CPS International is a marketing arm of CPS Securities in Mongolia. CPS Securities is a Perth, Western Australia based AFSL License Holder. To trade ASX and international stocks, feel free to contact me at mogi@cpsinternational.mn or +976-99996779.
Bids for Tavantolgoi submitted
September 21 (news.mn) The deadline for companies submitting their bids to operate the Tavantolgoi deposit expired at 4 pm today. The names of the bidders have not been revealed yet, and a preliminary selection will be announced on September 24. The second stage of the final choice will begin thereafter. The application fee for the first stage was fixed at USD8,000.
Among the conditions listed are experience, reputation, last three years' audited accounts etc. Many domestic companies are expected to submit a bid, in competition with foreign big names. The tender document makes no mention of sharing the deposit among national and foreign companies.
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The names of applicants for the position of Executive Director of Erdenes Tavantolgoi, formed as the daughter company of Erdenes MGL, which manages all the strategic mines in Mongolia, will be announced at 17.30 today (Mogi: no such announcement was to be found as of midnight). The advertisement called for a person with at least 15 years' international experience and reputation, and it is believed there are more than 10 applications, equally divided between Mongolians and foreigners. Evaluating their claims and direct talks will take time, and the final choice will not be before October.
Khan Mongolia Court Decision Not Disputed by Nuclear Energy Agency
TORONTO, ONTARIO--(Marketwire - Sept. 21, 2010) - Khan Resources Inc. (TSX:KRI) ("Khan" or the "Company") announced today that the dispute period for the August 2, 2010 decision by the Mongolian Capital City Administrative Court in favour of Khan's subsidiary, Khan Resources LLC ("Khan Mongolia") has now expired. The August 2, 2010 court ruling declared that the Mongolia Nuclear Energy Agency's (NEA) decision to invalidate Khan Mongolia's exploration license covering part of the Dornod uranium property was illegal and invalid.
The Company noted that the NEA, by contrast, had elected on August 9, 2010 to appeal the court's decision on July 19, 2010 in favour of Khan's 58% owned joint venture subsidiary Central Asian Uranium Company LLC ("CAUC"). The July 19, 2010 court ruling also declared that the NEA's decision to invalidate CAUC's mining license covering the remaining part of the Dornod uranium property was illegal and invalid. This appeal is expected to be heard in late September.
Grant Edey, President and CEO of Khan, said "the decision by the NEA not to appeal the Khan Mongolia court ruling was unexpected, but we are encouraged that they have chosen not to challenge the decision. We hope that the NEA will now also choose not to pursue the CAUC appeal and that we can resolve our dispute on the Dornod mining and exploration licenses cooperatively".
Khan intends to continue to defend its rights and interests in Mongolia. In addition to challenging NEA's appeal of the CAUC court ruling, Khan has filed with the Ontario Superior Court of Justice a $300 million lawsuit against Atomredmetzoloto JSC ("ARMZ") and its affiliate JSC Priargunsky Industry Mining and Chemical Union for damages suffered by Khan due to ARMZ's continuing efforts to secure Khan's rights to the Dornod uranium project.
(Mogi: KRI up by as much as 4c to 35c in opening hours today in Toronto. Link to chart)
LONDON STOCK EXCHANGE TO ARRANGE CONFERENCE HERE
September 21, Ulaanbaatar, Mongolia, /MONTSAME/ The London Stock Exchange (LSE) will organize the 2nd Conference of Mongolian Capital Market September 29 in Ulaanbaatar.
Main purpose of the conference is to widen the connections among domestic companies, Mongolia's government and investors and London-based advisors.
The upcoming conference will raise issues such as environment for investment in Mongolia, future of trade at Mongolia's Stock Exchange (MSE), corporate governance and strategies of capital market.
Mongolian companies will get acquainted with reasons of and opportunities to sell their stocks at domestic and foreign markets. Reports will be delivered by representatives of Mongolia's Government and the MSE, authorities of the LSE, investment banks, investors and advisors as well.
Mongolia sees LSE front-runner for stock exchange
* Mongolia to choose stock exchange operator in October
* Tavan Tolgoi mine operating license given in October
* Studying establishment of budget stabilization fund
* 2010 GDP to be in 7 to 8 percent growth range (Adds details, comment, background, byline)
By Daniel Bases
NEW YORK, Sept 20 (Reuters) - Mongolian Prime Minister Sukhbaatariin Batbold said on Monday the London Stock Exchange is the front-runner in a bid to manage a new local stock exchange, expected to be up and running by year-end.
