Wednesday, August 20, 2014

[ETT suspends MacMahon operations, UB-Beijing now sisters, Mongolia braces for Xi visit, and HK consulate death ruled suicide]

Please click Display Images or Download Pictures to properly view this newswire

Wednesday, August 20, 2014

Follow the news on Facebook, Twitter and view archive here

Jump to: Overseas Market - Local MarketEconomyPoliticsBusinessUlaanbaatarDiplomacy - Social, Environmental and Other

Headlines in Italic are ones modified by Cover Mongolia from original


Overseas Market

MacMahon: Mongolia Update

August 20 -- Macmahon Holdings Ltd's (ASX:MAH) Mongolian operating subsidiary has been in communication with Erdenes Tavan Tolgoi (ETT) regarding payment delays for work completed at the Tavan Tolgoi coal project in Mongolia. Approximately US $22 million in progress payments are currently overdue.

Macmahon has been operating at Tavan Tolgoi since 2012 and the contract is scheduled to expire in 2017.

Macmahon advises that operations at Tavan Tolgoi have now been suspended by ETT, as part of a range of disagreements between the parties.

The parties are engaging in discussions to see whether the matters can be resolved by agreement.

Link to release


MacMahon Annual Report 2014, August 20

MacMahon Annual Results Presentation, August 20


Wolf Petroleum Investor Presentation, August 2014: Hunting for Mongolia's Multi-Billion Oil Fields

August 20, Wolf Petroleum Ltd. (ASX:WOF) --

Link to preso


Viking Mines in Suspension Pending Announcement of Capital Raising

Viking Mines Limited ("the Company") refers to its request for a trading halt made on Monday, 18 August 2014. Pursuant to ASX Listing Rule 17.2, the Company requests a voluntary suspension of its securities effective immediately pending a material announcement to the market regarding a Capital Raising.

For the purposes of ASX Listing Rule 17.2, the Company advises that the:

(a)   request is being made to ensure an orderly market in the Company's securities;

(b)  voluntary suspension is expected to last until the earliest of the Company releasing the announcement to the market regarding a proposed capital raising or commencement of trade on Friday 22 August 2014;

(c)   event the Company expects will end the voluntary suspension is an announcement by the Company relating to a proposed capital raising; and

(d)  Company is not aware of any reason why its securities should not be voluntarily suspended, nor of any other information necessary to inform the market about the voluntary suspension.

Link to release


VOR last closed A$0.001 Monday

Voyager Resources in Trading Halt Pending Acquisition Announcement

August 19 -- The Directors of Voyager Resources Limited (ASX Code: VOR) hereby request a trading halt of the Company's securities pending an announcement regarding an acquisition.

The trading halt is requested until an announcement is made to the market, which is expected to be on or before the opening of trading on Friday, 22 August 2014.

The Company is not aware of any reason why the trading halt should not be granted.

Link to release


SGQ closed +4.92% to C$0.64, 1878 closed +3.31% to HK$4.68 Tuesday

SouthGobi Resources Interim Report 2014

August 20, SouthGobi Resources Ltd. (TSX:SGQ, HKEx:1878)

Link to full report


FMG Mongolia Fund +2.36% in July, -11.48% in 2014




















































Link to fund page

Back to top

Local Market

MSE News for August 19: Top 20 -0.74% to 15,932.25, Turnover 22.3 Million

Ulaanbaatar, August 19 /MONTSAME/ At the Stock Exchange trades held Tuesday, a total of 28 thousand and 511 shares of 17 JSCs were traded costing MNT 22 million 307 thousand and 486.00.

"Olloo" /10 thousand units/, "Genco tour bureau" /6,860 units/, "Silikat" /5,000 units/, "Hermes center" /1,520 units/ and "Mongolia Development" /1,000 units/ were the most actively traded in terms of trading volume, in terms of trading value--"Mon-it buligaar" (MNT six million and 965 thousand), "Tavantolgoi" (MNT two million and 803 thousand), "APU" (MNT two million 748 thousand and 010), "Material impex" (MNT two million and 310 thousand) and "Olloo" (MNT one million and 200 thousand).

The total market capitalization was set at MNT one trillion 599 billion 445 million 455 thousand and 847. The Index of Top-20 JSCs was 15,932.25, decreasing by MNT 118.08 or 0.74% against the previous day.

Link to article


86 Stocks (Out of 244) Submit Q2 Financial Reports, 38 of Which Filed After Deadline

August 19 (Cover Mongolia) --

New reports since last update

Company name



Publish date





2014 Half year



Darkhan Nekhii


2014 Half year



Juulchin Gobi


2014 Half year



Mandalgobi impex


2014 Half year


Link to full list

Back to top


Khan, TDB, Golomt, XacBank  still maintaining 1,850 Buy, 1,860 Sell rates, State Bank is selling USD at 1,879

BoM MNT Rates: Monday, August 18 Close

















































August MNT vs USD, CNY Chart:


Link to rates


BoM FX auction: US$20.6m sold at 1855.75, CNY40M at 304.20, accepts swap $40m bid, $15m ask offers

August 19 (Bank of Mongolia) On the Foreign Exchange Auction held on August 19th, 2014 the BOM has received bid offer of 25.0 million USD, 40 million CNY and ask offer of 3.3 million USD from local commercial banks. The BOM has sold 20.6 million USD as closing rate of MNT 1855.75 and 40.0 million CNY as closing rate of MNT.

On August 19th, 2014, The BOM has received MNT Swap agreement bid offer in equivalent to 40.0 million USD and USD Swap agreement ask offer of 15.0 million USD from local commercial banks and accepted all offer.

See also:

·         FX Auction Statistics

Link to release


Mongolia's Foreign Trade Review, July 2014

August 19 (Bank of Mongolia) --

Total trade turnover: $6,088.6 millions  

As of Jul 2014 the total cumulative trade turnover increased by 0.8% (USD 49.9 millions) from that of the previous year and reached USD 6,088.6 millions. The increase in the trade turnover was due to the increase in exports by USD 586.8 millions.

The structure of the trade flows with the neighboring trade partners is as following: (i) trade with PRC: 61% or USD 3,687.8 millions and (ii) trade with Russia: 16% or USD 945.2 millions. The trade volume between Mongolia and China increased by 23.2% and the trade volume between Mongolia and Russia increased by 5.8%.

