Monday, March 11, 2013

[Initial $200m approved for railway projects including UHG-GS, another $200m for UB road projects, and another $50m for TT Power Plant]

CoverMongolia NewsWire

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Blue Wolf Mongolia Countdown: 40 days till liquidation


Initial $200 million Chinggis funds approved for New Railway Project

March 9 (Cover Mongolia) A cabinet meeting was held on 7 March to approve $200 million of initial funding for the New Railway Project to be drawn from Chinggis Bonds through the Development Bank of Mongolia.

Funding to develop the technical drawings of base structure and the selection of a general contractor for Tavan Tolgoi – Sainshand – Baruun Urt – Huut – Choibalsan, Huut – Numrug, and Huut – Bichigt 1800 kilometers of railway.

To construct the base structure of Ukhaa Khudag – Gashuun Sukhait.

Link to release (in Mongolian)


Initial $200 million Chinggis funds approved for Ulaanbaatar road projects

March 9 (Cover Mongolia) A cabinet meeting was held on 7 March to approve $200 million of initial funding from Chinggis Bonds to rebuild 33 intersections and highways to be built along the Tuul and Selbe rivers.

Link to release (in Mongolian)


Initial $50 million Chinggis funds approved for Tavan Tolgoi Power Plant

March 9 (Cover Mongolia) A cabinet meeting was held on 7 March to approve $50 million of initial funding needed for the 300MW power plant to be built using the Tavan Tolgoi coal mine.

Link to release (in Mongolian)


Mogi: "serious" concerns? Seriously?

US raises serious concerns over Oyu Tolgoi's environmental, social impact

March 9 ( World number two miner Rio Tinto (LON:ASX) has suffered another setback at Oyu Tolgoi in Mongolia after the US refused to vote on World Bank funding to expand the massive copper-gold project in Mongolia.

Operator Turquoise Hill Resources (TSX:TRQ), which is controlled by Rio, has already spent more than $6 billion on the mine in the south Gobi desert where it hopes to start commercial production by June.

The additional $4.5 billion debt package being negotiated with the International Finance Corporation, the World Bank's private sector arm, the European Bank for Reconstruction and Development and several private institutions is needed to develop Oyu Tolgoi to full capacity with an underground mine to compliment the open pit.

The Inter Press Service reported Friday the US decision to abstain from voting won't derail IFC funding of the giant mine, but would add further pressure to make substantial changes to the controversial project.

"[T]he United States' review of the Environmental and Social Impact Assessment (ESIA) for the project has raised concerns in a number of areas," a position paper, dated late February but publicly released this week, states.

"First, the United States believes the ESIA has gaps in critically important information, particularly related to the operations phase of the project and mine closure … Second, the ESIA does not provide a sufficiently detailed analysis of associated facilities and cumulative impacts."

In particular, the policy statement notes that the impact assessment, which currently focuses almost exclusively on the project's construction rather than its potential operation, covers this planned expansion "only lightly". (The U.S. Treasury declined request for additional comment.)

The document also draws attention to longstanding complaints from local herder communities, currently pending before a World Bank Group auditor. The U.S. says it is "keenly interested in the outcome" of this review.

Turquoise Hill which owns 66% of the mine is also at loggerheads with the Mongolian government over development costs, royalties and ownership – not to mention governance – of Oyu Tolgoi which is now operating under a temporary budget.

A 2009 deal gave Mongolia 34% of Oyu Tolgoi, but but wrangling over ownership of the project – with a final bill of as much as $13 billion by some estimates – 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 as rhetoric over a bill before the Asian nation's parliament which contains sweeping changes for the mining industry intensifies.

At full tilt, the mine is set to produce more than 1.2 billion pounds of copper worth $4.6 billion at today's prices, 650,000 ounces of gold ($1.1 billion) and 3 million ounces of silver (just under $100 million) each year.

Oyu Tolgoi will account for an astonishing 30% of the economy of the nation of just over 3 million people.

Link to article


Mogi: below are the list of government demands


Ulaanbaatar, March 4 /MONTSAME/ --

Why has the Mongolian Government raised the issue of amending the Oyu tolgoi investment agreement?

Having run two regular meetings--February 6 and 27, the shareholders of the project on Oyu tolgoi, a strategically-important copper-gold deposit, have taken a break, and this is attracting a serious attention of the society.

The meetings are aimed to solve through negotiations the problems accumulated in the shareholders--the Rio Tinto Group ties. Among these problems the Mongolian side has focused on six and requires that the Rio Tinto, the world leader in the mining sphere, fulfills its responsibilities in accordance with the agreement and proves itself an exemplary enterprise.

1. Rio Tinto is asked to explain dramatically increased investments of the project and to present an implementation of the feasibility study. (Mogi: hard to imagine Rio would intentionally increase costs to delay its own dividends.

The investment agreement on putting the Oyu tolgoi mineral deposit into economic circulation was established between the government of Mongolia and the special license holder on October 6 of 2009 in Ulaanbaatar. It came into force on March 31 of 2010.

In the last three years, the great construction works have intensified, and a copper concentration factory has been put into use within the OT project and is about to export first products in the first half of this year.

However, the government of Mongolia considers that the investors have deliberately and severely breached the agreement several times, for instance, the Rio Tinto has wilfully increased the investment. As the agreement says, the initial investment is USD 5.1 billion for all the expenses until the first products of the copper concentration factory. This is also confirmed by the investment schedule stipulated in the feasibility study. Nevertheless, by the end of 2012 the OT investors intentionally augmented the initial investment by USD 2 billion, or 40 percent and even ignored demands of Mongolia's government to explain the reason. Since this increase will severely shrink for the Mongolian side benefits and the tax income, the government insists that the Rio Tinto gives a proper explanation and only then approve its investment plan.

In other words, the government of Mongolia demands that the Rio Tinto makes write-down of all additional cost, not reflected in the feasibility study, from the company's financing report. It is also needed to keep the shareholders' dividends ratio in accordance with the agreement within the exploitation term of the deposit, and to give a report on implementation of the feasibility study.

Moreover, the size of initial and additional investments increased to USD 2.7 billion in 2007, to 5 billion in 2009, and to 7.1 billion in 2012, which is many times more in comparison with other projects, so the government onsiders that it is absolutely urgent to analyze every increase in detailand on a scientific basis.

The feasibility study say that the project's investment will be USD 14.6 billion when the shaft starts working, but the investors claim that these money will reach USD 24.4 billion, increasing 68 percent. The government also wants to know why and on what grounds the investors have added the investments that are already adopted by Mongolia's parliament.

In case of such an cost escalation the Mongolian side who owns 34 percent of the shares will have its dividends not by 2019, as the agreement says, but by 2019.

(to be continued)

Go to Montsame first, click English, then Link to article



Ulaanbaatar, March 5 /MONTSAME/ --


2. Rio Tinto concealed a conflict of interest of the "Goldman Sachs" (Mogi: this part does smell of conflict of interest, but then again, all the world major mining companies must have ties to Goldman)

The Rio Tinto did not inform the Mongolian side that the Goldman Sachs Group Inc, who worked for Mongolia's government as consultant on the OT project, is the owner of some shares of the Ivanhoe Mines (old name, it acquires 66 percent of shares, is called now Turquoise Hill Resources, its 51 percent belong to Rio Tinto). This action constitutes the next serious breach of the investment agreement.

In other words, the Rio Tinto intentionally has hidden from the government a fact that consultations was giving the company with a vested interest in the project. This is violation of Mongolia's law on regulation of conflict of interests. The government demands that the Goldman Sachs explains what the aims were behind giving consultations. If needed, the government would resort to the agreement revocation.

3. License of the Entree Gold will cut the Mongolian side's benefits by USD 1.4 billion (Mogi: this part always smelled fishy to me, ever since OT was signed)

As it has been revealed, the Entree Gold company, whose participation, even the name, has not been stipulated whatsoever in the OT project, is the holder of 30 percent of the special license of OT group of deposits. It breaches both the Mongolians laws and the investment agreement, and the government of Mongolia demands that the investors take all measures for making the matter meet Mongolia's laws and correct the violation.

Reflected in the OT investment agreement the special licenses of exploration (serial numbers 3148X and 3150X) have been changed into the exploitation licenses, and this constitutes a breach of 25th clause of the law on mineral resources.

The changed licenses were given to the Entree Gold company at order of the former minister of Mineral Resources and Energy on October 27 of 2009--three weeks after the OT investment agreement had been signed.

The right to alter/change initial purposes of licenses is not included in the duties and rights of the Minister under the mineral law. This right only belongs to the Authority of Mineral Resources--the state administrative body. For this reason the incumbent Minister of mining annulled his predecessor's order and has tasked the Authority of mineral resources to solve this problem in accordance with laws.

If the changed licenses came into force by the former minister's order, Mongolia would have got 26 percent instead of 34 percent of the profit that would come from utilizing resources. In other words, a sum of dividends, reflected in the feasibility study, would have declined by USD 1.4 billion for Mongolia.

According to calculations made by the Mining Ministry, the group of deposits under these licenses has copper accounting for 18 per cent, gold--32.6 percent, silver--23.5 percent, and molybdenum--87.9 percent.

