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.
CPS Securities was Lead Manager and Broker to EUM's IPO this year
Eumeralla Resources begins quest for tungsten in Mongolia
June 20 (Proactive Investors) Newly minted Eumeralla Resources (ASX: EUM) is nearing the start of exploration at its minerals exploration licence in northeast Mongolia which covers 12,657 hectares including the historical Chuluun Khoroot tungsten mine.
The company has inked a contract for the provision of initial mapping, sampling and surveying of the licence which is set to begin in late June.
The mapping and sampling, which is due for completion in late August, will pave the way for the start of a drilling program.
The licence is located about 20 kilometres north of the town of Dashbalbar and 85 kilometres northwest of the Solowevsk-Choibalsan railway.
Previous exploration at the project has defined tungsten targets, but follow up exploration has been limited.
Meanwhile, Eumeralla has been conducting legal and geological due diligence of several projects in both Mongolia and Myanmar.
Recent political and economic developments in Myanmar have attracted Eumeralla to the region, where it is assessing several tungsten and tin exploration leases.
The southern regions of Myanmar include areas belonging to the southeast Asian tin belt which includes parts of Indonesia, Malaysia and Thailand and at times produced 65% of the world's tin and the largest percentage of the world's tungsten.
SouthGobi Resources starts construction on new coal highway
A ribbon-cutting ceremony was held June 16 to commemorate the start of construction. The paved highway will have an intended carrying capacity upon completion in excess of 20 million tonnes of coal per year.
"The new paved coal highway will significantly increase the safety of coal transportation to the border, reduce dust, and improve efficiency and capacity of coal transportation," SouthGobi's president and CEO Alexander Molyneux said.
In August 2011, the State Property Committee of Mongolia awarded the tender to construct a paved highway from the Ovoot Tolgoi Complex to the Shivee Khuren Border Crossing to consortium partners NTB LLC and SouthGobi Sands LLC, a wholly-owned subsidiary of SouthGobi Resources (together referred to as RDCC).
On October 26, 2011, RDCC signed the concession agreement with the State Property Committee of Mongolia.
RDCC now has concluded a 15-year build, operate and transfer agreement under the Mongolian Law on Concessions.
SouthGobi Resources is focused on exploration and development of its Permian-age metallurgical and thermal coal deposits in Mongolia's South Gobi Region.
The company's flagship coal mine, Ovoot Tolgoi, is producing and selling coal to customers in China. The company plans to supply a wide range of coal products to markets in Asia.
1733 closed +23.26% at HK$1.59 today with 65.4m shares traded
Winsway: UNUSUAL PRICE AND VOLUME MOVEMENTS
June 20, Winsway Coking Coal Holdings Limited (HK:1733) --
This announcement is made at the request of The Stock Exchange of Hong Kong Limited (the "Stock Exchange").
The board of directors (the "Board") of Winsway Coking Coal Holdings Limited (the "Company") noted today's increase in the price and trading volume of the shares of the Company and wishes to state that it is not aware of any reasons for such increase.
The Board conﬁrms that there are no negotiations or agreements relating to intended acquisitions or realisations which are discloseable under Rule 13.23 of the Rules Governing the Listing of Securities on the Stock Exchange (the "Listing Rules"), neither is the Board aware of any matter discloseable under the general obligation imposed by Rule 13.09 of the Listing Rules, which is or may be of a price-sensitive nature.
Made by the order of the Board, the directors of which individually and jointly accept responsibility for the accuracy of this statement
Financial Press: From Near Surface to 255 Meters Deep, Altan Rio Strikes Gold in Mongolia
The most recent assays are in from Altan Rio's1,900 meter drill program on its 100% owned Khavchuu gold exploration project located in northern Mongolia.
Vancouver, BC (PRWEB) June 20, 2012
The most recent assays are in from Altan Rio's (TSX-V: AMO) 1,900 meter drill program on its 100% owned Khavchuu gold exploration project located in northern Mongolia.
Assays have returned down-hole gold and arsenic anomalies intersected over a 4 x 6 kilometer area including a high grade intersection in hole KH-05 at 11.49 g/t gold within Boroo-type host rocks and alteration. Khavchuu covers 714 square kilometers and is part of the world famous Yeroogol Gold Belt of Northern Mongolia. Altan Rio is riding high on the first results, in a continuous stream of data collected from field programs through to the goal of development of a resource calculation. Altan Rio is focused on expanding the known gold zone on the Khavchuu property and the company is confident that the best is yet to come.
Evan Jones, Altan Rio's President and CEO, remarked: "I am pleased to share with our investors this discovery of high grade gold mineralization in a Boroo-style geological setting with potential large tonnage possibilities. Our exploration team has successfully demonstrated its ability to target and explore the large Khavchuu gold system, only 10 km from Centerra Gold's Boroo mine and mill complex. We are encouraged by these results and plan to advance the gold discovery with a focused exploration campaign."
Altan Rio's Results
According to the press release issued June 13th, 2012, Jones' confidence is well-merited. Just 3 months after announcement of the commencement of the first pass drill program at Khavchuu and the company has returned significant assays outlining warranted targets for further drilling.
Drilling Highlights at Khavchuu
Ø Seven wide-spaced reconnaissance core holes for 1,902.2 m were completed on budget
Ø Five of the seven holes intersected significant gold and/or arsenic anomalies, the main geochemical indicators for large-scale orogenic gold deposits in the Boroo region
Ø Hole KH-05 intersected high grade gold (11.49 g/t over 1 m) in a structurally complicated area on the edge of a large Boroo complex granite
Ø Holes KH-01 and KH-03 intersected low angle structures that contained Boroo complex granite with similar alteration over intervals as broad as 80 meters, with locally anomalous gold
Ø Comprehensively the outcome of the first pass reconnaissance drill program was seen very positively as the seven holes drilled where over a large area. Low angle structures where determined, much alike those that are host to mineralization at the nearby Boroo and satellite deposits. The presence of anomalous gold and elevated arsenic is of high promise as it is potentially representative of the distal portions of economic mineralization, perhaps several hundred kilometers away.
Ø The high grade gold discovered in KH-05 is of significant pertinence as it represents a single mineralized hole in a very large area of anomalous geochemistry and geophysics with the IP anomaly broadening and increasing in amplitude to the north. This new gold discovery zone is an exciting development, and certainly adds to the prospectivity of the Khavchuu project. Given its strategic location, being in close proximity to Centerra's Boroo mill complex, follow- up drilling is certainly warranted.
The Gem of Mongolia: Yeroogol Gold Belt
The Yeroogol Gold belt is an emerging prolific resource district in resource rich Mongolia. Mongolia has seen a boom in resources in recent years and is a stable political jurisdiction for foreign investment in the mining and mining exploration sectors. It's not just the fact that Mongolia is a dragon's den of geological wealth, it is directly next to the world's biggest and fastest-growing market for most minerals, China. Put together Mongolian supply and Chinese demand, and Mongolia will be rich beyond any current forecasts or speculation. The development of two deposits on the Yeroogol belt, the Gatsuurt gold deposit and the Boroo deposit, points to the exploration potential for discovery of a million ounce plus gold deposit for Altan Rio. During his tenure with Cameco Gold, which was later spun out to form Centerra Gold, Altan Rio's director of exploration Kelly Cluer had a key role in discovering the 2Moz open pit deposit at Gatsuurt. The Boroo deposit has been a production powerhouse on the Yeroogol belt and has produced about 1.5Moz of Au since it opened in 2004 and currently has approximately 9.7M tonnes of proven and probable reserves remaining containing 298,000 oz of gold.
