Monday, July 8, 2013

[OT confirms deal reached, shipments start soon as 7/9, MSE suspends all but 29 brokers, and ₮350B worth mortgages converted/issued at 8%]

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Overseas Market

Mongolia tweets OK for Oyu Tolgoi shipments

July 8 ( The long-running dispute between the Mongolian government and Rio Tinto (LON:RIO) over the massive Oyu Tolgoi copper-gold mine may be finally over.

Mongolia owns 34% of Oyu Tolgoi located in the South Gobi desert.

The government of the Asian nation has been at loggerheads with operator Turquoise Hill Resources (TSX:TRQ), which is controlled by Rio and the owner the remainder of the mine, for months.

Shipments could start later this week as the negotiations over the repatriation of earnings – just one of many points of contention between the parties – from the mine may have been settled.

Bloomberg quotes from a tweet by the country's mining minister Davaajav Gankhuyag on Sunday:

"There is no significant problem with the Oyu Tolgoi mineral export contract. The first shipments will start on July 9."

First copper concentrate exports to China – Turquoise Hill has already produced 40,000 tonnes worth – were scheduled for June 14, postponed till June 21, and again last week

It was later confirmed by Oyu Tolgoi CEO Cameron McRae in a letter to employees that promised further details tomorrow:

I am delighted to announce that following a meeting of the Board of Director's on Friday, we are now in the position to ship Oyu Tolgoi's very first copper concentrate to international markets. We hope to be able to make the first shipment in the coming days, possibly as soon as this Tuesday, 9 July.

Mongolian government officials demanded to keep revenue from the giant copper and gold project in domestic banks.

The drawn out negotiations have forced Turquoise Hill – which has already plonked $6 billion on the massive project – to fund construction from its own coffers under a temporary month-to-month budget.

Mongolia has long coveted a bigger slice of the mine and has twice in the past couple of years floated proposals to take majority control.

Political rhetoric over a bill before the Mongolian parliament – elected last year on promises of greater resource nationalism – which contains sweeping changes for the mining industry has only added to the headaches of Rio and other foreign investors in the country.

Oyu Tolgoi will increase the average earnings of Mongolians by 60% – today the country ranks 130th in the world based on GDP per capita at $3,000 and 22% of the population live below the poverty line.

At full capacity the mine is set to produce more than 1.2 billion pounds of copper worth nearly $4 billion at today's prices, 650,000 ounces of gold ($800 million) and 3 million ounces of silver.

Of the $5.8 billion in annual earnings 71% will flow into Mongolian state coffers thanks to the government's 34% stake and the royalties, income tax, VAT, customs duty and other taxes it will receive.

Link to article


Mongolia Clears Rio's Copper Mine to Start Shipments to China

By Michael Kohn

July 8 (Bloomberg) Mongolia cleared Rio Tinto's $US6.6 billion ($7.3 billion) Oyu Tolgoi copper mine to begin shipments this week, in a sign tensions between the government and the world's second-largest mining company may have eased.

''There is no significant problem with the Oyu Tolgoi mineral export contract,'' Mines Minister Davaajav Gankhuyag wrote yesterday in a post on Twitter. ''The first shipments will start on July 9.''

Shipments to Chinese smelters were postponed twice last month, as Mongolia sought to ensure revenue from the mine was processed through Mongolian banks, Gankhuyag said last month. London-based Rio and the government have clashed this year over the cost, tax payments, and the number of locals in management of the mine that's forecast to account for a third of Mongolia's economy once fully operational.

''It all depends on Rio,'' said Oscar Mendoza, managing partner at Mongolia Asset Management, an investment advisory group based in Ulaanbaatar. ''Maybe the government just wants to say the ball is in Oyu Tolgoi's court.''

David Luff, a Melbourne-based spokesman for Rio Tinto, wasn't immediately able to comment on the minister's post.

Oyu Tolgoi has produced more than 40,000 metric tons of copper concentrate, according to a June 28 press release from Turquoise Hill Resources, the Rio unit that owns 66 per cent of the mine. The government owns 34 per cent.

The stockpiled concentrate is to be delivered by truck 80 kilometers south to the border post at Gashuunsuukhait, and then on to China.

Delays in shipments scheduled to start last month are costing Mongolia $US2 million in lost tax revenue every day, said Dale Choi, an Ulaanbaatar-based independent analyst.

'Losing millions'

''Every day of delay they are losing millions in lost investments because they are very cautious and they don't want to be perceived as repeating past mistakes,'' Choi said.

Gankhuyag told reporters at a press conference on June 28 that the two sides were trying to resolve a request by the government that Mongolian banks handle sales revenue from the mine. Mongolia was also insisting that its representatives on Oyu Tolgoi's board of directors see Rio Tinto's sales contracts with Chinese buyers.

''Sales revenue will go through Mongolian and OT LLC registered accounts,'' Gankhuyag said in another Twitter post yesterday, appearing to suggest that the debate over bank accounts had been resolved.

Link to article (the web version was yet to updated with the last paragraph)


Mining Minister: OT LLC showed us the Sales Agreement

July 5 ( Today, at the State Great Khural session, Mining Minister D.Gankhuyag stated that one of two issues prevented OT LLC to commence the concentrate shipment has been resolved. Yesterday, OT LLC started showing the Sales Agreement which was a demand from the government. As a shareholder, the government asked OT LLC management to disclose the Sales Agreements to the Mongolian side board members.

The other issue is that OT LLC sales transaction must take place through Mongolia-based banks. The reason being that OT LLC is a Mongolia registered company and its transaction must take place via company registered bank accounts.

We will update our readers in due course.

Link to article

Export income dispute holds up Rio's Oyu Tolgoi mine - Mongolia

* Differences on keeping income in Mongolian banks, sales deals

* Oyu Tolgoi to account for almost a 3rd of Mongolian economy

* Weak Mongolian currency, falling commodities demand raise Rio's risk

By Terrence Edwards

ULAN BATOR, July 4 (Reuters) - The Mongolian government and Rio Tinto have not yet reached an agreement on whether the miner can repatriate earnings from the $6.2 billion Oyu Tolgoi mine, the country's mining minister said, delaying first copper shipments.

The dispute could heighten investor concerns about the risks of mining in Mongolia and threaten Rio Tinto's plans to grow its copper portfolio to ease dependence on iron ore.

Metals traders have been closely watching whether Rio gets official approval to export concentrate from Oyu Tolgoi amid a shortfall in shipments from the Grasberg mine in Indonesia, run by Freeport McMoRan Copper & Gold.

The unlocking of ore shipments would increase supply in top copper consumer China and boost treatment and refining charges charged by smelters there.

Exports from the copper and gold mine were initially due to start on June 14, but were then postponed to June 21, before the Mongolian government told Rio to delay them again without setting a date. Uncertainty over the reasons for the delay has slashed the share price of other Mongolian miners.

Analysts had expected Rio to be able to start first shipments after elections which saw incumbent president, Tsakhia Elbegdorj, win a second term last week.

But Mongolia said it is still in talks with Rio to keep the money generated from Oyu Tolgoi in local banks and both parties also have disagreements over the disclosure of the mine's $8 billion sales agreements.

"The delay caused is because the OT LLC (Oyu Tolgoi) didn't seek approval from its Mongolian board on the sales agreements," Mongolia's Mining Minister Davaajav Gankhuyag said, according to a transcript of a June 28 press conference published on news portal

"Secondly, OT LLC is putting the sales income into offshore accounts. We asked them if they are not going to show us the agreements, they must process its transactions through Mongolia-based banks," the minister added.

It was not immediately clear how the two parties plan to sort out their differences.

Mongolian government officials could not be reached for comment. An Oyu Tolgoi spokesman in Mongolia and a Rio Tinto spokesman in Melbourne were not immediately available to comment.

Sources with knowledge of the matter say the 2009 investment agreement for Oyu Tolgoi allows Rio to choose where funds are kept.

Rio Tinto, operator of the mine, owns a 66 percent stake in the mine through its subsidiary Turquoise Hill Resources Ltd , while the Mongolian government owns the remainder.

Copper accounted for 13 percent of Rio's revenues for the half-year ended December 2012, while iron ore made up 46 percent, according to Thomson Reuters data.


President Elbegdorj has said Mongolia should have greater control of Oyu Tolgoi, which will account for almost a third of the nation's economy once in full production.

Mongolia's battle with Rio to keep the Oyu Tolgoi mining revenues at home comes amid a rising deficit, a weakening currency, high inflation and a gloomier outlook for commodities demand. A weaker currency could hamper its ability to pay back the $1.5 billion worth of government bonds issued last November.

For Rio and other investors, however, volatility in the Mongolian tugrik pose a major currency risk, with few hedging options.

The tugrik fell 14 percent against the dollar in 2010, before swinging back up 12 percent the following year. It was flat in 2012 and has gained 4 percent so far this year.

Moves by the government to briefly freeze bank accounts of Rio and Canada's SouthGobi Resources have also added to investors' jitters, analysts said.

"The government's request that Oyu Tolgoi revenue stay in the local banking system is a non-starter, given the system's poor credit rating," Nick Cousyn, Chief Operating officer at BDSec, an investment bank in Mongolia, said in a note to investors.

"Furthermore, it was only a few months back when the government froze OT's bank accounts, over a tax dispute."

Moody's and Standard & Poor's both downgraded their outlooks on Mongolia to negative in April. Moody's said in its report that the country's banking system has high loan concentrations, weak risk-monitoring systems and regulatory framework.

Link to article


BDSec: OT misses concentrate shipment deadline, Are TRQ shareholders facing dilution?

July 1 (BDSec) --

OT Misses Concentrate shipment deadline:

Those who are on our Daily Local Mongolian News distribution, already knew that Oyu Tolgoi was likely to miss their concentrate shipment deadline, which was slated for the End of June. As part of the announcement over the weekend of a bridge loan from RIO, TRQ updated investors saying "Shipping will begin as soon as the Mongolian Government indicates its support for Oyu Tolgoi to do so." These comments contradict those that Minister of Mining Gankhuyag made during a press conference last Thursday, which we translated from Mongolian to English and are as follows:

      Mining Minister D.Gankhuyag stated that, according to the international news, it has been inferred that the GOM intervenes the copper export of OT and resulted the delay, which is not true. The export delay is due to OT, itself. OT hasn't presented product trading agreement of 8 billion USD worth of copper to its Board. In accordance with the Company Law of Mongolia, large amount of agreements must be approved by the Board. But, the trading agreement hasn't been presented to the 3 Board members of Mongolian side.

      Secondly, OT plans to transfer the revenue from the export to its offshore account that is tax-free. We (GOM) insure that, in case the trading agreement is not presented to the Board members of Mongolia, the trading revenue must be transferred through one of the commercial banks of Mongolia.

      Export delay of copper is harmful to both OT and GOM. We must agree with each other on win-win situation. We expect, even though OT would take international standard as its benchmark, position of GOM shall also be considered.

      The minister also mentioned that sales revenue was not clearly mentioned in the Investment Agreement.

At the moment, the two sides appear to be at an impasse, since the Minister's comments also contradict what RIO spokesman Bruce Tobin recently said: "Oyu Tolgoi was ready to start its first shipments of copper concentrate from its Mongolian mine and all necessary permits to do so have been received from relevant authorities. "However, plans to start shipping on Friday, 21 June have been postponed at the request of the government of Mongolia," (Source: Al Jazera).

Since we have no intention of inserting ourselves into the middle of this dispute, we will let the above comments stand for themselves. It remains our opinion the situation will be resolved soon, as mountains of concentrate are just sitting at Oyu Tolgoi waiting to be sent to China and the status quo is not an option for either party. Furthermore, $4B in project finance stands ready to be deployed into Mongolia's economy once concentrate begins to ship and the GOM gives its approval.

Are TRQ shareholders facing dilution?

Over the weekend, it was announced TRQ had to obtain bridge financing for an amount up to $225M to make a cash call at Oyu Tolgoi, which is due tomorrow, July 2nd. TRQ has until August 12th to repay the bridge loan, or RIO will convert any outstanding amounts to TRQ equity at what could be a substantial discount from current levels. The conversion would be at 85% of the 5 day VWAP, which would presumably be the last 5 days leading up to maturity. The timing and form this financing takes should be a wakeup call for TRQ shareholders.


One has to ask how TRQ management puts themselves (and shareholders) in a position where they need last minute bridge financing for a cash call they've probably been aware of for quite some time? The credit markets were wide open until very recently, in fact high yield debt hit all-time lows in early May. Investors should probably begin to ask TRQ management (and themselves) how much exactly does TRQ owe RIO and when are future maturities? The timing of this announcement could not be worse, as a dispute exists with the GOM over concentrate shipment, putting TRQ at the mercy of RIO to dictate terms most beneficial to them. A 15% discount on TRQ equity for a loan that is less than 45 days seems a punitive price to us.


Since the price RIO would pay for TRQ equity (assuming conversion) is based on 85% of the 5 day VWAP leading up to maturity, the prospect of a lower share price (hence greater dilution) should not be ignored. It has long been speculated that RIO's true intentions are to see TRQ shares lower, so they can pick up more of OT's combined economics on the cheap. This move will only give credence to that belief and brings into question how independent TRQ management and the company's Board of Directors truly are. Was there a competitive process in deciding on this financing? While dilution relating to this loan would be modest in the event of conversion, is there more to come if TRQ needs to raise more capital?


