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Thursday, May 29, 2014
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TRQ closed -2.36% to US$3.73 Wednesday
Oyu Tolgoi to Cut Staff Amid Market Challenges
By Michael Kohn
May 28 (Bloomberg) Rio Tinto Group (RIO) will cut jobs at its Oyu Tolgoi copper and gold mine in Mongolia following a review aimed at reducing costs.
The number of people to be fired is likely to be about 300, according to two people familiar with the job cuts, declining to be identified as the review is private. Oyu Tolgoi employed more than 7,000 Mongolian workers as of Dec. 31, or 95 percent of the staff at the project, according to the company's website.
"Workforce reductions are part of the life cycle of a mining business," Oyu Tolgoi LLC Chief Executive Officer Craig Kinnell said in an internal memo sent to staff today and obtained by Bloomberg News. It didn't say how many jobs would be cut. "Given where we are in the life cycle of our project, and the urgent need to reduce our costs, it is critical to the success of the business to address this now."
While Enkhtsetseg Samban, a spokeswoman for Oyu Tolgoi in Ulaanbaatar, confirmed job reductions are happening today, she declined to give the number of positions affected when contacted by phone.
The cuts come after an expansion at the project had already stalled due to a dispute over money. Rio Tinto and Mongolia's government have been in talks for more than a year on funding the underground expansion of the mine. When negotiations stalled last August Oyu Tolgoi laid off 1,700 workers and suspended construction of the mine shafts.
Copper Challenges
"Copper operations around the world are facing significant challenges with volatile markets and prices," Kinnell said in the memo to staff. "Oyu Tolgoi is no different."
The Oyu Tolgoi project is moving from post-commissioning to steady-state operations, Kinnell said in the memo.
"The mine is working perfectly but they don't need to involve more human resources because the first phase is finished," Erdenebulgan Oyun, Mongolia's vice minister for mining, said today. "It's a natural progression."
Rio controls Oyu Tolgoi through its Turquoise Hill Resources Ltd. (TRQ) unit, which has a 66 percent stake in Oyu Tolgoi LLC. The Mongolian government owns the other 34 percent.
Oyu Tolgoi achieved its first month of positive operating cash flow in March, Turquoise Hill said in a May 12 statement. Production at the mine is expected to be as much as 160,000 metric tons of copper in concentrates and as much as 700,000 ounces of gold in concentrates this year, it said.
Investment Slows
Fourteen of 15 global banks participating in the $4 billion project-finance package to fund the underground expansion agreed to extend their commitment letters to September 30, Turquoise Hill said in the May 12 statement.
Work on the underground mine is expected to commence once outstanding shareholder issues have been resolved, the funding plan has been agreed, a feasibility study has been completed and approved by shareholders and all necessary permits for the mine are obtained, Turquoise Hill said that day.
As Mongolia's biggest investment project, the funding delay has weighed on the economy and contributed to a drop in investment. Foreign direct investment fell 65.2 percent to $294 million in the first quarter from a year earlier and has slumped from $1.27 billion in the first quarter of 2012.
Oyu Tolgoi, which means Turquoise Hill, began commercial production of copper concentrate in July. After expansion it will be the world's third-largest copper mine, according to the Turquoise Hill website.
Rio Tinto to cut up to 300 jobs at Mongolia copper mine
By Terrence Edwards
May 28 (Reuters) - Rio Tinto Ltd plans to cut around 300 jobs at the Oyu Tolgoi copper and gold mine in Mongolia it operates to cut costs as copper prices remain weak, the global miner told staff on Wednesday.
The cuts amount to just under 5 percent of the workers at the mine, which started producing last year, and include full-time employees and contractors, said an Oyu Tolgoi employee, who declined to be named as the issue was sensitive.
"Given where we are now in the lifecycle of our project and the urgent need to reduce our costs, it is critical to the success of the business to address this now," Rio Tinto said in a memo to staff, dated May 28 and seen by Reuters.
Rio officials had no immediate comment on the memo when contacted by Reuters.
There were about 7,500 staff and contractors on the Oyu Tolgoi project as of the end of December 2013, most of whom were Mongolian, according to its website.
The company, which has targeted $1 billion worth of cost cuts from its global operations this year after slashing $2.3 billion last year, said it needed to rake in savings as copper prices are hovering just above four-year lows.
"Copper operations around the world are facing significant challenges with volatile markets and prices. Oyu Tolgoi is no different," said the memo to Oyu Tolgoi staff.
Oyu Tolgoi is 66 percent owned by Rio Tinto's Turquoise Hill Resources unit and 34 percent owned by the Mongolian government.
The latest layoffs follow the loss of around 1,700 jobs last year, when Rio Tinto stopped work on a $5 billion-plus expansion of the mine due to a long-running dispute with the Mongolian government over project financing and costs on the project.
Mongolia has become more conciliatory this year and the government and Rio Tinto have both said they expect issues to be resolved by September, the deadline that prospective lenders have put on their project financing commitments.
