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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Mogi: Due to technical problems (stupid PC), I wasn't able to send newswires for the past days, my apologies.
Another apology for half of the newswire being hyperlinked (stupid Outlook), IT God hasn't been on my side lately.
Please also find below my two part interview given to Capitalist Exploits titled "Mongolia from a "Mongolian" Perspective"
Former Mongolian president arrested on corruption charges
April 13 (bne) Nambaryn Enkhbayar, former president of Mongolia and current opposition leader, has been arrested on corruption charges. Uniformed and plainclothes police seized him in a dawn raid on a house to which he had fled after refusing to answer questions about corruption, the government said.
Given that the arrest occurred just hours after Enkhbayar (pictured left) released a transcript of a security council meeting concerning the supposed illegitimacy of the 2008 elections that led to deadly riots, and only weeks before Mongolians go to polls in June for general elections, analysts suspect darker motives.
After occupying the presidency for the four years to 2009, Enkhbayar is now head of the new MPRP party – a splinter party that took the name of the old Communist Party after the original changed its name to MPP (Mongolian People's Party). Enkhbayar is aiming to use his still considerable influence to win back votes in June.
Reports are swirling that protests by Enkhbayar supporters are being organised and bne has seen crowds gathering in Sukhbaatar Square, while workers in the centre of Ulan Bator were sent home early on Friday. Enkhbayar's support is still fierce, despite being haunted by charges of corruption since he left office.
Enkhbayar was arrested for questioning in a serious corruption case, E Abarbat, head of the Independent Agency Against Corruption, told a press conference. Though Amarbat did not elaborate, the agency said the corruption involved the illegal privatisation of a government-owned hotel. "We have been investigating the corruption case involving Enkhbayar for a year. However, he never showed up for questioning. We had asked him often to come for questioning," Amarbat said.
However, the arrest occurred shortly after a press conference organized by Enkhbayar at which he released a classified document from the National Security Council. The leaked transcript sheds a new light on past elections and the protests that followed on July 1 2008, which resulted in the deaths of five people.
Enkhbayar told reporters: "The 2008 parliamentary election was corrupt. The people have the right to know who is responsible. People lost their lives. I want to tell the truth about the incident. The discussion of the meeting of the National Security Council is classified information. This should be changed. Parliament and the National Security Council can change this. Because it is classified, the public is unable to receive correct information. I have met with the administrations of the party two times to discuss this. I would like to turn over 300 pages of material."
Investors are already starting to fret about what this means for a country that has been the darling of the emerging market investment community due to its double-digit economic growth fueled by the exploitation of its vast, untapped mineral resources. On the one hand, one analyst at the Eurasia Group told bne, rising political tensions would undoubtedly hurt stock market valuations. But at the same time, the arrest could be taken as sending out a strong message on anti-corruption enforcement. The analyst said: "In case of the conviction of Enkhbayar on corruption charges, it will indicate even stronger anti-corruption regulatory enforcement and rule of law, which would be positive influence for Mongolia and investors".
Link to article
Related:
Investigators seize Mongolian ex-president on corruption charges after standoff – AP, April 13
Mongolia's former president Nambar Enkhbayar 'detained' – BBC News, April 13
Mongolia's third President arrested on corruption charges – UB Post, April 13
Former Mongolia leader detained, triggering protests – Bangkok Post, April 13
Mongolia Arrests Former President – WSJ, April 13
Mongolian party stages protest against former president's arrest – Xinhua, April 13
ANTI-CORRUPTION AGENCY: WHY EX-PRESIDENT IS ARRESTED
Ulaanbaatar, Mongolia, April 13 /MONTSAME/ The Anti-Corruption Agency (ACA) highlighted on Friday at 2 pm. the reasons of the arrest of N.Enkhbayar.
In the Press Institute, present were E.Amarbat, the head of the ACA investigation section, and D.Tsoodolsengee, a head of the ACA fact-finding section.
E.Amarbat said the reasons "have been profoundly grounded".
Summons were sent to N.Enkhbayar and his advocate ten times to have him given testimonies but he never came to do it and "did not even give a valid excuse,", that is why it became inevitable to take a strong legal measure, he said.
All the materials, documents and curcumstances had been investigated since 2010 and then presented to the court and prosecutor. Eventually, the city Sukhbaatar district's court issued an order at around 5.00 pm on April 12 to arrest the suspect.
The ACA officials said a guard of N.Enkhbayar threatened the policemen by a gun while the arrest was to begin. Enkhbayar went to the house, ignoring the court resolution, and locked the doors inside. When finally the police entered the house and sounded the paper, neither Enkhbayar nor his advocate accept it, "and then the police had to use a lawful force," he said.
According to the materials, criminal proceedings have been initiated over N.Enkhbayar on illegal privatization of the Ulaanbaatar Times newspaper and the "Orgoo" hotel, based on complaints from J.Enkhjargal and L.Sergelen citizens. N.Enkhbayar also has been accused with illegally possessing TV channel facilities which were presented from Japan for Mongolia's Buddhists, with illegally instructing the Erdenet corporation on selling its products to one person who eventually "gained" many million dollars.
In October 19 of 2011, N.Enkhbayar was convicted as a serious criminal after the investigation by a joint commission.
E.Amarbat said N.Enkhbayar has been called as the suspected, and might be imprisoned for over two months as a defendant.
Link to article
HUMAN RIGHT COMMISSION ABOUT ARREST OF ENKHBAYAR
Ulaanbaatar, Mongolia, April 14 /MONTSAME/ Some human rights might have been violently breached, say the National Human Rights Commission (NHRC).
Its head J.Byambadorj and members J.Dashdorj and P.Oyunchimeg visited on Friday the detention center in Tov aimag and met with N.Enkhbayar who was arrested Friday morning.
The NHRC considers that a process of arresting N.Enkhbayar breached the International Covenant on Civil and Political Rights, and also its Convention against torture. For example, servicemen of the special unit forced N.Enkhbayar to go out of his home after sounding the court resolution, even no letting him get dressed.
"I learned that the servicemen treated N.Enkhbayar in very inhuman and cruel ways in a period from the arrest at home until reaching the detention center," J.Byambadorj said, and highlighted that the detained gains a certain right which prevents a situational torture. "A situational torture means domestic and international standards of detention center," he explained.
A member of the NHRC P.Oyunchimeg noted about international treaties, conventions and national laws on rights and legal status of the detained person, and underlined that any detained person or a prisoner has a right to his/her reputation respected by others as a related code says. In addition, the judge chooses the detention house for the suspected, by Mongolia's law on criminal procedure, so it also breaches the above international code, P.Oyunchimeg said.
"In accordance with the international convention, the detained or a prisoner shall be detained in a house which is the closest to his/her home. So, this clause has been violated as well because N.Enkhbayar is in the detention center in Tov aimag which an hour and a half far from the cuty," she said.
Link to article
N. Enkhbayar will not be released on bail
April 14 (UB Post) The Government will not release detained former President N. Enkhbayar on bail.
The demand for him to be freed within 24 hours of his arrest, issued by his supporters from the Mongolian People's Revolutionary Party (MPRP) yesterday evening has not been met by Parliament.
N. Enkhbayar was arrested early yesterday morning in Ulaanbaatar on corruption charges after multiple failures to appear before the Independent Authority Against Corruption (IAAC). He had been summoned by the IAAC to answer questions regarding his involvement with the illegal privatization of the Urgoo Hotel property. He is currently being held in the Tuv aimag Detention Center.
Head of the Legal Department of Parliament B. Odbayar issued the following statement; " We have received your demand and will pass it on to the legal department of region concerned."
The MPRP, lead by General Secretary N. Udval, has stated that the response is not satisfactory and that they will now proceed with the next stage of their demand. What this stage is remains unclear at this time.
N. Enkhbayar served as the third President of Mongolia from 2005 to 2009. In 2010 when the Mongolian People's Revolutionary Party, of which he was a member, elected to change their name to the Mongolian People's Party N. Enkhbayar did not support the decision. He split from the group to form the new Mongolian People's Revolutionary Party, which was approved by the Supreme Court on June 24, 2011.
Link to article
Kumai Energy Ltd (KMI) – ASX IPO
Kumai Energy Ltd (Kumai) has been operating in Mongolia for over 2 years. The company has acquired a 70% interest in Khangi Prospecting LLC with 4 prospective licenses in the portfolio. The Kumai Prospectus provides investors with an exciting opportunity to become involved with one of the most prospective coal regions in the world - Mongolia. Kumai's strategy is to secure, explore and develop quality projects with the view to enhance shareholder growth.
Kumai was established by mining professionals with an aim to develop high quality producing coal mines in one of the most prospective coal regions in the world; Mongolia. The company is run by proven industry professionals with extensive experience and industry contacts.
Kumai is seeking to raise $7 million through an offer of 35,000,000 Shares at an issue price of $0.20 per Share (Issue Price).
CPS Securities have been appointed as corporate manager and lead broker for the IPO.
Data collected from geophysical surveys conducted in 2011 has been processed, and hole locations have been selected for a proposed drilling program. This program will commence field operations immediately following the company's admission to the ASX.
---
April 11 (Mogi) Kumai Energy Limited, a new Mongolian coal exploration company planning to list in April/May on ASX has issued an introductory presentation. CPS Securities has been appoint Corporate Manager and Lead Broker to the IPO. For more info please contact Mogi Munkhdul Badral at mogi@cpsinternational.mn.
Link to Brochure
HAR closed +2.22% to 46c
Haranga Resources Ltd (HAR.ASX, $0.47/sh, Mkt Cap $99m) – Initiation. Iron ore in Mongolia with nearby infrastructure in place.
BUY (Price Target $0.90/sh)
April 12, Foster Stockbroking --
Event:
· We initiate on Haranga Resources Ltd (HAR.ASX) with a SPEC BUY recommendation and initial price target of $0.90/share.
Investment highlights:
· Exploration to date at flagship Selenge Project highlights potential for iron ore operation utilising existing infrastructure: HAR's primary focus is on exploration for iron ore at the Selenge Project (HAR – 80%) in Mongolia, with drill results to date highlighting the potential for an operation utilising existing and nearby infrastructure (two rail spurs located within 40kms leading to the Trans Mongolian Railway) and a ready market south of the border into China. Following the maiden 2011 drilling program of >13,000m, HAR have released an initial JORC of 32.8Mt at 24.4% Fe at the Bayantsogt prospect and exploration target of 120Mt – 250Mt at the larger Dund Bulag prospect.
· Mongolian iron ore differentiated by mineralisation and proximity to China: Iron ore in Mongolia is most commonly seen as magnetite skarn mineralisation, which can often be beneficiated into an iron ore concentrate product via a simple crushing, screening and dry-magnetic separation circuit. A wet-magnetic separation plant may be required to upgrade lower grade (i.e. <30% Fe material). Another competitive advantage for Mongolian iron ore producers is the close proximity to the northern provinces of China, which have a growing need for iron ore supply to feed steel mills and fill the gap as a result of declining quantities and grade from local magnetite operations.
· Nearby Eruu Gol Project provides proof of concept and potential value: Selenge is located within Mongolia's premier iron ore region which is also host to the country's largest existing iron ore mine, Eruu Gol, located ~15kms along strike from Selenge. Eruu Gol, currently producing 3Mtpa and ramping up to 6Mtpa, is expected to list on the Hong Kong Stock Exchange within the next 12 months with a target valuation of ~US$3b. US$300b sovereign wealth fund China Investment Corp invested US$700m for a 35% stake in Eruu Gol in 2009, implying a US$2b valuation at that point.
· Proven management team: The board and senior management team of HAR have a proven track record of adding significant shareholder value via the acquisition and exploration of assets in Mongolia in association with Garrison Capital. This was best illustrated last year when Thai giant Banpu acquired Garrison's Mongolian coal vehicle, Hunnu Coal (HUN.ASX), for almost $500m in cash at $1.80/sh. HUN listed in early 2010 at $0.20/sh. We also highlight that Non Executive Director Bat-Ochir Sukhbaatar is the representative of the vendor of the Selenge Project and also the PM's brother, providing political capital to HAR.
Recommendation:
· We initiate on HAR with a SPEC BUY recommendation and initial price target of $0.90/sh, almost 100% above the current share price.
· We have derived a blended in-situ/DCF valuation of $225m ($0.91/sh) given the early stage nature of the project and considerable uncertainty around eventual project economics. The Scoping Study to be released mid 2012 together with resource upgrade/increase later this year will enable us to refine our valuation and reduce the risk levels associated with the investment at this point.
· News flow will remain constant with met test work at Selenge expected in Q2 2012 which will be fed directly into a preliminary Scoping Study to be released by mid 2012. We expect this to examine the economics of an early stage operation of 1-2Mtpa utilising nearby infrastructure, ramping up to 5-6Mtpa.
