Thursday, May 31, 2012

[CPSI NewsWire: Foreign Ministry Releases Unoffical Translation and Explanation of Foreign Investment Law]

CPSI NewsWire brings you market updates on Mongolia, compiled by CPS International, a Mongolian marketing arm of CPS Securities, a Perth, WA based stockbroking and corporate advisory firm, specialising in capital raising for mining and junior stocks.

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MFAT's English translation of the Law on the Regulation of Foreign Investment in Entities Operating in Strategic Sectors

May 30 (BCM) Please click here to see the MFAT's English Translation of the Law on the Regulation of Foreign Investment in Entities Operating in Strategic Sectors

Link to article


Mongolia open to talks on investment law

May 29 (FT) Mongolia is willing to reopen negotiations on a controversial foreign investment law after next month's parliamentary elections, according to the country's president.

Known as the Qatar of central Asia because of its massive mineral potential, Mongolia is attracting keen interest from companies such as Rio Tinto, the Anglo-Australian miner, Peabody Energy of the US and China's Shenhua group. But foreign mining companies have complained that a law, rushed through parliament this month after China's Chalco sought to take control of a coal mine in the Gobi desert, could badly damage the investment climate.

In an interview with the Financial Times, Tsakhia Elbegdorj, the president, conceded there were problems with the new legislation.

"Personally I don't think this is the best law. There are many issues that deserve criticism," he said. "We are always open to improve it, including listening to the suggestions of countries and organisations that are willing to invest in Mongolia."

The new legislation restricts foreign ownership of "strategic industries", including mining, banking and telecommunications, in deals worth more than $75m to 49 per cent unless expressly approved by parliament. Foreign companies say this would make investments hostage to resource nationalism and corruption.

One observer, close to the mining industry, said foreign companies needed equity control given the uncertainties of investing in Mongolia. The country had become complacent, he said, and assumed that foreign investors, lured by huge mineral deposits on China's doorstep, would come on any terms.

Mr Elbegdorj made it clear Mongolia would not roll over to foreign demands. "We need to look more to Mongolian people's fundamental interests," he said. Now Mongolia was "at the epicentre of global attention", he said, it needed to "find a more effective equilibrium" than when the country was desperate for foreign capital.

Mr Elbegdorj denied that the legislation, which sets higher hurdles for state owned enterprises, was aimed at China. However, Ganhuyag Chuluun Hutagt, vice-minister of finance, conceded the law had been rushed through because of the Chalco bid.

Ulan Bator is concerned that China, which accounts for more than 90 per cent of Mongolia's exports, could gain an unhealthy grip over mineral pricing.

Mongolia stands on the brink of an investment bonanza that could see its economy double in size every three or four years. Last year, the economy grew at 17 per cent, among the fastest in the world. Next year that is expected to accelerate to 20 per cent as big mining investments, including a big copper and gold mine, come on stream.

The top 10 Mongolian mines alone had reserves worth $2.75tn dollars at current prices, said John Finigan, chief executive officer of Golomt Bank. Shared between 2.7m people that should make every Mongolian a millionaire, he said.

But Mr Elbegdorj warned there were grave dangers associated with mineral wealth. Chief among these were corruption. Last year, Mongolia, an economy of just $8bn, attracted foreign investment of around $5bn.

"Corruption makes Mongolia look ugly," Mr Elbegdorj said, adding that his presidential legacy should be judged according to how effective his administration had been in "eliminating, eradicating and exterminating corruption". Current laws were inadequate, he added.

Last month, authorities arrested Nambaryn Enkhbayar, the former president, in a dawn raid. Mr Enkhbayar, who went on hunger strike in protest, said the arrest was politically motivated.

In the interview, Mr Elbegdorj firmly denied that claim, saying the former president had refused to testify in relation to serious allegations. "No one has preferential rights," he said. "Fighting against corruption is not just chit-chat. It requires action."

Mr Elbegdorj also expressed concern that non-mining sectors could suffer as foreign capital rushed in. The central bank has raised rates to 13.5 per cent, which, according to one official, was "killing off" whole industries.

Mr Elbegdorj said: "With old infrastructure and with the old economic infrastructure, we cannot keep pace with the growth of foreign investment inflows. Therefore we have to channel mineral resources proceeds into other sectors."

Link to article


SouthGobi Resources Welcomes Opening of Expanded Border Crossing Infrastructure

HONG KONG, CHINA--(Marketwire - May 29, 2012) - SouthGobi Resources Ltd. (TSX:SGQ)(HKSE:1878) notes that eight new border gates exclusively for coal transportation opened at the Shivee Khuren-Ceke border crossing on May 28, 2012. The gates will significantly increase the capacity for exportation of coal from Mongolia to China.

Prior to the commencement of the new border crossing infrastructure, all coal transported out of Mongolia at Shivee Khuren-Ceke went through a single crossing gate approximately eight meters wide. Generally, empty trucks would be admitted into Mongolia in the mornings and then loaded trucks could export to China in the afternoons. The new gates create a significant increase in capacity as a number of gates will be available for simultaneous export traffic and two gates will be reserved for inbound arrival of empty trucks such that a constant two-way flow of traffic can be facilitated. At this time, the eight gates will be operated from 8am to 8pm six days per week.

"Our daily transportation record for the old border infrastructure was actually achieved last week at 409 trucks - which crossed from Mongolia to China (ie, approximately 37,000 tonnes of coal)," said Alexander Molyneux, President and CEO. "We believe the new infrastructure will eliminate the 'bottleneck' at the border for quite some time. The expanded border crossing should also reduce transportation costs because of more efficient truck utilization for the transport companies."

Link to release


Erdene Drilling Continues to Expand Altan Nar Gold Discovery

Significant New Surface Gold Mineralization Identified

HALIFAX, NOVA SCOTIA--(Marketwire - May 30, 2012) - Erdene Resource Development Corp. ("Erdene" or "Company") (TSX:ERD), is pleased to announce results from drilling and surface prospecting at the Company's 100% owned Altan Nar (Golden Sun) property in southwest Mongolia.


- Discovery Zone ("DZ") extended to north with 27 metres of 1.78 g/t gold including 8 metres of 4.5 g/t gold and 25.4 g/t silver

- High grade gold mineralized zones intersected at depth at north end of DZ with 4 metres of 10.5 g/t gold and 56 g/t silver

- Mineralization extended to depth greater than 180 metres within DZ, over a 300 metre strike

- DZ characterized by broad zones of gold mineralization, including 74 metres of 0.61g/t gold

- A new gold-silver mineralized zone was discovered approximately 1 kilometre northwest with 10 of 15 rock chip samples, collected over a 600 by 150 metre zone, returning gold values greater than 1 g/t, ranging up to 27.8 g/t gold

Altan Nar Drilling Results

A nine-hole, 2,029-metre, core drilling program was carried out in April 2012 to follow-up on previous drilling completed in the 4th quarter of 2011. Previous shallow drilling had returned up to 29 metres of 4.3 g/t gold and 24.1 g/t silver in an area now known as the Discovery Zone. (see January 18, 2012 press release) Highlights from assay results are provided in Table 1 below and a presentation of results can be viewed on the Company's website at Drilling has confirmed lateral and vertical continuity of gold-silver mineralization within the DZ. All nine holes intersected mineralized zones with greater than 1 g/t gold, and anomalous silver, lead and zinc thus confirming the widespread nature of the Altan Nar mineralized epithermal system.

Three holes drilled in the northeastern end of the DZ (TND-37, -38, and -40) confirmed the presence of gold-silver mineralization and extended the depth of the mineralized epithermal zone to approximately 180 metres. Mineralization within the DZ consists of quartz veins and breccia zones (up to 50 metres wide) with comb quartz and chalcedony textures and associated phyllic alteration, within broad zones (up to 150 metres wide) of base metal mineralization and associated propyllitic alteration.

