Thursday, August 8, 2013

[New FDI law takes shape, Elbegdorj raises possibility of early session of parliament, and ₮ continues sharp fall]

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Overseas Market

Steven Hodgson appointed, replacing Bruce Higgins.

FeOre: Change in Directorship

August 5, FeOre Limited (ASX:FEO) --

Link to release

Final Director's Interest Notice


StanChart cuts MMC (00975) to HK$0.94, "underperform"

[ET Net News Agency, 22 July 2013] Standard Chartered trimmed its target price for Mongolian Mining Corp (MMC)(00975to HK$0.94 from HK$2.26, and downgraded the stock to "underperform" from "in-line".

The bank thinks MMC's 40% share price rally in mid-July was unwarranted. It expects a wider loss in 2013/14, after adjusting for lower prices and wash yields. Management guided a weak 3Q 2013 price (at RMB550/t) and its wash yield in 1H 2013 was disappointing at 45%.

Despite positive operational developments, such as the completion of a third washing plant, MMC's high operating and financial leverages continue to drag its profitability, StanChart added.

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Daiwa starts MMC (00975) at "sell" & HK$1.1

[ET Net News Agency, 26 July 2013] Daiwa Research initiated coverage of Mongolian Mining Corp (MMC)(00975) with a "sell" rating, and target price of HK$1.1 The research house does not expect much improvement in MMC's net-profit margin given the current worse overcapacity coking-coal issue in its only market (China). Hence, it sees further share-price downside.

Daiwa thinks MMC will have little choice but to cut its ASP further in 2H 2013 to meet its export volume guidance of 6m tonnes of washed hard coking-coal products. The house forecast its hard coking-coal ASP to fall to US$95/tonne for 2013-15 from US$108/tonne in 2012. 

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Local Market

NatSec MSE Update: Top 20 -0.02%, Turnover 16 Million

August 5 (National Securities) On the bourse today the MSE TOP-20 Index edged down marginally by -0.02% to 14,273.5. Trading values were light at just 16m MNT; with just 12 companies trading a total of 7,122 shares. 4 shares increased, 3 shares decreased and 5 shares were static.

Ulaansan (UNS) was the top gainer, limit-up at 343.71 MNT. Aduunchuluun (ADL), which is coal miner, rose 6.67% to 2,400 MNT. On the flip-sde, HBOil (HBO) plunged -8.0% to 322 MNT. Today's most traded share was APU (APU) in which 3,380 shares were traded with a value of 12.8m MNT.

Please click here to see the detailed news

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NatSec MSE Update: Top 20 -0.96%, Turnover 8 Million

August 6 (National Secutieis) Although trading volumes were higher, trading values were lower than yesterday. 21,909 shares traded with a  combined value of 8m MNT. The TOP-20 Index closed -.96% to 14,136.36.

Out of 13 companies that traded, 4 shares on the B-board increased. Khereglee Impex (HIE), Bishrelt iIndustrial (HHC) and Buunii khudaldaa(BHL) soared 14.99%, 14.85% and 14.90% respectively. The top loser was coal miner, Tavan Tolgoi (TTL), which dropped -7.17% to 3,249 MNT. Telecom Mongolia (MCH) decreased -4.18% to 1,054 MNT. The most actively traded share was Remicon. It's price un-changed and 18,789 shares were traded with a value of 3.3m MNT.

Please click here to see the detailed news

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MSE E-Newsletter Edition #17, July 2013

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Mongolian bonds suffer amid frontier correction

August 6 (FT) One day you are hot, the next day you are not – and so it is with Genghis bonds which have suffered a sharp market correction in the wake of June's market rout.

Back in November, eyebrows were raised in the emerging markets debt investment community when Mongolia – a country that has been rescued five times in the past 22 years by the International Monetary Fund – managed to raise $1.5bn at a price below Spain's borrowing costs.

At the time, many took the sale, which was 10 times subscribed and attracted $15bn in bids – as yet another sign that investors who were flushed with cash and desperate for yields were jumping into markets that they did not fully understand.

Fast forward eight months and the sceptics appear to have been proved right.

The $500m five-year tranche of the issue is now trading at 92.837 cents to the dollar.

Priced at the outset at 4.125 per cent, yields that investors are demanding to hold the bond have jumped to nearly 6 per cent.

It's a similar story for the larger 10-year $1bn tranche, which was priced at a yield of 5.125 per cent. The bond is now trading at 87.245 cents to the dollar and yields are now at 7 per cent.

The increases far outpace that seen in US Treasuries. Yields on US 10-year notes have gone from 160bp at start of May to 265bp.

In many ways. The sharp correction in frontier market sovereign and corporate debt should not come as a surprise.

The surge in investor interest for debt from frontier markets has been mainly driven by hollowed-out returns in the developed and more established emerging markets.

But with the US Federal Reserve expected to begin scaling back its massive bond buying programme leading to higher interest rates, the investment calculation no longer makes sense.

"It's reality reasserting itself back into valuations," said Robert Abad, emerging markets specialist at Western Asset Management.

"The hunger for yield which spawned new issuance from places that, in normal credit cycles, wouldn't have had easy access to the international capital markets ultimately distorted investors' sense of valuation and risk."

"Relatively unknown issuers with no 'credit history' accessing the market for $1bn or more at 5-6 per cent yields was surreal back then and even more so in retrospect," he added.

Investors who bought into the Mongolian bond at the time of issuance are not the only ones getting their fingers burnt.

Those who snapped up Zambia's $750m 10-year dollar bonds last September at a yield of 5.625 per cent are also sitting on losses.

The bond is currently trading at 88.338 cents to the dollar and have jumped to 7.136 per cent.

Rwanda's $400m 10 year bonds – which attracted more than $3bn in orders – are now exchanging hands at 89.823 cents to the dollar.

Priced at 6.875 per cent at the time of the issue, yields are now at 8.158 per cent. A bargain if bought now but less so for those who bought at the time of issuance.

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Mongolia to simplify FDI for state-backed firms

August 6 (South China Morning Post) The Mongolian government expects to pass a new foreign direct investment law this year to streamline the approval of investments by foreign state-backed firms, according to a senior official.

Saikhanbileg Chimed, a member of parliament and the chief of the cabinet secretariat, said, under proposed legislation, investment by foreign state-backed firms in Mongolia's strategic industries would be vetted by the Ministry of Economic Development.

"The process is quite time consuming now, (and) the new law will simplify and quicken the process," he said, adding that the industries covered included banking, mining and telecommunications.

Current law stipulates that foreign state-backed firms buying more than a 49 per cent stake in an asset in the industries need approval from parliament, he said.

The parliament is in recess and will resume in October.

The proposal to cut red tape comes as the country grapples with slower economic growth, as commodities prices, especially those of its key exports - coal and copper - fall.

A marked economic slow-down in the mainland, its largest export market for the commodities, has not helped.

The landlocked nation tightened its vetting of foreign investment - both by private and state-owned firms - in May last year, just before a parliamentary election that saw a change in government. The move was seen as a populist sop to gain votes amid a heightening of resource nationalism.

In April this year, Ulan Bator revised the law to exempt privately owned foreign firms from the new restrictions.

In addition to bureaucracy, repeated delays at Australian mining company Rio Tinto's giant Oyu Tolgoi copper and gold mine due to disputes with the Mongolian government dented foreign investors' confidence in the nation.

