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Monday, December 30, 2013
Headlines in Italic are ones modified by Cover Mongolia from original
TRQ closed -2.99% to US$3.25 on Friday
OT production volume will surpass that of Erdenet in 2014
December 26 (business-mongolia.com) Cabinet Press Office released a news that OT's mining volume will surpass that of Erdenet's in the coming year. Prime Minister and Erdenes OT directors jointly presented the latest update on the project. The Executive Director of Erdenes OT mentioned that OT LLC is fully obeying the contract and Mongolia laws in terms of taxation, labour and local development. Since the kick-off of the project OT mined 250 thousand tons of copper concentrate, and 70 thousand tons were exported through Gants Mod port.
This month OT LLC's 2014 budget was approved and USD1.2 billion will be spent on project investment and sales income is set to be at USD2.6 billion. The following table shows the 2013 copper concentrate. It was also mentioned that in the coming year OT will produce 690 thousand tons of copper concentrate which is 200 thousand tons more that of Erdenes. It is said that it will contain 175 thousand tons of copper and 23 tons of gold.
As end of 2013
Processed concentrate, thousand ton
Two sides have solved 9 out of 30 issues and within coming February of 2014 two sides will solve all the outstanding issues and approve the long awaited updated Feasibility study.
PRIME MINISTER AND ERDENES OT CEO BRIEF THE PRESS ON OT BOARD MEETING
December 24 (BDSec) The Prime Minister N.Altankhuyag received a report from Erdenes Oyu Tolgoi LLC CEO Da.Ganbold on the ongoing issues with Oyu Tolgoi project at the "Hours of Great Construction" meeting held Monday. The projected production volume for the year 2013 is 300 thousand tonnes of copper concentrates. As of December 18, OT has been produced 252.2 thousand tonnes of copper in concentrates , of which 70.2 thousand tonnes were delivered to Huafang bonded warehouse in Gants Mod (Ganqimaodu) border port in China, and currently 16.9 thousand tonnes were transported further and sold to end users.
OT Board meeting was held in Ulaanbaatar two weeks ago and budget was approved for 2014. Operating expenses and capital expenditure costs are estimated at US$ 1,283 million and sales revenues are estimated at US$ 1,653 million. Production guidance for 2014 is 692.3 thousand tonnes of copper concentrate, 175.6 thousand tonnes of pure copper, and 23.9 tonnes of gold.
The sides have agreed on 21 issues out of 30 so far and negotiation on the remaining 9 issues are ongoing.
Currently 2,587 Mongolians and 285 foreign experts are employed at OT. The total workers at OT including contactors are 7,743, of which 93.3% are Mongolians.
The construction of 80-km paved road from the project to the existing Energy Resources-owned paved road that goes to Chinese border has been completed.
I expect the existing issues will be clear by early February, said Da.Ganbold. In the second quarter of 2014, the new feasibility study should be approved by the Mining Council and if everything goes as expected, underground mining operation will resume in July or August.
Source: Local Newspaper "Daily News"
OT establishes collective bargaining agreement
Ulaanbaatar, December 27 /MONTSAME/ The Oyu Tolgoi LLC and Trade Union Committee of Oyu Tolgoi Mining Employees Thursday signed a collective agreement.
The document was inked by Sh.Baigalmaa, a General Manager, Regional Development & Social Performance Department of OT LLC, and by B.Erdenebayar, a head of the Trade Union Committee of OT Mining Employees.
The very first collective agreement was signed in 2011, the above one id the third. This agreement regulates some issues between OT LLC and its employees and workers.
YAK closed +3.56% to C$2.33 Friday
Mongolia Growth Group Ltd. Announces the Closing of the Sale of Mandal General Daatgal LLC
Calgary, Alberta CANADA, December 24, 2013 /FSC/ - Mongolia Growth Group Ltd. (YAK - TSX Venture), ("MGG" or "the Company") is pleased to announce the closing of the sale of Mandal General Daatgal LLC ("Mandal") by MGG to UMC Capital LLC ("UMC Capital").
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.
MGG has sold all of the issued and outstanding shares in the capital of Mandal to UMC Capital for gross proceeds of approximately 5.90 billion Mongolian Togrog (approximately Cdn$3.50 million).
As part of the sale, UMC Capital made an immediate payment to MGG of 650 million Mongolian Togrog and additional payments of approximately US$3 million will be paid in installments over the ensuing 18 month period. Subject to TSXV approval, UMC Capital and MGG agreed to increase the exercise price of UMC Capital's remaining 300,000 stock options (the "Options") from Cdn $1.64 to Cdn $1.75 and adjust the expiration date such that the Options shall expire on June 17, 2015. Finally, MGG will cancel 307,000 stock options that are currently outstanding to employees of Mandal General Daatgal LLC.
Nova: Disposal of Investment in Mongolia-Focused Nova Trans LLC
December 27 -- Nova Resources Limited (AIM: NOVA), the investment company focused on high growth opportunities in the energy, infrastructure, technology, natural resources and manufacturing sectors, primarily in Russia and Asia, today announces that it has agreed to sell its entire investment in Nova Logistics Holdings Limited, which wholly owns Nova Trans LLC, to Cairo Investments Limited for a nominal initial sum, plus deferred consideration which equates to the net profit of Nova Trans LLC during the calendar years 2014 and 2015. There was a full provision against the investment relating to Nova Mongolia Corp Pte Ltd, which wholly owns Nova Logistics Holdings Limited, in the annual accounts of Nova as at 31 December 2012.
Nova Trans LLC is focused on large volume road haulage coal transportation operations in Mongolia. As previously announced, its coal transportation contract with Transgobi LLC expired on 15 April 2013 and, to date, has not been extended.
Nova's Board of Directors has taken the decision to dispose of this investment as they believe that their time, attention and focus would be better served sourcing other investments that present strong potential for long-term, sustainable growth.
XANADU MINES: CHAIRMAN'S YEAR-END REVIEW
December 23, Xanadu Mines Limited (ASX:XAM) --
With my recent appointment as Xanadu Mines Ltd's (Xanadu) Non-executive Chairman and with the end of the year quickly approaching, it is an appropriate time to affirm the company's strategy and summarise our achievements this year.
In 2013, under the leadership of Mr George Lloyd, we have effectively positioned the company with a porphyry copper focus. We remain committed to Mongolia and are now focusing on fewer and more advanced projects. We expect to complete an exit from our coal assets early in the New Year and believe Xanadu is in a strong position to create shareholder value.
The year has been one of many achievements including:
§ appointment of a new Managing Director with a compensation package aligned to company and share price performance;
§ reduction in the size of the Board and strengthened its industry experience;
§ renegotiation of senior management contracts with stronger performance incentives;
§ reduction in licensing and administrative costs, including relocation of the head office;
§ completion of a comprehensive license and project review leading to the impairment of deferred exploration expenditure and the decision to exit coal;
§ restructured the acquisition of the Oyut Ulaan project and obtained shareholder approval to complete the transaction allowing the company to move to a 90% ownership position;
§ completed new drilling and trenching at Oyut Ulaan which intersected rich copper, gold mineralisation;
§ completed mapping and rock chip sampling at the Sharchuluut project revealing Erdenet-style copper-molybdenum porphyry mineralised outcrop; and
§ established the Mongol Metals joint venture with our Mongolian partner, Mr Ganbayar Lkhagvasuren, as a platform for growth (refer to the attached announcement of 13 December 2013).
We believe that Mongolia is re-emerging as an investment destination with recent changes in investment laws offering a more stable business environment. Mongolia is richly-endowed with mineral resources and its copper potential, in particular, is vastly under-explored. We have also observed an increase in interest from mid and large-scale mining companies in Mongolia and look at this as further confirmation of the country's potential.
There is strong alignment between the Board and senior management. Mr Lloyd and the Board recognise the importance of this alignment and look forward to advancing the company's strategy in 2014.
Daily Market Update, December 23: Top 20 -0.63%, Turnover ₮64.6 Million
December 23 (BDSec) Stock declined over the Mongolian Stock Exchange on Monday after five consecutive days of trading in the green as blue chip stocks such as APU (-1.52%), Tavantolgoi (-2.17%), Baganuur (-2.60%), and Shivee Ovoo (-3.37%) fell. On the other hand, smaller companies gained strength with Moninjbar (+14.74%), Olloo (+12.50%), and Ulaanbaatar BUK (+9.09%). MSE Top 20 index dropped 0.63% to finish at 16,631.17 points. Turnover for the day was MNT 64.6 million.
Trading Value Leaders
Darkhan Khuvun (DAH)
Ulaanbaatar BUK (BUK)
Mongol Savkhi (UYN)
Genco Tour Bureau
Daily Market Update, December 24: Top 20 -1.17%, Turnover ₮590.9 Million, BDSec Block Trade ₮575 Million
December 24 (BDSec) MSE Top 20 index dropped 1.17% to 16,435.94 points on Tuesday as nearly two stocks fell for every one that rose. Block trade of BDSec (BDS) worth of MNT 575 million (~US$ 350 thousand) was traded on the bourse. Top loser of the day was Ulaanbaatar BUK (-14.29%), followed by Aduunchuluun (-8.04%), Gutal (-6.38%), and Material Impex (-6.00%). Turnover for the day was MNT 590.9 million or US$ 363 thousand.
