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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Banpu Stake Up to 50.94%
October 27, Hunnu Coal Limited (ASX:HUN) --
Related: September Quarterly Activities Report, Cashflow Report – October 26
HUN now at A$1.795 after the announcement, 0.5c below offer price
Banpu Declares Hunnu Takeover Bid Unconditional
October 26 (Mogi) --
Banpu declares off-market takeover bids for Hunnu Coal (ASX:HUN) unconditional as it announces its interest in the company to have reached 50.18% of all shares.
The main terms and conditions now waved are reaching a minimum acceptance of 90% of all shares during the offer period and ASX 200 index not falling below 3,500.
Disclosure: CPS Securities was a lead manager in Hunnu's IPO
Voyager: September Quarterly Reports
October 27, Voyager Resources Limited (ASX:VOR) --
Link to Activities Report, Cashflow Report
C @ Limited in trading halt pending share sale agreement to acquire eight Mongolian coal licences
October 26 (Proactive Investors) Perth-based C @ Limited (ASX:CEO) has been granted a trading halt by the ASX pending the release of an announcement regarding the execution of a share sale agreement for the acquisition of eight Mongolian coal licences.
In late September the company announced it was advancing negotiations to acquire eight coal licences covering 625 square kilometres in the South Gobi province and the adjoining Ovorhangay province in southern Mongolia.
As part of its technical due diligence on these licences, C @ undertook an exploration drilling program which intersected three coal seams on the Ovorhangay licences.
Initial raw coal quality tests at both Mongolian and Australian laboratories have confirmed high quality coking properties, likely to be enhanced by washing.
The trading halt will be in effect until an announcement is made to the market or no later than the start of trading on Monday, October 31.
Bullman Signs Letter of Intent for Qualifying Transaction
VANCOUVER, BRITISH COLUMBIA--(Marketwire - Oct. 26, 2011) - Bullman Ventures Inc. (TSX VENTURE:BUL.P) (the "Company") announces, further to its news release dated August 25, 2011, that the letter of intent entered into with Beijing Nange Huyang Investment Ltd. dated August 18, 2011 has been terminated effective October 10, 2011.
Following the termination of the letter of intent with Beijing Nange Huyang Investment Ltd., the Company is pleased to announce that it has signed a letter of intent (the "Letter of Intent") with GOBI QAV Co., Ltd. (the "Vendor") effective October 20, 2011 to acquire a 70% interest in the mineral interests covered by Exploration Permit 15079X (the "Exploration Permit") in East Gobi Province Mongolia (the "Interest") in consideration for the issuance of six million common shares of the Company and USD$2,000,000 cash (the "Cash Consideration"). The proposed acquisition of the Interest by the Company is expected to constitute the Company's required Qualifying Transaction. The proposed acquisition is not a Non-Arm's Length Qualifying Transaction as such term is defined in Policy 2.4 of TSX Venture Exchange (the "TSXV").
The property (the "Property") covered by the Exploration Permit is located in the deserts of southern Mongolia. It is approximately 80 km to the town of Zamyn-Uud close to the Chinese border. It is in East Gobi province of Mongolia. The Property covers 108 km2 of land with the coordinates as below:
1. 110°51′30″ 44°0′0″
2. 111°00′0″ 44°0′0″
3. 111°00′0″ 43°54′50″
4. 110°51′30″ 43°54′50″
It was reported by the owner of the Property that it conducted 11 drill holes on the Property and most of them have hit coal seams. However, the cores are not available - so the company has drilled one hole to test a previous drill hole, which is said to have hit coal seams. The due-diligence drill hole has confirmed the coal seams at depth and the samples have been sent to a qualified lab for analysis. The Company has also signed a contract with a consulting company, Behre Dolbear Group Inc., to complete a technical report in accordance with NI 43-101.
In the Letter of Intent, it provides that the completion of our Company's acquisition of the Interest (the "Acquisition") shall be subject to certain conditions precedent, which will include but are not limited to the following conditions precedent that are for the benefit for both the Company and the Vendor.
a) receipt of all regulatory approval by regulatory bodies having jurisdiction over this Acquisition, including approval from the TSXV;
b) the Company's and the Vendor's board of directors approval of the final terms of the Acquisition;
c) if required by the TSXV, and pursuant to Policy 2.4, approval by the Company's shareholders;
d) a closing certificate dated as of the closing date of the Acquisition from both the Company and the Vendor, certifying the truth and the accuracy of the representations and warranties included in this LOI and in the definitive agreement (the "Definitive Agreement") to be executed at a later date;
e) execution of the Definitive Agreement;
f) from the execution date of the LOI until the closing date of the Acquisition, there shall be no material adverse change to the Interest;
g) complete some drill holes and verify the existence of coal beds previously presented to satisfy NI43-101 report requirement;
h) receipt by the Company a satisfactory technical report prepared in accordance with NI 43-101 on the mining area covered by the Exploration Permit;
i) completion of the due diligence by both the Company and the Vendor, acting reasonably, with respect to matters related to the Acquisition;
j) delivery of all completed standard documents related to the Acquisition, including but not limited to legal opinion from Canadian and local counsel and certificates of good standing (or equivalent) from governmental and/or regulatory officials;
k) the absence of any prohibition or regulation preventing the completion of the Acquisition, and the absence of any approved, announced or applicable governmental order that prohibits or restricts the Acquisition or imposes additional any material conditions or restrictions to the Acquisition;
l) the absence of any regulatory or legal proceedings (applicable to the Company or the Vendor) that will terminate or threaten, so as to order, limit or prohibit any transactions contemplated under this LOI, or order, limit or prohibit the right of the Company or any of its subsidiaries, on a post closing of the Acquisition basis, to operate the Interest in the same manner as the Vendor did before the execution of this LOI, and the absence of any actions, litigation or legal proceedings (if successful) by any governmental bodies or person that may have an substantial adverse effect on the Interest; and
m) other commercially routine terms and conditions applicable to transactions materially similar to the Acquisition.