Three holes drilled in the central part of the DZ (TND-35, -36, and -41) intersected gold-silver-bearing quartz breccia zones, previously encountered in TND-11 and TND-12, and extended the depth of the DZ to greater than 100 metres.

Results from two holes drilled in the southwestern end of the DZ (TND-33 and -34) extended the depth of the mineralization to 150 metres; however, gold-silver mineralization in this area was narrower and lower grade than previously encountered (TND-09, -19) and may represent pinching or faulting of this portion of the zone. All holes with the exception of TND-39 were drilled within the DZ. That hole, 400 metres north west of DZ returned several anomalous zones, the most significant being narrow (1 metre), high grade polymetallic, vein hosted mineralization with up to 1.5g/t gold, 13g/t silver, 2.1% lead and 5.24% zinc.

The table below provides highlights of the recent drilling. A more complete set of results along with plans and sections for Altan Nar can be found in the featured items section of our website at

Table 1: Summary of Altan Nar Drilling Results

Hole No



Interval (m)

Au g/t

Ag g/t































































































































Note: All holes were drilled at 45 to 60 degree dips and intersected zones interpreted to be steeply-dipping to vertical. Additional information is required to determine true widths.

Drill results from this program, and previous drilling in 2011, demonstrate high potential for additional discovery in the Altan Nar area.

New Gold-Silver Discovery

A new gold-silver discovery was made approximately 1 kilometre northwest of the DZ. Fifteen rock chips from epithermal-style quartz veins were collected over a 600 metre by 150 metre north-northeast-trending zone in an area with elevated gold-in-soil. Assay results revealed that 10 of the 15 samples returned significantly anomalous gold values (greater than 1 g/t); ranging from 1.1 g/t to 27.8 g/t. Those ten samples averaged 5.95 g/t gold as well as 23.1 g/t silver. This area will be targeted for drilling in Q3 2012, following the completion of detailed geochemical and geophysical surveys which should help define individual drill targets.

Exploration Plans

Results from drilling to date are being evaluated along with geological and geophysical information, lithogeochemical and petrographic studies to develop a deposit model for Altan Nar to guide future drilling. In addition, detailed mineralogical studies are nearing completion and results will be used to characterize the ore mineralogy in preparation for future metallurgical and gold deportment studies.

In 2011, soil and rock geochemistry in combination with magnetic and IP surveys proved to be useful for identifying drill targets. A prospect-wide detailed soil survey was initiated in May and is expected to be completed in June. Detailed magnetic and IP surveys are also expected to be completed in June. Results from these surveys will be used to develop targets for the next phase of drilling scheduled to be carried out in third quarter 2012.

Link to release


UTM Complete Phase I Soil Sampling Program in Mongolia

ULAANBAATAR, MONGOLIA--(Marketwire - May 29, 2012) - Undur Tolgoi Minerals Inc. ("UTM" or the "Company") (CNSX:UTM) is pleased to announce the completion of the latest phase of its exploration program on its wholly owned 9,620 hectare Under Tolgoi license in Mongolia.

The ongoing UTM exploration program has completed the following to date:

      Geological mapping programs at scales of 1:50,000 and 1:200,000 (Mongolian and Russian expeditions).

      Air-borne magnetic survey at the scale of 1:200,000 (conducted by Russians in 1980's).

      46 rock chip samples were analyzed for 14 elements (Micromine Visit 2010).

      A total of 1,504 soil samples were collected from a 250 by 250 m grid covering the whole license area, and each of the samples was sieved into two different fractions, coarse (1.2mm to 80 micron) and fine (less than 80 micron) and analyzed for 45 elements (CBM LLC, 2012).

      Interpretation of an ASTER image (commissioned by CBM LLC, 2012).

      Ground magnetic and gravity surveys have been executed by GeoSignal LLC (commissioned by CBM LLC, 2012).

Figure 1: Four soil anomalies defined by recent soil sampling (Gold in red, Base Metal in blue). (To view Figure 1, please visit the following link:

The result of work to date has enabled the Company to confirm the following:

      The soil sampling program has identified four areas of interest, with two areas being anomalous in gold and two areas being anomalous in base metals.

      Gold anomalies coincide with linear magnetic features, which may indicate quartz vein hosted gold. This bears out in field observations, but has not yet been tested by rock chip analysis.

      The two base metal areas are set next to a granitic intrusion, one in the southwest along a granite - calcareous sediment contact and the other what seems to be granite - dolerite contact.

      The license area sits on a major fault zone that separates northeast trending terrain which is a spatially favorable environment for a range of deposits.

Figure 2: Satellite with magnetic overlay, OT and UTM (To view Figure 2, please visit the following link:

      The northwestern part of the license where Cretaceous sediments are distributed, is characterized by high anomalies of both magnetic and gravity surveys, which suggests the potential for intrusive rocks within the sediments.

      The coincidence of low magnetic anomalies with the anomalous gold grades in the central part of the license indicates there may be an alteration zone with mineralization. Gold-bearing quartz veins could be found in this zone.

      As seen from the results of analyses on both soil and rock samples, quartz veins with mineralization of Au-Ag-Pb-Zn are likely to be found in greater number.

Figure 3: Alteration maps of OT and UTM (To view Figure 3, please visit the following link:

Based on exploration results to date the Company will undertake the following work program over the next three months:

      An infill soil sampling program on 250 x 50 meter spacing on the areas of interest to better define the soil anomalies.

      An induced polarization (IP) survey over the areas of interest, including the magnetic high in the NW corner of the tenement occluded by alluvium.

      A comprehensive rock chip sampling program to identify host rocks as well as an ASD/PIMA and multi element assay, to determine the alteration and possible deposit types.

Management is very pleased with the efficiency and results from the exploration program to date and certain that the summer work program will further define the areas of interest in order to identify priority drill targets.

UTM is a mineral exploration company entirely focused on Mongolia, and which through its wholly owned subsidiaries, owns 100% of the "Undur Tolgoi" mineral exploration license. This license consists of 9,620 hectares of property situated 100 kilometers from the world-scale "Oyu Tolgoi" copper and gold mine. In addition, UTM's management is actively reviewing potential acquisitions and strategic industry alliances.

Link to release


Mongolia Growth Group Ltd. Announces Private Placement Offering

Ulaanbaatar, MONGOLIA, May 30, 2012 - Mongolia Growth Group Ltd. (YAK - CNSX) ("MGG" or "the Company") is pleased to announce a non-brokered "commercially reasonable efforts" private placement offering ("Offering") of common shares ("Common Shares") to raise gross proceeds of up to CDN$ 5 million.  The Common Shares will be priced at CDN$ 3.90.

The Company intends to use the proceeds to purchase leasable real estate, to take advantage of investment opportunities and for general corporate purposes.  The Offering is scheduled to close on or about June 22, 2012 (the "Closing Date"), and is subject to certain conditions, including but not limited to, receipt of all necessary approvals including the approval of the CNSX Exchange and the securities regulatory authorities.

The Common Shares issued in connection with this Offering will be subject to a four-month hold period from the Closing Date, as prescribed by the CNSX exchange and applicable securities laws.

Link to release



29 May 2012 (BDSec) - Mongolia stocks ended lower on Tuesday with major indexes heading to its four-month low. But the volumes were very low at MNT 22.9 million (US$17.4k), so there is no conviction.

Shares of blue-chip companies helped drag the indexes lower with Berkh-Uul (-14.84%), Aduunchuluun (-5.76%), Telecom Mongolia (-5.00%) and Bayangol Hotel (-2.50%).

Local News in Brief

Aspire Mining Limited (ASX:AKM) has announced it has established a maiden 178 million tonne JORC Code compliant open pit Coal Reserve for its Ovoot Coking Coal Project in northern Mongolia.