Follow the company's progress at http://www.altanrio.com
Xanadu Mines Director Ganbayar Becomes Substantial Holder With 7.2%
June 20 (Mogi) Xanadu Mines (ASX:XAM) Non-Executive Director and Executive Director – Mongolia Mr. Ganbayar Lkhagvasuren notified the company of becoming a substantial holder with 7.2% stake by purchasing 10,869,565 shares off market at 23c for total consideration of A$2.5m, bringing his total holding to 14,389,565 shares.
FEO raised A$42.5m at 25c on its 2011 IPO
Regal Fund Ceasing to be Substantial Holder in FeOre, Selling at 16c
June 19, FeOre Limited (ASX:FEO) --
More time is required to finalize purchase of aerial photography firm
MIG: HOLDING ANNOUNCEMENT
June 20, Mongolia Investment Group Limited (HK:402) --
Reference is made to the announcements of Mongolia Investment Group Limited (the "Company") dated 12 December 2011 and 28 May 2012 in relation to, among others, a very substantial acquisition of the Company.
Unless otherwise defined, capitalised terms used herein shall have the same meanings as those defined in the announcement of the Company dated 12 December 2011.
The Company makes this holding announcement to inform the Shareholders of the current status of the very substantial acquisition. On 26 May 2012, the Group entered into an acquisition agreement (as amended and supplemented by an acquisition supplemental agreement dated 1 June 2012) in relation to the acquisition of the entire equity interests in the Target Company. The Target Group is principally engaged in the business of aerial photography, aviation and aerospace remote sensing image data processing, provision of GIS software and solutions. Trading in the Shares has been suspended with effect from 9:00 a.m. on Monday, 28 May 2012, pending the issue of an announcement in relation to such very substantial acquisition of the Company. The Company is currently in the process of preparing and finalising the announcement in relation to the very substantial acquisition. The Board considers that additional time is required for such purpose. The announcement setting out the details of the very substantial acquisition will be published by the Company as and when appropriate.
Suspension of trading in the shares of the Company will continue until the publication of the announcement in relation to the very substantial acquisition.
Origo Partners PLC: Posting of Annual Report and Accounts
June 20, Origo Partners Plc (OPP:LON) --
Origo Partners Plc ("Origo") has posted its 2011 Annual Report and Accounts to Shareholders together with the notice of Annual General Meeting to take place at 4th Floor, 1 Circular Road, Douglas, Isle of Man, IM99 3NZ on 20 July 2012 at 10.00am. Copies of the Annual Report and Accounts are available in accordance with the AIM rules on the company's website at: www.origoplc.com
Robe has A$696,444 cash at end of month
Robe: Monthly Report
June 19, Robe Australia Limited (ASX:ROB) --
MSE ORGANIZES BAYALAG NALAIKH JSC BLOCK TRADING
June (MSE) According to resolution No 277A of Bayanzurkh district court of 16th 2009, MSE organizes block trading of "Bayalag Nalaikh" JSCompany's (BNB:MO) 99 800 units at 1 267 tugriks, the highest price of recent 6 months on the day of 21st Jun 2012 in accordance with Securities trading regulation.
Government needs $1.1b to cover ETT share buyback
June 20 (Mogi) 1,532,853 citizens requested to have their 1,072 Erdenes Tavan Tolgoi shares bought by the government for a million tugrug for each lot, bringing the government total bill to ₮1.53 trillion or almost $1.2 billion, according an official press release on today's regular cabinet meeting.
On the other side, 1096 companies ordered to purchase a total of 93 million shares, which translates to proceeds of ₮86.77 billion for the government.
Minus the above, government owes $1.1 billion to it's citizens
Mongolia Tavan Tolgoi IPO likely in 2013: Igata
BEIJING, June 19 (Marketwatch) -- Mongolia's government is planning to launch an initial public offering for the Tavan Tolgoi coal mine and list it in the first quarter of next year, the chief executive of a Mongolia-based investment bank that advises the government on mining policies said Wednesday.
The government plans to list shares of Tavan Tolgoi simultaneously in London, Hong Kong and Ulaanbaatar, but a listing in the second quarter might be "more reasonable" given global macroeconomic uncertainties and the deposit's valuation issues, Frontier Securities CEO Masa Igata told Dow Jones Newswires in an interview.
Mr. Igata said questions over the mine's as-yet-unbuilt railway infrastructure haven't been resolved. (Mogi: Construction of adjacent UHG's railway has begun this June)
The mine produced 1 million metric tons of coal last year and is expected to produce 3 million-4 million tons this year. Production will likely rise to 7 million tons next year and 20 million tons by 2015-2017, Mr. Igata said.
The Tavan Tolgoi coal mine in Mongolia's southern Gobi region has estimated reserves of as much as 7.5 billion tons of coal, including the world's largest deposit of coking coal, a steelmaking material.
Japan's Sojitz aims to triple Mongolian coal sales to China
TOKYO, June 20 (Reuters) - Sojitz Corp <2768.T>, Japan's third-biggest coal trader, aims to more than triple Mongolian coal sales to China within three years as it seeks to handle 10 percent of the country's growing sales of the mineral to the world's top consumer.
Sojitz, Japan's sixth-biggest trading company, expects its acquisition of a 10 percent stake in Mongolian resources and coal distributor - Inner Mongolia Zhongmeng Coal Co, a unit of Inner Mongolia Erdos Group - to help boost its China sales, Masaaki Bito, Sojitz's general manager, told Reuters.
Chinese firms are collectively the world's largest spot buyer of thermal coal, but their demand for coal has flagged in recent months due to an oversupply of the fuel in Asia.
The Australian Newcastle coal spot index, the benchmark for Asia, has dropped below $84 per tonne, down 26 percent from the beginning of the year, while Chinese domestic coal prices have slipped about 8.5 percent during the same period. <COAL/ASIA>
While the bearish coal market is a concern, demand from China for Mongolian coal is expected to pick up and may more than double in three years, Bito told Reuters on Wednesday.
Sojitz is aiming to boost its Mongolian coal sales to China to 3 million to 5 million tonnes a year within three years. It now sells 1 million tonnes through Zhongmeng, which has coal stockyards, trucks, washing plants at the border area between China and Mongolia and a key cross-border export license.
Sojitz, which is seeking a stake in Mongolia's massive Tavan Tolgoi coal deposit as part of a Japanese and South Korean consortium, expects China's demand for Mongolian coal to grow to 30 million to 50 million tonnes in three years, up from 20 million last year.
Apart from Mongolian coal, Sojitz also sells 8 million tonnes a year of Australian coal, 7 million tonnes of Indonesian coal and 3 million tonnes of Russian coal to Japan and other Asian countries, Bito said.
Bito shrugged off concerns about a possible move by Indonesia, the world's biggest thermal coal exporter, to curb coal exports and tax shipments of the mineral. Indonesia has so far steered clear of taxing coal exports.
Bito said he expected coal to be eventually exempted from the export restriction and the tax plans. Sojitz has an equity stake of 2.5 million tonnes of coal in Indonesia.
Focus on Asia - Extracting wealth and returns from Mongolia
June 20 (Investment Europe) If you were disappointed by your equities in 2011, you probably were not invested in Mongolia's, which rose 15%. As the country prepares for elections, FMG's Arild Johansen told Investment Europe why his firm has launched a fund focused on the country.
He says Mongolia's resources make it a future commodity giant.
Some onlookers are already dubbing its capital 'Ulan-Qatar' in oblique reference to the Middle Eastern nation that enjoyed a stellar rise off the back of a commodities-fuelled boom in the 1990s.
