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Friday, April 25, 2014
Headlines in Italic are ones modified by Cover Mongolia from original
Oyu Tolgoi Dispute Weighs on Mongolia Tugrik as Capital Dries Up
By Michael Kohn
April 25 (Bloomberg) Negotiations between the Mongolian government and Rio Tinto Group over financing for the Oyu Tolgoi copper mine have dried up foreign capital and caused the tugrik to hit a new low, a fund manager said.
PCY closed flat at 6.5c Thursday
Prophecy Coal Announces New Member of Board of Directors and Executive Director of Subsidiary
VANCOUVER, BRITISH COLUMBIA--(Marketwired - April 24, 2014) - Prophecy Coal Corp. ("Prophecy" or the "Company") (TSX:PCY)(OTCQX:PRPCF)(FRANKFURT:1P2) is pleased to announce that on April 23, 2014 Masa Igata was appointed as a member of Board of Directors of the Company. Mr. Igata has more than 25 years' experience working in Asian financial markets and is the founder and CEO of Frontier Securities, the first foreign investment bank in Mongolia. Previously, he was Managing Director at Nikko Citigroup with a leading role in Japanese equity sales and investor relations. Mr. Igata now focuses primarily on advising resource companies in Mongolia. Mr. Igata received his Graduate of Law from Kyoto University and is a member of the Securities Analysts Association of Japan and Mongolian Stock Exchange.
The Company is also pleased to announce that its subsidiary, Red Hill Mongolia LLC which operates the Company's Ulaan Ovoo Project, appointed Orgil Sukhee as its Executive Director effective April 21, 2014. Mr. Sukhee is a Mongolian business executive with over 10 years' of successful commercial property development and management experience in Singapore (Shangri-La Hotel), Russia (CapitaLand), and Mongolia (MCS Properties LLC). Mr. Sukhee brings valuable hands-on experience in day-to-day staff management, execution of complex projects, detailed cost and procurement optimization, sales and marketing, finance, and government relations. Mr. Sukhee has a B.A. in Art and Social Science Economics from Moscow State Institute of International Relations (University) MFA Russia (MGIMO) and is fluent in Mongolian, Russian and English.
MSE News for April 24: Top 20 -1.25% to 15,498.43, Turnover ₮62 Million
Ulaanbaatar, April 24 (MONTSAME) At the Stock Exchange trades held Thursday, a total of 159 thousand and 722 shares of 24 JSCs were traded costing MNT 62 million 402 thousand and 338.00.
"Silikat" /118 thousand and 702 units/, "Merex" /17 thousand and 265 units/, "Remikon" /10 thousand and 926 units/, "Genco tour bureau" /6,200 units/ and "Bishrelt industrial" /2,229 units/ were the most actively traded in terms of trading volume,
… in terms of trading value--"Silikat" (MNT 28 million 843 thousand and 886), "Bishrelt industrial" (MNT 12 million 928 thousand and 200), "APU" (MNT six million 514 thousand and 380), "Uvs chatsargana" (MNT three million 427 thousand and 500) and "Gutal" (MNT two million and 212 thousand).
The total market capitalization was set at MNT one trillion 599 billion 520 million 714 thousand and 279. The Index of Top-20 JSCs was 15,498.43, decreasing by MNT 196.95 or 1.25% against the previous day.
New historic low, previous low v. USD was 1,787.59, February 27, 2014
BoM MNT Rates: April 24 Close
April MNT Chart:
BoM FX auction: US$14.2 million sold at ₮1,788.02, CNY28 million at ₮286.51, $80 million MNT swap offers accepted
April 24 (Bank of Mongolia) On the Foreign Exchange Auction held on April 24th, 2014 the BOM has received from local commercial banks bid offer of USD and CNY. The BOM has sold 14.2 million USD as closing rate of MNT 1788.02 and 28.0 million CNY as closing rate of 286.51.
On April 24th, 2014, The BOM has received MNT Swap agreement offer in equivalent to 80.0 million USD from local commercial banks and accepted the offer.
GoM Bond Auction: Announced ₮20 Billion 3-Year Bills Sold at Premium, Average Yield 12.74%
April 23 (Bank of Mongolia) Auction for 3 years maturity Government Bond was announced at face value of 20 billion MNT and each unit was worth 1 million MNT. Face value of 20.0 billion /out of 30.0 billion bid/ Government Treasury bill was sold to the banks at premium price and with weighted average yield of 12.74%.
