Thursday, August 23, 2012

[CPSI NewsWire: IFC to Invest $900m in OT via Syndicated Loans with EBRD, EximBank Canada, StanChart, BNP, US EximBank]

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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IFC Proposes Investing $900M in Oyu Tolgoi via Syndicated Loans

August 23 (Cbonds) The estimated total Project cost is $12.0 billion. IFC's proposed investment is a $300 million senior A Loan together with a B Loan of up to $600 million loan to be syndicated to international commercial banks, as part of a proposed $4billion project debt financing. Co-arrangers of the proposed debt financing are European Bank for Reconstruction and Development (EBRD), Export Development Canada (EDC), Standard Chartered Bank, BNP Paribas, US Export Import Bank (US EXIM), and Multilateral Investment Guarantee Agency (MIGA). The balance of the funding for the Project is expected to come from Sponsor equity, shareholder loans and Project generated cash flows.

The Project owner and developer is a Mongolian company, Oyu Tolgoi LLC indirectly owned 66% by Ivanhoe Mines Ltd, Canadian public company listed on the Toronto Stock Exchange and 34% by Erdenes Oyu Tolgoi LLC, a Mongolian State owned company. 

The Project is located in the southern Gobi region of Mongolia, approximately 600 km South of the capital city Ulan Bataar and 80 km North West of the border post and rail head with China at Gashunn Sukhait.

Link to article


30Mtpa iron ore supply is not feasible from just the Eruu Gol mine, meaning this target will have to be met via significant further developments and acquisitions in the Selenge iron ore region. This is highly positive for Haranga Resources' (ASX:HAR) nearby Selenge Project.

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 signs 25-year iron ore team-up deal with Lung Ming (Boldtumur Eruu Gol)

August 22 (ET Net) Winsway Coking Coal (01733) said it entered into a strategic alliance agreement with Lung Ming Mining for cooperation in the marketing of Mongolian iron ore products in the People's Republic of China and the role of the Group as the exclusive buyer of iron ore products produced by the Lung Ming Group. 

Under the pact, 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 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 agreement will regulate supplies of Mongolian iron ore products from the Lung Ming Group to the Group for a period of 25 years starting from 2012 and may be renewed by the parties upon agreement three months prior to its expiry.

Link to article


ERD closed -4.55% to C$0.21

Erdene Provides Update on Mongolian Metals Projects

Gold-Bearing Veins and Breccias Now Traced over 5km Strike at Altan Nar

HALIFAX, NOVA SCOTIA--(Marketwire - Aug. 22, 2012) - Erdene Resource Development Corp. ("Erdene" or the "Company") (TSX:ERD) is pleased to provide an update on the 2012 project activities in Mongolia.


-       Gold-bearing surface quartz veins and breccias at Altan Nar have now been identified over a strike length of greater than 5 kilometres

-       An expanded gradient array geophysical survey at Altan Nar has defined multiple new targets coincident with rock and soil geochemical anomalies that require drill testing

-       Northern extension of Altan Nar target area has returned multiple samples exceeding 5g/t gold along 2.6 kilometre strike in area untested by drilling

-       A second, contiguous mining license that hosts 17.8% of the 168 million tonne Inferred Resource at Zuun Mod was issued on July 20; all resources are now under long-term license

-       An Environmental Impact Study for the Zuun Mod project, prepared by EcoTrade LLC, has been approved by the Mongolian Ministry of the Environment

-       A rock geochemical survey has identified a new high-grade gold and silver discovery at Altan Arrow, 15 kilometres south-southeast of Altan Nar, along a 1 kilometre strike length

Altan Nar

Exploration work at Erdene's 100% owned Altan Nar project in southwestern Mongolia continues to expand the areal extent of mineralization. The target is now defined over an area 1.5 kilometres wide and 5 kilometres in strike length, based on an expanded surface-rock geochemical sampling program of gold-bearing veins and breccias. Although detailed work to date has been restricted to the Discovery Zone, the recent exploration success demonstrates the potential for multiple zones similar to the initial discovery area. The Discovery Zone measures approximately 300 metres by 150 metres defined by significant gold-silver mineralization associated with epithermal quartz veins and breccias.

On average, the Discovery Zone drilling has returned mineralized zones totalling greater than 30 metres of greater than 1 g/t gold and remains open at depth and along trend to the northeast. Since October 2011, 33 relatively shallow holes, totalling 5,742 metres have been drilled over a one square kilometre area of the Altan Nar prospect and anomalous gold-bearing mineralized zones have been intersected in 24 of the 33 holes, confirming the continuity and widespread nature of the Altan Nar mineralized system. Results included 29 meters averaging 4.3 g/t gold and 24.1 g/t silver from hole TND-19 which was drilled 50 metres below the mineralization intersected in TND-09, 55 meters of 1.02 g/t gold and 12 g/t silver. The Discovery Zone appears to be structurally displaced to the south but is open at depth and to the north where a broad mineralized zone intersected 74 metres of 0.6 g/t gold with 29 metres of 1.1 g/t gold with higher grades zones including 4 metres of 10.5 g/t and 56 g/t silver in an adjacent hole.

