Thursday, May 16, 2013

[OT expects $4B financing by June, GoM sells ₮30B 1 year bonds, and Elbegdorj awards Polar Star to Texas lawyer who stopped Bataar auction]

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CoverMongolia NewsWire
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Mongolian president bestows highest award on Texas attorney for return of Tyrannosaurus
May 14 (Cypress Creek Mirror) After helping return a rare Tyrannosaurus skeleton to Mongolia, Champions-area attorney Robert Painter of The Painter Law Firm has been honored with the Order of the Polar Star, the highest award a foreigner can receive in Mongolia.
President Elbegdorj bestowed the award May 6 in recognition of Painter's efforts to return the Tyrannosaurus bataar fossil, which had been illegally smuggled out of the country. Other recipients of the award include U.S. President Barack Obama and Russian President Vladimir Putin.
A year ago, Painter became involved in the case when the Mongolian president, a friend of Painter's, hired him to stop the 70-million-year-old skeleton from being sold through Dallas-based company Heritage Auctions in New York. With only two days until the auction, Painter secured a temporary restraining order from a Texas court and flew to New York City to make sure the sale did not proceed.
While the bones were sold for $1 million, federal Immigration and Customs Enforcement agents seized the bones before the buyer took possession, where they remained in government custody.
Last week, the U.S. government signed over the bones to Mongolian authorities in what was the last step in the litigation process and returned them home. While Painter's goal was always to return the fossils, the result of this case was more far-reaching.
Eric Prokopi, a Florida fossils dealer, who pleaded guilty in the case Dec. 27, turned out to be a key player in what is considered to be the largest dinosaur smuggling ring in history, said Painter.
The arrest has led to the recovery of an additional $6-8 million worth of fossils throughout New York, Los Angeles and Florida.
Following its return, the Tyrannosaurus bataar will be displayed in the new Central Dinosaur Museum in Ulaanbaatar.

Overseas Market
Turquoise Hill Resources Announces Financial Results and Review of Operations for the First Quarter of 2013
VANCOUVER, BRITISH COLUMBIA--(Marketwired - May 13, 2013) - Turquoise Hill Resources (TSX:TRQ)(NYSE:TRQ)(NASDAQ:TRQ) today announced its financial results for the quarter ended March 31, 2013. All figures are in US dollars unless otherwise stated.
<![if !supportLists]>·         <![endif]>Construction of the Oyu Tolgoi open-pit mine and concentrator complex was complete at the end of Q1'13 and mine infrastructure was substantially complete.
<![if !supportLists]>·         <![endif]>As commissioning at Oyu Tolgoi progressed during Q1'13, concentrator production rates have progressively increased and have recently achieved daily run rates of up to 60% of capacity.
<![if !supportLists]>·         <![endif]>By the end of June 2013, it is anticipated that the concentrator will be consistently running at production rates of 70% of nameplate capacity and shipments of concentrate will have begun.
<![if !supportLists]>·         <![endif]>During Q1'13, underground lateral development at Hugo North advanced an additional 1,319 metres and construction of Shaft #2 reached 82% of its final depth. Sinking activity for Shaft #5 commenced in April 2013.
<![if !supportLists]>·         <![endif]>Turquoise Hill and Rio Tinto continue to have productive discussions with the Government of Mongolia and all parties have agreed to ongoing talks with a goal of resolving matters in the near term.
<![if !supportLists]>·         <![endif]>Oyu Tolgoi project financing timetable is well advanced with the signing of final documents expected by the end of Q2'13.
<![if !supportLists]>·         <![endif]>As at April 30, 2013, Oyu Tolgoi had approximately 11,750 employees - 89% Mongolian nationals - and is on track to meet its 90% Mongolian workforce commitment.
<![if !supportLists]>·         <![endif]>SouthGobi resumed operations on March 22, 2013 and expects to produce 3.2 million tonnes of semi-soft coking coal in 2013.
<![if !supportLists]>·         <![endif]>During Q1'13, Ivanhoe Australia's Osborne copper-gold complex milled approximately 255,000 tonnes of ore and produced approximately 14,700 dry metric tonnes of concentrate.
<![if !supportLists]>·         <![endif]>Turquoise Hill's consolidated cash position was $580.6 million at March 31, 2013 and approximately $361.4 million at May 13, 2013.
Commenting on first quarter results, Kay Priestly, Turquoise Hill Chief Executive Officer, said, "Full-scale operations at Oyu Tolgoi are on the near-term horizon. Commissioning at Oyu Tolgoi continues to progress with the concentrator recently achieving daily run rates of up to 60% of capacity. By the end of June 2013, we expect production rates at the concentrator to be consistently running at 70% of capacity and to have started shipping concentrate. Additionally, the project financing timetable is well advanced and we anticipate the signing of final documents by the end of the second quarter 2013."

Turquoise Hill to ink $4bn financing for Mongolian flagship
TORONTO, May 14 ( – Canadian miner Turquoise Hill and its majority owner Rio Tinto expect to sign a $4-billion project-financing plan and term sheet at the end of June, which will allow for the necessary future financial flexibility to develop the second phase of the giant Oyu Tolgoi mine, in Mongolia.
Turquoise Hill late on Monday said it was actively engaged with lenders to finalise the financing deal. By February, it had secured debt approval from the European Bank of Reconstruction and Development and the World Bank Group's International Finance Corporation.
During April, Rio had also signed commitment letters with 15 global banks that locked in pricing and terms for financing. The boards of Export Development Canada, Australia's Export Finance and Insurance Corporation, and Export-Import Bank of the United States also conditionally approved Oyu Tolgoi project financing.
Turquoise Hill noted project financing was still subject to board approval, which included representatives from the Mongolian government.
Meanwhile, the Mongolian government, Turquoise Hill and Rio remained in disagreement over taxes and rising costs at the project, which Mongolia feared would erode prospective earnings.
Turquoise Hill on Tuesday said the parties continued with "productive discussions" on a range of issues related to implementing the investment accord governing the public–private partnership, including project development and costs, the operating budget, project financing, management fees and governance.
While the issues between stakeholders were being ironed out, the Oyu Tolgoi board had approved a temporary budget for the mine, which is ramping up to commercial production.
Oyu Tolgoi was expected to make up a third of Mongolia's economy by 2020, and at full production would produce about 450 000 t of copper and 330 000 oz of gold a year. Rio was the largest single investor in Mongolia – a country where livestock outnumbered people 15 to 1.
Rio last week said it expected the imminent approval by Mongolia to ship copper concentrate from the mine.
At the end of the first quarter, construction of the Oyu Tolgoi concentrator complex and openpit mine was complete, and mine infrastructure was substantially complete.
As at March 31, the total capital invested in Oyu Tolgoi was about $6-billion of the final cost of $6.2-billion, excluding foreign-exchange exposures.
Long-term sales contracts had been signed for about 75% of the Oyu Tolgoi mine's concentrate production in the first three years, and half of the total concentrate production was contracted for ten years, subject to renewals.
Meanwhile, Turquoise Hill said its subsidiary SouthGobi Resources, which also has its operations in Mongolia, and some of its employees, were subject to rolling investigations by the Mongolian Independent Authority Against Corruption and the State Investigation Office regarding allegations of corruption and flouting of the country's taxation laws.
SouthGobi said its audit committee, comprised of independent directors, was conducting an internal investigation into possible breaches of law, internal corporate policies and codes of conduct arising from the allegations.
SouthGobi, through its board and new management, has taken a number of steps to focus on ongoing compliance by employees with all applicable laws, internal corporate policies and codes of conduct, as well as with SouthGobi's disclosure controls and procedures and its internal controls over financial reporting.
Operations at the coal producer's flagship Ovoot Tolgoi mine restarted in the quarter, after it had been fully curtailed since the end of the second quarter of 2012.
Turquoise Hill reported a net loss of $50.7-million, or $0.05 a share, which was a decrease of $29.9-million when compared with a net loss of $80.6-million, or $0.10 a share a year earlier.
SouthGobi reported a net loss of $24.9-million, or $0.14 a share, in the period, compared with profit of $3.1-million, or $0.02 a share, a year earlier.
Turquoise Hill's Toronto-listed shares traded 1.30% lower on Tuesday morning at C$7.58 apiece.

