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Thursday, June 9, 2016

[OT hires Jacobs; TCK-ERD alliance continues; XAM jumps on drill; KCC to raise $2m; TER appoints McRae; and CICG buys Gobi Minerals]

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Thursday, June 9, 2016

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Headlines in Italic are ones modified by Cover Mongolia from original

 

ASEM 11

Chua to lead Malaysian delegation to ASEM Finance Ministers' Meeting in Mongolia

June 8 (Malaysia Gazette) Deputy Finance Minister 1 Datuk Chua Tee Yong will be leading the Malaysian delegation to the Asia-Europe Finance Ministers' Meeting (ASEM) on June 9-10 in Ulaanbaatar, Mongolia.

In a statement Wednesday, the Ministry of Finance (MOF) said Malaysia's participation at the ASEM meeting is important to safeguard the nation's interests as well as to reiterate its commitment as one of the main players in the Asia region towards ensuring economic and financial stability.

The ASEM meeting, themed "Partnership for Prosperous Connectivity between Asia and Europe", will discuss three topics -- Macroeconomic Developments and Prospects in Europe and Asia; Ensuring Financial Stability at Regional and Global Level: Experiences from Europe; and Connectivity between Asia and Europe.

Link to article  

 

Thai Minister to join Asia–Europe Finance Ministers meeting taking place in Mongolia

BANGKOK, 9 June 2016 (NNT) – The Minister of Finance is set to propose measures to increase investment promotion and SME businesses strengthening at the Asia – Europe Finance Ministers' Meeting (ASEM FinMM) in Ulaanbaatar, Mongolia.

Ministry of Finance spokesman Kritsana Jeenawijarana has said that Minister of Finance Wisudhi Srisuphan is scheduled to attend the 12th Asia – Europe Finance Ministers' Meeting (ASEM FinMM) to be held in Ulaanbaatar, Mongolia, on 10 June.

The meeting, with the theme, "Partnership for Prosperous Connectivity Between Asia and Europe," will be attended by Ministers of Finance from ASEM countries, along with the delegation from the ASEAN Secretariat, the European Commission and international agencies.

The three main agendas taking place in this meeting, include discussions about the current economic situation and economic trends in Asia and Europe, the enhancement to global and inter-regional financial strength and the support to Regional Financial Arrangement, and the encouragement of trade and investment connectivity between the two regions.

The meeting will also be a good opportunity of the Minister of Finance to present important economic policies of Thailand to ASEM countries, including the investment in infrastructure, private investment promotion, and the strengthening scheme for Small and Medium sized Enterprises (SMEs).

Link to article

 

Int'l Market

TRQ closed +0.67% Wednesday to US$3.01

Jacobs Engineering to build Rio Tinto's $5.3 bln Mongolian mine

June 8 (Reuters) Jacobs Engineering has won the main contract to build the $5.3 billion Oyu Tolgoi underground copper and gold mine in Mongolia, the companies said on Wednesday.

Development of the underground mine at Oyu Tolgoi is key to operator Rio Tinto's ambitions to expand in copper and for the growth of the Mongolian economy, which has suffered with the global commodities slump.

"Following the final notice to proceed for the underground development last month, this contract is a critical piece as we ramp up towards full construction," Oyu Tolgoi Chief Executive Andrew Woodley said in a statement.

Bernstein Research on Wednesday raised questions over the expected 20 percent internal rate of return on the underground project, based on the long lead-time to full production and potential risks, including political shifts and the challenges of block cave mining.

"The project has significant technical and non-technical risks that could derail the investment case, even if copper prices increase to above $3.0 per pound as Rio expects (and, indeed, so do we)," Bernstein analysts said.

Their conclusion was based on an assessment of the Oyu Tolgoi underground project that they commissioned from Rio Tinto's former general manager of valuation, Neal Brewster.

The first stage of Oyu Tolgoi, an open pit mine, was approved in 2010 and started producing in 2013. The underground project was put on hold in 2013 amid disputes with the government which were resolved last year.

"It's a 17-year window over which they will have been investing and ramping up," said Bernstein analyst Paul Gait.

"Had they known the delays and the issues the Mongolian political situation precipitated, I don't think they would have pressed the button (on Oyu Tolgoi) in 2010 in its entirety," Bernstein analyst Paul Gait said.

Rio Tinto declined to comment on the Bernstein report. 

Link to article

Related:

Oyu Tolgoi signs major contract for underground mine development Oyu Tolgoi LLC, June 8

Jacobs Wins EPCM Contract for Oyu Tolgoi Underground Project - Jacobs Engineering Group Inc., June 8

 

Turquoise Hill Provides Update on Progress Toward Underground Construction

VANCOUVER, BC--(Marketwired - June 07, 2016) - Turquoise Hill Resources today provided an update on progress toward the start of underground construction, including project finance drawdown and the signing of an engineering, procurement and construction management (EPCM) contract.

Project finance drawdown

Oyu Tolgoi has drawn down approximately $4.0 billion of the project finance facility that was signed in December 2015 and provided by a syndicate of international financial institutions, export credit agencies representing the governments of Canada, the United States, and Australia as well as 15 commercial banks. Steps are being taken to finalize the drawdown of the additional $0.4 billion and are expected to be largely complete in the coming weeks. As part of the project finance facility, a debt cap of $6.0 billion for Oyu Tolgoi was agreed, which provides the possibility for an additional $1.6 billion of supplemental debt in the future.

In accordance with the Amended and Restated Shareholders' Agreement (ARSHA) dated June 8, 2011, Turquoise Hill has funded Oyu Tolgoi's cash requirements beyond internally generated cash flows by a combination of equity investment and shareholder debt. For amounts funded by debt, Oyu Tolgoi must repay such amounts, including accrued interest, before it can pay common share dividends.

Net funding received to date has been used by Oyu Tolgoi to pay down shareholder loans payable to Turquoise Hill. Net funding will be available for drawdown by Oyu Tolgoi as required for the development of the underground mine. The shareholder loans bear interest at an effective annual rate of LIBOR plus 6.5%.

EPCM contract signing

Oyu Tolgoi LLC has signed a contract with Jacobs Engineering Group (Jacobs) to provide EPCM services for underground development, which paves the way for construction to begin. Jacobs will be responsible for the materials handling systems for the underground mine and associated surface and underground infrastructure. The project is expected to be delivered over a five to seven-year period.

Link to release

 

Rio Tinto Copper: Oh Yes! Oh No, Mongolia

By Dimitra DeFotis

June 7 (Barron's) Miner Rio Tinto (RIO) in May said it would spend $5.3 billion to develop the Oyu Tolgoi copper mine in Mongolia, but the expected returns are exaggerated, a study commissioned by AB shows.

AB, as Alliance Bernstein is now known, has an overweight rating on Rio Tinto, whose shares were down more than 1% in midday trading. Bernstein has a market perform rating on BHP Billiton (BHP) and Vale (VALE), whose shares are down 2% and 1.4% respectively. Shares of Freeport-McMoRan (FCX) were down more than 3% in recent trading.

Analysts Paul Gait, Marion Megel de Floris and Jonathan Absolon write that Rio scuttled the expansion three years ago after a dispute with Mongolian authorities. The renewed project won't boost volume until 2020, and full production would come in 2027. Gait et al dispute the project's estimated internal rate of return:

"The company claims an IRR of more than 20% on the project (incremental to the open pit). We have commissioned Neal Brewster, formerly general manager of valuation at Rio Tinto, to provide a report to us as he would have provided to Rio's executive committee. We attach his note in the appendix of this call, but we read his conclusion as follows: Rio's valuation of the project is the result of a best-engineered solution to a complicated project. Give engineers a particularly tricky problem to solve, and they will come back with a theoretical solution that looks perfect on paper… until unforeseen problems materialise. That is Oyu Tolgoi. The project has significant technical and non-technical risks that could derail the investment case, even if copper prices increase to above $3.00 per pound (versus US$2.08/lb today) as Rio expects (and, indeed, so do we). We would also flag that the total incremental value of this project should take into account the volume-induced price destruction that this project will have. Thus there is cannibalisation of value by OT from the rest of Rio Tinto's copper business (the project will add 3.5% to global supply). Accordingly, the 20% IRR on the project given by Rio Tinto will not be that actually experienced by shareholders in Rio Tinto.

… there are a number of significant non-technical risks: country risk (Mongolia country risk premia could be as high as 8.5%!), power risks (the project might require the construction of a power plant that would increase capex further), and marketing risks (China, whose relationship with Mongolia is difficult, is the single consumer)."

Link to post

 

Rio Tinto launches new cash tender offers for up to $3 billion of its 2018, 2020, 2021 and 2022 notes 

7 June 2016 -- Rio Tinto is continuing to use its strong liquidity position to reduce gross debt, by today commencing cash tender offers to purchase up to $3 billion of its 2018, 2020, 2021 and 2022 US dollar-denominated notes.

Today's announcement is part of the Rio Tinto Group's ongoing capital management and follows the successful completion of cash tender offers launched in April to purchase $1.5 billion of its 2017 and 2018 notes. 

Rio Tinto Finance (USA) plc and Rio Tinto Finance (USA) Limited (each a "Company" and together, the "Companies") are making the offers to purchase the outstanding securities listed in the tables below, each guaranteed by Rio Tinto plc and Rio Tinto Limited (the "Securities"). The terms and conditions of the offers are described in the offer to purchase (the "Offer to Purchase"), dated as of today. Capitalized terms not otherwise defined in this announcement have the same meaning as assigned to them in the Offer to Purchase.

1.   Any and All Offer

Rio Tinto Finance (USA) Limited and Rio Tinto Finance (USA) plc are offering to purchase for cash, upon the terms and subject to the conditions set forth in the Offer to Purchase and the Notice of Guaranteed Delivery, any and all of the outstanding Securities listed in the table below (the "Any and All Securities"):

Link to release

 

Turquoise Hill Sells 309 Thousand SouthGobi Shares

Link to notice

 

SouthGobi Provides an Update on the Ontario Class Action

HONG KONG, CHINA--(Marketwired - May 31, 2016) - SouthGobi Resources Ltd. (TSX: SGQ)(HKSE:1878) (the "Company" or "SouthGobi") announces today the May 24, 2016 decision of the Ontario Superior Court of Justice ("the Court"). The Court granted SouthGobi leave to appeal the decision made on November 5, 2015, which granted the plaintiff permission to commence an action claiming damages under the Ontario Securities Act with respect to the Company's restatement of financial statements as previously disclosed in the Company's public filings. The Company will therefore proceed to appeal the original decision which will likely be heard by the appellate court in the Fall of 2016.

For more details in respect of the class action lawsuit, refer to the Company's Management Discussion and Analysis for the quarter ended March 31, 2016 available on SEDAR at www.sedar.com, and, in particular, the sub-section on "Class Action Lawsuit" of the "Regulatory Issues and Contingencies."

Link to release

 

ERD closed flat Wednesday at C$0.38

Erdene Closes C$500,000 Private Placement with Teck

HALIFAX, NOVA SCOTIA--(Marketwired - June 6, 2016) - Erdene Resource Development Corp. (TSX:ERD) ("Erdene" or the "Company"), is pleased to announce it has closed its non-brokered private placement with Teck Resources Limited ("Teck"). The private placement financing involved the issuance of 1,063,830 shares to Teck at a price of $0.47 per share for gross proceeds of $500,000 ("Private Placement"). This fulfills Teck's annual equity investment obligation pursuant to the Strategic Alliance between Erdene and Teck announced by Erdene on April 11, 2013. Net proceeds of the Private Placement will be used for exploration of the Company's Teck-Alliance projects in Mongolia. All securities have been issued pursuant to the Private Placement and are subject to a four-month hold period from the closing date.

Erdene-Teck Alliance

The Alliance with Teck was entered into in April 2013, and was formed by the signing of option and private placement agreements (collectively, "Agreement") to fund and carry out mineral exploration in the Trans Altai region of southwest Mongolia. Under the terms of the Agreement, Teck has the option to subscribe for shares of Erdene, priced at the then current market plus 10%, until it has invested $3 million or acquired through subscriptions 19.9% of the outstanding shares of Erdene, whichever occurs first. A minimum of $500,000 is to be subscribed by Teck on each anniversary date of the closing of the Agreement to renew the Alliance. On April 22, 2016, Erdene announced it had agreed with Teck to extend the subscription date for 2016 by 60 days to June 23, 2016. To date, Teck has subscribed for $2.5 million in Erdene shares and owns 10.8% of Erdene's issued and outstanding common shares after giving effect to this subscription.

Excluded from the Alliance are the Company's Bayan Khundii Gold Project and Altan Nar Gold-Polymetallic Project.

A multi-year program of regional exploration, designed to identify porphyry and porphyry-related mineralization, has been underway since inception. The program has provided the Alliance with a significant amount of technical information that continues to be evaluated. During the 2015 program the Alliance was able to secure new exploration licenses within the targeted area and is now reviewing the potential for future acquisitions within the Mongolia licensing system. With the renewal of the Alliance, the 2016 exploration program will consist of surface geochemical sampling, geological mapping and prospecting, and analysis of newly acquired satellite data.

Link to release

 

XAM trading +9.52% today on the announcement

Xanadu: Latest Drilling Results Underpin Significant Gold Discovery

HIGHLIGHTS

·         Diamond drilling at Oyut Ulaan has intersected significant high-grade near-surface gold mineralisation, including 6.0m grading 21.57 g/t Au from surface (OUDDH040) and 6.3m grading 6.67 g/t Au from 15m (OUDDH035);

·         Exploration has now discovered at least four areas of gold mineralisation within a prospective area that is 4.5km long and 300m wide;

·         Drilling at the 'Breccia Pipe' prospect has intersected significant shallow high-grade tourmaline breccia mineralisation, including 69m grading 2.0% Cu from surface which includes 12.5m grading 5.35% Cu from 26m (OUDDH036);

·         Systematic and cost effective exploration continues at Oyut Ulaan.

Xanadu Mines Ltd (ASX: XAM – "Xanadu") is pleased to announce that it has received the first assay results from diamond drilling targeting recently discovered shallow gold mineralisation from its 90% owned Oyut Ulaan copper-gold project located within the Dornogovi Province of southern Mongolia, approximately 420km southeast of Ulaanbaatar (Figure 1).

Link to release

 

KCC closed -11.1% Wednesday to C$0.04 on dilution fears

Kincora looks set to secure funding for Mongolian copper-gold consolidation

Kincora is embarking on a major financing exercise which will allow it to capitalise on a commanding land position in Mongolia

June 8 (Proactive Investors) These are transformational times for Kincora Copper Limited (CVE:KCC), also occurring at what could be a low in terms of investor sentiment towards Mongolia.

At the end of May the company announced the consolidation of a significant swathe of ground with Ibex, a private company associated with famous mining entrepreneur Robert Friedland.