As a frontier market, the Mongolian Stock Exchange (MSE) is largely insulated from global trends, and showed this in 2011 by rising by more than 15%.
The London Stock Exchange has been hired to help bring the MSE to the Londoner's standard within three years. The LSE anticipates that the domestic stock market will increase from approximately $3bn to $45bn within 10 years.
"The stock market currently has shallow and sporadic trading," says Arild Johansen, director of FMG's Mongolia fund.
"Volumes are low and stocks can move dramatically. Stocks can be quite cumbersome to purchase. What we look at as the catalyst for Mongolia, is the work they are doing with the London Stock Exchange, working to improve free float and to delist companies that shouldn't have been listed."
In its economy, Mongolia's wealth is in the ground.
The estimated mineral wealth in Mongolia's 10 largest mines would make multi-millionaires out of every one of its 2.8m inhabitants, were it shared evenly.
The majority of the country's mineral wealth remains unexplored, but it is still well placed to supply China, whose insatiable appetite for natural resources places it top of global commodities consumption tables.
This demand helped the tiny Mongolian stock market record the strongest growth worldwide in 2011, as Western rivals, and many other developing markets, lost value.
FMG's recently launched $3m fund is intended to capitalise on the country's booming economy and its close economic links to China. FMG hopes the fund will grow to up to $20m over the next few years.
Arild Johanson, director of the fund, said: "Growth will be led by mining exports, but you will continue to see local GDP firming up, which will lead to consumer stocks growing stronger. For example, two thirds of the population live in girs [locals' tent accommodation], we see many of them moving into housing which will grow, for example, cement production."
However, Mongolia's mining sector has been hit by uncertainty in past months.
Erdenes Tavan Tolgoi, a huge mine upon one of the world's largest deposits of coking coal, was expected to list in London, Hong Kong and Ulan Bator by this spring, but regulatory and political deadlock ahead of the country's parliamentary elections, slated for June 28, have seen the listing pushed back by at least six months.
Meanwhile, in April, some licences were revoked, and legislation to restrict foreign mine ownership were drafted, after the Chinese State-run mining company Chalco moved to buy a controlling stake in South Gobi, one of Mongolia's largest mineral exporters.
However Johansen believes that this political risk will not prove serious: "There is always tough talk before the election, but Mongolian politicians know that if they institute these laws, they will lose foreign investment. I don't think they will institute laws that are so harsh that the Billitons and Ivanhoes of the world will not step in."
Although the mineral wealth of Mongolia is beyond doubt, it will have some way to go before it can boast the consumer and financial markets of the Middle Eastern commodity players.
"I would say that it is Mongolia is really for the investor has a good time horizon for their money, and can accept a good degree of volatility," says Johansen. "Given low liquidity, we buy our names and hold them for the foreseeable future."
Mongolia flooded with millionaires
Ulan Bator (Mogi: Ulaanbaatar), June 19 (FT) Sitting in his traditional tent, Khaidav, a retired teacher, dreams of the wooden house he will build after one million tughrik ($760) (Mogi: tugrug) lands in his bank account this summer.
More than a million Mongolians like Khaidav, who goes by one name (Mogi: this is giving a wrong idea, rather it should be: goes by given name), will become tughrik millionaires as they sell shares in Tavan Tolgoi – the world's third-biggest coking coal deposit which is helping fuel the country's resources boom – to the government.
Mongolia, a resource-rich country of 3m people (Mogi: 2.8m) with a per capita gross domestic product of just over $3,000, has introduced policies to share its growing mineral wealth with its citizens.
One measure involved spreading 20 per cent of the shares in Tavan Tolgoi among the entire population. Until recently, people were unable to cash in because the planned public listing of the mine had been delayed.
But in May, ahead of parliamentary elections scheduled for next week, the government offered citizens a choice: sell their stake back to the state for one million tugrik or keep the shares and wait for the public listing.
More than half of the country opted for the cash, handing the government a bill of roughly $1bn, or a tenth of the country's GDP. However, many Mongolian elites criticise the handouts as premature because the mine, which is barely developed, has yet to produce the revenues that are expected.
Politicians have defended the buyback programme, saying they are just giving Mongolians a chance to participate in the mineral wealth.
"That was our biggest election campaign [promise] in 2008, and we fulfilled it," said Chimed Saikhanbileg, a candidate for the Democratic party. "Every citizen in Mongolia now owns 1,072 shares of Tavan Tolgoi, the equivalent of 1m tugrik."
The Democratic party will next week face off against the Mongolian People's party in parliamentary elections that will determine who governs the country for the next four years. The two centre-left parties who are campaigning on similar platforms, including using mining revenues to benefit ordinary citizens, have ruled together in a coalition for most of the past four years.
Tavan Tolgoi was supposed to set the standard for how the country would handle its mineral resources. Instead, it has become a cautionary tale, as the project has been delayed by politics in Ulan Bator and by geopolitical wrangling between China, Russia and other countries that want to play a part in its development.
The listing has also been delayed by uncertain global markets and the slow progress producing a new Mongolian securities law that will create the legal framework necessary for the three-city listing.
Mongolia is trying to wean itself off the handout culture that flourished in previous elections, in which campaigns competed for who could promise the most cash to voters. After passage of a new election law, candidates are now barred from making election promises about money or employment.
Tavan Tolgoi is a good example of how election promises can lead to mismanagement. As the government buys the Tavan Tolgoi shares back, it will resell some to Mongolian companies for the same price to reduce its bill.
"The 2008 campaigns were about who will give more cash. It cost us quite dear in the last four years because there was no money to implement this," says Oyun Sanjaasuren, head of the Civil Will Green party, which opposes cash handouts. "Tavan Tolgoi is quite a big, complicated equation, with a lot of unknowns still, like how do we deal with geopolitics, neighbours and strategic investors."
Other critics say the buyback scheme is taking badly needed cash away from the mine, which is very short of cash, mainly because it still produces only a small fraction – 4m tonnes a year – of its potential output.
B. Enebish, chief executive of Erdenes Tavan Tolgoi, the state-run company that manages the mine, defended the "unusual" buyback programme, but said the company planned on tapping international debt markets for "several hundred million" dollars to tide it over until the IPO. He said the offering was expected to take place next March or April in Ulan Bator, London and Hong Kong.
Jargalsaikhan Dambadarjaa, a popular Mongolian chat show host and political commentator, says the government is neglecting the development of the mine and instead focusing on meeting election promises in the short term.
"Our government counted its chickens before they hatched," he wrote in a recent column. "Tavan Tolgoi has become a mess rather than a coal deposit."
International Finance Corporation (IFC) to Invest $1.6m in Chinese-Mongolian Microcredit Company Urumqi Tianrong
June 18 (MicroCapital) International Finance Corporation (IFC), the private-investment arm of the World Bank Group, is making a CNY 10 million (USD 1.6 million) equity investment in Urumqi Tianrong Microcredit Company, a joint venture of Mongolia-based TenGer Financial Group (TFG), IFC and three unidentified investors from China and Mongolia. The amount of investment committed by TenGer and the other investors has not been disclosed. With its first branch opening in fall in the Xinjiang region of northwest China, Urumqi Tianrong aims to provide loans worth more than USD 200 million to 15,000 small businesses in the next two years.
Since 1999 IFC has been a partner of XacBank, a subsidiary of TenGer Financial Group (TFG) and a lender to micro-, small and medium-sized enterprises in Mongolia. IFC holds a 13.5-percent stake in the group. As of 2011, International Finance Corporation (IFC) has 182 member countries, total assets of USD 68.5 billion and USD 12.2 billion mobilized to 518 projects.
BoM issues 1-week bills worth ₮151B at 13.25% p.a.