· Following a recent placement to strategic investor Lippo Group, HAR is fully funded to complete the 2012 drilling program (32,000m) with cash of ~$18m. Acquisitions opportunities are also being reviewed.
Link to Full Report's front page
VOR closed -1.92% to 5.1c
Ocean Equities Mongolia Exploration Update: Voyager, Haranga
KM site visit highlights the potential of Voyager; Haranga's new big brother to assist in planned development activities; and, a focus on Mongolia at Hong Kong Mines & Money
April 11, Ocean Equities --
Event
We recently caught up with the management of both Voyager Resources ('Voyager') and Haranga Resources ('Haranga') at the Hong Kong Mines & Money conference, and their respective Ulaanbaatar offices before undertaking a site visit to Voyager's flagship KM project, located in the South Gobi region of Southern Mongolia. Given the recent progress at Haranga (maiden resource, placement to a cornerstone financial investor and further exploration results all in the last month, with metallurgical analysis expected shortly) and stage of exploration activities at KM (+40,000 metres of drilling completed with a maiden resource and met analysis expected in the next quarter), the timing of our trip was particularly opportune and provided us a much better understanding of recent progress, future plans, and the potential of these two highly prospective companies.
Ocean Comment
The trip reiterated our confidence that Voyager and Haranga have already discovered flagship projects, the KM copper porphyry and Selenge iron ore projects respectively, which will support commercialisation in the medium term with further significant exploration upside and potential development scale expected from planned aggressive +30,000 metre drilling programmes in 2012 (for both projects). Another key takeaway from the trip was the quality of personnel, infrastructure and networks that Voyager and Haranga enjoy. Each company has a strong management team and board, with extensive experience and a proven track record in-country. Both companies are looking to leverage a similar business model to that successfully executed at the groups previous Mongolian coal vehicle, Hunnu Coal, which was sold to Banpu Minerals for A$477m in cash in late 2011, with a number of original directors remaining on Hunnu's board and the project making positive progress since the acquisition.
The Mines and Money Hong Kong conference and exhibition highlighted itself as the premier centre for mining and exploration investment in Asia. The fifth annual event was a sell-out, attracting more than 2700 delegates, 270 exhibitors from 50 countries (predominately ASX companies) and a host of international keynote speakers with a unique mixture of institutional and strategic investors present, driven by the region's interrelationship with mainland China and understanding of the driving factors of the current natural resource cycle. There was significant interest in Mongolian projects with no shortage of coal stories but few attractive gold, iron ore, or base metal companies. In this regard the conference, and feedback from Hong Kong funds, verified our view that both Voyager and Haranga are the most advanced independent pure play Mongolian companies for copper and iron ore exposure respectively, with most investors aware of their management/board's success and relationships in-country.
· Voyager: A third, RC rig has recently been mobilised at KM with an immediate resource definition focus before commencing shallow scout drilling. Voyager remains on track for favourable initial met analysis and a maiden 20-40Mt @ 0.80-1.20% Cu resource by Jun/Jul'12. An aggressive follow up drilling programme is planned to expand KM's resource envelope beyond the current three identified pipes and to convert the remaining +50 largely untested near surface quartz tourmaline hydrothermal breccia zones into priority targets and then resource inventory. Further drilling is ongoing and planned to target the potential for deeper porphyry stock(s). A more detailed summary is provided on pages 2-4 of the attached note.
· Haranga: Detailed initial metallurgical analysis for its flagship Selenge project is ongoing and expected to be announced in the next quarter with a scoping study to follow mid'12. Scout drilling has recently recommenced at its Shavdal project with a seven rig, 32,000 metre programme scheduled at Selenge in early May'12. In our view the recent direct placement to the Lippo Group has secured a cornerstone financial big brother (+A$50b of assets under management and previous exposure to low grade magnetite mining operations), and is a technical tick of approval for the Selenge project and the Company's management/strategy. A more detailed summary is provided on pages 5-8 of the attached note.
News Flow & Catalysts
We believe both Voyager and Haranga are advanced, aggressive exploration companies with flagship assets located in relatively favourable locations for project development. Both are expected to make the transition from being at the pre/maiden-resource stage to the development stage. In our view the transition from exploration to development and achievement of major identifiable de-risking milestones support a significant potential re-rating in share price in the next 12-18 months with a number of more advanced, higher capitalised companies providing a blueprint for value creation.
…
Link to Ocean Equities Research
KCC closed +6.38% to 25c
Ocean Equities Mongolia Exploration Update: Kincora
An emerging mining frontier and one of the last regions where a junior can add a lot of value quickly - Part iii: Kincora Copper Ltd
April 11, Ocean Equities --
Source of the Opportunity
Mongolia's shift towards a market economy, the fast and efficient progress of its mining sector, the sustained rapid growth of its neighbour China as the largest global consumer of commodities, and the emergence of a number of world class projects with the majority of the country relatively under explored has captured the market's attention. These trends, and supportive government policy promoting foreign and infrastructure investment, has resulted in the development of a sub-sector of junior exploration/development plays, significant investment by the diversified majors and commodity traders, and a surge in M&A. Mongolia is emerging as a premier resource investment destination and one of the world's rapidly emerging new mining frontiers.
This upsurge in interest has come largely on the back of Oyu Tolgoi ('OT') and Tavan Tolgoi ('TT'), two of the largest undeveloped copper and coal deposits respectively, which are located on northern China's doorstep. Most of the country hasn't been explored to a large degree; it is estimated that 75% of Mongolia is only mapped to a scale of 1:200,000, and we consider it highly likely that further major discoveries will be made as exploration expenditure continues to increase.
Ocean Comment
In our view Mongolia with its exploration potential, and current moratorium on issuing new exploration licenses, is one of the last regions where a junior can add a lot of value quickly via favourable exploration and initial project development, and can discover large scale deposits in known elephant country. In a three part series of company specific focus notes we analyse Haranga Resources, Voyager Resources and Kincora Copper. We believe these are three advanced and aggressive exploration companies with flagship assets located in relatively favourable locations for project development. All are expected to have completed at least +30,000 metres of drilling by the end of the 2012 field season (Voyager has already completed 40,000 metres in the last nine months at its KM project) and make the transition from being at the pre/maiden-resource stage to the development stage. Each company has a proven track record and extensive experience in-country with strong management teams in place to support commercialisation of their respective projects. We believe the transition from exploration to development and achievement of major identifiable de-risking milestones supports a significant potential re-rating in share price in the next 12-18 months.
The third and final company specific note focuses on Kincora Copper ('Kincora' or 'the Company). Kincora owns 100% of the Bronze Fox property, which is a highly rated and large scale exploration target on the same belt as OT, and in 2005 was a high priority target of Ivanhoe Mines for porphyry/skarn copper. Kincora's 2012 exploration programme will shortly commence with 16,000 metres of drilling planned (bringing total drilling to ~40,000 metres) and aims to: define lower grade open pit resources and illustrate their development potential; follow up drilling for high grade copper/porphyry stocks at depth; and, test a number of gold targets for resource potential. Current conceptual development models, particularly for at-surface oxide copper, are encouraging. Such a development, thus generating a revenue stream to re-invest in exploration, would be an impressive transition given Kincora was only formed in mid'11.
The current activities of Kincora are akin to defining and starting to put together the pieces of what appears to be a very large jigsaw puzzle with various known mineralised targets already identified on a small section of the tenement. In parallel to activities at Bronze Fox, the Company has pursued a consolidation strategy to make it a regional exploration and consolidation play, and a potential M&A target.
News Flow & Catalysts
On a traffic light system we believe the market's perception of Mongolia's sovereign risk has recently moved from red to amber with investment activities currently taking place, further project development, M&A and a successful election this year (June) as key events likely to support a progression to green in the next couple of years. We expect investors and corporates to further increase exposure to Mongolia's emerging junior and mid-tier mining sector and see potential for a re-rating of a new and rapidly emerging peer group of potentially viable development companies. We expect M&A within the mining sector to continue particularly given the issuance of new exploration licenses is suspended for the foreseeable future resulting in M&A being the only entry for corporates.
Kincora Copper Ltd
Beginning to put together the pieces of what appears to be a very large jigsaw puzzle of mineralised zone with a maiden resource targeted in 2012
Source of the Opportunity
Kincora Copper ('Kincora' or 'the Company') is a Mongolian copper-gold play focused on the acquisition and development of advanced exploration projects that was only formed in mid'11. The Company owns 100% of the Bronze Fox property ('BF') which is a highly rated and large scale exploration target on the same metallogenic belt as the world-class Oyu Tolgoi copper-gold project ('OT'), and in 2005 was one of four high priority targets of Ivanhoe Mines for large scale porphyry and skarn copper mineralisation before the decision was made to develop OT. Previous drilling includes ~95 holes for ~24,000 metres confirming continuous lower grade mineralisation on a 9km strike, remaining open at depth and in every direction with some promising higher grade intersections. In Jan'12, Kincora announced a Letter of Intent ('LoI') to acquire the adjoining mining exploration licenses owned by Temujin Mining ('Temujin'), thereby consolidating the majority of Ivanhoe's original landholding in the immediate region which hosts two of its previous four priority targets and increasing Kincora's footprint from 22,323Ha to 62,202Ha.
BF is in a favourable location for project development (along the Chinese border and within proximity to rail, water and power); in an emerging copper belt; backed by a proven in-country team (early entrants to Mongolia with international and on-the-ground team of experts); and, in a rapid growth, pro-mining country. Mineralisation encountered to date has been associated with sheeted and stockwork quartz-chalcopyrite-pyrite veins and disseminated chalcopyrite-pyrite with associated gold and sometimes molybdenum. Current exploration activities have focused on the west central part of the license area where there is extensive lower grade copper-gold-molybdenum mineralisation from surface with mineralisation confirmed up to 6km apart, predominately within a high IP chargeability anomaly. Mineralisation remains open along strike over a very large area of ~40km2 but covering only ~20% of the total BF license area (pre the deal with Temujin).
Ocean Comment
In parallel to exploration and development of its flagship BF project, Kincora continues to target advanced copper-gold exploration projects to make the Company a regional exploration and consolidation play in an underexplored and highly prospective copper belt. To this end in the last 6 months it has been very successful; increasing its interest in BF to 100%, and almost tripling its regional footprint, particularly given the current moratorium on issuing new exploration licenses, in one of the most exciting and under explored copper belts in the world, only 250km from the Chinese border and favourably located to infrastructure.
A total of 23 holes for 12,435m were drilled in 2011 at BF, with 22 intersecting copper-gold or gold mineralisation. Generally mineralisation encountered is broad and lower grade at or near surface, for example 106 metres @ 0.40% CuEq from surface, but in this instance including 8.11% Cu and 1.07 g/t Au over one metre from 7 metres at hole F31, at the West Kasulu prospect. Extensive near surface lower grade mineralised intersections have been encountered up to 5km apart including 300m @ 0.4% CuEq and 224m @ 0.4% CuEq. Kincora's 2012 field season exploration programme at BF is expected to commence later this month with 16,000 metres of drilling planned (bringing total drilling at the project to ~40,000 metres). The core focuses of this programme will be: continuing to search for high grade copper resource/porphyry stock(s) potential at depth; extending the region of broad shallow lower grade mineralisation; defining a shallow open pit copper resource; and, following up previously identified gold targets with the view of determining resource potential. We expect a key objective of the current field season will be assessing the possibility of developing shallow lower grade, potentially open pit oxide and sulphide copper resources at West Kasulu with a view to generating a potential start up development project and a revenue stream to re-invest in exploration. Current conceptual models, particularly for the at-surface oxide copper, are encouraging but more work has to be carried out in 2012 to confirm this potential.
News Flow & Catalysts
The current activities of Kincora are akin to defining and starting to put together the pieces of what appears to be a very large jigsaw puzzle with various known mineralised targets already identified. Expected company specific news flow includes: further assay results from the 2011 season's drilling and rock chip samples (both from historic trenches and new regional surface samples); closure of the LoI with Temujin Mining; further potential regional consolidation; the recommencement of drilling at BF; the potential definition of a conceptual resource and exploration target at the West Kasulu prospect; and, the expected appointment of external consultants to access the potential for a 'starter' lower grade oxide open pit project to generate revenue to invest in future exploration.
