Wednesday, April 24, 2013

[Erdene closes $1m initial placement to Teck, ETT restarts export to Chalco amid contract talks, and Mongolia hoists flag on North Pole]

CoverMongolia NewsWire

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Cover Mongolia

Mogi: thought I'd share this again to let new subscribers know about upcoming changes to CoverMongolia NewsWire from May

Cover Mongolia Fundraising Proposals

Dear subscribers,

Here are 3 fundraising ideas I'm launching:

1)    Donation Scheme for Individuals: To pilot the donation scheme starting in the near future. I will set up a PayPal account for anyone residing overseas, and a local bank account for individuals residing in Mongolia.

a.     Starting from May, I would run two different versions of the newswire. One to donors the current version, and a cut version to non-donors. A cut version would mean just the headlines and first few paragraphs with no links.

b.    Donations could be on a quarterly basis

2)    Banner Advertising: Also, I'm proposing an opportunity to advertise on the newswire as well. A top banner as you see above and 6 Middle Banners seen below, positioned between sections 1. Overseas Market 2. Domestic Market 3. Economy 4. Politics 5. Business 6. Diplomacy and 7. Social, Environmental, Others. Pricing proposals could be:

a.     50,000 per issue for Top Banner,

b.    45,000 per issue for Middle Banner 1,

c.     40,000 per issue for Middle Banner 2,

d.    35,000 per issue for Middle Banner 3,

e.    30,000 per issue for Middle Banner 4,

f.      25,000 per issue for Middle Banner 5, and

g.    20,000 per issue for Middle Banner 6

3)    Corporate Subscription: Since the newswire is going to be split into a full and a cut version, I thought perhaps this would create an incentive for individuals to convince their companies to pay for the subscription. Pricing scheme could be in the range of 100,000-500,000 a month depending on company size and relevance of my newswire to their business.

a.     Best way for companies to take it would be: Wouldn't it be much more expensive than 500,000 to hire a person to do this type of market research?


Overseas Market

Erdene Closes Private Placement

Adopts Advance Notice By-Law

HALIFAX, NOVA SCOTIA--(Marketwired - April 23, 2013) - Erdene Resource Development Corp. (TSX:ERD) ("Erdene" or "Company"), is pleased to announce it completed the $1 million initial tranche of the non-brokered private placement financing with Teck Resources Limited ("Teck") that was announced on April 11, 2013, at a price of $0.20 per share. The Company also announced that its board of directors has approved the adoption of an amendment to By-Law No. 1 of the Company, which requires advance notice to the Company in certain circumstances where nominations of persons for election as a director of the Company are made by shareholders.

Private Placement

Under the terms of the agreement announced in April, Teck agreed to subscribe for up to $3 million of Erdene shares by way of a non-brokered private placement. The initial tranche resulted in the issuance of five million shares priced at $0.20 per share for aggregate proceeds of $1 million. All shares issued are subject to a hold period of four months and one day from the date of issuance. There were no fees or commissions paid in connection with this financing.

Erdene will commit 85% of the proceeds from the private placement to exploration work, primarily on the Company's Khuvyn Khar copper porphyry project and regional exploration in the Trans Altay Region of southwestern Mongolia.

Teck has the option to acquire additional shares of Erdene, priced at the then current market plus 10%, until it has invested $3 million or acquired through subscriptions 19.9% of the outstanding shares of Erdene, whichever occurs first. The balance of the private placement option is due within 30 days of Teck and Erdene being satisfied that clarification of recent proposed changes to the mining law and foreign investment laws of Mongolia have occurred and is subject to receipt of Toronto Stock Exchange approval. Specifically, the parties require assurance that Mongolian laws have been clarified to permit transfers of mineral licenses and confirmation that a majority interest in licenses can be transferred to a foreign controlled entity. Until that time, beginning six months after the closing of the Initial Tranche, Teck may subscribe to the balance of the private placement with a minimum of $500,000 on each anniversary date of the closing of the initial tranche.

Advance Notice By-Law

The Company's board of directors has approved the adoption of an amendment to By-Law No. 1 of the Corporation, which requires advance notice to the Company in circumstances where nominations of persons for election as a director of the Company are made by shareholders other than pursuant to: (i) a requisition of a meeting made pursuant to the provisions of the Canada Business Corporations Act (the "Act"); or (ii) a shareholder proposal made pursuant to the provisions of the Act (the "By-law Amendment").

Among other things, the By-law Amendment fixes a deadline by which shareholders must submit a notice of director nominations to the Company prior to any annual or special meeting of shareholders where directors are to be elected and sets forth the information that a shareholder must include in the notice for it to be valid.

In the case of an annual meeting of shareholders, notice to the Company must be made not less than 30 days and not more than 65 days prior to the date of the annual meeting; provided, however, that in the event that the annual meeting is to be held on a date that is less than 50 days after the date on which the first public announcement of the date of the annual meeting was made, notice may be made not later than the close of business on the 10th day following such public announcement.

In the case of a special meeting of shareholders (which is not also an annual meeting), notice to the Company must be made not later than the close of business on the 15th day following the day on which the first public announcement of the date of the special meeting was made.

The By-law Amendment is effective immediately. At the next meeting of shareholders, shareholders will be asked to confirm and ratify the By-law Amendment. A copy of the By-law Amendment has been filed and is available under the Company's profile at

The Company believes that adopting the By-law Amendment is considered to be good corporate governance. The By-law Amendment facilitates an orderly and efficient annual or special meeting process and ensures that all shareholders receive adequate notice of director nominations with sufficient information with respect to all nominees. This allows the Company and its shareholders to evaluate the proposed nominees' qualifications and suitability as directors, which further allows shareholders to cast an informed vote for the election of directors.

Link to release


Sentosa Mining makes Mongolian foray with acquisition of copper-gold project

April 24 (Proactive Investors) Sentosa Mining (ASX: SEO) is investing in Mongolia with the acquisition of the Darvii Naruu Copper Gold Project where rock chip samples have returned peak assays of 5.8% copper and 34.4 grams per tonne gold.

Notably, the project is located within the South Gobi Arc in western Mongolia, which hosts Rio Tinto's (ASX: RIO) world class Oyu Tolgoi porphyry deposit, one of the world's largest copper-gold deposits.

Historic exploration has defined multiple prospects at Darvii Naruu, with the flag ship Mushroom Reef prospect displaying characteristics comparable with the surface alteration footprint of a porphyry copper gold deposit including:

-    A spatially extensive FeO iron-leach cap overlying Devonian mafic volcanics;
-    Close proximity to later stage felsic plutonism;
-    Polyphase structural deformation of strata;
-    Numerous occurrences of malachite in fractures with low to high grade gold and copper in outcropping quartz veins;
-    Moderate anomalism of silver, arsenic, antimony, zinc and molybdenum in soil and stream sediments; and
-    Maximum rock chip values of 5.8% Cu and 34.4 g/t Au have been collected at Mushroom Reef.

The Mushroom Reef Prospect, like Oyu Tolgoi, is predominantly hosted by Devonian-aged mafic extrusive rocks. 

Enrichment of copper and gold in soil occur along linear corridors exceeding 3 kilometres in length. 

These linear features correlate with regional faults and strike north northwest to north northeast. Elevated gold and copper soil concentrations usually occur together. The geochemical analysis of rock chip samples of exposed quartz veins and gossanous material replicate the anomalism observed in soil.

These indicate that Mushroom Reef is prospective for a partially exposed, near-core position of a copper-gold porphyry system.

Sentosa is acquiring a 100% interest in the project, which comprises seven semi contiguous licenses covering 62,753.8 hectares.

It will undertake to spend A$150,000 on a work program that will involve flying an aeromagnetic and radiometric survey. 

Results will be analysed and Sentosa then has the right to decide whether to proceed with the acquisition. 

Should it do so, Sentosa will issue 5.5 million fully paid ordinary shares and a 0.5% Net Smelter Return Royalty as consideration for a 100% interest in all of the tenements.    

Sentosa is trading near its 31 December 2012 cash backing of close to $931,000, or $0.028 per share, with its current market capitalisation at $1.08 million and share price of $0.033.

Link to article

Link to SEO release


Hertz appoints rental franchise for booming Mongolia

April 22 (Access International) Mongolia Equipment Rental Corp (MERC) has become the Hertz equipment rental franchise holder in Mongolia following an agreement between Hertz and MERC's owner, US-based Consolidation Services Inc (OTC:CNSVE).

MERC will have the exclusive license to provide rental equipment in Mongolia using the Hertz Equipment brand, with the agreement starting on 1 July this year.

Michael Ussery, chairman of Consolidation Services and Hertz Equipment Mongolia, and a former US ambassador to Morocco, said Mongolia's resource-led economy offered a huge opportunity for equipment rental; "We are delighted to join the Hertz global equipment rental network, giving us access to hundreds of equipment and tool manufacturing partners.

