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Tuesday, October 22, 2013
TRQ closed +0.22% to $4.47 in NY on Monday, but jumped 10.4% on Friday
China Approves Rio Copper Mine Sales After Four-Month Delay
By Michael Kohn and Feiwen Rong
Oct. 22 (Bloomberg) -- Buyers of copper from Rio Tinto Group's $6.6 billion Oyu Tolgoi mine venture in Mongolia havebeen approved to collect their orders, ending a four-month wait
that had stalled sales from the project.
"The withdrawal of concentrate from the warehouse by customers is expected to ramp up quickly," Vancouver-based Turquoise Hill Resources Ltd., 51 percent-owned by Rio, said yesterday in a statement. "As revenue is recognized when customers collect concentrate, Oyu Tolgoi will now begin recording revenue."
The release of the concentrate will allow Oyu Tolgoi to start recording revenue, with the mine shipping production since July and receiving payments from customers. It comes as Rio and Mongolia continue talks to resolve differences that have stalled a planned underground expansion at the mine.
Chinese buyers have now received the necessary approvals to collect the concentrate, Turquoise Hill said yesterday.
About 1,000 metric tons of concentrate from the mine was shipped to an undisclosed buyer in China on Oct. 19, Liu Hongmei, a customs officer at the Hohhot branch that oversees the Gants Mod border post where the copper is being held in bonded warehouses, said in a phone interview yesterday.
Turquoise Hill, owner of 66 percent of Oyu Tolgoi LLC, confirmed the first convoy departed from the warehouse on Oct. 19.
"The Chinese buyers have started submitting paperwork to clear customs since last week," Liu said. The remaining copper in warehouses at the border will be released "as soon as
paperwork on relevant taxes are completed," she said.
Turquoise Hill said in an Oct. 14 statement that its customers were making good progress resolving matters with Chinese customs officials on concentrate purchased from the Oyu Tolgoi mine. Buyers had been unable to collect copper concentrate from bonded warehouses at the border while customs documentation was finalized, according to the company.
Oyu Tolgoi, 550 kilometers (342 miles) from the Mongolian capital Ulaanbaatar, had delivered 38,000 tons of copper concentrate to bonded warehouse in China as of Sept. 18,
Turquoise Hill said in a statement on Sept. 23. An additional 122,000 tons had been stockpiled at the mine, it said that day.
Shipments of copper concentrate from the mine will be "aligned with production rates" by year-end, Turquoise Hill said yesterday.
Customs dispute solved at Rio's Oyu Tolgoi – Reuters, October 21
Oyu Tolgoi shipment finally heads to China – The Australian, October 22
Oyu Tolgoi's first international copper, gold shipment on its way to China – MINING.com, October 21
Oyu Tolgoi customers collect copper concs from Chinese customs – Metal Bulletin, October 21
Rio Tinto's Oyu Tolgoi Customers Get Chinese Customs Approval For Copper – WSJ, October 21
Breakthrough in Mongolian copper border snag
By Lucy Hornby
October 18 (FT) The first shipments of copper concentrate from Rio Tinto's giant Oyu Tolgoi mine in Mongolia can now move into China after a three-month bureaucratic hold-up at a remote border crossing in the Gobi desert.
The release solves a snag in Rio's operations at Oyu Tolgoi, which began production in July, but the miner still faces more hurdles ahead.
Rio has put the second $6bn phase of the mine on hold as it negotiates financing and other terms with the government of Mongolia.
Revenues from Oyu Tolgoi could account for about one-third of Mongolia's GDP but the problems in developing the mine have helped shape other foreign miners' willingness to invest in the country.
Rio Tinto said this week that the hold-up in the copper concentrate shipments had prevented it from booking revenues on the first quarter of production from the mine.
About 38,000 tonnes of copper concentrate were in the bonded warehouse at the port and another 122,000 tonnes stockpiled at the mine as the company and its Chinese customers sought to resolve the problem.
Importers of the concentrate had submitted the required tax paperwork, allowing the concentrate to be released from bonded warehouses where it had been stored since July 9, said Yu Juyang, a customs officer at the Urad bureau that controls the tiny Gants Mod border post.
The bureaucratic hold-up stemmed from the fact that the border crossing could only handle trade between Chinese and Mongolian companies but a party named on the contracts belonged to a third country, according to an official at the Hohhot customs bureau.
Rio is in intense negotiations with the Mongolian government over the terms of the second phase.
Mongolia will only see revenues from the mine after the miner has recouped its costs but with the price of coal – its other major export – declining, the country is eager to realise returns from its 34 per cent share of the project.
Erdene Announces Private Placement : Altan Nar Gold Project-Exploration Update
HALIFAX, NOVA SCOTIA--(Marketwired - Oct. 18, 2013) - Erdene Resource Development Corp. (TSX:ERD) ("Erdene" or "Company"), is pleased to announce it intends to issue, by way of a non-brokered private placement, up to 7,140,000 units at a price of $0.07 per unit for gross proceeds of up to $500,000 ("Private Placement"). Each unit will consist of one common share of the Company and one-half of one common share purchase warrant, with each whole common share purchase warrant entitling the holder to purchase one common share of the Company at a price of $0.10 for a 24-month period.
Net proceeds of the Private Placement will be used for exploration of the Company's projects in Mongolia and for working capital. The Company announced on October 7th, 2013 (click here for news release) the commencement of a trenching program at the Altan Nar gold-polymetallic project to further define near-surface mineralization and to prioritize new areas for the next phase of resource drilling over the 5.5 kilometre mineralized trend. In addition, proceeds will be directed to the Khuvyn Khar copper project, Altan Arrow gold-silver project, and general exploration & evaluation activities.
The Private Placement is scheduled to close by November 1st, 2013 and is subject to certain conditions including, but not limited to, the receipt of all necessary approvals including the approval and acceptance by the Toronto Stock Exchange. All securities to be issued pursuant to the Private Placement will be subject to a four month hold period.
Altan Nar Gold Project - Exploration Update
During the past two weeks the surface exploration program at the Altan Nar gold project progressed ahead of schedule with 21 trenches completed over a total length of 1,390 metres. The original 1,200 metre program has been expanded to 2,000 metres with an additional six trenches planned for Altan Nar while a series of test pits and trenches will also be completed on the Oyuut Khundii porphyry copper prospect and the Altan Arrow gold-silver project. It is expected that these programs will be completed by early November and that approximately 1,500 samples will be submitted for analysis.
By Chris MacDougall
October 18 (Emerging Frontiers) Mongolia has seen an unexpected surge in junior mining activity late into 2013. Veterans such as Erdene Resources (TSX:ERD), Xanadu Mines (ASX:XAM), Aspire Mining (ASX:AKM) and Mongolian listed Berkh Uul (MSE:BEU) have shown considerable progress in what has been a waning market. With recent legislative changes providing the needed backdrop for a significant shift in sentiment we expect that those companies who have remained active in the market will be likely targets for appreciation.
Over the past two months alone, Xanadu released updates from trenching work at their Oyut Ulaan copper gold project and Aspire released new developments regarding infrastructure at their Ovoot coking coal project. Similarly, shareholders of Berkh Uul received positive news through a non-binding letter of intent from Prima Fluorspar (TSX.V:PF) aimed at acquiring controlling interest of the company. Not to be overshadowed, Erdene released an update last Monday announcing that they have commenced further exploration at their wholly owned Altan Nar gold project.
Erdene continues to be one of the few Mongolian juniors that we monitor closely. Having signed a strategic alliance with Teck Resources (NYSE:TCK) earlier this year we feel that they are building a healthy foundation for exploration and development of their copper and molybdenum properties in southwestern Mongolia. With those projects now receiving the attention that they deserve from the strategic alliance Erdene can focus on the development and commercialization of Altan Nar.
The work that was announced last week will aim to further define already identified mineralization, focusing on near-surface anomalies that will help to prioritize the next phase of drilling. The 5km strike length and 1.5km wide area was originally outlined by soil and surface sampling which identified highly anomalous values of gold (up to 1.5g/t) and lead (up to 2.6%) along with associated anomalies for zinc, molybdenum, silver and copper. During the 2012 exploration season the company drilled 2,465 meters across 17 holes, including 11 reconnaissance holes that provided encouraging results over 1km away from the discovery zone.
If Altan Nar continues to progress in the same way that it has so far we expect that Erdene will garner further attention from the investment community. Added support from the Government towards the development of gold projects in Mongolia will also play a key role in building momentum. With many juniors sitting at 52 week lows and the underlying country fundamentals shifting in favor of the mining industry we expect that Altan Nar and similar projects will prove to be highly attractive to the average frontier investor interested in Mongolia.
MIBG: Mongolian Market Update
October 21 (Mongolian Investment Banking Group) --
Erdene Raising Capital For Altan-Nar Gold Project
Erdene Resource Development Corp (TSX:ERD) announced last Friday that it intends to raise C$500,000 through a Private Placement of 7,140,000 units at C$0.07. Each unit will consist of one common share and one-half 24 month warrant at C$0.10. This is the latest in a series of fundraising activities that the Company has undertaken in order to develop... continue reading
It should come as no surprise that MIBG considers Chinese economic performance to be one of the key determinants of Mongolia's success. With Mongolia's resource driven economy being propelled by Chinese demand we monitor the progress and underlying fundamentals of China's economic indicators as closely as… continue reading
XANADU: RETIREMENT OF NON-EXECUTIVE DIRECTORS - BRIAN THORNTON & ROBERT WESTPHAL
October 22 -- Xanadu Mines Ltd (ASX: XAM – Xanadu) today despatched its Notice of Annual General Meeting to its shareholders. The Meeting is to be held at Level 4, 60 Carrington St, Sydney, NSW on 22 November at 2pm AEDT.
Xanadu also announces that Non-Executive Directors Brian Thornton and Robert Westphal have advised that they will retire from the Board of Xanadu.
Mr Westphal will retire as a Director of Xanadu effective from the close of the Company's Annual General Meeting, which is to be held on 22 November 2013.
Mr Thornton will retire as a Director of Xanadu effective 28 February 2014.
Mr Thornton founded Xanadu in 2005 with Mr Ganbayar Lkhagvasuren and was instrumental in the company establishing its operations in Mongolia. Since this time, Xanadu has been active in the exploration of gold, copper and coal in Mongolia, and was listed on the Australian Stock Exchange in 2010.
Mr Thornton commented that "I am pleased that Xanadu has renewed its focus on copper and gold and has an outstanding portfolio of prospects in Mongolia. I will remain a significant and supportive shareholder of the company".
Xanadu's Managing Director, Mr George Lloyd, acknowledged Brian's contribution to Xanadu saying, "Brian has built a strong corporate presence and professional exploration team in Mongolia to complement the company's exploration portfolio. The company is in an excellent position to capitalise on its opportunities and we are all indebted to Brian for his hard work."
Mr Westphal joined Xanadu in September 2010 as a Non-Executive Director and provided invaluable support to management during the company's listing process on the Australian Stock Exchange later that year. Mr Westphal also played a valuable role in chairing the Audit Committee in addition to his other duties as a director.
Xanadu's Chairman, Mr Denis Gately, thanks both Mr Thornton and Mr Westphal for their valued contribution.
Xanadu Mines: Annual Report 2013
October 22, Xanadu Mines Limited (ASX:XAM) --
Notice of Annual General Meeting, November 22 – Xanadu Mines, October 22
AKM up 14.55% on Monday to A$0.063
Aspire Mining: Annual Report 2013
October 18, Aspire Mining Limited (ASX:AKM) --
NRU flat with 0 volume at A$0.009
Newera Resources: Annual Report 2012/2013
October 21, Newera Resources Limited (ASX:NRU) --
975 up 2.54% to HK$1.21 on Monday
MMC: Connected Transactions With NIC, Shunkhlai, USS and MCS Armor
October 18, Mongolian Mining Corporation (HKEx:975) --
In September 2013, NIC, Shunkhlai, USS and MCS Armor have been selected, through competitive tender process, as supplier of fuel products to the Group, service provider of the provision of office and camp supporting services to the Group and service provider of the provision of security services to the Group (as the case may be). On 18 October 2013, the Group entered into the following agreements:
(i) Fuel Supply Agreement with NIC between NIC and Energy Resources, whereby NIC conditionally agreed to supply fuel products to the Group for the mining activities and site operations at the UHG mine site and BN mine site for a period commencing from 1 January 2014 to 31 December 2016 for a total consideration of up to US$784,369,936;
(ii) Fuel Supply Agreement with Shunkhlai between Shunkhlai and Transgobi, whereby Shunkhlai conditionally agreed to supply fuel products to the Group at the UHG mine site and TKH site for the Group's coal transportation and logistics operations for a period commencing from 1 January 2014 to 31 December 2016 for a total consideration of up to US$169,373,021;
(iii) Service Agreement between USS and Energy Resources, whereby USS agreed to provide office and camp supporting services to the Group for a period commencing from 1 January 2014 to 31 December 2016 for a total consideration of up to MNT72,957,978,408 (equivalent to approximately US$43,026,555; and
(iv) Security Services Agreement between MCS Armor and Energy Resources, whereby MCS Armor agreed to provide security services to the Group for a period commencing from 1 January 2014 to 31 December 2016 for a total consideration of up to MNT12,933,103,680 (equivalent to approximately US$7,627,225).
LISTING RULES IMPLICATIONS
NIC is an associate of Dr. Oyungerel Janchiv, a non-executive Director. Shunkhlai is an associate of Mr. Batsaikhan Purev, a non-executive Director. As such, each of NIC and Shunkhlai is a connected person of the Company and the transactions contemplated under each of the Fuel Supply Agreements constitute continuing connected transactions of the Company.
