Monday, March 25, 2013

[SouthGobi restarting production, Mongolia/China signing oil for petroleum deal, and Barroso couldn't make it but Blair was here]

CoverMongolia NewsWire

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Mogi: bne reported my petition, much appreciated Ben!

Capital spelling

March 21 (bne) Now that Mongolia is firmly on the international investment map, an online campaign has been launched to ensure that the country's capital is spelled correctly, as "Ulaanbaatar". 

With massive projects going ahead in the natural resources sphere, including the development of the Oyu Tolgoi copper-gold deposit and the Tavan Tolgoi coalfield, Mongolia is rarely out of the headlines in the business press, especially with the ongoing struggle for supremacy between the Mongolian government and mining giant Rio Tinto

But many Mongolians have been irked by the continuing use of the Russian spelling of their capital, Ulan Batar or Ulan Bator, not to mention numerous other variations. While Mongolian, like Russian, uses the Cyrillic script, the two languages have different spellings for the Mongolian capital, with the Mongolian version correctly transcribed into Latin as "Ulaanbaatar". 

The name Ulaanbaatar - the Mongolian translation of "Red Hero" – was given to the city in 1924, when it became the capital of the Mongolian People's Republic. Previously, the settlement had several titles including Urga and Khuree. 

Munkhdul Badral, owner of the Cover Mongolia newswire, has even launched an online campaign at the website, urging the English speaking world to, "Please spell Mongolia's capital correctly, 'Ulaanbaatar' not 'Ulan Bator'." 

As of March 18, the petition had attracted 343 supporters, some posting comments including "Ulaanbaatar is the capital of Mongolia and this is the way we Mongolians spell it". 

Munkhdul Badral is also the initiator of a another petition linked with spelling, "It's 'Chinggis Khaan' not 'Genghis Khan'," pointing out to English speakers that, "Genghis is just simply not how it's pronounced. How would you like it if George Washington was spelled Jorj Vashington?" 

Link to article


SGQ rose 3.35% to C$2.16

SouthGobi Restarts Output at Mongolia Coal Mine on Outlook

March 21 (Bloomberg) SouthGobi Resources Ltd. (SGQ), a Mongolian coal mining company controlled by Rio Tinto Group, will restart production at its Ovoot Tolgoi mine as the outlook for prices improves.

The company plans to produce 3.2 million metric tons of semi-soft coking coal over the remainder of 2013, Vancouver- based SouthGobi said yesterday in a statement.

Production at the mine has been halted since the end of June 2012 after prices and customer purchases declined. SouthGobi's relations with Mongolia became strained last year after Aluminum Corp. of China Ltd. launched an ultimately unsuccessful bid for a stake in the coal producer.

"While a certain amount of volatility remains in the coal markets, signs of improvement justify this restart of operations," SouthGobi said.

SouthGobi, controlled by Rio's 51 percent-owned unit Turquoise Hill Resources Ltd. (TRQ), fell 0.5 percent to C$2.09 at the close of trading in Toronto yesterday. The stock has declined 67 percent in the past year.

Link to article

Link to SGQ release


TRQ rose 1.88% on Friday to US$6.49

Turquoise Hill Resources to Announce Fourth Quarter and Full Year 2012 Financial Results on March 26, 2013

VANCOUVER, BRITISH COLUMBIA--(Marketwire - March 22, 2013) - Turquoise Hill Resources (TSX:TRQ)(NYSE:TRQ)(NASDAQ:TRQ) will announce its financial results for the fourth quarter and full year 2012 on Tuesday, March 26, 2013 before financial markets open in North America.

The company will also host a conference call and webcast to discuss fourth quarter and full year 2012 financial results on Tuesday, March 26, 2013 at 1:00 pm EST/10:00 am PST. The conference call can be accessed through the following dial-in details:

North America: 416-641-6150/800-952-5114

International: +1-416-641-6150

Participant passcode: 5167755

The conference call will also be simultaneously webcast on Turquoise Hill's website at An archived playback of the call will also be available on the company's website.

Link to release


The riches under Mongolia's Turquoise Hill

March 24 (BBC News) Beneath the Gobi desert lie enormous reserves of gold, silver and copper - but exploiting them is proving to be a tricky balancing act for the Mongolian authorities.

I am sure he would blush at the suggestion, but Samand Sanjdorj is quite possibly the most influential Mongolian since Genghis Khan.

Sanj, as he is known, is from a modest background. Like most Mongolians, he grew up in a ger - one of the round felt tents common in Central Asia. He is from a family of nomadic herders from the west of Mongolia, but he did well at school and managed to wangle himself a place on a geophysics course at a university in Russia.

Now you might imagine the work of a geophysicist would be a bit dull, but I challenge you not to be drawn in by Sanj's story.

In the late 1990s, an international mining company sent him deep into the Gobi desert as part of a team investigating what he described as "an interesting extrusion". To you and me, that is a great fist of rock punching out from the dusty desert scrubland.

Sanj and his fellow geologists were by no means the first prospectors there. The local name for this "extrusion" is Oyu Tolgoi, or Turquoise Hill. The green stains that gave it its name are a clue to the minerals within.

But first the Soviet teams and then, more recently, those Western mining companies that examined it, dismissed the deposit as too small to warrant commercial exploitation.

Sanj's work told a very different story. His results, he says, rapidly suggested a very unusual geological formation.

"Every day our data showed the potential ore body was bigger and bigger," he told me.

"I couldn't wait to get up the next day and explore further. We were pretty confident we'd found something important."

They could hardly have imagined how important it would be. What Sanj and his colleagues had discovered is reckoned to be the greatest unexploited reserve of copper, gold and silver on the planet.

A decade and a half later, Sanj is showing me around the vast, blue processing plant that rises up out of the sand where once he and his fellow geologists camped.

The $6bn (£4bn) that the Anglo-Australian mining giant Rio Tinto spent building this place was enough to help power Mongolia to the top of the list of the fastest-growing economies on earth.

The company is predicting that the Oyu Tolgoi mine will generate more than $8bn every year for the next 40 or 50 years. It is an astonishing windfall for a country with fewer than three million people.

And it comes at a time when other forces are also reshaping the nation.

Mongolia has always suffered the occasional extreme winter - they are known as dzuds - but local people say they are becoming more frequent. In recent years they have killed many millions of the double-humped Bactrian camels, yaks, sheep, cashmere goats and cows on which the nation's herders depend.

That has helped drive a great exodus of traditional nomads from the countryside and the growth of the most extraordinary shanty town I have ever seen.

The herders have brought their gers - or tents - to town and have set up home in the hills around the capital.

Over the course of a single decade, a quarter of the entire Mongolian population has given up the lifestyle that has sustained their families for millennia and moved to this sprawling slum.

And, of course, everyone who lives here is well aware of Sanj's great discovery down in the Gobi. Naturally enough, they want a share of it.

And that is where the problem lies.

The first ore - a rather modest mound of black powder - was produced during the couple of days I was there earlier this year. In time it should grow into a mountain, but the Mongolian government wants cash now and it is asking Rio Tinto for hundreds of millions of pounds more than was agreed for this year.

The head of the mining company's operations in Mongolia hinted darkly to me that countries that change the rules like this risk killing the goose before it has laid any golden - or, for that matter, copper - eggs.

"Is that a threat?" I asked.

"Oh, no, no, no," he replied.

Yet the two parties have been locked in "discussions" for over a month now.

Back at the mine in the Gobi, however, Sanj seems unperturbed by the dispute.

One senses he has been in the business long enough to know that squabbles over how the Mongolian government and Rio Tinto divide the spoils may delay the project but it will not end it.

He knows that a prize this valuable will eventually be exploited.

But that leaves the really big question unanswered. Can the government ensure that every Mongolian benefits from Sanj's extraordinary discovery?

How to listen to From Our Own Correspondent:

BBC Radio 4: A 30-minute programme on Saturdays, 11:30 BST.

Second 30-minute programme on Thursdays, 11:00 BST (some weeks only).

Listen online or download the podcast

Link to article


MMC closed -1.62% to HK$3.03 on Friday

BofAML cuts MMC (00975) to "neutral" & HK$3.4

[ET Net News Agency, 21 March 2013] BofA Merrill Lynch cut its target price for Mongolia Mining Corporation (MMC)(00975to HK$3.4 from HK$5, and downgraded the stock to "neutral" from "buy". 

The research house cut its 2013 earnings by 29% on lower clean coal volume guidance (down 7%), a lower clean coal ASP (down 3%) due to a weaker coking coal price outlook, and a slightly higher unit cost (up 3%) on higher-than-expected transportation costs in 2012. 

According to management, the hard coking coal ASP approximated US$107/ton YTD, much lower than the average of US$139 in 1H2012. In view of uncertainties from property tightening and potential steel mill suspension on environmental protection measures in Tangshan, BofAML is less optimistic on coking coal prices for the rest of the year amid abundant supply and rising inventory. 

Link to article


Xanadu: Investor Presentation, March 2013: "Building a leading copper & gold company"

March 21, Xanadu Mines Limited (ASX:XAM) --

Link to preso


Eumeralla Director Adds More Shares

March 22 (Cover Mongolia) Non-Executive Director James Hyndes of Eumeralla Resources Limited (ASX:EUM), which owns the Chuluun Khoroot Tungsten Project in Dornod and signed option agreements to acquire tin/tungsten assets in Myanmar, announced he bought 247,700 shares for A$29,724 on 20 March 2013.

Link to notice



March 21 -- Newera Resources Limited (ASX: NRU and NRUO) is pleased to advise that the Company will undertake a priority offer to its listed option holders (Priority Offer), being those holders of listed options (ASX: NRUO) exercisable at $0.03 each and expiring on 30 June 2013 (Options).

A record date for determining those option holders eligible to participate in the Priority Offer (Eligible Optionholder) will be announced shortly (Record Date).

Under the Priority Offer, each Eligible Optionholder will have the right to subscribe for one (1) new option to acquire a fully paid ordinary share in the Company (Priority Offer Option) for every one (1) Option held as at the Record Date.

Each Priority Offer Option will have an issue price of $0.0005, be exercisable at $0.03 and will expire on or before 16 January 2015. The Company will apply for quotation of the Priority Offer Options on the ASX.

The Priority Offer will be made pursuant to a prospectus to be lodged with the Australian Securities and Investments Commission and the Company intends to hold a general meeting of its shareholders in May at which it will seek approval to grant the Priority Offer Options, including those to be issued to related parties of the Company in their capacities as existing Option holders.

A notice of meeting to seek the relevant shareholder approvals will be announced and despatched to shareholders within the coming weeks.

Link to release



March 21 (MSE) Financial Regulatory Committee (FRC) has approved an offer to buy 15,422 shares equal to 29.10 percent of Khereglee Impex (MSE:HIE) for not less than MNT 3,687 /three thousand six hundred and eighty seven/ per share, made by L.Chuluunchimeg and Kh.Budragchaa, related parties that currently hold total of 53,000 shares or 70.90 percent of the Company.

According to FRC's resolution, the offer is valid for 60 days beginning March 13, 2013.

Link to release


Mogi: the most decent daily MSE trading updates from BDSec, only wish it was more consistently daily


21 March 2013 (BDSec) – While MSE Top 20 ended essentially flat, almost two stocks rose for each that fell on the Mongolian Stock Exchange. Hermes (HRM) was MSE's most actively traded stock, with more than 232 thousand shares traded at a value of MNT 24.39 million (US$ 17.42k). Hermes closed 4.56% higher today after losing 4.36% yesterday. 

Atar Urguu (ATR) shares climbed 4.17% today to close at an all-time high at MNT 50,000.

