Thursday, April 10, 2014

[Crossborder railway JV set up, IMF & World Bank raise 2014 forecasts, and OT delay credit negative for Mongolia says Moody's]

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Thursday, April 10, 2014

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Headlines in Italic are ones modified by Cover Mongolia from original


Overseas Market

MMC closed +2.86% to HK$0.72 Wednesday on the announcement. TRQ closed +6.51% Wednesday to US$3.60

Mongolia-China Consortium to Construct Cross-Border Coal Railway

By Michael Kohn

April 8 (Bloomberg) -- Gashuunsuukhait Railway JV set up yesterday in Ulaanbaatar as consortium of four companies to operate an 18km coal railway across Mongolian-Chinese border.

* To link Gants Mod in China and Gashuunsuukhait in Mongolia. Border is 260 kilometers southeast of Tavan Tolgoi coal basin.

* Shenhua Group Corp owns 49% of company. Other 51% owned by three Mongolian mining companies: Erdenes Tavan Tolgoi JSC, Mongolian Mining Corporation and Tavantolgoi JSC.

* Will cut transport costs from current per ton $8, according to Tsevegjav Saijrakh, Director of Infrastructure for Erdenes Tavan Tolgoi JSC. No details.

* Construction to start in May and will take one year to complete: Tsevegjav.

* Cost for railway and loading facilities approximately $200m, according to a pre-feasibility study: Tsevegjav, adding costs likely to change.

* Funding for railway will be 30% equity and 70% project financing: Tsevegjav.

(Bloomberg First Word)

Link to MMC release


Mongolia and China Agrees to Establish "Gashuun Sukhait Railway" Joint Venture

April 8 ( The Signing Ceremony to establish "Gashuun Sukhait Railway" joint venture company by "Erdenes Tavan Tolgoi" JSC, "Energy Resources" LLC, "Tavan Tolgoi" JSC representing Mongolia and China Shenhua Energy Company was held at "Elite" Center in Ulaanbaatar on April 07, 2014.

The newly to form company aims to increase Mongolia's coal export and enhance foreign trade turnover following the approval of the Government resolution issued on March 21, 2014 to connect Gashuun Sukhait port, Umnugovi Aimag, Mongolia and Gants Mod (Ganqimaodu), China with a narrow gauge railway.

The signing ceremony was attended by Executive Director of "Erdenes Tavan Tolgoi" JSC Ya.Batsuuri, Executive Director of "Energy Resources" LLC L.Batsengel, Executive Director of "Tavan Tolgoi" JSC R.Seddorj and Chairman of the Shenhua Overseas Development and Investment Co., Ltd Shao Junjie. 

Also witnessing the action, other authorities from both parties such as Mining Minister D.Gankhuyag, State Secretary at the Ministry of Mining R.Jigjid, State Secretary at the Ministry of Road and Transportation B.Batzaya and Executive Director of "Mongolian Railway" JSC P.Batsaikhan were representing the Government of Mongolia and China Government by Ambassador Extraordinary and Plenipotentiary of the PR of China to Mongolia Wang Xiaolong and Executive Director of China Shenhua Energy, Ling Wen.

According to document, Mongolian three companies shall own 51% of the joint venture and the rest 49% by China Shenhua Energy, simultaneously to invest and earn by share portions.

Under the management of "Gashuun Sukhait Railway" JSC, contracting companies will construct 18 km of railroad connecting Gashuun Sukhait and Gants Mod ports within 2014 and from 2015 will transport 24-27 million tons of coal to China annually. 

Following the ceremony Executive Director of Shenhua Energy, Ling Wen commented, "By accomplishing this railroad, it enables at least to reduce environment pollution, besides to save transportation costs. On other hand, Mongolia's coal will be exported to China and the third party for a long-term period. Shenhua will own 49% of the joint venture according Mongolian Law and however it seems a short railroad, but economic value is a lot".

Executive Director of "Erdenes Tavan Tolgoi" JSC Ya.Batsuuri added, "The total length of new railroad is 18 km, but to freight about 27 million tons of coal annually. Before, we used to transport via Tsagaan Khad and then to border by trucks that estimated 7-8 USD per ton, so from effectiveness of new transportation, it would cost only 2 USD per ton of coal, which means to save and earn more on coal export".

Executive Director of "Energy Resources" LLC L.Batsengel said, "Shenhua Company constructed 360 km of railroad from Gants Mod (Ganqimaodu) to Bugat (Baotou) and further responsible for freight transportation of 1,400 km to the seaport destination.

Moreover, the new railroad between Gashuun Sukhait and Gants Mod ports is very important by the means of converting into international standard ports".

Link to article


Joint Railway Company EstablishedMontsame, April 8

Gashuunsukhait railway company, April 8

Gashuun Sukhait Railway Company is, April 8


China's Shenhua to invest in cross-border rail link from Mongolia


April 9 (Reuters) - Shenhua Group, China's top coal producer, will form a joint venture with partners in Mongolia to build a cross-border rail link that will help ship coal to China, the company confirmed on Wednesday.

The deal marks a change in attitude in Mongolia, which has long sought to keep its powerful neighbour at arm's length amid fears about China's political and economic hegemony in the region. China buys more than 90 percent of Mongolia's exports and has sought big stakes in the country's strategic assets.

A signing ceremony for the new rail joint venture was held in the Mongolian capital of Ulan Bator on Monday. A spokesperson for the Chinese company, the parent of listed Shenhua Energy Group, confirmed the deal to Reuters on Wednesday.

The spokesperson said the final share structure for the joint venture has not been decided.

A Mongolian government official, however, told Reuters the Chinese firm will own 49 percent of the project, which will involve the construction of a 13-kilometre rail link from the Chinese border to a terminal where coal is delivered by trucks.

Yondon Manlaibayar, the director general of the department of railways at the Roads and Transportation Ministry, said a consortium of Mongolian firms, including state-owned miner Erdenes Tavan Tolgoi and the Hong Kong-listed Mongolian Mining Corporation, would share the remaining 51 percent.

Mongolia plans to spend $5.2 billion on the expansion and upgrade of its railway network, and last year hired Samsung C&T to lead construction of a 217-kilometre route south from the Ukhaa Khudag mine in the South Gobi region towards China.

A route to China would reduce the cost of shipping coal to customers in China - now largely done by road - and would also improve Mongolia's access to China's ports.

But an additional 27 kilometres of rail connecting the Shenhua line and Samsung C&T's line will be needed to complete the route. In the meantime, the temporary drop-off point will be established for trucks to deliver coal to the Shenhua joint venture rail to be carried into China, said Manlaibayar.

"They (the joint venture partners) don't want to wait for us to complete the whole line," said Manlaibayar.

Mongolian Prime Minister Norov Altankhuyag concluded a visit to China last October with an announcement that an agreement was made for the delivery of one billion tonnes of coal to Shenhua over the next 20 years.

The Shenhua joint venture project and the connecting 27 kilometres of line will be built using China's rail gauge, while the rest of the line uses the Russian standard, said Manlaibayar. A station for gauge transference will be built where the Samsung-led rail line ends, he said.

Mongolia's rail policy requires the use Russia's wider gauge standard, but some in the industry worry about the added costs of having to change standards at the end of the Samsung line.

Link to article


Credit Suisse upgrades Mongolian Mining to outperform but lowers target price to HK$1.1 from HK$1.2

[ET Net News Agency, 7 April 2014] Credit Suisse tweaked its target price for Mongolian Mining Corporation (MMC)(00975) to HK$1.1 from HK$1.2, but upgraded the stock to "outperform" from "neutral" based on a potential US$7/tonne cost cut from the cross-border rail by end 2014, amid a meaningful profit improvement versus current unit EBIT of only US$5/t in 2013-14.

The research house said MMC's FY2013 net loss expanded to US$58mn, or EPS US$0.016, is in line with consensus as miss in 4Q 2013 sales volumes and ASP was offset by lower cost mostly due to better yield and strip ratio in 2H 2013. 

At 0.6x P/B, the stock has mostly factored in the depressed coal prices and MMC's debt repayment pressure, Credit Suisse said. The house sees risk on the upside with improving earnings from cost saving, and better short-term liquidity post cash-in from selling paved road and postponing debt in 2014-15. 

Link to article


AKM closed +12.9% to A$0.035 Wednesday on the news

Aspire Mining to supply Ovoot coking coal to Sainshand Industrial Park

April 9 (Proactive Investors) Aspire Mining (ASX: AKM) should trade higher today after it signed an agreement with a Mongolian Government entity to supply future coal produced from the Ovoot Project in Mongolia to the Sainshand Industrial Complex.

Sainshand is the largest industrial development project in Mongolia.

The non binding agreement would see future potential supply of coking coal supplied to Sainshand which is located along the existing Trans-Mongolian Railway.

Importantly, the Ovoot Project is now recognised alongside the Tavan Tolgoi Coal operation as being a key supplier of raw materials to the Sainshand Park.

Blending studies completed by Aspire in 2013 have shown that Ovoot Project coking coal can add significant value to Tavan Tolgoi's low and non-coking.

The Sainshand Industrial Complex is a Mongolian Government entity established to oversee the development of the Sainshand Industrial Park, the largest industrial development project in Mongolia. 

Its infrastructure is intended to house both coke and steel plants, amongst other industries. 

Sainshand also is located along the existing Trans-Mongolian Railway with rail and road access to northeast China.

Sainshand Agreement

The agreement covers an intent by Sainshand Industrial Complex to enter into future purchase agreements for Ovoot Project coking coal and establishes a basis of information sharing prior to negotiation. 

In order to supply the Sainshand Park with Ovoot Project coking coal, the Erdenet – Ovoot Project Railway connecting to the Trans-Mongolian Railway will need to be completed.

Northern Railways, Aspire's Mongolian rail infrastructure subsidiary, has applied to the Mongolian Government for a rail concession over the Northern Rail Line.

The rail would unlock the significant monetary value of Aspire's Ovoot coking coal by allowing cost efficient transportation.

Sainshand Industrial Complex SOE

The Sainshand Industrial Complex SOE is a Mongolian Government entity established to oversee the development of the Sainshand Industrial Park, the largest industrial development project in Mongolia.

The Sainshand Park infrastructure has been designed by Fluor Corporation and it is intended to house both coke and steel plants, amongst other industries.

In order to supply the Sainshand Park with Ovoot Project coking coal, the Erdenet – Ovoot Project Railway connecting to the Trans-Mongolian Railway will need to be completed.

Ovoot Project

Ovoot has a Probable Ore Reserve of 255 million tonnes Run of Mine. It has Open Pit Resources of 253.1 million tonnes and underground resources of 27.9Mt.

Aspire has significantly progressed the project in recent months through:

-       Signing port access agreements to penetrate the lucrative European markets and expanding its access to North Asian markets;

-       Identifying a low capital development for the project by using contractors wherever possible for a 5 million tonne per annum initial project, reducing initial capital costs to US$144 million from the original US$459 million for a 6Mtpa Stage 1 plan;

-       Financing support with the receipt of non-binding letters of intent from Deutsche Bank and BHF Bank to provide US$40 million and US$50 million respectively in Export Credit Agency backed loans;

-       A US$20 million working capital facility made available to the company from Noble Group;

-       Interest from potential customers to acquire Ovoot Project coking coal; and

-       Studies confirming Ovoot Coking Coal has superior blend carrying capacity and can be blended with coal from the Government owned Tavan Tolgoi mine in southern Mongolia to upgrade the latter's coking coal properties.

Ovoot continues to draw interest - late last year, another two non-binding Memoranda of Understanding were signed with large Russian buyers for up to 1.3 million tonnes per annum of coking coal.

This brought the total coking coal under supply agreements to 6.9Mtpa, well above the 5Mtpa capacity under its low capital development option.

Interest followed recent negotiations between Mongolia, Russia and China to fund and construct upgrades to road, rail and pipeline infrastructure within Mongolia, creating a significant transit corridor between Russia and China.

Proposed changes include upgrading capacity along the Trans-Mongolian Railway to 100Mtpa.


The Sainshand Park future supply agreement to the largest industrial development project in Mongolia provides further evidence of the importance of Ovoot Coking Coal Project.

This is especially noteworthy given that only other project to be recognised as being a key supplier of raw materials to the Park is the Tavan Tolgoi Coal operation.

All this adds to the interest that Ovoot has received for its location between key markets as well as the superior blending properties of its coking coal, which is ranked as one of the highest quality in the world.

Blending studies completed by the Company in 2013 have shown that Ovoot Project coking coal can add significant value to Tavan Tolgoi's low and non-coking coals.

Link to article

Link to AKM release


Aspire Mining signs key power agreement for Ovoot Coking Coal Project

April 10 (Proactive Investors) Aspire Mining (ASX: AKM) has signed a non-binding Letter of Intent for the future supply of power to its wholly-owned Ovoot Coking Coal Project in Mongolia.

Access to power is critical to a mining operation, this is a significant plus for the project.

This follows yesterday's signing of an agreement with a Mongolian Government entity to supply coal produced from the project to the Sainshand Industrial Complex, Mongolia's largest industrial development.

The power agreement covers the supply of between 30 to 35 megawatts per annum of power supplied from the coal-fired Zavkhan Power Plant, which is expected to be commissioned in late 2015, to the project.

Zavkhan is located approximately 70 kilometres south of the Ovoot Project and is being constructed by New Asia Group LLC.

Electricity produced from the power plant will feed directly into the existing 110kv power grid that runs directly through the Ovoot Project licence area.

"The signing of this letter of intent for power supply highlights the ready accessibility of power to the Ovoot Coking Coal Project," Aspire managing director David Paull said.

"Access to sufficient quantities of power and water are essential to a successful coal mining operation. We are fortunate that both are readily available to the Ovoot Project."

Ovoot Project

Ovoot has a Probable Ore Reserve of 255 million tonnes Run of Mine. It has Open Pit Resources of 253.1 million tonnes and underground resources of 27.9Mt.

Aspire has significantly progressed the project in recent months through:

-       Signing port access agreements to penetrate the lucrative European markets and expanding its access to North Asian markets;

-       Identifying a low capital development for the project by using contractors wherever possible for a 5 million tonne per annum initial project, reducing initial capital costs to US$144 million from the original US$459 million for a 6Mtpa Stage 1 plan;

-       Financing support with the receipt of non-binding letters of intent from Deutsche Bank and BHF Bank to provide US$40 million and US$50 million respectively in Export Credit Agency backed loans;

-       A US$20 million working capital facility made available to the company from Noble Group;

-       Interest from potential customers to acquire Ovoot Project coking coal; and

-       Studies confirming Ovoot Coking Coal has superior blend carrying capacity and can be blended with coal from the Government owned Tavan Tolgoi mine in southern Mongolia to upgrade the latter's coking coal properties.

