Tuesday, September 10, 2013

[OT board to reconvene this week, ₮ tops 1700 mark, Tony Blair concludes UB advisory tour and MIAT plane on Hajj secondment]

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Overseas Market

TRQ closed +0.39% in NY to $5.21

Director of Erdenes OT Da.Ganbold: Will find a neutral solution

September 9 (Business-Mongolia) This is a translation from National Post newspaper appeared on 6th of September, 2013.

We talked briefly with the Executive Director of Erdenes OT LLC Da.Ganbold.

Are the sides finding a common language to clear the current debacle and continue the underground development of OT project?

It hasn't been a while since I was appointed. I will work for solving the prolonged issues. I am getting familiar with the hundreds of pages of documents. Both sides have suffered in a great deal because of not being able to get out of the loggerheads. If we continue like this, both sides will have to pay severely. Therefore, we will try to find a neutral solution as much as possible. Any dispute have their own side of stories, and it is not a 100% fault of a single party. If something was miscalculated and forced upon to the other side, a certain compromise will be a rightful decision or we will still be losing time. Thus, no one will win. Both sides will have to suffer. Therefore, the issues will be solved by means of a neutral solution.

The new board members of OT LLC have been appointed. You are also included in the board. Both PM and Mining Minister clearly stated that they aren't necessarily have to be involved in the financing of the underground development and the it can be solved at the board level. What is the position of the board?

This is not an issue of the board. There are issues that have to solved both on board and shareholders level. The levels have different array and range of issues to solve. Just like the SGK, cabinet and Court Decision Enforcement Agency have different roles and duties. There are daily issues that board and the management make decisions. Thus, I will be concentrating on solving issues that is included in my decision making power.

When will the board convene?

The regular board meeting is due next week (this week, and according to's research it's on 11th of September)

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Oyu Tolgoi board meeting to held this week - reports

September 9 ( Erdenes Oyu Tolgoi LLC has replaced the three board members that represent the Mongolian government; former President of Mongolia, N.Bagabandi, the head of the President`s Office, P.Tsagaan, and Ch.Ganbold. The newly appointed Board Members are G.Temuulen, Deputy Director of the parent company Erdenes MGL LLC, D.Ganbold, the Executive Director of the project partner Erdenes Oyu Tolgoi LLC and Chuluuntseren Otgochuluu, the Director-General of the Ministry of Mining's Department of Strategic Policy and Planning. 

Local reports say that the Oyu Tolgoi Directors` Board will have a meeting this week with the new members. Reports have also said that the newly appointed board members will head to England in order to meet Rio Tinto representatives. 

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KRI +10.53% to C$0.21 before announcement

Khan Announces Private Placement of Shares

TORONTO, ONTARIO--(Marketwired - Sept. 9, 2013) - Khan Resources Inc. (CNSX:KRI) ("Khan" or the "Company") is pleased to announce that it intends to raise up to $1,190,000 in a non-brokered private placement by issuing 7,000,000 common shares of the Company at a price of $0.17 per common share. A number of existing shareholders of the Company will participate in the offering.

The offering is expected to close in September 2013 and any securities to be issued will be subject to a hold period of 4 months.

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.

Link to release


CG -0.46% to C$6.47 before announcement

Centerra Agrees to Discuss Kumtor Stake Swap With Kyrgyzstan

September 9 (Bloomberg) Centerra Gold Inc. (CG), the Canadian operator of the Kumtor pit in Kyrgyzstan, agreed to discuss a proposal that would give the country a 50 percent stake in the mine, the company's largest operation.

The parties made a non-binding agreement that would involve state-controlled Kyrgyzaltyn JSC exchanging its 33 percent stake in the company for the mine stake, Toronto-based Centerra said yesterday in a statement. Centerra would remain the operator and manager of the mine, it said.

Centerra has been negotiating with the government to address concerns raised in a report by a state commission regarding taxes and ownership issues around the project. The Kumtor mine, one of the largest in Central Asia, is one of two producing mines owned by Centerra with output estimated to almost double this year to as much as 600,000 ounces, according to the company's website.

The proposed transaction would result in all Kyrgyz state agency environmental claims being resolved, Centerra said. The board of the joint venture company would be composed of an equal number of Centerra and Kyrgyzaltyn representatives and major decisions would be subject to discussion and approval by the board.

Centerra and then-majority shareholder Cameco Corp. (CCO) agreed in 2009 to give the Kyrgyz government an increased share in Centerra as part of a settlement to end legal disputes threatening Kumtor. The agreement resolved back-tax obligations, set a new tax rate and settled a clash over the size of the project's exploration and development concessions, Centerra said at the time.

Link to article

Link to CG release

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Local Market

Montsame MSE News: Top 20 +1.04%, Turnover 17 Million

Ulaanbaatar, September 9 /MONTSAME/ At the Stock Exchange trades held Monday, a total of 23 thousand and 655 shares of 40 JSCs were traded costing MNT 17 million 797 thousand and 078.00.

Rates of shares of 23 companies increased, of six decreased and share price of 11 were stable.

The total market capitalization was set at MNT one trillion 371 billion 960 million 519 thousand and 915. The Index of Top-20 JSCs was 13,927.24, increasing by 143.42 per cent (Mogi: points) against the previous day.

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MSE Weekly Review: Top 20 +0.9%, Turnover 257.8 Million

Ulaanbaatar, September 8 /MONTSAME/ Five stock trades were held at Mongolia's Stock Exchange on September 2-6, 2013.

In overall, 183 thousand and 691 shares were sold of 44 joint-stock companies totaling MNT 257 million 810 thousand and 490.00.

"Remikon" /73 thousand and 750 units/, "BDSec" /59 thousand and 754 units/ and "Hermes center" /21 thousand units/ were the most actively traded in terms of trading volume, in terms of trading value--"BDSec" (MNT 179 million 271 thousand and 300.00), "Tavantolgoi" (MNT 14 million 659 thousand and 551.00) and "Suu" (MNT 14 million 360 thousand and 050.00).