With the election over, the GOM has the political cover to get OT back on track, which we suspect will happen sooner vs. later. The GOM's request that OT revenue stay in the local banking system is a non-starter, given the systems poor credit rating, which Moody's has at B1, outlook negative. Furthermore, it was only a few months back when the GOM froze OT's bank accounts, over a tax dispute.

The Investment Agreement explicitly states that Oyu Tolgoi may deposit proceeds in a country of their choosing and we suspect the syndicate behind the $4B in project financing may insist on this provision.

The bigger question at this point for us, is whether TRQ management has a coherent strategy to create shareholder value that doesn't involve selling more equity to RIO? Why didn't they access credit markets which were wide open for all 2013 (until very recently), instead of having to resort to a potentially dilutive and expensive bridge loan from RIO? If TRQ has more capital calls on the horizon, will they need to reorganize their capital structure at the expense of TRQ shareholders?

Until these questions are answered, TRQ shareholders not only need to be wary of the politics surrounding Oyu Tolgoi, but also how TRQ management will deal with its cash burn and capital structure until the company becomes profitable.

TRQ shareholders deserve more than expensive, last minute and potentially dilutive deals with RIO, if they are to realize the long term benefits from investing in Oyu Tolgoi.

Link to report


Haranga Resources Appoints New Non-Executive Director

July 5 -- Haranga Resources Limited (the Company, ASX:HAR) is very pleased to announce that Mr Amarbaatar Chultem has joined the Board of the Company as a Non-Executive Director.

Mr Amarbaatar Chultem is a Mongolian citizen and a highly successful businessman with more than twenty years of experience in the investment, finance, trade, and real estate sectors. Mr Amarbaatar Chultem is currently the Chairman of Mongol 999 National Consortium, which includes 2,000 Mongolian companies and he is also a major shareholder and Chairman of 30 small and medium sized companies.

Mr Amarbaatar Chultem's extensive in county expertise and established networks will greatly contribute to and enhance the Company's strategy to successfully fund and develop its Selenge Iron Ore Project in Mongolia.

The Directors of the Company welcome Mr Amarbaatar Chultem to the Board of Haranga Resources.

Link to release

Link to Initial Director's Interest Notice of Amarbaatar (30 million ordinary shares or 12.41% of HAR & 15 million options at 20 cents)


Newera: Ulaan Tolgoi Project Joint Venture Formalised

July 8 -- Newera Resources Limited (ASX: NRU) is pleased to advise that it and its joint venture partner, CNMN Co Ltd of Ulaanbaatar, Mongolia have executed a formal Joint Venture agreement covering Mongolian Exploration Licence 12323X – "The Ulaan Tolgoi Project".


In March of 2013, Newera entered into a Binding Memorandum of Understanding ("MOU") to work towards completing a formal Joint Venture agreement covering an Exploration Licence in the South Gobi region of Mongolia.

The project is designated the Ulaan Tolgoi project.

Newera had for some time been searching for a second prospective Mongolian coal exploration project where geology, coal prospectivity, distance to markets (China), proximity to transport pathways and the quality of coals already known to exist in the South Gobi sub-basins are seen as the major attractants.

Project Highlights:

Link to release


Ulaanbaatar Rents to Jump as KFC, Cinnabon Enter, Kupperman Says

By Michael Kohn

July 4 (Bloomberg) Commercial real estate rents in Ulaanbaatar will more than triple within five years as increases in per-capita incomes lure international companies, said Harris Kupperman, who runs a fund that invests in Mongolian properties.

Rental prices for the capital's main commercial strip, Peace Avenue, will top $100 per square meter per month by 2018, up from as much as $30 currently, said Kupperman, the chief executive officer of Canadian company Mongolia Growth Group (YAK), the only non-mining internationally listed company that does business in Mongolia.

Real estate prices in the capital surged as the economy reached double-digit growth driven by a boom in coal and copper mining. That prompted firms such as U.S. food companies KFC Ltd., Cinnabon International Inc. and Round Table Pizza Inc. to open shops this year, joining luxury outlets including LVMH Moet Hennessy Louis Vuitton SA (MC) and Giorgio Armani SpA.

"It starts with food and beverage, but eventually you are going to have more retail, too," Kupperman, 32, whose company owns retail space in the Peace Avenue business corridor, said in an interview in Ulaanbaatar July 3. "You get 10-year leases signed by high-quality tenants and they add value to the property. They pay their rent on time, so it increases the value, and they tend to pay above market for top locations."

Kupperman's Toronto-listed firm has invested $40 million in storefront properties, office buildings and redevelopment sites since it set up shop in February 2011, and makes $200,000 a month in revenue from these properties, he said.

Peace Avenue

Retail space on Peace Avenue costs $2,500 to $3,000 per square meter, Kupperman said, adding that prices could reach levels seen in Almaty, the biggest city in Kazakhstan, where prices range from $10,000 to $30,000 per square meter.

Mongolia Growth plans to spend as much as $500 million over the next decade on developing high-end buildings on the commercial strip, he said.

Kupperman said he remains "bearish" on downtown office space. Grade-A rents in the area have surged to $70 a square meter from around $45 a square meter three years ago, Alex Skinner, the head of Real Source Inc., an Ulaanbaatar-based property consultancy, said.

The central business district contains several high-rise glass towers that house most of the big international firms doing business in the country. Rio Tinto Plc (RIO), the world's second-biggest mining company, which is building the $6.6 billion Oyu Tolgoi copper and gold mine, has on office there.

Retail Focus

"There is a whole lot of supply; it's going to hurt prices in terms of rents," Kupperman said, adding that prices in the district could fall to $30 to $40 per square meter within two years.

Instead, Kupperman said he was sticking to areas where retailers are opening shops because of the growing purchasing power of Mongolian consumers. Citizens, who owned flats inherited from the Soviet-era, have become millionaires simply by holding onto their ground-floor apartments, coveted as valuable assets because they can be converted into shops.

Apartment prices prices across Ulaanbaatar have increased 23 percent per annum since 2005, Real Source's Skinner said. In prime locations such as downtown, a Soviet-era apartment that in 2005 would have cost around $337 per square meter, now is at least $2000 a square meter, said Skinner.

A new central bank policy that allows homeowners to refinance their mortgage loans down to 8 percent from 15 percent to 20 percent and extend the loan period to 20 years from an average of five years was helping boost consumer power, Kupperman said.

"This will reduce payments by 70 to 80 percent," he said. "It is going to put a lot more money in the economy. With more money, they are going to go shopping, which will be good for retail and good for commercial real estate."

Link to article


Centerra Gold Announcement

TORONTO, ONTARIO--(Marketwired - July 3, 2013) - Centerra Gold Inc. (TSX:CG) regrets to report that on July 3, 2013, a light duty vehicle operated by a Boroo Gold Company contract employee was involved in a single vehicle rollover at the tailings facility at the Boroo Mine site in Mongolia. The driver, and sole occupant of the vehicle, was fatally injured in the accident. The local government authorities and relevant regulatory bodies have been contacted.

We are deeply saddened by this event and extend our condolences to the family.

Link to release


MIG: Annual Results

July 3, Mongolia Investment Group Limited (HKEx:402) --

Link to report

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Local Market


July 5 (MSE) In accordance with the decision of Chief Executive Director of Mongolian Stock Exchange on 2013 July 1st, the companies which have not fulfilled their obligation to pay annual membership fee since 2012 have been suspended to participate in securities trading.

As of today, there are 29 broker dealer companies that have continuously following the contract regulations of the MSE and accordingly fulfilling all the client requirements. The companies are:

1.    TDB Capital LLC

2.    Golomt Securities LLC

3.    Blue Sky Securities JSC

4.    Hunnu Empire LLC

5.    Skykhan Capital LLC


7.    Tavantolgoi Khishig LLC

8.    Secap LLC

9.    Grandline LLC

10.  Eurasia Capital Mongolia LLC

11.  SG Capital LLC

12.  BDSec JSC

13.  United Securities LLC


15.  Daewoo securities Mongol LLC

16.  Lifetime Investment LLC

17.  Tengri Securities LLC

18.  Tushig Trust LLC

19.  Tenger Capital LLC



22.  London Asia Capital Mongolia LLC

23.  Munkh Ogtorgui LLC

24.  Asia Pacific Securities LLC

25.  Zuunii Garts Securities LLC

26.  Tuushin Invest LLC

27.  Gatsuurt Trade LLC

28.  Goviin Noyon Nuruu LLC

29.  Rescap LLC

Link to release




TDB Capital Becomes First to Offer Online Trading Services

July 2 (MSE) TDB capital is becoming first mover by introducing the service which will enable Mongolian securities market to level up to the international standards. With this service clients are able to place securities orders, check account balance from anywhere in the world, any time through internet connection and without any charges.

Once clients are subscribed to TDB Capital's Internet order service, the following services are offered to them without any charges:

·       Account balance check

·       Transaction records

·       Placing order for securities trading

·       Account analysis

·       Graphic analysis

Link to release


NatSec MSE Trading News: Top 20 -0.14%, Turnover 6.3 Million

July 4 (National Securities) The TOP-20 Index declined by -0.14% to  14,359.85.  Just 7 companies traded a combined volume of 6.3 million MNT. The intra-day volume was 1,497 shares. The broker-dealers strike continued into its 4th day.

3 share prices increased, 3 share prices decreased and one share was stable. Coal miner Aduunchuluun (ADL), was  the biggest gainer and volume leader, rose +2.0% to 2,550 MNT. 647 shares were traded with a value of 1.6 million MNT. HBOil (HBO) climbed by -0.58% to 347MNT. 

The worst performer was Gobi (GOV), down by -3.92% to 4,900 MNT. Followed by Bayangol (BNG), which was down -0.99% to 50,000 MNT. 

Please click here to see the detailed news

Link to update


Montsame Stock Exchange News: Top 20 +0.20%, Turnover 33.7 Million

Ulaanbaatar, July 5 /MONTSAME/ At the Stock Exchange trades on July 5, a total of 60 thousand and 871 shares of 16 JSCs were traded costing MNT 33 million 742 thousand and 891.55.

Rates of shares of five companies increased, of two decreased and share price of nine were stable.

The total market capitalization was set at MNT one trillion 440 billion 861 million 656 thousand and 730. The Index of Top-20 companies was 14388.41.

Link to article


Mongolian Stock Exchange market potential of 45 billion USD

July 7 (UB Post) The Mongolian Revised Securities Market Law will come into effect on January 1, 2014 and legal organizations are currently working to reform related laws and regulations before its arrival. In the first stage, 16 packs of regulations on special operation permits will be discussed at the meeting of Financial Regulatory Commission by August 1.

The law's initiators stress that the Mongolian stock exchange market, valued at 1.4 trillion MNT as of July 2, will be able to grow, as well as its convertibility, by introducing reformed and revised regulations in Mongolia's securities market.

According to one calculation, the Mongolian stock exchange market has the potential to reach 45 billion USD depending on Mongolia's practical possibility of securities market growth.

Today, 20 major with high market value business entities registered on the Mongolian Stock Exchange comprise 86 percent of Mongolia's securities market value. But after the revised regulations are launched, the Mongolian stock exchange market's value could rise by five billion USD if some of the domestic and major companies, such as MCS Group, Mobicom or Tavanbogd, release their shares.

The revised law permits companies' registration at more than one stock exchange. Therefore, if mining companies such as the Mongolian Mining Corporation, Southgobi and Mongolia Energy Corporation, which operate in Mongolia but are registered on foreign stock markets, place their shares in Mongolia's stock market, the nation's stock market value has the potential to rise by 15 billion USD.

What's more, the value may rise by 15 to 20 billion USD if Tavan Tolgoi and Oyu Tolgoi release their shares on Mongolia's stock market. Apart from that, state-owned MIAT Mongolian Airlines and Erdenet Mining Corporation are estimated to increase the market value by four billion USD.

Representative of the Mongolian Stock Exchange thus stressed that Mongolia's stock market range, which tripled in the last four years, will be able to expand up to 30 times.

Link to article


BDSec Initiation: HBOil (MSE: HBO) - A First Movers Advantage Into The Last Frontier

Waste Oil Recycling

Price target (MNT) 8160; Close (MNT) 335.71

July 1 (BDSec) We are initiating coverage of HBO with a Buy Rating and a 3-5 year price target of 8160 MNT per share, a valuation nearly 2400% higher than current levels.

In a move that made international news, HBOil JSC (MSE:HBO) announced on June 18th that they had agreed to acquire, in 2 separate transactions with Singapore's Ninox Energy Limited ("NEL"): (i) 20% of the shares in the capital of KOEC International Inc ("KOECII"), and (ii) 51% of the shares in the capital of Korex Ltd ("Korex"). For avoidance of doubt, and as publicly announced by HBO; HBO is effecting the aforesaid transactions, through the acquisition of shareholdings in NEL's intermediate holding companies, namely; Ninox Hydrocarbons (L) Berhad, and Blacktip Energy Inc.