Rio Tinto appoints Mongolian to soothe nationalist feelings
By Terrence Edwards in Ulaanbaatar
May 14 (bne) When the Mongol conqueror Genghis Khan was expanding his empire in the 13th century, he made it a habit to take wives from the conquered people to help fortify their new bonds. Rio Tinto might have taken a page from Genghis' strategy book with the high-level appointment of a prominent Mongolian businessman as it looks to engineer a smooth launch of commercial exports from the $6.2bn Oyu Tolgoi copper-gold mine. 
Rio Tinto's bride-to-be is Bold Baatar, a native Mongolian who has served as an advisor to the Anglo-Australian diversified miner for the past three years. He will act as president of international operations of Rio Tinto's copper group from London, effective June 3. This addresses a key complaint of the Mongolian government that it is not well represented in the management of the project. 
The Mongolian government has been at loggerheads with Rio Tinto, which is leading operations at Oyu Tolgoi with a 66% stake in the project through its subsidiary Turquoise Hill Resources, claiming that the mining company has put the strategic project off budget by some $2bn and is behind on paying its taxes. 
The coveted Oyu Tolgoi copper-gold project is central to the country's explosive economic growth, forecast at 13% for this year by the World Bank, as well as being the focus of a growing resource nationalism movement among the Mongolian people and politicians. Members of parliament have twice attempted to amend the 2009 investment agreement for Oyu Tolgoi to increase the state's stake in the project from 34% to 51%. Such moves are popular; according to an April survey from the pollster Sant Maral Foundation, 24.7% of Mongolians polled nationwide said they would prefer that all mining projects have 100% Mongolian ownership, while 59.6% said more than 51% ownership was necessary. 
Yet there are signs that Mongolia and Rio Tinto may be finding common ground. In April, an order came down from the Office of the Prime Minister to expedite any remaining permissions needed to ensure that the project remains on target for a June launch of exports to China. "This is a significant about-face, as we had been told by several contacts on the ground not to expect a resolution until after [the presidential] election, [scheduled for June 26]," said Nick Cousyn, chief operating officer at local investment firm BDSec, in a note to investors about the order. "Minister of Mining Gankhuyag was specifically instructed to 'speed-up the land, foreign labor force, customs documentation permits and take actions on solving water, environmental, power plant, third-party laboratory, and infrastructure issues'." 
The appointment of Bold Baatar, who will report directly to Rio Tinto's chief executive of copper, Jean-Sebastian Jacques, will go some way to satisfying one of the government's main complaints at a stakeholders' meeting held in February, which was for more local representation in management, as well as provide a fillip to the national pride of this callow, emergent country. "It is a momentous event demonstrating global recognition of the value of Mongolian intelligence and skill," local magazine Mongolian Economy, which is published in both Mongolian and English languages, declared in response to the appointment. "Baatar Bold has opened the door to make this dream of Mongolia come true." 
Bold is well known in Mongolia as an active figure in Mongolia's private sector, participating on the board of the Business Council of Mongolia as well as being chairman of the Mongolian National Mining Association and former chairman of the Mongolian Stock Exchange. "As a respected business and civic leader, his advice often is sought by government, industry and civil society organisations as they work to balance a business-friendly investment environment with protecting Mongolia's interests," says Cameron McRae, Oyu Tolgoi's chief executive officer and president, in a statement. 
Though the appointment may appear purely a political move, Bold is a field-tested manager who has a lot of experience in the mining sector. Mongolian Economy lauded Bold for his role as chief executive in the transformation of mining firm Altan Dornod Mongol from one owing the Mongolian government millions in back taxes, to The Mongolian National Chamber of Commerce and Industry's 19th most admired company (Mogi: wouldn't say exactly "admired," but "best" in terms of taxes paid, sales, CSR, jobs created, …) in its "Top 150 Enterprises" list for 2012 He is also chairman of the Mongolian National Mining Association, which has advocated to the government for favourable policies for mining activities and a stable investment climate. 
Ichinkhorloo Ser-Od, vice director of the Business Council of Mongolia, recalls his impression of Bold's rise to prominence among Mongolia's young elites, when Bold was a banker at JPMorgan Chase & Co in the early 2000s. "When he was a regional director at JPMorgan, it impressed me a lot at the time," says Ser-Od. "To Mongolians, the names of big western investment firms were not so familiar, but obviously the [Mongolian] guys that worked at these kinds of businesses looked up to him at the time of his growth."

Budget Standing Committee accepts MP Ganbaatar's proposal to investigate Oyu Tolgoi LLC on taxes
May 14 ( State Budget Standing Committee has accepted the proposal of MP Ganbaatar S. investigating Oyu Tolgoi LLC on its tax and other related agreements and contracts obligations. A working group will be formed soon to implement the decision. Ganbaatar S. is one of the hardliners on issues surrounding Oyu Tolgoi project.
Former Finance Minister MP Bayartsogt S. and Ganbaatar S. had a debate over Oyu Tolgoi deal last year. Overall reaction was that Ganbaatar S. didn't have enough sound facts and validity for his argument. However, it was him that the most public sided with due to his nationalist view on exploiting strategic deposits.
We will update our readers on the related developments in due course.

Cougar Energy: Clarification on Termination of Hulaan Coal Corporation Agreement
May 14 -- Cougar Energy Limited (ASX: CXY) released announcements on 15 April and on 22 April 2013 in relation to the termination of its Memorandum of Understanding (MOU) with Hulaan Coal Corporation (Hulaan). Hulaan, through its solicitors, has raised concerns with Cougar Energy that the announcements suggest Cougar Energy decided to terminate the MOU because it had formed the view that Hulaan's coal resources are not able to support a viable UCG project. While Cougar Energy does not agree with Hulaan's interpretation of the announcements, it can confirm that it did not form any such view. Cougar Energy makes no comment on the viability of the Hulaan coal resources.
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Local Market
NatSec Daily MSE Update, May 14
May 14 (National Securities) Today was the 4,467th trading day on the MSE. A total of 258,255 shares in 21 companies, valued at 59,348,631 MNT were traded today. The MSE TOP20 Index closed 1.14% lower to end the day at 13,552.83.
Today's top advancers were Baganuur (BAN) a thermal coal miner up +8.23% and Aduunchuluun (ADL) up +6.93%, followed by Gobi (GOV) up +3.35%, Jenco Tour Bureau (JTB) was up +2.44% & Hermes (HRM) at +1.90%. Conversely, Eermel (EER) slumped -5.66% to MNT 2,500, Mongol Nekhmel (MNH) went down 4.38% to MNT 4,255, APU (APU) the largest MSE-listed company with a 60% market share in the beverages markets lost -4.08% to MNT 3,550, and Olloo (OLL) closed -3.61% to finish at MNT 130.
Please click here to see the detailed news

NatSec Daily MSE Update, May 15
May 15 (National Securities) The Mongolian market traded generally flat today, with many stock being weaker. The MSE Top 20 Index actually ended higher +0.69% to 13,646.01 points. Trading of shares during the session was limited to just 16 companies.
Shares of 7 companies rose, 6 declined and 3 remained un-changed. Just 27,584 shares were traded at today's bourse with total value of MNT 36.7mTelecom Mongolia (MCH) saw its stock up about 15% to MNT 1,150. Agro Tech Impex (ATI) and Gutal (GTL) were among the losers, declining 14.90% and 5.20%, respectively.
Please click here to see the detailed news
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March 14 (Bank of Mongolia) --

BoM holds FX auction
May 14 (Bank of Mongolia) On the Foreign Exchange Auction held on May 14th, 2013 the BOM received from local commercial banks bid offers of USD and CNY. BOM has sold 23.8 million USD as closing rate of 1436.80 and 52 million CNY as closing rate of 233.40. 
On May 14th, 2013, The BOM received MNT Swap agreement bid offer of 102 million USD from domestic commercial banks and BOM has accepted all the offers for swap agreement.

BoM issues 1-week bills
May 15 (Bank of Mongolia) BoM issues 1 week bills worth MNT 286.1 billion at a weighted interest rate of 11.50 percent per annum /For previous auctions click here/

Mogi: another of one GoM's attempts to help with the deficit budget. Looks like I missed a few previous auctions. See the history here.
GoM Bond Auction
May 15 (Bank of Mongolia) Regular auction for 52 weeks maturity Government Treasury bill was announced at face value of 30 billion MNT and each unit was worth 1 million MNT. Face value of 30 billion /out of 64.8 billion bid/ Government Treasury bill was sold to the banks at discounted price and with weighted average yield of 10.36%.

