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Blue Wolf Mongolia Countdown: 59 days left till liquidation
English speaking world:
Please spell Mongolia's capital correctly, it's "Ulaanbaatar," not "Ulan Bator"
Mogi: a little dramatic of a comparison I'd say
Rio's Mongolia Copper Dream Awakens 20-Year-Old Nightmare
February 21 (Bloomberg) Rio Tinto Group (RIO)'s Mongolia copper and gold mine looks a dream location sitting next to China, the biggest market. Yet, Mongolia's bid for more control of the project draws comparison with a Rio mine that went badly wrong.
Mongolia's government is ratcheting up criticism of Rio's management of the $6.6 billion project, the landlocked country's single biggest investment. Lawmakers have argued for a bigger share of profit, while President Tsakhia Elbegdorj wants more management control. He faces elections in June with a fifth of the nation's 3 million people in poverty despite world-beating economic growth of 17.3 percent in 2011.
Rio has refused government overtures to rewrite the agreement on the mine known as Oyu Tolgoi, raising tensions and comparisons with another Rio copper mine more than two decades ago. That project known as Panguna on the island of Bougainville in Papua New Guinea was shut by local protests and is still the subject of a U.S. court case.
"In Bougainville the community felt, rightly or wrongly, they weren't compensated adequately for the various impacts of mining they were having to absorb," said Jeffrey Neilson, a senior lecturer in economic geography at the University of Sydney. Governments in emerging economies "have to be seen to be taking a strong stance and making sure that the benefits of their resource wealth are being shared."
Mining companies also need to consider wealth distribution in countries where they invest as a matter of course, said Michael Bush, who now heads credit research at National Australia Bank Ltd. and formerly worked as a geologist at the Geological Society of Australia.
'Fingers Burned'
At Panguna, which was closed in 1989 after protests turned violent, the company "got its fingers burned more than many" of its peers, Bush said.
The unrest at Panguna, led by Francis Ona a former Bougainville mine worker, revitalized an independence movement on the island. That prompted the Papua New Guinea government to declare a state of emergency and send in troops in a conflict in which thousands died.
Bougainville landowners later filed a U.S. lawsuit alleging Rio conspired with the PNG government in acts of genocide, human rights abuses and environmental damage. Rio lost an appeal to have the lawsuit thrown out on Oct. 25, 2011. In November the same year, Rio sought to appeal the ruling to the U.S. Supreme Court. No decision has been made, according to the court's website.
'Serious Risks'
The company has argued that as the case has no connection whatsoever to the U.S. it shouldn't be heard in the country and that the U.K. and Australia object to the litigation.
Rio cited a U.S. government filing that supported the company's view: U.S. courts passing judgment on the conduct of a foreign sovereign, the government warned, pose "serious risks to the United States' foreign relations with foreign states."
Mongolia's Oyu Tolgoi, set to start production in July, has about 25 million metric tons of recoverable copper and an expected life of 50 years. That's about three-times the size of Panguna, which produced about 3 million tons of copper from 1972 to 1989 and holds another 5 million tons, according to a recent study amid discussions about reopening the mine under Rio unit Bougainville Copper Ltd. (BOC)
"Bougainville Copper Ltd. has a long-term vision of returning to mining and exploration on Bougainville, which Rio Tinto supports," said Rio spokesman David Luff in an e-mail response to questions. "Any eventual return would be subject to the support of landowners and the government."
The project will be discussed at Bougainville Copper's annual general meeting in April, he said.
Rio Tinto fell 2.4 percent to A$67.70 at 11:10 a.m. in Sydney trading. BHP Billiton Ltd. (BHP), the world's biggest mining company, declined 3.1 percent.
Resource Nationalism
Resource nationalism -- government demands for higher taxes, royalties or stakes -- was the top concern among mining executives in 2011, according to Ernst & Young LLP's annual risk survey published in August 2012.
"I don't think nationalism is growing, it's always been here" in Mongolia, said Vidur Jain, an analyst at the Ulan Bator-based Monet Capital Investment Bank. "The government has an eye on the upcoming elections. Foreign investors don't vote so the government could be aiming its rhetoric and actions at the electorate."
The politicians that offer to squeeze the most from foreign investors are likely to win the most public support, Jain said. Government corruption and inefficiencies are the main reasons foreign investments don't trickle down, "but that's not something the locals are aware of."
Losing Pit
A disconnect with local people led to the troubles at Rio's Panguna mine, with the company not doing enough to mitigate the effect of its project on local inflation or the environment, Sydney University's Nielsen said.
Nielsen formerly served as a community liaison officer for Aurora Gold Ltd., which had its mine overrun by locals in central Kalimantan, Indonesia, over how mining proceeds were shared.
"All of a sudden the local community cut down these massive trees and put them across the access road to the pit," Nielsen, who worked for Aurora between 1999 and 2000, said.
"About 5,000 illegal miners took over the asset and started mining the pit. They were mining themselves, digging shafts. Then the company had to slowly renegotiate access to the pit."
Who Blinks First
President Elbegdorj said this month the nation should have more control of Oyu Tolgoi, adding to calls from lawmakers in the last 18 months to push Rio to cede equity control in the mine. Mongolia, which is almost three times the size of France, owns 34 percent of Oyu Tolgoi and Rio the rest through its Turquoise Hill Resources Ltd. (TRQ) unit.
As Elbegdorj appeals to voters in a nation where about a fifth of the people get by on $1.25 a day, he's setting up a face-off with Rio's Chief Executive Officer Sam Walsh, who has his own stakeholders to worry about.
Walsh, less than two months into the job, has to appease shareholders angered by a $14 billion writedown in Rio's coal and aluminum operations that cost the previous CEO Tom Albanese his job.
"I don't think Rio will renegotiate the agreement," said Jain at Monet Capital. If they do, there's a risk other countries will want the same, so eventually there'll be some kind of back-door deal, he said.
Mongolia Vs Rio
Lawmaker complaints in Mongolia have centered on cost increases at the mine, which they claimed had jumped almost $10 billion to $24.4 billion (Mogi: Phase I+II). Rio set costs so far at $6.6 billion (Mogi: Phase I), according to the Oyu Tolgoi website.
"The two sides don't even seem to agree on what the cost overruns are for phase I of Oyu Tolgoi," said Nick Cousyn, chief operating officer at BDSec, Mongolia's biggest brokerage.
Cost overruns have been used to gain greater state control in a project before.
Russia, the world's largest energy producer, refused for a year to approve Royal Dutch Shell Plc. (RDSA)'s request to double the cost of investment in the Sakhalin-2 oil and gas project. In 2006, shareholders sold half their shares to state-run OAO Gazprom, giving the Moscow-based company the biggest stake.
Russia has resorted to tax claims and environmental inspections to pressure foreign investors into relinquishing major oil and gas projects started before President Vladimir Putin first came to power in 1999. First Deputy Prime Minister Sergei Ivanov said June 13, 2007, foreign companies "will never operate" major fields again.
No Bougainville
The Mongolian dispute will probably end better than the story of the Bougainville mine.
"The world has changed markedly since the Bougainville situation, both from the global mining companies' view point and from government angles," said Tim Barker, investment analyst at BT Financial Group Pty, who owns Rio shares.
What has not changed is where the resources are, said Sydney University's Nielsen.
"We live on a finite planet and countries are taking a gamble on their resources," he said. "Perhaps there isn't a rush to dig it out and sell it now and they can negotiate deals in ten or 15 years."
Two weeks ago on Feb. 7, about 23 years since Rio closed Panguna, the company announced it may be restarted. The mine still holds more copper and gold than was dug out.
Turquoise Hill Resources Announces Board Changes
VANCOUVER, BRITISH COLUMBIA--(Marketwire - Feb. 20, 2013) - Turquoise Hill Resources (TSX:TRQ)(NYSE:TRQ)(NASDAQ:TRQ) today announced that the company's Board of Directors has accepted the resignation of director Andrew Harding and appointed Jean-Sébastien Jacques to the board. Last week Rio Tinto, Turquoise Hill's majority shareholder, announced management changes and appointed Mr. Jacques as Chief Executive, Copper and named Mr. Harding Chief Executive, Iron Ore.
Mr. Jacques joined Rio Tinto in October 2011 and before his current position he was President, International Operations - Copper. Prior to Rio Tinto, Mr. Jacques spent more than 15 years working across Europe, south-east Asia, India and the US in operational and strategy roles in the aluminum, bauxite and steel industries. He served as Group Director, Strategy and was on the Executive Committee at Tata Steel Group from 2007 to 2011. Previously, Mr. Jacques spent four years as Corporate Development and Strategy Director at steelmaker Corus and worked for aluminum company Pechiney.
