Tuesday, September 6, 2011

[CPSI NewsWire: Winsway Reports Interim Results]

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 5, 2011



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Winsway: Interim Report 2011

September 5, Winsway Coking Coal Holdings Limited (HK:1733) --

Management Discussion and Analysis of Financial Conditions and Operating Results

The following discussions and analysis should be read in conjunction with the financial statements of Winsway Coking Coal Holdings Limited (the “Company”) and its subsidiaries (the “Group”, “Winsway”, “we” or “us”) and the notes thereto. The Group’s financial statements have been prepared in accordance with International Financial Reporting Standards.

I.             Overview

In the first half of 2011, the Group continued to achieve significant growth in its business by establishing new logistics facilities, increasing its processing capacity, improving its service platform and diversifying its business. The construction of a total of three new railway logistics centres has been completed, including two border-crossing terminals located in Ceke and Erlianhaote respectively and a transfer centre located in Jining. With the completion of the new railway logistics centres, the Group will be able to enhance its logistics handling capacity and at the same time reduce its transportation costs. The Group’s integrated logistics platform for importing global coking coal resources is maturing.

In addition to the new railway logistics centres, the construction of three new washing plants in Jining, Longkou and Yingkou has also been completed or will soon be completed, each with a coal processing capacity of 4 million tonnes per year. The setting up of facilities at coastal ports to receive seaborne coal also supplements the Mongolian coal business of the Group. The Group has further enlarged its customer base through exporting coking coal to Japan, Korea and Taiwan.

The Group has also taken a further step in the capital market by issuing 8.50% senior notes due 2016 in the aggregate principal amount of US$500 million (“Senior Notes”) and listed on the Singapore Exchange Securities Trading Limited in April 2011. The proceeds from the issuance of these Senior Notes will provide the Group with sufficient funding for purchasing rolling stock and other transportation-related vehicles and investing in railway-related infrastructure and upstream resources.

Purchase of rolling stock and other transportation-related vehicles in future will allow the Group to further secure railway transportation capacity which is a key element to the Group’s logistics services.

By investing in upstream resources, the Group will be able to secure procurement and enhance its profit potential.

In 2011, the Group was also among the 25 listed companies which were awarded The Excellence of Listed Enterprise Awards by Capital Weekly, a reputable Hong Kong financial magazine of South China Media Group, for their high reputation among investors and respectable performance which stood out from thousands of listed companies in Hong Kong. The assessment criteria include the performance, business governance, corporate governance, investor relations, social responsibilities and other aspects of a company as a whole. In addition, the Group’s 2010 annual report was awarded the Bronze award by the “League of American Communications Professionals”, whose judgment is based upon an evaluation point system measuring the first impression, cover design, letter to shareholders, report narrative, report financials, creativity, message clarity and information accessibility of a report. This is a recognition of the Group’s achievement in information disclosure and transparency.

In the first half of 2011, our revenue increased by 37.00% to HK$6,705 million from HK$4,894 million for the same period last year. We sold a total of 3.85 million tonnes of Mongolian coal and 1.46 million tonnes of seaborne coal in the first half of 2011. In addition, we also sold 0.19 million tonnes of coke for a total sales of 5.5 million tonnes. Our net profit increased from HK$602 million for the six months ended 30 June 2010 to HK$811 million for the six months ended 30 June 2011, representing an increase of 34.72%.

On a per-tonne basis, we achieved a unit net profit of HK$153 in the first half of 2011 versus HK$142 in the first half of 2010, which represents an increase of 7.75%.

Link to report


Mongolia: Will Peabody Get More, Less, Or The Same Of Tavan Tolgoi?

September 4 (Seeking Alpha) The Tavan Tolgoi coal deposit in Mongolia is the second largest coal deposit in the world (the Shengi deposit in China is the largest). When on June 29, 2011, I published my first article about Mongolia, the rumors about what companies would win the right to the western portion of Mongolia's Tavan Tolgoi were already flying. Tavan Tolgoi altogether, east and west, has an estimated 6.4 billion metric tons of coal reserves. 