Trading Value Leaders
Material Impex (MIE)
Mongolia Development Resources (MDR)
Shivee Ovoo (SHV)
Ulaanbaatar BUK (BUK)
Daily Market Update, December 25: Top 20 -1.45%, Turnover ₮40.4 Million
December 25 (BDSec) Mongolian shares declined for the third consecutive days of trading, dragged by coal mining companies on MSE. The country's major thermal coal suppliers, Shivee Ovoo (-11.49%) and Baganuur (-9.63%), were the worst performers of the day, followed by Tavantolgoi (-8.05%). Ulaanbaatar BUK (BUK) and Genco Tour Bureau bounced back 5.56% and 3.45%, respectively. Turnover for the day was MNT 40.4 million.
Trading Value Leaders
Shivee Ovoo (SHV)
Ulaanbaatar BUK (BUK)
Genco Tour Bureau
Shivee Ovoo (SHV)
Daily Market Update, December 26: Top 20 -0.83%, Turnover ₮13.6 Million
December 26 (BDSec) Mongolia stocks were down for the 4th consecutive day of trading during holiday season. MSE Top 20 index declined 0.83% to 16,062.27 points. Shivee Ovoo (SHV) recovered 12.18% to close at MNT 7,000 after losing 11.49% on yesterday's trading session. Tavantolgoi (TTL) lost 5.61% to MNT 5,550, after losing 8.05% yesterday. Turnover was low at MNT 13.6 million.
Trading Value Leaders
Material Impex (MMX)
Khukh Gan (HGN)
Shivee Ovoo (SHV)
Telecom Mongolia (MCH)
State Department Store (UID)
MSE News, December 27: Top 20 +1.66%, Turnover ₮61 Million
Ulaanbaatar, December 27 /MONTSAME/ At the Stock Exchange trades held Friday, a total of 89 thousand and 216 shares of 18 JSCs were traded costing MNT 61 million 470 thousand and 288.00.
"Selenge Dulaankhaan" /76 thousand and 440 units/, "Khokh gan" /5,100 units/, "Tavantolgoi" /2,526 units/, "APU" /1,350 units/ and "Teever Darkhan" /1,150 units/ were the most actively traded in terms of trading volume, in terms of trading value--"Teever Darkhan" (MNT 28 million and 750 thousand), "Tavantolgoi" (MNT 13 million 443 thousand and 400), "Selenge Dulaankhaan" (MNT seven million and 644 thousand), "APU" (MNT five million 391 thousand and 200) and "Sharyn gol" (MNT two million 385 thousand and 400).
The total market capitalization was set at MNT one trillion 615 billion 711 million 069 thousand and 722. The Index of Top-20 JSCs was 15,795.18, decreasing by MNT 267.09 or 1.66% against the previous day.
Underwriter: BDSec JSC. Issuing shares equal to 30% of enlarged company, raising ₮130.65 billion
Prospectus: Beren Mining
Link to prospectus (in Mongolian)
FRC Frees Securities Market Participant Licenses from Expiration
December 27 (MSE) Financial regulatory commission /FRC/ revised regulated entity's share capital amount /financial capacity/ and decided to issue a license to undertake regulated activities in the securities market with no period from 2014 by its "Rules on licensing regulated entity to undertake activities in the securities market" approved by FRC resolution #506 on the 12 Dec 2013.
During last three years FRC granted a license for regulated activities to 50 companies for 3 years period and extended around 53 companies' license for another 3 years.
The FRC decision to issue a license for undertaking regulated activities in the securities market without a deadline has a significance to deliver state services expressly and with fewer burdens by monitoring and regulating their activities in the frame of Revised "Securities markets law".
FRC Suspends Brokerage Licenses of BBSS, Monkhan Trade & Tengri Securities
December 27 (MSE) Based on the provision 6.1.3 of "Law on legal status of Financial Regulatory Commission", the provision 34.1.4 of "Securities market law", provisions 8.1.2, 8.3.1 and 8.1.6 of the FRC "Regulation on licensing of professional services in the market", Financial Regulatory Commission has suspended the license for brokerage and securities dealing activities of "BBSS" LLC, "Monkhan Trade" LLC and "Tengri securities" LLC for 3 months by its resolutions #502, 503 and 504 of December 12, 2013.
Furthermore, these companies have been warned that the licenses shall be terminated if they fail to comply with the directions and requirements given by the FRC.
Please click here to view FRC resolutions
Pulling out of Mongolia was just short-term thinking, says Khan Investment's Hamilton
December 27 (CNBC) As investors chase their new-found love for developed market equities, take a moment to pity the poor fund managers who find the fickle markets giving their asset classes the cold shoulder.
"It can be pretty demoralizing," said Travis Hamilton, managing director at Khan Investment, which focuses solely on Mongolia. "I've had a number of people ask me, 'how do you get up every day and keep doing what you're doing?'"
"If you look back at 2012 or 2011, a number (of managers) were courting Mongolia. There was a huge amount of exuberance and enthusiasm. Almost all of them have packed up and left," he told CNBC.
(Read more: Will foreign investors give Mongolia another shot?)
Foreign investors abandoned one-time frontier-market darling Mongolia over the past 18 months amid a prolonged dispute between the government and private-sector partners over Rio Tinto's $6.6 billion Oyu Tolgoi mine. Foreign direct investment (FDI) fell 17 percent in 2012 and then fell a further 42 percent in the January-to-August period this year.
The government has since passed a new investment law in hopes of restoring foreign investor confidence and is negotiating with Rio Tinto to end the dispute.
Hamilton believes pulling out of Mongolia was just short-term thinking, as it may take at least 10 years to pay off. "Investors in any emerging market or frontier need to consider that," he told CNBC.
While his fund hasn't faced redemptions, "it certainly is fair to say it has been very challenging in terms of attracting new capital to the strategy," he said. "All we can do (is) keep marketing and promoting the fund," as well as keeping current investors "very informed" of developments.
His fund hasn't suffered alone. Investors have pulled around $15.58 billion out of dedicated emerging market equity funds and $14.04 billion out of emerging market bond funds so far this year, according to data from Barclays.
Others have asset classes that aren't a niche market, like Mongolia. Financial advisors may generally consider fixed income a necessary core holding as part of most investors' portfolios, but bond funds globally have seen around $15.22 billion of outflows over the past three months, according to data from Jefferies.
Fixed income managers are coping by talking down expectations.
"You have to be realistic," Cecilia Chan, HSBC's chief investment officer for fixed income in Asia, told CNBC earlier this month.
"When I talk to the customer, I try to be genuine. I'm not telling you that you will get rich buying bonds," she said, noting HSBC has around $50 billion worth of bonds under management.
As investors pulled out of emerging market bonds, Hamilton's Mongolia fund started buying, picking up Mongolian debt at around 58 cents on the dollar.
BoM MNT Rates: December 27 Close
Total outstanding 1-week bills fall by ₮17.9 billion to ₮1.38 trillion
BoM issues ₮394.1 billion 1-week bills
December 25 (Bank of Mongolia) BoM issues 1 week bills worth MNT 394.1 billion at a weighted interest rate of 10.5 percent per annum /For previous auctions click here/
BoM holds FX auction
December 26 (Bank of Mongolia) On the Foreign Exchange Auction held on December 26th, 2013 the BOM has received from local commercial banks bid and ask offer of USD and CNY. BOM has refused all offers.
On December 26th, 2013, The BOM has received USD Swap agreement bid offer of 74.5 million USD and accepted the offer.
8% Mortgage Program Update: ₮474.2 Billion Refinanced, ₮732.6 Billion Newly Issued, Total ₮1.21 Trillion
December 26 (Cover Mongolia) As of December 25, ₮474.2 billion (₮481.8 billion as of December 16) existing mortgages of 16,741 citizens (16,923 as of December 16) were refinanced at 8% out of ₮792.9 billion (₮798 billion as of December 16) worth requests. (Mogi: wait! The numbers seem to have gone down from previous report. Perhaps a few mortgages got disqualified?)
Also, ₮732.6 billion (₮694.7 billion as of December 16) new mortgages of 12,682 citizens (12,106 citizens as of December 16) were issued at new rates out of ₮789.5 billion (₮755.2 billion as of December 16) worth requests.
Link to release (in Mongolian)
Tough challenges in 2014 for Altannomics
By Jargalsaikhan Dambadarjaa
December 26 (UB Post) It is worth noting that the government, led by Prime Minister Altankhuyag, has worked hard in the passing year. Ministers have taken fewer trips abroad this year and a new norm of holding cabinet meetings every Saturday has been set. The construction of 1,800 km of paved roads was completed within an impressive timeframe, increasing the former 3,000 km of paved roads by 60 percent. This is the longest road Mongolia has managed to build in such a short period of time. It became apparent to the people that such great results can be achieved if there is more investment and no further "dealings" after ministerial decisions.
Altannomics will face some tough challenges next year. Overcoming those challenges will play a decisive role for not only the current government but also the future of Mongolia.
First challenge: Recovering exports
The priority challenges are to increase mineral export competitiveness, start the operations of Oyu Tolgoi's underground mine, and begin washing coal before exporting. It will save more time if many issues such as cost reduction and Oyu Tolgoi project financing are resolved by their own board of directors, and not by the parliament.
The reason for the decline in Mongolia's exports after China's coal imports increased is closely associated with Mongolia's competitiveness. It is impossible to achieve high competitiveness when trucks are used to transport coal. Therefore, the government will have to hold discussions with its two neighbors about building a railroad to create a transit route.
