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Monday, July 21, 2014
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TRQ closed -0.57% Friday to US$3.49, +2.35% from July 10-18
Press release: Oyu Tolgoi - update on production and operations
140,000 tonnes of concentrate produced in second quarter, 2014 -
July 16, Ulaanbaatar, Mongolia (Oyu Tolgoi) - Today, Turquoise Hill Resources, released its quarterly production report, providing an update on production and performance relating to Oyu Tolgoi, which coincided with the first anniversary of commencement of concentrate shipments.
Between April and June 2014, Oyu Tolgoi produced 140,000 tonnes of concentrate, bringing total production so far this year to 242,900 tonnes.
During the quarter, concentrate sales increased significantly driven by ongoing improvements in customer logistics and marketing. As a result, sales exceeded production, resulting in an inventory drawdown for the quarter.
Oyu Tolgoi President and CEO, Craig Kinnell, said: "Today's quarterly production and sales figures show that we are making the Oyu Tolgoi mine stronger as we continue on our path to becoming a safe, sustainable, profitable, and internationally competitive business.
"Last week's anniversary was a true milestone for Oyu Tolgoi - and Mongolia - as we celebrated the first anniversary of shipment of product.
"Oyu Tolgoi's employees have achieved a tremendous amount this year, and we are excited about taking the mine forward. I have great confidence in what we have achieved; we have sown the seeds to create a safe and thriving partnership, developing one of the best ore bodies in the world".
As well as focusing on production and increasing shipments, Oyu Tolgoi continues to improve performance in a number of areas:
· Water recycling has now reached 86.4 per cent, meaning Oyu Tolgoi reuses each drop of water more than five times. This makes it one of the very best copper mines in the world for water efficiency, using less than half the water per tonne of ore processed than average copper mines worldwide.
· A five-year investment of more than US$126 million in education and training has been completed with more than 13,000 Mongolians benefiting from the programme.
· More than 200,000 seedlings have been planted, ready for ongoing rehabilitation in the South Gobi. Stringent monitoring of local water supplies continues, with ongoing development of new water sources for local people and animals.
· The Oyu Tolgoi workforce is 92 per cent Mongolian.
· Following the connection of Khanbogd with permanent power last year, Oyu Tolgoi plans soon to build a road from the mine to the soum centre. This is expected to act as a catalyst to help Khanbogd thrive, driving growth and providing more options for Oyu Tolgoi's employees to live locally with their families.
Oyu Tolgoi's latest production figures can be found below. Further information can be found in Turquoise Hill Resources' production report, and Rio Tinto's quarterly update.
Production Figures | Q2 2014 | Total 2014 (H1) |
Ore Treated ('000 tonnes) | 7,778 | 13,338 |
Average mill head grades (grades of ore) | | |
Copper(%) | 0.53 | 0.52 |
Gold(g/t) | 0.60 | 0.55 |
Silver (g/t) | 1.57 | 1.55 |
Copper concentrates produced ('000 tonnes) | 140.0 | 242.9 |
Average concentrate grade (% Cu) | 25.8 | 25.3 |
Total metals produced | | |
Copper in concentrates ('000 tonnes) | 36.2 | 61.5 |
Gold in concentrates ('000 ounces) | 113 | 179 |
Silver in concentrates ('000 ounces) | 229 | 391 |
Sales of metals in concentrates | | |
Copper in concentrates ('000 tonnes) | 51.6 | 64.7 |
Gold in concentrates ('000 ounces) | 126 | 154 |
Silver in concentrates ('000 ounces) | 309 | 387 |
Oyu Tolgoi marks first anniversary of commencement of shipment
Ulaanbaatar, Mongolia, July 9 (Oyu Tolgoi) - Oyu Tolgoi today celebrates the first anniversary since it began shipment of its copper concentrate to international customers.
In a speech to members of the workforce in Ulaanbaatar, Oyu Tolgoi President and CEO, Craig Kinnell, congratulated them on the completion of a full year of exports, and spoke about Oyu Tolgoi's strong future.
Craig Kinnell said: "The open-pit is up and running and our business is getting stronger and stronger. The concentrate that we have produced contains enough copper to run a standard 22mm copper pipe almost five times around the world.
"That's a lot of copper. But what we have done goes far beyond the product that we make and export.