The government of Mongolia decided to sell the western portion of the deposit which for ease I will call "Tavan Tolgoi West" to a consortium of companies. The government wishes to sell this large deposit to a consortium rather than a single entity for various reasons:

a) because Mongolia's two significant and very long borders are Russia and China
b) 33.2% of imports into Mongolia come from Russia; 30.5% of imports into Mongolia come from China according to the CIA World Factbook
c) 84.8% of exports from Mongolia go to China according to the CIA World Factbook
d) part of the bidding process for Tavan Tolgoi West included submissions of how much the winning consortium would commit to invest in building up Mongolia's transport infrastructure (i.e. rail lines to Russia, China, and beyond). To understand this, one can look at this 
Washington Post map of Mongolia's current and future planned railways.\

On July 5, 2011, we thought we knew the winners of the bidding for Tavan Tolgoi West. Initial indications were that the winners were China Shenhua (CSUAY.PK) with a 40% stake, Peabody (BTU) with a 24% stake, and a Russian-Mongolian consortium splitting the remaining 36%. But, by July 6, one day later, there were indications that the announced decision was not final.

The biggest producer and consumer of coal is the same country: China.

Seeking Alpha author Mark Anthony has written this article that highlights China's future energy needs, and this comment specifically about China's relationship with Mongolia's coal supply:

China is already looking into Mongolia (the Republic of Mongolia, not just Inner Mongolia) to import coal. But Mongolia exported 12M tons of coal to China in 2010. That's a big amount for Mongolia, but a drop in the bucket for China's 3.4 BILLION TONS annual demand. It is simply lacking in all aspects: the scale of coal mines, and the road system, making it impossible for Mongolia to quickly ramp up its coal export to China.

Let's face it, China, burning 3.4 BILLION TONS of coal a year, and asking for 10% more each year, simply could not find enough extra coal supply any where in the world you look. Coal is bullish globally.

BTW, China has just exceeded USA in electricity produced and consumed. China's problem is its electricity generation rely too heavily on coal, instead of diversified like the USA.

If you visit many Chinese cities, you see the countless air conditioning units hanging outside windows of individual resident households. People have become wealthy enough to purchase such air-conditioning units to provide them animal comfort. But such units are energy inefficient in comparison with centralized air-conditioning for the whole buildings, which is virtually non-exist in most new Chinese buildings. That is just one part of Where China's insatiable energy appetite came from.

Remember China has nearly 5 times the US population and yet still consumes about the same amount of electricity, meaning their people only consumes 1/5 of electricity of how much an average American consumes for animal comfort. So there is still a huge room for growth.

The Chinese might have the money to buy the same kind of comfortable living condition that Americans take for granted, but the world does not have enough resource to satisfy the demand.

This article in Coal Investing News also emphasizes China's bottomless need for coal and energy:

To put China’s demand in perspective, in 2010, China alone accounted for 48 percent of global market volume, up from 45 percent in 2009. Worldwide global coal demand is set to increase by 55 percent between 2007 and 2035 with non-OECD Asian countries (including China and India) will account for 95 percent of the projected increase in world coal consumption.

Meanwhile, July 31, 2011, came and Chinese newspapers were reporting that the deal for Tavan Tolgoi West's coal was only awaiting approval by Mongolia's President Elbegdorj

At the same time, Seeking Alpha author Peter Epstein began to seriously question why Peabody was involved in the bidding for Tavan Tolgoi West:

To reiterate my view from the article that I wrote a few weeks ago, assuming that Peabody controls 24% of 15mm tonnes of production in 5 to 7 years, that's only 3.6mm tonnes per year, with only two thirds of it coking coal! ... What on earth is Peabody thinking? They will spend the next 5 to 7 years running in place and burning cap-ex dollars for 3.6mm tonnes of production.

August 20, 2011 came and a China Daily reports the bidding process for Tavan Tolgoi West is open again:

[Mongolian President] Elbegdorj said on Aug 20 that because of the pressure of domestic public opinion, he could not support an earlier plan that gave Chinese company Shenhua Group Corp Ltd the largest share of the coal development project [at "Tavan Tolgoi West"], according to Kyodo News service.

Contrary to the "public opinion" stated in this article, local sources have explained simply that Russia was not happy with their allocation and cut off petrol supplies until Mongolia announced they would review the decision. Russian fuel supplies are important to Mongolia, and important leverage for Russia. 

Meanwhile, Peabody is moving forward in a joint bid with Arcelor Mittal (MT) to increase their coal production capability by purchasing MacArthur Coal (MACDF.PK) of Australia, although other bidders are still in the mix. In the last few weeks, Peter Epstein was anticipating this move while comparing MacArthur Coal (MACDY.PK) to SouthGobi Resources (SGQRF.PK).

