Monday, January 26, 2015

[Gatsuurt now strategic; Lippo takes 34% in HAR; SouthGobi 3 case postponed; MNT takes a breather; and Nalaikh, Baganuur to split from UB]

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Monday, January 26, 2015

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Overseas Market

CG closed +0.6% Friday to C$6.68

Centerra Gold's Gatsuurt project gains 'strategic deposit' Mongolian status

TORONTO, January 23 ( – Canadian gold producer Centerra Gold's Gatsuurt project, located 35 km from its operating Boroo mine, in Mongolia, had been designated as a 'mineral deposit of strategic importance' by the Mongolian Parliament.

The project milestone paved the way for Centerra to move forward within the country's Water and Forest Law, which was the reason the Gatsuurt project remained under care and maintenance owing to the law prohibiting mining and exploration activities in water basin and forest areas.

Parliament's approval of the list of mineral deposits of 'strategic importance' for the Mongolian government opened the door for Centerra to resume exploration on the property.

It also allowed Mongolia to acquire up to a 34% interest in the project.

TSX-listed Centerra, whose flagship asset is the Kumtor gold mine, in Kyrgyzstan, said it would continue its discussions with government regarding project development as well as the level of Mongolian state ownership.

The company noted that further development of the project would also hinge on receiving Parliamentary approval of the Mongolia's state ownership as well as all required approvals and regulatory commissioning from the Mongolian government.

"I am very pleased that Parliament has declared Gatsuurt as a Project of strategic importance to Mongolia. Centerra has had very productive discussions with the government during the past year which we expect will continue as we finalise the permits and agreements that need to be put in place prior to Gatsuurt beginning production.

"We have operated the Boroo mine for more than ten years and look forward to developing the Gatsuurt project which we expect will allow us to continue to operate in Mongolia for many more years to come," Centerra president and CEO Ian Atkinson said.

The Gatsuurt project had estimated mineral reserves as at December 31, 2013, of 17.1-million tonnes at an average grade of 2.9 g/t of gold, containing about 1.6-million ounces of the yellow metal when using a cut-off grade of 1.4 g/t.

Provided that the final approvals and regulatory commissioning were received for the project, the Centerra said it planned to mine the ore at Gatsuurt and truck it to the existing Boroo mill to be processed. Under the current plan for Gatsuurt, the company expected to process about 3.6-million tonnes of carbon-in-pulp ore, with an average grade of 2.86 g/t gold through the existing Boroo facility in the first two-and-a-half operating years of the project.

During this time, Centerra planned to add a BIOX facility to the existing Boroo mill, which would be used to process the remaining BIOX ores totalling about 13.5-million tonnes with an average grade of 2.92 g/t.

Centerra's TSX-listed stock traded slightly higher on Friday, gaining just under two per cent before noon to change hands at C$6.77 apiece.

Link to article

Link to CG release


Centerra a step closer to moving gold project in Mongolia, January 23

Centerra says Mongolian parliament decision advances plan for gold projectThe Canadian Press, January 23


Mongolia's 'Sutton Hoo' burial mountain threatened by Gatsuurt mine

Ulan Bator, January 21 (Digital Journal) - A bid by a Canadian gold mining company to strip-mine part of northern Mongolia's protected Noyon Mountain Forest which includes the country's cultural equivalent to England's Sutton Hoo site or Egypt's pyramids is causing outrage in the country.

The plan to strip-mine the beautiful northern Noyon mountains, where some 20 graves of senior Asian Hun (also called by the Chinese name 'Xiongnu'), dating from the Third Century B.C., are to be found, would mean the country would lose an iconic burial, similar to England's Sutton Hoo as well as a protected area of natural beauty and key habitiat, of snow leopards and other unique wildlife according to an Avaaz release.

(The famous Sutton Hoo ship burials where leaders of the Anglo-Saxon royalty were buried is in East Anglia, England). It is clearly unimaginable that mining would be allowed at such a key site, or for that matter, that Egypt would allow the pyramids to be bulldozed.

The Gatsuurt Mine would, it is reported, destroy these tombs which caused such a sensation when they were discovered in the 1920s.

As water had seeped into some of them clothing, carpets, as well as other materials which are usually destroyed by the passage of time could be salvaged, as describes (see photos on the site).

The people in question were the Asian Huns, known by many names by Chinese chroniclers, including „"Hun-Yu", „"Xianrun" and „Xiongnu", the last of which is most widespread. Encyclopaedia Iranica describes the Huns here.

So, just as it would be unthinkable that Sweden or Norway would allow Viking grave sites (and those of kings) to be dug up, in the case of Mongolia, it is not that clear. The South China Morning Post wrote positively about the likelihood of the country opening up more mining opportunities and mentioned the Gatsuurt proposal, describing it like this:

Canadian mining company Centerra Gold said in January that it was "quite optimistic" it would be able to get back to work soon on its Gatsuurt exploration project in Mongolia, which has been suspended since 2010. Gatsuurt has been included on a list of mineral deposits of "strategic importance" for the Mongolian government to consider. Centerra is hopeful that parliament will approve the list this year, opening the door for it to resume exploration on the property.

The proposal is to create an open-pit mine in the pristine forest by the Canadian gold-mining corporation, Centerra. This move has in the past been cited by Mining Watch Canada, but apparently, to little effect. A list of letters written by Mining Watch can be seen here.

The impact on the country's riverine systems will clearly be massive, as the Gatsuurt River is a tributary of the great Selenga River, considered sacred by many Mongolians, which also flows into Russia and environmental degradation of the river could be disastrous, as Eugene Simonov, Coordinator of Rivers Without Boundaries International Coalition warns.

Mongolia is not the only place Centerra appear to be in trouble over environmental concerns. In Kyrgyzstan, the mine operates the only open-pit mine on a glacier, which could threaten that nation's water reserves, according to Al Jazeera.

The case is pretty straightforward. Here is a developing country with financial problems, which could bow to pressure from rich corporations wanting to make a fast buck. If Mongolia does bow to the financial lure of gold, it will be selling out a key part of its heritage. If it resists, how can it build its economy?

Link to article


HAR closed Friday +33.33% to A$0.02

Lippo Group Increases Stake in Haranga to 33.58% Following Rights Issue

January 21 (Cover Mongolia) Lippo Group, through its subsidiary Golden Rain Holdings, has substantially increased its stake to 33.58% in Haranga Resources (ASX:HAR) following a non-renounceable rights issue, underwritten by Golden Rain. Lippo had a 19.99% stake following a private placement which increased its stake from 13.43% to 19.99% on December 8, 2014.

ASX rules state if a shareholder reaches 20% in a listed stock, it is obligated to lodge a formal takeover bid. As the means to cross the 20% mark was an underwriting agreement, it is yet unknown if Lippo intends to, or will be forced to do so by Australian Securities & Investment Commission (ASIC).

HAR was last trading at A$0.013, on Friday.      

Link to article


Haranga: Metallurgical Test Results of Selenge Iron Ore Project

January 21 -- Haranga Resources Limited ("the Company") is pleased to announce the completion of the metallurgical work on samples taken from the Company's Selenge iron ore project ("the Project")


Ø  Total of 400 kg of samples representing the iron ore of Bayantsogt clustered deposit were the subject of metallurgical test works.

Ø  The metallurgical test results demonstrated a magnetite concentrate of marketable specification with high iron grade and low impurities suitable for Chinese steel producers.

Summary Results of the Two-stage Grinding Wet Magnetic Separation Test (P80 250μm and P80 75 μm)

Deposit names

 Final stage Mass Yield, %

 Grade, Fe%

 Final stage Recovery, %  

 Dund Bulag








Summary Results on the Quality and Impurities in the Product of Iron Concentrate

Deposit names / JORC Measured & Indicated Resource***

 Fe, %

 SiO2, %

 S, %

 Al2O3, %

 P, %  

 Dund Bulag (199.9Mln tons)






 Bayantsogt (35.7Mln tons)






The Company is now in the final stages of developing and optimizing a small scale production scenario.

Link to full release


Mongolia Open to Talks With Rio Tinto, President Says

January 22 (Bloomberg) Mongolian President Tsakhia Elbegdorj talks about the country's dispute with Rio Tinto Group over developing one of the world's largest copper and gold mines, and Mongolia's debt. He speaks with Bloomberg's Matthew Campbell at the World Economic Forum's annual meeting in Davos. 

Link to interview


TRQ closed -2.78%, -2.79% to US$2.80, C$3.48

Turquoise Hill Investor Presentation: Oyu Tolgoi -  a world-class copper and gold mine

By Jeff Tygesen, CEO, Turquoise Hill Resources (NYSE:TRQ, TSX:TRQ) at CIBC Whistler Institutional Investor Conference, January 21, 2014

Link to preso


Mogi: the trial was postponed to 28 January. 1878 closed +2.74% Friday to HK$4.13

Justin Kapla's court hearing postponed to 29 February

Ulaanbaatar, Jan 22 ( CEO of SouthGobi Sands LLC, Justin Kapla`s primary court hearing started in the morning, but it is reported to be postponed. 

State Prosecutor requested participation of investigators, while defendant requested participation of investigators and witnesses. Moreover, Justin Kapla requested to add more translators. 

Counsellor of SouthGobi Sands LLC, Tserenjav was not present at the hearing, due to work in countryside. Thus, hearing was postponed to 29th of February, 2015 at 09am. 

Today, an official from Embassy of US has come to the hearing for observation. 

Justin Kapla, US national, is being charged with tax evasions worth of MNT 35 billion.

Link to article


Former management of South Gobi Sands asked to increase the number of, January 22


Xanadu to Transition to New Managing Director & CEO

January 22 -- Xanadu Mines Ltd (ASX: XAM – "Xanadu") announces that Managing Director and Chief Executive Officer, Mr George Lloyd, will stand down from his role with effect from 1 July 2015. An international search has commenced to find a suitably qualified mining executive to lead the Company through its next phase of development.

Mr Lloyd has successfully restructured and re-positioned Xanadu, including managing the acquisition of its two porphyry copper-gold projects, Kharmagtai and Oyut Ulaan. He has also arranged over US$30 million of corporate and project funding in challenging capital market conditions to advance these projects. These achievements, including exploration success at both projects, have laid the foundations for significant value creation through further exploration success and project development.

Xanadu's Chairman, Mark Wheatley, commented: "The Board would like to thank George for his efforts. We greatly appreciate his drive and professionalism. Xanadu now has a clean, well-funded balance sheet with two exciting projects to develop. The Board will work with George over the coming months to continue to execute Xanadu's strategy including the transition to new leadership. The focus on our two projects requires strong technical and operating experience and this will guide our search for George's replacement."

Mr Lloyd said, ''I am proud of our achievements at Xanadu and am confident that the Company is on track to become a significant Asian copper and gold producer. I am looking forward to effecting a seamless transition to a new CEO for Xanadu and then taking on new challenges in the global corporate sector."

Link to release


Guildford Coal: Working Capital Facility and Update on Entitlement Offer

January 22, Guildford Coal Limited (ASX:GUF) --

Working Capital Facility

Further to the announcement on 19 December 2014 and as further detailed in the Target's Statement dated 24 December 2014 and Supplementary Target's Statement dated 5 January 2015, Guildford Coal Limited (Guildford) (ASX:GUF) is pleased to announce that negotiations with Noble Resources International Pte. Ltd. (Noble) regarding an additional US$7 million working capital facility have concluded, long form documents have been executed and Guildford has issued a draw down notice in respect of the entire US$7 million facility.

Guildford will apply approximately US$3 million of the funds received from this additional working capital facility to repay all amounts outstanding to Noble under the Fuel Exclusivity Agreement dated 14 November 2013. The remainder of the funds will support the current ramp up of coal production at the Baruun Noyon Uul (BNU) Mine in Mongolia.

It is a condition of the Noble finance package that Mr Craig Ransley continues to hold a position as a director of Guildford.

12600 Project

Guildford has also exercised its option to acquire the 12600 exploration lease, which is adjacent to the BNU Mine in Mongolia, from Noble and will, subject to certain conditions and exceptions, prioritise bringing this project into commercial production. The acquisition of this lease will result in operational synergies with the adjacent BNU Mine as the coal seams are contiguous.

