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MINISTERS: OT SHAREHOLDERS' MEETING TO RECONVENE AFTER TSAGAAN SAR
February 7 (InfoMongolia) Today on February 07, at 02:45pm Minister for Mining D.Gankhuyag opened an official statement regarding the Oyu Tolgoi LLC shareholders' meeting started yesterday, where Minister for Economic Development N.Batbayar, Minister for Finance Ch.Ulaan, and Minister for Nature, Environment and Green Development S.Oyun were present and gave brief summary respectively.
On February 06, 2013, Minister for Economic Development N.Batbayar announced the Oyu Tolgoi LLC shareholders' meeting would be organized in the Ministry of Mining at 02:00pm, but due to the today's (February 07, 2013) an official statement the shareholders' meeting was held between the Government of Mongolia and representatives of Rio Tinto Group in the State Special Service "Ikh Tenger" Complex in Ulaanbaatar at 04:00pm yesterday, where representing the Government of Mongolia were Minister for Mining D.Gankhuyag, Minister for Economic Development N.Batbayar, Minister for Finance Ch.Ulaan, Minister for Nature, Environment and Green Development S.Oyun, Executive Director for "Erdenes Oyu Tolgoi" LLC Ts.Sedvanchig and the Rio Tinto Group was represented by Cameron McRae, President and CEO of Oyu Tolgoi LLC and other officials.
Minister for Mining D.Gankhuyag noted, "The Government of Mongolia and a working group submitted by the State Great Khural (Parliament) have worked on the disputed matter over 3 months. At the initiation of the Government of Mongolia the shareholders' meeting has started yesterday, where parties have exchanged mutual views regarding the Oyu Tolgoi Investment Agreement.
On behalf of Mongolia, we have proposed 6 main issues and 13 questions to the Oyu Tolgoi Board of Members to discuss within the meeting.
Oyu Tolgoi LLC proposed only 2 issues - when to get back the invested 250 million USD prepayment, and when to finance the next investments.
Nevertheless, we have requested to give an explanation why the initial investments had been increased by 2 billion USD, after we would discuss the next financial issues. Besides, parties have agreed to resolve the issues based on scientific research and narrow estimations. The only point we demand is to follow Mongolia's regulations and its laws, in order to accomplish this project successfully, we need to proceed openly.
Though, Mongolia and Rio Tinto Group should collaborate by the means of mutual understandings, and the started shareholders' meeting will be continuing following the Tsagaan Sar Holiday".
Following Minister for Economic Development N.Batbayar continued the summary of the meeting noting, "Shareholders of the Oyu Tolgoi LLC were worried much by the statement issued during an open discussion held at the Parliament on Friday, February 01, 2013. Where it was commented that the Government of Mongolia and its public are misunderstanding the "nice" development, moreover the Government should apologize at the beginning of the expected meeting, then we (shareholders) can continue. But we replied that Mongolia is a state of nation with Parliamentary republic status. People of Mongolia do love and respect their land. If you do understand this point, you will be allowed to operate on the territory of Mongolia. The Oyu Tolgoi project must be agreed by the interests of Mongolians, hence some of the Oyu Tolgoi Investment Agreement's articles must be changed".
Next, Minister for Finance Ch.Ulaan stressed, "As of Minister, I would say Mongolia will follow its Law and the Ministry of Finance proposed several times to match the calculation with the Company, but yet not accomplished. Oyu Tolgoi LLC has requested from the Government of Mongolia the advanced paid 250 million USD of investment, due to the Agreement the money had to be attached into the 2013 State Budget, but not set, hence we are able to repay the 250 million USD from 2014, besides Oyu Tolgoi LLC did not pay a tax in 2012. We are demanding the Company to oblige the regulations of Mongolia".
Then, Minister for Nature, Environment and Green Development S.Oyun commented that a monitoring pit in the territory of Oyu Tolgoi site will be installed; besides that Oyu Tolgoi is implementing the Health, Safety and Environmental Policy.
Mongolian Parliament on Oyu Tolgoi – Business-Mongolia.com, February 5
Mongolian president on Oyu Tolgoi matters - Business-Mongolia.com, February 5
Official statement of Oyu Tolgoi LLC in relation to information, data and facts related to Oyu Tolgoi discussed during open session of the State Great Khural dated 1 February, 2013
5 February, 2013
During the 1 Feb, 2013 session, many issues were raised that Oyu Tolgoi has previously addressed through numerous meetings with government and ministry officials and staff. The fact that these issues are still being raised underscores the importance of the company's ongoing efforts to communicate fully with the government and citizens of Mongolia. Oyu Tolgoi is committed to being transparent and open about its operations and actions. This document provides responses to the major issues raised during the session.
ABOUT INITIAL INVESTMENT OF OYU TOLGOI, FINANCING OF SECOND STAGE OF THE PROJECT, STAKE OWNERSHIP OF GOVERNMENT OF MONGOLIA, ITS INTEREST CONDITION, FINANCIAL TRANSPARENCY...
Oyu Tolgoi Phase 1 Capital
Oyu Tolgoi, through Erdenes Oyu Tolgoi LLC, has always openly communicated with the Government of Mongolia and the Oyu Tolgoi Board of Directors on important topics related to the project, ranging from initial investment to the financing plan for underground development and estimates of dividends. Quarterly financial reports are also sent to the General Taxation Authority and the Ministry of Finance.
There is some confusion regarding the cost incurred to build the mine, with various commentators quoting different numbers. The table below compares the original capital estimate in the Feasibility Study approved in 2010 against total actual expenditure to the end of 2012.
Oyu Tolgoi Capital Expenditure Comparatives ($USbn)
| 2010 Approved Feasibility Study | Oyu Tolgoi LLC Capital as at 31 December 2012 |
Initial Phase 1 Capital | ||
Sunk Costs (pre IA) | 1.1 | 1.1 |
Phase 1 (post IA) | 4.1 | 4.7 |
Subtotal | 5.2 | 5.8 |
Indirect Capital Costs | | |
VAT and Customs | 0.4 | 0.6 |
Management Fee | 0.1 | 0.2 |
Total Phase 1 Development | 5.7 | 6.6 |
As at 31 December, 2012 Oyu Tolgoi's financial statements reported total assets of $7.4 billion comprising $6.6 billion of Phase 1 Development costs (shown above) plus interest costs on loans ($0.5bn), early Phase 2 capital ($0.2bn) and further exploration ($0.1bn).
How is development of Oyu Tolgoi financed?
Mongolia owns the minerals in the ground and leases the rights to extract those minerals to companies who pay the government for the leases. The companies then use their own funds to construct and operate the mines.
In the case of Oyu Tolgoi, the government chose to buy an equity stake of 34 percent in the company. To fund its 34 percent Erdenes Oyu Tolgoi chose to borrow money from the other shareholders. Initially the interest rate agreed to between the shareholders was "Consumer Price Index + 9.9%". However, investors reduced this to "LIBOR (London Interbank Offered Rate) + 6.5%". This way, investors were able to reduce the loan interest rate by more than 3 percent – well below their own cost of capital.
Erdenes Oyu Tolgoi is not required to repay it's loan unless the business is profitable. If the project, for any reason, fails to earn high enough returns to repay the loan, then it will never be repaid and there will be no obligation on the Government of Mongolia. In short international investors who have provided all of the funding absorb the financial risk. Finally the opportunity for Erdenes Oyu Tolgoi LLC to obtain a low interest loan from other sources to finance its 34 percent financing remains open according to the Investment Agreement.
Project Financing
Currently, investors are seeking to raise project finance from international banking and financial institutions to enable the next stage of development. Project financing would lower the interest rate the Government is paying with the opportunity to bring forward shareholder dividends. Project financing is expected to decrease the total cost of the business to all shareholders.
