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Thursday, December 4, 2014
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MMC closed -11.1% to HK$0.44 Wednesday
Updated: Mongolia Seeks Fresh Bids for Giant Coal Project
Mongolia Restarts Long-Awaited Tender to Develop the Tavan Tolgoi Coal Deposit
By CHUIN-WEI YAP
BEIJING, December 3 (WSJ)— Five mining companies, including an international consortium, have said they would bid to develop Mongolia's giant Tavan Tolgoi coal project, as the landlocked Asian nation restarts a long-awaited tender to develop the world's largest coking coal deposit.
A consortium comprising China Shenhua Energy Co., the world's largest coal producer by volume, Japan's Sumitomo Corp. and a subsidiary of Hong Kong-listed Mongolian Mining Corp., has submitted a notice to bid, Yaichil Batsuuri, chief executive of the mine's state owner, told The Wall Street Journal on Wednesday.
U.S. Peabody Energy Corp., the world's largest closely-held coal producer, and a local Mongolia mining firm also filed separate notices to bid for the project, said Mr. Batsuuri, who leads Erdenes Tavan Tolgoi JSC, the project's owner.
Sitting on top of more than a billion metric tons of the mineral, Tavan Tolgoi is the largest deposit of high-grade coking coal in the world. It was one among a handful of prime mining destinations that Mongolia counted on for capital investment.
But plans for the mine's development and a $3 billion public offering for Tavan Tolgoi never came to fruition as commodity markets faltered. Ulaanbaatar in July 2011 scotched an auction to develop the western portion of the coalfield that it first awarded to, then later took back from, Shenhua, Peabody and Mongolian and Russian companies.
In the latest round, companies were required to filed a notice of their intentions to bid by Monday this week, Mr. Batsuuri said. Mongolian Mining Corp. said in a statement its subsidiary Energy Resources LLC is taking part in a consortium in the latest round of bids. The other companies didn't have or weren't immediately available for comment.
A decision on the process is only expected after a new government is formed in Mongolia, Mr. Batsuuri said—which means no firm deadline has been set.
Ulaanbaatar's government is in flux as Prime Minister Saikhanbileg Chimed, newly appointed last week after the ouster of his predecessor, tries to build a coalition.
Mr. Chimed's predecessor Norovyn Altankhuyag, who lost a vote of confidence last month amid the slumping economy, told The Wall Street Journal in an interview last year that Mongolia had planned to build up its infrastructure before proceeding with Tavan Tolgoi's development.
However, Mr. Chimed is under pressure to find new finances for Mongolia's cash-strapped government. Mongolia's Ministry of Mining declined to comment Wednesday.
Ulaanbaatar has tried to forge closer ties with Chinese coal buyers in recent years. Mongolian companies mining part of the coal reserve in the Tavan Tolgoi basin had agreed on a deal last year to export coal to Shenhua Group over the next two decades, and the Mongolian government has also tried to involve the Chinese state-owned giant in developing infrastructure links to transport coal between the two countries.
A revival of Tavan Tolgoi's development would be coming at a time of intense headwinds against the global coal industry. China and the U.S. have set new goals in a climate deal last month on capping carbon dioxide emissions, which for China includes a clear target to decrease coal consumption by annual absolute volume by 2030.
Beijing has mandated that coal must fall to at most 65% of China's energy mix by 2017 from 70% currently, and to at most 60% by 2020. It has forced smaller collieries to shut and banned highly polluting coal imports.
Complicating Tavan Tolgoi's outlook, slowing growth in China has also impacted coal prices, which have fallen 20% this year to six-year lows.
Mongolia restarts bidding for giant coal project as economy flags
Dec 3 (Reuters) - Mongolia has relaunched an international tender to develop its giant Tavan Tolgoi coal project as it tries to boost a flagging economy hit by falling commodity prices and a decline in foreign investment.
The latest attempt has drawn interest from Hong-Kong listed Mongolia Mining Corp (MMC), U.S.-based Peabody Energy Corp and Japan's Itochu Corp, despite weak global coal prices.
Tavan Tolgoi holds around 7.5 billion tonnes of coking coal, but Mongolia's cash-strapped government has struggled to finance its development, and little progress has been made since an international bidding process collapsed in 2011.
The Mongolian Mining Corp (MMC) said on Monday that it has formed a consortium with "certain independent parties" to submit a bid for the project, located around 300 kilometres (186 miles) from the Chinese border.
Interested firms had to notify the Mongolian government of their intention to bid for the block before a Dec. 1 deadline, with a shortlist expected to be released by Dec. 15, MMC said.
