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Monday, October 14, 2013
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MOU up +33.4% this morning
Modun Resources signs MoU to sell coal briquettes to Mongolian Govt.
October 14 (Proactive Investors) Modun Resources (ASX: MOU) has received a strong endorsement from the Mongolian government, signing an Memorandum of Understanding to supply with coal briquettes.
Modun shares should open stronger on this news.
Under the terms of the memorandum, Modun is responsible for developing a coal mine and constructing a coal briquette plant at its Nuurst project, subject to raising the appropriate finance.
Modun is also responsible for delivering the quantity of coal briquettes as detailed in the terms and conditions of the off-take agreement currently under negotiation with the Mongolian Government.
Rick Dalton, managing director for Modun, commented: "The signing of the Memorandum is an important and final precursor to endorse the formal Off-take Agreement for the supply of the coal briquettes to the Mongolian Government.
"The Memorandum clearly outlines the responsibilities of the Government departments and ensures each parties' interests are aligned and focused on delivering the project.
"The negotiations for the Off-take Agreement continue to progress well and have now moved into the final stage of discussions."
Mongolian Feasibility Study
The independent consultants appointed by Modun have completed the Feasibility Study required by Mongolian Law, subsequent to attaining the Mining License.
Modun is undertaking a final review of the Feasibility Study with the consultants prior to submitting it to the Mineral-Resources Authority of Mongolia.
Infrastructure is the key
Nuurst is strategically located near key infrastructure which not only helps move product from the project to the end user, but is in close proximity to reduce operating costs.
Nuurst is located 6 kilometres from existing railway infrastructure, 120 kilometres south of the Mongolian capital, Ulaanbaatar, and is 600 kilometres by rail from the Chinese border.
Other major infrastructure in the vicinity includes a 35kV power supply within 6 kilometres of the project, and a 220kV powerline runs around 22 kilometres from the licence boundary.
Analysis
This is about as strong an endorsement of a mineral project that a company can get, with the government of Mongolia to buy coal briquettes from the Nuurst project.
Proactive Investors estimates this agreement to add 20-30% of value to the current market cap. of $5 million in the short to medium term.
Wolf Petroleum Investor Presentation, October 2013: Unlocking Mongolia's multibillion barrel oil potential
October 11, Wolf Petroleum Limited (ASX:WOF) --
Sentosa Mining: Notice of Annual General Meeting
October 11, Sentosa Mining Limited (ASX:SEO) --
Rating on Winsway Coking Coal (01733) cut to "Selective Default" - S&P
[ET Net News Agency, 9 October 2013] Standard & Poor's Ratings Services said today that it had lowered its long-term corporate credit rating on Winsway Coking Coal Holdings Ltd. (01733) to 'SD' (selective default) from 'CC'.
At the same time, the credit rating agency lowered the issue rating on the company's US$500 million 8.5% senior unsecured notes due 2016 to 'D' from 'CC'.
S&P also lowered its long-term Greater China regional scale rating on Winsway to 'SD' and on the notes to 'D' from 'cnCC'.
"We downgraded Winsway after the company's announcement that it will complete the buyback offer of US$153.6 million of its US$500 million 8.5% senior unsecured notes due 2016," said S&P's credit analyst Huma Shi.
The company has received consent from noteholders representing about 68.60% of the total outstanding notes. S&P views such a buyback offer as a continuation of Winsway's tender offer, and therefore a "distressed exchange," tantamount to an immediate default.
Winsway will buy back 31.27% of outstanding notes from noteholders, paying US$475 for every note of US$1,000 par value. For 2.08% of the outstanding notes, Winsway will pay noteholders US$375 for every US$1,000.
"After completion of the buyback, we will reassess Winsway's credit profile, particularly the company's liquidity position," said Shi. "We believe that under Winsway's distressed financial situation, the company's access to bank credit may be uncertain."
Rio Tinto representatives are yet to arrive for talks
October 11 /www.news.mn/ The Board members of Oyu Tolgoi who went to London for talks with Rio Tinto announced on October 7th that both parties will hold the second round of negotiations over issues regarding the massive project in Ulaanbaatar.
The Minister of Mining, D.Gankhuyag commented on the negotiation saying that "Oyu Tolgoi`s board is expected to keep negotiating on the issues. The information will emerge only after both parties have reached a solution. Personally I have no news yet".
The Prime Minister of Mongolia, N.Altankhuyag also commented on the negotiations over the Oyu Tolgoi issues saying the "Three board members of Oyu Tolgoi have arrived from their mission for talks with Rio Tinto. The parties agreed to discuss the unsolved issues in Ulaanbaatar. Rio Tinto representatives have not yet arrived for the talks. Only the individuals who are in charge of technical issues have come to Mongolia. I hope the Rio Tinto officials will arrive next week for the talks over the Oyu Tolgoi negotiation".
OT BOARD MEMBER OTGOCHULUU: GOM, OT, AND RIO TINTO ARE ALL SITTING IN ONE BOAT NOW
October 8 (BDSec) Mr. Otgochuluu, OT board member and director of Strategic Policy and Planning at Mining Ministry, gave brief interview for BloombergTV Mongolia. He commented on the London meeting and said, "The main achievement of this meeting was rebuilding the trust between GoM and Rio Tinto. Before the meeting, there were at times, Rio Tinto and GoM were distrustful to each other. The both parties replaced representatives in the discussion level. Rio Tinto also had made replacements and London meeting was between new groups of young people willing to work through all the issues. GoM, OT, and Rio Tinto are all sitting in one boat now.
We [GoM, Rio Tinto, and OT] are faced with competition in the global market in terms of getting financing and expanding our market share. Most importantly, the both parties agreed to continue the project by business principles." He also added that acquiring Entrée Gold's licenses made it possible to increase profit to Mongolia by $1.4 bn.
On reporter's question on cost overrun& underground mine financing, he said "Mongolia's GDP is only little over $10 bn, but Rio Tinto has $100 bn in assets. So, $2 bn may not be a big issue for Rio Tinto, but it is a very big number for Mongolia. Audit conclusions are made by both parties on OT LLC's costs. Now we're working on comparing these 2 conclusions. We're trying to figure out if the $2 bn was spent with a purpose of accelerating the project or spent on extravagant budgets& inefficiency. In general, GoM is emphasizing cost cutting, at the same time, Rio Tinto is more interested in accelerating the project. In brief, GoM agrees that the loan financing is a viable solution. Both parties are working towards agreeing on the loan terms such as total amount, collateral type etc. Most importantly, the loan financing shall keep the initial, agreed-on profit ratio for both parties. "
"OT agreement in brief: OT project duration is 50-60 years. Total estimated revenue is $120 bn. First stage financing is $5bn, underground mine financing is $8-9bn. Total expense is $30 bn, and major repair and maintenance cost is $15bn. Therefore, approximately, $60 bn is left for net profit. Out of that $60 bn, 50% (30 bn) will be attributable to GoM for dividend, resource usage fee. The investor gets $23 bn for dividend and $2 bn for management fee, which is around $25 bn in total (after deducting any other taxes). So, according to the agreement, GoM will get $34 bn from net profit, and investor will get $25bn."
Source: BloombergTV Mongolia, Politics Briefing Newspaper
HK's SFC signs MoU with the Financial Regulatory Commission of Mongolia
October 11 (SFC) The Securities and Futures Commission (SFC) and the Financial Regulatory Commission of Mongolia (FRC) today entered into a Memorandum of Understanding (MoU) in Ulaanbaatar, Mongolia (Note 1).
The MoU – signed by the Chairman of the SFC, Mr Carlson Tong, and the Chairman of the FRC, Mr Dashdondov Bayarsaikhan – establishes a framework for mutual assistance and facilitates the exchange of information between the two regulators.
"This MoU strengthens our abilities to protect our markets and enforce the law in relation to cross-border matters. Both Hong Kong and Mongolia will benefit from the closer regulatory relationship made possible by the MoU," Mr Tong said.
"This memorandum signifies the importance of close cooperation between the authorities and exchange of information to assist each other. I firmly believe that the SFC and the FRC relationship is taken to a new level with this MoU which promotes shared interests and cooperation for more effective financial regulation through knowledge sharing and benchmarking," Mr Bayarsaikhan said.
End
Notes:
1. The FRC is the regulator of Mongolia overseeing the securities market, commercial insurance organisations, non-bank financial institutions, and savings and credit cooperatives.
2. On 27 September 2013, the SFC and the Stock Exchange of Hong Kong Limited published a revised Joint Policy Statement regarding the listing of overseas companies. Please see the SFC's press release dated 27 September 2013.
3. Two photographs are attached to the electronic version of this press release. One photograph shows the SFC's Chairman, Mr Carlson Tong (left) and the FRC's Chairman, Mr Dashdondov Bayarsaikhan (right) sign the MoU in Ulaanbaatar, Mongolia. Another photograph featured officials of the SFC and the FRC who attended the signing ceremony.
MSE News, October 11: Top 20 -0.11%, Turnover ₮9.3 Million
Ulaanbaatar, October 11 /MONTSAME/ At the Stock Exchange trades held Friday, a total of 14 thousand and 973 shares of 21 JSCs were traded costing MNT nine million 270 thousand and 956.00.
"Remikon" /8,980 units/, "Genco tour bureau" /3,345 units/, "APU" /1,004 units/, "Hermes center" /510 units/ and "Aduunchuluun" /277 units/ were the most actively traded in terms of trading volume, in terms of trading value--"APU" (MNT three million 895 thousand and 520), "Remikon" (MNT one million 528 thousand and 448), "Shivee ovoo" (MNT one million and 240 thousand), "Aduunchuluun" (MNT 527 thousand and 463) and "Tavantolgoi" (MNT 332 thousand and 609.00).
The total market capitalization was set at MNT one trillion 427 billion 992 million 838 thousand and 175. The Index of Top-20 JSCs was 13,937.34, decreasing by MNT 14.74 or 0.11% against the previous day.
MSE News, October 10: Top 20 +0.33%, Turnover ₮14.9 Million
Ulaanbaatar, October 10 /MONTSAME/ At the Stock Exchange trades held Thursday, a total of 32 thousand and 526 shares of 20 JSCs were traded costing MNT 14 million 943 thousand and 381.00.
"Genco tour bureau" /11 thousand and 952 units/, "Silikat" /10 thousand units/, "State Department Store" /4,164 units/, "Aduunchuluun" /2,271 units/ and "Mongol savkhi" /1,135 units/ were the most actively traded in terms of trading volume, in terms of trading value--"Aduunchuluun" (MNT four million 200 thousand and 450), Silikat" (MNT one million and 970 thousand), "State Department Store" (MNT one million 748 thousand and 880), "Mongol savkhi" (MNT one million 218 thousand and 150) and "Genco tour bureau" (MNT one million 15 thousand and 920.00).
The total market capitalization was set at MNT one trillion 421 billion 928 million 629 thousand and 676. The Index of Top-20 JSCs was 13,952.08, increasing by MNT 46.29 or 0.33% against the previous day.
TTSEC LLC EXCLUDED FROM MSE MEMBERSHIP
October 10 (MSE) Based on Financial Regulatory Commission Resolution No.: 344 of 2013, article No.: 8 of Charter of Mongolian Stock Exchange and clause No.: 6.3 of "Membership Rules" of Mongolian Stock Exchange JSC, "TTSEC" LLC's membership right has been terminated.
BoM holds FX auction
October 10 (Bank of Mongolia) On the Foreign Exchange Auction held on October 10th, 2013 the BOM has received bid offer of USD and CNY from local commercial banks. BOM has sold 20.0 million USD and 103.0 million CNY to the local commercial banks.
On October 10th, 2013, The BOM has received bid offer of USD for Swap agreement from local commercial banks and sold 134.0 million USD.
Total outstanding 1-week bills fall ₮220 billion to ₮1.6 trillion
BoM issues 1-week bills
October 11 (Bank of Mongolia) BoM issues 1 week bills worth MNT 598.6 billion at a weighted interest rate of 10.5 percent per annum /For previous auctions click here/
GoM sets inflation targets: 8% in 2014, 7% in 2015-2016
October 9 (Mongolian Economy) The Standing Committee on Economy of the State Great Khural on October 8 held a discussion on a draft Monetary Policy Guidelines for 2014. The draft Guidelines have been introduced to the committee's members by Naidansurengyn Zoljargal, the Governor at the Bank of Mongolia. He said that the required objectives have been reflected in the draft Guidelines based on Mongolia's current macroeconomic circumstance and its perspective outlook.
The state policy on reduction of the country's inflation rate and strengthening of its macroeconomic and financial stability is expected to be continued next year. It will also focus on reduction of a dependency on the external economies by promoting domestic production, and the improvement of the country's economic immunisation.
Majority of the committee's members have agreed that this year's policy by the Bank of Mongolia on reducing the inflation rate and strengthening financial sector has a significant impact on counteracting the difficulties in the economy and preventing possible financial crisis.
According to the draft Guidelines, its targeted inflation rate is expected to decline at 8 percent by the end of 2014 and below 7 percent from 2015 to 2016, which will result in formation of a condition in which a long-term stability will be brought to the country's macroeconomics.
Mongolia Coal Exports Decline 20% in First Nine Months
By Michael Kohn
Oct. 11 (Bloomberg) -- Mongolia exported 11.38m tons of coal in the first nine months compared with 14.29m tons a year earlier, according to the National Statistics Office.
· The value of the coal exports fell to $783.94m in the first nine months from $1.43b a year earlier, a drop of 45%, according to the agency.
· Coal is the nation's biggest export
· Mongolia's copper concentrate exports rose to $679.6m from $626.8m a year earlier
· By volume, copper concentrate exports increased to 469,200 tons from 426,803 tons a year earlier
· That increase in copper shipments follows the start of commercial production at the Oyu Tolgoi copper and gold mine in July.
· Mongolia's total exports fell to $3.09b for the first nine months of this year compared to $3.23 a year earlier, according to the agency
· Total imports fell to $4.82b from $5.24b a year earlier
· Mongolia's exports to China, its biggest trading partner, totaled $2.66b in the first nine months, compared with $3.01b a year earlier, according to the agency
· By value, the second largest amount of exports from Mongolia went to the U.K., which purchased $154.4m of goods in the first nine months, compared with $8.4m a year earlier
· At the end of September, nonperforming loans in the banking sector reached 537.2b tugrik, an increase of 15.6% compared to the previous month and an increase 75.4% from a year earlier, according to the agency.
· Mongolia exported $478m of iron ore in the first nine months, compared to $382m a year earlier, according to the agency.
· By volume, Mongolia exported 4.68m tons of iron ore compared to 4.62m tons a year earlier, according to the agency.
· Mongolia's gold exports rose to $245.9m in the first nine months from $70.6m a year earlier
· By volume, Mongolia exported 6 tons of gold compared with 1.6 tons a year earlier, according to the agency.
· Oil exports rose to 3.5m barrels in the first nine months compared to 2.4m barrels a year earlier, according to the agency
Social and economic situation of Mongolia (As of the first 9 months of 2013)
…
II. Macroeconomic indicators
The national consumer price index in September 2013, increased by 1.4 percent compared to the previous month, 8.2 percent compared to the beginning of the year, and 9.9 percent compared to same period of the previous year.
The increase in national index compared to the previous month was mainly due to 0.5 percent increase in food and non-alcoholic beverages, 2.6 percent clothing, footwear and cloth, 1.8 percent housing, water, electricity and fuels.
According to the report of the Bank of Mongolia, money supply (broad money or M2) at the end of September 2013, reached to 8482.0 bln.tog, increased by of 71.9 bln.tog or 0.9 percent compared to the previous month, and increased by 1369.8 bln.tog or 19.3 percent compared to same period of the previous year.
At the end of September 2013, currency issued in circulation reached 875.0 bln.tog, desreased by 7.1 bln.tog or 0.8 percent compared to the previous month and increased by 129.3 bln.tog or 17.3 percent compared to same period of the previous year.
Loans outstanding at the end of September 2013, amounted to 10153.5 bln.tog, up by 370.4 bln.tog or 3.8 percent compared to the previous month, and up by 3286.2 bln.tog or 47.9 percent compared to same period of the previous year.
Principals in arrears at the end of September 2013, reached 153.4 bln.tog, decreased by 33.0 bln.tog or 17.7 percent compared to the previous month, and increased by 36.4 bln.tog or 31.1 percent compared to same period of the previous year.
At the end of September 2012, the non-performing loans over the bank system reached 537.2 bln.tog, showing a increase of 72.4 bln.tog or 15.6 percent compared to the previous month, and a increase of 230.9 bln.tog or 75.4 percent compared to same period of the previous year.
…
What can Mongolia learn from Norway?