ISSUES RELATED TO MANAGEMENT SERVICE FEE TO DEVELOP AND MANAGE OYU TOLGOI PROJECT AND MONGOLIAN REPRESENTATION IN OYU TOLGOI
Rio Tinto provides to Oyu Tolgoi highly valuable skills, systems and processes. It also enables Oyu Tolgoi to benefit from Rio Tinto's experience, reputation and goodwill in the international marketplace.
Management fees of this type are commonly used in mining joint ventures around the world. The fees compensate providers of services that enable the mine to operate successfully.
The Shareholders Agreement specifies that the Management Service Fee be calculated as:
Ø 3 percent of all capital and operating costs incurred prior to the commencement of production
Ø 6 percent of all capital and operating costs incurred after the commencement of production
There is a lot of variation in fee structures at other mining operations. Fees are commonly calculated as 1-3 percent of revenue; however, cost-based fees are also frequently applied. Revenue-based fees have the disadvantage of rising when the price of minerals rises. They also often cover only marketing services and not the full range of services being provided by Rio Tinto, such as the technical expertise that comes from being the world's foremost underground miner.
When Oyu Tolgoi reaches commercial production, management fee payments are expected to be in the range of $60-80 million USD per year. While capital cost increases also increase management fee payments, Rio Tinto has no incentive to increase costs. Loss of dividends and higher financing costs erode a far greater value for Rio Tinto than it receives in increased management service fee payments
The Board of Oyu Tolgoi LLC consists of 9 members, led by a Mongolian Chairman. Three members represent Erdenes Oyu Tolgoi LLC, the government shareholder; three members represent Turquoise Hill Resources, and three members represent Rio Tinto. Each board member has one voting right; all have equal rights.
At Oyu Tolgoi, we believe in value-led leadership. Leading from our values means that we lead from the core of who we are. Our goal is to help grow the Mongolian economy and improve livelihoods by rapidly developing a world-class business that is profitable, safe and sustainable. Oyu Tolgoi's current executive committee is comprised of 12 accomplished experts across multiple disciplines within the mining industry from several countries, including Mongolia, UK, US, Australia, and Japan. Oyu Tolgoi also has in place a comprehensive program of skills training and succession planning to ensure Mongolians are able to assume very senior management roles.
ISSUES RELATED TO TAXES AND FEES PAID BY OYU TOLGOI LLC TO GOVERNMENT OF MONGOLIA, PROCUREMENT PROCESS AND SUPPLIER SELECTION PROCESS OF OYU TOLGOI COMPANY...
Oyu Tolgoi was the country's sixth biggest taxpayer in 2011, according to the General Tax Office. This was before the mine was even operational. From January 2010 through November 2012, Oyu Tolgoi had paid $803 million USD in taxes and payments to the Government. Like all responsible companies, Oyu Tolgoi submits its tax records to the Ministry of Finance and the Mongolian Tax Authority (MTA).
Between 2010 and 2011, Oyu Tolgoi LLC loaned $250 million USD to Government of Mongolia, at the Government's request. Part of this was a $150 million USD loan in the form of a tax pre-payment, with repayment coming in tax credits. Under the Prepayment Agreement, Oyu Tolgoi was entitled to use these tax credits from 2012.
Some people incorrectly accuse Oyu Tolgoi of not paying its taxes.
In fact, in 2012 Oyu Tolgoi paid a total of $280 million in national and local taxes and other government fees. The taxes paid included:
Ø $33.3 million to the MTA in taxes and payments.
Ø $94.6 million to the Umnugobi Tax and Customs authority.
Ø $122.5 million in VAT paid via suppliers.
Ø $29.7 million in social security and other fees.
Oyu Tolgoi is fully transparent in the manner in which it conducts its business. Its financial reporting meets both Mongolian and international standards for a private company.
Ø Annual reports are independently audited in compliance with clause 3.24 of the Investment Agreement.
Ø The government has seen Oyu Tolgoi's audited accounts for every year since it commenced operations (2010 and 2011) and it has seen the accounts for the first quarter of 2012.
Ø Oyu Tolgoi reports on a quarterly basis, not just to the government but also to the Board of Oyu Tolgoi and the shareholders (Turquoise Hill Resources, Rio Tinto and Erdenes MGL).
During Phase I, Oyu Tolgoi is investing more than $5.8 billion USD of direct capital. Throughout this process, Mongolian companies are contributing to Oyu Tolgoi as suppliers of goods and services with further benefits flowing through the economy.
Oyu Tolgoi Procurement activities are governed by transparent Procurement policies and procedures, which ensure our alignment with world-class procurement practices and protocols. Our procurement policies are accessible to all. (http://ot.mn/mn/procurement)
Oyu Tolgoi's Procurement function seeks to engage with Mongolian national companies on a preferential basis through its national procurement policies.
Ø From 2010 to 2012, Oyu Tolgoi spent more than $1.1 billion on procurement with Mongolian national suppliers.
Ø In 2012 alone, 67 percent of the total number of our businesses and suppliers were Mongolian.
Ø Through the "Local Business Economic Development" program, Oyu Tolgoi has created a "micro-lending" facility through Khan and XAC banks to provide loans for small businesses in South Gobi. Some 53 local businesses have benefitted from this 1.5bn MNT ($1.2m) fund.
Further benefits to the Mongolian economy are evident when you consider indirect benefits and the multiplier effect.
ISSUES RELATED TO WORKFORCE, SALARY PAYMENT, SOCIAL ISSUES OF PERSONNEL: ABOUT MONGOLIAN AND EXPATRIATE WORK FORCE RATIO OF OYU TOLGOI LLC, SALARY DIFFERENCE OF MONGOLIAN AND FOREIGN WORKERS
Building Oyu Tolgoi has been a joint effort between Mongolians and workers from 44 nations. At the end of 2012, the Oyu Tolgoi project directly employed around 13,000 people, 85 percent of whom were Mongolians. During the operational phase, more than 90 percent of Oyu Tolgoi total work force will be Mongolians.
Both foreign and Mongolian workers are paid commensurate with prevailing market conditions in their home countries. This is standard across the world. Oyu Tolgoi employs foreign experts in the short term to transfer their knowledge and skills to Mongolians for the long term.
Oyu Tolgoi national salary scales are annually benchmarked by independent analysts against other salaries in the mining, information technology and banking sectors – and Oyu Tolgoi salaries are consistently found to be higher than the norm, even when compared to these high-paying industries.
More than half the departments in Oyu Tolgoi are 100 percent Mongolian. Mongolians hold leadership positions at every level of the company, from the Board to the "shop floor."
Oyu Tolgoi is providing the biggest-ever investment in education in Mongolia; investing $126 million USD in the vocational education system over 5 years. Under this investment, Oyu Tolgoi is building three new vocational education centers and upgrading four existing vocational education center in seven towns and cities of Mongolia. It is training 3,300 workers in 21 aimags and providing scholarships for hundreds of students to study in national and international universities.
CONTRIBUTION TO DEVELOPMENT OF THE SOUTH GOBI: INFRASTRUCTURE IMPROVEMENTS, BUILDING A TOWN, ROADS AND IMPROVEMENTS
Oyu Tolgoi has made a number of mine-related infrastructure improvements:
Ø Built an international-standard airport capable of accommodating a Boeing 737 or C-130 airplanes and has a passenger service building, air traffic control tower, full-service fire station and terminal that can serve up to 240 passengers per hour.
Ø Is building a 100km paved road from Oyu Tolgoi to the Chinese border and a 10.3km road in Khanbogd, which is more than 50 percent completed.
