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Friday, May 2, 2014
Headlines in Italic are ones modified by Cover Mongolia from original
TRQ closed +1.79% to US$3.97
Mongolian copper mine terms to be resolved by September – vice minister Chuluunbat
May 1 (Reuters) - The impasse between Rio Tinto and the Mongolian government over a giant copper mine in the country should be resolved by September, with underground mining beginning within two years, a government official told Reuters.
Construction of the underground mine at Oyu Tolgoi, one of the world's largest undeveloped copper deposits, was put on hold last year when the government said financing had to be approved by parliament because it was concerned cost over-runs would delay when the country began receiving its share of profits.
But Mongolia's vice minister for economic development, Chuluunbat Ochirbat, said the government had learnt from its mistakes and progress was now being made.
"We are under arrangements and negotiations with Rio Tinto now to complete the process by September this year," he said on the sidelines of a conference in London. "Underground mining will be put into operation in a year and a half or two years time," he added.
Open-pit mining has already started at the site, but the real step-up in production requires mining to move underground. The stakes are massive with the mine potentially accounting for 20-30 percent of Mongolia's economy.
In a stark change of tone, Ochirbat said disagreements with Rio Tinto had damaged the country's image.
"The ongoing negotiation process with Rio Tinto has really hurt the reputation of Mongolia as a reliable partner for businesses and investors," he said.
The Mongolian government owns 34 percent equity in the copper mine, while Rio Tinto owns 51 percent of Canadian company Turquoise Hill which has the remaining 66 percent stake in Oyu Tolgoi.
"We have made the conclusion that we have made some mistakes in the legislation, we tightened regulations in the mining industry too much and that was the reason why we showed weaker performances (last year)," Ochirbat said, referring to a slowdown in GDP growth for the country in 2013.
He added that the feasibility study for the underground part of the mine was now finished, with financing set to start in September.
"We are not going to blame Rio Tinto for the situation that occurred between the government and Rio Tinto. There are also a lot of things the government has done in the wrong way," Ochirbat said.
Auminco signs non-binding coal MoU with Darkhan Thermal Power Plant
May 1 (Proactive Investors) Viking Ashanti (ASX: VKA) and its 92.69% owned subsidiary Auminco Mines (Mogi: will be 100% once the takeover completes) have clinched a future coal supply agreement with a Mongolian Government power authority for its Berkh Uul Bituminous Coal Project in northern Mongolia.
This is a significant endorsement of the rationale for the Auminco takeover and the capacity of the Berkh Uul project to deliver coal to the Authority. Viking has reached 90% acceptance levels with the takeover of Auminco.
The non binding MOU was signed with Darkhan Thermal Power Plant for coal from Auminco's Berkh Uul Bituminous Coal Project ("BU Project") in northern Mongolia.
Viking Ashanti Managing Director, Peter McMickan, said the MOU signed with Darkhan Thermal Power Plant (DTPP) was an important step for Auminco's Berkh Uul Bituminous Coal Project ("BU Project") in northern Mongolia.
"The fact that Berkh Uul Project has been recognised by the Mongolian Government as being a potential key supplier of coal to the DTPP is a significant milestone in the development of the Project," Mr McMickan said.
"Auminco's discussions with nearby cement works and power stations had already confirmed a local industrial demand for unwashed Berkh Uul coal, due to its low ash, low sulphur and relatively high calorific value.
"This MOU provides further evidence of the potential customer base for Berkh Uul's coal."
Background to DTTP
DTPP is a Mongolian Government entity and is the major supplier of electricity to Mongolia's second largest city, the commercial and industrial centre of Darkhan, and the northern region of Mongolia.
Currently the DTPP consists of a 47 Megawatt power plant that consumes approximately 400,000t of coal per year. An upgrade to add an additional 35 Megawatt capacity is due for completion in 2015.
The additional capacity will increase coal demand to approximately 600,000t per year.
The non-binding MOU, signed with Auminco's Mongolian subsidiary BRX LLC relates to the intent by DTPP to enter into future purchase agreements for BU Project coal.
It also establishes a basis for technical evaluation of the quality and quantity of coal prior to price negotiation, which includes testing of a 5,000 t bulk sample.
The BU Project is located 200km east of Darkhan City, within 40km of rail access to the existing Trans-Mongolian Railway, which provides a transport link to Darkhan to the south and Russia to the north.
This milestone agreement although not yet binding can propel development timelines for Berkh Uul and de-risk the project.
This could see a fast track the development of Berkh Uul over the next 12 - 18 months to capture the demand for high quality thermal coal from industry (including cement works) and power stations that have developed in northern Mongolian and Siberian markets.
We believe that Viking Ashanti can develop a small scale operation that could generate a conceptual free cash flow of up to US$3-5 million.
Our projected valuation for Viking Ashanti is $0.085 to $0.165 per share. This is relative to current share price of $0.042 per share. There is upside from this valuation as Viking adds a washing plant to Berkh Uul operations, the cost of which is expected to be less than $5 million.
Winsway Coking Coal to change name to "Winsway Enterprises"
[ET Net News Agency, 30 April 2014] Winsway Coking Coal (01733) said it proposes to change its English name to "Winsway Enterprises Holdings Limited".
With a view to enhancing the utilization and profitability from the Group's well-established logistics facilities, Winsway plans to evolve its strategy and scope of business from a pure coking coal operation to a broader-scope operation including thermal coal, iron ore and potentially other minerals or bulk materials. Winsway also plans to become more of a service provider through a platform providing a total supply chain solution to the broader market involving small and medium-sized customers engaged in bulk commodity trading. The Board believes the change of name will better reflect the changed and evolving strategy and scope of Winsway's business.
Winsway: Annual Report 2013
April 30, Winsway Coking Coal Holdings (HKEx:1733) --
Chairman and CEO's Statement
On behalf of the board of directors (the "Board") of Winsway Coking Coal Holdings Limited, I hereby present the annual results of the Company and its subsidiaries (the "Group") for the year ended 31 December 2013.
The global coking coal market has been trending downwards since 2012. In face of surging production capacity, coal demand has experienced a much slower growth due to economic restructuring in China. A plethora of coal supply means Winsway's business lines were severely challenged, and the Company incurred a second year of loss following that of 2012.
Winsway entered into the coking coal industry back in 2005. As a Mongolian coking coal importer, it quickly realised that the lack of logistic infrastructure was the bottleneck for importing primary resources from Mongolia, and thus set up cross-border facilities in several strategic locations on the Sino-Mongolian border. Together with a growing market and the first-mover advantage, the Company recorded significant profits and grew rapidly from 2008 to 2011.
In the second half of 2011, the Company started to look for upstream resources with funds of approximately US$1 billion raised from its IPO in 2010 and Senior Notes issued in 2011. In 2012, the Company acquired GCC together with Marubeni Corp., which manifested the Winsway's intention to complement its logistic infrastructures with a stable source of resources supply, such topdown integration would allow Winsway to operate with higher efficiency and to expand its market share. However, given the general deterioration of global economy and sharp decrease of coking coal prices since 2012, all miners and mining-related logistic service providers, including Winsway, suffered substantial losses. Such a market downturn was beyond our expectation, and despite the Group's effort in lowering GCC's unit cost of sales from HK$1,406 per tonne to HK$1,131 per tonne, we recorded losses for a second year following 2012.