Construction material producer Ulaanbaatar BUK (BUK) lost 11.11% to its lowest since February 7, 2013. Eermel (EER) lost 8.64% to finish at MNT 2,558. 90% state owned Shivee Ovoo (SHV) dropped 5.60% to MNT 7,000.

Link to article


BDSec: Hidden value of Mongolian stock market

March 22 (BDSec) After we sent out some news about a company which has just won the government tender to build a 1000km highway, one of our clients got back asking how come the company's stock price goes down when there is actually positive news. This has lately been the case in the Mongolia stock market where what's actually happening with the companies or the economy doesn't always translate into the market or the share prices unless it's especially meaningful.


The chart above is a good example of how meaningful news announcements have affected the market throughout last year. While those not mentioned, such as the ongoing negotiations between the Government of Mongolia (GOM) and Rio Tinto, the owner of the biggest mining project in the country, Oyu Tolgoi (OT), as well as the upcoming presidential election which is in this June are starting to impact stock prices. But from a more positive perspective, the recent loan to OT sponsored by the EBRD and IFC could potentially raise up to US$ 4B worth of proceeds, a huge number. There is also the general expectation that the political and legislative environment would be less unpredictable following the election.

However, this might lead some to think that there is too much influence from political issues which, in reality are fairly irrelevant to local companies and profits. These companies take advantage of local economic growth and are largely insulated from political risk. As such, this has also led us to think it might not make sense to judge the local market performance as it appears on Bloomberg or elsewhere and to look at questions like how did the market actually perform since the beginning of last year? What factors have been affecting the fact that it had declined nearly 30% and where we could see a potential recovery from a bit different angle?

MSE-listed companies announce strong results despite struggling market

When you take a closer look at the components of MSE Top 20 index you will see many of them have performed exceptionally well apart from a few coal stocks, which encountered unique challenges in 2012. As most people are aware low coking coal prices globally hurt not only the locally listed stocks but also larger companies like Mongolia Mining Corporation which is listed in Hong Kong Stock Exchange. The main component of the coal stocks in the Index is Tavan Tolgoi JSC (TTL:MO or TTL) which has nearly 30% weighting of the whole index, skewing overall performance.

TTL is one of many local coal exporters hit heavily by disappointing coking coal industry performance and saw more than an 80% of decline in its 2012 net profits. This explains the large selloff in the overall index, with its 30% of its weighting. TTL's poor performance offset most of the gains brought by the other components no matter how big or small they were. Therefore, we took TTL along with its fellow coal producers out of the index to see how the market would have performed without the heavy weighting of large local coal companies.


As you can see from the previous chart the non-mining companies are doing fairly well even if the mining sector contributes hugely to the economy. These non-mining companies include beverage, bread, meat and dairy producers to clothing and construction material manufacturing, telecommunication operators to plumbing and logistics services providers. These companies are seeing strong growth, along with ever increasing GDP per capita and business opportunities. Despite their solid growth over the recent 5 to 7 years, the stock market as a whole has always been overly influenced by local mining stocks, most of which even having no relation to the international markets, such as thermal coal producers. They are experiencing a similar rate of growth as non-mining companies, due to the increasing energy demand in the local market.

We believe all these factors create a market that is becoming more and more undervalued, which once it can get passed the current struggles it's facing, could begin a bull market that could last for decades. Investors should also bear in mind how close we are to see OT starting production and the government has finally started investing into infrastructure, which has a huge importance to unlock the real economic growth.

In order to support my points I have picked 10 names randomly out of the best performing 30 companies listed on the MSE to see how they have performed in 2012 in terms of financially, I ended up with some interesting numbers. First and foremost, their average valuation based on PE ratio has come down by more than 25% even if their share prices went up around 30% on average (evidence that the non-coal stocks have beaten the market by far). This is actually a result of an average 32% increase in net profits after tax of the companies picked. As you can see, several companies had an outstanding year (**all financial numbers in million USD except share prices).


Coal price pulls the trigger for initial recovery

Given the influence TTL has on the whole market, the first catalyst to look for in relation to a potential recovery would be coking coal prices in China. As mentioned before the coking coal price has underperformed in 2012 along with the thermal coal price due to a weak demand on steel products globally. However, we have noticed a strong recovery in the thermal coal price which would certainly affect the coking coal price as the Chinese economy gets better in the 2nd half of 2013. Whereas, the impressive performance of the copper price in recent months signals commodities prices are gaining strength and may rally in 2013, which is music to ears of the Mongolian economy.


In conclusion, the Asian markets including Japan, Australia and potentially China seem to be getting better and better since the start of this year and it should help investors gain confidence and look for more opportunities in places like Mongolia. Especially if we see the rally in commodities prices that we anticipate.

In the meantime, we strongly believe the political noise will just disappear or start to draw less attention because it's too risky to have a negative policy towards foreign investment much longer. Last week the GOM decided to take non-government owned companies out of the strategic foreign investment law and a few weeks prior to that, the president spoke against submitting the draft foreign investment law to the parliament in favor of creating practices before coming up with regulations.

After all, we think the commodities prices will prove more decisive for the local stock market to recover rather than the consequences of the ongoing talks on OT, because the mine will surely start and begin to contribute to the economy. Once the market starts recovering there is every chance for it to end up as a decades lasting bull market as already mentioned before.

Link to report


BoM holds FX auction

March 21 (Bank of Mongolia) On the Foreign Exchange Auction held on March 21st, 2013 the BOM received from local commercial banks bid and ask offers of USD and CNY. BOM has refused for the bid and ask оffers. 

On March 21st, 2013, The BOM received MNT Swap agreement offer in equivalent to 110 million USD from domestic commercial banks and BOM has accepted all the offers for swap agreements.

Link to release


BoM issues 1-week bills

March 22 (Bank of Mongolia) BoM issues 1 week bills worth MNT 99 billion at a weighted interest rate of 12.50 percent per annum /For previous auctions click here/

Link to release


Mongolia to investors: I want you back

Ulaanbaatar, March 21 (Terrence Edwards, bne) The government of minerals-rich Mongolia is beginning to exhibit a return of warm feelings towards foreign investors with winter's thaw. 

After nearly 10 months of increasingly frosty relations with foreign investors that began with the passing of the Strategic Entities Foreign Investment Law (SEFIL), the government is making noises about drawing up an amendment to the law that relaxes restrictions on private investors. 

SEFIL's passage was initially a defensive strike by government against a $926m bid from state-owned Aluminum Corporation of China Ltd. (Chalco) for a majority of coalminer SouthGobi Resources last year. Many Mongolians saw it as a step towards shackling their country to their southern neighbour, even as it was experiencing a mining boom that helped propel economic growth to 17.3% in 2011, cited by many as the highest in the world that year. 

An election was fast approaching when the Chinese bid came and voters were growing increasingly discontent with foreign ownership of Mongolian assets. "For many seekers of political office, the rhetoric of resource nationalism is an attractive campaign platform, as further evidenced by recent proposals to increase the levels of taxation on mining firms, which are generally perceived as foreign dominated," wrote law firm Hogan Lovells to its clients as the SEFIL legislation was being considered by policymakers. 

The law prohibits companies from purchasing more than about a third of any asset within the mining, banking and finance, or communications sectors without first receiving approval from a government regulatory committee. Majority ownership of entities valuated above $76m needs additional approval from Mongolia's parliament. The law's vaguely defined terms, 45-day waiting periods between steps of approval and the complete absence of a regulatory mechanism made the law appear as a blockade against foreign investment. 

The next strike was a proposed new Minerals Law that greatly restricted how entities could manage their mining licenses and forced companies to mine past the point of profitability. The draft law came direct from the president's office, and with a presidential election on the way one could surmise last year's mistake was being repeated. 

According to projections from Brian Fisher of economic consulting firm BAEconomics, if passed in its current form, the law would result in 4 percentage points less annual GDP growth on average over the next two decades, and the same for GDP per capita. "Under the proposed mineral law, all sectors of the economy would be significantly smaller than they would be under the existing mineral law," reads a slide in a presentation by Fisher given to the Business Council of Mongolia, which has 239 member organisations. 

Scared off 

Inevitably, foreign direct investment (FDI) began slipping away with the deteriorating investment climate. Ulaanbaatar-based investment boutique Mongolia International Capital Corporation reported that February saw the lowest inflow of FDI on record since 2010. Little enthusiasm for Mongolian investment opportunities and poor global economic conditions brought Mongolian GDP growth down to 12.3% for 2012, when many felt it could have surpassed its 2011 rate had it not been for SEFIL. 

But in recent weeks the government has appeared to put the stick away. Mongolian President Tsakhia Elbegdorj announced in February plans to revise the mining legislation and delay submitting it to parliament until October – after the presidential election has taken place. 

And then this week Mongolian Investment Banking Group released a note to investors reporting that Prime Minister Norov Altankhuyag was working with his government to amend SEFIL to diminish its scope to just state-owned entities. Furthermore, it has been suggested that the $76m threshold may be raised or removed completely. 

But if Mongolia is going to continue riding this wave of goodwill employed by these gestures, analysts say the politicians will have to learn that FDI doesn't necessarily mean it must be shackled to the interests of a few foreign corporations and governments. It will also have to learn to stand by agreements made, no matter who holds the reins over the country. Though the incumbent Elbegdorj is strongly favoured to win June's presidential election, investors should not have to worry about whether past deals will be honoured if the head of state should change. It will also be up to the Mongolian parliament to keep the private sector in mind when that legislation eventually reaches them. It will be at their discretion what needs to change in the draft laws that the president submits to parliament. 

After all, you can only throw one out into the cold so many times before they finally find a new home and hearth to warm up by. 

Link to article



March 21 (Allens) In brief: There are reports that the Mongolian Government is considering amending its controversial Law on Regulation of Foreign Investment in Business Entities Operating in Sectors of Strategic Importance (colloquially known as the Strategic Entities Foreign Investment Law) to make Mongolia a more attractive destination for private inbound investment. Partners David Wenger (view CV) and Igor Bogdanich (view CV), Senior Associate John Koshy and Lawyer Manduul Altangerel report.


The proposed amendment to the Law on Regulation of Foreign Investment in Business Entities Operating in Sectors of Strategic Importance (the Law) is the latest turn in the development of Mongolia's foreign investment framework.

As we noted previously, the Law was introduced at a time when the Government of Mongolia was concerned about the apparent lack of controls over foreign investment in Mongolia, and during a parliamentary election campaign.

Broadly speaking, the Law classifies and regulates foreign investment into two categories: foreign investment into sectors of strategic importance, and foreign investment by foreign State-owned entities.

Under the first category, the Law applies to entities engaged in sectors of 'strategic importance'. These sectors are minerals, banking and finance, and media and communication.

Under the second category, foreign State-owned legal entities or businesses with foreign state ownership are required to procure consent from the Mongolian Government (Cabinet) to make any investment in Mongolia.

The introduction of the Law created uncertainty for foreign investors in Mongolia, particularly in the mining sector, which had attracted the most interest from foreign investors. This uncertainty has dampened foreign investor sentiment towards Mongolia.

The proposed amendment would have the effect that the Law would no longer apply to foreign private entities investing in Mongolia. The reports indicate that the Law will continue to apply to State-owned Enterprises or entities with foreign State ownership.

It is understood that the Government of Mongolia has separately developed implementing regulations in respect of the Law. However, the status of those regulations is not yet clear.


If the proposed amendments to the Law are passed, this could potentially give rise to renewed foreign investor interest in Mongolia. The critical issue will be the terms of the proposed amendment, and other relevant sector specific regulation.