June 20 (The Bank Of Mongolia) --
BoM issues 1-week bills worth MNT 151.2 billion at a weighted interest rate of 13.25 percent per annum. /For previous auctions click here/
1 - week CBBs
1 - week CBBs, a main monetary policy instrument of BoM, plays an important role on managing the reserves of the banks. This CBB rate represents BoM's policy rate guides interbank money market. In July 2007, the CBB with stable rate and unlimited bidding was introduced with auctions to be held on every Wednesday. This really had attracted the banks' interests providing the possibility for the banks to place their excess reserve in short term asset. There has been a substantial change in the way banks manage their reserves since then. For the favorable adjustment of CBB rate and loan principle along with the well balance of togrog and foreign exchange, 1 - week CBB has been held in a type of competing by rate since May 2005. The auction average rate is the targeted rate variables in +/-2 percent from the policy rate and it frames to make the interbank rate as the operational target in midterm.
BoM auctions $60.3m at ₮1333.01, ¥70m at ₮209.65
June 19, 2012 (BoM) – Forex auction: Meeting short term demand, the BoM sells USD 60.3 million / 77.3% of bids/ at closing rate of MNT 1333.01 and CNY 70.0 million at closing rate of MNT 209.65.
Orbitnet upgrades to iDirect's iDx 3.1 software to enhance satellite Internet Services in Mongolia
Internet service provider leverages new hardware and software features to improve efficiency and reduce costs
ERNDON, Va., June 18, 2012 /PRNewswire via COMTEX/ -- VT iDirect, Inc. (iDirect), a company of VT Systems, Inc. (VT Systems), today announced that Orbitnet LLC of Mongolia (Orbitnet), a leading provider of advanced Internet services in Asia, has upgraded its satellite network with iDirect's iDX 3.1 release, which includes software and hardware features specifically designed for large-scale networks. Through iDX 3.1, Orbitnet is able to make its service more efficient and cost-effective, helping the company attract new customers and expand its operations. iDirect is a world leader in satellite-based IP communications technology.
iDX 3.1 provides Orbitnet an ideal solution to grow its Internet service offering in Mongolia, Bhutan and throughout the APAC region. With more than 500 remote sites providing Internet connectivity to users in a range of markets, including banking, telecommunications, mining, and education, Orbitnet required a VSAT solution that was flexible enough to support multiple applications, while also offering the ability to scale affordably.
By upgrading to iDirect's iDX 3.1 software, Orbitnet has enhanced its service further by reducing customer start-up costs and improving data throughput. Additionally, iDX 3.1 allows Orbitnet to scale its business more profitably at both the remote site, through iDirect's new lower-cost Evolution X1 series of remotes, and at the hub site, with a new 16-channel narrowband inbound configuration for the Evolution XLC-M line card.
"In all of the markets we serve, reliable Internet access is critical to our customers' success. By implementing iDX 3.1, we have optimized our networks and reduced the costs of our service, giving our customers a satellite Internet solution that is reliable, affordable, and perfectly tailored for their unique needs. This new technology is providing us with the opportunity to better serve our customers in Mongolia and, at the same time, expand our market in the APAC region." ~ Battulga NOROLKHOOJAV CEO, Orbitnet LLC
"Internet connectivity is hugely important to Mongolia's economic growth and iDirect's solutions have enabled Orbitnet to provide a satellite Internet solution that is reliable and affordable. With the improved efficiencies of iDX 3.1, Orbitnet is better able to expand their operations throughout the region, win new customers, and bring the benefits of Internet access to a much broader audience." ~ GOH Wai Pheng General Manager, iDirect Asia
Orbitnet LLC was founded in 2004 as a Satellite communication service provider and currently provides all types of communication services including high-speed internet, telephony and data transmission connections through the satellite Ku-band to government & mining organizations, foreign and domestic banks, and tour and mobile operators. It has successfully expanded its service to all 21 provinces and 300 sums (territorial administrative unit within the province) of Mongolia. Furthermore, Orbitnet has successfully implemented several large scale nationwide projects, to be namely, the Passport Inspection system for Border port stations of Mongolia, Unified Government Fund Network, Government Video Conferencing System, eSchool project for Primary Education Institutes, and Communication, Navigation and real-time monitoring system for Mongolian Civil Airlines.
An industry leader owning majority percentage of the total satellite internet bandwidth in Mongolia, Orbitnet also caters to Bhutan and the APAC region.
iDirect, a subsidiary of VT Systems, is a global leader in IP-based satellite communications providing technology that enables our 350+ partners to optimize their networks, differentiate and expand their businesses. The iDirect Intelligent Platform(TM) allows our partners to run their entire business operations more efficiently via a single, unified IP-based satellite architecture, whether it's providing core IP applications to the enterprise or specialized services to any number of diverse vertical markets. iDirect is the #1 name in global satellite communications in key industries including maritime, military/government, and oil and gas, with a 62% hub market share and more than a quarter million remotes installed worldwide. In 2007, iDirect Government Technologies (iGT) was formed to drive adoption of its IP-based solutions in the U.S. government market. In 2008, iDirect Asia Pte Ltd was established in Singapore to enhance its value-add and responsiveness to customers in the Asia Pacific region. For more information please visit www.idirect.net .
VT Systems is an engineering company providing integrated solutions to the commercial and government markets in the aerospace, electronics, land systems and marine sectors. VT Systems' innovative solutions, products and services include aircraft maintenance, repair and modification; software solutions in training and simulation; satellite-based IP communications technology; network solutions that integrate data, voice and video; rugged computers and computer peripheral equipment; specialized truck bodies and trailers; weapons and munitions systems; road construction equipment; and ship design and shipbuilding. Headquartered in Alexandria, Va., VT Systems operates globally and is a wholly owned subsidiary of ST Engineering. Please visit www.vt-systems.com .
KIT Digital Selected to Manage and Launch Bloomberg TV Mongolia
Announces Key Customer Wins, Executive Appointments, and New Regional Headquarters
NEW YORK, NY--(Marketwire - Jun 18, 2012) - KIT digital, Inc. (NASDAQ: KITD), a leading video management software and services company, today announced key investments and executive appointments it has made in the Asia-Pacific region (APAC) designed to support its continued commercial growth there, as well as major customer wins it has recently closed. The company also announced that it will be exhibiting at the CommunicAsia2012 show in Singapore, June 19 - 22, 2012, where it will showcase its suite of video software solutions at stand 1P2-01.
Recent Customer Wins
KIT digital has recently signed a number of strategic commercial deals in the region, including:
· KIT digital was chosen to manage and launch the first broadcast channel of Bloomberg in Mongolia. Given the project's overwhelming success, the company anticipates being given the opportunity to launch Bloomberg channels in five additional APAC markets; and
About KIT digital, Inc.
KIT digital (NASDAQ: KITD) is a leading video management software and services company. The KIT Video Platform, the company's cloud-based video asset management system, enables enterprise, media & entertainment and network operator clients to produce, manage and deliver multiscreen socially-enabled video experiences to audiences wherever they are. KIT digital services nearly 2,500 clients in 50+ countries including some of the world's biggest brands, such as Airbus, The Associated Press, AT&T, BBC, BSkyB, Disney-ABC, Google, HP, Mediaset, MTV, News Corp, RCS MediaGroup, Sky Deutschland, Sky Italia, Telecom Argentina, Telecom Italia, Telefonica O2, Universal Studios, Verizon, Vodafone and Volkswagen. KIT digital maintains executive offices in New York and its operational headquarters in Prague, Czech Republic, with offices in 21 countries around the world. Visit the company at www.kitd.com or follow on Twitter at www.twitter.com/KITdigital.