New Sino-Mongolian Oil Deal Undercuts Russia's Old Role
May 9 (Alicia Campi, Jamestown Foundation) Mongolian Petroleum Authority (Mogi: proper term is Petroleum Authority of Mongolia or PAM) Chairman G. Ulziiburen announced in mid-March that Mongolia had made an agreement with PetroChina—a subsidiary of China National Offshore Oil Corporation—to exchange crude oil drilled in Mongolia with end-products processed in Inner Mongolia Autonomous Region. Delivery was to reach 10,000 tons of fuel this April, lessening the present import cost for Mongolia by $100–170 per ton. Chairman Ulziiburen promised the government would continue to seek cheaper sources of fuel in hopes such policies soon would reduce prices. After expansion upgrades are made in May to the Zamyn-Uud railroad switch-loading yard on the Sino-Mongolian border, it is planned that monthly imports will increase to 20,000 tons by September (Montsame, March 19). The imported Inner Mongolian oil will be of a higher quality—equivalent to Euro-3 standard. Mongolia's current consumption of fuel imported from Russia is equivalent to the more polluting Euro-2 standard and sold under the brand name AI-92. This Inner Mongolian refined fuel is sold under the new Mongolian brand name MONGOL-93 and was released at gas stations in April.
Twenty percent of Mongolia's imports today are petroleum products. Mining Minister Davaajav Gankhuyag, a well known supporter of resource nationalism, has commented "In order to get rid of petroleum supply from one route (Russia), we are negotiating with third parties that brings some positive results" (InfoMongolia, March 21). This is not, however, a new Mongolian oil strategy. Back in 2009, Dashzeveg Amarsaikhan, then-Chairman of the Petroleum Authority, stated "We shall have more leverage once we manage to diversify our sources and reduce captive dependence on one supply source. The Government is clear about this and has been working to achieve that objective. Things will get better once we extract enough oil at home and also have a refinery here" (, October 8, 2009). Mongols have claimed for years that the Russian supply has been interrupted for political reasons, such as in May 2011, and that these products are increasingly expensive and fail to meet soaring consumer and industrial demand. Although Mongolia is sensitive to Chinese activity in the mineral sector, it is willing to let China become a significantly larger supplier of oil products, at least in the short term, to break the back of its dependency on more expensive Russian petroleum products. This temporary strategy may work in China's favor to ease the bilateral tension generated by Mongolia's increasing concern over the large volume of Chinese investment in its minerals. While certainly a more positive development from China's point of view, Mongols are clear that they see the future of their petroleum supply in creating their own refinery infrastructure.
For decades, Mongolia was over 90 percent dependent on Russian imported petroleum products, mainly acquired from Rosneft Company.  In 2012, it imported a total of 1.2 million tons of oil, of which petroleum products comprised 1.1 million tons—64 percent of which was imported from Rosneft. As of the first three months of 2013, imports from Rosneft have been decreased by another 30 percent, so, in the first quarter of 2013, Mongolia has imported 50 percent of its monthly supply from Switzerland's Gunvor Group (the fourth largest crude oil trader in the world which obtains much of its crude oil from the Russian Federation), South Korea's SK Energy and Hyundai Oilbank, in addition to the China, at prices that average $100-200 per ton cheaper than Rosneft. So far, however, these lower prices have not been reflected at the gas pump. In fact, Speaker of the Mongolian Parliament Zandaakhuu Enkhbold, back from a March U.S. trip, complained that Mongolian consumers pay more for gasoline than Americans (, March 18).
Mongolian Oil Sites Move from the Soviets to the Americans to the Chinese
Historically, petroleum production and drilling with a small refining operation were initiated by the Soviet Union in the 1960s, although the first find was in 1947. Petroleum operations ceased in 1969 because of well pressure decline, the refinery destruction by fire, and the discovery of giant oil fields in western Siberia. With the collapse of communism, the Petroleum Authority in 1991 began granting foreign exploratory licenses in order to obtain technical and financial assistance from Western companies and purposefully barred China from such licenses in its oil sector. The trend over the years, however, has been for the private western companies to sell out to Chinese state-owned enterprises (SOEs) with the Mongols powerless to stop it. Exploration studies first were carried out by British Petroleum and Philips Petroleum between 1990 and 1993.  Through Mongol Gazryn Tos (MGT), the state-owned petroleum company, the Mongolian government signed a Production Sharing Contract (PSC) in 1993 with SOCO International of Fort Worth, Texas and its first exploration well was drilled in Dornod province near the Chinese Manchurian border in 1994. Later, PSC agreements were concluded with two other Texas-based U.S. oil companies—Nescor Energy Company of Austin and Medallion Petroleum of Houston to work with existing production capacity in the southeast Gobi desert and the Tamsag Basin in the northeast [1]. SOCO partnered with Huabei Oilfield Services of China, which provided drilling services, and trucked its crude to China before finally selling out completely in 2005 to SOE PetroChina Daqing Tamsag (PCDT)—much to Mongolia's shock.
Nescor Energy, between 1994 and 1997, conducted exploration and appraisal operations in the southeast Gobi with a U.S. Trade Development Agency grant, and, in February 1997, the Mongolian government gave up to Nescor its 50 percent stake in these fields, which covered 13 million acres, (New Straits Times, February 27, 1997). The next year a Joint Venture of Gulf Canada and ROC Oil (Sidney, Australia) acquired all Mongolian rights and assets of Nescor Energy. Crude then was exported by truck, pipeline and train into China.  In January 1999, Gulf Canada withdrew from the JV due to the oil price downturn. Later in June 2001, ROC Oil sold out its interests to Dongsheng, a subsidiary of SINOPEC.  This action and the PCDT buyout enabled China to take control of Mongolia's oil sector, a result that has made Mongolian policymakers uncomfortable ever since. With so much Chinese investment in the oil sector and with China being the major customer for Mongolia's exported crude, the Mongolian public also has raised concerns about the ramifications of massive Chinese investment. Publicly, Mongolian officials have claimed that they "do not choose an investor on the basis of its country, but look for the most competitive offer and one that offers the maximum benefit and profit to Mongolia. These are our criteria, nothing else. We work for our national interests and considerations like a company's base country are immaterial. Geopolitical factors do not affect our decisions" (, October 8, 2009). The government of Mongolian President Tsakhia Elbegdorj (Mogi: Mongolian president doesn't run the government), however, has implemented plans to diversify petroleum sources in the near-term while developing domestic production through new oil refineries. For example, in accordance with the Government's Action Plan for 2012–2016, construction will start on a Mongolian-Japanese joint venture "Darkhan-Petroleum" refinery with annual capacity of at least 2 million tons in Darkhan-Uul province, about 150 miles north of Ulaanbaatar. The Feasibility Study has been finished, so work will commence this year with a completion date by the end of 2015.
The Petroleum Authority of Mongolia (Mogi: now she gets it right) has estimated that there are four to six billion barrels of recoverable oil in Mongolia: "Despite the scarcity of exploration data on Mongolia's petroleum potential, caused by interruption of exploration activities for the last 25 years, positive geological and geophysical data, reported oil seeps throughout the sedimentary basins and recent discoveries of oil and the geologic similarity…of hydrocarbon basins of Mongolia to adjacent Chinese producing basins indicate the high probability to find substantial petroleum reserves in Mongolia" (, 2013). Now, there are 30 petroleum fields, 21 of which were established through product share agreements. Of these 21, only 3 sites actually are productive, while the rest are in the exploratory stage under the direction of 14 different companies of which only 4 are Western. These companies include Swiss company Manas Petroleum through its subsidiary Gobi Energy Partners LLC (Mogi: in partnershiop with Shunkhlai Group) in the east Gobi Basin, Australian Central Asia Petroleum LLC (Mogi: she must be speaking of Petro Matad), Canadian Shaman LLC and Canadian Sunwing Energy (Mogi: must be speaking of Ivanhoe Energy) (Mongolian Mining Journal, September 20, 2012).
Mongolia's  only three oil producing fields are managed by Chinese majors PetroChina and Sinopec. These are Zuunbayan, Tamsag-19, and Tamsag-21, which in 2012 produced a total of 482,000 tons of crude oil (3.6 million barrels), an 11 times increase in production over the last five years ( (Mogi: haha, funny how she mentions above companies, uses this link and fails to mention Wolf Petroleum). Chairman Ulziiburen also announced that in 2013 the Mongolian government intends to increase volume from these three sites up to 660,000 tons or about 5 million barrels for export to China. Zuunbayan is in the south of the country not far from Mongolia's giant coal-uranium deposit of Tavan Tolgoi (Mogi: huh? Uranium?) and its Rio Tinto-controlled large copper-gold deposit of Oyu Tolgoi. The other two sites are in the northeast near the Chinese Manchurian border. Recently the Mongolian Ministry of Mineral Resources (Mogi: Ministry of Mining I'm sure. She's good at research but not good at staying up-to-date) and Energy determined that the reserve at the Toson Uul deposits at Tamsag Basin amount to 119.02 million tons and estimated economically recoverable reserves will amount to 13.67 million tons (Montsame, March 19, 2013). Among the important Chinese companies now actively exploring in Mongolia is Mongolia Energy Corporation Limited (MEC) (menggu nengyuan youxian gongsi), a mining and energy development holding company operating in Mongolia and Xinjiang in northwestern China. MEC's exploratory concessions are in western and southern Mongolia in cooperation with CNPC Daqing Petroleum.  Yet another Chinese company, Gold BC LL, has been working in Mongolia for three years. (Mogi: must be someone I know I'm sure. Let me know which one)
This new agreement to exchange crude oil for processed end-products does not mean that Sino-Mongolian relations are dramatically deepening. This new purchase plan, however, does indicate that the two nations can find new ways to cooperate despite the potential for  serious problems in the existing Sino-Mongolian petroleum relationship. Mongolia has been a minor exporter of crude oil to China since the late 1990s. When Petro China acquired received the right to conduct mining operations for the next 20 to 30 years from the SOCO sale, it claimed that 40 million of the 177 million barrels of crude oil reserves in its sites were economically recoverable reserves. PCDT projected it would excavate 93.3 million barrels of crude oil between 2010 and 2019. The original deal included the promise by the Chinese side to build roads between the Tamsag fields and the Bichigt border crossing point by 2011, but, despite increasing exports, no road has been built. In 2012, 500 of its 521 drilled wells were operating and produced 410,000 tons of oil. This is carried in 80 to 100 trucks per day along 31 eroded dirt tracks. PCDT—the largest of four oil exploration companies in the province—has announced that it plans to produce 650,000 tons more this year, because it will constructed new transmission pipelines. The company also is extracting oil in a neighboring province, but transports that crude via a pipeline to the Chinese cross-border refinery instead of by tanker trucks. In a move reminiscent of Mongolian threats to use non-compliance/performance in certain clauses by Rio Tinto in its Oyu Tolgoi contract as the reason to reopen negotiations over the entire contract, this March Speaker of Parliament Enkhbold visited the oil fields of Dornod province and threatened that "If the company [Petro China] fails to build road transportation, their permit is not allowed [to continue]" (, April 8, 2013). This would indicate Mongolian authorities are seeking to reopen the existing contract with PetroChina to seek more favorable terms.

