Wednesday, March 14, 2012

[CPSI NewsWire: Haranga Announces A$6M Placement to Lippo Group, Increasing Stake from 7.35% to 13.92%]

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. Follow CPSI NewsWire on Twitter, Facebook


Haranga: $6 Million Placement to the Lippo Group 

March 14 -- Haranga Resources Limited (ASX:HAR) has agreed to issue 15 million new shares to Golden Rain Holdings Limited, a wholly owned subsidiary of Lippo China Resources Limited, itself a member of the Lippo group of companies (the "Lippo Group").

The key terms of the Agreement are as follows:

      15 million new shares will be placed to Golden Rain Holdings at $0.40 per share for a total consideration of $6 million.

      Placement is at a discount to the last closing price of $0.48 on 13 March 2012 but on par with the 30 day VWAP.

      On completion, the Lippo Group will increase its ownership of the Company's issued share capital from 7.35% to 13.92% and will continue to be the Company's largest shareholder.

      The Lippo Group have agreed to enter into a voluntary lock up period of 12 months for its entire 13.92% shareholding.

      The Lippo Group are a major Asian conglomerate with varied assets and investments that include mineral resources interests in Indonesia, Australia, China, Mongolia and the USA.

This placement represents a vote of confidence in Haranga from its largest shareholder and reflects a growing acceptance of the high commercial and strategic value of the Company's iron ore assets in Mongolia.

The 12 month lock up period affirms the Lippo Group's long term support for Haranga Resources. Haranga Resources now has a blue chip Asian conglomerate as its major shareholder and the Company is looking forward to working together with the Lippo Group to enhance its future growth trajectory and to maximise value for all Haranga shareholders.

The funds raised will enable the Company to complete the drilling required to define the full mineral inventory at its Selenge iron ore asset, to complete the Selenge Project Scoping Study, to complete the process of obtaining a Mining Licence at Selenge and to pursue potentially significant additional iron ore acquisitions in Mongolia without need for further funding.

Link to release


Mongolian Mining (00975) mulls USD senior notes issuance

March 14 (ET Net) Mongolian Mining Corporation (00975) said it proposes to issue US dollar denominated guaranteed senior notes due 2017. 

The proposed issue of the notes will be arranged by ING Bank N.V., Singapore Branch, J.P. Morgan Securities Ltd. and Merrill Lynch International as Joint bookrunners, and together with Standard Bank Plc and Standard Chartered Bank as joint lead managers. 

Approval in-principle has been received for the listing and quotation of the notes on the Official List of the SGX-ST. 

The proposed notes issuance is for financing transportation infrastructure improvement and development projects, including, without limitation, for our UHG-GS railway project as well as for working capital and other general corporate purposes, including, without limitation, for exploration and debt refinancing. (HL) 

Link to article

Link to MMC release


Moody's assigns "B1" rating to Mongolian Mining; stable

March 14 (ET Net) Moody's Investors Service has assigned a B1 corporate family rating to Mongolian Mining Corporation (MMC)(00975). At the same time, Moody's has assigned a provisional (P) B1 rating to its proposed five-year senior notes. 

The outlook for both ratings is stable. This is the first time that Moody's has assigned ratings to MMC. 

The bond proceeds will be used for capital investments, and general corporate purposes. 

The provisional status of the notes will be removed once the issuance is completed. 

"MMC's rating reflects its status as the largest integrated coking coal mining company in Mongolia, its competitive cost position, and its first-mover advantage over its domestic coal peers," said Simon Wong, a Moody's Vice President and Senior Analyst. 

"Its low production costs, price advantages, and proximity to China, the largest consumer and a net importer of coking coal, also gives it an edge over seaborne competitors." he added. 

The credit rating agency said prices of coking coal exported from Mongolia are lower than the international market, giving MMC a competitive edge against the seaborne market

Furthermore, its integrated operation -- including paved road access to the Chinese border, its coal-fired power plant, and most importantly its position as the first company in Mongolia to own and operate a coal handling and preparation plant (CHPP), with a coal washing capacity of 10 million tonnes per annum -- allows it to sell hard coking coal direct to end-users in China at higher prices and margins, Moody's added. 

Moody's considers that MMC is well positioned to benefit from the strong outlook for Mongolian coal exports. AME, an industry consultant, expects China's coking coal imports to increase 4.7% in 2012 to 46.1 million tonnes, and grow at 7.1% CAGR between 2013 and 2016. 

But, counterbalancing these credit strengths are a number of major credit challenges. 

"MMC's operations are wholly exposed to the evolving regulatory environment and emerging market risk of Mongolia (B1/stable). Furthermore, it has a total reliance on China as it takes 100% of its products," Wong said. 
"In addition, MMC has a short operating track record and strong reliance on key contractors to achieve its production targets," he added. 