      KOECII is presently, and will continue to be post-completion of transaction by HBO, 80% owned by Korea Oil Exploration Corporation ("KOEC"); the national upstream oil company of the Democratic People's Republic of Korea ("DPRK" or "North Korea"). KOECII, by the virtue of its founding documents, is the first nationally owned integrated oil company in DPRK, including the authority and rights for: exploration, development, and production of hydrocarbons across the entire Onshore territory of DPRK; refurbishment and expansion of oil processing and refining capacity within DPRK; import of crude oil into DPRK; import and export of refined petroleum products into and from DPRK; and investment in ancillary infrastructure and logistics, in partnership with foreign investors, on BOOT basis.

      Korex, post-completion of transaction by HBO, shall continue to be owned as to 49% by NEL. In May 2010, Korex executed the Production Sharing Contract ("PSC") with KOEC, for the entire offshore territory of DPRK in the Korean East Sea. The PSC covers approx. 51,000 SqKm; encompassing shallow-water, deep-water, and ultra-deepwater areas of the northwest quadrant of the East Sea (also internationally known as the Sea of Japan). In July 2012, Korex completed a 2D seismic survey over 5,300 Km of the East Sea PSC, mostly focused on blanketing the Gulf of East Sea with sufficient detailed seismic that could further enhance and high-grade the company's pre-existing (defined by 1980s and 1990s vintage seismic acquisitions and 2 wells drilled by the Soviets that had significant shows of both oil & gas) inventory of 25 prospects and leads.

-       HBO's deal represents both; the 1st-ever MSE listed company making an overseas acquisition, and Mongolia's 1st-ever, foreign E&P asset acquisition, public or private.

-       Mongolia has the best diplomatic relations with the DPRK of any country in the world, while at the same time being Asia's purest form of democracy.

-       We view this deal as evidence that North Korea may be "opening up", which would have profound implications for Mongolia, HBO, North Asia, and the world at large.

-       Mongolia does not presently have domestic refining capacity of its own and currently has limited oil production, with ~90% of its fuel imports coming from Russia; it is critical that Mongolia gains access to diversified sources of refined petroleum products, simply as a matter of national security.

-       Our rating, estimates, and price target assume the completion of the acquisitions by HBO, which is due to close in late July or early August 2013.

Link to report

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231.3 million USD of FDI invested in Mongolia in May

July 7 (UB Post) This May, foreign direct investment (FDI)  totaling 231.3 million USD was invested in Mongolia an increase from the previous month's FDI.

However, FDI in 2013 is still lagging behind last year's numbers. According to preliminary performance in May, FDI fell by 36 percent compared to May, 2012. As of May, 2012, FDI of 1.8 billion USD was invested in Mongolia, while this year, FDI in Mongolia only reached 1.2 billion MNT (Mogi: surely this in USD) since January 1.

Analysts believe the increase occurred as an amendment on the Regulation of Foreign Investment in Business Entities Operating in Sectors of Strategic Importance was made into law.  Though FDI slowed, economists say that according to statistical indicators, it will recover in the near future.

Mongolia's investment in foreign countries was equal to 4.9 million USD as of the first half of this year.

Link to article


Mongolia's Balance of Payments Report for First five Months

July 2 (Bank of Mongolia) --

Link to release


BoM holds FX auction

July 2 (Bank of Mongolia) On the Foreign Exchange Auction held on July 2nd, 2013 the BOM has received bid and ask of USD and CNY from local commercial banks and refused all the offers

On July 2nd, 2013, The BOM has sold 95 million USD for Swap agreement and refused the offer for Forward agreement from local commercial banks.

Link to release



July 3 (Bank of Mongolia) Regular auction for 12 weeks maturity Government Treasury bill was announced at face value of 81 billion MNT and each unit was worth 1 million MNT. Face value of 81 billion /out of 167.00 billion bid/ Government Treasury bill was sold to the banks at discounted price and with weighted average yield of 7.49%.

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BoM issues 1-week bills

July 5 (Bank of Mongolia) BoM issues 1 week bills worth MNT 100 billion at a weighted interest rate of 10.5 percent per annum /For previous auctions click here/

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First 13 Days of New Mortgage Program

July 8 (Cover Mongolia) Bank of Mongolia announcement dating July 5 (in Mongolian only) reports that commercial banks have received requests to convert old mortgages worth 745 billion. Banks accordingly have converted 305.1 billion of these mortgages of 10,704 citizens to 8%.

134 billion worth of new mortgage requests were received and 44.4 billion out of these of 927 citizens were issued with new rates.

Link to release (in Mongolian)


"Ipotek 2013" exhibition scheduled in August

July 7 (UB Post) Following the launch of the Ipotek Housing Loan on the first of the month, Green Building Council Mongolia is set to hold an "Ipotek 2013" exhibition between August 2 and 4. The exhibition will deliver comprehensive and reliable information about apartment standards to those eligible for the loan, as well assist them in making smart decisions.

A housing loan interest rate of eight percent was launched by the New Government for Changes to support citizens with a modest of income, covering most of Mongolian society. The interest rate reduction is considered the first step to creating a pleasant environment in Mongolia where its citizens enjoy favorable and worry-free lives.

As the number of citizens willing to move in to apartments has radically increased, information regarding apartments qualified for the Ipotek Loan is in demand.

Registration for construction companies to participate in the exhibition is still underway.

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Few Roads Leading to China Tell Tale of Mongolia Fears

By Yuriy Humber and Michael Kohn

July 4 (Bloomberg) Mongolia has a China complex.

Some 800 years after Genghis Khan forged its tribes into the world's largest empire, Mongolians are awakening to lucrative -- and unsettling -- realities.

Lying beneath Mongolia's storied lands are an estimated $1.3 trillion in mineral resources that could redraw global commodity maps, denting Australia's coal, Brazil's iron ore and Chile's copper exports. A nation whose cultural icon remains the nomadic herder could become the next Kuwait and Qatar, examples of lightly populated countries grown luxuriously rich on the world's thirst for commodities.

A week-long reporting swing through boomtowns and border crossings and interviews with dozens of Mongolians from coal moguls to dairy herders shows a nation torn -- between the lure of prosperity and feared degradations of development; between traditional ways and a booming economy that threatens to change Mongolia's cultural face; and, not least, between distrust of and a need for China, its biggest trading partner.

Consider the anxieties of Nyama Tegsjargal, a one-woman diaper monopoly who has grown comfortably wealthy trading Chinese-made baby goods in Dalanzadgad, a windswept town of 20,000 rising out of the disorienting vastness of Mongolia's southern Gobi Desert.

In a country of about 3 million people where almost 30 percent of citizens still reside below the World Bank's poverty line, Dalanzadgad is thriving off Mongolia's China trade, with billions having poured into development of the nearby gargantuan Tavan Tolgoi coal basin to the east and the Oyu Tolgoi copper field to the southeast.

Price of Prosperity

A provincial capital 120 miles (190 kilometers) north of the China border, Dalanzadgad once drowsed along on a two season economy when herders sheared goats and sold cashmere in spring and slaughtered animals for meat in autumn. Now it has taxi service, a shopping mall and a burgeoning merchant class. Disposable diapers, three years ago a luxury item, have become a "daily essential," Tegsjargal said. She has opened two shops, built a two-story house and drives a late model SUV.

And yet she frets about the reliability and motives of the very country that is making her prosperous. The Chinese in general maintain "chauvinistic" attitudes toward Mongolians, she said as she cut up lengths of blood sausages to serve to guests. Moreover, "you just don't know if there will be an epidemic outbreak or China will shut the border" because of recent economic tensions with Mongolia, according to Tegsjargal, a mother of three.

World Leading Growth

The core of Mongolia's unease is a pervasive sense that China sees Mongolia as little more than a than a vast open-pit mine to feed its growth ambitions and the consumerist desires of China's 1.3 billion people -- this, coupled with a wariness that the mining companies that have come to suck up these resources mostly on China's behalf will leave behind an environmental mess.

The upside of development is unquestionable. The commodities bonanza propelled the nation to a world-leading 17.5 percent growth rate in 2011 and a respectable 12.3 percent last year. Yet for all that, "Mongolian attitudes toward China remain negative," said Jack Weatherford, best-selling author of "Genghis Khan and the Making of the Modern World," who spends about half of his time in Mongolia.

That may be because Mongolians are also keenly aware that not all of their riches are buried beneath the land. The country, said Davaa Gala, the Mongolian-born conservation director of the Arlington, Virginia-based Nature Conservancy, is home to some of the most pristine deserts on earth.

Herds on the Steppes

Herds of Mongolian gazelles numbering as many as 250,000 animals still roam the steppes, even as 24-hour coal convoys -- bumper-to-bumper lines of 100-ton trucks grinding across the dusty plain -- cross and trample ancient migration paths used by gazelles and nomadic herders alike.

Last year, in consultation with the Conservancy, the government put aside 3.7 million-acres (1.5 million hectares) of protected areas, including a single 865,000-acre tract on its fragile Eastern Steppes. Still, that's a pittance of Mongolia's 600,000 square miles of which 16 percent is already leased to mining and other interests and another 26 percent has been designated for future development, according to Nature Conservancy data.

Gala, who grew up in a herder family in western Mongolia, applauds the conservation efforts. The stakes in all this are enormous. "If we don't manage all this change our culture will be lost, our environment will be lost. And the future generation will pay the cost," he said.

Awash in Coal

The Coal Rush is an example.

Mongolia is awash in coal. The Tavan Tolgoi basin alone is thought to hold 6.4 billion metric tons. China wants and needs that coal and some Mongolian entrepreneurs see opportunity to deliver it.

One result is Jambaljamts Odjargal's high-speed coal highway. The other is the Tsagaan Khad coal station and the blight upon the land that it is creating.

As seen from the seat of a speeding Toyota Landcruiser about 12 miles from the China border, the coal station rises up, black mounds against a parched blue sky. It's the surrounding landscape that environmentally-concerned Mongolians like Gala have come to decry -- a vast swath of coal-dust-cloaked desert blasted by winds whipping clouds of dark ash into the air. Pollution had grown so bad, in fact, that the government last week decided to shut down Tsagaan Khad.

The road is something else, a 159-mile straight-arrow ribbon of mostly smooth asphalt that streaks from Odjargal's Tavan Tolgoi coal operation to Tsagaan Khad. There, most Mongolian trucks dump their loads and Chinese trucks pick them up, hauling the fuel to the Gashuunsuukhait border point and into China.

Paved With Frustration

Odjargal's road is paved in part with frustration. Astonishing as it may seem, Mongolia, until two years ago had no paved roads to China -- another sign of wariness toward its largest trading partner.

Many new roads are on the drawing board yet the pace of building has been slow. Mongolia is backing a private group's plans to build a $3.5 billion north-south toll road that would stretch 617-miles from the Russian border to China. The government also has pledged another $5 billion for 5,000-mile expansion of the nation's highway system over the next decade.

The Chinese have expectations. By Mongolian government estimates, they have plowed at least $3.6 billion into Mongolia mining and other ventures in the past two decades. In 2011, China accounted for almost 86 percent of the nation's $4.8 billion in exports and about 43 percent of its $6.6 billion in imports, according to U.S. government figures.

Road to Riches

Tired of waiting on government roads, the media-shy Odjargal and his Mongolian Mining Corp (975). decided to pave their own way to their Chinese clients. Opened in October 2011 at a cost of about $150 million, the highway -- for Odjargal at least -- is a literal road to riches since he has become among the nation's wealthiest people.

The road has paid more than economic dividends. MMC is Tavan Tolgoi's largest operator and moving its trucks onto the highway has cut down traffic carving up the desert on impromptu roads while improving fuel efficiency and reducing dust, pollution and accidents.

It's also sped up MMC's volume. The company shipped 5.6 million tons of coal products last year, about double that of its two main rivals, and mostly to China. "If there is an accident or breakdown it can take three days to get to the Chinese border on a dirt track, but you can do a return trip in less than one on the paved road," Suren Toroo, an entrepreneur who set up a trucking firm in the area three years ago, said.

Stuck in Ruts

The rub is that MMC charges its rivals the equivalent of $280 a trip to use its road and most decline to pay it. So the desert continues to be abused -- and drivers stuck on dirt tracks tell tales of constant woe.

Adiyabazar Nyambayar, who drives for a Chinese transport company, is one of them. Over a lunch of thick fried noodles and mutton at a makeshift roadside diner serving the trucking trade, he said his life is one of little sleep, constant flat tires, overturned trucks, and months on end without seeing his wife in Ulaanbaatar, the capital 390 miles away.

He makes eight return trips to China every four weeks and only one thing keeps him on the coal road -- in 30 more trips, he'll own his leased truck. After that he's quitting, diverting his truck to routes that take him closer to home.

In his job, Nyambayar spends a lot of time with the Chinese. In a reflection that attitudes may be moderating, he said, "The Chinese are OK." He often has his truck repaired south of the border. "You pick up a few words. Gestures work."

Angling for Detour

For Gala, this is part of the way forward. "More interaction between the people of China and of Mongolia will definitely help to improve trade, improve personal relations," he says.

While businessmen like coal magnate Odjargal see new roads and rail to China as the fastest path to Mongolia's mineral trade, ex-Wall Street banker Chuluunkhuu Ganbat wants those minerals to take a detour.

"Mongolia should not become a commodity appendage of China," said the tall, broad-shouldered Ganbat in an interview in the conference room of his central Ulaanbaatar office.

Ganbat returned from the U.S. four years ago to help make Mongolia more than an appendage. Now his firm Liberty Partners is charged by the government to bring together business, investors, engineers and politicians to erect a $10 billion industrial hub in the middle of the desert, 280 miles southeast of Ganbat's office.