By: Julian Dierkes
October 10 (World Economic Forum) As Mongolia develops its mining industry to foster economic and social development, two challenges are key to the country's long-term prospects: how can Mongolia's economy move beyond its focus on resources, and how can its resource wealth be used for sustainable development?
One possible answer to these questions, which came up repeatedly during discussions at the World Economic Forum's Strategic Dialogue on the Future of Mongolia, is to set up a sovereign wealth fund (SWF).
Modeled in part on the success of Norway in turning its oil wealth into a sustainable source of government financing through its Government Pension Fund Global (GPFG), such funds have become widely used by Gulf states as well as throughout Asia, where some SWFs have a strong focus on strategic investments for geopolitical or industrial development goals.
In the Mongolian context, suggestions for the creation of a SWF focus on the need to balance fluctuations in revenue streams to the state stemming from resource activities, to seek a fiscally sustainable benefit from exhaustible resources, and to fund diversification strategies.
However, using a SWF for diversification investment is at odds with frequent calls at the Strategic Dialogue for a withdrawal of the Mongolian government as an active participant in economic activities, to a role that is focused on enabling and regulating business. If investors and financial markets do not want the Mongolian state to continue its involvement and ownership in the resource sector, why does investment in green technologies, for example, seem desirable? What makes the proponents of a liberalization of mining activities believe that the Mongolian state would be particularly good at "picking winners" in efforts to diversify the economy?
Given the Mongolian government's track record in running state-owned companies, the use of a SWF for diversification investments would raise many concerns about profitability and the likelihood of patronage and corruption in such investments.
To the extent that a SWF can balance fluctuations in revenue streams that are caused by commodity prices, Mongolia already has a Fiscal Stability Fund for this purpose. While this fund is limited in its investment opportunities due to the requirement of constant liquidity, once fully funded, it does allow the government to budget for mining revenues that are based on 10-year running averages of prices rather than on annual oscillations.
One of the express purposes of a SWF is to seek geographic diversification away from the dependence on the domestic economy, which is dominated by resources. Many such funds, including the Norwegian GPFG, are expressly prohibited from investing domestically to avoid distortions in exchange rates, but also out of concern over an investment strategy that increases rather than limits exposure to country risk. Tasking a Mongolian SWF with investment in diversification prevents such a fund's efforts to reduce exposure to the Mongolian economy and is thus counterproductive.
That is not to say that investment for diversification should not be pursued, but it is unclear whether a SWF is the appropriate vehicle for such efforts. While investments for sectoral diversification should be pursued, a broadly defined SWF is not the appropriate vehicle for such efforts.
Proposals for a Mongolian SWF aimed narrowly at financial stabilization also neglect opportunities for a wider impact that could be built into such a fund. If a SWF could be a model of transparency in investment, this could be a catalyst for deepened transparency in other sectors. Investment choices made by the SWF could be the basis for a concerted effort not only to document these choices, but also to make this documentation available and accessible to the general public.
The activities of such a fund could also be used to structure capacity building in the financial sector. For example, the running of a fund could be contracted primarily to foreign financial professionals initially, but with a clear plan for the education of Mongolian financial managers within such a fund and a gradual shift of management to Mongolian participation keeping in mind the overall aim at maximizing financial benefits.
A SWF is important for Mongolian policy-makers to consider once they overcome current blockages of revenue streams. However, such thinking needs to be targeted very specifically at specific goals. A SWF could do some very important things for Mongolia in the future, but it cannot be expected to be a fix-all.
Author: Julian Dierkes is an Associate Professor and Coordinator of the Program on Inner Asia at the Institute of Asian Research at the University of British Columbia, Vancouver, Canada. He blogs at mongoliafocus.com. Follow him @jdierkes.
If not an SWF then what?
By Julian Dierkes
October 10 (Mongolia Focus) At the recent World Economic Forum's "Strategic Dialogue on the Future of Mongolia" I heard a lot of talk about the need for the Mongolian government to shed its direct involvement in the economy, but also the recommendation to rely on a Sovereign Wealth Fund for investments to spur sectoral diversification. As I argue on the World Economic Forum's blog, you can't have both, economic liberalization and an active investment policy that selects winning companies/industries.
Yet, sectoral diversification beyond the mining industry is absolutely essential to Mongolia's long-term economic and thus also its social and economic development. The case for such diversification is based on the recognition that a) natural resources are finite, and b) market oscillations in commodity prices makes dependence on resources an inherently risky state.
How to Achieve Sectoral Diversification
This is certainly not an area that I specialize in, so what I am offering here are some interested musings.
Clearly, a (neo)liberal world order has restricted the options for an industrial policy that are available to modern states, and it is an industrial policy that is really needed in the case of Mongolia to move beyond mining and its associated industries. In the days of classic developmental states like postwar Japan through the 1980s, states had access to tools such as control over credits, foreign currencies, etc. that allowed them to direct the economy. Some states were good at this (Japan and S Korea stand out as examples) while others imitated such strategies, but were not as successful. One of the main doubts about the success of developmental policies has always been that it assumes that the state and its representatives is able to "pick winners", that is to pick sectors and firms that will be growing and successful.
Clearly, contemporary China is also pursuing developmental policies through its state-owned enterprises and somehow is able to mask subsidies under this set-up to be immune to WTO interdiction.
However, many observers would agree that the Mongolian state is not ideally situated to engage in an active industrial policy for two reasons: 1. a lack of policy analysis capacity, and 2. a close intertwining of business interests with government, or in more extreme cases, corruption.
What options might remain:
§ invest in basics
§ tax credits?
§ top-up venture fund for crowdfunding
Investments in Education, R&D, Applied Research
In the absence of an active industrial policy that targets particular technologies, sectors, or firms, many states strive to create the pre-conditions for innovation and the emergence of industries.
These preconditions include education and research, as well as the physical infrastructure to enable new industries.
In the Mongolian case this would suggest an increased focus for funding in education and research. The state universities are currently funded (almost?) entirely by tuition, though systems for research funding are under discussion or emerging. Stepping up such efforts now might lead to business opportunities in the long-term, especially when coupled with international best practice on supporting commercialization of research, etc.
Perhaps the role of the Academy of Science could be re-thought in this context. While largely a legacy of the state-socialist era when teaching in higher education and research were separated institutionally into the universities and the Academy and its institutes on a Soviet model, the institutes of the Academy could be re-invented as research institutes that focused specifically on applied research on the model of the German Fraunhofer Institutes.
Investment into applied research on minerals and minerals processing could be combined with similarly-structured efforts in other fields, particularly fields where Mongolia's territory, location and climatic conditions might offer potential for future growth. Examples could be superconducting electricity transmission that would enable an alternative energy export industry for Mongolia (as partly envisioned by the Desertec Foundation [despite the horrifying terminology of "Greater East Asia"], see also Karl-Friedrich Lenz' writings on Mongolia). Other examples might seek to capitalize on Mongolia's cold temperatures as a condition for certain industrial processes.
Investments in Infrastructure
There are entire fields of research that examine the success of innovation incubators, industrial clusters and the like. A thorough search of these literatures would likely yield some lessons for the particular Mongolian context and how to provide the infrastructure that makes the emergence of new industries more likely.
From my point of view, some of the candidates for such industrial sectors that are often mentioned in discussions in Mongolia are highly implausible, though there's always luck involved in these developments. Implausible scenarios (and thus areas where investment would not seem obvious to me):
§ Ulaanbaatar as a finance centre: Asia already has Hong Kong, Singapore, Tokyo, and whatever centres might emerge from China
§ IT industry: at such a generic level, there's nothing about Mongolia that makes this more likely and the tiny domestic market and small number of potential entrepreneurs make this unlikely in my mind
Sectors that I find much more plausible:
§ organic agriculture/meat: the world is turning to healthier food and Mongolia is ideally positioned in this regard for super-organic production. This is a sector that definitely requires infrastructure investment
§ tourism: yes, but, this will always be specific niches
§ transport hub: railroads (keeping in mind the dreaded question of gauges), but I even find the airport as a hub between Europe and Asia vaguely plausible, though that requires massive and highly concentrated investment.
I'm certainly open to suggestions/discussions of other sectors or different views on the sectors I've mentioned here. I certainly also believe that investment into building research capacity on this question in Mongolia should be a priority NOW and not just in the medium or long term
Infrastructure investment could also come in areas where such investment aims to create commercial resources rather than bricks-and-mortar facilities. Stephen Kreppel has thus been involved in a national brand strategy for Mongolia that would ideally offer a Mongolian branding that would benefit any industry or sectors, as difficult as such unified messaging might be to achieve.
Tax Credits
A classic in the arsenal of policies that is acceptable under WTO rules, but Mongolian taxes (personal and corporate) are so low already that it's unclear that there are massive incentives to be found in this area.
Crazier Ideas
With some of the excitement around crowdfunding and crowdsourcing theses days, perhaps these concepts could be adapted for industrial policies. Again, I'm mostly thinking out loud here, but could state investment not come in the form of matching grants to crowdfunded projects? In such a scenario the crowdfunding serves as the mechanism to "pick winners" relying on the distributed intelligence of the crowd rather than bureaucrats and simply super-charges such crowdfunding to enable commercial developments. Obviously, this is a bit faddish at the moment and might not be a permanent economic institutions, but the concept of crowdsourcing decisions about diversification opportunities may be applicable.
Thoughts? Ideas? Go ahead and use the Comment function below!
Event Report: World Economic Forum Strategic Dialogue on the Future of Mongolia
October 11, World Economic Forum --
Mega Projects in Mongolia
October 9 (Mongolian Economy) --
Tavan Tolgoi
Tavan Tolgoi, one of the largest coking coal deposits in the world, is located at the Ulaan Lake valley of Tsogttsetsii soum in Umnugobi aimag. Tavan Tolgoi is a deposit of strategic importance with a total estimated resource of more than six billion tonnes, of which 1.4 billion tonnes is coking coal and 4.6 billion tonnes is thermal coal. The deposit is owned by the state-owned company Erdenes Tavan Tolgoi. Its production is expected to reach 20 million tonnes a year by 2016. The Baruun (West) Tsankhi section of Tavan Tolgoi began its export of coal on September 5 this year.
Tavan Tolgoi has two main sections: Baruun Tsankhi and Zuun (East) Tsankhi. At Baruun Tsankhi, there is an estimated 1.2 billion tonnes of coal resources. Erdenes TT plans to mine four million tonnes of coal in 2014, 12 million tonnes in 2015 and 20 million tonnes in 2017. Also, a coal concentration and washing plant is expected to be put into operation by 2016.
In order to meet the energy demand for mining, the government has issued a license to establish a new power plant with the capacity of 300 megawatts at Tavan Tolgoi. Studies have been completed and now the feasibility study is being reviewed. Its construction is expected to begin this year and the first section will be commissioned by 2016.
The required investment for the power plant ranges between USD 600 million and USD 800 million, according to a preliminary estimate. At the initial stage, USD 50 million has been allocated from the Development Bank of Mongolia, of which some USD 1.9 million will be for operational expenses. The three-year construction project for the power plant will create 3,000 temporary jobs at peak construction and some 500 new jobs when it is commissioned.
The coal processing and washing plant will be environmentally friendly as it will use a coal processing technology that meets the environmental standards of the European Union. The plant will produce 13.4 million tonnes of coking coal and 3.8 million tonnes of thermal coal a year.
Oyu Tolgoi Project
Oyu Tolgoi, the third largest copper deposit, also containing gold, silver and molybdenum, is located in Umnugobi aimag, about 600 kilometres south of Ulaanbaatar and 80 kilometres north of the Mongolian-Chinese border. The Oyu Tolgoi copper concentrate plant has the capacity to produce 100,000 tonnes of copper concentrate per hour and 35 million tonnes per year. The plant is the largest in Mongolia and the complex itself is equipped with the best technology.
The plant is expected to operate at full capacity by 2019 and its deep underground mining will be launched in 2017. Eighty percent of the total resources at Oyu Tolgoi will be mined from the underground mine. Rio Tinto has delayed underground mine development. The Oyu Tolgoi deposit has a projected mine life of at least 50 years. The initial investment for the Oyu Tolgoi project was USD 6.2 billion. This project is also one of the largest employers in Mongolia. As a result of the project, Mongolia's economy is projected to grow 35 percent by 2020, generating between USD 800 billion and USD 900 billion a year in revenue.
New Railway Project
"The New Railway is a mega project of a huge political, economic and social importance to Mongolia", said Prime Minister Norovyn Altankhuyag. Required investment for the 1,800-kilometre railway is currently estimated at USD 5.5 billion.
The government has dedicated USD 200 million from the 2012 USD 1.5 billion Chinggis bond, through the Development Bank of Mongolia. Some USD 83.3 million has been already granted to Mongolian Railway, a joint venture between the Mongolian government and Russia (Mogi: Ulaanbaatar Railways is the Russia/Mongolia JV. Mongolian Railways is not). The construction of the 267-kilometre railway from Tavan Tolgoi to Gashuunsukhait is under way.
Construction of the rail will allow the transport of mining products from Oyu Tolgoi and Tavan Tolgoi to the Sainshand industrial complex for production and processing for value adding. According to the government, these mineral products will become a fundamental basis for implementing other socio-economic mega projects, including Thermal Power Plant No. 5. The state policy on the new railway will contribute to not only infrastructure but also to mining development and will increase the volume of export.
The first and second phases of the 1,800 kilometre railway project connecting Tavan Tolgoi, Sainshand and Baruun Urt, Khuut and Choibalsan, Khuut and Numrug, and Tavan Tolgoi and Gashuun Sukhait is expected to finish by 2016. The government plans to finance the project further through foreign and domestic investment. The general cost for the project is USD 2.5 million to USD 2.8 million per kilometre, according to a preliminary estimate.
Sainshand Industrial Complex Project
The Sainshand Industrial Complex project is of special importance because it launches Mongolia's industry. A master plan for the project has been developed by the US corporation Bechtel. The industrial complex is expected to be put into operation by 2019. The project is led by the state owned enterprise Sainshand Industrial Complex. The industrial complex will create 12,000 new jobs initially, with that number to eventually grow to 68,000. The master plan has estimated total investment of USD 10.986 billion.
The Sainshand industrial complex will be established in Sainshand, the provincial capital of Dornogobi. It is strategically located at the eastern region's oil basin where Oyu Tolgoi and Tavan Tolgoi are also located. The finished project is projected to drive 15.8 percent of GDP growth between 2013 and 2021. General industry will benefit 57 percent while oil refinement will benefit 14 percent. Included in the project are:
· A coal and chemical plant
· An oil refining plant (with the capacity of refining from 25,000 to 30,000 barrels a day)
· A copper mill (with the capacity of processing 300,000 tonnes per year)
· A construction materials plant (to supply one million tonnes of cement per year)
· A steel and metallurgy mill (with the capacity of 4.5 tonnes per year)
· An iron ore pellet plant
· A graded iron metals plant
· A thermal power plant
Thermal Power Plant No. 5
The tender for Thermal Power Plant No. 5 was awarded to a consortium made up of the French multinational electric utility company GDF Suez, a Japanese joint venture comprising Sojitz Corporation, the largest South Korean private energy producer POSCO Energy, and Mongolia's Newcom Group. According to a preliminary estimate, the required investment is USD 1.2 billion and will require a construction period of three years, six months. It is expected to recover costs within 25 years of the plant's commissioning. The project has been in planning for a decade, but now it is about to become a reality.
Construction of the first block of the power plant was delayed from an expected launch for this year. Two million tonnes of coal is expected to be consumed by the plant each year, which will result in growth to the volume of coal mining and a substantial contribution to the sector's development. The government has approved the establishment of the new power plant in a 43 hectare area at Khuliin River valley, located at the 11th Khoroo of Ulaanbaatar's Bayanzurkh district. The plant's capacity will be 450 megawatts.
"Thermal Power Plant No. 5 will be a reliable energy source for Ulaanbaatar. Currently, energy demand is sharply increasing throughout western, eastern and southern Mongolia. To meet this demand, 450 megawatts will be required. The current total installed capacity is 1,000 MW. The new plant will be large, as it is about half the current supply", said P. Tovuudorj, head of the department for strategic policy and planning at the Ministry of Energy.
An environmental assessment for the project is expected to be conducted within this year.
Mongolian mettle
October 12 (IFR Asia) A new foreign investment law in Mongolia has caused quite an international stir for a landlocked country with about 3m people and a GDP of little over US$10bn.
After months of deliberation, parliament passed a law that effectively repeals earlier legislation that discriminated against foreign investors. The hastily drafted existing law, and the resulting regulatory uncertainty, had threatened to put an end to one of Asia's most impressive growth stories. The new rules, which go live next month, seem to put the country back on track.