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NatSec: Commissions Reduction

September 9 -- National Securities is proud to announce a reduction in fees for clients. The new indicative fee structure, inclusive of all governmental, markets & broker charges, are as follows:  

            Foreign Individuals Clients*:                            <2.0%

Foreign Institutional Clients*:                          <1.5%

Domestic Individuals Clients *:                        <3%

Domestic Active Individuals Clients *:             <2%

Domestic Institutional Clients *:                      <2%

* The new indicative fee structure, inclusive of all governmental, markets and broker charges. For high volume individual and institutional clients, we can offer a lower fee structure. This can be decided after discussing your servicing needs, which can be done with our sales and management staff.

We intend to pass on future decreases in the charges from the Stock Exchange (MSE), Regulator (FRC) and Stock Clearing House (SCH) as they occur over the near to mid-term future.

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Bank of Mongolia Official Exchange Rates: September 9 Close


Sept. 9

Sept. 6
















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Total outstanding 1-week bills fall slightly by 3.5 billion to 903.1 billion

BoM issues 1-week bills

September 6 (Bank of Mongolia) BoM issues 1 week bills worth MNT 151.5 billion at a weighted interest rate of 10.5 percent per annum /For previous auctions click here/

Link to release


FDI $15 billion

Mongolia: International Investment Positions – 2nd Quarter, 2013

September 9 (Bank of Mongolia) --

Link to release



September 6 (InfoMongolia) The National Renewable Energy Forum was organized at Tuushin Hotel (Mogi: reopened as a Best Western hotel), Ulaanbaatar on September 05, with the attendance of representatives of scholars and organizations with special permits to operate in the renewable energy sector in Mongolia.

The participants discussed the long term and short term plans for the development of renewable energy and exchanged views on how to overcome the issues they are facing.

During the event, Minister of Energy M.Sonompil met with the delegation led by Director of Country Support and Partnerships of the International Renewable Energy Agency (IRENA), Ms. Gauri Singh, who are participating with the Ministry of Energy of Mongolia in the discussion "Readiness of the renewable energy of Mongolia".

Also, Ms. Gauri Singh noted, "I am grateful Mongolia is focusing to develop renewable energy. I have traveled to over 50 countries and Mongolia is the first country where this issue is considered at such a high government level. It's no wonder our Director General specifically entrusted me to pay special attention to Mongolia. The Government of Mongolia aspires to develop renewable energy. The foundation and ecosystem to develop renewable energy have been established. This can be proven by the fact the large amount of resources of renewable energy, transmission network, and the legal environment have been established, the structure of supporting organization is ready, and the attraction of investors' attention", and advised to cooperate with countries such as Norway, with similar weather conditions and developed renewable energy production.

Minister M.Sonompil gave a briefing about the actions taken by the Government of Mongolia to develop renewable energy productions and expressed Mongolia's interest to contintue cooperation with IRENA.

At the end of the meeting, Ms. Gauri Singh invited the Minister of Energy of Mongolia to participate in the fourth General Assembly meeting of IRENA to be organized on January 18-19, 2014.

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Review of "Mongolia's State Policy on the Minerals Sector (2013-2024)"

By Byambajav D., Postdoctoral Research Fellow at CSRM, University of Queensland

September 2 (Mongolia Focus) "State Policy on the Minerals Sector (2013-2024)," a document defining the policy framework for the Mongolian minerals sector in the next decade is expected to be discussed at the upcoming autumn session of the State Great Khural. President Elbegdorj decided earlier this year that Mongolia needs a comprehensive policy framework that would define the country's priorities and strategies in the minerals sector before discussing a new Minerals Law. The decision was a result of the discussion on the proposed law held at the Citizen's Hall in February 2013. Mining Minister Gankhuyag introduced a draft of the document to parliament in July 2013. At present, a working group that is preparing the document for parliamentary discussion is receiving comments from interested Parties. The following is a short review of the policy document.

The document has four main sections: rationale, key principles, policy priorities and implementation. In brief, the rationale is defined as developing a mutually beneficial, transparent and responsible mining and mineral processing industry that supports Mongolia's sustainable economic growth.

The main principles in developing the Mongolian minerals sector are defined as:

§  open and responsible government;

§  rule of law and transparent corporate governance;

§  non-discrimination of investors;

§  open access to geology and geo-science information;

§  better operational and health safety regulations;

§  research and stakeholder consultation based decision-making;

The document defines the main priorities of different phases or segments of the mining industry: legal and policy framework, geological research and geo-science information, mineral extraction, mineral processing, environmental protection and rehabilitation, and mineral resources management.

In the legal and policy framework section two priorities are particularly notable:

§  Supporting artisanal and small-scale miners' efforts to work legally under cooperative work arrangements;

§  Supporting Extractive Industries Transparency Initiative (EITI) and Responsible Mining Initiative, and improving regulations on social, economic and environmental assessment.

According to the document, developing a national system of comprehensive and up-do-date geological and geo-scientific information and resources that is capable to provide the opportunity to systematically assess and increase Mongolia's mineral reserve is a top priority. Private sector-led geological surveys and investment will be encouraged along with government-funded geological surveys and exploration.

As for the extractive sector, the following priorities can be highlighted among others:

§  Incorporation of radioactive elements (U, Th), rare earth elements, underground water, and some large deposits of gold, coal, iron and copper that have the potential to compete in the global and regional markets into the Strategically Important Deposits (Mogi: must be minerals not deposits) and government involvement in exploration, extraction and processing of such deposits;

§  Supporting companies that use technologies not harmful to the environment and human health, operate in accordance with the principles of transparent and responsible mining, and pay a significant amount of tax to national and local governments;

§  Development of large-scale mineral deposits by creating investor-friendly regulations and infrastructures.

Regarding mineral processing, government will promote mineral processing through tax and fiscal policies and directly supporting enterprises producing value-added products such copper cathode, ironwork, uranium concentrate powder, distilled gold and rare earth concentrations. Projects on coal enriching, coking and chemical plants, power plants at coking coal deposits, Eco-fuel from brown coal, liquefied fuel from coal and shale, and gaseous fuel from coal are also defined as key priorities.