"London is the front-runner" to run this exchange, building it up from scratch," Batbold told reporters on the sidelines of the United Nations General Assembly meeting.
Mongolia is trying to make the most of its natural resource wealth. It is one of the last places on earth with huge untapped mining resources for coal, copper, gold and uranium.
The government's international tender offer for a management contract for a new stock exchange drew 12 bidders, with the field now narrowed to four.
Batbold said the four are the London Stock Exchange, NASDAQ OMX, Deutsche Borse, and the Korean Stock Exchange.
The idea is to have established companies with listings elsewhere add a dual listing on the Mongolian exchange.
"First, what we would ask from them is to have a dual listing on the Mongolian stock exchange from those already listed companies," he said.
"Secondly, there will be (large) state-owned enterprises through the privatization program. So we will have a quite serious change in our privatization concept so that state-owned enterprises, especially the large ones, will go through IPO on the Mongolian stock exchange and possibly in combination with international stock exchanges," Batbold said.
Even as the global financial crisis has wrought havoc on developed economies and put a crimp in generally robust emerging markets, economic growth will remain strong, Batbold said, albeit down from the almost 10 percent per year average growth of the last decade.
"Despite the financial crisis and difficulties we face in different industries, especially the livestock and others because of the harsh winters, still we have 7-8 percent growth of GDP this year. That is quite promising, I think for Mongolia," he said.
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Mongolia Plans to Seek Tavan Tolgoi IPO, Keep Control
Sept. 20 (Bloomberg) -- Mongolia will seek an initial public offering for its Tavan Tolgoi mining assets after this year's opening of a national stock exchange, with the government retaining control, Prime Minister Sukhbaatar Batbold said.
The country will sell as much as a 50 percent stake in the coal deposit to the public, Batbold said in a briefing in New York today. Mongolia will pick a contractor for the project in the next month, he said.
China, the world's biggest steelmaking nation, last year increased imports of coking coal fivefold to a record as the government closed unsafe mines. Mongolian Mining Corp. and Winsway Coking Coal Holdings Ltd., both of which operate in Mongolia, are seeking to raise as much as HK$9.74 billion ($1.3 billion) in Hong Kong initial public offerings to fund expansion, according to term sheets sent to investors.
London Stock Exchange Group Plc is the "frontrunner" to be the partner of Mongolia's exchange and hold "management rights," Batbold said today. The country aims to open the exchange this year, he said.
Batbold said he hopes publicly traded companies with "strategic" assets in Mongolia, like Rio Tinto Plc., will seek listings, and the country may seek to require them to do so.
Coal in focus as more IPOs hit the Hong Kong market
Coal producer Mongolian Mining seeks to raise up to $680 million, while logistics provider Winsway Coking Coal aims for $574 million.
September 21 (Finance Asia) Investors interested in coal could take their pick yesterday when two companies focusing on coal mining in Mongolia kicked off their marketing to institutional investors. Both companies are looking to list in Hong Kong in the second week of October.
The largest of the two is Mongolian Mining Corp (MMC), a coking coal producer with a large open-pit mine in the Tavan Tolgoi region, which ranks as the world's largest coking coal deposit. The company is aiming to raise between HK$4.53 billion and HK$5.28 billion ($583 million to $680 million), or as much as $780 million if a 15% greenshoe is also allocated in full.
The second issuer is Winsway Coking Coal, which isn't actually a coal producer, but a logistics provider focusing on the coking coal industry. It provides transportation by rail and truck to the end-users of the coal, helps facilitate the border crossing into China and provides washing and blending services – a business that has significantly wider operating margins than the production of the coal itself. It is seeking to raise between HK$3.22 billion and HK$4.46 billion ($414 million to $574 million), or up to $660 million including the 15% greenshoe.
Winsway has a strong position in the cross border trade of coking coal and accounted for 55.5% of all Mongolian coal imported into China in 2009. It has a customer base of more than 60 steel makers and coke plants in China.
While the two companies are operating in different parts of the production chain, they are closely linked since MMC currently sells a large portion of its coal through Winsway as it does not have its own washing facilities. However, MMC is in the process of constructing a washing plant, which is scheduled to come online by March 2011, and next year it expects to sell only washed coal directly to the steel mills on the Chinese side of the border.