Ovoot continues to draw interest - late last year, another two non-binding Memoranda of Understanding were signed with large Russian buyers for up to 1.3 million tonnes per annum of coking coal.

This brought the total coking coal under supply agreements to 6.9Mtpa, well above the 5Mtpa capacity under its low capital development option.

Interest followed recent negotiations between Mongolia, Russia and China to fund and construct upgrades to road, rail and pipeline infrastructure within Mongolia, creating a significant transit corridor between Russia and China.

Proposed changes include upgrading capacity along the Trans-Mongolian Railway to 100Mtpa.


Aspire continues to progress its Ovoot Coking Coal Project with today's agreement that brings critical power to the project.

Yesterday's recognition as a key supplier of raw materials to the Mongolian Government owned Sainshand Park is surely building momentum for Ovoot as a key supplier of coal in the Mongolia.

This is further supported by Mongolia passing in late 2013 new legislation demonstrating its support for foreign investment.

Key price catalysts and milestones are significant and include:

-    The award of the Rail Concession in 2014;
-    Detailed Engineering Work & Environmental Impact Assessment in 2014;
-    Fund Raising in 2014; and
-    The start of construction in 2015.

Link to article

Link to AKM release


Auminco directors back Viking Ashanti offer

PERTH, April 9 ( – The directors of Mongolia-focused Auminco Mines have advised shareholders to accept the tabled offer from ASX-listed Viking Ashanti.

Viking initially offered Auminco shareholders about 129.7-million shares, which would have resulted in that company holding a 59% interest in the enlarged entity, with Viking's current shareholder base retaining a 41% interest.

However, the agreement was amended in December last year, and resulted in Viking proposing to acquire all Auminco's shares in return for 61.2 of its own shares, and 20.4 of its options, for every 100 Auminco shares held.

This meant that Viking would acquire Auminco in exchange for 81-million shares and 27-million unlisted options.

Auminco told its shareholders on Wednesday that accepting the offer would improve the company's liquidity, while a A$3-million capital raising to be conducted by Viking would assist in progressing Auminco's Berkh Uul coal project towards production.

Auminco's Mongolian projects include five coal projects and one zinc project. The company's flagship asset, the Khonkhor Zag metallurgical coal project, has been the focus of recent exploration, with a resource estimate expected in December.

The takeover offer was still subject to a number of conditions, including shareholder and regulatory approval, Viking Ashanti undertaking the proposed capital raising, and Viking Ashanti achieving a 90% acceptance of the offer.

Link to article

Link to Auminco Target's Statement

Link to Viking Bidder's Statement


Viking Ashanti to fast track Mongolian coal production within 12-18 months

Recommendation: Speculative Buy
Share price target: $0.085 to $0.165   
Sector: Materials
Share Price: 0.035
52 Week -: 
High: $0.055
Low: $.018
Ordinary Shares: $112.7M*
Options: 22.7M*
Cash: $0.89M
Market Cap: $3.9M
Enterprise Value: $3.01M

Post Auminco Merger
*Ordinary shares: 193.8M
*Options:    52.6M    

Major Shareholders pre merger
Resolute Mining: 28.1%
John & Janet Gardner: 8.4% 

Post Auminco Merger
Viking Ashanti shareholders: 53%
Auminco shareholders: 47%      

Board of Directors Post Merger
Chairman: Jack Gardner
Non-Executive Deputy Chairman: Andrew Whitten
Managing Director: Matt Morgan
Executive Director: Peter McMickan 

Viking Ashanti to fast track coal production in Mongolia within 12-18 months

-       Viking Ashanti Ltd (ASX: VKA) is moving closer to a friendly takeover of Auminco that could see the combined entity become a producer of thermal coal within the next 12 – 18 months. 

-       Auminco shareholders will emerge with a 47% stake in Viking, and play a major role in the evolution of Viking as a participant in the Mongolian thermal and coking coal markets. 

-       Auminco was established by founding shareholders and management of Coalworks Ltd which was sold to Whitehaven Coal (ASX: WHC) for ~$200 million in mid-2012. 

-       Viking's lead project, Berkh Uul is located in northern Mongolia next to a rail link that connects with Russian markets, and provides quick access to domestic power plants and industrial users at Darkhan and Ulaanbaatar.

-       Near term and low cost production is forecast from Berkh Uul with a JORC resource of 38.3 million tonnes of high quality, and low cost open pit unwashed bituminous coal.  

-       Development risk is considered lower than for most Mongolian coal companies as overall CAPEX for Berkh Uul is low by most standards; start-up mining rate will not be large, with flexibility to build over time with  simple and proven mining and processing technology, thus reducing funding and execution risk. 

-       In addition to an expanding domestic market, demand from coal hungry Russia and China is forecast to drive growth in the Mongolian coal market at an exponential rate.

-       Viking Ashanti provides an opportunity to acquire a company valued as an explorer before share price uplift to a producer.

-       Berkh Uul has potential to generate robust operating cash flows. A small scale conceptual mine may initially produce 500,000 -750,000 tonnes per annum of thermal coal, generating free cash flow of $3-$5 million. We have estimated a share price target of $0.085 to $0.165 within 12 months, with further upside as Berkh Uul moves to increased and value added production. Speculative Buy.

Link to article


PCY closed flat at 7.5c Wednesday

Prophecy Coal Corp. Announces Annual Results and Outlook for 2014

VANCOUVER, BRITISH COLUMBIA--(Marketwired - April 8, 2014) - Prophecy Coal Corp. ("Prophecy" or the "Company") (TSX:PCY)(OTCQX:PRPCF)(FRANKFURT:1P2) is pleased to announce its annual results for fiscal 2013 as disclosed in its annual Financial Statements and Management's Discussion and Analysis with the following highlights and outlook for 2014:

Ulan Ovoo

During the year, the Company sold approximately 125,000 tonnes of coal with total sales revenue of approximately of $3.3 million. In addition, the Company earned approximately $1.3 million in revenue from leasing and renting out its excess equipment and staff while mining operations were suspended during the year. As the Company is in the pre-commercial production stages, proceeds from the sale of coal are not recorded as revenue but rather are offset against capitalized deferred exploration costs.

Since resuming operations, the Company has estimated its average cash cost per tonne, including transportation and administration expenses at approximately US $29.50 per tonne and has experienced domestic average sales prices of approximately US $36 per tonne for coal with GCV greater than 5,000 kcal/kg. On the other hand, average sales prices for coal with GCV less than 5,000 kcal/kg was US $20.50 per tonne. However, approximately sixty percent of the Company's sales in 2013 consisted of sales of coal with GCV greater than 5,000 kcal/kg, of which approximately eighty percent was sold during the fourth quarter of 2013.

Furthermore, domestic market prices for coal with GCV greater than 5,000 kcal/kg range from US $30 to US $50 per tonne, dependent on quantity and point of delivery. In addition, the Company's neighbouring market in the Russian regions realize sales prices for coal with GCV of 4,500 kcal/kg to 5,000 kcal/kg ranging from 1,800 to 2,200 Roubles per tonne (US $50 to US $60 per tonne), dependant on point of delivery.


In 2014, the Company sold and successfully delivered a coal shipment from Sukhbaatar to a Russian customer. Management has also recently visited a number of Russian coal end users with the goal of establishing continuous shipments to Russia in 2014. The Zeltura Road feasibility study ("the feasibility study") concerning the road from the Ulaan Ovoo mine to the Zeltura border has just been completed ahead of schedule and the study is currently under management's review and will soon be submitted to the Mongolian Ministry of Road and Transportation. Given that the mine is just 17km from the Zeltura border (as opposed to approximately 120km from the mine to Sukhbaatar), re-opening of the Zeltura border would reduce transportation costs and potentially further facilitate increasing coal sales to Russia.

If the feasibility study is accepted by the Ministry of Road and Transportation, road upgrades can begin and are expected to take up to four months based on preliminary tenders received. The Company will advise if and when the feasibility study is accepted.

Concurrently, the Company is working with the Ministry of Finance on creating a customs clearing zone at the Ulaan Ovoo mine to facilitate Russian exports. The Company is pleased with the overall progress and appreciates the support from Mongolian and Russian authorities.

2014 Outlook

Since resuming operations at Ulan Ovoo, management is primarily working towards improving mining practices in the areas of safety, cost containment and coal quality improvement. With these mandates and since near surface oxidized coal was removed in 2011 and 2012, the Company has been able to consistently mine higher grade thermal coal with GCV greater than 5,000 kcal/kg. With consistent, effective and efficient mining practices, management expects that approximately ninety percent of the coal mined at Ulan Ovoo will be greater than 5,000 kcal/kg in 2014 as was projected in the Wardrop Pre-Feasibility Study. As such, the Company is transitioning to supplying to a market for coal of GCV greater than 5,000 kcal/kg which realizes premium pricing, both in the Company's domestic and neighbouring market, Russia.

The Company has only commenced penetrating the premium thermal coal market in this region and believes there is potential to further expand sales with minimal competition in northern Mongolia and its neighboring Russian region. Furthermore, during the year, the company invested in a coal screener to enable the provision of specific sizes of coal which realize premium pricing in all markets. In addition, subsequent to year end, the Company also invested in a coal dryer to support maintaining lower moisture levels in order to consistently produce coal with GCV greater than 5,000 kcal/kg to also support capturing greater market share where premium prices are realized. As such, the Company is focusing its efforts on controlling its mining practices and marketing efforts to become primarily a provider of coal greater than 5,000 GCV where premium pricing can be obtained. Any remaining lower grades of coal inventory will be used to produce briquettes for domestic home heating. The price for a comparable briquette product is approximately US $50 per tonne in Ulaanbaatar.


After extensive submissions and discussions, the Mongolian Cabinet approved the Chandgana Power Plant Project as a concession project in January 2014. Subject to negotiations, a concession project may be entitled to stable tax rates, favorable VAT and customs duties, as well as other forms of government subsidies, endorsement and support; all of which can enhance bankability and lead to better financing options for the project.

2014 Outlook

The Company actively pursues the remaining agreements required to proceed with project financing of the Chandgana Power Plant Project. Prophecy also continues to actively consider the project financing options which include either debt, equity or a combination thereof in addition to joint ventures with international power project developers. While the Company is pleased with the overall progress and appreciated support from various Mongolian authorities, it cannot offer certainty or a definitive time frame to conclude the Concession Agreement with the Ministry of Economic Development, or the Power Purchase Agreement with the Ministry of Energy.

Link to release


Ex-UBS Banker Momdjian Starts Frontier Markets Investment Firm

April 7 (Bloomberg) -- Albert Momdjian, who led UBS AG's business with the wealthiest in the Middle East and Africa, has set up a company in Dubai to invest in frontier markets.

Sokotra Capital will focus on countries including Mongolia, Vietnam and Africa, targeting investments in agriculture, real estate and hospitality, according to Momdjian's LinkedIn profile. Momdjian confirmed the details in a phone interview and said Sokotra will seek to co-invest with family-owned groups in the region. He declined to provide further information.

A rising number of Middle Eastern bankers are starting their own firms or joining boutique investment houses to exploit growth opportunities in emerging and frontier markets. Ali Asghar, the former head of Lazard Ltd.'s Dubai office, last year left to set up his own boutique emerging-market focused firm, while former Goldman Sachs Group Inc. banker Ziad Awad established an advisory and consultancy firm in Dubai.

Frontier markets have outperformed developing-nation stocks since the start of 2013, with the MSCI Frontier Market Index rising 8.5 percent in 2014 following a gain of 21 percent last year. That compares with a drop of 5 percent in 2013 for the MSCI Emerging Markets Index, which is little changed this year.

At UBS, Momdjian ran the corporate finance team catering to large families and ultra-high-net-worth individuals from 2011, according to his LinkedIn profile. Prior to joining UBS, he was the head of investment banking operations for Credit Agricole SA in the Middle East and Africa.

A spokesman for UBS declined to comment on Momdjian leaving the bank.

Link to article

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Local Market

MSE News for April 8: Top 20 -0.8%, Turnover 56.7 Million

Ulaanbaatar, April 8 /MONTSAME/ At the Stock Exchange trades held Tuesday, a total of 23 thousand and 385 shares of 25 JSCs were traded costing MNT 56 million 748 thousand and 144.00.

"Remikon" /9,004 units/, "Moninjbar" /3,700 units/, "Sharyn gol" /3,604 units/, "Khokh gan" /1,600 units/ and "Tavantolgoi" /1,234 units/ were the most actively traded in terms of trading volume, in terms of trading value--"Sharyn gol" (MNT 28 million 834 thousand and 800), "Tavantolgoi" (MNT six million 319 thousand and 740), "Ulaanbaatar khivs" (MNT six million), "Darkhan nekhii" (MNT four million 820 thousand and 500) and "Shivee ovoo" (MNT two million 992 thousand and 500).

The total market capitalization was set at MNT one trillion 632 billion 058 million 928 thousand and 709. The Index of Top-20 JSCs was 15,963.61, decreasing by MNT 129.00 or 0.80% against the previous day.

Link to article


MSE News for April 9: Top 20 +0.08%, Turnover 42 Million

Ulaanbaatar, April 9 /MONTSAME/ At the Stock Exchange trades held Wednesday, a total of 27 thousand and 962 shares of 32 JSCs were traded costing MNT 42 million 007 thousand and 271.00.

"Remikon" /8,206 units/, "Moninjbar" /5,773 units/, "E-trans logistics" /5,340 units/, "State Department Store" /2,507 units/ and "Material impex" /1,078 units/ were the most actively traded in terms of trading volume, in terms of trading value--"Material impex" (MNT 14 million 714 thousand and 700), "UB-BUK" (MNT six million and 210 thousand), "Gutal" (MNT five million 686 thousand and 050), "Gobi" (MNT three million 082 thousand and 955) and "Moninjbar" (MNT one million 726 thousand and 900).

The total market capitalization was set at MNT one trillion 608 billion 602 million 347 thousand and 932. The Index of Top-20 JSCs was 15,976.48, increasing by MNT 12.87 or 0.08% against the previous day.