Results from the new northwest extension include an area where 10 of 15 samples returned an average of 5.95 g/t gold and 23.1 g/t silver. Multiple other areas returned rock samples with assays of greater than 1 g/t gold and up to 11.9 g/t gold. This rock geochemical survey was part of the 2012 exploration program at Altan Nar, which included expanded geochemical and geophysical surveys along trend from the Discovery Zone.

The areal extent of geophysical surveys at Altan Nar has also been expanded, including IP gradient array and magnetic coverage. Preliminary results received for the gradient array survey have identified multiple new targets coincident with rock and soil geochemical anomalies that require drill testing. The Altan Nar prospect now consists of a large 1.5 by 5 kilometre zone of gold-bearing epithermal-style quartz veins and breccias with an associated polymetallic-gold-in-soil anomaly.

Metallurgical and petrographic studies are currently being carried out to characterize the ore mineralogy. The metallurgical work is being carried out by ALS Ammtec in Australia. Additional results from soil geochemical sampling and IP gradient array and magnetic geophysical surveys are pending.

A presentation outlining the Altan Nar project 2012 exploration results is available under the Featured Items section of the company website at

Zuun Mod Molybdenum-Copper Project

The Zuun Mod molybdenum-copper project, located approximately 40 kilometres east of Altan Nar in southwestern Mongolia, is an advanced, 100% Erdene-owned development project, subject to a 1.5% net smelter royalty. During the second quarter 2012, the Environmental Impact Study for the Zuun Mod project, as prepared by Mongolia-based EcoTrade LLC, was approved by the Mongolian Ministry of the Environment. Also during the second quarter, the Company's independent technical consultant, Minarco-MineConsult ("MMC"), part of the Runge Group, was finalizing a pit optimization study. Once completed, this study will provide high-level production scheduling, a review of operating and capital costs, and economic modeling and will be used to determine the parameters of future pre-feasibility level studies. In June 2011, the Company was granted a 30-year mining license for 6,041 hectares, covering most of the Zuun Mod project, by the Mongolian government. A second mining license, located south of the June 2011 mining license, was received on July 20, 2012. This mining license covers a 358 hectare area that hosts 17.8% of the 168 million tonne Inferred Resource at Zuun Mod. All of the reported Zuun Mod molybdenum and copper resources lie within the boundaries of the two contiguous mining licenses.

Khuvyn Khar

The Zuun Mod licence areas cover a large porphyry system with multiple exploration targets beyond the main Zuun Mod molybdenum-copper deposit. One such target is the Khuvyn Khar copper prospect located 2.2 kilometres northwest of the Zuun Mod deposit. Previous drilling in 2011 at Khuvyn Khar intersected 34 metres of 1.3% copper and 9.24 g/t silver from 308 meters to 342 meters. This hole lies within a very large copper mineralized zone trending over 900 meters with multiple zones in three drill holes returning assays in excess of 0.2% copper. This zone remains untested to the south where it trends under andesite cover.

In late 2011, an orientation mobile-metal-ion ("MMI") soil survey, designed to identify sub-surface mineralization, was carried out over the Khuvyn Khar prospect. This survey successfully identified copper and silver anomalies previously intersected in drilling. In June 2012, an expanded MMI survey was carried out over a one square-kilometre area at Khuvyn Khar and results are pending. Additional 2012 work included a review of all technical data, reprocessing of geophysical data, as well as a review of all surface and drill-hole geological data. The goal of this work is to identify targets for a follow-up drilling program.

Altan Arrow

Early-stage surface exploration on a new prospect, located on the 100% Company-owned Altan Arrow exploration licence 15 kilometres south-southeast of Altan Nar, has identified significant gold and silver mineralization associated with epithermal quartz veins over a one square kilometre area. Results include an average grade from rock chip samples of 3.5 g/t gold and 60 g/t silver over a one kilometre strike length, including samples with up to 57 g/t gold and 416 g/t silver. Additional prospecting and geophysical surveys will be carried out at Altan Arrow in the third quarter.

Link to release


YAK closed -4.47% to C$3.42

Mongolia Growth Group Ltd. Announces Upcoming Conferences

Ulaanbaatar, MONGOLIA, August 22, 2012 /FSC/  Mongolia Growth Group Ltd. (YAK  CNSX)

Mongolia Growth Group Ltd. ("MGG" or "The Company") announces that it will be attending the following Mongolia related conferences in August, September and October. We invite all interested parties to attend and contact the relevant conference organizers for further details on the timing and schedules of presentations.

