Tuesday, December 17, 2013

[OT financing pledges extended to March, class action suit filed over SGQ restatements, and Fitch revises Khan, Xac outlook to negative]

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Tuesday, December 17, 2013

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Overseas Market

UPDATE 1-Turquoise Hill says Oyu Tolgoi financing pledges extended

Dec 16 (Reuters) - Turquoise Hill Resources Ltd said on Monday that parent Rio Tinto had secured extended commitments from the banks that have agreed to finance the underground expansion of the Oyu Tolgoi copper and gold mine in Mongolia.

The extension, to March 31, gives Rio Tinto more time to resolve a dispute over costs with the government of Mongolia.

Rio, which owns 50.8 percent of Turquoise Hill and operates Oyu Tolgoi, put the mine's more than $5 billion expansion on hold in July, saying the Mongolian government wanted parliament to approve the project's financing.

Mongolia, which will not see its share of Oyu Tolgoi's profit until Turquoise Hill recovers its costs, has complained that total costs on the first phase were $2 billion higher than planned.

It wants assurances such overruns will not happen again, and hopes to resolve the dispute by early 2014, a government source told Reuters last month.

Turquoise Hill, which owns 66 percent of Oyu Tolgoi, had said in June that financing commitments would expire Dec. 12.

The Vancouver-based company announced a rights offering to raise up to $2.4 billion in November, citing the delays at Oyu Tolgoi.

A feasibility study for the underground expansion is still on track for the first half of 2014, the company said on Monday. It also confirmed that it expects Oyu Tolgoi to produce 150,000 to 175,000 tonnes of copper in concentrates, and 700,000 to 750,000 ounces of gold in concentrates in 2014.

Separately, Turquoise Hill said a class action complaint has been filed in the Southern District of New York in connection with SouthGobi Resources Ltd's recent revenue restatements.

SouthGobi, a coal miner controlled by Rio through Turquoise Hill, said last month it had recognized revenue from its Ovoot Tolgoi mine in Mongolia earlier than it should have. Turquoise Hill said it believes the complaint has no merit.

Link to article

TRQ releases:

Turquoise Hill Provides Update on Oyu Tolgoi, Project Financing and Financial and Production Guidance for 2014

Turquoise Hill Announces Distribution of Rights Materials, Comments on Recent US Legal Complaint and Completes Altynalmas Gold Divestment


Rio Tinto Secures Extension For $4 Billion Oyu Tolgoi Financing PackageWSJ, December 16

Oyu Tolgoi financing commitments, December 16

Turquoise Hill drops as Oyu Tolgoi financing pledges extendedProactive Investors, December 16


Trafigura agrees to financing for Oyu Tolgoi off-take deal

December 16 (Reuters) - Commodity trader Trafigura has agreed to provide financing for the massive Oyu Tolgoi mine in Mongolia in exchange for a long-term deal to buy an undisclosed portion of the output, it said on Monday.

Rio Tinto (RIO.L)(RIO.AX), majority owner and operator of Oyu Tolgoi, one of the world's largest copper and gold mines, has spent months wrangling with the Mongolian government about plans to expand from an open pit into an underground operation.

Trafigura, which markets a wide range of metals including copper concentrate, referred to the off-take deal in its first fully public annual report since being set up 20 years ago.

"We also provide finance in exchange for long-term supplies. For instance, we recently signed an off-take agreement with Oyu Tolgoi in Mongolia," it said, giving no further details.

Rio Tinto had no immediate comment on the Trafigura deal.

Rio put the mine's $5 billion expansion on hold in July, saying the Mongolian government wanted parliament to approve the project's financing. Mongolia hoped to resolve the dispute by early 2014, a government source told Reuters last month.

Fifteen banks that have agreed to finance the expansion have told Rio they will extend their commitments, which were due to expire at the end of the year, until next March, a statement said on Monday.

Trafigura also said the global copper market is expected to be broadly in balance next year as low inventories and a recovery in global growth offset stronger mine output.

"We don't expect prices to rise markedly, but on the other hand, with concentrates trading at close to cost levels for some producing areas, a collapse in prices is also unlikely," the Trafigura report said.

The benchmark copper price on the London Metal Exchange has shed 8.3 percent this year, weighed down by more output from new mines such as Oyu Tolgoi and improved operations at many existing mines.

The global copper market is expected to widen its surplus next year to 328,000 tons from 182,000 tons this year, analysts polled by Reuters said in October.

Link to article


Trafigura agrees off-take deal for Oyu Tolgoi mineMining Weekly, December 17


OT to cooperate at Tavan Tolgoi power plant project

Ulaanbaatar, December 16 /MONTSAME/ At OT Managing board meeting December 11-13, shareholders agreed to cooperate at Tavan Tolgoi mega project.

The Oyu Tolgoi board meeting discussed issues remained in dispute, before approval of the 2014 budget. After the meeting, the investors announced their plan to cooperate in Tavan Tolgoi mega project of the Government. However, issues regarding involvement and volume of investment are expected to be discussed early next year.

Besides the Tavan Tolgoi power station project, they touched upon the financing issue of the underground mine of Oyu Tolgoi, yet leaving it for further discussion.

Both Mongolian and foreign parts agreed to grant a loan in order to solve the funding; however, the date to receive the loan is still not clear, but a mere speculation that five sources including the World Bank and some foreign Development Banks are expected to grant the loan.

Link to article

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Local Market

BDSec Daily Market Update, December 16: Top 20 +0.42%, Turnover 49 Million

December 16 (BDSec) The market rebounded on Monday after three consecutive days of trading in the red. MSE Top 20 index rallied 0.42% to 15,454.53 points. Ulaanbaatar BUK (BUK) and Mongol Savkhi (UYN) led the gain with 10% and 9% increase, respectively. Mogoin Gol (BDL), a coal miner in the Northern Mongolia was the biggest loser of the day. The stock decreased 8.11% and closed at MNT 14,500 on a traded volume of 800 shares. Total traded value at the exchange was MNT 49.0 million.