Bold Plan

The location is Sainshand, an eastern Gobi town of 20,000 that nonetheless boasts Mongolia's first public fountain outside the capital. Sainshand is enjoying a tourism revival as hordes of pilgrims pass through on the way to a newly restored nearby Buddhist monastery.

If Ganbat's 10-year plan for Sainshand comes to fruition, the town will become a booming industrial hub that will include coal-coking plants, a copper smelter and factories to make clothes, iron pellets and cement. This, he says, is far more lucrative for Mongolia than simply gouging out raw materials and hauling them to China.

For the pleasure of hosting the manufacturing hub, Sainshand has offered its dump site on the edge of the town. The garbage is in the process of being moved.

The town's biggest selling point is its location as the penultimate stop of the Trans-Mongolia Railway before it reaches the China border. The success of this plan depends on upgrading and expanding Mongolia's rail system to feed the complex, which the government -- with its ever-wary eye on China -- is planning to do. The sticking point is what rail standard to adopt.

Two Track

Mongolia's current rail system, spanning about 1,100 miles, was built by Soviet engineers in the last century to ship Mongolian goods to Moscow long before China awakened as an industrial power. As such, Mongolia adopted the Russian rail standard. Chinese trains, in contrast, run on so-called standard gauge tracks used throughout most of the rest of the world -- meaning they are 85 millimeters (3.3 inches) narrower.

In 2010, the government resolved to build all new tracks using the Soviet standard. So while a northbound train from Mongolia can pass seamlessly into Russia -- with which Mongolia now has little trade save gasoline imports -- it wouldn't be able to move along the tracks of Mongolia's best customer.

Higher Costs

Mongolian coal shippers fear that having to offload Mongolian coal cargoes onto Chinese trains could add $3 a ton to their costs, driving China to markets in Russia or Australia. While the Mongolian government is said to be reconsidering its decision, Yaichil Batsuuri, CEO of the country's largest state-run mining company, Erdenes TT, prefers not discuss it at all. "This is a political issue," he said in an interview.

In the world of Mongolian politics, a seamless rail line to China is seen as a risk. Mongolians have long memories and a keen sense of history, according to Weatherford, noting that Inner Mongolia, a vast, dragon shaped swath of land on their southern and eastern flank, now belongs to China. Mongolians have long feared that they would suffer the same fate as Tibet - - be invaded and absorbed by China.

"The general attitude in Mongolia has been for many years that as soon as the Chinese take back Macau, Hong Kong, and then Taiwan, they will come for us," said Weatherford. "Recent Chinese statements about the various islands in the surrounding sea only increase the suspicion."

He added: "The Mongolians recognize that the railway would not slow the Chinese. It's the symbolism that matters."

Road Rage

For ordinary Mongolians, the rewards of trading with China, even if lucrative, don't come without struggle.

At 7:10 a.m. on a recent day, the sun golden on the surrounding desert, Zamyn-Uud, a rail and truck stop on the China border, pulses to life. The occasion: the arrival of the Ulaanbaatar overnight train.

Twenty six grass-green wagons clank to a halt and Mongolians from all over the country jump from the train and race past the station building and central square into an adjacent car park. Wind gusts strong enough to topple wheelbarrows are sandblasting the tea-sellers on the platform.

The racers seem oblivious, sprinting like inmates sprung from prison toward an awaiting phalanx of taxis, cars, Jeeps, minivans, buses and motorbikes, all with engines revving. The rule is simple: agile traders who can find instant rides to the border crossing a mile and a quarter away will be first into Erenhot, a Chinese outpost that has grown from 8,000 people to close to 100,0000 in 20 years based on trade with Mongolia. Those who don't will find themselves at the back of a tediously slow, mile-long queue.

Demolition Derby

Two middle-age women wade into the fray, waved by a driver into his dilapidated Soviet-era UAZ-469 truck already brimming with traders sitting on their bags. This is impromptu demolition derby -- drivers gunning engines and roaring for the border, favoring the horn way more than the brake. Fares for this frenzied journey can run to 80 Yuan ($13) The fare falls to $3.25 for slackers at the end of the line.

At the crossing itself, organized anarchy seems to be the spirit. A penny wouldn't fit between the bumpers of the vehicles in line. Drivers lean from their cars, cursing each other with clenched fists. Smashed headlights, dented fenders, chassis as crumpled as foil wrappers -- all are trademarks of Zamyn-Uud vehicles.

Trucks bearing Chinese goods for Mongolia, notably cement and food, use this crossing, too; in fact, close to 70 percent of all Chinese imports to Mongolia go through this station. In return Mongolia sends iron ore, potash fertilizer, coal, and animal products, as well as aluminum cans and plastic bottles for recycling.

Marmot Pelts

Before this day is over, some 500 cars and close to 200 trucks will cross the border here, a number that can approach 1,000 on a peak day, says Demberel Zorig, 46, senior inspector of State Customs.

A paunchy man who constantly fiddles with his iPhone, Zorig says the border post is barely coping with the flows as is, never mind that his operation is also charged with stopping the flow of contraband that includes "white powder" favored by Mongolian hip-hop artists and marmot pelts smuggled by hunters.

Now there's talk of that $3.5 billion state-backed toll road running from the Russian border to Zorig's crossing.

At that point, "It's clear we'll need to go to 24-hours and increase staff," he said.

New Nomads

As to Gala's concerns -- whether unbridled development can coexist with Mongolia's traditional ways -- the answer for some is simply to upgrade the traditional ways.

The road north from Zamyn-Uud is emblematic of what Mongolians do in the absence of real roads. They make their own. A two hour drive, along ruts and mounds of a 50-meter-wide (160-foot-wide) track snaking through the desert, brings you to the summer home of Bazaar Ganbat and his wife, Luvsangomb Byambasuren. It's a ger -- the rounded, felt-covered movable tent that serves as home for the nomad.

The couple is a modern incarnation of nomadic herders. Both university educated, they own a truck, a motorbike, satellite television and a radio phone to chat with relatives in Washington D.C. and Los Angeles.

"A bank account? Sure, we have one," said Ganbat.

"We can even wire money to Ulaanbaatar over the mobile phone nowadays," chipped in Byambasuren as she churned tea in a large wok on a dung-fired stove.

Growing Prosperity

They don't consider their prosperity all that unusual. Almost all families living in gers these days have electric lighting and a TV, at least one motorbike and a car, they said.

"Life is getting better," Ganbat said as his wife cheerfully offered curd sweets and salty milk tea to visitors.

Which isn't the same as saying the nomadic life is easy.

The couple has been up since 6:30 a.m., the requisite time for milking their 12 cows. While their sheep and goat herds have grown to 700 head -- they are principally in the business of producing dairy products -- they have had to bring in relatives to help them manage them all.

Traffic dust is a chronic issue since the yogurts, clotted cream, milk, dry curd and butter they produce for sale require rigid sanitation. Weather is a constant struggle. Winter nights of minus 25 F are common and the heat can climb to 105 F in the summer. Frequent dust storms are a hazard of the spring months.

Storm Brewing

One such storm is brewing outside now. A desert landscape that resembles a series of golden, mogul-laced ski runs will soon be obliterated from vision.

Still, Ganbat and Byambasuren like this life. The truckers who ply this informal route aren't only good customers for their products -- they also make a popular milk-based vodka -- but have become friends. "Their kids already ask them when they'll drive by us next," Byambasuren said.

Meanwhile, business is brisk. Dairy orders from Zamyn-Uud and Sainshand have never been better, Ganbat says, and the couple is even considering opening a shop in one of the local towns. Plans are also afoot by the government to pave the rutted track that runs a few hundred yards from their ger.

"When the road comes it will increase sales and help move goods faster and further," Ganbat said, adding that the paved road is due to be fitted with special tunnels to allow animals such as sheep and goats to cross to pastures on the other side.

And cows? "Cows don't need to cross the road," Ganbat quips.

Road Transformed

When another gale-force gust rattled the ger and sand whipped violently against the tent's felt walls, Ganbat pulled down on his Jeep-brand-emblazed cap and turned to the door. Outside, a chrome-color fog had cut visibility to less than five meters.

Ganbat and his wife headed out into the growing gloom to herd their cows to a more sheltered part of their free-range pasture.

The 136 mile road from Sainshand to Choir is a start-stop construction project, now mostly dirt but rapidly transforming into a modern two-lane asphalt highway. On a stretch outside of Choir (pronounced Choi-yer), a Chinese work crew steamrolls a section to create an embankment that allows for the placements of culverts under the road.

The purpose? Wildlife crossings meant to allow unhindered roaming of rare fauna such as black-tailed gazelle, Mongolian gazelle and wild ass.

"Previously people would be very happy if a road was paved," said Sanjaasuren Oyun, the country's minister of Nature and Green Development in an interview. "Now we say the road is good but please also put the crossings for wild animals."

Cold War Legacy

Choir has a sinister Cold War history. Home to the largest Soviet airbase in Mongolia, it was where the Soviets pointed some of their mid-range missiles toward targets in China. While it remains one of the poorest parts of the country, the new highway is bringing visible change. Seven gas stations have cropped up in a 1.25 mile stretch where the road bypasses the town.

"More businesses will come," said Yura Munkhbayar, a 47-year-old freelance driver who shuttles mining company engineers to work sites around the Gobi.

Drivers like Munkhbayar appreciate government efforts to add roads and help wildlife at the same time. What worries him is that many of the road contracts are falling to Chinese firms -- though he admits they often do a better job.

If the Chinese build all the roads, Munkhbayar reasoned, "all the money will flow out to China."

Nationwide Backlash

This isn't merely a provincial concern. Last year, a move by state-owned Aluminum Corp. of China Ltd. to take over SouthGobi Resources Ltd (SGQ). caused such a public backlash in Mongolia that the Chinese producer abandoned its efforts. The deal spurred Mongolia to pass a law that bars foreign state-controlled entities from buying control of local companies in resources, finances and telecommunications industries without parliamentary approval.

Even the gasoline produced in China with Mongolian crude that went on sale in the capital Ulaanbaatar in May is labeled "Mongol-93" to cloak its Chinese manufacture.

Mongolian leaders tend to brush such episodes aside as misplaced anxieties. "It's inevitable that we will be partners with our neighbors," said Luvsanvandan Bold, Mongolia's foreign minister in an interview after the Aluminum Corp. episode. Such controversies "should not damage relations," he said.

Wealth Sharing

The Chinese view is that Mongolian disaffection largely stems from the fact that not enough ordinary citizens have yet shared in the resource boom.

"As long as China pays competitive prices, there's no reason Mongolia shouldn't treat China as its top export market," said Lin Boqiang, director of China's Xiamen University's Center for Energy Economics Research in an interview. "Both countries can offer something the other side desperately needs, so I can't see any reason why the two can't get along well in the long term."

Tsagaankhuu Olonbayar is on board with that. Well, if the price is right. "There are so many Chinese in the town they aren't even foreigners anymore," he said.

Olonbayar is a stout man in fatigues and a t-shirt, dragging on a cigarette when he's not stroking his Vito Corleone mustache. A heavy steel chain dangles from his neck. Signet rings decorate the middle fingers of both hands.

The Chinese bring his town of Tsogtsetii opportunities, says Olonbayar, seated in a hotel restaurant -- owned by his sister -- where the bar features Pringles potato chips, German chocolates and Arkhin, a local premium vodka.

Coal Rush

Tsogtsetii, about 9 miles from the giant Tavan Tolgoi coal basin, is in the hot arc of the Coal Rush, tripling its population in the past three years as Chinese and others move in to work the mines, open sauna, massage parlors, and karaoke bars and venture into businesses from trading to restaurants. Olonbayar, who came here as a 12-year-old with his 15 siblings, has been able to double rents from last year on his four ger tents to 800,000 tugriks ($560) a month.

Tsogtsetii may prove to be more than a mere boomtown -- it may be a sign that Mongolians, coming to an understanding of their unexploited riches, are learning about the leverage they have.

"People are pretty tolerant here," Olonbayar said. "The Chinese come in and do what they need to do."

It helps, of course, if they have a guide.

Olonbayar, you see, is a man with a reputation for helping to facilitate this transnational commerce. It's no secret that Mongolian gangs roam this scrape of desert. Olonbayar, who mentions the fact that he's spent half his life in jail, said he's in a position to make sure that the Chinese and other non-local firms and the gangs get along.

An example: "There's this businessman who made money in Zamyn-Uud and he wants to set up in coal trucking here," explained Olonbayar. "He asked me to come in, make sure his drivers can load the trucks at the pits without running into problems."

He wouldn't say what such services cost but in the new Mongolia, "we call it mine guiding."

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Mongolia to close key coal artery to China for environmental reasons

July 3 (Platts) The Mongolian Ministry of Environment and Green Development has announced the closure of Tsagaan Khad, a coal customs stockyard on the Mongolian side of the border with China, citing environment damage from coal haulage, but the measure has yet to be enforced, a marketing executive at a local coal mining company told Platts Wednesday.

Although the ministry announced its decision in a statement Monday, market participants said the border remained open Wednesday and there were doubts on whether the policy had yet been officially sanctioned by other government bodies.

