Wednesday, July 4, 2012

[CPSI NewsWire: Chalco Extends SouthGobi Takeover Bid Till August]

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

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Chalco announces delay in bid for SouthGobi stake

July 3 (Reuters) - Chinese aluminum giant Chalco delayed plans to acquire a controlling stake in Mongolia-focused coal miner SouthGobi Resources Ltd (TSX: SGQ; HK: 1878) on Tuesday, as it continues to work on securing regulatory approvals in Mongolia and outside.

In April the Aluminum Corporation of China Ltd , better known as Chalco, announced a $926 million bid for a controlling interest in SouthGobi, which owns large coal projects close to the Chinese border.

The proposed deal has the backing of Ivanhoe Mines Ltd (TSX:IVN)(NYSE:IVN)(NASDAQ:IVN), which currently owns a controlling stake in SouthGobi.

But it ran into obstacles immediately, after the Mongolian said it would enact new investment rules allowing it to review deals involving foreign companies that have assets in Mongolia.

Ivanhoe and Chalco agreed to cooperate with Mongolia to ensure any requirements under the country's new strategic foreign investment legislation are satisfied.

Chalco and Ivanhoe said on Tuesday they would extend the time for Chalco to make a proportional takeover bid for up to 60 percent of the common shares of SouthGobi by 30 days.

Chalco will make its C$8.48 a share proportional offer to all SouthGobi shareholders on or before August 3, the companies said. They gave no reason for the delay.

Ivanhoe has entered into a lock-up agreement with Chalco and has agreed to tender all of its SouthGobi shares, on a pro-rata basis, to Chalco.

Vancouver, British Columbia-based Ivanhoe, itself now majority-owned by global miner Rio Tinto, plans to use the proceeds from the deal with Chalco to fund development of the massive Oyu Tolgoi copper-gold project in Mongolia.

SouthGobi shares were up 5 Canadian cents at C$3.90 soon after the market opened on Tuesday.

Link to article

Link to IVN release


Mongolia Energy Slumps To Lowest In Five Years: Hong Kong Mover

July 3 (Bloomberg) Mongolia Energy Corp. (276), a mineral and energy explorer, fell to the lowest level in more than five years in Hong Kong  after posting a record full-year net loss.

The shares dropped as much as 15 percent to 35 Hong Kong cents and traded at 35.5 cents as of 11:14 a.m. local time, the lowest level since Feb. 7, 2007. The benchmark Hang Seng Index gained 1.6 percent. Hong Kong's stock market was closed yesterday for a holiday.

The net loss widened to HK$4.83 billion ($623 million) in the 12 months ended March 31 from HK$310.8 million a year earlier, Mongolia Energy said in a June 29 filing to the Hong Kong stock exchange. The explorer said it accounted for a HK$4.6 billion impairment loss related to its Khushuut coal mine operations in western Mongolia.

Demand for the company's coking coal in China's northwestern region of Xinjiang "will likely increase significantly" this year and the "Khushuut mine project will soon be a positive cash-flow contributor to the company," Mongolia Energy said.

Link to article


Mongolia: Manas needs more seismic before drilling

July 3 I(Oil & Gas Journal) Manas Petroleum Corp. (TSX-V: MNP; OTCBB: MNAP), Baar, Switzerland, said its subsidiary Gobi Energy Partners LLC has secured a rig to drill two exploratory wells in Mongolia starting in August 2012 but the prospects require more seismic so that the company may pinpoint the best locations.

The 2011 and 2012 work programs of seismic and passive seismic allowed the delineation from scratch of 17 prospects and leads in five subbasins. Ranking resulted in selection of the Ger Chuluu and Sainshand A prospects to be drilled in the first phase. Unegt B, based on a lesser known petroleum system and therefore not suitable as first well, is to be third.

Due to the polyphasic tectonic environment--extension followed by large-scale strike-slip and inversion—Ger Chuluu and Sainshand A need more seismic to mitigate structural risk before drilling. No major changes in closure or area are expected, but trap compartmentalization has to be assessed as this could influence the location.

Furthermore, both prospects have multiple targets, and therefore reservoir dipping has to be checked by additional seismic to ensure overlaying in the drilling location.

Manas signed a contract in March 2012 with Sinopec for 335 line-km of additional seismic on blocks XIII and XIV that is to start in mid-July. The drilling contract is with Sinopec's Shengli Petroleum affiliate, and the rig has been mobilized and inspected and awaits the seismic outcome. Drilling depth at Ger Chuluu 1 will be 1,200 m.

The blocks are in the East Gobi basin about 800 km northwest of Beijing.

Link to article


Betting on Mongolia as a Source Material Provider (OTC:NVMN)

July 2 (SmallCap Network) I like what Nova Mining Corp (OTC:NVMN) did today, got right in the middle of a supply chain. I recall a gasoline company that did something similar with Southwest Airlines when jet fuel was in short supply and the company guaranteed Southwest a supply and a discounted price off an average national gas price. Southwest kept flying 'efficiently' and the 'middle-man' made a nifty profit. 

That's how I see today's Nova Mining deal.

Apparently lithium is in short supply and product-makers like smart-phone manufacturers and tablet makers and electric car makers are all in a mad dash for the raw battery component at a cheap price of course.