For example, Leighton Asia, a subsidiary of Leighton Holdings (Baa2/Stable), is its sole mining contractor. But, such risk is mitigated by Leighton's extensive mining experience, as well as its strong on-site track record, including high productivity and a zero fatality rate. Furthermore, the contract with Leighton is structured to incentivize for outperformance, Moody's noted. (KL)

Link to article


S&P Assigns 'B+' Rtgs To Mongolian Mining Corp

March 14 (S&P) --


-- Mongolia-based MMC has high mineral and customer concentration; it's also exposed to the country's untested and evolving regulatory environment.

-- MMC's reduced project development risk, first-quartile cost position, and moderate debt levels partly offset these limitations.

-- Given these factors, we are assigning our 'B+' corporate credit rating to the company and a 'B+' issue rating to its proposed senior notes.

-- The stable outlook reflects our expectation that MMC's coal sales will grow steadily and profitability will be sustainable over the next two years.

Rating Action

Standard & Poor's Ratings Services on March 14, 2012, assigned its 'B+' long-term corporate credit rating to Mongolia-based Mongolian Mining Corp. (MMC). The outlook is stable. At the same time, we assigned a 'B+' issue rating to the proposed issue of senior notes due 2017.


The rating on MMC reflects the company's mineral concentration to coking coal, customer concentration risks, and its exposure to an untested and evolving regulatory environment in Mongolia (BB-/Positive/B). The company's reduced project development risk, first-quartile cost position, and moderate debt levels partly offset these limitations.

MMC's high mineral concentration exposes its cash flows to coking coal price swings, and ties it closely to the cyclical Chinese steel sector. MMC's 100% exposure to a fairly concentrated base of Chinese clients exacerbates this risk, in our opinion. The concentration subjects the company to counterparty risk and to its clients' bargaining power. In addition, potential bottlenecks within the transportation system in China could indirectly affect MMC's competitive position as a coal supplier to the Chinese market, compared with domestic market participants located closer to the end market.

In our view, Mongolia's untested mining regulatory framework could affect MMC's cash flow stability. We believe the government is still calibrating its policy towards the mining sector to balance economic development and social considerations. While the risk of expropriation of private mines is remote, in our opinion, currently favorable tax and royalty regimes could give the government some leeway to raise mining taxes without making current or prospective projects uneconomical.

We expect MMC to increase production with limited additional capital spending, highlighting its project-execution strength. The company completed major infrastructure projects in 2011 and 2010. The involvement of Australia-based mining services company Leighton Mining as the contractor for MMC's Ukhaa Khudag (UHG) mine and the lack of significant weather-related risks also mitigate production ramp-up risk, in our opinion.

We estimate that the company could still be marginally profitable on a gross margin basis (excluding selling, general and administrative expenses) even if its average selling price declines by about 35%. We also expect cash costs to remain fairly stable over the next two to three years, given the predictable nature of the fees that the company pays to Leighton.

We consider MMC's financial risk profile as "significant," as defined under our criteria, primarily because of its moderate leverage. We project the ratio of total debt to EBITDA at 2.6x in 2012, declining to 2.1x in 2013. Coal sales are likely to be about 7.2 million tons in 2012 and 10.6 million tons in 2013. We expect gross profit per ton of coal sold of US$35-US$45 over the next three years under our base-case scenario, translating into an EBITDA margin of 35%-40%. Additional EBITDA and cash flows from greater coal sales would temper a potential increase in absolute debt by 2014 if a planned railway project proceeds. We expect MMC's financial risk profile to remain within our "significant" category under this scenario.

The issue rating on the proposed senior notes reflects the 'B+' long-term corporate credit rating on MMC. The issue rating is subject to our review of the final issuance documentation, and confirmation of the amount and terms of the notes. Energy Resources LLC, MMC's main operating subsidiary, and other subsidiaries unconditionally guarantee the proposed notes. The notes are subordinated to about US$169 million of senior bank loans from the European Bank for Reconstruction and Development (EBRD; AAA/Stable/A-1+), Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden N.V. (FMO), and Deutsche Investitions und Entwicklungsgesellschaft mbH (DEG). The notes are secured by first liens on the capital stocks of MMC's subsidiary guarantors, including Energy Resources LLC. MMC expects to use the proceeds from the proposed notes for capital expenditure, working capital, and general corporate purposes.


In our view, MMC's liquidity is "adequate," as defined in our criteria. The company's liquidity is sensitive to coking coal prices and production volumes. Nevertheless, we believe the company can fund its short-term debt repayment and capital spending with its internal cash flows, cash balance, and the proceeds from the proposed notes. We expect MMC's liquidity sources to exceed its liquidity needs by about 1.2x or more over the next 12 months. We also anticipate that the company's liquidity sources will exceed its needs even if EBITDA declines by 20%.

Our liquidity assessment incorporates the following factors and assumptions:

-- Liquidity sources over the next 12 months include our expectation of about US$240 million of funds from operations (FFO). The company had about US$227.8 million in cash and cash equivalents as of Dec. 31, 2011. We also factor into MMC's liquidity sources the expected proceeds from its proposed notes and funds under a committed bank facility from Standard Bank PLC and ING Bank N.V. whose amount is currently being negotiated.

