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September 30, 2013
From Koryo with …
As you know I have been away for almost the entire last week on a visit to Pyongyang as part of a Chamber of Commerce-lead business trip to DPRK.
As such, I hope you can imagine that I'm a little behind the curve at the moment as North Korea is not exactly a nation that's plugged-in. So I apologize beforehand if I missed something in today's issue, and next few issues should remedy the issue.
I'm toying with the idea of writing a little op-ed piece about the trip, as it was one of my most eye-opening things I've ever done in my life. Suffice to say it broke a lot of my western media-infused stereotypes and saw a nation that's very misrepresented.
Rio Tinto's Oyu Tolgoi Faces Chinese Customs Delay
LONDON, September 23 (WSJ) Mongolia's massive Oyu Tolgoi copper and gold mine has already begun to receive payments for copper concentrate shipped to a warehouse in China but hasn't yet recorded any revenue due to Chinese customs approval delays, a majority-owned unit of Anglo Australian miner Rio Tinto PLC (RIO) said Monday.
The delay represents another stumbling block for the project which has been mired in years of spats over matters, including how to maximize returns and the ratio of foreigners in its workforce. The $6.2 billion Oyu Tolgoi project represents a key pillar of the Mongolian government's economic growth plans but recent attempts to change the terms of the project following the introduction of a more restrictive foreign investment policy has taken its toll on the Mongolian economy. Foreign direct investment is down 43% in the first half of the year, according to a Renaissance Capital note.
Turquoise Hill Resources Ltd (TRQ.T), which owns 66% of Oyu Tolgoi and is majority owned by the project's operator, Rio Tinto PLC (RIO), said the mine "has begun to receive payments from customers. However, as revenue is recognized [only] when customers withdraw concentrate from the warehouse, to date Oyu Tolgoi has not recorded any revenue."
Oyu Tolgoi has produced 160,000 metric tons of copper concentrate and shipped approximately 38,000 tons of concentrate to a bonded warehouse in China between the time it began its first shipments in July and Sept. 18. Another 122,000 tons is currently being held in inventory at the mine, the company said.
Although Oyu Tolgoi has established the logistics process with Mongolian customs officials enabling concentrate to be delivered to the bonded warehouse in China, Oyu Tolgoi's customers are currently engaged with Chinese customs officials to receive the necessary approvals to enable them to collect purchased concentrate from the warehouse, the company said.
Production at the mine has not been affected while customers work through the Chinese customs process, the company added. Oyu Tolgoi's concentrator continues to ramp up and is currently running at full capacity or approximately 100,000 tons of ore processed a day. "Turquoise Hill continues to expect Oyu Tolgoi sales to be aligned with production rates by the end of this year," it added.
Earlier this summer, Rio Tinto decided to put on hold the next stage of Oyu Tolgoi's development and begin laying off some 1,700 workers and contractors after the Mongolian government said project financing for Oyu Tolgoi's next expansion phase would need to be pre-approved by its parliament.
The Mongolian government, which owns a 34% stake in the project, is keen to resolve outstanding issues. Chimed Saikhanbileg, a government minister and chief of the Cabinet Secretariat said last week that Oyu Tolgoi's board, which includes representatives from the Mongolian government, would meet in London this week to discuss the outstanding issues.
At full output, Oyu Tolgoi is set to produce an average of 450,000 tons of copper and 330,000 ounces of gold a year, as well as silver and molybdenum. The International Monetary Fund has estimated that the mine will generate up to one-third of Mongolia's gross domestic product when it reaches full production, which had been expected in 2021.
Troubled Rio mine hits Customs barrier
September 25 (The Australian) RIO Tinto's big Oyu Tolgoi mine in Mongolia has hit another hurdle, with about $US400 million ($424m) worth of copper and gold concentrate stuck in warehouses because Chinese Customs officials have not approved its entry into China.
The latest hiccup at the $US6 billion mine comes after delays to the startup of the mine amid Mongolian national elections and Rio's mothballing of a $US5bn expansion because investment agreements with government have not been signed.
On the brighter side, Rio has managed to have the big concentrator at the Gobi desert mine operating at full capacity before its previous year-end target, meaning if the Customs problems can be cleared, it should bring in more revenue than expected.
The Customs problems are being put down to teething difficulties between Mongolia and China as they work out export logistics, rather than any bad blood between the two countries, which have a notoriously fractious relationship.
Mine operator and Rio Tinto subsidiary Turquoise Hill Resources revealed on Monday night that while it had received payments for some of the 160,000 tonnes of concentrate produced by the mine so far, none had left a warehouse on the Chinese side of the Mongolia-China border, meaning the payments cannot be booked as revenue.
"Oyu Tolgoi customers are currently engaged with Chinese Customs officials to receive the necessary approvals to enable them to collect purchased concentrate from the warehouse," the Vancouver-based Turquoise Hill said.
"As revenue is recognised when customers withdraw concentrate from the warehouse, to date Oyu Tolgoi has not recorded any revenue."
About 38,000 tonnes of concentrate is being held at the warehouse and 122,000 tonnes at Oyu Tolgoi.
This represents about $US400m of contained copper and gold at current prices.
Turquoise Hill, which was formerly known as Ivanhoe Mines and run by mining entrepreneur Robert Friedland, said it expected sales to be aligned with production rates by the end of this year.
The hurdles at the mine have led Colonial First State's Global Resources Fund to sell its holding in Turquoise Hill. "Complications surrounding funding issues and an ongoing dispute with Mongolia's government prompted our exit from Turquoise Hill Resources," the fund said in a recent note to clients.
Aspire aggressively developing Mongolian coking coal
September 24 (FNN) Aspire Mining Limited (ASX:AKM) Managing Director, David Paull details the company's strategy to develop its Ovoot Coking Coal Project in Mongolia.
Prophecy Comments on Information Leaks
VANCOUVER, BRITISH COLUMBIA--(Marketwired - Sept. 25, 2013) - Prophecy Coal Corp. ("Prophecy") (TSX:PCY)(OTCQX:PRPCF)(FRANKFURT:1P2) -
The Company has learned that correspondence it received from the Toronto Stock Exchange has been improperly disclosed to the public. The Company is in the process of preparing a response to this correspondence.
If any material information arises from this exchange of correspondence, the Company will disclose such information in a timely manner.
WOLF PETROLEUM: COMPLETION OF ENTITLEMENT OFFER
September 27 -- Wolf Petroleum Limited (Company, ASX:WOF) advises that it has received applications for 40,819,748 options pursuant to the Entitlement Issue Prospectus dated 28 August 2013.
The Offer is fully underwritten by CPS Capital Group Pty Ltd and the Company has notified the Underwriter of the remaining shortfall of 133,738,636 options.
The Company will now proceed with the allotment process and dispatch holding statements for the applications received.
The Company will proceed with the allotment process and dispatch of holding statements for the remaining shortfall following receipt of applications and cleared funds.
Petro Matad expects seismic to confirm at least two drill targets
September 23 (Proactive Investors) Petro Matad (LON:MATD) confirmed today its imminent seismic programme on Blocks IV and V is expected to confirm at least two targets for drilling next year.
As revealed last week, the Mongolia -focused explorer hired Khet Co to acquire 200 km sq of seismic to begin in early October.
Studies on the two blocks have identified nine sub-basins covering 15,000 sq km, the firm said, revealing six month results.
Of those, two were initially targeted for more intense, early exploration activity.
On Block XX, the firm has preliminary focused on the Toson south area, where acquiring limited 3D seismic over nine separate early leads is being considered, with the intention of de-risking those leads and generating drill targets, Petro Matad said.
In the six months to June 30, the firm posted a net loss of US$3.6mln (net loss of US$6.46mln). It ended the period with US$6.9 mln in cash (2012: US$9.5mln).
Petro Matad Limited: Interim results for the six months ended 30 June 2013
LONDON, 23 September 2013: Petro Matad Limited, the AIM quoted Mongolian oil explorer (AIM:MATD), announces its unaudited interim results for the six months ended 30 June 2013.
Since the publication of the 2012 Annual Report, exploration studies have continued under the guidance of the Company's Director of Exploration, Mr Ridvan Karpuz. The internal exploration team of 12 explorationists and geoscientists has also been supplemented at various stages by appropriate international technical consultants working in our offices in Ulaanbaatar and abroad. As recently announced, the Company has awarded a contract to Khet Co., Ltd for acquisition of 200 kms of 2D seismic in Blocks IV and V in Central/Western Mongolia. Acquisition will commence in early October and is expected to take about six weeks. The seismic program is designed to provide detailed coverage over a series of leads identified from earlier seismic and is expected to confirm at least two locations for wildcat drilling in 2014.
Blocks IV & V
Studies on Blocks IV and V have identified nine frontier sub-basins covering 15,000km2 on the two PSCs. Of those two were initially targeted for more intense, early exploration activity.
A limited 2D seismic survey of 35 line kilometres will commence in October, which is designed to define the extension of a large thrusted anticline lead in the Batsagaan Trough Basin, at the centre of Block IV. The lead is currently covered by previously acquired limited 2D seismic lines, which showed it to be a large, long-lived anticline with potentially stacked pays adjacent to a deep and potential hydrocarbon-generating basin.
In the Taatsiin Basin in the south west of Block V, 165 kilometres of 2D seismic will be acquired over a large anticline structure with several compartments including multiple leads that have been preliminarily identified from 2D seismic shot by the Company in 2011. The structure is adjacent to the deepest basin (4,000m) identified in Blocks IV and V. The earlier drilled stratigraphic core-hole at the basin margin proved the existence of oil stained reservoir rocks and source rock intervals.
Both of the 2D seismic surveys are designed to generate drill targets in these frontier basins. The planned wells will be the first exploration wells to test the multiple plays in Central/Western Mongolia.
While much work still lies ahead for the overall studies of Block XX, the exploration team has preliminarily focussed on the Toson South area. The Toson South potential leads lie in the proven and producing kitchen extending from Block XIX, the Production Sharing Contract (PSC) immediately to the north of Block XX, operated by Petro China subsidiary Daqing Oilfields. Scout data from Block XIX is being integrated into the Toson South studies, supplementing the Company's existing database in order to develop analogues with Toson Uul.
The Toson South leads lie five to eleven kilometres to the west of the Davsan Tolgoi anticline. The area is structurally complex, and at this time covered with 2D seismic. Acquiring a limited 3D seismic programme over nine separate early leads is being considered, with the intention of de-risking those leads and the generation of drill targets.
Evaluation work is proceeding on the eight other frontier sub-basins in the central and southern portions of Block XX, with further scout 2D seismic on the more promising areas planned for 2014.
Shortly before the period end the Company raised $5 million before expenses through the issuance of shares to its largest shareholder Petrovis Matad Inc. ("Petrovis") and Petrovis' underlying owners. The Company is grateful for the continued support of Petrovis and the funds have enabled field operations to continue. It is the intention that the ongoing work programme will significantly progress the Company's understanding of the frontier portfolio of assets within Blocks IV and V and has been designed in conjunction with the ongoing farm-out process.
VR Global Partners, L.P. Acquires Securities of Khan Resources Inc.
Toronto, Ontario--(Newsfile Corp. - September 27, 2013) - VR Global Partners, L.P. ("VRGP") announces that it has acquired ownership of 1,500,000 common shares (the "Shares") in the capital of Khan Resources Inc. ("Khan") (CNSX: KRI) at a price of CAD$0.17 per Share for gross proceeds of CAD$255,000. The Shares issued pursuant to the Offering were issued from Khan's treasury at a price of CAD$0.17 per Share, representing approximately 1.99% of the total number of Khan Shares. In addition, since the date of the last early warning report filed, VRGP acquired ownership of the following through the facilities of the Canadian National Stock Exchange: (1) 50,500 Shares on January 4, 2013 at an average price, including commissions, of CAD$0.11475, representing approximately 0.07% of the total number of Shares; (2) 664,500 Shares on January 18, 2013 at an average price, including commissions, of CAD$0.109966, representing approximately 0.88% of the total number of Shares; and (3) 99,000 Shares on June 20, 2013 at an average price, including commissions of CAD$0.1379, representing approximately 0.13% of the total number of Shares. As a result of the foregoing, VRGP's total holdings of Shares amount to 10,573,500 or approximately 14.03% of the total number of Shares issued and outstanding.
The Common Shares are held for investment purposes and VRGP may, depending on market and other conditions, increase or decrease its beneficial ownership or control of the Common Shares or other securities of Khan whether through market transactions, private agreements, treasury issuances, exercise of convertible securities or otherwise.
Khan Completes Private Placement
TORONTO, ONTARIO--(Marketwired - Sept. 24, 2013) - Khan Resources Inc. (CNSX:KRI) ("Khan" or the "Company") is pleased to announce that its private placement of common shares (the "Offering") announced on September 9, 2013, has now successfully closed. The Offering resulted in the issuance of 7,237,703 common shares at a price of $0.17 per common share for gross proceeds of $1,230,409.70. The common shares issued are subject to usual resale restrictions until January 24, 2014. No fees or commissions were paid as part of the financing.
Use of Funds
Khan intends to use the proceeds of the offering to advance the Company's international arbitration case for $326 million against the Government of Mongolia and for general corporate purposes.
Related Party Transaction
Due to the participation of certain Company insiders as subscribers, the Offering can be considered a Related Party Transaction for certain regulatory purposes. The participation by the insiders in the Offering is summarized as follows:
Relationship to the Company
Interest in the Offering
Common Shares, directly or indirectly, beneficially owned or controlled
Percentage of Common Shares of Khan
James B. C. Doak
Grant A. Edey
President, CEO, director
K. Bruce Gooding
VR Global Partners, L.P.
West Face Capital Inc., through one of its funds
It is important to note that the Offering is exempt from valuation and minority approval requirements which might otherwise result from the participation by insiders due to: (1) the Issuer not being listed on a designated market; and (2) the fair market value of the Offering being less than $2,500,000.
To the knowledge of the Company, after reasonable inquiry, none of the related parties have knowledge of any material information concerning the Company or its securities that has not been generally disclosed.
SouthGobi: High Country Risk And Unprofitable Operations; 35% Overvalued Compared To Other Coal Companies
September 27 (Elephant Analytics via Seeking Alpha) It is our view that SouthGobi Resources (SGQRF.PK), a coal mining, development and exploration company that operates in Mongolia, remains overvalued at current levels. Although its share price has declined 83% over the past two years, SouthGobi still maintains a market capitalization of over $200 million and an enterprise value of approximately $276 million despite idling its only producing mine for nearly one year and then having difficulty finding profitable contracts for its coal after resuming operations six months ago.
SouthGobi is currently trading at a premium to other primarily metallurgical coal companies such as Walter Energy despite:
· Having difficulty selling its full production at profitable prices with current market conditions
· Posting operational losses even when metallurgical coal market was exceptionally strong
· Facing a high level of country risk and uncertainty in Mongolia
· Being reliant on a few Chinese customers for revenue
· Having only $78 million in working capital remaining, down $49 million from six months ago
SouthGobi is lightly traded under the ticker symbol linked to this article. The majority of trading occurs under the 1878 ticker symbol on the Hong Kong Stock Exchange and to a lesser extent the SGQ ticker symbol on the Toronto Stock Exchange. SouthGobi is 58% owned by Turquoise Hill Resources, which in turn is 51% owned by Rio Tinto.
Only Conducting Limited Operations
SouthGobi stopped production at its Ovoot Tolgoi mine in June 2012 due to a combination of regulatory issues and poor market conditions. It resumed operations at its Ovoot Tolgoi mine in March 2013 and initially gave production guidance of 3.2 million tonnes for 2013. In August, SouthGobi withdrew its production guidance and commented that the Chinese coking coal market was "expected to remain challenging in the short-term and we still have not yet seen a rising demand and prices for coal". In addition, it mentioned that the market was likely going to be tough for the rest of 2013 and that it was still a little bit uncertain about 2014.