"While we're never complacent, we should be proud that we are bringing a new approach to safety standards in Mongolia.
"We've completed a five year investment of more than US$126 million in education and training, a scheme which more than 13,000 Mongolians have benefited from.
"We're continuing to work with our neighbours to strengthen our partnership and agree a long term approach to supporting the South Gobi together.
"Our water recycling rate has now reached 86.4 per cent, reusing each drop more than five times, and making us one of the very best copper mines in the world for water efficiency."
Looking to the future, he continued: "Our business could last as long as one hundred years. In those terms, we are a small child, with many years of growing and developing ahead of us.
"With age comes wisdom, and with experience comes strength. We have much more to do, and a lot of challenges and hard work to face together.
"But I have so much confidence in what we have already achieved - the seeds that we have sown to create a safe and thriving partnership, developing one of the best ore bodies in the world."
In a ceremony last year, Prime Minister Altankhuyag, Mining Minister Gankhuyag, and Rio Tinto Copper Group Chief Executive, Jean Sebastien Jacques watched the first convoy of trucks depart for international markets. Since then, exports have continued to ramp-up while the business has focused on safely improving productivity and efficiency.
Video: Rio Tinto CEO Walsh on Iron Ore, Mongolia Mine
July 17 (Bloomberg) -- Rio Tinto Group Chief Executive Officer Sam Walsh talks about its Oyu Tolgoi mine in Mongolia and iron-ore prices. He speaks from Sydney with Angie Lau on Bloomberg Television's "First Up."
UPDATE 1-Rio Tinto Q2 iron ore output rises; lifts copper guidance
* Rio Tinto boosts Q2 iron ore output, shipments
* Sees total 2014 iron ore shipments around 300 mln/t
* Says Q2 was strong, lifts 2014 copper output guidance (Adds more data, details)
SYDNEY, July 16 (Reuters) - World no. 2 iron ore miner Rio Tinto said expansion work at its mines and productivity gains led to a sharp rise in iron ore output as it steps up shipments to Chinese steel mills.
The company, which competes with Vale and BHP Billiton in the seaborne iron ore market, said it was on track to produce 295 million tonnes of the steel-making material in 2014, up from 266 million last year. Shipments for the year should reach 300 million tonnes.
"Our iron ore expansion continues to deliver high-margin growth reinforcing our position as a low cost producer," Rio Tinto said in its second-quarter production report on Wednesday.
Second-quarter iron ore shipments climbed 23 percent on the same period a year ago to 75.7 million tonnes, while production of the steel-making ingredient rose 11 percent to 73.1 million, the company said.
Analysts have begun to question the expansion plans of big iron ore miners following a market correction tied to a slowdown in China's economic growth to its weakest in 23 years.
Iron ore for immediate delivery to China .IO62-CNI=SI stood at $98 a tonne on Wednesday but fell to a 21-month low of $89 in mid-June.
Rio has longer term plans to raise its output to 360 million tonnes a year. Vale, the world's largest producer, is also digging more mines.
BHP is lifting output to between 260 million and 270 million tonnes from a 217 million tonne target in 2014.
Importers to China are counting on China closing up to a fifth of its domestic mine production in response to sub-$100-per-tonne iron ore. This would increase reliance among mills in China on foreign ore, which contains higher iron content and can be mined and shipped more cheaply.
Fortescue Metals Group Ltd, Australia's third-largest iron ore miner, is expected to release data later on Wednesday confirming it shipped 124 million tonnes of iron ore in the 12 months to June 30.
Outside of iron ore, Rio Tinto lifted guidance for its share of mined copper production by 15,000 tonnes to 585,000 tonnes.
It noted strong production from its interests in the United States, Chile, Mongolia and Indonesia in the second quarter.
SGQ traded flat at C$0.65 July 10-18
SouthGobi 2Q raw coal output down 14.1% QoQ, up 224% YoY
[ET Net News Agency, 11 July 2014] SouthGobi Resources (01878) said its raw coal production for the second quarter ended 30 June 2014 dropped 14.1% quarter-on-quarter and surged 224% year-on-year to 550,000 tonnes.
Sales volumes of standard semi-soft coking coal amounted to 400,000 tonnes, an increase of 37.9% from the previous quarter. Sales volume of thermal coal jumped 4.1 times quarter-on-quarter and 364% year-on-year to 510,000 tonnes. Total sales volume soared 133% quarter-on-quarter and 184% year-on-year to 910,000 tonnes.
