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.
Mogi: Phew, took a week off two weeks ago and this is what you get, a newswire that's two weeks late and two weeks big
Mogi: Contact me for info
Kumai Energy Prospectus
April 26 --
LETTER FROM THE MANAGING DIRECTOR
On behalf of the Board, I am pleased to offer you the opportunity to become a Shareholder in Kumai Energy Limited ("Kumai" or the "Company"). Kumai was incorporated in Australia to acquire and progress the development of three coal projects (encompassing four minerals exploration licences) located in Mongolia. The Company aims to establish itself as a coal explorer and developer in Mongolia. It may also review opportunities in coal in other parts of the world.
The Board comprises mining industry professionals with considerable international experience.
Mongolia is a country which hosts some world class mineral deposits but has only recently been opened to modern exploration techniques and capital investment.
China's shift to a net importer of coking coal since 2009 has seen Mongolia step up as China's natural supplier of coal. In 2011, Mongolia replaced Australia as China's largest coal import source, supplying 43% of China's coking coal imports (of 43mt) as opposed to Australia supplying 23%. This is in contrast with the position in 2009, when Australia supplied 66% of China's coking coal imports compared to 17% from Mongolia.
Kumai is seeking to raise $7,000,000 through the issue of 35,000,000 Shares at an issue price of $0.20 each to provide funds to achieve its immediate objectives. Before making any decision on this investment I recommend you read the Prospectus in its entirety and seek professional advice as appropriate.
The Directors join me in offering you this exciting opportunity to participate in the ownership of Kumai and I look forward to welcoming you as a Shareholder of the Company.
1.3 Indicative Timetable
Date of Prospectus
26 April 2012
5 May 2012
5.00pm WST 4 June 2012
Allotment of Shares and Despatch of Holding Statements
15 June 2012
Quotation of Shares on ASX
18 June 2012
Eumeralla Resources on the hunt for Mongolian minerals, admitted to the ASX
April 27 (Proactive Investors) Eumeralla Resources (ASX: EUM) has been admitted to the official list of the ASX and is set to begin trading on Thursday 3 May.
The company will hit the boards at 12pm (EST) with around 20 million shares on issue, following a successful IPO offering 17.5 million shares at A$0.20 per share to raise a minimum $3.5 million.
Eumeralla is focused on the acquisition and exploration of mining projects in Mongolia.
The company already holds one granted minerals exploration licence in northeast Mongolia which covers 12,657 hectares including the historical Chuluun Khoroot tungsten mine, active between 1945 and 1955.
The licence is located about 20 kilometres north of the town of Dashbalbar and 85 kilometres northwest of the Solowevsk-Choibalsan railway.
Previous exploration at the project has defined tungsten targets, but follow up exploration has been limited.
Eumeralla plans to focus initially on tungsten exploration, planning a geological mapping and surface sampling program followed by geophysical surveys and aircore and reverse circulation drilling to test the anomalies.
Other commodities could be targeted at the project in the future.
Cash at end of quarter A$2.7m. CPS Securities maintains SPEC BUY, Foster Stockbroking reiterates SPEC BUY with A$0.11c Target Price
Voyager: MARCH QUARTERLY ACTIVITIES REPORT
April 27, Voyager Resources Limited (ASX:VOR) --
Exceptional drill results have continued to be returned from the KM Copper Porphyry Project (KM Project) during the quarter with first assays being received from drilling at the Aranjin Discovery. Aranjin is the third shallow hydrothermal breccia discovered at the KM Project returning outstanding initial results of:
Ø 104 metres at 1.0% copper and 8.2 g/t silver from 4 metres (KMR060RC), including:
§ 42 metres at 2.1% copper and 16.4 g/t silver from 20 metres, and
Ø 168 metres at 0.74% copper and 5.4 g/t silver from 76 metres (KM0124D), including:
§ 36 metres at 2.1% copper and 16.2 g/t silver from 86 metres, and
Ø 140 metres at 0.6% copper and 5.3 g/t silver from 4 metres (KMR015RCD), and
Ø 80 metres at 0.8% copper and 10.3 g/t silver from 60 metres to end of hole (KMR017RC)
These results along with previously announced intersections from the Cughur and Gaans Discoveries sees Voyager Resources Limited (Voyager or the Company) continuing to drill some of the best copper mineralisation reported in Mongolia, external to the giant Oyu Tolgoi Copper Deposit.
The Aranjin discovery is the second of three discoveries identified in a demagnetised structural corridor that hosts the Aranjin, Cughur and Cughur NE discoveries where recent drilling returned 50 metres at 0.82% copper and 1.87 g/t silver from 6 metres (KM0115RC). The identified Fault Corridor extends for over three kilometres in strike with mineralisation being identified over the extent of the Corridor. Voyager believes that the Corridor acts as a conduit to a porphyry stock located to the southwest of Cughur with the breccia pipes exploiting the weaker structure to intrude up the corridor.
RC Drilling recommenced at KM in late March in order to complete up to 10,000 metres of drilling at KM. Drilling is focused on lateral and shallow extents to the mineralised hydrothermal breccias intersected and identified by Voyager in order to complete a maiden JORC Resource on the project by mid-2012.
A selection of representative samples was transported to Perth, Western Australia during the quarter to undergo preliminary metallurgical test work, results have been delayed due to the Mongolian National Holiday Period of Tsagaan Tsar and the Easter Holiday in Australia, and results are now expected by mid May. CSA Global consulting of Perth, Western Australia was engaged by the Company during the quarter to complete its initial JORC Resource estimate by mid-2012.
Cash at end of quarter A$17.4m
Haranga: March 2012 Quarterly Activities Report
April 26, Haranga Resources Limited (ASX:HAR) --
- Highlights -
• The final assay results from the 2011 drill program at the Selenge Iron Ore Project in Mongolia were received.
• An initial resource of 32.8Mt of iron ore at 24.4% Fe was defined at Bayantsogt, one of the three primary iron ore targets drilled at Selenge in 2011.
JORC Code (2004) Inferred Resource for Bayantsogt
• This resource is based on the 35 diamond core holes drilled to date at Bayantsogt. The mineralisation remains open in all directions and the recently discovered high grade zone remains to be properly tested.
• An Exploration Target* of 120 to 250Mt of iron ore has been estimated for the Dund Bulag target.
• High grade iron intersections were discovered underneath surface outcrops at Huiten Gol, the third Selenge target.
• Metallurgical test work program is ongoing, with the results to be input to a pre Scoping Study due mid 2012.
• 15m new shares issued to Golden Rain Holdings, part of the Lippo Group, at $0.40 per share to raise $6m and increase Golden Rain's interest in the Company to 13.92%.
• Golden Rain have subsequently increased their interest in the Company to 15.05%.
UPDATE 1-Mongolian coal group Tavan Tolgoi eyes 2013 market debut
* Eyes IPO in first quarter
* Still considering listing in Hong Kong, London, Ulan Batar
* Adds Jefferies, Barclays as bookrunners
LONDON, April 30 (Reuters) - Mongolian coal miner Erdenes Tavan Tolgoi, owner of one of the largest coking coal deposits in the world, has pushed back plans for its international share market debut to the first quarter of 2013, disappointing hopes it would boost London's fortunes this year.
State-owned Erdenes Tavan Tolgoi is planning to list 29 percent of the company in a float that analysts expect could raise about $3 billion, but Chief Executive Baasangombo Enebish said on Monday a listing in February or March next year was "more realistic" than hopes of a market debut in 2012.
"Now we are set up to target our IPO in the first quarter next year," Enebish told Reuters in an interview on the sidelines of a London conference.
Tavan Tolgoi is one of the largest share istings in the pipeline for the London market, whose important mining sector has seen a drought of major new floats since the financial crisis, with the notable exception of commodities trader Glencore last year.
Enebish said Tavan Tolgoi, which cannot complete listing plans until Mongolia's parliament passes a key securities law, was waiting to determine the equity structure of the company after shares are distributed to Mongolian citizens.
It is also hoping to advance core infrastructure projects including rail, road routes and a coal handling and preparation plant (CHPP) that should boost the value of the coal it mines.
The Tavan Tolgoi coal deposit, in Mongolia's south Gobi region, has estimated reserves of as much as 7.5 billion tonnes of coal, including the world's largest untapped deposit of coking coal used to make steel.
"Completion of these projects is very important for our company's valuation. That is why we plan our IPO for next year," he said, adding that building work would start within this year.
The delay to the listing will, though, force the company to raise "several hundred million" dollars to pay for the start of the infrastructure projects and other work. Enebish said no decision had been made but options included a convertible bond.
The company is pressing ahead with plans for a three-way listing in London, Hong Kong and Ulan Bator, potentially simultaneously, Enebish said, dismissing speculation the Hong Kong leg could be dropped. The London leg could be shares or global depositary receipts (GDRs).
Another factor behind the delay to the listing has been uncertainty around the western block of the coal deposit, which Mongolia hopes will be developed by foreign investors.
Last July Mongolia announced that China's Shenhua Group , U.S.-based Peabody and a mysterious Russian-Mongolian consortium headed by Russian Railways would be handed the rights to the project, but after Japanese and South Korean bidders complained the government said the decision was not yet final.
A senior executive at the mine said last week Mongolia might choose to go it alone on the development of the western block after struggling for years to find the right investors.
Enebish said that though Erdenes Tavan Tolgoi had the capacity to develop both sides of the deposit, discussions with companies were ongoing. He declined to comment further.
"This investment negotiation started almost one year ago but it is not finished. (That) does not mean it is stopped completely, it is pending now," Enebish said.
He said separately that the company had added Barclays and Jefferies as bookrunners, bringing the total number of investment banks working on its listing to six.
Goldman Sachs and Deutsche Bank are joint global coordinators for the issue, with BNP Paribas and Macquarie as bookrunners.
Mongolia could go it alone on giant coal mine-exec
April 24 (Reuters) - Mongolia might choose to go it alone on the development of the western block of its giant Tavan Tolgoi coal mine after struggling for years to find the right investors, an executive with the state-owned firm in charge of the project said.
Speaking at a regular meeting of leaders from Mongolia's private sector on Monday, Graeme Hancock, the chief operating officer of Erdenes-Tavan Tolgoi, suggested that the Mongolian government would not be able to appease the diverse foreign investors hoping to invest in the project.
"In my view, this is a very difficult group to put together into a consortium," said Hancock. "We've got a pretty good chance it will never happen."
If that were the case, Erdenes-TT was likely to reassume control of the property and lead the western block of the project itself, he said.
Last July, Mongolia announced that China's Shenhua Group , U.S.-based Peabody and a mysterious Russian-Mongolian consortium headed by Russian Railways would be handed the rights to develop the project, but after Japanese and South Korean bidders complained the government said the decision was not yet final.
The Tavan Tolgoi coal deposit, in Mongolia's south Gobi region, has estimated reserves of as much as 7.5 billion tonnes of coal, including the world's largest untapped deposit of coking coal used to make steel.
A final decision on the structure of the consortium has been repeatedly delayed, and Hancock said the matter was now unlikely to be settled before a parliamentary election in June.
Shenhua and Peabody were not immediately available for comment when contacted by Reuters.
Analysts have accused Mongolia of putting politics ahead of business, saying its priority was to appease its two giant neighbours, Russia and China, rather than get the best deal for Tavan Tolgoi.
Mongolia's tiny economy is at the beginning of a mining boom and others warn the country might still need experienced overseas firms to help develop huge projects like Tavan Tolgoi.
"All options are open to the government," said Dale Choi, chief investment strategist at Ulan Bator-based Frontier Securities. "I think it's in Mongolia's best interest to have a major coal company involved because Erdenes is a small young company."
Mongolia's plans to list Tavan Tolgoi's eastern Tsankhi section, originally scheduled for the first half of 2012, have also been delayed, with parliament still deliberating over not just the investment agreement for the western block, but also a new securities law.
Analysts have said a domestic and overseas initial public offering for 29 percent of Erdenes-TT could raise around $3 billion. Hancock of Erdenes-Tavan Tolgoi said a decision to take control over the western block could potentially double the value of the company.
He added that the company would go ahead with the development of the western block in May or June, whether an investment agreement had been put in place or not.
Mongolia sits on vast quantities of mineral resources but it has struggled to find the investment required to build the infrastructure, processing facilities and transport network required to deliver its coal or copper to markets.
Tavan Tolgoi, around 300 km (190 miles) from the Chinese border, is already producing 2.5 million tonnes a year. It aims to raise total annual output to 6 million tonnes by 2013, eventually rising to 20 million tonnes.
Draft: REGULATION FOREIGN INVESTMENT IN BUSINESS ENTITIES OF STRATEGIC IMPORTANCE
May 1 (BCM) --
For reference with respect to the draft Foreign Investment Review law being discussed in Parliament, attached are the following:
1. Draft Foreign Investment Review law - Mongolian April 25, 2012
2. Draft Foreign Investment Review law - English April 25, 2012 (unofficial translation)
3. Australia's Foreign Investment Regime 2009
4. Review of Foreign Investment Laws in Canada 2009
Mongolia mine law change unlikely to be retroactive, HDF to become more traditional sovereign fund – Dep. Minister
April 30 (Reuters) - Changes to Mongolia's investment rules that will allow it to review takeover bids by foreign investors are part of efforts to avoid over-dependence on commodity-hungry China and are not aimed at reviewing existing deals, a government minister said.
Worries over the new rules have unsettled investors in Canadian miner SouthGobi Resources.
Earlier this month, China's state-owned aluminium giant Chalco said it planned to make a proportional bid to all shareholders to buy a 60 percent stake in coal miner SouthGobi. Ivanhoe, which owns a majority stake, has already agreed to tender its shares in favour of the deal.
The Mongolian government said after the deal was announced that it would suspend SouthGobi's licences for its several large coal projects, which are close to the Chinese border, and said it would introduce new foreign investment legislation.
"People demand the government does everything possible not to let one country dominate (the economic balance)," Chuluun Ganhuyag, Mongolia's vice finance minister, said on Monday on the sidelines of an investor confidence in London.
"I don't think the law will be retroactive. The Chalco deal is still ongoing, still on the table," he said, adding Ivanhoe and Chalco had indicated their readiness to work with the Mongolian government.
Ganhuyag also said the new law would only apply to investment in certain deposits, but the list would go beyond the country's current list of strategic assets. "There must be some sort of threshold," he said.
He added Mongolia, a top supplier of coking coal to China, was also keen to cooperate with Beijing on securing access to the seaborne coal market, for example through the port of Tianjin.
Ganhuyag did not elaborate on whether the legislation would involve specific shareholder limits for a foreign or foreign state-owned entity, but said it would bring Mongolia into line with other resource-rich states like Canada or Australia.
He said separately that the country, sitting on an estimated resource bounty worth $1.2 trillion, was planning to shift its Human Development Fund - set up for the distribution of a share of the wealth to the country's citizens - to a more traditional sovereign wealth fund which would begin accumulating cash from July, building from a base of around $600 million.
"We are still working at the cabinet level on this proposal. We want to maybe create a future pension type of fund which will enable us to invest long term and take bigger risk than the stabilisation fund," he said, referring to a fund set up to smooth out the vagaries of commodities markets.
The sovereign wealth fund would aim to diversify Mongolia's wealth and would invest overseas.
UPDATE 2-Mongolia policy worries hit SouthGobi deal
* Mongolia eyes rules to review investments by foreigners
* Legislation in parliament this week
* Chalco says bid contingent on winning regulatory nod
* Chalco says approval terms must be satisfactory to it (Adds comments from SouthGobi)
TORONTO/MELBOURNE, April 26 (Reuters) - Speculation mounted on Thursday that Chinese aluminium giant Chalco's plan to buy a majority stake of Canadian coal miner SouthGobi Resources Ltd and take control of its projects in Mongolia could be sideswiped by new Mongolian government legislation.
Wary of its giant neighbor China, Mongolia looks set to enact new investment rules that would allow it to review deals involving foreign companies that have assets in Mongolia.
After state-owned Chalco announced in early April its $926 million bid to gain a majority holding in SouthGobi from Australia's Ivanhoe Mines (Mogi: Australia?), the Mongolian government said it would to suspend SouthGobi's licenses for its several large coal projects, which are close to the Chinese border. It then said it would introduce new foreign investment legislation.
Chalco - its full name is the Aluminium Corp of China Ltd - responded on Wednesday by saying it would not move forward with the deal until it has all the necessary regulatory approvals from Mongolia in place.
Mystery surrounds what exactly is in the new legislation.
Some analysts have speculated that it may just be a ploy ahead of elections in June and predict the deal will go through. But others say Mongolia fears all its coal will go to China, the world's biggest coal consumer, where it fetches much lower prices than in the seaborne market, and that the government is serious about safeguarding its interests.
"This is not an election stunt. There has been a long-standing fear of domination of the Mongolian economy by Chinese state-owned enterprises," said an Ulan Bator-based senior executive, declining to be identified due to the sensitivity of the matter.
Historical mistrust between the two countries has meant that while Mongolia has opened its doors to foreign investors over the past decade, Chinese companies have found it hard to win access to Mongolia's vast coal and copper mines.
SouthGobi, which owns a number of coal assets spread across Mongolia including the big Ovoot Tolgoi coal mine, said on Thursday that mining at its flagship asset was continuing.
"We haven't received any official notification of the suspension, so all operations at Ovoot Tolgoi are continuing as normal," said Steven Feldman, a company spokesman.
"We feel that there is no reason to suspend the licenses," he said. "At the end of the day, what benefit does it have shutting down the mine and having hundreds of Mongolians laid off?"
Chalco is also pressing ahead with securing more Mongolian coal interests, buying a stake of almost 30 percent in Hong-Kong listed Winsway Coking Coal Holdings Ltd, a big buyer of Mongolia's coal. It also sells coal from Mongolia's prized Tavan Tolgoi mine.
Chalco and Ivanhoe said in a joint statement on Wednesday that they intend to cooperate with Mongolia to ensure their deal proceeds and meets requirements under any new laws enacted by the country.
Chalco said it believes the proposed deal will be of "net benefit to Mongolia and the Mongolian mining industry," echoing arguments made by a range of foreign investors who say the country needs foreign investment to develop its abundant resources.
OTHER DEALS DELAYED
Even though the legislation is on the Mongolian parliament's agenda for the next two days, it is still not clear what the legislation includes, a lawyer involved in foreign investments in Mongolia said.
The government has been looking at other countries' foreign investment laws as a potential model, including those in major resource producers Australia and Canada, the lawyer said.
Australian and Canadian guidelines call for protecting the national interest and closer scrutiny on deals where state-owned enterprises are acquiring assets.
Ulan Bator-based broker Frontier Securities said in a note this week that communications from parliament and Mongolian media create the impression that the bill would likely be approved speedily.
Uncertainty over rights in Mongolia has meant other deals have also been delayed.
SouthGobi has extended the closing date on plans to sell its Tsagaan Tolgoi thermal coal project in Mongolia to Australian-listed Modun Resources Ltd to as late as Dec. 31. The $30 million deal had been supposed to close by June 1.
The planned sale of part of Mongolia's Tavan Tolgoi coal mine, estimated to have as much as 7.5 billion tonnes of coal, has also been held up due to concerns over foreign ownership.
Bidders for the its western block include China's Shenhua Group, U.S. coal miner Peabody Energy, a Russian-Mongolian consortium headed by Russian Railways, and Japanese and South Korean firms.
The government may decide to hold on to the block, given the difficulties of a consortium coming together, chief operating officer of state-owned Erdenes-Tavan Tolgoi, Graeme Hancock, said this week.
But Peabody has not given up and remains optimistic that it will be a part of any long-term development of Tavan Tolgoi, company spokesman Vic Svec said in a comment emailed to Reuters.
Link to SouthGobi/Chalco Joint Statement, April 25
SGQ closed +1.63% yesterday to C$6.86, 1878 closed +2.29% to HK$53.70 today.
Chalco in new Mongolia coal deal (30% stake in Winsway) even as Mongolia government balks
April 24 (Reuters) - China's state-run aluminium giant Chalco (2600.HK) has stepped up its pursuit of Mongolian coal, announcing a second deal this month despite signs that Mongolia's government is seeking to derail an earlier deal.
Resource-rich Mongolia has become an attractive target for Chalco or the Aluminium Corp of China Ltd (601600.SS) which has long sought to diversify away from aluminium.
But while Mongolia has opened its doors to foreign investors over the past decade and has willingly sold coal to China, Chinese companies have found it hard to access Mongolia's vast copper and coal mines directly due to Mongolia's historic mistrust of its giant neighbor.
Chalco said it would pay $308 million for a stake of almost 30 percent in Winsway Coking Coal Holdings Ltd (1733.HK), a big buyer of Mongolian coking coal and a deal that would complement its proposed purchase of a majority stake in SouthGobi Resources Ltd (SGQ.TO) (1878.HK), which owns four coal projects in Mongolia.
Last week the Mongolian government suspended some of SouthGobi's mining and exploration licenses, a move that many interpreted as an attempt to scupper Chalco's plan to buy 57.6 percent of SouthGobi for $926 million.
"Mongolians see this as creeping Chinese State domination of its economy which is not welcome. Mongolians treasure their economic and political independence and will do whatever is necessary to protect it," a senior executive in Mongolia said.
He declined to be identified due to the sensitivity of the issue.
Chalco has had previous business dealings with Mongolia, however, having secured an agreement to purchase coal with the Mongolian government-owned Erdenes Tavan Tolgoi project.
China's top aluminium maker is paying HK$2.12 per share for Winsway, a 13 percent premium to Winsway's close on Monday.
U.S. coal miner Peabody Energy (BTU.N), which has a 5.1 percent stake in Winsway, declined to comment on whether it has any concerns about Chalco's purchase of a holding in Winsway.
Winsway shares have climbed 26 percent in the past four weeks, outperforming a flat broader market.
The rally comes after its stock fell in January on fraud allegations from a mysterious research firm called Jonestown Research. Winsway refuted the allegations, calling the report flawed and full of errors.
Winsway has also teamed up with Japanese trading house Marubeni (8002.T), buying Canadian coal miner Grand Cache for about $991 million.
Winsway Coking Coal bonds due in 2016 surged on news that Chalco's stake buy and stoked hopes of a rating upgrade. The bonds surged to a high of 95 from the overnight levels of 79/80 following the announcement. The bonds ran into some profit taking from private banking accounts taking it down to 93.75/94.75.
Chalco has flagged losses in the first quarter of 2012 after reporting a bigger-than-expected loss in the fourth quarter of last year due to lower metal prices and higher costs.
