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Monday, May 12, 2014
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MIBG: Mongolian Mining Stocks On Track to Shine in 2014
May (MIBG) MIBG's Economic Outlook for 2014 (Free Copy Here) predicted that mining would be the best performing sector in Mongolia this year. In particular, we saw foreign listed mining companies active in Mongolia as key out-performers. Based on a number of catalysts, we felt that resilient investors would be rewarded after a grueling two year bear market. In review of performance YTD we believe that this prediction is on track, and we maintain our bullish view that the mining sector will outperform all other areas of the economy this year.
MIBG's YTD review pulled together an equally weighted index and compared it against the TSX:V. Our index included pure Mongolian companies traded on the TSX and ASX. The Metals universe included Turquoise Hill Resources (TSX:TRQ), Haranga Resources (ASX:HAR), Erdene Resource Development (TSX:ERD), Kincora Copper (TSXV:KCC), and Xanadu Mining (ASX:XAM). We also looked at the Mongolian Coal universe, which included SouthGobi Resources (TSX:SGQ), Prophecy Coal (TSXV:PCY), Mongolian Mining Corp (HKE:975), and Mongolia Energy Corp (HKE:276).
Mining Sector Review - Foreign Listed Stocks YTD
The results were quite impressive, with Mongolian Metals companies returning on average 42% during the first 5 months of the year. And overall Mongolian mining companies providing a 10% average return to investors. The lagging area, not surprisingly, was the Mongolian Coal sector where producers have been facing weak demand in China and infrastructure challenges in Mongolia.
We expect to see continued support for Mongolian Metals companies heading into the second half of the year. This will be driven by strengthening appetites for private placements from the investment community and expanding exploration programs that will shadow those of 2012 and 2013. Increasing political and legislative support, including a 50% reduction in the Gold royalty, will provide the necessary foundation to attract investment back into the sector.
In addition to current support in the market we are most encouraged by the key catalysts that have yet to be realized, many of which are currently being discussed by Parliament and the necessary standing committees. Those catalysts that we feel will provide significant support for the sector are listed below.
Mongolian Mining Equities will gain further support when:
1. The Minerals Law amendments pass at Parliament and the issuance of exploration licenses are restored
2. The "106 Licenses" are returned back to its original owners
3. The OT Phase-2 funding gets the go ahead
4. Centerra's Gatsuurt production decision is finalized
5. Any significant geological discovery is made by one of Mongolia's juniors
MIBG: "106 Licenses" Take Center Stage, Solution Near
May 9 (MIBG) Late last year, MIBG rated the 106 License issue to be one of the key catalysts for Mongolian mining equities in 2014. It looks like that prediction will be realized very soon with the Petitioner's Standing Committee of the Mongolian Parliament discussing solutions for the 106 licenses this past Wednesday, May 7th. One popular domestic news outlet, www.news.mn, reported on the meeting stating that the standing committee was focused on finding solutions to the damages caused by the former director of the Mineral Resource Authority of Mongolia, Batkhuyag, who is currently serving a 4 year sentence on corruption charges.
According to news.mn, the damages that the Government of Mongolia is facing due to the cancelation of the 106 licenses is ₮28 billion MNT (approximately $15 million USD). The licenses were originally revoked as a result of the issuing process which did not involve the appropriate tender process by Mr. Batkhuyag in 2009 and 2010.
The standing committee did come to a conclusion that those licenses be re-tendered to the entities that held the licenses at the time of cancellation on a preferred basis. The tender offer is a necessary step as the Government of Mongolia is unable to simply issue licenses due to the current moratorium on issuing new exploration licenses.
We believe that the issue is a significant sign that the Government of Mongolia is looking to revive its mining and exploration sector, recognizing the potential to regain interest from foreign investors. We believe the issue will be resolved during this Spring Session of Parliament.
MIBG: Xanadu's Kharmagtai is Cashed Up
May 9 (MIBG) ASX listed Xanadu Mines (ASX:XAM) has had a busy 2014 so far. Following the signing of a definitive agreement to acquire 90% interest in the Kharmagtai project, the company successful completed an AU$1.47 million private placement. In combination with previous financing facilities this provides Xanadu with US$10 million to advance the project – including a US$4 million loan facility from the Noble Group and a US$4 million equity facility from Mongol Metals LLC (Xanadu's joint venture partner on the project).
The company has stated that these facilities will allow exploration to accelerate, reducing the time required to define a shallow high-grade JORC compliant copper and gold resource at Kharmagtai.
Kharmagtai is located in Omnogovi Province, in Southern Mongolia. It is within the same South Gobi copper region as Rio's Oyu Tolgoi, MAK's Tsagaan Suvarga, Kincora's Bronze Fox, and Xanadu's own Oyut Ulaan copper-gold exploration project. Needless to say, the region is ripe with copper exploration and has demonstrated its ability to deliver world class copper projects.
The Kharmagtai project consists of five key zones, including: Central Kharmagtai, Northeast Kharmagtai, West Chun, Chun, and Pigeon – all of which can be seen in the Regional Magnetic Survey below. The majority of the mineralized porphyry complex lies under unexplored shallow post-mineral sediments while the overall license area still remains relatively unexplored.
Kharmagtai License Area – Key Zones
In March, Xanadu released an independent report on Kharmagtai, arriving at a preferred valuation of US $15.0 to $29.0 million. This conclusion was supported by three historical resource estimates that have been undertaken at the project, providing justification for Xanadu's exploration target.
Xanadu has since started exploration works at site, including core re-logging, magnetic acquisition and alteration analysis. Based on previously released information the company is set to begin a drilling campaign this year.
MIBG believes that Xanadu's management has relieved the Kharmagtai project of one of the key risks facing exploration stage targets, financing. Through strategically positioning themselves alongside Noble and Mongol Metals Xanadu has secured medium term financing. Combined with cash raised through the recent private placement the company will be able to progress with necessary exploration works. This should be seen as a positive development for the company by investors, one that will likely make Xanadu a strong performer in 2014.
Denison Mines Corp. Reports First Quarter 2014 Results
TORONTO, ONTARIO--(Marketwired - May 8, 2014) - Denison Mines Corp. ("Denison" or the "Company") (TSX:DML)(NYSE MKT:DNN) today reported its results for the three months ended March 31, 2014. All amounts in this release are in U.S. dollars unless otherwise stated.
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Mineral Property Exploration
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In Mongolia, exploration expenditures on the Company's Gurvan Saihan joint venture ("GSJV") properties totaled $247,000 for the three months ended March 31, 2014, compared to $341,000 for the three months ended March 31, 2013. Expenditures in Mongolia during the first quarter of 2014 and 2013 relate primarily to annual license payments required to maintain the GSJV properties in good standing while the Company continues to explore strategic alternatives regarding its ownership interest in the GSJV. The Company currently has an 85% interest in the GSJV, with Mon-Atom LLC holding the remaining 15% interest.
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In Mongolia, the 2014 expenditures are estimated to total $1.0 million.
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MSE News for May 9: Top 20 -0.46%, Turnover ₮13.9 Million
Ulaanbaatar, May 9 /MONTSAME/ At the Stock Exchange trades held Friday, a total of 23 thousand and 783 shares of 16 JSCs were traded costing MNT 13 million 895 thousand and 149.00.
"Genco tour bureau" /18 thousand and 730 units/, "Remikon" /2,909 units/, "Hai Bi Oil" /504 units/, "Gutal" /500 units/ and "Shivee ovoo" /375 units/ were the most actively traded in terms of trading volume, in terms of trading value--"Gutal" (MNT five million and 545 thousand), "Shivee ovoo" (MNT two million 144 thousand and 100), "Genco tour bureau" (MNT one million 575 thousand and 760), "APU" (MNT one million 343 thousand and 070) and "Material impex" (MNT one million 087 thousand and 600).
The total market capitalization was set at MNT one trillion 588 billion 773 million 762 thousand and 509. The Index of Top-20 JSCs was 15,413.79, decreasing by MNT 86.88 or 0.56% against the previous day.
BDSec: A Quantitative Look at Mongolian Equities 2014
May 9 (BDSec) The economic challenges for the Mongolian economy worsened in 2013, as did the value of the majority of Mongolian assets. Foreign listed Mongolian equities, Mongolian Corporate and Sovereign Bonds all posted negative returns for the year. Even investors who chose to buy MNT denominated time deposits at local banks lost money, as their 13-15% interest rates were more than consumed by a 20%+ drop in the Mongolian Tugrik vs. the US Dollar and other major currencies.