By cutting out the middle man, MMC estimates that it will be able to raise its selling price from around $78 per tonne that it receives for its unwashed coal on the Mongolian side of the border today to about $150 per tonne. Of course, there will be higher costs associated with the washing (about $4 to $5 per tonne), although the company is telling prospective investors that this will be at least partly offset by cost savings it will make by improving its transportation network.
By cutting out the middle man, MMC estimates that it will be able to raise its selling price from around $78 per tonne that it receives for its unwashed coal on the Mongolian side of the border today to about $150 per tonne. Of course, there will be higher costs associated with the washing (about $4 to $5 per tonne), although the company is telling prospective investors that this will be at least partly offset by cost savings it will make by improving its transportation network.
The company is currently building an asphalt road next to its existing gravel road to the border. The road is due to be mostly finished by the end of this year and will be accompanied by a railroad in 2011-2012, subject to final approval by the government, which will further enhance transportation efficiency.
Winsway is not convinced that MMC will succeed in completely eliminating its washing services, however, and notes that a coal washing plant in Mongolia faces issues such as the fact that the water freezes for a large part of the year. Winsway's washing plants are all located in China, in warmer climates and close to the end customers, which means it can also sell or use the bi-product from the wash to blend with the washed coal to reduce the final cost for the steel producer – something which is harder to do if you need to transport this by-product hundreds of kilometres. MMC argues that there are coking coal washing plants in Canada that operate in a similar climate without a problem, and notes that the project is accompanied by a detailed feasibility study which suggests there is enough water available to operate a plant with a capacity of up to 10 million tonnes.
Because both companies are in the market at the same time, however, investors don't necessarily have to make a bet on which one is right -- whether MMC will be able to grow its margin and whether Winsway will be able to protect its businesses and margins. Rather, they can buy both, using one as a hedge against the other, the idea being that the overlapping business between the two companies is a zero sum game.
Both MMC and Winsway also have a strong backing both domestically and internationally already, which should make investors more comfortable about investing in these deals. MMC is controlled by the MCS Group, a Mongolian conglomerate that is the largest tax payer in the country and a market leader in numerous businesses. Its standing in the domestic economy was evident by the fact that the Mongolian finance minister attended the investor lunch presentation in Hong Kong yesterday. The group is currently constructing a Shangri-La hotel in Ulaanbaatar together with Hong Kong's Kerry Group and is in partnership with Coca Cola for a Coke bottling plant. Following the IPO, MCS's shareholding will fall to 45.3% from 57%.
The Kerry group, through Kerry Holdings, has also made a direct investment into MMC and will hold 8.3% of the company post listing. Another 3.2% will be owned by the European Bank for Reconstruction and Development (EBRD), which in May this year also provided a $180 million secured loan to the company.
Meanwhile, Winsway got an injection of international money in April 2010 when Hopu, a China-focused private equity fund run by former Goldman Sachs investment bankers Fang Fenglei and Richard Ong; China Minmetals, a state-owned Chinese trader and producer of metals and minerals; Hong Kong-based investment company Silver Grant; and Japanese trading company Itochu all took a stake in the company. Hopu, which is the largest among these investors, holds about 13% of the company before the IPO, but will sell part of that if the greenshoe is exercised.
Jay Hambro, the chief investment officer of London-listed mining group Petropavlovsk and the son of Petropavlovsk's founding chairman Peter Hambro, has a seat on Winsway's board. Jay Hambro is also chairman of IRC Limited, an iron ore mining company located in Russia, just across the border from China, which is in the process of being spun off from Petropavlovsk for a separate listing in Hong Kong.
Industry-wise both MMC and Winsway are faced with the expectation of a slowdown in the growth of steel production in China. Although with the demand for steel expected to continue to rise in absolute terms, this really shouldn't be an issue for some years yet. One source also noted that if China continues to clamp down on inefficient and non-environmentally friendly steel plants, the Australian coal producers may well redirect their exports to India, where demand for coal is also on the rise, leaving the Mongolia-based coal companies to take advantage of their lower transportation costs for feeding coal into China.
In fact, the greater challenge to these two listing candidates could turn out to be the numerous other IPOs that are currently in the market and are vying for investor attention. Another challenge may be to convince investors to look beyond the poor performance of SouthGobi Energy Resources, a Canadian company with coal mining operations in Mongolia that obtained a dual listing in Hong Kong in January this year. SouthGobi has struggled to meet the projections it laid out at the time of the Hong Kong share offer and its share price is currently trading 40% below its listing price.
