Wednesday, June 6, 2012

[CPSI NewsWire: Mongolia Takes Certain Territories Under State Reserve For 5 Years]

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

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Issuance of Special licenses Prohibited in 30% of Mongolian Territory

June 6 (UB Post) The Ministry for the Mineral Resources has initiated the issue of taking areas that cover the territory of 326 soums of 21 provinces into a state reserve and has submitted this to Parliament.

Parliament decided during the meeting that the issuance of special licenses of the mineral exploitation will be prohibited in those areas taken into the state reserves, which comprises 30 percent of the total territory of Mongolia. According to the law on minerals, lands that are to serve as a platform for geological studies and research works will be funded by the state budget.

Minister for the Minerals and Energy, D.Zorigt, spoke to Unuudur newspaper regarding the issue of minerals and special licenses.

-Will taking some areas into a special reserve mean that special licenses for mineral exploration won't be issued in those territories?

-By taking some territories into the state reserve, the issuance of new special licenses of the mineral exploitation in Mongolian territory will be halted for 5 years. In other words, special licenses won't be issued on the decision of the head of one small agency in the future. The Ministry for the Minerals and Energy took certain measures to regulate special licenses on mining exploration. The total percent of Mongolia's territory owned by special licenses was 44.5 percent and has been lowered down to 14.2 percent.

-Does this mean mineral exploitation in the state reserved areas will be made only upon the decision of the government?

-Special licenses won't be issued in the state reserved territories and mineral exploitation in those areas will be prohibited. Currently, special licenses have been allotted for 14% of the total territory of Mongolia, and approximately 20% of land that is eligible for special licenses is being submitted to the state reserve. This 20% of land is purposed for running geological studies and research works funded with the state budget, whereas around 50% of the total territory of Mongolia is now included in the state reserve.

Thus, the granting of new special licenses is being halted for another five years. In the future, if a field is to be withdrawn from the reserve concluding geological studies, regulations have now converted to the government granting permission after being reflected in the annual line of activity and discussed with the Parliament.

Link to article


First Mongolian Investment Holdings Ltd Investor Update 

June 5, GoConnect Limited (ASX:GCN) --

First Mongolian Investment Holdings Ltd ("FM") advises that recent changes to Mongolian foreign investment legislation governing  "strategic industries" in Mongolia including mining, finance, media, and telecommunication, have created uncertainty in regards to the company's manganese exploration tenement in Mongolia. Accordingly, FM has expedited the restructuring of its mining portfolio and is finalising a strategic partnership agreement with an Institute representing the highest ranking Central Government mining authority in the People's Republic of China. The agreement is expected to be signed shortly. The Institute will provide ongoing mining consultancy and geological support to FM.  In return, the Institute will become a 10% strategic shareholder of FM. The Institute has identified and is assisting FM to acquire a number of significant resources projects on the best commercial terms in Inner Mongolia, Mongolia, and China in producing and advanced exploration, metal and precious metal projects to be acquired by FM. In light of the legislative changes in Mongolia, the partnership with the Institute will strengthen FM's business relationship with the Mongolian government.  

FM has also secured the interest of two senior geologists from China to join the FM board as independent non-executive directors. Professor Vincent Zhu, former vice chairman of the China Gold Society, and was a consultant to Placer Dome China. He is a member of the Chinese Society of Geology and a fellow of the Australasian Institute of and Mining and Metallurgy. A renown expert on the gold industry, for over 50 years of his professional life, Vincent has devoted all his  efforts to academic research works mainly on gold geology, for education, mainly on economic geology and lithology, and working on gold industry policy development in China.

Professor Y.G. Li, head of the Institute has also been invited to join the board of FM. Together the two directors designate have over 80 years of experience in the mining industry.  FM's management is delighted with the latest development of the company which will pave the way towards a successful proposed listing of FM on the ASX.  

In order to enable the market and investors to be adequately informed of FM's latest development and to properly assess the company's fundamentals, GoConnect Ltd ("GoConnect") in consultation and agreement with Sino Investment Services Pty Ltd, Lead Manager for the proposed ASX listing of FM, and the FM management, have decided to extend the record date by two weeks from 8 June 2012 to 22 June 2012 for determining entitlement for GoConnect shareholders in FM shares. 

Following the announcements on 15 March and 7 May 2012, as at 5 June 2012, over 500 GoConnect shareholders already qualify for the proportional distribution for nil consideration of 100 mil FM shares with these shareholders holding 250,000 shares or more in GoConnect.  On a fully diluted basis, based on the existing capital as at 5 June, 2012, the ratio of distribution is estimated to be approximately 1 FM share at a face value of 40 cents per share for every 9 GoConnect shares held and registered as at the record date. Please note that fractions will be disregarded for the distribution entitlement. 

Investors need to be aware that FM shares may have a market value higher or lower than the face value. For investors who buy or sell GoConnect shares, the final determination of entitlement to FM shares will depend on their GoConnect shareholdings being registered with Computershare Registry by the record date at the close of business on 22 June 2012.

While normal settlement term for shares transacted on the ASX is T+3, GoConnect, FM, Sino Investment Services, and their related entities and management, will not accept any responsibility or liability for investors who buy or sell GoConnect shares but for whatever reasons, including but not restricted to any delay in or early settlement of their share trades, fail to have their shareholdings registered with Computershare Registry by the record date of 22 June 2012 and accordingly, miss out on the FM share entitlement.

Investors should consult their sharebroker regarding settlement of their share trades to ensure that they are protected for the FM entitlement, and that their qualifying GoConnect shareholdings are registered with the Registry on the record date within the ASX settlement term.

More details of the resources projects being acquired by FM will be provided to the ASX in due course.

Link to release


Aberdeen Announces Appointment of David Stein as Chief Executive Officer and George Faught as Vice-Chairman

TORONTO, ONTARIO--(Marketwire - June 4, 2012) - ABERDEEN INTERNATIONAL INC. ("Aberdeen", or the "Company") (TSX:AAB) is pleased to announce David Stein, the Company's current President and Chief Operating Officer has been appointed as the Chief Executive Officer of the Company. In connection with Mr. Faught's resignation as Chief Executive Officer, he has been appointed as the Vice-Chairman of the Board of Directors and will remain a director of the Company. The Company would like to congratulate Mr. Faught for his successful tenure as Chief Executive Officer over the past seven years and thank him for his continued support of the Company as he transitions to his new role as Vice-Chairman.

Link to release



June 5 (BDSec) Benchmark indexes of Mongolian equities market extended its fall on Tuesday, heading to their 6-month lows. Large market cap companies dragged the market down even though winners outnumbered losers by nearly 8 to 3.

Tavantolgoi (TTL), APU (APU) and Baganuur (BAN), which are the three biggest market cap companies listed on the MSE, declined 2.00%, 3.37% and 2.13%, respectively. Direct iron producer Khukh Gan (HGN) gave up 3.16% to close at MNT 184.

Besides most stocks performed well during the trading session. Sor (SOR) soared 14.38% followed by Olloo (+13.33%), Zoos Goyol (+8.97), Eermel (7.69%), Telecom Mongolia (+5.26%) and Material Impex (+5.00%).

Local News in Brief

- Mongolia is willing to reopen negotiations on a controversial foreign investment law after next month's parliamentary elections, according to the country's president. Mr Elbegdorj made it clear Mongolia would not roll over to foreign demands. "We need to look more to Mongolian people's fundamental interests," he said. Now Mongolia was "at the epicentre of global attention", he said, it needed to "find a more effective equilibrium" than when the country was desperate for foreign capital.

- Minister for Foreign Affairs and Trade, G.Zandanshatar, signed an agreement to ease the condition of the visa process during his official visit to South Korea between May 31st and June 1st. During the press conference Zandanshatar stated a potentially visa-free entry will be possible between the two countries since the travel flow keeps increasing.

- The European Union (EU) and the European Bank for Reconstruction and Development (EBRD) are joining efforts to help Mongolia diversify its economy with a new €3.8 million programme dedicated to small and medium-sized tnterprises (SMEs), launched in Mongolia's capital Ulaanbaatar.

The project is financed by the EU and implemented by the EBRD, together with Mongolia's SME Agency, which launched its operations in 2009.
Since the beginning of its operations in Mongolia the EBRD has invested close to €420 million in various sectors of the country's economy, mobilizing additional investment in excess of €700 million from other sources.

Donwload the full report in PDF

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June (MSE) In accordance with the official notification No.84 given on May 31, 2012 by the State Inspector, "Tengri securities" LLC's trading activities related to broker-dealer have been stopped temporarily from May 26, 2012 due to license expiration.

Link to release



June 6 ( The regular meeting of the Cabinet of Ministers was held on June 05, 2012, where the issues on determining the protected area borders, suspending, annulling and compensating for the licenses were discussed and concluded.