-- Liquidity needs over the next 12 months include our expectation of about US$535 million in capital expenditure, about half of which MMC will dedicate to the railway project. Liquidity needs also include about US$334.8 million in short-term debt and the US$85 million repayment of the company's convertible bond. We have not factored any dividend distribution into our 2012 financial forecast.


The stable outlook reflects our view that MMC is likely to significantly increase its sales volume and maintain its profitability range over the next two years, further supporting cash flow protection. We expect its coal sales to rise to about 7.2 million tons in 2012 and about 10.5 million tons in 2013, while the gross profit per ton should remain at US$35-US$45. These assumptions would translate into a ratio of total debt to EBITDA of 2x-3x and a ratio of FFO to total debt of 25%-35%.

We could revise the outlook to positive or raise the rating if the company develops a longer operating track record, resulting in improved visibility over its financial performance and a stronger financial risk profile, with a ratio of total debt to EBITDA below 2x and FFO to total debt above 35% on a sustained basis. This could materialize due to a combination of: (1) coal sales exceeding 7.5 million tons in 2012 and 950,000 tons on a monthly basis over the first six months of 2013 because of more rapid ramp-up than anticipated; and (2) gross profit per ton exceeding US$50 on a sustainable basis because of higher coking coal prices or lower mining costs.

We could revise the outlook to negative or lower the rating if MMC's production ramp-up or coal sales are lower than we expect or if coking coal prices decline materially, with a ratio of total debt to EBITDA above 3.5x and a ratio of FFO to total debt below 20%. This could materialize due to a combination of: (1) coal sales falling below 6 million tons in 2012 and 750,000 tons on a monthly basis over the first six months of 2013 because of slower ramp-up, or coal sales interruptions; and (2) gross profit per ton declining below US$35 on a sustainable basis because of lower coking coal prices and higher mining costs or royalty rates.

Link to release


FeOre: Interim Results – Media Release

Bermuda, 14th March 2012:  FeOre Limited (ASX: FEO) reported interim results for the period ended 31 December 2011.  FeOre Limited completed an Initial Public Offering (IPO) on the Australian Stock Exchange (ASX) in December  2011 and is well positioned for exploration and development of iron ore projects in Mongolia and specifically the Company's main project, the Ereeny deposit within 500km of the China-Mongolia border.  Main highlights of the results report:

·         IPO completed in December 2011 on the ASX.  The Company raised US$17.9 million in the IPO and also raised US$25.6 million from professional wholesale and institutional investors.  FeOre also issued a convertible bond for US$25 million.  These funds were used to acquire an 80% controlling interest in the primary project of interest - the Ereeny Project in Mongolia and balance reserved for project development activities.

·         As at 31 December 2011 the Company had net assets of US$74 million with cash assets of US$31 million.

·         Completion of six additional drill holes to plan the production and to optimise ore processing design.

·         Engagement of Changsha Research Institute of Mining and Metallurgy Co., Ltd, a leading metallurgic design institute in China, to conduct metallurgic studies and also the engagement of MCC Capital Engineering & Research Incorporation Qinhuangdao Co. Ltd to perform mine plan design for the Ereeny Project.

·         Key electricity design and construction completed over the past quarter.

·         Progress on project financing discussions with interested parties and the establishment of teams and procedures for the management of the mine development.

The Company announced earlier this week the commencement of Chief Executive Officer Mr George Wang who is a seasoned senior executive with 30 years experience in mining both within China and internationally with leading mining companies. Mr Wang was formerly the Chief Engineer of Western Mining Co Ltd, one of the largest state-owned mining enterprises in China.  In commenting on his appointment Mr Wang said "I am excited to finally be involved in commercialising this great resource, as I have known about it for a while and I know this ore body well. It will be refreshing for me to focus on one mine and dedicate my attention to optimising the pit and mine design".

FeOre Limited has also announced the engagement of, Changsha Research Institute of Mining and Metallurgy Co., Ltd, a leading metallurgic design institute in China, to conduct metallurgic studies on the recently drilled ore samples of the Ereeny Project to optimize the ore processing design.  A further contract has also been announced with MCC Capital Engineering & Research Incorporation Qinhuangdao Co. Ltd to perform mine plan design for the Ereeny Project.

Mr Tim Sun, Chairman of FeOre commented on the appointment of Mr Wang and progress of the company since the IPO said "The Board is pleased with the support of investors during the IPO process and the strong progress to date in the development of the Ereeny Project.  We are also delighted that Mr Wang has joined our team to help lead the finalisation of mine designs and feasibility studies at this critical stage. His wealth of experience will ensure we are diligent upon every step, and aid the company's successful leap into the next phase of growth," 

Link to release

Link to Interim Results Report


MATD: Board Changes

March 13, Petro Matad Limited (LON:MATD) --

Petro Matad announces the appointment of three non-executive directors, and the retirements of Dr John Robertson and Sarangua Davaadorj

As directors, Dr Robertson and Ms Sarangua guided the growth of the Company from its initial listing on the London Stock Exchange.  They are both retiring to pursue other business interests.  In addition to the retirement of Gordon Toll in January, their resignations have allowed the Company to continue its ongoing development with appropriate additions to the board. 

