Monday, July 7, 2014

[106 licenses to be re-tendered, GoM to sign power deal with OT, MNT hits new low against USD, and World Bank cuts 2014 forecast to 9.5%]

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Monday, July 7, 2014

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Overseas Market

Cabinet Approves Procedures to Re-Tender 106 Exploration Permits Cancelled by Court

July 7 (Cover Mongolia) Regular cabinet meeting on Saturday, July 6, has approved the special procedures to re-tender the exploration permits involved in a criminal case against former chairman of the Mineral Resource Authority of Mongolia, Mr. D. Batkhuyag, according to the cabinet meeting memo without elaborating on a timetable or details of the procedures. The court ruled these licenses were illegally issued by the former head.

Link to GoM cabinet meeting memo


GUF trading -12.3% to A$0.057 in early trading

Guildford Seeks to Raise A$10 Million via Entitlement Offer, Underwriting Agreement

July 7 -- Guildford Coal Limited (ASX:GUF)  ("Guildford") is pleased to advise that it has entered into an underwriting  agreement with Maiora Asset Management Pte. Ltd (the "Underwriter") to fully underwrite a proposed non-renounceable pro rata entitlement offer to Guildford's shareholders.

Guildford has negotiated with the Underwriter on the basis that no fees will be payable as part of the underwriting agreement. 

The proposed entitlement offer will be on the basis of 1 new share for every 18.248 shares held at $0.06 to raise $2.5 million ("Entitlement Offer"). Those shareholders who participate in the Entitlement Offer will  also  receive  1  free  attaching  option  for  each share subscribed  for  in  the  Entitlement  Offer, exercisable  at  $0.06  within  3  months  of  Entitlement  Offer  grant.  If  all  options  are  exercised  the Entitlement Offer will raise a further $2.5 million.   

In addition to the underwritten amount of $2.5 million, the Underwriter has agreed to subscribe for $2.5 million worth of Guildford shares at the conclusion of the Entitlement Offer period, and will also be issued with 1 free attaching option for each share subscribed for, exercisable at $0.06 within 3 months of the Entitlement Offer grant. If the Underwriter exercises all of its options it will subscribe for shares to the value of a further $2.5 million. Any such placement of shares and options to the Underwriter will be issued within Guildford's 15% placement capacity under ASX Listing Rule 7.1.  

Guildford seeks to raise up to $10 million with the Entitlement Offer and the underwriting agreement.  

Guildford looks forward to providing further announcements to the market as this matter progresses and anticipates lodging a prospectus with ASIC and ASX within the next week. 

Link to release


VKA last traded at A$0.04 Thursday

Viking Mines: Third MOU Signed for Berkh Uul Coal Project in Mongolia

July 7 -- Viking Mines Limited (ASX:VKA, the "Company" or "Viking") today announced that a Mongolian industrial company has signed an initial non-binding Memorandum of Understanding ("MOU") relating to future potential coal supply, with Auminco Mines Limited (Auminco).

Auminco, an unlisted public coal development company is currently the subject of a takeover offer by Viking. To date more than 97% of Auminco's shareholder base has accepted the offer.

The MOU, signed with the Darkhan Metallurgical Plant (DMP) is the third agreement secured for Auminco's Berkh Uul Bituminous Coal Project ("BU Project") in northeastern Mongolia.

DMP is a Mongolian State owned joint stock industrial company located close to Darkhan City in the northern region of Mongolia (Figure 1 ).

Viking Chairman, Jack Gardner said DMP was in the process of expanding its current 100,000 tpa steel milling capacity, based on commencement of mining of iron ore deposits located near Berkh Uul, with the expansion due for completion in 2015.

"This MOU confirms that there is significant local industrial demand for Berk Uhl coal and gives us great confidence that there is potential to further expand our customer base".

The non-binding MOU, signed with Auminco's Mongolian subsidiary BRX LLC states DMP's intent to enter into future purchase agreements for BU Project coal. As with the earlier MOU's from Darkhan Power Station and Erdenet Power Plant, it also establishes testing of a bulk sample as a basis for technical evaluation of the coal.

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 (Figure 1).

Link to release


TRQ closed -0.81% on Friday to C$3.69, no trading in US on Fourth of July Friday.

Government of Mongolia and Oyu Tolgoi LLC to Establish Agreement of Cooperation in Energy Sector in Southern Gobi Region

July 3 ( On July 03, 2014, the Cabinet meeting was held and one of the issues resolved was agreed to establish an Agreement of Cooperation between the Government of Mongolia and Oyu Tolgoi LLC.

The Agreement between the parties is "Cooperation in Energy Sector in Southern Region" and entrusted to sign representing the Government of Mongolia by Minister of Energy M.Sonompil and Chairman of Energy Regulation Committee S.Otgonbayar.

The Government of Mongolia is proposing to develop the "Tavan Tolgoi Power Plant" mega project, a 450 MW coal-fired power plant in the Tavan Tolgoi (TT) area and a related distribution line of approximately 150 km from TT to the Oyu Tolgoi (OT) mine. By constructing this strategically important energy distributor in southern region of Mongolia, of which, OT is considered the main user of this power plant and OT's participation is great, the cooperation between the parties will be regulated under this Agreement.

The TT is located in the Tsogttsetsii sum of Umnugovi Aimag in the South Gobi region of Mongolia, which is approximately 450 km south of Ulaanbaatar.

According to the Investment Agreement established between the Government of Mongolia and Ivanhoe Mines Mongolia Inc LLC and Ivanhoe Mines Ltd (now known as Turquoise Hill Resources) and Rio Tinto International Holdings Limited in 2009, the Clause 7.3 cites the Investor shall, within 4 (four) years of Commencement of Production, secure its total power requirements for the OT Project from one or more of the following sources within Mongolia to be selected by the Investor:

7.3.1. Coal-fired power plant developed or funded by the Investor;

7.3.2. Coal-fired power plant developed or funded by a third party; or

7.3.3. The Mongolian electricity grid;

Tavan Tolgoi Power Plant project

The Government of Mongolia resolved to provide 50 million USD in the form of mezzanine financing to the Project, and the final Government financing will not exceed amount equaling 1/3 of equity amount of the Project.

The purpose of the Project is to meet the power requirements of the Oyu Tolgoi (OT) copper-gold mining project. OT wishes to secure all its power requirements from Mongolia by early 2H 2017, as contemplated by the OT Investment Agreement with the Government of Mongolia. OT is currently importing power from China.

Link to article


S.Ganbaatar: I Believe in Tax Authority Report on Oyu Tolgoi's Unpaid Taxes

July 3 (UB Post) The following interview is with Member of Parliament S.Ganbaatar about the recent dispute with Oyu Tolgoi (OT) regarding taxation.

Issues around OT have emerged again. You may have heard that OT has still not paid the taxation of 130 million USD to the Mongolian government. Do you have any information about this?

This report has been proved and guaranteed, since it was made by the Ministry of Finance and Mongolian legal organizations. In other words, the General Department of Taxation has announced that OT must pay taxes totaling 130 million USD. In this case, Rio Tinto must stop saying that they won't pay the tax and refer to arbitration. Instead, they should complete what is written in the OT contract.

But they have the right to go to arbitration, don't they?

If OT considers the General Department of Taxation's report to be false, they can go to the Taxation Argument Management Commission, under the General Department of Taxation. Any taxation arguments have to be solved through this commission. Going to arbitration and skipping the Taxation Argument Management Commission is not a positive step for OT. I believe in the Mongolian authorities that made that report.

Do you think taxation issues could become a reason for delaying the pre-feasibility studies for underground mining? There is information that investors made this statement.

Mongolians believed that the OT contract would create a lot of jobs, improve our budget and that then unemployment would vanish. That is why we established the contract. Unfortunately, OT has turned into a company that threatens and puts pressure on us. At the time when the contract was being established, I appealed and questioned it a lot, pointing out the specific terms in the contract, but lawmakers barely acknowledged my words. Besides, investments in underground mining will be harmful to us because our stake of 34 percent in these projects will incur a debt of 1.2 billion USD. This amount of money could build 1,700 kindergartens, but 800 kindergartens are enough for all the children in Mongolia.

But if the underground mine isn't financed the project will be over, right?

Honestly, the investment for the underground mine has already been included in the initial investment of 5.1 billion USD.  The OT contract stated that 262 million USD for surface mining and 1.52 billion USD was for underground mining. In other words, the investment in underground mining has already been given through the first pre-feasibility study. I know the OT contract by heart and I guess there are very few members of parliament who have read the OT contract.

The initial investment of 5.1 billion USD has increased since then, right?

We should ask investors why it has increased. For the last few years, the price of mining equipment has increased by five percent, at maximum. The price of some equipment has decreased. If people compare the price of a Toyota Land Cruiser with the first year of the OT contract, they will see that it has barely increased. Consumer goods might have increased, but the price of mining equipment has not increased. Why don't we ask investors about this? OT wants four billion USD now and 30 percent of this is 1.2 billion USD.  Thirty-four percent of 5.1 billion USD of the initial investment was 1.4 billion MNT. Just think about it, we will be paying our debt without earning any benefit in the future.

Did the government send a letter to Rio Tinto about its use of underground mining?

The majority of our members of Parliament are representatives of multinational corporations. In my view, we have to confront people who considered an investment of 5.1 billion USD enough when they made their pre-feasibility studies. Furthermore, they also defrauded the Mongolian people, why don't we use the income from open pit mining for the investment in underground mining if we really need that investment. This is my wish and politicians have to understand it. Sometimes I'm critical of myself because I can't convince politicians.

A "breakfast club" has been established as part of the Cabinet meetings. Have the members of this club concluded their ideas?

I believe that we have one idea.

Do you have any plan to deal with the problem with the help of others? Some politicians were saying that your group is engaged in populism in order to become presidents one after another?

Member of Parliament Ts.Nyamdorj spoke about it. He is a senior politician. I think senior politicians are to blame for the hard situations in this society. He always talks about assigning blame, but I am different from him because I talk about real issues happening in Mongolia. In conclusion, I don't talk about people and I will still be talking about issues.

The public expects policy change in railway transportation. What is the stance of the ten members of the breakfast club?

The members of the breakfast club are very friendly with each other on this issue. We are standing firm over the laws regarding railway and mineral resources. Mongolia needs money at present, but I prefer Mongolian freedom and independence much more.

Could you talk about the Law on Mineral Resources?

I am wondering why they are trying to pass this law during Naadam. I will definitely protest this law. I am respectfully pleading with the initiators of this law to stop it.

It seems that independent candidates are not able to cooperate with each other. You are talking about other issues and the others are talking about the Law on Petroleum.

We do separate work.  Kh.Bolorchuluun cares about the Law on Petroleum, I care about issues of the Central Bank of Mongolia, price increases and exchange rate policy, and Ts.Davaasuren watches over the health insurance and accountancy laws. We have the special status "Member of Parliament". I understand that this status is given to me to protest against the oligarchy. Being a Member of Parliament is not about fame while sitting on a soft seat.

Source: Undesnii Shuudan Newspaper

Link to article


ETG closed +7.69% to C$0.35

Entrée Gold Provides Results of AGM

VANCOUVER, BRITISH COLUMBIA--(Marketwired - July 3, 2014) - Entrée Gold Inc. (TSX:ETG)(NYSE MKT:EGI)(FRANKFURT:EKA) ("Entrée" or the "Company") provides the results of the Company's Annual General Meeting ("AGM") held on June 26, 2014.

A total of 96,663,031 common shares, representing 65.88% of the votes attached to all outstanding shares as at the record date for the meeting, were represented at the AGM. This demonstrates a high level of shareholder participation, and evidences strong support for the re-election of the Board's nominees as directors.

All of the matters submitted to the shareholders for approval as set out in the Company's Notice of Meeting and Information Circular, both dated May 22, 2014, were approved by the requisite majority of votes cast at the AGM.

The details of the voting results for the election of directors are set out below:

Votes For

Withheld Votes






Rt. Hon. Lord Howard of Lympne





James Harris





Gregory Crowe





Lindsay Bottomer





Mark Bailey





Alan Edwards





Gorden Glenn





Shareholders also:

·         approved the re-appointment of Davidson & Company LLP as auditors of the Company for the ensuing year at the remuneration to be fixed by the directors; and

·         approved the renewal of the Company's Stock Option Plan (the "Plan") and all unallocated options issuable pursuant to the Plan, and authorized the Company to grant options under the Plan until June 26, 2017.

Final results for all matters voted on at the AGM will be filed on SEDAR at, on EDGAR at, and on the Company's website.

Link to release


PCY closed +0.5c to C$0.055 Friday

Prophecy Coal Announces Resignation of Director

VANCOUVER, BRITISH COLUMBIA--(Marketwired - July 4, 2014) - Prophecy Coal Corp. ("Prophecy" or the "Company") (TSX:PCY)(OTCQX:PRPCF)(FRANKFURT:1P2) announces the resignation of Mr. Chuluunbaatar Baz as a director of the Company so he may devote his time to other business matters. The Company wishes to thank Mr. Baz for the valuable and lasting contributions he has made to the Company over the years, and appreciates his dedication and service while he was with Prophecy.

Link to release

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Local Market

MSE News for July 3: Top 20 +0.74% to 15,474.79, Turnover 10.9 Million

Ulaanbaatar, July 3 (MONTSAME) At the Stock Exchange trades held Thursday, a total of 5,796 shares of 18 JSCs were traded costing MNT 10 million 928 thousand and 210.00.

"Remikon" /3,702 units/, "Hai Bi Oil" /639 units/, "APU" /310 units/, "Sharyn gol" /273 units/ and "Tavantolgoi" /248 units/ were the most actively traded in terms of trading volume, in terms of trading value--"Sharyn gol" (MNT one million 992 thousand and 900), "UB hotel" (MNT one million and 800 thousand), "UB-BUK" (MNT one million and 600 thousand), "Tavantolgoi" (MNT one million 215 thousand and 200) and "APU" (MNT one million 131 thousand and 300).

The total market capitalization was set at MNT one trillion 573 billion 670 million 698 thousand and 143. The Index of Top-20 JSCs was 15,474.79, increasing by MNT 114.39 or 0.74% against the previous day.