Link to article

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MNT historic low v. USD: 1,787.59, February 27, 2014

BoM MNT Rates: April 9 Close





































April MNT Chart:


Link to rates


BoM FX auction: US$27.6 million sold at 1,781, $36.5 million MNT swap offers accepted

April 8 (Bank of Mongolia) On the Foreign Exchange Auction held on April 8th, 2014 the BOM has received from local commercial banks bid offer of USD and CNY. The BOM has sold 27.6 million USD as closing rate of MNT 1781.00.

On April 8th, 2014, The BOM has received MNT Swap agreement offer in equivalent to 36.5 million USD from local commercial banks and accepted the offer.

See also:

·         FX Auction Statistics

Link to release


BoM issues 353.1 billion 1-week bills, total outstanding -5.85% to 878.5 billion

April 9 (Bank of Mongolia) BoM issues 1 week bills worth MNT 353.1 billion at a weighted interest rate of 10.5 percent per annum /For previous auctions click here/

Link to release


8% Mortgage Program Update: ₮500.3B Refinanced, ₮947.6B Newly Issued

April 8 (Cover Mongolia) As of April 6, 500.3 billion (₮499.7 billion as of April 2) existing mortgages of 17,632 citizens (17,616 as of April 2) were refinanced at 8% out of 845.7 billion (845 billion as of April 2) worth requests.

Also, 947.6 billion (₮943.5 billion as of April 2) new mortgages of 17,019 citizens (16,951 citizens as of April 2) were issued at new rates out of 1 trillion (₮1 trillion as of April 2) worth requests.

Link to release (in Mongolian)


Moody's: Mongolia's lax policies constrain the credit profile

Singapore, April 03, 2014 -- Moody's Investors Service says that while Mongolia (B1 stable) is one of the world's fastest-growing economies with a wealth of natural resources, the country's loose fiscal and monetary policies and fluctuating investment regime weigh on the quality of its credit.

In the absence of greater policy discipline and given the recent rise in government debt and system-wide foreign-currency borrowing, Mongolia's government finances will become even more dependent on volatile mining revenues, yet under uncertain future revenue streams. Thus, government finances and the economy at large would remain susceptible to boom-bust economic cycles.

Moody's analysis is contained in its just-released report entitled Mongolia: Policy Laxity and Uncertainty Continue to Constrain the Credit Profile.

Adherence to fiscal responsibility legislation has been lax, with off-budget expenditure resulting in a considerably higher consolidated deficit. While infrastructure investment will help boost Mongolia's economic potential, the ability to repay such expenditure in the future could come under pressure and carries exchange-rate risk.

Mongolia's uncertain investment regime has had a direct bearing on the country's macroeconomic stability. Over the past year, policy unpredictability -- particularly apparent in the mining sector -- has deterred investments that are necessary to generate revenues for the Mongolian government and private sector to repay their debts.

In addition, loose monetary policy and central bank quasi-fiscal programs have fueled high inflation and excessive demand, pressuring Mongolia's foreign reserves and ramping up external debt. If inflationary pressures are not contained, they could prompt capital flight and weaken the external payments position.

Subscribers can access the report at

Link to release


Oyu Tolgoi Funding Delay Credit Negative for Mongolia: Moody's

By Michael Kohn

April 8 (Bloomberg) -- Missed deadline for funding expansion at Mongolia's Oyu Tolgoi mine will cause more delays and is credit negative for country's investment regime, Moody's Investors Service says in report today.

* Rio Tinto and Mongolia gov't were unable to agree to terms of $4.2b finance package by the March 31 deadline, and dispute between Mongolia and Rio Tinto is a "major deterrent to investment in the country:" Moody's

* Delays at Oyu Tolgoi development could add to pressure on Mongolia's structural fiscal deficit: report

* Oyu Tolgoi delays may also strain gov't ability to fund growing foreign currency debts, which increased to 157% of GDP by the end of 2013: report

(Bloomberg First Word)

Issuer Comment:  Mongolia - Delayed Resolution on Oyu Tolgoi Mine Weighs on the Credit Profile - Moody's Investors Service, April 8


Mogi: Increases 2014 GDP forecast to 11.4% from 10.3% (November Economic Update)

World Bank East Asia Pacific Economic Update: Mongolia

April 8 --


Mongolia's economy recorded another period of double-digit growth in 2013. The high economic growth was due to stronger mineral production led by the start of production in the Oyu Tolgoi mine and the government's stimulus policy. Expansionary fiscal policies created an additional off-budget deficit of 9 to 10 percent of GDP on top of the official budget. Monetary policy turned accommodative in 2013, injecting fresh liquidity equivalent to 20 percent of GDP into commercial banks through policy lending programs.

The high economic growth buoyed by a policy stimulus was accompanied by rising inflation and growing external imbalances. Inflation accelerated to 12.5 percent at end-2013, while the current account deficit reached 28 percent of GDP. In light of the growing economic imbalances, the primary objective of economic management should be to restore macroeconomic stability, sustainable fiscal policy, and an adequate level of international reserves. Continuous efforts are needed to restore strong and stable foreign capital inflow.

Recent Economic Developments

Mongolia's economy recorded another period of double-digit growth of 11.7 percent in 2013, led by stronger copper and gold production. The economy grew 12.3 percent in the fourth quarter of the year, a slight pickup from 11.9 percent in the third quarter. Accelerating growth in mineral production—amidst the ramp-up of copper and gold production in Oyu Tolgoi (OT) mine—led the double-digit growth of the economy. Mineral GDP growth picked up to 33.8 percent in the second half of the year from 6.1 percent in the first half, registering 20.7 percent annual growth. Mineral GDP accounted for 18.5 percent of total economic output in 2013. Nonmineral GDP growth also remained double digit, buoyed by economic stimulus measures, driven by strong growth in construction (66.5 percent year-on-year) and wholesale and retail (17 percent year-on-year). The robust nonmineral growth was led by large off -budget public infrastructure spending through the Development Bank of Mongolia (equivalent to 9 to 10 percent of GDP) and subsidized lending programs by the Bank of Mongolia (equivalent to 20 percent of GDP).

Economic policies have been focused on growth stimulus through large off -budget spending and loose monetary policy. Fiscal policy remained highly expansionary in 2013 due to continued off -budget spending through the Development Bank of Mongolia (DBM). The structural budget deficit was kept under the 2 percent ceiling of the Fiscal Stability Law. However, a large portion of capital expenditure—which was carried out through the DBM—remained outside the official budget, which is estimated to be around 9 to 10 percent of GDP. Monetary policy also turned accommodative in 2013, through large subsidized lending programs of the central bank. The central bank continued its policy lending programs including the Price Stabilization Program and low-interest-rate mortgage lending, injecting 3.4 billion Tog into commercial banks over the year. Outstanding central bank lending to commercial banks reached 24 percent of GDP at end-2013.

National headline inflation has been accelerating since July, reaching 12.5 percent (year-on-year) in December 2013 and 12.3 percent in January 2014. The price level has been under mounting pressure from expansionary economic policies throughout the year as the central bank implemented aggressive monetary easing programs to spur economic growth. Core inflation—which largely reflects demand-side pressure—increased to 12.7 percent in December 2013 from 7.7 percent in June, the highest level over the last two years.

The annual current account deficit in 2013 was US$3.2 billion—equivalent to 28 percent of GDP—following the deficit of US$3.4 billion in 2012. The large current account deficit continued over the last three years as mineral export growth stagnated, while the adjustment of imports was limited due to continuous policy stimulus and slow adjustment of the real exchange rate. Total exports declined by 2.6 percent from a year ago, due to a 41 percent drop in coal exports. As the foreign capital inflow dropped in 2013, the large current account deficit posed a significant challenge to the economy due to a widening gap in the balance of payments. The net foreign capital inflow (US$1.5 billion) in 2013 slowed considerably from the previous year (over US$4.9 billion), reflecting a drop in FDI of nearly 50 percent from US$4.4 billion to US$2.3 billion.

The large financing gap in the balance of payments has led to a continuous decline in international reserve levels and a sliding exchange rate throughout the year. The gross international reserves of the central bank fell over 47 percent during the year to US$2.2 billion in December 2013, from its peak of US$4.1 billion a year ago. The local currency depreciated 24 percent since July 2013 through February 2014. The slide in local currency value was also fed by loose monetary policy and weak confidence in the local currency amidst the diminishing foreign capital inflow.

Outlook and Emerging Challenges

In 2014, economic policies are likely to repeat the expansionary path of the last year in light of continued political emphasis on double-digit economic growth. Off -budget spending through the DBM will remain the main financing vehicle for many infrastructure projects, bypassing the control of the Fiscal Stability Law. It would likely create an additional budget deficit of 7 to 8 percent of GDP on top of the official budget. Monetary policy will also likely remain loose, including the Price Stabilization Program and the politically popular housing mortgage program.

Continued economic stimulus relying on external borrowing and liquidity injection will likely add to economic imbalances. Underlying inflationary pressure is high since the rising cost of imported goods has been only partially reflected in retail prices due to the price control of the central bank. The international reserve level and exchange rate will likely remain under continued pressure from the large gap between the current and financial/capital accounts. The objective of economic management at the current stage should be to ensure a stable and sustainable growth path, minimizing the possibility of boom-bust cycles and addressing the balance-of-payments situation. The immediate policy priority is to counter rising balance-of-payments pressure and inflation through regaining foreign capital inflow and tighter economic management.

Mongolia: Key Economic Indicators







Output, Employment, and Prices

Real GDP (% change yoy)






Mineral GDP (%, yoy)






Consumer price index (% change yoy) 1/






Link to report (pages 103-105)


Mogi: IMF had previously forecasted 9.6% growth in 2014 (December 2013)

IMF Forecasts 12.9% Growth in 2014 for Mongolia, 7.7% in 2015

April 9 (Mongolian Economy) Macroeconomic imbalances related to rapid credit growth and high current account deficits in Mongolia are an ongoing risk, says a report recently released by the International Monetary Fund (IMF). 

According to the IMF, Mongolia's GDP is forecast to grow 12.9 percent in 2014 and 7.7 percent in 2015.  

The report shows solid growth for developing Asia with some additional benefit from the ongoing recovery in world trade. 

Bangladesh is expected to recover in 2014 as activity normalizes following a year of political unrest.  

Other Emerging and Developing Asia group category countries – Bangladesh, Bhutan, Brunei Darussalam, Cambodia, Fiji, Kiribati, Lao P.D.R., Maldives, Marshall Islands, Micronesia, Mongolia, Myanmar, Nepal, Palau, Papua New Guinea, Samoa, Solomon Islands, Sri Lanka, Timor-Leste, Tonga, Tuvalu, and Vanuatu  – are  projected to grow by 6.7 per cent in 2014 and 7.1 per cent  next year.  

IMF predictions for Mongolia's neighbors? 

China's growth is expected to slow to 7.5 percent  this year from 7.7 percent in 2013. The IMF has urged the country to shift its economy toward more domestic consumption and less exports and business investment. 

Russia's growth forecast was chopped to 1.3 percent from 1.9 percent. Foreign investors have fled the country following Russia's recent incursions into Ukraine which led to US and European sanctions. 

Emerging markets such as China, Brazil, India and Russia are expected to expand by 4.9 percent this year, up from 4.7 percent in 2013, and contribute more than two-thirds of global growth. 

But the IMF sees risks in emerging markets and warns of low inflation in advanced economies and geopolitical issues. 

Global front 

On Tuesday, the IMF said the global economic recovery will strengthen this year. However, IMF, Managing Director Christine Lagarde warned that without "brave action", the world could fall into a "low growth trap".

Ms Lagarde also urged more action to tackle low inflation in the eurozone 

An accelerating US recovery will help the world economy grow 3.6 percent this year, the IMF said, up from 3 percent in 2013 but down slightly from its 3.7 percent projection in January. Growth will pick up to a 3.9 percent pace in 2015 

The IMF's 2014 growth forecast for the US was unchanged at 2.8 percent. That is the highest among advanced economies, which the IMF said are driving the global expansion. 

The eurozone economy recently began expanding following the Great Recession and is projected to grow 1.2% this year, up from the IMF's 1.1% forecast in January.  

The UK economy will be the fastest-growing in the G7 this year. It says the UK will grow 2.9% in 2014, up from a January estimate of 2.4%, and will see growth of 2.5% in 2015. 

Source: IMF's latest World Economic Outlook, its bi-annual analysis and projections of economic developments.

Link to article


Currency dealers in Naiman Sharga set exclusive exchange rates

April 9 (UB Post) A declining Mongolian tugrug and increased value of foreign currency in recent years has been challenging to citizens and residents. Many people are discussing how to resolve the economic crisis, but until now, no solution has been reached. Even the Central Bank has said, "Keeping directly set currency is wrong. We should take measurements to decline it slightly." The currency exchange rate is increasing day by day.  There were a few people in Naiman Sharga at around 11 a.m. yesterday, while currency dealers were setting the exchange rates and updating their information board.

We learned more in an interview with "B", a currency exchange dealer.

The exchange rate is fluctuating a lot. How do you set the exchange rate?

Mongol Bank announces the closing rate everyday and puts it on their website. We see it on the website and set the rate. We don't raise it a lot.

I thought your rate would be cheaper than others, but it is higher than some banks.

Our rate was the cheapest one. But if the supply becomes rare, there is no way to increase the rate for currency dealers. It is a different thing for banks. They have a direct supply from the Central Bank. Other banks participate at auctions and buy the currency twice a week. Unfortunately, the currency dealers are not able to buy currency. So we set the exchange rate according to market law.

Do you know when the USD and CNY rates increase and decrease?

Mongolians mostly buy USD and CNY. Nowadays, the rate of USD and CNY fluctuate 1-5 tugrugs. Depending on the increase of the previous day's closing rate from Mongol Bank, we raise it. On the other hand, if it decreases we also decrease it too.

In connection with foot-and-mouth disease, the number of people going to China has declined. Has this decline influenced the exchange rate?

Yes. It is quite influential. Compared to March and April of the previous year, the exchange rate has declined dramatically. Besides foot-and-mouth disease, the economic crisis is influencing it too.

Are there many people who buy currency constantly?

Of course, there are. We all have regular customers. Customers don't go to new currency dealers anytime they want to exchange their currency. They get used to buying it from the same place. Maybe it is easy for them.

Is the economic crisis reducing the number of regular customers?

For some currency dealers, this can happen. For me there is no change. On the other hand, people are buying one and half million or one million CNY instead of two million. The economic crisis is influencing people in this way.

S. Bayarchimeg: Increase of the CNY rate is oppressing me

While we were talking with currency dealer "B", we met S. Bayarchimeg, who was exchanging 500,000 MNT to Russian rubles.

