Tuesday, January 14, 2014

[Rio stake remains unchanged, MNT at 1-week high, exports slide despite copper boost, and inflation reaches 12.5%]

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Tuesday, January 14, 2014

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Headlines in Italic are ones modified by Cover Mongolia from original


Overseas Market

TRQ closed +0.91% to US$3.33

Rio Tinto's Turquoise Hill Stake Unchanged at 50.8%

LONDON, January 13 (WSJ) Mining titan Rio Tinto PLC (RIO) has kept its majority stake in Turquoise Hill Resources Ltd (TRQ.T) unchanged at 50.8% following the successful completion of a $2.4 billion rights issue.

Turquoise Hill, the 66% owner of Mongolia's Oyu Tolgoi copper and gold deposit, said Monday that its rights issue was over-subscribed but declined to say by how much.

Rio Tinto, Turquoise Hill's largest shareholder and Oyu Tolgoi's project operator, said it spent 1.29 billion Canadian dollars, or $1.19 billion, in order to maintain its 50.8% Turquoise Hill stake. It didn't acquire any additional shares as part of a standby agreement because the rights issue was fully subscribed, the miner said.

Rio Tinto, however, did receive anti-dilution warrants that if exercised alongside other warrants, would increase the Anglo-Australian miner's stake in Turquoise Hill to 54.2%. Rio Tinto said it has "no present intention" to exercise those warrants.

Robert Friedland, the company's founder, also fully subscribed to his share of the rights issue, a source familiar with the matter said. Mr. Friedland owns about a 10% stake in the company.

Turquoise Hill announced in November plans to issue $2.4 billion worth of shares in order to pay back an equal amount of loans due to Rio Tinto later this month.

Turquoise Hill had initially planned to pay off the loans by securing project financing in 2013 for the underground expansion of the mine, where about 70% of the project's mineral value lies. But Rio Tinto put the expansion on hold last summer after the Mongolian government unexpectedly announced that the project's financing would have to be approved first by parliament. Rio Tinto and the Mongolian government have been at loggerheads for more than a year over the project's investment terms given government concerns about escalating costs and the impact it may have on the timeline for the government's return from the project, among other things.

Turquoise Hill said last year that progress has been made in resolving the issues with the Mongolian government, which owns a 34% stake in the deposit. Rio Tinto also said it has secured a commitment from 15 commercial banks to extend the signing date for a provisional $4 billion financing package negotiated last year to the end of March.

Oyu Tolgoi is forecast to produce between 150,000 metric tons and 175,000 tons of copper in concentrate and 700,000 troy ounces to 750,000 oz of gold in concentrate this year after exporting its first copper in July.

Mr Friedland said he expects the Oyu Tolgoi to generate significant cash flow from this year onward.

"This is the first time that the mine will be debt free and in full commercial production. So there is nowhere to go but up," he told The Wall Street Journal in an interview on Dec 20 after visiting the mine.

He said that the company has about $750 million worth of copper and gold in inventory and could cover this year's forecast $1 billion in operating costs if Oyu Tolgoi were to sell its 750,000 oz. of forecast gold production at the current gold price of about $1,200/oz.

"That means you get the copper for basically nothing," he said.

Mr. Friedland said he wasn't particularly concerned about the two to three outstanding issues that he said still need to be resolved between Turquoise Hill, Rio Tinto and the Mongolian government. "All the players have stated that they are looking for a successful resolution and I think it's a virtual certainty that we will see it next year," he said.

Rio Tinto plans to unveil an updated feasibility study for the underground expansion project in the first half of this year.

Link to article


Rio Tinto won't have to lift stake in Turqoise HillThe Sydney Morning Herald, January 14


TRQ press release:

Turquoise Hill Closes Successful Rights Offering

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Jan. 13, 2014) - Turquoise Hill Resources (TSX:TRQ)(NYSE:TRQ)(NASDAQ:TRQ) today announced the closing of its rights offering, which expired on January 7, 2014, and confirmed the offering generated approximately US$2.4 billion in gross proceeds. The Company is using the net proceeds from the rights offering to repay all outstanding amounts under its US$1.8 billion interim funding facility and its secured US$600 million bridge facility with Rio Tinto, and any remaining proceeds will be used for the continued funding of the Oyu Tolgoi Project, working capital, general administrative expenses and other corporate expenses.

Upon the closing of the offering, Turquoise Hill issued a total of 1,006,116,602 new common shares, which represents 100% of the maximum number of common shares available under the rights offering.

Approximately 99.3% of the shares were issued in the basic subscription of the rights offering with the balance having been issued in the additional subscription. Rio Tinto exercised all of its rights under the basic subscription and did not participate in the additional subscription of the rights offering, which was available to all shareholders who fully participated in the basic subscription. Because the offering was over-subscribed, Rio Tinto was not required to purchase any shares under its standby commitment. As a result of the rights offering, Rio Tinto's stake in Turquoise Hill remained unchanged at 50.8% of the outstanding common shares.

Turquoise Hill will distribute new common shares acquired through the rights offering to registered subscribers on or about three business days after the closing of the offering.

Link to release


Centerra Gold Announces 2013 Consolidated Gold Production of 690,720 ounces and Provides 2014 Guidance

TORONTO, ONTARIO--(Marketwired - Jan. 13, 2014) -

This news release contains forward-looking information that is subject to the risk factors and assumptions set out on page 5 and in our Cautionary Note Regarding Forward-looking Information on page 8. All figures are in United States dollars.

Centerra Gold Inc. (TSX:CG) announced today that its 2013 consolidated gold production totalled 690,720 ounces, which includes 600,402 ounces of gold from the Kumtor mine, located in the Kyrgyz Republic and 90,318 ounces of gold from the Boroo mine, located in Mongolia. During the fourth quarter of 2013, consolidated gold production was 362,234 ounces, including 348,130 ounces of gold produced by the Kumtor mine and 14,104 ounces of gold produced by the Boroo mine.

Ian Atkinson, President and CEO of Centerra stated, "We are very pleased to report that both operations exceeded the Company's 2013 production guidance. At Kumtor, in the fourth quarter the mine produced 348,130 ounces as we accessed and mined the high-grade SB Zone. The Boroo operation continued to perform well in the fourth quarter, exceeding our production guidance for the year by 5,000 ounces due primarily to higher than expected recoveries and head grade."

