Thursday, December 22, 2011

[CPSI NewsWire: Lippo Group Acquires 7.35% Stake in Haranga]

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.

Wish to subscribe or unsubscribe? Let me know.

See Mongolia related quotes at bottom of newsletter


Announcement made after market close

Lippo Group Becoming Substantial Holder in Haranga with 7.35%

December 22 (Mogi) Lippo Group notified Haranga Resources Limited (ASX:HAR) of becoming a substantial holder through its subsidiary Golden Rain Holdings Limited by acquiring 14.47M HAR shares at 28c on December 20, thus becoming a substantial holder with 7.35% in Haranga.

Lippo Group, headquartered in Indonesia, is one of largest Asian conglomerates with assets under management of $22 billion, according to one news release dating Nov 2011.

Having a giant player such as Lippo Group backing Haranga is potentially a major development for this young company.

Link to Initial Substantial Holder Notice


AKM closed +7.35% to 36.5c on the announcement

Noble Increases Aspire Stake to 10.1% from 8.6%

December 22 (Mogi) Noble Group increased its Aspire Mining Limited (ASX:AKM) stake via on market purchases dating December 15-21 with price ranges 29.75c-35c, raising its stake to 10.1%.

Link to Change in Substantial Holder Interest Notice


Announcement made after market close

Leung Pak To Ceasing to be Substantial Holder in North Asia Resources

December 22 (Mogi) Leung Pak To, through his wholly owned Grandwin Enterprises Limited ceased to be substantial holder in North Asia Resources Holdings Limited (HK:61) by offloading his stake from 6.31% to 4.74%.

Link to release


Robe: Monthly Report

December 21, Robe Australia Limited (ASX:ROB) --

Link to release


GMM rose 0.2c to 4.5c on 22nd

15M GMM Shares Released from Escrow

December 21, General Mining Corporation (ASX:GMM) --

Link to release


MMC closed -2.67% today to HK$5.84

MCS Increases its Short Position on MMC

December 22 (Mogi) Substantial Holder Notice dating December 21 states that on December 16 MCS Group through its wholly owned MCS Mining Group subsidiary increased its short position on Mongolia Mining Corporation (HK:975) from 458.6M shares to 534.4M shares.

Link to Change in Substantial Holder Notice


PCY rose 7.5% on Wednesday

Prophecy Coal: 2011 in review, expects to secure project financing for Chandgana in 2012

December 21 (Proactive Investors) Prophecy Coal (TSE:PCY) provided investors with a full year 2011 recap to its operational activities Wednesday. 

Namely, the company focused on its operations at the Ulaan Ovoo mine, located 430 kilometres from the Mongolian capital city of Ulaanbataar, and about 17 kilometres from the Russian border.

The company advanced the Ulaan Ovoo project to production, having mined 230,000 tonnes of coal to date, and selling a total of 130,000 tonnes of coal.

In the fourth quarter of 2011, Prophecy signed several sales agreements for 90,000 tonnes of coal, with buyers from both Russia and Mongolia.

Prophecy expects Ulaan Ovoo to produce between 300,000 to 500,000 tonnes of coal in 2012, with increasing sales to Russia and at higher selling prices.

The company also said it expects the Russian border crossing at Zeltura, located about 10 kilometres from the mine, to open in 2012, which will reduce transportation costs.

While selling coal through the Russian eastern seaports has been complex and difficult, Prophecy said, it will further pursue this option in the second half of 2012, after it focuses first on its Chandgana Power Plant project.

In November, Prophecy received a construction license for its 600 megawatt (MW) power plant - the first in Mongolian history. The plant will be located at the mouth of the Chandgana Tal coal mine, which Prophecy secured a mining license for in 2011.

Construction for the plant is expected to start in 2013, with completion slated for 2016. Prophecy said it plans on securing up to 80 percent of the required capital through debt financing from Chinese policy banks. To raise the remaining capital in equity, the company said it will rely on the financial model from the completed Evonik-Steag power plant feasibility study.

Prophecy said it hopes to sign an equipment, procurement and construction (EPC) contract as well as a power purchase agreement (PPA) by mid-year 2012, and complete the financing of the Chandgana project by the end of 2012.

Also this year, Prophecy completed the spin-off of its Canadian assets to Prophecy Platinum (CVE:NKL), in which it holds 22.5 million shares, or 40.8 percent. It also graduated to trading on the Toronto Stock Exchange, from the more junior TSX-Venture market.

"With a substantial coal resource in Mongolia and 22.5 million shares of Prophecy Platinum, Prophecy Coal is currently trading below its book value," said the company in a statement.

