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.
VOR closed flat at 2.4c on Thursday
Voyager Resources: Entitlement Issue Prospectus
June 21, Voyager Resources Limited (ASX:VOR) --
For a non-renounceable entitlement issue of one (1) Option for every three (3) Shares held by those Shareholders registered at the Record Date at an issue price of $0.01 per Option to raise $4,463,738.
The Offer is fully underwritten and managed by CPS Securities. Refer to Section 9.4 for details regarding the terms of management and underwriting of the Offer.
Lodgement of Prospectus with the ASIC 21 June 2012
Lodgement of Prospectus & Appendix 3B with ASX 21 June 2012
Notice sent to Optionholders 25 June 2012
Notice sent to Shareholders 25 June 2012
Ex date 26 June 2012
Record Date for determining Entitlements 2 July 2012
Prospectus despatched to Shareholders 5 July 2012
Closing Date* 20 July 2012
Securities quoted on a deferred settlement basis 23 July 2012
ASX notified of under subscriptions 25 July 2012
Despatch of holding statements 30 July 2012
* The Directors may extend the Closing Date by giving at least 6 Business Days notice to ASX prior to the Closing Date. As such the date the Options are expected to commence trading on ASX may vary.
AKM closed -9.38% to 14.5c on Thursday
Aspire Signs MOU With Russian Railways Mongolian Subsidiary
June 21 -- Aspire Mining Limited (ASX: AKM) ("Aspire" or "the "Company") is pleased to announce it has signed a non-binding Memorandum of Understanding ("MOU") with the Mongolian subsidiary of rail giant JSC Russian Railways ("RZD" or "Russian Railways") to discuss extending the Trans-Mongolian Railway across northern Mongolia, including to Aspire's Ovoot Coking Coal Project ("Ovoot").
Aspire said the MOU with Infrastructure Development LLC ("ID") would explore the development of a strategic partnership between ID and Aspire infrastructure subsidiary, Northern Railways LLC ("Northern Railways"), to build, own and operate an extension of the existing Trans-Mongolian Railway at Erdenet through to Ovoot via the town of Moron.
The Trans-Mongolian Railway network is operated and developed by the Ulaanbaatar Railway Mongolian-Russian Joint Venture (UBTZ), in which The Government of The Russian Federation is a 50 percent shareholder, with the remainder held by the Mongolian Government.
The MOU provides a framework for Aspire and ID to discuss amongst other things the application for a rail concession for the Erdenet � Moron � Ovoot rail line, investment and network rail capacity and integration. Aspire's Managing Director, David Paull, said: "The securing of the MOU with Russian Railways represents a step forward in the development of infrastructure to support the Ovoot Coking Coal Project".
"In addition, it demonstrates the importance of the Erdenet � Moron � Ovoot rail line to the economic and national interests of Mongolia. The development of this rail line would establish an important new source of export revenues for Mongolia and routes to seaborne markets via the Russian rail system," Mr Paull said.
ETG closed -6.85% to C$0.68, EGI closed -8.33% to US$0.66 on Thursday
Entree Gold Welcomes Gorden Glenn to Its Board of Directors
VANCOUVER, BRITISH COLUMBIA--(Marketwire - June 20, 2012) - Entrée Gold Inc. (TSX:ETG)(NYSE MKT:EGI)(NYSE Amex: EGI)(FRANKFURT:EKA) ("Entrée" or the "Company") welcomes Mr. Gorden Glenn to its Board of Directors. Mr. Glenn was one of eight management nominees elected to the Board by shareholders at the Company's Annual General Meeting held on June 18, 2012.
Mr. Glenn has over 20 years of mining, exploration and investment banking experience. He was the Managing Director of Mining Investment Banking for Desjardins Securities and, prior to that, the Vice President and Director of Mining Investment Banking at TD Securities. Holding a BScH in Geological Sciences from Queen's University in Kingston, Ontario, Mr. Glenn started his career as a project geologist with Inmet Mining and Kennecott Canada Inc. before switching to the capital markets. Most recently, Mr. Glenn served as chief executive officer and a director of AMR Mineral Metal Inc.
Greg Crowe, President and CEO commented, "The addition of Gord Glenn to our Board of Directors will significantly enhance and strengthen both the technical and financial components of the Company. I am looking forward to working with Gord, as we continue to advance the already substantial holdings of the Company and strive to increase shareholder value."
IVN closed -8.29% to C$9.73, -9.17% to US$9.51
Rio Tinto: Copper outlook good despite volatility
MELBOURNE, June 21 (WSJ) -- Rio Tinto PLC, which is developing one of the world's largest mines in Mongolia, Thursday said the long-term outlook for copper remains positive even though volatility in commodity prices is likely to persist in the near term.
Demand for copper has "plenty of growth potential," Andrew Harding, chief executive of the Anglo-Australian company's copper division, said in a slide presentation released to coincide with a resources conference in Hong Kong.
Mr. Harding said the Oyu Tolgoi copper and gold project near Mongolia's border with China is now 85% complete and on track for first commercial production by 2013.
The first phase of the project's development will see the construction of an open-pit mining operation, and will in time be followed by underground development, expansion of the mill and the building of a power station.
Rio is the operator of Oyu Tolgoi and majority owner of Ivanhoe Mines Ltd., which owns 66% of the project to the Mongolian government's 34%. When fully operational, Oyu Tolgoi is forecast to produce average 1.2 billion pounds of copper a year in the first 10 years, 650,000 troy ounces of gold and more than 3 million ounces of silver.
Presentation - Andrew Harding, Chief Executive Copper � Rio Tinto, June 21
A Chinatown Rises in Mongolia's Crown Jewel
June 21 (WSJ) In resource-rich, landlocked Mongolia, nationalism has often meant a wariness of its uncomfortably large neighbor to the south. Now, news that one of Mongolia's crown jewels ― the copper-gold mining project known as Oyu Tolgoi ― employs more than a third of its work force from China could set the stage for a surge in tensions between the two countries.
Oyu Tolgoi, the world's largest undeveloped copper-gold deposit, is in the final stages of preparations for production due next year. It represents for Mongolia not just the hope of leapfrogging the national-development ladder but also the chance to create a truly Mongolian cash cow. Trouble is: Out of the roughly 15,000 employees and contract workers currently on site, around a third are Chinese, Masa Igata, the chief executive of Ulaanbaatar-based investment firm Frontier Securities, told China Real Time Wednesday.
Mongolian media, who latched on to the story last month, have said that closer to half the work force is Chinese. Their reports prompted a government investigation in late May, but it's not clear if the probe has yielded firm results.
The high Chinese profile at one of Mongolia's most cherished emblems of national pride isn't coming at a particularly opportune moment. In April, Ulaanbaatar reacted badly to a Chinese bid for Mongolian coal producer SouthGobi Resources Ltd. Sensitive to encroachment and playing to a nationalistic gallery, the government suspended some of SouthGobi's mining licenses and moved to restrict foreign ownership of "strategic industries" ― including mining, banking and telecommunications ― to 49 percent for deals worth more than $75 million, unless parliament grants an exception.
Rising resource nationalism isn't anything new, and the expectation in industry circles is that Ulaabbaatar may pull back on the foreign-ownership rule after national parliamentary elections next week, Mr. Igata said. But the Chinese presence at Oyu Tolgoi may be a longer-lasting bugbear for the Mongolians if the mine fails to meet targets for a much higher ratio of native workers.
China's increasing economic might, and the growing presence of Chinese businessmen and workers in Mongolia � some of whom inevitably start up relationships with Mongolian women � has led to a surge of anti-Chinese sentiment in the country in recent years, particularly among young, unemployed men. Chinese people are the chief targets of an neo-Nazi movement in Ulaanbataar that made headlines in 2009 after the leader of ultranationalist group Blue Mongol, known to shave the heads of Mongolian women who slept with Chinese men, was convicted of murdering his daughter's Mongolian boyfriend, reportedly because he had studied in China.
Chinese involvement in mining operations has occasionally led to flare ups in other countries, most notably in Zambia, where Chinese managers of one mine elected to try to contain labor unrest by shooting local employees last year.
Nothing quite so dire appears to be in the works in Mongolia. Mr. Igata said Chinese workers generally aren't the managers at Oyu Tolgoi, which is owned by global mining conglomerate Rio Tinto and Ivanhoe Mines.
Reached by China Real Time, Rio Tinto spokesman David Luff said Oyu Tolgoi employs 12,921 Mongolians, or 63 percent of the current work force. He said this was slightly more than the 60-percent required by the company's agreement with the Mongolian government. When the mine is fully operational, the local work force requirement will be bumped up to 90 percent, in accordance with the investment agreement with the government, he said.
Rio Tinto is working to reduce its reliance on foreign workers to meet the stiffer requirements, Mr. Luff said, adding the company out "the largest training program ever undertaken in Mongolia."
Still, the involvement of so many Chinese workers in a project of such national importance has the potential to turn ugly given the mood in Mongolia. Mr. Igata said it would behoove the Mongolians to realize that it can't do without Chinese business, and the Chinese to understand that they may well need a lower profile to share in Mongolia's wealth of resources.
In an uneasy courtship, Oyu Tolgoi may be the canary in the mineshaft.