(to be continued)

Go to Montsame first, click English, then Link to article



Ulaanbaatar, March 6 /MONTSAME/ --


4. The management cost is higher 2-2.5 times of international standards (Mogi: one must remember all the costs, including management fees, will be born proportionally between Rio & Mongolia, but I sort of understand where the frustration is coming from)

By the investment agreement, the management cost to be paid to the investors (sometimes called as the amount of payment for management services) equals three per cent of the whole investment before commission of the productions and six percent after the production's commissioning.

However, this cost is higher 2-2.5 percent than that of international standards, and the government of Mongolia considers as necessity to make a science-based investigation to this problem, and especially wants to know a concrete factor of increasing the cost and to approve a rule of method for calculating the cost of management services.

As the government has calculated, the payment for management service, which will be paid off in the implementation term of the OT project, is to be equal to 32 percent (current price) of a payment for mineral exploitation to the Mongolian government.

The current cost performance of the OT project shows, the management service exceeds the amount reflected in the feasibility study as much as the costs of primary and action costs of the project increase. For example, it was planned to spend USD 153 million for the management cost in 2010-2013, but it will increase to USD 321.4 million, or 95.5 percent, by the real performance. Because of this situation, the government of Mongolia demands that the Rio Tinto Group explaines what the reason are behind utilizing these money which are 2.5 times than the international standards. The problem must be promptly tackled, the government says.

5. Rio Tinto must ensure implementation of Mongolian laws

The Rio Tinto Group must carry out activities in accordance with Mongolian laws:

- In conjunction with establishing the OT investment agreement, the windfall tax was annulled in August of 2009. Then, the Parliament Speaker warned that the government should create a new environment for tax through a progression scale for the exploitation of mineral resources. It has been recorded at a plenary meeting of the parliamentary session.

Different effects of the law to two entities, running the same business, do not meet justice, so it is considered as necessity to implement the above tax environment. (Mogi: that's the whole point of a stability agreement, to stabilize laws and taxes for a long period of time in order to commit billions of dollars upfront)

On January 19, 2011, the parliamentary Standing committee on security and foreign policy obliged the government to transmit to the OT LLC the mineral exploitation payment, which is based on the price increase rate of products. These resolutions and decisions of parliament have not been implemented, thus the Mongolian government considers the investors must ensure the implementation:

- The Rio Tinto must exploit the mineral resources only estimated by the mineral professional council and the feasibility study calculations, and take necessary measures for sustainably augmenting the resource without exhausting all the reserves.

The Minerals Law of Mongolia says the mining license holder shall not exhaust all the mineral reserves. It is prohibited to mine selecting the high-grade areas. But the size of the current resource reflected in the feasibility study as well as the nominal value of the products have been estimated much lower, therefore the project's profit looks very little. Thus, the Mongolian side requires the investors to alter the feasibility study. (Mogi: forcing a company to operate with a loss is definitely not capitalism)

By the estimation in July of 2009 of all the mineral resources at the OT deposit approved by the Mongolian authorities, it has 45 million tons copper and 1,800 tons gold. However, the investors have projected to exploit copper which is smaller than four times than the estimated size, and the gold--smaller than three times. This is a groundless fact, the government considers.

- The government also demands the investors that it must bring closer a date of giving an opportunity to augment portion of the Mongolian side after recovering the investment by ensuring the #57 resolution of parliament. In addition, the Ivanhoe Mines (now Turquoise Hill Resources) has earned about USD 4 billion by selling shares equal to 51 per cent of its company at the international market, but this income does not belong to the Mongolian side. This is not a fair action, the Mongolian government considers. .

(to be continued)

Go to Montsame first, click English, then Link to article



Ulaanbaatar, March 7 /MONTSAME/ --


6. Management team of the Oyu tolgoi project has not fulfilled Mongolian laws and its duties of the investment agreement

The government of Mongolia demands that the "Oyutolgoi" LLC, an affiliated company of the Rio Tinto Group, corrects its violations of laws and of the OT investment agreement. The company has breached the agreement several times and has not been obeying Mongolia's laws, for instance, it augmented the initial investment by some 40 percent without amending the feasibility study.

In addition to it, a contract has not been established yet between the OT project's executive authority and the management team, and it is a breach of our law on company. Moreover, the investors' side has invested a foreign country, has erected concentrate containers in China without permission of the Representative Leading Council. The company has breached the #8.1 clause of the agreement which says "both Mongolian and foreign workers, working in same conditions, are paid equally". It has been detected by the court of Mongolia and investigators of state supervisory authority.

These facts, violating the Mongolian laws and the investment agreement, have become legal basis to see the agreement again. As one of the shareholders, the government of Mongolia bears a right to do so, and also considers that tough responsibility must be imposed upon the OT LLC's Representative Leading Council and the executive authorities.

The government raised the matter on altering the investment agreement because it considers that the investors intentionally and severely breached its "primary and important duties" stipulated in the #10.7 clause of the agreement.

(to be continued)

Go to Montsame first, click English, then Link to article


Solartech: Interim Report 2012-2013

March 8, Solartech International Holdings Limited (HK:1166) --


On 4 May 2010, the Group completed its acquisition of mining operation located in the State of Mongolia and became engaged in the mining business, details of which are set out in the Company's announcements dated 30 November 2009 and 4 May 2010, and circular dated 9 April 2010. However, no active operation took place between the date of acquisition and 31 December 2012 and therefore the directors of the Company consider that the mining operation did not constitute a business segment as at 31 December 2011 and 2012 and for the periods then ended for the purpose of segment reporting


The mining right represents the right to conduct mining activities in the location of Nergui, Delgerkhangai soum, Dundgobi aimag, the State of Mongolia, for a period of 30 years, expiring on 23 November 2039. The mining operating license is issued by the Mineral Resources Authority of the State of Mongolia. It is extendable by 2 successive 20 years each.


As at 31 December 2012, the amount represented exploration permits in the locations of Uguujit of Orkhontuul soum in Selenge province and Undur of Bugat soum in Gobi-Altai province, the State of Mongolia. These exploration permits were granted for an initial periods of 3 years. As at 31 December 2012, the residual valid period of the permits was within 4 months. In the opinion of the directors, in the event that the exploration and evaluation works have not been completed before the respective expiry dates of the exploration permits, the Group is confident that it can renew all exploration permits before the respective expiry dates.


The investment environment in Mongolia was quite uncertain after its parliamentary election. The Foreign Investment Act and new acts which prohibit mineral exploration and mining operations in riverheads, reservoir preservation areas and forest regions have been implemented, and a new draft minerals act is also in the course of consultation for revision.

The new minerals act is expected to establish new regulations governing the minerals industry. Considering the current economic conditions and the market environment, the Group is updating the feasibility report for the copper mine in Dundgobi Aimag, based on which our management would optimise its decision in relation to the development direction of this project in the future.

The drilling and surveying works for the copper mine in Bayan-Ulgii Aimag, Mongolia, which accounted for 10% of the equity interests for the Group, have not yet completed before last winter. These field works will continue to proceed after the weather becomes warm.

Link to report


Solartech Int'l (01166) places 31.24m shares for HK$12m

[ET Net News Agency, 8 March 2013] Solartech International (01166) said it agreed to place up to 31.24 million new shares at HK$0.4 apiece, representing a discount of about 14.9% to the closing price of HK$0.47.

The placing shares represent about 16.66% of the enlarged issued share capital of Solartech.

The maximum net proceeds of about HK$12 million will be used for the general working capital of the Group and repayment of bank loans. (HL) 

Link to article

Link to 1166 release


BDS closed -12.82% to 3,400 on Thursday. Friday was public holiday


March 7 -- BDSec JSC (BDS: MSE) is pleased to announce financial results for the year ended Dec 31, 2012 as audited by BDO. Nick Cousyn, COO of BDSec, commented "Listed companies in Mongolia continue to move towards international standards in terms of disclosure and transparency. BDSec is no exception in this regard, and we are proud to announce BDO as our auditor going forward."

DO has been in business over 100 years and is one of the top five accounting firms in the world.  

2012 was another outstanding year for BDSec, as revenues and earnings increased by 17.3% and 6.4% respectively. Even more impressive, our market share of traded volume on the Mongolian Stock Exchange was 90% for 2012, vs. 50% in 2011, representing an 80% increase.

BDSec reported 2012 earnings of MNT 1,491.4 million (US$1.10 million), or MNT 135.6 per share. This compares with MNT 1,401.93 million or MNT 127.4 per share, in 2011. The Board of Directors declared a dividend of MNT 60 per share for 2012.

Click here for BDSec's financial statement for 2012

Link to release



March 6 (InfoMongolia) On March 04, 2013, the Board of Directors of Mongolian Stock Exchange (MSE) held its regular meeting and resolved the following decisions.

1. MSE's stock trading fee has been lowered. For the purpose to encourage market participants the MSE Management Team introduced its proposal to lower trading fee of stock trading with value up to 100 million MNT from 0.5% to 0.4% decreasing by 20% and to lower trading fee of stock trading with value of 100 million MNT to 1 billion MNT from 0.4% to 0.38%.

These amendments shall take into force from March 11, 2013, next Monday. For more information please see the Appendix I.