Last week, the implementation process of the legislation on "Prohibiting mining exploration and exploitation in protected areas of river stream source basins and forests" was introduced at the Cabinet meeting on May 30, 2012. In the framework of implementing the law, it was concluded to finalize and determine the boundaries on protected area for these fields with the Cabinet meeting held on June 05, 2012. The Government has now made a substantial decision on nature and environment protection. The Prime Minister S.Batbold gave a notice to associate ministries and agencies to work in an interconnected and prompt manner in order to further the implementation of this legislation.

The Deputy Prime Minister M.Enkhbold, Minister for Nature, Environment and Tourism D.Tsogtbaatar and the Minister for Mineral Resources and Energy D.Zorigt were obliged to monitor the implementation of this Cabinet resolution. In the scope of executing this "long named" legislation, a total of 242 gold mine licenses were suspended, whereas 69 licenses were fully annulled and 36 were partly annulled. Also, the associate ministries had determined the field boundaries for 1,400 licenses except for gold placer mines.

Link to article


Mongolia's Erdenes May Be Valued At $10.6 Billion, Frontier Says

June 5 (Bloomberg) Erdenes Tavan Tolgoi, the Mongolian state-owned coal miner proposing an initial public offering, may be worth as much as $10.6 billion, according to Frontier Securities.

The value of the each Erdenes share is 933 tugrik (70.8 cents), Frontier said in a e-mailed report, citing a May 30 statement on the government's website. Frontier calculated the value of the company based on Erdenes having 15 billion shares.

Erdenes Chief Operating Officer Graeme Hancock confirmed a value had been set without giving further details.

The company last month delayed its planned IPO until February or March, citing a decline in global market conditions. It had planned to raise $3 billion from the share sale in Hong Kong , London and Mongolia's capital, Ulan Bator  before the delay.

"The valuation is reasonable and is in line with that of Mongolia Mining Corp. (975)," Helen Lau, an analyst at UOB-Kay Hian Ltd. (UOBK) in Hong Kong, said by phone. "But market sentiment is poor right now and investors may not have the appetite."

Mongolian Mining, the nation's biggest coking coal exporter, is worth HK$19.8 billion ($2.5 billion) based on today's share price at 2:54 p.m. It has 3.7 million shares outstanding, according to data compiled by Bloomberg.

Mining companies have lost 32 percent of their market value in the past year, the Bloomberg World Mining (MIGWMFA) Index shows. Companies including Sany Heavy Industry Co. (600031) and China Nonferrous Mining Corp. (1258) canceled or reduced share sales planned for last month in Hong Kong.

Hong Kong IPOs

Companies have raised $3.1 billion selling new shares in Hong Kong so far in 2012, down 65 percent on a year earlier, according to data compiled by Bloomberg.

The IPO is set to be Mongolia's first listing of a state- run miner overseas as the country's economy grew by a record 17.3 percent last year. Mongolia is holding parliamentary elections on June 28.

Erdenes is developing the East Tsankhi part of the 6 billion-metric-ton Tavan Tolgoi coal deposit.

Link to article


CLSA expects surge in Mongolia trading

The firm talks about its move to offer international investors access to Mongolian equities via a deal with BDSec, the largest domestic brokerage.

June 5 (AsianInvestor) In anticipation of increasing cross-border investment into Mongolia-listed securities, CLSA has agreed to become introducing broker for BDSec, the nation's biggest brokerage.

Andrew Maynard, global head of trading and execution at CLSA in Hong Kong, describes Mongolia as Asia's next frontier market of choice, with foreign institutional investors being drawn to its natural resources sector. Four of the five leading stocks listed on the domestic bourse at present are natural resources-related.

"Given the natural resources and direct foreign investment going into Mongolia, most notably from Korea, China and Australia, there is obviously ongoing speculation that the government will sell stakes in publicly held vehicles, particularly those of the coal operators," says Maynard.

The partnership with BDSec, which covers 47% of foreign account holders and 17% of domestic account holders, is "advantageous for us to be able to talk about this country with a bit more conviction, a country that will rise in importance in years to come", adds Maynard.

At the same time, it is also true that Mongolia has fallen down Transparency International's annual rankings of in-country corruption, standing now at 120 from over 180 nations.

With a total of 150 stocks and trading over two boards – A and B -- the Mongolia exchange's total market capitalisation stands at $1.45 billion. Board A, on which 36 stocks are listed, accounts for 90% of market value. But secondary market trading volume remains small, at $250,000 a day, says Munkhtulga Ganbold, who works on institutional sales for BDSec in Ulaanbaatar.

BDSec already has a US representative after it clinched a partnership agreement with New York-based agency brokerage Auerbach Grayson & Co in 2007. Of the new collaboration with CLSA, Ganbold points to the brokerage's strong brand in Asia. "This arrangement will give comfort to international investors," he says.

Several funds already invest directly into Mongolia-listed equities. Maynard notes that while companies listed on the bourse can have sizeable market caps, the turnover is still limited. At press time, the biggest market-cap stock, $430 million coking coal-maker Tavantolgoi, had seen trading volume of just 219 shares on May 31 to close at MNT10,350 ($7.90). Overall it has 52.7 million shares outstanding.

But even though trading volume is still thin at present, there are expectations that its two-hour trading window could be extended as more foreign investors participate.

While Maynard has not yet seen many institutional orders on the local bourse, he sees potential for growing interest as clients increasingly look to hold frontier-market exposure, with Mongolia, Cambodia, Vietnam and Sri Lanka standing out as favourites.

"Vietnam is a market which everybody wanted a piece of five years ago due to its burgeoning middle class and rising GDP, but [interest in] Mongolia is for a different reason," says Maynard. "Its rich in natural resources, which means that most of the companies listed there are either mines or cyclical stocks. Over time it will become a market of more significance."

Link to article


Energy Charter Secretariat Responds to FT Article on Mongolia

From Urban Rusnák, Secretary-General, Energy Charter Secretariat, Brussels, Belgium

June 5 (FT) Sir, Your article ("Mongolia ready for rethink on investment law", May 30) expresses some concerns about the protection of foreign direct investments in the mining sector of Mongolia. It is important in this context to emphasise that states have the sovereign right to regulate foreign investment, which should be subject to certain conditions as stipulated by their domestic laws and the states' obligations under international law. At the same time, it is important to ensure a balance between the public interest and the investors that are willing to participate in the development of the Mongolian economy.

I welcome the proposal by the president of Mongolia to engage with the international community and combine efforts to further improve investment legislation in creating a level playing field for domestic and foreign investors. This is consistent with international obligations under the Energy Charter Treaty, to which Mongolia has been a contracting party since 1999. The Energy Charter Secretariat stands ready to co-operate with the authorities of Mongolia in promoting an open dialogue related to the investment climate and development of the energy sector that has to support the population, the country's booming economy and its dynamically developing mining sector.

The article touched upon important aspects related to dangers associated with mineral wealth, which is known as "Dutch disease". In this context, I consider that it would be important to promote international dialogue and experience-sharing within the ECT constituency, where a number of oil and gas-producing countries have similar challenges.

Link to letter


Mongolia, Japan launch Economic Partnership Agreement talks

ULAN BATOR, June 4 (Xinhua) -- Mongolia and Japan launched the first round of negotiations for an Economic Partnership Agreement (EPA) on Monday.

During the four-day talks, the two countries will discuss issues relating to trade in goods and services, rules of origin, customs procedures and investment.

Mongolian Foreign Minister Gombojav Zandanshatar said at the opening of the negotiations that Japan has been the largest provider of development assistance to Mongolia since the 1990s, and is also a major trading partner of Mongolia.

He stressed that concluding an EPA with Japan is one of the top priorities in bilateral relations, saying that by doing so Mongolia is seeking to boost greater economic integration between the two economies.

Shinichi Nishimiya, deputy foreign minister of Japan, said Japanese companies are increasingly interested in investing in Mongolia.

Nishimiya expressed the hope that the two countries would further strengthen bilateral cooperation in trade and investment through the establishment of an EPA.

Link to article


Review on Free Trade Agreement between Japan and Mongolia Begins

June 6 (UB Post) On June 4th, the first review of Japan-Mongolian economic and business partnership took place at the Ministry of Foreign Affairs and Trade. Mongolia was represented by Special Duty Ambassador V. Enkhbold, and Japan was represented by Shinichi Nishimiya, Deputy Minister from the Ministry of Foreign Affairs of Japan. Takenori Shimizu, the Japanese Ambassador Extraordinary and Plenipotentiary in Mongolia was also present.

The following is an interview with the officials at the meeting.

-How long will the meetings continue for?

-Shinichi Nishimiya: This is the first review, and will go on for a week.

-What are the main topics being discussed?