YAK closed +1.02% to C$3.97 on Thursday
Mongolia Growth Group Ltd. Extends the Close of Private Placement Offering
Ulaanbaatar, MONGOLIA, June 21, 2012 /FSC/ Mongolia Growth Group Ltd. (YAK:CNSX) --
Further to the news release of May 30, 2012, Mongolia Growth Group ("MGG" or "the Company") announces that it has extended the close of its offering ("Offering") of common shares ("Common Shares") to July 13, 2012. The terms of the Offering remain unchanged. The Company is looking to raise gross proceeds of up to CDN$ 5 million. The Common Shares will be priced at CDN$ 3.90.
The Company intends to use the proceeds to purchase leasable real estate, to take advantage of investment opportunities and for general corporate purposes. The Offering is scheduled to close on or about July 13, 2012 (the "Closing Date"), and is subject to certain conditions, including but not limited to, receipt of all necessary approvals including the approval of the CNSX Exchange and the securities regulatory authorities.
The Common Shares issued in connection with this Offering will be subject to a four-month hold period from the Closing Date, as prescribed by the CNSX exchange and applicable securities laws.
1733 closed -9.43% to HK$1.44 on Thursday
Winsway Coking Coal Shares Surge Most On Record: Hong Kong Mover
June 20 (Bloomberg) Winsway Coking Coal Holding Ltd. (1733), which process and transports coal to China from Mongolia, rose by the most on record in Hong Kong today with trading volumes almost triple the daily average.
Shares gained as much as 22 percent to HK$1.57 for their biggest gain since the company listed in October 2010. They were HK$1.56 at 11:49 a.m. local time. There were block trades of between 500,000 and 992,000 shares completed today, according to data compiled by Bloomberg. There have been 33.6 million shares sold today, compared with the daily average of 11.4 million in the past year.
A company official who refused to be identified declined to comment when asked about the share movement today.
Winsway last October agreed to buy Calgary-based Grande Cache Coal Corp. jointly with Japanese trading house Marubeni Corp. for about C$1 billion ($1.02 billion). In February, Executive Director Paul Struijk said the company was seeking mines in Australia, Canada and Russia to add production.
Aluminum Corp. of China Ltd. in April agreed to buy 29.9 percent of Winsway for HK$2.39 billion ($308 million).
NVMN closed +3.45% to US$1.50
Nova Mining Corp Receives Positive Reports on New Bayankhongor Lithium Mining Property
SAN ANTONIO, June 21--(BUSINESS WIRE)--Nova Mining Corp. (OTCBB: NVMN) announced today that the Company has received very encouraging due diligence documents, including 3rdparty lithium estimate reports and government license documents, regarding the Bayankhongor mining property. The Bayankhongor property is one of three major licensed lithium fields owned by Mongolian National Mining Consultants Limited (MNMC). This last Monday, Nova Mining Corp moved to secure valuable Lithium supplies by executing a Letter of Intent with MNMC for the exclusive right to purchase 100% of the Lithium produced from the MNMC mining properties at a discount to market price. As part of the deal, Nova Mining has the right to perform Due Diligence, prior to both parties promulgating the Definitive Mineral Production Agreement.
Mongolian National Mining Consultants Limited is a Hong Kong company, with its principal business operations in Ulaanbaatar, Mongolia. MNMC is the registered owner of multiple mining properties that are located in Mongolia. Recent Surveys of MNMC's mining properties indicate significant quantities of commercially recoverable Lithium reserves.
Nova Mining Corp. (NVMN) seeks out the most potentially lucrative mining projects and supplies of strategic high-demand minerals, such as lithium, as part of its newly-instituted aggressive business model. Lithium is the main ingredient in long life batteries, like those used in many of Apple's (NASDAQ: AAPL) popular electronic devices, Microsoft's (NASDAQ: MSFT) new Surface tablet and General Motor's (NYSE: GM) new Volt electric automobile. Lithium is currently in very high demand and is forecasted by MarketResearch.com to quadruple from an $11 Billion market to $43 Billion market.
More information on Nova Mining Corp can be seen at: http://www.nova-mining.com
Mongolia open to foreign investments in Tavan Tolgoi: President
June 21 (Reuters) - Mongolia is still open to foreign investments in the western block of the giant Tavan Tolgoi coal mine and has not yet decided on whether to go alone on developing its prized asset, President Tsakhia Elbegdorj said.
Talks with foreign groups to develop Tavan Tolgoi have hit a snag since July last year after the government withdrew a decision to hand mining rights to a consortium comprising China's Shenhua Group (1088.HK), U.S.-based Peabody (BTU.N) and a Russian-Mongolian group headed by Russian Railways.
An executive with the state-owned firm in charge of the Tavan Tolgoi project said in April that Mongolia might develop the mine on its own.
"I think in balancing investors, it is essential that it is in line with policies and in line with our national security," Elbegdorj told Reuters in an interview on Thursday.
"We have two big neighbors and we need investment. I think the door is still open in the negotiations with big national investors."
Speaking at his office in Mongolia's Government House, Elbegdorj also said it was crucial for the country's tiny economy to diversify away from mining.
The government will boost foreign investments in other sectors such as agriculture, food and tourism, he said.
"The Mongolian economy mostly has one color, and we would like to make this a rainbow economy. I have a message to our investors - don't see Mongolia as only mines. There are great opportunities in investing in other sectors."
Mongolia's $10 billion economy is at the beginning of a mining boom and foreign investors have rushed in on hopes of cashing in on the country's huge deposits of copper, gold, coal and uranium.
Elbegdorj said the biggest challenge for the next government was the fight against corruption.
He said the recent arrest on corruption charges of his predecessor, Nambaryn Enkhbayar, should be welcomed by foreign investors because it proved that Mongolia was committed to improving the rule of law.
Mongolia: A Microfinance Test Case
June 21 (Transitions Online) Mongolia's economy grew 17.3 percent last year thanks to a mining boom, and the government is set to distribute to the public some $1 billion to share the wealth. So it's easy to forget that, Mongolia's meteoric economy notwithstanding, 30 percent of the population is impoverished.
Against this backdrop, the European Bank for Reconstruction and Development (EBRD) launched a project in 40 Mongolian villages from 2008-2009 to assess the impact of business startup microcredit lending. Does it reduce poverty? And which loan structure is best?
The second question is key because the microfinance industry is in transition, shifting from the group loans pioneered by Grameen Bank to individual lending. In a group loan, the borrowers are liable for each other's payments, meaning that everyone goes into default if one member doesn't repay. This, naturally, can be very problematic.
But there are scant data on the relative impact of the two models regarding business creation, poverty reduction, etc., the bank notes. So, in cooperation with Mongolia's XacBank, it offered group loans to women in 15 villages and individual loans to women in another 15 villages. Ten villages formed the control group.
Some highlights from the findings, released last month:
・ The results at least partially support the growing body of evidence that microfinance doesn't make much of a dent in poverty, as incomes remained static in both loan groups. It might just be too early to observe significant change, the bank notes. But more and more research suggests that micro-finance is no poverty slayer, contrary to early optimism.
・ As regards business creation and household well being (measured by food consumption), the group loans were more effective. Women in that program were 29 percent more likely than the control to operate a business. They also put more food, including fresh produce, on the table. For individual loan recipients, no impact was observed.
・ Much of the lending didn't go towards small business creation. In fact, half of the money went to consumer items. By survey's end, the households in both loan programs were much more likely to own a VCR or radio than those in the control.
Conclusions? The bank posits that group loans had more impact because borrowers in a collective are less prone to risky investments or "paying it forward," so to speak, by lending on to family and friends. On poverty reduction, the EBRD notes that less-educated women in both groups seemed to benefit more, which is promising because education is "a proxy for long-term poverty."
But, to its credit, the bank acknowledges the ambiguities and points to research that generally challenges the poverty cure thesis. We'll get another look at this question later this summer, when the EBRD publishes research on the impact of microcredit during the financial crisis in Bosnia and Herzegovina.
Mongolian Audit Officers Trained In Japan, South Korea
ULAANBAATAR, Mongolia, June 21 (Bernama) -- A group of 12 officials from the Mongolia's National Audit Office, the Ministry of Finance and the Japan International Cooperation Agency (JICA) were trained on the structure and activities of the internal audit offices of Japan and the Republic of Korea, Mongolia's Montsame news agency reported.
During the training, which was held from May 27 to June 9, with the theme "Strengthening capability of internal audit, monitoring and evaluation", the participants learned the internal audit structures of the governments of Japan and the Republic of Korea, their legal environments and principles, methodologies, and the difference between internal audits of private sector and the government.
They were also given reports on implementation course of the internal audits by the governments, transparency of the internal audit actions, and a situation of monitoring over realisation of the internal auditors' recommendations.
In accordance with the curriculum, the trainees were familiarised with activities and works of the Japan's National Audit Office, the Audit Council of Fujisawa and Osaka cities, the Audit Office of Tokyo, Ernst & Young audit company and the department of accounting at the Gakuin University, and then at the Ministry of Strategy and Finance of the Republic of Korea, and the country's Council of Audit and Monitoring.