"This will enable us to provide a full array of equipment rental services to meet a variety of mining, construction, infrastructure development and other equipment rental needs."

Lois Boyd, group president of HERC, said Mongolia was "one of the most exciting new markets for the world's mining industry. With its double digit GDP growth (estimated at 15.74% by the IMF for 2013 (Mogi: recently revised to 14% by IMF)) and influx of foreign investments, the country is also experiencing a boom in construction and infrastructure development."

Consolidation Services was created in January 2007 and since then has concentrated on natural resources development in the US, owning oil wells and mineral rights in eastern Kentucky and Tennessee.

MERC's CEO is Gary Kucher, who has a background in investment banking. From 2008 until 2012 he served as managing director of MB&A Capital in California, and he is a co-founder and still serves as senior managing director of the Mongolia Fund, a Mongolia focused private equity fund. He is also CEO of Consolidation Services Inc.

Mongolia has several players active in equipment rental. Wagner Asia Equipment, Caterpillar's dealer in the country, operates several Cat Rental Stores and Mongolian-owned Newcom Mining Services has established an equipment rental business called Gobi Desert Rentals.

Link to article

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Local Market


19 April 2013, Friday (BDSec)  – Tavantolgoi (TTL) slid more than 14 percent and was the biggest drag on the MSE Top 20 Index. The benchmark index fell 2.02 percent today to 14,660.01 points. However trading volume was very low at MNT 13.2 million or USD 9.4 thousand.

Zoos Goyol (ZOO) lost as much as 12.73 percent to finish at MNT 1,200. Genco Tour Bureau (JTB) dropped 3.41 percent to MNT 85. Gobi (GOV), the largest Mongolian cashmere producer, came down 1.92 percent to MNT 4,500.

Naco Fuel (NKT), a semi-coke manufacturer, advanced 5.26 percent MNT 200. Talkh Chikher (TCK), a bread and bakery maker that gets 50 percent market share in Mongolia, gained 1.27 percent to MNT 12,000.

Download the whole report in PDF

Link to report



22 April 2013, Monday (BDSec) - Mongolia stocks weakened to 28-month low despite good news being released lately. Erdenes Tavan Tolgoi LLC, Mongolia's largest state-owned coal company, resumed shipments to China today. At the Cabinet meeting, it was resolved to accelerate the project construction of Oyu Tolgoi LLC in order to fulfil the contractual obligations on time.

Tavantolgoi (TTL), also known as little TT, fell 10.0 percent to close at MNT 3,060, dragging MSE Top 20. Thermal coal miners Sharyn Gol (SHG), and Baganuur (BAN) dropped 8.6 and 6.7 percent, respectively.

Hermes (HRM) was the most actively traded stock on the exchange with MNT 24.6 million worth of 234 thousand shares traded.

There was no real story about Telecom Mongolia (MCH), but the stock dipped 30 percent for the month.

Download the whole report in PDF

Link to report

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BoM issues 1-week bills

April 22 (Bank of Mongolia) BoM issues 1 week bills worth MNT 17.5 billion at a weighted interest rate of 11.50 percent per annum /For previous auctions click here/

Link to release


BoM holds FX auction

April 23 (Bank of Mongolia) On the Foreign Exchange Auction held on April 23rd, 2013 the BOM received from local commercial banks bid and ask offers of USD and CNY. BOM has sold 17 million USD and has refused for bid offer of CNY.

On April 23rd, 2013, The BOM received MNT Swap agreement bid offer of 25 million from domestic commercial banks and BOM has refused all the offers for swap agreement.

Link to release


Where Development Should Start

April 22 (Mongolian Economy) There are a number of studies, discussions, policies and programmes over Mongolia's development strategies. While the country's economic growth was relatively strong compared with the global averages over recent years, the paradox of this growth remains to be a persistently high level of poverty. This situation raises several questions such as whether Mongolian people can benefit from the economic growth, how long the current development model can be sustained, and whether there are better solutions.

Where Economic Development and the Economic Development Model Start

There are many different types of development models and strategies around the world, and logically the development strategy of any country should start with its competitive advantage. For example, Singapore has neither big territory nor natural resources. Thus, after defining its development strategies Singapore could only rely on its people and its geographic location. The country was destined to build its future based on the intelligence of its people. In 1994, Singapore's National Development Authority introduced its Singapore Unlimited Economic Development plan to attract foreign investment.

The proposal reads: "...Singapore will overcome the restraints of its geographical location and think until we make the world a game field... Singapore will become the world's scientific and technological hub, the best location to run industries, and the smart island linking up the world's trade, communication and IT industries".

A similar example is Macao, which was colonised by Portugal for many years before it gained independence as late as 1999. But now its half a million population lives in prosperity. GDP growth accounted for 8.5 percent in 2012. The island had similar difficulties as Singapore, as it lacked natural resources or large territory. Macao gave high priority to the development of tourism, relying on its good weather and strategic geographical location.

In the case of Mongolia, the main driver of development has been the mining sector and its natural resources in the past few years. Legally, the natural resources belong to the nation and its people, but the country faces a number of challenges. For instance, people cannot equitably benefit from the economic growth generated from natural resources; poverty has grown worse, with one-third of the nation living in poverty today; other economic sectors remain underdeveloped; and future generations are unable to benefit from the limited resources available.

As a result, the country's economic development cannot be maintained at the current level, and the economy has become unstable and fragile. It seems that three big transitions must be made in an optimal way in order to rid the country of these difficulties.

Three Transitional Mechanisms

The first transitional phase is the reduced dependence on the mining sector through the gradual investment into the development of other sectors. This is called, of course, economic diversification.
The second one refers to a transition away from the model where a few people benefit from the profits of resource extraction, greater profitability, and higher living standards for all citizens. In this context, a fair distribution should prevail rather than equal distribution.

The third transition focuses on provisions for reasonable long-term stability that will hand over wealth currently being generated for future generations. This means today's revenues should be saved for our children today, their children, and so on.

The most critical problem we face today concerning these three transitional stages is that a fair, efficient and market-based mechanism needs to be embedded properly instead of simply distributing those funds.

State Efforts Are not Effective

So far, the state has been responsible with the re-distribution and transfer of Mongolia's economic resources, but this has proven to be very ineffective. Distribution of state-owned Erdenes Tavan Tolgoi's shares is one vivid example of this. Implementation was not optimal, although the concept of distribution to all citizens of Mongolia was a good one. Company shares are a financial instrument that represents a company's equity capital, and the shares of Erdenes TT were distributed to all citizens through a welfare scheme rather than financial. As a result, the following difficulties were experienced:

·         The share price was disingenuous and did not accurately reflect true share value because it did not follow market principles.

·         The government was supposed to allocate funds to the company itself from the proceeds from the sale of shares. However, this was never done and so Erdenes TT has no operating capital for further business development and now faces serious financial difficulties.

·         Because the shares were not properly valuated from the beginning, it would be difficult to trade them on a secondary market and they cannot act as real financial instrument.

In other words, although on paper all citizens own shares of Erdenes TT, they do not offer any real benefit to shareholders.

There are many other examples of ineffective redistribution efforts by the state. For example, there are some 40 special funds including the Stabilization Fund, Regional Development fund, SME Development fund, and Human Development Fund. Collectively, although these funds successfully distributed resource wealth, equal to 30 percent of GDP, they did not achieve their true purposes. Instead, these funds often operated as accounts withdrawals. The balance from social insurance pension accounts has already reached MNT 5.6 trillion, and that money will eventually have to be repaid.

Is There Any Other Solution?

In the past two decades, entrepreneurship has been developed in Mongolia and now it accounts for 60 to 70 percent of GDP. During this period one issue that became apparent was the need for appropriate financial market infrastructure. Non-banking financial mechanisms, including capital markets, are underdeveloped. This hampers the country's economic development and limits further growth. Thus, the economy is likely to stagnate, requiring new solutions to bring the economy to the next level. 

As seen in the Chart 1, investment funds, pension funds and insurance funds play an important role in the financial markets of developed countries. Through these funds the transfer and re-distribution of assets is made in the most efficient way. For example, it is realistically possible for some US citizens to own shares of Rio Tinto, the parent company of Turquoise Hill, through a 401K. They might never have heard about Mongolia or have any idea where it is located. However they are in a position to benefit from Oyu Tolgoi's revenues through the shares they own. Conversely, even though the government of Mongolia owns some 34 percent of Oyu Tolgoi, many are questioning whether Mongolia can ever benefit from Oyu Tolgoi under the current circumstances.

In order to remove this abnormality, an appropriate financial market mechanism must be created rather than increasing state participation and restructuring the responsibilities of the government and its private partners. For instance, a wealth fund could be founded in order to provide profitability and better living condition to all Mongolian citizens, and to transfer the revenue of natural resource exploitation to future generations from the current generation. The underlying principle for the fund operation can be shown through the balance sheet as follows: 

It should be noted that this is only one scenario for many possible solutions. The following results will be achieved through the creation of a proper financial mechanism:

·         Citizens will be enabled to own their natural resources, and profit from the revenue generated from the resource extraction.