Regarding environmental protection and rehabilitation, among other priorities, Mongolia will change standards for mine development, rehabilitation and closure, and will create mechanisms for engaging local community representatives in mine closure control and monitoring activities.

On the mineral resources management, a number of specific priorities were stated:

§  Selecting managers of state-owned and state-shared mining companies with the involvement of professional associations and civil society;

§  Supporting domestic businesses in the supply chains and procurement of large-scale projects;

§  Establishing "Wealth Fund" as a fiscal stabilization fund and a sovereign wealth fund;

§  Establishing the Mongolian Minerals Exchange;

§  Promoting civil society monitoring;

§  Establishing a national geological agency;

§  Increasing national human resource for the minerals sector;

§  Creating a unified registration directory of entrepreneurs in the mineral sector.

The policy document explains the structure and institutions for its implementation along with potential risks. It mentions the following national programs to be developed as part of policy implementation: "Geological Mapping," "Coal," "Iron," "Fluorspar," Rare Earth Elements," "Copper," "Construction Minerals" and "Legal Framework for the Minerals Sector."

The document defines the following as the policy outcomes which can be interpreted as a broad projection of the development of the minerals sector:

§  Geological survey and exploration will be conducted in accordance with the policy priorities, increasing the country's mineral reserves;

§  Mineral reserves will be extracted in a complex and environment-friendly ways

§  The amount and types of value-added, internationally competitive mineral products will be increased;

§  Mineral revenue will be invested in the non-minerals sectors, minimizing Mongolia's dependence on the minerals sector;

§  Occupational and technological accidents will be decreased;

§  Opportunities for infrastructure development (road networks, power plants, city, and settlements) will be expanded, allowing long-term development planning;

§  As a result of the development of large-scale industrial centres, population migration will be stabilized;

§  An adequate number of professional personnel of the minerals sector will be prepared;

§  Environmental protection, land rehabilitation and long-term monitoring will be implemented in a responsible and planned way;

§  Mineral extraction and processing will be restricted in water catchment areas, river basins, forest zones, agricultural lands, highly nutritious pastures, Gobi oases, and areas near lakes and ponds;

§  A legal framework for ensuring transparency in the mineral sector, and public consultation in developing laws, regulations and large-scale projects will be developed;

§  Minerals will be traded at the Mongolian Minerals Exchange.

In sum, the document provides a broader understanding of the key priorities of the Mongolian minerals sector. It also clarifies some specific priority areas of mineral development and strategies aimed at consolidating and reforming existing policies and regulations. There are, however, several important issues that are not adequately addressed in the document such as ensuring policy stability, clarifying deposits or minerals of strategic importance and the role of government, understanding the cumulative environmental and social impact of mines on mining zones, developing measures to prevent land use or water-related conflicts between formal and informal mining, promoting non-judicial grievance mechanisms in the minerals sector, and requiring the social and economic empowerment of local communities affected by mining. Especially, the document does not mention about prior consultation with and consent from local communities in the area of mineral exploration and extraction, and agreements and formal negotiations with local communities and their representatives. A clear commitment on ensuring community consultation and broad support for any exploration and mining projects needs to be included in the document.

Link to article



Ulaanbaatar, September 5 /MONTSAME/ The Minister of Mining D.Gankhuyag made the opening remarks at the 11th "Discover Mongolia-2013" international Mining Investors Forum kicked off Thursday in Ulaanbaatar.

The Minister said the mining sector is still playing a vital role in Mongolia's economy, "accounting for 20 percent of the Gross Domestic Product (GDP), 40% of the budget income, 85% of investments and about 90% of export income, and inferred from these figures that a sustainable growth of the country's economics will be dependent on the mining sector for the years to come. 

For this reason, a led by N.Altankhuyag government for reforms is undertaking many works and programmes on creating stable and competitive conditions in the mining business and investments environments. For example, parliament has adopted laws on exempting from customs and value-added taxes all technologies, facilities and construction materials that are used for processing oil, producing fuels from coal and schist; and a draft new wording of the law on oil and a draft state policy on minerals until 2024 await discussions at parliament.

Mr Gankhuyag admitted that our mining sector is facing some difficulties. "Prices of main export products such as iron ore, copper and coal decreased by 13-40 percent at the international market in the last half of this year, investments in the Mongolian mining sector went down by some 30 percent against the previous year," he noted.

In this situation our government aims to increase a procession level of mineral products, to introduce to this sphere the latest and progressive hi tech, innovation and management, and to solve logistics and transit-transportation issues by the most appropriate methods, the Minister emphasized.

Mr Gankhuyag noted that "Gold", "Spar", "Copper", "Iron" and "Coal" programmes are being worked out within the state policy on mineral sector, and told the gathered to actively take part in these programmes.

Mr Gankhuyag expressed a confidence that the wind of investments will turn to Mongolia again.  

Link to article


Tony Blair visits Mongolia

September 9 ( The former Prime Minister of the United Kingdom, Tony Blair, visited Mongolia on the invitation of the Government of Mongolia on September 7th and 8th. 

Mr Blair arrived in Mongolia to see the year long contract projects with the Mongolian Government. The Former Prime Minister's Foundation signed on five projects to advise the Mongolian Government on education, health, employment and legal assistance regarding foreign investment

During his visit Mr Blair met the head of the caucus of the Mongolian People's Party (MPP) in Parliament N.Enkhbold except government members. 

The Tony Blair Foundation suggested to form a cooperation with the former government lead by former the Prime Minister of Mongolia, S.Batbold, so three of his teammates are working in Mongolia. 

He has signed a contract to advise Central Asian country's leaders on 'good governance' through his Government Advisory Practice.

Mr Blair has formed a deal to advise the Vietnamese government. He has held talks with the leaders of Hong Kong and Thailand in recent months, raising the prospect that he could land further business in the Far East by the end of the year.