With the land comes one of the largest known regional geophysical and surface geochemical datasets globally supporting various style targets, including  "mega" (Tier 1 type) porphyry discoveries, "traditional" gold rich copper porphyries and epithermal gold deposits.

Combined with Kincora's existing portfolio the newly amalgamated ground represents one of the most commanding land packages on what may well become the next major copper producing district in the world.

Most will know of Robert Friedland's success with Ivanhoe Mines which helped put Mongolia on the international stage having found and sold the great Oyu Tolgoi copper-gold mine several hundred kilometres south of Ulaanbaatar, but only 80 kilometres from the border of the world's largest consumer of copper, China. Recent resolution of a longstanding dispute over the expansion of the Oyu Tolgoi project supports a potential return to economic growth, positive FDI and investor sentiment towards Mongolia.

But Kincora chief executive Sam Spring believes that's just the start.

A deposit like Oyu Tolgoi rarely occurs in isolation, he says. Rather, he draws a parallel with one of the world's great copper producing nations, Chile, which began to be opened up to mining and exploration in the early 1970s.

The situation in Mongolia now is rather similar, he says. And following the consolidation of the new ground from Ibex, Kincora now holds a significant first mover advantage, controlling the majority of the prospective exploration licenses which dominate the key geological trend between and along strike from the Oyu Tolgoi and Tsagaan Suvarga copper mines.

It's this sentiment that lies behind the recent positive uplift in Kincora shares, from a 2016 low of C$0.015 to the current C$0.045, a threefold rise.

Spring has not been slow to follow up on the potential of the land position.

At the beginning of June he announced that Kincora would be looking to raise C$2 mln in new money in parallel to converting an existing C$2 mln debt into equity.

At a stroke Spring will have wiped out all of Kincora's debts and capitalised the company effectively to allow meaningful exploration to take place on the land package once plans are made.

It seems likely that a significant drill programme would be undertaken in the event that the majority of the money comes in, although Spring cautions that no actual decisions have yet been made.

"We're raising money to go and do justice to the potential of this belt and start adding value from our exploration and consolidation strategy," he says. "I've been speaking to various people and the general feeling is that this has got to be initially self-funded."

By that, Spring means that existing investors and those that may or may not come on board in the current raise are of the mind that now is not the time to dilute the project upside by bringing in a partner to share the funding load.

But the question then becomes whether Spring can get to the C$2 mln that he's aiming for.

So far, he seems hopeful that he will, but in these still relatively uncertain markets he takes comfort that there are firm commitments in place to ensure the financing component of the Ibex deal is more than bedded down. It's helpful of course that the raise, when announced, set a C$0.0375 price per share and that since the news about the Ibex deal has sunk in the share price on the TSX-V has ticked up to a handy C$0.045 (and recent high of C$0.055).

More to the point though, existing shareholders understand the story, the potential of the Southern Gobi copper belt, Mongolia as a jurisdiction (noting US$4 billion of proceeds from one of the industries largest project financings was transferred this week relating to the Oyu Tolgoi Stage 2 expansion to Turquoise Hill Resources) and have an appetite to come in.

"We've had good interest and initial support from existing shareholders," says Spring. "It's a first-come first-served type offering as were keen to make the most of the current field season."

At the same time though, he concedes that it'd be very hard to say no to a high-end institution even if it did come to the party later.

The Friedland name also adds lustre and certain headlines, but Spring doesn't want the focus to be or overplay that aspect.

With this consolidation, the attention is back to the belt and creating the right platform to support further discoveries which current known geology, geophysics and interpretations support.

"It's not often that you can secure a land package, data set and portfolio of targets like this," he says. "They are the fundamentals to create value for shareholders."

And, with a clean balance sheet, restructured capital structure, and potential C$2 mln in the kitty, it looks like Kincora will at last be able to get down on the ground and really go to work on its Mongolian projects.

Link to article

Link to KCC release

 

TerraCom Appoints Camercan McRae as Chairman

June 6 -- TerraCom Limited (TerraCom or the Company) (ASX: TER) is pleased to announce the appointment of Mr Cameron McRae as Chairman effective immediately.

The appointment is to facilitate the ongoing transformation of TerraCom into a global independent coal miner and Cameron will take an active and hands-on role in leading the Company.

Cameron has had an extensive and distinguished career in the mining industry globally. He was born in Melbourne, Australia, was schooled in Australia and Africa and obtained an MBA (Monash University/ Mount Eliza) and a Bachelor of Financial Administration (University of New England).

Cameron has served a distinguished 28 year career at Rio Tinto, holding executive level positions in 5 countries. Cameron was CEO-President of Oyu Tolgoi (OT) copper-gold business in Mongolia, CEO of Richards Bay Minerals in South Africa, Managing Director of Murowa Diamonds in Zimbabwe and Project Director for the Hail Creek Coal Mine Expansion Project in Central Queensland. In 1995 he was also a key member of the M&A team that brought RTZ plc and CRA Limited together to form the dual listed Rio Tinto.

Cameron's career highlight to date was leading the establishment of the OT business – Mongolia's world class mega project in the Gobi Desert. OT commenced construction in 2010 and the US$6 billion project was commissioned ahead of schedule and moved to full production before Cameron left in October 2013.

The Hon Craig Wallace will move from Acting Chairman to Deputy Chairman and will continue to support the growth and ongoing transformation of the Company led by Cameron McRae. The Board would like to thank Mr Wallace for his service as Acting Chairman and looks forward to his continued strong support of the Company in delivering on our strategy.

Link to release

 

CICG Acquires Gobi Minerals Group

June 4 -- CIC Gold (LSE: CICG) is pleased to provide the following general corporate update.

Acquisition of 80% Gobi Minerals Group LLC ("Gobi Minerals")

CIC Gold is pleased to advise that it has replaced the initial acquisition agreement with Gobi Minerals with a share purchase agreement ("SPA") in relation to the acquisition of 80% of the issued share capital of Gobi Minerals ("Acquisition"). Pursuant to the terms of the SPA, which is conditional upon the re-admission of the Company to the standard listing segment of the main market of London Stock Exchange plc and to listing on the Official List of the United Kingdom Listing Authority ("Re-Admission"), the Company will facilitate the sale by way of a placing of 70 million of the 280 million shares to be issued as consideration for the acquisition to the beneficial owners of Gobi Minerals (the "Vendors"), with the resulting funds being payable to the Vendors in accordance with the SPA.  This is being done to ensure that on Re-Admission the Company meets the free float regulatory requirement of having at least 25% of its issued share capital in the hands of European Economic Area residents.  

The Vendors are required to effect the transfer of the Mineral Title (defined below) to Gobi Minerals within 12 months of the date of Re-Admission.  The Vendors will be subject to lock-in agreements for a period of 12-month following the latest of Re-Admission and the transfer of the Mineral Title. 

Following completion of the Acquisition immediately prior to Re-Admission, the Company shall own the beneficial interest in 80% of the issued share capital of Gobi Minerals. The legal interest in such shares shall be held by HE Barsbold Ulambayar (a director of the Company and a director of Gobi Minerals following Re-Admission) as bare trustee of the Company (under the same form of deed of bare trust as in place in respect of the Company's interest in the issued share capital of its subsidiary, Top Ten Services Company). 

The Mineral Title is the interest/lease Ulaan Tsokhio (which is to be renamed Altan Tobchi) gold and copper project situated in the South Gobi region of Mongolia, to which Gobi Minerals has 100% rights. The lease is located in the territory of Mandakh soum, Dornogovi aimag, 560 km from Ulaanbaatar city, adjacent to Mongolia Alt Corporation Tsagaan Suvarga mine in  production and regionally to Oyu Tolgoi the world's leading copper gold mine owned by Turquoise Hill Resources Ltd (formerly, Ivanhoe Mines Ltd). 

The Company expects to commence the process of seeking eligibility for Re-Admission of the enlarged group and submitting a draft prospectus for review by the United Kingdom Listing Authority in due course.

Link to release

 

Early Warning Report – John Lee Acquires 21.58% of Prophecy

Vancouver, British Columbia, June 6 (FSCwire) - Prophecy Development Corp. ("Prophecy" or the "Company") (TSX:PCY, Frankfurt:1P2) announces that John Lee, of Suite 1301, 12 Harcourt Road, Central, Hong Kong, Executive Chairman of the Company, completed the acquisition of 75,000,000 (pre-consolidation) units (each a "Unit") at a price of $0.02 per Unit in the Company, pursuant to a private placement (the "Private Placement") which closed on June 3, 2016 for total consideration of $1,500,000 in debt.  Each Unit consists of one Common share in the capital of the Company (a "Share") and one Share purchase warrant (a "Warrant").  Each Warrant entitles the holder to acquire an additional Share at a price of $0.04 per Share for a period of five years from the date of issuance.  The Shares, Warrants and any Shares issued upon exercise of the Warrants are subject to a four (4) month hold period from the date of closing of the Private Placement.   

Prior to the Private Placement, Mr. Lee beneficially owned 20,719,116 (pre-consolidation) shares, representing approximately 5.62% of the issued and outstanding shares of the Company. 

As a result of the Private Placement, Mr. Lee now beneficially owns and exercises control over an aggregate of 957,191 (post-consolidation) Shares representing an interest of approximately 21.58% of the Company's currently issued and outstanding (post-consolidation) Shares, 32.92% of the Company's Shares on a partially diluted basis assuming full exercise of only the 75,000,000 Warrants, and 34.45% of the Company's Shares on a fully diluted basis assuming exercise of all of the Company's outstanding share purchase warrants. 

The securities described in this news release were acquired in exchange for satisfaction of $1,500,000 of indebtedness owed by the Company to Linx Partners Ltd. ("Linx") (a company controlled by Mr. Lee) under the revolving Credit Facility Agreement with the Company dated March 12, 2015, as amended.  The securities were acquired by Mr. Lee for investment purposes only, and not for purposes of exercising control or direction over the Company. 

Mr. Lee also intends to acquire an additional 52,763 (post consolidation) Shares on June 7, 2016, at a deemed price of $1.99 per Share to settle $105,000 in outstanding consulting fees owed to him.  Such Shares are being issued through the Company's Share-Based Compensation Plan which was approved by shareholders at the Company's Annual General Meeting of shareholders held on June 2, 2016.  

Generally, Mr. Lee intends to evaluate his investment in the Company and to increase or decrease its shareholdings as circumstances require, depending on market conditions and other factors, through market transactions, private agreements or otherwise.

The information contained in this news release has been provided by Mr. Lee and the Company is not responsible for its accuracy.

Link to release

Related:

Prophecy Shareholders Pass All Resolutions at 2016 AGM and Consolidates Shares Prophecy Development Corp, June 2

Back to top

Local Market

MSE Trading Report: Top 20 +0.06%, ALL +1.03% Turnover ₮21.7 Million Shares

June 8 (MSE) --

Link to report

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Economy

Historic low 2,050.85/USD set March 28, 2016. Reds are rates that set a new low at the time

BoM MNT Rates: Wednesday, June 8 Close

6/8

6/7

6/6

6/3

6/2

5/31

5/30

5/27

5/26

5/25

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USD

1,980.48

1,985.41

1,984.65

1,984.44

1,988.95

1,988.53

1,990.53

1,994.96

1,998.60

1,997.83

2,000.01

2,000.20

1,998.33

2,001.09

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EUR

2,251.81

2,254.63

2,250.99

2,213.15

2,226.23

2,213.13

2,213.47

2,232.06

2,232.44

2,228.18

2,240.21

2,246.72

2,242.63

2,245.72

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JPY

18.49

18.46

18.54

18.25

18.20

17.89

17.89

18.19

18.19

18.17

18.28

18.24

18.15

18.16

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GBP

2,881.20

2,879.64

2,852.04

2,861.17

2,871.25

2,910.61

2,907.97

2,924.41

2,943.64

2,918.93

2,896.71

2,905.39

2,912.27

2,918.59

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RUB

30.66

30.35

30.23

29.70

29.69

30.24

30.07

30.28

30.72

30.36

29.83

29.94

30.04

30.31

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CNY

301.41

302.11

302.32

301.34

302.30

301.99

302.41

304.23

304.62

304.63

305.15

305.48

305.52

305.88

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KRW

1.71

1.71

1.70

1.67

1.68

1.67

1.67

1.69

1.69

1.69

1.68

1.69

1.68

1.68

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SGD

1,463.77

1,463.47

1,457.27

1,442.39

1,445.62

1,440.44

1,440.33

1,450.77

1,450.26

1,448.96

1,446.50

1,450.58

1,448.59

1,450.85

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CAD

1,555.39

1,549.17

1,529.54

1,515.48

1,520.26

1,524.48

1,523.03

1,533.41

1,538.45

1,526.34

1,517.23

1,525.94

1,525.85

1,532.11

https://gallery.mailchimp.com/4296ba475e0a2fd5de8e5bee5/images/ec21d929-99bc-4825-8f98-d8f66d0a4814.png

AUD

1,472.98

1,476.15

1,455.54

1,438.22

1,437.41

1,439.40

1,427.71

1,440.66

1,437.59

1,442.33

1,432.81

1,448.74

1,446.59

1,442.79

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HKD

255.07

255.60

255.50

255.35

256.00

256.00

256.23

256.89

257.37

257.23

257.48

257.50

257.34

257.65

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CHF

2,051.57

2,044.60

2,031.68

2,003.17

2,013.11

2,004.47

2,001.14

2,015.93

2,018.07

2,014.86

2,017.87

2,022.04

2,017.09

2,027.34

Bank USD rates at time of sending: Khan (Buy ₮1,975 Sell ₮1,985), TDB (Buy ₮1,975 Sell ₮1,985), Golomt (Buy ₮1,974 Sell ₮1,984), XacBank (Buy ₮1,974 Sell ₮1,984), State Bank (Buy ₮1,977 Sell ₮1,987)

MNT vs USD (blue), CNY (red) in last 1 year:

Link to rates

 

BoM issues ₮27 billion 1-week bills at 10.5%, total outstanding +0.4% to ₮240.4 billion

June 8 (BoM) BoM issues 1 week bills worth MNT 27 billion at a weighted interest rate of 10.5 percent per annum /For previous auctions click here/

Link to release

 

BoM declines bids for US$1.7m, CNY1.7m, accepts $237.5m MNT swap offers

June 7 (BoM) --

Spot trade: Commercial banks bid MNT1973.00-1977.00 for USD1.7 million, MNT302.02-302.62 for CNY1.7 million. The BOM did not accept any offers. 

Swap and forward trade: The BOM accepted the bid offers of USD 237.5 million of MNT swap agreement from commercial banks.