As a result of the production shutdown, SouthGobi posted revenues of only $3.6 million and an operating loss of $54.2 million during the first half of 2013. Working capital also declined from $127.2 million at the start of the year to $78 million at the end of Q2 2013, while its cash balance was reduced to $19.2 million. SouthGobi is essentially in preservation mode, trying to maintain liquidity and reducing capital expenditures and evaluation and exploration expenses to the minimum. In a sign of how poor the market is for SouthGobi's coal, SouthGobi has taken $10.1 million in coal stockpile impairment charges during 2013, which significantly exceeds its revenue for that period. SouthGobi also only has contracts for approximately 1.2 million tonnes of product during the second half of 2013, compared to production of 2.6 million tonnes during the second half of 2011, so it is running well under capacity.
Unprofitable Under Excellent Market Conditions
Even when market conditions were very positive in 2011 with metallurgical coal prices around all-time highs, SouthGobi was posting large operating losses. While it did post a net profit, this was entirely due to finance income recorded due to fair value gains on the embedded derivatives in its convertible debenture, and not due to its actual coal mining operations.
SouthGobi has also produced inferior results to other primarily metallurgical coal producers such as Mongolian Mining and Walter Energy. In 2011, Mongolian Mining had gross margins (including depreciation) of 38% and Walter Energy had gross margins of 30%, while SouthGobi had gross margins of 29%. SouthGobi's operating expenses were 50% of revenues, versus only 11% for Mongolian Mining and 8% for Walter Energy. As a result, SouthGobi posted an operating loss of $38 million in perhaps the best ever market for metallurgical coal, while Mongolian Mining and Walter Energy were making hundreds of millions.
2011 Financial Information
Revenue ($ Million)
Cost of Sales ($ Million)
Gross Profit ($ Million)
Operating Expenses ($ Million)
Operating Profit ($ Million)
High Level of Country Risk
Mongolia has been very protective of its natural resources recently, leading to many disputes with foreign companies. SouthGobi did receive a $928 million bid in 2012 from Chinese state-owned Chalco for a 60% stake, but that set into motion a series of negative actions against SouthGobi. The Mongolian government passed a law requiring government approval for any foreign attempt to buy 33% or more of any company in a strategic sector such as mining. Although that law is likely to be replaced soon, the new law will still require foreign state-owned firms to receive government approval for any stake in a Mongolian asset.
SouthGobi has also previously had mining permits revoked and had two foreign executives barred from leaving the country for several months As well, Mongolia reverted to using a royalty rate based on a reference price that was significantly higher than the contracted price, after testing out a contracted price royalty rate for six months.
Other foreign companies have had a difficult time of it as well. SouthGobi's indirect partial owner Rio Tinto has had disputes with the Mongolian government about revenue sharing.
There have been signals that Mongolia will take a friendlier approach to foreign interests, after foreign investment in Mongolia fell 43% in the first half of 2013. However, the same government that instituted the nationalistic policies in the first place will likely remain in power until at least 2016/2017.
Completely Reliant On China
One of SouthGobi's strengths is that its Ovoot Tolgoi mine is located only 40km from the Chinese border, giving it easy access to its customers. On the other hand, it only has the Chinese market for its coal. In 2011, 46% of its revenues came from one customer and 98% of its revenues came from its top five customers, making its survival dependent on a few customers. It also appears to be at a competitive disadvantage to Mongolian Mining, which has consistently posted higher gross margins. SouthGobi also doesn't have the option of selling into multiple markets that international competitors like Walter Energy does.
While SouthGobi expects to have sufficient liquidity at least until June 2014, it is nonetheless running its liquidity dangerously low. Working capital declined to $78 million at the end of June 2013, compared to $127 million at the end of 2012, and its cash balance was down to $19.2 million. With interest expenses of $20 million per year, and an inability to generate operating profits when metallurgical coal pricing was strong, it seems likely that SouthGobi will need to seek additional investment or financing sometime soon.
Valuation Compared To Other Companies
SouthGobi's valuation based on standard metrics is hard to determine since it has generated minimal revenue for over a year. We are going to use its 2011 production and expense numbers (its last full year of operations) and adjust revenues per tonne according to current coal market conditions. Mongolian Mining's revenue per tonne declined by 37% from 2011 to the first half of 2013, so we will apply that adjustment to SouthGobi's revenues of $179 million, making its adjusted revenues $113.5 million. We have also removed SouthGobi's evaluation and exploration expenses from 2011, so these figures below are a truer picture of how its main operations are performing. The Mongolian Mining and Walter Energy numbers are from the first half of 2013 and extrapolated based on run rates for the full year.
Revenue ($ Million)
Gross Profit Excluding Depreciation ($ Million)
Gross Profit Excl. Depreciation (% of Revenue)
Operating Profit ($ Million)
Operating Profit (% of Revenue)
Interest Expense (% of Revenue)
Enterprise Value ($ Million)
SouthGobi is currently valued at an enterprise value to revenue multiple of 2.43. This is lower than the 3.05 multiple for its Mongolian competitor Mongolian Mining. However, Mongolian Mining has consistently had gross profit margins that are 8-9% higher than SouthGobi's gross profit margins. As well, SouthGobi has historically higher total operating expenses than Mongolian Mining despite generating a fraction of Mongolian Mining's revenue. As well, Mongolian Mining is the leading coal mining company in Mongolia, and is primarily owned and managed by Mongolians. It was considered the premier public company in Mongolia, and does not face the same country risks as SouthGobi, which is primarily owned and managed by foreigners.
Compared to Walter Energy, SouthGobi has posted lower gross profit margins and also lower operating profits. It also has higher interest expenses as a percentage of revenue. Walter Energy is also operates in the US, which is a more stable environment than Mongolia.
Based on competitor valuations, it seems that SouthGobi should be valued at a lower revenue multiple than Walter Energy. Mongolian Mining has the best performance and thus deserves the highest valuation. Walter Energy still has better results than SouthGobi in all areas, even if we assume that SouthGobi was producing and selling coal at 2011 tonnage levels. SouthGobi is not even capable of providing production guidance at this point, and should be theoretically be valued at much less than Walter Energy. However to be conservative, we will use Walter Energy's revenue multiple to determine a value for SouthGobi.
The relaxing of the foreign ownership laws may benefit SouthGobi as it opens up the possibility of a sale again. Turquoise Hill/Rio Tinto had previously intended to sell its stake in SouthGobi to focus on and partially fund the Oyu Tolgoi mine in Mongolia. However, the laws blocking foreign state-owned firms from owning SouthGobi remain in place, so that still rules out the Chinese suitors who had been interested in SouthGobi as a strategic supply asset for their operations. Other potential suitors would be interested in sustained profitability and would have to weigh the country risk and the currently weak Chinese coking coal market against a bid. Given that SouthGobi posted operating losses in very strong market conditions, potential buyers would need to be confident about being able to greatly reduce expenses as well.
We are going to value SouthGobi at an enterprise value of 1.79x adjusted revenues (revenues based on 2011 production levels with 2013 pricing), similar to Walter Energy's current valuation. This is an optimistic valuation since SouthGobi has lower gross profit margins, lower operating margins, and higher interest expenses relative to revenue compared to Walter Energy. As well, the country risk in Mongolia is high which should affect SouthGobi's valuation negatively compared to Walter Energy's mainly US based operations. While there could be an acquisition offer for SouthGobi, that chance is significantly reduced by the continuing laws against bids from state-owned companies.
A rebound in the metallurgical coal market could improve SouthGobi's prospects, but it provides less upside since it is currently overvalued compared to other metallurgical coal producers. Other metallurgical coal producers would make better investments in trying to play a rebound in the metallurgical coal market.
At 1.79x adjusted revenues, SouthGobi would have an enterprise value of $203 million, making its fair value $0.75 per share. This represents a 35% downside to current prices of $1.15 per share.
Aspire Mining Annual Report
September 27, Aspire Mining Limited (ASX:AKM) --
SOLARTECH: 2012/2013 ANNUAL RESULTS
September 27, Solartech International Holdings Limited (HKEx:1166) --
The Group has been engaging in mining business since 2010. During the year under review, the State of Mongolia implemented the new Foreign Investment Act, including the prohibition of mineral exploration and mining operations in headwaters, reservoir preservation areas and forest regions. A new draft minerals act is also in the course of consultation for revision, which focuses on the regulations governing mineral resources in order to control or impose limited restrictions on the prosperous mining industry. The Group expects that the time required to obtain necessary approval for developing copper mine projects would increase in the future.
The global mining industry entered into a downturn since the third quarter of last year. According to the latest statistics released by the Mongolian Ministry of Economic Development, direct foreign investments of the State of Mongolia decreased by approximately 43% during the first half of 2013, among which direct investments in geology, mining and petroleum industries decreased by a third.
The Copper Mine Project in Dundgobi Aimag
During the year under review, the demand for copper in China and international markets was affected by various factors, among which, the tight monetary policy of the Chinese government slowed down the overall economic growth. Coupled with the mild global economic recovery and lingering impacts of the financial crisis in Europe, international copper prices dropped by approximately 8% to approximately US$7,000 per ton during the year. In addition, the latest pre-feasibility report revealed an increase in capital expenditure and operating costs.
Within the scope of the capital expenditure budget, the maximum capacity of the project was adjusted to 20,000 tons per year from the original 30,000 tons per year. The Group also needs additional time for preparation before mining operations. These factors have also affected the future cash flow valuation model of mining right and resulted in recognition of an impairment loss of HK$360,600,000 on mining right during the year. The Group believed that the estimates and assumptions adopted in the impairment analysis were reasonable. The major estimates and assumptions used in the valuation model included capital expenditure, international copper prices, output over the life of the mine, operating costs, discount rate, etc.
Our subsidiary in Mongolia has completed the necessary environmental impact evaluation report and quarry extraction planning report before mining. It has to further carry out hydrogeological works in the mining area. Those works include impact evaluation of topography, climate, characteristics of surface water, characteristics of water aquifer and aquiclude, geological structure and fault belt on deposit water filling. The Group will also seek suitable partners to cooperate in the development and construction of Dundgobi Aimag copper mine project.
The Copper Mine Project in Bayan-Ulgii Aimag
The development of the copper mine project in Bayan-Ulgii Aimag, Mongolia, which the Group owned a 10% equity interest, had been progressing slowly. Pursuant to the sale and purchase agreement and the supplementary agreement, the preparation of the technical report in respect of the mineral resources of the mine and the final valuation report of Mongolian Copper Mining LLC ("MCM"), which is a company incorporated in the State of Mongolia with limited liability and the holder of the mining licence for an area of 527.4 hectares, has to be completed on or before 30 April 2013. During the year under review, we introduced a national enterprise engaging in the survey and design and resource development of non-ferrous metals such as gold, silver, copper and molybdenum to carry out additional exploitation work for the project. Such experts preliminarily advised that the scale and potential value of the mineral reserves were large, however the geological conditions of the mining area were complex. As this mine is located in north-west Mongolia, the annual workload is largely subject to weather, and therefore the time required to complete additional exploitation work is uncertain. On 29 April 2013, the purchaser and the seller agreed to adopt the exploitation report dated 15 May 2011 prepared by the Mongolian consultants and the valuation report dated 28 February 2013 in respect of the mine to be the final valuation report. It showed that valuation of MCM amounted to US$177,770,000, which was higher than the amount of US$175,200,000 revealed in the preliminary valuation report. As a result, adjustment of consideration was not required and such acquisition was considered completed. The Directors are of the view that this agreement in relation to the final valuation report is in the interests of the Company and the Shareholders as a whole. Details regarding the interests of this jointly controlled entity were set out in note 13 to the Financial Statements.
Nova Resources Interim Results
September 27 -- The Board of Nova Resources Limited (AIM : NOVA.L) is pleased to announce its interim results for the six months to 30 June 2013.
I have pleasure in presenting our interim report for the period to 30 June 2013.
We have, as expected, incurred a loss for the period of £623,000, which relates largely to ongoing developments at our investments.
As previously announced, the management of Nova Trans LLC has reported that the coal transportation contract entered into by it with Transgobi LLC expired on 15 April 2013. Whilst discussions between Nova Trans LLC and Transgobi LLC took place regarding the renewal of this contract, this has not yet occurred. The management of Nova Trans LLC are looking for other transportation opportunities in Mongolia as well as continuing a dialogue with Transgobi LLC regarding a potential renewal of the contract. They are also in discussions with potential investors for additional funding.
In August 2013, the Group secured new investment of £400,000, which will provide the Group with adequate funding to continue to seek opportunities in line with its investing policy.
Mongolian Resources: Annual Report
September 27, Mongolian Resources Limited (ASX:MRF) --
North Asia Resources: Interim Report 2013
September 26, North Asia Resources Holdings Limited (HKEx:61) --
Draig: Annual Report 2013
September 25, Draig Resources Limited (ASX:DRG) --
Eumeralla: Annual Report 2013
September 24, Eumeralla Resources Limited (ASX:EUM) --
Modun: Annual Report 2013
September 24, Modun Resources Limited (ASX:DRG) --
Newera: Annual Report 2013
September 2, Newera Resources Limited (ASX:NRU) --
Sentosa: Annual Report 2013
September 2, Sentosa Mining Limited (ASX:SEO) --
Mongolia Investment Group: Change of Name to Peace Map Holding Limited
September 26, Peace Map Holding Limited (HKEx:402) --
CHANGE OF COMPANY NAME
Reference is made to the announcement of Peace Map Holding Limited (formerly known as Mongolia Investment Group Limited (the "Company") dated 25 July 2013, and the circular of the Company dated 29 July 2013 (the "Circular") in relation to, among other things, the change of the Company's name. Unless otherwise defined herein, capitalized terms used in this announcement shall have the same meaning as those defined in the Circular.
The Company has passed the special resolution on the change of Company's name at the AGM held on 28 August 2013. The Board is pleased to announce that with effect from 4 September 2013, the name of the Company has been changed from "Mongolia Investment Group Limited 蒙古投資集團有限公司" to "Peace Map Holding Limited 天下圖控股有限公司". The Certificate of Incorporation on Change of Name dated 4 September 2013 was issued by the Registrar of Companies in the Cayman Islands and the Certificate of Registration of Change of Corporate Name of Non-Hong Kong Company dated 25 September 2013 was issued by the Registrar of Companies in Hong Kong.
CHANGE OF STOCK SHORT NAME
The stock short name for trading in the Shares on the Stock Exchange will be changed from "MONGOLIA INV" to "PEACEMAP HOLD" in English and from "蒙古投資" to "天下圖控股" in Chinese with effect from 9:00 a.m. on 2 October 2013. The stock code of the Company remains unchanged.
EFFECTS ON THE CHANGE OF COMPANY NAME
The change of the Company's name will not affect any of the rights of the holders of securities of the Company.
The existing share certificates of the Company in issue bearing the former name of the Company shall continue to be evidence of title to such securities and shall continue to be valid for trading, settlement and registration purposes. Accordingly, there will not be any arrangement for exchange of the existing share certificates. New share certificates of the Company will be issued under the new name of the Company.
MONTSAME MSE NEWS: Top 20 +2.46%, Turnover ₮37.1 Million
Ulaanbaatar, September 27 /MONTSAME/ At the Stock Exchange trades held Friday, a total of 59 thousand and 460 shares of 31 JSCs were traded costing MNT 37 million 135 thousand and 715.00.
Rates of shares of 13 companies increased, of three decreased and share price of five were stable.
The total market capitalization was set at MNT one trillion 388 billion 881 million 602 thousand and 513. The Index of Top-20 JSCs was 13,752.76, increasing by 330.33 per cent (Mogi: points) against the previous day.