Mr Blair has also won a contract to advise the Peruvian government on public sector reform. He has advised governments including Kazakhstan, Kuwait and Colombia.

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September 9 (InfoMongolia) The First Congress of Mongolian Lawyers was held at the Government House on September 06-08, 2013. Out of the 4,500 lawyers that were registered in the first congress's renewed registry for their lawyers' permit, 490 were selected to present as representatives.

Whereas, 98 of the representatives were prosecutors, 196 were lawyers, 98 were judges, and 98 were other officials. The participants established their Association by adopting the Rule of the Lawyers' Association.

After which, the President of the Lawyers' Association was elected. A secret ballot was held to vote for the 7 candidates that had submitted their documents for the Presidential election. As the results of the secret ballot, there was not a candidate to win 50+1 or majority of the vote, hence a second vote was held between the 2 candidates with the most votes, who were Director of the Policy Implementation Management Department of the Ministry of Justice, O.Altangerel, and President of the Union of Mongolian Lawyers D.Batsukh.

With the majority vote of 51.05%, D.Batsukh won the election and was appointed as the first President of the Lawyers' Association of Mongolia. He will keep the post for 2 years.

Also during the congress, voting was held to set the amount of membership fee and it was set to 20,000 MNT (Tugrug) per month. The decision was made to set the President's salary as 2 million MNT, which is equal to a judge's monthly salary.

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EBRD diversifies in Mongolia

September 9 (GTR) The European Bank for Reconstruction and Development is to focus its Mongolian investment on the non-natural resource sector.

The announcement comes as part of the development bank's renewed Mongolian strategy which will hold until 2016 and signals a desire to ensure the rest of the economy isn't left in the dust of the freewheeling resource and mining sectors.

It was announced last month that Mongolia's Q2 2013 growth was 14.3%, almost double the figure reported in Q1. Most of this growth stems from the foreign investment in facilities such as the Oyu Tolgoi copper mine – the largest financial undertaking in Mongolian history, which is expected to account for 30% of national GDP by the time it's fully operational. The first shipments of copper concentrate left the mine in June.

But the head of the EBRD's Ulaanbaatar office Matthieu Le Blan tells GTR that his team has made a conscious decision to diversify its investment to attempt to maintain some level of balance in Mongolia's economy. However, he makes clear that the growths of the mining and non-mining sectors aren't mutually exclusive. Indeed, it will be impossible to have one without the other.

"The business sector in Mongolia has grown rapidly over the last five years," he explains. "The EBRD has been able to invest in more than 25 companies in Mongolia since 2006. Mongolia has dozens of large diversified groups that are interesting targets for investors, in particular at a time when valuations are reasonable. The economy has been growing very quickly, GDP per capita in US dollar terms more than doubled over the last three years and growth is expected to remain in high, provided the Oyu Tolgoi project remains on track. This creates exciting growth and investment opportunities."

At the heart of the EBRD's strategy is the support of Mongolian SMEs, which it hopes to do through forging partnerships with local banks and financial institutions. Earlier in September, it made its first loan to a microfinance company – a US$1mn credit line to Trans Capital, provided in Mongolian tugrug. 

Also this month, it announced a partnership with the Bank of Mongolia, designed to increase local-currency lending and issued a loan of US$25mn to Khan Bank – one of Mongolia's largest commercial banks – to lend to small businesses in the agriculture and manufacturing sectors. 

Speaking of the EBRD's support of Mongolia's banking sector, Le Blan says: "The banking sector in Mongolia is not fully developed and requires more capital, better corporate governance and strong supervision. That said, local commercial banks finance a much diversified portfolio, and non-mining sector is well represented. Given depressed commodity prices, banks are looking at agriculture, manufacturing projects more and more."

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September 6 (InfoMongolia) According to the interview given by Deputy Director of MIAT Company S.Khurelbaatar to local newspaper "Unuudur", MIAT Mongolian Airlines JSC is renting its Boeing 767-300 plane to the national flag carrier of Bangladesh, Biman Bangladesh Airlines and over 50 staff are leaving for Bangladesh today on September 06, 2013.

-       Mongolia has been renting planes to date, but never rented to other part. What made you come to this decision?

-       We've never rented to other companies to date. We've discussed the matter for over 3 months and have received all authorization from the Civil Aviation Authority. The Boeing 767-300 is under lease from Air Lease Corporation on a 3 year contract.

We've received permission from our leaseholder, the State Property Committee, and from the Ministry. The Civil Aviation Authority of Bangladesh visited here for inspection. This plane will serve to Saudi Arabia and the United Arab Emirates. Those countries have also given permission.

-       Why have you decided to rent the plane to Bangladesh?

-       We received this permit after high competition. 86% of Bangladesh people are of Islam religion. The journey to the Holy City of Mecca in Saudi Arabia is called Hajj. Hundreds of thousands of Muslims travel to Hajj from Bangladesh at this period of year.

Therefore, they are facing lack of planes and have no choice but to rent from other companies. They are including their own Boeing 777 plane with 300 passenger seats in that journey and are hiring our plane to include in their regular flight schedule.

Our staff will carry out daily flights from September 07 to October 06 and from October 19 to December 06 respectively, after which we will return to Mongolia.

-       Will the pilots and flight attendants go along as well?

-       Yes. However, one Bangladesh attendant would join the team during each flight, because security announcements must be performed in their own language. About 30 flight attendants, 9 pilots, 8 engineers and 2 officials from the MIAT Department of Control Management will depart. The pilots may be exchanged during the term, since it's a country with a hot climate and there are many night flights scheduled.

-       If it is not a secret, how much are you renting the plane for?

-       Unfortunately, that's confidential information. But the profit is over a billion MNT. We are not doing anything that is unprofitable.

The expenses for food, accommodation, flight expenses, and equipment deterioration expenses of around 50 people for 90 days will not be low. Two teams will be set in Saudi Arabia and the United Arab Emirates. There are also talks to rent the plane to New Zealand after, that's why this travel is very important to us.