Information of Government securities auction
Announced amount /by MNT/
Received amount /by MNT
Sold amount /by MNT/
Weighted average yield
Frequency of coupon payment
Maximum yield of fulfilled bids
Minimum yield of fulfilled bids
GoM Treasury Auction: Announced ₮20 Billion 52-Week Bills Sold at Discount, Average Yield 10.03%, from ₮46 Billion Bids
April 23 (Bank of Mongolia) Regular auction for 52 weeks maturity Government Treasury bill was announced at face value of 20.0 billion MNT and each unit was worth 1 million MNT. Face value of 20.0 billion /out of 46.0 billion bid/ Government Treasury bill was sold to the banks at discounted price and with weighted average yield of 10.03%.
Please find expanded information from Table.
Information of Government securities auction
Announced amount /by MNT/
Received amount /by MNT
Sold amount /by MNT/
Weighted average yield
Maximum yield of fulfilled bids
Minimum yield of fulfilled bids
8% Mortgage Program Update: ₮518.5 Billion Refinanced, ₮1.02 Trillion Newly Issued
April 24 (Cover Mongolia) As of April 22, ₮518.5 billion (₮507.7 billion as of April 22) existing mortgages of 18,162 citizens (17,786 as of April 22) were refinanced at 8% out of ₮845.9 billion (₮845.8 billion as of April 22) worth requests.
Also, ₮1023.7 billion (₮999.7 billion as of April 22) new mortgages of 18,300 citizens (17,867 citizens as of April 22) were issued at new rates out of ₮1 trillion (₮1 trillion as of April 22) worth requests.
Link to release (in Mongolian)
PARLIAMENT COMMITTEE VOTES 12:3 TO HAVE JUSTICE MINISTER RESIGN, MEDIA REPORTS
April 24 (Independent Mongolian Metals & Mining Research) Major Mongolian portals reported this evening that Parliament's Legal Standing Committee this evening has voted 12:3 to have Justice Minister resign. 3 members who voted against are MP-s R.Gonchigdorj, S.Bayartsogt and Kh.Temuujin.
The Committee has 19 Members including 9 DP Members , 5 JC Members and 5 MPP Members.
Also, MP Kh. Temuujin tweeted on his Twitter in last hour "I believed in wrong people at wrong times. This was my largest mistake". "People shoot arrows and hide bows...They shoot one arrow by five bows"
Link to MP Kh.Temuujin's Twitter: https://twitter.com/Temuujin_Kh
Dale Choi(Чойнхорын Эрдэнэдалай),
Founder, Independent Mongolian Metals & Mining Research
MONGOLIAM PM: RT IS TOLD TO PROCEED WITH OT PF BY SEPTEMBER
April 24 (Independent Mongolian Metals & Mining Research) Mongolian Prime Minister has said that Rio Tinto was "told to proceed with OT project finance by September 30" after it submits f/s in June and project finance "will be done" by this date during introduction to media of his Government's draft economic growth boost plan for 100 days.
· OT was No 9 item in section called " To increase mining and minerals sector production"
· No 1 item is amending Law on Minerals and permission to issue exploration licenses, PM implied that this is basically is " done deal"
· No 3 is "to resolve issues of some licenses in dispute", PM implied it is time to resolve " these endless disputes"
· No 4 is " integrated measures to increase coal exports", PM said " a lot" has been resolved already in every Tuesday regular consultations with coal industry and more to be resolved
· Section " To increase foreign investment" includes essentially amending debt ceiling, proposal to nullify income tax for Nonbank Financial Institutions that attract investment above 100 thousand US Dollars, proposal to waive banks taxes on interest from investment brought in from abroad, proposal to attract investment from foreign investment funds, organizing dedicated investment meetings with international major banks and financial organization, countries, increasing number of countries to travel to Mongolia visa-free, create favourable visa conditions for foreign investors ( increase numbers of visa free countries from 17 to 50 in 2 years)
"Boosting constructive development at OT" was part of Opposition MPP Caucus's version of economic rescue plan, which it demanded to implement from GoM instead of current proposed economic rescue/boost plan and which includes
· Stopping expansionary fiscal policies, various significant reductions and amendments to budget expenditures
· Stabilization of exchange rate
· Inclusion of offbudget spending of Chinggis , DBM and Samurai bonds into budget according to FSL
· Stopping price stabilization programs
· Tax breaks to companies which create jobs and good record of paying social insurance
· Boost constructive development at TPPNo 5, railroad, OT and TT
Link to PM's media briefing: http://youtu.be/UYmaSIGaMVk
Link to MPP Caucus statement: http://buleg.com/Home/Detail?news_code=128
UNCERTAINTY INCREASES OVER "DOUBLE DEEL"
April 22 (Independent Mongolian Metals & Mining Research) --
· Mongolian media reported that MPP MP J.Enkhbayar strongly criticized DP members for not showing up today for final reading of bill on Government by State Structure Standing Committee( all DP Members did not show up, and according to the Chairman of the Committee , could be reaching a conclusion on what to do) saying that the proposition to start effectiveness of the bill since July 1,2014 and require ministers other than the PM and ministers of main directional ministries( Foreign Relations, Defense Minister , Justice and Environment ) to take off "double deel " (double functions of Minister/MP) would have held at the committee meeting if it was held today
· Earlier, the MPP Caucus leader said that it is possible for GoM not to resign as the PM and the ministers of main directional ministries are not required to resign and if the MP-s who have come in by parties list will resign from Parliament, "the idea is not to have GoM resign but to have Smart Government as President proposed"