Montsame MSE Weekly Review: Top 20 +1.07%, Turnover ₮1.47 Billion
Ulaanbaatar, September 29 /MONTSAME/ Five stock trades were held at Mongolia's Stock Exchange on September 23-27, 2013.
In overall, two million 783 thousand and 516 shares were sold of 48 joint-stock companies totaling MNT one billion 470 million 402 thousand and 211.43.
"Moninjbar" /two million 388 thousand and 231 units/, "Tavantolgoi" /259 thousand and 963 units/ and "Khokh gan" /32 thousand and 255 units/ were the most actively traded in terms of trading volume, in terms of trading value--" Moninjbar" (MNT 713 million 984 thousand and 975.00), "Tavantolgoi" (MNT 653 million 224 thousand and 500.00) and "APU" (MNT 27 million 622 thousand and 610.00).
BoM Official FX Rates: September 29 Close
September USD Chart:
BoM: Balance of Payment Report for First 8 Months
September 24 (Bank of Mongolia) --
2013 Joint APG /EAG Annual Typologies Meeting and Capacity Building Workshop is being held in Ulaanbaatar, Mongolia
September 24 (Bank of Mongolia) Asia/Pacific group on Money Laundering (APG) and the Eurasian group on combating money laundering and financing of terrorism (EAG) Joint Typologies and Capacity Building workshop is being held in Ulaanbaatar Mongolia, during 23-27 September 2013. This is the first time that Mongolia is hosting such major meeting and it is also the first APG/EAG joint typologies workshop. There are over 250 delegates from the APG/EAG and its membership countries participating at this event as well as 8 international organizations such as FATF, World bank, IMF etc, participate as an observer.
RESULT OF GOVERNMENT SECURITIES AUCTION
September 25 (Bank of Mongolia) Regular auction for 12 weeks maturity Government Treasury bill was announced at face value of 40 billion MNT and each unit was worth 1 million MNT. Face value of 40 billion /out of 91.0 billion bid/ Government Treasury bill was sold to the banks at discounted price and with weighted average yield of 8.95%.
BoM holds FX auction
September 26 (Bank of Mongolia) On the Foreign Exchange Auction held on September 26th, 2013 the BOM has received bid offer of USD and CNY from local commercial banks. BOM has sold 88.4 million CNY to the local commercial banks.
On September 26th, 2013, The BOM has received bid offer of USD for Swap agreement from local commercial banks and sold 176.8 million USD.
Total outstanding 1-week bills at ₮1.56 trillion, down from historic high of ₮1.63 trillion, reached two days earlier
BoM issues 1-week bills
September 27 (Bank of Mongolia) BoM issues 1 week bills worth MNT 499.8 billion at a weighted interest rate of 10.5 percent per annum /For previous auctions click here/
Parliament working group's report on the economy
September 24 (Business-Mongolia) This noon, a working group established by the order of Speaker in April presented its' conclusion to the Economic Standing Committee. In brief, the conclusion covered areas of world economics, and its effects on the local economy, consequences and ways to tackle the obstacles. It also included summary from the analysis on 'Internal and external factors in Mongolian economy, an analysis on development process, conclusion and further policies' by the sub-working group. Figures are based on the data from May, 2013.
1. External economic environment and relations.
- Solution is needed for accumulated issues on foreign relations, foreign investment, and major project due to unclear and unstable external economic environment.
- Trade deficit might be increased due to the full dependence on import goods and mining sector – price volatility of copper, coal and iron ore which affects net foreign currency flow into the country.
- Financial instability might occur due to consequent current account deficit showing no signs of decrease which makes the economy more sensitive.
- In parallel with the current account deficit, external debt increase may cause negative effects on long-term economic stability.
- Mongolia's credit rating has been decreased.
- Difficulties occurring on debt service repayment, and some payments are behind schedule created a re-financing risks.
- Dependence on few markets, few commodity export, and over-dependence on import goods is creating a difficulty, and economic cooperation with China is prevailing.
- Our third neighbours perceiving our economy as a risky and unstable investment environment.
2. Major projects that has a significant effect on the economy.
- Despite as a factor for mid-term economic growth force, for further development of the mining sector, inefficient and underdeveloped logistics service, power, water supply and infrastructure is creating difficulties. Improvement on investment and sales agreements and contracts is creating obstacles on implementing these projects.
- Cancellation of licenses of the environmentally irresponsible companies is negatively affecting the world-class companies as well.
- Due to needed capital for implementing major projects precise schedule must be created.
- Inefficient spendings are occurring due to lack of investment and project analysis, and incompetency of feasibility studies.
- New railway system has not been constructed to this day and current system doesn't have efficient legal framework of coordination.
- Due to inefficient and weak corporate governance and responsibility of state-owned enterprises, many of them facing financial difficulties.
3. Foreign Direct Investment.
- Since 2000, foreign direct investment has been steadily increasing. However, due to world and regional decrease in investment the amount has decreased. Completion of initial phases of the significant projects, change in legal environment caused FDI to decrease from 2012.
- Despite the effort made on attracting foreign investment, irresponsible statements and confusing news is causing investors to abstain from investing in the country.
- 85 percent of the FDI was for the mining sector, showing the one-sidedness of FDI in the country, proving its' dependence on few commodities.
- If we don't pay attention on sources of the FDI in the country, China is leading and offshore zones such as Netherlands, Luxembourg and Virgin Islands is increasing.
- Comparing to other countries the FDI is in a normal level, however the country is still classified as a risky destination. Taxation level, restriction and customs tariffs are in the same level as developing countries. However, bureaucracy, human capital, corruption, infrastructure, and development level financial sector is considered as weak.
- The country lacks incentives and advantageous conditions for investments, and system on attracting investments by industries.
- Due to unclear taxation, penalty, fine, sentencing based law and lack of knowledge in specific areas of judges investors faces loss in court. It makes difficult to re-kindle their investment appetites.
- Be informed about Mongolia being classified as frontier markets with the rating of below BBB-.
- Create foreign investment incentives, improving legal environment, and system that encourages investment on industries that are in need of investment.
4. Macro-economic condition.
- Receiving pre-payments from unrecognized revenue, massive distribution to the general public caused budget deficit and other negative economic consequences.
- Despite the forecast of 13-16% growth, prevailing unclear condition of the economy is being perceived as instability. If OT starts operating in June, substantial growth will be resulted.
- In last 3 years, due to mining sector growth, foreign trade revenue was more than the GDP, the 93% of the export revenue was created by mining sector making our economy more sensitive to sudden external shocks
- Bond investment might add to inflation due to growth rate is higher than the actual production rate encumbering private investments. Due to time needed for projects' finalizing and planning period the bond investment maybe delayed
- Due to budget policy expansion based on cycles it still creates a risk for stable and steady economic growth. In the time of commodity price shock, Ministry of Finance is not equipped enough to take decisive measures
- Optimistic budget planning is under a risk for budget deficit of 6-8%. Meanwhile, the planned investment could disrupted
- Price stabilization and subsidization programs, financing for Development Bank, and Chinggis Bond may create pressure on the state budget
- Insufficient resource in the stabilization fund makes the economy sensitive to commodity price volatility
- Imbalance of financial sector, prevailing banking sector in the financial system that is not catching up with the economic growth might create an obstacle
- Supportive policy for stock market, legal environment, lack of service, and service of professional firms are not being sufficient
- There is a need for macro-economic development model and improvement of coherency between state agencies and their cooperation
- Utilization of macro-economic tools such as national accounts, inter-branch accounts, balance of payment indicators, GNI, and CCI on policy making process is not sufficient.
- National mechanism to prevent currency crisis is needed.
- Due to coherency between budget and monetary policy it may look as if the policy is anti-cyclical. However, in reality both are implementing expansion policies that heats up the economy, creating a risk of instability.
- Budgetary expansion policy is weakening the monetary policy that is targeting the inflation.
- Separate planning of investment and maintenance budget is making it hard to have a consolidated budget. Dividing responsibilities between Ministry of Finance and Ministry of Economic Development might had negative effect.
- Because the Mongolian strategic planning and policy is not coherent with state investment plan, the policy is being aimed at only for satisfying the election 'promises'.
- Support from government to private sector is unclear, state interference is high, and bureaucracy is a major issue.
- Policy on developing SMEs in unclear, implementation is insufficient, financing mechanism is inefficient, and also bureaucracy is an issue.
The fifth section of the conclusion covered the other issues such as environment, green development, health, poverty, procurement and government role in economy.
Anatomy of the Current Economic Crisis
By Dr. Julian Dierkes
September 26 (Mongolia Focus) Having spent last week in Ulaanbaatar, it is clear to me that the current crisis is a) more severe than I had thought, and b) more real/less perceived than I had thought.
Below, I try to list elements in this economic crisis. I will follow this up with another post that focuses on the political context to the crisis.
Elements in the Economic Crisis
These are the main elements in this crisis:
· the massive decline of foreign investment
· a softening of economic growth in China
· on-going uncertainty around Oyu Tolgoi
· a current account deficit, inflation and the depreciation of the tugrik
2012: Foreign Investment
A number of the elements in the current economic crisis date to 2012, the decline of foreign investment and the decline of coal exports to China.
In May 2012, parliament hastily approved a foreign investment law to prevent the takeover of South Gobi Sands by Chinese aluminum giant Chalco. The law initially seemed to be focused fairly narrowly on establishing a review procedure by the government and parliament for foreign investments of a certain size and involving state-owned enterprises. In this, the law was not dissimilar to similar measures in countries like Canada or Australia (see my "", January 9 2013, East Asia Forum; also two posts on this blog: "", Dec 5 2012, and "", Feb 1 2013). While the law was promoted as much by anti-Chinese sentiment as by a desire to control mining assets in Mongolia, it was poorly drafted and contained provisions that created a great deal of uncertainty among foreign investors regarding their ability to sell assets and thus cash in on investments (see for example a legal analysis provided by Hogan Lovells in the context of proposed amendments to the law, "" (Apr 15, 2013, PDF).
This uncertainty has lingered and has led to the shelving of exploration activities by many foreign investors, primarily from Australia, Europe, and North America. The uncertainty was confounded by proposed amendments to the mining law (see for example Mendee's blog post, "" May 11, 2013).
The result of this uncertainty has been a decline of foreign investment that some peg around 50% though it's unclear how much of that is due to decisions not to invest further, as opposed to decisions to actually withdraw investments.
Some portion of this drop is also attributable to the conclusion of Phase I of Oyu Tolgoi construction. Since Phase II is currently on hold, this has reduced foreign investment into the OT project.
One of the ironic aspects of this decline in foreign investment from OECD countries is that apparently (no confirmable numbers on this, merely something that is talked about in Ulaanbaatar) many of the assets that may have been abandoned in the context of investment reviews by OECD foreign investors (primarily Canadian and Australian) have been snapped up by Chinese investors. The same may also hold for Mongolian projects that have faced financing challenges as the current crisis has worsened. So while the foreign investment law may have prevented the sale of South Gobi to Chalco, it may have created opportunities for the sale of smaller and medium-sized projects to Chinese investors as an unintended consequence.
It should also be noted that 2012 was a year when a number of prominent foreign companies came under investigation by Mongolia's authority for a number of alleged violations against mining regulations and tax evasion (apparently). The prosecution of these offences – whether it may have been justified by malfeasance or not – added to the perception of embattled foreign investment.
The Mongolian government was not too bothered by howls of protest coming from investors last year. Some of this lack of concern was rooted in a sense of optimism about Mongolia's economic development that was rooted in the high growth rates of previous years and expectations tied to what seemed like the imminent beginning of production at Oyu Tolgoi. The sense of economic (over)self-confidence that was so palatable in Ulaanbaatar was reinforced even more by the success of the launching of the Chinggis Bond in November 2012 that was oversubscribed and netted the government US$1.5b. Oddly, this capital was raised without a clear sense of what the funds might be spent on leading to a pointed line of questioning of the government's plans from the opposition. Regardless, the oversubscription was taken to be an endorsement of the Mongolian economic and economic policy, and concerns about foreign investment were brushed aside.
I should note in this context, that some of these developments did not seem entirely pernicious to me last year. I have been of a view that Oyu Tolgoi may be all that the government of Mongolia can and should handle for some time, so that the decline in the number of other active projects seemed like a development that would allow political and regulatory energy to focus on "getting OT right". Other projects could then be re-activated in later years when the regulatory environment was settled in the context of development of OT, and some infrastructure and training needs would also have been addressed at that point.
I am still fundamentally of this view, i.e that OT on its own is "large enough" for significant growth and so large that regulatory and development efforts will already be stretched very thin by a focus on OT. I do recognize in the current context, however, that the slowdown and uncertainty around OT (see the discussion below about how the government is not "getting OT right" in 2013) has led to an economic crisis that I had not anticipated in part because I continue to believe that OT is too big to fail for the government as well as for Rio Tinto.
2012: Softening of Exports to China
In terms of the active selling and buying of goods (not investment), the Mongolian economy is dominated entirely by its trade with China of course. China continues to be the main source of imports of all manner of consumer and many industrial goods, and it is the destination of the large majority Mongolian exports, whether that is raw or processed materials, or any products.
As China's rapid growth has slowed to be merely fast growth, the exports of coking coal from Mongolia to China have halved over the past year or so. Frik Els has collected some of the numbers of this shift for . In addition to the slowdown in China, there have also been a number of managerial challenges in that some of the contracts that Mongolian firms had entered into turned out not to be very advantageous and allowed Chinese buyers to back out when prices started sinking.
2013: Grappling with OT Ownership
Earlier this year, President Elbgdorj opened a large can of worms when he outlined a detailed list of questions he had about the construction of OT (see my "", beyond BRICS, Financial Times, Mar 19 2013, for example.
While many of the points that Elbegdorj has raised are legitimate areas of questioning and should also prompt some very serious thinking in the Mongolian government, none of this thinking has led to any solutions. The start of production and delivery of copper concentrate was delayed several times earlier this year and recently, further construction of Phase 2 and the associated underground operations has been suspended. Not to be outdone in a sulking contest with the Government of Mongolia, Oyu Tolgoi (i.e. Rio Tinto) fired 1,700 workers in August.
While the middle of September has brought many statements from the government indicating contrition over economic policy for the past year or so, mention of Oyu Tolgoi was conspicuously absent from all these statements.
They only good news regarding the project recently has been the appointment of three new members of the board of directors of Oyu Tolgoi by the Mongolian government according to its 1/3 ownership stake. These directors are surely politically connected to the DP and the president, but they have worked in the mining industry or on mining regulation for some time, bringing a different level of competence to their appointments.
2013: From Cushioning a Softening of Growth to Inflation and Currency Depreciation or The Budget
There have been significant infrastructure investments by the Mongolian state this year that have cushioned the blow of the withdrawal of foreign, non-Chinese investment, and the slow-down of coal exports. These investments and injections into the economy have maintained growth rates for the first half of the year. They are also putting pressure on the state budget. While this pressure has been curbed somewhat by a slowdown in expenditures, the government is facing a deficit on the order of US$100m. This is a comfortable distance from the stability-law-imposed ceiling of 2% of GDP somewhere near US$100m. The Chinggis Bond of last November clearly provided some of the cash for these investments and one can only suspect that the ¥-denominated Sumo Bond announced for later this year will be used to similar purposes. Another aim in raising funds through the Sumo Bond may be to build up foreign currency reserves given the current account deficit. It is also important, of course, to note that these are bonds so that they will ultimately represent a draw on the state budget for interest and repayment. A budget update is due on Oct 1 that will clarify some of the expenditure and likely deficit levels.