The firm declined to give further details of its bid, when contacted by Reuters.
Erdenes Tavan Tolgoi, the state-owned entity in charge of the project, did not immediately respond to requests for comment.
In 2011, the western block of the project was awarded to a consortium consisting of Peabody, a team of Russian and Mongolian firms, and the Shenhua Group, China's biggest coal producer, but the result was annulled after rival bidders from Japan and South Korea branded the decision unfair.
Peabody spokesman Chris Curran, said the firm would be "an active participant" in the current tender.
Itochu, which submitted a joint bid with Sumitomo, Marubeni and Sojitz in 2011, said it had also notified Mongolia that it was interested in getting involved.
South Korea's Daewoo International and LG International, both part of a consortium bid in 2011, said they would not participate.
China's Shenhua was not available for comment.
Along with the Oyu Tolgoi copper mine, run by Rio Tinto , Tavan Tolgoi is seen as crucial to Mongolia's efforts to convert its mineral wealth into economic gains, but both have been caught up in a debate about the role of foreign firms in the country's development.
Mongolia's new prime minister Chimed Saikhanbileg has identified Tavan Tolgoi as a priority to energise the country's flagging economy.
"It's one of a handful of key projects ... that has to be completed during the six-month honeymoon for the prime minister to restore confidence in the Mongolian economy from a global perspective," said Jim Dwyer, executive director of the Business Council of Mongolia.
Bidders submitted documents for Tavan Tolgoi tender
(Ulaanbaatar) Dec 3, Final six bidders for Tavantolgoi investment and operation project were sent bid letters on Sep 1, 2014. Dec 1, tender committee had received final proposal documents from the bid participants, including China Shenhua Energy Co. (1088), Sumitomo Corp, Peabody Energy Corp, (BTU) and Energy Resources LLC consortium.
Itochu and Sojitz consortium, Mitsui and Tavantolgoi JSC sent bids on projects develop the deposit and market the coal.
The new tender for investments and developments of Tavantolgoi deposit was announced back in August according to the Government Resolution 268. The winner is expected to take charge over Erdenes Tavantolgoi JSC management and financials, develop the coal processing plant with annual capacity of 30 million tons in 2.5 years, build railroad connecting Tavantolgoi with Gashuunsukhait port and market the coking coal to the second market.
Government Resolution states the requirement for the bidder to have Mongolian national holding the controlling interest and 5-year experience in coal operations and only Energy Resources fits into this requirement.
TRQ closed -3.07% to US$3.16 following the news
Fire at Mongolia's Oyu Tolgoi Copper Mine Under Review
By Michael Kohn
December 3 (Bloomberg) A fire struck the $6.6 billion Oyu Tolgoi copper mine today, the largest excavation in Mongolia.
The blaze was brought under control and an investigation is under way, according to Tony Shaffer, head of media relations for Turquoise Hill Resources Ltd. (TRQ), part owner of the mine. There were no reported injuries.
The open-pit mine has been in commercial production since July 2013. Development of the underground portion of the dig has stalled amid a dispute between the government of Mongolia and Rio Tinto Group, which manages the project.
The fire occurred in the concentrator, a machine that separates waste rock from copper, according to Oyu Tolgoi LLC, the mine operator. The deposit is located 550 kilometers (342 miles) south of the capital Ulaanbaatar in a remote corner of Mongolia's Gobi Desert.
The Mongolian government owns 34 percent of the mine and Vancouver-based Turquoise Hill holds the remaining 66 percent.
Announcement made after HK close, before Toronto open. SGQ closed -5.56% to C$0.51 Wednesday, 1878 -0.27% to HK$3.68
SouthGobi Resources Announces Successful Completion of Private Placements and Payment of Installment of Cash Interest Due on CIC Convertible Debenture
HONG KONG, CHINA--(Marketwired - Dec. 3, 2014) - SouthGobi Resources Ltd. (TSX:SGQ)(HKSE:1878) ("SouthGobi" or the "Company") announces the completion of the private placements for the issue of new Common Shares for gross proceeds of US$9.0 million. In addition, on December 3, 2014 the Company paid the November 2014 cash interest installment due on the secured convertible debenture held by a wholly owned indirect subsidiary of China Investment Corporation ("CIC").
Private Placements
The Company has successfully completed the private placements, as announced on December 1, 2014, with independent investors through Yue Xiu Securities Co. Ltd. The total gross proceeds from the private placements are US$9.0 million (US$8.9 million net after fees) through the issue of 24,360,773 Common Shares at CAD$0.42 per share.
