Wednesday, May 23, 2012

[CPSI NewsWire: Altain Khuder Hires Macquarie and Bank of America for Hong Kong IPO]

CPSI NewsWire brings you market updates on Mongolia, compiled by CPS International, a Mongolian marketing arm of CPS Securities, a Perth, WA based stockbroking and corporate advisory firm, specialising in capital raising for mining and junior stocks.

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Mongolia energy listing in search of China trade: Kumai Energy

May 22 (The Australian) AUSTRALIA'S position as the pre-eminent supplier of minerals to China has faced competition from Mongolia during recent years.

The landlocked former Soviet state has begun to evolve from a pastoral economy into a significant minerals exporter. Over the last decade, mining has grown from 14 per cent of GDP to more than a third, and now accounts for 89 per cent of export earnings.

About 1 per cent the size of Australia's mineral exports by value, Mongolia's mining industry has the opportunity to grow further. However, despite being physically closer to end markets in China, remoteness stands as a challenge for new developments.

Mongolia is one of the most sparsely populated countries in the world. Regional infrastructure is therefore undeveloped, but the coming listing of Kumai Energy aims to meet the demands of frontier exploration. Underpinning the float are four projects spanning about 700sq km in Mongolia's south east. Coal is Kumai Energy's primary focus, although its licence areas are currently absent of established resources with limited historical exploration activity.

Driving Kumai Energy's interest in the licences is the close proximity of two abandoned mines, where coal seams with a combined thickness of 94m have been recorded. Drilling is planned during this year to assess whether these measures extend into Kumai Energy's properties.

Evidence of economic coal quantities could drive interest in the company, although coal quality determination is likely to be a more significant catalyst.

The company's lack of historical exploration and major shareholders are risks that may influence post-float performance. But if Kumai Energy is able to establish the presence of export-quality coal resources, there are strong precedents to follow. Mongolia's coal industry has hosted several instances of success for Australian-based explorers, such as last year's $400m takeover of Hunnu Coal two years after its IPO.

COMPANY: Kumai Energy
SHARES ON OFFER: 35 million

Link to article


Macquarie Lands Lead Role on Mongolia IPO (Altain Khuder)

May 23 (WSJ) Macquarie is the latest investment bank to unearth a rich seam of potential fees in Mongolia's resources sector after securing a lead role in the proposed initial public offering of one of the country's biggest iron ore producers.

Macquarie and Bank of America-Merrill Lynch have been appointed joint global coordinators and bookrunners for the proposed listing of Altain Khuder, which owns the Tayan Nuur iron ore mine in the southwest of Mongolia, a person familiar with the matter told Deal Journal Australia.

The IPO, which could be worth US$1 billion, is targeted to take place in Hong Kong in the fourth quarter of this year, the person said.

Altain Khuder produces iron ore from the Tayan Nuur mine around 168 kilometers from Mongolia's border with China and has been exporting to customers including a unit of China's Baosteel since October 2009.

Following years of minimal investment in resources exploration and development, Mongolia is seeing billions of U.S. dollars spent on finding commercial quantities of copper, coal and iron ore as well as building vital infrastructure such as roads and new railways to accelerate exports to China. The resources boom has led some market participants to give the landlocked country the nickname 'Minegolia'.

Iron ore exports have risen from virtually a standing start. Exports in the first quarter of 2009 totaled less than 200,000 tons, but have increased more than eight-fold since then to above 1.6 million tons in the fourth quarter of 2011, according to Mongolian government data cited by Australia-listed mining company Haranga Resources (ASX:HAR).

This prospectivity led China Investment Corp., China's sovereign wealth fund, to invest US$300 million in Hong Kong Lung Ming Investment Holdings—the owner of Eruu Gol iron ore project near Mongolia's border with Russia—in 2009. The Eruu Gol mine has the ability to produce around 3 million tons of iron ore annually from an overall resource totaling more than 300 million tons.

ASX-listed companies are also exploring for iron ore in Mongolia, including 51 million Australian dollar-valued Haranga Resources (ASX:HAR), which owns a deposit close to Eruu Gol. FeOre (ASX:FEO), a smaller competitor worth A$46 million, owns the Ereeny and Dartsagt projects in central Mongolia.

Mongolia's iron ore is mostly of a lower quality to deposits in Australia's Pilbara, but interest is being kindled by its proximity to China, which accounts for roughly 60% of the world's imports of the key steelmaking material.

The Trans-Mongolian Railway crosses the border in northern China, meaning its natural customers are steel mills in regions like Inner Mongolia and Xinjiang that are already set up to take magnetite ore rather than better quality hematite.

A presentation by Haranga Resources in April signaled that freight costs per US dollar-denominated ton of iron ore concentrate delivered from Mongolia to the city of Baotou in Inner Mongolia region are less than half those of shipping magnetite from Australia.

However, shares in Altain Khuder could be a tough sell to investors amid signs that political risk in Mongolia may be rising.

The Mongolian parliament is discussing a law that will cap investment by foreign state-owned firms in strategic assets (Mogi: the law has already been passed), a move that could potentially derail the bid by Aluminum Corp. of China, known as Chalco, to buy a controlling stake in SouthGobi Resources. If passed, the law could prompt HK-listed shares in Mongolian mining companies to be discounted relative to the market due to restricted potential for takeover activity, as Chinese companies are widely seen as the most aggressive buyers due to their hunger for raw materials.

Link to article


Ivanhoe to make $1.8 bln rights offering

May 23 (Reuters) - Ivanhoe Mines , an affiliate of giant mining company Rio Tinto , said on Wednesday it intends to launch a rights offering open to all its existing shareholders that would raise about $1.8 billion in proceeds.

The rights offering, in which all Ivanhoe shareholders could participate, is part of a comprehensive financing plan to continue the development of the Oyu Tolgoi copper-gold project in Mongolia, the company said.

Anglo-Australian miner Rio Tinto earlier this year acquired a controlling interest in Vancouver-based Ivanhoe, whose main asset is the massive Oyu Tolgoi project.

Rio, which owns a 51 percent stake in Ivanhoe, said it plans to buy the maximum number of shares it is permitted to acquire under the terms of the rights offering.

Link to article

Link to IVN release


Ivanhoe Mines Rallies Almost 11% on Chinese Easing Speculation

May 21 (Benzinga) Ivanhoe Mines (NYSE: IVN) moved up nearly 11% today after China's Wen Jiabo made statements that could indicate that the country's leadership will move to bolster China's economy.

After peaking near $30 in early 2011, Ivanhoe has steadily sold off and was trading with an $8 handle late last week. The company is a mining company focused on gold and copper operations in Mongolia and it has many ties to industry giant Rio Tinto (NYSE: RIO).

Ivanhoe mines should continue to do well if China's economy rebounds or commodity prices (particularly gold and copper) rally higher. However, shares may trade lower still if the notion of a Chinese hard-landing comes back into play, or an event out of Europe triggers further deflationary fears.

Link to article


Manas: Investor Relation Update, May 2012

May 22, Manas Petroleum Corp. (TSX:MNP, OTC:MNAP)

Link to presentation


China Daye Non-Ferrous Loses Mongolian Arbitration Appeal, Aleinuer Mine Rights Lost to Mongolian JV Partner

May 21, China Daye Non-Ferrous Metals Mining Limited (HK:661) --

This announcement is made by China Daye Non-Ferrous Metals Mining Limited (the "Company") pursuant to Rule 13.09(1) of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules").

Reference is made to the announcements dated 7 October 2011 (the "First Announcement") and 6 December 2011 (the "Second Announcement") issued by the Company in relation to the Mongolian Proceedings (as defined in the First Announcement). Unless otherwise specified, capitalized terms defined in the First Announcement shall have the same meanings when used herein.

As disclosed in the First Announcement, the Mongolian Arbitration Center issued an arbitral award in relation to the Mongolian Proceedings, pursuant to which the Mongolian Arbitration Center ruled that the mining right to the Aleinuer Mine had to be returned by Reservoir Moly to the Mongolian JV Partner. As disclosed in the Second Announcement, CRML has lodged an appeal to the Court of Appeal of Mongolia against such arbitral award, and received a written ruling on 1 December 2011 which annulled the arbitral award issued by the Mongolian Arbitration Center on the basis of procedural irregularities and directed the dispute to be re-heard by the Mongolian Arbitration Center.

On 18 May 2012, the Mongolian Arbitration Center issued a final written arbitral award after the re-hearing of the case, pursuant to which the Mongolian Arbitration Center ruled that the mining right to the Aleinuer Mine had to be returned by Reservoir Moly to the Mongolian JV Partner. No further appeal is possible under Mongolian law with respect to this decision of the Mongolian Arbitration Center.

As at the date of this announcement, the Aleinuer Mine has not yet commenced any commercial production, and the Company has not yet derived any revenue or profit from the Aleinuer Mine. In addition, in light of the possibility that the mining right to the Aleinuer Mine would be required to be returned by CRML to the Mongolian JV Partner, full impairment for such mining right in the amount of HK$723.8 million has previously been made in the consolidated income statement of the Group for the year ended 31 December 2011, as disclosed in the Company's annual report for the year ended 31 December 2011 and the annual results announcement of the Company dated 30 March 2012. Therefore, the board of directors of the Company (the "Board") believes that the abovementioned arbitral award given by the Mongolian Arbitration Center on 18 May 2012 would not have a further material adverse effect on the financial results of the Group going forward.

Shareholders and potential investors are advised to exercise caution when dealing in the shares of the Company.

Link to article



23 May 2012 (BDSec) – Mongolian shares edged lower for a third straight trading day after Moody's downgraded ratings of four local banks of Mongolia. According to Moody's, the downgrade took place in the context of an ongoing global review affecting all banks whose standalone ratings are higher than the rating of the government of the country in which they are domiciled.

On the exchange 82,669 shares were traded with a value of MNT 172.3 million (US$130.3k) as nearly two shares rose for every one that fell. BDS index finished 0.37% down to 4,454.65 points while MSE Top 20 edged lower 0.06% to 20,171.70 points.

Today's leaders were Darkhan Nekhii (+8.77%), Mon-It Buligaar (+6.67%), Ulaanbaatar Khivs (+5.71%) and Khukh Gan (+5.26%) and the laggers were Nekheesgui Edlel (-13.33%), Aduunchuluun (-4.11%) and Telecom Mongolia (-2.05%).

Local News in Brief

The second Coaltrans Mongolia Conference has started today and will continue for two days on May 23-24, 2012, at Chinggis Khaan Hotel, Ulaanbaatar.

Mongolian iron ore miner Altain Khuder plans to raise about $300 million through a Hong Kong IPO, a source with knowledge of the matter told Reuters, underscoring a push by mining companies from the resource-rich country to tap stock markets to fund their expansions.

Link to article



May 21 (Dale Choi, Frontier Securities) --


According to major Mongolian daily " Zuuny Medee" on May 21,2012 Head of taskforce on law on regulation of foreign investment into enterprises of strategic significance, Deputy Chairman of Parliament of Mongolia N. Enkhbold said in the interview:

·         In some respects, foreign investors have concerns and doubts that changing old legislation would put them into difficult situation. However, this law is a golden middle between interests of Mongolia and investors, for mutual benefit of cooperation.

·         Law is to issue permission in connection with national needs and requirements, not to stop or limit foreign investment

·         It seems that foreigners are seeing it as limiting foreign investment , increasing administrative steps and stages. We will not refuse this to happen to certain degree. However, our goals are not money, not investment. Where should be our national interests, how is it to be connected with national security policy, this idea is reflected in the law

·         We have made best effort to reflect great many opinions of foreign investors, embassies representatives and domestic organizations that they have submitted to us. If one compares initial bill and approved law one would see that they have been reflected

·         If law is followed in content I would think that there would be no negative effect on the foreign investment

·         Law is not retrospective. Agreements done by companies with foreign investment according to law are in force and will go on.

·         There are two separate issues reflected in the law. State owned foreign investment will have to get permission from Government. This is difficult issue. If foreign state owned companies start operating it becomes more of a political issue rather than economical one. Conflict of opinions and interests arise. Any country is cautious of that.

·         As for private foreign investment into strategic sectors, if investment below one third  it will go by business rules. If it is between one third and 49 per cent Government has to be informed and permission obtained. If agreement has conflict it will be said that it is not possible. If investment is above 49 per cent and 100 billion MNT Parliament will decide by introduction of Government. To clarify, if it is above 49 per cent and below 100 billion MNT it is not necessary to be required to  discussed by Parliament, Government can decide. On the other hand if it is above 100 billion MNT but below 49% it is also not necessary to be required to be discussed by Parliament

·         This means it is very flexible law


·         Not retrospective feature of the law has positive impact on valuation of all current global Mongolian equities as it their increases value because now, after the law, getting same investment stakes would be subject to the law.


