CPSI NewsWire brings you market updates on Mongolia, compiled by CPS International, a Mongolian marketing arm of CPS Securities, a Perth, WA based stockbroking and corporate advisory firm, specialising in capital raising for mining and junior stocks.
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Close: Mongolia Related ASX Listed Companies, September 9, 2011
S&P/ASX 200 RESOURCES
MATD closed down 12.9% to 45.5p
Petro Matad is confident in Davsan Togoi oilfield despite disappointing well results
September 9 (Proactive Investors) Petro Matad (LON:MATD) today revealed that its latest well, Davsan Tolgoi-10, has been plugged and abandoned after it failed to encounter moveable hydrocarbons.
HUN last traded at A$1.385
Hunnu: Trading Halt
September 9, Hunnu Coal Limited (ASX:HUN) --
The Directors of Hunnu Coal Limited (ASX Code: HUN) hereby request a trading halt of the Company's securities pending an announcement regarding a potentially significant corporate transaction.
The trading halt is requested until an announcement is made to the market, which is expected to be on or before the opening of trading on Tuesday 13 September 2011
The company is not aware of any reason why the trading halt should not be granted.
Related: Half Year Accounts – Hunnu Coal, September 9
TVN closed down 0.2c to 5.5c
TVN: SIGNIFICANT COAL SEAM DEVELOPMENT EXTENDS FURTHER WEST
September 9, TVN Corporation Limited (ASX:TVN) --
· Minimum of 142 m thick down hole coal sequence intercepted – hole abandoned in coal, full coal seam sequence thickness yet to be determined
· Coal from 108.6 m depth
· 400 m further west of previously defined coal seam development
· Assays received from holes 5 and 6
Exclusive: Mongolian PM says plans to list national rail company
September 9 (Reuters) - The long awaited initial public offering of Mongolia's Erdenes-Tavan Tolgoi will be delayed to the end of the first quarter of 2012 at the earliest, Mongolian Prime Minister Sukhbaatar Batbold said on Friday, adding that his government was also planning to list part of the country's state-owned rail firm.
Batbold, speaking to Reuters in an exclusive interview, said discussions were still ongoing with all firms bidding for mining rights for the western section of the massive Tavan Tolgoi coal deposit.
"The final investment agreement will take into consideration the interests of our two neighbours (China and Russia)," Batbold said.
The government has previously said the listing would take place by the end of 2011 or early 2012.
Batbold also said the government plans to list 49 percent of Mongolian Railway Co to help fund the country's ambitious construction plans.
Land-locked Mongolia, which has one of the lowest railway densities in the world, plans to more than triple its rail network to reach Chinese and Russian borders, tapping their ports to build new trade ties with countries such as Japan and South Korea.
The government plans to build additional rail lines to link the Tavan Tolgoi deposit to the Chinese border, on top of approved plans to construct an east-west line that would travel through Mongolia's Sainshand to near the Russian border town of Choibalsan.
Tavan Tolgoi is the world's largest untapped coking coal deposit with an estimated 6 billion tonnes of coal resources. The western section of the mine is being auctioned to international investors, while the government would retain ownership of the eastern block and raise money for its development via an IPO.
With no resources of their own, Japan and South Korea are desperate to get a slice of Tavan Tolgoi and a string of their trading firms have partnered with Russian Railways to form a consortium bidding for the project.
Goldman Sachs Group Inc (GS.N), Deutsche Bank AG (DBKGn.DE), BNP Paribas SA (BNPP.PA) and Macquarie Group Ltd (MQG.AX) were hired to manage the offering of Tavan Tolgoi.
Mongolia plans huge coal IPO in 2012: executives
ULAN BATOR, September 9 (AFP) — Mongolia's state-owned mining firm Erdenes Tavan Tolgoi (ETT) could list in Hong Kong, London and Ulan Bator early next year, executives with knowledge of the matter said Friday.
The company controls the huge Tavan Tolgoi coal deposit in southern Mongolia, which as the world's largest untapped mine has attracted the interest of resource giants from around the globe.
While an IPO on the Mongolian Stock Exchange (MSE) is not expected to generate much capital, billions could be raised on overseas exchanges.
"I had a conversation with the prime minister about this matter and there was a very strong commitment to achieve the goals of listing ETT on the current timetable (first quarter of 2012)," said John Finigan, head of the Ulan Bator-based Golomt Bank.
"The hope is to list on three exchanges - London, Hong Kong and the Mongolian Stock Exchange," he told AFP on the sidelines of a major investors conference in the Mongolian capital.
Bill Gorman, president of the MSE, told conference delegates work was underway to prepare for the IPO in Ulan Bator, pending approval of a new law by parliament.
"A number of things have to fall into place before Tavan Tolgoi can be properly privatised and listed on the MSE. First and foremost is passage of the new securities law," he said.
The planned IPO could be a boon for ordinary Mongolians hoping to reap the rewards of their mineral-rich country.
The government has already promised every Mongolian 536 shares of ETT, which they will only be able to access after the IPO.
Officials estimate the value of each lot of shares for Mongolians to be around $300-$500 -- a substantial sum in one of Asia?s poorest countries.
Mongolia needs capital to build up the Tavan Tolgoi mine, which has an estimated 6.4 billion tonnes of coal reserves, the majority of which is high grade coking coal used in the production of steel.
Ulan Bator has carved up the coal reserve into different blocks, and is working with a number of international consortiums and mining companies to develop the mine.
In July, the government announced that US mining giant Peabody Energy, China's Shenhua and a Russian consortium would jointly mine the western Tsankhi block.
But it later said that the decision was not final, and other companies from Japan and Korea may also be involved.
UPDATE 2-Mongolia's Tavan Tolgoi says all firms still in running
* IPO venue for Erdenes-TT still undecided
* Negotiations over Tavan Tolgoi mining rights ongoing
* Coal exports at 1 mln in 2011, seen rising to 13 mln by 2015
ULAN BATOR, Sept 8 (Reuters) - All 15 of the companies bidding for mining rights at Mongolia's massive Tavan Tolgoi coal deposit are still in the running, an executive from the country's state-owned miner said on Thursday.