Link to article


MSE News for July 4: Top 20 -0.76% to 15,357.38, Turnover 531.2 Million

Ulaanbaatar, July 4 (MONTSAME) At the Stock Exchange trades held Friday, a total of two million 321 thousand and 428 shares of 13 JSCs were traded costing MNT 531 million 216 thousand and 491.00.

"Silikat" /two million 297 thousand and 412 units/, "Hermes center" /18 thousand and 229 units/, "Remikon" /2,000 units/, "State Department Store" /1,835 units/ and "Tavantolgoi" /1,013 units/ were the most actively traded in terms of trading volume, in terms of trading value--"Silikat" (MNT 516 million 917 thousand and 700), "Tavantolgoi" (MNT four million 963 thousand and 700), "UB-BUK" (MNT three million and 500 thousand), "Hermes center" (MNT three million 011 thousand and 537) and "State Department Store" (MNT one million 073 thousand and 055).

The total market capitalization was set at MNT one trillion 562 billion 453 million 484 thousand and 574. The Index of Top-20 JSCs was 15,357.38, decreasing by MNT 117.41 or 0.76% against the previous day.

Link to article


MSE Weekly Review, June 30-July 4: Top 20 -0.27%, Turnover 586.9 Million

Ulaanbaatar, July 6 /MONTSAME/ Five stock trades were held at Mongolia's Stock Exchange from June 30 to July 4, 2014.

In overall, two million 385 thousand and 867 shares were sold of 41 joint-stock companies totalling MNT 586 million 857 thousand and 031.00.

"Silikat" /two million 297 thousand and 612 units/, "Hermes center" /26 thousand and 334 units/, "Remikon" /26 thousand and 201 units/, "Merex" /12 thousand and 590 units/ and "Genco tour bureau" /5,297 units/ were the most actively traded in terms of trading volume, in terms of trading value--"Silikat" (MNT 516 million 962 thousand and 700), "APU" (MNT 15 million 263 thousand and 350), "UB-BUK" /MNT 10 million 058 thousand and 500/, "Tavantolgoi" /MNT six million 453 thousand and 017/ and "Sharyn gol" (MNT five million 632 thousand and 610).

Link to article

Link to MSE's report


Gobi, Atar-Urguu shares reach all-time highs

July 6 (UB Post) On July 1, shares of cashmere manufacturer Gobi Corp. (GOV), registered with the Mongolian Stock Exchange, grew to an all-time high. One hundred and thirty-four shares of Gobi were sold at the unit price of 8,400 MNT, which was an increase of 7.01 percent from the previous day. As a result, the market value of the company has reached 65.5 billion MNT. For the past year, share prices of Gobi increased by a total of 61.5 percent.

During trading on Monday, share prices of Atar Urguu JSC reached 65,000 MNT, increasing by nearly 6.6 percent, and reached its highest price since it had its IPO on the Mongolian Stock Exchange.

Some analysts relate these share price increases to MNT depreciation. O.Odbayar, an analyst at BDSec JSC, noted that even if share prices stay stable, prices of shares on the Mongolian Stock Exchange in USD will decline as the MNT rate against the USD declines. The MNT depreciated against the USD by about 30 percent in the last year. Gobi's release of financial reports is also believed to have contributed to their share price increase.

Link to article


MIBG: APU Commemorates 90th Anniversary

July 4 (MIBG) The beverage-giant APU Company (MSE:APU) celebrates its 90th anniversary: a monumental milestone. To commemorate the landmark, the Company organized several events to uphold the founders' vision, encourage innovation and showcase the future success of the company. To celebrate Children's Day 1700 children of the Company's employees' were brought to enjoy a circus performance at the national Asa Circus and were sent home with gifts from the APU staff.

Mongolia's oldest company, founded on April 15th, 1924, is also the country's premier beverage producer with a broad and constantly expanding product line that continues to dominate the industry. APU prides itself in its concern for environmental, social and economic welfare maintaining a  sustainable corporate social responsibility initiative in order to enhance Mongolia's future affluence.

The Company originated with a small alcohol distillery in the 1920s and slowly progressed to include the production of beer. Over the years the company has successfully broken into new beverage markets such as the vodka industry in the 1970s and the milk industry in 2006. In 1998 the company was privatized and adopted the name APU reflecting the Mongolian name for "Spirits, Beer and Beverages". However, in 2001 the company sold all state-owned-majority shares making the company fully publicly owned.

A diverse range of products allows APU to lead the market in beverage production. Under its umbrella it regulates 25 subsidiary brands of 4 different drink types varying from milk, soft drinks, vodka and beer. The Company's progressive research and development sector allows for continued innovation in product expansion.

A seasoned board of directors guides the Company to its continued success. Batsaikhan Purev sits as chairman of the board with noteworthy experience in the industry. He founded Shunkhlai LLC, one of the first private companies in Mongolia and one of the most prevalent in the Mongolian petroleum market. Notable investment manager Travis Hamilton was recently brought on to sit on the board of directors of the Company. Travis previously founded Khan Investment Management, which helps investors gain access to Mongolian investment opportunities.

APU heavily invests in its production and development facilities. Within the last decade the Company has remodeled several of its facilities and in 2012 completed its fully automated warehousing center. With a continued strive for innovation and push for development, the Company plans to expand its grasp on the beverage market and hopes, through aggressive expansion, to target foreign markets with their premium vodka brands.

Link to update

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BoM MNT Rates: Friday, July 4 Close





































July MNT vs USD, CNY Chart: (Mogi: wish BoM had better chart options)


Link to rates


BoM FX auction: US$4 million sold at 1,827.6, CNY47 million at 294.32, accepts MNT swap bids for $50.8 million

July  3 (Bank of Mongolia) On the Foreign Exchange Auction held on July 3rd, 2014 the BOM has received bid offer of USD and CNY from local commercial banks. The BOM has sold 4.0 million USD as closing rate of MNT 1827.60 and 47.0 million CNY as closing rate of MNT 294.32.

On June 3rd, 2014, The BOM has received MNT Swap agreement bid offer in equivalent to 50.8 million USD from local commercial banks and accepted the offer.

See also:

·         FX Auction Statistics

Link to release


BoM issues 102.9 billion 1-week bills, total outstanding -5.7% to 658.6 billion

July 4 (Bank of Mongolia) BoM issues 1 week bills worth MNT 102.9 billion at a weighted interest rate of 10.5 percent per annum /For previous auctions click here/

Link to release


Mongolia 2014 Growth Forecast Cut by World Bank to 9.5%

By Michael Kohn

July 3 (Bloomberg) -- Cut from real GDP forecast of 10.3% in November 2013, according to World Bank statement.

* Lower foreign direct investment, high inflation, weakening domestic demand and balance of payments pressure contributed to the lower growth forecast, Taehyun Lee, acting country manager for the World Bank in Mongolia, wrote today.

* Tighter monetary and fiscal policies and strengthened supervision in the banking system needed: statement

* Further economic stimulus relying on quantitative easing and large off-budget spending will likely add pressure on inflation and currency value: Lee

* Possible extension and increase of the bilateral currency swap line with China would be able to provide buffer against balance of payments pressure in near term: statement

* Link to statement:



Mongolia Construction Boom Raises Overheating Concerns: World Bank

By Michael Kohn

July 4 (Bloomberg) -- Mongolia real estate boom created by subsidized credit from central bank raises concerns of possible overheating in housing market, World Bank says yesterday in statement.

* Gov't and central bank provided 3-4tr tugrik to build apartments, roads and other infrastructure over the last year, representing 20 percent of GDP: statement

* Construction sector grew 66.5% in 2013, up from 38.9% growth in the previous year, buoyed by strong economic stimulus measures, World Bank says

* Housing prices rose 33% over the past year and more than doubled since 2011: statement

* Possible excess supply of residential buildings may lead to housing-market adjustment: statement

* Adjustment of housing market would likely have a large spill-over effect on the banking system: statement

* Commercial bank loans to construction sector increased 61.9% last year while mortgage loans increased 129%, due to subsidized policy lending programs: statement


Link to World Bank press release and report download


FATF Removes Kenya, Kyrgyzstan, Mongolia, Nepal and Tanzania from Monitoring Process for Global AML/CFT Compliance

June 27 (Financial Action Task Force) The FATF congratulates Kenya, Kyrgyzstan, Mongolia, Nepal and Tanzania, for the significant progress made in addressing the strategic AML/CFT deficiencies identified in their mutual evaluation reports and the action plans agreed with the FATF. These countries will no longer be subject to the FATF's monitoring process under its on-going global AML/CFT compliance process. These countries will work with their respective FSRBs as they continue to address the full range of AML/CFT deficiencies identified in their Mutual Evaluation Reports.

Link to release

Link to BoM statement, July 3


Mongolian Capitalism: Cultural Battles

By James Watkins, Economics student, Harvard University

July 3 (UB Post) A decade and a half of free market economics has transformed Mongolia. The country has undergone two transformations: an economic transformation from a planned, communist economy to the free market, and a socio-cultural transformation of urbanization from its distinct rural, nomadic culture. But these transitions have not been smooth, nor are either of them complete.

According to S.Dorjsuren, Ph.D., Professor of Economics and Finance at the Mongolian University of Science and Technology, Ulaanbaatar's urban, consumerist culture and its adopted style of Western capitalism, "is not fundamentally natural to Mongolian people. To survive, people have to adjust to this economy."

Having talked to a variety of figures with direct experience of Mongolian business and international economics to make sense of this transition, three fundamental cultural battlegrounds are evident where Mongolia is still trying to adjust to its new capitalist identity.

1) Mongolian individuals vs. the state

Capitalism works well when people define themselves through an ideology of individualism; an ideology which is suppressed in communist societies. A transition to a successful capitalist society, therefore, is not simply about setting up free markets, but a change must also occur in the consciousness of individuals. Mongolia went through the former in the 1990s; progress on the latter is more complicated. In Professor S.Dorjsuren's words, "The market economy was changed in one day—the prices of goods were liberated. But after that, people panicked, they did not understand the meaning of a market economy."

A source working with the Ministry of Finance asserts that Mongolians do indeed "have a very strong individualist streak that predates the socialist days." For Professor S.Dorjsuren, this can be traced to Mongolian nomadic culture. "Nomads decide everything by themselves, so there is no rule in how we should live. We are our own bosses. Unlimited freedom is what nomadic culture is."

There are therefore two very contrasting cultural influences for Mongolians. Individualism and a lack of recognition of authority are pervasive manifestations of nomadic culture, however the country's socialist history has instilled a sense of the opposite: reliance upon the state and a level of consciousness that transcends the individual.

These divergent cultural foundations result in a society whose fundamental beliefs and economic relationships appear confused and incoherent. Sant Maral polling of social attitudes show that Mongolians have little trust in the effectiveness of the government, and that people even mistrust the government's intentions, and yet they demand that the government be ever more involved in their lives. A substantial proportion of those surveyed believed that the state should control key sectors of the economy, and one in three people believed that their future wellbeing should depend more on the state's actions than on their own.

Indeed, the source at the Ministry of Finance identifies "a lack of trust" in the government as one of the unique characteristics of the Mongolian economy, however also mentions that, contradictorily, "people [still] expect the government to play a big role. … [This] is a huge hangover from the socialist days." The relationship between the individual and the state, then, which is so clearly defined in developed capitalist societies, remains confused and complicated in Mongolia.

2) Mongolian society vs. the capitalist climate of business

Another distinct quality of business in Mongolia is the social baggage that is taken into the boardroom. When asked about what makes Mongolian economics unique, H.Amartuvshin, the Managing Director of TenGer Financial Group LLC, a Mongolian who has worked in finance throughout Europe, the U.S., and Asia, immediately mentions, "[business] is more by handshake, or relationship-driven: people trust some people, mistrust others."

The source at the Ministry of Finance also emphasizes, "informal kinds of agreements… Western concepts of the sanctity of contracts are a lot less followed here."

Both the Ministry of Finance source and H.Amartuvshin describea subjective, un-transparent style of management that typifies Mongolian business,withdominant business practices, whereby the whims of individuals (perhaps one individual) dictate decision-making processes, rather than defined rules or established practices.

The Mongolian business culture is "more bureaucratic, more hierarchical, more 'one man, show-man', rather than a team of professional managers… Everything is in the hands of one or two people," says H.Amartuvshin.According to the source at the Ministry of Finance, everything "takes place behind closed doors, … [Mongolian business leaders] are really reluctant to open up." Whereas Western decision-makers would be "all lawyered up, [have] investment bankers that are advising them, networks of experts… [in Mongolia it's] a couple of officials striking a deal across the table."

This is perhaps an example of the clash between the social, informal nature of Mongolian people with the formal, individualistic, objective ethic of Western capitalism. The clash of cultures makes it difficult for foreign companies to do business in Mongolia; H.Amartuvshin suggests that this is one of the fundamental causes of the current economic malaise that has seen foreign capital flee the country.

3) Mongolian economic realities vs. the Western model

When asked if any other country typifies the style of economy that Mongolia is heading towards, Professor S.Dorjsuren answers "America" without hesitation. However, there remain vast differences between the fundamentals of the two economies that, if unaddressed, prevent Mongolia from experiencing the full benefits of American-style capitalism in the immediate future.

The source at the Ministry of Finance argues that for younger generation of Mongolians, which has no memory of the socialist days, "there's an appreciation for what makes Western economies work, although I'm not sure it's always an appreciation of the right things." Like Mongolia, the United States started out with a great resource base, but it was accompanied by "the commitment for individuals to work hard and save. … Here, the consumerist side has emerged," before the savings culture that built the American economy. Spending is a cultural phenomenon within Ulaanbaatar: "when the government was doing the cash handouts from the Human Development Fund, … the money that went to the people in the countryside was all invested," in the city, however, that money was spent.

Low savings also leads to a weak financial sector, and insufficient investment, a diagnosis of the Mongolian economy oft cited by foreign investors. "The stock exchange is basic, … there is no retail buying [of government bonds], there are even no institutional investors like mutual funds or insurance companies that are based on retail clients … so there's a long way to go before that kind of economy is going to be close to what you see in the West."