· DP Caucus Deputy Leader S.Odontuya have said that previously President stated that if the date of applying the bill will change , he will veto it based on necessity of stability of GoM, thus is it likely the President will veto the date
· DP MP M.Batchimeg, who used to work for President before, said if there is uncertainty whether Parliament will accept veto, President has option to retract the bill
· Chairman of Legal Standing Committee L.Tuvdendorj(DP) said that if Presidential veto is received by 26 MP-s the veto will be effective, and as 34 MP-s voted against 2014 date , 34 MP-s will receive veto and GoM will continue
· DP published a call from DP local members strongly accusing MPP of trying to have GoM fall, create political instability/crisis
· Earlier, Ms. Odontuya has said that if law will be approved with 2014 date DP MP-s who voted against DP Caucus will be stripped of their party membership
· One of 4 DP MP-s who voted with MPP has said that he is being pressured by DP
· One of 3 JC MP-s who voted with MPP said he will leave JC Caucus
· Significant politicization, confrontation, debate and argument in media and society on " davkhar deel" issue with politicians and commentators expressing variety of positions on how to go forward
Link to DP publication
Link to Mongolian media reports
Mongolia Decides on Construction Location for New Parliament House
April 24 (infomongolia.com) Regulatory Organ of the Government, the General Agency for Specialized Inspection diagnosed that the some parts of the Government House built in 1951 and 1961 are under "danger situation".
Coherently, the discussion of building a new Parliament Palace has been continuing in recent few years, but it was postponed several times due to land issues, where the Government of Kuwait earlier pledged to finance the construction.
Thereafter, the Parliament authorities have decided where to construct the new Palace and Secretary of the Parliament Secretariat B.Boldbaatar reported comprehensive information during the press conference held on April 23, 2014.
It was said that the land issue for new Parliament Palace was resolved. Where it expects to build?
The Decree to construct new facility is issued by the State Great Khural (Parliament) and currently it is submitted to the Government for approval. Previous Parliament authorities decided to construct on the space, where garden is located north to Government House, but then some MPs refused claiming that the garden should exist.
Following some investigations under Parliament Speaker ordinance it was resolved to build taking only one third of garden area, moreover experts diagnosed most bushes and trees in the garden are too old and not capable to rehabilitate. Therefore, we plan to restore greenery and move into eastern and western sides of the Government House, where parking lots exist and to construct on this area 2-3 levels underground parking. In other words, green environment would not lessen, instead to be expanded.
First it was decided to construct under Kuwait grant aid, but it has been passed years. How about financial issues, will be provided some additional fund?
Kuwait promised to allocate 12 million USD, but in recent years construction materials' prices went up and inflation rates also affect that cause insufficient fund, thus it estimates an additional fund is required. Following the calculation about 54 million USD would be necessary, therefore we are negotiating with Kuwaiti side on additional fund.
So, does it mean you are waiting for only financial issues?
The blueprint is completed and if investment issues resolved, the only thing left is to select executive contractors. Renovation and constructional works on current State Palace being made in 1951, 1961, 1981 and 2006 years respectively, where facilities built in 1951 and 1961 years are in critical situation and at risk of collapsing in a major quake.
Do you have a preliminary estimations when to start the construction?
As soon as financial issues resolved, we will announce tender for executors and have a plan to start primary works from this spring.
How many years it estimates to finish the constructing and how many storey-building it will look like?
The term of completion depends on tenders and according to blueprint, the new Palace would be a 14-story building to accommodate halls for standing committee meeting and plenary session, moreover all 76 Parliamentarians will have an equal space rooms and their assistants and advisors will also have a separate rooms.
Prime Minister Introduces "100 Days to Strengthen Economy" Project
April 24 (infomongolia.com) The regular "30 Minutes with Prime Minister" was held today on April 24, 2014, where Premier N.Altankhuyag introduced his initiated "100 Days to Strengthen Economy" project.
In his introduction, Prime Minister noted, "In order to strengthen country's economy, Government plans to conduct several works supporting national manufacturers and entrepreneurs, enhancing mining-minerals output, accelerating construction industrialization and infrastructure projects, strengthening economic capacity and attracting more foreign investments.
For instances, over 50 works are planned such as to increase MNT Swap agreements equivalent up to 20 billion CNY; to establish National Loan Insurance Corporation; in order to increase investments from mining sector, the State Great Khural (Parliament) should ratify Law on Minerals to allocate exploration licenses; also to aggrandize coal export and increase gold mining.
