Blue Wolf Mongolia Countdown: 47 days left till liquidation
IFC's board of directors approved IFC's participation in the Oyu Tolgoi financing
Update: On February 28, 2013, IFC's board of directors approved IFC's participation in the Oyu Tolgoi financing. IFC will now begin the process of working with Rio Tinto, the Government of Mongolia and the lending partners to complete the financing package.
• Oyu Tolgoi Topics of Interest (Монгол хэл)
• IFC Response to Civil Society Review of Oyu Tolgoi ESIA, February 2013
In December 2012, a consortium of civil society groups published a review of Oyu Tolgoi's integrated environmental and social impact assessment process. The development of the Oyu Tolgoi (OT) project is a strategic priority for the Mongolian Government and IFC appreciates the interest of all stakeholders in helping improve the project for the long term.
IFC agrees with civil society that OT is a project with significant impacts that must be managed carefully. Many of the topics raised in the review have also been identified as key impacts by IFC in our due diligence process. Civil society have an important role to play in our investment process. Through several bilateral meetings with civil society, in Mongolia and in Washington, DC, regarding the OT project, and reports such as this, we have heard new perspectives and concerns that we have communicated to the OT team.
OT has publically responded to many of the technical concerns and suggestions raised in the review on their website. This document focuses on issues concerning IFC's role in OT and its compliance with our Sustainability Policy and environmental and social standards and practices. Full project information can be found in IFC's OT project disclosure (disclosed August 2012).
World Bank Response to Oyu Tolgoi Power Source
The environmental and social impact assessment of the project was one step in the process of deciding on this issue. And the World Bank has published a document titled "International Finance Corporation Response to Civil Society Review of Oyu Tolgoi ESIA" (that last abbreviation means "environmental and social impact assessment".
The good news in that assessment is found on its page 2:
Project Power Source
OT has publically stated it will not make a decision regarding future power supplies for one to two years. OT has agreed to make public a full ESIA including an independent alternatives analysis if it decides to build a dedicated power plant for the mine. Any such ESIA will be disclosed prior to the start of construction work.
That of course means that there is still a chance to stop a new coal plant at Oyu Tolgoi and build wind and solar capacity instead, or at least as an additional power source.
It would of course be a great success for the first phase of getting large scale renewable energy from the Gobi desert running to supply as much as possible to this project.
There is more on the Oyu Tolgoi power supply in this document released by the World Bank.
Again, this document says they will not decide on the future power source for one or two years, since they have a four-year contract for electricity from China. I am not sure if that actually works out, since it may take more than two years to build a coal plant. Even for wind power construction takes longer in the Mongolian desert for lack of infrastructure. Solar could of course always be rolled out in a matter of weeks or months.
The document says that the project has agreed voluntarily to comply with the "World Bank Group coal criteria", published in 2010.
Especially Number 2 and Number 4 of these are of interest.
Number 2 says this:
Assistance is being provided to identify and prepare low carbon projects;
This is explained in more detail like this:
In the case low carbon studies and projects design and/or national strategies for promoting RE/EE and
other low carbon interventions have already been prepared:
• Support the financing of bankable projects in RE/EE and other low carbon interventions and/or implementation of policy recommendations as part of the scope of the project and/or to ensure that access to finance for these projects is available from other sources including countries' own and/or donors [specify policy/regulation and year of implementation], [for projects: specific value by year if development decisions have been made] [for all: GHG emissions reduction estimates]. If the defined pipeline of bankable projects or a policy implementation action plan allows for parallel engagement of several donors, the Bank's financing of RE/EE or other low carbon interventions needs to be incremental to the efforts of other donors and national governments. [specify incremental financing provided by the Bank in addition to the already available finance]
If I read that right, this would seem to mean that projects financed by the World Bank need to develop at least some renewable energy together with coal.
And here is Number 4:
After full consideration of viable alternatives to the least cost (including environmental externalities) options, and when the additional financing from donors for their incremental cost is not available;
The detailed explanation for this:
• Least cost analysis
• Quantify environmental externalities [specify variables] – see also criterion #6 below
• Project is least cost after full consideration of alternatives and after factoring in environmental externalities costs [yes, no]
• Assessment of incremental costs of alternative options (with and without environmental externalities)
[alternatives and associated costs]
• Evaluation of switching prices between the proposed project and alternative low carbon options [switching
price expressed in US$/ton CO2]
This requires the cost of CO2 emission (externalities) to be included in the analysis when comparing the price of coal to that of wind or solar. That gets rid of a very important hidden subsidy for fossil fuel that is normally not factored in. Very good news for anyone who would like to see solar and wind beat coal at this site.