Mongolia #83 in World Bank's Knowledge Economy Index 2012, Up 3 Spots from 2000
(World Bank) The World Bank's Knowledge Assessment Methodology (KAM: www.worldbank.org/kam) is an online interactive tool that produces the Knowledge Economy Index (KEI)�an aggregate index representing a country's or region's overall preparedness to compete in the Knowledge Economy (KE). The KEI is based on a simple average of four subindexes, which represent the four pillars of the knowledge economy:
・ Economic Incentive and Institutional Regime (EIR)
・ Innovation and Technological Adoption
・ Education and Training
・ Information and Communications Technologies (ICT) Infrastructure
Mongolia's Uneven Boom
June 21 (Bloomberg BusinessWeek) As Mongolia prepares for parliamentary elections on June 28, the resource-rich Central Asian country buzzes with campaign activity. On a sunny afternoon vans festooned with the banners and flags of the Democratic Party and Mongolian People's Party careen through the potholed streets of Ulaanbaatar, loudspeakers blaring out the candidates' virtues. Students march through the city center wearing T-shirts bearing the images of those vying for the 76 legislative seats.
Sitting in his ramshackle wooden home, Dorjsuren (many Mongolians use a single name) (Mogi: go by their given name rather), an unemployed plumber, bitterly dismisses the electoral spectacle. "Right now Mongolia is rushing to give away its land and resources to foreigners, and it makes me deeply angry," says the resident of one of the capital's sprawling slums, which are largely made up of round felt tents called gers. "Our government does nothing for the people while the rich just get richer."
Endowed with some of the world's largest reserves of gold, iron ore, copper, and coal, Mongolia has become a magnet for foreign money. The nation's 10 biggest deposits are worth more than $1.3 trillion, according to estimates by Quam Asset Management. Yet anger is rising among the country's 2.8 million people, close to one-third of whom still live in poverty. "The economic growth from the last few years hasn't trickled down yet, and that is creating more social tension," says candidate Sanjaasuren Oyun of the opposition Civil Will-Green Party. "Pressure for more populist policies is growing."
In May lawmakers approved a new foreign investment law that requires parliamentary approval for deals in which overseas investors hold more than 49 percent of the equity and for transactions of more than $75 million in sectors deemed strategic, including media, telecommunications, banking, and, crucially, mining. The legislation was sparked in part by an attempt by the Aluminum Corporation of China (ACH) to purchase some mining assets (90 percent of Mongolia's trade is with its neighbor China). "In Mongolia, there has always been concern about losing control of their resources to foreign countries," says Peter Markey, who leads Ernst & Young's China mining and metals practice.
Politicians have also proposed rewriting tax treaties that have allowed many foreign mining companies to limit their effective tax rate to close to zero. "We don't want people to come in and clown around and escape with whatever hot profits they make, without contributing to the well-being of Mongolians," says Vice Finance Minister Ganhuyag Chuluun Hutagt, speaking during a break between campaign stops in Ulaanbaatar.
The flood of foreign direct investment has sparked concerns of overheating: FDI totaled $5.3 billion last year in a country with a gross domestic product of $8.2 billion. Mining amounts to one-fifth of the economy and supplies a third of government revenue. The economy grew 17.3 percent last year, driven by a 56 percent surge in government spending, including cash handouts. The government largesse has stoked inflation: Food prices jumped 31 percent in April over the same month last year.
The rising populism is making business executives anxious. They say the investment law's requirements on parliamentary approval could delay projects. "We have these possibly time-consuming hurdles that have to be crossed that could hurt the prospect of deals getting done," says Jim Dwyer, executive director of the Business Council of Mongolia, an advocacy group for some 200 international and Mongolian businesses.
Mining companies are also alarmed by calls to renegotiate existing deals, including a massive $6 billion copper-and-gold mine that is managed and part-owned by the Anglo-Australian giant Rio Tinto (RIO). Some lawmakers want to boost the Mongolian government's share in the mine, called Oyu Tolgoi, or Turquoise Hill. "Mongolia needs foreign expertise and foreign capital to help develop its resources, despite talk of resource nationalism," says Cameron McRae, chief executive of Oyu Tolgoi. "The next step for Mongolia should be an informed, national-level conversation about how to use the profits from mining for the long-term benefit of the country."
One big obstacle to a more equitable distribution of the proceeds from Mongolia's mining boom is endemic corruption. Transparency International, an organization focused on graft, ranks Mongolia 120th out of the 183 nations it surveys. As an example of just how gothic the corruption can get, in April former President Nambaryn Enkhbayar was arrested on charges of enriching himself while in office and subsequently barred from participating in the upcoming election; the moves are seen by some as an attempt by the current administration to sideline a powerful rival rather than a good-faith effort to clean up government. "In my view, the former president's jailing was to prevent him from running for parliament," said California Senator Dianne Feinstein in a May 14 statement.
"What we are seeing now in Mongolia is not a real rule of law, but instead something that is common in many post-Soviet republics," says Enkhbayar, who is free on bail. "The ruling party is trying to use the law and law enforcement agencies to get rid of its political opponents." A pre-election opinion survey showed Enkhbayar as the most popular politician in the country, despite the charges against him.
Some 60 percent of Mongolians believe government policy is characterized by either "support for the rich" or "lack of concern for society at large," according to a survey released on June 17 by the local Sant Maral Foundation. "There is an expectation that the next parliament will do something to reduce the gap between the rich and poor," says Sumati Luvsandendev, executive director of the foundation. "I don't expect any big uprising this summer. But the fall and winter are very difficult times here. It all depends on what steps the next government takes."
Major Mineral Opportunities Uncovered in an Unexpected Place, Mongolia: Eric Zurrin
June 20 (The Gold Report) --
The Gold Report: Thanks for joining us today, Eric. Mongolia has a population of fewer than 3 million people and most investors don't really have it on their radar. Why do you think they should and how did you happen to become involved in that country's investment markets?
Eric Zurrin: Mongolia will be one of the key global mining stories for the next 20 years. It's a simple story driven by emerging market demand for resources, primarily from China, which accounts for 90% of Mongolia's exports. The importance for investors is the speed of the country's growth and how to get exposure to it. In the first quarter of 2012, gross domestic product (GDP) grew by 17% real, 30% nominal (year-on-year Q1 growth). For 2011, real growth was 8% (Mogi: 2011 GDP grew 17.3% real, 28+% nominal actually), but we're expecting to see real growth of 15% in 2012. So as an investment destination, particularly in today's climate of lower global growth, Mongolia is extremely attractive.
I found myself in Mongolia due to my mining background in investment banking going back for the last 10 years in North America and Europe. I came out of the UBS mining team in London and have been backed by a private equity group called Origo Partners Plc (OPP:LSE), which is a listed investment company with about $125 million (M) of net asset value invested in Mongolia. The group is in Mongolia, led by Luke Leslie, who was a colleague at UBS.
TGR: So what does Resource Investment Capital Ltd. do in Mongolia?
EZ: Resource Investment Capital (ResCap) is a corporate finance advisory boutique linking international capital with domestic investment opportunities. We are also one of the top three securities traders on the Mongolian Stock Exchange (MSE) and recently started investing proprietary capital alongside investors in private deals that we bring to the local stock market. Luke Leslie at Origo Partners made his first investment in Mongolia buying out Oleg Deripaska's Mongolian coal interests for $15M. The value of this holding has increased 5.8x at the last capital raise. I joined Luke in Mongolia in 2010 after forming Rescap together and seeding it with initial capital. I now spend most of my time in Mongolia and I am long the local property market in Ulaanbaatar, which itself has been a lucrative investment on its own. There's no better way to get your hands dirty and to fully understand the opportunities than to be on the ground and see the flow of inbound investors and outbound opportunities, both inside and outside of the mining space.
TGR: It seems that Mongolia first got on the horizon when my old friend, Bob Friedland, became involved there through Ivanhoe Mines Ltd. (IVN:TSX; IVN:NYSE) over 10 years ago. He was probably one of the early pioneers in getting Western companies to exploit Mongolia's natural resources. Then, Ivanhoe came up with that huge Oyu Tolgoi project. What's happening there?
EZ: Friedland has been involved in Mongolia for about 15 years, and he is undoubtedly one of the early visionaries for frontier resource investors. Ivanhoe Mines owns 66% of Oyu Tolgoi, the world's second largest, undeveloped copper-gold asset, which goes into production at the start of Q4/12. Oyu Tolgoi is one of the world's great copper assets. It is the backbone of the Mongolian economy and will be for the next 50�60 years. The capital expenditure bill at Oyu Tolgoi is $7 billion (B), of which 80% has already been spent. It has 100% financing guarantees by the current majority owner of Ivanhoe, which is Rio Tinto (RIO:NYSE; RIO:ASX), the bellwether mining investor and mining company that is underwriting its share of Ivanhoe's current $1.8 billion rights issue. This gives us comfort that the operation will be there over many decades.
In its first 10 years, Oyu Tolgoi will produce 650,000 ounces gold and 600,000 tons copper annually, and, importantly for Mongolia, will result in billions of dollars of royalties and taxes for Mongolia. Oyu Tolgoi will come to dominate Rio Tinto's copper portfolio. Rio has over a 50% interest in Ivanhoe, controls the board and the management, and has essentially taken over Ivanhoe. We think it's probably not too far away from a full takeout of the minority positions as Oyu Tolgoi comes into production and once a new government is formed after the national election on June 28.
TGR: I noticed that Bob Friedland isn't anywhere to be found on the Ivanhoe website. I thought he would at least be on the board of directors.
EZ: It's a very recent change. His official title now is Founder of Ivanhoe and Oyu Tolgoi, but he's no longer in management or on the board. We think there's still one more really interesting chapter in the Rio Tinto/Ivanhoe/Oyu Tolgoi's book that's being written as we proceed―that being the takeover of Ivanhoe.