While the MSE itself posted returns of -8% for 2013, we made the case last year that investors should take advantage of the negative sentiment and buy Mongolia's highest quality local stocks. Our primary tool in defining "quality" was to analyze their financial results and then screen them based on proprietary quantitative criteria, focused on growth and value investing disciplines. The results were impressive to say the least, as the 3 screens we ran (Growth, Value and Proprietary), produced average returns of 38.3% (MNT denominated) through January 29, as highlighted in our last note which can be accessed here. Even when adjusted for the steep drop in the Mongolian Tugrik, the collective performance of our quantitative approach yielded returns of nearly 20%, a vast outperformance versus any other public asset strategy. Several stocks we highlighted have appreciated 100%-300%.
As a preface to the results of 2013, the continued economic weakness weighed on the results of Mongolia's more cyclical companies, especially those heavily related to construction. In addition to uncertainty around Oyu Tolgoi, which persists to this day, investors had to contend with the Presidential Election in summer 2013, which further depressed economic activity. Since Presidential elections are a time of acute uncertainty and most construction takes place during summer, many builders deferred projects, resulting in a slow 2013 for companies leveraged to the construction supply chain. The end of the election cycle typically marks a cyclical low in the Mongolian economy, as a good deal of capital is consumed through campaign contributions during this process.
In addition to using these quantitative results in a stock selection process, investors should also focus heavily on the size and scope of the assets of a given company, which are generally quite undervalued when compared to its stated Book Value. A great many MSE listed companies have not revised their Book Value for 3-5 years, which makes a strong understanding of a company's assets essential to stock picking on the MSE. Real Estate, in particular, underpins the value of many companies, as available land is quite scarce and the population continues to grow in UB City. Extreme traffic conditions mean most businesses can't afford to establish operations outside of the city and gridlock will only increase in the future. Large, strategically located land holdings give investors long term optionality in participating in the inevitable process of Mongolia's ever changing skyline, as property is eventually put to its highest and best use.
It should be no surprise earnings came under pressure for a great many companies last year, given Foreign Direct Investment declined by 55%. Oyu Tolgoi laid off workers and tightened their budget considerably in 2013, after shutting down underground construction associated with Phase 2. As such, some MSE listed stocks may look somewhat "expensive" to the casual observer, given average P/E ratios for the companies we highlighted are around 19x 2013 EPS, a multiple which overstates overall valuations. While we highlight a great number of companies which are quite cheap and growing quickly, many others trade at much lower valuations when you focus on operating earnings, removing one-time charges.
Additionally, most companies don't depreciate capital expenditures and instead charge those investments against the bottom line of the year the investment was made. Investors should also take into account how sensitive a given company's financial results are to cyclical factors when looking at valuation. Historically, highly cyclical companies will trade at a high p/e during the trough of an economic cycle (which we think exists now) and a low p/e when near the peak.
The following are our Growth, Value and Proprietary screens for the full year 2013. We advocate investors take a long term approach to investing on the MSE, in order to generate maximum returns. We also recommend buying a broad basket of quality stocks, which can offer greater liquidity and reduce the risk of being leveraged to any one name.
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IN CONCLUSION
Despite the slowdown in the Mongolian economy, a great many MSE listed stocks are growing rapidly while trading at rock bottom valuations. Several others offer equally compelling value, which may be less apparent due to Mongolian IFRS accounting, or large, unrecognized assets. In either case, the intrinsic value of these companies remain quite high, both on a relative and absolute basis, especially in USD terms. In addition to valuation, investors should also consider both timing and liquidity when looking at MSE listed stocks. The average insider ownership of the above companies is nearly 85%, leaving very little in the way of a "practical free float" for investors to buy. Those who want exposure to these companies need to buy shares when they can, since liquidity typically disappears quickly when sentiment shifts. A good example of this was when the MSE Top 20 more than tripled in value in less than a year and a half, following the signing of the Oyu Tolgoi Investment Agreement in October 2011.
We think there's good reason to be optimistic about Mongolia's future economic prospects and MSE listed stocks in particular. The GOM's lengthy dispute over Oyu Tolgoi is likely to be concluded in September, as there's now broad political support for Phase 2 Project Financing. Parliament and the Prime Minister have proposed sweeping legislative support for Mining and Foreign Direct Investment, as part of a 100 day economic stimulus initiative. And Mongolia's relations with China have improved greatly, resulting in MOU's being signed surrounding large projects. The most significant of which are a $30B USD multi stage coal-gas project, a $5B USD toll road and a Special Economic Zone at the Chinese border.
A new Securities Law was passed in late 2013 which allow foreign custodians to operate in the local market, paving the way to Mutual Funds investing on the MSE. Mongolia is also under consideration to be added to both the MSCI and FTSE Frontier indices, which would compel some of the world's largest money managers to invest on the MSE, should Mongolia become part of their benchmarks. Last and certainly not least, the vast majority of MSE listed companies are in a very solid financial position and not in need of recapitalization. Whereas shareholders of most foreign listed Mongolian companies (especially mining) will encounter significant dilution and still endure several quarters of operating losses.
BoM MNT Rates: Friday, May 9 Close
| 5/9 | 5/8 | 5/7 | 5/6 | 5/5 | 5/2 |
USD | 1,808.90 | 1,806.72 | 1,801.97 | 1,800.05 | 1,798.29 | 1,796.01 |
EUR | 2,502.79 | 2,515.77 | 2,510.23 | 2,505.94 | 2,494.86 | 2,488.37 |
CNY | 290.49 | 290.08 | 289.09 | 289.00 | 287.94 | 286.93 |
GBP | 3,063.01 | 3,063.75 | 3,059.29 | 3,048.65 | 3,033.36 | 3,033.64 |
RUB | 51.50 | 51.66 | 50.75 | 50.57 | 50.18 | 50.25 |
May MNT Chart:
BoM issues ₮187.6 billion 1-week bills, total outstanding -13.1% to ₮0.97 trillion
May 9 (Bank of Mongolia) BoM issues 1 week bills worth MNT 187.6 billion at a weighted interest rate of 10.5 percent per annum /For previous auctions click here/
Mongolian Parliament Approves Altankhuyag's Stimulus Package
By Michael Kohn
May 9 (Bloomberg) -- Mongolia's parliament yesterday passed the government's economic stimulus package, according to the Parliament website.
v Package passed with approval of 76.2 percent of MPs in session
v Clause included in final draft instructs the government of Mongolia to "accelerate the development of the Oyu Tolgoi underground mine and provide government policy support for the implementation of the project"
v Prime Minister Altankhuyag Norov promotes bill as the "100 Days of Economic Acceleration"
(Bloomberg First Word)
Parliament Adopts Resolution to Intensify Economy
Ulaanbaatar, May 9 (MONTSAME) A plenary meeting of the parliamentary session on Thursday ran final discussion over a draft resolution of parliament on intensifying the economy, and then adopted it with 70.2% votes of MPs.
The resolution's main objectives are to reduce current expenses, to transmit into a regime for saving, to support small- and middle-sized productions and to decline budgetary deficit, said D.Zorigt MP, a leader of a working group which formulated the draft resolution. The resolution is expected to stabilize the legal environment for the mining sector, he added.
Moreover, the document is projected to contribute to reviving the Oyu Tolgoi and Tavantolgoi projects and taking the 2nd phase investment for the OT project, Zorigt MP said.
Governor of Central Bank N.Zoljargal: Economic difficulty and crisis are not the same
May 10 (business-mongolia.com) This is a translation by BM of an interview with the Governor of the Central Bank of Mongolia N.Zoljargal appeared on news.mn on 10th of May.
Official USD currency rate reached MNT1800 and currency exchange entities started selling MNT1800 per USD. Despite the statement by Bank of Mongolia to tame the USD local currency is still depreciating. What is your comment on this issue?
Spring is the main season where foreign currencies are used in trades and construction, thus increases the demand for USD which causes the appreciation of USD. After the second quarter of the year foreign currency inflow caused by sales of cashmere causes appreciation of MNT. As for this year, revenues from coal export have been low. Although the volume of export increased, the price is still very low. Also, there are difficulties we that some companies cannot receive the revenues despite their export (Erdenes TT). In addition we are taking measures to increase sale of gold. During the first quarter of 2014, the currency rate was MNT1770-1780 per dollar and had 1-2% fluctuation. Therefore, we see the current appreciation as a seasonal change in currency. Because the trade balance has been balanced this year for the first time in a decade. It was minus USD300-400 million in the past years. Thus, according to our forecast, there will be no further appreciation of USD except of course, for the seasonal and temporary fluctuations. Bank of Mongolia cannot satisfy the foreign currency demand, therefore, the resolution that is under discussion on how to overcome the economic difficulties and attract foreign investors and foreign currency flow is an important factor to ease the situation.