Trade balance: -$207.6 million

As of Jul 2014, the cumulative trade balance decreased by 84.4% (USD 1,123.8 millions) from that of the previous year and reached USD –207.6 millions. During the reporting period the total exports increased by 24.9% from that of the previous year, imports de-creased by 14.6% from that of the previous year, thus the trade balance improved by USD 1,123.8 millions.

The value of the three-month moving average of the difference of annual growth rates of exports and imports has been decreasing recent years (Picture 1 shows that the annual growth rates of ex-ports and imports have been declining since October 2011). But since the beginning of 2014, it has been increasing.

Trade balance of paid trade flows: -$39.0 million

The state of the trade balance of paid trade flows is one of the main variables that determines the pressure on the domestic foreign exchange market.

As of Jul 2014, the trade balance of paid trade flows reached USD –39.0 millions. During the reporting period, paid imports decreased by 13.9%, and paid exports increased by 22.5% from that of previous year.

Terms of trade: 1.738 (test estimation)

As of Jul 2014, terms of trade index (2012 base year) increased by 23.0% from that of the previous year and reached 1.738.

This increase in the terms of trade is mainly attributed to the de-crease in import prices of durable consumer goods, fuels, machinery and equipment.


Composition: 87% + 13%

The share of mineral exports in total exports increased by 0.2 points from that of the previous year and reached 87%.

Exports of coal, copper concentrate, iron ore and concentrate and crude oil have a weight of nearly 78% of total exports and 90% of mining exports.

In addition, these 4 products' share in the mining exports in-creased by 7.0 points from that of the previous year, share in the total exports increased by 6.3 points.

Growth: +24.9%

Mongolian export increased by 24.9% from that of the previous year, which was mainly affected by 25.0% increase in mineral exports. Exports of copper concentrate and crude oil increased by 152% and 52%, respectively, which accounted for 42% in growth of mining export. On the other hand, coking coal, iron ore and zinc ore export decreased by nearly 16%, 37%, 25% respectively, which accounted for 13% decrease in the growth of mining export.


As of Jul 2014, Mongolian export increased by 586.8 million USD from that of the previous year. It is affected by the increase of export commodities' quantities (USD 661.3 millions) and decrease in export commodities' prices (USD 74.4 millions) .

Because of the increase in crude oil and copper concentrate quantities, mining export increased by 640 millions USD. On the other hand, because of decrease in prices of coal and iron ore and de-crease in quantities of iron ore, zinc ore, and non-monetary gold mining export declined by 482 million USD.

Cashmere, cashmere products and other exports increased by 30 and 44 million USD respectively.

World market prices for primary commodities

As of Jul 31 2014, gold price reached 1,289.6 USD, increased by 3.2% from that of the previous year and increased by 3.4% from that of the last month.

As of Jul 31 2014, copper and iron ore prices reached 7,135.5 and 95.2 USD, increased by 1.3%, 1.5% from that of the previous month respectively. Copper price increased by 3.8%, iron ore price decreased by 26.7% from that of the previous year respectively.


Composition: 26% + 41% + 21%

As of Jul 2014, 26% of total imports were consumer goods, 41% were capital goods and 21% were fuels.

Share of consumer goods in total imports increased by 2% from that of the previous year and share of the capital goods decreased by 6% from that of the previous year . And the share of fuels stood at the same level.

Growth: -14.6%

Mongolian imports decreased by 14.6% from that of the previous year. Main contributors of this decrease were capital goods de-crease, which equal to 12% of the total decrease, and oil import which equal to 3% of the total decrease.

Capital goods and fuels imports decreased by 25% (444 millions USD) and 15% (113 millions USD) respectively. Thus total import decreased from that of the previous year.


Consumer goods import decreased by 6% (49 millions USD) from that of the previous year. Main contributors of this decrease were durables goods, in particular decrease in passenger car imports.

Capital goods import decreased by 25% (444 millions USD) which was mainly contributed by 41% decrease in machinery, equipment and supplies (490 million USD). On the other hand, import of construction materials increased by 13% (54 million USD).

Intermediate goods and industrial materials import increased by 20% (61 millions USD). The main contribution was 123% in-crease in electricity (51 millions USD).

Fuels import decreased by 15% (113 millions USD). The oil price on the border decreased from beginning of 2012 to august 2012. Since then, the oil price increased slightly, but from October 2012 it is decreasing slowly. (Figure 8).

Import of the consumer goods

The growth of consumer goods import, calculated by 3 month moving average method, is constantly declining. / Figure 7/.

Even though the import growth of non-durable consumer goods was relatively stable, that of durable consumer goods was declining by the bigger phase.

Table 1. The foreign trade performance /million USD/

Picture1. The growth rate of exports and imports /3 month moving average/

Picture 2. The trade paid in hard currency

Picture 3. Changes in terms of trade /3 month moving average/

Table 2. The performance of export of goods (million USD)

Picture 4. Coal export, market price (USD)

Table 3. Changes in export goods (million USD)

Picture 5. Market price of gold, zinc, copper

Table 4. The performance of import goods (million USD)

Picture 6. Breakdown of import /3 month moving average/

Picture 7. Import of consumer goods /3 month moving average/

Picture 8. Import of oil products, average border price

Link to full report

Back to top


Development Stuck in the Mud: Cause and Solution

By Jargalsaikhan "De Facto" Dambadarjaa

August 19 (UB Post) Every responsible Mongolian today is concerned about the current outlook for the socio-economic development of Mongolia, economic decline, the growing gap between the rich and poor, and increased politicization in our society, and is looking for ways to make changes and fix these problems. The Democratic Party was once given a lot of faith and chosen to clean up politics and deliver the benefits of economic development to every house-hold. However, despite acquiring governing power and holding most senior positions, they have been having dis-agreements internally, which has eventually turned our law enforcement agencies against each other. It is time for us to engage in a broader discussion on exactly what the root causes of these problems are and what steps should be taken by Mongolia to become a democratic, highly developed country.