2. "Blue Sky Securities" JSC and "Hunnu Empire" LLC were admitted as MSE member. Consequently, MSE member companies' number has reached 82.

Also, MSE will be closed on Friday, March 08, 2013 on the occasion of the International Women's Day as Mongolia celebrates as a Public Holiday.

Appendix I


Securities Trading Fees, Charges

1. Securities trading fees at MSE will be deducted depending on the each transaction volume:

1.1 From equity sell side and buy side

1.1.1 If transaction value is less than 100 million MNT, then trading fee 0.4 percent is deducted. (Amended by Board resolution No.02 of March 04, 2013)

1.1.2 If transaction value is more than 100 million MNT but less than 1 billion MNT, then trading fee of 0.38 percent is deducted. (Amended by Board resolution No.02 of March 04, 2013)

1.1.3 If transaction value is more than 1 billion MNT but less than 10 billion MNT, then trading fee of 0.3 percent is deducted.

1.1.4 If transaction value is more than 10 billion MNT but less than 30 billion MNT, then trading fee of 0.2 percent is deducted.

1.1.5 If transaction value is more than 30 billion MNT then trading fee of 0.15 percent is deducted.

1.2 The provision 1.1 is also applicable for primary market of equity.

2. From the sell side of government and municipal bonds traded on primary market fee of 0.12 percent of the whole transaction value is deducted, from the buy side 0.00875 percent fee is deducted.

3. No fee is applicable to the sell side of government bond and municipal bond on secondary market, fee of 0.00875 percent is applicable to the buy side.

4. From the sell side of corporate bonds on primary market 0.1575 percent fee is deducted, from the buy side 0.0175 percent fee is deducted.

5. No fee is applicable to the sell side of corporate bonds on secondary market; buy side is charged a fee of 0.0175 percent. Fees can be charged according to an agreement made between the party and the exchange.

Link to article

Link to MSE release


Competitive industries require good leadership not hand-outs

March 10 (B.Khash-Erdene via UB Post) --

Earlier this week I was fortunate enough to take part in one of the most important economic events of the year in Mongolia, the Mongolia Economic Forum 2013. While I was impressed with the range and professionalism of the Mongolian companies present at the event, what caught my attention was the overwhelming number of companies requesting for government support in their respective fields of operation despite the fact that the majority of analysts, and even the President of Mongolia himself, believe that State intervention is the biggest risk in holding back economic growth.

The Mongolia Economic Forum is an annual event in which the private and public sectors get together, along with representatives of civil society, to discuss the best way forward for the Mongolian economy. The goal of this year's forum was to discuss the possibilities for diversifying the economy and for establishing a Mongolian brand on the world market. The most prominent sectors of Mongolia's economy were represented at the forum, including the wool, cashmere and leather industry, the textiles and clothing industry, the travel and tourism industry, and the meat and dairy industry, and all displayed what they had to offer, eager to prove that they have what it takes to be the face of Mongolia. It was a bit like one of those Reality TV shows where the winner becomes a star, except that in this case the prize that they were all clamouring for was support from the government.

Some people might not see anything wrong with this, but I think asking for government assistance is unfair as it results in a handful of business sectors receiving subsidies and grants, while other sectors are forced to succeed, or fail, on their own.

At the Mongolia Economic Forum, the delegates all wanted support and assistance from the state, whether it be tax exemption or grants. There were delegates from sectors such as textiles and electronics complaining that they had not received subsidies for twenty years while other sectors regularly receive subsidies and grants from the State.

One example of government support, is the initiative being implemented currently to support the wool, cashmere and leather industry. Under this initiative, herders receive 2,000 to 3,000 MNT (depending on the quality) for each kilogram of wool and animal skin they sell, on top of the price of the wool and skin, and they receive 200 to 300 MNT for each kilogram of meat they sell, on top of the price of the meat they sell. Other sectors don't receive such grants.

To be fair to everyone, the government should stop handing out subsidies and privileges altogether. Unfortunately, the problem is that Mongolia's national producers need support to prevent being out-competed by larger foreign industries. This is due to the fact that mass production is much cheaper per product than the small scale production of Mongolia's producers. There is no doubt that if Mongolia's producers are not aided by the government, it will be difficult for most to compete on the world market, and for some it would take a miracle to be able to establish a well-known brand.

But from a business point of view, competition is a beneficial thing. The business environment, like nature itself, is unforgiving and impartial. Only those that can produce the highest quality products and services, at the lowest cost, can survive. To survive and thrive in the world of business, one must be innovative, astute and, most of all, productive. Competition weeds out the bad from the good. Sometimes even losing in a competitive market is not necessarily a bad thing because companies merge with their competitors, and the companies that are the most proficient in their specialised field come out at the top.

So there I was at the forum, observing how eager the private sector was to get the State involved in their operations. It seemed strange because, as many people have pointed out, politics and business should not mix, because politics is a risky game.

Every business person knows that they should minimize risk. Risks are minimized by cutting threads to any potential threat. But when they are presented with the potential for government support, businesses seem to ignore their own risk reduction strategies.

If the Mongolian government is to support national production, it should do so for all national producers – not just a few sectors. Around 30 percent of Mongolians live under the poverty line, 47,000 are unemployed, and 65 percent of products produced domestically are produced in Ulaanbaatar alone. With labour available and people crying out for employment, Mongolia has the human resources necessary to build a bright and prosperous future, but what is standing in the way? My answer, like that of many delegates at this week's forum, is mismanagement of resources and poor leadership.

Yes, Mongolia has progressed over the past two decades of a market economy, but we could have done better and still can do better. It is only because of the sheer size of the natural wealth beneath our feet and the minute size of the economy that our growth rate seems large compared to other nations.

What Mongolia needs now is strong leadership and farsighted and fair regulations that don't get in the way of businesses. To achieve better outcomes for all Mongolians, the priority sectors should be education, health and infrastructure – as pointed out by organizations such as the World Bank, the International Monetary Fund, and the Asian Development Bank. Mongolia cannot prosper without creative minds, healthy physiques, and an appropriate setting that can accommodate development.

Link to article


Plans to make Ulaanbaatar a 'smart city'

March 8 (UB Post) On Tuesday, the Ulaanbaatar City Governor's Office (UCGO) launched the 'Smart City' project, which will be implemented in three stages over the next seven years until 2020.

The 'Smart City' project aims to enable city residents to get access to information regarding public services, and send comments, reports, and request to relevant officials via the Internet. According to the UCGO, Ulaanbaatar residents will thereby have a sophisticated, transparent and fair public service, without excessive bureaucracy.

In the first stage, the UCGO will ensure that tender or bid application materials are available online and will provide information online about the selection process for shortlisted applicants, as well as lists of the applicants. This is expected to improve transparency. In addition, the UCGO will develop a consolidated list of public service assets, which will be made available online, and will also develop an electronic registration database of Ulaanbaatar residents as well as an electronic payment system through which residents can pay traffic fines online.

Furthermore, an online system will be developed to enable residents of Ulaanbaatar to view the short- and long-term plans of UCGO officials, and to monitor and comment on the performance and efficiency of UCGO officials.

Link to article


Sainshand Industrial Complex to receive 14.1 billion MNT in financing from DBM

March 5 (UB Post) The Development Bank has agreed to finance the 14.1 billion MNT necessary to conduct an environmental evaluation of the location, plans, and counselling and advisory services for the Sainshand Industrial Complex project. The project involves establishing a modern industrial complex, including a copper refinery factory, as well as construction material and coal-chemistry factories.

At Saturday's government meeting, the Minister of Agriculture and Industry, Kh.Battulga was given the task of establishing the Sainshand Industrial Complex LLC and overseeing the completion of the Sainshand Industrial Complex project. Minister Battulga was also asked to research the necessary changes to the project's legal framework to ensure the government's 34 percent stake in the project. The remaining shares will be held by the national private sector.

The Prime Minister emphasized that the initial financing of the project will be closely monitored, especially as it is the first industrial complex to include factories that process open pit mine excavations.

The government has included the construction and operation of Sainshand Industrial Complex in its upcoming four year plan as well as in the short term plans of the Ministry of Agriculture and Industry.

Early estimates suggested that the complex will cost around 9.3 billion USD to build. The construction of the complex is expected to create nearly 10,000 jobs, and the fully operational facility will require around 2,400 workers. Developers expect that the complex will have the capacity to produce 4.5 million tons of steel, 2 million tons of coking coal, 1 million tons of cement, and 450,000 tons of cathode copper per year.

Link to article


Mogi: Not nearing final phase. Not sure if the authors actually read the draft in full as well.

MONGOLIA: New Mining Code Nearing Final Phase

March 8 ( Bottom Line: Mongolia is revising its mining regulations and preparing to submit a final draft to parliament in an attempt to attract more foreign investment in the sector (Mogi: don't agree it's to attract foreign investment). While the Mongolian government has traditionally be very sober about its legislation and has not made any overt attempts at resource nationalism or legislative adjustments that would give it an unduly larger share of profits, we believe the new regulations will specifically make the terrain more complicated for foreign investors in terms of environmental regulations.

