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Tuesday, April 15, 2014

[BREAKING: "All parties" agree to request lenders extend OT financing commitments to September 30, 2014]

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- BREAKING NEWS -

Monday, April 14, 2014

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Headlines in Italic are ones modified by Cover Mongolia from original

 

Turquoise Hill Announces First Quarter 2014 Production and Provides Update on Project Financing

VANCOUVER, BC--(Marketwired - April 14, 2014) - Turquoise Hill Resources today announced the first quarter 2014 production for Oyu Tolgoi and provided an update on project financing.

Production at Oyu Tolgoi in Q1'14 was heavily impacted by post commissioning issues, including rake blade failure in both of the tailings thickeners, which caused the shutdown of one production line for approximately seven weeks. Repairs to the rakes have been completed and full production recommenced in late March. The concentrator also completed a number of major planned shutdowns in Q1'14, including ball mill relines and the first concave change in the primary crusher.

Copper and gold head grades increased in Q1'14 as the mine deepened. These higher grades combined with ongoing improvement initiatives led to improved copper and gold recoveries during the quarter. Also during March 2014, Oyu Tolgoi processed small volumes of ore from the high grade areas of the gold core.

Concentrate sales continue to accelerate and are matching current production. During the second half of 2014, Oyu Tolgoi is expected to drawdown inventory. Oyu Tolgoi will monitor production levels and if necessary, match them to meet customer requirements, with the goal of returning to more normal levels of inventory by the end of 2014.

Oyu Tolgoi expects to produce 135,000 to 160,000 tonnes of copper and 600,000 to 700,000 ounces of gold in concentrates for 2014.

Update on Project Financing

All parties agreed to send requests to the project finance lenders to extend the commitment letters for the financing of the underground development at Oyu Tolgoi to September 30, 2014.

Kay Priestly, Turquoise Hill Chief Executive Officer, said, "All parties remain committed to the underground development of Oyu Tolgoi and to resolving the outstanding shareholder issues. Constructive discussions between all parties have resulted in significant progress being made in resolving the issues, and those discussions are continuing."

Oyu Tolgoi Production Data

All data represents full production and sales on a 100% basis

 

 

 

 

 

 

 

1H
2013

3Q
2013

4Q
2013

1Q
2014

Full Year
2013

 

 

 

 

 

 

Open pit material mined ('000 tonnes)

37,925

12,151

21,956

21,621

72,032

Ore Treated ('000 tonnes)

4,430

8,052

7,835

5,560

20,317

Average mill head grades:

 

 

 

 

 

 

Copper (%)

0.42

0.47

0.49

0.52

0.47

 

Gold (g/t)

0.27

0.36

0.41

0.49

0.36

 

Silver (g/t)

1.31

1.39

1.44

1.52

1.39

Copper concentrates produced ('000 tonnes)

50.2

110.3

129.5

102.9

290.0

 

Average concentrate grade (% Cu)

26.1

27.7

25.4

24.6

26.4

Production of metals in concentrates:

 

 

 

 

 

 

Copper in concentrates ('000 tonnes)

13.1

30.6

32.9

25.3

76.7

 

Gold in concentrates ('000 ounces)

21

62

74

66

157

 

Silver in concentrates ('000 ounces)

85

196

208

163

489

Sales of metals in concentrates:

 

 

 

 

 

 

Copper in concentrates ('000 tonnes)

-

-

6.1

13.1

6.1

 

Gold in concentrates ('000 ounces)

-

-

10

28

10

 

Silver in concentrates ('000 ounces)

-

-

36

78

36

Metal recovery (%)

 

 

 

 

 

 

Copper

73.2

81.7

86.4

87.9

81.6

 

Gold

56.7

66.3

71.2

75.5

66.1

 

Silver

47.8

54.9

57.2

59.3

54.2

 

 

 

 

 

 

 

Link to release

 

---

Munkhdul Badral Bontoi

Founder & CEO

Email: mogi@covermongolia.mn

Mobile: +976 9999 6779

Skype: mogibb

P Please consider the environment before printing this e-mail.

Wednesday, April 2, 2014

[MMC refinances BNP loan, ADB lowers 2014 GDP forecast, Thai hospital takes over UB hospital, and the Pope moves into a ger]

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Wednesday, April 2, 2014

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Overseas Market

YAK closed -2.5% to C$2.73

Mongolia Growth Group Ltd. Closes Previously Announced Private Placement as New CEO Purchases Shares

Thunder Bay, Ontario, April 1 (FSCwire) - Mongolia Growth Group Ltd. (YAK – TSXV) ("MGG") or ("the Company") is pleased to announce that on March 31, 2014, the Company closed the non-brokered private placement which was previously announced on March 3, 2014 ("the Offering"). The Company issued 125,000 common shares in the capital of the Company ("Common Shares") at a price of CDN $2.00 per Common Share for aggregate proceeds of CDN $250,000. All of the Common Shares issued under the Offering were purchased by the Company's newly appointed Chief Executive Officer, Paul Byrne. 

The Company intends to use the proceeds of the Offering for general corporate purposes. 

All of the Common Shares issued pursuant to the Offering are subject to a four-month hold period in accordance with applicable securities laws. 

The Offering is considered to be a "related party transaction" as defined under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions ("MI 61-101").  The Offering is exempt from the formal valuation requirement and minority shareholder approval requirements of MI 61-101 as neither the fair market value of the securities distributed under the Offering nor the consideration received for those securities, insofar as the Offering involves Mr. Byrne, exceeded 25% of the Corporation's market capitalization. 

A material change report is being filed on SEDAR concurrently with this press release.  

Link to release

 

ERD closed +24.24% to C$0.18 on the news

Erdene Provides Year-End Financial Results and Project Review

HALIFAX, NOVA SCOTIA--(Marketwired - April 1, 2014) - Erdene Resource Development Corp. (TSX:ERD) ("Erdene" or "Company"), is pleased to provide a review of 2013 activities on the Company's principal projects in Mongolia in conjunction with the release of its year-end financial results.

2013 Project and Financial Highlights

Altan Nar Gold-Polymetallic Project (100% Erdene):

·         Twelve distinct gold-polymetallic mineralized zones identified to date along a 5.5 by 1.5 km mineralized corridor 

·         Trenching program uncovered high grade intersections in four areas that returned from 5 m of 5.2 g/t gold to 19 m averaging 8.9 g/t gold within broader zones up to 50 m averaging 1.1 g/t gold 

·         Significant silver and base metal mineralization is associated with high grade gold zones particularly in Union North where trenching returned 19 m of 8.9 g/t gold, 66 g/t silver, 7.7% lead and 2.5% zinc 

·         Previous drilling in the Discovery Zone retuned up to 29 m of 4.3 g/t gold, and drilling at Union North (1.3 km to the northwest) returned up to 9 m of 4.4 g/t gold 

·         Targets remain open along strike, with confirmed lengths of up to 400 m, and at depth where the deepest intersection on the property ended in 5 m of 4.7 g/t at 230 m depth in the Discovery Zone

Teck Resources Limited ("Teck") and Khuvyn Khar:

·         Strategic Alliance with Teck established to fund and explore Erdene's mineral tenements in southwest Mongolia, including the Khuvyn Khar copper discovery 

·         Exploration work completed at Khuvyn Khar identified priority drill targets with high probability for intersecting copper porphyry mineralization at relatively shallow depths 

·         Through an initial private placement and participation in Erdene's equity financing in November 2013, Teck is now Erdene's largest shareholder at 10.4%

Mongolia:

·         The Mongolian government approved a new Foreign Investment Law that eases restrictions on foreign investors and offers long-term tax stabilization contracts 

·         In January 2014, the Mongolian government reduced the gold royalty from 10% to 2.5% for gold sold through the government

Financials:

·         General and administration costs for the Company decreased 53% compared to 2012 

·         The Company secured $1.69 million in financing during the year 

Link to report

 

Announcement made after Monday close. NRU closed -57.14% to 0.3c Tuesday

Newera Fails to Intercept Any Significant Coal with Ulaan Tolgoi Phase One Drilling

March 31 -- Newera Resources Limited (ASX: NRU) has completed Phase One of its Ulaan Tolgoi drilling program without any significant intercepts of black coal.

Newera will now review all the geological data generated through the completion of Phase One of the program to determine whether there is geological merit in commencing Phase Two of the program or otherwise.

Link to release

 

VKA closed +11.43% to 3.9c Tuesday

Viking Ashanti: Notice of General Meeting, Explanatory Statement and Proxy Form

General Meeting to be held at the Celtic Club, 48 Ord Street, West Perth, Western Australia on Friday, 2 May 2014 commencing at 11.30am (WST)

April 1, Viking Ashanti Ltd. (ASX:VKA) –

Resolution 1: Approval of change in scale of Viking's activities (Takeover of Auminco Mines)

Resolution 2: Ratification of previous issue of Viking Shares (22,537,645 shares at $0.035 per share)

Resolution 3: Approval of issue of Viking Shares and Viking Options pursuant to Proposed Capital Raising

Resolution 4(a): Approval of issue of Viking Shares and Viking Options to Directors under Proposed Capital Raising – Mr John Gardner

Resolution 4(b): Approval of issue of Viking Shares and Viking Options to Directors under Proposed Capital Raising – Mr Peter McMickan

Resolution 4(c): Approval of issue of Viking Shares and Viking Options to Directors under Proposed Capital Raising – Mr Trygve Kroepelien

Resolution 5: Approval of issue of Viking Shares and Viking Options to the Auminco Lenders

Resolution 6: Approval of issue of Viking Options to the Corporate Advisers

Resolution 7: Approval of issue of Viking Options to Iarudi LLC

Resolution 8: Approval of change of company name (to Viking Mines)

Link to release

 

1878 closed -1.65% to HK$4.7, SGQ closed +4.84% to C$0.65 Tuesday

SouthGobi: CHANGE OF COMPANY SECRETARY AND AUTHORISED REPRESENTATIVE

HONG KONG, March 31 – The board of directors (the "Board") of SouthGobi Resources Ltd. (TSX: SGQ, HK: 1878) (the "Company") announces that Ms. Allison Snetsinger has resigned as the Company Secretary and authorised representative of the Company and Mr. Vincent H. Kou has been appointed as the General Counsel and Company Secretary and authorised representative of the Company with effect from 31 March 2014.

Mr. Kou held senior legal role with Rio Tinto Alcan for more than nine years. He was based in Montreal, Canada as Chief Counsel for global business development and growth. Prior to that, he was based in Beijing and Shanghai as Legal Counsel and eventually as Director of Legal Services & Mergers & Acquisitions and Chief Representative for Rio Tinto Alcan in China, and in Singapore as Chief Counsel, Asia. Mr. Kou has extensive experience in mergers & acquisitions, joint ventures, divestments, foreign direct investments and greenfield projects in China and South East Asia countries, and compliance related matters. Before joining Rio Tinto Alcan, Mr. Kou practiced law for five years with Canadian business national law firms and he was qualified as barrister & solicitor in Quebec, Canada in 1997.

The Board takes this opportunity to express its sincere gratitude to Ms. Snetsinger for her valuable contribution to the Company during her tenure and also extends its welcome to Mr. Kou on his new appointment.

Link to release

 

VOR closed flat at 0.3c Tuesday

Voyager Resources: Timothy Flavel Resigns as Director

April 1, Voyager Resources Ltd. (ASX:VOR) --

The Company wishes to advise that Mr Timothy Flavel has resigned as a Director of the Company. The Board would like to record its appreciation for the contribution Mr Flavel has made to the Company and wishes him every success in the future.

Link to release

Final Director's Interest Notice

 

HAR last traded 8c Monday

Haranga Resources: Timothy Flavel Resigns, Brian McMaster Appointed as Director

April 1 -- Haranga Resources (ASX:HAR) is very pleased to announce that Mr Brian McMaster has been appointed as a Director of the Company.

Mr McMaster is a Chartered Accountant and has more than 20 years' experience in the area of corporate reconstruction and turnaround / performance improvement. Mr McMaster's experience includes numerous reorganisations and turnarounds, including being instrumental in the recapitalisation and listing of over 15 companies on the ASX. Mr McMaster is an Executive Director of the corporate advisory company Garrison Capital.