Mogi: disappointing analysis of Mongolia's energy needs. Didn't even mention CHP5, TT PP, CHP4 expansion as upcoming supplies. Only knew of Salkhit. Also, BTV should realize Mongolia's 2011 GDP growth was revised up to 17.5% from 17.3%. Still sticking with the 17.3% for I would imagine a year now.
How Energy Demand Is Impacting Mongolia's Growth
May 14 (Bloomberg TV) -- Bloomberg's Nathaniel Bullard discusses Mongolia's energy demand and economic growth. He speaks with Rishaad Salamat on Bloomberg Television's "On The Move Asia." 
Middle Banner 3 (600 pixels wide)
May 15 (InfoMongolia) According to the upcoming Presidential Election to be organized nationwide on June 26, 2013, the General Election Commission of Mongolia (GEC) made a statement on May 13, 2013.
The statement says, "In the frames of implementing the Law on Presidential Election, the General Election Commission of Mongolia is providing the preparation works to finish on time. The electoral districts in Aimags (21), Sums (334) and Districts (9) of Ulaanbaatar city have been established prior 45 days of the Election Day or May 12, 2013.
Mongolians residing abroad will give their votes at the 39 Diplomatic Offices of Mongolia overseas between June 14 and June 16, 2013, where about 170 personnel are working.
The political parties (5), having seats in the Parliament, have announced their candidates and the GEC received three names including Ts.Elbegdorj from Democratic Party (DP), B.Bat-Erdene from Mongolian People's Party (MPP) and N.Udval from Mongolian People's Revolutionary Party (MPRP). Due to regulations, these candidates passed a medical examination and the Medical Commission issued its conclusion that the three candidates are "Healthy" means an illness, injury, impairment, or physical or mental condition.
Within May 17, 2013, the GEC will collect the candidates' documents and after receiving to decide whether to qualify by May 20th in accordance with regulations, standards and guidelines. The candidates will receive their nomination cards prior 35 days of the Election Day or May 22, 2013.
Consequently, the campaign of the Presidential Election of Mongolia will start officially from May 22 to 00:00 am of June 24, 2013". (Mogi: probably meant to say 00:00 of June 25)

Hogan Lovells: Mongolian Strategic Foreign Investment Law – Update, May 14
Michael Aldrich, Solongoo Bayarsaikhan, Chris Melville, Anthony Woolley 
May 14 (Hogan Lovells) We wish to update our clients on the implementing regulations on the Law of Mongolia on the Regulation of Foreign Investment in Business Entities Operating in Sectors of Strategic Importance enacted 17 May 2012 ("the SFI Law"). As previously advised, on 2 March 2013, the Government of Mongolia adopted a resolution (resolution #75/2013) in respect of regulations regarding receiving and determining applications for approval submitted by business entities operating in sectors of strategic importance (the "SFI Regulations"). The SFI Regulations were formally published on the website of Foreign Investment Regulation and Registration Department of the Ministry of Economic Development ("FIRRD", formerly known as "FIFTA")1. The SFI Regulations are intended to augment the provisions of the SFI Law. 
Hogan Lovells previously circulated a newsflash based on the presumed final version of the SFI Regulations. The official and conformed version of the SFI Regulations published on FIRRD's website differs from final version in some respects. We have prepared a translation of the published version of the SFI Regulations which we include with this update. 
The SFI Regulations 
The SFI Regulations are on the whole similar to the drafts previously circulated. The main focus of the SFI Regulations is to describe the documents required and the approval procedure under the SFI Law. 
Business activities within Strategic Sectors 
Under the SFI Law, three sectors are identified as having strategic importance and the Law's scope extends to foreign investment in business entities operating in such sectors ("BESIs"). However, it was unclear under the SFI Law which business activities would be included in each strategic sector
The SFI Regulations aim to clarify this situation by providing that the scope of business activities falling within a relevant strategic sector will be determined by Article 8.2 of the Value Added Tax Law. This provision in turn refers to the Classification of All Types of Economic Activities ("Classification") as adopted by order #103 of the Minister of Finance dated 29 April 2011. The Classification follows the International Standard Industrial Classification of All Economic Activities (ISIC) (revision 4) adopted by the United Nations
While helpful in some respects, the Classification does not fully clarify the current uncertainty. For example, under the Classification there is no "minerals sector," rather it refers to mining, extraction and refining. It is therefore not clear where certain industries would fall. For example, it remains uncertain to what extent ancillary services to the mining sector would be considered by FIRRD to fall within the relevant classifications and therefore be considered strategic. 
Accordingly, if investors are unsure as to whether a Mongolian company operates in a strategic sector, we advise that clarification or confirmation is sought from FIRRD on a case-by-case basis
Approval Authorities and Application Documents 
The SFI Regulations state that the Ministry of Economic Development ("MED") is in charge of receiving, reviewing, making recommendations on and/or decisions for applications submitted for approval under the SFI Law. 
Article 2.1 of the SFI Regulations sets out the documents to be submitted in support of an application for approval. These include forms for completion of information on the parties, specifically on foreign investors and the transaction, copies of a BESI's registration documents, certificates of registration and reference letters for the foreign investors, draft transaction documents and financial statements of the relevant parties. The forms attached to the SFI Regulations that need to be submitted in support of an application require that a foreign investor disclose details of its ultimate beneficial shareholders by way of requiring that shareholders of "affiliated parties" and "third parties" of a foreign investor be named. Given that the SFI Law provides a broad and open-ended definition of "affiliated parties" and "third parties", it may be difficult to give specifics of some shareholders whose details are not readily available to some investors, such as listed companies. 
It remains the case that the Mongolian BESI itself rather than the proposed acquirer must submit the application for approval, which is not standard in international cross-border transactions. It further raises a procedural dilemma if the acquirer is looking to incorporate a greenfield BESI. 
The SFI Regulations require a tentatively-agreed form of the underlying acquisition agreements to be submitted for approval. This requirement is unusual. It would more comport with international practice if the parties were to submit fully executed acquisition agreements which provided for the requisite SFI Law approval to be a condition precedent for closing of the transaction. There is the risk that the documents submitted for approval may differ from those actually signed. Further, there are confidentiality concerns as well as the prospect of the MED examining and commenting on commercial terms beyond its purview. 
Application and Review Procedure 
Upon receipt, the MED registers submission of the application and considers whether any of the circumstances set out in Article 7.3 of the SFI Law apply, such as whether the transaction is contrary to the National Security Policy. The MED may request further documents if it considers this to be necessary. Further, the MED may obtain comments and conclusions/recommendations from other state authorities for the application, such as the Ministry of Mining for minerals, the Bank of Mongolia for banking or the Information, Technology, Post and Communications Authority for telecommunications sector. In each case, the relevant state authority must respond to the MED within 14 days. 
The SFI Regulations state that the MED must formulate and deliver its opinion as whether or not to approve the transaction within 30 days of receipt. The Cabinet, in turn, must deliberate the opinion within 7 days of receipt, and make a decision within 30 days. Once the application is determined, the MED must inform the applicant BESI within 5 working days. 
Sanctions for non-compliance 
The SFI Regulations reiterate the sanctions for non-compliance set out in the SFI Law, stating that offending transactions will be invalid and violators shall have their business operations discontinued and licences revoked. 
Conclusion and potential developments 
The SFI Regulations add little detail to the SFI Law, but by publishing the forms and information to be submitted with an application, they provide a platform for making applications. Further, FIRRD has confirmed it is now receiving applications under the SFI Law. 
Various government officials have indicated that a new Investment Law is under discussion, with the intention of providing a favourable and enabling regulatory framework applicable to both foreign and domestic investment. We understand that if adopted, such new Investment Law could repeal the SFI Law and the Law of Mongolia on Foreign Investment enacted in 1993, which has regulated foreign direct investment in Mongolia since its adoption. However, there is no clear timetable for submission of the draft law to Parliament and subsequent discussion and adoption. If enacted in the form proposed, the new Investment Law could substantially change the foreign investment regime in Mongolia. We will continue to monitor the situation and will issue an update as soon as further information is available.
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AFCCP sends notices to banks on several violations
May 14 ( Agency for Fair Competition and Consumer Protection Mongolia is giving two-week notification to 14 commercial banks effective from tomorrow. Previously the mentioned violations have been in the courts. However, the previous authorities of the agency have failed to appeal in the Supreme Court of Mongolia. Chairman of the agency stated that the following violations should be corrected and banks should take an action to resolve the issues in two weeks:
<![if !supportLists]>·         <![endif]>The 1% fee for imposed on every loan to individuals and commercial entities violates the Competition Law;
<![if !supportLists]>·         <![endif]>There are unnecessary documentations involved in the borrowing process. Also, the cost for loan process is borne by the borrower which violates the Clause 12.1.10 of the Competition Law;
<![if !supportLists]>·         <![endif]>Lack of the information given to the customer regarding the interest rate calculation. Thus, confusing the customer on monthly rate and annual effective rates. This violates Clause 12.1.2 of the Competition Law – "Falsely advertising its own products and services, confusing the customer.." and Clause 7.1 of the Customer Rights Law "Failed to provide correct and sound information to the customer";
<![if !supportLists]>·         <![endif]>Commercial banks should distribute the copies of loan agreements to its branches, and without taking this measurement by forcing the agreements to the customers is violation of Clause 12.1.10 of the Competition Law – "Lawful suitability and use commercial methods to cause loss to customers";
<![if !supportLists]>·         <![endif]>Fee imposed when card users withdraw cash from bank tellers is a violation of Clause 12.1.10 of the Competition Law – "Lawful suitability and use commercial methods to cause loss to customers";
<![if !supportLists]>·         <![endif]>Require PIN code when make purchase at POS (Point of sales terminal) machines such us supermarkets and service centers.