Mogi: they made a good move of snatching him I'd say
Anglo Taps Hancock to Lead Drive Into Mongolia Amid Rio Troubles
February 21 (Bloomberg) Anglo American Plc. (AAL) opened an office in Mongolia headed by Graeme Hancock, the former operating chief of the country's biggest state miner, to expand its business in the coal- and copper-rich nation.
Hancock, who stepped down last month as COO of coal miner Erdenes Tavan Tolgoi, becomes Anglo American's chief representative and president in Mongolia, the London-based company said in an e-mailed statement. Anglo, the third-largest mining company, opened the office in the capital Ulan Bator to develop "preferred" commodities, according to the statement, which didn't elaborate.
Mongolia is tightening regulation on overseas investment amid public criticism that the cash pouring in from mining projects is benefiting an elite not the broader society. Anglo rival Rio Tinto Group (RIO), Mongolia's biggest investor, is locked in a dispute with the government over control of the $6.6 billion Oyu Tolgoi copper and gold project.
"I look forward to building strong working relationships with the government, the business community, civil society and the local communities," Hancock said. "These relationships, built upon dignity and respect, are essential for the company to become a valued development partner for Mongolia."
Origo Partners PLC: Interim Management Statement for the three month period from October 1, 2012 to December 31, 2012
February 20, Origo Partners Plc (OPP:LN) --
This Interim Management Statement by Origo Partners Plc ("Origo" or "the Company") and its subsidiaries ("the Group") relates to the three month period from October 1, 2012 to December 31, 2012 ("the Period").
Highlights from the Period:
· Unaudited net asset value of US$196.5 million compared to US$201.7 million for the period ending September 30, 2012
· Unaudited net asset value per share of US$0.55 at the end of the Period compared to US$0.57 per share for the period ending September 30, 2012
· Total investments of US$4.4 million
· Ordinary share repurchases in the Period amounting to approximately US$700,000
· Net cash position of US$22.0 million
Post the Period:
· Proposals to extend the maturity of the Company's existing convertible zero-dividend preference shares ("C-ZDPs") by 18 months
Chris Rynning, Origo's CEO, said:
"Q4 represented a mixed picture for the Company with our Chinese portfolio trading well, benefitting from the gradual recovery of China's economy, but offset by the impact of political uncertainty relating to our Mongolian investments during the Period.
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Mongolia, on the other hand, is yet to clearly signal a renewed path for a stable and predictable environment for foreign investment and due to the lack of clarity on the country's development path, we have temporarily scaled down our operations in Mongolia. Whilst we do not expect matters to stabilize until after the Presidential elections in June, we continue to engage with the Government of Mongolia and other local stakeholders to promote investor friendly policies. Our Mongolia focused portfolio companies continue to meet their exploration and development targets, and we are actively exploring exit opportunities for our Mongolian investments. I am confident that in working with our Mongolian partners we will be able to realize value and achieve our investment objectives for our Mongolia portfolio within our targeted holding period.
We take some encouragement from our portfolio company, ResCap Securities, recently carrying out the first ever reverse takeover transaction on the Mongolian Stock Exchange (MSE) after the Period end. This transaction, although small, illustrates the range of potential opportunities open to investors in Mongolia.
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In the Period, we also undertook a share buyback programme. The gap between the price of our shares and the value of our assets is a serious concern for management as we are significant common shareholders. The gap in my view reflects the steady negative news flow during 2012 from the territories and commodities sectors we invest in, and not the fundamentals of Origo itself. The Board will continue to consider further share purchases in the context of our prudent capital policy and commitment to generating shareholder value.
…
3. Portfolio Composition
In line with the Group's strategy, investments are made predominately in privately held companies across various sectors of China's economy, and in companies and assets with exposure to the Chinese market, with the objective of providing shareholders with above market returns, primarily through capital appreciation. Currently, the Group focuses on the following sectors: metals & mining, agriculture and cleantech.
As at December 31, 2012, the portfolio was carried at the aggregate value (excluding revaluations of unquoted portfolios) of US$233.3 million compared to US$233.8 million for the period ending September 30, 2012. The top ten investments represented 90 per cent of the fair value of the portfolio, with the top five investments accounting for 70 per cent.
Table 1: Top 10 Investments (US$ million)
Company | Sector | Instrument | Ownership* | Cost | Fair value | % of |
Gobi Coal & Energy Ltd | Metals & Mining | Common Stock | 14.0% | 15.0 | 67.0 | 34.1% |
China Rice Ltd | Agriculture | Preferred Stock & Loan | 32.1% | 28.0 | 31.8 | 16.2% |
R. M. Williams Agricultural Holdings Pty Ltd | Agriculture | Common Stock & Loan | 17.0% | 23.1 | 26.2 | 13.3% |
Celadon Mining Ltd | Metals & Mining | Common Stock | 9.7% | 13.1 | 24.4 | 12.4% |
China Cleantech Partners, L.P.** | Cleantech | Limited Partnership Interests | 50.1% | 15.0 | 15.0 | 7.6% |
Unipower Battery Ltd | Cleantech | Preferred Stock & Loan | 16.5% | 13.3 | 13.3 | 6.8% |
Moly World Ltd | Metals & Mining | Common Stock | 20.0% | 10.0 | 10.0 | 5.1% |
IRCA Holdings Ltd | Metals & Mining | Common Stock & Loan | 49.1% | 24.9 | 9.3 | 4.8% |
Kincora Copper Ltd | Metals & Mining | Common Stock | 32.6% | 9.3 | 7.6 | 3.9% |
Niutech Energy Ltd | Cleantech | Preferred Stock | 21.1% | 6.4 | 6.4 | 3.2% |
* Legal & beneficial interests, excluding impact of outstanding options/warrants and any outstanding convertible instruments
** A private equity fund focusing on China's cleantech sectors, jointly formed and co-managed by the Group and Ecofin Limited
Reflecting the Group's strategy of investing in privately held companies, 95 per cent of the portfolio (in terms of fair value) at the end of the Period was invested in unquoted portfolio companies.
The Company's direct holdings in listed companies comprised stakes in HaloSource Inc. (LSE: HAL), Kincora Copper Limited (TSXV: KCC), Voyager Resources Ltd (ASX: VOR).
The Group also has indirect interests in other quoted investments through its investments in two funds managed by the Group - the China Commodities Absolute Return Ltd ("CCF") and the Mongolia Stock Exchange ("MSE") Liquidity Fund.
The weighted average holding period for the portfolio was 2.8 years, with 51 per cent of the Portfolio having been held for less than 3 years; 49 per cent having been held for 3 years or longer.
In terms of sectors, the composition of the portfolio at the end of Period comprised:
Metals & Mining (52 per cent)
Agriculture (25 per cent)
Cleantech (18 per cent)
Consumer, Technology and Media (5 per cent).
4. Investments and Divestments
The Group invested a total of US$4.4 million to existing investee companies during the period, of which US$2.0 million were invested in the listed equities directly and US$0.9 million through CCF.
In November 2012, Origo participated in a private placement by Kincora, subscribing to CAD2.0 million of common shares and common share warrants exercisable at a price of CAD0.19 per warrant for up to three years.
In November and December 2012, Origo sold its interests in two Hong Kong listed Chinese companies, Hilong Holding Ltd, a Chinese integrated oilfield equipment and service provider, and SPT Energy Group Inc. a Chinese integrated high-end onshore drilling services providers, generated realised profit of US$1.8 million - a 1.9x cash to cash return on the cost of the investment and an IRR of 104 per cent.
In the Period, the Company undertook repurchases of ordinary shares amounting to approximately US$700,000. Purchased shares are cancelled.
5. Portfolio Updates
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During the Period, Kincora Copper successfully closed the second tranche of a private placement, raising C$4.7 million in total. The funds will be directed towards the continuation of drilling and exploration activities at the company's flagship Bronze Fox project located in the emerging Oyu Tolgoi South Gobi porphyry copper belt in southeast Mongolia and for working capital. After the Period, Kincora made an announcement in respect to Mongolian media reports, which allege that two licenses held by Kincora's wholly owned subsidiary, Golden Grouse LLC ("GG"), along with a total of 107 other licenses, had been issued in violation of Mongolian anti-corruption laws and could be repatriated by the State. We note that these licenses were not acquired directly by Kincora, but through a transaction with Golden Grouse which closed in April 2012. Whilst these reports are concerning, they only pertain to two GG licenses and not the company's flagship Bronze Fox project. Therefore, if revoked, it would not materially affect the commercial prospects of the company. We are cautiously optimistic about a rebound in the value of our position in Kincora as the regulatory picture stabilises and the company starts to deliver on its 2013 exploration campaign.
