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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Close: Mongolia Related ASX Listed Companies, February 10, 2010 | | |||||||
Code | Last | $ +/- | Bid | Offer | Open | High | Low | Volume |
0.105 | 0.007 | 0.105 | 0.110 | 0.098 | 0.110 | 0.098 | 13,311,292 | |
1.300 | 0.020 | 1.270 | 1.300 | 1.270 | 1.315 | 1.245 | 864,798 | |
0.645 | 0.000 | 0.630 | 0.650 | 0.645 | 0.645 | 0.630 | 358,900 | |
0.660 | 0.015 | 0.645 | 0.660 | 0.650 | 0.660 | 0.645 | 422,710 | |
0.395 | -0.025 | 0.395 | 0.470 | 0.470 | 0.470 | 0.395 | 37,637 | |
0.030 | -0.003 | 0.030 | 0.031 | 0.033 | 0.033 | 0.030 | 4,684,726 | |
0.011 | 0.000 | 0.010 | 0.011 | 0.011 | 0.011 | 0.011 | 500,000 | |
0.145 | -0.005 | 0.145 | 0.150 | 0.145 | 0.145 | 0.145 | 120,000 | |
0.355 | -0.005 | 0.340 | 0.355 | 0.360 | 0.360 | 0.350 | 643,718 | |
0.700 | -0.015 | 0.700 | 0.710 | 0.705 | 0.710 | 0.700 | 752,291 | |
30.75 | -0.020 | 30.750 | 30.890 | 30.840 | 30.930 | 30.720 | 533,682 | |
88.68 | 0.300 | 88.650 | 88.680 | 88.040 | 88.810 | 88.040 | 2,016,918 | |
46.76 | 0.020 | 46.640 | 46.800 | 46.440 | 46.770 | 46.360 | 8,288,361 | |
Source: asx.com.au
Haranga Investor Presentation
February 7 (Haranga) Haranga Resources (ASX:HAR) Investor Presentation February 2011.
REPORT ON EXPLOITATION OF TAVAN TOLGOI DEPOSIT
February 10, Ulaanbaatar, Mongolia, /MONTSAME/ On Wednesday, the cabinet meeting was introduced to report on a process around the Tavan tolgoi (TT) coal deposit and preliminary selection for exploitation.
According to the 39th parliamentary resolution, the cabinet discussed issues of the exploitation of this deposit several times and has issued related resolutions and decisions. For the time being, a mining is ready to begin at the eastern side of the TT deposit called "Eastern Tsankh", and an export of coal may begin soon.
A preparation is underway to have Mongolia's people and entities own shares of the “Erdenes Tavan tolgoi” company that will carry out activities of the deposit's exploitation, and to trade shares at domestic and foreign capital markets.
The first phase is to complete soon of an international open tender when entities will be selected to invest some parts of the mineral deposit and develop a collaboration. After this, a selection will run looking for a consortium which is to cooperate with the participants in making agreements on transit transportation, contrary terms, usage of ports, upfront fee, sales of products and investment terms.
The cabinet pays a special attention to the exploitation of the TT because this year is the time to start its exploitation. The government will run big works to extract and export about two tons coal to foreign countries in the first turn, to erect a project financing, to issue shares of the “Erdenes Tavan tolgoi” company on foreign and domestic stock exchanges, and to construct factory of water supply and enrichment plant, camp of miners, a power station and auto roads.
The cabinet has decided to have parliament get au fait with this process.
Foreign banks seek role in Mongolian coal IPO
February 10 (AFP) ULAN BATOR — Mongolia on Thursday started interviewing foreign banks seeking a role in the initial public offering of Erdenes Tavan Tolgoi, owner of a massive coal deposit in the Gobi desert, an official said.
Analysts said Goldman Sachs, UBS and Deutsche Bank were among more than a dozen investment banks that had submitted applications to advise on the IPO, which is expected to raise up to $2 billion.
The government launched the interview process in Ulan Bator, an official at state-owned Erdenes MGL LCC, the parent of Erdenes Tavan Tolgoi (ETT), told AFP, without providing further details.
Goldman Sachs, UBS and Deutsche Bank declined to comment when contacted by AFP.
…
Tavan Tolgoi is a "very big deal for the Mongolian government" and foreign investors will be aware of reports that officials were not "entirely happy with the way the Oyu Tolgoi deal played out," Neil Ashdown, an analyst at IHS Global Insight, told AFP, referring to an earlier deal.