Professor S.Dorjsuren also notes the importance of low savings and investment rates in Mongolia, which means growth has to rely upon less sustainable practices. However, he identifies this as a symptom of a more underlying problem: "people have very little money to save due to an uneven distribution of income." This comes from a culture of low pay in Mongolian industry. "Why are salaries low? It is because of the legacy of the socialist regime. … Of Mongolian GDP, from 100 MNT of income, 25 MNT goes to the salary of workers and 75 MNT goes to capitalists' profit. Other countries are the reverse of this figure."

Although these exact figures have not been verified, global estimates of the share of labor in income by French economist Thomas Picketty do indeed suggest that only around 25 to 30 percent of Mongolian income goes towards remunerating labor (with the rest going towards remunerating capital in the form of profit), whereas in developed economies, that figure has remained around 70 percent for centuries. The labor share of income in Mongolia is among the lowest in the world, comparable to countries such as Cameroon, Niger, Tanzania, and Yemen, meanwhile countries economically similar to Mongolia and other post-Soviet states all fare much better.

The Mongolian example: Nomadic capitalism?

The new Mongolian capitalist identity being forged in Ulaanbaatar is a work in progress. There are many quirks, many inconsistencies, and many weaknesses that are the result of the difficult transition towards a Western style of capitalism. Will the end product retain a distinctly Mongolian feel? Will the informal, social-based business style and the nomadic philosophy of rejecting authority survive the cultural transformation ongoing in Ulaanbaatar?

Both Professor S.Dorjsuren and H.Amartuvshin suggest that the openness of Mongolian society, and the ability of Mongolians to adapt and to "learn fast" may well allow the culture of the Mongolian economy to assimilate to its Western model. But, as the source at the Ministry of Finance puts it, "I think the jury's out."

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Mongolia to continue negotiations with neighbors on railway transit

Ulaanbaatar, July 4 (MONTSAME) The Prime Minister N.Altankhuyag explained some issues at the "PM's 30 minutes" weekly meeting on Thursday.

A decision was made to run third-line railways in accordance with the state policy on railway approved by parliament in 2010, but nothing was constructed due a gauge issue, so the cabinet decided to accelerate the work and has spent so far some USD 200 million from the "Chingis" bonds revenue for the railway constructions, the Premier said.

"It is possible to run railway transportation through seven spots to two neighbors, but the construction is running normally only at Omnogobi' province's Gashuunsukhait border checkpoint, we have postponed other constructions works in order to resolve the gauge matters," Mr Altankhuyag explained.

"The cabinet will continue negotiations with the neighbors before the autumn session of parliament, and we must solve issues regarding routes of new railways, payment, taxes and transport costs, because the railway transportation is supposed to go not only to China, but also to its seaports," the Premier said.

Then the PM said the spring session of parliament adopted some legal regulations reflected in the programme of 100 days for intensifying the economy. An eight percent mortgage loan process is running normally, he said. The financing has been given from the Development Bank of Mongolia to some 20 projects that satisfied specific criteria of commercial banks in frames of the project on developing import substitution and export-oriented industrialization, he said. 

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Mongolia Government to Establish Investment Fund

July 6 (UB Post) The Parliament of Mongolia passed the Law on Investment in October 2013. Its supporters believe that implementation of the law might positively influence the financial market, investment environment as well as the macroeconomic situation of the country.

The council organized to intensify the economy has finished developing its guidance to establish an state investment fund, which will make proactive development investments. The government anticipates that a decision will be made to finance the establishment of the investment fund through Development Bank in its first phase.

With the formation of the investment fund, capital invested by the government will be used as leverage, and it would be possible to raise money from other investors equivalent to five times the minimum capital required by Development Bank. Capital would be attracted as investment, not a loan, which means there would be no pressure in terms of debt.

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Opposition MPP faction to continue working through Naadam until autumn session

Ulaanbaatar, July 4 (MONTSAME) The MPs from the Mongolian People's Party (MPP) intend to work during the vacation of parliament, said the MPP faction head S.Byambatsogt on Friday.

During the parliament spring session that ran from April 5 to July 1, their faction held 18 meetings, he went on. To nine requests, sent to the parliament Speaker, they received three answers. The faction  also sent 71 official letters (documents) to several public high officers and were acknowledged back  11 times, he explained, noting that "all this is a clear example of how the minority group is treated".

The faction actively attended parliament and Standing Committees' meetings, "actively taking part in discussions and in approval of draft laws and other crucial documents," Byambatsogt said.

At the end of the spring session, parliament backed changes in composition of Standing committees, "which gives us opportunities to be represented by two in each," he went on.

He also promised that their faction members "will prove their political proficiency and reliability" and "will not take vacation until the parliament autumn session".

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Prime Minister responds to letter from MP Kh.Battulga

July 6 (UB Post) A few days ago, Member of Parliament and former Agriculture and Industry Minister Kh.Battulga addressed a letter to Prime Minister N.Altankhuyag, demanding a response to several issues, stating that he will stand against several parliamentary and governmental decisions which he believes will negatively affect the lives of Mongolian people and bring about extremely dangerous consequences that will weaken national security and work against the interests of the Mongolian people.

Yesterday, Prime Minister N.Altankhuyag made a statement regarding the issues addressed in Kh.Battulga's letter. The statement said:

1.    The decision to use the equipment, facilities and software of Chinese companies ZTE and Huawei in the communications sector went into force in 2009. All the projects regarding this issue were completed in compliance with guidance from the National Security Council of Mongolia.

2.    The Government of Mongolia did not breach current railway policy, which was submitted by you, Kh.Battulga, during your four year appointment in 2008 as Minister of Roads and Transportation. The issue to lay down narrow railway track in some ports to directly transport mining product overseas was submitted to the Parliament in compliance with the State Policy on Railway.

3.    The issue to open a branch of Bank of China has not been discussed at the government level.

4.    The renewed draft version of the Land Law, developed in compliance with the Constitution, has been withdrawn, as the organized campaign against it has started to deviate from the draft bill and misinform the public that the draft bill has a clause to allow foreign citizens and entities to own land.
The New Government for Changes of Mongolia did not make any decision to harm the state of national security or independence, and I conscientiously make a promise that we will never make such a decision.

Signed, Prime Minister N.Altankhuyag

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MIBG: Legal Reform Solidifies Mongolia as FDI Destination

July 4 (MIBG) Prime Minister Altankhuyag Norov's 100-day economic-recovery program recently revealed several strong efforts to re-establish Mongolia as a welcoming investment opportunity. The country experienced a staggering 52% decrease in foreign-direct investment in 2013 that can be attributed to the global drop in coal prices, as well as the fallout between Rio Tinto Group and the government. To make amends the government is attempting to salvage their relationships with their current-foreign investors, which will also help attract future investors.

Mongolian parliament revoked a 4-year prohibition on granting new mineral exploration licenses. Amendments also came to the 2006 Minerals Law, which regulates prospecting, exploration and mining of minerals in Mongolia. While the exact details of the final amendments are not public the law is reported to enlarge the area available for mining and exploration in the country from 8% to 20%. Additionally, the amendments include an extension to the current exploration period, allowing exploration licenses 12 years instead of 9.

Along with these positive modifications to the Mongolian Minerals Law the amendments institute the National Geographic Survey and Policy Council (Mogi: Geological), which oversees any forthcoming legal alteration concerning the mining industry.

The passage of these accommodating amendments to the mining laws suggests the possible revocation of the 106 mining licenses canceled in the prior year. With 11 licenses canceled, Kincora Copper hopes for the license-cancellation reversals and in a public statement, affirmed the Mongolian government was finally moving in the right direction.

After years of economic plunging, the Mongolian government has finally pushed its way out, making several positive amendments to the laws of its mining industry. This play will help repair the relationships damaged with current investors and should demonstrate stability, which foreign investors have been eagerly yearning for. As the political climate surrounding the mining industry clears further, Mongolia should see a gradual increase in foreign investment until it is again established as the fast-paced-growing economy it once was. At this time, foreign investors would be encouraged to join or rejoin the Mongolian economy's network of investors considering the potential returns will be as grandiose as they once were, granted the Mongolian government continues pushing the initiative in the most prosperous direction.

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Over 10 thousand cases of political oppression acquitted since 1989

Ulaanbaatar, July 4 (MONTSAME) The action of exculpating the politically repressed has been continuing in several phases since 1989.

The previous parts of the action ran in 1939-1945 and 1956-1962. Until today, 10,162 cases related to 31 thousand 222 people have been acquitted after the Investigation Division at the Central Intelligence Agency (CIA) had investigated them and then confirmed that these cases were unjustly accused.

Thanks to adopting in 1998 a law on exculpating the politically repressed people and giving the compensations, an action launched to determine the repressed and their family members and relatives. A legal environment has been created to redeem reputation of these people and give single-benefit compensation to them, and to abolish the consequences of the political repressions. 

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Consumer Rights Agency says Santis English School overcharged students

July 6 (UB Post) The Agency for Fair Competition and Consumer Rights (AFCCR) found that Santis English School administrators have overcharged their students by 310,000 MNT during a recent inspection.

The school charged 2.6 million MNT as tuition fee from each student at the start of the academic year 2013-2014 and charged extra 310,000 MNT as "additional fee" shortly before their graduation. Those who didn't pay the additional fee weren't given their graduation diplomas according to Chief of Consumer Rights Protection Division at AFCCR Ch.Batbaatar.

"We have received several complaints regarding this school's payment system. As a result of the inspection, 40 graduates of the school who haven't paid the additional fee received their diplomas and prevented 12 million MNT worth of 'additional fee' from being paid to the administrators. Such violation will not be repeated again," said Ch.Batbaatar.

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De Facto: Phantom political parties

By Jargalsaikhan Dambadarjaa

July 6 (UB Post) Phantom political parties are wandering around in Mongolia. Political parties are supposed to be an essential constituent of democracy by participating in elections, taking part in the lawmaking process and mobilizing people to achieve long-term common goals. While being a major vehicle to involvement in politics, political parties provide people with an opportunity to make important choices that concern the future of the nation. However, Mongolia's political parties have not made such opportunities available for people and have failed to address the nation's most worrying issues. This is the reason why people have been losing faith in them. Our political parties are supposed to be the bridge between society and politicians, but they have turned into huge castles with unknown lords concealing themselves behind a thick fog. Therefore, the political parties appear to be phantoms. This calls for the need to refocus public attention on the basic responsibilities and goals of a political party.


Political parties must have their own ideology. In other words, every political party has to have its own policy and a political agenda to implement its ideology. However, people have increasing doubts about whether political parties in Mongolia have their policies, agendas, and implementation aligned, or if they have ideologies and fundamental principles of their own. D.Byambasuren, a former Prime Minister, said, "Although the former Mongolian People's Revolutionary Party (the current Mongolian People's Party) declares it is leftist, it was the Mongolian People's Revolutionary Party that was in power when tax laws were changed and an environment for the unfair distribution of wealth was created. On the other hand, the Democratic Party says that they are liberals, but they laid the foundations of universal social care that they implemented hand in hand with the Mongolian People's Revolutionary Party. It shows that there is no longer any difference between the ideologies of Mongolia's two major political forces. Consequently, people are forced to choose from those who compete to make the fanciest promise to acquire power and authority only. Everyone knows how the Mongolian People's Revolutionary Party deceived people by making false promises in the 2008 elections. However, the promises made by the Democratic Party in the 2012 elections seem to be heading the same way as well."

Ideologies of political parties must incorporate accountability. This allows people to choose not only candidates but also certain ideologies. The political party that attracts the biggest number of voters establishes their government and starts implementing their agenda.


Political parties must have the capability to reflect upon social needs, integrate them into policy, and lead society for its implementation. Despite the huge scale and conflicts with regard to social needs, political parties discuss them from many different angles and transform human needs into policy options. Therefore, political parties are deemed an important part of political processes. Voters have the same expectations, which is why the ruling power goes to whichever political party wins a democratic election.

As soon as it acquired the ruling power, jointly with smaller parties, the Democratic Party set out an objective to serve their own political party and stay in power at all costs, rather than implement their proposed action plan and serve the interests of society. The Government of Mongolia is being controlled not by the Democratic Party as a whole, but by a certain faction inside the party. It can be observed that the Prime Minister does not really have full authority. In our country, where political party funding and campaign finance are undisclosed, the wealthiest political party faction that makes the biggest donation is the most powerful. At the moment, a political party faction that consists of only three or four people has more power than the government.

Who can expect a wise decision from a political party that lets one of its factions seize the most power and a Prime Minister who has become a follower rather than a leader? Replacing a cabinet minister is a decision that should be made by the Prime Minister, not the parliament.


Political parties must serve as a platform where personnel working for the government are found, selected, and prepared. However, government positions today have already become a medium of exchange, which has allowed the wealthy to be appointed to the most senior positions for many years.

Since the constitutional amendment initiated by the Mongolian People's Party to allow members of parliament to hold the office of cabinet minister at the same time, there has not been any chance to hold a cabinet minister accountable for any wrongdoings. Personnel at the middle and high levels of government are recruited not for their skills, but for their political party enthusiasm, involvement in elections, and loyalty to senior officials. Political parties are transforming into kingdoms where the leaders of factions are the kings and younger members are the servants. It has already been a long time since the majority of smaller parties have become fully dependent on a single wealthy individual.

Our political parties have still not been strengthened as a political power while there are weaknesses in terms of workforce policy, discipline, structure, and institutional organization. If the bill initiated by President Elbegdorj on the accountability of government officials that have been elected or appointed is passed, we will be one step closer to improving the quality of personnel working for political parties, as well as for the government.


Political parties are responsible for implementing public governance if they win elections, and to serve as opposition and provide scrutiny of the government if they do not. Our political parties have not been able to fulfill these duties to a satisfactory level and, consequently, have failed to receive faith and trust from the public.

Political parties that have acquired ruling power are working to win the next election and retain their power rather than to serve the national interests. It has recently been discovered that since the Mongolian People's Party obtained ruling power, there have been a total of 108 new secret bank accounts belonging to politicians who sneaked into ministries, and a total of 4.5 billion MNT in unsanctioned transactions. For the last ten years, the authorities have been misinterpreting the true qualities of democracy and free market economy and have established more state-owned companies while wasting time by deliberately avoiding privatizing them. According to calculations at the end of 2013, a total of 102 state-owned companies owed 1.6 billion MNT, which is approximately one billion USD, to the state.