Turquoise Hill reported net revenue of $108 million from Oyu Tolgoi for the first quarter.
Mongolia's crucial copper mining project Oyu Tolgoi to lay off workers... again
Terrence Edwards in Ulaanbaatar, May 28, 2014 (bne) Mongolia's most economically important mining project, Rio Tinto's Oyu Tolgoi copper-gold mine, is suffering the second round of layoffs in two years. This time it's not because of the current dispute with the government over investment, but due to the tougher market conditions in its main customer of China.
Employees of Oyu Tolgoi learned of the layoffs this morning in an internal memo that has been seen by bne, which was dated May 28 and signed by the mine's CEO, Craig Kinnel. The mining operation, located in Mongolia's desolate Gobi desert and predicted to generate a third of the country's annual GDP at peak production, said it was downsizing as it looks to make cost savings amid a worsening market for copper. A source close to Oyu Tolgoi said the layoffs would be between 250 and 300 across the business, or less than 5% of the roughly 7,400 fulltime employees and contractors.
"Given where we are now in the lifecycle of our project, and the urgent need to reduce our costs, it is critical to the success of the business to address this now," reads the memo. "Copper operations around the world are facing significant challenges with volatile markets and prices. Oyu Tolgoi is no different."
The 51%-owned Rio subsidiary of Turquoise Hill, which owns 66% of Oyu Tolgoi, reported net revenue of $108m for the first quarter of 2014 - it began commercial production last July - and that its copper concentrate sales were finally outpacing production after months of delays by customs. Oyu Tolgoi's contribution allowed Mongolia's copper concentrate production to shoot up 92% in April from last year, with copper concentrate making up 32% of total exports for the month, according to data from Mongolia's central bank.
Today's layoffs do not look to be fallout from the ongoing conflict with the Mongolian government, Anglo-Australian miner Rio Tinto's joint venture partner in the mine. That was the case last year in August, however, when the miner laid off 1,700 employees. Mongolia since last year has been squabbling with Rio Tinto over a $4.2bn project financing package that's needed to expand the mine. Currently Oyu Tolgoi is solely an open-pit mining operation. The next stage will be to build underground tunnels that Rio says will grant access to 80% of the wealth at the deposit.
Mongolia, which owns 34% of the copper-gold mine, has become increasingly worried about escalating development costs because it cannot receive dividends until after the initial investments are recuperated. That income will be crucial for the country's finances as its first sovereign bond is due to mature in 2017.
Falling investment
But Mongolia has more pressing problems to consider, argue critics. Government data showed foreign investment had fallen 65% in the first quarter of this year compared with the the same period in 2013. According to Nick Cousyn, chief operating officer at local brokerage BDSec, sudden layoffs are no help when the economy is already putting strains on livelihoods. "These layoffs come at a time when the local economy is very weak - it won't be easy to find another job that pays as well as [Oyu Tolgoi]."
Worries over the economy have resulted in a shift in stance this year by the government on foreign invetsment in general, and the Oyu Tolgoi project in particular.
A letter from Mongolia's prime minister dated March 27 was leaked in April to the local publication Mongolia Mining Journal, in which Norovyn Altankhuyag indicated that Mongolia was ready to greenlight the project financing if it meant expansion work would recommence. "While the start of production of Oyu Tolgoi in 2013 was a great achievement and an important milestone, it is of the utmost importance for my Government and for Mongolian people that Oyu Tolgoi proceed as soon as possible with the underground mine development," the PM's letter read. "We are thus most supportive of the Project Financing needed for next stage of this most important project."
A government official familiar with the matter says discussions with Rio Tinto were "going well" and that work was being finalised on a feasibility study for the expansion project.
Cousyn and other observers agree that the Oyu Tolgoi financing package is every bit as critical to restoration of the economy as the prime minister's recently announced 100-day economic stimulus plan.
VKA trading -20.45% midday to 3.5c
Viking Mines extends takeover offer for Auminco Mines
May 29 (Proactive Investors) Viking Mines (ASX:VKA) has extended its bid to secure full control of unlisted coal development company Auminco Mines to 4 July 2014 from 6 June.
It has received acceptances for 97.08% of Auminco, which holds the 38.3 million tonne Berkh Uul project in Mongolia.
Viking has already received a significant endorsement with the securing of a future coal supply agreement with a Mongolian Government power authority for the Berkh Uul Bituminous Coal Project in northern Mongolia.
Berkh Uul hosts high quality, open pittable unwashed bituminous coal and is located next to a rail link that connects with Russian markets, and provides quick access to domestic power plants and industrial users at Darkhan and Ulaanbaatar.
Successful production at Berkh Uul would provide significant cash flows to develop the remainder of the combined group's portfolio as well seek out further production and near term production opportunities
Takeover Offer
Under the terms of the offer, which was launched earlier this year, accepting Auminco shareholders will receive 60.6 Viking Shares and 20.2 Viking Options for every 100 Auminco Shares held.