Concurrently with the Company's acquisition of the Interest, the Company intends to complete a private placement for gross proceeds of up to $3,500,000 (the "Private Placement"). The proceeds from the Private Placement will be used to pay the Cash Consideration, fund the Company's work program and for general working capital. Securities to be issued pursuant to the Private Placement will be subject to a four month hold period in accordance with applicable securities laws and the policies of the TSXV.
After the completion of the Acquisition and prior to the completion of the Private Placement, GOBI QAV Co., Ltd. will become a Control Person (as the term is defined in the policies of TSXV) of the Company as it will hold 54.35% of the issued and outstanding share capital of the Company.
Sponsorship
The Company may be required to obtain a Sponsor for the Qualifying Transaction. If required, the terms of the sponsor's engagement will be negotiated at arm's length.
Winsway: STRATEGIC ALLIANCE AGREEMENT WITH MONGOLYN ALT (MAK) LLC
October 26, Winsway Coking Coal Holdings Limited (HK:1733) -- The board of directors (the "Directors") of the Company announces that the Company entered into a ten-year strategic alliance agreement (the "Strategic Alliance Agreement") with MAK on 25 October 2011.
Under the Strategic Alliance Agreement, Mongolyn Alt (MAK) LLC ("MAK") or its designated companies will supply high-quality coal to the Company or its designated companies from Mongolia with a minimum volume of 3 million tonnes per year with scope to increase the volume as may be agreed by the parties. The purchase price shall be mutually agreed upon on a quarterly basis with consideration given to the market price in China. The Company will provide comprehensive logistical services to MAK.
The Strategic Alliance Agreement will regulate supplies from MAK to the Company for a period of ten years starting from 2012 and may be renewed by the parties upon agreement within three months prior to its expiry.
Citi cuts SouthGobi (01878) target to HK$87.4
October 25 (ET Net) Citigroup lowered its target price for SouthGobi Resources (01878) to HK$87.4 from HK$100.2, and maintained its "buy" call.
It believes the stock discounts concerns on volume reliability and coal quality, in addition to a weak steel sector outlook. Citi cut its EPS by 6-16% in 2012-13 to reflect lower benchmark Chinese coking coal prices, partially offset by rising washed coal volumes.
But the research house expects a rising realized price on a diversifying customer base, increasing volume reliability, and potential improvement in Chinese railway infrastructure.
Haranga: Quarterly Reports
October 25, Haranga Resources Limited (ASX:HAR) --
Link to Quarterly Activities Report
Link to Quarterly Cashflow Report
Ivanhoe Mines Makes a Move: Up 4.3%
October 26 (FNN Online) Ivanhoe Mines (NYSE:IVN) is one of today's notable stocks on the rise, up 4.3% to $18.26. The S&P is trading lower by 0.5% to 1,224 and the Dow is trading fractionally higher to 11,719.
Ivanhoe Mines Ltd. explores for and develops gold, copper, uranium, and coal. The Company operates in Mongolia, China, and Australia.
Ivanhoe Mines (NYSE:IVN) has potential upside of 24.4% based on a current price of $18.26 and analysts' consensus price target of $22.72. Ivanhoe Mines shares should first meet resistance at the 50-day moving average (MA) of $18.45 and find additional resistance at the 200-day MA of $23.88.
In the past 52 weeks, shares of Ivanhoe Mines have traded between a low of $12.11 and a high of $30.03 and are now at $18.26, which is 51% above that low price. Over the past week, the 200-day moving average (MA) has gone down 0.4% while the 50-day MA has declined 1.1%.
Mongolia needs coal deal in 3 mths to ensure IPO goes ahead -MP
* MP says Tavan Tolgoi IPO could be delayed if investment deal falters
* Contentious investment agreement to decide scale of IPO
* Politics to the fore as parliamentary elections approach
HONG KONG, Oct 26 (Reuters) - A contentious investment agreement on Mongolia's huge Tavan Tolgoi coal deposit needs to be completed within three months to ensure that a much-heralded initial public offering for the project goes ahead on time, a legislator told Reuters on Wednesday.
Terbishdagva Dendev, a member of Mongolia's Grand Khural parliament, said on the sidelines of a conference in Hong Kong that discussions on an investment agreement for the western block of the coveted 7.5 billion tonne deposit were expected to get under way in November.
Mongolia plans to open the western block of the vast deposit up to foreign investors, while the eastern block will be listed on international stock markets next year.
An initial plan to grant 40 percent of the western section to China's Shenhua Group, 36 percent to a Russian-Mongolian consortium and 24 percent to Peabody Energy Corp of the United States was rejected by the Mongolian Security Council (MSC) and branded as "unfair" by bidders from Japan and South Korea.
A new deal is currently being thrashed out, and is expected to give a 33 percent share to a Peabody-led consortium that will include Japanese and South Korean firms. Any agreement will require MSC approval before it is finally submitted to parliament.
Graeme Hancock, chief operations officer with Erdenes Tavan Tolgoi, the state-owned entity in charge of the project, told the conference that the scale of the IPO for the eastern block would depend on the investment agreement.
"Once the terms of engagement on the west block are clear, that will have an impact on the IPO valuation," he said. "I am hoping there will be resolution on this in the very near future so this can be built into our future cash flow."
Terbishdagva said that if an agreement was not signed within three months, the international IPO would have to wait until after Mongolia's parliamentary elections in June.
Government ministers have continued to insist that the IPO for Tavan Tolgoi's eastern block will go ahead in the first or second quarter of 2011.
Tavan Tolgoi has already short-listed BNP Paribas , Deutsche Bank , Goldman Sachs and Macquarie as advisers on the IPO, which some say could raise as much as $15 billion.
Hancock said there were still a number of uncertainties about when and where the listing will take place -- with the state of the global economy also a consideration.
"Clearly one of the issues is what the market is like at the time," he said. "To a degree we are probably less sensitive to market conditions than some others might be but clearly we would prefer to be listing when the market is strongest."
"I think at this point, certainly we would like to be listing during next year and earlier next year would be better. But basically we don't have a fixed time at this point."
