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Friday, June 6 , 2014
Headlines in Italic are ones modified by Cover Mongolia from original
SouthGobi to Put Workers on Slowdown at Mongolia Coal Mine
By Michael Kohn
June 5 (Bloomberg) -- Hong Kong-listed SouthGobi Resources Ltd. plans a "slowdown" at its coal operations in Mongolia, Chief Executive Officer Ross Tromans says by phone.
* Approx. half of 405 workers will be affected by slowdown and will remain at home on 60 percent of salary: Tromans
* Production will be "matched to demand": Tromans
* Slowdown related to "management of financial resources and the demand for coal": Tromans
* Slowdown to begin next week and expected to last until at least mid-July: Tromans
* NOTE: SouthGobi majority shareholder Turquoise Hill Resources Ltd. will support the company with a $10m revolving credit facility for short-term working capital requirements, according to a May 25 statement.
* NOTE: Oyu Tolgoi copper mine, 66% owned by Turquoise Hill, said May 28 it would cut jobs.
(Bloomberg First Word)
Oyu Tolgoi employment termination notices show several violations says Union
June 5 (UB Post) Laid off workers of Oyu Tolgoi (OT) sought help from the Confederation of Mongolian Trade Unions (CMTU), and confederation officials held a press conference to publicize several unfair articles in the OT employment contract termination statements sent to 300 employees last week.
Out of the total number of laid off workers, 200 were contracted workers of OT, while the remaining 100 were hired by subsidiary executor companies of OT, as posted on the OT website.
Businesses must inform their workers about lay offs 45 days prior to the termination of their employment contract, in accordance with the Labor Law of Mongolia, suggesting that the OT contracts should be annulled on July 14.
"No one from CMTU, the Ministry of Mining, or the Ministry of Labor have detailed information about the lay off. Some of the laid off workers showed us the contract termination statement on Wednesday, and several articles seemed to be violating labor laws in a compulsory manner," said Chief of Energy, Geology and Mining Trade Union of CMTU S.Ganbold.
He highlighted, "The statement said that the workers will earn only their basic wages after receiving the statement, until the contracts are terminated, but OT must provide overtime pay. Also, the statement says any worker who gives away confidential information about the employment contracts will not be able to receive unemployment compensation, which sounds rather like threatening somehow. There are business and company secrets, but no employment contract secrets."
Rio Tinto has decided to reduce its spending by one billion USD due to problematic business conditions, reported Prime Minister N.Altankhuyag during the "30 Minutes with the Prime Minister" weekly meeting on Thursday. The spending cut resulted in the laying off of 300 workers last week.
Unuudur Daily sources reported that the Prime Minister received this information from member of the Board of Directors of Oyu Tolgoi LLC, Ch.Otgochuluu.
When asked about how CMTU is planning to protect the rights of compensation for the laid off workers, S.Ganbold said, "Rio Tinto problems are not our concerns. But as long as Mongolian workers are serving at Oyu Tolgoi, despite the fact that it is foreign-funded, it will be our concern. We will submit a statement to the Prime Minister in order to ensure compensation for all workers and prevent mass lay offs of more Mongolian workers at OT."
Only ten workers met with the CMTU officials, while others fear that sharing the statement might prevent them from receiving compensation, reported S.Ganbold.
Officials of the Public and Media Communications Division of OT stated, "We have no information that OT administration will reply to the issue. But we expect that OT will negotiate with administrators of CMTU."
June 5 (MIBG) Erdene Resource Development Corp (TSX:ERD) released the results of their second-quarter exploration program this week, demonstrating strong continuity of the Altan Nar gold-polymetallic project. The most-recent findings from surface exploration and drilling have supported the sustained development of the mineralization project. The continued prosperous progression of the project demonstrates the strength of the company, considering its dependability on the value of the project.
Following the close of a C$350,000 private placement made by Teck Resources Ltd at $.175 per share, Erdene closed a second private placement for an additional C$685,520. These financings will supplement exploration at the Altan Nar project.
Teck now holds 9,142,857 common shares and 1,071,429 purchase warrants providing a 14.2% stake in Erdene if the purchase warrants are exercised. Teck also has the option to increase its stake in the company by purchasing additional shares. Shares can be purchased until Teck has invested a total of C$3,000,000 or until their stake in the company reaches 19.9%. The strategic alliance between Teck and Erdene demonstrates the certainty that the two companies have in Erdene's current metals projects in Mongolia.
Two prospects of the Altan Nar project, the Discovery Zone and Union North, have exhibited substantial amounts of high-grade mineral content. The most notable drill-hole, TND-65, included 17.7 g/t of gold over a 5-meter interval within a 19-meter interval of 5.8 g/t of gold. Both areas also revealed sizeable amounts of near-surface mineralization. In addition to these two zones, the exploration project identified 10 other high-profile drilling prospects within the 5.6km by 1.5km area at Altan Nar. Continued exploration drilling in these relatively undrilled target zones will further expose the potential success of the gold-polymetallic project. Below is a table displaying highlights of Discovery Zone North.
Results from Erdene's trenching program at the Union North Prospect, released in January, revealed further support for the project. Out of the 5 trenches, the 2 central trenches yielded up to 20.2 g/t of gold and 138 g/t of silver over a 7-meter interval. Using these trench results, cross-referenced with other drill results, confirms a sizeable quantity of shallow mineralization in the area.
As trenching and exploration drilling continues, it is becoming more evident that Erdene is in ownership of a highly prospective asset. Current exploration has shown higher concentrations of high-grade gold and silver along with notable traces of zinc and lead. Moreover, most target zones have not yet been tested lower than 250m underground, despite displaying high gold concentrations at depth.
Erdene will continue exploration of Altan Nar through the expansion of current operations. Throughout the remainder of the year, further development of the remaining drilling targets should help Erdene move closer to acquiring a National Instrument 43-101 compliant resource report.
For more information on Erdene, please review MIBG's Equity Research under the research section of our website, or by using the link below:
Mogi: reposting with a slight but important correction
Wellington Management Cuts Stake in MMC to Under 5% - CORRECTED
(corrects ING to BNP Paribas in last paragraph)
June 3 (Cover Mongolia) Wellington Management, one the world's largest private investment management firms with US$869 billion client assets under management as of 31 March, 2014, has cut its stake in Mongolian Mining Corp. (HKEx:975) to 4.99% from 5.03%.
Previously, Cover Mongolia had reported that Wellington had become a substantial holder in MMC, purchasing 2.6 million shares on the exchange at HK$0.80 on 5 February, 2014 to claim a 5.01% stake.
Looking at the two notices filed, Wellington had bought 571,722 shares between 5 February – 29 May to increase its stake since from 5.01% to 5.03%. Under exchange rules, a substantial holder needs only to disclose share transactions when crossing over a whole percentage point mark.
This time, the company sold 1,130,500 shares at HK$0.596 on 29 May, also on the exchange, to cease being a substantial shareholder.
This disclosure was made public after Tuesday HKEx close. MMC closed the day down 1.67% and has dropped 42.16% in 2014 on continued weak coking coal sentiment from China, despite having eased its short-term debt obligations with a $150 million loan from BNP Paribas and ICBC to refinance a $130 million debt to BNP Paribas.
Minters singing on Xanadu deal
June 6 (Lawyers Weekly) Minter Ellison was the Australian counsel on a recent deal that involved the firm's Mongolian office.