The key to overcoming this challenge is the railway track gauge. Balanced, stable relations between Mongolia, China and Russia can be made if a rail connection is built, and Mongolia will be able to provide transportation services to both neighbors. It is a win-win situation for everyone, if the two neighbors choose to invest in this project.
Second challenge: Keeping the budget deficit under two percent of GDP
In terms of capital and revenue, it has actually been a luxurious year for the government. Despite the formal budget passed by the parliament, our government had another "budget" acquired through the provision of loan guarantees and the issuance of bonds. The formal budget has been managed by the entire cabinet while the other one has been handled by a single cabinet member. A reality check needs to be done for that cabinet member who is under the impression that he possesses a "divine power" after putting the nation in substantial debt. Also, the projects that are currently being handled by the Development Bank need to be included in the public budget spenditure. A country has to have a single budget, and revenue and expenditure must be transparent. The Fiscal Stability Law states that the budget deficit must not exceed two percent of the GDP. The government must abide by this law. If the law is breached, the government has to be held accountable.
Third challenge: Keeping public debt under 40 percent of GDP
Mongolia will pay a coupon payment of 70 million USD each year for the Chinggis Bond until the principal, 500 million USD, is repaid in 2017. On top of this, having been granted permission by the parliament to issue bonds worth up to five billion USD, the government is currently marketing its Samurai Bonds worth 290 million USD (30 billion JPY). Two years ago, the government provided a loan guarantee for 580 million USD to the Development Bank. When all these debts are taken into account, our external debt has reached almost half of our GDP. A prognosis by the International Monetary Fund (IMF) said that Mongolia's economy will experience single-digit growth and the inflation rate will increase by a two-digit number.
The next government will not be able to make the payments for the 500 million USD bond in 2017. Therefore, the current government must immediately start creating an accumulation fund. One way to create this accumulation is to carry out a planned privatization of state-owned companies.
As Mongolia's economic growth and budget revenue drops, there is a need to combine the many existing government funds into one and establish a sovereign wealth fund. This fund must be managed by an expert team elected by the fund's board and be independent of the government.
In order to spend the budget efficiently, social investments should be made effectively, and social care and subsidies should only be provided to those who truly need them. People who are extremely poor or have disabilities ought to be provided with a payment card with designated uses. The middle class must be provided with stable jobs rather than cash handouts. Jobs are only produced by the private sector as a result of free competition.
Fourth challenge: Creating a good business environment
A good business environment means good availability of infrastructure and non-bureaucratic public services. However, in the current conditions, businesses are negatively influenced by a lack of low-interest loans, high inflation and abrupt fluctuation of the MNT to USD exchange rate. Another difficulty is that there is a lack of skilled workers and people who are willing to do hard labor.
The IMF warned that the price stabilization measures implemented by the Central Bank of Mongolia, in collaboration with the government, have a risk of increasing inflation rates in the long term. On the other hand, the IMF said that a good, flexible policy for MNT and USD exchange rates is being implemented that lets the market determine the rates. When USD rates rise, it has a positive effect on the sales of commodities produced in the country.
Businesses in Mongolia currently acquire loans from commercial banks in USD and repay them with MNT. Therefore, these businesses are particularly vulnerable to unstable exchange rates and inflation. Furthermore, they have suffered from the pressure exerted by the department of taxation, which in turn is frustrated by the interruptions in budget revenue. Foreign investment, which is essential to development, only goes to countries with a stable business environment that has clear rules and laws.
Fifth challenge: Reforming the government
The socio-economic development of Mongolia will start slowing down significantly unless we manage to shift from a big government to a smart government. The livelihood of the next generation of Mongolia will depend on whether this timely initiative, put on the table by President Elbegdorj, can be implemented in time.
This reform to transform a big government into a smart government will greatly influence the fate of not only the current government but also of all Mongolians. Mongolia must rid itself of corruption within the government and put an end to this disastrous situation where only a few people prosper while the rest fall into poverty. Otherwise, the existence of democracy and a free market economy will be at risk.
If this reform is not felt by ordinary people through improvement in their lives, they will lose faith in the government and grow intolerant of their actions. Expressions of strong disapprovals will be made, especially at a time like this, when there is unfair distribution of natural resource revenue while commodity prices rise, and salaries and pensions are not enough to sustain living costs.
Our lives and our future will depend on whether the government, led by N.Altankhuyag, does everything it can in order to overcome each of these challenges.
Translated by B.AMAR
Second Christmas Without Families For Executives In Mongolia
By Jon Springer
December 25 (Forbes Asia) One American and two Philippine former executives of SouthGobi Resources, a coal mining company, remain under exits bans of 14, 18 and 18 months respectively. They are unable to leave Mongolia to see their families for Christmas for the second year in a row.
The government of Mongolia legislated this year to be welcoming to foreign investors after events during 2012, a national election year, created a sense of instability among foreign investors. A new Foreign Investment Law went into effect on November 1, 2013 and a new Securities Market Law will take effect January 1, 2014. Both laws target making Mongolia open, friendly and stable to foreign investors. However, the nation's use of exit bans is among issues that still leave foreign investors concerned.
American Justin Kapla, and Philippine citizens Hilarion Cajucom Jr. and Cristobal David have lived under exit bans since mid-2012. They have been refused the right to travel outside of Mongolia during investigations into their former employer, SouthGobi Resources, a coal mining subsidiary of Turquoise Hill Resources and Rio Tinto.
The U.S. Embassy in Ulaanbaatar, Mongolia, 2013 Mongolia Investment Climate Statement states:
Regularly reported since 2010, Mongolian public and private entities continue to abuse the exit visa system… Neither current law nor regulation establishes a clear process or time-table for settlement of such issues… the Mongolian government maintains the right to detain foreign citizens indefinitely without appeal…
New Zealand's Chris Bradley, an employee of Standard Bank, had an exit ban from Mongolia this year concluded in less than one month. Australia's Sarah Armstrong, as legal counsel to SouthGobi Resources, had her exit ban stemming from the same investigations as Messrs. Cajucom, David and Kapla, concluded in time for Christmas 2012.
Ambassador Erlinda F. Basilio of the Philippines Embassy in China sent a letter to the Minister of Foreign Affairs for Mongolia Lusanvandan Bold on November 29, 2013, saying: "It is my fervent hope that the investigation can be concluded so that Mr. Cajucom and Mr. David will be permitted to return to the Philippines this coming Christmas season."
Mr. Cajucom was Finance Manager for SouthGobi from June 2011 until June 2012 and is currently unemployed. His sister Corazon Cabungcal is upset Mr. Cajucom cannot join his family this Christmas, "We don't know why he can't come home." The family is having a reunion at Christmas for the first time in 30 years with "almost 100" family members. Mr. Cajucom's and Ms. Cabungcal's mother does not understand why her son does not visit according to Ms. Cabungcal. Their mother had triple by-pass surgery in 2010 and is in fragile health. Mr. Cajucom was denied permission to leave the country to attend the funeral of his father-in-law during his ongoing 18-month exit ban.
Mr. David has lived in Mongolia since January 2004. He first worked as Finance Director for Boroo Gold, a subsidiary of Centerra Gold Canada. He then worked for SouthGobi from August 2007 until September 2011. Now working at another coal mining company in Mongolia, he has been unable to travel outside of Mongolia during his ongoing 18-month exit ban even for emergency situations. Mr. David's daughter, Maria Clarissa Joy V. David, indicates Mr. David's absence has "been challenging for the whole family… dad always comes home for special events, Christmas, New Year's, birthday celebrations." She adds that the government of Mongolia denied Mr. David permission to leave in 2012 to help his parents when a typhoon struck their province of Tarlac. Another typhoon struck their province this year and Mr. David's daughter says it is stressful both for Mr. David and his family that he is unable to come home in both times of need and in times of celebration. "We are just praying that nothing major happens that would really devastate him if he could not come home."
Mr. Kapla, formerly President of SouthGobi Resources, now works for an iron ore company in Mongolia. During his ongoing 14-month exit ban, Mr. Kapla has not been able to visit his stepfather John Kostanshek despite a September 2013 letter from Mr. Kostanshek's cardiologist indicating fragile health. Mr. Kapla's mother, Mrs. Suzanne Kostanshek, said the family has received U.S. government support noting Minnesota Congresswoman Michele Bachmann's office has been "most helpful" and the U.S. Embassy in Mongolia "has been really good." She has not seen her grandchildren, ages 12 and 3, in a year and a half. "We wish Justin and his family could be home… we just want him to come home."
The family's three congressional representatives in Minnesota concur with this sentiment.
"Senator Franken and his staff have been working diligently on this case since first being contacted by Justin Kapla's mother, Sue Kostanshek, last year," said United States Senator Al Franken's spokeswoman Alexandra Fetissoff.
Senator Franken's office has been in constant communication with the State Department and has continually updated Mrs. Kostanshek with any new information they receive. Knowing how important family is, especially at this time of year, Senator Franken is sincerely sorry that Mr. Kapla will not be home for the holidays and will continue his efforts to resolve this unfortunate situation.
Senator Amy Klobuchar, also representing Mr. Kapla's native Minnesota, said, "My office has been in close contact with the family as well as the Embassy in Mongolia. Mr. Kapla deserves to have this resolved as quickly as possible, and my office will continue to work with the family and diplomatic officials to move this case forward."