The Company has appointed Philip Vingoe, George Watkins and David Skeels to the board of directors with immediate effect. 

Dr Philip Vingoe has over 35 years' experience of the oil and gas industry. Dr Vingoe began his career with BP, where he spent nearly 20 years and was Chief Geophysicist and General Manager for worldwide exploration.  Since leaving BP, he has been involved with the start-ups and IPOs of Novus Petroleum and Panoro Energy, among others and has spent five years as Managing Director of Sasol Petroleum

Dr George Watkins has nearly 45 years' experience in the oil and gas industry. Dr Watkins began his career with Shell before moving to Conoco, where he spent the next 30 years, with 10 as Chairman and Managing Director of Conoco UK Ltd.  For the last 10 years, he has held a number of non-executive directorships at companies including Xtract Energy plc, Paladin Resources plc and Abbot Group plc. He is also a governor of the Robert Gordon University in Aberdeen. 

David Skeels is a geologist with nearly 45 years' experience of working in the oil and gas industry, including 20 years at Conoco focusing on upstream development and 10 years at BG Group where he was General Manager in Kazakhstan. Recently he has been working with governments and state organisations across Eastern Europe and Azerbaijan. 

Commenting on the appointments, Douglas McGay, CEO of Petro Matad said: 

"Petro Matad is delighted to announce the appointment of three such prominent figures within the industry to its board.  Their experience and qualifications are outstanding.  With this set of appointments, the Board has been strengthened by the addition of 125 combined years of oil and gas industry knowledge and experience.  Both myself, my fellow directors and our management look forward to working with them. 

"Dr Robertson and Ms Sarangua are retiring from the Petro Matad board of directors. Dr Robertson had extremely valuable input as an active and conscientious non-executive director and Ms Sarangua imparted legal expertise, international banking experience and Mongolian wisdom.  On behalf of the board and the shareholders I would like to thank John and Sara for their hard work over the last 4 years with Petro Matad.  Both of them have been fundamental to the Company's growth, both on its IPO and since, and the Company and everyone at Petro Matad have benefited from their invaluable contributions." 

Schedule 2 Disclosures 

For the purposes of AIM Rule 17 and Schedule 2(g) of the AIM Rules, the Company makes the following disclosures: 

David Skeels (aged 64) is also a director of Phoenix Hydrocarbon Europe Ltd and Eurasian Energy Ventures Limited.  

Philip Vingoe (aged 66) is also a director of Panoro Energy ASA, Panoro Energy Ltd, African Energy Equity Resources Ltd, Pan-Petroleum Gabon BV. Pan-Petroleum Holding Cyprus Ltd, Energy Equity Resources Nominees Ltd and Energy Equity Resources Cayman Islands Ltd. Within the last five years, Philip Vingoe has also been a director of Energy Equity Resources (Norway) ltd and a partner of Ingenious Games LLP. 

George Watkins (aged 68) is also a director of GW Associates Ltd, Xtract Energy plc and Bridge Resources Corporation. Within the last five years, George Watkins has been a director of Abbot Group plc, ITI Scotland Ltd, The Maersk Company Ltd, Maersk Energy UK Ltd, Defence Procurement Agency and Production Services Network Ltd.  

There are no further disclosures for the purposes of AIM Rule 17 and Schedule 2(g) of the AIM Rules.  

Link to release


MRC: Appointment of Non-Executive Director

March 14 -- The Board of Mongolian Resource Corporation Limited (ASX:MUB) announces the appointment of Sereeter Galsan Jamts as a Non-Executive Director of the Company.

Resident in Mongolia, Galsan was educated at the Moscow Institute of International Relations and completed a Master's degree in Military Science at the Defense University in Mongolia.

Galsan has had extensive experience at senior levels in the Mongolian Defence Ministry, the Foreign Trade Corporation and was an Attaché at the Mongolian Embassy in Pyongyang, DPRK.

Since 2010, Galsan has been a consultant, located in Mongolia, with Tera International Group Inc., a US based group.

Link to release


SouthGobi Resources comments on recent share price activity

HONG KONG, March 14 – SouthGobi Resources Ltd. (TSX: SGQ, HK: 1878) SouthGobi notes its share price fell by 9.9% and 7.6% in Toronto and Hong Kong respectively on 12 March 2012, with trading volumes substantially above recent averages. The Company believes the activity is associated with the announcement by Standard & Poor's Canadian Index Operations after the close of trading on 9 March 2012 that its shares would no longer be included in the Quarterly S&P/TSX Composite Index with effect from 19 March 2012. It is highly likely that index fund based investors are reducing holdings of SouthGobi shares.

Link to release


CNBC: Investing in Mongolia's Resources Sector, Interview with Travis Hamilton

March 11 (CNBC) Travis Hamilton, Managing Director, Khan Investment Management, and Uwe Parpart, MD & head of research at Reorient Financial Markets, say the Mongolian resources sector will be an attractive play this year because of increased investments in infrastructure.