Do you often come to Naiman Sharga?

I work as a vendor at Bumbugur market. I go to China in order to bring in new goods once a month and I come here to exchange currency.

But this time you are going to exchange for RUB. So, are you going to go to Russia?

My sister's daughter lives in Erkhuu and I came here to give her some money. The rate of the ruble has also risen in connection with the increase of the USD.

It seems that the increase of the CNY rate is becoming a big shock for sellers. Is this accurate?

Of course, the increase of the CNY rate is becoming a big shock, especially for those of us who run businesses with little money.  This is not a big thing for sellers who run businesses with a lot of money. When I started my business, the CNY rate was 225 MNT, but now it has decreased to 60-70 MNT.

How often do you go for goods?

I used to go once every two weeks, because I used to buy goods for a small amount of money and goods sold easily. But now, people are not able to go shopping often. I can't sell my goods quickly, so I go once a month.  Unfortunately, sometimes I can't go for goods. Maybe all Mongolians do not have money now.

You said you run your business with a small amount of money. How much money do you spend on your business?

It is not too much, 3-3.5 million MNT.  People are rare who can run a business with such a small amount of money.

Naiman Sharga exchange rates are higher than small banks

Even though currency dealers say that they set their exchange rates in relation to the closing rate of the Central Bank, customers were offering other responses. For instance, the rate of exchange changes several times a day. Currency dealers set it and increase the rate of exchange as soon as the train from Zamiin-Uud and Ereen has arrived. If you are going to exchange currency, they advise that you come to Naiman Sharga earlier in the day.

Moreover, banks near Naiman Sharga sell currency cheaper than Naiman Sharga dealers. Businesspeople who know this go to Naiman Sharga after going to the banks.

Link to article


Mongolia's Wind-Like Labour Market

By E. Zorigt

April 8 (Mongolian Economy) Human capital is traded like a commodity. The market is in demand for certain skill sets, and experience and know-how add value. This is what is commonly refered to as the labour market.

The labour market in Mongolia is growing. Each year Mongolia sees 37,000 students graduate from universities and another 20,000 complete vocational training. 

The National Statistical Office last reported that the unemployment rate was 7.8 percent in Mongolia. And although there are plenty of job vacancies available, one-third of Mongolian citizens live below the poverty level.

Unemployed or Incapable?

Mongolia's labour market moves in all directions like the wind. Not long ago everyone was deciding to work for mining companies, but not any longer.

"Students who received the highest points on their admission test choose mining classes," said D. Enkhbat, head of the Science Technology and Innovation Department at the Mongolian University of Science and Technology.

For a long time every industry other than mining was struggling to fill vacancies. A clerk might quit his job to try his hand at operating a bulldozer for a mining company because of the higher wages promised. Meanwhile companies struggled to compete with miners offering high wages to retain staff.

Today construction is seeing a renaissance and last year the sector helped lift up the economy. Now it is construction jobs people want instead of mining.

"After the recent boom in the construction sector we saw an increasing number of young people interested in joining our company. The sector is highly productive and offers a high wage," said A. Uuganbaatar, a human resources manager at Eco Construction.

However, the human resource pool is not well balanced. Labour is scarce in some industries while others have a surplus. According to M. Chimeddorj, director at Labour Studies Institute, people are often making the wrong choices when choosing their professions.

"When there was the centrally planned economy, nobody could choose their preferred professions," he said.

"But in these days of the market economy, we can choose our preferred professions and even where we work is our decision. In a much lesser populated country like Mongolia, an over-concentration of the labour force in a single sector is wrong."

There's no way to manage the talent pools of in the country without going back to the socialist system where people were assigned professions. That is the cost of free choice. That leaves the Ministry of Labour to seek out new ways of tackling the issue.

"Infrastructure is inadequate. IT infrastructure needs to be developed in order to balance the flow of information," said D. Battogtokh, deputy director of the Labour Exchange Office.

"The ministry is addressing this. For example, we have successfully implemented a project for establishing an integrated labour market database network," he said. "Job seekers, educators and employer should exchange their information freely so that the labour market can be healthy and employment rate can grow."

More than Miners

The mining industry comprises more than 90 percent of Mongolia's total exports, but only a mere 4 percent of the employment pool, according to research by the Mining Ministry. Mining is expected to grow in the coming decade, but is only expected to total at mere 7 percent of the labour market because of automation at mines. In fact, the Mining Ministry recommended against specialising in the mining industry, despite the expected growth.

According to the Ministry of Mining, employment in agriculture – another economic pillar for the county – is expected to soon contract as well. Although productivity will likely increase labour demand is likely to fall as the industry begins taking advantage of advanced technologies. The current number of employees in agriculture is 370,000, but this is projected to drop to 320,000 after some 10 years.

Clearly, no sector – no matter what kind of growth is expected – is guaranteed to provide jobs.

This is not the fault of young graduates, but rather it is because of poor curricula planning by universities and schools. The Mining Ministry study revealed that the number of students who majored in linguistics far exceeds actual demand. In the coming 10 years, some specialised professions such as processing plant workers are very likely to be in greater demand.

Link to article


Government looks to provide accommodation for every citizen: Interview with Construction Minister

March 2014 (Worldfolio) With the Mongolian construction industry growing at an average rate of 2.5 times year by year, contributing to and keeping pace with the country's rapidly growing economy, it is one of Mongolia's important sectors. In an interview with United World, the Minister of Construction & Urban Development, Bayarsaikhan Tsevelmaa, explains how the government is pursuing policies in order to maintain and facilitate high rates of growth by attracting foreign investment, and ultimately helping provide Mongolians with a greater number of homes and improved infrastructure

We want to get a broader context, we looked at the GDP growth in recent years, 17% in 2011, 12% in 2012 and I'm just wondering what do you consider are the key factors behind this growth and how this growth can be sustained? 

The main sectors that are contributing to our GDP growth are mining, construction and agriculture. The construction sector has been growing 2.5 times year by year. There is a certain decline in the mining sector due to the mining related product prices. The growth of the economy can't be inferred as quality growth. So we are changing some policies in order to attract more foreign investment.

In terms of the country's foreign trade, the import value exceeds the export with a negative trade balance. Thus, we are pursuing a policy to substitute import goods in the construction sector. So the policy regarding the economic growth will be stable and encourage both local and foreign investors. In 2014, we expect the pace of the economic growth to be close to that of 2013.

As for this year, we heavily focused on the road network for the 6 provinces and infrastructure engineering structures. Only in Ulaanbaatar, approximately 200 billion MNT of investment was made for the Ger district re-planning and construction projects. Pursuant to the real estate agency report, a total of 18,000 new apartments in Ulaanbaatar and 3,000 new apartments in provinces have been registered as of October 25th 2013. According to our research, this number will be doubled by next year. Starting from June this year, we started providing 8% mortgage loans, which actually started in 2003 and a total of 28,000 citizens took 850 billion MNT worth of loans up until June last year. Since June this year, a total of 17,000 citizens converted their high rate mortgage loan to 8% and approximately 9,400 citizens have issued requests for a new mortgage. 

Next year, we are working to implement infrastructure engineering and apartment projects in more provincial areas. 

For those people who have access to loans, are you collaborating with any financial institutions to facilitate the loans? 

Currently, the commercial banks are issuing the loan. Previously, there was a special entity in charge of loan issuance. Also, The Mongolian Ipotek Corporation was established to issue securities and trade loan packages on the secondary market. We are working to collaborate with Social Insurance funds, foreign investors and other sources. 

How do you feel financial service companies coming from abroad can best participate in the mortgage market here, in order to create loans for a variety of people?

At this moment, Bank of Mongolia is acting as a buyer on the secondary market. In the future, we are taking a policy to encourage foreign investors to act on the secondary market.

I wonder, regarding the construction within Ulaanbaatar, what is the balance of priorities in terms of real estate, housing and infrastructure including roads and public transport? 

There is the general planning of Ulaanbaatar until 2020. Within this planning, as there are lots of Ger districts, we are pursuing a policy to move the Ger districts into construction apartments and expand the road transportation system and build highways to avoid traffic jams and also a feasibility study of a metro is in process within this task. 

Also, Ulaanbaatar city is highly concentrated in an "A" region. Thus we are planning to create 8 regions and finance the first 6 regions through the financing of the Asian Development Bank. In order words, people can get all types of public services from the regions without coming into the city center. 

…In a ring around the city? 

Khaniin Material, Selbe and Amgalan areas. There are also satellite cities of Ulaanbaatar such as Bagakhangai, Baganuur and Nalaikh, in which general planning is being done. 

As long as the population is concentrated here in Ulaanbaatar, they are producing more pollution because of the coal heating. We interviewed Dr. Oyun, from the Ministry of Green Environment a few weeks ago. She noted that the air quality was reduced by 12 percent last year. It still needs a lot of work but it has been reduced. I'm just wondering what would be the exact plan of the construction and development that your Ministry is conducting to improve air quality especially within Ger districts?

Ulaanbaatar city was planned for 500 to 600 thousand dwellers. But in the last years, due to migration from urban areas, the city currently has more than 1 million dwellers. As a result, we emphasize the importance of developing not only Ulaanbaatar city, but also other cities around the capital city including Darkhan, Baganuur, Choir and Zuun Mod. 

I wanted to ask, what are the key objectives of this master plan up until 2020? What are the economic opportunities present in this construction development and quality of life?

Almost 60% of the total dwellers in Ulaanbaatar city live in Ger districts. Those living in Ger districts lack infrastructure and reliable electricity supply. Thus, we are constructing an infrastructure project called "Ikh Toiruu" to surround the city with a 110 KW electricity line. In addition to it, a new construction is being built and we are working to connect Ger districts with water sewage and encourage them to have small house-apartments in their own areas. It is also necessary to build hospital, schools and kindergartens in accordance with the master plan. Also, at the moment, public and private services are lacking. Public transportation development and industrial zones are also stated in our general plan. For example, leather-processing plants will be moved out of the city. 

As you are the most authorized person in plans to develop, grow and connect UB, can you please launch a statement regarding Mongolian plans to reach its potential to the audience of USA Today? 

Everybody has a right to own an apartment. Thus it shall be a government policy to provide an apartment to its citizens. In this framework, we introduced mortgage loan and further working on renting-apartment project. In order to do this, it is necessary to lessen the construction sector seasonality by introducing new building technologies and transfer the construction standards to euro-standard. We are also pursuing a policy to encourage construction material manufacturing, cement and re-bar factory are first, and substitute imports. Behind this task, the government is trying to provide accommodation for every citizen and high employment rate is the main focus.

Ulaanbaatar State Property Committee Head Office, 20.01.2014

Link to article


Mongolia's investor relations: a job for Genghis Khan?

by Jacopo Dettoni

April 10 (FT beyondbrics) It was only an April Fool's day joke – but when an Ulaanbaatar website suggested that Mongolia go on a Genghis Khan-style "investor roadshow" across several continents on horseback to win back international investors, it hinted at the size of the image deficit the north Asian nation faces.

In Mongolia, the 13th century great Khan is thought to have mythic powers "to make the difficult easy and the distant closer by". So channelling his spirit to serve investor relations seems natural enough – especially when the task at hand is significant.

Foreign direct investment in Mongolia fell 54 per cent year-on-year in 2013 due largely to a reputation for legal capriciousness. But things may be about to look up, with a friendlier, revised investment law in place, GDP growth for 2014 forecast to be rapid and evidence that key economic rebalancing processes are underway.

Support for the beleagured local currency, the tugrik – which has lost over 27 per cent against the US dollar since early 2013 – may be on its way after new data showed a big reduction in the country's trade deficit. The trade deficit narrowed to US$36m in the first quarter of 2014, down from US$346m in the first quarter of 2013, according to figures from the Customs office.

"In spite of delays in Rio Tinto's Oyu Tolgoi (OT) mine expansion and the very disappointing performance of the coal sector, the economy is adjusting," Bold Sandagdorj, chief economist at Mongolbank, the central bank, told beyondbrics.

"Improvements on those two fronts can further improve the overall balance of payments and support economic growth. We are not talking of a 17 per cent growth rate this year, but more realistic projections of around 11 per cent," Bold added. "On the other hand, without such improvements the situation will be very different."

Forecasts for Mongolian GDP growth this year vary. The Asian Development Bank (ADB) is forecasting growth at 9.5 per cent, while the International Monetary Fund (IMF) and World Bank are predicting 12.9 per cent and 11.4 per cent respectively.

In spite of the divergence, there was unanimity among the three multilateral organisations over the need for Ulaanbaatar to unwind its monetary stimulus, which is blamed for contributing to the trade deficit and a 40 per cent year-on-year decline in foreign currency reserves in January.

The central bank appears to concur with the ADB, IMF and World Bank advice.

"Mongolbank's monetary stimulus played a crucial role in maintaining overall economic stability, preventing potential credit crunch and decreasing supply shock impacts on inflation. The bank is now tapering its quantitative easing, and outstanding monetary injection in 2014 will be significantly less than 2013," Bold said.

However, several issues cast shadows over such signs of incipient improvement. The country's biggest foreign investment project, the $4.2bn Rio Tinto's OT mine, is still without an agreement to permit it to expand, pending a final feasibility study and subsequent parliamentary approval.

A quick glance at a 2013 report on Mongolia business by Rio's subsidiary, Turquoise Hills (Mogi: just Turquoise Hill), suggests that old misgivings about the transience of legal undertakings remains a key bugbear. Among "certain factors which are inherently uncertain", the Turquoise Hill report lists "the impact of changes in interpretation to or changes in enforcement of, laws, regulations and government practices."

Mongolia's reputation for legal capriciousness stems mainly from its response to a 2012 announcement by China's state-owned Aluminium Corp of China that it was acquiring a coal mine operator, SouthGobi Resources, from a Canadian company. Ulaanbaatar – which is particularly sensitive to signs of economic encroachment from its huge southern neighbour and former colonial overlord -reacted by passing a law requiring government approval for foreign investment in strategic industries.

In a revision that took effect from November last year, it softened this law considerably, following the slump in foreign investment inflows. Now, only state-owned foreign companies acquiring more than one third of a company in a strategic industry must win government approval. Private foreign companies are free from such an approvals process.

Aside from the Rio Tinto delays, the other main factor clouding the outlook for the Mongolian economy this year is China's dwindling appetite for coal. Coal exports fell 12 per cent in the first two months of 2014, according to Mongolbank figures.

"We expect the pricing environment in the coking coal industry to remain under pressure in the short-term," Battsengel Gotov, CEO of Mongolia Mining, the country's largest miner of coking coal, said recently.