Firms: Minter Ellison (Xanadu Mines); Norton Rose Fulbright (Turquoise Hill Resources)
Deal: Xanadu Mines Limited and its joint venture company Mongol Metals LLC acquired a 90 per cent interest in Oyut Ulaan LLC from a wholly-owned subsidiary of Turquoise Hill Resources Limited
Value: $US14 million
Area: Energy & Resources
Key Players: Minters team was led by Elisabeth Ellis (pictured), the managing partner of the firm's Ulaanbaatar office, with assistance from her Mongolian-based colleagues Sebastian Rosholt and Dunnaran Baasankhuu. Minters chairman Bruce Cowley and his Brisbane-based partnership colleague Simon Scott provided assistance in Australia, with support from senior associates Angie Clapper and Jordan Phillips. Norton Rose Fulbright's Steve Malas and associate Peter Riddell advised Turquoise Hill Resources. Malas and Riddell are based in the firm's Montreal office
Deal Significance: Xanadu Mines Ltd is an ASX-listed mineral company that has significant interests across Mongolia's porphyry copper belts. This acquisition is being funded by Xanadu with a $US4 million, three-year loan agreement with the Noble Group and a $US4 million equity in Mongol Metals from its joint venture partner as initial consideration. "Mongolia offers enormous opportunities for private sector investment, not only in natural resources but also in infrastructure development and in associated services industries," said Ellis.
Mogi: Someone please save me from Montsame trading reports. But sadly I have no options as it's the only one that reports before the next trade begins.
MSE News for June 5: Top 20 +0.81% to 15,570.61, Turnover ₮18.9 Million
Ulaanbaatar, June 5 (MONTSAME) At the Stock Exchange trades held Thursday, a total of 14 thousand and 931 shares of 36 JSCs were traded costing MNT 18 million 944 thousand and 066.00.
The number of 16 shares increased, 11 shares--decreased, and nine shares remained. The total market capitalization was set at MNT one trillion 585 billion 374 million 632 thousand and 183. The Index of Top-20 JSCs was 15,570.61, increasing by MNT 125.74 against the previous day.
Mogi: going through internal disputes I hear. To my understanding, majority shareholders are accusing FRC & underwriter BDSec of colluding into pressuring them list. FRC's comment is informative.
SILICAT JSC' SECURITIES TRADING SUSPENDED
June 5 (MSE) According to Silikat JSC's shareholders meeting decision of 30 April 2014, FRC announced the suspension of securities trading of Silikat JSC starting from 3 June 2014.
Mogi: new record, previous ₮1,826.09 on May 22
BoM MNT Rates: Thursday, June 5 Close
May, June MNT Chart:
BoM FX auction: US$16.75 million sold at ₮1,826.1, CNY29 million at ₮292.1, $40.8 million MNT swap bids, $1million USD swap asks accepted
June 5 (Bank of Mongolia) On the Foreign Exchange Auction held on June 5th, 2014 the BOM has received bid offer of USD and CNY from local commercial banks. The BOM has sold 16.75 million USD as closing rate of MNT 1826.10 and 29.0 million CNY as closing rate of MNT 292.10.
On June 5th, 2014, The BOM has received MNT Swap agreement bid offer in equivalent to 40.8 million USD and USD Swap agreement ask offer of 1.0 million USD from local commercial banks and accepted all offer.
June 5 (MIBG) Since mid-2103, MIBG has been highlighting the drastic measures that the Chinese Government has been taking in order to reduce air pollution, through reduced coal consumption. Now in the 12th 5-year plan, China is focusing on energy and the environment, with targets aimed at cutting energy intensity, carbon intensity and reducing pollution of the air, water and soil. However, since China is the world's largest consumer of coal and nearly 70% of the country's electricity comes from coal, the Government has struggled to produce an efficient plan. To date, the country has been in the process of changing its energy consumption by tightening rules for power plants and reducing coal usage and increasing non-fossil fuel consumption.
China has been investing heavily into renewables, clean energy and into the development of alternative non-fossil fuels over the past 3 years. Late last month, China and Russia signed a 400 billion USD natural gas deal. Under this agreement, Russia is to provide 38 billion metric cubes of natural gas to China over a 30-year period, beginning in 2018. Preparations are already underway for the construction of a pipeline between the two countries, this is a critical step before the actual supply can begin. As a result of this deal, the Chinese Government is expecting a 14.5% growth in the domestic natural gas sector this year and expects that this could double by the time Russia starts supplying. This compares to 1.5% growth in the coal sector, clearly highlighting the comparative value that the Chinese place on each.
While we see this transaction as an important leap forward for China in their battle against pollution, it is important to note that this may have negative outcomes for major coal exporting countries. Countries such as Australia, Indonesia and Mongolia, who have been feeding the Chinese coal appetite, face decreasing exports.
Mongolia is particularly exposed to such decreasing demand due to a lack of alternative buyers for its coal products. With vast reserves of coking coal, Mongolia is one of the most coking coal-rich nations in the world, with estimated resources exceeding 160 billion tons. Over the past decade Mongolia's mining boom has contributed to the expansion of key projects within the coal sector, leveraging advantages such as geographic proximity and operational ease. However, with such a heavy dependence on China's coal consumption these advantages look less appealing.
In 2012, Mongolia's coal products held 43.4% of the total exports for the country, decreasing to 26.3% in 2013. We believe that a further decrease in demand for coal will influence Mongolia's mid and long term outlook, not only for the coal sector but also for the entire economy.
Prices jump while earnings remain unchanged
June 5 (UB Post) The "New Government for Changes" raised pensions by 15 to 30 percent depending on the previous amount, starting February 1 this year, as it had promised earlier. However, the pension increase which delighted the elderly for a while, which was followed by the same amount of hike in commodity prices.
The minimum raise of 15 percent added around 20,000 MNT to average pension amount. But the value of Mongolian currency has plummeted in recent years, reducing the purchasing power of 20,000 MNT equivalent to only two kilograms of beef. Just three years ago, 20,000 MNT was enough to buy food to last for ten days. If the current pace of inflation go on longer, it is clear what will become of the purchasing power of 20,000 MNT in three years from now.
Mongolia is home to over 45 million livestock. Yet meat, main and other basic food products for Mongolians is above 10,000 MNT per kilo which is ironic. In a matter of only a year, meat prices have risen by 20 percent in Mongolia.
The government is taking steps to support small and medium enterprises to increase exports and supplement imports. However, if price of domestically manufactured goods jump on average 20 percent a year, it is hard to tell whether it will benefit Mongolia in any way.
Price increase is quite predictable, or rather obvious, once the talk of pension and pay raise breaks out.
The raise needs to be conducted after thorough planning and time management as exchange value of MNT has declined by over 30 percent this year. Currently pay raise is likely to bring nothing but price increases.
As of the first five months of 2014, inflation rate has reached 12.3 percent in Mongolia although it dipped down to almost eight percent in August 2013. The rate climbed back up to 11.7 percent at the end of last year due to the increase of USD vs MNT exchange rate.
Inflation rate has almost risen by 50 percent in the past four years, compared to the previous four years. The pension and pay raise must be made depending on inflation rate and economic growth which the government action plan has included.