Auminco shareholders will emerge with a 47% stake in Viking, and play a major role in the evolution of Viking as a participant in the Mongolian thermal and coking coal markets.
Viking has not declared the offer free of defeating conditions.
FEO trading +8.33% to 6.5c midday
FeOre: Receipt of Second Payment for Sale of Mongolia Iron Ore Assets
May 29 -- Reference is made to the Company's announcement dated 22 January 2014 regarding the sale of Topone Star Investment Limited (the "22 January 2014 Announcement"), the update announcement dated 27 March 2014 (the "27 March 2014 Announcement"), the announcement regarding the condition precedents to the Transaction dated 5 May 2014 (the "5 May 2014 Announcement") and the announcement regarding the receipt of first payment dated 12 May 2014 (the "12 May 2014 Announcement"). All capitalised terms used in this announcement shall have the same meaning as described in the 22 January 2014 Announcement, the 27 March 2014 Announcement, the 5 May 2014 Announcement and the 12 May 2014 Announcement unless otherwise defined.
FeOre Limited (ASX: FEO) is pleased to advise that the Company has received the second payment in relation to the Transaction, and has transferred the total issued share capital of Topone Star Investments Limited to the Purchaser. The Company is in the process of preparing a buy-back offer document to be sent to all shareholders, which will include terms, conditions and timetable for the proposed buy-back of the Company's shares.
MSE News for May 28: Top 20 -0.23%, Turnover ₮21.8 Million
Ulaanbaatar, May 28 (MONTSAME) At the Stock Exchange trades held Wednesday, a total of 10 thousand and 568 shares of 14 JSCs were traded costing MNT 21 million 785 thousand and 769.26.
"Asia-Pacific Properties" /6,420 units/, "Remikon" /3,020 units/, "Tavantolgoi" /579 units/, "Gobi" /173 units/ and "Khovsgol" /140 units/ were the most actively traded in terms of trading volume, in terms of trading value--"Asia-Pacific Properties" (MNT 15 million 857 thousand and 400), "Tavantolgoi" (MNT two million 608 thousand and 157), "Gobi" (MNT one million 286 thousand and 335), "Talkh chikher" (MNT 870 thousand) and "Remikon" (MNT 459 thousand and 352).
The total market capitalization was set at MNT one trillion 534 billion 859 million 482 thousand and 312. The Index of Top-20 JSCs was 15,090.68, decreasing by MNT 34.72 or 0.23% against the previous day.
BoM MNT Rates: Wednesday, May 28 Close
| 5/28 | 5/27 | 5/26 | 5/23 | 5/22 |
USD | 1,821.46 | 1,825.34 | 1,821.39 | 1,825.14 | 1,826.09 |
EUR | 2,481.01 | 2,491.41 | 2,484.56 | 2,490.40 | 2,498.18 |
CNY | 291.01 | 292.18 | 292.02 | 292.59 | 292.90 |
GBP | 3,054.86 | 3,079.90 | 3,068.68 | 3,075.09 | 3,086.73 |
RUB | 52.79 | 53.24 | 53.45 | 53.25 | 53.22 |
May MNT Chart:
BoM issues ₮127.4 billion 1-week bills, total outstanding -6.3% to ₮668.9 billion
May 28 (Bank of Mongolia) BoM issues 1 week bills worth MNT 127.4 billion at a weighted interest rate of 10.5 percent per annum /For previous auctions click here/
GoM Treasury Auction: ₮30 Billion 12-Week Bills Sold at Discount, Average Yield 9.05%, with ₮73 Billion
May 28 (Bank of Mongolia) Regular auction for 12 weeks maturity Government Treasury bill was announced at face value of 30.0 billion MNT and each unit was worth 1 million MNT. Face value of 30.0 billion /out of 73.0 billion bid/ Government Treasury bill was sold to the banks at discounted price and with weighted average yield of 9.05%.
Please find expanded information from Table.
Information of Government securities auction | |
Announced amount /by MNT/ | 30,000,000,000 |
Received amount /by MNT | 73,000,000,000 |
Sold amount /by MNT/ | 30,000,000,000 |
Weighted average yield | 9.05% |
Maximum yield of fulfilled bids | 9.45% |
Minimum yield of fulfilled bids | 8.65% |
BoM: Bank Deposit Interest Rates, Fees as of April 2014
May 28 (Bank of Mongolia) --
Link to page (Mongolian only)
BoM: Bank Loan Interest Rates, Fees as of April 2014
May 28 (Bank of Mongolia) --
Link to page (Mongolian only)
Mongolia Plans to Buy $351m Stake in Copper Project
By Michael Kohn
May 28 (Bloomberg) -- Govt to buy 34% stake in Tsagaan Suvarga copper, molybdenum project, owned by Ulan Bator-based Mongolyn Alt LLC, according to press release issued at Ministry of Mining press conference.