Top Movers 

Trading Value Leaders

Close (MNT)

Value (MNT)

Tavantolgoi (TTL)



Mogoin Gol (BDL)



Remicon (RMC)






Top Gainers

Close (MNT)

% Change

Ulaanbaatar BUK (BUK)



Mongol Savkhi (UYN)



Mongolia Development Resource (MDR)






Top Losers

Close (MNT)

% Change

Mogoin Gol (BDL)



Hermes (HRM)






Link to update


Stock Exchange Weekly Review: Top 20 -2.08%, Turnover 197.74 Million

Ulaanbaatar, December 15 /MONTSAME/ Five stock trades were held at Mongolia's Stock Exchange on December 9-13 of 2013.

In overall, 315 thousand and 477 shares were sold of 34 joint-stock companies totaling MNT 197 million 744 thousand and 164.00.

"Remikon" /208 thousand and 651 units/, "Hai Bi Oil" /19 thousand and 755 units/, "Genco tour bureau" /16 thousand and 833 units/, "Tavantolgoi" /13 thousand and 873 units/ and "Khokhgan" /12 thousand and 317 units/ were the most actively traded in terms of trading volume, in terms of trading value--"Tavantolgoi" (MNT 76 million 367 thousand and 535), "Remikon" (MNT 35 million 272 thousand and 126), "APU" /MNT 30 million 869 thousand and 160/, "Aduunchuluun" /MNT eight million 992 thousand and 243/ and "Hai Bi Oil" (MNT six million 740 thousand and 160).

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Fitch Affirms Two Mongolian Banks at 'B'; Revises Outlooks to Negative

Fitch Ratings-Hong Kong-16 December 2013: Fitch Ratings has today revised the Outlook on the Long-Term Issuer Default Ratings (IDRs) of Khan Bank LLC and XacBank LLC to Negative from Stable. At the same time, the agency affirmed the two Mongolian banks' IDRs and Viability Ratings (VRs) at 'B' and 'b'. A full list of rating actions is at the end of this rating action commentary.


The revision of the Outlooks on both banks' IDRs reflects weakening operating conditions, as indicated by the change in the Outlook for the Mongolian sovereign (B+) to Negative from Stable on 13 December 2013. The sovereign's Outlook was revised due to mounting risks to the country's economic and financial stability, including deterioration in its external finances, arising from very loose policy settings. The harsher operating environment is pressuring the banks' standalone profiles.


Ratings on the two banks could be downgraded if pressures on asset quality and liquidity intensify. Persistent local-currency depreciation would reduce borrowers' repayment capacity and could lead to accelerated deposit withdrawals given the country's high level of dollarization.

The banks' ratings also remain sensitive to the withdrawal of credit stimulus, as this could result in asset deterioration on slowing economic growth, and/or higher inflation. Further decline in the government's international reserves could also trigger a negative rating action, as the banks' currency-related risk is counterbalanced by the authorities' swap facility and unlimited foreign-currency conversion.

Both banks' ratings are also sensitive to any changes in their steady access to capital from private-sector owners. Khan Bank's existing shareholder subscribed to USD40m of the bank's subordinated debt in October 2013 (2.2% of risk-weighted assets at end 1H13). Fitch also expects XacBank to issue new equity to accommodate further growth.

Sustainable economic growth underpinned by stable foreign investment could lead Fitch to revise the rating Outlooks back to Stable.


Khan Bank's Support Rating (SR) and Support Rating Floor (SRF) reflect Fitch's view that, as the largest bank in Mongolia, it would be likely to receive state support in case of need. However, the Mongolian sovereign's ability to provide timely support to the banking system remains limited as underlined by its IDR of 'B+'.

A downgrade of the sovereign ratings would point to weakening in the Mongolian government's ability to provide timely support to the banking system, which put negative rating pressure on Khan Bank's SR and SRF.

In contrast, Fitch expects XacBank's SR and SRF of '5'/'B-' to be maintained, even if the sovereign's rating is downgraded to 'B'. This is because the current SR and SRF already reflect the agency's view that support from the sovereign, in case of need, cannot be relied upon.

The rating actions are as follows:

Khan Bank

Long-Term Foreign-Currency IDR affirmed at 'B'; Outlook revised to Negative from Stable
Short-Term Foreign-Currency IDR affirmed at 'B' 
Long-Term Local-Currency IDR affirmed at 'B'; Outlook revised to Negative from Stable
Viability Rating affirmed at 'b' 
Support Rating affirmed at '4'
Support Rating Floor affirmed at 'B'


Long-Term Foreign-Currency IDR affirmed at 'B'; Outlook revised to Negative from Stable
Short-Term Foreign-Currency IDR affirmed at 'B' 
Long-Term Local-Currency IDR affirmed at 'B'; Outlook revised to Negative from Stable
Viability Rating affirmed at 'b' 
Support Rating affirmed at '5'
Support Rating Floor affirmed at 'B-'

Link to release


Total outstanding up 98.2 billion to 1.17 trillion

BoM issues ₮328 billion 1-week bills

December 16 (Bank of Mongolia) BoM issues 1 week bills worth MNT 328 billion at a weighted interest rate of 10.5 percent per annum /For previous auctions click here/

Link to release


The Fifth Round of Negotiations for the Japan-Mongolia Economic Partnership Agreement (EPA) 

December 13 (Ministry of Foreign Affairs of Japan) --

1.    The Fifth Round of the Negotiations for the Japan-Mongolia Economic Partnership Agreement (EPA) will be held from December 16 to 19, and 24, 2013 in Ulaanbaatar, Mongolia.

2.    The Japanese delegation will be led by Mr. Jun Yokota, Ambassador in charge of Economic Diplomacy, and the Mongolian delegation will be led by Mr. Ochirbat Chuluunbat, Vice Minister for Economic Development of Mongolia. Experts from relevant ministries and agencies of both sides will participate in the meetings.

3.    In this round, negotiations in areas including Trade in Goods, Investment, E-commerce, Rules of Origin, Customs Procedures, Competition, Cooperation, Dispute Settlement, Sanitary and Phytosanitary Measures (SPS) and Technical Barriers to Trade (TBT) are scheduled to be held.