Link to Ocean Equities Research
DRG closed flat at 48c
DRAIG INTERSECTS COAL SEQUENCE IN THREE HOLES, TEEG LICENCE
April 12, Draig Resources Limited (ASX:DRG) --
Highlights
• Coal sequence intersected on eastern part of Teeg licence during open hole drilling
• BT_01 located approx. 3.5km from original due diligence coal intersections BTE-001/BTE-002
• Eleven holes completed in Phase 1 drill program on Teeg licence
• Further coal intersected at surface for nearly 100m during trenching
• Several coal intervals to be selectively cored to benchmark coal quality at ALS labs
• Two drill rigs continue drilling on site to determine coal structures
Draig Resources Limited (ASX: DRG) ("Draig", or "the Company") is pleased to announce that it has intersected steeply dipping coal sequences with an apparent cumulative coal thickness of 20m to 40m per hole, on three drill holes at the Teeg coal licence (13879x) located in Mongolia's Ovorhangay Province.
Draig said the coal intersected in three holes was relatively shallow and well within open pit mineable depths.
Significantly, one of the holes is located approximately 3.5km from the coal intersections made by Draig during a due diligence drill program prior to Draig purchasing eight coal licences in Mongolia's Ovorhangay and South Gobi regions.
At the time of this announcement the Company has completed eleven holes for a total of 1,650m, which include four newly planned holes to assist further defining the full extent of the coal structure in the western portion of the Teeg licence. A further 8 holes are planned for drilling over the coming days.
Draig Managing Director Mark Earley said: "Although it's still early stage, we are very pleased with the initial drill results, particularly to have located this coal sequence. Most significant is the fact the coal intersections seem to be in line with seams discovered during our initial drilling on Teeg."
The coal intersections are being geophysical logged and are planned to be spot cored for coal quality assessment as the drill program continues. These coal cores will be sent to the ALS laboratory in Ulaanbaatar for quality and petrographic analysis.
The current drill program was designed to test the potential lateral extent of the coal seams identified in the original due diligence drill holes BTE-001 and BTE-002. BT_01, BT_02 and BT_03 were planned near the northern peripheral of the interpreted western coal trend based on the data available from the due diligence drilling, surface mapping and geophysics.
The drill holes completed on the Teeg coal licence are shown on the map below, of which the drill holes which intersected more than 20m of cumulative coal thickness are highlighted.
In addition to the drilling, the geologists on site have continued to intersect weathered coal during trench digging over a distance of 100m, between original holes BTE‐001 and BTE‐002.
At the time of this announcement the drilling of two further holes had commenced.
The Teeg licence area covers 22km2 and sits immediately south of the 50 year old Bayanteeg open-cut mine, which has extracted an estimated 5 million tonnes of surface coal to date.
Link to article
Related: "Draig Intersects Coal Sequence in Three Holes" - Draig Broadcast with Managing Director Mark Earley
KRI closed +3.45% to C$0.15
Khan Receives Notice of Delisting from TSX and Announces Conditional Approval for Trading on the CNSX
TORONTO, ONTARIO--(Marketwire - April 12, 2012) - Khan Resources Inc. (TSX:KRI) ("Khan" or the "Company") announced today that it has received a notice from the Toronto Stock Exchange ("TSX") that the TSX has decided to delist the Company's securities effective at the close of market on May 11, 2012. The TSX has determined that the Company has failed to meet the continued listing requirements of the TSX, on the basis of its determination that the Company: 1) has ceased to be actively engaged in ongoing business, 2) discontinued or divested a substantial portion of operations, 3) did not spend at least $350,000 on exploration and/or development work in the most recent year, and 4) has discontinued or materially changed the nature of its business. These determinations are as a result of the Company putting its Dornod uranium project in Mongolia on a care and maintenance status and initiating an international arbitration action for US$200 million in January 2011 against the Government of Mongolia and its state-owned uranium company, MonAtom LLC.
Trading in the Company's common shares will continue on the TSX for 30 days before delisting. The Company is pleased to announce that its common shares have been conditionally approved for trading on the Canadian National Stock Exchange ("CNSX"). While there can be no assurance that the CNSX listing will be completed prior to the TSX delisting, the Company is hopeful the formal approval by the CNSX will be completed in the near future and there will be no disruption to trading in Khan shares during the change-over. The Company will inform shareholders of the details of the transition when determined.
Link to release
MER closed -42.86% to 2c
Meritus Minerals Updates License Status; Shares Plummet to Just Above Year Lows
April 13 (MidnightTrader.com) Meritus Minerals Ltd. (MER.V) today announced that its Mongolian consultant appointed to ensure its applications for registering resources at its Gutain Davaa project in Mongolia with the National Register of Reserves and Resource lodged the applications for Exploration License 6155x and Exploration License EL5575x with the Mineral Resources Council (MRC) in late February.
The MRC has appointed two experts to review the applications and make recommendations and to comment on their content prior to submission to the full MRC committee for consideration.
MER plummeted by about 29% to $0.025, which is just above year lows. About 65,000 MER shares have changed hands.
Link to article
Link to MER release
CG closed +2.26% to C$14.00
Centerra Gold 2012 First Quarter Results Conference Call and Annual Meeting of Shareholders
TORONTO, ONTARIO--(Marketwire - April 10, 2012) - Centerra Gold Inc. (TSX:CG) will host a conference call and webcast of its 2012 first quarter financial and operating results at 11:00AM (Toronto time) on Wednesday, May 16, 2012. The results are scheduled to be released after the market closes on Tuesday, May 15, 2012.
The Company will host its Annual Meeting of Shareholders on Thursday, May 17, 2012 at 10:00AM (Toronto time).
First Quarter 2012 Results Conference Call and Webcast
Wednesday, May 16, 2012 at 11:00AM (Toronto time):
· North American participants: toll-free number (800) 734-8507
· International participants call: +1 (212) 231-2909
· The conference call is being webcast by Thomson Reuters and can be accessed live at Centerra Gold's website at: www.centerragold.com
An audio recording of the call will be available approximately two hours after the call via telephone until midnight Eastern Time on Wednesday, May 23, 2012. The recording can be accessed by calling (416) 626-4100 or (800) 558-5253 and using the passcode 21584997. In addition the webcast will be archived on Centerra Gold's website www.centerragold.com.
Annual Meeting of Shareholders
The Company will host its 2012 Annual Meeting of Shareholders at 10:00AM (Toronto time), on Thursday, May 17, 2012 at the St. Andrews Club, Toronto, Ontario. The meeting materials (Notice of Meeting, Management Information Circular, 2011 Annual Report, and Form of Proxy) were mailed on about April 9, 2012 to shareholders of record on March 21, 2012, being the record date for the meeting. Meeting materials are available at http://www.centerragold.com/2012-meeting-materials and will also be available on the Company's website at www.centerragold.com and on SEDAR at www.sedar.com.
At the meeting, the Company will review its performance from 2011. Meeting details are:
Those interested in attending the Annual Meeting of Shareholders via webcast can do so by going to Centerra's website at www.centerragold.com. A recorded version of the webcast will be available on the Company's website after the meeting.
Link to release
Black Ridge: APPOINTMENT AND RESIGNATION OF DIRECTOR
April 11, Black Ridge Mining NL (ASX:BRD; "the Company") is pleased to announce the appointment to the Board of Mr. Robert Molkenthin as Executive Director effective from 11 April 2012. Mr. Molkenthin joined the Company in July 2011 as Chief Operating Officer and continues in that role.
Mr. Molkenthin has held a variety of positions throughout his career and has over 25 years' experience in Australia and Internationally in a wide range of business environments at all levels in Corporate Finance and business operations and was, more recently, Chief Financial Officer and Commercial Manager at the engineering consultancy, Lycopodium Minerals Pty Limited, part of the ASX listed Lycopodium Limited group of companies. Previous experience encompasses capital raising, IPOs and corporate restructuring in the engineering, mining, property and retail sectors.
The Company also advises that non-Executive Director, Mr. Angus Middleton has resigned, effective 13 April 2012, in order to avoid any potential conflicts of interest with other business opportunities he is now undertaking.
BRD Chairman, Mr. Alan Winduss, welcomed Mr. Molkenthin to the Board and thanked outgoing Director Mr. Middleton for his valued contribution to the Company.
Link to release
MRC: Shares coming off Restriction
April 11, Mongolian Resource Corporation (ASX:MUB) --
This confirms that ordinary shares will come off restriction as set out below:
Date Number of shares
11 April 2012 55,000,000
Link to release
Baganuur SPO
ТӨРИЙН ӨМЧИЙН ХОРОО, "БАГАНУУР" ХУВЬЦААТ КОМПАНИЙН УРАЛДААНТ ШАЛГАРУУЛАЛТ /ТЕНДЕР/-ЫН ЗАР МЭДЭЭ
4-р сарын 12 (МХБ) Монгол Улсын Их Хурлын 2010 оны 11 дүгээр тогтоолоор батлагдсан "Төрийн өмчийг 2010-2012 онд хувьчлах үндсэн чиглэл", Засгийн газрын "2010 онд хувьчлах, өөрчлөн байгуулах төрийн өмчит хуулийн этгээдийн жагсаалт батлах тухай" 2010 оны 86 дугаар тогтоолыг хэрэгжүүлэхээр Төрийн өмчийн хорооны 2012 оны 121 дүгээр тогтоолоор "Багануур" хувьцаат компанийн нэмэлт хувьцаа гаргах, хувьцааг олон нийтэд санал болгох (IPO) замаар хөрөнгө босгох үйл ажиллагааны Андеррайтер-Зөвлөх үйлчилгээ үзүүлэх хуулийн этгээдийн сонгон шалгаруулалтыг дахин зохион байгуулахаар шийдвэрлэлээ.
"Багануур" хувьцаат компанийн нэмэлт хувьцаа гаргах, хувьцааг олон нийтэд санал болгох (IPO) замаар хөрөнгө босгох үйл ажиллагаанд оролцох сонирхолтой Андеррайтерын тусгай зөвшөөрөл бүхий хуулийн этгээдийг урьж байна.
Тендерийг Төрийн өмчийн хорооны 2012 оны ... дүгээр тогтоолоор батлагдсан "Уралдаант шалгаруулалт/тендер/-ын журам"-д тусгагдсан нөхцөл, болзлын дагуу Төрийн өмчийн хороо, "Багануур" ХК хамтран зохион байгуулж дүгнэнэ.
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Эх сурвалж
TT SHARES SALES/BUYBACK PROCESS BEGINS
April 12 (Frontier Securities) According to Government of Mongolia on April 11,2012 (http://open-government.mn/read-1390-.html), regular Cabinet Meeting issued a resolution regarding transfer of shares of Erdenes Tavantolgoi company to citizens and selling those to enterprises.
The work of transfer of up to 20% of shares to citizens will be organized in following manner
· Within framework of Government's 98th resolution of 2011 to add 536 shares to citizens who already own the shares , to transfer 1072 shares to citizens newly born before validity of the resolution on March 31,2011 and certain clauses of the resolution
To deduct and account shares allocated as bounty and a shares from following citizens
i. Senior and developmentally challenged citizens who produced request to receive cash up to 1 million MNT from Human Development Fund according to 53rd resolution of the Parliament
ii. Student to received bounty and a share in form of tuition payment for academic years 2010-2011/2011-2012
iii. Citizens who received bounty and a share in form of health insurance payments in 2011
· State Property Committee, General Agency of Taxation and General Agency of State Registration each have been assigned to organize selling of up to 10 per cent of shares of Erdenes Tavantolgoi company to enterprises named in Parliament's 39th resolution of 2012 at nominal price in equal amount.
· Minister of Social Protection and Labour T.Gandi, State Property Committee and Finance Minister D.Khayankhyarvaa each have been assigned to organize funding buyback of citizens' shares who would like to sell back to Government at nominal price from revenues from sales of the shares to enterprises according to Parliament's 57th resolution of 2011.
· State Property Committee has been assigned to organize abovementioned measures before IPO of Erdenes Tavantolgoi on international capital market
Chief of Staff of the Government Ch.Khurelbaatar answered to questions of many citizens on how should they know if they have the shares
· After approval of Human Development Fund, Human Development Fund Recordbook has been opened for every citizen. Duty has been assigned to record 536 shares in the Human Development Recordbook of every citizen and to Mongolian Stock Exchange and its affiliated registration centers to register those 536 shares to every citizen. Account for 536 shares have been opened for everyone. However, at moment they are not to be traded yet. At the specific time relevant decision regarding trading the shares will be issued. Citizens especially in remote areas should be wary of brokers and dealers opening accounts and charging 5000 MNT. In due time Government will make a decision and give direction to citizens.
Link to article
JUST AGRO BONDS START TRADING IN SECONDARY MARKET
April 13 (BDSec) Just Agro LLC's one year notes started trading in the secondary market on the Mongolian Stock Exchange (MSE). Last year Just Agro LLC sold MNT 4.39bn of bond with a 1-year maturity, annual yield of 16.2 percent with a quarterly coupon payment, and a face value of MNT 10,000. It was the first corporate bonds issuance in 3 years. The bonds are traded on the MSE under trading code MAH.