Is it really possible that MNT will not depreciate further?
Compared to 2009, there aren't any symptoms of economic crisis. Economic difficulties are not economic crisis, they are not the same thing. As I mentioned earlier, the SGK resolution on deciding what to cut and what to decrease is very important.
Can Bank of Mongolia guarantee that it will not increase the policy rate?
We are currently waiting for the SGK's decision on the resolution, then we will convene the meeting on policy rate. Policy rate change effects are visible in the economy after 6 months, you can also say that it the period where there will be some economic impacts due to change in policy rate. The SGK resolution touches on issues such as tax and non-tax related supports and relief. All of these would have positive impact on currency level. Unfortunately, the events in politics that has been happening for the past 3 months is contracting our possibilities. Political stability is a major factor to ensure market stability. In brief, I think that currency level will be stable this year.
Number of MPs insist on holding your responsible for price instability and currency volatility?
I cannot comment on the responsibility issues on my self. However, I think Economic Standing Committee, SGK and the Cabinet should talk openly about the currency hardships we are facing. From our side, we are delivering necessary informations to the public in a timely manner. There are many actions to be taken on increasing foreign currency inflows. Bank of Mongolia is sitting between two choices whether to increase tax supply which is harmful for the economy, and contraction policy which will slow our economy down. For the foreign currency, we can only perform intervention. As scheduled we will announce the intervention for this spring.
Number of economists are concerned that if we do not increase the foreign currency inflow, our GDP growth will decline?
Some part of our local currency is converted from foreign currencies came from outside. However, when the inflow scarce, it is hard to balance and manage it. Bank of Mongolia supplied currencies to balance it last year. Specifically, if we are lacking 6 trillion, 3 trillion would be far than enough. As for this year, we cut the whole MNT3 trillion. Therefore, we should concentrate more on foreign investments and increasing revenues of exports.
Number of people perceive the import replacing 888 project as merely a PR campaign. Do you think that commercial banks will lend to this projects?
Export supporting policy demands for weak local currency. There are no two policies on strong local currency, therefore from the policy prospective it is understood by both sides. We perceive MNT1800 per USD as a correct rate that balanced our trade. It is a rate that promotes export and weighs import. I hope that these projects would get funding. Commercial banks have received the proposals and looking at the viability of the projects in detail. The eligible projects would get funded.
There are talks about foreign banks entering the market, will this help the economy?
We haven't received any formal proposals from foreign banks. If we receive proposals, we must analyse the impacts and make a decision.
MINING MINISTER PROVIDES DETAILS ON HIGHLY ANTICIPATED AMENDMENT TO MINERALS LAW
Source: Udriin Sonin
May 8 (BCM) The Mining Ministry's proposed amendment to the 2006 Minerals Law will maintain the original law's intent to protect the environment, said Minister Davaajav Gankhuyag, while setting new provisions to better regulate the industry.
"The main principles of mining legislation hasn't been touched," said Gankhuyag, adding that the principle aim was to create a new framework to attract investment by creating more transparency and aligning Mongolia's regulations with that of other countries' rules. "The classification of mining resources will be provided according western standards, which will be more open and clear to investors," he said.
The government prohibited the issuance of new licenses and cancelled some existing licenses where protection was needed because of the proximity to headwaters and forests. The government's actions reduced the amount of licensed territory in Mongolia from 46 percent of the country to 7.6 percent and the amount of active licenses nearly in half to about 2,000, Gankhuyag said. The amendment would set a limit to the amount of licensed territory to 20 percent. Exploration will be permitted for 12 years as opposed to 9 years, as the government is taking into account the limited amount of time available for exploration before the harsh Mongolian winter sets in, which generally restricts the amount of activity possible to a bare minimum.
The amendment also holds miners accountable if a mine site is closed without any restoration while making explicit the responsibilities miners have to local communities, he said. "This amendment has a paragraph requesting a special worker who will report on reclamation work, mining closure actions and collaboration status with local community and local citizens."
The amendment also sets out to professionalize the artisanal mining profession, requiring them to register with cooperatives so that they will conform to Mongolian laws.
₮1.3 Trillion, ¥24.3 Billion Left from Chinggis, Samurai Bonds, Says CEO of DBM
May 7 (infomongolia.com) The regular "Let's Decide and Renew - 222" discussion, being held on every Tuesday on the second week on monthly basis, was held at the "Consensus" Hall of the Ministry of Foreign Affairs on May 06, 2014.
The discussion was focused on Projects to Replace Import Products and Increase Export, where authorities of Development Bank of Mongolia and commercial banks; representatives from professional associations and project initiators; and officials from affiliated Ministries and Agencies have participated.
The Government of Mongolia proclaimed 2014 as the Year of Industrialization under "Let's Create in Mongolia" and in the frameworks, it was announced to support projects that aim to replace import products and increase export, where Government pledged to allocate one trillion MNT (Tugrug) on these projects.
During the discussion, Prime Minister N.Altankhuyag urged to finance immediately some approved projects within this May and start shortly.
Civilians were anxious that Government is run out of money and all capital sourced from Chinggis bonds has been distributed and finished today. So, to answer on these misunderstandings, Mr. N.Munkhbat, CEO of Development Bank, notified that as of today, 1 trillion, 267 billion and 200 million MNT remain from the Chinggis bonds. Of which, 394 billion MNT will be financed for projects to replace import products.
Also, 181 billion is left from 269 billion MNT that were accounted into Golomt Bank with purpose to finance projects supporting agriculture and light industry being implemented by the Ministry of Industry and Agriculture. These funds are eligible to transfer for 888 projects finance.
Moreover, financial source equivalent to 24.3 billion Yen from Samurai bonds is in the Development Bank's account. All these money is enough to finance the 888 projects.
These 888 projects to be financed will be categorized in the following 5 groups:
- Fund willing to borrow is equivalent to 1/3 of total project costs and 2/3 can be self-financed for the project to implement;
- Fund willing to borrow is equivalent to 1/3 or more of total project costs;
- Projects facing with lack of collateral;
- Projects' estimation is not finished yet or incomplete projects;
- No feasible projects;
According to preliminary studies, from the total 888 projects, 579 projects that require up to 2 billion MNT are eligible to transfer to Small and Medium Enterprises Development Fund.
Also, some other incomplete projects will be supported by Mongolian National Chamber of Commerce and Industry and other local and international financial institutions to develop the projects.
MPP Caucus Takes Break on Dismissal Proposal of Justice Minister Temuujin
Ulaanbaatar, May 9 (MONTSAME) During a discussion of a proposed dismissal issue of Justice Minister Kh.Temuujin on Thursday, the parliamentary caucus of the People's Party took a break for next five days.
A parliamentary meeting on Thursday discussed a proposed dismissal of Justice Minister Kh.Temuujin behind closed doors. As issues regarding the dismissal of the Minister include matters related with the State secrets, the parliamentary meeting has been carried out in a closed mode with a participation of Prosecutor-General of Mongolia D.Dorligjav, Intelligence Agency Chief B.Ariunsan and Police General Authority Chief T.Bilegt to answer questions of MPs.
Last week, the Democratic Party Caucus took a break from a discussion of the issue at parliament, noting a need to clarify some infinitive matters about grounds of the dismissal proposal within the caucus.
Earlier, on April 7, O.Baasankhuu MP submitted a request of the dismissal of Justice Minister Kh.Temuujin on several alleged grounds including increased crimes nationwide since the latter took the current office. The Standing Committee on Justice began to discuss the issue on April 14 at a closed meeting to leave it for the next meeting on April 24.
Court Marshalls Forcedly Open Doors of Lenin Museum as MPP Refuses to Vacate
May 7 (infomongolia.com) At the Cabinet meeting held on January 12, 2013, Government Decree No.11 was issued to open Central Dinosaur Museum in Ulaanbaatar in the facility, where formerly V.I.Lenin Museum was operational until 1990s.
Shortly after, the facility administrating authorities of Mongolian People's Party (MPP) refused to vacate and appealed for court.
The first hearing claimed by State Property Committee against MPP was held at the Chingeltei District Court of Ulaanbaatar, and the District Court announced that the property shall be owned by state dated from June 13, 2013.
The next-level court hearing was held at the Capital City Court and the City remained the District-level decision by issuing a City Court Verification No.645 on August 09, 2013.