…
After the end of the Period, our Mongolian portfolio company, ResCap Securities, carried out the first reverse takeover transaction on the Mongolian Stock Exchange (MSE) when it launched Eurofeu Asia JSC (MSE:SOI). ResCap Securities is the largest broker on the MSE by volume and has taken a lead on trading Mongolian equities. Eurofeu has established itself over the last decade as Mongolia's market leader in full service fire safety, and is the only company in the country providing a number of key fire safety services. Origo has a shareholding in Eurofeu through our MSE Liquidity Fund and while the investment is not material to Origo's balance sheet, it demonstrates our ability to be a leading investor in Mongolian equities across various sectors.
Our MSE Liquidity Fund continues to perform well, and is now up 16.7 per cent since inception. In the Period, the fund participated in a further private placement by a company that is being listed on the MSE at a compelling valuation which may see a re-rating once listed.
Origo: Proposed extension to maturity of Convertible Zero-dividend Preference Shares
February 20 -- Origo Partners plc ("Origo" or the "Company") today announces proposals to extend the maturity of the Company's existing convertible zero-dividend preference shares ("C-ZDPs") by 18 months (together, the "Proposals").
The principle terms of the Proposals are:
· Extending the maturity date of the C-ZDPs by 18 months from 8 March 2016 to 8 September 2017 (the "Extended Period");
· Amending the final capital value ("FCV") of the C-ZDPs to $1.41 each, with the accrued rate of return for the Extended Period equivalent to 10% of the accrued value of the C-ZDPs at the start of the Extended Period;
· A commitment to repurchase, by means of tender offers to holders, at least 12 million C-ZDPs by 8 March 2016, the original maturity date; and
· Setting aside, for the funding of C-ZDPs tender offers, 50% of the next $24 million of net proceeds (post transaction costs and management incentives) from investment realisations by the Company.
The Proposals have followed consultation with several leading institutional holders of both the Existing C-ZDPs and the Company's ordinary shares.
The Company proposes to amend the articles of association of the Company to give effect to the Proposals, which will require the approval at a separate class meeting of the holders of the C-ZDPs and approval at a general meeting of the shareholders in the Company, in each case by 75% or more of eligible shareholders. The Company has received an irrevocable undertaking in respect to over 75% of the C-ZDPs that voting rights attaching to them will be exercised to vote in favour of the resolutions to implement the Proposals to be proposed at the shareholder meetings to be convened by the Company.
In addition to the Proposals, the Company intends to immediately repurchase approximately 3 million C-ZPDs from holders at a price of $1.00 per C-ZDP.
The Directors consider that the Proposals provide a number of significant benefits to the Company and its investors, namely:
· The effective cost to the Company of the extension of the maturity date of the C-ZDPs is, in the Director's opinion, on attractive terms, being an accrued annual return of approximately 6.5% for the additional 18 month period; and
· The extended redemption of the C-ZDPs provides the Company greater flexibility in respect of applying proceeds from future realisations to repurchases of ordinary shares as well as C-ZDPs.
Origo Partners CEO, Chris Rynning commented:
"Despite the C-ZDPs having over 3 years until their maturity date, we have an opportunity to extend their maturity on attractive terms. I believe this proposal is a prudent step that puts the Company in a stronger position to optimise shareholder value going forward and provides improved flexibility on how we manage our shareholders' capital."
Centerra Gold Reports 2012 Fourth Quarter and Year-end Results
TORONTO, ONTARIO--(Marketwire - Feb. 20, 2013) - Centerra Gold Inc. (TSX:CG) -
To view the 2012 Management's Discussion and Analysis and the Audited Financial Statements and Notes for the year-ended December 31, 2012, please visit the following link: http://media3.marketwire.com/docs/CG2012FSMDAQ4.pdf.
Centerra Gold Inc. today reported adjusted net earnings of $112.7 million or $0.48 per share in the fourth quarter of 2012 before recognizing a one-time accounting charge of $180.7 million for the de-recognition of the underground assets at Kumtor, which results in the Company recording a net loss of $68.0 million or $0.29 per share for the period. This compares to net earnings of $79.4 million or $0.34 per common share in the same quarter of 2011.
2012 Fourth Quarter Highlights
· Increased reserves at Kumtor by 58% with the new KS-13 life-of-mine plan.
· Replaced reserves, proven and probable gold reserves now total 11.1 million ounces of contained gold.
· Agreed to acquire the remaining 30% interest for 100% ownership of the Oksut gold project in Turkey, which subsequently closed in January 2013.
· Reported initial resource estimate on the Oksut gold project of indicated resources of 682,000 contained ounces and inferred resources of 477,000 ounces of contained gold.
· Started up the heap leach operation at the Boroo mine.
· Signed a new two year Collective Bargaining Agreement at the Kumtor mine. The new Agreement expires at the end of December 2014.
· Produced 219,316 ounces of gold in the quarter, including 189,438 ounces at Kumtor and 29,878 ounces at Boroo.
· Increased revenues to $368.5 million compared to $248.0 million in the same quarter of 2011.
· Cash provided by operations was $208.2 million compared to $60.3 million in the fourth quarter of 2011.
· Reported all-in cash cost (pre-tax) for the quarter of $839 per ounce compared to $934 for the 2011 fourth quarter.
…
Boroo
At the Boroo mine in the fourth quarter of 2012, gold production was 29,878 ounces, compared to 12,866 ounces in the same period of 2011. The production increase of 12,614 ounces is a result of processing higher grade ore from Pit 6 with an average mill head grade of 2.07 g/t compared to 0.86 g/t last year and the addition of 7,486 ounces of production from the heap leap operation which resumed in October 2012.
Operating costs at Boroo were up $3.8 million quarter-over-quarter primarily due to increased costs for mining ($0.4 million), heap leaching ($1.9 million) and royalties ($1.8 million), partially offset by a decrease in milling costs ($0.2 million). Heap leaching costs were higher due to stacking, crushing and processing activities which commenced in the fourth quarter in 2012. Royalties increased in 2012 due to the additional 24,618 ounces sold in the 2012 fourth quarter. Milling cost decreased mainly due to lower consumption of consumables.
Operating cash costs per ounce produced in the fourth quarter 2012 was $479 compared to $849 per ounce for 2011. The decrease in the unit cash cost is a result of the higher production partially offset by higher operating cost incurred for heap leach operations in the fourth quarter of 2012. Operating cash costs per ounce produced is a non-GAAP measure and is discussed under "Non-GAAP Measures".
Boroo's all-in cash costs per ounce produced for the fourth quarter of 2012 is $502 and includes all costs directly related to gold production except for income tax paid in Mongolia. The same all-in cash costs measure for 2011 was $940 per ounce produced. The decrease in all-in cash costs is due to the 21% increase in production partially offset by higher costs at Boroo year-over-year. All-in cash costs per ounce produced is a non-GAAP measure and is discussed under "Non-GAAP Measures".
During the fourth quarter of 2012 exploration expenditures in Mongolia decreased to $3.0 million from $4.2 million in the same period in 2011. The majority of the exploration work in the fourth quarter 2012 was conducted at the ATO property in eastern Mongolia.
During the fourth quarter of 2012, capital expenditures at Boroo were $0.7 million, $0.4 million of sustaining capital and $0.4 million of growth capital.
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Mongolia
Gatsuurt and the Impact of the Mongolian Water and Forest Law
Further to information disclosed in Centerra's MD&A for the third quarter 2009 and Centerra's Annual Information Form for 2011, the Mongolian Parliament enacted in July 2009 the Mongolian Law to Prohibit Mineral Exploration and Mining Operations at River Headwaters, Protected Zones of Water Reservoirs and Forested Areas (the "Water and Forest Law") which prohibits mineral prospecting, exploration and mining in water basins and forestry areas in Mongolia. The law provides for a specific exemption for "mineral deposits of strategic importance", which exempts the Boroo hard rock deposit from the application of the law. Centerra's Gatsuurt licenses are currently not exempt. Under the Mineral Laws of Mongolia, Parliament on its own initiative or, on the recommendation of the Mongolian Government, may designate a mineral deposit as strategic. Such designation could result in Mongolia receiving up to a 34% interest in the applicable project.
