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Monday, October 28, 2013

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Cover Mongolia

Cover Mongolia CEO Signs The Global Business Oath

October 25 (Cover Mongolia) Cover Mongolia is pleased to announced that its Founder & CEO Munkhdul Badral Bontoi has signed the Global Business Oath, initiated by the World Economic Forum's Forum of Young Global Leaders, on October 18, 2013 at a ceremony marking the Global Dignity Day in Mongolia.

Global Business Oath:

As a business leader I recognize that

·         The enterprise I lead must serve the greater good by bringing together people and resources to create value that no single individual can create alone,

·         My decisions can have far-reaching consequences that affect the wellbeing of individuals inside and outside my enterprise, today and tomorrow,

·         As I reconcile the interests of different constituencies, I will face choices that are not easy for me and others.

So I promise that

1.    I will manage my enterprise diligently and in good faith and will not let personal considerations and compensation supersede the long-term interest of my enterprise and society at large,

2.    I will understand and uphold, both in letter and spirit, the laws and contracts governing my own conduct and that of my enterprise,

3.    I will respect and protect the human rights and dignity of all people who are affected by my enterprise and will oppose all forms of discrimination and exploitation,

4.    I will respect and protect the right of future generations to enjoy a clean and resourceful planet,

5.    I will not engage in nor tolerate bribery or any other form of corruption,

6.    I will represent the performance and risks of my enterprise accurately and honestly to each of the constituencies that are affected by it,

7.    I will actively engage in efforts to finding solutions to critical social and environmental issues that are central to my enterprise, and

8.    I will invest in my own professional development as well as the development of other managers under my supervision.

In exercising my professional duties according to these principles I recognize that my behavior must set an example of integrity and responsible conduct.

This pledge I make freely and upon my honor.

Check out Global Dignity Day in Mongolia video


Overseas Market

Video: Mongolian Prime Minister Optimistic on Rio Mine

Oct. 28 (Bloomberg) –-Bloomberg's Paul Allen reports on the potential resolution of the issues over the Oyu Tolgoi copper and gold mine between the Mongolian Government and Rio Tinto. He speaks to Angie Lau on Bloomberg Television's "First Up."

Link to video


TRQ closed +1.87% to US$4.89 on Friday

Mongolia Closer to Ending Dispute With Rio Tinto on Copper Mine

October 26 (Bloomberg) Mongolia and Rio Tinto Group have resolved some of the disputes that have stalled the expansion of their $6.6 billion Oyu Tolgoi copper mine, a Mongolian board member of the venture said.

"Within the last 10 days we could resolve certain issues; we have reduced the state of urgency," Davaadorj Ganbold, one of three Mongolian nationals on the Oyu Tolgoi LLC board, said in an interview in Ulaanbaatar, adding that some points remain to be agreed on.

"Issues related to cost overrun, the feasibility study and project financing are large and broad issues that cannot be resolved in four or five days," said Ganbold, a board member since September and also executive director at Erdenes Oyu Tolgoi LLC, the company that holds the government's 34 percent stake in the project.

Rio in July delayed work on the expansion, which is expected to cost about $5.1 billion, until wrangles with the government on funding and other issues are resolved. While open-pit work continues, the dispute has led to the suspension of underground construction and the layoff of about 1,700 workers.

The saga has taken its toll on Turquoise Hill (TRQ) shares, which have fallen 34 percent in Toronto over the year to date. It has also hurt Mongolia by weakening investor confidence and delaying other projects. Foreign Direct Investment fell 47 percent over the first eight months of the year.

Dispute Points

London-based Rio, the world's second-biggest mining company by market value, manages the venture through its 51 percent stake in Turquoise Hill Resources Ltd., which owns 66 percent of the mine. Oyu Tolgoi, located 80 kilometers (50 miles) north of the Chinese border, is forecast to account for about a third of Mongolia's economy when in full operation.

Mongolia had listed 30 points of dispute with its partner over the mine. Chief among these have been criticism of cost overruns on the open-pit operation and objections to the mine being used as collateral for the financing of the underground portion.

Facing down problems in a project of this size is inevitable, Ganbold said. Oyu Tolgoi wouldn't be the first big project to experience delays or ownership tiffs, he said.

"The construction of the Panama Canal took 100 years," said Ganbold, who holds a economics from Moscow State University. "How many companies were bankrupted? How many people died? How many financial collapses occurred? But finally the project was completed."

Seeking Guarantees

On Oct. 1, Mongolian board members said the number of outstanding issues was down to 15 following discussions with Rio in London, conceding that some Oyu Tolgoi assets could be used as collateral.

Mongolia has also sought guarantees that the mine expansion won't be subject to cost overruns, a reset of Rio's management fees to be based on revenues earned rather than money spent, and a pledge that all money raised against Oyu Tolgoi assets be spent within the country.

"No one wanted to see any cost overrun or project delay," Ganbold said. "No one wanted to see any decreasing of the profits and benefits. But life is life and that is why we have to solve these issues."

Issues related to water use, transportation of the concentrate, exports to China and company management are closer to resolution, said Ganbold.

"Both sides are being very tolerant and cooperative towards each other," said Ganbold, who was deputy prime minister from 1990 to 1992. "Solving one thing may bring some movement or success in other items."

Financing Package

Resolving the terms of the $4 billion project financing package remains the biggest hurdle as development of the second phase of the mine relies on another influx of cash. The deadline to approve the financing comes due on Dec. 12.

Ganbold declined to comment on the deadline, saying that details of the financing are in the hands of the investors.

The second phase of the mine includes extensive underground tunneling needed to reach the richest parts of the ore body. The open pit section currently in operation will only yield about 20 percent of the mine's overall wealth.

Commercial production at the mine started in July although Chinese customs delayed deliveries to customers for over three months before releasing the first batch of concentrate from a bonded warehouse in China earlier this week.

"The concentrate started to go last week, so the first official, touchable, visible cash flow has started to go to this joint venture company. That is big progress," said Ganbold, adding that so far Mongolia has received over $1 billion from the mine in the form of taxes and other payments.

Link to article


General Mining Corp: Annual Report 2013

October 25, General Mining Corporation Limited (ASX:GMM) --

The Company retains its interest in the iron ore, manganese and gold potential at Shoemaker in the Earaheedy Basin, held in joint venture with Galaxy Resources Limited. However, during the year interest in Mongolia was downgraded and many of the licence holdings surrendered (largely in response to legislative prohibitions on mining near water ways, head waters and forests which would have affected the Company's licences where the majority of the mineralisation at Khangai is within mountainous head water areas). Subsequently the Company commenced a strategy of an orderly wind down and divestment of its Mongolian operations.

Link to report


KCC closed -16.67% on low volume to 2.5c on Friday

Mongolia continues to confound investors

October 25 (The Northern Miner) The mining sector makes up about 20% of Mongolia's GDP, 40% of its budget income, 85% of its investment and 90% of its exports, but the uncertainty that permeates everything from the security of mineral tenure and resource rights to the enforcement of commercial contracts has taken a big toll on foreign direct investment levels, the growth of the private sector, and the nation's foreign debt, warns Dale Choi, the Ulaanbaatar-based founder of Independent Mongolian Metals & Mining Research

Foreign direct investment in the country has fallen off a cliff since August 2012 — plunging about 47% year-on-year, while foreign reserves are depleting at a burn rate of US$175 million a month, foreign debt has ratcheted up to about 54% of GDP and there has been an 18% depreciation of the Mongolian currency against the U.S. dollar, according to Choi's statistics.

Calling the current economic crisis in Mongolia "largely self-inflicted" — unlike the financial crisis of 2008 — Choi argues that Mongolia's leadership has to get its act together if it hopes to reverse the collapse in foreign investment and re-assure foreign companies that it is in fact open for business and that there are laws in place to protect their investments.

"The fall session of Parliament commences Oct. 3, and while well overdue legislative change is a potential positive development in the near term, without flagship transactions and resolution of key security of tenure uncertainties we do not believe the foundation for a return towards private sector growth will be provided," he says.

The uncertainties go much further than the impasse on project financing that lead Turquoise Hill Resources (TSX: TRQ; NYSE: TRQ) in August to announce that it would delay development of the underground Oyu Tolgoi copper-gold mine. They include erratic progress on a draft Minerals Law, the ongoing debate about royalty rates and the extent of state ownership. Other issues that worry investors are the concept of strategic deposits, fitful moratoriums on exploration licences and more recently, the fate of 106 licenses caught up in a government corruption scandal.

The latest concerns developed in January when a series of criminal court cases involving a number of high-ranking officials in the Mineral Resource Authority of Mongolia (MRAM) brought into question the legal rights and interests for the 106 exploration licence holders. Two of those involved in the case are D. Batkhuyag, the former head of the MRAM and L. Davaatsogt, the former head of geology in the mining department.

Kincora Copper (TSXV: KCC) is one of the foreign companies that holds title to two of the 106 Mongolian licences in question. In a corporate update to investors earlier this week, the company said that it continues to monitor its Tourmaline Hills and North Fox licenses, about 250 km from the Chinese border and about 140 km from Oyu Tolgoi.

In Kincora's case, it has spent about $1.85 million in exploration on the two licences already. "The acquisition of the licences followed full detailed due diligence, with the licences confirmed to be in good standing by the Mineral Resource Authority of Mongolia (MRAM)," the company stated.

The junior estimates that the 106 licences "cover a landmass approximately six times larger in surface area than active mining licences in Mongolia."

"Issues like the 106 case significantly impacts both current activities and the next generation of projects," Choi notes, adding that he believes some of the foreign groups tangled up in the investigation of the MRAM officials "have already left the country" while others may do the same "if an adequate resolution is not agreed in a timely manner."

Like most Mongolia watchers, however, Choi agrees that progress at Oyu Tolgoi is the key catalyst required to lift confidence. "OT needs to be successful to support positive investor sentiment toward Mongolia and further significant FDI," he writes.

He estimates development of the underground operation was originally expected to produce about a third of the country's GDP. "Originally it was expected that by now a US$4.2-billion project financing package, the largest of its kind ever in the global mining industry, to enable continued advanced of the underground mine would have been secured," he adds. Instead, "approximately 2,000 jobs have been lost with a similar number still at risk."

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Local Market

NatSec MSE Trading News, October 25: Top 20 +0.46%, Turnover 178 Million

October 25 (National Securities) On the MSE, the TOP-20 Index rose +0.46% to 14.176.65.  76,839 shares in 21 JSC's were traded worth 178 million MNT. 6 shares were static, 5 were up, 10 were down.  

The top gainer was Ulaanbaatar BUK (BUK), which produces concrete,  and closed at 40,000 MNT, rising 6.38%. It's share price has been rising strongly the last 2 months. Today's price is double that of 27th August, 2013. The 2nd biggest gainer was Gobi (GOV), which produces cashmere, and edged up 4% to 5,200 MNT. Material Impex (MIE) and Eermel (EER) were the top decliners of today. Dropping -6.83% and -3.85% respectively.

Hermes Centre (HRM) was the volume leader, trading 703,000 shares with worth of 105.4 million MNT. This single stock represented 59.2% of whole of today' trading value. It's price was at 150 MNT, dropping -1%.

Please click here to see the detailed news

Link to report


Frontier Markets, With A Focus On Mongolia

By Laurence Lavelle

October 25 (Seeking Alpha)


Excluding the private equity funds mentioned above there are no mutual funds and no ETFs with investments in public companies trading on the Mongolian Stock Exchange (MSE). This is somewhat incomprehensible as Mongolia, compared to many frontier markets, is a stable multi-party democracy with religious and academic freedom, no border disputes, no terrorism, no religious fundamentalism/fanaticism, a focus on education, huge natural assets, double digit GDP growth, and absurdly undervalued stocks.

Mongolia's military expenditures are ~1% of GDP while its education expenditures are ~6%, and has favorable demographics: median age 27, literacy 97%, college and university education (often international), and a professional work force.