* Tsagaan Suvarga is 560 kms southeast of Ulan Bator in Dornogov province
* Mongolia will sell bond to purchase stake, pending parliamentary approval, Erdenebulgan Oyun, vice minister for mining, said at conference. Erdenebulgan didn't give timeframe
(Bloomberg First Word)
Mongolian People's Party Delegates Conducts Official Visit to North Korea
May 28 (infomongolia.com) Upon the invitation of North Korea's Chairman of the Presidium of the Supreme People's Assembly Mr. Kim Yong-nam and its ruling Workers' Party of Korea (WPK), delegates from Mongolian People's Party (MPP) headed by the Secretary General of the Party, Mr. Jamiyan MUNKHBAT have conducted an official visit to Pyongyang, the Democratic People's Republic of Korea on May 18-24, 2014.
The MPP, formerly known as MPRP, and the WPK have been collaborating in terms of long lasting party-to-party ties and in order to bring the cooperation in a new stage, the MPP Secretary General J.Munkhbat and the WPK's Foreign Relations Department Secretary Mr. Kang Sok-ju have signed a Memorandum of Understanding on Cooperation.
During the visit, Chairman of the Presidium of the Supreme People's Assembly Kim Yong-nam welcomed the guests and held a meeting with MPP Secretary General J.Munkhbat, where parties exchanged views on further collaboration issues and two countries' development tendencies.
Also, Secretary General J.Munkhbat met with representatives of KWP Youth Organization and Korea Democratic Women's Union to seek opportunities of cooperation and exchange information.
Moreover, upon the invitation of Korea Democratic Women's Union, delegates led Chairwoman of Social Democracy - Mongolian Women's Association, Ts.Tsogzolmaa will be conducting an official visit to the DPRK in June 2014. Before, the Korea Democratic Women's Union delegation had visited Mongolia.
In recent years, the DPRK is implementing a policy of rapid development in particular focusing in the sector of animal husbandry and thereby the country is studying Mongolia's experience in this field.
During the visit, the issue of long-term renting the Unsan port by Mongolian side was discussed and parties exchanged opinions to seek opportunities.
Before heading to North Korea, MPP Secretary General J.Munkhbat received in his office the Ambassador Extraordinary and Plenipotentiary of the DPRK to Mongolia Mr. Hong Gyu at the Independence Palace on May 02, 2014. At the reception, parties discussed issues on deepening the cooperation between Mongolian People's Party and Workers' Party of Korea.
ABC Radio Talks With Lisa Gardner on Mongolia's Press Freedom
May 28 (774 ABC Melbourne) Correspondents' Club this week comes from Ulaanbaatar, Mongolia.
Australian Lisa Gardner moved there around 6 months ago to work as a journalist and media trainer.
Follow Lisa on Twitter - twitter.com/leesebkk
President Elbegdorj Appoints New Members to IAAC Public Council
May 28 (infomongolia.com) A ceremony to hand over a Presidential Decree on nominating new members of the Public Council under Independent Authority Against Corruption (IAAC) was held on May 28, 2014.
The Decree was conferred by Head of the Office of the President P.Tsagaan, where Advisor on Human Rights and Legal Policy to the President Ch.Unurbayar and Head of the Public Relations and Press Division of the President's Office P.Sainbileg have introduced newly promoted candidates.
The Public Council at IAAC is represented with 15 members and promoted by the President of Mongolia for the term of four years that aims to actively involve community in the fight against corruption, deliver their views and introduce anti-corruption legislations to public and with purpose to recommend on implementation of anti-corruption tasks, which is been operating since 2007.
Members of the Public Council at IAAC are:
1 B.Amar, Project Development Manager at Zorig Foundation
2. R.Batsaikhan, Director of "Nirun" Film Studio
3. N.Dorjdari, Revenue Watch Institute
4. M.Munkhbat, School of Law, National University of Mongolia
5. Kh.Naranjargal, Globe International NGO
6. S.Nasanjargal, "Channel 25" Television
7. B.Nyamdorj, "Udriin Medee" LLC
8. M.Oyunchimeg, Mongolian National Chamber of Commerce and Industry
9. L.Sumati, Sant Maral Foundation
10. L.Tur-Od, Transparency International Mongolia
11. N.Urantogtokh, Mongolian Academy of Political Education
12. M.Ulambadrakh, NTV Television
13. T.Khasbaatar, Association of National Environmental Cooperation
14. D.Tserenjav, Transparency Fund
15. P.Erdenejargal, Open Society Forum
OECD: Mongolia should persist with systematic anti-corruption reforms
27/05/2014 (OECD) Mongolia should persist with systematic reforms in its struggle against corruption, says a new report by the Istanbul Anti-Corruption Action Plan (IAP).