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Spring Session Agenda Approved

Ulaanbaatar, April 9 (MONTSAME) The Chairman of the State Great Khural (parliament) Z.Enkhbold Tuesday issued an order on fixing agenda that will be discussed by the spring session. 

The considered will be an implementation of the 2013 basic guidelines for social-economic development of Mongolia; the 2015 budget framework report for the master budget, a draft law on 2016-2017 budget assumption; a draft resolution of parliament on approving the 2013 budget performance, the 2013 financial master report of government; draft resolutions of parliament on giving directions to government on some measures for activating the economy, on approving the 2015 basic guidelines for social-economic development and on approving a list of projects and programmes to be financed by the Development Bank of Mongolia (DBM); a draft amendment to the law on government; bills on legal status of law enforcers, on investigation service, on restricting activities of state-run entities, and on "glass" account.

Others are draft new wordings of the laws on land, on state registration of legal person and on weapons; a draft resolution of parliament on green development concept and approving a middle-term programme; draft amendment to the law on rule of maintaining the law on banning mineral exploration and exploitation near water sources, protected areas and forests; draft laws on index-based insurance, on joint pension and on criminal procedure; and a draft resolution of parliament on approving a state policy on auto road transportation.

In the next part, the session is to discuss bills on trade and on rendering mercy; draft amendments to the laws on pre-school education, on education and on state service; and others.

Other bills, amendments and resolution, which are not reflected in the order, will be considered at the session after discussing them at relevant councils. Obligations were given to heads of the Standing committees and the Parliamentary Office chairman to ensure a preparation for the discussion of the documents.

Link to article


Independent MPs Pledge to Resolve Exigent Issues within 2014 Spring Session

April 8 ( Following the opening ceremony of the 2014 Spring Plenary Session of the State Great Khural (Parliament) held on Monday, April 07, the three parliamentarians elected independently in 2012 Parliament Elections, namely Ts.Davaasuren, Kh.Bolorchuluun and S.Ganbaatar have called a press conference afternoon.

They stated to focus on submitting a bill to eliminate "double coat", clarification on 2014 State Budget and pay more attention on the amendments to the Petroleum Law. Particularly, the issue on resolving Oyu Tolgoi disputes will not be left, but should consider Mongolia's core interest.

MP Ts.Davaasuren noted, "At the regular upcoming Cabinet meeting, we will forward the issue on eliminating "double coat", in other words a parliamentarian should not hold a subsidiary position or high-rank. This is a very complicated issue, thus it will not enough only to change some provisions in the Parliament or Government resolutions, instead we should amend the term "A member of the Parliament can be a member of the Government" that cites in the Constitution.

MP Kh.Bolorchuluun said, "One of the exigent issues to discuss at this Spring Session is the Petroleum Law. The law has overcome many barriers and criteria and the final version was about to discuss at the Cabinet meeting scheduled on January 30, a day before the Tsagaan Sar Holiday, but unfortunately some authorities had postponed to discuss during the Spring Session. But today, some sources reveal this law might be withdrawn by Cabinet itself. On this bill over 20 legislators worked about 6 months and when we consider the laws on natural resources and minerals, some third-part involvement is pretty much to drag. I would say this because of pushes by foreign companies and Mongolian politicians, who work for them trying to freeze the implementation that caused the rumor to withdraw the draft bill on petroleum. Comparatively, the new amendments were made to investors mutually beneficial with assert adequacy".

MP S.Ganbaatar added, "Another law needed to amend is a citizen's health insurance. The people of Mongolia pay 200 billion MNT for their health insurance, not to mention whether they receive appropriate service or not, but it is time to create a system enables to monitor where their insurance money were accounted. Therefore, the independent candidates' representative is plan amend the law within this Spring Session".

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Democratic Party faction addresses concerns to government and Central Bank

April 9 (UB Post) The Democratic Party group in Parliament held their regular meeting on Monday, and Chairman D.Erdenebat and Deputy Chairman S.Odontuya held a press conference regarding the matters discussed in the regular meeting.

As the economic situation has worsened, Prime Minister N.Altankhyag and the President of Central Bank gave a statement to the Democratic Party faction. Accordingly, the faction gave some directions to the government and the Central Bank, as reported at the press conference. The Democratic Party faction believes that the list of projects that must be done under a concession agreement should be introduced to the government and must be approved by the Parliament. In particular, launching the financing to build a transit road connecting Altanbulag and Zamyn-Uud this spring. Secondly, to quickly resolve the issues regarding railway borders. Thirdly, the Democratic Party believes that the exploitation of Asgat silver mine in Bayan-Ulgii, with the cooperation of Russia, should be decided under a formal agreement. The party faction also asked the government to operate with initiative regarding intensification of the Oyu Tolgoi project.

The Democratic Party group in Parliament feels that one of the ways to improve the economy is to attract investment, and urged the government to issue new geology and exploration licenses within the framework of the amended Law on Minerals, and to intensify investments connected to foreign and domestic exploration. The party supports the domestic production of mining companies and initiating products and services by national companies which will create added value to exports. Furthermore, the faction wants the government to develop a draft bill on debt management and submit it to the Parliament for further discussion.

The party called for the activation of Mongolia's relations between China and Russia, to support trade near the borders and quickly resolve visa exemption issues at border areas, as well as the urgent implementation of actions to bring current currency reserves to one billion USD through investment within the first half of the year.

The party demanded that the Central Bank keep currency rates stable and provide sustainable operations for companies producing exports, as construction work is beginning across the country.
According to figures from the last 10 years, the birth rate has doubled since 2004. In particular, around 40 thousand mothers gave birth in 2004, while this year the number of new births is expected to reach 80 thousand. Accordingly, the government was given duties to determine the required financing to build new maternity hospitals in Ulaanbaatar (the city with the largest population in the nation) and to complete the construction of maternity facilities which are underway, by submitting a 2014 budget amendment.

Furthermore the party demands that the government urgently develop draft bills on state loan insurance, export risk insurance and leasing payment insurance, and submit them to Parliament for further approval, as small entities and businesses are on the verge of huge risk because of the deteriorating economy.

The second important issue that was broadly discussed in the Democratic Party group meeting were the 243 projects with frozen investments, determined at the Parliamentary level. Regarding this issue, the party heard information from the working group appointed by the Parliamentary Standing Committee on Budget. The group reached a decision to list the names of the companies, identifying them as "untrustworthy partners", who did not complete project construction, demonstrated insufficient performance, breached standards or vanished after receiving financing. The names of authorities who determined budgets for the named companies will also be revealed.

On the first day of the 2014 spring session, the Democratic Party Group presented the above mentioned duties to the New Government for Changes, and it is up to the government how long it will take to implement these duties to benefit the economy.

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"Fire Nation" Movement Members' Sentences Reduced in City Court

April 8 ( On April 08, 2014, the second-level court hearing was held at the Capital City Court for members of "Gal Undesten" movement led by Ts.Munkhbayar, who threatened with firearms and hand grenades demanding to amend urgently some articles in the Law on Prohibiting the Mineral Exploration and Extraction Near Water Sources, Protected Areas and Forests (namely "Long Titled" law) in September 2013.

After the first District-level trial, the movement leaders Ts.Munkhbayar, G.Boldbaatar, D.Tumurbaatar and J.Ganbold have been found guilty and heard 21 years and 6 months sentence respectively. Moreover, M.Munkhbold, who sold them firearms, was given 2-year of imprisonment and other protestors O.Sambuu-Yondon and B.Gantulga were found innocent.

So, at today's trial, the Capital City Court jury has issued its decision and resolved to reduce the term of imprisonment for each protestor. Accordingly, Ts.Munkhbayar's sentence was abridged to 7 years, G.Boldbaatar to 6 years and 1 month, D.Tumurbaatar to 10 years and 6 months, J.Ganbold to 1 year and M.Munkhbold to 1 year of imprisonment respectively. Also, the other two protestors' (O.Sambuu-Yondon and B.Gantulga) decision were remained.

Now, above members have a right to appeal for higher-level or Supreme Court of Mongolia.

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Head of Immigration Agency Highlights Reforms to Ease Entry into Mongolia

Ulaanbaatar, April 9 (MONTSAME) This weekly meeting introduced some reforms made in the citizenship and migration matters on Tuesday.

In accordance with the law on border checkpoints adopted late 2013, the Foreign Citizen and Citizenship Agency has changed into the General Agency of Citizenship and Migration (GACM), transmitting into new functions and structure. It was a main focus of the meeting.

"The GACM is to create new services and to introduce new rules and culture in our works. The legal environment, human resources, budget, services and border checking and all functions have transferred into a 'smart' regulation. The budget has become more transparent, so we intend to make our agency a corruption-free environment," the GACM head D.Purevdorj said.

Four key laws on regulating the sector's actions have been amended, and 86 rules reduced to 44, cutting down many burdens. "This is one of good examples of the best exploitation of human resources and capabilities," Purevdorj emphasized.

Issuing of the Mongolian visa has become faster after authorizing border inspectors to issue the visa and transmitting into a new system of responsibility, he said. "As the result of decentralizing visa-related authority, 2,000 visas have been issued since May 1 of 2013 at the Altanbulag border checkpoint. This number was 320 in 2012," he added.

The GACM has taken up extra functions to protect Mongolians abroad and to ease the procedure of having foreigners pass the state borders. The capability of passing foreign people through the borders has doubled after starting to register their fingerprints at the border checkpoints, Purevdorj said.

Moreover, the GACM is collaborating with the diplomatic missions of Mongolia abroad to prevent violation of Mongolian citizens' rights in foreign countries, and intends to finish the "E-immigration" project by 2016 with a purpose to establish a general data system of citizenship and migration registration and control, Purevdorj emphasized.  

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Mongolia undergoing major tax reform aimed at cutting red tape, supporting SMEs

April 9 (Mongolian Economy) There is a Mongolian proverb: "Taxes exists for the state." Everyone has heard this saying, but some have never taken it to heart. Perhaps it is because the tax system was not introduced until 1992, and the system here is immature compared to other countries. But some progress has been made since then.

It was very difficult to communicate with tax officers before 2000. Back then it was a challenge to file your taxes if you did not know anyone who worked at one of the local tax offices. The few large tax payers that existed then were state-owned companies such as Erdenet Mining Corporation, APU and Mongolia Telecom as well as some private companies. 

Things have changed quite a bit since then. Much of the old red tape within tax departments has been cut and receiving tax services is now easier than ever now that online filing is available.

"This year, 70 percent of all entities in Mongolia are to be transferred to the e-reporting system. E-receipts are also expected to be launched for value-added tax," said Finance Minister Chultemiin Ulaan. 

The mining sector makes up 90 percent of total exports, and copper and coal make up the largest portions of those minerals. The government plans to launch the second phase of its tax reform from 2014 to 2017. This second phase will be used to encourage investment to have the added benefit of supporting people in business, small businesses, and employment.

The first phase, which aimed to ease tax pressures and provide tax exemptions, was launched from 2006 to 2012. This included the principle of four 10s. The result was Mongolia had some of the lowest taxation in Asia, which helped attract foreign investment and increase tax revenue.

For example, tax department statistics show that the number of corporate tax payers rose 13 to 18 percent on average every year after the new tax scheme was introduced by the end of 2012. The tax they pay comprised 12 to 20 percent of total tax revenue for Mongolia last year, largely due to the booming mining sector.

The second phase of tax reform will see more than 10 tax codes amended. The Ministry of Finance submitted to the State Great Khural last February amendments to the General Law of Taxation, the Personal Income Tax Law, the Corporate Income Tax Law and the Value-Added Tax Law. The State Great Khural is expected to vote on these amendments in the coming spring session.

The Khural also received amendments proposed for the Special Income Tax Law and the Minerals Law last month.

The Minerals Law currently has the provision that specific tax and licensing fees are to be paid in US dollars. The Finance Ministry has proposed that this be changed so that the exchange rate has less influence on the amount of tax collected.

Amendments proposed for the Corporate Income Tax Law and the Personal Income Tax Law also aim to benefit small business and employment. A 90 percent refund is available to any company earning less than MNT 1.5 billion a year, with exception to companies operating in mining, mobile telecom, tobacco and alcohol, or banking and finance.

The developers behind the amendment to Mongolia's regulations for value-added tax (VAT) realised the threshold for tax payment needed to be higher. Companies have had to pay VAT if they earned more than MNT 10 million a year since 1998. Meanwhile inflation has grown by some 10 percent each year since then. If adjusted for inflation, that threshold should have increased to MNT 42 million.

Deputy Director of the fiscal affairs department at the International Monetary Fund Michael Keen and former professor at the University of Toronto Jack Mintz have proposed a new threshold of MNT 50 million for VAT. The amendment includes a provision that a company may voluntarily pay tax if earnings range between MNT 10 million and MNT 50 million as well.

The endless complaints about VAT have proven that submitting tax forms is difficult for small companies under the current scheme. Raising the minimum payment threshold would remove the need for them to pay at all. 

Corporate income tax falls under two brackets: those who earn less than MNT 3 billion pay 10 percent on earnings and those that earn more pay 25 percent. The government is also to move forward so all these taxes can be paid online.

More of these kinds of reforms will likely boost tax payments and prevent accidental infringements against the tax code.

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Erdenes Tavan Tolgoi will export 11 million tons of coal in 2014

April 8 ( Government plans to collect MNT1.4 trillion or USD800 million approximately from the mining industry in terms of taxes in 2014, 43% from coal, 27% from copper concentrate, and 13% from gold respectively. This accounts 12% of the budget income. It is deemed impossible to collect the planned coal revenue. Last year, it planned that coal export will reach 34 million tons, however the reality was only 18 million tons. Again, the plan in 2014 is 31.4 million tons.

First quarter of this year revealed that only 3.6 million tons have been exported. This revenue is around USD45 million. The decrease is five folds comparing to 2012. The coal price assumption is USD81-115 per ton. It was assumed that Erdenes Tavan Tolgoi JSC would export 11 million tons this year out planned 31.4 million tons. Unfortunately, ETT JSC is shipping the owed coal to Chalco. At this pace, ETT JSC will pay-off the Chalco debt in June, 2014.

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Nuclear Energy Agency of Mongolia to Promote Proper Use of Safe Nuclear Technology

April 9 ( The Academic Council affiliated the Nuclear Energy Agency of Mongolia held its regular meeting in Ulaanbaatar on April 08, 2014.