For example, in regard to the mining sector, the Mongolian Government has been considering the introduction of a new Minerals Law. The current draft Minerals Law has been met with criticism from participants in Mongolia's mining industry on the basis that, if enacted, the law will impede investment and development of mining projects in Mongolia. However, in another recent development, debate on the draft Minerals Law has been postponed until after the upcoming Presidential election scheduled for the second half of May of this year. It is hoped that this will allow for further consultation between the Mongolian Government and key stakeholders.


The media reports suggest that the proposed amendment to the Law will be tabled in the State Great Khural (Mongolia's national parliament) during the upcoming Spring session to be held from April 5 until July 1.

We will continue to monitor this development closely and provide an update once the position becomes clearer.

Link to report


Mongolia to Offer Majority Stake in Planned Industrial Park

March 21 (Bloomberg) Mongolia hopes to bring factories, offices, technology and jobs to a corner of the Gobi Desert provided it can get investors for an industrial park envisioned next to a railway line that slices through the country and connects Russia and China.

The government approved a plan to sell 66 percent of the Sainshand Industrial Complex, Myagmarsuren Batgerel, director, department of restructuring and policy implementation in the State Property Committee, said today.

About $4 billion is needed to build infrastructure such as a power distribution network and a waste water facility, said Chuluunkhuu Ganbat, managing director of Liberty Partners, which is advising companies to invest in the park. Potential investments in the park, designed by civil engineering company Bechtel Group Inc. of the U.S., may exceed $10 billion, according to a Bechtel presentation seen by Bloomberg News.

"This industrial complex is going to help diversify the economy, bring technology, create jobs and provide more opportunities for Mongolia," said Ganbat, a Columbia University-educated banker, who spent six years working for Germany's Commerzbank AG on Wall Street.

Sainshand, a city of 20,000 people and 420 kilometers (261 miles) southeast of the capital Ulan Bator, may eventually house coking coal plants, a copper smelter and facilities to process food, make clothes, iron pellets and cement, he said.

Raising the $4 billion could take as many as five years and an investor presentation is scheduled for early April, Ganbat said, without providing names of interested parties.

Development Bank of Mongolia is considering lending 14.1 billion tugrik ($10 million) to cover engineering and environmental impact studies for the project, Chief Executive Officer Jan Jing Kim said in an interview this week.

Link to article



Ulaanbaatar, March 20 /MONTSAME/ For Effective Sovereign Wealth Fund Management, the Government of Mongolia and World Bank Group Partner started Wednesday a High-level International Conference.
Some 100 high-level policy makers and MPs have gathered to discuss options for Mongolia in managing its mineral resources revenue at an International Conference titled "Effective Sovereign Wealth Fund Management", co-organized by the Ministry of Finance of Mongolia and the World Bank.

It has brought together international practitioners from other resource-rich countries who can share their expertise on Sovereign Wealth Funds, so that Mongolian policymakers can make better informed choices that will best serve Mongolia's vision for shared prosperity through effective management of its mineral revenue.

The PM N.Altankhuyag made the opening remarks. Following it, two keynote speeches were delivered by Ch.Ulaan, the Minister of Finance, and by Mr Roger Schjerva, Norway's Deputy Minister of Finance. Welcoming remarks were given by Ms Coralie Gevers, the Country Manager of the World Bank. Discussions are held and led by some Ministers and by N.Zoljargal, the president of the Bank of Mongolia, as well as MPs including heads and members of Economic and Budget Standing Committees.

Mr Schjerva intends to touch upon his country's experience with managing natural resource over the last four decades and its globally renowned Sovereign Wealth Fund. The speech is followed by presentations by internationally distinguished guest speakers. Mr. Rolando Ossowksi, Former Assistant Director of the Fiscal Affairs Department, International Monetary Fund will overview fiscal management framework and resource funds management in resource rich countries such as Mongolia.

Mr Roberto De Beaufort Carmago of the World Bank, a leading expert on Sovereign Wealth Fund, will introduce key mechanisms of Sovereign Wealth Funds including governance and operation aspects. Ideas and views will be exchanged between Mongolian participants and high-level international practitioners from other resource rich countries with successful natural resource management practice and Sovereign Wealth Fund experience, including Norway, Chile, Botswana, Trinidad and Tobago, Abu Dhabi and Timor-Leste.

The conference will be wrapped up by discussions on options for Mongolia by top policy makers and MPs of Mongolia.

Mongolia is experiencing a major economic transformation thanks to its vast mineral resources. It has been one of the fastest growing economies in the world registering economic growth of 17.5 percent in 2011 (Mogi: 17.3%) and 12.3 percent in 2012. Estimated to have the potential to provide at least a third of national GDP, the development of the Oyu Tolgoi (OT) copper and gold mine--along with other mineral discoveries--promises to transform this nation's economy. The natural resource revenues provide a great opportunity to significantly enhance national wealth and shared prosperity across all Mongolians for generations to come.

Going forward in Mongolia, prudent fiscal policy and proper management of mineral revenues will be critical to ensuring stable and sustainable economic growth and to turning the expected mineral revenue streams into a strong foundation of prosperity for future generations. In this context, the Government of Mongolia has been working to develop a comprehensive framework for resource fund management. "As the Government defines a set of concrete actions including drafting a new legislation that will stipulate guidelines of mineral wealth management, the International conference will help develop a consensus around key issues", said Mr S.Purev, the Vice Minister of Finance, underscoring the importance of the conference.

Large mineral revenue windfalls do not come without significant challenges. Increasing reliance on mineral resources makes the Mongolian economy more vulnerable to highly volatile mineral market fluctuation. "This international conference will be a forum to learn how other resource rich countries successfully overcame challenges and to discuss options for Mongolia to transform volatile mineral revenues into the permanent source of future prosperity," said Ms Coralie Gevers.

The two-day International Conference will be further extended to an open discussion with university students who will lead Mongolia's economy in the future. A Student Forum on "International Experience on Managing Natural Resource Revenue" will be held on March 22 at the National University of Mongolia, with over 100 university students and professors. This Student Forum will bring three distinguished international guest speakers to discuss principles of sound mineral resource management framework and country experiences from Chile and Botswana which are internationally accepted as best practices.

Link to article (click English and try link again)


Former Head of the National Development and Innovation Committee, now part of Ministry of Economic Development

Mongolia and MINING: The policy evolution: what is next?

March 18, Ch. Khashchuluun, UBRM Consulting for Business Council of Mongolia --

Link to preso



March 19 (InfoMongolia) According to interview with Chairman of Petroleum Authority G.Ulziiburen by Montsame reporter, Mongolia to supply local demands of petroleum products by exported crude oil to China.

When Mongolia to start its local supply of petroleum products by the means of own mined crude oil?

Mongolia exports its crude oil to China as part of additional supplement of raw product to domestic oil refineries, which means China is an importer country of oil.

Following the negotiation with authorities of "China Oil" affiliated the China National Offshore Oil Corporation, we reached an important consensus, in particular Mongolia and China are to sign a document on exchanging crude oil drilled in Mongolia with end-products processed in Inner Mongolia, Autonomous Region of the PRC. Thereby, the first petroleum products from China will be delivered at the end of this month and from April, 2013 10,000 ton of fuel to be supplied regularly per month.

Does it mean prices at gas stations will go down, because to import cheaper fuel rather than imported from Russian Rosneft Company?

Concurrently, it will not affect so much to the local market, but meantime the expansion works at Zamyn-Uud switch-loading yard to complete by May, we plan to import regularly 20,000 ton since September 2013. However, we cannot promise at the moment that the prices will go down, nevertheless some changes would occur positively in the future. Besides we are continuing negotiations from other sources to import cheaper fuel.

Mongolia has been importing petroleum products from Russia since early times, the only exporter to set a unit price that was balanced at local markets frequently. So, this fuel to import how much would cost per unit?

The main supplier Rosneft's unit price is comparatively high that has been coherently influenced by market situations. Therefore, the Company's export to Mongolia has been decreasing in recent estimations, for instance in 2012 Mongolia imported a total of 1.2 million ton of oil, of which petroleum products comprised 1.1 million ton, whereas 64% was imported from Russia's Rosneft Company and the rest amounted from other sources such as Gunvor Group, Russia's TNK-BP, GazProm, South Korea's SKEnergy, Hyundai Oilbank and other supplier entities.

As of the first three months of 2013, import from Rosneft has been decreased by 30% that influenced by unit price differences, but it does not mean Mongolia will stop to import from main supplier Rosneft.

The unit price of fuel to import from Inner Mongolia will be calculated by comparison of Mongolia's export of crude oil to China and currently it is not possible to say the exact price, but definitely would cheaper than Rosneft by 100-170 USD per ton.

Recently, Mongolian officials held bilateral talks with authorities of Rosneft Company, following the meeting it was announced to keep the price at certain level. What was the last decision?

On January 11, 2013, we met with Rosneft authorities in Russia, after at the initiation proposed by Ambassador of the Russian Federation to Mongolia, we conducted a meeting in Ulaanbaatar on February 08, 2013. During these dialogues, we were expressing that the unit price importing from Rosneft was comparatively high for Mongolia than Russia exports to other nations.

Consequently, Mongolia is not capable to import as before, also we announced that Mongolia is under negotiation with other sources to import, moreover within the meetings we requested to set a unit price by market formulation. Afterwards, parties reached a consensus and negotiated to set a unit price by international stock market calculations, and new bilateral talks will start soon.

Before, this kind of visible formulation was not done, where each month around 25th Rosneft used to forward its unit price and we used to set a price at our retail gas stations. In the frameworks of formulation, we can set a unit price for several months and it is observed to be decreased.

How much petroleum Mongolia uses for its local demand per month?

By an approximate estimation, about 70,000 ton of fuel sold at gas stations, but it may various depending on winter or summer seasons, as of peak usage it reaches up to 100,000 ton of fuel per month.

So, today how many oil importing companies are in Mongolia, and how much crude oil is drilled?

At present, there are 30 sites in Mongolia, of which 21 were established an agreement of product share, whereas in 3 sites are being drilled and in the rest 18 sites 14 companies are conducting preconceptional studies.

These 3 mentioned sites being drilled are Zuunbayan, Tamsag-19, and Tamsag-21, and from these sites 482,000 ton of crude oil or 3.6 million barrels were drilled in 2012.

In accordance with starting of processing its crude oil, Mongolia needs to increase the volume of output?

In 2013, we purposed to increase volume from these 3 sites up to 660,000 ton or about 5 million barrels and export to China at world market price, consequently the Government's share will be accounted into state budget with no difficulties by the means of convertible currency.

How much benefits Mongolia makes from export of crude oil?

In the period of 1998-2012, 332 billion MNT (approx. 237 million USD) was accounted into state budget, besides only in 2012, 123.4 billion MNT was transferred and we plan 146.8 billion MNT to deposit into state budget in 2013.

How about the quality of processed oil in Inner Mongolia? You said about 660,000 ton to export in 2013, but how much oil from this volume will be converted into fuel?

This depends on technology, during so-called Socialist period about 60-70% of clear outputs were produced, but due to recent technology this estimation reached up to 80-90% of crystallites. Nevertheless, the factory in Inner Mongolia to produce endproducts with crystallites of 80%, which means the quality is equivalent to Euro-3 standard. Mongolia's current consumption of fuel imported from Russia is equivalent to Euro-2 standard.

Moreover, we are planning to give a Mongolian brand name to a fuel refined in Inner Mongolia like MONGOL-93, instead of AI-92 that being used to be for many decades at Mongolia's gas stations, and most noticeably these products will be released at gas stations from next two weeks.