Along comes NVMN who said today the Company received the reports and government license documents on the third lithium mining property owned by Mongolian National Mining Consultants Limited (MNMC).

Management states that the reports are encouraging as were the reports on the first two properties. Nova Mining Corp has contracted with MNMC for the exclusive right to purchase 100% of the lithium produced from three large licensed MNMC mining properties at a discount to market price

MNMC is a Hong Kong company, with its principal business operations inUlaanbaatar, Mongolia. MNMC is the registered owner of multiple mining properties that are located in Mongolia.

Recent Surveys of MNMC's large mining properties indicate significant quantities of commercially recoverable Lithium reserves. As part of the new lithium purchase deal, Nova Mining has the right to perform Due Diligence on the three licensed lithium fields, prior to both parties promulgating the Definitive Mineral Production Agreement. 

Since Nova Mining is in the business of finding supplies of strategic high-demand minerals, such as lithium, and locking in deals with miners, I would say today's news is encouraging to say the least…

"We are moving forward!" stated Nova Mining President James Dilger. "We have the initial financing commitment to continue our assessment of the MNMC deal, and we will actively pursue the finding and securing of additional lithium assets. It appears Nova Mining Corp has selected a potentially very lucrative point to make bold moves on securing lithium supplies. All of the activity we are seeing leads us to believe that lithium will continue to escalate in price and supplies will become even more valuable." 

Shares of NVMN were up today in trading at $1.56. I'm confident a logistics table is in the works for shareholders to understand the entire chain resulting in a revenue. 

Link to article


Success story: Since the inception of Oyu Tolgoi…

July 3 (Oyu Tolgoi) It is now impossible to imagine the economy of Mongolia without Oyu Tolgoi. A number of changes have occurred since the Oyu Tolgoi project began. It was Oyu Tolgoi that played a significant role in the 17 per cent growth in the economy as it infused 7.8 trillion MNT into the economy before the start of operations. In addition, in 2011 an advance payment of 300 billion MNT was transferred to the Government of Mongolia and a total sum of 900 billion MNT will be transferred to the Government of Mongolia as taxes, payments and fees before 2013 when mine production is scheduled to start.

Mongolia is set to develop and grow as more citizens are employed and earning wages. Oyu Tolgoi has been contributing to the business development in Mongolia by creating thousands of new employment opportunities. As of today 9,621 Mongolians have a hand in this massive project. Half of the employees in all company departments are now Mongolian nationals. Further, it is expected that 90 per cent of the overall workforce in the operational phase will be Mongolian. All company employees receive an above average salary and more than 73 per cent of the total employees are highly specialized. Also, according to the figures, Oyu Tolgoi procured 1.7 trillion MNT from over 1000 Mongolian business entities in 2011

The most appropriate course of action is not to help a man just once, but to train him and enable a lifetime of income opportunity. Similarly, Oyu Tolgoi invests in education and has started to train and prepare the workforce of the future. In this regard, Oyu Tolgoi initiated a training program that cost 110 billion MNT, the largest ever in Mongolia. For the first time, the company is building three Vocational Training Centres and rehabilitating 4 Vocational Training Centres in 7 cities and settlement areas across the country. Oyu Tolgoi has trained 3,300 young Mongolians nationwide and is carrying out a capacity building training programme for 1,200 Vocational Training Centre teachers. As such, the successive programs, characterised by its emphasis on words such as 'the first' and 'the most' are in order for successive implementation.

If we take a family analogy, Oyu Tolgoi has already assembled its Ger and the secured the Crown Cover ('Orkh') on top of the structure. Oyu Tolgoi is making a large investment in construction and development projects. This is just the beginning…

Link to release



July 3 (InfoMongolia) In April 2012, the Bayanzurkh District Court of Ulaanbaatar city resolved that PetroChina Daqing Tamsag should pay the 1.3 billion MNT for causing a great damage to the environment in the territory of Dornod aimag.

However PetroChina Daqing Tamsag appealed the case to the Capital City Court of Ulaanbaatar. The appellate court trial of the "PetroChina Daqing Tamsag" LLC, claimed by Mongolian coalition of civil movements on nature protection, has been held yesterday at the Capital City Court of Ulaanbaatar on July 02, 2012. The Capital City Court judges have re-discussed this case and have decided to affirm the decision of the primary court (Bayanzurkh District Court).

The primary court determined the case of "PetroChina Daqing Tamsag" LLC that the company failed to carry out complete obligation on protecting and rehabilitating the nature during its petroleum exploiting activities in the territory of Bayan-Undur Bag (Tamsag area) of Matad sum, Dornod aimag, and has been obliged to pay out 1,356,622,460 MNT to the Matad sum budget for causing natural and environmental damages.

However, "PetroChina Daqing Tamsag" LLC had reclaimed for an appellate court saying, "The coalition of civil movements on nature protection do not have the right to claim for the natural and environmental damages caused in Matad sum. The Matad sum residents are the ones to claim for the damages caused on their lands."

Link to article


Fitch: Mongolia Election Won't Solve Credit Pressures

July 3 (Fitch Ratings) The Mongolian economy is overheating, fueled by a mining boom and soaring government spending, but promises from the newly elected coalition parties to distribute the spoils of mineral wealth means fiscal buffers are unlikely to be significantly strengthened after the election. This makes Mongolia vulnerable to a re-run of its 2007-2009 economic crisis if prices for the country's commodity exports fall sharply for a sustained period.