SouthGobi said coal prices in China declined further in the second quarter compared to the first quarter of 2014 as a result of strong seaborne and domestic supply. The decline in coal prices has been partially offset by the increase in the volumes in the second quarter compared to the seasonally slow first quarter.
In June, SouthGobi reduced its production and placed about half of its workforce in furlough. This furlough is anticipated to remain in place until the end of July subject to market conditions. Contracted sales volumes are expected to be met from the combination of the existing coal stockpile and reduced production volumes. Coal production in the second half of 2014 will be paced to meet contracted sales volumes.
AKM +20.6% to A$0.41 since announcement, July 16-18
Aspire Mining to benefit from Russia, China, Mongolia infrastructure deals
July 16 (Proactive Investors) --
- Aspire Mining Ltd (ASX:AKM) owns the Ovoot Coking Coal Project (Ovoot), and is also progressing the Northern Line Rail Line (NRL) in Mongolia.
- Ovoot is one of the largest undeveloped coking coal projects globally. Its appeal is evidenced by the Aspire / Noble Group alliance.
- Along with Tavan Tolgoi, Ovoot is recognised as one of the key potential coal suppliers to Mongolia's Sainshand Industrial Park.
- Current off take interest in Ovoot coking coal exceeds targeted production.
- The Ovoot project requires a 547km ($1.3b) rail line linking the project to existing rail infrastructure.
- Request for a Concession from Northern Railways LLC is awaiting approval for construction by the Mongolian government. This would de-risk the entire Ovoot project.
- The NRL could become an important link for Russian/Chinese trade. It is moving from a project specific rail connection to becoming part of a network
- Financing interest (EOI) has already been received for US$1.3bn to construct NRL. It may also find funding support from Russian institutional investors for both NRL and Ovoot development
- Mongolia has embarked on a massive upgrade of its railway system that should see the development of the NRL, as part of a new and upgraded country wide network
- We believe that downside risk for Aspire is limited while infrastructure risk has been reduced
- Based on a peer company analysis, we consider Aspire Mining to be significantly undervalued. We believe that the rail concession could be granted within the next six months and hence a catalyst for a major re-rating of Aspire's share price. We forecast a 6 – 9 months share price target of $0.125 per share (see analysis and valuation) after rail concession is granted for NRL.
1733 closed -1.22% Friday to HK$0.405
Winsway chairman pledges 29.9% stake to China SOE as security for contractual obligations
[ET Net News Agency, 16 July 2014] Winsway Coking Coal (01733) said its Chairman and controlling shareholder Wang Xingchun pledged about 1.13 billion shares in favour of a state-owned enterprise in the PRC as security for the performance of certain contractual obligations of Beijing Winsway Investment Co., Ltd., a company indirectly owned by Wang.
The pledged shares represent about 29.9% of the issued shares of Winsway. Wang currently holds about 49.1% interest in Winsway.
Winsway: Change of Company Name to Winsway Enterprises Holdings Ltd.
July 18, Winsway Enterprises Holdings Limited (HKEx:1733) -- The Board is pleased to announce that the change of Company name from "Winsway Coking Coal Holdings Limited 永暉焦煤股份有限公司 " to "Winsway Enterprises Holdings Limited永暉實業控股股份有限公司 " became effective on 25 June 2014.
The Chinese stock short name of the Company will be changed from " 永暉焦煤 " to " 永暉控股 " for the purpose of trading on the Stock Exchange with effect from 9:00 a.m. on 23 July 2014. The English stock short name will remain unchanged as "WINSWAY". The stock code of the Company will remain unchanged.
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Related:
AMENDED AND RESTATED MEMORANDUM AND ARTICLES OF ASSOCIATION OF WINSWAY ENTERPRISES HOLDINGS LIMITED, July 18
XAM closed +11.1% to A$0.06 Friday on the news
XANADU MINES: HIGH-GRADE EXTENSIONS DISCOVERED AT KHARMAGTAI
HIGHLIGHTS
- Step-out drilling significantly extends and confirms the continuity of shallow, high- grade porphyry copper-gold mineralisation at Kharmagtai.
- KHDD338 intersects 160m @ 0.47% Cu & 0.85 g/t Au (1.00% CuEq) at Altan Tolgoi.