The company would also like to advise that Mr Timothy Flavel has resigned as a Director of the Company. The Board would like to record its appreciation for the contribution Mr Flavel has made to the Company and wishes him every success in his future endeavours.

Link to release

Final Director's Interest Notice

Initial Director's Interest Notice

 

WOF last traded 7c Monday

Wolf Petroleum: Timothy Flavel Resigns as Director

April 1 -- Wolf Petroleum Limited (ASX:WOF) wishes to advise of the resignation of Mr Timothy Flavel as a Director of the Company effective immediately. Mr Flavel resigns from his position in order to focus on other business activities. The Board would like to thank him for his efforts to date and wish him well in his future endeavours.

Link to release

 

975 closed -4.11 to HK$0.70 Tuesday, -32% YTD

Mongolian Mining faces looming debt challenge

April 1 (FinanceAsia) Hong Kong-listed Mongolian Mining Corp (HKEx:975), which operates two coal mines in Ukhaa Khudag and Baruun Naran, both located in the Southern Gobi province of Mongolia, is faced with a looming debt challenge amid a slump in coking coal prices.

Coking coal prices in its main market China have fallen about 25% in the last two years, increasing MMC's net loss to $58.1 million in 2013 from $2.5 million in the previous year and drawing attention to some of the debt repayments that the company has to make from next year.

In an interview with FinanceAsia in Hong Kong, Dr Battsengel Gotov, chief executive officer of Mongolian Mining Corp (MMC), said the company has no major capital expenditure plans and that any rebound in coking coal prices will help MMC generate enough cash to pay down its debt.

"Without any expected cash outflow we have confidence to settle out debt obligations," Gotov told FinanceAsia. "We don't need prices to double in order to be able meet our debt obligations in 2015. We just need a slight recovery in pricing by maybe 15%," he said, adding that if prices rise to $100 per tonne the company will generate sufficient cash to meet all its debt obligations.

The average selling price of MMC's coking coal is currently $85 per tonne.

Coking coal is used in steel-making and many of China's steel makers are struggling amid a cyclical downturn in the industry, exacerbating a glut in the supply of coking coal. "The supply and demand equilibrium is out of order. This is why we see the sharp fall in prices which started in early 2012 and still continues," Gotov said.

Gotov expects the oversupply of coking coal to ease this year, as major miners globally are cutting back coal production. Last week, Glencore Xstrata closed its Ravensworth coal mine in Australia and other major names such as BHP Billiton have also cut back. However, he does not expect prices to rebound swiftly.

"Short term for 2014, we expect we will still see depressed pricing for coking coal," Gotov said. "We don't expect any meaningful price improvements until the demand supply equilibrium is restored but we believe this will be restored."

Looming debt challenges

The company managed to reduce its debt repayments due in 2014 from $102 million to $34 million by refinancing a $130 million outstanding loan with BNP Paribas. The loan was previously extended by South Africa's Standard Bank but was transferred to BNP Paribas, when the latter took over Standard Bank's loan portfolio in Asia.

In March, MMC entered into a facilities agreement with BNP and Chinese bank ICBC for a $150 million loan, which refinanced the $130 million loan. Its new facility matures in December 2016. According to Gotov, the reduction in debt payments in 2014 gives the company "breathing space." As of December 31, 2013, Mongolian Mining had cash of $76.5 million.

Link to article

 

Mogi: slightly old but a well worth the read. TRQ closed -0.6% to US$3.31 Tuesday

OT waits for a brave and bold stroke

By S.Bold-Erdene

March 21 (Mongolian Mining Journal) The European Bank of Reconstruction and Development (EBRD) has once again deferred releasing funds for expansion of the underground mine at Oyu Tolgoi, from February 27 to March 31. That will also be when 15 commercial banks decide whether to defer the funding or even to cancel the financing deal. 

Many wonder why the Government of Mongolia should keep dragging its feeton accepting the $4.2-billion loan fromthe 15 banks. Mining circles know that a huge amount of money is needed to build the OT underground mine and that it is not easy to get hold of that kind of money in these times. 

The formal statements issued by both sides make no mention of the actual reasons why OT is not ready or able to receive the loan. There have been reports that Rio Tinto has agreed to begin construction of the underground mine if the Government accepts certain conditions, but there is no confirmation of what these conditions are or if any conditions have indeed been presented. The Government's formal position remains that it would be violating the law to agree to taking the loan before the Feasibility Report for the underground mine is ready. If neither side makes an effort to make a move, the financing deal may very well lapse, but it seems both sides are privately reconciled to this. 

Why is the Government not agreeing to accept financing for the underground mine construction? A year ago, four Ministers of Mongolia sat at the OT shareholders' meeting and haughtily demanded that Rio answer 15 questions. Nothing is heard from them today. What has happened during this past one year?

Link to full article

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Local Market

MSE Weekly Review, March 24-28: Top 20 -1.51%, Turnover 273.1 Million

Ulaanbaatar, March 30 (MONTSAME) Five stock trades were held at Mongolia's Stock Exchange March 24-28, 2014.

In overall, 197 thousand and 079 shares were sold of 49 joint-stock companies totaling MNT 273 million 104 thousand and 454.49.

"Sor" /75 thousand and 352 units/, "Remikon" /48 thousand and 354 units/, "Hai Bi Oil" /23 thousand and 852 units/, "Hermes center" /17 thousand and 012 units/ and "Genco tour bureau" /6,072 units/ were the most actively traded in terms of trading volume, in terms of trading value--"Sor" (MNT 148 million 217 thousand and 319), "Darkhan nekhii" (MNT 28 million 936 thousand and 670), "Tavantolgoi" /MNT 21 million 843 thousand and 165/, "Gutal " /MNT 13 million 558 thousand and 650.00/ and "Gobi" (MNT eight million 398 thousand and 385).

Link to article

Link to MSE Weekly Trading Report

 

BDSec Daily Market Update, March 31: Top 20 Ends 6-Day Losing Streak, +0.08%, Turnover 167.4 Million

March 31 (BDSec) Mongolian shares edged higher on Monday, ending 6-day losing streak. Suu (SUU), the largest milk products producer of the nation, was the most actively traded company on the MSE with MNT 119.4 million worth of shares changed hands.

Sor (SOR) and Ulaanbaatar BUK (BUK) soared 14.6% and 10.5% respectively. State Department Store (-5.26%) led decliners of the day while Darkhan Nekhii (NEH) and Bayangol Hotel (BNG) lost -2.58% and -0.93%, respectively.

Trading turnover for Monday was MNT 167.4 million.

TOP MOVERS

Trading Value Leaders

Close (MNT)

Value (MNT)

Suu (SUU)

105,000

119,430,000

APU (APU)

4,100

28,916,750

Sharyn Gol (SHG)

8,100

6,075,000

 

 

 

Top Gainers

Close (MNT)

% Change

Sor (SOR)

2,350

+14.63%

Ulaanbaatar BUK (BUK)

41,000

+10.51%

Mongolian Development Resources (MDR)

750

+7.14%

 

 

 

Top Losers

Close (MNT)

% Change

State Department Store (UID)

540

-5.26%

Darkhan Nekhii (NEH)

14,710

-2.58%

Bayangol Hotel (BNG)

53,500

-0.93%

Link to update

 

MSE News for April 1: Top 20 -2.8%, Turnover 9.06 Million

Ulaanbaatar, April 1 (MONTSAME) At the Stock Exchange trades held Monday, a total of 3,222 shares of 15 JSCs were traded costing MNT nine million 060 thousand and 953.50.

"Remikon" /1,186 units/, "State Department Store" /746 units/, "Genco tour bureau" /735 units/, "Gutal" /307 units/ and "UB-BUK" /84 units/ were the most actively traded in terms of trading volume, in terms of trading value--"UB-BUK" (MNT three million 461 thousand and 320), "Gutal" (MNT three million 388 thousand and 580), "Darkhan nekhii" (MNT 825 thousand), "UB hotel" (MNT 460 thousand) and "State Department Store" (MNT 411 thousand and 795).

The total market capitalization was set at MNT one trillion 621 billion 801 million 057 thousand and 724. The Index of Top-20 JSCs was 15,846.80, decreasing by MNT 457.22 or 2.80% against the previous day.

Link to article

 

FRC Approves Tender Offer by Controlling Parties to Buy Out Uguumur-Uul

March 31 (MSE) Based on Clause 6.1.1, 6.2.2 of Financial Regulatory Committee's "Law on Legal Status of the FRC", Clause 57.1 of Company Law, Financial Regulatory Committee has approved the tender offer to buy 26,282 shares equal to 45.4 percent of "Uguumur-Uul" /MSE:OZM/ JSC for not less than MNT128 /one hundred twenty eight/  per share, made by Ts.Ganbold, B.Peter, related parties that currently hold 31,553 shares equal to 54.6 percent out of total 57,835 share of the company. As stated in the FRC's resolution, the offer is valid for 60(sixty) working days starting from March 26, 2014.

Link to release

 

FRC Approves Tender Offer by Controlling Parties to Buy Out Khorgo Khairkhan

March 31 (MSE) Based on Clause 6.1.1, 6.2.2 of Financial Regulatory Committee's "Law on Legal Status of the FRC", Clause 57.1 of Company Law, Financial Regulatory Committee has approved the tender offer to buy 43,886 shares equal to 32.5 percent of "Khorgo Khairkhan" /MSE:CHE/ JSC for not less than MNT130 /one hundred thirty/  per share, made by O.Tulgalag, R.Ariunbold, R.Batbold,  related parties that currently hold 91,240  shares equal to 67.5 percent out of total 135,126 shares of the company. As stated in the FRC's resolution, the offer is valid for 60(sixty) working days starting from March 26, 2014.

Link to release

 

FRC Approves Tender Offer by Controlling Parties to Buy Out Gonir

March 31 (MSE) Based on Clause 6.1.1, 6.2.2 of Financial Regulatory Committee's "Law on Legal Status of the FRC", Clause 57.1 of Company Law, Financial Regulatory Committee has approved the tender offer to buy 114,854 shares equal to 41.7 percent of "Gonir" /MSE:GNR/ JSC for not less than MNT 114 /one hundred fourteen/  per share, made by B.Batkhuu, who currently hold 160,332 shares equal to 58.3 percent out of total 275,186 shares of the company. As stated in the FRC's resolution, the offer is valid for 60(sixty) working days starting from March 26, 2014. 

Link to release

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Economy

MNT historic low v. USD: 1,787.59, February 27, 2014

BoM MNT Rates: April 1 Close

 

4/1

3/31

3/28

3/27

3/26

USD

1,782.55

1,782.01

1,782.54

1,784.28

1,785.16

EUR

2,459.21

2,451.87

2,450.28

2,457.49

2,466.47

CNY

287.29

286.42

287.18

287.25

287.67

GBP

2,970.26

2,964.02

2,963.92

2,957.53

2,953.28

RUB

50.77

50.01

49.89

50.12

50.47

March MNT Chart:

 

Link to rates

 

BoM FX auction: US$11.8 million sold at 1,780.1, $51 million MNT, CNY15 million CNY swap offers accepted

April 1 (Bank of Mongolia) On the Foreign Exchange Auction held on April 1st, 2014 the BOM has received from local commercial banks bid offer 14.8 million USD and 16 million CNY. The BOM has sold 11.8 million USD as closing rate of MNT 1780.10.

On April 1st, 2014, The BOM has received MNT Swap agreement offer in equivalent to 51.0 million USD and CNY Swap agreement offer of 15 million CNY from local commercial banks and accepted all offer.

See also:

·         FX Auction Statistics

Link to release

 

The FSC comprises of BoM Governor, Finance Minister and Chairman of the FRC

THE FINANCIAL STABILITY COUNCIL HELD MEETING  

April 1 (Bank of Mongolia) On 28th of March 2014, Financial Stability Council (FSC) has held its regular session meeting. Through the meeting, the FSC discussed:

(i)      the request of the U.S., dealt with enforcing the law "Foreign Account Tax Compliance Act" that is regarded to the citizens and entities of U.S.,

(ii)     Economic situation in the first two months of 2014 and fundamental factors that affected exchange rate,

(iii)    Some issues on the legal environment of long-term insurance and,

(iv)    enhancing the statistical coverage and improving the quality of the financial survey, compiled by the Bank of Mongolia.  

