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.
Mogi: Wow, a massive increase from 6Mt in 2011 to 30Mt by 2017 for Eruu Gol. I say it's awesome news to the Selenge iron ore region, e.g. Haranga Resources's (ASX:HAR) projects up there right next to Eruu Gol. Shows major importance China is putting on Mongolian iron ore imports.
CPS Securities maintains a Speculative BUY recommendation on HAR and "given the current market weakness" see these developments as "an opportunity to add to current positions."
Winsway: STRATEGIC ALLIANCE AGREEMENT WITH THE LUNG MING GROUP (Boldtumur Eruu Gol)
The Board announces that on 20 August 2012, the Company entered into a long-term Strategic Alliance Agreement with the Lung Ming Group for the marketing of Mongolian iron ore products in the PRC.
By entering into the Strategic Alliance Agreement, it is expected that the Group will be able to develop the capability of providing logistics services for iron ore products by utilizing its logistics capacity following the completion of the railway logistics parks at Erlianhaote and Jining, and to diversify its product offering and mitigate the risks from single product.
August 22, Winsway Coking Coal Holdings Limited (HK:1733) --
This announcement is made by Winsway Coking Coal Holdings Limited (the "Company", together with its subsidiaries, the "Group") on a voluntary basis.
Strategic Alliance Agreement with the Lung Ming Group
The board of directors (the "Board") of the Company is pleased to announce that on 20 August 2012, the Company entered into a strategic alliance agreement ("Strategic Alliance Agreement") with Lung Ming Mining Co., Ltd. ("Lung Ming") and Evermate Trading Limited (a subsidiary of Lung Ming, and together with Lung Ming, the "Lung Ming Group") which sets out the terms upon which the Group and the Lung Ming Group will cooperate in the marketing of Mongolian iron ore products in the People's Republic of China (the "PRC") and the role of the Group as the exclusive buyer of iron ore products produced by the Lung Ming Group, unless otherwise mutually agreed.
During the term of the agreement, the Lung Ming Group will be responsible for the production and supply of Mongolian iron ore products and delivery of such products to Erlianhaote port, while the Group shall have an exclusive right (subject to an exception) to purchase such products at Erlianhaote port. The Group will arrange customs clearance, warehousing, logistics and sale of such products in the PRC by utilizing the Group's logistics capacity and marketing abilities in the PRC.
The Lung Ming Group is one of the largest producers of iron ore in Mongolia, operating two mines that produce iron ore for the steel and iron ore industry from its mining license covering approximately 14 square kilometers in Eruu soum, Selenge province, Mongolia.
Under the Strategic Alliance Agreement, the Lung Ming Group or its designated companies will supply iron ore products to the Group or its designated companies from Mongolia with the actual quantity to be mutually determined on a monthly basis. The target volume of supply is estimated to be 2 million tonnes for August to December 2012, with increment from time to time thereafter to 30 million tonnes per year in 2017 and onwards.
The purchase price shall be mutually agreed once every month in accordance with the terms of the Strategic Alliance Agreement.
By entering into the Strategic Alliance Agreement, it is expected that the Group will beneﬁt in the following ways:
(1) the Group will be able to develop the capability of providing logistics services for iron ore products;
(2) it will be able to utilize its logistics capacity following the completion of the railway logistics parks at Erlianhaote and Jining; and
(3) it will be able to diversify its product offering and mitigate the risks from single product.
The Strategic Alliance Agreement will regulate supplies of Mongolian iron ore products from the Lung Ming Group to the Group for a period of twenty-ﬁve years starting from 2012 and may be renewed by the parties upon agreement three months prior to its expiry.
Aspire Mining's drilling unearths more coal beyond Ovoot Coking Coal Resource
August 22 (Proactive Investors) Aspire Mining (ASX: AKM) has already defined the second largest coking coal Reserve in Mongolia, intersecting coal during drilling outside the existing Resource at its Ovoot Coking Coal Project in Mongolia could increase the size.
This occurred during its exploration drilling program to test for extensions to the mineralisation.
These new extensions have the potential to extend the open pit further to the north.
Importantly, there is still plenty of room for Ovoot to grow into a Tier 1 Resource, with only around 20% of the Ovoot Basin explored by Aspire.
Although possessing a large coal reserve provides a high level of confidence.
Aspire has identified an extension of coal 800 metres to the northeast that could potentially add to existing open cut Coal Reserves.
The further exploration success now potentially brings the Ovoot Project open pit coal Resources and Reserves within around 1 kilometre of the underground Resources to the northeast.
The best result so far has been seen in a hole that intersected 12.5 metres of coal from 195 metres.
The initial two geotechnical holes have intersected coal outside the existing coal Resource envelope, with the best result 11.5 metres of coal from 241 metres.
David Paull, managing director, commented: "The existing 178 million tonne coking coal Reserve base is significant and already the second largest coking coal Reserve in Mongolia.
"There is the potential with these resource extensions and geotechnical studies to see a further increase to our coal Reserves."
Aspire is also currently drilling a number of geotechnical holes designed to provide data for rock strength below 300 metres.
This will allow for pit wall designs below 300 metres which potentially could lead to increased coal Reserves.
Aspire is now moving exploration to the Hurimt prospect, located in the central Ovoot Basin around 20 kilometres to the east of the Ovoot Project.