"While market volatility in the past several months has discouraged some of our shareholders, the Company has remained focused on unlocking the tremendous value of our 1.2-billion-tonne Chandgana coal resource, which is approximately 350 km from China, the world's most populous country and second largest economy."

As of 12:30 pm EDT, Prophecy Coal shares traded up 3.75 percent to $0.415.

Link to article

Link PCY release


Winsway closed -2.54% on Thursday

Winsway (01733) "BB-" rating remains on Watch Negative - S&P

December 22 (ET Net) Standard & Poor's Ratings Services today kept its 'BB-' long-term corporate credit rating on China-based Winsway Coking Coal Holdings Ltd. (01733) and its 'BB-' issue rating on the company's senior unsecured notes on CreditWatch with negative implications

The agency also kept its 'cnBB+' Greater China scale credit rating on the company and its notes on CreditWatch with negative implications.

The CreditWatch status reflects S&P's view on the potential risks associated with Winsway's indirect acquisition of 60% of the issued shares of Grande Cache Coal Corp. (GCC), a Canada-based coal mining company. The acquisition will expose Winsway to coal price volatility and coal mine operating risks outside of China, where the company has limited track record, the agency noted. 

Winsway's likely significant upstream investment in coal mines will increase its exposure to mine-operating and coal-price risks. Such a strategy could dilute the company's business model, which emphasizes asset-light trading operations with limited inventory and manageable exposure to coal price volatility. The coal price risk is likely to heighten in the next 12 months. S&P believes coking coal prices in 2012 will be under pressure as domestic steel mills continue to reduce capacity with weakening demand and a slowing economy.

"We believe coal mine operating risk became more uncertain after Alberta Securities Commission's (ASC) allegation on Dec. 8, 2011, against three GCC senior executives of insider trading. The joint-venture bidder plans to retain the GCC senior management team to mitigate execution risk. However, the allegation raises the likelihood of significant turnover in GCC's senior management." it said.

"We aim to resolve the CreditWatch status within the next three months. We will analyze information regarding bridge loan financing for the announced acquisition, cost competiveness for Canadian coal sold in China and Asia, and the transportation capacity to support GCC's increased annual production." the agency added.

Link to article


Government rejects export tax on coal and iron ore

December 22 ( At the Government meeting on Wednesday members discussed a draft law on export taxes that was submitted by MPs P.Altangerel and N.Ganbyamba

The members did not approve further discussion of the draft law because it would have levied a five percent tax on coal and iron ore exports, based on the estimated sale price. Members pointed out that companies already pay an income tax, a value added tax, a tax for exploiting mineral resources, and a royalty tax. 

Members said the export tax would make overall taxes too high on companies, which could stifle development in the coal and iron ore sectors, since mining is one of the country’s leading economic engines. They said it could also stifle investment in the mining sector. 

Members decided that the draft law should be discussed by the Customs Tariff Council, which should solicit the opinions of experts on the matter.

Link to article



Ulaanbaatar, Mongolia, December 21 /MONTSAME/ A trilateral national committee has released a recommendation on intensifying the realization of the law on prohibiting the exploration and exploitation of mineral resources on reserved lands with sources of rivers, water resources and forest funds.

At the cabinet meeting on Wednesday, a head of the Cabinet Secretariat of Government Ch.Khurelbaatar introduced the recommendation to the cabinet. Then orders were given to related Ministers to take necessary measures for implementing this  recommendation and to put control over its realization.

The trilateral national committee says it is important that the General Agency for Specialized Inspection (GASI) stops  activities on the reserved lands, except environmental rehabilitation, mining block and environmental monitoring, for the Mineral Authority--to annul special licenses of entities that do not rehabilite the lands in accordance with the cabinet resolution, for the Ministry of Environment and Tourism--to set borders of the reserved lands and to have them approved by the cabinet, and for related Ministries--to thoroughly inspect special licenses for placer deposits of gold that lay outside of the reserved lines.

Civil and specialized organizations are advised to partake in monitoring of over rehabilitation expenses made by those entities  owning the special licenses for placer deposits of gold on the reserved lands.

Link to article


S.Byambatsogt sends query to Minister D.Zorigt (about MEC’s Khushuut)

December 21 ( MP S.Byambatsogt has sent a query to Mineral Resources and Energy Minister D.Zorigt

Kh.Battulga asks the minister about Khushuut mining, which is located in Darvi and Tsetseg soums of Khovd aimag. The Chinese company Mon En Co LLC owns Khushuut mining, and local residents have for some time been asking the state to list the mine as a strategic deposit mine. 

Byambatsogt, who was elected from Khovd aimag, says some MPs, including some from Khovd, oppose the listing.