As the applicable percentage ratios of the continuing connected transactions under each of the Fuel Supply Agreements are expected to be more than 5%, the transactions contemplated under each of the Fuel Supply Agreements are subject to the reporting, announcement and independent shareholders' approval requirements under Chapter 14A of the Listing Rules.
An Independent Board Committee will be formed to consider and advise the Independent Shareholders as to whether (i) the terms of each of the Fuel Supply Agreements; and (ii) the Proposed Annual Caps are fair and reasonable, and are in the interests of the Company and the Shareholders as a whole, and to advise the Independent Shareholders as to how to vote at the EGM. The Company has appointed Somerley as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders in this respect.
A circular containing, among other matters, further details of the continuing connected transactions under the Fuel Supply Agreements and a notice convening the EGM, the letter from the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders and the recommendation of the Independent Board Committee to the Independent Shareholders is expected to be despatched to the Shareholders in compliance with the Listing Rules on or before 8 November 2013.
Each of USS and MCS Armor is a wholly-owned subsidiary of MCS Holding. MCS Holding is in turn wholly-owned and controlled by MCS (Mongolia) Limited. MCS (Mongolia) Limited directly owns 100% shareholding interest in MCS Mining Group, which is a substantial Shareholder holding approximately 33.50% of the issued share capital of the Company as at the date of this announcement. As such, USS and MCS Armor are connected persons of the Company within the meaning of the Listing Rules. Accordingly, the transactions contemplated under the Service Agreement and the Security Services Agreement constitute continuing connected transactions of the Company, respectively.
As the applicable percentage ratios for the continuing connected transactions under the Service Agreement and the applicable percentage ratios of the continuing connected transactions under the Security Services Agreement are expected to be more than 0.1% but less than 5%, the transactions contemplated under the Service Agreement and the Security Services Agreement are subject to the reporting and announcement requirements but exempt from independent shareholders' approval requirement under Chapter 14A of the Listing Rules.
WOF up 2.94% to A$0.07 on Monday
Wolf Petroleum: Notice of Annual General Meeting, November 25
October 21, Wolf Petroleum Limited (ASX:WOF) --
VOR closed flat at A$0.005 on Monday
Voyager Resources: Notice of Annual General Meeting, November 25
October 21, Voyager Resources Limited (ASX:VOR) --
Mongolia - a tale of two mines
By Terrence Edwards
October 18 (bne) It is not the best of times for Mongolia's two largest mines. Both are falling well short of their moneymaking potential and, ever mindful of this, the government is in talks with its partners in each project to open a new chapter in the Mongolian investment story.
Expectations were high for the Oyu Tolgoi copper mine and Tavan Tolgoi coking coal mine; both projects ride on their enormous reserves of 2.7m tonnes of recoverable copper and 1.84bn tonnes of coal, which are in big demand in next-door China. "Mongolia is an extended China resource play," says Howard Lambert, chief representative of ING Bank in Mongolia. "If you believe in China's demand for commodities, Mongolia should be on your radar as a producer of low-cost minerals."
However, the gloss has come off the projects after a series of disputes between the government and the projects' partners, as well as slowing growth in China. The International Monetary Fund (IMF) warned in its World Economic Outlook report in October that a slowing Chinese economy has caused it to cut Mongolia's projected GDP growth for 2015 from 7.6% to 5.8% and for 2016 from 9.6% to 3.6%. "China's economy is expected to rebalance away from a mostly investment-based growth model toward a more consumption-based growth model," Geert Almekinders, who led a recent IMF mission to Mongolia, said on October 7. "Both these factors are bound to have major spillovers globally and especially in the region. Spillover risks will particularly affect the more vulnerable emerging market economies. In light of this, Mongolia needs to change course to avoid becoming highly exposed to these external shocks and risks of crisis."
The problem for Mongolia is that too much hope has been invested in these two mines. For example, the investment agreement signed in 2009 governing Oyu Tolgoi, which is destined to be one of the world's largest producing copper mines, set the stage for the investment boom in Mongolia and it acts as an investment bellwether for the economy as a whole.
However, the Mongolian government has found itself continually at loggerheads with Rio Tinto, which is leading operations at Oyu Tolgoi with a 66% stake in the project through its subsidiary Turquoise Hill Resources. The development of an underground mine there, where the company says 80% of the mine's value lies, is on hold after a government official notified Rio that parliamentary approval was necessary for a $4bn project financing package. Rio says the financing package is the only option to move forward, but the government is hesitant to permit the financing package until it has a better understanding of costs related to the project.
Then there's the problem at the state-owned coal miner Erdenes Tavan Tolgoi, or Erdenes TT as locals call it, since it signed an off-take agreement with Aluminum Corporation of China (Chalco) that left it with $350m in debt to be repaid in coal exports. Erdenes TT now regrets signing the contract because it set below-market prices for coal in an already depressed market. The Mongolian government has since attempted to cancel the contract by paying a cash penalty and even suggested it would try to secure a better deal from another Chinese state-owned miner, Shenhua. That didn't pan out, however, and Mongolia has since been stuck with the original deal.
An attempt to deliver immediate benefits from the mining boom to a population where some 30% still live in poverty has also created problems for both projects. Oyu Tolgoi and Tavan Tolgoi were required to contribute $250m and $350m respectively to the Human Development Fund (HDF), whose ambitious goal is to bring Mongolia's human development status to the same level as that of the developed countries by 2020. Although the programme was sold as a way to turn mining profits into societal benefits, in practice redistributing those loans to the country's 2.9m citizens in cash has been more effective in driving up inflation, which until March had been in double digits for the previous two years, hitting 14% in December 2012. Erdenes TT was financially crippled by the HDF obligation, while Rio expected its debt to the fund to be treated as a pre-paid tax credit for 2012, but the government refused to allow it, creating another bone of contention.
Despite the stumbling blocks, Lambert at ING, which was the first foreign bank to open a representative office here in 2008 and has seen at first hand the ups and downs at both projects, says the problems with the two mines need to be put into context. "In terms of mineral production, Mongolia has come a long way in a relatively short period of time," he argues. "OT [Oyu Tolgoi] is producing from phase one, which is a milestone achievement. [Erdenes] TT is also producing and has been for some time – the question now is in relation to the timing of the buildout of the necessary infrastructure, power, wash plant and rail."
One optimistic sign is politicians' apparent mellowing over the issue of ownership at Oyu Tolgoi, which given its importance has always put it at the centre of a bitter debate over resource nationalism. A number of populist-leaning politicians criticised the 2009 investment agreement because it leaves Mongolia with a minority share of 34%. But now even the mining minister, a long-time critic of the original agreement, has softened his stance. "It is true, I used to criticize the Oyu Tolgoi agreement," said Mining Minister Davaajav Gankhuyag at a September 26 press conference. "Now the government of Mongolia is not against the OT agreement… The OT agreement was made already, so we'll fulfil the agreement and everything shall be handled according to the agreement."
The two sides are back at the negotiating table. Government officials met with Rio management in London in late September and another meeting is widely expected to be held in Ulaanbaatar soon. Since then, Mongolian officials have spoken more amicably about Oyu Tolgoi and the need to find consensus with the Anglo-Australian mining group. Prime Minister Norov Altankhuayg is also set to visit China on October 22, where many expect him to discuss outstanding issues with China about Erdenes Tavan Tolgoi's agreement with Chalco. He may also try and work out a customs issue that has prevented some 38,000 tonnes of copper concentrate that travelled over the border to China from reaching Chinese smelters.
An end to the mines' problems, and a new beginning for Mongolian investment, could be in sight.
NatSec MSE Trading News, October 18: Top 20 +0.08%, Turnover ₮31.6 Million
October 18 (National Securities) The MSE TOP-20 Index rose 0.08% to 13,945.19 points. The total number of shares traded were 43,820 and total value was 31.6 million MNT. 5 shares were up, 6 were down and 5 were stable.
Today's top gainer was Berkh-Uul (BEU), a flourspar, coal and gold firm, which rose +3.45% to 5,700 MNT. Coal miner, Tavantolgoi (TTL) was the 2nd biggest gainer and traded up to 3,099 MNT, up +2.89%. On the decliners side, thermal coal miner, Aduunchuluun (ADL) was the top loser, down -7.38% to 1,806 MNT. Mongol Leather (UYN) dropped -7.08% to 2,500 MNT. Genco Tour Bureau (JTB) with 23,770 shares and Remicon (RMC) with 14,776 shares were today's volume leaders. The trade values were 1.8 million and 2.5 million MNT respectively.
Please click here to see the detailed news
MSE Weekly Review: Top 20 +0.83%, Turnover ₮166.2 Million
Ulaanbaatar, October 21 /MONTSAME/ Five stock trades were held at Mongolia's Stock Exchange on October 14-18, 2013.
In overall, 164 thousand and 690 shares were sold of 50 joint-stock companies totaling MNT 166 million 242 thousand and 141.80.
"Genco tour bureau" /75 thousand and 964 units/, "Remikon" /19 thousand and 869 units/, "KhunsArkhangai" /18 thousand and 642 units/, "APU" /14 thousand and 160 units/ and "Tavantolgoi" /8,801 units/ were the most actively traded in terms of trading volume, in terms of trading value--"APU" (MNT 54 million 024 thousand and 200), "Tavantolgoi" (MNT 26 million 424 thousand and 964.00), "KhunsArkhangai" /MNT 18 million 686 thousand and 684/, "Suu" /MNT 16 million 801 thousand and 600/ and "Tav" (MNT six million 859 thousand and 360.00).
Mogi: APU's block trading today accounted for 19.8% of total outstanding shares and price of ₮3,230 is 15% lower than Friday closing price of ₮3,800. Market cap now ₮239.95 billion or $141.35 million
NatSec MSE Trading News, October 21: Top 20 +0.64%, Turnover ₮47.53 Billion, APU Block Trading ₮47.51 Billion
October 21 (National Securities) Today was very impressive day and trading amount was the 47.53 billion MNT that was the highest single-day in MSE history. Out of the 47.53 billion MNT, 47.51 billion MNT was a trade for Apu (APU) block that totalled 14.7 million shares, which were traded at 3,230 MNT.
The MSE TOP-20 index rose +0.64% to 14,033.88 points. UB-BUK (BUK), whose main product is concrete, soared +14.78% to 36,500 MNT and Khasu-Mandal (HSR) rose +14.84% to 1,780 MNT. Baylag Nalaikh (BNB) went up +12.00% to 789 MNT. It was relatively balmy on the decliners side. The volume leader was Nako Fuel (NKT) which traded 4,800 shares at 209 MNT, worth 1 million MNT.
Please click here to see the detailed news
MSE Trading Table: October 21
Total turnover 47,533,581,310.00 tugriks
9,301 shares of 12 companies worth 19,567,895.00 tugriks were traded.
808 shares of 4 companies worth 684,345.00 tugriks were traded.
1 block trades, each consisting of 14,710,009.00 shares that are worth 47,513,329,070.00 were conducted.
AON order book
BDSec: HBOil (MSE: HBO)- The Last Frontier, a Review of Our Recent Site Tour in the DPRK
Waste Oil Recycling, Refining, Exploration and Production
Price Target MNT 8,160
Price (10/14/2013 Close) MNT 330
52 Week High-Low MNT 382-151
Market Cap ($ mm) $1.8
Shares Out (mm) 9.2
90-day Average Daily Vol 2,429
October 18 (BDSec) Following the successful acquisition of 20% shareholding in KOEC International Inc. ("KOECII") by HBOil (MO:HBO), management from both HBO and BDSec recently conducted a site visit of the Seungri Oil Refinery ("SOR") located in the Special Economic Zone of Rason City in the DPRK. In addition to a detailed inspection of the refinery complex, power station, pipelines, rail and the Songbong port (all of which, in part, comprise the asset portfolio of KOECII, wherein HBO owns 20%); we formally met with both the senior leadership of Rason City and the state owned Korea Oil Exploration Corporation ("KOEC"), with whom HBO is a joint venture partner. These meetings not only reconfirmed every critical detail as laid out in HBO's JV with KOEC and the shareholders' agreement that regulates the parties' relationship within the KOECII corporate structure, but also proved to us that the leadership of Rason City and KOEC were unified in their complete support to resume full operations at the SOR. We spent a great deal of time with the leaders of Rason City and KOEC, in both formal and informal settings. Without exception, we found them to be highly intelligent and dynamic, as well as enthusiastic and appreciative of the investment HBO has made and shall make into the country. These interactions also reinforced our belief that the DPRK is indeed "opening up" and that Mongolia can and will play a special role in this process. In fact, Mongolia's Minister of Agriculture and Industry departed on October 15th for high-level meetings in Pyongyang, which was preceded by a delegation of Mongolian businessmen who visited on October 1st, and will be followed by a formal visit by Mongolia's President on October 27th. There is little doubt in our mind that the land grab in the DPRK is now afoot, and HBO has the privileged status as the only publicly traded entity in the world, where investors can exclusive ly gain an unprecedented exposure to the petroleum industry of DPRK.
We reiterate our Buy rating on the shares of HBOil, and reaffirm our 3-5 years price target of 8,160 MNT per share, which is nearly 2500% higher than the present levels. While some are skeptical of the astronomical upside our analysis has produced, investors should bear in mind that we applied a draconian 60% discount rate in our DCF calculation and assumed a share count, which is 60% higher than the current pro-forma capital structure; following HBO's acquisition of Ninox Energy's 20% interest in KOECII. The high er share count in our model, assumes HBO raises the full US$ 10 Million, to exercise its option to acquire 51% of Korex Ltd., which holds 100% of the exclusive exploration and production rights for the East Sea of DPRK. HBO is currently in the process of raising the requisite funds, in order to complete the Korex transaction.
