Monday, January 13, 2014

[OT resolution seen this month, HBO converts notes to shares, and Mongolia faces 100Kt wheat deficit]

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Monday, January 13, 2014

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Headlines in Italic are ones modified by Cover Mongolia from original


Overseas Market

Mongolia sees Oyu Tolgoi deal this month

January 12 ( Wrangling over a $6 billion-plus underground expansion of Oyu Tolgoi, Rio Tinto's (LON:RIO) massive copper-gold mine in Mongolia, could be resolved by the end of the month.

UBPost News reports Erdenes Oyu Tolgoi director Da.Ganbold, representing the Mongolian government's 34% stake in the project told local news media "only a few critical issues remain," including water usage which is close to being settled, royalties, details the phase 2 pre-feasibility study and what Mongolia alleges is overspending by Rio to the tune of $2 billion.

Talks between the Anglo-Australian giant and the Mongolian government on the expansion and reworking the initial 2009 deal which first unleashed the Mongolian investment boom, have dragged on for the better part of a year. Both sides provided fresh faces for the Oyu Tolgoi board in September to break the impasse.

Rio unit Turquoise Hill (NYSE:TRQ), operator of the $6.6 billion open pit, announced in December it received extended commitments from 15 commercial banks for the underground expansion where some 80% of the value of Oyu Tolgoi lies. Rio now has until the end of March to make a deal.

Vancouver-based Turquoise Hill recently also closed a $2.4 billion rights offering to repay a $600 million bridge loan and a $1.8 billion interim funding facility for Oyo Tolgoi.

Mongolia introduced new foreign investment laws in November last year to counteract a near 50% slump in foreign direct investment in the country.

A positive outcome on Oyu Tolgoi, where some 2,000 workers have been let go due to the delays, would do much to restore the confidence of investors, many of whom have burned fingers in the country before.

Oyu Tolgoi is set 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.

But after phase 2 the mine in the southern Gobi desert close to the Chinese border could produce more than 1.2 billion pounds of copper worth $4 billion at today's prices, 650,000 ounces of gold ($800 million) and 3 million ounces of silver ($55 million) each year.

Oyu Tolgoi will account for 30% of the economy of the nation of just over 3 million people.

Turquoise Hill – then called Ivanhoe Mines – was founded by mining financier Robert Friedland after making the Oyu Tolgoi discovery in 2001.

According to a new study Friedland, who lost control of the miner to Rio in 2012 and still owns 8-9% of the company, last year lost his billionaire status thanks in part to a 60% slump in Turquoise Hill shares last year.

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Local Market

BDSec Daily Market Update: Top 20 -2.07%, Turnover 18.9 Million

January 10 (BDSec) Stocks ended the week in red. The benchmark index declined 2.07% over the week to finish at 15,918.80 points. Baganuur (BAN), the largest thermal coal producer of the country, dropped 5.92% to finish at MNT 4,516. Makh Impex (MMX) which lost -11.32% yesterday, bounced back 14.68% to close at MNT 2,649. Gutal (GTL), a real estate company, advanced 13.80% to MNT 11,380. Turnover for Friday was MNT 18.9 million.

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January 13 (BDSec) HBOil JSC (MSE: HBO; Bloomberg Code: HBO MO; "HBOil"), is pleased to announce that its Board of Directors has unanimously voted to issue HBOil common shares, in consideration for the short term Convertible Loan Agreement (CLA), which was used to acquire 100% of Ninox Hydrocarbons (L) Berhad (now known as "HBOil [L] Berhad"), a private Malaysian company which holds 20% of the share capital of KOEC International, Inc. ("KOECII"). The remaining 80% of the share capital of KOECII, is held by HBOil's Joint Venture partner Korea Oil Exploration Corporation ("KOEC"), which is the national oil company of the Democratic People's Republic of Korea ("DPRK" or "North Korea").

HBOil also has the pleasure of announcing that it has acquired roughly 12% of the capital of Ninox Energy Limited, a Singaporean entity that owns through Korex Ltd.; 100% of the Production Sharing Contract ("PSC"), which covers the  offshore territory of DPRK in the East Sea. This acquisition by HBOil, via the redemption of its convertible notes in Ninox Energy Limited, now provides HBOil and its shareholders with an approximate 12% indirect interest in the potential hydrocarbons resources in the East Sea of DPRK; effectively, concluding HBOil's previously announced option to acquire up-to 51% of Ninox Energy's interest in the East Sea PSC.

About HBOil JSC

HBOil JSC was established on December 13th, 2000 and became a public company after its listing at MSE in 2007. In 2013, HBOil acquired 100% of Ninox Hydrocarbons, a private Malaysian company which held 20% of the share capital of KOEC International, Inc. ("KOECII"). The remaining 80% of the share capital of KOECII, is held by the Joint Venture partner of NHLB; Korea Oil Exploration Corporation ("KOEC"), which is the national oil company of the Democratic People's Republic of Korea ("DPRK" or "North Korea"). In addition to its legacy oil recycling operations, the vast majority of HBOil's assets are now leveraged to the ownership and development of DPRK's onshore, offshore, midstream, and downstream petroleum industry assets. For all intents and purposes, HBOil is the first and only public equity, offering investors significant exposure to the DPRK's petroleum industry.

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Mongolian Stock Exchange Opens To Institutions, ETFs And Mutual Funds

By Jon Springer

January 12 (Forbes) Mongolia is a country with natural resource wealth that holds sizable per capita GDP possibilities for a national population of roughly 3 million people. Since the discovery of the world class Oyu Tolgoi copper-gold mine in 2001, Mongolia has had a back and forth struggle between populist national interests and welcoming laissez-faire policies dating back to the passage of a 68% windfall profit tax passed in 2005 and its annulment in 2009. The back and forth continues this year with moves forward towards truly opening up the Mongolian Stock Exchange (MSE) to foreign ETFs, mutual funds and institutions for the first time.

Saruul Ganbaatar, outgoing Deputy CEO of the MSE after three years on the job, was interviewed on Skype to provide a sense for where the legal changes are taking Mongolia and why investors should believe there is no going backward after the government of Mongolia's recent legal changes.