MMC is banking on the significant ramp-up of its production capacity in coming years to convince investors of its growth potential. From a planned production of 3.8 million tonnes this year, the company is in the process of upgrading its capacity to about 7 million tonnes next year, 10 million tonnes in 2011 and 15 million tonnes by 2015. Clearly there is a lot of execution risk here, but the management has a track record of beating its own targets and, as a result, MMC has attracted a lot of initial interest.
The company is offering 20% of its enlarged share capital in the form of 719.4 million shares, of which 83% are new and 17% secondary. The price range has been set at HK$6.29 to HK$7.34, which translates to a 2011 price-to-earnings ratio of 11.6 to 13.6 times.
The deal, which is being arranged by Citi and J.P. Morgan, is due to price on October 4 (US time) and the trading debut is scheduled for October 13.
Meanwhile, Winsway is offering 25% of its share capital, or 990 million new shares. The 15% greenshoe will be made up entirely of secondary paper. The price range has been set at HK$3.25 to HK$4.50, which equals a 2011 P/E ratio of eight to 11 times.
The final price will be determined after the US market closes on September 29 and the trading debut will take place on October 11. Deutsche Bank, Goldman Sachs and Bank of America Merrill Lynch are joint bookrunners with the first two also acting as joint global coordinators.
Petro Matad Operational Update
September 21 (Petro Matad) Petro Matad (AIM:MATD) is pleased to provide an update on its exploration activities in Mongolia.
Drilling of DT-2
The drilling of Petro Matad's Davsan Tolgoi-2 well ("DT-2") is still in progress. Operations are progressing normally after delays due to mechanical problems, which have been resolved.
Currently the well is at the intermediate casing point, matching the pre-drilling prognosis, of 1,091.5 metres below surface. The intermediate section will now be logged, cased and cemented before proceeding with the remainder of the well. A further announcement will be made when the Company has reached target depth and when initial findings are known.
Analysis of 2D seismic and laboratory test results from samples taken at DT-1
As previously announced, samples from Petro Matad's DT-1 well were forwarded to Weatherford International's laboratories in the United States for reservoir and oil characterisation. This work is still ongoing and results are expected to be announced in the next 3 to 4 weeks.
Blocks IV and V geophysical surveys
The 345kms of 2D seismic survey on the Company's Blocks IV and V was completed on 17 September 2010. The data from the seismic acquisition has been forwarded for processing in the US after which it will undergo interpretation by Petro Matad's technical team. The infill gravity survey is ongoing.
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(Mogi: MATD down 7.18% today, likely due to profit-taking after having hit an all-time high of 190p yesterday. Link to chart)
NAR Successfully Starts Trial Production at Khar Yamaat Alluvial Gold Mines in Mongolia
Hong Kong, Sept 20, 2010 (ACN Newswire via COMTEX) -- North Asia Resources Holdings Limited ("NAR" or the "Company") today announced that its alluvial gold mine located at Khar Yamaat, Mongolia has successfully started trial production. It has recovered approximately 1,200 grams (equivalent to approximately 32.15 troy ounces) of raw alluvial gold since early September 2010.
The Company has removed approximately 640,000 cubic meters of top soil, reaching an average depth of approximately 20 meters. Since early September 2010, the Company has recovered approximately 1,200 grams (equivalent to approximately 32.15 troy ounces) of raw alluvial gold and the trial production will continue till the end of October 2010.
In late April 2010, NAR completed the acquisition of the entire equity interests in Dadizi Yuan LLC ("Dadi") through an indirect wholly-owned subsidiary, Dadi holds the mining and exploration licences for two alluvial gold mines in Mongolia, which have a total mining area of approximately 2,003 hectares (representing approximately 20.03 square kilometers), with measured gold reserves of 324.7 kilograms (1 tonne = 1,000 kilograms). It is estimated that the gold reserves of the two mines will be no less than 3 tonnes.
Mr. Chan Kwan Hung, CEO of NAR, said, "The first recovery of approximately 1,200 grams of raw alluvial gold is a significant achievement for the Company, especially when gold prices are currently high. Our processing facilities at Khar Yamaat are operational, and the Company aims to expand the mining faces by spring 2011. With the amount of material yet to be mined, we expect the mine will generate cash flow to support our future growth."