Link to release


First Meeting of Mongolia-China Joint Border Commission Runs in Beijing

Ulaanbaatar, December 16 /MONTSAME/ The very first meeting of Mongolia-China joint commission of borders took place December 11-12 in Beijing, China.

This meeting was co-chaired by T.Togsbilguun, a director of the Department of Neighbour Countries of Mongolia's Ministry of Foreign Affairs, and by Xiao Jiangguo, a representative of border checkpoint and seaport affairs.

The sides exchanged views and information on implementation of the intergovernmental contract on the border regime, and reached some agreements on conducting a joint examination in the border signs and on activating the collaboration in law enforcement around frontier areas.

After this they discussed issues of developing border checkpoints at a same level, putting some border checkpoints into a permanent regime, giving an international status to four checkpoints. 

The gathered also made a protocol on their meeting and inked its results.

The next meeting will run in 2014 in Ulaanbaatar. 

Link to article

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MPP submits demand to parliament to dismiss Ministers Ulaan and Batbayar over handling of economy

Ulaanbaatar, December 16 /MONTSAME/ On Monday, a chairman of the Mongolian People's Party M.Enkhbold and a head of the MPP faction S.Byambatsogt submitted to the Speaker a request on dismissing  incumbent Ministers of Finance Ch.Ulaan and of Economic Development N.Batbayar.

"Our faction considers that these Ministers must be held responsible for worsening of the national economic situation. We also intend to do the same with other Ministers after hearing opinions of people," said Byambatsogt MP.

A majority of this faction backed this action, signing the request.    

Link to article


DP faction supports President's draft law on prohibiting MPs working as cabinet members

Ulaanbaatar, December 16 /MONTSAME/ At its meeting on Monday, the faction of the Democratic Party (DP) discussed a draft resolution and draft amendments to the laws on government and on parliament submitted by the President.

The draft amendments were unanimously backed by the faction. A basic content of these drafts is about prohibiting MPs from working as a member of the government.

In addition, the faction backed a draft resolution on keeping a stability of foreign currency rates.

It was decided to order to the cabinet to thoroughly work on this resolution and to pay an attention to a bill on debt management and to matters of increasing the mineral exploitation and supporting the concentrate and cement productions with capital of the "Chinggis" bonds. 

Link to article


Justice Coalition Supports Ceasing Dual Parliament and Cabinet Membership

Ulaanbaatar, December 16 /MONTSAME/ A head of the faction of the "Justice" coalition (Mongolian People's Revolutionary Party and Mongolian National Democratic Party) N.Battsereg MP gave a report after his faction's meeting Monday.

He expressed a position of the faction over some draft laws to be discussed this week. He noted that the faction backs a clause on prohibiting MPs from working as a member of government. Only a head of a government can be the MP. The faction will support this clause at draft amendment to the laws on government and parliament that will be considered by parliamentary Standing committee on state structure, he added.

The faction also heard information on a bill on land, and then considered that there is no need to discuss the land privatization issue urgently.

After this the faction members exchanged views on agenda to be discussed at spring and autumn sessions next year, he added.

Link to article


Members of State Great Khural Issue Statement of Support for Smart Government

December 16 / Members of the State Great Khural (Parliament) of Mongolia have expressed a unanimous and firm support of the initiative forwarded by President Ts.Elbegdorj under "From Big Government to Smart Government", a government reform concepts,and have signed a joint Statement of Support for a Smart Government on December 13, 2013.

On November 16, 2013, the Office of the President of Mongolia organized the national consultative meeting themed "From Big Government to Smart Government" at the Government House.

Later, President Ts.Elbegdorj met with members of the Parliament on December 09, organizing an open dialogue with Parliament representatives and appealing to sign the joint Statement of Support for a Smart Government.

Thereof, reaffirming the commitment of the Mongolian lawmakers to a breakthrough reform of the Government, the leaders of party floors and factions in the Parliament and independent members of the Parliament signed the document for the reform on December 13, 2013. Below is the full text of the Statement of Support.


Noting the open exchange of views on the issue of crafting a smart government held between the President of Mongolia Tsakhia ELBEGDORJ and the Members of the political party floors and factions in the Parliament as well as independent Members of the Parliament on December 09, 2013:

ONE: Affirming full and unwavering support of the goal to move to a smart government, put forward by the President of Mongolia on November 16, 2013;

TWO: Expressing commitment to a determined cooperation to undertake a comprehensive government reform to build a modern and competitive government by, inter alia:

- Enhancing the government system, its policies and operations in conformity with the values of democracy and principles of market economy,

- Ensuring the integrity and cohesion of the state policies and actions,

- Reforming the organization, operations and processes of public service and instituting accountability mechanisms at every level of the government,

- Improving the capacities and efficiency of the public service,

- Eliminating government participation in business activities,

- Holding the politics immune to business influences,

- Intensifying the fight against corruption,

- Supporting domestic industries,

- Ensuring economic growth by securing property rights and supporting private sector,

- Creating government structures based on rule of law and providing for inclusiveness, producing research-based decisions and services,

- Instilling the discipline to honour and implement contracts,

- Supporting direct democracy, sovereignty of local governments and local development funds,

- Setting by law the long-term national development strategies,

- Improving the election legislation,

- Introducing information technologies;

THREE: Upholding national solidarity and consensus and endorsing a new political culture, WE HEREBY JOIN THIS STATEMENT OF SUPPORT FOR A SMART GOVERNMENT.

Link to article


MPs Sign DeclarationMontsame, December 16


National Program on Health of Elders Approved

Ulaanbaatar, December 16 /MONTSAME/ At its meeting on Saturday, the cabinet approved a national programme called "Healthy aging and health of elders".

According to a report from the National Statistical Committee (NSC), a number of old people has been increasing year to year, so the programme aims to support life expectancy of the elders by improving their health, social welfare and social participation.

The Minister of Finance Ch.Ulaan and the Minister of Health N.Udval were given obligations to place money in the annual budget and to finance this programme with foreign assistance and loans.  

Link to article


Foreign Management to Be Hired to Run MIAT Mongolian Airlines

Ulaanbaatar, December 16 /MONTSAME/ The cabinet meeting on Saturday approved a list of projects and programmes to be realized by the Procurement Policy Department (PPD) in 2014.