-Shinichi Nishimiya: The discussions cover a large area – the trade and services of the two countries, a focus on policies as to the origin of products; the policies on customs, investments, intellectual property, the strategy on competitiveness, cooperation and partnership, improvement of the business environment, technical difficulties and prohibitions on trade.

-What are the benefits of having trade agreements between countries?

-V. Enkhbold: It is very important in that it will greatly improve and expand the economic, political and business relationship of Mongolia and Japan. Every year, Mongolia exports products worth around USD 10 million to Japan. But Mongolia imports USD 400 million worth of products from Japan in the same timeframe. An agreement is crucial in decreasing this gap, bringing in new investors, and also introducing new technologies to Mongolia. In another words, it will create a freer, easier trade between the two countries.

-How much experience do we have with these kinds of agreements?

-Takenori Shimizu, Japanese Ambassador Extraordinary and Plenipotentiary in Mongolia: Japan has made this agreement with a total of 14 nations. As for Mongolia, this is the first time it is making a free trade agreement.

The economic partnership between Mongolia and Japan will improve the two country's business and economic relationship, ease the access to trade, and also greatly benefit the two country's strategic partnership.

Link to article


Cabinet Approves Foreign Labor Import for Sainshand–UHG, UHG-Gashuun Sukhait Railway Construction

June 6 ( The regular meeting of the Cabinet of Ministers was held on June 05, 2012, where the following issues were discussed and concluded.

In Brief,

- The draft ordinance of the President on "Allotting salary to the rank of the General" was reviewed and was resolved as unable for discussion due to several rationales. For instance, the salary allotment issue is to be settled with the legislation on Pension and Benefits of Military Servant, thus the President's ordinance has no legal grounds for resolution. In Mongolia, the highest military rank of General is given to a total of 158, out of which 84 are alive and 52 are on pension.

- A total of 150 falcons (kestrel) are to be exported abroad in the year of 2012. Mongolia exported a total of 2,700 falcons within the years of 2000-2010. Within the past 5 years, over 11 million USD was added to the State Budget from the fees and payment of falcon exports. Falcons (Kestrel) are commonly outspread throughout the Mongolian territory, where its count is at 6,800 according to estimates in 2010.

- Permission for labor in Mongolia was given to foreign engineers, technical and professional staff, who are to work on the railway installation on the routes of Sainshand - Ukhaa Khudag and Ukhaa Khudag - Gashuun Sukhait, concrete road installation on the routes of Tarialan - Murun and Ulaangom - Naranbulag and construction sites being implemented in the scope of the "100 thousand households" program.

Link to article


EU and EBRD launch new programme for SMEs in Mongolia

June 4 (The FINANCIAL) -- The European Union (EU) and the European Bank for Reconstruction and Development (EBRD) are joining efforts to help Mongolia diversify its economy with a new €3.8 million programme dedicated to small and medium-sized tnterprises (SMEs), launched in Mongolia's capital Ulaanbaatar.

The five-year project "Support for SME Development in Mongolia" aims to improve the business environment in which local entrepreneurs operate and help Mongolian SMEs achieve their growth potential, boosting their role in the country's economy.

The project is financed by the EU and implemented by the EBRD, together with Mongolia's SME Agency, which launched its operations in 2009.

"This is the right project at the right time with the right focus," explains Philip ter Woort, Head of EBRD Resident Office in Mongolia, adding: "It is important that the growth of Mongolia's mining sector is complemented by strong efforts to diversify the economy and we expect the SME sector to play a leading role here."

"Small and medium-sized enterprises are essential to the economic success of Mongolia and its sustainability, as well as for poverty alleviation," said Minister Counsellor Johan Cauwenbergh, Head of Operations of the EU Delegation to China and Mongolia, adding: "I believe that our cooperation and the project we launch today holds great significance for the economic prosperity of Mongolia. It will contribute to the well being of the Mongolian people as a whole."

According to the European Bank for Reconstruction and Development , the project includes a series of integrated activities aimed at strengthening the capacity of the SME Agency and promoting reforms that would facilitate SME access to finance in Mongolia.  The new initiative will also focus on developing business support and consultancy services in Mongolia. In addition, the project will work with individual companies, helping them to improve their operational efficiency with support from Mongolian management consulting firms.

Since the beginning of its operations in Mongolia the EBRD has invested close to €420 million in various sectors of the country's economy, mobilizing additional investment in excess of €700 million from other sources.

Link to article


EU supports Mongolia's Technical and Vocational Education and Training (TVET) sector with 7 mln euro project

31st May 2012, ULAANBAATAR (EU) – Today Mr Khurenbaatar, Director-General of the Development Financing and Cooperation Department at the Ministry of Finance, signed a Financing Agreement with the European Union which will see it benefit from a 7 million euro project of Technical Assistance, funded by the EU, in support of its Technical and Vocational Education and Training (TVET) sector.

The project aims to support the economic and human development of Mongolia, enabling key stakeholders to provide TVET in a way that is responsive to the needs of a rapidly changing labour market. The project will start its implementation in 2013 and will last for five years.

Technical Assistance will be provided to strengthen and consolidate the work of the National Agency for Vocational Education and Training (AVET) in order to establish and initiate:

·         An efficient, sustainable and demand-driven TVET sector with attention to rural areas

·         Appropriate quality assurance procedures for assessment and certification

This project adds to the already fruitful cooperation between the EU and Mongolia, currently representing a total volume of commitments of more than 25 million euro, mostly in the fields of rural development, access to basic social services and support to small and medium-sized enterprises.

A Partnership and Cooperation Agreement (PCA) between the EU and Mongolia, covering all areas of cooperation, including trade, was initialed in 2010 and is expected to be formally signed in 2012.

Link to article


President Elbegdorj's Interview With Financial Times

Ikh Tenger, Mongolia May 29, 2012. Financial Times reporter David Pilling speaks with Tsakhia Elbegdorj, President of Mongolia

FT: Mr. President, let me start by asking you about the origin of Mongolia as an independent nation. It has interesting beginning after the fall of the Soviet Empire, and unlike some other former soviet states, it became democratic almost immediately. You were part of that whole movement. Can you explain that event?

President Elbegdorj: Mongolia was an independent nation in the old socialist system. For a man, as well as for a nation, freedom is indispensable. It is vital for private individuals to be free, because free men, free individuals make up a free nation. Mongolians have the sense of freedom; we carry that feeling in ourselves. The sense of independence, the sense of free life has been in us through generations, at all times. I think that this sense was a great help to Mongolia acquiring its freedom and independence again in a full sense, in particular after 1990. 

There is a special feature of the Mongolian change. First, it was generally understood that for Asian nations it was not possible to make political and economic reforms concurrently. Mongolians broke perception. Beginning in 1990 we did make political reform, and we did make economic reform. We doubly implemented this reform of giving our people rights and freedom. Thus, in this way Mongolians' reforms are of one special feature. The second special feature is that we were able to make this major societal transformation in a peaceful way, through dialogue and consensus. The third special feature is that it has been 22 years since 1990, and in this period of 22 years the striving of Mongolians to continue the reforms has been resolute. We never abandoned, never retreated from out path and choice. We our proud that Mongolia has evolved as a nation with freest economy, politics and society in the region. 

FT: There is a little bit of a trend to talk about Beijing consensus. As you think to that, people compare, for example, development with India. Have there been any disadvantages? Starting out on this road to development to economic reform as you put it? And as a democracy, has that road difficulties and problems along with advantages?

President Elbegdorj: It was indeed very challenging to conduct a social, economic and political transformation of such a great magnitude. In economic sense, in the time of socialism nearly 90% of the total sales, 90% of the total economic trade was made with one nation, namely the then Soviet Union. On the other hand, thanks to the transformation, we rose to similar with other countries values. In short, the very value of establishing rule of law and respecting human rights and freedom is stronger than any ideology. Thanks to new values we made many new friends. Opportunities have been opened for international banks, financial assistance institutions, and nations with similar values to work together with us. Thus on the basis of these possibilities, conditions and opportunities to decide hard problems that at the time were urgent came to us of themselves. Second, one thing that I think is that freedom has a really great, amazing side to it. Every day free people in a free society can hear good news. A new business is being created in one place, a new service is being created in another corner. People who have felt their freedom and creative capacities create this wealth. A free man is more responsible, a responsible man is more creative. 

FT: Now it is not a secret that Mongolia is sitting on enormous resources, some of which have been discovered, some of which have not been found yet. Countries that have resources, have sometimes, even more curses than blessing, West African and oil, for example. Honestly, we would like Mongolia to become Chile or Qatar, maybe. What would prevent this place from becoming another country with less honorable record?