Analysis: The new regulations will focus on reducing environmental damage caused both by artisanal mining and large-scale exploration and extraction activities by local and foreign companies since 2009. Herders have been particularly impacted due to pollution of water sources and pastures. Uniquely, the Mongolian government is very fast to act on environmental issues. In 2009, it easily passed a law prohibiting mineral exploration in water basins and forest and canceled 200 mining and exploration licenses as a result. The playing field has also been challenging due to corrupt practices in the issuance of licenses by provincial authorities: this, too, will be addressed in the new mining code. 

Recommendation: Keep an eye on these developments, especially if you are a small or intermediate-sized mining company. What is likely to happen here is that the focus of the negative aspects of the new mining legislation will…

Link to article (subscription needed)


Academy of Sciences to assist Mining Ministry in surveys and studies

March 4 ( The Minister of Mining, D.Gankhuyag and the President of the Mongolian Academy of Sciences signed a cooperation agreement today, Monday March 4th. 

The Minister of Mining, D.Gankhuyag, said that the Ministry signed the with the Academy of Sciences with the aim to refine the legal environment around the mineral sector by launching scientific studies and forming a National Geology Department in order to develop geology and mining in Mongolia. 

The cooperation of the Ministry of Mining and the Academy of Science is a part of an action plan by the Government for 2012-2016. 

Within the agreement parties outlined the main direction of cooperation. According to the agreement, the Ministry of Mining will conduct surveys of mining, geological creation and minerals underground. The Mongolian Academy of Sciences Geology and Mineral Resources Institute, Center for Paleontology and the Institute of Geo-ecology will cooperate with the Ministry on the surveys

Link to article


Mogi: didn't we decide to liberalize electricity prices by 2014?

No electricity tariff increase in 2013

March 1 ( Energy Regulatory Commission released a statement due a speculation of possible electricity tariff increase by March 1st on Friday.

According to the statement, Energy Regulatory Commission reached a decision to tap loss gap in way of saving the spending not to put weigh on consumers. 

Officials of Energy Regulatory Commission also stated that the decision not increase electricity tariff is available for this year. 

It is estimated that the power sector experienced 66.3 billion MNT loss in 2012

Regulators of the Commission found out 22.5 billion MNT, or 30 percent out of total loss was caused by unproductive expenses

The decision on electricity tariff  by Energy Regulatory Commission can be a big challenge. But consumers will be available to buy electricity on previous tariff. 

Energy Regulatory Commission will cooperate with energy industry companies to prevent loss, tariff increase that can be a pressure to consumers. 

Link to article



March 4 (InfoMongolia) At the Cabinet meeting held on March 02, 2013, MIAT Mongolian Airlines has been officially authorized as the National Air Transport of Mongolia, which is the first IATA International Air Transport Association agent as well as the first airline in Mongolia to operate both international and cross country flights.

As being awarded by the National Air Transport status, the MIAT Mongolian Airlines has been positioning as the leading air transport company along with preferential status for International Fly-Rights in Mongolia under the acceptable world standard in terms of strengthening its broad range of operation and competitiveness among the global airline industry.

Moreover, the MIAT Mongolian Airlines shall be provided by broad range of opportunities to become as wholly certified training organization of Mongolian Civil Aviation Authority to ensure preparatory and professional training for skillful and competent personnel in Mongolian aviation industry.

There are many world leading airlines such as Korean Air, Turkish Airlines and Air Astana which have been very successfully operating under their strong government support and already recognized as the major benchmark among the global airline industry.

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MPRP discusses names for presidential candidacy, considering running as Justice Coalition

March 1 ( Members of Mongolian People's Revolutionary Party, MPRP discussed issues about names of possible presidential candidates, re-structure of the party at a party conference with 80 percent of attendance on Thursday February 28. 

However, a political party can rally with another party in order to participate in a presidential election according to a law.  MPRP has considered to participate in upcoming presidential election as the Justice Coalition of the Mongolian People's Revolutionary Party (MPRP) and the Mongolian National Democratic Party (MNDP).  

Secretary General of MPRP, G.Shiilegdamba said that members of the party discussed about proposing Deputy Head of the party, D.Terbishdagva, Minister of Health, N.Udval, parliamentarian L.Tsog, Minister of Finance, Ch.Ulaan as possible candidates of presidential election during the conference. But the final decision will be made only after a poll and discussion by members of the party. 

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Enkhbayar's son relinquishes MPRP membership due to role as central bank VP

March 1 ( Former president, head of Mongolian People's Revolutionary Party, MPRP Enkhbayar Nambar's son Batshugar Enkhbayar announced to pull out of the party on February 28th. 

Batshugar Enkhbayar was in charge of Secretary of Foreign Affairs of MPRP. Former Minister of Nature and Environment, Barsbold had appointed him to the post during his term. 

Batshugar Enkhbayar explained pulling out of the party due to the current post as Vice President of Mongol bank. 

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Supporters of former President pursuing option for treatment abroad

March 4 ( The former President, Head of the Mongolian People's Revolutionary Party, Enkhbayar Nambar, was sent to the State Second Hospital intensive care unit for treatment. 

The former President was sentenced to 4.6 years in jail for power abuse, corruption, illegal privatization of Urguu hotel and fraud involving the publishing house of the Ulaanbaatar Times from primary court. On December 7th 2012 the State Supreme Court remitted the jail term to 2.6. 

Now his family and supporters are pursuing to send Enkhbayar Nambar abroad for health treatment. 

There is no such incidence where a convict in imprisonment has been sent abroad for medical treatment. But the former president`s family and party supporters are attempting to construct an argument for this using his diagnose and physician`s summary. 

The speculation has been solidified by an interview with the Deputy Prime Minister, vice chairman of MPRP, D.Terbishdagva, where he says "You might not believe me, but I will tell you about the leading medical physician`s summary and diagnose. The former president is in danger of losing his life if he does not have urgent treatment. There is already cell degeneration in his body. But there is no facility for this type of case in Mongolia. We should take care of his health and mood". 

But according to a law expert, there is no regulation in law that allows a convict to leave the country to have medical treatment. 

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Mongolia is the next Panama

February 27 (Jargal de facto) --

Coal Mongolia 2013 was successfully held in Ulaanbaatar last week. This is of course, an international conference and exhibition attended by the biggest coal industry players from the government and business sectors of Mongolia, as well as the world. The event lasted for two days and thoroughly examined many important issues including the competitiveness of the Mongolian coal industry, related governmental policies, the instability of our legal environment and how Mongolia can become competitive in the Chinese coal market. It also focused on what role infrastructure (especially railroad projects) can have in fulfilling this goal.

In coal businesses, the cost of transportation to deliver products to end-users takes up the biggest part of the cost. Productiveness and efficiency in this industry are highly dependent on transportation infrastructure development. Therefore, the industry can be more competitive and produce more profit only when there is more value added to coal being transported.

It can be costly to transport coking coal due to its weight and size. That is why transportation and logistics costs needed for product delivery to the final point or end-users, greatly affect the price.  For example, MMC's (Mongolian Mining Corporation) medium-volatile, hard coking coal with an ash content of 10.5 percent was priced at USD $103-$104 a tonne at the Gants Mod border point in January, 2013.  Australian coal of the same quality however, costs USD $163-$164 per tonne in the northern region of China. The USD-$60-per-tonne difference is made up of the transportation and logistics costs needed for transporting the coal from Gants Mod to Tangshan.

China leads the world in coal imports and comes in second in coking coal imports. China imported 44.7 million tonnes of coal in 2011 and 53.6 million tonnes in 2012. Mongolia's total coal exports exceeded 20 million tonnes in 2011 and supplied more coking coal to China than Australia did that year. Also, 36 percent of China's total coking coal imports were supplied by Mongolia in 2012. In order to maximize the profits of our coal exports, we need to minimize the transportation costs and increase the value by coal washing.

Railroad policy

The above example shows the huge impact a good transportation policy and proper rail infrastructure can have on the economic development of our country.

Building a railroad network that will allow us to transport not only coal, but also other products including other mineral resources, has become a big development challenge for Mongolia today.

It is time for us to resolve the rail gauge issue wisely and expand our railroad network so that we can look beyond Mongolia towards regional and Eurasian markets.

A few years ago, I wrote an article and presented a proposal about how our choice of railway gauge would become the solution to many issues faced Mongolian both politically and economically.  If Mongolia manages to build a mixed-gauge railway, our country could become a new and  historical "canal" similar to the canals of Suez (opened in 1869) and Panama (opened in 1914) in terms of its role and significance to world trade.

In this article titled "Eighty five," published in my weekly column in "Unuudur" Newspaper (2009.12.09),  I wrote that Russian and Chinese trains could come into and go out of Mongolia without having the need to change their wheels:!/eighty-five

During the Coal Mongolia 2013 conference, I came to understand and strongly believe that the timing and conditions are already present here in Mongolia which could enable our country to become the "Panama" of Eurasian transit trade. For the first time in our history, Mongolia is looking at an opportunity to freely choose which railway gauge to use when expanding our railroad network and whether to expand the railroad to Russia or build mixed networks that are connected with the Chinese railway.