POLITICS IN COMMAND
Analysts have expressed concern that political jockeying ahead of next year's elections was disrupting Mongolia's economy and harming its investment climate.
Terbishdagva was one of the MPs who signed a petition earlier this year, urging the government to renegotiate an agreement signed with Canada's Ivanhoe Mines Ltd in 2009 for the massive Oyu Tolgoi copper-gold project.
A group of 20 parliamentarians called on the government to renegotiate the terms of the deal to allow Mongolia's stake in the project to rise from the current 34 percent to 50 percent as soon as Ivanhoe recouped its investment.
The government submitted a request to Ivanhoe in mid-September, but subsequently announced that no changes would be made to the agreement, which allows Mongolia's stake to increase to 50 percent only after 30 years.
Nine of the petition's original signatories have subsequently called for the resignation of Mongolia's prime minister, Sukhbaatar Batbold, saying he has failed to implement parliamentary resolutions.
Analysts have said that the moves on Oyu Tolgoi were part of a concerted effort on the part of a small group of nationalist and environmentalist members to bring down the country's coalition government.
Hancock of Erdenes Tavan Tolgoi said parliamentary approval of the project was unlikely to be delayed by political divisions.
"The coming elections do create some political uncertainty, but I think that there is very, very strong political support for Erdenes TT," he said.
"I don't anticipate there will be any negative political comments about us moving forward with the programme and the project."
Video: Mongolia Economy, Mining Projects, Investing
Oct. 26 (Bloomberg) -- Peter Morrow, deputy chairman of Newcom Group, speaks about the outlook for Mongolia's economic growth and investment opportunities in the country. Morrow speaks in Hong Kong with Susan Li on Bloomberg Television's "First Up."
Video: Australian Resources Minister on Mining Tax (and Mongolia)
Oct. 26 (Bloomberg) -- Australia's Resources and Energy Minister Martin Ferguson talks about the nation's new mining tax. Ferguson also discusses iron-ore demand and Mongolia's natural resources. He spoke in Perth yesterday with Bloomberg's Shraysi Tandon.
WB AND IMF: MONGOLIA BECOMES MIDDLE-INCOME COUNTRY
Ulaanbaatar, Mongolia, October 25 /MONTSAME/ Mongolia officially entered a "middle-income country" status from a low-income countries list in 2011, evaluate the World Bank (WB) and International Monetary Fund (IMF).
Such a positive result has stemmed from an economic growth that followed the mining development and increases in industrial rate and the GDP. The economic growth increased 20 per cent this year, and is foreseen as 26 per cent next year.
According to experts, not many countries have managed to reach these 20 per cent, even more, here the two-digit percentage growth will be kept for some ten years.
At the same time, the inflation rate is expected to stand at two-digit number. The WB and IMF suggest the Government of Mongolia toughen its currency policy.
POLICY RATE HAS BEEN INCREASED
Ulaanbaatar, Mongolia, October 26 /MONTSAME/ The Bank of Mongolia augmented the policy rate by 0.5 per cent, and now it has reached 12.25 per cent, in accordance with a decision of the Board of Directors. It was sounded on Tuesday at a press conference.
According to D.Boldbaatar, a director of the Fiscal Policy Department, the main reasons of this step were an increase of the inflation rate, a widening of the budgetary expenditures and intensifying of the credit expansion.
By September of this year, the inflation rate measured by consumer price index was 10.5 per cent nationwide, whereas in the UB city it stood at 11.9 per cent. Regarding this, the National Statistical Commission (NSC) says it was an influence of meat prices soar last spring. Prices of 215 kinds of products out of 287 at the basket of consumer goods increased in September as well.
Apart of this, the budgetary clarification for 2011 and the draft budget for 2012 might bring macroeconomic instability by increasing the demand as well as inflation pressure. In addition, a size of loans has reached USD 4.8 trillion, going up by 60 per cent against the previous year, and this is the biggest factor of increase of the demand.
Link to Mongol Bank press release
October 26 (UB Post) On the 24th of October, Finance Minister S.Bayartsogt presented the documents and decisions that were made at the level of State Great Khural and the Government to journalists regarding the profit of Oyu Tolgoi.
On the 16th of July 2009, the 57th resolution of the State Great Khural on the Oyu Tolgoi Deposit was approved.
"The investors will earn USD 25 billion from the dividend. They will receive the profit after the mining operation has started. But Mongolia will be granted a profit the moment the operation begins. Therefore, there are more advantages on the Mongolian side," said the Finance Minister.
He continued, "I'm 100 percent sure that Mongolia will continue adhering to the contract. After the contract was made, President Ts.Elbegdorj said that Mongolia advanced with one step. If we fail, not only me, but also all Mongolians will fail. I'm confident because the International Monetary Fund and World Bank evaluated the contract by saying it will be a profitable contract for the Government of Mongolia. If we don't receive 59 percent of the profits of Oyu Tolgoi deposit, we will take responsibility no matter what."
Minister for Finance reports on Oyu Tolgoi agreement (and double taxation)
October 25 (business-mongolia.com) Yesterday, Finance Minister S.Bayartsogt informed journalists about Oyutolgoi issue on Monday.
Ivanhoe Mines Ltd and Rio Tinto International Holdings Ltd made Oyutolgoi investment agreement on October 6, 2009.
The Minister said that Mongolia would earn USD29.1 billion as taxation, payment, fee and dividend from Oyutolgoi project in 50 years and investors would earn USD25 billion as dividend. Besides, the two sides have agreed to talk loan interests in every seven years and next talks would be held in 2018. Mongolia could own 50 percent of shares after 30 years.
Bayartsogt explained that the MPs who demand implementation of the 57th protocol of Parliament have considered political meaning but not economic basis.
Some journalists asked that investors saying Mongolian politicians greedy related to politicians bribery from investors. The Minister stated that essentiality of issue concerns to benefit of Mongolian side and the International Monetary Fund and World Bank concluded that Oyutolgoi agreement has beneficial to the Government of Mongolia, after their research. Mongolia becomes a country with average income and has economic growth 20 percent.
