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Tuesday, November 26, 2013

[MGG sells Mandal to UMC, GoM signs deal to support gold mining, Elbegdorj on Singapore visit, and UB-Tokyo flights to be 7 times/week]

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Tuesday, November 26, 2013

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Overseas Market

Although an announcement was made in 2012 for UMC to purchase an initial 16% stake in Mandal, the deal hadn't closed, and thus this sale represents a 100% acquisition of Mandal by UMC. YAK closed -3.21% to C$2.41 on Monday

Mongolia Growth Group Ltd. Announces the Sale of Mandal General Daatgal LLC

Ulaanbaatar, MONGOLIA, November 25, 2013 /FSC/ - Mongolia Growth Group Ltd. (YAK - TSX Venture),("MGG" or "the Company") is pleased to announce that UMC Capital LLC ("UMC Capital") has agreed to purchase 100% of Mandal General Daatgal LLC ("Mandal"), subject to the approval of the TSX Venture Exchange, the Financial Regulatory Commission of Mongolia and the satisfaction of certain closing conditions. 

Over the course of 2013, the management and board of directors of MGG has determined that, while Mandal has continued to make progress, it is non-core to the Company's much larger property business that has been created over the past two and a half years. This sale will allow the management of MGG to focus its energy, corporate resources and capital on its core commercial real estate business with the goal of creating the most successful institutional property company in the rapidly growing economy of Mongolia. 

The benefits of this divestiture will accrue to both MGG and Mandal. 

In the case of MGG, it will lead to; 

* The release of capital to re-invest in the property business

* Substantial annual cash savings in the form of reduced audit, compliance, legal and other expenses along with the retention of rental payments from Mandal at market rates, 

* Approximately Cdn$85,000 in stock option expense savings in the year 2014, 

* More predictable revenues and expenses by focusing MGG exclusively on the property sector, 

* Financial statement simplicity as they will relate entirely to the property business, and 

* Streamlining the business from the perspective of potential lenders to property assets. 

In the case of Mandal, it will lead to; 

* More direct incentivization of management through the direct ownership of Mandal. Employees of Mandal will be involved in the management group that will be buying Mandal from MGG, and 

* Ability to access more diversified forms of growth capital. 

Under the terms of the agreement, MGG has agreed to sell 100% of its shares in Mandal General Daatgal LLC to UMC Capital LLC for gross proceeds of approximately 5.90 billion Mongolian Togrog (approximately Cdn$3.50 million), representing a surplus of approximately 900 million Mongolian Togrog (approximately Cdn$542,000) from MGG's original contribution after accounting for a 1.24 billion Mongolian Togrog (approximately Cdn$746,000) release of statutory capital to MGG. In addition, this sale price represents an expected 2.7 billion Mongolian Togrog (approximately Cdn$1,627,000) premium to second quarter, 2013 net tangible book value. 

As part of the sale, UMC Capital will make an immediate payment to MGG of 650 million Mongolian Togrog and additional payments of approximately US$3 million, to be paid in installments over the ensuing 18 month period. In addition, MGG expects to accelerate the vesting of the remaining 300,000 MGG options owned by UMC Capital LLC, subject to TSX Venture approval. The amended options are expected to have a strike price of Cdn$1.75 as compared to the current Cdn$1.64 strike price. Finally, MGG will cancel 307,000 stock options that are currently outstanding to employees of Mandal General Daatgal LLC. 

"Disposing of Mandal will allow MGG to lower its cost structure and re-focus the business on property assets that are leveraged to the growth of the Mongolian economy," said Harris Kupperman, Chairman and CEO of MGG. 

"We want to thank our friends at Mandal for all of their help in educating us on the Mongolian market. Our early success in the property market would not have been possible without their support. We hope to continue doing business together in the future as MGG intends to keep 100% of its insurance coverage with Mandal on a going forward basis and Mandal has indicated a desire to remain a tenant in the Mandal building-our corporate headquarters." 

"I want to thank our friends at MGG for their support in helping us to launch a company with the vision to create the largest, most innovative and most responsible insurance company in Mongolia. Mandal now enjoys a solid reputation as a major risk management institution in Mongolia and our operations shall continue reflecting the best international standards," said Ganzorig Ulziibayar, President of Mandal and Chairman of UMC Capital. 

Subject to TSX Venture Exchange approval, MGG expects that this transaction will be closed during the fourth quarter of 2013

For more information on Mongolia Growth Group Ltd., please see our website: www.MongoliaGrowthGroup.com

Link to release

 

All Roads Lead to Mongolia for Chairman and CEO of Real Estate Company Mongolia Growth Group

Mr. Harris Kupperman shares insight into the fast growing economy and why his company is positioned there

New York, NY, Point Roberts, WA - November 25, 2013 (Investorideas.com Mining stocks newswire) Investorideas.com staff: Investorideas.com, an investor research portal specializing in sector research for independent investors issues an exclusive interview with Mr. Harris Kupperman, Chairman and CEO of publicly traded real estate company in Mongolia. Mongolia Growth Group (TSX.V YAK; OTC: MNGGF).

Mongolia is currently one of the fastest growing economies in the world, fuelled by a mining boom. Mr, Harris Kupperman shares insight into both the opportunites and the obstacles and why investors should be taking note of this new frontier.

Q: Investorideas.com

For investors that don't know your company, can you give a brief history and summary of why you are positioned in Mongolia and what directed you there personally?

A: Mr, Harris Kupperman, Chairman and CEO

Over the past decade, Mongolia has been one of the world's fastest growing economies with growth rates as high as 17% in 2011 and over 11% in the first 9 months of this year. Over the next decade, I think that the growth rate accelerates as the giant mines ramp up their production of copper, gold and coal. This will create a massive wealth boom. As an investor, I want to go where the growth is--hence Mongolia.

The problem was that before we built MGG, there was no way to get exposure to that growth. There are a handful of mining companies, but I don't know anything about geology. What I know is that these mines are being built and the average Mongolian will see a huge increase in his net worth because of the mines. That will translate into a boom in consumer spending and I wanted to get leverage to that growth, so I built MGG to put my own money into Mongolia. To date, I've invested over $3 million in shares of MGG. With the help of other investors, many of them close friends; we have raised capital and built a portfolio of assets focused on the growth of the consumer.

Of course, given the dramatic GDP growth that we've already seen since we started the company, we have sizable gains on our property portfolio. However, this is just the beginning. If you look at the evolution of cities, it is all about going to the capital city, acquiring properties in the best locations and then letting the economic growth work for you. There is over $2 trillion worth of resource wealth that is in the ground, and that wealth will be mined over the next century. This will be a very long- term bull market.

Q: Investorideas.com

What has your portfolio consisted of to date? - And you note in your last newsletter that you are shifting company assets away from smaller properties that are proportionately more expensive to maintain and manage; towards larger institutional-quality assets that are easier to scale. Can you expand on this strategy?

A: Mr, Harris Kupperman, Chairman and CEO

When we first arrived in Mongolia, the key was to learn how to do business there--to learn how the market worked--so we purchased about 30 smaller properties. This gave us a great early portfolio where the risk of making a mistake in portfolio selection was negligible in terms of our company's future. We got to build a management team around those assets and it is now the only institutional property platform in Mongolia.

We are now selling those assets as we have learned the necessary lessons. Our focus was always to own larger, institutional quality assets that are tied to consumer spending and we are migrating into those assets. In another year, our portfolio will consist primarily of retail assets on the main streets in downtown Ulaanbaatar.

When Mongolians go out shopping or dining, we want them to be doing it at our locations. Thus far, we are quite happy with the results. If you look at our numbers, in October, our average rent increased by 21.4% compared to the prior year. That is pretty much unheard of in a mature real estate market like you find in the United States. Getting growth plus income at the same time is the reason that I've gone to invest in Mongolia.

Q: Investorideas.com

Can you give us first hand insight as to what kind of changes and expansion you are seeing in Mongolia?

A: Mr, Harris Kupperman, Chairman and CEO

In the past 3 years we have seen dramatic change in every aspect of the economy. To start with, the GDP has almost doubled. Think about that for a second--the GDP has doubled!

This has led to a consumer boom and a sizable middle class. We see new businesses popping up everywhere to supply goods to these consumers. Everyone is buying a new car or getting a bigger apartment. Everyone wants the things that we take for granted here in the West--and for the first time, Mongolians can afford those things.

In addition, we have seen the government really embrace this growth. This summer, the government passed multiple laws targeted at increasing foreign investment and making the business climate even friendlier to foreigners. Over time, I think Mongolia will become a favored place for foreign investment, much like Singapore or Dubai.

Q: Investorideas.com

In your recent newsletter you note that On October 28, the Ministry of Mining for Mongolia signed an MOU with China's Shenhua Group Corp. to supply 1 billion tons of coal over the next 20 years. What environmental concerns does that raise to your as a real estate company? And on that note do you think Mongolia can learn from the environmental mistakes China made in its rapid industrial expansion?

A: Mr, Harris Kupperman, Chairman and CEO

In terms of our operations, I think that the environmental impact will be negligible. These mines are hundreds of miles from Ulaanbaatar. Mongolia is working to improve the environmental impact of mining. In terms of making the mistakes that China has made, you have to remember that Mongolia is a democracy. If they do not adequately monitor the mines, the politicians will be voted out. This is a big difference when compared to China--so politicians are taking the environment quite seriously here.

Q: Investorideas.com

What do see as the biggest opportunity and challenge over the next five years as growth accelerates?