- KHDD340 intersects 42m @ 0.56% Cu & 0.72g/t Au (1.01% CuEq) at Tsagaan Sudal.
- Second diamond drill rig mobilised to advance the step-out drilling based on these outstanding results.
INTRODUCTION
July 18 -- Xanadu Mines Ltd (ASX:XAM – "Xanadu") is pleased to announce the results of its recent diamond drill program at the Kharmagtai copper-gold project, located in the South Gobi region of Mongolia. A total of five diamond drill holes for 1,634m (out of an initial 45 planned drill holes) have been completed at the Kharmagtai project (refer to Figure 1 and Table 1 for drill collars).
ASSAY RESULTS
This step-out drilling significantly extends and confirms the continuity of shallow high-grade porphyry copper-gold mineralisation at the Altan Tolgoi, Zesen Uul and Tsagaan Sudal prospects. The assay results are presented in Table 2 and some key observations include:
– Altan Tolgoi results show continuity of copper and gold mineralisation along strike and down dip;
– KHDD338 at Altan Tolgoi indicates the high-grade copper and gold mineralisation, including 160m grading 0.47% Cu & 0.85g/t Au (1.00% CuEq) from 110m, continues to be associated with the strong magnetic anomaly in the most eastern part of the prospect;
– KHDDH340 at Tsagaan Sudal discovered a higher-grade core to the system within a broad, low-grade zone including 42m grading 0.56% Cu & 0.72g/t Au (1.01% CuEq) from 202m; and
– the Zesen Uul drilling continues to expand the known shallow porphyry mineralisation.
Photographs of mineralisation from the diamond drill core are shown in Figures 2 to 6.
SECOND DRILL RIG MOBILISED
Based on these outstanding results, a second diamond drill rig has been mobilised to Kharmagtai to advance the step out drilling. This drill program will test potential extensions to high-grade mineralisation and identify new areas of mineralisation not included in the current geological model. The drill program will contribute to defining a new resource estimate at Kharmagtai.
Porphyry mineralisation in the central Kharmagtai area is focused in and around the intrusions of the Kharmagtai Igneous Complex. Ground magnetics indicate that at least 70% of this strongly mineralised intrusive complex lies under cover at the Basin. There are numerous other targets in the Kharmagtai area that remain under explored. Xanadu's Managing Director, Mr George Lloyd, noted that: "The potential for further discoveries remains very high".
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Newera: Fully Underwritten Non-Renounceable Entitlements Issue to Raise A$1.05 Million
July 10 -- Newera Resources Limited (ASX:NRU) is pleased to announce it has resolved to make a fully underwritten, non-renounceable entitlements issue (Offer) to shareholders to raise A$1,048,259 before costs.
The Offer will be an offer of new fully paid ordinary shares (New Shares) on the basis of four (4) New Shares for every five (5) shares held by eligible shareholders on the Record Date (Existing Shares), at an offer price of A$0.002 per New Share.
Subscribers to the Offer will also receive one (1) free attaching listed option for every two (2) New Shares issued with an exercise price of A$0.005 and an expiry of 31 July 2016 (New Options).
Based on the current shares on issue and assuming conversion of all existing Convertible Notes prior to the Record Date, the Offer will result in the issue of approximately 524,129,346 New Shares and 262,064,673 New Listed Options. The New Shares will rank equally with Existing Shares.
The Offer will be fully underwritten by Element Capital Pty Limited (EC). In consideration for underwriting the Offer, the Company has agreed to pay to EC a sum equal to 6% of the total amount underwritten. The Company has also agreed to issue 40 million listed options to EC as part of their underwriting agreement which will be issued on successful completion of the Offer. The options will have an exercise price of A$0.005 and an expiry of 31 July 2016.
The Offer will be open to all holders of ordinary shares in the Company with a registered address in Australia or New Zealand.
Funds raised from the Offer will be applied to continued work on the Company's existing projects and working capital.
Newera update on activities at Ulaan Tolgoi
July 15 -- Newera Resources Limited (ASX:NRU) ("Newera") is pleased to advise that it has obtained all approvals necessary to undertake a phase two drilling program within the northern sector of the Ulaan Tolgoi licence. The Ulaan Tolgoi licence is located in the South Gobi basin in Southern Mongolia.