After, the MPP appealed for a higher-level or the Supreme Court of Mongolia, but was not successful as well and the Supreme Court issued an Ordinance No.689 on November 21, 2013 that cites the building formerly known Lenin Museum locates in the territory of the 5th Khoroo of Chingeltei District shall be owned and administered by the state, in addition, the MPP should vacate immediately.
The final decision was issued on behalf of the State Property Committee, therefore Ministry of Culture, Sports and Tourism was urging to renovate the purpose-built facility and open the Central Dinosaur Museum, because at that time there were no rooms for T-Bataar and other fossils repatriated, but MPP officials were refusing to vacate to date.
Afterwards, an MPP representative Sh.Radnaased requested to review the decision, but Chief Justice of the Supreme Court Ts.Zorigt dismissed the court case on March 11, 2014.
Today on May 07, 2014, General Authority for Implementing Court Decisions and the State Property Committee forcedly opened the doors of the building and announced the facility is under their authorization and will be operational as regulated.
Currently, the MPP did not state yet any comments or statements on ongoing facts.
Government-Sponsored Mortgage Rates to Be Fixed at 7% for Non-UB Apartments
May 11 (business-mongolia.com) Last year's cabinet resolution enabled a mortgage with annual rate of 8+1% for people who are buying apartments for the first time. It has been 11 months and out of MNT847.2 billion worth of requests MNT520.1 billion fulfilled as a replacing loan. Also MNT1 trillion mortgage has been newly issued making it overall 36,905 people to utilize the new rate. Yesterday, at the cabinet meeting, it was resolved that the mortgage rate would be fixed at 7% in mortgage policy guidelines. (Mogi: bad translation. Only for non-UB apartments)
De Facto: e-Mongolia
By Jargalsaikhan Dambadarjaa
May 11 (UB Post) A historic opportunity to achieve great development can be seized if countries like Mongolia, which have a small population but large territory, can truly utilize the cyberspace we have today. On the other hand, if Mongolians do not start taking advantage of modern communications technology, it will become harder for us to develop and catch up with other countries. We have no choice but to enter cyberspace, adapt our lives and work accordingly, and increase individual competitiveness.
Today, nations are creating e-societies, which allow people to vote in elections without leaving their home, access all kinds of reports, applications and information, and sign agreements and contracts through their cell phone. Furthermore, people are registering their newly established companies in a matter of minutes, checking financial and legal information on their phone, and selling their products and services on the internet in a secure way. Government organizations have started linking their databases together and providing online services to citizens. It is making bureaucracy fade away into the past.
Those countries that have successfully created an e-society established a decentralized, open information and communications infrastructure, with various interconnected databases available. As new industries and products are created over time, such communications infrastructure expands itself and becomes able to meet emerging needs and demands.
Estonia, a country building one of the world's most efficient e-societies, has successfully created an e-environment where the transparency and openness of public governance have been ensured, and the exchange of information between citizens, businesses and government is allowed in a highly secure cyberspace. Estonia's e-society allows its citizens to receive social services faster than ever and enjoy improved healthcare. It has significantly increased the average life expectancy of the nation. Their education sector has also seen positive changes and is acquiring more competitiveness internationally. Estonia has developed their technology universities into knowledge transfer centers with Ericsson and Samsung laboratories, and Mitsubishi electric car research facilities. As a result of such new projects and programs, Estonia is attracting the most skilled engineers and technology gurus in Northern Europe. Having an improved business environment and a knowledge economy, Estonia has been leading Europe in its socio-economic development for the last ten years.
Mongolians are nomads who naturally possess a sense of curiosity, which makes us always try to find out the reason why something is happening. We are also quick learners when it comes to foreign languages. Also, Mongolians can adapt to a new environment easily. If we compare the total number of Mongolians who are residing abroad to our local population, the percentage will be relatively higher than that of other countries. However, these factors are simply not sufficient to take full advantage of the cyberspace we find ourselves in today. What we need today is a good business environment that encourages innovation and new initiatives, and an information and communications technology (ICT) infrastructure supported by transparent government policy.
In the 2014 Global Information Technology Report released by the World Economic Forum, Mongolia was ranked 61st out of 144 countries, which was two places lower than the year before. The criteria of the ranking included dozens of factors such as internet access, download speed, adult education, use of mobile phones, and the number of investors in the information and communications industry. In the 2014 Global Information Technology Report, Finland, Singapore, and Sweden were ranked in the top three, and Hong Kong and South Korea were other Asian countries in the top ten. These countries were superior to others in many aspects including having a good business environment, advanced ICT infrastructure, and a more tech-savvy population. For example, Finland has one of the best education systems in the world, has become the hub of international e-initiatives, acquired the most number of ICT patents in proportion to its total population, and 90 percent of its households are connected to the internet (the figures are 85 percent in England, 70 percent in the United States, and 14 percent in Mongolia).
Mongolia was ranked 95th in importance of ICTs to government vision, 45th for its government online services index, and 103rd in its government's success in ICT promotion.
The transformation into an e-society allows economic growth and the creation of new jobs. Digitization is a term that describes the act of connecting smart databases based on ICT and converting data into digital formats. Booz and Company, which ranks countries on a scale from one to 100 using a digitization index, discovered that an increase of 10 percent in a country's digitization score creates a 0.75 percent growth in its GDP per capita, and reduces the unemployment rate by 1.02 percent. In this digitization index, Mongolia scored 35-50 out of 100, the range of points shared by transition economies. Establishment of an e-society (developing and implementing an e-Mongolia project) will be essential to reducing economic dependence on the mining industry, carrying out economic diversification, and building a knowledge economy.
About 27 percent of our total population is under 14 years old and 20 percent are 15-24 years old, which means that almost half of our population is young people under 25 years old who are learning and developing. One could say that most of our younger generation never knew how life was without the digital world, mobile phones, and the internet. If all Mongolians become bilingual by learning English, and are presented with a good opportunity to learn other languages along with advanced development of ICT, our country can achieve rapid development in a short amount of time.
In order to achieve that goal, our ICT infrastructure must be highly secure so that the confidentiality of personal, business, and government information is well protected. However, it does not mean that there should be restrictions on internet use due to security reasons. Every person must have the right to access the internet. Protection of personal information and internet freedom has become one of the biggest challenges that needs to be tackled by democratic countries to achieve development today. It was recently discussed by about 400 delegates from 64 countries at the Fourth Conference of the Freedom Online Coalition that took place in Tallinn, the capital of Estonia.
Mongolia was elected to chair the Freedom Online Coalition's next conference to be held in Ulaanbaatar next year. It is a clear indicator that Mongolia is a democratic country that protects internet freedom. It should be noted that, thanks to this coalition and conference, Mongolians now have a great opportunity to learn from and cooperate with the other member countries, and supporting companies such as Google, Yahoo, and Microsoft to create an e-society. Ban Ki-moon, the Secretary-General of the United Nations, and John Kerry, the United States Secretary of State gave speeches at the Tallinn Conference along with the President of Estonia, President of Georgia, Speaker of the National Assembly of Kenya, and foreign ministers of other member countries. The Tallinn recommendations for Freedom Online were approved at the conference and measures to be taken under the goal of "delivering free and secure internet to everyone" were agreed upon.
It is time for our government, civil society, private sector, and people to understand that creating an e-Mongolia is one of our foremost objectives, as well as our responsibility, for future generations. Therefore, we need to carefully develop and successfully implement an e-Mongolia project.
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1.5 Million People Request Cash Instead of Shares of Erdenes Tavan Tolgoi
Ulaanbaatar, May 9 (MONTSAME) Under a Government program to allocate national incomes earned from minerals operations, one million people want to own shares of the state-owned Erdenes Tavantolgoi mine company, while 1.5 million request to be granted cash instead, says a center aiming at rights protection of shareholders and investors.
The Government has earlier offered 1,072 shares of Erdenes Tavantolgoi to every Mongolian citizen, in pursuant with action plans of today's ruling authorities. However, some wanted to be given cash instead, and 300 thousand senior citizens and disabled people have thus far received 300 thousand togrog each as their shares in national incomes collected from mining activities in the nation.
Those who want to be given cash instead of the shares will be able to receive the money once shares of Erdenes Tavantolgoi get issued to international markets. "However, the value of the currency (cash money) is expected to be lower than that of today's, so we urge people to get the shares. We are ready to assist them with needed information and advice," says A.Altanshagai, a head of the center of rights protection of shareholders and investors.