Some of the hold-ups in a final decision on the development of Tavan Tolgoi West were indicated a result of pressure from the governments of South Korea and Japan to be included, or re-included, in the bidding process and ultimate consortium to develop Tavan Tolgoi West, as highlighted in this Thomson Reuters article:

Mongolia cleared up confusion over its auction of a block of its Tavan Tolgoi coal deposit on Thursday, confirming Japanese and South Korean bidders remained, the latter involving companies now revising their proposals... it was an oversight that the firms had not been confirmed on a short-list in late June despite being part of a Russian-led consortium.

The committee only sent notices to the firms leading the consortiums -- China's Shenhua, U.S. firm Peabody Energy and Russian Railway.

That sparked an outcry from the South Korean and Japanese governments.

While confirming the Japanese and Koreans were still part of the shortlist, Khurelbaatar added that the committee had been disappointed with their proposals.... He did not reveal whether Japanese firms Itochu Corp , Sumitomo Corp, Marubeni Corp and Sojitz Corp would do so.

With the Koreans revising plans, final results of the tender could be delayed by several more months. 

A lot more questions remain about what will happen to the Tavan Tolgoi West deposit. It is not known if the initial announcement will be left pat, or for Peabody stockholders if Peabody will be awarded a greater or lesser percentage (or any percentage at all) in Tavan Tolgoi West, if and when the company's initially indicated 24% stake is or is not modified.

Even while the above announcement that China's China Shenhua may not maintain the initially indicated 40% stake in "Tavan Tolgoi West", China's Xinhau news agency has just this past week indicated that Mongolia and China are entering a "golden age" in their relationship with "deepening friendly cooperation." However, a person with knowledge of the situation believes that most Mongolians do not like the Chinese and that government officials can either cut the Chinese allocation of Tavan Tolgoi or not get re-elected.

Meanwhile, Goldman Sachs (GS) and DeutscheBank (DB) are probably anxious for the matter of "Tavan Tolgoi West" to settle, as they have the lead on the IPO of "Tavan Tolgoi East" expected within one year. The IPO for the eastern portion of the Tavan Tolgoi deposit is estimated to raise $10 billion even while the Mongolian government still retains 50% of "Tavan Tolgoi East" and distributes 538 shares of "Tavan Tolgoi East" to all of Mongolia's citizens.

Mongolia, a county replete with natural resources and situated conveniently next to the country with the greatest growing need for natural resources in the world today (China), is in an ideal situation to grow its economy exponentially. Unlocking the value of the resources in the Tavan Tolgoi coal deposit - both east and west - will be a key step to increasing this nation's profile in the global investment community.

It is understandable that the government is carefully weighing all its options to finalize the correct choices for the future of "Tavan Tolgoi West" and the future of the nation with a lot of consideration given to its two large neighbors. Investors need to patiently wait for a confirmed final answer and understand the Mongolian government's concern to provide the best future possible for its people.

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in CSUAY.PKSGQRF.PK over the next 72 hours.

Additional disclosure: I am studying and considering investing in CSUAY.PK and SGQRF.PK, but am hoping to speak to the management of those companies to better evaluate them. I will post if and when I make a purchase in these companies.

Link to article


Oyutolgoi LLC to hold meeting

September 5 ( A regular meeting of the Representative Managing Council of Oyutolgoi LLC will be held this week. On the agenda will be plans to build a power plant at the mine.

A Government working group and Oyutolgoi LLC studied the feasibility of building a single power plant for both Oyutolgoi and Tavantolgoi mines, but ultimately it was decided that it would be better for each mine to have its own power plant of 300 MW

Link to article


Mogi: lazy reporting at best

Mongolian IPOs: hot or cold?

September 5 (FT) Resource-rich Mongolia is considered a hot story among Asian investors, but an analysis of the IPOs of companies working in Mongolia shows their stocks have struggled, both in Asia and abroad.

The next test of equity investor demand will be the planned flotation of coal miner Erdenes Tavan Tolgoi in London, Hong Kong and Ulan Bator. If it goes ahead, the IPO will usefully expand the small band of Mongolia-linked companies in which international investors can actually put their money.  

If the shares subsequently do well, it could help reassure investors who have watched the rather patchy post-IPO performance of other Mongolia-linked companies.

Only one of the three Hong Kong listings of companies with substantial operations in the Mongolia is up since listing, according to Thomson Reuters data. Only one of the five listed elsewhere has gained, and that one company has fallen by more than 50 per cent in the year to date.

The Mongolian Mining Corporation, listed last October in Hong Kong, is up 17.8 per cent from its listing last October. Centerra Gold, a Toronto-listed company with operations at Mongolia’s Boroo mine, is up 5.5 per cent year to date. But exploration companies working in Mongolia have had a tougher time of it recently.