Link to release

 

Mongolia Sees $225.4 Million FDI Jan-Apr, Down 32.2% from 2015 – Preliminary

June 6 (BoM) --

Main indicators            

Current account amounted to the surplus of $86.6 million in the first 4 months of 2016, which had deficit of $131.1 million in the same period of 2015. The change was mainly due to increase of $57.5 million or 11% in goods account surplus, increase of $41.7 million or 167% in current transfer account, decrease of $16.6 million or 5% decrease in services deficit, and decrease of $101.8 million or 34% in income account deficit. 

Capital and financial account had surplus of $279.3 million bringing the positive change of $354.2 million compared to the same period of the last year. The change was substantially due to the increase of foreign direct investment to the enterprises, and fund from Mongolian government issued bonds on the international market.

Detailed information

·         Preliminary Balance of Payments for April, 2016

·         External sector statistics

Link to release

 

World Bank Vice President of East Asia and Pacific to visit Mongolia

ULAANBAATAR, June 8, 2016 (World Bank) – World Bank Regional Vice President for East Asia and Pacific Victoria Kwakwa will visit Mongolia from June 9-10 and participate in the Finance Ministers' Meeting under the Asia-Europe Meeting (ASEM).

During Kwakwa's visit, her first since taking office in April, she will meet with government officials. At the ASEM Finance Ministers' Meeting, she will serve as a lead discussant for a session titled Ensuring Financial Stability at Regional and Global Level: Experiences from Asia and Europe.

"I am delighted to visit Mongolia at this important moment when the country is hosting the ASEM Finance Ministers' Meeting. Global integration brings both benefits and risks, and the topic of financial stability is very timely," said Ms. Kwakwa.  Noting that financial sector development has been a long-standing area of partnership in the quarter century since Mongolia joined the World Bank, Kwakwa highlighted the enduring partnership. 

"From the advent of the two-tier banking system to the reforms following the global financial crisis to present efforts to develop the capital markets and strengthen stability, we have supported Mongolia's aspirations."

During her visit, Ms. Kwakwa will also visit beneficiaries of projects supported by the World Bank Group over the years, including those that focus on rural development, education, and financial services development.  These include the Sustainable Livelihood Project, Rural Education and Development, Education Quality Reform Project and the Index Based Livestock Insurance Projects.

Ms. Kwakwa will be accompanied by Mr. Bert Hofman, the World Bank's Country Director for China, Mongolia and Korea, and Mr. James Anderson, Country Manager for Mongolia.

Link to release

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Politics & Legal

498 Candidates to Run for 2016 Parliamentary Elections in Mongolia

Ulán Bator, Jun 7 (Prensa Latina) Head of the General Election Commission (GEC) Choinzon Sodnomtseren said today that 498 candidates will stand in the forthcoming parliamentary elections in Mongolia, scheduled for June 29.

The Democratic Party (DP) and the Mongolian People's Party (MPP) will run for the elections with the largest number of candidates - 76 each, while the Mongolian People's Revolutionary Party (MPRP) will have 71 candidates.

Furthermore, the Sovereignty and Unity Coalition of the Sovereignty and Unity Party and the Mongolian Green Party will compete for 44 parliamentary seats; Republican Party - for 36; Civil Movement Party - 27; Mongolian Social Democratic Party - 17; Civil Will Green Party - 15; Mongolian Conservative Party and Cherish the People Party - for 13 seats each; Mongolian Conservative United Party - 11; the Khaan Choice Coalition of the Development Party, the Mongolian Liberal Party and the Freedom Exercising Party, and the Unified Coalition of Patriots of the United Party of Patriots and the Labor Party of Pan-Mongolia - for 9 seats each; Democratic Movement Party for 3.

Apart from the candidates from the political parties and coalitions, 69 independent candidates will stand in the elections. Statistically, 25.9 percent of the candidates are women.

Link to article

 

Mongolia Gives Electoral Program More Flexibility, Lets CWGP In

Ulan Bator, Mongolia, Jun 2 (Prensa Latina) The Mongolian Supreme Court reported today that it will allow the Green Party (Mogi: they mean the Civil Will-Green Party)  to participate as an independent entity in the parliamentary elections on June 29th.

The Green Party sent a complaint to the courts against the local Electoral General Commission, because the Commission was not allowing the organization to participate in the upcoming elections.

After the decision, the Green Party announced it would take part in the electoral process, and started the selection of candidates, but it is not yet clear if the Electoral General Commission will accept the decision.

In the last few hours, 11 political parties and 3 political alliances have presented the documents with their candidates to the Commission.

The last elections in Mongolia were held on June 26th, 2013, in which Tsakhiagiin Elbegdorj, from the Democrat Party, was elected president.

Link to article

 

A month before elections, Mongolia's economy is in shambles

ULAANBAATAR, June 2 (Nikkei Asia Review) The 18-building apartment complex in southern Ulaanbaatar has seen better days. Constructed in the late 1940s, its buildings are now so rickety that there are fears they may collapse. The government decided the complex should be torn down and a new one built -- but that was several years ago.

"When will they demolish this building? I want to move into a new condominium soon," said Enkhbaatar, a 43-year-old livestock farmer who lives in one of the cramped, drafty units.

Under the government's original plan, the successful bidder for the project would use its own funds to tear down and rebuild the complex, and the government would pay the bill upon completion. But then Mongolia's economy slowed, and the construction company that won the bid pulled out, citing fund shortages. Other companies tried to take over, but none of them have been successful. Just when the complex will be knocked down remains unknown.

With rebuilding unlikely, the government has settled for cosmetic improvements, repainting the exterior wall of some of the buildings in May. Critics say the ruling Democratic Party is trying to give a facelift to buildings along the route where motorcades of foreign VIPs will pass when the country hosts the Asia-Europe Meeting in July. When this reporter was visiting the apartment complex, a woman who seemed to be a Democratic Party supporter asked me if I had been sent by the main opposition Mongolian People's Party. She also stopped me from taking photos.

The general election scheduled for June 29 is projected to be a close race between the Democratic Party, which is feeling the heat from corruption scandals involving its lawmakers, and the People's Party. Whichever side wins, rebuilding state finances and reviving the economy will be job one for the new government.

Enkhbaatar, who has a wife and five children, has lived in the apartment complex for his entire life. The family is to be given an apartment in the yet-to-be-built condominium, but with the project stalled, he has no choice but to continue living in his 7-sq.-meter room.

The tiny space has a TV and a washing machine but no shower. The family has to share a bathroom and a kitchen that has no hot water with other residents. Temperatures fall to minus 20 to 40 C in midwinter. The freezing drafts are almost impossible to bear, Enkhbaatar said.

Because the room is too small for a family of seven, Enkhbaatar's three preschool-age children live in a traditional tent called a ger in a town some 50km from the capital. The family sells milk and earns 15,000 tugrik ($7.50) a day. He cannot sell the room or use it as collateral for a loan until the new condominium is built. All he can do is wait for the day when his whole family can live under one roof.

FEAST TO FAMINE The Mongolian economy is taking a beating on multiple fronts.

Rich reserves of coal, copper and other resources are a key revenue source for the country, but they also make it susceptible to market fluctuations. Copper prices nosedived in the wake of the 2008 global financial crisis, sending gross domestic product growth to minus 1.3% in 2009. The ensuing resources bubble helped the country post double-digit growth between 2011 and 2013, but the economy has lost momentum since 2014 in tandem with falling resources prices. The World Bank estimates that Mongolia's GDP expanded 2.3% in 2015 and will grow just 0.8% in 2016.

Link to full article

 

Mongolia's Mangled Politics

How the Parliamentary Election Will Play Out

By Morris Rossabi

May 30 (Foreign Affairs) Given how unhappy Mongolians are with their current government, which they consider inept and corrupt, it would seem that there would be more excitement surrounding the country's parliamentary elections on June 29. After all, there are 11 competing parties to choose from. But according to a poll conducted by the Sant Maral Foundation, Mongolia's major polling organization, respondents expressed little confidence in any of them. Barely 14 percent said they would support the Mongolian People's Party, the leading opposition party, and only 11 percent backed the ruling Democratic Party. Meanwhile, over one-third reported that they did not trust any of the parties to properly lead the country, and 77 percent stated that none of the parties accurately represented public opinion. Part of the problem is that Mongolia is in the middle of a steep recession due, in large part, to China's declining demand for Mongolian minerals, and none of the political parties seems to know what to do about the economic downturn.

Foreign advisers and visiting dignitaries often tout Mongolia as a democracy. But the country is less a successful transition story and more a lesson in the failure of Western economic policies. The story begins with the collapse of Mongolian communism in 1990s, after which the country continued to regard Russia more highly than the United States. This was due to a certain nostalgia about better conditions during the Soviet era. According to Sant Maral, roughly 61 percent of Mongolians still believe the country should make Russia its primary economic and diplomatic partner, while only seven percent think the United States should take that role. The United States is, in any event, too far away to play as much of a role as Mongolia's two close neighbors, Russia and China.

Much of the disenchantment stems from the country's tumultuous transition to democracy. In the early 1990s, after the fall of the Soviet Union, which had been Mongolia's most important trade partner, investor, and adviser, Ulan Bator sought help in transitioning to a democratic capitalist system from the Asian Development Bank, the International Monetary Fund, as well as individual countries, including Germany, Japan, South Korea, and the United States. The West prescribed "shock therapy," a popular course at the time, which involved immediate privatization, minimizing the government, prohibiting subsidies, balancing the budget, and liberalizing prices and trade, alongside cutbacks on social, educational, and medical expenditures. Many "shock therapy" advocates, including the International Money Fund, have since partly renounced this practice, which was later deemed "shock without therapy." Although the stringent policies did work for a few post-communist countries, such as Poland and the Czech Republic, for Mongolia, they were a disaster.

The sudden and immediate implementation of the program initially triggered massive inflation, unemployment, and poverty. The health system collapsed, and today, at least 30,0000 Mongolians travel each year to South Korea and Thailand for medical treatment. More would if they could afford the trip. The Human Development Index, a gauge of the population's welfare, ranks Mongolia 110 of 185 countries.

At the time of the transition, most Mongolians were in the dark about how a market economy works. Some Mongolians who did have some knowledge of capitalism gained an upper hand by seizing property—animals, grazing land, and water supplies—that had once belonged to collectives known as negdels. In Ulan Bator and other towns, individual Mongolians received coupons that entitled them to shares in their work places. Entrepreneurs who understood the worth of these coupons purchased them at way below their value or bought actual public assets at fire sale prices. The elites, and those connected to officials, also benefited, setting the stage for extreme income inequality.

Corruption exacerbated the country's difficulties. Despite the establishment of an Anti-Corruption Agency in 2006, bribery, graft, and nepotism have been pervasive. In 2015, Transparency International ranked Mongolia 72 out of 179 countries in its Corruption Perception Index, and the country's Judicial Index, as of 2012, Mongolia ranked at an appalling 122 out of 142 countries. The same organization offered Mongolia a rating of only 28 percent in its effectiveness in combating corruption. In 2012, Mongolia's former President, Nambaryn Eknhbayar, was found guilty of graft and sentenced to four years in prison. Leaked documents from the Panamanian firm Mossack Fonseca, which helped wealthy individuals set up off-shore accounts, revealed that a number of high-profile Mongolian officials' family members have such accounts: the son of the mayor of Ulan Bator, two daughters of a former prime minister, and the principal adviser to the current prime minister. To be sure, offshore accounts are not illegal. But they do raise questions about how young progeny of state officials came into so much money.

The sharp divide between the rich and the poor is most apparent in the capital. The central square, which houses the parliament (known as the Khural in Mongolian), also rents space to Louis Vuitton, Burberry, and Emporio Armani in a towering, modern building that clashes with the surrounding Soviet-style architecture. A few miles away lies the ger (or tent) district, composed principally of hundreds of thousands of rural migrants who live in the capital with scant access to running water, electricity, or sanitation. Most of them abandoned the countryside after the government ended communist-era socialist programs. Some were also forced out bymining companies that took over their grasslands and water supplies.

In the late 1990s, the liberalization of trade also led to a suspension of many tariffs, which spurred a flood of cheap Chinese imports (from food to textiles to machinery). The resulting decline of Mongolia's indigenous industries has made the country ever more dependent on selling its relatively abundant mineral resources. Several international financial agencies advised the Mongolian government to move forward on mining agreements with foreign countries and did not sufficiently emphasize mining's impact on herding and the environment, not to mention that it would increase Mongolia's reliance on China, its main customer and now its largest trading partner and investor. But in recent years, China's stagnating economy has led to fewer purchases of Mongolian gold, copper, and coal. This, in turn, has contributed significantly to Mongolia's recession. Minerals accounted for 89 percent of exports in 2012, while exports of coal declined about 40 percent from 2012 to 2015. GDP growth has spiraled downward from 11.6 percent in 2013 to 2.3 percent in 2015.

Some Mongolians have been critical of the government for negotiating a deal in 2009 with Canada's Ivanhoe Mines of Canada and Australia's Rio Tinto, which are developing the Oyu Tolgoi deposits of gold and copper in the country's south. In March of 2016, several thousand people demonstrated in Freedom Square against Rio Tinto's call for a joint $4.5 billion loan to develop a large underground mine at Oyu Tolgoi. A standoff ensued for more than two years. In November of 2014, Chimed Saikhanbileg became prime minister and vowed to renegotiate the agreement. He has kept his promise, but the terms of the resulting agreement are not transparent and the benefits for Mongolia are still unclear. Criticisms of the deal persist, and accusations of bribes and payoffs abound.

Although the ruling Democratic Party has been unable to improve the economy, no other party has put forth a better plan in the lead up to the election. For example, the Democratic Party touts the recent agreement with Rio Tinto as the harbinger of economic growth, while the Mongolian People's Party and the Mongolian People's Revolutionary Party say it's not enough and are pushing for a better agreement with the company. However, both of these parties are plagued by internal disputes and corruption and have failed to capture the people's support. The Mongolian People's Party and the Mongolian People's Revolutionary Party, the old Communist Party, have not captured the people's imagination either. The Civil Will Party, led by the charismatic Sanjaasuren Oyun, has been unable to elect more than one or two members to the Khural despite its progressive anti-corruption, transparency, and social welfare agendas. They haven't been able to gain traction because the Party centers around Oyun and has been unable to recruit many politicians to join its cause. The National Labor Party and other smaller parties are not well known and have little chance of sending more than a few members to the Khural.

The lack of enthusiasm for any political party has unnerved many patriotic Mongolians and foreign observers. Although recent surveys indicate that Mongolians still have faith in democracy—roughly 63 percent supported democracy, 17 percent opposed democracy, and the rest did not have an opinion, according to Sant Maral—there is no guarantee that such a commitment will persist. The issues that would excite the country to vote in June include a reduction in income inequality and corruption; improvements in social welfare, education, healthcare, housing, and infrastructure; and a plan to minimize the impact of mining on herding and the environment. And yet, none of the 11 parties so far have built a cohesive or effective campaign to address Mongolia's persistent ills. This will no doubt result in a rather uninspiring election come June.