(Mogi: NAR up 1c to HK$1.43 today. Link to chart)
MERITUS DRILLS 28.6 METERS OF 8.78 GRAMS OF GOLD PER TONNE AT GUTAIN DAVAA, MONGOLIA (AUDIO ENHANCED)
Sep 20, 2010 (TheNewswire.ca via COMTEX) -- (via Thenewswire.ca)
September 20, 2010 - Vancouver, B.C. Meritus Minerals Ltd. (TSX-V.MER) Meritus Minerals Ltd. has obtained very encouraging assay results from the first three holes in the 3,000m diamond drill program on the Tordogiin Shil Prospect on its Gutain Davaa Project in Mongolia.
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All three holes encountered substantial widths of strong gold mineralization. Hole #TSDD 002 intersected 23.41 g Au/t over 8.80m including 62.82 g Au/t over 3.00m within a larger gold-bearing interval that averaged 8.78 g Au/t over 28.60 meters.
The other two diamond drill holes returned intersects of 8.05 g Au/t over 10.70m and 4.39 g Au/t over 7.30 meters. All reported intersects, tabulated below, and are near surface.
GOLD ASSAYS FROM DIAMOND DRILLING OF TORDOGIIN SHIL PROSPECT AT GUTAIN DAVAA
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(Mogi: MER closed up 2.5c to 25c during overnight trading yesterday in Toronto. MER opened at 29c today. Link to chart)
Outstanding loans rise
September 21 (news.mn) Mongol Bank reports that money supply (broad money or M2) at the end of August expanded to MNT 3656.1 billion, showing a 3.2 percent rise against the end of July, and a 42.6 percent rise against August, 2009.
Loans outstanding at the end of August amounted to 1.6 percent more than at the end of July and 16.7 percent more than at the end of August, 2009. Principals in arrears decreased 22.1 percent against the end of July, and 50.4 percent against the end of August, 2009.
The total amount of non-performing loans at the end of August was 1.0 percent less than at the end of July, but 15.5 percent more than at the end of August last year.
Puget Ventures Inc. and Imperial Mining Holding Ltd. to Form a Significant International Cobalt Exploration Company (with Gold, Silver, Copper-Moly assets in Mongolia)
VANCOUVER, BRITISH COLUMBIA--(Marketwire - Sept. 20, 2010) - Puget Ventures Inc. (TSX VENTURE:PVS) ("Puget Ventures") of Vancouver and Imperial Mining Holding Ltd. ("IMHL"), a private company with mineral projects in Russia and Mongolia, announced, effective today, that they have signed an Indicative Offer, to form a multinational cobalt exploration company with cobalt assets in Russia and Canada and other mineral assets in Mongolia.
Concurrent with this all-stock transaction, Puget Ventures intends to seek shareholder approval to change its name to Global Cobalt Corporation ("Global Cobalt") (www.globalcobaltcorp.com).Macquarie Private Wealth Inc., subject to completion of satisfactory due diligence, has agreed to act as sponsor in connection with this transaction. Additionally, concurrent with closing of the IMHL transaction, Puget Ventures (www.pugetventures.com) intends to undertake a significant financing to fund development operations in Russia.
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Puget Ventures' existing Werner Lake Belt properties will continue to be held and developed through Global Cobalt and will represent the Canadian cobalt operations division. In addition, three Mongolian licenses, with gold, silver and copper-molybdenum mineralization currently held by IMHL will transfer to Puget Ventures in this transaction, along with a Right of First Refusal on three other projects in the close vicinity to the Russian property.
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Taiwan, Mongolia in charter flight talks: MOFA
Taipei, Sept. 21 (CNA) Taiwan and Mongolia are contemplating setting up direct charter flights to promote bilateral tourism and trade relations, a Ministry of Foreign Affairs (MOFA) official said Tuesday.
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Mongolia rebuilds from the ground up (Interview with Mr. Zorigt)
ZORIGT Dashdorj's office sits in the middle of a building site close to the centre of Mongolia's dusty capital, Ulaanbaatar.
September 21 (The Australian) Visitors have to pick their way carefully through rubble and piles of cement as they climb the two floors to meet the country's youthful and engaging Minister for Mining and Energy.
The building where Zorigt (all Mongolians go by their first names) is being ripped apart inside and put back together. An apt metaphor for the country, in the midst of a remarkable economic overhaul due to the emerging exploitation of its vast mineral wealth, and the work it will take to lift its whole population into a better life. In the 76-person parliament dominated by a coalition of the country's two main parties the Mongolian People's Revolutionary Party and the Mongolian Democratic Party, almost everyone seems to have some sort of title. But the former senior public servant, who is with the MPRP, with his responsibility for driving the industry that will soon make up 95 per cent of the country's exports is one of the handful of key decision makers that could help the foundation of prosperity for generations. With proper industrialisation the Mongolian government has estimated its GDP could grow elevenfold to $US41 billion by 2020.