To further strengthen Mongolia's capacity to combat corruption, the report calls on the country to:
· Adopt as soon as possible a new national anti-corruption strategy and an action plan;
· Strengthen the capacity of the Independent Authority Against Corruption (IAAC), by guaranteeing its institutional, functional and financial independence;
· Align corruption incriminations with international standards, in particular the illicit enrichment offence that was recently introduced in Mongolia; establish effective liability of legal persons for corruption criminal offences and extend bribery offences to cover foreign public officials;
· Take legislative and practical measures to ensure professionalism and integrity in the public service;
· Ensure better guarantees of judicial independence by continuing judicial reform;
· Launch a practical and effective dialogue with the private sector to promote business integrity.
The report also highlights positive aspects of Mongolia's efforts to fight corruption. For instance, combatting corruption is recognised to be a high-priority issue in Mongolia and is mentioned in main political documents and statements of public officials. Mongolia has also established a strong anti-corruption institution and adopted a comprehensive access to information law with commendable provisions on proactive publication (although the law requires improvement with regard to other provisions).
The full report on Mongolia is available here (Russian version available).
The IAP is an initiative launched in 2003 to support anti-corruption reform efforts in Armenia, Azerbaijan, Georgia, Kazakhstan, the Kyrgyz Republic, Mongolia, Tajikistan, Ukraine and Uzbekistan, as part of the OECD Working Group on Bribery outreach work under its regional initiative Anti-Corruption Network for Eastern Europe and Central Asia.
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BCM Presentations
· B. Lakshmi, Director, Mongolia Economic Forum – "Why Mongolia Business Summit?" at the BCM Monthly meeting May 26, 2014
· Nick Cousyn, Co-chair, BCM Capital Markets Working Group – "Use of MSE for State Privatizations" at the BCM Monthly meeting May 26, 2014
· Peter Benson, VicRoads Team Leader, ADB Capacity Building Project – "Mongolia Roads – Achievements and Challenges" at the BCM Monthly meeting May 26, 2014
· China Metals & Mining Thermal Coal, Coking Coal, Copper, Gold, Steel by Macquarie Capital Securities Limited
· Mongolia – New Investment Laws, Stephen Tricks, Consultant, Clyde & Co at the 3rd Annual Mongolia Trade & Commodity Finance Conference, May 13, 2014
· Mongolia Investment Law: select issues, B. Enkhbat, Partner, MDS & KhanLex Law Firm, at the 3rd Annual Mongolia Trade & Commodity Finance Conference, May 13, 2014
· Mongolia's promise of mineral wealth, Arnout van Heukelem, Head of Metals & Mining Asia ING, at the 3rd Annual Mongolia Trade & Commodity Finance Conference, May 13, 2014
· Utilising international partnerships to extend access to trade finance, Marco Nindl, Trade Finance Banker, EBRD, at the 3rd Annual Mongolia Trade & Commodity Finance Conference, May 13, 2014
…
Mongolia Exports 8 Million Tons Coal in First Four Months
Ulaanbaatar, May 28 (MONTSAME) During this period, the nation exported 8.05 million ton of coal out of 35 million ton planned for this year.
The amount of the coal exported had been increasing year after year, as the export that weighed at 5.1 million ton in 2008 escalated to 20.5 million ton in 2012. However, the amount has been on a decline since the last year, and specialists reached a consensus on the importance of the quality of the coal exported rather than its quantity. As a part of this effort, the produced in Tavan tolgoi deposit coal has begun going through a washing process in a coal washing plant of "Energy Resources" before being exported to China. The washing plant with annual capacity of coal processing of 15 million ton washed 549 thousand ton of coal in the first four months of this year.
Mongolia is planning to reach a coal exporting ability of 50 million ton by 2020.
Mongolia Earns $89.8 Million from Gold Exports in First Four Months
Ulaanbaatar, May 28 (MONTSAME) The lower royalty for gold production has given its fruit, as the amount of gold sold to the Mongolbank in the first four months increased 26.8% against the same period of 2013 and two times against 2012.
The gold royalty was reduced from 5 percent to 2.5% in February of 2014 in order to make it comparable to those of neighboring countries–China (2%) and Russia (4%).
In the first four months of this year, gold producers sold a total of 1,797 kg of gold to the Central Bank of Mongolia (Mongolbank), says the National Statistical Commission. For the same period, Mongolia earned incomes of USD 89.8 million from gold export.
Mongolia Sees $1 Billion Investment From Doubling Area for Mines
By Michael Kohn
May 29 (Bloomberg) Mongolia is seeking to expand its area available to mining to a fifth of the country, and by the close of the decade to end its dependence on foreign oil, according to a senior government official.
The outlook hangs on the passage of laws governing mining and energy, Vice Minister for Mining Erdenebulgan Oyun said last week in an interview. Both could be signed off by parliament within a month, he said.