The company has received final approvals for accessing drill sites for an initial first pass 2,000 metre exploration program at the prospect, and will test the interpreted depositional environment, which is similar to Ovoot.
A short initial reconnaissance drilling program was conducted at Hurimt in 2010 and showed Jurassic sediments were present, however no hole was completed to basement.
Aspire is targeting near surface coking coal amenable to open pit mining that will complement the world class Ovoot Project.
It is expected that this exploration program will be completed by the end of October 2012.
Aspire has previously completed a Pre-Feasibility Study that has delivered positive parameters, including an internal rate of return of 43%.
The PFS confirms that Ovoot is financially robust and technically and commercially feasible.
What drives the positive economics, in fact the keys to the project, are the LOM 82% average conversion rate of ROM tonnes to product together with a low LOM strip ratio of 7.6 bcm of waste per ROM tonne of coal including pre-strip.
The PFS assumes completion of the multi-user rail line extending the Trans-Mongolian railway at Erdenet through to Moron by 2016. A separate Rail Pre-Feasibility Study for this line has been approved by the Mongolian Rail Authority.
The first stage project would involve production of 6 million tonnes per annum of saleable coal delivered by 191 kilometres over sealed road to the new railhead at Moron before being transported to end markets from 2016.
The staged development will de-risk the production ramp up and enable the first stage operational cashflows to underpin a future Rail Spur Line connection from Ovoot to link up with the multi-user rail line at Moron.
The Rail Spur Line from Ovoot to Moron will facilitate the targeted full scale 12 million tonnes per annum coking coal operation.
Significantly, Aspire is extremely well funded to advance its exploration effort at Ovoot with nearly A$20 million cash at the end of the June quarter.
Aspire's Ovoot Project has the fourth largest coal Reserve on Proactive Investors' ASX listed coal explorers and developers peer list. The Ovoot Project is the second largest coking coal Reserve in Mongolia after the very large government owned Tavan Tolgoi deposit.
Simply, Ovoot is an exceptional deposit that contains high grade coking coal with a 96-97% vitrinite content that identifies it as one of the highest value in-situ coal deposits in the country, and in the world. With drilling and evaluation of Ovoot only 20% complete, Aspire is in the early stages of developing one of the world's largest undeveloped coal resources.
Aspire is fully funded for exploration and development work through to completion of the Feasibility Study that is due at the end of the year.
Aspire also has the support of Noble Group Ltd, which is one of the world's largest commodity trading and logistics companies that moves coal into most major global markets, and has strategic alliances and relationships across Russia and China.
There are significant valuation changing catalysts ahead in the next 6-12 months for Aspire. With the re-tracement of coal sector prices, Aspire has not been immune in this regard. However, at the current valuation of $80.6 million Aspire is rated at the same valuation it was in September 2010 - when Ovoot was a 330 million tonne resource and with no defined reserve.
Significant value has clearly been created by Aspire during that time, the mis-pricing of valuation of Aspire is acute, providing a significant opportunity for investors.
Manas Petroleum Corp. Operational and Financial Highlights 2nd Quarter 2012
BAAR, Switzerland, Aug. 21, 2012 /PRNewswire/ -- Manas Petroleum Corp. ("Manas") (TSX-V: MNP; OTCBB: MNAP) has filed its quarterly report on Form 10-Q for the six months ended June 30, 2012 on EDGAR and on SEDAR. (www.sedar.com or www.sec.gov). The following provides you with a review of some of the highlights:
Highlights Q2 2012
· PSA ratified by Tajik government
· Mongolia: Prospects ranked and drilling scheduled for second half of August
· Entered option agreement to purchase producing assets in Central Asia
During the second quarter of 2012, our Mongolian subsidiary, Gobi Energy Partners LLC, concluded a passive seismic campaign. The integration and interpretation of the 2D seismic data acquired in 2011 was finalized, which, along with the results of the passive seismic, allowed us to complete the ranking of the prospects. Three prospects were selected as potential drilling locations for 2012; we plan to drill two of these in 2012. We plan to spud the first well, Ger Chuluu A1, during the week starting August 20, 2012, after completion of the 2D seismic campaign. We expect this well to be approximately 1,200 meters deep.
Financial Status as of June 30, 2012
Total operating expense increased in all segments. Increased exploration activity, especially in Mongolia, resulted in higher exploration and personnel costs. Consulting expenses increased due to increased exploration activity at our projects in Mongolia and Tajikistan, increased investor relations activities, and also due to negative expenses related to the re-measurement of equity-based awards to non-employees in 2011 (non-cash).
North-Central China Offers Massive Market Opportunity for Mongolian Coal Miners
By Gabe Collins and Andrew Erickson
Mongolia's massive and low-cost coal reserves are well-positioned to serve seven nearby Chinese provinces with more than one billion tonnes of annual coal demand
August 21 (China SignPost) On 7 June 2012, Mongolian Mining Corporation (MMC) broke ground on a rail line that will link its Ukhaa Khudag (UHG) coking coal mine to the Chinese border crossing at Gashuun Sukhait (GS) and help move coal far more cheaply than the 400 trucks currently doing the job. MMC recognizes that China, which took 99% of Mongolia's coking coal exports in 2011, is Mongolia's best option for multi-million tonne per year thermal and coking coal exports. Low coal production costs can make Mongolian coal highly competitive in seven nearby Chinese provinces that consumed more than a billion tonnes of coal in 2010, according to official data.