According to the decisions of the meeting, the relevant duties have been assigned to the regarding parties by the FSC within its legal mandate.  ANALYTIC GROUP OF THE FSC

Link to release

 

BoM issues 205.5 billion 1-week bills, total outstanding +0.26% to 946.8 billion

March 31 (Bank of Mongolia) BoM issues 1 week bills worth MNT 205.5 billion at a weighted interest rate of 10.5 percent per annum /For previous auctions click here/

Link to release

 

Payment Settlement System Statistics 2013

Link to report (in Mongolian)

 

Mogi: "The consumer price index rose by 10.4% in 2013" it says but BoM said 12.5%. What am I missing?

ADB Asian Development Outlook 2014: Mongolia

Mogi: Economic growth forecasted at 9.5% for 2014, 10% for 2015. Revised down from 13%

April 1 (The Asian Development Bank) --

Mongolia is challenged by significant external imbalances because foreign direct investment has declined rapidly and some mineral exports remain weak. Growth is forecast to moderate in 2014 and remain broadly stable in 2015, inflation to decline, and the current account balance to improve over the next 2 years, assuming appropriate policies. The major policy priority is to address pressures on the balance of payments and foreign exchange reserves.

Economic performance

The Mongolian economy grew by 11.7% in 2013, down from 12.4% in 2012. Growth was boosted by highly expansionary fiscal and monetary policies to compensate for the marked slowdown in coal exports and mine development financed through foreign direct investment (FDI), which have been the drivers of growth in recent years. Strong economic growth has helped reduce the poverty rate by more than 11 percentage points in the past 2 years, to 27% in 2012.

Industrial production increased by 20.1% in 2013, contributing 5.1 percentage points to economic growth, driven by construction, which expanded by 66%, boosted by monetary and fiscal stimulus. Mining output expanded by 20.7%, thanks to the ramp-up of copper production at the vast Oyu Tolgoi mine, which started in June 2013. Services expanded by 10.0%, contributing 4.3 percentage points to economic growth. Favorable weather allowed agriculture to expand by 13.5%, contributing 2.0 percentage points (Figure 3.12.1).

Domestic consumption was the main driver of economic growth from the expenditure side, increasing by 16.3% in constant prices and contributing 13.7 percentage points to growth. Gross capital formation increased by 2.1%, contributing 1.5 percentage points, while net foreign trade and services subtracted 3.6 percentage points (Figure 3.12.2).

The completion of the first phase of Oyu Tolgoi and a dramatic fall in FDI reduced imports of capital goods, which led a 5.7% drop in imports of goods. Exports of goods declined by 2.6% as coal exports to the People's Republic of China (PRC) plummeted by 40.7% owing to abundant coal supplies in the PRC and growing competition from other major coal-exporting countries.

The consumer price index rose by 10.4% in 2013 (Mogi: this is wrong, was 12.5% according to BoM). It had fallen in the first half with the phase-out of the cash handout scheme and the temporary impact of the price stabilization program of the Bank of Mongolia (BOM), the central bank. Inflation rose subsequently, driven by currency depreciation and expansionary fiscal and monetary policies (Figure 3.12.3).

Fiscal policy became more expansionary in 2013 as the consolidated, on- and off-budget fiscal deficit widened to 11.1% of GDP from 10.9% in 2012. Excluding oÁ budget spending, the cash deficit amounted to 1.4% of GDP, lower than the 7.4% recorded in 2012, and the structural deficit reached 1.7%, within the 2% ceiling of the Fiscal Stability Law (FSL).

Actual government revenue increased by 19.6%, less than the budgeted (and highly optimistic) amount. Revenue shortages and implementation challenges reduced public investment expenditure by 5.1%, holding the increase in government expenditure to a mere 3.1% (Figure 3.12.4).

The Development Bank of Mongolia (DBM) has become the main source of financing for off-budget spending, providing an amount equal to 9.6% of GDP in 2013 mainly for projects such as roads that do not generate revenue. The main source of DBM financing is proceeds from the Chinggis bond and a 5-year, $580 million euro bond issued in 2012, and the $290 million Samurai bond issued in December 2013. DBM debt is guaranteed by the government and so a contingent liability for the budget.

The ratio of public debt to GDP rose from 35.9% in 2010 to 63.0% in 2012, and likely remained broadly unchanged in 2013, though no official data are yet available. The external debt component equaled 48.3% of GDP in 2012. A debt sustainability analysis conducted in 2013 by the International Monetary Fund found Mongolia at moderate risk of debt distress, assuming a strong policy scenario—no longer at low risk, as found by previous analyses. Public debt sustainability has been impaired by the rising share of borrowing at commercial rates since 2012.

To cushion the impact of declining FDI and boost credit growth, the BOM cut the policy rate three times in 2013 by a total of 275 basis points to 10.5%. It injected liquidity equal to 17.1% of GDP, including for onlending to selected sectors through price stabilization and mortgage programs at subsidized interest rates. Bank credit increased as a result by 41.0% year on year in 2013 and by 54.3% year on year to January 2014. Broad money (M2) increased by 19.3% and 36.6% year on year during the same periods (Figure 3.12.5). These policies are widely seen as important factors behind balance-of-payment (BOP) pressures starting last year.

Capitalization and liquidity in the banking system have improved, but vulnerabilities remain. Weakness in bank supervision, inadequate provisioning, high loan concentration (especially in construction), dollarization, and a high and rising ratio of credit to deposits (at 103% in February 2014) have heightened the risk of bank distress. Corporate governance needs to be strengthened in the banking sector.

The current account deficit narrowed in 2013 to $3.2 billion, or 27.4% of GDP, from 32.6% in 2012 (Figure 3.12.6). The trade deficit improved to 18.1% of GDP from 22.8% in 2012 as the decline in imports outpaced that of exports, but the services and transfers balance worsened. Since mid-2013, the trade and current account deficits have both narrowed as currency depreciation strengthened export competitiveness and constrained imports—and as exports were boosted by the start of production at the Oyu Tolgoi mine. FDI plunged by about 55% in 2013 because of uncertainties arising from changes in the investment law, slower growth in the PRC, the completion of the first phase of Oyu Tolgoi, and delays in the expected commencement of the mine's second phase. Foreign exchange reserves almost halved in 2013, falling by $1.9 billion to $2.2 billion, or 4 months of imports. They increased to $2.4 billion in January after the DBM issued a $290 million samurai bond 90% guaranteed by the Japan Bank for International Cooperation.

The Mongolian togrog has depreciated by 27% against the US dollar since early 2013 as capital inflows ebbed and market sentiment weakened over prolonged debate surrounding Oyu Tolgoi issues and over uncertainty regarding the regulatory framework for foreign investment. The nominal effective exchange rate of the togrog fell by 15.5%, but the real effective exchange rate fell by only 7.2% as inflation in Mongolia exceeded that of its trading partners (Figure 3.12.7).

In October 2013, the parliament enacted a new comprehensive investment law, which aims to encourage FDI over the medium-term by leveling the playing field for foreign and domestic investors and ensuring a stable legal environment for investment. Under the law, the category of "strategic investor" no longer applies, and private foreign investors need only register with a state agency, rather than seek government approval.

Economic prospects

Medium-term prospects remain promising, with growth expected in the double digits after a dip in 2014, given Mongolia's potential to develop its natural resources. Economic growth is forecast at 9.5% in 2014, driven in particular by the start of copper production at the Oyu Tolgoi open pit in June of last year. Growth in non-mineral output is expected to be held back by the tighter economic policy, which will be needed to reduce high domestic demand and so relieve BOP pressures. In particular, the overall budgetary deficit including off-budget outlays is expected to be lower than in 2013, as the DBM curtails investment expenditure and as BOM liquidity injections are expected to begin their phaseout this year.

Economic growth is expected to pick up slightly to 10% in 2015, spurred by further development in mining, including the possible development of the Oyu Tolgoi underground mine and an expansion of coal production from the Tavan Tolgoi mine (Figure 3.12.8).

Non-mining growth is expected to accelerate as restrictive economic policies are eased and FDI flows are assumed to partly recover.

Inflation in 2014 is expected to increase to 11% (Mogi: a decrease, if 11% is ADB's correct forecast), driven by the lagged effect of expansionary monetary policy in 2013 and the recent depreciation of the togrog. Inflationary pressure in 2015 is expected to ease, assuming a tightening of economic policy in 2014 and a more stable exchange rate, with inflation falling to 8% consistent with BOM monetary policy (Figure 3.12.9). (Mogi: looks like their inflation forecasts factored 10.4% as their 2013 inflation)

The current account deficit is forecast to fall to 20% of GDP in 2014 and 15% in 2015 as the trade balance improves. Exports are expected to grow following the start of Oyu Tolgoi production last year, and as new mining projects come onstream. The recent exchange rate depreciation and the expected tightening of economic policy will further constrain domestic absorption and dampen imports. The new investment law and the planned second phase of Oyu Tolgoi development are expected to support a recovery in FDI inflows, further stabilizing the BOP.

Mongolia's economic prospects are subject to downside risks from an uncertain external environment and the continuation of expansionary economic policies at a time when the BOP is under pressure. The PRC is the main destination for Mongolia's exports, accepting about 87% of them in 2013. Mongolia is thus highly vulnerable as the PRC rebalances from investment-led growth toward greater reliance of consumption, which may initially dampen demand for Mongolia's exports.

Environmental concerns in the PRC may also reduce coal consumption. Further, substantial increase in global supplies and growing competition are putting Mongolia's mineral exports on an uncertain growth trajectory. Future trends in Mongolia's major export prices are also uncertain (Figure 3.12.10). On the domestic front, the continuation of current monetary and fiscal policies will inevitably perpetuate BOP and inflationary pressures, requiring significant real economic adjustments that may curtail growth.

Policy challenge—safeguarding macroeconomic and financial stability

The main policy challenge is to adjust unsustainable macroeconomic policies to relieve BOP pressure, contain inflation, and reduce the risk of severe distress in the financial sector. Negative shocks to FDI and coal exports have intensified BOP pressures since mid-2012. These pressures have been compounded by highly expansionary fiscal and monetary policies that have spurred substantial credit expansion and debt accumulation, as well as boosted demand for imports.

While current foreign exchange reserves are broadly adequate, the declining trend is not sustainable. The resumption of significant foreign capital inflows may take some time despite the adoption of the new investment law. Current policy offers little room to strengthen financial buffers to cope with possible external shocks. Mongolia needs to change course to mitigate its vulnerability to external shocks.

Addressing these challenges requires a comprehensive package of economic policy reforms, but improvements to monetary management and fiscal policy are the most urgent. Monetary policy should focus on macroeconomic and financial stability. The priority should be to gradually phase out the BOM's quasi-fiscal lending programs—or, if they are considered high priority, include them in the budget. Procyclical fiscal policy is a major concern, although the discipline of the FSL, if adhered to in practice and in spirit, would reduce the scope for such a policy. Needed fiscal reforms include reprioritizing and reducing public expenditure, incorporating DBM oÁ-budget expenditure into the budget (thereby subjecting it to the FSL), and developing a medium-term fiscal framework to reduce the consolidated, on- and oÁ-budget deficit to the law's 2% ceiling. Expenditure reform should include improving the quality of public investment expenditure, which has come under strain in view of the rapid increase in public investment.

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Politics

S.Ganbaatar: Mongolian state with is filled with children trained by neo-liberalism in America

April 1 (UB Post) The following is an interview with MP S.Ganbaatar about present issues.

-In connection to inflation, the government increased the minimum wage and pension by thirty percent. In reality, an addition of 20 thousand MNT is barely enough. As days pass by and the purchasing capacity of citizens degrades, is it alright for you to sit and claim that you've increased benefits?

-It's a huge toll on citizens, especially for those who have small salaries, because the prices of products and goods increase from day to day. This is heavily affecting women and citizens receiving pensions. One section of the government shouldn't handle this problem through public relations while another section complains. In order to resolve this, trilateral negotiations should be done soon.