During the meeting participants exchanged views on world experiences how leading uranium miners allocate monetary fund in their State Treasury, its standard and volume, after which attended scholars issued recommendations relied on Mongolia's Nuclear Energy Law based on Article 28.9*.

Also, the meeting was purposed to give public understandings that proper using of safe nuclear technology would bring economic benefit. However there is a common understanding among public that uranium exploration is toxic, but scientists are trying to deny and concluded this misunderstanding is needed to fix.

Moreover, meeting attendees mentioned it is not a time to debate whether yellow powder and uranium are toxic or not, instead should introduce its radiation dose rates on consumption and promote public education to adequate information about safe uranium exploration in terms of ecology and environment compare to international standards.

Head of the Nuclear Energy Agency N.Tegshbayar emphasized, "Our Agency conducts an activity to commercialize the radioactive minerals into economic circulation".

Where Academician B.Chadraa added, "The one kg of uranium can produce energy equivalent to 2,100 tons of gasoline.

Therefore, we should give correct understandings to public, how it is significant and Mongolia will develop if to consider how important energy resources we have".

Following the meeting, direct-reading and alarming electronic personal radiation detector "Dose RAE 2" were handed to authorities of National Emergency Management Agency, Police Department, Central Intelligence Agency, General Staff of the Armed Forces, National Cancer Center, Nuclear Diagnostic Section of the Hospital No.1, Nuclear Research Center of the National University, University of Science and Technology, National Institute of Forensic Science, National Influenza Center and the State Central Veterinary Laboratory.

From the Nuclear Energy Law of Mongolia

Article 28.9. The license holder shall allocate monetary fund in the State Treasury as a guarantee of implementing his liabilities on protection of environment and prevention from nuclear and radiation accident.

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Nuclear Energy Agency Hands Out Dosimeters to Officials in Increasing Cases of Exposure

Ulaanbaatar, April 8 (MONTSAME) The Atomic Energy Authority of Mongolia is to give 'DoseRAE 2', electronic dosimeters for personal radiation dosage monitoring, to public officers who are exposed to radiation in their jobs.

In late years, a number of such staffers has gone up four times, the authority say, for highly radioactive nuclear technologies have been increasingly used in sectors of geology, mining, medicine, industry, food and agriculture.

The dosimeter will be given to the officers working for public agencies such as the National Emergency Management Agency, General Police Department, Intelligence Agency, General Headquarters of Armed Forces, National Oncology Center, State First Clinic, National University of Mongolia, and the National Veterinary Institute.

DoseRAE 2 is a compact, direct-reading and alarming electronic personal radiation detector. It uses a diode and a scintillation crystal to detect X- and gamma radiation, and provides real-time monitoring of personal dose and dose rate. The real-time radiation dose rate monitoring allows immediate reaction in case of radiation occurrences and thus reduces the radiation exposure. By measuring dose equivalent and dose equivalent rate, this radiation detector provides the functions of a dosimeter too. It also measures radiation exposure and exposure rate, which is appropriate for controlling the exposure of emergency responders to photon radiation.

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'Mongolian Fluorspar' Program Discussed

Ulaanbaatar, April 9 (MONTSAME) The Mining Ministry, together with the Mineral Authority and the Mongolian Fluorspar Association held Wednesday a discussion on the 'Mongolian Fluorspar' program.

'Mongolian Fluorspar' is one of a few sub-programs that have been approved to be carried out within the State Policies on the Minerals sector - with others being 'Mongolian Gold' and 'Mongolian Coal'.

At the meeting, the gathered consisting of policy makers and representatives of professional associations discussed facing issues and prospects of fluorspar production in the nation.

The representatives of the Mongolian Fluorspar Association said standard prices and taxation have become the most complicate issues of fluorspar production, and noted this program should aim at growth of exploration and profits. They also said that prices should be set according to an agreement between buyer and seller.

Fluorspar is not among top export items in Mongolia, but it is playing an increasingly important role in the country's economy. Total fluorspar production of 43 operational mines and 17 enrichment plants of the nation measured at 330 thousand tons in 2013, making it one of top five producers in the world.

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FRC & UNDP Organizing "Inclusive Insurance 2014" International Forum on April 16-17

Ulaanbaatar, April 9 (MONTSAME) The Financial Regulatory Commission (FRC) of Mongolia and the United Nations Development Programme (UNDP) will host an international forum on "Inclusive Insurance-2014" on April 16-17 in Ulaanbaatar.

This jointly organized forum will be a first for the financial sector in Mongolia. International delegates will come from some ten countries, including South Korea, China, Japan, Hong Kong, Taiwan, India, Bangladesh and Philippines. Moreover, it will be participated by Mr Ch.Ulaan, the Minister of Finance; Mr D.Bayarsaikhan, a chairman of the FRC; and by Ms Sezin Sinanoglu, the UNDP Resident Representative to Mongolia.

An important objective of this forum is to encourage sharing the knowledge and experiences on inclusive insurance from international and local speakers. The forum will bring together international insurance experts, international insurance regulators, technical insurance experts and development agencies, Mongolian political and business leaders, Mongolian insurance companies and financial sector stakeholders. The Insurance Association of Mongolia will organize an expo of insurance services in Mongolia during the Forum.

2014 is an important milestone year for Insurance in Mongolia. 2014 is the 80th year of Insurance in Mongolia and the 20th year of operations for FRC. The 5 year UNDP supported project funded by Luxembourg Government "Capacity Development for Micro-Insurance Market in Mongolia" will be completed in May of this year. In April as a result of this project new and easy to access insurance products for gers and small houses at an affordable premium will be available in the market. A number of insurance companies have been actively designing these new products with assistance from the UNDP project team. The product will be available to a significant proportion of the Mongolian population for the first time.

The forum organizers see the forum as an ideal platform to launch the next stage of development of the insurance industry in Mongolia.

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Mongol Daatgal: Insurance sector set to experience huge growth

March 2014 (Worldfolio) As GDP per capita in Mongolia rises from $2300 in 2011 to a forecast $8000 by 2016 there will be an increasing demand in insurance coverage in the areas of education, health and pensions. As the banking industry also develops, MONGOL DAATGAL are one of the companies expecting to benefit from the anticipated long term growth in this budding sector. In an interview with United World, Chief Executive Officer of MONGOL DAATGAL Batzul Tumur-Ochir explains how the company is evolving as the demand for insurance grows deeper

How do you see the future of the insurance sector in the upcoming years? What are the major challenges that is currently facing?

For example, on average, a person buying insurance in Mongolia pays 10 dollars whilst the world average is 200 dollars, which implies a lot of increase. 

Mongolia became the fastest growing economy in the world. And insurance companies benefited from this growth as well. In 2011 and 2012, insurance companies had 30 to 40 percent increase in premium income. It is as a result of the mining sector growth and lots of investors are coming in and they all buy insurance. Insurance is getting well known in Mongolia we expect a long-term growth in the coming years. 

Around 5 to 10 years ago, people saw insurance as an expense without understanding the benefit. And at the same time, the government also made some insurance products mandatory in 2012, which increased the market by 15 billion MNT. 

The banking sector is one of the most developed sectors in the financial sector of Mongolia. Commercial banks, such as Khaan Bank, have 500 branches and Xac Bank has 200 branches, so these banks have an extensive network. In 2010, the banking law was changed which enabled buying insurance services through banks and by using the banking network to reach out to people who have savings, the insurance sector will be able to experience a big growth. We are cooperating with them which all got a license from the FRC last year. 

The cooperation is currently in its project phase but it is going well. These are some of the main factors influencing the growth of the insurance sector. 

The number of companies that want to invest in Mongolia is increasing, but in order to meet with the increasing demand, additional capital is required and maybe international insurance brands will start coming to Mongolia. From where does the company plan to finance this growth? 

Mongolian companies are still small and we have the highest capacity. Even though there is a huge interest, not many insurance companies are coming into Mongolia. 

There are still brokers waiting to provide their services to clients. So we have to be prepared for those moments because have to be ready for big growth. Without growing, it is really tough to benefit from this growth and the government support is essential in order to encourage local companies. The line in the law to protect local companies from international companies is quite blurred, so the law of insurance needs to be modified. The last modification was in 2004 and it has already been 10 years since. 

The capital requirement is 5 billion MNT and it has been this much since 2006. So, from my understanding, the capital requirements shall be changed regularly, every year or few years. Now there are 17 companies in the market, which is too many. The guarantee policy is not allowing us to invest our reserve funds.  

How important it is to cooperate with US reinsurance companies for Mongol Daatgal?

We don't have a specific strategy in our company for each reinsurance market. 

Less communication partners compare to Europe or USA so I think we are open to anyone. If there is a new partner coming interested in life insurance we are totally open for them. Mongol Daatgal has some responsibility to develop this market using our brand, network and client base so we have a project for that to establish a life insurance company. So I will be happy if there is an American company who is interested in that project. I will be open to any type of cooperation and we are seeking some investors who can bring not only money but also expertise to the insurance sector. 

One of the reasons is the brand of course. We have been in the market for more than 75 years so everybody knows our name. We have an extensive network, our human resource and 24 hours services throughout the country to be able to reach our clients at any time. As for other companies, they also have branches but are not recognized and as well established as ours. And of course comparing to other companies the risk taking capacity is bigger. And of course we are independent, meaning we don't belong to any political party or business group. 

We don't have any bank attached to us, which means we can protect our clients independently regardless of the influence from other people or investors. That is the main point and that is the difference. I think everybody would say we are professionals but when you deal with Mongol Daatgal or deal with another company the client will see that they always come back. Sometimes they leave and say that there are 17 more companies where they can go and after 2 years they come back because they didn't pay. 

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JKC LLC: Helping construct Mongolia's great infrastructural journey

March 2014 (Worldfolio) While Mongolia is a huge country in terms of territory, its population is sparsely distributed. To help the nation develop, the government has prioritized the construction of better infrastructure, particularly housing and roads. Having seen a huge opportunity for business in this area, Mr. Amgalan Baljinnyam set up his company JKC LLC ten years ago. He talks to United World about his, and Mongolia's great infrastructural journey

Mongolia opened to international trade in 1990 and even though it is located between two giants, Russia and China, it is not easy to transport commodities because of the lack of adequate infrastructure. How can the road sector contribute to the development of the country?

One of the main and first core ideas is to have a good political relationship with these two countries. The second important thing is to have a good relationship with the companies of these two neighboring countries. And once we have a good relationship with these companies, we have to have good logistics and connection in terms of roads, air and any other form of transportation. 

For the economy to prosper we need relations with these two neighbors and logistics and transportation are the core. JKC was established in order to meet this demand.

How did the idea come to you to set up the company?

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Gashuuni Gol LLC: Roads to connect traditional Mongolia to modern urbanity

March 2014 (Worldfolio) As Mongolia develops, with the continual merging of old rural Mongolia and new urban Mongolia, building and improving the country's infrastructure has naturally become an essential factor in this growth. Under the government's Road Development Plan 2012-2016, Gashuunii Gol is one of the companies that have been selected to help implement this massive infrastructure project. CEO of Gashuuni Gol, Ms. Altantsetseg, talks to United World about her company's, the plan's progress and the future of the sector

The Government of Mongolia has established a Road Development Plan for 2012-2016 to connect all major cities and towns to the capital by paved road; meaning nearly 5000km of road and an investment of 1.2 billion dollars. In your opinion, what are the main economic and social benefits of this ambitious project?

Mongolia's populations consist mainly in nomads and live stock herders who are spread out in the whole territory of the country. Thus, the main objective of the current project, implemented by the current Government is to connect the two Mongolia's: the rural, traditional, one with the urban one. 

Its realization began this year and the current Government, also called as the Reform Government, pays specific attention to its implementation and it strives to connect 6 provincial centers with Ulaanbaatar through paved freeways just within in 2013. In the framework of this project the Government has started to cooperate with 9 road construction companies since spring of this year. There were some complications with the project financing, but thanks to the successful trade of State owned Chinggis Bonds and efficient disbursement of funded capital the project was able to be financed. At the moment, from 3 to 4 provincial towns are ready to be connected with Ulaanbaatar, and this fantastic project has just began. 

With development of the roads comes also the development of the infrastructure. In this relation, the construction of roads is the number one objective for Mongolia's economy and infrastructure. I want to say it again – the current Reform Government has included this project in its Master Plan and, as road constructors, we are very happy about its successful realization.

At this point, I would like to introduce you a little bit about our company. Based on the direct agreement concluded this year with the Government of Mongolia our company was selected as contractor to build the paved road between Undurkhaan and Choibalsan (regional towns of the Khentii province in the East of Mongolia) with a length of 27, 75 km and our staff, of course, is very happy about it.

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Thomas Air LLC Wins Aerial Mapping Tender in India

Ulaanbaatar, April 8 (MONTSAME) Mongolia-invested "Thomas Air" LLC has been authorized to participate in great construction works in northern regions of India.

The Mongolian company got the right by winning a four-phase tender which was announced in January this year by the "Survey of India", the country's central engineering agency in charge of mapping and surveying, for aerial mapping works. The tender attracted some ten aviation companies from Mongolia, Australia, Canada, France, Indonesia and Spain, and was concluded on April 1.

As winning the tender, the "Thomas Air" is to establish a contract with the Indian side for attending the great construction projects of urban development, railways and highways, namely in southern part of the Himalaya Mountains.

This is the second time the Mongolian company exports products and services abroad. Earlier, the Mongolian Airlines (MIAT) rented its "Boeing" airplane to Bangladesh.

The "Thomas Air" LLC was established in 2011, bringing Swiss made Pilatus PC-6, US-made Maule M-7 together with US-made Air Tractor AT-602, all brand new aircrafts. This type of aircraft can be used not only for mining projects and tourism but also for emergency medical services, natural disasters, rescue operations, wildfire patrols, aero geological survey, election campaigns as well as for other various public services. Even though the company was established on January 2011, Thomas Air LLC has made remarkable achievements for successful aviation project.

Thomas Air LLC has been certified by Mongolian Civil Aviation Authorities (MCAA) with Air Operation Certificate (AOC) in June 2011, and started providing with air services ever since.

The company offers passenger, cargo charter flights, medical evacuation flights, flight school, agricultural crop dusting flights, aerial spray, forestry and graze land, aero tourism, aerial photography flights, search and rescue flights, geological survey flights, and airstrip consulting.

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Police Department Defends New Uniforms, Says They're More Comfortable, Lighter

April 9 (UB Post) The police serving in Ulaanbaatar have started donning their new uniforms from Friday. Design, production and budget issues for the uniforms caused many to question the new apparel.