Obligations were given to D.Enkhjargal, the PPD chairman, and to general managers of budgets to organize the purchasing activities and to do other related works in time. The list has 340 projects and programmes costing 1,359.4 billion togrog. 

- In accordance with the cabinet decision, a foreign skilled management team will carry out the executive management of the state-owned Mongolian Airlines Company. It aims to augment the economic and financial benefits of the company, to lift its competitiveness at international market, to ensure the flight safety, and to prepare the national stuff. Related orders were also given to the State Property Committee (SPC) and the company Representative Lading Council.

- The cabinet discussed results of state visits of the President Ts.Elbegdorj to Myanmar, Vietnam, Singapore and Hong Kong on November 18-27, and obliged the Minister of Foreign Affairs to submit them to the National Security Council (NSC).

- A head of the Cabinet Secretariat for Government Ch.Saikhanbileg introduced to the cabinet results of his visit to Washington DC, USA. After this he was ordered to take related measures concerning the visit's outcome.    

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Chinggis Bonds Funded Textile House to Compete with Global Brands

Ulaanbaatar, December 16 /MONTSAME/ New garments made in "Exclusive", a newly established textile factory are now on sale.

The textile factory, one of reconstruction projects financed by the Government, now gives its fruits in a few months' time since receiving the support. Last spring, at the meeting aimed to explore chances to create a world-known Mongolian brand, a director G.Maitsetseg promised to create a domestic brand competitive at the global market.

Visiting the factory's shop on Sunday, the Premier N.Altanhuyag saw its first products made since receiving a financing of 700 million togrog from the government bonds capital. Citing that textile industry demands less investment than others, and easily stands on own feet, the PM underlined efforts of the private sector in realization of major projects under the bonds capital.

The factory is planning to create a set of products that include outerwear, underwear, bags, shoes and boots, as well as leather, wool and cashmere clothing. 

Link to article


Mongolian TV Network Exposes Media Corruption With Fake Story About McDonalds

December 16 (The Hollywood Reporter) Mongol TV went undercover and bribed journalists (Mogi: wouldn't describe it as bribing, but paying for articles)  from the country's major news networks to run a joke story, revealing rampant journalistic corruption and a lack of basic fact-checking.

An investigative news show on Mongol TV planted a false news story last week with all nine of Mongolia's major local media outlets about McDonalds opening a branch in the country. The exercise was undertaken to expose corruption and the rampant practice of paid-for journalism in Mongolia, Mongol TV said.

The appearance of a "Mr. P. Rank," promising McMutton burgers and goats-milk-shakes, in the "official" press release set off no alarms at the media networks, which took between $150 and $700 from an undercover journalist to run the story on their websites, on the front page of three newspapers, and on TV news on three networks, including the local public broadcaster.  

"Soon the first letter our children learn will be 'M', Mr. P. Rank says with a golden, shining smile," according to the fake release, which also claimed McDonalds was to be sponsored by Mongolia's Health Ministry and sold in schools all over the country. (Mogi: no, the planted article did not mention any of this, at least from the ones I read)

STORY: Mongol TV Head: Media Can Help Fix Country's Big Problems

Nomin Chinbat, head of Mongol TV, spoke to The Hollywood Reporter earlier this month at the Asian Television Forum (ATF) in Singapore about her plans to carry out the sting, "as a social experiment to raise the issue and let people know how the system works."

"They won't check the facts, they'll just be interested in getting paid to run the story," said Chinbat.

After Mongol TV unveiled the sting, it invited representatives of the nine duped media organizations to explain their actions, though all reportedly declined.  

Link to article


BCM Monthly Meeting, December 9 Presentations

J. Bayarmagnai, Executive Director, Quality Supplier Development Center /USAID Grantee/ – "Quality Supplier Development Center: Your partner for doing business in Mongolia" at the BCM Monthly meeting Dec 9, 2013

L. Sumati, Director, Sant Maral Foundation – "Impact of Corruption in Mongolia" at the BCM Monthly meeting Dec 9, 2013

D. Jigjidmaa, Investment Promotion Program Manager, IFC Mongolia – "Investment Protection Issues in Mongolia" at the BCM Monthly meeting Dec 9, 2013

Presentation of "Win Win with Mongolia" at the BCM Monthly meeting Dec 9, 2013

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Belarus to open embassy in Mongolia in 2014

MINSK, 16 December (BelTA) – Belarus will open its embassy in Mongolia in 2014, reads Resolution No.1069 of the Council of Ministers of the Republic of Belarus dated 12 December 2013, BelTA learnt from the press service of the government.

The Embassy will be opened in accordance with paragraph 8 of the regulations on the diplomatic and consular missions of the Republic of Belarus approved by Decree No. 247 dated 9 July 1996.

The Finance Ministry shall finance the costs of opening and maintaining of the Belarusian Embassy in Mongolia from the funds set aside in the national budget for the opening and maintenance of diplomatic missions and consular missions of the Republic of Belarus abroad.

Link to article


On the Meeting of the Minister of Foreign Affairs of Belarus Mr.Vladimir Makei with the Ambassador of Mongolia Mr.Sh.AltangerelMinistry of Foreign Affairs of the Republic of Belarus, December 16


IX Consultative Meeting between Foreign Ministries of Russia, China and Mongolia Held in Beijing

December 16 / The IX Consultative Meeting between the Foreign Ministries of the Russian Federation, People's Republic of China and Mongolia was held at the Directorial level of the affiliated territorial departments in Beijing on December 13, 2013.

At the meeting, Mongolian delegates led by Director of the Department of Neighboring Countries at the Ministry of Foreign Affairs Tumurkhuleg TUGSBILGUUN, China by Director-General of the Department of Asia Affairs at the Foreign Ministry Luo Zhaohui, and Director of the First Asia Department, Ministry of Foreign Affairs of the Russian Federation, A.B.Kulik have attended, where parties discussed the current situation in the Asia-Pacific region, trilateral and bilateral relation, partnership process and other issues of mutual concerns.