Negotiations over the mining rights are continuing, said Erdenes MGL Executive Director B. Enebish, speaking at a conference in Ulan Bator.
He did not name all the 15 companies still regarded as candidates for the mining rights for Tavan Tolgoi's western block, referring only to China Shenhua Energy Co Ltd and Japan's Mitsui & Co. , a Russian and Mongolian consortium, groups from Japan and South Korea and also U.S. miner Peabody Energy Corp .
"There has been a lot of reporting of rumours about Tavan Tolgoi but as far as we are concerned it is not finalised yet," Enebish added.
Sources told Reuters that the Mongolian Security Council (MSC) would convene an emergency session, possibly as early as Friday, to deliberate on the coal project. The MSC's approval is required before the agreement is finally submitted to parliament, which reopens in October.
The Tavan Tolgoi coal deposit, in Mongolia's south Gobi region, has estimated reserves of 6 billion tonnes of coal, including the world's largest untapped deposit of coking coal used to make steel.
The western Tsankhi block holds about 1.2 billion tonnes of reserves, 65 percent of which is coking coal. It has an estimated production life of more than 30 years at 15 million tonnes a year.
Enebish also said there are "lots of elements to resolve" on the issue of where the initial public offering of state-owned Erdenes-Tavan Tolgoi will take place.
The government plans an IPO of up to $5 billion for Erdenes-TT, the state-owned company in charge of the eastern Tsankhi block of the Tavan Tolgoi deposit. Bankers involved in the deal said the plans are for an IPO in London, Hong Kong and Ulan Bator.
Enebish said the location of the IPO was still not settled but added that he was "confident that shares will be traded on the international market next year."
Goldman Sachs Group Inc , Deutsche Bank AG , BNP Paribas SA and Macquarie Group Ltd were hired to manage the offering.
Total exports from Tavan Tolgoi's east Tsankhi block would reach 1 million tonnes this year after the deal signed with Aluminum Corp of China Ltd , or Chalco.
The government is also looking to Japanese markets and Itochu, Mitsui and others are involved in offtake agreements, Enebish said.
Exports were expected to reach 13 million tonnes by 2015, he added.
Oyu Tolgoi to account for 33% of Mongolia's GDP in 2020
TORONTO, September 8 (miningweekly.com) – Rio Tinto and Ivanhoe Mine's giant Oyu Tolgoi copper/gold operation will account for around one-third of Mongolia's economy by 2020, and will have led to an increase of a similar magnitude in the size of the Asian country's economy by the same time, the CEO of the mine said on Thursday.
Cameron McRae said in a copy of a presentation posted to Rio Tinto's website, but delivered in Mongolia, that the roughly $6-billion mine will lift gross domestic product (GDP) per person by over $1 000 over the next decade.
That's more than 60% higher than the current GDP per capita.
Oyu Tolgoi is expected to produce more than 1.2-billion pounds of copper and 650 000 oz of gold a year in the first ten years of operation, and the mine would produce around 1.7-billion pounds of copper and one-million ounces of gold at its peak, in year seven.
The first openpit phase is set to start commercial production in 2013, with underground production set to arrive two years later.
Australia- and London-listed Rio Tinto owns 48.5% of Ivanhoe, which in turn owns two-thirds of Oyu Tolgoi. The Mongolian government owns the remainder.
In August, Ivanhoe said it had started prestripping at the openpit.
In the copy of his presentation, McRae showed that global copper demand is expected to rise by more than 40% to 27-million tons by 2020, as China will have built between four-million and five-million new buildings between 2005 and 2025.
Related: Rio Tinto forecasts surge in world demand for refined copper – Dow Jones, September 9
Mongolian lawmakers demand revision of large mining deal
ULAN BATOR, Sept. 7 (Xinhua) -- A group of 20 Mongolian lawmakers has demanded that the government revise an investment deal signed with two foreign mining firms in 2009, local media reported Wednesday.
Lawmakers from both the ruling Mongolian People's Party and Mongolian Democratic Party demanded the government increase Mongolia's stake in the investment agreement made with Canadian mining company Ivanhoe Mines and global mining giant Rio Tinto on Oct. 6, 2009.
They also demanded a higher tax on the mining companies, adding that the government needs to get the deal revised by Oct. 1.
The government currently owns a 34-percent stake in the giant mining project and lawmakers expect it to be raised to 50 percent once investors recoup initial investment costs.
According to its website, the Oyu Tolgoi project requires more than five billion U.S. dollars and production is expected to start in late 2012.
Lawmaker Davaajav Gankhuyag said "in the investment agreement with miners, the price of copper is set at 4,320 U.S. dollars per ton. Today the price of copper is around 8,000 dollars. It may reach 9,000 dollars soon. At this rate, investors can recoup the initial investment cost within two years."
According to the original agreement, Mongolia would provide a stable tax and legal environment for investors and not revise the agreement.
The Oyu Tolgoi mine contains one of the world's biggest copper-gold deposits. According to a preliminary exploration, the mine contains more than 31 million tons of copper, some 1,328 tons of gold and about 7,000 tons of silver.
MPS GRANT REQUIREMENT TO PREMIER – Montsame, September 8
УИХ-ын нэр бүхий 20 гишүүн Оюу толгойн гэрээг эсэргүүцэн Ерөнхий сайдад шаардлага хүргүүллээ – news.gogo.mn, September 7
BZM up 120% with low volume on Friday on the Canadian National Stock Exchange
Blue Zen Considering Change of Business and Acquisition of Mineral Exploration Assets (in Mongolia)
Montreal, Quebec CANADA, September 09, 2011 /FSC/ - Blue Zen Memorial Parks Inc. (BZM - CNSX)("Blue Zen" or the "Company" or "BZM"), a company that currently specializes in the investment, development, and management of memorial parks and other real estate developments in the People's Republic of China ("PRC"), today announced that it has signed a Letter of Intent ("LOI") with International Natural Resources Ltd. ("Vendor" or "INR"), a mining company incorporated in the British Virgin Islands, with respect to the business of copper and gold mineral exploration and development in Mongolia and elsewhere in the world.