Download investor presentation for the bond
Link to article
₮50 per share, BDS closed yesterday at ₮3,550
BDSEC DISTRIBUTES MNT 550.0 MILLION DIVIDENDS TO 285 SHAREHOLDERS
April 11 (BDSec) On April 10, 2012 the annual dividend for the year 2010 was paid to 285 shareholders of BDSec (BDS:MO) of the record date on April 13, 2011. The dividend distribution amounted to MNT 550.0 million or MNT 50 per share. This amount corresponds to a 67.1% payout ratio for the year.
The dividends have electronically deposited into the brokerage accounts of the eligible shareholders.
BDSec has paid dividends every year except the year of 2009 since going public in 2006. The dividend for 2011 will be determined later.
Dividend History
Link to article
MONGOLIA STOCKS END HIGHER FOR FOURTH DAY IN A ROW
13 Apr 2012 (BDSec) – Mongolia stocks extended their winning run to a fourth straight day. BDS index gained 0.37% while MSE Top 20 edged 0.09% down. Makh Impex (+5.88%), BDSec (+4.06%), and Baganuur (+3.55%) led the BDS index higher.
Cashmere manufacturer Eermel (EER) lost 5.58% to close at MNT 2,502. One of the largest domestic coal supplier, Shivee Ovoo (SHV) dipped 5.00% to 19-month low at MNT 9,500.
Local News in Brief
Just Agro LLC's one year notes started trading in the secondary market on the Mongolian Stock Exchange (MSE). Last year Just Agro LLC sold MNT 4.39bn of bond with a 1-year maturity, annual yield of 16.2 percent with a quarterly coupon payment, and a face value of MNT 10,000. It was the first corporate bonds issuance in 3 years. The bonds are traded on the MSE under trading code MAH.
Link to article
Mongolia's new securities markets law
April 11 (Gibson Dunn via The Deal Pipeline) After more than six years of consideration, the Mongolian Parliament is expected to adopt a new securities markets law later this year to replace the existing law, which will be a major step in Mongolia's recent efforts to bring its capital markets up to world-class standards. The need for a new law is driven primarily by the rapid development of the Mongolian economy over the past few years and the desire to capture a larger share of the benefits of that development domestically, which is predicated on a strong and robust legal and regulatory regime that gives comfort to investors as being on par with more developed jurisdictions.
Without a doubt, Mongolia's recent economic growth has been nothing short of phenomenal: real gross domestic product grew by 17.3% in 2011, according to preliminary estimates from the National Statistical Office of Mongolia, following 6.1% growth in 2010 (driven in large part by the mining sector, which generated more than 20% of Mongolia's 2010 GDP). Looking forward, this growth is widely expected to show no signs of slowing, with The Economist estimating that Mongolia's GDP will expand by nearly 15% in 2012. Foreign investors have most assuredly taken notice of these developments, and indeed foreign direct investment in Mongolia increased by 120% in 2011, according to The Economist.
Before delving into the key improvements advanced in the draft of the new law, it is worth briefly mentioning a parallel project with a similar goal of raising the caliber of Mongolia's capital markets in order to retain a larger share of Mongolia's economic growth domestically. In April 2011, Mongolian Stock Exchange, known as the MSE, entered into a strategic partnership with London Stock Exchange plc, an initiative that was spearheaded by Sükhbaataryn Batbold, the prime minister of Mongolia. The goal of the strategic partnership is to leverage LSE's experience and resources with the aim of modernizing the MSE and transforming it into a first-class market. Under their partnership arrangements:
· LSE has nominated some of the members of the MSE's board of directors and mobilized a management team to supplement the MSE's own management and to provide knowledge, experience and expertise on managing and operating exchanges in accordance with international standards.
· LSE is providing market technology such as software licensing, training, maintenance and configuration services in order to enhance the MSE's operational capabilities.
· LSE is holding training programs for MSE staff, regulatory authorities and other market actors in subjects such as global capital markets, corporate governance, initial public offerings and post-trade development.
· LSE is offering advice and assistance on how to develop and eventually privatize the MSE, including structuring and organization, legal and regulatory reform, market surveillance and public education.
In line with the anticipated benefits to be realized from the LSE partnership, the draft of the new securities law affords a number of improvements over the existing law and more fully reflects prevailing international standards. Key upgrades of the new law over the existing law include the following:
· The existing law requires a company issuing securities in Mongolia to be registered in Mongolia, which would require the company to observe all Mongolian laws. This is an obvious deterrent to secondary listings in Mongolia by foreign companies with Mongolian assets or operations that are already listed overseas, as those companies will already be subject to the legal and regulatory regimes of their jurisdictions of incorporation (and the jurisdictions where they are listed, if different), and compliance with both the Mongolian and the foreign regimes would likely be excessively onerous if not impossible due to overlapping, inconsistent or conflicting requirements.
By contrast, the new law does not require companies issuing securities in Mongolia to actually be registered there, and expressly permits a company whose securities are listed abroad to list and trade its securities on a Mongolian exchange as well. The new law allows for the legal and regulatory framework governing such companies in Mongolia to differ from the framework applicable to Mongolian companies in order to avoid compulsory dual compliance, and further states as a general rule that a person registered abroad will not be considered as having operations in Mongolia simply because it issues securities there.
· The existing law does not recognize the concept of depository receipts, which are issued by a custodian or similar entity holding securities issued by another entity and carry rights in those other underlying securities.
By comparison, the draft of the new law explicitly contemplates the domestic issuance of depository receipts whose underlying securities are traded on a foreign exchange (and introduces a legal-versus-beneficial ownership distinction as discussed below, which is a necessary precursor to any depository receipts regime). Combined with its loosening of the requirement for companies seeking a secondary MSE listing to comply with the Mongolian legal regime in its entirety, the net effect of the draft law is to make secondary MSE listings much more attractive and feasible.
· The existing law fails to make a distinction between legal-versus-beneficial ownership, and as such does not recognize arrangements whereby the person actually entitled to the benefits of ownership of securities (the beneficial owner) is different from the person registered as the owner of the securities (the legal owner). Similarly, the existing law does not recognize custodial, trustee or similar types of arrangements that are underpinned by a split of legal and beneficial ownership. As a result, only registered holders of securities are legally recognized, which means that the law does not consider clients or beneficiaries to have any ownership interest in securities that are held for them by brokers, nominees or custodians.
The new law remedies this deficiency by introducing a clear legal-versus-beneficial ownership distinction and by permitting trustee and custodial services to be provided to beneficial owners, thereby laying the groundwork for the types of broker, trustee and custodial services that are commonplace in more developed jurisdictions and making the Mongolian capital markets much more appealing to foreign investors.
Other enhancements incorporated into the new law include the following:
· It more explicitly defines various securities market terms and prospectus requirements.
· It more specifically sets out broker, dealer and underwriter responsibilities.
· It strengthens disclosure and transparency requirements.
· It incorporates parts of the official listing rules from the U.K. Financial Services Act to provide a legislative framework for listing and for operation of listed companies.
· It lays out the framework for settling trades in clear terms based on a "T+3" system whereby securities trades are settled via delivery and payment within three business days after the trade is initiated, which is consistent with general international practice (as opposed to the current system whereby all trades must be prefunded).
Once the MSE modernization process is completed and the new securities markets law is adopted, hopes are that Mongolia will become even more enticing as a location for foreign investors and for Mongolian companies and foreign-listed companies with a Mongolia nexus considering an IPO or a dual listing. To be sure, a number of foreign-listed companies have assets or operations in Mongolia and would thus appear as suitable candidates for a secondary or tertiary listing in Mongolia, including Mongolian Mining Corp. and Mongolia Energy Corp. Ltd. (both listed in Hong Kong), Prophecy Coal Corp. (listed in Toronto), SouthGobi Resources Ltd. (listed in Hong Kong and Toronto), Aspire Mining Ltd. and Xanadu Mines Ltd. (both listed in Australia), and Petro Matad Ltd. (listed on the LSE).
The scheduled MSE listing later this year of Erdenes Tavan Tolgoi, the owner of the world's largest untapped coking coal deposit, worth an estimated $10 billion, as part of a global IPO that also includes the London and Hong Kong exchanges should set a high-profile and compelling precedent for local IPOs, which could encourage other companies to list locally as well, particularly if the MSE and securities markets law upgrades are fully implemented by then as currently planned. Together, these events should put the Mongolian capital markets on a firm path toward modernization, which will undoubtedly benefit the country as a whole and further enhance Mongolia's profile in the eyes of investors.
John Viverito is a partner in the Singapore office of Gibson, Dunn & Crutcher LLP. Myles Hankin is a Singapore-based of counsel at the firm.
Link to article
Golomt hits road, but XacBank still undecided
Golomt Bank of Mongolia will start a roadshow this week to gauge demand for its first ever dollar bond, becoming the latest issuer from the country to eye a debut in the international debt market.
April 11 (Euroweek) Golomt will start the roadshow in Asia on Wednesday, and will also travel to the UK and the US before finishing the meetings next week, said a banker close to the deal.
Deutsche Bank, Morgan Stanley and UBS are the joint bookrunners for the proposed transaction, which is rated B+ by Standard & Poor's. But the leads have not yet approached investors with concrete ideas on the size of the deal, the maturity or the exact timing. They will make this decision after getting a feel for interest while on the road.
Another Mongolian lender and potential first-time issuer in the dollar bond market, XacBank, is still undecided on its plan to raise $150m. The bank has completed its roadshow in Asia, Europe and US last week. ING Bank and UBS arranged the meetings.
"XacBank is still exploring and getting feedback from accounts," said a banker close to the deal. "The timing of the issue is still fluid. The issuer may or may not turn this into a formal deal."
The two Mongolian lenders hope to follow the success of Mongolian Mining Corp and Development Bank of Mongolia, which drew $11.75bn of demand between them, demonstrating the strong appetite for Mongolian credits.
But bankers working on both deals will need to convince investors to look past possible downgrades. Moody's has placed Golomt Bank and XacBank on review for downgrade, alongside Khan Bank and Trade and Development Bank of Mongolia. Moody's expects to downgrade the banks by one notch, bringing their ratings in line with the sovereign.
Link to article
ThyssenKrupp Uhde and the Mongolian government reach agreement on coal-to-liquids plant and heat recovery coke making plant in Mongolia
April 11 (ThyssenKrupp Uhde) On 31 March 2012 the Mongolian President Tsakhia Elbegdorj visited North Rhine-Westphalia accompanied by a major business delegation during a five-day state visit to Germany.
On this occasion ThyssenKrupp Uhde and the representatives of the Mongolian government signed two Memoranda of Understanding relating to the development, engineering and construction of both a coal-to-liquids plant and a heat recovery coke making plant. Feasibility studies for the two projects had already been prepared at an earlier date. The result of the coal-to-liquids study was presented at the Mongolian CTG Project Conference in Ulan Bator in June 2008, and the heat recovery coke making plant study based on ThyssenKrupp Uhde's proprietary heat recovery coking technology was presented in December 2011.
At the same time as the Memoranda, ThyssenKrupp Uhde also signed a licensing agreement with the Ulan Bator-based company Industrial Corporation of Mongolia for use of ThyssenKrupp's proprietary PRENFLO® coal gasification technology.
"ThyssenKrupp Uhde is contributing proprietary technologies to both projects and will also be acting as general contractor," said Alfred Hoffmann, CTO and Member of ThyssenKrupp Uhde GmbH's Executive Board. Referring to the coal-to-liquids plant, he added: "This plant will enable us to offer the customer a holistic process solution from coal to synthetic fuel."
The Mongolian government has been intending to limit fossil fuel imports for quite some time and instead to increasingly utilise its abundant domestic coal deposits. It has therefore set itself the goal of upgrading this domestic coal and converting it into high-grade chemical and petrochemical products. As a primary measure, the Mongolian government intends to build a coal-to-liquids plant in Mongolia to produce synthetic fuels from coal.
"We are extremely glad that for several years now we have had a partner in ThyssenKrupp Uhde whose experience and expertise in the EPC business can be relied on in every possible way," said Batsukh Yadamsuren, Director of ICM. "The chemical plants on which Mongolia has set its sights are huge and complex," added Mr Yadamsuren. "Therefore, we need an experienced single-source chemical EPC contractor and licensor if we are to satisfy the expectations of the financiers and operators."
ThyssenKrupp Uhde is a global leader in coal gasification with over 70 years experience in the field. Since the company was founded in 1921, ThyssenKrupp Uhde has built more than 2,000 plants.
"Our PRENFLO® solids gasifier forms the heart of the coal-to-liquids plant," said Claudio Marsico, Sales Director in the Gas Technologies division of ThyssenKrupp Uhde. "Its state-of-the-art design with multiple horizontally arranged burners, a cooled membrane wall with a long lifetime, dry dust feed for coal dust and maximum capacity per gasifier will contribute to the cost efficiency of the coal-to-liquids plant," added Mr Marsico.