The mining plans alone could unlock $1 billion in developments this year, easing pressure on Mongolia's mineral-dependent economy. As recently as 2011, its growth was a world-beating 17.5 percent. That moderated to 11.7 percent last year, amid a collapse in foreign investment that has continued into 2014. The government last month embarked on a 100-day race to improve economic performance via dozens of measures to boost investment and cut imports.
Replacing Mongolia's 1991 Petroleum Law would expand investment opportunities to include different types of contracts between parties, and regulate new energy sources including the nation's nascent oil shale industry.
"The law is outdated and many industries are unregulated," said Erdenebulgan, speaking in Ulaanbaatar. The new law is based on the "best international petroleum laws from different countries."
Erdenebulgan said the mining law amendments would increase Mongolia's area available to mining and exploration to 20 percent from around 8 percent, by lifting a 2010 ban on new licenses. The period of exploration would also increase from nine years to 12 years.
New Investment
The restart of exploration could provide Mongolia with $1 billion in new investment this year, Erdenebulgan said, in an economy with a gross domestic product of $10.3 billion in 2012. Mining disputes, including a high profile spat with Rio Tinto Group over the Oyu Tolgoi copper and gold mine it shares with the government, have chilled foreign interest in the sector.
Extending the term to 12 years "would be an improvement and potentially a competitive advantage to attract investors back to Mongolia," said Sam Spring, president of Kincora Copper, a Vancouver-based miner with operations in Mongolia.
The amendments "get Mongolia back in the game" Spring said, with the caveat that more needs to be done to make the country competitive. Other than the 12-year extension "I haven't seen anything in the proposed changes which would help favorably differentiate Mongolia to other jurisdictions," he said.
Shale Bet
Mongolia's shale oil bet, meanwhile, drew Newark-based Genie Energy Ltd. (GNE) into signing a contract in 2013 to explore for deposits in central Mongolia. After five years, the deal can be converted to a production sharing contract, which would give the government a share of any projects, said Erdenebulgan.
The U.S. Energy Information Administration estimates Mongolia's technically recoverable shale oil resources at 3.4 billion barrels, of a total in the ground of about 85 billion barrels, according to a June 2013 report. Its shale oil and gas reserves are "limited but locally significant," the report said.
Based on its own surveys, the nation has the potential to be among the top ten oil shale producing countries worldwide, according to Khashchuluun Chuluundorj, chief executive of the Mongolia Shale Association.
The nation of 3 million's conventional oil sector is small, although annual output will increase in 2014 to around 7 million barrels of crude, said Erdenebulgan. By comparison, Mongolia's neighbor Russia is the world's top producer with 10.4 million barrels of oil a day.
Rosneft Contracts
Mongolia imported almost 1.2 million tons of diesel and gasoline in 2013, according to its National Statistical Office. Russia's Rosneft OAO (ROSN) last week signed three contracts to supply $2.3 billion in oil products over 5 years to Mongolian importers.
Mongolia can wean itself off foreign oil-product imports by 2020, and the government is planning to build its first refinery in southeast Mongolia to process domestic oil, said Erdenebulgan. (Mogi: guess the Darkhan Oil Refinery was killed)
The nation is far richer in coal, with 160 billion metric tons of reserves. It's exploring coal-to-gas or liquid projects, attracting investment interest from China Petroleum & Chemical Corp. (386), Asia's biggest refiner, and Posco, South Korea's biggest steelmaker, as well as domestic companies.
China Petroleum, known as Sinopec, signed an agreement in October to develop coal gasification plants in Mongolia. Erdenebulgan said that, while most of that gas would be exported to China, some would be used to help heat homes in the capital, where temperatures in winter plummet to minus 30 degrees Celsius. Most residents currently heat their homes with raw coal, a significant source of the air pollution that made Ulaanbaatar the world's second most polluted city, according to a 2011 report by the World Health Organization.
"Russia is a big exporter of gas products to China," said Erdenebulgan. "We also want to penetrate the Chinese market."
Khan Bank Awarded "The Most Active Issuing Bank" in Mongolia for Fourth Time by EBRD
May 27 (Khan Bank) London headquartered European Bank for Reconstruction and Development (EBRD) again awards Khan Bank as "the Most Active Issuing Bank" in Mongolia under its Trade Facilitation Programme (TFP) for the fourth time.
The Trade Facilitation Programme held its yearly award ceremony at the EBRD's Annual Meeting on May 16th in Warsaw, Poland to honor outperforming banks from 107 banks from 23 countries as the most active issuing and confirming. The winners were announced based on the number of guarantee transactions.
EBRD named Khan Bank as "the Most Active Bank" under the TFP in 2009, 2011, 2012 and 2013. This dynamic and proven success is a direct result of our customers' continued tight and trustworthy collaboration for years.
Khan Bank joined TFP in 2007 to provide its clients with support they need to increase their access to import and export trade. Since joining the TFP, Khan Bank increased its market share in trade finance business to 23%.