Jon Springer: You went on road shows around the world promoting MSE recently. What was your message at the road shows?

Saruul Ganbaatar: Our key message entailed that Mongolia is going in the right direction. Mongolia abolished some of the controversial laws such as the Strategic Entities Foreign Investment Law (SEFIL) and the old Foreign Investment Law. The parliament replaced them with one law that governs the investment environment in Mongolia, the new Investment Law. At the same time, this past year we put through a new rendition of the Securities Market Law and a new Investment Fund Law.

These are some of the sizable developments towards attracting capital to Mongolia. The Investment Law took effect on November 1, 2013. The Securities Market Law and Investment Fund Law took effect on January 1, 2014. So, we met with institutional investors from Hong Kong to New York to let investors recognize that Mongolia is open for business and that the country is looking to continually build a sustainable environment for investments. The new investment law has laid out some specific tax incentives and non-tax incentives for investments. There is also a specific clause in the law that outlines protective measures of the investors' interests in Mongolia. The new securities law also brings in more transparency for Mongolian companies and their reporting requirements.

For the exchange, we will have a new clearing, settlement and custody environment. For 22 years since the formation of MSE, the market was prefunded. With the new law, we are moving to the T+3 standard, which is adopted around the globe and is a crucial arrangement that will allow sophisticated institutional investors and mutual funds from overseas to begin investing in Mongolian listed companies.

JS: Foreigners could invest on the MSE before. Do these laws fundamentally change the market in any way?

SG: In most countries, it's a common practice that, whenever institutional investment funds channel funds into the countries' securities markets, they hold both securities and monetary assets in sophisticated A-rated custodian banks. The adoption of a newly amended law introduces a much-needed legal framework for the creation and operation of local and sub-custodian banks. We now have the necessary clauses in the Securities Market Law, and necessary regulations, which have been drafted over the last 4 ½ months, to go ahead with custodian relationships that create the necessary infrastructure to attract institutional money to Mongolia.

We are also bringing in the legal concepts of nominee and beneficial ownership that haven't existed here before, which sets out the groundwork for funds and most global custodian banks to start forming partnerships in the Mongolian marketplace. The Investment Fund Law was also drafted in-line with the Securities Exchange Act and the Investment Company Act in the United States. It puts in place strict standards and regulations for managing public funds and provides a description of the range of securities investments that mutual funds, ETFs, closed-end funds and private investment vehicles are allowed to invest in.

JS: Did the Financial Regulatory Commission (FRC) change laws this year as well?

SG: The FRC together with the MSE has redrafted 22 regulations in line with the new Securities Market Law. An interesting thing to note is that the new listing rules of MSE and the FRC will require that financial statements be filed in both English and Mongolian, which will help provide investor confidence.

JS: Do the new regulations make dual-listings on the MSE and international stock exchanges possible?

SG: Yes, we are bringing new tradable securities to our markets that are common elsewhere: options, futures, depository receipts (DRs) and warrants. The introduction of DRs is an interesting new addition. It will provide local issuers with opportunities to float on foreign exchanges and execute those transactions in either shares or depositary receipts. DRs appear to be attractive addition for local Mongolian companies listed in overseas markets, for the newly amended regulations will open up opportunities of having straight access to our domestic pool of investors.

JS: The Foreign Investment Law of 2012 (known as SEFIL) was a rushed law in the run-up to 2012′s summer elections. How is this law different?

SG: The Investment Law is making bold steps to attract capital to Mongolia. This law makes no distinction between foreign investors and domestic investors. The old SEFIL had some limitations for foreigners with regard to investing in mining, finance, banking and telecommunications sectors. The only restrictions remaining now are in connection to state-owned entities

JS: SEFIL's passage happened as a populist reaction against a Chinese company taking over a sizable coal mine in Mongolia. What ensures foreign investors against another political issue changing the law?

SG: To provide a further level of comfort, the law stipulates that the government provides a Stabilization Certificate to the investor and stabilizes the terms of investments anywhere from 5 to 20 years. The rates of corporate income tax, VAT, royalty and custom taxes will be fixed during the duration of the stabilization term. The length of the stabilization period will be linked to the amount of the investment by the investor. This arrangement would allow investors to make sizable investments into the country with a long-term view. The Stability Certificate will be issued by the Ministry of Economic Development. For any investments exceeding 500 billion MNT (roughly 300 million USD), the government of Mongolia will sign an additional Direct Investment Agreement further guaranteeing all the incentives described in the law.

The law stipulates that it will require two thirds of parliament to amend or abolish it, which makes me believe that this law will be in place for quite some time.

JS: When I visited the MSE in September 2011, trading was done on the floor with slips of paper. Is that still the process?

SG: Technologically, we have integrated Millennium IT which is used by 30 different financial organizations across the world including London Stock Exchange Group, London Metals Exchange and Johannesburg Stock Exchange. It is a highly sophisticated trading and post-trading technology that has the capacity to handle high trading volumes and a variety of securities classes. Starting in April 2013, half the brokerage firms trading on the MSE began trading from their offices remotely. Most of the industry is moving towards Internet trading, and we are moving in that direction as well.

We have also started cooperating with FTSE to design indices. Separately, we have been placed on FTSE frontier market watch list. If we are added to FTSE frontier market index FTSE frontier market index we will be tracked by some of the largest institutions investing in frontier markets, which, in our view, will provide additional liquidity to our markets.

JS: In the past some companies only floated 3% of their companies on the stock exchange. What is the free float that companies will be required to list going forward?

SG: The new listing rules of the MSE and the FRC will require companies to float at least 25% of their outstanding shares. This should increase turnover, tradability and liquidity of the market.

JS: Several name brand international banks have shown interest in partnering with local Mongolian banks to be the first to make available global custodian accounts in Mongolia. Is there a first mover established yet?