Last week, Rio Tinto signalled its clear intentions to be a major player in Asia's resource boom-country when it upped its stake in Canada's Ivanhoe Resources, the acknowledged Western mining pioneer in China, a huge fillip for Zorigt. "CVRD (Brazil's Vale) are engaged in ever significant exploration work here, Rio Tinto has a $US5bn project (the massive Oyu Tolgoi copper mine). So the rest of the guys if they want to come, I think they should," Zorigt tells The Australian.
"The more we have large mining players in this town the better to help us grow into a significant mining country."
But the model to attract the world's largest miners, who will have the capital resources to invest in the 15 deposits designated as nationally significant, is still being developed and tested by the government.
Zorigt says deposits whose exploration was done by the government will remain 50 per cent in government hands, with a 34 per cent stake in the others. It was Zorigt who set up the government's holding company Erdenes MGL (it means treasure in Mongolian), which will hold the government stakes in its major mining deposits.
He was then tapped for a cabinet position (Mongolia allows a mixture of politicians and external experts in its executive) and last year entered parliament in a by-election.
The looming test will be the Tavan Tolgoi deposit, which holds 6 billion tons of coal. It has been split on to five different concessions, or blocks, and the government is working on plan for the first two.
"The first one will be 50 per cent owned by the government, 10 per cent floated on the local market for retail investors, 10 per cent available for domestic companies and 30 per cent floated on international markets," Zorigt says.
He now says he does not expect one large miner to snap up the 30 per cent, as was originally mooted.
The second block with be 100 per cent-owned by the government but be licensed to a single mining group that will then pay a fee to the government for mining rights. But details for this remain sketchy and, if past form is any guide, could well be changed before being finalised.
"We have plenty of interest and we are talking to lots of people," he says. But Zorigt says he is keen to finish the process on the first block first. Contract tenders are due in the first week of October with Leighton a possible bidder.
While Rio is putting its money where its mouth is, uncertainty and the heavy hand of an inexperienced government has seen others stay away.
BHP, for instance, has shut up shop and critics point to a lack of services infrastructure starting with access.
The only offshore destinations that are directly connected by air are Seoul, Beijing and Moscow. During Mongolia's dramatically inhospitable winters, Ulaanbaatar -- blanketed in snow for six months, with temperatures regularly reaching minus 40C -- is hardly the place for miners to grab a week or two of rest and recreation. Mongolian Airlines has had Hong Kong, where many of the country's nascent mining groups are stockmarket-listed, on its schedule for some months, but so far has not started flying the route.
On the ground, there are no top-tier international law firms or investment banks and only PricewaterhouseCoopers of the big four accounting firms has an office, and that is less than a month old. This forces mining executives to shuttle between Mongolia and either Beijing/Hong Kong or Korea.
As well, there are the more fundamental infrastructure problems with water, power and transport.
"It's a growth problem," Zorigt says. "In 2000, our GDP per capital was maybe $US400-$US500. Now it is over $US2000.
"If you look at the government budget, I remember when it used to be a bit over $US200 million. Now are talking well over $US2bn ($2.1bn)."
That is half the size, by the way, of Australia's total foreign aid budget. Zorigt, an economist and lawyer who was educated in Moscow, Japan and at the Australian National University, says 27 per cent of people are living under the poverty line, but that the figure is decreasing.
But there are plenty of local people, including those living in humble yurts on the edge of town who spoke to The Australian, who are concerned that the government is frittering away the economic benefits of the mining boom by handing out money instead of spending it on much-needed roads, hospitals and schools.
The last election in Mongolia turned into a populist, vote-buying auction where the main political parties offered a major handout totalling 1.5 million tugriks ($1260) to each Mongolian. A series of well-attended street marches were held to protest against the delay in the payments.
The first part was delivered in a single handout of 70,000 ($US55) to each Mongolian, but the government has now opted for monthly payments.
"During the downturn, the government was struggling to get people to spend," Zorigt says. "During times like this, I think it is economically justifiable. Secondly, in Mongolia given the impact that winter has on herding people (Zorigt's grandfather was herder all his life) they want some better security during this time. These people need cash in their hands.
"These people are actually planning their budgets on this 10,000 tugriks they will get in September."
