Monday, May 21, 2012

[CPSI NewsWire: CPS Securities' Jason Peterson Comments on the New Foreign Investment Regulation]

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

Follow CPSI NewsWire on Twitter, Facebook


Jason Peterson, CPS Securities Director, comments on the recently passed law on Foreign Investment Regulation

Jason Peterson: Mongolia and Investments in Mongolia on the ASX

May 21 --


Please see the clarification regarding the recent speculation in the market regarding the foreign ownership of assets within Mongolia.

We see this as positive, that the country is taking these initiatives and providing clarification towards foreign investment in the country, however the law still needs to be applied in a sensible manner.

Summarised (from late last week):

The Parliament of Mongolia last night approved a law that regulates foreign direct investment into a number of key sectors of strategic importance which includes mineral resources. Unless vetoed by the President (which is unlikely), the Law will have immediate effect.

This law does not limit foreign direct investment. It does set up a process of review and approvals for significant investments into those industries of strategic importance to the country. The approvals regime is based on the following levels of investment:

      All foreign direct investments in excess of 5% in an entity operating in a sector of strategic importance must register with the Foreign Investment Agency of Mongolia ("FIA").

      Foreign direct investments in excess of 33% in an entity operating in a sector of strategic importance must receive Government of Mongolia approval [Comment: FIRB over 15% is required in Australia]

      Foreign direct investments in excess of 49% in an entity operating in a sector of strategic importance and in excess of 100bn MNT (approximately AUD$75m), requires approval from the Mongolian Parliament. [Comment: FIRB over 15% is required in Australia]

      Foreign direct investments made by a company with state ownership will require Government of Mongolia approval.

This law does not apply retrospectively.

The enacting of this foreign investment law now provides legislative certainty surrounding future foreign direct investments into Mongolia and in particular into its rapidly growing resources industry. The regime is not dissimilar to regimes enacted in other resource rich jurisdictions such as Australia and Canada.

The country will still be viewed negatively from an international investment perspective until the elections are held on June 28th this year. Once the elections are held, we find out who will govern the country over the next four years, we expect, from July the 1st, it will be business as usual in Mongolia and investment stability should return.

On the back of this, Mongolian stocks listed on the ASX will probably be a high risk speculative buy over the next two to three weeks with potential substantial returns to be made as the status quo is returned. In addition, the next few weeks could see substantial tax loss selling within the sector, leading to additional price pressure within the sector.

Our preferred stocks within the Mongolian sector are Haranga Resources (ASX: HAR) and Voyager Resources (ASX: VOR) both of which have come under heavy selling in recent weeks, as well as the recently listed Eumeralla resources (ASX: EUM) as it further develops it Tin and Tungsten projects.

Further information on these stocks can be provided upon request.

If you have any questions, please do not hesitate to ask.



Disclosure: I hold shares and options in HAR, VOR and EUM, as well as other Mongolian based stocks.

Link to CPS Securities


Haranga: Initial Commentary on the New Mongolian Foreign Investment Bill

May 21, Haranga Resources Limited (ASX:HAR) --

·         A new Foreign Investment Law for Mongolia is likely to come into effect in the next week.

·         In future, major investments in Mongolian resources will require Government review.

·         Primarily aimed at controlling investments by foreign state owned enterprises.

·         The Law is not retroactive, therefore Haranga Resources' project ownership is unaffected.

A Foreign Investment Law bill was approved by the Parliament of Mongolia on Thursday, 17 May 2012 and, unless vetoed by the President, it will become law ten days from that date.

The primary goal of this Law is to  give the Government of Mongolia the right to either approve or reject certain transactions involving either Mongolia located assets, or entities operating in Mongolia, in certain "strategic sectors", including mineral resources.

It is the Company's current understanding that, from the date the Law comes into effect, any investment that involves a foreign owned or foreign controlled entity acquiring over 49% of an asset or a business of a value

over MNT100 billion (approximately  US$75 million) in these strategic sectors will require approval by the  Parliament of Mongolia. The Law is more stringent in cases of potential  investments by foreign state owned enterprises (SOEs), where any investment by a foreign state controlled entity in a strategic sector will now require Government approval.