·         In their investment analysis, actions and decisions, among other considerations we recommend investors to account for not retrospective feature of the law

Recommendation for Southgobi (TSX: SGX, 1878 HK) /Winsway Coking Coal (1733 HK) / Aluminum Corporation of China Limited(2600 HK)

·         Our views remain unchanged since our last update note of May 17,2012

Link to Frontier


Mongolia's draft securities law explained - OPEN ACCESS

May 23 (IFLR) Mongolia's long-awaited draft securities law aims to modernise the Mongolian Stock Exchange (MSE). Investors anticipate the proposed changes to be announced ahead of the landmark Erdenes Tavan Tolgoi (ETT) initial public offering, which is expected by Q1 2013.

The securities law has been drafted in collaboration with the MSE's strategic partner, the London Stock Exchange, and the non-profit Business Council of Mongolia. It was sent to Parliament in September 2011.

But it is unclear how the law has changed since it entered Parliament. Darin Hoffman, a partner at Ulaanbaatar firm MahoneyLiotta, told IFLR the legislative process had been largely opaque.

There is little information about the draft's status, though recent news indicates that the law will not be adopted until after the June 28 Parliamentary elections. Michael Aldrich, a partner at Hogan Lovells' Ulaanbaatar office, said the draft law aimed to provide an encyclopedic overview of all possible financial instruments on the MSE. "It is a patchwork of ideas that reflects a 'committee-style' drafting process," he explained.

The current Mongolian Securities Market Law is not well-regarded by legal professionals.

Hoffman said the law had a very limited scope. "It only applies to companies listed on the MSE," he said. "This presumably was not the intention of the drafters."

Under current guidelines, all companies listed on the MSE must be registered in Mongolia and comply with Mongolian law. The draft law includes provisions for companies to pursue MSE listings without compulsory dual compliance.

To encourage dual listings, the MSE is also hoping that the law includes listing rules compatible with the Hong Kong Stock Exchange's standards, which will mean that Mongolia can be added to a list of approved jurisdictions.

The new securities law must be implemented before the $3 billion triple listing of Mongolian mining company ETT on the Hong Kong, London and Mongolian exchanges, currently set for late 2012 or early 2013.

A new securities law will be better equipped to regulate the projected increase in trading after the ETT IPO. All citizens will be granted a yet-to-be-determined number of shares in ETT and many will likely move shares after they are released from a lockup period.

ETT's IPO is a litmus test for the MSE. If the listing raises a lot of money and is well-managed by the MSE and other securities regulators, Mongolia's capital markets could attract new listings. "It is conceivable that many more companies with assets in Mongolia will try to access the global capital markets through the MSE," said Hoffman.

Without the new law, investors will consider MSE-listed securities risky investments. "Although some foreign investors have looked into the MSE, many require a stronger regulatory framework before committing to the capital markets," he said.

Link to article


'Minegolia' Struggles With IPOs

May 22 (WSJ) Mongolia is finding it far harder to get its biggest mining companies listed overseas than to dig the raw materials out of the ground.

Nicknamed 'Minegolia' for a resources boom and the billions of dollars that overseas companies are investing to pull out vast deposits of copper and coal, the country had been expected to account for several major initial public offerings this year.

But many of the share-sale timetables are slipping as commodity and stocks sink around the world, and partly because lawmakers won't consider vital legislation needed for some of the biggest shares sales ahead of next month's general election.

The long-awaited US$3 billion listing of state-owned miner Erdenes-Tavan Tolgoi Co., which controls one of the world's largest coking-coal deposit, was expected in the fourth quarter of this year, with trading in Hong Kong, London and Ulan Bator. But earlier this month the timetable was pushed back by at least three months, to early 2013.

The delays haven't stopped investment banks from lining up more candidates for public markets.

In the latest move, units of Australia's Macquarie Group Ltd. and Bank of America Corp. have been appointed joint global coordinators for a Hong Kong listing of Altain Khuder, according to a person familiar with the matter. Altain Khuder is one of Mongolia's biggest iron-ore miners, and the share sale is targeted for the fourth quarter of this year.

At the same time, Mongolia's government is taking a closer look at foreign ownership of its resources, particularly acquisitions by state-backed Chinese firms, as it worries that its resource-hungry neighbor could gain too much control of its valuable commodity assets. Should Mongolia show signs of being less welcome to foreign investment, it could make IPOs tough sells to overseas buyers.

However, iron-ore mining may attract less scrutiny by the government than copper and coal, because production is smaller and deposits are of a lower quality than Australia's Pilbara region, which dominates international export markets.

Mongolia's iron-ore exports in the first quarter of 2009 totaled less than 200,000 tons, but have increased more than eight-fold since then to above 1.6 million tons in the fourth quarter of 2011, according to Mongolian government data cited by Australia-listed miner Haranga Resources. Still, that is a fraction of the 279 million tons of iron ore that Australia exported to China in the 12 months that ended June 30, 2011.

Mongolia has one big advantage over Australia: its proximity to China, which accounts for roughly 60% of the world's imports of iron ore used in making steel.

The Trans-Mongolian Railway, used to transport the commodity crosses the border in northern China, meaning its natural customers are steel mills in regions like Inner Mongolia and Xinjiang that are already set up to take magnetite ore rather than better quality hematite.

Haranga Resources, which owns the Selenge iron-ore project in Mongolia's far north, says that freight costs per U.S. dollar-denominated ton of iron ore concentrate delivered from Mongolia to the city of Baotou in China's Inner Mongolia region are less than half the shipping costs from Australia.

These advantages led China Investment Corp., China's sovereign wealth fund, to invest US$300 million in Hong Kong Lung Ming Investment Holdings—the owner of Eruu Gol iron ore project near Mongolia's border with Russia—in 2009. The Eruu Gol mine has the ability to produce around 3 million tons of iron ore annually from an overall resource totaling more than 300 million tons.

However, investors willing to place bets on Mongolia's growth as an iron-ore-producing region will need convincing the country has the infrastructure in place to move growing volumes of commodities. Should delays in IPOs be compounded by a later roll out of critical infrastructure, such as new railway capacity, interest could wither just as quickly as it bloomed.

Link to article


Cabinet to submit draft law to Parliament on cancelling double taxation treaties with UAE, the Netherlands, Luxemburg, and Kuwait

May 23 (Montsame) --

- The cabinet discussed a draft law on annulling the law which ratified an agreement established between Mongolia's government and the United Arab Emirates, the Netherlands, Luxembourg and Kuwait on not imposing the double tax on income and capitals and prevention of avoiding the tax payment. The draft law will be discussed by parliament.

Link to Montsame

Link to May 23 Cabinet Meeting press release



Ulaanbaatar, Mongolia, May 23 /MONTSAME/ A plenary meeting of the parliamentary session on Tuesday discussed and then approved the basic guidelines on the socio-economic development of Mongolia for 2013.

About it spoke R.Bud, a head of the parliamentary Standing committee on economics, and Ch.Khashchuluun, a head of the National Development and Innovation Committee (NDIC) the same day.

The basic guidelines consist of 26 goals and 171 measures. To realize them, a total of 4.4 trillion togrogs are required.

R.Bud said the guidelines continue this governmental action program for 2008-2012 and lay a foundation for the activities of next cabinet but can be clarified in harmony with policies of newly elected parliament and cabinet. The NDIC head added that a majority party at parliament will have a right to adjust the guidelines to its program.

The guidelines say the economic growth of Mongolia would reach 19 per cent by 2013, the size of the Gross Domestic Product would be MNT 19 trillion. It means the GDP per capita is to be USD 4,900. The exchange reserves would reach USD 4.1 billion. The population is expected to increase two per cent, so the government intends to keep an unemployment rate at 6.1 per cent. The rate of Mongolian togrog (MNT) against US dollar would stand at MNT 1,326.4.

According to Ch.Khashchuluun, it has been projected that 38 per cent of all investments will be made by domestic sources. The budgetary deficit will not exceed two per cent of the GDP, and the policy rate of the Bank of Mongolia will reduce as well.

In respect of the law on budget, the guidelines' draft has been worked out in a close connection with the budgetary framework report for 2013. The economic growth is expected to reach a high level thanks to implementation of the biggest projects in mining sector, to starting of extraction from the next year, and to the rise of investments for the infrastructure sector.

The main economic balances such as budgetary, external trade and payment will have positive indicators, a stability of the macroeconomics will be kept. The inflation rate might increase following a high growth of demands. The rate of Mongolian togrog is expected to be strong against foreign exchanges due to a flow of the exchanges to Mongolia.

To ensure the economic stability, the guidelines reflect a policy on keeping the inflation rate in nine per cent. A program is to be realized on developing industries, and some measures are expected for boosting the infrastructure, creating reserves of meat and fuels, launching an agricultural exchange.

To support a supply, actions are to be taken to continue a construction of oil refinery, to establish factories of meat, milk, construction materials, and to provide the country with vegetables.

Sine a weak development of the infrastructure affect Mongolia's competitiveness index, the biggest infrastructural works will start from next year based on the state budget for 2013, the Development Bank of Mongolia (DBM), direct foreign investments, assistance, loans, and a state-private sector partnership. For example, major parts of construction of a railway between Tavan tolgoi and Sainshand and 30 per cent of the construction of a railway in a route Tavan tolgoi--Gashuunsukhiat, Nariin sukhait--Shiveekhuren are expected to be completed by 2013. In addition, a construction will start from 2013 of a 400 Megawatt power plant, electric lines of 220 Kilowatt and sub-stations will run between Mandalgobi and Tavan tolgoi, and Choir--Tsagaan suvarga.

As a support to renewable energy production and the eco-development, a construction will start of a wind farm of 50-52 Megawatt in Tov aimag and in Sainshand, and of a hydroelectric power station in basin of Selenge river.

Within am aim to improve the economic structure and to ensure a sustainable growth of long-term economics, an infrastructural construction will start of heavy industrial complex in Sainshand, economic free zones will be developed, a preparation will launch for the Altanbulag free zone, a first-phase infrastructure of Zamyn-Uud border checkpoint will begin, and a policy is to be realized on facilitating the commerce trade with partner-countries.

It is expected that the economic partnership agreement will be made with Japan in 2013, and a measure will be taken for establishing an agreement of transparency with the USA. Policies will be implemented to reduce tax for small- and middle-sized businessmen, to augment loans for them, to support employment, and to increase salaries and pensions.

Link to article


Zorigt: profits from mining industries are distributed evenly among the people

May 23 (UB Post) For the 90th Anniversary of the Mongolian mining industry, there have been many events celebrating this occasion; with Mining Mongolia 90 being the lead conference. During this international conference, the Mongolian mining industry reported 90 years of its operation, and in addition to analyzing its achievements, Mining Mongolia 90 discussed the future development of the mining industry. The following is an interview with D. Zorigt, the Minister of Mineral Resources and Energy on the results and conclusion of Mining Mongolia 90.

-Tell us your opinion of the Mining Mongolia 90 International Conference.

-This event can be considered the opening ceremony for the 90th Anniversary of our mining industry. We will celebrate the anniversary until the end of this year. The foundation of Mongolia's mining industry was set when mining operations begun in the Nalaikh coal mine.

For this occasion, we discussed the difficulties faced by the sector. Since its creation, the mining industry has become a major part of our economy. We have become more aware of the importance of public awareness of our mining industry and we need to find more ways for the public to contribute to its development.

-You seem to agree with the idea that the Mongolian tax system is disorganized. How should this be resolved?

-We must compare the Mongolian tax system with tax systems of other countries. For Mongolia, there is value added tax, personal income tax, customs and business taxes. All these taxes and fees need to be better organized. Otherwise a when a large amount of money is taken for taxation, suspicions arise on the whereabouts of the money.

-How should we duplicate how taxes are managed in Mongolia?

-The Ministry of Finance is holding discussions on this problem with other countries that have duplicate taxes. There are many controversial issues concerning this. Previously, we implemented a duplicate tax to attract and award bonuses to foreign investors, but we have since reached the conclusion to cancel it.

-The issuing of special permissions is also in disarray. How can this be solved?

-In the past four years, the issuing of mining and exploration licenses in Mongolia has relatively decreased. Before, nearly 45% of Mongolian territory had lands which required special permissions to access them, and this number has been decreased to merely 13%. There were over 7,000 licenses and now there are around 3,000. We are taking action step by step, and mining companies are beginning to send in their reports on time specified by policies. We have started nullifying companies' licenses if they did not send their reports on time.

-So is Mongolia's mining industry generally organized and in order now?

-The number of permits and the territory issued by the permits are decreasing, while the contribution from the mining industry to the State fund is increasing. We are always accused of taking and eating up all the money generated from mining operations.