Moreover, to start Asgat silver deposit activity; to commence China-invested coal gasification plant; to increase the loan volume for SME Support Fund up to 100 billion MNT; to spend 270 billion MNT for additional wool and cashmere industries; to attract 100 thousand USD investment in order to annul profit taxes for non-bank financial institutions.
Also, in order to reduce workload for 888 projects that aims to replace import and increase export outputs, some fund will be allocated from Chinggis bond to SME Support Fund.
Finally, within this 100 days, the Government will accelerate above 50 tasks that would strengthen the country's economy and Economy Strengthening Council under Prime Minister's Office will regularly monitor and work closely".
MP R. Amarjargal Delivers Keynote Speech at Institute Fund Summit 2014 Asia
Ulaanbaatar, April 24 (MONTSAME) A former Prime Minister R.Amarjargal MP delivered a keynote speech at the Institute Fund Summit 2014 Asia held April 22-23 at the Peninsula Hotel in Hong Kong.
As a honored guest at the event, Mr Amarjargal took part in discussions concerning investment opportunities and challenges, and also made the closing remarks at the summit. He informed that Mongolian parliament has passed some vital legal documents including the new law on investment, the laws on investment fund and on securities, and then urged the biggest investors at the summit to make investments to Mongolia.
The participants considered at the summit investment opportunities and challenges for Asia, studying direct investments, working out policies and protecting investments as well as investors.
Co-founded by Michael Maduell and Carl Linaburg, the Sovereign Wealth Fund Institute (SWI) has been created to provide information, intelligence, and analysis on sovereign wealth funds, public pensions, central banks, superannuation funds and other long-term public investors. In addition, the institute was developed to provide unbiased information and intelligence to an opaque market. They host global forums and summits for asset owners such as sovereign wealth funds, pensions, superannuation funds and central banks.
It is a global organization designed to study sovereign wealth funds and other long-term governmental investors in the areas of investing, asset allocation, risk, governance, economics, policy, trade, and other relevant issues.
PM Tours Constructions of Cement Factories That'll Fully Supply Domestic Market
Ulaanbaatar, April 24 (MONTSAME) The Prime Minister N.Altankhuyag and accompanied him officials Wednesday got familiarized with construction works of three new cement factories to be erected in Dornogobi province.
The visiting group has comprised Ch.Saikhanbileg, head of the Cabinet Secretariat for Government; N.Batbayar, the Minister of Economic Development; D.Gankhuyag, the Minister of Mining; Ts.Bayarsaikhan, the Minister of Construction and Urban Development; and N.Monkhbat, an executive director of the Development Bank of Mongolia (DBM).
Consumption of cement has been increasing year to year in Mongolia. Some two million tons of cement is used every year, and two third of the construction material is imported. As of today, Mongolia has two cement factories put into use in 1990, but these factories' technologies went out of date.
Most of the cement factories in the world produce the material with dry technology. The dry technology exploits 4-5 times less water than the wet technology, and two times less electricity. It saves energy by 30% as well. Thus, the current cabinet has announced it will back constructing cement factories with such technology.
In frames of this policy, the Premier gave obligations to some related officials and the private sector organizations to construct the cement factories after getting acquainted with the construction works.
These factories are being constructed by the "Mongonyn alt" corporation, the "Hermes gakhiur" company and the "Senj sant" company and it is projected they will fully provide the domestic consumption with the construction material.
PM Visits MAK's Tsagaan Suvarga, to Be Third Largest Copper Producer
Ulaanbaatar, April 24 (MONTSAME) Within a local tour, the Prime Minister N.Altankhuyag Wednesday got acquainted with construction works of a mega factory of copper-molybdenum to be erected in Dornogobi's Mandakh soum.
This factory will become the third biggest factory after the "Erdenet" and "Oyu Tolgoi" mines.
Exploration works launched from 1950s in the "Tsagaan suvarga" mineral deposit, and is considered as one of the strategic deposits of Mongolia. The deposit's license is owned by the "Mongolyn alt" company. It has been estimated that the deposit has 240 millions of ore and 1.8 million tons of copper, which 27.8 times smaller than the Oyu Tolgoi, and seven times--than Erdenet deposit.
It is projected the "Tsagaan suvarga" deposit will process 16.9 million tons of ore and will produce 300 thousand tons of cathode copper and 5,000 tons of molybdenum a year. The construction for the factory is running at its peak, and it is expected it will be put into use by late of 2016, the "Mongolyn alt" company's authorities said, adding that the energy provision will be taken from sources of the electricity lines of the Oyu Tolgoi and Tavantolgoi mines.