Exactly how these thresholds will be triggered, and how the review procedures will be implemented in practice, remain to be seen, however the Law is not retroactive and therefore Haranga Resources' ownership of its Mongolian projects is not threatened by this Law and the Company will not have to apply for permission from the Government to maintain its majority stake in the Selenge project, nor its other three Mongolian iron ore projects.

Haranga Resources fully supports the right of  the Mongolian government to implement foreign investment regulation and the Company notes that,  provided this new Law is applied sensibly, the effect of this new legislation will be not dissimilar to the foreign investment review procedures that exist in many other jurisdictions, including Australia.

Haranga Resources and its legal advisors will continue to review the details of this legislation and will update the market should aspects of this legislation change or otherwise be determined to impact the value of Haranga Resources' Mongolian projects.

Link to release


Haranga Chairman Further Increases Stake On Market

May 21 (Mogi) Haranga Resources (ASX:HAR) Chairman Mr. Matthew Wood bought more HAR shares on market last week, acquiring 363,041 shares for A$125,005.66, translating to an average purchase price of 34.43c per share.

Link to notice


Voyager: Initial Commentary on the New Mongolian Foreign Investment Legislation

May 21, Voyager Resources Limited (ASX:VOR) --

·         New Foreign Investment  Legislation has been passed by the Mongolian Parliament and is likely to come into effect in the coming weeks.

·         Larger investments in Mongolian mineral  resources will  now require Government review and approval. Similarities to the Foreign Investment Review Board (FIRB) in Australia.

·         The legislation is primarily aimed at controlling investments by foreign state owned enterprises.

·         The legislation is not retrospective.

·         Voyager Resources project ownership remains unaffected and the Company maintains its majority ownership and control of its assets in Mongolia.

The Parliament of Mongolia approved a Foreign Investment Law bill on Thursday, 17 May 2012 and, unless vetoed by the President, it will become law ten days from that date.

The primary goal of the legislation is to provide the Government of Mongolia with the right to either approve or reject certain transactions involving either Mongolia located assets, or entities operating in Mongolia, in certain "strategic sectors", including mineral resources and is not dissimilar to Australia's FIRB or Canada's FIRA.  Both these agencies were established to ensure that  any  foreign acquisition of businesses was beneficial to the home country.

It is the Company's current understanding that from the date the legislation comes into effect any investment that involves a foreign owned or foreign controlled entity acquiring over 49% of an asset or a business of a value over MNT100 billion (approximately US$75 million) in these strategic sectors will require approval. The legislation is more stringent in cases of potential investments by foreign state owned enterprises (SOEs).

Exactly how these thresholds will be triggered, and how the review procedures will be implemented in practice, remains to be seen, however the Law is not retrospective.  Voyager Resources maintains its majority ownership and control of its assets in Mongolia.

Voyager Resources fully supports the right of the Mongolian Government to implement foreign investment regulation and the Company notes that, provided this new legislation is  applied sensibly, the effect  of this new legislation  will be not dissimilar to the foreign investment review procedures that exist in many other jurisdictions, including Australia. Voyager Resources and its legal advisors will continue to  consider  the  impact of this legislation and will update the market once the application of the legislation becomes more certain.

Voyager Resources flagship project at KM continues in earnest.  To date the Company has completed 213 RC drill holes, 59 diamond core drill holes and 31 diamond tailed RC holes on the project.  Assays on these drilled holes have returned some of the best copper mineralisation reported in Mongolia outside of the giant Oyu Tolgoi deposits.

The most recent drilling was primarily focused on lateral and shallow extents to the mineralised hydrothermal breccias, identified by the Company, in order to support the completion of its maiden JORC Resource.

The initial metallurgy test work on this near surface mineralogy is nearing its conclusion. Complete flotation testing and further mineralogy should be completed in the coming months.

An extensive and detailed porphyry targeting review also nears completion.  This review focuses on extensive geological mapping of the KM project, including lithology, alterations and structures and will provide a primary list of deep targets allowing the Company to target better the porphyry or porphyry stocks.

Link to release


Origo: Director/PDMR Shareholding 

May 21 -- Origo Partners Plc ("the Company") received notification that on 18 May 2012, Mr Chris Rynning, CEO of the Company, purchased 204,032 ordinary shares of par value £0.0001each ("Ordinary Shares") at an average price of 23.92 pence per share

Following this share purchase, Mr Rynning's beneficial interest in the Company is 14,570,040 Ordinary Shares, representing 4.05 per cent of the Company's total issued share capital.