Parties unanimously agreed that as the major countries in the region, Mongolia, China and Russia play constructive roles in building peace, stability and ensuring the development and prosperity at the regional and international levels.

Noting that there are no political and historical unsolved issues, the sides reaffirmed their commitment to support each other in matters concerning the sovereignty, security and vital interests as well as serious issues of other parties' concern.

Furthermore, the sides emphasized to stand for the development of trilateral trade, economic and humanitarian cooperation and for moving upward partnership ties between the three states. Moreover, China, Russia and Mongolia negotiated to bolster partnership in mining, transit transportation, infrastructure, tourism and environmental protection considering the connection of three countries with infrastructure as the priority adherence of the trilateral trade and concrete economic cooperation.

The VIII Consultative Meeting between the three parties was held in Moscow on October 29, 2012 and the next is scheduled to take place in Ulaanbaatar in 2014.

Link to article


India's 'Connect Central Asia Policy'

New Delhi has made it clear that it wants a closer relationship with the SCO and Central Asia.

December 13 (The Diplomat) The Shanghai Cooperation Organization's (SCO) Council of Heads of Government meeting in Tashkent in the last week of November 2013 saw a growing enthusiasm from India for a more proactive role in Central Asia. The comments made by Indian Foreign Secretary Sujatha Singh at the conference is a clear indication that New Delhi has already committed to initiating steps to apply for a full membership of SCO.

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Social, Environmental and Other

Historical and Cultural Heritage Protection Zones Set in Southern Provinces

Ulaanbaatar, December 16 /MONSTAME/ The cabinet meeting on Saturday decided to draw historical, cultural heritage protection zones in southern provinces of the country.

The special protection zones include a territory of 408 ha with dinosaur track in Omnogovi province and a territory of 892 ha with fossil remains in Dornogovi.

At these zones, heritage damaging actions such as construction and close road building, that cause high vibration, will be prohibited.

The cabinet told the province governors to build relevant signs and fences around the zones, Tourism Minister Ts.Oyungerel was obliged with rendering an assistance in creating secured travel routes in these protected areas. 

Link to article


Mongolia Ranks "Extremely High" (4 out of 5) in Global Water Stress Index

(The World Resources Institute's Aqueduct Water Risk Atlas)

Score by Sector

Agricultural 3.2

Domestic 4.2

Industrial 4.8

Link to map


The surprising story of Mongolian shamanism

MIT anthropologist finds that after Soviet domination, a rebirth of shamanism helped Mongolia rewrite its own history.

December 16 (MIT News) In 1990, as the Soviet Union was disintegrating, Mongolia, long a satellite of the U.S.S.R., regained its independence. Socialism was out and free markets returned. Religion — in the form of Buddhism, shamanism, and other folk religions — became officially accepted again in Mongolian society. That, in turn, produced another unexpected change: The return of shamans, religious figures who claim to have a supernatural ability to connect with the souls of the dead.

Indeed, as MIT anthropologist Manduhai Buyandelger chronicles in a new book, the revival of shamanism has shaped Mongolia in surprising ways in the last two decades. From storefronts in Ulan Bator, the nation's capital, to homes in rural Mongolia, shamanism has become a growth industry.

In the book — "Tragic Spirits," published this month by the University of Chicago Press — Buyandelger both documents this surprising phenomenon and analyzes its meaning. The return of shamanism, she asserts, represents more than the straightforward return of a once-banned religion to Mongolia. And it is more than just a convenient method for people to earn a little income by working as shamans. 

Rather, she says, shamanism became more popular precisely because, in a poor country recovering from Soviet domination — where Mongolia's occupiers had wiped away its records and the physical traces of its past — shamanic practices have offered some Mongolians a way to reinvent their own history. Shamans offer clients the supposed opportunity to meet with the spirits of their distant ancestors and hear "fragmented stories about their lives in the past," as Buyandelger observes.

"Shamanism is a historical memory for people who lost parts of their ancestral homeland, and who had been marginalized and politically oppressed," adds Buyandelger, an associate professor of anthropology at MIT. It flourishes, she notes, where people have "no museums, no libraries, no cemeteries, no mausoleums. They don't have anything to materialize their memories of the past." 

'I wanted to … understand it, and capture it'

A native of Mongolia herself, Buyandelger's project grew out of a desire to study and write about the thrills, disorder, and uncertainty that emerged in post-Soviet Mongolia.  

"It was complete chaos, and an exciting time," Buyandelger says. "I wanted to write about it and understand it, and capture it." Having already learned Russian, she started studying English out of a desire to write about Mongolia for the widest audience possible.

Meanwhile, in those first heady years of the 1990s, with religion tolerated again and Mongolians having to carve out their livings outside the socialist state system, shamanism suddenly flourished: "Religious practitioners proliferated like mushrooms," Buyandelger says. "Astrologers, fortune tellers, shamans, monks were everywhere, from the bus stations to homes, and monasteries were reviving and opening up." 

To be clear, shamanism never disappeared entirely from Mongolia, as Buyandelger explains in the book; even while officially banned, underground shamanism persisted, often practiced by women in rural areas. However, the official repression of religion had created an "aura of mystery" around shamanism, as Buyandelger says, which helped it grow quickly again in the 1990s. That growth was also due to a symbiosis among shamans and clients: Becoming a shaman was a way of having a job, while going to a shaman was, in part, a way of finding reassurance at a time when, for many people, "the future had fallen apart." 

Buyandelger, who grew up in Ulan Bator, focused in her book on 18 months of fieldwork she conducted, largely with ethnic Buryat nomads in Dornod province, the easternmost part of Mongolia. The village of Bayan-Uul, where Buyandelger based her work, has a population of about 5,000 people. 

In Dornod province, she noticed something deeper underlying the shamanism revival. Shamanism, after all, promises communication with the past — and in the Dornod area, which is particularly close to Russia, Soviet erasure of Buryat history was especially harsh. So shamanism quickly became a way of inventing, or trying to recreate, a past that had otherwise completely vanished. 