Since the 2012 parliamentary election, only pension has been raised, while prices of all consumer goods have rapidly increased at the same time. For instance, the retail price of a liter of "Pure Milk" of APU LLC was 1,700 MNT in 2011, today it is 2,700 MNT. It shows that price of milk that come factory packaged has increased 60 percent, while wages remained the same.
It is good news when wages or pensions are increased, but in the case of Mongolia, it encourages traders to increase prices of consumer goods as much as they want which in turn causes conflicts between the people and the government.
Though pension and wage increase are not solely responsible for price increases, these are one of the main factors causing them which means that the government must adopt a better economic management and forecast systems rather than focusing on promising too many things that they can't afford to keep.
Bread prices jump 5% to 10% on rising cost of flour
June 5 (UB Post) The price of bread has increased by 50 to 100 MNT. Supermarkets and shop assistants say that prices are increasing with bread distributors, but bread prices are varied at different supermarkets and grocery stores.
Misheel bread went from 1,100 MNT to 1,200 MNT. Talkh Chikher officials said, "The cost of flour has increased, that's why we raised the price of bread. All bread prices at our company were increased by 50 to 100 MNT last week, except Atar bread."
Atar-Urguu also raised its bread pricest by 100 MNT, except for their Atar bread.
GoM to submit bill on allowing movable and non-material properties as bank collateral
Ulaanbaatar, June 5 (MONTSAME) At its irregular meeting on Wednesday, the cabinet decided to submit to parliament a draft law on pledge of movable and non-material properties.
The cabinet considers that creating a legal environment for putting movable and non-material properties into the economic circulation by pledging them can accelerate the national economic growth and augment investment and credit financing.
By the draft law, all kinds of stocks, shares, designs of products, trademark, all kinds of creative works of sciences, arts and other movable properties can be items to pledge.
Government, City Procurement Agencies to Run "Transparent Procurement" Event on Chinngis Square, June 7
Ulaanbaatar, June 5 (MONTSAME) Promoting the Government policies on procurements, a day event named "Transparent Procurement" is to take place on the Chinggis square June 7.
To be organized by the Government Procurement Authority and Municipal Procurement Agency, the event will aim at informing the public on procurement actions held with the budget capital of 2013-2014, and promoting government procurement policies and achievements of specialized agencies.
Visitors will also get informed about investments in the capital city and provinces, relevant trainings and electronic tender processes. Officers of the taxation authority and the Fair competition and customer protection authority will give consultations to visitors.
Director of National University found guilty of embezzling 347 million MNT from students
June 5 (UB Post) The Agency for Fair Competition and Consumer Rights (AFCCR) reported that it has sent a demand for compensation to the director of the National University of Mongolia (NUM) A.Galtbayar, who was found guilty of unfairly charged a total of 347 million MNT from students who changed their majors.
The AFCCR received a complaint about A.Galtbayar in November 2013, who was subsequently found guilty for illegally charging 236 million MNT from 166 students, through his order issued on September 27, while additional 75 students also paid 111 million MNT to him for changing majors.
A.Galtbayar plead not quilt and appealed against the demand but the court denied the appeal.
The AFCCR has therefore sent a request to Minister of Education and Science L.Gantumur to impose legal penalties to A.Galtbayar for repeated financially fraud.
GoM to Issue Letter of Support to TDB on Issuing International Bonds
Ulaanbaatar, June 5 (MONTSAME) The cabinet meeting on Wednesday backed in principle a bill on "glass" account which has been initiated by the President and decided to convey some proposals to the draft initiator.
- The cabinet authorized the Trade and Development Bank of Mongolia (TDBM) to issue the "letter on rendering support" in order to help the commercial bank issue bonds at the international market, deciding that the government will not bear a responsibility for the guarantee.
- The cabinet also backed the President's draft decree on giving directions to the government about increasing Mongolia's participation in peacekeeping operations and rendering assistance to peacekeepers and their families. A relevant response will be given to the Presidential Office soon.
Erdenes TT May coal sales reach 1Mts, targeting 11Mts exports in 2014
Ulaanbaatar, June 5 (MONTSAME) The coal sales of Erdenes Tavan Tolgoi (ETT) reached nearly one million ton this May, say its authorities.
In the first five months of this year, ETT state-owned company sold more than two million ton of coal to China. At the Chinese port, a price of coal from the East Tsankhi section has been USD 57 per ton, while a price of coal from West Tsankhi has been lower, some USD 34-37 per ton during that time. According to the contract with Aluminum Corporation of China Limited (CHALCO), the coal prices will not see changes until this July.
ETT has planned to export 11 million ton of coal this year. In February of 2014, ETT bought the road, linking Tavan Tolgoi to Gashuun Sukhait border port, at the construction cost of USD 90 million from Energy Resources, thus saving transport expenses. When Energy Resources used to own this road, ETT had to pay road use fee of USD 3.8-4.8.
Eznis Airways Flights Divided Among Aero Mongolia, Hunnu Air
June 5 (infomongolia.com) In May 2014, Mongolia's national airline Eznis Airways LLC announced to stop its operation for an uncertain period of time and due to occurred situation, the Ministry of Roads and Transportation in collaboration with the Civil Aviation Authority of Mongolia (MCAA) urgently took necessary measures to continue flights conducted by Eznis Company.
According to regulations, the local destinations used to conduct by Eznis were shared to Aero Mongolia and Hunnu Airlines and the Aeronautical Information Services Division at MCAA approved the flights effective from June 02 to October 25, 2014.
The new regulation was introduced by the Division Chairman P.Ganbold, who said all domestic flights used to conduct by Eznis Airways LLC will be carried out and normalized by Aero Mongolia and Hunnu Airlines and about 1,800 books ordered to Eznis were also managed.
Moreover, Mongolia's national flag carrier MIAT announced its possibilities to conduct domestic flights to Khovd and Oyu Tolgoi aerodromes by its Boeing 737 aircraft.
Domestic flights to 12 destinations by Aero Mongolia and Hunnu Airlines from June 02 to October 25, 2014
1. Ulaanbaatar - Bayan-Ulgii, Tue, Wed, Thu, Sat, Sun by Aero Mongolia
2. Ulaanbaatar - Bayankhongor, Tue, Thu, Sat by Hunnu Airlines
3. Ulaanbaatar - Govi-Altai, Tue, Thu, Sat by Hunnu Airlines
4. Ulaanbaatar - Dornod, Mon, Wed, Fri, Sat by Hunnu Airlines
5. Ulaanbaatar - Zavkhan (Donoi), Mon, Fri by Aero Mongolia and Tue, Thu, Sat, Sun by Hunnu Airlines
6. Ulaanbaatar - Khovd, Tue, Thu, Sat by Aero Mongolia and Mon, Wed, Fri by Hunnu Airlines
7. Ulaanbaatar - Khuvsgul, Mon, Tue, Wed, Thu, Fri, Sat, Sun by Aero Mongolia and Mon, Tue, Wed, Thu, Fri, Sat, Sun by Hunnu Airlines
8. Ulaanbaatar - Umnugovi, Mon, Tue, Wed, Thu, Fri, Sat, Sun by Aero Mongolia and Mon, Tue, Wed, Thu, Fri, Sat, Sun by Hunnu Airlines
9. Ulaanbaatar - Uvs, Tue, Thu, Sat by Aero Mongolia and Mon, Wed, Fri by Hunnu Airlines
10. Ulaanbaatar - Oyu Tolgoi, Tue, Wed, Fri, Sat, Sun by Aero Mongolia
11. Ulaanbaatar - Tavan Tolgoi, Tue, Thu, Sat by Aero Mongolia
12. Ulaanbaatar - Ovoot, Mon, Fri by Aero Mongolia
Also, Hunnu Airlines opened Ulaanbaatar - Uvs - Ulaanbaatar flight three times a day, and Aero Mongolia Ulaanbaatar - Bayan-Ulgii - Ulaanbaatar two times a day and Ulaanbaatar - Oyu Tolgoi - Ulaanbaatar flight three times a day.