Link to article

 

Uniting China and Mongolia by Rail

June 3 (China Cristian Daily) On Monday, Chinese authorities announced that the first unified standard railway that would connect the country to Mongolia has started construction.

The railway would be passing through the entry point in Ceke, which connects China and Mongolia. The rail line would be 1,435 mm in width in comparison to the 1,520 mm width requirement in Mongolia. The creation of the new rail line is expected to help Ceke become the largest port of entry in China to Mongolia and bring in cargo of almost 30 million tonnes.

The Ceke port was first opened in 1992 but its operations were seasonal. In 2009, they officially opened the port for regular operations.

Link to article

 

Project Brief: Mining Infrastructure Investment Support (MINIS) Project, Mongolia

What is the MINIS project?

The MINIS project provides technical assistance to help Mongolia build its capacity to apply international standards when analyzing and preparing infrastructure projects for possible investments.

Does it finance investments?

No. The MINIS project finances only technical assistance and therefore no infrastructure investments are eligible for financing under the MINIS project.

What does it finance?

MINIS finances the preparation of studies, including feasibility studies (technical and economic assessment), as well as environmental and social impact assessments. It also helps to build local capacity to plan and prepare infrastructure projects.

What is the MINIS project's role regarding any planned hydropower projects on the Selenga river?

The MINIS project is financing feasibility studies as well as environmental and social impact assessments for a proposed hydropower project (Shuren Hydropower Project) on the Selenga River and a proposed water diversion subproject (Orkhon-Gobi Water Project) on the Orkhon River, a tributary.

Are the potential impacts of these projects properly assessed?

The key objective of the feasibility studies and the environmental and social impact assessments financed under the MINIS project is to make sure all impacts from potential investments are properly assessed. This includes potential impacts on communities, both in Mongolia and Russia as well as impacts on the Lake Baikal ecosystem.

Will there be consultations with potentially affected communities?

Yes. As part of the assessments—and as required by World Bank operational policies in general and our policy on environmental assessment (OP 4.01) in particular—there will be thorough consultations with potentially affected communities both in Mongolia and Russia. Several consultations have already taken place (see list).

Consultations: In 2015 and 2016, the project implementing agencies carried out eight consultation events on the project concept and ToRs – 5 for SHP and 3 for OGW – with potentially affected people and other stakeholders. For each event, comments were received, a response matrix was developed and the ToRs were revised in response to the comments and recommendations.

·         Consultations for Shuren: In addition to the consultation event held in: (1) Ulaanbaatar on January 16, 2015, follow-up consultations were held in (2) Tsuuts Bag Selenge Soum, Bulgan Province, on May 23, 2015, and in (3) Atar Bag Selenge Soum, Bulgan Province on May 25, 2015. Further local area consultations were held on April 18 and 19, 2016, in (4) Selenge Soum and (5) Atar Bag.

·         Consultations for Orkhon: In addition to the consultation event held in: (1) Ulaanbaatar on January 29, 2015, further local area consultations were held for Orkhon in (2) Khishingundur, Khangal Soum and (3) Khyalganat village near the potential project site on April 17-18, 2016. Reports on these most recent consultations are forthcoming. In addition, a review of the prefeasibility phase also identified that local area consultations had been held on the project concept in Tov Province, Dundgobi Province, Umnu-Gobi Province, Bulgan Province, and Arkhangai Province, from November 11 to November 17, 2013.

·         Consultations and technical meetings held in Russia: Three main events were organized in Russia by the Russian stakeholders. These are:

o    Stakeholder consultation organized by the District of Kabanski, State of Buryatia, on February 28, 2016. The Bank as well as the MINIS Project Management Unit (PMU) received the consultation outcome (meeting minutes and comments and recommendations on the draft ToRs).

o    Technical discussion meeting organized by the Russian Ministry of Natural Resources and Environment. The meeting took place in Moscow on April 11-12, 2016. The Bank as well as the MINIS PMU Director attended the discussions.

o    A regional conference on Rivers of Siberia was organized by regional CSOs in November 2015 in Irkutsk. Bank Management attended the conference and presented the Bank's safeguards policies. The outcome and recommendations from the conference were received by the Bank and shared with the PMU for its consideration in the finalization of the ESIA ToRs.

Link to brief

 

Democracy in Decline?

By Julian Dierkes

June 2 (Mongolia Focus) Is it time to worry seriously about the state of democracy in Mongolia?

Mongolian Democracy in International Context

Globally, democracy appears to be declining. After the euphoria of the post-Cold War spread of democracy and various seasonal and coloured revolutions around the world, there seems to be an overall trend of backsliding. This is prominent documented in attempts to measure the state of democracy globally, such as Freedom House's Freedom in the World Index. The 2016 edition of the Freedom in the World report is entitled "Anxious Dictators, Wavering Democracies: Global Freedom under Pressure".

Seen in this global context, Mongolia is a bright spot.

In a regional context where democracy is declining across SE Asia (except for Myanmar, perhaps), for example, and not deeply institutionalized across the Asian continent, Mongolia remains the only post-state socialist democracy in Asia.

It is important to take note of this exceptional status of Mongolia, especially given the rather tough neighbourbood that it finds itself in in terms of good governance and democracy with its sometimes overbearing immediate neighbours Russia and China.

Note that it is Mongolian dedication to democracy that I usually emphasize in discussions outside of Mongolia. Such discussions have always acknowledged the numerous challenges and contradictions that are inherent to democracy, and the fact that most democracies continuously search for improvements to electoral systems, the nature of parties, and the engagement of voters. Mongolia is no exception to this, nor are Canada or Germany.

Mongolian Democracy in a Domestic Context

While it is important to emphasize Mongolia's democratic achievements when comparing them to other democratic and non-democratic countries, it is also important to take stock of the country's democratization in the context of Mongolians' aspirations. Here, recent polls (SantMaral | IRI)  seem to suggest clearly that while Mongolians are devoted to the idea of democracy, they are (increasingly) unhappy with the political institutions that govern the country.

While these doubts about political institutions have existed for some time, there are some new elements to concerns about the trajectory of democracy. For me these concerns centre on

·         a new sense of fear and intimidation of critical voices

·         more and more blatant manipulation of the electoral process

·         more and more blatant disregard for the courts and the constitution

·         the ongoing absence of policy or, indeed, political debates.

Let's go from the most general to the more specific concerns.

The Absence of Political Debates

Elections and the general political process are intended to give citizens the opportunity to determine the direction of developments of the nation. In many democracies this expression of the citizens' will is mediated by political parties who stand for particular ideologies or approaches to national development.

Elections are not intended as a contest over who can secure power for power's sake, but rather for the sake of seeing through a particular vision for the country.

Popular and fringe political parties in Mongolia have not developed strong ideological or policy-related profiles over the 25 years of democracy. While the General Election Commission is currently examining election platforms, I don't think anyone is expecting radically different proposals by the DP from the MPP, for example. Even on the most consequential questions facing Mongolia, for example regarding the development and governance of mineral resources, the parties do not have distinct positions. Recall as an example the 2008 campaign: The DP offered a cash payment of₮1mio to each citizen. The then-MPRP trumped this with a ₮1.5mio offer. Were these different conceptualizations of Mongolia's future? Differences between the parties, including the smaller parties, often mirror this past campaign promise in that they do not speak to a different approach to policy-making or different policies to be pursued.

Given the lack of political profiles among the parties, voters are deprived of the opportunity to make their views on important questions heard. This leads to the apparently wide-spread sense that voters do not have any real alternatives to chose from. This is not a new nor an unusual feature of Mongolian democracy, but in the current context of changes to the electoral system, it is a feature that is ever clearer and where there are few visible changes.

Note, however, that it is in the hands of Mongolian voters to change this by voting for political options that are defined by policy (differences), as long as the electoral process allows them to do so. That opportunity is looking more remote for this coming election, however.

Disregard for the Courts and the Constitution

The track record of Mongolia's governments in terms of respecting the courts is somewhat spotty. Of course, democratic governments all over the world disagree with courts' decisions. That is perfectly fine. All constitutions provide a process by which legislatures are able to overrule court decisions as the legislature represents the voice of the people, the courts are only meant to adjudicate between conflicting views of the law. However, it is the process by which legislatures and governments are able to respond to court decisions that is important. A prerequisite for this process is an independent judiciary, that is a court system where judges are respected and where they do not need to fear retaliation by the government if they overturn a law.

Of course, judges are not above the law themselves.

However, over the past six months we've seen instances of the dismissal of judges that are ostensibly based on misdeeds, but fairly transparently are motived by political opposition. That is a very dangerous precedent because it opens the courts to manipulation. There's no point to courts that can be manipulated politically.

The same disregard for the courts found an expression in the brief flurry of a constitutional debate late in 2015. While discussions of constitutional structures are important and 25 years seems like an entirely appropriate time to have such discussions, no real discussions occurred. There were proposals, including on the important question of the balance of power between the presidency, the cabinet and the State Great Khural. But the speed with which these proposals were dropped suggests that the proposal was primarily rooted in political purposes, perhaps a side skirmishes to distract from more important and pressing decisions, rather than a genuine constitutional discussion.

Casual and half-baked constitutional proposals are not likely to instil a respect for the constitution which does, of course, provide the most basic set of rules that govern political processes.

The High Court decision that proportional representation is not constitutional also strikes me as primarily political rather than judicial. Obviously, there are very legitimate debates about different electoral systems and how the impact that the wording of the constitution has on this choice. Ironically, Canada is debating a shift to proportional representation just as Mongolia has been abandoning it.

But it should be remembered that stability in the electoral system is a virtue most of the time. It means that voters understand how they're voting and that results are more easily anticipated and thus more legitimate. That is not to say that there should be no discussion about alternatives; it would be good to recall, however, that all electoral systems have biases and flaws, so endless tinkering will not bring a perfect system. For Mongolia, the coming election will be run under the 2004 electoral system of 76 first-past-the-post constituencies which means that the last three elections (2008, 2012, 2016) will have all been conducted under different systems.

Regarding the High Court decision, I also have to find it rather curious that the Ikh Khural was elected in 2012, sat as a legislature for four years and just 2 months before the next election its constitutional legitimacy is challenged? Is there a legitimate argument that does not see this as politicking?

Manipulation of the Electoral Process

The broader electoral system is one of the challenges that Mongolian voters will be facing, but there have been numerous other changes that look like political manipulation to preserve power, not a deepening of democracy. The DP and MPP as the largest and best-organized parties are the likely beneficiaries of these changes and appear to be colluding in bringing these changes about. The switch to majoritarian districts is thus one that is likely to be a disadvantage to smaller parties and independents.

Sure, a shortening of the campaign period to 18 days means that less money will be spent, but it also gives an advantage to incumbents and well-established political forces, including the two big parties. And given that there has been little effort to reform campaign/political finance otherwise (despite some recurring proposals to do so), it's hard not to think of this as primarily a move to lock out independents and smaller parties.

The fact that candidates are not allowed to make appearances in their constituencies until the beginning of the campaign period also gives an advantage to incumbents who are allowed to continue to go about their (political) business.

It seems like no efforts are being spared to keep out any upstart parties and independents. While the XUN Party has self-destructed through internal conflict to some extent, the fact that it is being excluded from the campaign largely on formal grounds of late submission of paperwork, etc. speaks volumes about the seriousness of the effort to keep smaller parties out. Of course, administrative requirements and provisions of the election lawshould be enforced, but why have these provisions been put in place in the first place? Have they been included to promote democracy or to limit it?

The same argument might apply to the MPRP and N Enkhbayar's candidacy in particular. I am not arguing that former president Enkhbayar has been a force for democratization and general well-being before or since his criminal conviction, but he continues to be the preferred political option of a significant number of Mongolians. He, like any candidate, needs to adhere to administrative and legal requirements, but by the same token, these requirements should not be designed to deliberately limit democratic choices.

All this is happening, as I have argued above, in the absence of political programs from the DP and MPP and thus appears to be a fairly naked bid for the preservation of power.

A New Sense of Intimidation

What is most startling and entirely new to my experience in Mongolia is a sense of dread and sometimes even fear among Mongolian friends, especially journalists and public figures. Whether or not the allegations about the political use of the security apparatus are true or not (or if they can ever be true given that they trade in the currency of conspiracies, etc.), the mere fact that some Mongolians now appear to be afraid about speaking out is a terrible development. For this, only the current government and thus the DP can be blamed since they (legitimately) control the security apparatus.

For me that development started around the death/murder of Bolormaa, the former editor of the Mongolian Mining Journal. As far as I know, we still have not been given an official and conclusive answer on the question of whether she was murdered or not. That in itself is worrying, but it is also a sign of the disregard for critical voices. Bolormaa had become increasingly outspoken in her writing and criticism of corruption prior to her death. The sense that this might have been the ultimate motivation for her murder – IF it was murder – seems widespread.

A much less extreme and traumatic step was the dismissal of Jargal De Facto by MNB. While all kinds of official reasons were given, this seemed to be the consequence of Jargal calling out political interference in the courts.

Bolormaa and Jargal de Facto have in common that they are journalists that have established themselves as independent and critical voices. Not critical in a partisan way, but rather calling on politicians to not be corrupt and to be dedicated to the tasks that they have been elected too, criticisms that an independent and free press is essential for in democracies.

At an event during my last trip to Ulaanbaatar, I was taken aside and asked to recall the provisions of the election law in choosing how to present my views. That is entirely appropriate. When I speak in Mongolia, I am obviously subject to the provisions of Mongolian law and it is good to be reminded of that. However, I also take note that this was the first time that anyone had ever felt like such a reminder is needed.

Why? Because the election law bans comments on the likely result of the election and any comments that might be interpreted as benefitting or denigrating any parties that are running in the election.

I have always thought that some of the provisions of Mongolian election laws have been innovative and worth considering. The ban on polling is an example of such a provision as polls do certainly sway voters in elections elsewhere. However, when the intention to allow citizens to submit their vote without any undue influence by polling and others' opinions turns into a restriction on analyses of the political scene and discussions of the implications of electoral outcomes, that goes too far in my mind.

My Worries

In sum, I am worried about the fate of two essential ingredients of any democracy in Mongolia:

1.    free, lively, unencumbered political debate

2.    elections as an expression of the populations' intentions for the future of their country.

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Julien Dierkes: Transparency and My Independence

Mongolian Version

June 3 (Mongolia Focus) Since around 2014, I have increasingly been asked why I am interested in Mongolia. As my interest is academic and curiosity-driven, I thought it best to offer a discussion of my independence in providing analyses of contemporary Mongolia, especially with anotherelection looming in 2016. Note that I've already written about the roots of my interest in Mongolia (English/Mongolian), but want to add a discussion of my independence to that post.