Rio last week put on hold a US$5 billion underground expansion of the project after being told that the parliament would need to approve financing for the project, Reuters reported.

Saikhanbileg Chimed said a meeting between representatives of the government and Rio was needed to resolve "technical issues".

Mongolia was concerned about a US$2 billion cost blow-out from the originally budgeted US$4 billion, which has resulted in a much delayed dividend payout time frame for Ulan Bator, he added.

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Mogi: again, hiding the rates. MNT is now 1,548.26 on August 6, 11.2 depreciation YTD.

BoM holds FX auction

August 6 (Bank of Mongolia) On the Foreign Exchange Auction held on August 6th, 2013 the BOM has received ask and bid offer of USD and CNY from local commercial banks. BOM has sold 25 million USD to the local commercial banks and accepted the bid offer of 155 million CNY. 

On August 6th, 2013, The BOM has sold 28 million USD for Swap agreement to local commercial banks.

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BoM issues 1-week bills

August 7 (Bank of Mongolia) BoM issues 1 week bills worth MNT 301.8 billion at a weighted interest rate of 10.5 percent per annum /For previous auctions click here/

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First 34 Days of New Mortgage Program

August 7 (Cover Mongolia) Bank of Mongolia announcement dating August 1 (in Mongolia only) reports that commercial banks have so far received requests to refinance old mortgages worth 788.2 billion. Banks accordingly have converted 412 billion of these mortgages of 14,598 citizens to 8%.

265.2 billion worth of new mortgage requests were received and 194.1 billion out of these of 3,658 citizens were issued with new rates.

Link to release


TFG CEO M. Bold: The banking system will have no future in the long-term if it doesn't follow central bank rules

August 6 (UB Post) The Executive Director of the "Tenger" financial group, one of the most well-known bankers, M.Bold, spoke with The National Post Newspaper regarding recent issues in the banking sector.

-       What conclusion can you draw about the issue of "Khadgalamj" bank in your position as a person who has been working for many years in the Mongolian banking sector?

I agree with the decision to merge it with State Bank. The capital of depositors will be at risk when the bank's fixed assets are inadequate. The shareholders aren't able to increase these assets and more than half of its loans are unsecured and cannot be paid back. Therefore, the Khadgalamj Bank and State Bank merger is needed in order to protect depositors' interest.

-       Even if the Supervision Department of the Bank of Mongolia revealed that Khadgalamj Bank was operating with a lack of fixed assets two years ago, they still allowed the bank to operate upon meeting certain requirements. Was it a right decision on their part?

Specialists in the banking sector knew that Khadgalamj Bank was operating at a loss. The public can also remember that this bank was a result of a previous merger of two failed banks three years ago. Those two banks' fixed assets were inadequate, shareholders were unable to invest in them, and their credit quality was poor. Hence, they decided to merge those two banks along the same vein that Khadgalamj Bank and State Bank were to merge. Everyone knew that week that those two banks were merging. For that reason, Khadgalmaj Bank was operating under a plan made by the Bank of Mongolia and its stockholders for the past two years. Unfortunately, its operations weren't successful as planned, so they had to take this compulsory measure. It wasn't wrong that the Bank of Mongolia had been taking flexible measures for re-establishing the bank by cooperating with its stockholders. It is more appropriate to take consensual than compulsory measures.

-       After Khadgalamj Bank merged with State bank, depositors withdrew 30 million MNT in just one day. If depositors keep on withdrawing money from their accounts, what difficulties will arise?

It is obvious for depositors to be cautious. Even so, the Ministry of Finance and the one responsible for this bank's supervision, the Bank of Mongolia, claim that bank accounts will still be secure under the state's disposal. Therefore, account holders can be calm.

-       It is said that some interference in Khadgalamj Bank's operation was the cause of this situation. Hence, people believe that political or business people influenced the banks' operations, not only the management of Khadgalamj. Is there any influence, especially political, on commercial banks?

-       I don't know much. I can't say that what happened was because I wasn't involved in the bank's operations. But as a specialist, I confirm that any bank is at risk if others exert some sort of influence on it. Interferences including by the government and political parties increase any bank's risks. On one hand, banks provide credit without conducting adequate research. Specifically speaking, any political influence on a bank's credit policy is very dangerous. On the other hand, stockholders taking endless loans increases this risk. According to the law, a stockholder can take out a loan of up to five percent of their own assets. If their loan is more than their stated extent of credit, the bank will be at risk. Furthermore, the bank's executive administration and board of directors obtaining a credit more than what the law allows can end a bank's future. This kind of loan is called a related party loan. About 30 banks have gone bankrupt within the past 22 years in Mongolia. The commercial banking system has been developed since 1990. Currently, there are 14 banks in Mongolia. Within this period, many banks have closed down due to related party loans or improper administration and lack of relevant management experience. In some cases, political influence is very possible. According to the Bank of Mongolia, Khadgalamj Bank approved loans that were more than the five-percent limit. This is very wrong.

-       How secure are the related party loans that banks provide?

According to the laws and regulations on banking from the Bank of Mongolia, the information on loans which is provided to the related parties should be made public. For example, commercial banks should put this information on their websites. Some banks have recently done this. It is one of the ways of showing that they adhere to the law. There's a clause which indicates that all loans which is provided to related parties shouldn't be over 20 percent of the bank's fixed assets. In other words, if there are four related parties, each of them can only take out a loan of up to five percent. It is prohibited to provide more. The bank is an organization which services the public, and should not intend to enrich shareholders or the administration. The Bank of Mongolia supervises banks in order for them to follow the law. They receive annual, seasonal, and monthly reports from banks. If some banks violate the law, the Bank of Mongolia has the authority to fine banks or shut them down. Therefore, if banks don't adhere to the law, they won't last longer and will be closed soon. This system exists not only in Mongolia, but also in foreign countries.

-       Most of the people are customers of five of the 14 banks. Is this small number risky for these banks' account holders?

The fixed assets of these five banks account for about 90 percent of the sector's assets. It is said that such concentration of deposits is risky. But I think that this situation is expected and normal for Mongolia which has a small economy. Assets placed in many banks lowers the risk, but it makes services more expensive. Every bank rents building space, recruits people, buys computer software systems, and pays salaries to their employees. They won't be able to limit these kinds of costs. In other words, it endangers expenses to be in excess of income. Then, they have no choice but to place this burden on customers and increase their interest rates. Hence, it's important to find a proper way to avoid this situation. The market decides on its own. For instance, while there are five licensed banks in Great Britain, there are 14 licensed banks in Mongolia.

-       How well organized is the Mongolian commercial banking system?

Comparing today with 1990, it has achieved progress. However, if banks violate the Bank of Mongolia's regulations and do not meet its standards, the banking system will have no future in the long-term even if seems to be progressive in the present. There are banks which have good administration and employees, but its structure and systems are very volatile. If stockholders, the board of directors, or the executive administration violate existing regulations, any bank will be at the risk of shutting down. Therefore, if banks obey the sector's laws, their operations can be both safe and stable.

-       Was the issue surrounding Khadgalamj Bank a very big warning for other banks?

Yes, obviously. Learning from this situation, stockholders should have more responsibilities. A bank is an organization which takes people's deposits. Since they have this exclusive right, they should also bear exclusive liability. In other words, they should assume obligations that are equal to their rights. Understanding their own obligations completely is easy to say, but hard to follow on a day-to-day basis. Thus, it's very important to strictly obey the law.