But the truth is that the mining industry is greatly accelerating Mongolian economic growth. A trillion and 800 billion MNT provided by the Mongolian mining industry is being distributed to the people. The whole of mining sector is working to make sure that this money continues to be distributed.

Foreign investments in Mongolian mining quadrupled in the past four years. This just goes to show its strategic importance to the Mongolian economy. So I don't think any controversies will go around the mining sector. We can also not deny that issues regarding the mining industry may turn into a personal war between certain individuals.

-Many countries today strategize development by focusing on their mining operations. It feels like this idea has arrived in Mongolia. What do you think?

-There are many countries developing in such way. The best examples would be the US, Norway and Canada. Like them, mining is speeding up our economic growth. Yet we should be careful to not make the wrong decisions and go in the completely wrong direction. For example, the Government should pay more attention to the relationship between the mining industry and the environment. Mining companies themselves need to realize their responsibilities.

-What is the current situation on human resources for mining?

-For Mongolians, it is more profitable and preferable to work in Mongolia's most powerful sector. It is inevitable that jobs and wages will increase gradually. With the growing and expanding of the mining sector, other sectors will follow. But with this, there are rumors spreading of Mongolia's minerals being loaded out of the country by its powerful neighbors. We should pay more attention to what we're doing in Mongolia instead of talking about other countries. But not only do we accuse other countries for wrongdoing, we tend to accuse of each other of wrongdoings. That is not true. The profits we make from the mining industry are distributed evenly among the people.

Link to article


KPMG Hosts VIP Event to Open New Mongolia Office 

May 17 (KPMG) At a ribbon cutting on May 17, 2012, KPMG in Mongolia opened its office in the landmark Blue Sky Tower, officiated by Mr. D. Khayankhyarvaa, Finance Minister of Mongolia. KPMG in Mongolia has aligned with NIMM Audit to create one of the country's largest Audit, Tax and Advisory services providers. Over 150 guests attended the ceremony, including senior executives from a number of Mongolia's leading local and international organizations.

Event attracts leading local and international companies and key government officials.

KPMG in Mongolia officially opened its office on the 6th Floor of the landmark Blue Sky Tower in a ribbon-cutting ceremony and reception this evening, KPMG International announced today. Mr. D. Khayankhyarvaa, Finance Minister of Mongolia, officiated at the ribbon cutting and opening ceremonies.

The new office is an important milestone for KPMG in Mongolia, which has aligned with NIMM Audit, a leading Mongolian professional services firm, to create one of the country's largest Audit, Tax and Advisory services providers. KPMG in Korea has led the development of the new alliance in Mongolia, and Edward Kim, a partner with KPMG in Korea, will lead the firm alongside L. Enkh-Amgalan, the Mongolian managing partner, who is also the President of the Mongolian Institute of CPAs.

KPMG is dedicated to providing world-class services to its clients in Mongolia, who expect the same high standards of risk management and quality control that they find worldwide. The new office and growing team of 50 local Audit, Tax and Advisory professionals demonstrates the strategic importance of Mongolia to the KPMG network.

"KPMG is delighted that the new office is fully operational, and we are committed to expanding our capabilities in the fast growing Mongolian market" said Hideyo Uchiyama, Chairman of KPMG's Asia Pacific Region. "We are fortunate to have a strong group of experienced local professionals, and we will continue to seek the best local and overseas professionals to build our capabilities. I am also delighted to have spent some time with our local KPMG professionals and recent college graduates, sharing insights with the future leaders of Mongolia's financial services sector."

Over 150 guests enjoyed an entertaining evening showcasing traditional and modern elements of Mongolian culture, and the event featured two of Mongolia's most famous musical performers. Among the VIP guests, Finance Minister D. Khayankhyarvaa delivered a keynote speech, and representatives of two important companies operating in Mongolia, Rio Tinto and the Trade & Development Bank, made congratulatory remarks. Attendees included senior executives from a number of Mongolia's key local and international organizations.

"We are very pleased to share this special occasion with the Mongolian team and so many important guests," said Brian Ambrose, Chief Operating Officer of KPMG International. "We are committed to the growth of the Mongolia firm – there are 20 KPMG leaders from around the world here for the ceremonies, who are excited about the growth opportunities for Mongolia and KPMG."

"Being a part of the KPMG family will give our local professionals the opportunity to learn from KPMG's extensive experience, and help KPMG in Mongolia to provide world-class Audit, Tax and Advisory services to our clients" said L. Enkh-Amgalan, Senior Partner at KPMG in Mongolia.

Link to release


Samsung C&T wins Shangri-La UB Hotel construction contract

May 22 (Yonhap News) Samsung C&T Corp., one of South Korea's leading construction and trading companies, said Tuesday it has won three overseas orders worth $726 million.

The company said it secured a high-rise development and building remodeling project worth a combined $534 million in Singapore, and a $192 million hotel construction project in Mongolia.

The two orders in Singapore involve construction in the Marina Center region in the city state's central business district.

The company is already engaged in 12 other construction projects in the Southeast Asian country totaling $3.2 billion, including a liquefied natural gas terminal, urban train and highway building projects.

The order in Mongolia involves the building of a 34-story Shangri-La hotel, 24-story office tower and five-story theater and commercial building.

The project in Ulan Bator, secured as part of a consortium, is expected to be a new landmark for the capital city, and reflects growing recognition of the company's competitiveness in the global construction field, the company said. 

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Enkhbayar, Corruption, Foreign Reporting and the Rule of Law

May 22 (Mongolia Today Blog) The politics of Mongolia never gets boring like totalitarian or authoritarian regimes, where foreign investments are honored as long as the ruler or collective leadership are in place. The world is happy unless these regimes threaten the interests of major powers. But, the majority of citizens in these repressive regimes suffer.

The current political development in Mongolia causes headaches to many: Mongolians fear from prevalence of corruption and struggle of interest groups, foreigners are concerned about the security of their investment in this little-known country, and Mongolian politicians care about their legacies. Everyone's concern leads to different interpretations and behaviors.

The arrest of former president Enkhbayar, a score of provincial governors, and officials of the Mongolian Minerals Authority raise hopes for the ability of the Anti-Corruption Agency to eradicate corruption because a majority of the Mongolian population have suffered and lost their hopes in fancy "good governance" initiatives. Although people respected the third president, some start questioning in his strange behaviors and statements which recently released to the public. People wonder why a former President, Prime Minister, and Chairman of the Ikh Khural does not show any respect for the law, which he passed, executed. Many politicians, MP Bat-Uul, Gundalai, former MP Khurelsukh and others in the casino case, obeyed the law and did not protest against it.

The former president's trial is scheduled to open next Thursday (May 24). Mongolians seem to be hesitant to express opinions on whether Enkhbayar is guilty or not because all want to defer to the trial. This is a very good sign, it shows confidence and trust in the rule of law. If Enkhbayar discloses wrongdoings of others, that is also helpful to clean the government of "bad" folks.

Enkhbayar tweeted on May 21 "Монгол хүний саруул ухаанд би итгэдэг." ("I believe in the wisdom of Mongolians.") This is a phrase attributed to S Zorig, one of the leaders of the democratic revolution in the early 1990s who was murdered under very unclear circumstances later that decade.

According to Mongolian news media, Enkhbayar's trial is scheduled on 24 May 2012 in Ulaanbaatar.  As explained in the recent press statement of the Mongolian Independent Authority Against Corruption, he will be tried on three allegations: misuse of capital city property "Urguu Hotel" for a personal gain, misuse of Capital City property "Printing House" for personal gain using unlawful privatization, and misuse of a gift addressed to Mongolian Buddhist for personal gain.  Enkhbayar is still hospitalized and recovering from his hunger strike – his health condition may prevent him to attend the trial according to his lawyer.

The latest arrest of the former Chief of the Mongolian Minerals Authority brings more hope to dig into "the most corrupted government sector" according to various studies (for example, USAID study, 2005).  Subpoenas for some junior officials were also issued last week. Obviously, these will scare many foreign investors – if licenses were issued in questionable ways. In the last several days, Mongolia has appeared in most major global media, including the BBC, Economist, New York Times, Wall Street Journal and the Financial Times. Non-resident foreign journalists treated the case rather strangely and made unconvincing one-sided allegations, likely following the distribution of a seemingly pre-prepared PR package by Enkhbayar's family and supporters.

Mongolian people are aware of the lingering competition among domestic interest groups – investigations of corruption cases are seemingly one-sided. But, one cannot rule out the logic of political entrepreneurs. Mongolian politicians are competing to score high and to create their own legacies. To distinguish oneself from populist politics and increase one's positive political image, politicians and parties need to achieve something visible – "win the hearts and minds of people". Today, the only thing they could score more is the fight against corruption. That's why the current Mongolian president is attempting to score on corruption and reform of the judiciary, the parliament approved the Law on Conflict of Interests, and most politicians remain silent on alleged corruption cases. Only the drive for positive legacy generate political will – which require many politicians keep a delicate balance. Ignorance of the "rule of law" and "populist lies" will now cost their political posts and legacies.  Only Mongolians will suffer if Mongolia becomes a safe haven for corruption.

Link to article


Mongolia not within national boundary under Republic Of China (Taiwan) Constitution: MAC

Taipei, May 21 (CNA) The Mainland Affairs Council said Monday that Mongolia is not included in the country's territory under the Republic of China (Taiwan) Constitution, citing previous statements by the Ministry of the Interior.

The council made the clarification after a legislative hearing earlier Monday during which Mainland Affairs Minister Lai Shin-yuan was shown three maps and asked to point to the one showing "the territory of the Republic of China according to its existing national boundaries," as described by the country's Constitution.

The three maps presented by Legislator Tsai Chi-chang of the opposition Democratic Progressive Party (DPP) included one showing Mongolia and mainland China as one country, another showing the two as separate countries, and the third being a map of Taiwan.

Lai picked the second option but was criticized by Chen Chi-mai, a DPP lawmaker, for choosing the one of the People's Republic of China.

The council defended Lai's choice, however, by pointing to the Interior Ministry's regulations on maps, which began treating Mongolia as a country independent of China after Taiwan set up a representative office there in 2002.

At that time under a DPP administration, Interior Minister Yu Cheng-hsien cited the Enforcement Rules for the Act Governing Relations between Peoples of the Taiwan Area and the Mainland Area in supporting the decision to amend the map regulations.

The rules define the ROC's mainland area as the region under the rule of the Communist Party of China.

Mongolia became an independent country in 1945 after the ROC government signed a treaty with the former Soviet Union.

The ROC government then revoked its recognition of Mongolia's independence after the treaty was abolished by the Legislature in 1953 because of a breach of the deal by the Soviet Union. (Mogi: Soooo, Taiwan has rewritten Mongolia's history it seems)

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Heritage Auctions is Being Sued by Mongolia -- Over the Sale of a Dinosaur

May 21 (Dallas Observer) My 3-year-old son is crushed. Yesterday, his dad was about $1,052,480 shy  of purchasing a 75 percent complete fossil skeleton of a Tyrannosaurus bataar , sold by Dallas-based Heritage Auctions. Or at least I would have been had I put in a bid.

It's just as well, though, because whoever purchased the 70-million-year-old specimen has been thrust into an international legal and paleontological shit storm that played out dramatically during yesterday's auction.

It started late last week, when the director of the Institute for the Study of Mongolian Dinosaurs, writing on behalf of Mongolia's president, called for the cancellation of Sunday's auction. The dinosaur, he wrote, actually belongs to his country.

From USA Today:

Based on our experience in the studying the collecting of Mongolian dinosaurs, and on the information provided by your company with other specimens to be auctioned this Sunday (May 20), we strongly suspect that the Tyrannosaurus specimen, as well as several others you intend to auction, came from Mongolia.

Mongolian law prohibits the export of fossil specimen did in fact come from Mongolia, we strongly urge you not to auction this speciment because it would then have been acquired and exported illegally.

Unmoved, Heritage went ahead and sold it to an anonymous bidder. Its president, Greg Rohan, told USA Today the specimens were brought to the States legally, though he declined to disclose exactly how or who the seller was.

Things hit the courts. Houston lawyer Robert Painter, acting on behalf of Mongolian President Elbegdorj Tsakhia, filed a lawsuit in Dallas County on Saturday morning, and got Dallas County District Judge Carlos Cortez to issue a temporary restraining order against Heritage.

"Unfortunately this came to my attention after 5 o'clock on Friday," Painter said. "I put together the pleadings overnight," and tracked down Cortez at his home.

After making sure Heritage would be served, Painter flew to New York to attend the auction, of which he provides a brief play-by-play .

When the dinosaur came up for bidding, the auctioneer read a statement to the effect that the completion of the sale would be contingent on the outcome of court proceedings.

Painter objected, saying Cortez's order blocked the auction of the skeleton altogether. He called Cortez's cell phone and asked the judge to explain the order to Rohan, but the Heritage president refused to take the phone, Painter said.