Hogan Lovells: Mongolian Strategic Foreign Investment Law - Update
June 20 (Hogan Lovells) On 17 May 2012 the Parliament of Mongolia enacted the Law of Mongolia on the Regulation of Foreign Investment in Business Entities Operating in Sectors of Strategic Importance (the "Strategic Foreign Investment Law" or the "SFI Law"). The SFI Law was formally published in the State Gazette ("Төрийн мэдээлэл") Issue 23 on Tuesday, 19 June 2012.
Hogan Lovells previously circulated a newsflash based on the final form of the SFI Law presented to Parliament (prior to its approval and enactment) and a review of the final Plenary Session of Parliament. The official version of the SFI Law published on 19 June is identical to the final version in all material respects. We have prepared a translation of the published version of the SFI Law which we include with this update.
Since the publication of our newsflash, the Ministry of Foreign Affairs and Trade has published its own translation of the SFI Law, together with an introductory note. In that note, the Ministry explained the rationale behind the SFI Law and underscored that it was considered to be a "Golden Middle" between protecting national security interests of the state of Mongolia and encouraging foreign investment. Further, the Ministry indicated that the Government would create rules and procedures to support the SFI Law that are not unnecessarily costly or bureaucratic.
Informal discussions with Government officials and comments from the Mongolian President, Mr. Elbegdorj Tsakhia, suggest that the main thrust of the legislation is aimed against state-controlled entities. President Elbegdorj, in an interview with the Financial Times to open the recent Mongolian International Legal Forum held over 29-30 May and co-sponsored by Hogan Lovells, stated that he was open to the SFI Law being refined and improved. These comments give cause for optimism to private foreign investors that some of the more unclear and cumbersome elements of the SFI Law may in due course be clarified and improved in the next Parliamentary session following the Mongolian general elections on 28 June.
Implementing regulations are currently being drafted by the Foreign Investment Agency in the form of a Government Resolution and it is hoped that all relevant stakeholders will be properly consulted so as to ensure that the SFI Law is developed in a coherent and pragmatic manner.
In short, our view of the SFI Law as a speed bump, rather than a road block to foreign investment in Mongolia, remains unchanged.
Hogan Lovells: Mongolia – Revised Company Law
June 18 (Hogan Lovells) On 6 October 2011, the Parliament of Mongolia, the State Great Khural, adopted significant revisions to the Company Law of Mongolia (the "Revised Company Law" or "RCL"). The RCL came into effect on 21 November 2011, when the former Company Law ceased to be effective.
The key features of the Revised Company Law are:
· broadening of the personal liability of governing persons
· introduction of administrative sanctions for non-compliance
· stricter corporate governance rules
· changes in "major" and "conflict of interest" transactions provisions
· abolition of minimum capital requirements for companies
· introduction of closed joint venture companies
The enactment of the RCL is a step towards the government's aim of bringing Mongolian corporate governance standards closer to those found in more developed jurisdictions. Nevertheless, the law remains under-developed by comparison. The lack of precision in the drafting will cause some uncertainly until market norms emerge, and it introduces some unexpected pitfalls that have the potential to deter rather than encourage trade and investment.
The RCL requires that all companies amend their charters before 1 July 2012 in order to reflect the changes introduced. Whilst the coming into force of the RCL technically rendered any offending provisions of existing company charters automatically ineffective, the RCL provides that companies have until 1 July 2012 to amend their charters and submit them to the State Registry. Accordingly, it is important to have your company charter reviewed and revised as soon as possible in order to be compliant with the new law.
1. Personal liability of governing persons
Under Mongolian law, the personal liability of governing persons such as directors and the executive management was already relatively onerous compared to most developed jurisdictions. The duties and responsibilities of governing persons are broadly stipulated. The RCL contains what will be some further concerns for international investors since it not only widens the definition of governing persons, it also extends the scope of the duties and liabilities of such governing persons. Most importantly, governing persons may now be held personally liable for failure to comply with their disclosure obligations (see further in paragraph 2 below).
2. Increased disclosure obligations
A governing person must disclose and submit a list of his/her affiliated persons to the company secretary within 10 days of his/her appointment as a governing person and thereafter notify the company of any changes within 10 days of such change.
Upon becoming a shareholder, a shareholder must give notice to the share registrar of its name, address and the number of securities it holds, thereafter must give notice of any additions or changes. A shareholder must also give notice to the company within 3 business days following the date that (a) another shareholder becomes an affiliated person of such shareholder or (b) jointly with its affiliated persons becomes an owner of a block of five percent or more of the company's shares. The definition of "affiliated persons" has been broadened so as to include employees, shareholders and sister companies.
3. Administrative sanctions for non-compliance
The RCL prescribes fines for non-compliance, including failure to comply with the various reporting, notification, registration and information disclosure requirements set out in the RCL. Fines can be levied on the companies themselves, the shareholders, and governing persons. Fines range from MNT 702,000 (c.US$528) to MNT 5,616,000 (c.US$4,222).
4. Stricter corporate governance rules
The RCL retains relatively light-touch corporate governance regulations for limited liability companies, but there are some changes that will need to be reflected in company charters. In particular, all companies, regardless of type, must hold their annual general shareholders' meetings within 4 months of the end of the fiscal year and must now discuss the previous year's financial results at this meeting. Failure to comply with this requirement results in an automatic freezing of the authority of the board and renders any transactions concluded in the intervening period void. This obviously has the consequence of penalising innocent contracting counterparties. It is therefore essential that companies hold their annual general meetings by 30 April or as soon as possible thereafter, and that they check that their commercial counterparties have done so.
Other changes that will need to be reflected in an updated company charter include changes to the procedure for calling shareholders' meetings and abolition of the requirement to have a supervisory board.
5. Changes in major and conflict of interest transactions
The "major" and "conflict of interest" transaction provisions of the old Company Law were notoriously confusing and the RCL does little to improve the situation.
Under the old Company Law, a major (i.e. over 25% of total asset value) transaction to be entered into by a company was subject to unanimous approval of the company board. If the board failed to approve the transaction unanimously, the major transaction could be approved by a majority of shareholders. A conflict of interest transaction was subject to approval of a majority of non-conflicted board members of the company and then the approval of a shareholders' meeting.
In 2007, in an effort to clarify the approval requirements under the old Company Law, the Supreme Court issued an interpretation which seemed to suggest that both major and conflict of interest transactions were subject to approval of both shareholders and the board.
The RCL did not introduce many changes in the approval requirements of major or conflict of interest transactions, and the above-mentioned Supreme Court interpretation is presumed to still be in effect. However, the RCL did clearly introduce a requirement that major and conflict of interest transactions be disclosed in a company's annual report.
Based on the Supreme Court interpretation, the cautious approach is to obtain the approval of both the board of directors and shareholders. However, in our view, a limited liability company with less than 10 shareholders should be able to use certain carve-outs to avoid engaging the statutory procedures in relation to carefully structured transactions.
6. Changes to minimum capital requirements
The RCL abolishes the minimum capital requirements for most companies, save for those operating in certain sectors and for business entities with foreign investment. Further, the RCL redefines share capital as the product of "all issued common and preference shares multiplied by their par value", and specifically excludes treasury shares from this definition. If this change in the definition alters a company's share capital as stated in its current charter, the charter must be amended to reflect the revised share capital amount.
Enkhbayar Requests Change of Attorney Again, Case Delayed to Early July
June 19 (news.mn) Ex-President N.Enkhbayar requested to the Sukhbaatar District court to hire a new lawyer. He wants to hire Mrs. N.Sarangerel as his new lawyer and refused from Mrs. B.Oyunbileg.