TGR: Of course, Bob has never been one to turn down a good deal. He can take credit for being the founder, take the money and do something else with it.
EZ: You're absolutely right.
TGR: It seems as if there was a little finagling last year between Mongolia and this project over how much Mongolia was going to end up getting out of it.
EZ: That is correct. Last October, headlines coming out of Mongolia talked about the Oyu Tolgoi interest increasing to the Mongolian government. A new foreign investment law has been passed, after considerable watering down by local and foreign businesses. A former prime minister and president has been arrested and is on trial. These are important domestic political issues in the context of a national election that takes place June 28. This will be one of the most important events in Mongolian history. It will set the government up for the next four years and, likely, for the next two to three terms of government, as the incumbents ride the tide of what will be incredible growth in one of the fastest-growing countries in the world. This is a fiercely competed election.
TGR: What's at stake? Are there competing factions that have some drastically different ideas? Or is it just about who gets to pull the strings?
EZ: There are two leading parties, the Democratic Party and the Mongolian People's Party. Both are pro-business; both share very similar ideologies and a similar mandate. Three of the last four governments became coalitions, despite one of the parties typically having a majority. At the last election, the coalition controlled 90% of the Parliament and set out a framework with consensus decision makers. Although it takes a lot longer to get things done in Mongolia because of this process, it does set out widely adopted and endorsed policies that guide the country forward.
TGR: What's the level of corruption or lack of corruption in Mongolia? How straightforward is its system?
EZ: In any frontier market, you're always going to see some issues around corruption. Mongolia's democracy is only 20 years old and is going through growing pains. It's setting out rules and being increasingly strict to the letter of the law around keeping all businesses and politicians in line with Western standards. As more foreign investors and money come into the country, those are subject to rules in the U.S., the UK and Australia, which have their own corruption standards and bribery acts. These are now being brought into Mongolia as adopted standards.
TGR: It sounds as if Mongolia actually had an opportunity to build a system from the ground up without decades or centuries of corruption in place.
EZ: It's obviously a sensitive topic and one that we've seen across Africa, Russia, China and Kazakhstan. Because of the size and scale of some of these mining projects, the incentives just become far too distant from the reality of the people setting up policy and rules. What you have are these massive projects being governed by individuals who are sometimes being paid $800/month, and signing off on $1B checks. There's a massive disconnect there, which is coming into line in Mongolia. The rules being put into place are all great steps forward for the country.
TGR: How strong is China's influence on what's going on in Mongolia as far as the development and maybe even the government?
EZ: Mongolia's lifeblood is essentially China―90% of the exports last year were China-bound, but China is also Mongolia's Achilles' heel. Mongolia finds itself land-locked between two of the biggest political giants in the world, Russia and China. To the south, the Chinese share nearly a 5,000 kilometer (km) border with Mongolia and have the strongest hand of anyone because the Chinese are the only consumers at the moment, and likely to be for a while, of Mongolia's exports. Mongolia is 1,500km from the nearest seaport, which is in China.
To the north is Russia. Ulaanbaatar, Mongolia's capital, literally means red hero. The Great Wall of China was built centuries ago to keep Mongolia's national hero, Genghis Khan, out of China. (Mogi: actually built way before Chinggis, to keep out the Huns) So there's a long history between the three countries. Unfortunately, China is essentially calling the shots on some of Mongolia's commodities pricing. Mongolia is a price-taker to the Chinese who pay about $0.50 on the dollar for coking and thermal coal versus what it would pay to the Australians or Canadians for the same seaborne coal delivered to the ports on the Eastern Chinese Coast.
TGR: So China really calls the shots, because it's the only reasonable buyer in sight at this point.
EZ: It is. Mongolia will finally begin building 5,000km of rail that will provide an alternative route for Mongolian commodities up through the far eastern Russian ports in Vladivostok and Vostochny. When that day comes, the valuation argument on many of the Mongolian commodity companies will be incredible because it will essentially reset the selling price of what they're producing to a much higher level.
TGR: Let's talk about some individual investment opportunities that our readers might be interested in taking a look at.
EZ: I'll kick off with Ivanhoe. I can't stress it enough. The current share price around $10/share implies about a $7.5B market cap. Put that in the context of the cash flow that is essentially underwritten, fully financed and near term from Oyu Tolgoi, with copper-gold coming out of the ground at next to zero or negative cash costs for the next 50�60 years. This is a near-term production story just months away. Now, put the $5B in revenue this project will see in only a couple of years, as it ramps up, into context with the other assets in the Ivanhoe portfolio.
These include SouthGobi Resources Inc. (SGQ:TSX; SGQRF:OTCBB) and Ivanhoe Australia Ltd. (IVA:TSX; IVA:ASX). Combine those two and some other peripheral assets and the Ivanhoe stable is probably $1�1.5B in value. Adding the sum of the parts, excluding the peripheral assets, it's essentially valuing Oyu Tolgoi at $5�6B, less than the $7B capital that's been put into the ground. It's hard to see how Ivanhoe can get any cheaper. Rio Tinto obviously understands how good this company is and has been out in the market buying shares as high as $25 not too long ago. I don't think Rio will delay the inevitable by doing a creeping takeover over many years. This will be a play that it just has to get its hands on quickly and at the right time and price. Rio Tinto is really an iron ore company with a mix of other commodities, when you look its commodity portfolio. Some 75% of its cash flow is from its iron ore assets. Oyu Tolgoi is a tier one global mining asset and goes a long way to solving a commodity diversification problem for Rio. So that's Ivanhoe for you.
TGR: What else do you like?
EZ: In the copper-gold space, there's one that we know quite well, Kincora Copper Ltd. (KCC:TSX.V), which listed last summer. We are a small shareholder in Kincora. The company holds a former Ivanhoe group of licenses in the South Gobi, about 140km northeast of Oyu Tolgoi and on the same copper-gold belt. Kincora is a vast exploration copper-gold company. It's well known in Mongolia. It has a known and very large porphyry system, spanning about 7km across. There have now been about 100 holes drilled over the last decade in Kincora's license area known as Bronze Fox and it was one of the top three priority targets, along with Oyu Tolgoi and one other in Mongolia, which Ivanhoe was exploring five or six years ago, before Ivanhoe was forced to succumb to political pressure to relinquish a significant part of its Mongolian land holding in order to advance Oyu Tolgoi with government support.
Robert Friedland in a famous quote once said that Oyu Tolgoi and Bronze Fox both kept him awake at night. He was not sure which one, if not both, would end up being the next jewel. He's discovered Oyu Tolgoi, and we think Bronze Fox is on the cusp and is a fantastic target as well. Just a bit about the company―it has a massive continued mineralization zone, across 7km, completely open at depth. Kincora is now drilling for the high grade having identified an incredible copper-gold porphyry footprint spanning several kilometers. The company is drilling throughout the summer, as many others are in Mongolia. Four rigs are on site with a world-class team of geologists both formerly of Rio Tinto and BHP Billiton Ltd. (BHP:NYSE; BHPLF:OTCPK).
The risks on junior miners are always that the high grade is never found and the company suffers a painful, slow existence. To mitigate that while continuing to drill for the next Oyu Tolgoi, Kincora is reviewing plans for a small operation to mine out the copper oxide ore and also reviewing a small operation of the gold and copper sulphide ore. That can be done at low capital cost of under $15M. The company is currently working at a scoping study level with indicative results showing a $10M/year cash flow operation for the next 10 years, which would provide funding for continued exploration without dilution to shareholders. It's by no means definite and by all means risky, but it is unique in the junior mining space.
A third company I'll touch on briefly, which we know well, is Undur Tolgoi Minerals Inc. (UTM:CNSX), backed by Firebird Funds, which is a New York private equity fund. Firebird has been in Mongolia for about five years and has sizable investments across much of the coal space and has been involved with Undur Tolgoi for the past year and a half. Undur Tolgoi is an early-stage copper exploration prospect in the South Gobi. It has yet to drill, but it is doing sampling and some seismic work. It's less advanced than Kincora but also could be a very exciting prospect in the near or medium term.
TGR: When might there be some news on Undur Tolgoi?
EZ: The news flow in Mongolia dries up in the winter (Mogi: hmmm) other than selective M&A because the temperature goes to -50′C. It's not a very pleasant place to be managing drill rigs and pipes in the Gobi desert. The drill rigs come out in early April and drill through October/November. The lab results come out in late summer/early fall and into early winter. That's when the news flows out of some of these companies. We would expect to see news from both Kincora, Undur Tolgoi and potentially even Ivanhoe over late summer, if not sooner, providing an extra bit of volatility to get share prices moving and returns for investors.
TGR: Are you seeing much investor interest in Mongolian resources from around the world? Or is it still not that high profile?
EZ: No, it is. We've been on the ground floor for the past two years and we see investors who actually want to be there and come and kick the tires on their own. We've seen a cross-section of private family offices, high net worth individuals, commodity traders, big and small companies and sovereign wealth funds coming through the office on a regular basis, looking for opportunities firsthand. Some of these individuals and family offices you never knew even existed. You can't Google these investors. These are very sophisticated people who understand the risks of frontier markets and are very open to taking that risk on and looking for exceptional returns. Last summer, we had six of the world's top 250 billionaires literally come through our office. That shows that Mongolia is on the radar of some of the big investors, and they're coming to take a look for themselves. Some are leaving frustrated because they know something is going to happen but they just can't quite figure out how to get involved. The smart money investors are finding a way in the end.