2013: A new focus on State-Owned Companies
Over the past several months, there has been increasing scrutiny of Mongolian state-owned companies and their (lack of) profitability. This may have started with some scandals surrounding MIAT, the national airline, that brought more attention to the large state-owned sector that continues to exist. Now, estimates that only 25% of state-owned companies are profitable are even being disputed by some commentators. While the impact this lack of profitability may have on the government budget is not clear to me, it certainly does have an impact.
Clearly such state-owned companies are a mix of some holdings that are meant to be subsidized (utilities, for example), some that provide much needed employment (manufacturing) and others that are more of an investment (Erdenet/OT). The fact that utility companies are operating at a deficit even when plans are progressing for the Central Heating and Power Plant 5 in Mongolia may not be surprising and should probably be evaluated differently that the losses running up at MIAT.
2012-13: The Depreciation of the Tugrik
The Tugrik has declined around 20% since the Chinggis Bond was issued (no direct and singular causal link implied here). This obviously makes all imports more expensive and is thus quite noticeable in Mongolia. Over the course of the summer, a kg of rice has thus gone from T1,600 to T2,000 a change that is representative of the price change of ordinary goods and is obviously very noticeable for shoppers. Likewise, many restaurants had stickers on their menus with new prices during my mid-September visit.
The Bank of Mongolia appears to have been intervening to support the tugrik all year and that has led to a decline of foreign currency reserves given the current account deficit that is due to the decline in exports.
Note that while there has been some discussion of manipulation of the tugrik by currency speculation, this seems somewhat unlikely. For currency speculators outside of Mongolia, the tugrik is not an attractive target as it only clears in Mongolia itself. I.e., it is very complicated (or impossible, at least directly) to hold a tugrik account abroad which means that speculation is not only complicated, but even riskier. Surely some people are speculating on the movement of the tugrik domestically, but this is probably not of a volume to really move the currency around massively.
Note that I am not an economist, so if I have misportrayed anything in the above summary of the economic crisis, please comment on the post to offer corrections or further information.
EPCRC: MONTHLY MACROECONOMIC OVERVIEW, August 2013
September 2013 (Economic Policy and Competitiveness Research Center) --
MAIN INDICATORS: GDP, STATE BUDGET, FOREIGN TRADE, EXCHANGE RATE, INFLATION
Economic growth rebounded in the second quarter 2013. Real GDP grew by 14.3 per cent in the year to June, a strong improvement on the 7.1 per cent growth recorded for the twelve months to March 2013. Expansion in the first half was 11.3 per cent, a slow-down from the 13.1 per cent growth recorded for the same period one year prior. In current prices, GDP amounted to MNT 7,591 billion for the first six months of 2013 and grew by 18.8 per cent in comparison to the same period last year. Growth was driven by increases in government spending from the Chinggis bond proceeds, although agriculture also grew strongly.
Mongolia's government finances slightly improved in August. The accumulative 2013 budget for the cental and local governments is now recording a deficit of MNT 131 billion, down from MNT 146 billion in July /the total budget revenue and expenditure amounts to MNT 3,450 and MNT 3,581 billion/. The deficit is an improvement from the same period last year, when combined government finances were in deficit of MNT 480 billion. Revenue remains 11 per cent higher while expenditure remains the same because of some 17 per cent spending cuts in subsidies and transfers as well as 32 per cent in investment through internal sources.
The trade balance was in deficit USD $1.5 billion for the eight months to August. The total turnover of trade reached USD 6.9 billion, a decrease of 7.6 per cent from the same period last year. Both exports and imports are lower compared to last year, with exports of USD $2.7 billion down 5.9 per cent since last year, and imports of USD $4.3 billion down 8.6 per cent. The slow-down in coal exports continues, down 44 per cent in value and 21 per cent in volume compared to the same period last year.
The Mongolian Tugrik depreciated sharply in August. The monthly average exchange rate fell 6.5 per cent to 1,570 MNT against the USD. The biggest daily fall in the value of the tugrik reached 1,617 in August. The value of the tugrik has fallen 15.1 per cent over the past year to August. The total amount of foreign currency reserves reached USD 2,725.5 million decreasing by 9.5 per cent compared to the previous month. Compared to the same period last year, foreign currency reserves are now down 0.3 per cent.
Inflation increased slightly to 9.4 per cent in the year to August. Compared to August 2012 it decreased by 5.5 units. The year to date inflation rate was 6.7 per cent, while inflation for the month of August was a modest 1.7 per cent. While the prices of food products fell in comparison to the last month, the cost of education increased as well as that of housing, water, electricity and fuels.
FINANCIAL SECTOR: MONEY SUPPLY, DEPOSITS, LOANS
The money supply (M2) increased in August. M2 rose 4 per cent from the previous month reaching MNT 8.4 trillion or USD 5.3 billion. M2 is 20 per cent higher than the same period in August 2012. Currency issued in circulation rose by 4.3 per cent in August, and remains 6.5 per cent higher than the previous year to be MNT 868 billion. Currency issued in circulation amounts to 10.3 prt cent of the M2.
Bank deposits rose by 2.4 per cent in August to MNT 5.3 billion. Deposits are now 21.6 per cent higher than a year ago amounting to USD 3.4 billion. Deposits in foreign currency continues to grow, rising by 13.9 per cent to MNT 1.3 billion, while MNT deposits fell by 1.1 per cent to MNT 4 billion. Foreign currency deposits are now 4.8 per cent higher than one year ago, while MNT desposits are 28.9 per cent higher.
Non-performing loans rose in August. This sharp rise in non-performing loans, from MNT 136 million to MNT 465 billion in the last two month, represents a 48.8 per cent increase from the same period last year. Non-peforming loans amount to 4.8 per cent of the total amount of loans outstanding. Total loans outstanding rose 7.3 per cent to MNT 9.7 trillion or USD 6.2 billion, an increase of 46.6 per cent in the past year. The annual interest rate (weighted average) for loans in MNT increased by 0.6 percentage points fand decreased by 1.6 percentage points for loans in foreign currency from last year reaching 18.9 per cent and 12.5 per cent respectively.
Ø In order to "build up the coal resources, prepare for the next winter, and stabilize the retail price of energy and fuel" the Bank of Mongolia supports the energy and fuel sector through issuing credits in easy terms via commercial banks.
Ø The Deposit Insurance Corporation was officially launched this month, since the Parliament approved the law to the protection of customer deposits in the banking sector in January of this year. Owners of the deposits amounting to or less than MNT 20 million, who are nearly 99 per cent of all customers, would be able to take out insurance.
Mongolia is facing a currency-devaluation inflation spiral. The MNT fell to MNT 1722 per USD on 12 September, although has recovered since to around 1600 MNT due to some recent weakness in the US dollar. Inflation reached 9.4 per cent in the year to August, and threatens to exceed double digits in months ahead, especially as petrol importers recently wrote to the government requesting to increase their prices.
Commentators have generally attributed this bout of instability to the decline in foreign direct investment and lack of confidence in the Mongolian economy, triggered to some extent by the introduction of the May 2012 Strategic Foreign Entities Investment Law. However, one overlooked factor in the recent inflation spike has been a considerable increase in the money supply. In the year to August, the money supply (M2) increased by 20 per cent. Although Mongolia has a history of hefty increases in the money supply, the yearly rate of increase was only 12.8 per cent as recently as April. This expansion to M2 is likely due to infrastructure spending from the Chinggis bonds and off-balance sheet expenditure such as the price stability program and the mortgage rate subsidies by the Bank of Mongolia.
To some extent an increased money supply will improve growth by devaluing the domestic currency, thereby encourage exports and increasing the currency inflow, and supporting domestic manufacturing. However, it is important that the Bank of Mongolia maintains its national stabilization policy and not exaggerate exchange rate depreciation. The rise in domestic costs and prices from the increased money supply also negatively impacts on the foreign currency account and thus induces further devaluation. It should be noted that a continuing inflation process is in principle possible only with increasing money supply. The monetary policy of the Bank of Mongolia, therefore, has a considerable influence on the real purchase power of the citizens. Although it pursues an anti-cyclical financial policy by supplying money to support the real economy, it must keep the balance and not exceed the limit of the production capability.
Collapse of Savings Bank leads to calls for better regulation
September 27 (South China Morning Post) It came like an unseasonal Siberian wind from the steppe. Anointed the "Best Managed Bank in Mongolia" by The Asian Banker magazine in April this year, the collapse of Savings Bank, the country's fifth-largest lender, only three months later, has led to calls for further regulation and oversight as the country upgrades its financial services.
Branded with a negative outlook by ratings agency Moody's, the banking sector faces challenges, "in managing what will likely be a period of rapid loan growth in an economy that is increasingly exposed to commodity-driven boom-bust cycles", said Graeme Knowd, Moody's associate managing director of financial instruments group at a recent investment forum in the Mongolian capital of Ulan Bator.
Golomt Bank, one of the big four banks, which combined hold 77 per cent of the nation's deposits, is late in filing its 2012 end of year accounts. PwC has recently been appointed as a second auditor to help review the bank's off-balance-sheet risks.
At the head of a recent government-backed credit splurge on mortgages and corporate loans, banks have struggled with the fallout from the slowdown in neighbouring China, the destination for 80-90 per cent of Mongolian exports. Cheap credit has been made available to banks to lend at favourable rates to key industries including food processing and construction as a way to bring down double digit inflation. The move is credited by the government for bringing near term inflation below 10 per cent.
"Overall asset quality is under pressure due to the volatile environment," says Chikako Horiuchi, a Mongolian banking analyst at Fitch. She estimates 30 per cent of bank loans are in foreign currencies, placing additional pressure on borrowers given a 17 per cent drop in the tugrik against the US dollar during the past month.
Dollar loans have been popular in Mongolia because they are often cheaper than local currency borrowing. "Repayment is likely to become difficult if these borrowers only have local currency income," Horiuchi said.
In recent years, Mongolia's four larger banks have upgraded services and attracted outside investors. The country's largest bank, Khan Bank, is 41.3 per cent owned by Sawada Holdings in Japan. In 2012, the country's third-largest bank, the Trade and Development Bank, sold a 4.8 per cent stake to Goldman Sachs.
In 2013, the parent group of Mongolia's fourth-largest bank, Xac Bank, sold a 16 per cent share for US$24 million to Japanese financial services firm Orix.
Analysts seem comfortable that with upgrades in management and corporate governance the big four are on relatively stable ground.
There is more concern for the 10 or so smaller banks that make up 25 per cent of the market. "Outside the big four the resilience of the banking sector to the challenging operating environment is likely to be lower," said Knowd.
Mogi: good or bad for Mongolia? Sounds bad.
UPDATE 1-China's Inner Mongolia takes steps to help local coal miners
* China coal miners hurt by weak prices, tepid demand
* Move follows similar steps in Shanxi province (Adds detail)
September 23 (Reuters) - China's top coal producing region of Inner Mongolia will cut administrative fees and transport charges for local miners as they battle with weak prices and sluggish demand, the official Xinhua news agency said.
The move follows similar steps in Shanxi province, the country's second-largest coal production base, as a persistent price slump forces many firms into losses.
The cut in fees in the Inner Mongolia autonomous region will be a boon to companies with major mines in the area such as Inner Mongolia Yitai Coal Group, Shandong Energy and Shenhua Group.
Levies for coal will be reduced by between 4 yuan and 20 yuan ($3.27) a tonne between Sept 1 and Dec 31, while the local government will also suspend the collection of environmental protection fees and miscellaneous rail transport charges, Xinhua reported.
Other medium term measures include increasing financial support for coal miners, lowering borrowing costs, encouraging the development of coal processing industries and further eliminating illegal fees, Xinhua said on its website, citing a government circular.
Coal miners are also being encouraged to sign long-term contracts with key users from the power, metallurgy and coking sectors, establish strategic partnerships and work on a stable pricing system.
Steam coal prices in China, the world's top buyer, have been steadily falling since December, dropping about 15 percent this year.
Miners in Inner Mongolia, far from the main consumption centres along the coast, have been the worst hit because the low calorific content of the coal they produce has slashed their margins. Long transport distances, where many smaller miners have to rely on expensive trucking, have also made their coal uncompetitive.
Coal production in Inner Mongolia fell 12.4 percent from year ago to 453.12 million tonnes in the first half of 2013, as weak demand forced miners to cut output.
Mining firms make way for shoots of green economy
Government faces challenge to encourage sector to adopt measures that do not help bottom line
September 27 (South China Morning Post) Travel 13 kilometres north of Ulan Bator's city centre and you will find a new front in Mongolia's battle to develop the country: a gigantic tree nursery.
Operated by international tree-growing specialists Tree Global, it is capable of producing half a million trees a year with the potential for many more, and forms part of a newly conceived effort to put the country's environment at the forefront of policymaking. The challenge will be in encouraging a mining-focused economy to adopt measures that do not contribute to the bottom line.
Covering 1.56 million square kilometres and regarded as a country of outstanding natural beauty, Mongolia's sparsely populated landscape is nonetheless pockmarked by areas of degradation following decades of loosely regulated mining and industry.
In recent years, the environmental impact from ongoing urbanisation has also been felt, with sanitation, heating and transport infrastructure overwhelmed by demand. After last year's election and change of government, a Ministry of Environment and Green Development was created and elevated to one of four super ministries.
"Because the environment was overlooked, unfortunately we have inherited a lot of problems," Minister of Environment and Green Development Sanjaasuren Oyun said.
"While the country is overall in a relatively good environmental position, we face air pollution, river pollution, soil pollution, with mining, especially the large number of small-scale operations inherited from the 1990s. [There are] 600-plus sites that are degraded."
The impact is keenly felt in Ulan Bator, where many homes lack central heating and, during the sub-zero winter months, residents resort to burning scavenged rubbish and construction materials, resulting in noxious smoke and some of the worst air quality in Asia.
A World Bank study found residents' exposure to harmful PM2.5 particles was, on average, 10 times higher than Mongolian air quality standards. The burning of wood also contributes to deforestation, which exacerbates soil erosion and desertification in a steppe country where topsoil layers are thin and at risk.
The potential impact of global warming is also a concern.
"Climate change is disproportionately affecting Mongolia," Oyun said. "Since the 1940s, the average temperature change is 0.7 degree Celsius. In Mongolia, it is 2.1 degrees."
She said it was "causing desertification and drying of rivers, glaciers are melting and permafrost is thawing", and nomadic herders were being affected.
Oyun said various initiatives were being implemented to tackle the problems. The package of reforms includes a series of incentives and penalties for misuse of water and waste disposal as well as tax benefits for firms investing in green technology. It also includes the introduction of environmental audits for mining projects and restrictions on mining activities.
Some of these measures build on efforts by the former government to introduce an element of environmental awareness into corporate decision-making.
Oyun said the "government will come up with a list of areas that are ecologically and environmentally important and they will be off-limits to mining", and her ministry planned to have demarcated two-thirds of the country within the next 18 months as either being suitable or unsuitable for mining activities.
By the end of this year, she hopes to have a draft proposal ready for parliament that will upgrade overall environmental standards at the mines. Her goal is to reach European Union-level compliance.
How the changes affected the mining industry "depends on what kind of operation you are running", said Chris Cowan, a director of Toronto-listed Erdene Resource Development, a specialist in mineral prospecting in Mongolia.
"For large-scale mines, water is a very big issue as water is like gold", he said, and miners would sometimes run into conflicts with herders and local governments.
Cowan said the cost of implementing new rules was no different from operations elsewhere in the world and his main concern was how the rules were interpreted, leading to confusion over where exploration could be carried out and mines developed.
Dale Choi, who runs Independent Mongolian Metals & Mining Research, said that in recent years more than 400 mining licences had been cancelled without compensation because of proximity to water sources or newly designated protected areas.