He answered a question about double taxation with Kingdom of the Netherlands that Mongolia has held talks of double taxation with some countries since 1990. Double taxation does not give profit to Mongolia and the Government is aiming to cancel double taxation agreements.
International conference "Oil and Gas" to be held
October 25 (news.mn) The Government is organizing an international conference "Oil and Gas" on November 1 with the aim of introduction of Mongolian oil exploration and exploitation, project of oil refinery and factory of fuel extraction from coal to domestic and foreign investors.
The conference is intending to involve petroleum businessmen and to decrease reliance on foreign imports. Nowadays Mongolia is almost wholly dependent on fuel imported from Russia and the Government is deciding a new oil refinery construction.
Mongolia exploited oil in Zuunbayan in 1950s and oil refinery renovation needed much expenses. That is why the oil refinery was closed and Mongolia imported fuel from Russia.
GARBAGE RECYCLING PLANT OPENS
Ulaanbaatar, Mongolia, October 25 /MONTSAME/ The garbage recycling plant, costing 3.5 million US dollars, came into service at centralized rubbish point in "Narangiin enger" in the UB city's Songinokhairkhan district.
The plant was officially opened on October 24. It was erected at grant aid given by Republic of Korea within two months.
A specialist of Administrative office of Ulaanbaatar, O.Odjargal said, "Every das, the city disposes of some 800 tons of waste, this plant is able to recycle eight tons a day, but its capacity will increase in future. The plant will recycle over 80 percent out of all waste". The waste recycled will be used as fuel, he added.
Fourty people, who used to work for the "Narangiin enger" point, will be employed by the plant.
MPRP officials comment on state of politics
October 26 (news.mn) Mongolian People's Revolutionary Party (MPRP) Chairman N.Enkhbayar and Secretary General N.Udval held a press conference on Tuesday to outline the party's positions on several issues.
They said there were problems with the draft law on the election. They also said misinformation about the MPRP was being spread.
The officials said they would publish a statement about the "swindle" and "fraud" involving the Oyutolgoi mining agreement, and claimed "oligarchs" are defaming the MPRP.
They also said the MPP and the DP are trying to negatively impact the MPRP's registration with the State Supreme Court, and that such actions amount to illegal defamation.
N.Enkhbayar said the MPRP is fighting for fairness and will continue that fight. He said the party fights for justice and equal rights. He predicted the "oligarchs" named in the statement would likely retaliate against the MPRP.
Energy conference held in Ulaanbaatar
October 26 (news.mn) The Ministry of Mineral Resources and Energy is sponsoring a conference at the Puma Imperial Hotel on Wednesday. Attendees will discuss plans for the energy sector in general.
Delegates from the ministry and the Asian Development Bank (ADB) are taking part in the conference. Representatives of the ADB are advising the ministry on its long-term plans.
The conference is aimed at coming up with a long-term plan that takes into account current market conditions, as well as growth in Mongolia's mining sector.
MPP caucus holds its position on election structure
October 25 (news.mn) At a meeting of the MPP caucus at Parliament on Monday, the MPs discussed a draft law on election. They have position on election structure that the Constitution regulates election of candidates but not political parties.
But DP caucus has opposite position on election structure that the draft law on election to regulate voting for political parties. That is why MPP caucus called for votes and result of voting revealed that the MPP MPs hold their position that parliament election to be held for candidates voting in majority dominated merged structure. They decided that MPP caucus will not accept DP suggestion.
MPP caucus solved candidates' number issue from the capital and local settlements should be discussed.
DP FACTION MEETS
Ulaanbaatar, Mongolia, October 25 /MONTSAME/ A majority of members of the Democratic Party's faction has considered as necessity to discuss a draft amendment to a parliamentary resolution's appendix on privatizing state properties in 2010-2012 and approving basic guidelines for the reform. This draft has been initiated by D.Odkhuu MP.
After the meeting held on Monday, its head Ch.Saikhanbileg said they put forward official proposal to the faction of the Mongolian People's Party (MPP) on a draft law on parliamentary election. The MPP faction said that it would consider this proposal after making a specific decision, he said.
Ch.Saikhanbileg went on that their faction did not discuss a matter on relieving the Batbold PM from his post.
Citizens' savings increase
October 26 (news.mn) According to Mongol Bank, the total savings of Mongolians have increased by 3.6 percent in October compared to the previous month, and by 61.9 percent compared to October 2010. Saving growth has been stable in recent months but it was down slightly in September due to foreign currency fluctuations.
The Mongolian tugrug accounts for 75.7 percent of total savings, and foreign currency for 24.3 percent. Tugrug savings increased by five percent compared to October 2010.
Suresh Kumar Talks US-Mongolia Relations
October 26 (UB Post) Assistant Secretary for Trade Promotion and Director General of the U.S. & Foreign Commercial Service, Suresh Kumar visited with journalists at U.S. Ambassador to Mongolia Jonathan Addleton's home yesterday morning.
"U.S. and Mongolia share a very strong friendship. My visit is following up on the visit of U.S. Vice-President Joe Biden. Both the U.S. and Mongolian governments have created a framework for engagement. This is a framework which brings together not only the governments but also the private sector, companies and people and that's how true engagement happens. This time we want to take it one step further in engagements.
There are representatives of companies that came with me and some of these companies' names are very common, you have already heard of Peabody, General Electric, and Rio Tinto. We have met with the Ministry of Mining and Energy, and also with private companies, business communities, and National Mining Association. We had lots of conversations with ministries and we discussed how much more we can do and they were very positive and we recognized that Mongolia has potential to double the Gross Domestic Product (GDP)".
He also stated the Mongolian Government spoke positively about the contracts of Oyu-Tolgoi and Tavan-Tolgoi mines, stating they wanted the operations to be environmentally friendly, utilize good technology, focus on safety and employing Mongolian workers.