This is such a golden opportunity. By making use of a mere difference of 85 millimeters, we can turn Mongolia into a big player in terms of international trade. We can also at the same time, become a strategically important point governing the third most important transit trade route in the world.

Our northern neighbor is a leading resource-rich country. Russia has one fifth of the total oil reserves on our planet. It contains 16 percent of all coal and 40 percent of all natural gas. The majority of Russia's coal reserves (i.e. Kuznetsk, Minusinsk, Irkutsk and the Chit basins) are all mostly located around the Mongolian-Russian border.

Our southern neighbor is the most populous country in the world. China's continuing economic growth will require great amounts of natural resources and raw materials. Railway gauges connecting this huge demand with supply, cannot be linked together because the width of these gauges differs by 85 millimeters.  It is clear however, that our neighbors will never accept different railway standards to deal with this variation in gauge width. This would lead to a very expensive task for them – building ports designated for transferring freight from train to train at every point in which their railroads meet.

Golden opportunity

Sandwiched between these two nations with vast territories, there is a country that can fit into a 2400×1260 km rectangle. Unfortunately, this country fails to recognize the golden opportunity created by history. It sees the future by election terms rather than looking forward into the future. It divides itself into groups and political parties despite having a small population – less than three million. This country is losing precious time by just sitting back and doing nothing.

We need to build a "Ж" shaped railroad transportation network with mixed gauges in order to allow Russian and Chinese trains to enter and exit Mongolia without changing train wheels. This means we should build a horizontal axis railroad which will be owned by Mongolia alone. This can be done by putting four rails on one sleeper allowing trains go on the same railway without changing gauges. This kind of mixed railway links the cities of Haparanda and Tornio and was built over a two-kilometer bridge on the Swedish-Finnish border. It's been effectively used for many years.

When building this railroad network, we should construct all railway lines from the north with wide gauges and those from the south with narrow gauges. In the first stage, mixed-gauge railways should be built on the Tavantolgoi-Sainshand line, then Sainshand-Choibalsan, and from Tavantolgoi to the west. Furthermore, if we manage to build numerous stations where freight will be trans-shipped, logistics will be more efficient, resulting in higher profits. The west end of this railroad network will eventually become Russia's gateway to India through Mongolia and China. This idea must be taken into consideration before signing any general agreement with Russia and China.

By recognizing that a small difference in railway gauges can make a huge difference to the development of Mongolia, we need to spend our time wisely and mobilize our resources right from the start. If we succeed in seizing this historical opportunity, we can leave something invaluable to our future generations without rushing to dig out our natural resources.

If we build a safe, fast and cheap international trade transit route, Mongolia will naturally prosper from its fees without having to pay a single penny. Then we will be able to mine our mineral resources for our own needs and process and sell them for maximized profits. The time would eventually come where our neighbors are dependent on us, not the other way around. We would also then be able to seize the opportunity to find the balance between the interests of our two neighboring nations.

Whether Mongolia becomes the next Panama or not depends only on our will and desire.

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Police website hacking incident still under investigation

March 4 ( The General Police Department is still investigating the hacking of its official website on February 15th.  

A spokesman from the General Police Department, T.Jargalsaikhan, answered a few questions. 

-It has been said that secret files were released when the official website of the General Police Department was attacked by a hacker. Is it possible that secret files might have been stolen?

-The official website of the Department posts normal notices, advice, tenders and other news, information which is not considered to be secret. 

Therefore, the speculation that secret files might have been released is misinformation. 

-What was the reason behind the hacking incident? 

-We started the investigating to find out where and why the website was hacked. 

-The website is currently not working. When will the website be restored?

-IT engineers are working on it. 

-What punishment would the hacker face for the crime?

-The Criminal proceeding that is waiting for the hacker is one for IT security crime. 

If the culprit is found guilty, the convict will face a 100-250 times the minimum pay fine and 3 to 6 months jail time. If the crime is serious, a convict can be charged for up to 2 to 5 years jail time. 

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Japan grants 2 million US dollars free aid to Mongolia

March 7 ( The Foreign Minister Bold Luvsanvandan and the Ambassador to Mongolia from Japan Shimizu Takenori, on Wednesday March 6th, signed a note for 2 million US dollars in free aid to be available to the Mongolian people, supported by the Japanese Government. 

The Japanese Government reached a decision to grant 200 million yen or 2 million US dollars in the country`s fiscal year in 2012 to Mongolia. The two countries discussed the supply of medical equipment and the provision of training facilities using the free aid in accordance with the Mongolian Government's request.  

The Japanese Government aimed to support re-construction at the devastated region affected by the tsunami and earthquake in March 2011 by supplying domestic manufacturers from small-to-medium enterprises in the region to developing countries as free aid on ODA projects.

The Japanese Government has granted free aid to over 20 developing countries since last year. 

The free aid is also designed to display qualified Japanese products and to adopt Japanese technology in Mongolia and strengthen mutually beneficial cooperation in order to together head towards prosperity. 

The free aid from the Japanese Government`s ODA project is designed to support structural transformation of the economy of developing countries, reduce external balance losses and to buy necessary imported goods. 

The Foreign Minister Bold Luvsanvandan expressed that he was happy to sign the free aid note from the Japanese Government in the 2012 fiscal year as a representative of the Mongolian Government. 

The Foreign Minister also stated that Mongolia has received the free aid almost 10 times since 1990. The free aid delivered by the Japanese people and the Government acted as important support and relief for Mongolia, helping it to overcome difficulties during the period of transition to a market economy, improving infrastructure and reducing external balance losses. He expressed special thanks to the Japanese Government on behalf of the Mongolian Government. 

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March 7 (InfoMongolia) The Ambassador Extraordinary and Plenipotentiary of Mongolia to the Republic of Singapore, Banzragch DELGERMAA is being appointed as the Governor for Mongolia at the Asia-Europe Foundation (ASEF), effective from March 15, 2013.

In conjunction, newly appointed Governor for Mongolia B.Delgermaa conveyed a letter of announcement authorized by Minister for Foreign Affairs of Mongolia L.Bold to Ambassador Zhang Yan, the 6th Executive Director of the Asia-Europe Foundation on March 05, 2013.

During the accrediting ceremony, ASEF Executive Director Zhang Yan noted that Ambassador Ms. Delgermaa is becoming the first Governor for Mongolia and was pleased to know that Mongolia sends its special envoy.

Afterwards, two parts discussed the current activity of the ASEF, Mongolia's participation and the upcoming Board of Governors meeting scheduled in 2013, reports the Ministry of Foreign Affairs of Mongolia.

Asia-Europe Foundation

In March 1996, the leaders of twenty-five European and East Asian countries, together with the European Commission, convened in Bangkok, Thailand, for the inaugural Asia-Europe Meeting (ASEM). This historic summit paved the way for the establishment of the Asia-Europe Foundation (ASEF) one year later in 1997. ASEF is the only established institution of ASEM and is funded by voluntary contributions from its partner governments and shares the financing of its projects with its civil society partners across Asia and Europe.

The Asia-Europe Foundation promotes greater mutual understanding between Asia and Europe through intellectual, cultural and people-to-people exchanges. Through ASEF, civil society concerns are included as a vital component of deliberations of the ASEM.

At the 5th ASEM Summit in Hanoi (October 2004), the ASEM process expanded from twenty-six to thirty-nine countries, including the ten new members of the European Union, as well as Cambodia, Laos and Myanmar. The second round of enlargement happened in October 2007, when India, Pakistan, Mongolia, Romania, Bulgaria and the ASEAN Secretariat was officially welcomed into ASEM. During the 8th ASEM Summit held in Brussels (October 2010), three new members joined the ASEM process: Australia, New Zealand and Russia. This third round of enlargement increased the membership to 48 partners.

During the 9th ASEM Summit in Vientiane (November 2012), ASEM was officially joined by Bangladesh, Norway, and Switzerland, bringing the total membership to 51 partners.

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March 6 (InfoMongolia) On March 06, 2013, Foreign Minister L.Bold and Chairman of Mongolian National Chamber of Commerce and Industry (MNCCI) S.Demberel have signed on the Memorandum of Cooperation that took place in the Ministry of Foreign Affairs of Mongolia.

The Memorandum aims to boost foreign relations by the means of economic progress, develop mutual understanding between state and private entities and consequently enhance Mongolia's competitiveness on international markets, besides render foreign trade effectively and increase foreign investments.

In the frameworks of the document, parties agreed to collaborate on promoting Mongolia and its domestically manufactured products overseas, furthermore to create a Mongol Brand to be advertised abroad.

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Mogi: what the …?

China completes Mongolian group genome mapping to help Mongolians "bear and rear" healthier children

BEIJING, March 10 (Xinhua) - Chinese scientists have completed the group genome mapping of the Mongolian people, making them the first Chinese ethnic minority to have their group genome drawn, a political advisor said Sunday.

The group genome samples came from 200 selected volunteers from four Mongolian tribes, Zhou Huanmin, a member of the National Committee of the Chinese People's Political Consultative Conference (CPPCC), the country's top political advisory body, told Xinhua News Agency in an interview.

The achievement will reveal the secrets of the Mongolians in terms of their genome features, genetic variations and the evolution of the ethnic group, said Zhou, a professor at Inner Mongolia Agriculture University and the head of a key biotechnology lab in Inner Mongolia.