Ø Developed a water supply a place called Gunii Hooloi, a deep-water aquifer about 70km away from the project site. The use of this water will not affect the drinking water of nearby herders. The Gunii Hooloi water aquifer is not suitable for human or animal consumption as it is fossilized, oceanic water buried deep in the ground, full of salt and solids. The GoM issued permits to use only 20 percent of the total water reserve of the aquifer during the mine project period. Underneath the surface is a steel pipeline, buried 3 meters, that runs parallel to the road. This road goes from Oyu Tolgoi to the Gunii Hooloi aquifer. By burying the water pipeline, there will are no effects on animal movements or the environment.
Oyu Tolgoi also has made a number of improvements in the South Gobi region as much of the company's business development activities are centered in this area:
Ø Nearly completed construction of a 35kW power line from the mine to Khanbogd, and already are supplying the town with 24-hour power. Investment will be 5.9bn MNT.
Ø Invested 1.68bn MNT in finding more water sources so the town has access to greater supplies of drinking water. This will continue in 2012 and the water sources will be connected to the soum centre. Oyu Tolgoi has pledged zero impact on quality and quantity of community water supplies.
Ø Constructed a Vocational Training Center, which opened in May 2012, with an investment of nearly 2bn MNT. The vocational training centre will accommodate 150 students.
Ø Building a technical Mining School of Excellence in Dalanzadgad, one of three schools that Oyu Tolgoi is building in Mongolia.
Ø These improvements are in addition to 30 billion MNT Oyu Tolgoi has spent to advance the social, economic and cultural development and preservation in Umnugobi aimag.
Some have asked by Oyu Tolgoi has not built a new town near the mine. Neither the original feasibility study for the mine nor the Investment Agreement have plans or commitments to build a new town or development of Khanbogd soum. This is not a budgeted expense under the feasibility study. However, Oyu Tolgoi will support Government of Mongolia to develop Khanbogd into a town that will support accomodations for Oyu Tolgoi's workforce.
Oyu Tolgoi cannot build a town on its own – in Mongolia, responsibility for urban planning, town administration and maintenance sits with the Government. Oyu Tolgoi would like to see a thriving community of Oyu Tolgoi and non-Oyu Tolgoi people, an entrepreneurial settlement and diversified economy that outlives mining. Oyu Tolgoi is committed to work with the government, community and private sectors to support the development of Khanbogd soum and, together, bring this vision to reality. The Government will need to plan adequate social services, including schools and hospitals, for Khanbogd town, the same way the government plans for any other town in Mongolia.
Oyu Tolgoi is paying close attention to urban planning issues. To build a sustainable town for the long term, significant effort needs to be put into planning before any construction begins. Oyu Tolgoi is working with government on a long-lasting master plan for Khanbogd. When this process is complete, and financing is obtained, partners can construct elements of the town.
Mongolia to grill Rio over Oyu Tolgoi costs-govt source
Feb 6 (Reuters) - Mongolia will press global miner Rio Tinto to explain a spike in costs at the huge Oyu Tolgoi copper and gold mine, a government source told Reuters, warning that it could threaten efforts to finance other projects in the country.
Oyu Tolgoi, 34 percent owned by Mongolia and controlled by Rio Tinto, produced its first concentrate last week and is on track to start supplying metal and paying royalties by June.
But the government, which is due to hold talks with Rio Tinto on Wednesday, is under pressure to plug a budget deficit and increase its share of the wealth.
"We would like to have some mechanism where we can control such cost increases. We do not know if they are justified," said the source, who requested anonymity and said that the cost of the first-phase of the mine was around $2 billion higher than originally stated in the project's feasibility study.
"We also want to know why our share of the revenues from the project has fallen so much, so at least we can understand it and explain it to the people," he said.
A statement issued on Oyu Tolgoi's website (www.ot.mn) late on Tuesday put the total capital required for the project's first phase at $6.6 billion, compared to $5.7 billion in the original 2010 feasibility study.
It said concerns about the costs of the project had already been addressed in a series of meetings between both sides.
"The fact that these issues are still being raised underscores the importance of our ongoing efforts to communicate fully with the government and citizens of Mongolia," Oyu Tolgoi chief executive Cameron McRae said in the statement.
A Rio Tinto spokesman declined further comment.
The government source said the increased costs would have a considerable impact on the long-term sustainability of Oyu Tolgoi, and on Mongolia's efforts to raise funds for other major projects, including the massive Tavan Tolgoi coal mine and a billion-dollar railway building programme.
"We cannot have major financial institutions investing in a project that is not sustainable," he said, adding that the higher costs meant Mongolia would not receive dividends from the project until 2033, far beyond the original schedule of 2019.
"Given that the project is financed by debt not equity, you can imagine the financial costs will be tremendous and have an impact on the project's revenues for the government," he said.
The investment agreement passed by Mongolia's parliament in 2009 granted 34 percent of Oyu Tolgoi to the Mongolian state and the other 66 percent to Canada's Ivanhoe Mines, now known as Turquoise Hill Resources and controlled by Rio Tinto.
The project cost was initially estimated at around $4 billion, roughly the same as Mongolia's gross domestic product in 2009, and was also expected to pave the way for other huge mining deals, including Tavan Tolgoi.
But Mongolia has struggled to find the capital required not only to build the mines but also the infrastructure required to get minerals to market.
Mongolia's elected politicians have also been under pressure from the public over the dominant role played by foreign investors in the development of its economy. Some parliamentarians have called for Mongolia's stake in the project to be raised. Rio Tinto has rejected calls for renegotiation.
The original deal allowed the Mongolian government to increase its stake once investment in Oyu Tolgoi had been recovered (Mogi: the signed agreement says after 30 years I believe). As the costs of the project increase, that period is likely to lengthen, the source said.
Mongolia was not currently seeking to renegotiate the initial investment agreement, but was also concerned about Rio's plans for the financing of the second phase of the project, which is eventually expected to produce 425,000 tonnes of copper and 460,000 ounces of gold a year once it goes into full operation, the source said.
Related:
Rio Unit Says Cost of Oyu Tolgoi Mine Jumps 16% to $6.6 Billion – Bloomberg, February 6
Rio Tinto's careful Mongolian courtship – Business Spectator, February 6
Rio Tinto to meet Mongolian government on tax, investment issues – Xinhua, February 6
President jumps on nationalist bandwagon – Economist Intelligence Unit, February 6:
Impact on the forecast
Our next monthly outlook will place a greater emphasis on the deterioration of the policy environment. However, given that the Oyu Tolgoi project remains on track for now, we are unlikely to make any related change to our economic growth forecast.
Mongolia Debt Costs Rise as Government Battles Rio Tinto
February 6 (Bloomberg) The yield on Mongolia's global sovereign notes rose to the highest since the debt was sold in November as the government battles for control over a mining contract with Rio Tinto Group, the nation's biggest investor.
The yield on the 5.125 percent dollar-denominated notes due 2022 climbed 20 basis points this month to 5.85 percent, data compiled by Bloomberg show. The rate has jumped 41 basis points, or 0.41 percentage point, in 2013.
President Tsakhia Elbegdorj last week called for Mongolia to have greater control of the Rio-operated Oyu Tolgoi copper and gold project, which will account for almost a third of the nation's economy once in full production. Rio Tinto has rebuffed at least two attempts in the past 18 months by Mongolia to redraw the investment agreement, which gives the world's second- largest miner a 64 percent stake in the mine, with the government holding the rest. The North Asian nation is due to hold presidential elections in June.
"The bonds are reflecting investors' shrinking confidence in the direction of the current administration," Travis Hamilton, founder of Singapore-based Khan Investment Management Ltd., which focuses on Mongolian assets, said in a telephone interview. "There appears to be no real cohesion, the leadership is questionable and there's a huge amount of political uncertainty" ahead of this year's election, he said.
Dollar Bonds
Mongolia raised about $1.5 billion from the November debt sale that was managed by Bank of America Corp., Deutsche Bank AG, HSBC Holdings Plc and JPMorgan Chase & Co. The notes are rated BB- by Standard & Poor's, or three steps below investment grade. The yield on state-controlled Development Bank of Mongolia LLC's 5.75 percent bonds due 2017 increased 26 basis points this month to 5.13 percent.