Part of the purchase price for the 12600 project is a payment of US$6 million which is due at the end of May 2015. Guildford anticipates that it will meet this payment in the ordinary course. If Guildford has not brought the 12600 project into commercial production by 8 May 2018, then Guildford has the option to retain the tenement and pay Noble 5 annual payments of US$11.8 million or return the tenement to Noble.

OCP Deferment of Coupon

Guildford would also like to advise that OCP Asia (Hong Kong) Limited (OCP) has formally agreed to defer interest payments totalling approximately US$3.9 million, which were due on 8 January 2015 pursuant to the Note Trust Deed, to 8 July 2015 which will incur a 2% deferral fee on the face value of the notes.

Entitlement Offer

As announced on 5 January 2015, and in addition to the new working capital facility from Noble, Guildford intends to raise a further A$7 million via a pro-rata renounceable entitlement offer on the basis of 1 new share for every 4.85 shares, at an issue price of $0.037 (Entitlement Offer).

The net proceeds of the Entitlement Offer will be used to support the current ramp up of coal production at the BNU Mine in Mongolia and for working capital purposes.

Maiora Asset Management Pte Ltd, Guildford's largest shareholder, has communicated their intention to participate in the Entitlement Offer. Guildford is also considering proposals to partially underwrite the Entitlement Offer for up to A$5 million. Between Maiora's support and the underwriting proposals, total indicative commitments for the Entitlement Offer are up to approximately A$6 million. Documentation explaining the Entitlement Offer in more detail is currently being prepared and Guildford expects the opening date of the Entitlement Offer will occur during the week starting 2 February 2015.

Ongoing Funding Requirements

Together with the net proceeds from the new Noble working capital facility and the Entitlement Offer, Guildford intends to fund production at the BNU Mine from revenues received from coal sales. Guildford expects to execute a "pre-pay" (funding) facility in the short term which will assist with cash flow management during the early stages of production and sales.

Link to release


Mogi: yet another casualty

Newera Announces Withdrawal from Ulaan Tolgoi Coal JV in Mongolia - Quarterly

January 23, Newera Resources Ltd. (ASX:NRU) --

Ulaan Tolgoi project

Ulaan Tolgoi project On 5 December 2014 the Company announced that following a review of recent exploration within the Ulaan Tolgoi project and armed with the knowledge that despite the identification of interpreted potentially coal bearing sub-basins and the more recent interpretation that potential mineral bearing intrusions may exist below significant cover in the northern sector of the licence, Newera acknowledged at that point, that any future exploration within the Ulaan Tolgoi licence, would remain high risk green fields exploration.

In addition, it was noted that in order to maintain the Ulaan Tolgoi Joint Venture, Newera was facing a significant annual Statutory Licence fee immediately payable to the Mongolian Department and a long period of inactivity over the harsh Mongolian winter.

Hence, Newera determined that in this era of capital scarcity, Newera's interests would be better served by preserving critical capital for new project acquisitions or new joint ventures.

To that end, Newera advised that it has issued a formal letter of notice to its Ulaan Tolgoi Joint Venture partner, advising that Newera has withdrawn from the Ulaan Tolgoi Joint Venture, effective immediately.

Link to full report


Draig Resources Pursues Possible Sale of Mongolia Licenses - Quarterly

January 23, Draig Resources Ltd. (ASX:DRG) --


·         Exploration licences 13581X and 13879X were maintained; and

·         Cash balance of $2.085 million at the end of the quarter.


Exploration licenses 13581X and 13879X continued to be maintained throughout the reporting period.

The possible sale of these licenses to prospective purchasers was pursued during this quarter.


Name of Licence


Licence number

Interest at Quarter End

Change in Interest during Quarter


Ovorhangay, Mongolia



No change

Urtiin Am

Ovorhangay, Mongolia



No change


Administration expenditure for the quarter was $0.171 million.

The cash balance as of 31 December 2014 was $2.085 million and there was no debt.

Other potential opportunities for the company continued to be analysed during the quarter.

Link to full report

Link to Quarterly Cashflow Report


MIBG: Junior Mining in Focus (ERD & KCC)

January 21 (MIBG) In this week edition of MIBG's market analysis we will focus on two of Mongolia's leading junior mining companies. Despite mounting economic and market challenges these two companies, Erdene Resource Development Corp (TSX:ERD) and Kincora Copper Limited (TSX.V:KCC), have continued to make progress both geologically and legally.

Erdene Resource Development Corporation (TSX:ERD)

We begin by looking at Erdene, a well-established entity within Mongolia's mining space. Erdene was founded in 2002 by a team of seasoned geologists including the current CEO, Mr. Peter Akerley who has been involved in Mongolia since the mid '90's. They have enjoyed in-country strategic partnerships with some of the worlds preeminent mining companies, including Xstrata, Teck Resources, and Gallant Minerals.

More recently, Erdene has shifted its attention to a portfolio of tenements in South Western Mongolia. These tenements are home to Erdene's wholly owned Zuun Mod molybdenum project, Khuvyn Khar copper porphyry target, and the Altan Nar gold prospect and it's neighboring gold targets.

Zuun Mod remains an elusive asset due to market economics, specifically the price of steel, which is the underlying driver for molybdenum. That said, prospective pricing for steel and moly will likely see this become a valuable asset through development or through sale with a royalty contingent.

In close proximity to Zuun Mod are Erdene's copper interests, Khuvyn Khar. The projects geology has attracted the attention of international mining companies, including Teck Resources who signed a strategic partnership in 2013 for the continued exploration of the project and the continued exploration of a pipeline of projects in the region.

However, the prize of Erdene's portfolio remains its prospective gold targets including and surrounding the Altan Nar project. Altan Nar was first discovered in late 2011 and has continued to deliver encouraging results year after year. Most assessments of Erdene, and likewise valuations of the company's potential are based solely on the economics of this project. MIBG most recently updated our Equity Research on Erdene in April 2013. At that time we placed an indicative value on the company of C$0.31 per share, for a market capitalization or C$7.52m.

Last week, Erdene released more encouraging results from Altan Nar. Including an increase in width and grade encountered at the northern edge of the Discovery Zone South ("DZS") in hole TND-69, including: 51 m of 2.5 g/t gold equivalent ("eq."), 7 m and 3 m zones of greater than 7 g/t gold eq. Gold values up to 11.8 g/t over 1 m, and strong lead and silver values, up to 6.9% lead and 196 g/t silver over 1 m.

Since discovery, Erdene has identified 18 mineralized gold, silver, lead and zinc target areas within a 5.6 by 1.5 km mineralized corridor. Two of the early discoveries, the Discovery Zone ("DZ") and UN, have been the subject of recent detailed work and were the focus of the Q4 2014 resource-drilling program. These two intensely mineralized zones have undergone previous drilling and trenching programs that have confirmed the presence of a high-grade and near-surface mineralized system.

The program, together with previous exploration drilling, focused on defining these zones to a depth amenable to open pit mining, and providing sufficient data to calculate a NI 43-101 compliant mineral resource estimate. Samples from the remaining holes completed as part of the resource delineation program are currently being analyzed at the SGS laboratory in Mongolia. Thus far, the results of this recent release have supported the company's share price, as can be seen in the below stock chart. Erdene's market movements can also be seen in MIBG's market cap monitor at the bottom of this weekly report.

Erdene Resource Development Corp. (TSX:ERD) – 12 Month Chart

Given Erdene's ability to continue delivering strong geological results during times of intense market volatility we expect that they will continue to be one of the strongest positioned juniors in Mongolia. That said, the path forward for Mongolia is no less clear today than it was 6 months ago. The return of capital will likely be driven by catalyst events domestically and internationally, including: regional economics, strengthening commodities markets, and a boost in sentiment from the retail market, which will provide a foundation for Mongolian equities.

Kincora Copper Limited (TSX.V:KCC)

The second junior mining company in review this week is Kincora Copper. Kincora originated through a series of transactions involving Origo Partners PLC (LSE:OPP). Origo positioned itself as an avenue for foreign investors to gain exposure to Mongolia's vast mineral wealth. As with so many other vehicles pursuing the same mandate unaccommodating market conditions interrupted their plans.

Today, Kincora is one of the remaining portfolio positions held by Origo in Mongolia. However, the company has taken on a life of it's own. Through continued positive exploration and strong management Kincora has established a strong portfolio of copper targets including their flagship project, Bronze Fox – formerly held and coveted by Ivanhoe Mines.

However, Kincora's advance has not been without hardship. Kincora's CEO, Mr. Sam Spring, likely knows better than most executives the challenges that one can face while operating in a frontier market. While Kincora holds the Bronze Fox tenement without dispute, they did have two surrounding license revoked in 2013 as part of the 106-license dispute. This resulted in C$6,952,000 impairment in their September 2013 financial statements. Mr. Spring has spent the last two years navigating policy and working directly with Government stakeholders in order to resolve this issue and to identify an amicable outcome for his shareholders.

After two years of uncertainty, Kincora will soon know the conclusion of their dispute in an equitable manner next month with the final tender of the revoked licenses due on February 11th. The tender process could include up to two competitive tender's, with the first taking place on January 9th, including those previously held by Kincora.

Kincora's press release dated January 12th 2015 provided the following context:

Following due process and as specified in the competitive selection process, a second and final tender to reissue the revoked licenses will take place on February 11th at which time the licenses will either be reissued to the former license holder (if they participate in the tender process) as new with a full 12 year term or see the former license holders have their previously incurred expenses (the agreed "threshold price") reimbursed as cash compensation by the successful bidder.

On January 9th, a further five licenses were put to a second and final tender, and following no third party bids will be returned to the former license holders subject certain administration matters to be undertaken by MRAM. To date 23 impacted licenses for an estimated cumulative US$2.49 million of expenditure has been successfully retendered, with 16 licenses returned to the former holders, 3 remaining property of the State following no bids and 4 acquired by third parties.

This resulting outcome for Kincora will be positive. While the prospective value of the revoked licenses may represent a larger valuation than the C$6,952,000 impairment in their September 2013 financial statements, the reimbursement of incurred expenses could also deliver a surge in value to the company. This is further supported by the fact that Bronze Fox remains Kincora's flagship project and provides the foundation for any valuations from the market. As a result, the company's share performance, as can be seen below over the past 12 months could benefit from either outcome. Kincora's market movements can also be seen in MIBG's market cap monitor at the bottom of this weekly report.

Kincora Copper Limited (TSX.V:KCC) – 12 Month Chart

Given Kincora's capital raising success in early 2014, where the company raised C$5m during one of the most difficult capital raising environments in recent memory we expect investors to revisit Kincora's story following the outcome of the February 11th tender. As with our review of Erdene, it is difficult to suggest when such capital inflows may occur but we do believe that Kincora is well positioned to receive such support from the market.

Link to post


Khan Investment December 2014 Update: KMEF -4.68% (December), -12.09% (2014)

Rational Optimism for Robust Recovery 

January 23 (Khan Investment Management) 2014 failed to live up to expectations despite attempts by the Government of Mongolia (GOM) to restore investor confidence. Compounded by collapsing commodity prices, the domestic economic situation continued to deteriorate. A fragile coalition government, lacking unity and effective leadership, struggled to make political headway and failed to deliver on commitments, as external factors beyond Mongolia's control exerted an increasing toll. A looming economic crisis led to a change of government less than 5 weeks before year end – a key positive outcome of 2014. 

December performance for the Khan Mongolia Equity Fund (KMEF) was -4.68%. 

2014 calendar year performance for the KMEF was -12.09%.


(Data source: Bloomberg) 

Despite poor economic indicators, major geopolitical events of 2014 and a recent shakeup of Mongolia's government lead us to believe there is cause for rational optimism of a robust recovery. Throughout the year, Mongolia greatly improved relations with both its neighbours and introduced new favourable legislation to support its vital mining sector. Under new leadership committed to economic recovery and growth and central to China's growing trade and development ambitions and strengthening ties with Russia, we see 2014 as Mongolia's fundamental turning point from the bottom. 