Related: Chalco Swings to Quarterly Loss; First-Half Remains Unprofitable – Bloomberg, April 30
Fitch: No rating impact on Winsway from Chalco's acquisition
Apr 25 (Fitch Ratings) - Fitch Ratings says Winsway Coking Coal (Winsway, 'BB'/Stable) will not see immediate rating impact from Aluminium Corporation of China's (Chalco, 'BBB+'/Stable) proposed acquisition of a 29.9% stake in the former as the benefits will only accrue over the long-term.
Fitch expects the acquisition, which will make Chalco Winsway's largest shareholder, will enhance Winsway's market position and competitiveness via Chalco's stronger access to both funding and government support. Chalco's stated commitment to expand into Mongolian coal mining could also increase Winsway's utilisation of its logistics capacity.
The acquisition will also likely remove Chalco as a direct competitor to Winsway in Mongolian coal logistics provision. Competition from Chalco, which recently entered the Mongolian coal trading market, and from Inner Mongolia Thermal Coal for existing railway transportation capacity was part of the reason for Winsway's 2011 performance being weaker than market expectations.
Industry fundamentals remain favourable over the long term. Only around 20% of China's proven coal reserves are coking coal while high-quality hard coking coal is even scarcer in China, representing only 7% of total coal resources. Long-term steel production growth is another factor driving the demand for coking coal.
Separately, Fitch has also published a non-rating action commentary "No Rating Impact on Chalco from Winsway Stake Buy", available on www.fitchratings.com.
Winsway Annual Report 2011
April 25 --
Winsway Proposes Final Dividend of HK$0.016 for 2011
April 25 --
Ivanhoe CEO Loses in Rio 'Chess Game' Over Mongolia Mine
April 20 (Bloomberg) Twelve years after beginning his quest to build a copper mine in Mongolia's Gobi Desert, it's checkmate for Robert Friedland.
"Friedland's lost the chess game with Rio," John Stephenson, a fund manager in Toronto who oversees about $2.7 billion at First Asset Investment Management, said in an interview.
His first multibillion-dollar transaction came in 1996 when, as co-chairman of Diamond Field Resources Inc., the owner of Voisey's Bay, he presided over a bidding war between Canadian miners Inco Ltd. and Falconbridge Ltd. Inco prevailed.
"He always used to say, if you had one person interested in a project you had a negotiation, if you had two you had an auction," Gordon Toll, a former deputy chairman of Ivanhoe, said in an interview. "He's good at taking it to the limit and getting the last squeak out of the pig."
Not all of Friedland's investments turned out as well as Diamond Fields. Galactic's mine near Summitville, Colorado, was blamed by the U.S. Environmental Protection Agency for contaminating the Alamosa River.
Friedland resigned *as a director in 1990 and Galactic later filed for bankruptcy in 1992. He later made a $20.7 million voluntary payment to help restore the river, while denying responsibility for the pollution. The episode earned him the nickname "Toxic Bob."
Friedland invested in a copper mine in Myanmar in the 1990s, a move criticized by non-governmental organizations Canadian Friends of Burma and MiningWatch Canada. He cut his ties with the copper operation there in 2007, according to Ivanhoe.
In 2005, Friedland told an investor conference in Florida that developing part of Oyu Tolgoi was like making "T-shirts for five bucks and selling them for $100," the Wall Street Journal reported in 2007. The comments probably delayed Ivanhoe's investment agreement with Mongolia, said Julian Dierkes, an associate professor at the University of British Columbia who has studied the country's mining laws.
"He's been much more circumspect since then," Dierkes said in an interview.
Friedland has expanded his interests beyond Oyu Tolgoi to include mining assets in Australia and Kazakhstan. Ivanhoe also holds a controlling stake in coal producer SouthGobi Resources Ltd. (SGQ), which last week it agreed to sell to Aluminum Corp. of China Ltd. Friedland also holds 16 percent of Ivanhoe Energy Inc. (IE), a Vancouver-based oil company.
"He never is doing just one thing at one time," Bristol Investment's Reik said. "We probably only know half the things he's working on."
Ivanplats controls the Kamoa copper project in Congo and Platreef, a project that sits on deposits of platinum, gold, copper and palladium in South Africa. Ivanplats filed documents to Congolese mining regulator to turn its exploration permits to mining permits, Mines Minister Martin Kabwelulu said in an interview on Feb. 28.
"He's now onto what can he promote next," Andrew Michelmore, CEO of China's Minmetals Resources Ltd., said last month in an interview. "I've heard him talk about Kamoa being bigger than Oyu Tolgoi, and you just go, yep, there he goes again."
Rio moves closer to owning Mongolia copper, gold mine
April 19 (Reuters) - Rio Tinto took a big step toward owning a massive copper and gold project in Mongolia and diversifying from iron ore, after agreeing to buy more shares in developer Ivanhoe Mines Ltd and guaranteeing $3.3 billion needed to open the mine.
Successful development of the Oyu Tolgoi project is crucial to reducing Rio Tinto's dependence on iron ore, which some analysts say may be in surplus within the next three years.
Ivanhoe's founder billionaire Robert Friedland is leaving the company as part of the deal announced on Wednesday.
The deal with Rio Tinto is essential for the Oyu Tolgoi project to reach commercial production on target in the first half of 2013, and should give shareholders some comfort going into Rio Tinto's annual meeting in London on Thursday.
Investors will be looking for an update on the capital and operating costs at Oyu Tolgoi, following a review released last month by Ivanhoe, and not officially endorsed by Rio Tinto, that put the capital costs at $13.2 billion, up from $9.55 billion.
Rio Tinto has invested more than $4 billion in Ivanhoe over the past six years to position itself to take over the company founded by Friedland and get its hands on the Canadian miner's 66 percent stake in Oyu Tolgoi, one of the world's largest copper discoveries.
Along the way, Friedland, best known for turning the Voisey's Bay nickel discovery in Canada into a C$4.3 billion ($4.4 billion) fortune, tried to ensure he would get a big takeover premium for Ivanhoe.
Was Friedland outsmarted by the Anglo Australian miner, which owns 51 percent of Ivanhoe?
Analysts say yes, but that was largely because falling copper prices and tight credit conditions worked against Ivanhoe as lenders balked at providing up to $4 billion to the Toronto-listed explorer.
"Events have just conspired to help Rio use its financial muscle. It's used patience and has been in a good position and should be able to get the balance of the company without having to pay a big premium," said Tim Gerrard, an analyst at Investec.
Friedland got a severance package on Wednesday and Ivanhoe agreed to sell new shares at $8.34 a piece to raise $1.8 billion to help finish digging the mine in the South Gobi desert.
"Ultimately, Friedland had always wanted someone to bid for the balance of the company that wasn't owned by Rio," said Tim Barker, a portfolio manager at BT Investment Management.
As recently as last August, Friedland argued Ivanhoe was worth at least $34 a share.
At the time, Ivanhoe was trading around $25.50. Its shares have since crumbled, after Rio Tinto won a fight against Ivanhoe's "poison pill" defence last December and most recently after Ivanhoe's cost estimates on Oyu Tolgoi soared.
"(Rio) will pay a premium at some point, but it'll be off a lower base," said Investec's Gerrard.
Rio Tinto declined to comment on the sale of Ivanhoe's stake in Mongolian coal miner SouthGobi Resources to China's Chalco, which could be derailed after the Mongolian government suspended its SouthGobi exploration licenses.
Ivanhoe's shares on Wednesday rose 16 percent to $13.64 in New York and to C$13.49 in Toronto.
Future price gains are likely to be limited, analysts said, effectively capped by the $12.79 a share that Rio Tinto has agreed to pay to convert warrants that Ivanhoe will issue to the Anglo Australian miner over a three-year period into shares. Rio Tinto stands to own as much as a 64.8 percent stake in Ivanhoe.
Rio Tinto's shares gained 3 cents to A$66.53, trailing a 0.7 percent gain in the materials sector.
IVN releases, April 18:
Ivanhoe CEO Resigns as Rio Commits to Mongolia Mine Funds – Bloomberg, April 19
SouthGobi Resources extends expected closing date for sale of Tsagaan Tolgoi
April 25 (Proactive Investors) SouthGobi Resources (TSE:SGQ)(HKSE:1878) said Tuesday that the expected closing date of the sale of its Tsagaan Tolgoi thermal coal deposit to Modun Resources (ASX:MOU) has been extended to on or before December 31.
Earlier this month, the company announced the Mineral Resources Authority of Mongolia requested the suspension of some of its mining and exploration licenses for its Ovoot Tolgoi coal mine following a buyout bid by Chinese aluminum giant Chalco.
SouthGobi, which sells metallurgical and thermal coal mainly to customers in China, said last week the suspension would be initiated to allow the government to review the proposed change of ownership.
SouthGobi said Tuesday the extension of the expected closing date with Modun allows additional time to resolve any issues.
All other material terms of the deal remain unchanged, the company added.
In March, Mongolia-focused SouthGobi said it will sell its Tsagaan Tolgoi deposit, a thermal coal property, to Modun in a deal valued at $30 million.
Under the terms of the agreement, SouthGobi will receive $7.5 million in up-front cash, $12.5 million shares of Modun common stock, and deferred consideration of $10.0 million in Modun stock.
Should SouthGobi acquire over 14.9 percent of Modun shares, it will also have the right to nominate one director to Modun's board. The deal was originally expected to close by June 2012.
In early 2008, the company announced an initial NI 43-101 compliant resource report for the deposit, which estimated measured plus indicated resources of 36.4 million tonnes of coal, plus another nine million tonnes of coal in the inferred category.
Tsagaan Tolgoi is in the Omnigovi Aimag, approximately 570 kilometres south of the nation's capital of Ulaanbaatar and 113 kilometres southeast of the provincial capital of Dalanzagad.
The project is also located 415 metres to the northeast of SouthGobi's flagship Ovoot Tolgoi project, which sells coal to customers in China.
SouthGobi Resources Provides Clarification on Recent Change of Auditor
HONG KONG, CHINA--(Marketwire - April 20, 2012) - SouthGobi Resources Ltd. (TSX:SGQ)(HKSE:1878) ("SouthGobi") disclosed that Deloitte & Touche LLP ("Deloitte") had resigned from their position as Auditor of SouthGobi effective April 2, 2012 and were replaced by PricewaterhouseCoopers LLP. SouthGobi has noted some speculation and confusion regarding the announcement and provides some clarification.
Rio Tinto plc ("Rio Tinto") became the majority shareholder of Ivanhoe Mines Ltd. ("Ivanhoe") in January, 2012. Ivanhoe is the majority shareholder of SouthGobi and under SEC regulations Rio Tinto is therefore deemed to have control of SouthGobi through their majority ownership of Ivanhoe. Due to Deloitte's provision of non-audit services to Rio Tinto, an issue with SEC guidelines arose regarding auditor independence at SouthGobi. Deloitte was therefore required to tender their resignation from the position of Auditor of SouthGobi to remove the conflict with the services provided to Rio Tinto. We know of no other company specific matters related to Deloitte's decision to resign as Auditor of SouthGobi.
Deloitte has confirmed that, save as aforementioned, there are no circumstances connected with its resignation which it considers should be brought to the attention of the shareholders of SouthGobi.
M. Ariunbayar: Suspension of SouthGobi Sands license was a warning sign to Ivanhoe Mines
April 30 (UB Post) The following is an interview with the acting Director of the Mineral Resources Authority M. Ariunbayar. Translated from the Undesnii Shuudan newspaper.
-Let us begin our conversation with recent events – SouthGobi Sands. A draft law was proposed to the State Great Khural concerning a certain loophole in the law but the only official decision made today is the suspension of SouthGobi Sands licenses. What sort of management is this?
-This simply means getting permission from the Mongolian Government. We are currently discussing the company in question which obtained the rights to the stocks of SouthGobi Sands. Right now the mineral resources still belong to the Mongolian people. They should understand that owning stocks does not necessarily mean owning the resources. Suspending the licenses means that the stocks cannot be transferred, everything is halted.
I want to add something here: the suspension was our warning sign and I think our target received the sign. Ivanhoe Mines were planning to sell its Tsagaan Tolgoi mine but now they have stopped. This is the direct result of the SouthGobi Sands license suspension.
-People are counting the days until the law on limiting foreign ownership on state strategic mines is passed. Is it possible to resolve this issue with the suspension action even after the 35 days?
-Well, they are talking about the time in which the permission is granted. But what we should be talking about is how the buyer and the seller should both be seeking to get permission from the Mongolian Government.
-Even State Great Khural members are saying that if the law is passed within the 35 days, the Mongolians will not lose their resources to China…
-This law is not about losing resources. It is law on foreign investment management. It will manage what it has to. We also cannot understand that the new law will limit foreign investments.
-But unless we deal with this fast, Chinese state-owned companies will be mining and exporting coal from within Mongolia, will the market rule apply to this operation?
-We did bring this issue up in 2009, but no one paid any attention to it. But this doesn't mean it cannot be managed today. It can be done through monitoring coal exports. We can determine exactly how much we can mine, and how much we can sell. Whether a Chinese state-owned company was planning to reduce its coal price is just a speculation that stirred up a lot of trouble.
-It is said that trading can be done without getting permission from the Government through a loophole in the law. Generally, are there any other loopholes or similar problems in the current Law on Mineral Resources?
-I think there is no perfect law. I don't think there are any countries with the perfect law. Canada is believed to be the most experienced country in mining, but I believe in 2005, a large foreign company that was mining gold in Canada simply left the country after exploitation without proper mine closure procedures and ecological restoration. Canada then quickly passed a law that forces mining companies to pay up all the environmental restoration costs before the mining operations commence.
There are a number of things that need to be fixed in the Law on Mineral Resources. We cannot count them one by one, there are always new ones.
-There are foreign investment limitations on 15 mines that are considered to be of strategic importance. What about the other mines? The State Great Khural was ordered to add more mining sites to the current 15, what is the progress?
-This is being done. We have been doing this and will continue in the future. Every time a company performs a full geological data on a reserve and reports it to the Ministry of Mineral Resources and Energy, we find and evaluate new reserves. It is not about how many strategic mines we have but it is about what we do after we have many strategic mines. This management should be satisfactory.
Private companies are reluctant to have their mines turned into a state mine of strategic importance as the Government support for any strategic mine is very blurry. This should be managed.
-Lately, there is news that the Oyu Tolgoi reserve estimation is increasing. What can you say about this?
-I received their official standing on this rumor and they said that as of today they have drilled holes in locations where there could be possible reserves. But they don't yet have a full geological data to solidly say that the total reserve has increased. They have sent me this information through a letter, saying that geological exploration is ongoing.
There is one geological rule to finding mineral deposits: they are discovered by looking in places right next to other mineral deposits. We do not usually go out to nowhere to look for minerals. So we believe that there are other deposits nearby Oyu Tolgoi.
SouthGobi/Chalco/Ivanhoe Deal Possibly Blocked: Is Mongolia's Investment Climate Ready For The Global Stage?
April 17 (Jon Springer via Seeking Alpha) --
In this article:
New problems for Ivanhoe Mines and SouthGobi Resources.
· Review of the story regarding the West Tsankhi deposit of Erdenes Tavan Tolgoi as it provides a possible timeline for the resolution of the current problems of Ivanhoe Mines and SouthGobi Resources.
· Near-term investing counsel for Mongolia investments: caution and seek opportunistic investments.
· Brief comments on that state of political institutions in Mongolia and the investment climate.
· Brief remarks on why investors in Mongolia should care about how all Mongolia citizens benefit from the country's economic boom.
· Closing words on Mongolia's bright outlook going forward.
There is a new problem for Ivanhoe Mines and SouthGobi Resources which I tried to telegraph might be coming in my previous article based on heretofore unconfirmed rumors I had heard. I submitted my previous article at 5 pm April 15, 2012 and it was published at 2 am the following morning (New York time). Largely about Ivanhoe Mines, in the article I noted:
There has also been some contentious reactions in the Mongolian government regarding Ivanhoe Mines' recent agreement to sell SouthGobi Resources to Chalco for an estimated $926 million.
The UB Post rounded up a few reactions to this deal...
Political statements such as these are going to be amplified not only this week, but through the Mongolia's national elections in June 2012.
SouthGobi Resources Ltd said the Mongolian government suspended exploration and mining licenses for its Ovoot Tolgoi coal mine following a stake buyout bid by Chinese aluminum giant Chalco.
I originally wrote about Chalco's (ACH) deal to buy Ivanhoe Mines' (IVN) 57.6% stake in SouthGobi Resources (SGQRF.PK) on April 4, 2012. In a sub-section of the article entitled, "Add An Election Year And Stir Well", I noted:
SouthGobi Resources Announces Resignation of Director
HONG KONG, CHINA--(Marketwire - April 18, 2012) - SouthGobi Resources Ltd. (TSX:SGQ)(HKSE:1878) today announced the resignation of director John Macken. Mr. Macken has been a member of the board since June 2007.
"We thank Mr. Macken for his guidance and service throughout the formative years of the Company," said Mr. Peter Meredith, Chairman of the Board.
Ivanhoe Mines: Nothing Much Has Changed
April 19 (Jon Springer via Seeking Alpha) Ivanhoe Mines (IVN) made two major announcements on April 18, 2012, that should not have surprised anyone and do not change the volatile outlook for the company through Mongolia's national elections in June 2012. Yet, Ivanhoe Mines shareholders rejoiced and sent the shares 16% higher on April 18 after losing about 25% in the prior 11 trading sessions.
Announcement 1: CEO Robert Friedland and multiple members of the board are resigning. Rio Tinto (RIO) management will step into their place.
We have known this would happen eventually since December 13, 2011, when Ivanhoe Mines lost an arbitration hearing to Rio Tinto that cleared the way for Rio Tinto to take over Ivanhoe Mines. And this has certainly been clear since January 25, 2012, when Rio Tinto raised its stake in Ivanhoe Mines to 51%. Bloomberg wrote two days later that they anticipated Rio Tinto would change management at Ivanhoe Mines.
As predicted months ago, management has changed. Inasmuch, this is not news, and nothing has changed.
Announcement 2: Ivanhoe Mines shareholders will be able to exercise a right to purchase more shares of Ivanhoe Mines at CAD$8.34 in early May 2012. Actually, this seems to be a negotiated deal as part of Rio Tinto taking over Ivanhoe Mines and Mr. Friedland stepping out of the way. Canada's Globe and Mail had accurately reported there was an issue still pending for Rio Tinto with its takeover of Ivanhoe in Ivanhoe's shareholder rights agreement since the arbitration ruling in December 2011.
It seemed, by my interpretation, like the original rights agreement allowed for Ivanhoe Mines shareholders to gain 2 shares for every one held if the company was taken over. However, it has been noted since January 18, 2012, that Ivanhoe Mines plans to scrap that shareholder rights agreement at its annual meeting on May 11, 2012. Thus, in the end, we have an equity financing of about $1.8 billion that is part of the behind the scenes negotiated takeover of Ivanhoe Mines by Rio Tinto. We knew this was happening, didn't we? Not much changed.
But shares for $8.34 if you are a shareholder. Arbitrage! Cheap shares! One could argue that. It may be a good deal. It will depend on when Rio Tinto buys the company out, at what price, and what happens between now and Mongolia's elections near the end of June, more than two months away. Maybe this is a change. Maybe not as much as one would think.
Earlier this week, I spent a lot of time delving into the Oyu Tolgoi 513 page technical report in an article to point out that downgrades of the stock, as reported by the mainstream media, were flawed.
Downgrade argument one was that ore grades were lower. Factual response: ore grades were principally lower because Ivanhoe Mines changed how they calculated ore grades to a more stringent standard.
Downgrade argument two: costs of building the mines are up. Factual response: costs were higher mainly due to difficulties with the ventilation system for the underground mine and normal expectable inflationary pressures in a country that had 17.3% GDP growth last year.
Downgrade argument three: Oyu Tolgoi is behind schedule. Factual response: the open-pit mine is one year ahead of schedule. The underground mine is behind schedule, probably by a matter of months, because of the ventilation issues management is working to resolve.
Nothing changed that much.
SouthGobi Resources Annual Report 2011
April 24, --
MMC Annual Report 2011
April 23 – Mongolian Mining Corporation (HK:975) --
Centerra Gold Presentation at the NAMBC 22nd Annual General Meeting – "Is Mongolia Open for Investment?"
April 19, Centerra Gold (TSX:CG) --
Khan Completes $2,312,000 Private Placement
TORONTO, ONTARIO--(Marketwire - April 19, 2012) - Khan Resources Inc. (TSX:KRI) ("Khan" or the "Company") announces the closing of a non-brokered private placement financing resulting in the issuance of 13,600,000 common shares at a price of $0.17 per common share for gross proceeds of $2,312,000 (the "Offering"). The common shares issued are subject to resale restrictions until August 19, 2012. No fees or commissions were paid in connection with the offering.
Khan plans to use the proceeds of the offering to advance the Company's international arbitration case for $200 million against the Government of Mongolia and for general corporate purposes. The hearing for the jurisdictional phase of the arbitration will occur May 14, 2012 to May 16, 2012.
The private placement remains subject to the final approval of the Toronto Stock Exchange.
FeOre: POSITIVE EREENY IRON ORE DRILLING RESULTS
April 26 -- The Board of FeOre Limited (FeOre or the Company) (ASX:FEO) is pleased to advise that it has received very encouraging results from recently completed Davis Tube Recovery (DTR) test work on Diamond Drill Samples from the Company's Ereeny Project.
FeOre has drilled an additional six core holes to infill portions of the Ereeny Resource. The purpose of the drilling was
(i) to confirm and increase the confidence of the resource base; and
(ii) to confirm and increase the metallurgical understanding of the ore.
The drilling has confirmed the mineralisation in areas of more widely spaced drilling, with some long intersections recovered. Davis Tube Recovery (DTR) results, which indicate a potential saleable product grade and yield, were completed on this drilling and include encouraging iron grades of up to 68% Fe in concentrate on an individual interval basis, at a grind size of 75 microns. These results confirm earlier work done and in the case of CK0-1 has significantly widened the intersection. Widest high grade intercepts include the following DTR results:
CK0-1 88.3m @ 32.2% DTR Fe (Magnetic) in Rock, 63.1% TotFe, and 9.3% Si02 in Concentrate from 26.6m
CK0-1 68.4m @ 28% DTR Fe (Magnetic) in Rock, 50.8% TotFe, and 16.7% Si02 in Concentrate from 118.8m
CK0-1 30.7m @ 42.3% DTR Fe (Magnetic) in Rock, 58.9% TotFe, and 14% Si02 in Concentrate from 202.8m
CK3-1 36.3m @ 43.8% DTR Fe (Magnetic) in Rock, 62.8% TotFe, and 8.9% Si02 in Concentrate from 150.3m
CK3-1 39.2m @ 34% DTR Fe (Magnetic) in Rock, 57.6% TotFe, and 13.7% Si02 in Concentrate from 222.9m
CK3-4 43m @ 26.2% DTR Fe (Magnetic) in Rock, 59% TotFe, and 11.7% Si02 in Concentrate from 37.7m
CK3-4 55m @ 30.3% DTR Fe (Magnetic) in Rock, 54% TotFe, and 16.6% Si02 in Concentrate from 138.7m
CK3-4 105.6m @ 32.1% DTR Fe (Magnetic) in Rock, 55.3% TotFe, and 16.6% Si02 in Concentrate from 219.2m
The DTR testing was the first on the project. The method will be refined and it is expected that with such refinement impurities in the concentrate such as Silica (SiO2), Alumina (Al2O3), Phosphorous (P) and Sulphur (S) will be reduced.