Since the bond sales, Mongolia has introduced a draft mining law that would more strictly regulate the industry and increase pressure on Rio Tinto for more domestic control on the Oyu Tolgoi mine. In addition, the biggest state-owned coal miner Erdenes Tavan Tolgoi has let go of two foreign top executives and stopped contracted deliveries to China, citing a lack of funds.
The value of the bonds has dropped by $90 million since the issuance, which could push up borrowing costs for Mongolia in the future, said Dale Choi, an Ulan Bator-based associate with private equity investment firm Origo Partners MGL.
"It's time for Mongolia to have Mongolian representation on the management team," President Elbegdorj said at a parliament session on Feb. 1, according to his website. "It's important that the government takes the Oyu Tolgoi matter into its own hands."
'Rude Surprise'
Oyu Tolgoi will hold a shareholder meeting in Mongolia today, where it expects to address concerns held by the government. Rio is considering a temporary halt to work to protest government demands for a greater share of profit, two people familiar with the plans said last week.
"It's going to be extremely important to see the outcome of today's meeting with Rio Tinto on Oyu Tolgoi," said Khan Investment's Hamilton, who doesn't own Mongolia's 2022 debt. Favorable pricing at its last bond sale "gave the government the impression that they could walk on water. But I think they'll get a rude surprise the next time they go to the market unless they get their act together."
Prosecutors seize Kincora, Gobi Coal & Energy licenses in relation to Batkhuyag case
February 7 (Cover Mongolia) A list was revealed in local media, of 107 licenses seized by authorities, that were issued illegally by the convicted former head of Mineral Resources Authority of Mongolia, D. Batkhuyag. A little research showed two of them were licenses acquired by Kincora Copper (TSX:KCC) from Forbes & Manhattan Inc.'s Aberdeen International (TSX:AAB), located adjacent to its Bronze Fox project in Umnugovi. One other license that the Mongolian article states, is owned by Origo Partners (LON:OPP) invested Gobi Coal & Energy, located in Shinejinst, Bayankhongor.
The list of 107:
14801Х, 14805Х, 14829Х, 14830Х, 14831Х, 14833Х, 14855Х, 14893Х, 14896Х, 14291Х, 14295Х, 14927Х, 15011Х, 15012Х, 15024Х, 15047Х, 15049Х, 15057Х, 15060Х, 15075Х, 15076Х (Kincora), 15086Х, 15087Х, 15092Х, 15093Х, 15095Х, 15097Х, 15107Х, 15113Х, 15126Х, 15128Х, 15130Х, 15131Х, 15133Х, 15137Х, 15138Х, 15139Х, 15141Х, 15142Х, 15145Х, 15154Х, 15157Х, 15158Х, 15165Х, 15168Х, 15188Х, 15192Х, 15195Х, 15203Х, 15212Х, 15215Х, 15218Х, 15221Х, 15223Х, 15232Х, 15240Х, 15246Х, 15247Х, 15252Х, 15253Х, 15254Х, 15258Х, 15259Х, 15262Х, 15263Х, 15295Х, 15316Х, 15328Х, 15329Х, 15343Х, 15347Х, 15349Х, 15351Х, 15355Х, 15360Х, 15363Х, 15364Х, 15367Х, 15369Х, 15376Х, 15389Х, 15402Х, 15408Х, 15416Х, 15418Х, 15423Х, 15425Х, 15437Х, 15452Х, 15474Х, 15484Х, 15494Х, 15514Х, 15516Х, 15517Х, 15525Х, 15529Х, 15530Х, 15541Х, 15546Х (Gobi Coal & Energy), 15547Х, 15549Х, 15557Х, 15568Х, 15578Х, 15630А, 5261Х.
The licenses involved in the SouthGobi Resources (TSX:SGQ) subsidiary SouthGobi Sands' case, 9442Х, 5259Х, 5277Х, and 12388Х are not included in the above list but are believed to be handled separately. The story goes that 5 of their licenses were to expire but 4 of them were allegedly issued back illegally, while 5261Х, included in the above 107, was issued to Zelem LLC, owned by a friend of Batkhuyag.
SouthGobi Sands case might go to Prosecutors Office, President being questioned
February 5 (news.mn) A case involving the controversial licenses of SouthGobi Sands, a foreign Mining company, might be delivered to the Ulaanbaatar Prosecutor`s Office as the investigation is in final stage according to a source close to the matter.
Former Chairman of the Mineral Resources Authority, D.Batkhuyag and head of the Office for Geological and Mining Cadastre of the Mineral Resources Authority, N.Davaatsogt, were sentenced by the primary court to 5.1 to 6.6 years in prison for renewing suspended mining licenses that were transferred to a private company controlled by friends and issuing numerous mining licenses illegally.
D.Batkhuyag was convicted for renewing four of suspended licenses 9442Х, 5259Х, 5277Х, 12388Х to SouthGobi Sands taking bribery and being involved with corruption. The Anti-Corruption Authority has been investigating SouthGobi Sands since last summer.
A Public Relations official, P.Bilguun said "The Anti-Corruption Authority is questioning US citizen Justin Kapla, the President and Executive Director of SouthGobi Sands LLC as a suspect in the case. Currently Justin Kapla is barred from leaving Mongolia due to the investigation being in progress. The Authority also questioned Sara Armstrong, the Chief Legal Counsel of SouthGobi Sands for the case and remitted the case.
Prophecy Receives Non-Binding Project Financing Indicative Term Sheet and Letter of Intent on a Project Equity Investment
VANCOUVER, BRITISH COLUMBIA--(Marketwire - Feb. 6, 2013) - Prophecy Coal Corp. ("Prophecy" or the "Company") (TSX:PCY)(OTCQX:PRPCF)(FRANKFURT:1P2) is pleased to announce that it has received indicative terms and conditions issued by a major international bank, (the "Potential Lender"), for a proposed loan (the "Loan") in favour of Prophecy Coal Corp. ("Borrower") for the purpose of funding the development and construction of the Chandgana Tal 4X150MW Power Plant Project in Khentii Province, Mongolia (the "Project").
It is proposed that the proceeds of the Loan will be used to finance up to 85% of the total value of the commercial contract which to be signed between the appointed engineering, procurement and construction ("EPC") contractor and the Borrower. The Loan would be repaid in 24 consecutive instalments for a repayment period of up to 12 years at a fixed premium to LIBOR.
Conditions precedent to the proposed Loan include, but are not limited to the following:
· receipt of all authorizations from all relevant authorities in Mongolia and China; (Mogi: China? Must be a Chinese bank)
· approval from an export credit agency and by the credit committee of the Potential Lender; (Mogi: China Exim Bank?)
· completion of due diligence and preparation of required documentation each to the satisfaction of the Potential Lender; and
· the execution of all relevant project and loan documentation.
Separately, Prophecy has received a non-binding letter of intent respecting an equity investment (the "Investment") of up to 20% in the Project. The letter of intent was received from a qualified EPC contractor (the "Potential Investor") who is on Prophecy's final list of EPC bidders and is the same EPC contractor referred to in the indicative terms and conditions issued by the Prospective Lender. It is proposed that the Investment would be subject to the receipt of a guarantee on the Project by the Mongolian Government, a signed EPC contract with the Investor, satisfactory execution of a power purchase agreement (the "PPA"), completion of the remaining 80% of the Project financing, and receipt of all necessary project clearances and approvals.
Further to the press release dated November 14, the Ministry of Energy of Mongolia has issued the letter of support to Prophecy's proposed JV partner ("JV Partner"), one of world's largest thermal power generation groups. Prophecy and JV Partner are advancing the due diligence towards a definitive investment agreement.