It does not, however, factor in another important aspect. A coal plant will take several years to build, while solar is rolled out in a matter of weeks or months. So any comparison between solar and coal needs to assume solar prices as they will be in a couple of years (e.g., lower) for the very least, or better yet as they will be in twenty years (assuming a useful coal plant life of 40 years and averaging the cost of solar over those 40 years as those after 20).
Turquoise Hill jumps 11% after allaying Oyu Tolgoi fears
March 1 (MINING.com) Turquoise Hill Resources (TSX:TRQ), 66%-owner of Oyu Tolgoi, raced ahead more than 11% on Friday after soothing investor fears about negotiations with the Mongolian government over the future of the massive copper-gold mine.
Stock in Turquoise Hill, which is controlled by Rio Tinto (LON:ASX), was changing hands at $7.05, up 11.1% by lunchtime in heavy volumes after the Vancouver-based company characterized discussions over project development and costs, operating budget, project financing, management fees and governance as "productive".
Turquoise Hill, worth $6.9 billion in Toronto is still trading down more than 60% over the past year and is down from a peak above $28 a share hit in March 2011.
Negotiations over Oyu Tolgoi, set to go into commercial production by end of June, will continue through March according to the press release.
A 2009 deal gave Mongolia 34% of Oyu Tolgoi, but wrangling over ownership of the project which is set to transform the economy of Mongolia has only intensified since a new government laden with resource nationalists took power last year.
Mongolia has accused Rio of working fast and loose with financing for the project – an underground mine to compliment the open pit could put the final bill at $13 billion by some estimates.
In October 2011 there was also a standoff over ownership of Oyu Tolgoi – turquoise hill in the local language – when the then Ivanhoe Mines plunged on news that the Mongolian government wants to rework the deal to gain a 51% stake.
At the time Rio and Ivanhoe took a tough stance and after some desperate negotiations Mongolia backed off, but the stock has never really recovered since then.
Investors Back Mongolia Despite Rio Mine Dispute
March 1 (CNBC) Renewed unease about sovereign and regulatory risk in Mongolia - triggered by a dispute between the government and mining giant Rio Tinto over the Oyu Tolgoi copper and gold project - is on the rise but shouldn't erode confidence among longer term investors in the mineral-rich nation, said experts.
Rio and the Mongolian government held "productive" talks this week and agreed on a temporary budget for the $6.6 billion mine, according to statement released Friday by Rio Tinto subsidiary Turquoise Hill Resources. Talks will continue this month though both parties made "progress" on issues related to costs, operating budget, project financing and management fees.
Oyu Tolgoi – which will represent almost a third of Mongolia's economy when in full production - is expected to reach commercial output by the end of June 2013. But development has been setback by wrangling over taxes and ownership of the project.
Fears over 'resources nationalism' are overshadowing the narrative with some investors fearing Mongolia's government may be revising mining contracts and the regulatory framework to extract a greater share of the royalties. "The amber light warning is still lit regarding sovereign risk although not blinking," said Jim Dwyer, executive director of the Business Council of Mongolia in Ulan Bator.
Though the government seems to be upping the ante with the dispute, Thomas Byrne, Moody's senior vice president and Asia-Pacific manager of the sovereign risk group, told CNBC that Mongolia's 'B1' rating "suggests default is not imminent."
In a related development earlier this week, the Mongolian government announced that it had annulled (Mogi: not annulled, temporarily suspended) mining licenses held by Canada-listed Entre Gold for areas immediately surrounding the Oyu Tolgoi license.
Investor sentiment "definitely has been hurt" by the high-profile dispute in Mongolia, said Katie Jung of Mongolia Asset Management in London. But like the divisive debate over the tax increases and spending cuts needed to avoid the U.S. going off the "fiscal cliff," too much was at stake to let Oyu Tolgoi fail and "pulling out of the whole project will cost too much and will be too painful" for both parties, she added.
"This type of dispute is expected when big money is involved and suddenly people start smelling real tangible wealth," Jung said in comments emailed to CNBC. "What started out as an idea in the middle of the Gobi desert is soon going into real production. The Mongolian government is feeling pressure from the local population who increasingly feel that Mongolia is selling its wealth too cheaply."
Longer term investors, however, are unlikely to alter course, she added, and "far-sighted investors might use this opportunity to buy Mongolian assets on weakness."
Chris MacDougall, managing director at Mongolian Investment Banking Group, added: "We feel that co-dependency and economic opportunities will far outweigh any protective sentiment allowing for 'business as usual' to resume mid-to-late summer."