A: Mr, Harris Kupperman, Chairman and CEO

No country has ever grown as quickly as Mongolia currently is. The biggest challenge is that things are simply growing too quickly. The demand for things like electricity and transportation infrastructure are outstripping the ability of the country to add capacity. That's what happens when your economy grows at 1% a month. The government is working to address these issues, but no country has ever grown as quickly as Mongolia is--so there is no playbook to work off of. It's difficult to plan for the needs of the country in 5 years. Unfortunately, if you don't start planning for power plants today, they won't be ready in 5 years.

In terms of opportunities, when your economy doubles every three to four years, everything is an opportunity. I think the real thing is to figure out what Mongolia will need in five years, and then bring it to Mongolia in two years. For us, that means upgrading our retail locations and getting ready for the day that international brands show up and need top quality locations. We want to be the first choice as landlord for all of these brands and over the past year, we have been approached by numerous international brands that are looking to set up a presence in Mongolia.

Q: Investorideas.com

Currently you state you are the only publicly traded company positioned in your space in Mongolia? Do see signs of that changing anytime soon with new players coming to market?

A: Mr, Harris Kupperman, Chairman and CEO

I am actually quite surprised that no one else has shown up and tried to copy us--especially given the success that we've had. I am sure that they will come, but the longer that takes, the stronger our first-mover advantage will become. Naturally, I welcome the competition as it validates what we've created thus far.

MGG (YAK: Canada & MNGGF: USA) is a fully integrated and self-managed real estate investment company, and one of the largest owners and operators of high-quality commercial properties in downtown Ulaanbaatar, Mongolia. The Company focuses on acquiring, owning, managing, and redeveloping top-tier retail, commercial, and office properties that are strategically located, undervalued, and possess significant supply constraints. Learn more at www.MongoliaGrowthGroup.com

Link to article

 

SouthGobi Resources Provides First Bi-Weekly Update on Restated Financials

HONG KONG, CHINA--(Marketwired - Nov. 25, 2013) - SouthGobi Resources Ltd. (TSX:SGQ)(HKSE:1878) (the "Company"). Reference is made to the announcements of the Company dated November 8, 2013, November 11, 2013 and November 14, 2013 ("the Announcements") in relation to the decision by the Company board of directors to restate the Company financial statements for 2011 and 2012 (collectively, the "Restated Financials").

The Company has voluntarily decided to provide bi-weekly updates in respect of the Restated Financials in accordance with the Alternative Information Guidelines under National Policy 12-203. The Chief Financial Officer of the Company has authorised this update.

The Company advises that since the Announcements there have not been any material changes to the information contained therein. The Company continues to work expeditiously with PricewaterhouseCoopers LLP, the Company's current auditors, and Deloitte LLP, the Company's auditors during the 2010 and 2011 fiscal years, to complete the Restated Financials as soon as possible. The Restated Financials are expected to be available on or before December 13, 2013.

The Company reports that there has not been any failure by the Company to fulfill its intentions as stated in the Announcements, and there are no defaults. Further, there is no additional information in respect of the Company and its affairs that has not been generally disclosed as of the date of this update.

The Company's Management has been enhancing internal controls over financial reporting by developing a more thorough review process in evaluating complex sales arrangements in each reporting period. The remedial controls that have now been implemented must operate for a sufficient period of time before management can conclude, through testing, that these controls are effective and therefore that the material weakness identified and referred to in the Company's Third Quarter 2013 Financial and Operating Results can be considered remediated. Management expects this to be achieved by December 31, 2013.

Until the Restated Financials have been filed, the Company intends to continue to issue bi-weekly updates in accordance with the Alternative Information Guidelines, which will also be filed on SEDAR. The Company will file its next bi-weekly update on or around December 9, 2013.

Link to release

 

1733 closed flat at HK$0.56

Moody's upgrades Winsway (01733) to Caa3; outlook negative

[ET Net News Agency, 25 November 2013] Moody's Investors Service has upgraded to Caa3 from Ca the corporate family rating of Winsway Coking Coal Holdings Limited (01733).

At the same time, Moody's has affirmed the company's Ca senior unsecured debt rating. 

The outlook for the ratings remains negative. 

"The upgrade reflects Moody's expectation that the recovery prospects for Winsway's creditors have improved following the completion of its exchange offer for the senior notes due 2016 and because of its improved cash position due, in turn, to better inventory management," said Alan Gao, a Moody's Vice President and Senior Analyst. 

Link to article

 

VOR closed flat at 0.4c

Voyager Resources: Results of AGM

November 25, Voyager Resources Limited (ASX:VOR) --

Link to release

 

276 closed flat at HK$0.27 on Monday. Announcement made after market close

MEC: INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2013

November 25, Mongolia Energy Corporation Limited (HKEx:276) --

Link to report

 

FEO closed +15.79% on Monday

FeOre: NOTICE OF AGM, DECEMBER 17

November 25, FeOre Limited (ASX:FEO) --

Link to notice

 

A.Munkhbat: There are also Mongolian influences in Oyu Tolgoi cost increase

Dale Choi: TRANSLATION OF AN INTERVIEW OF FORMER TOP MONGOLIAN EXECUTIVE AT OT A. MUNKHBAT IN WHICH HE SAYS IT ALL ( our apologies for translation quality by a translator but we think readers can grasp the main messages)

(Independent Mongolian Metals and Mining Research) --

Providing concrete answer to many arguments surrounding Oyu Tolgoi is difficult in today's condition. Working group supposed to revise the investment agreement is meeting, however, refuses to provide information. Therefore, we invited A.Munkhbat, former vice president of Oyu Tolgoi to our " interview hall". He was leading Mongolian management of the Oyu Tolgoi in the past 8 years and today, working as General director of "Innova" company. (Mogi: shouldn't be mistaken with former subsidiary of TRQ, Inova Resources)

-       You managed all work to put Oyu Tolgoi deposit into economic circulation and worked until signing of the Investment agreement. Therefore, we aimed to get your answer for many questions related to this deposit and the agreement. However, would you answer if you seeing the Oyu Tolgoi agreement from independent point of view based on current situation?

It is been one year since I gave up my job. Initially, I began to work  as executive director from 2004 or by start of 2nd round of negotiation to conclude the Oyu Tolgoi investment agreement . I worked in Ivanhoe Mines total 8 years. As someone who managed and directed all work during this period, it is hard to say I'm an independent. However, since I resigned, as of today, I have no connection with the Oyu Tolgoi LLC.

-       I drafted many questions to ask from you. Probably I need to ask questions that may have nature of history for some, but I aim to explain causes. Would you clarify what are primary factors for delay of negotiation of the investment agreement?

During initial negotiation of the investment agreement in 2003, both parties agreed that" the agreement needs to be concluded". However, did not agree on one thing. That is issue about power supply. Investor party which considered power requirements of the Oyu Tolgoi and concluded " it is not possible to get power supply from Ulaanbaatar" and submitted proposal to source power from China which is about 80 km away.  Our side said " it is possible to source power  from Ulaanbaatar. It will be supplied from Power station no.4" and this led to conflict and the parties could not conclude the Stability agreement. Since then, the two parties interrupted for 4 years and continued the negotiation and concluded it in 2009 during global economic crisis. Probably, it became proof that sometimes crisis has good sides. If there was no crisis, maybe, no agreement would have been signed even until today. Of course, there were many obstacles and problems. There were too many difficult periods. Our people talk badly about people who concluded the Investment agreement. As someone who was participating in the negotiation and witnessed all this, former Finance Minister S.Bayartsogt who headed the Mongolian working group during the negotiation and D.Zorigt, former Minister of Mineral resources and energy should be thanked. They are very patriotic young men. Because of them, Oyu Tolgoi investment agreement became more beneficial for Mongolian side.

-       However, public concludes they are traitors. Maybe, your name is also included among them.

The agreement is misinterpreted for the public. Many false information such as "This agreement is fraud", " agreement that does not benefit Mongolia", " those who concluded this agreement betrayed the country" were and are disseminated. Actually, not a few people that say these words. On the contrary, I consider then unpatriotic.

-       Why?  Surely, it is not because they have different views than you. What was the real rationale according to your view?

No such thing. If this agreement was not signed, how Mongolia could have overcome the 2009 crisis?  Our country overcame the global economic crisis with less damage because of signing the agreement. Mongolia did not get more debt because of signing this agreement.  Today, Mongolian government issued  $ 1.5 billion dollar bond. This is debt. This debt has to be repaid back from the Mongolian government budget. By signing the Oyu Tolgoi agreement, Mongolian government did not get a debt like this bond debt. Oyu Tolgoi deposit cost increased and they say this will be debt for Mongolia. No such thing. Our side (mongolia) will not spend a single tugrug for development of  Oyu Tolgoi.  Even if it is not profitable, we will not end up with debt. What the reason of tainting this negatively and talking about it negatively without any clear logic when actual situation is like this?  If these pseudo-patriots were not there, Oyu Tolgoi agreement would have signed before 2009 and the  mine operation would have been normalized before economic crisis.  In this sense, I can never talk about them as patriots. It is true.

-       However, recently, Oyu Tolgoi investors  which lent 250 million dollars to our country asked for it. Because of this, protest started by saying " the investors indebted us instead of themselves and pressure us when we try to talk with them. They should not allowed to act like this"?

Mongolia has to pay back this as it is the Mongolian government asked for this loan. Rio Tinto group did not say " we will lend you money". Government of that time borrowed money in order to fulfill its election pledge. This loan was ratified through agreement and our government is obliged to pay back the loan. However, when time to pay back the loan came, it is said" this was not included in this year's budget". We can't act like that. Both parties have to be loyal to their agreement commitments. If we can't,  what is the sense of concluding agreement?  Is not that right?