It is good to hear Mongolia's crude oil being refined abroad, but when Mongolia will process its own oil?

According to Government's Action Plan for 2012-2016, an oil refinery factory with capacity of at least 1 million ton was included, thereby construction of Mongolia-Japan joint oil refinery "Darkhan-Petroleum" plant in Darkhan-Uul aimag (province) is to start within this year and to be accomplished by end of 2015 with capacity of 2 million ton to produce per year, where the Feasibility Study was completed very well.

Ultimately Mongolia to produce its own petroleum products in the near future.

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Mining Minister Reports on Current Status of Industry and Petroleum Supply

March 21 (InfoMongolia) Minister for Mining of Mongolia D.Gankhuyag reported the current activity of the relevant sector during press conference held in the Citizen Hall of the President's Office on March 20, 2013.

According to his statement, a total of Mongolia's mining industrial output increased by 67% in 2012, compare to 56% in 2008, of which export of mining products comprises 91.3%.

In 2012, Mongolia mined 31.1 million ton of coke, whereas 20.5 million ton was exported and accounted into State Budget 828.5 billion MNT (approx. 590 million USD). Also, 14,483,138 barrels or about 2.3 million ton of crude oil was drilled, of which 14,090,509 barrels were exported that also accounted into the State Budget a total of 332.3 billion MNT.

In the years of 2010-2012, 1,070-1,610 billion USD's investments were made per year, besides in 2013, 630 million USD intends to be invested. The latter amount shows less compare to previous years, because it is connected directly with Oyu Tolgoi Project, but from the second quarter of this year, the construction of the oil refinery industry, power plants and concentrating factories are to start, hence the investments would be increased thereby.

Also, reporters asked whether Mongolia to face with petroleum shortages or not, Minister replied, "In order to get rid of petroleum supply from one route (Russia), we are negotiating with third parties that brings some positive results.

It was mentioned many times that a unit price of petroleum imported from Russian Rosneft Company is comparatively high than a price on the international markets, hence a competitive capacity is coherently decreased at Rosneft, concurrently Mongolia imports its 50% of monthly supply from other sources. In particular, we import fuel from Switzerland (Gunvor Group), South Korea and China that cheaper by 100-200 USD per ton than Rosneft.

On March 19, 2013, a group led by Chairman of Petroleum Authority G.Ulziiburen and Advisor to Mining Minister Ch.Tumenbayar has concluded an Agreement with authorities of a Chinese company to import 10,000 ton of fuel for upcoming April, which costs less by 150 USD per ton".

Gunvor Group Ltd

Gunvor Group Ltd is a global commodity trading company registered in Amsterdam, with its main trading office in Geneva, Switzerland. Gunvor also has trading offices in Singapore, the Bahamas and Dubai, with a network of representative offices around the globe. The company operates in the trade, transport, storage and optimization of petroleum and other energy products, as well as having investments in oil terminal and port facilities. Its operations consist of securing crude oil upstream and delivering it to market via pipelines and tankers.

Back in history, after working in the oil and gas industry for more than two decades, Gunvor Group's CEO Torbjorn Tornqvist and his long-time business partner Gennady Timchenko saw an opportunity in 1997 to create a new organization to support infrastructure development in the Russian oil export sector. They founded their new company in 1999, which is the fourth largest crude oil trader in the world after Glencore, Vitol, and Trafigura, and is controlled by Gennady Timchenko and Torbjorn Tornqvist, Gunvor's largest single supplier of crude oil is the Russian Federation.

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Ulaanbaatar, March 20 /MONTSAME/ A coal-fired thermal power plant to be established in Mongolia. An activity to create such power plants in any possible countries has begun in Japan this year with a participation of "Hitachi" company.

Mongolia's Vice minister for Energy D.Dorjpurev and Kazuyoshi Akaba, a Senior Vice Minister of Economy, Trade and Industry of Japan, got au fait with ther plant construction plan on March 5. It says, for example, that ther power plant is to be erected together with the power-saving transmission line in order to reduce an energy loss in outskirts of the UB city.

It is said that, by exporting the coal-fired plants Japan wants to reduce a global warming.

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Mortgage backed securities as an option for housing problems in Mongolia

March 21 ( Within the 100,000 housing unit program, Mongolian Housing and Finance Corporation (MHFC) and Mongolian Development Bank has been giving out a 6% AER loan through State Bank to the young families and also to those who are purchasing apartment for the first time (Mogi: must've not heard the program has been long stopped). The actual cost of the loan is 10%-11% which government subsidizes the rest. It is a fact that taxpayers are paying the other eligible purchasers for their housing problems. It is partly a solution for the disastrous growing air pollution in Ulaanbaatar (not Ulan Bator) that comes from burning mostly low quality brown coal and other materials for heating in yurt or ger areas. (Mogi: yurt areas?)

The capital city is in desperate need for solving its' air pollution problem that has been growing worse after numerous air pollution reduction programs and policies. It had tried to implement programs such as efficient subsidized furnaces and high quality coal etc. The outcome is not showing any progress to this day. The Mayor Mr. Batu-Uul.E campaigned in the city election to build infrastructures to ger areas and turn them into town-houses with running water and central heating. It is a romantic idea far from being realized, at least for two decades.

The MHFC  in the other hand keen on raising debt as sovereign bond to fund the housing projects. It seems like a viable solution after the Chinggis Bond has been oversubscribed by 10 times last year on capital markets. It is a macroeconomic statement that if more households live in apartments they will have to work-hard (encourage people to seek work) to pay the mortgage (Mogi: so people who live in ger areas don't work or work hard?), and will have less time spending on fending and maintaining gers (Mogi: huh?). The downpayment for an apartment loan from a regular local bank is as much as 30%-40% in before engaging them into in 1.2%-1.7% monthly 'mortgages'. Effectively the families are paying annual rate of 15%-22%.

It is a life-time investment for Mongolians to have a centrally heated apartment with running water as 70% of the city's population live in ger areas. The population is young and keen to work hard for a reasonable rate to live in apartments (instead of luxurious half a million dollar mansions which is nearly impossible for the majority) (Mogi: just nearly?). Growing economy, high inflation, and demand for luxurious apartments are biting the lower and middle income families' chance to become the new middle-class. High growth in economy invited international real estate investors and companies to invest in the city's newly built shiny offices and apartments for the prospect of Mongolia's mining boom. When the economy is in real-estate bubble, it is an option for the construction companies to earn a quick profit.

If we could pool the mortgage securities and arrange them into appropriate tranches and create CMOs (collateralized mortgage obligations), we will have lower mortgage rates and systemized long term payment to fulfill the international capital market requirements. The MHFC mentioned in the meeting with SGK's Committee on Petitions yesterday that the repayment percentage of the mortgage holders from State Bank is 99.6% with some late payments, and zero percent defaults.

The Ministry of Construction and Urban Development is stating that the price of apartments' one square meter can be as lower as 1 million MNT and still be profitable for construction companies. Again, it is a possible option to solve the housing problems after The Chingis Bond that had an oversubscription by 10 times at the time when it was issued. Currently the apartment per square meter ranges from 1000$-5000$ (1.4 million MNT – 7 million MNT)

We will also have take into account the environmental, water, heating and electricity issues. The infrastructure must be there to support the new housing development and make it socially and economically feasible. There is a lot of work to be done. However we are closer than we were 10 years ago.

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Ulaanbaatar, March 20 /MONTSAME/ The parliamentary Standing committee on environment, food and agriculture has started discussing a draft new wording of the package law on land.

The committee's head G.Bayarsaikhan MP underlined that the law on land is as important as the Constitution, and said a working group has been set up to thoroughly consider the draft package which includes laws on lands, on lands privatization, on land cadastre, and on land payment, and that these drafts are being discussed at parliament.

Present at the discussion were also representatives of the Ministry of Construction and Urban Development, Ministry of Environment and Green Development, of some projects and programmes and NGOs. They delivered reports and expressed opinions on the draft laws.

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Fair Competition Agency Takes Aim at Mongolian Airlines Group

March 22 (UB Post) The Agency for Fair Competition and Consumer Rights (AFCCR) has written to the owners of Mongolian Airlines stating that the name of their airline, "Mongolian Airlines" has led citizens to mistake the airline with MIAT Mongolian Airlines and has noted that Mongolian Airlines is in violation of articles 12.1.2, 12.1.3 of the Competition Law for painting the words "Since 1956" on its airplanes, as the company was only established in 2011. The AFCCR has demanded that the company take urgent steps to cease this violation of the law.

According to a source, the company did not obtain the name "Mongolian Airlines" legally; that is, through obtaining a permit to use, own, and privatize this name from the State registration authorities. Furthermore, Mongolian Airlines has been conducting international flights for a year now and these international flights using the name "Mongolian Airlines" further support the charges that the company is violating the Competition Law.

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Ulaanbaatar, March 20 /MONTSAME/ A delegation led by N.Battsereg, a head of the "Justice" coalition's (Mongolian People's Revolutionary Party and National Democratic Party) faction has headed the Republic of Colombia and the Republic of Peru.

They intend to study an experience gained in artisanal mining. In other words, the delegation will get au fait with these countries' policies, laws, taxes and insurance matters that enable the power to manage and organize all those exploiting natural resources privately.

The delegation consists of D.Ganbat MP, a Deputy minister for Mining O.Erdenebulgan, a chairman of the Mineral Resources Authority B.Batbayar, a director of the State professional inspection agency G.Altansukh and others.

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Mogi: Hmmm. If the reason was misspelling in English, it'd be so funny if Louis Vuitton ends being written Лоуис Вуиттон or something in Cyrillic. Nationalism at its silliest

UB signs must now be only in Cyrillic or national script

March 22 (UB Post) In accordance with a decision taken by the Ulaanbaatar City Government in February, city district governors have begun enacting Resolution 37, which requires that entity names, signs and commercial billboards must be written only in Cyrillic or in the national Mongolian script. The resolution applies to both governmental and non-governmental entities. Those entities that do not comply with the resolution will face legal action and may even lose their operating permits.

The resolution was written to address the problem of company and entity names displayed on signs and billboards in Ulaanbaatar using foreign letters, often with spelling mistakes.

Journalists recently visited Sukhbaatar District to report on progress in the implementation of Resolution 37 and found that the District Governor has established a working group to manage the matter and the group is conducting a study in the district. The working group, comprised of around seven members, is identifying which entities in the district are in violation of the resolution and are sending those entities requests to conform to the resolution. Sukhbaatar District aims to complete the notification process by June.

According to the Deputy Governor of Sukhbaatar District, A.Lkhagvasuren, the district government will begin renovation and repair works on squares and streets in the district in early April and will at the same time ensure that the names and signs of governmental organizations and service entities are printed in a the same color, using the same design. Public trade centers will be permitted to use different colors and designs, however, to be distinctive and to illustrate their special features.

The decision to have government entity names displayed in the same color and design is intended to improve the appearance of displays and signs. But the cost of these changes has not yet been established.

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Ulaanbaatar might run out of water by 2015

March 22 (UB Post) A consultative meeting titled "The Queen River Tuul and Ulaanbaatar's Fate" was held on March 20 to discuss the limited water resources in Ulaanbaatar and the measures needed to address impending water shortages. According to the meeting participants, Ulaanbaatar will begin to face severe water shortages in 2015.

The consultation was organized by the Ministry of Nature, Environment and Green Development (MNEGD) in cooperation with the National Water Authority and the Tuul River Basin Administration (TRBA) and was held to mark United Nations World Water Day, which will be celebrated on March 22 worldwide. This year's theme is "Water Cooperation." The day aims to raise awareness of the potential for water cooperation and to promote innovative solutions for developing water cooperation.