June Elections Key
Mining analysts and investment managers identified presidential elections in Mongolia this June as a key reason explaining why the government appeared to be playing up national and strategic interests in the Oyu Tolgoi dispute.
"There is a lot of posturing going on as politicians seek to look tough in the eyes of the population," said Gavin Wendt, a senior resource analyst at Mine Life in Sydney. "Australia is a great example of politicians pandering to vested interest groups as they talk about 'securing a fair share' of the windfall profits from the resources boom. Mongolia's politicians are no different."
Ultimately, Wendt said, pragmatic governments recognize that they have to engage with mining companies, "and vice versa." In Oyu Tolgoi's case, "there does appear to be some case for modifications to the current agreement, with a significant level of cost blow-outs…this provides the perfect opportunity for Rio and the Mongolian government to formulate a slightly revised deal - which at the end of the day makes them both look like winners."
The Oyu Tolgoi dispute has overshadowed an announcement by Mongolia's President Tsakhia Elbegdorj this week that the Draft Minerals Law will not be heard in parliament until after the June elections.
"We maintain our core view that post-election Mongolia will play host to a very different political and investment environment than that leading up to the June presidential election," said Chris MacDougall, managing director at Mongolian Investment Banking Group.
"With the Draft Minerals Law being postponed beyond the election date and the Strategic Foreign Investment Law still awaiting changes we strongly believe that the climate will be both open and supportive to business."
Until investors get the political certainty that comes with a legislative framework, "the market will remain deflated until the second-half of the year and projects requiring capital will not be able to progress until investor trust is regained," MacDougall warned.
OT Press Release: Statement by Oyu Tolgoi regarding Meetings of Shareholders and Board of Directors – Oyu Tolgoi LLC, March 1
Rio Tinto, Mongolia wrangle on Oyu Tolgoi costs but keep mine on track – Reuters, March 1
Rio, Mongolia Extend Oyu Tolgoi Funding as Talks Continue – Bloomberg, March 1
Rio Tinto and Mongolia mine talks falter – FT, March 1
Rio Tinto, Mongolia to Continue Oyu Tolgoi Funding – Dow Jones Newswires, March 1
Rio's Mongolian misery – The Motley Fool, March 1
Mongolia - Oyu Tolgoi funding progressing – AP, March 1
Continued talks on Oyu Tolgoi project – Business-Mongolia.com, March 3
Entree Gold Closes C$10 Million Private Placement with Sandstorm Gold
VANCOUVER, BRITISH COLUMBIA--(Marketwire - March 1, 2013) - Entrée Gold Inc. (TSX:ETG)(NYSE MKT:EGI)(FRANKFURT:EKA) ("Entrée" or the "Company") today closed its C$10 million private placement to Sandstorm Gold Ltd. ("Sandstorm"). The Company issued 17,857,142 common shares (the "Shares") to Sandstorm at a price of C$0.56 per Share. All three components of the US$55 million financing package from Sandstorm, announced on February 15, 2013, have now been fully funded.
The Shares are subject to a 4-month hold period. Sandstorm now holds approximately 12.17% of the issued and outstanding common shares of Entrée (on an undiluted basis). Rio Tinto International Holdings Ltd. did not exercise its pre-emptive rights.
Sandstorm has advised Entrée that it does not have any present intention to acquire ownership of, or control over, additional securities of Entrée. It is the intention of Sandstorm to evaluate its investment in Entrée on a continuing basis and such holdings may be increased or decreased in the future. The address of Sandstorm for the purposes of National Instrument 62-103 is 400 Burrard Street, Suite 1400, Vancouver, British Columbia V6C 3A6. A copy of Sandstorm's Early Warning Report is available on SEDAR at www.sedar.com.
Mogi: mistranslated what Minister Gankhuyag said but overall a decent analysis
Instant Analysis (Sort of): The OT Dispute
March 1 (The Mongolist) Instant analysis of the major news stories of the day is something I take for granted until it's not there. The last few days I have been craving substantive analysis of the Oyu Tolgoi (OT) shareholders meeting and the many side issues associated with the project, but it has only come in drips and drabs of information from many different sources. It is easier for me to get caught up on Jennifer Lawrence's stumble at the Oscars ceremony than the OT dispute. I may not be alone, so I thought a summary of the information I have gathered could offer some sustenance to others with the same craving.