The per capita steel demand levels in the populous and fast-growing provinces of Central and Western China are still only 40% of the levels seen on China's East Coast (Exhibit 1). As the Chinese economy recovers, these regions—which are the most accessible to Mongolia's landlocked coal producers—will provide growth markets able to absorb rising Mongolian coal exports.
Exhibit 1: Chinese steel intensity by province versus GDP per capita
Finished steel consumption per capita, kg (2010)
Source: DRC Report, NBS, BHP Billiton
Note: select provinces and regions show population (e.g., "Shanghai 19m" = 19 million population)
Mongolian coal projects should expect to operate on Chinese regional coal prices, which will likely rise closer to global seaborne prices as the Chinese government consolidates the mining sector and caps domestic coal production by 2015 and China's proportion of seaborne thermal coal supply rises. Investors should also look beyond rail routes through Russia and consider alternative ways of monetizing coal reserves such as mine mouth power plants that use ultrahigh voltage power lines to move electricity to markets in China and Russia as well as coal-to-liquids (CTL) and coal-to-chemicals (CTC) plants. These approaches can capitalize on growing coal demand in Western and Central China and can improve Mongolian coal miners' pricing power by putting Chinese coal traders on notice that the coal they want could alternatively be sold as electrons, motor fuel, or petrochemicals.
Exporting coal through Russia is cost prohibitive and rising Russian exports to Asia already strain Russia's rails and Pacific ports. A 90 million tonnes per year (tpy) decline in European and Russian coal demand since 2000 has re-oriented coal producers toward the Asian market. Russian miners increased coal exports to coal-hungry China from only 42 thousand tonnes in 2001 to 10.5 million tonnes in 2011 and are aiming for 15 million tpy by 2015.
With European coal demand in a death spiral, politically-savvy Russian coal exporters like SUEK and Mechel will fight hard, and most likely successfully, to keep Mongolian coal off Russian rail lines and out of their Pacific Coast terminals. Russian Railways plans to substantially increase east-bound coal hauling capacity by 2020. However, with seven major coal projects in Siberia and the Russian Far East aiming to bring as much as 80 million tpy of productive capacity online by 2020 and export terminal capacity likely to grow by less than 30 million tpy, severe capacity constraints will remain and Mongolian coal will be left out in the Siberian cold.
So where does the lack of a high-volume Russian rail route leave companies planning to develop coal projects in Mongolia? One strategy is to accept Chinese regional prices, become low-cost suppliers in North-Central China, and go for volume. Mongolian surface miners in the Southern Gobi with a rail line can deliver coal 500 km into China at cost of insurance and freight (CIF) of less than US$60 per metric tonne (mt), less than the CIF of local Chinese underground miners, which can exceed US$70/mt to the same destinations. Mongolian mines will face competition from new low-cost thermal coal supplies from Xinjiang, but the two sources have similar mining costs and Mongolian miners will have shorter shipping distances to the North-Central Chinese market.
Mongolia's coal export focus on China will have major risk implications in both coal and natural gas markets, as well as oil markets if investors also build China-facing CTL and CTC projects. Mongolia's low cost and geographically captive thermal and metallurgical coal supplies will likely help undermine Beijing's plans to reduce China's dependency on coal and, in conjunction with new coalfields in Western China's Xinjiang Province, could even jeopardize PetroChina and Sinopec's ambitions to develop shale gas and other unconventional resources.
The Chinese seek secure, well-priced mineral supplies from their neighbor, not a re-enactment of the Qing Dynasty period of political domination. Russian transport infrastructure constraints, Russian companies' antipathy toward competition from Mongolian coal, and the tyranny of distance will naturally direct mineral flows to China. To realize great economic opportunities in an otherwise somewhat sputtering China market in 2012, Mongolia must establish political and regulatory stability and recognize that China needs—and can absorb—large volumes of Mongolian coal exports. Meanwhile, to facilitate this development and profit in the process, investors in Mongolian coal should build rails south, run mines at full bore, and also consider opportunities in the coal-by-wire, coal-to-liquids, and coal-to-chemicals sectors.
COAL ACCOUNTED FOR 44.6% OF TOTAL EXPORTS AS OF AUGUST 15
August 21 (InfoMongolia) The National Statistical Office of Mongolia made a statement on foreign trade turnover as of August 15, 2012. According to the statement, as of August 15, the total external trade turnover reached at 7,007.5 million USD, whereas exports made up 2,705.9 million USD and imports made up 4,301.5 million USD respectively.
As of August 15, 2012, external trade turnover showed an increase of 603.5 million USD or 9.4%, compared to same period of the previous year, of which exports made up 116.1 million USD or 4.5% and imports - 487.3 million USD or 12.8%.
Within the term, foreign trade balance showed a deficit of 1,595.6 million USD reflecting 371.2 million USD or 30.3% increase compared to same period of the previous year.
The total export value amount accounted for coal 44.6%, copper concentrate 19.2%, iron ore 12.1%, crude oil 7.0%, zinc ore with concentrate 2.4%, fluoride ore with concentrate 2.2%, in unwrought or semimanufactured forms of gold 1.9%, molybdenum concentrate 0.9%, and the rest 9.7% of export comprises of other mineral products.