SG: We are still in a process in which the international banks are in the midst of performing due diligence, researching local markets and selecting local partner banks. From my understanding, some conversations have taken place and some memorandums of understanding have already been signed. It's a process in which the global custodians together with the local banks have to negotiate the terms of a long-term partnership. Finalization of the terms will lead to much expanded cooperation, starting with capacity building in Mongolia, selection and integration of the systems, relevant tests, passing and qualifying under new regulations, linking with SWIFT post-trading, building settlement infrastructures at the banks levels, et cetera, all of which usually requires a significant amount of time invested. We believe that sometime in the second half of this year the first global custodian banks will start operating in partnership with local banks.

JS: The MSE Top 20 Index was up 137% in 2010. Do you have any safeguards in place to keep the market from overheating if the new custodial arrangements create a bull run in a market that currently has a market cap of about $1 billion?

SG: Yes, we have in place automatic risk mitigation systems, such as static and dynamic circuit breakers and price bands. Static circuit breakers limit the movement of stocks from the prior day; whereas dynamic circuit breakers limit the movement of stocks from the prior trade. We also have trading bands that limit the stock movements of companies to 15% up or down per day.

JS: With custodian relationships perhaps not available until the second half of this year, when do you expect to see the new investing laws make an impact on the market?

SG: The main objective of the Investment Law is to convey the key message to investors that Mongolia is open to investors. The passage of the new laws have been received positively by the investor community, which was evident in improved volumes on MSE and a significant rise in MSE Top 20 Index. This shows how the MSE is a reflection of the opinions of investors regarding their investments in Mongolia.

JS: For both the CEO of the Mongolia Stock Exchange and yourself, it is your last day on January 15 after three years on the job. What do you look forward to for the exchange and yourself next?

SG: It's been an amazing journey of taking over the modernization of Mongolian capital markets, enhancing the post-trading settlement environment and infrastructures in line with global standards and laying out the foundation by taking an active part in the introduction of new legal frameworks. Moving forward, the time has come to pass the torch along to the incoming management and for me to make the transition to the next stage of challenging undertakings to further promote the growth and development of Mongolia.

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BoM MNT Rates: January 10 Close











































January MNT Chart:

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Total outstanding 1-week bills fall 22.5% to 985.8 billion

BoM issues 1-week bills

January 10 (Bank of Mongolia) BoM issues 1 week bills worth MNT 334 billion at a weighted interest rate of 10.5 percent per annum /For previous auctions click here/

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Labor Ministry Sets 50 Thousand Job Creation Target for 2014

Ulaanbaatar, January 10 /MONTSAME/ The Ministry has put forward a goal to create 50 thousand new jobs in 2014, said the Labor Minister Ya.Sanjmyatav.

The above statement came about amid the Labor Minister's meeting with province governors on Thursday.

The Ministry wants to keep its success of providing 52 thousand with work places in 2013. Under the "Employed and Profited Mongolian" program by the Government for Reforms, the Ministry aims to generate 150 thousand jobs in three-year period.

In order to create workplaces, the government is adhering to three principles aimed to develop employment skills and qualities, to train professionals, and to extend labor employment service availability.

Meeting with the governors of 221 aimags, the Minister said the Government programs for 2014 include project of temporary workplace provision for 10 thousand students, and a special job project for people above 40. The Government is also planning to set up an import substitution plant in every province.

Noting an importance of localities in implementing these goals, Mr Sanjmyatav briefed on roles and functions of the province governors in this regard. 

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Ninja Economy

By Jargalsaikhan Dambadarjaa

January 12 (UB Post) Ch.Ulaan, the Minister of Finance, gave an overview of the 2013 public budget and economic performance last week. Mongolia's GDP last year reached 17 trillion MNT, which is 12 percent higher than the year before. Minister Ulaan also reported that the budget expenditure equaled 35 percent of GDP while the budget deficit was kept below two percent of GDP.

The 2013 total budget revenue was 5.9 trillion MNT, of which one third was collected through taxes and 27 percent from customs tax. In other words, 60 percent of the total revenue was made up by taxpayers. Also, approximately 70,000 economic entities paid 1.8 trillion MNT in taxes, half of which was paid by only ten companies. These ten companies were led by Erdenet (362 billion MNT) followed by APU (154 billion MNT), Oyu Tolgoi (87 billion MNT), MAK (83 billion MNT), Tavan Tolgoi (57 billion MNT), Energy Resources (54 billion MNT), Mongolian Tobacco (45 billion MNT), Erdenes Tavan Tolgoi (40 billion MNT), Boroo Gold (36 billion MNT), and Mobicom (34 billion MNT). As credit should be given to these companies for making such contributions to the economy, something peculiar can be observed if you zoom into how the tax revenues were made up.

We attribute the name "ninja" miners (derived from the animated series "The Teenage Mutant Ninja Turtles") to persons whose main occupation is to dig in the ground while drinking alcohol, smoking, and talking on the phone while not actually turning a profit. Given that our economy is dependent on how much land we dig in and how much alcohol and tobacco people use, we should call it a "ninja economy" as well, especially when almost 10 percent of the total workforce have become ninja miners. It is the bitter truth of today.


A specialist from an international project on micro-mining says that the only job ninja miners can do is digging holes. They treat nature with such cruelty that they do not even bother filling the holes back up. Our economy is dependent on how much coal we dig up and sell to China by sending trucks full of coal to the southern border. In 2013, Mongolia exported eight tons of gold, 18 million tons of coal, 645 thousand tons of copper concentrate, and 6.7 million tons of iron ore. However, except for iron ore, we did not manage to export as much mineral resources as initially planned.

The most influential people in ninja villages are the "bosses" who buy gold from ninja miners with their readily available cash, sitting in their dark window-tinted jeeps. Those bosses have a secret network for collecting and trading gold. Mongolia is a country that loses most of the gold mined through illegal trafficking across the border. There are around 200 bosses who become elected officials, representing political parties and acquiring ruling power in turn. Having obtained authority, they make changes to mining laws in a manner that is only favorable for them, and reallocate their wealth. Their true intention is not rehabilitation or developing other economic sectors – they are only interested in more digging.