-       It is seen that the banks' unsecured loan rates are high based on monthly statistics. What should've been done to make these loans secure?

The first reason for providing unsecured credit is that the research conducted is incomplete. The bank overestimates the capacity of its borrowers to pay. In actuality, borrowers aren't able to pay back their loans. They deceiving banks by giving them wrong information and hiding their real situation. Another reason is the insurmountable obstacles which are irrelevant to both banks and borrowers. Obstacles include a crisis in the foreign market, fall in prices, and inflation which can affect the credit system. Therefore, the banking environment is a full of risks. Even if there's no risk at all, banks should still be cautious of the danger of a falling comet. The judicial system is also to blame. A main judicial problem is the slow execution of judgment that is usually in favor of the borrower. Sometimes, it takes five to six years to confiscate a borrower's property. Within this period, banks can bear losses and depositors suffer from them. For this reason, if the execution of judgment is faster, the number of unsecured loans will decreased. However, Mongolia's unsecured loans in its banking sector aren't so bad compared with those of other countries.

-       It is believed that the lack of proper checks and balances in the banking sector led to Khadgalamj Bank's failure. Is there any other system of control aside from the Bank of Mongolia in the country?  

The present system of checks and balances is already sufficient. There should be internal control in a bank's structure. This system should control all of its operations. The Internal Control Office should report all problems and violations to the board of directors and shareholders. If the internal control system doesn't operate well, the bank will fail. Its board of directors is actually responsible for supervising the bank. But how far can they control the bank if its shareholders take up a loan? This is where the Bank of Mongolia gets in the picture. It is this organization that looks at financial reports. Apart from this, there is a system of control by independent audit companies. There are many of them – both domestic and foreign audit companies – in Mongolia. Larger banks are controlled by foreign audit companies. Furthermore, foreign companies which set ratings examine banks that operate under international regulation. Another biggest form of checks and balances is by the customers. They are able to control the bank's operation daily. Financial reports are published in newspapers seasonally. People can get professional advice by using these reports. This kind of service is lacking in Mongolia. Market observers draw a conclusion on banks and recommend the best ones to potential customers. But such a dual system of control is not adequate. It should be strong, reliable, and truthful. For Khadgalamj Bank, I guess the lack of internal control led to this situation.

-       How do you think should banks operate in the future?

The stockholders should be very responsible.  The Bank of Mongolia needs to demand more responsibility and accountability from banks. Secondly, the viewpoint of banks has to be changed. A bank is not an organization for profit. It should be of service to the public. Loans from banks have to improve a company's operations and the people's lives. But then, loans don't have to be a burden for debtors. Banks and customers have to negotiate with each other with regard to loans. Consequently, a loan should favor customers and be secure for banks at the same time. In addition, loans shouldn't be destructive for the economy. Banks have to provide loans with stringent requirements to avoid defaults. Banks should develop this viewpoint. The next main thing is that banks should be far from any political influence. For instance, the "Tenger" financial group ordered an issue to be cut-off from any kind of politics and its employees have been following this order since July 1. A financial group is an organization which takes deposits and provides credit without any regard to political views. Hence, the banks' administration and employees don't have to be part of any political activity. The employees of "Tenger" who still want to be involved in politics should make up their minds. They should either choose to independently work in "Tenger" and free from any kind of influence, or be dismissed from their jobs. It is believed that it is very important for banks to be separate from politics. I want other banks to agree with this point of view.

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L.Davaatsedev: Stopping coal export until coal prices rise is bad policy

August 6 (UB Post) Below is an interview with the Director of the administrative board of the Mongolian Coal Association, L.Davaatsedev, about Mongolian coal export.

-Mongolia is expected to export over 30 million tons of coal this year. However, coal export companies have been operating at a deficit and have closed temporarily because of coal's low market price. What's the current state of coal export?

-Mongolia exported 20 million tons of coal in 2011. Mongolia entered China's coal market without any difficulty. In the other words, fortunately China's economic growth sped up in 2009 and China's largest coal supplier, Australian mining companies, were closed due to floods. That's why Mongolian coal export increased dramatically in a very short time. On the basis of this scenario, we saw many negative consequences, even though coal export became the largest part of the Mongolian economy. Mongolian coal export decreased owing to China's economic crisis in 2012. Even though China's coal import rose again, Mongolian exports didn't increase. China's coal import has risen by 40 percent since April, 2012. But Mongolian exports keep dropping.

The main reason Mongolian exports aren't increasing in compliance with the Chinese coal market is supply price. Considering that, mining company operations have been suspended. Domestic and state-owned mining companies supply coal to power plants at any price. Sometimes Shivee-Ovoo and Nalaikh coal mines are required to operate under all conditions. But private mining companies can't handle the situation like state-owned companies. Hence, coal mining companies become stagnant and operate without a profit. Energy Resource company's operation has been suspended since last spring. Its plans to export 30 million tons of coal won't be fulfilled. Fulfilling half of its projected output is a problem too.

-We have a lot of competitors. If exporting coal at low prices is unprofitable, should we wait until there's a price increase? Will power and coking coal prices go up? Is there a tendency for coal's price to rise?

- There's very little tendency for metallurgy coal prices to rise in the next two to three years. Although China's growing economy is slowing down, the situation will become better someday. But stopping coal export until coal prices rise is bad policy. It's time to research recent situations and decide how to operate when coal's selling price is low. I mentioned before that Mongolia became a big coal supplier "fortunately". From the beginning, coal export wasn't well planned. There was no long-term contract on coal export between our two countries. The amount of coal export wasn't estimated. Mongolia faced a lot of bad consequences because we didn't plan any infrastructure in accord with the amount of coal to be exported. The biggest problem is transportation costs. A high cost is required to transport that bulky commodity. Policy for rail transport, which has the lowest cost, was completely forgotten. Nearly 10 years have passed since coal export was intensified. If transportation and infrastructure were planned in 2003, the export cost would've been lower today. Besides, private companies' projects to construct railway have stopped due to government policy. If this work has stopped, the government should immediately implement another project for railway.

We should export coal for permanently, for the long term. In other words, it's time to conclude an agreement with both China and Russia within the framework of strategic partnership. It is not about negotiating coal prices. Whereas, it should be decided to maintain stability for the coal market at the level of international contract negotiation.

- Coal is a bulky but rather cheap commodity. The cost of mining and transportation should be low in order to increase coal export. Is there any opportunity to decrease its cost before export?

- It's impossible to decrease the cost of machinery, salary, fuel and spares. However, private companies are trying to decrease costs. Other costs contributing to the cost of export are high. Therefore, coal's mining and export cost is higher than coal's market price. Firstly, transportation cost. Secondly, the customs fees of Mongolia and China. Decreased tax can be negotiated between the two countries. As well as royalty tax, which is determined by mining standard prices. The method of setting standard prices is completely in contrast with real business environments. It should be revised and scaled down. If export is running, taxes on coal mining will be centralized inland revenue. In other words, base tax will be unchanged. Raising revenue from royalty leads to lost revenue from base taxes. If mining company operations were normal, they would've paid company income tax and personal income tax, not only mineral resource rental tax. If the government revises those tax policies, improves the methods of setting taxes, fees and standard prices; and lightens taxes, it will reduce the expenses of coal. The Mongolian Coal Association has been working on this issue with related organizations and ministries for six months, but we haven't achieved any results.