Petrovis fined by AFCCP for not giving customers a full tank at random check
May 14 ( The Agency for Standardization and Metrology and the Authority for Fair Competition and Consumer Protection have imposed a 200,000 MNT fine on Petrovis LLC, the petrol import company. 
State Inspectors revealed several failures at Petrovis filling stations such as slow filling of A80 benzin, high inaccuracy and the pumping of 150 ml less fuel per liter
The Authority for Fair Competition and Consumer Protection conducted sudden inspections on eight filling stations of six petrol import companies, a Sod Mongol filling station in Orkhon aimag and a car gas provider company, along with the Agency for Standardization and Metrology. 
The Authority for Fair Competition and Consumer Protection conducted the inspections on filling stations to ensure whether filling stations pump volume meets the requirements after consumers` complaints and requests. The Authority has received numerous complaints about crooked Petrovis filling stations claiming the pumps don't give the correct volume. The inspection also revealed that a car gas provider illegally run its business without the required special license. 

Ulaanbaatar, May 15 /MONTSAME/ "Petroleum-2013" conference will take place on May 24.   
It will be organized by the Ministry of Mining and the School of Geology and Petroleum Engineering (SGPE) of the Mongolian University of Science and Technology (MUST).
This conference is the annual event in which take part many scientists, experts and universities' instructors and students. This time, several delegations are expected from neighbor and other countries.
The gathering will discuss the national reform in petroleum sector, changes and problems.

Mongolia aiming to meet its fruits, vegetable demand, after successful wheat, potato plan
May 14 (UB Post) Thanks to Mongolian agriculturists, Mongolia was able to fully meet domestic demands for wheat and potatoes. Beginning this year, the government is aiming to meet domestic fruit and vegetable demands as well, with crops grown on Mongolian soil.
This spring, the Ministry of Industry and Agriculture (MIA) distributed 770,000 sea buckthorn saplings and 60,000 strawberry seeds to individual agriculturists and businesses, to cover a planned 1.4 hectares of land. Select growers were given five year loans to maintain their projects.
The MIA also plans to provide 11 storage facilities capable of flash freezing fruit for improved quality of storage, and to provide domestic fruit growers with 52 complex synthetic greenhouses. Two types of greenhouses will be provided, and each will cover 14.1 thousand square meters of land.
Growing sea buckthorn, gooseberry and red bilberry has become quite popular. However, the government is focused on increased efforts to grow other fruits that will suit the Mongolian climate, such as apples, plums, cherries, raspberries and strawberries.
The MIA is sponsoring a project competition for those who are willing to grow fruits that are uncommon in Mongolia, and manufacture their by-products.

Australia lags Mongolia in Internet speeds
Australia ranked 45th when it came to download speeds with 13.09Mbps
May 15 ( Mongolia has outranked Australia in Internet speeds according to Ookla's Net Index, which is based on results.
The index compared download and upload speeds around the world from November 2010 to May 2013 where the average distance between the client and server is less than 300 miles (483km).
Australia ranked 45th when it came to download speeds with 13.09Mbps, below Mongolia, which ranked 43rd at 13.80Mbps.
Hong Kong topped the download list with 46.49Mbps, with Lithuania coming in second with 40.37Mbps and Andorra coming in third with 38.53Mbps.
Malawai rounded out the list in last with download speeds of 0.98Mbps.
Australia's ranking in the Net Index dramatically dropped in upload speeds. It came in 95th with upload speeds of 2.07Mbps, with Mongolia ranked 21st with upload speeds of 10.55Mbps.
Lithuania topped the list with uploads of 32.67Mbps, followed by Andorra with uploads of 31.14Mbps and Hong Kong with uploads of 30.62Mbps.
Benin in West Africa came last with uploads of 0.42Mbps.

International and Mongolian Development Partners Launch Forum to Promote Sustainable Finance in Mongolia – May 13 -16, 2013
Ulaanbaatar, Mongolia, May 13, 2013 (IFC) – Dutch Development Bank FMO, Trade and Development Bank of Mongolia (TDB), IFC, a member of the World Bank Group, Mongolia Bankers Association (MBA) and the Banking and Finance Academy (BFA) today launched a sustainable finance forum to promote green growth in Mongolia as the country develops. 
The four-day Mongolian Sustainable Finance Forum 2013, which started today with a CEO roundtable exclusively for banking chief executives and the Bank of Mongolia, aims to raise awareness, foster cooperation and facilitate policy development and knowledge sharing in sustainable development. 
For the first time, different stakeholders, including local bank executives, government officials, key industry representatives and international experts, are gathering to discuss ways for the banking sector to capitalize on new business opportunities while ensuring Mongolia's sustainable development. The resource-rich country is one of the world's fastest-growing economies, having expanded 12.3 percent in 2012, according to the World Bank. 
"It is a pivotal time for Mongolia's economic development," said Ms. Sanjaasuren Oyun, Mongolia's Minister of Nature, Environment and Green Development (Mogi: think it's just Ministry of Environment and Green Development), at the CEO roundtable. "The banking sector can play an important role in ensuring that the country's economic growth can create long-term values and benefit more local communities." 
In the same vein, Mr. Bold Javkhlan, First Deputy Governor of the Bank of Mongolia said, "We are delighted that the sustainable finance forum is being organized in Mongolia. We hope that, in the near future, internationally recognized sustainable financing practices and standards will be implemented throughout the Mongolian banking sector. The journey has started and we will be working together with the banks to promote and support sustainable financing and development."
The Mongolian government has attached great importance to green growth and environmental responsibility. In 2013, the government established a new National Green Development Strategy and an action plan to outline ways to build a greener economy. 
In his opening speech, Mr. Nanno Kleiterp, Chief Executive Officer of FMO and co-convener of the event, expressed his delight at the high-level support for sustainability. "I am excited to see various stakeholders and decision makers presenting here today to support sustainability in Mongolia. I strongly believe Mongolia has the potential to become a leader in this new area among frontier economies." 
An increasing number of developing countries have created sustainable-finance frameworks and incentives, such as China's Green Credit Policy and Nigeria's Sustainable Banking Principles, to support the adoption of environmental and social standards as well as to explore sustainable business models. International organizations such as IFC and FMO have been leading this transformation with local partners in emerging markets. 
"IFC's own portfolio has shown that good environmental and social performance directly correlates with long-term financial return," said Mr. Hyun-Chan Cho, IFC's Country Manager for China, Mongolia, and Korea. "We are helping banks and companies in emerging economies to become more competitive and manage their non-financial risks smartly by sharing our global knowledge and local resources." 
TDB, one of the top five Mongolian banks with a focus on raising awareness on sustainability issues across the industry, has been implementing an internal environmental and social risk management framework it recently developed. "Environmentally and socially sustainable banking protects our assets and presents business opportunities by opening up new financial products and markets," said Mr. Medree Balbar, Chief Executive Officer of TDB. "We are committed to sharing international best banking practices with our peers and educating our clients in this regard." 
Mr. Bold Magvan, President of the Mongolian Bankers Association, said, "Developing sector expertise and creating a level-playing field will be a crucial element for sustainability to thrive in Mongolia. In addition to using existing platforms and networks, we will be working together with the Bank of Mongolia, the Ministry of Environment and Green Development, and our international and local partners to assist the banking sector in building relevant knowledge and capacity over the short, medium and long term." This view was echoed by Ms. Nergui Sandagjav, Director of the Banking and Finance Academy. 
Mongolia's central bank and its Ministry of Environment and Green Development are both represented in the Sustainable Banking Network for Regulators. The network, led by IFC, is an informal group of bank regulators and banking associations to develop standards, policies and guidelines for environmental and social best practices in their countries' banking sectors. 
The President of Mongolia, His Excellency Mr. Tsakhiagiin Elbegdorj, is expected to give a keynote speech at an industry seminar on May 15. More than 200 professionals from different sectors of the economy are expected to attend. 
About FMO 
FMO supports sustainable private sector growth in developing and emerging markets by investing in ambitious entrepreneurs. FMO believes a strong private sector leads to economic and social development, empowering people to employ their skills and improve their quality of life. FMO focuses on three sectors that have high development impact: financial institutions, energy, and agribusiness, food & water. With an investment portfolio of EUR 6.3 billion, FMO is one of the largest European bilateral private sector development banks. 
About TDB 
TDB, the oldest and the largest corporate bank in Mongolia, prides itself for its leading position as the universal banking service provider, offering full range of services delivered with dynamism and excellence in service and quality. TDB was the first to introduce modern banking technology, adopt IASB standards in financial reporting, become a member of SWIFT network, offer card and ATM services and commence gold exports into the foreign market. As the top international expertise derived from State bank of Mongolia origins, TDB is undoubtedly the international face of Mongolia with strong capabilities in corporate banking, international banking, treasury, retails and SME banking. 
About IFC IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. We help developing countries achieve sustainable growth by financing investment, providing advisory services to businesses and governments, and mobilizing capital in the international financial markets. In fiscal 2011, amid economic uncertainty across the globe, we helped our clients create jobs, strengthen environmental performance, and contribute to their local communities—all while driving our investments to an all-time high of nearly $19 billion. For more information, visit
About MBA 
The Mongolian Bankers Association is an independent, non-profit, non-government organization established in 2000 by the banking and non-banking financial institutions in Mongolia. As of today, we are the voice for 19 member financial institutions including 14 commercial banks, 4 non-bank financial institutions and one foreign Bank Representative Office. The Vision of the MBA is to become a powerful professional organization representing the bankers and financial officers, to lead the banking and financial sector to ensure the sustainable development and equitable economic growth of Mongolia, and to contribute substantially to the development of the country as the regional financial center 
About BFA The Banking and Finance Academy is a professional training institute of the banking and financial sector of Mongolia. It was established by several commercial banks of Mongolia with a goal to provide the most immediate and/or up-to-date training services for Mongolian banking and financial professionals and practitioners to enhance their professional knowledge and skills. The Academy is serving the growing need for professional financial education in the Mongolian banking and financial sector and the public.