Discover Mongolia 2012  August 30  September 1 at the Children's Palace, Ulaanbaatar, Mongolia

For more information, please visit

Frontier Securities' Invest Mongolia 2012  September 3-5 at the Blue Sky Hotel, Ulaanbaatar, Mongolia

For more information, please visit

Mongolia 2012 Investment Summit - October 30-31 at the Four Seasons Hotel, Hong Kong

For more information please visit

Chairman and CEO Harris Kupperman will be attending.

For further information please email:

Link to release


Oyu Tolgoi Releases Environmental Social Impact Assessment

July 31 (Oyu Tolgoi LLC) --

Link to report page



23 August 2012 (BDSec) – On the Mongolian Stock Exchange (MSE), MNT 92.6mn worth of shares were traded on Thursday, including a block trade of 750,000 shares of Sharyn Gol (SHG). Excluding the block trade, MNT 85.8mn worth of 451.4k shares were traded on the exchange, which is close to average daily value before the implementation of the new trading system.

Investors are coming back to the market with the necessary paperwork prepared, requested by the new system. As of August 21, there are 32 brokerage firms that meet the requirements set by the new trading system, out of 78 MSE member brokerages.

MSE Top 20 closed 0.12% down to 18,462.83 points. Out of 20 companies traded, 7 stocks closed higher, 6 declined, while 7 remained unchanged.

Eermel (EER) was the top gainer of the day, rising 3.67% to close at MNT 2,800. Direct reduced iron manufacturer Khukh Gan (HGN) advanced 2.70% to MNT 190, while Genco Tour Bureau (JTB) ended 1.08% higher to MNT 93.02.

Darkhan Nekhii (NEH), a Darkhan City based animal skin processing company, gave up as much as 11.7% to close at MNT 5,960. Moninjbar (MIB) lost 5.88% to MNT 320, followed by Ulaanbaatar Hotel (-2.86%), Naco Fuel (-2.78%) and Sharyn Gol (-1.04%).

Link to article



August 22 (MSE) The number of members that met the requirements set by the new trading system is increasing day by day. Consequentially, the number of compliant members has reached 32.
















16 "DCF" LLC


18 Tenger Capital LLC

19 Ard Capital group














Therefore, the number of members that contributed to the Settlement Guarantee Fund has reached 48; the number of members that concluded a revised agreement with MSE has reached 57, as well as the number of members that placed the collateral has reached 33.

Link to article


Revenue increased by 31%, net profit by 68.4%, First Half MSE market share at 85%


August 2012 --


Revenues for the six months ended 30 June 2012 were MNT 3.03 billion, an increase of MNT 724.2 million or 31% vs. 2.31 billion for the six months ended 30 June 2011 (H1 2011). Considering the significant increase in sales, we have opened up a new branch office in Darkhan city (major industrial city in Northern Mongolia).

During the period under review, net profit nearly doubled, coming in at MNT 827.1 million an increase of MNT 336 million, year on year.  Also, total asset reached 9.24 billion MNT, which is 1.2 times more than that of H1 2011.

The basic earnings per share attributable to equity shareholders of BDSec amounted to approximately MNT 75.2 for H1 2012, as compared to MNT 44.65 H1 2011.

The earnings before interest, tax, depreciation and amortization ("EBITDA") for the period ending 30, June 2012 grew by 74% to approximately 1.04 billion MNT from 0.6 billion MNT for the same period in the previous year.

In the first half of 2012, we successfully managed the first and only IPO that was issued on MSE year to date, E-Trans Logistics which is the first transport company listed on the MSE. Founded in 2007, E-Trans Logistics operates as a cargo reloading terminal in Zamyn-Uud, Southern border (borders with China) of Mongolia.

E-Trans Logistics was able to raise its target capital, MNT 924 million. They are currently utilizing the capital to build a centralized service office and invest in new equipment, consistent with the stated purpose of the offering.

Our investment banking pipeline is full, including a major mining project, and several other issues of a construction materials producer, a real estate developer, and a consumer goods company.

Beren JSC is an iron ore mining and exploration company; with current capacity to produce 250K tons of iron concentrate per annum.  Beren JSC is planning to raise US$100 mil in an IPO which will be largest to ever on the MSE. The capital will be used for systematic operational and structural expansion. Their short term objective is to build a DRI plant with 300K tons capacity per annum, double its current production. We estimate the Beren JSC IPO to be issued in Q4 2012.

As of June 30, 2012 total transactions on MSE amounted to USD 46 million, with BDSec executing USD 39 million of that total, increasing our market share to 85%. Accordingly, BDSec accounted for 92% of total block trading on MSE. Further, out of 173 foreign accounts opened at SCHCD, BDSec opened 54 (31%).  In general, trade activity remained moderate partially due to parliamentary election in June 2012, which caused investors to bide their time.

The first half of 2012 was the last period in which securities traded using the old system. Starting in 2nd of July,  MIT system replaced the previous Trading, Clearing, Settlement, and Depository system. We have been working closely with our clients and investors to facilitate the system transition. 