Understanding the Special Economic Zones of DPRK
To understand and appreciate the immense upside imbedded in the shares of HBO, one must first understand the nature of DPRK's Special Economic Zones in gener al, and the uniqueness of Rason City; in particular. Foreigners are free to travel to these zones without an invitation or visa from the DPRK. Currently there are three of these zones in the DPRK, with immediate plans for six more, bringing the total to nine (one for each province). The following are the critical elements and incentives driving investment into the Special Economic Zones of DPRK:
• Land use and transfer rights for up to 50 years.
• Property rights for buildings.
• Managerial discretion in business operations, including production, hiring and wage setting, sales and pricing.
• Regard to international practices and standards.
• Access to markets and financial services in various currencies.
• Legal protection of economic and personal safety rights.
• Attractive tax provisions.
• Preferential tariffs and customs duties.
• Dispute resolution by four methods: settlement, mediation, arbitration, and courts.
These incentives have had the desired result, as the DPRK's 3 neighbors (China, Russia, and yes; South Korea) have begun pouring money into the country. China has so far led the way through several projects, not the least of which is a; US$ 6.3 Bil lion, 223 miles high-speed rail link, to the DPRK border (partially funded by The World Bank). This will be one of three high speed rail projects planned to connect China to the DPRK. China is also financing the construction of a new US$ 356 Million bridge over the busiest border crossing with the DPRK at Dandong. To provide Rason City with reliable power, China is constructing a 61 miles transmission cable to Rason City, connecting it to the electricity grid in Hunchun. Separate from these investments is a US$ 490 Million Chinese fund established two months ago, specifically designated to be allocated to the DPRK.
It's one thing to read and hear about positive changes and opportunities in the DPRK, and it is an entirely different experience to hop on an airplane to see those things in person. We met the people, ate the food (which was excellent), walked the land, and it was a tremendous experience. For this reason, we will likely organize a trip for investors in early 2014, so that parties interested in investing in the DPRK, will have the same benefit as we did; in assessing HBO's prospects, first hand. What we think you will find if you go, is a refinery and facility in excellent shape, and a lot of Chinese and Russians building and shipping goods as fast as they can. You will also meet with DPRK officials, who are enthusiastically following the instructions of their government to liberalize their economy by attracting investments and creating employment opportunities for their dynamic, educated, talented, and dedicated population.
We found several reasons why we could increase our estimates for HBO's future cash flows, based on the optionality and scalability of the various assets that HBO benefits from, through its shareholding in KOECII. We could also make the case that the draconian 60% discount rate in our model, is indeed too severe, given that the due diligence we carried out on this DPRK visit, confirmed the assumptions we had made. However, for now, we will simply reiterate our Buy rating and 3-5 years price target of 8,160 MNT.
• Further international isolation by way of stricter UN sanctions against DPRK
• Regional hostility, should DPRK initiate aggressive actions towards South Korea, Japan, or the US.
• Changes in the government of DPRK and/or changes in DPRK's economic or national policies.
• Exploration risk, long-term commodity price volatility, and timely execution of HBO's business plan.
MSE Press Release: Positive and measurable results achieved
October 21 /www.business-mongolia.com/ In 2009 and 2010 the SGK and the Cabinet issued resolutions on improving the Mongolian Stock Exchange's operations standard into international level. London Stock Exchange has been selected as a strategic partner. Agreements between LSE and MSE have been signed in 2010 and 2011 respectively. Since then MSE has achieved some positive results as follows:
- In scope of regulation reform, MSE played a significant role in drafting and encouraging SGK to approve the Securities Law and Investment Fund Law. The two laws will be in effect from 1st of January, 2014. Also, the relevant regulations and guidances to follow the law is being drafted before the law comes into effect.
- One of the fundamental factors for the new Securities Law to come in effect was the execution and overall system renewal. Millennium IT system has been implemented from 2nd of July, 2012, and Financial Regulatory Committee, MSE, Mongolian Securities Clearing House and Central Depository, and brokerage firms are using the system.
- Along with the system renewal, clearing system was shifted from pre-paid to T+3 enabling and promoting foreign investment, foreign investment funds, and also custodian services. Central Bank and commercial banks will execute the settlement of orders making it more aligned with international standard.
- 120 officers from MSE was sent to LSE in London to further their professional knowledge and monthly training sessions are being held with the overall training of 1,000 people. In addition, education materials are given to the general public through printed and online sources on MSE's website.
- MSE has been publishing registered companies' financial statements, shareholders meeting announcements, press releases in a timely manner improving corporate governance of the companies. For example, last year only 97 companies have submitted their financial statements, but in 2013 the number increased by 2.23 times to 217 companies.
1. Since the implementation of Millennium IT system, there has been no glitch or system failure during this one year period. The system is used in LSE, and other 20 countries at over 30 stock exchanges. Also, T+3 enabled us to execute orders online and market making features. From April, 2013 15 companies started implementing online trade platforms.
Due to the practice of investment banks deal with IPO procedure, Millennium IT system doesn't include IPO execution feature. Considering the characteristics of domestic market, MSE is working on ordering a customized IPO feature for the current system.
MSE announced that its ready to audited by independent auditors to confirm its international standard.
2. The whole renewal budget is estimated to USD14.2 million by the Cabinet, and in included technology improvements, staff training, legal environment improvement consultancy fees and other services. USD5.2 million was financed from the state budget, additional USD1.7 million was borrowed, and overall USD6.9 million was spent as of today.
3. The decrease in trade volume is directly connected with the foreign investment that accounts 90% of the overall trade. MSE views the current situation as temporary. It is worth to note that MSE is working hard on promoting Mongolian financial market in order to attract interested parties and foreign investors. Therefore, we view that false messages targeted at MSE's operations might have negative effects such as chasing away the potential foreign investors.
MONGOLIAN STOCK EXCHANGE
МОНГОЛЫН ХӨРӨНГИЙН БИРЖ: МЭДЭГДЭЛ
10-р сарын 18 (МХБ) Монгол Улсын Их Хурлын 2009 оны 79 тоот, 2010 оны 11 тоот, Засгийн газрын 2010 оны 86 тоот, 2010 оны 115 тоот тогтоолуудын дагуу Төрийн Өмчийн Хороо /ТӨХ/-ноос Монголын хөрөнгийн зах зээлийг олон улсын жишигт нийцүүлэн хөгжүүлэх зорилгоор олон улсын нээлттэй тендерийг зарлаж, хөрөнгийн зах зээлийг хөгжүүлэх стратегийн түншээр Лондонгийн хөрөнгийн бирж групп /ЛХБГ/-ийг сонгон шалгаруулсан билээ. Улмаар ТӨХ ЛХБГ-ийн хооронд "Стратеги хамтын ажиллагааны гэрээ"-г 2010 оны 12 дугаар сарын 24-ний өдөр байгуулж, түншлэлийн хүрээнд хийгдэх ажлуудыг нарийвчлан тусгасан "Ажлын мастер гэрээ"-г 2011 оны 4 дүгээр сарын 7-ны өдөр ТӨХ, ЛХБГ болон Монголын Хөрөнгийн бирж /МХБ/ хамтран байгуулсан билээ.
Энэхүү гэрээний дагуу хөрөнгийн зах зээлийн хууль, эрх зүйн орчныг боловсронгуй болгож, МХБ-ийн бүтэц зохион байгуулалтыг сайжруулах, техник, технологийг шинэчлэх, боловсон хүчнийг чадавхижуулахад чиглэсэн олон ажил, арга хэмжээг амжилттай хэрэгжүүлсэн нь тодорхой, бодит үр дүнд хүрээд байна. Тухайлбал:
· Эрх зүйн шинэчлэлийн хүрээнд "Үнэт цаасны зах зээлийн тухай хууль", "Хөрөнгө оруулалтын сангийн тухай хууль"-ийг олон улсын жишигт нийцүүлэн шинэчлэн болон шинээр боловсруулж, Монгол Улсын Засгийн газраас дэмжсэний үр дүнд УИХ-аар батлуулахад МХБ голлох үүрэгтэй оролцож ажилласан бөгөөд 2014 оны 01 сарын 1-нээс хүчин төгөлдөр мөрдөгдөж эхлэх эдгээр хуулиудад нийцүүлэн хөрөнгийн зах зээлийн үйл ажиллагааг зохицуулах 10 гаруй дүрэм, журмуудыг шинээр болох шинэчлэн боловсруулах ажлыг хэрэгжүүлж байна.
· "Үнэт цаасны зах зээлийн тухай" хуулийг амжилттай хэрэгжүүлэхэд гол чухал угтвар нөхцөл болсон хөрөнгийн зах зээлийн дэд бүтцийн шинэчлэлийн ажлыг амжилттай хэрэгжүүллээ. Тухайлбал, арилжаа, төлбөр тооцоо, хадгаламж, хяналтын цогц шийдэл бүхий "Миллениум Ай Ти" системийг 2012 оны 7-р сарын 2-ны өдрөөс Монголын хөрөнгийн зах зээлд нэвтрүүлж, олон улсын жишигт нийцүүлсний зэрэгцээ, СЗХ, МХБ, Үнэт цаасны төлбөр, тооцоо, төвлөрсөн хадгаламжийн төв /ҮЦТТТХТ/, брокер дилерийн компаниуд үйл ажиллагаандаа мөрдлөг болгон ашиглаж байгаа билээ.
· Энэхүү системийг нэвтрүүлэхийн зэрэгцээ хөрөнгийн зах зээлийн төлбөр, тооцоог урьдчилсан төлбөрт хэлбэрээс "Т+3" горимд шилжүүлсэн нь гадаадын хөрөнгө оруулалтыг Монголд оруулах ажил идэвхжүүлж, үнэт цаасны кастодианы үйл ажиллагаа нэвтрүүлэх, гадны хөрөнгө оруулалтын сангуудыг Монголын зах зээлд оруулахад шийдвэрлэх ач холбогдолтой болно. Арилжааны төлбөр, тооцоог МонголБанк, арилжааны банкуудаар дамжуулан гүйцэтгүүлэх болж, клиринг банкны үйл ажиллагааг хөрөнгийн зах зээлд нэвтрүүлсэн нь олон улсын жишигт нийцүүлсэн чухал арга хэмжээ болсон юм.
· Монголын хөрөнгийн зах зээлд ажиллаж буй мэргэжлийн боловсон хүчний мэдлэг, ур чадварыг дээшлүүлэх зорилгоор Лондонгийн академи-д 120 гаруй мэргэжилтнийг сургалтанд хамруулж, МХБ-ийн дотоодын сургалтыг сар бүр тогтмол явуулж, сүүлийн жилүүдэд 1000 гаруй мэргэжилтнийг бэлтгэн гаргалаа.
· Хөрөнгийн зах зээлийн нээлттэй, ил тод байдлыг сайжруулах зорилгоор МХБ цахим хуудсаараа дамжуулан бүртгэлтэй хувьцаат компаниудын санхүүгийн тайлан, хувьцаа эзэмшигчдийн хурлын зар, мэдэгдэл, шийдвэрүүдийг цаг алдалгүй хүргэж байгаагийн үндсэн дээр, ХК-иудын засаглал сайжирч, тухайлбал өмнөх онд 97 компани санхүүгийн тайлангаа ирүүлсэн бол 2013 онд 217 болж 2.23 дахин өссөн үзүүлэлттэй байна.
· Түүнчлэн, хөрөнгийн зах зээлийн талаар ард иргэдийн мэдлэгийг нэмэгдүүлж, хөрөнгө оруулагч, хувьцаа эзэмшигчдэд шаардлагатай бүхий л мэдээллийг цаг алдалгүй хүргэх зорилгоор МХБ-ээс үнэт цаасны зах зээлийн талаарх сургалтын материал, гарын авлагуудыг боловсруулан гаргаж, өөрийн цахим хуудсаар болон хэвлэл мэдээллийн хэрэгслээр дамжуулан олон нийтэд хүргэж байгаа билээ.
Сүүлийн үед хэвлэл мэдээллийн зарим хэрэгслээр Монголын Хөрөнгийн биржийн үйл ажиллагааны талаар үндэслэлгүй, буруу ташаа мэдээлэл гарах болж, олон нийтийг төөрөгдүүлж байгаад Монголын Хөрөнгийн бирж ТӨХК-ийн зүгээс харамсаж байгааг илэрхийлж дараах тодруулгыг хийж байна.
1. "Миллениум Ай Ти" системийг Монголын хөрөнгийн зах зээлд 2012 оны 7 дугаар сард нэвтрүүлснээс хойш өдгөө 1 жил гаруйн хугацаанд ямар нэг гэмтэл, саатал гараагүй хэвийн ажиллаж байна. Энэхүү системийг Лондонгийн хөрөнгийн биржийг оролцуулан дэлхийн 20 гаруй орны 30 гаруй хөрөнгийн бирж, санхүүгийн байгууллагууд үйл ажиллагаандаа ашигладаг бөгөөд арилжааны төлбөр, тооцоог "Т+3" горимоор хэрэгжүүлж, багцын арилжаа, тендер саналын захиалгыг тусдаа сангаар явуулах, маркет мэйкинг хийх, онлайн арилжаа явуулах зэрэг олон шинэ боломжууд нээгдсэн юм. Тухайлбал, 2013 оны 4 сараас эхлэн брокер дилерийн компаниуд алсаас буюу өөрсдийн офисоос онлайнаар арилжаанд оролцож эхэлсэн бөгөөд одоогийн байдлаар 15 брокерийн компаниуд онлайн арилжаа хийж байгаа зэргээр шинэ системийн ашиг тусыг бодитойгоор хүртэж эхэлсэн байна.