·         A mechanism for the transfer of wealth to the next generations will be created

·         Investment could be made to other economic sectors using the revenue generated from the mining sector

By creating the appropriate infrastructure in the financial sector, Mongolia would be able to resolve a number of issues to raise the economy to a new level of development.

Link to article

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April 23 (Allens) --

In brief: Foreign investment in Mongolia fell away dramatically after the Mongolian Government last year introduced laws regulating foreign investment into strategically important business areas as well as investment by state-owned entities. Now the Government has introduced amendments which soften some of those restrictions in an effort to again encourage inbound capital. Partner David Wenger (view CV) and Lawyer Anthony Lepere look at the amendments and their significance to foreign investors.


·         Non-state owned companies will no longer need to seek approval from the Mongolian parliament (the State Great Khural): Only investments:

o    by a 'wholly or partly state-owned foreign investor'; and

o    that would result in more than 49 per cent of the shares in a 'business entity operating in sectors of strategic importance' (strategic entity) being held by the 'wholly or partly state-owned foreign investor'.
will need parliamentary approval.

·         All other investments by a 'wholly or partly state-owned investor', and certain investments by other foreign investors in a strategic entity, will still require the approval of the Cabinet.

·         The amendment does not provide any guidance as to what level or form of state ownership is necessary for an entity to be characterised as a 'wholly or partly state-owned foreign investor'.

·         Other areas of the Law that have created uncertainty for investors have still not been clarified. 


The recent history of the regulation of foreign investment into Mongolia is detailed in our Focus of June 2012, which was published shortly after the passage of the Law on Regulation of Foreign Investment in Business Entities Operating in Sectors of Strategic Importance (the Law) on 17 May 2012. The features of the Law to which the amendment relates are detailed in our previous Focus under the section 'Key concepts from the law'. In our Focus, we also noted with concern that certain features of the Law may cause weakened foreign investor confidence. Unfortunately, foreign investment into Mongolia slowed following the passage of the Law and the amendment is intended to reverse this trend.


Key concepts from the Law

·         Sectors of strategic importance: The Law is concerned with 'sectors' which 'are strategically significant for meeting basic living needs of the population, maintaining independence and normal functioning of the economy, generating national revenue, and ensuring national security'. The 'sectors of strategic importance' listed in section 5.1 of the Law are:

o    minerals;

o    banking and finance; and

o    media and communications. 

·         Distinction between state-owned and other foreign investors: As a general matter, the Law distinguishes between state-owned foreign investors (on the one hand) and all other foreign investors (on the other).

o    While the concept of state-owned foreign investors is not defined, s4.1 refers to 'foreign state owned legal entities or entities with state ownership, international organizations, their affiliated entities or third parties [which] operate in Mongolia or are to invest in businesses [in Mongolia]'. The effect of s4.1 is that all investments into Mongolia by such state-owned foreign investors require the permission of the Cabinet.

o    By contrast, only certain types and levels of investment by other foreign investors into strategic entities require the permission of the Cabinet. Other foreign investors are required to:

§  give notice of (but not obtain permission for) transactions under which they would acquire between five per cent and one-third of the shares in a strategic entity; and

§  obtain permission from the Cabinet for any transaction listed in s6.1 of the Law, which includes acquiring more than one-third of the shares in, or obtaining control of, a strategic entity.

The regime created by s4.7

·         Section 4.7 of the Law previously provided 'In case when shareholding of foreign investor in [Strategic Entities] is to exceed 49 per cent and the amount of the investment at the time is to exceed 100 billion togrogs, the State Great Khural shall resolve as submitted by the Cabinet. In other cases the Cabinet shall resolve the matter of granting permit.'

·         This provision empowered the State Great Khural to determine whether or not to permit any transaction involving a foreign investor:

o    that would result in the 'shareholding' of the 'foreign investor' in a strategic entity exceeding 49 per cent (the shareholding threshold); and

o    under which the 'amount of the investment at the time' is to exceed MNT 100 billion (the value threshold).

The changes contained in the amendment

There are two differences between the position under previous s4.7 of the Law and position that now applies following the passage of the amendment:

·         Section 4.7 of the Law previously applied to all 'foreign investors'. The application of s4.7 is now limited to 'wholly or partly state-owned foreign investor' entities.

·         Section 4.7 of the Law previously contained both a shareholding threshold and a value threshold. The amendment has removed the value threshold so that only the shareholding threshold remains.

The likely practical effect of these differences is that fewer transactions will be subject to the State Great Khural process. Importantly, investments by non state-owned foreign investors in strategic entities and investments by state-owned foreign investors in entities other than strategic entities will only be subject to Cabinet approval.

The approval processes

·         (Overview) The Law contemplates two types of approvals processes:

o    transactions that require approval under s4.7 are subject to the State Great Khural process; and

o    all other transactions to which the Law applies are subject to the Cabinet process.

·         State Great Khural process: The State Great Khural process is a three-step process. Following the submission of a request by a strategic entity that is proposed to be the subject of a transaction that requires approval under s4.7:

o    the state organization in charge of foreign investment (the Regulator) will consider the request and submits a proposal to Cabinet (within 45 days);

o    the Cabinet will consider the proposal and submit the request to the State Great Khural (no time limit); and

o    the State Great Khural will consider the request and resolve whether or not to permit the investment (no time limit).

·         Cabinet process: The Cabinet process is a two-step process. Following the submission of a request by a strategic entity that that is proposed to be the subject of a transaction that requires approval under a provision of the Law other than s4.7:

o    the Regulator will consider the request and submit a proposal to Cabinet (within 45 days); and

o    the Cabinet will consider the proposal and decides whether or not to permit the investment (within 45 days).

·         Differences: There are two important differences between the State Great Khural process and the Cabinet process.

o    There is no time limit for the State Great Khural process. By contrast, the Cabinet process is subject to a 90-day time limit for decision-making (with a further five-day period for the Regulator to communicate the decision of the Cabinet).

o    The State Great Khural process is more public than the Cabinet process. For this reason, it is possible that transactions that are subject to the State Great Khural process will be less likely to be approved than transactions that are subject to the Cabinet process.

Remaining issues

Notwithstanding the amendment, there remain several issues with the application of the Law.

·         What constitutes a 'wholly or partly state-owned foreign investor'? The Law does not:

o    prescribe the minimum percentage of state ownership necessary for an entity to be characterised as a 'wholly or partly state-owned foreign investor'; or

o    distinguish between direct ownership and indirect ownership or provide guidance on how to calculate or aggregate indirect ownership.

·         What process will be followed by the regulator in applying the Law? While some guidance has been given as to what constitutes the national interest against which proposals will be assessed, application forms and other specific filing requirements are yet to be provided.

·         How does the Law apply to financing transactions under which security will be taken over shares?

It also remains unclear:

·         whether the Law has any retrospective effect;

·         whether the Law applies to incremental foreign investments (ie, must the Regulator approve further foreign investments into strategic entities after having already approved the first foreign investment?);

·         the extent to which there are inconsistent provisions of international treaties that will prevail over Law; and

·         how the provisions of s6.3 (requiring the payment of Mongolian tax in relation to certain foreign investments) will be applied.


While the amendment is a step in the right direction, many issues with the Law remain. We are also aware of recent comments which suggest that the Law may be further amended so that it will apply only to wholly or partly state-owned foreign investors and that a new law (based on international practice) will be put in place to deal with private sector investment. We will continue to closely monitor the evolution of Mongolia's foreign investment regime and welcome any changes which clarify how foreign investment will be regulated in Mongolia and which permit foreign investment on a properly regulated basis.

Link to report


Amendment to Mongolia's Strategic Foreign Investment Law - Hogan Lovells, April 22

Investment In MongoliaClyde & Co, April 23


OSCE: Recruitment of National Support Staff for the Election Observation Mission to Mongolia

Following an official invitation to observe the presidential elections in Mongolia scheduled to take place on 26 June 2013, and based on the findings and conclusions of the OSCE/ODIHR Needs Assessment Mission, the OSCE/ODIHR has decided to deploy an Election Observation Mission (EOM). As a result, the OSCE/ODIHR is looking to recruit support staff for the below mentioned positions:

Programmatic Positions:

§  EOM/MNG Executive Assistant to the Head of Mission (1 position)

§  EOM/MNG Administrative Assistant to the Deputy Head of Mission (1 position)

§  EOM/MNG Senior Election Analyst Assistant (2 positions)

§  EOM/MNG Senior Legal Analyst Assistant (1 position) 

§  EOM/MNG Senior Political Analyst Assistant (1 position)

§  EOM/MNG Senior Media Analyst Assistant (1 position)

§  EOM/MNG Senior Parliamentary Liaison Assistant (1 position)

§  EOM/MNG Media Monitor (6 positions)

§  EOM/MNG Senior LTO Co-ordinator Assistant (1 position)

Administrative Positions:

§  EOM/MNG Security Expert Assistant (1 position)

§  EOM/MNG Senior Operations Expert Assistant (2 positions)

§  EOM/MNG Junior Operations Expert Assistant (2 positions)

§  EOM/MNG IT and Communications Assistant (1 position)

§  EOM/MNG Administrative (Finance) Assistant (1 position)

§  EOM/MNG Procurement and Contracting Officer Assistant (1 position)

§  EOM/MNG Front Office Assistant (1 position)

§  EOM/MNG Driver with own car (4 positions)

§  EOM/MNG Cleaner (1 position)

§  EOM/MNG LTO Assistant-Interpreter (15 positions)

§  EOM/MNG Driver with car for LTO team (15 positions)

§  EOM/MNG Data Entry Clerks (20 positions)

For more information about the responsibilities and requirements of the post, please read the terms of reference, under the links to the right.