That is why Byambatsogt sent the query to Minister D.Zorigt. In it he writes:

If some MPs have asked the Ministry of Mineral Resources and Energy to not list Khushuut mining as a strategic deposit mine, the minister should publicly say so.

1.    Mon En Co LLC says on its website that Khushuut has 460 million tons of coal, but it has informed the Hong Kong Stock Exchange that the mine has 2.5 to 4.5 billion. What were the results of exploration at Khushuut from 2008 to 2010? The size of the deposit could be a criterion for listing the mine, and the minister should state his opinion on listing the mine.

2.    Can the minister explain the construction of a 36-megawatt power plant in connection with the mine? Could mining at the site end after ten years, if eight million tons of coal are annually exploited? In that case, does construction of the power plant have any economic benefit?

3.    A cooperation contract was made between Mon En Co LLC and Khovd aimag on April 7, 2011, but implementation has not had good results. Besides, the company has not fulfilled its tax obligations. Has the ministry monitored these matters? 

4.    Could the ministry explain how negative environmental impacts will be mitigated and future plans for environment protection?

Link to article



December 21 (MSE) According to the Mongolian Stock Exchange Chief Executive Officer’s resolution No.230 of Dec 20th 2011, Financial Regulatory Commission’s decree No.119 of April 21st 2011 and article No 50.2, 57 of “Mongolian Stock Exchange Listing Rule”, Darkhan guril tejeel” JSC’s 582 812 additional shares with par value of 100 tugrik delisted from Mongolian Stock Exchange registration. Its total of 614603 shares with par value of 100 tugrik will remain at Mongolian Stock Exchange listing.

Link to release


Finance Minister reports on state investment

December 22 ( Finance Minister S.Bayartsogt reported on state investment at the Government meeting on Wednesday. 

Members decided to deliver the report to the National Security Council. The report says investment increased to MNT 1.2 trillion in 2011. The report notes that that figure is 31.5 times the amount invested in 2000. Private investment was estimated to be 1.75 times more than state investment in 2011

The Finance Ministry and the National Development and Renovation Committee have projected GDP to 2015. The projected GDP in 2012 is MNT 18,063.6 billion; in 2013 MNT 21,787 billion; in 2014 MNT 26,231 billion; and in 2015 MNT 31,788 billion. Budget investment will be MNT 6,314.7 billion in 2012; MNT 6,789.5 billion in 2013; MNT 6,906.5 billion in 2014; and MNT 7,515.4 billion in 2015.

The Government plans to implement projects worth MNT 35.68 trillion through 2016, including the 100,000 apartments program, Sainshand Industrial Complex, and railway projects with the assistance of Development Bank loans. It is also planning to make policies to support private investment in the infrastructure sector. 

Link to article


Budget to be amended for salary increases

December 22 ( At the Government meeting on Wednesday members discussed amending the 2012 budget to account for salary increases. The Government asked Finance Minister S.Bayartsogt to prepare a suggested amendment to provide for salary increases on February 1, 2012 and May 1, 2012. 

Teachers went on strike for a week this month demanding a raise on January 1. An agreement brokered by the premier last week calls for the teachers’ salaries to increase in February, but not in March. 

The agreement also calls for teachers and other employees of secondary schools and kindergartens to receive compensation consistent with average salaries. 

Link to article


Registered Coal Resources Increased by 8.4Bt

December 21 ( The Ministry of Mineral Resources and Energy reported that 112 minefields of 14 kinds of minerals resources were newly discovered and registered in the Mongolian State Professional Committee on Mineral Resources.

As the demand and price of metal and coal increased on the world market in the latest years, the investments in iron ore, copper, gold and fluoride exploration increased accordingly.

For instance, 23 gold , 7 iron ore, 4 copper and 27 coal mines were newly discovered , with determined supply capacities. The total supplies increased with 35 tons of gold , 60 thousand tons of wolfram, 30 million tons of iron ore and 8.4 billion tons of coal. In 2011 exploration works conducted at 2,430 licensed places for a cost of 235 billion MNT by self invested fund .

Link to article


Citizens still waiting for “100,000 Apartments” program to start

December 22 ( The Government set a goal of building 100,000 new apartments between 2008 and 2012, with the aim of providing housing for low- and middle-income families. The program aims to build 750,000 apartments in Ulaanbaatar and 250,000 in local settlements. 