"On Tuesday, everyone was running normally," the miner said, adding that customs officers seemed unaware of the policy, and that it would effectively be business as usual until additional clarifications were received. A Beijing-based trader also confirmed that the border was still functioning on Wednesday

"It's not yet a government decision, but a ministry-level decision," the miner said. "It will happen sooner or later but we're not sure when."

The Tsagaan Khad stockyard is 23 km (14 miles) from Gashuun Sukhait/Gants Mod, the largest of two coal border crossings between the two countries, and the point of transit for coal from the Tavan Tolgoi coal formation. 

All coal going across this border currently goes through Tsagaan Khad, meaning the closure could effectively stop all exports at this crossing unless alternative measures are taken, the miner said.

One option, he said, would be for customs clearance to be made at mine stockyards, allowing exporting companies to continue to sell their material to China regardless of the potential closure of Tsagaan Khad.

Gashuun Sukhait/Gants Mod accounted for 62% of Mongolia's coal exports by value in 2012, according to Mongolia's Economic Research Institute, citing the Mongolian Customs Department.

Based on this data, and May metallurgical coal imports of 1.25 million mt, a closure could affect 35,000 mt of met coal daily, according to Platts calculations, taking into account the closure of the border on Sundays.

Regarding the likely impact of the measure on the metallurgical coal market, the Beijing-based trader said this would be limited. "If there's an effect, it will be temporary."

The closure would unlikely impact seaborne metallurgical coal prices. A Japanese coal trader also said: "If it is closed for more than one or two months, it could support domestic Chinese prices, but it won't be enough to bring prices up," he said.

Mongolia sold 19 million mt of metallurgical coal into China in 2012, making it the single largest contributor to China's imports that year.

But volumes declined in the first half of 2013, coinciding with weaker market conditions, and the land-locked country exported 5.3 million mt to China from January to May 2013.

The news is of greater importance for steelmaking metallurgical coal than for thermal coal, for which Mongolian January-May exports only amounted to 1 million mt.

Two Mongolian mining executives last week forecast Mongolian exports to China could reach 15 million mt in 2013.

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Mongolia To Have Policy On Green Development

ULAANBAATAR, Mongolia, July 6 (Bernama) -- The Minister of Environment and Green Development S.Oyun MP submitted Friday to the Speaker the draft Concept and Middle-Term Programme on Green Development, Mongolia's news agency, Montsame, reported.

These documents have been worked out by the Ministry with an aim at ensuring implementation of the "Green Civilisation" concept and programme having the purpose to develop the green development policy reflected in the 2012-2016 Action Programme of Government, the Minister said.

The Minister considers that realising the green development policy will give impetus for increasing the country's economic growth and reducing poverty rate in a way of managing the mineral resource more appropriately.

In addition, the minister said, the concept determines goals and purposes for the green development until 2030 based on present situation, chance and advantages, whereas the middle-term programme designs policy and economic methods to ensure these goals and purposes.

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Summary of the Fourth Round of Negotiations for the Japan-Mongolia Economic Partnership Agreement (EPA)

July 5 (Ministry of Economy, Trade and Industry of Japan) --

1.    The Fourth Round of the Negotiations for the Japan-Mongolia Economic Partnership Agreement (EPA) was held from Tuesday, July 2 to Friday, July 5, 2013 in Tokyo, Japan.

2.    The Japanese delegation was led by Mr. Jun Yokota, Ambassador in charge of Economic Diplomacy, and the Mongolian delegation was led by Mr. Ochirbat Chuluunbat, Vice Minister for Economic Development of Mongolia. Experts from relevant ministries and agencies of both sides participated in the meetings.

3.    In this round, progress has been achieved through negotiations in areas including Trade in Goods, Rules of Origin, Customs Procedures, Dispute Settlement, Investment, Competition, Government Procurement, Sanitary and Phytosanitary (SPS), Technical Barriers to Trade (TBT), and E-Commerce.

4.    The schedule of next round will be arranged through diplomatic channels.

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Progress of projects financed by Chinggis Bonds

July 3 (UB Post) Throughout Mongolia, various development projects are underway and over one billion USD was issued for projects to be implemented with the financing of Chinggis Bonds across eight sectors. For instance, 33 road intersections will be renovated in 2013 as part of the "Street Project" that the Chinggis Bond will provide 200 million USD of financing for.

The Ministry of Economic Development aims to launch one renovated intersection each week in order to ensure planned progress. Major intersections such as Sapporo Intersection and the intersection in front of Urgoo-1 Cinema went operational two weeks ago.

Also, six provinces will be connected to Ulaanbaatar with 1,800 kilometers of paved roads financed with 570 billion MNT in Chinggis Bonds. Executor companies to construct the road have already been selected.

In total, 18 projects will be financed by the Chinggis Bond, 14 of which are planned to be completed within 2013. According to the Ministry of Road and Transportation, progress of the companies are not the same based on their performances. Among others, the road to Bayankhongor Province will be launched in mid-July, and progress of the road to Dornogovi and Dundgovi Provinces are proceeding normally, according to plan. The Ministry also reported that the slow progress of Khuvsgul and Bulgan Provinces roads might delay their launch until 2014.

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MPP youth establish movement to reform the party

July 4 (UB Post) The young members of the Mongolian People's Party (MPP) held a press conference on Monday to announce the official launch of the associated movement named "Let's Reform."

Some members of the MPP deem that the policies and operations of their party have stagnated and its reputation has fallen among the citizens in addition to losing its leading political position since its defeat in the 2009 Presidential Election of Mongolia. They also announced that they have established the associated movement called "Let's Reform" in order to make reforms in the MPP.

Some 10 organizations including the Social Democracy and Mongolian Youth Federation, as well as the representatives of the City Council (Ulaanbaatar's Representative Khural), NGOs of the MPP, and Mongolian Student Union, etc. have joined the movement to date. During the press conference, they introduced their five demands and appeals.

They include announcing the date of the 27th convention of the MPP after conducting its conference on August 8, 2013; electing the party chairman; organizing open training sessions nationwide among party members and supporters; coming up with the party's advocacies, operations, structure, financing, ethics, and responsibilities; and having principles that are fair and transparent, all to make the MPP a corruption-free political party that imposes ethical measures to its members who are corrupt.

In concluding the press conference, the party members answered questions from journalists.

In terms of the MPP's principles, the party members believe that it is time to make reforms. The principal issues cover subjects such as human resource management, relevant measures to manage financing, etc. "We will not blame any chairmen or directors as the reasons for our defeat in the election. We deem that the people did not choose the MPP in five elections as we are not united to accept our mistakes. Thus, we are uniting to make reforms in the Mongolian People's Party," stressed these members.

Many members of the Parliament have joined this reform movement such as N.Nomtoibayar, O.Sodbileg, J.Enkhbayar, and Ya.Sodbaatar.

The MPP promoted its member, former wrestling champion B.Bat-Erdene, as its candidate in the 2013 Presidential Election. B.Bat-Erdene gained about 520,380 or 41.97 percent of the votes in the election, losing 102,414 ballots to the incumbent and victor, Ts.Elbegdorj.

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Director of Clean Air Foundation arrested

July 4 ( The Anti-Corruption Authority has arrested five people from the Clean Air Foundation of Mongolia. The Director N.Khurelsukh, Chief accountant M.Khulan and assistant accountant A.Boldmaa were arrested as suspects for corruption, embezzlement of a large sum of money belonging to public funds and conspiracy on May 28th and detained at the pre-trial  detention center number 461 of the Court Decision Enforcement General Office. The suspects are being questioned over the embezzlement of 3 billion and 56 million MNT from the public fund.

The Clean Air Foundation, a special foundation of the Government of Mongolia, was established to implement operations and programs approved by a series of laws; Air Law, the Law for Special Government Agency, Air Pollution Fee Law and the City Air Pollution Law.

It was revealed that a large sum of money given to the foundation from the State was transferred to an individual`s bank account and a company account illegally. 

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Presidential inauguration scheduled for July 10

July 3 ( The sixth President of Mongolia, Ts.Elbegdorj, will have an inauguration ceremony on Wednesday July 10th just before the National celebration Naadam. 

During Wednesday`s regular plenary session meeting of Parliament MPs agreed to allow the President to be inaugurated in order to give Ts.Elbegdorj the full power Presidential power. In the process the MPs made an amendment to the President`s inauguration regulation dated 1993. 

According to the new amendment to the Presidential inauguration regulation, the President will be inaugurated on Sukhbaatar Square in front of the Chinggis Khaan monument in the presence of the public. 

Former Presidents of Mongolia had their inauguration ceremony indoors at the Grand Hall of Government House. Now future Presidents will take their oath of inauguration on Sukhbaatar Square in front of the Chinggis Khaan monument according to the new amendment to the Presidential inauguration regulation. The inauguration ceremony will be followed by a military parade

The MPs who agreed that the Presidential inauguration should take place outdoors believe that such an event is necessary to revalue the traditional state principles and should be respected by the public. 

MPs, Cabinet members and Speakers of Parliament will be invited to the event.

President Ts.Elbegdorj, who won the majority of votes for his second term in office, will take an oath during the inauguration ceremony at 11.40 am, or the horse hour of the lunar calendar, on July 10th on Sukhbaatar Square in front of the Chinggis Khaan monument in the presence of the public.

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A Second Chance for Mongolia's President

By Julian Dierkes

July 3 (WSJ) Narrowly re-elected, President Elbegdorj Tsakhia now needs to boost foreign investment, improve welfare and fight corruption.

Mongolia's incumbent President Elbegdorj Tsakhia won a second and final term in office in a very close race on June 26, becoming the second president to be re-elected in the country's democratic history. The result signals stability and offers hope for new investments and improved citizen welfare in a country that has recently captured the attention of investors and analysts around the world.

According to a preliminary count announced by the General Election Commission on June 27, Mr. Elbegdorj of the Democratic Party (DP) gathered 50.23% of the vote, narrowly winning a majority and thus avoiding a run-off election. It has been an economically unstable year for Mongolia, so many saw the stability of Mr. Elbegdorj's re-election as a better alternative to the stasis and further confusion that his closest challenger, B Bat-Erdene of the Mongolian People's Party (MPP), would have brought .

Over the past three years, Mongolia has developed rapidly, taking the title of the world's fastest-growing economy in 2011, thanks to its growing mineral industry. Mr. Elbegdorj can take some credit for this growth, which largely occurred after he won the presidency in 2009. While presidential powers do not extend to economic policy or mining regulation, Mr. Elbegdorj has contributed to nurturing an investment environment that has been positive at times, but also challenging at others.

During President Elbegdorj's last term, the giant Oyu Tolgoi gold and copper mining project, in which the government holds a minority stake, has moved rapidly toward production. The project contributes greatly to Mongolia's growth. The president is likely to continue discussions regarding the specifics of the country's relationship with the multinational mining company Rio Tinto, who controls the Oyu Tolgoi project.

Over the past 12 months, foreign investor interest in Mongolia remained strong outside the country, but much more muted inside. Financial advisors around the world have added Mongolia to their watch list because of its strong economic growth and its successful sale of a $1.5 billion Chinggis Bond in November 2012.

By contrast, many investors who are directly involved in Mongolia have been scared away by iterations of foreign investment law, new mining law, and other related legislations. In addition to triggering objections, this succession of laws has created significant uncertainty for medium-term foreign investment.

The perception among foreign investors of increasing risks in Mongolian investments has caused many projects to be scaled back or rethought. Junior mining companies especially have curtailed exploration activities as the local chill in Mongolia exacerbates global challenges the sector is facing. This has led to lower investments and the loss of jobs and other opportunities for Mongolian citizens.

President Elbegdorj may have been disappointed to score such a narrow victory in his re-election, but he is likely to attack necessary tasks with vigor. The last thing Mr. Elbegdorj wants to see during his first term after re-election is a serious economic decline after years of growth. So, he is likely to push DP parliamentary members to revise and pass new laws on investments. Just this week following the election, a draft of a new oil law has been submitted to parliament. A new mining law has been under discussion since late last year.

Beside economic growth, President Elbegdorj has also focused on judicial reform and the battle against corruption. Together with Minister of Justice Temuujin Khishigdemberel, he has pursued reforms through legislative initiatives, such as assigning more specific definitions of conflict of interest. He has also pushed for procedural reforms in the justice system.

In an effort to combat corruption, Mr. Elbegdorj has actively used his presidential powers to appoint trusted DP members to positions of power in the judicial system. But this does not necessarily guarantee a clean government. Proof of the president and his party's determination to deliver on promises of clean government is whether they will examine the records of their fellow party members as well as those of political opponents.

Such measures will improve the welfare of Mongolian citizens through better governance. This could boost voter support outside cities, something the president and his party still lacks. Mr. Elbegdorj won 55% of the votes in combined city districts, but only 47% in areas outside the capital. While the absence of exit polls and detailed social statistics relating to the election hampers analysis, this suggests that much of the countryside answered the MPP's call to vote for its candidate, Mr. Bat-Erdene, in order to challenge DP's stronghold in cities.

Difficulties lie ahead, but there are signs that a re-elected and reinvigorated president will help bring about positive changes for Mongolian citizens and foreign investors alike.

