Monday, November 11, 2013

[SouthGobi to redo results of past 3 years, HBO extends option for 51% of DPRK oil assets, and Invest Mongolia agency to be formed]

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Monday, November 11, 2013

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Overseas Market

SGQ closed down 10.83% to C$1.07 on Friday on the announcement, made after HK close, before TSX open

UPDATE 1-SouthGobi Resources to restate results for past 3 years

Nov 8 (Reuters) - Coal miner SouthGobi Resources Ltd (TSX:SGQ, HKEx:1878), controlled by Rio Tinto, said it would restate results from 2011 through 2013 because of an error in the way it booked revenue from coal sales at its Ovoot Tolgoi mine in Mongolia.

The company said it expects a delay in filing its third-quarter results due Nov. 11, after it recognized revenue earlier than it should have at the flagship mine.

The mine produces and sells coal to customers in China.

Turquoise Hill Resources , through which Rio controls SouthGobi Resources, also said it would restate its results for the same period.

SouthGobi said it should have recognized revenue when coal was loaded onto a customer's truck, and not when the coal was delivered to the customer's stockpile, without being collected.

The company said had applied for an order to stop its management from trading in its stock.

SouthGobi said that if it delayed filing of the restated results beyond Nov. 14, it could potentially default on convertible debentures held by China Investment Corp.

SouthGobi has had a strained relationship with the Mongolian government. The country is investigating if the company has breached anti-corruption, money laundering and taxation laws.

Mongolia has annulled more than 100 mining licenses following a criminal investigation into former government officials accused of illegally issuing licenses between 2008 and 2009, raising concerns among foreign investors about the risks of doing business.

Another Canadian company, Kincora Copper, said on Thursday that it had received a letter from Mongolia's Mineral Resources Authority saying that two of its licenses had been revoked.

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SouthGobi Anticipates Delay in Filing 3rd Quarter 2013 Financial Statements to Reflect Restatement and Provides Further Updated InformationSouthGobi Resources, November 8

Turquoise Hill Announces Restatement of Previously Reported Financial ResultsTurquoise Hill Resources, November 8


Turquoise Hill to Restate Results After SouthGobi Reviews SalesBloomberg News, November 8


Prophecy Coal Pays Off Outstanding Loan

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Nov. 8, 2013) - Prophecy Coal Corp. ("Prophecy" or the "Company") (TSX:PCY)(OTCQX:PRPCF)(FRANKFURT:1P2) announces that it has sold 18,525,000 Common shares of Prophecy Platinum Corp. previously owned by the Company in a private sale to arms length purchasers. Proceeds from the sale were used to fully pay out the secured loan from Waterton Global Value L.P.

After closing the private sale, the Company owns approximately 7.3% of the issued and outstanding shares of Prophecy Platinum Corp.

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Local Market

MSE News, November 8: Top 20 -1.75%, Turnover 51.1 Million

Ulaanbaatar, November 8 /MONTSAME/ At the Stock Exchange trades held Friday, a total of 105 thousand and 655 shares of 21 JSCs were traded costing MNT 51 million 132 thousand and 292.00.

"HB Oil" /67,710 units/, "Remicon" /20,009 units/, "Silicate" /10,000 units/, "APU" /3,800 units/ and "Genco Tour Bureau" /2,152 units/ were the most actively traded in terms of trading volume, in terms of trading value--"HB Oil" (MNT 22 million 745 thousand and 480), "APU" (MNT fourteen million 545 thousand and 350), "Remicon" (MNT three million 460 thousand and 530), "UB BUK" (MNT two million 812 thousand and 500) and "Silicate" (MNT two million).

The total market capitalization was set at MNT one trillion 480 billion 946 million 998 thousand and 317. The Index of Top-20 JSCs was 14,361.48, decreasing by MNT 255.28 or 1.75% against the previous day.

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Ulaanbaatar, Mongolia – 08 November 2013 (BDSec) HBOil JSC (MO:HBO) today announced that it will be featured as a presenting company at the annual Mongolia Investment Summit in Hong Kong. The conference is being held 19-20 November 2013, at the Four Seasons Hotel in Hong Kong. Joseph Naemi, Director of HBOil will provide an overview of the Company's business during the live presentation, with a particular emphasis on the hydrocarbons exploration potential of both onshore and offshore DPRK.

For investors attending the Mongolian Investment Summit, please click on the following link to schedule a one on one meeting with HBOil, as part of the conference:

Separately, HBOil has negotiated an extension of its Option Agreement for the acquisition of up-to 51% beneficial ownership of Korex Ltd. ("Korex"), which holds the exclusive rights for the exploration and production of hydrocarbons in the entire territorial waters of DPRK in the East Sea. HBOil's Option to purchase up-to 51% of Korex, will now expire on 31 January 2014; allowing HBOil additional time to raise the necessary funds to exercise its Option in full.

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BoM Exchange Rates: November 8 Close



















November Chart:

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Total outstanding 1-week bills fall by 110 billion to 1.24 trillion

BoM issues 342.8 billion 1-week bills

November 8 (Bank of Mongolia) BoM issues 1 week bills worth MNT 342.8 billion at a weighted interest rate of 10.5 percent per annum /For previous auctions click here/

Link to release


Minister of Economic Development Meets with Standard & Poor's Experts on Annual Visit

November 8 / Minister of Economic Development N.Batbayar received Standard & Poor's Agency Director of the Division for Government and Public Finance Ratings, Liang Zhong and Associate Director of Sovereign Ratings, Agost Benard on November 05, 2013.

The experts have arrived in Ulaanbaatar to benchmark and research the country's credit in the frames of annual visit to Mongolia.

Therefore, Minister N.Batbayar introduced Mongolia's current economic situation and Government policy and programs to adhere in order to provide further sustainable economic growth.

Also, Minister informed the recently approved Investment Law that aims to provide friendly environment for investors as well as Mongolia's investment regulations, moreover introduced ongoing projects on Oyu Tolgoi, Tavan Tolgoi and railway, and exchanged views on current currency fluctuations and other relative issues.

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Mongolia gears up for the fight of its mining life

November 11 ( On November 3 Mongolia's new, friendlier foreign investment law came into force.

Probably not a day too soon.

The Asian nation of three million citizens, dependent on the mining sector to fuel growth, is desperate to turn around the slump in its economy and the steep fall-off in foreign investment.

Foreign direct investment in the country dropped 49% to September 2013 compared to last year which already marked a 17% year-on-year decline, the value of the currency, the tugrik, is down 20% this year, inflation has returned to double digits and the Mongolian central bank's off-balance sheet spending is burning through foreign reserves as foreign debts balloon to 55% of GDP.

The path to prosperity for Mongolia, ranked 155th in the world according to GDP per capita, has always been a rocky one. The country has been bailed out by the IMF no fewer than five times and it suffers a domestic bank failure on average every 18 months.