These bosses in Mongolia have spent many years doing nothing but making false promises to carry out economic diversification and attaching fancy names to each passing year. For ten years, 80 percent of our export revenue has depended on digging up the ground. It is said that the construction industry has been the industry that experienced the most growth last year, expanding to 2.5 times its size and producing great profits. But has any construction company paid significant taxes? Homes are being built only for the rich, while not a single apartment has been erected for those with low income. What do we make of that? Is our construction industry still walking hand in hand with the land mafia?

Mongolian citizens are looking at an entire generation pass them by, while the bosses within the government are getting richer and the ordinary ninjas can barely afford their daily needs. Income inequality is expanding as our society is losing its grip on justice. Furthermore, political propaganda is growing more complex, saying, "Smog in Ulaanbaatar has now improved its quality with a whiter color," after conspiring to steal hundreds of billions of tugrugs from public money devoted to fighting pollution. Due to air pollution, children here are suffering from lung illnesses, people are more prone to cancer, and hundreds of lives are being taken every year.


Ninja miners were written about in Mongolian Economy Magazine. The story said that psychologically depressed, unable to catch up with development and with deteriorating health, ninja miners only survive to see what the next day brings. They leave their homes in the fall and return in spring while some of them never get to see their home again.

Ninjas live for today, thus, they do not create any kind of accumulation. Likewise, our bosses in the government have only one desire – to acquire huge loans as fast as possible. They consider that the responsibility of repaying the debt belongs to the next government. Today no one, including any of those bosses, can tell you who is creating an accumulation to repay 500 million USD in 2017 and one billion USD in 2022 for the Chinggis Bond. Regardless of its intended use, they are issuing another government bond called "Samurai" and obtained 300 million USD this week.

Those bosses do not have any long-term policies. Therefore, our education and health sector have fully turned into a disaster as the results of the policies in these two sectors are only seen after a longer period of time. Despite this, there are currently 37,000 officially unemployed people. We have 18,000 expatriates working here, and one third of the unemployed have degrees in higher education.

The structure of our social insurance system and organization of labor in health organizations and state hospitals became obsolete many years ago. Patients here spend many days visiting several hospitals and getting in queues in order to be examined. However, it is extremely hard to find a doctor who can produce an accurate diagnosis. Having been misdiagnosed and receiving incorrect treatment, poorer patients are only left with a choice to die, while richer patients travel to other countries. Hospitals in Hohhot, Beijing, Bangkok and Singapore are full of Mongolians who are spending hundreds of millions of dollars abroad.

Mongolia imports most of its common commodities. Even though we have 45 million livestock, 70 percent of our milk is supplied from abroad. We lack certain skills, yet we pushed the foreign investors who have those skills out of the country. It benefits no one but the bosses.


First and foremost, let us stop acting stupid, like ostriches who think others cannot see them when they put their heads in the sand. It is time for us to assess the situation realistically, stop avoiding problems and start acting on solutions. Let us treat any matter with the eyes of an individual rather than the eyes of a politician, and think of the lives of our future generations instead of just election terms.

Let us have a closer look at the work we do daily and the issues we disagree on. Then, for the purpose of comparison, we should see how fast other countries are developing. Let us use the capital produced from mineral extraction to gain economic competitiveness. As life has already shown us, it cannot be achieved through providing soft loans. Let us implement the experiences of Chilean funds, where specific products and services are developed with enormous focus in order to make them internationally competitive before selling their shares to public (more details can be found on the following link: In order to gain competitiveness, the interest rates of bank loans must be reduced. The inflation rate cannot be a one-digit number when the policy rate is a two-digit number.

Less government involvement in the economy results in more efficiency. In every industry where government has taken part, free competition disappears while corruption takes over. It can be seen from the latest court cases that are attracting a lot of attention. Our fate depends on whether or not Mongolia's public governance can improve fast enough, and whether the citizens will be empowered to oversee the activities of politicians who do nothing but give false promises. If we can take these steps rapidly, Mongolia can change its ninja economy.

Translated by B.AMAR

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PM Introduces 'Let's Construct and Create in Mongolia' Plan

January 12 (UB Post) On January 9, the Prime Minister of Mongolia, N.Altankhuyag, introduced plans and projects for 2014 for construction, support for industrialization, improving household income by increasing employment opportunities, and combating corruption and bribery.

The year 2013 was a year that challenged Mongolians, the Mongolian state and government. The global economy suffered, the economic growth of China slowed, and investments oriented towards developing countries were drawn back. It was the year when direct foreign investment in Mongolia decreased.

The Prime Minister has stated that recovery can be created with the support, initiation and participation of citizens, listing the following projects:

The Chinggis Bond was raised and construction projects were successfully launched. A price stabilization program was conducted in collaboration with Mongolbank, and N.Altankhuyag pointed out that the low interest mortgage loan project was successfully implemented. Around 17 thousand citizens have been covered by the eight percent housing loan so far.

A total of 51 thousand new businesses were created in 2013. Some 20 thousand citizens bought new apartments and houses, the construction sector doubled in growth, economic growth reached 12 percent, livestock counts reached 45 million, the centers of four provinces were connected to Ulaanbaatar with paved roads, and 1,800 kilometers of roads were newly constructed.

Although economic growth has been strong, Mongolia imports 88 percent of its total consumer goods and produces only 12 percent domestically. Despite producing 45 million heads of livestock, the nation buys 74 percent of foreign dairy products, 41 percent of flour-based products, and 62 percent of its textiles and clothing from overseas. The Prime Minister believes that the time has come, and demand has been created, to create and produce domestically. In order to reach the government's goals, exports need to be increased by one trillion in 2014 and support for manufacturing should replace support for imports. N.Altankhuyag has declared that the year 2014 will carry the motto "Let's Create and Construct in Mongolia".

The government is planning to launch an apartment housing project for 1,000 households in every province, building up paved roads from Dornod, Sukhbaatar, Omnogovi, Hovsgol, Gobi-Altai, Zavkhan to Ulaanbaatar, and building medical diagnostic centers in 12 provinces with funding totaling 150 trillion MNT. N.Altankhuyag introduced these objectives at a meeting with the province governors of all 21 provinces.