Under the terms of the LOI, the Company will purchase from the Vendor the controlling shares of Eagle Brilliant Holdings Ltd. ("EBH"), a company incorporated in the British Virgin Islands, in exchange for 22,500,000 common shares of BZM (the "Proposed Transaction"). EBH is in the process of acquiring up to an eighty percent (80%) equity interest in AIM Co., which, in turn, holds all of the rights, title and interest in the mining claims or concessions ("Mining Assets"), and the necessary licenses and permits related to the business of mineral exploration and development (the "Business"), in Mongolia and elsewhere in the world. The Mining Assets include up to 12 claims or concessions representing up to 2,881 square kilometres of land in Mongolia's South Gobi region , the final composition of which is subject to the due diligence exercise currently underway by the Vendor and the approval of BZM. The Proposed Transaction may be characterized as a related party transaction as the Vendor is controlled by Mr. Jiaping Jiang, one of BZM's existing directors.
The Company intends to suspend the development of its current memorial parks and real estate development businesses while it pursues the Proposed Transaction. The Company's decision to diversify its core business occurred as a result of the extensive delay in obtaining the necessary licenses and permits to operate a memorial park in the Yixing region, PRC, and the inability to execute its business plan in a timely manner. Management and the Board of Directors believe that the proposed shift in the BZM's strategic direction as currently contemplated by the Proposed Transaction is in the best interests of the Company and its shareholders.
The parties intend that the closing of the Proposed Transaction occur on or before February 29, 2012. Closing of the Proposed Transaction will be subject to, among others, the signature of a definitive agreement between the Company and the Vendor, and the obtaining of all requisite regulatory and shareholder approvals, all consents and approvals to the change of control of EBH and AIM Co., and the completion of satisfactory due diligence investigations by the Company and the Vendor, including receipt from the Vendor of a National Instrument 43-101 compliant technical report (the "Technical Report") identifying and displaying information related to mineral properties, resources and reserves as related to the Mining Assets. Financing arrangements will occur subject to the outcome of the Technical Report. The Definitive Agreement will stipulate the means by which the Company will raise capital and finance internal operations, consistent with regulatory requirements.
The Gobi is a large desert region in Asia. It covers parts of northern and northwestern China and of southern Mongolia. The Mining Assets are located within a tract of land that is adjacent to the Oyu Tolgoi project, the world's largest undeveloped copper and gold project, which is located approximately 80 kilometers north of the Mongolia-China border and 66% owned by Ivanhoe Mines Ltd. ("Ivanhoe"), a Canadian mineral exploration and development company headquartered in Vancouver, British Columbia. When Oyu Tolgoi moves into full production starting in 2013, it will be one of the world's top three copper and gold mines.
According to a report by Business Monitor International ("BMI") ("Mongolia Mining Report Q3 2011"), Mongolia is set for a rapid increase in production of copper, gold and coal, leading to accelerated growth in the mining sector. BMI reports that Mongolia's mining sector output will grow to US$11.5 billion by 2015, marking a fourfold increase from 2010 levels of US$2.6 billion.
Pursuant to the terms of the Share Exchange and Asset Purchase Transaction between Sun Thinktank Creative Holdings Limited ("STC"), Jiangsu Tiandilong Land Resource Technology Co. Ltd. ("TDL"), and the Company, which closed on December 30, 2010, if Blue Zen was not successful in obtaining the necessary licenses, permits and approvals required for development of the 49,208 sq. meters tract of land located in Yixing City as a memorial park on or before July 31, 2011, then 22,500,000 Blue Zen shares held in non-regulatory escrow would be returned to Blue Zen's treasury for cancellation. As at July 31, 2011, the Company was not able to secure the necessary licenses, permits and approvals; therefore, as at the date of this press release, the Company is in the process of returning the 22,500,000 shares to its treasury. The Company will retain ownership of the Land as well as 100% of the share capital of Blue Zen Memorial Park Ltd. As a result, Blue Zen has 36,401,420 common shares issued and outstanding.
Upon return of the 22,500,000 shares to the Company's treasury, and as a result of the Closing of the Proposed Transaction, it is expected that Blue Zen will have 58,901,420 shares issued and outstanding, of which: a) Blue Zen's public shareholders will hold 13,901,420 shares (or 23.6% of the total shares); b) STC will hold 7,303,776 shares (or 12.4% of the shares); and c) INR will hold 37,696,224 shares (or 64% of the shares).
Prior to the execution of the Definitive Agreement and for the purpose of advancing the transition from BZM's current memorial parks business to the proposed Business, the Vendor shall be entitled to appoint, subject to the consent of the Company, a CEO to replace the existing CEO, and two directors, one of them being the Chairman, to the Board of Directors, which shall, after the said appointment and pending the execution of the Definitive Agreement, continue to be comprised of four members. The Vendor shall also be entitled to appoint a new management team, which shall include one or more persons with demonstrated positive mining development and project finance expertise.
Detailed biographies for each of the directors will be available in the Management Information Circular that will be prepared and sent to each Blue Zen shareholder in connection with the annual and special meeting of shareholders to consider the Proposed Transaction and related matters.
About INR and the Principals
Erdene Strengthens Management Team
HALIFAX, NOVA SCOTIA--(Marketwire - Sept. 9, 2011) - Erdene Resource Development Corp. ("Erdene") (TSX:ERD), is pleased to announce the appointment of Mr. Michael MacDonald to their management team as Director of Exploration-Mongolia.