That is a welcome development for Mongolia, a country that is ideally located for international investors who believe in Asian prosperity. Its neighbours, Russia and China, each have multi-trillion-dollar economies, making its already enviable mineral and metal reserves that much more valuable. Keeping outside investors away from assets that need foreign capital, technology and demand to grow was always a non-starter.
But this law is no quick fix. That may be tough news to swallow for investors in a country that watched its fortunes change so quickly and drastically in the last few years. Indeed, many foreign investors only started to take the country seriously when the Mongolian Stock Exchange's Top-20 Index rose more than 400% from January 2010 to February 2011. But like the country's 17.5% GDP growth in 2011 – up 11 points on the year – such impressive returns have hardly been sustainable.
Investors are missing the point if they only focus on the mining industry as a barometer for economic progress. The country needs to develop a stronger banking industry and capital markets to move ahead. Of course, the new law encompasses those two financial sectors, but the challenge now is to get the international markets to notice them. Mining may have brought foreign capital to Mongolia. A stronger banking infrastructure just might help keep it there.
Mongolia inches forward with new law
October 12 (IFR Asia) Mongolia will be easing restrictions on foreign investors looking to buy assets in the country in a bid to revive inflows and boost growth.
As of November 1, private firms and individuals will no longer need government approval to invest in strategic industries. Only foreign state-owned entities wanting to own more than 33% of strategic sectors, or 50% of other sectors, will have to seek consent from the government in Ulaanbaatar, according to a one of the latest drafts laws that has yet to be officially published.
The move has been welcomed as a positive step towards a more open local market, but bankers have also warned that the country's uneven record with outside investors could still hamper its prospects for attracting more capital from overseas.
Unpredictable rules have discouraged foreign dealmakers from setting foot in the country, despite its renowned mining reserves and proximity to China. Investors say there is a backlog of investments, which could be pushed through because of the change.
"The new law is very good news," said Lee Cashell, chief executive of Asia Pacific Investment Partners, which invests in Mongolian property development and cement production. "It was clear the government realised this was an urgent situation that needed to be taken care of. There should be a spike in FDI one or two months after it's in place."
A rise in investment would be welcome. In the first eight months of the year, FDI fell almost 48% year on year to US$1.8bn. The World Bank also recently revised down its 2013 growth forecast for Mongolia to 13% from the 16% it projected in April.
In addition, the Bank of Mongolia's international reserves declined to US$2.7bn in August from US$4.1bn, Moody's said.
Improving Mongolia's standing with investors comes just as the sovereign is considering another foray into the debt markets. The sovereign is understood to be looking at its first Samurai bond, a financing backed by the Japan Bank for International Cooperation.
The country has already made some recent forays into global capital markets. A sovereign bond issue and a loan from Development Bank of Mongolia have already pushed up foreign debt to US$4.7bn last year from US$2.2bn in 2011, according to Moody's.
"This is an interesting time for Mongolia," said Howard Lambert, chief representative, ING Mongolia. "The government issued US$1.5bn in five-year and 10-year bonds last year, these are the first sovereign bonds issued by the country; investors now have 1.5bn reasons to follow the country more closely."
The sovereign issue and other outstanding securities from the country will give prospective borrowers spreads to use as references their owns fundraisings.
"Previously, we have seen international issues from Mongolia's corporate, financial and quasi-sovereign sectors, the sale of the sovereign bonds gave a reference point, which, until recently, had been lacking," Lambert said.
The new law will not only relax restrictions on mining. Telecom and banking are open to investment as well, as well. Under the existing regulation those sectors were considered too important to allow private companies to buy without official consent.
The government approved the previous law in May 2012 and an April 2013 amendment still did not provide foreign firms with the clarity they needed, a Moody's report said.
The new regulations will effectively repeal the previous law, according to a Mongolia-based lawyer.
"This is a good development, but it is not the only thing they need to do," said Anushka Shah, analyst in the sovereign risk group at Moody's. "Policy has been unreliable for foreign investors in the past. I don't think investors are going to jump in right away."
Meanwhile, Hong Kong's Securities and Futures Commission and the Financial Regulatory Commission of Mongolia last Friday signed an agreement to exchange information related to regulation of the two markets.
With the new law in place, prospective investors are going to focus on the Mongolian Government's plans to develop the Oyu Tolgoi mine for signs on how the wider economy will develop.
That copper and gold mine – the country's largest – has become a symbol of the uneasy relationship Mongolian politicians have had with international investors. Earlier this year, Rio Tinto put on hold a US$5bn-plus expansion plan for the mine after the government said it would need to approve the project.
FDI suffered in turn. The dollars Rio Tinto did not spend in the country led others to opt to invest elsewhere, sources said. However, where there is a challenge here, there is also opportunity. Local investors are watching the production of the phases one and two of the mine for signs.
The first phase of the mine started shipping copper concentrate to China in July. Investors saw the shipment as one of the first signs that Mongolia's mining-based economy would deliver on its promise to international markets. As of September 18, the mine produced 160,000 tonnes of concentrate and shipped about 38,000 tonnes.
"What I'm keeping my eye on is the production from phase one of Oyu Tolgoi," Cashell said. "People mainly talk about progress on phase two. That's important, but I'm watching the first phase. If it increases as it's supposed to, it will have a huge impact on the economy. It could be responsible for five or six percentage points of growth next year."
Hey, Mongolia, You Could Be the First to Adopt Bitcoin as Currency
By Karl-Friedrich Lenz
October 13 (Lenz Blog) Julian Dierkes speculates about the possible way ahead for Mongolia and asks for ideas. He also kindly links to my posts (the "Mongolia" category of this blog).
Okay, here are some ideas not mentioned in his post.
For one, as I said before, they should open a Casino in Zamyn-Uud. That is even closer to Beijing than Macao, where the Chinese gamblers now get rid of their money.
But Mongolia could also be the first country in the World to officially adopt Bitcoin as a currency (of course while leaving the tugrik in place for the time being). Sort of like being the first country to have a website for their government way back in the 90s.
Do that. Give some banks official licenses to operate regulated Bitcoin exchanges. Any country that gets ahead in the race to regulated, safe Bitcoin exchanges can hope to get a large slice of this new financial market.
While I don't know if this is really a good idea, I do know that no country has ever tried it. With Mongolians knowing a thing or two about the Internet, it might be an interesting experiment to just do it and see what happens.
On the other hand, there may be a problem with such a plan. Of course, bribing politicians is much easier with the relative anonymity Bitcoin provides for. Mongolian politicians may be very reluctant to accept this kind of idea because they fear that it might make corruption worse. But bribery by Bitcoin can be done right now, even without any official support by the Mongolian government. So it's not really a problem after all.
Actually, if there really is a lot of corruption right now, this particular point might even help getting this kind of plan adopted.
Energy Hits New Rocks in Mongolia
TOV PROVINCE, Mongolia, Oct 10 (IPS) - Mongolia, 90 percent dependent on fuel imports from Russia and vulnerable to price hikes, is seeking to develop its oil shale deposits of at least 800 billion tons.
The country recently signed a five-year agreement with U.S. company Genie Energy to explore oil shale "in situ".
Oil shale is essentially oil trapped in solid form within rock. Shale oil, also known as kerogen, is produced by pyrolysis, hydrogenation, or thermal dissolution, by contrast with shale gas, which is extracted by hydraulic fracturing or fracking.
Jason Bane, communications director of Western Resources Advocates, an environmental group based in the U.S. state of Colorado, explained that while the United States has some of the largest shale oil reserves in the world, they are not commercially viable yet.
"In Estonia they burn oil shale for energy like you would burn coal, which is not overly complicated. But squeezing kerogen [a fossilised material in shale that yields oil upon heating] out of a rock is a different idea entirely. Small amounts of fuel have been produced at various points, but a commercial process is only theoretical," he told IPS.
"If it were possible, oil shale production would be incredibly harmful to the environment, through air pollution and intensive water use," he added.
Experts say Mongolia is especially vulnerable to climate change. This landlocked Central Asian country is already experiencing water shortages in the Gobi desert, shrinking rivers and lakes, and desertification.
Richard Heinberg, senior fellow at the Post Carbon Institute, told IPS that "Most efforts to turn this type of resource into a liquid fuel have failed financially. It has a lower energy density than coal and worse environmental impacts. This would be a disaster for Mongolia."
However, Jeremy Boak, director of the Centre for Oil Shale Technology and Research (COSTAR) at the Colorado School of Mines, challenges this. According to him, the technology is being rapidly developed and holds commercial promise. "The opposition is citing data that is decades old," he told IPS.
"[Environmental groups] commonly cite a [U.S.] Government Accountability Office report that simply reviewed all historic data, and concluded that the average [water] use would be five barrels of water per barrel of oil, with the possibility of numbers up to 12."
Boak said while experimental, the technology is not untested. "Shell has experience in Colorado. Water use is now about one barrel of water for one barrel produced," referring to unconventional energy expert Harold Vinegar, a chief scientist at Genie Energy, who previously worked with Shell.
Vinegar had conducted pilot testing on oil shale technology but retired after Shell stopped the research. Then he joined Genie.
"One cannot equate potential environmental impacts with certain environmental catastrophe, as some groups have tended to do," Boak said.
Geoscientist David Hughes with the Post Carbon Institute is aware of Vinegar's work in Shell.
"The heating of shale underground to extract the oil lasts up to three or four years," he told IPS. "The freeze wall [developed while Vinegar was signed on with Shell] is to prevent groundwater from invading the heating process. Shell shut down the process but declared the freeze wall to be a success. There will have to be a lot of pilot testing—we're talking years and years."
Perhaps because the process is still being tested, transparency has been lacking. Sukhgerel Dugersuren, director of Oyu Tolgoi Watch, a Mongolian environmental NGO, didn't know about the agreement with Genie until Canadian anti-tar sands and shale activist Macdonald Stainsby contacted her shortly after the announcement.
Sukhgerel set a meeting for local environmental groups to get some oversight started. "Only one person I contacted personally came," she told IPS. "But that was still useful as she represents the professionals who do the EIAs [environmental impact assessments]. I am very hopeful that she will spread the news to evaluation companies."
Sukhgerel and Stainsby also learned another company, MAK from Mongolia, is working on oil shale projects near the Gobi desert.
Stainsby told IPS "I was not able, nor was Sukhgerel, to determine where the Genie plant would be located; this was not advertised - the government did not list either site [MAK or Genie] nor did it give coordinates."
They eventually learned Genie was exploring in the Tov province near Ulaanbaatar after parliament released the information in late spring. Only one foreign media outlet reported Genie had licenses in the Tov province, near the Tuul River.
Pastoralists upstream from the Tuul in the next province, close to where it merges with the Orkhon River, told IPS about Genie's presence. Dashdavaa, a herder in her sixties, said "Four or five new families came here because they had to move from Genie's work. There is not enough grass now and water for all these families here."
Her neighbour Tsetseghkorol, a woman who has lived 40 years along the river, said they don't know much about Genie's project, just that they are looking for oil and possibly want to build a plant.
IPS contacted the Ministry of Environment and Green Development several times to obtain more information, but received no reply.
Mongolia is part of the Extractive Industries Transparency Initiative (EITI), which publishes information on licenses, taxes and royalties paid to governments. When contacted, a spokesperson said they did not have information on the Mongolia-Genie agreement yet.
IPS also contacted Genie's headquarters in the U.S. several times by phone and email, but did not receive an official reply.
Mongolia is keen on investment. Although it is one of the world's fastest-growing economies, foreign direct investment this year is 42 percent down from last year. Minister of Mining D. Gankhuyag has said he looks to oil shale as a welcome new investment opportunity.
"The Mongolian government has always tried to find a balance between economic development, and conservation of the environment and culture of which they are justifiably proud," said Rebecca Watters, director of the Mongolian Wolverine Project, which studies the impact climate change has had on the shrinking habitat of the endangered species.
"The timelines involved in thinking about climate impacts are much longer than the timelines involved in a 50-year mine development, but I hope that they give consideration to these issues all the same," she told IPS.
Oil shale: Every coin has two sides
October 13 (UB Post) Mongolia has always been dependent on foreigners for fuel and petroleum goods. Although considerable deposits of oil have been discovered and extracted, Mongolia is no closer to refining and using them than it was five or ten years ago. But the talk of new horizons for Mongolia's fuel independence and further prospects have risen in the public and media with the recent discoveries of oil shale and its potential for fuel and energy.
Although the news of oil shale as a potential replacement for conventional coal and petroleum based fuel is fairly recent, oil shale is nothing new to the mineral resource sector, physicians, chemists and some economists. There has been plenty of debate on the prospects of its use while other energy and fuel sources are still present, which are easier to exploit and more efficient than oil shale.
In truth, oil shale has been used even as far back as the mid-20th century. For instance Spain and other western nations utilized shale oil extracted from open seams by distilling them, in 1930.
Oil shale has been widely used in countries with a scarce supply of petroleum, natural gas and other valuable minerals, but since the fuel extracted from oil shale is low in quantity and quality alike, and the cost of the refining process is high, there has been little use of it in countries with easier access to more common fuel and energy sources.
The method for extracting fuel from shale has been put on hold for a long time by many countries because the process is complicated and environmentally inefficient, requiring large amounts of water and producing large amounts of waste, and it is not very economically fruitful.
Although the use of oil shale is being discussed among scientists and scholars in Mongolia, progress on its development has not exceeded a few studies on the matter. The method of extraction has not been introduced to Mongolia, and since there are plenty of coal reserves in the country, the use of shale (which has a low combustion rate) has been given the backseat.
The President of the Mongolian Shale Association, Da.Ganbold (Mogi: now the CEO of Erdenes OT), stated, "To tell the truth, to reach the coal seam, soil used to be removed along with it, which caused a lot of ash and waste when used in a power plant. Since shale is even less caloric than conventional brown coal, and the transportation costs are much higher, it has largely been neglected and seen as wasteful… Not only this, some coal mining and exploration companies label lands unviable when shale stones are found in the drillings. They don't even mention the finding of shale in their reports. Because of these careless operations, shale findings and deposits have not been properly recorded and studied."
In truth, it can be said that studies on shale oil have not been conducted at all. Since exploration has not been conducted, estimating the amount of deposit is not possible. The reserve amounts hypothesized today are based on estimation methods of Russian geologists during socialist times, when Eastern Europe was united.
The Shale Association stressed that large deposits of shale stones and oil need to be identified before everything else can unfold. Not only that, but they claimed that it would be possible to conduct exploration and extraction work in areas whose licenses are for other mineral resources. Since the method of extraction is different from other mineral resource extraction, it can be done while other mining operations are active.
More good news related to shale has been reported by the Shale Association, who claims to have received good evaluations from the shale samples they sent to U.S. laboratories for tests. "The evaluations were all very positive and concluded that they were the highest quality shale. They were also low in ammonite, which suggests good quality shale," the association said.
A shale association specialist explained how shale is formed. He said that with the changes in climate and environmental conditions, some plants in the environment are unable to adapt to new conditions, causing them to rot and decompose under exposure to low air pressure and humidity, forming peat.
The peat then changes into brown coal as it subject to high pressure underground. This process takes around 55 million years according to scientists. After a long period of time, the oxygen and air inside the peat are lowered and the rate of carbon increases, resulting in the transition from peat to coal. After an even longer period of time, and repeated exposure to high pressure and temperatures, it hardens into stone coal, and anthracite.
The plant which grows with the help of sunlight turns into hard coal fuel after a tremendous geological period. During this time, it preserves all the solar energy within itself, and when it combusts, the reserved energy is released in the form of light and heat. Five to six hundred meters below the ground, it is cauterized and refined into petroleum.
The above process is similar to the method used for extraction. The simplest way to understand the process is to look at it as a speeding up of what occurs naturally.
The extraction method uses shafts that conduct heat at a temperature of above 400 degrees Celsius for long periods of time, sometimes even months, which heats the shale stones, causing it to perspire gas and oil, similar to tar sands extraction. When shale that is underground with no access to air is heated, it perspires oil which is extracted through a pump.
Reports have been circulating that U.S. energy giant Genie has been making moves to develop oil shale exploration with the government, which has been going well. They have already signed an exclusive oil shale development agreement to explore and evaluate the commercial potential of oil shale resources on a 34,470 square kilometer area in Central Mongolia.
"We started evaluating Mongolia's oil shale deposits after signing a joint survey agreement in 2012, and are very pleased to continue that work under this new agreement. Our geological team has located a world-class resource and will now identify the most advantageous areas for future commercial development," said Claude Pupkin, CEO of Genie Energy in April after the agreement was reached.
O. Erdenebulgan, Mongolia's Vice Minister of Mining, said, "Utilizing Mongolia's extensive oil shale reserves to reduce our dependence on imported oil is a strategic priority for the government. We have been impressed by Genie's commitment to Mongolia. They have the appropriate technical expertise to produce oil and gas from oil shale in an environmentally sensitive manner. We look forward to continuing to work with their team."