- Mongolia became the number one coal exporter to China in 2011. Today, which position does Mongolia take in China's coal import market.  

- Even if we don't export our coal, China won't be ruined and run out of coal, because there are so many competitors exporting coal to China. We placed second or third as China's top coal exporter three years ago. But today, we aren't even included in the top six. Other countries have already taken over our place in China's coal market. Australia has placed first again. After Australia, Russia is striving to become its top exporter. Russia is competing with its Tuva coal mines. Canada and African countries are also working hard. We've lost our position in this market because of trying to export coal at higher prices. Mongolia accounted for about 40 percent of China's coal import at our peak period. Now, we account for only 17 percent. It's hard to take back our lost position. Since Mongolia has opened two or three coal mines with high quality coal, it needs effective operations. Mongolia spent a lot of money on discovering coal fields. Therefore we should use these coal mines effectively.

- It is said that China will ban low-calorific coal import in order to boost its domestic mining corporations. If this project adopted, will it affect Mongolian coal export?

- China doesn't import low-calorific and brown coal from Mongolia. This project might affect  Indonesian coal exporters, but not us.

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Elbegdorj raises possibility of special session of parliament with Speaker, PM

Ulaanbaatar, August 7 /MONTSAME/ An irregular session of parliament can be called if necessary, said the President Ts.Elbegdorj Wednesday

He told it at a meeting with the Speaker Z.Enkhbold and the Prime Minister N.Altankhuyag.

The state head came up with this decision while focusing on nowadays situation of the country's economics, finance and investments.

The three dignitaries also agreed that the government, the Bank of Mongolia and state organizations must solve all problems after evaluating the current conditions.  

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Expectations from the "Lame Duck" Period of Mongolian Presidency

By Mendee Jargalsaikhan

August 1 (Mongolia Today) Following narrow victory in the sixth presidential election, President Elbegdorj was sworn into his second-term with a first-ever grandiose celebration of displaying the country's military and national symbols on July 10.

The second term presents more opportunity for Elbegdorj, a former military journalist, a veteran of the 1990 democratic revolution, and influential leader of the Democratic Party (DP). He does not need to worry about seeking support from the leaders and major factions of the DP for securing 'a ticket for re-election' since the 1992 Constitution does not allow an incumbent president two run for a second re-election.

In retrospect, his dependency on his own party constrained his ability to influence the uni-cameral legislative body, State Ikh Hural, and its-appointed executive body, Zasagiin Gazar.  Even though Elbegdorj was pressuring the Mongolian People's Party (MPP)-led government (of 2008-2012) for blurring the line between legislative and executive bodies by cross-appointing parliament members to the Prime Minister's cabinet, he became noticeably silent and reluctant to criticize when his own party filled 17 out of 19 cabinet posts with serving parliamentarians after the 2012 parliamentary election.

Another aspect Elbegdorj was strongly associated with, is his fight against widespread corruption in the Mongolian bureaucracy.  However, his affiliation and support from the DP has been clearly constraining his ability to direct the Independent Authority against Corruption (i.e., anti-corruption agency) to investigate DP-affiliated politicians and businesses.

Although the MPP could be a logical target of anti-corruption efforts because of its dominance of politics and the economy since 2000, numerous allegations involving  DP-affiliated individuals appear to have been ignored.

Wither Elbegdorj's Second Term?

Given the complex nature of  Mongolian political institutions with a complicated set of checks and balances between the legislature, executive government, and presidency (but, not necessarily judicial branch) and visible competitions of business factions within the two dominant political parties, what can we expect from the 'lame duck' period of President Elbegdorj, who is at the height of his political career at the age of fifty?

In general, we would expect that he would continue to build up his political career and prestige by critically engaging the DP-dominated legislature and fragile coalition government and also broaden the power basis of the DP by asserting influence in judiciary and security organizations.  Specifically, he continues to be an influential player in areas of foreign and defense policies and judiciary while maintaining some influence on the legislature and executive government.

By a fate of geopolitics and geo-economics, Mongolian foreign policy is the most stable.  The over-riding priorities are to develop balanced, good neighbourly relations with its two neighbours, China and Russia, to increase interests of 'third neighbuors', which includes developed democracies, and to enhance the country's visibility in the international community.

In his first term, President Elbegdorj upheld these priorities, but also added his 'innovations' of denouncing the death penalty to attract interest from the European Union, visiting Mongolian ethnic groups in China and Russia prior to meeting with Chinese and Russian leaders, with landlocked democracies like Kyrgyzstan and democratic activists of Myanmar, and re-emphasizing Mongolia's ties with North Korea.  Although his predecessors made attempts at some of these initiatives, he was most explicit and direct in this pursuit.

Since Mongolia's natural resources, peacefulness (not experiencing inter and intrastate armed conflicts), and free market arrangements are attracting foreign investors, President Elbegdorj will have no major challenges in foreign policy areas – except, accommodating conflicting interests of the state-owned enterprises of two neighbours and multinational corporations.

Security and defense is another policy domain in which President enjoys privileged authorities as a Head of National Security Council – the top consultative body composed of President, Speaker, and Prime Minister and charged with considering any matters relevant to national security.

During his first term, President Elbegdorj, using this authority, suspended the issuance and processing of both mining and exploration licenses in 2010 until comprehensive revisions were made to the existing mining regulations.  As Head of National Security Council, the president could interfere with any government policies and issue directives in consultation with Speaker and Prime Minister.  Therefore, President Elbegdorj has the ability and experience of using the national prerogatives to securitize any matters.

Also, being the Commander-in-Chief of the Armed Forces, President Elbegdorj has direct authority over the military and shared-authority over the Border Troops, police, and intelligence.  With his previous military experience, he is likely to support the military's deployments to the UN missions in South Sudan and coalitions operations in Afghanistan.  He has been the first Mongolian president visited its peacekeeping contingent in South Sudan and his son served as an UN observer.  A key challenge, he needs to tackle is to push other security organizations to catch the military's reform – fueled by its extensive peacekeeping deployments and training, and to integrate the military organizations, especially the military and border troops.

The judiciary is the last domain in which the President enjoys the most influential prerogatives of nominating three out of nine members of the Constitutional Court and the Prosecutor General and Deputy Prosecutors to the Parliament as well as appointing members of the General Council of the Courts and judges at all level. Although Elbegdorj's nomination of a party-affiliated politician to the Prosecutor General, one oversees investigative processes by the anti-corruption agency, police, and other investigative authorities, demonstrated any political party's will to assert influence in judiciary, he has been a notable supporter of  judicial reform – which aimed to reduce political influence in judicial process and to increase professional integrity of judiciary, including law enforcement agencies. As indicated at his first meeting with judicial and law enforcement professionals right after this year's election, he will continue to support a comprehensive legal reform, which he initiated three years ago.  The reform aims to disconnect from the communist structures by enhancing professionalism, independence, and accountability of the judicial institutions.  If the reform succeeds, the influence of the political parties on judiciary via their nominated president would be constrained and independent judiciary would enhance the legitimacy of democratic institution. Relatedly, current criticisms about one-sided investigations by the anti-corruption agency would be unsubstantiated – as the Independent Authority against Corruption gains its impartiality.