Petro Matad, a London-listed oil explorer, is up 60 per cent since listing in 2008, but has fallen so far this year 52.1 per cent. Both of the Australian-listed mining companies with substantial interests in Mongolia are down since listing.

The other company listed in Canada, uranium explorer Khan Resources, is down 76.5 per cent since listing in 2006, including a fall of 36.5 per cent year to date.

In Hong Kong, Winsway Coking Coal is down 53 per cent this year, driven in part by a Moody’s report this July that raised questions about the company’s negative free cash flow.

The number of Mongolia-related companies listed remains small, and analysts say that Tavan Tolgoi’s IPO should be successful despite the overall uneven performance of other Mongolian-related resource groups. Mongolian Mining Corporation is the closest comparison to Tavan Tolgoi, as the two coking coal companies mine the same licence area, says one Hong Kong-based analyst.

“MMC is probably three to four years further advanced relative to [Tavan Tolgoi], so we think there’s a blueprint for [Tavan]  in MMC,” says the analyst. “I think the valuation will read through”.

Mongolia’s resource riches are well-flagged, but investors, it seems, have been slower to jump on the bandwagon. The excitement now surrounding Tavan Tolgoi’s listing suggests the success of MMC broke the ice.

Yet the uneven returns of riskier exploration companies investing in Mongolia suggests it’ll take a few more winners to convince the world that Ulan Bator, the world’s coldest capital, is now a hot story.

Link to article


Mongolia approves additional rail links to China

September 5 (The Asset) Mongolia intends to build three additional rail links to China in addition to the existing railway that now runs from Russia to China through Mongolia, Khurelbaatar Chimed, minister of Mongolia and chief of the cabinet office, disclosed during his visit to Hong Kong.

Construction of the additional north-south rail link, he adds, will be undertaken simultaneously as the multi-billion dollar west-to-east line – from Talvan Tolgoi to Sainshand and into the Russian port of Vladisvostok – outlined by the government in its railway masterplan and approved by parliament last year.

Chimed led a delegation of provincial governors from Mongolia in a three-day official visit to the territory. The visit is intended as an educational capital market immersion dialogue to help local government officials better appreciate the landmark steps to be taken in the coming months by Mongolia including the planned listing of Erdenes-Talvan Tolgoi LLC (ETT), the holding company of the Tavan Tolgoi coal field, regarded as the world’s second largest coal field.

Despite recent reports, Chimed also denied that a final decision has been made on both the investor list for the West Tsankhi block of Tavan Tolgoi or the timing and venues of the planned ETT’s initial public offering(IPO). Some bankers have predicted the IPO could raise as much as USD10 billion.

Negotiations have just started. Currently, we are negotiating with investorsShenhua Group, Peabody Energy, a consortium of Russian, Korean and Japanese companies,” he explains. “The government is also waiting for parliament on how it wants to proceed to structure the needed railway infrastructure.” Chimed, who is the chief negotiator for the Talvan Tolgoi development, notes that the government is also in discussion with several investment banks on how the IPO should proceed.

Chimed says that moving forward on Talvan Tolgoi has been deliberate because it is the government’s intention to develop this into a world-class mine. “We also would like to see how serious these investors are; we want to see good proposals.” He points out that the government is treating Talvan Tolgoi as one project. “What happens on the eastern part (ETT) will have an impact on the western part (West Tsankhi block) and vice versa.” He declined to give a timeline on when negotiations on either side are to be completed nor a timeline on when the IPO is likely to come to the market.

Earlier, Japanese and Korean bidders have expressed dissatisfaction at being excluded from the discussions. Chimed suggests that the Japanese and Korean proposals did not include coal production and other activities. “We do not want Mongolia to be just a raw material supplier,” he emphasizes. “If they want to participate, they need to come up with good proposals; if they don’t, Mongolia has every right to reject them.”

Chimed says Talvan Tolgoi is critical to the country. It is therefore important that investors who participate have a strategic objective to help the government develop it into a world-class mine. “We also want to see high efficiency and productivity and help develop the country’s infrastructure; we also expect [investors to focus] on the environment and safety of the highest standard.”

Link to article


HH the Amir visits Mongolia

ULAANBAATAR, Mongolia, Sept 5 (KUNA) -- His Highness the Amir Sheikh Sabah Al-Ahmad Al-Jaber Al-Sabah, who is currently visiting Mongolian's capital Ulaanbaatar, received at his residence on Monday the Mongolian President Tsakhia Elbegdorj.