Kumar said it's better if the date, location, demands and processes are clear and open. Therefore companies from U.S. can operate with total confidence to fulfill demands, because they have the right technology, right projects sand ability. The U.S. has developed all of their sectors so they how experience, know-how and they are eager to help develop all sectors of Mongolia, not only the area of mining.
To connect to the world Mongolia needs up graded transportation on roads, rails and through air. To complete this Mongolia needs to upgrade infrastructure and we will help and cooperate to complete this. Some companies such as Caterpillar and General Electric have already begun operating here.
Participating Companies:
1. Appalachian Regional Commission
2. General Electric
3. Geonano Technology Corporation
4. Kanawha Scales and Systems Inc.
5. Kress Corporation
6. Peabody Energy
7. Phillips Machine Service Inc.
8. Rio Tinto
DRAFT LAW ON PRESS FREEDOM TO BE SUBMITTED TO PARLIAMENT
Ulaanbaatar, Mongolia, October 26 /MONTSAME/ At its regular meeting on Wednesday, the cabinet discussed a draft new wording of the law on freedom of media and press and decided to submit it to parliament.
The new wording of the law has five chapters and 17 clauses. In conjunction with the new wording, a draft law has been drawn up to amend the law on administrative responsibility and to annul a current law on media freedom.
In the new wording, the media freedom is restricted only to protect news regarding emergency situation or war, others' freedom and rights, reputation, state, organizations and person's secrets.
A clause on banning state organizations to possess own media is left as it is; a financial assistance and support is given to the National news agency to have it spread the news about collaboration with international organizations and foreign countries, socio-economic and political situation, foreign policy and international relations of Mongolia.
As of today, only in the UB city there are 24 TV channels, 139 newspapers, 20 FM radios and hundreds of websites.
CABINET MEETING IN BRIEF
Ulaanbaatar, Mongolia, October 26 /MONTSAME/ On Wednesday, the cabinet considered results of the State Head's participation in the General debate of the 66th session of the UN General Assembly and of his visit to New York City. The results will be submitted to the National Security Council (NSC).
- The cabinet discussed results of participation of a delegation led by the Prime Minister S.Batbold in the 7th Baikal Economic Forum held on September 11-14 in Ulan-Ude, Russia, and in celebration of the 20th anniversary of Mongolia's General Consulate in Ulan-Ude. They will be submitted to the NSC, too.
- The cabinet backed in principle several draft laws, including a draft amendment to the law on family initiated by D.Oyunkhorol and D.Ochirbat MPs. The cabinet considered as necessity to discuss it together with a draft new wording of the law on family initiated by government.
- Head of the Cabinet Secretariat of Government Ch.Khurelbaatar reported on governmental activities done in September, 2011. He said the cabinet ran six meeting to discuss 42 issues and get acquainted with 16 matters.
- A draft financing contract was backed in principle at the cabinet for an investment program of constructing the vertical autoroads in western region. This contract will be established between the government of Mongolia and the Asian Development Bank (ADB). An order of PM will be issued to give a right to sign the contract.
- In accordance with the cabinet decision, the FSE company of Belgium will, as an executor, work on a project on improving the treatment and diagnosis center of western region. The Minister of Finance S.Bayartsogt was ordered to arrange for establishing a financing agreement for the project.
- The ratio of calculating water ecology, the economic basic evaluation and purposes of usage was approved through an appendix. The cabinet also approved technical purposes for production and sales of milk and milk products.
Coking and Thermal Coal Facing the End of Their Bull Run
October 26 (Metal Miner) While most commodities have suffered something of a roller-coaster ride in terms of prices, coal and iron ore have weathered the storm much better. Coal in particular has benefited from natural disasters such as the Queensland floods that removed a significant source of supply from the seaborne supply market earlier this year, and while spot prices for both coking coal and thermal coal have come off, they have not seen the swings of the more volatile base metals.
As with iron ore, however, coal demand is very lopsided. In Asia, demand has remained strong and major importers like China have had to supplement Australian supplies with coal from elsewhere. But in Europe and the US, coal producers are facing a very different market. US producers are an example. East Coast miners have been doing well — exports are at a record high.
By the Numbers
A Reuters article quoted a U.S. Energy Information Administration (EIA) report as stating that 2011 US coal exports reached 1982 export-boom levels. Over the first half of the year, exports reached 54 million short tons, an increase of 35 percent over 2010 levels, and the EIA anticipates that exports will approach 99 million short tons by year-end. But at the same time, domestic demand is falling due to competition from shale gas for power generation and lower coking coal demand from steel mills. Consequently, central and inland coal mines are seeing sales and prices weaken. Europe is looking even worse. South African cargoes, much of them destined for Europe, have fallen to $100 per ton from up to $120 per ton earlier this year.
China, on the other hand, has remained a robust importer of thermal and coking coal. Imports reached 13.3 million tons in August from 6.1 million tons in March, as this graph from HSBC shows:
Source: HSBC
China's not alone. The bank expects India to be the fastest-growing importer driven by thermal coal imports rising 32 percent to 79 million tons in 2011 and 19 percent or 94 million tons in 2012 in spite of rising domestic production.
China has cut coking coal imports from Australia, initially due to the flooding in Queensland, but also because Mongolia, the main beneficiary, has lower delivered costs than Australia. From January to August this year, China is expected to import 5.6 million tons from Australia (a 51-percent drop), 3.35 million tons from the US (a 34-percent increase) and 11.35 million tons from Mongolia (a 34-percent increase). Going forward, weak demand in the rest of the world and stable yet slowing growth in China will put a cap on further price rises.
Looking Ahead
HSBC believes Australian cargo prices will retreat in the last quarter and early next year as the Chinese take more coal from Mongolia and the US. Likewise, thermal coal prices should remain stable. HSBC is predicting a small decline in December, and as such, we can expect that both thermal and coking coal prices should be a little softer next year for consumers in North America and Europe. China doesn't need to stop buying to take pressure off prices: a simple moderation in demand by focusing on "domestic" supplies like Mongolia takes the pressure off the seaborne trade and, in turn, US exports.