Capital for the factory has been raised from the international banking and financial organizations, and investments of USD 1.3 billion has been made so far. It will employ some 1,200 people, and money of MNT 180 billion will be placed in the local budget every year, the company heads said. They want the government to support the factory with a taxation policy and to make clear the state participation in this factory.
TDB WAS AWARDED "BEST COMMERCIAL BANK MONGOLIA" FOR THE SECOND CONSECUTIVE YEAR
April 22 (TDB) "Global Banking and Finance Review Awards" recognized Trade and Development Bank of Mongolia (TDB) as the 2014 Award Winner of the "Best Commercial Bank Mongolia".
The Global Banking and Finance Review Awards are known throughout the global banking and financial community. They reflect the innovation, achievement, strategy, progressive and inspirational changes taking place within the financial sector of each nations.
TDB was rewarded the "Best Corporate Bank Mongolia" in 2012 and "Best Commercial Bank Mongolia" in 2013. The year of 2014 has proved to be another successful year for TDB as it maintained its dominance in the Mongolian financial sector.
We, on behalf of TDB, would like to congratulate and thank all employees, valued customers, and partnering organizations for their effort and commitment.
Mongolia's green power pioneers keep Asian Super Grid dream alive
JACOPO DETTONI, Contributing write
ULAN BATOR, April 24 (Nikkei Asian Review) -- There is another name for Mongolia: Land of the Eternal Blue Sky. Take the country's many hours of sunshine and add its wild, windswept steppes, and you would think it is a renewable energy paradise.
In reality, 95% of Mongolia's power supply comes from coal-fired plants -- a source of the serious pollution in the capital Ulan Bator. But at last the first renewable energy pioneers seem ready to challenge the rule of king coal, and international investors smell opportunity.
The most ambitious proposal is to have Mongolia play a crucial role in the Asian Super Grid -- a grand vision endorsed by the Japan Renewable Energy Foundation, an organization created by SoftBank Chairman and CEO Masayoshi Son soon after the Fukushima Daiichi nuclear disaster in 2011. The aim is to move Northeast Asia away from its dependence on fossil fuels and nuclear reactors. The grids of Japan, South Korea, China, Mongolia and Russia would be connected with transmission lines delivering electricity from renewable sources. Linking the region's population centers this way would balance the inevitable fluctuations in green power output.
Resource-rich Mongolia often hits the headlines for its world-class mineral deposits, such as the Tavan Tolgoi coal basin and the gold and copper reserves at Oyu Tolgoi. What can be collected above ground may just be as valuable. Those pioneers have a long way to go, but they can look right next door for inspiration.
The Chinese have been creating forests of wind turbines just across the border, said Oyunbat Dandar, president of wind power developer Qleantech. Provinces on the other side of the demarcation have been at the forefront of a renewable energy revolution that has turned China into the world's leader for wind power. China's installed capacity produced from wind reached 75 gigawatts in 2012, according to the Global Wind Energy Council.
On the Mongolian side, the nascent green power sector promises to expand the nation's rudimentary electric infrastructure. Today, Mongolia's power plants have only 800 megawatts in available capacity -- barely sufficient for its population of 3 million and its fast-growing mining industry. By 2020, the government wants renewable sources to account for 20% of power production.
Local conglomerate Newcom brought Salkhit, Mongolia's first 50MW wind farm, online in June 2013. Dandar said Qleantech is going to start building a $200 million, 102MW wind farm a few miles away from the Oyu Tolgoi mine, aiming to get it up and running in the first quarter of 2015. This project is backed by Happy Wind, a Swedish investment company.
Further north, Germany's Ferrostaal is building a $120 million wind facility in Sainshand, near Tavan Tolgoi. And Aydiner of Turkey is planning a $94 million wind farm in the city of Choir next year, according to Erdenebaatar Altai, an engineer with the company.
The U.S. National Renewable Energy Laboratory estimates Mongolia's geography could support over 1.1 million MW, or 1.1 terawatts, of installed capacity -- and potentially deliver over 2,550 terawatt-hours per year. That is almost half of the 5,245twh China consumed in 2013.
Mongolia has plenty of potential for solar power, too. This was highlighted in a 2013 paper by Christopher Cooper and Benjamin Sovacool of Vermont Law School's Institute for Energy and the Environment in the U.S. "Southern Mongolia's Gobi Desert arguably is the planet's single best location for solar power generation," they wrote.
Mongolia's first solar farm, a 30MW, $76 million project in Sainshand, has just been approved. South Korean energy group Daesung Industrial is carrying out a couple of solar pilot projects in the country. And SoftBank has set up a joint venture with Newcom to develop solar and wind plants there, independent of the Asian Super Grid idea.
Japan's Sankou-Seiki in 2011 set up an export-oriented factory for solar photovoltaic panels in Ulan Bator. Now the company is hoping to tap the growing domestic demand, said Uemaa Gantulga, supply manager at the plant.