Development is dependent on political and economic institutions. When the structure of political institutions supports the people in acquiring private property, allows them to take part in the market allocation of resources, and makes sure that they have a say in making laws, development is achieved three times faster and twice as efficiently as development in countries that lack such political institutions (Scully, 1983). It was explained by Australian development specialist Jim Scully, who used data that was collected for 20 years. However, economic institutions function better in developed countries and they promote economic growth more in the long term than political institutions do, as cited in "Why Nations Fail: The origin of power, prosperity, and poverty" by Daron Acemoglu and James Robinson.

The Economic Research Institute (ERI) compared the national development policy and planning of Mongolia to those of countries with similar pro-files (Chile and Botswana), and produced a study that cross-examined the findings of the above-mentioned scholars. ERI defined institution as "a concept that leverages interaction between all social agents while acting as a norm that regulates those interactions." Political institutions provide representation for the public by making and implementing laws, developing policies for the socio-economic system, and using other channels. For example, political institutions can include political parties, labor unions, and judicial organizations. In other words, these institutions are in the form of an acknowledged structure that is based on rules and principles of the right to choose, government responsibility, and account-ability.

In Mongolia's case, political parties, which are the only institutions that can obtain ruling power by winning an election, still have not been able to develop and grow stronger as an institution. This is the most important knot in the tangled rope of our economic development. In-stead of planning the socio-economic development of Mongolia for the mid and long term, our political parties are instead working only short-term during election cycles.


Based on the experiences of countries that have successfully developed their economies, the ERI research suggests that one of the basic conditions for development is the consistency and stability of political and socio-economic policies regardless of the change in political parties. Those countries successfully established independent units (economic institutions) to develop mid and long-term socio-economic policies, and monitor and assess their implementation. They made sure that the economic institutions functioned well and were managed fairly in a democratic manner.

The secret to the political parties that have ruled those countries one after another being able to unite their people under patriotism, is that those political parties had a strong sense of ethical responsibilities and produced true leaders. One political party has mostly had ruling power and another has had it on two occasions for the 20 years since Mongolia's democratic revolution. Mongolia has been upholding the new constitution and held several elections in those 20 years. However, neither of these two political parties has been able to develop and grow stronger as an institution, which is why Mongolia's economic development is stuck in the mud today. It has also become hard to talk about the ethics of our two large political parties. Despite having worked in the most senior positions in the government, the former leader of one of those political parties was sent to jail in a corruption case.

The leader of the other political party, which currently has the ruling power, also finds his family members and loyal executives being investigated due to allegations of similar offences. Political party leaders have the responsibility to build and strengthen the capacity of political institutions. However, the main reason why these leaders are lacking true leadership is that political parties keep their sources of funding secret and have deviated from their primary responsibilities. Instead of acting as a bridge connecting ordinary citizens to the government, political parties are following orders from those who have made donations, making laws that favor the donors, exempting them from taxes, and protecting the business interests of certain people. Political party leaders today are trying to retain their power at all costs, while putting aside the interests of their party members as well as the rest of society. The Democratic Party, which currently has ruling power, stated in their charter that their National Consultative Committee meeting will be held no less than twice every year. However, it has been two years since they "completely forgot" about their commitment. Currently, there is a struggle going on in the upper echelon of the Democratic Party about the "fair allocation of power" to those factions that have made different "donations" from varying sources. In order to maintain their power, they established new ministries, created dozens of new positions, and added thou-sands of new employees. It increased the expenditures of the government, expanded the amount of debt, weakened the tugrug, increased the inflation rate, and created the next economic shock.

The Democratic Party is trying to avoid producing their financial reports and refuses to reveal their sources of funding to ordinary citizens. But their leaders are declaring that they will make the financing of the government trans-parent and "make their wallets glass". It is a play that is not only ludicrous, but also deceptive. The solution that will unlock the development of Mongolia is to bring about transparency and reveal political party financing. Unless every political party produces their financial reports truth-fully and have the reports reviewed by an independent auditing firm, the chain of corruption will never be broken. Political parties must at least make their activities transparent to their members and become an institution that does what it says. This way, we can establish capable economic institutions that can function efficiently. When that happens, Mongolia's socio-economic development will be freed from the mud and shift to the next stage.

Link to article

Back to top


Mongolian Air Space Upgraded to International Standards with Shorter Place Distances

By D. Sergelen

August 19 (UB Post) Flight distances between airplanes flying across Mongolia are switching to international standards, from 90 km to 30 km, on September 18.

The Civil Aviation Authority of Mongolia spoke with journalists about the upgrade and equipment. In order to implement this change, they have installed new facilities and trained staff, and they are about to install two radio locators soon.

The radio locator is a device that reports the direction and height of airplanes flying over Mongolia.

Before 2013, Mongolian aviation officials supervised airplanes manually by connecting with the flight team and noting their location and altitude. At that time, the distance between airplanes was 150 km.

By installing radio locators, airplanes flying over Mongolia will be counted, one by one. There will be advantages including increased income from flights, 80 to 100 USD per 100 km, and increased airplane travel.

The International Air Transportation Association applauds the change.

Czech Airlines, FedEX global courier delivery services, Philippine Airlines and Israir Airlines now have permission to conduct flights over Mongolia, and two of the companies have started the new flight paths.

Kh.Enkhbaatar, chief of Flight Service at the Civil Aviation Authority of Mongolia stated, "Mongolian airspace is divided into five sectors. Maintaining a distance of 90 km was hard for foreign pilots, because they have to minimize and change their speed. But now they will conduct flights at the same speed."

Nearly 230 airplanes fly over Mongolia every 24 hours. The longest flight path is from China to Russia, at an altitude of over 1,500 km. There are 15 foreign airspaces in Mongolia including nine belonging to Russia and six belonging to China. (Mogi: wait, is just my lack of aviation knowledge or does this sound a bit odd?)

Link to article

Back to top


Ulaanbaatar and Beijing Establish Sister-City Relations

August 19 ( In the scope of the Northeast Asian Mayors' Forum being organized in Ulaanbaatar, Deputy Mayors of China's Beijing, Tianjin, Shenyang, Hohhot and Hailar cities accompanied with over 20 representatives are participating in this Forum.

In the frameworks, Ulaanbaatar and Beijing have established sister-city relations and the signing ceremony of the Memorandum of Understanding was held at the Capital City Administration on August 18, 2014.