Access to Finance: Developing the Microinsurance Market in Mongolia
2014, Rendek, K. & Wiedmaier-Pfister, M.
Analyzing Mongolia's microinsurance market and suggesting measures for betterment
(Asian Development Bank) This paper provides an overview of the development of Mongolia's insurance market in general and the microinsurance segment in particular. It showcases the existing microinsurance landscape, estimates the potential demand for microinsurance, and discusses the regulation, supervision, and policy. The paper also identifies gaps in the insurance regulatory framework that need to be bridged to expand microinsurance coverage to more households. It makes the following recommendations outlining action areas that could lead to the development of microinsurance in the country:
· Strengthen access to insurance through the formulation of a coordinated financial inclusion policy;
· Industry participants should develop sustainable microinsurance programs based on market research and good business case;
· Ease regulations on insurance intermediaries;
· Expand regulations to create options for insurance providers and intermediaries to foster innovation in product development, distribution, and sustainable business models;
· Define microinsurance products that would be allowable under both life and nonlife classifications. Clarify and maintain consistency in the definitions and insurance classification in laws and regulations;
· Improve regulations and supervisory practices on consumer protection;
· Standardize insurance terminology and translations used in the industry;
· Development organizations need to ensure their programs support capacity development without skewing the development of the overall insurance market.
Spanish investors interested in Mongolia's non-mining sectors
June 5 (Mongolian Economy) On June 4th and 5th, fourteen companies from Spain came to Mongolia to operate, while more Spanish companies are currently coming to conduct further business as opportunities flourish in non-mining sectors. The Spanish Institute for Foreign Trade (ICEX), Mongolia National Chamber of Commerce and Industry (MNCCI), and the Spanish Embassy to Beijing – which covers Mongolia as well – worked together to organize an event with Spanish and Mongolian representatives at the Multilateral Partnership Meeting.
Officials from both nations discussed the current economic situation of Mongolia and the investment environment to pursue ideas on how they can collaborate with each other. The Spanish companies focus on non-mining sectors. They are interested in working with Mongolia in sectors such as green development, green technology, energy infrastructure, water recycling, and light.
According to Javkhlanbaatar S., the director of the Invest Mongolia Agency, there are huge opportunities available to both countries in terms of investment. The new Investment Law that was recently passed holds many benefits with cooperation. During the last two months, the agency has participated in multiple Investment Summits on a weekly basis discussing the current state of each of the economic sectors. There is a huge interest from the Spanish side in agriculture and green economy.
During the first quarter of the year, Mongolia received a total investment of USD 623 million. Representatives hope to achieve USD 300 million from foreign direct investment and USD 330 million from package investment. Although these numbers are estimates, the package investment numbers are higher because it is a better indicator of the financial situation in Mongolia. Javkhlanbaatar S. said that 80 companies registered since January 2014 at the Invest Mongolia Agency, showing promising growth.
However, investors are worried about the sustainability of the Investment Law in the long-term. According to Demberel I., the advantage of the new law is that it complies and matches with the international standard. On the flipside, the Investment Law is too general compared to the previous regulation. He also claims that he does not see the law beneficial for small- and medium-sized businesses in terms of attracting investment.
World Bank/IFC Enterprise Surveys: Mongolia (2013)
This page summarizes Enterprise Surveys data for Mongolia. The graphs below provide an overview of the sample and highlight the biggest obstacles experienced by private sector firms in Mongolia. The 12 tables below the graphs summarize key factual indicators at the country and regional levels for each of the business environment topics. A few subjective indicators are also available.
About this survey:
Business owners and top managers in 360 firms were interviewed from December 2012 through July 2013.
Obstacles for Firms
After being presented with a list of 15 business environment obstacles, business owners and top managers in 360 firms were asked to choose the biggest obstacle to their business.
Top 10 Business Environment Constraints
S.Ochirbat: It's time for UB residents to become city residents
June 5 (UB Post) The following is an interview with Head of the Ulaanbaatar City Planning Department of the National Research Institute which is responsible for construction, urbanization and investment issues, about housing issues in Ulaanbaatar.
Mongolian residents were given five housing loan options. Can you elaborate on this?
From my knowledge, since the 1990s, Mongolia has been fighting against Ulaanbaatar's smoke through many different measures. The World Bank and the government have spent a large sum of money on combating air pollution. The most correct way to fight smoke is to provide apartments to the people. The provision of apartments was supported by the government in various ways which increased choices for the people.
If citizens have their own land, they can exchange them for an apartment after forming an agreement with housing investors. Infrastructure issues in ger districts will be resolved through land redevelopment. Most importantly, residents need to participate in the proper structural organization and relocate from the land for infrastructural development. We'll add it to the planning, install piping networks and build roads. This is one form of housing. The government is issuing many options including paying 30 percent of a housing price in advance for deposit and applying for the eight percent annual rate housing loan. Many are not able to move into apartments because they can't pay the 30 percent. For these people, another suggestion was offered which is to withdraw a portion of their income every month if they have fixed income and when they've paid the deposit, they can move in. Many countries throughout the world have similar standards.
Moreover, there are many rundown buildings in the city. We're planning to rebuild and improve them by using modern technologies with the help of the private sector. Residents can move into whichever floor they want in local area. The City Housing Program is a comprehensive program offering these five options.
How is the work for facilitating these five options progressing?
Last year, the private sector built and commissioned apartments for 15 thousand families. Seeing from this year's permit acquisitions, we're forecasting that we'll build apartments for around 20 thousand households. Redevelopment of ger district was the biggest work we've done last year. The Citizens' Representatives Council developed the planning procedures, held discussions with investors, established contracts between residents and investors, and now they're progressing with their work. According to the information from project implementing agencies, over 5,000 apartments are to be commissioned within this year.
Investors are carrying huge responsibilities as well as risks of the city as they are letting owners of lands stay in rental accommodations. Since they're spending a lot of money on rented apartments, apartments should be built within their deadline and have residents moved in as soon as possible. We're enabling future residents to double check on the construction work. We've never had this sort of supervision before. Simply, they'll be doing both professional inspector and supervising engineer's work. Previously, each supervising engineer used to monitor 80 buildings which was a very heavy workload. When we recruited 20 more engineers to lessen the workload, we were criticized for having a huge staff structure. This structure allows recovering of costs through the income that comes from evaluations. One person cannot possibly supervise 80 buildings in a month. If they visit two buildings a day, they'll monitor only 60 buildings in a month. Is this workload really sustainable?