Link to release


МОНГОЛЫН УУЛ УУРХАЙН НЭГДСЭН ЛАВЛАХ-2013 номонд  5 сарын 31-нээс өмнө бүртгүүлж 10 хувийн  хөнгөлөлт эдлэн Мэдээлэл, сурталчилгаагаа байршуулахад 10 ХОНОГ ҮЛДЛЭЭ.

Link to Mongolian Mining Directory



21 May 2012 (BDSec) – Share prices declined at the opening session of the week as six shares fell for every gainer on the Mongolian Stock Exchange. BDS index declined 0.81% to 4,480.92 points while MSE Top 20 was down 0.64% to finish at 20,271.70 points.

Gutal (GTL) slid more than 11% to close at MNT 4,000. Khukh Gan (HGN) came back to MNT 194, its Thursday's close. Other big fallers were Zoos Goyol (-5.52%) and Bayangol Hotel (-3.66%). Cashmere manufacturer Gobi (GOV) rose 2.33% to close at MNT 4,400.

Local News in Brief

MPs approved draft laws on ratifying a Mongolia-Germany intergovernmental agreement on the financial cooperation, a credit and project agreement for the Energy Efficiency-2 project, and a collateral additional credit agreement for a project of developing the regional transportation infrastructure with an aim to improve the food supply of Ulaanbaatar city, which were established between the government of Mongolia and the Deutsche Bank for Reconstruction and Credit.

Link to article



Ulaanbaatar, Mongolia, May 21 /MONTSAME/ Five stock trades were held at Mongolia's Stock Exchange on May 14-18. In overall, 810.5 thousand shares were sold of 62 joint-stock companies totaling MNT 389.2 million.

Five governmental bonds were sold with MNT 525.0 thousand by the second market. Index TOP-20 was 20402.71 points increasing 74.07 units or 0.36% against the week earlier. The total market capitalization was set at MNT one trillion 920.6 billion decreasing MNT 5.7 billion or 0.29%.

Shares of "Altain zam" /72.0%/, "Ereen tsav" /20.0%/, and "Sor" /18.7%/ increased, but shares of "Mongeo" /15.0%/, "Khereglee impex" /14.9%/, and "UB BUK" /15.1%/ decreased.

28 stocks closed higher, 22 shares declined and 12 shares remained unchanged.

Shares of "E trans logistics" /326.5 thousand units/, "Remikon" /239.4 thousand units/ and "Khokh gan" /76.8 thousand units/ were the most actively traded in terms of trading volume and in terms of trading value--"Mongolia development resources" (MNT 55.3 million), "Remikon" (MNT 45.9 million), and "E trans logistics" (41.7 million).

Link to Montsame


Moody's downgrades the ratings of four Mongolia banks (Golomt, Khan, TDB, XacBank) to B1

Hong Kong, May 21, 2012 (Moody's) -- Moody's Investors Service has downgraded the foreign currency long-term senior unsecured debt ratings of four Mongolian banks to B1 from Ba3.

The rating action follows the revision of their standalone bank financial strength ratings (BFSR) to E+ from D-, which now map to a baseline credit assessment (BCA) of b1 on the long-term scale.

The four banks are: Golomt Bank, Khan Bank, Trade and Development Bank of Mongolia, and XacBank

This 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.

The ratings outlook is stable.

This rating action concludes the review for downgrade on the four Mongolian banks that was initiated on 26 March 2012.


The rating action is driven by Moody's revised assessment of the linkage between the credit profiles of sovereigns and financial institutions globally, which is discussed in the rating implementation guidance "How Sovereign Credit Quality May Affect Other Ratings" published on 13 February 2012, and further detailed in the special comment "Banks and Sovereigns: Risk Correlations Constrain Standalone Bank Credit Assessments" published on 30 April 2012.

As per the guidance, the downward revision of the four Mongolian banks' standalone ratings reflects our view that a bank's rating ultimately cannot be completely insulated from the credit quality of the government's creditworthiness, taking into account (i) the extent to which their businesses depend on the domestic macroeconomic and financial environment; (ii) the degree of reliance on market-based confidence-sensitive funding; (iii) their direct or indirect exposures to domestic sovereign debt, compared with their capital bases; and (iv) foreign ownership which can provide a critical level of offshore business or substantial permanent funding to the subsidiary.