A Heritage attorney ended up talking to the judge, according to Painter, but the auction was already over. Painter said he has never seen anyone ignore a court order while the judge who issued it was on the cell phone explaining what he meant.

A Heritage spokesman hasn't yet returned my phone call, but in the press release on its website announcing the sale, Heritage accuses Painter of unlawfully trying to interrupt the auction.

"We respect the various opinions on the subject and wish to protect the legal rights of all parties involved," Rohan said in the release. "We have legal assurances from our reputable consignors that the specimen was obtained legally. As far as we know, the Mongolian government has not produced any evidence that the piece originated in its territory, but the final determination will be up to the American legal system."

The legal battle will at least allow Mongolian officials to figure out where the Tyrannosaur came from. A hearing is scheduled for June 1 in Dallas County. Painter plans to ask the judge for a contempt of court ruling against Rohan and Heritage.

And just so you don't think Rohan simply has an axe to grind against Heritage, he bought a watch, hewn from a meteorite, while he waited to block the dinosaur sale.

"In fact, I'm wearing it now," Painter said. "It's a nice watch."

Link to article


T-Rex Wreck: Mongolian Representative Disrupts Skeleton AuctionThe New York Observer, May 21

Tyrannosaurus Bataar Sale After Judge Orders Auction HaltBloomberg, May 21


Part 2 of 4: Mongolia's Dilemma: Who Gets The Water?

Mongolia, the land of Genghis Khan and nomadic herders, is in the midst of a remarkable transition. Rich in coal, gold and copper, this country of fewer than 3 million people in Central Asia is riding a mineral boom that is expected to more than double its GDP within a decade. The rapid changes simultaneously excite and unnerve many Mongolians, who hope mining can help pull many out of poverty, but worry it will ravage the environment and further erode the nation's distinctive, nomadic identity.

Second of four parts

May 22 (NPR) The Central Asian nation of Mongolia has untold riches in copper, coal and gold, which could help many of its nearly 3 million people — more than one-third of whom live in poverty.

But mining is also reshaping Mongolia's landscape and nomadic culture. Camel and goat herders worry that new mega-mines will siphon off precious water in an area that's already suffering from the effects of climate change.

Mijiddorj Ayur, whose livestock graze near the Oyu Tolgoi mine, tends camels in a stretch of Mongolia's South Gobi province that's a moonscape of sand and gravel. He relies on the animals for meat, wool and milk, and they rely on hand-pumped well water to survive.

"When we come to the well, we can see the level of the well water is 8 inches lower than it used to be," says Mijiddorj, 76, who wears a golden, double-breasted robe called a deel and a brimmed felt hat.

Mijiddorj — Mongolians typically go by one name — says the well water has dropped in the last several years because of lower rainfall, while the grasslands are shrinking because of rising temperatures from climate change.

Now, he sees another potential threat: Oyu Tolgoi, a giant mine that will need huge amounts of water to process copper ore. The company has already drilled test wells near where Mijiddorj's camels drink.

"My greatest fear is we won't have water," he says. "I don't care about the gold or the copper, I'm just afraid there won't be water."

Threats To Traditional Herding

It's a worry echoing across South Gobi province, a mix of rocky desert and grassland where drought periodically wipes out herds. It's home to thousands of herders and about a million head of livestock.

Officials from Oyu Tolgoi, which has been under construction since mid-2010, say the mine will draw water from a deep aquifer that won't affect wells like Mijiddorj's. But he and other herders are suspicious.

They have already felt mining's impact. Herders say mine trucks hit their animals and kick up dust that chokes pastureland. Indeed, almost all the roads in the area are dirt, and trucks trail plumes of dust so huge they look like they're on fire.

A herder named Chuluunbaatar says he's lost about 40 percent of the pastureland he uses, as well as many sheep, goats and camels, since Oyu Tolgoi built a nearby road a year and a half ago.

"Some of them died, because they were exhausted because there was not enough pasture," he says. He adds that he had to kill some dying animals and sell their meat in order to salvage some of their value.

A Question Of Compensation

Oyu Tolgoi — which means "Turquoise Hill" in Mongolian, a name that refers to the color copper turns when it's exposed to oxygen — is owned by global mining giant Rio Tinto and Canada's Ivanhoe Mines, as well as the Mongolian government.

The mine has offered herders compensation, including simple jobs helping livestock cross roads, in a country where per capita GDP is about $2,500, according to the Mongolia government.

Many herders have signed compensation agreements, but Myagmardorj Mijiddorj, a local government official, says some herders already working for the company complain of coercion.

"Oyu Tolgoi employs people for maybe $230 a month," says Myagmardorj. "When the people are reluctant to sign the contract, they say: 'You are an employee and you have to sign it or there will be measures.'"

In other words, Myagmardorj says, they'll be out of a job.

"We never forced them to sign the agreement," says Suugie Gonchigjantsan, who manages community relations for Oyu Tolgoi.

She denies that the company has pressured anyone and says the complaints are just a negotiating tactic.

"Some of the individuals really want to get more, more and more," Suugie says.

The company's compensation scheme is modest. One option, for instance, would provide an affected family with a $3,800 scholarship to put a child through college. In its first full year of operation, Oyu Tolgoi could produce about $900 million worth of gold and copper, according to company statistics.

So, why not give herders more money and quiet them down?

Suugie rules that option out. Any solution, she says, "has to be equal."

Growing Competition For Water

Mark Newby, Oyu Tolgoi's principal adviser for water resources, says the company has monitored more than 100 herder wells in the area for years.

He says Oyu Tolgoi has found no connection between the herder wells, which go down as far as 30 feet, and the aquifer the mine will draw from, which begins about 150 feet below the surface.

At full capacity, the mine will pump about 180 gallons per second from the aquifer. If herders' wells are affected — which Newby says he seriously doubts — Oyu Tolgoi says it will fix the problem.

"In the very worst case, it would require the delivery of treated water to the herder," he says. "For a typical herd, that would require up to a truckload a day."

Newby says a bigger challenge may be managing perceptions and helping herders already struggling for water.

"The biggest risk we face is that we will be seen to be a land of plenty in a sea of stress," he says.

Competition for water continues to grow across South Gobi province, which is about the size of Wisconsin. Outside the provincial capital of Dalanzadgad, local officials are at odds with Mongolia's central government and a nearby coal mine.

Two years ago, local officials designated a nearby seasonal lake as a protected area. Last year, the central government reversed the decision and said the coal mine could pump out water underneath the lake.

"That is the only fresh water source of this whole area," says Munkhjargal Batdorj, a local official. Munkhjargal says the central government has a stake in the mine — which like Oyu Tolgoi also has foreign ownership — and appears to be pursuing its own interests.

"The government is probably reversing its own decision because it's just not caring about the people," she says. "I think it's a rotten decision."

Who Benefits The Most?

Mining contributes heavily to both local and central government budgets, and residents complain that officials sometimes use the money to enrich themselves.

Rashboud Tumen, a grocer in Dalanzadgad, cites one local representative in particular.

He says the official had a Russian jeep and traded it in for a Toyota Land Cruiser 80. Then, a few months later, he traded that in for a Land Cruiser 105 — which an incredulous Rashboud notes costs $53,000.

More than 30 percent of Mongolians live on $1.25 a day.

"Animals die in the drought," he says. "You could have bought livestock for 10 families. You could have done so much good with that $53,000. What does a Land Cruiser 105 do for local people? Nothing."

As mines begin to pump more water from the Gobi, herders will be watching their wells and waiting. And as profits continue to pour into mineral companies, some Mongolians will continue to wonder what is in it for them.

Link to article


Part 3 of 4: Mongolians Scramble For A Share Of Mining Wealth

Mongolia, the land of Genghis Khan and nomadic herders, is in the midst of a remarkable transition. Rich in coal, gold and copper, this country of fewer than 3 million people in Central Asia is riding a mineral boom that is expected to more than double its GDP within a decade. The rapid changes simultaneously excite and unnerve many Mongolians, who hope mining can help pull many out of poverty, but worry it will ravage the environment and further erode the nation's distinctive, nomadic identity.

Third of four parts

May 23 (NPR) Ooarnkoyar Maikhuu spends 12 hours a day behind the wheel of a 60-ton dump truck hauling dirt from a giant, open-pit mine in the deserts of southern Mongolia. The 22-year-old single mother works at Oyu Tolgoi, which in a few years is expected to become one of the world's largest copper mines.

When she started working in the mine's cafeteria two years ago, Ooarnkoyar — Mongolians go by their first names — earned just $96 a month. Today, as a truck driver, she brings in nearly $1,400 a month, compared to the country's annual per capita GDP of about $2,500.

"I just got a loan on my salary and just bought a little plot of land," says Ooarnkoyar, whose work ensemble includes a white hard hat, gold hoop earrings and sparkly lip gloss. "When my son grows up, I want to move into Ulan Bator [Mongolia's capital] and buy an apartment, and I want my son to go to school there."

Mongolia is in the midst of a mining boom and people like Ooarnkoyar are among the prime beneficiaries. Last year, the country's economy grew by more than 17 percent, nearly twice the pace of its southern neighbor, China.

Oyu Tolgoi is scheduled to produce its first copper ore next month, and as more mines open, they're providing good jobs in the country of nearly 3 million people, where about one-third of them scrape by on $1.25 a day.

Good Training, Tough Conditions

Thousands of young Mongolians have descended on Oyu Tolgoi to improve their lives. Oyu Tolgoi — which means Turquoise Hill in Mongolian and refers to the color of copper when it's exposed to oxygen — is more than 300 miles south of Ulan Bator, but it might as well be in the middle of nowhere.

The mine camp is a self-contained city of about 14,000 people surrounded by the lunar landscape of the Gobi, where the nearest neighbors are mostly camels, goats and sheep. Weather in the area features sandstorms, tornadoes and temperatures that drop to 40 below zero in winter and soar to 135 in the summer.

The camp has two bank branches, a grocery store and a barbershop. In the evenings after work, miners play basketball outside and table tennis inside a Quonset hut.

From 7 to 9 p.m., the camp bar serves beer by the case beneath black lights. The clientele ranges from young Mongolian women just out of college to grizzled, 50-something miners from Australia.

Tseren-ochir, who says he is in his mid-30s, is a mine superintendent. He introduces himself as Augie, because it's easier for the foreigners he works with to pronounce.

He is directing workers to dig a nearly 5,000-feet-deep shaft straight down to reach the copper ore. Augie says Rio Tinto and Ivanhoe Mines, the huge foreign mining companies that are majority owners of Oyu Tolgoi, provide great on-the-job training for Mongolian workers.

Peering into the giant shaft that plunges into the earth, Augie says 18- and 19-year-old men who came to Oyu Tolgoi five or six years ago are now "international miners."

"They can operate the latest technology underground. Those guys are fantastic," Augie says.

People work long stints at Oyu Tolgoi, and Augie is no different. His current rotation is 56 days on site, 14 days back home. He says the hardest part about his work is being away from his young family.

"I've got a 5-month-old baby," he says. "I miss her so much, but there's nothing to do" about it.

Augie makes about $24,000 a year, good money in Mongolia.

Privately, though, Mongolians complain that foreign workers from Canada and Australia with similar skills make at least three times more.

The Unofficial Gold Rush

Mining provides opportunities for Mongolian workers, but it also siphons away talent from other important industries — like tourism.

"We lose at least four people a year," says Batbayar Amgalanbayar, who runs Mongolian Expeditions and Tours in Ulan Bator.

He says mining companies routinely poach his best drivers and translators. Mongolian Expeditions offers everything from horseback-riding trips to winter kite-skiing, but Batbayar says he has already had to turn away business this year because he couldn't staff some trips.

"I had to turn down jeep tours. I had to turn down canoeing tours. I had to turn down trucking tours," he says. "This is something that never happened before."

Workers in the Gobi who can't get hired by mining companies often strike out on their own. Mongolia has an estimated 70,000 illegal gold prospectors.

They're called "ninjas," a name a mining union leader says originates from the fact that they cover their mouths and heads with bandanas. Others say they earned the nickname because they carry mining pans on their backs and resemble TV's Teenage Mutant Ninja Turtles.

A ninja prospecting camp looks like a scene out of the California Gold Rush, updated for the 21st century. In one ravine deep in the desert, miners park their minivans, SUVs and jeeps along a dry river bed.

After selecting a spot with the help of metal detectors, they dig pits with shovels, pickaxes, jackhammers and power drills. They pour soil through sifters until they find pebble-sized bits of gold or, in some cases, actual nuggets.

"We're finding lots of gold," says Batbildeg, a 30-year-old miner.

Various mining teams display their hauls, pouring small, yellow rocks out of tiny, white pill bottles. They say they can sell an ounce for about $150.