"For 2014 we are estimating gold production to be in the range of 595,000 to 645,000 ounces. We have not included any production from Gatsuurt in our production guidance for 2014 due to the associated uncertainty of approval and commissioning of the project. Centerra's projected consolidated all-in sustaining cost per ounce sold1 for 2014 is within a range of $875 to $950 and consolidated all-in cost per ounce sold1 is $989 to $1,074. This demonstrates the Company's good margins at the current gold price and leverage to increases in the gold price," he concluded.

Outlook for 2014

Kumtor's forecasted 2014 production and costs discussed in this news release are provided on a 100% basis and the forecast does not make any assumptions regarding possible changes in the structure and management of the Kumtor Project, including without limitation the level of ownership resulting from ongoing discussions with the Government of the Kyrgyz Republic and Kyrgyzaltyn JSC, Centerra's largest shareholder. See "Material Assumption and Risks" for other material assumptions or factors used to forecast production and costs for 2014.

Gold Production

Centerra's 2014 consolidated gold production is expected to be 595,000 to 645,000 ounces.

Centerra estimates that the Kumtor mine will produce between 550,000 and 600,000 ounces in 2014 and, similar to 2013, over 50% of this gold production is expected during the fourth quarter when mining will reach the high-grade section of the SB Zone.

The 2014 production guidance range is lower than that outlined in the life of mine plan set out in the Kumtor technical report filed on December 20, 2012 (the "2012 life of mine plan") as a result of a lower 2014 starting ore stockpile inventory and a reduction in the rate of vertical advancement of cutback 16, which provides access to the high grade SB zone ore in 2014.

At the Boroo mine, gold production is forecast to be approximately 45,000 ounces. The forecasted annual production at Boroo includes about 20,000 ounces from heap leaching and 25,000 ounces from the mill. The Boroo mill is expected to process ore stockpiles during the year with an average grade of 0.70 g/t gold. The 2014 forecast assumes no mining activities at Boroo or Gatsuurt, and no gold production from Gatsuurt.

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Local Market

MSE News for January 13: Top 20 -0.94%, Turnover 25.6 Million

Ulaanbaatar, January 13 /MONTSAME/ At the Stock Exchange trades held Monday, a total of 16 thousand and 925 shares of 25 JSCs were traded costing MNT 25 million 571 thousand and 625.00.

"Remikon" /8,559 units/, "Khokh gan" /1,500 units/, "State Department Store" /1,497 units/, "Hermes center" /1,089 units/ and "Tavantolgoi" /861 units/ were the most actively traded in terms of trading volume, in terms of trading value--"Talkh chikher" (MNT four million 841 thousand and 600), "Tavantolgoi" (MNT four million 631 thousand and 695), "UB BUK" (MNT two million and 805), "Sharyn gol" (MNT two million 470 thousand and 030) and "APU" (MNT one million 653 thousand and 710).

The total market capitalization was set at MNT one trillion 604 billion 423 million 421 thousand and 522. The Index of Top-20 JSCs was 15,769.57, decreasing by MNT 149.23 or 0.94% against the previous day.

Link to article


MSE Weekly Review: Top 20 -2.07%, Turnover 179.3 Million

Ulaanbaatar, January 12 /MONTSAME/ Five stock trades were held at Mongolia's Stock Exchange January 6-10 of 2014.

In overall, 150 thousand and 941 shares were sold of 56 joint-stock companies totaling MNT 179 million 276 thousand and 674.30.

"Khokh gan" /44 thousand and 896 units/, "Remikon" /39 thousand and 054 units/, "Genco tour bureau" /14 thousand and 287 units/, "APU" /13 thousand 268 units/ and "State Department Store" /6,022 units/ were the most actively traded in terms of trading volume, in terms of trading value--"APU" (MNT 54 million 181 thousand and 890), " Teever Darkhan" (MNT 27 million and 500 thousand), "Tavantolgoi" /MNT 20 million 069 thousand and 965/, "Shivee ovoo" /MNT eight million 321 thousand and 500/ and "Gutal" (MNT eight million 014 thousand and 400).

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BoM MNT Rates: January 13 Close

















































January MNT Chart:

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Total outstanding up 8.2% to 1.07 trillion

BoM issues 1-week bills

January 13 (Bank of Mongolia) BoM issues 1 week bills worth MNT 348.5 billion at a weighted interest rate of 10.5 percent per annum /For previous auctions click here/

Link to release


Mongolia Export Income Falls 2.6% in 2013 as Coal Sales Slump

By Michael Kohn

January 13 (Bloomberg) Mongolia's export income slipped 2.6 percent last year amid a decline in shipments of coal, the nation's biggest earner.

Earnings were $4.27 billion in 2013, compared with $4.38 billion a year earlier, the National Statistics Office said on its website. Coal shipments declined 41 percent by value.

The slump in earnings underscores the challenges facing Mongolia as economic growth cools, foreign investment declines and the nation's mineral boom slows amid protracted disputes with key investors. China accounted for 87 percent of exports last year by value, today's data showed.

Coal exports fell to $1.12 billion last year, from $1.9 billion a year earlier, the agency said today. Volumes fell to 18.3 million metric tons, from 20.9 million tons.

Copper concentrate shipments, the nation's second-biggest earner, rose 13 percent to $949 million, boosted by the start of shipments from Rio Tinto Group's Oyu Tolgoi mine. Exports of the concentrate by volume rose 13 percent to 649,800 tons.

Sales to China fell to $3.7 billion last year, from $4.06 billion a year earlier, the data showed.

Link to article


NSO 2013 Preliminary Statistics: CPI +12.5%, M2 +24.1%, NPLs at 5.26%, +91.8% to Year on Year

January 13 (NSO) --

I. Social indicators  

As of the preliminary result of 2013, the population of Mongolia was 2931.3 thousand, of which the resident population in Mongolia was 2824.2 thousand and increased by 63.6 thousand or 2.3 percent compared with the 2012 year.

In 2013, 79371 mothers delivered 79780 children (live births) increased by 4897 mothers or 6.6 percent and 5002 children or 6.7 percent, compared to the previous year.