Mongolia's 2013 1H GDP growth was 12.3% yet the MSE Top 20 Index has a median P/E of approximately 7. MSE listed companies are divided into the A board with 36 companies currently trading, and the B board with 143 companies. Margin (leveraged) brokerage accounts are not permitted. The entire MSE market cap as of 10 October 2013 is ~USD 862 million. Mongolia's mineral assets alone (copper, coal, gold, etc.,) are estimated to be USD 2 trillion.

On October 3rd, 2013 Mongolia's parliament approved the new "Investment Law" ending the derisive different investment rules for domestic and foreign investors. It also sets stable tax periods between 5 and 22.5 years depending on the industry and investment amount. This confirms the government of Mongolia's conviction in opening up their local market to foreign investors. The result will be much improved FDI and private equity investment which Mongolia needs to develop infrastructure and long-term productive industries thereby reducing the need for imported foods and goods. Collectively, and more importantly, this will facilitate the development of its most important asset, the educated and hard-working citizens of Mongolia.

What follows are two examples of well-established under-valued Mongolian companies trading on the MSE. (For personal comments on using the MSE and an excellent Mongolian brokerage, see the very last section below.)


Company Name

Revenue Growth

EPS Growth

Price/ Book

Price/ Sales

Price/ Earnings


Debt/ Equity


Talkh Chikher









Tavan Tolgoi








The 1H 2013 numbers speak for themselves.

Talkh-Chikher (TCK), established in 1984, is Mongolia's leading bakery and confectionery company providing 40% of the total consumption of flour-made products in Mongolia.

Tavan Tolgoi (TTL) has been mining coal in Mongolia since 1967 and in 1994 was listed on the MSE. Tavan Tolgoi has 40 million tons of coking coal reserves and pending licensing may result in another 30 million tons of coking coal reserves. Both revenue and earnings have grown while coal prices have declined and with its P/E currently at 4 this falls under prudent buying/investing.

TTL 2yr plot ending Oct. 21, 2013, y-axis price/share in local currency (3,099 MNT):

As discussed in Crowd Psychology Makes For Irrational Decisions Or When Not To Buy: A Visual Primer the MSE Top 20 Index plot below, along with its median P/E ~7, and Mongolia's double digit GDP growth, suggests prudent long-term investing is ignored while momentum short-sighted 'investing' is yet-again all the rage: LinkedIn (LNKD) $27B market cap, P/E 760, P/B 22 (industry average 6); Netflix (NFLX) $19B market cap, P/E 530, PEG 18; Facebook (FB) $128B market cap, P/E 224; etc.

As mentioned the entire Mongolian Stock Exchange market cap is currently under $0.9B. This is likely to increase as MSE listed companies dual list on foreign exchanges in 2014 which will be possible due to recent passing of new Mongolian securities laws.

MSE Top 20 Index, 3yr plot ending Oct. 21, 2013:

For completeness I am compelled to mention that there are risks but they are mainly currency and sovereign yield risks due to weakening balance of payments due to poor export and FDI inflows. Desmond Lee and Gaurav Singhal at Morgan Stanley in their October 21, 2013 research note cover these risks in detail. My two comments are these risks have been more than priced into Mongolian equities and they under-estimate the positive impact of the new "Investment Law" (discussed above) which was passed October 2013 with immediate effect on FDI inflows. Also they specifically discuss the significant positive impact on balance of payments the Oyu Tolgoi (OT) mine resolution and revenue inflow would have. On October 21, 2013 Turquoise Hill Resources announced Chinese import approvals were completed and revenue is now being recorded.

For those interested in reading more on the bullish case for Mongolia I suggest, "Where Did All Of The Mongolia Bulls Go?", also published this month (October 2013).

The main difficulty is liquidity on the MSE which is why I will be participating again in the interesting HB Oil (HBO) offering expected to close end-October or early-November, and additional offerings expected early 2014.

Two other investment options that allow for direct exposure to Mongolia via US and Canadian exchanges are Mongolia Growth Group (US:OTC:MNGGF, TSXV: YAK) and Turquoise Hill Resources (NYSE:TRQ, TSX:TRQ).

Mongolia Growth Group has terrific management, directors, and staff and is broadly exposed to the rapidly growing Mongolian economy through prime location real estate in Ulaanbaatar. Management and directors are also the largest investors and shareholders. The synergies of their conservative real estate purchases have yet to be realized.

Turquoise Hill Resources is well known; much has and will be written about it and the complicated investment relations involving Rio Tinto (RIO) and the government of Mongolia. My comments will be brief. TRQ, like MNGGF and many Mongolian equities, is heavily oversold while their largest asset, the new and huge Oyu Tolgoi (OT) mine in Mongolia is running at 100% production. Few mines run at 100% production, especially those in frontier markets due to labor strikes, civil unrest, war, weather, poor infrastructure, etc.

Mongolia also has excellent international relationships with western countries and communist countries yet is pragmatic in implementing pro-market reforms such as the recent Investment Law and organizing with the UK FTSE Group a FTSE-MSE index expected 1H 2014. These developments along with the MSE entering the MSCI Frontier Index sometime in the future will have frontier funds and 'index huggers' scrambling to own MSE listed companies.

I'll end with the observation that this yak looks healthy and well able to weather a couple of storms should they arise:

Personal Comments and Disclosures

Since 1998 I have managed US accounts at Datek, Wit Capital, Morgan Stanley Dean Witter, E-Trade, Fidelity, TD AmeriTrade, Charles Schwab, and RBC. The first four were closed some time ago and replaced by the last four. I give this as background because I had minimal expectations with some far-flung Mongolian brokerage. Boy was I wrong.

Not only has BDSec been terrific, it has given better service than all of the above companies. A lot of the highly personal service comes from Nick Cousyn (from Southern California) who is BDSec's COO and a terrific resource for MSE stocks. Nonetheless everyone I have interacted with at BDSec has been helpful, pleasant, and professional, in particular Undram Soyolkhuu and Sainbayar Jadamba. BDSec JSC was founded in 1991 and is Mongolia's largest broker. I include this as many incorrectly assume investing in Mongolia is 'impossible'. My experience has been and is, possible and pleasant.

When using the MSE click on the upper right "English", then click on any ticker symbol and in the "Symbol:" box enter any ticker of interest. I now prefer using the MSE but for those using Bloomberg, etc., the country extension is MO, for example TCK:MO.

I am not an investment advisor and therefore my financial and market comments are meant for educational content, not investment advice. I do not currently own any of the funds or ETFs discussed in this article although this could change. I do own all the Mongolian stocks mentioned in this article and many more as part of a diverse long-term investment portfolio.

Additional disclosure: Long: TCK:MO, TTL:MO, HBO:MO

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Total outstanding 1-week bills at 1.54 trillion

BoM issues ₮508.2 billion 1-week bills

October 25 (Bank of Mongolia) BoM issues 1 week bills worth MNT 508.2 billion at a weighted interest rate of 10.5 percent per annum /For previous auctions click here/

Link to release


Mongolia Prime Minister Welcomes Foreign Investors as Boom Slows

October 27 (Bloomberg News) Mongolia, locked in a dispute with Rio Tinto Group (RIO) that has stalled the expansion of a copper mine, understands that it needs to make the nation more welcoming to foreign investors, Prime Minister Norovyn Altankhuyag said.

The country is open to all foreign companies and will allow them to invest in industries such as railways and power stations, in addition to mining, Altankhuyag said in an interview in Beijing during a five-day visit to China.

This month Mongolia's parliament approved a law that ended different rules for domestic and foreign non-state investors after the Mongolian tugrik fell 21 percent against the dollar this year and foreign direct investment slumped by 47 percent.

"We have received and agreed with all of the criticism from the market," Altankhuyag said. "Our investors are cheering the passing of the investment law."

Mongolia's mineral boom has slowed amid a protracted dispute with key investors, including Rio, and increasing calls for a greater share of revenue to go to its citizens. Building infrastructure will allow the landlocked country to export a greater volume of its abundant natural resources after low commodity prices hurt its $10 billion economy, Altankhuyag said.

Gross domestic product increased 11.3 percent in the first half of the year, from 12.4 percent for all of 2012 and a record 17.5 percent in 2011. GDP growth will be 13 percent to 14 percent by the end of this year as the government expands domestic construction and boosts the housing market, he said.

Price Slump

"This year is a special one because most of the market prices of our export products are declining right now," Altankhuyag said.

A 15 percent drop in coal prices this year eroded earnings from Mongolia's biggest export by 45 percent over the first nine months. The country is prioritizing the volume of coal exports to China, its biggest customer, rather than the price, as well as expanding the infrastructure of the Tavan Tolgoi coal mine, Altankhuyag said.

Low prices will also keep the country from seeking an initial public offering for state-owned coal company Erdenes Tavan Tolgoi LLC, according to the premier.

"If the price will be like this, there is no need to talk about the IPO," he said. "After we have done the infrastructure we will get a higher price from the IPO."

Oyu Tolgoi

Tavan Tolgoi and Oyu Tolgoi are two of Mongolia's largest mines. Mongolia and London-based Rio have been in talks for much of this year over the terms of a financing package, valued at about $4 billion, to develop the second stage of the Oyu Tolgoi copper and gold mine.

Rio, the world's second-biggest mining company by market value, manages the venture through its 51 percent stake in Vancouver-based Turquoise Hill Resources Ltd. (TRQ), which owns 66 percent of the mine. Mongolia owns 34 percent of Oyu Tolgoi LLC.

Half the issues that need to be resolved have already been decided, Altankhuyag said, and the government is ready to discuss the refinancing. While open-pit work continues, the dispute has resulted in the layoff of about 1,700 workers connected to the mine's expansion, which includes underground development.

"There is nothing related with the government of Mongolia that is stopping the project," he said. "We don't see that there are tough issues to be solved." to solve these issues."

Tolerant, Cooperative

Disagreements over water use, concentrate transportation, exports to China and company management are closer to resolution, Davaadorj Ganbold, one of three Mongolian nationals on the Oyu Tolgoi board, said in an interview in the capital Ulaanbaatar on Oct. 26.

"Both sides are being very tolerant and cooperative towards each other," said Ganbold, who was deputy prime minister from 1990 to 1992. "Solving one thing may bring some movement or success in other items."

So far $6.6 billion has been sunk into the first stage of the mine, where the open pit went into commercial production in July.

Altankhuyag met with Chinese President Xi Jinping and Premier Li Keqiang in Beijing after visiting the northeastern province of Liaoning, which borders North Korea and hosts the port of Dalian.

The two sides signed agreements to strengthen cooperation in energy, education, culture and finance, officials said Oct. 25. They'll also cooperate more closely on mining, Liu Zhenmin, China's vice minister of foreign affairs, told reporters at the Great Hall of the People after the signing ceremony.

Mongolia's southern neighbor takes 86 percent of its exports. In the first nine months of 2013, shipments to China totaled $2.66 billion, compared with $3.01 billion a year earlier. In September Mongolia's central bank said it was in talks with the People's Bank of China to double the currency swap agreement between the nations to 20 billion yuan ($3.3 billion).

Link to article



October 2013 (Economic Policy and Competitiveness Research Center) --


Economic growth rebounded in the second quarter 2013. Real GDP grew by 14.3 per cent in the second quarter to June, a strong improvement on the 7.1 per cent growth recorded for the twelve months to March 2013. Expansion in the first half was 11.3 per cent, a slow-down from the 13.1 per cent growth recorded for the same period one year prior. In current prices, GDP amounted to MNT 7,591 billion for the first six months of 2013 and grew by 18.8 per cent in comparison to the same period last year. Growth was driven by increases in government spending from the Chinggis bond proceeds, although agriculture also grew strongly.

The accumulative 2013 budget for the cental and local governments is still recording a deficit of MNT 131 billion /the total budget revenue and expenditure amounts to MNT 3,937 and MNT 4,068 billion/. The deficit is an improvement from the same period last year, when combined government finances were in deficit of MNT 558 billion. Revenue remains 13 per cent higher while expenditure remains the same because of some 17 per cent spending cuts in subsidies and transfers as well as 32 per cent in investment through internal sources.  