The rise of renewable energy is not going to solve Mongolia's power shortage on its own. Soviet-era coal power plants need to be replaced with new, so-called base load power plants. Investors say they worry about the government's ability to pay wind and solar farms for their power. A renewable energy fund established by the government reportedly lacks cash, as noted in a 2013 report by the Asian Development Bank.
Finance is also the reason Cooper and Sovacool think the Asian Super Grid may be a mirage.
At the heart of the Super Grid initiative is Gobitec, a large-scale clean energy development in the Gobi Desert. It would have 100,000MW of wind and solar capacity destined for export. Its name is inspired by the Desertec project in the Sahara Desert, which is trying to provide solar power for Europe.
A number of governmental and nongovernmental organizations from Europe and Asia have conducted feasibility studies, including Son's Japan Renewable Energy Foundation. These organizations estimate Gobitec's total cost will approach $300 billion.
"The financing associated with the magnitude of the capital costs Gobitec would likely accrue may prove too much for private investors," Cooper and Sovacool wrote, adding that "it is unclear whether governments will be willing to underwrite these costs."
Son remains the only high-profile investor who publicly supports the Asian Super Grid. At the same time, no official negotiating timetable exists between the countries involved, and there is no question of Mongolia bearing the costs alone. The project will require investments worth 23 times the current size of the nation's entire economy. Then there are the significant technical, economic, environmental and geopolitical hurdles.
It took over 20 years for Desertec to gain enough public and private backing -- the project was first conceptualized in 1986 after the Chernobyl nuclear disaster. In Mongolia, the first step is to see whether the first wave of wind and solar investments work out. If they do, the coal haze that hangs over the country's cities may one day blow away, and the Asian Super Grid may become something more than a desert fantasy.
Energy Minister Sonompil assures Ulaanbaatar will not face power shortage
April 24 (UB Post) We met with M.Sonompil, Minister of Energy yesterday, in connection with an announcement that 2014 will be a building year in the field of power. One of the projected power stations will be built with funding from the Development Bank and two will be built by Concession Contract.
The Amgalan Station will eliminate 86 low pressure stoves
The advantage of Amgalan Station is that it is the first thermal power station. Mongolian power will come from a combination of thermal and electrical power stations. Amgalan Station will produce 388 megawatts of energy and its basement work already started on August 23, 2013. Currently its construction work is at 80 percent completion and the first of the three chambers will be ready to use by October 15, 2014. The finishing date is set for December.
M.Sonompil, Minister of Energy, stated that putting the Amgalan Station into use will eliminate the 86 low pressure stoves in Bayanzurkh district. The heat that is being distributed from thermal electrical station #4 to Bayanzurkh district is delivered six to eight hours later. It causes a huge amount of heat loss and economical expenditure. By building Amgalan Station, the heat from the thermal electrical station #4 will be used in the central heating system. The 388 megawatt supply is enough power to support over 50 thousand households.
A Chinese machinery engineering company is the project executor and there are ten supporting executor companies from Mongolia. B.Battumur, head of the project said "At present there are approximately 230 Chinese building workers and in the future there will be 1000 workers at the top levels of the work".
He continued to say that the project is being done using the Concession Contract's 75.9 million USD. The project managing company's occupancy for the station is 20 years. There is currently an incomplete connection of the waste water pipes between Shar Khad and Uliastai. There is no place to distribute their extra water. Amgalan Station is under construction near to ger area. Originally, it was the plan that there must not be any household at a distance of 50 meter from the station. He stated that they hope that these issues will be sorted when the thermal station is ready to use.
Extension of thermal power plant #3
The extension work of thermal power plant #3 started in June, 2013 and now it is near to completion. It was very impressive to see such a big building. This building consists of an extension of the main building, cooling tower, electric distribution building, cooling pump and station building. The basement of thermal power plant #3 was established in 1963. It provides 17.6 percent of electricity and 32 percent of the heating to Ulaanbaatar city. The extension of the station will increase the electricity output by 50 megawatts and the city's heating supply by 75 kcal. This means 4,500 households of 95 buildings will be provided with heat and electricity. The total cost of the project is 35 million USD. The Chinese Human Industrial Equipment is the project manager of this project. The extension will be finished in June, 2014.
The usage increase of thermal power plant #4
Thermal power plant #4 provides 70 percent of central regions in the city with electricity and 65 percent of Ulaanbaatar's heating. Thermal power plant #4 is currently overloaded because the electrical usage of Mongolia has increased 8 to 10 times in recent years.
The extension project for 123 megawatt electricity and 188 kcal heat was started to counter this extra strain on the thermal station and it is expected to be finished on November 14, 2014. B.Tseveen, executive director of this station, said "The extension work will reduce the increased strain of electricity and heating usage for the short term."