Mongolia has only saved 2% of GDP in its Stabilisation Fund, which is too small to shelter it from shocks. This leaves the country with little fiscal flexibility in the event of a sustained drop in commodity prices. The accumulation of systemic risks - extremely loose credit environment, inconsistencies arising from implementation of tight monetary policy, and expansionary fiscal policy and pro-cyclical public finances - makes this increasingly hard to fix.

Government spending surged by 50.1% in May on a year-to-date (ytd) basis, driven by pre-election cash handouts, outlays on wages and salaries, and capital spending. Revenue growth has failed to keep up, slowing to 18.9% ytd from 33.6% in 2011. This widened Mongolia's fiscal deficit to 7.6% in May, from 3.6% at end-2011, on a 12-month rolling basis. We expect the deterioration to continue until further fiscal mineral revenues flow in or spending is reined back.

There has been a lack of political will to adhere to fiscal discipline. There is a significant risk that the Fiscal Stability Law, which is binding from 2013 and would cap the structural deficit at 2%, will not be implemented effectively.

Rapid concentrated credit growth and a weak supervisory regime mean the banking sector could also suffer problems if a global slowdown were to result in falling commodity prices. Credit surged by 44.1% yoy at the end of May and 72.8% at end-2011, amid a negative interest-rate environment. Contagion risks are heightened further by cross-ownership as well as heavy exposure among some banks via interbank transactions.

Non-performing loans are still low at 6.1% in May 2012, compared with their peak of about 25% in November 2009 when Mongolia was hit by a full-blown banking crisis. However, this improvement is primarily attributable to the rapid growth in lending. The outstanding NPLs and loans-in-arrears have been slow to come down, and remain large at MNT375.7bn (USD283m) as of end-May 2012.

The volume of US dollar deposits in the banking system may expose the system to solvency risk through currency mismatches - when banks use funding from foreign-currency deposits to fund local-currency lending, especially in times of a sharp depreciation of Mongolia's currency. Approximately 30% of deposits are denominated in foreign currency.

Moreover, the election showed rising political pressure to limit foreign ownership in resource industries. However, Fitch regards an extreme form of resource nationalisation as unlikely given the dependence of Mongolia on foreign investment and technical know-how to extract the mineral wealth.

Link to release


Mongolia Pushes Russia, China To Re-Route Planned Gas Pipeline Across Its Territory

July 2 (Bloomberg) Mongolia is calling upon China and Russia to re-direct a planned natural-gas pipeline across its territory as the world's fastest growing economy seeks to tap the cleaner-burning fuel.

Altering the route to pass through Mongolia would save 1,000 kilometers (622 miles) of pipeline, Mongolian President Tsakhia Elbegdorj said in an interview in Ulan Bator, the nation's capital. It would also allow Mongolia to switch to gas heating in the capital, which ranks among the world's most polluted cities due to widespread use of coal-fired stoves.

"This is economically beneficial," Elbegdorj said. "We are trying to persuade our two neighbors not to exclude us from that project. The Chinese side has already agreed to discuss this and also the Russian side."

Russia has discussed a gas pipeline to China, the world's biggest energy user, for almost a decade without reaching a final agreement. Mongolia is struggling to end power shortages that threaten to hold back the development of the country's resources industry, which helped its economy grow 17.3 percent last year.

OAO Gazprom (GAZP), the world's biggest gas company, has yet to agree with state-run China National Petroleum Corp. on the starting price of supplies, according to Alexander Medvedev, deputy chief executive officer of the Moscow-based gas producer.

Dmitry Peskov, a spokesman for Russian President Vladimir Putin, said he isn't aware of the proposal to run the pipeline via Mongolia.

'Economic Feasibility'

"We are staunch supporters for energy transportation routes to be based solely on criteria of economic feasibility," he said in a phone interview. Sergei Kupriyanov, a spokesman for Gazprom, didn't reply a text message.

Gazprom plans to supply about 30 billion cubic meters a year, less than a quarter of China's consumption in 2011, via the so-called Western route. The pipeline would take gas from Gazprom's biggest western Siberian fields directly to western China through a border line squeezed between Kazakhstan and Mongolia. The plans have been questioned by analysts as China needs most of its gas for its more populated and industrially developed eastern territory, meaning the route will span a longer distance to reach customers.

While having also considered a second pipeline from eastern Siberia, which would be shorter, Gazprom has made supplies of liquefied natural gas by tanker a priority from that region. Any pipeline would only be considered after LNG export plans have been determined, Medvedev said June 18.

Price Issues

Gazprom has suspended plans to build a link from eastern Siberia, which would be shorter than the western route, in favor of producing liquefied natural gas for shipment by tanker from Pacific ports, according to Chief Executive Officer Alexey Miller. Gazprom may build an LNG plant in Vladivostok as early as 2016 or 2017.

Gazprom and China will hold the next round of talks on gas supplies this month, Medvedev said June 24. To reach an accord, Gazprom is discussing advance payments for fuel supplies, which may lower the price, as well as a potential role in marketing and distribution in China and LNG shipments, Medvedev said last month.