—Mr. Dierkes is an associate professor at the University of British Columbia's Institute of Asian Research and blogs at

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Governing Mongolia

What the Mongolian election means for that country's governance structure and its mining industry

By Julian Dierkes

July 2 (Canadian International Council) On June 26, 2013, Mongolians headed to the polls to vote in their sixth presidential election. The result was the re-election of incumbent Ts Elbegdorj, but barely. His 50.23 percent share of the nationwide popular vote means that he was a mere 3,000 votes away from at least having to face a run-off election against his main challenger. The election was deemed "competitive and effectively administered" by an OSCE election monitoring mission to the country. In the course of the campaign governance questions from many different perspectives featured prominently.

More than an abstract buzzword, governance has become one of the main topics of concern in Mongolian political debates. Several different versions have gained such currency, from democratic participation to corporate governance in the context of state investments. The issues raised in these debates are also at the core of the Conservatives' push toward greater reliance on Canadian expertise in crafting a development policy with an explicit focus on development rooted in natural resources.

Given this overlap between domestic debates about governance in Mongolia, and Ottawa's focus on such issues in revising Canadian development strategies, the Canada-Mongolian diplomatic relationship looks set to grow in its 40th year. The Harper government should recognize this as an opportunity to intensify relations, both through high-level visits and the long-awaited announcement of a bilateral aid program.

In his election campaign, Elbegdorj placed a lot of emphasis on his creation over the past several years of "citizen halls",  and of their newly devolved budget authority. These citizen halls are set to promote democratic engagement and more transparent governance structures in the countryside. Initiated at the provincial (aimag) level, they are intended to be further institutionalized at the country (sum) and local (bag) level.

For Elbegdorj's Democratic Party (DP), the citizen halls have intrinsic value as mechanisms for deepening democratic engagement, but they are also seen as a useful means of contesting the dominance of the Mongolian People's Party (MPP), which continues to leverage the historic organizational structures leftover from 70 years of state socialism to retain power in many rural areas.

The citizen halls are empowered to prioritize budgets according to their needs and aspirations as they perceive them as opposed to what the capital might view them to be, at least in theory. This is a remarkable aim, as Ulaanbaatar, which is home to nearly half of the nation's population, has become an almost exclusive seat of power and policy-making. As of January 2013, the national government was busily assigning specific funding envelopes for rural development projects.

But the citizen halls would see local-level Mongolians at the center of debates over  local priorities for projects. A specific community might prioritize the purchase of a new ambulance over an extension of roadways in a discussion in the citizen hall, for example. This decision would be communicated to the aimag (or, later sum) assembly, which would adopt the prioritization in budget decisions and direct the aimag governor to implement the selected projects. Beyond involving them in decision-making, this would also empower citizens to demand concrete accountability from assemblies and governors. Sounds good, doesn't it? But, this is also a set-up that might be rife with opportunities for manipulation of the processes involved, for corruption at the local level, and for conflicts over jurisdiction. As these decisions become more common, however, they will also affect local policies about future resource projects, an area of governance that may be central to Conservative plans for Canadian development aid.

Despite this push on local governance, Elbegdorj failed to make inroads in the rural vote. While he won 55 percent of 556,000 votes in Ulaanbaatar, he only managed a plurality of 47.4 percent of the 664,000 votes cast in the countryside.

Governance questions regarding the massive Oyu Tolgoi gold and copper project in which the government is a junior partner to Rio Tinto have also featured prominently in political debates this year, following a speech by the president to the Great State Khural in February. With this speech the president started a discussion about the role of the government-appointed directors of Oyu Tolgoi. Are they to represent the financial interests of minority stakeholders, or the interests of all Mongolians, and should they therefore look to maximize benefits beyond short- or long-term financial gain? This is a crucial question to be resolved for a project that will contribute on the order of 1/3 of GDP once fully operational.

In the election, these high-level governance questions only came up to a limited extent since neither of the challengers to Elbegdorj offered a significantly different vision of governance. But governance will be an issue that Elbegdorj will surely return to following his re-election. From 2011 until recently Mongolia was growing rapidly. In the past 12 months or so, various laws relating to investment and mining were passed (or drafts were floated) that made foreign investors very nervous regarding the short-to-medium term future of resource projects, and many projects thus seem to have stalled. This, coupled with a downturn of Chinese demand especially for coal, has led to concerns about an economic slowdown in Mongolia with attendant concerns about the fiscal stability of government finances that have mortgaged revenues for infrastructure and other investments, and increasing unemployment.

Among the aspects of governance that demand Elbegdorj's urgent attention is the distribution of revenues generated by mining related activities. Already the population's expectations are high in this regard. Future income is being spent at a rapid rate. Surely Alberta's fiscal woes are not the only indicator that Canada does not have a magic formula to turn resource windfalls into a financially sustainable source of revenue. The questions that Elbegdorj will continue to face in this regard are the same questions that are being asked by communities and provinces in Canada.

In facing these governance questions, Mongolia and Canada present themselves as ideal partners. Canada's experience with resource-based economic development may hold lessons for Mongolia, and the re-confirmation of the latter's democracy in this presidential election should make partnership attractive to the Conservative government.

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Memorial held for victims of July 1st incident

July 3 ( A memorial was held for victims of the July 1st incident in 2008 on July 1st five years after the incident. Families and friends of the five victims of the incident following the 2008 election hosted a memorial at the monument erected for them on July 1st. 

Mongolians still recall the black day of July 1st where four young men were killed, over 1000 civilians arrested and over 200 civilians sentenced unjustly. 

The Civilian Alliance Center submitted petitions for the protection of unjustly sentenced men`s rights to the primary, control and appeal courts and even the Supreme Court, four times to the State Prosecutor General, twice to the President and the United Nations Human Rights Council but no defense has been conducted so far. Opposing the 2008 election results anti-MPRP protesters gathered in front of the MPRP headquarters and clashed with the police, eventually setting the building on fire on the evening of 1st July following the announcement of the election results. 

The Cultural Palace, north of the MPRP headquarters, also caught alight. Around midnight local time, the President of the time Nambaryn Enkhbayar declared a state of emergency for the following four days. Armored Personnel Carriers were deployed to the streets of Ulaanbaatar, a night curfew and a media blackout were declared.

Five people, all of them civilians, were killed in the riots: four were shot, and one apparently died from carbon monoxide poisoning. 

The Mongolian Minister of Justice estimated 220 civilians and 108 service members were injured. Approximately 1000 protesters were arrested. 

During the riot on July 1st in 2008 a number of laws and the Constitutional law were violated by the prompt action of law enforcement officers. 

In 2012 the court sentenced senior police officers who were accused for abuse of power and for giving the order to fire during the incidents. They received up to 3.6 years years in jail. 

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Austrian–Mongolian business meeting scheduled

July 3 (UB Post) On July 10, the Mongolian National Chamber of Commerce and Industry will organize a business meeting for Mongolia and Austria, as part of the 50th anniversary of the diplomatic relations between the two countries. Not only will Austrian entrepreneurs from logistics, transportation, travel, renewable energy, real estate, mining, and medicine sectors, but also delegates of the Austrian Government and environmental experts will take part.

During the meeting, participants will give business management advice about tourism, drinking water treatment, transportation, waste water treatment as well as introduce an infrastructure and nature protection project to be implemented. They will also share their experiences of business in the Austrian sectors that manufacture equipment for mining, construction and roadwork, and the  benefits of plastic containers and package supplying.

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Car license plate restrictions relaxed for Nadaam during July 11-14

July 8 ( The Metropolitan Traffic Police announced that the restriction on vehicles with certain registration plate numbers in city traffic is suspended during the Nadaam holiday. The restriction is designed to reduce heavy traffic in the city. Vehicles will temprarily be allowed to run without any limitations during the big days of Naadam on the 2222nd anniversary of the founding the first Mongolian state, the 807th anniversary of the Great Mongol Empire and the 92nd anniversary of the Mongolian People`s Revolution. Restrictions on participating vehicles with number plates will not be enforced on July 11th, 12th, 13th and 14th. The regulations will then return to the usual schedule.

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Tsast Group partners with Kyeryong Group for Ulaanbaatar redevelopment

July 7 (UB Post) South Korean delegates led by the CEO of Korea's Kyeryong Group, Lee Sikoo, are paying an official visit to Mongolia. They met with Ulaanbaatar City Mayor, E.Bat-Uul, as well as Minister of Construction and Urban Planning, Ts.Bayarsaikhan.

During the visit, Lee Kisoo announced that he was considering cooperation with Tsast Construction on major construction projects for the city's ger district redevelopment and highway construction. On July 3, CEO Lee Kisoo signed a memorandum of understanding with Tsast Group of Mongolia on behalf of Kyeryong Group.

As part of the cooperation agreement, Kyeryong Group will not only assist with "Townhouse" projects that Tsast Group has planned, but also will hold training sessions to exchange construction experience, as well as hold exchange programs for officials.

The memorandum also noted that Korean construction standards will be introduced to Mongolia and the 365 kilometer highway between Altanbulag and Ulaanbaatar will be done with cooperation of Kyeryong Group too.

Kyeryong Group runs construction projects in Russia, the United Arab Emirates, Bahrain, Nepal and Indonesia. It earns 3.2 billion USD a year with a history that spans 44 years. The group is currently constructing over 300 buildings, roads and bridges in Korea.

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Japan abduction minister plans Mongolia trip to discuss N. Korea issues

July 5 (Kyodo) State minister Keiji Furuya, who handles the issue of North Korea's abductions of Japanese nationals, is making final arrangements to visit Mongolia to discuss the issue with senior officials, Japanese government sources said Friday.

The four-day visit from Monday by Furuya, who will head to the capital Ulan Bator as a special envoy of Prime Minister Shinzo Abe, will coincide with the inauguration ceremony Wednesday of re-elected Mongolian President Tsakhia Elbegdorj, the sources said.

Furuya will present a letter from Abe with the aim of seeking Mongolia's support to move forward the long-stalled abduction issue, given Mongolia's diplomatic ties with North Korea, the sources said.

North Korea's abductions, which took place in the 1970s and 1980s, remain a key obstacle to the normalization of ties between Tokyo and Pyongyang. North Korea has yet to reinvestigate the cases as promised.

In March, Abe held talks with Mongolian Prime Minister Norov Altankhuyag in Ulan Bator. At a joint news conference afterward, Altankhuyag said Mongolia will support Japan's stance on North Korea, including the abduction issue.

The following month, Hideshi Mitani, head of the secretariat of the government headquarters on the abduction issue, visited Mongolia to seek local officials' support in resolving the issue.

Mongolia has played a key role as a liaison between Japan and North Korea and hosted senior working-level talks between Tokyo and Pyongyang last November.

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Protocol on Military Grant Aid from China to Mongolia signed for border protection collaboration

July 7 (UB Post) Ambassador Extraordinary and Plenipotentiary from Mongolia to China Ts.Sukhbaatar held a meeting with Vice-Chairman of the Office of Foreign Affairs of the Ministry of National Defense of China Major General Qi Guovey. They shared their views regarding the bilateral relations on defense and border protection collaboration.

During the meeting, a protocol called "Military Grant Aid from China to Mongolia" was agreed on between the border troops of Mongolia and the People's Liberation Army of China.

Vice-Chairman of the Central Military Commission of China Colonel-General Xu Caihou had informed, during his visit to Mongolia in May 2012, that China would grant that aid to Mongolia.

The protocol-signing ceremony was attended by Military Attache of the Mongolian Embassy B.Davaadorj and Mongolia's First Secretary-General G.Baigalmaa. China's Senior Colonel Song Yanchao, the Deputy Director-General of the Asian Affairs Bureau of the Foreign Affairs Office of the Ministry of National Defense, and Colonel Tong Venchi, the Director of the North East Asia Affairs Division that is affiliated with the Asian Affairs Bureau, were also present in the ceremony.

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Foreign Minister at ASEAN Regional Forum in Brunei

July 3 (UB Post) Foreign Affairs Minister L.Bold was in Brunei to represent the European Union at the 20th Ministerial Meeting of the ASEAN Regional Forum (ARF) last July 1 and 2.

In the first day of the meeting, Minister L.Bold held bilateral talks with his counterparts from the Philippines, Turkey, Democratic People's Republic of Korea (North Korea), Russia, Brunei, India, and Vietnam.

During the bilateral talks with his counterparts, he briefly mentioned the results of the recently held Presidential Election of Mongolia and the current situation of Mongolian politics and economy. He noted that there were plenty of pleasant opportunities to expand and develop bilateral friendly relations and cooperation. He also expressed Mongolia's willingness to have close relationships with each of these countries.

For instance, he shared views on inviting the Russian Deputy Foreign Affairs Minister to Mongolia in the near future in the context of the preparation of the Prime Minister of Mongolia's trip to Russia in order to discuss easing the visa conditions of official and diplomatic passport holders. He also talked about resolving the citizen-related issues with the Philippines and urgently developing the project to deepen the country's relationship with India. Additionally, he mentioned his willingness to intensify the efforts which were initiated as a result of the Turkish Prime Minister's visit to Mongolia and discussed the visit of the President of Mongolia to Vietnam which is planned to be conducted in the future.

Furthermore, the Foreign Minister held brief meetings with the Foreign Affairs Ministers of the Republic of Korea (South Korea), New Zealand, Indonesia, Thailand, Australia, Singapore, and Pakistan.

All sides stressed the significance of high-level bilateral visits and talks in strengthening relations and agreed to support, as well as to further the visits and cooperation at all levels.