Centerra is currently in discussions with the Mongolian Government regarding the development of the Gatsuurt property. Centerra is reasonably confident that the economic and development benefits resulting from its exploration and development activities will ultimately result in the Water and Forest Law having a limited impact on the Gatsuurt property, in particular, and other Company's Mongolian activities including ATO. There can be no assurance, however, that this will be the case. Unless the Water and Forest Law is repealed or amended such that the law no longer applies to the Gatsuurt project or Gatsuurt is designated as a "mineral deposit of strategic importance" that is exempt from the Water and Forest Law, mineral reserves at Gatsuurt may have to be reclassified as mineral resources or eliminated entirely and the Company may be required to write-off the associated investment in Gatsuurt and Boroo.
As at December 31, 2012, the Company had net assets recorded amounting to approximately $37 million related to the investment in Gatsuurt and approximately $28 million remaining capitalized for the Boroo mill facility and other surface structures which are expected to be utilized for the processing of ore from Gatsuurt. Although the Company expects to exploit the Gatsuurt deposit, should this not be the case, the Company would be required to write-off these amounts. A revocation of the Company's mineral licenses, including the Gatsuurt mineral license, or the reclassification of mineral reserves or the write-off of assets could have an adverse impact on Centerra's future cash flows, earnings, results of operations or financial condition. For a further discussion relating to the Water and Forest Law, please see the Company's Annual Information Form for 2011.
The Boroo Heap Leach
Boroo received regulatory approval for the mine plan for the heap leach facility in September 2012. As a result, Boroo recommenced heap leach operations in the fourth quarter of 2012.
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Mongolia (Boroo & Gatsuurt)
At Boroo, 2013 sustaining capital expenditures are expected to be $10 million primarily for raising the tailings dam at Boroo ($6 million), and maintenance rebuilds and overhauls.
Growth capital for the Gatsuurt deposit is forecast at $1 million, related to environmental studies.
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Boroo
At Boroo, the forecast for 2013 DD&A expensed as part of costs of sales is $17 million, compared to $21 million in 2012 and $10 million in 2011. The decrease in 2013 reflects the completion of mining activities in Pit 6 in 2012. The largest components of depreciation expense are related to depreciation of the mill, the administration buildings and other assets forecasted at $6 million.
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Centerra Gold Announces Quarterly Dividend of Cdn$0.04 Per Share
TORONTO, ONTARIO--(Marketwire - Feb. 20, 2013) - Centerra Gold Inc. (TSX:CG) announced today its Board of Directors has authorized a dividend of Cdn$0.04 per common share (approximately US$9.5 million at the current exchange rate). The dividend of Cdn$0.04 per common share is payable on March 21, 2013 to shareholders of record on March 7, 2013. The ex-dividend date will be March 5, 2013.
The dividend is an eligible dividend for Canadian income tax purposes.
In accordance with Centerra's dividend policy, the timing and quantum of dividends are to be determined by the Board of Directors from time to time based on, among other things, the Company's operating results, cash flow and financial conditions, Centerra's current and anticipated capital requirements, and general business conditions. While Centerra currently intends to pay quarterly dividends to its shareholders, there can be no assurances in this regard.
MMC: DATE Of BOARD MEETING
February 22 -- The board of directors (the "Board") of Mongolian Mining Corporation (the "Company", and its subsidiaries, the "Group", 975:HK) hereby announces that a meeting of the Board of the Company will be held on Monday, 11 March 2013 for the purpose of considering and approving the final results of the Group for the year ended 31 December 2012 and recommendation of a final dividend, if any, and transacting any other business.
Aspire Mining: Presentation to Coal Mongolia 2013
February 22, Aspire Mining Ltd (ASX:AKM) --
Khan Investment Management Update (02/20/2013)
February 20 (Khan Investment Management Limited) --
2013 got off to an encouraging start with a New Year rally in equity markets and heightened optimism for renewed Chinese growth. However, continued legislative and political uncertainties in Mongolia coupled with a raft of recent negative news headlines has kept Mongolian investment sentiment depressed. We view the recent unexpected nationalistic comments by the President of Mongolia as political posturing, as he begins campaigning for re-election in June and we expect further political and legislative uncertainties to affect Mongolian stocks in the short term. Our strong view is that this is an opportune time to add to current positions in the portfolio, buying on market weakness that we believe will improve significantly post-election cycle. With supportive legislation, key operations coming online, a stabilisation of the political environment and competitive cost advantages we believe that Mongolian explorers and producers will experience a significant revaluation in coming months.
Importantly, the Government of Mongolia (GOM) has confirmed that they are not seeking a renegotiation of the Oyu Tolgoi (OT) Investment Agreement (IA); however they have entered into shareholder discussions with Turquoise Hill (TRQ:US) and Rio Tinto (RIO:US) to enquire about the process of proper implementation of the agreement. We view this stance as a more sensible and practical approach of requiring clarification on key issues which affect the GOM's interests. Whilst initial headlines sent shockwaves through investor circles we view the discussions as a positive development and expect that we are now finally close to a decisive end to the dispute and initial commercial production at OT – a sure windfall for Turquoise Hill and Mongolia.
Mongolian authorities continue to aggressively pursue cases of corruption and illegal activity and have recently made a number of additional high-profile arrests and secured convictions. Investigations are not limited to senior officials, and have extended to border guards and junior officials in purported smuggling cases. This steadfast approach to stamp out corrupt and illegal activities at all levels should be seen by investors as encouraging and a boost to confidence in investing in the nascent economy.
The Bank of Mongolia recently lowered its policy rate to 12.5% from 13.25% after determining that the outlook for inflation is benign and deciding to "cautiously" ease policy. According to the Bank's Chief Economist, inflationary pressure has eased as a result of fiscal limits adopted by the government that have resulted in "more disciplined" spending.
January was a positive month for the Khan Mongolia Equity Fund (KMEF) resulting in a net performance of over 5%. Of the 15 positions in the portfolio, 6 gained, 1 remained unchanged, and 8 lost ground. Aspire Mining Ltd (AKM:AU) was the standout performer gaining 62% to close the month at AUD 0.11 (after trading as high as AUD 0.17) following the Noble Group's (NOBGY:US) commitment to support the Ovoot coking coal project and increase their investment in Aspire to 15% (from 10.01%). The continued backing and strategic alliance with Asia's largest diversified commodities trading company is a game changer for Aspire as they move into prime position for the development of their 100% owned Ovoot coking coal project.
The Khan Mongolia Equity Fund performance for January was +5.28%.
The Net Asset Value as at 31 January 2013 was USD 47.04
The January Factsheet can be downloaded by registered users of the Khan Investment Management website – www.Khan-Management.com
2012 drilling by Haranga Resources Ltd (HAR:AU) has confirmed a new iron ore discovery in Mongolia with metallurgical testing currently underway. Haranga's exploration target remains 250-400Mt – potentially Mongolia's largest iron ore deposit. The Company successfully raised AUD 6M through a strategic placement to a Mongolian investor – issuing shares at AUD 0.20. The Company's cash position is now AUD 9.4M. A significant JORC resource upgrade announcement is expected in April. FeOre Ltd (FEO:AU) reported a 14% increase in total mineral resource at its Ereeny iron ore project in Mongolia with the total resource now measured at 124.2Mt. Feore continues to trade at a 72% discount to its December 2011 IPO price of AUD 0.25. Mongolian Mining Corp (MMC) (975:HK) is on the way to become a leading listed coking coal producer in Asia with the additional development of the Company's second coking coal deposit and expanded processing capacity coming online. Hong Kong based research and investment house Argonaut recently released a target price for MMC of HKD 5.02. The stock is currently trading at HKD 3.64.
The Japanese based financial giant ORIX Corp. (IX:US) is undeterred by the recent negative news coming from Mongolia and are reported to be investing USD 50M into a Mongolian Private Equity Fund in what appears to be a first move to "test the Mongolian waters". It is also said that they are intending to acquire shares in one of the big 4 banks in Mongolia.
We are encouraged this month to see several Asian and Australian brokers reaffirming "buy" recommendations on a number of Mongolian companies, reflecting our own strong convictions. Mongolia's long-term growth story and prospects for capital appreciation remain inherently strong.