The trade balance was in deficit USD $1.7 billion for the nine months to September. The total turnover of trade reached USD 7.9 billion, a decrease of 6.5 per cent from the same period last year. Both exports and imports are lower compared to last year, with exports of USD $3.1 billion down 4.1 per cent since last year, and imports of USD $4.8 billion down 8 per cent. The slow-down in coal exports continues, down 45 per cent in value and 20 per cent in volume compared to the same period last year.

The Mongolian Tugrik depreciated sharply in September. The monthly average exchange rate fell 5.9 per cent to 1,662 MNT against the USD. The biggest daily fall in the value of the tugrik reached 1,723 in September. The value of the tugrik has fallen 19.2 per cent over the past year to September. The total amount of foreign currency reserves reached USD 2,679.6 million decreasing by 1.7 per cent compared to the previous month. Compared to the same period last year, foreign currency reserves are now down 7.7 per cent.

Inflation increased slightly to 9.9 per cent in the year to September. Compared to September 2012 it decreased by 4.9 units. The year to date inflation rate was 8.2 per cent, while inflation for the month of September was a modest 1.4 per cent. During this month the prices of Clothing, footwear and cloth, and Alcoholic beverages, tobacco increased as well as that of housing, water, electricity and fuels.


The money supply (M2) slightly increased in September. M2 rose 0.9 per cent from the previous month reaching MNT 8.5 trillion or USD 5.1 billion. M2 is 19.3 per cent higher than the same period in September 2012. Currency issued in circulation rose by 0.8 per cent, and remains 17.3 per cent higher than the previous year to be MNT 875 billion. Currency issued in circulation amounts to 10.3 per cent of the M2.

Bank deposits fell by 0.8 per cent in September to MNT 5.3 trillion. Deposits are now 16.3 per cent higher than a year ago amounting to USD 3.2 billion. Deposits in foreign currency fell by 11.4 per cent to MNT 1.2 trillion, while MNT deposits rose by 2.9 per cent to MNT 4.1 trillion. Foreign currency deposits are now 17.2 per cent lower than one year ago, while MNT deposits are 32.5 per cent higher.

Non-performing loans rose in September. This sharp rise in non-performing loans, from MNT 136 million to MNT 537 billion in the last three month, represents a 75.4 per cent increase from the same period last year. Non-peforming loans amount to 5.3 per cent of the total amount of loans outstanding. Total loans outstanding rose 3.8 per cent to MNT 10.2 trillion or USD 6.1 billion, an increase of 47.9 per cent in the past year. The annual interest rate (weighted average) for loans in MNT increased by 0.4 percentage points and decreased by 2.1 percentage points for loans in foreign currency from last year reaching 19 per cent and 12.1 per cent respectively.

Monthly highlights

Ø  The "Erdenes Tavantolgoi" company begins to export coal from the West Tsankhi. It plans to export 7.5 million tons of coal this year, of which 4.5 million tons will be extracted from the East Tsankhi, and 3-3.5 million tons from the West Tsankhi site.

Ø  EBRD, the Bank of Mongolia and the Ministry of Finance have signed a Memorandum of Understanding under the EBRD's Early Transition Countries (ETCs) Local Currency Lending Program. Donors will share the loan risk providing to borrowers such as micro, small and medium-sized enterprises (MSMEs) loans at affordable interest rates.

Ø  The year's Conference of Asian Bankers Association (ABA) focused on the theme "Asia: Growth Engine of the Global Economy" was organized for the first time in Mongolia.


The International Monetary Fund (IMF) has cut its 2013 growth forecast for the Mongolian economy, the latest World Economic Outlook (WEO) released on 7 October2013 shows. GDP is now expected to grow by 11.8% in 2013, revised down from the IMF's previous growth forecast of 14.0% in April. Economic growth in 2014 is expected to be around 11.7%, slightly higher than the 11.6% previously forecast. Of most concern, GDP growth forecasts for Mongolia in 2015 and 2016 have been slashed. The Mongolian economy is now expected to grow by a modest 5.8% in 2015, down from 7.6% forecast in April, while 2016 growth is expected to be only 3.6%, down from 9.5% forecast in April.

These cuts to the growth forecasts for Mongolia have been driven by continued uncertainty and weakness in the global economy, particularly in China. The IMF argues that although advanced economies such as the US and Europe are gradually strengthening, growth in emerging markets has slowed. Accordingly, the IMF cut its growth forecasts for China to 7.6% in 2013 (down from 7.8% in July) and 7.3% in 2014 (from 7.7% in July) as part of this latest World Economic Outlook.  

Of particular concern for Mongolia is the rebalancing underway in China from an investment based economy to a consumption based economy. As demand shifts away from materials-intensive growth, some commodity exporters could be vulnerable, the IMF notes that.

The WEO October 2013 database demonstrates this vulnerability for Mongolia, with expectations for growth in Mongolia's exports dramatically revised down. For instance growth in exports in 2016 which were previously forecast in April to increase by 22.7% are now forecast to fall by 3.9%. Over the longer term, the Chinese slowdown and associated rebalancing of the Chinese economy could have a dramatic impact on Mongolia's economic growth. The IMF has estimated the impact of a slowdown in Chinese growth from an average of 10 percent during the previous decade to an average of 7½ percent over the coming decade on Mongolia. It found that Mongolia's GDP level in 2025 is estimated to be about 7 percent lower than otherwise, primarily as a result of slower Chinese demand for coal, iron ore, and copper.

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Resolution Passed Allowing Government to Issue Securities

Ulaanbaatar, October 25 /MONTSAME/ At its plenary meeting on Friday, the parliamentary session adopted its resolution on allowing the government to issue stocks.

After this, S.Ganbaatar MP introduced to session proposals and conclusions from the Standing committee on budget over draft amendments to the laws on 2013 state budget, on 2013 budget for social insurance fund, and on 2013 budget for Human Development Fund (HDF). These drafts have been submitted to the Standing committee on budget to have it decide whether they should be sent to parliament for the fourth discussion.

The same day, the session launched a first discussion of a draft parliamentary resolution on measures to be taken in conjunction with passing the draft amendment to the 2013 budget law.  

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China, Mongolia ink deal to ship coal using rail network

October 26 (China Daily) China and Mongolia vowed on Friday to strengthen cooperation in interconnection, as the northern neighbor reportedly seeks another link to the Pacific Ocean aside from Tianjin.

The two nations also signed a string of documents including a deal to ship coal from Mongolia to China by rail to lower the transportation costs.

Premier Li Keqiang and his visiting Mongolian counterpart Norov Altanhuyag witnessed the signing ceremony after a meeting at the Great Hall of the People.

"(The two countries should) develop an overall plan for railways and roads as well as natural gas, electricity and transportation linking the two nations," Li said during the meeting.

He also said Beijing is willing to hold discussions with Ulan Bator on a free trade area around the border.

Si Lige, a researcher on Mongolian studies with the Inner Mongolia Academy of Social Sciences, said that the document on coal transportation by railway, signed by Chinese and Mongolian companies, shows that Ulan Bator aims to strengthen energy cooperation with China to consolidate other forms of cooperation.

Because of a price dispute and competition from Russia and Australia, Mongolia's coal exports to China fell last year, Si said.

Observers expect the progress of Mongolia's growing rail system and its efforts to improve interconnection with China will help the country enter an era of massive coal development and increase coal exports.

Altanhuyag is on his first official visit to China since taking office in 2012. He also met President Xi Jinping and top legislator Zhang Dejiang on Friday.

Vice-Foreign Minister Liu Zhenmin told reporters on Friday that in his China visit Altanhuyag also traveled to Chengdu, capital of Sichuan province, for the Western China International Fair.

He then visited Northeast China's Liaoning province, a move that Mongolian media said aims at opening a new route to the sea.

"The schedule shows that Mongolia is adjusting its traditional cooperation plan with China," said Si.

In a recent interview with Xinhua News Agency prior to his visit to China, Altanhuyag said that Mongolia will actively participate in the construction of a "Silk Road Economic Belt".

In September President Xi raised the idea of the economic belt, similar to the ancient Silk Road of more than 2,000 years ago, as a means to boost cooperation between China and Eurasian countries.

China has been Mongolia's largest trade partner and investor country for many years.

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Mongolia Seeks to Open Its Door to the World through Jinzhou Seaport, China

October 25 / On his third day of official visit to China, Prime Minister of Mongolia N.Altankhuyag and his accompanying delegation have attended the Mongolia-China roundtable meeting took place at the "Liaoning Friendship" Hotel in Shenyang city on October24, 2013.

At the panel meeting large representatives from both state and private sectors have participated, where China part officials expressed their interest to partner with Mongolia in the infrastructure, foreign trade and tourism sectors, moreover proposed to open Mongolian Consulate in Liaoning Province.

During the meeting Ambassador Extraordinary and Plenipotentiary of Mongolia to the People's Republic of China Ts.Sukhbaatar stressed, "We have chosen the Liaoning Province to conduct this meeting out of 31 provinces of China and this is reasonable, because the closest province with seaport is Liaoning. Mongolia is pushing forward to develop its southern and eastern regions based on its natural reserves and the Liaoning Province due to its geographical location is the most suitable partner. From the Bichigt – Zuun Khatavch, Mongolia-China border port to Jinzhou Seaport, Liaoning is approximately a thousand km and in order to work mutually beneficial by connecting with infrastructure Mongolian delegation comprised of Governors from Eastern Aimags and affiliate Ministry officials have been participating at this roundtable dialogue".

Also, Minister of Road and Transportation A.Gansukh introduced Mongolia's policy to adhere and implement in the near future, and said Chinese companies can be involved as investors in the large railway and auto road projects, and as executors in the construction projects. He also noted that financial institutions can deliver their proposals of partnership.

Moreover, Premier N.Altankhuyag added, "I am glad that the yesterday discussed issues with the Province Governor are being engaged into a business dialogue and it is notable that parties are reaching consensus on mutual interests in establishing railway and road connections. By implementing these projects, Mongolia-China economic cooperation would reach not onlya newer level, but also it enables Mongolia to open its biggest exit to international market. Therefore, the Government ofMongolia is paying a significant attention to this matter and we will be working to accelerate the issues".

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French energy giant Areva signs uranium deal in Mongolia

October 26 (AFP) French nuclear energy giant Areva has signed a deal with Mongolia's state-owned Mon-Atom to develop two uranium mines in the Gobi desert, officials say.

Areva said in a statement on Saturday the agreement would create a company that would be 66 per cent owned by Areva and 34 owned by Mon-Atom, and that Japan's Mitsubishi Corporation would take an equity interest.

Further details of the deal, which was signed during a visit to Mongolia by French Foreign Minister Laurent Fabius, were not immediately announced.

Fabius' Mongolian counterpart, Luvsanvandan Bold, said the deal represented an important step for the resource-rich but still impoverished nation.

Areva, which has had a presence in Mongolia for more than 15 years, said exploration work had discovered two uranium deposits with estimated reserves of 60,000 tonnes.

Mongolian protesters had warned before the signing that a deal could lead to the contamination of water resources in the area.

"We are not against cooperation with France ... We support cooperation in between our countries in all areas," said Selenge Lkhagvajav, one of the protest leaders.

"But we just say 'no uranium exploration in Mongolia', as not having it is the best way to prevent radioactive pollution and contamination."

Wedged between Russia and China, Mongolia has recently been seeking to broaden the base of its political and economic allies, notably exploring relationships with France, Japan and Germany.

Other deals signed on Saturday included agreements on cooperation on farming, culture, sport and tourism.

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Link to Areva release


Mogi: lol

Hall-of-shame company AREVA re-activates operations in Mongolia

October 25 / Cogegobi, the Mongolian subsidiary of AREVA, a nuclear group based in France, has activated its uranium exploration in Mongolia again after a temporally halt due to local resident opposition. 