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Mogi: tell me where you realized who his "Mongolia" connection was

From Goats to Grains: An Interview with Golia Vodka's David Solomon

Mongolian vodka? You heard it here first

September 4 (The Drink Nation) A businessman who owns a 20-store Toys "R" Us franchise and invented a DVD vending machine doesn't necessarily seem like the guy to bring about the next big thing in vodka. However, that's who you'll find behind Golia, a new, six-times filtered spirit distilled from Mongolian wheat and made with water from the Khuiten Peak.

Golia is currently available in New Jersey and Pennsylvania, but the company is looking to expand distribution throughout the U.S. We caught up with Redbox founder and Golia principal David Solomon to find out how he got into the liquor biz and what makes Mongolian vodka so special.

The Drink Nation: How did you get introduced to vodka all the way from Mongolia?

David Solomon: It starts like this — my good friend was working in Hong Kong as a trader, and he decided to take a junket to Mongolia. He went up on a tour and fell in love with his tour guide, who happened to be the Mongolian government administrator's daughter. They got married, and like 12 years and two kids later, he ends up owning half the country.

The Drink Nation: Wow.

DS: So, he's an American in Mongolia married to a Mongolian. He's got a cement factory, mining lands, the largest real-estate brokerage company in Mongolia (Mogi: Ok, this is where I realized for certaiin it was APIP's Lee Cashell, J), apartments, one of the largest securities trading firms on the Mongolian stock exchange — he's leading a nice life. I went to visit him, and my background is a lot of retail and consumer products...

The Drink Nation: You started Redbox, didn't you?

DS: Yeah, it's this DVD vending company that I sold. So, anyways, I'm visiting him and he's saying, "Help me bring some brands here, let's bring Toys 'R' Us here, can you help me bring Starbucks or Redbox here?" And I'm thinking, OK, in Mongolia what you've got is 3 million people and 20 million goats — and the goats don't buy a lot of toys, drink a lot of coffee, or rent a lot of movies, you know? At the time we were drinking this vodka, so I said, "I've got a much better idea. This is the greatest vodka I've ever had, so let's take this vodka to the rest of the world." That's kinda how it got started.

The Drink Nation: When we think vodka, we think Russia, or maybe Poland. Does Mongolia have a long vodka tradition?

DS: Oh, it puts those guys to shame. The average Mongolian drinks 10 times more vodka than the average European. Three million Mongolians consume as much vodka as 30 million Europeans. Mongolians know vodka, that much I can tell you.

The Drink Nation: Impressive. How do Mongolians normally take their vodka?

DS: They drink it however they can get it. They'll drink it like water. That you can drink Golia straight, and enjoy it as a spirit, is one of our strong suits, I think. Because, you know, you've got a lot of vodka out there on the market.

You've got whipped cream, cake, cotton candy, birthday sprinkles. Those flavorings are just covering up a lot of bad vodka. This, you can drink neat or on the rocks, and I think it's better than way. Still, because it is so smooth you can put it in any kind of cocktail.

The Drink Nation: Do you feel vodka has moved to the back in the past few years in favor of other spirits?

DS: No, I haven't seen that at all — in fact, the opposite. Vodka is probably growing the most — as far as shelf space — in any liquor store you'll find anywhere. I think 40 percent plus of all spirit sales are vodka now. Maybe now it's only growing 25 percent a year versus 40 percent like it was a decade ago, but it's still leaps and bounds ahead of any other spirit. You could add up numbers two, three, and four in the U.S. and they wouldn't even equal vodka. But, as we discussed, there's a lot of crummy vodka there. That's not us.

The Drink Nation: You have your own well for water, and your own wheat source?

DS: Our water is coming from a source where you can see lake fish from 50 feet below the surface — it's just amazing water. You immediately taste it when you taste our vodka. And the wheat as well — we use a winter wheat. No fertilizer, and no chemical treatments. It's grown organically in northern Mongolia. From Kazakhstan to Siberia, this is the most prized wheat in northern Asia.

The Drink Nation: What makes the wheat so good?

DS: The soil in Mongolia has more minerals per square inch than any country on the planet, and it just grows this great wheat. Plus, the farmers have this ancient, no-till farming tradition for cultivating it and farming it.

The Drink Nation: So once you have the water and the wheat, what's the next step in making Golia?

DS: We distill each batch at least six times through silver and platinum filters. That removes any impurities. In fact, because of that, if you're on a gluten-free regimen, you can still drink our vodka without a problem. 

The Drink Nation: Sounds awesome. Can't wait to try it.

Link to article



      Optimized turnkey platform enables service providers to deploy new services and applications with a feature-rich user experience and fast time-to-market

      End-to-end solution will power Sansar HD cable service and the DDishTV satellite service in Mongolia

      Components include NAGRA MediaAccess content protection, OpenTV middleware and NAGRA Gravity user interface technologies pre-integrated in a SmarDTV set-top box

CHESEAUX, Switzerland - September 9, 2013 - NAGRA, the Kudelski Group (SIX:KUD.S) digital TV business and the world's leading independent provider of content protection and multiscreen television solutions, announced the availability of a new turnkey platform for pay-TV service providers enabling quick deployment of new services with an engaging user experience.

The solution will make its debut in Asia with two service providers in Mongolia. Cable operator Sansar HD and satellite provider DDishTV will launch the fully pre-integrated solution this month giving subscribers secure access to premium entertainment as well as to a variety of advanced and interactive services.

"NAGRA's pre-integrated solution gives us the opportunity to securely monetize our content investments while offering the best user experience on the market," said Zorigt Ulaankhuu, CEO for Sansar HD LLC. "NAGRA has a strong reputation for offering robust technologies in the areas of content protection and advanced services and deeply understands our market needs - it was the right choice for both our cable and satellite services because it allowed us to deploy a best-of-class solution to our subscribers, and in record time."