Prophecy, led by Chairman John Lee, continues to engage closely with all relevant Mongolian government agencies and Ministries to complete the PPA timely. The Company likes to take the opportunity to thank all Mongolian government officials and working group members for their time and effort dedicated to the Project. The proposed construction starting date is 2nd quarter of 2013 with a signed PPA.
The Company cautions that Project Financing can have a very long lead time and there is no assurance that the Company and the Project can pass all the due diligence requirements to secure the necessary funding.
Ferro Strengthens Management Team and Board of Directors
TORONTO, ONTARIO--(Marketwire - Feb. 5, 2013) - Ferro Iron Ore Corp. (TSX VENTURE:RRO) reports the appointment of Paul Bozoki as Chief Financial Officer, Neil Said as Corporate Secretary and the addition of George Faught, Chirvani Abdoullaev and Alastair Neill to the company's Board of Directors, effective immediately.
Mr. Bozoki is a Chartered Accountant, holds an MBA and has over fifteen years of accounting, tax and corporate finance experience. Since October 2010, Mr. Bozoki has served as Chief Financial Officer of Black Iron Inc., a TSX-listed junior resource company developing an iron ore project in Ukraine. In addition, from March 1, 2012, Mr. Bozoki has served as Chief Financial Officer of Cap-Ex Ventures Ltd., a TSX Venture Exchange listed junior resource company developing an iron ore project near Schefferville, Quebec. Mr. Bozoki began his career at Ernst & Young LLP where he spent six years auditing clients predominately in the mining industry.
Mr. Said is a corporate securities lawyer who works as a legal consultant to various TSX and TSX Venture listed companies in the mining and oil & gas industries. He previously worked as a securities lawyer at a large Toronto corporate law firm, where he worked on a variety of corporate and commercial transactions. Mr. Said obtained a Juris Doctor from the Faculty of Law at the University of Toronto and he received a Bachelor of Business Administration (Honours) with a minor in Economics from Wilfrid Laurier University.
The appointments of Mr. Bozoki and Mr. Said follow the resignation of Mr. Mark Lotz as Chief Financial Officer and Corporate Secretary.
George Faught is a chartered accountant with over 25 years of senior management experience. He currently serves as a director of a number of public companies in the resource sector and has worked as an officer of publicly traded companies in the natural resources sector including Aberdeen International Inc., a global resource investment corporation, North American Palladium Ltd., a mid-tier platinum group metal producer, Hudson Bay Mining & Smelting Co. Ltd., an integrated base metals producer and William Resources Inc., an international gold producer.
Alastair Neill is the former VP/GM, Rare Earth Division and VP Business Development for AMR (now Neo-Material Technologies) and Executive Vice President of Dacha Strategic Metals Inc. Mr. Neill is one of the leading experts in rare earth elements and he has over 15 years of experience in the resources sector. He holds a master of business administration from York University and a Bachelor of Engineering in material science from the University of Western Ontario.
Chirvani Abdoullaev received a degree in petroleum geology in the USSR from the State Academy of Oil and Gas in Moscow and worked for the Ministry of Natural Gas in the Soviet Union in Kazakhstan, Uzbekistan, Yakutia, Turkmenistan and for the Bulgarian National Oil Company. Mr. Abdoullaev also spent two years in the Canadian oil patch as a geophysicist with Seis-Pro & Consultants until its acquisition by Schlumberger. Following his graduation from the University of Toronto with a MBA degree in 1996, Mr. Abdoullaev started a career as an Equity Analyst covering Canadian oil and gas stocks and emerging markets metals and mining stocks. Most recently Mr. Abdoullaev spent three years in Moscow as a senior oil and gas analyst with Alfa Bank and later in Prague with Wood and Company covering Russian oil and gas and oil field services companies.
The appointments of Mr. Faught, Mr. Neill and Mr. Abdoullaev to the Board of Directors of Ferro follow the resignations of Mr. Mark Lotz and Mr. Shane Yamamoto as directors of the company.
About Ferro Iron Ore Corp.:
As announced on November 6, 2012, Ferro Iron Ore Corp. (formally, Galena Capital Corp.) recently secured the right to merge a highly prospective Mongolian Iron ore exploration license (No. 14491X) (the "Exploration License"). The Exploration License is located in North Central Mongolia in the heart of a proven mineralization corridor contiguous to the largest operating iron mine (Eruu Gol Mine) in the country with rail, road, power and water in very close proximity. It is along strike with other significant exploration projects including the Haranga Bayantsogt, Tumur Tolgoi and Tumurtei deposits. The licensed area is roughly 1000km from steel mills in Northern China accessible by the railway, with surplus capacity, running in front of the property. Although the company awaits completion of a 43-101 technical report, two historical diamond drill holes show significant iron intercepts including 59% Fe over 55.2 metres from 10.8 metres below surface. There is also surface exposure of banded iron skarn in trenching. The company looks to supply inland steel mills in northern China currently utilizing either very high cost domestic ores or expensive imported ores railed hundreds of kilometers from port given the significant grade and logistics cost advantages.
Eumeralla Director Adds Shares
February 7 (Mogi) Non-Executive Director James Hyndes, Eumeralla Resources Limited (ASX:EUM), which owns the Chuluun Khoroot Tungsten Project in Dornod and recently signed options agreement to acquire tin/tungsten assets in Myanmar, announced he bought 45,000 shares for A$6,300 on 31 January 2013.
Manas Petroleum Corporation announces shareholder and investor conference call
BAAR, Switzerland, Feb. 6, 2013 /PRNewswire/ -- Manas Petroleum Corp. ("Manas") (OTCBB: MNAP) (TSX.V:MNP) today announced that they will hold a shareholder and investor conference call on February 14, 2013 at CET 5.00 pm / EST 11.00 am / PST 8.00 am.
Dr. Werner Ladwein , President of Manas will give an update about our current activities, followed by a Q&A session.
Our Investor Relations Update will be the base for the conference:
http://www.manaspetroleum.com/i/pdf/20130205%20MNAP%20Investor%20Relation%20Update_revised.pdf
To attend at the call please register under the following link:
http://event.onlineseminarsolutions.com/r.htm?e=583143&s=1&k=002C1775A436791D34F1249A620BBDFD
The instructions for the dial in procedure will be supplied to you after registration.
Board members of Mongolian Stock Exchange newly appointed
February 5 (Business-Mongolia.com) New board members of Mongolian Stock Exchange JSC (MSE) has been selected and appointed in accordance with the last months State Property Committee's (SPC) decision. M.Batgerel, Chairman of Policy and Implementation Department of State Property Committee has appointed as a Board of Director and B.Daajamba, Deputy Chairman of Financial Regulatory Commission of Mongolia, G.Batkhurel, Director of General Planning Sector under the Development Policy and Strategic Planning, Department affiliated the Ministry of Economic Development, B.Bayar, Director of Legal Sector under Public Administration Department affiliated the Ministry of Energy, M.Bayanmunkh, Chairman of the Department of Policy Implementation on Heavy Industry affiliated the Ministry of Industry and Agriculture as a board members and D.Dolgormaa, Director of Sustainable Development for Social Responsibility affiliated the Mongolyn Alt (MAK) Group, Ch.Ganbat, Executive Director for "Liberty Partners" LLC, J.Maizorig, General Partner for "MDS & Associates" LLP Law Firm were appointed as Independent Board Members.
INDIA, JAPAN, SOUTH KOREA AND GERMANY HAVE REQUESTED TO BUY A COAL FROM TAVAN TOLGOI, SAID MINISTER N.BATBAYAR
February 7 (InfoMongolia.com) Minister for Economic Development of Mongolia Nyamjav BATBAYAR delivered an official statement regarding "The tasks of economic reforms of Mongolia" in the Citizen Hall under the President's Office on February 06, 2013.