The plan is to start producing fuel from oil shale with fifteen years. The move could potentially save Mongolia from its total dependence on imported fuel, whose price is volatile and a threat to the sustainable and stable economic and social development of the country. Mongolia currently imports 90 percent of its petroleum needs from its neighbors. Estimates have put Mongolia's oil shale reserves at 800 billion tons or more.
On the surface it seems like a terrible waste not utilize this resource that has the potential to improve the country's economy substantially, but on the other hand, the method of exploration, by heating soil to more than 400 degree Celsius for prolonged periods of time cannot be good for the environment. And environmental activists agree.
According to the Center for Biological Diversity, the development of "oil shale" (not to be confused with "shale oil") and "tar sands" has been shown to be environmentally destructive, and water and energy intensive. Extracting oil from U.S. public lands through oil shale or tar sands would deal a disastrous blow to any hope of reducing atmospheric CO2 levels to below 350 parts per million — the level we need to reach soon to stabilize Earth's climate. Besides helping push us towards a global warming catastrophe, oil shale and tar sand development destroys wildlife habitats, wastes enormous volumes of water, pollutes air and water, and degrades and defiles vast swaths of land.
The Diplomat, a Tokyo-based, online current affairs magazine covering politics, society and culture in the Asia-Pacific said, "Oil shale is even worse than the tight oil [shale oil] extracted with fracking. The resource has a very low energy density, so much energy and effort have to be expended in extraction and upgrading each unit of output. The tar sands of Canada offer an analogy, but oil shale is an even lower-grade resource."
In short, on the one hand we have the economy, and in the other we have the environment and we cannot have both with the "oil shale revolution". This is nothing new to Mongolia with its vast mining resources. It's an age old dilemma and the needs of the economy seem to be prevailing over the needs of the environment at the moment, with so many mining activities already operating in the country. Since oil shale is new to Mongolia, more study and research into the matter has to be made before it jumps into a long term agreements. Clearly the coin has more than one side.
Independent MPs demand changes to Oyu Tolgoi agreement
October 10 /www.news.mn/ Three non party-independent representatives in Parliament held a press conference regarding the OyuTolgoi issues. Talks over the OyuTolgoi dispute between the Mongolian Government and Rio Tinto were held in London in September. Now the negotiations are ongoing with unsolved issues including 22 points related to the massive OyuTolgoi project.
The three no party-independent representatives in Parliament expressed their stances over the controversial issues of OyuTolgoi. MP Kh.Bolorchuluun said that the OyuTolgoi deposit contains an estimated 45 million tons of copper, 1800 tons of gold and silver and is ranked as the third largest in the world. But the OyuTolgoi Investment Agreement lacks. Mongolia has lost the chance to benefit from tax income of the deposit.
He continued to say that there is no value added tax income from OyuTolgoi except gold. OyuTolgoi has been freed from the Entity Income Tax till 2017. OyuTolgoi was granted a tax relief that exists in no other place in the world. Now the project investors want to increase the project cost and investment.
MP Ts.Davaasuren said that OyuTolgoi has been freed from tax. However it is now avoiding tax. The law on making the gold trade transparent was submitted to Parliament plans to reduce the royalty for use of gold resource. According to the law on gold trade transparency the five percent royalty for gold trade will be reduced to 2.5 percent.
The issue is that Mongolia frees OyuTolgoi from tax in order to mine its own gold.
MP S.Ganbaatar said that everyone knows and says that the OyuTolgoi Investment Agreement is lacking. 24 MPs submitted demands to the Prime Minister. If the new OyuTolgoi board members negotiate over the OyuTolgoi Investment Agreement it should be transparent to the public. They should report on it to Parliament. If the Government ignores the demands, the independent representatives in Parliament will suggest that the Government resign.
The current negotiations over OyuTolgoi are closed even to Parliament. The negotiation needs to be transparent.
Premier about Mongolia's Economic Situation
Ulaanbaatar, October 10 /MONTSAME/ The Prime Minister N.Altankhuyag Thursday presented a current economic situation of Mongolia at annual meeting with Ambassadors of European Union (EU) members.
He underlined that this meeting plays a vital role in intensifying a Mongolia-EU collaboration. He also said that a President of the European Commission will pay a visit to Mongolia this November and expressed a hope that in its scope many important meetings will run which would elevate the ties into a newer level.
He went on that the EU is one of the biggest investors for Mongolia, "the trade turnover increased, reaching 773 million USD last year", and concluded that the Mongolia-EU relations gained big achievements in that year.
Then the PM talked about changes in our economics emerged after the cabinet for reforms was set up. The national economy grew up 11.3% by the first half of 2013, the inflation rate has been kept within one-digit figure, and the employment rate went up thanks to augmenting vacancies, he said.
Draft bill to amend 2013 budget submitted
Ulaanbaatar, October 11 /MONTSAME/ Economic Development Minister N.Batbayar Thursday submitted to Deputy Speaker of the State Great Khural R.Gonchigdorj four draft bills.
They are amendments to the laws on 2013 budget, to the same year's Social Insurance Fund, Human Development Fund, and to a law on Government special fund.
The amendment to the 2013 budget has became imminent as the overall budget deficit has been estimated to reach 1,522.0 billion MNT surpassing three percent of GDP by the end of 2013, thus making the related law impracticable.
Minister of Economic Development meets EU Ambassadors
Ulaanbaatar, October 11 /MONTSAME/ The Minister of Economic Development N.Batbayar Thursday met 24 Ambassadors and Concurrent Non-Resident Ambassadors of the European Union's (EU) countries to Mongolia, in the State House.
The Minister informed them about a present economic situation of Mongolia, great construction, developmental policies, measures for improving the investment environment, and recently adopted law on investments.
The Ambassadors, in their turn, stressed that the Mongolia-EU relations have been activating, and expressed a willingness to expand the political collaboration and a cooperation in trade, economics and scientific spheres.
They said their countries also want to collaborate with Mongolia in human resources, holding trainings and seminars, and in sustainable economic development.
Standing committee heads meet ADB delegation
Ulaanbaatar, October 11 /MONTSAME/ Head of the parliamentary Standing committee on social policy, education, culture and science Z.Bayanselenge and a head of the Standing committee on budget Ts.Davaasuren Friday received Mr Robert Schoellhammer, the Country director of the Asian Development Bank (ADB), and Diwesh Sharan, the ADB Director for urban development and social affairs.
Mr Diwesh presented to the MPs a project on food and nutrition social welfare and the UB urban services and a ger areas development investment program.
He is confident that these project and programme will improve the social welfare of Mongolia through refining its IT system and will upgrade people's living conditions and create for them a healthy environment.
Ts.Davaasuren thanked the ADB for its work and said parliament is ready to support the above project and programme.
Ms Bayanselenge expressed opinions on directions of cooperation in developing the social sector, and asked the ADB to deliver to parliament information on their projects and programmes. She also touched upon issues of reducing the unemployment and augmenting jobs.
60 MPs absent for regular session meeting
October 11 /www.news.mn/ Friday`s regular session of Parliament was held with an attendance of only 16 out of the 76 MPs who represent communities in Parliament. During the session 45 MPs were registered as attending with a button press, but only 16 of these MPs actually attended the session meeting to discuss the draft law on the 2014 state budget.
A legislator of Parliament is obliged to attend session meetings in spite of what is being discussed unless there is an excuse or emergency. The State Great Khural (Parliament) is in the second year of a four year term. However the majority of the Members of Parliament are completing their roles as legislators not by participating in discussions but by the pressing of a button and pretending to be present.
A tipping point for Mongolia's democracy?
October 9 (openDemocracy) Sandwiched between the giants of Russia and China, Mongolia is looking to develop its vast mineral wealth. How will this affect one of the most stable democracies in the region, and what will happen to the benefits of development?
Pan-Africanism has acted as an umbrella containing diverse attempts to democratise the newly decolonised sub-Saharan continent, whether through the efforts of domestic forces or external aides, albeit with mixed results. Internal pressure groups, as well as transnational forces (especially international donors, banking institutions and multinationals) may help explain the various fates encountered by the single countries on their path to democratisation. Local variables, together with regional trends and international organisations can therefore provide a vaguely reliable model of behaviour for most of the developing countries. But, is democratisation achievable at all latitudes regardless of distinct regional peculiarities?
Whatever the approach, what happens when a nation reaches an acceptable democratic standard (i.e. free multi-party elections, a network of independent media and so on) and its mineral resources provide enough material reasons for a relatively positive outlook? Once an initial consolidation of democratic and liberal values has taken place, what happens next? Is there a stage at which the development of a nation reaches a tipping point beyond which it cannot possibly go either in terms of economic development or political advancement? Mongolia represents a unique case in this context.
Mongolia: between two authoritarian states
Landlocked between two champions of authoritarianism like Russia and China, this steppe territory with the Altai mountain range in the West and the Gobi desert in the south detached itself from the Soviet yoke and changed its Constitution in 1992, when it went from being a "people's Republic" to a multiparty state. The transition was not without issues but, 20 years later, Mongolia still represents an anomaly to scholars of democratisation. The only nation of its region to be ranked as 'Free' in Freedom House's "Freedom in the World 2013 Index", Mongolia never fell in the autocratic trap the way Kyrgyzstan and Turkmenistan did and its geostrategic position between two nuclear powers has not posed a real threat in the last two decades. On the other hand, its vast territory (roughly the size of Western Europe) is home for less than three million inhabitants, half of which live in the capital Ulan Bator, while the other half continue living as steppe nomads.
Mongolia is therefore a stable democracy despite these preconditions, rather than thanks to them. But the big engine of economic development is undeniably its soil, with its extensive mineral deposits that have recently seen the government enter a partnership with mining giant Rio Tinto to exploit the mines in the south.
In a country that in recent years has experienced a strong economic growth. The development of mining projects like Oyu Tolgoi (capable of extracting, at full capacity, 430,000 tons of copper and 425,000 ounces of gold per year on average, as well as silver and molybdenum, according to estimates made by Rio Tinto) in the south of the country, would lead one to think that the economic future of this country can be deemed if not bright, at least hopeful. The Mongolian government has structured the exploitation of this mine in such a way that it fits into the shareholding organisation of the joint venture, while still enjoying the tax revenues generated by this activity. Classically, one would be lead to think that the cash flows arising from Oyu Tolgoi would be reinvested in developing Mongolia's infrastructure in order to diversify production, thus making the country, over time, more resilient against price fluctuations of commodities that it produces. In addition, the inflow of Foreign Direct Investment and the reduction of unemployment suggest that the mine could contribute to the growth of per capita income, thus letting more complex indicators such as the United Nations' Human Development Index (based on level of education, of income and life expectancy) predict, for Mongolia, a degree of development with no equal in the region.
Is future development possible?
So, will everything be OK? Not really. The development undertaken by the country may involve a number of risks, due to the typicality of the predominant economic sector, but more importantly to Mongolia's demographic and social features. Concerns about the development of the nation may in fact lie in its own peculiar topographic arrangement. Apart from the capital city, no other urban settlement exceeds the 90.000 settlers, with most city centres consisting of an average of 20.000 residents. This, combined with the large distances between one place and the next creates a layout that discourages investments in mobility or transport infrastructures. The question of whether or not Mongolia could further develop once the wealth generated by the big mining projects will start to flow, puzzles analysts and politicians alike.
This derives in particular from the nature of Mongolia's main source of income; minerals. The minerals market is, in fact, a sector prone to the volatility of international exchanges in which there is no chance of monopolisation and wherein the production of a country is fungible with the one of another. The investments and their performance in this area are heavily influenced by international prices which could change at any time, making a project less profitable, and at risk of closure. As in the case of Mongolia, a country with high growth, it is common to observe high inflation - a phenomenon that tends to increase the operating costs -, which affects the profitability of the investment, too.
Strength in economic diversity
In this context, manufacturing and agriculture, already weak and affected by the exodus of labour and capital towards the mining sector, cannot act as a shock absorber, and in the worst cases, the country is bound to experience problems of stagnation. To prevent this situation of 'quasi-Dutch Disease' happening, it is clear that the proceeds of the dominant sector should be immediately invested in the industrial diversification of the country. But, the peculiarity of Mongolian economy, one where for instance, even the traditional investment in transport infrastructure such as highways and railways are not a priority, due to low urban density demographic structure and social traditions, limit the value of this form of investment.
Mongolia will therefore soon face a dilemma in terms of economic and social growth. How far can a country on the verge of an economic boom of epic proportions go to prevent its economy from being hijacked by not only external interests and trends, but also by the lack of an economic cycle that could harmoniously drive its growth? Also, is it possible to achieve an acceptable development standard in a country with almost no infrastructure and half its population leading a nomadic lifestyle that pre-dates Genghis Khan's Mongol Empire? The answer, as always happens with Mongolia, can be found nowhere else than in Mongolia.
Ganhuyag Chuluun Hutagt LHFORUM 2013
October 6 (Le Havre Forum) Ganhuyag Chuluun Hutagt, President, Rural MF Development Association, talks about microfinance and strategies of inclusion at the LHFORUM.
Oil & Gas Mission To Mongolia Rakes In RM677.94 Million In Sales, Business Opportunities
KUALA LUMPUR, Oct 10 (Bernama) -- The inaugural oil and gas specialised marketing mission to Mongolia generated sales and business opportunities of RM677.94 million from 102 pre-arranged business meetings.
In a statement Thursday, mission organiser, Malaysia External Trade Development Corp (Matrade), said among products and services promoted by Malaysian companies were valves, pipes and fittings, heating, ventitlation, air conditioning services, as well as drilling equipment and services.
Matrade said the mission, from Oct 1-3, received positive feedback from the Malaysian companies.
One of the participants, Innovative Fluid Process Sdn Bhd, said the company received first-hand ground level information about the market.
"This is very good," it said.
Another company, Esional Sdn Bhd, said: "This mission is really an eye-opener and has given some confidence to us for subsequent move to tap opportunities in Mongolia."
Mongolia is a fast-growing emerging market where it registered economic growth of 12.3 per cent in 2012, it said.
Matrade said Mongolia has proven reserves of 2.4 billion barrels of oil at its three producing blocks and another 10 billion barrels of oil estimated in the Eastern Mongolian Basin.
"Mongolia is planning to have its refinery plant by 2015 which will further boost the petroleum industry including the supporting industries," it said.
Mongolia Investment Summit interview on Mongolia's new Investment Law
The team of Mongolia Investment Summit 2013 spoke with Javkhlanbaatar Sereeter, Director General of the Foreign Investment Regulations and Registration Department at Mongolia's Ministry of Economic Development, about the implications of the new Investment Law that was approved by Parliament last week.
Don't forget, our special early bird discount ends next Friday(18 Oct). Book your ticket online at MongoliaInvestmentSummit.com/hongkong or call +852 2219 0111 and quote your priority code JQDYGQH to reserve your place at the Summit.
MIS: What are the key differences between the new Investment Law and the previous Strategic Entities Foreign Investment Law (SEFIL)?
Javkhlanbaatar: There are some substantial differences between the new Investment Law and the SEFIL. The SEFIL was aimed to regulate foreign investment acquisitions of more than 33% of a company's shares by both private-owned and state-owned foreign entities. The new Investment Law does include an approval procedure for deals above one-third of the shares in a domestic entity in mining, banking and finance or media and telecommunications, however this approval requirement only applies to state-owned foreign entities. In other words, the new Investment Law eliminates any approval procedure for privately owned foreign investors. It also changes regulations related to state-owned foreign entities in a business friendly way. Why business friendly? Because the new law reduces bureaucracy for the approval procedure by leaving the decision making authority with the Ministry instead of the Parliament and approval is only required for deals at or above one-third of shares, this in order to support minor business transactions.
Furthermore, the new Investment Law is a more general and fundamental act in terms of its coverage and structure rather than the SEFIL which only covered foreign investment in some sectors. As such, we should not see the new Investment Law from the angle of the SEFIL, because it brings a totally different set of rules, not only for foreign investors but also for domestic investors.
MIS: How will the new Investment Law provide certainty and guarantees to investors?
Javkhlanbaatar: To provide a stable investment environment and to give investors guarantees that are internationally recognised, are the most important goals of the new law. In fact, the Law includes a chapter on Investors Guarantees such as freedom to make investment decisions, protection against expropriation, the right to repatriate profits, freedom to choose a dispute resolution forum and so on.
On the other hand, the new Law ensures a stable investment environment through its two main regulations. Firstly, it promises to keep four main taxes (corporate income tax, customs duty, VAT and royalty in mining) stabilised for a defined period of time, 5 to 15 years, depending on the value and location of the investment.
Secondly, to safeguard the liberal principles of the law, the new Law requires the vote of at least two-thirds of the members of Parliament for any amendment to be made to the law.