Dan Kotman, spokesman for Congresswoman Michele Bachmann agrees, "Congresswoman Bachmann's office has been in regular communication with the U.S. Embassy in Mongolia and we are actively seeking a lift of the travel ban for our constituent, Justin Kapla. Mr. Kapla has been denied the ability to leave Mongolia for the past 14 months and we are doing everything we can to help him and his family."
(June 2013 proposal by the Economic Crimes Investigation division of Mongolia's State Investigative Bureau.)
In June of this year, the Economic Crimes Investigation division of the State Investigative Bureau of Mongolia (the local FBI equivalent), sent a proposal to the General Prosecutor's Office of Mongolia stating evidence was lacking in the case against SouthGobi Resources, Messrs. Cajucom, David and Kapla. Government reaction to this document is unknown.
SouthGobi Resources spokesman Mr. Altanbagana said:
SouthGobi has been fully and proactively cooperating with Mongolian authorities to resolve this case in accordance with Mongolian law. After nearly two years of investigations, neither the company nor any employee, have been charged with any offenses. SouthGobi hopes Mongolian authorities will be able to resolve this case soon. SouthGobi continues to believe Mongolia can be a safe and profitable destination for foreign investments.
The Mongolian Ministry of Foreign Affairs, Ministry of Justice and General Prosecutor's Office were contacted about this story. The Ministry of Justice acknowledged the letter from Ambassador Basilio and said regarding the SouthGobi case, "it's still under investigation." The Ministry of Justice referred case specific questions to the General Prosecutor's Office who did not respond after contact via phone and e-mail.
76 Columbuses from the Banana Republic of Mongolia
December 22 (UB Post) The time has come for us to be straightforward and call the things that have names by their names, just like livestock are given different names based on their looks. In a country where lawmakers put their personal interests above the job they are supposed to do, all profits from economic activities are only shared by small groups of individuals, whereas ordinary people are given the burden of repaying debts that are not theirs.
Such a state might look democratic from the outside, but its government has already become a tool operated by a few individuals who use the name of their political party to get wealthy and improve their own livelihood. As a result, ordinary people are never able to improve their living standards, no matter how hard they work. People eventually see their life go past them while they keep losing faith in their government after every election. The basic requirement for the development of Mongolia is a government without corruption, rather than the prices in the mineral market. The process of creating a corruption-free government has lately been given the name "towards a smart government." However, a smart government must start with a transparent political party.
In the beginning of the 20th century, the American writer O. Henry first used the term "Banana Republic" to describe certain Latin countries whose economy was mainly dependent on a single product: bananas. The governments of those countries became fully influenced by the banana business and served those interests only.
The U.S banana market was controlled by a single company that eventually dominated the markets of Latin American countries, where there was cheaper transportation and labor costs and a favorable climate to grow bananas. The monopoly bribed the high-ranking government officials of those less developed countries to make favorable decisions that kept their costs low. The politicians of those countries put their own interests before the interests of their citizens.
Mongolian political parties that have obtained ruling power by winning elections never reveal how their campaign expenditures have been funded. Wealthy people who have never been members of winning political parties can buy high ranking positions, as long as they make big enough donations to winning political parties. How can you explain the fact that no one, either the political party or the public, raises this issue for discussion? These individuals conspire to issue land permits and mining licenses illegally to obtain huge amounts of money from both national and foreign parties. Afterwards, they use a part of the huge sum to make donations to a political party in return for their protection. Who is going to put an end to this trend?
A country where there is a corrupt government is called a banana republic regardless of whether they actually grow bananas or not. What other name would be more suitable to a state that is afraid of talking about reality and keeps the press quiet by paying them and establishing secret agreements?
Lawmakers of a banana republic excuse themselves from abiding by the law. A private sector employee will be fired straightaway if he skips work days, constantly comes in late for work or disappears for days without letting anyone know where he is and what he is doing. However, it is a completely different case if you are a Member of Parliament in Mongolia.
Almost every newspaper has reported that Members of Parliament participate most actively in issues regarding their self interests, such as budget allocation and appointments.. When other topics for discussion are on the table, they don't bother attending the assembly, ignore their primary responsibilities and travel abroad, sparing only the tiniest amount of time to visiting the electoral district they represent.
SEVENTY SIX COLUMBUS'
Lately, Mongolians are having a hard time understanding what the job of a Member of Parliament is. How could we, ordinary citizens, understand what their job is when the Members of Parliament themselves do not get it? What happened in the last few days proves it. The Members of Parliament stopped going to assemblies because they can no longer understand what their job requires of them.
Parliament sessions, standing committee meetings and working group meetings have constantly been postponed due to an insufficient number of members in attendance to reach a quorum. As a result, the decision-making processes have been greatly slowed and parliament has become unable to function. Having moved out of his depth due to the increasing disappearance of Members of Parliament, the Speaker has taken disciplinary action by recording attendance with fingerprint scanners and requiring the MPs to speak in the order of their fingerprint scanning. He intends to stop the usual practice of those who leave their ID card with their neighbor and having their attendance recorded by and votes cast in absentia. It is really amusing that they can even "Mongolianize" parliamentary sessions.
We attribute Christopher Columbus' name to people who have no idea about where they have gone, where they arrived, and where they were afterwards. Poor Columbus got lost on his voyage to India and ended up discovering a new continent without realizing it. Mongolian Columbus' do not know why they go to work, what they are doing there, and what they have done when they return home in the evening.
Their line of work has the name "legislative branch" written all over it. However, our Columbus' go to an entirely different place called the "executive branch". They also tend to freely choose any of the two as their first destination; so many other people sit there waiting in one place, when they are in the other. The difference between the Parliament of Mongolia and the Government of Mongolia only exists on paper. Our country today has 16 ministries and 19 ministers who are all members of parliament except two. One member of parliament is "doing" two jobs at the same time, although each of the jobs require more work than one person can properly handle.
On some rare occasions, our Members of Parliament show their faces to the people and manage to sit through an afternoon long enough to raise their hands and pass some laws. However, the laws they come up with have lives of a few months and most of them tend to interrupt normal business operations, hold the private sector back and disrupt free competition, which is supposed to be the basis of a market economy. It is embarrassing to kick the foreign investors out, then chase after them and beg them to come back with fake smiles on our faces. This is the quality of the laws the MPs make, and their most important job is making laws.
In this country, there is no mechanism whatsoever that holds these Columbus' accountable when they do not show up for work, or fail to do their job when they do show up. This institution that bears the name of "parliament" is currently formed by a few empty palaces with fancy designs, and some disgruntled employees at the Secretariat.
As the overall capabilities of our ministers and MPs are weak, we must prepare them and grow their capabilities before having them make laws. International organizations send officials abroad to help them gain more experience. The World Bank and Asian Development Bank are lobbyists who are notably good at it.
Most of the Columbus' hardly file any reports for those experience-gaining trips. For them, it is nothing more than a good tourism episode. It has been written in the press that after having international organizations pay for their expenses, some MPs (with their names and positions explicitly stated) went shopping when they were supposed to be attending meetings as representatives of the government.
WHAT TO DO NOW?
A decision to ban officials, except for the Prime Minister, from serving as a minister and a Member of Parliament at the same time is expected to be made shortly, giving us some faith that governance can be cleansed. Furthermore, if financial reports including revenues and expenditures are produced by political parties every year, they will stop trading positions and power. The citizens of Mongolia demand to suspend political parties from elections if they fail to produce a financial report and refuse to have an independent audit done.
The next step should be having our Members of Parliament write reports on their international visits, including where they went, who they met and what they talked about, and publish the information on the parliament's website as well as their personal websites. This is an ordinary task of Members of Parliament in countries where democracy flourishes. Although there exists a National Security Council recommendation for Members of Parliaments to write reports, there is almost no Columbus who accepts the recommendation. Even the real Columbus sent a letter to King Ferdinand of Spain in 1493 to report his discoveries, even though he was mistaken in thinking he reached the Indies.
We, the citizens, have the right to know whether our wealthy Members of Parliament are managing interest rate risks by purchasing assets abroad, or taking care of their health by escaping the smog of the capital. It is only right to know what those people who represent us are spending our money on: Who they are meeting with and what they are doing?
Columbus', you need to leave your hideouts and do your job.
Translated by B.AMAR
My Sources on Developments in Mongolia
By Julian Dierkes
December 27 (Mongolia Focus) I am sometimes asked how I keep up with developments in Mongolia from afar. I take that question as a compliment on the quality of the analysis we provide.
Twitter has become an invaluable tool for keeping up with Mongolia, especially because many Mongolian politicians and commentators are not only active on social media, but are less guarded in their comments than politicians in Canada, for example. I thus follow a number of prominent individuals and try to scan their tweets regularly. When a specific term/policy comes up repeatedly, I try to find out what this discussion is about to understand what role it might play.
My "Secret Weapon": B Erdenegarid
But, there are sources beyond social media, of course. One of my "secret weapons" is B Erdenegarid. Mr. Erdenegarid provides a daily summary of articles in the Mongolian press to subscribers in German. His meticulousness and good selection of articles and coverage make this invaluable for knowing what topics and views are showing up in the Mongolian print media.
I can't recommend his press summary more highly. Mr. Erdenegarid can be reached at firstname.lastname@example.org for subscription inquiries.