"Chinese scientists have independently drawn the group genome map for the Mongolians using self-owned intellectual properties," said Zhou.

The achievement shows that China has elevated its level of research in anthropology, ethnology and genetics. The map will help Mongolians "bear and rear" healthier children, as well as improve the health of the ethnic group in the future. It will also help to promote personalized healthcare options, Zhou said.

In the evolutionary process, each ethnic line has formed its own properties in heredity and phenotype. Different ethnic groups show considerable differences in the types and incidence of genetically-determined diseases.

"By analyzing the genome mapping, we may find out our genetic characteristics, merits and disadvantages. It plays a big role in the prediction, diagnosis and treatment of diseases," said Zhou.

Through analyzing the genome, scientists may be able to identify those most at risk for genetic diseases such as hypertension, high cholesterol, diabetes, schizophrenia, depression and cancer, enabling them to receive preventative care and advance treatment, he added.

In November 2007, Chinese scientists announced that they had finished drawing the first integral genome map for the Chinese Han nationality.

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March 5 (InfoMongolia) Mongolian Authority for Fair Competition and Consumer Protection has decided to announce a weekly gross income of movies being released in cinemas, particularly Mongolian movies in order to create competitiveness among directors, distribute and promote wide information on the movie.

Accordingly, the first Week Box Office Chart for March 01, 2013 was released, where the "Queen Anu" (Anu Khatan) led the chart with a total gross income of 255 million MNT.

Queen Anu

The "Queen Anu" movie was written by B.Shuudertsetseg based upon the novel "Legendary Queen Anu". The novel was released in book stores in June 2010, and since it has been as one of the bestselling books. Also, following year a debut of historical themed theatrical performance the "Queen Anu" play was staged at the State Academic Drama Theatre on April 06, 2011.

The "Queen Anu" film features the biggest battle against Enkh-Amgalan khaan (Kangxi Emperor) of Manchu that ruled Mongolia and China for over 200 years under the name of the Qing Dynasty in the XVII century, and considered as the first movie screening Mongolia's struggle for its independence.


Released Date

Total Gross, MNT


"Anu Queen" (Anu Khatan) by "Shuuder" production

Director T.Altantuya

January 18, 2013



"Assistant to the President" (Yerunkhiilugchiin Tuslakh) by "Shine Yertunts" production

Director N.Enkhdalai

January 25, 2013



"Moon's Puppy" (Sarny Gulug) by Zaya'sh studio

Director Sh.Davaadorj

February 18, 2013



"Destiny 2" (Tavilan 2) by Friends & Brothers Film production

Director L.Enkhbayar

February 22, 2013



"Red Square" (Ulaan Durvuljin) by "Khamba Film" studio

Director B.Ganbold

March 02, 2013


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9 cable television channels shut down by regulators due to violations

March 7 ( The Communications Regulatory Commission of Mongolia annulled the special licenses for the cable channel service of nine television channels. In accordance with the 8th decree passed by the Communications Regulatory Commission on March 1st, the special license of nine cable channels including MBO, MUSIC BOX and ШОНХОР was made invalid on March 6th. 

The Communications Regulatory Commission conducted an inspection of the activities of 42 cable channels that run cable services last January. 

The inspection was supervised by the Communications Regulatory Commission, Information, Communication Technology and Post Authority, the Authority for Fair Competition and Consumer Protection (AFCCP) and the General Police Department. As a result of the inspection the authorities delivered notices to 21 television channels to shut down any of the revealed failures in their activities and warnings were given to improve conditions by March 1st. 

Currently it is estimated that there are 44 cable television channels that are constantly operational in Mongolia. It was revealed that through the inspection 21 of these received precautions from the authorities. 

There are more than 40 cable television channels that have requested to be granted a license. 

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Mongolia: New Heating Technology Struggles to Combat Pollution Scourge

March 8 (Pearly Jacob via Foreign donors and the Mongolian government are pumping millions of dollars into cleaning up Ulaanbaatar's smoggy winter air, which the US Embassy calls one of Mongolia's most critical environmental concerns. But as yet another relief project draws to a close, the city has little to show but more stubborn gray haze.

In 2011, the World Health Organization (WHO) ranked Mongolia's capital the world's second most polluted city, after the Iranian city of Ahwaz, based on airborne levels of particulate matter that settles into the lungs and other vital organs. In winter, particulate matter concentrations can reach levels 50 to 60 times higher than recommended WHO standards.

The reason is coal. More than 70 percent of Ulaanbaatar's residents live in unplanned settlements called ger districts – named for the traditional felt tents many live in, known elsewhere as yurts – and rely on coal-fired domestic stoves for heat. In December 2011, the World Bank said that 90 percent of winter emissions in the city came from domestic stoves and that air pollution was responsible for 27 percent of all deaths in the capital. The study proposed distributing low-emission stoves to help clean up the air.

Foreign aid agencies began researching low-emission stoves as early as 2008. But the costs were still prohibitive for most poor families. So when the Millennium Challenge Corporation (MCC), an American government aid agency, announced a $47 million grant to help clean up Ulaanbaatar's air in 2010, a bulk of it was spent subsidizing low-emission coal stoves for mass distribution.

The ceramic-lined, cast-iron stoves have two manually operable air supply intakes. They still burn coal, but allow better control of airflow and, hence, improve combustion and reduce coal consumption. That translates into 70 or 80 percent less emissions.

MCC financed 70 percent of the project and the Mongolian government chipped in another 20 percent, reducing the cost of the cheapest stove models to about $20, a tenth of their original price.

MCC officials estimate that close to 100,000 stoves had been distributed by the time the project wrapped up in December. But ongoing migration into the city of 1.3 million means the target is always moving. "More and more people are coming to Ulaanbaatar each day with their traditional coal-fired stoves," says Courtenay Engelke, implementation director for the MCC project. MCC estimates that over 40,000 new ger households have moved into Ulaanbaatar since the project started.

Whether the project was effective is disputed. The National Air Quality Monitoring Agency, a government body, claimed a 20 percent reduction in particulate matter in one year, though meteorological conditions may have influenced the results. "This year was very windy and we had a lot of snow so this might have contributed to the reduced figures, but the result is still positive," says Nyamdavaa Shagdar, an agency representative.

But with the city perpetually cloaked in thick smog, many residents are skeptical.

"The new stoves are working very well. There is less smoke and they heat well. […] But it's difficult to see the difference with our eyes because the pollution is still very bad," says Begzsuren Jamsranjav, a ger dweller.

Researchers feel a 20 percent reduction is little reason to celebrate given the gravity of the situation. "Detailed research has shown that there is no attributable health benefit until air pollution is reduced by at least 50 percent, so this figure means nothing for public health," says Enkhjargal Gombojav, a researcher at the Health Sciences University of Mongolia.

MCC officials anticipated that the stoves could reduce pollution by approximately 20 to 30 percent. "We never believed stoves would solve this problem 100 percent," says MCC's Engelke. She hopes MCC's focus on the stoves would "free up resources within the donor community and the government to focus on other aspects" of the problem.

In a bid to introduce alternate low-emission fuels into the market, authorities recently budgeted $300 million to build a plant to produce semi-coke – a processed form of raw coal that burns cleaner – to replace coal in homes. But experts are doubtful the semi-coke will be suitable for small stoves, as it is harder to ignite and burns hotter.

Ger dwellers like Jamsranjav say they would prefer electric heating. But Ulaanbaatar's crumbling Soviet-era power plants are badly overstretched. Construction of a new coal-fired power plant was to start in 2012, but has since been indefinitely postponed.

Meanwhile, government officials insist that they are serious about tackling air pollution, but admit that some of the root causes are being ignored.

"We need to understand why people are migrating to the capital. If we don't improve the life and infrastructure in the countryside, this [pollution] will continue," Myagmar Ravdan, head of the National Committee for Air Pollution Reduction, a government task force, told

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On Location Video, Mongolia: Cleaning up one of the world's most polluted cities

March 8 (Pearly Jacob via Global Post) Just breathing in Ulan Bator, Mongolia, can be as bad as smoking five packs of cigarettes a day.

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Think bling as Mongolian youth rap away their cares

March 4 (Reuters) - Forget nomads, heavy tents and epic songs chanted after a long day of herding across vast grasslands. These days, Mongolian young people are entranced by rap.

Born on the mean streets of U.S. cities and fanned by frustrated youth, rap and the hip-hop culture it extols are helping young Mongolians express the stresses of dealing with an increasingly urban society and all its woes.

"Continue like this and you'll be an alcoholic, you'll forget your family and parents, there go your loved ones," raps Ganbold, who lives in an impoverished district of Ulan Bator, the Mongolian capital.

The skinny 16-year-old is one of several Mongolian rappers featured in "Mongolian Bling," a 90-minute documentary by Australian Benj Binks that showcases how hip-hop has become a popular vehicle of expression for the nation's stress.

"The film is really about what it means to be Mongolian in this day and age. It is not a music documentary, though there is a lot of music in it," said the first-time director, who first discovered that hip-hop was popular in Mongolia on a 2004 visit.