Mr. MacDonald will be responsible for the design and implementation of Mongolia programs, dealing with exploration, development, and management, including working with various government agencies in Mongolia as they relate to Erdene's land holdings and future interests.
Mr. MacDonald has previous mineral exploration experience in Mongolia, having worked with Erdene's principals, Mr. Peter Akerley and Mr. Chris Cowan in the mid-1990's as part of the largest regional exploration program completed by a foreign, western-based, exploration company up to that time. The exploration program evolved into a joint-venture with Barrick Gold focussed on epithermal gold opportunities in Mongolia in 1997-98.
Prior to joining Erdene, Mr. MacDonald held the position of Executive Director of the Mineral Resources Branch for the Province of Nova Scotia, Canada. In this capacity, he was in charge of co-ordinating policy and planning to guide the development, management, conservation and protection of Nova Scotia's mineral resources. Mr. MacDonald has led and participated in several national, public and private sector committees for public geoscience, mineral-related public policy, mining, and mineral exploration in Canada. Mr. MacDonald has led research projects, and has published extensively on a broad range of topics including geochemical exploration for metallic mineral deposits and the geology and economic potential of granite terranes.
As Erdene continues to fortify its position as a leader in the exploration and development of Mongolia's natural resources, the Company continues to build on its core strengths in the areas of technical knowledge, country experience, community development and government relations. Mr. MacDonald brings years of experience in each of these areas.
East Asia Minerals Announces New Director
VANCOUVER, BRITISH COLUMBIA--(Marketwire - Sept. 9, 2011) - East Asia Minerals Corporation (TSX VENTURE:EAS) announces the appointment of Peter Sederowsky as a director of the Company. Mr. Sederowsky is active in private equity and business development, and has directorship experience in companies on the London Stock Exchange, the Nasdaq/OMX Stockholm Stock Exchange, AIM (London) and the NGM (Stockholm). Presently Mr. Sederowsky is a senior partner at Skywalker Partners which advises in the sectors of mining, metals and energy, in Africa, Europe and Russia. He is also advisor to Mechel OAO, an important Russian company with businesses in mining, steel, ferroalloy and power.
PROGRAM BACKED FOR REDUCING CREDIT INTEREST
September 8, Ulaanbaatar, Mongolia /MONTSAME/ The cabinet has backed in principle a draft program on creating a market environment for reducing credit interest.
Related Ministers and heads of agencies have been ordered to approve the program and to take measures for the implementation.
They will introduce the program's implementation to the cabinet every year as well.
In order to fully realize the program, requirements have emerged to keep the inflation rate in a low and sustainable level, to ensure fair and proper conditions of commercial banks as well as the financial stability, to accelerate development of the capital market and to improve the infrastructure and legal environment for the sector.
The program will be implemented from the present through 2013, and it is calculated the inflation rate will be decreased coming down to at least nine per cent within this year, eight per cent--in 2012, and five per cent--in 2013.
September 8, Ulaanbaatar, Mongolia /MONTSAME/ At the cabinet meeting held on Wednesday, September 7, the Minister of Finance S.Bayartsogt gave a report on the execution of the master budget of Mongolia for the second quarter of 2011.
According to him, the balanced gross revenue of the master budget reached MNT 1,926,0 billion by the executions of first six months, and the revenue plan overfulfilled by MNT 380.0 billion or 24.6 per cent, showing an increase by MNT 686.4 billion or 55.4 per cent against the previous year.
The total expenditure of the master budget by the first half of this year increased by MNT 461.1 billion or 32.8 per cent against the previous year, with the execution of money of MNT 1,868,2 billion or 78.3 per cent at the planned money of MNT 2,385,3 billion.
September 10 (news.mn) Mongolia will borrow USD 20 million from the Asian Development Bank under an agreement reached on Friday. The agreement was signed by Finance Minister S.Bayartsogt and the permanent representative of the Asian Development Bank to Mongolia, Robert Schoellhammer.
The loan will fund higher education reform projects in Mongolia, including efforts to meet international standards and train professionals for high-demand jobs.
The money will also pay for online training centers, improving training facilities, establishing distance-learning centers in the countryside, and research in the fields of engineering and agriculture.
September 6 (Blake Dawson) --
Ø The Victorian Court of Appeal has refused to enforce a Mongolian arbitration award, on the basis that the award debtor was not a party to the arbitration agreement.
In a successful appeal from the first enforcement decision under the International Arbitration Act 1974 (Cth) since the 2010 amendments, the Victorian Court of Appeal has refused to enforce a Mongolian arbitration award, on the basis that the award debtor was not a party to the arbitration agreement. The Court held that the award creditor bears the prima facie evidential onus of proving that the award debtor was a party to the arbitration award.
Altain Khuder LLC, a Mongolian mining company, entered into an Operations Management Agreement (OMA) with IMC Mining Inc (IMC Mining), a company registered in the British Virgin Islands. The OMA contained an arbitration clause, requiring disputes to be referred to arbitration in Mongolia. IMC Aviation Solutions Pty Ltd (IMC Solutions) was a company registered in Australia, and was part of the same group of companies as IMC Mining. The OMA did not name IMC Solutions as a party, or make any express reference to IMC Solutions.
A dispute arose under the OMA, in respect of which Altain Khuder commenced arbitration proceedings against IMC Mining, which in turn filed a counter-claim. Neither the claim nor counter-claim made express reference to IMC Solutions. No representatives of IMC Mining (nor IMC Solutions) attended the arbitration. The arbitral tribunal in Mongolia found in favour of Altain Khuder, and made orders that IMC Mining pay specified sums to Altain Khuder, and that IMC Solutions "on behalf of" IMC Mining pay the sums charged against IMC Mining pursuant to the award.
The Khan-Uul District Court, Mongolia, verified the award.