-       Were the investor supposed to exercise right of Mongolian government to get loan by delaying repayment of this loan? Why not propose positive relationship since financing for underground mining will be borrowed?  Maybe, this is too simple and not good idea, however, if you look at it from the point of "Business is commerce", this alternative can work?

Why? If no underground mining, no investors would have worked here in the first place. When underground mine will be commissioned, investors will recoup the cost and get profit and also will provide our dividends. When they began to talk and negotiate with the international banking and financial institution in order to find financing for this, our side blocks this opportunity. We should not act like this. Since the whole world is in crisis, Rio Tinto is also in difficult situation. Crisis did not by-pass them. All global mining companies are affected by crisis. This is even serious for large companies. In relation to crisis, Rio Tinto closed many of its mines and investing to Oyu Tolgoi from sales proceeds of these mines. We must understand this difficulty as both Mongolian government and Rio Tinto are both parties on the Oyu Tolgoi deposit. Actually, any business company does not finance new project through its capital asset. It preserves capital assets and finds other financing sources through loan. This is just routine business principle. Also Mongolian government issues $ 1.5 billion dollar bond and creates debt. This is ok. is not it is unfair not to allow the investor party to get a loan? When not allowing the key partner the right to  get loan , no only Rio Tinto but also Mongolian interest is damaged. Our people do not understand the actual situation and politicize it.

-       I have to ask you about  guessing and suspicion one more time. There is warning that "investors going to borrow 4 billion dollars using the name of Oyu Tolgoi and half of it, will be used to finance other deposits and remaining  loan will be spent for purchase of equipments and machinery using offshore account and this is money laundry"?

Impossible. Our people should stop all  these never-ending suspicion and warnings. Rio Tinto is a world famous company. It is one of largest three global mining companies. Such company does not do financial fraud.

-       Where is the proof?  What are actual explanation for this?

The seven billion dollars invested in Mongolia as of today can be the proof. Rio Tinto personnel working here are also their proof. Main thing is, license owned by Oyu Tolgoi company. This is the key proof. What other proofs can be there?  If Rio Tinto violates Mongolian law, the license will be cancelled. Since it is clear that they don't want to be in this situation, they will not violate the laws. Our people are scared from offshore account and think of it as fraud.

-       S.Bayartsogt, member of the parliament made them scare from this?

No. It is not like this. Actually, I think S.Bayartsogt and D.Zorigt as true patriots. They spent many sleepless nights in order to increase benefit for Mongolia. As result of this, this agreement became beneficial for Mongolia. I will tell it anywhere. As for offshore accounts, when investor party transfers its profit earned from here to offshore account, our side will not have any loss. On the contrary, it is beneficial for us. Think about it. Today, the concentrate is sold, our side can fully monitor the concentrate amount. Since it is not gold, there is no problem to monitor copper concentrate amount. In another word, it will be fully possible to estimate its profit. When investor transfer its profit to offshore area, it is beneficial. If they transfer their dividend to England or America, they will have to pay 30-40 percent as tax.  In this case, let's assume that a million dollars required for Oyu Tolgoi expansion. Then a million dollar transferred to offshore region, will be come directly to our country. Million dollar trasnferred to England and America will come back as 600 thousand dollars. So which is better for our side?   It is right that investor side will transfer its money to offshore account. This is the actual estimation. We should thank that the profit earned from our country is transferred to offshore account. There is no need to be scared. However, it will be issue if there is a running away without paying due tax to our country and hiding it in offshore region.

-       Probably, you reviewed and added and cut the costs of initial Oyu Tolgoi investment. In that sense, can you provide actual comment about 2 billion dollars that is allegedly exceeded without any clear rationale?

Rather than investors, wrong activities of our side is very much  responsible for cost increase. In general, there are 4 reasons for this.

-       Can you explain each of these reasons?

Yes. First, plant capacity and data is very much changed from the time when the feasibility study was approved. Ivanhoe Mines company developed "Integrated Oyu Tolgoi development plan" for banking and financial institutions even before arrival of Rio Tinto. When Mongolian government said " you develop that technical and economical Justification and bring it", it was translated by Mongolians and given to government. This was translated by top Mongolians who was working as lecturers of the Mongolian University of Science and Technology and mining economists who graduated schools in western countries. Since the western countries does not have    Technical and economic Justification like our country, both sides misunderstood each other. In general, the plan was translated as Technical and economic Justification in compliance with Mongolian requirement. When this happens, the 5.4 billion dollars mentioned  differed from actual situation.

The 2nd reason is increased cost of similar mining operations all around the world. Cost of some mines even increased by two times. In another word, copper price reached is zenith in 2006. Because of this, copper mines upgraded their capacity. When all mines began upgrading their operations, equipment manufacturers increased their price. The cost has increased to that extent. Not only cost of Oyu Tolgoi company has increased. Just take a simple example. Previously, one km road was built by one hundred million tugrug in Mongolia, now it is almost 500 million. Take the buildings also. One square meter  building area was built for 200-300 dollars, now it reached almost one million. Its own cost increased 2-3 times. When cost is increasing in Mongolia like that, why can't cost of investors working here increase by 30-40 percent? Can we be unfair like this? This can be explained only by market factor?  When actual situation is like this, we are suspicious of investors " you increased the cost". As for Rio Tinto group, cost of its mines in Australia, Chile and Canada increased. Even freezing expansion of world class mine " Olympic Dam". It sold many of its mines in order to invest in Oyu Tolgoi. In this case, our country should support them. We can't act like a boulder stone in the path of gaining cheap loan like this.

-       What are other two reasons for the cost increase?

The third reason is Mongolians created condition for the cost increase. Probably, it will continue in the future also. It always happens.

For example, in 2009, one lawmaker of the parliament suggested revision of legal clause that exempted mining companies from VAT and this happened within a week. Because of that, Oyu Tolgoi project cost increased by 400 million dollars. 400 million dollars out of alleged 2 billion dollars increase occurred because of this.

Also in 2007, one inspector of the professional inspection agency visited the site and said " you should stop the development of the shaft. We have no standard of shaft mines" after reviewing the shaft development. Because of that, 1500 Mongolians were laid off. This means, one average inspector interrupted livelihood of about 5000 people if we assume one miner have 3-4 person family. I was in much shock when signed the order to lay off these workers. I was stressed and experienced psychological shock. It was really difficult when I thought " why I'm laying off these people?". At that time, global economic crisis was spread everywhere and it was not easy to make living. since we are western company, paid the three month salary. However, it is still not easy.

Last time in 2011, when there was small scale fire outbreak in the shaft of underground mine, was told" since there was fire here, you demolish this building". What will happen if we demolish that building which required financing of hundreds of millions of dollars. Because of that, development of the shaft halted for about half year. This way, our people increasing the Oyu Tolgoi project cost. Previously halted it for 2 year period.

On top of that, our people considered Ivanhoe Mines as small company. We chased it out by saying " you are small fish and scoundrels". Instead, Rio Tinto group came. Arrival of large company means big costs. Safety standard and requirements are very costly. At least the communication cost is very high compared to Ivanhoe Mines.  When bring foreign specialists, trip, flight and supply of that person is very high. The monitoring cost is much higher. Monitoring cost of large company is very high. This is their standard. Our people does not understand all this. Instead of understanding this, we attempt to improve the Oyu Tolgoi investment agreement.  In 2009, Mongolian side gained one third ownership and representative in the governing board. In another word, Mongolian began to participate in the company operations and obtained information and approved the budget as shareholder since 2010.  Continued like that by approving the budget and monitored the execution and then suddenly in 2012-2013, said " you exceeded the budget. We will not share this cost" and this is like acting very inadequately in even term of individual person.

-       Actually, I don't remember the investors explaining why the cost has increased. Maybe, this is their mistake. On the other hand, Mongolian ministers which concluded the agreement and even the former PM S.Bayar comments " we concluded the agreement. Government of given time are obliged to improve this agreement during its implementation".  When they are saying like this, common citizens and certain lawmakers of the parliament have right to demand  improvement  and revision of the agrement as you said.

I see that our people don't understand one thing.

-       What is that?

They think of negotiation and agreement as one thing. Actually, it is not. These are two different concepts. However, our people mixed up these two in the Oyu Tolgoi investment agreement. Negotiation means period of negotiation. The agreement means final and approved negotiated agreement. Then, our people mixes up these two and understand that it is possible to continually  improve and revise agreement.

-       I just said the comment of those people who concluded the agreement.

Rio Tinto considers it concluded 30-year agreement with Mongoliangovernment and thinks it can't be changed. Then, our government is pressuring them to revise the agreement  since they are operating in our land and halted their operations. In countries where law is implemented, such condition would not exist. Our people should carefully study this agreement in international level. Then, we can make conclusion on this agreement. Otherwise, we should not make conclusion about this agreement based on information acquired here. If we can't compare and study it ourselves, we can request the World Bank and IMF to conduct comparative study of the agreement with other mines of the world. Otherwise, several populist lawmakers of the parliament should not run around acting like they are going to negotiate on behalf of the government. They don't understand they look bad in the eyes of foreign people. Actually, state participation and earning profit in large mining projects is implemented through  tax, ownership and providing infrastructure and getting payment and fees. Building power station and transmission line and motor road and railway  and getting payments is the cultured and efficient way to earn profit.  However, we did not do substantial work in that area. Now we just beginning to work in that area.

-       People who protested the OT IA and organized and participated in demonstrations say "This Agreement was approved in its present form because of us. If not for us the Mongolian treasures would've been loaded and taken away for free." Please, give your realistic assessment of their achievement as a person who represented the investors and met and negotiated with them. Was there a contribution protesters made during this Agreement?