President Elbegdorj: I interpret your question as asking us, a nation with great natural wealth, whether we are going a right or wrong path, right? Let's think of what could safeguard Mongolia if we'd go a wrong way, for example. The answer clearly comes to my mind, I am confidant in this. Nations with great natural wealth, which have taken the wrong road, are by and large closed nations. Countries richly endowed with mineral resources but which have gone the right ways are open countries. What about Norway, Australia or Canada - we see that these nations are democratic nations. It is by and large not the countries that take action under the instructions of its investors, or of the power holders of that country, but the countries that take action through the wishes and desired of its people that are most successful. Travelling on the right road makes it possible to navigate ahead while correcting our failures and mistakes. The people have the sense of right and wrong – they feel the nature is being destroyed, or else, that the profits of economic development are not coming to us, that the gap between the poor and the rich is increasing; this voice and feeling come loudly from the people than from those in power. Therefore, since the fate of the people in this country is decided by people's wants and desires, and the leader follows people's wishes, we are able to fix our problems. The most essential guarantee of Mongolia's development and prosperity reflective of people's interests and benefits is our openness, is that Mongolia is an open country. And also, we are eager to learn from others, always. We do criticize ourselves, and we do openly talk about our shadowy sides. Our media is independent, people have every opportunity to receive information, and these opportunities will be further expanded. And as I said, we have all possibilities and chances to learn from others. In fact, if we were to describe democracy in few words, it is leaning from your mistakes, learning from others. Learning means progressing, moving forward. 

FT: Let me ask a question about corruption. The corruption is that one always worries about. This country doesn't particularly do well if you look at the Transparency International table list. To get into the Parliament I believe, it's calculated 2 million dollars. But the wage of a Parliamentarian is some 800 USD a month. That will suggest people see getting into the Parliament for some kind of earning opportunities. Can you assure people here that this your government and Mongolians are willing and able to do away with this?

President Elbegdorj: We do worry about this issue. It is shameful for me to see the news where Mongolia's reputation is damaged because of corruption. Corruption makes Mongolia look awful, ugly. Corruption is the daunting enemy of a free society, it is the main brake for the further growth of a free society. Corruption is associated with the governance, state structure and its policies. Therefore, I set this both as a goal and a call: let's make the coming 4 years the years of fixing the wrongs in the state, in the government. Mongolia's people can't live a decent life because the country has no money; Mongolian people live a poor life because our society misses, lacks justice. People live poor lives because Mongolian law does not treat the people equally, people lack equal access to law. And I think, our todays' Forum at Ikh Tenger addresses specifically this issue. 

It was not possible to talk about this 20 years ago; 20 years ago the problems that were pressing on us were much different problems. Even 10 years ago it was not possible to discuss it. Perhaps even 5 years ago it would not have been time for our society to accept discussing this openly. But now it is very important that we have begun discussing with our thoughtful friends, with our experts and researchers, with our people, and with non-governmental organizations how to lay the basis for inclusive growth, how to ensure that the economic growth benefits our people. For myself, Mongolia's struggle against corruption is the aim and purpose of Mongolian state and government. We can work effectively in this direction. Before the Parliament took a break it adopted 6 laws on judiciary that I initiated. All in all we have to change and amend 18 laws to reform our judiciary. We will have to undertake many reformative actions further on. Therefore, the agenda against corruption is present both in people and in the government. The legacy I will leave behind myself is Mongolia free of injustice, free of corruption. We must strive to contribution to this cause to the best we can do and offer. 

FT: What kind of resources does this country have? In per capita terms, what are you looking at? Could this place be as wealthy per capita as Qatar? Could we be talking about that kind of level, in what kind of time period?

President Elbegdorj: Last year Mongolia was ranked to the country with the highest rate of growth. Some surveys indicate that our economy grew by 17.5%. However, the public, the society doesn't seem to be happy about this growth, people are more cautious of such a growth. Our people have become more resilient and wiser in the course of the past 20 years hard work. And the caution stems from the fear not to become a country dependent only on one source. Our growth bases only upon mineral sector development – mineral exports and investments into the mineral sector. Processing industries, infrastructure and other sectors virtually don't grow. In 2 years, our GDP grew by 100%, but with the old infrastructure and old capacities we cannot keep up with this growth rate. Therefore, with the proceeds we make from the minerals industry, we have to invest in other sectors, very wisely, based on accurate projections and estimates. So we are discussing these issues, so actively, that one can say we are about to hold a referendum. And speaking of which, the Parliamentary election is a voting. It is a vote for the politicians and political parties which propose the smartest, the most visionary, most realistic policies, based on sound evaluations and calculations. Such candidates shall receive people's support. So we have to look at the returns of the vote. The discussion is talking place all over Mongolia. 

FT: You are sitting on all those resources. First of all, you have to decide how to divide them between Mongolia and foreigners who come here. You need them because they have experts, capital, lawyers and others. They have something that Mongolia doesn't have yet. And then you have to divide it between yourselves. But let's start with how you divide with foreigners. And the foreign direct investment law, which is now being discussed, which is, I guess, an attempt to begin to create the rules of how that is to be done.

President Elbegdorj: When we began the fundamental societal transformation, there was an acute need to attract foreign capital. Mongolia was like a family of a bride. We were a family with a fine, flawless girl, who hadn't yet found a proper groom, no country was found that could be a potential son-in-law. Now, our daughter is noticed, men approach our daughter, who is very intelligent, capable, highly educated, and is potentially a good mistress of the house in our household. You see, we make our choice with our values and measurements. First, we needed to be open. Now, as Mongolia, our minerals sector enters the core attention of foreign investors, we prioritize the common, fundamental rights and benefits of the Mongolian people. In the past we desperately needed money and foreign investment. Now we need to find the most effective equilibrium between the two. Recently our Parliament discussed issues related to regulating foreign investment, foreign public or government's investment. We have found the solution after three years intensive discussions. It is not that we began discussing them once the matter of Chalco arose, this law was put forward three years ago. These discussions have proceeded openly for three years. There is one thing to say about it here. In Mongolia before 1990, all properties and assets were owned by the state. Since 1990 we have tried to support private sector. We have always tried to impose stringent control over state ownership, we have strived to curb government ownership and support private initiatives within Mongolia, domestically. Such a regulation has been in place not only in Mongolia. Open economies, including the most powerful economies have such a regulation. We introduced the regulation looking at the experiences of those countries as well. 

I wouldn't say we have adopted the best law, the best regulation. There are some things to criticize here. But we have them anyway and let's go with them and see. There are opportunities to improve them, we are always open to improvements. We will listen to what our partners say, what those parties interesting in investing in Mongolia say, as this is the first time we introduce such a regulation in Mongolia. 

FT: Are you worried about the foreign state companies, or worried about Chinese state companies, obviously there are a lot of SOS in China?

President Elbegdorj: As for participation by companies with foreign state ownership, not just Mongolia but all countries are careful, as you know. We did not provide any article in our law against the state owned companies of any one particular country. The articles of the law are equally applicable to all economic entities and companies, all state owned companies. 

FT: I was phoned by some investors since I have been here. And they say unless they can have control 51%, they are not interested because it's too risky, they need control. Now the law, as I understand, says, that if they seek control they must go through the Parliament. Is that the bottom-line? Are you going to call foreign investors bluff?

President Elbegdorj: In fact, 51% control is not considered the highest level of all criteria. This is just one criterion. Second, if a problem has arisen in connection with this criterion, we must make clear a mechanism that solves the problem. That is discussing the issue at the Parliamentary level. So we must make regulations for situations like what sort of issues will be decided at the government level, what things will be decided within the scope of investment law at the level of an enterprise, what sorts of issues will be decided at the parliamentary level. It's not that there are issues here that will absolutely not be discussed, negotiated, or decided. So I personally view that we have just clarified the mechanism of solving the issue. 

FT: I think, some foreign investors think that there is election going on here, you are very close to parliamentary elections. And their hope is that once the elections are over, things will settle down a bit. Is that a realistic hope?

President Elbegdorj: Mongolians fully understand that the sun will rise after voting in the election. This isn't the first time we've held an election. This is the sixth time we've held our parliamentary elections. Because of this I don't think it's something to worry about. In fact, Mongolians look near and far and then make our choice. Mongols are a people who think about what place we will go to, then catch a horse and saddle it. Because of this we're not people who only look at today or look at one side and then decide the issue. I personally really trust in the people's wise choice. I believe that this people I have spoken of can send a clear message to their power holders with that choice. This is a chance to make our decision on the basis of what policy from the government our people support and what policy they oppose.

FT: I return to the domestic issues. As this money, which we hope, is going to begin to come to Mongolia very soon – what is the best way of spreading that wealth? The crudest way might be, handouts to everyone. Or the other ways – institution building, education, sovereign wealth fund… I'd like to discuss some of these in more details. What is your vision, how this can be handled equitably?