But the Government has not implemented the program in 2011. It blames the Development Bank, which was established to finance the program but did not function for some time due to a lack of capital. The bank recently borrowed USD 20 million at seven percent interest, but its first project will be railway construction

The Government says it will implement the program when it sells bonds on foreign markets in 2012

Also, commercial banks have increased interest rates due to the Mongol Bank’s strong monetary policy. Banks had interest rates of 1.3 percent before October 2011, but now banks have interest rates between 1.6 and 2.0 percent. 

The Government decided to take out a six-percent loan to finance the 100,000 apartments project. But it has not gone through yet because Mongol Bank has opposed the Government’s decision. Mongol Bank President L.Purevdorj said if all apartment loans are at six percent, that would damage the country’s economy. 

Link to article



Ulaanbaatar, Mongolia, December 21 /MONTSAME/  The law on the parliamentary election has been approved and sent to the State Head Ts.Elbegdorj for an acquaintance. Until December 27, he has a right to put a veto on the law, said on Tuesday N.Enkhbold, the Vice Speaker of Parliament and leader of the working group, and J.Sukhbaatar, a head of the Standing committee on state structure.

According to the amendment, a candidate who, during the election campaign, attempts to gain electorate's votes will bear a stern responsibility. A candidate is forbidden to give people handouts, cash, presents, to provide them with discounted or free-of-charge services, to organize receptions for voters.

If a program of a party or coalition reflects a financial resource in its platform, the cost balance must meet the special requirement reflected in the budget stability law. A political party, coalition or an independent must not promise people money, capitals and any benefits from mineral resources.

The election committee is to be comprised of state or administration servants only. The registration of voters is given to the authority of civil registration only. The domestic migration is to be stopped 30 days prior to the voting day. A special law has been approved to carry out the election through automatic systems.

Then N.Enkhbold and J.Sukhbaatar answered some questions.

As they say, voters will not receive electoral certificates. “Instead of it, the citizens will use their smart ID cards.”

For living abroad Mongolians, a proportional voting system will be available only when voting at Mongolia's embassies. Last year, a revised population census counted over 100 thousand Mongolians abroad. They will vote in some 30 countries in accordance with a rule that will be created by the General Election Committee (GEC) and the Ministry of Foreign Affairs soon. For the time being, two criteria are known--to vote in proportional system and to take part personally. The voting papers from countries will be collected at least 15 days prior to the voting day and will be sent to the GEC so as to count them together with "domestic" papers.

As the voting day is a working day, it will be announced as the holiday.

Link to article


BILL ON VAT EXEMPTION BACKED (by Cabinet on imported agricultural equipment)

Ulaanbaatar, Mongolia, December 21 /MONTSAME/ On Wednesday, the cabinet backed in principle a draft law on exemption of value-added tax and customs tax.

The government has considered as necessity to discuss it together with a draft amendment to the law on exemption of VAT, which has been worked out by the cabinet. The first one has been drawn up by G.Batkhuu MP.

He wants to free from the VAT and customs tax the imported agricultural facilities such as tractors, combine harvesters, machines, equipment for flour mills, irrigation, fertilizers and pesticides, until December 31, 2016.

Link to article


Mongolia Ranks 69th in The Economist’s The Democracy Index 2011, Down 5 Places from 2010

December 21 ( --

Link to article

Link to The Democracy Index 2011 site


WHO: Air pollution kills 1,600 people in Ulaanbaatar annually

December 21 ( On Tuesday, the World Health Organization (WHO) released a report that says air pollution kills 1,600 people annually in Ulaanbaatar.

Ulaanbaatar is consistently ranked as one of the most polluted cities in the world. The WHO report looked at air pollution’s impact on health in the city since 2008. The research was carried out with the assistance of the Ministry of Nature, Environment and Tourism. The research also found that air pollution causes lung and heart problems in 8,500 people every year. 

The report says the concentration of dust particles in the air is 35 times the standard recommended by the WHO. The concentration was especially high in ger districts, where residents typically burn garbage. That means poor and vulnerable households are most affected by air pollution. In fact, the report says the incidence of health problems related to air pollution is many times higher in ger districts than in the city center. 

The report says power plants are responsible for 30 to 40 percent of the air pollution in Ulaanbaatar. Specialists say that is why power plants should take measures to reduce emissions. 

According to the World Bank, low-cost policies should be implemented within three years to reduce air pollution in the capital. Officials suggest centralized electric-heating systems and planting more trees. For the long term, officials suggest replacing ger districts with apartment blocks. 

Link to article




"Mogi" Munkhdul Badral

Senior Client Manager / Executive Director

CPS International LLC

Telephone/Fax: +976-11-321326

Mobile: +976-99996779


P Please consider the environment before printing a copy of this email.


Suite 1213 · Level 12 · 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 or +976-99996779.



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.



No comments:

Post a Comment