On February 27 the group of government and Rio Tinto representatives reconvened a shareholders meeting begun just before Tsagaan Sar (Lunar New Year). The meeting continued into March 1 when this post was being written, but initial reports from Turquoise Hill Resources, the Canadian side of OT, seemed to indicate that the group was progressing satisfactorily down the list of issues.1 It is reassuring that progress is being made, but the relative lack of information in the local media demonstrates the acute need for government ministries and parliament to invest some money in developing a press relations unit to provide up-to-date, uniform, and official information. Communication on important issues is either non-existent or wildly sporadic, and it strikes me as comically silly that following the Twitter feed of ministers is the best method of getting real-time "official" information.
No Taxes Paid in 2012
One of the issues being discussed in the shareholders meeting is the recurrent claim that OT did not pay taxes in 2012. OT for its part has officially stated that it was entitled to use "tax credits" starting in 2012 based on a USD 150 million loan agreement signed in 2011.2 OT has also stated that, regardless of the agreement, it paid over USD 280 million in various taxes in 2012.3 Minister of Mining D. Gankhuyag has been quoted as stating no "tax credit" provision exists in the agreement and that OT must pay its outstanding taxes, which the government may begin charging interest on.4 He also tweeted the same sentiment when asked about the loan agreement (see the image below) (Mogi: Incorrect translation. No he did not say there is no tax credit provision in the agreement, but that there is NO provision on HOW the tax credits can be used, thus the accusation of "unpaid" taxes. But I believe OT was given the OK to use the credits from 2012 in a separate letter from the Ministry of Finance, don't know when. Big confusion here. Minister Gankhuyag was later that day quoted on TV saying OT and Mongolia reached an agreement to pay back the $250m from 2014-2015. So looks like OT agreed to pay the $150m in "unpaid" taxes) . This issue seems to be descending into a he-said-she-said argument, but I think it might help to ask Deputy Speaker S. Bayartsogt about the agreement given that he is pictured in a Unuudur article in 2011 signing it with OT CEO Cameron McRae. That article ends with the following sentence (translation added):
Гэрээний дээрх нийт 150.0 сая ам.долларын урьдчилгаа төлбөрт жилийн 1.59 хувийн хүү төлөх ба урьдчилгаа төлбөрийг, хүүгийн хамтаар Хөрөнгө оруулагчийн татвараас 5 жилийн дотор суутган тооцож барагдуулна.5 (One hundred and fifty million US dollars plus 1.59 percent in interest provided in the loan agreement may be deducted from investors taxes within five years.)
Entree Gold Licenses
On February 26 it came to light that mining licenses associated with the OT project, which the Canadian company Entree Gold holds (Mogi: in an Entrée 20/80 Oyu Tolgoi LLC JV), were suspended and referred to the Mineral Resources Agency by Minister D. Gankhuyag. In section 15.7.8 of the 2009 OT stability agreement exploration licenses 3148X and 3150X were transfered to Entree Gold and were to be upgraded by the government to mining licenses before their expiration.6 The reporting on this has been confusing and muddled, but it appears that the licenses are for mining in areas attached to Oyu Tolgoi, and Minister Gankhuyag's interpretation of Article 26 in the 2006 minerals law is that the upgrade of the licenses could only be conducted by the Mineral Resources Agency--not as it was in the previous government by the Minister of Mineral Resources and Energy. I first became aware of this decision from a tweet by Minister Gankhuyag with a link to a local news article about the decision. At that time it appeared even executives at Entree Gold were unaware of the decision. A government official is quoted in a Wall Street Journal article as saying the decision was made to correct a mistake of the previous government in allowing the Minister of Mineral Resources and Energy to overstep his authority in completing the license upgrade.7 Even if that proves true, the approach to handling the problem has left the minister open to criticism of having more sinister motives. After all, it came just a day before the resumed shareholders meeting. At this point, the issue is still unfolding.
OT Board Members Getting the McCarthy Treatment
Part of the corporate structure of OT includes three representatives of the government on the board of directors. The current representatives are former President N. Bagabandi, Khas Bank chairman Ch. Ganbold, and former presidential advisor P. Tsagaan (Mogi: not former, still. Current Head of the President's Office). Unuudur had two full pages of articles on Oyu Tolgoi on February 25, and there was some focus on these board members and questions raised about whether they represent, or even can represent, the interests of the government on the board. The UB Post carried an interview with P. Tsagaan on February 28 which is worth a read here to get one board member's perspective. This issue may continue to come up, so it is important to know there is some chatter in the politisphere questioning these board members' suitability and "loyalty" to Mongolia.