MIAT Adds Brand New Boeing 737-800 to Its Fleet
May 7 (infomongolia.com) The National Flag Carrier - MIAT Mongolian Airlines JSC announced today that the company is to enlarge its capacity with a brand new Boeing 737-800 aircraft on a lease basis. The new aircraft is scheduled to land at Chinggis Khaan International Airport in Ulaanbaatar on May 11, 2014.
The Boeing 737 Next Generation of 800 series aircraft is constructed with 150 seats for economy class and 12 for business class and equipped with latest techniques and technology. Also, capable to make over 10 hours non-stop flight and the business class cabin is equipped with "Inflight Entertainment" service.
As of today, MIAT Airlines operates with two Boeing 737-800 and two Boeing 767-300 aircrafts and conducts regular direct flights from Ulaanbaatar to Beijing, Honk Kong, Seoul, Tokyo, Moscow and Berlin, moreover charter flights to Singapore, Hainan, Cheju, Nagoya, Oyakata and Fukuoka cities.
In frameworks to upgrade its park, MIAT purchased new Boeing 767-300ER in 2013 and intends to buy another two Boeing 737-800s by 2016.
PM Pledges Support for Domestic Manufacturers of Cell Phones
May 9 (infomongolia.com) On May 08, 2014, Prime Minister of Mongolia N.Altankhuyag and other Government officials received in their office representatives of four national companies conducting its activities in the development of cell phone software, operating system and production.
- Representing the IT Zone Company, operators said the company has been developing its Mogul brand smart phone features Android 4.1 (Jelly Bean) version with 4 inch display and will be available for 150,000 MNT. Similar imported phones being sold at least 300,000 MNT (Tugrug), they added.
- Emondo Company representatives introduced their project to produce a smart phone that would operate under most recent operating system-based software with pre-loaded Mongolian language apps. According to company's introduction, the mobile phone parts will be ordered from abroad under their developed system and domestically assembled, and after checking their operating system, they intend to supply in the market.
- Darkhan Jonon Company said, they plan to import used devices and after renewing here to sell 30% under market price with manufacturer's guarantee. This kind of business will be 100% independent from China companies, because most retailers here trade renewed devices from China.
- Migma Electronics Company announced they are ready to introduce four types of cell phones, and some are designed for children and elder users with big buttons and screens, besides to make an emergency calls up to five people.
Following the introductions, above company representatives asked the Government to support their smart phones with Mongolian operating systems, moreover to cooperate with mobile phone operators in Mongolia to support these devices.
In response, Premier N.Altankhuyag said that about 48 billion MNT flow is going outside for only mobile phone use and in order to slow down this outbound; Government will support our national manufacturer companies.
Rosneft to introduce lower pricing scheme for fuel imports for Mongolia
Source: Undesnii Shuudan
May 7 (BCM) Imports from Russian fuel producer Rosneft are expected to fall from USD 1,400 a ton to USD 900 as a new price setting agreement at the border is set to take effect.
The Petroleum Authority of Mongolia and fuel importers met with representatives of Rosneft and Rosneft-MMG to discuss the pricing last week. While Rosneft's prices currently are set by global market prices, one of many agreements signed by Rosneft's president during a March visit sets the price for fuel in line with prices in Singapore.
The agreement will reduce fuel price at the border from last year's pricing of USD 1,400 a ton to USD 900, said the Petroleum Authority.
Tuva Looks To Mongolia for Investment in a Post-Crimea World
May 8 (Registan.net) There are few places as obscure as the Russian Federation's Republic of Tuva. Nestled deep in south Siberia along the border with Mongolia, Tuva is the only region of Asian Russia where the indigenous titular nationality makes up the majority of the population. Isolated, impoverished, and underdeveloped, it is one of the least "Russian" places in Russia. Outside of the capital city, Kyzyl, many do not speak Russian, and interethnic hostilities have been an underlying tension in the republic since before the collapse of the Soviet Union.
In the early 2000s, while doing research for a book on Siberian identity and traditional spirituality, British journalist Anna Reid asked a Tuvan minority faction politician, Kadyr-ool Bicheldei, why Tuva was still ruled by Moscow when it had been a nominally independent nation between the two world wars. Bicheldei insisted independence was impossible for a tiny nation of only 300,000 people.
When Reid pressed on about the appeal of pan-Mongol unity (Tuvans speak a Turkic language, but are culturally similar to Mongolians and were once ruled by them), Bicheldei was equally categorical:
"A union with Mongolia to share poverty? Where's the sense in that?"
But times have changed. A mineral mining boom and close proximity to resource-hungry China have made Mongolia one of the fastest growing economies in the world, with GDP growth peaking at a staggering 17.5% in 2011, then dropping to a still impressive 12.4% in 2012, and 12.5% in 2013 (Mogi: 11.7% in 2013, looks like mistook 2013 inflation for GDP growth).
Mind-boggling economic growth certainly isn't a cause for celebration for all. Lower-income Mongolians have faced significant inflation, environmentalists are sounding the alarm about the side effects of mining, economists are worried about so-called dutch disease, and cultural changes brought about by rapid development and the increased presence of foreigners in the country have fueled nationalism and xenophobia. Additionally, few believe that these growth rates are sustainable indefinitely, and a dispute between the Mongolian government and the country's largest investor has dampened investor enthusiasm for Mongolia.
But, though Mongolia's path may not be smooth, there is clear change and increasing wealth in this traditionally agrarian country.
Even Bicheldei might feel differently about Mongolia today. And he wouldn't be the only one: In late March, the Russian-language news website Mangezeya reported that the Tuva Republic's representation office in Ulan-Bator is enticing Mongolian businesspeople into investing in Tuva. Mangezeya reports:
Business circles of the neighboring country [Mongolia] are showing great interest in realizing several investment projects on the territory of Tuva. In particular, the company "UTK Group," headed by Mr. Onorkhuyang, an ethnic Tuvan and the director of Mongolian-Tuvan Cooperation Society, is working out issues related to the construction of a brick factory with a yearly production capacity of up to 20 million units of brick in the republic [Tuva]. In order to implement the project, the Mongolians incorporated and registered the firm "Universal Technology Company" in Kyzyl.
The company "Monlans" is studying in great detail the possibility of opening a processing plant for hides and furs in the republic using local materials. Mongolian businesspeople are also attracted by plans for the development of granite deposits on the territory of Tuva.
A few additional facts are also relevant: first, Tuva's representation office was opened approximately a year ago, suggesting that Mongolia's rapid development attracted Tuva's attention. Second, according to the Tuvan Republic's official site, negotiations about the projects were carried out with the participation of the Tuvan government, which has agreed to provide the land for the brick factory and connect the factory to the electrical grid. Finally, in the longer term, the businessmen of the Mongolian-Tuvan Cooperation Society are considering taking part in joint social projects in Tuva.
Obviously, these investment projects are far from high tech by 21st Century standards, and the interest is not just economic, but also cultural, geographic, and potentially political. Still, they represent a fundamental shift in regional fortunes. Once a similarly ragged next-door neighbor, Mongolia is developing at a remarkable rate. Meanwhile, Tuva has remained isolated and impoverished backwater, with a project to connect it to the rest of Russia by rail stalled seemingly indefinitely.
So why is this story important? First, on a more obvious level, it highlights the degree to which development in Russia is uneven, with many regions in Siberia and the Far East lagging far behind cities like Moscow, St. Petersburg, Kazan, Novosibirsk, etc. Second, it emphasizes the way in which economic development is changing the dynamics in Eurasia. If Mongolia can invest in a brick factory and a fur processing plant, what could China do? Much of Siberia and the Far East borders the most economically dynamic region of the world and Siberians can look next door and see the changes happening in China. Ultimately, China is a natural and necessary partner for Russia in developing its massive Asian territory, but one that provokes fear among Russian elites.
Finally, recent events in the post-Soviet sphere have set a dangerous precedent. Russia's annexation of Crimea struck a clear blow against the post-World War II international order. It also set the Russia-watcher community a-titter with speculation that the Crimean referendum that preceded the annexation could provoke similar demands for referendums on autonomy in Russia's minority regions. Certainly a small group of ethnic Nanai from Russia's Khabarovsk region seized on Crimea as an opportunity to call on the authorities to protect their language and culture so they would no longer feel like "wandering gypsies" in their homeland. And a handful of protestors in Buryatia came out in support of Ukraine, with one calling Ukraine "an example and hope for Buryatia to also obtain its freedom and independence." But true separatism seems unlikely. Regional titular nationalities (Buryats in Buryatia, Altai in the Altai Republic, etc.) seldom make up anywhere near a clear majority of the population in their homelands and many have been heavily Russified.