"Миллениум Ай Ти" систем нь арилжаа, төлбөр тооцоо, хадгаламж, хяналтын дэд системүүдээс бүрдэх бөгөөд анхдагч зах зээлийн /IPO/ системийг агуулдаггүй билээ. Энэ нь олон улсад анхдагч зах зээлийн захиалгын хуваарилалт, арилжааг хөрөнгийн бирж бус хөрөнгө оруулалтын банкууд хийдэг практиктай холбоотой юм. Дотоодын зах зээлийн онцлогийг харгалзан анхдагч зах зээлийн арилжааны системийг захиалан нэвтрүүлэхээр ажиллаж байгаа бөгөөд компаниуд үнэт цаасаа анхдагч зах зээлд гаргах тохиолдолд арилжааг өмнөх системээр хэвийн явуулах боломжтой хэвээр байгаа болно.
Шинээр нэвтрүүлсэн энэхүү системийн ажиллагааг олон улсын стандартад нийцэж буй эсэхийг олон улсад хүлээн зөвшөөрөгдсөн хөндлөнгийн аудитын байгууллагаар аудит хийлгэхэд бэлэн байгаа тухайгаа МХБ-ээс удаа дараа илэрхийлж байгаа болно.
2. Монголын хөрөнгийн зах зээлийг хөгжүүлэх төслийн нийт зардлын төсвийг МУ-ын ЗГ-ын шийдвэрийн дагуу 14.2 сая ам.доллар байхаар тогтоосон бөгөөд энэхүү төсөвт МХБ болон ҮЦТТТХТ-ийн техник, технологийг шинэчлэх, боловсон хүчнийг чадавхижуулах, хууль эрх зүйн орчныг шинэчлэх зөвлөгөө, туслалцаагаар хангах зэрэг олон арга хэмжээ, ажил багтсан болно. Улсын төсвөөс энэхүү төсөлд 2011 онд 5.2 сая ам.долларын санхүүжилтыг олгосноос хойш дахин санхүүжилт аваагүй бөгөөд арилжааны банкуудаас 1.7 сая ам.долларын зээл авч, гэрээний хүрээнд нийтдээ 6.9 сая ам.долларын зарцуулалт хийгдсэн болно.
3. МХБ-ийн арилжааны хэмжээ сүүлийн жилд буурсан нь нийт арилжааны 90 орчим хувийг эзэлдэг гадаадын хөрөнгө оруулалт эрс буурсантай холбоотой бөгөөд Монголын эдийн засаг, хөрөнгө оруулалтын байдал сэргэх хүртэл түр зуурын шинжтэй гэж үзэж байна. МХБ-ийн зүгээс гадаадын хөрөнгө оруулагчдад Монголын хөрөнгийн зах зээлийн талаар сурталчлах, үнэт цаас гаргаж, хөрөнгө босгох сонирхол бүхий аж ахуйн нэгжүүдийг хөрөнгийн зах зээлд татан оролцуулах, хөрөнгө оруулагчдын мэдлэгийг дээшлүүлэхэд чиглэсэн сургалт, семинар, төрөл бүрийн арга хэмжээнүүдийг тогтмол зохион байгуулж, ихээхэн хүчин чармайлт гарган ажиллаж байгааг дурьдах нь зүйтэй.
МХБ-ийн үйл ажиллагааны талаар бодит бус мэдээлэл гаргаж, олон нийтийг төөрөгдүүлж байгаа нь хөрөнгийн зах зээлийг шинэчлэн хөгжүүлэх томоохон зорилт тавин ажиллаж буй манай хамт олны бүтээлч үйл ажиллагааны урам зоригийг мохоож, аливаа мэдээ мэдээлэлд цочмог тус хөрөнгийн зах зээлд оролцох гадаад, дотоодын хөрөнгө оруулагчдыг үргээх сөрөг үр дагавартай болохыг онцлон тэмдэглэхийг хүсч байна.
Total outstanding 1-week bills ₮1.56 trillion, lowest since October 2 of ₮1.52 trillion
BoM issues ₮330 billion 1-week bills
October 21 (Bank of Mongolia) BoM issues 1 week bills worth MNT 330 billion at a weighted interest rate of 10.5 percent per annum /For previous auctions click here/
Mongolia FX Reserves Fall 7.7% M/M at End Sept. to $2.679b
By Michael Kohn
Oct. 21 (Bloomberg) -- Foreign-exchange reserves fell to $2.679b at the end of September, a decline of 7.7% from the previous month and a drop of 35.1% from the start of 2013, according to the Bank of Mongolia's website.
* Mongolia's Sept. foreign-exchange reserves increased 1.7% from a year earlier, according to the website.
Mortgage Program Update: ₮461.5 Billion Refinanced, ₮553 Billion Newly Issued at 8%
October 15 (Cover Mongolia) As of October 17, ₮461.5 billion (₮459.1 billion as of October 11) existing mortgages of 16,421 citizens (16,351 as of October 11) were refinanced at 8% out of ₮795.6 billion (794.6 as of October 11) worth requests.
Also, ₮553 billion (₮530.3 billion as of October 11) new mortgages of 9,598 citizens (9,227 citizens as of October 11) were issued at new rates out of ₮636.9 billion (₮618 billion as of October 11) worth requests.
Link to release (in Mongolian)
Mongolia not making enough progress on Anti-Money Laundering/Combatting Financing of Terrorism Compliance says FATF
October 21 (WSJ) --
The FATF also said Mongolia, on the gray list, isn't making sufficient progress addressing its deficiencies. If Mongolia doesn't take action by February 2014, the FATF will drop it to the dark-gray list, or identify it as "being out of compliance" with its action plan.
FATF: Jurisdictions not making sufficient progress - Mongolia
October 18 (FATF) The FATF is not yet satisfied that the following jurisdiction has made sufficient progress on its action plan agreed upon with the FATF. The most significant action plan items and/or the majority of the action plan items have not been addressed. If this jurisdiction does not take sufficient action to implement significant components of its action plan by February 2014, then the FATF will identify this jurisdiction as being out of compliance with its agreed action plan and will take the additional step of calling upon its members to consider the risks arising from the deficiencies associated with the jurisdiction.
The FATF takes note that Mongolia has taken steps towards improving its AML/CFT regime, including by issuing regulations to establish and implement adequate procedures to identify and freeze terrorist assets. Despite Mongolia's high-level political commitment to work with the FATF and APG to address its strategic AML/CFT deficiencies, the FATF is not yet satisfied that Mongolia has made sufficient progress in improving its AML/CFT regime, and certain strategic AML/CFT deficiencies remain. Mongolia should continue to work on implementing its action plan to address these deficiencies, including by: (1) adequately criminalising money laundering and terrorist financing; (2) establishing adequate procedures for the confiscation of funds related to money laundering; and (3) demonstrating effective regulation of money service providers. The FATF encourages Mongolia to address its remaining deficiencies and continue the process of implementing its action plan.
Petroleum companies obliged to reserve for next year
Ulaanbaatar, October 21 /MONTSAME/ A regular cabinet meeting on Saturday discussed ways of reserving oil products and fixing their sizes and types.
The cabinet also approved a list of enterprises obliging them to reserve oil products for the next year and to fix the products' types and sizes. There are 13 enterprises in the list among whom are "NIC", "Petrovis", "MT", "Shunkhlai", "Sod Mongol", "Monpetex", "Jast oil" and "Oinbirj".
Foreign Minister meets heads of Eurasian Development Bank and Rosneft
Ulaanbaatar, October 21 /MONTSAME/ Minister for Foreign Affairs of Mongolia L.Bold October 20 held a meeting with a Chairman of Eurasian Development Bank's Management Board Igor Finogenov, during his working visit to the Russian Federation.
At the meeting, the parts agreed to resume the cooperation that once they had negotiated but failed to keep alive.
After that, Mr Bold had a meeting with the president of RussNeft public company M.Gutseriev to share views with him on issues regarding infrastructure, free trade zone and investments.
Present at the meeting was also Sh.Altangerel, the Ambassador Extraordinary and Plenipotentiary of Mongolia to the Russian Federation.
The Eurasian Development Bank (EDB) is a regional development bank established by the Russian Federation and the Republic of Kazakhstan in January of 2006 to promote economic development and facilitate integration in Eurasia. The Bank currently has six member states, including Armenia, Belarus, Kyrgyzstan and Tajikistan. The EDB manages the Eurasian Economic Community's Anti-Crisis Fund totalling USD 8.513 billion.
NatSec Statistics Brief for Q1-3, 2013: October Releases Summary
October 21 (National Securities) The National Statistics Office of Mongolia (NSO) has released statistical information for Q1-3 (Jan-Sept) 2013. The details are as outlined below:
1. Gross Industrial Output jumped +11.5% YoY to MNT 1.79 trillion (U$1.1bn) at 2005 constant prices.
2. The mining and quarrying industries have grown by +16.6% YoY. Mainly influenced by the commercial commencement at Oyu Tolgoi (OT) copper and Tavan Tolgoi (TT) coal mines.
3. The construction industry has seen prodigious growth, up a whopping +282.5% YoY. The total size of the industry reached MNT 1.1 trillion (U$660m).
4. Total trade turnover was U$7.9million during the first 9 months of this year, -8% YoY. Mongolia has a trade deficit of U$1.7million which has declined by 14% YoY. The main trade partners are un-changed; China, Russia, USA, South Korea and Japan.
5. The number of unemployed has decreased by -14.7% from 44,095 people (2012.09) to 37,597 people (2013.09).The highest unemployment rate was registered amongst 25-34 y/old women.
6. Total assets in the banking system were MNT 15.3 trillion (U$9.88billion), which has increased +65.6% YoY through Q3, 2013. Outstanding loan amounts were MNT 10.1 trillion (U$6.1billion), up +48% YoY (MNT 6.8 trillion, U$4.9billion). The amount of doubtful loans was MNT 537.2 billion (U$310m) or 5.2% of the total outstanding loans, up a tolerable +0.8% year on year. This still remains an area the commercial banks in particular must reduce.
ADB: Mongolia Must Spend Up to $560 Million a Year to Climate-proof Infrastructure
ULAANBAATAR, MONGOLIA, October 18 (ADB) – Mongolia needs to spend up to $560 million per year between 2010 and 2050 to ensure its infrastructure can withstand severe weather conditions, a new report from the Asian Development Bank (ADB) says.
Economics of Climate Change in East Asia projects that severe weather related to climate change will intensify in the region, with once-in-20-years flooding predicted to occur as frequently as every four years by 2050. When combined with rising sea levels, this is expected to cause massive swaths of land to disappear, forcing millions to migrate, and wreaking havoc on infrastructure and agriculture.
Mongolia's agricultural sector, which employs 33% of the total 2.8 million population and accounts for 15% of the economy, is the country's most vulnerable sector.
"If climate change causes more variable weather, the frequency of dzuds (extreme cold and heavy snow) may increase even if the average temperature goes up. Hotter weather and greater seasonal rainfall could exacerbate the degradation of pasture land, hurting farmers across Mongolia," said Jörn Brömmelhörster, Principal Economist in ADB's East Asia Department and one of the main authors of the report.
Droughts, in combination with the dzud, have already led to major losses of livestock. In 2010, almost 30% of the country's livestock died as a consequence of the heavy snows, affecting more than 200,000 households.
In East Asia, Mongolia is the country where the climate change scenarios – and the costs of adapting to it – are the most varied. Under the worst-case scenario, Mongolia would need to spend 8.5% of its 2011-2050 infrastructure investment and maintenance costs to ensure its infrastructure can cope with climate change.
Without mitigation efforts, greenhouse gas emissions are expected to increase dramatically in the region. If no efforts are made to reduce them, emissions in Mongolia are projected to increase by 90% in 2030 compared with 2008. This business-as-usual scenario envisages Mongolia's air temperature to increase 5.2 degrees Celsius by 2090, the highest in the region.
The report examines how the People's Republic of China, Japan, Republic of Korea, and Mongolia can respond to the challenges of climate change through a combination of adaptation and mitigation. It gathers analysis from experts from 10 leading universities and think tanks in Asia, North America, and Europe, who drew on the best available databanks and climate change models.
Changing Climate Will Cost East Asia
October 21 (WSJ) At first glance, the landlocked nation of Mongolia appears particularly well-positioned to withstand rising sea levels and other effects of global climate change.
Yet, the changes in climate could still slap the rugged, sparsely populated nation with some of the stiffest unexpected costs in the region. This is one of the findings in a new report from the Manila-headquartered Asian Development Bank.
The 197-page report estimates that four Asian nations – China, Japan, South Korea and Mongolia – together can expect to pay $23 billion annually in the years to 2050 to "climate-proof" their infrastructure to cope with changing weather patterns.
"Countries in East Asia are exposed to a variety of climate-related natural disasters because of their size and location," the report said. It cites predictions of an increasingly warmer and wetter region, noting that three of the world's 10 populations most at-risk in rising seas are in East Asian cities: Shanghai, Guangzhou and Osaka/Kobe.
In absolute dollar terms, the region's biggest preparatory costs will come from protecting populations against changes in the flow of water, including rising seas, in China, Japan and Korea.
China could face $11 billion in annual spending to boost the capabilities of its infrastructure as weather patterns shift, the bank says, adding that more flooding is a major risk. Just last week, the effects of a typhoon left the southeastern Chinese city of Yuyao with extensive flooding and an angered population that reportedly clashed with police.
The ADB figures Japan might need to spend $5.6 billion each year in coming decades, while Korea may get a $1.2 billion annual bill. Those numbers are averages based on various scenarios the bank considered, so true costs could be far higher or lower.
The bank predicts that weather-proofing housing will eat up the biggest chunk of costs in the region, but maintaining roads will get more expensive too as changing weather patterns damage them more quickly.
Mongolia's risks are somewhat different from its more populous neighbors with coastlines. Changing weather patterns are expected to strain its agricultural sector, including livestock, the bank said.