The two leaders exchanged cordial talks that mirrored deep and good relations as well as enhancing cooperation in different fields between the two nations.

H.H. the Amir extended an invitation for the President of Mongolia to visit Kuwait.

The meeting was attended by Deputy Chief of the National Guard Sheikh Mishal Al- Ahmad Al-Jaber Al-Sabah.

Link to article


Mongolians and Germans to cooperate on mining

September 5 ( Representatives of two Mongolian organizations and a German group have signed a memorandum of cooperation dealing with Mongolia’s mining sector.

The memorandum was signed September 2 by the head of the National Development and Renovation Committee (NDRC), Ch.Khashchuluun, the executive director of the Business Council of Mongolia (BCM), Jim Dwyer, and the director of instruction of the Mineral Resources Initiative of the German International Cooperation Society (IMPI), Stephan Hanselman.

The NDRC, MBC, and IMPI are promising to cooperate in supporting the development of Mongolia’s economy by improving mining companies. The memorandum aims to improve the profitability of mining companies, as well as the quantity and quality of their products.

The memorandum is also intended to improve the transparency of the companies’ activities and production standards, as well as improving cooperation between the Government and the private sector in mining.

Link to article


Report: Freedom of press could be strengthened in Mongolia

September 5 ( The Asian Forum for Human Rights and Development has released a report on freedom of the press in Mongolia. The report recommends that laws be strengthened to better protect journalists and news organizations. 

The report notes that Mongolia has made much progress in the areas of democracy and human rights since 1990. But it also notes that, while Mongolia is a democratic country, the media do not have complete freedom. For example, if a journalist uncovers a government official’s misdeeds, the government will sometimes pressure the journalist’s employer to suppress the information. 

The report was compiled by a working group of the Asian Forum. Members met with employees of the President’s Office, the Ministry of Justice and Internal Affairs, media officials, and journalists. The results were announced on September 2.

Link to article


Meeting about business franchises to be held

September 5 ( The Franchise Council of the Mongolian National Chamber of Commerce and Industry (MNCCI) and Asiawide Franchise Consultants Group of Singapore are organizing an informational meeting about business franchises in Ulaanbaatar on September 12 and 13.

Fifteen businessmen from Singapore, Malaysia, New Zealand, Australia, and Thailand have applied to take part in the meeting. Domestic organizations and businessmen who are interested in participating may register through MNCCI. Participants will learn about franchise opportunities in Mongolia. 

Link to article



September 5, Ulaanbaatar, Mongolia /MONTSAME/ A Mongolian-Russian joint antiterrorism exercise is running under the code theme “Selenge-2011” at military field exercises base of “Tavan tolgoi”.

The event is attended by about 500 servicemen and 200 special and military techniques of the two countries.

The first such exercise has been held at “Burdun” shooting field nearby Kyahta city of the Republic of Buryatia, Russia.

The second exercise encompasses by motorized infantry unit, tank troops of the Russian Armed Forces, and infantry battalion, augmented by mortar, engineer-sapper, zenith, tank troop of Mongolian Armed Forces. Joint event will last until September 10. 

Link to article



September 5, Ulaanbaatar, Mongolia /MONTSAME/ Five stock trades were held at Mongolia's Stock Exchange from August 29 to September 2.

In overall, 333.6 thousand shares were sold of 59 joint-stock companies totaling MNT 390.9 million.

Index TOP-20 was 20170.83 points decreasing 236.11 units or 1.2% against the week earlier.

The total market capitalization was set at MNT two trillion 54.1 billion decreasing MNT 24.6 billion or 1.2%.

Shares of "Ikh barilga" /32.2%/, "Sav shim" /31.8%/, and "Mongol shevro" /19.7%/ increased, but shares of "Monnoos" /14.5%/, "Darkhan nekhii" /13.9%/, and "Mongol savkhi" /13.4%/ decreased.

33 stocks closed higher, 16 shares declined and 10 shares remained unchanged.

Shares of "Remikon" /97.3 thousand units/, "Silikat" /86.6 thousand units/ and "Goviin ondor" /33.7 thousand units/ were the most actively traded in terms of trading volume and in terms of trading value--"Sharyn gol" (MNT 86.2 million), "Aduunchuluun" (MNT 68.7 million), and "Baganuur" (41.3 million).

Link to article


“Construction Expo 2011” is underway

September 2 ( More than 100 companies from Mongolia and abroad are taking part in “Construction Expo 2011,” which runs through September 5 at the Misheel Expo Centre.

