserve careful consideration. Since the local election is not likely to be held simultaneously with the Parliament election in 2012, he thinks it will be better for the local election law to be discussed after MPs have disposed of the more urgent one.
Source: Ardiin Erkh
MPRP PRIMARY OGANIZATIONS SHOW WIDE SUPPORT FOR PROPOSED CHANGES All but 21 of the MPRP‘s 1,626 primary organizations have met and elected their delegates to the General Assembly to be held in Ulaanbaatar on November 5. The remaining 21 could not meet because most of their members were busy with the harvest. The meetings also polled members‘ views on changing the name and ideology of the party. The results show 81.3% support the move to call the party by its original and pre-1925 name of the Mongolian People‘s Party; 10.7% leave the decision to the assembly, and 8% do not wish to discard the ―Revolutionary― in the present name. The move to change the ideology has the support of 92% members, with 2.4% against it, and the rest undecided.
Source: English.News.mn
CENSUS BEGINS NEXT WEEK The National Statistical Office has announced the population and apartment census will begin between October 11 and 18 in different parts of the country. Altogether 14,000 workers will be engaged in data collection. The last census ten years ago recorded the Mongolian population as 2,375,500.
Source: Zuunii Medee
ASASHORYU BIDS THE RING A FORMAL FAREWELL Asashoryu, the 68th Yokozuna or Grand Champion of sumo, bade formal farewell to the ring on Sunday at a ceremony organized by The Japanese Sumo Association in Tokyo. Among those present to watch his topknot cut in a ritual signifying the end of his career were Prime Minister S.Batbold and other Mongolians. More than 300 people, ranging from a professional boxer to a television personality, each cut a tiny portion of his knot with a large pair of gold-colored scissors on the ring under the glare of fans and media. Asashoryu, who quit the sport in February, sat rigid and shut his eyes tight when his stablemaster Takasago chopped off the final strand. "I have two hearts beating in my body -- Mongolia gave me birth and Japan fostered me. I love these two countries most," the 30-year-old Mongolian said on the ring to huge cheers from fans after he parted with the knot. He saluted the fans as he left the ring. He kissed its side and raised both hands in the air before leaving the arena. After the ceremony, Asashoryu told reporters he wanted to be "reborn as a Japanese". Possibly hinting at the discomfort the Japanese sumo establishment had always felt with a foreigner dominating the traditional sport, Dolgorsuren Dagvadorj said, "It's my dream to become a Yokozuna as a Japanese". He won enthusiastic followers with his "bad boy" image and colorful character. But
he also angered traditionalists who believed his comments and behavior were too abrasive for a sumo champion expected to be a discreet social role model. He quit the sport after he was accused of punching a man in a nightclub brawl. Asashoryu began sumo in January, 1999 and got the Yokozuna rank in 2003. He won the Emperor‘s Cup 25 times, fewer than only two others in sumo history. In 2005, he became the first ever to win all six tournaments in a calendar year.
Source: AFP, Ardiin Erkh
JOB ADVERTISEMENTS ON BTV BTV, as Business Television is popularly called, has been providing business and economic news reports for about 18 months now and has wide viewership nationwide. It is also available to overseas viewers online at www.btv.mn. Recently BTV has expanded its service to viewers by running announcements on job vacancies, tenders, apartment rentals and such areas. These can be found on its English news program that starts at 9:30 every evening Monday through Friday. Source: www.btv.mn
ULAANBAATAR CLINIC OFFERS SOPHISTICATED NEUROSURGICAL FACILITIES The neurosurgery department at Achtan Clinic in Ulaanbaatar says it has been performing sophisticated surgical operations for three years now, at a fraction of the cost abroad. The operation theater and the laboratory have German and Japanese equipment, some of it the only of their kind in Mongolia. The lab tests have received ISO 9001 certificates. Some 20 patients with brain and spinal cord problems, who had been told they could be treated only abroad, underwent surgery successfully at the clinic, raising hope among both doctors and people that one can get proper treatment at cheaper cost at home.