MIS: What is the strategy of the Ministry of Economic Development to attract foreign investors back to Mongolia?
Javkhlanbaatar: In my view, Mongolia does have ample and unique factors to attract investment. However, it is true that we have been experiencing some challenges, mainly due to governance issues, poor infrastructure and the feasibility of economic policies. In fact, the Ministry of Economic Development has conducted several surveys in cooperation with international organisations such as UNIDO and UNESCAP. The results of these surveys have highlighted a number of issues that we need to address. Obviously, the Ministry is working hard to put comprehensive and integrated policy measures in place to ensure a stable, reliable and certain business environment for investors and to increase Mongolia's competitiveness in terms of legal and physical infrastructure and ease of doing business.#
To hear more about the new Investment Law and other relevant policies and to find out where investment and business opportunities may be opening up, join the 4th annual Mongolia Investment Summit. The Summit is the only Mongolia-focused investment event to take place in Hong Kong, Asia's key financial hub, and over the years it has established itself as one of the key events where international investors, lenders, service providers, as well as Mongolian business leaders and Government representatives meet.
With only 5 weeks left until the event, make sure you secure your ticket as early as possible to avoid disappointment. Go online at MongoliaInvestmentSummit.com/hongkong, email us at info@BeaconEvents.com or call +852 2219 0111 and quote your priority code JQDYGQH to reserve your seat.
More to come, and we look forward to seeing you next month.
With kind regards,
Lot de Jongh
Programme Director
Mongolia Investment Summit 2013 Hong Kong
P.S. Be sure to register by next Friday to save up to US$200 off the ticket price.
Asian Media Barometer Mongolia 2012 published
October 11 /www.news.mn/ The Asian Media Barometer Mongolia 2012, the first ever home-grown analyses of the media landscape, has been published by Friedrich-Ebert-Stiftung.
The introduction to the Asian Media Barometer (ANMB) says that it is an in-depth and comprehensive description measurement system for national media environments in Asia. Unlike other press surveys or media indices the ANMB is a local, self-assessment exercise based on criteria derived from international standards for media freedom. At the same time the Asian Media Barometer serves as practical lobbying tool for media organizations. Its results are presented to the public of the respective country with the aim to push and lobby for an improvement of the media situation using international standards as benchmarks.
The design and method of the Asian Media Barometer have been adopted for Asia from the African Media Barometer, which is based on home grown criteria derived from African Protocols and Declarations such as the Declaration of Principles on Freedom of Expressions in Africa (2002).
After the first successful Asian Media Barometers for India and Pakistan in 2009, Thailand in 2010, the Philippines in 2011, the Friedrich-Ebert-Stiftung media project in Asia decided to deploy this instrument for monitoring the media landscape and advocating media reforms in more Asian countries, amongst them include Mongolia 2012, Pakistan 2012 and India 2013.
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Car wash centers to no longer use public drinking water without permits
October 11 (UB Post) There are approximately 100 car wash centers in Ulaanbaatar according to unofficial reports. Over 70 of them have access to central pure water and sewage pipelines and are using drinking water distributed for public use without a permit. Now, the Ulaanbaatar Water Supply and Sewerage Authority (USUG) has decided to put a stop to the practice. As USUG director S.Unen reported, the project will kick off very soon, however detailed information can't be announced currently. He said, "Unless we solve this issue as soon as possible, we will face a much greater problem. Only 45 to 48 car wash centers operate under contract with the USUG."
After further investigation, journalists of Dailypost found out that over 60 tons of drinking water per day can potentially be saved per day once the illegal usage of water by car wash centers is resolved. Each car wash requires an average 30 liters of water and if the centers wash 20 cars a day, over 6,00l liters of drinking water for the public is being wasted now. According to this estimate, those 100 car wash centers consume around 60,000 liters of water each day.
One water expert reported, "One study showed Mongolia might experience a water shortage in 2020. Car wash centers are wasting hundreds of tons of drinking water and some refuse to pay for it. They sign contracts with USUG to pay 281 MNT for one cubic meter of water, and 161 MNT for each cubic meter of sewage, which is a very small amount of money compared to the water's importance. USUG must launch the project very soon."
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Diplomacy
Chinese spies launch hack attacks on Mongolia... to see who its friends are – report
Like checking up on your kid's Faceboo... well, not really
October 11 (The Register) Cyber-spies are targeting Mongolian businesses and government agencies to keep the attackers "aware" of the land-locked country's relationships with "Western influences" like the US and the European Union, according to a recent report.
Cyber Squared's ThreatConnect Intelligence Research Team (TCIRT) blames a "state-sponsored" Chinese hacking group for the campaign, which it says shows evidence of offensive tactics against Mongolian targets which are very similar to those long applied against Tibetan and Uyghur nationalists and affiliated groups.
The custom malware used in the anti-Mongolian campaigns shares the same functionality of malware used by an unidentified Chinese cyber-warfare unit that has been dubbed "Comment Crew" or "APT1", Cyber Squared reports.
"TCIRT has identified a series of targeted cyber attacks that have been directed against Mongolian and allied networks by several Chinese Computer Network Exploitation (CNE) groups," the cyber intelligence agency explains.
It adds:
Retrospective analysis of several targeting campaigns identified numerous examples of focused Chinese [exploitation] directed against economic, military, and diplomatic targets within Mongolia and Mongolian partners. Persistent remote access to strategic Mongolian networks would help China maintain awareness of changes in Mongolian relations with the US and other Western influences in an effort to better protect China's national interests in Mongolia and the region.
Booby-trapped documents associated with the attack include an announcement for a joint US-Mongolia military exercise called Khaan Quest 2014. Retrospective research by Cyber Squared identified additional decoy documents, written in Mongolian, themed around events such as the June 2013 Mongolian presidential election.
Cyber Squared reckons that attempts to hack Mongolian government and business computers are been motivated by "Mongolia's attempt to steer a more independent path by reaching out to what it calls 'third neighbours' such as the United States, Japan, South Korea, and the European Union."
The malware-fuelled hacking campaign would "help China maintain awareness of changes in Mongolian relations with the US and other Western influences and protect their national interests in Mongolia", thus helping to give the Chinese government the edge in relations with its northern neighbour.
More details on the attacks - including screenshots and code snippets - can be found in a blog post by Cyber Squared here.
Khaan Quest: Chinese Cyber Espionage Targeting Mongolia
October 7 (ThreatConnect) --
Executive Summary:
The ThreatConnect Intelligence Research Team (TCIRT) has identified a weaponized Microsoft Word document that contains a Concept Development Conference (CDC) announcement for the joint US and Mongolia military exercise called Khaan Quest 2014. Retrospective TCIRT research identified additional decoy documents, written in Mongolian, themed around events like the Mongolian presidential election, held in June 2013. This activity represents Chinese Computer Network Exploitation (CNE) activity against Mongolian entities and others that have economic, military, or diplomatic relations with Mongolia. Mongolia's attempt to steer a more independent path by reaching out to what it calls "third neighbors," such as the United States, Japan, South Korea, and the European Union, is possibly prompting China to conduct CNE. This would help China maintain awareness of changes in Mongolian relations with the US and other Western influences and protect their national interests in Mongolia.
…
Likely Attacker Motives:
US Military Support for Mongolia
Khaan Quest is an annual exercise hosted by the Mongolian Armed Forces with co-sponsorship alternating between the US Marine Corps Forces, Pacific and US Army Pacific. Approximately 1,000 troops from Mongolia, United States, Australia, Canada, France, Germany, Japan, India, Nepal, Republic of Korea, Tajikistan, United Kingdom and Vietnam took part in the exercise between 3 and 14 August 2013. This is a prime example of the Mongolian military benefiting from US military cooperation and support. The US has afforded Mongolian officers, citizens, and Foreign Service personnel the opportunity to attend military academic and training institutions across the US; engage in multiple training programs alongside US military personnel; and be given large amounts of technical support and upgrades. In the past, Mongolia's military has been developed and maintained largely by either Soviet Russia or China. Mongolia does not wish to repeat this scenario for fear of over-reliance on its powerful neighbors, and their possible political and military coercion, so it looks to the US for support in developing Mongolia's military. As Mongolia does not share a border with the US, and has no history of US interference, it can comfortably develop a bilateral alliance with the US. The Chinese government regards the US as "a potential foe" which is threatening to deploy an encirclement strategy connecting from Central Asia to Mongolia. Exercises such as Khaan Quest embody China's perceived US encroachment in the region. Beijing cannot afford to overlook the importance of developing relations with Mongolia to counter what they perceive as a US encirclement strategy.
Mongolian Foreign Relations
Mongolia became the 57th nation to join the Organization for Security and Co-operation in Europe (OSCE) on 21 November 2012. The OSCE Office for Democratic Institutions and Human Rights (ODIHR) also monitored the 26 June presidential election in Mongolia. ODIHR was invited by the government of Mongolia to observe the presidential election, in line with the country's commitments as an OSCE participating State. In spite of the vast borders it shares with Russia and China, Mongolia is attempting to steer a more independent path by reaching out to what it calls "third neighbors," such as the United States, Japan, South Korea, and the European Union, in order to preserve its independence. Mongolia hopes that engagements such as joining OSCE will alter the dynamics of the region, so that it will move from being bound by Russia-China geopolitics to becoming a fully independent member of the region and international society. A strategic pivot westward by Mongolia only diminishes Chinese influence.
Investment in Mongolia by China
Lying beneath Mongolia's storied lands is an estimated $1.3 trillion in mineral resources such as coal, iron ore and copper. In 2011, China was a consumer of nearly 8 million metric tons of copper, accounting for 40% of the world's total. By 2014, it is expected that China will consume nearly 84% of the world's copper. A burgeoning natural resource and mining sector is expected to make Mongolia's the second fastest growing economy worldwide in 2013, building upon over a decade of rapid economic expansion. The Oyu Tolgoi mine, a combined open pit and underground mining project in Mongolia, is the largest financial undertaking in Mongolia's history and is expected to reach 500,000 tons of copper output annually. The Oyu Tolgoi mine is being developed as a joint venture between companies Turquoise Hill Resources, Rio Tinto and the Government of Mongolia. China imported 7% of its copper from Mongolia in 2012, when Oyu Tolgoi was just starting up. By having a mine like that on their doorstep, it would decrease China's reliance on copper from Latin America, particularly Chile, where China gets over 74% of its copper. Beginning in the 1990s, China has become Mongolia's biggest trading partner, and numerous Chinese businesses are operating there. China has been the largest investor in Mongolia since 1998 and its largest trading partner since 1999. In 2009, the bilateral trade figure stood at $2.4 billion with China importing $1.3 billion worth of commodities, which accounted for more than 70 per cent of Mongolian exports. According to official Mongolian statistics, China invested a total of $2.3 billion dollars in 2009, more than 60 percent of the total foreign investment in Mongolia.
Conclusion:
This activity represents Chinese Computer Network Exploitation (CNE) activity against organizations that China perceives to be jeopardizing its interests in Mongolia. As evidenced in the weaponized Khaan Quest document described above, Chinese APT groups will likely continue targeting US military entities involved in cooperation activities with the Mongolian military. Also, western European and other governments that engage with Mongolia diplomatically will be considered CNE targets as well. China's heavy economic investment in Mongolian natural resources will likely continue to fuel cyber espionage efforts against commercial entities, particularly mining and energy exploration companies that may compete with Chinese mining and energy companies in Mongolia. Details associated with this threat have been shared system wide within all ThreatConnect Communities as Incident "20130910A: KQ14 – CDC Document Exploit". If your organization is interested in obtaining regular crowd-sourced threat intelligence that increases your awareness of existing or emerging threats please register at ThreatConnect, join our communities, connect and collaborate together.
UK Foreign Secretary on visit October 14-15
Ulaanbaatar, October 11 /MONTSAME/ The Foreign Secretary and First Secretary of State of the United Kingdom Mr William J. Hague will pay an official visit to Mongolia on October 14-15.
He has been invited by L.Bold, the Mongolian Minister of Foreign Affairs.
This is the second visit at a Foreign Ministerial level from the British side since the nations established the diplomatic relations in 1963.
Mr Hague will be received by Ts.Elbegdorj, the President, and by N.Altankhuyag, the Prime Minister. Official talks will be held between the Mongolian Foreign Minister and the UK First Secretary of State.
Mr Hague will also meet with political and business representatives, NGOs delegates, civil society, scientific and international organizations. He plans to get au fait with a project being implemented by the Save the Children international NGO in the city's Chingeltei district.
It is considered that the visit of Mr Hague will give impetus to the bilateral political trust and understanding and will enrich the relations and cooperation with economic contents.
Turkey-Mongolia visa requirement lifted temporarily
Mongolia's Enkhbold states they welcome the $300 million credit from Turkey for housing construction as part of a transformation project.
October 10 (World Bulletin/News Desk) Visa requirements between Turkey and Mongolia were lifted for no more than 30 days.
Turkish Parliament Speaker Cemil Cicek met Thursday with his Mongolian counterpart Zandaakhuu Enkhbold in Turkish capital Ankara, and the visa requirements between the two countries were lifted for at most 30 days.
Cicek underlined it would ease relations both for business and tourism.
Cicek said they followed each incident in Mongolia closely, noting, "Your acceptance of Turkey as a third neighbour country pleased us. Our relations became better after the 1990s," Cicek said, adding that more than hundred agreements were concrete evidence of such.
"The views of Turkey and Mongolia are parallel over the problems in the world, which is important to cooperation. Within this framework, it's pleasing to see Mongolia as a member of the Organization for Security and Cooperation in Europe. We congratulate them," Cicek noted.
He added that 33 of the 220 biggest building societies belonged to Turks, executing projects worth $200 billion.
Cicek's Mongolian counterpart Zandaakhuu Enkhbold stated they welcomed the $300 million credit from Turkey for housing construction as part of a transformation project, referring to their meetings with Turkish Prime Minister Recep Tayyip Erdogan during his recent visit to Mongolia.
Enkhbold announced they would open a new consulate general in Istanbul.
After the meeting, an agreement was signed between the countries which entailed the mutual lifting of visa requirements between the countries for no more than 30 days.
Agreement signed over visa-free travel in Mongolia for Turks
"It will be a significant step to encourage tourism" Enkhbold said during his visit in Cappadocia.
October 12 (World Bulletin / News Desk) An agreement was signed on Friday over the 30-day visa-free travel in Mongolia for Turkish citizens, said Chairman of Mongolian Parliament Zandaakhuu Enkhbold.
"It will be a significant step to encourage tourism," Enkhbold said during his visit in Cappadocia, a historical region in Central Anatolia, in Nevsehir province of Turkey.
Stating that he believed tourism activities between the two countries would improve, Enkhbold underlined the huge number of historical artifacts that the both countries had.
As part of his official visit in Turkey, Mongolian leader also met his Turkish counterpart Cemil Cicek on Thursday.
A new milestone of Hungarian-Mongolian economic partnership
October 10 (Ministry for National Economy, Hungary) The Hungarian-Mongolian Business Forum organized by the Hungarian Chamber of Commerce and Industry and the Mongolian National Chamber of Commerce and Industry, which was also supported by Hungary's Ministry for National Economy, held on 8 October 2013 in Budapest was an event which attracted great interest.
The business forum was held after the fourth annual meeting of the Hungarian-Mongolian Joint Committee on Economic Cooperation (JCEC) where Minister of State for Economic Regulation and the Hungarian Co-Chairman of the JCEC Kristóf Szatmáry, President of the Hungarian Chamber of Commerce and Industry Dr László Parragh, Mongolia's Minister for Environmental Protection and Green Development and the Mongolian Co-Chairwoman of the JCEC Oyun Sanajasuuren as well as General Director of the National Bank of Hungary Dr Róza Nagy delivered welcome speeches. The speakers presented the achievements of the Budapest session of the Hungarian-Mongolian Joint Committee on Economic Cooperation, emphasizing the numerous options available for improving bilateral economic relations.
At the event, representatives of the Hungarian Chamber of Commerce and Industry, the Budapest Chamber of Commerce and Industry as well as those of the National Chamber of Agriculture signed cooperation agreements along with the representatives of the Mongolian National Chamber of Commerce and Industry.
After the business forum, the Hungarian-Mongolian arm of the Hungarian Chamber of Commerce and Trade was established with the main aim of expanding business relations.
Mongolian Defense Diplomacy
By Mendee Jargalsaikhan
October 9 (The Jamestown Foundation) Over the last few months, Mongolia has hosted or taken part in several multi-national military exercises with the aim to develop the Mongolian army's peacekeeping abilities, as well as a way to leverage military-to-military ties as a tool of diplomacy.