Through the programme, EBRD provides guarantees to international confirming banks, taking the political and commercial payment risk of international trade transactions undertaken by Khan Bank. It aims to promote foreign trade to, from and amongst the EBRD countries of operations and offers a range of products to facilitate trade, including consumer goods, commodities, machinery, power supply, cross-border engineering, construction, ship-building, technical and other services.
Khan Bank is committed in delivering variety of trade finance services, tailor made to specific nature of foreign trade transaction for every one of its customers by matching their trade cycle with financial needs while effectively managing foreign trade risks.
Moreover, the Bank focuses on introducing internationally recognized financial instruments into Mongolia's market, utilizing them efficiently and providing cheaper financing to its customers for their export and import needs.
Air service to be resumed between Kazakhstan and Mongolia
Astana, Kazakhstan, May 28 (Trend) The air service will be resumed between Kazakhstan and Mongolia, Kazakhstan's Transport and Communications Ministry said on May 28.
Kazakhstan's Air Astana airlines plans to open flights from Astana to Ulan Bator soon and the Bek Air airlines is expected to open regular flights on the Astana - Bayan-Ulgiy - Astana route this summer.
The Deputy Chairman of Kazakhstan's Civil Aviation Committee, Talgat Lastaev said that a memorandum of understanding signed between the two countries' aviation authorities contributed to opening the new flights.
The memorandum of understanding was signed during the 6th meeting of the Kazakhstan-Mongolia intergovernmental commission on trade, economic, scientific, technical and cultural cooperation.
"We have repeatedly discussed this issue with our colleagues. We initialed the text of the memorandum in early April and now we have signed it. It is pleasant that this initiative was supported by the Kazakh carriers and now the air service will simultaneously be created with several Mongolian cities," Lastaev said.
Mongolia's Hunnu Air e-Tickets Asian Routes with Abacus
May 28 (ASIATravelTips.com) Mongolia's second largest airline, Hunnu Air is contributing revenues of its own to the economy's booming 12% GDP growth with expanded routes and new digital services, promoted with the latest Abacu technology.
An Abacus e-ticketing capability will now streamline business and leisure bookings to build volumes from Hong Kong and Bangkok, as well as attracting new traffic onto its Hailar and Inner Mongolian routes.
Seasonal services to the fast moving feeder markets of Shanghai in June, Haneda (Tokyo) and Sanya (Hainan) this winter will also be made more accessible with Abacus distributing the content to travel agents at over 20,000 locations in the region.
Hunnu Air intends to use Abacus to promote charter flights from South Korea's popular Jeju into Mongolia's capital and hub, Ulaanbaatar soon.
Margad Byambajav, VP and CCO for Hunnu Air explained the strategy, "We are working with the region's technology leader Abacus to make it easier to arrange travel to Mongolia from Asia's main Hong Kong, Thai, Malaysian and Taiwanese feeder markets, as well as at home with our domestic network. We aim to encourage more corporate bookings and improve access to the country's many unique tourism experiences, leveraging our nomadic cultural heritage, especially through the summer peak with the July Naadam festival."
Hunnu Air (formerly Mongolian Airlines Group) is investing in new Airbus A330-200s in anticipation of the increased demand, enhancing its A319 fleet.
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European Investment Bank to Provide €50 Million Financing for Ger District Water Improvement
Ulaanbaatar, May 28 (MONTSAME) A working group led by S.Javkhlanbaatar, an acting head of the Investment Department of the Ministry of Economic Development, has held preliminary negotiations in Luxembourg with the European Investment Bank (EIB) for a general agreement of financing.
Earlier, this Ministry was authorized by the Premier to sign the general agreement for a programme on developing ger (national dwelling) areas and investments, having purposes to re-plan the ger areas with civil participation, to augment water resources, sewage plants and heating services, to support small-sized financing and to empower project implementing bodies.
This programme reflects a financing of EUR 50 million to be given from the EIB for improving the water resources of the ger areas and sewage plants.
The working groups includes S.Ochirbat, a deputy Mayor of Ulaanbaatar in charge of urban planning and investment affairs; D.Otgonbaatar, a head of the project and cooperation section of the city's administration; Ts.Ravdandash, an expert from the Ministry of Economic Development; and Ts.Bayarsaikhan, an expert.
Austrian Firms Offer Services for Ulaanbaatar Redevelopment Plans
Ulaanbaatar, May 28 (MONTSAME) Mayor of Ulaanbaatar city E.Bat-Uul Tuesday received a delegation of Austria headed by Ms Irene Giner-Reichl, the Ambassador of Austria to Mongolia.
The Mayor thanked the Ambassador and Austrian companies' delegates for proposing collaborating in a development of our capital city and presented them the 2030 Ulaanbaatar city Development Concept. "in its frames, many works are awaiting us, for example, providing 190 thousand families with apartments, repairing highways and auto roads, introducing metro and putting special-road buses to the public transport, creating new heat and electricity sources, erecting sewage plants, and producing energy by processing waste," he detailed.