Link to report


BoM Refuses Bids for USD in Regular Auction, Sells CNY at ₮215,02

August 23 (Bank of Mongolia) During the forex auction, the BOM refuses for the bids to sell USD 25 million as considering the demand and supply of USD is balanced and sells CNY amounting 100% of bids as closing rate of MNT 215.02

Link to release



August 23 (InfoMongolia) The second irregular meeting of the Board members of Capital City Citizens' Representative's Khural (City Council) took place in Khangarid Palace on August 22, 2012.

Within the meeting officials discussed the conferences' results themed "Capital city - road repair works, renovation and some measures on reducing traffic flow" after which have imposed several proposals on relevant issues.

In the scope of the arrangements set:

1.    Civil servants are to use public transportations.

2.    The parking lots outside Offices and Trading Centers will not be used by its employees during weekdays.

3.    To increase the number of paid parking lots and to be established by private sectors' investments.

4.    To increase the number of traffic wardens for traffic security.

5.    For the school children's safe participation in the city traffic to organize a campaign making habitual to cover the school bag with reflectors.

6.    Only public transportations of big capacities and trolleybuses to run on the 1st lane of the Peace Avenue between the Intersection named 25th Pharmacy and the Roundabout next to the "Ofitseruudyn Ordon".

7.    To make changes in the working hours of large trade centers.

8.    To enhance the public transportation service.

9.    To restrict vehicles of participating in city traffic depending on the plate number endings. In detail, all vehicles those plate numbers ending with 1 or 6 will not to participate on Mondays, those ending with 2 or 7 on Tuesdays, 3 or 8 on Wednesdays, 4 or 9 on Thursdays and vehicles ending with 5 or 0 will not run on Fridays. This regulation does not comply with Weekends.

10.  To organize some additional arrangements in the period of time when schools are to start and finish, reducing the traffic load.

These regulations will be complied between August 25 and October 25, 2012 under experimental period and the City Council will control on implementing procedures.

Link to article


Ulaanbaatar city Assembly approved action plan against traffic, August 23


Asia-Pacific cargo hitching rides on Trans-Siberian Railway, Mongolia to join

August 20 (The Asahi Shimbun) Once considered slow and a relic of the past, Russia's mighty Trans-Siberian Railway has come to life in the 21st century to play a pivotal role in cargo transport, connecting economies from Europe to the Asia-Pacific region.

In the Troitsa port in Zarubino of the Primorsky Territory, the Trans-Siberian Railway offers a direct benefit to Japanese companies.

The port has a container terminal for the Trans-Siberian Railway and cargo block trains can transport up to 300 cars in one delivery. Each rail car holds 10 automobiles stacked on two decks. One train run consists of 30 such rail cars.

In 2008, Mazda Motor Corp. became the first Japanese automaker to use the Trans-Siberian Railway. Mazda still accounts for 98 percent of the Japanese cars transported on the railway, but Mitsubishi Motors Corp. and Fuji Heavy Industries Ltd., which manufactures Subaru cars, have also begun using the railway to transport some of their vehicles to the various nations that made up the former Soviet Union.

"South Korea's Hyundai Motor Co. also uses the railway, and we are also negotiating with Toyota Motor Corp.," said Sergej Karmanov, a vice general manager of a harbor management company.

The automakers who use the Trans-Siberian Railway are attracted by the speedy delivery times. Although Moscow is located about 9,000 kilometers away, it takes about 11 days to reach the Russian capital by train. In total, it takes about 20 days for vehicles manufactured in Japan to reach Moscow car dealerships.

If the same vehicles were shipped via the Indian Ocean and the Suez Canal to Europe for transport to Russia, it would take about 60 days.

With the Russian economy enjoying the fruits of rising prices for natural resources, new car sales have increased rapidly, and Russia is approaching the number being sold in Germany.

In the last fiscal year, Mazda shipped about 30,000 vehicles to Russia.

"There is a huge benefit to being able to quickly resupply popular models to the market," a Mazda official said.

Cargo transport over the Trans-Siberian Railway peaked in the 1980s, before transport volume fell drastically due to the outdated equipment that was being used. However, the railway has recovered to become a major distribution artery connecting Russia to Asia.

In 2011, total transport volume, including not only imports and exports to Russia but also transit cargo shipments between two other nations, reached 102.7 tons, a 30-percent increase over 2008. Ninety percent of that volume is taken up by export of natural resources because of the transport costs that are deliberately kept low as part of state policy. However, Russian Railways compiled a plan last year to increase the ratio of revenues for the transport of such cargo as industrial products and daily necessities from the 4.2 percent of 2010 to 7.5 percent in 2020.

At a container terminal next to BMW AG's modern plant in Leipzig, Germany, yellow vehicles carried containers to two rail lines with close to 20 rail cars each. The trains were bound for BMW's plant in Shenyang, China. China and Europe are separated by about 11,000 kilometers of railways, which takes about 20 days to traverse. The distance and time required is about half of shipping routes.