While the changes to the 2012 Strategic Entities Foreign Investment Law (SEFIL) including greater certainty surrounding mining taxes and royalties and the scrapping of the distinction between private foreign and domestic investors are being universally welcomed as a positive step, a number of issues remain unresolved.

Mongolia is currently being sued in international courts by South Africa's Standard Bank after a $120 million loan to a leading Mongolian banker and industrialist backed by the state-owned copper miner Erdenet went sour.

The debacle has prompted Standard Bank, 20%-owned by top Chinese bank ICBC, to exit the country entirely, selling its $350 million Mongolian portfolio to a French bank.

It marks something of a retreat for Standard Bank which in 2009 was the sole lead arranger for the country's inaugural sovereign bond issue.

Canadian uranium explorer Khan Resources, is currently seeking $326 million in damages from the government of Mongolia due to the illegal expropriation of its permits with a trial by the International Arbitration Tribunal in Paris scheduled to start Monday.

Legal action is also likely to follow from the revocation at the end of October of  106 exploration licenses –  covering a landmass approximately six times larger in surface area than active mining licenses in Mongolia – held by companies caught up in a corruption case relating to former senior government employees in the Mineral Resource Authority of Mongolia.

The mining sector accounts for more than 20% of GDP today, but has the potential to contribute a much greater proportion to the economy where 30% still live in poverty.

The Chairman of Oyu Tolgoi and Mongolia's Trade and Foreign Affairs Ambassador at Large Batsukh Galsan recently had this to stay about the prospects for mining inside the country:

"I have seen excitement about Mongolia reach fever pitch and drop off a cliff multiple times. Examples include the passage of the 2006 minerals law, adoption and repeal of the windfall profits tax, and recently of course the delay in developing the underground mine at Oyu Tolgoi," he said.

"In spite of the ups and downs, the trend has been a steady march forward as more and more investors discover the long term prospects of the country and the potential rewards for patience and commitment," he added.

Oyu Tolgoi is seen as the number one issue that needs to be resolved to restore investor confidence in Mongolia. The copper-gold mine which could have final bill of as much as $14 billion is 34% owned by the Mongolian government with Rio Tinto-controlled Turquoise Hill (TSE:TRQ) owning the rest.

Talks over Oyu Tolgoi expansion and reworking the initial 2009 deal which first unleashed the Mongolian investment boom, have dragged on for the better part of a year and both sided provided fresh faces for the Oyu Tolgoi board in September to break the impasse.

The disputes are centred on costs with Rio's management fees and the Mongolian government's share of funding proving particular sticking points.

Wrangling over Oyu Tolgoi has also snagged another Vancouver-based company besides Turquoise Hill. Mongolia in February suspended Entrée Gold (TSX:ETG)'s mining permits in an area adjacent to the project and the explorer may have to cede a portion of its property to the government as part of an overarching deal. (Mogi: the author should know Entrée was is a signatory in 2009 OTIA, and had agreed to transfer 34% of the ETG-OT JV area to Mongolia then)

Time for an agreement – neither side have commented on the negotiations much beyond boilerplate statements of "progress" – is running out.

The deadline to finalize a World Bank-led $4.5 billion project finance package (Mogi: $4b billion) – the largest in the history of mining – is December. (Mogi: December 12 to be exact)

Incentives to resolve the dispute are definitely not in short supply. The mine, which shipped its first copper in July, is set to contribute as much as a third of the nation's economy if the underground expansion where 80% of the project's value lies were to go ahead.

A positive outcome on Oyu Tolgoi, where some 2,000 workers have been let go (Mogi: 1,700) due to the delays and the board has been reconstituted by both sides, would do much to restore the confidence of investors, many of whom have burned fingers in the country before.

Independent Mongolian Metals & Mining Research, an Ulaanbaatar-based research company headed by Dale Choi, is a bit more pessimistic although a positive outcome on Oyu Tolgoi has the potential to be a strong catalyst:

"While well-overdue legislative change, such as the new Investment Law, is a potential positive development, without flagship transactions and resolutionof key security of tenure uncertainties we do not believe the foundation for a return towards private sector growth will be provided."

Coal, the bedrock of the Mongolian resource economy, is in deep trouble too.

Mongolian coal exports to China, which buys 9 out of every 10 tonnes, have plummeted to $542 million compared to $1 billion worth during the first half of 2012, as the the land-locked country is muscled out by Australian exports.

On top of plummeting volumes, exports channeled through state-owned Erdenes Tavan Tolgoi are sold for $40 a tonne compared to a ruling price for high-quality metallurgical coal of $120 – $150 a tonne.

The price is the result of an off-take agreement with Aluminum Corporation of China (Chalco) that sees Mongolia repay $350 million of debt in coal exports by the end of the year, something that authorities now say it will not be able to honour. (Mogi: early 2014 is now the new forecast by ETT)

Talks with international miners on developing the western block of the Tavan Tolgoi deposit in the South Gobi desert, the world's largest deposit of high-quality coking coal, is ongoing, but the project's history does not bode well.

Erdenes TT controls the main block of the 6.4 billion tonnes deposit that has been mined since the 1960s, but the Tsankhi section which is being offered to foreigners on its own holds some 1.2 billion tonnes.

Mongolia struck a deal with US giant Peabody Energy, China's Shenhua and a Russian-Mongolian consortium in July 2011, only to cancel the whole process two months later.

The much-vaunted multi-billion dollar IPO of Tavan Tolgoi in Hong Kong and London, first mooted more than five years ago, also remains on ice.

Following its so-called Article IV mission to Mongolia the IMF issued a stern warning about Mongolia's prospects given the country's deteriorating macro-economic picture, reduced investment from developed economies and the economic slowdown in China:

"Spillover risks will particularly affect the more vulnerable emerging market economies. In light of this, Mongolia needs to change course to avoid becoming highly exposed to these external shocks and risks of crisis."

Link to article


Mongolia is not flat

By Jargalsaikhan Dambadarjaa

November 11 (UB Post) Thomas Friedman, a world renowned author, famously declared, "The world is flat." In his book, he argued that any underdeveloped country could attain rapid economic development by taking advantage of the age of globalization, if easier movement of capital and labor between countries is allowed, and investment funds seeking new business opportunities are able to transfer substantial amounts of money from country to country in no time.

Every country can achieve such rapid development if they manage to achieve stable government, uphold the rule of law, and create an investor-friendly climate that is easy to understand. Although the Mongolian government used to invite investors to the country with a warm welcome, they had a sudden change of heart and started to pick on investors by building numerous "barriers and obstacles," which ultimately pushed them out.