Concerning the new uniforms, Senior Official of the Media Relations Division at the General Police Department, Captain Yo.Lkhagvasuren explained, "The city police have been wearing their spare uniforms which were the last ones in reserve since 2007. The public was critical of how much budget was spent for the uniforms. However, the budget was not allocated from the state budget but through the fund for police duty outfits."

Another reason that the public is critical is that the uniforms were made in Turkey, while national tailoring factory Burte had no active projects. Authorities explained that the Turkish company was selected through an open tender as domestic companies didn't meet criteria for outfit material and design.

"If the uniform was made in Mongolia, it would've cost 150,000 MNT and the first batch would've been ready by July…Each set of uniforms cost 107,000 MNT and the design and quality meets world standard police uniforms," Yo.Lkhagvasuren added.

Bayangol District traffic police G.Purevbat who was wearing the new uniform claimed, "The new uniform is very comfortable and light which I like. Its quality has improved a lot compared to previous uniforms. I can easily wipe off dusts and it doesn't interfere with my constant walking and other labor on duty."

He also highlighted, "The names of police officers, personal serial and blood types are written on each uniform, so citizens can feel more secure interacting with the police. The blood type on the uniform will help hospitals treat injured police personnel in urgent need of aid in critical conditions."

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U.S. Defense Secretary Arriving Thursday to Discuss Regional Security

Ulaanbaatar, April 9 (MONTSAME) The US Secretary of Defense Mr Chuck Hagel is to pay a visit to Mongolia on Thursday.

Mr Chuck Hagel is on his fourth official trip to the Asia-Pacific region to convene a meeting with counterparts in Japan, China and Mongolia.

Arriving in Mongolia, Mr Hagel will meet with Mongolian government and military leaders to discuss regional security matters and ways to enhance the U.S.-Mongolian cooperation. This is the second U.S. Defense Secretary's visit to Mongolia, and the first since 2005.

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Mongolian Foreign Relations Surge Indicates New Activist Agenda for 2014

by Alicia Campi

Asia Pacific Bulletin, No. 254, East-West Center, Washington, D.C.

Publication Date: March 25, 2014

Alicia Campi, President of the US-Mongolia Advisory Group, explains that "It is quite evident that in 2014 Mongolian President Elbegdorj, who labels himself the 'President to Bridge Mongolia to the World,' will continue his diplomatic offensive and overseas travels."

2013 was a year when Mongolian foreign policy initiatives expanded the visibility of mineral rich Mongolia throughout Northeast Asia and the world. This was not just a happenstance, but a well-thought out concept of Mongolian President Tsakhia Elbegdorj and his pro-active Foreign Minister, Lu Bold, to raise the profile of the country on the international stage. Using the 100th anniversary of the establishment of Mongolia's contemporary diplomatic service as the rationale for its new activism, the Mongolian government proclaimed it would be guided by a "one-window" foreign relations policy. This new initiative, which emphasizes coherence of national foreign policy and actions through active dissemination of upbeat information about Mongolia's stability and transparent environment for foreign investors, was most certainly an attempt to counter the dramatic 43 percent decline in foreign investment in the country during the first half of 2013 and a barrage of pessimistic commentary in the international media.

To increase Mongolia's global visibility, new embassies and consulates were opened in Brazil, Indonesia, Istanbul and Bishkek. In addition, the Mongolian Ministry of Foreign Affairs (MFA) publicly announced in its 2012-2013 action plan its intention to establish diplomatic relations with all member states in the United Nations. In 2013 alone, bilateral relations were established with 11 nations, mainly in the Caribbean, Pacific Islands, and Africa, bringing to 179 the number of countries with which Mongolia now has diplomatic relations.

Perhaps the most dramatic move by the Mongols was their outreach to promote cooperation with the World Economic Forum of Davos, Switzerland by signing a memorandum with the Forum to assist in "shaping the development strategy of Mongolia and making a great stride in the promotion of Mongolia at the international level." Last September the Forum coordinated a mini-dialogue in Ulaanbaatar on potential Mongolian developmental scenarios, especially connected to mining, which were further discussed in January at the World Economic Forum at Davos.

Mongolia took advantage of US support for its two-year term as chair of the Community of Democracies (COD) since 2011 to develop its profile as a global model of democracy. Former US Secretary of State Hillary Rodham Clinton in July 2012 participated in the COD Governing Council meeting and its International Women's Leadership Forum to promote women's entrepreneurship, access to natural resources, and leadership in the private sector. At that time she famously stated: "I say to democracy doubters to come to Mongolia." When Mongolia concluded its term as chair by hosting the 7th COD Ministerial Conference in Ulaanbaatar in April 2013, some 800 delegates from 103 countries attended, including US Deputy Secretary of State William J. Burns and Nobel Peace Prize winner Aung San Suu Kyi from Myanmar, attesting to Mongolia's success in expanding its international profile.

During 2013, Mongolian officials paid 14 high-level visits to foreign countries. President Elbegdorj traveled extensively throughout the year, including an October visit to Chicago to open an Honorary Consulate, after his participation in the 68th United Nations General Assembly in New York. He made working visits to Japan and Kyrgyzstan and state visits to Norway, Vietnam, Myanmar, Thailand, Singapore, and North Korea. His four-day visit to North Korea in October as part of the 45th anniversary of the establishment of bilateral relations was among the most widely-reported events of the year in Northeast Asia. Although a variety of cooperative agreements were signed there, an expected summit meeting with new leader Kim Jong-un did not materialize. However, this disappointment has not unduly affected the growing closeness of the relationship, and Mongolia is publicly suggesting it should be included in any resumption of Six-Party talks.

The Mongols in 2013 hosted 21 major foreign leaders, including US Vice President Joe Biden in August. Two heads of states—the President of Poland and the Governor General of Canada—visited Mongolia, and the country celebrated the 50th anniversary of the establishment of diplomatic relations with Britain with the visit of Foreign Secretary William Hague in mid-October—the first in 17 years. A month prior, former British Prime Minister Tony Blair was in the country to sign a one-year agreement with the Mongolian government for advisory services on education, health, mortgage loans, and foreign investment. It is widely speculated that he is involved in the complicated negotiations between the Mongols and Anglo-Australian mining giant Rio Tinto over the management and expansion of the copper and gold deposit at Oyu Tolgoi in the Gobi desert, southern Mongolia.

Mongolia signed 63 bilateral and international agreements in 2013, including agreements with the United States, the European Union, Japan, and China. No agreements were signed with Russia, a situation that the Putin government must view as a worrisome sign of the continuing fragility of Russo-Mongolian relations. Meanwhile, last year Mongolia indicated its intention of becoming a more significant actor in Asia and the global community through the launch of a number of its own initiatives. These include the International Cooperation Fund (IFC), a project through which Mongolia utilizes its soft power diplomacy to develop bilateral cooperation by sharing its experience in democratic transition with other emerging democracies. It should be expected that under this rubric Mongolia will continue to be active in North Korean diplomatic efforts.

Last October the country also proclaimed the "Ulaanbaatar Dialogue on Northeast Asian Security" to strengthen strategic stability and develop Northeast Asia security cooperation and confidence building, and in December it hosted the first tripartite Mongolian-Russian-Chinese Northern Railway Corridor consultative meeting with the goal of developing a comprehensive plan for a new northeast rail transport corridor in the first quarter of 2014.

It is quite evident that in 2014 Mongolian President Elbegdorj, who labels himself the "President to Bridge Mongolia to the World," will continue his diplomatic offensive and overseas travels. In 2014 his first foreign visit was to Davos, Switzerland in January where he discussed at the World Economic Forum's annual meeting how to more effectively integrate Mongolia into the complexity and interconnectivity of the globalized economy. His proposal was accepted for Mongolia to host the Forum's annual East Asian Summit in 2016. Since this year will commemorate the 65th anniversary of Sino-Mongolian ties, it will be a significant year for that all important relationship with numerous cultural exchanges, investment forums, and round table scholarly discussions planned.

The Mongols remain hopeful that there will be a high-ranking US official visit this year, which will be another visible sign of continuing American interest in Mongolia and provide some balance to all the Sino-centric activities. All these indicators point to an acceleration of Mongolian activism in the Asian region and beyond in 2014.

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Mongolia: Activist and Ambitious

In the past year, Mongolia has experienced a vast proliferation of diplomatic contact with its region and the world.

By Ankit Panda

April 8 (The Diplomat) Mongolia is fast becoming an ambitious country worth watching in the Asia-Pacific. Given its neighborhood, it is perhaps unsurprising that most attention is focused on its two (much) larger neighbors, but under the leadership of President Tsakhiagiin Elbegdorj the country's foreign ambitions have grown considerably.

Nations from the world over have experienced high-level contact with Mongolia in the past year. Part of Mongolia's diplomatic explosion was driven by a poor foreign direct investment outlook in the beginning of 2013—as a resource rich country, Mongolia's economic well-being is highly contingent on the health of its mining sector. A 43 percent decline in overall foreign investment (Mogi: -54% in 2013), and a 32 percent decline in the mining sector, was thus cause for concern. Mongolia used the occasion of the 100th anniversary of its establishing a professional diplomatic service to pursue its activist foreign policy worldwide — it has set the goal of establishing bilateral diplomatic relations with all UN member states. At the same time, Mongolia, under Foreign Minister Lu Bold, has adopted a "one window" policy wherein its diplomats disseminate information globally about Mongolia as a hospitable destination for foreign direct investment.

President Elbegdorj himself traveled across Asia and the world to improve Mongolia's presence on the world stage. He traveled to Japan, North Korea, Thailand, Singapore, Myanmar, Kyrgyzstan, Vietnam, and Norway. The North Korea visit emphasized that Mongolia sought to play a great role in Asia by suggesting that it be incorporated into the Six Party Talks on North Korea's nuclear program (should those ever resume). Mongolia's desire to act as a mediator between North Korea and the rest of the world highlights its regional ambitions.

World leaders returned the favor for Mongolia's outreach efforts by making visits to the country in return. As The Diplomat reported recently, U.S. Defense Secretary Chuck Hagel's April Asia tour includes a stop in Ulaanbaatar — the first visit by a U.S. Defense Secretary to the country in nine years. Hagel's visit seemed to be a reward for Mongolia's outreach efforts, highlighting a growing U.S. strategic interest in the country (which is located between two major U.S. rivals). That Vice President Joe Biden visited in August 2011 further highlights a growing interest in Mongolia in the United States. Apart from the U.S., Mongolia managed to draw leaders from far outside its region, including Poland and Canada. Furthermore, British Foreign Secretary William Hague visited the country on the occasion of 50 years of diplomatic relations between Britain and Mongolia. Former British Prime Minister Tony Blair is also serving as an adviser for the Mongolia government on a trove of newfound copper and gold wealth in the Gobi desert.

Further, as Alicia Campi, president of the U.S.-Mongolia Advisory Groupnotes, the country signed "63 bilateral and international agreements in 2013, including agreements with the United States, the European Union, Japan, and China" (no new agreements with Russia, however). The Ulaanbaatar Dialogue on Northeast Asian Security and the International Cooperation Fund represent two Mongolia-led initiatives that showcase its interest in becoming a major security player in the region. The Ulaanbaatar Dialogue is aimed at reducing the air of mistrust currently present between the major Northeast Asian states including Japan, South Korea, and China, and also mediating the region's engagement with North Korea via both Track-I and Track-II dialogue.

President Elbegdorj has succeeded remarkably in helping Mongolia proliferate worldwide both diplomatically and economically. While its interest in becoming a major player regionally is driven first and foremost by its economic needs, it sees a niche for itself in security matters. Mongolia has so far been the least talked-about of the five Northeast Asian countries, but this is set to change with its activist diplomacy and ambitious foreign policy.

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The EU-Mongolia Economic Partnership: The Mining Sector and Beyond

(European Institute for Asian Studies) --

Author(s): Kateryna Rolle

Published: April 2014


This briefing paper marks the fourth and final in a series of papers on Mongolia and its relationship with the European Union (EU). The preceding gap between the end of the Country Strategy Paper (CSP) 2007-2013 and the beginning of the CSP 2014-2020, as well as the signing of the yet-to-be-ratified EU-Mongolia Partnership Cooperation Agreement (PCA) presents an occasion to reflect on the current state of Mongolia, the success of EU-Mongolia relations, the development of the relationship from 1989 until 2013, and the prospects for further areas of cooperation between the two parties. As a result, this series of papers will look closely at the areas where cooperation has already been administered and the prospects for continued collaboration in the relevant areas with regards to the priorities of the EU and Mongolia, as well as new areas which should be considered for cooperation from 2014-2020. This fourth paper outlines the state of Mongolia's economy, focusing particularly on trade; urban planning; the environment and the mining sector; foreign direct investment; and education and employment. The paper will address the cooperation already achieved between Mongolia and the EU in these areas, and finally, it will assess where cooperation with the EU could be further administered in the next few years through the PCA.

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Speaker of Myanmar Thura Shwe Mann to Conduct Official Visit to Mongolia, April 12-15

April 9 ( According to the Foreign Ministry of Mongolia, a delegation of the Myanmar Parliament led by Speaker of the Lower House Thura U Shwe Mann is conducting an official visit to Mongolia on April 12-15, 2014.

The Assembly of the Union (Parliament) is the national-level bicameral legislature of the Republic of the Union of Myanmar established by the 2008 National Constitution.

The Assembly of the Union (Pyidaungsu Hluttaw) is comprised of Upper and Lower Houses, the House of Nationalities (Amyotha Hluttaw) and the House of Representatives (Pyithu Hluttaw).

Mongolian delegates led by the President Ts.Elbegdorj conducted a three-day state visit to the Republic of the Union of Myanmar on November 18-20, 2013, and during the visit President Ts.Elbegdorj held an official talks with the Speaker of the Lower House Thura U Shwe Mann discussing to broaden bilateral relations and cooperation at the Myanmar Parliament Palace.

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Standing Committee Backs Joining Antarctic Treaty System

Ulaanbaatar, April 8 (MONTSAME) The parliamentary Standing committee on security and foreign policy Tuesday considered that Mongolia needs to join the Antarctic Treaty System (ATS).

A majority of the committee backed this matter "because Mongolia must run at a race of getting common properties of humankind while actively participating in the international relations and cooperation in globalization era".