With its proprietary solids gasification technologies, PRENFLO® (entrained-flow gasification) and HTWTM (fluidised-bed gasification), ThyssenKrupp Uhde is able to take almost all available feedstocks, such as hard coal and lignite, high-ash coal, petcoke, various biomasses or household waste, and convert them into highly lucrative products. PRENFLO® and HTWTM have already been selected often by different customers in the recent past for worldwide projects for the generation of electricity, hydrogen, gasoline, diesel, chemical products and for direct reduction in the steel industry.
In signing the Memoranda and the licensing agreement, ThyssenKrupp Uhde is playing a key role in implementing the agreement regarding cooperation in the raw materials, industrial and technological sectors, as concluded between the German and Mongolian governments on 13 October 2011.
ThyssenKrupp Uhde has a workforce of more than 5,600 employees worldwide and is a company in the Plant Technology business area of the ThyssenKrupp Group. The company's activities focus on the engineering and construction of chemical and other industrial plants in the following fields: fertilisers; electrolysis; gas technologies; oil, coal and residue gasification; refining technologies; organic intermediates, polymers and synthetic fibres; and also coke plant and high-pressure technologies. We also provide our customers with professional services and comprehensive solutions in all areas of industrial plant operation. Details are available at www.uhde.eu
Industrial Corporation of Mongolia LLC (ICM) is a Mongolian company established under the laws of Mongolia. ICM is focused on development of national heavy industry based on available minerals resources and marketing of its products internationally. Company's activities include mining, extraction, processing and marketing of final products. Since its establishment ICM has been developing several key projects which would have significant importance to Mongolian economy.
Link to release
1878 closed +1.61% to HK$56.90, SGQ closed -0.27% to C$7.26
Critics blast SouthGobi sale to Chalco
April 13 (UB Post) The Aluminum Corp of China Ltd (CHALCO) has reached an agreement with Ivanhoe Mines to purchase up to 60% of the shares of SouthGobi Resources at a price of USD 926 million.
SouthGobi operates in the Ovoot Tolgoi mine site, located in Umnugovi aimag, and has a supply of coking coal and high quality energy coal of totaling 302.3 million tons. The reaction to the news has been swift, with harsh criticisms coming from both Government officials and citizens alike.
G.Bayarsaikhan, Member of the State Great Khural: "Selling SouthGobi Sands LLC shares to CHALCO might cause a serious loss to national interest. Foreign countries are stealing Mongolian natural resources behind our backs, while Mongolians are making it a political issue among ourselves. CHALCO will own 57.6% of a coal mine that has reserves of over 500 tons of coal. China is becoming both the coal supplier and buyer for Mongolia."
D.Jargalsaikhan, economist: "This contract should be terminated immediately. In order to trade Tavan Tolgoi coal, Parliament took USD 250 million in advance and spent it handing out cash to the public. However, Erdened Tavan Tolgoi doesn't have the capital to operate. I wonder why the board of this company is being silent, as it supposed to make an statement. If someone doesn't disrupt the SouthGobi Sands deal, it will become Chinese property. 29 days are left for the Mongolian Parliament and Government to intercept the purchase of SouthGobi Sands.
Ts.Sedvanchig, Member of the State Great Khural: " The CEO of Ivanhoe Mines, Robert Friedman sold SouthGobi Sands. He is overstepping the borders and underestimating the Mongolian people and the Government. The draft law on the rules of foreign investment in areas of strategic importance to provide the national security must be approved urgently. Mongolia's national property about to become the property of Chinese government.
G.Bayarsaikhan, Member of the State Great Khural : "During the Manchu Period, the Mongolian Government affair was discussed and solved in Beijing, and now the destiny of Mongolian mining is to be decided by Beijing."
B.Batjargal, Member of the State Great Khural: With the purchase of SouthGobi Sands, only Ivanhoe Mines benefits
-It has been long time since foreigners started to merchandise the licenses of Mongolian mining resourses. The latest example is, SouthGobi Sands being sold to Chalco. What are your concerns?
-We should create a legal environment that looks at the conditions and limits for foreign companies that purchase Mongolian strategic mining sites. It has become an urgent issue to create legal regulation on this matter. At the moment the only company we know is SouthGobi Sands which belongs to the Canadian company Ivanhoe Mines, but we don't know how many other companies are selling their mining licenses.
Other foreign countries have governmental special agencies, that coordinate and arrange these kinds of dealings. The merchandising of national resourse licenses or the resale of the company's shares to foreign companies should be conducted under the supervision of the State and the State should impose a tax on such deals. We are losing our underground resourses by selling mining licenses to the foreigners. We should make a conclusion on mining license deals and should urgently make amendments to the related laws.
-CHALCO is about to purchase 60% of SouthGobi Resources. What is this deal about?
-Rio Tinto owns 51% of Ivanhoe Mines, and Ivanhoe Mines owns 57.6% of SouthGobi Resources. 14% of SouthGobi Resources owned by China Investment Corporation, a Chinese State-owned company, and other investors own 21%.
SouthGobi Resources owns 100% of SGQ Coal Investment Pre. Ltd, listed on the Singapore Stock Exchange; and SGQ Coal Investment Pre. Ltd owns SouthGobi Sands, listed on the Mongolia Stock Exchange. SouthGobi sands owns several mining site licenses, including a large coking coal deposit Ovoot Tolgoi.
Ivanhoe Mines made an agreement with Chinese Chalco to sell its SouthGobi Resources shares on April 1st. The current high stock would greatly benefit SouthGobi Sands financially and Ivanhoe Mines would yield profit from selling the stocks.
-It is interesting that Chalco decides to buy not from the Mongolian-listed SouthGobi Sands but from a Canadian company, which is a few levels above SouthGobi Sands.
-According to the Mongolian Law on Mineral Resources, there are conditions for managing and transferring mining site licenses. Instead of switching the ownership of licenses, they have decided to transfer the rights to the mine by stock transactions; which is easier for them.
Lately, the stock prices of Mongolian mines are increasing rapidly and cases of mine ownership transfers being done through stock transactions are also increasing. These transactions involve millions of dollars. There are talks of how these high-profit transactions can be taxed. We have developed and prepared a draft law on Economic Entity's Income Tax in line with global standards. In it, if a mining company makes a transaction worth more than 10% of its shares, it is considered a business profit and liable to be taxed.
It is reasonable that when a company decides to sell mining permit licenses, transfer ownership, or if it is going under the administration of another company, these transactions should require the permission of the Minister of Finance of Mongolia to check if involved companies are owned by foreign Government. The Minister of Finance should also set the required taxes and also let the parties perform the transactions only when the taxes are transferred to the Mongolian Government funds.
-Is it right for Mongolia to use all of its mining assets in today's situation of incompetent laws and policies?
-In my opinion, we must use our mineral resources cautiously. The fact that the President temporarily halted license granting was a right step. It is important that we manage and deal with current licenses and set the right taxing management before issuing any more.
The fact that some large mines are not considered to be of strategic importance is because the definition is very vague in the Law on Mineral Resources. It says that mining deposits of strategic importance are ones that "greatly affect" Mongolian economy, or if it contributes more than 5% to Mongolia's GDP. It is unclear who, how, or through what qualification the licenses be transferred, sold, or purchased. There are several strategic deposits in Mongolia just being passed around the ownership of foreign companies under the pretense of "licenses."
Link to article
YAK closed flat at C$4.21, MNGGF closed +0.19% to US$4.208
Mongolia Growth Group – Cash Flow Positive
April 10 (Capitalist Exploits) It's been a while since we've updated our readers as to what Harris Kupperman, CEO of Mongolia Growth Group (CNSX:YAK, OTC:MNGGF), has been up to.
If you are a new reader to our site then we humbly suggest you go and read "A Mongolian Capitalist – Part I", and "A Mongolian Capitalist – Part II", where we first interviewed Harris about his move to Mongolia, the company he founded, and just what does mare milk taste like anyway?
Mongolia Growth Group is presently our favourite means of gaining exposure to a country we believe will be the richest place in the world per capita in 10 years.
Here's my latest conversation with Harris (aka "Kuppy"), for your reading enjoyment. Oh, and for a chance to meet Kuppy (and quite a few of Mongolia's movers and shakers) in person, make sure to check out my comments after the interview.
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Chris: March was the first month that MGG flipped into positive cash flow. Personally, I find this highly unusual for such a relatively new company who's stated focus is on aggressively buying top-quality RE and building an insurance business. How'd you do it so quickly?
Harris: No matter what we do in business, we want to be cash flow positive and able to self-fund without the capital markets. We simply cannot rely on the kindness of our shareholders.
Now that we have reached this point, we can push a bit more aggressively into lower yielding properties that have more upside (not that we haven't been doing that for a few quarters now). We honestly thought that positive cash flow would happen more rapidly, but we were surprised by the costs of the audit and the property valuation report.
Chris: Yeah, you've chosen to go through a very expensive audit process. Do you think this was a wise use of the firm's capital at this point? Would a cheaper option have provided much the same market perception without the expense?
Harris: You know, this is something that we've struggled with. Remember, that I own 15% of the company, so fifteen cents of every dollar that we spend comes right out of my own pocket. At the same time, we have over 2,000 shareholders living all around the world. Most of these guys cannot come here and do their own due diligence. We need to ensure that everyone has absolute confidence that our numbers are accurate and our properties are valued correctly on our books.
It's simply a cost of doing business. I believe strongly in doing business at a very "high class" level, and that means using the best quality firms — even if they're expensive.
Chris: Given that some of the property you've acquired is solely for redevelopment purposes, they are going to require larger capital infusions to redevelop. What is your strategy to deal with this reality?
Harris: The great thing about top-quality redevelopment opportunities is that there are many potential joint venture partners. We're looking at all options, from financing them ourselves, to partnering with outside firms.
The key for us is to ensure that we have enough capital to build these assets out and make sure that they're well-built. Ideally, we would look for a model where we build smaller assets out ourselves, but then look to partner with foreign firms to build our larger assets. This would mean that we would inject our property assets, and some additional capital into a JV. We would then manage the property when complete, meaning that we end up with fee revenues from management, along with a substantial percentage interest in the property as well. However, we are looking at all possible options.
For now, the most critical thing is to ensure that we can continue to acquire and improve our redevelopment packages. Later on, we can focus on how to redevelop these assets.
Chris: Will MGG be using any debt financing?
Harris: Thus far, we have no debt. Jordan and I are very risk averse individuals. However, we think that a bit of debt would be beneficial, especially as we are constructing assets. In the past, we needed to ensure that we were cash flow positive before looking at any debt. Now that we've reached this benchmark, the next step is to ensure that we also have the cash flow to cover potential interest payments.
Chris: You've mentioned before that MGG's policy is to honour all existing lease contracts when taking over a property. This isn't required by law and has the effect of achieving lower yields on those properties. Why are you doing this?
Harris: We want to be good corporate citizens. We intend to be in Mongolia for a long time and do not want to be seen as pirates. If we conduct business in an ethical way, people will also honour their commitments to us. In the end, our reputations are important to us.
Chris: We'll all be watching the political process closely as it unfolds over the next 3 months. What is your take on how things are going to pan out?
Harris: I guess that you're talking about the election in June… No matter what happens, someone will win. Mongolia has a 2 party system with a number of smaller third parties. No matter who wins, I think Mongolia wins. Most major parties favor a free market, foreign investment and to see the Mongolian economy continue to grow. My thinking is that I wish that whoever loses could become our (US) next president, as the Mongolians are infinitely more attuned to economic policy than either candidate running in the States.
Chris: I'm sure Mark would agree with that statement, with the notable exception of Ron Paul, of course. Since I'm a Kiwi I guess I shouldn't elaborate on my thoughts (laughs). I note that you continue to write detailed monthly letters to your shareholders. What was your thinking on that? It's unique amongst public companies.
Harris: It really comes down to disclosure. As an investor, I've always been disappointed to learn that I never really knew what was going on at the company's I invested in, at least until the Q's or K came out. Even then…
I really value transparency. I write these letters just like I would write a monthly letter to my mother (also an MGG shareholder), to tell her how things are going and point out any significant events that she should be aware of. I honestly wish that more companies would treat their shareholders in a similar way. Instead, you get an occasional press release written by lawyers that tells you very little. I wouldn't do that to my mother, and I wouldn't do that to shareholders either.
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Our number one rule as investors is to buy great management! Harris and Jordan are the epitome of the sort of guys we look for in the company's we invest in. They're smart, flexible and honest, with a high level of ownership.
We believe that actually meeting management in person, in a smaller, more informal venue is one of the most valuable experiences an investor can have. To that end, Mark and I will personally be hosting an investment meet up in late July in Ulaanbaatar, Mongolia!