But the real reason appears to be rooted in politics. "If you believe in democracy, and both parties were elected on that platform (of handouts), in order to keep the faith of people you have to keep your election promises," Zorigt says.
"We are only a young democracy (communism fell in 1990) and can't afford to have politicians and parties breaking promises."
But Zorigt says the government has ambitious plans to solve the infrastructure problems.
In February, Mongolia's parliament adopted a landmark Concession Law that will allow private companies to investment in infrastructure by way of public private partnerships.
"This is going to be an extremely important law," Zorigt says. "Before this we didn't have that legal framework."
And in recent weeks the government has just approved a list of more that 100 projects so private investors can pour money into railways, roads, power and housing projects.
"Private companies can come in and operate them and get their money back. This law and this list are probably going to be the solution to our problem; so far we have struggled to make the public investment in infrastructure," Zorigt says. "This is very serious bet on the future."
Abu Dhabi signs Saker Falcon conservation agreement with Mongolian government
The Environment Agency Abu Dhabi (EAD) signed a Memorandum of Understanding (MoU) with the Ministry of Nature, Environment and Tourism Mongolia (MNET) at EAD offices in Abu Dhabi. The five year agreement aims to increase the productivity of wild Saker Falcons (Falco cherrug) through the provision and monitoring of artificial nests throughout Mongolia, as well as comprehensive research and monitoring of the species.
September 21 (ArabianBusiness.com) The MoU was signed by HE Mohammad Ahmad Al Bowardi, Secretary-General of the Executive Council and Managing Director of EAD and HE Minister Luimed Gansukh, Head of the Ministry of Nature, Environment and Tourism Mongolia (MNET) in the presence of H.E. Majid Al Mansouri, EAD's Secretary General.
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Elbegdorj: Mongolia Can Become A Major Seabuckthorn Supplier
September 21 (UB Post) President Elbegdorj Tsakhia has visited some seabuckthorn and cow farms in Songinokhairkhan District of the capital city Ulaanbaatar and Batsumber and Bayanchandmani soums, Tuv Province on September 16.
First, President Elbegdorj visited a seabuckthorn orchard run by the fruit and vegetables company "Polyvit LLC" in Batsumber Soum. "We will develop not by digging but by planting" said the Polyvit LLC President S.Purev. "We employ more than 100 people and plan to harvest 100-120 tons of seabuckthorn from 40 hectare land this year" Purev added.
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Exchange Rates
Link to Mongol Bank Exchange site
Australia
Close: Mongolia Related ASX Listed Companies, September 21, 2010 | ||||||||
0.880  | -0.010 | 0.880 | 0.900 | 0.900 | 0.910 | 0.875 | 309,855 | |
0.013 | -0.001 | 0.013 | 0.014 | 0.014 | 0.014 | 0.013 | 795,714 | |
0.185  | 0.000 | 0.185 | 0.195 | 0.185 | 0.185 | 0.180 | 409,000 | |
0.130 | -0.005 | 0.125 | 0.130 | 0.135 | 0.135 | 0.125 | 2,221,493 | |
0.170  | 0.015 | 0.155 | 0.165 | 0.160 | 0.170 | 0.160 | 98,286 | |
33.230 | -0.060 | 33.230 | 33.300 | 33.820 | 33.970 | 33.220 | 1,059,395 | |
75.230 | 0.250 | 75.210 | 75.240 | 75.650 | 75.680 | 75.220 | 3,596,950 | |
38.720 | -0.060 | 38.720 | 38.730 | 39.000 | 39.100 | 38.720 | 10,945,703 | |
An * next to the security code indicates there has been an announcement today relating to that security. Click on the * to view the list of today's announcements.
Source: asx.com.au
Wall St lead no corrective to profit-takers
September 21 (AAP) THE Australian sharemarket closed mildly weaker after losing momentum through the trading day on profit-taking, despite a strong performance on Wall Street.
After opening 0.7 per cent higher, the benchmark S&P/ASX 200 Index closed 13.8 points, or 0.3per cent, weaker at 4617.5.
On Wall Street overnight, the Dow Jones Industrial Average closed up 1.37 per cent at 10,753.62 on news that the US had come out of recession in June last year.
Austock Securities senior client adviser Michael Heffernan said the market fared well even though it finished in the red.
''Going down by a cigarette paper is neither here nor there, frankly,'' Mr Heffernan said. ''The more important thing is that we're building on the strong performance we've seen over the last six weeks. That's really the message of the day, in the absence of any major corporate and economic news.''