The Memorandum was signed by Mayor of Ulaanbaatar Mr. E.Bat-Uul and Vice-Mayor of Beijing Mr. Chen Gang, where parties noted that the two municipalities will be developing economical and business cooperation by establishing the sister-city relations. As start of this partnership, Ulaanbaatar Administration will organize trade fair in Beijing in upcoming September to promote Mongolian products and goods.

As of today, Ulaanbaatar city is collaborating with over 40 cities of the world in the frames of sister-city and friendship relations.

Link to article


Ulaanbaatar Establishes Sisterhood Partnership with BeijingMontsame, August 19

Ulaanbaatar-Beijing sign sister city, August 19


Mayor Invites Niigata City to Participate in Ulaanbaatar Development

By B. Khuder

Ulaanbaatar, August 19 (MONTSAME) The Mayor of Ulaanbaatar city Mr E.Bat-Uul Tuesday received a delegation led by Mr Hamada Eiji, a deputy governor of Japan's Niigata city, who is taking part in the first Northeast Asian Mayors' Forum running here.

Mr Hamada thanked the Mayor for inviting him and his delegation to the forum and mentioned that it is infrequent for leaders of Northeast Asian countries to attend events together. Then he highlighted that organizing the forum for cities' authorities is a sign of good reputation of the Mongolian capital city and its friendly ties with others.

Expressing gratitude to the Japanese delegation for visiting Ulaanbaatar, the UB Mayor said the General Plan for Developing the UB city until 2020 and the Conceptual Programme until 2030 have been formulated with a support from Japan's government, and that these documents already have been adopted by parliament.

"I think these programmes have been worked out on good feasibility studies, and to realize them we  consider as necessity to develop the collaboration of regional cities and to learn each other experiences during this forum," Mr Bat-Uul underlined.

He also added that our city is open for all the participants to cooperate.

Link to article


Northeast Asian City Mayors Seek Opportunities Based on Good Economic Models

August 19 (Mongolian Economy) Today is the last day of the North-East Asian Mayor's Forum that is taking place in Ulaanbaatar, hosted by the City Government. This forum aims to initiate discussions revolving around sustainable and inclusive cities. The event is attended by many mayors from Northeastern Asian cities in addition to the President and the Minister of Foreign Affairs of Mongolia. Around 120 representatives came from 20 cities from five different countries. 

Urbanization has increased rapidly throughout the northeastern region of Asia, making it more prominent than ever to share success stories and strategies to further develop cities. Through additional development of growing cities, governmental bodies can then focus on human development ranging from education to technological advancement to politics. Asia is home to the most rapid growth of urbanization. By 2030, it is expected that 55 percent of the Asian population will have access to live in urban areas. With urbanization, cities can begin to reduce poverty levels and educate their citizens. Without a good system, unplanned expansion can exacerbate further problems such as crime, inequality and pollution. 

The importance of northeastern cities in Asia is crucial to foster innovate growth. Northeastern Asia is responsible for approximately 1.6 billion people who produce a third of global greenhouse gas emissions. Due to rapid levels of urbanization, this area is expected to reach over 70 percent within the next ten years. As a significant player in greenhouse gas emissions, it is important to develop this area in order to establish low carbon cities as the biggest problem for these cities is the lack of inclusive and effective infrastructural services. 

The Deputy Mayor, Ji Hyeong Geun, of Pyeongchang, the city to host the 2018 Winter Olympics, said, "We are paying high attention to city planning regarding the Winter Olympic games. The most important thing about city planning is that it is all about letting citizens live in a comfortable environment as well as maintaining more eco-friendly principles. After 2018, we are planning to become a world tourism city." 

In Ulaanbaatar, 60 percent of the population resides in ger areas plagued with poor urban infrastructure and inefficient development plans. The next decade is expected to see an additional 400 thousand residents, thus making it imperative to figure out more efficient development strategies. During the forum, the Ulaanbaatar Urban Services and Ger Areas Development Investment Program was discussed in order to create projects that will better serve the community. 

In a report published by the Asian Development Bank, it is predicted that by 2025, 20 of the top 50 cities that have the highest GDP per capita rates will be Asian cities. In order to be economically independent cities, there needs to be trade promotion, investment attraction, job creation, and more small- and medium-sized businesses. These cities need to seek opportunities based on good economic models. Northeastern Asian cities are still growing and contribute to a large portion of the world economy. 

The Mayor of Ulaanbaatar, E. Bat-Uul, said, "By sharing our experiences together, Northeastern Asian cities can deepen cooperation and tighten partnerships. This will contribute on a massive scale to regional and sustainable development."

Thus, the forum serves to establish development awareness among Northeastern Asian cities. Alongside mayors from the cities of Darkhan, Erdenet, Chinggis, Choibalsan and Baruun-Urt and representatives from Japan, China and Russia, members hope to jumpstart the expansion of sustainable cities to match with its rapid urbanization levels. It collected mayors' opinions to build upon cooperative development strategy, which is considered to be a savior of time and money. Members plan to host this forum every year.

Link to article

Back to top


Mongolia welcomes Chinese investment, says Beijing before Xi visit

BEIJING, August 19 (AFP) Mongolia welcomes Chinese investment, Beijing said Monday, as President Xi Jinping prepares to visit the country where there is growing opposition to overseas control of its vast, largely untapped mineral reserves.

The two countries are neighbours but Xi's trip to Ulan Bator on Thursday and Friday is the first by a Chinese head of state for more than a decade.

It comes with resource nationalism the major issue in Mongolian politics, while Beijing is constantly on the look-out for resources to power the world's second-largest economy.

In 2012 Mongolia tightened approval requirements for foreign companies seeking to do business in "strategic" sectors such as minerals.

China is the biggest investor in Mongolia, and also the largest market for its huge stocks of coal and copper.

The foreign investment law was enacted after China's biggest aluminium producer Chalco sought to take a stake in Mongolian company SouthGobi.

The move could have seen control of Ovoot Tolgoi, one of the country's biggest coalmines, fall into Chinese hands.

"From our contact with the Mongolian government, people and the business community I believe they welcome Chinese investment," assistant foreign minister Liu Jianchao told reporters at a briefing ahead of Xi's visit.

"They regard Chinese investment as a source of strength for their development. In energy and resources both countries have conducted fruitful cooperation."