Link to video


Development Bank of Mongolia Said to Market Bonds at 6% - 6.25%

March 14 (Bloomberg) The Development Bank of Mongolia LLC is marketing a sale of U.S. dollar bonds to yield about 6 percent to 6.25 percent, according to a person familiar with the matter.

The company hired Deutsche Bank AG, HSBC Holdings Plc (HSBA) and ING Groep NV to help arrange a series of credit investor meetings from March 8, another person familiar with the matter said last week. The Development Bank of Mongolia is wholly-owned by the government of Mongolia.

Link to article


Mongol Bank sells US$45.2M at ₮1,340

March 13 (summarized from Mongol Bank) Mongol Bank sells US$45.2M at ₮1,340 on March 13. MNT closed at ₮1,340.90 on same day.

Link to release


World Bank Video: Mongolia: Striking a Balance between Development and Environmental Protection

March 8 (World Bank) As mining has driven Mongolia to be one of the world's fastest-growing economies, local and international efforts are mounting to ensure its environment won't pay a heavy price.

Link to video


Moody's Disclosures on Credit Ratings of Mongolia, Government of

Singapore, March 13, 2012 (Moody's) -- The following release represents Moody's Investors Service's summary credit opinion on Mongolia, Government of and includes certain regulatory disclosures regarding its ratings. This release does not constitute any change in Moody's ratings or rating rationale for Mongolia, Government of.

Moody's current ratings on Mongolia, Government of are:

Long Term Issuer (domestic and foreign currency) ratings of B1

Short Term Issuer (domestic and foreign currency) ratings of NP


Mongolia's B1 government bond rating is consistent with our methodology scores of low economic and institutional strengths, moderate government financial strength and high event risk. Long-term economic prospects are bright, but the near-term fiscal outlook is clouded by spending pressures.

Mongolia's rating has been constrained by susceptibility to destabilizing boom-bust cycles stemming from (1) an undiversified, dual mining/agricultural economy subject to mineral price vulnerability on one front and occasional extremely severe winters on the other, and (2) pro-cyclical monetary and fiscal policies.

Mongolia pulled through the 2008-2009 boom-bust cycle with the assistance of an 18-month IMF Stand-by-Arrangement, successfully completed in the fall of 2010. Under the program, inflation was reined in and international reserves were rebuilt. The health of government finances over the long term will in large part depend on the implementation of the country's fiscal stability law, key measures of which come into play in 2013-2014.

Predictability with foreign investment agreements would ensure benefits to Mongolia from the country's substantial mineral endowments. After many years of delay, Mongolia's parliament approved the government's agreement with Ivanhoe Mines and Rio Tinto in October 2009 to develop the very rich Oyu Tolgoi copper and gold deposit. The exploitation of this and other large mineral deposits, such as high-grade coking coal in Tavan Tolgoi, will be transformational for the Mongolian economy, but the management of the windfall will pose considerable challenges to the authorities.

The principal methodology used in this rating was Sovereign Bond Ratings published in September 2008. Please see the Credit Policy page on for a copy of this methodology.

Issuer profile: 

Mongolia is a landlocked country in East and Central Asia.
Area – 1 564 116 (19th). 
Population – 2,95 mln. (139th) 
The capital is Ulan Bator. 
Official language – Mongolian. 
Local currency – Tögrög (MNT). 
Government – Parliamentary republic.
Mongolia takes part in CIS.

Outstanding issues:

44 issue(s) outstanding worth MNT 279 771 600 000

Issuer's rating:

Moody's Investors Service 


Int. Scale (foreign curr)


Moody's Investors Service 


Int. Scale (loc. curr.)


Standard & Poor's 


Int. Scale (foreign curr.)


Fitch Ratings 


Int. Scale (foreign curr.)


Fitch Ratings 


Int.l Scale (local curr.)



Link to release


JBIC Signs MOU with Mongolian Government

Supporting Japanese Firms' Exports and Business Expansion in Mongolia

March 12, 2012 (JBIC) --

1.    The Japan Bank for International Cooperation (JBIC; President & CEO: Hiroshi Watanabe)  signed today a memorandum of understanding (MOU) for the purpose of enhancing financial cooperation, including provision of credit lines, with the Ministry of Finance of Mongolia. The signing ceremony was attended by Mongolian Prime Minister Sukhbaatar Batbold.

2.    The MOU states that the two institutions will share information and hold regular consultations regarding candidate projects that could possibly help to increase Japan-Mongolia business and trade activities in the resource, infrastructure and manufacturing sectors. With this MOU, JBIC seeks to strengthen institutional arrangements to support Japanese firms for doing business in such areas as mineral resource development and associated infrastructure development in Mongolia.

3.    Mongolia attained 17.3% annual real GDP growth in 2011, sustaining brisk growth performance. Endowed with abundant coal, copper and other natural resources, Mongolia has increasingly become important for Japanese firms as a promising country for expansion of their business opportunities, including increased exports from Japan of construction machinery and others associated with mineral resource development projects and infrastructure development. It is expected that enhancing cooperative ties between Mongolia and JBIC through this MOU will lay the groundwork for Japanese firms to expand business operations in Mongolia, thereby developing the two countries' economic relations.