Mongolia sent team of 40 people to Seattle to receive first self-bought plane from Boeing
May 15 ( MIAT Mongolian Airlines welcomed Mongolia's flag carrying new Boeing 767-300ER at Chinggis Khaan International Airport at 11 am today, May 15th. The order of the new Boeing was made in 2011 at the US State Department in Washington by the Mongolian Government. This is the first time in more than two decades that the airline extended its route network by purchasing a Boeing airplane.
At the delivery ceremony of the new Boeing the Minister of Road and Transportation A.Gansukh and a number of officials attended.
The В-767-300ER is fully-efficient plane for distant flights with 25 business and 195 economy class seats and a capacity for 225 passengers in total and 10-12 tons of luggage. The plane can fly 11,070 km without landing.
A large team of over 40 Mongolian officials headed by the State Secretary of the Ministry of Road and Transportation,  B.Batzaya, CEO of Mongolian Airlines MIAT, G.Jargalsaikhan, the Head of the Civil Aviation Authority, S.Buyandalai and officials from the Ministry of Economic  Development and media groups received the key to the new plane in the US yesterday.  (Mogi: flying 40 people over just to receive the keys to the plane to Seattle is a little outrageous don't you think? Well, at least the return trip back was sort of free)

Ulaanbaatar, May 15 /MONTSAME/ A visit is expected of Andrew Lack, CEO of Bloomberg's multimedia group on May 20-21.
Mr Lack is supposed to be received by the President Ts.Elbegdorj, to get au fait with Ulaanbaatar-based "Bloomberg" TV, and to take part in  opening of the "" website.
M  Andrew R.Lack serves as the Chief Executive Officer of Bloomberg Media Group. Before he worked as chief operating officer and president of NBC Universal, Inc.,  and also for CBS News
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6th Mongolia-Japan Consultative Meeting Discusses Trade and Investment
May 14 (UB Post) The sixth joint consultation between the governments of Mongolia and Japan, as well as private sector officials, on trade, investment and mineral resources took place on May 3. Over 100 delegates including Japan's Deputy Minister of Economy, Trade and Industry, Isshu Sugawara, were in attendance.
On May 7, the Mongolian Ministry of Economic Development, Ministry of Mining and Ministry of Foreign Affairs spoke about the consultation, reporting that it was led by two major agendas – trade and investment, and mining and mineral sources.
Japanese delegates expressed their interest to regularly purchase quality coal with reasonable prices for a certain fixed term; take part in the exploitation of the Tavan Tolgoi deposit; own a share of the deposit; and establish a joint corporation to increase Mongolia's coal export.
State Secretary of the Ministry of Mining, R.Jigjid (Mogi: former ambassador to Japan, btw), stated, "Japanese delegates agreed that the Mongolian investment law and legal environment are unstable, and the foreign investment regulatory law interferes with investment in Mongolia from Japan. (Mogi: Minister of Mining Gankhuyag is a Japanese Monbusho scholarship alumnus too, so is CEO of Erdenes OT, Sedvanchig. So is Minister of Education Gantumur, hmmm, who else, …)
"State service for foreign investors is very slow and delayed. High transit transportation expenses via Russia and China are preventing the further development of trade between Mongolia and Japan."
Certain joint projects are set to be implemented following the consultation. The two countries will study technology to dress coal with sand in a dry method; intensify the construction of an oil processing plant in Darkhan-Uul Province; and conduct research on establishing a semi-coked briquette plant to reduce air pollution in Ulaanbaatar.

Speaker receives North Korean Ambassador
May 14 ( The Speaker of the State Great Khural, Z.Enkhbold, received the Ambassador to Mongolia from the Democratic People's Republic of Korea, Hong Gyu on Tuesday May 14th. In the meeting Speaker Z.Enkhbold congratulated the Ambassador, Hong Gyu, for presenting his credentials. (Mogi: This the same guy who conveyed DPRK's wish for food aid.)
The Speaker emphasized the traditional friendly relations between the two countries and the development of intergovernmental bilateral cooperation. 
Ambassador Hong Gyu delivered special greetings from the Chairman of the Assembly, Choe Thae-bok, to the Speaker stating intergovernmental bilateral cooperation has played a big role in growing relations between the two countries.
Ambassador Hong Gyu said he is willing to strengthen bilateral cooperation between the two countries, to support the exchange of delegates between the countries and invited the Speaker to visit the Democratic People's Republic of Korea.

May 14 (InfoMongolia) According to Japanese FNN Agency reported on May 14, 2013, the Government of Mongolia has resolved to deliver food aid to the People of North Korea at its Cabinet meeting held last Saturday, May 11.
The source continued, however, North Korea is conducting a nuclear test, but its civilians are facing with severe food shortage, in particular North Korea's toughest part of the year for food begins in April through September, when the annual corn harvest begins.
Exactly what kind of assistance would be shown from the Government of Mongolia was not determined yet, it will be considered after announcing a tender in June of 2013. Also, North Korea used to receive food aid from China, but bypassing the recent strained relations with China, North Korean Government had to ask from its in close relationship country - Mongolia, reported FNN Agency.
In conjunction, the food assistance issue was discussed during a credential handing ceremony by North Korean Ambassador Hong Gyu to Mongolia's President Ts.Elbegdorj held in Ulaanbaatar on April 16, 2013.
Nevertheless, the Government of Mongolia has not made its official statement yet regarding the aid, the issue also was not included on the agenda for the Cabinet meeting held on Saturday, May 11, which was publicly released earlier.