Besides Presidential influence over judiciary, foreign and security policies, the President with his dual legitimacy of representing the population (unity of the nation), will maintain noticeable influence on the legislature with his power to veto and initiate legislation and on the Prime Minister with his rights to issue directives and to introduce a motion of no confidence to the parliament.  In the second term, President Elbegdorj seems to be have more opportunities to increase his political career by distinguishing himself from the fragile, DP-led government and to enhance the political power base of the DP with the DP-led parliament as well as governorships and citizens' representative khurals at the provincial level before the 2016 parliamentary and local elections.

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MPP Party Conference discuss election defeat

August 6 ( The Mongolian People's Party (MPP) Party Conference meeting concluded last night after a nine hour closed door discussion. 

The MPP Chairman U.Enkhtuvshin opened the meeting with a speech on the achievements and failures of the past year and on "realization and future objectives". U.Enkhtuvshin has been the Chairman of the Party for a little over a year after being elected in July 2012. Enkhtuvshin reflected on the losses of MPP in the local, Presidential and Parliamentary elections, stating that although figures showed a loss to the Party, in fact he believes it demonstrates a pattern of increasing trust in the Party. For example, MPP received 30% of the vote in the Parliamentary election in May 2013, 33% in local elections in December 2012 and 42% in the recent Presidential election. He stated that the Party must continue without losing hope of faith.

MP R.Erdenebat gave a speech expressing his opinions on the Party"s reform before the meeting was secluded behind closed doors. However it was revealed that the 27th Party Congress of MPP was decided to be held on October 27th with the theme of "Congress of Reform and Unity".

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Ulaanbaatar, August 6 /MONTSAME/ The government shall not force a company to work, but will simply cancel a contract with it and even transfer its duties to others if its work is poor.

The Prime Minister N.Altankhuyag Monday said it at a regular meeting called "Time for Great Construction" where Ministries report on the great construction works running nationwide. According to the Minister of Road and Transportation, a construction of a paved road between the city and Dornod aimag is going with 35 percent, being performed by six companies. Works by the two are of poor quality.

Moreover, the running of a road between the city and Khovsgol aimag is being performed by the "Beak Seok" company with 22 percent so far, thus it has been decided to quit the contract with this company.

It was expected that the construction of Ulaanbaatar-Bayankhongor auto road would be completed before the Naadam festival, but it has been postponed until August 24 due to some technical problems, the Minister of Roads said. In addition to this, a course of the construction of a base structure of the Ukhaakhudag-Gashuunsukhait railway is running with 32.9 percent, missing the graphics, the Minister added.

Reports were also given by the Minister on other works such as implementation of the "Street" project, a construction of the fifth thermal power station, a sewage plant in Nalaikh district, a roads expansion in Yaarmag micro district.

After the reports, the PM obliged the companies to complete the construction in time and ordered related Ministries to impose responsibilities upon those companies doing works poorly and to annul the contracts. 

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Asian Neighbors React to Mongolian Presidential Election

By Alicia J. Campi

August 2 (The Jamestown Foundation) Mongolia is in the midst of its traditional summer holiday slumber following its national naadam (Mogi: Naadam, please) celebration from July 9–11 (Mogi: July 11-13). But the fact that Tsakhiagiin Elbegdorj of the Democratic Party won a second term as president of Mongolia on June 26 (see EDM, July 8) has both calmed the nerves of its Asian neighobors' investors and spurred some governments to move even quicker to develop new avenues to exploit Mongolia's income derived from its vast mineral resources. The Koreas and India, as well as Japan and Australia, see themselves as profiting from his victory, while China and Russia, the two border neighbors, are discomforted by the election results. 

During his first administration, Elbegdorj established strong ties to both the Republic of Korea (ROK—South Korea) and the Democratic People's Republic of Korea (DPRK—North Korea). Several days after the election, Lee Sikoo, CEO of South Korea's Kyeryong Group, paid an official visit to Mongolia to discuss major construction projects for redevelopment of the capital city and national highways. Kyeryong will construct a 365-kilometer highway between Ulaanbaatar and the northern border town of Altanbulag—the site of a Mongolian-Russian free trade zone. The Korean company runs construction projects in Russia, South Asia and the Persian Gulf (, July 7). On July 26, the ROK's Korean Trade-Investment Promotion Agency (KOTRA) launched its "KOTRA-Ulaanbaatar" Business Center, "designed to strengthen economic cooperation between Mongolia and South Korea, to increase foreign trade demand and also support South Korean businesses and manufacturers to invest and operate in Mongolia…" (, July 20).

Meanwhile, presidential national security and foreign policy advisor Lundeg Purevsuren was in Pyongyang on July 15–16 to discuss bilateral cooperation (KCNA, July 17). This visit is a continuation of Elbegdorj's policy to deepen connections with the DPRK regime through cooperation in trade, IT and human exchanges. In June, HBOil JSC, a Mongolian oil trading and refining company, acquired 20 percent of North Korea's not yet fully operational Sungri refinery in the Rason City Special Economic Zone. HBOil will bring Mongolian crude via Russia to Sungri, which will export the refined products back to Mongolia. This investment is part of Mongolia's plan to end its energy dependency on Russia and China and develop the DPRK's east coast Rajin port city to reach Asian customers. On July 4, in Pyongyang, the two countries signed an agreement on IT exchanges and cooperation. Mongolian livestock experts also are working to develop massive stockbreeding grass zones by reclaiming the Sepho plateau in North Korea's Kangwon Province. The Mongolian Ministry of Labor reported that, as of April 2013, 1,749 North Koreans are working legally in Mongolia (in textiles and construction). This is second to 5,976 Chinese foreign workers (Yonhap News Agency, North Korea Newsletter No. 271, July 18).

Mongolia and India signed a comprehensive partnership agreement in September 2009 when Elbegdorj made India his first overseas visit upon becoming president. At his second inaugural, the Indian Minister for New and Renewable Energy Farooq Abdullah presented Elbegdorj with an invitation from President Pranab Mukherjee to again visit India. The Indian ministry's press release stated: "The government's decision to [send] a senior Cabinet Minister to the President's inauguration underlines the importance that India places on further strengthening its bilateral relations with Mongolia" (IBNS, July 16). During his trip, Abdullah also met with Mongolia's Foreign Minister Lu Bold and Minister of Environment Sanjaasuren Oyun

Elbegdorj's oath-taking ceremony was attended by ministerial-level delegations from Russia, Japan, China and France. His re-election was not a surprise, although commentary in the foreign media did not mention that his percentage of the vote in the three-way contest slipped a full percentage point from his 2009 victory. His 50.23 percent was just over the threshold needed to avoid a runoff, but was not so overwhelming as to permit him to push forward policies that go against the electorate's rising tide of "resource nationalism." It would be a mistake to see Elbegdorj as receiving a mandate for easing the regulatory environment for foreign investors. Rather, his re-election likely will mean that he will accelerate his anti-corruption initiatives targeted mainly toward opposition party officials and continue to rebalance the Chinese monopoly in foreign investment and trade through a diversification of foreign trade partners and the strengthening of domestic upstream technical capacity. Thus, negotiations with foreign investors will continue to be complicated.