"In Mongolia, continued warming may exacerbate existing natural resource concerns, such as a diminution of water resources and desertification, the latter already affecting 78% of the country which is quite dependent on agriculture," the ADB says.
Other analysts have also calculated risks to Mongolia from climate change. A United Nations agency's assessment argues it is "essential to reduce the country's vulnerability to the adverse impacts of climate change."
While that figure is a fraction of the cost faced by other nations in the ADB scenario, the bank argues that expenditures should be considered relative to how much a country would have spent on infrastructure without climate change. In other words, the bank tried to estimate how much each country's bill will rise.
Considered in this way, Mongolia would face 2.2% more annual spending. But that's only a baseline scenario, and the ADB says Mongolia could be on the hook for 8.5% more if its top-line estimate comes to pass, resulting in the country needing an extra $560 million a year. That's the highest percentage in the study of the four nations.
"Mongolia is less (economically) diversified and it is affected more by climate uncertainty, so it may wish to give more weight to the worst climate outcomes when developing its adaptation strategy," the bank advised.
Given China's already huge infrastructure-building program, the bank said its estimated 0.6% increase in expenditures appears affordable. The figure is 2.3% for Japan.
Those relatively low percentages are exactly the bank's point: It argues that East Asian nations can afford to prepare for climate change by building it into their infrastructure programs.
"The average costs of climate proofing infrastructure are relatively modest compared to the total costs of infrastructure in the region," the report concludes.
Mongolian PM angers opposition lawmakers
October 18 (Xinhua) Lawmakers from Mongolia's opposition party walked out of a parliamentary session Friday after Prime Minister Altankhuyag Norov failed to answer their queries about inflation.
During a parliamentary session on government budget, lawmakers from the opposition Mongolian People's Party (MPP) asked Norov to explain why he said inflation was stabilized while the National Statistical Office reported a higher consumer price index. Norov refused to respond to their demand, saying, "Relevant ministers will answer this question."
The lawmakers, angered by Norov's attitude, walked out of the session.
"Stop saying price is not inflated and life is good. Price of all consumer goods has increased by 10 percent to 20 percent. The economy is falling. The international reputation of Mongolia is falling. You are isolated from everyday reality," said Enkhbayar Jadamba, a lawmaker from the MPP.
The session is expected to resume next week. Norov, chairman of the ruling Mongolian Democratic Party, on Friday proposed a cut of government expenditure by 814 billion tugrug (480 million US dollars), so as to halt growing inflation and keep the budget deficit at 2 percent of GDP.
Deficit at state owned companies being addressed by SPC
October 21 (UB Post) There are 101 state owned and state invested companies in Mongolia. Though the total funds of the companies is 7.3 trillion MNT, 37 of them are operating with a deficit. Thus, the State Property Committee (SPC) has started taking measures against deficit at several companies.
The SPC has released a decree to transfer ownership of the Aircraft Maintenance and Repair Center belonging to the Civil Aviation Authority of Mongolia (CAAM) to MIAT Mongolian Airlines.
Previously, MIAT paid CAAM 300 million MNT per year for their aircraft repair. MIAT, which has been running a deficit in recent years, owes CAAM 4.5 billion MNT, and the SPC plans to transfer ownership in order to annul the loan.
The SPC has submitted this decree to the government and expects approval.
Mongolia's Khan Bank Gets $111m IFC Syndicated Loan Facilities
By Michael Kohn
Oct. 21 (Bloomberg) -- Khan Bank will receive $111m of syndicated loan facilities arranged by Intl Finance Corp. (IFC): statement.
* Loans include $71m in syndicated senior debt, $40m in subordinated debt
* Credit for long-term funding to Khan customers, capital base
* IFC to commit $10m toward sr loan, IFC Capitalization Fund to provide subordinated loan
* Addl funding includes $10m parallel loan provided by Intl Investment Bank, $20m parallel loan from OPEC Fund for International Development
* Funding includes $31m in syndicated loans from institutions including Sumitomo Mitsui, AKA Export Finance Bank, DHB Bank, Intesa Sanpaolo, ING, RosEvroBank
* Khan one of Mongolia's two biggest banks: CEO Norihiko Kato
* Khan Bank has 526 branches: statement
* Holders in Khan include Japan's Sawada with 41%, Mongolia's Tavan Bogd with 23%, IFC with 9.3%: Khan Bank website
Bloomberg First Word
Mogi: Bank of Tokyo-Mitsubsihi UFJ gets approval for representative office in Ulaanbaatar, announces BoM this morning
Токио-Мицүбиши Банк Юу Эф Жэй компанид төлөөлөгчийн газар байгуулах зөвшөөрөл олгов
10-р сарын 22 (Монголбанк) Япон улсын дэлхийд тэргүүлэх санхүүгийн нэгдэл болох Мицүбиши Юү Эф Жи (MUFG) нь дэлхийн 40 гаруй оронд 500 гаруй салбар нэгжээрээ дамжуулан санхүүгийн төрөл бүрийн бүтээгдэхүүн, үйлчилгээг харилцагчиддаа хүргэдэг, зах зээлийн үнэлгээгээр тэргүүлэх эгнээнд ордог дэлхий дамнасан хүчирхэг санхүүгийн нэгдэл билээ.
MUFG-ийн охин компани болох "Токио-Мицүбиши Банк Юу Эф Жэй ХХК" (Bank of Tokyo Mitsubishi UFJ Ltd) нь Улаанбаатар хотод Төлөөлөгчийн газар нээхээр төлөвлөж өнгөрсөн оноос эхлэн судалгаа шинжилгээ хийж эхэлсэн бөгөөд тус нэгдлийн ТУЗ-өөс 2013 оны 5 дугаар сард Монгол Улсад Төлөөлөгчийн газар байгуулах шийдвэрийг гаргасан.
Үүний дагуу тус банкнаас баримт материалаа бүрдүүлэн Монголбанкинд ирүүлснийг холбогдох хууль, журмын дагуу шалгаж Монголбанкны Ерөнхийлөгчийн 2013 оны 10 дугаар сарын 10-ны өдрийн А-200 дугаар тушаалаар "Токио-Мицүбиши Банк Юу Эф Жэй ХХК" (Bank of Tokyo Mitsubishi UFJ Ltd) компанид "Төлөөлөгчийн газар байгуулах" зөвшөөрөл олгосон болно.
MONGOLIA: Italian firms seek cashmere cooperation
October 21 (just-style.com) Italian companies have expressed an interest in cooperating with Mongolia in manufacturing wool and cashmere products - including setting up a joint factory in Italy.
"Italians prefer the highest quality found in the Mongolian wool and cashmere products only," according to Armando Branchini, president of the European Cultural and Creative Industries Alliance (ECCIA) and head of the Italian-Mongolian business council.
"However, a lack of good management to manufacture and sell these kinds of product is taking down the industrial capacity of Mongolia."
During talks between the two countries in Mongolia last week, B Jargalsaihan, general director of Buyan cashmere company, requested that any such project should receive state support.
Mongolia is the second biggest producer of cashmere after China.
MONGOLIA-POLAND BUSINESS FORUM ON OCTOBER 21
October 21 (infomongolia) On Monday, October 21, 2013, the President of the Republic of Poland Bronislaw Komorowski will conduct a six-hour working visit to Mongolia, accompanied with over 30 business delegations.
In the frameworks of the visit, Mongolian National Chamber of Commerce and Industry in collaboration with Mongolian Foreign Ministry and Polish Embassy to Mongolia are organizing a Mongolia-Poland Business Forum at the Ministry of Foreign Affairs of Mongolia at 12:00 pm, where Presidents of the two states will deliver their opening remarks.
The Polish business delegation will comprise of representatives from construction, mining, agriculture, medicine, and light industry sectors that aimed to establish a business tie with relative companies in Mongolia.
Polish companies to attend the Mongolia-Poland Business Forum are:
Polpharma - Pharmaceutical
The Office for Registration of Medicinal Products, Medical Devices and Biocidal Products - Pharmaceutical
IMF Group Sp. z o.o. - Mining advisory
Weglokoks a.a. - Energy
Profus Management - Energy
Famur s.a. - Mining
Damel s.a. - Mining
Narantal Global - Mining advisory
Ekolog - Enviroment
Fakro - Construction
Aluprof s.a. - Construction
JPWeber - Advisory
Agus Sp. z o.o. - Food
Spóldzielnia Obrotu Towarowego Przemyslu Mleczarskiego - Food
Food Service - Food
Zwiazek Pracodawców Przemyslu Tekstylnego w Lodzi - Textile
Polontex s.a i Izba Bawelny w Gdyni - Textile
Profus Management - various
Pago Sp. z o.o. (obsluga logistyczna produktów mrozonych) - Logistic, Food
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In Ulan Bator, winter stoves fuel a smog responsible for one in 10 deaths
Mongolia's capital is the coldest in the world – and in its tented slums, pollution from traditional heating is a killer. But change is on the way
By Tania Branigan
October 20 (The Guardian) They call Mongolia the "land of blue sky"; its spectacular desert, forest and grasslands are blessed by sun for two-thirds of the year. But climb to a snow-dusted hilltop overlooking Ulan Bator and you see a thick grey band hanging over the city. In the coming weeks, as temperatures plummet, the smog will spread across the streets and into homes, shutting out the light.
While Beijing's "airpocalypse" has made headlines worldwide, it pales beside the haze of the Mongolian capital. Ulan Bator is the world's second-most polluted city, superseded only by Ahvaz in Iran, according to World Health Organisation research.
Pollution is a common problem for quickly developing countries. But the biggest issue is not the smokestacks on the horizon – Mongolia's manufacturing sector remains minute – nor the vehicles jamming the capital's streets. Rather, it is the collision of urbanisation and traditional culture: 60-70% of winter pollution comes from the old-fashioned stoves heating the circular felt tents or gers that sprawl across the slopes around the city.
More than half of the city's 1.2 million inhabitants live in the impoverished ger districts, burning coal, wood and sometimes rubbish to cook and keep warm. Ulan Bator is the world's chilliest capital, with temperatures dipping as low as -40C in January.
"As soon as people start getting cold they start up their stoves, and that's when the smog begins. It looks like thick fog and every year it's getting worse. It's only a bit of an exaggeration to say you could get lost in it," said Otgonsetseg Lodoisambuu, who lives in a district to the north of the city with his children. "The little one stays inside all the time in the winter, but my older son is in first grade now, so we have to take him to school; I just put a scarf over his face. The only time it's OK to let the kids out is between one and two in the afternoon, when people let their fires die down because they have finished cooking.
"In the morning it hurts my throat as soon as I go outside. It must be hurting my lungs, too."
Ulan Bator's pollutant levels of PM2.5 – tiny particulate matter, which can penetrate deep into lungs – are six or seven times higher than the WHO's most lenient air-quality guidelines for developing countries. The result, say researchers, is that one in every 10 deaths is caused by air pollution – on their most conservative estimate.
Ryan Allen, of Simon Fraser University, in Canada, who led the study, said the true figure could be as high as one in five. The study did not consider the effects of indoor air pollution, excluded the deaths of those aged under 30 and was based on data from a centrally located government monitoring site, in a relatively less polluted area of the city.
He and his Mongolian co-researchers are now studying how pollution affects foetuses and whether using air filters could reduce the impact; Ulan Bator's public health institute has warned of a sharp increase in birth defects in the capital as well as a 45% rise in the number of patients with respiratory illnesses between 2004 and 2008. The World Bank has estimated that pollution-related health problems cost the country £290m annually.
Dr Byambaa Onio, vice-director of the Bayanzurkh district hospital, arrived in the capital 46 years ago, when it was "a nice, clean city"; now the pollution levels are "disastrous", he said – and are producing a growing number of patients.
Like many of the capital's residents, he and his wife rarely open the windows in winter. But when they set up an air purifier at home, to test how severe the problem had become, they were shocked to see how dirty the filter became in just two days. "We've continued to use the purifiers, so my wife and I are breathing clean air – but others don't," he said.
Nor do others have the option to buy their children masks and decamp to a home outside the city at weekends, as the couple do, he notes. The residents of ger districts are hit twice over: pollution levels can be double those of the city centre, and they cannot afford to take evasive measures.
Joint research by the World Bank and National University of Mongolia suggests that halving ger stove emissions could cut year-round levels of the larger PM10 particles by a third. Foreign donors and Mongolian authorities have spent millions of dollars subsidising the distribution of 128,000 "clean" stoves in the last year and attempting to step up the production of clean fuels.
Galimbyek Khaltai, deputy head of the city's air pollution agency, says PM2.5 levels have already fallen by around 25% since the programme began. Other experts believe it is too early to judge its effectiveness because the monitoring network is not rigorous enough and unusually high levels of wind and snow last year are likely to have affected data.
Jugder Batmunkh is one of the keenest advocates of the stove replacement project. The 63-year-old is raising her grandchildren in a ger district to the north of the capital; last year she developed asthma, which her doctor blamed on pollution.
Disposing of the ashes from gers is easier and cleaner with the new model. When you take the cover off, the ger does not fill with smoke as it tended to do before. But the biggest advantage for her is its efficiency: it uses just half as much coal. Her family burn through just one bag a day now, saving themselves perhaps 45,000 tugriks (£16) a month – in an area where the average income is around 600,000 tugriks.
Most of her neighbours in Bhayan Khoshuu have bought the appliances, but not all are so enthusiastic. Some have heard rumours that the new stoves might explode; others are unimpressed by their performance.
Twenty-two-year-old Nadmid Rentsenosor's recent purchase is standing idle. "It takes too long to heat up, so it warms the place much more slowly – we are still using the old one instead," she said.