We believe that the standalone ratings of the four Mongolian banks should be positioned in line with the rating of Mongolian government to capture the appropriate credit risks of the banks given relatively low level of cross-border diversification in their operations.

In Moody's view, the creditworthiness of the sovereign is highly correlated to the banks'. As such, this does not justify rating the banks at one-notch above their sovereign rating.

Mongolia's economy is transforming because of the rapid development of its natural resources industries. While this is having a strongly positive effect on the economy's growth rates, it does create the risk of an overheating of the economy, inflationary pressure, and, ultimately, the risk that boom could be followed by bust.

These risks could affect the banks as well as the sovereign's credit profile, since it is likely that the asset quality and liquidity of banks would be significantly impacted in such a downturn, particularly because of the rapid growth in their lending in the past two years.

On the other hand, Moody's notes that these banks have relatively low direct exposures to the government excluding loans to public sector entities, especially XacBank, Khan Bank, and Golomt Bank. Furthermore, the banks have a low reliance on wholesale funding. These factors may mitigate the correlation between the sovereign credit profile and those of the banks. However, in our view, these considerations are not sufficient to merit rating the banks above the sovereign. Deposits have proved to be quite confidence sensitive in Mongolia, meaning that the banks' liquidity could erode rapidly in a sovereign credit crisis.

We assign a B1 to the long-term local currency deposit ratings as well as issuer ratings of all four banks. The banks' foreign currency ratings are constrained by Mongolia's B1 foreign currency bond rating and B2 foreign currency deposit ceiling.


Khan Bank -- Incorporating the downgrade of the bank's standalone rating discussed above, the new ratings of Khan Bank are: Bank Financial Strength of E+; local currency bank deposits rating of B1; issuer rating of B1; and local currency/ foreign currency long-term senior unsecured MTN/ Subordinate MTN of (P)B1/(P)B2. All other ratings were unaffected: foreign currency bank deposits rating of B2; and local currency/ foreign currency short-term deposits rating of NP.

Golomt Bank -- Incorporating the downgrade of the bank's standalone rating discussed above, the new ratings of Golomt Bank are: Bank Financial Strength of E+; local currency bank deposits rating of B1; Issuer rating of B1; and foreign currency long-term senior unsecured debt of B1. All other ratings were unaffected: foreign currency bank deposits rating of B2.

Trade Development Bank of Mongolia -- Incorporating the downgrade of the bank's standalone rating discussed above, the new ratings of Trade Development Bank of Mongolia are: Bank Financial Strength of E+; local currency bank deposits rating of B1; Issuer rating of B1; foreign currency long-term senior unsecured debt / subordinate debt of B1/B2; and foreign currency long-term senior unsecured MTN/subordinate MTN of (P)B1/(P)B2. All other ratings were unaffected: foreign currency bank deposits rating of B2; local currency/ foreign currency short-term deposits rating of NP; local currency/ foreign currency short-term issuer rating of NP; and other short-term rating of (P)NP.

XacBank -- Incorporating the downgrade of the bank's standalone rating discussed above, the new ratings of XacBank are: Bank Financial Strength of E+; local currency bank deposits rating of B1; issuer rating of B1; foreign currency long-term senior unsecured debt of B1; and foreign currency long-term senior unsecured MTN of (P)B1. All other ratings were unaffected: foreign currency bank deposits rating of B2; local currency/ foreign currency short-term deposit rating of NP; local currency/ foreign currency short-term issuer rating of NP; and Euro MTN program of (P)NP.

The methodologies used in these ratings were Bank Financial Strength Ratings: Global Methodology published in February 2007, and Incorporation of Joint-Default Analysis into Moody's Bank Ratings: Global Methodology published in March 2012. Please see the Credit Policy page on for a copy of these methodologies.


Link to release


The court hearing of N.Enkhbayar's case scheduled on May 24

May 21 ( The court hearing of ex-president N.Enkhbayar's case to dated on Thursday, on May 24, 2012. The court hearing will take place at the Sukhbaatar District court.