I don't know if they understood what they were saying. As I see, most of them had a goal to enter politics through OT. It was like that at that time. And it is like that today. Many of those people have become MPs. Everybody can see that. And they still shout. If they are not able to study on their own they should obtain international help. Senior citizens compare it with Erdenet and make various comments, when these two are completely different cases. And they don't even have basic English. People shouldn't act so irresponsibly and make fake shows like that. The process of making the OT IA was mostly about the ratio for dividing the value. Even a movement with a title 50:50 was established at that time. You know there is an Honored Economist who switches parties. And you see he has quieted down once he understood Mongolia should receive more than 50%. He forgot all that and now says "OT agreement was made through bribes". In general, it is difficult for foreign investors to invest in Mongolia and run business here. They can't deal with this kind of blacl PR. If foreigners are put in charge they do not understand the Mongolian context and methods and can't adjust their work. There are many examples besides OT like Boroo Gold, Areva, Khushuut, petroleum, shale. It looks like that, we call and invite investors to  "Invest in Mongolia", but once they arrived we strangle them and try to rob them of their project funds

-       Please, answer honestly. Every time they announce a protest a thought occurs sometimes "They do it for money". Have you had cases when protesters came to you for money?

Some who demanded money, ended up using weapons and are in prison now. They just show their own behavior. The majority of fake patriots who are born from movements and protest foreign investment are people who have never developed anything, never created jobs.

-       So they did demand money?

There have been cases.

-       How was it dealt with?

OT has never given a penny neither to organization nor to individuals. As an international company it employed legally responsible actions. Media published that millions and millions of dollars were distributed to protesters and even to former PM S.Bayar and Ministers who participated in the negotiation. We were accused of bribing. But, as a person who participated in this process from the beginning to the end I can fully assure you. Mongolians think within their mentality. If it were like that then OT permission would've been taken long ago. A politician who came to rise protesting OT once said to me "OT is located in Mongolia so why don't we get rid of investors. They say they need 5 bn USD. If a thousand national companies contribute 5 mln USD each then we'll open this mine. No big deal. Let's take over." There were politicians like that, really.   

-       What was your response to that?

"It can't work this way. If a well-respected international company comes to work with us it will become a guarantee of our national security." I studied international relations in my university and worked in a foreign relations sector for many years. I swore to serve my country. Foreign relations is a special division similar to military. I've never stepped back from my vow.

-       But you worked representing investors. Did you have doubts when facing conflicts between interests of Mongolia and interests of investors?

Of course, as an individual I had such doubts. But I have a firm belief that more Mongolian economy opens up more our national security is guaranteed. I have a degree in Economics, in addition to my degree in International relations. I used to work for World Bank. I worked as a CEO of a bank. In this regard, I know well what is beneficial to Mongolia. In this regard, I have worked with belief "Mongolia must benefit. If this project is implemented it is beneficial to Mongolia." I am still loyal to this belief. Although I left OT LLC last year I still stand on my position since this deposit is a source of food for our future generations. Let's imagine, we scare away the investors. If we stop the operations of our only investor, turn down its right to raise funds and regularly frighten to change the agreement then other investors will leave too. Let's think. An investors' meeting took place in Myanmar last March. Out of 40 companies that participated in this conference 28 were companies that ceased their operations in Mongolia. This is an issue. They all said "It's become difficult to work in Mongolia". A high-level official from the Ministry in charge of this sector is establishing a company to run mining operations in South East Asia. This is the reality. And there is a draft bill on Amendment of Law on Minerals. This draft is the final straw to drive away the investors, yet, they call it "good draft". Our people can't act like that. I, personally, am greatly surprised that people do not understand a simple thing, if investors leave, money leave too.     

-       You've probably noticed a comment that's been circulating which says "through amending Law on Minerals we will control Mongolian treasures and restrain the outraging behavior of investors."

Our people put forward wrong issue, explain it to public in a wrong way and wrongfully establish their belief. What you are saying is an indication of that. If Law on Minerals is amended then possibility for prospecting must be provided. And possibility to transfer prospecting licenses must be provided. This sector has an unwritten rule that big ones swallow small ones. As long as taxes on profits are paid we don't need to limit or close transfers within this sector. However, state should participate when prospecting license is upgraded to mining license and tax rates, infrastructure and this kind of issues must be picked up and discussed. For example, a license on Escondida was transferred 9 times before mining was started. The license on OT was transferred 4 times already. That's why support must be provided not obstacles. But, for us, personal jealousy is the main driving force. For a while we all became miners. And now, when this sector has met with challenges, many turn away. State officials do not say anymore words "let's improve our competitive capacity". Attracting FDI is a low-risk way to deal with the economic growth slowdown and to decrease the deficit of payment balance.              

-       So how much USD came to Mongolia as a result of the work of Ivanhoe Mines on OT deposit? Can you give a rough amount?

Approximately 13-14 bn USD were invested at that time. Friedland single-handedly did what the Foreign investment department couldn't. His words "Mongolia has future, investment in Mongolia will yield profit, Mongolia has treasures" attracted 13-14 bn USD to Mongolia in direct investment. These nice tall buildings in Mongolia were built with these money. Market expanded, economic capacity strengthened. We didn't understand this, we did not want to.   

-       One of few people who praise Friedland is you. He is more known as "Poisonous Bob".

We blamed Friedland a lot. As a person he is not such a bad man. He was a billionaire before he came to Mongolia. Profit he got from OT was not that big, it was rather small. He owned 100 mln shares of Ivanhoe Mines company. He did not sell them until last April and he sold 50 mln shares when price was a little over 4 USD. And we remember the price peaked as high as 30 USD per share.

-       As a person who met him in person what can you say about his belief and hope in OT?

When we met first, he said "I've been a exploring my whole life. Now I want to become a miner. This is my dream. I will work hard for this dream." He stayed true to his dream until 2012 and he stopped when the OT plant was put into operation. Friedland is a sharp-minded man. People say bad things about him. But it's not true. He is a sharp-minded, capable man. He can say who you are by looking into your eyes. He scolds people. But for good reasons only. I can't say anything bad about him. A former Minister of Industry and Agriculture told me "Mongolians must put a monument made of copper to your Friedland. And he must awarded a Labor Hero rank." I think this monument will be put one day. But Friedland left feeling hurt by Mongolians. He's been out of touch for the past 1-2 years. He will not probably come to Mongolia again. "I am not valued. Mongolians have wrong perception of me", he said. This man, actually, did a big service to Mongolia.  

-       Generally speaking, are there many investors that have good reputation in resource-rich country they invested in? We hear more "cheater, thief".

Of course, there are. Mongolians are very suspicious people. They are not able to invest and install technologies, yet, always suspicious. And it is not just about investors, we envy each other. The entire world is competing for investment, only we are pushing it away. Even the countries with most powerful economies, US and China, do everything they can to attract foreign investment. Our fragile economy, geopolitically dependent country can develop only through foreign investment. Only then we can guarantee our independence. Economic science has a term open small economy. Such an economy cannot dictate prices on international market, but can develop and expand following investment developments. We should follow this path. As for OT, it's like trying to get more when given some. Everything must be compared in order to determine profitability. Today, it is too early to evaluate the results. An investment of 7 bn was already made and no immediate results can be achieved. We can speak of results in 2-3 years. We can't call them cheaters when production was started only 6 months ago.

-       Sorry, I'd like to ask a personal question. Just to make this interview complete. You've been with OT LLC since the start of the negotiations on the IA and you've always represented the interests of the investor. What are your personal gains and profits?

I've learnt a lot. I've gained mining experience. I've started the biggest in Mongolia project. It looks like I had this destiny to work in the mining sector. When I finished the seventh grade I worked in Umnudelger soum of Khentii aimag. I worked with a Bulgarian expedition for two years. I earned around 2 thousand MNT for a period of a month and half. Since then I've been connected to the mining sector.

-       Then why did you quit when the OT IA was approved and profits are about to be earned?

Eight years of working in a private company is long enough. I decided to concentrate on my own business.

-       What kind of business does INNOVA company that you lead run?

Mining, construction, tourism. Also, we offer consulting services on investment.

-       When you were interviewed soon after the signing of OT IA you said some romantic words like "Eyes of big international investors opened with the signing of the OT IA. Let's make it the development of the century." Do you still believe in these words? OT operations were halted and investors are leaving.

I do believe. Those who wanted to leave left, and those who want to wait, wait. Mongolian state must find the key to them. I hope it knows it must find the key.

-       In general, is it difficult for investors to deal with Mongolian politicians? Or is it more difficult to deal with public?

I'd like to complain here. It's very difficult for investors to deal with public. They can't explain in realistic way their ideas and their work plans due to language problems. In this case, public officials, who partner in these projects, must give realistic explanations. But, none of them can say a word because of public pressure. Those who participated in making this Agreement have stopped saying anything. Even mouths of those people who used to speak out, S.Bayartsogt, D.Zorigt, P. Ochirbat, have been shut. All of them were accused "You took a bribe. You are corrupt. You leave Mongolia." and they can't speak anymore. It is wrong. And not only people who stand aside can't speak anymore, those who are inside and who hold executive positions are afraid to speak too. It's shocking they are silent and avoid media. And I, personally, have complains about media. They see money when they hear OT. They publish paid articles on first pages and if not paid then throw to the back. And they call it business. Can't they support a project that will give benefits to Mongolia? They don't do that.

-       But, we did not ask you for money for this interview.

Yes. Of course, I should mention that.

-       And you support and give interview.

Well, I am just a person. I speak a lot. Once I stood on Sukhbaatar square with a speaker. It happened during the movement frenzy. And I heard how someone approached me from the back and said "Shall we put a knife in the back of this traitor?" Since then I don't speak in public.