BoM issues ₮56.6 billion 1-week 13.25% p.a. bills
August 22 (Bank of Mongolia) BoM issues 1 week bills worth MNT 56.600 billion at a weighted interest rate of 13.25 percent per annum /For previous auctions click here/
FIRST SESSION OF PARLIAMENT OF MONGOLIA IS CLOSED
August 22 (InfoMongolia) On August 21, the First Session of the State Great Khural (Parliament) started its meeting at 04:40 pm with 53.5% of attendance or 38 out of 71 members. Within the meeting, the members of the Sub-Committees were approved after which the Speaker of the Parliament Zandaakhuu ENKHBOLD announced the closing of the First Session of the State Great Khural.
The First Session continued for 30 days since the Elections and at his speech at closing Speaker Z.Enkhbold said, "Following the 2012 Parliament Elections, a total of 71 out of 76 members of the Parliament have received seats and been validated, whereas 31 seats were received by Democratic Party, 25 by Mongolian People's Party, 2 by Civil Will-Green Party, 10 by "Justice" Coalition (MPRP-MNDP) and 3 Independent candidates also became the members of the Parliament and now the Parliament is implementing its full powers".
"Within the First Session, Parliament elected its Speaker, Deputy Speakers and formed the affiliated Standing Committees and Sub-Committees by nominating its Chairmen. Moreover, new Standing Committee on Petitionary issues was formed making a total 8 Committees, hence making the Parliament open and fair for civilians" emphasized the Speaker.
"Also, with the First Session, the Prime Minister was appointed, where the Cabinet of Ministers was established and the new Government has been working with its full composition. However the First Session is closed, the irregular plenary meetings will be held and the schedules are to be announced in advance. Within the irregular plenary meetings, the amendments on the Law on Local Elections and 2012 State Budget will be discussed accordingly, added the Speaker."
In the scope of the First Session meeting, the following Sub-Committees were formed accordingly.
The Sub-Committees of the State Great Khural (Parliament):
1. Special Inspection's Sub-Committee
2. Sub-Committee on Millennium Development Goals and Poverty Alleviation
3. Ethic's Sub-Committee
4. Sub-Committee on Parliament Member's Immunity
5. Local Administration's Sub-Committee
6. Sub-Committee on Budget Expenditure
7. Sub-Committee on Human Rights
8. Sub-Committee on Small and Medium Industry Development
9. Sub-Committee on Matters of Reducing the Air Pollution
10. Sub-Committee on Election Control
The Structure of the State Great Khural (Parliament):
1. Speaker of the Parliament - Zandaakhuu ENKHBOLD
2. Deputy Speaker of the Parliament - Sangajav BAYARTSOGT
3. Deputy Speaker of the Parliament - Log TSOG
4. Chairman of Security and Foreign Policy Standing Committee - Tserendash TSOLMON
5. Chairman of Environment, Food and Agricultural Standing Committee - Garidkhuu BAYARSAIKHAN
6. Chairwoman of Social Policy, Education, Culture and Science's Standing Committee - Zangad BAYANSELENGE
7. Chairwoman of Petitionary's Standing Committee - Radnaa BURMAA
8. Chairman of State Budget Standing Committee - Tserenpil DAVAASUREN
9. Chairman of State Structure's Standing Committee - Agipar BAKEI
10. Chairman of Legal Standing Committee - Sharavdorj TUVDENDORJ
11. Chairman of Economic Standing Committee - Batkhuu GARAMGAIBAATAR
Mogi: Again, personally I wouldn't describe Gankhuyag as a resource nationalist. Yes, he's tough on foreign investment, but I believe he's also a realist
Mongolia's new mining minister is long-time resource nationalism advocate
A lawmaker--who pushed to renegotiate the 2009 Oyu Tolgoi agreement to increase the government's ownership stake to 50% in the copper-gold mega-project --is Mongolia's new mining minister.
RENO, August 21 (MINEWEB) --
As Mongolia's new coalition government was completed with the appointment of 16 ministries and 19 members comprising the Cabinet of the Parliament Monday, foreign mining interests face an uncertain future as a growing resource nationalism movement is increasingly in the political driver's seat.
As the New York Times noted in a recent article, "...a debate is raging over mining impact, pitting those who praise the industry for sweeping away decades of decay against other who see materialism and corruption polluting Mongolia's traditional way of life."
"Discontent over corruption and the government concessions to foreign mining firms were the major campaign issues in June's parliamentary elections. Those now in power face high expectations to spend the mining windfall on health care, infrastructure and economic development," said the NYT.
More than 25% of Mongolia's 76 seats in parliament are now held by politicians who made foreign mine ownership a major campaign issue. While the Democratic Party won 31 seats, becoming the largest party in parliament, the DP had to form a coalition with the Civil Will-Green Party and the Justice Coalition, which is formed by the Mongolian People's Revolutionary Party and the Mongolian National Democratic Party.
The Democratic Party favors free markets but has nine members who support resource nationalism. Nevertheless, it is believed the DP's rise to power will calm investors, who had worried about the actions of Mongolia's former president. But, the coalition government has named a resource nationalist as Mongolia's new minister for mining.
Democratic Party Chairman Norov Altanhuyag is Mongolia's new prime minister. However, the newly appointed Minister for Mining is resource nationalist Davaajav Gankhuyag, who as a member of Parliament, previously demanded that the state have a larger ownership stake in Mongolia's largest mining operations.