The meeting participants noted that Ulaanbaatar and other parts of Mongolia will face severe groundwater shortages within the next few years. They emphasized the importance of effective water management, as water is vital for human life, and discussed the urgent need to implement controls on the use of water by households and business entities. The participants also formulated a water development management plan for 2013-2030. 

Below is brief interview with a senior official of the Data Control and Assessment Division of the TRBA, Ya.Boldbaatar, regarding the issue.

-Officials have reported that Ulaanbaatar will soon face water shortages. How much water is left?

-Ulaanbaatar city gets 98 percent of its water from groundwater. The city consumes 330,000 cubic meters (m3) of groundwater each day. At this rate, our city will begin to run out of groundwater in 2015.

-How is groundwater distributed?

-Groundwater is being distributed through four sources. The Central distribution supplies water to the area from West Central Intersection to Bayanzurkh District, and the remaining water is stored in Tasgan Pool. The Upper distribution supplies water via Tasgan Pool to the west side of Ulaanbaatar where the Third, Fourth, First, and Tenth Khoroolols are located. The Factory source supplies water for households and entities in Khan-Uul District, specifically 19th Khoroolol, 40 Myangat, 50 Myangat, 220 Myangat, and the railway station. The Makh Combinat supplies water to the area of Makh Combinat itself, the Oil Depot, Orbit, and Tolgoit.

-Surface water has also declined. A large number of fish are dying in the Tuul River too. Am I right?

-Yes. The Tuul, Selbe and Uliastai Rivers are the biggest sources of surface water. Water levels of the Tuul, Terelj and Khuin rivers have decreased. Worse still, the surface water in our country, especially in the Tuul river, is alarmingly polluted. Massive numbers of fish and fresh water animals are dying.

-It seems that although everyone worries about our drinking water, we are not doing anything to properly manage our use of it. What kinds of ways are there are to preserve our water resources?

-There is a way to access more groundwater through additional water well construction. It has also been proposed that we erect a concrete dam on the Tuul River, establish artificial lakes and pools, and recycle wastewater: treating it so that it can be used again. There is also potential to develop the Central Water Treatment Plant of the Ulaanbaatar Water Supply and Sewerage Authority (USUG) into a "Biogas Technology Complex" so as to treat sewage and use it for water supplies (exempting drinking water) and to form a bio-pond with the remaining water, which will support the Tuul River in times of drought.

-People are saying that we can solve the impending water shortages through redevelopment of ger districts. What do you say to that?

-A modern system has been proposed to manage ger district sewerage. Using this method, the sewage of households located above muddy soil with rocks or summer camp sites can be treated with nanotechnology. The treated water could then be supplied to bio ponds. Also, rainwater and naturally polluted (non-toxic) water can be treated, stored, and used too.

-How will you control business entities that consume water too much?

-The MNEGD and waste sector agencies are inspecting companies and installing water consumption calculators. The MNEGD is also requiring companies to conduct environmental impact assessments. If we introduce advanced technology for water saving into Mongolia, it will be easier to demand that companies contribute to water saving activities.

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Education should go beyond the needs of mining companies

March 24 (UB Post) Mongolia is currently leading the world in terms of rapid economic expansion due to its vast mineral wealth, but the country needs to ensure that it has a future after the minerals have been depleted. To realize this, Mongolia needs a productive and skilled workforce in all of its industries. Mongolia needs to make long term plans. Its education plan is perhaps the most important.

High quality education is vital if Mongolia is to utilize its mineral wealth efficiently and effectively so that the people of the country benefit from it in an inclusive and sustainable way, and avoid the negative impacts that were brought about by rapid prosperity elsewhere.

Mongolia's education sector suffered from underfunding and poor management after its transition to democracy and a market economy. According to the Oxford Business Group's (OGB) 2012 report, public spending fell from about 20 percent of the national budget during the Soviet era, to 11.86 percent in 2011. The student-to-faculty ratio rose and essentials such as textbooks dwindled. The quality of the education provided by many institutions fell and they became almost exclusively dependent on tuition fees. As noted in the report, "Long term capital spending on assets or the building of research facilities was impossible. The major institutions lived hand-to-mouth."

Recognizing the need for greater investment in education so as to improve the quality, the current "reform" government has allocated 20 percent of the budget to education.

The Ministry of Education has been looking for an effective education model since the collapse of the Soviet Union. Over the past two decades Mongolia has tested a number of replacements for the top-down schooling ideology that was dominant for about 60 years under Soviet rule. Reforms have taken place. For example, in 2008 basic education was extended from 10 years to 12 years. Consequently, some improvements have been made. The country has achieved a primary completion rate of 100 percent and the primary and secondary education systems have seen advances in recent years. But many of the old teaching methods remain. These methods are largely regimented and very much focused on rote memorization.

As noted in the Oxford Business Group's report, "The transition to more open, child-centric methods is a work in progress and incomplete, and students tend to complete their schooling lacking certain critical reasoning skills and are less well-rounded."

Higher education in Mongolia is one of the least effective among the education sectors in delivering good results. Mongolians receive high numbers of degrees and qualifications but many are unable to find work in their field. Around a third of graduates were unable to find employment in 2011. They are told that they are either not skilled enough in their respective fields or they chose fields that are not in demand.

But despite the lack of employment for graduates, demand for higher education continues to grow. In 1990, around 14,000 students received bachelor's degrees in Mongolia. This figure rose to around 90,000 in 2002. Higher learning institutions have been increasing in number to keep up with the demand among young people for higher education degrees, but the quality of the graduates of these institutions is inconsistent. In an attempt to eliminate low quality institutions, over the past decade the government has taken measures to close down and merge a number of colleges and universities. The number of higher learning institutions fell from around 200 in 2002 to 113 in 2010.

Due to the current nature of Mongolia's development, which is focused on mineral extraction, the labor market is mainly seeking graduates with qualifications in the fields of engineering, construction, banking, finance, and information technology.  As a result, the demand for higher education in these sectors has been increasing rapidly, but Mongolia's higher education institutes provide limited places for students in these fields of study. This is perhaps because there is a need for the people of Mongolia to think beyond the needs of the mining industry.

Peter Morrow, the Chairman of the American University of Mongolia is quoted in the OGB report as saying, "Education needs to go beyond engineering and accounting for big mining companies." He noted that "If the country really keeps growing that fast, not only the mining industry, but other areas like the environment, and social and regulatory issues in banking, will need qualified attention."

The OBG notes in its report that the area of education that is likely to have the most direct impact in terms of increasing employment rates of graduates is the technical sector, known as technical and vocational education and training (TVET). "The government, corporations and citizens alike, are aware of the mismatch between levels of education and available jobs. Hence, offering more courses directly relevant to the growth industries – primarily mining and construction – is one way of achieving supply-demand balance," the report observed.

TVET has been around for a number of years in Mongolia, but as with education in general, it has suffered from a lack of funding and outdated teaching methods. It also restricts entry into popular areas of study, for example the number of students studying animal husbandry is limited to 100, while the number of welders is limited to 1,500, and the number of builders is limited to 1,000. These limits seem to be set on an arbitrary basis, with no regard for the needs of the industry.

The TVET sector has received aid from several international donors, including the Millennium Challenge Account which has been working in Mongolia since 2009 on the construction and renovation of TVET schools, and other activities. A total of 41.6 million USD has been allocated in government grants to build five schools and reconstruct 17.

The Mongolian government has been very supportive of foreign partnerships in the education sector. In 2011 the American and British education systems were introduced through Cambridge International Examinations (CIE), an international provider of educational programs and assessments which operates in 160 countries. In 2012, the Ministry of Education and Science signed a Mongolia-Cambridge agreement whereby CIE will provide educational services, assist the reform process, help bring bilingual education to state schools, and bring the country's education system in line with CIE standards. Several other projects have been implemented in Mongolia with the aim of reforming the education sector, including a 4.8 million USD grant donated by Japan in May 2012 for the government to re-establish the Teacher's Institute for Higher Learning.

Despite all of the efforts so far, much remains to be done to improve local education standards and address the issues facing students.

The OBG suggests that the status of higher education institutions as private or public institutions, and the recognition of their non-profit status, is another thing that has to be settled. Tuition fees are another issue. University fees are around 2 million MNT (1,450 USD) per year, on average, but the average annual salary is around 4,800 USD. Most families cannot afford to set aside a third of their annual income to pay for a child's higher education.

That said, when asked about the obstacles students in Mongolia face and what they need, the President of the Mongolia University of Science and Techonology's Student Union, Myagmardorj said, "What students are now looking for is not cheaper education, but good quality education. I and many others are willing to pay for quality, but the current standards are too low. In a typical lecture at our university, the lecturer reads chapters from a course book, while around 70 students take notes. The classes have no depth and no technical knowledge or hands-on experience to give to the students. We want to learn, we want contribute to our country's prosperity and future, but we cannot do it with the current system."

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Mongolia ranks 65th in Democracy Index 2012

March 21 ( The Democracy Index 2012, complied by the Economist Intelligence Unit, measures the state of democracy in 167 countries. Of these 166 are sovereign states and 165 are member states of the United Nations.

According to the latest figures of the Index for 2012, Norway ranks the highest country in the index being the most democratic, while North Korea scored the lowest, remaining at the bottom in 167th place, the same as in 2010 and 2011.

Each countries democracy is rated on a scale of 0 to 10, with 10 being the most democratic and 0 being the least democratic. Mongolia scored a total of 6.35 incoming in at 65th place, stepping up 4 positions compared to the 2011 Index (where the score was 6.23).

Countries are rated to be either Full Democracies, Flawed Democracies, Hybrid Regimes or Authoritarian regimes. Compared with Asia and Australasia as a whole, that ranked as a Hybrid Regime, Mongolia rises above with its ranking of 6.35 managing to scrape into the Flawed Democracy category. 

The Economist bases its ratings on: civil liberties, conduct of elections, media freedom, participation, public opinion, functioning government, corruption, and stability. The Index was first produced in 2006 with updated lists provided in 2008, 2010, 2011 and 2012. 

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Link to report


EU postpones Japan, Mongolia meetings due to Cyprus crisis

Brussels, March 22 (dpa) - The European Union cancelled an upcoming summit with Japan and a visit to Mongolia, due to the bloc's efforts to resolve the financial crisis in Cyprus, EU leaders announced late Friday.

"It is with regret that we have decided to postpone next week's EU-Japan summit," European Commission President Jose Manuel Barroso and EU President Herman Van Rompuy said in a statement. "The on-going efforts to find a solution for the financial situation of Cyprus require our presence in Brussels."

The leaders were due to meet Monday with Japanese Prime Minister Shinzo Abe, with negotiations toward a free-trade agreement atop the agenda.

"We reiterate the importance of EU-Japan strategic relations and would like to thank Prime Minister Abe for expressing his understanding," they said.

EU Trade Commissioner Karel de Gucht is to proceed with his visit Monday to Tokyo, the leaders said.

Barroso was due to begin the trip with a stop Saturday in Mongolia, which has likewise been postponed. He apologized to President Tsakhiagiin Elbegdorj in a personal telephone call.

"I explained that the on-going efforts to find a solution for the financial situation of Cyprus require my presence in Brussels," Barroso told the Mongolian president, according to the statement.

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Ulaanbaatar, March 20 /MONTSAME/ Mongolia has opened its Consulate in Kayseri city, Turkey.