Mongolia, which voted to elect a new parliament last week, plans to form a trilateral working group to study changing the gas route, Elbegdorj said.

The Asian nation, which relies on Russia for almost all of its oil supply, is also working on introducing technologies that would allow it to produce the fuel and also gas from coal. Elbegdorj oversaw the signing of accords with German companies that will help Mongolia produce its own fuel from coal reserves, he said.

China's gas consumption increased 22 percent to 130.7 billion cubic meters last year, according to BP Plc (BP/)'s Statistical Review of World Energy. Mongolia hasn't been singled out as a consumer of the fuel in the review.

Link to article


Mongolia: Strength in securities

July 3 (Oxford Business Group) Foreign and domestic investor interest in Mongolia's capital markets is rising thanks to fresh progress towards the approval of a planned new securities law and plans to modernise the country's stock exchange.

The capitalisation of Mongolia's domestic stock market is expected to rise from $3bn to $45bn in the next 10 years, as foreign and domestic investors seek a slice of the country's mineral wealth. Additionally, the country's leadership has prioritised improvements to the Mongolian Stock Exchange's (MSE's) regulatory framework.

Concerns over a triple listing of Mongolian mining company Erdenes Tavan Tolgoi (ETT) on the Hong Kong, London and Mongolian exchanges, which is currently slated for early 2013 and is expected to raise as much as $10bn, has added urgency to their efforts. ETT controls what is at present the world's largest untapped coking coal deposit. Timing is also key, as there are growing worries that a slowdown in China may result in a sharp decline in international prices for coking coal.

In late April, local officials confirmed to local media that a new securities law, developed two years ago with assistance from the IMF and the World Bank, would be presented to the Great Khural (parliament) in May, adding that the new legislation was "essential" for the flurry of high-profile initial public offerings (IPOs), such as ETT, expected in the coming years.

"This law will solve many unresolved issues, such as savings books and duplicated registrations," D Bayarsaikhan, the head of the Financial Regulatory Commission (FRC), told local media.

Bayarsaikhan said the securities law will prove crucial in ensuring the success of a strategic agreement between the MSE and the London Stock Exchange (LSE). The LSE is currently helping the MSE to transform its exchange to meet best international practice.

Under the deal, finalised in April 2011, the LSE will provide the MSE with market technology, such as software licensing, training and maintenance, staff training, and advice on how to develop and eventually privatise the MSE.

"Given the LSE's management and modernisation of the MSE, important changes to the regulatory framework and the government's proposed privatisation plan for many state-owned enterprises – a large number of which are expected to be privatised through IPOs on the MSE – I believe there are significant opportunities for investing in the local exchange over the months and years to come," Travis Hamilton, the managing director of Singapore-based Khan Investment Management, told Bloomberg television in May.

The MSE has witnessed impressive growth in recent years; in 2010 the exchange recorded the best returns globally when share prices climbed 121%, and in 2011, it finished second best, with a rise of 73%.

Such figures likely helped motivate the decision of FMG, a specialist emerging markets investment firm, to launch a Mongolian-focused investment fund in April. FMG Mongolia will have a minimum investment of $10,000 and focus on the top-25, most-liquid domestically listed companies on the MSE. In its launch portfolio, the five-largest holdings are: APU, a beverage company; Remicon, a cement and concrete product manufacturer; mining firms Sharyn Gol and ETT (Mogi: TTL?); and Talkh Chikher, a confectionary company.

"[Mongolia] has huge future revenues potential and is blessed with key resources for a hungry, growing world, as well as the cost advantage of being right next door to the largest commodity consumer of them all, China," said Arild Johansen, a partner at FMG and lead manager on the fund.

Despite the investor enthusiasm, concern is mounting over what is perceived to be the growth of "resource nationalism" in the run-up to the parliamentary elections in late June. This is particularly associated with Nambar Enkhbayar, an opposition politician and head of the Mongolia People's Revolutionary Party (MPRP), who was recently arrested on corruption charges. "He is the father figure for resource nationalism, and the MPRP will definitely try to capitalise on this and maximise their chances to get more MPs in parliament," Dale Choi, an analyst with Ulan Bator-based Frontier Securities, told news agency Reuters in late May.

With massive projects being spearheaded by key figures – Prime Minister Sükhbaataryn Batbold is overseeing the LSE-MSE partnership – it is clear that the government is placing a high priority on improving the credibility of the country's capital markets. However, the MSE's market capitalisation of around $1.5bn is small in international terms, and the exchange currently only trades for two hours a day, five days a week.

If the government can maintain its open attitude to foreign expertise in enhancing regulation of the MSE, the resulting development will likely see it become more attractive to both domestic and overseas investors. With large mining IPOs expected in the coming years, the bourse has the opportunity to play a key role in the country's growth story.

Link to article


Media Personnel Attacked for Election Reporting in Mongolia

July 3 (IFJ Asia Pacific) The International Federation of Journalists (IFJ) and its affiliate the Confederation of Mongolian Journalists (CMJ) are deeply concerned by reports of an attack on eight journalists and camera operators from local television broadcaster Sky TV on June 28, 2012 in Khuvsgul aimag, in Mongolia's north. 