Evidence of Mongolia's direction is seen in the continuing dispute around Oyu Tolgoi (OT), a giant deposit expected to produce annually 1.2 billion pounds of copper worth over $4 billion, 650,000 ounces of gold worth $800 million, and 3 million ounces of silver worth some $100 million. Commercial production of the first 40,000 metric tons of copper concentrate destined for China was ready for transport in early June, but was held up throughout the election campaign period by Mongolian customs authorities. OT, 66-percent owned by Anglo-Australian Rio Tinto and Canadian Turquoise Hill Resources and 34-percent owned by the Mongolian government's Erdenes Oyu Tolgoi (EOT), is seen as the linchpin for accelerating foreign investment. When shipments began moving on July 9, the relieved international financial community presumed that Elbegdorj's government and Rio Tinto had agreed that sales revenue would funnel through the Mongolian banking system as Minister of Mines Davaajav Gankhuyag had demanded at his June 28 press conference (, July 18). However, EOT continues to claim that there are "22 points of dispute" with Rio Tinto involving cost overruns, funding of a feasibility study for a $5 billion Phase Two underground expansion, employment and pay of Mongolian workers, and repatriation of earnings (, July 18). It is possible that Mongolia's decision to allow the shipments is linked to low revenues in the 2013 State Income Fund because of the export delay, which could cause a 60-percent fall in GDP (, July 7). 

Another disappointment for foreign investors, especially China and Russia, was the July 19 announcement that three Mongolian firms would be given a one-year contract to start mining the West Tsankhi block of the enormous Tavan Tolgoi (TT) coal mine (, July 19). This track was awarded in 2011 to an international consortium including China's Shenhua Group, Russian Railways (RZHD), and the United States' Peabody Energy, but was delayed when Japanese and South Korean bidders protested. OT copper and TT coal production are tied to the Mongolian parliament's estimate that the country's foreign trade balance will be positive in 2014—for the first time in five years. While President Elbegdorj's re-election should bring about a reduction of China's monopoly over Mongolia's exports and of dependence on Russian energy, his plans involve greater reliance on Russian rail transport to reach new Asian customers.

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Multinational peacekeeping exercise begins in Mongolia

FIVE HILLS TRAINING AREA, Mongolia, August 4 (U.S. Marine Corps) -- Exercise Khaan Quest, one of the world's largest training exercises focused on peacekeeping operations, officially started as military leaders and senior government officials from the U.S., Mongolia and other regional partners gathered here, Aug. 3.

This year marks the 11th iteration of the annual exercise, which has played a part in training thousands of service members from around the world in peacekeeping and stability operations. 

"Khaan Quest has become one of the signature training events for the participating nations," said Lt. Gen. Ts. Byambajav, Chief of General Staff for the Mongolian Armed Forces. "At this moment we have more than 150,000 international peacekeeping troops performing their duties overseas … this is a result of the Khaan Quest exercises."

Approximately 1,000 military personnel from 13 nations are taking part in both a platoon-level field training exercise, enhancing PKO skills for multinational troops on a tactical level, and a battalion-level command post exercise, which sharpens decision-making capabilities during peacekeeping operations by exercising scenario-based missions.

In addition to the FTX and CPX, service members are also conducting joint-combined engineering civic action program (ENCAP) projects, as well as cooperative health engagements and medical subject-matter expert exchanges in and around Ulaanbaatar.

Navy Adm. Samuel Locklear, commander of U.S. Pacific Command, joined the Honorable Ms. Piper Campbell, U.S. Ambassador to Mongolia, as part of the international delegation at the opening ceremony. He emphasized the importance of building interoperability between the participating nations.

"It's all about moving forward together," said Locklear. "So as we begin this very important exercise, I ask each and every one of you to foster the understanding and trust that the world will depend upon."

Following remarks from Mongolian Prime Minister Norovyn Altankhuyag, platoons from Mongolia, Nepal, South Korea, Tajikistan and the U.S. conducted a pass-and-review, saluting the international delegation as they marched by, while Mongolian paratroopers slowly descended into a nearby field. 

The ceremony concluded with a performance by MAF cavalry troops, displaying precision and riding expertise as they executed drill movements on horseback. 

Despite mostly sunny skies, a light drizzle began to fall as U.S.-Mongolian military leadership toured the area after the ceremony. In Mongolia, Byambajav explained to Locklear that it is a sign of good luck when a visitor brings rain.

Judging from the way this year's Khaan Quest exercise has started, it appears that luck might be on their side.

"As far as peacekeeping exercises go, this is one of the best in the world," said Locklear. "And I'm sure it will only get better."

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Multinational delegation kicks off engineering project, medical exchange

NALAIKH DISTRICT, Ulaanbaatar, Mongolia, August 4 (DVIDS) – A ceremonial band played traditional Mongolian music as local residents began filling the district square, and children on scooters and roller skates darted back and forth. 

Despite all the action, many directed their attention to the static formation of service members wearing strange military uniforms.

Military medical professionals and engineering specialists from Canada, Republic of Korea and U.S. stood side-by-side with their Mongolian counterparts at the opening ceremony for the engineering civic action program (ENCAP) project and cooperative health engagements/subject matter expert exchange during exercise Khaan Quest 2013, Aug. 2.

"I believe that the cooperative health engagement and ENCAP (project) in the frame of the Khaan Quest 2013 multinational peace support operations exercise will make significant contributions to the reform of Mongolian Armed Forces by cooperating and exchanging experiences side-by-side with other nations," said Brig. Gen. R. Sukhbat, commander of general purpose troops, Mongolian Armed Forces.

Engineering and construction specialists from 9th Engineer Support Battalion, III Marine Expeditionary Force and 96th Troop Command, Washington Army National Guard, are working with 017 and 338 Engineering and Construction Units, Mongolian Armed Forces and Canadian Forces' 1 Engineer Support Unit.

The ENCAP project at Erdmiin Orgil school started July 20, and is making steady progress, said U.S. Marine 1st Lt. Matthew Elliott, a platoon commander with Alpha Company, 9th ESB. The team has made great strides to replace the roof, install new windows, apply new stucco to the exterior walls and construct a handicap-accessible at the front entrance of the school.

Just a few blocks away at Golomt Elementary school, Indian and South Korean military medical professionals have joined the trilateral U.S.-MAF-Canadian team to provide optometry, dental, and women's health education and treatment for Nalaikh residents.

In addition to providing services to the local community, the multinational CHE also provide an ideal setting for expertise exchanges between military and civilian medical professionals, said Sgt. 1st Class Fernando Sangco, noncommissioned officer-in-charge of the exercise's cooperative health engagements and operations NCO with the Alaska Army National Guard Medical Detachment.

"These projects will improve readiness … but the impact on the community will be even more profound," said Mr. Kirk McBride, deputy chief of mission for U.S. Embassy, Ulaanbaatar. "The school renovation and medical outreach projects are great examples of what happens when great friends work together."

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Social, Environmental and Other

Why this man ran through the Gobi Desert

August 5 (CNN) Ray Zahab talks to CNN about his running expedition across the Gobi Desert.

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Scholars discuss Central Asian epics in Mongolia

ULAN BATOR, Aug. 5 (Xinhua) -- More than 100 scholars from around the world gathered here on Monday for an international symposium on the Central Asian epics.

During the three-day event, the experts from Mongolia, China, Russia, the United States, South Korea, Kazakhstan, Kyrgyzstan and UNESCO will share their research achievements on mythological and heroic epics.

Mongolian Minister for Culture, Sports and Tourism Tsedevdamba Oyungerel said the symposium was aimed at preserving the oral traditions.