Within the framework of land redevelopment work, 168 household's lands were organized, and piping networks were built along with roads and engineering networks. For example, 160 households recieved comfortable apartments in the 30th Khoroo of Songinokhairkhan District. Some five trillion MNT was spent on this from the Minister of Construction and Urban Development's package. We allocated 2.2 billion MNT for taking care of heating issues. We issued the program to provide comfortable apartments to some 20 thousand households by 2018. We're confident that we will be able to achieve this.
Road work in Bayankhoshuu seems to be slow. At what stage is ger district redesigning work at currently?
It's a good thing that private sectors are doing the work. Whether it's major or minor help, it's very useful. The public now understands that there'll be road work and infrastructure in certain areas along with city expansions.
I visited Bayankhoshuu, Khutul and reviewed its road work. Several service centers had extended closer to roads. They stretched beyond their designated land and onto public land. Our land acquisition team went around and charged either compensations or after-taxes from them. Although it's said that development follows roads, residents do not fulfill their obligations. The Bayankhoshuu road is a very busy road. Currently, we're spending a portion of the 390 million USD provided by the Asian Development Bank on that road to resolve all engineering and infrastructural issues. We should do whatever we can if we wish to live comfortably. We need to understand that we're residents of a megacity of the world. What I'm trying to say is that the time has come for residents to become city residents.
There are issues of setting affordable prices for residents. How is this issue being resolved?
We've never set lower values to properties. This work is carried out through the agreement between implementers and residents. Implementing agencies are doing their best to progress the work. Interests of some thousand residents of the city are more valuable than one man's interests. The people should understand this. If they wish to live happily and comfortably, they need to start everything from themselves. There'll indeed be difficulties and obstructions in this standard. Even so, it shouldn't be stopped. Without destroying over 180 thousand chimneys in ger districts, Mongolia will not be able to get rid of soil, water and air pollution. The last 20 years has proved this. Adjustments for commencing work are now being made.
At what stage is the Capital City Housing Corporation (CHC) issue at?
The program was approved. Whether it's CHC or Ulaanbaatar Corporation, they're both needed. Before establishing this corporation, a research was conducted on countries that housed their citizen. The corporation will first purchase and then sell. The sales will settle sales issues of business entities to be redesigned. This corporation is different from the State Housing Corporation. Within this month, CHC issues will be resolved.
The CHC proposal to move buyers into apartments after depositing money is attracting people. What will happen if the government changes?
Since residents are paying a certain percentage to the housing stock, they'll supervise construction work and even if the government is changed, it'll not affect this all. This is a resident cooperation work. This work will not progress if we offer 100 thousand MNT and demand people to move out of their lands. When we created resident-investor agreements, the work started to progress. Last year, the government gave support in ger district infrastructure and gave 85.7 billion MNT from the Development Bank financing. Now the engineering network work is almost finished. The city gave 40 billion MNT for redesigning ger districts and the work was commenced. Both the state and the government is now fulfilling one purpose which is to implement the provision of the constitutional law to protect the balance of resident's comfortable lifestyle and environment. Politics isn't involved in this. If this work is shifted for political purposes and stopped, it'll become a crime against the people. When I was meeting with many specialists, I felt their 100 percent support.
The Rental Housing Program is being implemented in the city. Is this program a form of housing residents? How was this received by residents?
Last year, around 300 households were moved into rental apartments. This year, we're planning to move 396 households. This work is organized with the city budget funds. Last year, we established a housing fund. A certain portion of the state budget was allocated to this. Plans for 2030 were approved last year by Parliament. In this general plan, it was specified that 1,000 households will be moved into rental apartments each year until 2016 and in the following years, after 2016, rental apartments for 2,000 households will be built each year. Depending on the residents' capacity to purchase apartments, the number of leases is increasing but the prices are high as there's inadequacy in housing supply. It's necessary to continue this work and increase construction each year.
When we enquired renters about their comfort, they had no complaint. They used to pay 150 to 160 thousand MNT to stay in another person's residence in ger area but now they pay 120 thousand MNT to stay in an apartment. They seemed very satisfied.
With a loan from the Asian Development Bank, the area around Bayankhoshuu and Selbe are to be developed into sub-centers. Can you elaborate on this?
Within the framework of implementing the general plan to develop Ulaanbaatar through 2020, eight sub-centers were specified to be developed in the city. This work is being implemented with a 320 million USD loan from the Asian Development Bank. For starters, the parliament supported the project to redevelop Bayankhoshuu and Selbe into sub-centers. This year, we're aiming to begin planning and construction work. Our purpose is to establish eight sub-centers in Ulaanbaatar by 2030. The most important work is to install engineering networks. There'll be some household related issues and some land acquisition work. The municipality is giving 96 million USD for this. Some 16.6 million USD was allocated from this year's state budget. Bayankhoshuu Center has a 48 MW heat source with modern technology. A total of 162 hectares around Selbe and around 140 hectares of land around Bayankhoshuu were assigned for the sub-centers. In total, services will be provided straight to some 200 thousand people. To make this estimate, the Asian Development Bank provided technical support and the feasibility was determined in a short amount of time. For the first time, the Asian Development Bank opened a multi-tier credit to Mongolia.
Air polluters to face consequences for violations
-Individuals, entities, and organizations will be arraigned for their air pollution-
June 5 (UB Post) The National Committee for Reducing Air Pollution has been implementing policies to reduce air pollution. The committee is focusing on the implementation of the Law on Air Pollution and is delivering information, advice and warnings about air pollution and its dangers to individuals, organizations, and businesses.
According to Dr. Delgerzul Lodoisamba, a local air pollution expert, a 2009 survey noted serious concerns about air pollution levels. Pollution is associated with heart disease, and exposure to sulfur dioxide increases the risk of developing lung cancer. Common components of air pollution are known as particulate matter (PM), which is often made up of black carbon, sulfur, and silicon.
PM can be divided into two types. PM less than 2.5 micrometers in diameter (PM 2.5) is known as "fine" particles. Particles larger than 2.5 micrometers, but less than 10 micrometers, are known as "coarse" particles (PM10). To give this real-life context, PM smaller than 2.5 micrometers in diameter are less than one-hundredth of the width of a human hair. The size of air pollution particles is directly linked to their potential for causing serious health problems. PM 2.5 particles pose a more significant danger to human health as they are able to travel deep into the lungs, and further into the bloodstream, thereby evading the body's natural defenses.
As the main ingredient in coal, black carbon is a major contributor to PM 2.5. Black carbon is associated with a range of cardiovascular and respiratory illnesses, including asthma, heart attacks, strokes and a range of cancers. Individuals, organizations, and businesses who are named as sources of air pollution will now be held responsible for providing residents with a safer environment with fewer health risks.
According to articles 9.1.1 and 26.1 of the Law on Air Pollution, and articles 5.2 and 10.9.8 of the Law on State Monitoring and Examination, some efficient projects are being carried out, including delivering notices, demands, advice and information to 2,000 sources of air pollution in order to enforce the laws and regulations on air pollution.
Organizations and entities using stoves that do not meet air quality safety standards will be fined. The committee stated that it is going to implement many levels of work to intensify the monitoring of air polluting entities. Those who fail to meet air pollution safety standards will be charged with fines equivalent to nine times the minimum wage, as stated in the Law on State Monitoring and Examination and the Law on Air Pollution. The fine must be paid, or operations will be terminated until the violation is fixed.