Croft J enforces the award
Altain Khuder filed a motion for enforcement of the award in the Victorian Supreme Court against both IMC Mining and IMC Solutions, pursuant to the International Arbitration Act 1974 (Cth) (Act). The hearing was conducted ex parte, and Croft J made orders for enforcement of the award against both companies. IMC Solutions brought an application to set aside the orders which related to IMC Solutions, on the basis that it was not a party to the arbitration agreement. The application was heard and dismissed by Croft J.
Croft J held that the award creditor is not required to prove as a threshold issue that a foreign arbitral award exists which is binding on the parties to the applicable arbitration agreement. He held that the onus of proving any of the defences against enforcement is borne by the person resisting enforcement, and that onus is a "heavy" one, in light of the pro-enforcement policy of the Act and the New York Convention.
Croft J found that IMC Mining and IMC Solutions acted as a form of common enterprise and were for all intents and purposes treated as the same entity. He found that it was more probable than not that IMC Solutions was aware of the arbitration proceedings and therefore was able to present its case. Croft J concluded that IMC Solutions did not discharge the onus of proving the applicable defence under section 8(5)(c) of the Act, being that it did not receive proper notice of the proceeding or an opportunity to be heard.
Court of Appeal decision refusing to enforce the award
The Victorian Court of Appeal, comprising Warren CJ, Hansen JA and Kyrou AJA, overturned Croft J's decision, and set aside the orders for enforcement against IMC Solutions, in IMC Aviation Solutions Pty Ltd v Altain Khuder LLC  VSCA 248.
Onus of proof
The majority of the Court (Hansen JA and Kyrou AJA) held that to invoke the Court's jurisdiction to enforce a foreign award, the award creditor must establish the following three matters on a prima facie basis:
1. An award has been made by a foreign arbitral tribunal granting relief to the award creditor against the award debtor;
2. The award was made pursuant to an arbitration agreement; and
3. The award creditor and the award debtor are parties to the arbitration agreement.
Where the award and arbitration documents on their face establish that the award debtor was a party to the arbitration agreement, as would be the usual case, the evidentiary onus will be discharged. In unusual cases such as the present one, to discharge its burden, the award creditor must lead additional evidence about the liability of the award debtor.
Their Honours held that once the award creditor establishes a prima facie entitlement to an order enforcing the award, in order to resist enforcement, the award debtor bears the onus of establishing one of the defences in section 8(5) or 8(7) ofthe Act (these reflect the defences in Article V of the New York Convention). Consistent with Dallah Real Estate and Tourism Holding Co v Ministry of Religious Affairs of the Government of Pakistan  1 AC 763 (Dallah), where the award debtor claims not to be a party to the agreement, the award debtor could seek to rely on the defence under section 8(5)(b) that the arbitration agreement is not valid.
Warren CJ in a minority judgment considered that the award creditor bears the full legal onus of proving, on the balance of probabilities, that the award debtor is a party to the arbitration agreement. Once the award creditor has proven this then the award debtor bears the onus of establishing one of the specified defences in section 8(5) and 8(7).
The Court emphasised that in all but the most unusual cases, applications for enforcement will involve only summary procedures.
Standard of proof when resisting enforcement
Their Honours found that Croft J erred in his finding that "clear, cogent and strict proof" is required to resist enforcement under the Act. They held that there was nothing in the Act to indicate that the standard of proof should differ from the normal civil standard, being the balance of probabilities. They noted that what may be required in each case to produce proof on the balance of probabilities will depend upon the nature and gravity of what is sought to be proved.
Outcome – IMC Solutions is not a proper party
Hansen JA and Kyrou AJA decided the application for enforcement on the evidence (Warren CJ preferred to remit the matter to the trial division). Their Honours concluded that IMC Solutions was not a proper party to the arbitration, and determined that the enforcement order should not have been made.
Inter partes or ex parte?
Supreme Court Practice Note No. 2 of 2010 provides that ex parte proceedings are the proper process for bringing applications for enforcement of arbitral awards. However, their Honours considered that ex parte proceedings were not appropriate where the award debtor is not named in the arbitration agreement. In such circumstances, where the award creditor will be required to adduce evidence of the liability of the award debtor, inter partes proceedings are more appropriate.
Approach of courts to enforcement proceedings
Hansen JA and Kyrou AJA commented that in enforcement proceedings, the Court will not act simply as a rubber stamp. Their Honours observed that "at all stages of the enforcement process, courts perform a judicial function and, accordingly, must act judicially. To act robotically is not to act judicially."
The Court recognised that the objects of the Act, including the policy of pro-enforcement, were relevant to interpreting the legislation. However, the Court emphasised that it must follow Australian rules of statutory interpretation, and it would be inappropriate to prefer an interpretation of the Act which is not supported by the wording used by Parliament, simply for the purpose of giving effect to the policy of pro-enforcement. The Court commented that the decisions of overseas courts may be of assistance in interpreting the Act, given the advantage of countries consistently interpreting legislation which gives effect to an international convention, however they noted that any differences in the domestic legislation would be important. Nevertheless the majority judgment carefully considered the international jurisprudence on the issues before them and considered their approach to enforcement to be consistent with the House of Lords decision in Dallah.
Unusually, the Court of Appeal was required to consider to what extent the award creditor was required to establish that the award debtor was a party to the arbitration agreement, as on its face there was nothing to show that IMC Solutions was a party to the arbitration agreement. Given the facts in this case, the Court held that Altain Khuder could not prima facie show that IMC Solutions was a party.
This decision departs from the approach of most foreign courts to the issue of whether the award debtor is a party to the arbitration agreement, for the purposes of enforcing a foreign arbitral award pursuant to the New York Convention. In most foreign jurisdictions, this issue is not treated as a threshold issue, but rather as a defence under the equivalent provisions to section 8(5)(b) with the onus on the award debtor. In this case, the Court also held that IMC Solutions had established that the arbitration agreement was not valid pursuant to section 8(5)(b).