Cash at end of quarter A$28.5m
FeOre Quarterly Report
April 30, FeOre Limited (ASX:FEO) --
Cash at end of quarter A$18.5m
Xanadu Mines Quarterly Report,
April 30, Xanadu Mines Limited (ASX:XAM) --
Exploration drilling commences at the Sharchuluut Uul porphyry copper project;
Finalisation of a farm-in agreement on the Amgalant and Argalant Uul porphyry copper-gold exploration licenses, located in the South Gobi;
Appointment of Executive Director - Xanadu Mines Mongolia LLC;
Macquarie Bank appointed to advise on divestment of thermal coal assets;
AU$18.5 million cash on hand at 31 March 2012 to fund exploration and pursue new opportunities.
Xanadu's management team strengthened with the appointment of Executive Director - Xanadu Mines Mongolia LLC
April 19 -- Xanadu Mines Ltd (ASX:XAM) is pleased to announce that Haydn Lynch has been appointed Executive Director - Xanadu Mines Mongolia LLC, based in Ulaanbaatar, to strengthen the company's existing in-country management team.
Mr Lynch is a senior financial executive within the Australian and international mining industries having worked in corporate advisory and project funding roles with global and domestic investment banks over the past 19 years. His financial career has included commodity sales at Bankers Trust, project finance at Investec Bank Australia, corporate advisory and equity capital markets at RBC Capital Markets and Southern Cross Equities now Bell Potter.
Mr Lynch holds a Bachelor of Mechanical Engineering and Economics from the University of Queensland and a Masters degree in Finance from the University of New South Wales.
The Chairman of Xanadu Mines, Brian Thornton, said "Mr Lynch's appointment reflects a determination by the board to grow shareholder value and advance the company's exploration portfolio in Mongolia. We are delighted to attract an individual of Haydn's calibre and extensive resource sector experience in what promises to be a most exciting period in the evolution of the company."
Mr. Lynch said "Xanadu presents investors with an excellent opportunity to capitalise on its world class copper/gold porphyry targets and the growth and development of a hard coking coal platform in partnership with Noble Group across Mongolia."
"I look forward to the challenge of helping continue the development of the company's asset base and advancing Xanadu's strategy on copper and coal. Mongolia has already demonstrated its immense geological prospectively as evidenced by the world class Oyu Tolgoi development and the emergence of numerous bulk commodity projects supplying neighbouring countries together with emerging development of a seaborne market. The pace of resource development in Mongolia shows no sign of abating with the next decade being a truly exciting time for investors in the country", Mr Lynch added.
Kincora Copper closes Golden Grouse acquisition
April 24 (Proactive Investors) Kincora Copper (CVE:KCC) has closed its previously announced acquisition of Temujin Mining Corp.'s subsidiary, Golden Grouse, the company said Monday.
The share exchange agreement between both Kincora and Temujin was first reported on January 16, 2012.
Kincora issued 20 million shares to Temujin. On closing, Temujin kept 1.51 million Kincora shares and paid a dividend for the remaining stock to its shareholders.
Kincora will also issue another 15 million shares to Temujin upon the discovery of one million inferred ounces of gold within four years of the deal's close.
Golden Grouse is a Mongolian company that holds the mineral exploration licenses 15075X and 15076X next to Kincora's Bronze Fox project.
Kincora also agreed to spend $2 million on exploration on the acquired properties over the next two years. If Kincora does not complete the "minimum work" in the two-year period, it will issue 15 million shares to Temujin.
"We now hold two of Ivanhoe's former high priority target properties in Mongolia, the Bronze Fox and Tourmaline Hills," Kincora's chief executive Igor Kovarsky said in a statement.
"Kincora now has one of the largest land holdings along the highly prospective copper belt hosting Oyu Tolgoi."
Temujin is a portfolio company of investment firm Aberdeen International (TSE: AAB) and a member of the Forbes Manhattan Group.
Kincora Copper is a mining exploration and development company focused on copper-gold deposits in Mongolia.
Its key asset is the Bronze Fox copper-gold deposit, which rests in the south-east of Mongolia, along the Oyu Tolgoi copper belt.
Petro Matad to update shortly on 2012 field season plans for Mongolian oil projects
April 24 (Proactive Investors) Mongolia-focused oil group Petro Matad (LON:MATD) said it is in the final stages of completing its internal reports outlining the results of the extensive 2011 field season for Blocks IV and V Production Sharing Contract areas in the country.
The reports will contain conclusions and recommendations for future exploration programmes on Blocks IV and V.
The analysis of the 2011 Block XX drilling programme is also ongoing. Fieldwork on Block XX is currently in hibernation and both the drilling and workover rigs remain on standby.
Petro Matad will not make a decision on its 2012 field programmes until the desktop analyses are complete.
Those analyses involve the use of external technical consultants as well as the company's own technical resources. An update on the findings and their impact on Petro Matad's 2012 field programme will be given in the coming weeks.
The group holds sole operatorship of three PSCs with the government of Mongolia.
Block XX has an area of 10,340 square kilometres in the far eastern part of the country.
Blocks IV and V are located in central Mongolia. Block IV covers approximately 29,000 square kilometres and Block V approximately 21,150 square kilometres.
Petro Matad appoints new CFO John Henriksen as Clyde Evans retires
April 23 (Proactive Investors) Petro Matad (LON:MATD) today announced that chief financial officer Clyde Evans has now retired from his executive position.
John Henriksen joins the company as the new CFO. And Evans will remain a non executive director of the company.
Henriksen has 36 years experience in the oil and gas industry and he was most recently Salamander Energy's country manager for Indonesia. He will run the group's accounting and financial activities from the group's main offices in Ulaanbaatar, Mongolia. Subsequently the group's office in Perth, Australia, is being closed.
"Petro Matad is delighted to welcome John to the position of CFO. From a very well qualified group of candidates, he impressed us as the ideal fit for our company and its objectives," said chief executive Douglas McGay.
"His relocation to work with the company's executive and technical professionals in Mongolia is another forward step for the efficient and progressive management of the company. In particular, we anticipate his industry experience will add substantial value to the company and its operations."
Additionally Petro Matad also reported that exploration manager Dr. James Coogan has also retired and is has nearly completed the process of hiring a replacement. In the meantime chief geologist Dr Kurt Constenius is managing the team.
Petro Matad: Issue of Equity and Award of Options and Performance Share Awards
April 26, Petro Matad Limited (MATD:LN) --
Issue of Equity
Petro Matad announces that 505,447 ordinary shares of US$0.01 each were issued today under the Company's Long Term Equity Incentive Plan (the "Incentive Plan") based on length of service (the "Performance Shares"). The 505,447 Performance Shares were issued, under the terms of the Incentive Plan, at nominal value.
The Company also announces that a further 442,500 ordinary shares were issued today at an exercise price of 11 pence per share (the "Option Shares") as a result of the exercise of options held by employees under the Incentive Plan.
Award of Options and Performance Shares
The Company also announces that it is awarding options and Performance Share Awards to its recently appointed directors as set out in the table below:
Name of director
Number of options awarded
Number of Performance Share Awards awarded
The exercise price of the options awarded to the above directors will be 22.5 pence per share. The Performance Share Awards awarded to the above directors will vest on achievement of the following conditions:
· 25% of the shares shall vest on the first discovery of oil on a commercial scale;
· 25% of the shares shall vest on the first production of oil on a commercial scale; and
· 50% of the shares shall vest on the Company selling 1 million barrels of oil.
Total Voting Rights
Following the issue of the Performance Shares and the Option Shares, Petro Matad will have 186,011,468 shares in issue. There are no shares held in treasury. The total voting rights in the Company is therefore 186,011,468.
Entree Gold Inc.: Heruga Continues to Grow; 0.80% CuEq Over 590 Metres Drilled at the Heruga Deposit in Mongolia
Cash at end of quarter A$28.7m
Aspire: QUARTERLY REPORT, Quarter Ended 31 March 2012
April 30 -- Aspire Mining Limited (ASX: AKM, "Aspire" or "the Company") is pleased to present its March 2012 Quarterly Report.
Aspire is focused on developing its world-class 100%-owned Ovoot Coking Coal Project ("Ovoot Project") in northern Mongolia and advancing the region's infrastructure to bring Ovoot coking coal to world markets. It is currently working on the completion of a Pre-Feasibility Study for the Ovoot Project.
The Ovoot Project is a new discovery of a large coking coal deposit and the Company has currently spent AU$17 M on its discovery and development.
Aspire's other Mongolian projects include the Nuramt Coal Project (100%), Jilchigbulag Coal Project (100%) and the Zavkhan Iron Ore Project (earning 70%).
· Pre-Feasibility Study for the Ovoot Project progressed, results expected May 2012
· Ovoot airborne magnetics results highlight exploration targets
· 4,100 metres of exploration drilling completed at the New Discovery Area
· 3,600 metres of resource infill drilling and other technical drilling completed
· Rail Pre-Feasibility Study completed
· Feasibility Study commenced to construct a 170 kilometre road connecting Ovoot to the regional capital of Moron
· Ovoot Coking Coal Project receives Mongolian Resource Authority Registration
· US$133,000 contributed to fund 50% of Tsetserleg hospital construction
Aspire Mining Limited (ASX:AKM) Boosts Healthcare Services in Northern Mongolia
Perth, April 26, 2012 (ABN Newswire) - Mongolian coal explorer Aspire Mining Limited (ASX:AKM) is pleased to advise that it has agreed to assist to fund the completion of construction of a local hospital near to the Company's Ovoot Coking Coal Project ("Ovoot") in northern Mongolia.
In addition, Aspire has provided funding for two medical doctors to provide healthcare services onsite and to communities ("soums") surrounding Ovoot.
New Tsetserleg Hospital
Aspire, in partnership with the Khuvsgul Provincial Government ("Khuvsgul Government") has agreed to contribute 50% of the funds required to complete the construction of a new 20 bed Hospital at the Tsetserleg soum with the Khuvsgul Government providing the balance.
Commencing in October 2010, construction was halted in June 2011 due to lack of funding to complete the works. To date, the Khuvsgul Government has spent US$140,750 on the hospital's construction.
Aspire's contribution has enabled Construction of the hospital to commence again and is expected for completion in November 2012.
The Tsetserleg soum is badly in need of an upgraded hospital after a 2009 Government inspection report recommended closure of the existing hospital due to significant structural damage and ageing. A smaller clinic, 25 kilometres from the soum, has proved difficult for some residents to access.
The new hospital, designed by local Mongolian company TETU LLC, will include facilities to provide medical aid for special circumstances including ill children, maternity, pre and postnatal care, and quarantine for infectious diseases.
The new hospital is in line with the Khuvsgul Province Socio-Economic Development Plan for 2008-2015 to improve health services in the region, and in accordance with the Company's policy of corporate social responsibility to the environment it operates within.
Cash at end of quarter A$27.2m
Guildford: QUARTERLY ACTIVITIES REPORT
April 30, Guildford Coal Limited (ASX:GUF) --
Ø Upgraded JORC Inferred Resource on the Hughenden Project increased to 1.619Bt of thermal coal (from 1.036Bt) in the Permian Betts Creek Beds at depths suitable for underground mining
Ø Maiden JORC Inferred Resource for the White Mountain Project in northern Galilee Basin of 262Mt of thermal coal with open cut potential
Ø Independent consulting geologists estimated an Exploration Target# on the Kolan Project of 60Mt to 400Mt of coal with coking potential located in the Maryborough Basin
Ø Announced the acquisition of 50.52% of Springsure Pty Ltd which holds the Springsure Project (EPC1674) in the Bowen Basin, and which has an Exploration Target# of 60Mt to 235Mt of coal with export thermal and possibly PCI potential from the Reids Dome Beds
Ø Preliminary results from Scoping Study support the technical and economic feasibility of the South Gobi Project - North Pit with costings in line with forecasts
Ø Final mining contractor negotiations to be completed in May 2012 with an anticipated 8 to 10 week mobilisation period from contract to commencement of mining
Ø All necessary licensing and approvals for mining, transport and export of coal from South Gobi Project will be in place to allow commencement of mining mid-2012
Ø 10 parties responded to the EOI process for offtake from South Gobi Project consisting of large Chinese and Korean end users and major coal trading houses with indicative pricing received above expectations and a number of respondents submitting pricing structures more closely linked to Seaborne Trade coking coal prices
Ø Fluorite mineralisation discovered outcropping on Mid Gobi exploration licence in Mongolia with laboratory results of field grab samples revealing potential ceramic grade fluorite
Ø Defined an interim JORC Resource of 2.172Bt of thermal and coking coal across all projects managed by Guildford
Ø Developed an interim total Exploration Target# for all Projects managed by Guildford totalling 0.975Bt to 8.893Bt of thermal and coking coal
Ø $27.2m Cash at Bank at 31 March 2012
Guildford Appoints New Chief Financial Officer
May 1 -- The Board of Guildford Coal Limited (ASX: GUF) is pleased to announce the appointment of Mr Louis Chait to the role of Chief Financial Officer and Company Secretary of Guildford Coal Limited (Guildford).
Mr Chait's appointment further strengthens the Company's Executive Management team as it prepares for the start of coal production at the South Gobi Project in Mongolia mid-year.
Mr Chait will commence on the 1st June 2012 and will replace Norah St George who is leaving due to family health issues. The Board would like to take this opportunity to thank Ms St George for her contributions as Chief Financial Officer.
Louis Chait - Guildford Coal Limited
Prior to joining Guildford, Mr Chait enjoyed a successful career at Xstrata Coal spanning over a decade, where he held several senior executive finance and management positions including General Manager Finance - Business Analysis and Planning and General Manager Finance - Xstrata Coal South Africa.
Managing Director Mick Avery said that "Mr Chait's appointment is a further critical step on the path toward building a strong executive management capability that will guide the transformation of Guildford from explorer to coal producer".
"With production set to commence from our South Gobi open cut mine in the next few months, and other major developments anticipated in projects in the Mid Gobi, Mongolia and the Galilee Basin (in Australia), Louis' previous experience gained in supporting the growth and expansion of Xstrata Coal will be invaluable to Guildford as it follows a similar growth path".
Mr Chait holds a Bachelors of Commerce from the University of Cape Town, is a Chartered Accountant and a member of the Australian Institute of Chartered Accountants. For and on behalf of Guildford Coal Limited,
Cash at end of quarter A$791K
Black Ridge: QUARTERLY ACTIVITIES REPORT – MARCH 2012
April 30, Black Ridge Mining NL (ASX:BRD) --
Mongolia – Rare Earths
During the quarter, on 2 March 2012, Black Ridge Mining NL (ASX:BRD) (Black Ridge or the Company) announced that it had signed a Heads of Agreement to develop a licenced Rare Earths project located in the Tuv Province, 80 kms east of Ulaanbaatar, the capital of Mongolia. The Heads of Agreement allows for a 120 day due diligence period, during which time the Company will seek to finalise a definitive agreement to jointly develop the project.
Samples assayed in mid-2011 confirmed encouraging concentrations of lanthanum, scandium, yttrium, cerium and other Rare Earth Elements (REE).
The project licence area is approximately 7,750 hectares and is 80 km east of Ulaanbaatar.
The Company also released the following update in respect of the Rare Earths Heads of Agreement.
· Site inspection undertaken to confirm data provided with actual field validation
· Main ore body contained within an alkaline, igneous, elliptical shaped intrusion 550m long, 200m wide and slope elevation difference of 90m with an estimated Exploration Target of 20 million - 25 million tonnes *
· Topography is favourable for open cut operations
· Key local professional service providers identified
· Confirmed availability of well-developed local infrastructure
· Confirmation of positive results from the samples submitted for assaying will permit the Company to proceed to a planned drilling programme to provide a resource value of the deposit
Cash at end of quarter A$6.7m
Draig: QUARTERLY REPORT
April 30, Draig Resources Limited (ASX:DRG) --
· Maiden drilling campaign commenced on Teeg Licence, Ovorhangay province
· Multiple thick coal seams intercepted at less than 120m depth
· Thick coal sequences intersected, potentially covering a 3.5 km subcrop along strike
· Visual reports on chip samples noted as bright coal
· Progress made on completion of JORC compliant resource for Teeg licence
· Trinity exercises its option to increase participation in the Joint Venture
One Million Draig 20c Options Exercised
May 1, Draig Resources Limited (ASX:DRG) --
DRAIG DRILLS AHEAD WITH THICK COAL SEAM INTERCEPTS
April 23, Draig Resources Limited (ASX:DRG) --
· Coal seam intersected with cumulative seam thickness of up to 66.75m, which included a single seam thickness of up to 33.4m, starting at depth of <61m (BT_36)
· Previously announced thick coal sequences continue to be intersected, potentially covering a 3.5 km subcrop along strike
· Multiple shallow coal seam intersections logged on a total of 12 holes at less than 120m depth
· Visual reports on chip samples noted as bright coal
· Drill program extended to complete initial JORC resource and additional coal test work
· One rig continuing PCD drilling, second rig selectively coring representative coal intervals for quality test work
· Further drilling to be undertaken in northern part of licence to test potential coal sequence extension of up to 3kms from adjacent open cut
Draig Resources Limited (ASX: DRG) ("Draig" or "the Company") is pleased to announce that the Company has intercepted and logged a coal seam with a cumulative thickness of 66.75m, which included a single continuous seam thickness of up to 33.4m starting at a depth of <61m (BT_36).
Draig said its current drill program has made a significant number of intersections along the previously-announced thick coal sequence, which now covers a potential strike distance of 3.5km.
A total of 24 holes have been completed for 3,400m, of which 12 holes have intersected relatively shallow multiple coal seams at less than 120m in depth as far as 3.5km apart. Further testing, up to 3kms from current drilling around BT_01, is still required in the northern part of the licence to test for potential coal sequence extensions.
Draig Managing Director Mark Earley said the outstanding results means the Phase 1 drilling program will now be extended and will contribute to a JORC resource being established.
"The depth and thickness of the coal seams encountered have exceeded our expectations and, while we await coal quality analysis, the coal samples so far are reported as being visually hard, bright coal.
"The latest drill holes have been frequently intercepting a steeply dipping coal sequence. Further drilling will test the potential extension or possible repeat of this sequence in the northern part of the Teeg licence," Mr Earley said.
Draig's Phase 1 drill program sought to confirm one of the potential sequences identified in a due diligence exploration program undertaken in 2011, which intersected black coal seams of up to 40m.
Further drilling is intended to infill the sequence and test the potential extension of this sequence in the northern part of the Teeg licence.
The drill hole locations with coal intersections, which notably were all intersected at depths less than 120m, are shown on the Teeg licence map and detailed in the table below.
The two rigs continue to work around the clock, achieving up to 300m per day. To gain a better understanding of the coal quality, one of the rigs has commenced diamond drilling to core all representative coal intervals for quality and petrographic analysis at the ALS laboratory in Ulaanbaatar. The second rig will continue PCD drilling.
At the time of this announcement, the drilling of two further holes had commenced.
Cash at end of quarter A$142K
GMM: QUARTERLY ACTIVITIES REPORT – MARCH 2012
April 30, General Mining Corporation Limited (ASX:GMM) --
· Due diligence continues on potential coal exploration interests at Uvs in Mongolia
· Work program recommended for Khangai Project in Mongolia
· Strategic partner secured and plans for two stage capital raising, in conjunction with acquisitions of two new gold projects in Western Australia
Cash at end of quarter A$4.2m
Modun: March Quarterly Report 2012
April 30, Modun Resources Limited (ASX:MOU) --
· Acquisition of 100% of 10,500 Ha mining licence (Tsagaan Tolgoi) and 100% of 26,700 Ha exploration licence (Ajlyn Talbai) in South Gobi region of Mongolia (subject to shareholder and regulatory approvals)
· Tsagaan Tolgoi has an exploration target of 150 million to 250 million tonne (grading Qadb 5300 kcal/kg to Qadb 6500 kcal/kg) of high quality thermal coal and potential coking coal in the South Gobi Coking Coal District
· Tsagaan Tolgoi has a 45.4 million tonne JORC-Reported Coal Resource already defined over less than 5% of the mining licence area.
· High Quality Thermal and Potential Coking Coal Resource in Upper Permian Tavan Tolgoi sedimentary unit
· Modun's cash balance is $4.2m following a placement to institutional and sophisticated investors
· Nuurst Scoping Study and application for mining licence work continues to progress well and remains on track
· Modun continues to pursue coking and thermal coal projects in Mongolia
Cash at end of quarter A$1.6m
MRC: MARCH 2012, QUARTERLY ACTIVITIES REPORT
April 27, Mongolian Resource Corporation Limited (ASX:MUB) --
During this quarter two new non-executive directors joined the board.
The appointment of Mr. Sereeter Galsan Jamts on 14th March, 2012 as nonexecutive director has brought to the board his extensive experience in public and government relations. During the quarter, Mr. Galsan has provided assistance and advice on ongoing permitting and procedural control within the company and is our spokesman for the group in Mongolian Affairs.
Mr. John Hodder (48) has also joined the board on 14th March, 2012, in a nonexecutive role. John holds degrees in geology and commerce and a Masters in Finance. With more than 25 years' experience in the resources industry he has worked as a geologist, project evaluator and has extensive experience in project financing. He has spent the past five years in the Fund Management Industry within Australia where he was directly involved in investing in resource companies listed on the ASX.
The Board also announced this quarter, the appointment of Ms. Tanan Jargalsaikhan as acting chief financial officer. Ms. Jargalsaikhan holds a Bachelor Degree in Banking and Finance from the Institute of Finance and Economics of Mongolia and Diploma in Human Resource Management (Tokyo, Japan). She has held senior finance roles in Government and Private Enterprise and brings her skills in human resources as well as finance to the company.
Short list interviews were held this quarter for the role of Chief Operating Officer with the likely candidate having extensive experience in carbon in pulp (CIP) gold production. This is deemed necessary given the focus of the company toward gold production in 2012.
This is the Company's fourth quarter since the merger with the Mongolian assets in April, 2011. After its first year of operations the company is pleased with its progress on the design and development of its key projects at Sujigtei and Blue Eyes.