Link to article


MSE Daily Trading Update: MIXED RESULTS ON MSE

30 May 2012 (BDSec) – The Mongolian Stock Exchange was mixed on Wednesday, with MSE Top 20 up 0.34% and BDS down 0.22% as about two shares fell for each that rose. Bayangol Hotel (BNG:MO) rebounded 2.56% to finish at MNT 40,000. The Mongolian largest beverage manufacturer APU (APU:MO) gained 2.04% to close at MNT 4,500. Cashmere manufacturer Gobi (GOV:MO) climbed 1.11% to MNT 4,550.

Eermel was the biggest decliner today, sliding more than 11%, followed by Khukh Gan (-5.00%), Darkhan Nekhii (-4.67%), Zoos Goyol (-3.82%), Ulaanbaatar Hotel (-3.60%). Aduunchuluun (ADL:MO), a coal company in eastern Mongolia, plunged 3.57% to close at MNT 2,999 after yesterday's 5.76% drop.

Local News in Brief

- Mongolia is willing to reopen negotiations on a controversial foreign investment law after next month's parliamentary elections, according to the country's president. "We are always open to improve it, including listening to the suggestions of countries and organizations that are willing to invest in Mongolia." He said. Mr Elbegdorj denied that the legislation, which sets higher hurdles for state owned enterprises, was aimed at China.

- Newly launched Mongolian Airlines Group, a full service domestic and regional carrier, has announced it has signed a major technology agreement with Amadeus, a leading travel technology provider and transaction processor for the global travel and tourism industry, which will see Amadeus provide a suite of advanced technology solutions to power the airline's passenger operations and help elevate its competitive advantage.

Link to article


The Cabinet meeting announces price of ETT share at 933

May 30 ( The Cabinet meeting of Mongolia which held on Wednesday decided share price of Erdenes Tavantolgoi will be MNT 933. The government announced to distribute 1072 share of Erdenes Tavantolgoi to every citizens.

"Our government defined platform of fair distribution of national wealth" noticed Premier S.Batbold after the meeting.

The government decision on Tavantolgoi share will be confirmed in Human Development Fund's notebook.

The government offered two option on Tavantolgoi share, to get a MNT 1,000.000 equal to 1072 share in cash or get a share. (Mogi: 1 million divided by 1072 equals 933)

Link to article


China Imported 111 Thousand Tonnes of Crude Oil From Mongolia in 2012 At $875/t

BEIJING, May 21 (Reuters) - The following table shows China's crude oil imports and exports as well as countries of origin and destination in April 2012, as provided by the General Administration of Customs of China.           

                                        Apr                                  Year to date       
                              tonnes      pct chg*      $/tonne           tonnes      pct chg*  
Crude oil                 22,262,307         3.34        901.44       92,870,435         9.32   
   Saudi Arabia            4,379,589        14.03        909.98       18,663,003        14.01   
   Angola                  3,778,101        41.23         922.6       13,302,964        23.88   
   Russia                  1,841,994        20.25        931.61        9,013,484        64.38   
   Iran                    1,594,662       -23.73        896.74        5,900,634       -30.99   
   Oman                    1,475,686       -13.87        845.75        5,742,954         2.28   
   Iraq                    1,310,613       -23.43        883.48        5,950,679        16.63   
   Kazakhstan              1,004,284         3.86        919.05        3,347,319       -14.52   
   Libya                     961,199       261.41        932.73        2,795,718        29.99   
   Venezuela                 845,883       -28.45        757.53        5,769,927        33.27   
   United Arab Emirates      666,792        30.34         952.5        2,617,241        11.11   
   Brazil                    652,384        23.33        844.97        2,151,497       -14.53   
   Kuwait                    644,016       -33.57        897.37        3,833,889        28.37   
   Australia                 627,492        93.87         956.3        1,394,929        58.06   
   Congo-Brazzaville         507,458       -16.08        884.22        2,067,552        -4.36   
   Argentina                 298,677            -        853.78          592,566        298.3   
   Ecuador                   274,824            -         858.5          520,830       139.25   
   Equatorial Guinea         241,028       -11.48        926.78          405,045       -24.84   
   Colombia                  215,552        -8.48        801.44          914,296         71.3   
   Malaysia                  184,172       105.75        918.88          469,500       -24.99   
   Qatar                     135,852  357,505,163         927.1          341,509       118.36   
   Algeria                   133,249        -8.17      1,028.76          760,185        30.57   
   Congo                     120,182            -        913.26          120,182        -3.34   
   Cameroon                  116,447            -           950          232,759        -5.91   
   Indonesia                  99,522       134.61      1,033.13          263,631       -11.68   
   Canada                     79,899            -        739.08          152,225       -42.44   
   Vietnam                    38,259       -31.68      1,020.57          206,361        -4.07   
   Thailand                   29,685         4.68         911.5          154,269        59.66   
   Mongolia                    4,805       -84.52        875.01          111,201           13   
* Percentage change from a year earlier.    

Link to article


Fitch affirms Aluminum Corporation of China at 'BBB+'/stable

May 28 (Fitch Ratings) - Fitch Ratings has affirmed Aluminum Corporation of China Limited's (Chalco) Long-Term Foreign Currency (FC) Issuer Default Rating (IDR) at 'BBB+' with Stable Outlook and Long-Term Local Currency (LC) IDR at 'A-' with Negative Outlook. The Short-Term FC and LC IDRs have been affirmed at 'F2'.

The group's investment in natural resources has expanded following Chinalco's acquisition of a 12% stake in Rio Tinto Plc ('A-'/Stable) in 2008. In 2010, Chalco joined Rio Tinto in the development of Simandou iron ore mine in Guinea and in 2012, made a bid for SouthGobi Resources Ltd, a Mongolian coal company. Domestically, Chalco started developing a domestic coal mine in Gansu Province in 2010. Fitch notes that the company continues to receive strong support from banks in funding these investments, as well as rapid government approval for rail capacity in shipping coal from the China-Mongolia borders.

Link to release


Interesting Mining Project out of Vancouver aimed at Domestic Consumption not China

May 28 (Mongolia Today Blog) As Ivanhoe Mines/Robert Friedland is slowly pushed out of Mongolia, the commercial relationship between Canada and Mongolia is likely to shrink.

Apart from the Ivanhoe satellites, South Gobi and Entrée Gold, a number of other projects are pushing forward, though many at exploration stages, see listing of non-Mongolian mining companies operating in Mongolia.

One of the Vancouver-based projects that fascinates me is Prophecy Coal's proposed power plant to be built at its Chandgana coal deposit. Prophecy has just announced that they have signed a "covenant" with the Mongolian Energy Authority and this seems to be a further step in moving this project to reality.

What I find particularly interesting about this project is that it is explicitly not aimed at exporting raw materials to China. While the economic lure of such exports has powered the Mongolian resource boom for some years (and may loom to doom Mongolia to a slowdown if Chinese consumption is indeed slowing down) it has also been at the root of some of the resentment of Chinese commercial dominance in Mongolia that may be at the root of popular anti-Chinese attitudes and also part of the explanation for a recently passed law that sets up a government (bureaucratic or parliamentary depending on size of investment) review of foreign investment.

By contrast, the Prophecy Chandgana project, if it comes to pass as currently envisioned, would fuel a power plant that would feed electricity into Mongolia's domestic grid. Power needs are significant for industrial and mining activities in Mongolia, but the need for additional power sources away from Ulaanbaatar has become ever greater with the heavier pollution that every winter seems to bring. FDI aimed at domestic consumption, even if it is commodity consumption in the form of electricity, is what makes this project unusual in my eyes.

Link to article


BCM: 2012 Parliamentary Election Candidates

May 30 (BCM) --

Dear BCM Members, 

Please click on the links below to see the list of the June 28, 2012 parliamentary election candidates. The procedure will be the combination of proportional and majoritar. 