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Mongolia to Launch 1,000 Apartment Project in Each Province

Ulaanbaatar, January 10 /MONTSAME/ The Government is planning to commence apartment project for 1,000 households in every province, announced the PM N.Altankhuyag on Thursday.

At the meeting with the province governors of all 21 provinces, the Premier Altankhuyag introduced the Government projects that will run in all provinces this year, for example, on building up paved roads from Dornod, Sukhbaatar, Omnogovi, Hovsgol, Gobi-Altai, Zavkhan to Ulaanbaatar, on erecting 1,000 apartments in every province and medical diagnosis center in 12 provinces, under its funding totaling 150 trillion. 

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Mongolia Might Have to Import 100 Thousand Tons of Wheat to Meet Reserve Requirements

Ulaanbaatar, January 10 /MONTSAME/ A parliamentary session on Friday discussed a draft law on customs duty exemption. 

The draft foresees a tax clearing for imported wheat of 100 thousand tons for building up a government wheat reserves. it also includes VAT exemption for wheat importers until June 1. However, the Government will not finance the imports, as national flour producers are expected to import the wheat from neighboring countries.

In 2013, Mongolia harvested 369 thousand tons of wheat, 248 thousand of that is presumed to be passable to produce flour, resulting 100 thousand tons more to be imported. Apart from this, the food demand has increased significantly as the population has seen a rapid grow in recent years, said G.Bayarsaikhan, a chairman of the parliamentary Standing committee on nature, environment and agriculture.  

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Start Something Big! Worldwide Interview Series. Interview #1: MONGOLIA (Gerel Orgil)

BY: GWEN ELLIOT, January 12, 2014

Today I'm thrilled to share with you an inspiring interview with Gerel Orgil, a passionate entrepreneur who's a leader in entrepreneurship in Mongolia. 

As the founder of East Maven, a PR company she started two years ago (while working at the local Bloomberg television station in Mongolia, where she was the senior producer) she decided to take the leap and follow her dream. 

Check out her work at @EastMavenPR or Facebook and you'll have an ambitious friend in Mongolia if you choose to visit  

I hope this series shows you how it's possible to connect with amazing people all over the world, and we're all in this game of life together… so let's collaborate and help each other out!


p.s. and you can follow Gerel, @gerel on Twitter!

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500 Buildings Seen Demolished in Ulaanbaatar Replanning Bill

Ulaanbaatar, January 10 /MONTSAME/ Parliament on Thursday decided to discuss a city re-planning and city construction laws in further sessions.

The Construction and Urban Development Minister Ts.Bayarsaikhan introduced to the MPs a draft law on the city re-planning, which foresees demolition of buildings inadequate to meet service requirements, and apartment build-up in ger (national dwelling) districts.

In order to launch apartment construction in the ger districts, the draft requires approval by three fourth of the residents and establishment of trilateral pact between the building company, citizen and capital city administration, ahead of the construction project.

In developing of this law, the Ministry officials have studied similar laws of other countries such as Russia, Japan, South Korea and Germany.

A study shows that there are some 500 buildings in the capital city that need to be demolished in near time, while 170 buildings in provinces dissatisfy service requirements.

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Temporary License Plate Restrictions in Ulaanbaatar on Two Weekends Prior to Tsagaan Sar

January 10 / The Capital City Administration held its first regular Board meeting of the year on Thursday, January 09, where the main issue resolved was restricting the vehicles in Ulaanbaatar depending on their plate numbers endings due to approaching the National Holiday Tsagaan Sar Festival.

Accordingly, all vehicles those plate numbers ending with ODD number will not participate on the road on Saturday, January 18 and Sunday, January 26, and plate numbers ending with EVEN number will not be participating on Sunday, January 19 and Saturday, January 25, 2014.

This regulation is effective from 10:00 am to 08:00 pm for above two weekends and officials pledged to put into service additional express buses to main trade centers such as Narantuul and take necessary measures to decrease traffic jam not only in the city road, but also in Ger areas.

Moreover, the vehicle restriction regulation for weekdays remains effective, except for Monday, February 03, 2014 as the third day of Tsagaan Sar public holiday.

Mongolia celebrates the 2014 Tsagaan Sar between January 31 and February 02 as an official public holiday, on the first three days of the first spring month by a lunar calendar, following the latest regulation ratified by the Parliament in November 2013.

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Mongolia Making Efforts to Join APEC, ASEAN, and Advance Ulaanbaatar Talks on Northeast Asian Security

Ulaanbaatar, January 10 /MONTSAME/ Newly elected head of the parliamentary Standing committee on security and foreign policy Ts.Oyunbaatar Friday visited the Ministry of Foreign Affairs to meet with its authorities.

The Foreign Minister L.Bold introduced to the Standing committee goals the Ministry reflected in the 2012-2016 action programme of the government. He noted that last year, Mongolia's foreign relations sector was fruitful in raising and propagandizing the country's reputation, strengthening its position in the region, developing relations and cooperation with countries, protecting interests of Mongolians abroad, running legal reforms, and in improving the diplomatic services and activities.

Mongolia is doing efforts to join the Asia-Pacific Economic Cooperation (APEC) and the ASEAN Talks and to make efficient the Ulaanbaatar Talks, initiated by the Mongolian President, in order to fortify its position in Asia-Pacific and in sub-region of Northeast Asia, and to join the regional integration, he went on.

He also said that it is vital to establish the Diplomatic Academy at the Foreign Ministry with aims to strengthen skills of human resources and to educate skilled diplomats in a systematic way. He emphasized an importance of the cabinet's goals to protect legal interests of Mongolian citizens abroad, to make the consular service efficient and adequate, and to ease the inter-citizen traveling terms.

In response, Mr Oyunbaatar highly spoke the works done by the Ministry and said his Standing committee will collaborate with the Ministry.     

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Mines Action Canada Urges Mongolia to Ban Landmines

The Ottawa/Mine Ban Treaty is now 16 years old. It is here to stay and has proven to be a very effective life-saving treaty. The widespread stigma and international norm against any use of landmines is not going away. Nothing is being achieved by waiting. It is time for Mongolia to join the treaty now. The road to Maputo leads to a world without landmines, in years not decades, and we want to see you on it.