TGR: How does the average Mongolian feel about all of this influx of capital and interest?
EZ: Most Mongolians understand the value of foreign investment. There was $5B of foreign direct investment last year versus a GDP of only $8B. Mongolians are seeing their lives change. They are seeing roads and apartments being either built, fixed or completely overhauled. They are seeing the value of wages increase and the ability to travel abroad. Improvements in medical standards and social programs will take longer. But these are all improvements that are well applauded domestically. There is always a small minority of disinterested locals who think foreign investors have no business in their country. Sometimes that becomes the more vocal view, but it's not the case in Mongolia.
TGR: Pretty much everybody has something to gain other than the people who want to continue living in their yurts and herd animals.
EZ: For example, TavanTolgoi, a 7 billion ton (Bt) coal deposit, which is the world's largest or second-largest coking coal complex globally, is carved into 1 Bt pieces. One of those pieces is called Tsankhi, which will be listed; 20% is being given outright to Mongolian citizens as a birthright in the form of electronic shares in this company. They haven't turned into cash yet, (Mogi: Eric should catch up on some latest news) but there is the clear opportunity for domestic citizens to be able to participate in the Mongolian growth story along with foreigner investors.
TGR: Can you leave us with some parting thoughts on the investment opportunities in Mongolia and what our readers ought to consider if they decide they want to get involved in the region?
EZ: Mongolia is an investment destination that is too good to be overlooked. It should be a piece of any emerging market investment portfolio, providing exposure to a growth story that has 30% nominal growth and 16�17% real growth, at a time when much of the world is in a very fragile state.
There are a number of ways to get that exposure with varying degrees of risk. You can go as far as being a direct investor in the asset. I personally own real estate in Mongolia. You can do it through listed companies. You can do it through private funds. You can do it by holding cash in a high, 12% deposit rate bank account in some of the most secure banks in Mongolia, which are well-applauded by foreign investors and something we do through the MSE Liquidity Fund that I co-manage with Luke Leslie and have seen eight consecutive months of positive investment returns since inception at an annualized rate of 20% to investors.
We think listed companies are interesting. They're the safest and most liquid. They are obviously further down the chain in that other investors have participated ahead of the listing. Direct investing comes with its own inherent risk of due diligence, property diligence and illiquidity. The various alternatives are really dependent on individual investor appetites.
TGR: It seems the easiest way for most North American investors would be to invest in U.S. or Canadian companies that have projects going on there. I suppose they can also try to buy things that are listed on the Mongolian Stock Exchange, which we really didn't get into.
EZ: We're also putting together private domestic bespoke deals that we're immediately taking public on the MSE and are just completing our first listing with eye-watering returns for our clients and MSE Liquidity Fund that participated in the private round in February. This is another way for investors to participate. Ultimately, it comes down to the individual risk profile, the need for liquidity and taking a long-term view of Mongolia. Cut away the headlines, the rhetoric and the news ahead of the election, and simply look at the growth and the fantastic tier 1 mines in Mongolia that have already caught the attention of some of the best global mining companies. Look at what this is going to do to a population of 2.8M people with a GDP of only $8B. It's incredible for a small democracy where the rule of law stands, where there are no religious sectarian views and there's a very young, ambitious population, with a free-flowing currency and market economy. The recipe doesn't get much better than that for frontier investing, in my view.
TGR: It is a very interesting situation. Thanks a lot for joining us today.
EZ: I appreciate you having me.
Eric Zurrin is director general of Resource Investment Capital, responsible for its operations in Mongolia and coordinating capital sourcing through partner distribution networks in the international markets. Zurrin joined ResCap in 2010 with nearly 10 years of investment banking experience with UBS Investment Bank's Global Industrial Group in London and BMO Capital Markets in Toronto and London. Zurrin holds a Bachelor of Commerce degree from the University of Manitoba in Canada.
IDN ccTLD Request from Mongolia Successfully Passes String Evaluation
MARINA DEL REY, CA, June 21 (AG-IP News) - Internet Corporation for Assigned Names and Numbers (ICANN) announced in a press release the successful completion of String Evaluation on proposed IDN ccTLD string for Mongolia.
Details of the successful evaluation are provided here:
The IDN (Internationalized Domain Name) ccTLD Fast Track Process was approved by the ICANN Board at its annual meeting in Seoul, South Korea on October 30, 2009. First requests were received starting 16 November 2009. The process enables countries and territories to submit requests to ICANN for IDN ccTLDs, representing their respective country or territory names in scripts other than Latin. IDN ccTLD requesters must fulfill a number of requirements:
・ the script used to represent the IDN ccTLDs must be non-Latin;
・ the languages used to express the IDN ccTLDs must be official in the corresponding country or territory; and
・ a specific set of technical requirements must be met (as evaluated by an external DNS Stability Panel comprised of DNS and IDN experts).
MEASURES FOR STABILIZING PRICE OF FUELS AND MEAT
Ulaanbaatar, Mongolia, June 21 /MONTSAME/ At its regular meeting held on Wednesday, the cabinet got acquainted with implementation of the "Stabilizing prices of autofuels, diesel fuel, foods and public transport' program.
According to reports delivered by authorities of the Minister of Mineral Resources and Energy, and the Oil Authority, AI-80 and AI-92 autofuels will come to Mongolia soon. Thus, the reserve of oil products will be enough for two months, and it is expected the price of the fuels will be stable.
Within the program, measures have been taken to stabilize the fuel price and to reduce the prices by up to MNT 100 in several phases after determining factors of the price boost. As result of this, fuels' price has gone down by MNT 168 to MNT 1593.3. In order to recover loss of the public transport sector and to keep the price by providing subsidies, the cabinet decided to allot money of MNT 395.953.5 from the reserved fund to set off losses caused by the price boost of fuels in some public transport entities.
It has been considered that the price of meat increased due to an inappropriate management of meat delivering and supplying, a trade though the speculators and an uncontrolled situation of meat export. Thus, up to 15 tons meat will be reserved, and works will be done to prepare meat and sell it through retailers. Related contracts have been established with provinces. Moreover, the Administration of City has been allowed to take a loan of MNT 40 billion from the budget for preparing meat. The meat export has been limited until July 1 in order to protect the domestic market.
Ger District Development to Intensify
Ulaanbaatar, Mongolia, June 21 /MONTSAME/ At a regular cabinet meeting held on Wednesday, the cabinet members and authorities of Ulaanbaatar city were entrusted with intensifying measures to develop ger areas of the capital city.
In this regard, citizens' proposals and initiatives will be supported for a development of the infrastructure sector and augmenting investments. Then, the Minister of Food, Agriculture and Light Industry T.Badamjunai gave a detailed report to the cabinet members on creating a legal environment, tackling the financial matters, reducing air pollution, land management, urban development, public and private apartments houses fully equipped with engineering facilities, autoroads, public transport, waste management and civil participation.
According to the report, Ulaanbaatar city has about 306 thousand families and 184 thousand people are living in ger areas by the first half of this year. In frames of a goal to develop the ger areas, a bill on land cadastre is being discussed at parliament, and draft amendments to the laws on urban development, on construction and on other issues are being worked out. With a soft-loan of USD 300 million from the People's Republic of China, construction works are being done for the #7 and #14 micro-districts and for piping system of the ger area near the Public Radio and Television.
The Development Bank of Mongolia (DBM) has begun to grant a financing of MNT 23 billion to realize projects on engineering pipes and construction. In addition, loans with 6 per cent interest are being granted to citizens.
The cabinet meeting also considered issues on the air pollution and land ownership of citizens. According to the report, over 90 thousand citizens in the city have owned land for family purposes by the first quarter of this year. More than half of the ger areas have been illuminated. 62 km autoraods have been constructed and 15 km road is being built in ger areas as well in frames of the "New Great Construction" program. It is planned to construct 171 km roads in the areas until 2016.
After the cabinet meeting, head of the City's Department of Construction, Urban Development and Planning E.Khurelbaatar reported that works are been done to improve ger areas and constructing pipelines under the Master Plan of Development for UB city with projects implemented by the World Bank (WB) and Asian Development Bank (ADB). For instance, 185 km pipeline for drinking water has been constructed in ger areas in a scope of the WB's project.
Politics in Mongolia: Throwing stones
While the political elite squabbles, people worry about other things
June 23 (The Economist) AT THE Communist-era Cultural Palace in Ulaanbaatar, a mere stone's throw from the Government Palace he once occupied at different times as president and prime minister, Nambariin Enkhbayar held a political rally just days before a crucial parliamentary election and was greeted like a rock star. Many hundreds filled the auditorium, cheering as he roundly accused Mongolia's current leaders of stealing the last election, breaking campaign promises and tormenting him in recent months with a politically motivated prosecution for corruption.
Mr Enkhbayar himself is barred from standing for parliament in the election on June 28th. Yet he and his legal woes look central to Mongolia's political and economic future. The dramatic arrest of the former president on April 13th sparked fears of open warfare among the political elite and concerns among foreign investors about stability in a nation now poised to capitalise on its vast mineral wealth. The memory of the deadly violence that followed the previous parliamentary election, in 2008, hangs over this poll.