Batbildeg has been mining for two to three years.

"It's quite good. Last year, I made nearly $4,000," he says. "Before that, I used to be a herder. My livestock all died out."

Getting A Piece Of Mining Boom

Another prospector, Batbold Badrakh, hovers over his mine, a 4-foot-deep pit. He served as a soldier in the 1980s when Mongolia was a Soviet satellite, but has struggled since.

"I did look for jobs, but now I'm over 40, no one is going to hire me anyway," says Batbold, who wears a gray cap and has a lined face that looks a decade older than his 42 years.

"I tried with Oyu Tolgoi, but they won't hire me," he says. "First of all, my health is not good enough for them. And I have a family. And I can't leave them for a year."

Batbold can't lift heavy objects because he has a bad back, but he can still manage to run a sifter. That seems to be enough for the three other members of his crew, and it's the only way Batbold can get a small piece of the action that is Mongolia's mining boom.

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How to Develop a Country: Part I

May 23 (UB Post)

By Paul Sullivan

Professor of Economics, Georgetown University

One of the responses I received from last week's column was something along the lines of: how can Mongolia be developed? That depends on what you mean by developed. Many people think that simply increasing output and GDP (Gross Domestic Product) is a good measure of development. It generally is not. There are many countries in Africa who have had large growth rates of their GDPs, but not much else was happening in them to develop their people. Until the recent shutting down of oil exports from South Sudan and the conflict developing between Sudan and South Sudan these countries were growing, on average, very well. On average is a key point. Many people in these countries remained dreadfully poor and so no real improvements in their lives. Most of the GDP growth was from the increase in oil prices and oil output over the previous years.

Similar things could be said about Angola, Equatorial Guinea, and many other resource states in Africa. Their oil, gas, and other mineral outputs were increasing, and until 2008 metals prices were booming, so it seemed these countries were doing well. They were not for most of their people. The average life of the average Angolan and average Equatorial Guinean is just awful. They are poor. Most have no access to electricity. Many have no sewage or clean water access, and most live on less than $2 a day. Over the years since oil was first produced in Nigeria possibly as much as $650 billion in oil revenues were made, but by whom? The life of the average Nigerian seems to be much worse now than a couple of decades ago. The environment of the oil regions near Port Harcourt is just plain awful.

(A friend of mine who worked there for many years is a chain smoker. He told me he would rather put out his cigarette in the gasoline-topped bilge of the boats he was in rather than try to put it out in the oil-topped creeks he was riding in.) Gabon boasts one of the most expensive cities on earth to live in: its capitol, Libreville, where most of the food and other things are imported into the country from places like France. The banana plantations in Gabon have gone to waste in most places. Most people would rather work in the oil business or related businesses or get income from businesses subsidiary to oil and natural resources, like driving, security, hotels, etc.

These countries are not developing. They have spurts of GDP growth if resources output increases and especially when the prices of those resources are going up. They are very uneven economies and are terribly reliant on oil revenues. One of the worst for this, especially given the closure of its oil output by government decree due to a disagreement with its neighbor to the north, Sudan, on the pipeline charges they needed to pay. 98 percent of the government revenues of South Sudan came from oil revenues. About 60 percent of Sudan's government revenues came from oil.

Only about 30-40 percent of the government budget of Mongolia is from mining, which could be a good thing if this is kept fairly stable. However, as mining income takes off I could easily see the government budget of Mongolia from mining increasing to 50 or even 60 percent (or more) if other parts of the economy and tax base do not similarly grow.

The Mongolian government at many levels is sending money to entrepreneurs and others from small to large enterprise to help develop these sides of the economy. I suggest, respectfully, that the Mongolian government at the country, regional, and city levels put a lot of the money being brought in from mining over the coming decades to giving support to entrepreneurs with good business plans to develop a more balanced economy.

I say good business plans because there have been times in the past in Thailand, Indonesia, and other countries when loans were handed out to people without good business plans. The loans went bad. And the country was harmed by them. Of course, part of the development of entrepreneurship and small to large industrial businesses is that the people who will plan and run them are educated and trained to do so. I also respectfully recommend that Mongolia put a lot of its funds from mining into this sort of investment. A strong investment in improving business schools and building and developing new one in collaboration with the best business schools in the world could also help.

Some practical vocational training in plumbing, electrical work, carpentry, masonry, etc. could also help a great deal. Development is a practical matter that needs to be handeled at practical as well as intellectual and political levels.

Almost all of Mongolia's exports are from mining. This sort of reliance on mining could bring troubles in the future. There are all sorts of talks and papers about 8-10 percent growth rates for Mongolia for the near future. This may sound good at face value, but this is not growth rates like in China, which were based on construction, industrial production, export of industrial goods and more productive activities. Mongolia's growth rates in the future will likely be almost completely dominated by the output of mining and the prices of the products mined and exported.

About 85 percent of those exports go to China. China might be seeing a slow period sometime in the near future. Mongolia not only has a huge reliance on mining for its economic growth, it is hugely reliant on what happens in the Chinese economy for its exports. Mongolia is also hugely reliant on the prices of minerals. When they dropped precipitously during the recent financial crisis, Mongolia fell into some difficult economic times.

Mongolia needs to diversify its economy and this is altogether possible. One thing Mongolia really has going for it is its high savings and investment rates: about 30-40 percent for each. As financial capital and savings pools grow in the country much of it will go to mining, because that is the, excuse me, easiest way to make money. The harder ways are through entrepreneurship and developing new ideas. This takes time, patience, and some long-term planning.

Mongolia is a young country with most of its population being under 30 years old. It has huge amounts of mining, land, and other resources and human resources. It human resources could turn out to be its most valuable natural resource. To that we can turn in the next article.

Surely, I cannot answer all the questions on development of a country in such small articles, but I can send out ideas for doing so. Over the next few weeks I will focus on various aspects of how development has worked and how it has not in some countries and try to apply these lessons to Mongolia and other places.

One of the most complex intellectual and practical exercises of a country could be its economic developments happening at the same time as its human developments. Many countries have failed. Some have succeeded. I hope to educate on both.

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Spider web-6

May 23 ( Enkhbayar[1]is arrested. The Godfather of Corruption is finally behind bars. This would not have happened if he were still in good terms with his party. Had he won the Presidential election in 2009, he would have been idolized. Had he not excessivelyextorted those entangled in his web, he would have been just fine.

Those who are next in line [for arrest],Ulaan[2], Terbishdagva[3], Chuluunbat[4], and Davaasuren; his long time partners, hastily organized a movement to free him. Another group of comrades, S. Batbold[5], Bat-Erdene[6], Enkhbold[7]Miye, Munkh-Orgil[8], Tsengel[9], Raash[10], and many more, are left to fear of what may come next. Those who did not participate in his transgressions; including Bayar[11], Nyamdorj[12], Lundeejantsan[13] remain content. Thousands of those who are already entangled in his spider web, but have not met and are not aware of their secret master, are at a loss and in confusion.

Seven years have passed since I published the last installment of the Spider Web series. Since then, the web of corruption has expanded to enormous proportions, fully covering the vast land of Mongolia. During this period, the state budget has increased ten-fold, whereas the sum consumed by the web has grown a hundred-fold. Previously a mere billion USD, Mongolian GDP has now reached an incredible USD10 billion. The state budget has risen from USD300 million to USD4 billion. Incidentally, the budget of the capital city, Ulaanbaatar, surpassed a hundred million USD from 10 million USD. However, the lives of the people have remained virtually the same, except for over 20 thousand Governors and those who spend the budget.  The flow of money to their pockets has increased nearly a hundred times in these seven years. In 2000, total cost of election was 7 billion tugriks. Today, a single candidate is ready to spend this sum for his campaign.

Many people have claimed to have written the Spider Web series during this period. First serving as advisor to Bagabandi[14], and then to Enkhbayar; some Dugar has emerged through newspapers as the author. Baabar[15], who first seized Spider Web-5, mailed to the office of The Daily News; delivered the article to Enkhbayar, claiming to have written it himself. In return for Baabar's promise to not publish it anywhere, Enkhbayar provided him with evidence of Ulaan's swindling of USD11 million. This step was first and foremost caused by Ulaan's plan to compete in the 2005 Presidential election. And since his receipt of that evidence, Baabar has accused Ulaan of being a thief and other names, without fear of retribution.

Enkhbayar's name shall leave a glaring black spot in the contemporary history of Mongolia. In the times when a closed society became an open one, and amidst the turning of the page of our history, Enkhbayar inherited a decaying web, which was the MPRP (Mongolian People's Revolutionary Party), and resurrected it with blunt force. He felt in his guts that only a large sum of money, and an equal amount of greed could resurrect this web, now devoid of any ideology and belief. And he accomplished it without any hesitation. He weaved a giant net that reached farthest points of Mongolia.  But now, he is seized by the next generation. Thousands of flesh eating, iron ants of his own creation are now lashing out to feast on him.

Out of twenty-seven independent cases in which he is the prime suspect, six are so far confirmed by the Independent Authority Against Corruption (IAAC). The immense amount of money embezzled by Enkhbayar, somewhere between USD80 million to USD100 million is staggering. Everyone talks about it. Everyone suspects it. Foe-turned-friend Enkhsaikhan[16]once graced Enkhbayar with a title "Godfather of Corruption," a name, which the public has readily accepted.

It is said that the IAAC was established too late and with too much hesitation to  be effective. The first chief of the agency was Enkhbayar's pawn and a personal accomplice. Today, the ex-chief has been accused and sentenced for criminal  corruption.  Because the chief of the anti-corruption agency has legal immunity, Parliamentary annulment is necessary in order to prosecute him. However, Enkhbayar's old partners and accessories in crime were so fearful of him that they wasted a full year to demolish the chief's immunity. Only after his pawn was removed as head of the agency, has the opportunity arisen to investigate Enkhbayar. Up until then, the 10 crimes that the agency exposed since its establishment were small offenses of minor, rural officials.  

The same as in any society and any nation, corruption did exist in communist Mongolia. However, with so many severe restrictions on the private sector, when poverty embraces the whole society which is under a strict state control, and when there is nothing to bribe with; corruption was measured by a bottle of vodka. The same picture can now be seen in North Korea. In 1990, however, with the adoption of a free, democratic system and a market economy, and after the old social code fell apart without a new one to replace it, corruption spread like wildfire. It infected every state institution, with the level of corruption increasing the higher the government official.  In 1994, Jargalsaikhan[17]of Buyan was given a Government guarantee when obtaining a loan from Japan. After a few years and much scandal regarding this matter, the then-Prime Minister denied the fact that his cabinet produced such guarantee. But, he was cornered by Jargalsikhan, who confronted him through media with a question "Do you remember how many suits you have received from me?" This story displays how much corruption was needed to strike  a deal. A Couple of suits was enough for a USD 18 million deal. But by today's standards, this kind of job would fetch at least a couple of million USD. So, we can see the progression in the cost of corruption.

Corruption in the new Mongolia was kick-started during the privatization activities of 1990 and 1996, plus through foreign loans and assistance.  Most foreign assistance, in particular, food assistances, was stolen by corrupt public officials before it ever reached the intended recipients. According to research conducted by the Soros Foundation at that time, 80% of international assistance intended to alleviate poverty and food assistance was embezzled and 70% of the poor was not even included in those programs.

Moreover, it is a common knowledge that these international food assistance programs were one of the main tools for attracting votes during elections. Until 2000, the Government of Taiwan considered Mongolia to be a part of their country and sent millions of dollars of food assistance through the Mongolian and Tibetan Affairs Commission. Although the Mongolian government opposed the assumption underlying this assistance, unofficially they received it and it was skimmed off through the hands of public officials. If requested, the Taiwanese government probably can provide the actual assistance financial numbers.

When Enkhbayar assumed the Prime Minister's position in 2000, a corrupted and morally bankrupted society awaited him. With 98% of the seats in Parliament held by his party, Enkhbayar embraced infinite state power. He had a chance to correct and purify the society. However, he chose instead to further harnesss the already widespread corruption, and evolve it into a systematic mechanism. The level of corruption in present day Mongolia, as well as its structure, is Enkhbayar's masterpiece. First and foremost, he single-handedly applied the method of "rent-seeking," discharging 15 thousand public servants in an extremely short period, based on his calculation that they would hinder his plans. 250 million tugriks from Chuluunbat, who was appointed as the Governor of Mongolbank, 280 million tugriks from former Director of Erdenet Mining Corporation the late Otgonbileg[18], and 200 million tugriks from the current Prime Minister S. Batbold, to appoint them to their respective positions. This is only the peak of a now-obvious iceberg of rent-seeking.