"We give a time to the new lawyer to study N.Enkhbayar's dossier. Therefore court hearing scheduled on June 21 have to postpone again. I guess court hearing might be hold early July" said E.Batmunkh, head of Sukhbaatar District Court Office.
NY judge: US can seize dinosaur skeleton
NEW YORK, June 19 (AP) -- One of the more unusual arrest warrants in U.S. history was issued Tuesday when a federal judge authorized the Department of Homeland Security to seize a dinosaur from an art storage company. There's no need for handcuffs though. It's been dead for 70 million years.
U.S. District Judge Kevin Castel signed the warrant after finding there was "probable cause to believe" that the nearly complete Tyrannosaurus bataar skeleton is subject to forfeiture under U.S. laws. The U.S. filed a lawsuit against the skeletal property a day earlier, seeking to seize it for an eventual return to Mongolia.
It is typical in government seizure cases for the object to be seized to be named as a defendant. But it's not so common for an object to have an alias, in this instance "One Tyrannosaurus Bataar Skeleton" is also known as "LOT 49315 listed on Page 92 of The Heritage Auctions May 20, 2012 Natural History Auction Catalog."
The 8-foot-tall, 24-foot-long skeleton was described in the catalog as being "a stupendous, museum-quality specimen of one of the most emblematic dinosaurs ever to have stalked this Earth." It is currently held at a Cadogan Tate Fine Art property in Queens. A message left with the company Tuesday was not immediately returned.
The lawsuit said the Tyrannosaurus bataar skeleton was brought in March 2010 from Great Britain to Gainesville, Fla., with erroneous claims that it had originated in Great Britain and was worth only $15,000. It sold at auction on May 20 for more than $1 million, though the sale was contingent upon the outcome of court proceedings.
Jim Halperin, cofounder of the The Heritage Auctions, the dinosaur's Dallas-based custodian, has said a consignor bought the fossils in good faith and spent a year and considerable expense restoring them.
Halperin said Tuesday about the judge's order, "We have cooperated in the investigation process for paleontologists to expeditiously examine the skeleton, and we will continue to cooperate with authorities in an ongoing effort to reach a fair and just resolution to this matter."
Federal authorities say five experts viewed the remains on June 5, agreeing unanimously that the skeleton was a Tyrannosaurus bataar and almost certainly originated in the Nemegt Basin in Mongolia.
Tyrannosaurus bataars were first discovered in 1946 during a joint Soviet-Mongolian expedition to the Gobi Desert in the Mongolian Omnogovi Province. Since 1924, Mongolia has enacted laws declaring fossils to be the property of the government of Mongolia and criminalizing their export from the country.
FORFEITURE OF TYRANNOSAURUS BATAAR DINOSAUR SKELETON LOOTED FROM THE GOBI DESERT IN MONGOLIA SOUGHT – UNITED STATES ATTORNEY'S OFFICE, Southern District of New York, June 18
Sale of $1 Million Dinosaur Skeleton Is Halted After Origin Questioned – New York Times, June 19
US sues to force tyrannosaurus' return to Mongolia – AFP, June 20
Breaking: Looted Tyrannosaurus Bataar Will Be Seized by Homeland Security Today – New York Observer, June 20
Sale of disputed dinosaur fossil pits U.S. attorney, Dallas-based Heritage Auctions – Dallas News, June 20
U.S. seeks to return Tyrannosaurus skeleton to Mongolia – CNN, June 18
Feds file lawsuit to get tyrannosaur skeleton sent back to Mongolia - MSNBC, June 18
Tyrannosaurus Bones Must Return To Mongolia, U.S. Says – Bloomberg, June 18
U.S. sues to return Tyrannosaurus skeleton to Mongolia – Reuters, June 18
New UN index seeks to oust GDP
June 18 (Eco-Business) United Nations agencies launched a new index on Sunday meant to replace gross domestic product as a measure of national wealth.
The Inclusive Wealth Index (IWI), published at this week's Rio+20 global sustainability summit in Brazil, measures natural and human resources in addition to the economic output that is measured by GDP.
"Rio+20 is an opportunity to call time on Gross Domestic Product as a measure of prosperity in the 21st century," said UNEP executive director Achim Steiner in a statement.
He added that GDP fails to measure many of the social and environmental factors that are central to human well-being.
The inaugural report summarising the index – the Inclusive Wealth Report 2012 – found that large losses in natural resources have undermined a substantial part of the world's economic growth from 1990 to 2008, putting future well-being at risk.
For example, the report found that for the period studied China's economy grew by 422 per cent based solely on GDP. After adding in other factors of the IWI, growth was only 45 per cent.
The index includes 20 countries that together hold 56 per cent of the global population and 72 per cent of global GDP.
Only Japan showed an increase in natural capital, primarily because of increased forest area.
Natural capital includes renewable and other natural resource such as forests, farmland, fisheries, and minerals and fossil fuels.
The index uses many of the factors used in the Human Development Index (HDI), a measure frequently used by governments to determine the health and well-being of their populations. The HDI includes statistics on mortality, education, employment and age groups within the population at a given point in time.
By contrast, the Inclusive Wealth Index measures changes over a period of time, showing long term trends in growth.
According to the report, which was a joint project of the UN University's International Human Dimensions Programme on Global Environmental Change (UNU-IHDP) and the UN Environment Programme (UNEP), increases in human capital such as education and wages offset many of the declines in natural capital. However, it could only continue to do so until natural resources were depleted, said the report.
The report further found that high population growth had a substantial negative impact on IWI ratings.
India's overall IWI rating of 2.66 dropped to 0.91 once population growth was included.
The report's authors recommended that governments move away from GDP as a measure of growth, and instead use the IWI to plan for sustainable growth and measure progress.
To use the IWI effectively, scientists and policymakers will require additional research on determining true values for natural resources, they added.
UNU-IHDP executive director Professor Anantha Duraiappah said, "The IWR stands for a crucial first step in changing the global economic paradigm by forcing us to reassess our needs and goals as a society."
UNU-IHDP will publish the reports every other year, with a different focus each time. The 2014 report will focus on social capital.
An independent think-tank called the New Economics Foundation (NEF) has also chosen the Rio+20 summit to launch a new index report.
NEF's third Happy Planet Index, which used global data on life expectancy, experienced well-being and ecological footprint to rank countries since 2006, found that Costa Rica ranked highest among the 151 countries assessed, followed by Vietnam and Colombia.
NEF measures experienced well-being through an independent survey and the ecological footprint using NGO WWF's calculation of the land needed to support an average citizen's consumption levels.
Singapore came in 90th with high life expectancy and a better than average level of experienced well-being, but a large ecological footprint.
China ranked relatively well at 60th due to a low ecological footprint, while the United States ranked 105th and Botswana came last.
EZNIS RECEIVES NEW BOEING AIRPLANE
Ulaanbaatar, Mongolia, June 20 /MONTSAME/ Mongolia's "EZNIS airways" private company received a new Boeing 737-700 from the International Lease Finance Corporation /ILFC/ company in the USA, on June 19.
The ILFC takes the first place in the world with price of its owning planes, and second place with its fleet.
The new plane has 12 seats of business class, 112 of economic class. As a result the company will be able to extend the international air route of the country.
As of the first quarter of 2012, Mongolia's international transportation flow has been increased by 30 percent comparing with previous year.
Now, "EZNIS airways" company has seven planes. 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.
The company will obtain another two jets "Bombardier KYu400" with 74 seats by the third quarter of 2012. These planes will conduct the fligths to the western aimags.