President Elbegdorj: As a matter of fact, to this same question all the people sitting here, our people can provide solid, realistic answer. Our answer is – a Mongolian citizen, a Mongol man is a gateway to development, not mining. 

Over the past years, we have adopted laws promoting education, education of the Mongolian people. Mongols hold education in high esteem. Even if Mongols don't have spare tugrug for their daily consumables, they send their children to school; they take loans for their children's schooling. So people to attach high significance to education. The investment made into youth education, into children, into their schools, into their tuitions and education financing is the best form of investment. Equally important is education. Mongolia's future is a future of healthy, educated and ethical people. Therefore we must prioritize investments into a Mongolian citizen, into his or her developmental opportunities and to expanding this opportunities. Another venue of investment is investing into diversifying our economy. Agriculture is a sector of immense opportunities for Mongolia. Our livestock herd today accounts to 47 million heads. We are 2.7 million people and we are located between two huge markets, with huge populations. We could supply for a certain percentage of food needs of our neighbors with our good quality agricultural produce. On top of that, Mongolia's population is scattered around our lands. We have the lowest population density, or put other way, the highest per capita land. This is, again, an opportunity. Using this opportunity, we shall produce products needed at other parts of the world. An area in critical investment need is obviously infrastructure. Expansion of the transit transport capacities, creation of new railroad networks is essential. We have the resources to produce energy for our domestic consumption. Mongolia homes huge coal reserves, and indeed Mongolia is an energy heaven. Yet, we are in shortage. And the reason we can't be self-sufficient is in us, is because of ourselves. We are dependent on oil and fuel imports. Therefore, investing in domestic production of fuel is also vital. Over the past years, we have talked, discussed about all of this, now we know what needs to be done, what needs to be built, in essence, we have a roadmap to navigate ahead. Any political party, any policymakers have the overall picture with their solutions. Now we need to consolidate a more comprehensive stance supported by necessary legal and financial frameworks. 

FT: I am a little bit suspicious of cultural explanations, but I still want to ask you a cultural question. There are some Asian nations that has a sense of national mission, such as countries that had gone through the vast development stage like Japan, South Korea, Singapore. And there are other nations that haven't has the sense of national mission. I would think, it's Philippine, for example. I want to ask you where Mongolia fits in this picture? A nomadic civilization in the vast lands, Mongolians seems to me to be more self-reliant, and they think of their own wellbeing, separately. Now as I say it, I am little bit suspicious about this explanation, but this question is worth asking. 

President Elbegdorj: Last year Mongolia celebrated the 2,220th anniversary of the establishment of our State. Today we are talking about some 20 years of our history. Back centuries ago, Mongols had conquered the half of the known dry land; it is a nation which formulated the global policies for 200-300 years. The best traditions and legacies of the Mongol Empire have lived on in Mongols. I find my fellow Mongols to be wise, realistic, objective, resilient, and adaptable to new conditions, able to collectively solve issues, which I think are the merits developed in the course of centuries and millennia of statehood. Also, we home today the best part, the hearth of the massive terrains that were dwelt by Mongols. On the other hand, nomadic way of living is a high standard living. If an eco-friendly lifestyle is considered to be the high standard, I would say Mongolian nomads live such a life – a life in full harmony with the nature. Nomads never pollute, they never dry rivers up, and damage the nature. The fascinating tradition and wisdom of living as one with nature is Mongolians'. Therefore, the Mongolian people set environmental criteria and requirements. The sense of fairness and justice is in Mongol genes, it's our common value. Therefore, what the people demand constitutes the core of our policies. So if we do have issues and problems in Mongolia, they are because of the policy makers, and not because of the people. 

FT: Now, you spoke about the need to develop industries other than mining, that the country is not healthy if it lives on resources only. The economists obviously speak about the Dutch Disease, which us when economic resources are distorted. Even economies like Australia, which is very wealthy and advanced, suffer from the Dutch Disease. If you go to Perth in Western Australia, it's very hard to find a waiter who will work decently, If they were fired they can go to work in another city for hundreds and thousands of dollars. The currency in Australia is very strong, too strong for manufacturing industry. How to prevent the same thing happening in Mongolia? 

President Elbegdorj: That caution has always been there. There are many issues involved – monetary policy, currency exchange rate, its appreciation and depreciation, fiscal expansion etc. One of the best achievements of the outgoing Parliament was the fact that it did approve the Fiscal Stability Law. The Law shall come into effect from January 1, 2013. Until then we have to ensure smooth transition. Another important issue: looking at Australia's case or some others', the world today is so different from what it was 10, or 5 years ago. Although Mongolia's economy in incomparable by size with major economies, our people enjoy the same benefits, have the same living as people in other countries. A herdsman on horseback is holding a mobile phone. After he comes homes in the evening, the same herder watches TV on at least 60 channels. At soum center, there are plenty of internet cafes. In the morning, upon awaking he reaches out to the information on prices of his cashmere in Ulaanbaatar exchange, over 1000 km. With the help of their children, studying foreign languages, they learn of the Mongolian stock performance on global exchanges. Mongolians receive the same level, the same kind of information as people in any other part of the world. This enables people to make right decisions. I am earnestly happy that this empowerment has become possible thanks to technological development. Mongols are finding the best use of technological progress. 

FT: There has been a lot of press release, especially in foreign press, about your former President and his arrest. A lot of news were published about his arrest and the surroundings of the arrest. I wonder whether you think the story has been properly told abroad? I want to know your interpretations what precisely happened? 

President Elbegdorj: As for the press, there is a principle I have kept in my political life, in my public life - I never blame the press. If the press has got something wrong or printed anything wrong, I only blame myself. We blame ourselves. The reason is that we have given the media a reason or an excuse, or we let them misunderstand. Therefore, we are always open to fix our mistakes. 

Mongolia is open to any organization, any individual, international organization, and media willing to constructively cooperate with us in combatting corruption and securing human rights, freedom and rule of law. Corruption, money are a big power. Corruption is not a phenomenon that resides in one particular country. The power of the corruption money, of the corruption network can reach anywhere on earth. Our people all see how hard it is to combat corruption. Corruption is not a mere chitchat, it is not something easily declared and then abandoned. It requires concrete results, it requires law to be enforced and equally. So we are learning in the process, our society is learning. We must derive right lessons and move forward. 

Another principle that I strictly adhere to – until the court issues its verdict, no one can be blamed for wrongdoings. We in Mongolia do abide by this principle. On the other hand, the organs of law and justice have all rights to call, inspect, interrogate, clarify issues from any person alleged in violation of law; and undertake measures that are provided by law. 

The President has no chances to exert any influence. We strictly abide by the principle that the organs of law must act independently and by law. This principle must be observed by every single citizen in this country be that the President, a businessman, or a politician, or any other citizen. 

Another golden principle is equality in front of law. No one has a preferential treatment by law over any other citizen. Equal application of law is trying hard to survive in Mongolia. And we all must strive to ensure that this golden rule lives in, endures and survives. 

The question you asked has been in the center of public attention. There is another issue that people are attentive about – that tyrannosaurus Bataar, which might have been found in Mongolia. There was a sensation around the auction of almost full skeleton of the dinosaur in America. We most likely will save the 80 million year old skeleton of Bataar. It was taken out of Mongolia, so we will manage to get it back. But there is another dinosaur that Mongolians are now faced with. This is corruption. Can we manage to keep our country, our people, their rights and liberties, our new choice safe from the dinosaur of corruption? Or whether Mongolia shall become a corrupt country in the claws of the corruption dinosaur? Shall we be able to the tame the animal by law? This is a choice of fate that the Mongols are facing today. 

FT: I have my last and a little weird question. This place is going to transform economically, socially, politically over the next decades. And it has been suggested to me that Mongolian women may be more adaptable, maybe better prepared for the changes that are about to happen than the Mongolian men, And it could lead to social problems, social frictions. I wonder what do you think about this?

President Elbegdorj: The contributions Mongolian women make to the society are indeed unique. At the same time, the way Mongols have regarded their women, our mothers, grandmothers, daughter and sisters is very special, truly fascinating. We hold our women in deepest esteem, respect and honor. We admire the love and care that emanate from our women and mothers. On the other hand, our women have been serving this definition: they are the ones to stretch their arms of help to those in need, they see the society in the full spectrum of colors. Just stepping inside home they can sense their elders, their children need help, need tea, need food. Women rise to their children's first cry for care, for milk. Our women on one hand, take care of those in need, and on the other hand, they encourage, stimulate the deeds of the capable, energetic ones, the ones who move the society forward. 