His cabinet was composed of "poor" folk, on whose desire to plunder and squander, Enkhbayar choreographed his "dance." Former Minister of Education Tsanjid has moved from his home at a student dormitory to shine as the owner of numerous buildings and apartment-blocks during his four-year tenure. Everyone knows ex-Minister of Social Welfare Batbayar, formerly a head of an almost poverty-ridden household, is now owner of a whole building at Central Square, where he also owns a restaurant. By current market rates, that can fetch several million USD. During his tenure, he established a company authorized to send Mongolian employees abroad under a government quota, and ruthlessly quashed his competitors. As a result, owners of a competing company also working on this project, a husband and a wife, died within prison cells. Three children were orphaned. But no one was held accountable for this crime.

Former Minister of Foreign Affairs Erdenechuluun was also one of the "poor" folk. His ministry acquired a land license designated for the building of the Korean Embassy from the city administration. However, Erdenechuluun sold the license to a Chinese company for USD2 million, pocketing the money. Today, declaring that Mongolian society lacks justice and equality, he is employed at a foreign project. Ex-Minister of Energy Jigjid ended up as the head of a large-scale mafia ring. 

These are only a few examples from within the cabinet headed by Enkhbayar. However it is the original model, and soon was copied by lower level officials all around the country. According to a foreign research completed in 2003, out of world countries Mongolia didn"t even make the 120th place in the international corruption index. 30% of social wealth of Mongolia, one of the poorest countries in the world with a GDP of a mere billion USD, now belongs to the "shadow economy."

One of the biggest bonanzas for them was Erdenet Mining Corporation (EMC). Accounting for a certain percent of world's total aluminum production, astoundingly, Erdenet was not registered internationally. Efforts put forward by many international organizations, including the World Bank, ADB, and IMF to register this corporation on international accounting books were hindered by direct pressure from Enkhbayar. To this day, Erdenet still remains the only contributor of world aluminum production not registered internationally, for the sole reason that Enkhbayar was its master since 2000. Until today, out of only three persons who had the authority to issue direct instruction to the director of EMC and coordinate its trades, two were family members of Enkhbayar. Today Narankhuu and Ganzorig, directors of EMC at times, are under investigation, and if they face jail time, their fingers would undoubtedly point at Enkhbayar.

Previous Spider Web installments have revealed in detail how Enkhbayar traded the aluminum quotas of EMC. A notorious figure of international fraud, Markrichi[19]amassed quite a fortune under the names of several different companies out of this unmonitored and unregistered mine.

Another money-spinner was Mongolia's foreign debt. Clearing Communist Mongolia's debt to other communist nations was a grand scheme of robbery in the name of a poor motherland. My previous article detailed how the debt of 35 million convertible rubles to Czech and Slovenia was "paid." Current Member of Parliament, and then an official at Ministry of Finance, Davaasuren, played a leading role in embezzling almost USD3 million, and was rewarded generously. He used the bank accounts of a close relative, who was director of a company under the municipal administration. The very first successful business operation between then Governor of Mongbolbank, Chuluunbat, and then-Prime Minister Enkhbayar was a transaction of USD 5 million debt some Mongolia's entrepreneurs loaned from Germany's Credit bank, which in the first place should never have been paid by taxpayers' money. This laid the grounds for a long and fruitful cooperation, earning them a reward of USD1 million. 

Land dealing was another kind of looting. Most people assume that today's land dealing mess in Ulaanbaatar City is the handiwork of ex-mayor Enkhbold Miye (now deputy Prime Minister and MP). What he stole for himself is relatively very small. But even a small amount, theft is still theft, so he could never expose Enkhbayar. But little do people know that Enkhbayar was the dealer and real supervisor of his activities. An example at hand would be of how Enkhbayar brokered the obtaining of licenses for the construction of the Blue Sky Building, and in return, now owns 15% of it. Half of that was handed to him in cash, but only after he employed threats and blackmails to delay the completion of the tower. The land for now-erectedMonnis Tower was also valued at several million USD. Two of the current cases against him, concerning two large pieces of land in Ulaanbaatar's downtown area, were completed when he was serving his last term as President. It was done in a hasty, clumsy manner because of Enkhbayar's fear that despite all his blood and sweat, nothing would be left for him. These are not mere cases of a rusty printing factory and an old hotel, but a grand scheme concerning two perfectly located properties in downtown Ulaanbaatar that could bring him millions of USD.

Yet the most lucrative land business was held not in the downtown area, but in the outskirts of the city. Former Minister of Nature and Environment Barsbold was his partner-in-crime in these deeds. The number of licenses for land along the road from Ulaanbaatar to Terelj National Park has risen from 7 in 2000 to over 700 in 2005. Each license fetched a bribe of around USD 40 thousand, most of which were sold to foreign nationals because they were least likely to raise a hue and cry later. The protection and control of sacred Bogd Khan Mountain range to the south of the cityrests with the Ministry of Nature and Environment, not the municipal administration. Barsbold and Enkhbayar's sale of the land surrounding Bogd Khan Mountain has proven to be enormously profitable. The entire valley of Artsat located on route to Yarmag is licensed under Enkhbayar's mother's name, meaning, in fact it belongs to him. Northern parts of Bogd Khan Mountain were also looted by at their hands, including the previously vacant large land surrounding Orgil Spring Sanatorium, from which Enkhbayar's former aide Choijilsuren also profited.  

But all of the above is nothing compared to the enormous fortune he accumulated from Mongolian mineral deposits. When Ivanhoe Mines discovered Oyu Tolgoi[20] deposit in 2001, Enkhbayar was Prime Minister of Mongolia, or in other words, the almighty "Emperor." Ivanhoe CEO Robert Friedland, dubbed "toxic Bob" in the USA, was the owner of this junior mining company, infamous for his plunder of developing countries. The late Steve Jobs of Apple Inc. included Friedland's fraudulent youth and the beginnings of his misdeeds in his memoir, a part, which was translated to Mongolian and published. Friedland, whose understanding of Mongolia was limited to an oppressed country in post-communist Central Asia, calculated that he could solve everything by simply buying or bribing a single dictator, Enkhbayar. That is how a decade-long business partnership between Friedland and Enkhbayar began. They chose Chuluunbaatar, Director of Monnis Company, as their main mediator, and in return for his services, Monnis's business partner, Germany's Liebherr Mining Equipment, grew and prospered in the Mongolian market. Japan's Kamatsu, which was EMC's main supplier at the time, despite having superior and cost efficient merchandise, was pushed out of the Mongolian market by pricey and less sturdy Liebherr products. Again Enkhbayar profited greatly from this deal. Because EMC is not registered internationally, all business conducted there was shrouded in secrecy and out of sight. Enkhbayar, alone, was fully in control of those affairs.

On December 25, 2003, Friedland received a long-distance call from Mongolia. It was Christmas, a holiday for almost half of world's population. On the other end of the line was Prime Minister Enkhbayar, who was asking for a spare USD50 million by the next day, to pay Mongolia's debt to the former USSR before the New Year. Because it is a holiday, no bank transaction was available, Friedland said. However, as a businessman with an eye for a bargain, he was ready to provide the USD50 million within the next 24 hours in exchange for an exploitation license for Oyu Tolgoi.

The license was ready on December 26, 2003. Mongolia was finally clear of USSR debt. For that alone, Enkhbayar demanded to be awarded with the Order of Chinggis Khaan, conducted a nationwide ceremony, and broadcasted a televised spectacle of his groupies weeping with pride and joy.

The clearing of this debt is a grand accomplishment indeed, if only were there no scandals later on about a missing USD50 million. Russians claimed they received USD200 million out of USD250 million. Because they were distressed about the possibility that a large sum of money was laundered to support terrorism, they queried the IFC on the issue. Obviously there were no terrorists, but only a group of corrupt officials on both the Mongolian and Russian sides, who pocketed this money. Then Prime Minister of Russia Kasyanov, dubbed "Mishaten percent", could not provide a credible explanation for this case, and apparently this was the very foundation from which President Putin started his investigations.

The license for Oyu Tolgoi was sold by Enkhbayar himself, not by a subsequent government as he now claims.

Friedland, who purchased OyuTolgoi, the richest copper deposit in the world, for USD 50 million from Enkhbayar, has contrived in every possible way to raise money through  international stock exchanges. Likening his business in Mongolia to selling a USD5 t-shirt for USD100, he bragged at the Brazilian stockexchange about the fortune he was making there. However, news of his actions soon reached Mongolia, and Mongolians started eyeing OyuTolgoi with due suspicion.

In 2006, then-Prime Minister Enkhbold Miye made the first decision to exploit Oyu Tolgoi. His efforts, however, were hindered by suspicions about Friedland.And both the public and the Parliament stood unanimously against it. The next Prime Minister, Bayar, who viewed Friedland as unreliable to cooperate in the exploitation of this deposit, approached Rio Tinto, one of the biggest mining corporations in the world and provider of hefty financial assistance to Ivanhoe. Bayar met Friedland only once. But with Rio Tinto, he held lengthy discussions, which resulted in an undisclosed pact to eventually push Ivanhoe out of Oyu Tolgoi.

The Oyu Tolgoi Investment Agreement was signed in 2009 between Rio Tinto, Ivanhoe, and Government of Mongolia. It marked the beginning of a three-year old duel between Rio Tinto and Friedland. Because he owned majority of the stocks, the scale was heavier on Friedland's side. However, Rio Tinto and Government of Mongolia jointly opposed each of his moves.

Ivanhoe is more of a stock exchange player than an actual mining company. It takes risks in exploring possible deposits, announcing its findings with hype and grandeur to fetch the highest price. Thus, price fluctuations at stock exchanges are more important to Friedland than OyuTolgoi's(OT) copper and gold. Prior to the signing of the investment agreement, OT'sstock price reached USD 17 at its peak to fall flat to USD 1.5. This was due to regular mass hysterias surrounding OyuTolgoi. The regular appearances and disappearances of these hysterias would prove beneficial for attentive shareholders, and many witnesses insist that Friedland was behind them, either orchestrating, financing or coordinating them.

Enkhbayar's strangely "accidental" involvement also played an important role here. His involvement concentrated on luring criticizers of Enkhbold's or Bayar's cabinet, and it became even more palpable after the OyuTolgoi Agreement was signed. This agreement was penned only because Enkhbayar lost the Presidential Election in 2009, and because the new President did not veto the Cabinet's decision. Now, Enkhbayar emerged as the harshest criticizer of the OyuTolgoi Agreement, because Friedland does not want to be pushed out by Rio Tinto.

Rio is a massive company, owning mines and deposits all around the world. And they never confer more than 10% of the established company to others. The main reason Rio granted 34% to the Mongolian government by loan is that they wanted to expel Ivanhoe from the deal.

Enkhbayar's regular announcements now focused on how he originally scored a deal from investors to keep 51% of OyuTolgoi for his beloved motherland Mongolia and her people, who now own only 34%, losing the rest to foreigners… It was only a game of words. OyuTolgoi is the property of Mongolia and will remain so in the future. The Government of Mongolia came into possession of this percentage by leveraging the profit to be made in the future from this deposit. Indeed 34% is a grand number for Mongolia, a country with  almost non-existent mining experience. However, Friedland ultimately nurtured the idea in order to further sink this inexperienced government into debt by presenting it with 50% of the operating company, and with the intention to eventually sell it to the highest bidder. 

It became evident that Friedland had obtained a low-interest loan to be used by the Mongolian side for its expenses, and conveyed it to the Mongolian side at several times the original interest rate, and pressured OyuTolgoi LLC to accept it. Only after it was uncovered, and fiercely opposed byTsagaan[21], Bagabandi, and Rio representatives on the OyuTolgoi board, did his plan fail. Because, Ivanhoe Mines is the biggest stakeholder of OyuTolgoi LLC, Friedland is able to make such decisions single-handedly.

Currently there is no pressing need to further explore OyuTolgoi lands, as its immense established reserves will be sufficient for the coming fifty years, and exploration activities can be gradually carried out along with the excavation process. However, an increase in stock prices is of more importance for Friedland than the exploitation of OyuTolgoi. Abusing his superiority over other stakeholders, he started pushing for new exploration activities and wasting money in huge amounts. This further fueled hostility between Rio and Friedland. The scandal blaming the OyuTolgoi Agreement being neither fair nor profitable for Mongolia is more Friedland's words than Enkhbayar's. Enkhbayar is but a high-maintenance mouthpiece of Friedland's.

Friedland and Enkhbayar are so overly inter-dependent that it is impossible for them to part ways. Each holds the other captive. Southgobi Resources LLC, a company owned by Friedland came into possession of its current coal deposit of 400 million tons with Enkhbayar's involvement, and already raised USD2 billion on stock exchanges. At the request of Chuluunbaatar, and the effort ofEnkhbayar, equipment tender for this deposit was awarded to Liebherr, for which Enkhbayarearned USD 4 million. When conveying Chuluunbaatar's request through phone, Enkhbayar promised Friedlanda number of mining licenses. Friedlandnow owns about 40 licenses in Mongolia, most of which was acquired with the direct assistance from Enkhbayar. However, because Southgobi is a public company registered at stock exchanges, any tender process is required to be transparent and under strict legal monitoring. If Enkhbayar falls, Friedland falls. If Friedland falls, Enkhbayar falls.