In his statement Minister N.Batbayar noted, "The state's biggest decision to accelerate the current economic progress is issuing the Chinggis Bond, which was an affair to raise money from international stock market with law interests. The capital sourced from the Bond will be allocated to finance big projects on infrastructure, besides to stabilize local economy, particularly by the year of 2015 all centers of all aimags (21 aimags of Mongolia) will be connected with paved roads to the capital city, Ulaanbaatar. Meantime, 1,800 km of railroads will be constructed and at the first stage a railroad from Tavan Tolgoi site will be connected to the border line with China starting within this year.
The next big investment is to release a debt of the 'Erdenes Tavan Tolgoi' JSC, where the Agreement with Chalco was made unprofitable, we are pledging to re-negotiate and establish a new agreement with other potential buyers, for instance India, Japan, South Korea and Germany have requested to buy a coal from Tavan Tolgoi. The talks are under negotiation.
Within this year, a new power plant to construct will be staring based on three mines of Tavan Tolgoi, Shivee Ovoo and Baganuur, the plant's finance will be also sourced from the Government 'Chinggis' Bond, moreover country's first oil refinery plant will be starting to build.
The Bond's distribution will be also shared to Capital city's improvement, for instance in Ulaanbaatar three big projects are planned to be implemented - urban planning in center of the city and its surrounding named Ger districts, and the third one is to construct a new highway".
Consequently, Minister N.Batbayar emphasized that any the Bond's capital is not spent yet to finance any of these projects and the Government of Mongolia is not paying any money for interests under the management arranged by the Central Bank of Mongolia.
Related:
Agreement on V Power Plant to be signed – news.mn, February 7
COAL MONGOLIA 2013
Oxford Business Group is pleased to announce its media partnership with the Coal Mongolia - 2013 which will be held on 21 – 22 February, in Mongolia. In this respect we send you the following message from the conference organisers:
Dear Oxford Business Group Subscribers,
"COAL MONGOLIA -2013" INTERNATIONAL CONFERENCE AND EXHIBITION
It is a pleasure to announce that Ministry of Mining and Mining.mn are organising "Coal Mongolia-2013", the 3rd International Conference and Exhibition.
Join us on 21 – 22 February, 2013 at SS Convention Center and get your questions answered from our keynote Speaker, Minister of Mining D.Gankhuyag, as he raises a huge question "Coal Industry: Where are we now?". Other Ministries such as Ministry of Energy, Ministry of Economic Development and Ministry of Environment and Green Development are also participating as supporting government agencies.
More information:
Our keynote session will be from the leaders in Mongolian Coal Mining sectors and Ambassadors Victor V. Samoilenko, Russian Federation, Takenori Shimizu, Japan, Wang Xialong, Peoples Republic of China, Gregory Goldhawk, Canada and Piper Ann Wind Campbell, USA are invited as honorary guest speakers of the event to express their future cooperation in coal mining sector.
For more information and to register, please visit www.coalmongolia.mn webpage, call us 976-70115590
Guest post: Mongolia doesn't have resource nationalism – for now
By Julian Dierkes of University of British Columbia
February 5 (FT) With the increased level of interest the world has taken in Mongolia given its blistering economic growth rate, resource nationalism is mentioned more and more often as a threat. But what exactly is this resource nationalism?
In Mongolia there is a parade of ideologies and slogans that are being lumped into the category of resource nationalism. They range from the obscure fringes of blood-line focused nationalism to the concerns of dedicated and serious politicians who are genuinely grappling with the challenges that rapid, almost instant, economic growth on the basis of a resource boom is bringing with it. Lumping these different streams together into a single category suggests that there is a coherent ideology that unites them. This is not the case.
Mineral resources in Mongolia are afforded constitutional protection. Anyone would agree that benefits from these mineral resources should primarily accrue to Mongolians. Mongolia is far from unique in this respect. Alberta's oil sands and the controversy about the rights of other Canadians to share in revenues is an example of a well-established mining jurisdiction where claims to ownership of resources by the people are common.
Yet, any discussion of governance structures and taxation regimes in Mongolia's mineral boom is often portrayed abroad as a Hugo Chavez-like nationalism that ignores the important role that foreign investors can play and should play in maximising benefits to local populations. At present, there is no political movement or anti-mining party that espouses a coherent ideology of autarky on the basis of the exploitation of natural resources in Mongolia.
A massive flow of in-bound investment and more on the doorstep gives Mongolian decision makers very little time and opportunity for reasoned and careful choices.
Mongolia was hurt in the 1990s by the shock therapy policies advised by international institutions. Amplified by the effects of calamitous winters that followed, most Mongolians concluded that following international advice provided them with few benefits.
After 2005, the prospect of development on the basis of mineral wealth suddenly emerged as tantalising possibility. Mongolians are now clamouring for immediate benefits, partly rooted in promises that politicians echoed on the basis of foreign investor claims. For most, mired in poverty and disappointed by past economic performance, expectations of future wealth are exceedingly high. This puts them on a collision course with large corporate foreign investors who are entering Mongolia with a significant advantage of lessons from similar projects elsewhere and expectations of their own for high returns.
Mongolian decision makers, by contrast, have neither the information nor the experience on which to base crucial decisions. They are operating in a vibrant democracy that offers citizens free elections and growing opportunities to participate in the political process. Democracy also forces decision makers into a level of accountability that expects detailed deliberations.
Not surprisingly, neither of the two dominant parties (the Democratic Party of the current president, prime minister, speaker of parliament and the mayor of Ulaanbaatar; and the Mongolian People's Party that grew out of the governing state-socialist monopoly party) wanted to make decisions about the Oyu Tolgoi project. The investment agreement for the project with Rio Tinto could only be signed in 2009 by a grand coalition offering assurance to both parties that they would not be blamed for any of its failings.
It is easy for opposition politicians and even members of the government to claim that this agreement benefits foreign investors more than Mongolians. These voices do not offer specific alternative arrangements other than to demand a greater share in ownership, but their claims are not rooted in any kind of consistent resource nationalism.
President Tsakhia Elbegdorj expressed his intention to be a more active advocate on behalf of Mongolians in dealings with Rio Tinto in a speech to parliament on February 1. This speech came in the same week as an announcement from Rio Tinto that the first copper concentrate had been produced at the mine in the Gobi Desert, but also precedes a round of discussions between Rio Tinto and the Mongolian government amidst rumours of a Rio Tinto threat to suspend production at Oyu Tolgoi.
One of the issues Elbegdorj addressed specifically is the perception of employment discrimination against Mongolian professionals. This perception was reinforced recently by the case of S Gantuya, the sister of S Ganbaatar who was elected to the Ikh Khural last June and is very prominent as president of the board of the Confederation of Mongolian Trade Unions. Ganbaatar faced off with Deputy Speaker S Bayartsogt on November 23, 2012 in a highly publicised and much-discussed televised debate about Oyu Tolgoi.
Gantuya has alleged discriminatory payment practices at Oyu Tolgoi because she was paid significantly less than expats doing similar work with similar qualifications. Her allegations have been widely circulated because of the prominence of her brother, but also because she represents the aspirations of many younger Mongolians who are looking to the mining boom as an opportunity to apply professional skills and build a larger Mongolian middle class. Gantuuya claims that she was dismissed from Oyu Tolgoi after posting a letter demanding equal payment for Mongolian employees.
Whether or not these allegations about employment practices are valid, they have received wide circulation in Mongolia and are seen as confirming the impression of Rio Tinto as a foreign investor who has remained aloof from engaging Mongolians beyond the immediate community surrounding the mine site.
Threats by foreign investors, including the currently rumoured threat by Rio Tinto to suspend operations, are more likely to give rise to a true resource nationalism than to force populist politicians to abandon their ad hoc positions and statements. In the face of such threats, Mongolians may rally behind President Elbegdorj in this election year.