The proceeds from the private placements have paid in full the November 2014 installment of the cash interest due on the CIC convertible debenture with the balance providing additional working capital.
The private placements have increased the total number of Common Shares in the Company to 218,751,008.
China Investment Corporation Interest payment
On December 3, 2014 the Company paid US$8.1 million in respect of the November 2014 cash interest installment due on the secured convertible debenture held by a wholly owned indirect subsidiary of CIC. The Company has now fulfilled all interest obligations due under the convertible debenture for November 2014.
Current financial position
At December 3, 2014, the Company has cash of US$4.9 million. The Company has received the funds raised from the private placements and on December 3, 2014 paid in full the November 2014 installment of the cash interest due on the CIC convertible debenture.
The Company continues to seek additional financing to fund its operations and meet its objectives.
MMC: Prospectus - Proposed Rights Issue to Raise HK$1,556 Million
December 3, Mongolian Mining Corporation (HKEx:975) --
…
INTRODUCTION
Reference is made to the Announcement and Circular. On 31 October 2014, the Board announced that the Company proposed to raise not less than approximately HK$1,556 million and not more than approximately HK$1,567 million, before estimated expenses, by issuing not less than 5,557,554,750 Rights Shares and not more than 5,597,079,750 Rights Shares to the Qualifying Shareholders by way of the Rights Issue at the Subscription Price of HK$0.28 per Rights Share on the basis of three Rights Shares for every two existing Shares by a Qualifying Shareholder held on the Record Date. Fractional entitlements will not be allotted but will be aggregated and sold for the benefit of the Company. The Rights Issue will not be available to the Non-Qualifying Shareholders.
Since there was no new Share being issued or repurchased by the Company on or before the Record Date, the total number of issued Shares on the Record Date was 3,705,036,500 Shares, and accordingly the Company will issue 5,557,554,750 Rights Shares to the Qualifying Shareholders.
At the EGM held on 24 November 2014, the relevant resolution approving, among other things, the Rights Issue, was duly passed by the Independent Shareholders by way of poll.
Each of MCS Mining Group, our Controlling Shareholder, Novel Holdings Group Limited, Trimunkh Limited, Sumberu Limited, Eco Mogul Limited, Inter Group Mongolia Limited, Gera Investments Limited, Benu Investment Limited, Crystalline Investment Limited, Tamirana Limited, Tugs Investment Limited, Shunkhlai Mining, Kerry Mining (UHG) Limited, Lotus Amsa Limited, Highline Holdings Limited, True Kind Limited, Anand & Co. Holding Limited and Botgo Limited (which held 1,241,150,586 Shares, 184,659,019 Shares, 106,304,907 Shares, 27,927,529 Shares, 13,782,736 Shares, 10,120,113 Shares, 11,811,657 Shares, 3,327,908 Shares, 5,051,079 Shares, 1,971,079 Shares, 11,819,579 Shares, 183,000,000 Shares, 300,000,000 Shares, 112,833,333 Shares, 47,000,000 Shares, 18,833,334 Shares, 47,000,000 Shares and 112,833,333 Shares, respectively, as at the Latest Practicable Date, representing approximately 33.50%, 4.98%, 2.87%, 0.75%, 0.37%, 0.27%, 0.32%, 0.09%, 0.14%, 0.05%, 0.32%, 4.94%, 8.10%, 3.05%, 1.27%, 0.51%, 1.27% and 3.05% of the total number of the existing Shares in issue, respectively) has irrevocably undertaken to the Company and the Joint Underwriters pursuant to the Irrevocable Undertakings that, each of them will, among other things, (a) take up its entitlement to the Rights Shares under the Rights Issue pursuant to the terms of the Rights Issue in respect of the Shares legally and beneficially owned (as the case may be) by it as at the date of the Irrevocable Undertaking or the Record Date (as the case may be); (b) lodge the PALs with the Registrar with full payment therefor in accordance with the Rights Issue and not to revoke the submission of such PALs; (c) not dispose of or transfer (directly or indirectly, including without limitation by the creation of any option, charge or encumbrance or rights over or in respect of) any of its rights to subscribe for Rights Shares (in the form of Rights Shares in nil-paid form) up to and including the last date for acceptance and payment in respect of provisional allotments under the Rights Issue; and (d) not dispose of or transfer (directly or indirectly, including without limitation by the creation of any option, charge or encumbrance or rights over or in respect of) its legal and beneficial interests (as the case may be) in any of the Shares owned by it as at the date of the respective Irrevocable Undertaking from the date of the respective Irrevocable Undertaking up to and including the Record Date.