He said trading started off fine but was sent lower on profit-taking.
BHP Billiton was down 6¢ at $38.72 while Rio Tinto climbed 25¢ to $75.23. Fortescue fell 3¢ to $4.85.
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The top-traded stock by volume was Avanco Resources (Mogi: CPS Securities acted as underwriter in Avanco's past fundraisings), with 475.45million shares worth $26.48million changing hands, after it reported high copper grades from its Rio Verde project in Brazil. Its shares rose 4.1¢, or 157.7 per cent, to 6.7¢.
Global
Most Asian Stocks Fall, Led by Mining Shares, Japan Automakers
Sept. 21 (Bloomberg) -- Most Asian stocks fell, led by automakers in Japan and mining companies, on concern the U.S. Federal Reserve may announce more measures to bolster the world's largest economy following a policy meeting today.
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About 11 stocks declined for every 10 that advanced in the MSCI Asia Pacific Index, which climbed 0.1 percent to 124.87 as of 7:23 p.m. in Tokyo. The gauge has jumped 7.2 percent this month as Chinese and U.S. economic data boosted investor confidence in the global economy. Companies in the index are valued at an average 14.2 times estimated profit, the highest level since Aug. 10, the date of the Fed's last policy meeting.
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Japan's Nikkei 225 Stock Average fell 0.3 percent after rising 0.8 percent earlier. Australia's S&P/ASX 200 Index slipped 0.3 percent, while New Zealand's NZX 50 Index advanced 0.6 percent. Hong Kong's Hang Seng Index gained 0.1 percent.
Lennar Profit
Futures on the Standard & Poor's 500 Index in the U.S. slipped 0.1 percent. The gauge climbed 1.5 percent to a four- month high yesterday after Lennar Corp.'s profit beat analyst estimates and International Business Machines Corp., the world's largest provider of computer services, announced a $1.7 billion takeover.
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Honda Motor lost 0.5 percent to 3,000 yen after the yen appreciated to 85.61 yen from 85.69 yesterday in New York. A stronger yen reduces export revenues when repatriated. Toyota Motor Corp., the world's biggest automaker, dropped 0.5 percent to 3,070 yen. Sony Corp slipped 1.5 percent to 2,637 yen.
"If there is any surprise, it could be that the Fed brings forward plans for monetary easing, which would lead to a weaker dollar and stronger yen," said Tomomi Yamashita, a fund manager in Tokyo at Shinkin Asset Management Co., which oversees about $6 billion.
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Misc
Doing business in Mongolia
(Mogi: Funny article, just had to post. A few good points to keep in mind though)
September 21 (UB Post) With the current mining and investment boom, there are many companies entering and planning to enter the Mongolian market. Let us cover some major problems which face foreign investors in Mongolia.
… If you are bored from Mongolian scrutiny or you are excited to become suddenly macho, you will end up having a Mongolian partner anyway. This is a partner, who will be like your wife, girlfriend or whatever you wish to call him/her.
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… It might that several applicants sent their applications to your company but your secretary threw all of them in the garbage. He/she really wants to put his/her uncle in this position.
Probably, the best solution is to first hire a local chief executive officer, or local deputy. Then he should take responsibility to build a dream team of local talent. Otherwise, your secretary or your wife will take the advantage to build your company or office. … Later, she was even promoted to CEO. Of course, it is up to you whether to hire a librarian or a musician as your Chief Accountant.
… For example, imagine that you are opening a vodka factory in Baganuur district. You first need to invite local authorities and regulatory agencies from Baganuur. Otherwise, you will face big resistance from them, and even the President of Mongolia will not help you. The opening and closure of the National Recreational Park is a good example for that point.
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Now, if you have followed this advice, you will have fixed your personnel problems for a while. But you should be aware that Mongolians are quite mobile. If you will hire younger people, they might want to go overseas to study or take maternity leave or even your competitor might offer a higher salary or better package to lure him/her away. Usually, foreigners and even foreign companies that have been in Mongolia for a long time do not have any ideas about local packages. …
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"Mogi" Munkhdul Badral
Executive Director
CPS International
Email: mogi@cpsinternational.mn
Mobile: +976-99996779
CPS International is a marketing arm of CPS Securities in Mongolia. CPS Securities is a Perth, Western Australia based AFSL License Holder. To trade ASX and international stocks, feel free to contact me at mogi@cpsinternational.mn or +976-99996779.
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