So the Crimean annexation probably won't make waves among Russia's minorities, but it could very well make ripples, causing local indigenous ethnic groups to reevaluate their position in the region and, perhaps, somehow begin to renegotiate relations or advocate for greater language rights and cultural preservation.
In this process, Tuva may be an important place to watch. With its heavily ethnic Tuvan population and regional isolation, it is both culturally and geographically far from much of the rest of Russia—and it may be getting farther. According to Valeria Kan, a Tuvan expert on ethnic conflict, the republic is "actively losing its cultural and ethno-linguistic diversity" as Russians and other non-Tuvan ethnic groups leave in search of better economic possibilities and larger communities of their co-ethnics. Research in 2008 showed that, contrary to the situation in many other minority republics of the Russian Federation, the Russian language was in a "catastrophic condition" in Tuva. The local authorities even had to take measures to buttress the language's position, including declaring 2014 the "Year of Russian Language" and strengthening the teaching of Russian in rural areas. Despite these efforts, a general trend it visible: Tuva is growing more Tuvan.
Meanwhile, Russia appears to be getting more Russian. Vladimir Putin increasingly positions himself as the defender of conservative values, and the official role of Orthodox Christianity in society is growing. Meanwhile, Russia's actions in Crimea and Ukraine emphasize the idea of a "greater Russia" made up of ethnic Russians and Russian-speakers abroad. Much interpretation of Putin's March 18th speech on the annexation of Crimea in the Russian Duma has focused on nationalism, particularly Putin's usage of the word "russkiy/russkaya," which emphasizes Russian ethnicity, to describe Crimea and the city of Sevastopol. Taken together, this all suggests a shift toward a much more ethnicity-based conception of Russia.
In such an environment, which may alienate minority ethnic groups, regional investment like Mongolia's factory projects in Tuva could be very important. If Tuvans come to feel isolated in Russia, Mongolia may look like a much closer and friendlier partner than Moscow. Investment, with its ability to create jobs in a poor region, would only make this partnership more appealing. With time, that could mean a growing number of people with an economic and social orientation toward Mongolia. That wouldn't necessarily lead to widespread separatism in the near future, and it isn't necessarily destructive to the Russian state. But it would mean change and a new kind of regionalism in Tuva.
And if Tuvans aren't the only ones who feel this way—say Tatars increasingly look to Turkey or the Republic of Karelia to Finland—then Russia could be in for some very big changes.
BCM Monthly Meeting Recap, April 2014
May 9 (BCM) The BCM meeting on 28 April was held for the first time at Best Western Tuushin Premier Hotel with Bayanjargal Byambasaikhan in the chair and attended by 120 members and invited guests. Executive Director Jim Dwyer introduced BCM's new vice director, Amarjargal Bayarmaa. Bayarmaa currently works with BCM as chairperson of the Environmental Working Group. She leaves her position as senior carbon finance specialist for Clean Energy LLC.
Dwyer and Byambasaikhan also announced the recently announced Business Summit to be held in Ulaanbaatar in June.
"The target is to have 150 CEOs of the top Mongolian companies," said Dwyer. "Obviously government can explain, hopefully, the amendment to the minerals Law and the removed restrictions on exploration licenses, and other initiatives we expect to be taken place in the short term."
The event is being organized by the same team behind the Mongolian Economic Forum, the Economic Policy and Competitiveness Research Center (EPCRC).
The following new BCM members were introduced:
1. The newly opened Best Western Premier Tuushin Hotel offers a wide variety of luxury accommodation, extensive state of the art conference and banqueting facilities and three high quality restaurants providing a wide range of fine dining options, with menus and wines from around the world especially prepared for you by our internationally qualified chefs and sommeliers.
The 25-story, 200-room Best Western Premier Tuushin Hotel is a impressive landmark in the center of Ulaanbaatar due to its modern design and excellent location close to the Government Palace, government offices, shopping areas and com¬mercial institutions.
2. Cummins Mongolia Investment LLC, established in 2011, is an exclusive distributor for Cummins Inc., the world's largest independent manufacturer of diesel engines and a global leader in power generation technology. Cummins takes pride providing sales and exceptional service and support for Cummins engines, Cummins generators, Cummins Filtration products and related products serving the varied needs of our customers in Mongolia, such as mining, oil and gas, power generation, agriculture plus on and off road vehicles.
3. Forbes Mongolia is published under a licensing agreement between Forbes Media LLC and MGL Capital LLC. The Mongolian edition will be the 33rd local language edition with monthly publication and Forbes Mongolia will have access to Forbes stories from around the world.
Forbes Mongolia's editorial team will also feature local content on chief executives, tycoons, philanthropists, investors and aspiring entrepreneurs who are making a difference in the country's economic landscape and society.
4. International Mining Consulting (IMC) LLC, established in 2013, is an independent national company that offers following services: geotechnical engineering, mine engineering; project management , contract mining , pre-feasibility studies , training, and consultancy
5. Lewis Marks has lived in Tokyo, Beijing, and Ulaanbaatar since 1977, 1982, 1992, respectively and conjointly. Marks is licensed to practice law in New York, a board member of CBH Resources, Australia (zinc/lead mines) since 2002 , a board member of LIM Japan Fund since 2003 , a founding partner of MIC Global Partners LLC (commodities investment, oil exploration + production in North America) since 2003, a director and equity partner in CWT Mongolia (copper/oil) , an equity partner in Bayandari Co. (farming in Selenge and Zavkhan) , and a partner in Rich Resources, Beijing (commodities).
6. Melbury Capital is a private equity vehicle seeded by the Reuben Brothers and a select group of family offices. The fund achieves superior returns through tailored, country specific investment strategies in frontier markets. The Mongolia office is currently developing assets in the mineral extraction space. Melbury is currently looking to acquire Mongolian assets in the gold sector and is also seeking to expand deal flow in other sectors.
Environmental Working Group Chair Bayarmaa Amarjargal gave the first presentation of the evening on BCM's "Green Office Initiative." BCM has partnered with the Ministry of Environment and Green Development to introduce to Mongolia's offices internal, self-operated systems for waste collection and proper disposal.
"The mission is to take a multi-stakeholder approach toward sustainable practices in Mongolia," said Bayarmaa.
Mongolia's solid waste increases by 500,000 a year in Ulaanbaatar, she said. As proper disposal becomes an increasingly important issue, BCM's Environmental Working Group is working with public and private offices, such as the Asia Foundation and numerous restaurants to arrange for waste collection. To further promote this objective, NTV has agreed to play a 30-minute promotion every two weeks informing the public about the initiative.
Sant Maral Foundation Director Luvsandendev Sumati presented next on the latest Politbarometer, released in March.
"I was expecting some bad news for government but we didn't see that here," said Sumati, noting that the government was not heavily criticized despite the declining economic conditions in the country. "This situation is not like the spring weather—not volatile. Actually it's extremely predictable."
The survey found that dissatisfaction with the business environment was still high at 48.5 percent, but below that of the previous year's 52.7 percent. Government approval, too, was high at 40 percent, but less so than that of Sukhbaatar Batbold's government. People reported that instances where households had gone hungry was less than that of previous years, but complaints of income distribution were still high. Citizens' faith was largely in favor of the government to maintain fair distribution of wealth.
"Our population does not trust private business," said Sumati. He added that this sentiment would remain as long as the government could afford to subsidize the livelihood of Mongolians.
The final presentation of the evening came from J. Sunjidmaa, corporate and public affairs manager of Peabody Energy Corp., to discuss Peabody's "Advanced Energy for Life" global advocacy campaign. "We see that energy poverty is the number-one crisis. It brings people down—and society," said Sunjidmaa.
The goal of the campaign was to increase access to low-cost energy while reducing emissions, she said. The 21st Century coal, she said, is managed to be socially and environmentally friendly.
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UB Electricity Distribution Company Collects ₮13.9 Billion in April, 24% More Than in 2013
Ulaanbaatar, May 7 (MONTSAME) The Ulaanbaatar Electricity Distribution Network Company has announced finance report of last April.
Power generating companies have collected a sum of 13.9 billion togrog from its customers in the city and it means that an income has increased by 2.7 billion togrog against same period of 2013.
Main factors included renewed tariff of electricity power from last August (Mogi: increased fares for businesses) and number of customers grown up by 5533 to 246 thousand.
Tax Exemption for Amgalan Power Plant Approved by Parliament
Ulaanbaatar, May 9 (MONTSAME) A parliamentary session meeting on Friday backed draft laws on customs exemption and on value-added tax (VAT) exemption.