In 2013, at the national level infant mortality increased by 23 or 2.0 percent to 1166 and child mortality aged 1-5 increased by 42 or 3.0 percent to 1438.

The number of unemployed reached 42.8 thousand at the end of December 2013, reflecting an decrease of 7.0 thous.persons or 19.6 percent compared to the same period of the previous year.

As of the beginning of 2013/2014 academic year, number of students and pupils in all levels of educational institutions reached 907.6 thous.persons, increased by 9.7 thous.persons or 1.1 percent compared to the previous year.

In the 2012/2013 academic year, 149.6 thous.students and pupils graduated all levels of educational institutions, of which 89.0 thous.pupils graduated general education schools (48.6 thous.pupils 9th grade, 40.4 thous.pupils 11th grade), 23.4 thous.students graduated technical and vocational schools, 37.2 thous.students graduated universities, higher educational institutions and colleges.

In 2013, revenue of social insurance fund 1267.2 bln.tog, expenditure 1054.2 bln.tog, showing an increase 160.3 bln.tog or 14.5 percent in revenue, 110.8 bln.tog or 11.7 percent in expenditure compared to same period of the previous year.

In 2013, social welfare fund 198.6 thous.persons 141.9 bln.tog granted pensions, showing in increase 16.2 thous.persons or 8.9 percent in number of persons received social welfare pensions and allowances, 30.5 bln.tog or 27.4 percent in social welfare pensions and allowances compared to the previous year.

In 2013, a total of 229.0 bln.tog distributed for 960.3 thousand children ages below 18 by the Human Development Fund for children. For the 21 thous.tog cash allowances to allocated from The Human Development fund paid 264.8 thous.persons a total 23.8 bln.tog. For the one mln.tog cash allowances to allocated from The Human Development fund for elderly and disabled of 5.5 thous.persons, the fund paid a total 4.3 bln.tog.

In 2013, the total number of infectious disease cases reached 37320, decrease by 5985 cases or 13.8 percent compared to the previous year.

The decrease in the number of infectious disease cases was mainly due to the decrease of 4319 or 63.0 percent in viral hepatitis, 3792 or 41.9 percent in mumps although there were increase of 1863 or 66.4 percent in varicella and 1292 or 26.1 percent in syphilis.

At national level, there were registered 25362 crimes in 2013. It is an increase by 3273 or 14.8 percent compared to the previous year. The number of convicted crimes has mainly growth due to the increase of the crime against the right of ownership (2095), crime against human life and health (or physical well-being) (1001) compared to the previous year.

As a result of the crimes 9797 have injured and 949 have died. The number of injured has increased up by 1361 or 16.1 percent and the death cases has increased by 48 persons or 5.3 percent compared to the previous year.

II. Macroeconomic indicators

The national consumer price index in December 2013, has increased by 1.3 percent compared to the previous month and 12.5 percent compared to the previous year. The annual average inflation rate was 10.5 percent.

The increase in national index in December 2013, has increased by 1.3 percent compared to the previous month. It was mainly due to 2.1 percent increases in food and non-alcoholic beverages, 2.2 percent clothing, footwear and cloth, 2.1 percent alcoholic beverages, tobacco.

According to the report of the Bank of Mongolia, money supply (broad money or M2) at the end of December 2013, has reached 9451.0 bln.tog, reflecting an increase of 342.3 bln.tog or 3.8 percent compared to the previous month and 1833.7 bln.tog or 24.1 percent compared to the previous year.

At the end of December 2013, issued currency in circulation has reached 841.1 bln.tog. This is an increase by 37.2 bln.tog or 4.6 percent compared to the previous month and 12.7 bln.tog or 1.5 percent compared to the previous year.

Loans outstanding at the end of December 2013, have amounted to 10769.3 bln.tog, down by 53.1 bln.tog or 0.5 percent compared to the previous month and increased by 3778.8 bln.tog or 54.1 percent compared to same period of the previous year.

Principals in arrears at the end of December 2013, has reached 118.2 bln.tog, decreased by 42.9 bln.tog or 26.6 percent compared to the previous month and increased by 7.6 bln.tog or 6.9 percent compared to the previous year.

At the end of December 2013, the non-performing loans over the bank system reached 566.0 bln.tog, showing a decrease of 6.5 bln.tog or 1.1 percent compared to the previous month and increased by 270.9 bln.tog or 91.8 percent compared the previous year.

In 2013, securities trading the 66.1 тln.shares valued at 399.1 bln.tog were traded. The Securities trading was increased by 254.1 bln.tog or 2.8 times and shares decreased by 67.7 mln.shares or 50.6 percent compared to the previous year.

As of the preliminary result of 2013, total equilibrated revenue and grants of the General Government Budget amounted to 5880.7 bln.tog and total expenditure and net lending amounted to 6178.0 bln.tog, representing deficit of 297.3 bln.tog in the equilibrated balance of General Government Budget.

As of the preliminary result of 2013, current revenue of the General Government Budget amounted to 5879.0 bln.tog and current expenditure reached 4559.3 bln.tog. Thus, the budget equilibrated current balance was in surplus of 1319.7 bln.tog.

Compared to the previous year, tax revenue has expanded by 878.0 bln.tog or 21.0 percent. The increase was mainly due to the increases of 276.2 bln.tog or 16.8 percent in taxes on goods and services, 236.8 bln.tog or 27.2 percent in income tax 210.7 bln.tog or 32.4 percent in social security contribution.

Compared to the previous year, non-tax revenue has increased by 173.0 bln.tog or 26.7 percent. The increase was mainly due to the increases of 106.3 bln.tog or 2.3 percent in interest and fines, 79.3 bln.tog or 73.1 percent in revenues from oil petroleum, 43.0 bln.tog or 23.4 percent in revenues from budjet entities and 24.7 bln.tog or 64.0 percent in navigation fee although there was decreases of 67.6 bln.tog or 43.5 percent in revenues from dividends, 9.6 bln.tog or 12.7 percent in revenues from others.