"Gan" Siblings and OT Salary Differentials
A side issue that has been in the news over the last few months has to do with OT's firing of a woman named S. Gantuya. According to allegations she has brought against the company, she was wrongly fired for publicly complaining that Mongolian employees at the company are paid less on average than foreign expatriates with equivalent skills. Salary differentials is an issue that has emerged several times in the current row between the government and Rio Tinto, and for its part OT has responded that all employees are paid competitively with regards to skills and to prevailing labor market conditions in employees' home countries.8 What makes this story particularly juicy is that Ms. Gantuya is the sister of none other than firebrand MP S. Ganbaatar, the public face of the anti-OT crowd. Both have contended in interviews that Mr. Ganbaatar's criticism of OT is unrelated to his sister's firing, but it has not stopped journalists from asking about the issue with each new interview.9, 10
An Echo Chamber Emerges
Over the last few weeks local newspapers have been reprinting translated versions of articles about the OT dispute from international media sources such as Bloomberg, The Economist, and the Wall Street Journal. These articles included all the usual speculations about "resource nationalism," political grandstanding, and the potential economic disaster in Mongolia if there is a failure to resolve differences. This group of articles also included reprints of an article about the OT project bringing back bad memories of a rare earths mine deal that went wrong for Rio Tinto twenty years ago. It is important to know that international opinions are part of the domestic debate, and it may even be having an effect.
President Elbegdorj Pledges to Depoliticize Mining Policy in Elections
One potential example of the echo chamber effecting the domestic debate is at a recent stakeholders meeting on the draft revisions to the minerals law President Elbegdorj pledged to not make the minerals law a campaign issue in the up-coming presidential election, in part, by not submitting it to the spring session of parliament.11 He emphasized the importance of good mining laws in Mongolia's economic fate, and he also stressed that, in addition to political games, a "stampede" mentality has needlessly caused hastily created and poor legislation in the past. He said he wanted to take a more deliberative approach to get things right the first time. I am interested to see if his words turn into real action during the campaign, especially once he faces an opponent who might not make a similar pledge. As I have also argued here, depoliticizing the national discussion on mineral wealth could go a long way in improving Mongolia's negotiating ability in deals from the start and make disputes like the one over OT avoidable. He may fail in his pledge, but it is encouraging it has been made.
There is more discussion ahead in the long running dispute over OT (see here for a summary of the history), but these are the main news items that have caught my attention. More to come as things develop.
Prophecy Provides Update on Tugalgatai Transaction
VANCOUVER, BRITISH COLUMBIA--(Marketwire - March 1, 2013) - Prophecy Coal Corp. ("Prophecy" or the "Company") (TSX:PCY)(OTCQX:PRPCF)(FRANKFURT:1P2) announces further to the news release dated November 15th, 2012, the Company continues the discussion with Tethys and its representatives regarding the purchase of Tulgalgatai coal licenses (the "Licenses").
Pursuant to the credit agreement (the "Credit Agreement") between Prophecy and the Company's creditor, Waterton Global Value, L.P. ("Waterton"), the expiry of the original purchase and sales agreement with Tethys constituted a default under the Credit Agreement. Waterton has agreed to waive the default, subject to (a) Prophecy setting aside $3.5 million in escrow for purchase of the Licences and repayment of the loan; (b) Prophecy agreeing to issue 2 million common shares to Waterton, subject to TSX exchange approval; and (c) Prophecy agreeing to pledge additional security to Waterton.
Kincora Copper Ltd. to Participate in PDAC 2013
Toronto, Ontario--(Newsfile Corp. - March 1, 2013) - Kincora Copper Ltd. (TSXV: KCC) is pleased to welcome the international mining community to Toronto for the Prospectors and Developers Association of Canada's (PDAC) International Convention, which is being held from March 3rd to March 6th, 2013.
Kincora Copper Ltd. will be exhibiting at this year's Investor's Exchange and we invite shareholders and interested investors to talk to our team at PDAC Booth #2903.
Some exciting developments we will be discussing include:
• The results of the 2012 exploration programme continue to demonstrate that our flagship and wholly owned Bronze Fox project hosts a large area of lower grade copper and gold mineralisation, open at depth and in every direction with high-grade intersections and new targets continuing to be generated.
• Our project is situated only 250km from the Chinese border and within 140km of two large scale greenfield copper construction projects: Oyu Tolgoi, invested capital to dated +US$6.2b; and, Tsagaan Suvarga, estimated capex US$1b.