Because I rely on his work, I have been meaning to interview him for some time.
Baatar Erdenegarid has been involved in Mongolian trade relations and especially in its relationship with the Germanies since his student days at the Hochschule für Ökonomie (Berlin-Karlshorst) in the early 1960s. Following the completion of his studies (Diplom-Volkswirt Fachrichtung Außenhandel) he held several positions in the Mongolian state's export business, Mongolexport from 1965 to 1988, eventually rising to deputy chairman (Stellvertretender Vorsitzender). From 1988-1992 he served as the economic counselor at the Mongolian embassy in Belgrade. Since 1992, Mr. Erdenegarid advises numerous private enterprises in Mongolia and abroad focusing on investments and projects in different industries.
Below are his responses to some questions we exchanged by email.
Interview with Erdenegarid
You have been observing Mongolian-German relations for 50 years. Can you divide this period into specific periods. Surely, 1990 was the most significant watershed, but were there other significant divides?
The German Democratic Republic (East Germany) and Mongolia initiated diplomatic relations on April 13 1950. Even though the Soviet Union supported Mongolia economically, it also pursued highly egoistical policies. Just across the Soviet-Mongolian border six large slaughterhouses were built. The Mongolian government started construction of a meat processing facility in Ulaanbaatar with East German financial and technical help in the middle of the 1950s. This slaughterhouse started operations in 1961. With Bulgarian support a further slaughterhouse was build in Darkhan as well as one in Choibalsan supported by Hungarian aid.
These facilities drastically reduced the export of cattle. Instead of live animals, Mongolia was now able to export meat products and to retain skins, pelts, and innards for further processing. This lead to the construction of a leather industry in the 1960s and 70s. Mongolia thus became a significant exporter of leather, and of leather and sheepskin clothing.
A large carpet factory was set up at the same time and carpets became an export item instead of sheep's wool. Further carpet factories were set up later in Erdenet and Choibalsan. The gold deposit at Boroo was discovered by German geologists. Gold was produced here and the proceeds were split between Mongolia and the GDR.
From Spring 1965 on Mongolian furs were sold for hard currency in Leipzig and at international fur auctions. This hard currency was desperately needed for the Mongolian economy.
The Federal Republic of Germany took over the GDR embassy and some of the employees. Humboldt University offered Mongolian Studies and continues to do so. This provided Germany with a sufficient number of experts with good knowledge of the Mongolian language and milieu.
Around 30,000 Mongolians were educated at universities, technical and professional schools in East Germany. German was the second-most spoken foreign language after Russian in Mongolia.
As a specialist on Mongolia's trade you have a good sense of developments of this business over the past ten years. What are particularly interesting developments?
Export opportunities have not been explored to their possible extent. Objective reasons for this are geographic isolation and the relative proximity of the giant Chinese market that sucks everything up.
The extraction of Mongolian natural resources has been financed in past years by aggressive foreign FDI and will be so in the future. With the exception of the economic crisis year of 2009, FDI into Mongolia and the percentage of GDP these represent have been increasing steadily on an annual basis.
The foreign investment law has recently been revised and this might spur more investment again.
At the end of the first half of 2013, overall foreign investments to Mongolia added up to US$17.8 billion.
What role could sea-buckthorn play in Mongolia's exports?
The Mongolian government is currently pursuing a national program for sea-buckthorn cultivation. Sea-buckthorn products will be exported in significant quantities in coming years.
For your coverage of Mongolia media, you follow the press very closely. Here are a couple of questions about Mongolian print media. What do you see as a particular strength of the Mongolian press?
There are several newspapers, TV stations, and press agencies that are owned by journalists.
By contrast, where are the press' weaknesses?
Some mass media are owned by politicians and wealthy businessmen who abuse these outlets to attempt to influence public opinion.
What about the state of economic reporting?
Reporting of economic and business is sufficient.
How good is reporting about developments abroad?
Many Mongolians are fluent in foreign languages and can thus obtain information directly. Bloomberg TV is now reporting whole day and night in Mongolian and English about economic developments around the world.
Many TV stations are now clearly identified with a specific politician/political party. Has this tendency increased among print media as well?
Citizens can elect what to read, listen to and watch. Most mass media have a steady readership.
Do you ever get an itch to write as a journalist yourself when you spend so much time in translating others' writing?
I follow the maxim: cobbler stay with your lasts. [German proverb to mean that one should do what one knows best how to do.]
What will be the most interesting development in Mongolia in 2014.
I am optimistic about the short-term future. Experts are expecting foreign investments of around US$25billion in the coming 5 years. This is quite significant relative to the US$18billion that have been invested so far. The prioritization of manufacturing and processing industries would be very important.
Standard Bank Consultant Leaves Mongolia After Detention
By Michael Kohn and James Paton
Dec. 23 (Bloomberg) -- A Standard Bank Group Ltd. consultant who was detained in Mongolia amid a dispute with a local company over a debt repayment said he left the country and arrived in his native New Zealand.
Chris Bradley departed Mongolia on Dec. 19, he said today by phone from Auckland. Bradley was part of a five-person team from Africa's biggest lender that visited Ulaanbaatar last month to seek talks with the government over $131 million in loans to Just Group LLC, a holding company, two people familiar with the matter said earlier this month. The people asked not to be named because they weren't authorized to speak publicly.
Standard Bank is cooperating with the Mongolian authorities and "believes it is inappropriate to comment any further," Kate Johns, a spokeswoman for the bank, said today by e-mail. Ross Linstrom, a spokesman for the bank, confirmed on Dec. 4 that Bradley hadn't been allowed to leave Mongolia and said Standard Bank was cooperating with the Mongolian authorities.
Standard Bank alleges the loans are in default and filed a lawsuit in July in a London court seeking repayment.
Standard's loans were made between 2007 and 2010 to Just Group to fund raw materials supplies and debt repayments at state-controlled Erdenet Mining Corp. and Ulaanbaatar Railways, according to a document obtained by Bloomberg News.
Bradley said by phone on Dec. 2 that he had been due to depart Mongolia on Nov. 29, but was "restricted by the authorities from leaving." Bradley said he was advised of his situation by local police and that he was a suspect in an investigation. Tugsbayar Nasankhuu, a captain in the National Police Agency's Press and Information Division, declined to comment on Dec. 4.
Bradley, a native of Hokitika, New Zealand, said this month he worked as an employee of Standard Bank from 1999 to 2001, and has consulted on a contract basis for the bank over the last nine years, including five visits to Mongolia since May.
Kiwi banker home after Mongolia detention – 3 News, December 25
Kiwi freed from house arrest in Mongolia – The New Zealand Herald, December 23
Mongolia's financial regulator FRC sets NBFI's 3-year license terms to unlimited
December 23 (FRC) --
Link to release (in Mongolian)
FRC & SPC sign MOU to improve corporate governance of SOEs to improve profitability
December 23 (FRC) --
Link to release (in Mongolian)
Application deadline for companies to return back purchased Erdenes TT shares December 31
December 23 (Mongolian Tax Authority) --
Mott MacDonald appointed on Hilton hotel development in Ulaanbaatar, Mongolia
December 9 (Mott MacDonald) Mott MacDonald has been appointed by Star Estates as building services and cost consultant on the development of a 5 star Hilton hotel in Ulaanbaatar, Mongolia.
The 280 room hotel covers approximately 26,000 sq m over 12 levels. Facilities will include a pool, spa, sauna, health centre and ballroom below ground, along with retail, bars, restaurants and meeting rooms above ground. A skybar and executive lounge at roof level are also included in the design.
Mott MacDonald will provide mechanical, electrical and public health engineering and cost consultancy services. The consultancy will also assist with procurement, cost management and quantity surveying throughout the project's lifespan.
Paul Jenkins, Mott MacDonald's project director, said: "This is a very challenging project due to the climate of Ulaanbaatar, which suffers extremely harsh winters and temperatures as low as -40°C at night. Many systems, such as cooling plants, require special heating and protection to avoid freezing of the system. For this project, two heating systems are included in the design to ensure service during the winter months."
The project is due to be completed by the middle of 2015.
100MW Telmen Power Plant construction to commence soon in Zavkhan
Ulaanbaatar, December 27 /MONTSAME/ The contractors of a soon-to-come Telmen thermal power plant Friday signed last pact of a series of six.
General Director of the New Asia Group L.Turbaya and Vice-President of the Soumber Metal Holding (Asia) Zhang Fei signed on the pact to build a 100MW Thermal Power Plant at the territory of Telmen soum of Zavkhan province, which is signed previously in 2011 between the State Property Committee and the New Asia Group.
This Power Plant Project will greatly contribute in remote isolated area of Mongolia that is always been in shortage of electric power. The project to build a thermal power plant based on Mogoin gol coal mine was reflected at the country's policy documents like "The Program on Integrated Energy System of Mongolia" and the "Millennuim Development Goal" based National Development Strategy of Mongolia.
The Government of Mongolia that is elected by a Parliamentary Election 2012 consistently supports the project to build the Telmen Power plant which will supply the produced electricity to customers of Zavkhan and Govi-Altai provinces, further to the central region. Such support creates broad opportunity to strengthen investment and construction work of the proposed Power Plant. It is no doubt that in recent years life standard of disadvantaged people, who are living without electricity, will be changed. Access to electricity is a key stepping stone in development of rural communities.
The construction work of the Power plant will be commenced next year spring and expected to be commissioned in 18 months.