The difference between this and the above mentioned project is that the contract companies are from Russian; two companies besides the Development Bank. Its construction cost is 70 million USD and specialists say that it is possible to get back the cost within 4.5 to 7.8 years.
Since 1994, thermal power plant #4 has received new and updated technologies thanks to Japanese grant aids, Asian bank's soft loans and the Czech Republic's grant aid. The station has introduced its updates to the Minister of Energy. Among their updates, they have installed a generator which produces 120 megawatt electricity. This is considered the most powerful generator.
Below is an interview with M.Sonompil, Minister of Energy.
How much our energy is increasing with implementation of these projects?
If the three big buildings will put into use, a total of 170 megawatt energy will be available from October and November. The heating will increase by 588 kcal. The total amount of heat we use in UB is 1500 kcal. Therefore, 588 kcal equals 30 percent of the total usage. That means Ulaanbaatar will not suffer from lack of electricity and heat for at least five years. Maybe during a period of high demand, we might use Russian electricity.
What is the current situation of thermal power plant #5?
Last September, tender selection for thermal power plant #5 was conducted. The working group discussion between the Minister of Energy and Minister of Economic Development has concluded. So soon it will be discussed in the parliament. During the discussion, the issue of investment, the cost of one kilowatt of electricity, the value of nature and the environment, and water will be discussed. It is likely that the discussion will be lengthy. Moreover, the issues relating to the situation of the site will be shortly solved.
Where is the location of the plant?
It will be built in front of the Urgakh Naran micro district, covering 43 hectares of land.
Can you talk about development projects underway in provinces?
The government developed big projects to supply the provinces with heat and electricity. The government made a decision to build thermal power plants in eight provinces. I have met with the administration of these provinces. This month contracts will be made and real work will start from May. By 2015, their constructions will be done.
Which provinces were chosen?
The provinces with projects for thermal power plants are Khentii, Dundgovi, Uvurkhangai, Arkhangai, Govisumber, Bayankhongor, Zavkhan and Govi-Altai.
What if the plants run deficit even though the buildings have been completed?
The government has managed the deficit from electricity for many years. They released Parliaments Decree 72 resolution. In that resolution, they decided to work by transferring the price of electricity to the market rule from January 1, 2014. To implement it, surveys are being conducted.
First public transportation forum discusses issues facing Ulaanbaatar
April 24 (UB Post) Ulaanbaatar's public transportation delegates gathered for the first time on Wednesday at the Public Transportation Development Key Conference to discuss ways to better organized transportation service in Mongolia and recover reputation of the service among the residents.
Many citizens are concerned over drivers' traffic violations, poorly routed buses and intervals, as well as inappropriate behavior on duty. Bus conductors are often criticized for their lack of appropriate communicative skills.
The delegates organized the conference hoping to eliminate both work related and ethical violations which are common among drivers and conductors of public buses.
Over 200 delegates from 25 public and private transportation operators shared their ideas at the conference.
Attendees noted that unless public transportation services are favored over private vehicles, auto traffic of a city of 1.3 million residents will soon "go out of control."
Today, 1,170 buses are running in the city transportation services, which hardly meets the current demand.
Chief of the Ulaanbaatar City Transportation Authority Ch.Enkhbat admitted, "One of the top three pressing issues facing Ulaanbaatar is definitely public transportation. We gathered here to find a proper solution for our problems."
"Public transportation is considered a very important sector in terms of a country's development. Before Mongolia shifted to free market economy, transportation sector officials used to be provided with apartments free of charge. Since 1990s, this sector has been literally abandoned."
Autobus-1 state-owned bus company hosted the conference on the occasion of its 60th year anniversary.
The following is a brief interview with Chief of Autobus-1 Ts.Odontungalag about public transportation service in the city.
What do you think is the best solution to improve public transportation services in Mongolia?
Currently, income is more important than serving the public for public transportation staff. In other words, they are chasing after money too much and fulfilling their duties poorly.
If income is not priority, private companies are unlikely to be interested in working in the sector. Wouldn't it cause shortage of buses?
Public transportation development is directly linked to reduction of traffic congestions as well as air pollution, according to international experiences. But the fact is completely opposite in Ulaanbaatar. People prefer driving than catching public buses. This sector will recover if the government solves budget issues of private bus operators.
Some officials are talking about creating segregated bus routes and electronic bus fare collectors. Is it possible to introduce these technologies in Mongolia now?
With current conditions, it is rather difficult. Before implementing these reforms, buses must be replaced with new ones and related policies should be revised.
Are there any standards for bus drivers and conductors?