4.    JBIC will continue to support Japanese firms by creating business opportunities and promoting activities in Mongolia, while serving to develop closer and deeper bilateral economic relations with Mongolia.

Link to release



Mitsui will buy Tavantolgoi coal

March 13 ( Prime Minister S.Batbold met with M.Ijima, President of Mitsui company yesterday. M.Ijima expressed Japanese investors and producers giving very much attention to the Mongolian Prime Minister's visit to Japan.

S.Batbold said that Mongolia working on ensure interest of Japanese participation in Tavantolgoi project. "Japanese companies expressed their will to cooperate in big projects such to built railway" said S.Batbold.

After this meeting held a signing ceremony of memorandum of cooperation between Mitsui and Mongolian state owned Erdenes Tavantolgoi company. Mitsui suggested to to build power station and steel favtory in Mongolia. While signing this memorandum Mitsui has possibility to cooperate in Tavantolgoi coal purchasing. Current time Mitsui buying Tavantolgoi coal from Chinese companies.

Link to article



Ulaanbaatar, Mongolia, March 13 /MONTSAME/ A communique has been released as results of the official visit of the Prime Minister of Mongolia to Japan.

On March 12, the Premier S.Batbold was received by His Highness Naruhito, the Crown Prince of Japan, and then he held official talks with his counterpart Yoshihiko Noda. Mongolia's PM will be received by Takahiro Yokomichi, the Speaker of the House of Representatives, and by Kenji Hirata, the Speaker of the House of Councillors, and he plans to participate in an opening ceremony of Mongolia's Consulate in Osaka city.

The sides say their communique has been based on the trusted and friendly relations and ideology of all the documents established between the two countries.

Japan's side says it has been supporting Mongolia's democracy and market economy, and hopes that the democratic development of Mongolia will contribute not only to its development, but also to the peace and stability in Japan and Northeast Asia. In response, the Mongolian side states that Japan has the traditional ties and common values with Mongolia, and that Japan is the very first country to develop the strategic partnership ties among the "Third Neighbors".

The Japanese side thanks the government and people of Mongolia for giving moral and material assistance during the tsunami disaster occurred last year. Expressing deepest condolence to Japan in connection with this disaster, the Mongolian side underlines that this assistance was a gratitude in response to Japan's support to the democracy and reform started over 20 years ago.

The two sides confirm that the bilateral friendly relations have been intensifying in recent years, and affirm their willingness to forward the relations based on four pillars, to intensify realization of a statement about the strategic partnership of 2010, which reflects common goals of the foreign policies. They intend to forward the bilateral relations based on four pillars--intensifying the talks on strategic partnership, strengthening the economic complex ties, activating the inter-citizen exchange and cultural ties, and strengthening the cooperation on matters at regional and international arenas.

Link to article




Video: Mongolia Walks Economic Tightrope Amid Growth, Interview with PM Batbold

March 14 (WSJ) Mongolia may be the Saudi Arabia of Asia thanks to a wealth of natural sources. Can it exploit these without allowing its economy to boil over? WSJ's Chester Dawson reports, following his exclusive interview with Mongolian Prime Minister Batbold.

Link to interview video


Mainichi scoop on Mongolia's nuclear plans highlights problems in dealing with waste

March 13 (Mainichi) Coverage on a secret document detailing an international nuclear waste disposal site that Japan and the United States had planned to build in Mongolia, for which I won the Vaughan-Ueda Memorial Prize for 2011, has highlighted the difficulties in dealing with radioactive waste.

The secret plan surfaced as the crisis at the tsunami-hit Fukushima No. 1 Nuclear Power Plant has stirred controversy over the pros and cons of nuclear power.

I learned that the Japanese Economy, Trade and Industry Ministry and the U.S. Department of Energy had been secretly negotiating the plan with Mongolia since the autumn of 2010 when I interviewed a U.S. nuclear expert on the phone on April 9, 2011.

"Would you please help the Mongolian people who know nothing about the plan. Mongolia is friendly to Japan, Japanese media certainly has influence on the country," the expert said.

I flew to Ulan Bator, the capital of Mongolia, on April 22, and met with then Ambassador Undraa Agvaanluvsan with the Mongolian Foreign Ministry in charge of negotiations on the plan, at the VIP room of a cafe.

Before I asked the ambassador some questions getting to the heart of the plan, we asked my interpreter to leave the room just as we had agreed in advance. The way the ambassador talked suddenly became more flexible after I stopped the recorder and began asking her questions in English. She explained the process and the aim of the negotiations and even mentioned candidate sites for the disposal facility.

After the interview that lasted for more than two hours, the ambassador said she heard of a similar plan in Australia and asked me to provide Mongolia with any information on it, highlighting the Mongolian government's enthusiasm about overcoming competition with Australia in hosting the disposal facility.