Political parties that do not win ruling power do not have the required culture and experience to serve as opposition. Those political parties have still not investigated why they lost in the elections, fixed their errors, and replaced their management. The opposition today cannot even express their stance strongly, let alone work their way up to the next election and be different from the ruling political party through proper analysis and assessment. For example, there is an absence of reformative measures, such as a political party disclosing their sources of funding and calling on other parties to do the same. The senior leaders of the Mongolian People's Party have suddenly realized their role as the opposition and are trying their best to learn what their new objective is. However, most of their members are the root causes of the problem, which is why they are still not acknowledged by our society.

The reason why our political parties today are not developing in terms of governance and institutional structure can be traced back to the constitutional amendment that allowed "wearing double deel" (holding two offices; parliament member and cabinet member, at the same time). The introduction of the deputy ministerial position, which did not exist before, was also a political decision.

A democratic system can only produce benefits when there is true accountability and scrutiny of a government and its actions.

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Silk Road Ventures Closes $5,000,000 Private Placement To Invest In Frontier Markets

Vancouver, BC / ACCESSWIRE / July 4, 2014 / Silk Road Ventures Ltd. (the "Company") is pleased to announce the closing of a private placement of 50,000,000 shares at a price of $.10 per share for proceeds of $5,000,000 (the "Placement"). All common shares issued in the Placement will have a hold period in Canada of four months and a day from the closing.

The Company intends to use the proceeds of this private placement to invest in high growth frontier markets internationally, including Mongolia, Myanmar and Mozambique.

Frontier countries across Asia, Africa and Americas have experienced strong economic growth rates in the last decade on the back of commodities boom, government reforms and foreign capital inflows. Starting from a low base, these countries are expected to maintain high growth momentum in the next decade.

The Company intends to capitalize on a wide range of investment opportunities in selected frontier markets by backing ventures and making acquisitions in high growth industries such as financial services, telecom, media, and property sectors. The Company plans to build strong management teams, seek joint ventures with successful local entrepreneurs and add value through access to capital and bringing international operational expertise to businesses in frontier markets.

The Company is preparing an application for listing on the Canadian Securities Exchange. The Company's board remains as elected in the last AGM.

Mr. Alisher Ali, Director, CEO and Chairman of the Board. Mr. Ali was appointed as Chairman and Director December 27, 2012, and as CEO April 23, 2013. Mr. Ali is Founder of Silk Road Finance, an investment group focused on early frontier markets. Through Silk Road Finance, Alisher founded Eurasia Capital, Mongolia-focused investment bank and Mandalay Capital, Myanmar-dedicated corporate finance advisory firm. The Company intends to capitalize on Mr Ali's extensive investment management, investment banking and advisory experience in emerging and frontier markets including Russia, Kazakhstan, Azerbaijan, Mongolia, Myanmar and Mozambique. Alisher received his Master of International Affairs from Columbia University and an MBA from Oxford University.

Ms. Sylvia McKaige, Director, is an independent Director. Ms Mckaige's appointment was announced April 23, 2013 and is the founder and director of Salween Group, a media communications and marketing company that specializes in helping global brand execute campaigns and content partnerships with local language media in emerging and frontier markets. Ms. McKaige's broad experience over 15 years with CNBC Asia makes her extremely well informed and connected in the targeted frontier markets as well as a discerning independent Director. Sylvia holds an MBA from UCLA Anderson School of Management and National University of Singapore, and a Bachelor of Arts degree from the National University of Singapore.

Donald Gordon, Director, President, CFO has been a Director since May 2012 and is a corporate finance expert with 30 years experience in various capacities related to venture capital, investing, and going public. Mr. Gordon holds BA and MBA degrees from UBC and holds a CFA charter.

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DMP launches 4Mtpa iron ore concentrator at Tumurtei

July 3 (UB Post) The opening ceremony of the iron ore concentrator of Tumurtei mine was held on July 1. The concentrator has the capacity to process three to four million tons of iron ore a year and is a project of the Darkhan Metallurgical Plant, a state owned joint stock company, for establishing an iron and steel industrial complex. Its construction started in 2010. The total cost of the project is estimated to be around 700 million USD and QSC LLC was selected as the investor. So far, QSC LLC has spent around 100 million USD. The project is scheduled to be completed in five years.

Until recently, aside from Altain Khuder LLC, Mongolia didn't have a high capacity company to process such large amounts of iron ore (Mogi: what about BTEG's concentrator?). In the future, the Darkhan Metallurgic Plant is planning to produce steel. Equipment for the concentrator was manufactured by a U.S. company named TRIO, and it will be used to produce iron ore concentrates of more than 55 percent.

From the 400 million tons of iron ore reserves in Selenge and Darkhan provinces, Tumurtei iron ore mine has 229.3 million tons of reserve. This mine consists of three major sections: eastern and western mines of the eastern section, and its western section. The Mongolian Minerals Council officially approved 18 million tons of iron ore reserve for the western mine in the eastern section, which started operations first, 120 million tons for the eastern mine of the east section, and 90 million tons for the remaining mine in the western section. Mining engineers and a work force for the second stage of exploration have been selected.

According to the plan, two million tons of iron ore from the western mine and three million tons from the eastern mine is to be explored each year. The respective mines can be used for 50 to 60 years. The state owned joint stock company Darkhan Metallurgical Plant took Tumurtei iron ore mine under its ownership in 2008 and started exploration in 2011.

Vice President of Darkhan Metallurgical Plant O.Bolor-Erdene gave clarifications about some issues the project.

The price of iron concentrates fell considerably with the passing years. On top of that, the Mongolian economy and financial environment isn't doing well. Despite these difficulties, the first stage of the project was implemented successfully. To open the plant, what sorts of difficulties did you face?

Presently, the lowest price for one ton of iron is 80 to 90 USD. During economic crisis, major national companies such as Oyu Tolgoi and Tavan Tolgoi are transferring to a system of laying off employees and reducing salaries. Tumurtei mine, on the other hand, is recruiting staff from within the country, instead of firing them. On July 1, employee salaries were raised by 25 percent.

Investments were delayed and halted but we overcame this difficulty successfully and completed our construction work on time. For instance, we commissioned a substation in Eruu soum and began construction work for a 50 km air strip, a 16 megawatt substation, and a 34.5 km- long railway track from Tumurtei mine to Khangait Railway Station.

I'm happy to have established an iron ore concentrator adjacent to Tumurtei mine and completed processing the first iron ore concentrate.

When will iron ore concentrates of the first stage be exported?

The transportation schedule is uncertain. We're trying our best to export concentrates as quickly as possible. Next year, we'll commission the 34.5 km railway track from Tumurtei mine to Khandgait Railway Station of the Boldtumur Eruu Gol LLC. This way, we'll be able to transport concentrates directly from the mine. Until then, we'll use vehicles to transport concentrates for the 20 km distance.

How much is Tumurtei mine focusing on improving livelihoods and providing workplaces for local residents?

Tumurtei mine understands its social responsibilities very well. The mine has over 270 workers. There are three local residents for every ten miners. We're working to increase this number further. Furthermore, we're sponsoring 25 local students, who will work for the concentrator plant in the future, to study at Darkhan Vocational Education Training Center (VETC). These students will be provided with a workplace at the iron ore concentrator when they graduate. We've constantly been investing in local infrastructure work and cultural activities. While doing exploration, we've focused on restoration and forestation works. In other words, when resources finish, this land will not be covered with holes and red earth, but with trees and forests.

This work is said to have been completed with state funding under state construction regulations. Can you comment on this?

This project of Darkhan Metallurgical Plant for metallurgical mining costs around 700 million USD. This is a big project, which includes producing steel products from iron ores and establishing wet and dry magnetic concentrator plants. It already received an investment of around 100 billion MNT. If the eastern mine is commissioned in Autumn, it'll get an additional investment of some 50 billion MNT. Most importantly, we're at an advantage since the national QSC is investing. Also, we own the concentrator plant through a concession agreement which is also beneficial. For the first stage of the project, we commissioned a substation in Eruu soum and began construction for a 50 km air strip from the substation to Tumurtei mine which has a capacity of 110 KW, a 16 megawatt substation, and a 34.5 km railway track from Tumurtei mine to Khangait Railway Station. We've also built a dry magnetic concentrator plant. Soon, the wet concentrator plant will be commissioned and we'll use its iron ore concentrations for the steel mill. We're planning to produce steel domestically by 2017.

Source: Daily News

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KfW, ADB Sign $2 Billion Cofinancing Partnership for Asia Pacific Development, Particularly Bangladesh, India, Indonesia, Mongolia, and Viet Nam

BERLIN, GERMANY, 2 July 2014 (ADB) — German development bank KfW will cofinance up to $2 billion over three years with Asian Development Bank (ADB) to promote development in the Asia and Pacific region, particularly in Bangladesh, India, Indonesia, Mongolia, and Viet Nam. The KfW cofinancing will focus on energy, urban infrastructure, climate change, small and medium enterprise financing, vocational training, and regional integration.

ADB President Takehiko Nakao signed a memorandum of understanding (MOU) for cofinancing today in KfW's Berlin office with Member of the Executive Board of KfW Group Norbert Kloppenburg. Parliamentary State Secretary and ADB Governor Hans Joachim Fuchtel and Member of the Management Committee of KfW Development Bank Roland Siller were also present.

"The midterm review of ADB's strategic framework emphasized the importance of scaling up and expanding cofinancing to leverage additional resources for development," Mr. Nakao said at the signing ceremony in Berlin. "This partnership will enable ADB to help its developing member countries strengthen key sectors that will contribute to their overall development."

Under the terms of the MOU, the two parties agreed to intensify cofinancing and exchange of information for broader cooperation and improved aid effectiveness in making available resources for common development objectives.

Germany is already the fourth largest bilateral cofinancier of ADB projects after Japan, France, and Republic of Korea. As of the end of 2013, it had financed more than $700 million for 11 ADB-assisted investment projects in Bangladesh, India, Mongolia, Pakistan, and Viet Nam.

KfW carries out financial cooperation as one of its most important instruments for development cooperation. It works to reduce poverty, ensure that globalization affords opportunities for everyone, protect the climate, conserve natural resources, and safeguard peace.

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Siemens Korea hosting nuclear medicine symposium in Mongolia

Ulaanbaatar, July 4 (MONTSAME) A "Mongolia-S.Korea Nuclear Medicine" symposium will be held this Saturday in Tuushin hotel themed "Today and Future of Nuclear Medicine in Mongolia".

Organizers are Siemens Korea, Jiguur Grand Group, Asia Oceania Federation of Nuclear Medicine and Biology (AONMB), and Mongolian Society for Interventional Radiology.

The symposium will be attended by AONMB president Bom Hee Seung, Siemens Korea president Park Hyeongu, along with representatives of Mongolian authorities such as Health Ministry, Health Development Center, Nuclear Medicine Society, and National Oncology Center. 

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Poland to assist Mongolia in strengthening agricultural capacity

Ulaanbaatar, July 4 (MONTSAME) Mongolia and Poland might cooperate in strengthening national human resources of Mongolia and exchange experiences in order to broaden Mongolia's export of agricultural products and to implement the WTO agreement on hygiene and quarantine.

Undersecretary of State of Poland's Ministry of Agriculture and Rural Development Mr Tadeusz Nalewajk has accepted proposals of Mongolia on these matters and promised to realize them. Then Mr Nalewaik and the Vice Minister of Industry and Agriculture of Mongolia B.Tsogtgerel have also concurred to render a support to Mongolia for diary productions and vegetable planting.

Mongolia, which keeps its pasture animal husbandry traditions, intends to make its brand food products and to export them to European countries, China and Northeast Asian countries, "and in reaching these goals, we want to take technical and technological support from Poland," Tsogtgerel said. 

In response, Mr Nalewajk said Poland's government is attaching a great importance to the agricultural cooperation with Mongolia and plans to involve Mongolian food and agricultural areas in a soft loan of EUR 50 million.

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Malaysian Businessmen Should Tap Mongolian Market, Says Matrade

KUALA LUMPUR, July 4 (Bernama) -- The Malaysia External Trade Development Corporation (Matrade) is encouraging Malaysian companies to tap Mongolia's emerging highly affluence middle class.

Deputy Chief Executive Officer Datuk Dzulkifli Mahmud said Mongolian middle and high-end customers were embracing high-quality products and services due to their stronger purchasing power.

"The presence of many branded retail outlets in Ulaanbaatar reflects the new trend of consumption. It offers huge business and investment opportunities for Malaysian companies," he said in a statement.

For the first five months of 2014, Malaysia's trade with Mongolia increased 68.8 per cent to RM59.8 million with exports increasing 70.9 per cent to RM59.6 million compared with the same period last year.

Last year, Malaysia's trade with Mongolia grew 42.3 per cent to RM130.22 million with exports rising 46.2 per cent to RM128.27 million, driven by petroleum products, electronics and electrical products, palm oil, processed food and wood products.

Other potential sectors to tap in Mongolia includes infrastructure development, tourism, hotels and hospitality, healthcare, prepared food, energy as well as mining.

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Inner Mongolia eases rules on coal firms

July 4 (China Daily) China's top coal-producing region Inner Mongolia said on Thursday that coal miners no longer need local government approval for corporate transfers or for merger and acquisition deals.

The policy, which took effect on Tuesday, will allow local coal miners to follow the rules of a free market, according to authorities from the region.

Coal miners are being encouraged to restructure their businesses and get involved in upstream and downstream industries including electric power, chemicals and building materials.

Resource-rich Inner Mongolia had to relax many policies since last year to boost its coal mining sector. Major producers of the fuel in the region, which is far from being China's most dynamic, have been hit hardest by high transportation costs.

The low calorific content of the region's coal has also made it less competitive.

As of April 30, one-third of the mines in the region, most of which were small, had shut down or suspended production, according to the Inner Mongolia Coal Mine Safety Bureau.