In other words, the government sets prices, and representatives of business entities and normal citizens doing labor – who may face losses due to the increase in product prices – should discuss state agreements of the Trade Union Committee. While one group says the prices of goods hasn't increased, another claims that their original salary of 300 thousand MNT has become 200 thousand MNT.

The state's trilateral negotiations would examine this issue, and if necessary, harsh comments would be said and the issue discussed according to calculations and combined research. Unfortunately, this negotiation isn't taking place. It's important that a trilateral negotiation is organized urgently and publicly, in front of citizens. I used to do trilateral negotiations in my six years as the Head of the Mongolian Trade Union. This is a mechanism for the fair distribution of goods. In professional terms, it is a salary, pension, allowance and tax mechanism to righteously allot goods produced by society back to society.

-Does that mean current allotment principles aren't righteous?

-Exactly. The price of goods has increased by 30 percent and the increases are going into the pockets of a handful of people. There's an issue of increased rates not going to workers. Starting trilateral negotiation as soon as possible is the main solution for the present situation.

-The Mongolian Trade Union has repeatedly demanded trilateral negotiations. They still haven't been organized. Is it because they are making plans poorly, or is the government approaching the matter irresponsibly?

-The Trade Union is setting requirements very well. The government must accept these requirements. Representatives of employing businessmen, the Trade Union and governors should gather together to discuss the exact percentage of increases in prices, how to include the private sector in salary issues, and hear the arguments of the minister in charge of minimum wage, pension and allowances for people associated with the government.

Now, we should approach the matter by reporting that they mustn't use this opportunity to increase the prices of goods and products, or else their licenses will be confiscated. Businessmen are required to get license approval to do business. They aren't people who take sides. By holding three-way discussions and signing agreements, laws are approved. The most important thing is to implement this law.

-Not holding negotiations is a violation of the law, right?

-In situations when the exchange rate of the MNT has fallen due to increases in price, urgently holding meetings and making decisions is stated in the law. If the law is violated, it's required that those affected go on strikes and do demonstrations. This is included in the law. Therefore, all of these things should be done in the near future. It's also my duty to report on these methods. In my case, instead of leading the Trade Union and setting requirements for the government, my work is to demand urgent operations for this mechanism.

-The government announced that they increased minimum wage and pensions in connection to inflation and will not increase them again. What do you think of this?

-If the state's trilateral negotiations begin, it's decided that calculations and research will be shown to give evidence and rationale for the reasons for the presently difficult situation. It doesn't mean that salaries, pensions and allowances will increase whenever there's a negotiation. The most important thing is to understand each other. Only markets running without any price management is the biggest problem. It's stated in article 5.4 of the Constitutional Law that the government will manage the economy. Mongolia has an economy with government management. The fact that all of this isn't being implemented means that the mechanisms of these negotiations aren't functioning properly.

- What has to be resolved before the negotiations can be settled?

-The government needs to be intellectual. They can't sit by and watch trade. The owners need to meet their social responsibilities. The government has losses. Instead of discussing losses, they need to analyze and evaluate them and operate mechanisms to come up with solutions that work. Without the operating mechanisms of trilateral negotiations and only disparaging others, they are becoming people unaware of values. All I can say is to begin trilateral negotiations urgently.

-You're one of the people who protests for modification of the Oyu Tolgoi contract. You published a book that proposes things that need to be done for a country to be a country. In other words, you've found a new solution. What is that solution?

-First, Mongolians are on the verge of losing their independence. The present situation is as if Mongolia has already lost it. What this means is that the World Bank, International Monetary Fund and banks and funding organizations now make decisions for Mongolia in the name of counsel and showing support. In particular, decisions connected to mining resources are sometimes made by Mongolian ministers with the influence of foreign councils and advocacy organizations. This is dangerous.

Secondly, there must be national resource debate. Mongolian resources are becoming ownerless. The issues of why the nation's people can't profit from owning their national resources need to rise up.

Thirdly, Mongolia is a sacrificial lamb for the liberal political view that shows how wealthy countries can stop the economic growth of poor countries, named neo-liberalism and originating from America.

They started wars and made factions fight each other in countries rich in resources and ended up with their property, or implemented programs where properties were managed by new owners. In other words, wealthy foreigners made normal citizens suffer losses through crafty measures. Mongolia has become its victim now.

In addition, five methodologies are included. A solution to get out of this is evident in the example of Norway. It's stated that no single group of people, a few elites connected to politicians, have the right to control the society of Norway, its people and mining resources. This is why Mongolia needs a righteous society. We aren't becoming a righteous society because a small group of people are possessing and plundering public resources.

-It seems that by publishing this book, you may face a considerable amount of opposition and criticism?

-I explained and bravely wrote about all of this, and what I needed to do in the future, in my book. The Mongolian state is filled with children trained by neo-liberalism in America. They will noisily rise up. Very strong and deadly publicists will lead campaigns to criticize me in a frightening manner just for writing this book. Writing is my duty. If an MP doesn't do this then who else will? An MP who has gained the trust of many citizens has an obligation to write about what sort of state Mongolian citizens want and methodologies for how to reach it. This is why I wrote this book.

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Council of Mining Associations Established to Foster Cooperation Between Industry and Government

Ulaanbaatar, April 1 (MONTSAME) A council of professional associations has been founded with objectives to enhance mineral policies and legal environment, to develop middle- and long-term programs as well as to plan relevant strategies.

Besides improving public and private cooperation, the council will also assist public organizations in decision-making. The Mining Minister D.Gankhuyag will lead the newly-founded council, established under a cooperation of nearly twenty mining-related organizations such as National Mining Association, Industry and Geology Union and Exporters Association.

At the first meeting, the council is planning to join the Committee for Mineral Reserves International Reporting Standards (CRIRSCO) in order to promote best practices in the international reporting of mineral exploration results and to meet the need for improvement in national reserve classification standards.

The Mining Ministry has agreed to conclude a cooperation agreement with the joining associations to reflect their opinions in its decisions.

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Deputy Justice Minister sentenced for interfering with Interpol investigation into Enkhbayar's sister

April 1 (news.mn) Deputy Justice Minister E.Erdenejamiyan heard the charges against him and the sentence on Monday in the First Primary Criminal District Court on March 31st. The First Primary Criminal District Court has suspended Deputy Justice Minister E.Erdenejamiyan`s civil service for two years and has imposed fines of 60 times the low-labor wage

The Independent Authority Against Corruption of Mongolia initiated an investigation because of a letter sent by the Deputy Justice Minister to Interpol last year. The letter was believed to ask Interpol to stop the investigation of former president N.Enkhbayar`s sister N.Enkhtuya, and her assistant B.Khuyag. After the letter was sent Interpol announced that it had halted the investigation into the suspects. 

The Deputy Justice Minister was convicted as his act interfered with the investigation and slowed the inquiry process. 

On Tuesday the Secretary General of the Mongolian People's Revolutionary Party (MPRP) G.Shiilegdamba did not agree with the Court decision about the Deputy Justice Minister and announced an appeal the Appeal Court during a press conference on April 1st. 

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Budget Standing Committee Convening to Discuss 2014 Budget Clarifications

Ulaanbaatar, April 1 (MONTSAME) This committee is scheduled to meet at 11.00 am Wednesday in the "B" hall of the State House.

The meeting is to discuss issues of ordering the cabinet to work out a clarification of the 2014 budget and improving investments plan, to consider proposals and conclusion of a working group, who is in charge of drawing up a draft decision of parliament, on measures for rightful spending of the budget.

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Families of jailed environmentalists announce hunger strike

April 1 (news.mn) An appeal is scheduled to be heard at the Appeal Court of the City on April 8th by green activists of Gal Undesten (Fire nation) Ts.Munkhbayar and others who were sentenced to 21.6 years. The activities were sentenced for firing a gun shot, placing a bomb in state special protected area, assaulting civil servants, and attempted to threaten public security.

Families of the environmentalists, including mothers and wives, have decided to call a hunger strike in front of the Court building if the Court does not issue a plea. 

Convicted activist Z.Enkhsaikhan`s wife commented on Tuesday; "I believe the Appeal Court panel will be fair and not be influenced by State Prosecutor General D.Dorligjav. If the Appeal Court does not offer a plea to our husbands, fathers and sons we will call a hunger strike. We will do it until justice wins."

The environmental movement held a protest in September 2013 against amendments being made into the Law to Prohibit Mineral Exploration and Mining Operations at the Headwaters of Rivers, Protected Zones of Water Reservoirs and Forested Areas, the only significant Mongolian law protecting nomadic herders" traditional lands and watersheds from further radioactive and chemical contamination, diversions of rivers and land-grabbing. The protest ended up with the arrest of the key members of the movement. 

The-two day long trial in January 2014 finally issued a decision and sentenced Ts.Munkhbayar, G.Boldbaatar, D.Tumurbaatar and J.Ganbold each to a 21.6 year jail term and 2 years to M.Munkhbold. Two other suspects; O.Sambuuyondon and B.Gantulga`s were acquitted.

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Mogi: soooo what exactly are the amendments?

Amendments proposed to the controversial Law on Tobacco Control

April 1 (news.mn) New amendments are supposed to be made into the Law on Tobacco Control that has been the subject of public debate since it became effective on March 1st, 2013. 

Parliament delivered a request to the Government asking to conduct a poll on possible amendments into the Law on Tobacco Control Mongolia. The Law on Tobacco Control was initiated by female parliamentarian L.Erdenechimeg before it was passed by Parliament, in particular female MPs. 

However the Law on Tobacco Control caused public outcry due to its harsh restriction of tobacco use, unveiled adverts in public places during a year period since it was effective. Smokers especially complain that the law is too broad as in the law there is no allowance for smoking areas to be permitted. Most complaints are because the law prohibits the use and trade of tobacco in the places less than 500 meter from schools and kindergartens. 

Several MPs have submitted a draft law to make new amendments into the Law on Tobacco Control Mongolia and delivered it to the Government with the intention of a poll being held.  They plan to submit the draft law to be discussed in the spring session meeting of Parliament that is scheduled to begin on April 7th. 

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Parliamentarians to Study Drug and Food Safety Regulations of the Philippines

Ulaanbaatar, April 1 (MONTSAME) A parliamentary delegation left Monday for the Philippines to get familiarized with the country's regulations in medicine, laws, legal environment for medicine products and foods factories.

The MPs D.Battsogt, Z.Bayanselenge, D.Sarangerel and Ya.Sodbaatar intend to witness how the state policy influence on medicine market monitoring, how to set up a regulatory agency regarding the medicine, what the roles are of parliament and ministries in controlling it, and how foods and drugs factories are managed.

A multifunctional body of regulating medicine expressed a willingness to render a support to Mongolia in some relevant works.

Mongolia has not reached big achievements yet in controlling the medicines flow but has been registering their import and export and been adhering standards for the last 20 years.

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Mongolia's Media Laws Threaten Press Freedom

By Leese Gardner

April 1 (PBS) For more than 70 years, one fixture of Mongolian life was not unlike that of its closest neighbors. During the Soviet period, the sole source of information in the then-satellite state was the state-run Mongolian National Broadcaster.

Twenty years on, and Mongolians now enjoy access to a growing media market. High-speed Internet and more than 500 news outlets are available to most of the country's 3 million people, with a recent resource boom which continues to bring about rapid change and development.

Yet a range of broad and ill-defined laws continue to prevent journalists from publishing quality investigative material, without significant risk.

THREATS TO PRESS FREEDOM

In Mongolia, a heavily concentrated press largely owned by prominent figures sees critical or unflattering stories regularly censored. Exposure of corrupt practice can often leave journalists in fear of prosecution under the country's criminal defamation laws.

Recently adopted Freedom of Information statues often conflict with privacy laws, thus achieving little by way of greater transparency. Even fewer laws act to protect journalistic practice, the confidentiality of sources or whistle-blowers. Investigative work undertaken by journalists rather than police or intelligence agencies could even be deemed to violate the constitution.

Coupling these restraints with state secrecy laws merely serves to reinforce a sobering "chilling effect."