"I could have told this story through rock, or maybe even through techno. But hip-hop was the most in your face. The scenes reflect the urban culture."

The film premiered at the Revelations Film Festival in Perth last year and will be screening at Beijing's Asian Film Week in March, though it has yet to be shown in the country where it was made due to other commitments on Binks's part.

Ganbold, who hails from one of Ulan Bator's "ger" districts, where many residents live in traditional tents without access to electricity and modern sanitation, said he sang to try and humanize alcoholism, one of Mongolia's worst social problems.

"This is about how most Mongolians despise alcoholics. Some people see them as not even human," explains Ganbold in the film. "Others see them and feel sorrow for their addiction."

Like their counterparts in the United States, many of these pioneering musicians take up the banner of social justice in their lyrics as well, rapping about violent crime, domestic violence, alcoholism and the rampant political corruption.

"The candidate will go home thinking he has fooled the crowd," raps Gee, another respected young artist. "In the ocean of globalization, Mongolia is like a boat without paddles. You better start to care before we ... drown."

"The hip-hop here is very much modeled after U.S. hip-hop, but the lyrics are socially charged, about family, wealth, corruption," said Todd Smith, the general manager of the Christina Noble Children's Foundation in Mongolia, which helped put Binks in touch with some of the people he filmed.

"Mongolian people are very musical, and hip-hop is an important medium for young people."


Music has had social and political significance since before the country became democratic in 1990. One song, "Ring the Bells," which just skirted the strict censorship of the time, is recalled by many Mongolians as one of the final weights that helped topple the socialist government.

Now hip-hop is helping people cope with the results of that freedom, not all of which have been for the best.

The film threads together footage of people speaking, street scenes, live music recordings, and traditional religious and nomadic practices, focusing on how hip-hop has built itself up within the more traditional culture.

One segment features trash talk by Gee about an older and more softspoken star, Quiza, and how he has signed a contract to help promote an alcoholic beverage company.

"Hip-hop is not about commercialism." Gee says, between insults such as "I hate Quiza. So commercial ... Bling bling. Goddamn. That's not hip-hop."

But Quiza, whose real name is Battsengel, has been working with Amnesty International for several years, symbolizing the responsibility many artists feel to make life better for the next generation.

The real star of the film may be Gennie, a 26-year-old woman called the "queen of Mongolian hip-hop."

One of Gennie's topics is middle-aged women abandoned by both their husbands and the government to poverty. "The stubborn state says they've done a lot for them," she raps sarcastically.

"Gennie also raps about how the land is being destroyed by mining, the plights of domestic violence, the lack of support single mothers get from the state," Binks said.

"There is a real blend of old and new. In the city you get horses going through, and you have grandmas who are supportive of hip-hop."

That may be because hip-hop is seen as a way of giving the voiceless power - and hope.

"It's a tool for healing society," says Quiza in the film. "Hip-hop is like a weapon to express your words and opinions."

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'Mongolian Bling' rappers swing to their own beat

Benj Binks' documentary traces the growing hip-hop scene in Mongolia, where rappers focus more on social progress and politics.

BEIJING, March — Mongolia's hip-hop scene caught Benj Binks off guard. The young Australian expected the descendants of Genghis Khan to be mostly nomads and herders, cantering over wild, bleak plains. Instead, when he arrived in the country's capital of Ulaanbaatar (Mogi: kudos to LA Times) in 2004 he found nightclubs, graffiti and guys rocking baseball caps and baggy pants.

An aspiring filmmaker, Binks' first thought was to make a comedic short, perhaps bringing Sacha Baron Cohen over to do interviews in character as Ali G. But he was soon drawn into this extraordinary community and only emerged six years later, having created "Mongolian Bling," a thoughtful, feature-length documentary, which will be screening at New York's First Time Fest on Sunday and at San Diego's Frequency Film Festival in May.

Watching this documentary, it becomes clear that while there is much that is recognizable in Mongolian hip-hop, there are big differences. Trinidad James may boast about "gold all in my chain, gold all in my ring," but Mongolian players are more interested in rapping about the destruction of Mongolia's land by big mining companies, the country's problem with alcoholism and corrupt politicians.

Quiza, one of the leading rappers profiled in the documentary, says, "I sing to give my little contribution towards democracy, human development, equality, education and a better future for Mongolia."

It is this hip-hop with a conscience i that makes the music so compelling. "I wanted to go beyond the novelty of it and reflect the things that people were singing about, the issues facing the country," explains Binks, adding, "We like to call our film the first that focuses on contemporary Mongolia culture."

Although most documentaries about Mongolia focus on the beautiful but disappearing nomadic tradition, in reality, only 30% of the country's 3.2 million continue to live an itinerant or semi-itinerant lifestyle while almost half of Mongolians live in Ulaanbaatar and other urban centers.

Rapid urbanization since the fall of the country's Communist government in 1990 coincided with a period of opening up to Western culture and music. Mongolia's first self-proclaimed rap group, Khar Sarnai (Black Rose), formed in 1992. This eccentric duo spat lyrics over techno beats, wearing outfits that alternated between Mongolian robes and shiny top hats that would have made Slash from Guns N' Roses proud.

By the mid-'90s cable had come to the country, bringing MTV, and with it Vanilla Ice and MC Hammer, into Mongolians' living rooms. In 1997 came the release of arguably the first real hip-hop single in Mongolia — "Know your limits" by War and Peace. This song borrowed words from Ryenchinii Choinom, a dissident poet during the socialist era, and transformed them into rap lyrics, laying them over early hip-hop beats and ethereal Mongolian instrumentals. In the documentary, Enkhtaivan, the rapper who founded War and Peace, recalls: "[Hip-hop] entered Mongolia and represented similar conditions to the situation we were in."

The emergence of Mongolia's first real city, the widening gap between the rich and the poor, and the growth of a subsection of society that increasingly felt disenfranchised were among the developments that helped create a society that could identify with American hip-hop.

What's more, this new music genre also dovetailed with the country's ancient oral traditions. From the long-standing culture of song fighting, praise singing and various spoken word games, it wasn't a huge leap to MC-ing. The Mongolian language itself, rich as it is in heavy, guttural sounds, seems almost custom-designed to be rapped over base-dropping beats. And, at a stretch, Mongolia's tradition of khöömii, overtone singing in which the throat is used as an instrument to create two pitches at the same time, one a low drone, the other a high melodic note, could be seen as a precursor to beat-boxing.

When interviewed by Binks, Bayarmagnai, one of Mongolia's last singers of traditional epics, even claims hip-hop began in Mongolia. He argues, "[Look at] the long songs of praise; even when we were kids getting into arguments… these [sing-song] intellectual debates to avoid physical fighting…"

While modern Mongolian hip-hop often samples traditional instrumentals and singing, the overall sound and look of its artists more closely resembles that of their American brethren. Diamond earrings, hoodies, tattoos, pimped-up rides and studio walls plastered with Tupac posters are all de rigueur.

Despite all this surface bling, their lyrics are more down to earth. "There's a lot of hype and bravado, bitches and hoes in Western hip-hop. Mongolian hip-hop is more grounded, more honest and raw," says Binks. "They're singing about the realities of their lives and trying to create change."

It's hard not to be moved when listing the passionate, political lyrics in songs such as "Care About" by Gee, one of the country's hottest hip-hop artists: "You're selling the future of Mongolia purely for your benefit today. In this ocean of globalization, Mongolia is like a boat without paddles. You better start to care.... Show some care for us, for Mongolia," he charges, complete with expletives.

A baby-faced, shaven-head young man who is often seen sporting a Green Bay Packers parka, Gee hails, like many of the rappers, from Ulaanbaatar's ger districts. Named after the traditional Mongolian felt-lined tents that surround the more developed city center, these slum-like sprawls are home to more than half the city's residents.

Parallels between Ulaanbaatar's ger districts and America's inner-city ghettos are easy to draw. And the same tension that exists in American hip-hop between those who "go commercial" and those trying to "keep it real" is also present in Mongolia. Gee has publically criticized Quiza for accepting corporate sponsors. As he says in "Mongolian Bling," "Art is not a tool to make money, it's to heal society and the artists are the doctors."

Quiza, for his part, complains, "Other rappers insult me, they diss because that's what they learned from American rappers. But they're just jealous."

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A review of Chasing the Singers: The Transition of Long-Song (Urtyn Duu) in Post-Socialist Mongolia, by Sunmin Yoon.

March 5 (Dissertation Reviews) Sunmin Yoon's dissertation examines issues of continuity and change in urtyn duu (literally "long-song") performance in Mongolia, during and after Socialism. Focusing on the lives of prominent singers and songs, she explores how the transformation of long-song into a national icon of traditional culture embodies the transitional processes that marked the fall of Socialism. Following other scholars of the post-Socialist world, she argues that transition did not constitute a paradigm shift in long-song performance, but instead resulted in the adaption of Socialist-era styles, institutions, and ideological frameworks for the uncertain conditions of the Democratic era. Combining historical research, musical analysis, and ethnography in Ulaanbaatar and the countryside, Yoon's contribution to the growing literature on Mongolian music in English is a detailed examination of the diverse social and sonic roles that long-song has played in the re-formation of Mongolian society and identity.