Present at the opening ceremony on Monday were Mr B.Batkhishig, the Ambassador Extraordinary and Plenipotentiary of Mongolia to the Republic of Turkey; Mr Serif Yilmaz, the governor of Kayseri province; Mr Mehmet Ozhaseki, a Mayor of Kayseri city; Hasan Haskaraman, a director-general of the Silver Group and Honorary Consul of Mongolia.

The Ambassador gave opening remarks, and a photo exhibition and documentary about Mongolia were shown. The Mongolian students studying in Kayseri gave a concert as well.

During the ceremony, Mr Batkhishig met with members of the Kayseri Union of Young Businessmen to introduce to them an economic development of Mongolia, investments condition and the cabinet's policies. He also got au fait with activities of the Silver Group that supplies full combustion ovens to Mongolia.

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Ulaanbaatar, March 22 /MONTSAME/ A former Prime Minister of the Great Britain, Mr Tony Blair started his one-day working visit to Mongolia on Friday by invitation of Mr Ch.Saikhanbileg, the Minister of the Cabinet office of the Government. He arrived at 6.00 am in Ulaanbaatar.

He will be received by Mongolia's President Ts.Elbegdorj and by the Prime Minister N.Altankhuyag, and will share views on cooperation with Ch.Saikhanbileg and the Foreign Minister L.Bold.

He will also meet scientists and researchers and will give interview to the "Bloomberg Mongolia" TV and take part in the "Face to face" programme of Mongolian National Radio and TV.

After resigning as PM, he established several organization. A "Tony Blair Associates" firm provides, in partnership with others, strategic advice on a commercial and pro bono [free] basis, on political and economic trends and governmental reform; a "Tony Blair Africa Governance Initiative" helps some of Africa's most dynamic leaders deliver the change their people need to relieve poverty; a "Tony Blair Faith" Foundation promotes respect and understanding of and between the major religions and makes the case for faith as a force for good in the modern world; a "The Tony Blair Sports" Foundation increases number of volunteer coaches an officials so that more children and young people get the opportunity to play sport; an Office of the Quartet Representative, set up in 2002, consists of the United Nations, the European Union, the United States and Russia with a mandate to help mediate Middle East peace negotiations and to support Palestinian economic development and institution-building in preparation for eventual statehood; and a "Breaking the Climate deadlock" gains major political support for a framework for international agreement and implementation strategies (sectoral agreements, international standards, domestic policies) that will result in GHG emissions reductions consistent with the levels suggested as necessary by the scientific community by 2050.

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Ulaanbaatar, March 22 /MONTSAME/ In frames of his official visit to the USA, the Speaker of parliament Z.Enkhbold met Wednesday with Mr John Andrew Boehner, the Speaker of the United States House of Representatives.

He thanked Mr Boehner for a warm welcome and underlined that during 25 years, passed since the establishment of the Mongolia-USA diplomatic relations, the bilateral ties and cooperation have been developing at a high level based on common values.

The legislative bodies of the two nations have been actively cooperating, high level visits implemented have contributed to bringing of the bilateral relations and cooperation into a new level, the two Speakers agreed.

A number of resolutions adopted since 1991 by the US Congress on backing Mongolia's democracy, free elections and the market economy, have affirmed the US support and confirmed that our relations and cooperation have reached a high political level, Mr Enkhbold said. Mongolia wants to bring the ties into a strategic partnership level, he underlined.

Mr Enkhbold noted that Mongolia, who has good ties both with the North and South Koreas, can work as a mediator in considering urgent issues of the Korean peninsula.

He invited members of the US Congress to the parliamentary forum which will run in frames of the 7th Ministerial Conference of the Community of Democracies (CoD) this April in Ulaanbaatar.

The same day, the Speaker received Mr Ed Royce, the head of the Standing Committee on foreign affairs of the US Congress, to share views on the ties and cooperation between the legislative bodies and their factions.

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Columnist Allyson Seaborn has an intimate series of questions she'll be asking intriguing Mongolian Nationals each week. This new feature exposes their passions and memories about the land of eternal blue skies and sheds light on their past and future hopes. We look forward to bringing you on a new journey of discovery and hope you enjoy reading what these unique individuals have to share with readers.  

March 24 (UB Post) This week our third installment features Ch. Gankhuyag.

Ch. Gankhuyag – or simply "Gan" as he's known amongst friends, is a man with an illustrious career history. He's also however, a man of many colours and hidden talents – a man many would describe as "larger than life." Most people simply know him as the founder of Xac Bank and as a major player in the Mongolian financial scene, but there's a lot more to Ch. Gankhuyag than meets the eye.

He describes how, "We lost our father when I was twenty years old. This was a huge wake up call for me. I realized I needed to grow up and lead the family at once." And lead the way he did, both personally and publically – and in more ways than one.

I ask him if he could please send me a photo for publication and he responds by telling me to choose one from his public Facebook page which has an astounding number of "likes" and an even more eclectic array of action packed images. Wolves, fast cars, babies being held, charity runs and basketball games. That's right – Ch. Gankhuyag was recently elected President of the Mongolian Basketball Association. He's a man who's done it all, from leading large private companies to holding high-ranking public positions. Simply put, Ch. Gankhuyag is a modern day inspiration, demonstrating to eager young Mongolians that anything is possible in this rapidly evolving country if you simply put your mind to it.

Born in 1973, Ch. Gankhuyag first cut his teeth in finance as a floor supervisor at the Mongolian Stock Exchange, but this was just the beginning. He's held the position of CEO of Xac Bank since its founding to 2009. At the same time, he led the founding of Xac Bank's holding company Ten Ger Financial Group and its numerous subsidiaries – and that's just the tip of the iceberg.

Ch. Gankhuyag has served as the Honorary Consul of Hungary in Mongolia (yes, he speaks fluent Hungarian) and has been on the board of numerous high profile companies. He also served as the Vice Minister of Finance after a term with Prime Minister Batbold as his Economic Policy Advisor.

Ch. Gankhuyag currently holds the position of Executive Chairman of Equity Investment Trust, the company he helped found in 2005 which engages in financial investments and turnaround management. In 2009 he was also named as the World Economic Forum's Young Global Leader and is a founding curator of the YouBe Global Shapers Community

That is of course, the formal introduction about a man who's packed a heck of a lot into a mere thirty-nine years. Here now, is a fascinating glimpse into the private life and thoughts of Ch. Gankhuyag. 

-Where were you born and where did you grow up?

-I was born in Ulaanbaatar's Second Maternity Hospital and grew up pretty much in the same way as my peers at that time: going to school, getting beaten on the street by neighborhood kids, playing football, playing the Mongolian street version of baseball, helping my parents with the household chores, going to movies, falling in love, getting into fights, stealing my father's car while a teenager to show off to my friends, etc. I have two younger brothers and one of them is just two years younger than I am. He had a lot of influence on how I ended up later in life – we grew up side by side, competing like Olympians in whatever came to mind. Attention, toys, less household work, etc. We still hang out together a lot these days.

As a kid I used to read a lot. I read mostly in Russian. I think reading just about anything I laid my eyes on had a profound effect in shaping who I am today.

-Describe your most vivid childhood memory. 

-I liked following my father on his hunting and fishing trips. It was very exciting and we felt proud if we were allowed to try out the guns and drive a car. It was a blast!

I loved my time in Hungary where my father was assigned to work at the Embassy as a driver in 1983. We lived there for more than three years. I met foreign kids, made friends, wrote love letters and learned karate, swimming and even disco dancing. This was a huge exposure to a kid from Mongolia – a real eye opener for me.

-What do you like most about Mongolia today?

-We are free people living in a free society. We can think and act differently and speak our minds. We possess a free spirit. I think the country is undergoing a huge transformation – even still to this day. We're in a different phase than we were in the 90s or the first decade of this millennium. We transited from socialism to democracy and a free market in the 90s – then we started building our foundations. Right now we are giving our house a shape that will determine Mongolia's future in the coming millennium. It is a critical stage of our development. I am lucky that I witnessed both systems and the transition. I hope I will see Mongolia develop into a prosperous country. I think it is a privilege and honor. My ancestors fought hard to leave us with this beautiful and free country. We need to deserve and be grateful for their hard fight. Present and future generations need to persevere and show their thanks by working hard and selflessly.

-What do you miss most about the Mongolia of yesterday?

-I miss the friendliness, openness and the curiosity that was visible everywhere. People weren't in a rush. There wasn't a lot of money, but then again there were not a lot of choices. There also seemed to be fewer problems. I was a kid and I was happy simply throwing stones into the river. I enjoyed visiting herders without notice. I enjoyed entering neighbors' houses to watch a movie without an invitation. I really dreamt about many things that were not available then to most in Mongolia. Now I realize that the process has been more important than attaining the goal. I think I've enjoyed the ride so far.

I hope we will live to see the day when we can say we've built a society that has the best of all societies. What we've witnessed to date are: happiness, choices, smiles, kindness, prosperity, healthy and wealthy people, highly educated and humble people who do good, think well and live well. We had a fair system that took care of everybody.

-What's your favorite holiday destination either overseas or within Mongolia?

-We go camping with some friends every summer to popular Mongolian destinations. Then my family makes one or two trips a year to Europe in the summer or we may perhaps visit another South Asian country in the winter.

-Can you explain in English your favorite Mongolian expression or saying?

-Right intentions bring the right destiny. I almost wanted to add Right Bank, Xac Bank.

-What hopes do you have for the future of Mongolia?

-We are destined to live prosperously. See my vision for Mongolia on my blog termed as Wolf Economy.

-What do you find most interesting about foreigners living in Mongolia? 

 -I lived as a foreigner abroad. I know how it is. I want Mongols to remember that we are hosts. They are our guests. I want us to extend them their "guest rights." We are nomads in the end. Then, I also want our friends to not abuse this right and be nice to the hosts. And it is easy. Please, mingle more with Mongols. Do not go to places where only foreigners go, do not eat out where only foreigners go. Please, mix. It will break the ice and help both sides understand and appreciate each other better. I am worried about the rise in violent attacks on foreigners in recent years, which was unheard of before. I want Mongols be respected when we go abroad. I think we need to give that respect and hospitality to our guests in order to do so.

-Who inspires you?

-My kids are an inspiration for me. I have four of them. My mother is an inspiration for me. My wife is also my inspiration. Mongolian history is an inspiration for me.

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Mongolia and Russia show military sheen

March 21 (Jamestown Foundation via Asia Times Online) Mongolian Minister of Defense Dashdemberel Bat-Erdene led a military delegation to Moscow on February 17-21 for discussions that included preparations for their annual joint exercises. Included on the agenda was a visit to the 5th Separate Motorized Rifle Brigade of the Western Military District in the Moscow Region. Bat-Erdene met with Russian Federation Defense Minister, Army-General Sergei Shoigu, in talks described by both sides as "cordial and constructive". 

Possibly to smooth over the fact that he had not quickly paid an official visit to his Russian counterpart since his August 2012 appointment as Mongolia's defense minister, Bat-Erdene emphasized that his trip was the first that he personally had led abroad: "I wished to start my foreign visits with Mongolia's most reliable friend - the Russian Federation." 

For his part Minister Shoigu emphasized the importance of maintaining friendly relations with Mongolia as one of the priorities of Russian foreign policy: "We have paid great attention to the organized structure and implementation of joint military field exercises and combat trainings that were organized in recent years." 

The Russian side offered the Mongolians assistance in training military personnel at Russian military academies and to continue training young Mongolian cadets at the Suvorov Military School in Yekaterinburg. 

Minister Bat-Erdene confirmed that more than 60% of Mongolians performing military training abroad today are in the Russian Federation. Such training programs appear to be Moscow's response to the annual multi-national peacekeeping exercises in Mongolia called Khaan Quest that are conducted under the aegis of the General Staff of the Mongolian Armed Forces and United States Pacific Command (USPACOM). 