"People knew they had forgotten their past," Buyandelger says. "So they turned to a past that was embodied by the spirits of ancestors. Instead of thinking about the past in terms of years or periods, shamanic rituals teach people to think in terms of historical personas."

Shamans themselves, as Buyandelger puts it, are "cultural bricoleurs" who "make memories out of generic stories and make histories out of knowledge that they collect throughout their practice." Indeed, she notes, the Mongolian word for history, tuukh, means "to collect." 

The book has been well-received by other scholars; Paul Stoller, an anthropologist at West Chester University who has read the book, calls it "a memorable evocation of the human condition as well as a powerful exercise in social analysis." 

Looking for trust

In the book, Buyandelger also uncovers some more subtle dynamics explaining the phenomenon of shamanism today. Women, while a minority of practitioners, constituted a much larger portion of those who tried to engage in shamanism during the Soviet era, as she relates in the book. "Female shamans, as women, were not necessarily regarded as doing anything harmful," Buyandelger says, "whereas male shamans were under the gaze of the state." 

Moreover, a popular need to learn more about the past helps shamanism thrive now, precisely because clients have tended to try out a variety of shamans in the search for the one who can connect with the past in the most satisfactory and compelling way. A successful shaman, Buyandelger notes, brings spirits alive to clients as "verbal memorials," which, taken together, comprise history for some Mongolians. 

"People don't have genealogical records, and you have shamans who don't know exactly how to conduct themselves, so everything is a trial," Buyandelger says. "Shamanism proliferates today not because people necessarily believe it 100 percent, but because people are trying to test it, and find out the most authentic practices they can trust. The more skeptical people seeking out shamans, in some ways, have become the most active catalysts of this proliferation." 

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Mongolia's nomads warm to solar power

Portable solar panels are helping the sunny country's nomads - without disrupting their way of life.

December 16 (Al Jazeera) In Mongolia, often known as the land of the blue skies, the sun shines for 250 days on average each year. It beats down on the sparse plains and on the Gobi desert that spans the country's southern border with China.

It shines, even during the frigid winter days, on the hundreds of thousands of nomads who still roam the steppes, herding animals and living in dome-like tents calling gers.

About 800,000 of Mongolia's 2.8 million inhabitants still live the traditional nomadic lifestyle that has remained largely unchanged for generations. Apart from the addition of motorbikes, the occasional petrol generator, and a passing trade from intrepid tourists wanting to stay in a ger for the night, life is almost the same as that of many nomads' grandparents and great-grandparents.

Almost, but not exactly.

Dotted across the steppes, glints of light can be seen as the sun bounces off the solar panels that have been installed on the sides of gers made of felt and yak's wool. At the start of this millennium, Mongolia's herders and nomads had little or no access to modern electric power and its potential benefits.

But as of 2013, thanks to a concerted push by the Mongolian government, almost 70 percent of nomadic people have access to electricity. Bor, a herder who mainly travels around western Mongolia's Arkhangai province, is one of the people whose family benefits from portable solar home systems (SHS).

"We use it for generating the power for lighting in the ger, charging phones, we can also generate a fridge to keep food longer and we can run a television. That is very useful for us because we can get the most recent weather forecast, which is important for our work and keeping our animals safe. Before we had power it was very difficult. Now it is almost like living in the city."

The ability to charge mobile phones is also important for the herders, who often have children staying at boarding schools. "Most countryside children stay in dorms, because their parents are nomads and it is the only way they can get an education," said Bor. "We can call our children who are in the dorms and speak to them. I also have children working in Ulaanbaatar [Mongolia's capital] and I can speak to them as well. The solar panels are a very useful thing in our lives."

Capturing the sun

Access to electricity also allows families to contact emergency health-care and doctors for advice without having to make the often arduous journey to the nearest village or town.

The solar systems were distributed and installed with the help of the World Bank, after the Mongolian government's National 100,000 Solar Ger Electrification Programme ran into difficulties.

A World Bank report, Capturing the Sun in the Land of the Blue Sky, describes the difficulties faced by the Mongolian government on its ambitious project.

By 2005, five years into the plan, 30,000 families had been kitted out with an SHS, but then the programme began to stagnate. "The government of Mongolia recognised that considerably more effort was necessary not only to keep the programme on track, but to scale-up implementation in order to achieve the National 100,000 Solar Ger Electrification Program target," the report said.

In 2006, the World Bank agreed to cover half of the initial outlay costs for each family as well as after-sales maintenance, with 50 centres set up across the country, including at least one in each of its 21 provinces, so that the herders would not have to travel to Ulaanbaatar every time the solar panels needed maintenance.

Migara Jayawardena, a senior energy specialist at the World Bank and lead author of the World Bank report, told Al Jazeera that more than half the nomadic people in rural Mongolia now have access to modern electricity services thanks to the programme - exceeding the original target by 35 percent.

"The overall project structure, including the private dealers and sales and service centres, also remain in operation, and could possibly serve any herders who remain un-electrified, or those who may want to purchase upgraded SHS that can support a larger variety of appliances," he said.

Too expensive?

Despite the financial help, the solar panels can still be prohibitively expensive. The cost depends on where the SHS is produced. The most expensive are from Germany, Japan or China, and can cost from between 150,000-800,000 togrog ($88-467).

Batsaikhan, a nomadic herdsman from Huvsgul province, said cost is a major factor for him. "I would very much like to be able to have the solar panels," he said, "but I cannot because I do not have enough money. It is difficult to save when there are things we need urgently. We see them on sale and one day I want to be able to afford this."

The SHS project also offers environmental benefits to a country where the ratio of carbon dioxide emissions to economic output is ten times higher than the world average, because of the increase in mining over the past decade as the true extent of Mongolia's mineral wealth became apparent.

"SHS is a clean energy source and does not have emissions that would result from using candles, kerosene or diesel," said Jayawardena. "These latter forms of lighting would have local pollution impacts. SHS result in reduced indoor smoke pollution that often leads to respiratory and other illnesses. The utilisation of renewable energy from an early stage of modernising do provide a low emission path from the onset, which can have longer-term implications as the country moves forward."

The solar systems are slowly replacing the diesel generators used by some nomads as a means of generating power, although they are still using stoves for heating, burning wood coal and dung throughout the year.