The northern sector of the Ulaan Tolgoi licence was recently covered by a ground magnetics ("GM") survey, resulting in the interpreted identification of two substantial sedimentary sub-basins.
A 600 metre diamond drilling program is now being planned to test a number of coal prospective areas within the two sub-basins. Newera has received an all in quote of US$65,000 to complete the program.
Currently, inversion modelling of the GM data is taking place which should provide detailed imagery of the basement topography underlying the GM survey area.
Key points:
· Two substantial, interpreted sedimentary sub-basins identified.
· Six interpreted coal prospective areas (CPA's) identified within the two sub-basins – designated 4/1, 4/2, 4/3, 4/4, 4/5 and 4/6 in Figure 3.
· The interpreted limit of depth of sediments within the sub-basins placed at 250 metres.
· The sub-basin containing CPA's 4/1, 4/2, 4/3, 4/5 and 4/6 estimated to be up to 9kms in length and up to 7kms in width.
· The sub-basin containing CPA 4/4 estimated to be approximately 9kms in length and up to1.8kms wide.
· Bright black coal discovered within a newly identified sub-basin within a third party licence immediately north of Newera's Ulaan Tolgoi and interpreted to be in-places, overlapping the Ulaan Tolgoi licence's northern boundary.
· Newera has expended sufficient funds on the Ulaan Tolgoi project to-date to be entitled to a 51% interest in the Mongolian Company which holds the Ulaan Tolgoi Licence as its sole asset. Hence Newera currently holds a right to 51% of the Ulaan Tolgoi project, earning up to 70%.
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KCC +27.3% to C$0.07 June 10-18
Kincora Copper Mongolia exploration yields "very encouraging" initial results
July 10 (Proactive Investors) Kincora Copper (CVE:KCC) released what it called "very encouraging" initial exploration results from Mongolia, in new area which is now being know as Shargal Tolgoi – which means 'Yellowish Hill'.
This new mineralised copper zone is adjacent to a prominent regional fault to the south-east of previous drilling and mineralisation at West Kasulu, Kincora said.
Assay results from drilling are currently pending, but the company has said that all holes yielded "at least broad visual lower grade copper mineralisation".
Three drill holes have thus far been completed, while drilling continues in two others.
"Initial exploration activities this field season are very encouraging, supporting our strategy of testing large scale targets in line with known copper porphyry ore bodies, including Oyu Tolgoi," said chief executive Sam Spring.
"The successful identification of at least broad visual lower grade copper mineralization in all drill holes, noting assay results are pending, and the favourable near surface expressions to date, has confirmed our geological model."
It also expands the copper porphyry potential at Bronze Fox in a significant and new mineralised copper zone, Spring said.
Kincora also noted that the Mongolian Parliament has approved amendments to the existing Minerals Law, though the full details are not yet known.
It told investors that it will continue to inform them of significant developments regarding ongoing exploration activities and the proposed resolution of the 106 licence issue – which affects two lower priority licences adjacent to the flagship Copper Fox project.
Guildford Coal receives unsolicited offer to acquire its Australian coal assets for US$22.5m
July 17 -- The Board of Guildford Coal Limited (ASX: GUF) (Guildford) advises that they have received a confidential, unsolicited offer to acquire all of Guildford's Australian coal assets from a Singaporean company (Purchaser) listed on the Main Board of the SGX.
The proposed purchase price is US$22,500,000, payable by way of a non‐interest bearing convertible promissory note which matures six months after issue and payable in cash or may be converted, at the Purchaser's option, into ordinary shares in the Purchaser to be issued to Guildford.
Completion of the sale of Guildford's Australian coal assets to the Purchaser would be subject to obtaining necessary shareholder and SGX approvals, negotiation of binding documentation and other customary conditions.
The offer is open for acceptance by Guildford until 5pm (Singapore time) on 23 July 2014.
The Board is considering and evaluating this offer and will update shareholders in due course. This offer does not currently have any impact on the timetable for the non‐renounceable entitlement offer announced on 10 July 2014.
Related:
Non‐Renounceable Entitlement Offer Letters to Shareholders – Guildford Coal, July 16
Supplementary Prospectus – Guildford Coal, July 18
Khan Investment Management June Update
July 17 (Khan Investment Management) --
Happy Naadam!