Next month I will be speaking at the Annual Asian Mining Congress to be held in Singapore at the Marina Bay Sands Convention Centre from 12th to 15th March. Specifically I will be discussing the outlook for Mongolia and risk management strategies for investing into frontier markets. Should you wish to attend the conference, please don't hesitate to contact me directly within the next week.
Following the Mines & Money Hong Kong 2013 conference from 18th to 22nd March, I will be travelling to Ulaanbaatar and will be working from our Mongolia office for a couple of weeks before returning to Singapore mid-April.
I thank our investors for their continued support and I look forward to updating you further of our developments next month.
Wishing you all the very best for the Year of the Snake!
Best regards,
Travis Hamilton
Managing Director
KHAN INVESTMENT MANAGEMENT LIMITED
ONLY 51 MSE LISTED COMPANIES FILED 2012 FINANCIAL REPORTS ON TIME
February 21 (MSE) According to the relevant laws, rules and regulations Joint Stock Companies are obliged to submit their audited year-end financial reports to Financial Regulatory Commission and Mongolian Stock Exchange within 10th February of next year and disseminate a summary of the report to the public.
Currently 51 Joint Stock Companies have submitted their 2012 year-end financial reports on reporting time.
Please click here to view financial reports.
BDSEC JSC – NOTICE OF ANNUAL GENERAL MEETING
February 22 (BDSec) The annual general meeting (AGM) of BDSec JSC (the Company) will be held at BDSec Joint Stock Company, Zaluuchuud Avenue 27/1, 8th Khoroo, Sukhbaatar District, Ulaanbaatar, Mongolia on Wednesday, 24 April 2013 at 10:00 a.m.
The AGM will be open to all shareholders registered on the record date for the AGM, Monday, 04 March 2013.
Items on the AGM's agenda:
a) Financial statements and independen auditor's report for 2012
b) Company's business operation report for 2012
c) Decision on dividend distribution
d) Company's business operation plan for 2013
e) Election of members of the Board of Directors
f) Adoption of the budget for the Board of Directors
g) Private bond offering
BoM holds FX auction
February 21 (Bank of Mongolia) On the Foreign Exchange Auction held on February 21st, 2013 the BOM received from local commercial banks bid and ask offers of USD and CNY. BOM has refused the оffers as considering the demand and supply of USD and CNY is balanced.
POLICY COUNCIL RECOMMENDS FOUR PROJECTS TO BE FINANCED BY CHINGGIS BONDS
February 21 (InfoMongolia) On February 20, 2013, the Policy Council of the Government held its regular meeting, where a recommendation was issued and agreed to finance at first four biggest projects by Government's Chinggis Bond and resolved to submit to the Cabinet meeting for an approval.
The Government of Mongolia released its national bond namely "Chinggis" on international stock market to raise money in order to finance biggest projects and programs to be implemented in the near future, besides in order to control and manage these projects and spend the money more effectively and prudently, the Policy Council was formed chaired by the Prime Minister N.Altankhuyag.
The Council comprises of 17 members including Minister for Economic Development, Minister for Finance, Minister of the Cabinet Office of the Government of Mongolia, Minister for Construction and Urban Development, Minister for Industry and Agriculture, Minister for Road and Transportation, Minister for Mining, Minister for Energy, Chairmen of Economic and State Budget Standing Committees of the Parliament, Governor of the Central Bank, Chairman of the Financial Regulatory Commission, Head of the Office of the President of Mongolia, Speaker of the Parliament, Advisor to the Speaker, and the Governor of the Capital City.
First four biggest projects to be financed by "Chinggis" Bond:
1. By 2016, all centers of all Aimags (21 Aimags of Mongolia) will be connected with paved roads to the capital city, Ulaanbaatar. Starting 2013, 1,347 km road from centers of Dornod, Dornogovi, Dundgovi, Umnugovi, Bayankhongor and Khuvsgul aimags to Ulaanbaatar will be constructed and financed by "Chinggis" Bond.
2. In the frames of implementing the Capital City re-planning, at first 33 T-intersections (3-way junction) will be converted into 4-way junctions. Also, two highways (horizontal and vertical axes) will be constructed alongside the Tuul and Selbe Rivers.
3. Power plant with capacity of 300 MW will be constructed relying upon Tavan Tolgoi, besides to supply with energy the Oyu Tolgoi site.
4. As part of the planned 1,800 km railroad to build, the ground works will be finished for 270 km from Tavan Tolgoi to Gashuun Sukhait port.
Highlights from Coal Mongolia 2013 Speeches
February 21 (UB Post) The Third International Coal Investors Conference and Exhibition, Coal Mongolia 2013, opened yesterday at the SS Convention Center. Key government officials including Ministers of Mining, Economic Development, Nature and Green Development, along with domestic and foreign coal sector experts, presented speeches about Mongolia's coal sector and its future prospects.
The Ministry of Mining and Mining.mn has organized the event with the aim of attracting international investors to Mongolia's coal sector and to provide an opportunity for discussions on the challenges and opportunities presented by the discovery of vast mineral wealth in Mongolia, particularly coal.
The coal sector of Mongolia serves a critical role in the country's geological and mining industry, which makes up 87.7 percent of total exports from Mongolia and one fifth of the gross domestic products (GDP). Current coal deposit estimations indicate that Mongolia has 173.3 billion tons of coal in reserve, placing Mongolia among the top coal-rich countries of the world.
"The strong resource base of the country serves as a solid basis for Mongolian coal sector's competitive position in the international market… As the coal sector is identified as a sector with much competitive advantage internationally, the future prospects of Mongolia's development depend heavily on the successful development of this sector" said D.Gankhuyag, the Minister of Mining.
According to statistics released by the Ministry of Mining, Mongolia produced 31.1 million tons of coal in 2012, 20.5 million tons of which were exported, contributing 828.5 billion MNT to state budget revenue.
Since their victory in the general parliamentary elections last year, the new "reform government" has been quick to reassure foreign investors that the government will be supportive of foreign investment, given the significant role of investment in the development of the Mongolian economy.
Soon after the elections, Prime Minister N.Altankhuyag pledged that the government would continue to improve transparency and strengthen the legal framework so as to create a favourable environment in which foreign investors could invest. He also emphasized that he would continue to strengthen and develop relations and cooperation with China and Russia.
A number of speakers at the Coal Mongolia conference, including CEO and Executive Director of Mongolian Mining Corporation, G.Battsengel, have been critical of the recent changes in the legal framework, stating that foreign investment into Mongolia has declined since the Strategic Entities Foreign Investment Law was passed in May last year. G.Battsengel observed that the political and legal framework of Mongolia has been in a state of constant change in recent years.
G.Battsengel noted that Mongolia lacks the value added production of coal and reliable transportation to be able to cope with the increasing demand for coal, although Mongolia is blessed with vast quantities of high quality coal. He said that Mongolia's coal export prices tend to be relatively high, mainly due to transportation costs, which make up 70 to 80 percent of coal prices. He remarked that transportation costs are high because of inadequate roads and old railways. G.Battsengel added that if Mongolia begins processing its coal, the price could increase to 150 USD per ton. Raw coal is sold at around 90 USD per ton. According to a study conducted by his company, 850 million USD is needed to establish a processing factory.
The President of Glogex Holdings mining consultancy company, L.Naranbaatar, said in his speech that coal production in Mongolia is expected to grow dramatically in the short and mid-term. Mongolia only produced 10 million tons of coal in 2008; production had increased to 33 million by 2011.
L.Naranbaatar noted, however, that projections for 2012 coal production were 40 million tons, but Mongolia delivered 9 million less, producing only 31 million tons. The shortfall is believed to be mainly due to delays by mining companies. Glogex Holdings expects Mongolia to produce 46 million tons of coal this year, but this will depend on the reliability of transportation.
L.Naranbaatar remarked that the drops in stock prices of coal mining companies such as Aspire Mining and SouthGobi Resources over the past year were due to the political instability and uncertainty surrounding the outcome of the parliamentary elections in 2012, as well as the uncertainty surrounding the Strategic Entities Law just before the elections. He also pointed to the negative reports in the international press relating to the multiple discussions over renegotiating the Oyu Tolgoi copper and gold mine investment agreement, and the proposed changes to the Mineral Resource Law as having an impact on investors.
In response to the criticisms that 'resource nationalist' government policies toward foreign investment are creating an unfavourable and unprofitable investment environment, and that this is scaring away potential international investors, Mining Minister D.Gankhuyag said that the government will continue to work with the private sectors and the public to ensure that nobody's interests are overlooked.