One of the main reasons we created this site is because we're both keenly aware how difficult it can be for investors to source information in frontier markets, let alone make the contacts and set up the meetings necessary to do proper due diligence on an investment located on the other side of the planet.
Link to article
Part I of interview with Mogi, Executive Director, CPS International LLC, yours truly.
Mongolia from a "Mongolian" Perspective
April 11 (Capitalist Exploits) Chris and I make no bones about Mongolia being our favourite frontier market, and likely the richest place per capita in the world in 10 years. We're continuously amazed at the people we meet that are involved in the country's financial markets.
The expats who have gone and made Mongolia their home; guys like Harris Kupperman from Mongolia Growth Group, Lee Cashell, Eric Zurrin, Chris DeGruben… These guys are self-made, pioneer types who I'd go into battle with anytime!
But we've also met a lot of Mongolian nationals who really, really impress us. Mongolian Mogul Jamul Jadamba and BDSec founder Dayanbilguun Danzan to name a couple.
Today I'm talking to 'Mogi' Munkhdul Badral, he's the Senior Client Manager / Executive Director of CPS International LLC.
I wanted to talk to him candidly about his country, and get the perspective of another national, someone who understands Mongolia both then, and now. I think you'll be as impressed with 'Mogi' as I was when you're finished reading!
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Mark: Mogi, we've spoken to quite a few guys on the ground in Mongolia. It's always nice to get the perspective of a Mongolian national. You're involved directly in the brokerage business, in Mongolia, CPS International, a Mongolian marketing arm of CPS Securities, a Perth, Australia-based stockbroking and corporate advisory firm. We'll get into that later, but first tell me a bit about your background and personal story.
Mogi: I was raised in a diplomat's family, with my father serving, and still is, Mongolia's Ministry of Foreign Affairs all his career. So I was quite privileged to have travelled and experienced a world besides my own from a young age.
I first learned to write in Russian, hit puberty in English, adolesced in Mongolian and became an adult in Japanese. This will give you an idea of how I spent my life from childhood through college. After spending more than half of my life overseas, until just recently, having lived in countries like the US, Switzerland, and Japan, I'm bit ashamed to say that back then I never planned to go back, not just yet at least.
After college in Japan, by circumstances I had to come back. It was a little scary back then, with absolutely no Mongolian work experience, not sure what career I wanted, and whether Mongolia is the place I can achieve my goals. That was back in early 2009.
Although it wasn't my decision, I can now most definitely say that coming back home was the best thing that happened to me. I came back at a time when the Global Financial Crisis had just hit the world, Mongolia had just started to feel the effects of it, needing the IMF and major countries to extend us a parachute, and of course before the OT Investment Agreement was signed, signaling the beginning of the mining boom we're seeing now.
So I would say I came at exactly the right time, if not perhaps just a little late, a time when the world, even Mongolia, only had half an eye on my country.
Mark: Our recent interview with a Mongolian mogul, Jamul Jadamba proved extremely popular. I want to understand the boom in Mongolia, from the perspective of a Mongolian. I've heard some incredible stories about Mongolian nationals literally rising up from rags to incredible riches in a few short years. The opportunity is just staggering. How do you view this opportunity potentially transforming Mongolia?
Mogi: The current perceived richest Mongolians now mostly all came from a background of trading goods between countries. Well, trading goods is just a nice way of saying buying and selling from your suitcase.
As overseas students in the 80s, early 90s taking goods from China and Mongolia during their college vacations and selling it triple, quadruple their prices, filling the hole created by lack of proper trade relationships between Asia and Eastern Europe, thus tasting the benefits of capitalism before the country had not even seen what capitalism is.
Those newly turned capitalists thus exploited the first privatization experiment of the 90s, buying up state-owned assets for far less than the value of even the real estate it was occupying. I guess exploiting is not the "politically correct" term, but what else would you expect from a smart businessman, you see an opportunity and you take it.
Now we're seeing a second wave of rags to riches stories that will challenge the old guard to be innovative and set an example to the 3rd generation.
If Chinggis Khaan transformed our nation, this new found mineral wealth will do the same for Mongolia. We may be seeing the beginning of a nation turning into a world sovereign wealth power, per capita of course, with Mongolia being just a nation of 2.8 million (latest official statistics).
On the other hand, it could also turn Mongolia into a place where money just seems to go and disappear. But I actually have every confidence we're heading in somewhat the right direction and in the end be able to concentrate all the wealth on a national scale and use it to properly incubate each and every Mongolian, because we will need every smart, skilled, healthy Mongolian we can get.
We're seeing something of it in the Development Bank of Mongolia, concentrating international investments in one vehicle and investing in the right sectors. We'll see more of this on the national scale such as the Fiscal Stability Fund, and Human Development Fund. Although HDF now just looks like a "Welfare for All Fund", but in the future, it should become the primary investor in our people's education and health.
Mark: I'm in the middle of reading a fabulous book that was recommended by a friend of mine, it's called, Genghis Khan and the Making of the Modern World. Like most people I was ignorant of just how much of our "modern world" was shaped and created by him, it's really incredible!
Mogi: I have to admit I haven't read Mr. Weathorford's book yet, hoping someone might give it to me as a present (wink), but what the book writes about is what we were all taught in high school, or for my previous generations, reconfirmed. It's good to have someone finally tell a story from all perspectives, not just from the old scripts of the Middle East, Europe or China, and show the world the Mongols that we believe we were back then.
Mark: Well, maybe someone reading this will buy you a copy 
The Mongols had a very influential hand in almost everything… from warfare to class systems and technology. I think anyone who wants to understand Mongolia needs to read and re-read this book.
My question to you is, what do you think the majority of people wanting to do business in Mongolia, or invest into Mongolia need to understand about the culture and the people?
Mogi: Now, don't get me wrong, Mongolia as a nation and people understand that we need foreign expertise and investment at the moment and in the foreseeable future. But what our history and culture will tell you is that to be a Mongol meant fear, meant strength, meant power, and most importantly meant independence.
With our true independence in 1990, we have reconfirmed it, if not yet politically and economically, then mentally. If before a Mongolian business needed a foreign partner to succeed into the international arena, then now an international business can't succeed without a local partner in Mongolia. What I'm trying to say is that, the best and only way to succeed in doing business in Mongolia is to instill a sense of ownership, a sense of stakeholdership for Mongolians in "foreign" invested businesses.
One example I can give from my personal experience is Hunnu Coal. Matthew Wood came to Mongolia and partnered with Lkhagvadorj Tumur or George as he is called, and of course with CPS where besides managing the IPO, CPS brought in Mongolian investors to take part in the pre-IPO, IPO, post-IPO process. Hunnu also had a good Employee Stock Ownership Plan (ESOP) where with the Banpu takeover, I've seen dozens of their employees being finally able to buy their first apartments. This is FANTASTIC for Mongolia and we aim to continue, via CPS, in being part of this process.
Mark: Something that a lot of investors gloss over is inflation, it's pretty high in Mongolia. The rapid influx of foreign capital into the country is a double-edged sword. This is going to really test the Mongolian Central Bankers, and politicians. Inflation is not popular, and the majority of Mongolian's are still quite poor.
The rapid growth is, as it always does, leaving quite a few people behind. What's your take on this and the potential solutions for dealing with it?
Mogi: I fully agree inflation is a big problem in relieving poverty, no one likes it – the people don't because their salaries don't increase in line with inflation, investors don't like it because their costs aren't what they used to be. And I don't like it because my cup of coffee at my favorite coffee corner increases prices twice every year. But I think our politicians learned a lot from this election cycle on what causes inflation and what part they play in increasing it as well.
So I'm hoping from the next election cycle, our politicians will cease giving out cash handouts to everyone regardless of wealth and need, and invest that money in things that will actually help relieve poverty, like the health and education of people.
People always say that it should be invested in infrastructure, so I'm deliberately saying health and education, because infrastructure has enough attention on it. That's I think what our politicians should be doing, besides the usual stuff IMF says, reduce the rise in government expenditure and all.
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We'll pick it up again tomorrow with Mogi. Meanwhile, if you didn't see our post yesterday where we talked about our upcoming meet up in Ulaanbaatar, Mongolia at the end of July, drop us a note.
Chris and I have setup what we think will be one of the most rewarding and beneficial investor gatherings you've ever been to. We're meeting with influential Mongolian business leaders, politicians and expat movers and shakers – the guys getting things done in Mongolia.
There are a limited number of spots, and after yesterday's response it looks like we'll be sold out quickly. So, if you want to join us, contact us sooner than later.
- Mark
"I couldn't wait for success, so I went ahead without it." – Jonathan Winters
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Mongolia from a "Mongolian" Perspective – Part II
April 12 (Capitalist Exploits) Yesterday we were speaking with 'Mogi', one of the sharp, young Mongolian nationals working to bring his country forward.
Today he'll give us some specific ways to invest and put our capital to work in the country.
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Mark: So, tell us about your work at CPSI. The firm specializes in capital raising for mining and junior stocks, listed mainly in Australia, but doing business in Mongolia, correct?
Mogi: Yes, that's correct . CPSI was established in 2010 for two reasons: 1) to strategically service Mongolian investors who took part, or want to take part, in Mongolia related companies CPS raises capital for; and, 2) to target the growing high-net worth Mongolian investors with international investment ideas.
What CPSI does is represent CPS Securities, one of the best, if not the best, junior resource brokers in Australia, in Mongolia. Established in 2001, CPS Securities is owned by three equal partners, Tony Cunningham (C), Jason Peterson (P) and Paul Sharbanee (S), and specializes in capital raisings for junior to mid-size resource-focused companies operating all over the world, like the US, Chile, Brazil, Indonesia, The Philippines, Ghana, South Africa, Madagascar, Republic of Congo, Morocco, and of course Australia and Mongolia.
Mark: Do you spend more time acting as a broker for clients, or working on banking deals?
Mogi: Well, we're not brokers per se at CPSI. What CPSI has is a referral relationship with CPS Securities where we act as their marketing agents in Mongolia. CPSI's initial role was to build CPS' Mongolian client base, and of course inevitably through that channel and other contacts we came across loads of interesting projects and you shall soon see the results in the future deals we handle.
Mark: We've received a lot of feedback from guys on the ground in Mongolia regarding the MSE. By now pretty much everyone knows that the LSE has been working on modernizing the MSE, and it seems to be going OK. Liquidity is the number one issue, with corporate governance and oversight also lacking a bit. Was this the reason you decided to work with companies listed elsewhere – but doing business in Mongolia? Maybe it's the best of both worlds that way?
Mogi: CPS' strength is ASX and that's how we've come to Mongolia, but MSE was always in our future plan, and we were fine with waiting for it to kickstart, as any successful emerging market does, which I believe this LSE contract and TT has brought. TT is just the beginning of real liquidity, which is Mongolia's test run for "Privatization" Take Two. And CPSI wants to be there when that happens.
Mark: Do you see the MSE ever realistically being able to compete for listings with places like Australia, Hong Kong and Canada? Do you think dual-listing will be mandated at some point?
Mogi: I actually think it WILL be able to compete, especially with Australia and Canada, and Hong Kong in the not so distant future. But then again, why does a company dual list, to diversify its client base, increase liquidity and I believe we'll see such a trend as well, also in the not so distant future.
Mark: I know real estate isn't your focus, but give us your impressions of the "boom" in UB. If you were interested in real estate in Mongolia right now, today, would you continue to look at UB, or would you go out to some of the mining towns and areas where the boom is just really getting started?
Mogi: I would continue to look at real estate as a viable investment, but only until the real estate "players" decide to start realizing gains. Right now it's a little too heated and the name of the game has always been, in any boom, to be lucky enough to exit at the right time.
It seems everyone always knows when it's hot, but never exactly when it bursts and that's something that will naturally happen. It's not helping that a whole generation of 20, 30 year olds are finally able to move out of their parents' nest, but on top of that we see speculators, especially with foreign money, pouring into the market. As with any speculator they always exit, right now we're only seeing inflow of capital and no exits, which soon enough will happen.
Mark: So, give us something to grab hold of. What are you following right now that we should really be looking more closely at?
Mogi: I thought you'd never ask. Perhaps it will sound like I'm plugging a product, but there's a reason why, because they've proven themselves – they can deliver. Garrison Capital, that's a name some might have heard, they are investors out of Australia that created names such as Voyager Resources, Hunnu Coal, and Haranga Resources. All stocks that CPS has raised funds for at various levels and continues to back.
The Hunnu Coal deal has definitely shown they can deliver, with the takeover by Thailand's energy giant Banpu last year at 9 times the IPO price in less than 2 years after listing. We expect to have a few more of Garrison's ventures, on top of our other Mongolian deals, on the pipeline this year.