• Our recent successful private placement provides Kincora a number of options and flexibility to resume optimal exploration activities in 2013. The Company continues to monitor yet unsubstantiated local Mongolian media speculation regarding two licenses held by Kincora, the proposed draft Minerals Law, up coming Mongolian Presidential election, and the global markets for exploration juniors. While impacted by these aforementioned factors, we continue to access various other commercial opportunities and discussions with potential strategic investors regarding technical and financial synergies.
• On Tuesday, March 5th, there is the Mongolia @ PDAC Investment Conference hosted at the Hyatt Regency from 13.00-17.00 followed by a reception which Kincora is attending. Registration is required but the Mongolia Conference should provide a unique opportunity to get a detailed update on the current environment in Mongolia from a number of junior mining companies, government representatives from Mongolia and Canada, industry groups, equipment and services providers, and domestic stockbrokers.
Kincora Copper's ambition is to be the leading listed independent exploration and development company in the Oyu Tolgoi South Gobi porphyry copper belt in south east Mongolia.
For additional information about the PDAC 2013 conference or to register for the conference, please visit www.pdac.ca.
For further information contact:
Kincora Copper Ltd.
VP Corporate Development
Aspire, Voyager Removed from S&P/ASX All Ordinaries Index
Sydney, March 1, 2013 -- S&P Dow Jones Indices announced today the changes in the S&P/ASX indices, effective after the close of trading on March 15, 2013 as a result of the March quarterly review. At this rebalance the entire S&P/ASX index hierarchy is reviewed, including the All Ordinaries.
Asia Pacific Investment Partners appoints Heehaw Digital for Invest Mongolia campaign website and digital strategy
March 1 (The Drum) Asia Pacific Investment Partners has selected Heehaw Digital to develop a website and digital strategy for its upcoming Invest Mongolia campaign.
Of the appointment Will Tindall, business development director, Asia Pacific Investment Partners, commented: "We're delighted to be working with Heehaw Digital on the Invest Mongolia campaign, which will to encourage individuals to consider the exciting investment opportunities available in Mongolia."
The Mongolian property developer is based in Hong Kong London and Mongolia, the new site from Heehaw is expected to go live in April 2013.
Summary of the Government Bills Auction held on February 27th, 2013
February 27 (Ministry of Finance) Total of 20.0 billion tugrik bills was announced to be sold on this auction, 20,000 quantities with 12 week maturity. Bids received totaled 31.5 billion tugriks and 20.0 billion tugrik bills were sold successfully at weighted average interest rate of 10.52.
Mongolia's Khan Bank Launches Drive-through ATMs, Increases Number of Correspondent Banks
March 2 (MicroCapital) Khan Bank, a Mongolian provider of microfinance and other services, recently installed three drive-through automated teller machines in the city of Ulaanbaatar. Khan Bank plans to install more ATMs around the city within an unspecified timeframe .
Khan Bank also recently established correspondent relationships, in which a financial institution provides services on behalf of another, with Bao Shang Bank of China, Deutsche Bank of Germany, Mizuho Corporate Bank of Japan and National Bank of Canada. Khan Bank also recently signed agreements with Agricultural Bank of China, Chiba Bank of Japan, Industrial and Commercial Bank of China (ICBC) and La Caixa Bank of Italy in an effort to expand customer access to short-term trade finance facilities. With these developments, Khan Bank has grown its sphere of partnerships to include about 60 banks in 16 countries .
For the year 2011, Khan Bank reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 1.6 billion, a gross loan portfolio of USD 1 billion, deposits of USD 1.3 billion, return on assets (ROA) of 3.91 percent, return on equity (ROE) of 40.9 percent, approximately 300,000 active borrowers and 1.9 million depositors. Khan Bank classifies 51 to 60 percent of its operations as microfinance.
For the year 2011, Agricultural Bank of China reported totals assets of CNY 11.7 trillion (USD 1.87 trillion), and ICBC reported total assets of CNY 15 trillion (USD 2.4 trillion). For the year 2010, Bao Shang Bank reported total assets of CNY 115 billion (USD 18.5 billion). For the year 2012, Chiba Bank reported total assets of JPY 11 trillion (USD 117 billion), Deutsche Bank reported total assets of EUR 2.01 trillion (USD 2.06 trillion), Mizuho Financial Group reported total assets of JPY 166 trillion (USD 1.78 trillion) and National Bank of Canada reported total assets of 175 billion (USD 170 billion). For the year 2011, La Caixa reported total assets of EUR 270 billion (USD 356 billion).
Mongolia eager to tap ties with HK for growth
March 4 (The Standard) Mongolia will strengthen its cooperation with Hong Kong in the run-up to the listing more Mongolian firms in the SAR, consul general Yadmaa Ariunbold told Sing Tao, sister paper of The Standard, in a recent interview .