The Rights Issue (other than the Rights Shares that will be provisionally allotted to the Irrevocable Undertaking Covenantors pursuant to the Irrevocable Undertakings) will be fully underwritten by the Joint Underwriters, on the terms and subject to the conditions of the Underwriting Agreement.
The purpose of this Prospectus is to provide you with, among other things, further information regarding the details of the Rights Issue.
RIGHTS ISSUE
Details of the Rights Issue are set out below:
Issue Statistics
Basis of the Rights Issue : Three Rights Shares for every two existing Shares held on the Record Date
Subscription Price : HK$0.28 per Rights Share
Number of Shares in issue on the Record Date : 3,705,036,500 Shares
Number of Rights Shares to be issued under the Rights Issue : 5,557,554,750 Rights Shares
Amount to be raised : Approximately HK$1,556 million, before estimated expenses
Joint Underwriters : BNP Paribas and J.P. Morgan Enlarged number of Shares in issue upon completion of the Rights
Issue : 9,262,591,250 Shares (assuming no new Shares (other than the Rights Shares) are allotted and issued on or before completion of the Rights Issue)
…
MMC: PROVISIONAL ALLOTMENT LETTER
XANADU MINES: NON RENOUNCEABLE RIGHTS ISSUE OFFER DOCUMENT
December 4, Xanadu Mines Ltd. (ASX:XAM) --
A 2 for 7 pro rata non-renounceable offer at 12.0 cents per share to raise approximately $8.4 million before costs, including the allocation of any shortfall.
The Offer opens on 9 December 2014 and closes at 5:00pm (AEDST) on 18 December 2014. Valid acceptances must be received before that time.
The Offer is not underwritten. The Directors reserve the right to offer any shortfall at a price no less than 12.0 cents per share within three months from the close of the Offer.
If you are an Eligible Shareholder, this is an important document that requires your immediate attention. It should be read in its entirety. If, after reading this document you have any questions about the securities being offered under it or any other matter, you should contact your stockbroker, solicitor, accountant or other professional adviser.
…
Aspire Mining Investor Presentation: Northern Rail Line - Unlocking Resources in Northern Mongolia and SW Siberia
UBS Coal and Iron Ore Forum Presentation, December 3, Aspire Mining Ltd. (ASX:AKM) --
Drilling Completed at Berkh Uul Coal Project, Mongolia
December 4 -- Viking Mines Limited (ASX: VKA, the "Company" or "Viking") advises that it has successfully completed its drilling program at the Company's 100% owned Berkh Uul coal project prior to the winter recess of the field season in northern Mongolia and well within budget.
The drilling program was completed by drilling contractors Ellehcor, with 1,064.5m drilled in 18 holes.
The drilling program, designed to infill and extend the existing drill coverage, commenced in the northeast of the licence area where there is pre-existing drilling within the confines of the current 38Mt resource. The drilling progressed to the south, targeting extensions to the deposit to add to the current resource.
The drilling tested the near surface (top 60m) shallow west dipping eastern limb of a broad south plunging synclinal structure, in which two main coal seams (Seams 1 and 2) are located. Holes were drilled using open hole precollars, with PQ diamond tails through the target coal bearing zones, on a nominal 500m line spacing.
All holes were down-hole surveyed for geophysical and directional data, with all drill collars surveyed to sub-metre accuracy. Geological logging was completed by Viking geologists under the supervision of RSC Consultants.
A total of 87 samples were collected from PQ drill core for coal analysis, samples are now at Bureau Veritas laboratory in Ulaanbaatar.
On receipt of assay results, the Company will provide a full discussion and analysis of the outcomes from the drilling program.
About the Berkh Uul Coal Project – Mongolia (Viking 100%)
Berkh Uul (see Figure 1 below) is located 400 km north of Ulaanbaatar in north-eastern Mongolia within the Orkhon-Selenge coal district and within 20km of the Russian border. The project is within 40km of rail access into Russian off-take markets, in close proximity to water, infrastructure and transport.
The deposit consists of shallow, consistent coal seams of high quality bituminous coal amenable to low strip ratio open pit mining.
Discussions with nearby cement works and power stations confirm a local industrial demand for unwashed Berkh Uul coal, due to its low ash and relatively high calorific value. To date four Memoranda of Understanding for the supply of coal from Berkh Uul have been signed with local industrial end-users.