Small Japanese firms find big business opportunities in Mongolia
SHISUI, Chiba Prefecture, December 24 (The Asahi Shimbun) Sake brewer Iinuma Honke Corp. is daring to try to change the drinking habits in the vodka-loving nation of Mongolia, pitching its mainstay Kinoene brand, which boasts a fragrant, dry flavor.
It's a taste they hope catches on in Mongolia, where sake, which has a lower alcohol content, is gaining converts amid a growing health awareness in the country, particularly among upwardly mobile people.
"A business opportunity lies precisely where major companies never go and sell their products," said Kiichiro Iinuma, the 62-year-old president of the brewery in this town located not far from Narita Airport, which started exports to a Japanese restaurant in a high-end hotel in Ulan Bator in May.
Iinuma Honke is just one of a number of small and midsize Japanese companies that are expanding operations into Mongolia, where economic growth has turned nomads into urban dwellers and has spawned business opportunities in the food and housing sectors.
Those ventures are hoping to get the jump on Russia and China, which have strong ties to Mongolia, and make a name for themselves in the Central Asian nation, which has gained an impressive reputation in Japan as a major supplier of talented sumo wrestlers.
Traditional Mongolian fare centers on meat, but more Mongolians have taken to eating vegetables as well amid a growing health consciousness. With a climate too chilly for farming, the country has relied on China for vegetables, but imports from China are not exempt from concerns about food safety, such as the use of agrochemicals.
That's where Mirai Inc., a venture capital company based in Tokyo's Chiyoda Ward, fits right in. Mirai manufactures and sells "plant factory" equipment for growing vegetables indoors under artificial light.
The company clinched contracts to sell two 500-square-meter plant factories to a restaurant chain in Mongolia last spring. It was the first overseas export for Mirai, which has only about 30 regular employees. It has also received inquiries from firms in China and Russia.
"We hope to sign contracts with them by the end of the year," said Shigeharu Shimamura, the 42-year-old Mirai president.
Mongolia is enjoying strong economic growth on the back of mining resource exports. Nearly half of the country's population is clustered in or around Ulan Bator, the nation's capital.
International Monetary Fund statistics show its real gross domestic product growth rate earned the world's top place in 2011, and was the third highest in 2012. Another strong growth rate of 11 percent is expected for this year.
Perhaps the best-known Mongolian form of housing is the yurt, a collapsible tent used by nomads. But economic development is turning nomads into permanent urban dwellers.
One estimate says 60 percent of the Ulan Bator residents previously lived in yurts. Construction of apartment buildings is thriving on the back of government incentives.
Takagumi, a construction firm in Asahikawa, Hokkaido, drew on its familiarity with cold winters to expand into Mongolia to sell housing that is adapted to chilly terrains.
"Asahikawa and its surroundings have a market of only up to 500,000 people," said Kikuo Taka, the 50-year-old Takagumi president. "The Mongolian market is bigger and is therefore attractive."
The company is hoping to tie up with a Mongolian construction firm to win more orders.
Other Japanese businesses setting up shop in Mongolia include a conveyor-belt sushi restaurant, a Japanese-style pub and a ramen noodle shop, but large Japanese companies are underrepresented. They are, in fact, less interested in the Central Asian country.
"China is our top priority," an official of a major distributor said.
"There are many other countries to venture into," said an official with a major food maker.
Kenji Shimizu, deputy head of the China and North Asia Division in the Japan External Trade Organization, said big businesses lack enthusiasm for a good reason.
"Mongolia has a small population, only as big as mid-size cities in Japan," Shimizu said.
But the factor discouraging major companies from active engagement with Mongolia is precisely a compelling reason for engagement by small and midsize enterprises. Mongolia's market size is just perfect for them, and the fact that the market is centered around Ulan Bator enables efficient operations.
Kenji Kurahara, a vice president of Global Development & Management Consultants Inc., echoed that optimism.
"The Mongolians like Japan because of the sumo connection," said Kurahara, who is well-versed in Mongolian affairs. "Human resources can easily be found there, because many young Mongolians like the idea of working for a Japanese company. That's a business opportunity for small and midsize Japanese enterprises with technological excellence."
Invest Mongolia Tokyo: Post Conference Report & Presentations
(Frontier Securities) --
Post Conference Report
10:00 Mongolian Economy by Yuko Kinoshita, Deputy Head of Office (OAP) and Representative of Mongolia, International Monetary Fund
10:20 Global Outlook for Mongolia's Key Commodities by John Johnson, CEO, Adam Wang, Consultant, CRU Group
11:00 Legal Developments and Suggestions to Facilitate Investment, Michael Aldrich, Chris Melville, Nominchimeg Odsuren and Ariungoo Khurelbaatar, Hogan Lovells Ulaanbaatar
13:00 Investment Opportunities of Mongolia related Securities by Masa Igata, CEO, Frontier LLC
13:10 Opportunities and risks for Japanese corporations to do business in Mongolia by Masami Tazaki, Executive Director, STR Partners
13:20 Growth of Mongolian Middle Class: Opportunities in Non-Mining Sectors by Tuyen D. Nguyen, Resident Representative, International Finance Corporation (IFC)
13:50 Mongolia's Banking System: Cyclical and Structural Challenges Pose Downside Risks by Graeme Knowd, Associate Managing Director, Moody's Investor Services
14:20 Opportunities to be listed at TSE by Hidetoshi Nagata, Head of Global listings, Tokyo Stock Exchange
14:30 Panel: Opportunities of companies in Mongolia to finance through Depository Receipt
14:50 Delivering major infrastructure projects in Mongolia – a view from the inside by Craig Brook, Senior Associate, Hogan Lovells Singapore
15:00 International Principles and Local Legal Issues: Infrastructure Projects and Mongolian Law by Anthony Raven, Hogan Lovells Tokyo
15:50 JICA's Work in Rapidly Changing Mongolia by Mutsumi Sato, Head of East Asia Division, JICA
16:00 Support for Developing Administrative Infrastructure of Financial and Capital Markets in Mongolia by Hidenori Mitsui, Vice Commissioner for Policy Coordination, Financial Service Agency Japan
16:10 Potential Cooperation with Japan in Mining Sector by Enkhbayar Nemekhbayar, Head of Economy, Finance and Investment Division, Ministry of Mining
16:30 Panel: Real Estate Investment by Kaoru Haraguchi, Founding Attorney, Haraguchi International Law Office
First domestic plant opens in Orkhon to produce air filter masks
Ulaanbaatar, December 27 /MONTSAME/ The first ever in Mongolia factory of air filter mask production opened in Orkhon province on Wednesday.
By exploiting China-made hi tech, a domestic "Munkhiin tsagaan jim" company has started producing the masks. The masks are made of cotton, do not trigger an allergy, filter 95 percent of air and meet an M3 international standard and so on.
A full capacity of the factory is to produce five-ten thousand masks a day. To become a final product, one mask passes ten cycles.
The factory has been employing 15 people so far.
U.S. Embassy: Year in Review: 2013 Highlights
2013 was a great year for United States – Mongolia relations.
December 27 (US Embassy, Ulaanbaatar) The United States and Mongolia share many common values, and there are many programs and projects that the U.S. Embassy works closely with Mongolian partners to implement in areas such as economic development, civil society, the empowerment of women and youth, and fostering a greater inclusion of people with disabilities.
MCA-Mongolia, established by the Government of Mongolia to implement the $285 million grant program funded by Millennium Challenge Corporation (MCC), celebrated the successful end of the five-year Compact on September 9, 2013.
On April 27-29, 2013, Mongolia hosted a very successful seventh Ministerial Conference of the Community of Democracies. The U.S. Delegation, headed by Deputy Secretary of State William J. Burns, joined representatives from approximately 110 countries including heads of government, foreign ministers, parliamentarians, civil society leaders, and Nobel laureates Aung San Suu Kyi and Tawakkol Karman.
In 2013, the illegally exported skeleton of a Tyrannosaurus Baatar was returned to Mongolia.
On May 5-10, 2013 the Arts Envoys Alito Alessi and Karen Daly from DanceAbility International successfully completed two sets of 3-day workshops in Mongolia. DanceAbility creates art that integrates both abled and disabled dancers.
On June 131, 2013 New York City Ballet dancers arrived in Mongolia to teach master classes with students and artists from Mongolian Music & Dance College and University of Arts & Culture; and to perform at the Ulaanbaatar State Academic Ballet and Opera Theater.
On June 20, 2013 Mongolia's first commercial wind powered 50 MW electricity generation facility began operating at Salkhit in Sergelen soum, Tuv Province. MCA-Mongolia's Energy and Environment Project contributed to developing this use of wind energy, which operates using technology from American company GE.
One of the world's largest training exercises focused on peacekeeping operations, Exercise Khaan Quest was held successfully August 3-13, 2013.
On August 24, 2013 American Senator's John McCain and Sheldon Whitehouse visited Mongolia and met with President Elbegdorj Ts., Minister of Defense D. Bat-Erdene, and other senior government officials.
On September 24, 2013 the "Agreement on Transparency in Matters Related to International Trade and Investment," designed to stimulate investment and trade between our two countries was signed between Mongolia and the United States.
On September 27, 2013 The Assistant Director of the Center for Public & Nonprofit Leadership (CPNL)Luisa Boyarski provided a full-day NGO Management Training for NGO leaders as part of a week-long speaker program for the State Department.