Start date: 2 May 2013 (for administrative positions) and 10 May 2013 (for programmatic positions)

Employment duration: approximately 6-7 weeks (for most of the positions). The selected candidates should commit to being available for the duration of the EOM.

Location: Ulaanbaatar, Mongolia for all positions, except LTO Assistant-Interpreter and Driver for LTO team, who will be based in the different regions of Mongolia.

Remuneration: Remuneration will depend on the qualifications and experience, in accordance with established OSCE rates.

Application procedures: Candidates interested in applying for any of above mentioned positions should send an updated CV in the English language indicating in the subject of the e-mail the position(s) for which they are applying (e.g. EOM/MNG Senior Legal Analyst Assistant) to

Candidates for Drivers with vehicles positions should indicate the Car Model, Car Year of Production and Number of doors of the vehicle in the CV.

Application deadline: 25 April 2013 for Administrative positions; 7 May 2013 for programmatic positions.

Additional notes: The working language of the OSCE/ODIHR Election Observation Mission is English.

The OSCE retains the discretion to re-advertise the vacancy, to cancel the recruitment, to offer an appointment at a lower grade or to offer an appointment with a modified job description or for a different duration.

Only shortlisted applicants will be contacted.

The OSCE is committed to achieving a better balance of women and men within the Organization. Female candidates are particularly encouraged to apply.

Note: No application fees are required by OSCE/ODIHR for its recruitment process at any stage (application processing, interview meeting, training or any other fees).

Link to post

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Mongolia Tavan Tolgoi says coal exports to China to resume on Monday

April 22 (Reuters) - Mongolia's massive Tavan Tolgoi coal mine will resume exports of coking coal to China on Monday after suspending deliveries in January due to cost pressures, the state firm in charge of the project said.

Erdenes Tavan Tolgoi signed an initial $250 million coal sales agreement with Aluminium Corporation of China (Chalco) in July 2011, but halted deliveries in January, saying the price paid for the coal was below the cost of production.

The firm, already saddled with huge debts, said it wanted to renegotiate the terms of the Chalco deal.

Late in January, Chalco, threatened to take legal action against Erdenes Tavan Tolgoi if it failed to comply with the terms of the contract.

Erdenes Tavan Tolgoi said in a statement on Monday that cost cutting at the mine had allowed it to reduce its losses. It would resume deliveries to Chalco immediately, but was still seeking to renegotiate the 2011 deal.

Chalco was not immediately available for comment when contacted by Reuters on Monday.

The development of the Tavan Tolgoi mine, located about 300 km (185 miles) from the Chinese border and thought to contain as much as 7.5 billion tonnes of coal, has been repeatedly delayed due to financing problems and bureaucratic hold-ups, as well as debates about the role of foreign investment in the project.

A plan to allow an international consortium including Peabody Energy Corp of the United States and China's Shenhua Group to develop the western section of the project fell by the wayside in 2011 amid complaints that the bidding process was unfair.

Erdenes Tavan Tolgoi said in January that it had also shelved a plan to list the eastern block of the project on overseas stock exchanges this year, saying market conditions were not favourable.

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Erdenet cashmere factory opens

April 23 (BDSec) The Minister of Agriculture and Industry, Kh.Battulga, opened a new cashmere factory in Erdenet on Sunday as part of his visit to the Erdenet Khivs Carpet Factory in Orkhon Province.

The Erdenet Cashmere Factory was opened with ministry support following a commitment made by the government last year that a new "industrial revolution" would be initiated in Mongolia, with the aim of ending the export of unprocessed animal-related materials, renewing domestic value-added production, and increasing the manufacture in Mongolia of "final products."

"Our nation will only prosper if we diversify our economy and decrease dependency on mining products such as copper and coal. To achieve this, one of the most important steps we can take is to begin processing animal-related products domestically," said Minister Kh.Battulga on Sunday.

The Erdenet Cashmere Factory will be the second-largest textile and fabric factory in the country. According to company representatives, if it operates at full capacity, Mongolian textile producers will not have to depend on Russian imported thread and yarn as they currently do. According to industry representatives, this will help boost the productivity of the textiles and cashmere sector.

Officials such as the Head of the Light Industry Policy Implementation Management Department of the Ministry of Agriculture and Industry, Ts.Bayarmaa, representatives from the Ministry of Economic Development, and private sector representatives participated in Sunday's opening ceremony.

Representatives of the Erdenet Khivs Carpet Factory told Kh.Battulga during his visit that the company has been seeking to expand its facilities since 2008, and seeks to triple its production of textured yarn and assembled goods. Their goal has been to stop the export of raw wool (at low prices) and increase domestic production of value-added finished products.

According to the Erdenet Khivs representatives, a visit to all of the factory's stages of production requires walking a distance of six kilometers around the site.

Erdenet Khivs was established in 1981 and reportedly produces 96 percent of Mongolian carpets. The company exports around 20 percent of their goods, to 19 countries.

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NYU students create clothing line Naadam Cashmere to support nomadic herders

April 21 (Washington Square News) When SCPS senior Matthew Scanlan became aware of the poor living conditions of nomadic herders in Mongolia after his former roommate Diederik Rijsemus made a trip there, the duo decided to find a way to improve lives.

In 2010, Scanlan and Rijsemus, who is a master's candidate in the Netherlands, launched Naadam Cashmere, a socially conscious clothing line, to assist the herders who struggle with poor conditions. The brand sells sweaters made from 100 percent Mongolian cashmere harvested by the nomadic herders.

On April 5, Scanlan launched a Kickstarter campaign to raise awareness of the herders and their struggles while building their brand. As of April 20, the duo has raised over $36,000. When individuals contribute to the campaign, which ends on May 15, they receive rewards ranging from Naadam Cashmere socks to a trip to Mongolia with Scanlan and Rijsemus.

"We wanted to help these herders to protect their culture and livelihood," Rijsemus said. "Along the way we found an avenue for doing this through the cashmere business."

The name Naadam comes from the Naadam Festival, Mongolia's biggest annual festival which unites both city dwellers and nomads to celebrate their rich ancestry.

Scanlan and Rijsemus collect fibers from the herders and then manufacture the sweaters in Mongolia. Once the sweaters are sold, the pair takes 10 percent of the profits and invests in the Index-Based Livestock Insurance Program, an initiative created by the World Bank, to protect the herders who sourced the garments.

"We realized we could contribute to the program and pay premiums for individual families of the herders," Scanlan said. "The cost is relatively low for us but quite substantial for a family of nomads."

Naadam Cashmere is currently sold at small boutiques in New York City and Washington, D.C. Scanlan and Rijsemus collaborate with designers to create exclusive items that can only be found in stores.

"We do 70 percent of sales online and 30 percent via brick and mortar," Scanlan said. "The idea is to build an e-commerce business where we can lower prices and respond quicker to customers' needs."

As the duo and their brand continue to gain exposure through the Kickstarter campaign, Scanlan's main goal is to raise as much support and help as possible.

"We need to get the word out," Scanlan said. "If we want things to change, we have to be the ones to do it."

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April 23 (InfoMongolia) Minister for Road and Transportation A.Gansukh reported on additional agreement set for a new International Airport in Khushigt Valley, Tuv Aimag and its current work processes during the Democratic Party Group meeting at the Government House held on Monday, April 22.

As part of the negotiations held between the Governments of Mongolia and Japan, following the recent visit of the Prime Minister of Japan Shinzo Abe to Mongolia, 17.1 billion Japanese Yen was decided to invest additionally into the project to construct a new airport in Mongolia.

However, the project was discussed since 2006, moreover the groundbreaking ceremony was held exactly a year ago on April 23rd, but it has not been implementing to date.

Therefore, Minister Road and Transportation was obliged to start the project from May 01, 2013.