Academic Freedom and Professional Autonomy

I am a tenured associate professor.

What does that mean?

"Tenured", in a nutshell (though not legally) means that I hold my position until I retire. Short of doing something pretty terrible or not fulfilling my obligations, I cannot be fired by my university. For more discussion, you might enjoy the Wikipedia entry.

Why would a university ever offer a professor tenure? The system of tenure evolved with the establishment of universities as one of a number of safeguards of academic freedom. Essentially, universities (at least in their origin in Europe and their institutionalization in N America) have recognized that researchers who are free to follow their research interests are more likely to make "heretical" academic discoveries. While not every professor who thinks that everyone else is wrong about a particular aspect of our understanding of the world, is right, every once in a while a researcher comes along who offers an entirely novel perspective. S/he is protected by academic freedom to elaborate this perspective and pursue a research agenda.

How is Tenure Granted and What does it Mean?

How is this security and the professional autonomy that comes with it earned? In Canada, researchers (in the social sciences where I dwell as a sociologist) are typically hired when they are about to complete their PhD (i.e. defend their dissertation), or after they have completed their PhD. Note that the PhD requires different kind of reviews at different institutions, sometimes involving outside examiners (outside one's department or even university) as well as professors who have not been advising the student. Today, the PhD is essentially required to become an assistant professor in Canada.

Typically, assistant professors are then hired on a three-year contract. After three years this contract is renewed following a review for another three years. After these initial six years, an assistant professor then applies for promotion to associate professor rank AND for tenure. The process to grant this promotion and tenure again involves the review of the applicant's research (publications, often prioritized over other aspects), her/his teaching, and contributions to the operations of the university. These achievements are reviewed within the applicant's unit (i.e. department, in my case, UBC's Institute of Asian Research). That unit then issues a recommendation to a committee at the Faculty level (in our case, the Faculty of Arts, for example), which in turn issues a recommendation to a committee at the university level. That committee issues a recommendation to the university president who generally follows these recommendations. This process all in all lasts about a year and then results in promotion with tenure, or in a final year-long contract after which the individual who has been denied tenure & promotion will have to find a job elsewhere.

This lengthy process involves myriads checks and balances. For example, to prevent departments from simply reproducing themselves by pressuring assistant professors to follow the example of senior professors, committees beyond the department are involved. Also, criteria for the evaluation of applicants for promotion are somewhat general, but are meant to give candidates an idea what they need to be striving for in terms of research, teaching (including teaching evaluations and graduate supervision), and service.

And in the end… the lucky candidate like myself is rewarded with tenure, giving me job security and the professional autonomy to select my areas of interest. At UBC there are additional annual merit evaluations that can result in additional pay increases, and there is also promotion from Associate to Full Professor (following a roughly similar process to that for tenure and promotion to Associate), but even without merit pay increases, an associate professor could stay in his/her job until her/his retirement.

Especially on matters of academic and research substance, this entire system is designed to isolate an academic from any imaginable pressures in choosing the subject matter, theoretical orientation, or methodology for their research. A Dean, Provost or President may well discuss my research with me (obviously, I would be delighted to talk about my research), but they are generally not in a position to tell me what to do research on. As it comes to my Mongolia interests, there is thus no "superior" or "boss" who could direct me to study one subject matter over another, or to take a particular perspective in my research.

Financial Benefits

Investments

As an academic, I am well-paid, but not well enough to be a private investor of any significance. I thus have no direct financial stakes in any companies doing business in Mongolia or anywhere else.

My UBC pension fund invests in all kinds of companies and financial instruments, including some tied to the mining industry and/or to Mongolia, but those decisions are removed from my views and activities in Mongolia and I actually don't know what exactly investments my pension fund may hold.

Consulting

I have benefitted from the fact that my understanding of Mongolian political developments, and of mining policy, has been useful to various individuals and companies in the past. I have thus been able to offer some limited consulting services, primarily to financial investors who are keen to develop an understanding of the likelihood of political changes or on investments they may be considering. I also contribute to some systematic attempts to capture political and other risks, and some of these contributions are paid.

The grand total of my income from such consulting opportunities over the past 10 years would amount to less than twice my monthly income. Other than with a small number of global indices (of the kind listed on my Mongolia Scorecard), I have not had any sustained relationship with any clients of this kind.

Other Funding

I have been fortunate enough to find support for many trips to Mongolia and academic activities from a variety of sources, including private individuals, companies, foundations, and governments.

The largest amount of funding was related to a conference I organized in 2008 that was held at UBC and resulted in an edited book, "Change in Democratic Mongolia". All the funding I received in that context went toward paying for participants in the conference to attend and for their accommodations, food, etc., as well as some research assistance. I have received some small amounts from the Canadian government, typically to support conference trips.

Accepting Funding

I would be delighted to accept donations, endowments, or any other kind of support for Mongolia activities at UBC. That support would be appropriately acknowledged and such acknowledgment would also signal the source of the funding.

Note that the same kind of professional autonomy that is in place for me as a researcher, holds for UBC as an institution. If we were to receive a significant donation to support Mongolia activities, for example, this would be accepted only on the condition that all substantive and especially all academic decisions would be made within the university. Typically, a donor sets the direction for activities based on a donation but does not select or endorse specific activities. For example, someone might fund another significant conference on contemporary Mongolia, perhaps even with a theme, but the selection of presentations would be academically-driven, not determined by a donor.

In sum…

I would confidently claim that I have not been influenced and would be unlikely to be influenced in the future by any financial advantages I might derive from support of my Mongolia research.

Political Independence

Nations

I am not a spy.

I do like to read spy novels, watch spy movies, and I did grow up in (West) Berlin, by some accounts the one-time greatest hotbed of Cold War espionage.

However, I do not act on any governments' behalf, neither my native German government, nor the Canadian government. Not even the Mongolian government, although my enthusiasm for all things Mongolian might make some people believe that I act on behalf of Mongolia.

Somewhat disappointingly (to this delighted reader of spy fiction), no government agency has ever attempted to hire me as any kind of spy.

Political Parties

I do not actively support any Mongolian political party. Nor am I a member or active supporter of any particular party anywhere else. I would say that my political leanings are broadly social democratic, but that orientation doesn't match all that well onto the Mongolian political scene.

I know members and activists of several Mongolian parties and I enjoy political conversations with them. I also have had and will continue to have interactions with governments and the party members that fill important positions in governments.

Surely, some political activists have tried and will try to convince me of political positions or statements that might benefit their party more than another party. And, I'm sure, that I have been convinced by such political arguments in the past and that this will also happen in the future. However, I hope and I am reasonably confident that I am persuaded by the power of an argument or evidence for a perspective, not by a party affiliation or my personal association or friendship with a political activist.

Some Views of Mongolian Politics

In general, I strive for political neutrality in my comments on Mongolian political developments.

I do believe that Mongolia would benefit from more substantive political debates and from the introduction of more evidence-based policy proposals. But that holds for the entire spectrum of political views and is really more of a perspective on the political process, rather than a perspective on any particular political party.

I have little understanding for the kind of corruption that seems to involve personal enrichment, typically at the expense of fellow countrymen and women. I find that kind of behaviour in politicians deplorable no matter what political stripes politicians wear.

I am also not a great fan of political maneuvers that are carried our for political gain, independent of the benefit or loss to the nation. One of the aspects of learning more about Mongolia that makes this an interesting endeavour is the feeling, nay knowledge, that Mongolia's potential is enormous. If only… is an attitude that could be applied to many aspects of contemporary Mongolia. This is especially true of politics.

Abuses of power and its use for political gain are more likely to occur in a ruling party or among members of a government, independent of that party's orientation. I am thus more likely to identify faults that I see in any current government or government policy, than in the opposition.

In sum…

I claim to be politically neutral and focused on analysis of political developments, not to influence them.

Bottom Line

I have outlined these various elements of my professional autonomy to make one essential point: I do not take orders from anyone in terms of the substantive emphasis of my analyses of contemporary Mongolia. I invite anyone who suspects me of any kind of bias (post-colonial, Eurocentric, industry, political, national, etc.) to scrutinize the above and to examine my analyses. I hope that the discussion above does allow a critique to begin her/his scrutiny from a position of a basic trust in my independence if the above discussion has been useful.

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Guest Post: The Less State in mining, the better the state of mining

By Aligermaa B

June 7 (Mongolia Focus) Does the state, responsible for national welfare, have any business getting actively involved in a business, even in one related to essential services or strategic national resources? Or, should everything be left to the private sector which, usually less concerned with social commitments, can concentrate on competence, which is judged, almost exclusively, by profitability and shareholder satisfaction?

No one knows for sure, but regular efforts are made to find an answer. One of these was the May 16-17 workshop in Ulaanbaatar on "The State's Role in Large Resource Projects", organized jointly by the Canadian International Resources and Development Institute (CIRDI) and the International Cooperation Fund of the Mongolian Ministry of Foreign Affairs. Given the preeminence of mining in the Mongolian context, the State's role in large resource projects was examined mostly in relation to the mining sector. Since the issue is of interest and concern to many developing countries seeking to develop their mineral resources, participants included delegates from Afghanistan, Kyrgyzstan, Laos and Myanmar. On offer were views from the perspective of the State, the private sector and NGOs, all speaking from direct experience.

Among the speakers were Matthew Genasci, Director of US-based Mining Policy Group, S.Oyun, member of the Mongolian Parliament, D.Bat-Erdene, Board member of Mongolian Society of Economic Geologists, N.Algaa, President of Mongolian National Mining Association, G.Battsengel, CEO of Energy Resources, and M.Tulgat, Executive Director of Khishig Arvin.

This is not meant to be an exhaustive report of the proceedings, so I am restricting myself to what the last two said, representing the private sector on Panel 4. This was on the second day and both of them spoke without a prepared text, and this informality embellished the immediacy and impact of their chosen examples, mainly showing how state participation in Mongolian mining has done more harm than good.

State owns vs State gets

Most Mongolians believe that large State shareholding in a project means more revenue for the State budget. According to G.Battsengel, CEO of Energy Resources, the facts do not bear this out. It is a myth created and nurtured by politicians to justify having their finger in the pie. There is no question that Erdenet Copper, 51% owned by the State, pays a large amount to the State, but it is no more than a private company also would pay. The Extractive Industries Transparency Initiative (EITI) report makes it clear that 90% of the total amount paid by a company to the Government is made up of taxes and fees, and Battsengel emphasized that this is what any company, private or State-owned, has to pay, with no special higher rates for the latter. Dividends, which come from profitable operations, accounted for only 5%-10% of what the State gets. In the case of the Mongolia-Russia joint company Monrostsvetment, 97% is tax payment and the rest dividends.

Since how much the State owns is thus not directly proportionate to what the State gets, Battsengel wanted the State to restrict its involvement to setting down rules and regulations, ensuring their implementation without any favors shown to State-owned enterprises (SOEs), and collecting taxes. It should also help create conditions that would help make domestic mining companies more competitive.

Playing outside the rules

Battsengel talked about the Tavan Tolgoi mine, where Energy Resources and State- and locally owned companies are active, to show how regulations are used selectively, never allowing the field to be level for all players, Professional inspectors usually turn a blind eye when SOEs operate outside the regulations, but they are very strict that the private companies keep to the line. For example, coal should be transported along the paved road which, incidentally but importantly, has been built by a private company on its own. However, the SOEs continue to use the dirt roads, to avoid paying for use of the paved road. Their defense is that their responsibility ends as soon as the coal is sold at the mine and thereafter it is up to the buyer to decide how to transport the coal. Battsengel wondered if a private company would be allowed to get away with such specious arguments.

He then referred to selective extraction of coal, a practice prohibited by law, but merrily indulged in by SOEs in recent years. Extracting higher-quality coal, together with less soil removal, certainly makes for more profits, but, according to Battsengel, it is a clear breach of the policy laid down for long-term natural resources use.

M.Tulgat, whos company works as an operator at the Erdenes Tavan Tolgoi mine, also talked about specific problems faced at work. For starters, he said, SOEs do not make timely payments. Not that there would be no money; more often, it would have been frittered away on underproductive and wasteful expenses. Tulgat said one person in his company would do an engineering job for which SOEs would employ four workers. Hiring an operator company would be a good way for State companies to save money. A comparison of how State, local and private companies worked in Tavan Tolgoi would be an interesting exercise, Tulgat thought.

Lessons Learned

Battsengel felt a right policy would open the door to more productive cooperation between the State and private sectors in Mongolia, and hoped the recent move to substitute State ownership with a special royalty rate would be a paradigm for future development.

State ownership of mines is almost unheard of in developed countries, but that has not stopped the mining sector in Australia or Canada – to take two countries with strong links to this sector in Mongolia – from playing an important role in the country's economy. The lasting impression one carried from the workshop was that Mongolia should discourage any increased Government role in mining. State involvement usually turns into a license for political interference, which does the mining no good.

There is much talk in Mongolia about responsible mining. It appears we first have to understand the need for responsible governance.

About

Aligermaa Bayarsaikhan will be a Master's student at the Norman B. Keevil Institute of Mining Engineering of the University of British Columbia. She has been working at the Central Bank of Mongolia since 2012. Her Master's project is focused on the effective management of the revenues generated from Mongolia's extractive sector.

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Politics to continue to hinder Mongolian coal

June 6 (World Coal) Government involvement in Mongolia's coal mining industry is likely to constrain the sector's development in the near term according to BMI Research, with general elections due in June.

"Tension between the Mongolian government and foreign investors over mining contracts and legislation remains a key threat to the continues flow of coal exports to China, especially as the June 2016 parliamentary elections near," BMI Research said in a recent report on Mongolia's mining sector.

Government influence is particularly acute in terms of the development of the Tavan Tolgoi (TT) coal mine, which holds more than 6 billion t of coal – 1.6 billion t of which is high-grade metallurgical coal – with BMM Research noting the halt of development funding for the project by a parliamentary speaker in April 2015.

Mongolia is far from the only country globally to suffer government intervention in the coal sector, however. In the US, for example, the Department of Interior has stopped approval of mining applications on federal land until a review has been completed. Meanwhile, elections this year in the US, Australia and South Africa are all providing cause for concern for coal sector investors.

Beyond politics, there are also questions about the project's near-term viability, given the slowing demand for metallurgical coal in Mongolia's key market – and neighbour – China.

Yet a number of smaller coal project developments are continuing to go ahead, including the Khushuut project by Mongolian Energy Corp., the Ulaan Ovoo project by Prophecy Coal and the Nuurstei and Ovoot projects by Aspire Mining.

And overall, BMI Research is relatively bullish on Mongolian coal production, forecasting average growth of 9.1% per year to 2020, when production will total 56.2 million t compared to 37.4 million t this year, as TT eventually progresses and development of Mongolia's transport and coal processing infrastructure gathers pace.