Mongolia's mineral and resource sector remains oversold and offers incredible entry at current valuations. A number of our portfolio companies are expected to achieve major milestones over the coming months, including maiden resource announcements for flagship projects of both Xanadu Mines Ltd. (XAM:AU) and Erdene Resource Development. (ERD:CN) The portfolio is well positioned to benefit from any improvement in investor sentiment towards the Country or commodity sector. Supported by robust fundamentals, we strongly believe our longer-term investment thesis is more compelling than ever.

·         2014 Economic Review in Numbers

·         Mongolia's new Prime Minister & Grand Coalition of "National Unity"

·         China's escalating trade & development ambitions target Mongolia

·         Mongolia Key Developments

o    Chinese "narrow rail" gauge approved

o    Credit Suisse lends USD 300M to Development Bank of Mongolia

o    Mongolia issues new Mining Exploration Licences

o    Cabinet slashes budget in first move

·         Tavan Tolgoi Update

·         Oyu Tolgoi Update

·         KMEF Performance Figures

·         KMEF Portfolio Update

·         Company Briefs

o    Aspire announces multiple milestones

o    Mongolia Mining Corp (MMC) secures 51% TT coup

o    Xanadu discovers new porphyry system at Kharmagtai

o    Kincora's CAD 6.9M impairment likely back on balance sheet soon

o    Erdene's "best to date" gold discoveries advance Altan Nar feasibility

o    Guildford Coal exporting and increasing capacity

·         Xanadu AUD 13.6M Private Placement approved

·         Concluding Comments


Link to full letter


Arshad Sayed: TT a deeply disappointing decision for Peabody

By D.Bekhbayar 

January 22 (Mongolian Economy) Mongolian Economy magazine interviewed President of Peabody Energy, India & Mongolia, Mr. Arshad Sayed. This is his first interview with the press since Peabody Energy lost the Mongolian government's tender for the Tavan Tolgoi coal deposit to a group consisting of Energy Resources LLC, Shenhua Energy, and Sumitomo Corp. 

In December 2014, Peabody Energy lost its bid for the Tavan Tolgoi coal deposit. There had been an expectation in the community that Peabody's bid would be selected in the tender, as Peabody has many years of experience operating in Mongolia. As a representative of Peabody in Mongolia, what is your opinion of the selection process? 

I think the decision was deeply disappointing for Peabody, because Peabody has been in Mongolia for seven years pursuing to cooperate in Tavan Tolgoi project. I think it is also going to be disappointing for any western investors who are considering to invest in Mongolia in the field of new technology, new processes, new knowledge, and to bring in world class standards in safety and environment. 

According to Tavan Tolgoi's government working group, Peabody's proposal was submitted alone, without any international or domestic partners. This was seen as a downside in the selection process, as a consortium of three companies ultimately won the tender. Why did Peabody make this decision to not have any joint partnerships in this tender? 

I think it's not appropriate to respond in the press about what was a confidential tender proposal. I'm surprised that the government is choosing to say this publically and do these things. I don't think it's good to do that for Peabody, but I can share something that's open and known for everybody. Since 2010, Peabody has done its best to participate, to come prepared and respond to the government of Mongolia's every desire, rule, and changes that they've had. You've had three different governments since 2010, and in each one of them Peabody has responded the best that we could. Clearly Peabody had met the requirements of the government in 2010, that's why it was selected to participate as one of the six [bidders, in an earlier, later scrapped tender for Tavan Tolgoi. Ed.]; from the six it was narrowed down to three; and then Peabody was asked to participate with the Russian and Chinese companies. But the result was withdrawn by the National Security Council. And that was in 2011. Then in late 2013, we were asked to have discussions with ETT [Erdenes Tavan Tolgoi] and with Shenhua for cooperating in TT project; and we did that in the first half of 2014, where we spent six months having negotiations with the parties. Even though the process was running effectively where the parties were about to sign a partnership framework principles memorandum, suddenly it is halted by the government. Then again we had a change in the latter part of the year, with the government changing. Again the new terms and conditions were given with the Government resolution #268 of August 20th 2014, where the national company would hold 51 percent of the project company, and we were given one month to prepare for that, which was then extended for one month. And only one national company met that criteria for forming a consortium. Like I said in the beginning, it's not good to negotiate in public, I thought the government will invite us and we'll talk about it with the other partners, and then there would be a way to form a consortium at the right time. So I don't think it's good to have that discussion in the public, in the media, about the tender process. What I would like to suggest is that Peabody's proposal was mainly about how to create a maximum value for the Mongolian people, and for the Mongolian side. And how that can be done best, whether it's through a private company or public company through the government of Mongolia; Peabody has always been open to these ideas. But, given the time, given how this process was laid out, there was no room to try and put together anything as quickly in the one or two months' time as was given. 

In this tender, was Peabody unable to reach a working agreement with another private company, despite that being a request of the government of Mongolia? 

In 2011, we were asked to work with Shenhua and Russian Railways. We spent time on that. In 2014 we were asked to spend time with Shenhua and Erdenes TT. We spent time on that. Then we were asked to work with Shenhua and Energy Resources in this round of bidding. And in each of these we have always put forward a proposal where we think we will maximize the value of TT. We do not change our proposals for shortcuts, to try and do things differently. We have always tried to make sure that whatever proposal we are putting forward, it is all about maximizing value. In this round, the way the construct is and the framework is, it is still not clear that this will give the maximum value. We wanted to make sure that the proposal that we had and were discussing with ER and with Shenhua—we did not think we had reached a point where we all agreed on what is the common value, and how do we increase the value for the Mongolian side. That's why we did not reach an agreement and there was no time to reach an agreement. 

Experts say that Peabody made a good proposal that had several advantages. These included raising Tavan Tolgoi's value up to USD 5 billion to 8 billion, a USD 500 million prerepayment and off-take agreement, and the incorporation of environmentally friendly and highly technological mining practices into the project. What are the main differences between your proposal and the consortium's proposal? 

First, I want to be clear—because we signed a confidentiality agreement with the government, we should not be talking about our proposal or their proposal. It is not a good practice to do that. But what I will say is that our proposal has not been different from our proposal back in 2011. It only reflects some changes because of changing market conditions. But the main thrust of our proposal, is really about having a long-term view on how to create value in TT, over the long-term, and make this project a success and make it sustainable. That's the goal of our proposal. And that's what we have been trying to push forward. And I'm assuming the other proposals have the same conditions—and if they have them, then they're good. But if they don't, then I would question that. I think at the end of the day, we don't want to talk about whether this proposal is good or that is bad, because I don't know their full proposal. What is really important is I think the people of Mongolia need to understand these proposals for themselves, to see what is best in their long-term interest, for the people here in Mongolia. I think that's the main test of the proposals; to see whether this will create value, will it be sustainable, whether it will use the best international practices, will it help diversify your ability to enter different markets, will it create jobs, will it create training opportunities for children and youth in Mongolia, will it give businesses—the small and medium enterprises—a chance to participate, will there be transparency, will there be openness in procurement, will it create a better environment for corporate governance, and will it, at the end of the day, help make sure that Mongolia develops a very strong coal industry. 

As there was an expectation in the public that Peabody would be awarded development rights in the final tender, the surprise that followed when Peabody lost has led many to wonder what it was that the government found was lacking in Peabody's proposal. We are aware of the confidentiality agreement you signed with the government, but could you shed any light whatsoever on the matter?

First, I just want to be clear that Peabody's proposal, when it's assessed independently, will show that we have answered every question that the government asked, and we've answered these in a way that I think meets or exceeds what the government required. The second is, Peabody's proposal is meant to do two things: to ensure the commercial success of the enterprise, and the development of Mongolia. This means the proposal had to be medium- and long-term orientated. So we think not just two years or three years ahead, but five years, ten years, twenty years, thirty years—that's how long we have to think about this project. And so have not tried to do things that are only good in the short-term, or only meant to help one thing or solve only one problem; but rather which look over all these aspects of commercial success and development. To do this we have chosen to adopt the best practices to what we do globally—in financing, in developing, in assessing, in evaluating feasibilities and then in ensuring the implementation; all is done to world class standards. As far as the specifics are concerned, absolutely I would be happy to discuss that, negotiate with the government or whoever else, explain to any party there what the details are specifically. 

Insiders say that at the start of 2014 there were negotiations amongst three companies to sign an agreement; however the process stalled, due to the rumor that while Energy Resources was willing to sell its power plant to Peabody, Peabody was unwilling to buy it. Was that the main reason these negotiations stopped? 

I don't think that's true. That's all I will say. 

Since Peabody has worked on long-term sustainable development ideas for the Tavan Tolgoi project, how would you advise this project to proceed? 

We have to start by first understanding that Mongolia has a very different geology; it has a very fragile environment, so you have to be mindful of the environment, and you also have to understand the fact that this is a resource that is precious to the people of Mongolia, so how do you optimize it, how do you maximize the value. Those are the principles first that I would start with. And then I would say, do you use those principles and ensure that you come up with a world-class coal industry, so Mongolia becomes a hub that creates value for Mongolia coal, which is processed on the Mongolian side and then different forms of that are exported, whether it's energy, whether it's coal to liquid, whether it's chemicals? I think that has to be the vision and the starting point. The pieces that will help realize that vision are first, you must have an integrated infrastructure, an integrated deposit, which is what the government is trying to do, so that's good. By having all the deposits as one, which have a common infrastructure—especially for the use of water, which is very precious in the South Gobi, we are to be very careful about that, how we use it, what is the way in which we can save water, how we make sure to minimize environmental issues there, like dust, and making sure things like that don't happen. Having an integrated infrastructure plan, and developing in an integrated way, I would say, is one of the first things to realize that vision. Coming to the project itself, I think there are key elements one has to think through on the Mongolian side. The first is: how do you make sure that you know the full value of this deposit, and you can capture that value in the best possible way? Which means, you have to have some form of feasibility; you have to have some form of studies done so you understand the real value of this deposit. And then, how do you make sure that value is captured over time in the best possible way? Then on the production side, I think you have to make sure that you are optimizing the production based on quality and based on market, so that you are capturing high amounts when the market price is high, and you may have to lower production when the market is low, so that you capture most of the value and you're not simply pushing tonnes out. And which quality to blend from where, which products, how do you brand it as a TT product—these are also very important. Then you have to think about financing. What is the right mix of equity, debt, and other instruments over time, so that you are making sure of a couple of things? One: that you're attracting more investors, foreign investors, because that's what you want. More sources of financing. And two: you're making sure that financing is there for the long-term. Right now what we have is companies are struggling because they did not think in the downturn what will happen; and so they got a lot of debt and they don't know what to do. So, it has to be financed in a way that is thinking long-term, not just taking from one source or the other source, or one kind to the other kind. You also have to think about what other industries can come out from this. How to support the small industries, the medium enterprises, what'll be the linkages, and making sure that procurement is transparent, so that people in Mongolia and small businesses can compete and get this kind of contract, so that it's not just for a few people. I think it's very important that you think about that, as well as you think about what are the other industries, coal to liquid, coal to gas, etc. As the project becomes successful, in what areas can you diversify that will build on this, coal to chemicals, things like that? I think those have to be thought through over time; but start with the first piece, which supports small and medium enterprises and procurement and transparency. The last piece, of course, is you must never forget the people. Meaning, how do you create jobs for the next generation? How do you provide skills and training so that they become managers and people who are at a high level and position? We have to think about what kind of labor force do you want, what kind of technology do you want to use, how do you want to have them trained, where do you want to have them trained? Those are the very important decisions that I think have to be thought through. As far as our proposal is concerned, I don't think we have the answers to everything. But I think working with the Mongolian people we can come up with good solutions to all of these things. Some of them we have done in other countries; we have worked in Australia, in the US, in different areas. We think we can bring those practices. And that's part of our proposal. 

In 2011 and 2012, the coal market was very good. But now the coal market is in a downturn, coal prices are low and decreasing. In light of this circumstance, do you think now is the right time for Mongolia to develop the Tavan Tolgoi coal mine? 