MSE News for December 3: Top 20 +0.03% to 14,949.90, Turnover ₮18.9 Million
Ulaanbaatar, December 3 (MONTSAME) At the Stock Exchange trades on Wednesday, a total of 3,254 units of 19 JSCs were traded costing MNT 18 million 850 thousand and 755.00.
"APU" /950 units/, "Gobi" /768 units/, "State Department Store" /449 units/, "Mongol savkhi" /209 units/ and "Hai Bi Oil" /200 units/ were the most actively traded in terms of trading volume, in terms of trading value were "Gobi" (MNT five million 683 million and 300), "APU" (MNT three million 562 thousand and 500), "Material impex" (MNT two million 920 thousand and 500), "UB-BUK" (MNT two million and 142 thousand) and "Darkhan nekhii" (MNT one million and 785 thousand).
The total market capitalization was set at MNT one trillion 460 billion 375 million 873 thousand and 158. The Index of Top-20 JSCs was 14,949.90, increasing 4.56 units or 0.03% against the previous day.
Early morning non-cash USD rates: Khan (Buy ₮1,870 Sell ₮1,876), TDB (Buy ₮1,870 Sell ₮1,880), Golomt (Buy ₮1,870 Sell ₮1,876), XacBank (Buy ₮1,870 Sell ₮1,880), State Bank (Buy ₮1,863 Sell ₮1,880)
BoM MNT Rates: Wednesday, December 3 Close
| | 12/3 | 12/2 | 12/1 | 11/28 | 11/27 | 11/26 | 11/25 | 11/24 |
| USD | 1,875.59 | 1,875.74 | 1,888.95 | 1,895.17 | 1,895.32 | 1,892.79 | 1,890.43 | 1,887.83 |
| EUR | 2,320.67 | 2,336.14 | 2,346.55 | 2,357.69 | 2,371.52 | 2,360.12 | 2,348.39 | 2,340.44 |
| CNY | 305.08 | 305.07 | 307.16 | 308.38 | 308.72 | 308.34 | 307.85 | 307.63 |
| GBP | 2,933.52 | 2,947.26 | 2,948.27 | 2,972.38 | 2,996.69 | 2,973.95 | 2,962.11 | 2,956.15 |
| RUB | 34.24 | 36.95 | 36.45 | 38.43 | 39.76 | 40.78 | 42.14 | 42.37 |
December MNT vs USD, CNY Chart:
Mongolia Reports FDI Below $100 Million for Ninth Straight Month
By Michael Kohn
Dec. 3 (Bloomberg) -- Mongolia's foreign direct investment in Oct. was $95.3m, marking ninth consecutive month the county has recorded less than $100m, according to preliminary data released by central bank today.
* 2014 Jan.-Oct. FDI was $791.2m vs $1.84b yr ago, a 57% decline: Central bank
* 2014 current-account deficit at the end of Oct. was $1.1b vs $2.7b yr ago, a 59% decline: Statement
* Inflation for Oct. fell to 12.1% from 13% a month earlier, the lowest level since Nov. 2013 when Mongolia recorded an inflation rate of 12%: Central bank
(BFW)
BoM issues ₮103 billion 1-week bills, total outstanding +45.8% to ₮219.7 billion
December 3 (Bank of Mongolia) BoM issues 1 week bills worth MNT 103 billion at a weighted interest rate of 12.0 percent per annum /For previous auctions click here/
GoM ₮30 Billion 3-Year Bond Auction Cancelled Due to Lack of Bids
December 3 (BoM/MoF) Auction for 3 years maturity Government Bond was announced at face value of 30 billion MNT and each unit was worth 1 million MNT. Government Bond was not sold due to absence of both competitive and non-competitive bids.
GoM ₮30 Billion 52-Week Treasury Bills Sold at Discount, Average Yield 16.74%
December 3 (BoM/MoF) Auction for 52 weeks maturity Government Treasury bill was announced at face value of 30.0 billion MNT. Face value of 30.0 billion /out of 30.0 billion bid/ Government Treasury bill was sold at discounted price and with weighted average yield of 16.740%.
Public-Private Discussion Held on Expanding Non-Mineral Exports
Ulaanbaatar, December 3 (MONTSAME) On "Development and Trends of Non-Mineral Exports" discussion, held Wednesday at the Mongolian National Chamber of Commerce and Industry (CCI), officials addressed a necessity of an export diversification in Mongolia's international trade, noting the nine percent increase of minerals' export in the last two years.