Long-song is a melismatic vocal genre that is "long" not for the duration of a performance, but for how the syllables of poetic texts are extended over lengthy, heavily ornamented melodic passages. Once only sung in nomadic settings by herders, as Yoon details, the genre first became a significant matter for domestic and international cultural politics due to Socialist cultural reform beginning in the 1950s. While the animist elements of long-songs were heavily suppressed, the government also supported and shaped performance in order to create a national culture by introducing a public education system, a ranking system for titled singers, salaries, radio stations, and competitions, wherein both participant artists and officials exercised influence on performance norms. As a result, select state-honored singers who toured internationally, like Dorjdavga and Norovbanzad, became cosmopolitan models of success for aspiring rural and urban singers by securing official favor, familial support, and through their own personal initiative. These matters, norms, and institutions persisted under the market economy, when some singers also began fusing rock or pop idioms with long-song for commercial or creative aims. Yet as Yoon makes clear, these developments have not homogenized nor diminished performance throughout Mongolia, despite a general decrease in stylistic diversity. Today nomadic singers still sing for life-cycle and everyday occasions, while professional singers continue to pursue national and international careers as arbiters of tradition in an urbanizing society now seeking to reconnect with the "deep" or indigenous past (see Caroline Humphrey, "The Moral Authority of the Past in Post-Socialist Mongolia," Religion, State & Society 20, 1992, pp. 375-389).

Building on the work of many scholars in ethnomusicology, post-Socialist and Mongolian area studies, Yoon explores these developments in five body chapters, plus an introduction and a conclusion. Chapter 2's literature review details her theoretical framework, particularly the relevance of several historically formative concepts (modernity, folknationalism), a theoretical focus (socialidentity), and a recurrent theme (urban/rural migration) for the study of long-song. The first three are not only widely-used theoretical "frames" for scholars but also concepts that the Mongolian intelligentsia, the government, and performers have used to formulate the values and meanings of first a Socialist, and then later a post-Socialist national culture. Using the concept of social identity,Yoon focuses her attention on the complex relationship between collective belonging and individual expression, national and regional (or idiosyncratic) style in long-song performance. Lastly, urban/rural migration is her means of investigating the dynamic between urban and rural social positioning among singers, along with the ideological significance of the countryside as an imagined space of indigenous tradition. In the remaining chapters, Yoon examines how singers have altered, embodied, and employed these concepts in relation to prevailing cultural frameworks.

Chapter 3 consists of a brief and highly useful history of relevant cultural, social, and political developments — particularly the public education system, class formation, state media, Khalkha-centrism, and cultural policy — that underlie the transformation of long-song. Chapter 4 is a much-needed comprehensive introduction to the main characteristics of the vocal genre in nomadic and professional settings based on Yoon's own research. Chapter 5, which is arguably the centerpiece of her dissertation, juxtaposes the careers of a wide variety of professional and nomadic, established and aspiring singers through ethnography and historical research as a way to articulate transformation and transition in long-song performance. How older singers collaborated with Socialist cultural initiatives and created a professional (mergejliin) musical elite, in addition to how younger ones have negotiated democratic-era market conditions by exploring pop or rock idioms constitute its main foci. Chapter 6 examines whether transition is also evident in the musical styles and repertoires of singers, as documented in Mongolian National Broadcasting's archive, several seminal publications in Mongolian (see primary sources), and ethnographic work among urban and rural singers. Yoon ultimately concludes that changes in style and repertoire due to transition have been nominal in the urban national style, while rural nomadic styles persist within continuous traditions dating back to pre-Socialist times.

There are many reasons why Yoon's work is necessary reading for anyone interested in Mongolian expressive culture or post-Socialist studies. Besides providing the most in-depth discussion of long-song's musical features in English to date, her interviews with singers in transition reveal the surprising intricacies and interactions that enabled Socialist cultural reforms, engendered professional traditional music, and revitalized nationalist discourses in the Democratic era. In one example, prominent singer Sum'ya states how, "when we toured a lot during the Socialist period, we could leave when husbands were willing to take care of our children and support our tour; otherwise, it was very hard…" (p. 182) Top-down imperatives from officials did not simply force singers onto the stage to sing Bowdlerized long-songs. Personal cosmopolitan aspirations (albeit acquired through the education system), desires to travel internationally, and the crucial support of family were the preconditions that made professional careers possible as well as meaningful for singers and society. In another notable example, Yoon relates Sum'ya's response to the question of whether Socialist officials ever suppressed the vocal genre:

She answered that nobody really liked singing traditional long-song, although this would not be called "suppression." She said that is was just not quite welcomed by the audience. In concerts, she used to be asked to sing only two verses instead of eight verses. Also, she said that people did not pay much attention to long-song singers, being more eager to listen to ensembles and Western tunes. (p. 201)

Despite the erasure of animist elements and references to Chinggis Khaan, less Draconian issues were also at play in the transformation of long-song. Yoon even argues that Socialism positively affected long-song performance by promoting it as a marker of national culture, which then provided Democratic-era nationalists with a ready-made marker of indigenous tradition.

This dissertation contains many more such revealing moments, which scholars of Socialist modernity and expressive culture in Mongolia are now obliged to familiarize themselves with. Until Peter Marsh's recent biography of the horse-head fiddle (morin khuur), there were no other extensive publications in English with which to contrast Carole Pegg's encyclopedic observations on Mongolian musical culture (see Peter Marsh, The Horse-Head Fiddle and the Cosmopolitan Re-imagination of Tradition of Mongolia. New York: Routledge, 2009; Carole Pegg, Mongolian Music, Dance, and Oral Narrative: Performing Diverse Identities. Seattle: The University of Washington Press, 2001). Lucky as we are to have both, Yoon's work is a welcome addition to the growing literature on Mongolian expressive culture.

Andrew Colwell
Visiting Faculty/PhD Candidate
Wesleyan University

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Way Down and Out in Ulan Bator

March 7 (New York Times) In 2004, Mikel Aristregi documented street children in Cambodia, fascinated by the bonds they forged among themselves, a coping mechanism against an onslaught of threats along the harsh landscape of Phnom Penh's boulevards. So when he learned of children living in the sewers of Ulan Bator (Mogi: baaaad NYT, baaad NYT)Mongolia, he went there in pursuit of a similar project.

Instead, amid a maze of hot water pipes, he found a grim underground world of homeless alcoholic adults.

"Seems like the problem of the street children had been more or less eradicated because of the work of many international and local groups," said Mr. Aristregi, 37, of Spain. "But nobody was taking care of those people."

Pressure and attention from nongovernmental organizations and children's rights advocates had forced the Mongolian government to alleviate the suffering of street children. The homeless alcoholics, however, were left to fend for themselves — subterranean untouchables of the capital of the most sparsely populated country in the world.

Mr. Aristregi changed plans and began to photograph this bleak world, hoping that international attention — if not outrage — might similarly force authorities to take action.

He quickly learned that access and communication were barriers. He enlisted a young English student to help him enter their world. But — predictably — their behavior was erratic: they were often drunk and saw him as somebody from whom they could cadge money, food or cigarettes. They had fits of anger and aggression, threatening Mr. Aristregi and his interpreter, so that they would have to leave until things were calm enough to approach again.

And then there was the cold.

Ulan Bator is often described as the coldest capital city in the world. Temperatures can drop below minus-40 degrees. "Sometimes, the only thing I could think about was just how cold I was," Mr. Aristregi said in an e-mail exchange. "I used to start working early in the morning," when the homeless were calmer, but the temperatures were lower.

Climbing in and out of these enclaves, with their varying temperatures, warmer with the pipes, posed tricky technical problems, too. "To change a medium-format film roll I had to take off my gloves and it was painful, and took me a long time," he said. "When I went into a hole, the temperature difference between outside and inside could be over 50 degrees, which produced water condensation on the lenses, so I could not take photos for over 30 minutes."

But the plight of these homeless people is dire, and the strength of their alcohol — nearly 200 proof, Mr. Aristregi said — underscores the magnitude of their despair. He said some people used this alcohol to clean engines. Some buy the alcohol, cheap and strong, in bulk, then resell to the homeless for about 35 cents, a sum they raise by scrounging the streets for discarded plastic to sell.

Mr. Aristregi was disappointed by the lack of help this population received, either from the government or religious shelters. Alcoholism, according to a 2006 study by the World Health Organization, affects 22 percent of men and 5 percent of women in Mongolia. There is no infrastructure for help, and limited resources and limited understanding hinder well-intentioned efforts. Recidivism is high.

Evangelical groups, he said, lure the homeless with offers of food, clothing and showers. But their promises of salvation are ignored, with the men resting inside for a few days before returning to the streets and their stupors. The government, he said, has one hospital where alcoholics are taken for up to two years. But there are few opportunities for work once they get out, so the path often leads back to the streets and drink.

For Mr. Aristregi, who plans to return to Ulan Bator to better document the hospitals and detention centers where some of the homeless end up, getting people beyond Mongolia's borders to know and understand the problem is essential to addressing it. As he emphasized in his e-mails, documenting these suffering individuals also compels one to action.

Mr. Aristregi couldn't help but empathize.

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