Why Ulaanbaatar Needs to Look at Athens, Madrid and Rome
By Paul Sullivan
June 20 (UB Post) The World Bank Global Economic Prospects Report for June 2012 warns, "Developing countries should prepare for a long period of volatility in the global economy by re-emphasizing medium-term development strategies, while preparing for tougher times."
Justin Liu, The Chief Economist of The World Bank has also stated that, "Developing countries need to evaluate their vulnerabilities and prepare for further shocks, while there is still time."
Hans Timmer, Director of Development Prospects at The World Bank, goes one step further in advising that, "Developing countries should pre-finance budget deficits, prioritize spending on social safety nets and infrastructure, and stress-test domestic banks."
Last week I was at a luncheon talk discussing the very successful political and other reforms of developing country in Asia. It was a fascinating meeting about how countries like Mongolia have moved so quickly forward in democratization, freeing up the press and the internet, and more. These reforms have moved forward without much violence or stress, excepting some ethnic-based troubles in the northwest of the country. (Mogi: ethnic based trouble? In Mongolia?)
As I listened to this heartwarming story of the growing success of Mongolia, I could not help but think of the storms brewing in the EU, in the Middle East and elsewhere, that could put the brakes on the development, both political and economic of many countries.
Greece is in very bad economic shape. Spain, Italy, Portugal and Ireland are also under severe economic stress at many levels. The entire Eurozone could be at risk if Greece decides against following through with its fiscal and other economic reforms. If Greece defaults, it will be a very messy situation. There is a lot of talk about a "smooth default." There is no such thing as a smooth default. There will be an even greater risk if Greece leaves the Euro and reverts back to the drachma.
If this happens, other countries in the Eurozone will think a lot harder about doing the same. However, one thing holding back such a move may be the extreme measures by groups of central banks in the world to shore up this sinking ship called the Greek economy. Another thing is that the Greeks realize that most of their debt is denominated in Euros or other hard currencies. Their debt costs would sharply increase if they had to pay for them with drachmas. Inflation and unemployment would get worse in Greece in most scenarios, unless they can become more politically functional.
The economy of Spain is much larger than that of Greece. Italy's economy is even larger than Spain's. If Spain and Italy head down a similar road as Greece, then the world economy is at even greater risk. The contagion just from Greece could be bad enough. Contagion from increased financial and economic stress in Spain and Italy could really start a serious storm.
Many countries, private banks and investors own the debt of these countries worldwide. The interlocking nature of debt within and from the EU globally is astonishing. Global financial markets could get a hit similar to what happened after the bankruptcies of the major investment and other banks in the US, but maybe even worse.
All of this will affect trade in many parts of the world, not just in the EU.
China's biggest trading partner is not the US. It is the EU. The slowdowns and increased risks in the EU are part of the reason for the slowdown in China. And we all know that China is Mongolia's biggest market.
If a good part of the EU tanks (an American expression for going badly downhill), then China's economy will be hit – and possibly hard. The US economy is at risk. The biggest investment partners of the US are the EU countries. Many US investors will lose a lot if the EU tanks. The US trades a lot with EU countries. It also trades a lot with countries that trade a lot with the EU, such as China. Therefore, here is a second mechanism for Mongolia to lose from the EU. We are all interwoven.
The stagnant Japanese economy could also be hurt by reduced demand and the tightening of the world financial markets. Much of Southeast Asia relies on China as part of their engines of growth. China demands their raw materials, fuels, and intermediate products that China uses to produce the final products that it exports.
The EU also has significant trading relations with Russia, another neighbor with Mongolia, but one that is hardly as important as China is for the Mongolian economy. However, if the Russian economy heads south this could also feed into the Mongolian economy's losses.
Another aspect of this is the price of coal. If the EU's economic plight throws much of the world economy, including the biggest user of coal, China, into slower growth or recession, then in most circumstances the price of coal will go down. This will not be good for Mongolia.
The world economy is interlinked in very complex ways via hedge funds, trillions in foreign exchange transactions per day, potentially quickly moving "hot money" foreign portfolio investments, massive flows of mutual funds and other institutional investment activities and more. This small article can hardly cover them all.
Let us just say that Mongolia needs to keep a close eye on the EU and countries connected with it economically and financially to fully understand some of the risks it faces. Mongolia may be very far away physically from Athens, Madrid and Rome, but it is just a keystroke away when it comes to electronic changes that could affect many aspects of economic and financial risk for the country and its region.
Oh, yes, then there is all of that talk about an attack on Iran. It will not stop at a series of air attacks. It could escalate to a spreading war in various scenarios. How does $250-350 a barrel of oil sound? What would that do to the EU, China, and the US and to Mongolia? However, that is another story on how we are all so interconnected.
The 2008 recession was a bad one. If the many financial, military and other risks we face get much worse and financial contagion results, then some parts of the world could face an economic dzud. Let us all hope this does not happen and that world political and financial leaders can finally show us how to handle crises in a complex internationally economy. However, that may require beyond excellent leadership, diplomacy, teamwork and statesmanship.
Mogi: very bad translation
D. Achit-Erdene: Don't push investors away with legislation or mines like Oyu Tolgoi will vanish
June 20 (UB Post) Foreign companies that are operating in Mongolia have already started raising large amounts of money in the international market. People are now familiar with word the abbreviation IPO, which stands for "Initial Public Offering" - the first sale of stock by a private company to the public.
Mongolia is now releasing IPOs in Australia, Canada and the Hong Kong's stock market.
D. Achit-Erdene is the President and CEO of the Mongolian International Capital Cooperation. He established the first investment bank in Mongolia and is providing investment banking service at an international level. He recently spoke to Udriin Sonin Newspaper.
-How many IPOs have been released on foreign stock markets?
-We have released two IPOs in the Australian market, three in Toronto and one IPO in Hong Kong. These specifically relate to mining. At the moment we are preparing to make an agreement with two more companies.
-How much money have you made lately?
-We have worked on investment projects totaling USD 900 million.
-Your company has worked as financial advisor to Tavantolgoi (TT). What did MICC do?
-Yes, we were the financial advisor to TT. We carried out the estimation on how many shares one person should own and how much a share should cost.
-The Mongolian government decided to set the cost of each share at 933 MNT on the global stock market. Will that number be fairly evaluated on the international stock market?
-No, it has no negative influence. TT's total evaluation reaches USD 10 billion by setting the cost of each share at 933 MNT. At the moment it is difficult to sell it on the international market with a valuation of 10 billion. Of course, the values may go up once TT increases its production. We should observe how the infrastructure is solved on the international stock market and should develop a proper plan to export the coal. Today the railway policy is unclear. We will be able to export large amounts of coal by solving the railway issue properly, then the revenue will be increased. In terms of TT, it will reach to the value 10 billion after producing 20 million tons coal.
-Is there any influence besides infrastructure and production that will confuse investors in terms of our legal environment?
-TT has no problems in terms of legal environment as the state owns the most percent of shares of TT. OT might suffer a slight share drop if Mongolia's government releases information with a meaning to increase the percent. In that situation people will be afraid of investing. The main fear foreign investors have when buying shares in mining companies is that the government will revoke permission. This fear doesn't just pertain to Mongolia, but also in other countries. Just look at Africa. There is high possibility of the government revoking shares of mines when African governments change. There is no fear in terms of TT or OT. It is the advantage.
-There are few national companies in Mongolia that can operate at an international level. How many companies will release IPOs on the international market? Will you attend to TT's IPO releases in the future?
-Vested negotiations above USD 100 million are made among foreign vested banks and companies. If Mongolians will attend stated owned companies' large IPOs, Mongolia will make money. I think the government should demand Mongolian investment banks to attend the IPOs that are released in Mongolia. MICC is working to attend the IPOs that TT will release.