Mr Enkhbayar has told The Economist that he is a good Buddhist, a clean politician interested only in the welfare of the people, and the victim of a smear campaign. But outside his own circle―that is, among diplomats, local and foreign businessmen, other politicians and ordinary folk―the consensus is that his long political career has been tainted all along.
The wider issue for Mongolia is that all politicians, from all parties, are seen as no better. "They all have problems. They are all the same, even the small parties. Corruption is a disease, and it is endemic," says a Mongolian business executive.
For President Tsakhiagiin Elbegdorj, of the minority Democratic Party (DP), this poses a dilemma. Allowing corruption to fester, he told The Economist, would only continue to corrode Mongolia's image and the business environment more broadly. Yet attacking corruption risks drawing even more attention to the problem, and calling into question the nation's political stability. Even so, he said, the fight cannot be put off.
The majority party in parliament is the Mongolian People's Party (MPP), the former Communists and the country's oldest political party. A senior figure, the minister of nature, environment and tourism, Tsogtbaatar Damdin, agrees with Mr Elbegdorj. Corruption, he says, must be cut so as not to endanger the country's development. Abusers of power must not feel that they are beyond the law. Any crackdown, he adds, must be "non-partisan and non-discriminatory".
For his part, Mr Elbegdorj has had to deny charges that the case against Mr Enkhbayar is more to do with political rivalry than with corruption. The president insists he has no control over the prosecutor or the anti-corruption task force pursuing the case. But, like Mr Enkhbayar, the president has seen his remonstrations met with almost universal scepticism.
Whatever the motivation for the prosecution, Mr Elbegdorj and his DP seem poised to benefit from the kerfuffle. Mr Enkhbayar's Mongolian People's Revolutionary Party (MPRP) last year split from the MPP. Riding a wave of sympathy since his arrest, hunger strike and subsequent release on bail, the standing of Mr Enkhbayar's party has risen sharply. Polling suggests that it is likely to take between seven and ten seats in the 76-seat parliament. Since most of its support comes at the expense of the MPP, it may clear the way for a possible DP victory and thus a change of government.
If it does take charge, the DP will have other issues to grapple with. One will be facing down pressure to restructure the terms of by far the biggest foreign investment in the country, the Oyu Tolgoi copper and gold mine in the Gobi desert, to give the Mongolian state a larger share of the mine's revenues. Resource nationalism has been a pet cause of Mr Enkhbayar and others, but Mr Elbegdorj and his DP colleagues insist that walking away from previous agreements would be seen as another black mark against Mongolia's international reputation.
Batsukh Galsan, a former Mongolian diplomat who is now chairman of Oyu Tolgoi, believes that, heated campaign rhetoric notwithstanding, Mongolia's politicians know that the deal, as structured, is good for the nation. "I don't think the current election or its result will create any uncertainty over the project," he says.
Other issues are purely local. At a DP campaign rally in the Khan Uul district in the southern part of the sprawling capital, much of the talk was about access to bank credit for small businesses and ways to implement a stalled land-privatisation scheme enacted long ago. Oyungerel Tsedevdamba, a DP candidate in Khan Uul, acknowledges the importance of getting a grip on corruption and improving Mongolia's image. But, she claims, local issues count for more. "Nobody here has asked me about Mr Enkhbayar," she says.
THE CWGP MISTRUSTS THE BALLOT COUNTING MACHINES
June 21 (InfoMongolia.com) The Civil Will Green Party delivered a request to the General Election Commission of Mongolia on June 21, 2012.
In their request, "The ballot counting machines that are to be used to count the votes for the Parliamentary Elections of 2012 had previously been used for the elections in the USA two times and been detected that the machines have technical failure and malfunctioning. Thus, we received information that these machines have been banned from being used. There is a high potentiality that the results of the polling might not come up true if we use those machines, thus we must do manual counting of the ballots and double check if the results match with the machine counted results.
Hereby, we are requesting you the General Election Commission to grant us with an opportunity to randomly choose at least 3 electoral commissions each from the city and rural areas and do manual counting to check whether the results match with the machine counted ones."
Further, the CWGP is also appealing the other political parties and coalitions to submit the same request to the General Election Commission of Mongolia.
Government of Mongolia spends 16.8 billion MNT for organizing the Parliamentary Elections of 2012, whereas 300 million MNT were spent for election procedures for Mongolians residing in foreign countries. On this election 2,500 automatic voting machines will be used for counting the ballots nationwide.
First Look at Campaign-Smothered Ulaanbaatar
June 21 (Julian Dierkes, University of BC) As you arrive at Chinggis Khan airport (Mogi: Chinggis Khaan), the first campaign poster is visible right outside the airport premises. On the long drive into town, posters from the two largest parties, DP and MPP, dominate all the billboards, though most of them show the candidates in the local majoritarian district (District 21 for the West of Ulaanbaatar), rather than the party per se. This changes as you get into the centre of town where some of the smaller parties also have set up campaign posters.
Just to get a sense of the intensity of advertising using billboards and posters in the town centre, we counted all the posters we saw along a 2km stretch of Peace Avenue (the main East-West axis in downtown Ulaanbaatar) from the State Department Store to the State University of Education. It is probably safe to assume that this would be the most expensive stretch of outdoor advertising available in the country.
Banners are posted on existing billboard/poster structures, i.e. billboards that are set up for commercial advertising, but have been taken over virtually entirely (at least in the city centre) by political ads. They are a mix of street-level, roadside poster frames that house posters approximately 1 * 0.4m, and much larger billboards that are on billboard structures above pedestrians' heads (perhaps 2 * 3m). There are also some rare other shapes, including some very large billboards right by Sukhbaatar Square.
On the 2km stretch we counted the following number of variably-sized posters:
・ MPP 89
・ DP 24
・ CWGP 23
・ Independent 2
・ MPRP 1
・ "Citizens' Labour Party" (их нам)
These are individual billboards most of which would be facing in two directions, but we have only counted these two-faced billboards as one in the above count.
Note that these are a mix of posters for the parliamentary election as well as the Ulaanbaatar city election.
Clearly, and this confirms a casual impression from driving into town, the MPP is investing a lot into outdoor physical advertising and is dominant in terms of the number of posters. A bit surprising, perhaps, is the much smaller number of DP posters and the virtual absence of the MPRP.
Posters are a mix of pictures of candidates with very little policy or platform information, and party posters that typically reproduce one of two central slogans for the party.
Took a while 'til my penny dropped: political vanity phone numbers
June 21 (Julian Dierkes, University of BC) When I looked at the MPP campaign poster and their "voters, phone us with your concerns" hotline earlier today, I noticed that the phone number was 1921 harking back to the revolution as a nice touch.
Not to be outdone in that regard, guess what the DP hotline's number is? 1206. Ah yes, never a good Mongolian public appeal without some reference to Chinggis Khan (Mogi: again, Chinggis Khaan) hidden somewhere in the rhetoric.
Both big parties are thus clearly harking back to glorious times in the nation's imagined history and doing so by using a vanity phone number. Oddly, especially the level of Twitter activity among Mongolian politicians, very few of the campaign ads mention URLs, FB or twitter accounts.
World Bank: Lessons from Scaling Up
Developing Value Chains for Wool � Lessons from Mongolia
June 1 (World Bank) The new "Lessons from Practice: Assessing Scalability" report aims to provide specific tools and guidance to World Bank Task Team Leaders (TTLs) and other agricultural development specialists which can assist them in identifying the potential for scaling up small, innovative projects throughout the entire project cycle � from inception through completion. The report, developed in collaboration with the Heller School for Social Policy and Management at Brandeis University, draws on lessons from the experience of the Development Marketplace (DM) in funding small innovation projects and offers strategic advice to agricultural practitioners on assessing the scalability of such projects. This Note is based on a case study from Mongolia from the report.
ADB: WE GIVE IMPORTANCE TO INTERNAL OVERSIGHT TO PREVENT FROM SOMEONE'S RIGHT WOULD ADVERSELY AFFECTED
June 21 (Montsame) Asian Development Bank (ADB) is an organization established initially in 1966 with vision Asia and Pacific region/ member countries free of poverty. In November 2011 we have celebrated 20th Anniversary of operation in Mongolia and 10th Anniversary of Establishment of Resident Mission of Mongolia. As for Mongolia where the country is about to enter the fast development track ADB is ready to assist in making solutions for the future development and also for last 20 years ADB has carried out broad activities to support Mongolia's transition from centralized economy into a market economy .
ADB has been assisting to Road, transport, energy and financial sectors of our country. There's no single soum in Mongolia where the ADB activities not been reached via the projects implemented in Health and educational sectors. ADB is planning to continue their financial support in 5 main sectors, whereas: Health, education, basic urban services, road transport and energy sectors. The amount of financial support from ADB is been increasing year after year. And the Mongolian Resident mission of ADB understands there is great need both to prevent from adverse affects of people from increasing number of projects which will occur in relation with increase in funding and to ensure the efficient use of funds.
On ADB's activities and future perspectives I have talked to Mr Shane J Rosentail Deputy Director of Mongolia resident mission of ADB. He told,
"As for this year under the consultation between ADB and Mongolian government Mongolia made a decision to become "B" class loan receiving, which means Mongolia used to have loan from special funds at ADB and after this change Mongolia will have right to get loan from ordinary capital resources of ADB. That means Mongolia will have more chances to get funding for bigger projects to be implemented in infrastructure sector.