Leading construction firms, banks, and lenders from Taiwan, Hong Kong, and Switzerland are among those participating.

Organizers say the expo is a good opportunity for people who want to own a home to apply for loans and select a builder.

Link to article


Apartment prices wil not decline,

September 5 (UB Post) “Apartment prices will decline, especially when program for 100 thousand apartments starts to take effect housing prices will decline by double” confirmed the president of the Construction association M.Batbaatar. Unfortunately the history of economic development in other countries shows that in fast growing developing economies that are largely based on mining, housing prices never decline.

Instead of price decline following an economic crisis, housing prices competed with economic development and increased even more following an upsurge in petroleum prices on the global market. Qatar and Kazakhstan whose economies are similar to Mongolia are clear examples of this situation.

Today, Mongolia is repeating this history, as more apartments are put on market, housing price are rising. During this year’s second quarter alone, average apartment price increased by 30% and 1m square costs 1.2 million Turgrogs. Prices for good quality apartments in strategic location are twice as high.

The increase in apartment prices is largely the fault of the government. Despite wishing for the best, the outcome of its conduct leads to this conclusion. If the government was dedicated only to its primary duties, invested in developing the infrastructure and let the private sector complete the rest by market economy principles to provide its citizens with shelter that meet basic sanitary requirements, drinking and sanitation water and bathrooms with flushing toilets, apartment prices would not have increased as much as they have.

The government itself cannot see that it is only “bear service” to grant reduced loans to thousands of public employees without building power plants, hot water and sewage pipelines. While unable to implement the proposed agendas with big numbers, the government’s promise to provide housing with discounted prices are causing apartment prices to escalate. Once providing the opportunity for so many people to obtain housing simultaneously stimulates demand for housing and heats apartment prices.

For example, the government announced three years ago an offer of housing to 4000 public employees with special low-price conditions. As of today, the government has given out a total of 88.7 billion Tugrogs in loan to 2700 families out of the 4000 because the created demands and expectations caused prices of apartments to increase before even the start of construction. The 32.8 million Tugrogs designated to one family on average cannot reach today’s price level for a single room apartment. So the government decided to distribute a loan to government employees with 8% interest per year for 20 years and to pay the difference from tax money. Now citizens are looking to obtain the missing capital from actual market price i.e. with 12% interest per year.

The government, In order to keep its promise, even though it has not completed finalize its first agenda, is promising to make apartments for another 100 thousand low-income families financed through the “Human development fund”. With the spread of this news, as everyone started a hunt for an inexpensive single-room apartment, demand for housing has further increased along with land prices.

In order to build the 7th district in Ulaanbaatar to the west of the street of “Zuun ail” where construction materials are sold, 238 families must move to free the space. The fact that only 36 of whom have done so explains why prices offered for resettlement are so low and had caused the project to standstill. The city Khural of citizens representatives made resolution that established the land price to be bought at 100,000 Tugrogs per 1m2. Construction for housing 2592 families on this area currently occupied by 238 will begin this autumn. Another winter is coming since relevant government organizations have announced that the 47 million of the 100 million dollar Chinese loan would go to development of of the district and the rest for construction.

Those in power refuse to recognize that the only solution to settling the housing issue is through involving citizens living in Ulaanbaatar’s city’s ger districts in the profit sharing from the construction projects on their land. As a result of the government’s enforcing approach to free the land space and give the project to their related construction companies, as they almost always do, the ger districts are spreading and city air pollution increases to catastrophic level. The coming winter will prove this again. As the government keeps discussing grandiose projects we will again face another spring, and will forget about the air pollution when summer comes and will be busy with Naadam and will meet once more another autumn.

The issue would be solved by way of the city government investing into infrastructure to deliver the conditions for the opportunity of ger district citizens to cooperate in building houses and in sharing profit from the project on their lands. City could finance infrastructure development and certain amounts of housing costs through issuing municipal bonds. Cost and expenses would be realistic and not blown because their representatives would closely observe construction process and expenditure.

Accomplishing all this was explained in detail in the program I wrote earlier that was called “Six steps to exchange land for an apartment ( In order to achieve this goal, it is sufficient for the government and municipal authorities to put aside personal gains and perform the duties for which the people elected them for.

The government’s ambitious plans to provide citizens with apartments are causing apartment prices to heighten more than usual. Due to the rise in apartment prices, the number of families in gers is increasing. We want the government to build power stations faster and stop business on land sales. Individual citizens with the help of market mechanism can handle the rest.