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Business

Mongolia seeks substation crew for wind farm

Tender expected in third quarter of 2016 for work on 50MW Tsetsii wind farm

June 6 (reNEWS) The developers of the 50MW Tsetsii wind farm in Mongolia are seeking a contractor to help complete an extension to the Tavantolgoi substation, which will connect the project to the grid.

The wind farm, which will be located approximately 542km to the south of Ulaanbaatar in the Gobi desert, is being developed by the Mongolia's Newcom Group and Japan's SB Energy Corp with finance from the European Bank for Reconstruction and Development and the Japan International Cooperation Agency.

It is expected to be complete in late 2017.

The National Power Transmission Grid Company owns and operates the substation and is responsible for the extension.

The work on the substation will involve the supply and installation of plant and equipment, including the switchgear foundation, quality control and design.

Tendering for the contract is expected to start during the third quarter of 2016.

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Italians increase investment in Mongolia

Forecast to be one of the top five fastest growing economies in the next decade, Mongolia is attracting European investment.

June 8 (RETalk Asia) Foreign investment into Mongolia isn't just coming in the form of mining companies.

Forecast to be one of the top five fastest growing economies in the next decade, Mongolia is attracting European investment, with Italy announcing it wants to open an embassy and invest in the country.

Mongolia began trading with Italy in 1973. Mongolia exports leather, wool and cashmere to Italy, and imports facilities, manufacturing tools, foods, shoes and clothes from Italy. In 2014, the Mongolian export to Italy stood at US$51.4 million, whereas the import was $US45.3 million.

And Italy isn't alone, according to Ulsbold Harper, Associate, Business Development at Asia Pacific Investment Partners that owns Mongolia's largest real estate firm, Mongolian Properties. "We believe these are the countries looking to open up embassies in Mongolia: Australia, United Arab Emirates and Poland," said Harper.

According to the Mongolian government's "Invest Mongolia" agency, the top foreign investors in the country between 1990 and 2013 were the Netherlands ($4.2bn), China ($3.75bn), Luxemburg ($1.15bn), British Virgin Islands ($1.10bn), Singapore ($0.72bn), Canada (0.49bn), South Korea ($0.38bn), USA ($0.31bn), Russia ($0.30bn) and Australia ($0.26bn).

"Obviously Rio Tinto has invested huge amounts for the Oyu Tolgoi mine," said Harper. "They have recently committed to spend $4.4bn between 2016 to 2022 to develop the second stage of the underground mine."

Mongolia's Financial Regulatory Committee has recently approved the launch of the new Mongolia's Securities Exchange ("MSX"). The company will operate the exchanges of primary and secondary securities. A dozen brokerage companies have joined the MSX, and many brokerage companies have also expressed their intention to participate and a number of companies have requested to launch IPO's.

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Mongolian press delegation visits China

June 1 (Xinhua) A Mongolian press delegation arrived in China Tuesday for a week-long visit focusing on green development.

The delegation, consisting 47 members and led by a spokesman of Mongolia's foreign ministry, will visit research institutes, industrial parks, ecological zones and environmental protection companies in Beijing, Tianjin and the Inner Mongolia Autonomous Region, the State Council Information Office said in a press release.

The Mongolian guests expect to see China's efforts and achievements in resources conservation, environmental protection and low-carbon development, it said.

Green development is one of the common objectives of the two countries, which are cooperating in diverse sectors including renewable energy, water resources management, air quality control and ecological conservation in rural areas and on pastureland.

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Ulaanbaatar

Ulaanbaatar Development Corporation Will Organize Its First Business Forum 2016 "Industrial Parks"

Ulaanbaatar, Mongolia--(WireMongolia - Jun 08, 2016) - "Ulaanbaatar Development Corporation" (UBDC) JSC has been established to develop and implement UB city major investment projects.

UBDC is organizing its First Business Forum under the theme "Industrial Parks" in cooperation with Ministry of Industry of Mongolia and European Bank for Reconstruction and Development (EBRD) Mongolia on June 9, 2016.

The opening speech will be made by the Governor of the Capital city and Mayor of Ulaanbaatar, Mr. E.Bat-Uul.

The keynote speakers will be S.Erdenebat, Minister of Industry, T.Bat-Erdene, Deputy Mayor for Ecology and Green Development of Capital City, Matthieu Le Blan, Head of EBRD Representative Office in Ulaanbaatar.

About 300 private sector representatives, including Logistics Association, Construction Materials Association, National Recycling Association and Mongolian Bank Association will participate in the Forum. The key messages that will be addressed are the State policy on Industrial Parks, UB City development strategy, world best practices on Industrial Parks and green project financing.

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Stoves in Mongolia Causing Pollution Problem

May 30 (VOA) --

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Diplomacy

US Secretary of State Lauds Mongolia's Democracy, Calls for Greater Transparency

In his day-long visit ahead of U.S.-China talks, Kerry struck a balance of high praise and mild criticism.

By Peter Bittner

June 8 (The Diplomat) In his brief visit on Sunday to the Land of the Eternal Blue Sky, United States Secretary of State John Kerry praised Mongolia as an "oasis of democracy" in a region with few examples. The trip by the top U.S. diplomat precedes parliamentary elections planned for June 29. Dozens of candidates are mounting campaigns for seats in the State Great Khural, a unicameral legislative body comprised of 76 members elected to four-year terms.

In his official visit to the ancestral home of Chinggis Khaan, as the historical conqueror is known there, Kerry observed a traditional "naadam" sports festival consisting of wrestling, horse racing, and archery. He visited with the champion wrestler, awarded medals to winning riders, and fired arrows at targets during the exhibition.

In a joint press conference on Sunday with Foreign Affairs Minister Lundeg Purevsuren, Kerry touted the young democracy as an example for other nations. Landlocked between communist China and increasingly authoritarian Russia, Mongolia celebrated 25 years of democratic governance last year, following nearly seven decades of Soviet-style socialism.

Mongolia is the least-densely populated country in the world. Over a quarter of its more than 3 million citizens live nomadically, though the nation is rapidly urbanizing and adapting to the era of globalization.

In his remarks at the Ministry of Foreign Affairs, Kerry extolled Mongolia for "sharing the lessons of its own evolution with other countries," namely the budding democracies of Myanmar and Kyrgyzstan. The U.S. secretary of state also applauded the country's global citizenship as evidenced by its active participation in the UN Human Rights Council, its contribution to peacekeeping troops in Sudan and South Sudan, and its recent joint-military peacekeeping exercise, Khaan Quest. Kerry also praised Mongolian troops' combat roles in Iraq and Afghanistan.

Amid a packed schedule filled with high-level meetings with President Tsakhiagiin Elbegdorj and cultural events, Kerry gently encouraged the Mongolian government to operate with greater transparency, especially in its dealings with foreign counterparts.

Mongolia's record on democracy and human rights came under scrutiny in the U.S. State Department's 2015 Human Rights Report. "Vague laws and a lack of transparency in legislative, executive, and judicial processes undermined government efficiency and public confidence, and invited corruption," stated the report in its executive summary.

In his speech, Kerry nudged Mongolia to implement a bilateral transparency agreement signed in 2013, which has been slow to come to fruition. The agreement would require Mongolia to publish an explanation for any proposed regulation in English—at present an uncommon occurrence—and allow for public comments on those proposals, among other measures.

Kerry called the transparency agreement "a very important step to be able to attract foreign direct investment" — which has all but disappeared from the country formerly dubbed "Minegolia" by international investors.

Mongolia currently faces serious economic woes, many of which stem from a lack of transparency in its business regulations. Once the world's fastest growing economy, the country has faced grave challenges in recent years.

Fraught talks between international mining company, Rio Tinto, and the Mongolian government over the development of the Oyu Tolgoi mine, the world's largest undeveloped copper reserve, stalled out the project for years and discouraged many potential investors.

Falling global commodity prices in addition to wilting demand from China, Mongolia's largest trading partner, have also compounded the country's economic plight.

The World Bank forecasted Mongolia's rate of economic growth at a dismal 0.8 percent this year, down from a roaring 17.5 percent in 2011 at the height of the mining boom. Mongolia hopes that the upcoming Asia Europe Meeting (ASEM) and high tourist season will help stir the economy from its slumber.

The secretary of state's visit is one of many by high-profile U.S. leaders in recent years, including one by then-Secretary of State Hillary Clinton in 2012. She famously criticized China while on the trip, calling the combination of economic openness and political control "unsustainable."

Kerry took no such opportunities to jab at neighboring China. In fact, he planned to meet immediately afterwards with Chinese officials as part of the China-U.S. Strategic and Economic Dialogue in Beijing.

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Link to U.S. Embassy news on visit

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Foreign minister says Mongolia has learned hard lesson on resources

TOKYO, June 2 (Nikkei Asian Review) -- After its natural resource revenue fell in tandem with commodity prices, Mongolia was left with another hurdle between it and economic growth. The Nikkei Asian Review on Tuesday talked with Foreign Minister Lundeg Purevsuren about this and other issues during the 22nd International Conference on The Future of Asia, in Tokyo.

Q: Low commodity prices have hit Mongolia's economy. How will the country deal with this?

A: Because of the global commodity slowdown, suddenly Mongolia has a huge problem. Mongolians say there are two [types of] horses: one that can reach far, and one that can run fast. We need more horses, not only the mining sectors, but also other sectors.

To reach other markets, we must produce value-added or finished products. We have more than 60 million livestock from which we can develop food, textile and leather [industries]. We also have 1.5 million sq. km of land, which gives us possibilities to develop the agriculture sector and supply food to other markets.

Above all, I think our population, [a] young and well-educated population, will be most important for the future of the Mongolian economy. The government is heavily investing in people, in education sectors.

Q: How do you plan to attract more investments from overseas?

A: In the past, because of the high price of commodities, we made some mistakes. There were certain symptoms of "resource nationalism" in the country, and we changed our rules very often. We have learned that the most important things for investors are the sustainability and predictability of the government and investment environment.

We have learned our lessons. Now, investment conditions in Mongolia are quite good. Our corporate, income and social taxes are 10%, and import tax is only 5%, making Mongolia one of the lowest tax rate countries in the region.

I think more Japanese companies will discover this through our new economic partnership agreement. We hope very much that the partnership will bring technology transfers, investments and [training] ... to Mongolia. We hope that Mongolia can become a part of the supply chain for Japanese industries.

Q: Currently, 90% of Mongolia's exports go to China. How has China's slowdown impacted Mongolia?

A: Of course, China's slowdown heavily hit the Mongolian economy. There is an immediate need for us to diversify our trading partners. In November, we started the first round of trade negotiations with the Eurasian Economic Union. One year ago, we signed our first free trade agreement with Japan. With the U.S., we have signed the first part of a free trade agreement. We would like to increase our exports to the Russian market, too. 

For landlocked countries like us, transit roads are very important. We have signed a bilateral agreement with China to use transit roads going through Chinese territory towards Chinese ports. We will enjoy certain discounts transporting goods across Chinese borders. We have clinched a similar [deal] with Russia. With the Japanese government, we very soon [expect to clinch an] airport project.

Q: The IMF has projected Mongolia's economic growth this year to be as low as 0.4%. What is your outlook?

A: I am much more positive. We have a good sense of the current economy. In the first quarter of this year, we increased our production. Some economies in the world, including our partners, are doing well. I am optimistic that Mongolia will see higher economic growth than what is projected. The only question is how soon we can recover.

Q: Mongolia has been talking up the Forum of Asia, a multilateral cooperation platform. Have you seen any progress?

A: It will be a long-term project. I think smaller countries need to sit together first, and later the bigger countries will join. We have already identified smaller countries to work for us as regional partners. In the midterm, we will work with sub-regional coordinators [from] about five or six countries. This will be the core group for the future. We are starting with think tanks and scholars. Step by step, we will work with the government.

We are closely looking at what happened in Europe after the second world war. At that time, there were enemies within the region. It took Europe 40 years to build a core mechanism, and this was started by smaller and neutral countries, like Finland and Sweden. I think in Asia, it could take even longer.

Q: Anti-China sentiment remains within Mongolia. Some have expressed concerns over how increased economic ties with China could threaten Mongolia's sovereignty. Do you think this is a valid concern?

A: I think such talk has absolutely no grounds. China has officially recognized our sovereignty, and Chinese leaders have expressed that they will honor all existing agreements. We have agreements, treaties, and friendship with the good neighbor that are working very well.

On the other hand, China is a very big power, and its economic influence is huge. Mongolia is an open society, where everyone can raise questions and publish their own opinions. The two countries have had issues in the past, and historically, there were times when we had mistrust. But we have managed them. You can hear some voices, but it is only a sign of a free society. We are talking about this to the Chinese very openly -- why such sentiments are there in Mongolia and how we can increase our trust and cooperation.

Interviewed by Nikkei staff writer Tomomi Kikuchi

Link to article

 

Region needs forum to tackle security issues -- Mongolian foreign minister

TOKYO, May 31 (Nikkei Asian Review) -- Asia lacks a platform for dealing with common security threats, but Mongolia can be a "bridge builder" that fills the void, the country's foreign minister said on Tuesday.

The region has many unresolved issues, with "the last stronghold and division of the Cold War" on vivid display on the Korean Peninsula, Foreign Minister Lundeg Purevsuren told the International Conference on the Future of Asia in Tokyo.

Like many other parts of the world, "terrorism, extremism and separatism pose a threat to many subregions in Asia," particularly in the aftermath of the Arab Spring, Purevsuren said. Yet "the region lacks a mechanism or institution that would unite all countries of the continent" in pursuit of closer cooperation and integration "based on mutual trust and understanding."

Recognizing nuclear proliferation as a major threat, Mongolia already hosts the Ulaanbaatar Dialogue -- a forum for discussing Northeast Asian security, particularly ways to resolve the tensions on the Korean Peninsula. 

The Forum of Asia, proposed by President Tsakhia Elbegdorj, would expand on such frameworks to further multilateral cooperation. This would serve two broad goals: to bring together all Asian countries to discuss common concerns and to promote security cooperation. 

Mongolia, "located at the crossroads of three great civilizations" and committed to neutrality, is uniquely fit to bring different actors in the region together, he said.

While economic integration is also considered a key to regional security, Mongolia has yet to participate in regional trade and economic pacts. Ulaanbaatar concluded an economic partnership agreement with Japan last year and hopes to leverage that deal to join other economic partnership initiatives, the minister said.

Link to article

 

Air Force IMA leads global peacekeeper training in Mongolia

BUCKLEY AIR FORCE BASE, Colo., June 6 (Youngstown Air Reserve Station) -- Col. Carl Magnusson is a member of the profession of arms. But during a recent multinational exercise, he helped shape the next generation of the profession of peace.