The approval of these laws means there will be VAT and customs exemptions in equipment purchases for the Amgalan power plant project in eastern Ulaanbaatar. The laws will be effective since the day they are approved.
After passing the laws on tax exemptions, the meeting is discussing amendments to the Minerals law, where MPs are asking questions to the Mining Minister who has developed the draft bill to amend the Minerals law.
New KOICA-sponsored waste manufacturing factory to open in UB late May
Ulaanbaatar, May 9 (MONTSAME) A South Korean "KOICA" waste manufacturing factory is planned to open its door in UB city in late of May.
Since becoming operational, wastes and plastic bags will be classified and re-manufactured in the factory field.
As of today, domestic two companies, "TChM" and "San Orgiu", are operating in this sector in the city and more one factory is expected to be built within 2016.
Rethinking Ulaanbaatar's Population
Written by Brian White
May 11 (The Mongolist) Ulaanbaatar is the most populated administrative area in Mongolia. Its population was estimated 1.31 million in 2013, representing approximately 46 percent of Mongolia's total population.1 According to population data compiled by the Ulaanbaatar City Statistics Office,2 Ulaanbaatar's population has been growing at a steadily increasing rate since the 1940s. Before the forties, the city was not much of a city at all, but rather a sleepy camp in the Tuul river valley that claimed less than 5 percent of the total population of the country. From the 1940s to the 1990s, the city increasingly represented a much larger portion of the national population, and in the last decade or so the city's population growth significantly outpaced the national growth rate, rapidly heading towards claiming half of the country's population (see graph below).
Much of Ulaanbaatar's recent population growth is generally attributed to inward migration from rural areas, as opposed to natural growth from city births, but the data indicates this is not a new phenomenon. In fact, the majority of Ulaanbaatar's population growth since 1926 has been driven by migration rather than births. Only in the three decades between 1963 and 1989, when presumably centralized planning strictly regulated migration, did the city predominantly expand due to natural population growth. There are significant jumps in the city's population in 1963 and 2000 in the graph above when censuses were conducted. It is easier to see these jumps in the graph below which shows net population growth from year to year.3 The spikes in 1963 and 2000, among otherwise smooth trends, indicate something significant happened those years. Rather than a spike in migration, I think it shows large numbers of migrants having gone undocumented in the years before those censuses. The jump in 2012, although not a census year, is in close proximity to the 2010 census further supporting this hypothesis. The city data for 2010 is significantly lower than the official census count, and the jump is likely a delayed adjustment to the official city data table.
It should not be surprising that Ulaanbaatar's population growth since 1926 has been mostly due to migration. In 1926 the official population was 1,500 people, which is about the size of a modern day rural soum (county). To get to its present population, the city has grown nearly 1,000 fold in the last 88 years, but the national population has grown just over 4 fold in the same period. The difference between these two rates has been compensated by the city claiming an increasing share of the national population.
This growth has made Ulaanbaatar a densely populated urban area. It is in stark contrast to the country at-large which has one of the smallest population densities in the world at 1.83 people per square kilometer.4 Depending on how you define "Ulaanbaatar" its population density is anywhere between 280 to 4,394 people per square kilometer. The former is derived from the administrative boundaries of the city districts which include thousands of square kilometers of empty rural space (see image above),5 and the latter is a rough estimate based on the areas of human habitation in those districts.6 The relative differences in these estimates are visually compared in the diagram below.
With a population just over one million, Ulaanbaatar is a reasonably sized urban area. Not small, but not particularly big by world standards. It is surrounded by hundreds of thousands of square kilometers of open space, so it can also continue to expand in all directions. Could it one day hold the majority of the country's population? It looks likely from the trends in the data. But, it is interesting to note that Mongolia's population is so small it's actually not that big of a deal Ulaanbaatar might one day have the majority of the population. A city of 2 million, for example, is not outside the realm of human experience, and a city that large would not take up that much space, especially relative to the remaining area of the country. In fact, if you wanted, you could fit the entire population of the country in a loosely formed crowd (no more than one person per square meter) in the area of the city circumscribed by the Ikh Toiroo (Big Ring Road) and Peace Avenue (see orange area in image below). You could gather the whole city population in an area less than twice the size of the area circumscribed by the Baga Toiroo (Little Ring Road) and Peace Avenue as well (the blue area in the image below).
The natural inclination of most residents of Ulaanbaatar would probably be to shudder or protest at the idea of the city getting any larger. After all, the traffic and pollution are horrible enough already, and there is all this talk of there not being enough water or power to sustain the population in the next few years. This rings true, I suppose, but it is a result of poor city management rather than the limitations of creating a healthy and sustainable urban population Ulaanbaatar's size. In fact, from a quality of life and economic sustainability perspective, having more and more of the population in and around Ulaanbaatar is arguably better--if the development of the city is managed properly. The numbers and experience in other parts of the world suggest with good planning and smart spending on infrastructure, an Ulaanbaatar that holds the majority of the country's population could be a liveable urban environment. A larger Ulaanbaatar would also have the added bonus of leaving hundreds of thousands of square kilometers in the rest of the country as solitary wilderness in which to escape the city on weekends.
[For additional reading on Ulaanbaatar's population read this oldie but goody "Ulaanbaatar: A City Built for 400,000?"]
Footnotes
1. Data from table "Хүн амын тоо, хүйсээр, оны эхэнд, мянган хүн" at: http://ubstat.mn/StatTable=11.
2. Ibid.
3. The migration numbers were calculated using the national net population growth rate for that year and taking the difference between the absolute population growth and the estimated rate of births in Ulaanbaatar using the national growth rate.
4. Based on an area of 1.564 million square kilometers. See http://en.wikipedia.org/wiki/Mongolia.
5. Based on an area of 4,704.4 thousand square kilometers. See http://en.wikipedia.org/wiki/Ulan_Bator.
6. Using a generous area of 300 square kilometers measured using this widget: http://www.daftlogic.com/projects-google-maps-area-calculator-tool.htm.
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Diplomacy
Mongolia-flagged sunken ship likely from Pyongyang
May 12 (JoongAng Daily) The Mongolia-flagged vessel that sank earlier this month in waters off South Korea while sailing from the North to China was owned by a company in Hong Kong, Seoul officials said, raising suspicion that the ship could be part of the regime's attempt to evade UN sanctions banning any illicit trade of weapons, luxury goods or other related material.
On April 4, the Grand Fortune 1, a 4,300-ton cargo ship flying the Mongolia state flag, sank in international waters off the coast of Yeosu in the southwestern part of South Korea.
The vessel was carrying 16 North Korean crew members, 50 metric tons of heavy fuel oil and 6,500 tons of iron ore and copper powder, according to the Korea Coast Guard, which would have earned the Communist state hard-sought foreign currencies amid crushing international sanctions on its economy.
The ship was bound for Jiangdu Port, eastern China, from the North Korean port city of Cheongjin.
The South Korean coast guard rescued five North Korean crew members, though two later died from their injuries. It also uncovered the body of a dead North Korean crew member during its search. South Korea repatriated the three crew members and the bodies via the border village of Panmunjom.
The fact that the vessel flew a Mongolian flag when all its crew members were North Korean nationals sparked suspicions that Pyongyang was using the Mongolian ship to avoid South Korea's scrutiny. Questions remain over the ship's owner, reportedly a company based in Hong Kong, Seoul officials told the JoongAng Ilbo yesterday.
According to officials from South Korea's Ministry of Oceans and Fisheries, the owner is believed to have registered the ship in the Mongolian government's database to evade taxes and hired North Korean crew members for their cheap labor.
Under international law, it is not illegal for a commercial vessel in a state to be registered to a country different than that of its owner. A practice called "flag of convenience," the system is often employed to evade regulations in the owner's country of origin or to lessen operating expenses.
Panama and Liberia, for instance, have some of the largest open shipping registries in the world by deadweight tonnage, according to the International Transport Workers' Federation, and flags the most foreign-owned vessels.
The system has been criticized by a number of international organizations, however, for its substandard practices, poor safety and training.
Although Mongolia is a land-locked country, it has accepted dozens of foreign vessels to be flagged under its system since 2003. In return, the country can boost its shipping industry. Seoul officials suspect there is a possibility that North Korea registered the ship in Mongolia by using a fake owner or company.
"Because the Grand Fortune 1 was discovered in international waters, not South Korean waters, we could not launch an investigation into the ship under UN Security Council resolutions," a South Korean Foreign Ministry official said. "Except for the heavy fuel oil or iron ore, which we could see right [on deck], we could not confirm what else the vessel loaded."