In the first six months of 2012, BMW's sales in China reached about 159,000 vehicles, an increase of 30 percent over the same period in 2011. That rate of increase is much higher than the 8 percent increase in global sales.

"There is a need to support the new plant by sending it parts as quickly as possible," an official at the Leipzig plant said.

On the return trips, a liquid-crystal panel manufacturing company affiliated with LG Electronics Inc. transports parts from its Dalian, China, plant to a factory in Poland.

Anatol Kuzhel, the director of the central control division at Russian Railways, said, "The speed and accuracy of the Trans-Siberian Railway exceeds international standards."

The introduction of cargo block trains from the 2000s is a major factor behind that development because it allows for quick transport of huge volumes of cargo.

In an ordinary cargo rail configuration, rail cars destined for various locations are connected together and the cars have to be disconnected and reconnected a number of times along the way. That leads to delays in delivery as well as resulting in additional jolts to the cargo.

However, cargo block trains involve connecting at least 30 rail cars and no change in that configuration is needed before reaching the destination. This means trains can reach Moscow from the Russian Far East in as short as seven days.

In Vladivostok in the Russian Far East, ships carrying cargo from Asia await their turn to anchor at the port. The Russian shipping company FESCO, or Far Eastern Shipping Co., has routes to Japan, China and South Korea. It also operates almost daily runs of cargo block trains to Moscow.

"There are no problems with delays or damage to the products," said Dmitriy Kurdakov, the director of FESCO Integrated Transport's Far Eastern regional center.


The extensive presence of the Trans-Siberian Railway is evident outside of Vladivostok where there is a railway crossing that is known locally for only being open for very short periods of time.

A long line of cargo rail cars moved slowly past, taking about 10 minutes for the entire configuration to pass. However, no sooner had that train gone by when another long cargo train came in the opposite direction.

Cargo trains on the Trans-Siberian Railway make about 60 round trips daily, including on branch lines. Some connect up to 100 rail cars, extending for about 1.5 kilometers.

There is a total of about 85,000 kilometers of rails in Russia and Russian Railways employs 970,000 workers, the largest workforce of any Russian company. That makes the company a valuable source of jobs outside of major urban centers.

The Russian government began privatizing cargo transport from about 2003 and in 2008 decided on a plan to spend at most about 13.8 trillion rubles (about 33 trillion yen, or $422 billion) over a 30-year period to renew engine cars and rails.

The extensive railway network has also led to the birth of new businesses in the Russian Far East.

About 70 kilometers north of Vladivostok near the border with China lies the city of Ussuriysk. The home appliance company Ocean has a plant there that manufactures refrigerators.

"This area is most suited for transporting parts from South Korea and China by train and shipping out finished products," said Alexandr Zaikin, Ocean general director.

Through a cooperative relationship with a South Korean company, Ocean has expanded production of products based on models first manufactured by the partner company. It now produces about 200,000 refrigerators annually and also has begun manufacturing liquid-crystal flat screen TV sets and washing machines.

"We want to expand sales in western Russia, including Moscow," Zaikin said.

Still, the Trans-Siberian Railway is not without its problems.

For one thing, the cargo block train setup requires enough cargo to fill at least 30 rail cars. But there is a chronic shortage of rail cars because production has not kept pace with the sudden increase in transport volume.

There are also unexpected costs involved, such as escort fees that are delineated by law for cargo as well as complicated customs procedures that have to be cleared.

The railway also received bad publicity in the 1990s when the overall Russian economy was mired in a confused state. At that time, the railway was criticized for using outdated equipment, the rough handling of cargo by workers and delays in the train schedule.

Some Japanese companies, such as Mitsui & Co. and Kintetsu World Express Inc., came up with transport plans to use cargo block trains. However, cargo has not accumulated due to economic stagnation arising from the collapse of U.S. investment bank Lehman Brothers in 2008.

In addition to the relatively higher expense of shipping products to the Russian Far East, officials of Japanese companies also held concerns that cargo would be damaged along the way.

Russia has implemented measures to respond to such concerns.

In addition to seeking even faster transport, efforts are also being made to reinforce the transport capability of the Baikal-Amur Mainline (BAM), which is often referred to as a second Trans-Siberian Railway.

In the future, plans call for having BAM handle the transport of natural resources while the Trans-Siberian Railway would concentrate on passenger travel and cargo block trains.


There are also efforts in other nations to create a multilayer railway network linking Europe with Asia.

For landlocked nations, getting a foothold into such a network provides an opportunity for economic development.

In May, Nursultan Nazarbayev, the Kazakhstan president, said, "We have to become the largest distribution connecting point in central Asia in order to become a bridge connecting Europe and Asia."

In 1990, operations began on a railway line from Almaty, which was the Kazakhstan capital at the time, extending for about 500 kilometers in a northwesterly direction to the Chinese border. Cargo transport lines began operating on that line from last year reaching to Chongqing in western China.