I subsequently visited three areas where the Mongolian government was planning to build nuclear power stations. Japan and the United States were to provide nuclear power technology to Mongolia in return for hosting the disposal facility. I relied on a global positioning system for driving in the vast, grassy land to head to the sites. All the three candidate sites, including a former air force base about 200 kilometers southeast of Ulan Bator, are all dry land. No source of water indispensable for cooling down nuclear reactors, was found at any of these sites and a lake at one of the sites had dried up.

Experts share the view that nuclear plants cannot be built in areas without water. I repeatedly asked Mongolian officials responsible for nuclear power policy how they can build nuclear plants at the sites without water. However, they only emphasized that all the three sites meet the safety standards for nuclear plants set by the International Atomic Energy Agency (IAEA).

An Economy, Trade and Industry Ministry official, who is familiar with Mongolian affairs, said, "Mongolians are smart but their knowledge of atomic energy isn't that good ..."

In other words, Japan and the United States proposed to build a spent nuclear waste disposal facility in Mongolia, a country that has little knowledge of nuclear energy.

In 2010, the administration of then Prime Minister Naoto Kan released a new growth strategy with special emphasis on exports of nuclear power plants. However, there is no facility in Japan that can accept spent nuclear fuel, putting itself at a disadvantage in its competition with Russia, France and other countries that have offered to sell nuclear plants and accept radioactive waste as a package.

A Japanese negotiator said, "The plan to build a disposal facility in Mongolia was aimed at making up for our disadvantage in selling nuclear power stations."

The United States wanted to find another country that will accept spent nuclear fuel that can be converted to materials to develop nuclear weapons in a bid to promote its nuclear non-proliferation policy.

Both the Japanese and U.S. ideas are understandable. However, as Mongolia has just begun developing uranium mines and has not benefited from atomic energy, I felt that it would be unreasonable to shift radioactive waste to Mongolia without explaining the plan to the Mongolian people.

During my stay in Mongolia, I learned that many people there donated money equal to their daily wages to victims of the March 11, 2011 Great East Japan Earthquake. I was also present when the Mongolian people invited disaster evacuees from Miyagi Prefecture to their country. I could not help but shed tears when seeing the Mongolian people's goodwill. My interpreter even joked, "You cry too much."

I did not feel a sense of exaltation from learning the details of the secret negotiations on the disposal site. I rather felt ashamed of being a citizen of Japan, which was promoting the plan.

The Fukushima nuclear crisis that broke out following the March 11, 2011 quake and tsunami has sparked debate on overall energy policy. Some call for an immediate halt to nuclear plants while others insist that such power stations are indispensable for Japan's overall energy, industrial and security policies.

"The matter isn't limited to nuclear energy. Our generations have consumed massive amounts of oil and coal," a Finish government official said.

The Mainichi scoop on the secret plan sparked campaigns in Mongolia to demand that the plan on a spent nuclear fuel disposal facility be scrapped and that relevant information be fully disclosed.

Bowing to the opposition, Mongolian President Tsakhiagiin Elbegdorj declared in the U.N. General Assembly session in September last year that the country can never host a radioactive waste disposal facility.

Yukiya Amano, director general of the IAEA, which is dubbed a "nuclear watchdog," says, "Those who generate radioactive waste must take responsibility for disposing of it. It's unfair to expect someone else to take care of it."

However, human beings have yet to find a solution to problems involving nuclear waste.

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Japanese group hopes Mongolia can act as Desertec of Asia

An Asian 'super-grid' bringing wind and solar energy from Mongolia to Japan could help to speed up the region's adoption of renewables, say researchers.

March 13 (Recharge News) The Japan Renewable Energy Foundation (JREF), set up last year following the Fukushima nuclear disaster, is pushing for changes to Japanese law that will allow the country to import electricity from abroad.

In the long-term, JREF wants the national grids of Japan, Mongolia, Russia, China and Korea to be connected, with high-voltage transmission lines sending solar and wind power produced in Mongolia to power-hungry cities in Japan, Korea and China.

The vision, outlined in Tokyo within the past few days, shares similar goals with Europe's Desertec project, which aims to export solar power from the deserts of North Africa to the Mediterranean region.

In a first step, JREF has started work on a pilot project to transfer 1GW of electricity from Busan in South Korea to Kitakyushu in Japan, roughly 250km away.

It is not yet clear if the electricity will come from renewable sources. Korea relies largely on imported energy but it has plans to build offshore wind farms, says Shuta Mano, senior researcher for policy innovation at JREF.

The project will also require Japan to open its electricity network to foreign suppliers, a key step in bringing power from countries further away, he adds.

"It's a completely new idea for Japan's electricity system to connect with another country. If we can show that this is possible then we can continue to connect with other nations too," Mano tells Recharge.

Bringing electricity from Mongolia, which is much further away from Japan, will require a far bigger investment in transmission lines – as well as co-operation with China and other countries.

JREF has signed a memorandum of understanding with Mongolia's National Renewable Energy Centre to collaborate on a study of the country's renewable resources.