As of the preliminary result of 2013, total expenditure and net lending of the General Government Budget has increased by 184.2 bln.tog or 3.1 percent to 6178.0 bln.tog compared to same period of the previus year. This was mainly due to increases of 341.2 bln.tog or 16.6 percent in expenditure of goods and services, 144.6 bln.tog or 2.1 times in interest payments, 107.0 bln.tog or 2.7 times in lending minus repayments although there was a decrease of 330.5 bln.tog or 14.8 percent in subsidies and transfers, 78.0 bln.tog or 5.1 percent in capital expenditure.

As of the preliminary result of 2013, Mongolia trade relations with 135 countries from all over the world. The total external trade turnover reached 10627.4 mln.US dollars, of which exports made up 4272.7 mln.US dollars and imports made up 6354.7 mln.US dollars.

Total external trade turnover decreased by 495.7 mln.US dollars or 4.5 percent, of which exports reduced by 112.0 mln.US dollars or 2.6 percent and imports down by 383.7 mln.US dollars or 5.7 percent, compared to the previous year.  

Mineral products, textile articles accounted, natural or cultured stones, precious metal, jewelry, coins, raw & processed hides, skins, fur & articles, animal origin products for 96.5 percent of the total export value amount.

III. Economic sector indicators

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Cabinet Backs President's "Glass Account" Bill

Ulaanbaatar, January 12 /MONTSAME/ The cabinet meeting Saturday discussed and then backed in principle a draft law on so-called glass account.

The enriched with the cabinet's opinions draft will be passed to the President, its initiator.

The latter said he wants to improve a procedure of reporting budget income and expenditure, credit and debt guarantees, also to refine activities of related officials and a monitoring. The draft will also help expand the people's knowledge about budget and ensure a civil participation in the budgetary actions.  

Link to article


Cabinet Meeting Resolutions in Brief: January 11, 2014

January 13 / The regular Cabinet meeting of the Government was held on Saturday, January 11, where over 30 issues were discussed and the following were resolved.

- In order to strengthen research work for earthquake disaster mitigation, study seismically active zones and to determine the damage and influence that would be caused by a future earthquake, a station with permanent operation will be established in Bogd Sum of Bayankhongor Aimag, Mandalgovi Sum of Dundgovi Aimag and Sukhbaatar Sum of Selenge Aimag respectively;

- It was agreed to submit a loan agreement of Optimization Project for assistance for the Ulaanbaatar Thermal Power Plant No.4 established between the Government of Mongolia and JICA to the State Great Khural (Parliament) for approval;

- An Acting Director for General Agency for Specialized Inspection, Mr. D.Gunibazar was released from his post and succeeded by Dashdorj BATMUNKH, who used to serve as Director of Secretariat of the Agency;

- The intergovernmental agreement on "Exchange Program for Culture, Education and Science" established between Mongolia and the Republic of Turkey in Ulaanbaatar in April 2013 was approved;

- Some award-winning 53 herdsmen were recognized with "State Outstanding Herder", 1 entity with "State Frontier Farmer", 9 entities with "State Frontier Agriculturist Collective" and 15 individuals with "State Frontier Agriculturists", who contributed greatly to development of relevant sectors;

- The state-owned "Ulaanbaatar Auto Road Maintenance" (UARM) JSC was decided to divide into "Bayanchandmani UARM"JSC under authorization of Bayanchandmani Sum of TuvAimag and "Nalaikh UARM" JSC in Nailaikh District of Ulaanbaatar.

Also, a tender to establish such companies will be announced in Dundgovi, Umnugovi, Bayan-Ulgii and Dornogovi (Zamyn-Uud Sum) Aimags. 

Link to article


Cabinet Meeting in BriefMontsame, January 12


Cabinet Enlists Local Governments' Support for 2014 Action Plan

January 13 / On January 09-11, 2014, a three-day seminar among Mayor of Ulaanbaatar, Head of the Capital City Citizens' Representative Khural (City Council) and Governors of all 21 Aimags was held, where speeches were delivered by President Ts.Elbegdorj, Prime Minister N.Altankhuyag, Speaker of the Parliament Z.Enkhbold and Deputy Prime Minister D.Terbishdagva by introducing Government's Policy and programs to implement by Ministries.

On the last of the seminar, Ministers of the Government have established an Agreement of Partnership with Governors of Capital City and Aimags to co-implement tasks and plans promoted by the New Government for Changes for 2014.

Moreover, Governors' responsibilities and duties were reflected in the scope of the Agreement and other issues such as Law on Budget were also included. 

Link to article


Ministers Conclude Cooperation Pacts with Province GovernorsMontsame, January 13


Mongolia Celebrates Its Democracy with 22nd Anniversary of Constitution

January 13 / Today Mongolia marks the 22nd anniversary of the adoption of the 1992 Democratic Constitution. The Government, Parliament Members and Constitutional law makers are expected to show their respects to the Chinggis Khaan monument today at 11:40 am in celebration of Constitution Day. 

An exhibition dedicated to Constitution Day, the "State symbol of Mongolia", will be opened with a ceremony at the historical development hall of Mongolian Parliament at 12:00 noon today. Officials of the Mongolian Parliament are expected to receive the former members of the Mongolian Parliament, known during the time of the formation of the constitution as the People`s Great Khural, in hall A of Government House at 1:00 pm. 

Speeches on the idea of the Constitution and its historical significance by scholars and fellows will be aired live on MNB, TV-5 and UBS channels. There will also be a documentary on the Constitution shown to the public according to the Press and Public Communication Division of the Secretariat of the Parliament of Mongolia. 

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USB Charger Solves Mongolia Electricity Problem

January 11 (Hack a Day) People living in remote areas of Mongolia do not have access to electricity or gas, and rely on traditional wood stoves for their homes, which are used almost all the time. Many use solar panels to generate some electricity for small tools, but unfortunately there are often times when it is cloudy for days on end. [Chingun Has] saw this problem and created his own clever solution — a small thermoelectric USB charger.

[Chingun's] device features an array of peltier plates inside of an aluminum shroud. The device is designed to sit on top of a stove, or to be strapped onto a stove pipe. When there is a large enough temperature differential between the two sides of a peltier plate, a charge is induced. He's using a small fan to help cool the other side of the peltier plates. A small control box houses a voltage regulator circuit that provides 5V over USB.

The cool thing about this project is that it is partially the result of [Tony Kim], an MIT professor who traveled to Mongolia to teach students an edX circuits course about a year ago. [Chingun] was one of his students, and this is a great example of a solution to a real-world problem.