That's why we must support our women to work in the state and government, in public organizations. At the moment, there are very few women in the Parliament. The situation is a bit better at the local governments level – 30-40%. Education and health sectors predominantly employ women. Yet, their participation is very limited at the political decision making level. So have amended our Election Law to have no less than 20% of women candidates. Of the 76 candidates in the election, 15 are women. And from this level on, we have to further increase this rate. I have never heard of a corrupt woman, a woman who builds a corruption network; I have never heard of a woman dictator. By policy we must support women in politics, whatever parties they belong to. I believe this will be a right choice. And this is my conviction. I wish one day a woman becomes the President of Mongolia. 

Now let me say a few words about the judicial reforms we are now conducting. Sometimes it seems to me that we are seriously mistaken by alienating economic growth from people. Many people say the economic growth is not felt in ordinary peoples lives. And we see at economic growth somewhat separately from people's lives, their freedom and their rights. At the same time, judicial reform seems to be perceived separately from people' lives. This issue must be addressed by lawyers and economists. Because, at the end of the day, economy is our people's life. Judiciary is also our people's life. We will find the right solutions is we take economic and legal matters as inherent parts of people's lives. 

Today, one color predominates in Mongolia's economy, say a mining color-dominant economy 0 brown, or given the size of the coal industry, it's dark brown. What we want is an economy with rainbow colors, a colorful, vibrant economy. We want to build an economy where mining is one of its many sectors, and which provides for inclusive and effective for the people growth. 

I thank you all for coming to meet and speak with us. I know many of you came from afar, including the guests of Kyrgyz. For whole two days you will discuss and deliberate on the matters of pivotal importance. In a certain period of Mongolia, Mongolia will have evolved as a country with tangible contributions to the global affairs, with a powerful economy, with free people, with educated and healthy citizens looking confidently ahead into their brilliant future. I have no doubt we will be able to transform Mongolia into a fascinating country of justice, rule of law and economic prosperity. And today's Forum is an investment into such a future. Being held in an auspicious place with beautiful natural scenes, I am sure this Forum will be a success. Thank you.

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Mongolian President among Six Champions of the Earth Named in 2012 UNEP Awards

Brazilian Banker, UAE Entrepreneur, and Maasai Warrior Also Recognized for Environmental Achievements

Rio, June 4 2012 (UNEP) - Mongolia's President Tsakhia Elbegdorj, Brazilian banker Fábio C. Barbosa and renewable energy entrepreneur Dr. Sultan Ahmed Al Jaber were among six winners of the United Nation's Champions of the Earth 2012 award, given to those whose actions and leadership have had a positive impact on the environment.

Renowned Swiss aeronaut Dr. Bertrand Piccard, Dutch Scientist Dr. Sander van der Leeuw and Kenyan Maasai conservationist Samson Parashina were also recognized for their achievements.

UN Under-Secretary General and UNEP Executive Director Achim Steiner presented the LG Electronics-sponsored awards at a ceremony in Rio, attended by UNEP Goodwill Ambassador Gisele Bündchen, Brazil's Minister of the Environment Izabella Teixeira and Rio+20 Secretary-General Sha Zukang.

The winners have demonstrated commitment to building a sustainable future for the planet through their work, which encompasses active green policies, groundbreaking clean energy developments and community work that has helped conserve critical ecosystems.

"As the world heads to Brazil for Rio+20 later this month these six individuals, deservedly named as Champions, demonstrate that committed, concrete action can have a transformative effect on countries, communities and businesses," said Mr. Steiner.

The full list of the 2012 Champions of the Earth is as follows:

-       Policy Leadership: President Tsakhia Elbegdorj (Mongolia) for delivering on promises to put the environment at the forefront of policies.

-       Entrepreneurial Vision: Fábio C. Barbosa (Brazil) and Dr. Sultan Ahmed Al Jaber (UAE) for their business efforts in sustainability and promoting renewable energy and clean technology respectively.

-       Inspiration and Action: Dr. Bertrand Piccard (Switzerland) for raising global awareness of the possibilities of renewable energy-driven transport

-       Science and Innovation: Dr. Sander Van der Leeuw (Netherlands) for his research, which applies lessons learned from history to understand why humanity is not facing up to the long-term issue of environmental change.

-       Special Category: Grassroots Initiatives: Samson Parashina (Kenya) for leading community efforts to conserve Kenya's Tsavo-Amboseli ecosystem.

"On the eve of Rio+20, the Champions of Earth 2012 should be an inspiration for world leaders to take the bold decisions needed on behalf of seven billion people," Mr. Steiner said. "In other words, to put in place the pathways that will scale-up and accelerate a Green Economy while reforming the international institutions charged with realizing sustainable development and poverty eradication in order to deliver the Future We Want."

Mr. Elbegdorj, who has prioritized green policies and environmental awareness for youth, said his formative years as a herdsman living close to nature helped shape his sustainable outlook.

"This is a great honour, not only for me but for our nation," said Mr. Elbegdorj. "One day I will give up my Presidency ... but I will continue as a Champion of the Earth.

Champions of the Earth, which was launched in 2005, is the UN's flagship environmental award. To date, it has recognized 51 individuals and organizations for their leadership, vision, inspiration and action on the environment.

The list of previous Champions laureates include former US Vice President and Nobel Peace Prize winner Al Gore, Mexican President Felipe Calderon, Chinese actress and environmental advocate Zhou Xun, the Women's Environment & Development Organization (WEDO) and global music legend Angélique Kidjo.

2012 Champions of the Earth Winners' Profiles:

President of Mongolia, Tsakhia Elbegdorj

President Tsakhia Elbegdorj of Mongolia, who was among the leaders of the peaceful democratic revolution that ended communist rule in 1990, has realized his commitment to putting a green agenda at the forefront of policies since coming to power in 2009.

Elbegdorj has turned his attention to decreasing air pollution, triggered by over-population and coal usage, in Ulaanbaatar, the capital of Mongolia, through the submission of the Law on Decreasing the Capital City Air Pollution, which was approved by Parliament. In addition, the Mongolian government is establishing a satellite-city near Ulaanbaatar for the purposes of limiting coal-burning in the capital, transferring energy-saving technology, importing and increasing the use of thermal stoves, promoting population decentralization and imposing air-pollution tax in some regions of Ulaanbaatar.

In 2010, Elbegdorj suspended the issuance of all new mining licenses until fresh regulations were drawn up, citing the protection of the mineral-rich Asian country's environment and herdsmen's livelihoods. "Half of the territory is covered by exploration licenses. I think that's enough. We have to save our wealth (for) our next generation." he said in an interview in on the sidelines of a UN General Assembly.

He has enhanced youth understanding of environmental protection through a project that educates young Mongolian students on the impacts of climate change and the importance of environmental stewardship. In an effort to combat desertification, Elbegdorj declared the second Saturday of May and October "National Tree Planting Day" and appealed to individuals, communities and the private sector to make tree-planting a habit. Since 2011, over two million trees have been planted across Mongolia's vast desert regions.

Elbegdorj is also exploring ways to utilize solar power, especially in the sparsely populated Gobi region. According to the Mongolian Institute for Sustainable Economic Development, 70 per cent of the country has been classified as having high insolation (Incoming Solar Radiation) of 5.5-6.0 kWh/m2 per day, creating huge potential for solar power generation.

Since July 2011, Elbegdorj has been chairing the Community of Democracies, a grouping of countries that works to strengthen democratic norms and practices worldwide. In 2009, he was a member of the World Economic Forum's Global Agenda Council on Climate Change and has lectured on environmental protection abroad.

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Ulaanbaatar, Mongolia, June 5 /MONTSAME/ The President of Mongolia Ts.Elbegdorj will take part in the 12th meeting of the 12th Meeting of the Council of Heads of Member States of the Shanghai Cooperation Organization (SCO) to run on June 6-7 in Beijing, China.

The President will address an expanded meeting of the Council in order to express a position of Mongolia on active participation of Mongolia in the SCO's activities as an observer and on deepening the bilateral cooperation with the SCO members and observers. He also will give a brief report on the socio-economic situation in Mongolia.

During the meeting, the President will hold meetings with State Heads and representatives of the People's Republic of China and other countries for sharing views on the bilateral relations and cooperation.

The Meeting of the Council of Heads of the SCO Member States is a summit of this organization and makes vital decisions of the organization's actions. Mongolia attended this meeting in 2005, 2006, 2007 and 2010 at the Presidential level.

Link to Montsame


Education Minister Yo. Otgonbayar reported on his Twitter today the origin has been proved to be from Mongolia and announcement to be made tomorrow


Ulaanbaatar, Mongolia, June 5 /MONTSAME/ On Monday, a delegation of working group representing the Mongolia's government left for New York City to inspected origin and legal ownership of the Tyrannosaurus bataar dinosaur skeleton that was auctioned on May 20 by the ''Heritage auction" company.

As of present, the Mongolia's government has sent to the Heritage Auctions an English translation of the laws on protecting pieces of cultural heritage, on special license for entities and the criminal law in respect of a request of Robert Painter, an attorney for the Mongolian side.