Recently sentenced to four years in prison for corruption, former President Nambar Enkhbayar, head of the Mongolian People's Revolutionary Party, "had been a key figure in the environment of increasing hostility, at least outwardly, toward foreign mining corporations," said Reuters. However, his conviction for corruption is considered a landmark event for stronger anti-corruption enforcement.
Resource nationalist politicians want to keep 100% of Tavan Tolgoi, the world's largest undeveloped coal deposit, under Mongolian control.
Many Mongolians are still unhappy that, thanks to a 2009 deal, Ivanhoe Mines received a 66% share of the $6.2 million Oyu Tolgoi mine (Mogi: typo here looks like), home to the world's largest untapped development of copper and gold, which is expected to go into production in the first half of next year. The government owns 34% of the project, which some nationalist lawmakers hope to increase to more than 50%.
Mongolians also fear the encroachment of the Chinese companies which are hungrily eying the coal riches of Tavan Tolgoi, located near Mongolia's border with China. It is anticipated the China's state-owned Chalco will fail in its takeover bid for Mongolian coal miner South Gobi Resources due to strong resistance from the Mongolian government.
When Chalco offered $926 million earlier this year for a 60% stake in SouthGobi, the Mongolian government in May adopted a new investment law that limits foreign companies from owning more than 49% of companies involved in mining, finance, media and telecommunications. (Mogi: big error here, it does NOT restrict ownership, but adds a government/parliament approval process)
The Mongolian government has even delayed renewing some of SouthGobi's mining permits although the majority shareholder Turquoise Hill Resources supports the deal. Chief Executive Alex Molyneux told Reuters that the Mongolian government has done everything in its power to block the deal.
However, it should be noted that Mongolia depends on China and Russia for fuel, power and transportation. (Mogi: (eyes rolling), depends on Russia for fuel, yes, depends on China for exports yes) Mongolia depends on Russian railways to deliver coal to Japan and South Korea. (Mogi: "depends" is not the right term here as we are yet to really export through Russia, not sure if the Russians will ever let us even export through them)
Meanwhile, another mining-related issue facing the new Mongolian government is fears of camel and goat herders that the mega-mines are gobbling up water, particularly in the South Gobi Province, where drought can wipe out herds.
Herders have claimed mining trucks kill their animals and kick up dust that ruins pastureland. Oyu Tolgoi has offered compensation to the herders, which includes helping a family put a child through college.
Oyu Tolgoi has monitored more than 100 herder wells and maintains there is no connection between the wells and the aquifer the mine will draw from.
ULAANBAATAR TO ENFORCE BAN ON NEW CONSTRUCTION PROJECTS UNTIL NEW CITY PLAN
August 21 (InfoMongolia) On August 20, the Board members of the Capital City Citizens' Representative's Khural (City Council) held its meeting discussing the working group's procedures on allocating the new lands to civilians (each citizen of Mongolia has a right to obtain a free 0.07 ha) and current ongoing construction up-buildings in Ulaanbaatar city.
Following the decision by the Chairman of the City Council D.Battulga, which was released on July 24, 2012, the City Council issued a decree No.08 on August 01 not to start or expand any construction works temporarily except for works funded by State and Capital city.
According to the statement by the chief of the working group S.Ochirbat who submitted a new planning, in 1,300 ha of the territory of the Capital city is prohibited to start any up-buildings until the General Plan of Ulaanbaatar city to be approved. In other words in the following territories any up-buildings are prohibited to start or expand; along the urbanized horizontal axis of the Capital city or between the First micro district and Tsaiz auto market, and along the urbanized vertical axis or the territory between the XIX micro district and the 32nd roundabout. Moreover, in the draft it states to invalid some privatized land licenses.
However, this matter was left to be re-discussed at the Board meeting again.
Introducing U.S. Ambassador to Mongolia Piper Campbell
August 20 (U.S. State Department) This video was produced by the U.S. Department of State's Bureau of International Information Programs in August 2012. The featured speaker is the new U.S. ambassador to Mongolia, Piper Campbell.
China Should Take It Easy About Mongolia's Military Exercises With the US
August 22 (CRI) Japanese forces and US Marines are now in the western Pacific Ocean for a month-long military drill designed to deal with the scenario of taking back islands.
Meantime, nearly 90-thousand troops from South Korea and the United States are conducting their annual "Ulchi-Freedom Guardian" exercise.
As CRI's Su Yi reports, international relations experts suggest that it is not necessary for major regional powers, including China and Russia, to be too sensitive over those military exercises, as most countries are reluctant to jeopardize the peace and economic interests in the region.
The Asia-Pacific region is witnessing some 70 joint military exercises this year. Half of them are led by the United States.
Zhang Junshe, vice director of the Military Academic Research Institute of the PLA Navy, says although the US side denies this, many of those military drills are targeting China.
"The increase of both scale and frequency of the joint military drills the United States has conducted in the region so far this year is related to its strategy in Asia. They are aimed at increasing the US military presence in the region and boosting traditional alliances."
International relations expert Jin Canrong, a professor at China's Renmin University, says the ongoing drills between Japan and the US have some significance in many ways.
"It demonstrates the Japanese military's capability of remote delivery, which is quite significant. Besides, their training subjects include island defense, which largely has something to do with the disputes with China over the Diaoyu Islands."
Some analysts even argue the recent military exercises could signal that Japan is gradually shifting the defensive nature of its military strategy.