The city is launching a two-month campaign to show people how to use the stoves and minimise emissions. But even if officials can persuade everyone to adapt, the resulting fall in pollution will be vulnerable to fresh shifts in Ulan Bator's development. As its economy grows, construction projects are under way around the city, churning up dust, and more vehicles sit in traffic jams on the streets. The city's population continues to swell and another bitter winter could bring a fresh surge of migrants to the ger districts; many of the current residents moved to the capital from desperation when their livestock died in extreme weather conditions.
"Clean stoves reduce air pollution, but that's a short-term project. Our long-term project has to be to build affordable apartments," said Galimbyek of the air pollution agency.
The scale of demand is daunting and the quality of new buildings will be as important as the quality. Much of the city's housing dates from the Soviet era: it lacks double glazing and in many cases has just 5mm of basic polystyrene insulation on the concrete walls, said Graham McDarby of Gradon Architecture, a British firm now working on flats in the city. Raising current building standards to European levels could dramatically improve energy efficiency. "If you've got quality insulation and it's air-tight, the family in there will generate enough heat," he said.
The country also has its first wind farm, not far from the capital. There are ambitious plans for a new subway system, which should help cut traffic pollution.
But the ultimate problem, said Galimbyek, was that there were simply too many people in the capital: its size has tripled since 1979 and it has over a third of the country's population. It is where all the universities are located, and much of Mongolia's employment. To make Ulan Bator a healthier place, he believes, it has to stop mushrooming, which means that rural areas have to be developed instead. That might sound like a radical prescription, but drastic changes are needed. "For years we thought the effects of air pollution fell on a straight line: if you reduced it by 10 units, it didn't matter whether you were at the higher or lower end. What we seem to be learning more recently is that it is a curve, not a straight line, and actually you get the biggest bang for your buck in lower [pollution] conditions," said Allen.
"In a city like Ulan Bator you would actually need to have quite a dramatic reduction in air pollution before you started to see really good improvements in public health."
The Asia Foundation and the Ulaanbaatar City Municipality Present Results of Joint Community Mapping Initative In Ger Areas
Ulaanbaatar, Mongolia, October 18, 2013 (The Asia Foundation) — On October 18 at Khangarid Palace, the Mayor's Office and The Asia Foundation presented the results and analysis of their joint community mapping initiative in the ger areas to various officials from the City Municipality.
In May 2012, the Foundation started implementation of the Urban Services Project (USP) funded through its Strategic Partnership with the Australian Agency for International Development (AusAID). Launched as a pilot project in 11 khoroos of UB ger districts, the Foundation and the City Municipality initiated community mapping in ger areas as part of an effort to introduce an inclusive approach to urban governance and improve urban services available to residents. The results provided local residents, khoroo, district, and city officials with a clear understanding on the process, application, and importance of community mapping.
Recognizing the potential of community mapping, Capital City Governor and Mayor of Ulaanbaatar city, Mr. E. Bat-Uul, requested that the Mayor's Office, with the support of the Foundation, scale up community mapping to all 87 khoroos in the ger districts. In accordance with the Mayor's Resolution and through a joint effort by the Mayor's Office, the City Investment Agency, and the Foundation, the process of community mapping of 87 khoroos has been completed.
Community mapping has important implications for identifying the accessibility and coverage of public services in ger areas. This spatial analysis accurately maps the availability and accessibility (based on population size) of indicators such as water kiosks, kindergartens, schools, and health centers at khoroo and district level. It serves as an important tool to facilitate community discussion on improving ger area services and increase participation of local residents and community leaders in the decision-making process. Community mapping also serves as a mechanism for creating evidence-based investment decisions by prioritizing needs in terms of service delivery to the gerarea residents.
The results and analysis of the ger area community mapping will be employed as a decision-making tool in the discussions on the Ulaanbaatar city 5-year investment plan and the 2014 budget deliberation. The Foundation will support the city in making community mapping a sustainable tool, including through the development of a website. This online resource will be designed with the goal of making community maps available for local and regional city municipality offices, and enable UB citizens to print and comment on maps. The Foundation will continue its support to the city management to use the maps as a means to improve strategic planning and policy making to foster inclusive urban governance.
Discovery Channel's Don't Drive Here S01E06: Ulaanbaatar
Half of Mongolia's population lives in the capital of this horse-loving country. And they drive their cars like they ride their horses: fast and furious. Just five per cent of the roads leading from Ulaanbaatar are paved. That means, potholes, sinkholes and, did we say potholes? Host Andrew Younghusband learns to drive on the addled downtown streets and how to cross the street in a place where tourists are simply told: don't cross the street.
Most of the city's population live in fur-lined tents called gers, and Andrew's next task is to navigate through the winding and confusing roads of the ger district. Hopefully what he's learned will help him in the next dangerous challenge: crossing the thawing River Tuul in a truck to deliver hay to a farmer - and if he can't make it, he'll have to make the journey on horseback!
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Company wins auction for Chongryon's Tokyo office with 5 bil. yen bid
October 17 (Kyodo) A company rumored to be of a Mongolian origin has won an auction to acquire the Tokyo headquarters site of the pro-Pyongyang General Association of Korean Residents in Japan, known as Chongryon, for 5.01 billion yen, the Tokyo District Court said Thursday.
The successful bidder was named as "Avar Limited Liability Company," but detailed information such as its location and the name of its representative remain unknown.
The bid is due to receive the court's final approval on Tuesday.
Chongryon, which serves as North Korea's de facto diplomatic mission in Japan in the absence of diplomatic ties, could be forced to move out of its head office if asked to do so by the successful bidder.
Only two parties submitted bids in the second round of the auction held from Oct. 3 to 10, court officials said.
Japan has asked Mongolia, which has diplomatic relations with North Korea, to cooperate in resolving the issue of Japanese nationals abducted by Pyongyang in the 1970s and 1980s. Mongolia hosted talks between senior diplomats of Japan and North Korea in the capital Ulan Bator in November last year.
In Ulan Bator on Thursday, a man who claims to be the president of Avar Limited Liability Company effectively acknowledged that the company had won the bidding.
"I don't think you have wrong information" about the deal, the unidentified man told Kyodo News over the telephone.
Kyodo contacted him through a mobile phone number listed in official registration information.
Asked whether he is president of the company, the man said, "Yes."
However, an Ulan Bator official said the company's address listed in the information does not exist.
In the first round of the auction earlier this year, a Buddhist temple in Kagoshima Prefecture offered the highest bid of 4,519 million yen for the 10-story head office with two basement floors and the 2,387-square-meter tract of land in Tokyo's Chiyoda Ward, but it failed to pay the bid price by the deadline and was eliminated in the second round of the auction.
The temple's chief priest is known for maintaining close ties with senior officials of the North Korean government and Chongryon.
The court decided in July 2012 to hold an auction for Chongryon's headquarters as demanded by the Japanese government-backed Resolution and Collection Corp., which is owed about 62.7 billion yen by Chongryon following the collapse of financial institutions in Japan for pro-North Korean residents.
Mystery Mongolian firm buys pro-Pyongyang organization's headquarters – The Japan Daily Press, October 18
Chongryon Building Sold to Mystery Mongolian Firm – The Chosunilbo, October 18
Chongryon Tokyo HQ auctioned for ¥5 bil. – The Jiji Press, October 18
Formal Reception Held in Ulaanbaatar To Mark Mongolia-DPRK 65th Anniversary of Diplomatic Relations
October 18 /www.infomongolia.com/ Commemorating the 65th anniversary of diplomatic relations established between Mongolia and the Democratic People's Republic of Korea, Minister for Foreign Affairs of Mongolia L.Bold hosted a formal reception at the Ministry October 15, 2013.
At the reception, Deputy Speaker of the State Great Khural (Parliament) Mr. R.Gonchigdorj, Minister for Culture, Sports and Tourism Ms. Ts.Oyungerel, Ambassador Extraordinary and Plenipotentiary of the Democratic People's Republic of Korea to Mongolia Mr. Hong Gyu and other officials were present.
In his speech, Minister L.Bold mentioned that this year the two countries are commemorating the 65th anniversary of diplomatic relations and the 25th anniversary of a historical visit of North Korea's Supreme Leader Kim Il-sung to Mongolia held in 1988, and expressed his confidence that the Mongolia-North Korea traditional friendly relations, trade and practical economic partnership would be strengthened and the bilateral cooperation would be also broadened on the international and regional arenas.
In response, North Korean Ambassador Hong Gyu gave appreciation for the affair and expressed that his country is proud of the Mongolian Government and its people's success achieved, moreover he stated that the bilateral relations of the two countries would deepen more despite of internationally complicated situations.
During the event, a photo exhibition and a documentary about the visit of North Korean Leader Kim Il-sung to Mongolia were shown for the guests.
Mongolian prime minister expects improvement of relations with China
October 20 (Xinhua) Mongolian Prime Minister Norov Altanhuyag, in a recent interview with Xinhua prior to a scheduled visit to China, said he expects improvement of relations between his country and China in multiple fields.
Mongolia and China will strengthen cooperation in trade, political, security and other areas while bilateral economic and trade cooperation are expected to reach a new level, said Altanhuyag.
At the invitation of Chinese Premier Li Keqiang, Altanhuyag will officially visit China on October 22-26.
On future cooperation between two countries, Altanhuyag said Mongolia and China will formulate long-term strategic partnership development outlines, and strengthen cooperation in the fields of trade, politics, defense, security, etc., especially economy and trade.
Altanhuyag believes that Mongolia is located in a junction between Asia and Europe, and closely connects China with Europe and other parts of Asia by railways, roads and other links.
Mongolia supports China in strengthening economic and trade ties with Central Asian countries, and will also actively participate in the construction of a "Silk Road Economic Belt", according to Altanhuyag.
Altanhuyag expects Chinese entrepreneurs to choose to invest in Mongolia. He said that tax rates in Mongolia are lower, and the new investment law passed by the State Great Hural (Parliament) this month will help to stabilize the level of taxation and the investment environment, which will relieve investors from worries about possible uncertainties arising from the investment environment in Mongolia.
In June 2011, China and Mongolia set a strategic partnership. Statistics show that in 2012, bilateral trade volume reached $6.6 billion. China has been Mongolia's largest trade partner and investor country for many years.
President of Poland arrives in Mongolia for state visit
October 21 /www.news.mn/ The President of Poland Bronislaw Komorowski, who is visiting Mongolia on the invitation of President Ts.Elbegdorj, landed at Chinggis Khaan airport in Ulaanbaatar Mongolia this morning.
During the state visit, President of Poland Bronislaw Komorowski will have official talks and an individual meeting with his counterpart President Ts.Elbegdorj.
President Bronislaw Komorowski will see speaker Z.Enkhbold and Prime Minister N.Altankhuyag respectively. President Bronizlaw Komorowski will be welcomed at the Ceremonial Hall of Government house at 10.00 am today.
The schedule for the state visit is as follows:
9:00 Land at Chinggiskhaan airport
10:00 Individual meeting between President of Mongolia, Ts.Elbegdorj and President of Poland, BronislawKomorowski (Ceremonial Hall of the Government house)
10:15 Official talks between President Ts.Elbegdorj and President BronislawKomorowski (A Hall of Government house)
11:00 President Ts.Elbegdorj and President BronislawKomorowski will hold a press conference with media (Ceremonial Hall of the Government house)
11:15 President BronislawKomorowski will receive Prime Minister of Mongolia, N.Altankhuyag (A Hall of Government house)
11:35 President BronislawKomorowski will meet with Speaker of Mongolian Parliament, Z.Enkhbold (A Hall of the Government house)
11:55 President Ts.Elbegdorj and President BronislawKomorowski will be present at the Mongolia-Poland business forum and make speeches (Ministry of Foreign Affairs of Mongolia)
14:30 Depart from ChinggisKhaan Airport
Mongolia and Poland to Cooperate in Mining Sector
Ulaanbaatar, October 21 /MONTSAME/ Mongolia's Minister of Mining Mr D.Gankhuyag and Minister of Economy of Poland Mr Janusz Piechocinski have inked the Declaration of cooperation in mining sphere.
The ceremony took place Monday in frames of the Polish President's visit to Mongolia.
The two Ministries intend to expand an economic cooperation in a way of renewing machines, mechanisms and hi tech in the mining sector, innovating new techniques, running professional analysis in a development of the mining, and training specialists.
US reaffirms strong support for Mongolia request for an OSCE field presence
Statement on Mongolia's Presidential Election, as delivered by Ambassador Daniel B. Baer to the Permanent Council, Vienna, October 17, 2013
October 17 (US Mission to the OSCE) The United States would like to take advantage of the recent release of the final report of the OSCE/ODIHR Election Observation Mission to once again congratulate the people of Mongolia on their June 26th Presidential election. As the report makes clear, the election was peaceful, voter participation was high, and the election was generally conducted in a free and fair manner in accordance with the Mongolian constitution. It is particularly noteworthy that on election day, members of the Observation Mission gave a positive assessment to 99 percent of the polling stations observed – a true testament to the dedication of Mongolia's public servants to ensure the integrity of Mongolia's electoral system. These elections demonstrate Mongolia's continued commitment to the further development of the principles of democracy and free and fair elections.
Of course, the final report highlighted several areas for Mongolia to focus on improving in order to fully meet its OSCE commitments. Notable recommendations cover areas such as media and freedom of expression; election administration; and maintaining the secrecy of the ballot. The United States encourages Mongolia to implement all of the Report's recommendations, and we encourage ODIHR to assist Mongolia in this effort where appropriate.
We thank the government of Mongolia for its close cooperation with the Election Observation Mission. After more than two decades of impressive democratic and market economic transformation, Mongolia continues to serve as a positive example for emerging democracies around the world. However, not content to rest on its laurels, Mongolia continues to work hard to strengthen its democracy. This report will serve as an important tool for Mongolia to achieve this goal.