Vast business and investment opportunities in Mongolia
October 25 (Business Insider) Chinggis Khan has been gone for centuries, but his spirit undoubtedly lives on in Mongolia. Empire-building is in the cultural DNA here.
Mongolians know that they're sitting on trillions of dollars worth of valuable resources, and that the economy is undergoing a rapid transformation. You can see it in their eyes… the energy, the buzz.
Bear in mind that Mongolia is an incredibly young country. The average age is mid-20s, and it's common to see younger people in positions of significant influence. I dined with a director of the local stock exchange yesterday and doubt he was even 35. Same with the bank executives that I met.
This relative youth infuses the local economy with tremendous drive, energy, and creativity. These people don't want to sit back and watch the economic boom happen; they want to be at the forefront of their country's emergence into the developed world. And they know the time is now.
One of the most striking things about Mongolians is that they know they can't do it alone. They want foreign capital… and expertise.
I've traveled to more frontier markets than I can remember, and most of the time when a local sees a foreigner, he thinks, "how can I rip this guy off?" In Mongolia, he thinks, "how can I partner with this guy to build an empire…?"
It's an amazing difference that's echoed throughout the society.
Right when you arrive, you'll get the instant impression that this country welcomes foreign people and their capital. Nobody's going to tear through your underwear looking for dirty bombs or subject you to an intrusive line of immigration questioning.
US citizens, in fact, are entitled to visa-free travel to Mongolia; there's not even a 'visa on arrival' money grab at the airport– you just show up and present your passport as you would in Paris.
Another refreshing thing about Mongolia is that they aren't terrified of a strong currency. With so much foreign investment flowing in to the country, the local tugrik (MNT) has appreciated steadily against the US dollar. Last year it was the world's best performing currency.
Most countries are running away from a strong currency like a scalded dog. Not here. Based on the government's calculations, every 3% appreciation of the MNT will cause a 1% decrease in the general price level. They see this as a major benefit for the Mongolian people.
Then there's the 10% flat corporate tax, protected foreign asset ownership, and rules which allow foreign investors to settle disputes using foreign arbitrators. In sum, it's a good environment for international investors and entrepreneurs.
The thing about Mongolia is that the economy is growing rapidly, but business practices are stuck in the past from when the country was a Soviet satellite. There is limited professional infrastructure, and I'm convinced that the few folks here focusing on this niche will become incredibly wealthy by the end of the decade.
People will think this is crazy. Make a fortune in Mongolia? Yeah, right.
Hey, things change. In the 14th century, Europe was a disgusting backwater where millions of people were dying from plague, starvation, and ridiculous wars. China, meanwhile, was among the most advanced civilizations on the planet.
To a wealthy merchant in the Ming Dynasty, it was INCONCEIVABLE to think that the west would someday dominate the world. But it happened.
Thanks to modern technology and transportation, change happens even faster today. Nations can rise and fall in a matter of decades. Right now as the west declines, it's Asia's time. And Mongolia is well-positioned to be one of the greatest beneficiaries of this trend.
Yes it's cold. It's dirty. It's polluted. It's unpredictable. And English proficiency is atrocious. But for a few intrepid souls out there, Mongolia may be the best place in the world to build your own empire.
Table: Mongolia Related Stocks (Source: Bloomberg)
Name | Symbol | $ | Price | Change | +-% | Open | High | Low | Volume | Time | % YTD | % 12 m | |
Indices | ASX 200 | 4,242.50 | 14.6 | 0.35% | 4,213.10 | 4,257.90 | 4,173.50 | - | 26-Oct | ||||
Nikkei 225 | 8,748.47 | -13.8398 | -0.16% | 8,673.85 | 8,798.80 | 8,642.56 | - | 26-Oct | |||||
Hang Seng | 19,066.54 | 98.3398 | 0.52% | 18,727.96 | 19,106.74 | 18,705.08 | - | 26-Oct | |||||