However, some experts like Yin Zhuo, director of the Expert Consultation Committee of the PLA Navy, say there is no reason for major regional players to be too worried, as Northeast Asia is seeing west-led military exercises one after another.
Yin explains this by pointing out the example of a recent annual military drill between Mongolia and the United States.
"China should take it easy, as the country is used to a bilateral relationship in which Mongolia always respects its borders with China but again always wants to find a balance among major powers."
Yin suggests, in fact, while being closer with the US and NATO is one choice, it is also a fundamental strategy for Mongolia to keep its good relationship with its neighbor to the north, Russia and to the south, China.
Analysts say some other Northeast Asian countries have the same concern, which makes them very unlikely to form a political or military alliance against China.
Jin Canrong from Renmin University again, "For those countries, a NATO-like alliance in Asia targeting China will destroy the peace and development in the region. Besides, economically speaking, they will loss heavily without a doubt."
China is a major trade partner with the United States and most Northeast Asian countries.
Analysts say peace and economic interests, or confrontation – it is not a difficult choice.
For CRI, I'm Su Yi.
Multinational partners train in 'Khaan Quest' – U.S. Army, August 20
U.S. service members share Medical First Responder course with Mongolian counterparts – U.S. Army, August 20
Wind power: why here and why now?
August 22 (UB Post) Mongolia owns a lot to coal. It is the country's main export; it was responsible for the mining boom that has caused the recent growth of the economy. Currently, over 80% of Mongolia's electricity is produced by five coal power plants built n the 1970s and 80s.
But plans have just been put into action to try and change this. Over the next month, in Salkhit 45 miles outside the capital, Mongolia's first wind farm will be built. It will consist of 31 wind turbines and is hoped to supply the power needs of around 5% of the population. According to experts' estimates, the country's wind energy generation capacity could reach 2.55 trillion KWH annually.
Where viable, wind farms are undoubtedly an important step towards sustainability anywhere. But why here, and why now?
Mongolia's decisions regarding energy cannot be treated apart from the issue of urbanization. In the last twenty years, the country has urbanized hugely: over 700,000 people have moved to the capital, and the Asian development bank calculates that well over 60% of population live in cities. In 1990, the percentages of the population living in the Western Region and the Khangai Region were similar to those living in Ulaanbaatar, at 20%, 27% and 26%, respectively. By 2000 the capital was home to around 30% of the population, and by 2010 around 40% of the population lived in Ulaanbaatar.
The continual movement of people into Ulaanbaatar has led to highly damaged roads leading into the city. Yet more serious problems have been caused, or may come to fruition, because of rural-urban migration. By its nature, urbanization brings with it increased pollution: as Ulaanbaatar grows, so do the city's energy requirements. But air pollution only exacerbates climate change, which worsens conditions in the countryside, thus inciting even more herders to sacrifice their traditional livelihoods and move to the city.
So a vicious circle is created. The more people move to the cities, the greater the energy demands, which in turn leads to increased air pollution and thus more people migrating to the capital to escape adverse rural conditions.
We need, then, to find a way of lessening the harsh divide between cities and countryside, of making Mongolia into a world where the two can coexist more peacefully. Several tourists have remarked at the sudden surprise of seeing Ulaanbaatar after days driving through the countryside: the city seems to appear out of nowhere. The smoke that covers the capital seems strangely at odds with the idyllic landscape that precedes it.
Mongolia has the potential to make wind power a major contributor to its population's energy needs. As the Global Post has pointed out, it has all the right conditions: high plateaus with constant winds; vast, sparsely inhabited plains that could be developed without too much disruption to traditional herder's lives; and strong sunlight even in the bleak winter months.
Here and now, then, wind power seems like a viable and beneficial option – not to completely replace the coal which currently supplies Mongolia's energy needs and supports its economy, but to supplement it. At a time of massive urbanization, when levels of pollution in the capital have never been higher, we need to seek out new options that will supply the greater power needs of a growing populace without leading to the health issues and rural hardships that are the consequence of increased pollution.
With urbanization both increasing the demand for energy and leading to a more polluted capital city, we need to start looking elsewhere. Wind power will both make use of Mongolia's natural resources and help lessen the pollution in Mongolia's urban centres, thus supporting the surrounding ecosystems and helping to unite rural and urban Mongolia. The new wind farm comes at a time when urbanization is threatening the quality of life in both country and cities. It is a big step forward for Mongolia.
Mogi: the report is €806. Hmmm, guess it's worth it for the lazy ones
Research and Markets: Mongolia Mining Report Q3 2012
DUBLIN--(BUSINESS WIRE)--Research and Markets has announced the addition of the "Mongolia Mining Report Q3 2012" report to their offering.
Growth in Mongolia's mining industry will be led by a rampant increase in coal, copper and gold production. The bulk of this growth will occur in 2013 as the Oyu Tolgoi copper-gold mine begins commercial production. There is an upside risk to our forecast as development of the massive Tavan Tolgoi mine could start sooner than expected.
Rapid Growth Across All Commodities. We expect the downward trend in Mongolia's mining sector to come to an abrupt halt, as the sector undergoes phenomenal growth. The impressive growth rates in copper and gold production will be driven by the Oyu Tolgoi mine, a joint venture (JV) between Ivanhoe Mines (66% ownership) and the Mongolian government (34% ownership). We expect copper production to reach 559kt ('000 tonnes) by 2016, an annual average growth rate of 27.9% from 2010 levels. Decreasing ore grades at the country's largest mines have led to a slow decline in Mongolia's copper production. As for gold, we expect production to reach 892koz ('000 ounces) by 2016, more than four times 2010 levels.