Yes. Drivers must be above 21-years-old, with identity card indicating they have graduated from a professional training, while conductors must be over 18-years-old and must have attended 48-hour training. These standards have to be reformed. Before 1990s, only the most skilled drivers were selected for public transportation service after 11-month paid training. Around 30 to 40 drivers used to be granted free apartments every year.
How are bus drivers trained in foreign countries?
They are trained and seen equally as pilots. Bus drivers are state servants, so states resolve all welfare and social services for them, while drivers in Mongolia have low salaries. That is why skilled drivers refuse to work as bus drivers and companies are left with no other option but to hire whoever is interested.
Chinese vice president vows closer exchanges with Mongolia
BEIJING, April 24 (Xinhua) -- Chinese Vice President Li Yuanchao on Thursday pledged stronger party-to-party exchanges with Mongolia.
Li made the remarks while meeting with a delegation of the Mongolian People's Revolutionary Party, led by Mongolian Deputy Prime Minister Dendev Terbishdagva.
Li said the Communist Party of China (CPC) and the Chinese government always deal with China-Mongolia ties strategically and with a long-term perspective.
He vowed joint efforts with Mongolia to implement the consensus reached by leaders of the two countries, deepen cooperation, share governance experience and promote growth of the bilateral strategic partnership.
Terbishdagva said to develop long-lasting cooperation with China is a set policy of Mongolia, vowing to work closely with China to promote stronger bilateral ties.
The delegation is visiting China at the invitation of the International Department of the CPC Central Committee.
Saudi Arabia to Open Embassy in Ulaanbaatar in Near Future, Announces Foreign Minister
April 24 (infomongolia.com) Minister for Foreign Affairs of Mongolia, Mr. Luvsanvandan BOLD met with the Foreign Minister of the Kingdom of Saudi Arabia, Prince Saud bin Faisal bin Abdulaziz bin Abdul in Jidda city of Saudi Arabia on April 22, 2014.
This is the first meeting at Foreign Ministerial-level between the two states and during the meeting, parties discussed several issues concerning regional and bilateral affairs, in particular agreed to enhance business ties and mutual investments.
Besides, negotiated to organize some works such as to establish intergovernmental working commission, build meat processing plant in Mongolia, export Mongolian meat and supply oil products from Saudi Arabia.
Also, Foreign Minister Saud bin Faisal announced that the Saudi Arabia plans to open its Embassy in Ulaanbaatar near future and emphasized that Mongolian Foreign Minister's visit to the country is considered the first high-level and opens new historical page in relationships and warmly accepted Minister's invitation to visit Mongolia.
Mongolia established the diplomatic relations with the Kingdom of Saudi Arabia on February 12, 2007 and since then no official visits have been conducted between the two countries expect for private visits to Mongolia by high level figures such as Prince and Petroleum Minister that caused of weak bilateral relations in political and economic spheres. Nevertheless, this visit opens new opportunities to broaden bilateral relationships.
Mongolia Elected Member of UN Economic and Social Council Commissions on Population and Women
April 24 (infomongolia.com) Mongolia is unanimously elected a member of the United Nations Commission on Population and Development, and the Commission on the Status of Women of UN Economic and Social Council (ECOSOC) on April 23, 2014.
Thereby, opportunities open up for Mongolia to forward the implementation of initiated by Mongolia within the world community resolutions and decisions related to demographic and social development issues and take active part in activities of the international community, reports the Foreign Ministry of Mongolia.
Mining for minerals in Mongolia – video
April 23 (The Guardian) Mining is so important to Mongolia that some economists have nicknamed it Mine-golia. Minerals represent more than 80% of Mongolia's exports, a proportion which is expected to rise to around 95%. Some of Mongolia's miners speak to Tania Branigan about their work
Mining in Mongolia: rural and city living – video
April 23 (The Guardian) A quarter of the population of Mongolia are nomads, dependent on raising horses and goats to earn a living and put food on the table. But climate change and overgrazing threaten the traditional patterns of herding life, and the country's burgeoning mining wealth is not raising living standards in the cities. Herders and city dwellers tell Tania Branigan about the effects of mining on their lives
New yokozuna Kakuryu takes east as May basho to be first with three foreign grand champions
April 24 (Kyodo) Newly promoted Mongolian-born yokozuna Kakuryu took his place on the east side as the Japan Sumo Association on Thursday released the rankings for the Summer Grand Sumo Tournament.
Kakuryu, whose birth name is Mangaljalav Anand, starts the May 11-25 basho in Tokyo as sumo's 71st yokozuna. He is the first to attain the top rank since compatriot Harumafuji did so at the 2012 Autumn basho.
With Mongolia's Hakuho also on the east side and Harumafuji on the west, the meet will be the first ever to feature three foreign-born grand champions.
It will also be the first time three yokozuna will be competing since Akebono, Musashimaru and Takanohana did so at the 2001 New Year Basho.
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