Finally, the United States is proud to have contributed election observers to this mission. We express our appreciation for the wide-range of support to the election provided by other participating States as well. We would also like to thank ODIHR for organizing an unbiased and professional monitoring team. Being the first such ODIHR mission in Mongolia presented several logistical and organizational challenges, from mapping the location of polling stations to identifying enough qualified interpreters. The Mission overcame these challenges and provided a valuable service to the OSCE's newest participating State.
Mr. Chairman, I would like to take this opportunity to reaffirm the United States' strong support for Mongolia's request for a Field Presence in Mongolia. We believe that this request should be given due consideration in the near term and – as has been our past practice – the OSCE participating States should not deny such a request.
Thank you, Mr. Chairman.
Jargal De Facto: 'Rough neighbor' of Brussels
By Jargalsaikhan Dambadarjaa
October 20 (UB Post) Mongolia has two big neighbors: Russia and China. Since the democratic revolution, we have been calling the United States, Japan, the European Union, the Republic of Korea, India, Turkey and many other countries our "third neighbors". Mongolia established bilateral agreements with most of its "third neighbors" to further develop partnerships and expand cooperation, and regularly holds high-level meetings with them.
Our government has been repeating the discussion on attracting more investment into our economy and has explained that the concept of "third neighbors" is more political rather than geographical, which is fairly obvious. Due to the lack of implementation of what has been agreed upon with "third neighbors," Mongolians have been unable to seize the opportunity to fully realize the advantages of fostering cooperation with them to learn as much as possible.
Mongolia's foreign policy must continuously bring substantial contributions to our economy as well as the livelihood of our people. It is apparent from our experiences of past years that our "third neighbor" policy is not as productive as it may sound unless democratic values are fully reflected in our social life, public governance is improved, and the market economy is enhanced by creating free and fair competition in the private sector.
Every single one of our third neighbors has been advising us to strengthen the rule of law, improve public governance, ensure transparent operations of government institutions and improve their efficiency, hire public workers based on merit instead of political connections, and combat corruption throughout the country.
Our politicians and high ranking officials always accept these advisements and promise to implement them, but seemingly forget about them as soon as their meeting or visit has concluded. If at least half of what was discussed in high-level meetings held by our government came true, Mongolia would not be ranked 94 out of 174 countries on the 2012 Corruption Perceptions Index, and our mining industry would be benefitting the majority of Mongolian people rather than a privileged few.
Nevertheless, our third neighbors have not lost their faith in Mongolia and continue to remind our leaders about the changes that need to be made every time they get the chance. What they are recommending benefits Mongolians more than it benefits them.
Let us expand on the case of the European Union to look more closely at how our third neighbor policy is working. The European Union, which has 28 member countries, is based in Brussels, Belgium. It helps developing countries implement policy aimed at reducing and eventually eradicating poverty. In 2011, the European Union provided 53 billion EUR (more than 72 billion USD) in assistance to developing countries, almost twice the amount of financial support granted by the United States.
The European Union has been providing development assistance to Mongolia since 1993. It spent 30 million EUR on reducing poverty in rural areas and the prevention of and recovery from natural disasters like drought and dzud, from 2007 through 2013. They revisited their policy of cooperation with Mongolia in 2011 and started putting more emphasis on providing technical vocational education training in rural areas and supporting the economic management of the mining industry.
This year, the European Union has started working out its strategy of cooperation with Mongolia for 2014-2020. Mongolia and the European Union signed a Partnership and Cooperation Agreement (PCA) in April 2013, which creates an opportunity for us to make quality improvements in our politics, economy, culture, human security, civil society and other spheres. When the European Parliament ratifies the PCA, and Mongolians strictly adhere to it, a great chance to see substantial results from our "third neighbors policy" is open to us.
At the moment, the parties to the agreement are discussing how to implement their project with increased focus on strengthening the rule of law, improving standardization, fostering cooperation on research and innovation, and increasing food safety. In order to achieve these objectives, Mongolia will need to learn from and work together with European Union member countries.
If Mongolia manages to take on the task wisely, and directly introduce European standards in some of our industries, our country will be able to take one giant step towards development. For example, if we accept all specifications of medical drugs and other medical substances licensed and sold in all EU member countries, Mongolia could decrease a lot of administrative costs related to import permission and cut wasteful corruption spending . Moreover, if we immediately introduce European standards in building and road construction and materials, industry efficiency will improve greatly and Mongolians could enjoy world class quality. When widespread corruption is gone, the only administrative costs will be valid ones to monitor and evaluate the implementation of those standards.
In the political sphere, lessons learned from the European Union might help us reduce costs and prevent unnecessary disputes nationwide. For example, we could ban political parties from constructing fancy palaces for themselves with public money, recover the Independent Palace of the Mongolian People's Party and allocate the building's space to political parties represented in the parliament.
If we could only implement the government performance monitoring and evaluation systems used in European countries, the unfair acts and level of corruption in Mongolian government would decrease significantly. Public property would be properly registered and overseen. It would lead to many government employees leaving public service on their own.
Adapting European experience to our media sector will allow the press that makes up the "Fourth Power" in a democracy to fulfill its most important role: monitoring good governance and justice in Mongolia.
Our media must adhere to the ethics of journalism and become truly independent and competitive. To achieve this, we should learn from the European Union and develop good regulations that closely tie the media sector with ever-growing trends in digitalization.
Currently, the ever-disappearing differences between television and the online world, content creation and transmission, and communication and broadcasting, are limiting the proper implementation of media regulation. Regulations to prevent dominant players from monopolizing a market and having media content reach all parts of the country without discrimination is needed.
In order to maximize the benefits of our third neighbor policy, Mongolia has another option in addition to introducing European quality to improve our economy, governance and the livelihood of people. Mongolia could also become a member of the Organization of Economic Cooperation and Development (OECD). Admission to this organization was a very significant part of the rapid economic development seen in Japan, Korea, Chile and many other countries. OECD member countries vastly cooperate with one another in economic and social spheres, including collaboration between hospitals and schools. For instance, an education institution in an OECD member country acknowledges a university degree acquired from any other OECD member country.
However, people are more interested in the substantial outcomes of cooperation rather than just becoming a member of another international organization.
Striving to witness concrete improvements in their lives and strengthen their country's competitiveness, Mongolians are demanding that the government work more efficiently to produce actual results from its "third neighbor" policy.
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Mongolia's nomads turn to private land
October 21 (AFP) Mongolia's nomads have roamed its sprawling grasslands for centuries, pitching their yurts wherever they find pasture for their animals, but now Tsogtsaikhan Orgodol is staying put as part of a scheme to tackle chronic overgrazing.
The tanned 53-year-old still wears his nomad's riding boots, but he and his community have been given exclusive rights to 1,000 hectares (2,500 acres) of steppe in exchange for reducing their herds and remaining in the same place all year round, giving the land a chance to regenerate.
"I have agreed to cut the number of our goats in half," said Orgodol, looking out from horseback over their 200 animals, mostly sheep and some cows, who despite the project principles are not fenced in.
"The only problem is when other animals come," he added. "They sense where the good grass is. We have to chase them away. There is no other mechanism."
According to MCC's website, the project will cover about 300 tracts of land near Ulan Bator and Mongolia's next two largest towns, Erdenet and Darkhan, involving around 1,000 households in total.
Orgodol's 22-strong group shares two yurts, known as gers in Mongolia, and a permanent house next to a barn about 45 kilometres (30 miles) outside the capital Ulan Bator.
The national tradition is for land to be accessible to all, with pastoralist families moving several times a year in search of fodder and water.
But Nyamsuren Lkhagvasuren, who runs the land programme for the US-funded aid agency Millennium Challenge Corporation, told AFP: "The number of livestock has exploded to more than 40 million.
"This goes beyond the limits of what is reasonable, even for Mongolia, which is a vast country."
In a study published last month in the journal Global Change Biology, researchers from the University of Oregon using satellite images from NASA found that 70 percent of Mongolia's grassland -- which makes up almost four-fifths of the country -- is now "degraded".
Twelve percent of the country's biomass has disappeared in recent years, they said, calling overgrazing a "primary contributor" to the alarming decline of the steppe.
Livestock was collectivised under the socialist planned economy imposed under decades of Communist dictatorship when Mongolia was a satellite of the Soviet Union.
But since the advent of democracy and a market economy in 1990 many Mongolians have returned to their sheep and cattle -- partly because unemployment shot up -- so that 40 percent of the working population are now herders.
Agriculture Minister Battulga Khaltmaa -- a former judo champion -- acknowledged concerns about desertification but downplayed the University of Oregon findings, attributing the problem to climate change rather than overgrazing.
"The number of animals is not that high compared to the size of the land," he said.
In the Soviet era even greater numbers of cattle roamed the country of 1.6 million square kilometres, he pointed out.
"Under socialism we had 26 million livestock and under Stalin the target was set at 250 million in order to meet the demand for meat in Siberia."
But herders who cannot command high prices resort to selling large quantities instead, said Thomas Pavie, an agriculture expert who advises French government projects in Mongolia.
"There is indeed overgrazing, especially in the production of cashmere. The problem is that Mongolia exports wool in the form of raw material, particularly to China, so the value-added happens somewhere else," he said.
"That requires them to produce a lot. If wool were sold more expensively, they would need fewer animals."
For Bataar the dinosaur, road home to Mongolia ran through U.S. courts
October 21 (Al Jazeera America) --
Who is Bataar?
Only the biggest hero you've never heard of … until now.
Bataar is from Mongolia, a place with a long history of conquering heroes.
Think Genghis Khan. And if you are up on more modern Mongolian history, the current president, Elbegdorj.
Not familiar with Elbegdorj? I wasn't either, until I met with him last month at the United Nations. (By the way, everyone just calls him Elbegdorj because using a single name is pretty typical in Mongolia.)
Elbegdorj is a pretty exceptional guy. He came from a traditional herder's family, riding the steppes. He ended up studying journalism at university in the Soviet Union and later went on to create Mongolia's first independent democratic newspaper and TV station.
But he's made his biggest footprint as president of Mongolia. You might wonder how big a deal it is for Elbegdorj to be re-elected earlier this year, but think about what he is up against. For one thing, his country is sandwiched between China and Russia, two of the world's biggest superpowers. Mongolia was always on those "one of the poorest countries in the world" lists until just a few years ago.
But all of a sudden, the world seems to have discovered Mongolia's vast mineral wealth. And while that might seem to be a good thing—vaulting Mongolia into the "one of the world's fastest-growing economies" lists— it creates all kinds of problems for this remote, land-locked country.
There's sudden wealth, with a Louis Vuitton store even arriving in Ulan Bator, the capital. Then, there's the massive pollution risk created by the sudden population spike for those living in the ger settlements outside Ulan Bator, known locally as "U.B." The Mongolians living in these round structures, better known as yurts in the U.S., often use coal-burning stoves for fuel and heat.
There's also the exploitation of fossils, something Mongolia has more of than any other country in the world.
And not just any fossils. We're talking fossils of dinosaurs from 150 million years ago.
That is where our story about Bataar begins. Who is Bataar? We'll introduce you to him in the videos above.
Plundering Science, Bone by Bone
October 21 (The New York Times) It is the dinosaur version of grave robbing: fossil poachers plundering a paleontological dig, frequently smashing ancient skulls and stealing valuable teeth, claws and feet.
Often, all that remain are shards of fossilized bone and a wrecked, irreplaceable scientific record. And in cases where poachers excavate an entire skeleton and spirit it away to illicit entrepreneurs or collectors, it is as if the bones, buried for millions of years, were being dug up only to be hidden away again in private collections.
"This is huge," said Catherine A. Forster, a paleontologist at George Washington University who is president of the Society of Vertebrate Paleontology. "It isn't just one or two specimens. A fair proportion of very good fossils just disappear from knowledge, and few are ever seen again."
And while some scientists hoped that a high-profile legal case in New York last year over the $1 million sale of a rare Mongolian dinosaur would curb the illegal digging, that does not appear to have happened. Mark A. Norell, chairman of paleontology at the American Museum of Natural History in New York, said a visit to the Gobi Desert over the summer made clear that poaching continues "in a big way."
Philip J. Currie, a paleontologist at the University of Alberta, says he has determined that 98 skeletons of the dinosaur, Tarbosaurus bataar (sometimes called Tyrannosaurus bataar), were destroyed or removed by poachers in Mongolia. Fewer than a dozen are in scientific hands, he says. And he has counted many other plundered fossil skeletons from the Gobi, including 86 ostrichlike dinosaurs. (It has been illegal to remove fossils from Mongolia since the 1920s.)
Although the age of the dinosaurs lasted about 165 million years, their skeletons are relatively uncommon: only about 3,000 are known to exist. About 1,300 dinosaur species have been identified, Dr. Norell said — more than half from a single skeleton and perhaps a third from a single bone.
Paleontologists say they are not taking aim at professional fossil finders, who work within the law and dig carefully. They are calling for the patchwork of laws on dinosaur stealing and smuggling to be enforced and tightened around the world, and they are pleading with private collectors to demand proof of a fossil's origins before they buy — just as they would question the pedigree of a painting or an antique.
Otherwise, the scientists say, valuable entries in the earth's book of life will be lost forever, including information about exactly where the fossils were found, what geological formation the creatures were in, how they were lying in the ground, how they were discovered and precisely when they lived, not to mention what surrounded them at death.
"I'm saying, 'Ask for provenance,' " Dr. Norell said. "It worked in the art world, but it hasn't hit the fossil world."
The Association of Applied Paleontological Sciences, a professional group representing private commercial fossil collectors and dealers, is also encouraging its members to educate themselves and the public on the legality of the specimens.