According to CMJ reports, the attacks on the television crew were in response to their coverage of the elections for the State Greal Hural of Mongolia - the country's highest legislative and governing body. 

At the start of the reporting of preliminary voting results on June 28, B.Ganzorig, Executive Director of Khuvsgul News LLC - the investing company of Sky television - entered the Sky TV premises with a number of other people and directed to beat  four journalists and four camera operators, accusing them of airing one-sided news that did not serve the interests of their primary investor, Mr.Lhagva Munhbaatar, who was running for a seat in the election. It is alleged that Munhbaatar, a candidate representing the Mongolian Democratic Party, ordered the attack on the Sky TV personnel. 

Local Police and Prosecutors have launched an investigation into the attacks. 

"The IFJ join the CMJ in condemning the attacks on the personnel of the Sky TV newsroom, and the attempt to influence the political reporting of the media", IFJ Asia-Pacific said. 

"Injury to journalists as retribution for perceived negative reporting is a clear violation of human and media rights. The press should be able to report freely on events in the public interest without fear for their personal safety". 

The IFJ urge local police to thoroughly investigate the attacks, and ensure those responsible are held accountable for their actions.

Link to release


Prospero Foundation Support Mongolian Micro-Entrepreneurs

The Prospero Foundation, founded by Ulrik DeBo of DeBondo Capital, is proud to announce that it has entered a partnership with a Mongolian Bank, XacBank.

Bach, Switzerland (PRWEB) July 03, 2012 -- XacBank's mission is to stimulate the sustainable development of Mongolia that can come only from educated and skilled people and competitive and dynamic businesses.

The bank provides equitable access to transparent, reliable and responsive banking products and services to clients who are deserving and hardworking, but frequently have no credit history or collateral.

Through partnerships with local lending institutions like XacBank, the Prospero Foundation contributes capital for the purpose of small business loans to micro-entrepreneurs in developing nations. Through these partnerships, the Foundation helps small business people such as farmers, shopkeepers, and artisans build their businesses and in turn stimulate economic development in their communities.

About The Prospero Foundation 

The Prospero Foundation is a private, international charitable foundation founded by Ulrik DeBo. Mr. DeBo, a lifelong entrepreneur, whose upbringing and eventual success in the finance industry, through his company DeBondo Capital Ltd, gave him the relevant experience and insight required. 

The foundation is run by a global network of entrepreneurs, who raise funds privately amongst their business contacts, and choose to invest them using a 'pay-it-forward' philosophy to focus on charitable projects that promise to perpetuate a chain reaction of positive growth opportunities for individuals and local communities for generations to come. 

It is a foundation that empowers citizens to help themselves and those around them. 

For additional information, please visit

Link to release


Election Rhetoric Causes Land Confusion Amongst Citizens in Mongolia

July 3 (Mongoliana) Yesterday, the Mongolia's Bogd mountainside was gathered with citizens from Khan-Uul district, Yarmag area and Chinggis Khaan Airport area as if it was Naadam. They were taking ownership of available land they could get in the area, without any legal permission. Their understanding was that if they built fences they could claim ownership; "Get your land that the Democratic Party promised, start building your fences."

The action started in the evening of July 1st and as a result there now appears to be no land left... From Yarmag to Morin Davaa, all the plots were taken. "Why can't the commoners get any land? National Parks like Nukht and Zaisan are taken by the wealthy people, we are citizens like them; we should get some land as well. We voted in the elections, therefore we are occupying our land" claimed one citizen.

Any matter regarding owning a land or using one should be determined according to the law. It seems that Mongolian People's Party's campaign ad agents used Democratic Party's action plan of settling land issues to feed citizens with false information. Residents in Yarmag and Chinggis Khaan Airport area showed their trust for Ts.Oyungerel and L.Bold from the Democratic Party and voted for them in the elections. Oyungerel and Bold promised to pay more attention to land issues if they were selected, but people used that promise to undertake illegal actions.

Currently, experts from the Capital and the District Commission of Land are meeting citizens to explain the situation. Owning land without permission is illegal, nevertheless some people don't take the warnings into consideration and are continuing to build fences.

The Democratic Party of Khan-Uul district made a statement regarding these illegal acts: "It is true that we discussed land issues in our action plan, but the election results haven't been confirmed yet. Parliament members haven't started exercising their authority; therefore nobody has rights to resolve the question without proper rules and laws. It is sad that people are using the Democratic Party's name to stir up confusion amongst citizens." 

Link to article


Forty percent of Ulaanbaatar's fresh water is used by power plants

July 3 (UB Post) The time of water shortages has already begun in Ulaanbaatar. The Tuul River started flowing very late this year. Below is an interview with Z.Batbayar, the Vice Director of the Water Authority on future problems.

-The news about the Tuul River is out. What was the reason?