МБЗ ийн гишүүн танаа,  

2012 оны 6 сарын 28-ны өдөр явагдах УИХ-ын сонгуульд нэр дэвшигчдийн жагсаалтыг доорх линк дээр дарж үзнэ үү. Сонгууль мажоритар, пропорционал системийн хосолсон хувилбараар явагдана.

2012 Election (by party)
2012 Election (by electoral district)

Link to BCM


Early Speculation about Likely Election Outcomes

May 28 (Mongolia Today Blog) --

[The notes below are based on conversations I've been having with Byambajav Dalaibuyan, Mendee Jargalsaikhan and Tsogtbaatar Byambaa. All foolish conclusions are mine, of course.]

This seems to be the most likely overall scenario for the election at this point, i.e. before the election campaign officially commences:

losses for the Mongolian People's Party (MPP), primarily to the Mongolian People's Revolutionary Party (MPRP);

gains for the Democratic Party (DP), primarily at the expense of the MPP;

5-10 seats for MPRP;

3-6 seats for Civil Will Green Party (CWGP).

[Note that this discounts the possibility of independent candidates winning seats, as Mendee has pointed out to me.]

BUT, obviously there is lots of room for developments to interfere with those guesses. My eye right now is on corruption and the extent to which this becomes a more general topic of discussion. The DP is pushing hard on corruption, mostly by going after Enkhbayar, while the MPP is trying to stay aloof. Either or both of these strategies might backfire, I think, and the CWGP probably has the most to gain by more discussion of corruption.

Scenarios in Order of Likelihood

A. slight DP plurality (30-35 seats), but not enough to form government with CWGP. Result: DP-led coalition with MPP, PM = Altankhuyag

B. Strong DP: DP with a significant plurality (35-37 seats), but no majority, CWGP as expected. Result DP-CWGP coalition, PM= Altankhuyag

C. A variation: slight MPP plurality (reverse DP and MPP numbers). Result: MPP-led coalition, PM = Batbold

D. DP majority: obviously, the DP would govern if it can win 38+ seats. PM = Altankhuyag.

E. Strong MPP: MPP with a significant plurality (35-37 seats), but no majority, CWGP/MPRP as expected. Result MPP-led coalition with DP, PM = Batbold. However, this might be one of the scenarios where Batbold would be tempted to talk to the MPRP about a coalition, especially if the MPRP result is weak (<7).

F. MPRP surge: If the MPRP surges (12+ seats) this surge could come at expense of either DP or MPRP, almost certainly implies a DP-MPP coalition.

G. CWGP surge: If the CWGP surges on the back of discussions of corruption (10+ seats, my student, Naranzul becomes an MP), this could, again, be at the expense of either or both MPP and DP, but this might make a DP-CWGP coalition more likely, with a more prominent role for CWGP/Oyun

H. Disputed election: Either because the results end up very close or because of (alleged or real) irregularities in the voting or counting process, the election results may be disputed, leading to some period of a continuation of the current government on a caretaker basis.

What all of these scenarios have in common is the basic conclusion that as of July there may be a different PM, but overall policies are not likely to change much. Whatever coalition ends up governing will face a stronger and, in the case of the MPRP, more vocal and more vocally populist opposition.


      Enkhbat's announcement that he's not running for re-election has cast a bit of a shadow over the CWGP

      The rank ordering of the scenarios currently depends mostly on the success of the two large parties. Their outlook might shift significantly in the course of the campaign.

      There is some internal opposition to Batbold and Altankhuyag with Khurelsukh and Battulga, respectively, waiting in the wings [point emphasized by Tsogtbaatar]

Link to article



5-р сарын 29 (Сангийн Яам) Монгол Улсын "Төсвийн тухай" хуулийн 8 дугаар бүлгийн 55 дугаар зүйлд Монгол Улсын Ерөнхийлөгчийн болон УИХ-ын сонгуулийг зарлахаас 1 сараас доошгүй хугацааны өмнө Монгол Улсын эдийн засаг, санхүү, төсвийн төлөв байдлын талаарх мэдээллийг УИХ-д ирүүлэх, уг мэдээлэлтэй УИХ танилцан, нийтэд мэдээлэхээр заасны дагуу энэхүү мэдээллийг Сангийн яамнаас нэгтгэн боловсруулсныг товчлон мэдээлж байна. 

Нэг. Эдийн засгийн төлөв байдал. 

Эдийн засгийн өсөлт өнгөрсөн дөрвөн жилийн хугацаанд дунджаар 7.8 хувь, нэг хүнд ногдох ДНБ-ийн хэмжээ 3000 ам.долларт хүрч, гадаад худалдааны нийт бараа эргэлтийн хэмжээ бараг 2 дахин нэмэгдсэний зэрэгцээ манай улсын гадаад валютын нөөц 2008 оныхоос 4 дахин нэмэгдсэн зэрэг макро эдийн засгийн үзүүлэлтүүд эерэг дүнтэй гарлаа.  

Эдийн засгийн өсөлтийн бүтцийг авч үзвэл хөдөө аж ахуйн салбарын эзлэх хувийн жин буурч ДНБ-ий 13.7 хувийг эзэлж байгаа бол үйлдвэрлэл, үйлчилгээний эзлэх хувийн жин огцом нэмэгдэж 32.6 хувьд хүрлээ. 

Эдийн засаг тэлж, эдийн засаг дахь мөнгөний нийлүүлэлт 6.4 их наяд төгрөгт хүрч, Засгийн газраас хүнсний бүтээгдэхүүний нийлүүлэлтийн хомсдолыг багасгах зорилгоор хэрэгжүүлсэн арга хэмжээний  үр дүнд инфляцын түвшин буурч байсан хэдий ч хувийн хэрэглээ нэмэгдсэн, махны үнийн хэлбэлзэл болон шатахууны үнэ огцом өссөн зэрэг шалтгаанаас улбаалан инфляцийн түвшин 2008-2011 онд жилд дунджаар 13.2 хувьтай байлаа.

Эх сурвалж


International forum on economy held

May 30 ( International forum titled "Productive growth of economy and legal reform" held on May 29-30, in Ikh Tenger, in Ulaanbaatar. The forum organized by the Presidential Office of Mongolia. The forum opened by the interview Mongolian President Tsakhia Elbegdorj with David Pilling, the Asia editor of the Financial Times.

Tsakhia Elbegdorj noticed Mongolian economy growth based on mining sector's development. "We need to develop other sectors. Mongolian economy growth should have different color as rainbow" said Ts.Elbegdorj.

Than a keynote speech delivered by MP R.Gonchigdorj, and MP D.Lundeejantsan.

Mongolian parliament approved basic laws to ensure economic growth. "The implementation of those law required social fair such as combat against corruption, to balance public and individual interest. Major companies become a monopoly. Citizens demand fair economic competition" said in keynote speech.

Around 200 delegates attend the forum.

Link to article


Mongolia seeks economic growth through legal reform

ULAN BATOR, May 29 (Xinhua) -- President Tsakhia Elbegdorj discussed corruption and other issues Tuesday during a forum called to generate ideas for creating a legal environment that will promote economic growth in Mongolia.

In addition to corruption, Elbegdorj also touched on such issues as women's participation in politics and adoption of the Fiscal Stability Law, which will play a key role in ensuring Mongolia's future economic stability.

The two-day forum aimed to reach a consensus among legal practitioners, policy makers and the business community in order to provide recommendations for creating a legal environment that will promote economic growth.

The forum, hosted by Elbegdorj's office, also was to consider issues related to foreign investment regulations, domestic and external economic policies, and banking and financial services regulations. 

Link to article



Ulaanbaatar, Mongolia, May 30 /MONTSAME/ This year, some 23 thousand hectares will be owned by people.