As informed official from Sukhbaatar District court judge asked G.Bayasgalan, head of 2th hospital, where N.Enkhbayar continuing treatment after 10 days hunger strike to provide an opportunity to announce court resolution. On Monday (on May 21) we'll deliver court resolution to the N.Enkhbayar said official.

Link to article


Mongolia to prioritize renewables to meet energy needs

May 21 (EcoSeed) Mongolia has announced that it has started developing its renewable energy industry.

According to Mongolian energy minister D. Zorigt, the development of the renewable energy industry has become the priority of the country's energy sector.

The energy minister made the announcement following the Mongolian Renewable Energy 2012 International Conference held Friday.

The conference brought together over 100 specialists, company representatives, government and international organization officials, where they discussed the country's renewable energy future.

At present, the country's electricity consumption is growing between 8 to 10 percent annually. Mr. D. Zorigt aims to have renewable energy provide 20-25% of Mongolia's energy needs by 2020.

"Mongolia is home to enormous renewable energy resources – wind, solar, water, geothermal – and Mongolia's ecological and climatic conditions are well befitting to the effective use of these resources," he added.

B.Byambasaikhan, chief executive officer of Mongolian renewable energy company Newcom Group, said Mongolia boasts abundant wind and solar power resources, but the development of renewable energy industry faces difficulties in technology and investment fields.

The country's wind energy potential could reach up to 2.55 trillion kilowatt-hours per year, according to research from The National Renewable Energy Centre of Mongolia.

Mongolia's first wind farm, the currently under construction Salkhit Wind Farm, is being developed by Newcom and the United States' General Electric Company. It will be providing clean energy for Ulan Bator, which is 70 kilometers away from the farm.

Link to article


Mongolia's ties with NATO

May 21 (China Daily) Close links between Mongolia and NATO are a step forward for Mongolia to implement its "third neighbor" policy of building ties with partners other than neighboring Russia and China, analysts said.

The links also came amid the strategic shift of NATO and the United States toward the Asia-Pacific, analysts said.

Mongolia attended the 2012 NATO summit in Chicago on Sunday, with the Individual Partnership and Cooperation Program status for the first time.

In March, Mongolia and NATO signed their first bilateral cooperation program under NATO's new policy of developing more flexible partnerships with countries that engages significantly with international security affairs. Under the program, Mongolia will cooperate with NATO in security, disaster prevention and personnel training and exchange.

Since the Cold War ended, Mongolia has been focusing on strengthening cooperation with Western countries and major international bodies, under the "third neighbor" policy to counterbalance the pressure of lying between two neighboring powers, China and Russia, said Zhang Xiaoming, a professor at the School of International Studies with Peking University.

The most-prominent third neighbors have been the US, the European Union, Canada, Japan and South Korea, Julian Dierkes, an Asian studies expert from the University of British Columbia, was quoted by East Asia Forum as saying.

NATO could help Washington accelerate its shifting strategic emphasis to the Asia-Pacific by growing toward the East, said Zhai Dequan, deputy secretary-general of the China Arms Control and Disarmament Association.

Link to article


3D-P Completes Third Successful 802.11n Wireless Network Deployment in Mongolia

05/12/2012 (press release: KungFuzos)  // Calgary, Alberta, Canada //

3D-P , the leading resource for technologically-advanced onboard open-sourced computing platforms and wireless networks, announced today the successful deployment of a 802.11n wireless network in a remote mine location in Mongolia. It is 3D-P's third successful deployment in as many months.

"This is of great significance," reported Sean McClary, 3D-P's Vice President of Global Sales and Marketing. "Mines have been eagerly awaiting a wireless network that could provide the reliability of 99% uptime. We've provided not only that but improved through-put that was unattainable in remote wireless mining environments just two years ago."

About 3D-P

Since 1996, 3D-P has brought customer-driven solutions and world-class technologies to mining and natural resource industries. 3D-P products increase productivity and decrease costs through the implementation of technology that is proven, reliable and cost effective.

3D-P's team of experts includes Mining  Engineers, Electrical Engineers, Telecommunications Engineers, Consultants and Software Engineers that have decades of experience developing advanced technology systems. They bring that experience to work every day solving mobile application and wireless network challenges. Visit online to learn more

Link to article


Despite Legal Challenge, Tyrannosaur Sells for $1 million

NEW YORK, May 20 (LiveScience) — A nearly complete tyrannosaur skeleton has sold for just over $1 million, in spite of a call to halt its auction because the fossils may have been taken illegally from Mongolia.