Very good question. I think this is the right time to start doing the basic groundwork for increasing the value of this deposit. This is the right time to start. How do you do that? One: you start building the supporting infrastructure for this deposit and for this project. You start doing the feasibility and other studies that are needed to ascertain the value of this project. So you understand the coal qualities, the extent of the coal, the seams, so that you know what products will be made, the blending; and continue to do what you are doing right now, which is to do the work that is ongoing. Get the financing in place for developing this deposit in the medium- and long-term. And then as the markets come back, you can choose the time when you think you are right to capture that value, monetize it, and then give it back to the Mongolian people. 

Do you think the consortium will develop Tavan Tolgoi in the manner in which you explained? 

I would worry about it. I hope that they will take what we are saying and what we have said and implement that. It's hard to say without knowing exactly their plans, what they plan to do. But I can say with some certainty that the level of experience, the depth of experience, is not there in that consortium, because you have a local and a regional company that has operated either in Mongolia or in China, mainly; you don't have a company which has operated across the world. So I think it's a different set of choices and a different set of operations that you will see. They are good companies in their own areas, I'm not denying that. All I'm saying is that if you want a global footprint and a global operator, that's different. 

As Shenhua is a Chinese state-owned enterprise, there's a view that Chinese government policies will be incorporated into the project development process. If Peabody rather had been awarded development, might there have been clearer business accountability and profitability for the project? How do you see the situation going forward? 

First let me say that I think Shenhua is a very good company; it's a very strong company, it's a well-known company; we should not try and minimize that. Having said that though, Peabody has 130 years of experience in coal mining in the United States, in Australia, which makes it very different. And the good thing about being a private company is that we don't have any other objective except to maximize profit for the company. In that way, Peabody is different. We bring different kinds of capabilities. Shenhua's strength is in the Chinese market, in marketing, logistics and rail. They are very strong. Also Energy Resources is indeed a largest national coal company. Peabody has 130 years of operational experience; very strong global experience in safety, in the environment, in land reclamation which you have seen in Bulgan aimag. So I think we bring a very different set of skills and capabilities which is not the same. 

How do you think a Mongolian company and a Chinese state-owned enterprise will work together throughout this project? 

We would've liked to have been a part of it, so that what we would bring is very strong operational experience—not just contractors, but our own personal experience developing deposits all over the world. By bringing our marketing experience, analytics, all of that, we would be able to share that and make sure we get the best price for TT coal. The same thing for safety and environmental practices, we would have brought the global best practices. So now without us, I don't know how that will work. I honestly don't know where they will get it from; maybe they can hire people. We would have been a good complement and a good balance to the other strengths that are there in the consortium. 

What will Peabody do now in Mongolia? 

I think we are definitely reviewing our Mongolian strategy. We are also considering how we will look at Mongolia, in terms of opportunities. Based on this we will shortly decide on whether we will continue in Mongolia or do something else. Because after seven years being here in Mongolia, I think finally Peabody is feeling like we are a foreigner now. We have always thought we were a part of Mongolia, we became Mongolian, but last month we were reminded that we are a foreign company, and that we should always look at ourselves as a foreigner. To me, that's the biggest disappointment. 

If Peabody is to pursue any other megaprojects in Mongolia, does it have any confidence in the government of Mongolia to do so? And as for other megaprojects in Mongolia, not just in the coal sector, how do foreign companies view those projects now? How would you advise them? 

I think if a company like Peabody, which has been here seven years in Mongolia, is told one day "Thank you very much, you can leave now. You have no role", I think it's a very harsh decision, it's a very difficult situation. Other investors, particularly western investors, are going to be very cautious, based on Peabody's experience. But we, personally, will always wish well for the government here, and for the people of Mongolia. We will continue to support whatever we can. But I don't think we will necessarily participate anytime soon on any other project. 

As the former leading World Bank official in Mongolia for four years, how do you view Mongolia's current actions to help today's poor economic situation? 

I was very pleased to hear the Prime Minister's speech in parliament that he gave recently. I think he has correctly diagnosed the situation. And I think part of solving the problem is to first recognize the problem and then accept the problem, and I think he has done that. I recognize that because this is a coalition government, it is not often easy to get consensus. But I think it is important to sometimes push forward policies that may not be liked by everybody but that have to be undertaken; and that is the next step. Because what you have right now is a very sharp slowdown of economic activity in Mongolia and the region, which requires very strong policy actions; and if you don't do those, the situation can become much worse. 

Now the government is trying to implement fiscal contraction policies, in a situation where the debt level is very high. How do you view these actions? 

I think I said this before when I was at the World Bank: the number one challenge for Mongolia is cyclicality—ups and downs—and how you come up with a policy that helps deal with this cyclicality. And the answer is always very simple, as it has been before. For any family, you should save when you have more, and spend when you have less. But we often do the opposite, in the family as well as in the government. So when you get more money you want to spend more, and when things come down you want to save more. So I think this has to stop. We have to recognize and learn from that lesson; and say for our fiscal rules, monetary policy and fiscal policy, we must make sure that going forward that we have fiscal space—so you spend when there is a problem, a downturn, and then you save and you put money into your stabilization fund when there is more money in the economy. That's at the policy level. At the structural level, one of the key pillars of Mongolia's growth has always been foreign direct investment. And that investment has come down drastically. So you must find ways to make sure that you will continue to attract foreign direct investment, technology, knowledge, that will help grow Mongolia's economy and increase productivity and keep Mongolia then growing for a long time.

The Tavan Tolgoi project moves on while Oyu Tolgoi project expansion remains stalled. What do you see happening in the near future for Oyu Tolgoi? 

There is very little I know about the Oyu Tolgoi project. I think that it is a very important project for the economy, and I sincerely hope that we are able to find a solution to move this forward, because it is such an important project for the country.

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Local Market

MSE Weekly Review: Top 20 -1.28% to 14,420.73, Turnover 610.1 Million, T-Bills ₮354.3 Million

Ulaanbaatar, January 23 (MONTSAME) Five stock trades were held at Mongolia's Stock Exchange January 19-23 of 2015. In overall, four million 455 thousand and 581 units of 36 JSCs were traded costing MNT 964 million 435 thousand and 680.

"Khokh gan" /four million 314 thousand and 208 units/, "Genco tour bureau" /41 thousand and 916 units/, "Remikon" /39 thousand and 062 units/, "State Department Store" /24 thousand and 260 units/ and "Binse HK" /11 thousand and 885 units/ were the most actively traded in terms of trading volume, in terms of trading value were "Khokh gan" (MNT 493 million and 713 thousand), "Sharyn gol" (MNT 31 million and 911 thousand), "State Department Store" (MNT 13 million 956 thousand and 462), "Binse HK" (MNT nine million 389 thousand and 150) and "Material impex" (MNT seven million and 750 thousand).

The total market capitalization was set at MNT one trillion 395 billion 439 million 945 thousand and 378. The Index of Top-20 JSCs was 14,420.73, decreasing 187.52 units or 1.28% against the previous day.

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Early morning bank rates: Khan (Buy 1,930 Sell 1,946), TDB (Buy 1,935 Sell 1,946), Golomt (Buy 1,934 Sell 1,945), XacBank (Buy 1,934 Sell 1,946), State Bank (Buy 1,936 Sell 1,946)

BoM MNT Rates: Friday, January 23 Close
























































1-Year MNT vs USD, CNY Chart:

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BoM issues 83.1 billion 1-week bills at 13%, total outstanding +2.9% to ₮298.5 billion

January 23 (Bank of Mongolia) BoM issues 1 week bills worth MNT 83.1 billion at a weighted interest rate of 13.0 percent per annum /For previous auctions click here/

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BoM FX auction: US$6m sold at 1,944.11, accepts $20m USD, $2m MNT swap offers

January 22 (Bank of Mongolia) On the Foreign Exchange Auction held on January 22nd, 2015 the BOM has received bid offer of CNY and 18.4 million USD as closing rate of MNT 1942.40-1945.00 from local commercial banks. The BOM has sold 6.0 million USD as closing rate of MNT 1944.11.

On January 22nd, 2015, The BOM has received USD Swap agreement ask offer of 20.0 million USD and MNT Swap agreement bid offer in equivalent to 2.0 million USD from local commercial banks and accepted all offer.

See also:

·         FX Auction Statistics

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GoM Treasury Auction: 25 Billion 12-Week Bills at Discount, Average Yield 14.84%

January 21 (Bank of Mongolia) Auction for 12 weeks maturity Government Treasury bill was announced at face value of 25.0 billion MNT. Face value of 25.0 billion /out of 58.0 billion bid/ Government Treasury bill was sold at discounted price and with weighted average yield of 14.840%.

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Mongolia's economy is slowing, choose your camp: borrow more or tighten belts

January 23 (Mongolian Economy) Minister of Finance J.Erdenbat said the sovereign debt of Mongolia stands at 58.3 percent of GDP. The 'Solution' government to which he belongs, has proposed to parliament to increase the debt limit to 70 percent of GDP. The proposal would likewise amend the Fiscal Stability Law with an increase in external debt. Prime Minister Ch.Saikhanbileg characterised the proposal as necessary in the short-term to avoid a balance of payment crisis.

The proposal to increase debt and amend the law has not moved beyond debate. The Mongolian People's Party (MPP) is against the proposal, as it rather looks to lower the current level of debt representation in GDP. The disagreement incited many independent members of parliament to join their voices with the MPP. Meanwhile, the value of Mongolia's sovereign debt rises to MNT 13.9 trillion, as of today.

Mongolia's economic recovery remains elusive. The divide in parliament shows that there is no clear path forward. Formerly high GDP growth slowed in 2013 and 2014, while the expired debt pile has continued to grow rapidly. According to information from the National Statistics Office, expired debt reached MNT 269.5 billion at the end of December last year, an increase of MNT 151.1 billion, or 2.3 times compared to the previous year.

While the debate goes on over the country's debt, the USD to MNT exchange rate has bounded to MNT 1,936, and the internal economy slips further toward a crisis. In response, this week the monetary policy committee of the Bank of Mongolia increased the interest rate by a digit to 13 percent.

As part of the general debate, Mongol Bank's Financial Stability Committee presented its 'Proposal for change in the cumulative macro-economic policy' to the government. There is hope for stable economic growth if the Solution majority can runs this proposal successfully. Speaking in support, the Director General of the Bank of Mongolia N.Zoljargal stated the importance of increasing the inflow of foreign currency in 2015 to prevent the contraction of the economy, to reduce pressure and weight on the private sector, to protect jobs, and to develop sustainably the economy in the medium- and long-term.

The Mongolian economy is too dependent on the mining sector, which is far from the economic contributor it used to be. For a long time, the mining sector accounted for 90 percent of the inflow of external capital. Over the past three years, the lack of inflow in foreign currencies retracted to the equivalent of 72 percent of GDP, creating the current difficulty of the economy and reducing the MNT by 25 percent. FDI fell USD 6.8 billion from 2014 to 2014, returning figures to the crisis year of 2008. The current level of investment has retracted to USD 845 million.

Mongolia must choose between expanding and narrowing the economy. The Solution government looks to solve the problem today by borrowing from the country's future based on estimated future income. Although any increased capital inflow in the short-term would turn present difficulties into development, this can occur presently only through either attracted FDI inflow or an increase in the level of debt. For Mongolia, as the possibility of FDI inflow remains uncertain, the immediate solution seems to be to increase external debt to avoid trouble.

Debt will continue to be a problem until the Oyu Tolgoi project (which can produce one third of GDP) is pushed forward by the government. With a USD 5 billion investment, Oyu Tolgoi would be the bridge between the debt of troubles today and economic recovery tomorrow.

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Most Mongolians believe country headed in wrong direction -  AmCham Survey

January 23 (Mongolian Economy) A new survey commissioned by the American Chamber of Commerce in Mongolia, USAID, and the Business Plus Initiative, has concluded that there is an overall negative perception of the business environment in Mongolia. The survey posed questions to a sample of 1,500 adult Mongolian citizens in November 2014, on questions relating to Mongolia's economy, business, foreign investment and politics. Nearly half those surveyed believe Mongolia is headed in the wrong direction, while two-thirds consider the business environment negatively.

While Mongolians welcome foreign businesses, and view the US as an important ally with great potential for commercial relations, citizens are significantly concerned about the state of the economy, unemployment, and corruption. Few see any improvement in the economy over the next six months, as instability, inflation, high fiscal deficits and high foreign debt remain the country's main obstacles.