An excellent video after the break gives a complete explanation of the project, as detailed by [Chingun] himself — it's well worth the watch!


Link to article


Oriental Brewery's Diverse Beers Help Top Mongolia and Hong Kong Markets

January 12 (WSJ) South Korea is known for Samsung Electronics Co.'s cellphone exports and even consumer electronics, but its no. 1 brewer, Oriental Brewery Co., is also one of its top exports. That should cheer private equity firm owner Kohlberg Kravis Roberts & Co., which bought what was then Korea's second biggest brewer from Anheuser-Busch InBev in 2009.

KKR, which bought Oriental Brewery for $1.8 billion in Asia's largest leveraged buyout since the financial crisis, hasn't disclosed when it's planning to put the brewer on the market. ABInbev has until the middle of this year to buy back the stake from KKR.

The maker of Korea's best-selling Cass brand of beer, OB, as it's known domestically, chalked up $63.3 million of exports in the first half of 2013, the latest available data from Korea Customs Office and Korea International Trade Association shows.

Some of those sales are for third parties like Blue Girl, which OB says is Hong Kong's top beer and sells 38.8% of the city's beer by price. OB's Cass Red is also Mongolia's top beer in terms of revenue.

The brewery is also the maker of Budweiser beer for consumption within Korea, and the only maker of Hoegaarden in the world except for the brand's home Belgium, OB said (Mogi: guess we now know where the Hoegaardens in Mongolia are coming from). The brewer's net profit rose to $251 million on sales of $1.2 billion in 2012 compared with $107 million in net profit on $721 million in sales in 2011.

OB says the diverse kinds of beers it makes have helped it top Mongolia and Hong Kong's markets.

Cass Red, a relatively strong  beer, is a good example. It was first introduced in Korea as OB sought to meet growing demand for what Koreans call a bomb-shot, or a mixture of beer and soju, but it was not very successful. Instead, it was a hit in Mongolia.

"Korea has a very unique drinking culture in many ways. With Cass Red, you don't need to make your own bomb shots, but we found out later that the ritual–the behavior of making them–was also very important to Koreans. Cass Red hit the Mongolian market instead as people there need stronger beer to protect themselves from the cold," Alex Song, OB's chief marketing officer said (Mogi: ummm, I would say it sells good here because it gets you drunk cheaper and faster than regular beer).

Link to article


Sowing a great business future


January 12 (UB Post) Solongo is a 27 year-old farmer who lives in Eruu soum of Selenge Province, located 311 km from Ulaanbaatar. Every province is divided into at least 17 areas, each called a soum. She found a new business idea when she noticed that there were no turnips on the shelves of shops. She decided to plant turnip, and harvested and sold it to local shoppers. She earned two million tugrik within four months.

The average monthly salary is around 300.000 MNT in this soum. Soon every neighbor copied her idea, and suddenly everybody started to plant turnips, driving their prices down. It was plain to see that the population of over 5,000 was already supplied with enough turnips and they were now available everywhere. Nobody wanted to pay premium prices for turnips.

It reflects the current situation in the Mongolian business environment. Some surveys show that after the establishment of a new business idea, one out of three companies close down within six months.

Solongo hated that others were destroying her business opportunity, and as she watched television news pieces and listened carefully, she learned about an open discussion to introduce a draft bill on supporting industrialization held at the Civil Hall of the President of Mongolia on Monday. The draft bill aims to stop the export of raw materials and instead export recycled products. The Advisor to the President of Mongolia, L. Erkhembayar, also announced that the draft bill included ideas to better support export oriented industry, to grant loans to companies investing in their operations, growing their number of employees and encouraging sustainable operation.

Solongo is finding another chance to operate a business and make money. She is collecting information since her turnip business failed. One thing is certain, Mongolians are changing their status from being only consumers to becoming producers. The President announced earlier this year, that Mongolia has counted 45 million heads of livestock, but still imports 74 percent of its consumer dairy products, 41 percent of its flour products, and 62 percent of its ready-made garments. Solongo knows this is true: all of her makeup is made in Korea, the candy from Russia, imported bananas come from the Philippines, and soap from China.

Mongolia's main export commodities in 2013 were copper concentrates (25.9 percent), coal (35.7 percent), iron ore (9.2 percent), crude oil (5.5 percent), raw cashmere (5.2 percent), zinc ore concentrates (4.1 percent), gold (three percent), fluorspar ore concentrates (two percent), molybdenum ore concentrates (1.3 percent), and other miscellaneous exports (6.9 percent). Mongolia's imports are dominated by mineral products (most of which are oil products), machinery and equipment, as well as transport vehicles.

The government has announced that it will spend one trillion MNT on the domestic manufacturing sector. The Prime Minister said, "Economic growth is higher but we still supply our total consumers by importing 88 percent [of goods], and domestic manufacturers supply only 12 percent."

She is thinking about her third business idea. Why the third idea? Before planting turnips, she was living in Ulaanbaatar when she was 18 years old. She was trying to develop a ready-made garment business when the European Union introduced the Generalized System of Preferences (GSP) in 1999, a general preferential market access scheme aimed at providing developing countries with an added advantage on its markets. Mongolia had a chance to export ready-made garments with tariff free conditions. Following this resolution, a lot of Chinese businesses established manufacturing and produced and exported products to the EU that were labeled as made in Mongolia. Her first business failed and she developed a fear of doing business in the city. Of course, all her money was gone and she went to Selenge Province, where some of her relatives lived.

Current status of the GSP+ in Mongolia

Since 2006, Mongolia has been eligible for the GSP+. This is to say that practically all Mongolian export products are granted tariff-free access to the EU, thanks to GSP+. GSP+ covers around 7,200 products, including pigeons, donkeys and leather made products, internal organs of livestock, and other raw materials. The trade of cashmere and cashmere products have benefited the most from the GSP+ scheme and the European Commission has encouraged Mongolia to make efforts to enhance its utilization of GSP+ in the future, and to diversify the base of products it exports.

Mongolians exported some leather-made products but they did not produce sufficient quantities due to a lack of labor and financial resources.