During an auction this afternoon (May 20), Heritage Auctions sold the Tyrannosaurus bataar specimen to an anonymous bidder on the condition that the sale receive court approval.

Opponents did not want the sale to go forward under any condition. A temporary restraining order filed in the name of the Mongolian president Elbegdorj Tsakhia sought to prevent the sale of the skeleton. The court documents contend that the specimen originated in Mongolia, and that the export of fossils excavated in Mongolia is a criminal offense under the country's law.

Under the terms of the sale, the specimen will not be delivered to the buyer until the sale receives court approval, according to Gregory Rohan, president of Heritage Auctions. [Up For Auction: A Natural History Gallery]

Attorney Robert Painter, who represents the Mongolian president, attempted to stop the sale when the tyrannosaur's turn came toward the end of today's natural history auction. Painter said he would continue pursuing the case and attempt to hold Heritage Auctions in contempt of court for going forward in spite of the temporary restraining order.

During the auction, a handful of Mongolians protested from the sidewalk nearby, holding photos of the specimen and a banner reading "It's a national treasure of Mongolia return our stolen treasure."

"We want this dinosaur to go back to Mongolia where it belongs, that is the sole purpose of this," said Bolorsetseg Minjin, a Mongolian paleontologist and director of the Institute for the Study of Mongolian Dinosaurs, who was among those on the sidewalk.

In response to concerns about the provenance of specimen, a species that is an Asian relative to the North American Tyrannosaurus rex, Heritage Auctions released a statement on Friday saying the specimen entered the United States legally, and that "the consignors warranted in writing to Heritage that they hold clear title to the fossils."

Heritage Auctions has not identified the seller or the buyer, citing a need to protect confidentiality.

"Somebody doesn't put something like this in a major auction that is broadcast and promoted worldwide if they have got something to hide. If there is a title problem, you go and sell it secretly to someone in a backroom for a suit case full of cash," Rohan said. "That is something we have nothing to do with."

Paleontologist Mark Norell from the American Museum of Natural History has supported the Mongolian case, saying that looting of fossils is an increasing problem for the country.

The 8-feet (2.4-meters) tall and 24-feet (7.3-meters) long specimen sold for $1,052,500. It was one of many items up for auction.

Link to article

Link to press release from Heritage Auctions, May 20


Dinosaur skeleton fetches $1.05 million at disputed U.S. auction – Reuters, May 21


Part 1 of 4: Mineral-Rich Mongolia Rapidly Becoming 'Minegolia'

May 21 (NPR) 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.

First of four parts

May 21 (NPR) What country had the world's fastest-growing economy last year?

If you guessed China or India, you'd be wrong.

In fact, it's Mongolia: Its economy grew at more than 17 percent in 2011, according to estimates. That's nearly twice as fast as China's.

The reason — in a word — is mining.

Mongolia is rich in copper, coal and gold, and it's in the midst of a mineral boom. This marks a profound change for a country where two out of every five people make their living herding livestock. Extractive industry has become so pervasive, some Mongolians now refer to their homeland as "Minegolia."

For the poor, landlocked nation of fewer than 3 million people, mining represents a remarkable opportunity, but one that's also loaded with risks.

Doubling GDP In A Decade

Much of the focus these days is on Oyu Tolgoi, a mega-mine in Mongolia's South Gobi province, about 50 miles north of the Chinese border.

The mine — owned by international mining giant Rio Tinto, Canada's Ivanhoe Mines and the Mongolian government — is scheduled to produce its first copper ore in June and grow dramatically over the next five years.

Cameron McCrae, Oyu Tolgoi's Australian chief executive, estimates that the mine will be the world's third-largest copper and gold mine.

The mine is playing a substantial economic role even before it's operational, McCrae notes.

"At the moment, during construction, we probably make up 30 percent of the GDP of the country," he says.

Tuvshintugs Batdelger, who runs an economic think tank at the National University of Mongolia, says mining is helping to drive the economy of this Central Asian nation at an incredible pace.

"In the coming 10 years, average GDP growth will be 12 percent," he says. Even when you factor in inflation, "GDP in real terms more than doubles in 10 years' time."