Nevertheless, the government has looked back on its actions and is now trying to create the most stable investment environment possible. However, more time is required for the foreign investment that has already left to return. Also, despite a good investment environment, some investors turn the other way and decide to spend their money somewhere else. After all, it appears that the world is not that flat yet, if you look at the examples of many countries, especially Mongolia.

Achieving sustainable economic development in the long term requires foreign investment. In order to attract foreign investment, many intangible factors are needed besides an investment-friendly legal environment. When those factors are combined into one element, we have what we call culture.

Culture is characteristics shared by a particular group of people, and it can be defined by their language, religion, tradition, social behavior, music, and arts. Culture expresses the beliefs and values of the people. Even though some people might not be aware of it, our whole life – our thoughts, actions, and feelings are driven and governed by culture. Culture is not something that belongs to an individual, but it is a creation that is collectively owned. Culture is an inseparable part of social life, as it allows people to understand one another and connect with each other.

Impacts of culture on the economy

In his book written in 1776, economist Adam Smith argued that millions of people who are pursuing their own interests make their contributions to the formation of a society that is capable of sustainable development without the need for any involvement by the central government. He called the force that regulated all of this "Invisible Hand". We have bread to eat only because the baker made the bread not out of the goodness of his heart, but out of his desire to improve his well-being. Any individual action that is intended to serve self-interest usually ends up serving the common good as well. It means that culture affects the economy.

Lebanese entrepreneurs own a huge amount of capital in West Africa, and the richest person in the world is Carlos Slim, who is Lebanese. Most of the wealthiest people in South America are from Europe, and six of the seven oligarchs that emerged from Russian privatization were Jewish. Moreover, most of the Croats living in the former Yugoslavian region are living more prosperously than the Serbs. In conclusion, it is hard to deny that cultural differences produce differences in income.

Scholar Gregory Clark wrote that the industrial revolution would not have taken place in any other country but Great Britain. By the beginning of the 18th century, England had stable political institutions, a reliable legal system, and a functioning market where property values were predictable. However, they did not have all of the necessary conditions for a surge in economic development.

As English society and culture gradually transformed, the missing ingredient, according to Clark, was the change in human behavior that prompted individuals to acquire competitiveness and work ethics to labor for what they deserved. By that time, English society experienced a significant reduction in crime and violence. The middle class prioritized hard work above all else, and strived towards getting better results. As a result, the entire population became more literate as well as hard-working. All these factors led England to the successful industrial revolution.

Cultural values

In regards to the role culture plays in economic development, Guido Tabellini, an Italian scholar, stressed the importance of four specific cultural values in economic development and argued that there were higher GDP per capita in countries that exhibited higher levels of these four values. Those values were mutual trust, individual effort, generalized morality, and autonomous decision making.

Mongolian cultural values: Where are we?

Mutual trust: In a Mongolian society, people still have more trust in their family and relatives than they do in people outside of that circle. When family businesses expand, family members, rather than professional teams, are entrusted with management of the business. Our society, as a whole, does not recognize the difference between owning a company and managing a company. Lack of social trust is another reason why the capital market is not being developed in Mongolia.

Individual effort: Mongolian society is not readily accepting of those who have achieved distinguishable success and earned great wealth. As a result of the past experiences of working for the common good, people are slowly learning to appreciate, acknowledge, and respect the successes of others. Moreover, people are more likely to duplicate successful businesses that are already in place rather than come up with a brand new idea for doing business. Individual success is blocked by weak public governance in Mongolia today.

Generalized morality: Morality within a family is yet to be disseminated to every member of the society. Mongolians still have the strong attitude that nothing has to be cared about unless we are directly affected by it. People still view it as an ordinary act when others spit while walking in the streets and throw rubbish out of their car windows. We still have an attitude that does not give respect to strangers.

Autonomous decision making: Due to the nomadic culture that requires Mongolians to make prompt decisions in the event of extreme weather conditions, we have relatively higher independent decision making skills.

Many scholars such as, Amy Chua, Luigi Guiso, Robert Putnam, and David Landes add work ethics to the above mentioned four cultural values. When faced with an urgent task, nomads focus on competing the work as soon as possible. Instead of working hard consistently for gradual improvement in the future, like people from sedentary cultures, nomads want to see immediate results. The difference can be observed from looking at how Mongolian and Korean people work. Mongolians have weaker work ethics and discipline.

We can improve our labor productivity and acquire competitiveness by making certain changes in our cultural values, as mentioned above. If we manage to achieve this objective, Mongolians will enjoy more rapid economic development and improved livelihoods. However, a considerable amount of time is needed to make the necessary changes, as it depends on the efforts of every individual.

The time has come for us to put our best efforts towards making our beloved country "flat."

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Mongolia Signs Intergovernmental Agreement on Dry Ports

November 8 / On November 04-08, 2013, the second session of the Forum of Asian Ministers of Transport is being held at the United Nations Conference Centre in Bangkok, Thailand, where representing the Government of Mongolia, Minister of Road and Transportation A.Gansukh is attending.

The Forum discuss regional transport issues including those relating to regional transport networks, transport facilitation and logistics, financing options for regional infrastructure development, and sustainable and inclusive transport.

Recognizing the critical need to move toward a more sustainable path of development, the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) and member countries showed their leadership and commitment at the signing ceremony of the Intergovernmental Agreement on Dry Ports held as part of the Forum of Asian Ministers of Transport.

Convened by ESCAP from November 07-08, the Forum witnessed 14 member countries sign the Intergovernmental Agreement on Dry Ports, the third Intergovernmental Agreement to be negotiated under the auspices of ESCAP. By signing the Agreement, the Governments of Armenia, Cambodia, China, Indonesia, Islamic Republic of Iran, Lao PDR, Mongolia, Myanmar, Nepal, Republic of Korea, Russian Federation, Tajikistan, Thailand and Viet Nam underscored their pledge toward achieving the shared vision of an integrated intermodal transport and logistics system.

The Agreement aims to promote international recognition of dry ports, facilitating investment in dry port infrastructure, improving operational efficiency and enhancing the environmental sustainability of transport, where Mongolia's border ports of Zamyn-Uud, Sainshand, Ulaanbaatar and Altanbulag were considered as International Dry Ports, in addition Choibalsan is listed as potential dry port.

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PM's 30 Minutes with Media

Ulaanbaatar, November 8 /MONTSAME/ On Thursday, ongoing hospital construction projects and upcoming pay rise were the main issues at the traditional "30 minutes with PM" meeting. 

Opening his meeting with the media, the Premier N.Altankhuyag mentioned about a recently released comic book that, he presumed, will be a nice investment to the efforts of teaching Mongolian traditions to the youth.

The he focused on prominent issues occurring in health sector, and Health Minister Ms N.Udval was present at the meeting.