The Gobi Desert, covering much of southern Mongolia, is said to be the third-largest potential source of solar energy in the world. The US National Renewable Energy Laboratories (NREL) previously estimated that Mongolia could support 1,100GW of installed wind power capacity. However, it is only starting to build its first wind farms.

JREF is also collaborating with the Desertec Foundation  to share knowledge on the international transmission of renewable energy.

Ultra-high-voltage (UHV) transmission lines, running at 800kV or more, allow for large quantities of electricity to be transmitted down a single line. When the UHV power is in direct current (DC), it can go vast distances without losses.

The technology is already being used in China, which has plans to have six UHV lines by 2015. However building such lines to Japan are expected to face opposition from Japan's powerful fisheries, says Mano.

JREF is hoping that international projects will speed up restructuring of Japan's electricity grid, helping to improve uptake of renewable energy generated domestically too.

"If we have international discussions on importing electricity, this will bring pressure to change our electricity system. That is important," says Mano.

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Rapidly Growing Mongolia Hopes to Avoid Overheating

TOKYO, March 13 (WSJ) -- Mongolian Prime Minister Sukhbaatar Batbold said a tight monetary policy and budget discipline will check the rate of inflation and prevent Mongolia's economy, one of the world's fastest-growing, from overheating.

Buoyed by a wave of foreign direct investment to exploit its extensive but largely untapped natural resources, Mongolia's gross domestic product surged 17.3% last year—up from 6.4% in 2010. That has sparked concern that inflation, which reached 11.1% in December, could end up short-circuiting its blistering economic growth.

"We have to have tight monetary policy. And also we will have to take control over the expenditures, especially on the budget side," Mr. Batbold said in an interview with The Wall Street Journal during a visit to Japan.

Last month, the World Bank reported that government spending in Mongolia rose 56% in 2011 and is expected to increase 32% this year.

Noting that the stepped-up spending was enabled by a gusher of natural resources-related revenue, the international aid organization warned that Mongolia's economy may see a repeat of previous boom-and-bust cycles.

Weak global growth has also prompted questions about Mongolia's ability to ride out a potential downswing in the prices of commodities such as copper, coal and gold.

The Mongolian currency depreciated by 11% in 2011 because of steady inflationary pressure and sagging commodity prices late in the year.

But the Mongolian leader said he is confident his country's economy will stay on track for elevated yet sustainable growth for the coming years, largely through infrastructure investments that he says will help fuel longer-term productivity.

"We had quite good growth last year, and we think we have an opportunity to keep this momentum for years to come. As international financial institutions predict, our growth rate will be maintained for [the] next decade," Mr. Batbold said.

In a meeting with Japanese Prime Minister Yoshihiko Noda on Monday, the two leaders agreed to start talks on a bilateral free-trade agreement, which if concluded would be Mongolia's first such pact.

The landlocked country, which is wedged between China and Russia, has grabbed the attention of Japan's trading companies—along with the world's biggest mining conglomerates—by opening up vast tracts of land for natural-resource exploration and development.

Mr. Batbold said selection of the winning bids for rights to develop the massive Tavan Tolgoi coal mine in the South Gobi Desert near China's northern border will still "take some time," signaling a decision may not be made before parliamentary elections in June.

"The sooner the better of course, but looks like it will take some time," Mr. Batbold said. "It's not related to the elections. It's just a legal process according to the rules."

The Mongolian prime minister said part of Erdenes-Tavan Tolgoi Co., the state-owned company in charge of the world's largest coking-coal deposit, may be publicly listed both in Mongolia and on one or more overseas stock exchanges.

Mr. Batbold said Mongolia is very interested in establishing new air routes and more frequent service linking his country with Japan and other regional destinations. "It is very important for Mongolia. This is one of the bottlenecks for growth," he said.

Currently, there are only two nonstop flights a week between Tokyo and the capital city of Ulan Bator, both via MIAT Mongolian Airlines.

The prime minister met Sunday with senior officials of All Nippon Airways, which entered a strategic cooperation accord with Mongolia's privately held Eznis Airways last May. ANA is considering adding direct flight service between Japan and Mongolia and may decide to do so as soon as this year, said Bayanjargal Byambasaikhan, chief executive of Mongolian conglomerate Newcom Group LLC, which owns Eznis. ANA couldn't be reached in Tokyo late Tuesday for comment.

"The Mongolian economy is growing, and we need more diverse ways of connecting to the rest of the world," he said in an interview.

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Mongolians shows very much interest for apartment loan

March 13 ( Mongolian Government announced low percent apartment loan. Citizens who first time ever buying apartment can get Tg50 million loan with 6 percent per months up to 20 years.

After releasing decision increased number of people who interested how to get a loan, where did get a loan what is requirement for people who get a loan. The government issued a rule where says citizens first to apply to the Apartment Financing Corporation. To get a loan have to pay 10 percent of total price of an apartment price which citizen choose.

Development Bank of Mongolia will raise Tg200 billion for this apartment loan. Currently two banks- Capital and State Bank agree to release an apartment loan.

But Capital Bank official told to our reporter "We also will issue our rule. Right now many things unclear. End of this month will clear details on this loan".

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