"These two projects nicely illustrate the benefits of pre-integration allowing to deploy advanced technology with a very aggressive time to market and very cost effectively for our customers," said Jean-Luc Jezouin, SVP Sales & Operations Asia, NAGRA. "Our pre-integrated solution was the perfect fit, providing the quality, flexibility and efficiency that were required, while leveraging the technologies and expertise of Kudelski Group companies that have a proven track record of deploying powerful and advanced solutions for digital television with the protection of premium content along with a compelling user experience."

The NAGRA turnkey solution is a feature-rich broadcast platform designed to be brought to market in less than three months while still providing service operators the ability to customize the solution to their own requirements. Components include NAGRA MediaAccess content protection, the world's most widely deployed OpenTV middleware, and NAGRA Gravity nX2 user interface, all pre-integrated in a set-top box provided by SmarDTV. SmarDTV's set-top box is designed to provide a high quality user experience while optimizing a service provider's hardware investment. A PVR-ready device, it features a built-in USB port allowing operators to quickly and cost-effectively upgrade users to PVR functionality.

Sansar HD is the largest cable TV operator in Mongolia. DDishTV is a satellite and internet provider with the mission of serving rural areas of Mongolia. Both service providers are owned by GEM International.

The NAGRA turnkey solution will be demonstrated at stand 1.C81 at the 2013 IBC show in Amsterdam from September 13-17, 2013.

About Sansar HD LLC and DDishTV LLC.

Sansar HD was founded in 2009 with the objective to bring the first digital TV platform in Mongolia delivering the latest TV experience features and quality content from worldwide content providers such as HBO™, Discovery™, History™ and many more. Sansar HD is also an exclusive licensee of English Premier League for seasons 2013 - 2016.

Ddish objective is to bring media and communication innovations to nomads of Mongolia. It is the very first DTH platform to deliver quality of foreign content into rural area. As of today, DDish is available across Mongolia, and number of subscribers exceeds 250,000.


NAGRA, the digital TV division of the Kudelski Group (SIX:KUD.S), provides security and multiscreen user experience solutions for the monetization of digital media. The company offers content providers and DTV operators worldwide with secure, open, integrated platforms and applications over broadcast, broadband and mobile platforms, enabling compelling and personalized viewing experiences. for more information and follow us on Twitter at @nagrakudelski.

About SmarDTV

SmarDTV, a Kudelski Group company, is an international leader in pay television technology. SmarDTV designs and manufactures a large range of set-top box solutions and CI / CI Plus plug-in modules which enable access to premium digital pay-TV whether delivered through broadcast or broadband IP. A founding member of CI Plus Forum, SmarDTV is headquartered in Switzerland with development and sales offices in France, Germany, USA, China, and Singapore. for more information.

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Masa Igata: Top 10 Things Investors Should Watch In Mongolia Now

By Masa Igata, chief executive at Frontier Securities 

September 3 (Mongolian Economy) After the short summer in August, Mongolia is ready to go back to usual. 

Parliament will reopen, Ministries' staff will come back to work, schools will restart, etc. At the same time, many important subjects that have been pending during summer will be discussed at the Cabinet, Parliament and between business communities in the near future.

Below are the "Top 10 Most Important Things Investors Should Watch in Mongolia for the remainder of the year" which have been selected by Frontier's Research team. These 10 items will be explained in UB Post over the next two weeks. 

1.    Progress of the dialogue between RIO and OT regarding the project finance

2.    Can TT deliver 7.5mil Tons of Coal this year as promised? Will be the dispute of TT with Chalco over soon?  Can Mongolian Coal become profitable again?

3.    Will the new "Investment Law" and the "Investment Fund law" pass the diet? Are these laws really friendly to Investors?

4.    Will Mongolian Banking system and Government take measures to restore credibility from investors?

5.    Economy: What will be the initiatives to stop the weak trend of FDI and trade figures?  The implications of weaker Currency and the measures to stop the trend

6.    Implications of Prime Minister's Visit to Japan

7.    Progress of the Infrastructure projects. Roads are underway. What's next?

8.    Strong Real Estate Market backed by 8% Mortgage. How long will it last?

9.    Tax reform and its implications

10.  Green Mongolia

Progress of the dialogue between RIO and OT regarding the project finance 

As we have reported on several occasions, the progress of the dialogue between RIO and OT regarding the development of Underground Mines through project financing continues to be the biggest concern for investors. Primarily because the size of the project is huge (4-6 billion USD) and secondly, the impacts of the project to supporting industries are also huge. A news agency reported that about 300 sub-contractors may lose their jobs because of the delay of the project. However, since the appointment of Mr. Da. Ganbold as a new head of EOT and the departure of Carmen McRae as CEO of OT (Mogi: hehe, he hasn't let just yet), optimistic opinions regarding the progress of the discussion are prevailing in the market. Thus, the share price of TRQ has rebounded 40% from its low on July 31 as of August 24.

We have not confirmed yet if the optimism is based on real progress or not. But, as we are in human communities and any personnel changes could impact to the relationship to the counterparty. Also, given that Government seems to be much more worried about the current currency movement and weaker economy than before, it is natural to think that the negotiations would move on faster than expected. As per insider sources, both parties have already identified issues to be discussed.  

Previously, we have been more pessimistic about the short term resolution of the discussion between two parties. However, we now believe that a quicker resolution between two parties may be possible. But, given the difficulties of adjusting interests of all stake holders, our main scenario remains that the two parties will resolve their differences in 3-6months. The share price of TRQ and other Mongolian related shares including MMC and South Gobi will go up and down on rumours. But, as soon as the likelihood of resolution will be convinced by investors, the stock market will welcome the move and may move higher. 

Can TT deliver 7.5mil Tons of Coal this year as promised? Will the dispute of TT with Chalco get over soon? Can Mongolian Coal become profitable again? 