Although the Court of Appeal has indicated that it will not enforce foreign arbitral awards in a robotic manner, it was the particular facts of this case which warranted the Court's departure from the usual practice that enforcement proceedings involve only a summary procedure.
Practical issues to consider
What this case does show is the importance of considering which parties should be covered by the arbitration agreement and whether there are related parties that should be included. It also shows that in all but the most unusual cases, arbitration awards will be enforced in Australia on award debtors regardless of where the award was made or under what law.
ULAN BATOR, Sept 8 (Reuters) - Mongolia's booming economy could be derailed by a slowdown in Chinese demand for its extensive mineral reserves but disruptive government policies present a greater risk, especially as 2012 polls near, investors and experts said on Wednesday.
The landlocked nation is expected to maintain double-digit growth for at least the next decade as foreign capital floods in, not only to develop some of the world's most promising deposits of coal, copper and gold, but also to provide infrastructure, services and training.
"This place can do really well unless the government screws it up," said Edward Rochette, former vice-president of Canada's Ivanhoe Mines , now serving as chairman of the East Asia Minerals Corporation. "The biggest risk in my opinion is government interference.
"The second risk is if the Chinese quit buying -- if they quit buying the whole thing collapses."
Mongolia's democratic government has been under pressure to use the dividends from its mining sector to enrich its population, half of which still lives under the poverty line. But investors and parliamentarians alike have been worried that populism could prevail over prudence.
Many still recoil at the memory of Mongolia's decision to impose a windfall tax on mining profits in 2007, as politicians sought to use soaring copper prices to raise the cash needed to meet promises made to voters in 2004.
The law was revoked in 2009, paving the way for a landmark investment agreement granting 66 percent of the massive Oyu Tolgoi copper-gold deposit to Ivanhoe, whose biggest shareholder is global miner Rio Tinto , with a stake of 46.5 percent.
But Mongolia's political parties have still been quick to offer cash payments to citizens, putting them under pressure to squeeze as much out of their mines as possible. At the 2008 parliamentary elections, the Mongolian Democratic Party's offer of 1 million tugriks (around $1,200) for every citizen was quickly trumped by the Mongolian People's Revolutionary Party, which offered an even higher 1.5 million tugriks. The MPRP won.
"It is easier for politicians to promise cash than to come up with very clever policies to create jobs," said Sanjaasuren Oyun, former foreign minister and now a member of parliament for the centrist Civic Will and Green Party.
The 2008 promise will require $4 billion in total spending, the same as the budget for this year. The cash-strapped government has already squeezed "prepayments" from the Oyu Tolgoi and Tavan Tolgoi projects in order to fulfil its election promises but so far they have not been enough.
Last month, Mongolia signed a deal with the Aluminium Corp of China Ltd to supply $250 million worth of coal from Tavan Tolgoi, partly to raise the money required to meet its 2008 pledges.
"There are so many needs and it is so tempting for the government to go on a spending spree as soon as the money comes in," Oyun said.
Investors are also concerned by a new law that forbids mining in forests or river basins. Dozens of projects are in a state of legal limbo, with the government unable to raise the millions of dollars required to compensate them.
Many expect the law to be revoked. Like the windfall tax, it was submitted by backbenchers and passed despite opposition from the government.
"It is not unusual that some of this legislation is passed despite government not supporting it," Oyun said. "I remember the deputy prime minister and the ministry of finance were fiercely opposing the legislation, saying that it would deter foreign investment, but it was passed."
The state accounts for about 35 percent of the Mongolian economy, up from around 15 percent in 2003, and investors said the government's growing role has made the economy more vulnerable to misguided populist policies.
"There is a tendency to make knee-jerk policy decisions in response to complaints from environmental groups or nationalists, as has happened with the environmental law," said a representative with a foreign mining firm.
Oyun said Mongolian policies have fluctuated very consistently in line with global commodity prices.
"Ten years ago mining legislation was very liberal and the mining sector was business as usual. Please provide jobs, pay taxes, thank you very much."
"Only when prices started going up did things start to change and we swung from having very liberal policies to more left-wing policies. This was a natural reaction."
China pushes for construction of Northeast Asia free trade area
CHANGCHUN, Sept. 7 (Xinhua) -- China is seeking to push forward the establishment of a free trade area among Northeast Asian countries in order to further boost the economic and trade exchanges in the region, a senior political advisor said Wednesday.
"All countries in Northeast Asia should make efforts in building a regional cooperative framework and exploring the construction of a free trade area under the backdrop of global and regional economic integration," said Bai Lichen, vice chairman of the National Committee of the Chinese People's Political Consultative Conference (CPPCC).
Bai made the remarks at the ongoing 7th China Jilin Northeast Asia Investment and Trade Expo in Jilin's capital city Changchun.
The six-day trade fair that opened on Tuesday is expected to attract 50,000 exhibitors and visitors from Japan, Russia, the Republic of Korea, (ROK), the Democratic People's Republic of Korea (DPRK), Mongolia and other regions.
Japan, Russia's far east, the ROK, the DPRK, Mongolia and China's provinces of Heilongjiang, Jilin, Liaoning and northeastern part of Inner Mongolia Autonomous Region make up Northeast Asia, which covers a combined area of nearly 9 million square km and is home to about 300 million people.
Combined gross domestic product (GDP) of Northeast Asia accounts for about one fifth of the world total and more than 70 percent of that of Asia.
In spite of its position in the world economy, economic cooperation and exchanges in Northeast Asia remain at a low level compared with other regions such as East Asia or Southeast Asia, Bai said.
"Northeast Asian countries and nations used to be isolated historically and lacked an efficient environment for mutual communication," Bai said.
"The foundation for economic and trade cooperation among these countries remains unstable," he added.
Bai proposed to push forward the exchanges among Northeast Asian countries by giving priority to the economic and trade cooperation while setting aside ideological differences.
"Countries with more economic correlation should lead in expanding bilateral and multilateral cooperation in order to push forward cooperation in the whole region," Bai said.