In 2013, we procured a total of 5.12 million tonnes of Mongolian coal, a 19.07% increase from the volume procured in 2012 (4.30 million tonnes). With this increase in procurement volume, the Group managed to maintain its business operation in many strategically important ports, railway, and logistic parks. The Group believes that these assets would bring value to the Group and significantly increase the Group's market share once the coal sector is recovered.
Top Mongolian Suppliers
Amount (HK$ million)
Mongolian Mining Corporation ("MMC")
Moveday Enterprises Limited ("Moveday")
SouthGobi Sands LLC ("SouthGobi")
Erdenes Tavan Tolgoi Co. ("ETT")
Note: Coal purchased from Moveday was mined by Tavan Tolgoi Corporation. Moveday also provided transportation services amounting to HK$303 million to Winsway in 2013. The Company has a well-diversified base of Mongolian coal suppliers.
BDSec Daily Update, March 30: Top 20 -1.73% to 15,522.61, Turnover ₮704.3 Million, Darkhan Nekhii ₮665.5 Million Block
April 30 (BDSec) MSE Top 20 declined most in a month today as large index-weighing companies including Tavantolgoi (-4.4%) and Sharyn Gol (-13.8%) drop. The benchmark index fell -1.73% on Wednesday to sit at 15,522.61 points.
Today Darkhan Nekhii's (NEH) 39,852 shares worth of MNT 665.5 million were traded as a block at MNT 16,700. The stock closed up +9.8% to close at MNT 18,290, touching its all-time high close of MNT 18,300. Gobi (GOV) was another big gainer of the day. GOV gained +6.9% to close at MNT 7,400, its 3-year high.
On the other hand, Sharyn Gol (SHG) lost as much as -13.8% to close at MNT 6,900 on a volume of 141 shares, hitting its 17-month low.
Turnover for Wednesday was MNT 704.3 million or ~US$ 400 thousand.
Trading Value Leaders
Darkhan Nekhii (NEH)
Mongol Savkhi (UYN)
Darkhan Nekhii (NEH)
Sharyn Gol (SHG)
Bulgan Guril Tejeel (GTJ)
Please visit the link for MSE stock quotes: http://www.bdsec.mn/mseIndex.php?lang=&Itemid=
MSE News, May 1: Top 20 +0.39%, Turnover ₮2.4 Million
Ulaanbaatar, May 1 /MONTSAME/ At the Stock Exchange trades held Thursday, a total of 7,495 shares of 19 JSCs were traded costing MNT two million 392 thousand and 726.00.
"Merex" /7,001 units/, "Hermes center" /90 units/, "Remikon" /90 units/, "Talkh chikher" /70 units/ and "Hai Bi Oil" /50 units/ were the most actively traded in terms of trading volume, in terms of trading value--"Talkh chikher" (MNT one million and 155 thousand), "Merex" (MNT 738 thousand and 785), "Avto impex" (MNT 175 thousand and 800), "Tavantolgoi" (MNT 100 thousand) and "Makh impex" (MNT 42 thousand and 485).
The total market capitalization was set at MNT one trillion 602 billion 222 million 720 thousand and 448. The Index of Top-20 JSCs was 15,582.48, increasing by MNT 59.87 or 0.39% against the previous day.
Mongolia 1Q GDP Grows 2.2% Q/q, Statistical Office Says
By Michael Kohn
May 2 (Bloomberg) -- Mongolia's gross domestic product grew 7.4% y/y in first quarter, after expanding 7.1% in the same period last year, the National Statistical Office says in statement distributed today.
* Mongolia's economy grew 11.7% last year, according to data reported earlier by the agency, and had 12.4% annual growth in 2012
* Data is preliminary
* Link to release: http://www.nso.mn/content/939#.U2MVW_mSwms
(Bloomberg First Word)
The NSO release:
ДОТООДЫН НИЙТ БҮТЭЭГДЭХҮҮН 2014 ОНЫ ЭХНИЙ УЛИРАЛД 7.4 ХУВИАР ӨСЛӨӨ
5-р сарын 1 (ҮСХ) Дотоодын нийт бүтээгдэхүүнийг үйлдвэрлэлийн болон эцсийн ашиглалтын аргаар улирлаар тооцож байна.
Үйлдвэрлэлийн арга нь тайлант хугацаанд тухайн улсын нутаг дэвсгэрт үйлдвэрлэсэн бүтээгдэхүүн, үзүүлсэн үйлчилгээний хэмжээгээр илэрхийлдэг.
Харин эцсийн ашиглалтын буюу зардлын арга нь үйлдвэрлэсэн бүтээгдэхүүн, үзүүлсэн үйлчилгээ юунд зарцуулагдсан буюу хэрэглэснийг харуулна.
Улс орны онцлогоос хамаарч, эдийн засгийн салбаруудын үйл ажиллагаа улирлын нөлөөлөлтэй байх учир дотоодын нийт бүтээгдэхүүний өсөлт, бууралтыг улирлын нөлөөллийг тооцож, шинжилгээ судалгаанд ашигладаг.
Эдийн засгийн бодит өсөлтийг харуулахад зэрэгцүүлэх суурь үнийг ашиглах бөгөөд 5 жил тутам суурь оныг шинэчилдэг.
ДНБ, 2005 оны зэрэгцүүлэх үнээр 1148.1 тэрбум төгрөгт хүрч, өмнөх оны мөн үеийнхээс 7.4 хувиар өслөө. Үүнд хөдөө аж ахуйн салбарын нэмэгдэл өртгийн хэмжээ 18.4 хувь, аж үйлдвэр, барилгын салбарынх 15.7 хувиар өссөн нь голлон нөлөөлжээ.
ДНБ оны үнээр 2014 оны эхний улирлын урьдчилсан гүйцэтгэл 3439.0 тэрбум төгрөгт хүрч, өмнөх үеийнхээс 18.3 хувиар өслөө.
ДНБ, улирлын нөлөөллийг тооцсоноор 2014 оны эхний улиралд өмнөх улирлынхаас 2.2 хувиар өссөн байна.
Эцсийн ашиглалтын арга буюу зардлаар тооцсон ДНБ, оны үнээр 2014 оны эхний улиралд 3753.6 тэрбум төг, 2005 оны зэрэгцүүлэх үнээр 1151.2 тэрбум төгрөгт хүрч, өмнөх оны мөн үеийнхээс оны үнээр 738.2 тэрбум төг буюу 24.5 хувь, зэрэгцүүлэх үнээр 79.7 тэрбум төгрөг буюу 7.4 хувиар өслөө.