Money is of utmost importance to Friedland, as power is to Enkhbayar. These two traits formed the basis of a close cooperation; a close personal cooperation which started to impinge upon Mongolia's foreign policy, principles, and geopolitical policy. At the intergovernmental session of a bilateral meeting which took place in Moscow in 2009, the issue of Mongolia was discussed by Russians and Chinese counterparts. The two sides agreed that the growing interest of western countries following the unearthing of vast natural resources in Mongolia conflicts with their geopolitical interests. Thus China and Russia have conspired to deter major investments by western countries in Mongolia, particularly in the mining sector. This notion displays their intent to bar Mongolia's two decade-long effort to implement a third neighbour policy.

There is an evident link between the growing hostility against western investment in Mongolia and the Enkhbayar-Friedland duo. The book Confessions of an Economic Hitman was translated, published in large quantities, and distributed free of charge. Where did the finances come from? This book pinpoints Rio Tinto as the biggest economic hitman to start with. In truth however, this book belongs to the same sort of "literature" as "Jews secretly rule the world," "Americans did not land on the moon," and "9/11 was orchestrated by Americans themselves"; some resembling hypothesis, and others resembling provocation.

According to a recent study conducted by a foreign company, 75% of mining licenses in Mongolia actually belong to Chinese companies, meaning that our third neighbour policy has been reduced to a hoax. The well-resourced, massive campaign against western companies (the main pillar of Mongolia's foreign policy balancing act) has already begun and is accelerating.

Enkhsaikhan, who recently became "bosom bodies" with Enkhbayar, has become a shining knight against the West since OyuTolgoi talk reached its peak around 2005. At that time, he all but became the foster son of old lady Wu Yi, former Vice Premier of China. Whenever he visited China, four bodyguards escorted him, insulating him from the rest of Mongolian delegation. No Mongolian delegate in history has been the recipient of such respect and care in China. Even though Enkhsaikhan divorced his original party (the DP), and created his own one of almost no consequence, he still scored official invitations from China. There is not even a slim chance that our Chinese neighbours were not aware of his open threats and announcements calling for a state coup, revolution, and unconstitutional assumption of state power.

There are around fifty mega-large scale state owned enterprises in China, including those that have expressed their interests to participate in the exploitation of TavanTolgoi[22], such as Shenhua and Chinalco (which provides loans to Erdenes-TavanTolgoi LLC). All of their directors are members of the Central Committee of Communist Party of China, meaning their policy is not corporate, but governmental. With Mongolian parliamentarian election just a few months away, Chinalco expressed its interest in purchasing Southgobi from Friedland. As a result of the serious public outrage following this announcement, the Minerals Law of Mongolia is now to be amended. Previously discarded articles to block, repress, and limit foreign investment, and calls to re-evaluate already signed investment agreements were brought up once again to be included in this amendment. Chinalco's bid obviously will not succeed. More seriously, Rio Tinto could be kicked out and the OyuTolgoi project halted. With its solid state policy, strict discipline, and five millennia civilization history, it is natural for China to have calculated her interests and geopolitical gains carefully—especially in this case.

In fact, Mongolia accounts for a mere 0.1% in China's foreign trade. Mongolia's natural resources are not of that much of consequence for China, as they have recently announced that they have now become an oil exporting country, following the beginning of their offshore oil drilling. For Mongolian resources however, China remains the only market. If China does not purchase our products, Mongolia will collapse. This method called "isolation," is employed by Russia and China on North Korea. They relentlessly block international sanctions against the country, but never really assist it, despite claiming to have friendly relations. When needed, North Korea serves as their mad dog on a leash, and they return the favor by providing a minuscule reward just to keep it from collapsing completely. North Korea is an isolated nation with only two neighbours - Russia and China.

Five hundred thousand heads have quarreled back and forth about TavanTolgoi for five years, but all for naught. This matter is a mix of public hysteria and various personal interests, and is stuck with no prospect of moving forward. During his visit to China last fall, Batbold promised to grant a majority of this deposit to Shenhua. In return, he offered nine mining licenses for a lofty price, and succeeded in selling them. This decision however, further fueled the ongoing battle, making the TavanTolgoi project even more impossible to be carried out. It is not important for China to necessarily own TavanTolgoi, for it already owns 75% of the mining licenses in Mongolia either secretly or in the open. For China, isolating this deposit, which is attracting much western investment, would be a much better alternative.

No matter how hard it is pushed, Mongolia's coal output will not exceed 50 million tons per annum. For instance, Southgobi has decades of reserves on its own, and is now in the process of holding talks to purchase Nyamtaishir's part of the deposit. Therefore, it is a much better move geopolitically to thwart western investment in Mongolia by the hands of Mongolians, than bluntly trying to get into the TavanTolgoi project.

Enkhbayar himself is an avid partner of China in the minerals business. It did not escape the eyes of the free press when Enkhbayar travelled to Beijing, just before the Presidential Election in 2009 and at the height of his election campaign, on the pretense of visiting his sick mother at a Chinese hospital. In fact, it was his mother-in-law, not his mother at a hospital. Secondly, her daughter wasn't visiting her in China, she was travelling in Korea. And thirdly, Enkhbayar never went to the hospital. However, he did host numerous meetings with Chinese companies at his hotel.

How would you explain the fact that his younger sister purchased a luxury townhouse located in the most prestigious part of Beijing, resided mostly by Chinese celebrities? How can  an unmarried person, previously having worked as a public servant at the Mongolian Embassy in Singapore afford such property? During his meetings, Enkhbayar gave his verbal agreement that the license for a certain gold deposit near the Mongolia-China border would be readied after the election, and suggested that they commence "digging" from their side of the border. How come then-President Enkhbayar's letter to influential political and business figures in Australia and in the USA, naming his delegates for negotiation, included the head of his office, Bilegt, as the only Mongolian, plus four Chinese citizens?

Tumurtei iron ore deposit was owned 50% by a Chinese company, 25% by a Mongolian citizen, and 25% by Enkhbayar's wife's sister. Her share was hastily sold when  rumors started. An apartment located at the most prestigious Kutuzov Avenue in Moscow was purchased in the name of Enkhbayar's sibling and sold for almost USD1 million, also amidst rumors and speculations. Who purchased the USD4 million house for Enkhbayar's wife's sister and her husband, where they live unemployed in San Francisco? Chief of Customs Department in Selenge Aimag personally looked over the construction of a building complex in Enkhbayar's mother's name located on the bay of Lake Baikal. Whose money was that and where did it come from?

Now charges have been filed against Enkhbayar and he has been arrested. The investigation and his crimes stemmed long before from inside of Enkhbayar's faction at the old MPRP (now the MPP). Constantly under his mercy, with ever-increasing possibility of prosecution or jail time, it was impossible for those under Enkhbayar's auspices to carry on. Former customs chief Baatar[23] – is a prime example of that. Baatar obviously was corrupt, but the whole process was thoroughly organized by Enkhbayar. Next comes the Khurelsukh's[24]incident, and the case of Badamjunai[25]and Zandanshatar[26]. When visiting Korea, Enkhbayar asked his Korean counterpart for the records of them gambling taxpayers' money away at a Seoul casino. Even though the President of Korea agreed in the name of diplomatic courtesy,in a country bound by strict legal regulations and processes, only the copies their passports provided at the casino entrance were given to Enkhbayar. These were published numerous times on daily newspaper Zuunii Medee. However, the most interesting fact remains that Enkhbayar's wife travelled to Seoul to retrieve these documents in person.

These curious cases marked the beginning of a secret "servile war" against Enkhbayar. Still, entrapped deep in his web, no one could voice their resistance strongly except for Khurelsukh, Nyamdorj, and Bayar. Thanking and congratulating President Elbegdorj on Enkhbayar's arrest is their cheap ploy to re-direct public perception and demonstrate their innocence in this matter. Once Enkhbayar went on a hunger strike, it was out of fear from his wrath that they have organized a party meeting at night, producing a document which begged for mercy, and a more humane and kind approach towards Enkhbayar.

Left with nothing to lose, Ulaan, quite contrary to the meaning of his name in English "Red", was one of the first ones to go running to Enkhbayar unabashed. He embezzled a fortune from the state, and materials of his activities are kept with Enkhbayar. He bartered a copy of those documents to Baabar, who is now using them as a tool in his harassments and threats. Some of Ulaan's acts were solo, while some were the result of a team effort with Enkhbayar. One of them is the incident of USD3 million debt of Darkhan Metallurgical Plant. This plant was completed with Japanese assistance, and was taken over by Mongolians in 1989. However, a company, Monimpex, was contracted, and additional investments were made because the Mongolian side still could not operate the plant. Soon Monimpex declared bankruptcy, and the Japanese investment of 10 years -- USD3 million -- has disappeared along with the company. When the Japanese demanded back their investment, then-Minister of Finance Ulaan signed and sent an official letter stating that there were no legal foundations for Mongolian government to pay the sum. The Japanese then appealed to Darkhan city court and lost. The matter was finally settled when a contract was signed between the parties to repay the USD3 million with the products from the plant in the course of 25 years. The certificate of this unreliable debt was bought by Ulaan for USD 200 thousand. He, the Minister of Finance, then allocated the USD3 million debt to Japan in the annual State Budget of 2005, earning himself a USD 2.8 million bounty. No wonder only two options await him today; joining Enkhbayar or serving jail time.

Chuluunbat is also with Enkhbayar now. They share a long history of joint business affairs. When Chuluunbat was serving as the President of Mongolbank, he issued a letter of credit on USD200 million from the foreign reserves of Mongolia, undisclosed to anyone. It was followed by a lame explanation that Mongolians would be able to buy apartments by partaking in an all-round program called "Sufficient Livelihood by Salary" financed with the premiums he earned from importing vegetable oil from Malaysia to Saudi Arabia. The spectacle is remembered by many, when both then-President Enkhbayar and then-Prime Minister Enkhbold raced to participate in the ceremony to lay foundation of those salary-supported apartments for the sake of good PR.

Sometime later, Mongolbank's letter of credit melted away like a spring snow. Then it was purchased by a German individual from a bank in Holland. When he demanded to be paid his money, officials at Mongolbank expressed no knowledge of that matter, resulting in a court dispute. If poor ill-named Nyamdorj did not halt this matter by immediate closure of this letter of credit, Mongolia would have fallen into a USD200 million debt instead of a current USD22 million one. In response to this matter, Chuluunbat spent a hefty amount of money to organize Nyamdorj's dismissal from his position as the Speaker of Parliament. Matters of little consequence such as appealing to the Constitutional Court and others were achieved by some small figures who were not aware of the true nature of matter; Burmaa and Lkhagvajav. Many other frauds of Chuluunbat are known to Enkhbayar, so who else is left for him to seek refuge with?

Raash, Bat-Erdene, Batbayar[27], Munkh-Orgil, EnkhboldMiye, Otgonbayar[28], S. Batbold, and many others have escaped troubles by now. For instance, poor Batbayar had his hands in one of the current cases against Enkhbayar regarding the old hotel building, and is now indebted to Enkhbayar for 1 billion tugriks. Now he has nothing; no money, no Enkhbayar, and no party. In 2004, Enkhbayar himself declared that then-chief of the railway agency, Raash, keeps USD 3 million in-hand, in his safe box at home.

Batbold and Munkh-Orgil have invested millions of tugriks into Enkhbayar-owned TV9, with no return. However, they never complained because they were given more than enough incentives.  Many TV viewers saw how Enkhbayar called  former national wrestling champion and current Member of the Parliament Bat-Erdene on the night he was arrested. Our beloved champion of Mongolian national wrestling Bat-Erdene replied in his baritone voice "The number that you have dialed is not in use."

The primary advocate for Enkhbayar's tainted international businesses, John L. Thornton, is the main perpetrator of the campaign to politicize and hype Enkhbayar's case. A professor at Tsinghua University in Beijing, he is also a member of the International Advisory Council of the Chinese sovereign wealth fund China Investment Corporation. When he was serving as the President and Co-CEO of Goldman Sachs, Thornton visited Mongolia numerous times, and became quick friends with Enkhbayar. In 2008, Thornton and then-President Enkhbayar signed a Memorandum of Understanding to provide about million portable computers for national program "One child–One computer." However, the number of computers sent to Mongolia never reached this number. Interestingly, Enkhbayar's son chose a veteran Sachs employee as his bride.