Most recent statement on the treaty:

In 2011, Mongolia informed States Parties that it continues to pursue a step-by-step policy towards accession due to a number of security and economic concerns.

Current situation in country

From the Landmine Monitor 2013

Mine Contamination in km²: Not affected by landmines.

Number of Survivors: No mine-affected victims recorded.

UNGA resolution 2013: Most recently voted in favour of UNGA pro-ban Resolution in 2013, and has voted in favour of every annual pro-ban UNGA Assembly resolution since 1998, except in its absence in 2005.

Article 7 reports: Mongolia submitted a voluntary Mine Ban Treaty Article 7 report in 2007.

Attendance Record at Meeting of States Parties:

Most recently attended as an observer in the Eleventh Meeting of States Parties in 2011; has regularly participated in Mine Ban Treaty meetings since 2002.

Mongolia has a small stockpile of antipersonnel mines from the Soviet Era, scheduled to be destroyed gradually, and only uses inert mines for training purposes. 

Call to Action:

Mines Action Canada calls on Mongolia to

·         participate in the Maputo Conference

·         accede to the Mine Ban Treaty.

·         actualize its stated intentions of developing the inter-agency coordination policy that will facilitate speedier action on treaty obligations.

Contact information:

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Social, Environmental and Other

The coach who's hoping to transform Mongolian football

January 12 (BBC World Service) If you want career in football, Mongolia is perhaps not the obvious place to go - but that's exactly where British coach Paul Watson is setting up a new team entirely from scratch. He is already finding fresh talent and hopes to inspire the country's next generation of players.

In July, Paul Watson got an email from a stranger in the Mongolian capital, Ulan Bator - Enkhjin Batsumber wanted to know if he was interested in helping him start a new football team, Bayangol FC.

The job offer didn't come as a total shock - in the past Watson had coached the world's lowest ranked national team on the Micronesian island of Pohnpei and had written a book about the experience.

He felt the new Mongolian Premier League "was making a massive effort to bring the game into a more modern and more Western model, and I could see there was a lot of passion", he says.

Although watching football is very popular in Mongolia - many fans support the top European clubs - people feel it's a "foreign phenomenon", says Watson.

"They can't really play, and [they feel] that playing doesn't lead to anything... I like to take on challenges where you can actually make a bit of a difference."

New approach

In Mongolia, Watson found professional players tended to be in their late 20s and early 30s - and he wanted to give younger people a chance to play professionally much earlier in their lives.

"I really want to bring a belief to the kids here that if they try hard enough, and they work hard enough, they can make it at a good level," he says.

"I know it's silly to set goals that are too high but I honestly believe there's a potential for Mongolia to be at least 100 places up in the rankings from where they are at the moment." Right now, Fifa ranks Mongolia 180 out of 209 countries.

Watson is holding public try-outs across the country - a novel approach in Mongolia, where players don't always have the right contacts to get into the game professionally.

He has held two sessions in Ulan Bator - 60 people came to the first one. He plans to hold more trials in the city of Darkhan 225km (140 miles) to the north, and in Sainshand 450km (280 miles) away in the south.

One of his new protegees is 16-year-old Ochiroo Batbold who gets up at 05:30 every morning and makes his way to the school gym where he trains, usually alone, for two hours before class. "My dream is to become a professional football player and play at Old Trafford," he says.

Batbold had never had any coaching or formal training but his passion and determination have clearly impressed Watson, who wants him in his squad.

"I have never had this opportunity before, I have never played in a team before, so this is quite a different experience," says Batbold.


Another player to make it through the first round of the selection process is 23-year-old estate agent Davaadorj Sukhbaatar.

He started kicking a ball around in primary school and as a child would play whatever the weather - even in the snow.

He studied in the US for four years before he returned to Mongolia where he joined another team, but he wasn't impressed with the way it was run.

"Once our team was winning a game 3-0 and the coach suddenly said he wanted to play - he wanted to change his clothes and play. He even had his own jersey."

Sukhbaatar felt there was no transparency in the way players were selected and how they were treated, so he left the team and never planned to return to football until he heard about Bayangol.

"This is what I have been waiting for," he says, "this is what we need in Mongolia."

After the first round of try-outs the candidates will be whittled down further to a final squad of around 30 players.

The whole process is being filmed for a reality TV show which will be broadcast from Monday 13 January, and a local company that makes Frutta, a soft drink, has signed up as a sponsor.

The players will be paid - although the exact amount hasn't been finalised yet. With training just three times a week, youngsters who are still at school will be encouraged to stay in education and people in work won't be asked to give up their jobs.

"We have big aspirations and we are hoping this could become a full-time career for all of these guys, but it would be really foolish to let people build their lives in that way just in case that isn't the case," says Watson.

Paul Watson spoke to World Update on the BBC World Service.

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Two Mongolian skiers to compete at Sochi Olympics

Ulaanbaatar, January 10 /MONTSAME/ Mongolian skiers Ch.Otgontsetseg and B.Boldbaatar will take part in skiing events of Sochi 2014 Winter Olympics.

Our skiers (both 23-year old) will take part in alpine skiing event on February 9-19.

The 2014 Winter Olympics are scheduled to take place from 6 to 23 February 2014, in Sochi, Russia, with some events held in the resort town of Krasnaya Polyana.

Ninety-eight events in fifteen winter sports will be held. Both the Olympics and 2014 Winter Paralympics are being organized by the Sochi Organizing Committee (SOC). Sochi was selected as the host city on 4 July of 2007, during the 119th IOC Session held in Guatemala City, defeating bids from Salzburg, Austria, and Pyeongchang, South Korea.

The Sochi Olympics will be the first Olympics in the Russian Federation since the breakup of the USSR.

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Yokozuna Harumafuji Withdraws from January Tournament Due to Injury

January 10 / The 70th Yokozuna of Japanese Grand Sumo Harumafuji, D.Byambadorj announced to withdraw from 2014 January Tournament due to injury in his leg.