The government will also be diverting a share of revenues raised from water, hunting and forestry tariffs to local authorities for investment in environmental protection. Ultimately, the goal is to spend at least 1 to 2 per cent of annual gross domestic product on a green economy. The government hopes to work with the private sector and is launching a series of potential public-private partnerships, including the construction of reservoirs and dams to improve Ulan Bator's water supply and work on waste-water facilities.
Inside the Tree Global greenhouses, seedlings are grown for private-sector clients using a containerised process whereby the tree is moved to successively larger pots as the roots develop. Depending on the species, the trees can grow up to a metre between February and October, when they will be moved offsite for planting.
Tree Global chief executive Gregory Hess said historical survival rates for locally managed nursery-grown trees were 5 to 10 per cent but his trees were averaging above 90 per cent survival rates once planted.
The firm's trees include poplar and pine species. They are planted in sites along the Tuul River valley, which flows from northern Mongolia through the capital and at various mines around the country. They are also being used to help repopulate the forests that sporadically cover the landscape north of Ulan Bator.
"The need for trees is huge. The rate of deforestation in the northern forests and Gobi area is very high. In the north, it exceeds 80,000 hectares per year," Hess said.
"If you look at comparable forest-based economies, Germany has the same size of forest area and Germany plants between 150 million and 180 million seedlings per year. Mongolia is effectively at zero."
Weather can't cool boom in Ulan Bator
Mongolian capital has seen real estate prices rise eightfold since 2001 despite its harsh winters
September 25 (South China Morning Post) Some city centres are defined by geographical boundaries. Others are marked by ring roads and highways.
In the Mongolian capital Ulan Bator, it is delineated by the central heating grid.
Although expanded over time, its reach has failed to keep up with the city's growth.
Home to almost half of the country's 2.8 million people, Ulan Bator has doubled in population since 2000, putting pressure on existing infrastructure and leading to a property-market boom that is unparalleled in recent history.
The potential of the market was the first thing to strike Lee Cashell.
After visiting Ulan Bator for the first time in 2001 while on holiday from his job as a Hong Kong-based venture capitalist, Cashell picked up three Soviet-era apartments for US$30,000.
"From my view as a venture capitalist, this was an undiscovered country. So I made my first investments in real estate. I had yields of about 60 per cent with no capital gains tax, very little income tax and rapid price appreciation. In my mind, it was the easiest place to invest anywhere in Asia at that time," Cashell said in his expansive, open-plan office close to Ulan Bator's century-old Choijin Lama Temple.
The chief executive of Asia Pacific Investment Partners (APIP), Cashell has, since 2001, built a business empire that in many ways mirrors the trials and tribulations of the Mongolian real estate market.
After quitting Hong Kong in late 2001 when the dotcom boom went bust, Cashell opened Mongolian Properties, the country's first real estate brokerage. He initially focused on finding properties for the growing number of expatriate families moving to Mongolia as international mining companies started investing.
"I hung up my shingle and people started walking through the front door," he said.
The business grew steadily despite competition from local and overseas-backed entrants, and Cashell estimates he still has 80 per cent of the expatriate rental market.
In 2003, his group expanded with the creation of Asia Pacific Land, a locally focused developer. Specialising in mixed-unit retail and apartment buildings, the firm aimed to fill a gap at the upper end of the market.
"We originally focused on expatriates, which initially meant a nicely decorated place, and secondarily meant places with decent security, and then thirdly meant integrated condominiums catering to the upper management level of expatriate," Cashell said.
"And then it turned out that wealthy Mongolians also liked this kind of building."
In part concerned about the supply chain and overall construction quality, APIP acquired its own cement factory, Central Asian Cement, in 2008. That move was swiftly followed by the founding of Mongolian Properties Construction, which allowed APIP to target business opportunities outside of its own developments.
The company starting winning bids for a wide range of projects including car showrooms and bespoke offices.
The city became a giant construction site. Underpinned by a decade-long boom in natural resources, Soviet-era housing blocks and offices in the area around Sukhbaatar Square - where the Great Khural parliament building is situated - have been torn down, replaced by stylishly designed and decidedly more functional retail and residential buildings characteristic of any modern capital.
In 2011, the government announced a "100,000 homes" construction project to be supported by financing for first-time buyers. Mortgages at 8 per cent interest issued by the government-backed Mongolian Mortgage Corp (MMC) were made available to buyers of units less than 540 square feet in size.
Previous rates were typically in the 16 to 19 per cent range. MMC data shows that the number of mortgage borrowers increased from 4,774 in 2005 to 29,447 in September of last year.
Real estate prices have risen eightfold since 2001. City centre apartments were selling for US$1,270 per square foot last year compared with US$150 per square foot in 2001, according to data from APIP. Residential rental yields are now in the 15 to 20 per cent range. Office prices have doubled since 2008.
Even the recent economic downturn has not diminished the market's momentum. "It has kept it from going up," Cashell said.
One reason has been urbanisation. The city has grown outwards as a steady flow of rural migrants enter the city. Most were too poor to afford rental accommodation, and so took advantage of Mongolian laws that grant small pieces of land to each national to set up informal communities on the lower slopes of the hills that ring Ulan Bator.
Named ger districts, and home to an estimated 700,000 people, these areas are showing nascent signs of increased prosperity, with a slow metamorphosis from simple tent dwellings into sturdier and more durable wooden and stone bungalows.
Outside the heating grid and mains water supply, residents rely on wells and rivers for water, and in winter burn foraged materials to keep warm.
As these can include discarded tyres and construction materials, the city is blanketed with an acrid black cloud of pollutants during winter. Air-quality standards are often the worst in Asia.
Even though construction site floodlights and cranes hum late into the night, developers say that consumer expectations are growing and there is still not enough quality construction coming to market.
"Very few real estate developers in Mongolia give serious consideration to the well-being of their prospective occupiers," said Bayar Zorigt, the development director for Mongolia Growth Group, a Canadian-listed financial company and real estate developer.
"The vast majority of the construction these days is simply a skeleton with a cheap glass box around it, with minimal amenities and services allowed for.
"It is common in Mongolia for the developers to go for a large return on their investment rather than sacrifice a portion of the profit towards the well-being of the end user."
Empty shells are appearing in parts of the city, with access to capital a recurring concern for companies across Mongolia.
Cashell has overcome this by selling equity. APIP now has 60 shareholders who have 16 per cent of the company. Cashell and his wife control the remaining 84 per cent.
To grow further, Cashell plans an initial public offering in London or Hong Kong within the next 10 months to raise US$160 million. For now, he pre-sells his apartments, shops and offices to fund construction.
Mongolia among world's fastest developing countries: president
UNITED NATIONS, Sept. 26 (Xinhua) -- Mongolian President Elbegdorj Tsakhia said Thursday that his country is among the world's fastest developing economies with double digit percentage growth.
The president, addressing the General Debate of the UN General Debate, said, "We are fortunate to have abundant natural resources which offer great growth prospects and a unique opportunity for economic development and social progress."
"Mongolia has achieved many development goals in areas such as universal primary education, reducing child mortality and improving maternal health," he said, adding its national report on Millennium Development Goals (MDGs), a set of eight anti-poverty targets to be reached by its deadline of 2015, suggests that more still need to be done.
"To reach our development goals, the government is working closely with all national stakeholders, including political parties, the private sector, research institutions, civil society and media," Tsakhia said.
Over 70 million people worldwide join the middle class annually. According to the president, the MDGs have improved the lives of billions of people. "The world has reached poverty reduction targets -- in some places, even ahead of the proscribed deadline."
"Rather than seeing 2015 as the end, we should view it as a beginning of new era," he said. "In this era, we should build on our successes, attend to gaps and meet emerging challenges."
Talking about challenges ahead, he said over 200 million people are jobless, over 50 million children are not in school; and one out of eight of our fellow citizens still go hungry, whereas over 900 billion U.S. dollars are earmarked for military expenditures every year.
"Only a fraction of that (military expenditure) is spent on healthcare and education. Such a state of affairs should not be tolerated," he stressed.
Politics During the Current Economic Crisis
By Dr. Julian Dierkes
September 26 (Mongolia Focus) There is no political crisis in the sense of any conflict within parliament or between parliament and the president. Nor are there major scandals at the moment. However, there does appear to be a crisis in the sense of the lack of ability of policy makers to address the current economic challenges and to move toward immediate and long-term solutions.
This is also somewhat ironic, of course, as the re-election of President Elbegdorj seemed like a triumph for the Democratic Party and its occupation of the three highest constitutional offices (president, prime minister, chairman of the Ikh Khural) at the same time as having a DP mayor in place for Ulaanbaatar.
PM Altankhuyag has been – perhaps surprisingly – successful in keeping his coalition of the DP, MPRP and Civil Will Green Party together for over a year now. Factions and disputes between factions often bubble to the surface within the DP and while a replacement of Altankhuyag as prime minister does not seem imminent, it would also not come as a major surprise. Few would place a lot of money on the likelihood that Altankhuyag will be able to serve out an entire term until the 2016 election. The current rumours seem to point to Minister of Defence D Bat-Erdene (no relation to former MPP presidential candidate, B Bat-Erdene) as a possible replacement.
For the moment, there does not appear to be a viable alternative to the current coalition of DP, MPRP, and CWGP as the MPP seems unlikely to want to enter into any coalition, especially since it is facing an on-going leadership crisis of its own. On the questions surrounding the economic crisis none of the parties offer a particularly different vision of how to tackle the current challenges, nor on the direction to pursue in the long run.
On the policy-making side, the government's contrition over last year's foreign investment law – once again – seems largely reactive, not the result of strategic considerations that have led the government to pursue a particular course of action. Acting primarily in a reactive fashion is obviously not unique to the Mongolian government, but it has been a pattern in the country when it comes to investment and mining regulations. The pendulum swinging from the initial welcoming of foreign investment around the turn of the millennium to the Windfall Profits Tax in 2006 and back to a more welcoming stance in the negotiations for the OT Investment Agreement charts the reactive nature that legislation on foreign investment has exhibited.
Elbegdorj has announced that he has withdrawn the much-aligned (at least by foreign and business observers) draft Mining Law, and has even recused himself from further deliberations.
This lack of strategic planning is yet another piece of evidence for my on-going argument that one of the crucial roadblocks to Mongolia's economic, political and social development continues to lie in its lack of policy-analysis and policy-making capacity.
The greatest fear regarding the political reaction to the current crisis is thus that reactive policies represent yet another swing of the policy pendulum toward investor friendliness which might be followed again at some point in the medium-term future by a swing in the opposite direction and to opposite extremes.
In his recent statements, Elbegdorj has made it clear that he feels a profound responsibility for the fate of Mongolia for the remainder of his term. He has pointed this out in light of the fact that this will be his final term as president and that he thus is not acting out of personal ambition. Some argue, on the other, hand that he may be driven precisely by personal ambition, given his rumoured ambition for a position with an internal organizations, perhaps the UN.
Video: Mongolia's Democracy at Home, Partnership Abroad Agenda
H.E. Mr. Tsakhiagiin Elbegdorj, President of Mongolia, spoke at an IPI Speaker Series event on September 25th.
September 25 (International Peace Institute) --
The event was moderated by IPI Senior Adviser for External Relations, Warren Hoge.
PRESIDENT ELBEGDORJ ATTENDS GENERAL ASSEMBLY'S SPECIAL EVENT "TOWARDS ACHIEVING THE MILLENNIUM DEVELOPMENT GOALS"
September 25 (Office of the President of Mongolia) A Special Event "Towards Achieving the Millennium Development Goals" in the frame of the United Nations 68th General Assembly took place in New York on 25 September.
The Special Event is initiated by the John Ashe, President of the 68th session of the General Assembly. UN Secretary-General Ban Ki-moon, UN President of the Economic and Social Council Nestor Osorio, Presidents of South Africa, Guyana, Rwanda and the Prime Ministers of Japan, Norway, Fiji, the US Secretary of State John Kerry, Foreign Ministers of China and Belarus and high-level officials spoke at the Special Event and expressed their views.
The UN General Assembly focused on accelerating attainment of the Millennium Development Goals /MDG/ and concluded its success in the framework beyond the 2015 MDG target date. Compared to 2010, MDG eradicated world poverty in half, gave significant importance to education and launched Education First initiative, empowered women and effectively combated HIV/ AIDS, malaria tuberculosis and other deceases. MDG played significant role in understanding the connections between peace, development, human rights and rule of law. Countries around the world in solidarity with each other constantly strive to achieve the following goals based on the willingness and enthusiasm of the MDG. And it is important to strengthen goals and success that already achieved.
At the Special Event President Elbegdorj noted that he fully supports the report submitted by High-Level Panel and the Open Working Group of the MDG and said "It is unable to achieve and implement MDGs and post-2015 sustainable Development Agenda without providing decent jobs with decent wages. Although, Mongolian economic growth has slowed down, it maintains a double-digit growth rate. State policy and regulation needed that connects economic growth with household income. Mongolia is one of few countries that submitted the 9th MDG on "Fostering Democratic Governance and Strengthening Human Rights". The Fifth National Report on MDG implementation in Mongolia has recently been completed. Mongolia has accomplished 5 goals from total 24 goals of the document. We planned to accomplish 3 short-term goals and 4 long-term goals. For instance, our goals have been accomplished on improving maternal health and reducing child mortality under age 5 years, reducing the risk of HIV/ AIDS, tuberculosis and others deceases, providing safe water supply and adoption of new technologies of healthy, clean environment and adoption of modern information technologies.
The increase of woman Members of Parliament played significant role in promoting gender equality in Mongolia. But, our goals on reducing poverty are not accomplished yet, due to high unemployment rate. The Government of Mongolia is taking measure and implementing policies to increase employment, improve education and medical service and reduce difference between rural are and urban.
IDEA TALKS: Tsetsenbileg Tseven on democracy assessments in Mongolia
September 18 (International IDEA) Tsetsenbileg Tseven on the experiences of Mongolian Academy of Sciences and their democracy assessments, at IDEA conference "Citizen-led assessments of democracy, a decade of experiences around the world." Bangkok Thailand 17 Sept 2013.
US And Mongolia Sign Bilateral Transparency Agreement
September 25 (Eurasia Review) The United States and Mongolia signed an Agreement on Transparency in Matters Related to International Trade and Investment Tuesday in New York, New York, the US State Department said.
According to the State Department, the agreement, signed by United States Trade Representative Michael Froman and Mongolian Foreign Minister Luvsanvandan Bold, marks an important step in developing and broadening the economic relationship between Mongolia and the United States.
"The U.S.-Mongolia relationship has seen impressive growth over the past two decades. This bilateral Transparency Agreement adds to the continuing positive momentum in relations and benefits both countries by creating a more transparent and predictable environment for doing business," the State Department said in a statement.
The goal of the Transparency Agreement is to make it easier for American and Mongolian firms to do business. The agreement covers transparency in the formation of trade-related laws and regulations, the conduct of fair administrative proceedings, and measures to address bribery and corruption.
In addition, it provides for commercial laws and regulations to be published in English, making it easier for international investors to operate in Mongolia.
Book 10% Yields With Trade & Development Bank Of Mongolia's Short 2 Year Bonds!
By Randy Durig
September 25 (Seeking Alpha) This week we return to the far eastern country of Mongolia to take a second look at what we believe are significantly better yielding U.S. dollar corporate bonds relative to the amount of risk that investors typically find in more common and popular domestic U.S. corporate bonds. The financial sector is considered as one benefiting the most from Mongolia's rapid economic growth, which is being fueled by the development of its world class mineral resources. Our research leads
With a population of less than three million and a territory as large as Western Europe, Mongolia's extensive mineral deposits and attendant growth in mining-sector activities have transformed Mongolia's economy, which traditionally has been dependent on herding and agriculture. The country opened a fledgling stock exchange in 1991, and joined the World Trade Organization in 1997. Growth averaged nearly 9% per year in 2004-08 largely because of high copper prices globally and new gold production. By late 2008, Mongolia was hit hard by the global financial crisis. As a result, Mongolia's real economy contracted 1.3% in 2009. In October 2009, Mongolia passed long-awaited legislation on an investment agreement to develop the Oyu Tolgoi mine, which is now 51% owned by Rio Tinto () and is considered to be among the world's largest untapped copper deposits. Eighty percent of the value of Oyu Tolgoi is in the extensive underground mine, which is still in early stages of development, and is projected to begin production in 2016. Oyu Tolgoi is expected to account for one-third of Mongolia's GDP by 2020. In March 2011, six big mining companies prepared to bid for the Tavan Tolgoi area, the world's largest untapped coal deposit.