To give you more details on the company specifics: Voyager Resources (ASX:VOR), a copper/gold play with a market cap of just $70M, which is consistently releasing some of the best copper results since OT and is now targeting several deep porphyry stocks that you would find in OT; Haranga Resources (ASX:HAR), an iron ore play with a market cap of just over $100M and an exploration target that could increase their JORC resources close to 300Mt, sitting right next to the Trans-Mongolian rail line and a 3Mt per annum producer with about 300Mt resource where state-owned China Investment Corp bought a one third stake for $700M in 2009.
CSP is now in the process of listing a tungsten exploration play called Eumeralla Resources, and Kumai Energy, CPS' 2nd Mongolian coal play after Hunnu Coal, and sometime mid 2012 a Mongolian oil exploration company called Wolf Petroleum, which currently has the title of the largest oil tenement holder in Mongolia.
So I would say for anyone looking at Mongolia to watch what these guys will create next, and rest assured CPS will be there with full access.
Mark: Well, we'll be there too then! Finally, tell us something that most people are missing about the big picture in Mongolia, from the perspective of a Mongolian.
Mogi: What I think that no one is covering or talking about right now is Mongolia's population. Yes, they talk about how you'll soon see 2.7 million people all becoming rich like Arab sheikhs, but then not writing about how and who is going to be teaching their kids, picking up their garbage, waiting on their tables, because what self-respecting sheikh would do that and still be called a sheikh.
As you know Mongolia is a little paranoid when it comes to foreign "intrusion" into our lives. There's a reason why the Chinese migrant workers here stay enclosed in secret camps, and wouldn't dare get caught in the general public. That's what I believe is the key to Mongolia developing steadily and smoothly. I'm not worried at all about infrastructure, we get the point already, I'm not worried about politics, we understand the ramifications now.
What the politicians now need to figure out is how to bring every Mongolian to a higher standard so that they won't feel threatened by a migrant worker building our schools, digging our resources, asking me whether I'd like my steak well done or rare, to which I'll answer "Medium rare, please."
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Wow! That was refreshing… Mogi, while maybe not typical, is a great example of the young and up-and-coming generation of Mongolian's who are smart and motivated to help their country succeed. Anyone who knows anything about Mongolian history will tell you that betting against a Mongolian is never a good idea.
To get in touch with Mogi and find out more about his work with CPS, you can email him at: mogi@cpsinternational.mn
Chris and I are betting big. If you want to join us in Mongolia at the end of July to meet Mogi, Jamul Jadamba, Harris Kupperman, Eric Zurrin, Chris DeGruben, Lee Cashell and others, drop us a note and we'll sign you up! It may be the best investment decision you'll ever make!
- Mark
"Action is the foundational key to all success." – Pablo Picasso
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TAX RELIEF FOR NAT'L OIL COMPANIES
Ulaanbaatar, Mongolia, April 12 /MONTSAME/ The cabinet made on Wednesday a decision about rendering tax relief to national companies of the oil sector.
Only one oil factory exists so far founded in 2001 at Erdenet city's oil base, but in nearest future many will appear in frames of the government's policy on establishing national oil refineries in several places.
The cabinet considered as necessity to give the tax relief to those national companies who are employing people and are seeking technological renovation. This measure is especially vital in times when export tax on Russian raw materials are much higher of those on final products.
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ADB calls for balanced gov't expenditure to ensure growth in Mongolia
ULAN BATOR, April 11 (Xinhua) -- The Mongolian government should review and re-direct government expenditure to critical areas such as transport, energy, water, education and health care to ensure sustainable economic growth, an expert of the Asian Development Bank (ADB) said here Wednesday.
The Mongolian government budget for 2012 had very substantial increase in public investment including infrastructure investment which is very necessary to develop the country's natural resource sector, to diversify the economy and to enhance general and inclusive growth, said Jan Hansen, a senior financial specialist of ADB resident mission in Mongolia.
Speaking at a launch ceremony of ADB's flagship annual economic publication Asian Development Outlook, Jansen emphasized that the government should ensure that the country's macroeconomic stability was preserved and inflation was kept at a low and acceptable level.
According to the ADB report, Mongolia's gross domestic product could grow 15 percent in 2012 and 17.5 percent in 2013, driven by mining-related investment and output. Mongolia's economy expanded by 17.3 percent in 2011.
The report also noted Mongolia's economy was developing rapidly, but fiscal policy must balance the need for macroeconomic stability and support for long-term economic growth that benefits all Mongolians.
Government spending rose by 56 percent in 2011 and was budgeted to rise by a further 32 percent this year, fueled by sharply rising resource revenues.
The country's inflation increased to 12.5 percent in February 2012 and is expected to remain in double digits in the coming two years.
The over expansionary government spending and high inflation are considered to be the major potential risks for the Mongolian economy.
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Link to ADB release
Hogan Lovells looks to build in Mongolia with transfer of City partner
April 12 (The Lawyer) Hogan Lovells is sending London-based corporate partner Chris Melville to its Ulaanbaatar office in a bid to extend its reach in Mongolia.
Melville, who has worked on a number of Russian transactions including Onexim's $200m (£138m) takeover of a US basketball team in 2010, will continue to focus on cross-border M&A and infrastructure while working closely with the firm's Ulaanbaatar managing partner Michael Aldrich.
The relocation brings partner numbers at the Ulaanbaatar office to two, along with five associates and three other fee-earners.
"It's exciting to be supporting the development of the Mongolian practice at this point in time when foreign investors are really taking notice of the investment opportunities and the country's need for additional capital and infrastructure investment," Melville told The Lawyer. "The focus will still very much be on inbound corporate investment work and joint ventures. I expect my experience in infrastructure and natural resources M&A to prove invaluable, as growth will be driven to a significant extent by these sectors."
Hogan Lovells gained an Ulaanbaatar presence when it entered a formal association with Mongolian outfit GTs Advocates in August 2010 (3 August 2010).
Since then, DLA Piper has entered the Mongolian market via a local tie-up with C&G Partners (12 March 2011).
Soon after, Australian firm Allens Arthur Robinson opened a representative office in Ulaanbaatar (10 November 2011), before fellow Australian firm Minter Ellison followed suit in a bid to capitalise on the country's emerging resource-based economy (1 February 2012).
"The Mongolian economy's growing at an incredibly fast rate such that foreign investors are now taking a serious look at investment opportunities across a wide range of sectors, particularly infrastructure and natural resources," adds Melville.
Link to article
Link to Hogan Lovells release
MNT HITS OUR 2012 TARGET. STRONG LONG-TERM UPSIDE, SHORT-TERM VOLATILITY
April 10 (Eurasia Capital) --
Mongolian Tugrik (MNT) hit yesterday our 2012 year-end target of MNT1,300 per USD, articulated in our Mongolia Outlook 2012 report (see the link below). The currency strengthened almost 7% this year to MNT1,300 from MNT1,396 on 31 December, 2011. The appreciation was primarily due to a combination of tightening monetary policy, central bank intervention in the forex market and strong capital inflows.
Policy rate. On March 19, the Bank of Mongolia (BoM) raised the policy rate by 50 basis points to 12.75%. The increase intended to slow down inflation and lower the pressure on the MNT exchange rate, the central bank announced. Nationwide CPI reached 12.5% y-o-y in February 2012, whilst CPI in capital city Ulaanbaatar hit 13.3%. Expansionary fiscal policy could be contributing to inflation by fuelling the domestic demand.
Forex market interventions. According to the Bank of Mongolia, it sold US$242.75mn to commercial banks y-t-d as part of its efforts to avoid the downward pressure on MNT caused from surging imports. BoM allowed gradual depreciation of the tugrik in 2011, from its peak MNT1,195 to MNT1,396 by the end of last year. Amid strong political pressure on controlling the inflation and containing MNT depreciation, the central bank became active in forex market since November 2011 to ease the tensions before the June 2012 Parliamentary elections. Based on the BoM auction data and changes in Net International Reserves, we estimate the central bank spent at least US$200mn to prop up MNT in 2011. The bank's stated policy is to intervene only to prevent sudden swings in exchange rate in either direction.
CNY-MNT swap deal. The recent agreement between BoM and People's Bank of China (PBOC) to expand swap agreement to CNY10bn-MNT2tn provides additional support to MNT. BoM sold CNY269mn to commercial banks y-t-d. China is the largest trading partner of Mongolia, accounting for over 90% (US$814mn) of exports and 21% (US$304mn) of imports in 1Q2012. Last year China overtook Russia as Mongolia's largest imports market.
Strong FDI inflows. The Mongolian Tugrik has also been supported by strong FDI inflows. FDI worth US$395mn in 2M2012 have largely offset current account deficit of US$474.1mn in the same period. FDI hit record high of US$3.8bn in 2011. FDIs are expected to remain robust and continue supporting MNT. Through Ivanhoe Mines, Rio Tinto alone budgeted US$2.1bn for 2012 to advance further its flagship Oyu Tolgoi project.
International bonds. Development Bank of Mongolia (DBM) and Mongolian Mining Corporation (MMC) have recently raised almost US$1.2bn in international debt markets. DBM, a state-owned policy bank raised US$580mn to kick-start government initiated major infrastructure and housing projects in the country. MMC, the Mongolia's largest coal miner issued US$600mn debt to finance infrastructure and development projects. Extensive capital raising in international capital markets by Mongolian banks and corporates would provide further support for MNT.
Eurasia Capital maintains its long-term bullish view on MNT while short-term volatility may occur in 2012. Expansionary fiscal policy and rising inflation may force aggressive monetary tightening in 2H2012. We expect the central bank to continue supporting MNT in the coming months due to political and public pressure before the Parliamentary elections. However, the national currency should find its own strength in the near future. We expect trade balance to start improving from 2013 onwards. At the same time Fiscal Stability Law coming into effect in 2013 will restrain currently profligate fiscal policy.
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A new ferrous metallurgy to be built in Darkhan could fully supply domestic iron demand
April 11 (UB Post) The Mongolian Government has set a goal to support the ferrous metallurgy sector. A ferrous metallurgy complex is planned to be built in Darkahn-Uul and Selenge Provinces, and also at the Sainshand Industrial Complex. This is an interview with Ch. Tsogtbaatar, Head of Mining Heavy Industry Strategy Department at the Ministry of Mineral Resources and Energy:
-It is known that the production capacity of the ferrous metallurgy plant in Darkhan is being increased. Can you elaborate on this?
-This metallurgy plant in Darkhan Province makes metal objects from disposed iron. Although there are a few other smaller iron smelting plants, this metallurgy plant can be considered the only iron processing plant in Mongolia. In Darkhan and Selenge areas, there are a number of large iron ore mining sites: Tumurtei, Khust Uul, Tumur Tolgoi, and Bayangol. Based on these deposits, a goal was included in the Government program to build ferrous metallurgy plants in that area.
Right now, the current metallurgy plant we have cannot process iron ore, it is immediately exported. As I said, it is only intended to smelt disposed metal objects, and right now the supply of disposed metals is very low at the plant.
This metallurgy project is majority-owned by the Government, and also has rights to nearby iron mining projects. But if it wants to process the iron ore extracted from these sites, there needs to be upgrades to its technology.
A large ferrous metallurgy project is about to start in the Darkhan and Selenge areas. It is one of the Government's 56 major projects included in its goal to industrialize Mongolia. We are currently developing the technical and economic assessment of the project through the World Bank's project to develop Mongolia's mining infrastructure. It will be ready by this year.
-Will this complex be a part of the Darkhan metallurgy or will it be a separate one?
-It will be decided when the time comes. But it is favorable to be located in Darkhan as major iron mines and reserves, including the other production infrastructure located there.
-When will it be in operation? Once the technical and economic assessment is ready?
-Obviously, everything from the electricity to the water supply will be studied and researched. It will be built soon.
The Government of Mongolia is trying its best to export products that have a high value. In the scope of this objective, we are being urged to complete the metallurgy as soon as possible. Once the assessment is complete, then we will commence building.
-If the plant is built, is it safe to say that it will completely supply the domestic market and at the same time export processed and refined iron to other countries?
-Yes, that is possible. Generally, domestic demand for iron products is relatively low, but it has been steadily increasing with many new construction projects taking place in Mongolia lately. If we build a metallurgy that has the capacity to produce at least 3 million tons of iron per year, then we can both export and completely supply ourselves with iron.
-What will be the environmental effects of the metallurgy?
-The metallurgy bears some significant effects on the natural environment. There are many plants like these in other highly developed countries like Korea and Japan. Their metallurgy plants cause an insignificant amount of effects on their nature as the plants' eco-friendliness is carefully planned from the beginning. They have many additional tools and equipment to greatly reduce negative impacts on the environment. But its costs are very high and decreases profit.