Julian Dierkes is an associate professor at the University of British Columbia's Institute of Asian Research.
DAI Becomes Corporate Founder of American University of Mongolia
U.S.-based global development company DAI builds on legacy of commitment to Mongolia dating back more than 20 years
Bethesda, Maryland (PRWEB) February 05, 2013 --
DAI today announced that it has become a corporate founder of the American University of Mongolia (AUM), joining Newcom LLC, Rio Tinto PLC, and the General Electric Foundation in supporting the university's development.
"We are delighted to make this contribution," said DAI president and CEO James Boomgard. "DAI has been working to make a difference in Mongolia for more than 20 years and we want to be part of Mongolia's bright future. Making a lasting investment in its young people is one way we can do that."
AUM was founded by a group of Mongolian and American business, educational, and community leaders to bring the best traditions of American higher education to serve the changing needs of students in Mongolia. AUM will be an independent, non-profit liberal arts university modeled after successful universities in the United States and will be accredited by U.S. and Mongolian accreditation bodies.
"It is exciting to welcome DAI to our group of corporate founders," said AUM chairman J. Peter Morrow. "DAI came to Mongolia in 1993 as the American Government's main economic development contractor and played a significant part in Mongolia's conversion to a market economy. They are perhaps best known for their role in managing and investing in Khan Bank over the last decade.
"On a personal note," continued Morrow, "DAI brought me to Mongolia in 2000 as head of the Khan Bank turnaround team. I'm still here, and now, in this new role, so are they. In joining as a Founder they will be a permanent part of AUM's and Mongolia's growth and development."
DAI's unbroken engagement in Mongolia dates back to the early 1990s and proceeded through various assignments for clients such the U.S. Agency for International Development, the Asian Development Bank, and the World Bank, culminating in the successful turnaround of the Agricultural Bank, now known as Khan Bank. In winding down its holding in the bank, DAI selected AUM as the best vehicle for marking the firm's ongoing commitment to development in Mongolia, in line with a community engagement program that focuses on supporting young people in countries where DAI works.
In the fall of 2014, the first students will be accepted into AUM's four-year undergraduate program. Degree programs in engineering, business administration, and natural sciences will be the first priorities, followed by additional programs that will be developed at the masters and doctoral levels. AUM will eventually become a full-fledged research university that will stand as a center of excellence for the entire region.
About DAI
DAI is an employee-owned global development company. For 42 years, we have worked on the frontlines of international development, tackling fundamental social and economic development problems caused by inefficient markets, ineffective governments, and instability. Our integrated development solutions turn ideas into impact by bringing together fresh combinations of expertise and innovation across multiple disciplines. Clients include international development agencies, international lending institutions, private corporations and philanthropies, and national governments. For more information, visit dai.com.
Link to AUM release, February 1
Oxford Business Group Launches Mongolia 2013 Report
February 6 (Business-Mongolia.com) Oxford Business Group, an organization active in many of the world's fastest growing markets, offering internationally acclaimed intelligence on regions, has released its Mongolia 2013 report. It featured the country's foreign investment laws, which have been the subject of much debate at the political level, affecting the interest from international players in key areas such as infrastructure, capital and expertise. The report was produced with research assistance from The Business Council of Mongolia, Ernst & Young, Clyde & Co and MICC.
According to the report, Mongolia's plans to attract investors who can help the country tap its vast quantities of mineral reserves are put under scrutiny. It discusses the challenges the country faces in its endeavours to ride the commodities boom while trying to retain age-old traditions. Detailed analysis of the efforts to resolve issues at the country's two largest mines, Oyu Tolgoi and Tavan Tolgoi, is included, which will be of key interest to prospective investors, together with in-depth coverage of changes to the country's legal, environmental and tax regimes.
The report also explores the government's plans to drive through legislative reforms which will pave the way for new public-private partnerships in electricity generation. The country's bid to revive manufacturing through domestic processing is also given wide-ranging coverage.
Regional Editor Paulius Kuncinas said that Mongolia's exports of coal, copper and iron should rise on the back of a favorable global outlook for commodities. "This should help stabilise government finances, whilst increasing foreign reserves and also play a part in improving fragile investment confidence," he said. "The most significant milestone in 2013 remains the launch of commercial production at Rio's copper mine, set to become the second largest in the world."
Interviews with the President of Mongolia Ts. Elbegdorj, Prime Minister N. Altankhuyag, US Secretary of State Hillary Clinton and Australia's Foreign Affairs Minister Bob Carr, are included in the report too.
More details about the report can be obtained at http://www.oxfordbusinessgroup.com/.
Related:
Delay in Oyu Tolgoi copper production will have severe macroeconomic effect – UB Post, February 6
Embassy building in Russia was not sold but rented out
February 5 (news.mn) After a local newspaper reports that the Mongolian Embassy in Moscow, Russia, might have been sold, the director of the Department of Law and Treaty of the Ministry of Foreign Affairs, B.Mandakhbayar, spoke to the newspaper.
-Local reports say that the Mongolian Embassy building II might have been sold. Do you have anything to say on this issue?
-The Mongolian Embassy to Russia owns a number of properties in Moscow. The building that is being claimed to be sold was formerly the Trade Mission house whose current address Spasoleskovskii Pereulok 7/1is being rented for 10 years under the permission of the Ministry of Foreign Affairs of Mongolia and the State Property Committee in 2007-2008. Former Ambassador L.Khangai signed the agreement during the term of former Prime Minister S.Batbold.
This is a valid agreement in accordance with both countries laws. The Minister for Foreign Affairs, L.Bold has considered the issue and introduced the agreement to parliament and established a working group to review the issue. The State Secretary, G.Tsogtsaikhan, heads the working group and I am working as secretary of the working group. We have studied every document related to the terms and conditions of the agreement.
-Do you mean the building was not sold? What is the Russian stance on the issue?
-The building still belongs to Mongolia. It has not been sold. There is no involvement of Russia and the Ministry of Foreign Affairs of Mongolia on the agreement. This is an agreement between the Mongolian Embassy and a private Russian company.
-Why did the Embassy rent the building?
The number of diplomats and other staff in the Mongolian Embassy in Moscow was small at that time. The Russian "Tsentr Region Estate" runs in the building.
The Ministry of Foreign Affairs will get the building back and expand the structure and use the property efficiently.
Bank robber still not apprehended
February 6 (news.mn) A bank robbery took place at Khadgalamj Bank in Zamiin-Uud in Dornogovi aimag on February 3rd. The convict, who escaped with two million MNT, is still missing. Witnesses say the convict could be a woman who covered head with a dark green woolen hat. Local Police have initiated an investigation for the case.
The incident occurred during counting money when the timetable change was due. There are two branches of Khadgalamj Bank in Zamiin-Uud. On the day of the robbery the driver was on duty instead of Security Staff and there were only three counter staff.
The Robber threatened the counter staff with a gun and seized three million MNT. But the robber dropped some money when she escaped.
Police speculate that the robber was alone. The incident occurred around 7:25 pm on Sunday.
After checking camera footage the Police have speculated that the gun might have been a fake.
The police are investigating the case and have released a notice to banks to strengthen their security systems.
ADB to Help Modernize Mongolia's Health Sector
MANILA, PHILIPPINES, February 7 (ADB) – The Asian Development Bank (ADB) is providing $55 million concessional lending to help Mongolia improve its health sector with a new hospital, and safer blood transfusions and hospital services.
"Improving Mongolia's health system is one of the best ways to ensure the benefits of the country's rapid growth reach its entire population," said Claude Bodart, Principal Health Specialist at ADB's Mongolian Resident Mission. "Mongolia's economic outlook is bright, and this represents an opportunity for greater health investments to improve the accessibility and quality of hospital services."