-       Are you scared?

It is not about scaring. Actually, it is not good. Probably, those people led by  S.Bayar were desperate as they came under constant pressure. That's how the situation is.

-       Are you staying in contact with the Oyu Tolgoi investors now?

As of last one year, i have no contacts. I'm just a man with belief that this project is needed for Mongolia. Mongolians needs to have good reputation in outside world and needs to keep the words they said. Sometimes, it is really shameful. Investors are running away. BHP left. Anglo American was here and then left. Recently, they came back. Vale also left. Large companies like Peabody, Cliff Natural and Teck are waiting what will be the investment environment will be like.

-       It seems you are saying through this interview that we should be afraid and scared from all this. What if government and citizens act against what you are saying? What will happen then ?  Pls, understand this as question to see far

Udokan deposit in Chita region of Russia, not far from our country was evaluated by Russian government at 500-600 million dollars and given to private sector. This decision was made in order not to risk the government budget. In another word, there no concept about strategic deposit. Reserve of that deposit rivals with Oyu Tolgoi. In another word, if we don't rush, Udokan mine will be commissioned in 2018-2019 during peak of Oyu Tolgoi production. If such large mine near Chinese border is commissioned, it means emergence of powerful competitor for our country. Directly, this will affect price of concentrate delivered. This means, we should not waste time by arguing. If politicians don't understand that we might lose in the competitive market, Mongolia will end up as victim as scapegoat for this. One man who was working as Khanbogd soum governor between 2008-2012 created so much obstruction for many works that Oyu Tolgoi could have taken for the soum. He blocked the benefit for the soum residents. He gave the permit of the land where Oyu Tolgoi wanted to develop,  to his friends and close circle. They tried to sell the land to Oyu Tolgoi and pressured. Now, there is new leadership emerged and relationship is getting better. Connected to permanent power source. If all issues ranging from small to big is solved positively, Oyu Tolgoi will be engine and driving force of Mongolian development and prosperity. I'm proud that I participated in start of this largest development in Mongolian history and this is my belief.

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Local Market

BDSec Daily Market Update, November 18: Top 20 +0.22%, Turnover 29.1 Million

November 18 (BDSec) Mongolian stocks started the week with a positive note. MSE Top 20 added 0.22% to 14,453.79 points. Coal miners on MSE performed well during the session with Baganuur (+4.97%), Mogoin Gol (+4.51%) and Tavantolgoi (+2.70%). Darkhan Nekhii (NEH) lost as much as 10% to close at MNT 9,000. Trading value stood at MNT 29.1 million.

Top Movers

Trading Value Leaders

Close (MNT)

Value (MNT)

APU (APU)

3,902

8,639,160

Ulaanbaatar BUK (BUK)

38,500

8,085,000

Tavantolgoi (TTL)

3,800

6,151,900

 

 

 

Top Gainers

Close (MNT)

% Change

Baganuur (BAN)

4,200

4.97%

Mogoin Gol (BDL)

13,900

4.51%

Tavantolgoi (TTL)

3,800

2.70%

 

 

 

Top Losers

Close (MNT)

% Change

Darkhan Nekhii (NEH)

9,000

-10.00%

Mongolia Development Resource (MDR)

740

-6.92%

Telecom Mongolia (MCH)

1,300

-4.34%

Link to update

 

BDSec Daily Market Update, November 19: Top 20 -1%, Turnover 28.5 Million

November 19 (BDSec) MSE Top 20 index declined 1.00% today to 14,309.68 points as 2 stocks fell for every one that rose on the bourse. Mogoin Gol (BDL) plunged 13.67% to MNT 12,000 after gaining 4.51% at yesterday's session. Suu (SUU), the largest milk and milk products manufacturer of the country, jumped 12.50% to MNT 90,000. Trading value for the day was MNT 28.5 million.

Top Movers 

Trading Value Leaders

Close (MNT)

Value (MNT)

HBOil (HBO)

340

8,364,000

APU (APU)

3,820

4,708,618

Talkh Chikher (TCK)

13,010

2,250,730

 

 

 

Top Gainers

Close (MNT)

% Change

Suu (SUU)

90,000

12.50%

Aduunchuluun (ADL)

1,790

0.28%

Talkh Chikher (TCK)

13,010

0.08%

 

 

 

Top Losers

Close (MNT)

% Change

Mogoin Gol (BDL)

12,000

-13.67%

Moninjbar (MIB)

205.32

-10.73%

Mongol Savkhi (UYN)

1,100

-7.56%

Link to update

 

BDSec Daily Market Update, November 20: Top 20 +0.25%, Turnover 9.7 Million

November 20 (BDSec) Mongolia shares rose 0.25% or 35.55 points on Wednesday to sit at 14,345.23 points. Tavantolgoi (TTL) was the most actively traded stock on the bourse. The stock closed 2.08% higher today to close at MNT 3,879. Moninjbar (MIB) recovered 6.66% to MNT 219 after plunging 11% on the previous session. Trading value decreased to MNT 9.7 million.

Top Movers

Trading Value Leaders

Close (MNT)

Value (MNT)

Tavantolgoi (TTL)

3,879

4,357,097

Baganuur (BAN)

4,100

1,648,200

HBOil (HBO)

340

757,400

 

 

 

Top Gainers

Close (MNT)

% Change

Olloo (OLL)

139

10.76%

Moninjbar (MIB)

219

6.66%

Baganuur (BAN)

4,100

2.47%

 

 

 

Top Losers

Close (MNT)

% Change

Genco Tour Bureau (JTB)

88

-1.12%

Khukh Gan (HGN)

130

-0.76%

Link to update

 

BDSec Daily Market Update, November 21: Top 20 +1.68%, Turnover 12.3 Million

November 21 (BDSec) Mongolian stock market finished Thursday with a modest increase. The MSE Top 20 rose 1.68% to 14,586.47 points. Mogoin Gol (BDL), APU (APU), and Tavantolgoi (TTL) led the gain. Trading value was low at MNT 12.3 million.

Top Movers

Trading Value Leaders

Close (MNT)

Value (MNT)

Gobi (GOV)

5,000

3,985,000

Tavantolgoi (TTL)

3,991

2,294,447

Ulaanbaatar BUK (BUK)

38,500

1,732,500

 

 

 

Top Gainers

Close (MNT)

% Change

Mogoin Gol (BDL)

13,750

14.58%

APU (APU)

3,940

3.14%

Tavantolgoi (TTL)

3,991

2.89%

 

 

 

Top Losers

Close (MNT)

% Change

Makh Impex (MMX)

1,901

-4.95%

Moninjbar (MIB)

210

-4.11%

Remicon (RMC)

170.06

-1.70%

Link to update

 

BDSec Daily Market Update, November 22: Top 20 +0.16%, Turnover 25.9 Billion, Baganuur 25.88 Billion

November 22 (BDSec) MSE had a big day on Friday with MNT 25.9 billion (US$ 15 million) worth of stocks traded. Mongolian stock market finished the week in green, winning for the third day. MSE Top 20 edged up 0.16% to 14,609.17 points as two stocks rose for every one that declined. APU, the largest index-weighing company on MSE, pulled down the index, losing 2.28% for the day.

Top Movers 

Trading Value Leaders

Close (MNT)

Value (MNT)

Baganuur (BAN)

4,250

25,881,801,976

Shivee Ovoo (SHV)

6,830

10,633,910

Mogoin Gol (BDL)

14,500

10,563,850

 

 

 

Top Gainers

Close (MNT)

% Change

Khukh Gan (HGN)

149

14.62%

Ulaanbaatar Hotel (ULN)

90,000

5.93%

Mogoin Gol (BDL)

14,500

5.45%

 

 

 

Top Losers

Close (MNT)

% Change

Olloo (OLL)

120

-13.67%

Mongol Nekhmel (MNH)

4,697

-13.10%

APU (APU)

3,850

-2.28%

Link to update

 

Montsame MSE News, November 25: Top +1.16%, Turnover 36.1 Million

Ulaanbaatar, November 25 /MONTSAME/ At the Stock Exchange trades held Monday, a total of 27 thousand and 248 shares of 17 JSCs were traded costing MNT 36 million 082 thousand and 005.00.

"Genco Tour Bureau" /15,628 units/, "Remicon " /3,616 units/, "Baganuur" /2,332 units/, "Khukh Gan" /1,480 units/ and "Mongolian Telecom" /1,110 units/ were the most actively traded in terms of trading volume, in terms of trading value--"Baganuur" (MNT ten million 106 thousand and 800), "Ulaanbaatar Hotel" (MNT nine million 810 thousand), "Sharyn Gol" (MNT seven million 288 thousand), "Darkhan Nekhii" (MNT two million 439 thousand) and "Mongolian Telecom" (MNT one million 443 thousand and 490).

The total market capitalization was set at MNT one trillion 515 billion 400 million 393 thousand and 190. The Index of Top-20 JSCs was 14,778.66, increasing by MNT 169.49 or 1.16% against the previous day.

Link to article

 

BDSec: Tavantolgoi (TTL) Initiation Coverage – BUY, Price Target 7,210, Upside +90%

November 2013 (BDSec) --

We are initiating a coverage of Tavantolgoi (TTL:MO), one of the major coking coal exporters to China, with a buy recommendation and a 12-month target price of MNT 7,210 a share, suggesting 90% upside potential. We like TTL for the following reasons:

·         Reserves nearly doubled - Court has recently ruled in favor of TTL in a land dispute, which increases its coking coal reserve to 70 million tonnes from current 40 million tonnes.

·         MoU signed with Shenhua - On October 25, 2013, TTL signed a memorandum of understanding with China's Shenhua to supply coal in the next 20 years, securing volume demand in the long term.