Source: Udriin Sonin
ANNOUNCEMENTS
MONGOLIA INVESTMENT SUMMIT 2010, HONG KONG, OCTOBER 14 The Mongolia Investment Summit 2010 in Hong Kong on October 14 will explore the many exciting investment opportunities on offer, as Mongolia takes advantage of its mineral-rich geology and location next to China - the world‘s fastest growing consumer of natural resources. Conference highlights include: * A range of 10-minute company presentations showcasing major investment opportunities in
Mongolia * Insights into the investment climate in Mongolia from a range of high-level government and
industry speakers * Insights from the leading companies in Mongolia‘s banking and investment community * Keynote from Rio Tinto on the Oyu Tolgoi project and the implications for future investment To view the full line up of speakers at the Summit, visit www.MiningInvestmentInsight.com. Mongolia Investment Summit is co-organized with Foreign Investment and Foreign Trade Agency (FIFTA) ensuring the full support of the Mongolian government and key organizations within Mongolia including the Business Council of Mongolia (BCM) and the Mongolia National Mining Association. The BCM is a supporting association for this event and as such there is a 15% discount for their members. Please indicate your membership when registering online. Trade and Development Bank of Mongolia is the Platinum Sponsor, and the Gold Sponsors are Khan Bank, Mongolia Development Resources, Mongolia Energy Corporation and SouthGobi Resources. To book, please visit www.mininginvestmentinsight.com or call +852 2219 011. ___________________________________________ MONGOLIAN-FRENCH BUSINESS MEETING, ULAANBAATAR, OCTOBER 13 The Foreign Investment and Foreign Trade Agency (FIFTA) will hold a ‗Mongolian-French business meeting‘ on October 13 in Ulaanbaatar as part of the program of the official visit to Mongolia of Ms. A.M.Idrac, France‘s Secretary of State for Foreign Trade on October 13-14. The aim of the meeting is to expand bilateral cooperation in trade and investment and to present the Mongolian investment environment to visiting French businessmen, and to facilitate direct contacts. Around 20 French delegates from sectors like Transport, Construction, Infrastructure, Mining, Food
and Agriculture, and Tourism will attend the meeting. Mongolian companies interested in participating should contact FIFTA (contact person: Т.Enkhbayar, Phone: 320706, 326040, 99899381; Fax: 324076, Email: [email protected]) for registration. ___________________________________________ “BSPOT" on B-TV BTV (Business TV) now telecasts a 10-minute English-language news program called BSPOT every evening from Monday to Friday at 21:30, taking most of the stories from the BCM NewsWire.
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“MM TODAY” on MNB-TV
BCM is pleased to announce that Mongolian National Broadcasting continues its cooperation with BCM on ―MM Today‖. This English news program is aired every Friday for 10 minutes and is scheduled for 21:15 tonight. Tune in to watch this program that reports stories from today‘s BCM NewsWire. ___________________________________________ NEW POSTINGS ON BCM WEBSITE‟S „MONGOLIAN BUSINESS NEWS‟ The draft Tavan Tolgoi Investment Agreement which was submitted by the Government to Parliament is posted in both languages to BCM‘s Mongolian websites, (www.bcmongolia.org) and (www.bcm.mn), ‗Mongolian Business News‘ for your review. We are now posting some news stories and analyses relevant to Mongolia on the BCM website's ‗Mongolian Business News‘ as they come, instead of waiting until Friday to put them all together in the weekly NewsWire. The NewsWire will, however, continue to be issued on Friday, and will incorporate items that are already on the home page, so that it presents a consolidated account of the week‘s events.
SPONSORS
ECONOMIC INDICATORS
INFLATION
Year 2006 6.0% [source: National Statistical Office of Mongolia (NSOM)]
Year 2007 *15.1% [source: NSOM]
Year 2008 *22.1% [source: NSOM]
Year 2009 *4.2% [source: NSOM]
August 31, 2010 *11.2% [source:NSOM]
*Year-over-year (y-o-y)
CENTRAL BANK POLICY LOAN RATE
December 31, 2008 9.75% [source: IMF]
March 11, 2009 14.00% [source: IMF]
May 12, 2009 12.75% [source: IMF]
June 12, 2009 11.50% [source: IMF]
September 30, 2009 10.00% [source: IMF]
May 12, 2010 11.00% [source: IMF]
CURRENCY RATES – October 7, 2010
Currency name Currency Rate
US dollar USD 1,312.63
Euro EUR 1,818.45
Japanese yen JPY 15.80
British pound GBP 2,087.41
Hong Kong dollar HKD 169.25
Chinese yuan CNY 196.15
Russian ruble RUB 44.01
South Korean won KRW 1.17
Disclaimer: Except for reporting on BCM‘s activities, all information in the BCM NewsWire is
selected from various news sources. Opinions are those of the respective news sources.