A presentation about the ATS was made by L.Bold, the Minister of Foreign Affairs. Antarctic Treaty and related agreements, collectively known as the ATS regulate international relations with respect to Antarctica, Earth's only continent without a native human population. For the purposes of the treaty system, Antarctica is defined as all of the land and ice shelves south of 60°S latitude. The treaty, entering into force in 1961 and currently having 50 signatory nations, sets aside Antarctica as a scientific preserve, establishes freedom of scientific investigation and bans military activity on that continent. The treaty was the first arms control agreement established during the Cold War. The Antarctic Treaty Secretariat headquarters have been located in Buenos Aires, Argentina, since September 2004.

The main treaty was opened for signature on December 1, 1959, and officially entered into force on June 23, 1961. The original signatories were the 12 countries active in Antarctica during the International Geophysical Year (IGY) of 1957–58. The twelve countries had significant interests in Antarctica at the time: Argentina, Australia, Belgium, Chile, France, Japan, New Zealand, Norway, South Africa, the Soviet Union, the United Kingdom and the United States. These countries had established over 50 Antarctic stations for the IGY. The treaty was a diplomatic expression of the operational and scientific cooperation that had been achieved "on the ice".

In 1972-1974, Mongolia had its scientists participated for the first time in international research team on Antarctica. Last years, the Mongolian scholars were conducting researches in Antarctica, being involved in international research group. Their works such as weather forecast and sea water and minerals researches have contributed to estimating of tendencies of global climate changes. If Mongolia joins the ATS, it will be able to send its independent research group to Antarctica and to install there its station.

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MOU Established Between North Korea and Mongolia on Creating JV Company

Ulaanbaatar, April 8 (MONTSAME) A memorandum of understanding on setting up Mongolia-Democratic People's Republic of Korea /DPRK/ friendship joint company between governments was inked in Pyongyang April 2, reported website the same day.

Present at the signing ceremony from the N.Korean side were Ri Ryong Nam, the Minister of Foreign Trade who doubles as chairman of the DPRK side to the Inter-governmental Committee for Consultation in Economy, Trade, Science and Technology between the DPRK and Mongolia, also Hwang Min, a vice-minister of Agriculture who is also chairman of the Livestock Management Committee in Sepho Area, and officials concerned. Mongolia was represented by the Minister of Industry and Agriculture Kh.Battulga who is chairman of the Mongolian side to the Inter-governmental Committee for Consultation in Economy, Trade, Science and Technology between the DPRK and Mongolia, and M.Ganbold, the Ambassador Extraordinary and Plenipotentiary of Mongolia to the DPRK, and his Embassy officials.

A MOU was also signed between the Ministry of Foreign Trade of the DPRK and the Ministry of Labor of Mongolia.

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Mongolia looks to boost ties with Australia: Interview with Foreign Minister Bold

April 8 (Australia Network) Mongolia is looking to boost its trade with Australia, but complex tax arrangements and doubts over the stability of financial systems have created concerns for Australian companies. 

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Social, Environmental and Other

World Justice Project: Environmental Law for Effective Conflict Resolution in Mongolia

Using Environmental Democracy Legal Indices to Enhance the Rule of Law and Improve Environmental Law in Mongolia, Centre for Citizens' Alliance


Improper Functioning of Government Agency

Under the Environmental Protection Law of Mongolia and its Constitutional Law, the State of Mongolia and its institutions have the statutory duty to protect the environment and its natural wealth from degradation and guarantee a safe and healthy environment to its citizens. However, these incumbent state agencies and institutions have become defunct and are intentionally sabotaging its Constitutional mandate. Instead of fulfilling their statutory and constitutional duties, the State-officials of the environmental protection agencies have been "selling" the mineral deposits to local and international mining industries, in the name of issuing licenses. The state officials do not follow any strict procedures for issuing these mineral prospecting licenses, rather it is based on favoritism by higher or middle ranking state officials or influenced by a huge amount of bribes.

Lack of Transparency and Access to Justice

As a result of these corrupt official practices, the common masses, especially the community of herders, nomads and indigenous people, have suffered from environmental human rights violations. The unregulated issuance of mining licenses, without proper environmental impact assessments and public hearings, have led to environmental damage and large scale health, livelihood and displacement issues to the local communities. People do not have knowledge of any procedures to engage in the permitting and licenses processes, nor do they have access to any grievance redress system to question the decision of such authorities.

Land Tenure Issues

Local people have struggled against the operations of mining companies in the absence of fair government decision-making  and corrupt state officials. In case of indigenous communities, they are tied to their lands, forests and weather conditions, and their livelihood is mostly forest-dependent. These widespread mining operations are damaging the cultural identities and existence of the indigenous communities in many parts of Mongolia, raising the alarm for urgent need to implement the rule of law and procedural justice in the working of state agencies.

Civil Outrage

Around 2,000 local communities and civil society groups have started to raise their voices against the illegal mining operations and improper issuance of mining licenses to protect their pastures, water resources, forests and other ecosystem wealth. Due to public pressure, a law that prohibits exploration of the mining deposits in forest and river areas was adopted in 2009. However, many national and foreign mining companies lobbied the government to make amendments to the law in 2013. This agitated the NGOs involved and caused them to change their methods of struggle to protest against the proposed amendments to the 2009 law. They began using different tools in their protests, particularly a civil society group called 'Gal Undesten' used guns and other explosive weapons against the Chinese companies that were exploiting the gold deposits at the riverhead places. All this public turmoil has disrupted the civil order and security in Mongolia.


1.    The current environment protection law lacks provisions on accountability of the state officials who make policy decisions, ignoring the procedural laws;

2.    Due to lack of public participation in the licensing procedures, state officials have become deeply corrupt and seldom participate in open public discussions with communities and local people;

3.    There is no proper mechanism to question and regulate the actions of State and state officials who do not fulfill their statutory obligations to protect public commons and Constitutional rights of the people;

4.    State does not comply with Principle 10 requirements of access to information, public participation and access to justice in making environmental decisions affecting common people's life and existence;

5.    The laws do not reflect the environmental democracy principles.



The purpose of the Environmental Protection law of Mongolia is " regulate relations between the State, citizens, business entities and organizations in order to guarantee the human right to live in a healthy and safe environment, an ecologically balanced social and economic development, the protection of the environment for present and future generations, the proper use of natural resources and the restoration of available resources" and this law shall protect the following conservation resources from any adverse effects in order to prevent ecological imbalance:

1.    Land and soil;

2.    Underground resources and mineral wealth;

3.    Water;

4.    Plants;

5.    Animals and wildlife; and

6.    Air

Moreover, Mongolian Constitution states that "The land, its subsoil, forests, water, fauna, and flora and other natural resources are subject to national sovereignty and state protection."          


The program aims to assess whether Mongolia's environmental protection laws are procedurally robust and democratic, and have the teeth to achieve the desired results of effective environmental conflict resolution.  The lead implementer, CCA will study regulatory laws and its implementation upstream, while its enforcement and dispute resolution capability downstream.   The principles of administrative fairness in environmental decision-making, recently drafted by The Access Initiative (TAI) of World Resources Institute (WRI) will be used to encourage and measure the participation of civil society in all stages of the decision-making process.  


These principles of environmental democracy- namely, legality, rationality, impartiality, transparency, accountability, objectivity, publicity, inclusivity and archiving- will help evaluate environmental governance in Mongolia. Identifying the gaps in the procedural framework, the law governing stakeholder participation, access to information and legal review of institutional decisions would be amended through legal and policy recommendation using TAI's administrative fairness principles. 

After completion of recommendation, CCA would be able to measure the results of implementation within a specific sector, for instance, Right to clean water, using these principles and indices like access to water, water quality, community watershed forum participation, reduced hospitalizations, and sustainable development.


Intended Outcomes

The program will strengthen and enhance the Rule of Law in environmental conflict resolution both, at high-level institutions and at community level. By increasing transparency and accountability, this program will draw attention to further institutional or legal challenges and create room for improvement in the rule of law as they pertain to environmental factors.  The implementing team of CCA will analyze how environmental factors intersect with current WJP ROLI factors. 

Taking Factor 6, Regulatory Enforcement as a starting point and expanding consideration of the rule of law in the environmental sector, the program could illustrate how effectively existing environmental regulations are enforced. On the other hand, it could highlight how the lack of certain procedural principles in environmental law provisions and regulations (for instance, air, water, etc.) affects the Rule of Law issues like environmental protection and the Right to Life. 

Currently, the ROLI does not factor in which activities a government chooses to regulate or how much regulation of an activity occurs. The analyses produced by Mongolia's implementing team may open doors for further research in ROLI context.

ROLI Factors to be Strengthened

Regulatory Enforcement ROLI Subfactors 6.1 and 6.2 (Mongolia has a score of 0.49 and 0.47 respectively)

·         Fundamental Rights ROLI Subfactors 4.1 and 4.2 (Mongolia has a score of 0.67 and 0.63 respectively)

·         Open Government ROLI Subfactors 5.1, 5.3, and 5.4 (Mongolia has a score of 0.38, 0.25, and 0.28 respectively)


·         IUCN Academy of Environmental Law

·         World Resources Institute

·         Environmental Law Institute

·         American Bar Association Section of Environment, Energy, and Resources


Program Status: Active

Program Type: Partner

Region: South Asia

Program Countries: Mongolia

Rule of Law Index Factors: Fundamental Rights (Factor 4), Order and Security (Factor 5), and Regulatory Enforcement (Factor 6).

Issue Areas: Environment, Government, Human Rights, and Security and Law Enforcement.

Link to project


Mongolia Celebrates the 150th Anniversary of Its First Orthodox Service

The first Liturgy was performed at the Holy Trinity Church in the Russian consulate.

April 4, 2014 (PRAVMIR) At the central post office in Ulan Bator, a ceremony introducing collectible envelopes marking the 150th anniversary of the first Orthodox service in Mongolia was held.
The first Divine Liturgy was served on April 3, 1864, at the Holy Trinity Church in the building of the Russian consulate in Urga (the old name of Ulan Bator), headed by Fr. John Nikolsky a priest from the Transbaikal. This day is also considered the birthday of the Holy Trinity parish of the Russian Orthodox Church in Mongolia, the press service of the Department for External Church Relations noted.

The parish was closed during the Soviet regime. Church life was restored in the 1990s. In the summer of 2001, Metropolitan Kirill of Smolensk and Kaliningrad (now Patriarch of Moscow and All Russia) laid the foundation stone for the new Holy Trinity Church, the construction and consecration of which took place in 2009.

Celebrations at the central post office were organized by initiative of the Holy Trinity parish in Ulan Bator and the Russian Embassy in Mongolia. It was attended by the embassy's staff, the heads of Rossotrudnichestvo (Federal Agency for the Commonwealth of Independent States) in Ulan Bator, Orthodox parishioners, the staff of the Mongolian central post office, as well as Mongolian media representatives. The rector of the parish is Fr. Alexey (Trubach).

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Mongolia–U.S. Project Promotes Healthier Lifestyles

Washington, April 7 (U.S. Department of State) — Heart disease and stroke account for more than one-third of all deaths in Mongolia. Although they are among the most preventable of diseases, they are also among the most widespread and costly health problems facing Mongolia today, according to the World Health Organization.

The Health Project, part of the U.S. Millennium Challenge Corporation's recently completed five-year, $285 million compact with Mongolia, focused on the early diagnosis, treatment and case management of noncommunicable diseases and injuries (NCDIs) like heart attack, stroke and diabetes. The project concluded in September 2013 and promoted healthier lifestyles across Mongolia.

The Millennium Challenge Corporation (MCC) and the government of Mongolia chose to invest in the project because of the strong link between a healthy workforce and economic growth, the MCC said. The project helped introduce screening processes for the diagnosis and treatment of hypertension, type-2 diabetes, heart disease, and breast and cervical cancers. It also helped refine laws, policies and regulations to help the Mongolian government promote a healthier public.

These diseases cause premature adult death and disability. The problem ultimately affects labor force productivity and the economic well-being of Mongolians.

Activities in the Health Project included training health workers, encouraging immunization campaigns, providing new hospital equipment, and working with food manufacturers to introduce more healthy recipes and food labeling — all of which are projected to benefit more than 1.7 million people and boost household income by $48 million over the next 20 years, the MCC said.


The project funded improvements across the health sector, from educating medical professionals to ensuring health clinics throughout the country had the proper equipment.

MCC and MCA-Mongolia, the local organization that implemented the country's MCC compact, worked together on developing national clinical guidelines on prevention, detection and treatment of cardiovascular disease; the training of 740 medical professionals, including cardiologists, neurologists, physical therapists, and nurses; and the creation of a registry system to collect patient data and allow for doctors and nurses to follow up as necessary.

The compact also funded the training of nearly 17,000 medical and administrative professionals, including clinicians and health care managers. Health screenings were made universally available and affordable to almost all families. More than 550 primary health care facilities in all nine districts of Ulaanbaatar, and in all 21 provinces of Mongolia, were equipped and prepared to screen virtually every Mongolian age 40 or older for diabetes, breast cancer, cervical cancer and hypertension. The project also invested $3.1 million for 83 types of state-of-the-art diagnostic equipment and supplies for local health clinics to serve Mongolians across the country, including throughout rural areas.


The Health Project also encouraged local and national initiatives to promote healthy lifestyles at workplaces, schools and communities by awarding grants and supporting government initiatives to increase public health funding.

The project boosted public awareness of risky behaviors, the need for — and benefits of — regular screening and testing, and the need to respond quickly to stroke and other NCDI danger signs. Public awareness campaigns to promote healthier lifestyles included appearances by MCA-Mongolia officials on 23 talk shows, more than a million information pamphlets, 60 TV programs, and 30 episodes of a drama series that was so popular people requested it be re-aired. Furthermore, in a first for Mongolia's blind people, Braille books on NCDIs were produced by the project, the MCC said.

An advocacy effort led by the Health Project supported the Mongolian parliament's early 2013 adoption of the national anti-tobacco law, which, among other things, restricts smoking in public places. The Health Project also awarded competitive grants to 219 organizations in the health sector and helped bring the world's top researchers to Mongolia by sponsoring two international NCDI conferences in Ulaanbaatar in 2010 and 2013 — the first conferences of this type in the country's history.

MCA-Mongolia also worked with private industry to promote better health, leading to a reduction of salt, sugar and fat in popular food brands. By 2013, the two major Mongolian bread factories had reduced salt content in their products by 12 percent, and a leading dairy producer now offers five reduced-sugar and three sugar-free products. The project also supported new food-labeling standards to protect and inform consumers.

By helping Mongolians of all ages and backgrounds improve their health, the country is better geared for a more prosperous future that will improve lives for all, the MCC said.

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