In April this year COGEGOBI LLC announced an estimated 55,000-ton uranium deposit in Ulaanbadrakh sum in Dornogovi province (East Gobi). Around the same time, local media reported the strange deaths and deformities of a number of young livestock in Ulaanbadrakh sum. Over 300 households' livestock were affected by the uranium related operations by Cogegobi LLC in the area.  

Local herders and residents launched an anti-uranium exploration campaign in order to stop the Cogegobi drilling at the site. Cogegobi ended up halting the drilling operations and closed its camps due to the local residents and herders protests. 

The Central Geological Laboratory, State Central Veterinary and the Sanitary Laboratory determined the reason behind the sudden death of dozens of calves in Ulaanbadrakh sum in Dornogovi aimag. After testing samples it was found that the deaths were caused by heavy metal poisoning. But the expert team appointed by Prime Minister N.Altankhuyag to conduct further inspection released the conclusion that the strange deaths and deformities of the young livestock was caused by chemical selenium not from uranium. 

Local residents and herders are against Cogegobi uranium exploration and activities but the French uranium explorer Cogegobi has intensified exploration and set six drilling stations in the Zuuvch-ovoo uranium deposit. 

Since the company arrived in Mongolia, it brought over 120 million US dollar and almost 60-70 percent of it has been spent over the past three years. Currently the company owns 15 exploration licenses in Sukhbaatar and 12 in Dornogovi provinces. The company has discovered the Dulaan-Uul deposit with an estimated 7,000 tons of resources and the Zuuvch-ovoo deposit with an estimated 54,000 tons of resources. 

The Public Eye Award ("Anti-Oscar"), a derogatory award by Greenpeace, a non-governmental environmental organization, for worst company behavior was given to the French Uranium mining company AREVA for its worst-of-all behavior towards workers and people in the area in regard to its uranium mines in Niger in 2008. AREVA now sits in the Hall-of-shame for corporate social responsibility.  

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GDF SUEZ signs MOU with Newcom for development of renewable energy projects in Mongolia

October 25 (GDF SUEZ) On the occasion of the visit to Mongolia by the French Minister of Foreign Affairs, Mr. Laurent Fabius, GDF SUEZ signed a Memorandum of Understanding ("MOU") with Newcom, a leading Mongolian conglomerate, relating to the development of future renewable energy projects in the country. This MOU is in line with the Mongolian Government's ambitions to capitalize on the potential to generate power from the country's renewable energy resources and demonstrates GDF SUEZ's recognized know-how and expertise in renewable projects.

In August, GDF SUEZ, together with its consortium1 partners, was confirmed preferred bidder for the combined heat and power plant CHP5 in Ulaanbaatar, the capital of Mongolia (capacity of 415 MW and a steam capacity of 587 MW) under a 25 year PPA with the Mongolian government.

Mongolia benefits from outstanding conditions for the development of renewable power projects with up to 250 sunny days per year and excellent wind potential. Newcom currently owns and operates the 50 MW Salkhit wind farm, the nation's first wind development, and is considering further renewable energy projects in Mongolia.

In Asia, GDF SUEZ is primarily active in power generation (10,314 MW in operation and 375 MW projects under construction) and holds major positions in Thailand, Singapore and Indonesia.

The Asia Pacific region is a key development platform for all of GDF SUEZ activities: power, gas and energy services. The Group has set ambitious industrial objectives in the area:

·         Accelerate development in new countries (India, Mongolia, the Philippines and Vietnam)

·         Further develop LNG sales

1This consortium comprises GDF SUEZ (30%), Sojitz Corp (30%), POSCO ENERGY (30%) and Newcom LLC (10%).

Link to release


French firms eye Mongolian resources and contracts

French Foreign Minister Laurent Fabius is spending the weekend in Ulan Bator, in a bid to cement relationships and gain access to the country's vast natural resources. The Mongolians are keen to reciprocate.

October 25 (France 24) French Foreign Minister Laurent Fabius led the latest foreign investment delegation to visit Mongolia on Friday accompanied by an array of leaders of France's biggest industrial companies.

The delegation is the first French visit on such a scale and arrives hot on the heels of German Chancellor Angela Merkel who was in Ulan Bator last week, signing agreements on coal exploitation and securing a gas turbine deal for the Siemens group.

Mongolia has a vast wealth of mostly untapped mineral resources including coal, copper, uranium and gold.

The former Communist-bloc country, which joined the World Trade Organisation in 1997, "has only just started to bring these minerals out of the ground, we're only at the tip of the iceberg right now", according to Lee Cashell, who heads the Mongolia-based Asia Pacific Investment Partners investment group.

The American businessman, who has been living in Ulan Bator since 2001, believes Mongolia will achieve steady growth that should go on "for at least 20 years".

The vast steppe country, sandwiched between Russia and China and with a population of just three million, has seen high and steady growth in recent years – 17.5 percent in 2011, 12.4 percent in 2012 and a projected 13 percent in 2013, according to World Bank figures.

'Strategic uranium deal'

The French industrials visiting the country this weekend, include nuclear developer Areva, pharmaceutical multinational Sanofi, and gas companies Air Liquide and GDF Suez, who see big opportunities as Mongolia continues to develop.

Areva, which has been prospecting in Mongolia for the last decade, is hoping to seal a "strategic agreement for uranium extraction" to feed France's huge nuclear energy sector.

Other French firms include Systra (engineering and transport) as well as satellite manufacturing and deployment companies Arianespace and Tahles Alenia space, who are hoping for contracts as Mongolia plans to develop 5,600km of new rail lines and is looking at acquiring two new satellites.

Despite being sandwiched between Russia and China, Mongolia has every reason to welcome France with open arms.

With 86 percent of its exports going to China, Ulan Bator is keen to diversify into new markets with its "Third Neighbour" (a Mongolian policy aimed at building bridges with countries other than Russia and China), and in particular with France and Germany.

French President François Hollande is due to cement that relationship further with a planned visit from his Mongolian counterpart Tsakhia Elbegdorj to Paris in January 2014.

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Course will reach out to hard-to-service rural areas

October 25 (EBRD) The Mongolian Banking and Finance Academy (BFA) today launched a new online training series, teaching best practices for lending to small and medium-sized enterprises (SMEs) – SME Financing. The course will teach loan officers in commercial banks the practical skills required to address the unique challenges of lending to SMEs.

The Banking and Finance Academy is a training organisation owned by several Mongolian banks and dedicated to building skills in the financial sector. Since the SME Financing course is online, it can be more readily accessed by loan officers in rural areas that are otherwise difficult to reach due to the country's low population density.

This initiative is part of the Support to SME Development in Mongolia – a project funded by the European Union (EU) and implemented by the European Bank for Reconstruction and Development (EBRD).

The project works to support small businesses in Mongolia by providing advice directly to Mongolian entrepreneurs, thereby improving the business environment and strengthening the organisations that support businesses. Increasing access to finance by SMEs is a vital part of this effort. 

"Qualified loan officers are the foundation of access to finance," explained Matthias Reusing, First Secretary of the EU Delegation to Mongolia. "This is a central issue, and an especially challenging one for SME development in rural areas."

Participants who successfully pass the SME Financing course will receive a certificate in SME lending. According to BFA, there are over 1,000 loan officers currently practising in the country. Those who prefer more traditional training methods will be able to take a classroom-based course.

BFA's teaching method is unique, in that it uses Mongolian trainers to teach international best practices. "We feel that our approach is an effective blend of local knowledge and international standards," said Nergui Sandagjav, CEO of BFA. "This means that we are able to maximise the impact by offering high quality training at a locally-affordable price."

Explained Matthieu Le Blan, the new Head of the EBRD's Resident Office in Mongolia: "Improving access to finance in Mongolia will be important for the diversification of the economy. This is one of the central challenges the country will face in the future."

Link to release


Goyo Unveils Sochi 2014 Mongolian National Team Outfit Designed by Stefano Ughetti

October 25 / Mongolian National Olympic Committee has established an agreement of cooperation with "Goyo" Cashmere Company in March 2013 and the sides pledged to collaborate until the 2016 Summer Olympic Games to take place in Rio de Janeiro.

In the frameworks, the latter part is responsible to fully provide winter and summer costumes to wear at the opening and closing ceremonies for Mongolian National Team. Accordingly, the "Goyo" Cashmere Company introduced the winter outfit design for Sochi 2014 and presentation ceremony took place at the Olympic Housein Ulaanbaatar on October 21, 2013.

Notably, the ceremonial costume for Sochi was created by Italian designer Stefano Ughetti, who said, "I am really glad having a chance to design winter costume for Mongolian Team, which is the biggest celebration for athletes, it is a matter of honor for me and a big responsibility. The upcoming February is expected to be a quite cold month, hence our team decided to tailor with cashmere fabrics, nevertheless we cannot imagine Mongolia without cashmere".

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French energy giant agrees to build Mongolia thermal plant

October 25 (AFP) French energy giant GDF Suez on Friday signed an agreement with private Mongolian firm Newcom to build a thermal power plant in the fast-developing country, which still suffers from blackouts.

This will be the fifth such plant in the resource-rich but still impoverished nation, which has huge needs for electricity and endures freezing winters.

The agreement was announced by Newcom and GDF Suez executives as French Foreign Minister Laurent Fabius paid a visit to Mongolia, accompanied by a delegation of business leaders. It has yet to materialise into a firm deal.

"Mongolia, which is growing at huge speed, still has blackouts at times. There are huge needs for electricity," said Denis Simonneau, a GDF Suez executive.

"This plant will also distribute heat in the buildings of Ulan Bator", the capital city with a population of 1.5 million.

The agreement between GDF Suez and Newcom also includes two other companies -- Japan's Sojitz and South Korea's Posco Energy.

GDF Suez also wants to develop solar parks and wind farms with Newcom in the coming months.

Already, the group's subsidiary Suez Environnement has built water treatment plants in Ulan Bator.

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Foreign Policy Roundup #9: October 13-27, 2013

By Brandon Miliate

October 27 (Mongolia Focus) The last two weeks of Mongolian foreign policy news are marked with 2 important state visits: The Mongolian PM's official visit to China; The Canadian Governor-General's first visit to Ulaanbaatar. See below for the highlights of these visits and more. 


Mongolian and Russian representatives from the countries' respective Ministries of Infrastructure and Transportation met in Ulaanbaatar to discuss rail connections and Mongolia's reliance on the jointly-owned railway for the transport of goods ranging from oil and piping to building materials.

PM Altankhuyag traveled to China. During this official visit he met not only with Beijing officials, but also with representatives from China's southwestern provinces, participating in the 14th Western China International Fair. During the forum, Altankhuyag remarked that Mongolia is a country full of business opportunities, not solely in the mining sector. The visit concluded with the signing of a strategic partnership between Mongolia and China. Of particular interest, the agreement noted that Mongolia's Sukhbaatar Aimag led the push for increased cooperation with China's Liaoning province.

Mongolia's newly appointed ambassador to the Russian Federation, Sh. Altangerel presented his credentials to Russian President Vladimir Putin.

During L. Bold's attendance at the World Economic Forum in Moscow, negotiations between the Eurasian Development Bank and the Mongolian government were reopened. At the same time, consultations were reopened between Mongolia and Rusneft, a Russian oil conglomerate.

Asia Pacific

Mongolia and North Korea are marking the 65th anniversary of the establishment of diplomatic relations. The Guardian recently released a story on the economic benefits of Mongolia's continued good relations with North Korea.

Consultations were held between the Vietnamese and Mongolian Ministries of Foreign Affairs.

North America

Canadian Governor-General David Johnston made an official visit to Mongolia, during which he addressed the Mongolian Parliament. Following the address, he paid his respects to the Chinngis Khaan statue outside of the Government Palace and signed the official guest book of the Mongolian state. This year marks 40 years of Canadian-Mongolian relations and the first visit by a Canadian Governor-General. During the visit a number of agreements on cooperation in medicine, construction, infrastructure, and agriculture were discussed and signed. During a press conference, President Elbegdorj remarked that this visit marked a new page in Canadian-Mongolian bilateral relations; Governor-General Johnston similarly remarked that relations between the two countries would soon be strengthened across a number of sectors. To see a video released by the Canadian government, click here. During the visit, Dr. Julian Dierkes was awarded the Governor-General's Medallion. See Dr. Dierkes' report on the outcome of the visit, here.