She informed about the ongoing construction projects of hospitals and health centers, "eight out of the 47 projects have ended, twelve are planned to be completed by the end of this year".

A project on erecting the Burn Center began a with tender offer of eight billion togrog, but this number has increased to 26 billion during the project implementation, she noted.

Responding to this, the PM told to stop such works financed by the state budget, adding that incomplete or half-finished buildings will be sold by auction and mentioned about the under-done building of Intelligence Agency that needs an add of over ten billion to be completed. 

The Government for reforms will increase salaries for the state servants, but will do it without prior announcement, "because we want it to be a real add to employee's living".

He also said the "Coal" project provides some 180 thousand households with cheap coals as another action done by his Government to save subsistence money of families.

The Premier said that from now, the hospitals will appoint their heads themselves like an independent body, instead of accepting management chosen by the Health Minister.

PM also commented a behavior of the Transport Minister A.Gansukh. The latter had recently wanted the parliament Standing committee on state budget to approve his Ministry's budget for 2014. "Submitting a single ministry's budget apart from others is unacceptable at all," the PM stressed, and said that related officials have been obliged to make the Minister responsible for this misconduct.

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Election Committee Chairman Nominated For International Award

Ulaanbaatar, November 8 /MONTSAME/ The Chairman of Mongolia's General Election Committee /GEC/ Ch.Sodnomtseren has been announced as one of finalists for an International electoral award.

He was nominated for the Electoral Ergonomy Award of The International Center for Parliamentary Studies (ICPS) along with Michael Ertel, a Supervisor of Elections at Seminole County Florida, USA.

Electoral Ergonomy Award, one of eleven awards granted by ICPS, recognizes outstanding initiatives taken by an Election Management Body to tailor some electoral procedures to the psychology of their voter and the specific characteristics of their electorate (cultural habits, demographic and geographical make-up of the population, social or literacy characteristics, etc).

Initiatives nominated for this award may pertain to any aspect of electoral ergonomy, such as the design of the polling ballots or adaptation of voting machines, the organization of the polling station or the polling booth, research on alternative voting mechanisms such as advanced, postal, or electronic voting.

The key criteria pertain to the taking into account of the needs and specific features of citizens in the decisions made by Electoral Management Bodies, be it in the design, evaluation, justification, and/or experimentation of voting procedures according to voters' needs, psychology and culture.

The winners will be announced at the Award Ceremony taking place in Kuala Lumpur, Malaysia on December 4 of 2013.

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Investment Agency will be formed

November 10 /Cabinet Press Office/ A regular Cabinet meeting was held on 9th of November and discussed 20 agendas resolving the following.

Investment Authority will be established under the Government Implementation Agency

There are over 250 agencies globally with the objective of attracting and boosting investment and protecting investor interests. Therefore, Mongolia needs a modern mechanism to attract investments matching the needs of investors and learn from best international practices. Thus, under the supervision of the Minister of Economic Development, the cabinet decided to form an Investment Authority. The authority will implement the rights and responsibilites stated in the newly approved Investment Law such as attracting foreign investors, sustainig the stability of legal and business environment, promoting the country's investment environment, and issuing stability certificate for eligible investors.

The new authority will be established on the base of Foreign Investment Coordination and Registration Department of the Ministry of Economic Development, transferring certain functions to the State Registration Authority, and also, adopting appropriate functions stated in the Investment Law. The authority will have promoting, consulting, investment appraising, administration, and human resource units.

Mongolia introduced National Plan of the Open Government Partnership 

The plan reflected the contribution of civil society and state organizations. It has 3 main objectives, 11 goals to be implemented by 30 action-plans. The Cabinet decided that Mongolia's objectives are in line with the OGP's therefore, resolved that Mongolia will join the OGP.

To ensure the transparency of the agreements government is planning to implement Transparent Budget and Transparent Procurement. The Cabinet Press Office stated that by joining the partnership it will benefit the country on international level, and also will help implementing the domestic plans on making the government more transparent. 

In brief:

- Minister of Foreign Affairs was charged to discuss the results of the SGK Chairman Z.Enkhbold's official visit to Turkey, and submit the report to National Security Council.

- Cabinet resolution will be made in accordance with 183th resolution of 2013, on monetary awards for successful athletes participated in continental and world level competitions.

- Minister of Environment and Green Development S.Oyun will be responsible for further planning and implementation of Mongolia-Hungary economic partnership followed by the meeting held in Budapest on 7, 8th October, 2013.

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Invest Mongolia Agency: Unofficial Translation of Mongolian Law on Investment

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Хөрөнгө Оруулалтын Тухай Хууль


Hogan Lovells: Mongolia revises its regulatory framework for foreign and domestic investment, October 2013


Mongolia's new investment rules to spur mining sector development: miners

November 8 (Platts) Mongolia's new legislation that removes distinction between domestic and foreign companies when it comes to investing in the country will help attract more investment, miners with projects in the region said Friday.

From November 1, foreign companies will not need to seek government or parliamentary approval before investing in Mongolia. There will be no restrictions on the amount of investment if the company is not 50% or more owned by a foreign government. If the company is state-owned with more than 50% share held by a foreign government, it cannot buy more than 33% of a project in Mongolia.

The new law also provides a stable tax structure as the rates cannot be amended by future legislation unless those changes benefit the investor. It also removes all restrictions on the movement of assets in or out of the country and also provides protection against nationalization of the investors' assets.

"We believe that this will improve sentiment towards Mongolia-related investment stories," Australia's Aspire Mining said in note to stakeholders Thursday. Aspire is developing the Ovoot coking coal project in northern Mongolia, which is due to begin production in 2017 at 5 million mt/year.

"While the investment law has become effective recently and further regulations are to be issued, it is certainly a welcome development which should promote domestic and foreign investment in Mongolia," an official from SouthGobi Resources said.

"Reports also suggest that the law is a first step in streamlining the investment environment and creating more favorable investment conditions by simplifying the registration process and removing some approval requirements," he added.

SouthGobi operates the Ovoot Tolgoi mine located 40 kilometers from the Shivee Khuren-Ceke crossing on the Mongolia-China border. 

Mongolia's largest mining operation is Rio Tinto's Oyu Tolgoi copper mine located in the southern Gobi desert, 100 km north of the Mongolia-China border. Oyu Tolgoi began operating in July and Rio's share of production rose to 10,300 mt in the July-September quarter from 4,400 mt over April-June.

Though a Rio Tinto official would not comment on the impact of the new law, at the Mongolian Mining Summit held in Perth last week Oyu Tolgoi's Chairman Batsukh Galsan said the country has actually been becoming more investor friendly despite what he called ups and downs.

Oyu Tolgoi is owned by the government of Mongolia (34%) and Turquoise Hill Resources (66%), which is held 50.8% by Rio Tinto. The miner also manages the project.