The province's coal output slid nearly 10 percent year-on-year to 302.74 million metric tons during the first four months, official data show.

Stimulus measures that range from cutting administrative fees and transport charges for local miners to increasing financial support for those companies and lowering borrowing costs were launched to help revive the sector.

Media reports said levies for coal were reduced by 4 yuan (65 cents) to 20 yuan a ton last year. Environmental fees were also suspended and some rail charges eliminated.

The eased rules are expected to strengthen the competitiveness of companies with major mines in the area such as Inner Mongolia Yitai Coal Group Co Ltd, Shandong Energy Group Co and Shenhua Group Corp Ltd, experts said.

But they added that sluggish demand from power plants, rising stockpiles and fierce competition from cheaper imported coal have pushed coal prices to drop further this year.

In June, the price of high-calorie coal dropped 17 percent year-on-year to 220 yuan per ton, and coking coal fell to 325 yuan per ton, a drop of 18.8 percent year-on-year, according to the bureau.

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New OBG report highlights Mongolia's untapped potential

July 6 (UB Post) Oxford Business Group (OBG)'s new report, which marked OBG's third analysis of Mongolia's economy, was launched at Best Western Premier Tuushin Hotel, Ulaanbaatar, on July 1st.

The Report: Mongolia 2014 charts the country's new infrastructural development, which, together with new legislation governing foreign direct investment and a regulatory overhaul, is expected to be instrumental in building investor confidence. There is also extensive coverage of Mongolia's bid to encourage growth in lesser-developed areas of the economy, such as manufacturing, tourism and agriculture.

The report features contributions from President Ts. Elbegdorj and Prime Minister N. Altankhuyag, together with a detailed, sector-by-sector guide for investors. It also contains a wide range of interviews with leading political, economic and business representatives, including Japan's Minister of Foreign Affairs Fumio Kishida, President of the European Commission José Manuel Barroso, and Canadian Governor General David Johnston.

Andrew Jeffreys, CEO of OBG, said that Mongolia's efforts to diversify its economy were evident, while new, clearer rules for investing would bring benefits.

"In many ways, 2013 was a challenging year for Mongolia, although the country still managed to achieve double-digit growth, despite the difficult economic climate," he said. "The legislative changes under way bode well for the country, especially if it can combine these reforms with political, macroeconomic and regulatory stability."

OBG's Country Director, Anne Delarue, said she was confident that The Report: Mongolia 2014 would serve as a useful tool for investors eyeing the country's potential.

"Our publication highlights not only the wealth of untapped business opportunities which are ripe for development, but also the government's commitment, through legislative change, to encouraging new investment," she said. "It's a pleasure to share our findings with the global business community and relay, in our new publication, Mongolia's efforts to overcome the hurdles it faces and the country's achievements."

The Report: Mongolia 2014 marks the culmination of more than six months of field research by a team of analysts from OBG. The publication assesses trends and developments across the economy, including macroeconomics, infrastructure, banking and other sectoral developments.

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PwC donates oxygen apparatuses to National Children's Hospital

July 6 (UB Post) One of the biggest international audit organizations in Mongolia, PwC donated three pieces of oxygen apparatus to the United Infants Section of the National Center for Maternal and Child Health of Mongolia (NCMCH), which assists infants who are born prematurely.

"Our office in Ulaanbaatar has more than 80 employees. We teamed up with well-educated young Mongolians. Child health is a very important and worrisome issue. Realizing our social responsibility, we are presenting these pieces of oxygen equipment to the NCMCH," said Administrate Partner of PwC Matthew Potel.

Each apparatus costs 1,650,000 MNT. The United Infants Section includes three main departments: pathology, intensive treatment, and infant research.

"Nowadays, the younger generation does many activities to benefit society. This apparatus is very useful. We have some, but not in every room," said NCMCH's Vice-Director of Treatment, Ts.Altantuya.

Around 10,000 babies are born every year at the NCMCH. The center assists 14,000 babies nationwide.
PwC is an international organization which gives auditing services and tax advice.

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Mongolia's shantytowns set for redevelopment

Mongolia's overcrowded ger district lacks most basic amenities, but now that could change under a new government plan.

Ulaanbaatar, Mongolia, July 4 (Al Jazeera) - Mongolia's capital, Ulaanbaatar, is home to around 30 percent of the country's population - and nearly 800,000 of those live in a sprawling residential area known as the ger district with no running water, no central heating, sporadic garbage collection, and no sewage system. 

Now, all that may change as the Mongolian government approved a development programme in the district. 

In May, parliament gave the green light to a $160,000 loan agreement to upgrade its infrastructure. The Ulaanbaatar Urban Services and Ger Area Development Investment programme is also designed to support socioeconomic development by creating local business hubs.

Few improvements have been delivered so far, but the government appears focused on developments in this rapidly expanding district. In February 2013, parliament approved the Urban Development Master Plan 2020 which, according to Arnaud Heckmann, urban development specialist for Mongolia at the Asian Development Bank, "marks a significant shift in policy". 

Sub-centre development has already begun - clusters of private shops and businesses, communal houses, schools and some paved roads have been built.

But providing the growing number of residents with basic services remains a challenge for the Mongolian government.

Ulaanbaatar's population nearly doubled between 2000 and 2012 to 1.3 million, growing at an annual average rate of six percent. Around 60 percent of the capital's population now lives in the ger district."Despite the inflow of people, the city core was expanded only marginally to accommodate the new migrants," said Heckmann.

'Temporary dwelling'?

Many of the migrants come from rural areas after losing their agricultural livelihoods to harsh winters. During the winter of 2009-10, a zud, as Mongolians call the bitter cold in which temperatures can drop below minus 40 degrees Celsius, froze eight million animals - cows, goats, sheep, horses, and camels - to death. 

Severe winters combined with the growth of the market economy in the early 1990s led to thousands of families migrating to the capital in the hope of finding jobs.

Shari Tvrdik works for the NGO Flourishing Future, which aims to bring ger communities together by hosting dances, talks, and cooking classes, and setting up communal spaces such as libraries and internet cafes. "What used to be a wide and open field behind our home is now covered with at least 50 new properties," he said of his new neighbours who moved in from the countryside.

"They falsely believe that there is a better life here," he added. "They come to the capital thinking that the ger district will be a temporary dwelling while they find a good job. As a ger district dweller myself I have seen zero effort to change the lives of those living in the ger district." 

Tvrdik said that the NGOs in the district are the ones pushing for improvements. "If the NGOs were forced to pull out, the hole left behind would be enormous."

According to the World Bank, unemployment among ger residents hovers around 62 percent compared to 21 percent in traditionally residential areas. Gers typically have inadequate educational and medical facilities - further compounding the area's high unemployment. "Some residents earn a decent income but are still unable to afford the higher prices of new apartments elsewhere in the city," said Heckmann.

Meanwhile, Mongolia's economy grew by 11.7 percent in 2013 - becoming one of the world's most rapidly expanding economies, according to the Asian Development Bank. The main drivers for this growth have been the mining industry and a wealth in natural resources such as copper, gold, and coal.

Selenge Enkhbayar, a local resident, said: "Children inside the district have many dreams, but their life situation limits them." She said many children stay at home to help their family instead of going to school. Schools run three to four shifts a day to handle the growing number of students, which cuts down the length of school days.

Unsustainable growth

Walk through the district and you can see residents pushing carts loaded with water canisters. In contrast to apartments in the city, homes here do not have running water, forcing people to purchase water at local kiosks several times a day. According to the World Bank, there are more than 550 water kiosks. Apartment residents use roughly 270 litres of water per person per day, whereas ger area residents use around 10 litres or less a day.

Most residents use pit latrines that often freeze during winter. Lacking a central heating system, dwellers burn raw coal, rubber, and wood in coal stoves to heat their homes. As a result, Ulaanbaatar is one of the world's most air-polluted cities, according to the World Health Organisation. In response, initiatives by the Mongolian government and the World Bank include replacing traditional stoves with new models that emit 70-90 percent less polluted materials.

Pier Francesco Donati of the Action Contre la Faim (ACF) in Ulaanbaatar - an NGO that focuses on hygiene, water and sanitation - said: "It is undeniable that this kind of urban development is not sustainable in the long term."

But he added that some changes are slowly taking place. "It is noticeable that the municipality has made a certain effort on road construction," he said. "The ger area is now more accessible than it was two years ago."

Some residents choose to live in this district instead of city apartments for cultural reasons. Since the days of Genghis Khan, nomadic Mongolian herders have been living in gers. Even for those who now live in the capital, this remains a link to their past. "Most families tend to live together in one ger area plot and moving into an apartment would mean that there would not be sufficient space to live together," said Tirza Theunissen, Mongolia deputy country representative at the Asia Foundation.

Improvements in urban services are slow in the face of still high rates of migration from the countryside. "Every day new families settle in the fringes of the ger districts, which consequently keep expanding," said Theunissen. Given the lack of employment opportunities in other parts of the country, thousands of people continue to come to Ulaanbaatar in the hope of a better life.

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Mitsubishi Motors donates two electric cars to Ulaanbaatar administration

July 6 (UB Post) On Wednesday, Japan's Mitsubishi Motors Corporation donated two electric cars to Ulaanbaatar administrations with hopes to further cooperate in importing cars to Mongolia.

Senior trainer of Mitsubishi Motors Tsutomu Hagiwara introduced the electric car during the donation ceremony and highlighted, "This electric car is proven to be both ecologically and financially beneficial.

After the deadly tsunami in 2011, Japan has largely used electric cars for rescue operations in the affected areas."

The car runs on fully electric motor and is capable of traveling 150 kilometers on full charge.

The electric cars do not emit toxic gasses, increase air pollution, affect the environment, make loud noises and their batteries can be charged in two options: fast and usual.

The Office of the Ulaanbaatar City Governor and the Ulaanbaatar City Authority for Environment and Green Development will use the electric cars on trial.

If proven beneficial to the city, Ulaanbaatar administrations are planning to sign a contract for electric car import with Mitsubishi Motors.

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Night patrol tracks down Tuul River polluters

July 3 (UB Post) The Tuul River basin is a specially protected area, where strict rules are enforced. However, a massive amount of industrial waste has been dumped into the Tuul River since spring.

The Tuul River Basin Administration (TRBA) therefore started running night patrols around the river on June 10, which will be patrolling the area until August 10 to track down polluters, curb further waste dumping and enforce specially protected area rules.

So far, over 20 businesses and individuals have been caught dumping waste in the river.

Though the night patrolling is expected to end by August 10, TRBA officials announced that they might extend the patrolling until early-September.

Another source of water pollution is car washing taking place in the river. The TRBA has been fining residents who are caught washing their cars in the Tuul River with 72,000 MNT since last year, and suspending their driver's licenses if necessary.

The headwater of the Tuul River is in Erdene soum of Tuv Province. The river runs through 37 soums of five provinces, and goes through 49,700 square meters of land across seven districts in Ulaanbaatar.
All the prohibitions and rules are effective by law in specially protected areas. The Minister of Environment and Green Development and Minister of Health also approved Rules in Specially Protected Areas, which must be adhered to by all entities.

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Tokyo Discusses Waste Management for Ulaanbaatar

July 4 (Mongolian Economy) The Tokyo metropolitan government visited Ulaanbaatar to tour the city for four days to examine the city's growing waste crisis. This event was hosted in partnership between the city of Ulaanbaatar and Bayanzurkh district. The city of Tokyo promised to help Mongolia develop successful waste management, as it is become more pressing day by day. Tokyo representatives were shown the city by Puredavaa, the Governor of Bayanzurkh district. They were exposed to landfill areas and ger districts in order to effectively discuss waste management issues. 

The trip ended with a two day conference during which representatives conversed combatants of effective waste management. This conference was also attended by private sector members who wished to learn more about this serious issue. Waste management is becoming a bigger concern as major pressure points are increasing rapidly – illegal dumping and lack of funding. This tour hopes to create a set of alternative waste procedures such as the integration of waste reuse and recycling programs in the city. 

Tokyo representatives thanked Ulaanbaatar for their hospitality and hope to initiate more future partnerships between the two cities. With their help, the city of Ulaanbaatar can make progressive changes to combat their waste problem.

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Ulaanbaatar will cooperate with Tokyo in waste management Montsame, July 4


Sky Resort-Zaisan paved road temporarily opened for Naadam

July 6 (UB Post) To reduce heavy traffic flow north of Bogd Mountain during Naadam Festival, especially around the Central Stadium, the ten km road from Sky Resort to Zaisan Hill has opened. Officials said that only base pavings have been completed at the road and that final layer will be completed after Naadam.

The road is part of the 17.6 kilometer road from Bayanzurkh auto checkpoint to Yarmag Bridge which has been under construction since last year and is scheduled to open on August 1.

Yarmag Bridge will be paved and launched by August 1 as planned, said officials.

When completed, the road is expected to reduce traffic load of central roads leading to Yarmag and Chinggis Khaan International Airport as drivers will be able to directly head to these destinations through the new road without having to pass central roads.

Three groups of road constructors of ESTO LLC are currently paving the road in two shifts.

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Rainwater drainage trucks will now be clearly identified to avoid confusion

July 6 (UB Post) Due to the lack of a sufficient city drainage system, rainwater swamps the streets after heavy rains and causes a public nuisance. The Ulaanbaatar Incorporated Public Service Authority removes the rainwater with the help of three specialized vacuum trucks with water carrying capacity ranging from 1 to 10 tons.

The public was recently concerned about reports on social media networks that the city authority poured collected wastewater into the Tuul River. In reality, the water was not household drainage and was the collected rainwater.

Ulaanbaatar has a separate system for purifying water. Existing road drainage systems and channels are connected to the river. In the future, the specialized trucks used to remove rainwater will have signs that say "Rain Water" on them, reported the Ulaanbaatar Incorporated Public Service Authority.

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Japan lifts sanctions against DPRK as progress made in abduction issue

TOKYO, July 4 (Xinhua) The Japanese Cabinet on Friday gave a green light to ease some of Japan's unilateral sanctions imposed on the Democratic People's Republic of Korea (DPRK), as progress has been made between the two sides over the deadlocked abduction issue.