The discussion, organized by the CCI, attracted businessmen and state officials. They discussed urgent issues in the export industry, technical and financial assistance to the export-oriented manufacturers, implementation of the Government program for promoting export, and a possibility to promote entrepreneurship under state guarantee.
The president of Mongolbank N.Zoljargal said the intensification of exports has been debated for many years. "It is still important to promote other economic spheres than the mining industry in these critical times of trade balance, although the minerals' sector performance is not satisfactory". Mineral products' export made up 97 percent of the total export in the peak of mining boom, and its stake went down to 88 percent now, he noted.
He also said it is crucial to determine a range of products prior to the discussion of export structures, and that the change needs to be supported by state policies. He noted that the "Mongolian brand" cashmere has low competitiveness on the global market because of deficient marketing. "We should improve a quality and range of products being exported under an adequate marketing", said Mr Zoljargal.
A department head of the Credit Guarantee Fund D.Batzogsokh noted that the guarantee sources should be increased and the international practices for investing in entrepreneurs must be introduced to our country. He also said the entrepreneurs in localities lack access to the loan guarantees because 64 percent of all guarantors are in Ulaanbaatar.
MP S.Demberel said the issue of "rainbow" economy has been discussed for many years. In the times of a decline in the minerals' sector, Mongolia has to widen a range of products to be exported. "Works have been conducted by the CCI on the economic diversification. As an outcome of a research, 30 products were named as efficient export-directed goods," he went on. The state is considering the establishment of a fund for export development, said the MP.
The business people shared opinions on the issues and supported the initiative by the CCI to provide consulting on non-mineral merchandise exports.
Mongolia politicians form super coalition
By Lucy Hornby
December 3 (FT) Mongolia's squabbling political parties have cast aside their differences and formed a super coalition to face up to a wave of economic problems amid the fall-off in commodity prices.
The ruling Democratic party and the Mongolian People's party, the main opposition party, have been joined by members of the Justice Coalition and Civil Will-Green party a month after the State Great Khural, the country's parliament, voted to remove the previous prime minister.
"Here you have the dream team that got all that stuff done the last time," said Alexander Molyneux (Mogi: I agree with the comments but Alex I think was a bad choice for a quote, he abandoned his three employees to carry the burden of the alleged crimes being investigated for, the three, who were both not at employed by SouthGobi at the time of the alleged crimes), former head of Mongolia's third-largest coal miner SouthGobi Resources, referring to the two parties' previous alliance which laid the groundwork for a foreign investment boom. "I think you could really fix Mongolia in 2015."
Top of the agenda for Saikhanbileg Chimed, the new prime minister, will be commissioning an evaluation of Mongolia's economy by international financial institutions, according to Dale Choi of Independent Mongolian Metals & Mining Research.
By Mr Choi's estimate three-fifths of debating time in parliament in the past two years has been spent arguing over appointments and posts, while plummeting prices of coal, copper and gold gutted Mongolia's state revenues, weakened the currency and caused currency reserves to drop sharply.
The downturn in the commodities cycle and Mongolia's constant policy shifts have scared away many of the international miners on which the landlocked country was counting to pursue its "third neighbour" policy of building ties with partners other than Russia and China, the giants to its north and south.
Mr Saikhanbileg pledged in a speech last week to remove barriers to mining and improve access to credit.
But the biggest test for the new government will be whether it can reach a deal with Rio Tinto to develop the second, underground phase of the Oyu Tolgoi copper and gold mine, which has dazzled Mongolia with its promised riches.
Part of the country's economic woes are the result of spending commitments made when politicians were flush with optimism for Oyu Tolgoi revenues. Meanwhile, a debt ceiling takes full effect next year. (Mogi: debt ceiling in Fiscal Stability Law came into effect from fiscal 2011, 50% for 2011, 60% for 2012, 50% for 2013, and 40% for 2014)
Even if a deal over Oyu Tolgoi is reached, low commodity prices may mean Rio is happy to keep the metal in the ground for the time being.
DP, MPP negotiations at a deadlock?
December 3 (GoGo Mongolia) Seems like PM cannot introduce the new cabinet structure today as MP D.Erdenebat was envisioning earlier.
AS we reported earlier parties entering the coalition of "solution" government have accepted the allocation of ministerial seats in accordance with their seat ratio at the parliament, resulting in 6 seats for DP, 5 seats for MPP, 3 for Justice Coalition and 1 seat for CWGP. But it seems that there is not enough ministerial seats as there are only 10 seats left excluding PM.