Article 16 of Mongolia's constitution guarantees rights of free expression, thought, speech, assembly and press. This ensures the right of media and citizens alike to "seek and receive" information.

Yet press advocates emphasize that these constitutional rights do not include the right to "impart" information, "regardless of frontiers," as international law stipulates. In practice, this means that often other laws will act to circumvent these constitutional protections.

CRIMINAL DEFAMATION AND LIBEL LAWS

Perhaps the greatest prosecutorial threat to Mongolian journalism can be found in the country's defamation laws, which act to criminalize slander, defamation and libel. Such laws are regularly used by prominent figures — namely, individual politicians and increasingly, powerful businesspeople — as a means of shielding themselves from public criticism. While criticism of any kind, say press advocates, is often deemed tantamount to defamation.

Under Mongolia law, defamation is a criminal offense. Article 111.2 of the Criminal Code stipulates that the spread of libel "to the public by means of mass media" is punishable by a fine equal to 51 to 150 times the monthly minimum wage — 9.79 million to 28.9 million tugriks ($5,685 to $16,782) — or incarceration for three to six months. These sums would be more than enough to bankrupt smaller independent news outlets.

Between 1999 and 2011, 313 defamation cases were reported to have involved media officials.

Yet journalists are said to often retract their work before cases goes to trial. Editors may also be held liable for publication of material deemed defamatory.

Judges recently issued statements prohibiting the press from reporting on defamation trials involving media officials as proceedings were underway.

STRICT EVIDENTIARY RULES

Under Mongolian law, journalists also must bear the burden of proof, evidencing that what they've published is true and accurate. Yet strict evidentiary rules have prevented some journalists from mounting a strong defense. Evidence has been deemed inadmissible in cases where documentary proof was not notarized as original copy.

Such rules significantly hamper a journalist's capacity to prove their innocence. This applies especially in investigative cases whereby access to original source documents is not always guaranteed — in which case the law does not provide for a "reasonable publication" defense.

Recently amended laws on crime prevention do not yet list defamation as a criminal offense. Yet press advocates fear that the current Parliament will soon act to demand its inclusion, given that a recent list of plaintiffs in defamation cases against media officials is said to include members of the ruling Democratic Party.

LACK OF LEGAL PROTECTION FOR WHISTLE-BLOWERS

Mongolian law sees few protections in place to ensure confidentiality of sources is maintained. Nor are there recognized legal protections for whistle-blowers.

Journalists often face pressure from political, judicial and intelligence officials to give up the names of their sources. There is no legal requirement specifying that journalists comply with such demands. Article 139 of the Criminal Code offers some protection for "a journalist's professional activities that are consistent with the law." Yet the statute does not specify what constitutes legal "professional activities."

Press advocates have expressed their concerns given a prevailing view among the government and judicial officials that investigations remain the purview of intelligence services and police.

Under Mongolia's Constitution, investigations can technically only be carried out by police, prosecutors or intelligence services. This means that a journalist's recorded interviews, notes, tapes, even photos, if deemed "investigative material," could well violate the law.

In 2009 local media freedom institutes reported numerous Mongolian journalists had been threatened or attacked in the course of their careers. One in six Mongolian journalists had received "improper reactions," often from those directly affected by critical content. Almost 20 percent of those received severe threats of violence, including death threats.

CENSORSHIP AS OWNERSHIP: IS MONGOLIA'S MEDIA STATE-CONTROLLED?

Media industries elsewhere face significant decline in revenue and reach. Yet Mongolia's media has thus far bucked these trends.

In 2009 Mongolians enjoyed access to regular news from almost 400 news outlets. By the first quarter of 2013, the number reached 555 — an all-time high. Extraordinary figures, given a population of less than 3 million people.

Prominent government officials and powerful business figures are said to own the vast majority of the country's news media outlets. Direct government censorship is explicitly outlawed in Mongolia's constitution. Yet by simply buying up media outlets, the country's most powerful are then able to apply pressure and where necessary, determine the nature of news content.

Yet exact figures are hard to come by. While legislation states that media ownership and investment shares be made public, often media outlets will submit only a company's registered name, in which the names of individual investors are not disclosed.

As Globe International President Naranjargal Khashkhuu wryly explains, "It is amazing that all these media outlets can all survive in this small market. So we must ask, who feeds them?"

In a recent interview with DW Akademie, Mongolian Press Institute Executive Director Munkhmandakh Myagmar went on to explain that:

"[D]evelopment is not going based on market principles because the media does not survive on revenues from advertising or sales. Instead the media exists based on financial support or subsidies from politicians. In turn they are obliged to provide information that is wanted by politicians. This makes journalism in Mongolia extremely unhealthy."

Media outlets are often called upon to sign "agreements of co-operation" with advertisers. These "blocking" provisions will then contractually prevent media from distributing any "negative information" about entities from which they receive funds for advertising.

STATE MEDIA BUDGET FIGURES NOT DISCLOSED

Media advocates say that while the government releases an annual budget for media development, the public remains in the dark as to which outlets receive the vast bulk of funding.

"In 2012 the Parliament of Mongolia had some 3 billion tugriks in its media funding budget," says one press advocate. "Yet one particular television station is said to have reserved for it 700 million tugriks of the funding, while others didn't receive any money, at all. There is no public discussion, so the public is not aware who is getting how much. It makes state funding another form of government censorship."

FREEDOM OF INFORMATION … IN THEORY

In 2011, in response to recommendations from both the UN Human Rights Council and local rights groups, Mongolia adopted its first national Freedom of Information (FOI) Law. Yet advocates suggest that FOI procedures are unworkable, conflict with other laws, and demonstrate the government's lack of commitment to the law's implementation.

In 2012 a coalition of civil society actors sought to more closely examine the annual state budget. Together they lodged some 29 FOI requests to government agencies. Only one agency provided a single response before rejecting the request on grounds of violation of individual privacy.

A long list of broad and ill-defined exemptions to FOI (Article 18) acts to curb publication of detrimental information related to national security, the "public interest of Mongolia," matters of competition, intellectual property or private material relating to the "lawful interests" of individuals or organizations.

So while laws on anti-corruption oblige public officials to disclose their assets and income records, under the law of individual privacy, the information on the properties and net worth of public officials remain a closely kept secret. This helps explain why local media will sometimes report on a politician's (disclosed) number of livestock, vehicles and other properties, rather than their net value.

STATE SECRECY LAWS

A team of journalists recently tested the responsiveness of government agencies to FOI requests. Government agencies are legally obligated to respond to such requests within a maximum 14 working day period. The journalists sought information regarding the criminal trial and subsequent execution of famed revolutionaries during the early 1920s.

Yet under a broad State Secrets Act, execution notices remain a matter of state secrecy. Documents related to capital punishment are to remain a state secret without limitation — that is, never to be declassified.

The journalists ran significant risks in even requesting such information. Individuals can run afoul of the State Secrets law by simply requesting that information be released — that is, a possible eight years imprisonment for simply "seeking" information deemed secret under the law's sweeping list of State Secrets, which covers almost 60 broad topics ranging from foreign policy to economics, science to technology, defense to intelligence.

Thus, journalists on the foreign policy beat might do best to avoid never-to-be-declassified "document(s) describing official policy and opinion of Mongolia on cooperation with other countries, all kind of information and reports provided by other countries through accredited manners."

Instead some may practice self-censorship, directly drawing their reports from official press releases rather than risk running afoul of the law. Such constraints may seem somewhat anachronistic at a time when growing Internet connectedness is said to subvert the influence of state-owned media.

At a recent investigative journalism training session in Ulaanbaatar, media trainers from the UK spoke about privacy and recent moves by major news outlets to publish NSA-related material. The audience of Mongolian journalists asked: "Yes, but how do you fund it?"

Perhaps there is a movement, not yet wholly defined, to enhance press freedom that will likely require new funding models as well as a digital shift.

Only then, equipped with a strong grasp of local laws as well as their constitutional rights to freedom of information, speech and expression, might Mongolian journalists act to loosen the grip of the powerful on public debate.

Lisa Gardner is a journalist and media trainer currently based in Ulaanbaatar, Mongolia. Her work speaks to conflict, new media and human rights in Asia and places particular focus on questions of digital security and freedom of expression. You might find her most days on Twitter (@leesebkk) and can reach her via email (PGP) at leese.gardner@gmail.com.

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Bumrungrad Hospital acquires controlling stake in Ulaanbaatar Songdo Hospital

April 1 (Bangkok Post) Bumrungrad Hospital Plc (BH), the country's second-largest listed hospital operator, will be counting on Health Horizons Enterprises Pte Ltd, its new investment arm, to spearhead overseas investment following its failed attempt to gain management control in Bumrungrad Hospital International (BHI). 

According to a BH source, the Thai hospital plans to dilute its 30% stake in BHI, which has been instrumental to the group's international expansion. BHI used to hold a 40% stake in Manila-based Asian Hospital (AHI), but later divested its stake. 

Health Horizons Enterprises (HHE) was set up last month in Singapore with registered capital of US$20,000. HHE, in which BH holds an 80% stake, last Friday acquired a controlling interest in Ulaanbaatar Songdo Hospital (UBSD), a leading hospital in the Mongolian capital. 

HHE owns 100% of the common shares of Bumrungrad Mongolia LLC (BML), which holds 51% of the common shares of Seoul Seniors Tower LLC (SST). SST owns and operates Ulaanbaatar Songdo Hospital. 

BML issued share capital of 4.08 billion Mongolian tughrik (about 74.5 million baht) at a par value of 1,000 tughrik per share. 

BH set capital expenditures this year at 1.2 billion baht excluding mergers and acquisitions. 

"Hospitals in South Korea and Singapore have targeted it for referrals," said Dennis Brown, Bumrungrad's corporate chief executive. "Most Mongolians with serious medical problems who can afford overseas treatment would be seen at UBSD, since it is the leading private hospital in the country. This gives us an excellent opportunity to work with UB Songdo Hospital to expand their diagnostic and treatment services and coordinate tertiary referrals at the source." 

Mongolia has one of the world's fastest-growing economies. For several years Bumrungrad has been one of the main destinations for Mongolians seeking overseas treatment

BH remains upbeat about revenue growth of 10-15% this year from 14.65 billion baht in 2013. Foreign patients make up 61% of the company's revenue. 

Shares of BH closed yesterday on the SET at 96.3 baht, up 50 satang, in trade worth 80.9 million baht. 

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Previously reported by Reuters, International Rail Journal on February 27, included in February 28 issue of CoverMongolia NewsWire

Samsung Awards Germany's Vossloh with Rail Fastening System Contract for Mongolian Railway

March 28 (Machinery Market) Vossloh Fastening Systems GmbH, of Germany, has won a contract from Samsung C&T Engineering and Construction Mongolia to supply its MNG 30 fastening system for a new heavy-haul railway line in the landlocked central Asian country. The first consignment of fasteners, which will be manufactured in Werdohl, will be shipped by the end of the month, according to Vossloh; the contract will be completed in the first half of 2015. The MNG fasteners are a modification of the firm's W30HH type, used with concrete sleepers on ballasted tracks. 

Vossloh says that the MNG 30s are suited for handling the coal shipments on the line, which will run from mines at Tavan Tolgoi to Gashun Sukhait on the Chinese border. They have also been adapted to cope with Mongolia's harsh climate and the challenging soil conditions on the line, which runs through the Gobi desert.

Mongolian State Railways (MTZ) says that it expects freight traffic to almost double on its 1,815km network by 2020, after volumes reached record levels in 2013. MTZ carried 21 million tonnes of freight last year; it forecasts that volumes will increase to 34 million tonnes next year and reach 45 million tonnes in 2020. MTZ is a joint venture between Russian Railways and the Mongolian government. The company was created in 2008 under reforms that aimed to bring private-sector investment to the country's railways.

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PANDROL COMPLAINS OF UNFAIR BIDDING FOR NEW RAILWAY PROJECT

March 28 (BCM NewsWire Issue 318, March 28, 2014) The British railway part manufacturer Pandrol has complained of an unfair bidding process for Mongolia's railway construction process.