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U.Ganzorig: If you have passion and ambition you could actually make a difference to Mongolian people

April 23 (Allyson Seaborn, UB Post) Ganzorig Ulziibayar is understated; his office is understated.  The Polar Star he received from the President of Mongolia for his contribution in the development of Mongolian financial markets hangs in an inconspicuous spot on his wall, dwarfed by other awards, certificates and degrees. The Financial Markets Association was something he and some colleagues formed over ten years ago to promote professional code of conduct and financial education.

I ask him what he's most proud of on his office wall. "Well, actually you get a PhD or something similar because you are worthy of receiving a PhD. You are not proud of the actual diploma. You are proud of what went into the degree and for what you have achieved," he replies. So Ganzorig – known to his friends as Ganzo – isn't particularly fussed about the small golden star on his wall. He's proud of all he's achieved and so he should be.

"The Financial Markets Association is still the biggest public professional association doing public education in Mongolia. Since its inception, it has really broadened its scope and helps Mongolians understand finance and helps to improve the financial markets here. Financial markets are of course, the infrastructure and backbone of economic development. The Association has also heavily invested in building necessary infrastructures on the public side of things," he explains.

Founding Chairman and fellow board member of the Business Council of Mongolia, J Peter Morrow, has this to say about his colleague: "He is a creative and talented guy, having a big impact on the Mongolian business scene."

Ganzorig is, of course, modest about the different hats he wears. Among many things, he's President of Mandal Insurance and Chairman of the United Mongolian Corporation (UMC).  The UMCs philosophy and belief (as stated on their website) is that "fundamentally, business is not about making money, but about creating sustainable positive value for the community."  UMC was established in 2004 as a consulting group to advise and help businesses increase their efficiency. Since then, the company has undertaken a number of high profile advisory jobs and has diversified into investment management, deal negotiations and asset management. UMC has also co-invested, structured and managed several high profile real estate deals in Mongolia.

Ganzorig also feels professionalism in the corporate sector is something which is lacking in Mongolia today. In his opinion, non-profit professional organizations play a very important role in a properly functioning society by providing a discussion platform for ideals exchange. "Integrity and professional ethics are born in and spread out from professional clubs. Among a dozen professional associations I helped to establish during the last 10 years, most of them are functioning very well."

He was born in Warsaw, Poland in 1981 as both of Ganzorig's parents were studying science at university there. He tells me that "during that time, if you performed well in high school and passed your exams, you went to the Eastern Block Countries for higher education – so that's why I was born in Poland. I was, however, raised in UB for half of the year and the other half in the countryside in Tuv Aimag. My grandparents, who often looked after me, were retired teachers and decided to live in the countryside rather than in the city. They bought a few hundred animals, but it was not nomadic life."

I ask his opinion of today's Mongolia. He tells me "I think Mongolia is an interesting economic paradigm. China has been rising for twenty years and this cannot continue forever because economies are like waves that go up and come back down. I think Mongolia really needs to tackle this momentum now before it's too late and I believe that's why we're at an important focal point. Maybe we will fail to realize this, but I don't think this is in everyone's best interest."

Ganzorig has been lecturing at Mongolian universities free of charge for ten years and describes himself as a "local product" and, as such, he understands the problems that Mongolians face today. "Other elements need to be added to the current education system. It should be practical and grounded to Mongolian needs. Mongolians require hope and a good education so they gain the confidence needed to advance," he explains. "Today I talk to students about leadership or just about life because there needs to be guidance from a brotherly figure. New graduates will be developing this country and should be preparing as citizens and get some drive. Most of the time I really feel the urge to go out and convey my experience to younger generations."

His insight into the old way of life in Mongolia is fascinating. Ganzorig describes how  "as a child you live in an imaginary world and as an adult you get closer to reality, so maybe at my age it's impossible to accurately compare the previous Mongolia to what it is today. What happened, however, is that we threw out the socialist elements we thought should go and in the process, some of the good aspects of the socialist educational system were stripped off."

He goes on, "for example, at all levels of the socialist education system we were told to be good people via songs, poems and plays. Many thought of this as propaganda, but these social values about being a good person were important. Social values about how humans should behave should be the same in either a capitalist or socialist society. Social foundations are the same for all people – whether you are a nomad or a Harvard graduate, we are people. All the other things are the small details. So during the socialist era, Mongolians were receiving good messages in schools about how to behave."

Ganzorig points out that when Mongolia became a democracy, these social messages were lost and were no longer taught to children in school.  He believes the free market education system is a fallacy and mistaken when it says it promotes the best people up. "What you have to do is raise the system itself. You don't leave people in the mud and expect natural selection to just take place. For the last twenty-three years our education system has been lacking these social messages for being good people and you can observe the ramifications today. We've not been preparing socially responsible citizens with good moral values," he says regretfully.

You wouldn't expect a man like Ganzorig to have much time for sports or hobbies, but that isn't quite true.  "My life and my job are so intertwined. My job is also my passion and my hobby. I love lecturing, writing economic analysis, lobbying the government for bigger and better change and doing things like discussing the new ideas for the Mandal brand, even looking at the real estate investment project on the UMC side of things. I think that is my pastime," he chuckles.

He does however, acknowledge the need for balance and tells me he plays basketball once a week and tries to do yoga occasionally. He also takes a moment to explain the history of yoga in India and of tai chi in China, noting that the "two things are all about moving your muscles and stretching without exerting your heart too much. So it's all about slow movement, but self-sustainability, so I guess that's why I enjoy it so much."

Ganzorig is not fond of travelling. Somehow I have an idea that it's probably quite difficult to drag him away from the two giant computer screens sitting on his desk. He beats me to the question. "I like to stay in the office," he laughs. "I do like hiking, though, and the fresh air as long as it's not too far. What's the point of being in a car or plane for so long – as long as you're outside? I don't really prefer one region of Mongolia over another. Every part of Mongolia's natural landscape is unique and beautiful."

Ganzorig doesn't have a favorite Mongolian expression, but he's unique in that he wishes to share his least favorite one with me. "I find this a bit of a joke," he begins light heartedly. If you don't have a debt you are rich; if you don't have any illness you are happy. I agree with the second part right, but I do not agree with the first part at all."

He explains Mongolians traditionally thought about debt negatively, with an anti-borrowing mentality, frowning upon mortgaging one's house or simply applying for a bank loan. "This is, of course, an old traditional saying which is no longer relevant to Mongolia right now. If you want to develop and believe in your future, you have to borrow and invest in yourself. I'm not talking about going to the casino or buying a brand new car with borrowed funds. I'm talking about borrowing to invest in your education or your business or your house."

What does this insightful man think about the future of Mongolia? "I think during the next ten years we'll experience a good economic boom. I'm confident about this. I think it's time for change and the public consensus is there. Everyone is tired of being poor. We have a young population, a huge landmass and good mining resources. This country has been here a few thousand years. We have a rich culture and traditions. I think we just need to make people remember this and energize them and then this country will be going forward at a very fast pace."

Inspiration-wise, Ganzorig admires Steve Jobs. "I've just read his biography. He was an inspiration and this book energized me. His life is proof that if you have passion, you can create anything. Money is not the biggest problem – it's the 100th problem, but before that there are 99 problems you must overcome before that."

I ask him how he feels about foreigners in Mongolia. He asserts that  "foreigners need to understand Mongolia is in a different paradigm. Although it's not their problem or obligation, I'd like to say to the foreign expats here that you could help this country move forward because you have this knowledge. If you have passion and ambition you could actually make a difference to Mongolian people. After all, whether you are British, French or Mongolian we are all humans at the end of the day. Maybe you could do something for the Mongolian people and be proud to leave your legacy not just to Mongolians, but to the world."

Ganzorig then describes to me a profound childhood experience that left a memorable imprint on his psyche. His tone softens and I'm reminded of the line from Wordsworth's My Heart Leaps Up When I Behold, "The Child is the Father of the Man."

He shares a poignant story with me – one that helped form who he is today.  "I had this childhood friend whose parents were divorced – his mother had left him. His father was an alcoholic so he lived with his grandfather and older sister. He was my best friend in school and within the space of one month both his father and grandfather died, leaving two kids alone. Unfortunately, I was in no position to help really, of course. The relatives came in and took over the situation, but these kids were so bright and had such promising futures and great potential. They could have been bank CEOs, but their lives were jeopardized and changed in a split second right in front of my eyes." He glances ruefully out the window. "This incident really helped me to understand hardship. From a young age I started to understand the complexities of life. I desperately wanted to understand the meaning of events like this, actually even as a kid, and this helped me. If our society had good infrastructure in terms of equal opportunities, then my friend could have really have gone somewhere. His life is broken to this day. He couldn't attend university and being uneducated can destroy a person and leave them with little hope. This shouldn't happen in our society, but it does. I still keep in touch with my friend, you know."

Later that evening I Google the meaning of the name Ganzorig and find out it translates to "steel courage" – a name that suits this philosophical business man perfectly.