When asked about the "best economic partner for Mongolia," citizens selected the US third after Russia and China. Mongolians also view the private sector as the most trusted institution, while the Prime Minister's Office and Parliament are seen as the least trustworthy. Most agreed that moving the Oyu Tolgoi and Tavan Tolgoi megaprojects forward, easing constraints on foreign direct investment, and initiating regulatory modernisation would go a long way toward restoring the public's confidence in the business environment and government. 

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Politics & Legal

Saikhanbileg Fights to Keep Deputy Ministers as Budget Amendment Goes to Last Round

January 23 ( Second discussion on the Budget Adjustment for 2015 took place at the Plenary session and due to the differences voting has been conducted on suggestions submitted by the Standing Committee.

MPs B.Bolor, Head of the Budget Standing Committee, S.Ganbaatar, L.Erdenechimeg and B.Choijilsuren suggested start downsizing with positions of Deputy Ministers, where majority of the Standing Committee members haven't supported.

During the Plenary session the voting was conducted among the MPs and 24 members our of 47 supported the elimination of the Deputy Minister positions. There were MPs to remind to make amendments to the laws that regulate the issue of the ministerial positions.

PM Ch.Saikhanbileg on the contrary was on the defensive side citing to the number as the total cost for Deputy Ministers is MNT 300 million, whereas the amount of work done by the Deputy Ministers is far more valuable than the cost. Anyhow, the issues are to pass the third discussion.

Budget Adjustment draft has been transferred to Standing Committee for preparations for the third discussion.

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MP R.Amarjargal Seeks Update on Concession Projects from PM

January 23 ( MP R.Amarjargal sends an official inquiry to PM Ch.Saikhanbileg

Concession Agreement is one of the important developments Government of Mongolia has started implementing in past two years in order to decrease the state burden, support the private sectors and advance the public and private partnership. Government for Reform had established Concession Department under Ministry of Economic Development to advance the state services to the public in regards with the infrastructure and basic public services and approved the list of the projects and secured the concession agreements on crucial projects.

In the scope of the above and in accordance with laws MP R.Amarjargal is inquiring PM Ch.Saikhanbileg on the following issues:

·         Report on Concession Law implementation, how many concess agreements were signed in what sectors and their implementation progress and outcomes,

·         Detailed report on Altanbulag-Ulaanbaatar- Zamiin-Uud highway, Fifth Heating Power Plant project and Road Construction Project to connect Ulaanbaatar with aimag centers concession agreement implementation and progress.

·         Reports are required to be in a written form and be introduced at the Plenary Session of Parliament according to the State Great Khural law regulations.

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Bill submitted on rule on drafting bills

Ulaanbaatar, January 23 (MONTSAME) The Minister of Justice D.Dorligjav Friday presented to the Speaker Z.Enkhbold a draft law on a rule of draft laws and resolutions development and submission. 

With 53 clauses in 11 articles, the draft has been worked out together with a consultative group from a project at the UNDP on supporting civil participation in legislative actions. They researched how Germany, S.Korea, Vietnam, Great Britain, Canada and Japan draw up laws and then worked out the final version of the bill.

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Bill Submitted on Joining Antarctic Treaty

Ulaanbaatar, January 23 (MONTSAME) The Minister of Justice D.Dorligjav Friday submitted to parliament a draft law on joining the Antarctic Treaty System (ATS).

Mongolia started sending its experts to Russian, Bulgarian, Spanish, Chilean and Argentinian international research teams on Antarctica in 1972-1974. By this our researchers have contributed to scientific works on global climate change, weather forecast preparation, and sea water and minerals researches.

The ATS regulates international relations with respect to Antarctica, Earth's only continent without a native human population. For the purposes of the treaty system, Antarctica is defined as all of the land and ice shelves south of 60°S latitude. The treaty, entering into force in 1961 and as of 2012 having 50 parties, sets aside Antarctica as a scientific preserve, establishes freedom of scientific investigation and bans military activity on that continent.

The main treaty was opened for signature on December 1 of 1959, and officially entered into force on June 23 of 1961. The original signatories were the 12 countries active in Antarctica during the International Geophysical Year (IGY) of 1957–58. The twelve countries had significant interests in Antarctica at the time: Argentina, Australia, Belgium, Chile, France, Japan, New Zealand, Norway, South Africa, the Soviet Union, the United Kingdom and the United States. These countries had established over 50 Antarctic stations for the IGY. The treaty was a diplomatic expression of the operational and scientific cooperation that had been achieved "on the ice".

As of 2014, there are 50 states party to the treaty, 29 of which, including all 12 original signatories to the treaty, have consultative (voting) status. Consultative members include the seven nations that claim portions of Antarctica as national territory. The 43 non-claimant nations either do not recognize the claims of others, or have not stated their positions. 

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Only 8% of Mongolia's energy demand is supplied by renewable sources

Ulaanbaatar, Jan 23  ( Today Renewable Energy Forum is holding its 4th conference co-organized by Ministry of Energy and Mongolian Wind Energy Association.

Minister of Energy and MP D.Zorigt opened the forum with his speech, followed by the speech on Renewable Energy Sustainable Development and Future by MP S.Oyun, President of UN Environment Assembly.

As of today Mongolia only supplies 8 percent of the total energy demand with renewable sources, while Mongolia has high potential on utilizing the power plants based on renewable sources such as sun, wind and water.

MP S.Oyun emphasized on reduced costs over the last 10 years as the interest in renewable energy sources have increased tremendously.

Next speech was given by P.Tovuudorj, Head of the Strategic Policy Planning Department at Ministry of Energy on amendment draft on the Renewable Law, to be discussed at the Plenary session this spring.

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Defense Ministry to Increase Domestic Procurement

Ulaanbaatar, Jan 23 ( Minister of Industry D.Erdenebat and Minister of Defense Ts.Tsolmon have signed an MOU today.

Main focus of the MOU is to do the procurements for the defense forces to be done from the domestic suppliers in the scope of the Government of Mongolia 2012-2016 Program to support domestic manufacture sector.

Minister of Denfense Ts.Tsolmon:

Industrial products are a crucial part of the defense forces in every country and the notion of the defense industry is important. Moreover it is important to include private sectors as well. We have just signed an MOU with Ministry of Industry to support the domestic manufacture. This MOU is the beginning in the effort to support domestic manufactures and give them advantage. In this regard, private sector and domestic manufactures also required to express their initiatives, which will lead to the real outcomes.

Minister of Industry D.Erdenebat:

Domestic manufacture is advancing compared to few years before and are offering variety of products to the market. Defense sector procures over 600 variety of products manufactured by around 60 domestic manufactures. We provision potential to increase the product variety by 500 involving 55 more domestic manufactures. This is an opportunity to advance domestic manufacture and industry in terms of capacities and adherence to the international standards to replace the imports.

CEO of Khos Az LLC (shoes and purse manufacturer) N.Zorigt, representing domestic manufactures:

Although current economic situation is not very favorable for the manufactures, we are keeping our normal operations. We provide 60-80 people with jobs and our company is 100 percent domestic funded.  We are in the process of developing our half-automated manufacture, which is to introduce latest technological advances and produce more varieties of products. Today's MOU signing is a great opportunity for the domestic manufacturers.

Textile Manufacture Association representative:

There is demand from the defense forces and on the other hand there are potential suppliers domestically with 100 percent capacities fulfill that demand. Currently we are employing only half of our potentials. This MOU is the starter for domestic manufactures to start full production.

This is one of the good example initiatives done at the Government level to support domestic markets and manufacturers in this time of economic downturn.

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Mongol TV Adapting Gogglebox Format

MIAMI, January 21 (World Screen) Mongol TV has acquired the exclusive rights for the Gogglebox format in Mongolia, where it is set to launch in March.

From the all3media international catalogue, Gogglebox is an observational entertainment show that features people reacting to the latest TV shows. Mongol TV retains exclusive rights for Mongolia for a period of 1.5 years. The series received a 13-episode order.

Nomin Chinbat, the CEO of Mongol TV, said, "Mongol TV is pleased to start production of Gogglebox in March. Mongolians are a very social people who usually watch TV together so we are sure they will enjoy this program immensely. We thank all3media for bringing us this highly entertaining format."

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German Ambassador Expresses Interest in OT Project

Ulaanbaatar, January 23 (MONTSAME) The Minister of Mongolia M.Enkhsaikhan Friday met Mr Gerhard Thiedemann, the Ambassador Extraordinary and Plenipotentiary of the Federal Republic of Germany to Mongolia.

At the meeting, the Ambassador said although the Mongolia-Germany ties have been boosting at the political sphere, the bilateral economic ties are still low, and emphasized the FRG Foreign Minister visited Mongolia last year with a big delegation of businessmen, which means Germany wants to boost the economic relations with Mongolia.

"German companies are considering to make investments to the Oyu Tolgoi project together. The OT project is definitely big project at a world level. It is vital for Mongolia to make this project successful," Mr Thiedemann said.

In response, the Minister said he is confident that the bilateral economic cooperation will expand, and underlined an importance to do many works for the economic ties. Mr Enkhsaikhan said he will do all his best for this, and added it is important to tackle the OT project matter.

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Construction Minister Welcomes Turkish Contribution to Mongolia's Development

January 23 ( On January 23, 2015, Minister for Construction and Urban Development of Mongolia Mr. Damdin TSOGTBAATAR received in his office the Ambassador Extraordinary and Plenipotentiary of the Republic of Turkey to Mongolia, Mr. Murat Karagoz.

At the beginning of meeting, Ambassador M.Karagoz congratulated the newly appointed Minister and expressed his readiness to share Turkish experience and practices in construction sector, in particular, in the urban re-development projects and programs to implement in Mongolia.

In response, Minister D.Tsogtbaatar mentioned the Turkish side can participate as an important contributor in the development of Mongolia's construction industry, especially, in the real estate sector.

Today, Mongolian and Turkish entities have been implementing a "Tumen Amgalan" project to construct 3,400 units of apartments under Turkish architectural design in Amgalan area of Bayanzurkh District, UB.

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Immigrant Workers in Mongolia: 8 Thousand from 87 Countries

Ulaanbaatar, January 23 (MONTSAME) As of December, 2014, a number of foreign nationals working in Mongolia was recorded to be at eight thousand people from 87 countries. It showed a 892 people and 14 countries decrease against the previous year.

Among the workers with labour agreements, 34.6 percent were from China, 22.9 percent--from North Korea, 7.4 percent--from Russia, 6.4 percent--from South Korea, 5.7 percent--from Vietnam, 4.0 percent--from the USA, and 19.0 percent--from other countries.

Compared to the previous year, a number of workers from Vietnam decreased by 16.9 percent, from the DPRK--14.0 percent, from Russia--11.8 percent, from the USA--10.2 percent, from S.Korea--6.9 percent, and from China--by 3.0 percent.

Some 1730 immigrant workers, or 21.6 percent, were working in construction, 1,624 people,or 20.4 percent--in extractive industries, 1,118 people or 14.0 percent--in processing industries, 1,056 people or 13.2 percent--in wholesale and retail markets and in auto-maintenance, 908 people or 11.4 percent --in educational spheres, 477 or 6.0 percent--in transportation and storage activities, and 1,064 people, or 13.4 percent, were engaged in other fields of activities.

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Additives in yogurts cause quality degradation says consumer group

By A. Narantsatsral

January 23 ( Dairy products are believed to be good for health. But this is true only if consumed in its original state without any additives.

According to B.Tseren, Head of the Dairy Product Consumer NGO the quality of the dairy products can be easily spoilt with additives that dairy producers use in their products, which in turn has negative effects on human body.

Mongolian producers use additives coded E, while there are no standards that allow to use in yogurts. 

Additives Е440, Е331, Е451, Е1442 have negative effect on human body by slowing the digestion and metabolism and can trigger allergic reactions.

Food additives prohibited to use


Name of the additive




Hydroxypropyl distarch phosphate

stabilize, thickener, extends shelf life




acid regulator, conservant

sugar powder, salt, juices, juice concentrates


Sodium citrate

acid regulator, conservant

cream, butter

According to B.Tseren, Head of the Dairy Product Consumer NGO caramel, sugar, iron oxide and fat oxides are allowed to be added to yogurts.