Pandrol has complained that Samsung C&T's decision to partner with Germany's Vossloh for railway fastening and sleeper parts for the construction of 267 kilometers of rail was unfair because Vossloh's parts have not been tested in Mongolia yet, which is a requirement for its use. A working group established by the Road and Transportation Ministry has been tasked with investigating the complaint. Source: Undesnii Shuudan

 

Made in Mongolia bicycles to hit the market in May

March 30 (UB Post) G.Dashnyam, widely known as "Nickel Ganba" among Mongolians, will open a bike factory in early May and says he will launch his domestically made bikes on the market within a month.

The factory will produce 100 bikes per day. The bike's brand name is Zetro and will come in large and small size frames designed for cycling in the city.

A cycling helmet is also to be produced by the factory.

The Cycling Ulaanbaatar project, founded by the Mongolian Youth Federation, has cooperated with Nickel Ganba LLC to support domestic manufacturing.

Nickel Ganba LLC began in 2010 and started making bikes and mopeds as an experiment.

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TURNING CRISIS TO OPPORTUNITY IN MONGOLIA

by Alexander Benard, Chief Operating Officer of Schulze Global Investments, a U.S. private equity firm with an office in Mongolia. He is the author of a Foreign Affairs article on investment strategy in emerging and frontier markets.

March 31 (Diplomatic Courier) The Mongolian economy, not long ago the darling of the global investment community, has hit another rough patch—with a bank collapse, slumping commodity exports, a devaluing currency, and a sharp slide in government bond prices all conspiring to produce a string of bad news. Mongolia's recently re-elected president has reacted with dismay, and financial firms that track Mongolia are sounding alarm bells. Indeed, this October the government called an extraordinary session of parliament, the same month that the World Economic Forum hosted a special session in Ulaanbaatar to discuss possible solutions to Mongolia's economic travails.

In fact, however, Mongolia's economic road bumps are a blessing in disguise. With the right corrective measures, the Mongolian government can help the country avoid the Dutch Disease symptoms from which it was already beginning to suffer and reduce its economic dependence on China, thereby setting the country on a path of more balanced growth in the decades to come.

For years now, Mongolia has confounded economic analysts who have been predicting that the country, with its vast mineral resources, is on track to become the world's next Saudi Arabia with expected annual growth rates of over 20 percent. Instead, a series of crises have dampened hopes that those expectations will be met. Just in the last few months—and right after Mongolia's president, Tsakhiagiin Elbegdorj, won reelection on campaign promises to restore strong economic growth—the insolvency of the Savings Bank, Mongolia's fifth-largest lender, required a government take-over to soothe a troubled investment community. Global commodity prices for several of Mongolia's key natural resource exports have declined and the country has also been hit by weakening demand from China due to the slowdown of the Chinese economy. In addition, Rio Tinto announced this past summer that it will be delaying further investment into Oyu Tolgoi, a massive gold and copper mine that is supposed to account for a third of Mongolia's GDP by 2020, in part because of lingering disputes with the Mongolian government. Meanwhile, Mongolia's currency has devalued by almost 20 percent over the past 12 months, and the World Bank has revised its growth projections for the country.

In response, President Elbegdorj is proposing to take immediate steps to accelerate the development of its mining sector so that Mongolia can resume the growth pattern that economists had been forecasting for the country. But this would be a mistake. In fact, even the country's current, lower-than expected growth rates have been causing worrisome distortions in the Mongolian economy. Before the recent slowdown, the country's currency had actually been performing fairly well, causing a strain on non-mining exports. And wages in the mining sector had been moving higher faster than in other sectors, draining the Mongolian labor market of workers to the point where it had become almost impossible to find good human resources for non-mining jobs. In addition, because most Mongolian commodities are exported to China, Mongolia was growing increasingly dependent on Beijing.

For those who follow relations between China and Mongolia, this last point is especially ironic. Mongolians have historically been fearful of China, suspecting that the Chinese government's intention is to dominate Mongolia and control its resources. For that reason, the Mongolian government balked last year when Rio Tinto attempted to sell a subsidiary that mines coal in Mongolia to a state-owned Chinese company without first obtaining the Mongolian government's permission. But of course, if China is buying all of Mongolia's off-take, it achieves a high degree of control all the same.

The mining sector will regain its footing in due course, but in the meantime, Mongolia should view the current reprieve as an opportunity to set the foundations for healthier economic growth.

Specifically, Mongolia should take advantage of the weaker currency and the softening of its mining industry to encourage the development of non-mining export sectors. A great example of this is cashmere. Mongolian cashmere is among the highest quality cashmere in the world, but the industry has suffered in recent years due to underinvestment, difficulty competing on price, and severe labor shortages—classic symptoms of Dutch Disease. The Mongolian government can now help to revive the sector by focusing on training, investment promotion, and building relationships in key export markets like the United States, Europe, Russia, and the Middle East. The United States and Europe should do their part, too. Mongolia is a pro-Western democracy in a part of the world where most other countries are authoritarian vassals of China. Because of its mineral wealth, Mongolia will only become a more important player in the years to come. Western countries should therefore make Mongolia a key pillar of their Central Asia strategy. But unfortunately, although the EBRD has been fairly active in Mongolia over the years, the U.S. has instead recently slashed USAID's budget in Mongolia to approximately $6 million per year—one of the smallest USAID budgets in the world—and in general has been far less active in the country than its European and Asian counterparts.

There are some positive signs are on the horizon. The country recently established a new agency called Invest Mongolia, which is tasked with streamlining market-entry for foreign investors. It also managed, at the special parliamentary session in October, to pass a new law that reduces the number of regulatory approvals required of foreign investors. The law also provides various tax and other incentives to promote investment into certain sectors of the economy as well into certain of the country's less developed regions.

But sustaining this momentum will require a fundamental recognition on the part of Mongolia and its partners that the country's potential is about more than just resource exports. To be sure, the resources with which Mongolia is blessed will significantly lift the country's GDP, and with it the living standards of the Mongolian people. The question is whether that growth will be balanced, whether other sectors of Mongolia's economy will be able to coexist alongside the country's natural resource sector, and whether Mongolia will be able to avoid dependence on China. Mongolia now has a unique opportunity to improve its odds on all of those fronts.

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Ulaanbaatar

Austria's FHWien University Meets Mayor on Opening University in Ulaanbaatar

Ulaanbaatar, April 1 (MONTSAME) Mayor of Ulaanbaatar city E.Bat-Uul Monday received a delegation of Austria's FHWien University.

The sides exchanged views on founding a university in Ulaanbaatar to prepare city matters experts together with the University, where the Mayor noted that a quality of some universities does not meet the expectation.

Expressing a satisfaction with prospects to collaborate with the city in establishing the university, its administrative office head Dr Christian Kropfitsch said "now we should work out proposals and reach agreements on realizing this work".

The Mayor proposed that the university is erected in the city's western side to which the city administration will move in 2016.

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Ulaanbaatar Waste Recycling Initiatives Discussed

Ulaanbaatar, April 1 (MONTSAME) A meeting ran Monday to discuss the UB city's waste classification and recycling initiatives.

Its organizers were an environmental working group of the Mongolian Business Association, Ministry of Nature, Environment and Green Development, and Center for Freshwater Reserves and Nature Conservation. They thoroughly discussed the capital city's action plans for waste management and recycling, explored ways to coordinate these initiatives, informed each other about waste recycling processes, and shared views on how to supply classified waste to relevant entities.

After this, an internal auditor of Ulaanbaatar Public Utilities Authority Ch.Enkhjargal highlighted the city action plans for waste management and recycling and answered questions.

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Ulaanbaatar to reveal names of blacklisted contractor companies

April 1 (UB Post) Ulaanbaatar City Mayor E.Bat-Uul has recently assigned his deputy in charge of social development to make a public list of the blacklisted companies in Mongolia.

The names of all executor companies that haven't fulfilled their contract obligations to complete construction projects will be announced to the public, as part of the Mayor's "Improving Investment Projects Monitoring" ordinance.

Members of the State Special Commission who approved the sub-standard construction projects for operation will also have their names publicly revealed and will be held accountable through the project.

The State Specialized Inspection Agency, Auto Road Authority and Agency for General Planning are currently collecting information on blacklisted companies and commission officials.

The lists will be complete by April 15 and will be discussed at the Ulaanbaatar City Council meeting for public announcement approval.

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Diplomacy

Mongolia Accepts Chinese Invitation to Co-Found Asian Infrastructure Investment Bank

March 31 (infomongolia.com) The regular Cabinet meeting of the Government of Mongolia was held on March 28, 2014, where one of the issues revised was to accept the proposal of the Government of China to participate in the creation of the Asian Infrastructure Investment Bank (AIIB) as Founder.

The initiation to create the AIIB was announced by the President of the PR of China Xi Jinping just before the October 2013 APEC meeting in Bali that aims to promote the economic integration of Asia Pacific and provide financial support for infrastructure construction in developing countries in Asia.

In order to create the Bank some developing economies in Asia such as Mongolia, Pakistan and Sri Lanka were invited to act as co-founders of the Bank and the Government of Mongolia at its Friday Cabinet meeting resolved to accept the proposal, where Mongolia's Minister of Finance Ch.Ulaan is entrusted to submit relevant documents for further steps of approval.

According to the OECD estimation made in 2011, it was calculated the global infrastructure requirements over the next two decades would cost around 50 trillion USD and the Asian Development Bank estimates that developing Asian economies need to invest 8 trillion USD from 2010 to 2020, just to keep pace with expected infrastructure needs.

In October 2013, the Government of China proposed setting up an Asian Infrastructure Investment Bank and if it happens the benefits could be enormous for everyone and in time the impact could be greater than both the Asian Development Bank and the World Bank.

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Related:

China starts work on $50 bln Asia infrastructure bankReuters, March 7

 

Mongolia shares democratic experiences with visiting Myanmar journalists

April 1 (UB Post) Twenty journalists of prestigious Burmese news agencies are attending a five-day workshop in Ulaanbaatar to learn how Mongolia adopted democracy and its experiences that led to it. The event is hosted by EBI Think Tank Institute of Mongolia and initiated by the Office of the President.

The first President of Mongolia P.Ochirbat delivered a lecture titled "New Democratic Constitutions, Free Election" and exchanged thoughts with the Burmese journalists.

Mongolian delegates also lectured on the Mineral Resource Law, privatization, free market economy and monetary policies.

Through their lectures, State General Prosecutor D.Dorligjav and Chairman of the Office of Ulaanbaatar City Governor Yo.Gerelchuluun highlighted how Mongolia, a communist country with a state controlled economy, where all properties belonged to the state, transferred to the free market economy, how bank structures were transformed, and how free trade became available in 1990s.

Burmese journalists agreed that Myanmar citizens are currently able to run shops, privatize lands and have rights to initiate companies and freely travel abroad which differs from Mongolia in the 1990s.

The journalists were most interested in knowing about how Mongolia shifted their political, economic and social structures in a short period of time during the 1990s.

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Mongolia Trains Burmese Journalists

Ulaanbaatar, April 1 (MONTSAME) A training for Burmese journalists launched Monday in Ulaanbaatar.

The initiated by the Mongolia President's Office training is being run by the EBI Think-Tank institute, attracting 20 journalists from the biggest media organizations of Myanmar.

Within the five-day action, the participants are learning Mongolian experiences in democracy, for instance, a political situation during the transition period, social and economic situation, first democratic and free election, adoption of the first democratic Constitution, privatization, mining sector, legal reform, monetary and financial policies, health and education system and a press freedom. They are also exchanging views on these matters.

A head of the Presidential Office P.Tsagaan addressed the Burmese media, followed by the first president of Mongolia P.Ochirbat.

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JETRO and MNCCI to Collaborate on Accelerating Free Trade Agreement between Japan and Mongolia

March 31 (infomongolia.com) On March 31, 2014, Chairman of Mongolian National Chamber of Commerce and Industry (MNCCI), Parliamentarian S.Demberel received in his office in Ulaanbaatar the newly appointed Japan External Trade Organization (JETRO) country officer in Bejing Mr. Yoshihisa Tawata.