ДНБ-д эцсийн хэрэглээ 72.6 хувь, хөрөнгийн нийт хуримтлал 35.2 хувь, цэвэр экспорт -7.8 хувийг эзэлж, өмнөх оны мөн үеийнхээс эцсийн хэрэглээ 6.5 пункт, хөрөнгийн нийт хуримтлал 12.0 пунктээр тус тус буурч, харин цэвэр экспорт 18.5 пунктээр өссөн байна.
BoM MNT Rates: May 1 Close
May MNT Chart: (Mogi: haha, BoM should def have better chart options than just month by month)
BoM FX auction: US$11 million sold at ₮1,795, $103 million MNT swap offers accepted
On the Foreign Exchange Auction held on May 1st, 2014 the BOM has received from local commercial banks bid offer of 12.5 million USD and 22 million CNY and ask offer of 2 million CNY. The BOM has sold 11.0 million USD as closing rate of MNT 1795.00.
On May 1st, 2014, The BOM has received MNT Swap agreement offer in equivalent to 103.00 million USD from local commercial banks and accepted the offer.
BoM issues ₮284.7 billion 1-week bills, total outstanding -15% to ₮1.24 trillion
April 30 (Bank of Mongolia) BoM issues 1 week bills worth MNT 284.7 billion at a weighted interest rate of 10.5 percent per annum /For previous auctions click here/
GoM Treasury Auction: Announced ₮30 Billion 12-Week Bills Sold at Discount, Average Yield 9.27%, with ₮83 Billion Bids
April 30 (Bank of Mongolia) Regular auction for 12 weeks maturity Government Treasury bill was announced at face value of 30.0 billion MNT and each unit was worth 1 million MNT. Face value of 30.0 billion /out of 83.0 billion bid/ Government Treasury bill was sold to the banks at discounted price and with weighted average yield of 9.27%.
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
Mongolia Renews Debt Ceiling Debate to Boost Infrastructure
By Michael Kohn
May 1 (Bloomberg) Mongolia's Ministry of Finance presented a plan to parliament that would raise the nation's debt ceiling, paving the way for the government to sell more foreign debt to pay for infrastructure development.
The government plans to increase the debt ceiling to 70 percent of gross domestic product from 40 percent, Gantsogt Khurelbaatar, the State Secretary for the Ministry of Finance, said yesterday at a meeting with diplomats and foreign press. The change is part of a new debt management plan he said was introduced to Parliament yesterday.
Mongolia is studying financing options for infrastructure projects that can help it process and export its resources as foreign direct investment fell 28 percent in the first two months of 2014. In November, parliament blocked a bill to raise the debt ceiling to 60 percent, prompting Moody's Investors Service to describe the rejection as a credit positive.
Raising the debt ceiling is one of several changes proposed by the Ministry of Finance, said Gantsogt. The plan also includes a 20 percent limit on state guarantees and changes to the way the government calculates debt, he said.
Mongolia has raised about $2.3 billion in sovereign debt since March 2012.
Underscoring the challenges for the economy, Standard & Poor's this week lowered Mongolia's long-term sovereign rating to B+ from BB-, or four levels below investment grade.
The 40 percent limit went into effect this year as part of the country's Fiscal Stability Law, adopted in 2010 as a way to smooth spending habits and generate savings from mineral revenue. Government debt in 2013 was 49.5 percent of GDP, just shy of the 50 percent mark allowed for that year.
Mongolia's currency, the tugrik, fell to a record low on April 30, reaching 1,796 to the dollar, a 25 percent year-on-year decline.
Draft bill on debt management submitted
Ulaanbaatar, May 1 (MONTSAME) Finance Minister Ch.Ulaan submitted on Wednesday a draft bill on debt management to Parliament Speaker Z.Enkhbold.
The bill aims at regulation of relations related with implementation of mid-term strategy to provide proper level of debt within debt management policies and regulations, and Government's guarantee-issuance for debts, their registration, reporting and supervision.
Mongolia Premier Unveils 100-Day Push to Revive Economy
By Michael Kohn
April 30 (Bloomberg) Mongolia's Prime Minister unveiled a stimulus bill, dubbed a "100-day action plan," that will seek to revive the mineral rich nation's flagging economy.
Fitch: Weakening Mongolian Mining Corp. Credit Profile Highlights Risks for Local Banks
Hong Kong/London, 30 April 2014 (Fitch Ratings) -- The extension of a debt repayment by Mongolian Mining Corporation (MMC) highlights the pressures for the industry and the risks for local banks, Fitch Ratings says. Mongolian banks do not have excessively high direct exposure to mining, but the deteriorating operating environment for the country's key export sector heightens wider macro risks to the banking system. There are no immediate rating implications for the banks, as our ratings and their Outlooks for Khan and Xac (both 'B/Negative') already reflect the harsher operating environment.
Mongolian banks are susceptible to the liquidity and profitability pressure in the mining sector as this flows through to the broader economy. Mining's weakness stems largely from depressed demand, as indicated by falling prices. This also has a negative impact on the Mongolian tugrik, which depreciated by 20% in 2013 and by another 6% so far this year. With foreign-currency loans at around 30%, banks are exposed to credit risk from a weaker local currency, even though foreign-currency lending is largely to corporates with natural or financial hedges.
Credit risks have built up for the banks due to an exceptionally loose macro policy that has fuelled credit growth above nominal GDP. Buffers against the risk are not robust, as the brisk pace of credit expansion at capped rates under the government's loan programme pressures margins, liquidity and capital. Growth of non-performing loans is rapidly outstripping that of total loans, rising by 93% yoy in March 2014 against 54%. The headline figure for NPLs remained at 5.2% of total loans (4.2% a year before). But Fitch believes this underestimates asset-quality stress as it only captures 90-days-or-longer-overdue loans.
Mongolian banks' direct lending to the mining sector was a modest 12% of total lending at end-2013 because they lack the capacity to fund large projects. Financing has been provided by global financial institutions, which have had to extend their funding commitments due to delays. Among the local banks, Trade and Development Bank of Mongolia has a USD40m short-term unsecured loan to MMC. The loan is about 1.3% of the bank's total assets or 18% of equity, and so manageable. Golomt's loans to the mining industry represented 11% of its end-2013 lending, while Khan and Xac (both 'B/Negative') had small lending exposures at 4% and 3%, respectively. The Development Bank of Mongolia does occasionally guarantee mining loans in part, which mitigates some of the credit risk.
The mounting pressure on Mongolia's economic and financial stability underpins the Negative Outlook on our 'B+' sovereign rating. Mongolia has a macro-prudential risk indicator of 'MPI3', reflecting a high risk of systemic stress from rapid credit growth, strong asset-price growth, and appreciation of the real effective exchange rate.
Industry & Agriculture Minister Kh.Battulga submits resignation
May 2 (news.mn) Member of Parliament and Minister of Industry and Agriculture, Kh.Battulga submitted his resignation as cabinet minister this morning, May 2nd.
The Minister of Industry and Agriculture, Kh.Battulga handed his request to resign to the head of the Government, N.Altankhuyag. According to the bylaw, the request will be introduced in a plenary session meeting of Parliament.