At Coal Trans Mongolia Conference in June, Mr. Battsuuri (Mogi: Batsuuri), CEO of Erdenes Tavan Tolgoi has mentioned that the overall production of ETT this year will quickly recover to 7.5mil tons from 2.5mil tons of production last year even with the slowdown of the Chinese economy and stagnant coal price. He has mentioned that out of the 7.5mil tons of productions, East will produce 5 mil Tons and West will produce 2.5mil tons. He has also mentioned that the 300+mil USD cash prepayment from Chalco which Government has taken from ETT should be back soon. We do not know yet if the progress is on track or not. Also, we do not know if their current cash flow of ETT is good enough to operate the mine as the selling price of the coal has not recovered yet. However, as Mr. Battsuuri will be speaking at 16:00 on Sep 2 at "Invest Mongolia" Conference at Chinggis Khan (CK) Hotel, we can understand the progress from him at that time. At the same conference, several experts on global commodity markets will debate the outlook of Mongolia's key commodities like coal, copper and Iron Ore. Two interesting panel discussions will be on "Outlook for Mongolia's Mineral Exports: Are the good times over" and "Resources Nationalism & its impact on Mongolia's Inbound Investments'. They will be attended by Commodity Research Unit (CRU), Qasia, ETT, PWC, Global Mining Capital, Asian Development Bank (ADB), GIZ, Societe Generale etc. And, analysis on current commodity market, Foreign Direct Investment (FDI), other commodity rich Frontier markets' recent activities and implications to Mongolia will be discussed. One of the most important questions will be whether Chinese demand to the key commodities is recovering or not.  

Will the new "Investment Law" and the "Investment Fund law" pass the diet (Mogi: State Great Khural I'm sure)? Are these laws really friendly to Investors?

Some market participants have mentioned that the new "Investment Law" and the "Investment Fund Law" are about to be submitted and likely to pass at the Parliament in the middle of September. According to a Government official, the concept of the new Investment Law will make the treatment of foreign investors equal to that of Mongolians except for foreign SOEs. This is the reversal of Strategic Entities Foreign Investment Law (SEFIL) which was enacted on May 17, 2012. This reversal would be a positive sign for foreign investors. However, we are still cautious on the outlook of FDI because recovering the deteriorated trust to Mongolian government will not be easy. Foreign communities in general will definitely welcome the law in case it will pass, but it is not certain whether actual investment will increase or not after the event. The impact of the Investment Fund Law will be focused only on capital markets. And, the size of the capital market is small. So, the impact will be limited. But, it will be very positive for MSE and local asset management industry given the law will facilitate Mongolian fund management industry to grow. Mr. Saruul Ganbaatar, deputy CEO of MSE will make speech at 9am on Sep 3 at CK Hotel regarding the implications of the new law to investors, broker-dealers and listed companies.  

Will Mongolian Banking system and Government take measures to restore credibility from investors?

The recent announcement regarding the bailout of the Saving Bank was a disappointment to foreign investors. Many are still cautious about banking system in general and the situation of some other remaining banks in Mongolia because they believe it is a system problem rather than a problem of the single bank. We have approached BOM regarding the issue and asked them to explain the situation. But, given the amount of homework that is to be done before the extraordinary session at the parliament, we are not sure if they are ready to show up in front of investors. Therefore, it will be good to listen to Graeme Knowd, Associate Managing Director, Moody's Investor Services at 10am on Sep 2 at CK Hotel. He will explain why Moody's has changed outlook for the Mongolian Banking System. He will probably address issues on banks and banking system. And, his view on the banking sector in the region will be worth listening as well to compare Mongolia with the situations of other emerging economies in the region. In addition to that, the Panel Discussion on Global Debt Markets and Mongolian Banking Industry will be stimulating for anyone interested in each topic. Those will be at 11:15 am and 11:50am respectively at CK hotel. Those will be attended by US Treasury, Moody's, Ministry of Economic Development (MOED), National University of Mongolia (NUM), Canadian Embassy, PricewaterhouseCoopers (PWC) and Financial Market Association (FMA). These active discussions will aim to identify the problems and some solutions to restore trust for investors. 

We strongly believe that the most important thing is how the system is managed. In fact, the independence of the central bank and state own enterprises is not secured in this country. So, unless it is not secured, evaluating transparency, the system of regulating and monitoring banks will not be as meaningful. 

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September 6 (InfoMongolia) President of the Republic of Turkey Abdullah Gul received the Minister of Construction and Urban Development of Mongolia Ts.Bayarsaikhan at the Tarabya Presidential Campus in Istanbul on September 05, 2013.

Minister Ts.Bayarsaikhan noted that the relations of Mongolia and Turkey are successfully developing in all sectors such as politics, economy, and society and stated the visit made by Prime Minister of Turkey Recep Tayyip Erdogan to Mongolia last spring had a major significance in further pushing the relations.

The Minister discussed matters of broadening mutual cooperation in the construction and urban development sector, cooperating with Turkey to implement the apartment projects and programs initiated by the New Government for Changes, re-planning the Ger districts, exchanging experience to spread the use of progressive technology in the construction sector, and preparing specialists. Minister Ts.Bayarsaikhan asked the President to show support on accelerating the process to build 5,000 household apartments by loan from the Government of Turkey on easy terms.

President Abdullah Gul stated his satisfaction with current growing relations between Mongolia and Turkey and expressed he would support to resolve the Minister's request. He also advised to increase foreign investments, especially Turkish investments in order to further broaden and accelerate Mongolia's innovation and development.

Minister of Construction and Urban Development Ts.Bayarsaikhan and the State Secretary of the Ministry R.Erdeneburen met with the directors of the Turk Exim Bank and discussed the matter of the 300 million USD soft loan from the Government of Turkey to build a residential area in Ulaanbaatar City.

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September 5 (InfoMongolia) The Government of Mongolia and the Ministry of Road and Transportation are implementing the road construction projects to connect six Aimag centers with Ulaanbaatar City within this year.

In the frameworks, the road between Ulaanbaatar and Bayankhongor Aimag was connected last week. This is the first aimag included in the 2013 road construction plan being directly connected to the capital city with hard surface road.

Today, September 05th, the Ministry of Road and Construction has opened the road connecting Ulaanbaatar with Sainshand, the center of Dornogovi Aimag. Earlier, Ulaanbaatar City was connected to Choir, the center of Govisumber Aimag by a paved road and the 176.4 km of road connecting Choir with Sainshand was completed on September 01 and the opening ceremony is being held today.