Link to article



September 2, Ulaanbaatar, Mongolia /MONTSAME/ A document of “Strengthening environmental governance-2” project has been signed by L.Gansukh, the Minister of Environment and Tourism; and by Tomas Ericsson, a Deputy Country Director of the UNDP for Mongolia.

To be implemented in 2011-2013, the project will be supported by the UNDP, the Australia's official development assistance (ODA) and the Government of Mongolia.

Within the project, works will be done to update the policy on environment protection, to improve institutional mechanism of conducting monitoring over unfriendly actions of environment and to increase participation of people in it. 

Link to article


DP chief: We won’t leave the coalition government

September 2 ( The Democratic Party held its monthly meeting with journalists yesterday. The theme of the meeting was education. Afterwards, our correspondent spoke with the head of the party, N. Altankhuyag.

- What would the DP like to do to improve pre-school education?

- A public discussion among representatives of 14 aimags has shown that it is time to reform pre-school education. There are many complaints. Therefore we need to hold a public discussion on the issue, which we are calling “A Mongolian 2020.”  We will meet with representatives of the other seven aimags. Finally, we will hold a decisive meetintg in Ulaanbaatar with experts on the issues. There are a total of 51,230 children who are starting school in Mongolia. They are our future. We need to give them a good start. Mongolia is rapidly developing. We need well educated, skilled workers. There are complaints that too many of our workers come from abroad. But we can’t stop that until we train our people. Now we must train good engineers and skilled workers.

- Are you saying that the Government has no policy on pre-school education?

- We need to reform our policy. 

- The Government is supposed to support students. But are pre-schools being left behind?

- The Government grants MNT 45,000 to students who attend professional training centers. But we should also consider general education grants, teacher training, increasing wages for teachers, and improving teachers’ working conditions. If we make the conditions better for teachers, the schools will improve.

- The Koreans are to head the Development Bank. Do you think that is a good decision?

- We need people who can manage the bank. The Korean Development Bank is very experienced in the field and that is the reason we chose it. 

- When will the DP hold its National Committee meeting?

- We have not scheduled it yet.

- Is the DP collecting signatures to leave the joint government?

-There is no such talk among our members. 

Link to article


MNT 24 billion allocated for development of soums

September 2 ( There are over 300 soums in Mongolia. (A soum is roughly equivalent to a county in the United States.) Some have fewer than a thousand people. Some have ten times that. The Government has decided to spend MNT 24 billion for the economic development of soums. Each soum will receive between MNT 50 million and MNT 265 million, depending on its population. The governor of each soum is responsible for distributing the money as loans to businesses. Our correspondent spoke with N. Galtsog, the chief of investment for the Authority of Small and Medium Enterprises. 

- How do you make sure the governor of each soum allocates the money wisely?

- A governor alone is not responsible for allocating the money. There might be a working group headed by the governor to choose projects and programs to invest in. If there is anything wrong with the process, then the loans should be returned. The Government transferred the assets into the Development Fund for soums at the end of June. In July the process of issuing the investment money to the soums was 70 percent completed. The governors of the soums invested MNT 16.3 billion for 1,571 projects in the countryside. The process is completed above 95 percent in Dornod, Orkhon, Zavkhan, and Govisumber aimags, while less than 50 percent is done in Arkhangai, Tuv, Dundgovi, and Darkhan-Uul aimags. 

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Report: Major-General M. Ganbold to head Anti-Corruption Authority

September 2 ( The newspaper Undesnii Shuudan is reporting that President Ts. Elbegdorj has appointed Major General M. Ganbold head of the Anti-Corruption Authority.

The position has been vacant since last April, when the previous head of the ACA, Ch. Sangaragchaa, was sentenced to more than two years in jail for revealing secrets and violating his executive authority. The deputy chief of the ACA, D. Sunduisuren was also sentenced in that case.

M. Ganbold has been the General Secretary of the Anti-Corruption Authority. He was appointed to that position by former President N. Enkhbayar.

Before that M. Ganbold was the Chief of the Police Department. Officials say the Government will discuss a major restructuring of the ACA in the autumn session of Parliament.

Link to article


Will it ease the rush hours

September 5 ( On our previous issue we have informed you that all the governmental organizations operating under the authorization of Mayor of Ulaanbaatar are starting up work at eight in the morning instead of nine and finishing at five pm instead of six.

Up until now all the governmental as well as private organizations followed the work schedule of nine to six. So you can call this Mongolia ’s first major reform. This plan was initiated by the mayor of Ulaanbaatar to ease the rush hours in the city around these times.