Opportunity In The Gobi

Mining's impacts are visible throughout much of Mongolia, which is wedged between China and Russia and is nearly the size of Alaska. Hummers roll past the Louis Vuitton store and columned Soviet facades in Ulan Bator, the capital. Thousands of young Mongolians have moved to the middle of the Gobi to work at Oyu Tolgoi, which means "Turquoise Hill" in Mongolian, a name that's derived from the color copper turns when exposed to oxygen.

The mining camp, a mix of prefab housing andgers, or yurts, feels like a cross between a boomtown and a college fraternity.

The Mongolian workers are mostly in their 20s. At a recent birthday celebration, they sing Mongolian pop songs at the camp bar.

Solongo Namjil is a self-described country girl from the Mongolian steppe. The 22-year-old came to Oyu Tolgoi six months ago to work as a clerk and sees the mine as a crucial opportunity for her country.

"Every Mongolian here is doing their best for this project, which is enormous to Mongolia's future," she says between sips of beer. "We all understand the significance of the project. We do hope that every Mongolian can benefit."

But Solongo — Mongolians go by their first names — worries about mining's broader impact, particularly in South Gobi province, and on the thousands of herders who live there. Many are struggling with water-supply issues, and the mines need huge amounts to operate.

"I'm really concerned about that," she says, "that there won't be enough water for our children and children's children."

Avoiding 'Dutch Disease'

Building an economy on minerals presents other problems as well. For one thing, the economy becomes dependent on commodity prices that fluctuate. When the price of copper crashed in late 2008 during the global financial crisis, Mongolia's government had to call in the International Monetary Fund for help.

When prices for natural resources are high, they can cause other problems and strangle important domestic industries. Heavy demand drives up the value of a country's currency, which makes its exports more expensive and harder to sell.

Rogier van den Brink of the World Bank says that's what happened after the Netherlands discovered huge natural gas reserves in late 1959. The syndrome became known as "Dutch Disease." Van den Brink, who is Dutch himself, remembers the damage.

"As a boy growing up in Holland, the impact of this was very stark to me," he says. "Sectors of the economy that we long had pride in, like the shipbuilding industry, we had to close them down."

Today, van den Brink is the World Bank's lead economist in the East Asia and Pacific region. He has worked closely with the Mongolian government to enact a law to enforce government savings and control spending and borrowing so it might avoid what happened in the Netherlands.

Threat To Traditional Industry

Landlocked Mongolia doesn't build ships, but it has other businesses that the mining boom could hurt. The Gobi cashmere company in Ulan Bator is already feeling the side effects. The firm turns raw cashmere from Mongolian goats into sweaters, jackets and shawls, and exports them to more than 40 countries.

Mongolia's new mineral wealth drove inflation to more than 12 percent last year, forcing Gobi to raise workers' wages by one-third. Naranbaatar Davva, the company's 30-year-old chief operating officer, says raw material prices are up, too.

"Three years ago, we used to buy 3 kilograms of raw cashmere for $20," he says. "Today, this figure is $60."

Higher prices are good for Mongolian herders, but they cut into Gobi's profits. Naranbaatar says a special government policy is also undermining herders' incentive to work. This year — an election year — the government is giving citizens up to $770 each in one-time cash payments. It's essentially a mining dividend and, for many Mongolians, a lot of money.

"Livestock herding is almost a 16-hour-a-day job. It's a hard job, so you don't see many young herders anymore," he says. "Plus, the government gives out free cash."

Naranbaatar says mining brings many benefits to Mongolia. He just hopes people don't lose sight of an old, reliable industry like his.

"Mining resources are not renewable. Depending on the reserves, it may last 20, 50 or 100 years," he says. "If we use the right policies and preserve our nomadic herding traditions, many people will be employed in the Mongolian cashmere industry for hundreds and thousands of years."

Question Of Distributing The Wealth

Back at the bar at Oyu Tolgoi, it's closing time. Workers pour outside and continue to drink beneath street lights.

Many Mongolians worry that mineral companies and politicians will be the greatest beneficiaries of the mining boom. Solongo, the clerk, hopes some of her nation's new riches are used to improve the hard lives many Mongolians face.

"There is lots of poverty in Mongolia, almost 40 percent, which is unbelievable with this natural resource," she says. "We should find the right way to distribute the benefit of this resource to everyone. They deserve it."