The China Daily newspaper said a deal which gives landlocked Mongolia the use of "several" Chinese ports -- including the busy northern hub of Tianjin -- was expected to be discussed during the visit.

Xi will meet Mongolian President Tsakhia Elbegdorj, who will hold a "family banquet" for the Chinese leader and his wife Peng Liyuan, Liu said.

The two heads of state will "issue an important political document", he added, without giving details.

Hu Jintao was the last Chinese president to visit Mongolia, in 2003.

Link to article


Chinese Ambassador Focuses on Bilateral Relations for President Xi Jinping's VisitUB Post, August 19


Roundup: Frequent high-level exchanges witness constant progress in China-Mongolia ties

BEIJING, Aug. 19 (Xinhua) -- China and Mongolia, which share a 4,710-kilometer-long land boundary and established diplomatic relations in 1949, have seen constant progress in their ties since they revised and signed the Treaty on Friendly Relations and Cooperation in 1994.

The two countries have maintained a good momentum of high-level exchanges. In 2003, then Chinese President Hu Jintao visited Mongolia and both sides decided to establish a good-neighbor partnership of mutual trust.

Between April and May 2010, Mongolian President Tsakhiagiin Elbegdorj paid a state visit to China and attended the opening ceremony of the Shanghai World Expo.

In June 2010, then Chinese Premier Wen Jiabao visited Mongolia.

In June 2011, then Mongolian Prime Minister Sukhbaatar Batbold paid an official visit to China and the two sides decided to upgrade their bilateral ties from a good-neighbor partnership of mutual trust to a strategic partnership.

In June 2012, Elbegdorj met with Hu on the sidelines of a Shanghai Cooperation Organization (SCO) summit held in Beijing.

In December 2012, Wen met Mongolian Prime Minister Norov Altankhuyag on the sidelines of the SCO summit in Bishkek, capital of Kyrgyzstan.

In January 2013, Wu Bangguo, then chairman of the Standing Committee of the National People's Congress (NPC) of China, visited Mongolia and met with President Elbegdorj and Prime Minister Altankhuyag.

In September 2013, Chinese President Xi Jinping met Elbegdorj in the Kyrgyz capital of Bishkek, and both leaders agreed to promote bilateral cooperation.

In the following month, Altankhuyag, the Mongolian prime minister, visited China and held talks with Chinese leaders.

In May 2014, President Xi met with Elbegdorj in Shanghai, who was there to attend the Fourth Summit of the Conference on Interaction and Confidence Building Measures in Asia.

At the invitation of Elbegdorj, President Xi will pay a state visit to Mongolia on Aug. 21-22.

Link to article


Xi Jinping's Mongolia trip to focus on energy, infrastructure

First visit by president to landlocked neighbour in 11 years expected to yield deals on cross-border transport and infrastructure

By Teddy Ng

Beijing, August 19 (South China Morning Post) China will sign a series of energy and infrastructure deals with Mongolia as part of President Xi Jinping's two-day state visit to the neighbouring country this week, according to the Foreign Ministry.

Assistant Minister of Foreign Affairs Liu Jianchao said yesterday that the trip would also yield support for Mongolia's plans to boost cross-border transport through China. The trip, scheduled for Thursday and Friday, comes as China tries to expand its influence in Central Asia by promoting its idea of a Silk Road Economic Belt, an initiative designed to expand economic cooperation in the region.

It also comes as China continues to look beyond its borders to meet its growing economy's increasing demand for energy and resources.

Mongolia is also fostering ties with nations such as India and Japan to meet its infrastructure needs. It signed a free-trade deal with Japan last month and is also working to improve logistics links with other nations through China and Russia.

"We are aware of the demand in Mongolia to step up cross-border transport through Chinese territory. We will work hard to help the Mongolians in this regard," Liu said.

"We believe this will benefit economic and trade cooperation between Mongolia and other nations."

The last time a Chinese president visited Mongolia was a 2003 trip by Xi's predecessor, Hu Jintao.

Dialogue between China and Mongolia has expanded in recent months. In May, Mongolian President Tsakhia Elbegdorj went to China for a regional security summit, and Foreign Minister Wang Yi visited Mongolia in June, paving the way for Xi's visit. Vice-President Li Yuanchao also visited the country in April.

Erdenebulgan Oyun, Mongolia's deputy minister for mining, said Mongolia aimed to sign a gas project and supply accord with China during Xi's trip.

The agreement would cover the construction of two coal-to-gas plants, with 95 per cent of the output being piped to China. Liu said the two countries would also sign deals on coal mining and infrastructure, but did not give details.

Li Lifan , an expert on Central Asian affairs at the Shanghai Academy of Social Sciences, said Mongolia might seek Beijing's support to join the Asia-Pacific Economic Cooperation forum, and upgrade its status from observer to full member of the Shanghai Cooperation Organisation, a regional security bloc that includes China, Russia and several Central Asian countries.

Li said a cross-border transport agreement would facilitate the delivery of coal and other materials from Mongolia to China, and further on to other nations such as Japan.

Link to article


Trade and infrastructure to top Xi's agenda in Mongolia

Mongolia welcomes Chinese investment, as President Xi Jinping prepares to visit the country. But as analyst Neil Ashdown tells DW, Mongolia will likely remain heavily dependent on China as an export destination.

August 19 (Deutsche Welle) Xi is set to become the first Chinese president to visit Mongolia in over a decade. The state visit - scheduled for August 21 to 22 - will be Xi's first to the neighboring country since assuming office two years ago. The trip is viewed by analysts as a reflection of Mongolia's growing importance to its southern neighbor as Beijing tries to expand its influence in Central Asia. China is expected to sign agreements to give the landlocked and resource-rich Mongolia easier access to Chinese territory for its exports.

The visit follows Mongolian President Tsakhiagiin Elbegdorj's trip to China in May for the Conference on Interaction and Confidence-Building Measures in Asia (CICA) summit in Shanghai as dialogue between the two countries has expanded in recent months.

Neil Ashdown, a Mongolia expert and senior Asia-Pacific analyst at IHS, says in a DW interview that Xi's visit represents an opportunity for the two sides to put in place agreements that will shore up Mongolia's economic and fiscal situation. He also stresses that rail and road construction are likely to be a high priority, along with discussions over the possibility of pipelines linking Russia and China.