"Government procedures are conducted in strict accordance with the policies, and maintain transparency, even more so than businesses", said D.Gankhuyag.
"I think the straightforward and relatively low taxation in Mongolia provides an attractive environment for business," he added.
'Foreign investment benefits Mongolia's economy'
At yesterday's Coal 2013 Conference and Exhibition, the Vice Minister for Economic Development and Ambassadors from China, Russia, Japan, the USA and Canada shared their thoughts on foreign involvement and cooperation in the Mongolian mining sector.
The Vice Minister for Economic Development, O.Chuluunbat said yesterday in his speech at the conference that the government recognizes the importance of foreign investment in Mongolia's economic development and that when foreign and domestic companies do well it benefits Mongolia, especially in the light of the recently released government "Chingis Bonds."
Soon after the bonds were released, their value dropped rapidly. This followed the news that the Mongolian People's Revolutionary Party was leaving parliament. The Vice Minister said the price of the bonds is extremely sensitive to news of such nature and said that Mongolia needs to send out positive messages to the international media by ensuring a favorable environment for investment, to increase the value of the bonds.
Vice-Minister O.Chuluunbat explained that the money raised through the bonds will be used to fund the construction of a rail project 1,800 kilometers in length, road developments, housing mortgages, and other infrastructure development projects, all of which will make it easier for businesses to conduct operations in Mongolia.
Wang Xiolong, the Ambassador of People's Republic of China said at yesterday's conference that Mongolia-China coal trade will continue to grow, propelled by increased economic activity in China, where GDP is set to grow by 8 percent per year, on average, in the foreseeable future.
China is the world's biggest coal importer, followed by Japan, despite China producing around 3 billion tons domestically. The Chinese Ambassador said that China consumed 3.6 billion tons of coal last year and is planning to increase consumption dramatically as they continue to focus on the energy sector.
Last year, coal exports to China made up around 90 percent of Mongolia's total exports, bringing in 10.2 billion USD in revenue.
Wang Xiolong explained that the biggest issues relating to coal imports from Mongolia are transportation capacity and cost. Mongolia uses Soviet style railways with wide tracks, which is different from the Chinese railways, therefore the train wheels have to be changed at the border, which is costly and time consuming.
Finally, Wang Xiolong clarified that China has never demanded or intended exclusive partnership with Mongolia.
The Russian Ambassador to Mongolia, Victor V.Samoilenko, informed the conference participants that Russia is prepared to work with Mongolia in building railways, as Mongolia is great need of reliable transportation.
He noted that no major projects have been undertaken by Russia in Mongolia since the collapse of the Soviet Union, but that Russia is willing to strengthen and continue to work with Mongolia on major projects.
Many of the large scale projects such as the Erdenet copper and molybdenum mine and concentrator plant, and coal mines such as Baganuur and Boroo Undur, were developed with the help of Russian geologists and miners.
The Russian Ambassador noted that although Mongolia has many benefits in terms of mineral wealth, it still has issues in terms of political stability, transportation, and a shortage of a skilled workforce, as well as environmental issues.
The Ambassador of Japan, Takonori Shimizu, informed the participants that Japan is interested in trading minerals and raw materials with Mongolia, as 99 percent of coal consumed in Japan is imported.
Around 80 percent of Japanese coal imports are from Indonesia and Australia. Shimizu explained that trading coal with Mongolia would be beneficial in terms of diversifying partners and reducing associated national security risks (of dependency on few suppliers), but the main issue he noted was, again, transportation and logistics. As for the quality of the coal, the Ambassador stated that lab tests of Mongolian coal showed that it meets Japanese requirements.
The Japanese Ambassador stated that the draft Mineral Resource law proposed by the President's office contained ambiguous clauses that could indicate unfavorable terms for foreign investment.
The Ambassador of the United States of America, Piper Campbell, emphasized the need for respectful negotiation procedures and remarked that the emotional response of the public towards foreign investment raises issues. She noted that foreign and domestic investors have the same interests and the two should not be separated.
"Many of the issues that have arisen in the past and are experienced today really reflect the emotional part of the discussion, rather than any real arguments about the practical side. The solution lies in more transparency," said Ms. Campbell.
Gregory Goldhawk, the Ambassador of Canada, noted that many Canadian companies have already made substantial investments in Mongolia's mining development.
He emphasized the need for sensible rules that are consistently applied, as some of the laws passed are not implemented simply because it isn't practical to do so. Mr. Goldhawk expressed that he will support the Mongolian government. He acknowledged that Mongolia has the right to pass any laws it may see fit, and said that he expects Canadian companies to comply with these laws.
Mongolia opens international coal conference
ULAN BATOR (Mogi: see petition at top), Feb. 21 (Xinhua) -- An international coal conference opened here on Tuesday, drawing 740 participants from more than 10 countries.
Mongolian Mining Minister Davaajav Gankhuyag told the participants that the conference was aimed at attracting foreign investment and boosting international cooperation.
Mongolia also planned to promote environmentally friendly technology and enhance the global competitiveness of Mongolian coal exploring, mining and processing during the two-day conference, he said.
Mongolia's coal reserves were estimated at 173.3 billion tons, with 21.5 billion tons having been explored. At present, Mongolia has more than 300 coal mines, ranking among the world's 10 largest coal countries.
The turnover of the coal industry stood at 600 million U.S. dollars in 2012.
Road network between Ulaanbaatar and 21 aimags by 2016
February 21 (news.mn) The Government plans to provide road network connectivity between Ulaanbaatar City and 21 aimag centers by 2016. The Capital City, Ulaanbaatar, is currently connected to only 9 aimags with paved roads.
In order for the plans by the Government to become reality, a total of1340 km paved roads are proposed to be built in Khuvsgul, Bayankhongor, Dornod, Dornogovi, Dundgovi and Umnugovi aimags this year.
The road network is planned for Zavkhan, Govi-Altai, Sukhbaatar next year according to A.Gansukh, Minister for Roads and Transportation during a brief summary of the year on Wednesday.
Sea transportation is also a subject in discussion by the Ministry. A.Gansukh, Ministry for Roads and Transportation talked about taking actions to develop sea transport in order to export mining products into a third country because Mongolia is landlocked.
MONGOLIAN MINISTRY OF CONSTRUCTION WELCOMES JAPANESE COMPANIES AT TOKYO FORUM
February 20 (InfoMongolia) Mongolia-Japan Business Forum in Construction Sector organized by the Ministry of Land, Infrastructure, Transport and Tourism of Japan is being held in Hotel Grand Palace, Tokyo on February 18-22, 2013.
At the event representing Mongolian Ministry of Construction and Urban Development, Deputy Minister Ms. Gochoosuren BAIGALMAA introduced a project on housing and facilities to be constructed surround the new International Airport, which is to be operational in Khushigt Valley, Tuv Aimag by 2016 and welcomed Japanese companies willing to bid.
Also, Director-General, Land Economy and Construction and Engineering Industry Bureau, Ministry of Land, Infrastructure, Transport and Tourism, Mr. Motoi Sasaki who delivered an open remarks underlined, "Mongolia-Japan relationship is been growing considerably recent years. We believe that the professional skills, technology and experience of Japan constructional sector will be investing great contribution into Mongolian economic growth and this forum will also bring its significant positive results".
Oyu Tolgoi celebrates Mongolian businesses at Gobi Gem Awards
- Oyu Tolgoi's suppliers help to create a brighter future -
Ulaanbaatar, Mongolia, February 21, 2013 (OT) Oyu Tolgoi LLC has recognised the achievements of its suppliers at the fourth Gobi Gem - Supplier Recognition Awards, on Wednesday at the National Opera and Ballet Theatre in Ulaanbaatar. All of Oyu Tolgoi's Mongolian suppliers were celebrated, with nine companies winning awards. Winners included small, Umnugobi businesses as well as some of Mongolia's most famous companies.
In 2012, 67 per cent of Oyu Tolgoi's suppliers were Mongolian and the company plans to increase this further in the coming year. By spending as much money as possible in Mongolia and building a sustainable national supply chain, Oyu Tolgoi maximises economic growth and jobs.
Oyu Tolgoi President and CEO, Cameron McRae said: "Once again, Gobi Gem highlighted how much Oyu Tolgoi is helping to grow Mongolian businesses and create jobs. As well as celebrating the successes of the winners, all of our suppliers deserve our congratulations for the work they are doing to help us create a brighter future for Mongolia".