On August 10–13, Mongolia held the annual peacekeeping exercise, Khaan Quest, which opened in the presence of Admiral Samuel Locklear, Commander of the United States Pacific Command (http://www.youtube.com/watch?v=oAgZtUB4MJE). Khaan Quest 2013 adjourned on August 14 with remarks from another high-ranking military official—Lieutenant General Terry G. Robling, the commander of the US Marine Forces in the Pacific (http://www.marforpac.marines.mil/News/NewsArticleDisplay/tabid/919/Article/148286/marforpac-commander-security-stability-prosperity-key-as-khaan-quest-2013-comes.aspx). About 1,000 troops from Australia, Canada, France, Germany, Japan, India, Nepal, South Korea, Tajikistan, the United Kingdom, the United States and Vietnam took part in this peacekeeping field training exercise, while China, Russia, Turkey and Kazakhstan sent observers. The importance of Khaan Quest goes beyond the direct military training it provides for Mongolia's soldiers. At the request of the Mongolian government, the US has provided the country assistance in transforming its former Soviet-style military training field (known as the Five Hills Training Center) into a regional peacekeeping training center. And in addition to having been the site of this year's Khaan Quest exercise, Five Hills also hosts bilateral training exercises with major powers like the US, China, India, Germany as well as minor powers such as Belgium and Qatar. Today, Mongolia's Five Hills is the only multi-national peacekeeping training center in Northeast and Central Asia.
The following month, on September 16 and 17, the Mongolian military began two separate exercises with the Russian and Chinese armed forces, respectively. About 300 military personnel of the Russian Eastern Military District, along with 800 Mongolian troops participated jointly in the Selenge 2013 counter-terrorism tactical exercise (Press Release, Ministry of Defense of Mongolia, September 16). Annual Russian-Mongolian exercises, which had resumed in 2008, are not confined to a single training center, but rather are held in different locations to support the Mongolian military's efforts at boosting its armed forces' maintenance and readiness. For instance, the 2009 exercise, Darkhan-2, was focused on rehearsing the repair and maintenance of military equipment for peacekeeping deployments (RIA Novosti, August 18, 2009; EurasiaNet, August 26, 2009).
In contrast, the next day's military exercise with the Chinese People's Liberation Army (PLA) has occurred for the first time in Mongolia. The first bilateral exercise was conducted in China in 2009. This year, 70 PLA military engineering units shared their disaster-relief expertise with their Mongolian counterparts at the Five Hills Peacekeeping Training Center (Xinhua, September 17). Interestingly, as the joint exercise was occurring, the Mongolian defense minister concluded the first-ever agreement with the PLA to develop joint military-technical cooperation in Beijing (Press Release, Ministry of Defense of Mongolia, September 19).
Rather than being signs of geostrategic competition over Mongolia by Washington, Moscow and Beijing, the three recent exercises demonstrated Ulaanbaatar's active defense diplomacy strategy. All three major powers with which Mongolia held its military drills—the US, Russia and China—are actively supporting Mongolian military's participation in global peacekeeping operations. Moreover, the recent exercises all contributed to regional confidence building measures.
Years of holding such bilateral and multilateral exercises have helped the Mongolian armed forces to modernize, raise their operational capabilities, and develop the skills necessary to deploy its peacekeepers to foreign theaters. Within just a short period of time (2003–present), Mongolia has become the second largest troop contributor from Northeast and Central Asia to United Nations peacekeeping missions, with 927 soldiers stationed abroad as of August 2013 (http://www.un.org/en/peacekeeping/contributors/2013/aug13_1.pdf). And over time, Mongolia has deployed over 800 (two rotations per year) military personnel to the International Security Assistance Force (ISAF) operation in Afghanistan (http://www.isaf.nato.int/images/stories/File/Placemats/2013-08-01%20ISAF%20Placemat-final.pdf). Given Mongolia's small population size, military, and relatively low GDP per capita, its contributions are impressive.
In return for Mongolia's previous troop deployments to the war in Iraq and the ongoing mission in Afghanistan, the US provided the country with substantial military training, education and assistance to develop a sizable (2,500 personnel) peacekeeping force, to establish the regional peacekeeping training center, and to build niche capabilities like a field hospital, military police as well as engineering capacities. As a result, the Peacekeeping Training Center is in year-round use by Mongolia in pre-deployment training, as well as for bilateral and multilateral peacekeeping training. Furthermore, a Mongolian-run field hospital (Level II) has been operating in Darfur since November 2010 (http://reliefweb.int/sites/reliefweb.int/files/resources/VoD_En_May_2013_web.pdf). The Mongolian military now has enough cadre and equipment to run its own self-sufficient peacekeeping-related training. Meanwhile, Mongolia's steadfast deployments to Afghanistan with German, US, and Belgium militaries contributed to Ulaanbaatar's new membership status in the Organization for Security and Cooperation in Europe (OSCE) as well as partnership with the North Atlantic Treaty Organization (NATO) (see EDM, May 9).
Gradually overcoming its suspicions over the regularly held Mongolian-US military exercises, the PLA has itself begun to support Mongolia's peacekeeping ambitions. In November 2011, the PLA constructed the recreational facility, "Complex for Peacekeeping." The facility is used for Mongolian peacekeepers to overcome post-deployment stress after returning home (Press Release of the Government of Mongolia, November 15, 2011). The Mongolian military also receives military engineering equipment from China for its newly established peacekeeping-designated construction-engineering battalions. Similarly, Mongolia obtained diesel armored vehicles and equipment through Russian military assistance (RIA Novosti, February 17). This cooperation is reflected in Mongolia's strategic partnership declarations with Russia and also China (http://archive.kremlin.ru/eng/speeches/2006/12/08/2145_type82914type82915_115151.shtml; People's Daily Online, June 17, 2011).
Mongolia's defense and security policies are not being driven in response to the geostrategic interests of its neighbors or international great powers. Rather, the US, Russia and China are attracted to Mongolia's non-threatening, sustained interest in taking part in global peacekeeping efforts. And developing those skills is helping Mongolia to modernize its armed forces, raise its international profile and increase the country's importance in the eyes of foreign powers and institutions. US cooperation with the Mongolian military seems to be limited to developing Mongolia's peacekeeping capabilities for taking part in UN- and coalition-led missions abroad. China and Russia are also responding favorably to Mongolia's defense diplomacy, though respectfully of each other's concern for maintaining this country's continued neutrality. Nevertheless, Russia has resumed intense bilateral military interactions, including high-level talks, military assistance (e.g., education, training, hardware), and annual military exercises that stress interoperability and readiness. On the other hand, Mongolia's approach to cooperation with China is more cautious and gradual in order to overcome their decades-long history of hostility. Overall, Mongolia's defense diplomacy, whose stated aim is developing Mongolia's international peacekeeping capabilities, has contributed to positive, balanced relations with the major powers and gained support from each of them.
Speaker starts official visit to Turkey
Ulaanbaatar, October 11 /MONTSAME/ The Speaker of the State Great Khural (parliament) Z.Enkhbold Wednesday arrived in the Republic of Turkey to pay an official visit.
He has been invited by hid Turkish counterpart Mr Cemil Cicek. On Thursday, Mr Enkhbold laid a a wreath to the Monument of Mustafa Kemal Ataturk, the founder and first President of the Republic of Turkey, in Ankara city, then, he legged the War of Independence Museum and wrote a comment in the Book of honor.
The same day, our Speaker and Mr Cemil Cicek, the Head of the National Assembly, held an individual meeting to discuss the bilateral relations, including the inter-parliamentary ties, and collaboration.
After this, expanded inter-parliamentary talks ran co-chaired by the two Speakers. Mr Enkhbold pointed out that the two countries' parliaments must play a main role in the bilateral relations "because the two nations are democratic and have the parliamentary system". He also touched upon issues of widening the bilateral traditional and friendly relations, strengthening the political and legal basis, studying progressive and new contents of Turkish laws, stabilizing the ties between parliamentary offices and friendship groups, and keeping a frequency of inter-parliamentary mutual visits.
Mr Enkhbold also proposed expanding the bilateral trade and economic relations.
In response, Mr Cicek noted that the Turkish parliament is focusing on developing of the bilateral brotherhood relations, and said his country fully supports proposals put by the Mongolian side on widening the inter-parliamentary ties as well as trade and economic relations and collaboration. Present at these talks were also A.Bakei, a head of the Mongolia-Turkey inter-parliamentary group; D.Battsogt and D.Sarangerel MPs; B.Batkhishig, the Ambassador of Mongolia to Turkey; Volkan Bozkir, a head of the Turkish parliamentary Standing committee on foreign policy; Irfan Neziroglu, the secretary-general of the National Assembly; Bahadir Yakut, a head of the External Relations section of parliament; and Murat Karagoz, the Ambassador of Turkey to Mongolia.
After the talks, an intergovernmental agreement on citizens' mutual traveling was signed by the Mongolian Ambassador B.Batkhishig and by the Director-General of the Consular Department Sakir Fakili.
Speaker meets Turkish PM
Ulaanbaatar, October 11 /MONTSAME/ In Turkey with the official visit, the Speaker of Mongolian parliament Z.Enkhbold Thursday received Mr Recep Tayyip Erdogan, the Prime Minister.
The Speaker underlined an importance of the official visit of the Turkish PM to Mongolia, which ran April this year, in widening of the bilateral traditional and friendly relations and expressed a willingness to strengthen these ties in all spheres.
He thanked Mr Erdogan for attaching an importance to the 300 million USD soft loan given for erecting apartments town in the UB city. He said Mongolia proposes widening the tourism collaboration, cooperating in establishing a historical, cultural and tourism center at historical sites of ancient Turks in Mongolian Orkhon valley, and in renovating the Kharkhorin airport, and requested the Turkish side to support these suggestions.
The Speaker also emphasized that a signing of the intergovernmental agreement on exempting people from visa requirements would boost a tourism cooperation and expand the business ties.
The Premier of Turkey Mr Erdogan said his country will realize the projects and measures such as giving the above soft loan and collaborating in renovating of the Kharkhorin airport.
After this meeting, the Speaker visited Ankara's districts where a re-planning is underway.
Ambassador to Israel presents credentials
Ulaanbaatar, October 11 /MONTSAME/ The Ambassador Extraordinary and Plenipotentiary of Mongolia to Israel Mr B.Altangerel presented the credentials to Mr Shimon Peres, the President of Israel on Thursday.
The latter congratulated Mr Altangerel on being appointed the Ambassador to Israel and expressed a satisfaction with broadening relations and cooperation between the two countries.
He stressed that Mongolia's foreign policies and economic growth may have significant impact on Asia's regional development. Israel is willing to collaborate with Mongolia in sciences and technology spheres, Mr Peres said and invited Mongolia's President Ts.Elbegdorj to visit Israel with a visit.
In response, Mr Altangerel conveyed the Mongolian leader's greeting to Mr Peres and re-affirmed that the Israeli President has been invited to Mongolia.
The Ambassador went on that he will pay great attention to the two countries' economic cooperation, especially to an increase in trade and investment spheres.
Our two countries have fruitfully co-implemented several projects, the Ambassador noted, and said the Mongolian side is willing to continue the collaboration, "for example, in way of studying Israel's experience in agriculture, nano- and bio-technology, irrigation, nature conservation, and information technology in order to introduce them to Mongolia, also we would like to prepare experts and to educate our students in Israel".
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Social, Environmental and Other
Mongolia's 'eco-Nazis' target foreign miners
Ulan Bator, October 10 (AFP) — A silver swastika hanging around his neck, Boldbaatar Gombodorj points out his targets on a map of Mongolia like a World War II commander: little flags representing foreign mining firms that he and fellow "eco-Nazis" accuse of destroying their country.
Mongolia's mining boom has brought the vast, sparsely populated country immense wealth but also inequality and ecological damage, and now fringe ultranationalist environmentalist movements are emerging in response.
Herders have roamed Mongolia's steppe for centuries, while the country only threw off the Soviet yoke after decades of domination, creating fertile ground for a mix of communal land rights and nationalism that can turn into unashamed racism.
"Here we want people with Mongolian hearts and Mongolian blood," says Gombodorj.
"Those who pollute the rivers and springs taint their purity, and they should be punished by death," he adds, citing the revered Mongol warrior Genghis Khan, whose portrait adorns the walls.
Gombodorj, a 56-year-old retired soldier whose first name means "hero forged from steel", sports a thick moustache and cauliflower ears from wrestling, the national sport.
He says the swastika is an ancient Mongol symbol and that his group, Fight for the Security of Mongolia, does not support fascism. But other campaigners openly identify themselves as neo-Nazis and reference the Third Reich.
When Gombodorj joined the army he knelt on the ground, held a Mongolian flag to his forehead and "swore to defend every inch of our land. And now it is being sold into the hands of foreigners", he says.
He is ready to embrace violence for his cause, he adds. A few weeks ago his group ended up in a tense standoff with armed guards at a South Korean-owned mine.
"We would have fired if they had," says Gombodorj.
Mining makes up a fifth of Mongolia's economy and it has enjoyed one of the world's highest growth rates since the authorities invited in foreign companies to extract its gold, copper, coal and iron ore.
One of the biggest and most high-profile projects, Anglo-Australian giant Rio Tinto's Oyu Tolgoi mine, is expected to produce an average of 430,000 tonnes of copper and 425,000 ounces of gold annually for 20 years, and generate up to one-third of the government's revenue.
But it has been embroiled in a series of disputes and Mongolia's foreign investment laws have since undergone a series of changes.
"The foreigners dictate what the relationships should be within Mongolian society and they dictate what laws should or should not be implemented," says Mongolia's best-known eco-warrior, Tsetsegee Munkhbayar, who heads the group Fire Nation.
In Tsagaan Khass, or "White Swastika", the most radical group of all, members greet their leader Ariunbold Altankhuum with a Nazi salute while clicking their heels.
They dress in black, while some sport swastika tattoos and others wear rings adorned with the Germanic Iron Cross.
In their office, tucked in the basement of a Soviet-era building in central Ulan Bator and overseen by a bust of Genghis Khan, Altankhuum told AFP the group was filling the role of local authorities who have failed to stand up to foreign firms.
Tsagaan Khass show up at sites unannounced to inspect licences, check on Mongolian workers' wages and ensure that the revenues benefit locals, he says, and if dissatisfied with what they find, they sometimes sabotage operations, confiscating keys or puncturing vehicles' tyres.
But, wearing a Gestapo-style black leather greatcoat, he insists: "We are not a gang of gangsters."
The mining firms "violate the rights of Mongolian citizens", he says. "They dig a hole and then leave behind terrible environmental damage."
The influence of such groups is difficult to gauge, with Tsagaan Khass claiming to have more than 3,000 supporters, and Gombodorj declining to say how many people belong to Fight for the Security of Mongolia.
Their hard-core approach has not gone mainstream, but Mongolians may become increasingly polarised if mining inequality persists, says Jargalsaikhan Damdadarjaa, a prominent economist, commentator and broadcaster.
"It is a matter of balancing environmental conditions and mining interests, and it is not always done properly. Rules and regulations are not enforced as good as the people want," he says.
"That brings this controversy amongst the population."
Munkhbayar, of Fire Nation, won the US-based Goldman Environmental Prize in 2007 for his work in shutting mines near the Ongi river, one of the country's largest.
But he has also spent time in jail and his group has resorted to force -- firing at equipment at a mine in the southern province of Ovorkhangai, and shooting arrows at a government building when leaders refused to meet them.
"These are necessary methods when other means have proved unsuccessful," Munkhbayar insists. "Over the past 20 years, more than 4,000 water sources have been identified as drying up and 1,300 have disappeared.
"The main reason is mining activity," he says. "When we go into the countryside, we are welcomed like saviours."
Mongolia's gender equality law largely in line with OSCE commitments, though certain aspects could benefit from review, says ODIHR opinion
October 2013 (OSCE) Mongolia's law on promoting gender equality largely complies with international human rights standards and OSCE commitments, but certain aspects of the legislation could benefit from further clarification and review, concludes a legal opinion prepared by the OSCE Office for Democratic Institutions and Human Rights (ODIHR).
The opinion, published on 8 October 2013, is the first review ODIHR has carried out of Mongolia's legislation since the country became the OSCE's 57th participating State in November 2012, taking upon itself all existing OSCE commitments, including those related to gender equality. The opinion was prepared in response to a request from the National Human Rights Commission of Mongolia.
The opinion notes positively the wide scope of the law that covers public and private spheres, and the special measures introduced by the legislation to foster gender balance in many aspects of daily life. Detailed provisions aimed at guaranteeing gender equality in employment and labour relations, education and culture, and health care were also viewed as positive.
At the same time, the opinion recommends clarifying certain articles of the law, including the definition of sexual harassment. It adds that the system of varying gender quotas in different parts and levels of the public sector should be re-considered to ensure that gender equality is promoted at all levels of public administration. The court and other procedures leading to sanctions for violations of the law should also be spelled out in a more specific way.