If you have noticed, from eight to nine in the morning people have the worst time of the day by cursing and sitting in their cars for hours just to move inch by inch. For instance, people who live at Zaisan have to leave home around seven to eight to get to the city centre at on time. Actually, if you think about it nine am is pretty late to start work. Countries with same or even worse traffic introduced work hour schedules with variations. In Japan and China , people start working at different times to reduce the traffic. There is a saying in Mongolia that the main symptoms of a person becoming lazy and loosing his way is when he starts eating and sleeping a lot. This lifestyle of our country is influencing on us badly, turning us into people who sleep until the mooing of cows wakes us up. Mongolians explain that people should wake up by the squawking of roasters but the laziest ones wake up by the sound of cows, because cows start making noise only in the afternoon. In old days, Mongolians never used to sleep later than then pm.

Even today nomads wake up at six a.m. to herd the animals. As for the city folks like many of people I know our work ends so late and we go partying until the dawn. We the UB Post also published an article about how the streets remain full of cars during the night and even after midnight constant honks don’t let you sleep in peace. This also have something to do with our unhealthy lifestyle, on some level. So this new plan initiated by the Mayor will not only influence positively on rush hours but also on improving our life styles. However the organizations under the Mayor’s authority are not so many so only those starting work early as well as finishing early may not help the situation that much. If other governmental organizations as well as some private businesses joined this reform it would help the traffic situation very much. If the employees in Mongolia would start up work at different hours or at least they could be divided into two groups the rush hour would not be such a disaster. On this note I want remind the fact that the Mongolian government lacks on the ability and power to put their laws into action.

They initiate laws but no one bothers to follow them. Indeed, there is humorous saying that Mongolian law lasts only for three days. Therefore the UB Post went around “investigating” on the government organizations under the Mayor’s delegation. It has been less than three days since the new regulation was applied and yet we still saw flaws. The work was not starting at eight o’clock as planned. I guess the humor is true. Mongolian laws do last less than three days. So we hope that this regulation will not end up being just like the previous laws and regulations. The UB Post cheers the Mayor and wishes the Government to get at least this simple regulation right for a long-term. We hope this spreads around more organizations and gets support from the citizens.

Link to article


China, Mongolia economies are highly complementary: vice president

BEIJING, Sept. 2 (Xinhua) -- Chinese Vice President Xi Jinping said here Friday that the economies of China and Mongolia are highly complementary, especially regarding mining cooperation.

Xi made the remarks during his meeting with Ukhnaa Khurelsukh, secretary general of the ruling Mongolian People's Party (MPP).

When facing broad cooperation prospects, China and Mongolia should seize opportunities, and give full play to their complementary advantages, so as to reinforce practical cooperation in relevant fields, Xi said.

With regard to their mining cooperation, Xi said the exploitation of mineral resources should run parallel to infrastructure construction and financial cooperation, and the three aspects should be pushed forward within overall planning.

Khurelsukh is in China to attend a two-day seminar held on Aug. 29 and 30, in which senior officials from the Communist Party of China (CPC) and MPP exchanged views and experiences on party building and national construction.

Khurelsukh said the seminar deepened strategic mutual trust and understanding between the two parties.

The MPP is willing to push forward the state-to-state friendship, make efforts to advance bilateral cooperation in all areas, including politics, economy and culture, and strengthen the two countries' coordination on international issues, said Khurelsukh.

Xi said China highly values the bilateral relationship, and is ready to work with Mongolia to enhance cooperation in order to better benefit the two peoples.

China and Mongolia decided to upgrade bilateral ties from a good-neighbor partnership of mutual trust to a strategic partnership, according to a joint statement issued during Mongolian Prime Minister Sukhbaatar Batbold's visit to China in June.

Link to article


CNN: Eye on Mongolia

September 1, PM on Mongolia’s Economy - CNN's Anna Coren talks to Mongolian Prime Minister Sukhbaatar Batbold about the challenges Mongolia faces

September 1, Can Mongolia avoid corruption - CNN's Anna Coren talks to the president of the Mongolian Stock Exchange about the potential and perils for the country

August 31, The spirit of Genghis Khan - The legacy of Genghis Kahn looms large in a Mongolia, but future prosperity for many is as distant as Khan's empire.

August 31, CNN’s Mongolia BackStory - CNN's Stan Grant gets a close look at life on the Mongolian steppes, sheep guts and snuff included.

August 31, The nomad’s Struggle - The traditional nomadic life can be harsh, but rapid change to Mongolia is transforming the country.

Link to CNN’s Eye on Mongolia page


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