-Many people are confused whether cash is better or an allotment of shares. What advice do you have for people?
-Share gives you a future benefit. China is the main consumer of our coal. Furthermore, Australia's mines are becoming deeper and expenses are being increased. So it means Mongolia will have more of a chance. The analysts convey that Mongolia won't face any negative influence, however if the world financial market goes into recession, China will consume less coal. During such recession China won't want to buy products with high expense that will be imported from Australia or Brazil. It means China will definitely need to buy coal from Mongolia. Mongolia is in a perfect position.
-Who has made a large profit in a short time from money raised from IPO releases?
-We released Hunnu Coal's IPO successfully and raised USD 20 million. With USD 20 million that was raised in the international stock market, we drilled and bought a mining company. And within half year we gained a great coal reserve. Then we bought the big coal producing company Banpu. (Mogi: probably a mistranslation here, Banpu bought Hunnu) We have actually increased the initial investment 9 times.
-Is it possible to release vested IPOs in Mongolia which will give us high returns?
-MICC is working on such IPOs at the moment. We want Mongolians to learn to get involved in the stock market and gain profits from it. There are some incidents in which IPOs released in Mongolia have been canceled, but not many.
Our company is operating successfully in the Mongolian stock market and we are planning to release more IPOs. I think if people will start investing in solid and reliable IPOs and make profits, more people will eventually get interested.
-What confusion do you notice from foreign investors?
-I see two risks. Revoking the license and changing the laws frequently becomes the main risks for foreign investors. After the election, it will be back to business as usual.
-What will happen if foreign investment in mining field reduces?
-Then state owned companies will start releasing shares.
-What countries are Mongolia's main investors?
-The largest investment is being made from Western Countries. Rio Tinto is investing USD 5 billion. Although China's investment is increasing, it is same as the investment of Russia's Erdenet company and the Mon-Ros company which is making the railway.
-More investments are being made from Japan and South Korea besides Canada and Australia?
-It is estimated that 30 percent of Mongolia's territory has been explored by the preliminary method. It is possible to discover large natural reserves by doing in depth research. Australians and Canadians are well experienced in mine exploration as they have been operating in mining sites for over 100 years. There is a theory that Mongolia has the richest mines in the world and they will be discovered by doing deep drilling. But Mongolia has not enough money to do this drilling. It costs a fortune. Australians and Canadians are excellent at mine exploration, but Koreans and Japanese have no experience in exploring mines. They want to make investments in prepared thing that will profit in a short time. The only prepared thing in Mongolia is TT. If we spend a fortune, large mines will be discovered. If Mongolia pushes away investors by making laws, possibilities to explore vested mines like Oyu Tolgoi will be reduced.
-What sectors are caching the attention of foreign investors?
-Other sectors will develop along with the development of the mining sector. However the world's market is not stable enough at the moment, the investors have only become interested in buying the shares of Mongolian companies.
ULAANBAATAR TO COOPERATE WITH ADB
Ulaanbaatar, Mongolia, June 20 /MONTSAME/ A Vice Mayor of Ulaanbaatar, B.Baatarzorig received a director of Northeast Asian bureau for Nature environment, natural reserve and agriculture of Asian Development Bank /ADB/, Yu Lan Fung on June 20.
In recent years, ADB had implemented successfully especially in China a lot of projects on reducing air pollution, increasing flow of rivers and lakes. But such project was not impelented by ADB concerning the environment protection of Ulaanbaatar.
Ulaanbaatar city is implementing a certain projects for reducing air and land pollution, erasing nature deterioration as much as possible. For example, measures for housing in ger districts, connecting them to related infrastructure are taken so as to reduce air pollution in the capital city. Thus, not a little activities are conducted by Ulaanbaatar authority for increasing Tuul and Selbe rivers' flow.
B.Baatarzorig noted that ADB has the opportunity to take part in those projects.
Mongolia Livestock Reaches 50 Million Heads
Ulaanbaatar, Mongolia, June 20 /MONTSAME/ By June 15 of this year, 14 million heads of livestock have produced 14.3 million baby animals. It was reported by T.Badamjunai, the Minister of Food, Agriculture and Light Industry at a cabinet meeting held on Wednesday.
For the time being, about one million heads of big livestock are expected to produce about 600 thousand baby animals, and thus Mongolia will receive about 15 baby animals overall. This is the largest number ever in Mongolia.
According the report, the planting of grain is going with 94.6 per cent, potato--with 103.3 per cent, and vegetables--with 84.6 per cent. This year, 330 thousand hectares areas will be ploughed. Apart of it, the Ministry of Agriculture has mounted a fair of farming tools and techniques, and sold fuel, seeds of wheat, pesticides and fertilizers to farmers on credit. High-capability of tractors and other facilities have been supplied to farmers with budgetary capitals and a soft-loan given from China.
500 PEACEKEEPERS TO LEAVE FOR SUDAN TOTALLING 850
Ulaanbaatar, Mongolia, June 20 /MONTSAME/ A new group of Mongolian peacekeeping battalion including 500 officers and sergeants, and third team of army doctors will leave for Sudan at the end of this month. The battalion consisting of 850 military men will serve in the South Sudan. The first group has been sent to the country last March.
Doctors and nurses from the Central army clinical hospital and army units, as well as specialists from the State Clinical hospital ¹ 3 and the General authority for Implementing Court decision are included in the third team of army doctors. 100 officers and sergeants included in the battalion are from the General authority for Border protection, the Internal security service, the General Police department, the General Intelligence agency, the General authority for Implementing Court decision and the National Emergency management agency.
Over 12 thousand jobs created in first half – CABINET IN BRIEF
Ulaanbaatar, Mongolia, June 20 /MONTSAME/ A regular cabinet meeting held on Monday discussed and backed a new edition draft of the law on family and draft amendments to other related laws. These drafts will be submitted to the State Great Khural (parliament).
- The cabinet decided to discuss a draft parliamentary resolution initiated by N.Batbayar MP on some measures for stabilizing the raw material supply and supporting national production together with another draft resolution of parliament submitted up by the government on allowing the government to issue shares.
- Initiated by L.Bold, a draft law on the "Bayanmongol" company was not backed by the cabinet due to several reasons. The cabinet members considered that initiating such bill is not well timed because of the elections of parliament and the Citizens' Representative Khural of capital city are approaching.
- The cabinet discussed a draft amendment to the law on traffic security and a bill on annulling the law on traffic security, and then decided to submit them to parliament.
- According to a report given by a cabinet member, 12,388 new job places have been created by the first half of this year. In addition, loans of MNT 9.5 billion have been granted to 67 projects in order to support small- and middle-sized productions and to provide people with job places.
- A cabinet decision was made to allot money from the governmental reserved fund for buying sport suits for the athletes to compete in the London 2012 Olympic Games.
"Mogi" Munkhdul Badral
Senior Client Manager / Executive Director
CPS International LLC
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CPS International is a marketing arm of CPS Securities in Mongolia. CPS Securities is a Perth, Western Australia based AFSLicense Holder. To trade ASX and international stocks, feel free to contact me at firstname.lastname@example.org or +976-99996779.
CPS Securities, its directors and employees advise that they may hold securities, may have an interest in and/or earn brokerage and other benefits or advantages, either directly or indirectly from client transactions mentioned in correspondence from CPS International.
CPS International advise this email contains general information only and does not include advice. In preparing this communication, CPS International did not take into account the investment objectives, financial situation and particular needs of any person. As with any speculative mining company there are significant risks.