-When we talk about water issues, the first thing that comes into peoples' minds are rivers and wells. The real problem is not lying there. Our city has been urbanized in only the last 50 years and before that Mongolia has never faced the issue of water shortage. Mongolians have used the fresh water of the Tuul River for hundreds of years without any problems until 1990. As the population of over 100 cities worldwide reached more than one million people, the issue of water usage started to be discussed everywhere. Mongolia has exactly the same problem. Yet, those foreign countries are determining their urban-planning and demography prospects based on the water supply of the area. It's been calculated that with the current rate, the population of Mongolia will reach 3.5 million by 2030. What's more, the number of people that live in ger districts won't decrease at all. According to an estimation determined in 1980 further confirmed by research of JAIKA in 1990, we are allowed to use a maximum of 220000m2 of water from the river basin of Tuul. However, over 160000m2of fresh water is being used by ger districts, apartments and offices in Ulaanbaatar through the Water and Canal Utilization Authority of Mongolia (WCUAM) now. In addition, while power plants use 40000m2 of fresh water, 25000m2 of water is being used from more than 2000 wells. This means that we have already overused the water amount determined by 1980 estimations.

-Will there be any water shortage problem when building massive apartments?

-Today Mongolians are planning to build apartments for 100,000 families. The plan itself might be of great significance, but firstly they must calculate if the water supply would be enough for them. If we estimate that one family consists of an average of four members, according to the research of National Statistical Office of Mongolia, over 400 thousand people will live in those apartments once they are built. And if they use 200 liters a day, it would be 800 thousand liters of water. This amount per day is the maximum possible amount of our whole city's water usage. As we calculated, Khui Doloon Khudag has a water reserve of 40,000m2, while 25,000m2of fresh water can be used from Gatsuurt according to the project of WCUAM. So only 60,000m2of fresh water is ready to be used. People think that Oyu Tolgoi will bring a lot of wealth. But it will use 50% of the local water reserve. But currently the water reserves of Ulaanbaatar have already been overused. Consequently, the Tuul River has been disappearing temporarily for seven years. This temporary disappearance used to occur from April 9-20 every year, but this year it lasted until April 30. The level of river water was very high when it started flowing again. With precipitation added, soil pollution was also increased.

-How bad is water pollution in Ulaanbaatar?

-Soil pollution got out of hand. Examining wells at ger districts, it has been shown that pollution has increased gradually day by day. Besides that, toilets of ger districts are polluting soil too much. There was an estimation which claimed there were over 200 thousand toilets, but after our research more than 280 thousand toilets were counted. If we divide them within the area which is occupied by residents, there's one toilet for every 100m. Those toilets pollute the soil and water within the area of 6-250m depending on the location.

The main purifier of soil is water. When it rains, the rain water gets mixed with the dirty soil then flows into Selbe or Tuul Rivers. Once, the River Uliastai was impossible to wade through with a horse. We used to swim in the Selbe. There was a river named Tolgoit too. But now, the Selbe River is barely flowing through our city. All of a sudden, people are concerned about the Tuul River as if they have come to their senses just now.

-Isn't it time to reveal and publicize the silent danger we are facing?

-This disaster started 20 years ago when the government built hospitals and schools in ger districts as a matter of welfare. Though it looks beneficial as if public services have been made closer to residents of ger districts, in the nutshell it caused a permanent dirty area. In other countries, the very first step to set up a village, town or city is to plan the water system. For example, in Inner Mongolia, officials firstly place sewers underground and build pavement upon them. Then they locate road lights. Just after that, the construction work of city begins. But our country constructions reverse those fixed procedures. Today people just construct buildings without much consistency in water system which causes huge upcoming conflicts. So, Ulaanbaatar developing properly will be almost impossible. If everything proceeds as is we won't be able to rescue the Tuul River from pollution. In Ulaanbaatar, which was originally built for a population of around 600,000 people, two times the expected number of people are living here currently. Due to tight density of population, only 75% of raw sewage is being purified and the rest is being dumped into the Tuul directly which pollutes it intensely. Therefore, the first thing we must do is focus on future city planning.

Two thirds of Ulaanbaatar's population lives in ger districts. Yet, they use only three per cents of city water. Big cities, such as Mexico City which has a population of 16 million people has already established a few satellite towns surrounding it. Though a discussion on erecting satellite towns for Ulaanbaatar city started in the 1970s, nothing has been done to implement it. If we construct more towns near Ulaanbaatar, people can be provided with water from underground fresh water within the located areas.

-We have talked about the water shortage problem in Ulaanbaatar quite a lot. But how do we resolve this issue?

-We have established protected areas of the Selbe and Tuul Rivers. Also we have submitted a proposal to allow construction of buildings only 200m away from the Selbe River. But local authorities are granting illegal permissions. For instance, a gigantic superstore 'Zunjin' which covers 1200m2 area was built on swamp, hardened with gravels, only 97m away from the Selbe River bank. That superstore is ruining the Selbe. Numerous floods occurred in our city before. What if it floods in that area! There are so many reckless people that are ruining their own future all because of greed. There's an old saying in Mongolian: 'Stretch your leg as far as the blanket allows.' Likewise, we must plan our city in accordance with the water reserve.

-One of the main problems which causes water shortages are auto wash stations and stores. How can we avoid this?

-The most dreadful problem in our city is inevitably a traffic congestion. As soon as a big department store opens, traffic congestion comes out all of the sudden. The reason is that the owners of store stands park their cars outside the stores. It further causes public stress and anger. Yet, there are a great number of big department stores in our city. Besides that, every household in ger districts are trying to have their own well in their yard as a matter of convenience. There can only be one well in each street. But trying to dig well in every yard is out of the question. It is causing a great loss in our water reserves. Something must be done.