Mongolian domestic violence victim wins Asian Girl Rights Award
Taipei, Oct. 12 (CNA) An 18-year-old Mongolian girl was selected as the winner of the first Asian Girl Rights Award Saturday, an event established by the Garden of Hope Foundation to celebrate Taiwan's first Girls' Day, observed a day earlier.
Tserenbaljir Mandakh is the coordinator of a young mother's club at the Princess Center in Mongolia, who helps teenagers in her country face tough challenges such as marriage at a very young age, pregnancy out of wedlock and sexual violence and discrimination, the foundation said.
The Princess Center for the Protection of Girls and Young Women's Rights is a facility that supports vulnerable young women and girls, with an emphasis on social work services for teenage mothers, pregnant girls, victims of sexual abuse and adolescent girls and boys.
Tserenbaljir found herself pregnant at the age of 16. At the time, her parents couldn't forgive her for bringing the shame of unmarried pregnancy into their home. Moreover, she was a victim of domestic violence exercised by her boyfriend -- the father of her child -- according to the foundation.
Unwilling to yield, the Mongolian girl cut off her relations with her child's father with the assistance of social workers. After learning how to stand on her own, she began to help other young mothers suffering from problems similar to the ones she had, the foundation said.
At the award presentation ceremony in Taipei, Tserenbaljir said that in her country, many girls dare not ask for help when they find themselves pregnant. She added that she believes such girls can make wise choices as long as they have access to information and knowledge.
She also said she will encourage more girls in such dire circumstances to write to the government and urge it to provide them with protection and assistance.
Tserenbaljir is one of four nominees for the Asian Girl Rights Award. The other threes are Thansila Muyyarikkandy from India, Hoai Chu Thi Thu from Vietnam, and Taiwan's Chen Tsai-ling.
Muyyarikkandy is president of Wayanad Shishu Panchayat, a national movement aimed at educating people in India about democracy and children's rights.
Hoai, meanwhile, is a survivor of domestic violence and an advocate for the disadvantaged, while Chen is a member of a girl's theater troupe run by the Garden of Hope that performs dramas featuring the lives and experiences of local girls.
Taiwan marked its first Girls' Day by highlighting the country's success in achieving gender equality in education.
Taiwan established the day for the first time this year to protect and enhance the rights of girls and young women after the United Nations declared Oct. 11, 2012 as the first International Day of the Girl Child.
Pride on the steppe – being gay in Mongolia
October 11 (Star Observer) While the world's eye has turned on Russia's recent attacks on LGBT rights, its neighbour and former Soviet satellite state Mongolia just celebrated its first Pride Week. However, there is a still a long way to go before LGBT Mongolians can live open lives.
I sit down for coffee in downtown Ulaanbaatar, Mongolia's capital city of around 1.3 million, with Otgonbaatar Tsedendemberel. As we talk, a group of school girls sitting adjacent to us giggle. They have recognised Tsedendemberel, the first gay man to publicly 'come out' on a Mongolian talk-show in 2010.
Now executive director of the LGBT Centre Mongolia (the country's first Lesbian, Gay, Bisexual and Transgender [LGBT] rights organisation), Tsedendemberel, 33, is the most famous gay man in Mongolia – with only a handful brave enough to live open lives. He says he is lucky to have a supportive family, but many don't.
"It is very difficult. That's why there are only about five people who are openly LGBT in this country," Tsedendemberel says.
"Both at home, and at work, people are not as free as they want to be."
While homosexual sex is not illegal, LGBT Mongolians still live in grave fear of revealing their identity. A 2010 LGBT Centre report (released for the 45th session of the UN Committee against Torture) made the case that extreme discrimination of LGBT people in Mongolia was tantamount to outright persecution. The report detailed extreme violence, including verbal and physical assault, rape and gang rape, extreme beating, and domestic violence against young LGBT people.
It was, the report concluded, almost impossible for an out Mongolian to escape violence or abuse if they were open about their sexuality.
Similar human rights reports have also detailed the real threat posed by a militant underground network of ultra-nationalists who claim to hate LGBT people; and a police force unwilling to pursue those who target LGBT Mongolians. In The Lies of Liberty, a 2010 documentary film, a brave Mongolian transgender woman said she thought she had been left to die after she was brazenly kidnapped and brutally beaten by a violent gang. She and another transgender woman were walking the streets of Ulaanbaatar when they were grabbed and shoved in a car by nine men. They were then driven to a cemetery and ruthlessly attacked and sexually assaulted. The offenders have never been brought to justice.
Living in the shadows has also given rise to a new kind of predator. The LGBT Centre says it has seen a rise in anecdotal reports of 'money boys'.
"Basically [money boys] have a sexual relationship with a person, then after a certain period of time they will blackmail them and raise the amount," Tsedendemberel says.
"Nyamka" grew up in the copper mining city of Erdenet in Mongolia's northern Orkhon province and was 14 when he first realised he was gay.
"After this I could not go outside, especially in the summer time, I didn't go out," he said.
Instead he would stay in his room, often crying, and listen to pop divas like Whitney Houston. His family moved to Ulaanbaatar when he was 15 years old. He finally told his family he was gay at 17. It didn't go very well. He was forced to leave home that night. It was November when average temperatures in Mongolia drop below -25 degrees.
"They were very angry with me," Nyamka said.
"I only had a few clothes and I didn't know where I was going.
"I just had 3,350 tugriks ($A2.20) and I always remember that."
Thankfully, a friend let him stay in his room for a few weeks.
"I was very depressed. Everybody was angry with me. I had nothing."
Now 25, Nyamka works with the LGBT Centre and said his family have come to terms with his sexuality.
One of the few out lesbians in Mongolia, 22 year-old "Lucky" said she was 13 when she realised she was attracted to women. Attempts to reach out the LGBT community proved difficult, and it wasn't until she was in her second year of university she met a girl who introduced her to the LGBT community.
"We were in a relationship for two years and then she said she had to marry a guy and she did."
Lucky said she hasn't been faced with much opposition, however, one night a group of men overheard her and some friends talking about girls.
"They said 'fucking lesbians' and came over and started getting aggressive. We ran away."
Lucky and Nyamka say, without the support of the LGBT Centre, acceptance of LGBT people in Mongolia would be much worse. The existence of the organisation is in large part due to the work of Australian Robyn Garner who arrived in Mongolia in January 2004 to work in the development sector – she ended up staying seven years, working tirelessly with the LGBT community.
Garner remembers the shadowy early days of Mongolia's gay scene. It took her months to finally make contact with a website called Mongol Dyke, and eventually got in touch with site owner, Anaraa Nyamdorj.
"I had been involved with human rights activism [in Australia], and wanted to get in contact with the LGBT community," Garner said.
"At that point probably Anaraa, and one or two other people, were the only out people, seriously the only out people, we're talking in the whole country.
"So we'd meet up in these little bars and it'd be all dark. It felt so odd, because it was so difficult coming out and there just weren't out people anywhere."
Garner and Nyamdorj then joined forces to help build up the community, under the suspicious eye of authorities. Garner was told police were keeping a list of 'known homosexuals.'
"You'd throw a party and police would be surreptitiously videotaping and taking photographs of everyone who went in."
"They weren't in your face at that point, but they were there."
At this time, the fear in the community was pervasive.
"We'd go to the boys parties and there'd be all these closeted gay men in the dark; and no one would talk to each other and it was just a place to have sex basically.
"They were all very depressing, and the girls just didn't really socialize. So we decided we needed to do some community building."
At this time, Nyamdorj and Garner started documenting human rights abuses and, despite facing strong resistance, the pair founded the LGBT Centre in February 2007. Official registration of the NGO, however, was initially denied by the Mongolian Ministry of Justice and Home Affairs. The ministry refused to accept the application claiming the organisation needed to obtain a linguistic definition for the words 'lesbian', 'gay', 'bisexual' and 'transgender' from the Linguistics Institute of the Mongolian Academy of Sciences. It was the start of a three year battle against Mongolian authorities as the ministry continued to place roadblocks every time the organisation applied for NGO registration.
In June 2009 the State Registration Agency issued an official written refusal stating, "The name "Lesbian, gay, bisexual and transgender centre" has a meaning that conflicts with Mongolian customs and traditions and has the potential to set a wrong example for youth and adolescents". It was only a last ditch attempt when contact was made with the Mongolian President's advisor on human rights and civil participation the Centre was finally registered in November 2009.
The timing of the registration coincided with the United Nation's Universal Periodic Review (UPR) process. The newly formed LGBT Centre then set about working solidly to include LGBT issues in UPR report.
"It's no doubt the UPR was a turning point for us because it gave a leg in with the rest of civil society and for the first time it enabled us to integrate LGBT human rights in the mainstream human rights agenda," Garner said.
In 2010 the Centre produced a campaign video on LGBT rights which screened in Mongolia on three television stations for four months.
Garner said the campaign resulted in a flood of letters, emails and phone calls from people saying they now had some understanding of the plight of LGBT people.
"The saddest correspondence for me though is a guy who wrote an email to us and he said, 'My best friend came out to me and told me he was gay. And I called him the worst names and I said terrible, terrible things to him and I rejected him, and he committed suicide."
"And he said, I'm so sorry, I can't bring him back. I'm just so sorry for what I've done. I've seen the documentary and I now know how wrong I was."
Last week saw the first Pride Week ever to take place in Mongolia. The week focused on, among other things, addressing hate crimes committed against LGBT people and calling for amendments to be made to the criminal code to include a definition of hate crimes against LGBT people. The event – which featured a three-day film festival, multimedia exhibitions and sexual health workshops – mostly aimed to draw attention to the community which for the rest of the year remains a hidden one.
Interview with Disney Imagineer Joe Rohde on Snow Leopard Conservation Trip to Mongolia
September 17 (DIS) Disney Imagineer Joe Rohde talks about his efforts in Western Mongolia to raise awareness of the plight of the snow leopard. Follow Joes' adventures in mongolia on his twitter @Joe_Rohde.
976 Art Gallery auctions artwork of Disney VP Joe Rohde
October 12 (UB Post) Vice President of Walt Disney, Joe Rohde, will be visiting Mongolia. He works to protect snow leopard as well as work for the world famous entertainment company. He plans to sketch leopards spotted in Khovd and Bayn-Ulgii provinces. On Oct 13th, his drawings will be sold at 976 Gallery and all proceeds will be donated to Irbis Mongolia and other Snow Leopard Conservation organizations. This is his first trip to Mongolia. Unlike many of Rohde's adventures, this is not a business trip, but a personal mission.
Joe Rohde is a design executive with Walt Disney Imagineering, the branch of the company that designs and builds resorts and theme parks around the world. He is a veteran director with over 30 years of experience designing and building rides, attractions, theatrical venues and parks. While the Disney Company is famed for beloved animated films and for the fantasy environments of Disneyland and other parks, there is more to the company, and more to Joe's role within it. Joe's portfolio of work includes Disney's Animal Kingdom Theme Park at the Walt Disney World resort in Orlando Florida and Aulani: a Disney Resort and Spa at Koolina on the island of O'ahu in Hawai'i, and creative collaboration on Les Villages Natures, a French Eco- Resort project adjacent to Disneyland Paris. Joe's projects have always revolved around themes of wildlife conservation, indigenous peoples, and calls to action. Disney's Animal Kingdom actively solicits guests to become involved in wildlife conservation efforts locally and around the world. In addition the Disney Worldwide Conservation Fund has provided millions of dollars to programs globally in awards granted every year. Aulani, the Hawaiian resort, actively promotes indigenous Hawaiian culture as the chief subject of the guest experience. Rohde's background in theatrical design started at an early age with his family's involvement in the cinema and the theater. His mother was an actress and his father a cinematographer in Hollywood. Rohde learned to paint working on huge scenic backdrops and conceptual renderings for theatrical productions and for rides and attractions at the Disney Company.
The design of Disney's Animal Kingdom necessitated a series of research trips to Africa and Asia both to collect the design information necessary to construct the park, and to build conservation relationships with scientists in the field. In 2005 Rohde was part of a series of scientific expeditions conducted together with Conservation International, a Washington D. C. based organization, into the Himalayas, associated with an attraction he was building at Disney's Animal Kingdom, called Expedition Everest. The expedition, which was covered by the Discovery networks in a series of documentaries, resulted in the discovery of several new species. These research trips continue to this day and have resulted in a park of remarkable accuracy in its portrayal of human cultures and their relationship to the world of animals. This commitment to responsible content in entertainment design continues today. Rohde is currently collaborating with famed director, James Cameron on an Avatar-based land for Disney's Animal Kingdom.
This Mongolian trip is not simply a vacation. Rohde intends to travel in the Altai Mountains in Bayan-Ulgii and Khovd provinces, painting large landscape paintings in an effort to raise money and awareness for snow leopard conservation efforts in the area, carried out by Irbis Mongolia and The Snow Leopard Conservancy, an organization in California run by Dr. Rodney Jackson, a conservation colleague and friend. The trip is an official expedition of the Explorers Club of which Rohde is a member, and will fly the club flag over each campsite. "I once saw a snow leopard in the wild," says Rohde, "and from not very far away. I was able to appreciate the magic of such a mysterious creature's presence before it disappeared right before my eyes. I think a privilege like that brings with it a kind of obligation. It's a small price to pay to dedicate some work to the idea that these marvelous creatures might continue to exist."
Rohde has traveled and painted previously in the Nepal Himalayas, in regions such as Mustang and the upper Arun River Valley. One of his pieces hangs in the palace of the Raja of Mustang. But these Altai paintings will represent a greater challenge. "I wanted to stretch myself as an artist," says Rohde," and so I've sought to paint the largest paintings I believe I can complete in a single day and transport on the back of the camel. The result is likely to be rougher, more passionate, more wild than my Nepalese paintings which are quite representational and restrained. I want people to be able to feel the wildness of a land that still has an apex predator in it."
As to the question of why to do landscape paintings when the subject is snow leopards, Rohde replies, "There is no real difference between animals and land. Animals are not objects on the land. Animals are the part of the land itself that is alive, that moves, that sees, that feels, that has intention. When such animals are removed from the land, the land itself loses its spirit and its meaning and becomes something else, something less. My intention is not to go looking for snow leopards and paint them. The snow leopards are there. They are in the land. They make it what it is. Painting the land is painting the leopard."
In order to ensure that his paintings achieve this effect of wildness and immediacy, Rohde plans to avoid regular brushes as much as possible and instead to make most of his painting implements in the field from camel hair, from horsehair, feathers, from shrubs and grass, supplementing this with sponges, rags, and his own fingers.
"I'm not entirely sure what is going to happen here," says Rohde, "the art is as much of an adventure as the journey." Rohde hopes that his journey may inspire others as well, to find some way in their own lives to dedicate some action to the common earth we all share. "I'm not a famous artist. I'm just a citizen doing something I might do anyway, visit a country with beautiful scenery and paint pictures. But that effort can be directed towards a beneficial effect with very little additional effort." Not everyone would consider a month in a tent in the Altai Mountains to be very little effort.
LEOPARD IN THE LAND
Snow leopards should not disappear. We don't know what we do when we remove an animal from the land. What does the land become, without the spirit and actions of its highest predator? What unpredictable cascades of change follow the demise of the leopard? And what loss of meaning? Without the snow leopard, and the knitted systems of life that support it, what are the Altai Mountains but silent rocks?
Land expresses itself with life. At its innermost core, land is mineral; rocks formed at the dawn of our planets coalescence, or created by various processes since then, volcanic, metamorphic, and sedimentary. The rocks may be ground into powder, formed into dunes, plains, and eroded hoodoos, or they may still stand as buttes, tors, cliffs, and ridges. Somewhere within all this rocky dust is bacterial and fungal life, sufficient upon its decay to give foothold to simple plant life. These in turn give rise to more complex plant life, which inevitably offers fodder to some type of animal life, which then modifies the plant cover by consuming or spreading it, and so on. The modified landscape in turn affects the climate, increasing or decreasing rain and wind erosion which in turn grind rock into soil. This chain of transformation unites the inert silicate granules in the soil with the very weather that passes overhead, through the living bodies of animals. Animals are the part of the land that is alive and mobile, the part of the land that interacts. Through various modifications, digging, hunting, eating, destruction and construction, through the remains they leave behind, animals make the land what it is. The mineral, meteorological, botanical and zoological facets of any place on earth are really one thing, one life made of interwoven movements. Animals are to land what bubbles are to champagne. Without them, it's something else.
That is what animals are, not a resident of the place, but a quality of the place. The quality of movement. The quality of intelligence and intent. The quality of connection to other places through migration. The quality of emotion, of feeling alive, wanting to live, of living, and dying. Without life, land is not "land," but an alien space, something cold and terrifying.