On October 22, 2013 the Overseas Private Investment Corporation (OPIC), an independent U.S. government agency, and Schulze Global Investments-Mongolia signed an agreement that will supply Mongolian small and medium enterprises (SMEs) with 10 million USD loans.
On November 15, 2013, the United States and Mongolia met for bilateral consultations at the State Department in Washington, D.C. to review our shared interests and goals both in the region and globally.
In 2013, MIAT Mongolian Airlines (MIAT) successfully acquired a Boeing 767-300ER aircraft with the support of (Ex-Im Bank).
We hope and expect that 2014 will include more positive developments between our two countries.
We hope and expect that 2014 will include more positive developments between our two countries.
UN Fully Supports Mongolia's Initiation to Host International Meeting on Ease of Trading in Ulaanbaatar
December 27 /infomongolia.com/ The initiation proposed by the Government of Mongolia on hosting an International Meeting on Ease of Trading in Ulaanbaatar was supported by the United Nations, reports the Ministry of Foreign Affairs on December 27, 2013.
One factor that emerging the disparities in the development of nations around the world is a landlocked state, in particular this is a vulnerable part of Mongolia.
Nevertheless, one of the six member states of the UN is situated far from the market, besides has a limited opportunity for participation in international trade as a landlocked nation. In the frameworks, parties have been striving to resolve these difficulties and one of initiators, Mongolia is working as leadership in solving this issue. As a result of this initiative, representatives established an official group of landlocked developing countries (LDC) in the UN Office, moreover an Office of the High Representative responsible for LDC tends to be formed at the United Nations Secretariat.
As the next step to facilitate, Foreign Minister of Mongolia L.Bold proposed and introduced to organize an International Meeting on Ease of Trading in Ulaanbaatar within the second quarter of 2014 during his attendance in the UN General Assembly in New York last September.
In response, the UN Office of the High Representative for Least Developed Countries, Landlocked Developing Countries and Small Island Developing States has recently sent its decision to support Mongolia's initiation on hosting the International Meeting in Ulaanbaatar. Therefore, the Government of Mongolia is now to determine the exact date of the event.
According to the survey, only 1.1 percent of total trade turnover in the world is counted for landlocked developing countries and the economic growth of these countries was 6.7 percent in 2010, dropped to 5.9 percent in 2011. Also, the GDP per capita for 19 landlocked countries is estimated less than 1,000 USD. Thus, by hosting such event, Mongolia aims to bring difficulties of landlocked countries in the need for international attention, jointly determine its position and validate during the meeting.
On the other hand, landlocked countries are to explain the difficulties and economic challenges at the international level research, and study is essential, say experts. On this consideration, the Government of Mongolia is ready to establish an International Research Center for LDC.
UN supports Mongolia's hosting int'l conference on trade facilitating – Montsame, December 27
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Mongolia's first professional player
Murun Althankhuyag's professional contract at Krabi FC has made him the first pro footballer from the emerging Asian footballing nation
December 28 (Goal.com) 24-year-old, Murun Altankhuyag, a full international for the Mongolian national team, has signed a two-year professional contract with Thai Division 1 side, Krabi FC.
Born in the Mongolian capital of Ulan Bator, Murun is the first professional footballer from the East Asian nation who are ranked 181st in the world in the latest Fifa rankings and 41st in AFC, making them the 6th lowest ranking Asian nation on the list.
Initially on trial at Division 2 side Rangsit FC, the forward then underwent preparation at Suphanburi FC in the Thai Premier League to acclimatise to the humid Southeast Asian climate. A brief try-out at Lao Toyota FC in Laos in early December also resulted in positive reviews from the team's officials and the offer of a professional contract, but Murun opted to join Krabi, having stated his preference to ply his trade in Thailand.
"I'm very happy and proud of being the first Mongolian professional football player," said Murun after signing his contract at a press conference on Boxing Day.
"I dedicate this to my family, friends, teachers and all Mongolians who have supported me. I will play very well in Krabi FC. I hope 65 million Thai people will be interested in Mongolia, my country."
Krabi FC President, Somkiat Kittidhrakul also hoped that the signing will spark a new relationship between the two nations.
"Murun is a very good player so that's why we signed a professional contract with Murun," he told reporters.
"This is the start of a good relationship between Krabi and Mongolia. I want many Mongolian people to support Krabi FC and Mongolian companies to be sponsor of Krabi FC."
Prior to his big move, Murun had spent his career with American college sides since 2009. He last turned out for Central Methodist Eagles of Central Methodist University in Fayette, Missouri, joining them from Hannibal–LaGrange University in 2010.
Murun's Japanese representative, Takashi Morimoto expressed his delight at finally finding a professional club for his client.
"I was looking for a chance for Murun for 2 years, it was not easy at all," he told Goal.
"Murun did his best in spite of his difficult situation. This is a big success not only for Murun but also all Mongolian people."
Krabi FC, based in the scenic tourist resort town of the same name, play in the second-tier of the Thailand Football League and have set a target of reaching the top flight for next season.
Micronesia to Mongolia: A coaching quest
December 23 (FIFA.com) Football may stretch to the four corners of the earth, but in trying to leave a mark on the game a pair of friends from London got closer to the edge of that particular rectangle than most tend to explore.
What began with musings as England crashed out of UEFA EURO 2008 qualifying, via a few pieces of fate, led to an inspirational story in the middle of the Pacific Ocean, a book, a movie and a reality TV show in Mongolia. This is what the globe-trotting coaching adventures of Paul Watson and Matt Conrad have left them with so far.
Their journey began as the Three Lions awaited the result from Russia where they needed Andorra to beat the hosts to keep England's EURO 2008 hopes alive. When Andorra lost, the duo pondered who the worst team in the world was and whether they could still play international football themselves. A quick glance at the FIFA/Coca-Cola Ranking showed Guam as the bottom side.
"We then searched through their results to see who they had beaten," Conrad explained. "They had won against a bunch of non-FIFA ranked teams and one side, Yap, they had beaten 7-1. Finally we found that Yap had lost every game they'd played, except one – against Pohnpei."
Without a win in their history, the pair concluded Pohnpei were the side for them. One speculative email later to the tiny Pacific island and they had their first piece of luck - the former president of the Pohnpei Football Association was moving to London. "We thought this was a sign from the football heavens," Conrad admitted.
Now almost three years on, with the film 'The Soccermen' set for a 2014 release, Watson has taken on another exceptional task - trying to build a title-challenging team from the ground up in the Mongolian Premier League.
"I always saw [Pohnpei] as a viable route into coaching," he explained. "But what I had done in Micronesia didn't really equate to anything back home. It's not like I expected Chelsea to come offer me a job, or even in [the fourth tier of English football], but my CV didn't really mean anything to anyone."
A third stroke of fate brought about a new opportunity as the director, of what would go on to be called Bayangol FC, saw an article on their work in Pohnpei, and asked if Watson would be interested in helping form a team in Ulanbator - the coldest national capital on the planet.
"It's a real step up compared to Pohnpei in terms of the level of talent and opportunity for something to happen. I think there is the potential for something big here."
While there is certainly more available to him compared to what he experienced in Micronesia, Watson is keen to point out he has far from been given a blank cheque book. "The level of resources we've got would put off any manager further on in their career. It's not like I've taken a job in Thailand or India but I think they were quite happy to get someone like me as I'm probably less demanding in terms of wages, my surroundings and transfer budget."
Even if the job is more serious - like including a wage - Conrad, who primarily as a filmmaker is busy editing together their first trip, is still intrigued by its potential. "Coaching in Mongolia is going to be an adventure whatever way you slice it, it's Mongolia for goodness sake! It's a totally new and exciting place."
Unlike Micronesia, many Mongolians are football mad. However, it is English football that encapsulates them, but with the help of the aforementioned reality TV show, Watson hopes to change that.
The brainchild of the same director that brought him to the club, the programme - who's title translates as 'Dream Team' - will follow Bayangol as they put together a side and begin in Mongolia's top flight.
"Many people see football as a foreign sport, even though it's the most popular one here," Watson said. "We're trying to build a new generation of players which kids will see on TV and think 'I want to be like them', rather than seeing Luis Suarez and thinking 'I'd love to be him but I never could be'."
Like in Micronesia, there have been challenges to get used to such as traffic that can make a 20 minute walk take two hours and cold that Watson admits that "if the trials were outside we'd all have died". The latter also means the season shuts down for six-to-seven months, so try-outs have effectively been for a futsal team - with the indoor sport occupying players through the winter.
Plans had initially been to sign a series of star names and aim for the championship in their maiden season, but with a team formed largely of players in their late teens, Watson feels it has the potential to do more than just triumph for one season. "It's a much more worthwhile project for everyone if we don't break the bank and basically do a Manchester City and buy up all the big stars here."
It is that idea of making a difference that underpins both their epic trips. "I think we changed the trajectory of a lot of these kids' lives," said Conrad, reflecting on Pohnpei. "I hope people see this and think 'I want to do that'. It doesn't have to be Micronesia, it can be close to home too.
"I really believe in football as a healing and binding thing for a community. Many things can do it, but nothing's ever going to trump football for the ease in which you can create something positive."
Watson will be at least looking for Mongolia to make it two projects out of two end positively, and no doubt as another success too.