The final decision followed Prime Minister Shinzo Abe's comments on Thursday that Japan will lift some sanctions related to the Japan-DPRK abduction issue as Japan said that it has confirmed a powerful-enough special team has been launched to reinvestigate the abduction which happened in the 1970s and 1980s.

The two countries on Tuesday held a meeting in Beijing over the issue that had prevented the two countries from forging diplomatic ties. Local reports said the DPRK detailed the team to the Japanese side during the meeting.

The DPRK announced Friday after Japan's decision that an "all- inclusive and comprehensive investigation" will start from the day with the new organization, the "Special Investigation Committee," which is given a "special mandate" from the National Defense Commission headed by the DPRK leader Kim Jong Un, according to local press.

The committee was chaired by So Tae Ha, a counselor in the National Defense Commission responsible for security, who doubles as vice minister of state security.

The committee, which groups about 30 officials, also includes Kim Myong Chol, counselor of the Ministry of State Security, and Pak Yong Sik, department director of the Ministry of People's Security. Both of them serve as vice heads of the panel.

According Japan's decision on easing sanctions, the country will not ban DPRK nationals from entering Japan and the DPRK registered vessels, excluding the Mangyongbong-92 passenger-cargo ferry, are no longer banned from entering Japanese ports in humanitarian purposes.

Japanese nationals are no longer advised to refrain from visiting the DPRK, according to the decision.

On Wednesday, the United States, with which Japan cooperates over the DPRK's missile and nuclear issues, urged Japan to treat the abduction issue separately from dealing with the two military issues, according to local reports.

Meanwhile, a senior Japanese vice foreign minister said in Washington that the United States understand Japan's move to lift some restrictions closely related to abduction issue imposed on the DPRK.

Japanese Foreign Minister Fumio Kishida said Friday that it is too early to resume the six-party talks as the DPRK kept its provocative action, referring to missile launches.

Despite DPRK's call for resuming the talks without preconditions, Kishida said that it is important to hold dialogue with the DPRK, but that Japan will continue to take into account views of the other members of the six-party process.

Local reports said that Kishida's remark indicated that Tokyo will maintain tie-ups with Washington and Seoul.

South Korea on Thursday said it welcomes Japan's decision on easing some sanctions over the DPRK, but also said that it hopes the move should be a "transparency" one that will not block international efforts on dealing with the DPRK's nuclear and missile programs.

Any of Japan's decisions on the DPRK "should be made in such a way as not to undermine the framework of maintaining international cooperation, including that among South Korea, the United States and Japan, on its nuclear and missile programs," South Korean Foreign Ministry spokesman was quoted as saying in a press briefing.

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Mongolia's Approach Towards Pyongyang: Offering Guidelines for Washington's Failing North Korea Policy

July 3 (International Policy Digest) On May 23rd, 2014, Mongolia provided North Korea and the United States neutral ground in its capital for track 1.5 meetings. Presumably, North Korea's chief nuclear envoy met with two former US State Department officials to discuss resumption of the Six-Party talks, which have reached a complete standstill since 2009. Ulan Bator has been keen on normalizing Pyongyang's fractious relations with its adversaries and assist its Soviet-era ally in implementing economic reform. In this way, Mongolia unveils an alternative strategy that could incrementally reconfigure Pyongyang's behavior, offering the US some lessons for its failing North Korea policy.

As a Soviet satellite, Mongolia was the second country to recognize North Korea and it received more than 200 orphans following the Korean war. Ulan Bator continued its charitable moves after its democratic transition, delivering food aid numerous times during North Korean hardship. Even though bilateral relations made a downturn after Mongolia's post-communist strategic swung towards South Korea (Ulan Bator stepped up its trade with Seoul during the 1990s), they were revamped in 2002 after North Korean Foreign Minister Nam Sun Park made the first high-level visit to Mongolia in 14 years.

Earlier this year, Ulan Bator actively sought to thaw relations between Japan and North Korea by inserting itself as an intermediary in the abduction conflict. In March, a Japanese woman who was abducted at the age of 13 by North Korean agents, was reunited with her parents in Mongolia. Meanwhile, Ulan Bator props up North Korea's impoverished economy through cooperation and investment in industry, tourism and agriculture.

While many human rights advocates denounce these efforts as solely reinforcing Kim Jong Un's stranglehold on North Korea, economic cooperation and dialogue could offer the only viable opportunity of meticulously changing the country from within. US-spearheaded sanctions and international isolation of the "Hermit Kingdom" have not brought the defiant Kim family to its knees during the past fifty years. Notwithstanding the gruesome atrocities carried out by the regime against its people, simply condemning the North for its deplorable human rights record from the sidelines will not deliver any significant results. Nor will choking off its economy. These policies have been tried for a long time, but to no avail. Diplomatic coercion has primarily solidified Pyongyang's obstinate behavior, while only providing the West with moral justice on its side.

Mongolian President Tsakhiagiin Elbegdorj visited the reclusive state in October last year to cement a longstanding friendship. At the renowned Kim Il Sung university, he gave an unprecedented speech about freedom, upholding the rule of law and respecting human rights. "No tyranny lasts forever. It is the desire of the people to live free that is the eternal power," thus Elbegdorj stated. He urged North Korea to emulate Mongolia's transition model while implicitly encouraging Pyongyang to provide freedom to its people. Probably baffled by its content, no questions were asked by the professors and students in the audience. Instead, the speech was followed by lengthy applause.

What was particularly prudent about this visit, was that along with this value-laden speech, were lucrative cooperation and investment deals. Seeking to ease both countries' dependency on China and Russia, Elbegdorj concluded significant trade and cultural accords. Through warming its relations with Pyongyang, some analysts claim that landlocked Mongolia seeks to obtain sea outlets to ship its energy resources and minerals to other Asian nations, and thus ironically gain potential access to international markets.

Ulan Bator has been pushing the Kremlin for rail construction to the North Korean port of Rajin, which would connect Mongolia with the North via Russia. Apart from being potentially profitable, these engagement efforts make Ulan Bator a crucial stakeholder in North Korea's economy, rendering it increasingly costly for Kim Jong Un to ignore Mongolia's calls for more freedom and stability on the Korean peninsula.

Mongolia's thriving mining industry has fueled the country's rapidly growing economy. According to The Economist, Mongolia was one of the top performers in 2013, expanding its GDP at a rate of 11.7 percent. North Korea, for its part, is seeking to implement its Byungjin policy of parallel nuclear development and economic expansion, irrespective of the United Nations (UN) sanctions regime. It has been reaching out to friendly nations such as Mongolia and Indonesia to attract foreign trade and investment, and modernize its economy.

Last September, the Mongolian oil trading and processing company, HBOil, bought a 20 percent stake in North Korea's Sungri refinery. HBOil announced that it would supply crude oil to the state-owned refinery for processing, and subsequently re-import refined products to Mongolia. By planting itself firmly into the North's economy, and engaging it on a diplomatic level, Mongolia is potentially able to influence Kim Jong Un's policies. Elbegdorj's landmark speech may well indicate a readiness by Ulan Bator to utilize this privileged position vis-à-vis Pyongyang.

In line with it's economic ascendance, Mongolia is translating its growing self-esteem into numerous prolific initiatives to bolster its diplomatic footprint within the Central and East Asian neighborhood. The Elbegdorj administration conceives of itself as a potential broker on Korean affairs, being the only country both Koreas trust. Mongolia's Foreign Minister, Luvsanvandan Bold, underlined these aspirations when telling reporters that "Ulan Bator can be a useful platform to create understanding." He stated that "What Mongolia can provide is leverage to improve the situation in the region and pursue the initiative for parties to share dialogue."

Also, Mongolian construction and manufacturing firms have hired around 1,700 North Korean laborers to work in Mongolia. Bilateral agreements allow for 5,000 North Koreans to work there. Even though the Kim regime absorbs a large chunk of their remunerations, it remains incredibly lucrative for North Koreans to work abroad. What is particularly promising, is that these labor exchanges, however limited, expose North Koreans to the relative riches and plural perspectives of the outside world. Most experts on Korean affairs argue that first-hand experience in other countries, especially in post-communist Mongolia where people have recently lived through a democratic transition, could slowly modify their frame of reference by infusing them with information that deviates from the Pyongyang propaganda narrative.

Besides their converging interests in regional security and monetary benefits, both countries share common geopolitical concerns: Russian and Chinese dominance within Central and East Asia, and preservation of political and economic maneuvering space. Mongolia's foreign policy agenda is replete with experience of balancing economic, military and political interests between its two neighbors. It has learned to deal with its geographic confines and still been able to maintain constructive relations with both Moscow and Beijing, cultivate close relations with powerful though distant nations such as the US, and project its regional interests successfully.

This pragmatic foreign policy, famously depicted as Mongolia's Third Neighbor Doctrine, has mitigated pressure from China and Russia while simultaneously seeking to bring beneficial terms to the table in trade and diplomacy. It has avoided potential territorial disputes and nationalist tensions by stoically adhering to this long-term strategy, which is multilateralist and realist by nature. Following the recent Crimean conflict, which critically exposed the intimate Russian-Chinese connection, Ulan Bator will have to balance within its complex geopolitical environment once again.

North Korea is confronted with tightened UN sanctions and strained relations with its traditional patron in Beijing. Kim Jong Un thus eagerly embraces Ulan Bator's outreach, enabling him to counterbalance external coercion. These overlapping geopolitical and security interests, in combination with shared economic goals, provide ample opportunity for Mongolia to try and change Pyongyang's relations with the outside world, ameliorate its debilitated economy, and perhaps even encourage them to implement tentative political reform.

Of course, next to an appreciation of Mongolia's goodwill, North Korea's candidness towards the former also illustrates Ulan Bator's geographical distance from the Korean peninsula and weakness relative to Beijing, Washington, Moscow, Tokyo and Seoul. Notwithstanding the fact that Mongolia is developing itself into a strategic economic partner of Pyongyang, these greater powers possess far more potential leverage over the North.

However, Mongolia's activist approach towards North Korea does offer some basic guidelines for a more sensible strategy. The Obama administration's current policy of strategic patience (which most Korea observers refer to as "doing nothing"), did not bring about any efforts towards denuclearization or a desired change in North Korean behavior; rather the opposite. Nor did diplomatic isolation and punitive sanctions alter the regime's actions or hamper its continuity during the last five decades.

Even though North Korea remains anxious about its security position in East Asia, and therefore hard to deflect from its strategic-military arrangement, Mongolia's approach of investing in the North and becoming a stakeholder in its development, represents a far more promising alternative. Elbegdorj's speech surely testifies to its potential.

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HR Development Seminar Conducted in Mongolia by Forum for Nuclear Cooperation in Asia

Ulaanbaatar, July 3 (MONTSAME) The Nuclear Energy Authority of Mongolia is running a project-seminar called "Human Resources Development" (HRD) in collaboration with the Forum for Nuclear Cooperation in Asia (FNCA).

The HRD project aims to promote mutual exchange in HRD and strengthen nuclear technology foundation in Asian countries by performing activities. Main activities include understanding the needs of HRD in the nuclear field, exchanging information and survey on nuclear HRD, discussion on future HRD cooperation, joint study of training materials, and so on.

The project started in FY1999 as relatively new FNCA project. It has already achieved various outcomes such as finding out about HRD needs and demand in nuclear science and technology, supporting the training, and HRD survey on basic data. These were expected to improve mutual support activities and give feedback to existing exchanging programs.

FNCA has been implementing ten projects in Mongolia since 2010 to help introduce there advanced atomic technologies of countries such as Japan and South Korea. The projects have been regarded as of great importance to the food security and the economy of Mongolia.

Included in these, a 'Mutation Breeding' project, for example, will help the nation to develop varieties of crops that are more resistant to disease, insects, and drought, or give higher yield and offer higher quality. Another project named 'Neutron Activation Analysis' will introduce here an analytical technique for determining elemental compositions of a large variety of substances including coal and copper concentration.

FNCA is a Japan-led cooperation framework for peaceful use of nuclear technology in Asia. The cooperation consists of FNCA meetings and the project activities with the participation of Australia, Bangladesh, China, Indonesia, Kazakhstan, Korea, Malaysia, Mongolia, Philippines, Thailand and Vietnam. Mongolia enrolled to this forum in 2010 amid its participation in the 11th Ministerial Level Meeting of FNCA in Beijing, China. The participating countries cooperate in fields such as 'Radiation Utilization Development' (Industrial Utilization/Environmental Utilization, and Healthcare Utilization), 'Research Reactor Utilization Development', 'Nuclear Safety Strengthening', and 'Nuclear Infrastructure Strengthening'.

The project-seminar will last until Friday. 

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Australia to Award Master's Scholarships to 114 Mongolians in Next Three Years

Ulaanbaatar, July 4 (MONTSAME) A subsidiary arrangement of the "Australia Awards in Mongolia" program was signed in the Economic Development Ministry on Thursday.

Representing the Mongolian and Australian parties--the State Secretary for the Ministry of the Economic Development B.Shinebaatar and the Counselor at the Australian Embassy in Beijing Mr Geoff Bowen inked the arrangement that opens master decree education chances in Australia for 114 Mongolians in three year's time (for 38 people each year). The Masters level scholarships are offered to Mongolians from both the public and private sector within principles to focus more on the involvement of the disabled and people from rural areas.

Australia Awards in Mongolia is designed to improve the human resources needs of selected Mongolian government agencies, develop economic sectors of priority to Mongolia, enhance the opportunities for knowledge sharing and institutional linkages between Australia and Mongolia.

The Australia Awards Mongolia operates under a Subsidiary Arrangement between the Governments of Australia and Mongolia and is managed by the Department of Foreign Affairs and Trade Post in Ulaanbaatar with oversight from Beijing.

In 2014, Australia will provide over AUD138.9 million for the scholarship program, the Australia Awards Mongolia will be implemented under funding of AUD 15 million in 2013-2016. Long-term scholarships that provide opportunities for Mongolians to study in Australia have been the cornerstone of Australia's development assistance in Mongolia. The scholarships are one way to address human resources needs in Mongolia and to build people-to-people links.