"If the model being used here is seen as successful then the banks that helped to implement it would be in a strong position for further lucrative work in future."
…
ETT is planning to contract out the development of Tavan Tolgoi to a private company or consortium, and the government is currently considering a shortlist of 15 companies, Ashdown said.
But World Bank senior mining specialist Graeme Hancock told AFP that it could take up to two years for ETT to be listed because the government needs to "put in place all the corporate governance systems".
…
Mongolia Pushes Forward on Coal Deal
February 9 (WSJ) Mongolian officials are sitting down with bankers in the coming days to discuss the multibillion-dollar sale of shares in the world's largest coking coal deposit, said people familiar with the matter.
Mongolia plans to sell about half of state-owned holding company Erdenes-Tavan Tolgoi Co., which controls the massive deposit, located in the South Gobi desert near China's northern border.
The initial public offering would value the holding company between $10 billion and $15 billion, said one of the people familiar with the matter.
The bankers meeting with Mongolian officials this weekend and early next week are hoping the complicated deal doesn't get mired in a political quagmire. The sale of Mongolia's resources is fraught with tension, as the impoverished nation struggles to balance selling its resources while staying independent of its larger, more powerful neighbors, China and Russia.
China's voracious appetite for commodities gives neighboring Mongolia a ready-made, nearby market for its exports, though other countries in the region also are eager to gain access to its natural resources. Coking coal from Tavan Tolgoi is particularly sought after because it is considered of high quality for use in making steel.
The IPO of Erdenes-TT, as it is known, is inextricably linked with the sale of a concession to develop half of the deposit for a set period. Competing bidders for the license come from China, Russia, Japan, India, South Korea and elsewhere.
The holding company is likely to receive royalties from the concession operator.
The bankers, who are officially mandated to sell the shares, plan to sell 30% of Erdenes TT to international investors, 10% to domestic professional investors and give 10% free to Mongolian citizens.
The domestic share sale could take place later this year, followed by the international share sale early in 2012, the person said.
But many details of the deal remain uncertain, which makes bankers nervous.
Mongolia still has to award the license to develop roughly half the deposit. A preferred bidder may be named in the coming weeks and finalized over the next six months, the person said. China's Shenhua Group and Peabody Energy Corp. of the U.S. are among the leading contenders said another person familiar with the matter.
It's unclear how the coking coal, from the estimated 6.4 billion metric tons of reserves, will be exported from the land-locked nation, as railroad links directly from the mines into Russia and China have yet to be completed. Bankers also find the prospect of distributing shares in the world's most sparsely populated nation a daunting prospect. A large percentage of Mongolia's 2.7 million population is nomadic.
It's also unclear on which exchange the 30% of shares will be sold.
Coking-coal producer Mongolia Mining Corp. chose to go public in Hong Kong in October and raised HK$5.8 billion (US$745.2 million). That deal was managed by Citigroup Inc. and J.P. Morgan Chase & Co.
One banker said news that the stock markets of London and Toronto are in advanced talks to merge would give them an edge over Hong Kong as a destination. The London-Toronto combination would produce a mining- and resource-exchange giant that would rank No. 2 globally in terms of the value of the companies traded.
Also, London also has a strategic partnership with the tiny Mongolian stock exchange.
Morgan Stanley Puts Mongolian Princeling to Work
February 9 (WSJ) Managers of Mongolian state-owned companies have likely been especially alert at meetings with certain bankers recently. That’s because the son of Mongolian Prime Minister Sukhbaatar Batbold has been out pitching on behalf of his employer, Morgan Stanley.
Battushig Batbold, who’s in his early 20s, is a metals-and-mining investment analyst at Morgan Stanley, just right for work in resource-rich Mongolia.
Mr. Batbold, based in London, has been spotted going to meetings in Mongolia, so it seems Morgan Stanley is putting its prestigious hire in front of clients quickly, a rare opportunity for an entry-level banker. Mr. Batbold joined the U.S. firm in November 2009 according to his online LinkedIn profile.
The hurry might have something to do with the sale of half the shares in the state-owned holding company for the world’s second-largest coal deposit, Erdenes-Tavan Tolgoi Co. The Tavan Tolgoi deposit is located in the South Gobi desert, near China’s northern border.
Bankers are pitching for a mandate to carry out the share sale this week and early next week, said one person familiar with the matter.