"What really struck me about tonight's winners was how Mongolian companies are delivering the things that Oyu Tolgoi needs in every part of our operation. From the clothing our miners wear to the airline that flies them to our site, together we are delivering a world class mine that is made in Mongolia. As well as developing skills and businesses for the future, we are ensuring that as much money as possible stays in the country, helping the government through taxes and income."
A total of 29 companies were nominated for awards, from the hundreds who have worked with Oyu Tolgoi in 2012. The event was the culmination of a year of success for Oyu Tolgoi and its suppliers. Oyu Tolgoi produced its first copper concentrate at the end of January. This was the result of years of work and billions of dollars of investment.
Between 2010 and 2012, Oyu Tolgoi spent 1.4 trillion MNT (US$ 1.1 billion) buying products and services from Mongolian companies. Even when it is not possible to find a supplier in Mongolia, Oyu Tolgoi offers training and consultancy to Mongolian and Umnugobi businesses to help them successfully bid for tenders in the future.
Eznis Airways, winner of the Grand Prix award, was established in 2006 and began providing air transport to the Oyu Tolgoi site in 2007. The company employs 350 people and has a strong social ethos, supporting educational progammes and a number of national events. Eznis Airway's success comes just a few weeks before the official opening of Khanbumbat Airport, which has been constructed for Oyu Tolgoi by Mongolian architects and construction contractors and will be the Umnugobi's first international standard airport.
The full list of winners is:
GrandPrix: Eznis Airways LLC
Best Supplier (Large business): Geomandal LLC
Best supplier (Medium business): Global Acetylene LLC
Best supplier (Small business): Orem Trade LLC
Best supplier (Umnugobi): Setgeshgui Khoich LLC
Best supplier (Khanbogd): Argal Khet LLC
Best supplier for employment: CIS LLC
Best supplier for Local Content Optimisation: Transwest Mongolia LLC
Best supplier for HSE performance: Energy International LLC
Visit the gallery: Gobi Gem - 2012 Supplier Recognition Awards
Mongolia's mineral rush brings home truths about beneficiaries
February 20 (Business Report) The guys sitting at the table behind me were discussing what would be needed to set up an office in the city; the one with the North American accent was talking as though money was no object.
His primary concerns were getting enough skilled locals to work in the office and also getting some indication of what the pending new mining-related legislation might look like.
The local assured him there would be no problem getting skilled people who would meet the government's growing demands that large international mining companies employ more locals.
He acknowledged that given the upcoming elections it was difficult to forecast precisely what the mining-related legislation would look like, but he believed the government would not bow to local demands for higher tax and more stringent environmental regulations.
It could have been the Park Hyatt in Rosebank on any day of the year or the Taj Hotel in Cape Town during the Mining Indaba, but I was in fact sitting in the Grand Khan pub in downtown Ulaanbaatar, the capital of Mongolia. The place was peppered with expatriates from North America and Australia who were either in Ulaanbaatar running an office or on their way through to one of the massive mining sites that are springing up around a country that is now referred to as Minegolia.
After a week or so in the country, it was difficult not to wonder how much ordinary Mongolians would benefit as huge chunks of their country were dug up and exported at substantial cost to the environment. It was impossible not to believe that the biggest beneficiaries of Mongolia's massive mining wealth would be foreign mining companies and their shareholders, as well as the Chinese economy, which is set to soak up anything that can be dug out of Mongolia for the foreseeable future.
It is certainly difficult to imagine ordinary Mongolians will see much benefit from their country's wealth.
After 70 years under effective rule by the Soviet Republic the country underwent a democratic revolution in 1990. Its largely rural and nomadic population of 3 million is no match for the ultra-sophisticated lawyer-backed powerful international mining industry.
The army of economists, bankers, consultants and analysts that inevitably follows in the wake of big industry already complains loudly – on an international stage – about any seeming attempts to restrain the activities of the multinationals.
"The repeated delay of one of Mongolia's signature markets is sending mixed signals to foreign investors and has the potential to erode investor confidence in the resource-rich central Asian country," wrote one "expert" about the government's efforts to adjudicate a licensing dispute involving five countries.
For the average Mongolian it must be difficult to understand the urgency. It's not as though the stuff – coal, copper, gold, silver, uranium and molybdenum – is going to rot in the ground.
It's not as though a few years delay is going to make much difference to the Mongolians (Mogi: not much difference is a little too not much), who have sat with this "wealth" since the beginning of time and who not only have no concept of landownership (Mogi: not everyone is a herder) but who have traditionally believed it was wrong to dig into the earth.
Earlier that week I had spent a few days with a nomadic family in their ger on the steppes. It was mid-March and although not the depths of winter, the temperature was still inclined to plummet to minus 20ºC. With the exception of a solar panel, which was used to recharge a cellphone and keep a 15 watt light bulb going, not a huge amount had changed since the days of Genghis Khan 800 years earlier.
There was no running water, no electricity, the chief mode of transport was horseback and motorbike and the one-roomed ger was kept warm by a stove powered by dung from the family's herd of goats. Later in spring the family would dismantle the ger and take all of their belongings and goats to their summer site.
The mother told me she hoped the seasons would return to normal so they would not be forced, like the tens of thousands of other nomadic families, to move into town and try and eke out a living on a meagre government grant. She was angry with the "parliament members" because "they are greedy and just want to sell (mining) licences and get money for themselves".
MPP ELDERS APPEAL FOR MPP, MPRP UNITY BEFORE PRESIDENTIAL ELECTION
February 20 (InfoMongolia) On February 19, 2013, several senior members of Mongolian People's Party (MPP) delivered a request letter to their Head of MPP Ulziisaikhan ENKHTUVSHIN appealing to unite the MPP and MPRP (Mongolian People's Revolutionary Party) as one political force.
MPP members addressing their leaders demand to run jointly in the upcoming 2013 Presidential Election to be held in June, the Election Day will be determined within the upcoming Spring Plenary Session of the State Great Khural (Parliament) of Mongolia, moreover they believe to win in the election under MPP-MPRP coalition and further to unite these parties officially as one.
In fact, MPP leaders including Head U.Enkhtuvshin, MPP Secretary General G.Zandanshatar, Secretary D.Tsogtbaatar and other members conducted a Friendship Meeting - Zolgokh ceremony to exchange greetings and show respect to senior members of the MPRP in Independence Palace on February 13, 2013.
Nevertheless, the letter states:
"Because of some irresponsible politicians the MPRP has been divided into two political parties, which was a wistful fact that caused to weaken neither the MPP nor MPRP and it was proven on real life. On the other hand, Democratic Party (DP) is making state responsible decisions by its own solely, besides acting to "revenge" such as replacing all potential authorities at all levels that causes to hinder state works.
In this case, the only way to solve is to unite the MPP and MPRP. Hence, let's tie the broken amity and we are appealing to all members of both forces to be responsible and re-unite the Party."
MPP-MPRP
Historically, MPP was formed in 1921 but was renamed under MPRP in 1924. After several decades of its existence, Head of MPRP S.Batbold (former Prime Minister and incumbent Parliamentarian for 2012-2016) initiated to obtain former name of MPP, however this decision was disagreed by ex-President N.Enkhbayar, despites within the XXVI Great Assembly Meeting of the MPRP it was resolved to change the Party's name into MPP held on November 04-08, 2010, explaining that the MPRP name contradicts with its ideology.
This event was a reason to split the Party into two flanks, where ex-President N.Enkhbayar with his followers formed a new political Party, but under just removed MPRP and registered MRPP as a new political force at the Supreme Court of Mongolia effective since 2011.
CASHMERE MANUFACTURERS ARE SEEKING SUPPORTS FROM THE GOVERNMENT
February 21 (InfoMongolia) On February 20, 2013, the Speaker of the State Great Khural (Parliament) of Mongolia Zandaakhuu ENKHBOLD visited the national biggest and leading cashmere manufacturers of "Gobi" Corporation and "Buyan" LLC to get familiarized with current activities of the companies.
At first Speaker Z.Enkhbold was welcomed by President and CEO of "Gobi" Corporation Ts.Baatarsaikhan, who introduced the company's daily activities, noted, "Our factory manufactures high quality and luxury 100% cashmere and camel wool products. By annual average estimation, we produce 800,000 knitted and woven items, 25,000 sewing products and 350,000 m2 textile for local and foreign markets.
Our products under "GOBI - Made in Mongolia" tag are being sold at stores of New York, Tokyo, London, Paris, Berlin, Hamburg, Brussels, Moscow and Seoul cities.