Five medical stations to be established during Ulaanbaatar Marathon
June 5 (UB Post) Ulaanbaatar hosts the International Ulaanbaatar Marathon and "No Car Day" on the first Saturday of June every year. These events aim to develop running sports, promote Ulaanbaatar, and support professional and amateur runners.
This year, the events will be part of the official events for the 375th anniversary of the establishment of Ulaanbaatar. More than 25 thousand foreign and domestic athletes will participate in the marathon.
The Ulaanbaatar Marathon and "No Car Day" will take place on June 7 and no-car zones will be established.
The contest will gather not only Mongolian athletes but also top foreign runners including South Korean Olympic champion Hwang Young-cho, silver medalist of the Asian Games of 2010 Yamamoto Yoshihiro, Japanese runner Ito Koichi, and other athletes.
The Health Department of Ulaanbaatar will establish five medical stations along the route to prepare for all emergencies and to assist participants in need of medical attention.
Each medical point will be equipped with first aid and other medical supplies as well as professional physicians.
The following is the designated locations of all stations.
1. Medical station 1 – in front of Center Point
2. Medical station 2 – next to the State Supreme Court
3. Medical station 3 – east road of Sansar Tunnel
4. Medical station 4 – in front of the Institute of Finance and Economics
5. Medical station 5 – Chinggis Square
In addition, the Health Department of Ulaanbaatar will also provide two ambulance crews.
Health issues commonly arise during a marathon. The most common ailments among include:
-Increased blood pressure
-Muscle sprains and pulls
-Other minor medical problems
Meeting destinations for residents and ambulances to be set in ger areas
June 5 (UB Post) Chiefs of Ger Area Working Divisions of the Office of the Ulaanbaatar City Governor have recently met Director of the Ulaanbaatar City Emergency Medical Center 103 Ts.Purevdash to discuss issues about establishing meeting destinations in ger area streets in order to make it simple for both residents and ambulances to meet up and head to hospitals without delays.
Ambulance doctors of 103 Center usually find it problematic to find homes of patients due to disorganized address systems and streets in ger area which consumes valuable time for patients.
The officials have therefore decided to jointly carry out a study on households living in difficult to reach streets and locations to provide suitable meeting destinations.
Ger area residents will also be able to attend basic medical treatment trainings which are aimed at reducing health issues in remote khoroos in ger area.
Mongolia's Very First Dog Fair "Dog Expo-2014," June 7-8, Misheel Expo
Ulaanbaatar, June 5 (MONTSAME) The "Dog Expo-2014" will take place on June 7-8 in the "Misheel Expo" center.
The very first fair of dogs in Mongolia will be co-organized by the Mongolian Association of Dog Studies and the "Misheel" Group. The event will gather all from dog breeding center, veterinary centers and shops of dog accessories and foods.
The action is needed by many because a number of dog breeders has been increasing here.
Mongolia-UAE economic relations taken to a new stage
June 5 (UB Post) Foreign Affairs Minister of the United Arab Emirates (UAE) Sheikh Abdullah bin Zayed bin Sultan Al Nahyan conducted a two-day official visit to Mongolia on June 3 and 4, upon the invitation of Foreign Affairs Minister of Mongolia L.Bold.
According to the Foreign Affairs Ministry, the Sheikh called on the President and Prime Minister of Mongolia and held bilateral talks with his Mongolian counterparts. During the meetings the sides discussed bilateral and economic relations between Mongolia and the UAE.
Within the frames of his visit, Abdullah bin Zayed bin Sultan Al Nahyan called on President Ts.Elbegdorj and reviewed the relations and cooperation between the two countries in recent years.
Presidents of Mongolia paid official visits to the UAE in 2001 and 2007, and ministers of the two countries have conducted reciprocal working visits, making great contributions to the relations and collaboration between the two countries.
President Elbegdorj and the Sheikh shared views on opportunities for continued cooperation and expanded economic and trade relations. Concluding the meeting, President Ts.Elbegdorj conveyed warm greetings to the President of the UAE, Emir Sheikh Khalifa bin Zayed Al Nahyan.
The Foreign Minister also met his Mongolian counterpart, L.Bold to hold official talks. At the talks the sides agreed on organizing permanent political talks and discussions, developing bilateral economic relations, strengthening relations in education and culture, appointing an inter-parliamentary commission, and studying the possibility of launching a direct flight between Mongolia and the UAE. In addition, they reached a decision to open a UAE embassy in Ulaanbaatar within the next two years.
The UAE is considered one of the most influential countries in terms of its population, territory and economic power. This visit by a high ranking official from the UAE boosted the two country's relations, bringing bilateral economic relations to a new level.
The Government of the UAE and Abu Dhabi Fund for Development granted a soft loan to the Mongolian project to build a Taishir hydroelectric plant. The UAE has expressed that it is willing to cooperate with the financing of large Mongolian projects from the Abu Dhabi Fund for Development.
UAE to consider opening embassy, direct flights with Mongolia within two years
June 5 (infomongolia.com) Upon the invitation of the Minister for Foreign Affairs of Mongolia Luvsanvandan BOLD, Minister for Foreign Affairs of the United Arab Emirates, Sheikh Abdullah bin Zayed bin Sultan Al Nahyan has conducted an official visit to Mongolia on June 03-04, 2014.
On June 03, 2014, two Foreign Ministers held an official talk and during the meeting, parties discussed several vital issues such as to stabilize intergovernmental talks, strengthen economic partnership, and boost relations in educational and cultural spheres. Moreover, the two sides agreed to establish an intergovernmental commission and to consider launching direct flights between Mongolia and Emirates, besides parties negotiated to open the Embassy of the United Arab Emirates in Ulaanbaatar within two years to come.
The Government of the United Arab Emirates and the Abu Dhabi Development Fund had provided a soft loan to construct Taishir hydro plant in Mongolia and during this visit, the Emirates Sheikh expressed his willingness to cooperate and invest in Mongolian major projects by the Abu Dhabi Development Fund.
On June 04, 2014, Foreign Minister, Sheikh Abdullah bin Zayed bin Sultan Al Nahyan paid courtesy calls on the President and Prime Minister of Mongolia, where parties discussed bilateral partnership broadening issues.
During his meeting with Foreign Minister, Premier N.Altankhuyag noted that the permanent mechanism to coordinate trade and economic cooperation between the two countries is important and offered to establish the Intergovernmental Commission by organizing the First Mongolia-United Arab Emirates Intergovernmental Commission Meeting.
At the meeting with Sheikh Abdullah bin Zayed bin Sultan Al Nahyan, President Ts.Elbegdorj mentioned that previous State Heads of Mongolia had conducted an official visits to the United Arab Emirates in 2001 and 2007 respectively. Contrary, some Ministers of the UAE had also visited Mongolia that contributed significantly to develop bilateral relations and President Ts.Elbegdorj conveyed his sincere warm greeting to the UAE President, Khalifa bin Zayed bin Sultan Al Nahyan.
Sheikh Abdullah bin Zayed bin Sultan Al Nahyan, born on April 30, 1972, served as Minister of Information and Culture from 1997 to 2006 and as the United Arab Emirates Minister of Foreign Affairs since February 2006. He is the son of the founder of UAE, the First President, Emir of Abu Dhabi, Zayed bin Sultan Al Nahyan.
Mongolia and the United Arab Emirates have established the diplomatic relations on April 01, 1996.