Moreover, he explained that yogurt is supposed to act as oxidizer, good bacteria should stay in stomach and act as anti-oxidant and additives can reduce those qualities.

The issue was raised at the State Inspection Authority and the NGO sent an inquiry to the Deputy Head Mr M.Baasandorj. In return the State Inspection Authority stated that there are no capacities to run tests on those additives and there are no proven results.

B.Tseren also mentioned that there are no regulations and standards on use of those additives in Mongolia.

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96% of Baganuur Residents Vote to Split from UB and Become City

January 23 ( It was yesterday reported that the two-day voting to change status of Baganuur District of Ulaanbaatar into a city-level was ongoing and official results was released on January 23, 2015.

At the voting a total of eligible 16,260 citizens were registered, whereas 77.85% or 12,659 residents have participated, of which 95.76% or 12,094 residents have agreed to change the status of Baganuur District into a city of Mongolia.

Accordingly, the Baganuur District residents' request along with a Nalaikh District poll summary, which also voted to change its status into a city, will be discussed at the District Citizens' Representatives Khural (District Council), City Council, and then considered at the Cabinet meeting and submit to the Parliament.

The initiation to develop the new city was included in the Ulaanbaatar City Development General Plan until 2020 as well as in the Document of Development Trend until 2030 and in the Mayor's Action Plan for 2013-2016.

Under the Plan, it anticipates to develop the Baganuur as a hub city of coal mining, energy, coal processing, nano-technology, construction materials, light and food industry, health care, transportation and logistics with a population of 60,000 by 2030.

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95,7% of Baganuur residents voted to become, January 23


96% of Nalaikh District Residents Vote to Become City

January 22 ( On January 21, 2015, a poll to vote for developing Nalaikh District of the Capital City as the Nalaikh City was held among residents between 07:00 am and 09:00 pm at the 7th Khoroo of Nalaikh District.

The total population of Nalaikh District is counted as 34,575 residents today and at the voting 19,535 eligible residents were registered, of which 96.1% of 12,180 people or 62,3% of total eligible residents voted to develop their district as one of the cities of Mongolia.

Accordingly, the residents' request will be discussed at the District Citizens' Representatives Khural (District Council) and then submit to the City Council.

The initiation to develop the new city was included in the Ulaanbaatar City Development General Plan until 2020 as well as in the Document of Development Trend until 2030 and in the Mayor's Action Plan for 2013-2016.

Under the Plan, it intends to establish a city park introducing household farming, transport logistics, wholesale trading, food industry, construction material manufactory as well as a pivot for vocational training and acclimatizing a new technology. The studies estimate to expect 65 thousand people of population by 2030.

Moreover, the residents of Baganuur District are also conducting a vote to convert their district as a city, and officials say the voting will be ended at 08:00 pm tonight on January 22, 2015. These two districts are the furthermost located districts of Ulaanbaatar and therefore, its citizens are willing to have their own city status.

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96.1% of Nalaikh residents voted to become city –, January 22

Nalaikh district wants to become cityMontsame, January 22


Ulaanbaatar Winter Festival on Tuul River, February 1

January 23 ( The Ulaanbaatar Winter Festival is going to be held on the 1st of February. The second annual festival is going to be organized at the Tuul River.   

The festival will host competitions in figure skating, ice skating, ice anklebone throwing, archery, and will be open to professionals and amateurs. Winter bicycle competitions, cultural performances, a winter clothing fashion show, traditional games, an exhibition of souvenirs, and hot dishes will be available to festival goers.  

The Tourism Agency of Ulaanbaatar reports that within the Friendly Ulaanbaatar program, foreign tourists who are participating in the festival  will be able to be placed in 4 and 5 star hotels at discounts of up to 50 percent off.  

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Ulaanbaatar winter festival to run at TuulMontsame, January 23


Out of steppe: the $28bn plan to modernise Mongolia's Ulan Bator

By Nicola Davison

Project will seek to move former nomads living in poor areas of the capital out of their traditional tents and into modern flats

January 23 (Financial Times) In 1990 Enkhtuya Baatar was a nomadic herder living in Mongolia's northern Bulgan province when, one day, wolves began picking off her sheep. When a bitter winter, known as a zud, killed her remaining livestock Baatar, now 55, had little choice but to pack up and move her husband and four children to Ulan Bator, Mongolia's capital. They rented a room on the outskirts of the city, sleeping on the floor. "We didn't have any furniture, just a little old chest that served as a table, the place to make food, a cupboard, everything," she says.

Mongolia is one of the most sparsely populated countries in the world, a land of desert, steppe and mountains of dizzying expanse. Ulan Bator, though, is brimming. In 1989 and 1990, when the Soviet Union collapsed and Mongolia became a democratic market economy, 27 per cent of the country's population lived in the city. In recent years rocketing economic growth, spurred by the country's vast and mostly untapped natural assets, has drawn herders to the capital in droves. Today almost half the country's population, about 1.3m people, live in the city. The Asian Development Bank estimates about 40,000 migrants arrive each year.

With a lack of affordable housing and limited space in central Ulan Bator, most newcomers have little choice but to settle in ger districts, named after the country's traditional round felt tent, which translates as "home". These sprawling, unplanned neighbourhoods, formed of gers, makeshift houses and dirt roads, radiate from the high-rise office and apartment blocks of the centre like rings on a tree stump, with the newest settlements the furthest flung.

Once regarded as a temporary byproduct of modernisation, these districts now house about 60 per cent of Ulan Bator's population. Basic services such as running water, sewage and waste disposal are near absent, while schools, medical centres, community space and public transport are oversubscribed. During the winter, when temperatures drop to -40C, residents burn coal and sometimes rubbish on stoves, making Ulan Bator's air among the filthiest in the world.

Badruun Gardi, an adviser at the Zorig Foundation, an NGO working in the ger districts, describes Ulan Bator as "extremely divided". "The truth is a very low percentage of people living in the ger districts can even dream of moving into one of these apartment buildings," he says. "Integration is a problem because it's such a shift from a herder mentality to living in a city. The word 'community' doesn't exist in the Mongolian language."

Although the ger areas have long received attention from global charities and development banks, the barrage of new arrivals has meant that conditions have little improved.

The year 2012 brought hope of change. A new mayor, Erdeniin Bat-Uul, was appointed and his tenure coincided with a period of economic prosperity fuelled by a mining boom in copper, gold and coal. The year before his appointment Mongolia's gross domestic product grew 17 per cent, one of the fastest rates in the world. Central Ulan Bator has been modernising accordingly. The Blue Sky Tower, the city's tallest skyscraper, resembles a 105-metre-tall azure wind sail. Nearby, across Chinggis Khaan Square, is a Louis Vuitton store. Modern apartment complexes are replacing the bleak, prefabricated housing blocks of the Soviet era.

In February 2013, parliament approved adjustments to the city master plan, a document setting out the design and spatial strategies for the development of Ulan Bator until 2030, including the framework for improving the ger districts. The initial estimated cost of the plan is 54.3tn Mongolian tugrik or MNT ($28bn). It includes the construction of 10 regional towns, three satellite cities, a 170km railway, an airport and a mass transit system. Parts of the ger districts will be connected to the utility grid; other parts will be turned into apartment buildings through land-swap agreements with residents, who on the most part own their land. The aim is to move 70 per cent of families into modern flats by 2030.

In Bayanzurkh district on the city outskirts, next to a cemetery containing the tombs of Chinese martyrs, a tall wooden fence and two mangy dogs guard the Baatar family plot. In one corner is a white ger of the sort that has sheltered warriors and herders on the Mongolian steppe for centuries. These light, mobile structures are ideal for a nomadic lifestyle but less desirable for urban living. Baatar rents out hers, living instead in a one-bedroom, breeze-block house. Water is collected from a local kiosk. A pit latrine has been dug in a far corner.

Last winter, Baatar's family burnt through two truckloads of coal costing MNT250,000 ($130) each. For a family with a monthly income of MNT300,000 ($155) it is a huge expense. (Baatar's husband is unemployed; the World Bank estimates 62 per cent of ger residents are out of work.) Over a mug of steaming hot chocolate and boortsog — sweet, walnut-sized pastry clusters — I ask Baatar what the government could do to improve her quality of life. "If they could bring the pipes and connect us to the central heating, that would be nice."

It is a dream that today seems distant. Since the government issued its updated master plan, Mongolia's economic climate has become harder to predict. A slump in coal exports and foreign direct investment saw growth decelerate to 5.3 per cent in the first half of 2014. Key to reviving the economy is the resolution of a dispute about development costs at the Oyu Tolgoi copper mine

, a joint venture between the government and mining company Rio Tinto's Turquoise Hill Resources. Once it is fully operational, probably by 2021, the mine will contribute about a third of Mongolia's GDP.

"We must admit that current economic conditions are slowing down the ger district development project to a certain extent," says Ochirbat Sorogjoo, the deputy mayor of Ulan Bator. He adds that with the support of international bodies, such as the Asian Development Bank, the government is confident the plans can be implemented.

Others, though, are less optimistic. Temuulin Enkhmunkh, general director of the city's economic development agency, says in economic terms the $30bn master plan is a fantasy. "That plan was done by the planners, not with an economist," he says. "The amount of capital needed is so large, if we talk about that number we may as well pack up and go home."

One way out of the impasse would be to approach redevelopment on a less grandiose scale, says Joshua Bolchover, an assistant professor in the architecture faculty at the University of Hong Kong. Working with the municipal government and the Asia Foundation, an NGO, Bolchover has designed three "intelligent infrastructure concepts" that can be built quickly, cheaply, and address the problem of waste disposal.

"I think there's potential in thinking about urbanism through prototypes, as experiments, as explorations," says Bolchover. "They could be a test bed rather than trying to replan the whole city at a cost of billions of dollars."

Due to the hilly terrain and lack of proper roads it is difficult for rubbish collection trucks to access the ger districts, and street corners have become de facto refuse dumps. Costing about $40,000 each, Bolchover's reinforced concrete structures will be built this spring and will function as waste collection points, while versatile internal spaces can be used as a shop, classroom or meeting place.

Building structures that are responsive to the needs of residents makes sense at a time of economic uncertainty and rapid social change. "At the moment you see being built typical generic housing blocks, which don't reflect either the climate or the fact that these people were once nomads and have a clear connection to the land," says Bolchover. The ger areas have an important function as a "hinge" between nomadic and urban life, as a space of assimilation, he adds.

Oyungerel Demberel, a 55-year-old retired teacher, moved with her husband from the countryside to a ger district in 1997. Last year they built a red-brick, two-storey guesthouse on their land, to serve as both a business and a home. "We thought about buying an apartment but our land is way more valuable," says Demberel. This spring the family will be among the first ger residents to be hooked up to the city's utility grid, bringing piped water and heating into their home.

For Demberel the cramped conditions of an apartment building are unappealing. "Living in an apartment is a different mentality because nomads live very far from each other, one hill is for one family," she says. "It's in the blood of Mongolian people, this vastness, the space and the nature."