Solongo has brought her business plan to the Support Center for Small and Medium Sized Business in Sukhbaatar District. Every district has its own center for receiving business projects. According to the Law On Supporting Micro, Small and Medium Sized Enterprises, qualified people can borrow money at eight to nine percent interest rates for one year. The program is funded by the government budget. One thing that is important to these potential borrowers is the quality of their business plan. Currently, Samurai Bond investment has flown into Mongolian banks, an amount of 290 million USD. A percentage of these funds will be spent on providing more support to export-oriented industry than last year. Perhaps Solongo has another chance at success.

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Amgalan Thermal Plant Construction to Finish in Late 2014

Ulaanbaatar, January 13 /MONTSAME/ Meeting with the provinces governors, the Energy Minister Sonompil last Friday briefed on continuing and soon-to-come energy projects all across the country.

In 2013, Mongolia launched several major projects that include extension of the capital city's thermal stations and building of the Amgalan thermal station in eastern Ulaanbaatar. These projects are expected to end by late 2014, said Mr Sonompil.

"This year, the Government is planning to launch many large-scale projects including the Tavantolgoi power plant and a fifth power station in Ulaanbaatar." he added.  

The first ever renewable energy plant has recently come into service in Tov province, while residents of 105 soums have been provided with electricity after an assembly of 1,100 km electric lines all across the country in 2013, the Minister noted.

"This year, the Government will also build thermal stations in eight provinces, and hot water distribution systems in 330 soums".

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This Year's Winter Isn't 'Ulaanbaatar Cold'

By Brian White

January 13 (The Mongolist) This is my eighth winter in Mongolia and fourth in Ulaanbaatar. When it comes to cold weather, Ulaanbaatar is one of the coldest places in Mongolia. It is also by far the coldest capital in the world (see here). But, this year it has felt relatively warm in comparison to previous winters. Don't get me wrong. It's still colder than most of humanity could or would want to endure, but it doesn't feel "Ulaanbaatar cold" this year. As usual, instead of just expressing my feelings, I decided to investigate the numbers.

The graph above shows daily maximum and minimum temperature readings in Ulaanbaatar courtesy of the website "Weather Underground." The average maximum and minimum temperatures for each day are also plotted. The graph clearly shows that from November 1, 2013 to January 10, 2014, maximum daily temperatures have been mostly above average and minimum temperatures have been oscillating around the average.

By way of comparison, I also plotted the maximum and minimum temperature data over the same period during my first winter in Mongolia twelve years ago in the graph directly below. That was a winter of mostly below average maximum and minimum temperatures. In fact, the temperature was not over freezing the whole period and rarely went above -10C.

The difference in the two winters is even more stark when you compare them further as I have in Table 1. In every way the winter of 2002-03 was colder than this winter.

Table 1. Summary Statistics over 71 Days of Winter (November 1 - January 10)




Maximum Temperature



Minimum Temperature



Days above Average Maximum Temperature



Days below Average Minimum Temperature



Days at or below -40C



Days at or below -38C



Days at or below -30C



The take away of this post should not be that this is proof of global warming1 but rather a simpler message: This year is above average in temperature in Ulaanbaatar. If this is your first winter in Mongolia and you're thinking, "This ain't so bad," unfortunately you still have not seen the worst Ulaanbaatar can throw at you. You'll have to stay on another winter to have a shot at being a true "Ulaanbaatar cold" survivor.


1. Full disclosure: I think available scientific evidence supports the theory of Global Warming and man-made climate change even if this post is not intended as further evidence of the theory.

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Mogi: pretty long stay don't you think? Plus no agenda seems to have been announced.

FM to Visit China

Ulaanbaatar, January 13 /MONTSAME/ The Minister of Foreign Affairs of Mongolia Mr L.Bold will pay an official visit to the People's Republic of China (PRC) on January 16-21 of 2014.

About reported the Ministry's media service Monday.

Our Minister has been invited by his Chinese counterpart Mr Wang Yi.  

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Serbia and Mongolia finalize agreement to abolish visas for their citizens

January 13 ( Serbia adopts the Bill on ratification of the Agreement between the governments of Serbia and Mongolia on the abolition of visas for citizens of the two countries.

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Mongolian student's death in Malaysia linked to sex slavery

KUALA LUMPUR, Jan 14 (The Malay Mail Online) Police have stumbled onto an alleged sex trafficking ring following investigations into the recent death of a Mongolian student.

Enkhtuya Bayar Magnai, 26, was found hanged near a wet market in Behrang, near here, on November 12 with fresh cut wounds on her hands and thighs. However, Tanjung Malim police chief Supt Othman Nayan (pic) said there was no foul play.

He said the element of human trafficking emerged after Mongolian police alerted Interpol to the possibility of Enkhtuya being held by a human trafficking gang.

In an email to Tanjung Malim police on December 30, Interpol referred distressing messages from Enkhtuya to her brother in Mongolia days before she was found dead.

The brother then sent the messages — in one of which Enkhtuya said she was "being sold" — to the National Central Bureau (NCB) in Ulan Bator. 

"We discovered that she was working in a massage parlour in Bukit Bintang, Kuala Lumpur, and never attended a single class at her college," Othman told The Malay Mail yesterday.

He said the matter was handed over to Bukit Aman following allegations of human trafficking.

Othman said the Mongolian police revealed Enkhtuya had first sent a Facebook message to her brother on November 5, claiming two other female Mongolian students had tricked her into believing they could obtain documents for her to stay in Malaysia.

She related she was then "sold" but did not identify to whom.

Two days before she died, she sent a text message to her brother that read: "I am dead ... I am at Sentral Pudu, someone trying to sell me."

Othman said that according to the National Central Bureau, the family strongly believes Enkhtuya was a victim of human trafficking.

Police are tracing her phone records to ascertain who she had been in contact with during her stay here.

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Social, Environmental and Other

Mongolian Camel festival in pictures

January 13 (The Guardian) The Thousand Camel festival, held in the Gobi desert, is a celebration of the endangered Bactrian camel and the role it plays in the lives of the Gobi's nomads. Camel races and polo competitions, as well as performances of traditional Mongolian music and dance, are among the highlights of this annual event

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D. Altankhuyag: Mongolia's primo ballerino

January 12 (UB Post) We were sitting in the ballet rehearsal room at the Opera House with our overcoats, observing the daily rehearsal of Mongolian ballerinas. If it were somebody else with their outer clothes in this strict rehearsal room, they would have been chased out immediately. Yet, it was filled with love, respect and reverence. In the studio, everyone was delighted at the news that D.Altankhuyag, one of the world's top ballerinos, was returning to the theater. The theater's atmosphere was thick with admiration by his fellow performers and the audience.