Mongolian resource companies have already been raising money abroad. Coking-coal producer Mongolia Mining Corp., the first Mongolia-based company to go public in Hong Kong, in October raised HK$5.8 billion (US$745.3 million) in an offering managed by Citigroup Inc. and J.P. Morgan Chase & Co. SouthGobi Energy Resources Ltd., which mines coal in Mongolia but is headquartered in Canada, raised US$442 million in a Hong Kong IPO in January 2010. Citigroup and Macquarie Securities Ltd. handled that deal.
Mr. Batbold’s dad, the prime minister, is viewed as more business-friendly than his predecessors. He used to run a trading company, Altai Trading Co., which had among its interests a gold-mining joint venture. He has five children with his second wife.
In hiring the younger Mr. Batbold, Morgan Stanley may be trying to replicate the pattern in China where the children of China’s top government officials have long been known for their prowess in winning business for investment banks or deals for funds. These children of privilege—called “princelings” on the mainland—include Jeffrey Li, the son of former Politburo standing committee member Li Ruihuan, who left pharmaceutical company Novartis AG after five years as its China chief to set up a private-equity fund called the GL China Opportunities Fund.
Many princelings are educated in the West, like Mr. Batbold, and bring back ideas that can influence policy.
One example is Chinese investment bank China International Capital Corp. Chief Executive Levin Zhu. Mr. Zhu helped bring back ideas from his work at Credit Suisse in the U.S. to influence the thinking of his father, Premier Zhu Rongji, in the restructuring of Chinese state-owned companies in the late 1990s. The power wielded by the children of the Chinese elite has come in for heavy public criticism in China of late.
Speaking at a One Young World summit last year, a get-together for influential people age 25 and under, Mr. Batbold noted that Mongolia has among the world’s largest undeveloped deposits of gold, copper and coal but many of its 2.7 million population still live in poverty.
Mongolia: battle for mega-deal begins
February 9 (FT) It’s one of the hottest prizes in investment banking in Asia this year: the initial public offering of Erdenes Tavan Tolgoi, a Mongolian state company that owns a vast coal deposit in the Gobi Desert. On Thursday the Mongolian government starts formal interviews with many of the 18 banks – including Goldman Sachs, UBS and Deutsche Bank – that are fighting for a role in the IPO expected to take place in Hong Kong or London in 2012.
Competition for the deal is fierce. So which banks are in prime position to win the mandate?
With so many groups in the running – rumoured to include Citigroup, JPMorgan, Morgan Stanley, Merrill Lynch, BNP Paribas, and ING as well as the three banks mentioned above – the answer is far from clear. According to one source, the Mongolian government is struggling to cope with the number of pitches it has received or even understand the financial intricacies of the proposals – leaving the playing field wide open.
Some suggest that Morgan Stanley may have an edge because the son of Sukhbaatar Batbold, Mongolia’s prime minister, works for the company (as an analyst in Chicago). Then there is the fact that John Mack, Morgan Stanley chairman, visited Ulan Bator last Autumn and met Batbold.
Others reckon that JPMorgan and Deutsche Bank are in a good position, since both banks were hired by the Mongolian government for its original plan – now scrapped – to sell as much as 49 per cent of the Tavan Tolgoi coal deposit to a foreign bidder.
JPMorgan and Citigroup can also tout the fact that they arranged the Hong Kong IPO of Mongolia Mining Corp in October. MMC, Mongolia’s largest privately held producer of coking coal, raised about $700m in the deal.
Insiders also reckon Goldman Sachs and UBS have positioned themselves well with the Mongolian officials. Whatever the case, dealmakers reckon the government may end up mandating as many as five or six banks for the IPO, which would be consistent with many recent Hong Kong deals.
AIA, the insurance group, appointed eleven bookrunners for its Hong Kong IPOs last year, while Agricultural Bank of China, the mainland bank, had seven bookrunners for its share sale in the city.
Of course, appointing lots of banks to the deal team won’t put an end to the competition. Then comes the tricky decision of which bank is in charge.
Banks in Mongolian coal ‘gold rush’
February 8 (FT) Dealmakers from the world’s top investment banks are jetting into Ulan Bator this week to fight for a role in an extraordinary deal that is set to turbocharge the Mongolian economy and enrich its population of 3m.
The initial public offering of Erdenes Tavan Tolgoi, a state company that owns a vast untapped coal deposit in the Gobi Desert, is one of the hottest prizes in investment banking in Asia this year.