·         Strategic location – Tavan Tolgoi coal field, where TTL resides, is approximately 267-kilometer from China, making it closest coal to China. TTL will have an infrastructure advantage by 2015 by being right at the new railway infrastructure which is dedicated to transport coal to China from Tavan Tolgoi area. TTL along with Tavan Tolgoi coal basin based coal miners Erdenes Tavan Tolgoi and Mongolian Mining Corporation and China's Shenhua Group recently signed a MoU with the Mongolian Railway state-owned company to construct railway connecting the Gashuunsukhait border point in Mongolia with the Ganqimaodu (aka Gants Mod) port in China.

·         High dividends - TTL is investors' favorite dividend stock with a strong dividend-paying track record of 9 consecutive years. TTL shareholders receive nearly 90% of earnings in dividend payments. We estimate its dividend for fiscal year 2013 to be around MNT 720 a share, which makes dividend yield to be 19% at closing price of MNT 3,800, providing investors with a margin of safety.

·         Government support - TTL has been a cash cow of South Gobi province for the last decade. 1/3 of South Gobi's 2012 budget revenues came from TTL's dividend income. Last time when TTL's operation halted few months ago because of road issue, Prime Minister and Minister of Road and Transportation themselves granted the approval to resume, indicating the importance of the Company.

·         Attractive valuation - Our 12-month target price of MNT 7,210 for TTL is based on dividend discount model. At a discount rate of 25%, the present value of all forecast dividend until 2025 is US$ 230 million whereas the current market cap of the Company is at US$ 121 million. We cross-checked our valuation by comparing TTL with regional peers. At EV/t multiple of US$1.50/t, TTL is trading at a 153% discount to peers. The stock is currently trading at a multiple of 4.4 times estimated calendar 2013 earnings per share.

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Economy

Mongolian Banks: Growing Ties With The State

November 14 (Fitch Ratings) Mongolian banks' ties with the government are growing. Chikako Horiuchi, Director at Fitch's Financial Institution Group, discusses the impact of increasing state interference on banks.

Link to video

 

BoM Exchange Rates: November 25 Close

 

11/22

11/25

USD

1,745.93

1,745.84

EUR

2,354.21

2,363.69

CNY

286.55

286.55

GBP

2,828.93

2,829.74

RUB

53.06

53.17

November Chart:

Link to rates

 

 

Total outstanding 1-week bills increases 51.2 billion to 1.44 trillion from Nov 22

BoM issues 415.2 billion 1-week bills

November 25 (Bank of Mongolia) BoM issues 1 week bills worth MNT 415.2 billion at a weighted interest rate of 10.5 percent per annum /For previous auctions click here/

Link to release

 

200B is the total outstanding

BoM issues 200 billion 4-week bills

November 25 (Bank of Mongolia) BoM issues 4 week bills worth MNT 200 billion at a weighted interest rate of 10.76 percent per annum. /For previous auctions click here/

Link to release

 

8% Mortgage Program Update: ₮470.1 Billion Refinanced, ₮634 Billion Newly Issued, Total 1.1 Trillion

November 25 (Cover Mongolia) As of November 22, 470.1 billion (₮468.5 billion as of November 12) existing mortgages of 16,701 citizens (16,652 as of November 12) were refinanced at 8% out of 797.3 billion (796.9 billion as of November 12) worth requests.

Also, 634 billion (₮617.1 billion as of November 12) new mortgages of 10,942 citizens (10,654 citizens as of November 12) were issued at new rates out of 714.8 billion (₮697 billion as of November 12) worth requests.

Link to release (in Mongolian)

 

BoM Monthly Statistical Bulletin, October 2013

November 18 (Bank of Mongolia) --

Link to report

 

Consolidated Balance Sheet of Banks, October 2013

November 20 (Bank of Mongolia) --

Link to report

 

Mongolia's Foreign Trade Overview, October 2013

November 21 (Bank of Mongolia) --

Total trade turnover: $8,821 millions

As of October 2013 the total cumulative trade turnover from the beginning of the year fell by 6% (USD 582.8 millions) from that of the previous year and reached USD 8,821.2 millions. The decrease in the trade turnover was due to the decrease in imports by USD 398.3 millions and in exports by USD 184.5 millions.

The annual growth rate declined by 10 percentage points from that of the previous year as a result of the decrease in the growth rate of imports by 14 percentage points and that of exports by 3 percentage points.

The structure of the trade flows with the neighboring trade partners is as following: (i) trade with PRC: 51% or USD 4,499 millions and (ii) trade with Russia: 15% or USD 1,331 millions. The trade volume between Mongolia and China decreased by 10% and the trade volume between Mongolia and Russia declined by 17%.

Trade balance: -$1,861 million

As of October 2013, the cumulative trade balance decreased by 10% (USD 214 millions) from that of the previous year and reached USD –1,861 millions. Although during the reporting period the total exports decreased by 5% from that of the previous year the trade balance improved due to the decline in imports by 7% from that of the previous year.

The value of the three-month moving average of the difference of annual growth rates of exports and imports has been decreasing recent years (Picture 1 shows that the annual growth rates of exports and imports have been declining since October 2011). But since August 2013 , it has been increasing slightly.

Trade balance of paid trade flows: -$1,479 million

The state of the trade balance of paid trade flows is one of the main variables that determines the pressure on the domestic foreign exchange market.

As of October 2013, the trade balance of paid trade flows increased by 12% from that of the previous year and reached USD –1,479 millions. Paid imports during the reporting period decreased by 0.6% which means that the rate of the decrease in paid exports is by 4.5 percentage points higher than that of imports.

Terms of trade: 1.194

As of October 2013, terms of trade index (2000 base year) decreased by 19.9% from that of the previous year and reached 1.194. This decrease in the terms of trade is mainly attributed to the fall in export prices of exporting commodities.

EXPORT

Composition: 88%+ 12%

The share of mineral exports in total exports was 88% of the total export and decreased by 2.6 points from that of the previous year.

Coal, copper concentrate, iron ore and concentrate and crude oil have a weight of nearly 74% of total export and 84% of mining export.

In addition, these 4 products share in the mining exports de creased by 6.9 points from that of the previous year, share in the total exports decreased by 8.4 points..

Growth: -5.0%

Mongolian export decreased by 5.0% from that of the previous year, which was mainly affected by 7% decrease in mineral exports. Exports of iron ore, concentrate, crude oil and non-monetary gold increased by 25%, 46% and 246%, respectively, which accounting for 13% in growth of mining export. On the other hand, coal export decreased by nearly 45% and because of this mining export has decreased by 22% from the first 10 months of 2012.

Changes

In first 10 months of 2013, Mongolian export decreased by 185 million USD from that of the previous year. The decrease in export commodities' prices (USD 335.8 millions) offsets increase of export commodities' quantities (USD 151.3 millions).

Because of the increase in crude oil, copper, zinc ore, concentrate and non-monetary gold quantities, total export would've increased by 400 millions USD. However, coal, copper concentrate, monetary gold's prices, coal and spar's quantities decreased in reporting period, so total mining export decreased by 763 millions USD.

Cashmere and cashmere product exports' both prices and quantities increased by 27 and 19 million USD, respectively. For other exports, prices and quantities both increased, so total of other export increased by almost 26 millions USD.

World market prices for primary commodities

As of October 31 2013, gold price reached 1,323.1 USD, decreased by 23% from that of the previous year and decreased 0.4% from that of the last month.

As of October 31 2013, copper and zinc prices reached 7,242.0 and 1,919.0 USD, copper decreased by 6.0%, zinc increased by 3.5% from that of the last year. Copper decreased by 1%, zinc increased by 2% from that of the previous month respectively.

IMPORT

Composition: 24% + 21%

As of first 10 months of 2013, 45% of total imports were oil products and industrial inputs' imports, 15% were consumer goods and food imports, rest 40% were other products' import.

Share of oil products and industrial inputs' imports in total imports decreased by 2 points from the first 10 months of 2012. This de crease affected by industrial inputs' import, which decreased by 3.1 points.

Growth: -7%

Mongolian imports decreased by 7% from that of the previous year. Main contributors of this decrease were industrial inputs' decrease, which equal to 5% of the total decrease, and consumer goods import which equal to 1% of the total decrease.

Consumer goods products and industrial inputs' imports decreased by 9% (62 millions USD) and 18% (276 millions USD) respectively, thus total import decreased from that of the previous year.

Changes

Prices and quantities of import goods both decreased by 161 and 238 millions USD respectively, thus total imports decreased by 398 millions USD from that of the previous year.

Because of decrease in border price, oil import decreased by 15.1 million USD , thus total oil import decreased by 3.9 millions USD from that of the previous year. The oil price on the border decreased from begin of 2012 to august 2012. Since then, the oil price increased slightly, but in 2013, it is decreasing slowly. (Figure 6).

Industrial inputs' imports price and quantity both decreased by 37% and 63%, respectively, thus industrial inputs' import declined by almost 276.1 millions USD. At the same time, 76% of decrease in consumer products' import were quantity related causes, 34% were price related causes, thus consumer products' import de creased by 62.3 million USD.

Import of the primary consumer products*

As of first 10 months of 2013, growth of primary consumer products' import, which calculated by 3 month moving average method, decreased by 15% / Figure 7/.

Annual growth of electronics import had been decreased from mid of 2012 year, but since April 2013, it has been increased slightly .In the other hand, passenger cars import had been decreased since beginning of 2011, but since beginning of this year it has been decreased, slowly .

* In this calculation, among the all consumer products' import, main 48 goods is chosen and used.