FTSE 100 | 12,186.06 | 76.3096 | 0.63% | 12,172.43 | 12,208.07 | 12,052.53 | - | 26-Oct | |||||
TSX Composite | 1,242.00 | 12.95 | 1.05% | 1,229.17 | 1,246.28 | 1,221.06 | - | 26-Oct | |||||
S&P 500 | 5,553.24 | 27.7002 | 0.50% | 5,525.54 | 5,576.63 | 5,498.51 | - | 26-Oct | |||||
ASX | Aspire Mining | A$ | 0.395 | 0.01 | 2.60% | 0.38 | 0.4 | 0.375 | 1,217,283.00 | 26-Oct | -17.71% | 51.92% | |
Blina Minerals | A$ | 0.016 | 0.002 | 14.29% | 0.015 | 0.016 | 0.015 | 1,000,000.00 | 26-Oct | 6.67% | -5.88% | ||
C@ | A$ | 0.069 | -0.001 | -1.43% | 0.07 | 0.07 | 0.067 | 338,844.00 | 26-Oct | 146.43% | 305.88% | ||
General Mining | A$ | 0.08 | 0.002 | 2.56% | 0.085 | 0.085 | 0.079 | 433,000.00 | 26-Oct | -33.33% | -52.94% | ||
Guildford Coal | A$ | 0.99 | -0.015 | -1.49% | 0.99 | 1 | 0.97 | 104,518.00 | 26-Oct | 35.62% | 60.98% | ||
Haranga Resources | A$ | 0.22 | 0 | 0.00% | 0.22 | 0.22 | 0.215 | 0.00 | 25-Oct | -65.63% | |||
Hunnu Coal | A$ | 1.79 | 0 | 0.00% | 1.78 | 1.795 | 1.78 | 1,724,268.00 | 26-Oct | 34.08% | 79.90% | ||
Mongolian Res Corp | A$ | 0.26 | 0 | 0.00% | 0.25 | 0.26 | 0.25 | 0.00 | 30-Sep | ||||
Robe Australia | A$ | 0.012 | 0 | 0.00% | 0.012 | 0.012 | 0.012 | 0.00 | 25-Oct | 28.34% | 76.47% | ||
TVN Corp. | A$ | 0.051 | 0 | 0.00% | 0.05 | 0.051 | 0.05 | 431,000.00 | 26-Oct | 410.00% | 628.57% | ||
Voyager Resources | A$ | 0.081 | 0.001 | 1.25% | 0.078 | 0.082 | 0.077 | 10,002,383.00 | 26-Oct | 51.05% | 98.94% | ||
Xanadu Mines | A$ | 0.41 | -0.025 | -5.75% | 0.435 | 0.435 | 0.41 | 14,750.00 | 26-Oct | -27.43% | |||
HKEx | Solartech Int'l | HKD | 0.219 | -0.01 | -4.37% | 0.228 | 0.228 | 0.215 | 16,019,500.00 | 26-Oct | -77.19% | -78.10% | |
Winsway | HKD | 2.47 | -0.01 | -0.40% | 2.35 | 2.49 | 2.32 | 10,903,000.00 | 26-Oct | -45.04% | -32.63% | ||
SouthGobi Resources | HKD | 60.2 | -0.15 | -0.25% | 59.15 | 60.5 | 59.15 | 23,900.00 | 26-Oct | -39.50% | -31.55% | ||
China Gold | HKD | 24.7 | 0.7 | 2.92% | 24.1 | 25.1 | 24.1 | 222,600.00 | 26-Oct | -41.19% | |||
CNNC Int'l | HKD | 1.96 | 0.05 | 2.62% | 1.85 | 1.98 | 1.84 | 402,000.00 | 26-Oct | -77.47% | -71.51% | ||
Real Gold Mining | HKD | 8.86 | 0 | 0.00% | 8.86 | 8.86 | 8.86 | 0.00 | 26-Oct | -34.28% | -33.98% | ||
Mongolia Energy | HKD | 0.7 | 0.04 | 6.06% | 0.64 | 0.71 | 0.62 | 34,561,982.00 | 26-Oct | -69.83% | -77.20% | ||
Zijin Mining | HKD | 3.42 | 0.21 | 6.54% | 3.15 | 3.42 | 3.08 | 44,930,057.00 | 26-Oct | -27.50% | -30.67% | ||
Mongolia Inv Group | HKD | 0.051 | 0 | 0.00% | 0.052 | 0.052 | 0.048 | 9,052,000.00 | 26-Oct | -65.54% | -70.86% | ||
North Asia Resources | HKD | 0.46 | -0.02 | -4.17% | 0.48 | 0.48 | 0.46 | 95,000.00 | 26-Oct | -49.45% | -67.83% | ||
China Daye Non-Fer. | HKD | 0.43 | -0.015 | -3.37% | 0.44 | 0.44 | 0.43 | 1,962,000.00 | 26-Oct | -23.21% | -6.52% | ||
Bestway Int'l | HKD | 0.046 | -0.003 | -6.12% | 0.049 | 0.049 | 0.042 | 500,000.00 | 26-Oct | -67.38% | -70.51% | ||
Asia Coal | HKD | 0.139 | -0.002 | -1.42% | 0.139 | 0.142 | 0.139 | 1,410,000.00 | 26-Oct | -44.40% | -44.40% | ||
Mongolian Mining | HKD | 6.79 | -0.01 | -0.15% | 6.77 | 6.9 | 6.72 | 1,311,890.00 | 26-Oct | -25.14% | -20.58% | ||
SGX | LionGold | SGD | 0.86 | -0.005 | -0.58% | 0.86 | 0.865 | 0.855 | 7,514,000.00 | 25-Oct | 17.81% | 104.76% | |
LSE | Central Asia Metals | GBp | 67 | 0 | 0.00% | 67 | 67 | 67 | 3,800.00 | 26-Oct | -25.76% | -24.29% | |
Petro Matad | GBp | 23.25 | -1.875 | -7.46% | 25.5 | 25.5 | 23.25 | 767,517.00 | 26-Oct | -80.94% | -83.21% | ||
Metal-Tech | GBp | 5 | -0.25 | -4.76% | 5.25 | 5.25 | 4.5 | 5,493.00 | 26-Oct | -67.74% | -67.74% | ||
Origo Partners | GBp | 30.875 | -0.625 | -1.98% | 31.5 | 31.5 | 30.75 | 38,438.00 | 26-Oct | -24.70% | -17.11% | ||
North America | Aberdeen Int'l | CAD | 0.65 | -0.02 | -2.99% | 0.65 | 0.67 | 0.65 | 15,690.00 | 26-Oct | -19.62% | 17.05% | |
Blue Zen Mem. Parks | CAD | 0.16 | 0 | 0.00% | 0.16 | 0.16 | 0.16 | 0.00 | 25-Oct | ||||
Centerra Gold | CAD | 20.1 | -0.3 | -1.47% | 20.37 | 20.76 | 19.95 | 426,491.00 | 26-Oct | 3.48% | 10.20% | ||
China Gold | CAD | 3.27 | -0.06 | -1.80% | 3.48 | 3.48 | 3.26 | 415,245.00 | 26-Oct | -39.78% | -34.21% | ||
Denison Mines | CAD | 1.58 | 0.08 | 5.33% | 1.46 | 1.61 | 1.46 | 2,779,105.00 | 26-Oct | -53.67% | -28.18% | ||
Denison Mines | USD | 1.57 | 0.1 | 6.80% | 1.46 | 1.599 | 1.45 | 2,325,032.00 | 18:40 | -54.09% | -26.64% | ||