The deal is contributing to a modern-day gold rush in Ulan Bator, the smog-ridden capital of Mongolia where winter temperatures plunge below minus 30°C.
“There is a great deal of excitement, every bank is in town,” says Howard Lambert of ING, which has an office in Ulan Bator.
On Thursday the Mongolian government starts formal interviews with most of the 18 banks – including Goldman Sachs, UBS and Deutsche Bank – that submitted proposals for a role in the offering.
Already tempers are running high. “I have never seen this much testosterone in [Ulan Bator],” says one dealmaker, who says he witnessed a brawl last month between rival investment bankers at the Grand Khaan Irish Pub, a popular nightspot named after Mongol warlord Genghis Khan.
Bankers are desperate to get involved in the IPO of Erdenes TT partly because they want to position themselves for other big deals in Mongolia, which has extensive deposits of minerals including uranium, gold, copper, molybdenum, zinc, silver and lead.
The listing is the first to be directly orchestrated by the Mongolian government, following the recent Hong Kong listings of private miners such as SouthGobi Resources and Mongolian Mining.
“This is viewed as a must-win deal by many banks,” says one banker.
With an estimated 6.5bn tonnes of reserves, mostly coking coal, Tavan Tolgoi is the second-largest coal field in the world after Shengli in China, according to Raw Materials Group, a data provider based in Stockholm.
Yet while the prize is big, much of the process is still up in the air – the timing and size of the IPO, and even exactly what assets will be included are still being decided.
Another question is how the mine’s infrastructure, including a railway to move the coal to Russia or China, will be financed.
With all these uncertainties, one banker estimates that the IPO could raise between $2bn and $5bn for the 30 per cent of Erdenes TT that will be sold to international investors, valuing the whole company between $6.7bn and $16.7bn.
“The valuation range is so wide because so many details are unknown,” he said.
A key challenge facing the banks is how to fulfil the government’s wish that 10 per cent of shares be distributed among the people of Mongolia, a logistical difficulty in a country with nascent financial infrastructure.
Given Mongolia’s per capita gross domestic product of about $1,500, the share allotment is likely to amount to a windfall for the average citizen.
Mongolian companies stand to gain too – they will be able to buy 10 per cent of the shares at a big discount.
Shares distributed to the Mongolian people will be listed on the Mongolia Stock Exchange, a tiny bourse that last month entered into a strategic partnership with the London Stock Exchange.
The shares sold to international investors are likely to be listed in London, Hong Kong, or both.
Dealmakers expect the listing will happen in the first quarter of 2012, before Mongolian parliamentary elections in June that year.
Some sceptics say that winning the deal could be a poisoned chalice. The Mongolian government has repeatedly changed its plans in recent years over how best to develop the Tavan Tolgoi coal deposit – perhaps understandably, given that for the Mongolian people the stakes are so high.
Rio Tinto 2010 Full Year Results
February 10 (Mogi) Rio Tinto released its 2010 full year results today.
Link to Full Report (Oyu Tolgoi related report is on Pages 37-39 )
Mongolia and Korea talks
February 9 (The Washington Times) Mongolia is eager to host bilateral talks between the United States and North Korea, according to Mongolian President Tsakhia Elbegdorj.
“We are open for that, and we would like to participate in regional dispute settlements. That’s our desire,” Mr. Elbegdorj said during a recent interview in Ulan Bator, the capital.
He said Mongolia, sandwiched between Russia and China and close to the Korean peninsula, is geographically well-located to play a major role in resolving regional disputes.
“The other thing is that we don’t have a big political interest, and that means Mongolia can be a very neutral place to meet those parties,” he said. “Mongolia is very happy to share our lessons to others in our region.”
The country, considered one of the most open and democratic in Central Asia, can help others make the transition to democratic systems, he said, noting that Mongolia‘s successes during the past 20 years of independence from the former Soviet Union also included mistakes.
“But we usually learn from our mistakes, and we share those mistakes and the lessons from them with others,” he said.
Mr. Elbegdorj made the comments when asked about a recently disclosed State Department cable revealing details of Mongolian-North Korean government talks.
The Aug. 13, 2009, cable outlined meetings between Mongolian leaders, including Mr. Elbegdorj, and North Korean Vice Foreign Minister Kim Yong-il two days earlier.
The cable, labeled “secret,” said Mr. Kim “spent much time on the nuclear issue and little on the bilateral relationship with Mongolia.”