The Ambassador noted the plan's importance. The Austrian companies offer leading services in the infrastructure sphere, "and we are going to collaborate with Ulaanbaatar in the construction and will raise a financing for its developmental great construction," she said, adding that Austria is one of the biggest investors for the European Bank for Reconstruction and Development (EBRD).
Delegates of some ten companies spoke about their activities engaged in banking, health, construction management, industrial training, facilities, energy, pipelines, concrete and garbage processing. They hope that Ulaanbaatar will give them a chance to cooperate in these areas.
The Mayor thanked the Austrian companies for the offers and expressed a willingness to cooperate with them in connecting ger (national dwelling) areas to engineering pipelines, producing energy from garbage, in implementing agricultural projects.
The Mayor will visit Vienna soon.
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Social, Environmental and Other
Wheat Sowing Stands at 80%
Ulaanbaatar, May 28 (MONTSAME) Nationwide, farmers have thus far sown wheat in 246.1 thousand ha land out of 304 thousand ha planned for this year, which means 80% of wheat sowing has been completed.
As May 27, barley and oat have been sown in similar extent of land–nearly 2,300 ha each. Seeding of vegetables are going on in full swing nationwide; farmers have planted vegetables in nearly half of the planned lands--potatoes in 7,267 ha, and other vegetables in 3,558 ha.
Wheat sowing is expected to end within May, while vegetable planting will continue until the end of this June. Nationwide, nearly 1,200 farmers are engaged in agronomy this year, with goals to harvest 426 thousand ton of wheat, 198 thousand ton of potatoes, 106 thousand ton of other vegetables and ten thousand ton of oil-bearing crops (flax).
Mongolia to Adopt New State Policy on Education
Ulaanbaatar, May 28 (MONTSAME) The parliamentary session discussed Tuesday a resolution on amendments to the State policy on education.
In this reworded draft, the educational development strategy defines the goal of pre-school education as development of children's creativity rather than preparing for schools. In a similar way, goals of educational periods of primary school, secondary school, high school and university are redefined in accordance with contemporary educational tendencies.
According to this new wording, the elementary education will give importance to mother language learning and information processing ability development of children, while secondary school education will highlight learning of life skills and sciences, as well as mastering in self-teaching.
The draft is expected to get passed by parliament on Thursday.
New Draft Law on Fighting Domestic Violence Submitted by Justice Minister
Ulaanbaatar, May 28 (MONTSAME) The Minister of Justice Kh.Temuujin MP Tuesday submitted to the Speaker a draft new wording of the law on combating family violence.
Passed in 2004 law on combating family violence did not have a clause on punishing those using violence in a family, for this was treated as a human right conflict. To deal with it, three Ministries--of Justice, of Health and of Social Welfare and Labor--approved some rules in 2007 in order to realize a national programme on preventing and combating family violence. In addition, the government set up some centers to protect and shelter victims of family violence and to give them advice through professional organization.
Despite all this, said the Minister Temuujin, a number of the family violence-related crimes is still high and takes a critical form. Main reasons of the problem are false regulations in the law and a neglecting of a matter on ensuring safety for the victims and their family members, he said. The new wording of the law has been formulated by a working group in accordance with present time requirements. It aims to protect the victims in the first turn, to prevent such violence and to upgrade the law based on a principle of the inter-sector collaboration.
The new wording also has been harmonized with other bills--on crimes, on conflicts, on law enforcement actions and on criminal procedure, which have been adopted or are being formulated in frames of the court reforms.
U.S. Neurosurgeon Performs Surgeries in Mongolia
Ulaanbaatar, May 28 (MONTSAME) In a line of "Virtue Foundation", international charitable organization, an instructor of neurosurgery at John Hopkins Hospital Mr Reza Yassari worked in the State Central Third Hospital May 21-24.
He successfully ran four surgeries on spine and cerebellum, together with specialized doctors of the Saint Barnabas Medical Center where he works as a chief of department of neurosurgery, and gave the hospital staffers a lecture on vertebral column problem.
The hospital and the "Virtue Foundation" agreed to expand cooperation in the neurosurgery field, particularly in spine surgery.
Famed Ikebana Artist Kazuko Fujii to Perform Art of Flower Arrangement in Ulaanbaatar
May 28 (infomongolia.com) Mongolian "Florever" Studio in collaboration with Japanese "Aucnet" company for the first time in Ulaanbaatar is organizing the Japanese art of flower arrangement, also known as Ikebana on May 30, 2014.
The event will be held between 01:00 pm and 06:00 pm at "Platinium Shopping Center" formerly known as Solongo Restaurant, where a famed teacher Ms. Kazuko Fujii will be attending upon the invitation and will be performing a ceremony "giving life to flowers" under melody depicting its traditional culture, origin and customs.
During the event, a flower exhibition of over 20 types brought from Japan will be also displayed and the highlight of the day is an auction of ikebana created by Kazuko Fujii Sensei herself.
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