East Asia Minerals | CAD | 0.58 | 0 | 0.00% | 0.58 | 0.61 | 0.57 | 382,400.00 | 26-Oct | -92.78% | -91.30% | ||
Entree Gold | USD | 1.678 | 0.008 | 0.48% | 1.68 | 1.735 | 1.61 | 24,113.00 | 18:40 | -51.50% | -37.39% | ||
Erdene Resource | CAD | 0.39 | 0.005 | 1.30% | 0.4 | 0.415 | 0.385 | 105,600.00 | 26-Oct | -68.55% | -22.00% | ||
Entree Gold | CAD | 1.67 | -0.04 | -2.34% | 1.71 | 1.71 | 1.61 | 44,100.00 | 26-Oct | -51.87% | -39.27% | ||
Fortress Minerals | CAD | 4.4 | 0 | 0.00% | 4.4 | 4.4 | 4.4 | 0.00 | 19-Oct | 1.15% | 18.92% | ||
Garrison Int'l | CAD | 0.03 | 0 | 0.00% | 0.03 | 0.03 | 0.03 | 0.00 | 17-Oct | -66.67% | -45.45% | ||
Gulfside Minerals | CAD | 0.075 | -0.005 | -6.25% | 0.075 | 0.075 | 0.075 | 19,000.00 | 26-Oct | -21.05% | -50.00% | ||
Green Tech Solutions | USD | 0.134 | -0.001 | -0.74% | 0.135 | 0.14 | 0.125 | 73,357.00 | 17:20 | ||||
Ivanhoe Energy | CAD | 1.31 | 0.03 | 2.34% | 1.3 | 1.32 | 1.25 | 296,408.00 | 26-Oct | -51.84% | -44.26% | ||
Ivanhoe Energy | USD | 1.3 | 0.04 | 3.17% | 1.29 | 1.3 | 1.24 | 511,044.00 | 17:19 | -52.21% | -43.72% | ||
Ivanhoe Mines | CAD | 18.1291 | 0.3791 | 2.14% | 18.43 | 18.79 | 17.67 | 1,456,238.00 | 26-Oct | -21.18% | -21.22% | ||
Ivanhoe Mines | USD | 18.04 | 0.54 | 3.09% | 18.1 | 18.61 | 17.48 | 2,571,149.00 | 18:40 | -21.29% | -19.69% | ||
Kincora Copper | CAD | 0.32 | 0 | 0.00% | 0.32 | 0.32 | 0.32 | 559.00 | 26-Oct | 18.52% | 166.67% | ||
Khan Resources | CAD | 0.26 | 0.005 | 1.96% | 0.26 | 0.26 | 0.26 | 20,000.00 | 26-Oct | -45.83% | -32.47% | ||
Long Harbour | CAD | 0.12 | 0 | 0.00% | 0.125 | 0.125 | 0.12 | 0.00 | 19-Oct | 14.29% | |||
Lucky Strike | CAD | 0.7 | 0.03 | 4.48% | 0.65 | 0.7 | 0.65 | 23,500.00 | 26-Oct | -51.72% | 250.00% | ||
Lucky Strike | USD | 0.6817 | 0 | 0.00% | 0.6815 | 0.6817 | 0.6815 | 0.00 | 24-Oct | -51.95% | |||
Meritus Minerals | CAD | 0.035 | 0 | 0.00% | 0.035 | 0.035 | 0.035 | 18,000.00 | 26-Oct | -82.50% | -88.71% | ||
Manas Petroleum | USD | 0.185 | -0.005 | -2.63% | 0.185 | 0.185 | 0.185 | 700.00 | 17:20 | -69.17% | -63.00% | ||
Mongolia Growth Group | USD | 4.497 | 0.2155 | 5.03% | 4.699 | 4.699 | 4.444 | 13,000.00 | 17:20 | ||||
Blue Wolf Mongolia | USD | 9.58 | 0 | 0.00% | 9.59 | 9.61 | 9.58 | 0.00 | 14-Oct | ||||
Blue Wolf Mongolia | USD | 10.15 | 0 | 0.00% | 10.15 | 10.15 | 10.15 | 50,400.00 | 17:19 | ||||
Manas Petroleum | CAD | 0.155 | 0 | 0.00% | 0.155 | 0.155 | 0.155 | 0.00 | 25-Oct | ||||
Prophecy Coal | CAD | 0.51 | -0.03 | -5.56% | 0.51 | 0.51 | 0.48 | 322,121.00 | 26-Oct | -41.02% | -19.20% | ||
Prophecy Coal | USD | 0.5123 | -0.0177 | -3.34% | 0.502 | 0.5123 | 0.4846 | 24,956.00 | 17:20 | -41.91% | -17.59% | ||
Puget Ventures | CAD | 0.49 | 0 | 0.00% | 0.00 | 17-Sep | |||||||
SouthGobi Resources | CAD | 7.78 | -0.12 | -1.52% | 7.73 | 7.81 | 7.68 | 23,614.00 | 26-Oct | -36.12% | -33.50% | ||
Solomon Resources | CAD | 0.07 | -0.015 | -17.65% | 0.075 | 0.075 | 0.07 | 100,750.00 | 26-Oct | -67.44% | -80.56% | ||
Wedge Energy | CAD | 0.015 | 0 | 0.00% | 0.00 | 3-Aug | |||||||
Mongolia Growth Group | CAD | 4.53 | 0.03 | 0.67% | 4.73 | 4.73 | 4.49 | 26,050.00 | 26-Oct |
---
"Mogi" Munkhdul Badral
Senior Client Manager / Executive Director
CPS International LLC
Telephone/Fax: +976-11-321326
Mobile: +976-99996779
Email: mogi@cpsinternational.mn
P Please consider the environment before printing a copy of this email.
Central Tower · 12th Floor · Left Wing · 2 Sukhbaatar Square
Sukhbaatar District 8 · Ulaanbaatar 14200 · Mongolia
CPS International is a marketing arm of CPS Securities in Mongolia. CPS Securities is a Perth, Western Australia based AFSL License Holder. To trade ASX and international stocks, feel free to contact me at mogi@cpsinternational.mn or +976-99996779.
Disclosure/Disclaimer
CPS Securities, its directors and employees advise that they may hold securities, may have an interest in and/or earn brokerage and other benefits or advantages, either directly or indirectly from client transactions mentioned in correspondence from CPS International.
CPS International advise this email contains general information only and does not include advice. In preparing this communication, CPS International did not take into account the investment objectives, financial situation and particular needs of any person. As with any speculative mining company there are significant risks.
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