"I have seen excitement about Mongolia reach fever pitch and drop off a cliff multiple times. Examples include the passage of the 2006 minerals law, adoption and repeal of the windfall profits tax, and recently of course the delay in developing the underground mine at Oyu Tolgoi," he said. 

"In spite of the ups and downs, the trend has been a steady march forward as more and more investors discover the long term prospects of the country and the potential rewards for patience and commitment," he added.


Investment in Mongolia has waned over the last two years after the introduction of a Strategic Entity Foreign Investment law in May 2012, which increased the number of approvals required by foreign companies.

During 2012, foreign direct investment in Mongolia fell by 17% and a further 47% during January-August 2013, Aspire pointed out. This was "a clear indication that sentiment toward Mongolia had quickly deteriorated given the increased political and legal uncertainty felt within the wider investor community," it added.

The IMF, however, sees Mongolia's medium-term prospects as positive due its abundance of natural resources.

"We welcome the adoption of the new Investment Law. This, along with other legislative changes the government is making, can be expected to render the business environment for domestic and foreign investors more predictable and transparent," the IMF said in a statement issued on October 7.

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Mass permit revocation puts Mongolia's credibility back in spotlight

Again, the question of Mongolia's credibility in the mining sector rises after a decision to revoke over a hundred exploration licenses.

HALIFAX, NS, November 8 (MINEWEB) Mongolia's Mineral Resource Authority, which issues mining and exploration licenses, recently revoked 106 exploration licenses that it had earlier given out under the tenure of its former, and since jailed, Chairman, D. Batkhuyag. But, it was more a formality, really, than anything else. Back in January a Mongolian court found Batkhuyag guilty of corruption and sentenced him to over six years in jail, a sentence later lowered to four years. At the same time the court voided 106 exploration licenses, contending they did not comply with Mongolia's mineral laws, which are still in flux.

Some see the revocation – now official – as politically motivated, wrapped up in an anti-corruption drive by the Mongolian government. Dale Choi, founder of Independent Mongolian Metals & Mining Research, has been covering the issue in research notes for his clients. In an interview Thursday he expressed deep concern about the decision.

"Both sides lose," he said, referring to the government and mining or exploration companies. "It's a lose-lose situation." Exploration companies lose their licenses and, as Choi sees it, the Mongolian government loses yet more credibility as a place for exploration dollars to flow. "I think the authorities are making a very big mistake in not settling more quickly," he said.

The argument for Mongolia's declining credibility as a mining and exploration jurisdiction comes down especially, but not only, to three outstanding issues: the pending arbitration over the alleged expropriation of Khan Resources' uranium project; the Mongolian government's 2010 decision to ban the issue of more exploration licenses until a new mineral law comes into effect; and the push and pull between Rio Tinto and Mongolia over the Oyu Tolgoi copper-gold mine, where the current argument has turned to the question of the funding of the phase II underground development. With these already very visible issues, a broad revocation of exploration licenses becomes harder to spin positively. "It's damaging for the country," Choi says, adding: "It's a concerning trend."

Yet not all those deeply invested in Mongolian exploration see the move as an existential threat to the Mongolian mining and exploration scene. The head of one long time explorer of Mongolia, who preferred not to be named in speaking with Mineweb, doesn't see ulterior motives or political gamesmanship in the government decision to revoke exploration licenses. Rather the source sees the move to cull 106 exploration licenses as being rooted in a government attempt to clean the slate ahead of a new mineral resource law.

In this respect the source signaled optimism. "It sets the stage for the re-issuance of exploration licenses," the source said. Still, the exploration veteran acknowledges the revocation caused damage. Public companies had invested in Mongolia after deciding they had rightful title to their licenses.

Behind the revocation there are few specifics. It's not unreasonable to wonder if the Mongolian government could be casting its net too wide, treating all revoked exploration licenses that Batkhuyag issued as tainted – perhaps wrongly. It's impossible to say without details.

Indeed, Choi notes in research and conversation that a group representing 31 of the revoked license holders, for example Kincora Copper, which reported the revocation of the exploration licences, have called for more investigation. "Not one of the companies were examined, investigated," he said, referring to the January court case that found Batkhuyag guilty and voided the 106 exploration licenses. "They want to be investigated. The ones saying that - they're very clean." Still, Choi does not whitewash Mongolia. He acknowledges issues with corruption. "There is very fertile ground for illegal activities," he said.

Indisputable is that Mongolian exploration has taken a nose-dive in the past five years and not just because of the recent turn for the worse in mining markets. In the past half decade the number of exploration permits in Mongolia has fallen by about half, while the area covered by exploration permits has crumbled even more: from about 44 percent of the country to 14 percent in late 2012. The ban on new exploration licenses and issues over security of tenure are heavily to blame. And without strong exploration programs running in Mongolia, it becomes far less likely new Oyu Tolgoi's – drivers of Mongolia's new economy – will be found.  

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Mongolia rescinds 106 exploration licensesThe Northern Miner, November 8

Mongolia cancels over 100 mining licencesBusiness New Europe, November 8

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Direct Ulan Bator-Erenhot flight to launch

HOHHOT, Nov. 9 (Xinhua) -- China's Capital Airlines will open a direct air route next Thursday between Mongolia's capital city of Ulan Bator and Erenhot City in north China's Inner Mongolia Autonomous Region.

The airline will operate two weekly round-trip flights with a flight duration of one hour and 20 minutes.

The lowest fare without tax for one-way and round-trip tickets will be 620 yuan (101.8 U.S. dollars) and 1,050 yuan respectively.

It is the first year-round direct flight opened between the two cities.

On August 7, MIAT Mongolia Airlines opened a temporary direct flight between Ulan Bator and Erenhot. The service will end on November 20.

Erenhot, bordering Mongolia, has been a bridgehead for China's economic and trade ties with its northern neighbor, with many Mongolians residing and doing business in the city.

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Erel Group Invests in One of Biggest Precast Plants in World Utilizing Latest German Technology

November 8 / the past few years, Mongolia has developed its vast mining assets to become one of the fastest growing economies in the world. The Government of Mongolia is focusing on improving living standards for its population through the provision of new housing and development of new districts.

With the investment of Erel Group in a large construction project near Ulaanbaatar such new districts could be erected very soon.

Erel Group is a diversified business group operating in Mongolia with its core business segments in construction materials manufacturing, construction equipment supply, real estate development and financial services.

Recently, Erel Group concluded a contract with EBAWE Anlagentechnik GmbH, a German leading manufacturer of precast equipment with the supply of an automatic precast plant. The plant is designed for the production of hollow core slabs, solid walls, sandwich walls, beams and columns. The plant will be one of the biggest in the world utilizing the latest technology "made in Germany".