Introducing the world's most unlikely political grouping.
ULAN BATOR, Mongolia (Foreign Policy) — As a basis for an international alliance, a common first letter might not seem as natural as a common language, religion, or geography. But Mongolia needs all the friends it can get.
After all, it's not easy being a landlocked country with global ambitions. This land of a -- widely spaced -- 2.8 million people is undergoing one of the world's great economic booms, recording annual double-digit growth rates over the last two years, thanks largely to a mining windfall.
As fine a circumstance as that may be, it crystallizes the fact that a single economic partner wields tremendous influence over domestic affairs. The Chinese dragon has coiled its tail around Mongolia, accounting for more than 80 percent of Mongolia's exports. Additionally, to the north is Russia, an old but complicated friend with motives of its own. Mongolia imports near all its oil and petroleum from Russia over a domestic railway network still controlled by the Federal Agency for Railway Transport in Moscow -- more than 3,000 miles away.
You can't blame Mongolia for looking farther afield. As the country begins to monetize the trillions of dollars in mineral wealth beneath its soil, the stakes have risen. How can Mongolia leverage the mineral boom while safeguarding against the undue influence of its hungry superpower neighbors? Mongolian leaders are fixated on the limits of their geographical position, China and Russia's stranglehold on trade, and a desire to make lasting economic strides.
Purevsuren Lundeg, the foreign-policy advisor to Mongolian President Tsakhiagiin Elbegdorj, was brooding over this displeasure one day last August when across his desk came a news release issued by Silk Road Management, an Ulan Bator-based investment company (Mogi: more like Yangon based these days) specializing in public equities, money markets, and bonds in out-of-the-way markets. The notice announced the creation of something called the M3 Fund, "the first ever investment fund to be focused on Myanmar, Mongolia and Mozambique, three resource-rich countries which we term as M3." The news release noted that the countries have more in common than the letter M. All three are undergoing post-socialist democratic reforms. Each is experiencing a natural resources boom that will extend for decades. And most importantly, each borders at least one of the BRICS countries (in the cases of Mongolia and Myanmar, two), which are hungry for control of these natural resources. Alisher Ali, Silk Road's managing partner, told me that he thinks, "All three nations will be among the top five fastest-growing economies in the next decade." Mongolia's superheated economy already ranks No. 4.
Purevsuren's interest was piqued. It was the first time he had thought of these three countries in a single grouping, and Mongolia is eager to form new political and economic alliances. "We want to have less dependence on our two neighbors," Purevsuren told me. Could Mongolia, Mozambique, and Myanmar cooperate to the benefit of each individual country, massaging diplomatic, social, and economic growing pains?
This was the beginning of Ulan Bator's attempts to form the M3 cluster, a fledgling political alliance. The goal, vaguely sketched, is to join these three countries in a loose confederation of information, exchange, and advice, with groupings such as the G-20 and the Arab League serving as models. Mongolia is attempting to construct a union of allies that can protect it against the ravenous economies of its BRICS neighbors. "We're looking at the similarities, to bring to the forefront what we have in common and coordinate common goals and interests," Purevsuren says. "This idea is brand-new. Mongolia is going to show leadership on this."
Purevsuren drew up a proposal on President Elbegdorj's stationery. He sent one copy to colleagues in Naypyidaw, Myanmar's capital, which he had recently visited for bilateral talks on democracy. He dispatched another copy to the belly of the beast itself, Beijing, where the Mongolian ambassador to China handed the note to his Mozambican counterpart.
Mongolia is now initiating trilateral talks to be held this June at the World Economic Forum's East Asia summit in Naypyidaw. There are also preliminary plans for the presidents of the three countries to convene for talks in Ulan Bator. "We have a number of issues in common," says Victorino Xavier, the national director of economics at Mozambique's Ministry of Industry and Trade. "That process is welcome in Mozambique. For us, that would be a good initiative. We have a lot to gain from each other."
Thura Ko Ko, the managing director of YGA Capital Limited, a Naypyidaw-based firm investing in regional and international funds, also sees potential. "One of the interesting things that we could learn is if Mongolia takes control of its natural resources, instead of handing out concessions left, right, and center to the Chinese or the Russians," he said. "Maybe that's part of the reform process you'll see in Myanmar, whereby we no longer want to have to turn to our neighboring markets. We would like to have a wider frame in terms of our natural resources and reach out to the West, perhaps."
In March, Purevsuren and Mongolia's deputy minister of foreign affairs, Damba Gankhuyagmade an official visit to Myanmar. They discussed cooperative initiatives with the head of Myanmar's presidential administration, the deputy speaker of the parliament, and the chief of the committee on foreign affairs. The government of Myanmar announced that several of its representatives, along with Aung San Suu Kyi, Nobel Peace Prize laureate and chair of the opposition National League for Democracy, would take part in the ministerial conference of the Community of Democracies, which was held at the end of April in Ulan Bator.
Gunaajav Batjargal, director of the Mongolian Foreign Ministry's department of policy planning and research, discussed his hopes for the alliance with me. "We have similarities. Why not get together and share our experiences?" he said. "We are close to the demand houses of the world. We have to prevent the complete rip-off of our natural resources. We'd like to cooperate to achieve a possibly unified position. It's a very ambitious task, and daunting. It's game-theory stuff." (One U.S. Embassy official was less charitable, quipping that the new collective would be the "mortar between the BRICS.")
So what are these countries actually going to work on? One convenient starting point might be the new mining law that officials in Myanmar are drafting, scheduled for a final debate in early 2014. In December, Mongolia published draft revisions to its own mining law. The changes would appear to steer Mongolia away from the free market practices that have underpinned its recent economic growth by granting the government free stakes in numerous mining developments. This sort of resource nationalism may not win Mongolia plaudits at Davos, but it's the kind of measure that the guardians of small, yet growing economies like those of the M3 believe may be necessary to avert domination at the hands of their stronger neighbors. Of the more than 4,000 mining licenses in Mongolia, more than half are already in Chinese hands.
As for Mozambique, though it may neighbor South Africa, the most relevant BRICS country for its future may be Brazil, with which it shares a language, colonial history, and deepening economic ties. The Brazilian mining company Vale plans to mine 4.5 million tons of Mozambican coal this year. Eletrobras, Latin America's largest utility, is considering building a $6 billion project in the capital, Maputo. In addition, India and China are among the potential developers of the recently discovered gas off its coast, which promises to make Mozambique the world's third-largest exporter of liquefied natural gas in the coming years.
Myanmar is looking to diversify its partners as well. Due to lengthy Western sanctions against the military junta running the country, China long ago established its primacy in Myanmar, taking strong positions in jade, timber, teak, real estate, and other industries. In the 2011-2012 fiscal year, trade between the two countries totaled $3.6 billion. China is Myanmar's No. 1 trading partner. However, domestic frustrations over perceived Chinese environmental indiscretions, underlined by a protest that halted the development of a multibillion-dollar hydroelectric dam in Myanmar, have boiled over.
The concern over Chinese dominance was likely one major factor behind Myanmar's recent moves to liberalize the country's political system, including allowing Aung San Suu Kyi to run for office. But though its emergence from pariah status may one day lead to fully normalized relations with the United States and Europe, Myanmar's leaders are also interested in friends closer to their own situation.
"Myanmar is very sensitive," says Murray Hiebert, Sumitro chair for Southeast Asia studies at the Center for Strategic and International Studies. "There's certainly a concern. The goal is to open up the economy. They are strenuously looking for alternatives to China. They want to create models for good business practices."
While the governments move to formalize the alliance, the concept's originator, Silk Road, continues with plans of its own. The M3 fund is currently valued at $25 million. Ali, Silk Road's managing partner, recently established an NGO in Ulan Bator, the Mongolia-Myanmar Business Council, that fosters connections between those in the financial sectors in the two countries, though the organization has broader goals. "We would like to encourage political links," Ali says. "These countries should definitely get together and form policy. Hopefully, this will result in an effective response to the dark side of physical proximity to these BRICS countries." (Mogi: looks like Alisher found a way to use his Mongolia experience to "connect" the two)
The concept got a further vote of confidence recently when Supachai Panitchpakdi, secretary-general of the U.N. Conference on Trade and Development said in a speech in Ulan Bator, "The 3Ms -- Mozambique, Myanmar, and Mongolia -- are on the map and are raising investors' interest worldwide. There are many obstacles to climb, but they are in your hands." Less than a year old, the M3 idea is on the global agenda.
It may seem ironic that a political union dedicated to protecting against dangers of foreign investment was inspired by a foreign investor. Then again, the BRICS, now a formal political grouping with regular summit meetings, started out as a cheeky acronym in a Goldman Sachs report. And Mongolia, eager for solutions to its geographical challenges, will take inspiration where it can find it.

Mongolia considers re-opening embassy in Malaysia since closing 7 years after Altantuya murder
May 15 ( It has been seven years since Mongolia has not had an ambassador to Malaysia. The position was suspended after an incident where a citizen of Mongolia, Sh.Altantuya, was brutally murdered in Malaysia and involvement with Malaysian politicians was suspected.
At the moment Mongolians in Malaysia approach the Ambassador from Mongolia to Thailand if any problem does arise. 
The Government of Mongolia is considering appointing an ambassador to Malaysia next year because it is necessary to pay attention to almost one thousand Mongolians in Malaysia. 
The Director of the Consular Department of Mongolia's Ministry of Foreign Affairs, Sh.Sukhbaatar, has returned from a mission to review the issue in Malaysia. 
Sh.Sukhbaatar met Karpal Singh, the attorney for the murdered Mongolian woman, Sh.Altantuya, seeking support on the murder case to be resolved by fair justice and to urge for a legal procedure on the claim of murder case by her father. Sh.Sukhbaatar also asked for help in finding humanitarian assistance for her two orphan children and to return her body on the request of her family. 
The attorney for the murdered Mongolian woman, Karpal Singh, said that "the two ex-police officers who are suspected for the murder appealed against the Court decision so the progress is slow. Therefore the claim submitted by the father of the murdered Mongolian woman is being prolonged."
He also said that the humanitarian assistance for her two orphan children could be applied for via non-profit organizations. He promised to arrange the return of her body  to her family on his own. 
A citizen of Mongolia, Altantuya Shaariibuu, is suspected of being murdered by two former bodyguards of Prime Minister Najib Razak in 2006. The reason for her murder was believed to be caused by a submarine deal between the Malaysian Government and a French company specializing in military goods. 

May 15 (InfoMongolia) On May 14, 2013, President of Mongolia Ts.Elbegdorj accredited newly appointed Ambassador Extraordinary and Plenipotentiary from the Republic of Kazakhstan to Mongolia Kalybek Ibragimovich Koblandin, who handed over a Letter of Credence.
Following the credential handing ceremony, parties discussed the current relationship of the two states and agreed that the mutual partnership has been strengthening in the frames of regional and international cooperation, despite of recent established diplomatic relations. Moreover, Intergovernmental Commission on trade and economy, science, culture and technical cooperation between the two Governments has been playing an important role to develop the collaboration.
Ambassador K.I.Koblandin expressed his gratitude for supporting the Republic of Kazakhstan in the frames of UN and international activities and mentioned to restore direct flights in the routes of Ulaanbaatar - Astana - Ulaanbaatar and Ulaanbaatar - Almaty - Astana - Ulaanbaatar.
Mr. K.I.Koblandin is a Doctor of Historical Sciences and during the meeting Ambassador noted that he was studying Mongolia-Kazakhstan history.
President Ts.Elbegdorj confirmed that the relationship of the two countries has been broadening and expressed to support to the Ambassador's duty during his staying in Mongolia.
Mongolia and the Republic of Kazakhstan have established the diplomatic relations on January 22, 1992.