However, the Banzuke for 2014 Hatsu Basho or January Tournament was released earlier, in which, Yokozuna Harumafuji leads the East flank, but Harumafuji hurt his injury got during last November Tournament in recent training for upcoming Basho.

Master of Isegahama Heya (Stable), where Harumafuji belongs to, said, "There is no chance to compete in Hatsu Basho, he needs some period for complete recovery, and Yokozuna Harumafuji will participate in the following March Tournament".

This is the first occurrence, when Yokozuna Harumafuji takes a break since his debut in the Top Division - Makuuchi and D.Byambadorj commented, "I wish to compete but I am afraid to worsen my injury and I will definitely contest in March Tournament".

The 2014 Hatsu Basho starts in Tokyo on Sunday, January 12 for consecutive 15 days.

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Mongolian Organizations in Europe to Unite

Ulaanbaatar, January 10 /MONTSAME/ An online meeting of the Mongolian Society in Europe (MSE), or the Cooperation Unity of Europe-based Mongolian Organizations, ran January 6.

The action attracted delegates of 12 Mongolian organizations based in the UK, Germany, France, Sweden, Portugal, Belgium, the Netherlands, Denmark, Ireland and Austria. Functioning in other countries--Hungary, France, the Czech Republic, Switzerland, Norway--missed the action due to some reasons but expressed a willingness to collaborate with the society.

Through the event, the gathered consolidated their opinions and proposals on developing together, protecting interests of the Mongolians in Europe and co-organizing works and measures.

The online meeting resulted in electing a head of the National Associations for Mongolians in Sweden N.Nomun-Erdene the leader of the MSE. A board member of the Association for Mongolians in the UK J.Onormaa was named the deputy chair, and Ch.Solongoo--the MSE secretary-general in charge of domestic affairs.  

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National Council for Mongol Studies to Be Founded

Ulaanbaatar, January 10 /MONTSAME/ A parliamentary session on Thursday decided to establish a National council for the Mongol studies under the jurisdiction of the PM.

The session backed a draft of parliamentary resolution on further development of the Mongol studies that foresees establishment of a governmental institution responsible for the Mongol studies.

A need to launch this institution has risen from recently increased incidents of misrepresentation and distortion of the Mongolian historic facts. 

In this regard, the Mongol Studies Support Fund will spend 800 million togrog, which is almost 18 times greater than the money spent for the Mongol Studies from the PM's package in 2013. A third, or 250 million togrog of the funding planned, is projected to support overseas academic centers of the Mongol studies and the Mongolists there.

The new agency for Mongol studies will employ nine persons, including a general secretary who is working in the Mongol Studies Support Fund.  

After the discussion the draft resolution was submitted to related Standing committee.  

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Tourism Minister Meets Delegates of Japan Ecotourism Society

Ulaanbaatar, January 10 /MONTSAME/ The Minister of Culture, Sport and Tourism Ts.Oyungerel Thursday received delegates of Japan Ecotourism society.

The sides shared views on the ways to cooperate and to connect Mongolian companies, interested in the Japanese market, to related bodies. 

They also focused on possibilities of developing eco- and bird-watching tourism by ways of protecting pasture, planting trees and acclimatizing birds. 

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National Tourism Center Signs Cooperation Deal with Journalists

Ulaanbaatar, January 10 /MONTSAME/ The National Tourism Center Thursday signed up a cooperation pact with the Confederation of Mongolian Journalists.

The memorandum of understanding aims at promotion of the tourism sector and timely delivering of tourism news and information.

Under the agreement, the sides seek ways to increase the involvement of Mongolian journalists in raising public awareness on tourism matters and, to create a new window of information flow for domestic and foreign tourists, and to conduct joint researches.

The first action of the National Tourism Center, together with the journalists, will be training sessions on the true value of tourism.  

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Oyu Tolgoi: Veterinary check-up conducted for livestock of Gobi herders

Umnugobi, Mongolia, January 9 (Oyu Tolgoi LLC) Oyu Tolgoi is implementing many projects and programmes in cooperation with local community herders. One of them is the 'Pastureland management programme' being implemented by the Regional Development and Social Performance Department. Within the framework of this programme, work is being undertaken to conduct veterinary checkups of animal health and ensure the sanitary conditions of livestock in Khanbogd soum of Umnugovi aimag. The scheme is also identifying the prevalence of animal diseases.

The purpose of this work is to determine the current conditions of livestock in the area around the mine and to contribute to improvements in animal health. We asked Ts.Ulziibuyan, veterinarian of 'Sonor' veterinary clinic, part of the 'Key to Business success' NGO about the progress of this work. She said: "Currently we have conducted veterinary checkups of over ten thousand animals belonging to 40 households. We also took samples from animals for laboratory analysis. Soum veterinarians and herders are actively participating in this work and the soum Veterinary and breeding unit is also providing support."

It is planned that veterinary checkups will be conducted on the livestock of some 130 households as part of this programme.

Animal husbandry accounts for 70 per cent of agricultural output in our country so ensuring sanitary conditions of livestock is crucial for both the improvement of the quality of livestock products and for ensuring food safety. In order to develop a productive and market oriented livestock sector, the creation of healthy and sanitary conditions for livestock and monitoring their health is essential. Oyu Tolgoi's Livestock animal health project is an important part of making improvements in this area.

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Saving the "Mountain Ghosts" in Mongolia


·         Mongolia is home to the second largest population of snow leopards in the world. The snow leopard is classified as an endangered species.

·         The snow leopard range countries endorsed a new global initiative to save the species and conserve the high-mountain ecosystems it relies on.

·         Mongolia is committed to contributing to the global initiative as it has worked on snow leopard conservation for two decades.

Ulaanbaatar, Mongolia, January 10, 2014 (World Bank) Elusive and enigmatic, the endangered snow leopard inhabits some of the world's most rugged and remote terrains, like those in Mongolia, where about 1,000 live across the fragmented mountains of the Gobi Desert and Altai regions.

Mongolia is home to the second largest population of snow leopards in the world, after China. There are between 3,900 and 6,400 snow leopards left in the wilds of 12 countries today: Afghanistan to the west, China to the east, Russia to the north and India to the south.