Jayawardena's paper emphasises the importance of minimising disruption to Mongolian nomads' traditional way of life, which could easily have died out with the onset of globalisation.

Accomodating the nomadic life

"The availability of electricity has, of course, improved the quality of life of the herder communities," he told Al Jazeera. Seventy percent of the herders reported "increased productivity" as a result of access to electricity, with 90 percent using mobile phones (compared with a pre-project level of 0 percent). Seventy percent own a colour TV, which have become the most widely used source of information.

"Of course, since they are nomads, traditional electrification of fixed lines are not compatible with their nomadic ways. They would need to change their lifestyles in order to acquire a typical electricity connection," said Jayawardena.

"However, with the availability of portable SHSs that can be easily assembled and disassembled, the technology is adapting to accommodate the herder's nomadic lifestyle rather than the other way around. This enables those who wish to remain herders to continue their nomadic lifestyle while still acquiring access and the benefits of modern electricity - thereby preserving their traditional lifestyle."

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Mongolia: Dariimaa Jamba, a ger district community worker

(GIZ) While family bonds are traditionally very close in Mongolia, good neighbourly relations are rather an exception in the land of nomads. Nevertheless, sixty-year-old Dariimaa Jamba has succeeded in mobilising her community and joining together in tackling the problems in the socially weak yurt quarter. A GIZ development worker offers advice to 25 self-help projects of the community on behalf of the Federal Ministry for Economic Cooperation and Development.

What was the biggest change in your life so far?

My retirement was a turning point. After 31 years working as a chemistry and biology teacher I found life without a job unfulfilling. I am a mother of five children. My daughters and my son are grown up now. I told myself: life is not over at 60. So I became involved in social activities.

What led to your new task?

I had never heard of community development before such work started in my area. We assembled some people and held meetings. To us it was important to improve our living conditions first, so we began by building toilets and gardening our yards. It was a first step. We finished quickly because many households worked together, not everyone on their own. So we decided to form a community and continue what we started.

You are the speaker of the community. What is your vision?

There are many poor people around here and a lot of problems to solve: the waste on the ground, the lack of street lighting, and the living conditions of the elderly, to name a few. Many residents are isolated. I try to activate them, involve them in the community work and connect them with each other. I hope that they become able to improve their lives with their own power and skills.

What is the biggest challenge for achieving this goal?

When people work together to change things, funding is the most difficult part – for an office where we can work, training that raises understanding, and diverse material you need to provide financing. Another challenge is to obtain everybody's support. Some don't trust you or simply don't want your help.

You don't get paid for your work. What motivates you?

I like to do something good for the people and I have got many ideas. When someone smiles, I am inspired. That gives me strength. It is my salary to be a happy person and my work gives me a lot of energy – every day.

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Mogi: LOL! Did this actually make anyone hungry? It sure made me craving from some buuz!

FROM BAD TO WORSE: Wooden spoon. Or: If this be a food race, then you, Mongolia, come last

By James Casey

(Swallow Magazine) Famed for historic brutality and a vast and sweeping former empire, the one thing no-one ever accused the Mongolians of conquering was the kitchen. While Mongolia has long since remained a peaceful nation, Mongolian "cuisine" (if one could be so kind as to call it that) continues to trade in acts of provocation—an often violent assault on the senses olfactory, gustatorial, and optical.

Perhaps unsurprisingly, Mongolia's geography accounts for much of its diet's ghoulish character. High, cold and dry, Mongolia is sandwiched between the wilds of Siberia and northwestern China endowing its inhabitants with scant arable land and extremely harsh winters. In fact, the term "extreme" might aptly describe most things Mongolian, for it is a country that rarely deals in the half measure.

Domesticated animals and their output offer sustenance in the face of adversity, with meat and milk serving as the sole components of most meals (and what meals they are!). Common dishes to grace the table include boiled meat and innards (chanasan makh), the fatty tail of the fat-tailed sheep (uuz), mutton cooked in a milk can with dung-heated stones (khorkhog), and on truly special occasions, the stone filled carcass of a gopher (boodog) served with a steaming cup of its grease as an aperitif.

With all this in mind, the Mongolian dumpling, or buuz, is certainly one of the more palatable representatives of the national table. Minced mutton, chopped onions, and salt are combined then wrapped in dough with a small opening at the top. These are then steamed gently and eaten ravenously by hand. Much ofBuuz's appeal lies in the fact that steaming delivers a less pronounced rancid old sheep flavor, and that these small parcels endow only a controlled amount of said meat. In these parts, flesh is prized for its fattiness—fuel for long winters and life punctuated with backbreaking work.

Buuz, advertised locally as the "national fast food" of Mongolia, is readily available in any one of the many working-class cafeterias lining Ulaanbaatar's Peace Avenue. Stepping inside from the brutal cold, each establishment is diffused with a warm haze of atomized fat particles that coats everything with a greasy film — not limited to one's clothes, which seem to smell of animal fat for the duration of their Mongolian visit. Steaming cups of suutei tsai (salted milk tea) are also served alongside the dumplings, although they too have a habit of arriving tableside topped with a healthy slick of mutton tallow; a step too far for sustenance's sake.

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Mongolian Children Can Choose Their Citizenship When They Reach 16

December 16 / Last November 15-24, officials from Mongolian Immigration Agency (MIA) have conducted a working visit to Washington D.C., United States to familiarize with livelihood and conditions of Mongolian children adopted by nationals of latter part.

In the frameworks, MIA delegates met with Director of Programs for South Korea and Mongolia at Holt International NGO, Mr. Paul Kim, where parties exchanged views on Hague Inter-country Adoption Program and its further collaborations.

News: 2011.05.25: Chairman of Mongolian Immigration Agency held a meeting with Holt International NGO representatives.

Recently, MIA delegation returned from the United States and after visiting over 30 Mongolian children adopted by citizens of the United States has summarized their working visit.