A decision on this matter was adopted at a regular cabinet meeting on Wednesday after a proposal was considered from the Citizens' Representative Khurals of aimags and the city.

Accordingly, 21.8 thous. hectares will be owned by people free-of-charge, and the rest will go for business purposes.

By the end of 2011, 29 thous. 917 people owned 3,071.89 hectares for family purposes free-of-charge mostly in Omnogobi, Gobisumber, Dornod, Tov and Bulgan aimags, which is one fouth of al ther lands subjected to the privatization. Less than eight per cent of such lands have gone to ownership in Zavkhan, Khovsgol, Bayan-Olgii, Uvs and Gobi-Altai aimags.

Link to Montsame


Mongolia celebrates 10th anniversary of int'l peacekeeping

ULAN BATOR, May 27 (Xinhua) -- Mongolia on Sunday staged a series of activities here to celebrate the 10th anniversary of its participation in UN peacekeeping operations.

Mongolia's contribution to international peacekeeping has greatly improved the country's global reputation, said Mongolian President Tsakhia Elbegdorj at a ceremony.

Today the Mongolian military have become an international army, added the president, who is also commander in chief of Mongolian armed forces.

During the last 10 years, Mongolia sent over 5,000 soldiers and military officers to 14 international peacekeeping operations, said Mongolian Defense Minister Jadambaa Enkhbayar.

A Mongolian motorized infantry battalion of 850 soldiers is currently in South Sudan to carry out a UN peacekeeping mission, he said, adding that Mongolia's active participation in UN peacekeeping accords with the country's national security concept and foreign policy.

Sezin Sinanoglu, UN representative in Mongolia, lauded the country's involvement, noting that compared to Mongolia's population, the country's contribution to UN peacekeeping missions is "extraordinary."

In April, the Mongolian government designated May 29th as the Day of Mongolian Peacekeepers, which falls on the same day with the International Day of United Nations Peacekeepers.

Link to article


S Korea extends job tenure for EPS workers

May 29 ( South Korea has extended the job tenure of Employment Permit System (EPS) workers to 10 years and eight months. The South Korean Ministry of Labour had proposed to extend the job tenure of EPS workers in February. Currently, EPS workers can work for a maximum of four years and 10 months.

The South Korean government approved the proposal last week. "The changes will be applied to all EPS countries in two phases," Korea Times reported. According to the plan, the extended tenure will be applicable to workers from four countries — Vietnam, Thailand, the Philippines and Pakistan — from July 2, 2012.

The extended period provision will be applied in other EPS countries including Nepal from October. Similarly, the provision will be applied to Uzbekistan, Bangladesh, Cambodia and Mongolia from October.

South Korea has changed the job period for two reasons — to retain skilled workers and reduce the number of illegal workers. EPS workers from the third world used to stay back illegally as the destination offers lucrative salaries.

Similarly, only small and medium level agriculture and manufacturing industries will benefit from the change. According to the Labour Ministry, only agriculture firms with less than 30 workers and manufacturing industries with less than 50 workers can extend the job tenure of their EPS workers.

According to the South Korean government, there were about 167,000 illegal foreign workers at the end of 2011. The government is planning to reduce at least 15,000 illegal workers in 2012 and it started arresting illegal workers from early May.

Link to article


S. Korea, Mongolia agree to streamline visa process

SEOUL, May 31 (Yonhap) -- South Korea and Mongolia signed an agreement Thursday to streamline the visa process for each other's citizens in a bid to boost people-to-people exchanges and economic cooperation between them, officials said.

The agreement was signed after talks between South Korean Foreign Minister Kim Sung-hwan and his Mongolian counterpart Gombojav Zandanshatar, who arrived in Seoul earlier in the day for a three-day visit.

"The agreement will grant the nationals of the two countries multiple-entry visas valid for a maximum of five years if they meet the required conditions, and exempt them from visa fees," ministry spokesman Cho Byung-jae said.

In additions, South Koreans who are long-term residents of Mongolia will no longer have to obtain an exit visa for a temporary trip out of the country, Cho said.

Link to article


U.S. auction house to help Mongolia trace dinosaur's origin

May 29 (Reuters) - Dallas-based Heritage Auctions on Tuesday agreed to help the Mongolian government investigate the ownership of a rare Tyrannosaurus bataar dinosaur skeleton that Mongolian officials say may have been smuggled from that country before it was auctioned in New York earlier this month.

The nearly intact skeleton - a smaller Asian cousin of the Tyrannosaurus Rex - was sold by Heritage Auctions for $1.05 million on May 20. The buyer has not been identified.

A state district judge in Dallas has granted the Mongolian government a temporary restraining order to prevent the transfer of ownership until it is determined whether it was illegally obtained from Mongolia.

"Heritage will enthusiastically strive to arrive at a mutually agreeable outcome, once the President of Mongolia has had a reasonable opportunity to investigate the circumstances," Jim Halperin, co-chairman of Heritage Auctions, which conducted the sale, told Reuters in a statement on Tuesday.

A Houston attorney for the Mongolian government attempted to block the sale but was rebuffed by auction officials, who said a restraining order from a Texas court was not enforceable in New York.

"I commend Heritage Auctions and its consignor for assisting with my investigation into the origin and legal ownership of this Tyrannosaurus bataar skeleton," Mongolian President Elbegdorj Tsakhia said on Tuesday in a statement.

The Mongolian government will send a delegation of Mongolian and non-Mongolian experts to New York City in June to inspect the skeleton, Tsakhia said.

This Tyrannosaurus bataar skeleton is 8 feet tall and 24 feet long, and was discovered in the Gobi Desert, according to Heritage Auctions. This species roamed what is now Central Asia during the Cretaceous period.

"This beautiful Tyrannosaurus skeleton is one of the most complete, most spectacular specimens that we've ever seen," David Herskowitz, director of natural history for the auction house, said in a statement.

The Gobi Desert stretches across portions of northern China and southern Mongolia. Heritage Auctions officials said it has not been determined in which country the skeleton was discovered.

"Since 90 percent of the Gobi Desert is in Mongolia, it was likely found there," said Mark Norell of the American Museum of Natural History in New York City. "Either way, Mongolia and China have the same laws regarding the sovereign ownership of dinosaur skeletons and other artifacts."

Both countries have prohibited the export of these artifacts since 1949, said Norell, who has worked extensively in Mongolia. "These fossils likely were illegally collected," he said.

Heritage officials said the skeleton has been placed in a crates in a secure location in New York City and will not be moved without court permission.

Link to article

Mongolian President and Heritage Auctions Cooperate on Investigation of Tyrannosaurus: His Excellency Elbegdorj Tsakhia, President of Mongolia, and Heritage Auctions, Inc. jointly announce their cooperation in investigating the origin and ownership of a rare Tyrannosaurus bataar skeleton that was placed for auction in New York City, on May 20, 2012 - Dallas, TX (PRWEB) May 30, 2012


Milbank Mentioned in The Lawyer  for the Largest M&A Deal in Mongolia between 2009 and 2012

HONG KONG, May 30, 2012 (Milbank) - Milbank, Tweed, Hadley & McCloy LLP was mentioned in The Lawyer for the largest M&A deal in the Mongolian market between 2009 and 2012.  Milbank advised Mongolia's leading coking coal producer Mongolian Mining Corp (MMC) in the acquisition of QGX Coal from Kerry Mining for US$950 million.  The Lawyer also highlighted Milbank's role as advisor to MMC in its IPO on the Hong Kong Stock Exchange in 2010, the first IPO on the HKSE by a Mongolian company. 

In addition, Milbank is currently representing the lead lenders on the financing of the US$5 billion Oyu Tolgoi gold and copper mine, Mongolia's largest ever financing, and has also advised on other Mongolian financings.  One of Milbank's senior partners has advised Mongolian government departments on several high-profile disputes and arbitrations and is a member of the Panel of ICSID Arbitrators by appointment of Mongolia.