It's been some time since our last newsletter – and for that I apologise. We've admittedly been quiet, but we've been very busy. With our recently expanded Khan Team and the additional resources of our new Fund Management Company, I assure you that in future our correspondences will be regular and timely each month.
Khan Investment Management (Khan) expands team
It gives me great pleasure to welcome Mr Laurenz Melchers and Mr Chris MacDougall who have both recently joined the Khan Team.
Mr Melchers, a German citizen who has lived and worked in Mongolia over the last 17 years, is Founder and Chairman of Mongolian Star Melchers Ltd (MSM) and is known as one of the most successful businessmen in the country. Laurenz has been appointed as Chairman of the Khan Advisory Board. The new Advisory Board, which will be fully announced over the coming weeks, will be compiled of experts from varying fields with unique Mongolian expertise and experience. The Advisory Board members will be drawn on to meet the growing demand for Khan's ancillary corporate finance and consulting activities.
Mr MacDougall is Canadian and has lived and worked in Mongolia for the last 3 years. As Managing Director of Mongolian Investment Banking Group (MIBG), Chris has undertaken a number of M&A transactions and has advised both foreign and local investors on Mongolian investment opportunities. Mr MacDougall has joined as a Senior Advisor to Khan and will work between our Ulaanbaatar and Singapore offices whilst continuing to work with MIBG.
The bios of both Laurenz and Chris can be viewed on our website www.Khan-Management.com
Khan Mongolia Equity Fund (KMEF) appoints new Investment Manager
On 31 May, I joined Asia Capital & Advisors Pte Ltd (ACA), a Registered Fund Management Company with the Monetary Authority of Singapore, as an Executive Director. ACA is a pan-Asian investment management and private equity specialist with exceptional financial sector expertise. Founded in 2011 by Mr Francis Rozario (a 28 year Citibank and 8 year Temasek veteran), ACA seeks to support Financial Institutions and Investment Funds by creating the conditions for successful future performance through a combination of Knowledge, Capital and People.
Concurrent to my appointment with ACA, the Board of the KMEF appointed ACA as the new Investment Manager of the Fund, effectively bringing the investment management role "in house". Khan remains Investment Advisor to the Fund.
As a Director of the KMEF, I would like to thank the Fund's previous Investment Manager, Gordian Capital Singapore Private Limited, for their outstanding support and service over the last 32 months, without which, inception of the KMEF would have remained "blue sky".
Our new partnership with ACA and its principals is a huge milestone in Khan's evolution and a demonstrable indicator of our commitment to the business' long term success.
Additional information about ACA can be found at www.ACA.sg.
Chairman of Khan appointed as APU Company non-Executive Director
In April I was appointed as a non-Executive Director of APU Company (APU:MO). APU is Mongolia's premier beverage producer, the largest non-mining company listed on the Mongolian Stock Exchange, and 2013's second highest corporate tax payer in the country. The appointment to the Board is not only a great personal milestone, but fantastic news for Khan and a resounding validation of all the hard work we have undertaken over recent years in building our profile and reputation in the Mongolian market. In June I attended my first APU Company Board meeting and was able to participate in the official opening ceremony of the Company's new Dairy Plant, as well as join in APU's 90th Anniversary celebrations. I am humbled to be directly associated with one of Mongolia's strongest brands, a market-leading Company that Khan believes continues to be undervalued. I look forward to contributing to the APU Board and working with Management to help drive APU's strategy and growth in the future.
Mongolian numbers disappoint, but significant progress being made
Mongolia's headline economic indicators have continued to weaken year-on-year: FDI down 64%, FOREX reserves down 47%, and inflation now 13.7%. Driven by falling domestic consumption and weakening exports, the trade balance has also suffered, down 75% from the previous year. The Mongolian Tugrik (MNT) has followed trend, depreciating to all-time lows of MNT 1,838.54 (against the US Dollar) – a 10.8% depreciation YTD and down 46% since inception of the KMEF in October 2011. Coal exports have also continued to decrease in the first 6 months of 2014. Many development projects, particularly in the coal sector, have resorted to slowing operations and reducing staff, applying further pressure to local economies and the overall buying power of the Mongolian consumer.