DW: This is the first visit by a Chinese head of state to Mongolia in more than a decade. How significant is this trip, and what will be the key issues on Xi Jinping's agenda?

Neil Ashdown: For Mongolia this is a very significant visit. Most importantly, it has to be seen in the context of Mongolia's current economic situation. While the economy is still growing, there are reasons for concern about its future direction.

Foreign direct investment (FDI) has dropped off dramatically - it fell 70 percent in the first half of 2014 - the value of the currency has fallen steadily, inflation is in double figures, and the government's fiscal position has been weakened by significant lending through the Development Bank of Mongolia. As a result, we expect GDP growth to fall to 9.4 percent in 2014, down from 11.5 percent in 2013.

The government has responded to criticism from foreign investors, taking positive steps to improve the regulatory environment. However, this has not been enough to attract investors back. Most seriously, an ongoing dispute with mining corporation Rio Tinto over the proposed expansion of the Oyu Tolgoi copper mine has become a sticking point. Until this dispute is resolved, it is unlikely we will see a significant reversal of the downturn in foreign investment.

As such, Xi's visit represents an opportunity for the two sides to put in place agreements that will shore up Mongolia's economic and fiscal situation. These will primarily be focused on putting in place the infrastructure necessary to ensure a continuing flow of mineral exports from Mongolia to China. Rail and road construction are likely to be a high priority, along with discussions over the possibility of pipelines linking Russia and China.

What does Mongolia expect from China in return?

The main thing that Mongolia is expecting from China is for it to continue to purchase its mineral exports. Ahead of the visit, Mongolian politicians have been discussing the potential for an expansion of Chinese tourism, Chinese assistance in developing Mongolia's domestic processing capabilities for its mineral, and access to Chinese ports for Mongolian goods.

If these developments go ahead they would help diversify the Mongolian economy, and potentially reduce its dependence on China as an export customer. However, it is likely that these proposals will take a backseat to negotiations over trade and infrastructure.

Mongolia, a landlocked country, is now talking with China about a trade route directly south to China. How important would this route be for both countries?

Mongolia's infrastructure connections with its neighbors are underdeveloped. The main rail line runs north-south, connecting Russia and China. There is a second line in eastern Mongolia that connects to the Russian rail network. However, the mineral-rich southern belt of the country is largely unserved by rail infrastructure. This has made its mineral exports less competitive – for example, in the absence of rail connections, coal is currently trucked to loading stations, and then to the Chinese border. This process is expensive and time consuming.

The game-changer for cross-border trade would be the expansion of rail links into China – which takes 90 percent of Mongolia's exports. The key issue here is the gauge used for the line. In recent years, Mongolia has veered between favoring the Chinese and Russian rail gauges.

The Chinese gauge would further reduce the cost of Mongolia's mineral exports to China – removing the need to move from one gauge to the other at the border – but precisely for this reason, Mongolian policymakers and the general public are concerned that it could make China the only competitive destination for its exports. That is why, over the last two years, Mongolia has set out a proposal of an expanded network that favors the Russian wide gauge and connections with its northern neighbor, aimed at accessing markets other than China.

However, in the face of economic realities, this preference has been weakening this year. In April, China's largest coal producer, Shenhua Group, confirmed that it would participate in a joint venture with a Mongolian company to construct a rail link to carry coal across the border – using the narrow Chinese gauge.

How important is trade between the two neighbors?

China is by far Mongolia's biggest export destination; in 2013 China took 90 percent of Mongolia's exports. It is also the biggest source of imports for the Mongolian economy, accounting for 37.8 percent of the total in 2013, compared to Russia at 27.6 percent. Minerals make up the majority of those exports – primarily copper and coal.

Aren't Mongolians wary of a potential economic over-dependence on China?

Mongolians have historically been ambivalent about their country's relationship with China. In particular, there are deep-seated historical issues around the control of resources. We have seen this play out in parliament in recent years, most notably with the introduction of the - now defunct - Strategic Entities Foreign Investment Law in 2012, which was aimed at preventing Chinese state-owned company Chalco taking majority ownership of a Mongolian coal miner.

It is likely that opposition will also manifest itself at the grassroots level, although this is unlikely to result in more than small protests in public places in Ulaanbaatar. More widespread social unrest or outbreaks of violence are unlikely to occur.

China is clearly aware of this sentiment and is working to ensure positive relations with Mongolia. This is likely to be the reason that Chinese diplomats are currently talking about facilitating "transshipment" of Mongolia's exports – raising the prospect that goods will transit China to be sold onto buyers in Asia and further afield – and promoting "two-way trade". In reality, Mongolia will remain heavily dependent on China as an export destination and it is unlikely that the majority of goods crossing Mongolia's southern border will be going anywhere other than China.

How do you expect Sino-Mongolian ties to develop in the foreseeable future?

In China, the visit is being portrayed as a way to further develop Beijing's already strong relationship with Mongolia. The Chinese press recently quoted Mongolian President Tsakhiagiin Elbegdorj as referring to his country's relationship with China as a "strategic partnership."

In contrast, Mongolia has traditionally sought to maintain balanced relationships between its two neighbors – Russia and China – while simultaneously cultivating relations with so-called "Third Neighbors" such as the US and Japan. While the basic thrust of this strategy are likely to remain in place, so long as concerns remain over the future direction of Mongolia's economy, Ulaanbaatar is likely to find itself leaning more towards China.

Mongolia had ambitions to become China's top coking coal supplier, largely through the development of one of the world's biggest untapped mines at Tavan Tolgoi, near the Chinese border. Is this still the case?

In 2011, when Oyu Tolgoi appeared to be a done deal, there was major interest in Tavan Tolgoi's globally significant coal deposits. The Mongolian government had an ambitious plan to internationalize the development of the project – bringing in companies from both its neighbors and beyond with the aim of ensuring the project did not become dependent on one partner.

The West Tsankhi bloc, which is already producing coal, would be mined under contract by a group of US, Russian, and Chinese companies. East Tsankhi would be developed by a Mongolian company, Erdenes Tavan Tolgoi, which would fund the work through a simultaneous IPO on three stock exchanges (London, Hong Kong, and Ulaanbaatar). Mirroring the West bloc, that process was to be supervised by a number of international banks.