Although most of Ganzorig's thoughts and writings are in Mongolian, you can read more about his opinions and ideas at

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Thai PM to visit Mongolia during April 27-29

BANGKOK, 23 April 2013 (NNT) – Prime Minister Yingluck Shinawatra is set to pay a visit to Mongolia on April 27-29 to attend the 7th Ministerial Conference of the Community of Democracies. She will be accompanied by leading Thai investors who will discuss trade opportunities with their counterparts. 

H.E. Chimeddorj Battumur, Ambassador Extraordinary and Plenipotentiary of Mongolia to the Kingdom of Thailand, has paid a visit to the Thai Premier. During the visit the two discussed the Seventh Ministerial Conference of the Community of Democracies, which Ms Yingluck would attend on April 29; during her visit to Mongolia. The Thai PM will also be accompanied by a group of representatives from the Thai private sector in various industries, including education, agriculture, energy, automobile, mining, and tourism, who will discuss cooperation between the two sides. 

At the conference in Mongolia, Ms Yingluck will deliver a speech focusing on Thailand's commitment to promoting democratic principles and human rights, regardless of gender, age,or economic status. 

On April 28th, the Thai Premier will meet with the Mongolian President and sign two memorandums of understanding (MoU's). 

The Ambassador congratulated both countries for the strong bilateral relations. He also thanked the Thai Premier for her plan to attend the 7th Ministerial Conference of the Community of Democracies.

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North Korea Asks Mongolia for Food Aid

April 22 (WSJ) As North Korea heads into the time of year when its food supplies run low, it appears to be looking for new donors. At a courtesy call on the Mongolian president last week, Pyongyang's new ambassador made a request for food aid, according to the official website for the head of state.

"North Korea may face (a) severe food shortage," Ambassador Hong Gyu told President Elbegdorj, according to the account. Mr. Hong then asked for Mongolia to consider the possibility of delivering food aid to North Korea, the account said.

North Korea's toughest part of the year for food begins in April and runs through September, when the annual corn harvest begins. Kwon Tae-jin, a scholar on North Korean agriculture in Seoul said that last year's yield was moderate, but not sufficient to tide the country over.

"We've learned that while rations are being delivered, it varies region by region," said Dr. Kwon, a director at the Korea Rural Economic Institute in Seoul. "But it isn't sufficient to go around for everyone."

There are other signs of food shortages. Daily NK, a news website staffed by North Korean defectors, reported last week that Pyongyang did not distribute food to the northernmost province for the biggest holiday of the year; the April 15 anniversary of the birthday of North Korean founder Kim Il Sung.

Since the severe famine in the 1990s, North Korea has struggled to feed its people.

Assistance from international organizations and South Korea has dropped in recent years but President Park Geun-hye has pledged to continue providing aid to the North despite a deterioration in relations with Pyongyang.

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Culture, Society, Environment and Other

The Mongolist: The Middle Layer

April 22 (The Mongolist) A decade ago when I was a Peace Corps Volunteer, I often heard from other ex-pats the startling fact that Mongolia was the highest recipient of development aid per capita in the world. It was usually stated with a hint of derision that implied, "Look around and tell me that money isn't being totally wasted here." I am not sure why that fact stuck with me, but it may have been because not too long after my Peace Corps service I was doing an unrelated research project that involved looking at per capita aid amounts. Naturally, given the many times I had heard the aid per capita fact about Mongolia, I expected to see it at the top of the list.

I was reminded of that experience of accidentally fact-checking Mongolia's aid per capita rank while reading a recent article in Foreign Policy Magazine written by Professor Peter Murrell at the University of Maryland. Professor Murrell begins his article by describing the Mongolian news cycle, which is driven by itinerant international journalists and observers, as "publish, forget, and repeat."1 This description of the news cycle caught my attention, because it is also a succinct way of describing the peculiar life cycle of knowledge about Mongolia.

Returning to the aid per capita fact, Professor Morris Rossabi of Queens College published a book called "Modern Mongolia: From Khans to Commissars to Capitalists" in 2005. On the back cover of the book it is stated that Mongolia is "the world's fifth-largest per capita recipient of foreign aid."2 Not quite the highest in the world, but still pretty high. A similar yet more ambiguous statement appears in a report called "Mongolia - Heaven for Foreign Consultants" published the same year. It says "Mongolia is the fifth most aid-dependent country in the world."3 There is no citation on the book cover and the report only provides a link to the OECD statistics website without additional information about how the ranking was derived. When I looked at per capita aid amounts after my Peace Corps service, in a sense I was inadvertently attempting to replicate the results of a previously established fact about Mongolia. A fact that international observers used to support arguments that implied a distinctive misuse of foreign development aid in Mongolia.

To my surprise at the time, I was unable to replicate the expected result of Mongolia ranking in the top five. In preparing this post I decided to reproduce the rankings I did find. Using "net official development assistance and official aid received" and population data from the United Nations for the years 2000-2004, Mongolia had an average ranking of 30th just below Djibouti and just above Maldives.4 During that period the country received approximately USD 95 in aid per capita on average, which is considerably less than the highest amount received of USD 1942 per capita in French Polynesia.

The point here is not to show that the statements of highest or fifth highest aid per capita were wrong (because I don't know the underlying context or methods used to derive them) but rather to demonstrate how ambiguous ideas and uncertain information about Mongolia have a way of unjustly turning into definitive fact and common knowledge. The per capita aid ranking may seem benign today given the extraordinary economic growth in Mongolia, but it was used often in arguments for this or that policy prior to the rise of the mining economy. Given its prevalence and persistence in the public debate on development in spite of its inherit uncertainty, I came to the conclusion after seeing the United Nations data that the fact's validity was assured by its expediency to criticize and reinforce biases rather than its grounding in reality.

If you modify Professor Murrell's "publish, forget, and repeat" observation slightly and  substitute "uncritically recycle" or "use out of context" for "forget," you get closer to how bad ideas can persist as fact for so long. The middle layer between where ideas spontaneously leap into existence and where they become definitive knowledge is a very narrow filter that allows more than its fair share of bad ideas to get through. The diversity of expert information sources is limited, and this unintentionally allows good ideas to be overlooked or forgotten and bad ideas to get uncritically recycled and reinforced in the body of knowledge.

Conceptually one can think of the middle layer here as the critical observation and debate that spring up around social and political issues. There are classes of professionals such as journalists, academics, and business analysts who make their livings analyzing, synthesizing, and refining information in the middle layer. They make a living, at least, if there is a market large enough to support their services, and in principle they face competitive pressure to continuously refine ideas to improve their predictive or explanatory ability. Good ideas still get overlooked and bad ideas still make it through, but over time the good should dominate the bad. The market for expert analysts and synthesizers in Mongolia is not large. It is generally oriented towards services like specialized or proprietary consulting for businesses, technocratic analysis for other technocrats, or partisan tabloid journalism. Academic research also has a tendency to become sequestered in difficult to access books or journals, further reducing the supply of good and useful information. As such, the rest of us can often feel left out in the cold grasping for knowledge. It is a frustrating part of life in Mongolia if one truly cares about understanding what is happening in the country. Instead of having more information sources than one can ever hope to utilize, any ideas with mere plausibility, no matter how dubious their sources or implications, are zealously snatched up and often uncritically used to do things as benign as explain a curious situation to as dangerous as influencing political or policy decisions.

Consider the way the office of the president and, in particular, President Elbegdorj is portrayed in international media. In 2010 Newsweek magazine declared President Elbegdorj "The Future King Midas" given the immense gold and precious mineral wealth in Mongolia. A fantastic statement from the piece is "Mongolian president Tsakhiagiin Elbegdorj knows he's sitting on a gold mine."5 The problem with this observation beyond its patent silliness is that it presumes that the power of the executive lies in the president in Mongolia's political system rather than the cabinet overseen by the prime minister. The constitutional authority of the president is very limited, especially in terms of how the country's mineral wealth will be used, so saying that he by himself is sitting on a gold mine is a stretch that leads to the very wrong conclusion that he alone holds sway over Mongolia's economic fate.

There is no way of knowing if the Newsweek piece had an impact on people's perception of the power of the presidency, but President Elbegdorj does seem to enjoy a certain level of international notoriety that indicates that this skewed perception is not unusual. The upcoming election for president, for example, has been routinely pointed to as a major factor driving the dispute between the government and Rio Tinto over Oyu Tolgoi. The argument goes that the president is burnishing his populist credentials by showing how tough he is on foreign investors. Maybe. But, the election date was only set recently and campaigning is several weeks away. Moreover, he still is not facing any credible challenge. Projecting presidential executive power from other political systems onto Mongolia's misses the reality that the government is led by the prime minister and his cabinet even if the president may be an accomplice in the cabinet's political strategy. There are better and more accurate political reasons for the dispute, too. The biggest being that the national budget has a huge deficit and the dispute was kicked off on the basis of raising more money through increased royalties. Seeking revenue--not votes--is likely more the dominant force behind the political tension at the moment.