Great Britain's Minister of Foreign and Commonwealth Affairs, William Hague, visited Ulaanbaatar on the invitation of Minister L Bold. The two exchanged views for how Mongolia and Britain might cooperate more fully, with particular emphasis on the mining sector.

The Polish President visited Mongolia on invitation of President Ts. Elbegdorj. They heldnegotiations, followed by more formal meetings with PM N. Altankhuyag and Director of Parliament Z. Enkhbold. The visit concluded with the signing of a MoU signed by Mongolian Minister of Mining, D. Gankhuyag, and the Polish Deputy Economics Ministeron technological cooperation in the mining sector, and a meeting of the Poland-Mongolia Business Council.

The French Foreign Minister made a two-day trip to Mongolia on the invitation of L. Bold. During the visit new visa regulations that would allow diplomatic passport holders 90-days of visa-free entry were announce.

A seminar was held in Mongolia's embassy in Belgium regarding the emerging EU-Mongolian Partnership.

Middle East

L. Bold received the Turkish Ambassador to discussed cooperation in trade, education, and defense.

Mongolian citizens can now travel visa free to Turkey for 30 days and to Brunei for 14 days. The same applies for Turkish and Brunei citizens traveling to Mongolia.


October 27, 2013 marks the 53rd anniversary of Mongolia's admission into the United Nations.

For previous postings of the Foreign Policy Roundup in 2013 CLICK HERE.

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Mongolia's special relationship with North Korea pays economic dividends

Ulan Bator's longstanding links with Pyongyang can help stability in region, says foreign minister of democratic ex-Soviet satellite

By Tania Branigan

October 25 (The Guardian) North Korean workers toil in factories and on building sites, Kimjongilia flowers bloom at a special exhibition, and a restaurant serves plates of bulgogi as another patriotic song blares from a television. Yet this chilly north Asian capital is not Pyongyang, but Ulan Bator, Mongolia.

When Mongolia's president, Tsakhia Elbegdorj, arrives in North Korea on Sunday – the first head of state to visit since Kim Jong-un took power – it will cement a longstanding relationship.

Other countries have ties to North Korea, but Mongolia is highly unusual as a democracy enjoying warm relations with both Pyongyang's authoritarian regime and Seoul government in the South. "The visit of our president will elevate relations to a new stage," Mongolia's foreign minister, Luvsanvandan Bold, told the Guardian.

"We want to make a more secure region – more safe and stable – with more economic development. Of course we have different systems but we shared a common history and there's a lot of sympathy between Mongolian and Korean people."

Mongolia, then a Soviet satellite, was the second country to recognise North Korea and took orphans following the Korean war. Such charitable initiatives continued after Mongolia's democratisation; last month it delivered food aid, following a request from Pyongyang.

Charles Armstrong, professor of Korean Studies at Columbia University and author of Tyranny of the Weak: North Korea and the World, said the two countries had a shared history that pre-dated the communist period and "a common concern about domination by larger countries, namely Russia and China, and retaining political independence".

On Mongolia's side, its ability to engage with North Korea is a potentially important asset in dealing with other, more powerful countries.

"Ulan Bator can be a useful platform to create understanding," Bold said. "What Mongolia can provide is leverage to improve the situation in the region and pursue the initiative for parties to share dialogue … We see a lot of room to be more active."

Last year Ulan Bator hosted talks between Tokyo and Pyongyang on Japanese citizens abducted by North Korea.

"Mongolia has done a good job of portraying itself as an honest broker on Korean peninsula issues. It is probably the only country that both North and South Korea can be said to trust," Armstrong said.

"To the extent that North Korea can be persuaded to do anything, Mongolia can play an important mediating role … Of course, North Korea is fiercely protective of its independence and will act in its own perceived interest, taking maximum advantage of the countries it deals with. But due to its non-threatening nature, Mongolia is in a better position to positively influence North Korea's behaviour than are China, Russia, South Korea, Japan or the US."

Economic links are becoming as important; one key advantage for the landlocked country is North Korea's access to the sea.

This year, Mongolia-listed HB Oil bought a 20% stake in a North Korean state-owned refinery. It plans to supply crude oil to the Sungri refinery, based in the special economic zone at Rason, exporting the products back to Mongolia.

"That has triggered a lot of interest," said Munkhdul Badral, founder of business research firm Cover Mongolia, who visited Pyongyang with a business delegation last month. "Other potentially developing countries are already crowded with Chinese investment … It doesn't make much sense for Mongolian companies to be going into Myanmar [Burma]." (Mogi: meant to say it would make sense for Mongolian firms to plant its feet in North Korea, instead of trying to compete in other markets that are already overcrowded)

Mongolian firms can also benefit from offering others a route into North Korea. "Essentially, this HB Oil opportunity has provided those foreign investors who specialise in managing funds in emerging and frontier markets with an opportunity to gain exposure to the DPRK [North Korea]," said Joseph Naemi, non-executive director of HB Oil.

If Pyongyang approves the processing deal, Sungri could reach full operational capacity by the first quarter of 2015, he said; the Mongolian oil firm also has exclusive rights to onshore exploration, development and production of hydrocarbons.

Given North Korea's fractious relations with other states, such investments come at significant risk. "Of course, sanctions can change. If they affect the oil and gas industry of the DPRK then yes, we are out of business," said Naemi, adding that if the sector was not used to risk, "oil would have been at $1,000 a barrel 30 years ago".

Others warn that foreign operations in North Korea face considerable domestic challenges and have little protection even if their countries have good diplomatic relations, as Chinese businesses have found.

"I can think of five or six cases - two are success stories," said Andrei Lankov, an expert on North Korea at Kookmin University in Seoul.

Hiring North Korean workers, however, had proved "a capitalist dream: people work hard, don't ask for much money and never ever unionise". There are around 1,700 such labourers in Mongolia and construction and manufacturing firms seek more; existing agreements would allow up to 5,000 to work there.

Lankov noted that North Koreans paid "very significant" bribes to get jobs abroad because they could earn five or six times the average wage at home. Even after Pyongyang has taken a large chunk of their earnings, "it's unbelievably profitable - and they save most of it and buy goods that will sell well in the North Korean markets, multiplying it".

He and others argue that exposing North Koreans to the outside world has to be positive. "We are still not a rich country, but we have gained a lot of experience in the past 20 years and more in shaping society and democratising. I think that's very important," said Bold. "There are a lot of opportunities for North Korea … It is very important they can see how there could be a transformation process."

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Avar LLC denies any government links in 5.01 billion yen bid for Chongryon HQ in Tokyo

October 25 ( The Director of Mongolian company Avar LLC stated, on October 24th during a press conference in Ulaanbaatar, that the bid won for the headquarters of the General Association of Korean Residents in Tokyo at an auction was done according to business rules.

The winning bid for the property, once hosted by a pro-North Korean association, was made Avar LLC for 5.01 billion yen, has recently been the subject of media speculation. 

The Director of Avar LLC, Ch.Erdenebat denies any government involvement in a bid for the property that has been the subject of media speculation. He told reporters that its bidding has "no links with any government bodies in Mongolia, Japan, North Korea or South Korea." 

The Director of Avar LLC, Ch.Erdenebat is the brother-in-law of Parliamentarian and former state wrestling champion D.Sumiyabazar (Mogi: who's the elder brother of Asashoryu)

Director of Avar LLC, Ch.Erdenebat told reporters that "the company participated in the auction via a Japanese law firm. It does not matter how much the company business is at the auction." 

The building also serves as the local branch of North Korea's Workers" Party, which acts as Pyongyang"s de facto embassy in Tokyo since the two governments do not have diplomatic relations.

Japan's Supreme Court ordered the building seized in 2012 for unpaid debts and put it up for sale in a public auction. But media speculation is high that a mysterious Mongolian company named Avar LLC has won an auction for the property worth 5.01 billion yen.

The Tokyo District Court has delayed a decision on whether to approve the sale until it clears that Avar LLC has any financial links with the General Association of Korean Residents in Japan (Chongryon). 

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Mongolian president to visit N. Korea

October 25 (AFP) Mongolia's president will visit Pyongyang next week, becoming the first head of state to meet North Korean leader Kim Jong-Un since he came to power nearly two years ago.

A spokesman for Mongolia's foreign ministry in Ulan Bator said President Tsakhia Elbegdorj would visit North Korea from October 28.

He declined to provide any other details of the trip.

Increasingly isolated within the international community over its nuclear programme, the impoverished North had asked Mongolia in April to help provide food aid.

In November last year, Japan and North Korea had senior-level talks in the Mongolian capital about the issue of North Korea's abduction of Japanese nationals, and Japanese media reported that Elbegdorj might raise the issue during his visit.

The president's trip marks the 65th anniversary of diplomatic relations. Mongolia was the second country to formally recognise North Korea after the Soviet Union.

Kim Jong-Un took over the reins of power in North Korea following the death of his father, Kim Jong-Il, in December 2011.

His highest-ranking foreign visitor to date was Chinese Vice President Li Yuanchao who attended celebrations for the 60th anniversary of the Korean War armistice in July.

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Mogi: very informative but little worried about how it's read a lot like a propaganda piece I would've seen in North Korea. Checked twice to see if copy-pasted it from somewhere but not mention.

North Korea's wish for good relations with Mongolia

October 25 / Mongolia has maintained and improved bilateral relations since it first established diplomatic relations with the Democratic People's Republic of Korea in 1948.

The first state level visit from Mongolia to the Democratic People"s Republic of Korea was made by Mongolian political leader Yumjaa Tsedenbal in 1956. Since then the state level visits were followed by the head of state of Mongolia Jamba Batmunkh in 1986, Prime Minister of Mongolia R.Amarjargal in 1999, Prime Minister of Mongolia, N.Enkhbayar in 2003, President of Mongolia N.Bagabandi in 2004. The leader of the Democratic People"s Republic of Korea, Kim Il Sung, visited Mongolia first in 1956  and later in 1988.

At the foreign ministry level, visits were conducted from Mongolian by the Minister of Foreign Affairs of Mongolia, L.Rinchin in 1974, Ts.Gombosuren in 1989, Sh.Altangerel in 1999 and L.Erdenechuluun in 2003 to the Democratic People"s Republic of Korea. From the North Korean side, DPRK Foreign Minister Heo Dam visited Mongolia in 1973 then former DPRK Foreign Minister, current president of the Presidium of the Supreme People"s Assembly, Kim Yong-nam visited Mongolia in 1985 and 1988.

The DPRK has embassies or consulates in very few countries. One of these few Embassies is in Ulaanbaatar, Mongolia. The DPRK Embassy was established back in 1951 but was closed in 1999. It re-opened in 2004.

Over the six decades of good diplomatic relations between Mongolia and the DPRK bilateral cooperation has been developed in many fields.  Mongolia has always been the country to lend a helping hand to the DPRK  when the country went through struggling times.

During and after the Korean war between 1950-1953 a big campaign to help the people of DPRK was launched in Mongolia. The Mongolian people collected and delivered 43,924 horses, 9,094 cows, 173,270 sheep and goats, a total of 226,236 livestock to DPRK along with 7,320 tons of food aid, meat and warm clothing, 129,000 pair of shoes and 5,000 tons of wheat. Mongolia took in 200 orphans who were raised with the help of eight Korean teachers and studied in Universities in Mongolia between 1952-1959. The free aid for DPRK did not end there. Mongolia delivered 1000 tons of wheat to the DPRK to help the people recover from heavy flooding in 1967.

One of the clearest memories that Mongolians still have is the kindergarten where the orphan children from North Korea were raised.