Authorities including the Prime Minister N.Altankhuyag and Minister of Road and Transportation A.Gansukh took part in the opening ceremony. The road construction was divided in two parts by 90 km and 86.4 km and was accomplished by two executing companies. The first 90 km of road was completed by South Korea's Halla Engineering and Construction Corp and the other part of 86.4 km by China's Jiangxi Water and Hydropower Construction Co., Ltd.

The Choir-Sainshand road was financed by Millennium Challenge Account, a 2010 agreement between the Government of Mongolia and the Government of the USA.

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Ulaanbaatar, September 8 /MONTSAME/ A regular meeting of the cabinet Friday approved directives the Mongolian delegation will adhere to at the 9th meeting of the Mongolia-North Korea  intergovernmental consultative commission.

The  meeting will take place September 22-26 in Pyongyang, DPRK, co-chaired by Kh.Battulga,  Mongolia's Minister of Industry and Agriculture and head of the Mongolian part of this commission, and by Ri Ryong Nam, the North Korea's Minister of Foreign Trade.

The two sides are expected to discuss broad issues of the bilateral cooperation.

The 65th anniversary of the diplomatic relations is to coincide with this meeting. The sides will conclude a present situation of their cooperation in the trade, economics and agricultural spheres, and will exchange views on works to be done in these sectors and in other fields.

The parties will also sign a cooperation memorandum between the Mongolian National Chamber of Commerce and Industry and the North Korea's Ministry of Foreign Trade, and a protocol of the intergovernmental meeting.  

Within the meeting, the Mongolian delegation will be received by a chairman of the Presidium of the DPRK People's Supreme Congress; will meet a Minister of Railway Affairs, the head of the Committee for Joint Investments and with other high officials. Moreover, the Mongolians will attend an opening of the Pyongyang's international autumn exhibition.  

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Mongolia & Italy in discussions to waive visa requirements for diplomatic passports

September 9 ( The Media and Public Communications Division of the Mongolian Foreign Affairs Ministry has announced that the governments of Mongolia and Italy are in discussions to revise the visa requirements for diplomatic passport holders. 

If the agreement is approved diplomatic passport holders will travel between the two countries without a visa for up to 90 days in a six month period. 

The announcement says that the Government believes it will be a significant event for Mongolia to boost mutually beneficial collaboration with Italy and the EU in the scope of Mongolia`s independent, multi-pillared, open foreign policy. 

The President of Mongolia, Ts.Elbegdorj, had talks with Italy on the issue during his visit to Italy in October 2011. 

Mongolia currently has signed agreements to give free visas for diplomatic and official passport holders with 20 countries and agreements to travel without a visa for diplomatic passport holders within Germany and the Czech Republic.

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Social, Environmental and Other


Ulaanbaatar, September 9 /MONTSAME/ Mongolia and the US Asia Foundation (AF) will collaborate in combating corruption.

A related contract was inked Monday by E.Bat-Uul, the Mayor of Ulaanbaatar city; N.Ganbold, a chairman of the Corruption Combating Agency of Mongolia (CCA), and by Meloni Lindberg, a Country Director of the Asia Foundation for Mongolia.

An action plan on combating and preventing corruption and bureaucracy was approved this year by the City's Departments of Health, Education, Property Relations and General Planning. In accordance with the contract, the AF will give these organizations professional and methodological advice on effectively implementing the plan. 

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Manchester Futsal Club seize the first TSF Mongolia crown

The well-prepared English team carried out their promise to win the championship and did so with an emphatic 6-0 mauling of Continental in the final

September 9 ( Manchester Futsal Club from England finished their Mongolian leg of Tiger Street Football with a convincing win over Continental and to win their first TSF trophy plus a US$5000 cash prize.

"We come here to win," declared Paul Thompson, a midfielder of Manchester Futsal Club, after their first group-stage match, in which they beat Continental 4-3, the second-placed team from yesterday's national tournament.

Thompson also said he would keep his "fingers crossed" and hope to talk to Goal again as a champion at the end of the day.

Training twice a week for the past four years since they started playing as a team, Manchester Futsal Club were one of the most strategically savvy team of today's tournament, conceding only seven goals in five TSF matches during the tournament while scoring 28.

After defeating Big 1 Sports 99 from Thailand 6-3 in the semi-final, Manchester faced their group-stage opponents again in the final. Continental had upset AJFS from Spain with what was a controversial penalty in the last minute of a semifinal to see them make the final with a 7-6 victory.

Under the pressure of the deafening fans in the stands and with Fabio Cannavaro watching, Manchester Futsal Club played a fantastic possession game. They didn't concede any goals in the 12-minute final and won 6-0.

"To finally claim the championship is an amazing and great feeling," Paul Thompson told Goal after the final, with a gold medal hanging on his neck.

He added: "We played [Continental] in the group stage. They have a good defence; strong and very fit. They gave us a good game in the preliminary round, so in the final, we knew what we had to do.

"We knew that if we could use our keeper to calm the situation down rather than get the crowd excited  and as long as we're in possession, then we knew we'd win the game," Thompson said.

"We came with game plan and that was to win, and obviously, we completed that."

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Genco Mongolia Bike Challenge 2013: Stage Videos and Top 3 Results

September 9 (Bikemagic) The Genco Mongolia Bike Challenge 2013 – presented by Orbea – has just been concluded and winners of the seven-stage endurance race have been crowned. Have a look at the stage-by-stage recap videos to get an idea of the vast landscapes and incredible fitness required to finish the event.

Results – top 3 male

1: Cory Wallace
2: Antonio Ortiz Barranco
3: Pau Zamora

Results – top 3 female

1: Catherine Williamson
2: Sonya Looney
3: Erin Greene

Full results and stage round ups can be found on the 2013 Genco Mongolia Bike Challenge presented by Orbea website.

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Munkhdul Badral Bontoi

Founder & CEO


Mobile: +976 9999 6779

Skype: mogibb

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