The advantages in building with precast panels in comparison to ordinary building methods are obviously: very short construction times due to prefabrication of all concrete products, constant high quality, flexibility in form, dimensions and design, cost-effective installation and high resistance against earthquakes.

The new precast facility consists of a carrousel plant equipped with an automatic mesh welding plant, 6 casting beds for the manufacture of hollow core slabs and multiple mould systems for the production of internal walls, stairs and other concrete products.

The provision of concrete will be ensured by means of a newly installed batching plant and connected bucket conveyor system.

For architectural panels a concrete grinding machine is available.

EBAWE has been designing and installing production plants for the precast concrete industry for more than 50 years now. The company belongs to the Progress Group and is one of the four mechanical engineering companies that each are specialized in another field. This unique selling point makes the company group to one the world's leading manufacturer for precast technology and enables their clients to conclude only one contract instead of negotiating with multiple suppliers. This reduces the project management work of the client to a minimum and guarantees a smooth and fast progress in the planning, installation and commissioning stage.

The whole plant is operated by a central manufacturing execution system called "ebos". Ebos undertakes the entire precast element production process and offers a lot of ingenious modules, e.g. 3D visualization, producibility tests and control diagnostics.

The new precast concrete plant, known as Erel BUK-1, aims to be a major supplier of precast concrete elements for the Ulaanbaatar City Regeneration Project and Mongolia's development in general. The goal of the Ulaanbaatar City Regeneration Project is to develop and build up to 200,000 housing units as well as the associated infrastructure for the city's population which will include schools, hospitals, office space, retail space, parks and recreational areas, district heating, electricity, water, sewerage and other utilities and amenities. Today, it is estimated that more than 60% of the city's population reside in informal housing within areas known as "Ger" Districts which are not connected to the city's main infrastructure.

The project will be financed by the Development Bank of Mongolia and has a strong support by the state of Mongolia who is theowner of the DBOM. The cooperation with a German bank and the German government guarantee agency "Hermes" is foreseen.

Accordingly, the construction project of Erel Group and the German supplier EBAWE represents not only a huge investment in the Mongolian economy but also a further development in the improvement of living standards and future prospects of the Ulaanbaatar's population.

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Serbia, Mongolia sign agreement on visa liberalisation

BELGRADE, November 8 (Tanjug) - Serbian Foreign Minister Ivan Mrkic and his Mongolian counterpart Luvsanvandan Bold signed in Belgrade on Friday the agreement on visa liberalisation which makes room for free flow of passengers and goods between the two countries and further improves their economic cooperation.

At a joint news conference at the end of the meeting, Mrkic expressed the hope that this would open the path to bigger business projects.

Noting that Serbia and Mongolia share traditionally friendly ties, Mrkic said that Mongolia has a very dynamic economic development and the country's economic growth is on the top list in the world.

Mrkic expressed certainty that Serbian companies would be interested in presenting on the Mongolian market and added that the recently adopted laws in Mongolia make room for stable operation.

Mrkic said that he visited Ulan Bator in April and noted that this is the first official visit of a Mongolian foreign minister to Serbia.

Mrkic said that there is also a possibility of reaching an agreement on the visit of Prime Minister Ivica Dacic to Ulan Bator.

Bold stated that his visit to Belgrade bears historic importance as this year marks the 57th anniversary of the diplomatic relations between the two countries.

The meeting covered a series of issues connected to the economic cooperation between the two countries, including political consultation, possibility of establishment of mechanisms of cooperation between the two parliaments and governments, as well as cooperation in the sectors of education, science and culture, Bold said.

He noted that his country occupies the 10th place in the world according to mineral sources, and added that Mongolia has achieved a two-digit economic growth rate.

The economic growth in Mongolia is a downright miracle and a major success, and it can be shared with Serbia, the Mongolian foreign minister said, adding that Serbian businessmen can present their offer on the Mongolian market.

Bold is heading the delegation of Mongolia in its visit to Serbia, and a seminar on the improvement of the economic cooperation between Serbia and Mongolia was held in the Serbian Chamber of Commerce earlier on Friday.

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Serbia Wants to Improve Economic Cooperation with Mongolia Says PM Dacic

BELGRADE, November 8 (Tanjug) - Serbian Prime Minister Ivica Dacic said during talks with Mongolian Foreign Minister Luvsanvandan Bold on Friday that Serbia would like to intensify the political dialogue and improve economic cooperation which has been rather modest up to this point.

It was noted that there are prospects for cooperation in the sectors of construction and infrastructure, the Serbian government said in a release.

"Mongolia is interested in reviving cooperation in the domains of culture, education and technology development," it was said during the meeting between Prime Minister Dacic and Mongolian Foreign Minister Luvsanvandan Bold.

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South Africa Deputy President Kgalema Motlanthe undertakes working visit to Mongolia

November 9 (Government of South Africa) Deputy President Kgalema Motlanthe undertakes a working visit to Mongolia, Ulaanbaatar, 30 October 2013 to 1 November 2013.

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Mongolia ambassador stresses on educational ties with India

November 8 (Hindustan Times) Addressing the students at Maharishi Dayanand University (MDU), Mongolian Ambassador to India Sanjaasuren Bayarra stressed on the need of strengthening educational ties between the two countries, here on Friday.

Here as a chief guest of inter-zonal youth festival, he said that India and Mongolia share historical ties and active co-operation between them can further improve the academic scenario.

The three day youth festival commenced today with dance and music performances and literary expression. MDU vice chancellor HS Chahal threw light on the historical and cultural linkages of both countries and said that avenues of educational and cultural exchange can be explored between the two countries. Noted folk singer Prem Dehati enthralled the audience with soulful Haryanvi folk music.

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3-day Unifest begins at Maharshi Dayanand UniversityTNN, November 8



Juba, November 7 (UNMISS) The United Nations Under-Secretary-General (USG) for the Department of Field Support, Mrs. Ameerah Haq will travel to Bentiu, the capital of the State of Unity on Friday 8 November. She will meet with the Deputy Governor, Colonel Mabek Lang de Mading and the Council of State. She will also visit the headquarters of the 2nd Mongolian Battalion of the United Nations Mission in South Sudan (UNMISS).

While with the Mongolian Battalion, USG Haq will attend a Medal Parade where Mongolian peace-keepers will be decorated in appreciation of their work to support the people and authorities of Unity State. The 2nd Mongolian Battalion is due to rotate next week and be replaced by the 3rd Mongolian Battalion, with a force-strength of 850 men and women.

Mongolian engineers have started assisting local authorities as early as June, when the Governor requested their support to address the damage caused by seasonal heavy rains. The engineers have undertaken infrastructure work such as levelling and building drainage along Bentiu's main road, constructing dykes or draining and rehabilitating the public sports complex of Bentiu so it could host the independence celebrations in July – just to name a few of their projects.