However we work profitably, but if the Government to show some support, we would increase the annual volume twice".
Following visiting the "Buyan" LLC, Director of the Company B.Jargalsaikhan introduced, "Our Company is capable to employ 3,000 manpower, but currently 500 employees are working per shift. If Mongolia to develop its cashmere industry, over 40,000 people would get a new job and paid a 300-500 thousand MNT salary per month.
In recent 20 years, the Government has not invested any money into this industry, instead has been taking taxes. Now this sector is facing with difficulties, whereas all raw materials are being exported to China without any taxes and nearly all cashmere washing factories are closed today. Thereby, we are requesting to support the cashmere manufacturers, the only sector in light industry that exports its products, moreover to increase the cashmere tax, particularly make taxable on export of raw materials and annul the export tax on end-products within the upcoming plenary session meeting of the Parliament. In this case, income would definitely increase into Mongolian budget, besides many people would be provided with new jobs".
CHAMBER OF COMMERCE SEMINAR: "CHALLENGES FACING FOREIGN INVESTORS AND WAYS TO SOLVE OUT"
February 21 (InfoMongolia) On March 01, 2013, Mongolian National Chamber of Commerce and Industry (MNCCI) is organizing a Consultative Seminar themed "Challenges Facing Foreign Investors and Ways to Solve Out".
The Seminar is aimed to introduce, to exchange and give a set of comprehensive information regarding the state policy on foreign investments its legal environment and current implementations, moreover to protect foreign investors' interests and discuss concurrent problems.
At the event affiliated representatives from Ministries and Agencies are to deliver introductions and resident Ambassadors, foreign investors and entrepreneurs are also planned to take part, said organizers.
Belarus PM Myasnikovich invited to visit Ulan Bator (Mogi: see petition at top)
MINSK, 19 February (BelTA) – Mongolia Premier Norovyn Altankhuyag has invited Belarusian Prime Minister Mikhail Myasnikovich to visit Ulan Bator, BelTA learnt from the Belarusian embassy in China and Mongolia on concurrent.
On 15 February the Mongolian PM signed an official invitation for Belarusian head of state Mikhail Myasnikovich to pay a visit to Mongolia, the diplomatic mission informed with reference to the Foreign Ministry of Mongolia. Representatives of the Belarusian embassy in China visited Mongolia to discuss the program of the forthcoming visit. In particular, the program will envisage the signing of bilateral documents on cooperation and mutual assistance in customs procedures, cooperation in education, science and technologies. The two sides are also gearing up to sign agreements on free-visa trips and air communications.
While in Ulan Bator, the Belarusian diplomats held meetings in the Ministry of Industry and Agriculture and discussed Molgolia's proposals on the program of a visit of Mongolian Minister of Industry and Agriculture Khaltmaa Battulga to Belarus slated for March-April 2013.
Public smoking ban taking effect March 1
February 20 (news.mn) The Tobacco Control law that prohibits smoking in public places will become operational by March 1st.
The State Chief Inspector of the State Specialized Inspection Agency, Ch.Tumenkhuu, gave some details about the smoke-free rules and the possible punishments for law breakers.
-Which public places will smoking be prohibited in according to the law on tobacco control that will be implemented by March 1st?
-The law on Tobacco Control was passed last October. The law will be enforced starting on March 1st. The law has some new amendments regarding smoke-free areas which are clearly stated and the punishments for law breakers will be tightened.
According the law on Tobacco Control it is prohibit to smoke in indoor workplaces, indoor public places such as bars, restaurants, cafes, public foyer in hotels, offices and within 500 meter areas of schools and outdoors in forested areas.
The law on Tobacco Control regulates smoking restrictions on airliners, public transport, trains, in gas station, public stations, tunnels, public eateries, public service offices, state agencies, kindergartens, every schools, universities and dorms, apartment entry ways and elevators.
-What punishments will be imposed to law breaker?
-The law stipulates that a citizen who violated the law by smoke in a smoke-free area will be given a 50,000 MNT fine. If the law breaker is a state agent the imposed fines will be worth10-25 times the national minimum wage, a legal party will be imposed fines worth 25-50 times the national minimum wage.
-The law allowed smoking in bars and restaurants before the new amendments. Is this correct?
-Previously the law allowed there to be a smoking room in public eateries with more than two halls. It required that there be two different rooms for smokers and non-smokers. But the new law prohibits this.
-From what age is smoking banned and what are punishments for law breaking teenagers?
-There have been some changes in the law. Smoking is now prohibited for anyone who is under the age of 21, instead 18, as we acknowledge some bad habits. If a teenager is caught smoking in a prohibited area their parents will be charged the 50,000 MNT fine.
-What organizations will monitor the law when it is implemented?
-The Governor of the Administration, the State Specialized Inspection Agency, the Police and authorized officials will monitor the law implementation under the direction of the Government.
Authorities of organizations, companies and entities will take measures for controlling and monitoring themselves according to the law. A public control is also available.
South Sudan names secondary school after the President of Mongolia
February 21 (UB Post) During Ts.Elbegdorj's visit, a secondary school located in Rumbek, South Sudan was announced to be named after Mongolia's Head of State. On February 15, 2013, the President of Mongolia and Commander-in-Chief of the Armed Forces of Mongolia, Ts.Elbegdorj, arrived in Juba International Airport for an official visit to South Sudan. With his visit, President Ts.Elbegdorj becomes the first Asian leader to visit his country's peacekeeping forces in the Republic of South Sudan, a new country that has become independent since 2011.
The official statement released by the governor of Rumbek stated, "Mongolia is the one of the few countries who led the democratic revolution in a peaceful way and President Ts.Elbegdorj is one of the prominent leaders of this revolution. Ts.Elbegdorj is the first President among the other countries who visited the troops they sent to South Sudan. To accordingly symbolise the friendly relationship between Mongolia and South Sudan, the governor of Rumbek County is announcing to name the secondary school after the President of Mongolia, Ts.Elbegdorj."
Moreover, the governor of the county expressed interest in having the schoolchildren of the newly named school take lessons about Mongolia's rich history, tradition, culture, and sports from the Mongolian peacekeepers.
President Ts.Elbegdorj was welcomed by his counterpart, Salva Kiir Mayardit, President of the Republic of South Sudan, the UN Special Envoy to South Sudan Hilde F. Johnson, and other officials.
"I am a military officer, I know the challenges of a soldier's life and I'm coming here to give you motivation and encouragement," said President Ts.Elbegdorj while addressing the Mongolian soldiers at United Nations Mission in the Republic of South Sudan (UNMISS).
Some 850 Mongolian soldiers and seven staff officers are currently serving in South Sudan, making up a sixth of the country's total peacekeeping troops. Mongolia has been contributing to UN peacekeeping operations for more than 10 years, sending 10,000 peacekeepers to various countries worldwide.
Mogi: a nice bit of history piece from 1991
The Secrets of the Steppe: Communist Persecution in Mongolia Under Marshal Choibalsan
22 October 1991 (BBC) Documentary investigating the evidence of persecution and massacre of over 100,000 people in Mongolia during the 1930s and 1940s under the leadership of the Mongolian communist dictator Marshal Choibalsan, a protege of Stalin. Most of these were Buddhist lamas, and the film includes eye-witness reports of the killings, shots of some of the graves and skeletons found, and the present slow relaxation of religious freedom and the return of some monastaries and lamas.
Camel Polo 2013 Winter Festival, March 2013
February 22 (news.mn) The Camel Polo 2013 winter festival will run at the Chinggis Khan statue complex, Tsonjin Boldog, on 9th and 10th March.
The Mongolian Camel Polo, Sport Competition and Travel Association NGO, the Minister of Industry and Agriculture and the Minister of Culture, Sport and Travel will organize the winter festival.
Competitions such as this are aimed at improving the protection of the endangered Mongolian Bactrian camel by increasing the number of camels and by bringing them to public attention. The Mongolian Camel Polo Association wants to make the camel polo competition a popular event, by developing winter sport competitions in order to hold winter sport festivals for tourists. During this Camel Polo Festival an exhibition of national camel wool and milk products, cultural performances and a fashion show will be held.
The prize fund for the Camel Polo 2013 winter festival is 20 million MNT.
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"Mogi" Munkhdul Badral
Cover Mongolia
Email: mogi@covermongolia.mn
Mobile: +976 9999 6779
Skype: mogibb
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