We expect coal production to more than quadruple to 107mnt (mn tonnes) by 2016. Growth will be driven by South Gobi, a subsidiary of Ivanhoe Mines, as the company continues to invest in the Ovoot Tolgoi mine, currently the country's largest coal mine. There are substantial upside risks to our coal outlook as the Tavan Tolgoi mine, currently owned by the Mongolian government, is due to start output by around 2015, assuming no additional delays are faced. (Mogi: production has already started)
In July 2011 the government announced that it had chosen US miner Peabody Energy, China's Shenhua Energy and a Russian Railway/Mongolian-led consortium to develop the western bloc at Tavan Tolgoi.
However, the government took back the decision afterwards and announced that a final decision will come in early 2012. We do not expect a resolution at least until after the June 2012 parliamentary elections where government officials will less likely put on a tough stance on miners.
Regulatory Environment And Key Players Mongolia has made significant progress over the last decade to improve its business environment. Most importantly, the government rescinded the 68% windfall tax in early 2011, which had been a significant impediment to foreign investment into the country. The repeal of the tax led to a wave of investment including the completion of the Oyu Tolgoi agreement, which will bring billions of dollars of investment into the country.
Mongolia's mining sector is dominated by Ivanhoe Mines and state-owned players such as Erdenes MGL and Erdenet. Small companies such as Centerra Gold and Erdene Resource Development also have a stake in the country and have substantial exploration projects. We expect the mining sector to become more fragmented.
Key Topics Covered:
Mongolia Business Environment SWOT Analysis
Global Mining Outlook
Europe Mining Sector Outlook
Industry Trend Analysis
Coal: South Gobi To Drive Growth In The Near To Medium Term
Copper: Oyu Tolgoi To Change Dynamics
Gold: Oyu Tolgoi To Transform Sector
Europe Business Environment Ratings
• Centerra Gold
• Ivanhoe Mines
Copper To Edge Lower
Aluminium: No Sustained Recovery Ahead
Oil: Prices To Pull Back
Gold: Still Bullish
Business Environment Ratings Methodology
For more information visit http://www.researchandmarkets.com/research/f5jttx/mongolia_mining_re
State Universities propose to increase their fees by 25-60%
August 22 (UB Post) The Minister of Education, Culture and Science, L.Gantumur, received and met the directors of the State Universities on August 19. The main agenda of the meeting was university fees and quality of the universities.
The directors of the biggest universities in Mongolia have discussed how to improve education quality and have submitted their proposals on increasing the fees. The Rector of the National University of Mongolia (NUM), S.Tumur-Ochir, stated "The curriculum of post-graduate and graduate courses are being reformed from the new academic year of 2012. Also, the 70th anniversary of the NUM is to be marked on October 5 this year. Apart from the 400 million MNT provided from the State Fund for the renovation work, two billion MNT have been spent on renovations. All the renovation work is set to finish on August 25. Annexes are being built for some of the schools of the NUM too. Thus, our NUM is proposing to increase our fees by between 38-60%."
The Mongolian University of Arts and Culture proposed to increase its fees by 20-40%, the Mongolian State University of Agriculture by 49% and the Mongolian State University of Education by between 25-50%. The Ikh Zasag University has proposed to increase its fees by 14-15%. The Health Sciences University of Mongolia, the Mongolian University of Science and Technology and the Mongolian University of Internal Affairs have claimed to increase their fees after observing increases by other universities.
The Minister will decide on the final matter after regarding the proposals and discussing it with the Prime Minister at the Government Session.
The Directors have also stated their will to build a Central Research Laboratory.
ULAANBAATAR AND SHIZUOKA PREFECTURE ARE TO COLLABORATE ON REDUCING THE AIR POLLUTION IN UB
August 21 (InfoMongolia) On August 21, 2012, at the invitation by the Fund on reducing the air pollution in Ulaanbaatar city, the representatives of the City Council of Shizuoka Prefecture of Japan have met with the Chairman of the Ulaanbaatar City Citizen's Representative's Khural (City Council) Dashjamts BATTULGA.
At the beginning of the meeting Chairman D.Battulga introduced, "The utmost issue to resolve in Ulaanbaatar city is the air pollution. The city with over 1.2 million of population faces with great pollution. In order to solve the problem, City Council is successfully implementing numerous projects on reducing and clearing the air pollution with Millennium Challenge Account - Mongolia and Japan International Cooperation Agency (JICA). However, the 60% of air pollution is sourced from Ger districts' smoke, hence the city is carrying out projects directed to build housing units and apartments in those district areas and to connect the areas with central heating and sewage systems in order to reduce the pollution."
The Shizuoka Prefecture representatives noted, "Japan focused on implementing the same problem's projects and succeeded to transmit high technology systems in order to resolve the air and soil pollutions. Therefore, we are ready to share own gained experience with Ulaanbaatar city."
Moreover, the parts agreed to send Mongolian working group to Shizuoka Prefecture to study the Japan's methods on reducing the air pollution, hence the collaboration on relevant issue between UB and Shizuoka Prefecture starts from today, noted the two sides.