According to Mr. Painter, an analysis will be done to detect origin of the skeleton, with participation of Kh.Tsogtbaatar, a manager of Lab Museum of the Paleontological Center at the Academy of Sciences; and B.Naranzun, a head of the working group. The analysis team has comprised Dr. Mark Norell, a chief of the Paleontological Division at the American Museum of Natural History; and Dr. Philip Kerry, president of the Canada's Institute of Vertebrate Paleontology. It also will be attended by Chuluunkhuu, the First Secretary of the Mongolia's Embassy in the USA; and P.Tsagaan, a senior advisor to the State Head.

Link to Montsame


Mongolia: Setting the tone for investment

June 4 (Oxford Business Group) Concerns that a new foreign investment law would severely impact Mongolia's natural resource sector and economy as a whole are beginning to ease, as industry players now see that reformed legislation is necessary for the country's economic evolution.

Reports in early May that the Mongolian government was planning to enact wide-ranging limits on foreign ownership in several sectors, including mining, agriculture and banking, led to speculation over an investor exodus, despite the country's vast and untapped metals and coal reserves.

According to a recent report in The Ulaanbaatar Post, "Approval of the current draft law will be felt throughout the country, as decreasing investment drives down disposable income and job security. Politicians behind this law will be to blame for a large missed opportunity for further growth and wealth to all Mongolians".

However, in a nod to foreign interests, the law's provisions were significantly diluted before its approval on May 17. Projects worth more than $80m will not be required to have majority Mongolian ownership. Additionally, the number of strategic sectors that were previously required to be 51% state-controlled was also reduced. The legislation is also not retroactive; various mining companies have confirmed that existing iron ore and other projects will not be affected.

Indeed, some investors believe these regulatory changes will eventually improve the long-term prospects of the country. Officials from Aspire Mining, which owns the Ovoot coking coal mine and rail project in northern Mongolia, told Reuters that the new law would provide more certainty for investors in Mongolian resources and that it would not limit potential funding sources for Aspire's mine and rail project, which is expected to cost a total of $2bn.

The law tightens a liberal investment regime, built in the 1990s on advice from international organisations, particularly the World Bank, which aimed to spur growth in the post-Soviet economy. However, these plans were made before the country's vast minerals wealth became apparent, with the massive Oyu Tolgoi copper and gold mine set to double the size of the economy when it comes on-stream in 2013. The giant Tavan Tolgoi coal deposit will also play its part, as it is estimated to hold some 6bn tonnes of reserves.

"It is a good law for Mongolia and provides stability and clarity for investors," said Eric Zurrin, the CEO of ResCap, a boutique investment bank in Ulaanbaatar. "This brings Mongolia more in line with mature, resources-rich economies, such as Australia and Canada."

The investment legislation – which requires a parliamentary review of investment by foreign state-owned enterprises – is seen as protecting against China buying up large segments of Mongolian industry. However, it is unlikely to impact on minerals demand from the energy-hungry giant and may serve to improve Ulaanbaatar's negotiating power.

Coal imports from China are expected to more than double by 2015, with India close behind, as both continue to take up supplies on international markets to feed their rapidly growing power industries. In mid-May, India's state-owned steel authority announced it would acquire a mine in Mongolia, as well as establish the country's first steel plant to lower its dependence on Australian coking coal.

The introduction of this law is likely to be viewed as political posturing before elections on June 28, with the ruling party seeking to reassure Mongolian voters that foreign entities will not enjoy the spoils of the country's hoard of coal, copper, gold and other natural resources on their watch.

However, it can also be argued that the legislation seeks to put the interests of future generations of Mongolians ahead of foreign investors by protecting the country's precious natural resources from overexploitation. However, encouragement of grassroots growth in industries other than mining will also help see domestic firms take a firmer grasp on the economy's future.

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Problem and Prospects for Investment and Balanced Development in Mongolia

By Paul Sullivan, Georgetown University

June 6 (UB Post) One of the major lessons of development is that the real business of development is not done by the government, but by businesses. Government is there to facilitate, protect and make things a bit smoother. This is how most of the developed countries succeeded in developing.

Surely, government can help with some research and development, proper tax laws, developing some infrastructure plans, and the like. The main usefulness of government is in protection of the country, via the military, police and so forth. Firefighters and other "first responders" are also mainly a government responsibility. The government also should hold certain institutions that enforce proper regulations and laws with proper checks and balances across government agencies, departments and sectors. Checks and balances are key elements of balanced development. Without them, one part of the government could become all powerful and simply take over a country's policies and prospects.

If one were to look at "Doing Business 2012: Mongolia" by The World Bank, one could see some rather important sets of data. First off, out of 183 countries looked at Mongolia rates about 83 out of the 183, with 183 being the most difficult country to do business in. Mongolia is about average for the Asia and Pacific Region, a bit better than China, 91, and a lot better than Russia, which is at 120 out of 183.

One can start a business in Mongolia a lot easier than in China or even in Japan. However, according to The World Bank, it is far easier to start a business in South Korea and Taiwan. Maybe there are some lessons there for Mongolia? However, over the last few years it has become cheaper and faster to start a business in Mongolia.

In addition, according to The World Bank, handling construction permits is quite complex, expensive, and time consuming in Mongolia compared to many other countries in the region, but it still is a lot easier than in China, Russia and Kazakhstan.

It is shocking how difficult it is to get electricity to a business in Mongolia. According to The World Bank, Mongolia is one of the hardest, most expensive and most complex places in the world to get an electricity hookup. Russia, once again, is much worse, but here China is better. However, this is not saying much given all three rates over 100 out of 183, with Mongolia as 171.

Surprisingly, registering property seems to be much easier in Mongolia than in many other countries in its region. Getting credit also, according to this World Bank Report, it about the level of Japan and much better than China, Russia and Kazakhstan. Investor protections also seem a lot better in Mongolia than for China and Russia. The ease of paying taxes is also a lot better in Mongolia than in Russia and China. It is even easier than in Japan. The documentation to trade across borders and the time to make such trades happen is not good for Mongolia. It is about 159 out of 183, but Russia and Kazakhstan seem a lot worse. Enforcement of contracts seems good in Mongolia compared to its neighbors, but resolving insolvency looks to be a complex, expensive and time-consuming mess in the country. A lot more work could be done on that.

So compared with its neighbors Mongolia is doing fairly well as a place to do business, but compared to some of the most competitive and best places to do business in the world it is far behind in most categories. A lot of work could be done on that.

Turning to The World Competitiveness Report of the World Economic Forum we can see another side to the issues facing Mongolia and its potential investors. When it comes to overall competitiveness in Mongolia is listed as country 96 out of the 142 listed. It is at about the level of Cambodia, Serbia, and Gambia.

Of the companies and others asked most found the biggest problems of doing business in Mongolia to be the following. Inefficient government bureaucracy was number one. Close behind that was an inadequately educated work force. Then there was corruption and then inadequate infrastructure. About 53 percent of the respondents found these factors to be the most problematic issues facing business investments in Mongolia. Policy instability, access to financing, poor work ethic of the labor force, and inflation were seen as the most important problems of doing business in Mongolia by about 30 percent of the respondents. Tax regulations, poor health of the work force, government instability, crime and theft, foreign currency issues, and a few other things were given low scores on average by the rest of the respondents.

Of course, these are surveys and the situation on the ground is always quite a bit more complex. However, Mongolia might want to focus on improving some of the problems found in The World Bank and World Economic Forum reports. Fixing some of these problems could go a long way in improving investments in the country, helping to diversify investments in the country, trying to reduce a sense of risk of investing in the country, and getting more Mongolians to work.

Mongolia has huge potential to be a developed, prosperous and peaceful country if its development is done right and in a way that is considered fair and diversified by its people. If its development becomes too lopsided towards a few investments or a few groups of people, and the fairness of it all goes off the wire according to the people of the country then Mongolia could have many years of going backwards. It does not need that. Respectfully, I recommend that these issues presented and others be thoughtfully considered.

It would be great if I were to be able to visit Mongolia in a couple of decades with my family and see a bustling, peaceful, healthy, well-educated, and prosperous people. It would also be very good to see balanced development and few political tensions. So far, Mongolia looks like it has the potential outdo many of its neighbors in how to do business and in competitiveness over the coming decades. However, that is not guaranteed.

Link to article


Democratic Challenge in Mongolia

June 4 (Forbes) The U.S. and other Western democracies have spent the better part of the last decade pushing for democratization across the globe. We have intervened in Iraq, Afghanistan and Libya and supported countless other efforts with aid and ideas to press democratic ideals for the disenfranchised and oppressed.