Russo-Mongolian military training was revived in the democratic era only in January 2010 when Mongolia began sending cadets to Omsk Cadet Military School. After September 2011, cadet training was transferred to Suvorov. The Suvorov Military School, established in 1943, has graduated 16,000 soldiers to date. The 18 Mongolian cadets currently enrolled there are the first foreign students in this institution. Many are children of Mongolian military generals and officers who were educated in the Soviet Union. After these cadets graduate in 2013, they will go on to Russian military academies. 

Among other topics of the bilateral discussions were preparations for the now annual Russian-Mongolian joint military field exercises, held every fall since 2008, either in Mongolia or Russia's Eastern Military District (OIE). Last year's exercises, "Selenga 2012'', focused on defeating a simulated terrorist attack and securing the area afterward. Since the September 2012 joint exercises took place in Buryatia, this year Mongolia will be the host. 

Bat-Erdene also suggested both sides begin planning for the 75th anniversary celebration in 2014 of the Khalkin Gol joint victory by the Soviet Army and Mongolian Revolutionary Army over the Japanese Kwantung Army in eastern Mongolia. 

Chinese media sources also reported on the Bat-Erdene visit to Russia for economic as well as defense-related reasons. Bat-Erdene, a self-made wealthy businessman who graduated from the Ural State University in Sverdlovk in 1987, is president of Ajnai Corporation. A major Gobi region construction, alcohol and tourism company, Ajnai will build Mongolia's first heavy-duty paved road to the Chinese border and a 20,000-hectare Industrial Park called "Bayan Gobi Nutag" in the South Gobi that will include the country's first coke-chemical plant, a 12-megawatt (MW) power plant and a coal-washing plant. 

Bat-Erdene previously served in the Mongolian parliament from 2004 to 2008 as a Democratic Party (which dominates the present coalition government) member and is known for advocating a more "resource nationalist" mineral development policy that is particularly aimed at limiting Chinese investment in Mongolia's economy. 

The Mongolian defense minister is still chairman of the board of Tavan Tolgoi JSC, which both extracts coal from its own small-scale mine and holds the coal transport contract for the country's potentially largest coal/uranium mine at Tavan Tolgoi (Mogi: THE contract?) (TT), 240 kilometers north of the Chinese border. All of TT's extracted coal was being exported through Bat-Erdene's company to China until January of this year, when the TT state-managed company Erdenes Tavan Tolgoi LLC (ETT) announced that it had no more funds to pay for the approximately 18 million annual tones of coal transports, even though the Chinese already had made the required payment. 

Furthermore, ETT is threatening to completely cancel its coal-for-loan deal with the Chinese importer, Aluminum Corporation of China (Chalco). These actions have led to serious tensions in Sino-Mongolian relations and upset the international financial community. 

It is likely that Bat-Erdene discussed the TT situation in Moscow because the Russian government is very interested in how this huge mine will be exploited and where its products, especially the uranium (Mogi: wait, TT has uranium?), are destined. When the western portion of TT was opened in 2011 by the Mongolians for development in an international bidding process, US coal giant Peabody Energy and the Chinese state-owned enterprise Shenhua were among the finalists. Because of a strong negative reaction from Moscow, however, a Russian-South Korean-Mongolian consortium was summarily added to the short bid list, provoking international protests that have held up foreign investment for more than one year. 

Bat-Erdene had arrived in Moscow after completing a first ever trip with Mongolian President Tsakhia Elbegdorj to visit Mongolian peacekeepers in Juba, South Sudan, on February 15. Of the United Nations peacekeeping force currently serving in Sudan, one-sixth is made up of Mongolians - 850 soldiers and 7 staff officers. Several weeks prior to this visit, Bat-Erdene had issued a one-time compensation package of US$800-$1,200 to these peacekeepers. 

For over 10 years, Mongolia has been very active in UN peacekeeping operations, with some 10,000 of its soldiers having taken part in missions abroad. Nevertheless, Ulaanbaatar's bilateral military relationship with Moscow remains a priority for Mongolia, which sees Russian support as a key factor in training the Mongolian armed forces for modern security realities, not to mention as a possible balance against Chinese economic and political dominance. 

Dr Alicia Campi has a PhD in Mongolian Studies, was involved in the preliminary negotiations to establish bilateral relations in the 1980s, and served as a diplomat in Ulaanbaatar. She has a Mongolian consultancy company (US-Mongolia Advisory Group), and writes and speaks extensively on Mongolian issues. 

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Herding Health: US Military Helping Mongolia Become Asia's "Protein Basket"

March 23 (DoD Live) Despite widespread poverty and malnutrition, Lt. Col. Douglas D. Riley believes Mongolia, with its vast amount of livestock, could be Asia's "protein basket." Of course to reach its potential and feed the continent's many hungry people, changes have to be made.

That's why the Air Force veterinarian has been visiting the country. To date, he's made four trips to Mongolia, and on his most recent visit, Riley worked with Mongolia's armed and border forces to show veterinarians how to produce healthier herds.

"What's really ironic is that Mongolia, being part of Asia, sits in the poorest section of the world with the most malnutrition in the world," said Riley, who's assigned to the 13th Air Force Cooperative Health Engagement Division. "Yet Mongolia has the ability, with its livestock alone, to feed the vast majority of Asia through the protein in the animals if the animals and the ground were managed properly."

The Department of Defense and Air Force interest in humanitarian operations in countries like Mongolia is to foster a more stable country, one more difficult to be infiltrated by terrorists. On the ground in Mongolia, Riley hoped his work assisted this effort.

"If we can find a way to build partnerships, maybe, just maybe, at the end of the day, we won't have to worry about country or state-on-state war," he said. "Because we are so small a world now, through globalization and the ability to move from point to point, if we don't find a way to tie ourselves together with an understanding, we are missing an opportunity that is far greater than any weapon we could create. We are missing an opportunity to tie societies together to better each other."

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Mongolian Kazakhs celebrates "Spring New Year"

ULAN BATOR, March 21 (Xinhua) -- The annual Nowruz, or "Spring New Year", celebrations opened in Sukhbaatar Square here Thursday, showcasing the unique Mongolian Kazakh grasslands culture.

Prime Minister Norov Altanhuyag, who attended the event with other leaders, said Nowruz was not only a Kazakh festival, but a national holiday.

He hoped Nowruz would further enrich Mongolian grassland culture and bring a beautiful spring dream for steppe nomads.

Altanhuyag, accompanied by Mongolian Kazakh councilor Barker, listened to traditional Kazakh music and was shown Kazakh customs inside a felt yurt.

An exhibition of Kazakh women's embroidery works and clothing was held in the square the same day and a "tambura rhyme" concert was held at Central Cultural Palace.

Mongolia's Kazakh population mainly live in Western Bayan-Ulgii and Khovd provinces. Bayan-Ulgii annually holds mass displays of falcon teams and other activities to celebrate Nowruz.

The United Nations Educational, Scientific and Cultural Organization listed Nowruz as a human intangible cultural heritage in 2009. As a symbol of cultural heritage and long-standing traditional peace, it plays an important role in strengthening friendly relationships between nations.

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BBC Radio: Mongolia's herders head to the city

March 21 (BBC Business Daily) A quarter of the Mongolian population has left its traditional herding lifestyle behind and moved to the city. We find out what has brought about such changes.

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Philadelphia, March 21 (Drexel University) In Mongolia, a sparsely populated, resource-endowed country sandwiched between China and Siberia, the climate is changing more rapidly than in many other places on Earth. Rising temperatures have caused rivers and streams to dry up, grass to grow stunted, and, consequently, some nomadic herders to lose their livelihoods.

Dr. Clyde Goulden, a pioneering ecologist and director of the Asia Center of the Academy of Natural Sciences of Drexel University, first visited Mongolia in 1994 shortly after it emerged from the international isolation of 70 years of rule by the former Soviet Union. Since then he has devoted his life to studying the alarming climate trend and how it is affecting the country's herders and one of the most pristine lakes in the world, the 2-million-year-old Lake Hövsgöl. His efforts have not gone unnoticed.

On March 20, in a ceremony at the Capitol in Washington, D.C., Speaker of the Parliament of Mongolia Zandaakhuu Enkhbold presented Goulden with Mongolia's highest award to foreigners, the Order of the Polar Star. Previous recipients include former Secretary of State Hillary Clinton and Senator John McCain.

William Chang, director of the Beijing office of the National Science Foundation, a long-time funder of the Academy's Mongolia initiative, noted that Goulden's contributions go beyond scientific research. For nearly two decades he has worked to train Mongolian scientists and to build a scientific infrastructure where practically none existed.

"He led the NSF-supported research efforts in Mongolia and trained many young U.S. and Mongolian scientists, who are now pivotal in Mongolia contributing to our understanding of global environmental changes," Chang said. "We at NSF are very pleased that he has been recognized with the Order of the Polar Star by the Mongolian Parliament."


In a separate honor, Dr. Jon Gelhaus, Academy curator of entomology and professor in Drexel University's College of Arts and Sciences, received the Khubilai Khan gold medal, the highest award from the Mongolian Academy of Sciences, "for his scientific contributions to the development of the biological science in Mongolia, its research facilities, and training of young Mongolian scientists."

In 1996 Gelhaus began his work at Lake Hövsgöl with Goulden, initiating a long-term survey of aquatic insects, particularly crane flies, which are especially sensitive to changes in the environment. Gelhaus, a world expert on crane flies, and his colleagues created the Mongolian Aquatic Insect Survey and expanded the river insect surveys to the entire drainage basin of the Selenge River in central Mongolia, incorporating water chemistry and other measurements. The Selenge provides drinking water to the capital city Ulaanbaatar, where nearly half of Mongolia's population lives, and contains most of the country's fresh water. Later projects surveyed watersheds in western and eastern Mongolia.

"Our goal has been to understand the aquatic insect diversity of Mongolia, so the Mongolians could use that data to make assessments of water quality in the future and protect their biodiversity," said Gelhaus, who, like Goulden, was recognized for his dedication to training young Mongolian scientists and establishing facilities and equipment so they can carry out their research.


Mongolia has been called "a laboratory for climate change." While the average temperature of the earth's surface has risen about 1.5 degrees Fahrenheit in the last century, Mongolia has experienced an increase of about four degrees just since 1960. This has caused the world to take notice and the people and economy of Mongolia to suffer.

Goulden became interested in the land of Genghis Khan in 1966 when, as part of a cultural exchange program, he visited Lake Baikal, the world's largest lake. Several years later he returned on the urging of a Buddhist lama who was concerned that rapid economic development was going to affect the unspoiled and, he felt, sacred land, including the famous Lake Hövsgöl. Since then Goulden has established a long-term survey of Lake Hövsgöl and set up a program to train young Mongolians at universities around the world so they will return to Mongolia and apply their skills to helping their country.

"When Clyde started in Mongolia, he introduced what modern ecology and biodiversity research should be like," said Dr. Bazartseren Boldgiv, chair of the Department of Ecology, School of Biology and Biotechnology at the National University of Mongolia. "Building on what Clyde started, we hope to make Hövsgöl an attractive study site for [the] international science community."

This is not the first time Goulden and Gelhaus were recognized for their research and education programs in Mongolia. In 2007 Goulden received the Friendship Medal for his contribution to developing relations between the U.S. and Mongolia and for development of the natural and environmental field of study. In 2012 Gelhaus received an award from the Ministry of Nature, Environment and Tourism for his research contribution to conservation. 