However, that line is still not up to the speed of the Trans-Siberian Railway because of a difference in rail gauge. That means cargo has to be transferred to a different train at the national border. For that reason, cargo trains have to wait their turn due to an increase in transport volume.

About 50 kilometers north of Almaty lies the small town of Jetygen. A rail line of about 300 kilometers has been laid connecting the town to one near the Chinese border. Plans call for operations to begin next year, and the new line could become a second route linking central Asia and Europe with China.

"We will protect the safety of cargo transport that is spreading around the world," said Alimkulov Berik Ryskulovich, the station master at Jetygen. "Although this is a small station, its role is important."

Mongolia, which is sandwiched between Russia and China, has also begun investing in railway construction.

From the capital of Ulan Bator, a day's drive south over the steppes leads to Sainshand, the central city of Dornogovi province. On the outskirts of the city, construction of a new railway line was proceeding on an embankment of between five to 10 meters.

Far off to the west lies the Tavan Tolgoi coal mine, one of the world's largest for which companies of various nations are competing to gain development rights. In the other direction, the embankment leads to a town in eastern Mongolia, which is connected to Russia by rail.

Plans call for connecting the Trans-Siberian Railway with the huge coal mine in a few years.

Although the coal mine is actually closer to the Chinese border, the strategy among Mongolian officials is to utilize the Trans-Siberian Railway to export the coal to Russia, Japan and South Korea.

While maintaining a delicate balance between China and Russia, Mongolia is also seeking an exit to the Sea of Japan for its enormous reserves of natural resources.

Railway engineers in Mongolia also pointed to other geopolitical factors behind the move.

Mongolian officials are wary about Beijing's motives because China in 2002 cut off rail lines from Mongolia for more than a day because of a visit from Dalai Lama XIV.

The construction of the new railway line means that in the future Sainshand will serve as an intersection for transport.

P. Gankhuyag, the governor of Dornogovi province, said, "We will create jobs for 300,000 people by constructing a heavy industry complex."

Link to article


Chinese Discrimination in Mongolia

SummaryOver recent years Chinese migrant workers have poured into Mongolia and clashed with locals. They face discrimination and often aggravate the situation through their own behavior. This has led to some violent conflicts and legislation aimed at keeping the number of foreign workers limited.

August 20 (The Economic Observer, China) Zhao Wenjun (赵文俊) came to Ulan Bator, Mongolia three months ago from Erenhot, Inner Mongolia to be a chef at a Chinese restaurant. Since he started, he's spent nearly all his time in the restaurant. He regards wandering the streets as a luxury.

On the day he arrived, Zhao was told not to go out alone at night since Mongolians don't like Chinese people. Although he'd met Mongolian people before without incident, he decided to heed the warning.

"It is their place," Zhao said. "Better to be careful."

"Actually it isn't that bad," said the manager of the restaurant surnamed Wang. Wang has been in Mongolia for over four years. He says conflicts between Chinese and Mongolians happen occasionally, but sometimes it's actually the Chinese person's fault.

Fights with Chinese Workers

Zhao's concerns are common for Chinese workers who have just come to Mongolia. The term "Chinese worker" has even become politically loaded in the country.

Although not every Chinese worker encounters conflicts with locals, a few past incidents that have been exaggerated through word-of-mouth make the situation seem terrifying.

"There are lots of drunken Mongolian men on the street at night," said one Chinese resident. "If they see that you're Chinese, they'll bully you." 

Zhao Jurong (赵巨荣), chairman of a real estate company in Mongolia, told the EO that in recent years the booming Mongolian real estate industry has created demand for a large number of skilled workers, which has attracted many Chinese. Conflicts involving Chinese workers aren't something new in Ulan Bator.

Most of time, conflicts arise from language barriers and misunderstanding one another. Most Chinese workers in Mongolia are from southern China, where people tend to speak very fast with high voices. Conversely, Mongolians speak softly, and only raise their voices when arguing. When in a close contact, Mongolians might misinterpret Chinese people and think they're being scolded.

Chinese workers can also aggravate problems through their own behavior. Some discriminate against Mongolians, calling them sluggish or alcoholic. Sometimes they mock Mongolia's lack of development compared to China's or say, "Mongolia was once our territory." Mongolians don't take too kindly to this.

Zhao said that construction teams tend to have people from the same regions of China with anywhere from a dozen to a hundred people in them. If one or two Mongolians have a conflict with that many Chinese people, of course they'll be at a disadvantage. In those situations, Mongolians will sometimes call radical right-wing organizations and get dozens of people to turn up. Then the conflict basically descends into a gang war.

Since last year, Chinese-run construction sites have experienced many violent clashes between Mongolian and Chinese workers. When these incidents occur, Chinese are usually detained. The Chinese embassy may come to help, but there's little it can do. Once someone has gotten involved in a fight, then they've broken the law.