Recently, the governments of these 12 countries convened in Bishkek, Kyrgyz Republic. Together they endorsed a new global initiative to save the snow leopard and conserve high-mountain ecosystems the species rely on, and the Global Snow Leopard Ecosystem Recovery Program.

Over the last year, range countries, including Mongolia, met several times to develop the program, build country ownership, nurture political will at the highest level and design cross-sector solutions to the issues for the first time. The Global Tiger Initiative  provided support to these countries in moving from isolated interventions, typically NGO-led, toward collective actions led by the governments.  

The Importance of Snow Leopards to Mongolia

The snow leopard species is protected as "very rare" by the Mongolian Law of Wildlife (2012).

Nicknamed "mountain ghosts", the distinctive cats are rarely seen by people. But they serve as an indicator of the health of landscapes they share with people and livestock. Providing water, hydropower, minerals, livestock-based livelihoods, opportunities for ecotourism, snow leopard landscapes are important resource for rural and regional economies.

Humans pose serious threats to snow leopards' survival. In Mongolia, they are poached for their skin and bones, meeting the demands of both the fur industry and traditional Chinese medicine. Overhunting and poaching of their traditional prey have caused conflicts between snow leopards and herders. As the number of their wild prey decreased, snow leopards have turned to attacking domestic livestock. To protect their animals and livelihood, herders retaliate by killing the snow leopards.

Increasing development of roads, railways and other infrastructures that support the mining industry in Mongolia is becoming another threat. For example, construction of a paved road and planned railway in the southern and western parts of Mongolia would divide both the habitat and population of snow leopards and their prey in the area. 

Since it is a top predator of the mountain ecosystem of Mongolia and Central Asia, the snow leopard is an umbrella species for the conservation of other species and habitats, says B. Munkhtsog, a senior biologist at the Institute of Biology of Mongolian Academy of Sciences.

The preservation of the Mongolian population of snow leopards is also an important part of the efforts to save and recover the Russian population of the species in the northern edge, and maintain the gene flow with the Chinese snow leopard population in the south.

"Conserving these endangered animals and their habitats means managing ecosystems sustainably, adapting to the impacts of climate change, and maintaining water security for over a quarter of the world's people." Carlos Drews, Global Species Program Director, WWF International

Snow Leopard Conservation in Mongolia

The first-ever snow leopard conservation project in Mongolia started in 1994, by the Mongolian Association for Conservation of Nature partnering with the Snow Leopard Trust.

In the last 20 years, snow leopard conservation has been ongoing in Mongolia. This has included:

·         Policy, conservation programs and habitat protection of the snow leopard and its prey species 

·         Research and monitoring of the snow leopard and its prey species

·         Environmental education programs in the snow leopard distribution range

·         Establishing and engaging local conservation communities and strengthening governance in the snow leopard range areas

·         Employment of anti-poaching teams, volunteer rangers who regularly patrol wildlife protection areas

·         Training  law enforcement agencies in how to recognize and prevent smuggling of snow leopards and wildlife parts

·         Raising public awareness through media outlets

Innovative Conservation Efforts and Best Practices  in Mongolia

Sainbileg, from the Yamaat valley of western Mongolia, remembers witnessing other community members poaching wildlife. In 2004, she joined the Snow Leopard Enterprises handicrafts program.

The program provides herders with access to local and foreign markets for herder-made handicrafts, returning the bulk of sales profits directly to the herders. In return, the herders promise not to harm the local snow leopards or their natural prey and to protect them from poaching.

After Sainbileg earned some extra money through the program, she also convinced her neighbors to join. "I am proud to report that we have not seen any poaching these days," she said.

More than 400 herder families living in the snow leopard habitats in seven provinces of Mongolia are now part of the program. "Where people have an alternative source of income, it is less likely for them to kill snow leopards either to sell illegally or in retaliation for livestock killings," says Bayarjargal Agvaantseren, Mongolia Country Program Director, Snow Leopard Trust.

Like the handicrafts program, these practices have also proven successful and could be replicated in the long run:

·         Since the 1990s many new protected areas were established in potential snow leopard habitats in Mongolia. Today, 20 state-protected areas in the country harbor snow leopards.

·         Two Trans-boundary Nature Reserves were established in important snow leopard habitats at the border of Russia and Mongolia.

·         Two inter-agency anti-poaching teams were established in western Mongolia to conduct regular patrolling in snow leopard habitats. As a result, the number of poaching incidents in five western provinces decreased rapidly.

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Four water sources built for Mazaalai gobi bears as part of preservation effort

January 10 / The Mongolian Government has initiated prompt actions to protect the Mazaalai, or Gobi bear, by establishing a nature reserve to restore a safe habitat, by opening a zoo and setting up a working group to explore ways of increasing the bears' population over the past years.

As a part of the actions taken, two water springs were refreshed and a pond was built in Shar Khuls and Khushuut at the Great Gobi National Park in order to increase surface water access for the Mazaalai. There are also two groundwater wells that are powered by sun and wind energy in Myangan tooroi and Baruun sharga.

There are now four new surface water sources for the Mazaalai in 2013. Over 20 tons of food for the Mazaalai has been stationed across 28 points with the help of the Undesnii Bakharkhal (National Pride) and "MAMA" NGOs, individuals and local entities in the area. The food was distributed in the time between spring and autumn when the Gobi bears are not hibernating. The critically endangered Gobi bear is only found in the Mongolian Gobi Desert. The estimated population was 15-20 bears in 1960, 20 bears in 1970, 25-30 bears in 1980 and 30 bears in early 1990.

Now there is a very small population of 22 Gobi bears living in the most remote parts of the Gobi Desert, wandering near oases and mountain ranges with water sources where they can survive in the harsh and extreme desert climate. The Mazaalai is listed in the Red Book of Mongolia with a status of very rare. Mongolia prohibited Gobi Bear hunting since 1953 but environmental degradation, climate change and lack of water and food in its habitat have affected the health and reproductive success of the Gobi bear.

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Gobi Bears Access More Water PointsMontsame, January 10

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