The ARF brings together the Foreign Ministers of the 10 ASEAN Member States (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, Vietnam), as well as the United States, China, Russia, Japan, India, South Korea, Australia, New Zealand, Canada, North Korea, Pakistan, Bangladesh, Mongolia, Papua New Guinea, Timor-Leste, Sri Lanka, and the EU. The ARF remains the main security forum in South East Asia where the EU is present on behalf of its Member States.

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162 Mongolians Jailed Abroad, Majority In Thailand

July 3 (UB Post) There are 162 Mongolian nationals jailed abroad. The majority of them are imprisoned in Thailand. The Director of the Consular Department of the Ministry of Foreign Affairs,  Sh.Sukhbaatar, met the Mongolian citizens being held in Thai prisons on June 24th. In an interview, we learn more about people who are jailed in abroad.   

How many people are serving time in jail, and for what kinds of crime, in Thailand?

We met four people confined in a prison which is situated 45 kilometers from Bangkok. They were arrested when they were stealing sunglasses, wallets and watches at the airport and sentenced to two years. There are 14 men with six month to 12 year sentences. Most of them are accused of the crime of stealing, some of them have visa violations, and one person is charged of a crime related to drugs.

How was their situation in prison?

They were very emaciated when we met them. They said that 74 people slept together in the room like a living room. They don't work in the day-time, but they're suntanned like native Thai people because of standing in the sun in the yard without shade for the whole day. For food, they always eat rice. If their family puts some money into their account, they can buy and eat some meat. I brought some dried curds, candies and cigarettes, but those weren't allowed into prison. Therefore I put 400 bahts (12.95 USD) into their accounts. This equals two to three days of meat.

They feel very guilty about their offenses. We gave them some advice about jurisdiction. After I arrived, I met their families and heard about their difficulties. We decided to send this information to related organizations through the Mongolian embassy in Thailand. Prison staff said Mongolians seemed to not violate the law [during incarceration].

What policy exists to protect Mongolian people's interests abroad?

Police from the "new government for changes" are to focus on protecting people's interest. By the way, the Philippine Secretary of Foreign Affairs will visit our country on June 2nd-6th. However Prime Minister N.Altankhuyag said that our country couldn't allow his visitation because quite a few cases that didn't respect our citizen's rights have happened in the Philippines.

There aren't bad citizens in any country, as there aren't bad fathers, mothers, children or mates. Therefore we're working at protecting our citizens and listening to their opinions. For instance, an imprisoned guy in Thailand said that he couldn't keep in touch with his girlfriend. He was receiving letters after a month long delay. So we talked with the embassy and authorities of the prison, then they gave him permission to send letters by mail.

Also, there was a well-known woman whose visa had expired. She told us she became a Christian after a hard life. We said we were ready to help her if she really wanted come back to Mongolia. In Thailand, if your visa is expired by one day, you should expect to pay a 500 baht fine each day your visa has expired . When the fine reaches 21,000 baht, you will be arrested.

Is there any agreement with Thailand for prisoner transfer?

We will reach this kind of agreement. Even so we brought three people home. And we're getting four people whose sentences were over before July 1st. People who had severe sentences were left there. It's quite hard to meet people who received 12-year sentences. The Mongolian Embassy in Thailand works to meet them, listen to their opinions, help them find lawyers and participate in trials if it's necessary. But some people requested not to let embassy workers in court. We will mind their requests. In any case, we solved half of their problems.

How many foreigners are imprisoned in Mongolia? Are there any Thai people among them?

There are 26 imprisoned citizens of Russia, China, Malaysia, Singapore, Korea, Philippine. There aren't any Thai people.

What is planned to conclude an agreement on prison transfer with other countries?

We signed an agreement on prison transfers with the People's Republic of China. We made an agreement and we're waiting for China's confirmation. Although two citizens were transferred last year. This year, the Minister of Justice and the General Police Department sent information about eight citizens, and we're about to transfer four citizens' cases. Moreover we're taking care to transfer people jailed in eastern China to prisons in Hohhot, with weather similar to Mongolia.

Our citizens tend to commit more drug related crime. What will be done for people not to be involved in this kind of crime?

One third of 162 people jailed in 16 countries committed drug related crimes. Mostly they're becoming victims of the illegal drug trade, not imprisoned because of using drugs. If they kept at it, smuggled drugs and even stayed with drug dealers, they became participants in drug related crime. Punishment for drug related crimes are severe and not judged by the degree of participation. Therefore, people should be more careful not to carry someone's luggage.

One of the shameful crimes is the crime of stealing. Over sixty percent of people jailed abroad are convicted for the crime of stealing. Some of them committed serious felonies, but some of them came into this situation because of very small offenses. The investigations and methods of foreign law enforcement have really improved. Recently I travelled to Singapore and the Philippines. Even if you take someone else's stuff left at the airport, you will be involved in a crime of theft and be arrested. So I just want to say, "Please don't commit any crime and blemish your country's reputation". The crime of stealing is becoming more organized. Provincial guys become victims of organized theft when they go abroad. They carry other people's stolen stuff g and get caught at the border. But real criminals are left behind. Foreigners investigate this sort of crime for very long terms.

For that reason, the Consular Department of the Minister of Foreign Affairs warns people that if they're involved in crime, they will carry their own responsibilities. Since there are so many opportunities to live without committing crime, choose a better way. Adhere to the rule of law.

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Social, Environmental and Other

Nadaam 2013 Program

July 4 ( The Organizing Committee of Naadam has released the program for the National celebration on the 2222nd anniversary of the founding of the first Mongolian State, the 807th anniversary of the Great Mongol Empire and the 92nd anniversary of the Mongolian People`s Revolution. 

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New Tourist Information and Introduction Center opens

July 8 ( A new Information and Introduction Center of Ulaanbaatar City Tourism Board opened on July 5th. 

The Information and Introduction Center is designed to provide all kinds of information to local and foreign tourists, give an introduction to the incredible history of Ulaanbaatar City, ancient cultural sites and beautiful sites, suggest travel routes and promote tour organizations by making a bridge between tourists and advantageous tour operators. 

There will be an open-line available in the Information and Introduction Center to receive and solve tourist related complaints and comments. 

The Information and Introduction Center has a fully equipped educational hall with a capacity of 40 to conduct any kind of training and tutorial classes to staff of tour operators. 

There will also be a "City tour bus" every fixed hours for tourists to travel through Ulaanbaatar City.

The Ulaanbaatar City Mayor E.Bat-Uul and officials of the Ministry of Culture, Sport and Tourism attended the opening of the Information and Introduction Center of Ulaanbaatar City Tourism Board on July 5th. 

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Mongolia to welcome its 2,900,000th citizen

July 7 (UB Post) National Statistical Office has recently reported that Mongolia will embrace its 2,900,000th new citizen on the evening of July 10, at 6 pm, the day before the Naadam Festival opens.

All newborn children born at this hour will be registered as the 2,900,000th citizens of Mongolia nationwide.

In Mongolia, while one person dies every 28 minutes, one person is born every 10 minutes.

The Mongolian population used to grow by 1.4 to 1.9 percent, but now the percentage has risen to two percent.

In 1988, 25 children were born as the 2,000,000th citizens of Mongolia both in provinces and Ulaanbaatar city.

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Opening of the first "French school" in Mongolia

July 7 (UB Post) In September 2013, the first French school in Mongolia is expected to open in Ulaanbaatar, near the Central Post Office. After accreditation, it will be part of a worldwide network of French schools comprised of over 480 schools in 130 different countries, officially certified and supported by the French educational authority .

The French International School of Ulaanbaatar (École Française Internationale d'Oulan-Bator) will start with one "Maternelle" (kindergarten) and one "Elémentaire" (elementary) class, making it possible for children ages 3 to 11 to follow the education program set by the French Ministry of Education.

Several private international schools have flourished over the years in Ulaanbaatar. The French school will be a non-profit organization, and expects to expand. At an information session last week, one parent noted that the American International School "started in a three room apartment" but now has over 400 enrolled students. It is expected that over the years, the French school will gradually offer courses to prepare its students to take the French Baccalaureate.

The language of instruction and the educational program itself will be French, although Mongolian language and culture classes will be put in place. According to the project coordinator, M. Alexandre Balson, this school is a logical follow-up to "Classe FLAM" (French as a maternal language), a course aimed at students from France and Francophone countries. Seventy-six countries around the world are part of the "Organisation Internationale de la Francophonie". This course teaches the French language to students from ages 5 to 16, to help them develop the same fluency as they would if they were living in France or another Francophone country. As the "Classe FLAM" continues for pupils enrolled in different schools and for pupils age 12 to 16, in September 2013, parents can take the experience one step further for their younger children with the complete schooling offered by the "maternelle" and "elementaire" French educational system.

This project is supported by the French Embassy, which sees the school as an opportunity for the French and Francophone children living in Ulaanbaatar to be in touch with their native language and culture, while taking advantage of the opportunity to learn from the local language and culture. This school may also encourage companies from Francophone countries, and their employees with children, to settle in the capital.

More information on the newly-founded school can be found on their website ( The Project Coordinator can be contacted by email at and by phone at 9521-9026 (French/English), or the Secretary  can be reached at 9520-2065 (French/English/Mongolian).

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5,000 Biyelgee dancers to dance at Sukhbaatar Square for a Guinness World Record

July 3 (UB Post) On July 10, 5,000 dancers will perform the Biyelgee (Mongolian traditional dance) at Sukhbaatar Square to be enlisted in the Guinness World Records. The event is being organized by the Khugsuu Ensemble of traditional folk arts. The ensemble held a Biyelgee dance training course for over 15,000 children this year and 999 selected Biyelgee dancers out of 5,000 will dance at the opening ceremony of the Naadam festival at Central Stadium.

Director of the Khugsuu Ensemble, Ch.Amartuvshin, said regarding the event, "Our country has been enlisting its intangible cultural heritages with UNESCO, however, countries around the globe are not really aware of them. But the Guinness World Records always draws the attention of people across the world no matter how their nationality, language, gender and religion differ.

"Therefore we are aiming to enlist the Biyelgee dancing of 5,000 dancers to the Guinness World Records in an effort to promote Mongolia's national arts to the world and draw the attention of foreigners to Mongolia. We have submitted our request to be enlisted in the records three times and finally  received approval on the condition of enrolling 5,000 dancers of at least ten Mongolian ethnic groups."

At the event, citizens between the ages of 3 and 84, from all 21 provinces will perform the Biyelgee dance. The most famous dancer among them is 76 year old R.Samjid from Bayan-Ulgii Province. The eldest dancers are N.Khorloo and Sh.Otgonbayar, aged 84 from Altai soum of Khovd Province.

Delegates of the Khalkha, Buryat, Barga, Uzemchin, Dariganga, Tsaatan ("Reindeer" community), Darkhad, Khotgoid, Durvud, Bayad, Uriankhai, Khoton, Tuva, Zakhchin, Torguud, Uuld, Myangad and Khazak ethnic groups will dance Biyelgee to their own ethnic music.

The Biyelgee dance not only demonstrates Mongolian artistic culture but also cultures of domesticity, costume, health as well as ethnic identity.

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Experts back Golden Mountains of Altai as World Heritage site

ULAN BATOR, July 4 (Xinhua) -- Experts from China, Russia, Mongolia and Kazakhstan agreed Thursday on the necessary of a bid for including the extension of the Golden Mountains of Altai on the World Heritage list.

The experts will gradually work out the criteria on the candidate regions in the extension of Golden Mountains of Altai for application for the World Heritage list.

The experts were expected to sign a memorandum of understanding on cooperation guidelines in this regard, according to an international workshop here that ended Thursday.

According to the decision of the World Heritage Committee 22nd Session, the Golden Mountain of Altai in Russia had been inscribed under natural criterion in 1998, and another World Cultural Heritage site - the petroglyphic Complexes of the Mongolia Altai - is located near it.

To better protect the natural landscapes and cultures, China, Russia, Mongolia and Kazakhstan will coordinate their efforts for the application of the extension of Golden Mountains of Altai.

The Altai region is an important and original center of biodiversity of plant and animal species. It winds its way through China, Russia, Kazakhstan and Mongolia for over 2,000 kilometers.

The region boasts more than 2,000 plant species. The mountain range is also an important habitat for rare and endangered animal species such as the snow leopard.

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Study reveals fresh insights into Przewalski's horse

July 4 ( Recent research that mapped the genome of a 700,000-year-old extinct species of horse may also help settle a debate over the status of the Przewalski's horse.

The debate has centred on whether the Mongolian equine is really wild and not domesticated, like all other horse breeds.

In one camp are the experts who consider the Przewalski's horse to be a separate species and the last true wild horse.

Others believe they are subspecies, a wild offshoot of domestic horses.

The Danish researcher who mapped the genome of the ancient extinct horse, taken from a piece of bone removed from permafrost in the Yukon, Canada, compared the genome with that of a pre-domestication horse, a modern donkey, five modern domestic samples and one modern Przewalski's horse.

The researchers found all contemporary horses, zebras and donkeys originated 4 million 4.5 million years ago – twice the conventionally accepted time to the most recent common ancestor of genus Equus.

The study also showed that many demographic fluctuations occurred in horse populations in the past two million years, especially during the period of major climatic changes.

The study suggested that the Przewalski and domestic horse populations diverged 38,000 to 72,000 years ago, and there has been no cross-breeding between the two types of horses.