The Minister of Industry and Agriculture, Kh.Battulga says in his resignation "I will resign as Minister of Industry and Agriculture but I will continue my other duties for the remained of my term as a Member of Parliament. I have handed in my resignation to be seen at a plenary session meeting of Parliament".
The resignation request will be discussed next week at the plenary session meeting
PARLIAMENT STRIKES DOWN LANDMARK "DOUBLE DEEL" BILL
May 1 (Independent Mongolian Metals & Mining Research) --
· Ruling parties stroke down President's landmark "double deel" bill during final reading in Parliament today refusing to approve the bill by 39 votes against 35 votes keeping current GoM away from changes.
· According to Mongolian media reports, proponents of bill to "take off" "double deel" in 2014 included besides previous dissident 4 DP MP-s , namely, R.Burmaa, M.Zorigt, J.Batzandan and Kh.Battulga also Parliament Speaker Z.Enkhbold and DP MP R.Amarjargal, but fell short of 4 votes.
· Previous MP-s who have not voted on the issue namely MP-s A.Bakei (DP) ( Chairman of State Structure Committee) , MP D.Bat-Erdene ( DP, Defense Minister) , MP Kh.Bolorchuluun and MP Ts.Davaasuren and MP D.Terbishdagva ( JC, Deputy Premier) this time voted providing critical votes to strike down the bill. MP G.Uyanga (JC) abstaining while present also counted against the bill.
· MP-s S.Odontuya (DP) and S.Demberel ( CWGP) did not participate in voting.
· Parliament Speaker said "after 6 months of debating, it ends without any meaning"
· President's initiative of Smart State significantly damaged after 6 months of debates (Mogi: he wanted the bill to take effect 2016, and would've vetoed if it passed as 2014)
· We expect considerable political cost to striking down this good governance-related bill such as continued politicization and confrontation with opposition, lack of consensus, fractures within ruling parties which all can be concluded that uncertainty for major Mongolian assets remains
Link to Parliament official information - http://open.parliament.mn/content/3817.htm
Good news for TT firms and Aspire!
Draft Railway Bill Submitted in Favor of Both Narrow and Broad Gauges
May 1 (infomongolia.com) On April 30, 2014, Minister for Economic Development, Mr. Nyamjav BATBAYAR submitted a bill "New railway construction" to the Speaker of the State Great Khural (Parliament), Mr. Zandaakhuu ENKHBOLD.
In the scope of the "New Railway" project, ground works for 270 km railroad between Ukhaa Khudag and Gashuun Sukhait have been made and currently at its 40% of completion. Therefore, in order accelerate the railway construction, it is urgently needed to choose which track to use, narrow or wide gouges, explains Minister N.Batbayar.
He further introduced, "In order to gain export output, Mongolia should increase its capacity of transportation. Therefore, we propose to construct railways using narrow gauge, 1,435 mm, between Tavan Tolgoi and Gashuun Sukhat, Sainshand and Zamyn-Uud, Khuut and Bichigt.
Also, using wide gauge, 1,520 mm, in routes Mogoin Gol and Erdenet, Tavan Tolgoi and Sainshand further to Baruun-Urt, Khuut, Choibalsan, and from Khuut to Numrug.
However, many years it was discussed which gauges to use and was explained in many variants, so the Government finally decides to construct railway using both types".
Following the presenting a new bill, Minister N.Batbayar gave comprehensive understanding to reporters.
Many years it was argued whether it would beneficial to country's economy by using narrow or wide gauges. Would you please give more clarifications?
The new bill has been just handed over. In 2010, Parliament issued a State Policy to Adhere on Railway Transportation that cites Mongolia to have a broad gauge, but includes if a new railway to construct proposed by the Government shall be approved by the Parliament. The new bill would resolve the many years discussed argue and does not compromise with the regulation. More understandably, railway to China (Tavan Tolgoi - Gashuun Sukhat; Sainshand - Zamyn-Uud; Khuut - Bichigt) would have a narrow gauge and to Russia a broad gauge (Mogoin Gol - Erdenet; Tavan Tolgoi - Sainshand; Khuut - Choibalsan - Numrug).
How it would impact to the country's economy by using both types of gauge?
First, it would eliminate a replacement track at all, which means a direct transportation to China's last destinations, where load displacement itself is a high cost procedure and takes a time. Mongolia transports its copper concentrate and coal to China by trucks only and if the railway is operational it would be very cost effective.
How long it would take to accomplish the railway construction?
This is a first step by presenting the bill. Next, Parliament will revise and issue its decision, then Government will be responsible to take necessary measures and after all it will be implemented. Actually, the construction of the railway will not be accomplished in a short time, but if it is approved some first roads will be finished within two years.
Do you think it would be started to implement this year?
Yes, we aim to start this year. Today, there are 3 railway border ports in Mongolia, in addition to this Gashuun Sukhait, Bichigt, Numrug and Shivee Khuren ports will be operational soon.
Justice Coalition takes break due to Oyu Tolgoi matter
Ulaanbaatar, May 1 (MONTSAME) The "Justice" coalition took a break at plenary meeting of the parliamentary session during the first-stage discussion of a draft resolution of parliament on some measures for intensifying the national economy.
With aims to intensify the national economy and to ensure the financial stability, the draft resolution has been submitted from the cabinet, and the Standing committee on economy has backed the proposals with some 40 principal terms formulated by a working group for the resolution.
At the discussion of the parliamentary session, a head of the coalition's faction (Mongolian People's Revolutionary Party and Mongolian National Democratic Party) N.Battsereg put forward its proposals to have one-day break in order to consolidate its position over the 31st term drawn up by the working group. This 31st term states about adding a sub-clause on accelerating the construction of an underground mine of the Oyu Tolgoi project under the current law on investment contract and rendering parliamentary and governmental support to the project's implementation.
The coalition explained that the clause regarding the Oyu Tolgoi Treaty at the plan on economic intense measures does not meet its programme of actions. The coalition promised to have the Mongolian side own 51% of the Oyu Tolgoi project's benefit through its programme during the 2012 parliamentary election.
The Speaker Z.Enkhbold gave one-day break for the coalition, and then N.Battsereg said his coalition will forward it position over the matter at a plenary meeting on Friday.
Amendment bill submitted as Mongolia seeks to revise mineral law to attract investment
ULAN BATOR, April 30 (Xinhua) -- Mongolian Mining Minister Gankhuyag Davaajav on Wednesday submitted a draft amendment to the mineral law to Parliament Speaker Enkhbold Zandaakhuu, as the country is trying to improve its investment environment.
Despite the adoption of new laws and regulations to make the investment environment favorable, no new international and domestic investment is coming to the exploration sector which is the driving engine of the mineral sector, said the minister, quoted by a press release of the Mongolian parliament.
The draft amendment calls for setting up a database about funds raised from international stock markets, improving agreements between holders of mining licenses and the local government, feasibility studies, and making clear the roles and responsibilities of government agencies and mining license holders.
The draft amendment also bans transference of exploration licenses wholly or partially within three years since the issuance of the license.
As Mongolia is facing an economic downturn, the Mongolian government is seeking ways to attract more foreign investment.