Three things happened. Ahead of the 2012 elections, the Mongolian government intervened to halt talks over West Tsankhi. Reports at the time cited a range of factors including the absence of South Korean and Japanese companies from the proposed consortium. Given the timing of the decision, however, it is likely that political maneuvering also played a role.

Secondly, international coal prices took a tumble, which given Mongolia's high transport costs and dependence on China as an export destination, reduced the commercial attractiveness of coal exports. The third development was the emergence of the dispute over Oyu Tolgoi. Until this is resolved it is unlikely we will see further progress on Tavan Tolgoi.

Recently, the CEO of Erdenes Tavan Tolgoi said that company's IPO would not be held until 2016. While this timeline could credibly cover the resolution of the Oyu Tolgoi dispute and a return of investor confidence in Mongolia, it also brings the proposed listing into close proximity with the next legislative elections, due in June 2016.

Neil Ashdown is a Mongolia expert and senior Asia-Pacific analyst at IHS, a global information and analytics firm.

Link to article


Dalai Lama's visit to Mongolia canceled under pressure from China

August 20 (Kyodo) The Dalai Lama's planned visit to Mongolia this month has been canceled under pressure from China, which labels the Tibetan spiritual leader as a separatist, according to multiple sources knowledgeable about Tibetan Buddhist affairs.

With Chinese President Xi Jinping due to pay a two-day state visit Mongolia from Friday, the cancelation is believed to result from China's effective use of economic leverage on its landlocked neighbor, whose economy is highly dependent on China as an export market for mineral exports and as a source of investment.

The sources said Tibetan Buddhist circles began planning early this year for the Dalai Lama to visit the Ulan Bator, the Mongolian capital, in August to preside over a large-scale public Kalachakra, or tantric initiation, like one he held there in August 1995 that attracted 30,000 followers.

The Dalai Lama is enormously popular in Mongolia, where a majority of the population is Tibetan Buddhist. He has made eight visits there since his first in 1979, despite objections from China.

The sources said preparations for his ninth visit were suspended after a plan for China's leader to visit Mongolia the same month emerged and began to take shape.

The Mongolian Foreign Ministry has not commented on the Dalai Lama visit plan, except to say visits by religious leaders have nothing to do with the work of government.

But multiple sources said the government, under pressure from China, requested Tibetan Buddhist circles to cancel the planned events.

The Dalai Lama's last visit to Mongolia in November 2011 drew protests from China, which at the time said it opposes any country providing "a stage for the Dalai Lama's anti-China splittist activities."

The religious leader, who fled his homeland following a failed uprising against Chinese rule in 1959 and has since been based with his followers in northern India, insists he seeks genuine autonomy, not independence, for Tibetans.

Xi was invited by Mongolian President Tsakhiagiin Elbegdorj to visit his country at an early date when the two leaders met in Shanghai last May on the sidelines of a regional meeting.

During that meeting, Xi was quoted by China's official Xinhua News Agency as telling his Mongolian counterpart that the two countries, as good neighbors and partners, should support each other's "core interests and major concerns."

Elbegdorj responded that Mongolia will continue to firmly support China on Tibet-related issues and Taiwan-related issues, both of which China considers as "core interests," according to Xinhua.

Noting that the two countries' economies are highly complementary, Xi said China is willing to promote Mongolia's mineral resources exploitation and infrastructure construction, while extending financial cooperation and encouraging Chinese enterprises to invest in Mongolia.

During Xi's upcoming visit, which falls on the 65th anniversary of the establishment of diplomatic relations, the two sides are expected to reach a number of economic agreements, including those on railway and pipeline cooperation.

The last visit by a Chinese president to Mongolia was in 2003 when Hu Jintao, Xi's predecessor, went to Ulan Bator. Since then, the two countries, which share a 4,720-kilometer-long border, have upgraded their bilateral ties from a good-neighbor partnership of mutual trust to a "strategic partnership."

Link to article


Khalkh River Battle Monument Built in Moscow

August 19 ( The first-ever monument dedicated to the victory of the Battles of Khalkh Gol was built in Moscow, Russia. Mongolia marks the 75th anniversary of the WWII victory this August. Ambassador Extraordinary and Plenipotentiary of Mongolia to the Russian Federation Sh.Altangerel visited the monument dedicated to the victory by Mongolian and Russian troops. 

The Museum of Nomadic Culture in Eastern Moscow and Konstantin Kuksin built the monument.

Link to article


Russia Hands Mongolia Monuments of Khalkh River Battle Soviet Heroes

August 19 ( Celebrating the 75th anniversary of the victory of the Battles at the Khalkh River (The Battles of Khalkhyn Gol) several events are being organized such as exhibition, conference and tour to countryside by Russian-Mongolian youths.

In the scope of commemorating the anniversary, monuments of Major Sergey Ivanovich Gritsevets and Lieutenant-general Grigoriy Panteleyevich Kravchenko, Soviet pilots and the first two-time recipients of the honorary title of Hero of the Soviet Union, who performed heroic actions during the Battle of Khalkhyn Gol were delivered from Russia and given to Mongolian Military Museum on August 18, 2014.

These two monuments including transportation costs were created of 30 million MNT (Tugrug), where Ulaanbaatar Railway JSC, Mongolian-Russian joint venture allocated the fund.

On August 20, 2014, an opening of "Victory at Khalkh River - 75" Exhibition will be held in Mongolian Military Museum at 12:00 pm.

Link to article


Mongolia Takes 9th Place at World Tank Biathlon 2014

August 19 ( On August 16, 2014, the first ever World Tank Biathlon was successfully concluded at the firing range in Alabino near Moscow, where 36 tank crews from 12 countries have participated in this newly introduced global military sporting event.

At the closing ceremony, authorities of participated Defense Ministries and Armed Forces were present and during the meeting with Mongolia's Defense Minister D.Bat-Erdene, Russia's Defense Minister Sergey Shoigu (Shoygu) expressed his gratitude to Mongolian representatives and noted the collaboration in defense sector has been broadening between our two countries.

The 2014 Tank Biathlon brought 12 countries including Angola, Armenia, Belarus, China, India, Kazakhstan, Kuwait, Kyrgyzstan, Mongolia, Russia, Serbia and Venezuela, and following the final stage Mongolia stood at the 9th place participating for the first time with its three crews from General Staff of Mongolian Armed Forces, Defense University and Military Unit No. 011, 016 and 327 commanded by Colonel J.Gankhuu.