Buying guide

·         Mongolian is the national language, with English fast replacing Russian as the second most common tongue

·         Ulan Bator's climate is one of extremes. In the summer months it can hit 30C, while the long, dry winter the temperature can fall to -40C at night. Although sunny, Ulan Bator is extremely polluted, with exposure to fine particles (PM2.5) between six and seven times higher than the World Health Organisation recommendation

·         Mongolia has some of the lowest crime rates in Asia

·         The average price per sq metre for residential property is about $1,300. High-end, modern housing in the centre can be more than $3,000 per sq metre

·         Some of the city's most desirable housing is in the Zaisan neighbourhood, which is popular with families for its relatively fresh air and access to the countryside

·         There is no limit to the amount of property an individual may own. The purchase procedure is simple and foreign investors have the right to hold properties in their own names. Immovable property tax is between 0.6 and 1 per cent of the value of the property

·         Developed freehold property can be bought and sold by foreigners. While ownership of a "floating freehold" does not confer land rights, buyers are issued an immovable property ownership certificate that "locks" the land to the property. The certificates are legal tender

What you can buy for…

$800,000 A new five-bedroom, townhouse in the Zaisan area, near the American School of Ulaanbaatar

$1m A three-bedroom apartment in the Blue Sky Tower, with access to a pool and fitness centre

$2m A five-bedroom, penthouse duplex apartment in the central Regency Residence, near Chinggis Khaan Square

Additional reporting by Jargal Byambasuren

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Amid US Retreat From Region, Mongolia Seeks Closer Ties to China and Russia

By Alicia J. Campi

January 21 (Eurasia Daily Monitor Volume: 12 Issue: 12, The Jamestown Foundation)  --

The United States' muted profile in mineral-rich, landlocked Mongolia receded even more in 2014. Indeed, the US has largely stood by while Mongolia deliberately integrated its faltering economy closer with its two neighbors, China and Russia. Last year, top-level Mongolian officials met with Chinese President Xi Jinping (August 20–21) as well as Russian President Vladimir Putin (September 3) in Ulaanbaatar. Moreover, Mongolian President Tsakhia Elbegdorj met with Xi and Putin in a trilateral format during the September 12 Shanghai Cooperation Organization (SCO) summit, in Dushanbe, Tajikistan. In boosting these economic links, Mongolia was reacting to the precipitous fall in foreign direct investment (FDI) from $4.4 billion in 2012, to $1.8 billion in 2013, to only $0.8 billion in 2014 (M. A. D. Mongolian Newswire, January 13, 2015). This trend, coupled with the 40-percent fall in the Mongolian tugrik versus the US dollar over the last two years (, January 15), has greatly weakened the once white-hot Mongolian economy and swelled its foreign debt.

The US, which was Mongolia's mainstay in promoting democracy and free market reforms 20 years ago, has been mostly distant and economically disconnected from the growth of Mongolia's mineral economy during the last five years. American officials claimed that the absence of US investment was due to a "lack of transparency" and an unstable legal regime in Mongolia. They pressed Ulaanbaatar to control the country's endemic corruption and adopt a bilateral transparency agreement. Although the two governments signed the agreement in September 2013 (, September 25, 2013), opposition in the Mongolian parliament to some of its terms delayed its ratification until December 5, 2014 (, December 12, 2014). The website of the US Embassy in Ulaanbaatar hailed the significance of the document's ratification as "an important milestone in the U.S.-Mongolia trade relationship." But the transparency agreement ratification received almost no coverage in Mongolia's media beyond government sites (M. A. D. Mongolian Newswire, December 8, 2014).

Credit for the transparency agreement's ratification in the fall 2014 parliamentary session—in the midst of a Mongolian governmental collapse and reorganization—goes to President Elbegdorj and his Democratic Party, who believed it was the key to unlocking Washington's agreement to a second Millennium Challenge compact—the primary vehicle for US financial assistance in Mongolia. On December 11, Elbegdorj was phoned by the CEO of the Millennium Challenge Corporation (MCC) with news that the country was selected for its efforts to improve controlling corruption and enhance "good governance" (The Mongol Messenger, December 19, 2014). Elbegdorj emphasized that this selection "demonstrates the United States' significance to bilateral relations of the two countries and democratic development in Mongolia. (, December 15, 2014). The selection was prominently covered in the Mongolian media, even though the amount and type of aid has yet to be negotiated. Negotiations over the next several months will focus on specific projects to improve the legal environment and implement the Mongolian government's private sector policies.

Mongolia hopes that MCC Phase II will have greater success than MCC Phase I (2008–2013). The majority of Phase I's $285 million originally was allotted to modernizing Mongolia's Ulaanbaatar Railway (UBZD). However, when Russia, which own 50 percent of UBZD, blocked this plan, the Phase I funds were diverted to vocational training, strengthening land leasing property rights, reducing non-communicable disease rates, fighting air pollution, and building an all-weather road (, September 9, 2013). These projects were promoted to the Mongolian public as poverty alleviation measures, but had limited impact and pale in comparison with the several billion dollars' worth of Chinese-funded infrastructure projects and newly negotiated Sino-Russian-Mongol Eurasian Silk Road transportation construction initiatives. Ultimately, Mongolia had to negotiate with Russia a different modernization model for the UBZD, the nation's only north-south rail line (, September 3, 2014;, September 4, 2014). The two nations are expected to announce financial and technical feasibility rail studies by March 1, 2015, with a completion target of 2020 and financing promised by China—effectively excluding the US from major Mongolian rail development.

The Mongolian government in the fall delayed a final decision about foreign participation in the development of the 100-percent state-owned Tavan Tolgoi (TT), one of the world's largest (7.4 billion tons) untapped coking and thermal coal deposits, 240 kilometers north of the Chinese border. The two finalists were the US Peabody Energy Corporation and a joint consortium of Mongolia's Energy Resources LLC, Japan's Sumitomo Corporation and China's Shenhua Energy Co., Ltd. However, as soon as Mongolia was selected for the MCC Phase II compact, Ulaanbaatar announced it had accepted the Mongolian-Japanese-Chinese consortium bid (, December 23, 2014)—dashing hopes for a sizable infusion of US FDI. Mongolian authorities explained that the winning consortium had agreed to invest, without strings, around $4 billion; promised to assume the remaining $160 million in debt for TT that the Mongolian government owes to Aluminum Corporation of China (Chalco) (, December 12, 2014); and pledged to construct new TT railroad spurs that could move the coal to northern and southern markets. US officials from the Department of Commerce and Department of State did not mask their disappointment over this news; but in private discussions, they indicated that they still were optimistic a significant role for Peabody Energy would be found.

The World Bank forecasts Mongolia's annual GDP growth will slow to 6 percent in 2015, down from 6.3 percent in 2014, and 11.7 percent in 2012 (, January 14). Furthermore, Mongolia needs to develop an action plan to refinance or repay its external public debt of $1.08 billion by 2017–2018. Mongolian democratic leaders understand that without tighter economic policies and more FDI, their economy will remain vulnerable, pushing Mongolia even closer toward China and Russia. While they have reached out to other "third neighbors," such as Japan, Germany, and several countries in Southeast Asia, to find additional investment, they still are eager for significant US economic ties. Both the United States and Mongolia recognize that continuing economic weakness plagues the bilateral relationship and encourages Chinese and Russian influence in the country and the whole Eurasian region. US retrenchment has damaged the country's public reputation in the region by increasing the sense of abandonment in the minds of the Mongolian citizenry and in some official circles. While the failure of Peabody Energy to win the TT contract appears to be another sign of the US's inability to compete in Mongolia's mineral economy, it is hoped in both Washington and Ulaanbaatar that the MCC Phase II compact will be able to halt the further slide in US influence.

Dr. Alicia Campi has a Ph.D. in Mongolian Studies, was involved in the preliminary negotiations to establish bilateral relations in the 1980s, and served as a diplomat in Ulaanbaatar. She has a Mongolian consultancy company (U.S.-Mongolia Advisory Group), and writes and speaks extensively on Mongolian issues.

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India, Mongolia begin joint army exercise

GWALIOR, January 23 (Press Trust of India) The Indian and Mongolian armies today began a 15-day joint training exercise here with an aim to enhance interoperability between the security forces of the two nations during UN peacekeeping missions.

The tenth India-Mongolia Joint Training Exercise is focussed on allowing both armies to acquaint with each other's operating procedures in the backdrop of a counter insurgency and terrorism environment, an official statement said.

The Mongolian contingent from the 84 Airborne Special Forces Battalion comprising of one Infantry Platoon alongside an Indian Infantry Platoon is participating in the exercise, it said.

The 15-day exercise is planned to train troops of both nations on crossing of obstacles, special heliborne operations, water patrolling, firing a variety of weapons, handling and neutralisation of improvised explosive devices and conduct of cordon and search operations in a counter insurgency and terrorism environment.

The exercise will considerably enhance the interoperability between Indian Army and Mongolian Army in conduct of joint operations against international terrorism while serving in peacekeeping missions under the United Nations mandate, it said.

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India, Mongolia begin joint training exercises at GwaliorNetIndian News, January 23

India, Mongolia participate in joint military exerciseANI, January 23

India-Mongolia joint drill focuses on anti-terror operationsIANS, January 23


Taiwan, Mongolia state news agencies CNA, Montsame to increase cooperation

Taipei, Jan. 23 (CNA) Central News Agency, Taiwan's national agency, and its Mongolian counterpart, the Mongolian National News Agency Montsame, discussed news exchanges Friday and agreed to sign a news cooperation pact.

Avia Baatarhuyag, head of Montsame, reached the agreement with CNA President Fan Hsiang-lin (樊祥麟).

Baatarhuyag said that Mongolia has solicited foreign investment in recent years and has attracted a lot of Taiwanesee businessmen in mining, agricultural development and setting up an industrial park.

He noted that during a visit to Taiwan in March 2014, he witnessed the student-led "Sunflower Movement" protests against a cross-Taiwan Strait trade-in-services agreement with China.

He said he was shocked to see the progress of Taiwan's democratic development and its degree of freedom and openness.

He also said that Mongolia admires Taiwan's booming development in higher education, adding that there are currently more than 800 Mongolians studing in Taiwanese universities or graduate schools.

Fan noted that Taiwan excels in agriculture technology and said he would like to see Mongolia introduce Taiwan's agricultural technology to its agriculture and livestock sector development.

Fan said that CNA has also established mutually beneficial cooperation with other foreign news agencies, including Japan's Kyoto News and the Portuguese News Agency Lusa.

He expressed hope of an early signing of the cooperation agreement and said the Mongolian agency is welcome to send reporters or editors to visit CNA.

Baatarhuyag gladly accepted the proposal and welcomed Fan to visit Mongolia in July or August this year. 

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Mongolian model's Malaysian murderer arrested in Australia

SYDNEY, January 21 (Reuters) - Australian police have arrested a Malaysian police officer convicted of killing and blowing up a Mongolian model linked with a former associate of Malaysian Prime Minister Najib Razak, media reported on Wednesday.

Two police officers, part of Najib's personal security detail at the time of the 2006 murder of 28-year-old Altantuya Shaariibuu, were found guilty in 2009 but were acquitted in 2013.

That acquittal was overturned by Malaysia's Federal Court this month, reviving public outrage over the model's grisly death.

Corporal Sirul Azhar Umar was taken into custody by immigration officials in Brisbane earlier this week, The Star newspaper quoted Malaysia's Inspector-General of Police Tan Sri Khalid Abu Bakar as saying.

Sirul did not show up to hear the verdict, at which point the court issued an arrest warrant. He faces the death penalty in Malaysia.

The Australian Broadcasting Corporation reported that Sirul had arrived in Australia in October.

"The department detained an unlawful non-citizen yesterday in Brisbane," a spokeswoman for Australia's Department of Immigration and Border Protection Services told Reuters on Wednesday.

"The department is aware of the Malaysian authorities' interest in this individual, however due to privacy reasons cannot comment further."

Australia does not have the death penalty, nor does it extradite people to countries in which they may face execution for their crimes, a point which may have factored into Sirul's choice of Australia as a destination.

The Australian Attorney General's Department does not comment publicly on extradition matters, and would not confirm whether it had received a request for extradition in line with longstanding practice.

"Australia's extradition legislation does not allow a person to be surrendered to another country for an offense punishable by death unless the country has given Australia an undertaking that the death penalty will not be carried out on the person," a spokeswoman said in a statement.

Civil society groups have alleged Shaariibuu's murder was linked to her role as an interpreter and associate of Razak Baginda, a former associate of Najib, in Malaysia's purchase of two Scorpene-class submarines from French shipbuilding giant DCNS in 2002.

Najib had previously denied allegations of links to Shaariibuu or corruption in the purchase.

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Social, Environmental & Other

Mongolia: Disabilities in Statistics

Ulaanbaatar, January 23 (MONTSAME) A number of disabled people in Mongolia was recorded at 99.6 thousand in December of 2014, which shows an increase of 3248 people of 3.4 percent against the same period of the previous year.