Negotiations with the country's biggest foreign investor Rio Tinto is still continuing as the Anglo-Australian mining company halted its underground mining work in the Oyu Tolgoi mine last August due to differences over the financing proposal on the project.
Independent Media Regulatory Body forms to improve Mongolian media
May 1 (UB Post) Around 20 media agencies and unions have recently joined together to create the Independent Media Regulatory Body to develop responsible journalism benchmarks and recover the public's trust in Mongolian journalism.
Delegates of the participating agencies officially reported on Wednesday that they have already formed an "Initiators' Group" which will work to establish the Independent Media Regulatory Body (IMRB).
The group plans to formulate a draft of IMRB regulations, have the draft of professional journalism ethics discussed by journalists, hold workshops on the significance of the journalist-run regulatory body, which would remain independent from the state and any other third parties.
It also plans to seek support from international media organizations and unions, and provide them with information about Mongolia.
The organizers hope to improve the quality and transparency of Mongolian journalism and strengthen the independence of newsrooms nationwide.
The Mongolian Media Council Club, Globe International NGO, Press Institute and many other media organizations have already joined the group.
Remaining US$130 Million Debt to Chalco Not to Be Covered within June
May 1 (infomongolia.com) The regular monthly "Transparent Mining" press conference was held on April 30, 2014, where Deputy Minister of Mining O.Erdenebulgan, Director of the Policy Implementation Regulation Department at Ministry of Mining B.Batkhuu, Chairman of Petroleum Authority G.Ulziiburen, and CEO of Erdenes Tavan Tolgoi JSC Ya.Batsuuri have attended.
Here below some highlighted responses from the press conference.
- A draft bill to amend the Minerals Law was revised at Government-level proposed by Mining Ministry and now it is ready for submission to the State Great Khural (Parliament). To clarify, the amendments cite, the mineral exploration licenses will be allocated in only those areas allowed and approved by the state. By doing so, investments would be increased and mineral resources would accumulate, also economic capacity and its immune conditions would be improved.
- The new price tariffs to import fuel from Russian Rosneft Company were agreed. Negotiations between "Rosneft", "Rosneft-MMG" representatives and Mongolia's Petroleum Authority, oil importer companies were conducted on April 23-26, 2014.
During the meetings, fuel import tariffs set in March 2013 were renewed based on world market indexes, which were reflected on the Singapore Stock Exchange prices. Consequently, the border fuel import price would be decreased at certain level.
- In the first four months of 2014, a total of 2,040 kg of gold was delivered to the Central Bank of Mongolia. This show an increase of 1.8 times compared to the same period of the previous year. As of April 28, 2013, a total of 1,134.5 kg of gold was commissioned to the Bank.
- Agreement to export 450,000 tons of coal to China was established between Mongolia and China Shenhua Bayannaoer Energy Co., Ltd on April 17, 2014. According to document, one ton of coal is to sell at 48.5 USD, where 17.4 million USD or 80% of total estimated 21.8 million USD have been transferred into Mongolian account and the whole transportation will be made only via Tsagaan Khad Customs Control Zone, Khanbogd Sum of Umnugovi Aimag. In addition, two parties negotiated to supply coal at regular basis and sales agreement is undertaking.
- Mongolia's Erdenes Tavan Tolgoi JSC established an agreement with Chalco (China Aluminum International Trading Co., Ltd) in 2011, where a unit price per ton of coal to export to China was set at 70 USD. Due to agreement, Mongolia deposited 350 million USD in advance and as of today, 130 million USD is left so far. However, it was estimated to cover the leftover by within June 2014, but it foresees to postpone. The reason is a large amount of coal was accumulated at Chalco warehouse. The world coal market is bad that caused of poor sales, therefore it seems Mongolia cannot pay off the debt to Chalco on time.
Golomt Bank Successfully Hosts "Investing in Mongolia" Summit in New York, NY, USA
May 1 (Golomt Bank) One of the most important factors of the Mongolian economic development is to increase Foreign Direct Investment (FDI.) Hence, with the initiation Golomt bank and Golomt Securities LLC, "INVESTING IN MONGOLIA" summit has been successfully co-hosted by New York Society of Security Analysts (NYSSA) and internationally renowned law firm, Shearman and Sterling LLC on April 24th of 2014 in New York City.
New York Society of Security Analysts (NYSSA,) one of the leading and the largest of the 135 societies among CFA Institutes worldwide, has over 8000 members which represent Certified Financial Analysts (CFA,) internationally renowned banking and financial institutions.
Along with the members of New York Society of Security Analysts (NYSSA), investment banks and financial corporations attended "INVESTING IN MONGOLIA" summit where they received the most up to date detailed information on current investing environment of Mongolia, legal and policy framework, mining, infrastructure, real estate industries and financial market as well as having panel discussion on each sector.
Representatives of the Mongolian largest governmental and private enterprises; namely, Erdenes Tavan Tolgoi LC, APU LC, Sod Mongol group, Ochir-Undra group, Oyuny Undra group, Sharyn Gol LC, has introduced the scope and specialties of their operations and projects while exploring new investment opportunities and laying new venture relationship opportunities ahead. Furthermore, Prima Fluorspar Corp, Mongolian Growth Group, and Khot Infrastructure Holdings which are currently investing in Mongolia, shared their experiences of expanding their businesses successfully in Mongolia.
"INVEST IN MONGOLIA" summit was one of the milestone events in driving international investor's attention into Mongolia while providing pleasant opportunities for businesses to start new venture relationships with international businesses.
UNCTAD Investment Policy Review of Mongolia recommends diversifying FDI inflows to stimulate sustainable growth
With foreign direct investment flowing largely to its mining sector, Mongolia responds favorably to UNCTAD's Investment Policy Review recommending it to stimulate sustainable growth by diversifying FDI inflows.
April 30 (UNCTAD) Mr. Ochirbat Chuluunbat, Vice Minister of Economic Development of Mongolia, said he expected UNCTAD's Investment Policy Review (IPR) of Mongolia to help catalyze growth and have considerable impact on sustainable development in his country.
The IPR recommendations are timely, Mr. Chuluunbat said. Mongolia is taking steps to capitalize on development opportunities presented by foreign investment in mining and setting up a strategy to diversify foreign direct investment (FDI) inflows into the country.
"Since 1991, when we moved towards a market economy, we have been implementing reforms to increase living standards in Mongolia. A quite significant contribution was made by FDI. Our evolution was not always smooth, but together with UNCTAD and consultations with private sector we have managed to move forward with reforms to improve the legal environment," Mr. Chuluunbat added.
Following the IPR presentation, international investors were able to exchange views on the investment potential of Mongolia with the Government delegation. Country representatives and private sector experts and entrepreneurs commended the Government for enacting a new law on investments in 2013.
Dr. Mukhisa Kituyi, the Secretary-General of UNCTAD, praised the Mongolian authorities for such recent steps undertaken to restore investor confidence, which show that the IPR recommendations had already been put to good use. The Secretary-General further explained that managing such rapid economic growth as that expected in Mongolia so that it is inclusive is a key challenge for the country.