Regarding this there are talks that Ch.Saikhanbileg is to increase the number of ministries from 13 to 16 and having 20 ministers. This led that DP and MPP negotiations to negative sentiments as increasing the government structure cannot be supported by the 2015 Budget, which provisioned government structure with 13 ministries.
MPP expressed their stance on continuing with 13 ministries and shuffle some of the ministries into bigger structures. This way negotiations of DP and MPP have come to seemingly deadend, viewing from some tweets of MPs from MPP:
Yo.Otgonbayar: I participated in the negotiations not to enter the cabinet. There is no need to negotiate if no principles are to be met.
J.Enkhbayar: Seems like negotiation is facing difficulties. DP is to increase cabinet structure, MPP is opposing...
MP N.Nomtoibayar is to hold press conference at 1PM today.
MPP rejects DP push to increase ministries to 16 from 13
Ulaanbaatar, Dec 3 (GoGo Mongolia) -- N.Nomtoibayar held press conference on DP and MPP negotiations that may have come to dead end and took a break. They will be hold meeting later in the afternoon.
MPP didn't approve DP`s suggestion to increase the number of ministries to 16 and have 19 ministers. MPP expressed their stance on continuing with 13 ministries in accordance with the 2015 Budget, which provisioned government structure with 13 ministries.
He reported that MPP suggested reshuffling of some ministries by splitting and merging the Ministry of Culture, Sport and Tourism into functional ministries and merging the Ministry of Labor into Ministry of Social Welfare and keeping the number of ministries as was provisioned into the 2015 budget. Number of the ministers should be allocated in accordance with number of the members that have seats in State Great Khural.
Therefore, DP takes 7.6, MPP 5.7, Justice Coalition 2.4. DP has 8, MPP has 6, and Justice Coalition has 2 minister seats. MP N.Nomtoibayar reported that during the negotiation meeting neither side discussed on how to allocate ministries to parties and coalitions.
Further on question about CWGP he responded: "CWGP has only 2 seats at parliament, they don't even have group, but this issue is up to DP.
Parliament election is to start in 1.6 years. Main issue is what we can do now to intensify economy in such a short period of time with collaborative efforts. MPP group has planned to focus on agricultural sector."
Standing Committee backs World Bank's "Sustainable Livelihood-3" project
Ulaanbaatar, December 3 (MONTSAME) At its meeting on Wednesday, the parliamentary Standing committee on budget backed to negotiate the "Sustainable livelihood-3" project. which is ready for implementation by the World Bank under a soft loan of the International Development Association (IDA).
But the Standing committee on economy did not back a credit agreement of the project. Thus, the Standing committee on security and foreign policy discussed a matter on considering the draft project, in accordance with the law on regime of parliamentary session. A report on the draft initiator was presented by S.Oyun MP, the Acting Minister of Environment and Green Development.
In frames of the "Sustainable livelihood-3" project, activities will be realized to completely introduce methods and mechanisms of the project's 1st and 2nd series, to support a realization of the budget law in localities, to render necessary technical assistance for improving skills, to scrutinize an implementation of the local development fund, to encourage good implementation of works, and to implement the budget management and monitoring until 2017.
The project's financing of USD 23.5 million will be issued by the IDA, a major part of the money will be spent for making investments to localities. The Swiss Agency for Development and Cooperation (SDC) has expressed a readiness to finance the project with USD 11.4 million.
The soft loan has the interest of 1.25% per year. The first five years will be freed from the basic payment, the whole loan will be repaid in 20 years.
After some inquiries, a majority of the Standing committee backed a proposal on setting up a unit at the Ministry of Finance for the project's monitoring and credit policy. They also approved the project's finance agreement, and the Standing committees' notes on proposals and conclusions will be conveyed to the cabinet.
New Russian-Mongolian JV to develop Asgat silver deposit in Bayan-Ulgii
By S. Bold-Erdene
December 2 (Mongolian Mining Journal) A joint venture between Erdenes Mongol and RosTec, both State-owned companies, will be formed to exploit the Asgat silver deposit, EM Executive Director O.Sainbuyan has revealed. The licences of the strategic deposit are owned by MongolRosTsvetmet, a Russian-Mongolian joint venture, which decided that a joint company, 51 per cent owned by Mongolia and 49 per cent by Russia, was needed to exploit the reserves.
Work on feasibility studies and finding ways of financing the project will commence after the establishment of the new company. The reserves of Asgat have been estimated at 7,300 tonnes.