The Mongolian Government entered election mode this quarter with the party changing six of the twelve ministers which formed the governing coalition. These changes, which include the environment minister which is delaying the issue of our cyanide permit, were not unexpected and the company is now revisiting the issue with the new ministers. The company can commence concentrate production at the Blue Eyes site using its completed 100 tonne per day floatation plant with the approval of the Blue Eyes Environment Plan.
The company's cash reserves sit at US$1.6m at the end of March, 2012 with a planned budget for Quarter 2, 2012 of US$0.9m. The board of MRC is fully aware of the company's current cash situation and has been carefully planning its financing options to ensure the company has sufficient funds to operate. It is expected that gold production in Q2 will contribute significantly in covering the operating costs of the company, but the board has also taken the view that contingency finance is warranted. In this matter the board is in detailed discussion with financial groups to provide a convertible debt facility to the company. This finance is expected to be completed during Q2, 2012.
Significant work completed this quarter includes
Ø Completed Front End Engineering and Design ("FEED") work for 400tpd CIP gold plant
Ø 24 permits required for commencement of production were received.
Ø MRC readies to commence Stage I Plant commissioning in spring.
Ø EPC contracts were circulated to tender construction of Stage II CIP plant.
Newera Resources Ltd: Quarterly Activities Report
April 27 -- Newera Resources Limited (ASX: NRU) is pleased to provide the following report on its activities for the previous quarter;
· Newera received notice from the Department of Mines and Petroleum that Newera's application for E80/4632 at Cummins Range, had been granted.
· The Company undertook an internal review of the results of the recent drilling at Newera's Giant and Relief Well prospects within the Jailor Bore project.
· Planning has commenced on the 2012 year work programs for Newera's Jailor Bore, Cummins Range and White lady project areas.
· Newera identified a large vacant gold / copper prospective area in south western Sweden and lodged two applications to cover the most prospective areas of the vacant ground in south western Sweden.
· Newera is continuing a campaign to source new projects.
· Newera has identified Mongolia as a priority target country with high level of mineral endowment, a very workable Mining Act, and a level of political stability that should ensure a safe investment climate.
· The Company's agreement with Posit has lapsed.
· Newera completed its Entitlement Issue.
Newera continues a campaign to source new projects.
Over the past twenty four months, Newera has actively sought to research and secure new projects overseas with the initial focus on Kyrgyzstan. More recently Newera has researched projects in both Southern Africa (South Africa, Botswana and Malawi) and Mongolia.
Recent negotiations to acquire a package of tenements within Mongolia were terminated by Newera when investigations into the tenure of the key tenement failed under the scrutiny of due diligence.
However, during the course of reviewing the above indicated package of tenements, Newera identified Mongolia as a priority target country with high level of mineral endowment, a very workable Mining Act, and a level of political stability that should ensure a safe investment climate.
Armed with more confidence in Mongolia as an operating environment, over the past three months, Newera has, and will continue to, aggressively pursue contacts and project leads within Mongolia.
A number of Mongolian projects have been brought to our attention and Newera is actively reviewing those projects to determine each individual project's value - on merit, to Newera.
The Company will continue to review projects both on and offshore, and will pursue in more detail, those projects identified as having potential to add value to Newera.
Origo Partners: Interim Management Statement for the three month period from January 1, 2012 to March 31, 2012
May 1, Origo Partners Plc (OPP:LN) --
This Interim Management Statement by Origo Partners Plc ("Origo" or "the Company") and its subsidiaries ("the Group") relates to the three month period from January 1, 2012 to March 31, 2012 ("the Period").
Highlights from the Period:
· Unaudited net asset value of US$238.6 million compared to US$240.6 million for the period ending December 31, 2011
· Unaudited net asset value per share of US$0.67 at the end of the Period compared to US$0.68 per share for the period ending December 31, 2011
· Total investments of US$7.5 million
· Net cash position of US$37.0 million
1. Resources and Commitments
At March 31, 2012, Origo had cash and cash equivalents of US$39.6 million. Payables to debtors and other liabilities equaled US$2.6 million (excluding USD fair value movements and provision for performance incentives) leaving the Group with a net cash position of US$37.0 million.
2. Unaudited Net Asset Value
No revaluation of the Portfolio took place during the Period as per Origo's policy to reassess the value of the Company's assets on a bi-annual basis. However, adjusting to reflect the purchase and sale of investments, currency movements and market values in respect of quoted investments, the Company estimates unaudited net asset value at the end of the Period was US$238.6 million (US$0.67 per share). The equivalent NAV per share translated into British Sterling at the prevailing exchange rate at the end of the Period was 43.7 pence compared to 44.1 pence for the period ending December 31, 2011.
3. Portfolio composition
In line with the Group's strategy, investments are made predominately in privately held companies across various sectors of China's economy, and in companies and assets with exposure to the Chinese market, with the objective of providing shareholders with above market returns, primarily through capital appreciation. Currently, the Group focuses on the following sectors: metals & mining, agriculture and cleantech.
As at March 31, 2012, the Portfolio was carried at the aggregate value (excluding revaluations of unquoted portfolios) of US$267.0 million compared to US$260 million for the period ending December 31, 2011. The top ten investments represented 89 per cent of the fair value of the Portfolio, with the top five investments accounting for 71 per cent.
Table 1: Top 10 Investments (US$ million)
Gobi Coal & Energy Ltd
Metals & Mining
R. M. Williams Agricultural Holdings Pty Ltd
Common Stock & Loan
China Rice Ltd
Preferred Stock & Loan
Celadon Mining Ltd
Metals & Mining
Unipower Battery Ltd
Preferred Stock & Loan
China Cleantech Partners, L.P.**
Limited Partnership Interests
Kincora Copper Ltd
Metals & Mining
Moly World Ltd
Metals & Mining
IRCA Holdings Ltd
Metals & Mining
Common Stock & Loan
Niutech Energy Ltd
* Legal & beneficial interests, excluding impact of outstanding options/warrants and any outstanding convertible instruments
** A private equity fund focusing on China's cleantech sectors, jointly formed and co-managed by the Group and Ecofin Limited
Reflecting the Group's strategy of investing in privately held companies, 92 per cent of the Portfolio (in terms of fair value) at the end of the Period was invested in unquoted portfolio companies.
The Company's direct holdings in listed companies comprised stakes in HaloSource Inc. (LSE: HAL), Kincora Copper Limited (TSXV: KCC), Voyager Resources Ltd (ASX: VOR), SPT Energy Group Inc (HKE: SPT) and Hilong Holding Ltd (HKE:HILONG), Iscool Entertainment, (ALISC:EN Paris).
The Group also have indirect interest in other quoted investments through its investments in two funds managed by the Group - the China Commodities Absolute Return Ltd ("CCF") and the Mongolia Stock Exchange ("MSE") Liquidity Fund.
The weighted average holding period was 2.6 years, with 79 per cent of the Portfolio having been held for less than 3 years; 21 per cent having been held for 3 years or longer.
In terms of sectors, the composition of the Portfolio at the end of Period comprised:
Metals & Mining (57 per cent)
Agriculture (25 per cent)
Cleantech (14 per cent)
Consumer, Technology and Media (4 per cent).
The Group invested a total of US$7.5 million during the Period, comprising US$5.1 million of deployments to existing investee companies and US$2.4 million of investments in new portfolio companies, of which US$2.2 million were invested in the listed equities directly and US$0.2 million through MSE.
Origo Partners Appoints New Non-Executive Director
May 1 -- Origo Partners Plc ("Origo" or "the Company") is pleased to announce the appointment of Lionel de Saint-Exupery as a Non-Executive Director. Mr. de Saint-Exupery brings to the Board a vast amount of experience in both equity and debt capital market transactions, as well as in mergers and acquisitions across a broad range of industries such as financial services, industrial, consumer, media, technology and business services throughout Asia, Europe and North America.
Mr. de Saint-Exupery, 46, is currently President and Chief Executive Officer of CDIB Capital International Corporation ("CDIB Capital"), the overseas investment arm of China Development Financial Holding Corporation. China Development Financial Holding Corporation, headquartered in Taipei, Taiwan, is one of the largest and longest standing merchant banking groups in Asia with over US$12 billion in assets.
Prior to co-founding CDIB Capital in 2006, Mr. de Saint-Exupery was a Senior Vice President in the investment banking division of Lehman Brothers, during which time he advised leading private equity firms across a variety of leveraged buyout, trade sale and IPO transactions. Before joining Lehman Brothers, Mr. de Saint-Exupery was a member of the Global Mergers & Acquisitions practice of Booz-Allen & Hamilton.
Mr. de Saint-Exupery is also Director of Touch Media International and EFMI Limited (an affiliate of Ecofin Limited) and serves on the advisory boards of a number of private equity funds including the Asian Infrastructure Fund, Carlyle Asia Partners, Tenaya Capital, CX Partners and Riverwood Capital.
Mr. de Saint-Exupery holds an MBA with Distinctions from the University of Pennsylvania's Wharton School of Business and a BS in Finance & Entrepreneurship from France's HEC School of Management.
Commenting on today's announcement, Chris Rynning, CEO of Origo said:
"We are delighted to have recruited somebody of Lionel's calibre to the Origo Board. His experience of working in China and private equity across a wide range of public and private transactions in diverse industries will be invaluable to the further development of Origo."
Mr. de Saint-Exupery holds or has held directorships in the five years preceding his appointment at Origo as follows:
CDIB Capital International Corporation
Cube Fund Management Limited
Quandrum Investment Management Limited
Cube Global Multi-Strategy Fund
Cube Global Opportunities Fund
Quandrum Property Fund
Cube Global Allocation Fund
TouchMedia International Holdings
Asia Interactive Media Plc.
Origo Partners Annual Report for Year ended 31st December 2011
May 1, Origo Partners Plc (OPP:LN) --
Highlights of the year:
- Net asset value: rose by 22 per cent to US$240.6 million (2010: US$196.6 million)
- Net asset value per share: rose by 3 per cent to US$0.68 (2010: US$0.66)
- Assets under management grew by 76 per cent to US$358.1 million (2010: US$203.4 million)
- Gains in the fair value of investments and from disposals of investments of US$26.4 million (2010: US$39.9 million)
- Total comprehensive income after tax of US$2.2million (2010: US$36.1 million)
- Total investments of US$83.6 million (2010: US$35.2 million)
- Cash position of US$56.9 million as at 31st December 2011 (2010: US$33.4 million)
- Establishment of China Cleantech Partners Fund in conjunction with Ecofin
- Establishment of Joint Venture with Trafigura provides a new platform for growth in mining
- Appointment of new Non-Executive Director
Khan Investment Management Update (24/04/2012)
April 24 (Khan Investment Management) March was marred by extreme volatility across equity and commodity markets as fears of a significant slowdown in China drove Asian equity markets lower and prompted a selloff in commodity stocks globally. The Hong Kong Hang Seng fell 4% and the Shanghai Stock Exchange Composite Index dropped over 8% whilst the MSE Top 20 Index shed 3.2%.
Ivanhoe Mines Ltd (IVN:US) fell 10.05% (and subsequently lost a further 25% since the beginning of April to a 52 week low of USD 11.76 as of April 18). Winsway Coking Coal Holdings (1733:HK) was the worst performing stock in the portfolio tumbling 27.78%. Several ASX listed positions within the portfolio also fell dramatically: Aspire Mining Ltd (AKM:AU) -19.74%, Xanadu Mines Ltd (XAM:AU) -10.14% and Guildford Coal Ltd (GUF:AU) -9.62%. Haranga Resources Ltd (HAR:AU) was the portfolio's best performer gaining 17.72% for the month.
We reduced exposure to certain positions throughout the month taking profits and stemming losses in light of increasing market volatility, a perceived negative global investment sentiment and concerns of increased costs and interruptions to production at certain operating mines.
The Khan Mongolia Equity Fund performance for March was - 5.50%.
The Net Asset Value as at 31 March 2012 was USD 91.23
The March Factsheet can be downloaded by registered users of the Khan Investment Management website – www.Khan-Management.com
I recently attended and presented at the 8th Annual Asian Mining Congress in Singapore, where Mongolia was a leading prize winner – including the coveted "Mining Country of the Year". The Congress afforded the opportunity for me to meet with a number of Mongolia focused companies who had travelled to Singapore for the vent, as well as to present KMEF to a number of interested investors at the break-out Mining Investor Forum. One-on-one meetings with senior management conducted during the Congress provided timely insights into strategy and development progress, and the portfolio was subsequently realigned to reflect revised expectations and new investment opportunities.
Mongolia continues to grab international headlines.
The Aluminium Corporation of China ("Chalco") recently entered into an agreement to acquire Ivanhoe Mines Ltd's 57.6% equity stake-hold in South Gobi Resources Ltd for USD 898m, and Trafigura Beheer BV (Trafiguar), the world's third largest commodity trader, is the latest high profile addition to the growing list of "Mongolian Bank holders" having acquired 5% of Golomt Bank for USD 15.9m. The Development Bank of Mongolia's maiden bond issue of USD 580m was oversubscribed almost 11 times - priced at 5.75%, the 5 year paper is guaranteed by the Government of Mongolia and received a BB rating from S&P. Mongolian Mining Corp (975:HK) also raised USD 600m in a debt issue that was oversubscribed 9 times. Rio Tinto, majority shareholder of Ivanhoe Mines, has signed an agreement to ensure funding for the construction of the $US6 billion Oyu Tolgoi project. As part of the agreement with Rio, Ivanhoe founder Robert Friedland has resigned from the board and his position as CEO.
Former Mongolian President Enkhbayar was arrested earlier this month on corruption charges. While the news gives investors a taste of the political enthusiasm that can sweep the country near election time, it also demonstrates Mongolia's clear intention to crack down firmly on corruption and investigate allegations earnestly.
We are of the opinion that the fervent nationalistic behaviour surrounding the June elections is driving current market volatility and has erroneously depressed equity prices in the short term. We foresee buying opportunities to increase our exposure to certain positions at attractive entry points over the coming weeks and maintain a strong positive view over the medium and longer term.
Thanks to our growing reputation as the preeminent investment vehicle for diversified and liquid Mongolian exposure we continue to be presented a raft of new investment opportunities and are following closely several IPOs and placement opportunities scheduled for the local and international markets over the coming months.
I look forward to updating you further of our developments next month.
KHAN INVESTMENT MANAGEMENT LIMITED
E-TRANS LOGISTICS SUCCESSFULLY COMPLETES ITS IPO
April 24 (BDSec) E-Trans Logistics JSC (ETR:MO) successfully completed its Initial Public Offering (IPO) on the Mongolian Stock Exchange (MSE), raising its targeted MNT 924 million today. Strong interest from investors for the shares of the company resulted in 7.7 million shares in the IPO being allocated at MNT 120 per share plus 5.4 million shares in oversubscriptions. The offering increased the number of shareholders to more than 300.
BDSec acted as the sole book runner and lead manager for the offering. "It is the first infrastructure company listed on the Mongolian Stock Exchange. The strong demand for the IPO illustrates the confidence of investors in the Mongolian capital market and the outlook for the growth of E-Trans Logistics on its markets." BDSec Deputy Director B.Lkhagvadorj said. "This year we are working on few other mining projects and we believe these projects will be as successful as the E-Trans Logistics IPO" he added.
"The IPO gives us the funding to increase our capacity and to become an internationally standardized terminal" said Ch.Amarsanaa, Chief Executive Officer of E-Trans Logistics JSC.
Extraordinary shareholders' meeting is scheduled to be held on April 30, 2012, and selection of new board members will be determined at the meeting.
Founded in 2007, E-Trans Logistics is a Mongolian southern border town Zamyn-Uud based cargo reloading company. The company offers cargo reloading service between trucks and wide-gauged Mongolian trains with an annual capacity to handle 1 thousand tonnes of cargo.
STOCK EXCHANGE WEEKLY REVIEW
Ulaanbaatar, Mongolia, April 30 /MONTSAME/ Five stock trades were held at Mongolia's Stock Exchange on April 23-27.
In overall, 1.3 million shares were sold of 57 joint-stock companies totaling MNT 412.1 million.
Index TOP-20 was 19897.11 points decreasing 459.58 units or 2.2% against the week earlier.
The total market capitalization was set at MNT one trillion 897.1 billion decreasing MNT 38.1 billion or 2.0%.
Shares of "Khar khorin" /31.8%/, "Darkhan teever" /15%/, and "Ulaanbaatar khivs" /15%/ increased, but shares of "Boonii khudaldaa" /29.9%/, "Bayalag nalaikh" /22.2%/, and "Olloo" /14.5%/ decreased.
21 stocks closed higher, 28 shares declined and eight shares remained unchanged.
Shares of "Khokh gan" /812.6 thousand units/, "Remikon" /301.1 thousand units/ and "Hermes center" /101.9 thousand units/ were the most actively traded in terms of trading volume and in terms of trading value--"Khokh gan" (MNT 146 million), "Remikon" (MNT 53.8 million), and "APU" (48.1 million).
Investors still like Mongolia despite Golomt turning away
April 26 (Euroweek) Mongolian credits are still attracting investors despite the recent hiccup suffered by Golomt Bank, which scrapped its planned debut in the international bond market this week after getting a lukewarm response from investors.
After successful debut issues earlier this year from Mongolian Mining Corp and Development Bank of Mongolia — deals that drew around $11.75bn of demand between them — some bankers think investor demand for Mongolian credits will continue with Golomt and another lender, XacBank.
But some investors think these are not the right names to buy from the country. "The fundamentals of Mongolia are improving, the economy is doing well, but it is probably more prudent to play the quasi-sovereigns and corporate credits than banks," said a fund manager in Singapore. "Banks by nature are leveraged institutions. They depend on a lot of funding from depositors. It's not a great way to play the Mongolian credit story."
Investors too worry that — given the size of the Mongolian economy — the government will not have enough resources to support its banking system in the event of a bank run or similar emergency, said the fund manager.
Mongolia's economic growth accelerated to 17.2% in 2011 from 6.4% in 2010, according to the International Monetary Fund. This year, the IMF forecast the economy to expand 11.8%.
Before calling off its deal, Golomt finished a series of meetings with investors in Asia, the UK and the US last week to drum up interest on the maiden bond issue. But funding officials at the bank were not able to find common ground with investors.
"There could have been a deal, but the terms investors' required were not what the borrower wanted to consider," said a banker close to the deal.
Deutsche Bank, Morgan Stanley and UBS were mandated to manage the proposed deal, rated B+ by Standard & Poor's.
FMG Launches Mongolia Equity Fund: Mongolia emerges from the frontier
April 18 (Financial News) Mongolia, one of the world's fastest-growing mining centres, has become subject of a dedicated investment fund, marking a new step on its journey to joining the first tier of emerging markets.
The fund, launched by emerging market asset manager FMG, has given its largest allocation, unsurprisingly, to mining stocks, which will make up 42% of the fund. Among the largest holdings in FMG's fund is Tavan Tolgoi, a mining firm which is expected to create a brand new town of 60,000 people to service a vast new coal mine in Mongolia.
However, the second-largest allocation will be dedicated to consumer stocks, as FMG looks to ride growing demand from an increasingly wealthy population.
The World Bank expects Mongolia's economy to grow by over 15% this year.
The country's government has taken a series of steps to attract foreign investment in recent years. Last year, it announced that the Mongolian Stock Exchange had engaged the London Stock Exchange to help it modernise.
The plan is for Mongolian exchange to reach the same standards as western exchanges within three years. According to estimates from the London Stock Exchange, the value of Mongolia's stock market will increase dramatically, growing from $3bn today to $45bn over the next 10 years.
In February, Goldman Sachs bought a 4.8% stake in Mongolia's oldest bank, the Trade and Development Bank.
In the same month, BNP Paribas became the first global custodian to support foreign investors moving into Mongolia with fund administration services. It won a custody mandate from Harvest Global Investments, the Chinese fund manager which began investing in the country through its Asian Frontier Equity Fund.
Asia Pacific Investment Partners Exceeds Target Fundraise By 50%
WASHINGTON, April 24, 2012 (PRNewswire) -- Asia Pacific Investment Partners ("APIP"), a Mongolia focused operating group primarily engaged in property development and cement production, has today announced the close of its highly successful private placement offering at a pre-money valuation of US$140m. The Group received demand for 2,136,622 common shares at a price of HK$55 per share for aggregate gross proceeds of HK$117.5m (US$15.1m). This exceeds the target fundraise of US$10m by over 50%.
The additional proceeds will enable APIP to stockpile a greater quantity of clinker - material used in the production of cement - at a time when prices are below their summer peak. It will also allow APIP to increase the pace of its 2012/13 capital expenditure timetable to build a parallel cement crushing line and a clinker kiln at its limestone deposit in the South of Mongolia. Part of the fundraise will be used for construction finance in the Olympic Residence, a 25,000 sqm. luxury residential property currently mid-way through development. This will ensure that the building reaches a level during this operating season, where it can be weather tight and will allow the interior to be worked upon during the winter months. There will also be a small injection of the proceeds into Asia Finance, a high margin lending business currently providing loans to SME's in the mining supply chain.
Investors were predominantly Hong Kong and London-based, including a family office which invested USD 5m and an AIM-listed Asia-focused resource company, which pledged USD 2m.
Lee Cashell, CEO of Asia Pacific Investment Partners, commented:
"This is the first time we have allowed equity investments at the parent company. The levels of commitment we have received from clients, past investors at the subsidiary levels and investment professionals familiar with Mongolia, demonstrates that Asia Pacific Investment Partners is positioned as one of the lead conglomerates in Mongolia.
"The fundraise will reinforce APIP's ability to list on a major exchange in 2013. In relation to this, we have begun talking to listings' authorities and initiated talks with some large investment banks. We are also due to announce the appointment of some key personnel within the next two weeks."
Political shenanigans in Mongolia: Steppe in an ugly direction
A former president is detained ahead of elections, threatening stability
April 28 (The Economist) POLITICS in Mongolia has been rough-and-tumble since 1990, when the country escaped Soviet domination to become a vibrant if imperfect democracy. But when scores of security forces raided the home of a former president, Nambariin Enkhbayar, and detained him over what officials call a serious case of corruption, politics took a new and ugly turn.
The raid has aroused two reactions in the public. One is surprise at the high degree of force deployed in the raid and the low degree of decorum afforded to a former leader taken away barefoot and with a bag over his head. The other is the belief that the case has more to do with rabidly partisan politics than corruption. Most of Mongolia's top officials, Mr Enkhbayar included, are widely thought to have enriched themselves through their power and their oversight of the country's lucrative mining industry. Yet the vaguely described particulars of Mr Enkhbayar's supposed crime—alleged irregularities in the privatisation of a small hotel and a local newspaper—strike many as unconvincing. Luvsandenvev Sumati of Sant Maral, a polling firm, says that if authorities were serious about fighting corruption, they would pursue bigger wrongs. The move against Mr Enkhbayar, he says, was both clumsy and politically motivated.