"The IPR aims to assist the Government of Mongolia to promote diversification of FDI inflows. The report shows that there are many opportunities to diversify inflows beyond mining, into sectors such as tourism, financial and business services, manufacturing niche products, livestock and infrastructure" Dr. Kituyi said.
The report recommends that Mongolia adopt a three-pronged diversification strategy aimed at attracting investment to new sectors, to new regions within the country, and from non-traditional investors.
Essential to the proposed strategy are improvements in transparency, accountability, business procedures and anti-corruption laws. In addition, the IPR counsels Mongolia to employ mining revenues, as well as FDI, to address major infrastructure and skills impediments. The mining sector itself could become a "growth pole" supporting economic diversification, with the adoption of an enhanced regulatory framework.
In addition, the IPR suggests that considerable potential exists in sectors associated with the country's traditional economic and social model, such as in eco-tourism, livestock and cashmere production. Growing FDI in these segments will require a carefully designed plan, strong institutional setting and professional investor-targeting based on a country brand.
Representatives of the international community participating in the discussion of the IPR were optimistic about Mongolia's potential to attract investment, but stressed the need to improve investment regulations, national infrastructure and diversification efforts.
A final draft of the IPR was earlier presented to Mr. Norovyn Altankhuyag, Prime Minister of Mongolia, and discussed at a workshop held in Ulaanbaatar, attended by public officials and private-sector representatives, in March 2013.
UNCTAD produces IPRs at the request of developing countries and nearly 40 such reviews have so far been carried out.
Download: - Investment Policy Review: Mongolia
Cuban Cancer Drug Registered in Mongolia
Havana, Cuba, Apr 30 (Cadena Agramonte) Vidatox is a Cuban cancer medication already registered in Mongolia, where doctor Carmen Morales wound up a series of presentations of the product and held meetings with oncologists in several hospitals in the capital Ulan Bator.
Morales, who is a specialist with the Havana-based LABIOFAM entrepreneurial group, explained about the characteristics and properties of the cancer medication being produced by the Cuban entity.
Vidatox is a bio-therapeutic formula made from the venom of the Cuban native Rhopalurus Junceus scorpion, whose administration has improved the quality of life of cancer patients by mitigating pain and avoiding undesirable symptoms caused by chemo and radio therapy.
'Mongolia is Korean business-friendly' says Ulaanbaatar Mayor
April 30 (The Korea Times) Mayor of Ulaanbaatar Erdene Bat-Uul said his country provides "immense business opportunities," particularly for Korean businesses.
"We have many workers who can speak Korean fluently as they had lived in Korea for a certain period of time as guest workers. Therefore Korean companies will have no difficulties in communicating with them," he said through an interpreter during a recent interview. (Mogi: haha, "through an interpreter" sounds deliberate)
He said these Mongolians, who had years of work experience in Korea under the Employment Permit System (EPS), also have an understanding of the Korean corporate culture.
"Such workforce will definitely benefit Korean investors if they do business there," he said.
Mongolia is one of the countries that have sent thousands of workers to Korea under the EPA system. These guest workers are mostly working in the manufacturing or service sectors for a limited period of time.
In addition to the workforce, Mayor Bat-Uul noted that the geographical location of Mongolia and its rich natural resources will also benefit Korean businesses.
"Geographically, we are close to China and Russia. And people-to-people exchanges and trade between Mongolia and the northeastern part of China as well as the Russian Far East have been very active over the past decades," he said.
"As you know, we are endowed with rich natural resources. Korean companies can partake to exploit our natural resources."
The Ulaanbaatar mayor said Korea is very important for Mongolia seeking to achieve a stable democracy and prosperous economy.
The former democracy fighter said Korea is an ideal partner for Mongolia as it has knowhow on how to build a thriving economy in a once war-torn nation.
"Although we successfully achieved transition from a communist country to a democracy in the 1990s after the collapse of the Soviet Union, and this drew positive responses from the West, we are still learning in terms of democracy," he observed.
"I see that there are temptations in our society, that if things didn't go the way as we intended there are some people who try to use physical force to make it work. This is the legacy of communism and we are now fighting against such a mentality."
Mayor Bat-Uul was to attend a meeting organized by the Northeast Asia Association which was initially scheduled for April. The meeting was rescheduled to June 24-25 due to the tragic sinking of the ferry Sewol off Korea's southwestern coast, an accident that left more than 300 people dead or missing.
Mayor Bat-Uul delivered deep condolences for the victims and missing and their families. He appreciated the Northeast Asia Association for its invitation to Korea despite the tragedy.
Bat-Uul arrived in Seoul on Friday for a flurry of meetings with Korean legislative leaders, including Speaker Kang Chang-hee, as well as his counterpart Seoul Mayor Park Won-soon. He left Seoul Wednesday.
Photo Blog: Improving Access to Information on Waste Management in Mongolia
April 30 (The Asia Foundation) More than half of the 1.2 million residents of Mongolia's capital, Ulaanbaatar, live in the city's sprawling ger areas, and the majority of residents lack access to basic public services such as water, sewage systems, electricity, and safe waste disposal, and educational resources including libraries. While the majority of ger residents are poor, living standards vary, with some earning a decent income but still unable to afford the high prices of new apartments elsewhere in the city.
This month, on April 19, The Asia Foundation, together with the Ministry of Environment and Green Development and the City Mayor's Office, launched a campaign to bring attention to the issue of waste management and the importance of recycling in the ger communities. Riding on this momentum, on World Book Day just a few days later, we held a special awareness-raising event in three ger khoroo's (sub districts) to address both the issue of waste management among youth, as well as the limited access that these students have to much-needed English-language books.
Illegal dumpsites such as this one are common in the ger areas and are the result of various factors including infrequent household collection, lack of central collection points to dispose of waste, and poor sensitization of residents. Improving solid waste management in the ger areas therefore requires a holistic approach involving governance reforms, addressing technological and infrastructural challenges, and promoting behavioral change.
To mark Ulaanbaatar's city-wide cleanup day on April 19, the Ministry of Environment and Green Development, the City Mayor's Office, and The Asia Foundation partnered to launch a public awareness campaign to improve citizen behavior around garbage disposal. Throughout Ulaanbaatar, billboards and posters such as the one above featured the slogan "Waste-Free UB is Everyone's Responsibility" to remind citizens not to dump garbage illegally.
The Asia Foundation also worked with representatives of khoroo governors' offices, businesses, residents, school children, and volunteers to clean up public spaces, ger streets, and gullies of the Model Khoroos. Here, volunteers from Chingeltei khoroo 16 wait for instruction before dispersing to clean up garbage in their neighborhood.
Volunteers separate bottles from garbage that fills a gully – a common site in ger areas that this campaign aims to change.
Along with waste management, lack of access to much-needed English-language books is an issue in urban ger communities despite Mongolia's high literacy rate. Children living in ger districts have limited access to such material in schools. Furthermore, there are very few libraries located in these areas, and travel to better-equipped libraries in central Ulaanbaatar is time-consuming and too costly for many.