The focus on the election is not wrong. Rather it is not balanced by other critical observations, giving it undue influence in the way the situation is described. It leads to missing subtleties and nuance. For example, in the February 1st special session of parliament President Elbegdorj gave remarks on the Oyu Tolgoi project. The local and international media focused on his seemingly populist statements that the time had come for Mongolia to take control of the Oyu Tolgoi project.6 Yet, one of the interesting aspects of the President's remarks was that he ended them with a revealing admission of the challenge the country faces. The entirety of his closing remarks are too long to put here, but the following lines capture their essence:

"The most important thing now is to form a group of good professionals...In order to do that we need financing to attract good people and allow them to work...Rio Tinto is a big company in the world that can hire the best lawyers, the best financiers, and allies to do whatever. Mongolians can't face that with one or two ministers, or one agency head. We need to have a professional team. In order to do that we need to allocate money. We at least need to place our attention [on this issue]."7

To international observers he was upbraiding foreign investors to burnish his credentials, and maybe he was in part. But, his remarks also provided a deeper insight, whether consciously or subconsciously intended, about the government's difficult situation in managing its own responsibilities. This insight was generally overlooked, and missed another possible explanation of the president's strident remarks as a form of political deflection. So, is the dispute more about pure political calculations of "resource nationalism," elections, and populist credentials or is it more about problems of governance such as revenue, mitigating deficiencies, and deflecting blame? Maybe it's a little bit of everything, but the election has somehow become the dominant explanation. This may be because it provides false hope that things will naturally calm down after the election or because it confirms an assumption that there is a hidden strategy to rationally explain the self-inflicted wounds resulting from the Oyu Tolgoi dispute. Whatever the reason, the election argument is far from conclusive.

The middle layer between ideas and established knowledge should be dynamic and an ever churning sea of new observations and debate, but in Mongolia the middle layer is at times depressingly static and bad ideas are stubbornly persistent. I often get the impression that there are only two acceptable ways to view any situation in Mongolia and to get those views published, either be simplistically negative or simplistically positive to fit into well worn narrative templates. It doesn't hurt to throw in elaborate conspiracies as well from time to time. It is understandable from a human perspective why this is the case. We're all looking for easy answers, and where there are none, our imaginations are prepared to fill in the gaps. However understandable the situation may be, it makes the refrain in the Steelers Wheel song "Stuck in the Middle with You" feel like the unofficial anthem of those who wish for better.

Clowns to the left of me,
Jokers to the right, here I am,
Stuck in the middle with you.8

In social policy and politics there is rarely Truth with a T, and diversity of well informed opinion, insight, and observation provides the best defense against bad ideas dominating the body of knowledge. The life cycle of knowledge about Mongolia is not there yet, but there is hope that as Mongolia's economy continues to grow maybe the middle layer will also grow with it.


1. Peter Murrell, "Mongolia's Growing Pains Mongolia's blue skies may soon be darkening. A key challenge: Putting the mining companies in their place", Foreign Policy Magazine,, 2013-04-05.

2. See back cover Morris Rossabi, "Modern Mongolia: From Khans to Commissars to Capitalists", University of California Press, 2005.

3. Lkham Luvanjamts & Marie Söderberg, "Mongolia - Heaven for Foreign Consultants",, 2005, pg. 1.

4. Using "Net official development assistance and official aid received (current US$) 2000-2004" and "Total population, both sexes combined (thousands) in 2000" from, I averaged per capita aid amounts using base 2000 population data. A similar result is derived using "Net ODA received per capita (current US$)" from  

5. Isaac Stone Fish, "The Future King Midas: Tsakhiagiin Elbegdorj", Newsweek,, 2010-08-16.

6. See example Michael Kohn & Yuriy Humber, "President Says Mongolia Should Get More Control of Mine", Bloomberg,, 2013-02-05.

7. "...хамгийн гол юм одоо мэргэжлийн сайн баг бүрдүүлэх хэрэгтэй...Тэгэхийн тулд, мөн сайн хүн авчирч ажиллуулахад санхүүжилт хэрэгтэй...Рио Тинто гэдэг олон улсын энэ том компани дэлхийд байгаа хамгийн сайн хуульч, хамгийн сайн санхүүгийн улсууд, хамгийн сайн, магадгүй цаанаа энэ олон буруу сайн зүйлийг хийж чаддаг нөхдүүдийг хөлсөлнө. Монголчууд өөдөөс нь ганц сайд, хоёр сайд, нэг газрын дарга уулзаж байж болохгүй. Тэгэхээр манай баг мэргэжлийн сайн баг байх ёстой. Үүнд мөнгө ч гаргах хэрэгтэй. Анхаарал ч тавих ёстой." See "Оюу толгой хуулийг яаж хэрэгжүүлдэг, яаж хүндэтгэдэг, яаж ил тод, хяналттай ажилладаг гэдгээ харуулах ёстой", Official Website of the President,, 2013-02-01.

8. See Stealers Wheel, "Stuck in the Middle With You Lyrics",

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Traditional Mongolia transformed by mining riches

April 22 (BBC) Beneath Mongolia's Gobi desert lie enormous reserves of gold, silver and copper, and a deal between the Mongolian government and mining giant Rio Tinto could transform the country from one of the poorest, to one of the richest per capita in the world.

Justin Rowlatt reports for Newsnight on how the country's burgeoning new wealth is reshaping this very traditional nation.

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Mongolia: a capital of contradictions you don't want to miss

April 22 (The Globe and Mail) 'Oh, because you're a writer," said the middle-aged Italian woman, with a look of relief.

Just moments earlier, as we stood waiting at a dusty bus station, she had adopted a look of utter bewilderment and almost offence as I replied to the often-asked question of how long I had been in Ulan Bator: three weeks.

This is not a common answer. Most people visiting Mongolia treat the capital city as nothing more than a stepping off point to the vast plains; a place to get into, book your tours and get out of as quickly as possible before there is time to be pick-pocketed, accosted by drunks or intimidated by the poverty and disrepair of Soviet-era buildings.

Yet Ulan Bator is undergoing rapid change – and it deserves more than a fleeting glance.

The central Sukhbaatar Square is surrounded by startlingly modern architecture, including a towering Gucci and Burberry-filled shopping mall and a massive parliamentary building in front of which sits a statue of Genghis Khan, the father of the country. To the south stands the tallest building in the city – the sail-like Blue Sky Hotel and Tower, which opened in 2011 and offers boutique accommodation. On the street around me one morning strolled both Mongolians in traditional robes and young office workers in smart suits.

In many ways Ulan Bator has always been a city of contradictions – the permanent capital of a country of once nomadic herders. In the 17th and 18th centuries, it literally moved according to people's needs and along with the seasons, and was known as the City of Felt in reference to the fabric of the yurt tents that made up the vast majority of its buildings. In modern history, the city was under Communist rule for seven decades (ending in 1991). Functional yet aesthetically unappealing architecture took over, detracting from the stark, poetic beauty of the surrounding steppes.

Today, the busy streets are filled with the chaos of modern life and urban development, funded by the influx of cash that has accompanied the discovery of natural resources including copper, gold and coal. Luxury retailers such as Louis Vuitton and Emporio Armani offer diversions for the lucky ones who have benefited; the wealthy can also spend on their money on penthouse digs that sell for more than $8,000 a square metre.

"Ulan Bator has changed so much in the last few years, it is a lot more accessible to visitors but things have gotten more expensive and the new buildings are really sprawling out," Batsuren Byambasuren, a young, foreign-educated Mongolian who had showed me around the city on my first visit back in 2010, told me recently. "The central area is much more organized and clean now."

In the evenings, downtown Ulan Bator comes alive with young families, couples and men out drinking. Around the bars and restaurants on central Peace Avenue drunken fights occasionally break out, but on the whole the atmosphere is relaxed and family-friendly.

Sukhbaatar Square itself fills with life, as young children run around in the open space and concerts attract thousands of young city dwellers, who come to listen to the local rap and pop acts. Many of the rappers focus their lyrics on the struggles of their country – the corruption, unemployment and alcoholism – yet their words are often tinged with a clear sense of Mongolian pride.

Soon after I arrived, I headed up to the ancient Gandan Khiid Monastery hoping to get a sense of the nation's rich history. Gandan was one of the few Buddhist monasteries to survive the Stalinist purges of the 1930s, which destroyed most of the religious institutions here. Before that Mongolia was heavily Buddhist, with monks making up a considerable proportion of the population.

The walk, about 20 minutes from downtown (you can also take a bus), takes you through one of the yurt quarters that sprawl out from the city centre. As recent immigrants from the countryside continue to arrive they pitch their tents in what have become vast and ill-planned districts of semi-permanent dwellings; by some estimates 700,000 of the city's 1.2 million inhabitants live in these settlements. I passed by a group of traditional shamans who offered to read my palms – for a price – but decided to keep my future a mystery.