Jiang Zengwei, Vice Minister of Commerce, said at the expo that the world economy is recovering from crisis but with difficulties and uncertainties.
"Under these circumstances, it is more important to further promote the regional cooperation in Northeast Asia," Jiang said.
China has been making efforts in enhancing bilateral economic ties with countries in the region over the years.
In June, China and the DPRK jointly kicked off construction of the Rason Economic and Trade Zone.
Meanwhile, China is speeding up construction of highways and railways that link China with Russia, Mongolia and the DPRK.
Statistics from China Customs show that trade volume between China and Japan has jumped 19 percent to 162 billion U.S. dollars in the first half of the year, and China and the ROK have witnessed trade growth of 20.5 percent to 118 billion dollars during the same period.
Mongolia is famous for many things, and being a hotspot of construction activity is not among them - but perhaps it should be. Thanks to a booming economy, the country is developing at a rate of knots. Building finds out why it's well worth braving the cold
September 9 (Building.co.uk/Careers) Must be prepared to travel. If you want to find the best emerging property markets in the world, that is. And as you plan your itinerary on the global map, you can firmly put a pin on Mongolia. Yes, Mongolia.
It may sound like a bit of a left field suggestion, but just a little investigation into Mongolia's resources and the predicted future of its economy and real estate schemes can present an extremely compelling argument.
Lee Cashell, the man behind investment company Asia Pacific Investment Partners (APIP), sets out the situation: "We have been doing business in Mongolia for nine years and started the first real estate business here, called Mongolia Properties. At that time, lots of Canadian companies were setting up shop and looking for mining opportunities. It was just a trickle of interest back then, but as people discovered more minerals and commodities prices rocketed, the trickle has turned into a flood.
"In 2008, things moved from the exploration phase to the mining phase, which means that the economy is now looking at growing 15-25% a year, which could make Mongolia one of the world's fastest growing economies. Plus it's a democratic country, with low tax rates, no capital gains tax and no high rental yields - possibly one of the best places to invest in property in the whole world."
Big UK firms such as Foster + Partners are already persuaded, and the architect is in discussions with APIP about two projects - a 50,000m2 residential and hotel scheme with an anticipated $100m-plus sales revenue, and a 200,000m2 mixed-use complex with expected proceeds of $200m.
So what opportunities might await the adventurous in the country of Genghis Khan?
A gold mine
Mongolia is seen by many as the scene of the next construction rush, according to Cashell. Since the discovery of gold and copper five or six years ago, the country's GDP has been growing at one of the highest rates in the world. Foreign direct investment has soared from $25m in 1997 to $344m in 2006 and a colossal $1bn (£620m) in 2010. The country has over 8,000 different deposits of 440 minerals, all adding to its financial kudos and stability.
Unlike many emerging markets, where foreign companies must weigh up tempting opportunities against the difficulties of doing business, Mongolia has a stable political system and few problems with corruption. According to the World Bank, Mongolia ranks 73 out of 183 countries in the world for ease of doing business - higher than any of the BRIC countries. It is understood that this stems from the fact that, following a period of Soviet influence up until the early nineties, Mongolia went through a transition period from communist nation to free-market democracy. The current president, Tsakhia Elbegdorj, has pledged to continue fighting corruption and uphold freedom of speech and of religion. And, according to the CIA World Factbook, Mongolia has no "ongoing disputes or conflicts" with any other country.
In terms of construction opportunities, property development in Mongolia is expected to be one of the fastest growing sectors over the next three to five years, according to APIP. The price of property in Ulan Bator, Mongolia's capital, has rocketed, says Cashell, due to an existing shortfall in supply. At an apartment building called The Regency Residence that APIP sold to Property Frontier, a London broker, individual flats that sold for $800/m2 off-plan in 2007 are now being sold for $2,200/m2 in the secondary market to wealthy Mongolians.
Office space is also at a premium. "The arrival of multinational companies such as Ernst & Young and PwC in Mongolia is driving the demand for quality office space," says a spokesperson for APIP. "Demand for high-end residential units has increased hugely due to the large number of expats arriving in Mongolia in pursuit of mining jobs or other business opportunities associated with the country's increasingly renowned economic growth. Combine this with very limited supply in the capital, it is expected there will be a severe imbalance between available units and demand in the coming years."
So - the work is there. But how easy is it for UK construction workers to join the hordes? Cashell says that he is already having discussions with foreign construction companies and architects and that there are certainly opportunities available - especially given the shortage of construction professionals in Mongolia.
Due to the nature of the work project managers, masterplanners, architects and anyone with legal or accountancy knowledge are in particularly high demand. Also sought after is anyone with experience designing and building condominium-style residential units where there are facilities such as a concierge, lobby, food shop and gym all contained in one space. Temperatures in Mongolia can fall to -30ºC in the winter - and so another area of specialist knowledge that is in demand is of the kind of housing that offers residents everything they need without having to go outside - is another key skill required.
The cold is one challenge that has a significant impact on construction companies - it means that there is a short building season in the country. While a development would be completed in 18 months in a warmer climate, it is likely to take nearer two to three years in Mongolia.
That aside, Cashell says that now is a good time for UK firms and individuals to take a trip out east: "We have one of the biggest land banks in the whole country," he says. "And we are seeking UK construction partners and individuals to work with on this. We have about 10 years' worth of development projects in our pipeline so there are long-term opportunities. We keep getting larger, which means we are outgrowing the skills in our little construction company.
"And since 1990 there has been very little investment in infrastructure. Now the government is getting richer through the revenue from mining, there will be opportunities here too with roads, airports, power stations. And the school and healthcare facilities need a lot of investment too - which in turn will create yet more construction opportunities. Now is the time."
Mongolian government takes action on rare archeological find
September 9 (Mongolia-Web) At the Government meeting on Wednesday it was decided that the state will take custody of objects discovered by a team of Mongolian and Kazakh archeologists working in Bayannuur soum of Bulgan aimag. The archeologists recently unearthed what they believe is the tomb of a significant person of nobility. More than 200 objects were recovered. The objects will be sent to a museum.