On April 23 – World Book Day – together with our Books for Mongolia partner, the American Center for Mongolian Studies (ACMS), and the Zorig Foundation's Young Environmentalists Group, we organized "Reading Time with Art," an event held in schools in three khoroos where we are currently implementing the Model Khoroo Solid Waste Management Project. As part of the event, 100 high-quality English-language books were donated to each of the schools, and staff engaged with the students on the issues of solid waste management in their communities and highlighted the importance of recycling.
The highlight of the World Book Day event was an art session that focused on creating art from recyclable materials in order to raise awareness around the importance of recycling. The activities were based on the book, LooLeDo: Extraordinary Projects from Ordinary Objects by Mark Icanberry, which was donated as part of the collection given to the schools. During discussions, students at Sukhbaatar Secondary School pointed to the lack of garbage cans and recycling bins in their khoroo as a contributing factor to why residents dump waste illegally.
Here, students present their finished projects made out of recyclable materials at the end of the event.
Read more about the Model Khoroo Solid Waste Management Project, implemented under the framework of the Foundation's Urban Services for the Ger Districts of Ulaanbaatar Project with the support of the Australian Government's Department of Foreign Affairs and Trade Australian Aid Program.
Tserenkhand Choijinnyam is the Books for Mongolia program coordinator; Hannah Bateman, is an Australian volunteer/urban governance program officer and Tirza Theunissen, the deputy country representative of The Asia Foundation in Mongolia. Tirza Theunissen can be reached at firstname.lastname@example.org.
U.S. Federal Bureau of Investigation trains law enforcement officers in Mongolia
May 1 (UB Post) In the framework of legal reform laid out by the Minister of Justice, a proposal for the formation of an investigation bureau focused on national security and fighting transnational organized crime was submitted to cabinet members. The main activities of the Bureau of Investigation would be to fight against drug trafficking, money laundering, human trafficking, and cyber crime. In order to study the experiences of countries that fight these crimes, the U.S. Federal Bureau of Investigation (FBI) was called on.
The FBI has been providing training to Mongolian law enforcement officers since April 21.
We learned more about the training from Ronald D. Curtis, special agent of the FBI and Virt Blake, legal attache of the U.S. Embassy in China.
How does the FBI work?
First of all, after analyzing what kind of crime is harmful, we start to work. We investigate the crimes that might impact society negatively. For example, we mostly fight against terrorism and cyber crime. Cyber crime is really harmful to the global community. The FBI does not investigate crimes such as assault, transportation accidents, or domestic violence.
Mongolia is considering the formation of a Bureau of Investigation. Under what department does the FBI work?
The FBI belongs to the United States Justice Department. There are other agencies such as the Drug Enforcement Administration in the Justice Department. The United States of America is a federal country so each state has a legal office and they all belong to the Justice Department.
Do any other law enforcement officers participate in cases handled by the FBI?
The FBI cooperates with the other legal agencies (city, state, and federal) which have the same obligation. During the handling of the case, the prosecutor's office controls it.
Transnational organized crime occurs in Mongolia. By joining the National Investigation Agency of Mongolia and Mongolian Criminal Police Department, we established the Department for Fighting Against Organized Crime. You have conducted several surveys in Mongolia. Do you think that we really need the National Investigation Agency?
We don't have the right to draw a conclusion on it. Establishing a Bureau of Investigation or not will depend on your country's government's decision.
Who initiated the idea to come to Mongolia?
In 2013, delegates led by the Minister of Justice of Mongolia visited the U.S., and during the visit they met the head of the FBI. Currently we are developing a draft on the Bureau of Investigation. In connection with it, they discussed inviting facilitators from the FBI to share their information and experience. Based on this, the trainings were scheduled to be held for two weeks in April 2014. At present, we are starting the training.
What kind of information did you have about the Bureau of Investigation draft?
We met working group members from the Standing Committee of the Cabinet last Friday and D.Battsogt, the Member of Cabinet headed the meeting. The draft consisted of six chapters and 40 provisions. At present, we have not become acquainted with the final draft, which is why we couldn't make any conclusions earlier. As we understand, the newly established agency will investigate illegal drug and human trafficking, and cyber and financial crime.
Vietnam, Mongolia Boost Mutual Trust, Cooperation with Annual Consultation Meetings
HANOI, April 30 (Bernama) - Vietnam and Mongolia have agreed to boost exchange of high-ranking delegations to enhance political trust between the two countries, Vietnam News Agency (VNA) reported.
Both countries reached the agreement during a three-day political consultation between Deputy Foreign Minister Ho Xuan Son and his Mongolian counterpart Damba Gankhuyag that ended here on Tuesday.
Both sides expressed satisfaction with the development of ties in the recent past especially since Mongolian President Tsakhigiin Elbegdorj's visit to Vietnam last year.
Both sides are also keen to create favourable conditions for businesses to seek investment opportunities to implement agreements signed between them.
The two countries will also boost bilateral collaboration in education, tourism, health and oil and gas exploitation, and cooperation between the two foreign ministries.
While in Vietnam, the Mongolian diplomat paid a courtesy call on Deputy Prime Minister Nguyen Xuan Phuc.
Vietnam and Mongolia will mark their 60th anniversary of diplomatic ties in November.
Study: State-Sponsored Formalization of Household Herding in Rural Bayanhongor
"A herder is master of 1000 professions." President Elbegdorj, printed at the top of herder diplomas
By Ariell Ahearn, April 29 (Mongolia Focus) --
The Presence of the State in Rural Mongolia
Over the course of my dissertation fieldwork in Mongolia, I spent a considerable amount of time 'doing the rounds' with the bagiin darga (rural district supervisor) of district 1 in Olziit sum, Bayanhongor province in central west Mongolia. 'Doing the rounds' consisted of traveling to each herder household with a variety of objectives depending on the season, such as buying sheep wool, issuing livestock insurance, counting livestock numbers, administering national household surveys, traveling with vets or doctors, etc. In my field sites in rural Bayanhongor, I observed an active state presence in herder's personal lives in both the district and provincial level and was often struck by the frequency of contact between government representatives and herding households.
Over the course of my time in the field from May 2013 – January 2014, I observed a set of practices initiated by the state that I consider to be part of an ongoing process of formalizing and commercializing the household production of rural mobile pastoralists in Mongolia. My experience is somewhat at odds with the portrayal of an absent or dysfunctional state administration in rural Mongolia; rather, the state seems to be actively involved in shaping the production strategies of herders and the nature of their citizenship.
Herders' Diplomas During an Election Campaign
For this entry, I would like to focus on one initiative in which I was an active participant. About a week before the presidential election in June 2013, I accompanied thebagiin darga (district administrator) and two others as they distributed three objects to each herder household in my field site in Olziit sum. I actively assisted them in this process and documented the families as they received these objects. The objects were: an official diploma for herders, which was presented in an red folder with the diploma title 'Mongolian National Herder Diploma' (Монгол улсын малчин үнэмлэх) embossed in gold letters on the cover, a medal titled 'Mongolian National Herder' (Монгол улсын малчин), and a red colored personalized official stamp (тамга) with the name of head of the household and registration number carved into its oval rubber shape.