Mongolia Wary of Chinese Investment
April 30 (WSJ Deal Journal) For adventurous frontier investors in Asia, last year was all about Mongolia. Now Myanmar is the darling of 2012, as it slowly opens up to the outside world.
China, though, never lost its interest in Mongolia. State-owned giant Aluminum Corp. of China Ltd., also known as Chalco, has made large investments in the resource-rich country in recent weeks. But a recent deal in Mongolia has hit a stumbling block, and signs are starting to show that country may be slowly closing its doors to foreign ownership, especially from China.
Chalco is already a big player in Mongolia, taking 80% of production from Tavan Tolgoi, a giant coking-coal project that Mongolia plans to list in a $10 billion initial public offering in London, Hong Kong and Ulan Bator. Seeking to diversify from aluminum, Chalco in April spent more than $300 million for a stake in Winsway Coking Coal Holdings Ltd., a trading firm that dominates the import of Mongolian coal into China. That followed a bid of almost $1 billion for a majority stake in SouthGobi Resources, which is controlled by Canada's Ivanhoe Mines Ltd.
But Chalco's bid for SouthGobi—to which Ivanhoe has agreed—appears to have spooked China-wary Mongolian officials. Mongolia is suspending certain exploration and mining activities by SouthGobi at its flagship Ovoot Tolgoi mine, which produces coal used in steel and power production. SouthGobi says the deal is being reviewed by the Mongolian government on national-security grounds.
The back story is that the Mongolian parliament is looking to put in place limits on how much a foreign state body can hold in a strategic resource, a political move ahead of the country's June elections.
Even as Mongolia is concerned about relying too much on China, its options are limited. Neighboring China is the world's largest user of resources. Meanwhile, landlocked Mongolia faces difficulties in getting its goods to the Pacific Ocean to supply the rest of the world. Russia, to Mongolia's north, has its own raw materials, and exporting Mongolian commodities through vast Siberia to the sea is uneconomical.
Mongolia is aware that this is all a balancing act, as it has benefited from investment by foreigners, and from exporting heavily to the outside world, mainly China. The economy, dominated by the mining sector, is forecast to grow 17.2% this year, according to the International Monetary Fund. China's demand has been key to that success, but Mongolia is now signaling it may not want to give up much more to its powerful neighbor.
First steppes for Mongolian derivatives market
April 25 (Risk.net) Mongolia's derivatives market is in its infancy – but the promise of future returns is luring international banks to Ulan Bator
With nearly a quarter of the population living on less than a $1.25 a day and a history of instability in its financial sector, Mongolia isn't an obvious spot to find an investment bank. But for ING's man in Ulan Bator, Howard Lambert, the opportunity is clear: the bank has been creating bespoke products for clients to gain exposure to Mongolia's currency, the tugrik, and they have been earning fat returns.
"We were the first bank to structure a derivatives product to sell to international investors and give exposure to the currency. One hedge fund made 15% a year net on coupon and another 14% appreciation on the currency, which gives you equity-style returns," he says.
So far Lambert, ING's head of corporate and investment banking for Mongolia, has had a clear run at the Mongolian market – until earlier this year no other international investment bank had a presence on the ground, but this is changing. Earlier this year emerging market specialists Standard Chartered opened an office in Ulan Bator (they declined to be interviewed for this article), and in February, Goldman Sachs bought a 4.8% stake in Ulan Bator-based Trade & Development Bank (TDB).
The underlying reason for this bout of international interest is resources – Mongolia has copper, coal, gold and uranium reserves on a par with international commodities powerhouses Kazakhstan and Australia. Last year the domestic economy expanded by 17% – double that of its southern neighbour China – and this growth is about to get turbocharged by two mining developments.
Oyu Tolgoi, on the border with China, will be one of the largest copper and gold mines in the world when it comes online later this year, while Tavan Tolgoi's 6.4 billion tonnes of deposits make it one of the world's largest coal mines. The latter is expected to increased production from 16 million tonnes in 2012 to 40 million tonnes a year by 2020 with the IMF predicting this single facility will flip Mongolia's current account from deficit to surplus as it does so.
As these large currency flows start moving across borders it means firms will have to start looking at forex risk, and how to manage it. But the country's capital markets and market infrastructure are playing catch-up to a runaway economy. The interbank market is in a nascent form and so derivatives tools to hedge risk are not yet available. "Mongolia only has a spot forex market and almost no interbank market," says Lambert.
There may not be an active domestic bank market but there is no shortage of currency volatility. The tugrik fell 40% against the dollar in 2008 before rebounding and it seesawed again last year, moving from 1,191 on March 31 but sliding to 1,436 by mid-January.
This is partly explained by the country's sizeable trade deficit – much of which is due to the cost of the heavy-duty mining machinery required for mining projects like Tavan Tolgoi and Oyu Tolgoi. But it's also due to the climate: according to Lambert as winter temperatures plummet to –40C, Mongolians hoard dollars to buy imported goods, as the economy effectively goes into hibernation: mines also stop producing and spending reduces dramatically so dollar inflows fall. This seasonal effect assisted in driving the currency to these levels between August and December 2011.
But, according to Tsengel Tumurbat, Ulan Bator-based head of research at Asia Pacific Securities, despite this weather-induced currency volatility, while companies were unhedged when the markets were volatile, they view it as part and parcel of doing business in Mongolia. "As companies can't hedge this risk yet it becomes part of the operating expenses," he says.
In any case Lambert says a lack of experience with derivatives means companies only want to hedge their currency risk when it is falling – and hence very expensive to hedge, if that is even possible.
"Companies would say I need to now hedge my currency when it's losing 5% per day. Nobody wants to offer a hedge and get in the way of that steaming locomotive. The flipside is that when the currency plateaus at 40% depreciation from the start of the year, foreign investors want exposure to the currency and clients onshore don't want to sell the currency," he says.
Even if corporates suddenly took an interest in hedging they would be stymied by issues on the local banking sector – chiefly the absence of an active interbank lending market. There are currently 14 local banks in Mongolia, but they rarely lend to each other, according to Hyung Ju Lee, financial sector specialist, East Asia department at the Asian Development Bank in Manila. The collapse of domestic players, Anod Bank and Zoos Bank, in 2009 is only the latest in a series of financial problems to hit the local banking sector and has left confidence in interbank lending at a low.
"In principle they can do all kinds of transactions but real transactions often don't happen. The problem is huge counterparty risk. In the last two decades Mongolia had several financial crises so commercial banks are very careful in trading with each other," says Lee.
Instead they rely on the central bank for funding via the central bank bills (CBBs) auction. These instruments are short dated and range from one week to six months. The auction is exercised every week but liquidity is shallow and pricing isn't very stable, according to Lee.
This overreliance on the central bank is a barrier to the creation of derivatives like swaps and forwards as banks are unable to offset their risk in the market. A further challenge in creating hedging structures is knowing where the risk-free rate lies in Mongolia for the tugrik.
A Libor equivalent in Mongolia, the Ulan Bator bank offered rate (UBBOR) has emerged but is not yet a tradable rate, according to ING's Lambert. It is based on banks making contributions to come up with an implied Ubbor rate but it is not possible to lend or borrow at that rate.
"Ubbor gives a sense of what is going on – if contributors are nervous about the market then they will mark Ubbor up and if they are confident with the market they will mark it down. As it's not a rate you can trade on it is slightly spurious. This is more a question of interbank liquidity than anything else. If there was interbank activity at Ubbor rates then Ubbor would be a significant component of pricing credit and forward products," says Lambert.
Instead of CBBs, the policy rate and deposit rates are used as pricing indicators and bonds issued last year can be used as single, one-time points on the curve, says Lambert. But this brings its own issues due to the nascent state of the country's capital markets.
"There's no secondary market and no recent issues so for last year's SME project bonds which were issued at 8% by the Ministry of Finance, are they still at 8%? With no secondary trading it is difficult to say."
Clients for a tugrik hedging programme certainly exist. A coal miner getting paid in US dollars or renminbi with fixed costs in tugriks (and therefore affected by its appreciation) or a company that imports diesel and petrol from Russia and has costs in dollars but has revenue in the local currency could both utilise tugrik hedging.
But Lambert says there are issues in offering a forex swap due to the poor credit quality of Mongolian firms, as marking such trades to market in such a volatile market can exceed the size of the credit line. Mongolian Mining Corporation, which had a recent bond issue, was rated B+ by S&P on March 14, 2012, and Golomt Bank, one of Mongolia's largest banks, was rated Ba3 by Moody's on November 9, 2011.
"You can't run a $50 million credit line with some Mongolian companies as the size of the company doesn't justify the credit. But there is an opportunity and we are chipping away at the rock face."
In theory, ING could warehouse the risk but it would mean taking naked exposure on the currency for a period of time. An International Swaps and Derivatives Association Master Agreement with a daily margining collateral agreement doesn't yet exist in Mongolia. Companies need to have standard documents covering transactions that allow for margining on a frequent basis so that they stay within a bank's risk tolerance.
For international investors looking to gain access to the tugrik there are only a few options, according to Lambert. They could deposit money at an onshore bank but settlement is a problem because of difficulties in buying the local currency – and given the spate of insolvencies in the Mongolian banking sector this approach is not without risk. Alternatively investors could purchase a Ministry of Finance local currency bond but these are very illiquid as there is no secondary market and it would necessitate opening accounts on the Mongolian Stock Exchange and with a local broker. Or investors could make a local currency loan, but as it is unsecured it's not practical for all institutional money managers.
ING has been creating bespoke products for clients to gain exposure to the tugrik. He says most clients are European real money and some have been pension funds and hedge funds but he was unable to provide examples or even numbers of institutions engaged in the trade. "They want to benefit from high interest rates on the underlying risk-free rate but also as long-term investors they want high growth and exposure to the currency appreciation story."
ING is offering different structures such as being long currency risk or both credit and currency risk. Much depends on the type of credit the investor wants exposure to – corporates or banks, for example. Tenor and currency for tugrik conversion are also factors that have an impact on pricing.
"We implied a risk-free rate using a proxy – the CBB rate and the deposit rate – and then form a view of where we think the risk-free rate should be," he says. "We then apply a credit rationale to see what a borrower – corporate or bank – should pay as a credit spread over the risk-free rate. The last stage is to build the tenors and yield curve from these reference points and then find a client to take on the risk at the given points."
He adds that the structures are effectively funded forwards and so far they are going out to three years in local currency and the shortest is one year – 12 to 18 months is typical. Clients are predominantly pension funds and hedge funds that want to be long the currency and want to find assets to match their longer-term liabilities.
"With the high interest rates in Mongolia, discounting movement in the currency, if you fund at Libor or Euribor you can make some good returns. Clients are putting in .05% of their portfolio – for them it's not much and in meetings with investors they can say they are developing into Mongolia."
Time to take stock
Unlike most of its Asian peers Mongolia doesn't operate capital controls, and allows international investors free access to its domestic stock market. But, given the country isn't even included on MSCI's Frontier Market Index – despite the presence of countries such as Pakistan and Jordan – its unsurprsing to find the domestic stock market is undeveloped.
But this is changing. One of the most significant initiatives underway in Mongolia on the investment front is an agreement signed in April 2011 between the Mongolian state property company, which owns the Mongolian stock exchange (MSE), and the London Stock Exchange (LSE), to modernise the MSE. This would entail managing the exchange using the LSE's Millennium IT trading platform.
"The idea is to help develop market structure and securities law so moving from pre-funded trading to T+3 which is standard in all modern economies," says a spokesman at the LSE in London.
The scope of potential products will also include derivatives such as equity options and ETFs. "We are also helping to broaden the number of tradable asset classes to ETFs and derivatives. At present there is no futures market. They need to have a stable base of well-traded companies before a futures market can be delivered," says the spokesman.
The impetus for the new stock exchange is to bring confidence to investors, especially foreign investors, and to allow the big new coal, telecom and banking companies to list on an exchange with the latest trading infrastructure.
"Putting in place fully electronic trading and a much stronger backbone to the system, we hope will improve liquidity and trading volume," says the LSE spokesman.
Currently Mongolia's stock exchange trades for just two hours a day with a mix of voice and computer trading. It has more than 300 stocks listed – a by-product of privatising state-owned companies – yet only 30 are actually trading, according to Lee at the Asian Development Bank. It also has other challenges as many of the listed stocks are 90% owned by a handful of private investors making them very illiquid.
"The market lacks liquidity so investors don't buy from the Mongolian stock exchange but they go and buy a portion of the company directly from the owners. Many companies' stocks are concentrated so often 90% of companies are owned by about five individuals and just 10% is floating on exchange," says Asia Pacific Securities' Tumurbat. He adds that regulations are in train stipulating that at least 30% of a company must be free floating on exchange.
But according to some, the most important step is creating transparency from more stringent reporting standards on listed companies, which will in turn lead to better and more accurate valuations of companies and encourage investors to buy shares in Mongolian companies.
"With improved valuations, better transparency and more traders, people holding major stakes could be tempted to sell shares. The new rules should improve transparency and reveal more information about companies," says Dosbergen Musaev, chief economist at Eurasian Securities in Ulan Bator.
When the new stock exchange is launched later this year and as exports increase, large inflows of foreign currency will make their way into Mongolia potentially destabilising the tugrik and Lee believes derivative tools could help to mitigate the risk. "As Mongolia has a flexible exchange rate there is a market need to manage forex risk. If other conditions are in place such as appetite to take counterparty risk, there is also a potential to develop a derivatives market," he says.
Could Mongolia catch Dutch disease?
One commodity-specific risk that is often cited when discussing countries that are heavily reliant on their domestic resources industry is Dutch disease. The phenomenon originates from a 1960s crisis in the Netherlands when vast natural gas deposits were discovered in the North Sea forcing the Dutch guilder to rise making all its other exports too expensive.
Some fear that a similar fate could befall Mongolia if the tugrik dramatically appreciates over the coming years. "90% of Mongolia's exports are commodities but there is a real danger that successful sectors such as cashmere could get hit hard," says Dosbergen Musaev, chief economist at Eurasian Securities.
In 2011, total exports were $4.78 billion, of which mineral products represented $4.26 billion and total cashmere exports were just $180 million.
Others believe this fear is exaggerated as Mongolia has few exports other than commodities. "Mongolia isn't a country where this applies as there are few other exports. Having a neighbour like China where you can import everything needed for a small economy means that dangers of such disease are hugely overblown," says Mandal Jayawant, founder of Mongolia Opportunities Partners, a private equity fund in Ulan Bator.
An appreciation in the tugrik could be an advantage to the Mongolian economy, he adds. "Mongolia can't compete with low cost manufacturing across the border in China. But an appreciating currency makes imports cheaper."
Tom Byrne, sovereign regional credit officer for Asia and the Middle East at Moody's in Singapore, believes Mongolia's mineral wealth could even propel it into a different category of countries. "The Netherlands has other things going for it but for Mongolia this is the only thing it has. It would be like saying Kuwait has Dutch disease."
And like many Middle Eastern countries that have profited from commodities wealth, Mongolia has plans to set up a sovereign wealth fund to protect it against external shocks. A Moody's report says: "The government envisages establishing a sovereign wealth fund when savings in the Fiscal Stability Fund exceed 10% of GDP."
Citi buys carbon credits from Mongolian energy efficiency project
April 26 (EcoSeed.org) Citi will purchase 1.17 million metric tons of carbon credits over the next seven years from Seattle-based carbon markets intermediary MicroEnergy Credits for reduce household emissions in Mongolia.
In Ulaanbaatar, the Mongolian capital, local lender XacBank will finance the locals' purchase of energy- efficient stoves and insulation fixtures so they increase heat retention and lower the rate of fossil fuel consumption and carbon emissions.
Many of Ulaanbaatar's population still live in traditional, tent-like structures called gers. Gers are traditionally under-insulated and heated by inefficient coal-burning stoves.
The greenhouse gas emissions reductions from the installation of more efficient household insulation and heating fixtures will generate carbon credits.
The reduction in emissions will be earned by XacBank clients and assigned to MicroEnergy Credits. MicroEnergy Credits will then quantify, aggregate and sell the credits to Citi, which can then trade and sell the credits under the European Union Emissions Trading Scheme.
The first carbon credits are expected to be available for purchase by Citi in March next year.
Portions of the proceeds from Citi's carbon credit purchase will also be distributed by MicroEnergy Credits back to XacBank, allowing for the continuation of the energy efficiency micro-loans.
Over-the-counter price for Certified Emission Reductions is currently hovering at over 3 euros ($4) per metric ton.
Related: XacBank and Citibank carbon credit project – Lenz Blog, April 29
Nuclear Energy Agency reports its work
April 26 (news.mn) The Nuclear Energy Agency (NEA) of Mongolia informed journalists about its activity and Proxy head of the NEA G.Manlaijav told our correspondent that 16 organizations own uranium exploration and exploitation 101 licenses and two organizations are domestic and remaining is foreign.
He told the NEA has finished the first research of nuclear power plant building in Mongolia and it is a research to build the plant but not decision. He also stated that NEA will soon contract with China National Nuclear Corporation (CNNC) about Gurvanbulag and Mardai deposit mines. Mongolia will own 51 percent of deposit mines in accordance of the law on nuclear energy. Canadians have transferred their licenses of two strategic deposit mines before ratification of the law on nuclear energy.
G.Manlaijav said that NEA has prepared establishment work of Dornod Uranium LLC. But the work would be related to international arbiter court decision. Russians have demanded NEA to pay attention to the issue.
Some MPs to leave MPP
May 1 (news.mn) Four MPs- D.Terbishdagva, Ts.Davaasuren, Ch.Ulaan and O.Chuluunbat, who belongs to MPP has announced yesterday leaving the MPP. They delivered they decision to the U.Enkhtuvshin, head of MPP group in the parliament yesterday afternoon.
D.Terbishdagva, Ts.Davaasuren, Ch.Ulaan and O.Chuluunbat is a four MP's from 9 who demand resignation of Ts.Nyamdorj, Justice and Internal Affiars Minister. But MPP group meeting which held last Friday decided not resign Ts.Nyamdorj.
Supporters of Former Mongolian President Nambaryn Enkhbayer Release Video of his Arrest
ULAANBAATAR, Mongolia, April 25, 2012 --/PRNewswire/ --
The friends and family of former Mongolia president and prime minister Nambaryn Enkhbayar have made available video dramatizing his arrest by members of the state security service and police on 13 April 2012.
Mr Enkhbayar remains in prison, denied legal representation and communication with the outside world. There is a growing campaign of intimidation against his supporters, colleagues and party members.
Mr Enkhbayar as the video makes clear was leader of the MPRP opposition party, and was doing well in the polls, gaining new voters and sitting MPs for the party, and exploring alliances with other political groups.
Parliamentary elections are scheduled to take place at the end of June, and the ability of Mr Enkhbayar's party to fight for its supporters and all citizens has been seriously compromised.
The case and circumstances of Mr Enkhbayar's detention certainly calls into question the commitment of the ruling coalition to democratic principles, and undermines Government expressions of support for human rights and rule of law.
Friends and Family of Nambaryn Enkhabayar.
MPs dodge blame in electronic ID debacle
April 30 (UB Post) The Great Khural passed amendments to the Electoral Law on December 24th 2011. One of the notable changes was introducing a new electronic voting system.
The General Election Committee (GEC) has been assigned responsibility of introducing this new electronic vote-counting system, however, its insufficient preparedness and the inexperience of handling the electronic machines has been under a heavy criticism from the general public, as well as some MPs. Dissatisfied voices on the GEC's action have also increased in major media outlets.
Due to the low reliability of the proposed machines, the GEC's first proposal on the electronic system did not pass during Parliament's discussion in January. The State Great Khural screened the GEC's latest proposal for buying electronic vote-counting machines from the US in the early February. The machines will be brought to Mongolia by late May, just a month before the election.
The Standing Committee on the State Structure held a meeting on April 26th to discuss the election arrangements. The meeting of the Standing Committee on the State Structure was attended by the Chairman of General Registration Agency (GRA) L.Amarsanaa, board members of the General Election Committee, Executive Director of Bodi Electronics Group N.Natsagdorj, stuff of the group who is in charge of electronic ID card project Dugersuren, Minister of Justice and Internal Affairs Ts.Nyamdorj, chairman of the Democratic Party (DP) N.Altankhuyag and other MPs.
The general election committee of Mongolia (GEC) has been the highest organizing body of the elections in Mongolia since 1992. Whether an election goes without incidents or not, depends on how the GEC works.
D.Enkhbat: -The paper ballot system will take a picture of each paper ballot automatically. Also, the device saves the information as a file. That information can be given to any party. Thus we have to follow the principle, trust and supervise. The General Intelligence Agency (GTA) will examine the paper ballot counting devices.
N.Luvsanjav: - We have suggested scanners from South Korea, which count the paper ballots more accurately, but everyone refused immediately. Now the GEC can't give a 100% guarantee that this machine is trustworthy. We could buy devices that recognize fingerprints.
N.Altankhuyag: Is it true that the device you choose can't read the electronic ID cards? Who will bear the responsibility? We have left no time.
N.Luvsanjav: -We were not in charge of printing electronic ID cards. We are not the organization that makes the technical solutions. We bought the device according to the technical information and standard that was provided from the GRA.
Then Minister for Justice and Home Affairs introduced back story of the electronic IDs. The Government approved the design of new electronic ID cards in November 2011 and made an agreement with Bodi International Group to provide the electronic ID card resources.
The electronic card blanks should have arrived in Mongolia between January 18th and February 28th, but company that was making the blanks requested change in the design. The electronic ID card design was modified on February 1st. The last shipment of the blanks should have arrived in June 1st. We have reached today's situation as the company who is providing with blanks failed to deliver the blanks in time.
N.Natsagdorj (Executive Director of Bodi International Company): -The printing machines for the electronic IDs are being brought from the Datacard Company in the US. From the moment we signed the agreement, they were asking what kind of card reading device we were buying.
Then in March 21st, two officials from Datacard arrived in Mongolia to see the card reading devices and met officials from the GRA and GEC. The officials from the USA said that the reading device was too simple and lacked security security.
The leaders of the project along with Dugersuren went to Finland and brought a standard card reader. We told the officials from the US that we were not changing the card reading device and then Datacard renovated the program adjusting it to the card reading device that we bought. The arrangement was delayed because we didn't buy a standard card reader.
The electronic ID cards will start printing on May 7th.
N.Altankhuyag: N.Luvsanjav said that the reading machines had no problems; they were working normally, now N.Natsagdorj is saying another thing. Who is telling the truth? Who should we trust?