Link to release


Mongolian Airlines Group implements Amadeus' industry leading technology

      Mongolian Airlines Group is the latest airline to adopt the Amadeus suite of advanced technology solutions; Amadeus Altéa Customer Management Solution and Amadeus e-Retail online booking engine.

      The start-up airline's fares will also be accessible by travel agencies globally via the Amadeus Global Distribution System (GDS).

May Newly launched Mongolian Airlines Group, a full service domestic and regional carrier, today announces it has signed a major technology agreement with Amadeus, a leading travel technology provider and transaction processor for the global travel and tourism industry, which will see Amadeus provide a suite of advanced technology solutions to power the airline's passenger operations and help elevate its competitive advantage.

Mongolian Airlines Group has selected the Amadeus Altéa Customer Management Solution to automate the airline's entire customer management process, including booking, ticketing, airport check-in and departure control, while enhancing the overall customer experience. The airline will also use Amadeus e-Retail, an online global booking solution, to power sales through its website, enabling travellers around the world to easily book Mongolian Airlines flights.

Additionally, Mongolian Airlines Group and Amadeus also signed a global distribution agreement that will enable the airline's flight schedule, fares and availability to be viewed and booked via the Amadeus Selling Platform to a global network of over 91,000 travel agents, providing the airline with a global platform, as enjoyed by over 420 major international carriers.

The agreement with Mongolian Airlines highlights the flexibility of Amadeus' solutions, which are used by both large, international airlines and small and medium size carriers alike.

Speaking about the landmark agreement, Byambajav Margad, Vice-President of Policy and Strategic Planning, Mongolian Airlines Group said, "As the leading provider of technology solutions to airlines, Amadeus was the ideal choice for Mongolian Airlines. Having Amadeus as our technology partner will give us the same technology as used by leading global airlines, allowing us to easily partner with other carriers on the Altéa platform. Amadeus will ensure that our flight services are available to the global aviation and travel network, supporting our future airline partnerships and helping to establish Mongolian Airlines Group as the leading airline for travel to and from Mongolia."

"We look forward to working with Amadeus and are confident knowing we have invested in the best technology platform available to ensure the future success of Mongolian Airlines," added Margad.

John Chapman, Vice President of Airline Group Amadeus Asia Pacific, commented, "We are pleased to be Mongolian Airlines Group's technology partner as they enter the highly competitive airline industry, helping them to grow on both a local and global level. As a start-up carrier, Mongolian Airlines will benefit from the industry's most comprehensive range of functionality that already supports over 100 airlines around the world, as well as the ongoing investment made by Amadeus to ensure the Altéa suite remains at the cutting edge. Today, we are pleased to celebrate the implementation of Altéa and to welcome Mongolian Airlines to the Amadeus family."

"We will continue to develop innovative solutions that cater to the wide range of carriers we work with today, offering our customers a one-stop destination for their entire airline IT needs," added Chapman.

Over 115 carriers have selected the full Amadeus Altéa suite, including leading Asian based airlines Garuda Indonesia, Thai Airways, Cathay Pacific, Singapore Airlines, All Nippon Airways, Korean Air and Asiana Airlines.

Link to release


Electronic Replacement ID Card Printing Started

May 30 (UB Post) The Parliament of Mongolia resolved to issue new electronic ID cards to residents who lost their ID cards prior the Parliamentary and Capital City Representative Khural (City Council) Elections June 28th and who holds a reference to receive the new card.

The Chairman of the General Authority for State Registration, L.Amarsanaa, addressed a press conference regarding the issuance of the new smart ID card. According to their statement, a total of 64,940 inhabitants requested a reference on their lost, stolen or missing ID cards. Among those people, over 40 thousand are the people of a legitimate age of voting. So the Government imposed duties to issue the new ID card to those people before elections.

The printing of the new electronic ID card started from May 25, 2012. The authorities are scheduling to finish the printing of 40 thousand ID cards by June 10. Citizens shall receive their new smart ID card from the administration of the local districts and khoroos (administrative unit of a district). As cited in the law of Mongolia, the new electronic ID card will be issued free of charge once to Mongolian citizens, so those 40 thousand people will receive their cards without paying any fees.

Link to article


Steady: Mongolia is not yet the new Qatar

May 30 (FT) Kuwait 1950. Abu Dhabi 1970. Qatar 1995. Mongolia 2012? Mongolia, endowed with vast resources and growing at 17 per cent, has a gold-rush atmosphere. The miners, bankers and lawyers who have descended on Ulan Bator like to believe it is the next El Dorado. Those who wish the country well hope it can be more than that:  a well-run democracy in which opportunity is equitably spread.

John Finigan, an über-optimist who runs Mongolia's Golomt Bank, thinks of Qatar, which had an $8bn economy in 1995. Today, it has a gross domestic product of $174bn and the world's second-highest per capita income of $98,000. Why, asks Mr Finigan, shouldn't Mongolia do the same? Its top 10 mines alone contain minerals worth $2.75tn, which would make every Mongolian – all 2.7m of them – a millionaire.

Mongolia, which sits on China's doorstep, has decades worth of coal, copper, gold, rare earths and uranium. Its president calls it a global epicentre. The best response to such euphoria is, to put it in technical terms: "Whoah there."

The aspiration to turn Mongolia into a Qatar is admirable, the likelihood of it becoming Nigeria not negligible. Certainly, Mongolia's tiny population – in an area three times that of France – should help. But think about it. A country with fragile institutions and a GDP per capita of $3,000 is about to be hosed with billions of dollars. What could possibly go wrong?

There are at least four things Mongolia must get right: governance, equity, economic management and geopolitical strategy. Governance is key. Here Mongolia has strengths along with obvious weaknesses. Since Mongolia broke loose of Russia in 1992, it has been, against all odds, a fairly functioning democracy. It has had regular presidential and parliamentary elections, only one mired by violence. Mongolians are 95 per cent literate. What about the leaders themselves? Mongolia has a surprisingly large cohort of technocrats trained abroad, either in Russia or eastern Europe, or in the US, UK and Japan. Present leaders have gone on missions abroad reminiscent of Japan's post-Meiji forays to learn from the west. Warding off the "resource curse" is a priority: regular study trips include the Gulf, Chile, Norway and Canada.

There are plenty of negatives, too. It costs an estimated $2m to get a seat in the 76-member parliament. With MPs wages at $800 a month, that suggests they see rich rent-seeking opportunities once they get there. As the money starts to trickle in – $5bn in foreign investment last year – corruption has risen. Mongolia has slipped to 120th in Transparency International's rankings. The previous president has been arrested on suspicion of corruption, though he insists the charges are fabricated.

Assuming politicians don't steal the spoils, how should they be divided? First, Mongolia must decide how to split the booty between itself and foreigners, who have capital and knowhow. Rules for foreign investment are in flux. President Tsakhia Elbegdorj says Mongolia used to be an ugly bride. Now that she is "highly educated and beautiful", foreigners are flocking to woo her. The challenge is to raise the dowry without being greedy. If the riches in the ground are as claimed, foreigners will probably come anyway. Trickier is how to divide the cash among Mongolians. Direct transfers have been tried: a dispersal of a few hundred dollars to every Mongolian, usually before elections. That is not the way to go.

Politicians talk sensibly about investing in education, infrastructure and training. They intend to put money away in a stabilisation fund and a sovereign wealth fund. They will have to do all this and more. In roughly a decade, Ulan Bator's population has boomed to 1.2m. Herders have been driven by killer winters and lured by money. Only a few have found it. About 500,000 live in gers, nomad tents, most without sanitation or proper heating.