These findings provide evidence that the Przewalski does indeed represent the last survivor of wild horses, a view supported by striking physical differences compared to domesticated horses, as well as an extra pair of chromosomes.

The team also found the evidence supporting the continuous selection of the immune system and the sense of smell throughout horse evolution, and dozens of genomic regions that are likely to be taken as genetic markers during the domestication.

The Przewalski's horse was named after a Russian colonel who led an expedition into their nature rangelands in 1881.

They were extinct in the wild for decades until a captive breeding program reintroduced them to Mongolia in the mid-1990s.

Given their truly wild origins, the researchers found wide genetic diversity in the genome compared with the domestic horses, which is good news for conservation efforts, given the limited numbers that survive.

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Mongolia partners with Australia for clean water

July 7 (UB Post) A Mongolian working group led by the State Secretary of Ministry of Nature, Environment and Green Development, J.Batbold, visited and was introduced to Western Australia's water supply and treatment system.

During the visit, Terry Redman, Minister for Training and Workforce Development; Water; Forestry, of Western Australia, received Mongolian delegates and spoke positively of the possibility of training Mongolians as water experts, as well as sharing the latest water study and water supply technology to Mongolia. He went on to talk to delegates about cooperation with Mongolia.

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Towards greater equality: the battle of the LGBT community in Mongolia

By Claire Launay

July 7 (UB Post) I walked into the bar not knowing what to expect. After all, it had only been two weeks since I had arrived in Mongolia, so I was still surprised by everything – and everyone – I encountered here. I did not know what would surprise me the most in this bar, where a friend of mine had promised to take me for over a week. I was excited and nervous at the same time. It is in that mindset that I entered the bar – or was it a club? It was hard to tell from the outside, and from the inside as well, as a matter of fact. And then I spent an amazing night in this gay bar of Ulaanbaatar.

A small, close-knit community whose rights are vaguely defined

As somebody interested in the rights of the minority that is the lesbian, gay, bisexual and transgender (LGBT) community, I was there as much to enjoy myself as to try to understand the dynamic of the community. What I found was somewhat comforting: a very open-minded group of people who all seemed to know each other, somehow. I had not witnessed any homosexual couples in the streets of the capital city yet, or any transgender people out in the open like they were at the club. If it had not been for all the sad stories of discrimination and rejection I had read before, I would have thought that the LGBT community of Mongolia was well accepted. But just as the situation is not as hopeful as that bar had me believe, the future of this minority in Mongolia is not all dark either.

Right now, the LGBT community has been able to win a few battles, but much work remains to be done. Indeed, the number of cases of discrimination based on sexual orientation and gender identity  is still very high, and only a small part of the community is open about who they are. When it comes to homosexuality or transgender identity, Mongolia, along with other Asian countries such as China and until recently, Russia (where a law banning discourse on homosexuality was passed three weeks ago), is a grey zone. Grey, in the sense that being homosexual is not considered an illness or a crime, but at the same time, there is no mention of sexual orientation and gender identity in the criminal code, which would allow for proper punishment of hate crimes against members of the community. Basically, homosexuality, bisexuality and transgender identity are not acknowledged, or at least this is how it's been for the past few years. But according to the executive director of the LGBT Centre, Otgonbaatar Tsedendemberel, things are moving forward for the minority community.

"Few LGBT persons have escaped some degree of harassment and/or violence"

According to the 2010 Universal Periodic Review, a state-driven process conducted under the auspices of the Human Rights Council of the United Nations, "Discrimination and human rights abuses in Mongolia against sexuality minorities […] are endemic in the public, private and non-governmental sectors and encompass the police and the judiciary, health-care services, education, the housing sector and the media. So prolific is the level of prejudice that few LGBT persons have escaped some degree of harassment and/or violence".

Coming from the West, I was used to arguments relying on religion or the transformation of the family, as things I would hear to justify homophobia or unequal rights. Countless numbers of times I heard that homosexuality or trans-sexuality were "against nature" and were "destroying families". But in Mongolia, I came across a different type of argument, one that was about what it means to be Mongolian and thus, was somewhat linked to a form of neo-colonialism. Several stories of cases of violence or harassment against LGBT people involved members of the ultra-nationalist group , Dayar Mongol. They argue that homosexuality and transgender identity are a Western import and thus anyone who would claim to be anything other than heterosexual, would be considered un-Mongolian. This argument somewhat collides with another argument that was quite unfamiliar to me: homosexuality as a threat to national security, as it goes against the "natural" reproduction scheme and would lead to a fatal diminution of the population. All those perpetuating violence or harassment against LGBT people do not necessarily adhere to these arguments though, as much of the violence arises from misunderstandings and a strong social stigma against LGBT people, according to Otgonbaatar.

"We are looking at a bright future for the LGBT Community"

Fortunately, things are moving forward for greater equality among people from different sexual orientations  and gender identity. Indeed, in April 2013, the issues regarding the LGBT community were mentioned and discussed for the first time in the Mongolian parliament. The 18 members of the Permanent Committee of Legal Affairs were pushed to discuss the issue by the National Human Rights Commission of Mongolia (NHRCM), a government-mandated body. The LGBT question was raised, along with four other questions, out of which it was decided that the LGBT issue and the problems raised by children residing in temples and monasteries should be discussed in a closed session, preventing any media coverage of the discussion.

The members of the LGBT Centre, the NGO with which the NHRC M had conducted the study leading to the question being raised in parliament, were able to attend the two meetings that followed, but were barely allowed to talk. TS. Otgonbaatar remembers the first time the chairperson spelled out what LGBT stood for: some members of the parliament giggled. The LGBT Centre had to face other disappointments, such as the lack of support of a top monk going against the pro-LGBT stance of the Dalai Lama himself. Additionally, in thinking of homosexuality or transgender identity, some parliament members seemed to only consider the sexual act, going as far as to say such things as "we don't want to turn human rights into blanket rights", a pun in the Mongolian language, which at the same time removes credibility from the claims of the LGBT community.

But the fact that the issue was raised is already quite encouraging by itself, for the sexual minorities. Moreover, some decisions were made, advancing their rights. Indeed, as one member of the parliament from the Democratic Party pointed out, Mongolia has a duty to address these human rights issues, at least for the sake of respecting the commitments it made to the international community. The Minister of Justice also acknowledged the confusion surrounding the terminology of sexual orientation, saying that there was a need to look at the LGBT issue from a human rights perspective, otherwise it risked being confused with a sexual perversion.  He thus backed the LGBT Centre's demand for an amendment of the criminal code, which would allow for a precise definition of a hate crime and the appropriate penalties for it. This amendment is currently on its way.

The amendment is a first major victory for the LGBT community. If it doesn't stop hate crimes right away, it will at least provide the proper legal framework to deal with these crimes. Until now, most cases of hate crimes ended up being dismissed. Ts. Otgonbaatar believes this is a very hopeful sign that their next goals – the passing of an anti-discrimination law and the amendment of the constitution to include gender and sexual orientation – are reachable. According to some international experts, this would make Mongolia one of the leading countries of the region in this regard. The executive director of the LGBT Centre is also optimistic for change, as Mongolia is "lucky enough to have a young people", who tend to be more open to social changes. "I think we are looking at a bright future for the LGBT community in Mongolia", he confided to me in a low voice but with a large smile, trying to tone down his obvious enthusiasm for the years to come.

As none of the major parties of Mongolia mentioned LGBT rights in their agenda for the recent election, it is hard to tell the consequences of the re-election of Ts.Elbegdorj for the sexual minorities. However, as much progress was achieved during his first term, there is, again, much hope that it will continue down this road. The LGBT Centre hopes to work hand in hand with the government to make progress. Meanwhile, in September 2013, a "Pride Week" will be held in Ulaanbaatar. This is the first event of its kind to be held in Mongolia; it will publically celebrate the LGBT community, and at the same time, raise awareness about the important battles they still face on a daily basis.

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Chicago Bulls' Loul Deng to visit Mongolia

July 7 (UB Post) Here is pleasant news for NBA lovers. One of the top forwards in the NBA today, Chicago Bulls' Loul Deng, is going to visit Mongolia very soon, according to organizers of the event who held a press conference yesterday, July 4. He will stay in Mongolia for three days during his holiday. Loul Deng arrives on July 12 and returns on July 14. He will not only be acquainted with the Naadam Festival and Mongolian culture, but he will also work for his Loul Deng FoundationHe will then be attending Skytel's humanitarian campaign, be part of a television program, and be a guest in many other events.

Loul Deng was born on April 16, 1985 in South Sudan. His family immigrated to Great Britain when he was young. At the age of 19, Deng entered the 2004 NBA draft. He was picked 7th overall by Phoenix Suns, but was immediately traded to Chicago Bulls by prior agreement. He was selected for the All-Star Game in 2012 and played for the Great Britain team in the London Olympics. He scores 15.1 on average during one season.

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Wins not needed for a winning experience by Mongolia basketball at Continental Cup

BEREA, Ohio, July 6 (  — As his teammates positioned themselves for the opening tip on one of the basketball courts in the Baldwin Wallace recreation center Thursday morning, Enkhsaikhan Bayarsaikhan, one of Team Mongolia's two substitutes, pulled out a camera.

He wasn't going to let the beginning of their game against the Lake Erie Defenders, their first of the Continental Cup, go undocumented. As the ball rose toward the ceiling, Bayarsaikhan snapped a few pictures before preparing to enter the game.

The Defenders won the tip and easily won the game 60-28. Mongolia lost both of its games Friday, though the scores were closer. For Mongolia, the experience this weekend is about more than results at the Continental Cup, the annual youth sports festival held by the Greater Cleveland Sports Commission.

• Facts and figures on the 2013 Continental Cup

The team of eighth-grade boys was created after a Continental Cup representative visited the Mongolian embassy in Washington last fall. Players were selected from four schools and have only been playing together for about a month. This is the first time Mongolia has sent such a team to America.

Coach Tugsjargal Sambuu said he hopes this is the next step of Mongolian basketball.

"We can get lots of experience from when they're teenagers," he said through interpreter/player Bodikhan Bayarsaikhan. "America is one of the biggest places on Earth and has big competitions. So our kids in Mongolia can get more experience in competitions like this."

The process of getting to Cleveland was a feat of its own. Three players were unable to get the necessary visas, leaving Mongolia with just seven players this weekend. But the experience brought those who did make the 21-hour flight from Ulaanbaatar, the Mongolian capital, closer.

"We had long trips where we had more time to discuss with each other about things and we've gotten to know each other better than before," team captain Boldbaaar Yumchinsuren said. "The team is almost one body. We have to work together as a team, make strategies and try to do our best."

The visa issues cost Mongolia some of its bigger players. The lack of a post presence hurt Mongolia against Lake Erie, which had a significant advantage in rebounding and blocked several shots. But Lake Erie coach Dave Albert was impressed with the skills Mongolia displayed.

"They really had some good ball movement," Albert said. "I was surprised, personally, at the ball movement and passing they had. They worked well together as a team, I thought. They complemented each other well." Sambuu said basketball has become "quite popular" in Mongolia, located just north of China in Central Asia. Yumchinsuren said he watches the NBA on TV whenever he can and said his favorite player is Bulls point guard Derrick Rose.

As basketball grows in Mongolia, Sambuu is hopeful the young players here in Cleveland this week will be able to help elevate the game's presence back home.

"This is our first time in America playing," Sambuu said. "Starting next year we're trying to expand our players and add more people."

Team Mongolia is confident their experience this weekend will help improve their level of basketball back home. For now, however, the players are happy they have the opportunity to learn and compete in such a big tournament.

"It's a great team, it's a lovely team," Yumchinsuren said. "I think everybody here is a great friend. We're really nice to each other and we'll try our best." 

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Mongolian Choppers Brotherhood: Mongol pride connects us

July 7 (UB Post) The following interview is with K.Enkhtumur, an information worker at MIAT and a member of a brotherhood called "Mongolian choppers." He has been very interested in motorcycles since he was young. He said he can only feel freedom when he's riding his chopper.  A chopper is a type of motorcycle that was either modified from an original design ("chopped") or built from scratch in order to have a unique hand-crafted appearance.

-       When was the "Mongolian choppers" brotherhood founded?

-       It was founded in 1996 by four or five guys including me who were truly interested in choppers. The number of our brotherhood members is getting bigger. We now have over 60 members and a dozen followers. We are the biggest union of chopper riders and owners in Mongolia.

-       What was your first ever motorcycle?

-       I was really excited when I bought my first motorcycle called "Suzuki Bandit" in 1998. It cost approximately 1,200 USD. It is said that chopper riders are rude people full of tattoos. But that's not true. Most of us are kind-hearted and generous.

-       What activities does "Mongolian choppers" do aside from riding motorcycles?

-       We're trying to reach all social sectors. Lately, we have met children being held in prison, given them presents, and tried to cheer them up. Moreover, we have planted trees in the National Park.

-       What about the brotherhood's summer opening and closing events?

-       Oh, yes! Our opening event will be held on July 25. It is really magnificent that we will all be riding choppers on the streets of UB. The closing event will be held in fall.

-       What is planned in the near future? Will you travel somewhere?

-       We're intending to take a trip to Ugii Lake in Arkhangai Province on July 5, and to Ulaan-Uud on July 18.

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