During the meeting, parties discussed the partnership expanding issued and negotiated to collaborate in the following spheres:

-       In the frameworks of accelerating the intergovernmental agreement of free trade between the Japan and Mongolia, JETRO and MNCCI are to conduct a joint training and seminar on studying Japan's and other nations' experience on free trade.

-       JETRO to assist on Product Development Program on selecting appropriate export product.

-       To organize reciprocal joint exhibition.

-       JETRO to support MNCCI organizing partnership development with Hokkaido Prefecture, Japan.

-       MNCCI will release all supporting information in Japanese language from the second quarter of 2014 that would helpful to exchanging information and broadening cooperation between JETRO and MNCCI.

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Social, Environmental and Other

The Most Dangerous Coal Mine In The World: Mongolia's Illegal Nailakh Pits

By Jacopo Dettoni

ULAANBATAAR, Mongolia, April 1 (International Business Times) -- Deep inside the earth, the eyes of blackened miners shimmer under spotlights as they hammer endlessly upon rock, tapping the vein of Mongolia's largest illegal coal mine. The Nalaikh mine, 40 kilometers (25 miles) from the capital, Ulaanbaatar, is both a vision from the past and a rogue operation from the present.

Coal dust streaks the miners' cheeks, their hands, their worn clothes. In many cases, whether they know it or not, their lungs are being ruined by coal and nicotine. They risk their lives every time they go into the pits.

Frequently, theirs is a losing bet. The miners here are part of a booming complex of illegal mining in Mongolia, the seamy underside of an expansion of legal mining. Deadly accidents here take place more frequently than in China, as private operators seek to maximize profits by skimping on safety gear.

The miners crawl in the darkness for hundreds of meters through narrow, rambling passages before reaching the working face, where the new coal is cut. Dug with shovels and picks, the tunnels have few timber supports -- a minimum safety standard in any coal mine, and the walls crumble as carts loaded with coal slide up, pulled from the outside by trucks. The air feels chill and still; only a few in Nalaikh can afford ventilators, another minimum safety standard in coal mining.

Every year, about a dozen miners die here. That's the official figure. In reality, nobody knows how many people are buried in the makeshift pits, as Nalaikh largely lies beyond the authorities' control.

Across Mongolia, the national Mine Rescue Service has recorded 422 peak-season accidents since 2000, with collapses and explosions claiming at least 175 victims. With an average annual production of 700,000 tons, that means one fatality for every 56,000 tons of coal mined, making Nalaikh far deadlier than the infamous Chinese coal mines, where one miner dies for every 2.7 million tons of coal mined.

"But this one is safe," says Ganzorig B., referring to the particular mine shaft he is working with eight fellow miners. Ganrozig, like most Mongolians, omits or abbreviates to the initial his last name. He smiles as he offers his disclaimer, trying to sound reassuring. 

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13th National Report on Human Rights and Freedom in Mongolia Submitted Parliament

Ulaanbaatar, March 31 (MONTSAME) Head of the National Commission for Human Rights (NCHR) J.Byambadorj Monday submitted to M.Enkhbold, a Vice Speaker of parliament the 13th national report on human rights and freedom in Mongolia.

The annual report focuses on making reforms at a policy level with aims to attract attention of the State Great Khural, government, their associated bodies and public organizations to urgent problems on human rights, to stop human rights violations and to improve realization of human rights.

Since its establishment, the NCHR has been presenting the report to parliament. This year's report reflects safety at the construction sector, forced labour, rights of being employed, some matters of women's and children's rights within family violence, and gender equality.

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Medical diagnostic centers open simultaneously in 11 provinces

Ulaanbaatar, April 1 (MONTSAME) Opening of 11 medical centers in 11 provinces ran simultaneously on Tuesday.

While with a working visit to Khentii province, the Prime Minister N.Altankhuyag attended the opening ceremony there and got connected online to other aimags.

The Government spent 50 billion togrog from the PM's package to build up these diagnosis centers.  The diagnosis center in Khentii province has been build up after construction of 148 million togrog and equipment installation of 1.2 billion togrog.

All the 11 centers eliminate a need to travel to the capital city to get medical treatment and diagnosis, highlighted the PM. The equipment installed is made in Japan, S.Korea, France, Italy, China and Brazil to enable advanced precise diagnosis. Health staffers to work in these centers have been involved in relevant trainings.

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Digging for dinosaurs in Mongolia

Fancy joining AG's editor on a week-long dinosaur fossil dig in Mongolia's Gobi Desert?

John Pickrell is the editor of Australian Geographic. He is a science writer, author, nature lover and self-confessed geek. Blogs posts range over Aussie and Southern Hemisphere palaeontology, dinosaurs, megafauna, archaeology, palaeoanthropology and a smattering of other topics.

March 27 (Australian Geographic) THE GOBI DESERT is a vast and remote area covering nearly 1,300sq.km of Mongolia and the Chinese province of Inner Mongolia. It stretches from Siberian wilderness in the north to the Tibetan Plateau in the South. Starkly beautiful and mysterious, it has become one of the world's most important locations for new dinosaur fossils - find more details of how you can come on an incredible adventure to have a role in this new wave of discovery below!

In recent years, many feathered species of dinosaur have been discovered In Mongolia and have helped firm up the evolutionary link between dinosaurs and birds. These include Gigantoraptor (the name almost sounds like a joke, but it's not), a massive, parrot-beaked oviraptorosaur, which was 8m long and 4m tall. Found in the Gobi in 2008, it is one of the largest feathered animals ever likely to have lived.

Much smaller was pigeon-sized Epidexipteryx, found in 2005 in Inner Mongolia. Similar to Gigantoraptor, its feathers were not used for flight: it had a downy covering of fuzz for insulation and four long, ribbon-like feathers that emerged from its tail, and may have been used for display. Epidexipteryx's strangest feature was its incredibly long fingers - its middle finger was half the length of its entire body. It may have used them to skewer grubs in treeholes, as the aye-aye of Madagascar does today.

The Gobi Desert is the source of some much earlier dinosaur fossils - and also the earliest evidence of dinosaur eggs and nesting. During the 1920s, Roy Chapman Andrews of the American Museum of Natural History led four pioneering expeditions into the Gobi, the first of which was one of the largest scientific expeditions ever to leave the United States. These must have been quite a sight, with great trains of camels and early motor cars slowly snaking across the landscape. In this windswept and unforgiving region of Asia they found a great cache of dinosaur bones, with the remains of up to 200 individual animals and the first specimens of Velociraptor and Protoceratops, an early relative of Triceratops.

On 13 July 1923, at a site they'd named Flaming Cliffs, they found a fossil nest of 13 large eggs arranged in a circle. Although dinosaur eggshell had been discovered in France in 1859, it was misidentified, so the discovery was the first widely known evidence of dinosaur eggs.

Not only had the expedition found dinosaurs associated with eggs, but they had also found largely complete specimens of emu-sized dinosaur right on top of the nests themselves. It was initially thought it had been stealing the eggs, and it was named Oviraptor - 'egg thief' or 'egg seizer'. It wasn't until a more recent expedition into the Gobi in 1993 found more oviraptors fanned out across nests, that is was realised they were brooding their own clutches - and perhaps fanning feathered forearms out across them to shade them from sun.

Mongolia really is a fascinating destination when it comes to dinosaur fossils, and if you're keen to see some of the science and the history for yourself, I encourage you to come on a fossil dig with me in August 2014! I am hosting a week-long dig in the Gobi Desert for Australian Geographic readers run with the help of Odyssey Travel.

The trip will run for 16-days including a tour of some of the most significant historical sights in ancient capital Ulaanbaatar. Eight days of it will be spent in the Gobi's Nemegt Basin prospecting for and excavating fossils. The program will be under the leadership of scientists from the Mongolian Academy of Sciences.

The first six readers who book will get a 5 per cent discount off the booking price! Find details of how to book on the Odyssey Travel site. Find a detailed itinerary here (PDF).

John Pickrell is the author of Flying Dinosaurs: How fearsome reptiles became birds due for release in mid 2014. Follow him on Twitter @john_pickrell.

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Mongolia: Taking care of the Taiga

April 1 (DW Global Ideas) Mongolia's species-rich Taiga forests are disappearing rapidly due to climate change and unbridled economic growth. With help from abroad, the country is training young specialists to help save the unique landscape.

Project goal: Sustainable management of ecologically-sensitive areas, training of forestry experts and environment technicians

Size: A total of 1,000 students are to be trained in 3 years

Key species: wild reindeer, snow leopard, musk deer, brown bear, moose and forest sable

Mongolia was once mainly associated with the Taiga, a vast swath of lush coniferous forests that stretches across North America and Eurasia. But, that image now belongs to the past. Mongolia's forest cover has dwindled drastically with 26,000 hectares - the size of 36,000 football fields - disappearing each year. That has led to a major loss of habitat for species such as bears, wolves and reindeer. Climate change is largely to blame with the weather turning increasingly dry and warm. But, the country's galloping economic growth, that has fueled demand for wood, and unregulated mining are also at fault. The drier conditions and overexploitation of resources have turned parts of the Taiga into a barren landscape, stripped of trees and biodiversity. The Mongolian government has reacted to the problems by tightening its environment and forestry laws. But the reforms have largely proved ineffective because of a lack of technical know-how and knowledge. Germany's international development organization, GIZ, is trying to change that. Its experts are helping train young forest officers and environmental technicians. In addition to learning about forest protection guidelines, the training focuses on practical issues - from sustainably managing forests, developing strategies to suppress wildfires to setting up grazing land. A total of 1,000 forest specialists are to be trained to help protect the Taiga landscape in future.

A film by Juri Rescheto

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Mongolia's mining boom raises environment concerns

April 1 (DW Global Ideas) With an abundance of minerals and one of the world's fastest growing economies, Mongolia is a hotspot for mining companies. But, lawmakers are struggling to ensure the environment doesn't pay a heavy price.

It's nearly the size of western Europe, but with less than three million people, Mongolia is the most sparsely populated country in the world. The Central Asian country also sits on a virtual treasure trove worth trillions of dollars. Buried beneath its sprawling landmass of rolling plateaus, lush grasslands, and sand swept deserts lies an abundance of minerals.

It's no surprise then that large-scale mining companies from around the world continue flocking to the oft-dubbed "Saudi Arabia of Central Asia," largely setting up shop in the gold, silver and copper-rich South Gobi region.

The mining giants have given a major boost to its economy: in 2014, Mongolia's GDP is slated to spike by 15.3 percent, the highest growth rate in the world. In 2012, minerals comprised 30 percent of the GDP and more than 80 percent of exports, according to the Mongolia Research Hub of the Centre for Social Responsibility in Mining.

Risks to health and environment

But the mining rush has a downside. Like many developing countries rich in natural resources that have seen investors pour in, Mongolia is reaching a familiar turning point - struggling to ensure that the huge profits generated by the mining industry don't end up causing a real income gulf. There are also fears that unchecked economic growth and mining-related infrastructure projects are posing a risk to its rich environment and biodiversity.

"Recent mining driven economic growth is causing threats to the environment and livelihood of herders," Enkhtuya Oidov, the Mongolia program director of The Nature Conservancy, told Global Ideas. "Land use of mining is not compatible with the Mongolian culture of cherishing the environment and ecology."

In semi-arid areas like South Gobi, the extreme dust generated from poorly planned dirt roads built for mining operations is compromising the health of local people, as well as their herds of horses, goats, sheep, yaks and camels. The creation of these roads, which cart truckloads of minerals to neighboring China and run through areas where many animals graze, also leads to high degradation of pasturelands. 

Furthermore, mining can impact the quantity and quality of surface water and groundwater. It often discharges sediment particles, threatening fish species and the invertebrates that rely on them for food. 

Tightening mining laws

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Global warming forcing Mongolian nomads to change lifestyles

ULAN BATOR, April 2 (The Asahi Shimbun)--Men on horseback chase sheep and goats over the snow-covered land in winter in the Mongolian plains, where temperatures can drop to minus 30 degrees.

The strong wind that blows over the plains takes its toll on man and animals. Taking an even bigger toll on the traditional way of life of the nomads is global warming.