Second phase of Temasek/Mongolia vocational training project approved
Ulaanbaatar, June 5 (MONTSAME) The Government is to run a "Singapore-2" project to support its policy on strengthening program of quality guarantee system, evaluation and accreditation of vocational training organizations within two years.
With a financial cover of the Ministry of Labor and the Singaporean "Temasek" foundation, the project is to be co-implemented together with the Singapore Polytechnic, related document was inked by the government and by the Polytechnic on Monday.
This is second phase of "Singapore-1" project which was successfully ran by the government, "Temasek" foundation and the Polytechnic in vocational training sector in 2010-2012.
As expected, the program will involve 100 teachers from 50 selected vocational training organizations in Mongolia, the best 30 will earn a right to give training to 300 teachers.
In frames of the project, related handbooks, guidance and regulations will be published as well.
Japan to Provide ¥242 Million Human Resources Development Grant Aid to Mongolia
June 5 (infomongolia.com) The Government of Japan is providing grant aid with a value of 242 million Yen to implement "Human Resources Development Scholarship Program" project in Mongolia, where representing the two Governments, Minister for Foreign Affairs of Mongolia L.Bold and Ambassador Extraordinary and Plenipotentiary of Japan to Mongolia Takenori Shimizu signed the Notandum to exchange between the two countries and the signing ceremony was held at the Foreign Ministry in Ulaanbaatar on June 04, 2014.
The Government of Japan started to implement the Human Resources Development Program since 1999 that aimed to support human resources development in developing countries, where Mongolia was included in this Program in 2001 and as of today 12 projects have been implemented successfully involving 227 Mongolian youths to study in Japanese Institutes and Universities for Master Degree.
Under the objective "To prepare public servants that would contribute to the state policy implementation", the Government of Japan grants scholarships for 18-20 people each year to study in Japan for Master Degree majored in law, economics, public administration, business administration, international relations, and information and communication technology.
Project for Human Resources to Be Implemented with Japanese Aid – Montsame, June 5
UNICEF: Launch of the largest ever household survey in Mongolia
June 5 (UNICEF Mongolia) Today, in Mongolia the National Statistics Office (NSO), UNICEF and UNFPA released the preliminary results of the Social Indicator Sample Survey (SISS/MICS5). The survey, the largest of its kind ever conducted in Mongolia included 15,500 households and combined the Multiple Indicators Cluster survey (MICS), Reproductive Health Survey (RHS) and Demographic and Health Survey (DHS). In addition, the survey marked the introduction of the use of tablets for large-scale data collection, resulting in significant time and resources savings and allowing for the real time quality assurance of the collection and analysis process. The results analyze trends and progress in several areas of child well-being with some encouraging overall trends such as:
- Decline in child morality.
- Improvement in nutrition indicators.
- Increased access to internet and technology.
- Almost universal access to basic education.
While the results will be further disaggregated by dimensions such as geographic location, wealth quintile and region, other indicators related to child protection, substance abuse and knowledge of HIV/AIDS among youth show signs of stagnation and will require focused interventions.
Gilead Offers Mongolia Sovaldi Chronic Hepatitis C Drugs at 99% Discount
June 5 (infomongolia.com) Senior Advisor to the Speaker of the State Great Khural (Parliament) S.Lambaa, former Minister of Health, received a U.S. Gilead Sciences Company representatives headed by Clifford Samuel in Ulaanbaatar on June 04, 2014.
Gilead Sciences is a biopharmaceutical company that discovers, develops and commercializes innovative therapeutics in areas of unmet medical need. The company's mission is to advance the care of patients suffering from life-threatening diseases worldwide. For many years since the company was founded, the company concentrated primarily on antiviral drugs to treat patients infected with HIV, hepatitis B, or influenza.
During the meeting, Mr. Clifford Samuel introduced the company's developed "Sofosbuvir" drug known under brand name "Sovaldi" for the treatment of chronic hepatitis C virus. It inhibits the RNA polymerase that the hepatitis C virus (HCV) uses to replicate its RNA.
Moreover, suggested to supply Mongolia with 100% of discount, which usually costs 90 thousands USD for 6 months treatment and offers the Government of Mongolia for only 900 USD. This proposal is advised by the World Health Organization to distribute the Gilead Sciences Company's product Sovaldi to those countries with high percentage of disease under 100% of discount.
Senior Advisor S.Lambaa appreciated the initiation to introduce "Sofosbuvir" in Mongolia and noted, "At this time, where liver disease is highly registered in the country and the hepatitis C antiviral drugs are needed much in Mongolian health sector, but for civilians a 900 USD drugs would be too costly. Therefore, before discussing pricing issues, we should collaborate closely with the Ministry of Health and in order to introduce into Mongolian market, we should first register the drug and then consider how to deliver to patients, pricing and discounts".
In response, Clifford Samuel said the Company's offer to the Government of Mongolia is 900 USD, but to individuals it possible to suggest for up to 300 USD for six months treatment and expressed his hope to cooperate with the Government of Mongolia.
SOVALDI is a hepatitis C virus (HCV) nucleotide analog NS5B polymerase inhibitor indicated for the treatment of chronic hepatitis C (CHC) infection as a component of a combination antiviral treatment regimen. SOVALDI efficacy has been established in subjects with HCV genotype 1, 2, 3 or 4 infection, including those with hepatocellular carcinoma meeting Milan criteria (awaiting liver transplantation) and those with HCV/HIV-1 co-infection.
Fossil of another 70-million-year-old 'Terror Lizard' goes back to Mongolia
June 4 (The Independent) A fossil of one of the most fearsome predators to have stalked the earth is being returned to Mongolia after it was located in Britain as part of an investigation into dinosaur smuggling, The Independent can reveal.
The intact skeleton of a Tarbosaurus bataar, a close relative of the Tyrannosaurus Rex, was recovered by American officials during an international investigation which this week led to the jailing of a Virginia-based palaeontologist described as a "one-man black market in prehistoric fossils".
Eric Prokopi, 39, was sentenced to three months' imprisonment for smuggling fossils despite subsequently helping to locate 18 dinosaur fossils alleged to have been illegally exported from Mongolia. Prosecutors said that the father-of-two had recovered so many near-complete dinosaurs that the Mongolians are opening a museum in their capital to house them.
Among the exhibits in Ulan Bator's new museum is likely to be the Tarbosaurus skeleton recovered from an undisclosed location in the UK after Prokopi used Britain as a staging post for fossils illegally exported from Mongolia's Gobi Desert between 2010 and 2012.
A source familiar with the case told The Independent: "The Tarbosaurus that was in the UK has been sent back to the US. We're just awaiting some administrative details before it gets returned back to Mongolia."
The return of the 70-million-year-old dinosaur, which would have measured up to 12m long and whose name roughly translates to "Terror Lizard", is part of the conclusion of a criminal case which began amid chaotic scenes at a New York auction house in 2012.
A separate Tarbosaurus skeleton which Prokopi, a "commercial paleontologist" specialising in preparing fossil specimens for sale, had spent months preparing at his then Florida home was sold for $1m (£620,000) despite the efforts of lawyers on the auction room floor representing the Mongolian authorities to halt the bidding. Under Mongolian law, all dinosaur remains are state property and cannot be exported, although the rule has been widely flouted for decades.