The grassy plain of the central Asian country has become popular with investors for its rich mineral resources. So far, there are more than 80 resources including coal, copper and oil that have demonstrated substantial reserves.
Economic growth in China and India in recent years has been translated into booming demand for natural resources. Mongolia recorded 17.6 percent growth in gross domestic product in 2011 from 2010 - the second fastest growth around the world after Qatar.
In 2012, Mongolia achieved 12.3 percent GDP growth amid a global economic turmoil.
Ariunbold said Mongolia hopes to attract high-quality international investors in Hong Kong.
"We also want to introduce professional management talent and technologies to Mongolia."
Five firms either from Mongolia or with assets in the country have listed their shares on the local main board. They are all associated to coal mining and related businesses.
To get closer to China and Hong Kong, Mongolia set up a council in the SAR in June, 2011. Last November, it held the first Mongolia-Hong Kong economic forum to discuss investment in the country.
"Hong Kong and Mongolia are both adjacent to the mainland China. We have abundant resources, while Hong Kong has well-founded capital market; the two places have opportunities to work together," Ariunbold said, adding that cooperation is likely to be realized in securities and trade.
China, the second largest economy in the world, is Mongolia's largest investor. More than 75 percent of its exports are currently transported to the mainland.
China and Mongolia inked a strategic partnership pact in 2011.
Last month, Wu Bangguo - chairman of Standing Committee of the National People's Congress, - went to Ulaanbaatar to discuss deeper economic and trade cooperation.
"Mongolia's economic growth is not a 100-meter dash, but a long marathon. Sustainability is our target and our government hopes to share achievements with all the citizens," said Ariunbold.
Mongolia's new government, which took office last August, is planning to launch more revolutionary policies to deal with social problems such as corruption, said the consul-general.
Yadmaa, who grew up in Mongolia but speaks fluent English, said outsiders held lots of wrong notions about his country.
"They think there are no cars, but only horses and camels on the streets," he said, looking amused. He said the local people have come to terms with the modernization of Mongol society and have been using credit cards, mobile phones and the internet for nearly twenty years now.
He added that Mongolia is open to foreign investments in many areas such as infrastructure and railway construction. Its official currency "togrog" is freely exchanged, and its tax rate is the lowest in the region.
To promote Mongolia's tourist industry and inform investors about opportunities in the country, Ariunbold said he plans to put up a magazine in Hong Kong.
Video: Mongolia Club opening in Hong Kong
March 2 -- Feb 25th, 2013 Mongolia club launches in Hong Kong (Production by Lkhagva Erdene, music credits to TJ Entertainment free beats series)
January 27 (Invest Mongolia) --
• To foster better understanding of Mongolia in Hong Kong and promote all things Mongolian
• To be registered under the Societies Ordinance of Hong Kong
• On 26th Nov the Mongolia club is officially inaugurated.
• There will be monthly luncheon meeting on the 1st Monday of each month. It will be round table format with a speaker on a specific topic related to Mongolia.
• There will be special events around visits of Mongolian officials and dignitaries and general persons interest to Mongolia.
• There will be annual meeting in November each year. The General membership will be invited and accounts open to examination. Various Committee and Interest Group will meet more frequently as needed.
• Chairman: Henry DC Lee, Hendale Group
• Vice Chairman: Yadmaa Ariunbold, Consul General of Mongolia
• Treasurer: Victor Yang, Boughton Peterson Yang & Anderson
• Committee members to be formed based on interest
Chairman: Henry Da Cheng Lee 李大成 (Short Bio)
Henry Lee has over 26 years experience as a portfolio manager, corporate financier, and fund allocator in global and Asian markets. His extensive experience encompasses private and public investments, hedge funds, capital markets, asset management and family office operations. Most recently, Mr. Lee was the CIO of Nan Fung – a large Hong Kong-based private real estate and investment conglomerate. Prior to that between 2003 and 2008, he founded the Asia operation of Sandell, a large global hedge fund and was an Executive Director of UBS Global Asset Management responsible for hedge fund allocations. In 1996, Mr. Lee founded Hendale Asia, one of the first Asian-based multi-strategy hedge funds, after being a Principal at the Bass family office in Texas for 6 years. He started his career as an investment banker for CS First Boston in New York and London in 1987.
His community work and directorships include being a 2 term member of the Xian China Peoples' Political Consultative Committee (CPPCC), a 2 term Independent Non-Executive Director of the Bank of Xian and a long standing Investment Committee member of the HK Cancer Fund and holds various directorships and posts in numerous community organizations.