Mogi: now it's Turkey's turn to ask after Russia
May 14 (InfoMongolia) On May 13, 2013, the Speaker of the State Great Khural (Parliament) Z.Enkhbold received the Deputy Speaker of the Grand National Assembly of Turkey Sadik Yakut in the Government House.
During the official visit of the Prime Minister of the Republic of Turkey Recep Tayyip Erdogan to Mongolia held last April, some agreements were established and signed between the Governments of Turkey and Mongolia.
In the frameworks of the intergovernmental talks, Turkish Exim Bank to allocate 300 million USD loan to finance a construction of community apartment in Ulaanbaatar and Deputy Speaker Sadik Yakut introduced some details of the planned project.
Moreover, Deputy Speaker Sadik Yakut said Turkey is promoting its Izmir city for the upcoming the World Expo 2020 event and during the Bureau of International
Expositions to be held in Paris in 2013, the official candidate will be selected form six nominated cities - Izmir (Turkey), Ayutthaya (Thailand), Yekaterinburg (Russia), Sao Paulo (Brazil) and Dubai (United Arab Emirates), hence the Government of Turkey asks Mongolia's vote for Izmir, Turkey.
Last week, Russian delegation meeting with the Speaker Z.Enkhbold has also asked Mongolia's support for Yekaterinburg city.
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Mongolian scientist makes diamonds from calcite
May 15 ( Now the scientists of the Goethe University dreaming of Nobel Prize.
In this high-tech laboratory at Riedenberg Dr. Lkhamsuren Bayarjargal makes diamonds from calcite: Because of the strong laser radiation he conducts research with goggles.
Frankfurt from such a man every woman dreams: Dr. Lkhamsuren Bayarjargal (38) makes diamonds made ​​of calcite. The white stuff that settles in the kettle. But he now received the prestigious Max-von-Laue-price.
Diamonds, the most expensive and hardest mineral in the world, can be produced artificially for 60 years, from graphite. To Bayarjargal on campus Riedenberg the calcite conversion succeeded, he has been researching for years: "In the Canary Islands and in Uzbekistan diamonds have been found in calcite deposits. We wanted to find out if the diamond can occur there, or were transported inside. "
In the laser laboratory at Riedenberg the Mongolian scientists generated enormous pressure and temperature as in the Earth"s interior. "If you turn the Eiffel Tower, press the tip down, the pressure strength is roughly comparable with that in our diamond anvil cell. And the laser is so strong that you would immediately burn a fire in your stomach! At 3000 degrees, the diamonds originated. "
Sorry, no, that sparkle and glisten. Bayarjargal`s diamonds are so tiny that you can only see them under a microscope. Has produced thousands of man, and all together would hardly fly shit.
Nothing for us girls. But for science are the Frankfurt diamonds are a treasure.
Bayarjargal want to continue researching, producing 10 000 degrees. His dream? "The Nobel Prize would not be bad."
Dear readers, before you now scratching your water pot to make calcite diamonds: you need a half million euros, great knowledge in laser technology and immense talent experimental ...

Poverty rate still remains high to meet Millennium Goal 2015 deadline
May 14 (UB Post) In September 2000, the heads of 193 countries including Mongolia, established eight international development goals at the Millennium Summit, all to be accomplished by 2015. One goal was to eradicate extreme poverty and hunger, a task Mongolia has yet to accomplish.
The 2015 deadline is coming soon, but Mongolia's poverty rate remains high. Mongolia aimed to reduce the poverty rate to 18 percent of total population. But a 2011 study showed the rate was 29.2 percent.
Senior expert of the Consolidated Planning Division of the Ministry of Economic Development, O.Idshinrenjin, stated, "Though the studies are showing a high poverty rate, a great deal of measures against poverty, and projects to support employment are underway. The proper way to reduce poverty is to provide jobs for citizens and let them earn reasonable money instead of distributing cash to them.
"Therefore we are enforcing policy that supports employment and proper business environment."
Since December 2012, Mongolia has held three public conferences regarding the development objectives to be achieved by 2015. A meeting on May 7 discussed the major issues submitted by the previous nationwide conferences. The results of the meeting will be introduced at the United Nations General Assembly in September, 2013.
Additional development goals are to achieve universal primary education; promote gender equality and empower women; reduce child mortality rates; improve maternal health; combat HIV/AIDS, malaria, and other diseases; ensure environmental sustainability; and develop a global partnership for development.

Mapping the Restoration Ecology Team in Mongolia
May 15 (DTM Consulting Inc.) The Tributary Fund has sent a team of ecological scientists to Mongolia, with the goal of helping local citizens create a restoration vision for landscapes that are overgrazed and degraded by mining. As is true in parts of the American West, the challenging geologic and climatic conditions make it difficult for revegetation projects to thrive, as drying winds are abundant and water is in short supply. The trip serves as a great opportunity to share restoration knowledge and experiences.
The team is sending frequent updates on their travels, including sets of beautiful photos from the heart of Mongolia. We wanted to find an easy, inexpensive way to share their photos, and to provide spatial context so folks not familiar with Mongolian geography could trace the team's progress. We settled on a nifty third-party application called iMapFlickr that places geolocated photos (coordinates are embedded in the photos EXIF information) from a Flickr account onto a Google basemap. The map can be embedded into a website or left as a direct link to an iMapFlickr account. The Tributary Fund office in Bozeman, Montana can then drag-and-drop the photos into their Flickr photoset as they come in from the field, and the map will automatically update. The workflow is beautifully simple, does not require any customized coding, and is free of charge. Enjoy the photos!

Mogi: never heard of the guy but if anyone knows he's really not, let me know.
Famous magician Ben Murphy to perform in Mongolia
Famous illusionist and magician Ben Murphy from Australia is set to perform in Mongolia this June.
May 13 (UB Post) Ben Murphy is an international entertainer, well-known by his exciting shows in which he combines comedy, magic, and illusion. He is a World-Record Holding Illusionist for his incredible death defying escapes inside Houdini's Chinese Water Torture Cell.
The following is an interview with L.Batbayar, the director of the Arianna World Company – the Mongolian organizer of the show, about the upcoming performances.
-Why did you invite world famous magician Ben Murphy to perform in Mongolia?
-We are an experienced company that has organized over 30 concerts by Mongolian singers and bands, as well as cultural and other events in China and in the USA. So it is only natural for us to organize performances by world famous artists in Mongolia. This year, we are planning to hold three big events, one of which is a Las Vegas show by well-known magician and illusionist Ben Murphy at the UB Palace.
-When did you offer him to perform here and how did he respond to it?
-We sent our request in the middle of January. The entertainment companies around the world which organize international shows must meet some very stringent requirements. Our company met them, hence, we had no problem with it. Actually, the production agency to which the artist belongs is responsible for his performance tours. But Ben Murphy got introduced to our request in person. He has toured in some Asia-Pacific countries including Hong Kong, Vietnam, Thailand, and New Zealand. He hasn't performed in China and Russia, so Mongolia must have attracted his attention. He replied that he wanted to tour in Chinggis Khaan's Mongolia which has a great history.
-How much does Ben Murphy's show in foreign countries cost?
-It is at least 40 to 80 AUD, which is comparably more expensive than similar shows. His show in Mongolia will cost 25,000 MNT for children and 35,000 MNT for adults. Ben Murphy used to get sick very often as a child, hence, he is involved with international charity activities and holds free shows for the children in vulnerable countries. He decided to reduce the international show rate for Mongolia, too, which is his gift for the children on Children's Day. The show will take place only four times on June 1 and 2, twice a day. Besides Ben Murphy, Mongolian talented child singer Ariunsanaa who is well-known for covering Adele's songs will perform. The evening show will also have special acts for adults.
-What magic tricks does the Ben Murphy show mostly have?
-He has some very amazing and astonishing acts. For example, he performs the famous Houdini's Chinese Water Torture Cell, in which the performer has to escape from a locked glass tank filled with water. He set the world record in Las Vegas with this act overcoming the inventor himself of the act, the famous magician Houdini. He has many mind-blowing acts, too. He also reads people's minds. One of the reasons why he has become a much-loved entertainer is that he always engages some of the audience in his show.
-So will some of the Mongolians from the audience possibly perform with him onstage?
-Yes, absolutely. The participants will even get a special prize from him.
-Will Mongolian magicians take part in the show?
-Mongolian magician Bayarsaikhan will take part in the show. He is the head of the Mongolian Magicians Association and the student of the son of Mongolia's number one magician, Tsend-Ayush. He welcomed our request very positively saying that, "I am very glad to participate in the show by a famous magician recognized by an international audience. This is a very rare opportunity." He will host the show as well as perform some tricks.
-How long has Ben Murphy been working as a magician?
-He is rather young. He is 28. He first studied magic tricks when he was 13. He has been working hard in this field for the past 8 years. His tricks are getting tougher year by year.
-Have you ever watched one of his shows? If so, how was it?
-Yes I have watched his show and met him. I was very amazed when he performed a magic trick for me.
-Some of the performances by foreign artists in Mongolia have been cancelled. Is Ben Murphy really coming to Mongolia?
-People can have no doubt about it. The equipment and devices used for the show were already sent to Mongolia a few days ago. We have a contract with him. And we have been inviting people to come to our show.

Mogi Munkhdul Badral Bontoi
Cover Mongolia
Mobile: +976 9999 6779
Skype: mogibb
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