Ticket's for Altankhuyag's latest performance, "Swan Lake," which started Sunday, were sold out immediately after it was announced.

Just before the new show, we've had the chance to interview Altankhuyag, one of the world's top eightballerinos, principal dancer for the Boston Ballet Company in the USA and State Academic Theater of Opera and Dance of Mongolia. 

-It appears that "Swan Lake" is going to be a wonderful show and tickets have already sold out. What other projects will you be doing in Mongolia?

-I came back to take part in one of the State Academic Theatre of Opera and Dance's regular ballet performances which takes place almost every week. I will be the protagonist of this (last) Sunday's performance.

-How often do you come to Mongolia?

-I return to Mongolia twice a year. Once during this time of the year, in winter, and once during summer.

-Recently, a member of Mongolia's ballet family was awarded a State Honor.

-(Laughs) Yes, are you talking about my classmate?

-It's rumored that you returned to congratulate your friend and celebrated dancer, Ch.Ganchimeg. Is it true?

-Of course it's true.  You can could say that. Ganchimeg and I have been dancing together since we were little. Just like the old Mongolian saying, she's my "right hand" partner. We have danced together not only at the Music and Dance College but also at the State Academic Theater of Opera and Dance after graduating. During our sophomore year at the Music and Dance College, we performed the protagonists of "Blue-eyed Lady" on the stage of the State Academic Theater of Opera and Dance. We were elated to have been able to perform on the stage of the State Academic Theatre of Opera and Dance as it was a huge event at the time, and we were only in our second year at school. She continued to be my dance partner even after becoming a member of the theater, after graduation.

You might remember the big collaboration held on June, 2012 by Mongolian ballet dancers living abroad. At that event, we also performed a pas de deux. We were short on time and could hardly rehearse for the performance, but on stage, all those years of working together could be felt. For a ballerino, this enervation could only be felt from a right hand partner; she is definitely a golden partner to me. Therefore, I am absolutely delighted for her and I have to say that she is a ballerina worthy of the honor.

-When did you first hear that your right hand partner received the honor and how did you congratulate her?

-I have just arrived so I still haven't met her in person. I also have to rehearse for the "Swan Lake" performance. But I will certainly congratulate Ganaa for her success. As soon as I see her, I'm going to swing her into my arms and congratulate her. (Laughs). From the professional's view, Ganaa is an exceptional actress-ballerina. Nonetheless, you need to thoroughly understand that ballet is an art for young people. On stage, you must only show beauty and youthful energy, therefore, a ballerina's effort should be credited soon as it does not last long.

Ballet is an art similar to sport where you must avoid injuries as much as possible. Along these lines, it's one of the arts that require acute sensitivity. Thus, it is almost impossible not to love and revere ballerinas.

-You have just said that ballet is an art for young people. In some ways, ballet strikes me as a cruel art where it demands one to outshine others through one's unique abilities within a time-limit of 20 years.

-That's correct. There's a lot of competition and it is evidently shown on stage. While audiences perceive the overall performance, professionals on the other hand, analyse every technique and move performed by a ballerina.

-Have you ever talked about your unrehearsed performance with Ch.Ganchimeg in an interview?

-Yes, I have. Apart from that particular role, I had many other projects at hand at the time. Though, this how it is in almost every one of my performances.

There is a policy for us ballet dancers to rehearse for the role before going onstage and to practice every single day. When performing a pas de deux, it is of utmost importance that you rehearse in order to reduce tension. However, Ganaa and I performed intuitively and didn't feel a tension at all. With the experience collected from all those years of working together, we knew exactly how each of us would move and that performance was impeccable.

-What sort of training and roles have you taken up at the USA's Boston Ballet Company before coming back to Mongolia?

Before coming, I took on a role in the "Nutchracker" which is known by the name "Tsumuukhei" among Mongolian audiences. It's a play about a doll that cracks nuts. I have performed this piece for over 40 times.

-That's amazing, but did you play the same character over 40 times at the Boston Ballet Company?

-I have performed as all the characters. Everyday, I took on a different role. Unlike Mongolian theaters where you perform only one role, this way was more interesting and a new experience.

-There are some 30 ballet pieces in the National Inventory of the Academic Theater of Opera and Dance. Is there any you haven't performed thus far?

-I'm not sure. I'll have to see the list in person before I can answer. But I presume that I have performed most of the ballets recorded in the inventory. I probably have taken roles of every protagonist, antagonist and supporting roles of the plays stored in the inventory during my seven years. From 2000 to 2007, I have performed at the theatre, but I took a week off in-between plays to perform in foreign theaters.  Now it has reversed. I spend exactly a week in Mongolia, in between plays abroad.

-It is every Mongolian performer's dream to perform at the Bolshoi and La Scala Theaters but you have performed on both. Tell us about the experience?

-Yes. I have performed at the Bolshoi Theater three times. On my first time at the Bolshoi, I performed a play which is not well known among Mongolian audiences. It was a modern classical ballet peice. Subsequently, I participated in the Bolshoi Theater's Gala performance.

-It must have been thrilling to perform on a stage that is reserved exclusively for prestigious performers.

-Definitely, it was as if I was shoulder to shoulder with modern world classics.

-La Scala, is not only renowned in Italy but also worldwide. You are the first Mongolian to step onto the prestigious stage, can you tell us about the theater?

-Yes, La Scala is fabulous. There's no need for further clarification after hearing its history.  Now thinking back about the experience, La Scala is the best ballet theaters since ballet originated from Italy.

-Did you ever get a stage fright before going on the massive, reputable stage?

-Not really. La Scala is a world-renowned opera house and is an absolutely phenomenal theater – the definition of true elegance. However, for me, every stage is the same. The stage itself may be different in size, but a stage is a stage. In fact, as if it were my home country, the stage of La Scala felt surprisingly familiar. The front and back entrance gave a nostalgic feeling. But obviously, the structure was different.