Women make up 45 percent of total people with disabilities. Some 35 percent of them have a birth imparities, and 65 percent have acquired imparities, which consists of people with ordinary diseases (71.0 percent), with occupational illness (10.6 percent), with injuries caused by car accidents (3.9 percent), with injuries caused by domestic accidents (11.2 percent), and with injuries caused by industrial accidents (3.3 percent).

Among the total disabled citizens, 9.7 thousand people have visual imparities, 5.3 thousand people have oral imparities, 8.3 thousand have hearing disabilities, 18.4 thousand have locomotive imparities, 17.0 thousand people have mental illnesses, 10.1 thousand people have multiple imparities, and 30.8 thousand people have other types of disabilities.

As of December, 2014, a number of disabled children totaled to 11.4 thousand, which indicates an increase of 496 children or 4.6 percent against the previous year. Out of the total children with disabilities, 67.1 percent have birth defects.

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Hakuho carves name in sumo history with incredible 33rd championship

January 24 (The Yomiuri Shimbun) A new achievement has been carved into the history of sumo. Yokozuna Hakuho won his 33rd Emperor's Cup at the New Year Grand Sumo Tournament, a victory that took him past Taiho — widely regarded as the "great yokozuna of the Showa era" and winner of 32 tournaments — for the most all-time tournament championships. We hail this remarkable achievement.

During the New Year tournament, Hakuho was occasionally put in a precarious position when his opponent went on the attack. Nevertheless, Hakuho wrapped up the title on just the 13th day of the 15-day tournament. We think Hakuho showed his true worth when he managed to avoid defeat even when caught in an awkward position after being unable to gain his favored right-handed belt grip.

Hakuho said he was happy after clinching the title, but also indicated he was still looking to finish this tournament undefeated. "I'll buckle down for the next bouts," he said.

When Hakuho came to Japan from Mongolia in 2000, he was 15 and weighed only about 60 kilograms. That this skinny boy could develop into a great yokozuna was fundamentally the result of training that stuck to the basics over the years.

Hakuho greatly respects Taiho and Futabayama, who holds the record for winning the most consecutive bouts — 69. Hakuho affectionately referred to Taiho, whose real name was Koki Naya, as his "father in the sumo world." Before Taiho died, Hakuho would often seek his advice about such matters as the attitude required of a yokozuna.

The Japan Sumo Association has been repeatedly shaken by scandals in the past few years, including wrestlers gambling illegally on professional baseball games in 2010 and match-fixing revelations in 2011. At a time when trust in sumo was plumbing the depths, the achievements of Hakuho, who propped up the sport as the lone yokozuna, are significant.

Since being promoted to yokozuna in 2007, Hakuho has not missed a single bout — a fantastic feat.

Don't let yokozuna walk away

The absence of a powerful rival has also been a major factor in Hakuho's ability to rack up tournament wins. He is still only 29. Looking at his increasingly mature sumo technique makes us think that the Hakuho era will last for some time yet.

In the years ahead, Hakuho will need to show more of the dignity required of a yokozuna who will go down in history. He must refrain from some of the emotional actions that slip out on occasion, such as slapping an opponent's face until they lose their balance or giving his opponent an extra shove after they have already been defeated.

The latest tournament has been sold out each day, and the Emperor and Empress also came to watch. Sumo's popularity is certainly recovering. Fans are waiting for the emergence of a Japanese wrestler who can seriously challenge Hakuho to generate even more excitement in the sumo ring.

Previously, Hakuho spoke about his plans for after he retires. "I want to become a stablemaster and train some proteges," he said.

A JSA internal rule stipulates that only wrestlers with Japanese citizenship can become stablemasters. Hakuho has not clarified his view on becoming a naturalized Japanese. Some observers believe this suggests he is reluctant to take this step.

JSA Chairman Kitanoumi has denied this rule will be reviewed.

"We've followed this rule from long ago," Kitanoumi said. "We won't budge on it."

All three current yokozuna are Mongolians. Given this situation, if these superbly skilled yokozuna do not become naturalized Japanese and end up walking away from the sumo world after retiring, the sport would lose some of its valuable leaders. We think the JSA should consider taking a more flexible approach, such as allowing yokozuna with distinguished achievements to be granted the right to retain their ring name after retirement — regardless of their nationality.

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Sumo - Hakuho leads march of new Mongolian warriors Reuters, January 25

Mongolian Hakuho breaks record in ancient Japanese sportAFP, January 23

SUMO/ Hakuho finishes off New Year tourney with perfect 15-0 record on Day 15The Asahi Shimbun, January 24


Sumo - Hakuho leads march of new Mongolian warriors

By John O'Brien

TOKYO, Jan 25 (Reuters) - Hakuho returned to his corner for a third time to grab another fistful of salt, his face a picture of concentration, his eyes narrowed and focused as a packed Ryougoku Sumo Hall bristled with anticipation.

He turned, tossed the granules high into the air and made his way back towards the centre of the dohyo (ring), slapping his thighs and pumping himself up as he completed a centuries-old pre-bout ritual.

Opposite the Mongolian-born yokozuna (grand champion) stood, somewhat fittingly, Japan's top-ranked wrestler Kisenosato, the last barrier between Hakuho and a history-making triumph.

Seconds later, Hakuho fended off his opponent's initial barrage of slaps and pushes before planting his feet, seizing the momentum and forcefully marching Kisenosato out of the ring for his 13th straight victory in the New Year Tournament.

Haukho allowed himself a smile and nodded knowingly. His 33rd Emperor's Cup was won with two days to spare, sumo's chronicles had been rewritten and his quest to surpass legend Taiho's all-time tournament victories record was complete.

The 29-year-old's landmark triumph on Friday evening was also the starkest reminder yet that the most Japanese of sports had become the domain of Mongolian wrestlers both in the ring and now the history books.

Sumo had been practiced by only Japanese competitors from its first organised basho (tournament) in the 17th century until a little more than a hundred years ago, when foreign-born wrestlers began to participate.

The first wave of overseas powers had a distinctly Polynesian flavour with Takamiyama laying down a marker for Hawaiian-born wrestlers in the late 1960s, before Konishiki rose to prominence two decades later and Akebono became the first foreign yokozuna in 1993.


Samoan Musashimaru was the second non-native grand champion when he was promoted to the top rank in 1999 and his 12 basho victories marked the onset of foreign domination that Mongolia took over with the controversial Asashoryu leading the way.

Currently, all three yokozuna are Mongolian -- Hakuho, Harumafuji and Kakuryu -- with the last Japanese grand champion retiring in 2003 and final homegrown tournament winner coming nine years ago when Tochiazuma won his third and final basho.

While Japanese fans bemoan a lack of local competitors at the highest level, Edo-Tokyo Museum director general Makoto Takeuchi, who teaches the history of the sport to new sumo recruits, feels too much is being read into the situation.

"As a Japanese, it is regrettable that a record held by a Japanese wrestler is broken by a foreigner. This is true," Takeuchi told Reuters

"I do not actually care about the nationality of wrestlers, as long as they make efforts to understand and learn what sumo means."

The essence of sumo to most Japanese is hinkaku (dignity), something a yokozuna must possess to earn the respect of fans, the media and his peers to help plant a legacy of greatness both during and after a wrestler's career.

"Sumo is not just a sport... it is not just about who wins and who loses. In addition to the results, wrestlers are required to have hinkaku and the beauty of every movement is a reflection of their dignity that we can appreciate," Takeuchi added.

"Sumo has this extra value that other sports do not."


A perceived lack of hinkaku blighted Asashoryu's reign as a yokozuna, with the Mongolian having several scrapes with sumo authorities during a career that saw him win an impressive 25 tournaments but was cut short by a retirement in 2010 he felt was forced upon him following an alleged assault charge.

Hakuho, born Monkhbatyn Davaajargal in Ulan Bator, has avoided such controversies and risen through the ranks on the back of his great strength, agility and flexibility.

Many have compared his rural upbringing in Mongolia to that of the great Japanese wrestlers of the past, able to develop his core power by horse riding and carrying heavy objects as a youth.

His determination and extra training set him apart from his stable mates and rivals, but like Asashoryu, he struggled to win over the Japanese public with a tendency to over-celebrate victories and displays of disregard towards defeated opponents.

It was perhaps a meeting with Taiho in 2008, who became a father figure to the young Mongolian, and his marriage and subsequent parenthood that have helped calm down the wrestler as he marched towards greatness.

"Even though he has more wins than Taiho, it does not mean he has surpassed him as a person," Takeuchi added.

"Hakuho must be given credit, though, in that he is really trying to become as similar as possible to those historical champions.

"Not only does he want to wrestle like them, he wants to become a man like them as well."

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Mongolian Participants of 2015 Dakar Rally Return Home

January 24 ( "Dakar Rally-2015" races, the co-called Auto Sport Olympics, finished on 18th of January. The race lasted almost for two weeks and the participants had raced about 9,000 kilometres of South America region. 

This year, Mongolia-Hungary joint crew had raced with three cars. Mongolians had successfully finished the Dakar Rally race in car category for the first time and showed historic success in Mongolian auto and moto sport history.

Motorcycle category crew landed at 7.30am while Car category crew landed at 10.25am at Chingis Khaan International Airport. 

This year, we had many to talk including helped foriegn athletes with Mongolian kindness behavior and drew attention of many by wearing fox fur hat. 

Parents and siblings of athletes who showed up Mongolian courage and endurance have welcomed with silver bowl of milk. Besides, mothers were kissing them with grateful tears.

Athletes seemed very satisfying.

We are delivering you the short interview with N.Lkhamaa, racer of car category, International Master. #431 car, coordinated by Sports Masters, B.Byambadelger and B.Surendorj, driven by N.Lkhamaa, International Master ranked at 62th. 

- First of all, congratulations. You have reached the finish line of the Dakar Rally for the first time. How do you feel?

- Thank you. Six racers had participated. Three cars had raced and one of them had finished the Dakar Rally. Coordinated by D.Jargalsaikhan and U.Byambatsogt car had raced with purpose to reach at finish line. I am extremely satisfied that me and my firends O.Byambadelger and B.Surendorj had successfully finished the route of Dakar Rally with car that have state emblem, nationial anthem and Mongolian script.

- Before, you have competed in bike category for 2 years. This year, you participated in car category. What was the difference?

- Car categry was more challenging. although 137 cars started the race only 50% of them finished the route. We ranked 5th at car category while ranked 62th at total result.

- What was the most challenging thing of the race?

- Second day was the most challenging. Our car had crashed and windscreen had broken while driving at  "Fishfish" sand road. Two coordinators were running in front of the car and watching the road. At the second day, we had reached at finish line at 3am. We were glad to not leave the race. 

- You raced with Toyata Land Cruiser 200. Was Toyata Land Cruiser 200 suitable for Dakar Rally?

- Toyata cars are realiable. However, our car`s basic weight was 3.5 tons, heavier than heading cars by 1.5 tons.

- Will you compete in next Dakar Rally?

- Even I hadn`t finished the route, I had raced in motorcycle category for two years. This year, we had reached to finish line. We will decide after making discussions with our sponsers.  

Coordinator B.Surendorj:

- I have competed for the first time. Rally was more tough than I imagined. Even I haven`t think that such a tough. The road was challenging. Due to well preperation we reced good. I am delighted we`ve finished the route.  

May more Mongolian racers compete in Dakar Rally 2016 and we wish them great success. 

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Former Laker Set to Join Mongolian Basketball Team

January 23 ( Mongolian Basketball National Super League second round games have started and continued with fierce games.

The game series coincide with the addition of one more NBA players to the Mongolian team.

Former Point-Guard at Los Angeles Lakers and former teammate of Kobe Bryant is to join one of the Mongolian Basketball teams soon.

Mongolian National Basketball Association is keeping it secret on which team Parker to join.

Smush Parker played at Los Angeles Lakers in 2005-2007, Miami Heat in 2007-2008 and at Los Angeles Clippers in 2008.

Link to article


'Three suns' appear over Mongolia in rare celestial phenomenon – video

January 22 (The Guardian) Three suns appear in the horizon over Mongolia, in an a rare celestial illusion. The middle sun is the actual star which appears daily in the sky, while the other two are smaller reflections. The phenomenon occurs in extremely cold temperatures when the sun's light reflects off snow crystals in the air

Link to video



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