N.Luvsanjav: - We bought the card reading machines on the basis of the information that was obtained from the General Registration Agency (GRA). We have asked the GRA about the technical specifications of the cards and told them that we were going to buy this kind of card reading machine. We even sent the GRA the number and design of the machine.
L.Amarsanaa (Head of the GRA): -According to the law, the GEC, the Finance Ministry, and the State Property Committee are in charge of buying automatic devices. MP N.Altankhuyag is saying that I draw my workers from the working groups in order to sway the elections and this is not true.
Ch.Sodnomtseren (Secretary of the GEC): -We saw the card reading device that N.Natsagdorj showed us. We asked GRA that it is right to buy the standard card reader but they answered that they won't change the program.
N.Natsagdorj: -The sample device that we brought from Finland is capable of reading ID cards, and has a high potential. We can change the incorrect devices, but we can't catch up to the election. It is not a standard product; it will be produced especially for our country.
B.Chinbat (Head of the Information Technology Department, GRA): -We gave the GEC technical information along the standard. The device that we are talking about is transportable and saves the information to the memory card. It means it has risk the information might be taken away. Moreover, the device will be used for the purpose of state affairs, thus, it is inappropriate that it is portable
Z.Enkhbold: - 30 billion MNT was spent of the election arrangements. I have a request to investigate the people who bought wrong devices.
D.Enkhbat: -I have the same opinion. We chose only one company and were obliged to carry out this work, we shouldn't face this problem today.
At the end of the meeting, MPs couldn't reach any decision. All the failings laid on the fault of technique and two foreign companies who are printing the ID cards and who are making the paper ballot reading devices.
Sant Maral Politbarometer, April 2012
April 2012 -- The "Sant Maral" foundation presents the results of the March-April 2012 survey. The representative sample of 5020 respondents from the capital Ulan Bator and 21 aymags (sample distributed proportionally to the aymags population) was collected from March 16 to April 14.
Tabulations are band by Ulan Bator, Countryside and Nationwide areas when necessary.
Mongolia News Sources
April 25 (Jon Springer via Seeking Alpha) --
A complete list of my disclosures regarding Mongolia may be found at the Mongolia Weekly Update which also serves as my home page for Mongolia-related topics.
"МОНГОЛЫН УУЛ УУРХАЙН НЭГДСЭН ЛАВЛАХ-2013"
4-р сарын 17 (МОНГОЛЫН УУЛ УУРХАЙН НЭГДСЭН ЛАВЛАХ) Монголын уул уурхайн салбарт үйл ажиллагаа явуулж буй бүх уул уурхайн компани, хөрөнгө оруулагч компани, ханган нийлүүлэлтийн болон уул уурхайн салбарт үйлчилгээ үзүүлэгч аж ахуй нэгж, төрийн болон төрийн бус бүх байгууллагын нэгдсэн мэдээллийг хүргэдэг "МОНГОЛЫН УУЛ УУРХАЙН НЭГДСЭН ЛАВЛАХ-2013" номыг дөрөв дэх жилдээ Монголын Уул Уурхайн салбар үүсч хөгжсөний 90 жилийн ойг тохиолдуулан эрхлэн гаргах гэж байна. Тус ном нь гадаад, дотоодын уул уурхайн компани, Олон улсын хурал үзэсгэлэн болон Монгол Улсад суугаа Элчин сайдын яам, гадаад улсад суугаа Монголын Элчин сайдын яамдаар дамжуулан хөрөнгө оруулагч нарт үнэ төлбөргүй хүргэгддэг онцлогтой.
Монголын уул уурхайн салбарынханд бүтээгдэхүүн, үйлчилгээгээ хамгийн хүртээмжтэй хүргэхийг хүсч буй та бүхнийг "МОНГОЛЫН УУЛ УУРХАЙН НЭГДСЭН ЛАВЛАХ -2013" номтой хамтарч ажиллахыг урьж байна.
Top-150 Enterprises of 2011 Selected
May 1 (Mongolian Economy) The selection of the "Top-150 Enterprises" was held in cooperation with the government of Mongolia and Mongolian National Chamber of Commerce and Industry on April 30, 2012. The event was conducted eleventh times this year. The enterprises that have contributed significantly onto the economic and business development of Mongolia, were selected as top enterprises. The competition used to announce "Top-100 enterprises" until this year. This year was the selection of the "Top-150 enterprises". S. Batbold, Prime Minister of Mongolia said: "It is a good deed that the competition "Top-100" that serves as the main leverage of the Mongolian economy, is now expanded into "Top-150". It is an example of business sector's development of our country connected with the economic growth. Also it shows how the businesses support the businesses. The government of Mongolia will support the business sector in the future, too".
The selection of the sector's best companies was performed due to the following factors. These are total volume of sales, taxes paid for the state, number of the employees, number of the new workplaces, activities done in the field of corporate social responsibility, anti-corruption campaign, initiatives, results, innovation, modern technology, corporate governance, financial transparency.
Feedback of the representatives of the companies, selected as top.
G. Battsengel, CEO of Energy Resource LLC:
We are a young company. Thus, we are taking part in the selection of the Top Enterprises the second time this year. We took last time the fourth place, but now we are on the third place. It is a great success. We have created new workplaces up to 2000 since 2008 until now. We also have paid the taxes for the state. Besides, we have executed the building of the environmentally friendly power station in collaboration with the Mongolian engineers. It is one of the forms how our company fulfills the corporate social responsibility.
D. Sainbayar, Deputy Director of Monnis group:
The year 2011 was a year of great construction to us. Our company focuses now on the industrial sector. We aim to be the leaders in this sector. For this, the corporate social responsibility shall be on high level. We paid taxes in volume of MNT 43 billion for the state budget, and r 500 new workplaces are created. I would like to express my gratitude for the government officers and all other relevant people who promote the private business, and business sector. Companies with the foreign investment stepped the Mongolian market. The Law that confirms the cooperation of the foreign companies with the Mongolia, is approved. If this article could be developed in a right sense, then it will bring huge reforms. Also we should develop our cooperation with each other. Thus, I call upon the cooperation of the Mongolian business sector.
L. Gantumur, Vice President of MCS group:
New possibilities are opened up for the business sector in connection with the rapid economic development in Mongolia. We have received work proposals on the projects and construction work for the implementation nationwide, and cooperated. Last year, the MCS group paid taxes in volume of MNT 200 billion. We work together wi to al people who have appreciated our efforts.
Ts. Anandbazar, President of Sod Mongol group:
We have been taking part in the selection of the Top Enterprises already 11 years. I can remember vividly how we took the place Nr. 87 for the first time. This year we took the 8th place by the cooperation and strives of the team of Sod Mongol group. The motive of our success lies in the objective to implement the corporate social responsibility. Our current economy could be compared with one beautiful Morning. We have to gove our best in this period. Then the economy will diversify and become sound.
The first 15 Top Enterprises out of 150:
1. MCS group
2. Mongolyn Alt LLC (MAK)
3. Energy Resource LLC
4. Mongolian Star Melchers LLC
5. NIC LLC
6. Mobicom group
7. Nomin Holiding LLC
8. Magnai Trade LLC
9. Sod Mongol group
10. APU company
11. Wagner Asia Equipment LLC
12. Just group
13. Monnis International
14. Bodi group
15. GEM International
Full List of Top 150 (in Mongolian)
EPCRC: MONTHLY MACROECONOMIC OVERVIEW March 2012
March 2012 (Economic Policy and Competitiveness Research Center) --
MAIN INDICATORS: GDP, STATE BUDGET, FOREIGN TRADE, EXCHANGE RATE, INFLATION
Economic growth accelerated sharply
The preliminary estimates of GDP amounted MNT 10,830 bln and economic growth reached 17.3% in 2011.
Mongolia, one of the fastest-growing economies in the world while developed countries had faced decreasing GDP growth.
Increase in GDP was mainly due to the growth depending on the mineral sector boom, the copper price increases in global market and expansion in export of coal and iron ore.
VAT revenue of state budget increased by 41%
In the first quarter of 2012, total equilibrated revenue of state budget increased by 15.9% and expenditure increased by 34.5% compared to same period of the previous year, representing deficit of MNT 56 bln.
The expansion of revenue was mainly due to increase in VAT, social insurance premium income and corporation income tax.
The increase in spending supported by 15% increase in wages and salaries 15%, and 13% increase in subsidies and transfers.
Growth rate of imports is weakening
Total turnover of foreign trade reached USD 2.3 bln, showing increases of 28% compared to same period of the previous year.
But increases in exports (19%) and imports (34%) are lower than previous month.
Exports supported by shipments of coal, iron ore and crude oils to China mostly, while copper concentrate exports decreased by 18%.
Increase in exports was mainly due to exports of fuel and cars.
Monthly exchange rate remains flat
MNT exchange rate appreciated against the USD by 0.6% compared to previous month and 3% compared to beginning of the current year. However MNT depreciated by 8.5% against USD compared to same period of the previous year.
Total amount of foreign currency reserves increased by 18% compared to previous month.
Central bank accepted two offers from nine proposals of Commercial banks and bought USD 97.3 mln.
Inflation rates of monthly, ytd and yoy are all increased compared to same period of the previous year.
It was the highest level of inflation that reached 15.3% nationwide in last 2 years.
The increase in average rates of prices was mainly due to 24.5% increase in food, 18.6% increase in restaurants and hotels and 16.6% increase in transport services.
FINANCIAL SECTOR: MONEY SUPPLY, DEPOSITS, LOANS
Money supply reduced compared to previous month
Money supply or M2 increased by 23% compared to same period of the previous year, but declined by 2% compared to previous month.
Share of currency issued in circulation also decreased.
Decline of the money supply was mainly due to decrease of deposits, especially deposits in foreign currency.
Deposits in foreign currency are starting to decrease
Total amount of deposits decreased by 0.5% compared to previous month, although there was increase of 27.5% compared to same period of the previous year.
Deposits in MNT are continuing slowing down and deposits in foreign currency decreased sharply compared to previous month and same period of the previous year by 23.4% and 3,5%, respectively. Changes of deposits in foreign currency increased except for influence of exchange rate, because MNT against USD was stable in previous month.
Amount of loan was stable
Loans outstanding is stable and has no great changes compared to previous month. The situation is continuing that loans outstanding increased and non-performing loans decreasing compared to same period of the previous year.
Ø BoM decided to increase the policy rate to 12.75% in March and 13.25% in April.
Ø Mongolia Economic Forum (MEF) 2012 was held.
Ø Economic Policy and Competitiveness Research Center has launched English version of "Mongolia in World Competitiveness 2011" report during MEF.
Ø The World Bank has decided to declare Mongolia creditworthy for its International Bank for Reconstruction and Development (IBRD) lending
Ø The Development Bank of Mongolia placed 580 million USD in bonds with 5.75% coupon, maturing in 2017.
Ø The Cabinet meeting resolved that the salaries for the civil servant will be raised by MNT 80 thousand calculated from February and by 23% from May. By this increase the average salary rate for the civil servants will be estimated at MNT 630 thousand.
Increases in VAT, social insurance premium income and corporation income tax indicate that the business sector is widening except the deficit in the budget is increasing. There were deficits in foreign trade, that caused by imports which amounted greater than exports by 1.6 times, although total turnover increased.
Deficits of budget and foreign trade are creating depreciation of MNT against USD. We are expecting that appreciation of MNT in last two months is a short-term change that was due to changes in expectations because of placement of bonds from Development Bank of Mongolia and starting of wool and cashmere season. Exchange rate will depreciate near future when deficit in foreign trade is increasing.
Inflation due to a lack of supply and budget expansion reached 15.3% nationwide. Therefore BoM has arranged to tighten the monetary policy by increasing the policy rate to tackle this situation.
Loans outstanding of banking sector stayed stable, while money supply decreased. It caused that deposits are decreasing, especially deposits in foreign currency decreased due to appreciation of MNT against the USD and expectation to appreciate.
Mongolia raises interest rates to curb inflation
ULAN BATOR, April 18 (Xinhua) -- The Mongolian central bank has decided to increase interest rates yet again to contain runaway inflation, local media reported Wednesday.
This was the second time the central bank has raised interest rates in recent months.
The bank has decided to increase the interest rate by half a percentage point to 13.25 percent and the required reserve rate by 1 percentage point to 12 percent.
The national average consumer price index increased notably by 15.3 percent in March year on year and the index for the capital city of Ulan Bator rose by 17.3 percent, according to the National Statistical Office.
The surging inflation was mainly caused by soaring meat prices during the first three months of 2012.
Meat prices, which increased by 51.8 percent, contributed to 68.2 percent of the inflation, the central bank said in a press release.
Increasing demand caused by foreign investments and demand generated by budget expenses may push inflation even higher.
Mongolia's foreign debts amount to 9.6 billion U.S. dollars
ULAN BATOR, April 18 (Xinhua) -- The Mongolian government said Wednesday that the country's foreign debts have reached 9.6 billion U.S. dollars.
However, the government said it believed that total foreign debts were still at a reasonable level and have not threatened the country's economy.
Some parliament members earlier claimed Mongolia's massive foreign debts could threaten the national economic security.
According to a statement released by the Mongolian central bank, among the 9.6 billion-dollar foreign debts, 2.2 billion dollars are government-related and the remaining 7.4 billion dollars belong to private enterprises, commercial banks and other economic sectors.
The Mongolian government borrowed a total of 257.9 billion tugriks (some 198 million U.S. dollars ) last year and by the end of 2011, total government foreign debt amounted to 2,650.9 billion tugriks (some 2.04 billion U.S.dollars).
ADB to provide Mongolia 740 mln USD to help economy and wealth gap
ULAN BATOR, April 17 (Xinhua) -- The Asian Development Bank will provide Mongolia with 740 million U.S. dollars to help its economy and narrow the country's inequality gap over the next five years, officials said Tuesday.
Robert Wihtol, director general of the ADB's East Asia Department, said in a statement that the Mongolian government has agreed on the five-year country partnership strategy.
Under the deal, the ADB will help Mongolia address problems in infrastructure, regional economic integration and access to basic urban services including water supplies, education and health.
In addition, the ADB will also support skills development through higher education improvements and vocational training and help sustain health reforms.
The ADB will also work to narrow major gaps among different populations and between urban and rural areas. An estimated 39 percent of Mongolia's population lived below the poverty line in 2010.
The ADB has been Mongolia's single largest source of official development assistance. Mongolia received loans worth 840 million dollars from the ADB between 1991 and 2011 to fund 47 projects.
Cabinet Agrees for 2nd Phase of JICA Assistance Programme
Ulaanbaatar, Mongolia, April 25 /MONTSAME/ The cabinet meeting on Wednesday backed a draft law on ratifying a credit agreement of the 2nd phase of the "Supporting social sector" programme.
Established between Mongolia's government and the Japan International Cooperation Agency (JICA), the programme's 2nd phase allows Mongolia to receivew JPY one billion and 550 million, or some USD 20 million. The money is to be spent for implementing a programme on stabilizing the macroeconomics, improving results of social welfare to reform a care for low-income people, expanding frames of discounted medicines, financing the health insurance deduction, sponsoring textbooks for pupils, and for preventing children's nutritional deficiency.
In addition, the money will be utilized for complex works such as creating a system of supplying necessary vaccines and medicine in case of a wide shortage, and developing ger areas.
The draft law on the credit agreement will be submitted to parliament.
Mongolia's mining industry has developed rapidly: official
ULAN BATOR, April 20 (Xinhua) -- Mongolia's mining industry has developed rapidly during the past decade, a Ministry of Mineral Resources and Energy official told an international mining event here Friday.
Ch. Tsogtbaatar told the 2012 Mongolia International Mining Exhibition the mining industry accounted for a third of Mongolia's GDP and 85 percent of its exports.
The senior official said, during the past decade, gold production had increased 17-fold, copper and molybdenum ore production had gone up 32 percent and coal production had reached 30 million tons in 2011 from 4.8 million tons in 1995.
More than 90 mining equipment manufacturers and distributors from 15 different countries, including China, Mongolia, Russia and Australia exhibited their products, including mineral crushers, drilling machinery and environmental technology services.
Andy Long, marketing manager of a Beijing-based environmental technology research company, told reporters his company attached great importance to the Mongolian market and was seeking to expand its businesses in the market.
His company is currently pollution-prevention services for the giant Oyu Tolgoi copper-gold deposit, one of the world's biggest copper-gold mines, now under construction.
The mining industry in Mongolia has expanded dramatically since the 1990s to become the most important sector of the country's economy between 2002 and 2008.
It accounted for 33 percent of GDP in 2008, compared with 14 percent in 2002. Currently, the sector alone accounts for more than 70 percent of the country's industrial output.
President promotes closer trade, investment ties with Mongolia
HA NOI, April 25 (VNS) — President Truong Tan Sang yesterday highlighted that Viet Nam was willing to open its doors for Mongolian businesses to invest in the country.
He made this statement while receiving Mongolian ambassador Palam Sundev who was going to conclude his working term in Viet Nam.
He expressed his pleasure about the recent progresses in the two countries' co-operative relations in the fields of trade, education and training, as well as in the regional and international forums.
President Sang also highly valued the ambassador's efforts during his working term which strengthened the two countries' traditional friendship.
Mongolian ambassador Sundev stressed that the two countries' relations have improved with the exchanges of high-ranking delegations and the establishment of the Viet Nam – Mongolia Business Association.
He expressed his hope that the Mongolian President's upcoming official visit would tighten the two countries' relations and also thanked Viet Nam for its assistance in food and ambulances to Mongolia.
Sang welcomed the Mongolian President's visit and hoped the two countries' relevant agencies would make good preparations to ensure its success.
Mongolian PM vows to create more jobs
ULAN BATOR, April 19 (Xinhua) -- Mongolian Prime Minister Sukhbaatar Batbold vowed Thursday to create more jobs particularly through various construction projects.
Mongolia is entering a "Great Construction" age and numerous jobs would be created in the years to come, Batbold said at a jobs fair here.
The government had planned to launch two major projects -- a railway construction project and a housing project -- which will create a large number of jobs, he said.
Some 12,000 jobs would be provided at the spring jobs fair alone, he added.
The government has designated 2012 as the "Year of Supporting Family Development," which puts emphasis on supporting low-income families and increasing employment nationwide.
State officials declare income declarations
April 24 (news.mn) High-ranking government officials have recently declared their 2011 property holdings and incomes. According to declarations, high-ranking state officials at least have annually earned income of MNT12 million. Previous years declarations have showed that high-ranking officials each have a company that has stable profits while current declarations have stated they have owned shares of large companies.
People have suspected high-ranking officials' income increase year by year. For example, the Premier's income has been increased by 20 times and ministers' income by 6 or 7 times in 2008 when the Government has ratified Oyutolgoi contract.
Declarations of 2011 have shown that politics' incomes have been decreased by from three to six times and people think politics were afraid of income increase. Besides, high-ranking officials have more preferred shares than cash.
From the ministers, Justice and Internal Affairs Minister Ts.Nyamdorj, who has had annual income of MNT12.5 million in 2011, has not had shares while other ministers –M.Enkhbold and D.Khayankhyarvaa- own shares of Erdenes Tavantolgoi LLC while the company has not done its IPO.
Declarations have also stated that politics' incomes have been reduced while their family members' incomes have been increased. For instance, Prime Minister S.Batbold has earned MNT51 million while his family has earned MNT151 million in 2011. But declarations of 2010 has shown that S.Batbold has had MNT200 million and his family has had income in three times less than his income.
Also MP D.Arvin has declared that her income was MNT12.8 million and her family income MNT84.4 million in 2010. But she has written about 2011 income that she has earned MNT4 million more than 2010 in last year and her family has had income in four times more than 2010.
MP Kh.Battulga has declared MNT17 million of income in 2011 while his income was MNT405 million in 2010.
Besides, Mineral Resources and Energy Minister D.Zorigt has declared in 2010 that he has earned MNT10 million and his family MNT20 million but the minister's income has been increased by MNT4 million while his family income has been increased by ten times in 2011.
High-ranking state officials have declared their incomes in the fourth year but there is doubt about true writing. Moreover, an organization has not checked the declarations' truth and only media writes about their income digits.
Groundbreaking ceremony held for new airport
April 24 (news.mn) A new airport construction is being commenced in Khusigt valley, where the first airplanes were taken off and landed. Khusigt valley is located in 60 km distance from the capital. The first step of the airport construction is flood dam, electricity transmission lines and communication cable.
Prime Minister S.Batbold, some officials of the Government and Japanese Ambassador to Mongolia Shimuzu Takenory took part at the airport foundation lay ceremony on Monday.
S.Batbold noted that the Government of Mongolia has intensified civil air service development in frame of program between 2008 and 2012. The Government of Mongolia and Japan Bank for International Cooperation have negotiated soft loan agreement of 28.8 billion yen in 2008 for the airport's construction work. He added that the airport facilities will meet international standards and contribute to civil air service stable development.
The Premier also said that railway and auto freight center will be established and a new suburb with 100,000 populations will be built along the airport. Besides, the new airport will provide possibility to stopover foreign flights from Europe and North America. The airport will also contribute to Mongolia's regions economics development, will generate jobs and will open feasibility of foreign investment.
Having 30 structures the new airport that will have two runaways and will meet flight security standards. Airport terminal will serve 1,100 passengers for an hour and it will annually serve a million and 650,000 passengers within 2019. Its annual capacity of goods freight is 11,900 tons and aerodrome monitoring will use 4E system.
Cabinet Submits Draft Laws on Bonds, SME Development, and VAT Increase
April 30 (news.mn) On Friday, Chief of the Cabinet Secretariat Ch.Khurelbaatar submitted to Speaker D.Demberel some draft proposals including bond market and small and medium production development.
The draft of bond market has been aimed to support bond market development and upgrade activity of stock exchange. Bond market has been grown along IPO and stock market estimation was accounted MNT620.7 billion in 2009, MNT1329.9 billion in 2010, MNT3219.2 billion in February, 2011 and MNT2100.7 billion in November, 2011.
Besides, the proposals of legislation regulation are needed for companies that issue shares at domestic and foreign markets and shares registration. Also the draft of bond market has been needed to issue IPO at foreign markets, previously noted some officials.
Ch.Khurelbaatar stated that the proposals have focused some purposes of the Government such as development of processing factories and small and medium sized production that have been mentioned at the Government program from 2008 to 2012 and the main principles of industry policy.
The proposals have had categories of small and medium sized factories in accordance of the international standards. Factories should be divided along sell income and employees number.
Moreover, Ch.Khurelbaatar submitted amendments of the law on VAT because of inflation increase and economic growth. The amendments have been processed by the meeting recommendation of entrepreneurs to set up VAT scale from MNT50 million or USD34,000. Proposed VAT scale would be an average level of VAT in comparison of the world countries.