All international crews were provided with Russia's T-72B tanks, apart from China which used its own Type-96A model and the championship title went to the Team of Russia followed by Armenia and China crews.

Chief of the Department of Combat Training, Russian Armed Forces, General Ivan Buvaltsev said before the competition in June 2014, Russia provided six-week training for foreign tank crews intending to compete on Russian combat vehicles "just for equal opportunities to all the competitors".

According to the rules of tank biathlon, crews must navigate a distance of up to 20 km evading various obstacles, crossing rivers and bridges and shoot at a set of targets. Tanks that miss a target get a penalty lap. Moreover, observers from over 20 countries watched the event.

Link to article


U.S. Air Force medical experts train counterparts in Mongolia

By Staff Sgt. William Banton, Pacific Air Forces Public Affairs 

ULAANBAATAR, Mongolia, August 16 (AFNS) -- The sounds of agony filled the air near the wooded back lot of the Central Armed Forces Hospital, or CAFH, in Ulaanbaatar, Mongolia, as an interpreter encouraged accident victims to 'ham up' their performances during mass casualty response training, as part of Operation Pacific Angel 14-4 Mongolia.

The Mongolian armed forces soldiers-turned-actors tested the readiness of Mongolian civil military physicians and nurses, during a scenario that represented the culmination of a training event with U.S. Air Force medical subject matter experts.

"We try to make these scenarios as real as possible for the students," said Master Sgt. Victoria Grey, the enlisted medical SME for mass-casualty response training during PACANGEL 14-4. "When they do go out to treat the patients we have moulaged, they know that they need to be treating the most injured first."

The exercise helped cultivate common bonds and fosters goodwill between the U.S., Mongolia and regional nations by conducting multilateral humanitarian assistance and civil military operations at locations like the CAFH.

The CAFH, founded in 1921, provides medical and health care services to all Mongolian armed forces, activity-duty, retired, veterans and their families.

"Despite the cultural hurdles that we knew we'd expect, it's funny how medicine is an international language," said Maj. T.J. Bonjour, an emergency medicine physician assistant and medical SME instructor.\

With patience, persistence and the help of Mongolian translators', Air Force members worked seamlessly with surgeons, cardiologists and a wide variety of nurses and technicians to help teach organizational and communication skills.

"This course mainly centered on mass casualty management and emergency center preparedness," Bonjour said. "Their system already has a robust (structure) in place, and I think we facilitated furthering the progression of their system."

The training will allow the CAFH to provide better medical services to those who need it, said Mongolian armed forces Maj. Battumur Batmunkh. The training will also allow the hospital to prepare other first responders for mass causality situations.

As the students eagerly ran toward the mock tragedy, the atmosphere tested the skills learned, which could one day save lives.

"Pretty much for us, communication was the key," Grey said. "They are not all from the same unit, so they had to come together as a team, communicate well and help each other out."

Link to article


Nuclear Agencies of Mongolia, Japan Hold Training on Reactor Engineering

By B. Khuder

Ulaanbaatar, August 19 (MONTSAME) In frames of the cooperation between our Nuclear Energy Agency (NEA) and Japan's Authority of Nuclear Energy, a sub-training on reactor engineering has started in Ulaanbaatar.

The training is being co-organized by the above states organizations and the Mongolian University of Science and Technology (MUST) with a participation of over ten engineers and experts from the NEA, MUST, the Nuclear Research Center at the Mongolian State University (MSU), "MonAtom" state-owned company, "Linux" LLC and the Institute of Physics and Technology at the Academy of Sciences.

The training is being participated by Mongolian alumni of the Japanese universities to share experiences.

Link to article


France to Award 10 Scholarships to Mongolia for 2014-2015 Academic Year

By B. Khuder

Ulaanbaatar, August 19 (MONTSAME) Mongolian students will receive scholarships of the government of France in frames of the Mongolia-France education and cultural ties expansion.

The decision was made during a visit of the French Minister of Foreign Affairs Laurent Fabius to Mongolia in 2013. Accordingly, the scholarships of the French government will be given to four students for PhD degree, to four for master degree, and to two undergraduate students in the academic years of 2014-2015.

They will major in archeology, hydrology, engineering, economics, management, law, agriculture, communications, tourism and foreign languages in use--the prior spheres of the bilateral ties.

Link to article


HK police rules consular officer's death as suicide, closes case

August 19 ( Mongolian Consular Officer in Mongolia's Consulate General in Hong Kong, Oyun-Erdene, was found dead on August 8th.

Hong Kong's local media reported details about the case under investigation by Hong Kong police.

The consular officer was recently divorced from her husband, a U.S. national, and the two were engaged in arguments over the custody and care of their children.  She had reportedly been depressed about her family issues. Prior to her death, she told colleagues that it seemed like someone was following her.  Local police found her dead from a fall from the hotel where she was living.  The case file has been closed and the police have ruled the death a suicide.

Link to article

Back to top

Social, Environmental and Other

3rd Asian Forum on Rights of Child to Be Held in Mongolia, August 23-24

August 19 ( The III Asian Forum on the Rights of the Child is being organized by the National Authority for Children in collaboration with UNICEF's Mongolia Representative's Office, and the Japan Institute on Child Convention, in Ulaanbaatar, on August 23-24.

There are plans to discuss the abolition of the worst forms of the child labor and the rights of the child for development and protection, the roles and involvement of state and non-state organizations in children's rights practices, child information security, education, and emergency services for children.  The III Asian Forum on the rights of the child will be represented by 50 delegations from 50 Asian countries.

The participants will deliver keynote speeches on the practices of Japan, Korea, India, Cambodia, Indonesia, and Mongolia to share their experiences.

At the Asian Forum on the Rights of the Child 2014 a declaration will be adopted and the next host country will be announced.

Link to article


Asian Forum on Children's RightsMontsame, August 19

Back to top


Room #5, Coffice Hub, 5th Floor, Time Center
21 Baga Toiruu Street, Sukhbaatar District 8
Ulaanbaatar, Mongolia 15160
P Please consider the environment before printing this e-mail.

No comments:

Post a Comment