Macroeconomic management is tricky. Educated Mongolians know all about "Dutch disease", the strangling of third industries in resource-rich countries. Even before the cash is truly gushing, inflation is at 20 per cent. In 2010, Mongolia's togrog was the world's best-performing currency, not good for exporters. Other industries, such as farming, will need support. Finally comes geopolitics. It usually does. Mongolia is wedged between Russia and China, the latter a ravenous market. Yet Mongolians dislike China and suspect it of having inappropriate territorial intentions. These fears have already impeded the construction of a railway needed to export coal and triggered an ill-thought-out foreign investment law.

Undoubtedly, Mongolia has a golden opportunity. But it also has a heady brew of mammoth problems. One must wish it the best – and fear for the worst.

Link to article


Mongolia: Caught between democratization and Rio Tinto

May 31 (The Jakarta Post) Not much is heard about Mongolia, a country north of Indonesia, so far north that when I was a child I thought it was the closest place on earth to the abode of the heavenly Gods and a place where nomadic herdsmen rode on horses at lightning speed conquering the vast empty steppes.

Mongolians have recently evoked the spirit of their founder, Genghis Khan, who built the Mongolian empire in 1206. Everywhere you go, he is omnipresent, and for good reason. Having had to face giants such as the Soviet Union and China in the last few hundred years, Mongolia is now embarking on a new journey and taking on one of the world's mining giants, Rio Tinto.

Mongolia is now reinforcing its economic sovereignty by developing its mining industry. The vast Gobi desert in the southern part of Mongolia is home to some of the most valuable minerals in the world, but has only recently begun to be developed as the harsh environmental conditions had deterred many before. The Oyu Tolgoi copper mine is only 80 kilometers from the border of China, and when it begins production in 2013 it will become one of the largest copper mines in the world.

It is said that even during Genghis Khan's time, the outcropping rocks in Oyu Tolgoi, or Turquoise Hill, were smelted for copper. The mine was originally explored by Canadian company Ivanhoe and is now being developed by Rio Tinto. The Mongolian Government owns 34 percent of the mine and once in operation it is estimated that the mine will account for more than 30 percent of Mongolia's GDP.

When the Soviet Union left in 1991 after occupying the country for 70 years, all critical mining exploration data on the country was taken back to Moscow. The Russians refused to share any of this mineral mapping data with the Mongolians.

One senior Mongolian official jokingly said, "You know how these mining investors started investing here? One of our bureaucrats who knew the mineral mapping data by heart said to the investor, just dig here and trust me, I know the stomach of Mongolia by heart and there is good stuff in the ground."

Mongolia is a land of dramatic beauty. It also has one of the most dramatic histories, which is unknown to many. It won its independence in 1921 with Soviet backing and a communist regime was installed in 1924. When the Soviet Union left in 1991, the door to democratization was flung wide open, but poverty and deep economic depression also set in. The Soviet Union's assistance at its height amounted to one third of Mongolia's GDP, but suddenly disappeared over night.

The current President of Mongolia, Elbegdorj Tsakhia, who has a Harvard education, was a young man when the Russians left and led the first demonstrations for democracy and reforms in Mongolia. He told the story of how he was visited by the Polish Solidarity leaders and taught how to manage an effective demonstration, give rousing orations and write banners against the local ruling elites hanging on to Communism when the Russians left.

President Elbegdorj is a cheerful man with one of those faces which emanates eternal youth and optimism. The struggles he has been through over the last 22 years, which include being thrown out as prime minister of Mongolia twice, is reflected in his wiry old hands.

In a closed meeting with people who had come to Mongolia to share their experiences in democratic education, the passion for freedom and human rights was palpable in his being. He summarized the essence of his struggle when he said "This is my freedom; Mongolian freedom, not Western freedom and I will defend it with my life."

The multinational mining corporation Rio Tinto operates in more than 50 countries and can be likened to a state of its own. It is a commercial company, but in many ways it operates like a state, with a well-thought out public affairs policy for different countries. If anything, it is perhaps run much better than many states in the world. It has no option because it has to deliver profit to its shareholders.

The good news is that Rio Tinto, like Mongolia, has also had a long journey in democratization, which began with its Bougainville mine in Papua New Guinea in the late 1980s. It is still facing legal challenges, with a US federal appeals court reviving a lawsuit in 2011, seeking to hold Rio Tinto responsible for human rights violations and the thousands of deaths linked to the Bougainville copper and gold mine it once ran. Rio Tinto today has a global code of business conduct, where human rights and doing business democratically is its center piece. The company has learned its lesson.

Today, many in Mongolia feel that life was better under communism than it is under capitalism. There are high economic growth rates, but Mongolians note that this is not being translated into prosperity.

Poverty is at 30 percent and the disparity of income is already causing social problems. Yet there are more brand new Hummers and Mercedes Benz four wheel drives found in Ulaanbaatar than in Jakarta. President Elbegdorj is worried about this and asked "Is this economic development a blessing or a curse?"

Democratization in Rio Tinto has helped sustain profits. There may be many weaknesses in Rio Tinto, but it is in Mongolia's interest to ensure that like Rio Tinto, Mongolia can also produce profit while adhering to human rights, business integrity and accountability — all of which are pillars of democracy. This will ensure that democracy delivers and economic development can be enjoyed by all Mongolians.

Ghenghis Khan, meaning Universal Ruler, once guided Mongolia to prosperity and victory. May his spirit descend on the leaders of Mongolia today and guide them through this next challenge facing yet another giant in order that welfare is delivered to all the people of Mongolia.

The writer, a former journalist, is secretary-general of the Indonesian Community for Democracy (KID). She was a recipient of the Nieman Fellowship for Journalism at Harvard University in the class of 1994.

Link to article


Labour, Water and Development


Georgetown University

May 30 (UB Post) Two of the potentially most contentious resources related to development are labor and water. This could be especially relevant for a quickly developing country with a quickly growing population.

Mongolia does not have a quickly growing population. However, the growth of indigenous populations are sometimes overwhelmed by the inflows of expatriate workers who will work in the factories, mines, and services in a quickly developing country. As a country develops, it will need workers. Developing the required skills from the indigenous population may take more time than the industries and others are willing or able to wait. One can have laws to have a certain percentage of local labor involved in a project, but those laws and agreements need to have training and education offsets attached to them to make sure this labor is increasingly skilled.

Two examples where countries needed to import labor very quickly are the United Arab Emirates (UAE) and Qatar. Their populations are now 90 percent outsiders. So far, these countries have been very lucky with their expatriate labour. There have not been any serious problems or disturbances. Both of these countries are newly rich. They found their riches on natural resources such as oil and gas.

They are also quite small in geography and are set up in such ways that the imported labour is under legal and other controls. They have strict immigration and labour laws. Most people who are native to the country do not complain much about the imported labour. Most are rich and comfortable. They have little to complain about.

Qataris and Emiratis were mostly poor in the 1960s and 1970s. There has been a huge growth in wealth, but many of the skills needed to run these countries were not developed amongst the Qataris and Emiratis. Repeating this pattern may not be the best for Mongolia.

A more balanced development of labour skills and work ethic may be best for the future of all three countries. However, this is easier said than done.

Qatar and the UAE are doing well now. However, what happens when the oil and gas are finished. The leaders of both are worried about skills and work ethics. They are putting a lot of money toward the development of universities and training institutes.

However, building schools does not guarantee a skilled and hard working population. I respectfully suggest the Mongolia look hard at the examples of countries around the world. Mongolian leadership might want to look at how others have handled the development of their labour skills and work ethics, as well as how they handled imported labour. Repeating the mistakes of others is not in the best interests of Mongolia or Mongolians.