South Dakota Professor Works to Save Mongolian Water Source
December 1 (NewsCenter 1) A professor at the South Dakota School of Mines and Technology is working to save a water source in Mongolia.
Dr. Scott Kenner, Ph.D. is working with the Mongolian government to develop a water resource management plan to provide for millions of Mongolians.
The country's Tuul River Basin is in danger of depletion from both economic and environmental factors.
Along with securing water supplies, Kenner is also training Mongolian college students, empowering them to work with leaders to adopt sustainable practices for the country.
Hope is Contagious in Mongolia
By Lindsay Steele
2 December (Mission Network News) Mongolia (RBD) — The church in Mongolia has seen spectacular growth since 1990 when the country moved from communism to a democratic form of government. At the time, there were only four known Christians in the nation of 3 million.
By 2000, the number of believers had increased to nearly 10,000, and a decade later it reached 40,000. The new believers gathering in some 600 churches–300 in the capital city of Ulaanbaatar and 300 in the provinces.
Today, the growth continues. Mongolia has the eighth-fastest growing church in the world, although Operation World indicates evangelicals still represent only about 1.2% of the population.
Christian radio is playing an increasingly important role in the growth.
"Through radio, thousands of people now can hear the truth. And in this [once-communist] country–nearly void of religious influence for decades, people are listening," said Sam Joseph, a Reach Beyond (formerly HCJB Global) radio planter who joined the mission with his wife, Brooke, earlier this year.
"I think the spiritual void left by communism has left people curious about Christianity," he added. "I believe that hope is contagious, and many Mongolian people are finding that Christ is the greatest hope of all."
The Josephs, along with John Brewer, engineering director of the Asia Pacific Region, worked with partner FEBC-Mongolia (Far East Broadcasting Company) and local churches in late October to put a pair of 24-hour-a-day FM community stations on the air just two days apart.
Both outlets rebroadcast programing from the original Christian FM station launched by FEBC in 2001 with help from Reach Beyond engineers.
The latest partnership was birthed as a result of a series of meetings with the Asia by Media (formerly Asia by Radio) group in early 2014.
"I asked our partner to share his vision for FEBC-Mongolia," said Asia Pacific Executive Director Ty Stakes. "It was an extremely exciting conversation. His vision and strategy ideas fit so clearly with ours, I knew it was more than a random meeting.
In a very short time, we were discussing how we could join with them to help them fulfill their radio-planting vision for Mongolia, and we made an agreement."
Joseph said the installation team overcame a plethora of obstacles, including a lack of advance planning and difficult weather conditions.
"If God were not working in our favor, there is no way that those stations would be on air today," Joseph noted. "We clearly saw the passion and love for the lost Mongolian people motivating the pastors we worked with, and they slaved to see the work completed.
God also protected us from potential dangers working at height in frigid weather, and kept us healthy in spite of unusual foods and exhaustion."
Local partners went beyond the call, working long hours to make the stations a reality. "The partner from FEBC is one of the most driven workers I've ever labored with, welding until 2 a.m. one day, freezing on a tower for five hours another day," Joseph recounted.
"The main pastor stayed up until 4 a.m. on his birthday to finish getting the studio ready for installation on time.
"I have no doubt that the reason we were able to finish was largely due to their dedication and push-through attitude," he said.
Brooke Joseph also helped throughout the visit, such as documenting the trip by taking and organizing photos and even playing piano during the on-air ceremony at one of the new stations.
The head of FEBC-Mongolia said the programming on the new stations is aimed primarily at non-Christians. "Our partners are very eager to reach unsaved Mongolians, and their broadcasts reflect that eagerness," Sam Joseph noted.
"The programming is pre-evangelistic with popular, clean, secular music and some talk radio interspersed with biblical truth and directions for learning more."
"One unique thing they do in programming is provide all sorts of developmental and educational content on the stations, and then create home groups for seekers who meet regularly for nine months to study together," said Stakes.
"They study the content more deeply, and also look into spiritual truth together. It's quite effective, and more than 200 people [gather to hear the] station at a time in the capital.
The call-in programs are apologetic in nature, attracting great interest by local people who do not know Jesus yet. Exciting stuff!"
Mongolia's nearly treeless terrain is conducive to sending the FM signal long distances, and the Asia Pacific staff looks forward to helping establish many more stations in the future.
"Our plans are to continue to partner with them in coming years, expanding their reach to every provincial capital city in the country," Stakes added. Mongolia has 21 provinces divided into 329 districts.
Pray that FEBC will help influence the spread of Christianity in Mongolia.
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