"By working together and supporting the State Government, the local authorities and the citizens of the State, the Mongolian Battalion and UNMISS are striving to help extend state authority, prevent conflicts, protect civilians and consolidate the peace so the people can build a strong economy and a fairer society, where every child in every part of this state can succeed and achieve his or her dreams" USG Haq says about her travel to Bentiu.

USG Ameerah Haq's visit is part of a wider tour in South Sudan. In Juba, she will meet with the Minister of Foreign Affairs and International Cooperation, Hon. Dr. Benjamin Mariel Barnaba as well as UNMISS staff and the Mission's senior management.

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November 22 Event in Vancouver: Canada-Mongolia Relations

Program on Inner Asia Institute of Asian Research UBC

Friday, November 22, 2013
UBC Robson Square, Room C400

On the occasion of the 40th anniversary of Canada-Mongolia Diplomatic Relations

Canada-Mongolia Relations and Mongolian Foreign Policy


Honorary Consul for Mongolia

Keynote Address

"The Next 40 Years: Why Mongolia Should and Will Matter for Canada"

Canadian Ambassador to Mongolia

Panel Presentations

1. "The State of the Mongolian Economy and Future Paths"

Faculty of Management
Royal Roads University

2. "Key Drivers of Mongolian Foreign Policy"

MENDEE Jargalsaikhan
Political Science

3. "Diplomacy of Knowledge – The Future of Canada-Mongolia Relations"

Institute of Asian Research

As always, the event is free and open to the public, but please register to help us in the planning.

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Social, Environmental and Other

Mongolia to Implement Its National Strategy for Green Growth in Collaboration with GGGI

November 8 / Mongolian delegation led by Deputy Speaker of the State Great Khural (Parliament) L.Tsog and Minister of Nature, Environment and Green Development S.Oyun have participated at the Green Development Dialogue held in Seoul, Korea on November 03-05, 2013.

The event was organized by Global Green Growth Institute (GGGI) and was significant in particular the Parliament of Mongolia is now discussing the principles and medium term program for green development submitted by the Government.

Former President of the Republic of Korea Lee Myung-bak announced a "low carbon, green growth" strategy as a new vision to guide the nation's long-term development in 2008 and founded the national committee. Later in 2009, the Government of Korea adopted the Green Growth Law, after which the Global Green Growth Institute was established in June 2010 that grew into new kind of international organization. During the Global Green Growth Summit 2013 held in Songdo, Mongolia became a member state of GGGI.

Director-General of the GGGI Howard Bamsey noted, "Mongolia supports the Institute's action from the early beginning and weglad to cooperate. In order to broaden our activity in Mongolia, we have opened GGGI representative office in Ulaanbaatar last September and the GGGI is ready to co-implement the Mongolia's National Strategy for Green Growth".

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Greenfields man helps combat Tuberculosis in Mongolia

November 11 (Mandurah Mail) IN AN article for online publication The Conversation, Cameron Wright likens the spread of tuberculosis in Mongolia to the reign of the nation's 12th century warlord Genghis Khan.

"This invader, Mycobacterium tuberculosis, favours stealth over force," he writes. "The disease that it causes, tuberculosis (TB), has endured from ancient times into the 21st century.

"TB disproportionately affects the world's vulnerable, with over 95 per cent of active cases and deaths caused by TB occurring in developing countries.

"The World Health Organization's (WHO) most recent Global TB Report estimated that in 2011 there were 8.7 million new TB cases and each day, the disease claims around 4,000 lives.

"For a disease that is treatable and curable, these statistics are alarming."

The 24-year-old Greenfields resident and Youth Ambassador for Development currently resides in Ulaanbaatar, Mongolia, where he works as a Public Health Project Officer for the Mongolian Anti-Tuberculosis Association (MATA).

Since he flew to Mongolia in March this year, he has teamed up with various national and international health organisations, including WHO and World Vision Mongolia, to help combat TB and raise awareness of the MATA's work worldwide.  

"Mongolia has a high burden of TB relative to its population," he said.

"[The MATA] coordinates the provision of anti-TB medications, mainly targeting people unable to visit health clinics regularly.

"Our volunteers are fantastic and the results of the program really are impressive.

And, he says, the MATA's work is not dissimilar from community programs in his hometown.

"My mum, Helen, is a nurse at Peel Health Campus; I remember going around with her when I was younger when she helped with the 'Meals on Wheels' program.

"This and other programs in Mandurah share many similarities with the MATA's work here in Mongolia. 

"Empowering people to take ownership of their health is an effective way to improve health and build stronger communities, this concept is as applicable in Mandurah as it is in Ulaanbaatar."

Mr Wright said his plans post-Mongolia are "still evolving", but hopes to secure a future in the public health sector when he returns in March next year.  

"It will also be good to see my family and friends." he said.    

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The Glaciers of Mongolia  

Ulrich Kamp, Brandon Krumwiede, Kevin McManigal, Caleb Pan, Michael Walther, and Avirmed Dashtseren

Occasional Paper No. 61 2013

Institute of Arctic and Alpine Research • University of Colorado

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Projects Abroad: Journalism in Mongolia

(Projects Abroad) Interns can get involved with production as well as broadcasting during their time in Mongolia.

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Mongolia has much to offer tourists

This is the second part of Janet Landfried's series of columns on a trip to China and Mongolia.

November 9 (Redlands Daily Facts) We continued our journey from China to Mongolia on a bright morning. We were all anxious to see what awaited us there. The flight from Beijing to the capital of Mongolia in Ulaanbaatar was less than two hours.

Mongolia is a very large country with a population of less than three million. There are only three cities, with the capital being the largest and having about one-third of the country's population.

We circled low over the city. A river meandered down one side but the landscape was devoid of trees and just a few hills broke up the flatness of the land. Construction cranes were everywhere as Mongolia plays catch up with urban areas in other parts of the world. In the mix of buildings were the traditional houses of the nomads, the felt gers. Russians called them yurts.

Mongolia is reaching out to the world and welcoming tourists. Sharing my row in the airplane was a man from Northern California who was arriving with about six others to indulge in the sport of fly fishing. The draw was the taimen, a species of salmon that grows to very large size and old age. Because the fish is in a vulnerable state, not yet endangered, it would be catch and release only by the fishermen. He told me the group had gone to Chile the previous year and would probably go to New Zealand next year. There is a niche market for every traveler.

We were greeted by a young woman who would be our guide for our stay. Hishi was 28 years old and spoke very good English. She was a "city girl" but her grandmother still lived on the land in a ger. She learned English in school and spoke other languages as well. Like most guides outside the United States, she took classes and took tests to prepare her to be a licensed guide. She did her job well.