This year, one construction group in Ulan Bator had a large fight that involved more than 20 Chinese people and over 70 Mongolians, mostly from the right-wing group Dayar Mongol (大亚蒙古). Fortunately the company called the police in time and it didn't get too out of control, but in the end, five Chinese were injured. 

In recent years, several anti-Chinese organizations like Dayar Mongol, Blue Mongolia and World Children Protection have emerged; and they're all legal. Their clothes and cars sometimes even display Nazi swastikas. But they aren't only against Chinese. They target all foreigners. Chinese simply make up the largest foreign population.  

It's hard to say how many are involved with these organizations. After a few days of interviews in Mongolia, some said there were dozens, some said hundreds. For the most part, they hold ordinary jobs, but when incidents occur, they'll contact each other and gather quickly.

Dislike of Chinese People

Liu Ba Te Er (刘巴特尔), president of the Chamber of Commerce of Inner Mongolia in Mongolia, said that Mongolians are indeed not very fond of Chinese people; it's an objective reality. He says you can feel it when going out in public. Some taxi drivers will refuse service to Chinese people and at some tourism sites in suburban Ulan Bator will raise fees for Chinese.

Liu said that Mongolian people have a very strange mentality. Economically, they rely on Chinese people very much and often ask them for help. But politically, you'll only be popular if you say bad things about Chinese.  When running for office, no one dares say that they're a friend of the Chinese people. Some Mongolian officials even talk to their friends from Beijing and tell them not to worry about the anti-China remarks they have to make in public. It's just politics.

Anti-China sentiment also comes from a Mongolian version of the "China threat theory." The thinking is that China has already taken Hong Kong and Macau back, soon it will get Taiwan, then next it will set its sights on Mongolia. This view is very popular in Mongolia and is part of the rhetoric of some anti-China organizations.

Liu Ba Te Er said that Mongolia's attitude toward China has largely spread to the public from the government. Because of historical disputes, China is a natural enemy that politicians can use in riling up nationalistic support.

To some degree, leaders have had to cater to anti-foreign sentiment in the form of legislation. Mongolia has issued laws to control migrant workers in the country; like setting a quota saying their numbers can't exceed one percent of the Mongolian population. Based on Mongolia's population of 2.8 million, the number of foreign workers can't exceed 28,000. 

In the real estate industry, builders must recruit seven Mongolian workers for every Chinese worker they bring in. In the mining industry, that ratio is nine-to-one. 

Zhao said that according to this standard, the demand for Chinese workers can't be met at all. In reality, the number of Chinese workers is far beyond this line. The policy has only served to make things more complicated and push up labor costs.

Irreplaceable Workers 

It's not easy to find workers in Ulan Bator. Although Mongolians often complain that Chinese workers are taking their jobs, when companies come to recruit, there's a small pool of local laborers. 

Even if a company can find Mongolian workers, management is a headache. From the view of Chinese bosses, Mongolian workers are lazy, alcoholic and unwilling to adhere to normal working hours. No matter whether it's in the real estate or mining industry, Chinese bosses tend to prefer Chinese workers, even if the cost is higher.

For construction workers at Zhao Jurong's real estate company, the salary for a skilled worker is about 10,000 yuan per month. On top of this, the company also needs to pay 1,500 yuan to the Mongolian government for each worker.

"Now, the salary in China has also risen," said Zhao. "If I don't double up, workers won't come here."

This year he hired more than 400 workers from China, who are all on work visas for six months to one year. The management of Mongolian and Chinese workers stays separate, with rules for Chinese employees stating that they can't go out beyond the construction site and they can't drink. 

Zhao said that of course, there will be some loopholes in management. After all, you can't restrict workers' personal freedom. He says that there are always workers sneaking out. But when this happens you don't need to look very hard for them. There's an 80 percent chance they'll end up at the police station.

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August 23 (InfoMongolia) The Australian Embassies in Beijing and Shanghai, the People's Republic of China announced the changes on Visa Service Delivery, which will be effective from October 01, 2012.

In detail, previously an applicant had to send his/her passport to the Embassy via mail, where the Australian Visa was lodged to an applicant's passport and sent back, but from now on within the new regulations, an applicant just need to fill an on-line application form and the respond will be given via e-mail. Besides a national may to request a lodged visa on the passport by paying 70 AUD.

According to the service changes, the Department of Immigration and Citizenship of the Embassy led by Neri Tarlinton have conducted a seminar for Mongolian officials in its building office on August 20-21, 2012. Representing Mongolia, 11 office workers from the Office of Immigration, Naturalization and Foreign Citizens, 20 officers from Buyant-Ukhaa Border Control Port and 15 officials from companies that make services for Domestic and International flights have attended the seminar.

Introduction of Australian Visa Service Delivery

Two Australian Visa Service Delivery (AVAC) operated by VFS Global Pty Ltd, will open in Beijing and Shanghai on September 10, 2012.