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Kyrgyz MPs decide to adopt democratic experience of Mongolia

July 3 ( Kyrgyz MPs have decided to adopt the democratic experience of Mongolia. For this purpose there is planned a trip of leaders of the ruling coalition to Ulaanbaatar. The Parliament's Office informed news agency.

It is known that the leaders of SDPK and Ata-Meken faction will depart for Mongolia. In Ulan Bator also intends to head and The Prime Minister Dzhoomart Otorbayev also intends to arrive in Ulaanbaatar in the coming days.

Felix Kulov at the last moment refused from the trip. "I'm not going for family reasons," the leader Ar-Namys noted.

He explained that "Kyrgyz MPs intend to learn from the experience of democratic processes achieved in Mongolia."

According to him, the program of the visit includes study of the experience of Mongolia in ore mining and mining industries.

He believes that this country has "a major breakthrough in this area." (Mogi: well, one's failure is another's "major breakthrough")

The leader of the "Dignity" noted that the issue of biometrics experience is not provided.

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Kyrgyz PM to Pay Official Visit to Mongolia on July 8-12

July 4 ( Prime Minister of the Kyrgyz Republic, Mr. Djoomart Otorbaev will be paying an official visit to Mongolia on July 08-12, 2014.

On July 08, Prime Minister of Mongolia N.Altankhuyag will welcome his counterpart at Chinggis Square and after paying respect to Chinggis Monument, parties will hold official talks in the Government House.

Afterwards, Premier Otorbaev will be received by the Speaker of the State Great Khural (Parliament) Z.Enkhbold and President of Mongolia Ts.Elbegdorj respectively. Also, Minister of Mining D.Gankhuyag and Minister of Industry and Agriculture Sh.Tuvdendorj will meet the Kyrgyz delegates and introduce their sectors' activity.

On July 09-11, the Kyrgyz delegation led by Prime Minister Djoomart Otorbaev will be familiarized with Mongolian National Naadam Festival.

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Bulgaria's military attaché visits Mongolia, attends closing of Khaan Quest 2014

Ulaanbaatar, July 4 (MONTSAME) A defense attache of Bulgaria's Embassy in the People's Republic of China (PRC) Colonel Dimitar Ovcharov paid a working visit to Mongolia on June 30-July 3.

He legged the University of Defense and the Scientific Institute of Defense (SID), gave a lecture on his country's defense policy and activities at the "Hours of Attache" meeting in the SID, and participated in a closing ceremony of the "Khaan Quest" international field exercises for peacekeeping operations.

Moreover, he met with Major-General Z.Boldbaatar, the State Secretary of the Defense Ministry, and with Colonel D.Ariunbold, a head of the external relations and cooperation section, to share views on the bilateral defense ties and cooperation. 

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U.S. Military Conducts Exercises In Mongolia

July 4 (EurasiaNet) Over 1,000 soldiers, including about 300 Americans, took part in joint military exercises in Mongolia aimed at preparing for international peacekeeping missions. The annual exercise, known as Khaan Quest, is the biggest event in the U.S.-Mongolia military relationship, which has been gaining importance as Mongolia tries to diversify its foreign relations beyond its two immediate neighbors, China and Russia, and as the U.S. is happy to help.

In addition to Americans and Mongolians the participants in this year's version of Khaan Quest include troops from South Korea, India, Canada, New Zealand, Australia, Japan, France, United Kingdom and Germany. Several more countries sent observers, including Belarus, China, India, Kazakhstan, Russia, and Tajikistan. The exercises were held from June 20-July 1.

The military scenarios drilled include riot control, response to an improvised explosive device, and community outreach programs like renovating a school and operating health clinics.

Russia's turn will come in a few weeks; its annual joint military exercises with Mongolia, called Selenga, will this year take place in mid-August and will involve about 500 Russian soldiers.

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US Marines lead Mongolians during nine-day survivor course at KQ14DVIDS, July 5

MAF, US service members continue field training exercise at KQ14DVIDS, July 5

Khaan Quest 2014 comes to an endDVIDS, July 5


Journalists trained in USA

Ulaanbaatar, July 3 (MONTSAME) Mongolian journalists have been involved in the 5th series of training for journalism and English language in Washington DC, USA in accordance with an agreement between the Presidential Office and the American Councils for International Education (ACIE).

The trainees were granted the certificates on Wednesday. During the one-month training, the journalists had English language training in various levels and lectures on US media industry, and held meetings with some famous US journalists.

By the training programme, the journalists got acquainted with activities of the Washington-based CCTV, the "Politico" newspaper and the "NPR" radio station. They were given reports with topics "Tendency of US journalism", "Media and politics in USA", "Impact of bloggers on US media industry" and "Edward Snowden and space of personal information in USA, terrorism within the Internet".     

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China opens consulate general in Mongolia's border town

ULAN BATOR, July 4 -- China has opened a consulate general in Zamyn-Uud, a Mongolian border town in the southeastern Dornogovi province.

It is China's first consulate general to Mongolia and the first foreign diplomatic mission in Zamyn-Uud.

At the opening ceremony on Thursday, Mongolian Deputy Foreign Minister D. Gankhuyag exchanged views with his Chinese counterpart Xie Hangsheng on bilateral relations and further cooperation.

Chinese Ambassador Wang Xiaolong and Governor of Dornogovi province P. Gankhuyag also attended the ceremony.

Zamyn-Uud is located in the Gobi Desert along the Mongolia-China border across from Erenhot, a town in China's Inner Mongolia Autonomous Region.

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Party Secretary of Inner Mongolia Visiting Mongolia on July 6-8

Ulaanbaatar, July 4 (MONTSAME) A delegation headed by Mr Wang Jun, a chairman of the Standing committee of the People's Congress and Party Secretary of Inner Mongolian Autonomous Region of China will visit Mongolia July 6-8, invited by the parliament Speaker Z.Enkhbold.

The delegation will be received by Z.Enkhbold, the Chairman of the State Great Khural (parliament); by N.Altankhuyag, the Prime Minister; also by R.Gonchigdorj, a Vice Speaker, and D.Terbishdagva, the Deputy Premier and head of the Mongolia-China intergovernmental commission.

The delegation is supposed to visit the parliamentary hall of the State House, leg the #102 secondary school in Ulaanbaatar, meet delegates of enterprises invested by the Chinese side.

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Foreign Minister of Mongolia Pays Official Visit to Kingdom of Spain

July 3 ( Upon his counterpart invitation, Minister for Foreign Affairs of Mongolia Mr. Luvsanvandan BOLD conducted an official visit to the Kingdom of Spain on July 01-02, 2014.

In the scope of objective of this visit, the "third neighbor" policy proposed by the Government of Mongolia has been implementing as the Kingdom of Spain is considered as the core Spanish-speaking country influential among the European Union states, and the "third neighbor" policy is targeted to strengthen Mongolia's national security in the form of political dialogue and expand its position in the international arena as well as to accelerate economic relations between the two countries.

During the visit to Spain, Minister L.Bold held an official talk with the Minister of Foreign Affairs and Cooperation Mr. Jose Manuel Garcia-Margallo y Marfil discussing bilateral relations and partnership issues. For instances, parties negotiated to organize regular intergovernmental talks, intensify economic cooperation, implement students exchange program and agreed on the need to strengthen the legal basis of bilateral relations. Moreover, sides exchanged views to collaborate within the European Union, United Nations and other international organizations.

Foreign Minister Jose Manuel Garcia-Margallo noted that the visit by Foreign Minister of Mongolia to Spain is paid for the first time in the history of diplomatic relations established over 30 years ago and emphasized this visit was an important step to develop bilateral relations and cooperation.

Mongolia and the Kingdom of Spain have established the diplomatic relations on July 05, 1977.

Today on July 03, 2014, Foreign Minister L.Bold and accompanying delegates are paying an official visit to the Grand Duchy of Luxembourg.

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Foreign Minister visits SpainMontsame, July 3


Mongolia Opens Honorary Consulate in Madrid

July 3 ( During his visit to the Kingdom of Spain paid on July 01-02, 2014, Minister for Foreign Affairs of Mongolia L.Bold attended in the official opening ceremony of establishment of the Honorary Consulate of Mongolia in Madrid, Spain.

The Honorary Consul of Mongolia in Madrid is appointed a national of Spain, Mrs. Adriana Poveda and Minister L.Bold officially handed over the state flag of Mongolia during the ceremony.

In her statement, Honorary Consul A.Poveda pledged to promote Mongolia in all aspects and to work actively protecting interests of Mongolian citizens residing there and in the scope of starting her duties, newly appointed Consul has been employing two personnel, one a citizen of Spain and another one a Mongolian national.

Currently, over 300 Mongolian nationals are residing in Spain and in the recent record it was reported that a Mongolian man was beaten by some hooligans in Barcelona on June 30 and Mongolian Honorary Consulates in Barcelona and Madrid are paying attention on this case and working to protect rights of this young man, who is under treatment and feeling well.

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Mongolian Honorary Consulate opens in Madrid Montsame, July 3


Spain Pledges to Establish Spanish-Mongolian Inter-Parliamentary Group

Ulaanbaatar, July 3 (MONTSAME) During his visit to Spain July 1-2, Foreign Minister L.Bold met with Mr Pio Garcia-Escudero, the president of the Spanish Senate.

At the meeting, Mr Bold conveyed greetings and invitation of parliament speaker of Mongolia Z.Enkhbold to his counterpart of Spain. Noting the fact that a Mongolia-Spain inter-parliamentary friendship group has been established in our parliament, and noted the Mongolian part is willing to develop cooperation between the legislatures of the two countries.

After noting he will make efforts to establish a similar group in the Spanish Senate, Mr Garcia-Escudero invited Mr Enkhbold to visit his country in a favorable time.

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FM meets Spanish Vice Minister of Economic Affairs and CompetitivenessMontsame, July 3


Mongolia Seeks World Tourism Organization's Help in Advertising Decision to Free Visas for 42 Countries

Ulaanbaatar, July 3 (MONTSAME) Within the official visit to the Kingdom of Spain, the Minister of Foreign Affairs L.Bold has legged the Headquarters of the World Tourism Organization (UNWTO) in Madrid.

The Minister Bold has met Mr Taleb Rifai, the UNWTO Secretary-General; chairs of some divisions; and other delegates of Mongolia.

At the meeting with Mr Rifai, the Minister expressed a satisfaction with works being co-implemented with the UNWTO for developing the tourism sector in Mongolia, and then put forward specific proposals to broaden the ties. For instance, he asked the UNWTO Secretary-General to advertise the Mongolia's decision on exemption of visa requirements for 42 nations through the organization, to propagandize the Mongolia's tourism and to help Mongolia create its tourism brand.

In response, Mr Rifai noted about fruitful cooperation between the UNWTO and the Mongolia's Ministry of Culture, Sport and Tourism, and said the organization is ready to render support to Mongolia for tourism.

Mr Rifai said the UNWTO is helping Mongolia conduct a professional analysis on the new law on tourism, work out a plan for advertisement and strengthen the management. Then he granted to the Minister a list of project. Moreover, the UNWTO has made an official decision to involve Mongolia in an international biggest programme on developing tourism along the Silk Road.

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German Foreign Minister to Conduct Official Visit to Mongolia on July 6-7

Ulaanbaatar, July 3 (MONTSAME) The Federal Minister of Foreign Affairs of the Federal Republic of Germany Mr Frank-Walter Steinmeier is to pay an official visit to Mongolia on July 6-7.

During the forthcoming visit, Mr Steinmeier will be received by the President of Mongolia Ts.Elbegdorj and the Prime Minister N.Altankhuyag. He will also hold official talks with his Mongolian counterpart L.Bold and then will have a roundtable meeting with the Deputy Prime Minister D.Terbishdagva to talk about on the bilateral economic relationship and cooperation.

The visiting program of Mr Steinmeier includes trips to Mongolia-Germany join projects in fields of culture, science and archeology. He is also expected to sign a cooperation memorandum on repairing of the Kharkhorin town monastery ruins into an open-air museum. The ancient ruins repair project will be implemented under collaboration between the Ministry of Culture, Sports and Tourism of Mongolia and the Archeological Institute of Germany.

Coinciding with the 40th anniversary of the establishment of the diplomatic relationship between the two countries, and this visit was followed by a visit of Federal Minister of Germany Mr Klaus Kinkel oaid to Mongolia in 1998.

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Mongolia Establishes Diplomatic Relations with 181st State, the Republic of Mauritius

July 4 ( Within its aim to establish diplomatic relations with all United Nations member states, Mongolia has established diplomatic relations with the Republic of Mauritius in New York City on July 03, 2014.

Setting mutual aspirations to develop and strengthen friendly relations and cooperation as a guideline, the two countries agreed to adhere to the Vienna Convention on Diplomatic Relations, the UN Charter and international legal principles and standards.

The Permanent Representative of Mongolia to the United Nations, Ambassador Mr. Od OCH and the Permanent Representative of the Republic of Mauritius to the United Nations, Ambassador Mr. Milan Jaya Nyamrajsingh Meetarbhan have signed the joint statement to establish diplomatic relations. The joint statement was registered at the UN and the Permanent Representatives of Mongolia and Mauritius have sent the statement to the UN Secretary-General, Mr. Ban Ki-moon in order to inform the UN member countries.

The establishment of diplomatic relations with the Republic of Mauritius provides better opportunities for both countries to support each other in bilateral and international organizations, moreover, parties agreed to grow partnership and exchange experiences in economical, investment and tourist sectors.

As of today, Mongolia has established diplomatic relations with 181 states of the world and the EU.

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Social, Environmental and Other

B.Enkhtsetseg: Labor exploitation is another form of human trafficking

July 3 (UB Post) We talked to B.Enkhtsetseg, official of a program against human trafficking at the Center for Human Rights and Development (CHRD), about human trafficking issues in Mongolia, earlier this week. Our interview largely focused on labor exploitation – one of the identified forms of human trafficking – which reportedly makes up most of the cases related to human trafficking in Mongolia but still remains outside of the public's knowledge.

Can you talk about the severity of human trafficking in Mongolia?