The diploma is about 8.5 x 11 inches and divided into two sections. The left side of the page reads (rough translation):
Diploma of the Profession of Herder
Registration number XXXX
Sangi Ochir Monkhbat of Bayanhongor aimag'sOlziit sum
"The professional herder certification is being presented to you in accordance with your mastery of the methods, skills, and knowledge of a herder"
Government registration number XXXX"
At the bottom of the left side are the seals and signatures of the Ministers of the Department of Labor and the Department for Agriculture.
The right side of the page reads:
"This is to certify that Sangi Ochir Monkhbat is carrying out and maintaining the traditional practices of animal husbandry of which he has mastered and for which he knows the knowledge and methods." Following this statement is a bullet list of thirteen points summarizing the knowledge and skills that comprise the work of a herder.
These diplomas were distributed to the male and female heads of households along with a medal featuring the title "Mongolian National Herder" with the five types of livestock in an inverted V shape with the horse at the pinnacle. As we distributed these items, the bagiin darga jokingly said to the herders, "Now you have a profession, congratulations." As we traveled over the alternatively sandy and rocky dirt roads of the district, the bagiin darga would tell me the name of the next family that we were going to visit and I would locate their individually wrapped and labeled stamp from a flimsy blue and white plastic bag, tearing at the seams and jammed up on the shelf above the dusty seat of our tough Honda excel. When we arrived at a household, we would sit down for the customary tea and taste from their hospitality plate and the darga would explain the purpose of the visit. Then he would gesture for one of us to give the diploma, medal, and stamp to the heads of household. Depending on the household and our timing, I would snap a few photos of the herders with their certificates. These items were being distributed to every fulltime herding family regardless of age. A few of the families were quite elderly and others received the diplomas with infants and young children looking on. Many families asked what they were supposed to do with the stamp, and the bagiin darga explained that it was to be used when they sold their produce, especially wool and cashmere.
The process is especially interesting if looked at vis-à-vis the efforts that herders are making to ensure that their children participate in formal school-based education in rural and provincial centers. My colleague, Dr. Bumochir Dulam and I, found that herders in Northern Bayanhongor province invest a considerable amount of their wealth generated from livestock produce as well as resources such as time and social capital to provide school-based education to their children. Over the course of my time in Mongolia, herders constantly referred to themselves as "unskilled" or "uneducated," and used the Mongolian term "мэргэжилгүй," which translates as "without a profession or unskilled" to describe themselves. I have heard these terms used frequently in Ulaanbaatar as well and they seem to comprise a general discourse on herders as formally uneducated and unskilled individuals. Formal education, in many ways, seems to be the primary quality that many Mongolians I talked to used to differentiate herders/rural work from non-herders/non-rural work.
The State's Perspective on Herding
In this context, the government initiative to distribute diplomas to herders appears to be a way to formally acknowledge and value the work of mobile pastoralists as a valid profession with a set of skills that contribute to the idea of the Mongolian nation. The idea that herders play an essential role in maintaining the traditional culture and environment of Mongolia is listed in the bulleted list of herder skills highlighted on the diploma. All three objects include the term "Mongolian National Herder" which emphasizes the role of the herder in a national project. Although these objects invoke the socialist past (the red color, the symbolic qualities of a medal and a stamp), the type of citizenship that they put forth is one based on an entirely different logic of production and political participation. This logic includes a discourse of personal responsibility and initiative, which I observed the Bayanhongor administration use multiple times with herders in a variety of formats (from sum meetings, conversations, speeches by the provincial governor, to a "relationship" notebook that is kept in the herderger as a way to communicate with state representatives).
It is interesting to see how the distribution of these materials is playing out. In August, I visited Gurvanbulag sum, which is about 240 km north of the Bayanhongor aimag center and my primary field site of Olziit sum. (I did not take part in the distribution of the diplomas in this area). As I was talking to an older herder in his late 50s, an active and vocal member of the community who often presents long critiques of government initiatives during sum meetings, he stood up to show me the long banner of medals hanging from the north side of his ger. He explained many of them to me, but stopped at the recently distributed Mongolian National Herder medal, a shiny piece at the end of a long display of tarnished socialist awards, to say that it is the medal that he is most proud of. He removed it from the banner and held it up to emphasize that this medal was the most important of them all, and in comparison the rest did not matter. On the other hand, some herders appear to be a bit ambivalent towards the diploma. The bagiin darga himself awarded me with a diploma and issued me a registration number for his district in what appeared to be a humorous act of everyday resistance.
Why is the State Making Its Presence Felt in the Countryside?
How can we understand these state initiatives? Is this simply a tactic to gain more votes? Is it an initiative to be more inclusive of rural society by encouraging participation after economic collapse and the rapid post-socialist privatization of the 1990s rendered the paternal state largely absent and ineffective? The overt economic quality of these initiatives, especially in the context of Bayanhongor's effort to revitalize its sums with funding from the World Bank, calls attention to the larger development project that the Mongolian state is carrying out. These initiatives are occurring alongside the privatization of winter and spring camps and the increasing reliance of herders on annual bank loans to finance their household (education, household expenditures, health care, livestock care). To gain further insight on how these measures might play out in Mongolia, it might be useful to look at places in Africa and Chile and the development model of value-chain driven agriculture playing out among smallholding farmers. Phil McMichael's 2013 piece in Third World Quarterly titled "Value Chain Agriculture and Debt Relations: Contradictory Outcomes," provides a potential starting point for looking at how the Mongolian state is moving toward managing the agricultural sector. One aspect of this model is the focus on 'Mongolian made" fiber products, which encourages herders to sell their fiber to the local government rather than Chinese traders. The bagiin darga, who referred to himself not as a "boss" but as a servant of both the government and the district herding community, explained that prior to the government purchasing of sheep wool from herders, locally produced wool would go directly to China. He sees the government purchasing initiative as being more systematized and reliable, and contributing at least superficially to Mongolian economic and cultural sovereignty.
Contrary to an absent state in rural Bayanhongor, I observed a local administration that was very involved in managing herder affairs with frequent contact via sum meetings, phone conversations, and home visits. Government representatives are often active, absentee or former herders and play multiple roles in the community. The paternal state of the past may have given birth to a commercial one, and there needs to be more research focusing on how its institutions manifest within household units and are influencing the nature of citizenship. The formalization of household herding though the distribution of diplomas should be seen as part of this wider process of governance and the changing nature of rural work in Mongolia.
About Ariell Ahearn
Ariell Ahearn is currently a Ph.D. candidate in the School for Environment and Geography at Oxford University, where she is working on an ethnography of changing rural work practices among semi-nomadic herders in central-west Mongolia. She spent the last year working and living with herders in order to understand the conditions for practicing nomadic pastoralism in her field sites located in the region of Northern Bayanhongor province. Originally from rural upstate New York, Ariell is passionate about rural livelihoods, local knowledge, and livestock husbandry as it is practiced around the world.
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