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July 2 (InfoMongolia) The assembly of large Asian cities, the "Asian Network of Major Cities 21" was held at the Marina Bay Sands Hotel, Singapore, on June 30, 2012.

The opening speech of the assembly was made by the initiator and founder of this organization, Governor of Tokyo Shintaro Ishihara, where noted the need of cooperation towards the development and advancement of the Asian continent, most abundant in spare potential. He also criticized the United States, India and the People's Republic of China that these countries are doing nothing on the combat against global warming.

With this "Asian Network of Major Cities 21" assembly, the cities of Ulaanbaatar (Mongolia) and Tomsk (Russian Federation) were admitted as new members. The "Asian Network of Major Cities 21" was established with the initiative of the Tokyo Governor Shintaro Ishihara in 2000 with the purpose of uniting the capital and large cities of Asian countries and jointly resolving issues such as natural and environmental pollution and climate changes. Currently, 13 cities have been admitted to this organization, they are:

1. Bangkok, Thailand, 2. Delhi, India, 3. Hanoi, Viet Nam, 4. Jakarta, Indonesia, 5. Kuala Lumpur, Malaysia, 6. Manila, the Philippines, 7. Seoul, South Korea, 8. Singapore, 9. Taipei, Taiwan, 10. Tokyo, Japan, 11. Yangon, Myanmar, 12. Tomsk, Russian Federation, 13. Ulaanbaatar, Mongolia

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How Mongolia Will Be a Democracy With Super Power Status in the Near Future

July 3 (PolicyMic) While all the recent foreign policy talk is divided between the Middle East, economic crises around the world, and the rising status of China, there is one country that can potentially make a splash in the near future: Mongolia.

The main reason is because a small population with low density combines with a vast territory and undeveloped resource pools that can make the country a second Kazakhstan: rapid development of primary industries to fuel fast growth in economic output and personal wealth.

Landlocked between China and Russia, Mongolia has a population of approximately 2.7 million, and a territory of approximately 1.5 million square kilometres. Its capital city is Ulaanbataar, with a population of approximately 1.3 million people. What makes the country particularly interesting for me is that it uses the Cyrillic script, half the people are Buddhist and the other half follows local and more ancient belief systems or no beliefs at all. As a country that combines its own identity with a brew of influences from China and Russia may combine in a foreign policy style that is amenable to both countries, while a strong economy allows the pursuit of an own agenda to a certain extent.

A resource-driven foreign policy for Mongolia will not be unique from that of any of the other central Asian republics. However, with two giant markets on either side of it, policymakers will have a choice to either create an extraction or manufacturing economy, or a mix of both. A brief survey of investor appetite in the country's resources would substantiate this claim – it may potentially lead Mongolia to a position where it could have a non-aligned foreign policy, despite having the fate of being in a superpowers' neighbourhood.

The point above is that a strong economy can be a basis for a robust and flexible foreign policy; it would be a fresh voice on the international scene. Potentially, foreign direct investment from Mongolia would do much of the talking, as a resource-rich economy can lead to the creation of a sovereign fund, or a large currency reserve.

What roles can we see Mongolia take up? Perhaps its priorities will be relations with China and Russia, but involvement in Central Asian or Mideast conflicts via UN peacekeeping, conflict mediation or fresh ideas on bringing about peace will be questions where a Mongolian presence can potentially be felt. The other area would be the Far East.

Even if removed from the Pacific, Mongolia would be able to exert an influence via China or Russia – not in the least through the framework of the Shanghai Cooperation Organization (SCO), in which it currently has observer status. Joining would conflict with a non-aligned foreign policy, but membership may not necessarily be any less constructive towards amiable outcomes.

Currently, the SCO remains an organization, devoted to security cooperation in the counter-terrorism sphere, but there is no reason why its mandate cannot be widened to include a single East Asian policy on the Pacific, for example. In this way, Mongolia would receive a geopolitical boost – not unlike how SE European members of NATO have a say on what happens in Atlantic security, even if they have no direct geographic connection to the area.

In short, Mongolia's influence would come from having a small, but potentially very rich population – not too different from Canada or Russia, for example, but the test would come into the ability of the country's leaders to transform such a position into a flexible and constructive foreign policy that can make a good mark on the world. 

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Ulaanbaatar, Mongolia, July 3 /MONTSAME/ Officials from the Nuclear Energy Authority, the Institute of Physics and Technology at the Academy of Sciences and the Nuclear Research Center at the Mongolian State University (MSU) are taking part in an international seminar themed "Infrastructure Development of Nuclear Energy - 2012" kicked off on Monday in Seoul, the Republic of Korea.

Co-organized by the Seoul National University and the South Korean institutes of non-proliferation of nuclear-weapons and control, the international seminar has brought together over 100 delegates from Malaysia, Turkey, Vietnam, China, Japan, France, Saudi Arabia, Mongolia and related institutes of the South Korea. The Mongolians aim to study experience and share opinions with other countries' officials.

The international seminar started under a topic "The energy structure in 21st century", and it is continuing with issues on a plan of the national economy of the Republic of Korea, the history of energy development and planning, and on project experience of establishment of the very first atomic power station. Addressing the seminar, a former member of parliament Park Hwan-yun noted that the development of nuclear energy consists of vital issues including infrastructure, human development and technology, and underlined an importance of the international collaboration in the matters.