He is a graduate of the Wharton School of the University of Pennsylvania and fluent in Mandarin Chinese, Cantonese and English and currently resides in Hong Kong.
Mongolia Club c/o Hendale Group Ltd, 8 Floor, Exchange Square 2, Central HK
2nd Annual Mongolia Trade & Commodity Finance Conference, May 14, 2013
February 25 (Mongolian Bankers Association) Following a highly successful inaugural gathering Exporta is delighted to announce the return of the Mongolia Trade & Commodity Finance Conference, taking place in Ulaanbaatar in May 2013. The only event specifically organised for the Mongolian trade and commodity finance community, the conference will once again provide an unrivalled platform for discussion and networking for those leading local and international practitioners looking to tap into the huge potential of this rapidly developing market.
Over 130 high-level delegates attended the inaugural Mongolia conference in October 2011, where some of the country's most senior business leaders joined international financiers to discuss the numerous opportunities offered by Mongolia's vast natural resources, as well as the challenges faced in realising sustainable growth and development in line with the expectations and limitations of its growing population.
2013's gathering will again assess the key considerations of those seeking to access the Mongolian market as well as those already operating in the country, with debate centred on mining, minerals and the impact of huge commodity-led growth, as well as perspectives provided on local banking capacity, the primary challenges facing Mongolia's private sector, the opportunities available for new market entrants, and an examination of the country's regulatory landscape.
With a host of expert speakers sourced from both the local and international markets utilising a proven event format, the 2nd Mongolia Trade & Commodity Finance Conference will serve as the key trade gathering for the region's primary industry actors. As with all Exporta conferences, numerous networking sessions will be built into the day's proceedings providing ample opportunity to create crucial connections with the various decision makers in attendance. The conference will be followed by an evening drinks reception, where discussions can be continued in a more informal setting.
Amongst the topics to be covered:
• Does the Mongolian banking sector hold sufficient capacity to realise the countries full economic growth potential?
• To what extent will international institutions be required to play a bigger role in providing additional liquidity?
• Highlighting key infrastructure projects and financing requirements for extensive further development
• Assessing demand and supply factors impacting Mongolia's insurance sector
• How are the key considerations of Mongolian corporates changing in line with market conditions?
• Mapping the regulatory terrain for those operating in the extractive industries
• Examining the impact of Mongolia's attitude towards neighbours such as China and Russia on the opportunities available to western companies
• Highlighting the role of developmental institutions in bridging market gaps and facilitating private sector growth
Who should attend?
• Trade, export and commodity finance heads and directors
• Multinationals and SMEs
• Insurance underwriters and brokers
• Export credit agencies
• Solution providers
• Lawyers and consultants
• Market analysts and policy advisors
For more information here.
Airland Logistics opens office in Ulaanbaatar, awarded exclusive representation of WWPC in Mongolia
February 27 (Airland Logistics) International project and freight forwarder Airland Logistics has been awarded exclusive representation of the Worldwide Project Consortium Ltd (WWPC) in Mongolia - coinciding with the company's opening of an office in Ulaanbaatar.
The 100% foreign owned company has been represented in Mongolia for more than eight years providing project and general logistics support to the country's progressive mining boom.
Jan Jensen, CEO states, "Establishing a local presence in Mongolia was a natural progression for us and supports our commitment to the mining industry in linking local operations to global trade lanes such as Australia, Africa, South East Asia, North and South America and CIS."
"Our membership with the WWPC brings to bear the member's expertise in project logistics enabling us to have a strong global team moving cargo into Mongolia from worldwide locations. Delivering to Mongolia daily, we are committed to delivering on time and beyond our clients' expectations."
Chinese-aided food and drug lab opens in Mongolia
ULAN BATOR, March 1 (Xinhua) -- A new laboratory that will help improve the food and drug safety in Mongolia was opened here on Friday.
The Mongolian National Technical Supervision Administration Center Laboratory, established with Chinese support, will test food and drugs using international standards.
Speaking at the opening ceremony, Mongolian Deputy Prime Minister Dendev Terbishdagva expressed heartfelt gratitude to the Chinese government.
Chinese Ambassador Wang Xiaolong said the Chinese government had been providing substantial assistance to help Mongolia build projects in the fields of infrastructure, agriculture, animal husbandry and transportation.
The Chinese aid had played a positive role in promoting Mongolia's economic development and improving people's living standard, the ambassador said.
In addition to the laboratory, China also offered a full set of testing equipment and training of the Mongolian personnel.
"Mogi" Munkhdul Badral
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