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Teruya helps Mongolian orphans turn tears into smiles

March 24 (The Asahi Shimbun) The curtain is about to rise in Tokyo on a music and dance performance by young people in from an orphanage in Mongolia. The performers are attired in national dress and their anticipation is high.

The coordinator is Tomoko Teruya, a woman who has single-handedly changed life for these 16 youngsters and many more back in Mongolia.

When Teruya, 28, says: "Smile!" in Mongolian, the children burst into grins.

All are either residents or alumni of the Children of the Sun Center, an orphanage in remote Darkhan City, Mongolia. They have traveled several times to Japan, most recently to perform at a hall in Tokyo's Ginza district in November 2012.

The houselights dim and spotlights reveal eight people seated, each holding a musical instrument. The crisp sound of a violin-like Mongolian morin khuurs resonates out and is soon joined by an intricate melody from a yangqin, an instrument with more than 100 strings. The pleasant low tones evoke an image of majestic plains.

Dancers then perform a routine in traditional costumes, evoking scenes of hunting and horse-riding in times gone by. They sing nomadic songs in a style called "khoomei," also known as throat singing, in which the singer vocalizes high and low tones simultaneously by constricting the throat.

As the one-hour concert draws to a close, the full house of perhaps 500 concert-goers, rises to its feet, applauding and dabbing teary eyes with handkerchiefs.

The Children of the Sun Center offers its charges a chance to learn to sing and dance, and to play musical instruments. They then travel to Japan to perform, and the revenue from their concerts helps to keep the orphanage running.

Teruya has been organizing these concerts every year since 2008. She takes the stage.

"They are not begging for money, they are earning it through their performances," she says. "It's an immense confidence builder."

Teruya is tiny, only 150 centimeters tall, but on that night she seems to have an imposing stature.


Temperatures in Mongolia in winter can drop to 30 degrees below zero. Orphans and children left homeless through parental abuse have been known to lift manhole covers and climb inside to escape the cold. These so-called manhole children have been declining in numbers recently, but in the 1990s there were thought to be 3,000 to 4,000 such homeless children in Mongolian cities.

When Teruya was in her first year of high school, she happened upon an exhibition of photographs of manhole children and noticed one young boy in particular. His ears, lips, and eyelids were swollen from rat bites, and a skin condition had rendered him bald. Although he was probably 6 years old, he appeared to be no older than 1—and he only knew how to move about by crawling.

Teruya has two brothers, six and eight years younger than her. This manhole child was of similar age, a shocking realization. She immediately joined her school's volunteer club and separately decided she would become a lawyer so as to be able to improve conditions for children in developing countries.

But how could she achieve it? She knew it was impossible to change the world overnight. Even so, she believed she could perhaps overcome the barriers by helping one child to begin with, then extending that assistance to an institution, and ultimately to an entire nation.

She traveled to Mongolia in the summer of 2004, during her second year at university.

From the capital of Ulan Bator, she drove for four hours through vast grasslands to Darkhan City, near the border with Russia. The single-story building that housed Children of the Sun stood alone in a meadow. Cows and sheep grazed nearby.

Over the next five days, Teruya spent her waking and sleeping hours with the 20 or so orphans living there. They pressed flowers together, chased cows and sang beneath the starry sky. One orphan had lived as a manhole child since infancy. Another had been orphaned and then abused at the home of a relative. Their smiles concealed deeply traumatic pasts.

After Teruya returned to Japan, she received an essay from a 13-year-old boy with learning difficulties.

"I met an older girl called Tomoko. I felt she loved me like a mother. When can I see her again?" the boy wrote. From then on, Teruya traveled to Mongolia whenever she could, between semesters.

Soon after graduating and going on to law school, an alarming e-mail arrived from the head of the orphanage, 56-year-old Erdenechuluun.

"We've lost our NGO funding," the principal wrote. "Please help!"

Most orphanages in Mongolia depend on financial support from foreign non-governmental organizations. Teruya took a leave of absence from law school and, with friends, founded an NGO called Yuimar Hummingbirds.

Now simply named Yuimar, the NGO aims to provide scholarships to children such as the orphans she had encountered.

"Yuimar" means "mutual cooperation" in the Okinawan dialect used in Teruya's hometown. She chose the name to express her desire to help others, not with a condescending attitude, but in a spirit of partnership.

Over the next six months, she raised 400,000 yen ($4,200) from friends and relatives. This sum would cover the living and study expenses for two university students in Mongolia for a year.

However, the reality of working in a place like Mongolia suddenly intruded. When she traveled to the orphanage, carrying the cash, staff confronted her: "Apparently you've been asking the children all kinds of questions," one said. "You want to go telling others about how we neglect them, don't you."

Teruya tried to explain that it was all a misunderstanding, but she could not get them to accept the money she had collected.

It left her at a loss as to what to do. But her thoughts returned again and again to the orphans themselves—and she knew she could not give up.

After returning home, she received an assessment for Innovation Grant, a funding platform through which venture capitalists help promising social entrepreneurs. It was an organization to which she had applied to several times previously, and she now poured her heart out.

"She lacked organizational management skills and judgment, but was more passionate than anyone I'd ever seen," says Idea International CEO Masaharu Hashimoto, 51, who vetted Teruya's funding application.

As a result, she won a grant worth 1 million yen. Officials from other Japanese NGOs helped to clear up the misunderstanding with the Children of the Sun Center, contacting staff there on her behalf and explaining that although she was still a student, she was sincere in her commitment. It worked.


As Yuimar began work as a fully fledged NGO, Teruya found it increasingly difficult to balance her work with law school. Should she focus on passing the bar exam, or spend her time developing the NGO?

While agonizing over this difficult question, the Great East Japan Earthquake struck on March 11, 2011, and saw the world respond with deep sympathy.

The orphans at the Children of the Sun Center wanted somehow to help and repay the kindness that Japanese people had shown them. They donated money from the child allowances they received from the Mongolian government and held charity concerts locally, in the end sending 6 million yen to the disaster-hit regions.

It told Teruya a home truth about life in the rich world.

"I felt ashamed for having obsessed over the career, status and financial security that being a lawyer would provide," she said. She would continue her studies, but made up her mind to concentrate on helping children.

In autumn 2012, the orphans arrived in Okinawa to put on a concert there.

At a farewell party before they returned home, a 16-year-old boy named Uurtsaikh, who was visiting Japan for the first time, cried profusely when thanking his homestay mother, 47-year-old Rieko Uehara.

"Mom, thank you for taking care of me, not even sleeping when I had a fever," he said.

Uehara herself shed tears seeing such an expression of gratitude.

Now Teruya was certain she had chosen the right path.


Tomoko Teruya

CEO of Mongolia aid NGO Yuimar

Born in 1984 in Naha City, Okinawa. Graduate of Waseda University School of Law, majoring in international relations. Became involved in Japan International Cooperation Agency projects assisting the development of economic legal infrastructure and company law in China. Founded NGO Yuimar Hummingbirds (now Yuimar) in 2007 while a student at Sophia Law School. Selected by the World Economic Forum in 2011 as one of 30 Japanese entrepreneurs to participate in its Global Shapers Community, a network of leaders in their 20s and 30s. Scheduled to graduate from Sophia Law School this month.

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On a wing and a prayer: Grimsby pilot volunteers services in Mongolia

March 20 (Niagara this Week) Amaraa and Temujin are cherub-faced toddlers, boys with rosy cheeks. They might be easily mistaken for girls, with their long curls. This is deliberate. The boys, aged three and two respectively, will be dressed as girls for the first few years of their life, a Mongolian tradition meant to confuse evil spirits. Soon, they will both receive their first haircut, a major event and cause for celebration in the life of a Mongolian child.

Recently, the boys and their families marked an even more notable celebration. Amaraa and Temujin and their mothers, Odnaa and Batchimeg, received the gift of life from Canadian physicians who repaired defects in their heart. The boys and their mothers were living in the Grimsby area during this process. They were there through the work of Samaritan's Purse, a Christian aid organization, working in partnership with the Mission Aviation Fellowship (MAF). The Samaritan's Purse paid for the surgeries and paid to have the boys and their mothers brought to Canada. The MAF, for its part, carries out ongoing work in Mongolia to deliver medical aid and support to remote communities in Mongolia.

Former Grimsby native Ryan Van Geest and his family spent the last few years in Mongolia, where Van Geest works as a pilot with the MAF. Van Geest is unpaid, and relies on financial donations to cover the cost of living in Mongolia. He learned about the MAF five years ago, while working as a pilot in northern Ontario.

"We heard about the MAF through one of the pilots who worked in the same community. He'd worked in Papua New Guinea for a number of years," said Van Geest.

Once he learned about the MAF, Van Geest said he felt led by God to dedicate his time to the organization, with the support of his wife Amanda.

"God laid it on our hearts. He's directed us to be there. Certainly I would have never thought of being a missionary. I'd thought of a missionary as someone who goes to a church and wears old, traditional clothes, who goes out, never thinking a missionary could be a pilot. It was a such a foreign concept," said Van Geest.

Mongolia is a land-locked nation, surrounded entirely by Russia to the north and China to the south. It was a Soviet republic for several decades. While the communist regime limited political and personal freedoms, Moscow's support allowed a strong centralized government that was able to provide a basic level of health care and education to most Mongolians. This Russian support meant the Mongolian government was also able to connect remote villages with regular flights.

"With the social assistance they provided, it was better in a lot of ways… every small community was served by an airplane," said Van Geest. "They forget the bad things."

When the Soviets left, these services crumbled and collapsed. Many remote Mongolian communities now have no formal connection to the capital Ulan Baator. Without airplanes, getting to the nearest hospital can take a week of driving in some of the most desolate areas and remote areas of the world. Local clinics can handle basic injuries or illness, but for serious problems Mongolians must travel to Ulan Baator or go abroad.

"Doctors could travel fifty hours one way. There are flights in some of these communities, but you can't go from one to the other. You have to fly there, come back," said Van Geest.

Flying doctors to remote communities and bringing patients back are not the only thing Van Geest does. As a missionary organization, the MAF also flies Bible teachers and ministers to the outposts of the burgeoning Mongolian church. And, fiscal realities mean that many MAF flights are undertaken for commercial ventures.

"We do 50 per cent mission work and 50 per cent commercial work, because it's a big country and expensive to operate in. Of the commercial half, 60 per cent is for the mining industry, 20 per cent is commercial medical evacuations," said Van Geest. The remainder of the work is charitable, either free medical flights or missionary work.

Despite the commercial side of the MAF, the rising cost of fuel and expense of operating in an undeveloped country mean the MAF spends more than it takes it. According to one recent report, the organization is more than $2 million in debt, though it continues to operate. To help reduce costs, Van Geest and the other pilots are responsible for raising their cost of living expenses and travel costs, as well as anything they can bring into the MAF.

"You're there for two years, back for one month, there for a year and a half, and back for five months to raise funds. We're going back for a two-year term this time," said Van Geest.

He and his wife Amanda have three small children below the age of four. The children have lived most of their lives in Mongolia.

"My son and youngest don't know anything else. My daughter thinks of it as home. We travel a lot, and they enjoy meeting with people. They experience a lot more in life, and they're ready to go back to Mongolia. They think this is normal," he said.

The Van Geests are heading back to Mongolia for their next jaunt in April. They will remain there for two and a half years. To help raise funds for their work, Ryan and Amanda are speaking at Mountainview Church in Grimsby on March 24 at 5 p.m. They will also speak on April 2 from 7:30-9 p.m. at Compass Point Bible Church located at 1500 Kerns Rd., Burlington.

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