Alongside his Mongolian Armed Forces counterpart, Col. L. Ganselem, Magnusson served as co-director for Khaan Quest 2016, held in the Mongolian capital city of Ulaanbaatar and at the nearby Five Hills Training Area, May 22 – June 4.

Magnusson is an Air Force Reserve Individual Mobilization Augmentee assigned as the director of PACOM's Joint Exercise Control Group. As a reservist, it is his job to support PACOM exercises, such as Khaan Quest, in key leadership roles.

The U.S. Pacific Command-sponsored exercise was the capstone in a series of trainings and involved about 45 peacekeeper instructors-in-training and 1,500 new peacekeepers from more than 40 countries. Before training commenced, the participants gathered for an opening ceremony presided over by Mongolian President Tsakhiagiin Elbegdorj and PACOM Commander Admiral Harry Harris.

"During this exercise, multinational forces will work to enhance interoperability and develop common tactics," said Harris. "All of this will ultimately enhance our collective effectiveness to support global peacekeeping operations."

Khaan Quest has been held each year since 2003 as part of the Global Peace Operations Initiative. GPOI is a U.S. Government-funded security assistance program intended to enhance international capacity to effectively conduct U.N. and regional peace support operations by building partner country capabilities to train and sustain peacekeeping proficiencies; increasing the number of capable military troops and formed police units available for deployment; and facilitating the preparation, logistical support, and deployment of military units and peace support operations.

With so many countries represented, all training was conducted in English and students were expected to have a rudimentary understanding of the language.

Link to post

Related:

U.S. Marines, Soldiers, Sailors along with Mongolian, Singaporean, Indian Armed Forces participate in an ENCAP ribbon-cutting ceremony during Khaan Quest 2016DVIDS, June 2

U.S. Army, Canadian Army test Mongolian Armed Forces' counter-improvised explosive device skills during Khaan Quest 2016DVIDS, June 2

U.S. Marines train soldiers from the Mongolian Armed Forces in riverine operations during Khaan Quest 2016DVIDS, May 31

 

Mongolia's Cybersecurity Cooperation

What are the prospects for Mongolian cybersecurity cooperation with Russia and China?

By Galbaatar Lkhagvasuren

June 7 (The Diplomat) Mongolia has declared in its National Security Concept that it will develop friendly-neighbor relations and wide-ranging cooperation with the Russian Federation and the People's Republic of China. Yet individuals and other groups both in China and Russia have attempted cyber attacks on Mongolia numerous times, most of which have been reported to the Cybersecurity Department of the General Intelligence Agency of Mongolia. Clearly, Mongolia's two neighbors do overwhelmingly try to access information and databases in Mongolia. So what are the prospects for Mongolia's cybersecurity cooperation with Russia and China?

On the International Telecommunication Union's 2014 Global Cybersecurity Index, Mongolia was ranked 15th, Russia was ranked 12th, and China was ranked 14th. Mongolia will naturally research the cybersecurity preparedness of some countries with higher rankings, including Russia and China as well as the Republic of Korea (ranked fifth).

Russia and China have both officially expressed their interest in international cooperation on cyber issues. Russia, in its Draft Cybersecurity Strategy Concept, advocated for enhancing international cooperation on development agreements and mechanisms to enhance global-level cybersecurity. And China's Military Strategy makes it clear that "As cyberspace weighs more in military security, China will … participation in international cyber cooperation, so as to stem major cyber crises, ensure national network and information security, and maintain national security and social stability."

A key indicator of Mongolia's policy cooperation on cybersecurity with Russia and China will be developments in legal measures, technical measures, organizational measures, capacity building, and national and international cooperation.

One specific aspect Mongolia needs to consider is its response to the draft International Code of Conduct for Information Security, an annex to a letter dated January 9, 2015 addressed to the UN secretary-general from the permanent representatives of China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan, and Uzbekistan. The original 2011 draft was criticized by many Western countries, including the United States, as an attempt by the countries of the Shanghai Cooperation Organization to justify greater state control over the Internet's governance structures and online content. Member states of the SCO then updated and submitted a draft of a code of conduct in the sphere of international information security to the UN and officials have called for others to support the draft's underlying idea.

Discussion on a draft International Code of Conduct for Information Security is not the only ongoing international conversation on cybersecurity. During the 2016 World Summit on the Information Society was held May 2-6 in Geneva, stakeholders from more than 150 countries discussed cybersecurity and sustainable development. On May 25, ASEAN defense ministers adopted a concept paper on the establishment of a cybersecurity working group. Also, G7 Summit, held May 26-27 in Japan, issued G7 Principles and Actions on Cyber. Mongolia, in other words, has no shortage of potential cybersecurity models and principles to choose from.

In addition, Mongolia has been studying the experience of other countries' bilateral and trilateral relations on cybersecurity such as interactions between U.S.-RussiaChina-South Korea-JapanU.S.-JapanRussia-China, Australia-South KoreaU.S.-ChinaU.S.-South Korea; and Estonia-Japan. These events show key players on cybersecurity, including the United States, Japan, South Korea, Russia, China, Australia, and Estonia are cooperating and forming mutual obligations on cybersecurity. Mongolia also needs to cooperate on cybersecurity with its two neighbors (Russia and China) and "third neighbors," including Japan, South Korea, the United States, Australia and Estonia.

Furthermore, Mongolia will need to improve its cybersecurity and advance in the ranks of the Global Cybersecurity Index based on studying the cybersecurity policies of key player countries and international and regional organizations.

Galbaatar Lkhagvasuren is an analyst at the Mongolian Institute for Geopolitical Studies

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Health, Education

MONGOLIA: Ministry of Health and Sports, World Bank Launch E-Health Project

Health information exchange will make health services more accessible, cost-effective

ULAANBAATAR, June 2, 2016 (World Bank) – The Ministry of Health and Sports and the World Bank launched the E-Health project to improve the reach and effectiveness of healthcare service delivery. The project will help the government set up a health information exchange platform to share medical information among healthcare providers, patients and health administrators.

"We believe that the introduction of information technology in the health sector will contribute to more effective use of the budget because the health information exchange platform will improve the accessibility, quality, and speed of health services in Mongolia," said Minister of Health and Sports S. Lambaa.

The program is funded with a $19.5 million credit from the International Development Association (IDA). IDA aims to reduce poverty by providing loans and grants for programs that boost economic growth, reduce inequalities, and improve people's living conditions.

"The E-Health project will help reduce both the duplication of medical tests and the need for residents in remote areas to travel to bigger cities to get medical services because the exchange platform will enable healthcare providers to share medical information," said the World Bank Resident Representative in Mongolia James Anderson.

Link to release

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Culture, Society

Togi's Serves Real Mongolian Food 

No 'barbecue.' Instead: handmade noodles, steamed dumplings, and salted milk tea.

May 31 (East Bay Express) The restaurant formerly known as Asian Grill is one of those downtown Oakland spots I've driven past for years without even once thinking about going inside. Located at the corner of 14th and Webster, the place has always struck me as being one of the sketchier-looking restaurants in the area — and almost certainly the most generically named.

"Asian Grill," the drab sign, which for now still hangs above the entrance, declares: "Japanese Sushi Bar. Mongolian Restaurant. American Breakfast." With such a seemingly random assortment of cuisines represented, what were the chances that any one of them would even be passably good? That was my thinking, anyway.  

It was with great interest, then, that I read a recent post on the food-discussion forum Hungry Onion extolling the virtues of the restaurant's traditional Mongolian dishes — its handmade noodles, steamed dumplings, and so forth.

As it turns out, Asian Grill had a change of ownership in April. Enkhtuguldur Sukhbaatar — "Togi" to his friends — bought the restaurant from the Mongolian family that used to run the place. Sukhbaatar said he was a cook in Mongolia for fifteen years before moving to the Bay Area in 2010, after which he has mostly worked at Benihanas and other restaurants of that ilk. What Sukhbaatar is now calling "Togi's Mongolian Cuisine" is the chef's first restaurant of his own; he's in the process of making the name change official. Most notably, he has refashioned the place as a purely traditional Mongolian eatery — one of only a handful in the entire United States.

Link to full article

 

Woman stopped at border with yak meat and Mongolian cheese

May 31 (New Zealand Herald) A Mongolian woman was stopped from entering New Zealand after yak meat and homemade Mongolian cheese was found on her.

The woman arrived at Auckland Airport last week. She did not speak any English but was carrying a note from her daughter saying she was bringing food from home.

The food turned out to be yak meat wrapped in tinfoil. Security also found homemade Mongolian cheese in her luggage.

"She had carried the food all the way from Mongolia, but there was no way we could permit it to enter New Zealand," said Ministry of Primary Industries Auckland Airport manager Dave Sims.

"The food could have been harbouring a number of devastating animal diseases.

"Mongolian livestock has been afflicted by foot-and-mouth disease. This is a disease we definitely don't want in New Zealand. It has the potential to wipe some $16 billion from the New Zealand economy."

The ministry was, however, pleased the woman had declared the food before entering New Zealand.

"Her family knew enough about New Zealand's biosecurity rules to ensure she could alert us that she was carrying potential risk items.

"This shows that New Zealand's biosecurity message is spreading -- even to the outer reaches of Mongolia."

Link to article

Link to NZ gov statement

 

Mongolian church prepares for first native priest

Ordination will stimulate the enthusiasm and sense of belonging among local people, says Congolese missionary

June 2 (UCA News) The ordination of Mongolia's first native priest this August will be an event that is "particularly important" for the nascent Catholic Church there, an African missionary working there says.

"This event is particularly important for our young Church, re-founded in 1992 and today has just over a thousand baptized, Father Prosper Mbumba, a Congolese missionary in Mongolia, and member of the Congregation of the Immaculate Heart of Mary told Agenzia Fides.

"The ordination of a native priest will stimulate the enthusiasm and sense of belonging among the Mongols, towards a church that has long been seen as foreign," he said.

Joseph Enkh, is to be ordained a priest in Ulaan Baatar on Aug. 28 2016 by Monsignor Wenceslao Padilla, Apostolic Prefect of Ulaan Baatar, according to Agenzia Fides, the information service of the Pontifical Mission Societies.

Joseph Enkh was ordained a deacon in 2014 in Daejeong, South Korea, where he was studying to be a priest. He returned to Mongolia in January.

Since then he has been serving in various of the six parishes of Mongolia. The country has 20 foreign missionaries and 50 nuns from 12 congregations.

"Christians pray a lot for their future priests and parishes are promoting catechetical meetings, to offer people a better understanding of the priestly ministry," Father Prosper told Agenzia Fides.

Many Catholics have written to the future priest "to let him know that they are proud of his vocation and have trust in his presence and his work," he said.

Link to article

Related:

Mongolia Gets  First Native Priest Continues GrowingChurch Militant, June 2

How priests on horseback built the Mongolian church from scratchCatholic Herald, June 2

 

Inside Mongolia's Only Gay Bar

By Lila Seidman

June 3 (Gawker) At the only gay bar in the most sparsely populated independent country in the world, Zorig Alima tells me he's a "penis shaman." The proprietor of d.d/h.z says he can confidently predict men's penis sizes and sexual predilections. He gives my companion a disputable "reading," and dashes away to tend to friends and customers, explaining, "This place is like my living room."

When Zorig returns, he brings us a frozen drink with Day-Glo layers. "It's like gay life in Mongolia," he says. "It looks bright and sweet, but it's difficult to swallow."

In Mongolia, it isn't easy for a gay bar to fly under the radar, even in the center of Ulaanbaatar, the country's biggest city, home to more than a third of Mongolia's total population of 2.8 million. Outside the city, the steppes are home to some of the world's last nomadic people. When the country was under Soviet rule from 1921 to 1990, all non-heteronormative expression of sexuality was taboo. Until 1989, homosexuality was illegal and punishable by imprisonment. Gay life in Mongolia is still far from easy. For many Mongolians, gay visibility is seen as an invasion, a foreign influence corrupting traditional life. Bullying at school remains prevalent, labor discrimination is rife, police hostility abounds and healthcare and social services are frequently withheld.

Several Mongolian gay bars predate d.d/h.z., but they were forced to close due to resistance from the neighborhood or would-be clients steering clear, for fear of getting beaten up or harassed. The first, City Life, lasted just one fun but lonely summer in 2004. But d.d/h.z. is thriving. Several Mongolian men, three Europeans, and one elegantly dressed trans woman chat and make merry. Hands slip around shoulders. The blinds are drawn tight, but the atmosphere is open and casual. LED disco lights fling primary-colored-flecks on the revelers. Zorig even recently set up an LGBT Corner message board (and three dildos) to "make the message wide and open."

Fewer than 18% of Mongolia residents have internet access, and until recently, information about anything related to gay life was nearly impossible to come by. When it does, it can be despairing. In the '90s, a famous and grisly incident disturbed the tiny country, when a Mongolian pop singer who was rumored to be gay was found beheaded in his apartment. Now, same-sex teen suicides crop up in the news with alarming frequency.

In 2010, Mongolia's newly formed LGBT center reported on over a dozen hate-motivated instances of harassment, violence, and rape before the UN. In 2001, a lesbian woman was abducted, stabbed and raped by two men after the funeral of her girlfriend, who had committed suicide. In 2009, the ultra-nationalist neo-Nazi group Dayar Mongol kidnapped three transgender women in broad daylight and took them to a cemetery where they were beaten and sexually assaulted. None of the crimes were initially reported to "for fear of secondary victimization by police."

Zorig "heard stories" about the existence of gay people growing up, but didn't meet another gay man until he moved to Japan at 19. There, Zorig worked as an investment banker for 15 years "having a nice time enjoying my gay life" before moving back to Mongolia in 2012. "Coming back to Mongolia but not having a place to party is kind of sad," he says. "So I thought, ok, let me just create that." Gay men could meet at "secret parties," but Zorig said he was tired of hiding. He knew that there were enough people living in the shadows to constitute a clientele.

He opened the dance club Hanzo, in mid-2012, and hosted drag shows, go-go dancing and karaoke. Police frequently raided the bar and physically assaulted club-goers.

"Back in 2012, it was not cool," Zorig says. "People were like, 'What the fuck is that?'"

During Hanzo's three-year existence, local police who interacted with Zorig and his clientele on a weekly basis gradually warmed to the bar. Members of Mongolia's artistic elite, including the rock band The Lemons, frequented the bar. Because of their potent social influence, their acceptance informed wider, albeit measured, public acceptance.

Zorig notes that police in Hanzo's centrally located Chingeltei District tend to be more familiar with the LGBT community—and therefore more accepting—than police in more far-flung districts. Just last year, police interrupted Ulaanbaatar's Equality Walk and harassed participants.