The Mongolian epic, or Mongol Tuuli, was inscribed on UNESCO's Intangible Cultural Heritage List in 2009.

Chao Gejin from the Chinese Academy of Social Sciences briefed his peers on three major heroic epics in China's ethnic minority communities - Manas, Janggar and Geser.

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PHOTOS: Fossil hunting in Mongolia

August 5 (Deerfield Review) I just returned from two weeks in Mongolia searching for fossil flowers. Why go halfway around the world to look for fossils of flowering plants when there are plenty of fossil flowers closer to home? Easy — because nobody has really looked there before.

A little background first. Mongolia is a large country in Central Asia with a population very close in size to the city of Chicago (Mongolia: 2.89 million; Chicago: 2.71 million). But that is where the similarities end. More than half of the population (roughly 1.7 million) lives in one large, sprawling city, the capital, Ulaanbaatar (also spelled Ulan Bator, or "UB" for short). Most of the country is rural with very few people; it ranges from mountains and forests mainly in the north and west, to steppe in the center, and desert in the south; and it is breathtakingly beautiful. The elevation is high, the climate is continental, and with Siberia to the north you can imagine what winters are like. Mongolia is a landlocked country with Russia to the north and China to the south. Inner Mongolia is an Autonomous Region within China and it borders the country of Mongolia to the south. The Gobi Desert is shared by Mongolia and Inner Mongolia.

My trip to Mongolia in late June and early July was my fourth time conducting fieldwork there. We have been working in the Mongolian steppes, which resemble the shortgrass prairie of Montana and North Dakota, so much that it is easy to get confused—until a herd of Bactrian camels makes an appearance, or perhaps a ger, the typical Mongolian house, known elsewhere as a yurt. The Mongolian steppe supports the pastoral lifestyle of many Mongols, who raise goats, sheep, horses, yak, cattle, and camels on the lush grass growth that formerly supported the many horses of Genghis Khan's army. Mongolians eat a lot of meat, and they consume a great diversity of dairy products made from their livestock. Being a vegetarian in Mongolia would not be easy!

About those fossil plants… Mongolia is well known for its fossils. Paleontologists have been exploring and collecting dinosaurs in Mongolia for many years, perhaps most famously Roy Chapman Andrews in the 1920s. Mongolia has an abundance of Jurassic and Cretaceous rocks, which have yielded numerous dinosaurs, especially in the Gobi Desert.

Dinosaurs are great and all, but you can't build an ecosystem on dinosaurs! What did they eat? There had to be lots of plants there to support all of those herbivorous and carnivorous dinosaurs. That is what we went looking for: the plants. In particular, we are interested in finding fossils of flowering plants, or angiosperms. The flowering plans first appear in the early Cretaceous, and then diversify rapidly through the middle Cretaceous, such that by the late Cretaceous they are the dominant group of plants in almost all ecosystems. My collaborators and I are interested in understanding that early diversification of the flowering plants. I will explain more about fossil flowers in another post in the near future.

In our fieldwork we have visited about ten different places in Mongolia so far. Some are natural exposures of bedrock on bluffs and hillsides, and others are coal mines. Coal is, after all, plant material that has been deposited in a peat swamp and then compressed and metamorphosed. Mongolia has a great abundance of coal deposits, which are being mined to support domestic and foreign energy needs. Some of these deposits in Mongolia have been only minimally compressed and metamorphosed, and they are called "lignite" rather than "coal." Lignite deposits are great for studying fossil plants because the plant material is less compressed than in coal and can be disaggregated and studied using light microscopy and other methods.

Our field sites are mainly south of Ulaanbaatar in the gently rolling hills and plains of the steppe, where we camp under the vast Mongolian sky. Our field group consists of ten people and three four-wheel drive vehicles. Everything we need for seven or so days in the field must be brought with us, including food, water, tents and other camping supplies, tools for digging, boxes, newspaper for wrapping fossils, and Ziploc bags for rock samples, which we disaggregate back in the lab to isolate small seeds, cones, flowers, and fruits (called "mesofossils"). As the trip progresses, fitting everything in the vehicles becomes more challenging as the rock samples take up more and more room; eventually we must strap some supplies on the roof of the vehicles to make room.

We have camped in some amazing places. The grasslands seem to go on forever with no trees or bushes in sight. In some places there are ephemeral lakes that draw hundreds or thousands of animals to drink. Tempting as it may be, it is best not to set up camp too close to the water! Then there are the less picturesque locations—coal and lignite mines can be very messy and unpleasant environments when it comes to camping. When we are working at a mine we try to camp upwind from the mine, and far enough away that it is not too noisy or dusty when the wind shifts.

The first task at a new fossil site is to scout the locality to look for the kinds of rocks that we need. For mesofossils we normally have best luck with clay and siltstone with fragments of organic material. In the field we often can't tell whether the sample will be good or not; we only know that for sure once we get it back to the lab and process it. If 50 percent of the samples are good we feel lucky! We collect one to several gallon-size Ziploc bags of rock from as many sample points as possible, and then photograph the sample locations and take GIS coordinates for future reference. Sometimes we try to relocate samples that turn out to be really good, and photographs and GIS data are critical for this. We also try to split blocks of claystone and siltstone to look for compression fossils ("macrofossils"). If we are lucky we will find a nice assemblage of fossil leaves to complement the mesofossil assemblage.

When we are working in lignite mines we search for sections of lignite where the plant material is not too compressed, remove samples, and box them up to be shipped home for processing and study. The macrofossils require extra care because they are very delicate, and the roads are rough! Each macrofossil is wrapped individually in newspaper. When there is a part and counterpart for a particular fossil (the two sides of a block that have been split open), these must be wrapped separately but kept together; otherwise, someone not paying attention might think they are two separate fossils. All of the wrapped macrofossils are carefully packed into boxes, with generous padding of crumpled newspaper on the bottom, sides, and top.  Macrofossils must be packed vertically on edge in the boxes (something most novice collectors don't realize); if they are packed horizontally, they are likely to break.

Yes, I have lots of rules for field work! But it is for a reason. All of this material must be securely packed into the vehicles and carried along for the rest of the trip. Did I mention that the roads are rough? Careless packing of the collections can result in great damage by the time we get back to UB. These trips are expensive, and the last thing we want is to have the fruits of our labor destroyed in transit!

At the end of a day of field work we are often quite a sight, especially if we were working in a lignite mine! So it is back to camp to get cleaned up. But with no running water, cleaning up consists of wiping down with baby wipes (unscented ones for me!). Although it can get pretty hot during the day, especially in June and July, evenings cool off reliably and are very pleasant. Our camp cook has prepared a nice meal, and if it is not too windy we dine outside and watch the sun set over the horizon.

After a couple days at a site we break camp and move on to the next locality. Not a bad way to spend a couple weeks of the summer!

A special thank you to Masamichi Takahashi, Peter Crane, and Andrew Leslie for some of the images used in this post.

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International jazz musicians to come to Mongolia

August 6 (UB Post) The Ministry of Culture, Sports, and Tourism; "The Giant Steppes of Jazz" NGO; and Ulaanbaatar Jazz Club will implement a project aimed at improving jazz music education among the people. In first stage of the project, the Director of the New York Jazz Music Association, drummer Rick Hollander; a professor at Paris College of Music, Danish-saxophonist Martin Jacobsen; Korean guitarist Jin Woo; and a professor at Munich College of Music, contrabasser Martin Wenker will come to the country to teach professional jazz music from August 23 to 27.