…
The North Korean minister said his country was “spending too much on weapons rather than on its children, but that the current reality dictates that they cannot get away from weapons for now.”
Mongolian officials countered that a nuclear North Korea could lead to South Korea, Japan, Syria and Iran becoming nuclear powers, and urged Pyongyang to follow Mongolia‘s “nuclear-free model.”
“Kim stated the United States would not allow Japan or [South Korea] to go nuclear and that the [North] is committed to peace and denuclearization,” the cable said.
The Mongolians then called for North Korea to permit nuclear inspections.
…
DIESEL EXCISE TAX IS TO BE ZERO
February 10, Ulaanbaatar, Mongolia, /MONTSAME/ The cabinet decided on its meeting February 9 to free diesel fuel from the 20 thousand togrog excise tax this month.
A 230 thousand togrog excise tax on A92 auto petrol has remained unchanged. A 190 thousand togrog excise tax will go down to 160 thousand which is taken from a A80 petrol that has been imported through Altanbulag, Ereentsav, Zamiin-Uud and Sukhbaatar border ports. Both decision will come into force from February 11.
Prices of the petrol products imported by the Russian “Rosneft” company increased this month--a ton of A80 by 72 U.S. dollars, of A92 by 21, and of diesel by 78 dollars.
POWER STATION TO BE ERECTED IN ZAVKHAN
February 10, Ulaanbaatar, Mongolia, /MONTSAME/ The cabinet made decision on Wednesday to construct a thermal power station in Zavkhan aimag's Telmen soum in order to provide Zavkhan and Gobi-Altai aimags with electricity and increase energy resources of western aimags.
The station will be constructed on the “Mogoi gol” coal mine. It is supposed to put the first part of the station into use by the end of 2012. The Minister of Mineral Resources and Energy D.Zorigt and head of the State Property Committee D.Sugar have been obliged to establish a contract on construction of the power station in accordance with the law on concession and to organize the implementation of a related project and then introduce it to a cabinet meeting.
PRIVATE SECTOR TO BE SUPPORTED MORE
February 10, Ulaanbaatar, Mongolia, /MONTSAME/ The cabinet discussed and approved a plan for realizing a national strategy on supporting a private sector. The implementation steps and the capital will be reflected in the annual guidelines of socio-economic development and in the state and local budgets and be financed by assistance and aid from foreign countries and international organizations.
The national strategy aims to create a favorable condition for running business, enhancing a competitiveness of the private sector, developing mutually beneficial cooperation and partnership the state--the private sector, supporting the private sector in increasing labor productivity and job places.
In frames of the national strategy, the measures will be taken out to create legal environment for supporting a development of the sector, to support it with economics, finance, investment and external trade policies, to expand the collaboration between the state and the private sector making the state services transparent and prompt, and to provide it with employment, professional education, training and human resources policy.
The government plans to implement the strategy in two stages as 2011-2013 and 2014-2016 years.
<Mogi & Friends Fund A/C>
Fund taking part in new capital raising
Mogi & Friends Fund is a tiny fund of A$21.8K I created in late September with a few friends to put my own (and a few friends’) money where my mouth (just mine) is.
Mogi & Co. is taking part in a new capital raising. Sold a few shares and raised $10K to invest in the deal.
Mogi
Disclosures
· I personally and through my “Mogi & Friends Fund” hold 75,000 HAR shares in aggregate.
· Jason Peterson, CPS Securities Director, holds shares (approx. 6,500,000) and options (1,000,000) in HAR.
· CPS holds 500,000 options in HAR for corporate advice provided to HAR – Jason Peterson is a 33% shareholder in CPS.
· CPS and CPSI directors and employees hold shares in HAR and may buy and sell these shares as and when they see fit.
· Jason Peterson is a non-executive director of HAR but not involved in the day to day running of HAR.
· CPS has received an IPO management fee of $250,000 and a 5% fee for any funds placed to its clients under the prospectus.
· HAR has paid for Jason Peterson’s travel and accommodation expenses to and in Mongolia – this must be disclosed as a soft dollar commission.
· Please refer to the prospectus for further disclosures.
---
"Mogi" Munkhdul Badral
Executive Director
CPS International LLC
Telephone/Fax: +976-11-321326
Mobile: +976-99996779
Email: mogi@cpsinternational.mn
Suite 906, Central Tower
Sukhbaatar District, Ulaanbaatar
Mongolia
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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