Some other laws' provisions such as organization income tax and Taxation General Law would be amended along the draft law on VAT.
Ambassador Led Danish Delegation to Mongolia
April 18 (Danish Embassy in China) Five Danish companies, led by Danish Ambassador to China, Friis Arne Petersen, visited Mongolia mid April 2012 to explore new export possibilities. Due to Mongolia's rapid growth the demand for intelligent energy and environment solutions is high.
The Danish companies FLSmidth, Danfoss, Grundfos, Hempel, and Haldor Topsoe met, together with Danish Ambassador and his delegation, Mongolian Minister for Minerals & Energy, Dashdorj Zorigt and Minister for Construction, City Planning, Roads, & Transportation, Dashdorj Tsedev.
They discussed Mongolia's new demand for innovative solutions in the area of energy & environment and which business opportunities it creates. Last year alone, Mongolia experienced a total growth in economy on 17.3% thus making quality solutions affordable for Mongolia.
The Mongolian mining sector is undergoing a rapid development these years and is expected to drive a broader and more comprehensive economic and social development in the future.
Other sectors in the economy contain growing business opportunities for Denmark in the future. Renewable energy, energy efficiency but also agriculture and housing are expected to grow quickly in the coming years.
The Danish Mongolian cooperation
Even though a Danish export adventure to Mongolia is at its first stage the two countries have a close bilateral cooperation. Since the collapse of the Soviet Union, Denmark has supported the development of a modern democracy in Mongolia significantly.
Denmark still supports NGOs in Mongolia in their endeavours to fight poverty. The Ambassador and Minister Counsellor, Søren Jacobsen visited one of the projects where a NGO provides microloans to Mongolians that wish to start small businesses.
Lithuanian businesses eye Mongolian market
April 22 (New Europe) A significant Lithuanian business delegation led by Deputy Foreign Minister Asta Skaisgiryte Liauskiene was recently in Mongolia to discuss various ways of improving the scopes of bilateral business exchanges. Officially, the visit was aimed at strengthening Lithuanian-Mongolian economic cooperation with focus on promoting export of Lithuanian goods and services to Mongolia.
The delegation comprised of representatives of nine Lithuanian business companies in consulting, banking, higher education, environmental protection and catering. The representatives attended a business forum in Ulan Bator held by Mongolian Chamber of Commerce. They met with potential partners in Mongolia and visited some local companies. The Lithuanians also discussed with Mongolia's officials opportunities of cooperating in bilateral trade, transport connections between the countries, as also on ways of exchanging Lithuanian higher education opportunities.
MONGOLIA-AUSTRIA BUSINESS FORUM APPROACHING
Ulaanbaatar, Mongolia, April 30 /MONTSAME/ The Mongolia-Austria business forum will run on May 18 in Mongolia's National Chamber of Commerce and Industry (MNCCI) in Ulaanbaatar.
The forum aims to expand the economic and business cooperation between the two countries. Some 20 Austrian business delegates will arrive led by Austria's Ambassador to China.
The Austrian side says that it want to cooperate with Mongolia in health, medicine, engineering, construction, mining, infrastructure, finance, consulting and mining equipment spheres.
Mongolia opens consulate in Scotland
April 27 (Herald Scotland) THE sprawling central Asian state of Mongolia is stepping up its drive to entice Scottish companies to invest in its rapid economic expansion by opening a consulate in Edinburgh today.
The Mongolian ambassador Bulgaa Altangerel will unveil the flag at the Melville Street property in the centre of the capital's diplomatic quarter.
David Scott, honorary consul for Mongolia, said it would provide a base to meet people and hold functions.
The country recorded economic growth of 17.3% in 2011, up from 6.4% in 2010 on the back of demand for commodities.
Economic activity in Mongolia has long been based on herding and agriculture, but it has seen a mining boom in recent years as demand for products such as copper has increased.
Mr Scott led a trade delegation to Mongolia earlier this year. He is preparing for another trip in September. Some 12 delegates are expected to attend from sectors including the salmon industry, whisky, and renewable energy.
Glasgow University recently signed a memorandum of understanding with the National University of Mongolia which could pave the way for Mongolian students to come to Glasgow.
Mongolia has vast mineral resources yet to be fully exploited and a ready market in neighbouring China. The International Monetary Fund expects growth to average 14% a year until 2016.
Georgia to share experience in combating corruption with Mongolia
Georgia, Tbilisi, April 27 / Trend, N.Kirtskhalia /
The first round of political consultations between the foreign ministries of Georgia and Mongolia will be held in Ulan Bator on Friday, April 27, Georgian Deputy Foreign Minister Nino Kalandadze told journalists.
"The consultations will focus on familiarization with Georgia's experience on successful fight against corruption," she said.
Kalandadze stressed that the Mongolian side added this issue to the agenda on their own initiative.
Political Interference in Media Reporting in Mongolia
April 19 (IFJ Press Release) The International Federation of Journalists (IFJ) and its affiliate the Confederation of Mongolian Journalists (CMJ) are deeply concerned by reports that B. Jargalsaikhan, leader of Mongolia's Republican Party, interfered with the reporting of the daily newspaper Mongoliin Medee on April 12, 2012.
It is alleged that after having completed an interview with Mongoliin Medee's B. Davaa, intended for publication the following day, Jargalsaikhan and his supporters took steps to ensure the interview would not be published. The change of heart was apparently connected to the arrest of former Mongolian President N.Enkhbayar by the Independent Authority Against Corruption (IAAC) that same day.
Reports indicate that on the night of April 12, people acting under direction from Jargalsaikhan called Davaa by telephone to pressure him to pull the interview from publication. Others entered the premises of Mongoliin Medee to ascertain whether the next day's edition had been published, and then prevented those wishing to collect the paper from entering. Copies of the newspaper which had already been distributed were bought, or seized, from a number of locations.
Article 39 of the Criminal Code of Mongolia states that the "prevention of a journalist's professional activities that are consistent with law with the view of dissemination or preventing dissemination of any information which affects the culprit's or others' interests shall be punishable."
"Efforts to repress reporting on matters of public importance in Mongolia are an attack on press freedom and promote a climate of fear," IFJ Asia-Pacific Director Jacqueline Park said.
"Any attempt by political figures or parties to interfere in the independence of the media, and unduly influence their reporting, is unacceptable."
The IFJ urges Mongolia's police to investigate these allegations of political interference to help ensure that press freedom is protected.
UNESCAP reaches out to SoftBank, POSCO for infrastructure in Mongolia
SONGDO, Incheon, April 23 (The Korea Herald) ― Two years have passed since the United Nations Economic and Social Commission for Asia and the Pacific, Northeast Asia subregional office was established in Songdo.
After making connections and contacts with regional think tanks, academics and the private sector, the real challenge is still ahead for Dr. Kilaparti Ramakrishna, the head of the UNESCAP for East and Northeast Asia, which aims to promote unity and growth through economic and social programs.
As he starts his second term from next month, his priority is to boost the "feeling of community sentiment" in Northeast Asia, said Ramakrishna, or "Rama," as he prefers to be called.
Although there are only six members, one of the smallest in the U.N. subregions, they account for one-quarter of global GDP and trade whose influence on the world, Rama said, is "truly extraordinary." UNESCAP for East and Northeast Asia members are China, Japan, Mongolia, South and North Korea, and Russia.
As a start, the U.N. agency seeks to help Mongolia increase its trade with other Asian countries, and support its development of infrastructure to make the country become a bigger part of Asia by coordinating closely with the private sector, including Japan's SoftBank, South Korea's POSCO and the Korea Business Council for Sustainable Development.
It is looking to help build a wind power plant in Mongolia, with energy generation equivalent to about 200 nuclear power plants, and water facilitation projects.
Mongolia is the least developed among the agency's members, besides North Korea, but it considers the mining-focused country "the new Middle East."
"If part of that dream is realized, Mongolia is going to be connected (to the world)," Rama said.
He emphasized that the only way to develop such massive-scale projects is through partnerships with the private sector as the U.N. cannot do everything on its own.
South Korea, which has human resources and global construction players, is in a favorable position to help countries like Mongolia with its own development model.
However, he said that the UNESCAP is ready to "multiply the magnitude of efforts" it can do for Mongolia as the agency can do for North Korea.
Coal Seen Rebounding as China Sets Steel Output Record
April 25 (Bloomberg) Coking coal prices are set to rebound as early as July from four straight quarterly declines as China and India seek raw material overseas to fire new steel production in the world's fastest-growing major economies.
Contract prices that fell to $206 a metric ton for the quarter ending June 30 may rebound to average $225 a ton this financial year, based on the mean estimate of 10 analysts, steelmakers and mining companies surveyed by Bloomberg. Contracts of coking coal, a key ingredient used to make steel, peaked at $330 in the June quarter last year.
China, the largest steel producer, is leading demand growth forecast at almost 10 percent this year. It started about 10 new blast furnaces in the past six months, lifting output to a record in March, according to market researcher Custeel.com. India, the third-biggest steelmaker, is set to boost capacity a third to more than 100 million tons by March in a five-year $1 trillion plan to build roads, bridges and railway networks.
"Rising Indian imports will have a positive impact on coking coal," said Natalie Robertson, an analyst at ANZ Banking Group Ltd. in Melbourne. "The near-term prices will more closely track development in China."
China may surpass Japan as the biggest coking coal importer by 2015, a position it may eventually relinquish to India, Robertson said.
Mongolia, which became China's biggest supplier of coking coal in July, will probably continue to grow this year, Battsengel Gotov, chief executive officer at Mongolian Mining Corp. (975), said in a March 7 interview.
"For Europe, China, Japan and South Korea, the main tailwind for metallurgical coal is there's room for restocking across the world," Bloomberg Industries analyst Andrew Cosgrove said. "China remains the wild card because Mongolia is stealing seaborne volumes by exporting more land-borne tonnages."
Mongolia: mine ownership gets political
April 26 (business news Europe) A nasty bout of resource nationalism in Central Asia is worrying investors brave enough to invest in frontier markets. Mongolia and Kyrgyzstan are at it, with the Kyrgyz government this week announcing it has revoked 46 gold mining licences in what it calls an attempt to clean up the mining industry.
At least none of the Kyrgyz licences are for the country's major mining operations. The situation is different in Mongolia, which on April 16 suddenly suspended the mining licenses of SouthGobi Resources.
SouthGobi's majority owner Ivanhoe Mines had agreed to sell a 57.6 per cent stake in the company to state-run Aluminum Corporation of China (Chalco). In response, the government is now busy rushing through parliament legislation that puts limits on foreign investment into enterprises with "strategic significance".
According to comments attributed to Minister of Foreign Affairs G Zandanshatar on the parliament website, he told MPs that the law could be passed "within two weeks". Zandanshatar said it is only a "coincidence" that the government is rushing through this law following the revoking of SouthGobi's licenses and ahead of the June parliamentary elections.
Nevertheless, Chinese influence is a touchy subject for many Mongolian people, and bashing foreign investors, especially Chinese ones, goes down well with voters. "This contract should be terminated immediately," Jargalsaikhan Dambadarjaa, an economist and popular local talk show host said on his programme, speaking for many. "If someone doesn't disrupt the SouthGobi deal, it will become Chinese property."
SouthGobi Resources is one of the country's largest exporters, shipping one in every five tonnes of Mongolian coking coal to China. The company is majority owned by Ivanhoe Mines, but Chalco earlier in April agreed with Ivanhoe to buy the majority stake for $926 million, a hefty 28 per cent premium to the market. The announcement appeared to take the government by surprise and two weeks later it suddenly announced it would suspend SouthGobi's licenses, including that for the flagship Ovoot Tolgoi coal mine, as they had not authorised the deal.
The problem is that SouthGobi is listed in Canada and has no major Mongolian shareholders (as well as Ivanhoe Mines, the Chinese sovereign wealth fund China Investment Corporation owns 13.8 per cent). Foreign investors are worried that if Mongolia finds a way to intervene in this case, it may do so in other deals in the future. Currently, there is no known legal reason for Mongolia to prohibit this deal or suspend the license, something the parliament's website acknowledges in its report on the draft legislation. MP Bat Batjargal told reporters: "It has become an urgent issue to create legal regulation on this matter."
Populist talk about clawing back a greater share of country's resources is not new for Mongolia. Last year, a letter was sent by MPs to Ivanhoe Mines demanding a higher stake in Oyu Tolgoi, the country's flagship copper-gold mine. That issue was promptly resolved when the government, Ivanhoe Mines and its project partner Rio Tinto released a joint statement honouring the original agreement. This time round, however, political reputations are on the line, so analysts worry that a deal might not be so quick in coming.
"Threatening to revoke licenses and create new laws is a dangerous game to play with the hand that feeds you, but when the economic sovereignty of Mongolia is at stake there may be changes made," Monet Capital Investment Bank in Ulaanbaatar said in a note April 25. "We expect Chalco's deals to go ahead, and Mongolia to swiftly create a legal environment that gives them a say in future deals of this kind. The fighting in between will most likely create some good buying opportunities for an investor outside the bubble of fear."
For their part, both Ivanhoe and Chalco issued a statement expressing "their commitment to cooperate with and assist the [Mineral Resources Authority of Mongolia] and the government of Mongolia in any future processes that they may have."
Mongolia's "ninja" miners help sate China lust for gold
Bornuur, April 19 (Reuters) - In a hot, concrete hut filled with acetylene fumes, an elderly Mongolian miner struggles to contain her excitement as she plucks a sizzling inch-long nugget of gold from a grubby cooling pot and raises it to the light.
Khorloo, 65, and her sons spent the day scrutinizing half a dozen CCTV screens as workers at the Bornuur gold processing plant whittled 1.2 metric metric tonnes of ore down to 123 grams of pure gold that could earn the family as much as $6,000.
Near the plant, separated from Mongolia's capital, Ulan Bator, by 100 km of rocky pasture and mostly unpaved road, life has remained largely unchanged since Genghis Khan's "golden horde" rampaged across Asia nine centuries ago.
But Khorloo is a member of a new horde of at least 60,000 herders, farmers and urban unemployed trying to extract the riches buried in the vast steppe with metal detectors, shovels and home-made smelters.
In the last five years, dwindling legal gold supplies and a spike in black market demand from China have made work much more lucrative for Mongolia's "ninja miners" - so named because of the large green pans carried on their backs that look like turtle shells. For thousands of dirt-poor herders, the soaring prices alone are enough to justify years of harassment, abuse and hard labor.
"It took us a week to dig this out," Khorloo said, holding the nugget. "But we dug for three years to reach the vein."
China's annual gold output reached a record 361 metric tonnes last year, but demand continues to outstrip supply. While Beijing doesn't publish full import figures, deliveries from Hong Kong hit 428 metric tonnes in 2011, three times more than a year earlier.
Spot international gold prices hit a record high of $1,920.30 an ounce in September as investors bought the metal as a safe haven amid uncertainties surrounding the euro zone and its debt. The price has fallen back to around $1,636 but gold remains at historically high levels after a decade-long rally.
China has certainly driven the gold rush in Mongolia - from the giant $6 billion Oyu Tolgoi copper-gold project currently being developed by Ivanhoe Mines and Rio Tinto to the makeshift holes that honeycomb the hills and valleys of Bornuur.
While the government in Ulan Bator hopes to use growing mineral output to drag its largely pastoral economy into the 21st century, many lawmakers are wary about turning Mongolia into "Minegolia" - a choking, resource-dependent blackspot tearing itself apart to deliver raw materials to China.
However, policies aimed at cutting output to more sustainable levels have played into the hands of the ninjas and a shadowy network of black market traders.
CHINA AND THE "CHANGERS"
Two decades of ninja activity have already nurtured scores of middlemen linking the underpopulated steppe with the Chinese market. And it hasn't been difficult to encourage Mongolia's struggling crop farmers and once-nomadic herders to supply them.
One English word appears regularly in the ninjas' guttural Mongolian: the "changers" are a motley group of smugglers who trade black market gold, much of which ends up in China.
"The changers smuggle it to China - the miners do all the work, but those who buy the gold make the money," said Urantsetseg, one of the many female miners in Zaamar, a gold-producing district south of Ulan Bator.
While all producers are legally obliged to sell their gold to the central bank, the black market is often a better option. Changers can offer prices above the official rate, and they can also avoid the 10 percent tax on sales.
Workers at Bornuur admitted that some of the gold it processes is not sold through official channels.
"They are requested to sell everything to the bank but they are not really ordered to do so," said Erdenechimeg Belhkuu, an accountant at Bornuur.
"Some of the supply that goes through our plant is bought officially, but some goes on to the black market, which sometimes just offers higher prices."
Mongolia's overall trading volume with China has soared in recent years, primarily in bulk shipments like coal and copper. Mining company officials in Ulan Bator said it was easy - and virtually untraceable - to smuggle a few ounces of gold in one of the thousands of coal trucks heading south.
"For buyers, gold is gold," said Patience Singo of the Sustainable Artisanal Mining Project run by the Swiss Agency for Development and Cooperation (SDC), which is trying to help the ninjas clean up their production methods and get organized.
"DRIVING MINING UNDERGROUND"
Since Mongolia abandoned Soviet-style economic planning in 1990, gold miners large and small have scoured the countryside in search of profit, damaging water supplies with untreated mercury and leaving dunes of toxic tailings in their wake.
Parliament eventually sought to address Mongolia's laissez-faire mineral laws, enacting new rules in 2009 that banned mining near rivers and forests and revoking or suspending hundreds of licenses. Official gold output dwindled from a record 21.9 metric tonnes in 2005 to just over six tonnes in 2010.
But the reduction in official supplies has driven up prices, providing incentives for the ninjas to dig away despite growing restrictions on land use. Data is hard to come by, but ninjas continue to supply at least seven tonnes a year, according to NGOs.
"The policies have - pardon the pun - driven mining underground," said an executive at a foreign mining firm with interests in Mongolia.
"You can ban mining and try to protect the environment, but the ninjas don't listen. I think the only way you can deal with them is by decriminalizing and organizing them, but whether this government is capable of that is another matter."
Mining firms and ninjas forged an uneasy but often symbiotic relationship. The companies had to defend themselves against raids from ninja crews, sometimes using brute force, but they would also track ninja activity for new discoveries.
Ninjas for their part would gather in their thousands around established mining sites like Zaamar, home at its peak to more than 40 large-scale mining companies.
"In 2007, about 10,000 ninjas came to Zaamar and their situation was like hell, but the government launched a campaign to chase them back to their own areas. Now we have fewer people, but still they come," said Bolormaa Dorj, Zaamar's governor.
Since the crackdown on large-scale mining, Mongolia's ninjas are now returning to old and abandoned properties and have even started ransacking tailings dams for gold.
Tsetsgee Munkhbayar, an environmental activist who has fired arrows at Mongolia's parliamentary buildings and attacked mining concessions in protest at the government's mining policies, said scores of abandoned mines had allowed the ninjas to thrive.
"The ninjas emerged in empty holes excavated by mining companies that ran away without rehabilitating the land - if we can't deal with the mining companies, we can't deal with the ninjas," he said.
POWER IN A UNION
Singo, a Zimbabwean gold mining engineer, has been trying to get ninjas organized.
The small gold processing centre at Bornuur is a far cry from the giant industrial gold producers ploughing through Mongolia's plateau and pasture. Three years of tailings fill thousands of vegetable sacks stacked up on the edges of the site, and they still don't know what to do with them.
But the plant represents progress. It was set up by five miners with the help of Singo and the SDC and brings a degree of efficiency and mechanization to the local mining community.
Large stone wheels grind down chunks of rock dug from nearby hills. A decade ago, cyanide might have been used to dissolve the ore and mercury would have been added to amalgamate the gold, but the plant uses only water and gravity, allowing the shiny flecks to roll down a chute before being refined further.
It was designed to provide a safer channel for the ninjas to sell their gold, but business has slowed in recent years, with many choosing to take their chances with the changers rather than the central bank.
"The ninjas won't stop, but they might stop coming here," said Singo.
While there is little sign that ninja activities are slowing, formal activities are. The Bornuur plant's accountant, Erdenechimeg, said it was struggling to compete with black market prices, and new restrictions on land use were also limiting the number of new miners coming in.
Singo and the SDC have also helped organize a group of 50 former ninjas in the district of Zamaar, south of Ulan Bator.
Instead of raiding licensed properties, the miners have signed an agreement with a local mining firm, the Mondulaan Trade Company, to mine marginal deposits that big firms cannot handle. It also allows them to sell directly to the central bank and mine without being molested by police and security guards.
The government has already accepted that small-scale mining is here to stay and passed regulations in 2010 allowing "organized" miners to extract gold on land that has not been restricted or licensed to other miners.
It is a small step. A few miles away from the project, scores of ninjas pop up like moles from the trenches and holes that perforate the valleys. Miners flee into the hills on motorcycles, fearing the approach of police or thieves.
Deeper into the valley, a dozen ninjas sprawl on the hillside as their comrades feed clumps of earth into a homemade dry washer. A day's mining has produced half a palmful of shiny dust that could earn them as much as 300,000 tugrik ($280).
Boldbaatar, a veteran miner in faded army fatigues, said they could earn much more if they didn't have to spend so much time hiding or running away.
"We have already been chased off this site today," he said. "They don't really chase us out of duty. They are trying to steal our gold."
It has proved nearly impossible to eliminate the ninjas, and experts like Singo say it would make more sense for the government to "formalize" them and bring their supplies back on to the official market.
For the ninjas themselves, official recognition would at least earn them respect.
"Ninja isn't a good name," said Boldbaatar. "And the ninja turtles have an advantage over us. At least they can fly."
Pictures: Mongolia's gold rush
April 19 (Reuters) Dwindling legal gold supplies and a spike in black market demand from China have made work lucrative for Mongolia's "ninja miners," who extract the riches of the country's vast steppe with metal detectors and home-made smelters.
Long drought threatens Mongolia's main river
ULAN BATOR, April 24 (Xinhua) -- Mongolia's main river is in danger of drying up due to a continuous drought, prompting the government to call for water-saving measures.
Minister of Nature, Environment and Tourism Damdin Tsogtbaatar made the appeal on Tuesday after visiting the Tula River, which has seen some sections of its riverbed exposed.
Tula is the most important domestic water source for residents in the country's capital. Its drying up not only affects Ulan Bator's environment but also threatens the water supply for more than 100 million residents, nearly half the country's population.
The long-lasting drought and increasing desertification and reduced vegetation along the river were believed to be the main causes.
Pictures: Lingering drought dries up river in Mongolia – Xinhua, April 24
Widespread snowfall alleviates steppe drought in Mongolia – Xinhua, April 23
High level of uranium found in Mongolian capital's groundwater: report
ULAN BATOR, April 24 (Xinhua) -- A high level of uranium has been detected in the groundwater in the Mongolian capital, local media reported.