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Politics

Open Government Partnership Action Plan to Commence in June

Ulaanbaatar, November 25 /MONTSAME/ The cabinet meeting on Saturday assigned a head of the cabinet Secretariat Ch.Saikhanbileg to supervise implementation activities of the Open government partnership action plan.

Within three key priorities of improving public service, increasing transparency of public institutions, and enhancing justice and reducing corruption, some thirty activities have been planned for the Open Government Partnership National Action Plan of Mongolia.

The plan that includes some projects aiming at open contracting such as "Transparent Account" and "Transparent Tender" will commence next June.

The Government of Mongolia, who joined the Open Government Partnership on this October 12, will deliver a report on implementation process of the national action plan to the International Open Government Partnership every two years. The action plan will be implemented under a partnership of the Government, private sector and civil society. 

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Business

Mongolia to embrace illegal gold miners

November 25 (MINING.com) The government of Mongolia, one of the world's fastest-growing economies, signed Monday a deal with the country's gold producers association, which aims to reduce illegal extraction of the metal by reducing barriers to become formal minersXinhua reports.

The memorandum would allow also small miners to upgrade their equipment and raise funds, while forcing them to follow Mongolia's regulations over its huge gold reserves, which were only discovered after the former Soviet satellite began democratic reforms in 1990.

Currently an estimated 100,000 Mongolians work as informal miners, producing more gold than the formal industrial sector, which alone contributes more than 20% of Mongolia's gross domestic product.

This is one of the reasons why the government has for years turned a blind eye to the so-called "ninja miners," as they are frequently spotted working at night, with their plastic gold-panning basins slung over their backs, resembling the characters of the TV cartoon Teenage Mutant Ninja Turtles.

These miners are constantly shoved onto smaller pieces of land by mining giants, but today's announcement may soon change their faith, as the government also announced it has set up a council that will oversee the implementation of the memorandum.

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BCM 6th Year Anniversary Monthly Meeting Recap

November 15 (BCM News) The BCM meeting on 11 November with Bayanjargal Byambasaikhan in the chair was attended by 150 members and invited guests. The meeting observed BCM's 6th-year anniversary and was followed by BCM's Annual Membership Renewal Dinner seating 185 members. 

Jim Dwyer, Executive Director, spoke on the importance of BCM's members, "our lifeblood."  Jim announced a special offer for subsidiaries and divisions of current BCM members to join at a 50% dues discount.  This dovetails with a BCM goal to attract more medium-sized entities to its membership.   

BCM membership now stands at 268, an all-time high, compared with 250 in October 2012. The 5 newest members are: 

1.    Clear Lakes Capital was established in 2011 to manage offices and apartments in Mongolia. It focuses on the central parts of Ulaanbaatar offering well-furnished properties and improves the properties by replacing kitchens and fridges, installing flat screen TVs, ovens and dishwashers. All apartments have emergency water heaters and most properties have LED lighting and smoke detectors installed. Above all Clear Lakes responds to occasional breakdowns in a matter of hours. Its properties are to be found in Park View, Regency Residence, Four Seasons Gardens and Temple View.   

2.    Since its establishment in 1924, the Institute of Finance & Economics (IF&E) has been one of the leading economic and business development centers in Mongolia offering high quality programs. Students are offered new opportunities and the latest knowledge reflecting current market developments. IFE is on its way of becoming a highly competitive business school in Asia. 

IF&E offers a wide range of Business programs such as Financial Management, Business Administration, Tourism & Hospitality Management and, Business Economics, Business Law, and Marketing Management.   

3.    Ramada Ulaanbaatar City Center is a premier international hotel in Ulaanbaatar. The hotel is set in a luxury shopping mall complex, standing 17 stories tall with a new modern architecture. It features 128 guest rooms and suits, and inclusive executive floors with its own lounge. The hotel is located in the heart of the Ulaanbaatar downtown and 20 minutes away from Chinggis Khan International Airport.   

4.    Established in 1998, the Mongolian National University is the second biggest private institution of higher education in Mongolia. Its distinguished history of excellence and hard work continues to provide students with unique opportunities to make difference through academic teaching, research and professional programs. Currently 5,200 students study in the 58 undergraduate and three graduate programs. 

Mongolian National University has established cooperative relationships with 18 universities and research institutions abroad. The university pays close attention to foreign language education. In Mongolia only MNU students are trained for seven semesters in advanced specialized knowledge of English education and curriculum contents, and the ability to use English.   

5.    Salmira Investment Fund is a U.S.-based investment partnership formed by three brothers. The fund is an expression of the three principals' profound interest in emerging and frontier market investing. Ultimately, Salmira is a fledgling family office that the brothers hope will continue to grow as it positions itself in Mongolia and other Asian economies on the verge of exciting expansion. 

The fund has active investments in Mongolia's transportation and financial sectors; its principals continue to evaluate opportunities across most sectors of the Mongolian economy. In addition to its Mongolia-based projects, Salmira evaluates and has participated in various private market opportunities in Southeast Asia as well as real estate and resource-related investments in the United States.  

Nick Cousyn, Chief Operating Officer of BDSec JSC, presented "A Westerner's Journey to the DPRK," where he discussed his recent visit to North Korea for a site visit to the Rason port and the Sungri oil refinery recently acquired by Mongolia-listed HBOil JSC. HBOil is participating in an oil exploration and production joint venture with North Korea's state-owned oil company and is set to purchase a company with oil exploration rights in North Korea's East Sea. 

Matthew Pottle, Managing Partner, PwC, presented "PwC CEO Survey 2013 – Confidence in Growth" where he discussed data collected from two years of surveys and interviews from company heads based in Monoglia benchmarked against international responses. He said that although chief executives had short-term concerns for the economy, there was greater confidence for the long term.   

David L. Wyche, Economic and Commercial Section Chief at the U.S. Embassy, presented "The U.S.-Mongolia Transparency Agreement."  The agreement signed this year is a result of years of cooperation for a trade and investment framework agreement (TIFA) and was a key step toward establishing a free trade agreement.  

Sereeter Javkhlanbaatar, Director General, Foreign Investment Regulations and Registration Department of the Ministry of Economic Development, gave an update on the new Investment Law, which took effect this month. The new law, he said, removes distinctions between foreign and domestic investors, providing many equal provisions. One dramatic change, some audience members noted, was a new rule for establishing a foreign invested company.  While in the past a start-up in Mongolia needed USD 100,000 in assets, now USD 100,000 is required per investor.  Javklhanbaatar noted many improvements, however, including the removal of restrictions for investment by private companies. Any entity 50 percent or more owned by a foreign government, however, will need ministry approval for more than 33 percent acquisition for any company operating within banking and finance, telecommunications and media, or mining.

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Ulaanbaatar

Ho Chi Minh City, Ulaanbaatar wish to become twin cities

November 25 (Tuoi Tre News) At his talks with visiting Mongolian President Tsakhiagiin Elbegdorj, Ho Chi Minh City mayor expressed his wish that Ho Chi Minh City and the Mongolian capital Ulan Bator should set up a twin relationship.

HCMC People's Committee Chairman Le Hoang Quan  voiced his wish during a meeting with the Mongolian President who visited the city on Sunday.

The city leader also said the city will do its utmost to effectively realize the agreements recently reached between leaders of both countries.

He pledged that the city's government will back local businesses to contact and cooperate with their Mongolian partners.

Quan also expressed his belief that President Elbegdorj's visit will help further promote bilateral ties between the two countries in general and between HCM City and Mongolian localities in particular.

For his part, President Elbegdorj lauded the idea of establishing twin relations between Ho Chi Minh City and Ulan Bator city, confirming that leaders of Ulan Bator city also share the same wish.

The President also said that Mongolia and Vietnam have shared a long-standing traditional friendship initiated by former leaders of both countries.

He added that Mongolia always welcomes businesses from Vietnam.

During his visit to Vietnam, President Tsakhiagiin Elbegdorj earlier attended and delivered a speech at the Vietnam-Mongolia Business Forum in the city on November 22 and 23.

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Diplomacy

Mongolian president in Singapore on first official visit

Mongolian President Tsakhia Elbegdorj is in Singapore on his first official visit. He received a ceremonial welcome at the Istana on Monday morning. 

SINGAPORE, September 25 (Channel NewsAsia) Mongolian President Tsakhia Elbegdorj is in Singapore on his first official visit.

Mr Elbegdorj received a ceremonial welcome at the Istana on Monday morning.

He was received by Singapore's President Tony Tan Keng Yam.

The Mongolian leader is accompanied by a business delegation, which aims to promote economic ties between the two countries.

He also met Prime Minister Lee Hsien Loong at the Istana.

Earlier on Monday morning, Mr Elbegdorj visited the Singapore Botanic Gardens, where a new orchid hybrid was named after him.

The Mongolian president was also treated to a state banquet on Monday evening.

Dr Tan, who hosted the banquet, said there is room for growth in the economic and trade relations of the two countries.

Singapore-Mongolia trade was worth S$87.5 million in 2012.

Dr Tan said: "As Mongolia opens up its economy and resource sector, it will create more business and investment opportunities between our two countries."

Mr Elbegdorj said: "I hope the momentum generated today will translate into a long-lasting partnership, a steady exchange between Singapore and Mongolia at all levels." 

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Moscow hosting Mongolia-Russia 17th Intergovernmental Committee Meeting

November 25 (news.mn) Moscow will host the 17th Intergovernmental Committee meeting on Trade, Economy, Science and Technical Collaboration between Mongolia and Russia on November 26th and 27th, 2013. 

The meeting will comprise of talks on cooperation issues around trade, economy, investment, infrastructure, mining, energy and humanities between Mongolia and Russia. The fulfillment of previous deals signed during the last meeting will be reviewed. 