Until recently the two floored wooden house that once hosted those children was located near the Zaisan monument in Ulaanbaatar. The nurses and care-givers were still alive until recently.

Traces of the World War ...

The shadow of the II World War, which was the terrible experience in human history, separated Korea into two parts. Until that time there was only one Korea. However the II World War dragged the world"s great forces into a confrontation and divided them into allies and enemies leaving the world separated into two parts of ideology. The former Soviet Union and the Allied Powers partitioned the world marking their dominance in their own spheres of influence.

Europe separated into a communist section and capitalist section dividing Germany into two.

In Asia, USA recognized its dominance in Japan and the Pacific region then made Korea into two. It was not a surprise that the two Koreans who separated into two with their very different ideology and beliefs broke into war.

The Korean War between North Korea and U.S.-backed South Korea, which lasted from 1950 to 1953, was the biggest war during the Cold War. The Cold War separated the world into two parts of ideology.
The justification of the Korean war for the two countries was to seek union under one flag. Actually the war was purely an ideological war between US and the former Soviet Union along with China.

For Mongolia, it has maintained good bilateral relations and cooperation with both the DPRK and the Republic of Korea until this day. A historical moment proving that Mongolia has good relations was when Mongolia took part both the discussion for DPRK and the Republic of Korea to become members of the United Nations in 1991.

The process towards future reunification of the Democratic People"s Republic of Korea and the Republic of Korea was started by the June 15th North–South Joint Declaration in August 2000, where the two countries agreed to work towards a peaceful reunification in the future.

Geopoliticians say that North Korea has always wished to keep traditional good relations with Mongolia, which is important not only for bilateral politics and economics but also in the whole region and in the international arena. Mongolia is seen as a close partner to guide the North-eastern countries and even the key policy makers to form an understanding with the west.

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Mongolia Deepens Investment Ties With China

Prime Minister Says Deals—Including for Oil—Will Help on Infrastructure, Ties

Prime Minister Norovyn Altankhuyag said a raft of investment deals would help build up infrastructure and deepen ties with the country's largest customer for its resource exports.

BEIJING, October 26 (WSJ)—Mongolia on Friday unveiled a raft of new investment agreements with China—including an oil-exploration deal—that Mongolian Prime Minister Norovyn Altankhuyag said in an interview would build up the landlocked country's infrastructure and deepen ties with its largest customer for its resource exports.

The series of deals opens fresh fronts of bilateral cooperation at a time when the easing of a decadelong commodities boom weighs on Mongolia's growth, compounded by year-old nationalist policies in the resources sector that Ulaanbaatar is now trying to undo.

It also comes as Mongolia grapples with the impact of its strong economic ties with longtime rival China.

Under the agreement signed during an official visit to Beijing this week, state-controlled PetroChina Co. will lead oil exploration in eastern Mongolia, Mr. Altankhuyag said. He said Mongolia hopes to increase its crude-oil exports to China to 800,000 metric tons, or 5.86 million barrels next year. This would represent an increase of 38% from this year, he said. PetroChina didn't respond to a request for comment late Friday.

Mongolia's fledgling resources industry is by far its largest driver of growth, accounting for 85% of investments into Mongolia and 40% of state revenue. Foreign direct investment in this sector propelled Mongolia in 2011 to become the world's fastest-growing economy, according to World Bank data.

Mr. Altankhuyag said growth this year is still likely to be in the "double digits," though he said "there may be some slight decrease" from prior years. GDP growth fell to 11% in the first half compared with a year earlier from 12.2% last year and 17% in 2011. But foreign investment slid 47% in the first eight months from a year earlier, triggering an emergency parliamentary session this fall in Ulaanbaatar.

Mongolia was until last year seen by investors as a prime destination for capital. Its Tavan Tolgoi coal deposit is the world's largest, containing more than a billion tons of high-quality coking coal used to make steel. But plans for a $3 billion public offering never came to fruition as commodity markets faltered. Ulaanbaatar in July 2011 scotched an auction to develop the western portion of the coalfield that it first awarded to—and later took back from—China Shenhua Energy Co. Ltd., Peabody Energy Corp. of the U.S. and a Mongolian-Russian consortium.

Mr. Altankhuyag said Friday that Mongolia was now going to focus on building up its infrastructure before proceeding with Tavan Tolgoi's listing or reviving the bid process.

"Coal prices right now are not competitive, and we are pretty much focused not on how to exploit Tavan Tolgoi but how to develop the infrastructure for Tavan Tolgoi," he said.

Chinese coking coal prices have fallen 21% this year to 826 yuan a ton this week. Mongolia's biggest coal client isn't buying as much from its smaller neighbor this year. Mongolia coal exports to China have fallen 24% on year in the first nine months, compared with 7.8% growth in 2012, according to Chinese customs data, due to slower Chinese demand.

Coal is Mongolia's biggest export by value but Australia and Indonesia surpassed it this year as China's largest suppliers.

Mongolia has at times been wary of relying too much on China. It enacted a law designating "strategic sectors" including the mining sector in May last year after state-owned Aluminum Corp. of China, or Chalco, sought to pay $920 million for control of 800 million metric tons of Mongolian coal through a 60% stake in SouthGobi Resources Ltd. The deal fell apart after Ulaanbaatar then suspended some of SouthGobi's licenses. Earlier this year, Ulaanbaatar was also caught in a three-month spat with Chalco over the terms of a coal pricing deal.

Mr. Altankhuyag said he is hoping Mongolia could export as much as two billion tons of coal to China in 20 years. Mongolia is working with China's largest coal producer, Shenhua Group, on a border railway project, he said.

Mr. Altankhuyag said his country wants to build four new border trade checkpoints with China, up from the current one. Ulaanbaatar is also "in advanced stages" of shortlisting companies, including Chinese investors, that would be invited to invest in developing its rail lines.

Mongolia's railway is a symbol of how its desire to diversify its slate of strategic allies potentially conflicts with economic gravitation toward its historical rival and biggest customer China, which accounts for 80% of Mongolia's trade.

Mongolia has traditionally balked from changing its railway gauge, meaning the width of the rails, which it inherited from its days as a Soviet client and which remains 85 millimeters (or 3.4 inches) wider than the Chinese gauge. This means trains carrying coal from Tavan Tolgoi to China must switch cars at the Chinese border, adding to the cost of the Mongolian export.

Mr. Altankhuyag said it still wasn't clear if Mongolia will switch to the Chinese gauge for newer lines.

"The basic system will be in broad gauge, but we have not decided for a small part of the railway near the exporting points," he said.

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Chinese, Mongolian PMs pledge cooperation

BEIJING, Oct. 25 (Xinhua) -- Chinese Premier Li Keqiang and Mongolian Prime Minister Norov Altankhuyag held talks in Beijing on Friday, pledging to promote their strategic partnership and strive for pragmatic cooperation.

As important neighbors for each other, China and Mongolia have witnessed unprecedented comprehensive cooperation in various areas, Li said.

China has always followed the path of peaceful development and a good-neighborly foreign policy while prioritizing economic development, improving people's wellbeing and maintaining peace and stability in the region and the world, he said.

"This is China's basic concept in developing relations with neighboring countries," Li said.

Li said the Chinese government attaches great importance to relations with Mongolia and is willing to further the strategic partnership with Mongolia, following the trend of economic globalization.

In increasing political trust and strategic cooperation, Li said both sides should maintain high-level exchanges and cooperation in wider areas while supporting each other on core interests and issues of major concern.

China and Mongolia should vigorously build infrastructure and make overall plans for connectivity, including rail, road, natural gas and power transmission projects, the premier said.

He called for all-round trade relations with major projects cooperation as the locomotive. China supports Mongolia in constructing industrial parks and economic zones and is willing to discuss a free trade area on the border region, Li said.

China and Mongolia should strengthen financial cooperation and perfect the investment climate, including active enlargement of the currency swap scale and settling bilateral trade in local currency, Li said.

He also urged increased cultural and youth cooperation and exchanges between local governments.

Li called on both countries to use the 65th anniversary of diplomatic ties next year to consolidate people-to-people links, make arrangements for activities such as the Year of China-Mongolia Friendship, promote institutionalization of youth exchanges and set up cultural centers for each other.

Altankhuyag said his country admires China's development achievements, adding China's policy on friendly ties with its neighbors had created sound conditions for development.

Friendly relations with China are a priority of Mongolia's foreign policy, he said, vowing to further expand cooperation in such areas as trade, energy, interconnection, finance, agriculture and culture.

After their talks, the two premiers signed a document that outlines key areas of cooperation for the development of their strategic partnership in the medium and long term.

They also witnessed the signing of several agreements in trade, aviation, technology, finance and infrastructure construction.

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Chinese president meets Mongolian PM

BEIJING, Oct. 25 (Xinhua) -- Chinese President Xi Jinping met with Mongolian Prime Minister Norov Altankhuyag in Beijing on Friday and pledged to further advance the strategic partnership between the two countries.

Hailing the frequent high-level interactions between the two sides, Xi said China and Mongolia respect each other's independence, sovereignty, territorial integrity as well as path of development, looking after each other's core interests and major concerns.

Xi said mutual trust and traditional friendship had been growing in a sustained way over the past years.

This year, Xi met with his Mongolian counterpart Tsakhia Elbegdorj in September and Chairman of the State Great Hural of Mongolia, Zandaakhuu Enkhbold in April, and stated some basic principles for the development of the bilateral relationship.

Both China and Mongolia, as close neighbors, regard each other's development as an important opportunity and the two have seen ever-expanding economic cooperation in various areas, Xi said during Friday's meeting.

The 4,710-k.m. border between China and Mongolia is one featuring peace, stability and friendship, said the Chinese president.

Xi said, if the two sides stick to the principle of mutual trust and reciprocity, the China-Mongolia relationship will surely grow in a sustained, healthy and stable way, which will benefit the people of the two countries.

To further advance the bilateral ties, Xi proposed the two sides should increase high-level interactions, enhance strategic cooperation, expand the scale and improve the quality of practical cooperation and expand people-to-people exchanges.

China and Mongolia should communicate more frequently on strategic issues, he said.

As to economic cooperation, Xi said the two countries should give full play to their mutually complementary advantages and boost cooperation on mineral exploitation and infrastructure construction and in the financial sector at the same time.

Altankhuyag said Mongolia gives priority to the friendship and reciprocal cooperation with China in Mongolia's foreign policy.

Echoing Xi, the prime minister said the Mongolian side is willing to work together with China to maintain high-level interactions, expand practical cooperation, increase people-to-people exchanges and enhance coordination in international and regional affairs to enrich the content of the strategic partnership between the two countries.

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China, Mongolia sign document on long-term partnership

BEIJING, Oct. 25 (Xinhua) -- China and Mongolia on Friday signed a document that outlines key areas of cooperation for the development of their strategic partnership in the medium and long term.

The document was signed by Chinese Premier Li Keqiang and visiting Mongolian Prime Minister Altankhuyag Norov at the Great Hall of the People in Beijing after an hour of talks.

The two sides agree that the establishment of the Sino-Mongolian strategic partnership is a milestone in the development of bilateral relations while the signing of the new document will promote bilateral cooperation in various areas for the consolidation and further deepening of this partnership.

The two countries agreed to cooperate on the economy, security, social and cultural matters and on trade, acknowledging the need to mind each other's core interests and major concerns.

The two sides reiterated their respect for each other's independence, sovereignty, territorial integrity and development path,

The Mongolian side reaffirmed that the government of the People's Republic of China is the sole legitimate government representing entire China. It supports China's positions on Taiwan, Tibet and Xinjiang. The Chinese side said that it supports Mongolia's status as a nuclear-weapon-free zone.

The two nations agreed to carry out cooperation in military technology, fighting cross-border crimes and law enforcement.

The two sides determined principles in mineral resource development, infrastructure construction and financial cooperation.

Mutual investment will continue to enjoy protection, particularly in environmentally friendly projects and high-tech.

The outline elaborated on major projects in coal mining, railway construction and civil aviation, with legal and financial assistance to ensure progress.