Mongolia purchases 95% of its petroleum products and a substantial amount of electric power from Russia, leaving it vulnerable to price increases. Due to severe winter weather in 2009-10, Mongolia lost 22% of its total livestock, and meat prices doubled. Inflation remained higher than 10% for much of 2010-12, due in part to higher food and fuel prices. Mongolia's economy grew by 6.4% in 2010 and 17.5% in 2011 on the strength of commodity exports to nearby countries, high government spending domestically, and very notably, the development of Oyu Tolgoi. Foreign direct investment into Mongolia is heavily skewed towards mining, and following calls by nationalist politicians to renegotiate the investment agreement with Rio Tinto and the passing of the controversial Strategic Sectors Foreign Investment Law (SSFIL) in May of 2012, the attractiveness of Mongolia as a destination for foreign direct investment lost its luster. As a result foreign direct investments fell 17% y-o-y to US$3.9bn in 2012, while GDP growth slowed to 12.3% in 2012 from 17.5% in 2011. Mongolia remains one of the fastest growing country in the world with an over 7% year over year growth rate. While this is low compared to the blistering growth rate of 2011, it reflects as much as a 43% slowdown so far this year in direct foreign investment from investors outside the country seeking to capitalize on the sheer abundance of Mongolia's very low cost mineral resources.
Foremost in the headlines has been the ongoing dispute between the Mongolian government and executives at Rio Tinto over terms for US$4.2 billion in project financing to fund an expansion at the giant copper and gold mine Oyu Tolgoi, which is crucial to Rio's and Mongolia's growth. Just this week Oyu Tolgoi's board, which includes three new Mongolian members, announced the appointment a new chief executive at Oyu Tolgoi, as it continues to work towards the resolutions of outstanding issues. Furthermore, Mongolia is moving toward scrapping a year-old law restricting foreign ownership of what the country deems strategic assets, including mines, as it struggles to reverse the effects of resource nationalism and a global commodity slump. However, global brands from Nestlé SA () to Porsche AG () said the worst has passed for as wage increases and consumption in cities in the country's interior drive sustained growth. Therefore, we see this recent turn of events as boding well for neighboring Mongolia's economy and for the Trade and Development Bank of Mongolia.
Standard & Poor's credit rating for Mongolia remains at BB-. Moody's rating for Mongolia sovereign debt is B1. Fitch's credit rating for Mongolia is B+.
The Trade and Development Bank of Mongolia LLC (TDB), the oldest bank of Mongolia, was founded in 1990 and is based in Ulaanbaatar. As revealed in our , it is also one of the largest banks in Mongolia, and together with its subsidiary, TDB Capital LLC, it has about 1219 staff providing various banking and financial services including large corporate, SME and retail lending, deposit-taking, trade finance, remittance, cash management, treasury, foreign exchange and investment banking through a network of 47 branches. TDB acts as a primary lender to most of Mongolian leading corporations as well as foreign corporations and foreign representative offices across all major industrial and commercial sectors. Leveraging this pre-eminent position and its long-standing customer relationships, the Bank has consolidated its market-leading position in the handling international trade finance and remittance, with access to credit lines from major international lenders and correspondent banking relationships with over 150 international financial institutions.
TDB is 73.1% owned, directly and indirectly, by
As a result of the high loan growth of 142% in 2011, TDB's Tier 1 and total capital adequacy ratios (CAR) declined to 8.2% and 12.7% at end-2011 from 10.2% and 16.3% at end-2010, respectively. Despite significant loan growth during 1H 2012, its Tier 1 and total CAR improved to 9.1% and 14.5%, respectively, as of June 2012 helped by a capital injection from Goldman Sachs in February 2012. At the end of June 2013, TDB's total assets reached MNT 3825.2 billion and capital funds reached MNT 327.5 billion, representing 26.5% and 28.7% market shares respectively. The Bank has had a strong earnings track record with MNT 15.0 billion in 2009, MNT 20.7 billion in 2010, MNT 48.5 billion in 2011, MNT 64.8 billion in 2012 and MNT 30.7 billion at the end of June 2013.
Earlier this year, at the , the President of the Trade and Development Bank, R.Koppa, stated that a total of USD 68 billion is needed to develop Mongolia in the near future. He said that 20 billion USD of it will be spent in the mining sector, 12 billion in infrastructure, 8 billion in urban development, 2 billion in agriculture, 20 billion in trade and industry, 2 billion in environmental protection, 2 billion in social development and 2 billion in finance. He also pointed out that 14 billion USD will be raised from Foreign Direct Investment, 18 billion from internal sources, 6 billion from government bonds, 16 billion from international capital markets, 12 billion from international financial organizations and the rest, 2 billion USD, from donor countries.
Moody's states that the probability of systemic support for TDB is high, given the bank's large market presence in Mongolia. The systemic support indicator for Mongolia (i.e. the government bond rating) is B1, which leaves the bank's local currency bank deposit rating at its standalone rating of ba3. TDB's foreign currency deposit rating is B2, and is constrained by the country ceiling. Moody's rating of B1 (stable) is underpinned by TDB's good franchise value as one of the largest banks with expertise in corporate banking in Mongolia where it held 28.5% corporate lending market share, in the end of March 2013. TDB serves approximately 400 major Mongolian corporations in almost all major business sectors. An upgrade of the sovereign rating could be positive for the banks ratings, especially if it can maintain its currently healthy asset quality, capital, and profitability metrics throughout the economic cycle.
As the leading banking and financial services provider in Mongolia, it appears that TDB is well positioned for continued growth and profitability as an integral and vital component within the rapidly expanding Mongolian economy. Considering last week's parliamentary approval of recent amendments to Mongolia's Foreign Investment Mining Laws, it is our opinion that the Trade and Development Bank of Mongolia will benefit from the renewed interest of investment monies ready to enter the country.
The default risk is Trade and Development Bank's ability to perform. As most rating agencies still rating Mongolian sovereign debt at single B, the country's low rating pretty much ensures a glass ceiling equivalent to the only nation it operates within. However, considering their historical and recent performance, their sound tier one capital position, a reasonably easy access to the additional capital
The hardest risk for
TDB is relatively small compared to other financial institutions, and many factors such as presidential elections, trending populism and patriotism, China's weakening demand for coal, cheaper coal prices, positive changes from strategic investments, the draft mining law, sales of Chinggis bond and the international attention on Mongolia will all have their own impacts on Mongolia's economy. However, it often appears that companies outside of the United States might also have an internal cash flow advantage. Consequently, we see these TDB bonds as having similar risks and maturities to other Yankees bonds such as ),), or also located in the country of Mongolia is one of the larger and more established companies ), which we have reviewed previously on our blog.
All things considered, it is our opinion that TDB has positioned itself as a leader within the Mongolian financial sector. As Mongolia continues to develop its world class resources, we think these short term Trade and Development Bank U.S. dollar bonds represent both sound diversification and a high yield relative to the fiscal risks that we can identify, and believe that their lower "B" ratings are largely attributable to the sole country that they currently operate within. Therefore, we are these high yielding Yankee bonds from TDB to our list of
Durig Capital and certain clients may have positions in TDB 2015 bonds. I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.
Private equity group helps Mongolian firms connect with outside world
Private equity pioneer supports companies through financing and managerial expertise
September 27 (South China Morning Post) In a country rich in minerals Batsaihan Jamichoi provides a rare commodity - capital financing.
A partner in one of the country's first private equity groups, Mongolia Opportunities Partners, Jamichoi tries to help mid-tier firms with financial backing and managerial acumen.
"The main idea is financing into sectors with high growth potential. We help them find additional financing and strategic partners to help further business development. We also help improve corporate governance and general management practice so these companies would become one of the best performers in their sector. We function as a bridge," Jamichoi told the South China Morning Post.
A rambunctious parliamentary democracy and embracer of market economic reforms since the early 1990's, Mongolia's geographical remoteness seems an apt metaphor for its access to global capital markets.
Despite an abundance of natural resources, successive governments struggled during the 2000s to maintain healthy fiscal accounts in the face of volatile commodity prices, resulting in an intervention by the International Monetary Fund in 2009.
Only in recent years has the country been able to tap the global debt markets with a US$1.5 billion Chinggis bond and that issue took place before the deterioration in gross domestic product growth in late 2012. Sold in five and 10-year tranches, the government paid 4.125 per cent and 5.125 per cent interest respectively. A further US$580 million has been loaned via the government-backed Mongolian Development Bank.
In September, Mongolia's prime minister announced plans for a yen-denominated Samurai bond raising up to US$1 billion.
Data from Fitch and the World Bank suggests general government debt as a percentage of GDP will hit 40 per cent in 2013 from 29.3 per cent in 2011, while the fiscal deficit has deteriorated to 8.4 per cent of GDP in 2012 from 4.8 per cent in 2011.
Mongolian corporations still struggle to gain international financing. Companies have mostly relied on organic growth, investment from multilateral lenders such as the World Bank's International Finance Corp, or short-term bank loans with annual interest rates around 20 per cent. The local stock market has been bedevilled by seesaw returns, low liquidity and arduous listing rules.
The market's index of 20 leading companies is down 23 per cent for the year. There are few funds operating in Mongolia and daily trading turnover ranges from US$20,000 to US$60,000.
The driver behind plans to improve this is the Mongolian Stock Exchange (MSE). In partnership with the London Stock Exchange they have been upgrading their trading platforms and stripping out procedures that were hindering development.
"We now estimate IPOs can be done in four months instead of one year," said Andrew Economides, the MSE Head of Market Development.
As part of a new securities law to come into force in 2014, the government will allow a greater range of investment products to be developed, provide a stronger framework for dual listings and permit depositary receipts to attract foreign investors.
The MSE is also considering encouraging larger firms to dual list partly in Mongolia rather than exclusively overseas. One firm that analysts expect to do so is coal mining giant, Tavan Tolgoi, which could raise US$3 billion.
Complementing the securities law will be rules to allow the establishment of custodian banks making it easier for institutions to trade the market. Mongolian-listed firms will then also be able to trade on tracker funds such as the FTSE Frontier Market Index.
Regulators hope that foreign investment will help shake up the local securities firms. There are about 70 registered securities trading firms in Ulan Bator, but many do little trading. "One person with an excel spread sheet sitting in a car. He can be a broker," said Economides.
For local brokerages, the impact of new market entrants is a cause for concern. "Local connections and understanding how capital markets work" should give locals an advantage, says Masa Igata, chief executive of Mongolian brokerage Frontier Securities.
For investment firms like Jamichoi's, a functioning stock market will provide an important exit strategy for his fund's investments in the years ahead.
Launched in 2011, the fund has taken minority positions in a handful of firms including a mining equipment supplier and a building material firm. Backed by local and foreign investors including IFC and Mitsubishi, the fund typically invests US$5 million to US$10 million out of a total fund size of US$50 million.
"It usually takes a few interactions before firms capture the idea of equity investment. "The first question is what interest rate you charge and what is the repayment schedule," says Jamichoi.
With greater inter-connectivity to global capital markets those days will soon be numbered.
Mongolia to push wind farm finance
September 27 (Trade Finance) FMO has touted increased investment in Mongolia's thriving wind energy sector, Trade Finance has learned.
The Dutch development bank is eyeing increased wind farm investment in Mongolia after successfully funding the country's first wind project in March last year.
Speaking to Trade Finance, Aart Mulder, the bank's manager for energy in Asia, says it wants to use the successful template from the...
Mongolian fluorspar: a near-term success story?
September 26 (Industrial Metals) Genghis Khan, the most famous of all Mongolians, is known for creating the world's largest empire in the 13th century, stretching from Poland in the west, to Korea in the east, and from Siberia in the north to the Gulf of Oman and Vietnam in the south.
Khan, famed for his brutality, should also be recognized for creating the world's the first trade route, the Yam courier system.
This system, known as The Silk Road, opened the region to trade and information, providing a passage between Asia and Europe.
And, as present-day companies have discovered, this trading principle still functions, with Mongolia both encouraging and facilitating foreign investment.
The country's largest export is copper, followed by apparel, livestock, animal products and cashmere (Mogi: what about coal?), according to Economy Watch. Its major export partners are China, Canada, UK, and Luxembourg.
Fluorspar, although slightly further down the list, is also seen as an important future growth area.
Mongolia produced 420,000 tpa in 2012, according to the United States Geological Survey (USGS).
It is the third-largest producer in the world, with most of its supply feeding China and Russia.
In fact, insufficient transportation infrastructure means Mongolia's only markets for fluorspar are these two countries, largely via the Trans-Mongolian Railway, which connects China (at Zamyn-Uud) and Russia (at the Altanbulag port).
While Mongolian production has recently stuttered as global demand has fallen, most market commentators believe that the market will pick up.
Prima-ed for a great deal
Vancouver-based Prima Fluorspar signed a letter of intent (LOI) in September with New York, US fund Firebird Management - which holds a 99.8% majority stake in Berkh Uul JSC, owners of the Delgerkhan fluorspar mine.
"The acquisition of the Delgerkhan mine positions Prima to become a major global fluorspar producer and supplier," CEO Robert Bick told IM.
The deposit holds almost 10m tonnes of ore grading 33.47% CaF2.
The Delgerkhan fluorspar mine has an interesting history, having worked as a fluorspar mine since the 1950s, with approximately 90,000 metres drilled in the period between 1950-2000.
"Delgerkhan is one of the largest in the world," James Passin, fund manager at Firebird, told IM.
Passin has been developing the mine since 2011.
"We have been working on drilling the deposit to produce an NI 43-101 compliant resource. There is fluorspar that we would intend to produce through an open-cast mine. The rest of the deposit will be produced by underground mining by rehabilitating the existing shafts," he told IM.
Historically, the mine produced metallurgical-grade fluorspar (metspar), but Firebird believes "there's potential to build a flotation plant and produce acid grade as well as metspar".
The next steps for the project are to dewater and remediate the existing mine infrastructure, with a target date of Q4 2014 for first production, at a run rate of 120,000 tpa.
Mongolia Minerals Corp.
Mongolia Minerals Corp. is developing its Dai Uul project in the Dornogovi Province. The project is not as advanced as Firebird's, but it recently increased its reserve estimation.
The company underwent an extensive drilling campaign in 2012 to enlarge the existing reserve base, and is working towards establishing a JORC-complaint resource.
"It bears noting that under the Mongolian reserve code, to be included in reserve calculations, reserve blocks need to have an average grade of 25% CaF2 or above, which is higher than typical international norms," James Rodriguez de Castro, managing director, told IM.
Testwork is currently underway to explore the possibility of recovering additional fluorspar by including lower-grade ore into the economically exploitable reserves through pre-concentration.
Both Passin and Rodriguez de Castro agree that developing a project in Mongolia has cost advantages.
"We have a huge cost advantage on the existing infrastructure and mining assets, which will allow us to get to production without having to invest a lot of capital, compared to a lot of other large fluorspar deposits," Passin said.
Domestic sheep wool being used for building insulation
September 25 (UB Post) Mongolia is now able to not only produce cotton fleece from sheep wool but also building insulation material. Below is a brief interview about this latest development with B.Ganbat, head of the Mongolian Wool Products Manufacturers Association.