Moreover parties will negotiate how to intensify the collaboration of intergovernmental sub-committees and task forces. 

Delegates chaired by the Deputy Prime Minister D.Terbishdagva will represent Mongolian during the 17th Intergovernmental Committee meeting on Trade, Economy, Science and Technical Collaboration between Mongolia and Russia.  

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Minister Gankhuyag Receives New Russia Ambassador, Discusses Asgat Silver Deposit, Railway, Oil, Pipeline

November 25 /infomongolia.com/ Mongolian Minister of Mining Davaajav GANKHUYAG received the Ambassador Extraordinary and Plenipotentiary of the Russian Federation to Mongolia Mr.Iskander Kubarovich Azizov on November 22, 2013.

During the meeting, Minister D.Gankhuyag and newly appointed Ambassador I.K.Azizov comprehensively exchanged views on joint project cooperation in mineral resources.

Mongolia imports up to one million tons of petroleum from the Russian Federation in a year said Minister and emphasized that Mongolia imports its petroleum from several sources under local market prices and parties are collaborating on competitive price indexes.

Sides mentioned that Mongolia seeks to accelerate the talks with the Russian Government to import crude oil from Russia in addition to the local crude oil being drilled, when Mongolia's oil processing plant will be operational.

They also exchanged views on establishing a joint company immediately in order to utilize a silver deposit in conjunction with Mongolia's recent completed paved the road to Asgat Silver and Copper Deposit in Bayan-Ulgii Aimag.

Minister D.Gankhuyag expressed Mongolia's interest on Russia's railway, auto road and oil pipe to China to be constructed through Mongolian territory.

Ambassador I.K.Azizov pledged to inform Mongolia's proposals to affiliated organs in the frames of preparations works of the upcoming Intergovernmental Committee meeting to take place in Moscow at the end of this month and affirmed to work the meeting would be ended effectively.

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Deputy Speaker receives delegates of N.Korea

Ulaanbaatar, November 25 /MONTSAME/ The Deputy Speaker of  parliament R.Gonchigdorj (Mogi: DP) Monday received the delegates led by the Deputy of the Supreme People's Assembly of North Korea Ms Kim Song Hui. 

Ms Kim Song Hui noted as successful the first meeting of Women MPs of Northeast Asian countries, hosted in the UB city, and invited Mr Gonchigdorj to North Korea.

In response, Mr Gonchigdorj thanked for the invitation and said he will visit North Korea this December.

He said North Korea is one of the leading in the world countries by its health sector, particularly by western and traditional methods of treatment, and expressed an interest to exchange experiences in this field and train our doctors and nurses in short-term trainings in N.Korea. 

Then he said that our parliament will focus on creating a legal environment that lets develop the bilateral relations, especially in economics, trade, investments, culture and humanity.

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State Secretary of Ministry of Defense to Visit Japan, November 25-28

Ulaanbaatar, November 25 /MONTSAME/ State Secretary of the Ministry of Defense Z.Boldbaatar is to pay an official visit to Japan November 25-28.

He has been invited by his Japanese counterpart Masanori Nishi. The two will run official negotiations, but before this the guest will meet with Mr Itsunori Onodera, the Defense Minister, and with Mr Ivasaki Shigeru (Mogi: Iwasaki I'm sure), the Chief of the Joint Staff Council of Japan Self-Defense Forces, to share views on current state and future prospect of the defense cooperation.

In parallel with deepening the Mongolia-Japan relations in politics, economy, arts and culture, which have developed into the strategic partnership relationship, cooperation in the defense sector has been expanding at a great pace in recent years.

Since signing of a memorandum of understanding between the two ministries in 2012, the countries have developed a new level collaboration that includes military staff trainings and joint peace support exercises.  

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Mongolia and Japan Agree to Increase Round Trip Flights to 7 Days a Week

November 25 /infomongolia.com/ Mongolian delegation led by State Secretary of the Ministry of Road and Transportation Baasandorj BATZAYA has conducted a working visit to Japan on November 20-21, 2013.

During the visit, the State Secretary B.Batzaya met with Director of Air Communications Office, Civil Aviation Bureau at the Ministry of Land, Infrastructure and Transport and Tourism of Japan, Mr. Taro Kobayashi, where sides negotiated to broaden bilateral cooperation in air sector.

For instances, a number of possibilities for a direct flight between "Chinggis Khaan" International Airport, Ulaanbaatar and "Narita" International Airport, Tokyo has been augmented to 7 days a week, which is currently able 5 days a week, where MIAT Mongolian Airlines conducts Ulaanbaatar -Tokyo and Tokyo - Ulaanbaatar winter flights on Mondays and Fridays only by its Boeing-737, and thereafter depending on enquiries and demands, Mongolia enables to conduct the above flights 7 days a week by Boeing-737 and Boeing-767.

The negotiation resolved is also a key factor, because the new International Airport being constructed in Khushigt valley, Tuv Aimag will be operational in 2016, and in the scope of liberalization of air communication and aggrandize the flights, the parties decided to co-implement some settlements regarding flights.

Mongolia and Japan first established air communication agreement in 1993, and since then Mongolia conducts a regular flight to Tokyo.

Upon the expansion of international operation, MIAT became a member of SITA reservation system in 1990, and IATA International Air Transport Association in 1996.

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Education Minister Concludes Japan Visit, Seeks Hi-Tech Education Assistance

Ulaanbaatar, November 25 /MONTSAME/ The Minister of Education and Sciences of Mongolia L.Gantomor MP made a working visit to Japan  November 18-22.

He met with the Minister of Education, Culture, Sport and Science H.Shimomura, the Deputy FM J.Ihara, the Chairman of Japan-Mongolia friendship group at the Liberal Democratic Party M.Hayashi and others.

At the meetings, the sides noted an importance of the "Middle-term program of strategy partnership between Mongolia and Japan", which was established during the visit of Mongolia's PM N.Altankhuyag to Japan, and talked about its realization.

Mr Gantomor said that hi technology and natural sciences experts are needed in a stability development of Mongolia and asked the Japanese side to educate our cadres in Mongolia and to continue educating our students in the Japanese top universities.

He also expressed a willingness to introduce experience of Institute of National Colleges of Technology of Japan to Mongolia and to establish a joint Mongolia-Japan technology school.

The sides agreed to strengthen collaboration between scientists and researchers and to foster relations between universities.

The delegation also met with leaders of "Riken" Advanced Science Institute, Japan International Cooperation Agency and University of Tokyo to share ideas of creating a Mongol studies center.

In the frames of the visit, Mr Gantomor attended a ceremony at which cooperation memorandum was inked between Education and Human development schools of the Mongolian State University of Education and Nagoya University of Japan.

After this, Mr Gantomor visited Niigata prefecture and Nagaoka city to grant the Order of "Polar Star" to a head of Niigata-Mongolia friendship association Mr Ts.Kimura and the "Friendship" medal to executive director of this association Mr H.Hasegawa on occasion of the 41st anniversary of the diplomatic relations establishment between Mongolia and Japan.

Other meetings were run with a governor of Niigata prefecture H.Izumida and Mayor of Nagaoka city T.Mori. 

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Meeting of Women Parliamentarians of Northeast Asia (Mongolia, North Korea, South Korea, Russia and China) Concludes in Ulaanbaatar

Ulaanbaatar, November 25 /MONTSAME/ On Sunday, the first ever organized here forum of Women Parliamentarians of Northeast Asian Countries was organized and completed successfully in the UB city.

The action, initiated by the Mongolian women MPs, gathered women lawmakers from Russia, N.Korea, S.Korea and China. They shared views on topics themed "Role of women MPs in advancing peace and prosperity through education" and "Developing network of women MPs of Northeast Asia: World Women's Conference-2015".

The Speaker of parliament Z.Enkhbold opened the meeting, followed by Foreign Minister L.Bold and a chief coordinator for organizing the meeting Ms M.Batchimeg MP. They all highlighted goals of the meeting, a role of Northeast Asia in Mongolia's foreign policy, education matters, including actions being realized by Mongolia in frames of the UN on education for democracy.

The participants agreed that this forum must be run every year, expressed a satisfaction with the organization of the event, and noted that it gives many opportunities to cooperate. 

Congratulation was received from the Japanese Yuko Obuchi MP who could not attend the meeting.  
With a wish to bring more participants next time, the meeting ended with a success. 

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Related

North East Asian Women Parliamentarians' Forum in Ulaanbaatar ends successfullyInfoMongolia, November 25

Foreign Minister Delivers Speech at Women Parliamentarians Forum Montsame, November 25

 

How do you do... have you come far? New Mongolian ambassador wears traditional dress as he meets the Queen

·         His Excellency Mr Tulga Narkhuu given audience at Buckingham Palace

·         He presented Letters of Credence in traditional dress - royal blue outfit

·         But the outfit rather detracted from Her Majesty's rather muted mauve

November 14 (Mail Online) The Queen is used to being the most stylish person in the room.

But when she met the Mongolian ambassador yesterday, she may have felt a little under-dressed.

His Excellency Mr Tulga Narkhuu was given an audience at Buckingham Palace, as is customary when a newly-appointed ambassador or high commissioner arrives in the capital.

He presented his Letters of  Credence in traditional dress, with his bright royal blue outfit drawing the eye from Her Majesty's rather muted mauve.

His dazzling deel – a traditional Mongolian double-breasted overcoat – was complemented by a matching hat and leather boots.

Mr Narkhuu, who was educated at the Moscow State Institute of International Relations, is fluent in English, Russian and Chinese.

He became Mongolia's ambassador to the UK in June, having previously held posts in China, Singapore and the US.

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