Link to article



Ulaanbaatar, Mongolia, May 21 /MONTSAME/ By his decree, Mongolia's President Ts.Elbegdorj has appointed several judges.

On May 18, T.Davaasuren was appointed the General judge and judge of court of Arkhangai aimag; G.Bolormaa--the General judge and judge of Dornogobi aimag; Ch.Enkhtur--the General judge of an inter-soum second court of Zavkhan aimag; Ch.Oyungerel as a judge of inter-soum court of Sukhbaatar aimag; N.Tuya--the judge of court of Khovd aimag; T.Bolormaa--the General judge of an inter-soum second court of Khentii aimag, and others.

D.Tsogtsaikhan has been re-elected as the General judge of court of Chingeltei district of Ulaanbaatar, L.Byambaa has been discharged from a post of a judge of Supreme court, and D.Alimaa from a position of a judge of court of Khovd aimag due taking retirement.

Congratulating these judges, the Mongolian leader has obliged them to prioritize human rights in the their work and handed over certificates of judge.

Link to Montsame



Ulaanbaatar, Mongolia, May 21 /MONTSAME/ Last Saturday, a construction started to connect the 9th and 10th khoroo (the smallest administrative unit in the capital city) and the 7th micro-district to the centralized heating system.

It is one of the step-by-step works implemented by the government for creating a convenient environment for the city's people and for erecting apartments in ger (national dwelling) areas.

At the opening, S.Batbold PM said this work will result in reducing air pollution. He obliged the "Ulaanbaatar dulaan" executor company and other related organizations to complete the work in time with high quality.

It is supposed that #39 secondary school in Chingeltei district, the #124 kindergarten, a new sport complex to be erected soon, buildings of entities, the 7th micro-district, and some apartments will be connected to the centralized heating system, and that some 200 heating furnaces will be of no use anymore.

With a 3.1 billion togrog from the "Fresh air" fund, the construction will be completed in September this year.

Link to Montsame



Kyokutenho oldest to win 1st sumo title

May 21 (Daily Yomiuri) No. 7 maegashira Kyokutenho clinched his first championship by beating No. 4 Tochiozan in a playoff at the Summer Grand Sumo Tournament at Tokyo's Ryogoku Kokugikan on Sunday.

The Mongolia-born Kyokutenho became the oldest wrestler to win his first sumo title at 37 years and 8 months. It was also the first time in 11 years a maegashira wrestler has won a tournament since Kotomitsuki took the title at the Autumn Grand Sumo Tournament in 2001.

Kyokutenho finished the 15-day tournament at 12-3 after a victory over sekiwake Goeido earlier in the day, and entered the playoff against Tochiozan, who won against ozeki Kotooshu by forfeit.

It took 121 tournaments for Kyokutenho to win a title--he appeared in his first match at the spring sumo tournament in 1992. Kyokutenho became a naturalized Japanese citizen in 2005.

The championship makes him the fourth Mongolia-born wrestler and the 10th foreign-born wrestler to win.

Ozeki Kisenosato (11-4) failed to qualify for the playoff after being beaten by fellow ozeki Baruto.

Yokozuna Hakuho suffered his fifth loss, falling to ozeki Harumafuji.

Newly promoted ozeki Kakuryu ended at 8-7 after a loss to ozeki Kotoshogiku.

Link to article



"Mogi" Munkhdul Badral

Senior Client Manager / Executive Director

CPS International LLC

Telephone/Fax: +976-11-321326

Mobile: +976-99996779


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


Suite 1213 · Level 12 · 2 Sukhbaatar Square

Sukhbaatar District 8 · Ulaanbaatar 14200 · Mongolia


CPS International is a marketing arm of CPS Securities in Mongolia. CPS Securities is a Perth, Western Australia based AFSLicense Holder. To trade ASX and international stocks, feel free to contact me at or +976-99996779.



CPS Securities, its directors and employees advise that they may hold securities, may have an interest in and/or earn brokerage and other benefits or advantages, either directly or indirectly from client transactions mentioned in correspondence from CPS International.

CPS International advise this email contains general information only and does not include advice. In preparing this communication, CPS International did not take into account the investment objectives, financial situation and particular needs of any person. As with any speculative mining company there are significant risks.



No comments:

Post a Comment