In this case though, the high-profile sale of a "Terror Lizard" (a species unique to the Gobi Desert) prompted the Mongolians to obtain an order postponing the sale and US authorities moved in to seize the skeleton and arrest Prokopi, who eventually pleaded guilty last year to three fraud and conspiracy charges.
Documents submitted to the Manhattan court alleged that some of the bones for the seized Tarbosaurus, including its skull with 64 flesh-shredding teeth, were contained in three crates of fossils (weighing 1.3 tonnes) despatched to Prokopi by Chris Moore, a British collector based on Dorset's famous Jurassic Coast.
Mr Moore is not accused of any wrongdoing in connection with the case. But Prokopi admitted he had imported fossils with "vague" labels which disguised the true origin of the dinosaur bones by describing their country of origin as Japan or the UK.
The rewards from the illicit dinosaur trade for Prokopi, who was alleged to have visited the Gobi Desert at least three times in the last decade to look for fossils, were substantial. He expected to make around $300,000 (£179,000) from the sale of the Tarbosaurus and had built up a lucrative business selling items from dinosaur ribs to fossilised sloth claws.
As Prokopi put it: "I sincerely love fossils."
But by misrepresenting the origins of Mongolian and Chinese dinosaurs, including two Saurolophus skeletons and two Oviraptor skeletons, Prokopi was tapping into a worldwide black market in coveted fossil remains which paleontologists complain sees fragile sites frequently raided by unscrupulous collectors.
Speaking at his sentencing on Tuesday, Prokopi said: "What I did was wrong , and I failed to appreciate the gravity of what I have done."
The court heard that the collector had paid a heavy price for his criminality with the break-up of his marriage , the loss of his home and a toxic reputation which now sees him largely spurned by other fossil professionals.
Judge Alvin Hellerstein said that a prison term was necessary to send out a message to others in the world of commercial paleontology, adding: "He is clearly not a bad person, but he has done a bad thing."
Investigators acknowledged, however, that Prokopi had made significant efforts to make amends for his crime by helping to recover the 18 skeletons, including, it is understood, the Tarbosaurus returned from Britain.
Martin Bell, an assistant US Attorney, said information provided by the disgraced dealer had helped three other ongoing investigations into the international fossil trade and admitted the authorities had been blind to a "black market in stolen national treasures that operated in plain sight".
Mongolia's unprotected arts and heritage
June 5 (UB Post) Precious historic records and antiques, inherited by us, surviving years of war, revolution, protests and repression, have been taken from the places where they were kept, and some might have already been smuggled overseas. The return of the Tarbosaurus Bataar, on the edge of being sold at auction in the United States, is one of the clearest examples.
Currently, the recovery of around 1,500 historic and cultural records registered as items of Mongolian historical and cultural heritage is being investigated by the Criminal Police Department of Mongolia.
There are 43 museums in Mongolia with 250 thousand cultural and historic artifacts. It has been estimated that all the artifacts are worth approximately 11.5 billion MNT, however, only around 600 museum workers are protecting these precious items. They have no designated place. Some 30 percent of the artifacts are in rural museums and 80 percent of the artifacts in the capital's museums are stored in archives. These artifacts are not preserved in designated facilities, and due to the lack of sufficient space, these valuables are locked in storage rooms.
The archeological artifacts of some museums stored in an apartment basement, were damaged by water. Who needs Mongolian history? Who is liable for protecting a unique cultural heritage which defines Mongolian history? One who doesn't know their country's history is like a monkey lost in a forest. No one will take care of it but us. This treasury fund is endless if we can protect, preserve it and show it off to others.
A state census of museum archives was conducted in 2012 and 2013, and the summary is going to be disclosed soon. Obviously, it is complicated to conduct a census, but it is even more difficult when there are not enough researchers and archivists. Archivists at the fine arts museum worked extended hours every day last year, busy conducting the census. Stocktaking is being conducted for a second year, which shows that the Mongolian archive is rich.
No one knows if quick-handed thieves have detailed information about these unique archived artifacts. In 2006, all museums were equipped with security systems connected to the police under the direction of the Education, Culture and Science Ministry. In order to keep security operations active, some funds are required annually. But due to insufficient funding, the security systems in museums did not last more than two years. However, last year, the security and protection services in all museums were improved with financing from the Culture, Sports and Tourism Ministry. But thieves had already started special operations before the security companies went in to action, as evident in the recent theft at Erdenezuu Monastery.
The renewed version of the law on cultural heritage calls to increase the quota of museum staff, which is positive news. According to the renewed law, the number of museum storage drawers, archivists and research specialists will be increased and research will be conducted actively. But it is not clear when this change will be put in place or when financing will be issued. If museum workers, preservationists and protectors of valuable historic items get sufficient salaries and support, perhaps they would not be tempted to sell the country's history to someone who promises money.
Meanwhile, authorities have been discussing the building of a new museum for a whole year, Mongolian historical and cultural artifacts are on the verge of being destroyed in poor settings or being taken across our borders.
Theft of historical and cultural heritages under investigation
June 5 (UB Post) For a long time our unrivalled historical, cultural, archeological and paleontological artifacts have been stolen by greedy people and attracted foreign interests. Mongolians are putty in foreigners' hands when they steal historical and cultural pieces. Some Mongolians have joined international organized theft networks. Our policemen have investigated and proven that Mongolians have conspired with smugglers from Japan, the Republic of Korea, England and the U.S., and used international cash flow to smuggle fossils as large as the Tarbosaurus Bataar and other dinosaurs.
Mongolians are the people who are trafficking their own nation's historical and cultural monuments and participating in the crime of depriving our younger generations and their offspring of being able to claim and cherish these treasures.
By the order of Chinese buyers, Mongolians intended to steal artworks by the High Saint Zanabazar. Several more crimes have occured, such as the thefts by former workers of the Erdenezuu Monastery and the National Museum.
A few years ago, several households of Umnudelger soum of Khentii Province were robbed and even now, this case remains unsolved. It is believed that the robbers committed crime again when they were out on bail. By accounts from traders at Urt Tsagaan, devotional relics were stolen.
B.Enkhbat, former curator of the National Museum stole and sold over 1,000 artifacts valued at over one billion MNT. Even though he was sentenced, the losses have not been recovered. In addition to law enforcement investigating the theft all over the country, they have also appealed to Interpol.
A White Goddess stolen from Baruun Choir Monastery of Tsagaandelger soum of Dundgovi Province and a 200 kilogram god stolen from a museum in Govi-Altai Province are also being investigated.
Cooperating with Interpol, the Criminal Police Department of Mongolia is investigating the recovery of over 1,500 artifacts registered as items of Mongolian historical and cultural heritage.
N.Bayarmaa becomes World Belly Dance Forum Champion
June 5 (UB Post) The World Belly Dance Forum was organized in China recently.
Mongolian belly dancer N.Bayarmaa represented Mongolia at the event.
Around 200 belly dancers from various countries competed in the contest and Mongolian belly dancer N.Bayarmaa became champion in the "Adult Fusion Solo" category. She was also selected as one of the top five in the "traditional belly dance" category.
N.Bayarmaa is head of the Mongolian Belly Dance Development Center. Mongolian folk band Altan Urag and zither player Munkh-Erdene participated in the belly dance contest along with N.Bayarmaa, who expressed Mandukhai Setsen Khatan through her dance.
Belly dancers of China, Taiwan and German became champions in other categories.
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