The most eye-catching site at the monastery is a 26-metre-high copper Buddha, whose hollow interior is said to contain 27 tons of medicinal herbs, two million bundles of mantras and an entire yurt with furniture. Around me prayed young monks clad in red, just some of the hundreds of who regularly worship here as the country struggles to return to its Buddhist roots.

In the south of the city, a war memorial perched on a small hilltop tells of a different period of Ulan Bator's history. The communist-era Zaisan memorial features a large mural with scenes celebrating the Russian victory over Germany in the Second World War, and the strong relationship between the former Soviet Union and Mongolia (although how accurate this sentiment actually was at the time of construction is open to debate).

It also, after a climb of 300 steps, delivers imposing views of the entire city and the Tuul River. Out in the hills, essentially in the middle of nowhere, a 40-metre statue of Genghis Khan astride a horse keeps watch over the land.

It doesn't take that kind of perspective – or a three-week visit – to realize that Ulan Bator is never going to be on the top of most travellers' bucket lists. But those who can appreciate the grit and urban adventure on offer will find few other places like it.

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U.S. Embassy: 2012 Human Rights Report on Mongolia

Executive Summary

Mongolia is a multiparty parliamentary democracy. In the June parliamentary elections, which observers considered largely free and fair, the Democratic Party won a plurality. This was the first election which employed electronic balloting machines. Prime Minister and Democratic Party leader Norov Altankhuyag formed a coalition government with the Justice Coalition (composed of the Mongolian People's Revolutionary Party (MPRP) and the Mongolian National Democratic Party), and the Civil Will-Green Party. The Justice Coalition's MPRP is led by former President Nambaryn Enkhbayar, who was sentenced on appeal in December to serve two-and-a-half years in prison on corruption charges. Security forces continued to report to civilian authorities.

The three most significant human rights problems were police abuse of detainees, uneven enforcement of the law and corruption within the judicial system, and a lack of transparency in government affairs. While the law provides for protection of basic human rights, there was a disconnect between laws, regulations, and actual practice.

Other human rights problems included poor conditions in detention centers, arbitrary arrests, government interference with the media, religious discrimination (including continued refusal by some provincial governments to register Christian churches), unlawful denial of exit visas and immigration holds of foreign citizens, opaque and complicated procedures for stateless persons to gain citizenship, lack of transparency in government affairs, inadequate measures to counter domestic violence against women, trafficking in persons, discrimination against persons with disabilities, discrimination against ethnic minorities, and violence and discrimination against lesbian, gay, bisexual, and transgender (LGBT) persons.

The government took few steps to punish officials who committed abuses.

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Potential extinction of the Gobi Bear discussed at Government House

April 23 ( A discussion on the "Plight of Protecting Mazaalai" was held in the Government House with the Standing Committee on Environment, Foods and Agriculture and the Sub-Assembly of Biology at the Mongolian Academy of Sciences on Tuesday. 

Opening the discussion the Chairman of the Standing Committee on Environment, Foods and Agriculture, G.Bayarsaikhan, said that "the Mazaalai, or Gobi Bear, that was listed as one of 17 severely endangered rare species in Mongolia in 2012, is near to extinction in the wild." 

Since 1967, the beginning of the research on the Mazaalai, the remaining number of this animal are thought to be only between 20 to 35

Even though there has been no drastic change to the number of Mazaalai in the past 50 years, its habitat has been decreased by ten times since 1940 and by five times since 1960. 

Degradation of the ecosystem as a consequence of climate changes, human activities due to the mining boom and illegal mining operations can be a hazard to habitat and the number of Mazaalai. 

A recent study shows that at least 22-31 Mazaalai were accounted for in a 45,000km² area of the Gobi National Reserve based on oasis research in the desert. 

According to a genetic study conducted in 2008-2011, there were only 8 females and 14 males. 

The reason behind the small number of Mazaalai is explained by the shortage of food and water sources. It is estimated only 22 Mazaalai are left in Gobi according to a genetic study. Officials of the Ministry of Environment and Green Development said the Ministry has taken certain measures to protect and increase the head count during the discussion. 

The first major steps are to install generators to support weather conditions in order to increase rainfall, to make wells to improve oasis conditions and plant desert soil efficient plants for them. 

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Mongolian mountaineer hoists flag at North Pole

April 22 ( Mongolian mountaineer Gotovdorj Usukhbayar who left for an Arctic voyage on April 6th has reached the North Pole at 90 degrees N latitude. He travelled over the Arctic Ocean and raised the Mongolian State flag at around 20.30pm Mongolian local time on Saturday April 20th. 

State Honored athlete, Gotovdorj Usukhbayar who climbed to the peak of Everest once now has sealed his footsteps on the North Pole. 

Mongolian mountaineer Gotovdorj Usukhbayar let the news know through President Tsakhia Elebgdorj who initiated the Arctic voyage via iridium satellite phone as soon as Usukhbayar reached the Arctic.

Mountaineer Gotovdorj Usukhbayar said "We have reached our destination at the North pole at 90 degrees N latitude at 20.30 pm Mongolian local time. We reported the news to President Tsakhia Elbegdorj who initiated the Arctic voyage. Now we want the President to congratulate every Mongolian about the good news that Mongolians have sealed their footsteps on the North pole for the first time. We are very happy about this." 

In return president Tsakhia Elbegdorj replied "Congratulations to you for reaching your goal, living up to the Mongolian people`s belief, and your country`s name and hoisting the Mongolian State flag on the North Pole. We hope every Mongolian's spirit will be inspired with this good news of this historical voyage. I am very happy that the Mongolian people now can be proud of Mongolians reaching the North Pole at 90 degrees N latitude for the first time." 

The President also wanted them keep their voyage successfully and see them back in home country when they return. 

The team of mountaineers will stay for two days on the North Pole. Then they will take a plane to Norway and come back to Mongolia next week. 

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From Mojave to Gobi: Sharing What Works in California to Help Guide Mongolia's Future

April 23 (Huffington Post) "This landscape looks very much like our Gobi Desert. I feel like I could be at home." These words were repeated numerous times by a group of visitors from Mongolia during a recent four-day field trip to the Mojave Desert in California, which was followed by a one-day trip to meet with federal and state decision makers in Sacramento.

The Nature Conservancy's goal: to share with Mongolia's senior government officials the conservation methods that we're using to protect the biodiversity of the Mojave Desert while helping to inform the siting of renewable energy development, with the hope that our strategies will be of use in the Gobi Desert in Mongolia.

At 500,000 square miles, the Gobi is the fifth largest desert in the world, and nearly all of it is undeveloped. From a conservation perspective, the Gobi is not unlike the Mojave, as it is a vast, fragile and wild landscape that provides the only habitat for a few extremely rare and endangered species. In the Gobi, these include the Gobi bear and wild Bactrian camel. One can find a variety of more common and wide-ranging animals there as well, such as the gray wolf, argali wild sheep, ibex and golden eagle. The Gobi has been the home of nomadic herding people for many millennia and is the site of the discovery of the first-known fossil dinosaur eggs. So there are many good reasons to protect it for future generations.

The government of Mongolia currently faces some tough decisions, as there is unprecedented interest in developing the Gobi Desert to harvest the renewable resources of both sun and wind and to mine recently discovered copper deposits, which are some of the richest in the world. These projects will not only fragment habitat and produce pollutants, but they will also use water, which is a scarce resource in any desert.

Because the majority of the Gobi is in public ownership, the Mongolian government will decide its fate. The income to be reaped from development and mining is not trivial, but there is a strong desire on the part of the government (including the aptly named Ministry of Environment and Green Development) to plan for future development projects in ways that will not harm the ecological value of the wild landscape. They want a win-win. That's where The Nature Conservancy comes in.

Renewable Energy Done Right

California has an energy mandate to have 33 percent of the state's electrical power come from renewable sources by 2020. For the past five years, The Nature Conservancy has spearheaded a unique approach to conservation of the Mojave Desert in the face of unparalleled pressure from all sectors to develop renewable energy facilities as quickly as possible.

Through systematic, science-based, landscape-scale assessments in concert with thoughtful collaboration with decision makers, the Conservancy is providing an alternative to unplanned renewable energy development in the Mojave Desert and is helping pioneer these innovative approaches in the U.S. and beyond. Specifically, the Conservancy is tackling siting issues to guide future development of already degraded lands, working to reduce the impacts of solar panels, wind turbines and their associated infrastructure, and addressing groundwater depletion from solar facilities. With smart planning, California can develop the renewable energy it needs while simultaneously protecting iconic desert landscapes and ecology.

The Nature Conservancy spent five days sharing this smart planning approach with Mongolia's government officials in hopes that they will adopt similar strategies to guide future decisions about the Gobi Desert, so that it can continue to provide the intact landscapes and water resources upon which plants, animals and people rely.

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Mogi Munkhdul Badral Bontoi

Cover Mongolia


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