The modern-day fossil rush began in earnest after the Field Museum in Chicago paid $8.36 million in 1997 for Sue, the most complete T. Rex skeleton ever found, said Kenshu Shimada, a professor at DePaul University in Chicago who is chairman of government affairs at the paleontology society. Shortly after, the phenomenon of online buying and selling through sites like eBay took off, opening up global markets for fossils.
Dr. Shimada said the society became so concerned about the extent of the illegal dinosaur trade that it made a survey of "paleo hot spots," gathering information from 20 countries about where fossils are, what laws govern them and how the laws are enforced.
Dr. Currie said the Nemegt Basin, in the Gobi Desert, is a particular concern. It is one of the two best dinosaur sites on the planet, he said, with a diverse range of fossils and thousands of footprints. The 70-million-year-old T. Bataar, for example, was an Asian relative of the Tyrannosaurus rex, and was one of the last dinosaurs to evolve, one of the most sophisticated and one of the most dangerous — yet much of its life cycle remains unknown.
"One of the most spectacular sites for understanding dinosaurs in the world is now being destroyed by poachers," Dr. Currie said.
The dream, he said, is to explore the basin as an ancient ecosystem, learning how dinosaurs interacted with one another and their environment. Many puzzles remain. For example, scientists would expect to find far more plant-eating dinosaurs than meat eaters in one layer of the basin, yet the remains of carnivores predominate. Why?
While the Mongolian government's successful lawsuit over the T. Bataar skeleton did not end poaching, it has had other effects. The sale was voided, and the smuggler, Eric Prokopi, a fossil dealer from Gainesville, Fla., pleaded guilty in a criminal proceeding and awaits sentencing. The skeleton was returned to Mongolia in May.
As a result, the country has set up its first dinosaur museum, in the capital, Ulan Bator, with the repatriated skeleton as the starring attraction, said Minjin Bolortsetseg, its new chief paleontologist. Twenty-two more Mongolian fossils are due to be repatriated soon.
But Dr. Bolortsetseg said that until the Mongolian government protects fossil sites, involves local governments in policing them and educates the public about the historical value of the fossils, the looting is unlikely to stop.
A version of this article appears in print on October 22, 2013, on page D6 of the New York edition with the headline: Plundering Science, Bone by Bone.
Mongolia – where it's the boys who struggle to get an education
October 18 (World Vision) Mongolia is a unique part of the world. Landlocked between Russia and China, it has temperatures that range from minus 30 degrees in winter to 40 degrees in summer and a culture of nomadic herding that sustains half of the country's population.
It also stands out as one of the few places in the developing world where girls are more likely to receive an education than boys.
In a culture that survives on labour, girls are seen as weak and sent to school while boys must often stay at home and work on the farm.
Traditionally, Mongolian boys attended vocational schools rather than high schools.
But most vocational schools closed down during Mongolia's transition from communism to democracy in the 1990s. Now, because of the higher value placed on experience than education, many boys are kept at home to help on the farm.
And yet it's more important than ever for boys to get an education. With the due to climate change and other 21st century challenges, it's important that all Mongolian children are equipped with an education and useful skills to face the changing future.
World Vision is partnering with the Mongolian government to provide informal schooling to the children of nomadic families, especially those who have missed out on school in the past.
The informal classes take place during the day and give students the chance to catch up on general school subjects. The program also offers vocational training including carpentry and leather work.
The informal school is also more flexible than a normal school. This is very important as nomadic families work according to the season which means that boys might not be able to go to school at all during the busy summer, but can study for months in the winter.
World Vision supports this program by providing teaching materials and equipment such as books and computers. Our field staff also provide on-the-ground support, teaching parents about the importance of sending both boys and girls to school and providing students and their families with extra things such as warm clothing and hygiene kits when needed.
For boys like 13-year-old Munkhjargal, the informal classes have been a second chance to get an education.
When his mother died six years ago, Munkhjargal dropped out of school and started working with his father on their farm. He missed learning but continued to fall behind in his education.
Two years ago, his father Lkhagvasuren heard from a friend about World Vision and the work they were doing in the community, supporting government-run informal classes. Lkhagvasuren encouraged his son to attend.
Munkhjargal loves the informal school and is now in 5th grade. He enjoys learning maths and Mongolian language as well as drawing pictures with his best friend.
Mogi: awesome story
Head of the Charles uncharted water for Mongolian rowers
October 18 (Boston Globe) Back home in Ulaanbaatar there was no word for what they do. So Dulguun Baasandavaa and Tuvshinzaya Gantulga had to invent one — "Urt Seluurt Zavi".
"Long-oar boating," says Gantulga.
Mongolians are terrific wrestlers and boxers and judokas, but they don't sweep and they don't scull, except maybe on an ergometer. Until Baasandavaa and Gantulga formed it, there was no Mongolian Rowing Association and they are its only members.
On Saturday afternoon, they'll make their competitive debut in the Head of the Charles Regatta, which is something akin to learning how to drive at the Daytona 500. Since they're too old for the youth double and too young for the master events and don't qualify for the parent/child or mixed doubles races, the 28-year-old Baasandavaa and 25-year-old Gantulga will be lining up in the championship event with the Americans and Canadians.
The way Baasandavaa and Gantulga figure it, if you're going to dip your oar in, why not do it at the world's most fabled Head race? "Before coming here I told my Mom, 'There's this great big race in Boston and I'm going there,' " says Gantulga. "And she said, 'Oh, you mean just like those Jamaicans going to the Olympics?' "
The Jamaican bobsledders, whose Calgary initiation resembled the Marx Brothers trying to catch a cab, captured the planet's imagination and Baasandavaa and Gantulga have done the same in their landlocked homeland, which is wedged between China and Russia.
"It's not only a milestone for the association, it's a milestone for Mongolian sport," reckons Gantulga, who works for the American Chamber of Commerce back home. "Mongolians being able to participate in a sport where 99.9 percent of the population doesn't know anything about it says something."
What the Mongolians know about is combatives, which is where they won all five of their medals at last year's London Olympics. "I read somewhere that Mongolians excel at sports that are individual and potentially could harm the other side," says Gantulga. "So this is something very new for Mongolia."
Their 29-member team at the Games had only four athletes who didn't punch, grapple, or throw opponents, or shoot arrows or bullets. Two of them were marathoners and two were swimmers who stopped at 100 meters. If they hadn't gone to college in the States, Baasandavaa and Gantulga probably never would have known port from starboard.
Baasandavaa, who works for the TenGer Financial Group, went to Connecticut College in New London, Conn., where the crew rows on the Thames River, where Harvard and Yale have their annual 4-miler. Gantulga, who was a student at the European College of Liberal Arts in Berlin, spent his junior year abroad at Franklin & Marshall College in the heart of Amish country in Pennsylvania. "I'd seen photos on Facebook of Dulguun rowing and always had wondered how it feels like," he says. "I tried it, and I absolutely fell in love with it."
So he and Baasandavaa began talking last year about racing in the Head, even though they had no boat, no boathouse, and nowhere suitable to row. The Tuul River runs through Ulaanbaatar, but it might as well be a ticket to an amusement park ride.
"That river is too fast and too shallow, so we can't row in that," says Baasandavaa. "We can probably row at the risk of crashing our boat."
Lake Ogii is rowable, but it's a couple hundred miles away.
The most sensible route was simply to come to Boston and take to the Rivah, so they took a few weeks off from work and made the 16-hour trip via Seoul and New York. Baasandavaa and Gantulga rented an apartment on Market Street in Brighton, from where they could walk to Community Rowing's boathouse, where they use a shell borrowed from Boston College. For the last fortnight, they've done two 15-kilometer workouts a day, down to the MIT boathouse and back, and they'd do three if their blisters allowed.
The way the Mongolians see it, their practice pulls are a magical mystery tour of King Charles's fabled waterway, with its bridges and shoreside foliage and the Boston skyline and the Harvard crew cruising past.
"To me the best part is not necessarily the race itself, but just being on the Charles River is fantastic," says Gantulga, whose girlfriend is a Harvard graduate student.
For Baasandavaa, the Head will be a dream deferred. When he was a senior he was odd man out for his college four that raced here. "I was the fifth member, the benchwarmer," Baasandavaa recalls. "We had three fours, but only one entry. I raced for seats and lost. It was pretty devastating. No one got hurt or got sick, so I was on the shore."
This time he and Gantulga will have bow number 8, going off between the Coconut Grove Rowing Club and Dawson College from Montreal. They have absolutely no idea what to expect from an event that historically has been described in Homeric terms, for both good and ill. They've heard about how the Peking University eight abandoned ship a few years ago after swamping at the Eliot Bridge. "I've seen the picture of the coxswain standing," says Baasandavaa.
The Jamaican bobsledders came back from Olympus with their heads still attached to their bodies and, with time, became reasonably proficient. For puzzled countrymen who've only recently learned what long-oar boating is, a trip to the Head of the Charles might as well be a voyage to Jupiter.
"I don't think many people understand the difficulties of coming here and the rigor of the race because they don't know what rowing is," muses Baasandavaa.
Their Boston pilgrimage already has attracted media attention back home, where the reaction generally has been: Good luck and don't sink.
"Everyone at home has been incredibly supportive," reports Gantulga. "No one gave us a weird look."
The important thing is that the world sees Mongolian scullers paddling alongside Yanks and others in a sport that does not involve close-quarters action, at least not intentionally. The world championships can wait for another year.
"It's a good start for the association," says Baasandavaa. "The first international race we are participating — and it will not be the last."
Paula Sabloff: Does Everyone Want Democracy? Insights from Mongolia
October 21 (Exploring Geopolitics) Paula L.W. Sabloff, Professor at the Santa Fe Institute, holds a B.A. from Vassar and an M.A. and Ph.D. from Brandeis University, with a year at the University of Pennsylvania in-between. A political anthropologist, her master's and doctorate were conducted in Mexico. After several years in higher education administration (including Executive Director of the Governor's Commission on Higher Education in New Mexico , Academic Planner for the State of New Mexico , Coordinator of Strategic Planning for UNM [1984-85] and Coordinator of Strategic Planning for the University of Pittsburgh), she returned to anthropological research, this time in Mongolia. Her research focus has remained political culture and behavior, especially patron-client relations, the effect of people's concept of risk on their political thinkings, and their changing ideas on democracy.
The "My New Book" Blog seeks to provide a multidisciplinary angle on the countries and the world we live in. The interviews address the book's key themes, questions and findings. Moreover, the book is put in perspective by linking it to the author's background and existing literature. Overall, the underlying question is: why should we consider reading this new book? Below each interview, you find a form that enables you to ask the author more questions, or share your views on the topics that the book covers.
1. What are the main themes of the book?
The book suggests that everyday people think of democracy in three ways: the ideals, or rights and freedoms that democracy brings, the responsibilities of a democratic government toward its citizens, and the role of citizens in maintaining democracy.
At this point in time, the ideals of democracy appear to be globalized, but how people see the responsibilities of government and citizens varies with their history, culture, present situation and hopes for the future.
2. What are the central questions of the book?
On one level, I ask, is the desire for democracy universal? Does everyone want democracy, as the US government and conservative think tanks assume.
On the other, I ask, how has the concept of democracy changed in Mongolia since the end of socialism in 1989? Does the concept vary by demographic categories?
3. How have you sought to answer these questions?
The book is based on anthropological fieldwork conducted in the summers from 1996 to 2003. It is also based on my volunteer work in some democracy-building workshops and programs, interviews with Mongolian leaders and international NGO workers, and 1,283 open-ended interviews conducted by Mongolian researchers in and around Ulaanbaatar (the capital) and Khovd (a provincial capital west of the Altai Mountains).
The interviewees were people of voting age, urban and rural residence, and both genders. We also gathered data from people of different education levels, ethnic identification, and occupation. I then coded the interviews and subjected them to statistical analysis.
The book interweaves the interviews, ethnographic experience, and archival material into one narrative.
4. What are the main findings of your book?
While the Mongolians interviewed very much want the democratic ideals of human rights, political and economic rights and freedoms, they also want to practice their own kind of democracy. That is, they want a government that is more patron than partner.
This idea comes out of their culture (i.e., the nomadic tradition that stresses independence), socialist experience (acceptance of a passive citizenry and veneration of leaders educated to the job), current situation (adapting to capitalism and the free market), and their hopes for the future (the desire to remain independent of China or Russia, to succeed in a capitalist world, and remain free from government oppression/oversight).
Why this pattern? I suggest that the desire for democracy comes from deeply held values that are practically globalized at this time. These include dignity, justice, hope, and self-determination. In turn, such values arise from some of the universal emotions discovered by psychologists. Anger, fear, and pride in achievement are some.
The people interviewed believe that these deeply held desires are more easily satisfied in democratic than totalitarian governments.
5. What does the book contribute to existing literature in the field?
The book adds to the political literature by focusing on the ideas of common people rather than administrative or political leaders, as most books do. A government cannot adopt democracy if the people are not willing to accept it.
Also, the book shows the connection between universal emotions and political thought.
6. How does the book relate to your own (personal/professional) background?
As a cognitive anthropologist, I am concerned with the linkage between what we share as humans—not only our life trajectory but also how we think and feel—with what makes our way of thinking unique. Studying how people in another country view democracy, a major issue of our time, ought to shed light on the crossroads of what makes us human with what makes us special.
It is a question of universal vs. particular. But it also is a modification of nature vs. nurture, for political ideology comes not only from the past but from attitudes toward the future.
7. What further research into the book's themes would you suggest?
It's not for me to tell other researchers what to do. But I do feel strongly that NGO and international aid workers learn something about the country they are working in rather than just imposing a US-oriented project on people. Such an approach will not be sustainable.
I'd love to do comparative work in another post-Socialist state or even the USA.
Munkhdul Badral Bontoi
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