Within the five-day seminar, the participants will get acquainted with activities of the Dasan car factory in Pusan and the Kori nuclear power station.

Link to Montsame


President Elbegdorj Appoints New Judges

July 2 ( By his 107th decree President Elbegdorj has appointed Dashdondov Banzragch, the Judge of the Court of Arkhangai province; Enkhtuya Zundui, the Judge of the Administrative Court of Darkhan-Uul province; Mandakhbayar Myagmarsuren, the Judge of an inter-soum first Court of Uvurkhangai province; Davaasuren Choindon, the Judge of an inter-soum Court of Khuvsgul province respectively and the General Judge of an inter-soum of Bulgan province Tserendulam Sodov, the Judge of an inter-soum first Court of Selenge province Enkhtaivan Lkhagva have been re-elected as their current position. President allowed to convict Otgonchimeg Ayush the Judge of an inter-soum Court of Arkhangai province of a criminal charge and to suspend her power until the Court decision. 

Also B.Dashdondov has been discharged from a post of a Judge and General Judge of inter-soum Court of Arkhangai province, and Z.Enkhtuya from a position of a Judge of Administrative Court of Gobisumber province, both being appointed to another job and B.Lkhamkhuu has been freed from a Judge and General Judge positions in inter-soum Court of Uvs province due to retirement. 

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Mongolia: Second Biggest Importer Of Korean Beer

July 2 (Arirang News) Korean beers are going down a storm overseas, especially in other Asian countries where interest in K-pop and the Korean Wave remains rampant.

New figures show beer exports have risen by a total of 56.3 percent in the past three years. According to the Korea Customs Service, beer exporters raked in US$65.4 million last year, compared with $41.8 million in 2009. Last year, 173.6 million bottles of beer were shipped overseas.

By country, the biggest importer of Korean beers was Hong Kong, accounting for 38.5 percent, followed by Mongolia and Japan at 12.6 percent and 12.2 percent, respectively.

Link to article


Study Tour: Corporate Social Responsibility of German Companies

July 3 (Mongolian Economy) This June (2012), the "Corporate Social Responsibility (CSR) of German companies" study tour, was put together by Gesellschaft fьr Internationale Zusammenarbeit's (GIZ) Integrated Mineral Resource Initiative. A dozen representatives of different mining companies attended, representatives of the Mongolian Economy magazine also attended to document proceedings. 

The CSR study tour is an initiative of the German Parliament (Bundestag), and the Federal Ministry of Labour and Social Affairs. The national German Action Plan, "CSR in Germany" describes how government policy can foster development of corporate social responsibility and is implemented by the Ministry of Labour and Social Affairs. The strategic aims of the Action Plan for CSR include promoting enterprises who champion the practice of CSR, and imbedding CSR practices in small and medium sized enterprises, public institutions and businesses. Member of Parliament, Ute Kumpf (SPD), noted in her presentation that all the standards set for private companies should also be followed by the public sector.

Standards for CSR include:

• The fair treatment of employees
• Efficient use of natural resources
• Responsible supply chain management
• Respect human rights, and follow the ILO labor standards
• Transparency

The study tour enabled all participants to familiarize themselves with CSR implementation practices and to visit best practice companies. The tour visited energy producer RWE, companies such as Thyssen Krupp, Daimler, Siemens, IBM, and several other organizations including Chamber of Industry and Commerce of the Stuttgart and Karlsruhe regions, Technology Institute Karlsruhe, Deutsche Bank, Hertie School of Governance, and the Center for Corporate Citizenship Germany.

The German CSR model supports interaction between stakeholders including business, the public sector, unions, professional associations, non-governmental institutions and civil society. 

Full coverage of the CSR study tour will be published in the Mongolian Economy's second July issue.

Link to article


China publishing group holds cultural festival in Mongolia to promote Esperanto

ULAN BATOR, July 2 (Xinhua) -- A cultural and art festival entitled " The Hopeful Grassland" was launched here by a Chinese publishing group on Monday, marking the debut of a series of activities dedicated to popularizing Esperanto.

Lu Cairong, deputy director of China International Publishing Group (CIPG) said at the opening ceremony that friendly exchanges between Esperanto circles of the two countries have helped boost bilateral people-to-people exchanges, and served as a unique way to promote bilateral ties.

Lu also said by using different kinds of media form including books, magazines and the Internet, the CIPG has been actively engaging in various international cultural exchange activities aimed at promoting communications and mutual understanding among different countries and peoples and further presenting China to the world.

The festival included many activities to publicize China and Chinese culture to the Mongolian people. A photo exhibition reflecting China's Erdos city was presented to visitors, aiming to acquaint them with the inclusive development model of the city.

In addition, people from the Esperanto circles of the two countries will gather at a forum to discuss the latest development of the Esperanto movement and explore ways to promote Esperanto in Asia.

This year is designated as the Asia Year of Esperanto by international Esperanto circles. By cooperating with the All-China Esperanto League, the CIPG will hold a series of cultural exchange activities in different countries including Mongolia, Vietnam and South Korea to promote Esperanto.

Link to article



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