According to UB Post newspaper, an interview regarding Mongolian children adopted by US citizens was released and under the permission by E.Oyundari, Associate Editor at UB Post, the following interview with Head of the Department of Citizenship at MIA, T.Khangerel by Unuudur Daily Newspaper was shared with

- Rumors have spread that the children adopted to foreigners live under pressure and become the victims of human trafficking. Under what rules, principles and criteria is the adoption process carried out?

- As the Immigration Agency is in charge of the Mongolian children who are adopted by foreign citizens, officials paid a workingvisit to Washington, D.C. in the U.S. at the end of November. We visited Mongolian children and discussed the possibilities of cooperation with a department at the United States Immigration Office in charge of adopted foreign children.

As of today, 152 Mongolian children have been adopted in the United States. Some people, who don't have any concept of foreign adoption, say that Mongolians are giving these children to aliens and those aliens sell them away. I don't understand where such information has originated and why people lie like they've witnessed it. In order to adopt a child, foreigners must fulfill lots of criteria. Adoptive parents-to-be first have to apply with a request to the relevant adoption organizations in their countries.

That organization receives their request and investigates many things, such as whether the applicants have committed or are connected to any crime, their family background, if they are financially capable of raising a child, etc. The investigative specialists issue a summary about whether an applicant has suitable potential to adopt a child.

There are many particular criteria that must be met, such as an applicant family - or partners - should have lived together for at least five years. Once applicants are approved by investigators or specialists, they approach the ministry in charge of population development. The adoption specialists conduct research and receive suggestions from orphanages that send information about suggested children. After exchanging the information, the supervision procedure starts. We conduct focused research on the foreign applicants who send us requests, and require more details and information in some cases. After that, we start the discussion to decide whether or not to allow the adoption.

Also, not everyone who wants to is allowed to adopt a child from our country. We allow reciprocal adoption to countries who have joined the Hague Convention. Mongolia joined the convention. I guarantee that there is no child registered at our agency who went overseas and became a victim of human trafficking.

- How many children did you meet during the recent visit? What is the age of the adopted children? How about the living environment, mood and spirit of the Mongolian children?

- We met over 20 Mongolian children adopted through Holt International Children's Service, an adoption agency based in Eugene, Oregon, in the United States. Even though the adopted children's appearance remains Mongolian, their minds, language and lifestyle have completely changed. I was happy to see that our children are being raised to be healthy, smart and full of spirit. There is a community of parents in the United States who have adopted children from Mongolia. They hold regular meetings to discuss how they are nurturing their children and assist each other. Mongolian children are good-natured, smart and good listeners; often praised by their parents. There is one happy family who adopted two children from Mongolia.

- Are they still Mongolian citizens? Do new parents give them another name?

- We can't visit every child in one visit. Visiting adopted children does not mean we visit their homes. We also held meetings with nannies and teachers of the children, besides meeting their parents, and were introduced to the children's living environment and homes. An adopted child is a Mongolian citizen until they reach 16. When they turn 16 years old, they choose their citizenship. There are many children with Mongolian and English names. For instance, David/Zorigt, and George/Khulan.

Parents who've adopted Mongolian children bear the responsibility of introducing Mongolian culture, tradition and history. They fulfill their responsibilities well. At our visit, we gave children Mongolyn Nuuts Tovchoo or the Secret History of the Mongols, printed in English and Mongolian languages, and Mongolian Uighur script.

- Did you meet the children in person? Do they miss Mongolia or want to see their motherland?

- Usually, children are adopted at age one or two, so they don't have feelings about missing their country. But when they grow up, they start asking their parents why he or she looks different from their parents. Parents tell children the truth and allow their children to get information about their motherland through the internet.

Some parents bought their children Mongolian traditional costumes, and some visit Mongolia to experience the Mongolian traditional Naadam Festival. During our visit in the Unites States we chose one family and specifically studied that family.

According to the must-visit list of the Mongolian children, they want to go to the countryside if they come to Mongolia. They wrote and drew their wish to experience horse riding and see yaks and camels.

- In the beginning of our conversation you mentioned a Mongolian child who is being trained in horseracing. What is the name of that child? Can you give us detailed information?

- I can't give more detailed information about that child, because there are reasons to not reveal it. Most adopted children are abandoned by their birth parents or found in the streets. When a child is found, the police officials carry out work for a long time to determine the address of a child and find a child's parents, but sometimes parents are not found. In the end, a child is delivered to an orphanage. At the stage of adoption, our organization and police revisit the work to find a child's parents.

Sometimes birth parents come to us looking for a child after many years, even though they were not found when we looked forthem. Recently, one person came to our organization saying that she gave a child up for adoption and now she wants to get in touch with her child's adopted parents. That woman doesn't know whom she gave her child for adoption and now requires us to give information. To be honest, there are people who want to suck money from other people. An incident occurred where a parent demanded lots of money after agreeing to give a child up for adoption. Also, we bear the responsibility to keep information about adoptive and birth parents private. I noticed that the parents who adopted the child you are asking about love their child like they are birth parents. The parents told me that their child studies well and is being trained in horseracing.

- Do you receive any information about the rights of a children adopted by foreign parents being violated or becoming victims of abuse?

-So far, we haven't received such information. Parents who adopted a child send us an annual report about the development, health and nurturing of their child. We supervise from here, and the United States conducts internal supervision of those families. During our recent visit, we met American adoption specialists. They check everything, including what a child eats,where and what bed he or she sleeps on, what a child wears and reads, etc.

- As I understand, foreigners who've become acquainted with Mongolia become interested in adopting a child from Mongolia, don't they?

- Yes, they do. Usually, people who have worked here or who have Mongolian friends, are interested in adopting Mongolian children. A country which has allowed the largest number of children to be adopted in the United States is Korea. Americans have adopted around 200 thousand children from Korea.

- How many children were adopted this year? In total, how many children have been adopted so far, and by what countries?

- In total, 247 children were adopted by foreign citizens. One hundred and fifty-two of them are in the United States, thirty in Germany, nineteen in France and fourteen in Italy. In 2012, fourteen children were adopted. This year, a total of six adoption requests have been delivered and we have allowed adoption by three applicants from the United States and two to Italian applicants.

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Munkhdul Badral Bontoi

Founder & CEO


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Skype: mogibb

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