The Government also decided to establish a "protection zone" around the site, and to make it more accessible to tourists.
Rare archeological find in Mongolia's Bulgan aimag
A joint expedition of Mongolian and Kazakh archeologists has reported finding a rare tomb after an excavation in Bayannuur soum of Bulgan aimag. The tomb may date from the sixth or seventh century. The tomb is contained in a 40-meter long corridor 13 meters below ground. It is believed to be the tomb of a significant person of nobility. Drawings on the wall are well preserved. The wooden doors to the tomb contain golden decorations and have also been well preserved. Archeologists say they are amazed that the doors have not rotted. The remains of the person entombed there have been recovered, along with about 270 other objects. Police are guarding the site.
September 7 (PennState) An endangered species of horse -- known as Przewalski's horse -- is much more distantly related to the domestic horse than researchers had previously hypothesized, reports a team of investigators led by Kateryna Makova, associate professor of biology at Penn State. The scientists tested the portion of the genome passed exclusively from mother to offspring -- the mitochondrial DNA -- of four Przewalski's horse lineages and compared the data to DNA from the domestic horse (Equus caballus).
They concluded that, although previous scientists had assumed that Przewalski's horse and the domestic horse had diverged around the time that horses were domesticated -- about 6,000 to 10,000 years ago -- the real time of the two species' divergence from one another is much more ancient. The data gleaned from the study also suggest that present-day Przewalski's horses have a much more diverse gene pool than previously hypothesized. The new study's findings could be used to inform conservation efforts to save the endangered horse species, of which only 2,000 individuals remain in parts of China and Mongolia, and in wildlife reserves in California and the Ukraine.
The paper will be published in the journal Genome Biology and Evolution on a date that has not yet been determined. An early online version of the paper, titled "A Massively Parallel Sequencing Approach Uncovers Ancient Origins and High Genetic Variability of Endangered Przewalski's Horses," is on the journal's website at http://gbe.oxfordjournals.org/content/early/recent.
Przewalski's horse -- a stocky, short-maned species named after a Russian explorer who first encountered the animal in the wild -- became endangered during the middle of the last century when the species experienced a population bottleneck -- an evolutionary event in which many or most members of a population or a species die.
"Sadly, this bottleneck was the result of human activity," Makova explained. "Przewalski's horses were hunted down for food, and their natural habitat, the steppes, were converted into farm land so the horses basically had nowhere to live and breed. By the late 1950s, only 12 individual horses remained." Makova said that because conservationists have made noble efforts to rescue this dwindling population, the present-day population has grown to 2,000.
In a study that had never been attempted by previous scientists, Makova and her team analyzed the complete mitochondrial genomes from four female lineages that currently survive within the Przewalski's horse population. They first determined that the mitochondrial genomes of two of the maternal lineages actually were identical, thus narrowing the genetic pool to three maternal lineages. Then, they tested their data against the prevailing hypotheses about the genetic history of Przewalski's horse. According to one hypothesis, Przewalski's horse evolved first, with the domestic horse later evolving as a derivative species. According to another hypothesis, the genetic story is the opposite: the direct ancestors of the domestic horse were first on the evolutionary scene, with Przewalski's horse evolving and forming a new species later. According to the former hypothesis, the divergence of the two species had to have occurred around the time of horse domestication -- about 6,000 to 10,000 years ago.
"My team discovered that neither scenario is likely," Makova said. "Instead, our data suggest that Przewalski's horse and the domestic horse are much more distantly related. In fact, they probably shared a common ancestor as far back as 160,000 years ago, long before horse domestication. This is a major shift in our understanding of the history of Przewalski's horse." To bolster their conclusions, the team also sequenced a portion of the Przewalski's horse's nuclear DNA -- the part of the genome passed to offspring from parents of both sexes. In addition, they sequenced a portion of the genome of a third species known as the Somali wild ass, the wild progenitor of donkeys. Makova explained that adding this information allowed her team to "calibrate the molecular clock of horse evolution," thus narrowing the window of time for sub-species divergence and confirming her team's suspicions that horse domestication and the emergence of Przewalski's horse were two very distant and independent events.
Makova added that, although the two species diverged well over 100,000 years ago, they have interbred periodically since then. "Also fortunate is the fact that conservationists in the second half of the 20th century realized how grave the situation was for the Przewalski's horse. They not only began new breeding efforts and built wildlife reserves in California and the Ukraine, but they also made sure to avoid inbreeding among close relatives," Makova said. "For this reason, the present-day population has managed to remain healthy by retaining substantial genetic diversity."
Makova and her team hope that their findings will help guide future conservation efforts for the endangered horse species. "The idea is to gradually reintroduce Przewalski's horse into the wild," Makova said. "For example, now that we have a more thorough understanding of the different maternal lineages, we can diversify the animal's gene pool even more. This will be a way to ensure that members of wild species suffer as few recessive diseases as possible and have the best opportunity to flourish once they are introduced into the appropriate habitat."
In addition, the researchers hope to further horse-evolution studies by sequencing the genomes of additional breeds of domestic horses, and, eventually, by sequencing the complete genome of Przewalski's horse. "More genetic data means a more precise evolutionary clock," Makova explained. "The more we know, the more we can adjust the time frame for when Przewalski's horse and other horses diverged from their common ancestor." Makova added that she and her team also would like to identify the genes that code for the physical differences between Przewalski's horse and the domestic horse. "It's always been a curious question why Przewalski's horse is so much shorter and stockier in stature than the domestic horse, and also why Przewalski's horse has a shorter, thicker mane," Makova said. "A deeper genetic analysis and subsequent experiments could reveal the very genes that determine differences in appearance between the two species."
This research is supported by the National Science Foundation and the National Institutes of Health.
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