The previous November, one of the most prominent trans men in Mongolia, Anaraa Nyamdorj, opened the now-defunct gay bar, 100%. Like Hanzo, the bar attracted grateful clientele seeking a safe haven, along with opposition. In February of 2012, Anaraa's sister's ex-boyfriend stormed into the bar and punched him in the face, fracturing his eye socket. At the time, hate crimes were not recognized under Mongolia's Criminal Code and the case was dismissed.

Anaraa waged a three-year battle alongside local colleagues and the National Human Rights Commission against state authorities to register the LGBT Centre, Mongolia's first and only LGBTI human rights organization. The roadblocks seemed innumerable, beginning with the Mongolian Ministry of Justice and Home Affairs denying official registration to the NGO and requiring that the LGBT Centre to obtain "a linguistic definition" of the words "lesbian," "gay," "bisexual" and "transgender" from the Linguistics Institute of the Mongolian Academy of Sciences. Then, the State Registration Agency refused to register their name because its meaning "conflicts with Mongolian customs and traditions and has the potential to set a wrong example for youth and adolescents." The Centre was finally officially recognized in 2009, just in time present their distressing report to the UN.

Anaraa now serves as the Centre's executive director. On Dec. 3, 2015—Anaraa's birthday—Mongolia passed a new Criminal Code that effectively recognizes "crimes of discrimination," in large part due to the Centre's international advocacy with UN treaty bodies and the UN Human Rights Council.

The law will take effect Sept. 1, and that's "when we will see how much the police are able to understand [the law]," Anaraa says, acknowledging that the term "crimes of discrimination" is somewhat vague. To ensure that the police understand the law and apply it properly, the Centre will be training the police on what hate crimes are, how to recognize them and the kind of assistance hate crimes victims require. The U.S. State Department is funding the project and the U.S. Embassy reserved the money for three years while LGBT advocates and activists waited for the law to pass. According to Anaraa, Mongolia is the first Asian country to have hate-crime and hate-speech regulations in its Criminal Code. (Some countries, including Hong Kong, Japan and Macau offer partial protection.)

Anaraa now calls d.d/h.z "home" after 100% closed, in December 2012, after the landlord found out that the tenants had sublet the space to members of the LGBT community and subsequently terminated the lease.

Zorig believes d.d/h.z and Mongolia's LGBT Centre have "big synergy": as legal reforms beget social détente, those in the community "feel free and safe to go out – or come out." Zorig thinks the bar's visibility "made the straight community understand that these people are not monsters. They are not pedophiles and they are not perverted. They are just people."

The same year as the Dayar Mongol neo-Nazis staged their transphobic attack, the LGBT Centre produced a film called "Lies of Liberty," featuring an interview with one of the victims. According to Anaraa, the film helped stoked a public outcry. "What the ultra-nationalists did was shameful because they were targeting their own flesh and blood," he says.

A mining boom in 2008 brought a deluge foreign investment and cultural influence, which triggered the rise of several ultra-nationalist groups. Far from embodying the Aryan phenotypic ideal, Mongolian neo-Nazis tend to emphasize their reverence of Hitler's obsession with national identity and ethnic purity, and have notoriously wrought violence against the LGBT community and foreigners, especially those in the company of Mongolian women. Recently, the ultra-nationalists have focused their ire on foreigners, in particular, the Chinese, who they believe are exploiting their economy and natural resources. Some groups, including Tsagaan Khass (White Swastika), have rebranded themselves as environmental groups fighting pollution generated by foreign-owned mines.

About a year after the attack, Dayar Mongol issued a formal apology to the victims. Anaraa says he hasn't heard a single report of violence carried out by the ultra-nationalists against the LGBT community since the public apology.

Late on a Saturday night, the music is subtle and the lights relatively bright. There's more of a café than "party" ambiance. At 3:30 am, people are still streaming in and out. Men sit at the bar, poised to cruise. Groups—dressed almost exclusively in tight jeans and black shirts and black zip up jackets—huddle into wooden booths. A belligerent drunk man stumbles in and Zorig escorts him out.

Not long ago, Zorig says he spoke with the leader of umbrella ultra-nationalist group Khukh Mongol (Blue Mongolia), which includes Dayar Mongol, who told him the group no longer sees the LGBT community and proprietors like Zorig as their enemies. The leader's friend, an older trans woman, came out to him last year. The leader and other members of Blue Mongolia even visited Hanzo a few times themselves.

The leader told Zorig, "If anyone comes into your place and threatens you, just call me."

Lila Seidman is a freelance reporter based in Los Angeles.

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Nature, Environment

Adopt Tost & Help Keep Cats Safe

June 2 (Snow Leopard Trust) Mongolia's Tost Mountains have recently been declared a State Nature Reserve, thanks to a remarkable effort by the local community. Now, it's up to us all to help ensure that the area's rich wildlife – including a stable snow leopard population, can thrive in this prime habitat.


Mongolia South Gobi is anything but a lifeless desert. This arid area is rich with wildlife and vegetation. Snow leopards, ibex and camels flourish here, as do different types of plants. It is also home to the mysterious Pallas Cat—one of the least studied cats in the world.

We need your help to protect Tost's wildlife! This spring, we aim to raise $30,000 to help fund critical conservation projects in the area. Will you help us reach our goal with a gift today?

Right now, there are anywhere from 14-16 adult snow leopards—and their cubs—roaming the Tost Mountains. And with cats migrating in and out, we know that Tost is important for maintaining genetic vibrancy in the larger Gobi region. Mongolia's recent decision to make Tost a Nature Reserve has reduced the threat of mining to the habitat – but we still need to work with the local community and park rangers to make sure that the cats are safe from other threats.

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Ex-pastor now spreads gospel of environmentalism

June 4 (JoongAng Daily) A Protestant minister from Gangwon Province gave up his calling, one of the most stable occupations in Korea, for an entirely different vocation: planting trees in the deserts of Mongolia. 

Kim Jong-woo, 45, is director of the international cooperation department at Green Asia, a nongovernmental environmental preservation organization. The organization mainly plants trees in Mongolian deserts, with a side mission of planting fruit trees to help Mongolians become self-sustainable. 

"Carbon dioxide emissions from developed countries have been accumulating in the atmosphere of Mongolia, which is an inland basin, and the country's average temperature rose about 2.1 degrees Celsius over the last 60 years," Kim said. 

One-third of Mongolia's water resources have disappeared, as 887 rivers and 1,166 lakes have dried up over the last 30 years. Up to 10 percent of the country's population became environmental refugees after they lost their homes due to rapid desertification. 

Green Asia has visited six such disaster-stricken regions and established self-sustaining villages. 

"We're killing two birds - environmental protection and economic development - with one stone," Kim said. 

Before Kim went into environmental preservation in 2010, he was a minister at a small church in a village in Gangwon province. He followed in the footsteps of his father, who was the pastor of a big church in Busan, and studied at a theological college. 

His first job was as a pastor in charge of a youth group at a big church in Seoul. When he turned 36, Kim was promoted to the position of pastor in charge of an entire church in Gangwon. 

But he knew something was wrong.

"It was like wearing clothes that didn't fit my body," Kim said. "It was a stable life, but I didn't feel happy."

...

Green Asia's cooperation with Korea Tobacco & Ginseng Corporation exemplifies Kim's win-win business strategy. The company wanted to start voluntary teaching activities as a corporate social responsibility program.

Kim suggested they teach agriculture and forestry in Mongolia. 

"It's a win-win situation," he said, "since the corporation earned a chance to teach, and Green Asia built an educational infrastructure in which local people in Mongolia learn about agriculture and forestry." 

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Sports

The 8 essentials for your Mongol Rally checklist

May 31 (Wanderlust) Each year, hundreds of teams complete the Mongol Rally, a challenge that journeys 10,000 miles across Europe and Asia. But what does one pack and prepare for on such an epic adventure? Mongol Rally veteran James Higgins offers some advice

The Mongol Rally was dreamt up and first attempted in 2004 by six teams, and only four completed the challenge. Since then the motoring expedition, organised by The Adventurists, has grown to include hundreds of teams bidding to cross one third of the planet; from the UK to Mongolia. 

The concept is as simple as it is absurd; take a car with a maximum engine size of 1.0 litre (or a 125cc motorbike), find your own way to Mongolia devoid of any support, and raise as much money for charity as possible. With 2016's edition set to disembark the UK on July 16th, preparations for some will be well under way, but for others, mere notes on the back of the envelopes. As a veteran of the 2012 Mongol Rally, I've put together a small check-list to help out this year's participants. 

1. The vehicle

Link to full article

 

Petalumans take on 10,000-mile 'Mongol Rally' for local charity

June 4 (Argus Courier) Petalumans Nick Bokaie and Roberto Rosila are redefining the concept of a summer road trip with a 10,000-mile trek that will send them barreling through multiple time zones while crossing mountains, deserts and grasslands in Europe and Asia to raise money for a local charity this July.

The longtime friends plan to take on the "Mongol Rally," an annual event created by United Kingdom-based company The Adventurists that's intended to take participants on an epic journey while generating money for various charities. The rules of the game are starkly straightforward: only "farcically small" vehicles with no larger than a 1000 cc motor are allowed to register, and there's no backup support provided for mechanical or navigational troubles.

"There's no help whatsoever," Bokaie said. "We're pretty much left to our own devices."

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Art, Entertainment

'Marco Polo' Season 2 Trailer Promises All Out War for Mongolia (Video)

Next 10 episodes of Netflix series start streaming on July 1

June 8 (The Wrap) Netflix's first "Marco Polo" Season 2 trailer teases that alliances will be tested as the Mongol empire is on the brink of war.

In the trailer, Kublai Khan (Benedict Wong) laments all he has had to do in order to maintain his power. But his trials are not over yet, as threats from without and within would claim leadership of his empire for themselves.

The 10 episode second season includes new and returning cast: Lorenzo Richelmy (Marco Polo), Michelle Yeoh (the Handmaiden), Joan Chen (Empress Chabi), Zhu Zhu (Kokachin), Tom Wu (Hundred Eyes), Olivia Cheng (Mei Lin), Claudia Kim (Khutulun), Rick Yune (Kaidu), Remy Hii (Prince Jingim), Mahesh Jadu (Ahmad) and Uli Latukefu (Byamba), among others.

Also Read: Netflix's 'Marco Polo' Adds Michelle Yeoh for Season 2

"Marco Polo" is based on the famed explorer's adventures in Kublai Khan's court in 13th century China, and the dark and tempestuous battle for the expanding Mongol empire.

John Fusco, who wrote the Academy-Award nominated feature "Spirit: Stallion of the Cimarron," is executive producer and showrunner along with Dan Minahan. Patrick Macmanus, Harvey WeinsteinBob Weinstein and Elizabeth Sarnoff serve as executive producers.

Link to article (and Season 2 trailer)

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Travel

Jeju tourism body, trail caretaker co-develop walking route in Mongolia

JEJU, South Korea, June 8 (Yonhap) -- The state-run Jeju Tourism Organization (JTO) on Wednesday teamed up with the Jeju Olle Foundation, the caretaker of the Olle Trail on South Korea's largest tourist island of Jeju, to jointly develop a walking route in Mongolia, the local tourist body said.

Jeju Tourism Organization chief Choi Kab-yeol and Olle Trail Foundation head Suh Myung-sook signed a business pact on the development of the Mongolian Olle Trail. The two sides reached the deal as part of efforts to expand tourism and cultural exchanges between Jeju and Mongolia and enhance the island's image as an international tourist attraction.

Under the pact, the foundation will be responsible for developing the Mongolian route's courses, manuals for maintenance of the trail and facilities for course guidance, and giving support to local publicity of the trail. The JTO will help raise funds for the development of the courses.

The two bodies are scheduled to sign a deal on June 16 with the government of Ulaanbaatar, the capital of Mongolia, over the development of the trail.

The Olle Trail, whose construction began in 2006, stretches about 422 kilometers along the coastline of the island off South Korea's southern coast. The word "Olle" comes from the old Jeju dialect meaning a very narrow alley or path from a public street to the gate of a house.

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Dances with camels, drinks with nomads

June 1 (Sun Star Cebu) "WE shall be waiting for your return for the rest of our lives!" said Tuul, our pretty Mongolian guide.x

She translated our host Natsgaa's reply, when I said that someday, I would be coming back to visit them with my family.

Maybe I should not have talked too much, more so, have said that I would be back. It must have been the vodka. Who knows, in a year or two I may be back exploring the great plains and pine forests with my kids. And so it came to pass, that I downed my fourth shot of authentic Mongolian vodka in the company of real life nomads, inside a ger tent, in the middle of nowhere, in freezing minus 10 degrees.

Ulaanbaatar's Russian charm

A couple of weeks earlier, I left the scorching heat of Cebu and joined my sister, together with four of her friends – pediatricians and oncologists. I turned 45 that week and my sister forgot my birthday. Or maybe she just feigned forgetfulness, because a couple of days later, she surprised me with an awesome gift – a round trip ticket to Mongolia.

We arrived in Chinggis Khaan Airport in the capital city of Ulaanbaatar (UB) on a clear, sunny afternoon.

Human population is 3 million; livestock population 60 million. It was May, springtime, and the temperature was 6 degrees on the Celsius scale and dropping.

The city is situated on flat land so expansive that the whole island of Cebu could easily fit into it. The horizon was lined with snow capped mountains, while on one side, were smooth rolling hills covered with residential houses. All signs were written in Russian Cyrillic script. Buildings were of Russian architecture and most public infrastructure (bridges, coal-powered plants, roads, government offices) had a touch of Russia. The most frequently spoken languages were the Mongolian Khalkha dialect and Russian.

Something like a pipeline, as thick as a huge log, caught my attention. Resembling an elevated aqueduct, it ran aboveground across the city. I later learned that it was the city's heating system. Temperatures could drop to 50 below zero degrees during winter, and the pipes supplied hot, steaming water to keep the houses, buildings and its inhabitants from freezing.

The striking Tuul River flowed across the city. This is where our guide got her name from. The river's beauty and pristine banks lined with coniferous trees matched her pretty features and mystic Mongolian character.

It suddenly got late. We felt the cold. We needed appropriate clothing. As always, it was voted that shopping would be a priority before we checked-in to our hotel.

I was watching a pair of fair-sized raptors (Mongolian condors) circling above an open pasture, when we pulled into the parking lot. A huge sign on the façade of the building read: Mongolian Cashmere. As the lady doctors shopped, I noticed that the prices, in Tughrik, the local currency, were so high. Cashmere, made from the hair of goats that graze in the cold, distant pastures of Mongolia, is one of the most effective (and expensive) types of material to keep people (and goats) warm in freezing weather. It is highly prized and has become a thriving industry that has supported many nomads.

Great and ancient roads

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14 Chinggis Avenue, Sukhbaatar District 1

Ulaanbaatar 14251, Mongolia
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