The Soviet Union swallowed Mongolia in the early 1920s and remained in power over the country until the fall of Communism. So Moscow was in control for about 70 years. Today many Mongolians speak Russian and Mongolian and usually another language, primarily English or German. The Mongolian script, which we saw in the Buddhist temple in Beijing, has been replaced with the Cyrillic alphabet. The national drink is vodka and the Russians also introduced vegetables into the diet. Driving into the city, we saw examples of Soviet-style buildings and what looked like Russian words.

On the plane from Beijing, in addition to the fishermen, there were many men in business attire. Some were coming to economic conferences, we learned later, and to conduct business for the mineral wealth that has been recently discovered. No oil, but gold and copper apparently are found in abundance here. There are direct flights from Korea, Hong Kong and Bangkok now.

On the roads we saw a variety of cars — mostly Korean (Hyundai) and Japanese (Lexus, Toyota, Honda) and some American names such as Ford and Chevrolet, but made in Asia.

Ulaanbaatar is a stop on the Trans-Siberian railway. I've been to one of the train stations in Moscow and to the train station in Vladivostok. While taking that long train ride is not on my wish list, I like to think I saw one of the links of that exotic journey. There were several train engines on display at a museum yard, some displaying the hammer and sickle or a portrait of Lenin.

Our hotel was the Bayangol, a very modern and nicely appointed hotel with all the expected amenities, including fast Internet. We then went to lunch at a nice restaurant. While we all had some apprehensions, the food we were served everywhere was good, well prepared and varied.

Meat, either beef or lamb, was served often. Potatoes, carrots and cabbage, in the form of cole slaw, were Russian introductions to the diet.

Hishi asked if we wanted to visit a school and, of course, we did. So she made a phone call and then guided us to a store where we could buy school supplies or treats for the classes we would visit. We went to an "American brands" store, small but well stocked. There they were, lining the shelf — Kirkland brand products! Costco has made it in the world. In fact we also encountered Kirkland bottled water in South Africa. We made our purchases and went off to school.

School was a Soviet-style block building set in a dirt and rock field. But inside, the classrooms were busy with learning. The teachers were all nicely dressed and the children were adorable — the girls in their starched dresses with a large white bow or flower in the hair, and the boys in white shirts with ties and blue pants. All were in their seats in bright classrooms with an engaging teacher. The 6- and 7-year-olds were a bit shy, but not the 10-year-olds in their music class. They asked questions in halting English and then sang us a song they had learned.

We responded with a verse of "You Are My Sunshine." Music is a universal language.

When one of our group asked how many had a computer, a few hands went up. But when asked if they had mobile phones, every hand went up. Twenty-first-century technology is making its way into every part of our world.

We shared our treats and said our goodbyes. This was a spontaneous stop, but we were to learn how hospitable the people are to visitors.

In the capital there are paved roads and traffic lights, with pubs, cafes, supermarkets and gas stations, hotels and karaoke bars. There were no McDonald's restaurants, but the first KFC opened three months ago. It will be interesting to see how it does, as chicken is not usually on the Mongolian diet. We went to an ATM to exchange our dollars for tugrik, one U.S. dollar for about 1,700 tugrik.

Unfortunately the natural history museum was closed for renovations and at the one museum that was open, we could see only the historical artifacts on one floor. We planned to visit it again when we returned to Ulaanbaatar in a few days. We also left for our return trip a visit to Genghis Khan Square in the center of the city, dominated by a huge statue of their revered great khan.

We rushed a bit because the school visit had taken some time and we needed to be at a cultural show on time.

As with most initial tours of a country, there will be a show somewhere that highlights the dances and songs of the country. This is a good way to introduce newcomers to some of the culture. The troupe was lively and costumed beautifully. Their dances were colorful and some reflected their Russian origins.

A unique form of singing in Mongolia is throat singing, in which the sound comes not from the formation of the mouth and air pushed through the lips but from deep within the throat. To us Westerners it did sound odd but not unpleasant.

After one night in the hotel, we got ready to leave on a four-day trip to the countryside. We left our larger suitcases and took just the necessities. We piled into our bus, decorated with purple curtains, piled our luggage in the rear, and were ready for the road. With our guide and bus driver we also had a cook and her supplies. That should have hinted to us about amenities for the trip. We were to drive about 365 kilometers that day (about 225 miles).

Oh, the traffic! Is there any city in the world where you can avoid it? We started north on pavement. The streets were wide and the traffic lights worked. But all too soon the pavement gave way and the dirt roads began. The traffic thinned out considerably.

Spread out before were the steppes of central Mongolia. There are few hills, absolutely no trees, but small shrubs and little grass. In the spring the steppes are green and lush, but we were at the end of the season. Mongolia has two seasons — the summer of July and August and maybe September and the winter of the rest of the year. We had pleasant days but the nights were cold.

Also spread out before was the blue, blue sky with few clouds. They call this place the Land of the Eternal Blue Sky and it is easy to see why. Rainfall is minimal on the steppes and the altitude and openness to the Siberian winds make for extreme weather conditions. It reminded me of Montana, Big Sky Country, but without the mountains and trees.

We bounced along the dirt roads and sometimes cut across hillocks and vales. If there was no road, the driver made one. We asked Hishi how the driver knew where to go, as there were no road signs anywhere. She said the drivers memorize the routes and landmarks much like ancient mariners on the open ocean navigated by the stars.

Everywhere we saw the five animals of the nomadic herders — horse, goat, sheep, cattle and Bactrian (two-humped) camel. We also saw yak but those are not usually on the steppes. All these herd animals belonged to someone and provide the mainstay of the family's diet and other needs.

We also saw wild animals in abundance. There were the little ground animals that scurried into their dens as we approached. Foxes were out chasing after prey. There were swans in the few streams that crossed the plains. Ravens were swooping to bide their time. Hawks were perched on rocks near the road waiting for a meal; some were so large that they must have been eagles.

We chanced upon a huge wake (the word for feeding vultures) of vultures, doing what scavengers do, cleaning up the carcass of a horse. Hishi and the driver were awed by the sight as they said you seldom see them and especially so large a group near a road. There must have 30 or 40 vultures.

We did stop for gas at one point and we were made aware that there are no restroom facilities outside of the city. Here there was a structure that looked like a four-horse stall. Each compartment had boards for one to straddle; bring your own paper, please. A sheet of plywood was fastened about three feet in front of the stalls to provide some privacy from the road.

Otherwise there were no trees, no shrubs and seldom a blade of grass along side the road, so we did what we could and remembered our best camping techniques in the wilderness. Smile and look the other way. Our ATC host said he never thought to ask about facilities at rest stops.

It was something he — or we — had never encountered.

Join me next week as we visit a family of nomads and sleep in a ger in sub-freezing temperatures.

Janet Landfried taught social studies at Redlands High School and Redlands East Valley High School for many years and retired in 2001.

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