We ADB has quite a good experience to implement projects where the issues related to gender, environmental issues, minority issues, resettlement and land acquisition issues are well considered in early project preparation stages.That's why the most of banking and financial sector players know that ADB follows a principle where we aim not to harm any adverse affects to people from our project activities.
In the past we have implemented projects in health and educational sector to deliver the basic services to remote places, road projects to connect the Ulaanbaatar city with all provincial centers and road project connecting Sainshand- Choir which about to be completed soon are the major examples of our achievement. I asked about the challenges and difficulties that were faced during implementation of these works and Mr.Shane J Rosentail's answer was:
"In past 20 years we didn't have a major difficulties in relation to our projects. But of course all things can't happen without any challenges. There were at some extend issues raised on some projects but most of them resolved in assistance of Project implementation units or Implementation Agencies of Mongolian government". "What are the common issues that were raised?".
-Issues relating to delays in funding of certain projects, issues where the unclear arrangements in communication and presence of private property on infrastructure project land were the common cases. There are many solutions to resolve the issues right on those occasions. Some cases the challenges remain without any solutions. ADB has internal accountability mechanism where we can give the final solutions to these type of issues.
- You mentioned that ADB deals the issues related to gender, environmental issues, minority issues are well considered in early project preparation stages. What is Mongolia's current ranking on these issues?
-In international practice the gender issues expressed in indices. According to this gender index Mongolia was ranked fairly high. For example recently I saw Mongolia was ranked position 3 among Asia region on gender issues. Reason why Mongolia ranked with such good result should be based on progresses made in educational sector and as well as measures and progresses achieved in maternal and infant health issues.
Not depending on whether the issue is related to gender, environmental issue or national minority issue all issues are well considered in early project preparation stages. For example according to ADB's internal requirement we put relatively high requirement on gender issue. Based on this requirement each of the projects required to have gender issue plan to be formulated. Under this plan they create criteria where the results are measurable. And this criteria used in gender issue assessment after completion of projects.
Also during the project implementation period we undertake monitoring on physical implementation of this plan. And for the project result assessment we trace back the pre-set gender criteria.
-How about number of projects implemented or the overall amount in funding these projects?
-If I express in monetary value than up to date we have assisted Mongolia with total of 829 Million USD funding in a form of financial support, loan and grant aid. Currently we have 8 loan projects with total value of 247 Million USD and 12 Grant aid projects with total value of 172 Million USD. Our main principle is to deliver the services at the possible highest level of quality. In order to implement our projects successfully we introducing the Accountability mechanism where the people can file their complaints and comments to us addressing the issues relating certain projects and we see it as one of ways to facilitate improvement in projects.
-Are the majority of financial support given in funding of projects and programs in Mongolia in a form of loan or do you also provide grant aid as well ?
-Most of the funding is given in a form of loan. Also we have provided quite substantial amount of funding in a form of grant aid. Those loans which were given earlier and for current loans the repayment conditions are softer meaning that it has low interest rate and with relatively long repayment period.
-I understood that ADB financial support activities based on 5 year strategic planning process. As you mentioned the country Strategic partnership document with Mongolia for years 2012-2016 just been approved by the Board of Directors of ADB. What are the issues reflected in this documentation?
-This documentation includes the joint consultation of ADB and the Mongolia's government on prioritizing the financial needs for the country. Of course it includes the measures to improve the gender issues, creating the good governance and constructing the basis for the sustainable economy. In general our organization aims to make development benefits available to broader areas.
-Do you provide loan to private sector? Are there any floor or ceiling limits on loans?
-We provide loan to private sector. But among the loan that we have provided the portion of private sector loan is very small. In coming years we might provide extensive investment towards infrastructure sector. Of course this sector generally requires quite a lot of financing. In this context we aiming to commence the funding based on the Public private partnership principles. That's why we assuming the loans to private sector will be increased in the future.
We generally reject from small amounted loan requests. We have policy to consider the loan requests that might bring bigger or broader results.
-How about the loan repayment in general?
-Of course any government who receives the development loans they undertake measures to control the debt amount. From our side we also maintain substantial control effort to prevent our loans become uncollectible ones. The loan repayment depends on from many factors. As for the loans given to Mongolia some of the loans had real preferential terms. Based on the Mongolian Government's request to receive loans from ADB's ordinary capital resources ADB has conducted credit rating assessment on Mongolia with cooperation of World Bank. After undertaking assessment on already issued loans the result was relatively positive.
Currently ADB is holding consultations with Government of Mongolia on 5th Power plant solutions and we have been in deep discussion with Ulaanbaatar municipal government on solutions to eliminate the traffic condition challenges. Also we are managing quite a number of activities for projects such as improving the Ger district living conditions. By saying "Hope we will have time to discuss above mentioned issues separately" Mr. Shane J Rosentail finished his introduction part of our interview. Also he added,
"This time we really aiming to give clear information to Mongolia's public on Asian Development Bank (ADB)'s Accountability mechanism . This accountability mechanism, which we use at ADB is not been used by any other projects here. Until today there were no single case of issuing complaints in which they reported people's rights adversely affected by projects that been implemented by ADB in Mongolia. But now Ms Karen Oswald will introduce us about the Accountability mechanism at ADB, of its presence and there is such a mechanism at ADB where one can send their complaints in case someone's rights adversely affected by ADB supported projects and seek for final solutions. So the interview has continued with Ms Karen.
-What is the Accountability mechanism?
The Asian Development Bank (ADB) accountability mechanism provides an independent forum for people adversely affected by ADB-assisted projects. It allows project-affected people to voice their concerns and seek solutions to their problems. They can also request compliance review of alleged noncompliance by ADB with its operational policies and procedures. In brief, any people who adversely affected by activities of projects implemented by ADB's support can file their complaints to accountability mechanism for final solutions or the mechanism should give opportunity to solve the issues based on the joint consultation of all parties of the project.
-Who is accounted as adversely affected person/ people?
-For example during the re-settlement of any project implementation some one couldn't get enough compensation. Or if some one's living standard hasn't been restored in newly settled places compared to previous location than one can file complaint. Besides that people can send complaint to us relating to designs of any project. In the case of construction of highway, the conditions for crossing the highway safely is not considered in the drawing and this also one of types of adverse affects too. That's why residents of that certain area have the right to request for construction of underground pass or flyover.
-In this case already planned and approved project needs to think about other changes. Are there any possibilities to make the change to approved plans?
-Yes. But a lot would depend on the complaint filing timing. If the complaint is sent earlier or in the designing stage of the project the troublesome issues can be solved faster. If the complaint comes in later stages of the project it would require all parties of the project to sit in same table for consultation and seek for the better solutions of the problem. But it's clear that if the harm is already happened than it will require additional cost and additional effort to correct the condition.
-In past none of complaints went up to accountability mechanism level for its final solutions, does that mean ADB had real smooth flow of operations or is that mean Mongolia has favorable legal environment?
-I think both factors have played role in it. I would like to highlight that the efforts made by project implementation units, Government of Mongolia and Operations department of ADB to solve the issues in earlier stages within the project has played big role for this achievement. Also it will show us the good performance of the Resident mission of ADB in Ulaanbaatar..
From our side who run the accountability mechanism it's very essential to introduce to public about this method of finding the positive solutions to your issues and complaints. So now its becoming our main task to introduce our job to people who living in far west of Mongolia who might be adversely affected from project activities.
The issues relating to environmental hazards or issues regarding the minority groups are clearly defined in the Grievance redress documentations. And the accountability mechanism gives opportunity to prevent any of issues that caused complaints wouldn't swell to later or more harmful stages.
-Accountability mechanism is a mechanism that seeks solutions as after risk occurs. Are there many of potential ways of solving issues prior the risk occurrence?
There is one common requirement to all of ADB funded projects. This requirement is we should listen to ideas and comments from all stakeholders which will be engaged to project implementation. In other words the interests and requests from stakeholders must be reflected in project preparation period to certain level. Also we require that full information about the project should be delivered to local community on regular intervals. With all of above mentioned measures we try to provide conditions to prevent from any risks. Also we conduct initial environmental assessment during the project preparation period. Same time we carry out initial socio and economic evaluations. All of these evaluations become more clear criteria and requirements and they reflected in final project. Also it might include very simple actions and measures. For example the basic requirements such as translating the materials for certain regions of any country to make the materials easier to understand for local people can be an example. There are many examples that I can tell you. For example in relation to construction activity let say the dust pollution occurs in very small amount, but we still require making environmental impact assessment. In other words the noise or vibration created from construction activities really impacting negatively to people's living conditions than the accountability mechanism gives opportunity to solve the issues before it becomes more serious issue with more potential harms.
-Can any one who understands he/ she is been adversely affected file a complaint for solving the issues?
Yes. But ADB receives complaints that filed by any group of two or more people. It's open to every case when you think you already adversely affected or you think that you might be adversely affected in the future because of projects. But there is one condition that we require. Matters that the complainants have made good faith efforts to address with the operations department concerned and failed to get solutions are filed to next level of solution seeking process -Accountability mechanism
- Is that mean that Accountability mechanism is an organization where it receives complaints from complainants who failed to resolve the issues at project or in initial levels ?
-Is there any criteria to complaints? Will you be accepting complaints on very small issues as well?