Students of the Music and Dance College as well as musicians can participate in this training which will take place in Ulaanbaatar Jazz Club starting at 9:00 pm. These artists will give a concert with winders and saxophonists of the Music and Dance College in their concert hall on August 26. In second stage of the project, the "Ulaanbaatar's Jazz Evening" event will be held from October 1 to 8. Within the scope of this concert, American music producer Gil Goldstein along with French music producer and composer Polonski will rearrange Mongolian folk songs and modern songs in the style of jazz, which will be performed by Mongolian artists onstage.

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Starry Nights in Mongolia

August 6 (Epoch Times) "Don't forget to look up at the stars," advised my cousin when I announced a trip to Mongolia. "They flash and twinkle like nowhere else."

Once I arrived, though, it was the vast, open horizon that seized my attention: sprawling expanses of grassland steppes; mountain ranges as jagged as a dinosaur's back; and wind-carved desert sands rippling down majestic dunes. Three times the size of France, Mongolia's population totals 2.9 million, fewer than the throngs that pervade Manhattan on a weekday. 

After seventy years under Soviet domination, this remote landmass, tucked between Russia and China looks and feels like a country that survived near extinction and now controls its future. It won independence in 1990, transformed into a democracy, and then discovered a rich pile of coal, copper, and gold.

Mongolia's rugged, developing tourist infrastructure appealed to my adventurous sensibility. I arrived in Ulaanbaatar, Mongolia's capital, mid-June, on an overnight flight from New York via Seoul.

A driver from UB Guesthouse greeted my traveling companion, Michael, and I at Chinggis Khaan Airport. My guidebook listed pages of guesthouses with more or less the same $20 a night price (at 1,450 tugriks to the dollar) for a Spartan room with a shared bathroom. What sold me on UB was its location in Baga Toiruu, the historic neighborhood where Ulaanbaatar originated. They also arranged excursions outside the city. I was keen on journeying through the Gobi Desert.

The UB Guesthouse staff was friendly and attentive. Bolormaa (Bobby) Byambajev, a native of Ulaanbaatar, and her Korean husband, David Kim, started their lodging and touring business 14 years ago. Bobby offered us responsive, insightful travel guidance from my first e-mail queries throughout our stay.

Our first day, Michael and I strolled to Sukhbaatar Square, the city's elegant centerpiece. It stretches out like a vast rectangular carpet, with an enormous, bronze memorial of Genghis Khan commanding its entire north-side block. The Soviets prohibited Mongolians from paying tribute to the 13th-century legend who built the world's most extensive, contiguous land empire, stretching from the Caspian Sea to the Pacific Ocean. His armies had, after all, ransacked Kiev and imposed Mongol rule on most of Russia for nearly 300 years. 

Since achieving independence, Mongolians celebrate him with unbridled devotion. The international airport, city university, and a luxury hotel bear his name and image, as do Chinggis Khaan (as he is known locally) beer, vodka, energy drinks, and merchandise.

The pretty salmon-colored State Opera and Ballet Theater inhabits the east side of the square. The Mongolian Stock Exchange, established in 1992, stands opposite it. Many of the city's most notable landmarks, revolve around Sukhbaatar Square. We walked south, across Peace Avenue, to the sleek, five-star, luxury hotel, shaped like a sail, that dominates the skyline—the Blue Sky Tower and Hotel, all 23 stories of shimmery floor-to-ceiling, aqua-tinted glass. A flash of vertigo struck me as I gazed at the magnificent views of the city from the top floor lounge. 

Metro bearings now established with remarkable ease, we were ready to plunge into a rural adventure. We poured over a map with Bobby. An hour's drive from Ulaanbaatar to Terelj National Park looked like a good start. A two night stay in the guest ger—a Mongolian round, felt-covered, movable tent—of a host nomadic family would offer valuable insight into whether we were fit for a longer Gobi trip. The next morning Buggi, our airport driver, picked us up for the bumpy ride on the pot-holed highway. 

Along the way, we visited Tsonjin Boldog, the sacred grounds where the young Genghis Khan discovered a golden whip, signifying future power and success. An iconic 250-ton steel statue of the Mongol hero on horseback, stands 15 stories high, and dazzles from the distance like a silvery meteor. Up close, it's a remarkable vision: the world's largest monument of a horse and rider posed atop a two-story, circular visitor center.

Approaching Terelj, massive, granite boulders littered the alpine mountains. A crisp June breeze wrapped us under a canopy of brilliant, blue sky. We arrived just as a traditional Mongolian arts and sports performance swung into action at a nearby camp. We spent the afternoon entranced by folk dancing, contortion, archery, and horse racing. For the next two days, we hiked verdant cliffs, rode horseback, and savored tasty stir-fried noodle and soup dishes that our host family prepared. 

A week into our trip, and I still hadn't glanced at the night sky. 

The Gobi

Bobby teamed us up with two other Guesthouse couples, a driver, and a cook. We loaded up 16 gallons of water and enough food and snacks to last most of the 1,700-mile, six-day journey. Then we piled into an old Soviet van headed directly south to the Gobi, which means "waterless" place. Flinging this way and that in our big, clumsy chariot, we felt as giddy and carefree as kids on wild horses. Minty green meadows soon transformed into the bleached sepia hues of a faded photograph.

We drove six to ten hours a day over barely visible tracks on the desert floor—moving along, suspended in time. We rarely saw other vehicles, just herders on horseback and the occasional Mongolian on motorcycle. Flocks of sheep and goats crossing our path produced our only traffic jams. Split-second sightings of quick-footed marmots kept us alert and competitive. 

"Hey, did you notice the stars last night," asked Christian one morning. Responding to nature's call in the middle of the night, he peered skyward and discovered the heavens ablaze. I vowed to view the celestial extravaganza that evening.

But the problem making nocturnal commitments in the Gobi is that by nightfall exhaustion penetrates the bones and seeps deep inside the muscles from the driving, the heat, and the focused attention to all the surprise details an empty cosmos offers. Lacking electricity most nights in our cozy gers, my eyes closed the minute the night awakened. 

More nights of neglected stargazing strummed by. We hiked the flaming, red cliffs of Bayanzag, the dinosaur cemetery that was the inspiration for the film "Jurassic Park." Roy Chapman Andrews, an American zoologist, unearthed the first dinosaur eggs there in the 1920s.

We slip-slided down the spectacular sand dunes of Khongoryn Els, a golden range of desert peaks stretching 110 miles. Sleek, muscled stallions grazed along a stream-fed oasis parallel the sandy slopes. A fine ash carried over by the winds from the Tavan Tolgoi coal basin 62 miles away lightly dusted patches of sand. The world's largest untapped copper and gold mine also resides in this region. 

In Dalanzadgad, the provincial capital of the Gobi Province, we luxuriated in hot showers and stocked up on supplies for the two-day return to Ulaanbaatar.

By the time I finally looked up to the Mongolian stars, a big smiley quarter moon had barged into the nightscape. Bright moonbeams flooded the skies. I barely made out the Big Dipper. If there's one thing I learned from my Mongolia adventure, it's go, look, see now before the heavenly flashes and twinkles fade away.

Giannella M. Garrett writes about travel and culture and is working on her first children's book.

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