Mongolia acts as both a transit and source country, as well as a destination point for trafficking victims. However, I want to talk more about domestic human trafficking, especially labor exploitation in Mongolia, whose victims are mostly found in road and construction projects, or in remote areas.  For instance, the Division Against Human Trafficking at the State Investigation Authority solved a case where an orphan child was forced to herd livestock for one family for two years.

We've heard that there has been a growth in labor exploitation, more so than sex trafficking. The organizations involved, especially the police, are getting better at recording these cases, which makes it seem like the crime rates have gone up. Do you believe that human trafficking is getting worse in Mongolia, or are the police just getting better at recording these incidents?

The first human trafficking case in Mongolia was reported in 2000. Though human trafficking was included in the Criminal Code of Mongolia, it was still lacking much. Finally, the code was revised in accordance with the Palermo Protocols after Mongolia joined them in 2008.

Also, there are several major organizations in Mongolia that are working against human trafficking, including the CHRD, which was founded in 1998. We have been holding training for law enforcement investigation skills on human trafficking cases. Police officers have improved a lot in the past 14 years, and also the laws have been amended. A specific law against human trafficking was approved in Mongolia in 2012 and I believe that all these helped police competency in recording the cases.

The public has also learned about human trafficking in the past few years and started contacting the police as victims. Police departments established divisions against human trafficking with the support of the government as well. Many factors have influenced the increase in recorded cases.

The overall situation of human trafficking has changed a lot in Mongolia. Which areas still need work in order to improve? For example, the number of labor exploitation cases has been increasing lately. What do you think can be done to bring down the number of these cases?

Law enforcement organizations need to track down and investigate labor exploitation cases more. The case of the orphan child was actually the only one the police initiated a criminal case for. The courts, police and other law enforcement organizations still need to learn more and acquire a proper education and practical experience in labor exploitation cases.

One reason that labor exploitation cases are not being solved is that those citizens who have been doing forced labor for a small amount of pay, or without pay while either captured or free, can't show law enforcement organizations enough evidence that they didn't have any other options and were forced to work. Enforcement of the Human Trafficking Law has been quite poor as well.

In 2012 and 2013, the CHRD submitted five labor exploitation cases to the police and they investigated two of the cases, but refused to further initiate a criminal case on them.

We are hoping that the revised draft of the Criminal Code of Mongolia will enable a better legal framework for labor exploitation if it is approved by Parliament.

Which countries are Mongolians trafficked to, and from which countries is Mongolia receiving trafficked people?

People from the Philippines and Vietnam are coming to Mongolia to work as maids, and several of them have become victims of labor exploitation here, but we haven't worked closely on those cases. As for Mongolians, we have received labor exploitation reports where Mongolians went to Kazakhstan, Turkey and South Korea to work and ended up working while detained without a pay.  But these cases have been dealt with in accordance with fraud laws, as certain people deceived those Mongolians and charged them for helping them find jobs in those countries.

Why are labor exploitation cases so difficult to prove?

Mongolians think the only identified forms of human trafficking are sex work or organ trafficking, so they do not realize that they are actual victims of another form of human trafficking -  labor exploitation. That is why the number of labor exploitation reports is still low.

They believe that their work of a week or a month without pay is not a big deal and just think it is due to rising demand for jobs.

As I've mentioned before, the police don't know how to investigate and prove labor exploitation cases. The Human Security Policy Studies Center, Caritas Mongolia of Caritas Czech Republic and the European Union jointly established a network in Mongolia, through their own funding, and are enrolling law enforcement officials in training for improving their skills in investigating, detecting and solving labor exploitation cases.

Mongolia is only in the early stages of working on labor exploitation cases, and these are typically seen as civil violations rather than criminal cases.

Link to interview


Air pollution in Ulaanbaatar believed to increase risk of miscarriage

July 6 (UB Post) An international conference on the effects of air pollution on women and children's health took place at the National Center for Maternal and Children's Health (NCMCH) on June 7 to 9.

David Warburton, a doctor at Children's Hospital Los Angeles in the U.S., gave the most interesting speech. He said, "Our final research report indicates that the risk of miscarriage in Ulaanbaatar increases four times during winter." These results came from comparing women at 27 days of pregnancy in winter and summer. The research was based on data collected from 10,000 women examined at the NCMCH.

Dr. Warburton also stated, "80 percent of Ulaanbaatar's air pollution is from coal. Although people need coal to keep warm, it's still very dirty. Therefore, I'd like to advise introducing 'coal cleaning' technology to Mongolia. Decisive steps for the health of future Mongolian children should be taken. We must either completely stop using coal or clean coal extremely well. Also, if heat loss in homes is reduced, coal use will be reduced."

He also stated that smoking is another major source of air pollution and continued, "Air pollution isn't just a health issue. It can include businesses. If members of the energy sector create public-private partnerships and drive away coal, there are opportunities to raise funds from foreign countries."

His research will be continued further.

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Special Edition DVD with bonus soundtrack featuring 15 tracks from Mongolian artists!

Mongolian Bling is an exploration of traditions, history, western influence, music, culture and the search for identity of the country's youth. The story is told through the beats and rhymes of three young rappers; Gennie, Gee and Quiza.

The film has screened at festivals and cinemas all around the world and now is available to own as a DVD, complete with a bonus CD featuring 15 songs from the film.

"A keenly observed, rhythmically buoyant documentary charting the rise of rap in the snow-blanketed 'hoods of post communist-era Mongolia."

- Megan Lehmann, The Hollywood Reporter

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More delight for Mongolia on second day of Ulaanbaatar Grand Prix

July 4 (Inside the Games) There was more delight for hosts Mongolia on day two of the Ulaanbaatar Judo Grand Prix as Naranjargal Tsend Ayush added the nation's third gold medal of the competition.

The reigning Ulaanbaatar Grand Prix silver medalist went one better this year as she defeated South Korea's Asian champion Hwang Ye-Sul in the women's under 70 kilogram contest.

Georgia's Madrid European Open winner Esther Stam beat Asian Championships bronze medallist Gulnoza Matniyazova of Uzbekistan to secure the first bronze medal of this division before Brazil's Maria Portela claimed the second with victory over Canada's former world number one Kelita Zupancic.

Mongolian legend and Ulaanbaatar Grand Prix poster boy Tsagaanbaatar Khashbaatar was forced to settle for silver in the men's under 73kg for the second successive year after Georgia's Nugzari Tatalashvili edged to victory in the final.

Tatalashvili was the only non-Asian winner inside the Buyant Ukhaa Sport Complex today as he edged the Mongolian favourite on account of shido penalties.

In this contest, the first bronze medal was clinched by Oberwart European Open winner Takenori Nakamura after he derailed South Korea's world number 200 Won Gi Jang, who was in pursuit of his first ever International Judo Federation medal.

The second bronze was won by North Korean Asian champion Kuk Hyon Hong after he beat local favourite Odbayar Ganbaatar to seal the first IJF medal of his career.

Link to full article

Link to Day 3 video


Strong start for hosts Mongolia as Judo Grand Prix gets underwayInside the Games, July 4

Judokas prepare for second Ulaanbaatar Grand Prix - Inside the Games, July 3


Bow to me or die in an ocean of BLOOD: Why Genghis Khan, throat slitter supreme, was even nastier than you thought

·         Genghis Khan has been a byword for barbarity for the last 800 years

·         Some historians estimate four million people were killed under his orders

·         As a boy Genghis believed God had decreed he should conquer the land

·         The name Genghis means 'fierce, hard, tough'

·         During Genghis's reign of terror the Mongol Empire took up most of Asia

·         THE MONGOL EMPIRE by John Man (Transworld £20)

July 3 (Mail Online) As a byword for barbarity, Genghis Khan has come down to us 800 years later as the cruellest conqueror of all time. We preserve his name to compare the perpetrators of genocide today to him. 

Is this tradition justified? That is what a new biographer should tell us and this one, John Man, has every qualification. He even speaks Mongol and makes Mongolia his stamping ground. He has written a very lively and enjoyable book on a very complex and baffling story.

It is littered with names that you have never heard of and cannot pronounce, and the two you do know are not as you thought: Genghis starts a soft G — Chinghis — and his grandson was Kublai Khan, not Kubla as Coleridge had it. 

The first chapters tell how a poor, illiterate boy, originally called Temujin, got himself recognised as leader of the hitherto disunited Mongols. This near-pagan lad had one great conviction: that Tengri, the Mongol deity, had decreed that he was to conquer all the land in every direction. Why he believed this is a mystery. 

He set about it and every victory which he and his horsemen achieved confirmed his belief that God was on his side. In 1189 the Mongols decided he should have a new name: Genghis. It was unique and until recently no one could explain where it came from. Now, however, scholars believe it derives from an obsolete Turkish word, chingis, meaning 'fierce, hard, tough'.

The Mongols took naturally to the idea that they were the master race. Under Genghis — The Fierce Ruler — their empire swelled like a pregnant pig, swallowing up most of central Asia from the Caspian Sea in the west to the China Sea in the east, and taking in the great cities of the Silk Road, Bukhara and Samarkand.

In the spring of 1211, he gathered an army some 100,000 strong and advanced across the Gobi to conquer the Chinese empire of Jin. The men took 300,000 horses and were armed with catapults which could lob rocks or firebombs 100 metres.

Behind this came herds of mares to provide the warriors with horse milk. Often this mass migration incorporated wives, families and sheep. The whole juggernaut probably ran to 250,000 with a million animals in tow. 

When they reached a fortified city their strategy was to surround it, starve it and invite its leaders to surrender or be annihilated. Those that refused were slaughtered to the last man, woman or child, but the same thing might easily happen to those which capitulated. 

Terror was the Mongols' weapon — shock and awe. Genghis applied it ruthlessly. In 1219 he led his army westwards from China towards the ancient cities of Samarkand and Bukhara, the eastern outposts of Islam, which had a degree of civilisation undreamed of on the Mongol steppes. 

There they lay with domes, palaces, mosques, huge libraries and scores of scholars leading the rest of the world in maths, science, astronomy and general knowledge. Bukhara was stripped of its treasures, bombarded and burned until all the males 'who stood higher than the butt of a whip' had been killed.

The Mongol juggernaut rolled on towards Samarkand, defended by some 100,000 troops and 20 elephants, which panicked, trampled their drivers and made off into the plains. 

When the city's merchant leaders and senior clergy invited the Mongols in, they looted their treasures, their wives and helped themselves to such survivors as would make slaves.

They moved on to lay siege to the remaining great city, Gurganj. By the time victory came, five months later, the invaders 'were in no mood for mercy'. The figures recorded by Muslim historians are staggering: 50,000 soldiers killed 24 men each.

Genghis now turned his attention to Merv, an oasis city of mosques and mansions. Its ten libraries contained 150,000 volumes, the greatest collection in Central Asia. The Mongols entered the city and after separating 400 craftsmen and a crowd of children to act as slaves, drove the remaining population on to the plain.

'Then,' writes Man, 'the killing started. The place was ransacked, the buildings mined, the books burned or buried. Merv lost almost everything and almost everyone.'

The Mongols ordered that no woman, man or child be spared. Each soldier in the 7,000-strong army was allotted around 300 people to kill. Most had their throats slit. Others were led out, 20 at a time, to be drowned in a trough of blood.

You might have thought even the most hard-hearted troops would baulk at having to slit the throats of so many victims, but it doesn't seem to have troubled the Mongols who would have despatched them, says Man, as easily as sheep.

He points out that it takes only  seconds to slit a throat, and that  for 7,000 soldiers 'the slaughter of a million would have been an easy two hours' work'.

In the late 18th century the English historian Edward Gibbon placed the total slaughter at more than four million. The figure may be exaggerated, but it was certainly one of the biggest mass killings in history. Genghis then returned to northern China, which he had only partially conquered. By the second week of August 1227 he was on the verge of achieving an empire running from the Pacific almost to Baghdad. 

It was not to be. He became seriously ill — possibly with typhus — and just days later was dead. But not before having told his leading captives: 'I am the punishment of God. If you had not committed great sins, God would not have sent me as your punishment'.

His body was secretly taken back thousands of miles to Mongolia, where it was buried somewhere unknown on a sacred mountain. Today, a massive mausoleum shows its visitors colossal statues of him — but no body. They are still looking for it. 

Did Genghis achieve anything but the Guinness record in bloodshed? John Man believes he had redeeming features. He allowed toleration of all religions — perhaps because he didn't have much of one himself, except as a mandate for conquest. He allowed women to play a more leading role than other dictators and he employed anyone of talent, irrespective of where they came from.

But he built nothing. He left no palaces, no writings, no philosophy, nothing but territories that owed allegiance to him. 

It is a relief to turn to his grandson, Kublai, for the rest of the book. Kublai had himself been recognised not only as the great Khan but as first emperor of a new Chinese dynasty, the Yuan. 

He built his new capital, known as Shang Du, which was mistranslated by Coleridge in his opium-inspired poem, Xanadu. Kublai's normal palace there was called the Pavilion of Peace but for summer he built the pleasure dome that we all know.

It wasn't much like Coleridge's dream. The sunny pleasure dome was not made on caves of ice. It was made of bamboo rods laid in a circle and supported by carved wooden columns. 

One of his great innovations was paper money. He gave China a new legal system. He built pagodas and adopted Buddhism. Altogether he was a lenient dictator. 

He grew very fat (the drink was to blame) and died at the age of 80. At this point he ruled from the Black Sea in the west to the China Sea in the east, covering a sixth of the world's known land mass. 

But within two years of his death this empire had split into its component parts, according to nationality. The Mongol Empire had vanished, leaving a legacy to the world of precisely nothing.

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First gobi bear cub of this year born

July 6 (UB Post) A research team that worked at the A region of Gobi's strictly protected area has reported that the first Gobi bear cub of this year was born. The Ministry of Environment and Green Development and researchers of the National University of Mongolia is currently making a picture index of all Gobi bears.

The research team installed automatic motion sensor cameras at Tsagaan Bogd, Shar Khuls and Khushuut of Gobi National Park which is home to Gobi bears.

With the automatic motion sensor cameras, pictures of each bear will be sorted and tracking bear population will become much easier. There are only around 30 Gobi bears left in existence as they are endemic specie to Mongolia.

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