ADB will assist the Ministry of Health to set up a new national blood transfusion center and an improved central medical waste management facility in Ulaanbaatar; provide equipment for hospital sterilization and microbiology laboratories to prevent and control hospital-acquired infections; and build a new hospital in one of Ulaanbaatar's poorest districts to directly benefit more than 260,000 residents.
Hospital medical waste treatment and disposal is a major public health threat that leaves both hospital workers and the public exposed to inadvertent illnesses and infections. Inadequate facilities, equipment, and behavior of health care workers have led to the unintentional transmission of infections, including hepatitis B and C, especially among health workers. Hospital sewer systems are also of poor quality, resulting in environmental and public health risks.
Improved medical waste management, and prevention and control of hospital-acquired infections, will benefit about 13,500 health workers, especially those facing occupational risk because of unsecure blood products and processes. Nearly two million patients who receive treatment through these laboratories are also expected to benefit from safer conditions.
ADB will also help build a hospital in Songinohairkhan district, one of the poorest districts in Ulaanbaatar and a center for new rural migrants, which will include modern surgical and maternity services, diagnostic and laboratory capacity, integrated management of out- and in-patient departments, model nursing care, and advanced information technology tools for patient files, procurement, and financial management.
The hospital will be used as a model general hospital to be replicated in nine other districts in Ulaanbaatar under an amended health law requiring all general hospitals to provide at least seven specialized medical services.
ADB is the largest external financier of the health sector in Mongolia, and plays a key role in assisting the government in formulating and implementing health sector reforms. The loans are built on previous policy reforms and ADB health sector development initiatives. The World Health Organization and the German Federal Ministry of Health are cofinancing ADB's support to the sector.
ADB, Japan to Help Mongolia Address Rising Inequality
ULAANBAATAR, MONGOLIA, February 7 (ADB) - The Asian Development Bank (ADB) and the Government today signed an agreement to help Mongolia address rising inequality among its people.
"Mongolia's economic outlook is bright, with 12.3% GDP growth in 2012 and projected growth of around 15 % in 2013-214. But there is a risk that too much focus on mining sector development will lead to neglect of other parts of the economy, resulting in greater disparities in income and access to basic services," said Claude Bodart, Principal Health Specialist at ADB's Mongolian Resident Mission.
Mongolia's mining sector is expected to boom but has benefited few Mongolians, as the sector creates relatively few jobs and high global mineral prices have led to increased inflationary pressures. Protecting people with low skills and income from the impact of high inflation and enabling their full participation in economic growth through greater employment and access to core public services are key issues that the Government of Mongolia is keen to challenge.
Under the agreement, ADB will provide $1 million through a grant from the Japan Fund for Poverty Reduction, which is administered by ADB, to help the government identify main causes of inequality and the constraints to reversing that.
Over the coming 27 months, the government will engage a wide range of public, private and civil society stakeholders in a participatory process to identify key constraints to inclusiveness of growth in Mongolia. Policy and program recommendations to address inclusive growth will feed into the Government's socioeconomic development plans and assist the development of investment programs and strategies in priority sectors such as health, social security, vocational training, transportation and ger areas development to support inclusive growth.
To help formulate its policies to address inequality, the government will assess the international policies and practices that other resource rich countries used to promote inclusive growth. It will also study corporate social responsibility practices and implement a pilot project to match jobless welfare recipients in urban and rural areas with potential employers.
Misc
At Odds With Mongolia's Modernity, a Poet Seeks Another Way
ULAN BATOR, Mongolia, February 7 (WSJ) — As a student in the 1980s, Gombojavyn Mend-Ooyo formed a secret literary society and wrote poetry filled with traditional nomadic themes at a time when Mongolia, then a communist state, was trying to suppress those values.
Today he is considered the country's poet laureate, and an important figure in the fight to retain its traditional culture. As its fast-growing economy puts its modernization into overdrive and draws its population away from its nomadic roots, he has his work cut out for him.
"It is a big shame for us that the country is so focused on mining, at the detriment of herders and the traditional ways of life," says Mr. Mend-Ooyo, 60 years old, sitting behind his cluttered desk in an old Soviet building in Ulan Bator. "It's really difficult to bring back lost culture once it's gone."
Born into a nomadic family, he spent his early years moving across the steppe, herding goats and sheep throughout the day and listening to his elders play traditional music on horsehead fiddles at night. "We would move 20 times in a year," he says. "Nomads feel the land has spirits and a soul, so we have songs about each new place we move to."
Riding horses since the age of 3, Mr. Mend-Ooyo grew up when Mongolia was under Russian control. His father taught him the indigenous Mongolia script by drawing it in the snow that fell outside their circular tent, or ger, during the long winter months — "since classes at school were taught only in the Russian-influenced Cyrillic script," he says. The family prayed nightly in secret, hiding their Buddhist statues in a box during the day.
As a teenager in the countryside, he got interested in writing, thanks in part to Dorjiin Gombojav, a controversial poet and translator who had alienated officials in Ulan Bator. As punishment, Mr. Gombojav had been sent to teach at the rural school Mr. Mend-Ooyo attended.
Mr. Mend-Ooyo wrote his first lines of poetry under Mr. Gombojav's guidance. "He taught me the importance of Mongolian language and our traditions," he says.
In the 1970s, Mr. Mend-Ooyo moved to Ulan Bator, Mongolia's only major city, to attend university. There he helped form Fire, an underground literary group. At the time, communist censors "wouldn't let groups meet," he says. "They were always watching us, so we had to be very careful and meet in people's homes at night."
He worked at a state radio station through the '80s and was allowed to publish some of his poetry after it was vetted by officials. When single-party communist rule ended in 1990, after almost seven decades, he began publishing more of his work, including the writing that espoused his pastoral roots and eventually became his best-known poems.
In them, he describes homesick horses neighing at dawn, saddle studs "sparkling at night" and how sunshine materializes between the gaps in clouds — the observations of someone used to traveling vast distances on horseback.
"The idea of traditional Mongolian culture is paramount to Mend-Ooyo. He is trying to keep the nomadic spirit alive in spite of modernization," says Simon Wickham-Smith, a Mongolian-literature scholar who has translated several of Mr. Mend-Ooyo's books into English. Mr. Mend-Ooyo, he adds, "is arguably the most important poet in Mongolia today, and certainly the one with the most presence, though some of the newer generation might say he is a bit stuck in the past."
Bavuudorj Tsogdorj, 43, a member of the younger generation of Mongolian poets, believes his increasingly urbanized countrymen will eventually appreciate their nomadic tradition. "Younger poets are now writing with European thoughts and styles, but they will come back to Mongolian poetry and thoughts someday. At that time Mend-Ooyo will be really valuable," he says.
"Mend-Ooyo is Mongolia's poetry representative — he is a genuine nomadic poet," he adds.
Mr. Mend-Ooyo is now channeling his energy into rethinking the modern Mongolian way of life. He envisions a 21st-century nomadic community in which schools, health care and markets move with the people, allowing them to maintain their mobility while providing some of the benefits of contemporary society. "It's my dream to build it," he says.
"The reason nomads come to the cities is to get education for their children, hospital access. We want to allow nomads to be more modern, to use cellphones and Internet," he says. "Keep the old life, just make it better."
He is starting small, beginning in his home province some 600 kilometers from Ulan Bator where he writes in the summer and where much of his family still lives and herds. There, he is discussing his plans with others in the community, as well as experts who can advise on ways to realize it.
"My life is the mirror of Mongolia," he says. "I grew up in the classic nomadic way of life, then moved to the city. But even after all these years I am not a city person. All my dreams are about the countryside, and I feel like I am living in a birdcage. Now I am planning to move back to the countryside. I just hope Mongolia will too."
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"Mogi" Munkhdul Badral
Cover Mongolia
Email: mogi@covermongolia.mn
Mobile: +976 9999 6779
Skype: mogibb
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