The AVACs will accept visa applications, handle basic enquiries from clients prior to their application being lodged, collect visa application charges and provide an online application tracking facility. The introduction of AVACs will provide more convenient access to immigration services for clients through greater access to information, extended service hours and streamlined processing.

Creation of visa processing centres

In addition to the introduction of AVACs, there will also be changes to where certain visa applications are processed in China from September 10, 2012.

Consolidating visa processing for certain visa applications into these processing centres will enable a greater level of consistency in processing and decision-making and will improve the service DIAC provides to clients in this region.

Impact on clients

These changes mean that from September 10, 2012, clients who reside in provinces within the Beijing and Shanghai catchment areas applying for most Australian visas should lodge their application at an AVAC in either Beijing or Shanghai. Clients in the Guangzhou catchment applying in person or by mail for an Australian visa should continue to lodge their application directly with the Australian Visa Office at the Australian Consulate in Guangzhou.

There will be no change to the current lodgment and processing arrangements for Government officials applying via the Ministry of Foreign Affairs (MFA) or their local Foreign Affairs Office (FAO), Australian Destination Status (ADS) travel or Australian citizenship applications which should continue to be lodged directly with the nearest Australian Visa Office.

Mongolian Applicants

The Visa Office of the Australian Embassy Beijing is responsible for processing all visitor, temporary residence, resident return and student visa applications, as well registration of citizenship by descent from applicants in Mongolia. If you wish to apply for one of these, you should lodge your application at the Beijing Visa Office.

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UK horse products firm gets first Naadam order

August 22 (Bdaily) North East manufacturer of equine supplements has branched into the Mongolian market, with £10,000 order. 

Four pallets of supplements from Newburn-based Equine Products UK Ltd, will be delivered to the Mongolian capital Ulan Bator.

Pharmaceutical importer EuroPharma will supply the country's horse racing herdsmen, as equine tourism is said to be thriving. 

Equine Products' supplements will predominantly be used by herdsman taking part in an ancient Mongolian festival to celebrate heroism and masculinity. 

Mongolia's Naadam is eight centuries old, and celebrates horse racing, wrestling and archery. The 17 mile horse race remains unchanged since the days of Genghis Khan. 

Justin Ridley, commercial director of Equine Products UK says: "This is an exciting new market for us to be exporting to and Mongolia has a very different way of doing business than the middle east, for example. We established the business in 1981 and work with agents and distributors in the UK and across the world.

"Horses are sacred in Mongolia and there is new wealth in the country, which is being invested in the equine industry. We're looking forward to developing a close relationship with EuroPharma to explore other regions where our products can be used as we continue to grow the business."

Equine Products' range includes nutritional support products for joints, hooves, skin, respiratory, health, digestion and behaviour.

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Vertical engineers construct multinational partnerships during Khaan Quest 2012

FIVE HILLS TRAINING AREA, Mongolia (Aug. 21, 2012, U.S. Army) -- Mongolian Armed Forces, U.S. Soldiers and Canadian Forces participated in the Engineer Subject Matter Expert Exchange portion of Khaan Quest 2012, Aug. 13-21.

The purpose of the training was to conduct classroom and hands-on instruction regarding the best practices related to vertical troop construction, by utilizing the skills of carpentry/masonry, plumbing and interior electrical work.

"The training went well, the Mongolian Armed Forces engineers were very interested in the type of practices that we presented in the classroom," said Chief Warrant Officer Patrick Verango, 6th Engineer Battalion, engineer projects officer.

The topics covered in the classroom training were project management, construction management, carpentry and masonry, interior electrical work, safety, quality control and quality assurance, said Verango.

Following three days of classroom instruction, the participating units relocated to a Mongolian Armed Forces camp in Nalaikh district to conduct the oversight and instruction on several projects including; a repair center, vehicle garage, gym, cultural center, kitchen and dining hall, checkpoint and two battalion buildings.

"We had the opportunity to collaborate with multinational forces and to exchange our various techniques and practices over the past week," said Lt. Col. O. Sugar, Mongolian Armed Forces engineer commander.

Verango said this training has strengthened military-to-military cooperation and established a mutual respect for how our partners and allies in the Pacific region conduct vertical troop construction. 

"Now that we have a better understanding of how they operate, we have the opportunity to take the things we have learned back home," said Verango who is stationed at Joint Base Elmendorf-Richardson in Alaska.

Khaan Quest is a regularly scheduled multinational exercise sponsored by the U.S. Army Pacific and hosted annually by the Mongolia Armed Forces held at the Mongolian Armed Forces Peace Support Center in the vicinity of Ulaanbaatar, Mongolia.

"This has been an amazing experience for us," said Air Force Capt. Joe Doubrough, Canadian Forces Engineers, Canadian Operational Support Command, construction engineer. "I have enjoyed working with the other nations here and it's always good to learn different things from different people."

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