-How are you planning to process sheep wool for preparing insulation material?
-We have set an objective to use sheep wool for two purposes. First, to fully provide uniforms made with domestic cotton to all General Education School students. Further, we aim to accelerate this work and manufacture the cotton in Mongolia, as the cotton is now produced in Korea with Mongolian sheep wool. Second, we'll manufacture building insulation material with domestic sheep wool. We have already signed a contract with a Japanese company in the same sector. A team of five Japanese experts in manufacturing will land in Mongolia today. They will decide what equipment is required to start insulation manufacturing here, after studying our domestic sheep wool and equipment in Mongolia.
-Where will the insulation material made with Mongolian sheep wool be used?
-As part of the "Soum" Project of the New Government for Changes, administrative boards, business entities, and public service centers of provinces and soums will be relocated in one central complex, with wooden buildings of the same design. The design has already been done. In the first stage, the buildings will be constructed and the insulation material will be used for them. The government allocated 50 billion MNT for the work.
-Why did you choose to partner with Japan in the manufacturing of insulation material?
-Japan has the highest usage of insulation material made of sheep wool. Though it is also used in Germany and other European countries, it is not as popular as it is in Japan. Japanese people live in wooden buildings and insulate them with wool. Fiberglass insulation has been off the market in Japan since 2000 because of the risk of health hazards. Pollen from fiberglass insulation fossilizes in the lungs. Mongolia has raw material ready for manufacturing and we are in need of insulation material. Therefore, we will manufacture the insulation here.
Mongolian leader says 2015 must be seen as beginning, not end of effort to achieve development for all
26 September 2013 (UN News Centre) – Labelling his country "an old nation with a young heart," the President of Mongolia told the United Nations General Assembly today that while his nation was able to achieve many of the Millennium Development Goals MDGs, reaching the unmet targets required national stakeholders, the private sector, research institutions, civil society and media working together.
"Rather than seeing 2015 as the end, we should view it as a beginning of new era. In this era, we should build on our successes, attend to gaps and meet emerging challenges," said Elbegdorj Tsakhia, adding that the currently, the world has too many hungry people, too much violence, and too little commitment to human rights. "We need to change that," he told the Assembly's General Debate.
On the issue of the environment, he said Mongolia promoted a green development policy, creating and preserving national parks to curb desertification, as well as exploring the potential of renewable energy. In light of the many environmental challenges, such as land degradation, deforestation, natural disaster and pollution, Mongolian people, especially its youth, are fully committed to building a better environmental future.
Turning to the issue of corruption, Mr. Tsakhia said that Mongolia had a zero-tolerance policy at all levels of Government, which resulted in the country advancing 26 places in the Transparency International ranking of Member States. Convinced of transparency being key in the fight against corruption, he pointed out the country's "glass account" system, which ensures that all funds were accounted for openly and transparently.
He noted that, as the country held the chair of the Community of Democracy, Mongolia placed great importance on democratic development. Promoting freedom and democracy, as well as fostering civic engagement would strengthen democratic institutions and improve human rights, because "knowledge is power", he said.
The move towards greater democracy was pursued nationally and regionally, as displayed by the country's efforts to share the lessons of parliamentary democracy and legal reforms with Kyrgyzstan, as well as other initiatives, including providing trainings for diplomats and public servants from Afghanistan, he said.
Ban, Mongolian President discuss politics of landlocked developing countries
22 September 2013 (UN News Centre) – Secretary-General Ban Ki-moon today praised Mongolia's "pioneering role" in of promoting the needs of landlocked developing countries, and its active role in sustainable development.
Mr. Ban met with President Elbegdorj Tsakhia at the United Nations headquarters in New York ahead of the high-level debate of the General Assembly, due to start on Tuesday.
The UN chief expressed his appreciation for the constructive international role played by Mongolia and its contributions to the Organizations, including to UN peacekeeping, according to a readout of the meeting.
Today's discussions also focused on sustainable development, the post-2015 development agenda and climate change.
Mongolia hosted this year's World Environment Day celebration on 5 June, which focused on reducing food waste and loss.
The country was chosen for its efforts to shift towards a green economy in its major economic sectors such as mining and for promoting environmental awareness among youth. According to the UN environmental agency (UNEP), Mongolia faces enormous challenges, including growing pressure on food security, traditional nomadic herding and water supplies as a result of the impacts of climate change.
During the meeting with President Tsakhia, Mr. Ban also "welcomed Mongolia's pioneering role in promoting the needs and issues of landlocked developing countries," according to a UN spokesperson.
The UN chief also praised Mongolia for its role in promoting democracy.
The two officials also discussed regional cooperation and the denuclearization of the Korean Peninsula.
MONGOLIA-DPRK INTERGOVERNMENTAL COMMISSION MEETING RUNS
Ulaanbaatar, September 27 /MONTSAME/ The 9th meeting of the intergovernmental consultative commission for economics, trade, science and technical cooperation between Mongolia and the Democratic People's Republic of Korea (DPRK) ran September 23-26 at Mansudae Assembly Hall in Pyongyang city.
Co-chaired by Kh.Battulga, Mongolia's Minister of Industry and Agriculture, and by Ri Ryong Nam, the DPRK Minister of Foreign Trade, the meeting brought together officials of the Ministries of both counties on foreign affairs, road and transportation, labor, construction, urban development, mining, marine transportation, commerce and railways.
The sides concluded the bilateral cooperation, discussed ways of developing it in the trade, transportation, agriculture and physical cultural spheres, and agreed to reflect some specific works in the 2013-2014 action plan.
The countries signed a protocol of the intergovernmental commission meeting.
During the visit to the N.Korea, Mr Battulga Wednesday was received by Mr Kim Yong Nam, the President of the Supreme People's Assembly Presidium, and by Mr Kang Sok Ju, the DPRK Vice Premier.
In addition, our delegation attended an opening of the international autumn fair, then got au fait with light industry and food productions.
Mongolian President hails His Highness the Amir visit, cooperation with Kuwait
TOKYO, Sept 24 (KUNA) -- Mongolian President Tsakhiagiin Elbegdorj has conveyed thanks to His Highness the Amir of Kuwait Sheikh Sabah Al-Ahmad Al-Jaber Al-Sabah for visiting Mongolia and hailed bilateral cooperation between the two countries, official media reported.
President Elbegdorj made the remarks in his recent meeting in Ulaanbaatar with outgoing Kuwaiti Ambassador to Mongolia Mubarak Al-Suhaijan, according to Montsame News Agency.
While showing satisfaction with the effectiveness of projects and programs being co-implemented by the two countries, the president also thanked the ambassador for significantly contributing to efforts aiming to further Mongolia-Kuwait relations, it said.
Al-Suhaijan for his part expressed confidence that bilateral relations have improved during his term, recalling that His Highness the Amir had visited Mongolia three times, in 2011, 2012, and yet again in 2013, and that the Mongolian president and foreign minister were also on official visits to Kuwait in 2011 and 2013.
The outgoing envoy also noted that the Kuwait Fund for Arab Economic Development (KFAED) granted a soft-loan of KD 6 million (USD 22.08 million) to Mongolia in 2010, for constructing a 88-km motorway.
Al-Suhaijan took post back in 2010 as Kuwait's first ambassador to Mongolia.
Public Policy Briefing on Mongolia at Asia House in London
03 Oct 2013, 8.00 for 8.30 - 9.30
Complimentary Corporate Members, Corporate Partners, Champion Supporters & Chairman Circle
Mongolia is the second largest landlocked country in the world. Bordering Russia and China, it is an important connection between East and Central Asia. Since joining the World Trade Organisation in 1997, the government has been encouraging foreign investment and trade through its focus on its 'Third Neighbour Policy'.
Traditionally, economic activity in Mongolia has been based on herding and agriculture. However, the development of extensive mineral deposits has emerged as a driver of the Mongolian economy today. Besides mining, Mongolia also provides investors with a whole range of private investment opportunities in real estate and construction.
HE Narkhuu Tulga was appointed as Ambassador of Mongolia to the United Kingdom of Great Britain and Northern Ireland in January 2013. Previously, he has held various posts within the Ministry of Foreign Affairs of Mongolia, including as Director of the Department of International Organisations. His achievements include serving as Head of Mission in Singapore and Deputy Chief of Mission in Washington DC.
Daniyar Narymbayev: Kyrgyzstan election technologies should be not worse than in Mongolia
September 23 (24.kg) "Election technologies of Kyrgyzstan should be not worse than in Mongolia," the Head of the Kyrgyz President's Office Daniyar Narymbayev told today at the meeting of working group on the election process improvement.
According to him, technological achievements must be used at most in preparation for the election. "The electoral lists are of low quality that is why the main task is forming of such lists in order every citizen could vote. We must be sure, like in Mongolia, that nobody has stolen his or her vote," Daniyar Narymbayev explained.
He added that the suggested amendments will be submitted for public hearings in mid-October. "Of course, we will not be supported unanimously, but we will come down to the point constructively," Daniyar Narymbayev said.
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Mongolia to export eagle feathers to Japan
September 25 (UB Post) Tsarmyn Burged (Eagle of Tsaram) NGO in Bayan-Ulgii Province will now be buying shed Mongolian eagle feathers from eagle hunters and exporting them to the Arrow and Bow Society of Japan. The agreement is an effort to raise funds for efforts to species preservation.
The Society uses shed feathers for producing arrows and bows. Negotiations were held with hunters on the price of feathers and the Arrow and Bow Society and Tsarmyn Burged offered to provide financial assistance for feeding the eagles throughout the year.
Mongolia is home to many endangered and birds of prey and scavenger species, such as the Western Marsh Harrier, Steppe Eagle, Tsarmyn Eagle, Saker Falcon, vulture and bearded vulture. Birds of prey play a vital role in the biodiversity of an ecosystem. Scientists warn that if a single species of predator bird becomes extinct, an ecosystem could lose its balance.
Tyrannosaurus Bataar museum earns 120 million MNT
September 24 (UB Post) It's been over three months since the temporary museum of dinosaurs, home to the fossils of Tyrannosaurus Bataar, opened on June 8, at Central Square. The museum income has so far totaled 120,059,000 MNT, which will be added to State Fund of Mongolia.
The museum was open to the public free of charge for the first month of operation and saw 267,000 visitors. Within two months of its opening, 320,000 more people visited, which totals more than half a million people who have seen the Bataar fossil.
Head of the Office of the President of Mongolia, P.Tsagaan, reported the museum's earnings when he met with the Director of the Mongolian Central Dinosaur Museum, N.Javzmaa, painter D.Batjargal, and organizer B.Battsetseg.
P.Tsagaan also said, "We have to spend a designated fund on establishing a big and magnificent museum in order to popularize our history and heritage. If we erect the most brilliant museum in the world in our home country, Mongolia will draw the attention of the whole world, and citizens from other countries will come to experience the museum themselves. Bataar museum staff successfully showed us that investment in the cultural sector doesn't cause loss but can result in development and higher repayments."
Thirty mothers with physically challenged children sold their hand-made toys and souvenirs of Tyrannosaurus Bataar to museum visitors and earned 6.9 million MNT.
At the request of Darkhan-Uul province officials, the Bataar fossil left for the province on September 20.
Mobility Skills Training Empowers Blind Mongolians
September 26 (Open Equal Free) One year after Massey University Professor Steve La Grow initiated Mongolia's first mobility training program for blind people, he returned to assess the program's progress. He discovered that mobility training brought significant improvements to the lives of blind Mongolians who had previously been entirely dependent on their families and severely restricted in their movements outside of the home.
Sponsored by the Mongolian National Federation of the Blind and the World Blind Union, Professor La Grow traveled to Mongolia in 2012 to train six instructors to teach mobility skills to the blind. Using what they learned during his visit, Mongolian instructors have spent the past year teaching orientation skills that include the use of mobility aids such as canes and sticks. During this time, nearly 50 people completed the four-week, 60 hour training course and gained a sense of safety and comfort in moving around independently.
According to Professor La Grow, "in Mongolia they had nothing, blind people were completely reliant on sighted people to get around, now those who have received instruction can begin to lead independent lives." Before Professor La Grow's mobility training program, blind people experienced severe restrictions to their movement. They relied on sighted family members to guide them, felt their way on their own, or remained isolated within their homes due to risks associated with venturing out into busy cities with their uneven walkways and heavy traffic.
A 2010 government census determined that Mongolia's population of 2.75 million included 16,000 blind persons. Approximately 7,200 of these were adults of working-age; however, due to limited mobility outside of the home and inaccessible workplaces, 97% of these adults remained unemployed and dependent on government welfare benefits. In addition, nearly 5,000 of the blind in Mongolia were children who experienced limited to no access to education because of their disability.
Only one school for the blind exists in Mongolia. This school, located in Ulaanbaatar, educates only 84 of the country's 5,000 visually impaired school age children. It employs blind teachers and produces texts in braille so that these students can receive an education that remains unavailable to the rest of Mongolia's blind children. Other schools have no access to braille books or mobility tools that would allow blind children to attend. As a result, most of Mongolia's visually impaired children remain uneducated. This lack of education further limits opportunities available to the blind once they reach working-age.
Although opportunities remain limited, thanks to the work of the Mongolian National Federation for the Blind and programs like that developed by Professor La Grow, conditions continue to improve for the visually impaired.
Why reading their own language gives Mongolians a headache
September 27 (RocketNews24) Being able to read is something many people take for granted. I mean, English with its Latin alphabet only consists of 26 letters. Now imagine that the writing system (or script) of your country was changed for political reasons. Cities and towns across the border share almost the same spoken language, but with a totally different way of writing it down. This has been the situation in Mongolia. Drastic changes in scripts throughout the twentieth century have led to recurrent headaches for native readers.
I've met many a foreigner in Japan, or third culture kid who despite their fluent spoken language skills was unable to read. Here's an example. A friend of mine who learned Bulgarian from her parents was visiting her native land. She jumped into a taxi, confident that she'd be driven to her destination, and fluently gave the address. The taxi driver gave her an extremely odd look. It turned out that where she wanted to go was right there, but she couldn't read the signs to figure that out.
Spoken Japanese is fairly easy to pick up if you live in Japan, while memorizing the bare minimum of 2,136 kanji characters for everyday use requires serious study. And that doesn't include the incredibly varied characters for personal names or place names. Foreigners who can chat comfortably in Japanese are a lot less likely to be able to read signs or menus, let alone newspapers. Let's just say I've seen even native speakers sneakily looking up how to write a particular kanji on their phones.
Not being able to read easily is tough, wherever you live. In Mongolia, reading can be a huge pain for native speakers… this is why!
- "Ma, why do I have to learn my alphabet twice?"
There are currently two forms of writing the Mongolian language. One is the traditional Mongolian script ("Old Mongol script") written vertically down the page like this:
The other is Mongolian Cyrillic, written horizontally like this:
Монгол Кирилл үсэг
Cyrillic is used in the state of Mongolia, while the traditional Mongolian script is used in neighboring Inner Mongolia (an autonomous region of the People's Republic of China). You might expect that because Mongolian is now written in Cyrillic it's similar to Russian, but in terms of grammar Mongolian is much more like Japanese.
Traditional Mongolian script is said to date from 1204, when scribe Tatar-Tonga was captured by the Mongols and introduced the Uyghur form of writing, originally written horizontally. Eventually, this became written vertically—Mongolians might say that happened because it was easier to write down the horse's neck rather than across.
However, by the end of the century this would change. The Yuan dynasty of Kublai Khan (famous grandson of Genghis) promoted the imperial Phagspa script for the vast area they controlled. This intricate writing system was invented by Tibetan lama Zhogoin Qoigyai Pagba for Kublai Khan. It ambitiously aimed to be a script able to be used for all the languages under their sway, including Chinese, Tibetan and Mongolian.