That's why it's not okay to tear entire hunks out of the landscape, for profit or for glory, with no regard for the consquences. It's not just legally wrong, not just morally wrong, but perversely wrong…not right with the world. We should try to right what is wrong. Not all of us can be secret agents and investigative reporters, following the bloody tracks of the wildlife trade to the penthouses of East Asia, or be politicians enacting conservation laws with enough teeth to be enforcible, or be field workers developing a community's harmonious relationship with nature. We do what we can.
I'm an artist. So, I'll paint for the wild. This time, for snow leopards, because they still have a shot. According to data from the Snow Leopard Conservancy, there's a fair number of them in the Altai mountains of Mongolia, as opposed to the Altai mountains of the surrounding countries, where they became extractable resources. Sorry kids, but that means they were extracted, as in killed off. If that Mongolian population of snow leopards could be preserved, perhaps the depleted areas in the non-Mongolian Altai might one day be replenished, one day when it's safe for the elusive, tragic creatures to return. Until then, let's just keep'em alive.
I intend my paintings to feel complete; immediate, raw, gestural, and expressive, but complete. Only certain types of painting can be completed in six to eight hours. If I'm not careful, I could set up a visual style that I can't complete in the time allowed, then the paintings would all be obviously incomplete, interesting as a record of an experience in the wild, but not quite "art."
Even a plein air impressionist painting, like the ones I've created previously in the Himalayas, would be hard to complete on this Mongolian journey. These Mongolian paintings are bigger, the subject grander and broader, the weather more severe, the daylight hours more restricted. These factors are not limits to the art; rather, they are part of the art. The whole idea is to live the moment of the painting, to ride the circumstances, not to deny or fight them, to be a part of the landscape in all its severity, as I create the pieces that reflect it. The hand of the paintings is part of that relationship, a hand that can resolve its intentions in one day.
Learning to cope with disaster
Thai WSPA 0fficial helps Mongolian harders take steps to protect their livestock
October 12 (The Nation) After a natural disaster wiped out most of his herd in 2010, N Odkhvu had no choice but abandon his decadeslong livelihood and become a construction worker.
"If possible, I wish I can become a herder once more," he said longingly.
Nomadic pastoralists account for onethird of Mongolia's population. Odkhvu, 50, used to rank among them, raising his freely roaming animals on a vast and open expanse of grassland. The income was good enough for him and his wife to send their daughter to a university.
But that was before a "dzud" hit in 2010.
A dzud is a natural phenomenon arising from a summer drought, which brings snow blizzards combined with arctic cold resulting in insufficient grazing pastures, which often leads to the starvation and death of livestock on a massive scale.
After a dzud ravaged Mongolia in 2010, Odkhvu had just 50 heads left. He sold them all later to repay his family's debts, which largely stemmed from their decision to stock animal feed ahead of the imminent dzud.
Without animals, Odkhvu headed to Erdendalay town to work as a construction worker. His wife became a tailor and their daughter dropped out of school.
"This is not just me, everyone in this area is suffering the same," he said.
The 2010 dzud slaughtered about 15 million animals in Mongolia and their owners faced devastating consequences.
According to the World Society for the Protection of Animals (WSPA), livestock represent about 70 per cent of nomadic herders' assets. The psychological impact on herders has been huge with some resorting to suicide.
"Mongolian herders' lives depend very much on the animals they have raised. They won't leave a place if their animals can't go with them," said Supaporn Last, director of WSPA Thailand.
In March 2010, the WSPA and the Cambridge Mongolian Development Appeal (Camda) tried to help the herders by providing 130 tonnes of concentrated fodder, 20 tonnes of smashed wheat and veterinary drugs and multivitamins for free.
A team from the WSPA, accompanied by reporters, recently checked on the Mongolian herders current and former to see how they had fared three years after the serious natural disaster.
Ts ErdeneOchir, 61, remembered that several organisations offered assistance during the critical times.
Yet, despite the help, nearly half of his 700 animals died in 2010.
With a few hundred animals left, he still had enough assets to keep going as a herder.
"In three years, my herd is now even bigger than in 2010," he said.
Yo Batnasan, 32, said his herd escaped the 2010 dzud in time because his family decided to move north.
"I called a friend and got advice," he said.
Mongolian herders have usually large vehicles and ger, so they can move around.
"But just three out of 30 herder households we have interviewed could contact their friends living elsewhere by phone to check whether the situation in other areas was fine," said Naritsorn Pholperm, a veterinary officer for WSPA disaster operations Asia Pacific.
Cellular coverage was neither that good nor that comprehensive.
The dzud affected all the families it raged past. It was just that the extent of the impact was different on each family.
The recent trip to the herders was also intended to gather information that would be used to improve the delivery of care.
"We have to prepare for disasters that may recur," he said.
Naritsorn said two of 30 interviewed herder families stayed put when the dzud struck.
"They had made preparations for what was coming. They prepared shelters as well as food for their animals," he said.
D Hayanhyrvaa, 57, said he has stables for his animals and believes they can withstand a cold spell.
"I have food for them too," he said.
By the time the dzud ended in 2010, he found that his loss was very minor compared with others.
Supaporn believes Mongolian herders still lack modern equipment and rely heavily on traditional skills.
"They observe weather conditions with their naked eyes. They don't use satellite services," she said.
She hopes to work with government agencies there to help the Mongolians deal better with natural disasters.
L Sujirjin, 52, said he lost 600 of 800 animals to the 2010 dzud. But thanks to his savings, his family can maintain their livelihood as a herder.
"Keeping animals to pass through a dzud is not just my children's future but also Mongolia's future," his wife Saiutuya said.
Aware of livestock's importance to Mongolians, the WSPA is trying to support herders there in saving their animals and protecting their livelihoods.
The WSPA is also active in helping people engaged in livestock raising. Next month, it will sign an agreement with several Thai organisations including the Livestock Development Department and the Veterinary Practitioner Association of Thailand to draw up a disaster response plan for the rescue of animals and their owners.
The parties will meet twice a year."
The WPSA pointed out that when the big flood hit Thailand in 2011, efforts by various organisations were made but they were not well coordinated.
"With integration, help will become timelier and more resource efficient," Supaporn said.
During the past five years, the WSPA has trained 300 veterinarians in Thailand and recruited them into the Vet Volunteer Network.
"When a disaster strikes and animals are affected, these vets will be ready to respond," she added.
South Korean, Mongolian movies win awards for emerging talents as Busan film festival closes
SEOUL, South Korea, October 12 (AP) — Movies from South Korea and Mongolia have won $30,000 New Currents Awards for emerging filmmakers at Asia's largest film festival.
Busan International Film Festival organizers said Saturday that the festival's biggest prizes went to "Pascha" by South Korean director Ahn Seonkyoung and "Remote Control" by Mongolia's Sakhya Byamba. It's the first time a Mongolian movie entered and won the competition in the festival's 18 years.
The awards, given to first- or second-time Asian directors, show the festival's efforts to discover and support the region's new talents.
The organizers said "Pascha," an unusual love story between a 40-year-old woman and a 19-year-old man, won the jury's heart with its highly original expression. They said "Remote Control" neatly portrayed tensions between reality and fiction.
The jury, led by Iranian director Rakhshan Bani-Etemad, picked "Transit," Hannah Espia's drama about Filipino migrant workers in Israel, as a special mention.
The 10-day festival that ended Saturday drew more than 200,000 visitors for the second straight year, even as a rare October typhoon forced the organizers to reschedule some events and close outdoor booths by corporate sponsors four days before the festival drew to a close.
The fair closed Saturday evening with "The Dinner," South Korean director Kim Dong-hyun's independent feature.
The festival, which opened Oct. 3 with "Vara: A Blessing," a Bhutanese drama about classical South Indian dance, screened about 300 movies from all corners of the world.
Mongol Derby: World's Longest, Toughest Horse Race
October 8 (ABC) Part 1: Competitors test their physical and mental limits on the backs of wild horses in Mongolia.
Mongol Derby: Shocking Twist in Final Moments
October 8 (ABC) Part 2: Facing extreme weather, injuries and sickness, Mongol Derby competitors start to drop out.
Appalachian geology professors collect evidence of mass extinction that occurred in Central Asia
BOONE, October 8 (Appalachian State University) Members of a U.N.-sponsored research team with members from Appalachian State University's Department of Geology have found evidence for catastrophic oceanographic events associated with climate change and a mass extinction 375 million years ago that devastated tropical marine ecosystems.
"The Late Devonian mass extinction was one of the five largest mass extinction events in the history of life," said Professor Johnny Waters, who is a co-leader of the five-year, U.N. International Geoscience Programme project that began in 2011. The research team, which includes Assistant Professor Sarah Carmichael, is examining the relationship between climate change and changes in the ecosystems in the Devonian period, from 419 to 359 million years ago.
"This is the third most significant mass extinction and it was caused by plants," Waters said. "Unlike the dinosaur mass extinction, which was related to an asteroid impact, this one was environmentally related."
In the Devonian period, Waters explained, the world was experiencing super greenhouse climate conditions. This means that it was very warm, there probably were no ice caps, there was a lot carbon dioxide in the atmosphere (with estimates of 4,000 parts per million).
"As plant communities expanded onto land to form the first forests, they depleted the carbon dioxide (CO2) that was in the atmosphere," Waters said. "CO2 levels dropped to 400 ppm toward the end of the Devonian. It got colder. There were glaciation events and the rapid change in the climate caused severe extinction in the tropics and the existing coral reefs became extinct." By comparison, the world's current CO2 level is very close to 400 ppm.
Most of the knowledge that geologists have about this mass extinction comes from North America and Europe. Although these two land masses are far apart now, in the Devonian they were very close to each other. Scientists have tried to make inferences about worldwide events based on sample locations that are really quite limited in terms of their geographic history, or paleogeography. Therefore, it is vitally important to obtain samples from locations outside this region for understanding global climate change during this time period.
Waters' international team of geoscientists has conducted field work in remote areas of western China for many years, in addition to two recent field seasons in western Mongolia near the Russian and Chinese borders. The changing political climate in China, Russia and Mongolia in recent years has now made it possible to do fieldwork in these locations. The strength of these field collaborations is that they draw on the expertise of scientists from a variety of disciplines to add critical climatic information to a limited database. U.N. researchers associated with this project are also collecting related data in Thailand, Myanmar, Vietnam and Northern China.
"The reason we are working in central Asia is that there is a lot of good evidence of what happened at and after this mass extinction – this is an area that has not been well studied," Waters said. "It's all a part of our work finding the places that give us the best information in sorting out what happened in the extinction event and in its aftermath."
Answers about the earth's climate during and after this mass extinction are contained within rock samples from these new field sites, which were once part of the ocean floor, as geochemical signals preserved in the rocks record devastating climate change. The paleogeography of the field sites indicate that Devonian climate change not only had environmental impacts on life associated with large land masses, but also on life in the open ocean.
"We now have evidence that the radiation of surviving life following the mass extinction was centered in Central Asia," Waters said.
The geochemistry of the samples is being analyzed primarily by students in Appalachian's Department of Geology under Carmichael's supervision, with additional analyses being conducted at UNC-Chapel Hill and a university in Austria. "We are using geochemistry to tie it all together all across Central Asia, which used to be an open ocean, and compare our new data to established sequences in Europe and North America, in order to develop a global understanding of the climate change associated with this mass extinction," Waters said.
"Today we are looking at increases in carbon dioxide causing warming and the negative impacts to the ecosystem. In the Devonian period, we are looking at a rapid loss of carbon dioxide, which in geologic time occurred over millions of years rather than hundreds of years," Waters said. "But the lessons are actually quite similar. We clearly are concerned today about climate change and its impact on the environment and its effect on the ecosystem, and the geologic record is really the only record where we can see these events and compare what happened before and after."
Waters and Carmichael will present the preliminary results of their research at the Geological Society of America's Annual Meeting in Denver in October and at the American Geophysical Union's annual meeting in San Francisco in December.
Next summer, Waters will lead a 20-member team, including Dr. Sarah Carmichael and two students from Appalachian's Department of Geology, for continued field work in Mongolia.
Tulsa man runs 1,500 miles across Mongolia to help orphans
October 12 (Tulsa World) A Tulsa man has done what apparently no man has ever done before.
Brian Hunter ran across Mongolia nearly 1,500 miles, 30 miles a day, six days a week, for eight weeks.
That's 48 marathons-plus in 56 days.
Before he left, a doctor friend took him to lunch to try to convince him that what he was attempting was not possible, that he might keep up that pace for a few days, but that his body would not have time to recover, and he soon would be unable to run at all.
"Physically, every day was the hardest run of my life," said Hunter, a former youth pastor at The Church at Battle Creek who made the run to raise money and awareness for Mongolian orphans.
"I didn't know if I could keep going, but in the morning I would say, 'If I can stand up, I can walk, and if I can walk, I can run.' I just really kept it that simple.
"Every morning I felt like the tin man, so stiff and so very sore. It took me 20 minutes to get up and walk over to the food tent."
He ran from mid-July to mid-September.
Most of the route was across vast, uninhabited steppes, hundreds of miles from civilization, on a two-rut dirt road.
He encountered mountains, lakes and rivers, camels, herds of yak, sheep and goats, and swarms of flies and mosquitoes.
Every few days he would pass through a small settlement. The weather ranged from baking hot sun to wind, to driving rain.
During one stretch it rained for nine days straight, day and night. The terrain disappeared and became like a huge lake.
In the first few days of the trek, it appeared his doctor friend might be right.
"I was on maybe mile three of the day, and my mind got away from me," he said. "I starting thinking about mile 30, mile 600, mile 900. How can I ever do it? I almost quit. I had come to the end of my own strength.
"But I believed God called me to this task. ... So I exercised my faith. I took that one next step by faith, and the following step was by grace," he said.
"I believe that one step opened up a channel for (God) to pour his grace through.
"I learned a lot about faith," he said. "I learned about what it means to put faith into action, about his empowering grace, about how to discipline my mind to stay focused on the immediate task at hand, and let him worry about the miles yet to go."
In the end, Hunter completed his daily miles, one step at a time, and stayed on schedule. His only medical problem was a bad blister early in the run.
He was accompanied by two and sometimes three support vehicles, carrying his support crew and his family — wife, Lissa; son Kai, 8; and daughter Selah, 10.
Each day, Hunter would leave after breakfast while his family packed up the tent that was their home for two months.
They would catch up to him in the morning, give him a short break and then drive ahead a few miles. Toward evening they would stop to set up camp for that night.
Lissa said her two months of living on the road and sleeping in a tent without hot showers was easier than she expected.
"I didn't have all the other busy-ness of life — the soccer games, the cooking," she said. "It was simple compared to life here. It was delightful. My tasks were straightforward. The tent was my zone. I loved spending every day with my kids. We had a great time."
In the evening, the family rested in the tent and read the J.R.R. Tolkien book "The Lord of the Rings."
She said her husband "never complained, not once."
"That set the tone for the entire trip. No one else could complain if he wasn't complaining," Lissa said.
The children made friends quickly with youths in settlements along the way, despite the language barrier, and they rode a horse and learned how to milk and herd goats.
"They loved it," she said.
In mid-trip, the run took the family through Ulaanbaatar, the capital of Mongolia, where they visited the orphanage they were supporting, and went to the city dump to help feed the children who live there.
They wrote a blog about the experience and asked people to support a minister who was setting up a "ger," a kind of Mongolian teepee, next to the dump to provide a refuge and food for the children.
In one day, readers of the blog gave $5,000 to buy a piece of land and build a ger.
Hunter said the daily run gave him a lot of time to think about "our family's core values because I knew this trip would test those values" — family, purpose, discipline, faith, obedience.
Was it worth it?
"Absolutely, it was worth it," he said.
"We had people tell us that this trip would break your body, break your family, break your finances. We did it anyway, and we're stronger and healthier. My marriage is better than it's ever been. Our relationship with our kids is better than ever."
Hunter said he plans to do motivational, inspirational speaking about his trek, sharing life lessons he learned that apply not just to him, but to anyone facing life's challenges.
Football Complex Opens Here
Ulaanbaatar, October 10 /MONTSAME/ Mongolia's Football Federation is planning to open October 13 its mini-stadium with regular-sized football pitch.
It has been constructed under the "Goal-V" project of International Federation of Association Football (FIFA).
The project is now near the end with its last two steps of installing five thous. seats and paving an artificial turf pitch, jobs are done by "Greenfield" company from Netherlands and its Mongolian partner "Deren Naran" company.
At the opening of its new sports facilities, the Federation wants to run a super Cup match between 2013 UB league champion "Erchim" club and this year's "Borgio Cup" winner "Hangarid" club.
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Munkhdul Badral Bontoi
Founder & CEO
Email: mogi@covermongolia.mn
Mobile: +976 9999 6779
Skype: mogibb
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