Metallurgy is not like burning wood or coal in a stove. We will have to choose from many different technologies that each have different attributes. The type of iron to be processed and the mining site's characteristics will affect this decision. The choice of equipments will decide the environmental effects.
-What developments can be seen in Mongolia's mining sector with the construction of the new metallurgy?
-Of course, the new operational ferrous metallurgy will produce more jobs. Also, by supplying ourselves with domestically produced iron, we would be keeping all those expenses that go out to foreign countries for importing iron. The overall income of the Government funds will increase as the plant will be paying taxes. The new metallurgy will have many other social and economic benefits.
Link to article
Outotec finances Mongolian students' metallurgy studies at Aalto University
Finland seeks to improve contacts with country with growing mining sector
April 11 (Helsingin Sanomat) Cooperation between the Finnish mining technology company Outotec and the Mongolian government has brought 15 Mongolian students to Finland to study metallurgy.
This is Outotec's way of building connections with a country which is undergoing a mining boom. Rich deposits of iron, copper, gold, and coal have been discovered in Mongolia.
The Mongolian students will receive three months' worth of training at the Aalto University. Outotec will finance their tuitions and fees, meals, and accommodation.
Male students Khudermunkh Davaatseren and Orshikhjargal Ulziibaatar and female student Oyunzul Erkhembayar explain at the opening gathering of the study module devised for them that they heard about the possibility to study in Finland from their university teachers.
"I hope to increase the knowledge base that I will need in the future", Davaatseren says. Perhaps the educational cooperation will also improve international connections and communication, he ponders.
"I also plan to try out traditional Finnish foods and the sauna." As yet, however, Davaatseren is unable to name any traditional Finnish dishes. Previously he has studied in Russia and in Australia.
Erkhembayar says that apart from her studies she is also interested in exploring the city of Helsinki. Having lived in an inland country she is also interested in seeing what the Baltic Sea looks like.
The study module was initiated during President Tarja Halonen's visit to Mongolia in August 2011. At that time Outotec and the Mongolian Ministry of Mining and Geology agreed on the student cooperation as well as on Outotec conducting a study into how to develop further the refinement projects in Mongolia.
As a whole, Outotec is investing EUR 200,000 in the study module. Chief technology officer Kari Knuutilaexplains that for the company this is a question of a long-term investment.
"In two, three years' time these students will be at work making decisions on how these processes should be developed. Mongolia is a very interesting country and we want to invest in it."
In Mongolia, new mines are being launched and prospecting activities are carried out actively. Outotec wants a piece of the action and seeks to be included in those investing in the Mongolian mining industry.
Outotec has already sold mining equipment of different types to Mongolia but thus far the company has not run any large projects there.
There are plenty of international operators in the Mongolian mining sector. Russia and China both have a strong presence there. Mongolia would be able to benefit more from its ore resources if it could process the raw materials further domestically.
Link to article
МЭЗФ: "Дэлхийн ирээдүй: Тогтвортой хөгжлийн судалгаа" семинарт Таныг урьж байна
4-р сарын 13 (МЭЗФ) МУИС-ийн Тогтвортой хөгжлийн хүрээлэнгийн эрдэмтэн нарийн бичгийн дарга, ФЭС-ийн багш Т.Чулуун Лондон хотноо болсон "Дарамтад буй гариг" хуралд тогтвортой хөгжлийн шинэ индекс дэвшүүлсэн илтгэл тавьж оролцоод ирлээ. Энэ талаар "outreach" сэтгүүлд хэвлэгдсэн өгүүлэл болон ярилцлагыг ЭНД ДАРЖ үзнэ үү. Мөн вэб каст ярилцлагыг ЭНД ДАРЖ үзнэ үү.
Лондонгийн хурал дээр зарласан "Дэлхийн ирээдүй: Тогтвортой хөгжлийн судалгаа" 10 жилийн хөтөлбөрийг танилцуулах ФЭС болон Тогтвортой хөгжлийн хүрээлэнгийн хамтарсан семинар 4 сарын 16-нд 16 цагаас МУИС-ын төв байрны 2-р давхарт хурлын дугуй танхимд болно.
Таныг хүрэлцэн ирэхийн урьж байна.
Эх сурвалж
IMF: World Economic Outlook (WEO)
Growth Resuming, Dangers Remain
April 2012 (IMF) --
The World Economic Outlook (WEO) presents the IMF staff's analysis and projections of economic developments at the global level, in major country groups (classified by region, stage of development, etc.), and in many individual countries. It focuses on major economic policy issues as well as on the analysis of economic developments and prospects. It is usually prepared twice a year, as documentation for meetings of the International Monetary and Financial Committee, and forms the main instrument of the IMF's global surveillance activities.
…
Chapter 4: Commodity Price Swings and Commodity Exporters
Key points
· Commodity exporters have benefited from the run-up of commodity prices over the past decade, exhibiting resilience to recent weakness in the global economy. However, since downside risks remain large, the near-term prospects for commodity exporters are a concern. What policies should exporters use if prices plateau or fall?
· Commodity exporters are vulnerable to commodity price cycles. In particular, a sudden drop (rise) in global activity significantly reduces (increases) commodity prices and GDP and external balances in exporters.
· Exporters should save fiscal windfalls during commodity price upswings, and dissave during downswings to stabilize the economy. However, if revenues are permanently higher, their best use is to raise public investment and lower taxes, boosting output and welfare over the long term.
· How should commodity exporters prepare, given the current uncertainty surrounding commodity price prospects and downside risks to global growth? A sensible approach is to improve institutional capabilities for incorporating new information about commodity price persistence, while building fiscal buffers to respond to temporary shocks.
…
Link to report page
IMF: Global Financial Stability Report
The Quest for Lasting Stability
April 2012 (IMF) --
Chapter 3 of the April 2012 Global Financial Stability Report probes the implications of recent reforms in the financial system for market perception of safe assets. Chapter 4 investigates the growing public and private costs of increased longevity risk from aging populations.
…
Link to report page
Mongolia joins the Global Federation of Competitiveness Councils
April 13 (UB Post) The Mongolian Economic Policy and Competitiveness Research Center of Mongolia (EPCRC) have joined the Global Federation of Competitiveness Councils (GFCC) as a member. By doing so, Mongolia's EPCRC will be able to collaborate and exchange experiences with other organizations with the same objective.
The GFCC unites international governmental and non-governmental organizations aimed at improving their respective country's competitiveness; accelerate economic growth and creating innovative ideas. It has begun its operations with the first an annual conference taking place in 2010; and together with its members develops standards for international competitiveness.
The President of the EPCRC of Mongolia Ch. Otgonchuluu said, "By becoming a member of the GFCC, we will be able to compare ourselves to other similar organizations and also contribute to their work. These organizations may help us by evaluating our work, and we can do the same for them. We can learn from each other's mistakes. All the benefits will help us create a more elaborate and effective plan on improving Mongolia's competitiveness."
Currently, the GFCC has united competitiveness organizations from 30 different countries.
Link to article
B. Erdenebat strives to put Mongolia on the world economic map
April 11 (UB Post) The following is a translated interview from the Daily News newspaper with professor from the School of Economic Studies of National University of Mongolia Dr. B. Erdenebat.
-I heard that your work was published in one of the world's best economic journals. Which magazine was it?
-It published in the economic science journal 'The Review of Economics and Statistics'. One of the top ten journals on economic science. Every economic researcher dreams of having their research work published in this journal. 'The Review of Economics and Statistics' is the who is who indicator of researchers. By publishing your work in this journal you can make the world hear your opinions and views.
-Is there anyone else from Mongolia who has published work in this journal before you?
-I think I am the first Mongolian to have my research work published in this journal. Once, Mongolia had a Socialist economy. Mongolia has had only 20 years of transition to the market economy. It means we're just researching and studying our economy. But, publishing Mongolian scientists work in the world's best journal means Mongolia has potential and has reached a certain level.
-The world of science accepts these works. Does it mean the editors are famous and qualified people known around the world?
-Yes, they are Nobel Award Laureates. They have a blind judging system. We have to send our work to 3 or 4 editors. I don't know who is judging and examining my work the same way the editor doesn't know whose work he or she is reading. It doesn't matter whose work it is, just the scientific side of the work matters.
-Did you complete this research work personally or through the university?
-The Bank of England funded my work.
-What was the topic of your research work?
-It was 'Structural Breaks in the International Dynamics of Inflation.' My research work consisted of two parts: theoretic and pragmatic. The inflation of European Union countries and Seven Great Countries is included in the pragmatic part.
The newly formulated method, which was invented by me was included in the theoretic part. Everything has a dynamic relation. This relation changes in some cases, but it was not possible to know when and how much this relation changes. In other words, there wasn't a method to examine and define those changes. I invented a method.
-Could you explain it in more simple terms? How will you use this method to fight inflation, which you emphasized above?
-Every country has their own central bank. Those central banks implement monetary policy, to make inflation as low and stabile as possible. They will implement monetary policy and monetary tools. It means they have to look at other countries' monetary policies, how the other countries' policies influence the country.
For example, Mongolia needs to look at the China's monetary policy and define the influence level of that policy in regards to Mongolia. After this, we can create a better monetary policy for Mongolia. Before globalization every country produced and used products domestically. After globalization all countries had narrow relations to each other. Thus, if the inflation rose we have to define the domestic influence percent and outer influence percent.
-The globalization influences everything. Could this method be used in other sectors?
-This is the general method. I just used inflation as an example to explain my method. We could use this method when looking at the macro economy, the total increase of GDP, unemployment level, and other economic factors. Also it's useful in other sectors of science, not just economics.
-Does the Bank of England have the ownership because they funded the research?
-The research work in this journal needs to spread to the world. The Bank of England won't own this work entirely. The journal sells the material to any interested person for USD 10. Anyone who bought the journal can use this method.
-Could the interested person take the material from you?
-Yes.
-Is it possible to translate your method into Mongolia and use it correctly?
-Yes, it's possible.
-Will you accept if the Bank of Mongolia asks to use this method to research Mongolia's current inflation?
-I would do it with pleasure. But, this kind of research work is not one day's work. It requires certain time, labor, and money. The research work, funded by the Bank of England took me 4 to 5 years.
-Are you interested in Mongolian inflation?
-Yes, I'm interested in Mongolian inflation recently. I have started to research it.
-For Mongolia the increase of inflation became typical and the explanation for inflation also became formal. Everyone thinks the reason is the increase in the cost of fuel, and meat, and cash handouts. What do you think is the reason for the inflation increase?
-The amount of money in circulation causes inflation. This is one of the base evidences of the economy. Inflation will increase if we keep printing money. For me, Mongolian inflation is related to this, but I can't with what percentage it influences inflation because I haven't completed any research yet. The inflation increased because the Government gave 1 hundred billion MNT to people in 2010 and 2011 from the Human Development Fund.
-As an economist, what is the risk of giving cash handouts to citizens?
-It means the economy may collapse. There is word 'the curse of treasure'. We already built the beginning of that curse. Generally, there isn't any profit from mining departments, but we received lots of loans from domestic commercial banks and the Bank of Mongolia and gave it to people. One day product price of goods from the mining sector will decrease. At that time, if the banks will ask for repayment from the Government we will face hard times.
-The definition of inflation is known to some Mongolians but not to others. Could you explain it in simple terms?
-Inflation is what causes you to buy meat for 5000 or 6000 MNT, which was selling for 3000 MNT previously. Inflation affects people with low incomes greatly. Generally, inflation influences food products in Mongolia. 60% to 70% of the income earned by those in the lower class is spent on food.
Inflation affects people with higher incomes much less. They don't spend as much money in the Mongolian economy. They travel, shop and buy cars from abroad. Abroad prices do not increase as much.
-Another thing, which influences inflation, is fuel price. I heard that you started research work on this issue?
-Yes, the National Development and Renovation Committee recruited me to research how the price of oil products influences the Mongolian economy. The results will be ready in the middle of April.
-Does economic development depend on the education of economists?
-In Mongolia we prepare economists in quantity. We need to look at how we prepare these economists. The education structure is not good. In university 40 to 50 subjects are taught over four years. Some are useless. In Europe only 16 or 18 subjects are taught from theory to practice. We need to use this approach.
Link to article
MOTHERS WILL BE SUPPORTED
Ulaanbaatar, Mongolia, April 12 /MONTSAME/ Mothers who have given birth to the third child will receive a one-time cash allowance of MNT 300,000.
The cabinet decided as such when considering on Wednesday a draft amendment to the law on supporting mothers with many children and a draft parliamentary resolution on fixing sizes of the cash prizes. The drafts will be submitted to parliament.
For the time being, the holders of the Orders receive annual benefits of 100,000 and 200,000 togrog. Pursuant to the draft law, they will have one-time allowances of MNT 500 thousand and MNT one million, under the 2008-2012 governmental action program.
Link to article
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