The Chinese side also promised assistance to Mongolia to strengthen personnel training, and to provide 1,000 scholarships for Mongolians over the next five years.

The two countries agreed to strengthen communication and coordination on affairs regarding Northeast Asia's peace, security and development.

They will also improve the the discussion mechanism between China, Mongolia and Russia and establish channels at the vice ministerial level among the three countries.

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China's top legislator meets Mongolian prime minister

BEIJING, Oct. 25 (Xinhua) -- China's top legislator, Zhang Dejiang met with visiting Mongolian Prime Minister Norov Altankhuyag in Beijing on Friday.

Zhang, chairman of the Standing Committee of the National People's Congress (NPC), said China-Mongolia relations are currently enjoying their best time in history. He said China will firmly pursue the road of peaceful development and continue to carry out a friendly policy toward Mongolia.

"This will remain inalterable forever," Zhang said.

Zhang said the two economies are highly complementary. Noting that Mongolia's legislature, the State Great Hural, has recently passed a new investment law, Zhang said this is good news for China-Mongolia trade, economic cooperation and Chinese companies.

He said the NPC is ready to work with the State Great Hural to earnestly implement the memorandum of cooperation between the legislatures of the two countries by carrying out exchanges at all levels and strengthening the exchange of experience on legislation. He said the two sides should jointly create a sound legal environment for practical cooperation so as to lift inter-legislature relations to new levels.

Altankhuyag said it has been the stance of Mongolia's foreign policy to expand a friendly and neighborly relationship with China. He expressed the wish to deepen bilateral cooperation in all fields and advance the strategic partnership for sustained growth.

On Friday, Altankhuyag also met with Chinese President Xi Jinping and held talks with Premier Li Keqiang.

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Results of Canadian State Visit to Mongolia

By Dr. Julian Dierkes

October 25 (Obviously, state visits have symbolic purposes and motivations, but they are also the occasion for announcements in a bilateral relationship. I tried to guess at what the intentions for the state visit to Mongolia by Governor General David Johnston were ahead of the visit.

Visa-Free Travel for Canadians

I was clearly right on the most concrete outcome that was announced during the visit, namely 30-day visa free travel to Mongolia for Canadians as of January 2014. This announcement was very much in line with Mongolia's recent initiatives to extend this visa-free travel privilege to a number of partner nations. As the citizen of a privileged nation (in my case, Germany) who enjoys visa-free travel to many countries of the world, it's important to remember what a privilege this is. I'm always reminded of this when I interact with Mongolians and learn about their tribulations in planning travel to various countries that do not reciprocate this visa-free travel status.

The announcement was made during the meeting of President Elbegdorj and Governor General Johnston in the morning of the first day of the State Visit.

Other news and concrete steps have been sparse. In his speeches (to the Mongolian parliament and at a state dinner) the Governor General has referred to similarities between Canada and Mongolia frequently, has emphasized people-to-people contacts, and has pointed to Canadian investments as well as past support for Mongolia (like the curriculum for democracy that was pursued during Mongolia's chairmanship of the Community of Democracies).

Education in the Canada-Mongolia Relationship

It is noticeable, but perhaps not surprising given the Governor General's academic background, that education has been of central concern in a number of the meetings. Especially when it is lumped together with "people-to-people" bilateral relations, this emphasis was not only reflected in the Governor General's speeches, but in his schedule as well which included a roundtable discussion focused on education. The Mongolian participants in this discussion included representatives from all the public universities and Ms Oyungerel, Minister of Culture and Tourism. Ms Oyungerel also expressed her surprise and delight at the inclusion of a special session on education in the schedule.

At this meeting, I noted as an aside, that we had organized a somewhat similar discussion of education for the visit of then-President Bagabandi in 2004, pointing to a nice symmetry in the concerns with education. It was this visit by the Mongolian president that provided some of the impetus for the pursuit of Mongolia expertise at UBC and I very much hope that the roundtable in Ulaanbaatar may have a similar impact.

Mongolian participants in the roundtable gave an overview over their institutions (representatives from universities) as well as over educational policy (from the Ministry of Education). In these remarks as they pertained to higher education, there was a clear focus on the improvement of quality over an expansion of quantity in higher education, a bit of a refrain from Mongolian policy-makers in recent times.

Canadian participants in turn highlighted their interest in Mongolia and potential collaborations in areas such as distance education, the fostering of research capacity, and academic standards.

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Governor General of Canada: Address to the State Great Khural (Ulaanbaatar, Mongolia)

Ulaanbaatar, Mongolia, Friday, October 25, 2013

Thank you for your warm welcome.

It is truly a great honour to be invited to address the State Great Khural, and to be the first governor general of Canada to undertake a State visit to Mongolia.

My wife, Sharon, and I arrived late last night, and already we are getting a sense of the magnificent hospitality of Mongolians. We are delighted to be here.

Let me begin by offering greetings and best wishes on behalf of all Canadians.

As you know, this year marks the 40th anniversary of diplomatic relations between our two countries, and I would like to take this opportunity to thank the people of Mongolia for being such good friends and partners of Canada.

This year also marks another milestone—one of shorter duration, perhaps, but of no less significance to our present and future ties: the 5th anniversary of the resident Canadian Embassy here in Ulaanbaatar.

Canadians and Mongolians may be separated by geography, but we are united by bonds of shared experience capable of transcending great distances. Let me underline all that we have in common.

We are alike in our affection for our distinct and proud histories and cultures. 

We are alike in our sense of being custodians of vast, challenging and beautiful lands.

We are alike in our reverence for democracy, for human dignity and rights, as well as for the rule of law.

While our relationship has in recent times been centred on commerce, particularly resource development, today it embraces a diverse—and growing—array of shared activities and interests

I am pleased by this growth. It signals to me that our relationship is evolving into the kind of truly sophisticated, rich partnership that our two peoples deserve, and that is needed to meet the challenges of a complex and changing world—where we work for peace, security and good governance.

Today, Canadians and Mongolians are expanding our ties and learning about each other in new and exciting ways.

For example, Canadians from all walks of life have witnessed with hope and admiration the evolution of Mongolia's democratic practice. And, as an expression of our commitment to a long-term partnership with Mongolia, we have done more than just observe—we have actively invested, together with Mongolians at all levels of society, in the effort to strengthen this country's democratic governance. 

We are working together for improvements in public service management, better policing practice, legal and judicial reform, and enhanced local government capacity.

We are also working to develop the administrative and legislative strengths of this critical institution, the State Great Khural.

Canada is partnering with Mongolia in these endeavours because we believe that building strong, transparent and efficient judicial, public service and legislative institutions is both the "smart" thing to do and the "right" thing to do.

It is right and smart because we believe that good governance reinforces democracy, human rights and the rule of law.  

It is right and smart because we believe that well-functioning institutions are also the foundation stones for the economic development to which Mongolia's citizens overwhelmingly aspire.  In this regard, permit me to underline my own sense of the indispensible role of this Khural, and you as legislators, to that goal.  Your work has direct, lasting impact on the trajectory of Mongolia's development.  The laws created here either promote a predictable, supportive environment for business and the  economic betterment of your great nation and its citizens, or do not.

I am therefore pleased to learn that Canada and Mongolia are examining possible longer-term support to develop a more professional, non-partisan, accountable, transparent and citizen-centred Mongolian public service.

And I am additionally pleased by the strengthening level of commercial exchanges between our two countries.

We have great potential to expand and diversify our economic ties for mutual benefit. I understand that education and building technologies are two specific areas where there is potential for further growth.

On the international stage, we are joint members of no fewer than 35 international organizations. Canada has been a strong and consistent supporter of Mongolia's successful efforts to join such fora as the Organization for Security Co-operation in Europe. We are also partners in NATO and the Community of Democracies.

On that note, I would like to congratulate Mongolia on the completion of its term as chair of the Community of Democracies, and most especially for the advancements in protecting and enabling civil society that were made under Mongolia's leadership.

This objective is one Canada also holds dear; Canada is proud to chair the Community's Working Group on Civil Society. In particular, I would like to highlight the joint efforts of Canada and Mongolia to develop a "curriculum for democracy education," which I understand will be deployed in Mongolia's school systems as well as in a number of other Community member states.

Canadians understand that we derive great benefit from engagement with the wider world. 

We also know that, with that engagement, there comes a responsibility to act in the defence of good international governance and peace.

I would therefore like to take a moment to salute the efforts of Mongolia's servicemen and servicewomen who, in UN-led peacekeeping operations in Sudan and other locations far from their homes and loved ones, are working to secure international peace and stability.

Canada, through its military training programs, is also contributing to the development of Mongolia's international peacekeeping capacities and efforts. Working together, we believe we can foster regional and global security and help bring about a more fair, just and peaceful world.  

I would like to thank you again for the gracious invitation you have extended to Sharon and me to visit Mongolia. We are looking forward to learning and seeing as much as we can of this fascinating country in the short time we have here.

I began my comments today by noting that we are on the threshold of 40 years of diplomatic recognition—an anniversary we will formally celebrate in November of this year.  In those 40 years, our relationship has grown beyond the bounds of diplomacy into a robust and living friendship—one that exists on many levels and in many spheres of activity. 

In 1973, Mongolia was a different place than the one we know now; in many ways, so is Canada. What matters is how far we have come, together.  

For its part, Mongolia continues to undergo an extraordinary evolution. Whatever challenges you may face, and whatever opportunities arise, Mongolians should know that they have no more committed partner than Canada—today and in the years to come.

Let us therefore continue our work together.

Thank you.

Link to speech

State Dinner Hosted by His Excellency Tsakhiagiin Elbegdorj, President of Mongolia, and Mrs. Bolormaa Khajidsuren (Ulaanbaatar, Mongolia)

Breakfast with Business Leaders (Ulaanbaatar, Mongolia)


Governor General of Canada: Visit to Mongolia - Day 1

October 24 (Rideau Hall) --

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Intergovernmental committee meeting between Mongolia and Russia scheduled

October 25 / An Intergovernmental committee meeting between Mongolia and Russia is scheduled to happen on Friday November 6th. At the meeting it is expected that the Mongolia-Russian Joint Ventures "Ulaanbaatar Railway", Erdenet  Mining Corporation and MonRosTsvetMet will be discussed.

According to a source close to the matter several officials came to "Ulaanbaatar Railway" Mongolia-Russian Joint Venture to prepare for the Intergovernmental committee meeting.

Local reports speculate about the timing of the Intergovernmental committee meeting between Mongolia and Russia after the Prime Minister`s state visit to China.

Public sources have focused on the possible changes that might be made to the National Security Council`s guidance, State policy on railway transportation and related resolutions and decisions.

These hot topics to be discussed at the Intergovernmental committee meeting scheduled on November 6th making the meeting an anticipated event. However, some sources say that the meeting might be delayed.

Apparently several other important issues in addition to the railway are listed to be discussed at the meeting. Talks are scheduled on making IPO international market for the Erdenet Mining Corporation gold, copper and molybdenum resource and the Asgat gold, silver, copper, molybdenum and rare earth deposit owned by MongolRosTsvetMet company, which have previously been in development for decades with no progress. But now infrastructure works are rapidly progressing for development of the Asgat deposit in order to move the talks on.

Local media report the new ambassador from Russia to Mongolia will be included in the committee to play an active role.

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Social, Environmental and Other

Mongolia Climbs Back 11 Spots to #33 in Global Gender Gap Index 2013, #4 in Asia-Pacific

(World Economic Forum)

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Nicolas Cage dinosaur skull 'may have been stolen' from Mongolia by Eric Prokopi

A tyrannosaur skull bought by actor Nicolas Cage for $276,000 is at the centre of a US fossil smuggling investigation

October 26 (The Telegraph) A dinosaur skull bought by the actor Nicolas Cage is at the heart of an investigation into illicit fossil smuggling.