While this is undoubtedly a worthy cause, there are still instances when even democratic nations need our attention. What is currently happening in Mongolia is a sharp reminder that we cannot ignore nations that are burgeoning democracies who suffer from crippling democracy deficits.

Former Mongolian President Nambaryn Enkhbayar is due to stand trial today on charges of corruption and of misusing property and government powers. He was arrested in a televised dawn raid in April where viewers saw Mr. Enkhbayar shoved into a van with a sack over his head. The charges, he says, are a complete fabrication.

Mr. Enkhbayar reports he was never questioned in prison and after two weeks he was charged. In response, he began a hunger strike, attracting support from Amnesty International which has taken up his case and asserted that his detention "appears to be arbitrary." He is still recuperating from the 11-day hunger strike that doctors say could have killed him.

The reason for all this? Mr. Enkhbayar argues the authorities want to keep him out of parliamentary elections on June 28th. The current president, Tsakhia Elbegdorj, won his seat in 2009 from Enkhbayar and under his watch corruption has become an increasing issue – Mongolia has moved from about 90 to 120 of 183 countries included in Transparency International's annual corruption index.

On his situation, Mr. Enkhbayar said "In all countries where the political opponents are removed from contesting, the leaders of the country use corruption as an excuse." If his Mongolian People's Revolutionary Party won parliamentary seats in the upcoming election they would have the right to nominate a presidential candidate in 2013, a reality that Mr. Enkhbayar argues President Elbegdorj is trying to avoid.

We cannot let this corruption trial sideline Mr. Enkhbayar for the parliamentary elections. We stand for free and fair elections and unequivocally against selective prosecutions. His case must be carried out in full accordance with basic democratic principles of fairness and transparency.

The West has praised Mongolia for its transition to democracy in the past. There must therefore be a coordinated international response to ensure that the current Mongolian government allows Mr. Enkhbayar to run in their parliamentary elections later this month. Anything less would be negligent on our part and a case of selective enforcement of our stated principles.

Mongolia also holds special strategic and economic importance. It is sandwiched between Russia and China, a crucial location. Mongolia can also have a bright future as an exporter (Mongolia is rich in gold, copper, and coal). There is also the possibility of it becoming an energy supplier in its own right.

Therefore, we cannot let Mongolia, or any democratic nation for that matter, backslide to authoritarian or extra-legal policies and governing approaches. As I've said, we stand for democracy and freedom in all instances. We must demonstrate this not just in transitioning nations, but also in those that are established democracies and showing signs of waning.

Link to article


Trial of Ex President Draws Worldwide Press Attention

June 6 (UB Post) On Monday at 10 a.m., the trial of the Head of the Mongolia People's Revolutionary Party N.Enkhayar begun, at the Sukhbaatar District Court. The trial was overseen by S.Soyombo-Erdene, and the acting judges were M.Aldar and S.Oyunchimeg. Outside the court, N.Enkhbayar's party's board, his son E.Batshugar and other affiliates gathered to support N.Enkhbayar. The Sukhbaatar District Police provided security.

N.Enkhbayar who did not attend the previous hearing due to poor health, attended the trial this time. Ten minutes before the start, N.Enkhbayar arrived in an ambulance from Clinical Hospital II, accompanied by nurses and personnel from the Court Decision Implementation Office. When he came out of the emergency vehicle, his party members and supporters chanted "Truth will triumph, you will win, and we will support you".

The Police notified the gathered members of his party that they would not be able to attend the trial because the Sukhbaatar District Criminal Case Courtroom has a capacity of only 21 people. N.Enkhbayar's son E.Batshugar, the General Secretary of MPRP N.Udval and Board Member of MPRP L.Tsog were allowed to attend the trial along with few people from the press.

The trail was opened at 10:10 by the court secretary. N.Enkhbayar, D.Chuluunbat, J.Myagmarjargal and D.Dulamsuren were accused of violating Criminal Law, Section 263.2 and 150.3.

N.Enkhbayar requested that the trial be postponed because he is refusing to be defended by L.Shinen, B.Ganbaatar and wishes to chose another lawyer, B.Oyunbileg as his attorney. He also claimed he was not able to study the case files due to his poor health. Lawyer B.Oyunbileg who studied the condition of the Tuv Province Detention Centre where N.Enkhbayar was detained, stated that he had not studied the case files. After the request the trial took a short break.

After the break at 10:45, the court decided to accept N.Enkhbayar's request and set the date of the trial on June 12th at 10 a.m.

Judge S.Soyombo-Erdene stated, "Your request is in accordance with legal policy therefore we accept. The newly appointed lawyer B.Oyunbileg has to complete the study of the case files by the deadline, and that applies to N.Enkhbayar as well. The next trial will not accept the excuse of not having finished studying the case files."

Lawyer B.Oyunbileg stated, "A third party is not allowed to interfere with the election committee and its proceedings, but the General Election Committee has denied my client to enter the elections as a candidate, on the request of Deputy Head of Ulaanbaatar City Prosecutor's Office Ye.Sagsai and the General Judge of Sukhbaatar District Court S.Soyombo-Erdene."

Attorney Jim Odis of an American law firm was present during the trial as an observer and he has answered some questions.

-Can you introduce yourself? And have you come to attend the trial?

-My name is Jim Odis. I am a lawyer, I have my own firm. I'm from USA, Atlanta. I came to the trial today as an international observer at a request. You could say that I came to study the legal proceedings and environment in Mongolia.

-You said at a request. May I ask whose request?

-I came at a request from a law firm in US. I did not come at the request of any politician or a party and I do not receive any payment for this. I am very interested in civil and criminal cases in the world. Since I specialize in this field my job is to observe and study legal environments and proceedings. I came to note whether the court and legal proceedings are in accordance with the law.

-Where else have you worked as an observer?

-I have worked as an official observer in Syria, Africa, Denmark and Egypt.

-Will you be observing the trial eight days from now?

-I can't say for sure.

-You have witnessed the trial of someone who was the President of Mongolia. What is your impression?

-I think the court procedure was very fast. My impression is that the preparation wasn't sufficient.

-Have you studied the case? Do you have any information about this case?

-Of course I studied the necessary information. I also read many articles and talked to people about the case and assessed the facts.

-And what is your impression?

-I can't pass judgement at the moment. I need time and more information.

-Are the people with you also international observers?

-Yes, they are also lawyers.

Link to article


Former Mongolia president's trial put back

June 4 (FT) The corruption trial of Nambaryn Enkhbayar, Mongolia's former president, has been postponed until June 12.

The trial was set to begin on Monday but the judge granted Mr Enkhbayar's request for a delay so that his lawyers could have more time to prepare the case, Mr Enkhbayar's son told the Financial Times.

The trial is Mongolia's highest-level corruption case and is seen as a belwether of how the young democracy, which sits atop vast mineral resources, will handle graft accusations.

Mr Enkhbayar, who had been planning to run for parliament in the nationwide elections at the end of this month, insists the charges are politically motivated and the timing is designed to exclude him from the election. He went on a 10-day hunger strike in May to protest at what he says was unfair treatment by judicial authorities.

Lady Ashton, the EU foreign policy chief, said over the weekend that the European bloc was closely following the case.

"We trust that this case will be treated transparently and with full respect for democratic principles, the rule of law and human rights. The EU reiterates its full support to the strengthening of democratic processes in Mongolia," said a statement from Lady Ashton's office.

Link to article



June 4 ( On June 04, the "Financial report for exploration and mining companies" seminar has made its opening at the conference hall of the Banking and Finance Academy, Ulaanbaatar.

This seminar is being organized for duration of 5 days by the "Comprehensive initiative of mineral resources and raw materials" project of the German Community of International Cooperation, together with the Banking and Finance Academy (under Mongolian Bankers Association) and the Financial Sector Capacity Building and Training Project of the Luxembourg Agency for Development Cooperation. The training will be conducted by the administrative officials of the "Price Waterhouse Coppers", which is an internationally recognized audit company.

Link to article



Ulaanbaatar, Mongolia, June 5 /MONTSAME/ Mongolia's "EZNIS airways" private company is going to receive a new Boeing 737-700 from the International Lease Finance Corporation /ILFC/ company in the USA in so as to extend the international air route of the country. The new plane will land in Ulaanbaatar at first half of June.

As of the first quarter of 2012, Mongolia's international transportation flow has been increased by 30 percent comparing with previous year.

The ILFC takes the first place in the world with price of its owning planes, and second place with its fleet. A contract on delivering the airplane was signed by an executive director of "EZNIS airways", S.Monkhsukh and a director in charge of Asia Pacific region of ILFC, David Nixon last March.

Boeing 737 is middle-distance jet which can make non-stop flight from Ulaanbaatar to Beijing, Soul, Tokyo and Hong Kong. It is the plane of higher selling in the world air transportation sector.

Link to Montsame



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