Officials of this bank, who never delivered their promised computers for Mongolia's children, but produced a bride for Enkhbayar's son, are not eligible to oppose Mongolia's fight against corruption. There is a growing suspicion that, in fact, it was Enkhbayar's daughter-in-law, not his daughter who produced and broadcasted materials, spoiling Mongolia's reputation internationally. It is probable that Thornton is using this girl, who resigned her position at Sachs pledging to work for her family business, as Enkhbayar's puppet. Thornton spread vicious rumors worldwide for his "good pal", and provided mostly bogus information to influential figures in London, Washington D.C, and some international organizations. His partner Minton's close ties with Enkhbayar date back to when he was serving as US Ambassador to Mongolia. Minton provided an incorrect forecast of the 2009 election results to his superiors, assuring that Enkhbayar would once again be elected President. After returning to the States, he established an NGO under the name The Korea Society. When Minton tried to include Mongolia in the activities of his organization, he faced strong opposition from a better established organization The Asia Society. When President Elbegdorj paid an official visit to the United States, The Asia Society honored him with an award, further fuelling Minton's discontent.

Another great advocate for Enkhbayar has emerged from all the way across the pond, in the distant United States of America. Senator Dianne Feinstein, an elderly lady of almost 80 years of age. With her money and power she ranks in the top four influencers of current USA policy, and is a close friend of Secretary Clinton. Senator Feinstein is also the wife of Richard Blum, one of the top billionaires in America, and is the richest woman working in the US Senate. Daughter to a Russian Jew who fled to America during the October Revolution, she detests communism, was born and raised in San-Francisco, and represents California in Congress. 

Enkhbayar first met Mr. Blum and Senator Feinstein in 2002 in the States. In order to utilize the status and reputation of this influential billionaire, Enkhbayar asked Mr. Blum to become an Honorary Consul of Mongolia. The couple immediately warmed up to this young and energetic "democratic reformist," who "annihilated" communism in the very heart of Asia. In 2003, they visited Mongolia, where Enkhbayar himself made introductions of his country, and then-Deputy Foreign Minister Batbold took them on a helicopter tour around the country. The reason why Mr. Blum agreed to this offer was obviously not due to any monetary or tangible benefit. He simply liked the young "democratic reformist" he saw in Enkhbayar. Since then, they have become close family friends. The elderly couple loved Enkhbayar as their own son. Enkhbayar was not only a welcome guest at their home whenever he visited the States, but his daughter also stayed at their mansion during her stay in America. It displays a personal relationship of an almost sentimental level.

As soon as he was arrested, Enkhbayar authored a heartbreaking letter in English, describing himself as a repressed, political prisoner. This letter was sent in mass to numbers to foreign embassies, international organizations, renowned figures and others.   Of course, Blum and Feinstein were on the very top of this list. Feinstein took immediate measures to issue a personal statement, pressure the State Department to issue a statement, and halt plans for Secretary of State Clinton to visit Mongolia this summer. She even succeeded to recruit Britain's former Prime Minister Tony Blair and UN Secretary-General's involvement in this issue. Who cares if Enkhbayar is the prime suspect of several large-scale corruption cases, his "well-being" should top concerns of a whole nation! As soon Feinstein mentioned his "well-being," Enkhbayar tactfully declares a dry-strike, endangering his health on purpose. No one would believe that when he was  arrested Enkhbayar proudly announced that he would never declare a hunger strike, for this would only satisfy his enemies. But it's different now. He raised a huge havoc on the matter, and threatened doctors who suggested enforced medical action; his wife has played a main role in delivering those threats.

The ten-day strike would obviously leave a mark on his once-polished look. The plot was for Enkhbayar to send a photograph of his famished and rugged self to western media, who by Feinstein's orders should launch a "hate campaign" on Mongolia. By the words of an influential senator, American newspapers have unanimously declared how Mongolia fell back from her accomplishments in democracy. Enkhbayar's close buddy, former Ambassador to Mongolia, Minton, has played a leading role in this spectacle. Once a beaming icon of democracy, Mongolia is portrayed as having become a ghastly display of repression and violator of human rights in just a few days.

Feinstein and Blum don't know anyone from Mongolia except Enkhbayar and his family. Their perception of our country is based on Enkhbayar's words alone, and Enkhbayar-hosted tour in Mongolia. They don't know that Enkhbayar is the chairman of a communist party, which was registered in Guinness world record as the only political party in the world which was in power for the 86 years out of last 90 years. They don't know that when his original party changed its name to Mongolian People's Party, leaning towards a more social-democratic orientation, they met severe resistance from Enkhbayar, who later formed his own party under the old communist name of Mongolian People's Revolutionary Party.

They don't know the fact that during every election, Enkhbayar is assisted by Mongolian neo-Nazis. They don't know that, bizarrely in Ulaanbaatar, there are young people who worship Hitler, wear swastika adorned leather uniforms, and beat and blackmail foreigners for money. Perhaps, Feinstein and Blum are not aware of the fact that this was published several times on international news websites.

They probably don't know that Enkhbayar organized dozens of assemblies, repeatedly calling on the Mongolian people to launch a bloody revolution that would seize state powers by unconstitutional means. By percentage, Mongolia is the biggest victim of communist-led massacres along with Cambodia. They don't know that in late 1930's 30 thousand of Mongolia's 700 hundred thousand people were slaughtered by the name of enemy of revolution. Even more, they don't know that a pregnant woman, tagged as the enemy of revolution, was shot at that time, and that she was the governor of a province where Enkhbayar's mother lived. They are not aware of the fact that one of the main candidates who would compete in the parliamentary election on behalf of Enkhbayar's party is swearing an oath that says "In 1937, officers wearing this uniform cleaned our country of foreign enemies, and now I shall carry on their deed to sweep foreign looters from my country," clad in the uniform of Interior Ministry killers of the 1930's.

Perhaps, they don't know how Enkhbayar embezzled television equipment and machinery to establish his own mouthpiece, TV9. They don't know that he obtained the license to broadcast European soccer championship for several hundred thousand dollars, and is now in the process of purchasing two other television stations.

When Enkhbayar was at his heights as the leader of the opposition party, one of the leaders of Mongolian democracy, Zorig was assassinated. Feinstein never heard that a so-called suspect of this murder, a Mongolian, was kidnapped from USA, imprisoned for a year here and later discharged as innocent. She never heard how another suspect was kidnapped on then-Prime Minister Enkhbayar's orders from France through Germany, and was tortured during his imprisonment. It is for sure that Feinstein does not know how the suspect's lawyer was wrongfully convicted for disclosing "a state secret" and imprisoned. Feinstein does not know that the suspect died within a year from his release.  

Seized by corruption and bribes, Mongolia is now in agony, which now rivals the corruption levels experienced during our time of communist oppression.  International friends, in particular, Americans warn how this young democracy is slipping farther into oblivion due to corruption. We, Mongolians are also immensely troubled and ashamed of the fact that we are now one of the most corrupt nations in the world. Corruption is devouring our country, along with our democracy, our principles, and our pride.

When Enkhbayar was Prime Minister of Mongolia, U.S. Ambassador John Dinger specifically named Enkhbayar's cabinet as being overly-corrupt. Even though, not in line with diplomatic etiquette, Mongolians accepted his words as the well-intentioned warnings of a friend. Americans continuously express their support for Mongolia's democracy. But there is no such thing as a corrupt democracy, and there never should be one.

As of today, investigations of only four out of Enkhbayar's many instances of corruption are concluded by the prosecutor's office. These four cases account for over USD6 million. It is only the surface of crimes accounting to tens, or even hundreds of millions of USD. Is a political figure, who embezzled that kind of sum, left free in the name human rights in America?

The prosecution authority delivered notice to Enkhbayar ten times over a full year, requesting him to come for questioning. He never complied. What do you do in America under the same situation?

The arrest of Enkhbayar was clumsy and rude. But that is the current level of Mongolian police professionalism. You can also find a video of Enkhbayar, covering his ears with hands, and yelling expletives at the prosecutor who was reading his sentences. What do you do in America when something like that happens?

Big nation as it is, I assume that America has more prisoners than Mongolia, and consequently, more of them going on hunger strikes. However, I don't recall a single incident where a prisoner has died of a hunger strike in America. It is certain that the state enforces appropriate measures to prevent that.

As for Mongolia, in average 20 such incidents occur annually in prisons. And each of them ends with an enforced life-saving medical treatment. This is our law. It may seem crude to some, but it is our law, approved by our representatives. Even though Enkhbayar is claiming to be a political victim, in fact,he is a notorious figure who is suspected of severe crimes in violation of the Criminal Code of Mongolia. Perhaps lady Feinstein could not care about Mongolia's laws, and is only concerned with Enkhbayar's health. But the State of Mongolia has never threatened Enkhbayar's health or well-being. Indeed, the State of Mongolia, for the first time in her history, has commenced a substantial battle against corruption. Today, there are nearly a dozen influential political figures entangled in corruption crimes and awaiting court orders.

Enkhbayar claims that he is the victim of political oppression started by the ruling opposition party. No! It is rule of law that has been started. The state is responsible for punishing those who have violated the law and making sure that justice is served on behalf of the victims. In any nation, in any society theft is never a political matter.

Is former President of France Jacques Chirac a political victim? What about former Chancellor of Germany Helmut Kohl? What about Taiwan's ex-President Chen Shui-bian, or Gloria Arroyo, former President of the Philippines? Were they all oppressed and vilified?  

PS: This time, Spider web-6 is delivered to multiple newspapers concurrently, except for the Daily News. Because they delivered the previous ones to Baabar, who conceals and trades the materials, and advertises himself as the author. In his recently published book "100 influential figures of the last century," he not only included Friedland, but also celebrated him as Baron Robert, borrowing the name of a historic figure, who assisted Mongolia enormously in gaining her independence. It is probably true what people say about Baabar being paid by Friedland. Though seemingly a harsh criticizer of Enkhbayar, the two of them are connected. Baabar has delivered my previous article to Enkhbayar's home, and promised not to publish it.

By PhD.B.Ganbat.18 May, 2012

B.Ganbat is a columnist, specializing on investigating corruption cases. He has published numerous articles over the last decade, all of which exposed scandals concerning large-scale corruption and bribery.

[1]Nambar Enkhbayar, Chairman of the Mongolian People's Revolutionary Party, which single-handedly ruled over Mongolia from 1921-1990.Former Prime Minister, Parliament Speaker, and the Third President of Mongolia until 2009.Public nickname – Godfather of Corruption.

[2]Ulaan, current MP, orthodox planner, and twice Finance Minister, including one term in Enkhbayar's cabinet.

[3]Terbishdagva, current MP, an orthodox, former Ambassador to Germany during the abduction in France of a suspect in Zorig's assassination.

[4]Chuluunbat, current MP, two-times Governor of Mongol Bank

[5]Batbold, current PM

[6] Bat-Erdene, current MP, wrestling champion

[7]Enkhbold, current MP, former Mayor of Ulaanbaatar city, PM

[8]Munkh-Orgil, current MP, former Foreign Minister, Justice Minister and Chairman of the State Emergency Committee during the 1 July 2008 civil disturbances

[9]Tsengel, current MP, former Minister of Road and Infrastructure

[10] Rash, current MP, long-term General Director of Russo-Mongolian Joint Railway, former Minister

[11] Bayar, current MP, former PM during the 1 July 2008 civil disturbances

[12]Nyamdorj, current MP, three-times Minister of Justice

[13]Lundeejantsan, long-term MP, former Parliamentary Speaker

[14]Bagabandi, second President of Mongolia

[15]Baabar, well-known publicist and a historian

[16]Enkhsaikhan, former MP, PM, Chairman of a minor party split from DP

[17]Jargalsaikhan, former MP, and Minister involved in numerous shady deals

[18]Otgonbileg, died in a helicopter crash during his tenure as MP

[19]One of the three persons pardoned by President Clinton on his last day in office. At that time he was suspected of tax evasion, and was under investigation by US authorities. Clinton later revealed in his memoir that pardoning of Marcrich  was done on the personal request from Israeli Prime Minister.

[20]OyuTolgoi, the world's largest untapped copper and gold deposit in the southern part of Mongolia

[21]Tsagaan, one of three Mongolian members of OyuTolgoi Board

[22]TavanTolgoi, world's largest untapped deposit of coking coal

[23]Baatar, the only high ranking official of that was arrested and sentenced to jail in 2005.

[24]Khurelsukh, former MP, current Secretary of Mongolian People's Party

[25]Badamjunai, current MP, Minister of Food, Agriculture, and Light Industry

[26]Zandanshatar, current MP, Minister of Foreign Affairs and Trade

[27]Batbayar, MP, former Mayor of Ulaanbaatar

[28]Otgonbayar, current MP, Minister of Education, Culture, and Science

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