-We do have the basic requirements to complaints. There is also framework of issues that don't directly concern to Accountability mechanism. For example the issues related to allegations of fraud and corruption will not be resolved at accountability mechanism. For these issues ADB has separate department that deals with these issues.
-How wide are the possibility to solve the issues at initial or project level?
-There are many cases where matters that the complainants have made good faith efforts to address with the operations department and loan receiving Government are solved in project level not letting the issue go up high to next level. In recent years in relation to expansion of our activities the numbers of cases filing the complaints and processes to solve them are increasing the same pace.
-What are the common types of complaints?
-Majority of complaints related to re-settlement issues. But for this I'm not talking about Mongolia. So far. What kind of conditions might rise in Mongolia in the future is hard to predict. The re-settlement related issues are happen quite lot in those countries where they implementing huge infrastructure sector projects. Also complaints come on issues like the participation of stakeholders not been fully available during project preparation period and also complaints come on issue explaining that project is not providing full information about what going to happen. Of course it will not be such pleasant news to any person when he receives a notice that requires him to leave his place and be a part of re-settlement without any prior information. That's why delivering the information on timely basis is very essential to projects. Also its quite common that we receive complaints from Road and transport sectors. If we think on regions than in recent years complaints coming more frequently from South Asian countries. But from East Asian countries we received only 1 complaint and it was filed from China..
-From what you told me I understood that you receive complaint on many issues. But what that means you received only one complaint from East Asian countries? Is that mean you haven't received any complaints from other East Asian countries and from Mongolia?
-The majority of complaints been solved at project level right as after the complaints been filed. In other words ADB holds a principle where we understand it's not a correct approach that we solve the issues at Last resort and rather we encourage the project level solution of issues. And this is the reason why we receive a few complaints that failed to be solved at project or initial level and comes to Accountability mechanism.
-There is Compliance review Panel operates under Accountability mechanism . Can you tell us about this briefly?
-There are 2 offices operate under Accountability mechanism. Compliance review panel is one of these 2 offices. The compliance review function investigates alleged noncompliance by ADB with its operational policies and procedure.
As for the involuntary re-settlement ADB holds a strong policy that we create better living conditions for settlers compared what they used to have in pre-settlement areas. At least we aim to restore the conditions where people used to live. Also we have internal department that monitors and ensures these restoration works.
-Based on the behavioral conditions Mongolians are very calm and we tend not to much complaining. If there are cases that we file complaints than what are the areas of issues?
-As for Mongolia up to date even the cases of complaints in project level is also very few. We assume that in relation to extensive implementation of projects in infrastructure sector we will be receiving more complaints in this sector. If we look from other point than it reflects the fairly well performance of Agencies and staff in charge of certain projects. Also it tells that methodology to plan the issues and solve the issues in place. Also ADB encourage Mongolian Government to use its internal procedures to solve the different issues. The cooperation of ADB and host country Government plays significant role in solving the issues in early stage.
But ADB is not an organization that deals solely to only host Governments. We aim to ensure the participation of civil groups and organizations and try to make solutions on issues based on joint consultation with civil groups. In general ADB's operations concentrate on to prevent that someone's rights would adversely affected from any of certain conditions.
Dinosaur Entered U.S. Illegally, Faces Deportation
A dino skeleton about to hit it big has been nabbed by the immigration police.
June 21 (Time) A 70-million-year-old dinosaur, who may have been about to launch a huge career as a museum star, has been discovered to have entered the U.S. illegally and under false pretenses. He will be swiftly deported and returned to the hands of his home government in Mongolia.
The dino in question is a nearly complete skeleton of a Tyrannosaurus bataar, a smaller Asian cousin of the Tyrannosaurus rex. The skeleton was auctioned by the Dallas-based firm Heritage Auctions last month for $1.05 million, but ― if paleontologists and prosecutors have their way ― will never meet his new owner.
After a paleontologist at New York's Museum of Natural History (Mogi: Trying to get credit for bringing this issue up it seems) got suspicious after spotting the fossil in an auction catalogue, Manhattan U.S. attorney Preet Bharara cracked down, ordering that the specimen be sent back to its home country of Mongolia, where it was apparently first discovered in the Gobi Desert in the 1940s. The New York office of Immigration and Customs Enforcement has filed a civil complaint asking that Heritage Auctions forfeit the skeleton back to the Mongolian government.
This dino was sneaked into the US with false papers and a fake identity, prosecutors charge. It seems that importers lied on nearly every line of his customs forms. The documents stated that Bataar was actually a collection of broken and assorted junk fossil bones worth only $15,000, and that his home country was Great Britain.
But Bataar is being deported not just because he entered the U.S. under false pretenses, but because he is wanted by the Mongolian government. Mongolian law declares all dinosaur fossils to be government property.
Bataar is a natural beauty, needing far less artificial reconstruction than many other major fossil finds, and especially rare because he still has 80 percent of his original claws and 75 percent of his original teeth. The famous T. Rex at the American Museum of Natural History in New York is a fake by comparison: that skeleton is actually built out of the remains of two different dinos.
Bharara has pursued Bataar's deportation not just for legal reasons, but because he is aware of the special contribution that Bataar makes to his home country, and how much his compatriots miss him. "When [Bataar's] skeleton was allegedly looted, a piece of the country's natural history was stolen with it, and we look forward to returning it to its rightful place," Bharara explained in a Department of Justice press release.
US Takes Control of Dinosaur Skeleton in NY Friday � AP, June 21
US government to seize $1m Mongolian Tyrannosaurus bataar � BBC, June 21
Did the Department of Homeland Security just steal a dinosaur skeleton? � The Capitol Column, June 21
(Mogi: Funny) UPDATE: Free Lenny The Tyrannosaurus Bataar Dinosaur Named In Federal Lawsuit By DOJ � Forbes, June 21
Florida fossil dealer defends handling of $1 million dinosaur skeleton
NEW YORK, June 21 (AP) ― A Florida dealer of fossils who acquired the remains of a dinosaur that the government plans to seize says he is "not some international bone smuggler" and that he risked his finances and reputation to put together the skeleton to promote a love of science in others.
Eric Prokopi, 37, struck back Thursday at the U.S. government's account of the Tyrannosaurus bataar fossil it seeks to hand over to Mongolia.
"I'm just a guy in Gainesville, Florida trying to support my family, not some international bone smuggler," he said in a statement obtained by The Associated Press.
He said transforming chunks of rocks and broken bones "into an impressive skeleton took thousands of hours and every penny my wife and I had, but it was fascinating.
"We were thrilled and couldn't wait to share him with the world, and hoped it would inspire others to see the magic of paleontology and develop a love of science and appreciation of nature," Prokopi said.
Prokopi contested government claims in papers it filed in federal court in Manhattan this week that the skeleton was brought from Great Britain to Gainesville in March 2010 with erroneous claims that it had originated in Great Britain and was worth only $15,000. It was sold at auction last month for more than $1 million, though the sale is contingent upon the outcome of litigation.
A judge earlier this week said the government could seize the 8-foot-tall, 24-foot-long skeleton from a Queens art storage facility because it appears the government will succeed in its claims. The skeleton was scheduled to be picked up Friday. Prokopi accused the government of caving to the will of Mongolia, saying he hoped "the American legal system will uphold the American laws and not sacrifice my rights and freedoms to please a foreign government out for a political trophy."
The commercial paleontologist said that the U.S. government wrongly claimed he misrepresented what was being imported and its value.
"I can wholeheartedly say the import documents are not fraudulent, a truth I am confident will be brought to light in the coming weeks," he said. "The value was declared much lower than the auction value because, quite simply, it was loose, mostly broken bones and rocks with embedded bones. It was not what you see today, a virtually complete, mounted skeleton."
Ellen Davis, a spokeswoman for government lawyers, declined to comment Thursday.
Prokopi said and his wife hoped the skeleton would be bought by a museum or collector who would put it in a public forum, but the controversy that erupted caused museums to back out of the sale.
Prokopi also challenged assertions by experts that the skeleton had to originate in Mongolia, saying it was true that they are mainly known to come from the Gobi desert of Mongolia, "but they've also been found elsewhere, and it's certainly possible a new locality with complete specimens was discovered in another country."
He said they were "stunned by some of the public's reaction to the sale because commercial paleontology and private collectors are a vital part of bringing some of nature's most precious treasures to museum's worldwide."
Prokopi also challenged claims by some experts that the skeleton was collected poorly.
"I believe this specimen was expertly excavated, and the only damage that was done was caused by the elements," he said. "The claws and some teeth had weathered away and some teeth had slipped out before burial. I believe this specimen was expertly excavated, and the only damage that was done was caused by the elements."
He said claims by experts that it had been unearthed in the last 17 years could not be trusted.
"Other than the diggers, there is no way for anyone to know for certain when or where the specimen was collected," Prokopi said.
He defended commercial paleontology, saying the business was "full of intelligent, passionate people who love paleontology, not bone smugglers just looking to steal from important scientific research."
He said he was "headed toward total financial ruin" because the lost sale of the dinosaur had "irreparably devastated my family financially, it has cost several people their jobs, taken an emotional toll on my life and two young children and damaged my reputation as a commercial paleontologist."
Prokopi added: "If it weren't for people like me, some of these bones would just turn to dust and none of us would ever get to see or study them."
"Mogi" Munkhdul Badral
Senior Client Manager / Executive Director
CPS International LLC
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