-You gave an exotic performance at the National Naadam Festival's opening concert in 2010. After listening to "Salkhit Shuvuu" (Birds of Wind), composed by Z. Khangal and directed by N.Tuulaikhuu, you were able to choreograph your part within a day. Was there something special in the brilliant composition that captivated you to choreograph your entire part within a day?

-It's an absolutely wonderful piece of composition. I like it very much. I choreographed it with the intention of not just to perform the play, but to show how Mongolians were able to go wherever they desired just like a bird of wind in the past, through my performance on stage.

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N.Ashid: Throat singing, horse-headed fiddle is close to becoming one of the world's classical arts

Translated by U.ARIUNJARGAL

January 7 (UB Post) Since ancient times, Mongolian culture has embraced the arts of singing and performing. The ways of our ancestors are steadily gaining popularity among world arts circles. A range of Mongolian culture heritages, especially those related to art have been listed at the UNESCO Cultural Heritage Lists, such as the national instrument, morin khuur or horse headed fiddle, and khuumii or throat singing. The recognition of world organizations such as UNESCO is significant to Mongolian arts.

The following is an interview with N.Ashid, a horse-headed fiddle player for the Morin Khuur Ensemble, who is gaining popularity on national stages as well as the world stage, about his upcoming concert and projects.

He has performed on many prestigious world stages, such as the Carnegie Concert Hall of the USA, Bolshoi Theater of Russia, and at the UNESCO and UN headquarters. N.Ashig is planning to perform his third independent concert, the Mongolian Throat Song and Chorus, at the State Academic Theater of Drama and Opera on January 23.

-Most throat singers don't perform independent concerts. Your performances are usually done with horse headed fiddle, to the delight of your fans. What kind of musical pieces and song will you perform at the concert?

-I'm planning to perform mostly new songs and pieces, except for the throat song renditions of popular folk songs, and some performances dedicated to throat singing. Specifically, pieces by State Prized Composer E. Khangal, such as "Yamaanii Boodog " (Roast Goat Meat), two-time State Prized N. Jantsannorov's "Burkhan Khaldun" and "Ekh Nutag" (Motherland), and "Japan Melody" by a Japanese composer.

Furthermore, I will play State Honored   B. Munkhbold's part two and three of the "Concert Dedicated to Morin Khuur," and the solo part of the Steppe Melody's soundtrack, "Beautiful Nation of Mongolia" by E. Choidog. In my concert, soloist of Russian Nature Dance and Music Ensemble, People's Artist of Buryatia and flutist Battuvshin, and the conductor for the ensemble, as well as the composer, and other fine musician will perform. And also a priest from a Buryatian Evangeline Shool will make an appearance.

-There will be a priest?

-Yes. Throat singing is a unique art. It is related to Buddhism. When old people sing folk melodies, they tend to put a lot of pressure on their throats. Sometimes it almost sounds like throat singing. So, throat singing techniques are connected to the praying methods of monks. Some western countries have made new musical instrument sdesigned for their performances, but Mongolian throat singing and horse headed fiddle originated from our culture and heritage. Mongolia's ancient religion, shamanism, has some ceremonies and rituals that are similar to throat singing. This is because most people who live in the heart of Asia worshipped nature, and climbed high mountains to meditate, and perform rituals and sacrificial ceremonies. They first imitated the sounds produced by animals, which gave birth to throat singing.

-How many types of Mongolian throat singing are there?

-Researchers categorize throat singing in several methods. Some put it in 12 categories, and others in seven or nine. When my teacher, a popular throat singer, T.Ganbold performed in France in 1994, he mixed several throat songs, which later became the "Khuumiin Kholboo Ayalguu" (Chain of Throat Melodies). For me, there are four types of throat songs.

-Your teacher, D. Sundui, was born in Chandman soum of Khovd Province, right?

-Yes. My teacher is acknowledged by the people as the king of throat singing. He is the State Honored Artist, D. Sundui. He was born in Chandman soum of Khovd Province. Fortunately, I became a student right when he was in Ulaanbaatar. I graduated and joined the Morin Khuur Ensemble as a musician in 1999 and was taught by T. Ganbold. I am really proud to be taught by two great Mongolian throat singers. I want to master throat singing in its original form to preserve and teach it to the future generation.

-Why are throat singing concerts performed so rarely?

-Throat singing is a difficult art, also a whole concert comprised of throat songs is not comfortable for the audience. Therefore, I am mixing my concert with horse fiddle pieces.

 -Singers are classified as tenors or baritones. Do throat singers have such vocal classifications?

-Basically there are some differences. It depends on the singer's technique and vocal texture. Some singers are very talented in kharkhiraa khuumii (growling) or very good at isgeree khuumii (whistling). Some regions are very partial to isgeree khuumii sounds. Whistling sounds very pleasant. My teachers taught me isgeree khuumii. Also, I think it is interesting to combine isgeree with long songs. Long song singer such as G. Enkhbaatar, E. Bolormaa, and soloist of state opera and ballet theatre E. Gombo-Ochir do exactly that. I've invited them to my concert. State Honored Artist G.Ravdan will host my concert and perform his poem titled "Khuumii."

-How exactly does one perform khuumii? How is the art explained scientifically?

-J.Badraa defined throat singing very elegantly. He said it is the art of humming and whistling. This is a correct definition. Khuumii's melody comes from the throat and Adam's apple, which is layered with whistling sounds. All this sounds unrelated but can be done harmoniously. In throat singing, usually two or three different tones can be heard one or two octaves above the base sound. When performing khuumi, the abdomen is fairly relaxed, and there is less tension on the larynx than in other styles of throat singing. Pitch is controlled through a combination of movements of the lips, throat, tongue and jaw. Singing in this style gives the impression of wind swirling around rocks.

-Tell me a little bit about the horse-headed fiddle. Musicians say that the horse headed fiddle is alive. Is it true that the sound is unrecognizable after prolonged periods without it being played?

-That is true. The horse fiddle is a living instrument. It requires not only a good hearing but also a delicate touch by the fingers to be played properly. If I don't play for a week, I can't recognize the sound of my horse fiddle. If I play regularly, this doesn't happen. Some people even say that a horse fiddle will play itself if tuned properly.

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