The 67-million-year-old skull of a Tyrannosaurus bataar, a close relative of the T rex, was bought by Cage in 2007 at an auction in California. By the time the auctioneer brought down his gavel, Cage had outbid fellow actor Leonardo DiCaprio by phone, paying $276,000 for what The Telegraph described at the time as a "ferocious-looking addition to his fossil collection".

However, The Telegraph has now discovered the skull was obtained by IM Chait – an auction house in Beverly Hills – from Eric Prokopi, a self-described "commercial palaeontologist" who pleaded guilty last year to illegally importing fossils from Mongolia and China.

Prokopi – who was arrested last October after selling a huge skeleton of a T bataar for $1 million – is now facing up to 17 years in prison.

"Nicolas Cage's specimen came from Prokopi," said David Herskowitz, who was the director of IM Chait's natural history department at the time of the sale.

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Defending Champion Ser-Od Finishes Second at Osaka Marathon

OSAKA, October 28 (The Yomiuri Shimbun)—Jackson Limo made the most of his first marathon.

The Kenyan ran like a seasoned veteran as he sped to victory in the 3rd Osaka Marathon on Sunday, winning in 2 hours 12 minutes 6 seconds and edging last year's winner Ser-Od Bat-Ochir of Mongolia.

Bat-Ochir was second in 2:13:31.

Japan's highest finisher was Atsushi Hasegawa, who was third in 2:15:53.

On the women's side, another Kenyan broke the tape as Monica Jepkoech stormed to the finish in 2:39:23.

But the surprise was Yuri Yoshizumi, who rose up from the general field of runners to grab second place in 2:41:00.

Kiyoko Shimahara was third among women, crossing the finish in 2:44:37.

"I wanted to win the race and I tried to catch up with the leader," Yoshizumi said. "I'm glad the result was good and I think this will make some of the general runners think, 'I'm going to work harder,' and I myself will continue to compete as an unaffiliated runner. I hope I can become the female version of [the people's runner Yuki] Kawauchi."

The race, coorganized by The Yomiuri Shimbun, began at 9 a.m. and featured a field of 30,000 runners who were selected from among 151,000 international and domestic applicants.

About 10,000 volunteers offered support along the course and at drink stations. The course serves as a virtual autumn tour of the Osaka area and thousands of spectators lined the streets and filled the air with shouts of supports for the hard-working runners.

The marathon started at Osaka Castle Park, stretched along Osaka's main boulevard of Midosuji, twisted through areas including Kyocera Dome Osaka and Tsutenkaku Tower before bringing runners to the end in the southern section of the port area called Intex Osaka.

The Osaka Marathon also offers a unique chance for runners to choose from eight charities, environmental restoration and the fight against cancer among them, and pay at least ¥1,000 per person to run.

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October 25 (InfoMongolia) The last day of the 2013 AIBA World Boxing Championships will be held in Almaty, Kazakhstan on October 26, 2013.

It was previously informed that the only boxer representing our team was continuing his bouts in the Men's Light Welter, Merit Athlete of Mongolia U.Munkh-Erdene (64kg).

In the Semifinals, U.Munkh-Erdene, who secured a Bronze medal in the 1/8 Finals, faced against Cuban boxer Lopez Yasnier for Silver medal contest, but unfortunately our boxer was defeated by 0:3 (27:30, 27:30, 27:30).

Consequently, London Olympics Bronze medalist becomes the World Boxing Championships Bronze medalist.

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Mongolians target success on the darts world stage

Darts federation hopes to woo players away from traditional sports of wrestling, riding and archery – and defeat the English

By Tania Branigan

October 25 (The Guardian) Mongolians have long prided themselves on their prowess in the three "manly" sports: wrestling, riding and archery. But now they are sweeping to victory in a new field, where sharp eyes and competitive focus are every bit as crucial – darts.

"When we first began participating, people would say: 'How can you guys play? We thought you lived in gers [felt tents] and rode horses; do you even have buildings?'" said Erdene Mandakh, president of the Mongolian Amateur Darts Federation.

"Now they have stopped asking; they just see us as competitors. But this is only the beginning."

Britain's own manly sport takes little room, uses cheap equipment and is suited to Mongolia's fierce winters, when temperatures can sink to -40C.

"In China, ping-pong is pretty much the national sport. We want to bring darts to that level," said Odbileg Khayankhyarvaa, who co-founded the federation in 2009.

The two men were among the earliest to discover the game, in the early 1990s. "My generation of Mongolian darts players didn't know anyone other than John Lowe, Eric Bristow and Dennis Priestley," said Erdene.

These days, novices have it easy: they can watch their fill of matches via the internet. "But back then, said the 35-year-old, "you would get one video that someone brought back from Russia, maybe. That would be a huge deal. There was no colour TV and hardly anyone had a video player. You would finally find a machine and everyone would gather and you would sit and watch it all night."

In those days, dartboards were usually found in markets, with people betting on the outcome. Baatar Tsend tried her hand one day and discovered she was a natural. Soon it became an obsession. "There is nothing bad about darts," said the 49-year-old, twice national women's champion. "If I compare it to a person – I would say I am in love with darts."

Her passion is such that she played on even when a nearby stove set fire to her fur coat, too absorbed to notice until a strange smell wafted to her nostrils. On the verge of going into labour, she persuaded friends to smuggle her a dartboard through a hospital window so that she could train. Last year, she insisted on competing one day after her appendectomy, although unable to stand up straight to throw. Hovering at the oche at an Ulaanbaatar leisure centre, darts in hand, she analysed the roots of her devotion. "Since ancient times our people have been practising archery and ankle bone shooting," she said. "They've got great aim, so maybe this is in our genes or something: our special Mongolian genes."

History does not record whether Genghis Khan cried salt tears when he realised there were no more worlds to conquer. But Baatar wept with joy when she saw her friend Erdenechimeg Dondou, just 38, clinch the women's gold medal at the Darts World Cup in Shanghai this August.

"I was so joyful and excited I didn't even realise I was jumping up and down on the podium," recalled Erdenechimeg, who trains before and after her work at a power plant each day. Just a few months earlier, Erdenechimeg and Erdene took gold in the mixed doubles at the Asian Darts Tournament. "My dream is that, in the near future, I'll go to the birthplace of darts and compete against British players," she added.

The players offer numerous explanations of the game's appeal: it teaches calmness and focus, improves your mental arithmetic, suits all ages and statures and even boosts your health. "They say that with billiards, you walk five kilometres in an hour. In darts, you do probably more. Ten kilometres," Odbileg claimed.

That seems a generous estimate. But the players are certainly less portly than one might expect, perhaps because they have shunned beer for soft drinks in the hope of winning government backing.

China is another darts latecomer but has a specialist school already, they point out. They are also seeking commercial support and new ways of wooing potential players to supplement the 2,000 already converted. They have promoted the game at the annual Mongolian scout jamboree and at outdoor events in the snow; through companies and government departments; and most of all, to their nearest and dearest.

Erdene's wife and two elder sons are enthusiasts and even his toddler has his own set of darts. "He laughs and smiles when he sees the board," his father said proudly. "Inside my home it's darts - and outside the home it's darts … My life is all about darts.

"Of course, our dream is to play against English people and beat them. Our dream is to defeat the English. Our dream is to become world champions."

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YVCC lecture to focus on Veterinary mission work in Mongolia

YAKIMA, Wash., October 26 (Yakima Herald) — A veterinarian talking about her experiences working with livestock in Mongolia will be the first speaker in the Yakima Valley Community College's faculty lecture series.

Dr. Kelley Denome, a YVCC instructor, traveled to Mongolia in 2011 to provide training to local veterinarians and nomadic herders with the Christian Veterinary Mission.

On Nov. 13 at 7 p.m. she'll talk about her experience and the culture of the Mongolian herders who make a living grazing livestock on the move. The lecture will be in the Parker Room on the YVCC Yakima campus.

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Missionary team plants Catholicism in Mongolia, but challenges remain

PERTH, Australia, October 25 (Catholic News Service) — When Bishop Wenceslao Padilla arrived in Mongolia with two other missionary priests in 1992, there were no Catholics in the Central Asian country.

His mission was much like that of the early apostles: to take Catholicism to a land that had not yet encountered it.

Twenty-one years later, there are more than 900 Catholics in Mongolia, 71 religious priests and sisters from 12 congregations, four Catholic parishes and a 600-seat cathedral in the capital, Ulan Bator.

In a recent interview while visiting Perth, Bishop Padilla said he found the progress of the Catholic Church in the former communist nation astounding, but that challenges remained.

He told The Record, newspaper of the Archdiocese of Perth, that while he was pleased with the gradual spread of Catholicism, the Mongolian church remains very much in its infancy.

"When I see the people who have joined the Catholic faith, I am really very happy," he said.

"But there is a pinch of sadness, too, because, of the 900 converted Mongolian brothers and sisters, around 19 or 20 percent are already leaving the church. The nomadic mentality is still very active in the Mongolian life."

Reversing that trend is a major challenge, he said, noting that other important issues also require attention. Among them is the government's recently adjusted quota system for foreign missionaries.

Previously, for every 40 foreign missionaries working for the church, 60 locals were required to be employed. But the quota has increased.

"Now, for every 25 foreign missionaries, you have to employ 75 Mongolian locals, but we cannot have any more local workers. We don't have the money to pay salaries," Bishop Padilla said.

The unexpected change caught the Mongolian church off guard.

"We are around 16 missionaries over the quota, so either we have to send the 16 away or to increase our workers by another 66, added to the 200 Mongolians we already have," Bishop Padilla explained.

While negotiations with the government have given the church time to amend the imbalance, Bishop Padilla said Catholicism in Mongolia remains under constant threat.

"The government is trying to tell us that we are not to teach religion in our schools; if we teach religion it should be in the church premises," he said.

Even so, the missionary team opened the first Catholic elementary school in September 2012 and has 85 children in its kindergarten class and another 60 on a waiting list. To the bishop, that is a hopeful sign.

Establishing Catholicism in Mongolia was the last thing the Philippines-born bishop expected to be doing in ministry. After his ordination for the Congregation of the Immaculate Heart of Mary in 1976, his first assignment was as a parish priest in Taiwan. After five years, he was named regional superior for the order there for another six years.

After the collapse of communism in 1989, Mongolia began to establish diplomatic relations with countries worldwide, including Vatican City.

That led Blessed John Paul II to ask the congregation to lead the missionary work in Mongolia. Bishop Padilla, then a priest, volunteered when the order appealed for priests to initiate the effort. The bishop said he was inspired largely by the example of his father, who died shortly before the mission in Mongolia began.

"He had been a religious educator and a catechist for 36 years," Bishop Padilla recalled. "He was doing missionary work in the mountain provinces of the Philippines. I owe him a lot and also my mother, who is still alive. She is 97 years old."

The three priests started with nothing. Mass was celebrated in parlors and living rooms in apartments they rented. As the number of Catholics grew, seven times they moved to larger venues. In 2003, the Cathedral of Sts. Peter and Paul was dedicated.

Mass also is celebrated in four parishes and five other locations in Ulan Bator.

The Mongolian capital has undergone a major transformation since the mission began. Today, the city has high-rise buildings and a growing market-based economy, he said.

While some foreigners still call Mongolia "the hardship country," Bishop Padilla said living conditions are improving and the number of homeless children is declining.

"But we still have people who are very poor," he added.

Remnants of the communist regime remain in the minds of some people, particularly government officials, Bishop Padilla said.

"They don't like religions to operate. They think we are the opium of the people. But it's getting less and less, because many of these government officials now are young people who have been educated in Europe or democratic countries," he said.

About 80 percent of Mongolia's population of 2.8 million practices Buddhism. In addition, some 200 Protestant denominations are reaching out to people who may never have encountered any organized religion before.

But Catholicism is making steady progress, and Bishop Padilla said he feels fulfilled with the work being done, especially through two centers for orphaned children. He expects the efforts will change the nation for the better.

"I would like to change the mentality of the people from nomadic to a sedentary form, which is civilization," he said. "That means a lot of education has to be inculcated in the minds of the people, starting from the lowest levels of education to the highest levels."

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