Why Incentives Matter in Human Development
By Paul Sullivan, Georgetown University
August 22 (UB Post) Mongolia has a real chance to be a wealthy country. Its people have a real chance to be much healthier, happier, more educated, and better trained. They could live longer and have higher quality lives and more. They have serious chances to be entrepreneurs, inventors, leaders and more.
The future cities, towns and villages of Mongolia could be examples of very high quality of life areas for the world to admire. Imagine a city where Mongolians could walk easily to their markets, their relatives and friends, entertainment, schools, clubs, hospitals and clinics, post offices, government offices and more. Think about Mongolian cities, towns and villages that have very clean air, water, and land.
Mongolians have a real chance to make a model Mongolia. This could all be happening in a fairly short time period. With the massive wealth in the ground that could be extracted sold, processed, improved, and traded the average Mongolian really has a right, and even a responsibility, to dream of the model Mongolia.
However, with fortune come great challenges. How does Mongolia give the right incentives to its people, its leaders, its business people and others to help Mongolia move toward this better future?
One of the curses of quick and massive wealth to some countries is the increased obesity of its people. They get lazy, have others do the work for them, and they eat "modern foods". I remember being in one of the newly massively wealthy countries in the Middle East passing by the new diabetes hospital for children. Just outside the hospital there was a big post advertisement for ice cream. The little girl in the poster was holding an ice cream with 15 scoops of different flavors.
Of course, the children of this country could easily afford these 15 scoops. 40 years ago they could barely afford stale bread. Now they are importing sweets by the tons from Switzerland, meats from New Zealand, and lobsters from Maine in the United States (which is half way around the world from them).
This country and others like them now see the health problems that spoiling their people have wrought. They are now investing in cures, medicines and more, but are they investing in incentives to get their people out exercising, working at physical labor and more. It does not seem that way. However, as the health problems spread I suspect such incentives would happen.
The health care in this country is free of charge to its citizens. So there is no real cost, except a shorter and lower quality life, for bad behavior, such as overeating, smoking, etc.
The U.S. has a growing obesity epidemic. Many children have grown fat on fast foods, sugary drinks, massive carbohydrate-loaded meals, fatty foods and more. U.S. children are far wealthier, but clearly not healthier in many ways than their parents and certainly their grandparents. The incidence of various forms of diabetes in children, even very young children has gone way up in the United States.
The incentives for Americans to live healthier lives are quite weak. Most of the costs of health care are paid for by either the government, through private insurance agreements with employers, or by other third-party insurers and payers. Most Americans don't have a clue how much their health care costs them. They never see the bills.
Those without health care insurance see the bills. They also tend to stay away from taking care of themselves until the worst occurs. Dental problems become catastrophes and chronic health issues are neglected until it is almost too late to deal with them. There are some very healthy people without health insurance in the U.S., but they will get older. With age come the inevitable health issues.
The President's health plan and other plans are supposed to deal with these warped incentives, but they do not.
TV, video games, and the sedentary lifestyles of wealthier people all add up to not more health, but less.
For both the country in the Middle East and the U.S. one of the best ways to deal with this is to give proper incentives to the people to exercise more, eat less, eat better and do a lot more on preventive healthcare. Doctors have told me on many occasions that what they often see is a fat person who has neglected himself asking to be repaired.
So, is wealth a gift or a curse?
For the health of a population it can be both. Many examples can be found worldwide. I have seen children from Tanzania running 10 kilometers to school and back in bare feet. A couple of generations ago in the U.S. children often walked to school. Some even ran, especially if they were late rising teenagers fearing the cursed detention from being tardy. (I can vouch for that from my own experience.)
I often see parents driving their children short distances to school in the morning in my U.S. neighborhood. In that Middle Eastern country during the 2 weeks of my last visit I did not see a single child walking to school or really walking anywhere. Their South Asian drivers brought them to wherever they wanted to go often.
It would be so easy for yet another country that has a chance at great wealth to spoil its children of the future. However, Mongolia has a chance to turn that curse around by giving the right incentives for healthier lives and by building healthier cities, towns and villages.
It is not that hard given the wealth that could be coming. However, it is sadly very easy to fall right into the trap of unhealthy, yet wealthy people. I hope that will not be the case for Mongolia.
Things Mongolia could do? Well, money talks. Businesses and the government could give cash incentives for losing weight, getting blood sugar down, having better health reports for their employees and their families. Schools could have built in incentives programs to have national and local competitions in aerobic and challenging sports. Towns, villages and neighborhoods could have health competitions. Fatty and sugary foods could be taxed. Alcohol and cigarettes could be taxed more heavily.
There are many things that could be done. However, I am an outsider. Mongolia will need to decide based on its culture, its people-to-people relations, and its traditions what is its best way. However, it would help if those in leadership looked at the rest of the world and saw how quick and gigantic wealth has affected the health of people of many countries.
Now it is time to get out of my basement office and talk a long walk on the treadmill and think how I can improve my health. One must practice what one is preaching. I have a long way to go to the optimal health that I would like. Part of the issue with health incentives is that they need to be over the long run. They have to be planned and directed in creative ways to keep them interesting and useful.
Maybe I can plan to train to run long distances for the next time I am in Ulaanbaatar? (I used to run 10K races and marathons years ago and it would be nice to do that again.) However, I hope the air is cleaner to do that. Incentive could be set up for that issue as well.
"Mogi" Munkhdul Badral
Senior Client Manager / Executive Director
CPS International LLC
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