In 1368 the Yuan dynasty collapsed, and as the Mongols retreated to the steppes, this writing system soon fell out of use and was replaced by traditional Mongolian script once more. The reason Phagspa disappeared so quickly could have been its privileged existence as a faithful representation of the language of the imperial court—it didn't reflect how ordinary people spoke.
About 600 years later, Mongolian script reached another turning point. In 1921 revolution broke out, and by 1924 communist rule was established in the new Mongolian People's Republic.
- "Workers of the world, unite!" Different alphabets adopted under Soviet pressure
▼ Latin script propaganda
In 1924, the literacy rate was below 10 percent. Mongolian script was held up to ridicule, and Latin script was named the alphabet of the revolution for writing Mongolian. Away with the old ways of thinking and in with the new—the traditional teaching of Buddhist parables gave way to educational reform.
From the early 1930s, there were attempts to switch from Mongolian to Latin script, but these early attempts met with strong opposition. However, in the latter half of the decade circumstances changed as continued use of Mongolian script was denounced as "nationalist" in the wake of Stalin's Great Terror. Everyone was forced to support the Latinization of Mongolian writing, in fear for their lives.
In February 1941, the government gave an official green light to the use of Latin script, but the following month, these same public officials decided Mongolian should be written using the same Cyrillic alphabet as Russian. Clearly, there had been some kind of pressure exerted by Moscow.
In the 1950s, linguistically-divided Chinese Inner Mongolia also began to consider adopting Cyrillic. But from the end of the decade the Sino-Soviet split came to a head and cast a pall over this movement, which eventually sputtered and died.
During the perestroika period, Moscow's grip loosened. People regained their appreciation for tradition, and cultural renaissance was in the air. A new movement to abolish Cyrillic and restore Mongolian script arose. In September 1992, education began in Mongolian script from the first year of primary school. Unfortunately, when these children reached third year, Cyrillic was adopted once more. In the face of harsh economic reality, the budget couldn't stretch to train teachers and educate students in the vertical Mongolian script.
- Writing systems divided by national borders
As a result, while the state of Mongolia and Chinese Inner Mongolia speak almost the same language, it is written in totally different ways in each country. It's possible that these writing systems may never be united.
The phenomenon of border lines creating linguistic division can be seen all over the world. A country which gains independence generally wishes to gain independence from the language of the oppressors and a distinct voice, especially if there is a shared border. Crucially, the changes in written Mongolian did not come about through the will of the Mongolian people, but through the political posturing of surrounding nations. Next time you come across a written English word that you don't know how to pronounce, spare a thought for Mongolia's differing systems of writing.
Humanitarians of the High Steppe
The Flagstaff International Relief Effort celebrates 15 years of good work in Mongolia
September 26 (Flagstaff Live) Winters are extreme, dropping down to an average of negative-40 degrees in some areas, and winds blow snow so hard it doesn't have time to melt. In the spring, unseasonably cold weather, called dzud, can kill the first hint of grasses, leaving livestock that have survived the bitter winter, no fodder to eat. In the winter of 2009-2010, a dzudkilled 8 million livestock, about 17 percent of the total.
Mongolia is a landlocked country between China and Russia, where nomadic life is still a living tradition and the capital city of Ulaanbaator, which has the same latitude as southern Canada and northern Montana, is the coldest in the world.
Kids living under the city
Shortly after the departure of the Soviet Union from Mongolia in 1990 and the collapse of the Mongolian economy, local photographer David Edwards was on the scene in 1992. He had already established an international reputation for his documentary photography of Central Asia.
After having previously photographed horrors in Afghanistan during the war with Russia, he was still shocked by what he saw in Mongolia, especially the city conditions.
He found a country with few Westerners and even fewer photographers.
"I had to go to England to get a special visa; it had no exit date, so I was stuck in the country," Edwards recalls. "I was going around with a social worker photographing the Mongol condition as a photojournalist and documentary photographer."
Then he saw the condition of the kids.
"I went into the slums," he says. "I remember some elderly ladies who had no husbands and lived together. They got a minuscule amount of money from the government. They were taking care of eight street children. In the early 1990s the number of street children swelled to estimates of more than 4,000. I went to orphanages, and I saw children starving to death. Most children would escape and go to the street to steal and prostitute themselves to survive."
The street children often took refuge in the heating-duct tunnels the Soviets built under the city. "Sometimes the kids would be sleeping and the water would drip; they'd be horribly burned," Edwards says. "People were freezing to death. They desperately needed warm clothing. I started taking over winter clothing. I would hand the clothing directly to the kids. I went there twice, and one year I took over 19 duffle bags."
Flagstaff takes action
Back in Flagstaff in 1998, Edwards, and a group of committed Flagstaff citizens motivated by his photographs and stories about conditions in Mongolia, started the Mongolian Orphans Association, which changed its name in 2000 to the Flagstaff International Relief Effort.
Today, the organization is celebrating its 15th year of operation, with a renewed effort at fundraising.
"True charity is doing something you don't get credit for," Edwards says. "My main contribution to FIRE has been making sure we go directly to the people—no middle man. This is how we started, and this is what we are still doing today."
It took the energy and work of many volunteers in Flagstaff to set FIRE in motion, from individuals to groups like local churches and the Flagstaff Arts and Leadership Academy. The distribution process had difficult moments as well as ones of really connecting the donations from the people of Flagstaff with those in need in the far off steppeland of Mongolia, says Jason Hasenbank, a coordinator who went on the 1999 and 2000 distribution trips.
Ryan Strong, a volunteer from FALA, joined the 1999 and 2004 trips, after first collecting, sorting and packing boxes for Mongolia.
"The work I was blessed to be a part of with FIRE has influenced the direction of my entire life. The suffering that we were confronted with totally changed my worldview. I really wouldn't be the person I am today without FIRE," Strong says.
The numbers were staggering. Between 1999 and 2009, FIRE volunteers shipped and personally delivered 10, 40-foot containers. They had hand-delivered 76 tons of winter clothing to 65,000 individuals, provided 80 computers and 6,000 English books to a dozen schools, distributed $720,000-worth of medical supplies, and given 1,000 hours of medical training to 50 rural clinics and hospitals.
"The people of Flagstaff did this," Edwards says.
In 2003, Meredith Potts, manager at the David Edwards photography studio, became involved, eventually becoming executive director in 2004. A complicated process ensured that the poorest of the poor received the needed supplies.
"But this took a lot of time sorting through literally tons of clothing," Potts says. "In Mongolia, each morning we would load a van, with most of the seats removed, with boxes of clothing, a translator, volunteers, a driver and a social worker. All the boxes had been sorted and labeled in Flagstaff. Boxes were sorted by size, item and gender. This process also ensured that we only distributed to the poorest of the poor."
FIRE changes focus
In 2008, after 10 years of clothing distributions, Mongolia was changing and the need for warm clothing was not as great as it once was.
"As an organization, we wanted to effect long-term change, rather than only meet an immediate need," Potts says. "We started to take a closer look at the hospitals and clinics."
A lead researcher from the National Institutes of Health and a medical waste management specialist, approached FIRE, both wanting to address the hepatitis issue in Mongolia. "In 2009, we all met in Mongolia and created a plan," says Potts.
Today FIRE is focused on hepatitis-related issues. "Most healthcare facilities do not handle their needles, sharps, medical waste correctly," she says. "This has given Mongolia a hepatitis epidemic leading to a cirrhosis epidemic, and giving Mongolia the highest rate of liver cancer in the world. I believe that in five or 10 years, we will look back at the declining hepatitis rate and the deaths prevented and be able to say, 'We helped with that.' That is impact. That is empowering Mongolia."
With these changes in focus, the need for volunteer trips lessened, replaced by key, long-term expert Western medical volunteers and Mongolian medical staff.
Since 2009, FIRE has trained 2,000 healthcare workers, distributed 141,500 biohazard medical waste boxes, thousands of training materials and created and distributed 1,700 copies of a health safety training DVDs for healthcare workers. Working in 16 of Mongolia's 21 provinces, they have tested and vaccinated healthcare workers for hepatitis B.
"We have a staff of three Mongolians and an office in Ulaanbaator," Potts says. "Our medical director has been with us three years and has led FIRE to repeated recognition from within Mongolia for our hepatitis work. Together, I think we make a very strong team effecting change."
In 2009, FIRE staff signed a Memorandum of Understanding with the Mongolian Ministry of Health and continues to collaborate with leading global health organizations. Working conditions have also been a concern.
"We met one nurse who said she was stuck with used needles an average of 40 times a month," Potts says. "Another nurse regularly carried used needles from the clinic to the disposal site on a crowded public bus in a plastic bag. These are things we don't think about here. But they are serious issues in the developing world."
A mission in motion
The nonprofit currently has a pilot program where FIRE doctors are going from clinic to clinic, spending several days teaching healthcare workers to set up proper medical waste-handling systems and providing essential related medical supplies that are often too expensive for Mongolians.
This personal touch is what makes FIRE different from so many other international aid organizations: Taking the time and effort to personally assess the need and deliver the aid and training.
"Just like we used to go ger-to-ger [yurt-to yurt], with clothing and blankets, we now are going clinic-to-clinic with life-saving information," Potts says.
Another program in development is building bathrooms and showers in schools, complete with running water in areas where even the homes don't have running water.
This sanitation project will help prevent communicable and waterborne diseases such as diarrhea and hepatitis A.
"We have good momentum going with our hepatitis work in Mongolia, and we are currently looking into opportunities to involve volunteers again," Potts says. "We were started by and have been sustained by volunteers. I would like to connect back to volunteer trips."
Hasenbank says he is amazed by how Potts has enhanced and expanded the original mission of FIRE over time, but she doesn't take credit for herself.
"There have been many pivotal people along the way that we owe a tremendous amount; I could never name them all," she says.
Today FIRE receives a great deal of its funding from within Mongolia. While grants cover all program expenses, most grants do not allow for administrative expenses, such as salaries or rent.
"We are still very dependent on individual donors," Potts says. "Right now we are trying to raise $10,000, which will be matched 50 percent by one of our donors in honor of our 15th year. This will help keep our projects in motion until the end of the year, when new grant funding will kick in."
To learn more about the FIRE mission, visit the organization's website, www.fireprojects.org, or call Meredith Potts at 779-2288.
Auspicious day had couples marrying at midnight
September 24 (UB Post) The day of September 21 is believed to be the most auspicious day this year, according to the lunisolar calendar observed by many Mongolians. It has long been a tradition for Mongolians to wait for specifically for such day to get married. On the 21st, 54 couples officially become newlyweds at the Wedding Palace of Mongolia and started their new lives together.
The Wedding Palace started hosting marriage registration that day at 2:30 a.m. Other popular places for weddings, such as Mongol Shiltgeen and Sky Resort, were all busy with back to back wedding ceremonies as well.
New era of Catholic faith for Mongolia
September 29 (The Catholic Leader) HE may have a gentler approach than the famous Mongolian warlord Genghis Khan, but Bishop Wens Padilla is no less determined to transform the world around him.
As the head of the Church in Mongolia, Bishop Padilla is committed to conquering the hearts and minds of the local population, estimated at three million souls (Mogi: soul estimate a little off but close).
It may not happen at the same pace as when Genghis Khan turned the Mongolian empire into the world's largest, but his passion for sharing the Good News will still change lives.
During Mass at St Peter's Catholic Church, Rochedale recently, Bishop Padilla shared his hopes for the Church, as it continued to make a spiritual foothold in a country previously dominated by Communism.
Reflecting on his 21 years in the country, Bishop Padilla told St Peter's parishioners that he and his fellow missionary priests began the Church in a hotel room.
And it was not just the freezing Mongolian weather, where temperatures can reach minus 45 degrees, that gave them the impression that the Church was being given a frosty reception.
Learning the local language and a predominance of other major religions, including Tibetan Buddhism, Shamanism and Muslim caused significant stress and heartache.
"The poverty of the people also is a big challenge, because we don't have any local income – it's all coming from outside," Bishop Padilla said.
The second youngest of five children, Bishop Padilla still returns to visit his mother in the northern part of the Philippines each year.
He once tried to explain to her how cold it could get in Mongolia by encouraging her to place her hand in the freezer.
"It was only minus 18 degrees in the deep freeze and I had to tell her it could get even colder," he said with a smile.
Born in the Philippines in 1949 and ordained in 1976, Bishop Padilla worked for 15 years as part of the Congregation of the Immaculate Heart of Mary in Taiwan.
While completing the end of his second term as a provincial superior, the call for missionaries to Mongolia went out.
"I said, 'I am also available –let the Spirit blow where it wills'," he said.
During his first years in Mongolia, Bishop Padilla worked to understand the needs of the people, which led to the establishment of initiatives to help the less fortunate.
These included a care centre for children who were homeless, schools, medical clinics, libraries plus vocational skills and income generation training centres.
The services and programs cater especially for those who are poor or who have little in the way of food, clothing or family.
He said there had been a phenomenal growth in Mongolia from nothing.
"It's all the work of God. I know he was already there – we just had to hook up where he was working," he said.
The opportunity for the Church to become established in Mongolia came after the country was liberated from Communist China and Communist Russia, in 1989.
The now-independent nation sought to establish diplomatic relations with, among others, the Holy See.
Although Bishop Padilla was elevated from apostolic prefect to bishop in 2003, he still presides over Ulaanbaatar as an Apostolic Prefecture.
It has not yet reached the requirements to be declared a diocese.
Pope John Paul II was originally scheduled to perform Bishop Padilla's episcopal ordination, but was unable to due to his declining health.
However, Bishop Padilla was honoured to have met Blessed John Paul II for two ad limina visits.
Ironically, it was a question mark over his credentials as a bishop that prompted some of the biggest laughs during his homily at St Peter's.
He recounted a time when he was in Germany and a young girl doubted whether he was a real bishop because he did not have the official mitre.
"I had to borrow a cardboard one, that was stored in the attic of the parish where I was celebrating Mass – it has been part of a play about St Nicholas," Bishop Padilla said.
As well as celebrating Mass at St Peter's, where he proved to be a big hit with Filipino members of the congregations, the bishop also met with supporters of Catholic Mission and joined with St Stephen's Cathedral dean Fr David Pascoe, in celebrating noon Mass in the cathedral.
Endorsing the Catholic Mission appeal, for World Mission Month, Bishop Padilla said the focus on the Church's missionary work in Mongolia was "humbling".
"I really thank the people who sustain the mission," he said. "I consider them as partners of the mission, either by donations or prayers.
"They are journeyers with us."
David McGovern is Brisbane archdiocese's Catholic Mission director.
Country Profile – Mongolia: Abortion
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T-ARA-Davichi Heat up Mongolia with 20,000 Fans
GROUPS T-ARA, DAVICHI AND SPEED SUCCESSFULLY FINISHED THEIR MONGOLIA CONCERT.
September 23 (KpopStarz) Groups T-ARA, Davichi and SPEED successfully finished their Mongolia concert.
On September 21, these groups performed at the Ulaanbaatar Central Naadam Stadium in front of 20,000 fans and had an amazing time.
In the pictures that were revealed from the concert, it proved that indeed the whole stadium was filled with fans.
T-ARA performed their hit songs, "Bo Peep Bo Peep", "Roly Poly", "Lovey Dovey" and more while Davichi performed, "Turtle" and SPEED performed "It's Over" and more.
For the guest performance, The Seeya was seen on stage as well.
This was their first time performing in Mongolia and was greeted by fans starting from their arrival at the airport.
On the other hand, T-ARA will be going to Japan to perform their last concert as part of their Japan tour on September 24. They will be making a comeback in Korea on October 10.
Davichi and SPEED will be making a comeback later this year.
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