The finding was made in a deep-well water research program conducted by a group of U.S. and Mongolian researchers in Ulan Bator last July in order to determine the arsenic content, according to the reports released Monday.
The joint team of University of Michigan - Ann Arbor and National University for Medical Science of Mongolia extracted water samples from 129 deep wells in the city's seven districts and sent the samples to the United States for analysis.
The results, according to the report, showed that the average uranium content is 4.6 milligram per liter, which is significantly above the safe level recommended by the World Health Organization (WHO).
The researchers have yet to determine the causes.
Uranium is a radioactive and poisonous chemical element which can produce negative impacts on the human genetic system. Drinking water with uranium can also damage such organs as liver and kidney and might eventually lead to cancer.
NO MORE PERMIT FOR THE NATURALLY RESERVED BOGD KHAN MOUNTAIN UNTIL 2013, ANNOUNCES D.TSOGTBAATAR
April 25 (UB Post) Interview with the Minister of Nature, Environment Tourism D.Tsogtbaatar.
-Environmental laws are currently being debated by parliament but there have been hindrances. Will this stop the debate process?
-There were ten project suggestions, but eight of them are ready and are being discussed. In due course. The remaining two projects will also be discussed.
Although there are hindrances in the parliament at present, we are patient with them, since there are also the issues such as the Election Laws on the table. Even though there are more important and pressing matters they are still resolving our issues and we are grateful. We have worked on the law projects extremely hard during the break of the Spring Assembly of the parliament. We have received much support from the former, Minister L.Gansukh, which is why our laws were discussed first on the Spring Assembly. I think it is right to discuss the environmental issues, because even though elections determine the faith of the nation it is always resolved in time. Yet the environmental issues don't get resolved to the point that environmental issues are a consistent thing.
We can't leave the environmental issues; we have to deal with them just like other matters. I hope that if the parliament is stuck on other issues that they would move on to solve the environmental issues.
-If the projects are approved, what kind of changes will we see on the pressing problems of the environment?
-For example, places like "Tsagaan khad" will not be established so easily, because by approving our projects, the environment and nature will have a predetermined value. Which means many permits will be needed to operate on the environment or nature. In other words, we will not sit and watch while the environment is destroyed.
-What does that mean?
-A mining company would have to build tracks before they start digging. This way they will cause the least amount of damage. They will have to do the works that come ahead, before they are given further permits. In other words, evaluations will be made from different angles.
Today's environmental laws are that of the previous century. Only by reforming them we are stepping into the present conditions. But these laws will not yield results tomorrow. We have to change with time.
-You mentioned a place called "Thagaan khad". What is happening there?
-I am coming from a healthy but hard viewpoint when it comes to this place. I want to close this place. Some might not like this, but the operation of Tsagaan khad is not consistent to any civilized human laws. There are other better ways to operate. I cannot accept that they are deliberately choosing the wrong way to operate. This is why I want to close this place. J.F.Kenedy once said that in any society when there is a support of 70% there is always a protest of 30%, 100% support only existed in a communist society.
When we came back from working with them, we requested our ministry to charge damages. The results of the research showed that no tender took place that was in accordance with the policies, and this is the reason for its depraved state. They couldn't work well up until now, so there is no reason to hope that things will get better.
In the end they have only made a fake station. Of course we will not close them down in a day, we will do everything by the law and policy.
-When you close this place down how will the customs house work?
-As for the customs house, if the decree to close is made, they will close it. If we close it down, the customs will not have to inspect Tsagaan khad. They confirmed that they can work with the new laws. If we improve the outlet for the Gashuun sukhait border point, there will be no need for Tsagaan khad.
-Aren't there many people living and working at Tsagaan khad?
-I don't blame anyone living and working at Tsagaan khad. The administrators made them the way they are. The state has to consider the interests of all the sides and make policies for gradual improvements but the final decision will be to close it down. After all we don't have unlimited time. Since the state participated in its present conditions, they cannot dump everything on them.
-In your opinion, when will it be closed down?
-Specialists are examining this. It depends on how much has been dumped at Tsagaan khad and how long it will take to develop Gashuun sukhai. It's all a matter of technicality.
-I heard that though the lead is heavy on the Gashuun sukhait, there is another reason to load at the Tsagaan khad?
-The Chinese have a law for the car load, to protect their environment. To match this standard, we do another load in Mongolia. This is an example of Chinese laws being implemented in Mongolia and we hurt our environment by doing this.
-I want to ask about the Khargia clean establishment. There was a decision to move this, but the work is on hold?
-It will be moved. The residents live in a harmful condition. Permits for houses were not supposed to be given in that area, but since they are already given, this is another issue. Right now we have to focus on moving them.
The reason for the holdup is that though the permits are not given, they were told that a number of administrative officials will be located there. But the place is near Biokombinat, and obviously there are residents. The place is an official landfill site. Were there to be residents, there would need to be a permit stating that there are no harmful effects for residents. Nobody considered this and that is where the issue stays.
-What does it mean that there are no harmful effects for residents?
-The new material we use becomes as solid and hard as cement when dampened. So when we cover the area with this material there is no way for litter to escape. It will be like concrete.
-We also have to talk about the timing. This has been discussed for so long but has never been implemented?
-The planning and preparation has to be done thoroughly before moving. Since the toxic waste of Khargia is still being dumped in Tuul for 20 years let's wait two more days to solve the issue the right way.
-We have talked about the closure of Tsagaan khad and the relocation of Khargia, but your time in office is coming to an end. State successors never seem to finish their predecessors' plans. Do you think your successor will finish the projects you have started?
-Mongolian state policy must be passed down from predecessor to successor. That's the way it is. We always criticise our politics but unless there is a dispute of public interests successors have always carried through the plans of their predecessors. It doesn't matter whether I stay in office for a long or short period of time but it matters whether or not I start the right path for my successors to follow. Four years is not enough to get many things done.
-Recently there have been talks of permits of the naturally reserved Bogd Khan Mountain. Will permits be given to anybody who wishes to buy it?
-I have made the decision not to give any more permit distributed from the naturally reserved Bogd Khan Mountain until 2013. I am not trying to avoid the issue; I want to formulate the issue carefully before a decision is made. Only after this can we talk about the issues that follow, but many say things like "Is there any land left from the Bogd Khan Mountains?" or "What difference does it make, to give permits?"
There is an estimate that almost 20% of the land will probably be used for tourism or travel purposes. At the moment 15% is for buildings and establishments. In other words, there is plenty of land left, but do we want to continue with this uncertain and disorderly manner.
Since I have made the decision not to give permits I want to talk about what this means. This means that I don't want anyone to live there. Already there are people living in the Bogd Khan Mountain area, but why aren't other people denied when they want to live there. This is a logical solution.
The Underage Detention Centre and Khaldvart hospital has always been at the Bogd Khan area. They are considered unharmful to the environment, and common citizens are denied residence. This is not logical.
Moreover, there is also the issue of contracting a tourist and vacation spot by building a big hotel. Say for example, that a tourist pays for 365 days of a hotel fee for vacation. Obviously the tourist wants to be close to the surrounding nature and environment. In this case should we allow this person to reside at the Bogd Khan Mountain because he is a tourist? If we examine closely the average tourist interacts much more with nature and environment than local citizens.
-How do we sort this issue?
-I can't find a healthy solution to the above example. There is this automatic protest or criticism from society. But if they think about it logically there is no solution. I just want to tell the truth. I am not dictating what's right or wrong. When there are issues like this, we can't just say it will work or not.
-Since permits for naturally reserved land have already been given can't you change the perimeters and reset a border point?
-The perimeters will not be reset by the Ministry of Nature, Environment and Tourism, because if we change it just because some constructions have already been established then we would have to change the whole policy of naturally reserved lands and lands with special protections. This means we would have to renew the policy of all the lands with special protection in Mongolia, which is 16% of Mongolia. So this solution is extremely impractical.
Though it is impractical, the project to change the border perimeter has been suggested to parliament. However parliament chooses to solve this issue and we will implement is.
-Might they resolve to cancel the permits already given?
-We are conducting an inspection of the environmental damage and affects they are having. If it is found that the environmental damage is high then their permits can be cancelled.
(Mongolia based) Prestige Supplies announces Southeast Asia expansion
April 26 (DFNIonline.com) Duty-free distributor prepares to open border stores in Cambodia and Laos later this year
Mongolia-based travel-retail business Prestige Supplies has embarked on expansion in Southeast Asia, with new duty-free store openings in Cambodia and Laos.
The company has won long-term contracts with two border stores in the region consisting of a 2,000sq m border store due to open in September in Cambodia and a 100sq m border store in Laos, opening in June. The company will be operating in a two-fold capacity as supplier and retailer, where it will sell a full category range in both locations, according to purchasing manager Lukas Coates.
He told DFNIonline: "We're looking to expand throughout Southeast Asia. There is a huge opportunity to increase our footprint using the Mongolian duty-free model as a means to strengthen our presence across the region. We are looking to expand in all types of duty-free store including airport, border, diplomatic and military. We are currently looking at new operations in a number of other locations."
Mongolian National Lottery Rolls-out Popular 4D Game and Signs Major Distribution Deal with Grab and Go
ULAN BATOR, Mongolia, April 17, 2012 /PRNewswire/ -- Mongolian National Lottery, owned by BizINVIN LLC and operated by Modern Capital Vest LLC, subsidiaries of Singapore-based Monvest Group Pte. Ltd., rolled-out a 4D lottery game in April. In addition, Monvest announced a landmark distribution deal with fast food chain Grab and Go to install 22 lottery terminals to push the number of MNL sales points to over 80.
"We are confident the introduction of 4D will significantly boost the sales of lottery tickets," states Dr. Nixon Yap, Chairman of Monvest Group Pte. Ltd. "The impact of these new games for the National Lottery will be significant. Our prime objective is to provide a greater variety of entertainment choices for players to test their luck and to entice more consumers to gain an interest in lottery products."
The introduction of 4D expands the MNL product line from the 6/42 Jackpot Lotto and 6D lottery launch in December 2011. Popular in Singapore and Malaysian for over three decades, 4D lottery is expected to attract a wider range of players. In 4D, a player chooses a four-digit number from "0000" to "9999". Winnings are based on three of the four numbers chosen at a regular draw. The minimum ticket is MNT500 and a player can place any amount of bet. The three prizes are a multiplier of the total stake.
In Malaysia and Singapore, the 4D lottery game contributes at least 60% of sales revenue. The 4D game has evolved quickest in the mature Malaysian lottery market where there are now three existing 4D games. Malaysian players are eager to play games with bigger prizes and lottery companies have created a 4D Jackpot to meet demand. It is expected that the Mongolian market will follow the route of Malaysia in this regard.
Grab and Go Expansion
Monvest introduced the first 6/42 Jackpot Lotto and 6D Lottery to Mongolia in late 2011, with publicized draws telecast on local television every Tuesday, Wednesday and Saturday. Since launch MNL has established over 60 lottery outlets in an effort to reach out to the community. The number of sales points will increase to over 80 with the roll-out of at least 22 terminals at the popular Grab and Go outlets, which will initially offer the 6D Lotto and 6/42 Jackpot to its clientele.
Leading food caterer Nuudliin Catering LLC (Nuudliin) established the rapidly growing Grab and Go fast food cafe in 2010. Today there are 24 outlets located in the most crowded streets of capital city Ulan Bator. Of the 24 outlets, three operate on a 24-hour basis and another four mobile cafes are deployed at special events and functions. Grab and Go has two outlets in Darkhan and another two outlets in Ernedet, the second and third largest cities. Grab and Go cafes are easily located by their bright red color and Coca-Cola signage.
"The Grab and Go deal is a major step forward in our plan to roll-out over 150 lottery outlets and 100 terminals in Mongolia over the coming year," notes Dr. Yap. "In the initial stages of our MNL operation, the mission is to create a presence throughout the core populated areas with as many outlets as possible. By working with successful groups like Grab and Go we can accelerate our plan significantly."
The Grab and Go initiative is part of a MNL program to reach consumers directly where they eat, shop and entertain. This program supplements the booth outlet distribution strategy already deployed by MNL. Two of the most popular existing MNL locations are found in the largest supermarket chains – Nomin and Minii. Plans are afoot to increase the presence in convenience stores in the next phase of outlet roll-out.
D.Gankhuyag: Intellectual Property in Mongolia has the potential to reach global markets
April 27 (UB Post) The following is an interview with D.Gankhuyag, the head of the Accredited Agency of Intellectual Property.
-When we think about Intellectual Property, the first thing that comes to mind is compositions such as songs, poems and lyrics. How knowledgeable are Mongolians about registering trademarks?
-In the last five years, the concept of protecting Intellectual Property has been developing in Mongolia. In terms of the Accredited Agency of Intellectual Property, our organization represents both foreign and domestic citizens and entities and is in charge of conducting all activities on behalf of foreign and Mongolian people. Our agency was established in 1993 and has been operating for 19 years. Initially we operated only for foreigners. Until 2000, Mongolian entities and business organizations didn't understand clearly the significance of intellectual property, thus there were barely any people who required our services. But starting from 2003 domestic bodies started to increasingly make records on trademarks. For example, one type of the intellectual property, trademark, which is included in industry property, went from 5000 or 7000 in 2005, to 22 thousand in Mongolia today. The majority of these trademarks are domestic. In particular small scale entities tend to obtain their own trademark, to identify their products among products of other entities. The number of people and entities who are using our Accredited Intellectual Property Agency is increasing day by day. However, although they now know about the significance of intellectual property, they have poor knowledge about what kinds of materials are needed to make a patent and about product classification. Moreover, lately the amount of new creations and useful designs have been registered more frequently.
-It seems that while people have started to protect their intellectual property, conflicts related to intellectual property have also increased?
-It is a common occurrence that protected intellectual property is often used by others. It is obvious that if a person didn't protect his or her intellectual property, that person has no rights to litigate when someone uses their intellectual property. As I mentioned above, there are people who use intellectual property not knowing that it was protected, while some people use intellectual property intentionally, by modifying or copying it. In this case, the owner of the intellectual property can appeal in court.
-What punishment and bans follow intellectual property theft?
-At first, the conflict should be resolved by appealing to the investigation department of the Intellectual Property Agency. For instance, if conflict is detected in trademarks, state officials of the intellectual property investigate the case and destroys or turns the contradictory commodities into state property. If patent holders view that this operation is enough, the case is closed. If patent holders suffer from financial disadvantages such as a decrease in income or an income block, the offender will be fined and will pay compensation. Thus, when individuals or entities import new products or commodities, they should examine whether the product has patent protection or not, by searching in the trademark database of Intellectual Property Office. Otherwise the patent holder may submit a complaint to the court and demand a large compensation.
-You said that there are a number of new creations added to the Intellectual Property Register. What kind of creations are they?
-I attended the competition "Young inventor" as an assistant judge, which was initiated by Mongolian National Television. I saw many new inventions. So I granted design patents for 25 inventions, which competed in the last stage. It is important for young inventors that they become the owners of their inventions, rather than receiving an award. Interested individuals or entities can then use the inventions in accordance with a contract or even offer to buy the invention. Intellectual property is an intangible asset. Patent holders have full rights to evaluate their creations profit potential. There is no limit in the evaluation. Patents of brand new creations are valid for 20 years and design patents are valid for 7 years. If the creation is really beneficial, it attracts many investments to the holder of the patent.
-It is believed that Mongolians have talent to invent new devices and that they can be strong competitors in the technology field. Have you registered any inventions that can compete on the global market?
-Brand new creations with extraordinary design have been registered in our agency. They are the creations of Mongolian engineers for technical solutions. But one problem that stops our inventors from registering in the world intellectual office is the price. For example, China is the leading country in the world with a patent cooperation agreement that was made with the world intellectual organization. This is because the Chinese government grants monetary rewards when its citizens get registered in the world intellectual property organization. Thus, many creations are able to be delivered to the World intellectual organization from China.
We have developed a national intellectual property strategy and it is almost ready. I am working as a member of this project. If the government supports and includes it in the action plan, many great creations can be presented to the world from Mongolia.
-What is the significance in registering the creations in the world intellectual property organization?
-There are two important consequences in presenting new creation to the world. Firstly, foreign currency will be brought into Mongolia if foreign companies will buy the creation patents. Secondly, when I attend a meeting in various countries, statistics is frequently discussed. Although there is no patent registered in the world intellectual property, Mongolia ranks high in terms of intellectual potential.
-In terms of industrial intellectual property, are entity names registered as such?
-According to the Paris convention, entity names are protected by intellectual property. Initially, the Intellectual property Office granted patents or certificates for entity names until 2003. But now it is given by the State Registration Agency.
-What if someone imports products with a copied trademark from overseas? Is this a concern of your organization?
-Of course this issue is our concern. For example, the Chinese copy of ADIDAS brand sneakers are brought to Mongolia with the name "Abidas". If Adidas makes a complaint about replicas, we will take measurements, until then we have no legal motive to abolish the replicas. If the patent owner is registered in Mongolia and approaches our organization that their patent is being illegally used by others, we will investigate.
-You said that you started to communicate with foreigners when Mongolians had poor knowledge about intellectual property. Was the reason was same as above?
-The first complaint was made in 2006 from South Korean LG company. LG did not produce one time shampoo, but some people in Mongolia were selling it packaged as one-time use shampoo. Two delegations from South Korea came to Mongolia and asked us to solve this issue. On the basis of the complaint, we took appropriate measures.
-How clear is the legal environment in Mongolia on the protection of intellectual property?
-There are three basic laws related with intellectual property such as laws on patent, trademark and geology.
Mogi: News travels slow out of Mongolia it seems
Update: Heineken severs relationship with (Mongolian) club that hosted illegal dog fight (in 2010)
Investigation reveals the photo was taken at a nightclub in Mongolia.
April 20 (MNN) A photograph of a dogfight taking place in a venue decorated with banners advertising Heineken beer caused a furor over the past week, as thousands of people signed petitions and called for boycotts against the Amsterdam-based company.
Heineken denounced the photo upon its release and denied any knowledge of or involvement in the event.
Initial reports suggested the photo might have been taken somewhere in Latin America, but now an internal investigation by Heineken has revealed that it was taken at an event in Mongolia.
According to a statement from Heineken posted on its Facebook page, the dogfight took place at a nightclub in Mongolia in 2010. The owner of the club has confirmed to Heineken that the banners were actually from a promotional event held the night before that had not been removed by the time the dogfight took place the following day.
Heineken reported that it has already taken several steps to punish the club, including severing the relationship, "ensuring our brands will not be available in the club again." The company has also removed all of its promotional materials and beverages from the club and instructed its local distributor to check every location where Heineken products are sold "to ensure such illegal activities are not taking place there."
Mogi: not even a "brave", no?
Doubts over 'hero' of plane attack
April 20 (South China Morning Post) An air passenger has been hailed a national hero in Mongolia for preventing what was claimed to be a terrorist attack on a Cathay Pacific flight to Hong Kong.
Zayabaatar Buyannemekh was given a bravery award by the Mongolian government after saying he helped wrestle to the floor a Philippines "terrorist" who threatened passengers and cabin crew with a knife before trying to open one of the emergency doors.
The drama is alleged to have taken place on flight CX712 from Bangkok on Monday.
But while the incident received maximum publicity in Mongolia, the airline and police in Hong Kong played it down.
A Cathay Pacific spokeswoman said although an assault did take place on the flight, "there is no evidence whatsoever to suggest it involved a terrorist attack".
Hong Kong police said a report was made to them at 7.30pm on Monday about an expatriate man suspected of attacking two flight attendants on the plane.
Officers arrested a 52-year-old man and charged him with disorderly conduct under the Aviation Security Ordinance.
The suspect appeared in court earlier this week and was remanded to Siu Lam Psychiatric Centre. He will appear in Tsuen Wan Court again on May 2. But a police spokesman said: "No one attempted to open the emergency exit of the plane during the incident."
Nevertheless, Buyannemekh arrived home to a hero's welcome, greeted by officials and media.
On Wednesday he was presented an award for bravery by Mongolian Prime Minister Sukhbaatar Batbold, who praised Buyannemekh for foiling a terrorist attempt and saving the lives of many people.
The China News Service also reported how a Mongolian man helped to thwart a terrorist attack on a Cathay Pacific flight.
Monstame, Mongolia's national news agency, said the Filipino threatened other passengers with a knife and tried to "crash the plane by forcing open the emergency exit door".
It said Buyannemekh waded in and wrestled the man to the floor.
The Cathay Pacific spokeswoman confirmed that as the plane neared Chek Lap Kok, a member of the crew was attacked by a passenger.
He was restrained by other crew members with the help of two passengers, but the spokeswoman said there was no terror threat.
"When the flight landed, the police detained the concerned passenger for investigation," the spokeswoman said. "One of the cabin crew was slightly injured during the incident and she was sent to hospital for examination. She was later discharged on the same day." The two passengers who offered assistance were also slightly injured but they did not need to go to hospital, she said. All other passengers on the flight were unharmed.
Buyannemekh was quoted in Monstame as saying he saw a passenger struggling with three flight attendants and trying to open the door of the plane. He tackled him and grabbed him round the neck. The attacker was then handcuffed.
Cathay Pacific Flight Attendants Union urged the airline to take urgent measures to enhance the safety and protection of cabin crew.
It also criticised the airline for not making details of the incident known to staff and the public sooner. Copyright (c) 2012. South China Morning Post Publishers Ltd. All rights reserved.
Z.Buyannemekh stops terror attack – UB Post, April 19
Mongolian news site calls Pinoy who ran amok in plane a 'terrorist' – GMA News, April 21
Mogi: nice photos
Mongolia: Inside The Budding Eco-Tourism Destination
April 26 (International Business Times) If you thought Mongolia was nothing more than the land of Genghis Khan, think again. This nation of undisturbed nature and rich cultural heritage has so much more to offer the intrepid traveler.
"Mogi" Munkhdul Badral
Senior Client Manager / Executive Director
CPS International LLC
P Please consider the environment before printing a copy of this email.
Suite 1213 · Level 12 · 2 Sukhbaatar Square
Sukhbaatar District 8 · Ulaanbaatar 14200 · Mongolia
CPS International is a marketing arm of CPS Securities in Mongolia. CPS Securities is a Perth, Western Australia based AFSLicense Holder. To trade ASX and international stocks, feel free to contact me at firstname.lastname@example.org or +976-99996779.
CPS Securities, its directors and employees advise that they may hold securities, may have an interest in and/or earn brokerage and other benefits or advantages, either directly or indirectly from client transactions mentioned in correspondence from CPS International.
CPS International advise this email contains general information only and does not include advice. In preparing this communication, CPS International did not take into account the investment objectives, financial situation and particular needs of any person. As with any speculative mining company there are significant risks.