According to a March report by the UN Security Council Sanctions Committee, there are at least eight operating ships suspected to be North Korean.
India Pays Key Attention to Attracting Investment into Mongolia Says New Ambassador
Ulaanbaatar, May 9 (MONTSAME) Ambassador Extraordinary and Plenipotentiary of the Republic of India to Mongolia Somnath Ghosh presented Thursday his credentials to the President of Mongolia Ts.Elbegdorj.
After the ceremony, Mr Elbegdorj received Mr Somnath Ghosh to congratulate him with this new appointment as the Ambassador of India to Mongolia. The President noted the bilateral relationship and cooperation between Mongolia and India have been broadening in many areas including economy, investment, education, information technology, infrastructure, agriculture, tourism, defense and other sectors, and then expressed an appreciation to Ambassador Somnath Ghosh for coming to Mongolia during the period of intensive development of the mutual relations.
In his turn, the Ambassador said India pays a key attention to attracting investment of Indian companies to Mongolia, in order to develop information technology, infrastructure, mining and economy in Mongolia. Satisfied with opening of a Mongolia-India joint school in Ulaanbaatar, the Ambassador expressed a hope that Mongolia will further deepen trade and economic ties with India.
The President said that he is contented with the recent high level reciprocal visits and political dialogues that include an official visit of Mongolian Foreign Minister to India in 2013 and an official visit of the President of India Pratibha Devisingh Patil to Mongolia in 2011, which had great impacts on strengthening bilateral ties.
President Elbegdorj noted the Mongolian Government is keen to expand its cooperation with India in promoting investment and introducing latest technologies in mining and infrastructure sectors, and stressed the significance of a Memorandum of Understanding signed in May 2012 between the Ministry of Mineral Resources and Energy of Mongolia and the Steel Authority of India in jointly exploring and identifying areas and ways of cooperation as well as developing economic activities in the mining and steel manufacturing sectors.
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Social, Environmental and Other
Mongolia Preparedness in Event of PPR Incursion from China
May 6 (UNFAO) Due to recent outbreaks of Peste des petits ruminants (PPR) in China, neighbouring countries are at increased risk of incursions of this virulent animal disease which affects small ruminants, both wild and domestic. One of the countries at risk is Mongolia, which shares its longest border with China, at 4 677 km. To date, PPR has never been diagnosed in Mongolia.
The Mongolian economy relies heavily on agriculture and livestock. The spread of PPR into Mongolia would impact significantly on the food security of the nation and the livelihoods of a large number of small ruminant and livestock keepers. With the increased circulation of PPR in China, the Government of Mongolia requested the assistance of the Food and Agriculture Organisation of the United Nations (FAO) to assess the preparedness of the country in the event of such an incursion.
On 21 April 2014, FAO's Crisis Management Centre for Animal Health (CMC-AH) fielded a rapid deployment team of four experts to Ulaanbaatar, Mongolia in order to identify the risk factors of the disease spreading into Mongolia and neighbouring countries. The team also aimed to: i) provide recommendations for recognition and reporting of the disease if needed; ii) provide advice on PPR control, in particular in relation to surveillance, monitoring and vaccination measures; and iii) assess the short- and medium-term training needs of the national Veterinary Services in order to ensure an effective prevention and control programme for PPR.
Led by Eran Raizman, Senior Animal Health Officer and Head of the Emergency Prevention System for Animal Health (EMPRES-AH) at FAO, the team met with the Mongolian Chief Veterinary Officer and government veterinarians on a visit to the State Central Veterinary Laboratory. In preparation for their trip to the south-eastern part of the country and the border with China, they met with the Border Inspection Department and General Agency of Specialised Inspection. Although two sets of fences separate Mongolia from China and are regularly patrolled, concerns were raised regarding a significant population of nomadic gazelles as well as informal movements of livestock across the border.
While Mongolia has a solid animal health infrastructure and the Government invests heavily in animal health providing laboratories with diagnostic kits and vaccines, there is a need for additional support in training and to improve disease surveillance due to the increased threat of transboundary animal diseases like PPR. In this respect, FAO recommended that the Government of Mongolia implement a series of activities, including: i) improving syndromic surveillance for small ruminant respiratory and enteric diseases; ii) training and awareness-raising activities; iii) enhancing laboratory capacity and sample submission; iv) ensuring timely access to PPR vaccine; v) developing a contingency plan in the event of an incursion of PPR; vi) reviewing animal health conditions for the importation of small ruminants; vii) completing a draft on animal health legislation and supporting its introduction to parliament; and viii) enhancing small ruminant health through Mongolia's partnership in the regional initiative to improve transboundary animal disease surveillance.
Demonstrating a continued committment towards its animal health system, the Government of Mongolia aims to establish a reliable response system in the event of an incursion of PPR according to the FAO assessment of its preparedness levels. By improving early warning and prevention of transboundary animal diseases like PPR, Mongolia will increase its capacity to support the resilience of its livestock communities.
Mongolia Set to Join Global Vocational Education Organization WorldSkills International
Ulaanbaatar, May 7 (MONTSAME) The Board of Directors of the WorldSkills International took a decision on acceptance of Mongolia's application at its meeting held in Geneva in March 2014.
The decision is subject to an official approval at the General Assembly of the Worldskills International to be hosted in Luzern, Switzerland in September 2014.
With above 50 members the WorldSkills International is a not for profit membership association open to agencies or bodies which have a responsibility for promoting vocational education and training in their respective countries/regions.
The membership opens up opportunities to participate in Skill Olympics, its annual competition (next to be hosted in Brazil in 2015) and other activities.
World Champion Urantsetseg Munkhbat Takes Gold at Baku Judo Grand Slam
May 10 (euronews) The Baku Grand Slam in Judo has kicked off with the world champion Munkhbat Urantsetseg from Mongolia taking gold in the under 48 kg class. She saw off Tbilisi Grand Prix bronze medallist Amelie Rosseneu. from Israel.
Munkhbat, who was after her first gold medal since winning the world crown in Rio, took the lead with a yuko. She forced her opponent to submit after 47 seconds.
Former world silver medallist Annabelle Euranie from France upstaged fellow countrywoman and Olympic bronze medallist Priscilla Gneto in the under 52 kg class.
Euranie who sustained a black eye during a ne-waza exchange in the preliminaries was too strong for her 22-year-old opponent who was making her long-anticipated return from injury.
In the men's category Samsun Grand Prix bronze medallist Colin Oates from Great Britain defeated former European Championship silver medallist Kamal Khan-Magomedov to win in the under 66 kg class.
The Edinburgh-based Briton made a slow start with two shido penalties but he soon took the lead with a yuko from sumi-gaeshi on the edge of the tatami.
He secured his victory by adding a waza-ari from osaekomi.
World Championship bronze medallist Orkhan Safarov from Azerbaijan beat Samsun Grand Prix bronze medallist Vugar Shirinli in the under 60 kg final.
Link to article (included video)
Legendary sumo wrestler Asashoryu to develop sumo in Almaty
May 9 (Tengri News) Asashoryu Akinori, winner of 25 Emperor Cups, is planning to develop sumo wrestling in Almaty, Tengrinews reports citing the press-office of the Almaty Akimat (city administration).
He announced this intention during his meeting with the Akim (Mayor) of Almaty Akhmetzhan Yessimov in late April. There are many talented young people in Kazakhstan, and Almaty is on its way to become one of the world's sports hubs, Asashoryu Akinori said.
Akhmetzhan Yessimov agreed that Almaty had good progress in many kinds of sports, including wrestling.
"Supporting and promoting sports is one of our priorities. That is why, we are interested in creating various training opportunities in our city, including those in sumo wrestling," the Mayor said.
"There was a time when Mongolia became recognizable in the world thanks to my performances. Now, I would like to put all my efforts and experience into getting Kazakhstani sportsmen to glorify their country through this sport," Asashoryu Akinori said.
Asashoryu Akinori arrived in Almaty on an invitation of Dauren Mussa, President of Bes Qaru (five weapons) Association, which aims to promote martial arts and educate people about the military culture of Kazakhstan and other countries.
Asashoryu Akinori is a former sumo wrestler, who was born in Ulaanbaatar, Mongolia. He is the 68th yokozuna (the highest rank in sumo) in Japan and the first Mongolian ever to reach such status. Over his entire career, he won 25 Emperor Cups, which is the most prestigious competition in sumo wrestling, placing him the fourth in the history of s
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