For those living in northern latitudes with harsh winters, global warming might be considered a blessing if it leads to milder weather. However, the experience in recent years of nomads in Mongolia shows that even a rise of a few degrees can have devastating effects not only on the ecosystem, but on an entire society.

About a four-hour drive west from Ulan Bator, a nomad family was struggling to keep its livestock healthy.

Skinny goat kids were covered in cloaks to keep them warm. Rather than allow those young animals out into the snowy plains, they were kept behind with the family.

"I know immediately which ones have weakened," the 45-year-old rancher said.

The family has to be careful until spring comes to ensure that none of their valuable livestock dies.

Ironically, it is not the warmer winters that have hurt nomad families, but climate change in the summer. Such change has led to a weakening of livestock that forms the primary means of livelihood for many nomads.

If sufficient grass does not grow in summer, livestock will be unable to accumulate enough nutrition to sustain them through the country's harsh winter. That has led in recent years to large-scale livestock deaths because the animals are unable to adapt to even minor temperature or snowfall changes during the winter.

The Mongolians refer to such massive deaths as "zud." Global warming increases the risk of zud. In Mongolia, several percent of livestock die on average over the winter. However, if more than 10 percent dies, that constitutes a zud.

The zud of 2010 was particularly severe, as more than 9 million animals out of a total livestock population of 45 million were estimated to have perished.

NOMADS MOVE TO ULAN BATOR

Today, surrounding the more modern architecture of Ulan Bator is a web of yurts, the traditional collapsible Mongolian tent used by nomads.

The large amount of coal that is used for cooking and heating produces columns of black smoke. That is one reason the World Bank has described Mongolia's capital as one of the cities with the worst air pollution in the world, exceeding even the frightening levels found in China.

Of a total Mongolian population of about 2.9 million, about half live in Ulan Bator.

With rapid economic growth in recent years, the population of the capital has increased by several tens of thousands every year, mainly due to people moving in from rural areas. The damage from the zud has been one reason for the push of nomads to the capital.

A 2001 survey found that about 12,000 people moved to Ulan Bator and surrounding areas from around Mongolia due to the effects of the zud of the previous winter.

A 37-year-old rancher lost almost all of his horses and cattle in the 2010 zud. He moved to a community near Ulan Bator from his hometown more than 500 kilometers away. He sold the few animals that still remained and used the money to buy cows. He now raises about 20 cows.

"I want to go back home, but it is more convenient for me economically to remain here," he said.

Experts point to several factors behind the recent increase in zud, including the move toward a market economy since the 1990s and the increase in livestock kept by nomads as they seek to increase their income.

Sarantuya Ganjuur, a researcher at Mongolia's Institute of Meteorology and Hydrology, predicts that the nomadic lifestyle will likely disappear in the future.

LESSENING THE EFFECTS OF GLOBAL WARNING

Mongolia is prone to feel the effects of global warming.

Over the past 70 years, the average temperature has increased by 2.17 degrees, which is about three times the world average.

That has not only led to an increase in droughts, but has also led to melting of permafrost, which covers about 60 percent of Mongolia's land mass.

Masataka Watanabe, a project professor at Tokyo's Keio University who has researched Mongolia's water environment, said that in places, up to five meters of frozen surface soil has already disappeared. That has led to a decrease in water levels in rivers. The budding of plants that depended on frozen surface soil has also been delayed.

In the past, the main cause of zud was the rare appearance of extremely strong cold waves in the winter. However, a report by a joint study group made up of the Mongolian government and United Nations found that the main cause of zud after 2000 has been summer droughts.

The Asian Development Bank released an economic impact report last autumn in which it warned that Mongolia faced the possibility of losing at least one-quarter of its gross domestic product by the end of the 21st century due to global warming.

Because global warming will be difficult to stop, finding ways to lessen the damage has become a global issue.

Such efforts are also now beginning in Mongolia.

Researchers from Keio University and the National University of Mongolia began a project from last summer of transmitting information by e-mail to the mobile phones that many nomads use. Among the information passed on is weather information, as well as the growing condition of the grasslands. While about 1,000 people now receive that information, plans call for expanding the number to more than 20,000 by this summer.

A new project that will begin in the new fiscal year with assistance from the Japanese government is a frozen storage facility for meat that would use natural energy sources.

The animals that die due to zud cannot be consumed. However, if the meat can be preserved before the zud hits and the timing of the shipping of the meat can be controlled, the economic damage could be limited.

Any reduction of greenhouse gas emissions that is due to technological cooperation can be used by Japan as its reduction amount through a bilateral credit exchange system.

Watanabe is also involved in that project.

"By reducing the emissions of carbon dioxide, we will also work toward restraining damage from global warming," he said. "We want to verify this process so that it can become a global model."

If the quality of the meat from the livestock can be improved, there would be no need to aggressively increase the number of animals being raised. That would lead to limiting the number of animals to match the natural environment.

Chuluun Togtokh, a science adviser to Mongolia's environment minister, holds expectations for assistance that Japan can provide. He said an important measure to deal with global warming would be diversifying sources of income by heightening the added value of the livestock.

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Prague zoo to send more Przewalski's horses to Mongolia

Military helps out with plane that will fly directly to the Gobi Desert

Prague, March 31 (ČTK) — The Prague zoo plans to transfer four more Przewalski's horses to Mongolia, their country of origin, in June and release them to the wild, the zoo's director, Miroslav Bobek, told journalists today.

The zoo, which focuses on breeding the dramatically endangered Przewalski's horse, has released a total of 12 of them in Mongolia since 2011. 

The institutions assisting in the project are the Czech Environment Ministry and the military, which provides its transport planes.

Mongolia's Environment and Green Development Minister Sanjaasürengiin Oyuun, a graduate of Prague's Charles University, expressed her appreciation at a joint press conference with Bobek in the Czech Capital.

The four horses to be flown to Mongolia in June have been chosen from a Czech center to which they were brought from several European zoos.

The military plane will land directly in the Gobi Desert, outside regular airports, so that the horses need not undergo a many-hour journey to the acclimatization enclosure.

"The transfer will cost between 1.2 million and 1.4 million Kč," Bobek said.

The zoo is gathering the money in a public fund raising campaign, from sponsors and partly from its revenues from the sale of entrance tickets, he said.

The Prague zoo is one of the main organizers of the transfers of the Przewalski's horse, which was killed out in the wild 40 years ago, back to its original homeland.

The transfers from Western Europe started in the 1990s and more than a hundred horses have returned to Mongolia since.

At present, about 1,900 Przewalski's horses live all over the world, including some 300 heads in two national parks in Mongolia.

Bobek said the horses returned to the wild are doing well and they have reproduced.

He said the project includes support to the local Mongolian population such as the reconstruction of a hospital, creation of new jobs, removal of environmental burden, handling of wastes and securing of drinking water sources.

The Prague zoo started breeding the Przewalski's horse in 1932. It has kept the international pedigree book of this species since 1959.

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Indiegogo: Protect the endangered Mongolian khulan and its habitat

Nomadic conservation training and education and research activities to protect the endangered Mongolian khulan and its habitat in the southeast Gobi, Mongolia.

The Mongolian Khulan / Mongolian wild donkey

The Mongolian Khulan - also known as Mongolian Wild Donkey (Equus hemionus hemionus) – is anendangered Asiatic wild Equid which is still less known that the Przewalski's horse. 

The Mongolian Khulan is one the 5 recognized sub-species of the Asiatic Wild Donkey and represents the largest population of this species in the world (80% of the species). Its population is now mainly concentrated in south of Mongolia (Gobi Desert) with small populations in north of China (Xinjiang province and Inner Mongolia). 

Mongolia represents a very important place for the conservation of the whole species.

The population of the Mongolian Khulan has known an important decrease of about 50% since the end of the 1990's.

The population of the Mongolian khulan was estimated in 2003 at about 18,000 in four areas of the Gobi Desert.

The Mongolian Khulan is listed as Endangered in the IUCN Red List and in the Mongolian red list of Mammals.

And is listed in Appendix I of the CITES (Convention on International Trade in Endangered Species of Wild Fauna and Flora) and in Appendix II of the CMS (Convention on Migratory Species).

The Gobi Desert 

The ecosystem of the Gobi is very specific and also vulnerable but very few actions have been conducted until now to conserve it, especially in the south-eastern part of the Gobi Desert of Mongolia. 

Why is the Mongolian Khulan endangered ? 

Main threats affecting the survival of the Mongolian Khulan are:

a)    Habitat diminution and fragmentation,

b)    Illegal hunting and trade for its meat and skin (some organs seem to be also used in traditional medicine),

c)    Competition with domestic livestock to access to natural resources (water and pastures) that are limited in the Gobi Desert,

d)    Lack of knowledge by herders about this species ecology, 

e)    possible impact of climate change. 

Link to campaign

 

Erchim FC Draws Nepal, Cambodia Champions in 2014 AFC President's Cup Group Stage

April 1 (infomongolia.com) On March 28, 2014, the Official Draw for AFC President's Cup 2014 was held at AFC House in Kuala Lumpur, Malaysia, where 11 FCs will be competing for the consecutive 10th championship.

Organizers earlier in November 2013 officially announced that this championship will be the last event in its series and from next year the top six FCs of 2014 AFC President's Cup will be playing in the 2015 AFC Cup play-offs.

According to 2014 Official Draw, 11 FCs were divided in three Groups, whereas:

A Group - Sri Lanka Air Force (Sri Lanka), KRL FC (Pakistan), Sheikh Russel (Bangladesh) and Ugyen Academy (Bhutan);

B Group - Ceres FC (Philippines), HTTU Asgabat (International Turkmen-Turkish University), Tatung FC (Taiwan, PR of China) and Rimyongsu (North Korea);

C Group - Erchim FC (Mongolia), Manang Marshyangdi Club (Nepal) and Svay Rieng FC (Cambodia);

The 2014 AFC President's Cup will be commencing on May 01 until May 11, where each Group will play on a single roundrobin basis and the C Group matches will be held in Ulaanbaatar, Mongolia, which is marked the first and last event in Mongolian football history. The winners and runners-up of each group are to advance to the final stage to take place on September 22-28, 2014.

Mongolia's "Erchim" FC, the champion of the national 2011, 2012, 2013 "Super Cup", champion of 1996, 1998, 2000, 2002, 2007, 2008, 2012, 2013 "Niislel" National League (Premier League) football tournaments, has been participating in the AFC President's Cup since 2012.

In 2012 AFC President's Cup, Erchim FC played in A Group along with Taiwan and Pakistan teams, but could not qualify for next final stage with only one points, where Istiqlol Dushanbe FC (Tajikistan) become winner of the 2012 edition.

In 2013 AFC President's Cup, Erchim FC also was drawn in A Group with Three Star Club (Nepal), Taiwan Power Company (Taiwan, PR of China) and Abahani Limited Dhaka (Bangladesh) teams. In this edition, Erchim qualified for final stage, but lost to Balkan FC (Turkmenistan) by 0:4, where the latter team becomes champion of the 2013 AFC President's Cup.

Link to article

 

Pope Francis to move into a Mongolian yurt in Vatican Gardens to advocate for a poorer Church

April 1 (The Tablet) Pope Francis is to move into a yurt in the Vatican Gardens, the Holy See announced this morning.

He is due to make the move from his home in the Domus Sanctae Marthae guesthouse, where he has been living since his election last year, after Holy Week.

The move follows his repeated calls for a poorer Church that serves the poor. Speaking in Assisi last October he urged the Church to divest itself of "worldliness".

"Worldliness is a murderer because it kills souls, kills people, kills the Church. Without divesting ourselves, we would become pastry-shop Christians, like beautiful cakes and sweet things but not real Christians," he said.

The yurt, which was crafted by Consolata missionary nuns in Mongolia, is made out of cattail and bulrush reeds, Indian hemp and wormseed plant inner fibres, and is 20 feet wide and 11 foot long. Sources said it would have electricity, but internet access was more difficult to guarantee. (Mogi: ooooo, he should've asked Mongolia for one)

A spokesman for the Holy See said that the large, pyramid-shaped tent was completely weather-proof and "the same size the Mongolians generally use for their families", but added that the Pope would continue to use the Vatican's Apostolic Palace to receive visiting diplomats and other guests.

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