Qatar and the UAE are countries that are water short. They are water short to the point that they both have at most two days of water reserves if their desalinization plants ever need to be shut down. Both countries are looking into solutions to their water issues, but this is far from easy. The UAE is looking to build a nuclear power plant that would produce electricity for its growing needs, but also produce fresh water via nuclear desalinization. Qatar is looking into the possibilities of large desalinization plants using concentrated solar power. Most desalinization in both countries is powered by oil or gas. Both countries are looking into importing water for agricultural needs from the waste and other water of other countries. Both are looking into better ways to manage and price the water. Water security is one of the major worries of the leadership of both of these countries.

Qatar and the UAE are on the Arabian Gulf. They have access to salt water that they can turn into fresh. Mongolia is landlocked.

Mongolia has water resources, but as the country develops these water resources need to be properly developed and managed.

There is the Yenisei river basin, which flows towards Russia in the north. The water flows from mountains in the north. The majority of the water flows in Mongolia are from this basin. There is also the Amur River basin in the east of Mongolia. Mongolia also has some drainage areas in the south.

The most important pooled source of water in Mongolia is Lake Khuvsgul. It contains about 75 percent of the freshwater resources of the country. If the lake's environment is not properly protected, there could be very serious problems in the future. That could be said also of the over 3,000 lakes in Mongolia. Frankly, as population, agriculture and industry grow Mongolia will need all the water it can find. The fact that the lakes freeze for much of the year adds complexity to making water policies for the country.

The Tuul River basin is where most of the population can be found. This will be an area to watch the closest as the population and industrial growth occurs. Most of the sources of water for Mongolia are in the north and the west in the mountains, but that is not where most of the population of the country resides.

Most of the over 4,000 rivers in the country are in the north. Most of the population is in Ulaanbaatar, which is in the north, but it is not the in the best place to capture and use all of that water. Most of the greatest growth in industry will likely be in the Gobi area, where water resources are far scarcer than in the north. There is a lot of groundwater flow in the Gobi. That could help in these developments.

On the other hand, there is only so much water to go around.

Most of the use of water by Mongolia is from groundwater. Close to 50 percent water use is for livestock and agriculture. About 25 percent is used for industry. This intersection of agriculture and herding with industry may be the most contentious use of water in the future. There could be serious tensions developing between those who work in agriculture and herding and the mines. These sorts of issues might need to be planned out, contracted, and have policies in place before the problems could occur, not during or after.

In addition, over 50 percent of the water that lands on Mongolia flows into other neighbouring countries. Mongolia does not receive any water from other countries. There will likely be a need to control these water resources better in the future as Mongolia develops. (Those interested in learning more about water resources in Mongolia can look at the Food and Agriculture Organization of the United Nations (FAO) report on Mongolia at its Aquastat web page from which I got most of this water data.)

Then there are the problems of the dzud, the droughts and freezes, which kill off huge numbers of livestock regularly. As the dzud happen, the water tensions will likely rise in the future. The dzud have also caused great migration flows of people to the cities and towns, and especially to Ulaanbaatar. Those population flows have put water, education, food, employment and other stresses on the cities and towns.

Changes in the use and availability of one resource can affect the use and availability of other resources. Mongolia cannot look at the use and management of each resource separately, but, I respectfully submit, should look at properly integrating its use, pricing, and policies for many resources with a very long run view towards sustainable and balanced development.

I will turn to these and other issues later.

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The demise of nomadic culture

May 30 (UB Post) The Mongols have lived with nomadic culture since the Hunnu Empire. For aeons the main livelihood of Mongolian nomads were their domestic animals. They would move two to four times a year, following the five domestic animals (horse, camel, sheep, goat, and cow) that they are adept at raising in the vast steppe, forests and Gobi desert. This was their way of life and the only one they knew, leading them to adopt somewhat naive and egocentric beliefs about the world and people in general. Today, more than a third of the Mongolian population lives in this fashion, which makes Mongolia the country with the highest proportion of nomadic residents.

In modern society the role of nomadic culture is largely agriculture. 42 percent of the Mongolian working force is devoted to agriculture and farming and its revenue accounts for 20.6 percent of the total GDP of Mongolia. There is limited potential in the development of agriculture due to the high altitude, extreme fluctuation in temperature, long winters, and low precipitation hence the sector remains heavily focused on nomadic animal husbandry with 75 percent of the land allocated to pasture, and cropping only employing 3 percent of the population. There are some who are sceptical towards the efficiency and potential of this sector for exportation and further development, but the policy makers are firm in their conviction to produce agricultural products necessary for domestic demands.

Mongolian literature, art and music is heavily influenced by nomadic culture. They are often about love for parents and nostalgia for the feeling of home, a longing for the place where one grew up.

On the surface, moving from place to place to see and experience new places, people, cultures, cuisines, sights and scenes may seem exiting and liberating; but its disadvantages far outweigh the advantages. It is like saying the "grass looks greener on the other side of the fence".

Many tourists who come to visit Mongolia are particularly curious about the life of the nomads, believing it to be a fascinating aspect of Mongolian culture and a wonderful example of the many colours of life. And there is no doubt that the freedom on horsebacks and the mysterious wild aura exuded by nomads can be attractive and reminiscent of the old Wild West. But if you consider what this lifestyle would imply, the life of a nomad is often lonely and frustrating because they never stay in one place for long enough to have the support of friends. They are unable to have long friendships in one place and tend to lose contact over a period of time. Their access to education, medical care and other social services are extremely limited.

The repercussions and consequences of nomadic culture are hidden in plain sight today. Not many realise that this lifestyle is the reason for the lack of infrastructure, stability, industrialism, development of social care and structure and ultimately the lengthy stagnation of the economics in the past. When the majority of the people can't establish stable communication it is difficult to grow as a whole.

The division of labour concept states that larger economies tend to have a larger division of labour, meaning the role and task of an individual in the economy is very small and specific. This way the individual is able to become more proficient at his work but not know the job and duties of other. This makes each individual very much dependent on others but at the same time they do not have to learn much to enjoy the fruits of other people's labour. People in larger economies don't need to learn about internal combustion engines to drive a car, or learn about artificial fabrics or sewing machines to wear clothes.

This concept has been reversed completely by the Mongolian nomadic culture. In nomadic culture, an individual is very much independent and does not have to rely on others to live. The nomads used to do everything from minimal household tasks to taking care of their livestock in harsh blistering winters. There is nothing wrong with this except that on a broader scale it has been proven to be far less efficient and costly to maintain this lifestyle. On a national scale, the economic development of a nation greatly depends on its efficiency of production. And many have realised that nomadic culture clearly isn't the way forward.

This is the reason that many people from rural and provincial areas of Mongolia are moving to cities. Many herders have abandoned their old way of life and have moved to the city hoping to find a better life. Thousands of students move to Ulaanbaatar each year to seeking education. All this migration and shift in paradigm has taken place largely in the last few decades causing much resistance from the older generation to conform to the newly introduced western culture.

Many are reluctant to accept the demise of the age long Mongolian nomadic culture. Nationalists will say that the nomadic culture is something to be proud of and should be preserved at all costs. They flaunt reasoning such as "we must preserve our heritage and the way of life of our forefathers" and "the Mongols have always lived as nomads and it's in our blood and bone (genes)." The last one is a blind denial to accept change and the reasoning itself is not valid. What this implies is, living generation after generation in static paradigm, with no growth or progress. This is somewhat extreme but the changes are certain to come, and adaptation is necessary to keep up with the world, or even to lead its progress. We can maintain customs if they are practical and efficient but if a new more effective method and way of living should present itself isn't it more reasonable to subscribe to it.

There have always been those who have reactionary negative attitudes towards progress because they are afraid or too lazy to change their ways. But since I believe in objective reality, in other words a reality not dependent upon perception, I think the only way to achievement, progress and development on all levels can only be reached when the perception of reality is congruent to reality. And reality is that the Mongolian nomadic culture is dying so that a better nation can be born.

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"Mogi" Munkhdul Badral

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