The book 'Up Pohnpei' by Paul Watson is available now. 'The Soccermen' is scheduled for release in March 2014.
Mongol, with Uuganaa Ramsay
December 22 (Saraband Books) Mongol is a celebration of Mongolian culture... and the moving story of how the life and death of a baby boy with Down's syndrome inspired his Mongolian mother to campaign against prejudice.
Ancient iron smelters indicate Huns more than just conquering nomads
December 19 (The Asahi Shimbun) Archaeologists have discovered the remains of iron-smelting furnaces used by the ancient Huns, a significant find indicating the conquering nomads were advanced enough to make their own iron and not just pillage it.
"With the discovery, the image of a nomadic nation has been altered significantly because we now believe that the Huns built a complex society with a sophisticated system of a division of labor in production," said Tomotaka Sasada, a senior researcher at Ehime University's Research Center of Ancient East Asian Iron Culture.
Before the discovery by Japanese and Mongolian archaeologists, the Huns, who built a nomadic nation between the third century B.C. and first century in the Mongolian plateau and adjoining regions, were believed to have obtained iron for weapons and other implements by pillaging the territories of the Chinese Qin Dynasty (221 B.C.- 206 B.C.) and Han Dynasty (206 B.C.-220).
The joint team of researchers from Ehime University's Research Center of Ancient East Asian Iron Culture and the Institute of Archaeology of the Mongolian Academy of Science have excavated five small iron-smelting furnaces since 2011.
They were uncovered in the remains of Khustyn Bulag in Tov province, located about 120 kilometers east from Ulan Bator, capital of Mongolia.
Sasada said the remains of the furnaces appear to be a workshop dedicated to iron-making, since few everyday items like pottery were discovered at the site.
The archaeologists concluded through carbon dating that the furnaces date to between the first century B.C. and the first century.
Details of the discovery were presented at a symposium held at Ehime University in November.
The furnaces ranged from several tens of centimeters to 2 meters in width. They had holes 30-40 cm deep and narrow tunnels leading underground, which were filled both with charcoal as well as slag separated from iron.
The furnaces are believed to be a type built underground that is often discovered in ancient remains in regions around the Black Sea and Central Asia.
Furnaces used during the Qin and Han dynasties were typically large and built aboveground.
A large number of iron artifacts have been discovered at Hun grave sites, such as arrowheads, swords and sets of harnesses.
Historians believed that the Huns pillaged iron materials and weapons during their invasions into Chinese territories or forced Han Chinese metalsmiths to make iron after capturing them.
Big hearts under a Mongolian Big Top
By Michelle Borok
December 22 (Giant Robot) Earlier this month I had the privilege of visiting Darkhan, Mongolia's Shonhoodoi Circus School. This fall, the International Women's Association of Mongolia (IWAM) was preparing for its winter jacket drive and asked if I could help find some children who might best benefit from the donated winter jackets they'd be collecting. The director of Darkhan Elite 22, the school where I teach English part-time, suggested the Shonhoodoi Circus School and provided a list of names and the ages of the students there. When the jackets were gathered, washed and ready for distribution, the women of IWAM drove up to Darkhan from Ulaanbaatar to deliver them.
Before the hand-over happened, we got a sneak preview of the circus performances that the children were preparing for; a competition in Ulaanbaatar, and a hometown debut at Darkhan's Zaluuchuud Theatre.
The performers of Shonhoodoi are kids who have very little, or have lost what most of us take for granted. There are orphans, abandoned and otherwise disadvantaged children in this bunch, but if you didn't know their stories, all you would see is a group of determined, talented, young athletes.
The school was created by the husband and wife team of Tumuroo and Battsetseg. They started the school to offer these kids an escape, an enviable set of athletic skills, an opportunity to travel, and a chance to be celebrated.
After school, for those who are able to attend one, the kids of Shonhoodoi hurry to practice as often as Tumuroo and Battsetseg can offer them their time. Shonhoodoi has recently been given use of a large facility in the center of Darkhan's Children's Park. It was previously occupied by a Korean Baptist church, but city residents said it should be made available to a secular organization that benefitted the city as whole. (The church built a well-funded, gigantic facility right across the street on private land, so happy endings all around.) The Shonhoodoi Circus School has moved in with the bare bones performance fixtures it owns, but with a recent grant promised by the city, it will be renovating the space to make it more practice-friendly. The kids train without padding on the floor save for thin carpets, and have depended on donations for costumes and accessories used in performances. Some local businesses have also pledged to provide hot meals to the kids during their practice sessions. For some, that meal might be the only hot meal that they'd eat that day.
The women of IWAM brought the kids winter jackets and a huge bag of clothes for everyday wear. After the preview performance, as the women loaded back into their vehicle to head home, the kids dug into the clothes and shared what they'd been given. We all fell in love with the kids that day. As routine as their performances may be in the realm of Mongolian circus arts (think Cirque du Soleil style acrobatics) they put tremendous amounts of heart and dedication into what they do.
I invited two Swiss expats living and teaching in Darkhan to attend the Zaluuchuud Theatre performance with us this afternoon. They asked about when to buy tickets and I'd told them not to worry, that the theatre was unlikely to sell out. Wrong. It was a full house for the circus. We grabbed three seats left in the back row of the main floor. All other late arrivals were ushered up to the balcony.
We were late because we were getting gifts for the performers and flowers for a few in particular. The two youngest performers of the circus had captured our hearts when we met them at their practice space. One boy lost his brother, father and mother in a tragic chain of events. He was taken in as one of the newest students of the circus school, and while he hasn't quite mastered the performing arts, he's completely nailed the knack for performance. He shines when he gets a chance to have an audience and smiles and laughs his way through his blunders. Another Shonhoodoi performer, at just four years old, has become one of the stars of the show. She also lost her parents. She was given a space in the first grade class at Darkhan Elite – the school has taken in many orphaned children on scholarship – but she had a terrible time adjusting to being on her own in a classroom. She's been invited back for next year though, and is thriving at the circus school now, performing in an incredibly sweet acrobatics and contortion duet with one of my 8th grade students.
At the conclusion of the performance, after friends and family ran up on stage to give the performers flowers, giant teddy bears and boxes of chocolate, awards were presented to Tumuroo and Battsetseg for the work they've done with Shonhoodoi. The performers who won honors at the competition in Ulaanbaatar were also presented with special medals and plaques. All of the children ended up receiving recognition on stage and were applauded for their hard work and accomplishments.
When the curtain fell, I snuck backstage to bring up two packed bags of gifts for the kids in the school. After hugs and congratulations, I stepped back to watch the performers thank the Darkhan government representative who helped them organize the performance at the theatre. They gathered for a group photo wearing their new medals, clutching their gift bags and bouquets and wearing smiles that lit up the emptying theater.
It was a fantastic moment to be able to share with them. I hope to keep supporting Shonhoodoi as their students advance and as the school grows, and share their talents with those who can't catch them in Darkhan.
University of Florida receives new grant to address zoonotic diseases in Mongolia
November 6 (University of Florida) In Mongolia, where animals greatly outnumber people, outbreaks of disease that spread between animals and humans are on the rise.
Now, with the help of a new Framework Innovation grant from the National Institutes of Health's Fogarty International Center, the University of Florida is partnering with Mongolian agencies to train multidisciplinary teams that will develop prevention and control techniques to mitigate zoonotic disease problems in Mongolia.
The Fogarty International Center intends to fund the UF project for up to $1.5 million over a five-year period. The new project builds upon a longstanding research partnership between the University of Florida and Mongolian scientists and health officials.
Mongolia is traditionally a nomadic society, and herders live in close contact with their livestock, which typically include cattle, sheep, goats, horses and camels. In recent years Mongolia has undergone rapid change and experienced multiple epidemics of zoonotic illnesses such as brucellosis, anthrax, avian and equine influenza, rabies and tickborne diseases. The possible causes of disease spread are complex, but they may be linked, in part, to shifts toward natural resource development and urbanization.
"Due to economic opportunities, better transportation, and political and climate change, large segments of the pastoral populations in and around Mongolia have been migrating to major cities," said Gregory Gray, M.D., M.P.H., the grant's principal investigator and chair of the department of environmental and global health in the UF College of Public Health and Health Professions. "These human migrations have overwhelmed public infrastructure and sometimes introduced new disease problems to human and animal populations. Because of limited resources in Mongolia, there is a tremendous need for infrastructure development in the public, veterinary and environmental health sectors, including improved diagnostic laboratory facilities, stronger surveillance networks and advanced education."
With support from the Framework Innovation grant, UF will assemble four cross-disciplinary One Health teams of American and Mongolian postdoctoral trainees. The One Health approach recognizes the link between human, animal and environmental health and seeks to bring together expertise in all those areas for public health problem-solving. Each three-person team will train at UF under the guidance of an advisory committee made up of U.S. and Mongolian researchers. The postdoctoral research teams will develop a pilot project and identify collaborators in areas such as public health, veterinary health, animal science, food safety, emerging diseases, environmental engineering, ecology and geography. The teams will then travel to Mongolia to set up their scientific headquarters in an appropriate Mongolian collaborating institution and begin their two-year zoonotic disease research project with a goal of sustainable change in Mongolia.
"This program will strengthen institutional capacity for innovative zoonotic disease training and research at the University of Florida and at the multiple collaborating health institutions in Mongolia," Gray said. "It will also serve as a model program for similar interventions in other low- and middle-income countries."
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