On the positive side of the ledger, and in-spite of the economic challenges, the IMF is still forecasting 9.6% GDP growth in 2014. Copper exports, the rising star in the economy, have risen 87% as a result of Oyu Tolgoi (OT) production. The Mongolian Government has also taken measured action towards reinforcing their support for foreign investment. Legislative reforms in the mining sector remain at the forefront of these actions.
Earlier this month Parliament passed several constructive pieces of legislation including a new Petroleum Law and highly anticipated amendments to the Mining Law – which importantly included revoking the 4 year moratorium on granting of new mineral exploration licences. Amendments also include an extension to the current exploration period, allowing exploration licences of 12 years instead of 9. This "best in class" development, coupled with last year's Investment Law, now make Mongolia one of the most attractive destinations for mineral exploration in the world.
The Government has also worked to reinforce investor confidence. Through a "100 Day Push" to revive the economy, the administration introduced a handful of supporting initiatives, including the Mongolia Business Summit and non-visa travel to citizens from certain FDI-targeted nations.
There are still a number of key reforms to be pushed through Parliament. We are happy to have been informed that there will be a special Parliament sitting in August to address outstanding issues prior to the next scheduled Autumn Session of Parliament in October.
Mongolia to benefit from strengthening China-Russia relations
Given recent geopolitical events surrounding Ukraine and strained relations between China and the outside world, Mongolia appears set to be the unlikely beneficiary of problems elsewhere and the strengthening relationship between its two giant neighbors. Both China and Russia have recently shown renewed interest and strong support for Mongolia's industrial, infrastructure, and transport mega-projects. Following the recent USD 400B gas supply agreement with China (which included a USD 25B pre-payment in June), Russia is looking to significantly expand transport and logistic infrastructure between the two countries which includes a trans-Mongolian gas pipeline as well as expanded rail and road links.
China's Sinopec has agreed to back Mongolia's first coal gasification plant. President Xi Jinping will make an official visit to Mongolia from August 20th during which the USD 30B investment agreement is expected to be signed and other significant investment "sweeteners" are expected to be announced, including an extension to the MNT / RMB swap facility. The USD 30B coal gasification mega infrastructure project alone represents almost three times Mongolia's 2013 GDP.
Naturally these expected agreements with Russia and China would strengthen the Mongolian Government's finances and credit, and would lend considerable support to the flagging local currency.
We believe that following June's announcement of an Economic Free Trade Zone on the border between Mongolia and Russia, Xi's visit will likely be used as an opportunity to announce an Economic Free Trade Zone on the border between Mongolia and China. Whilst in Mongolia two weeks ago, our Mongolian Director Narantuguldur Saijrakh and I took the opportunity to visit the border town Zamyn Uud, and see first-hand the development of this seemingly unknown project that has been underway for 3 years.
It is rumoured that Mr Putin may also visit Ulaanbaatar August 20th, at the same time as Xi, ensuring worldwide grabbing headlines for Mongolia and cementing the country as central to the "Asian Pivot".
The Khan Mongolia Equity Fund performance for January was +6.03%.
The Net Asset Value as at 31 January 2014 was USD 29.99
The Khan Mongolia Equity Fund performance for February was +1.57%.
The Net Asset Value as at 28 February 2014 was USD 30.46
The Khan Mongolia Equity Fund performance for March was -7.68%.
The Net Asset Value as at 31 March 2014 was USD 28.12
The Khan Mongolia Equity Fund performance for April was +2.36%.
The Net Asset Value as at 30 April 2014 was USD 28.79
The Khan Mongolia Equity Fund performance for May was -5.73%.
The Net Asset Value as at 31 May 2014 was USD 27.14
The Khan Mongolia Equity Fund performance for June was -3.24%.
The Khan Mongolia Equity Fund performance for the 6 months to June 30 was -7.18%.
The Net Asset Value as at 30 June 2014 was USD 26.26
Factsheets outlining monthly performance and commentary can be downloaded by registered users of the Khan Investment Management website – www.Khan-Management.com
Over recent months the KMEF has participated in 3 notable private placements of portfolio companies:
• March 2014: Kincora Copper Limited (KCC:CN) raised CAD 5M @ CAD 0.05
• April 2014: Xanadu Mines Limited (XAM:AU) raised AUD 1.71M @ AUD 0.048
• May 2014: Erdene Resource Development Corporation (ERD:CN) raised CAD 0.69M @ CAD 0.16 and CAD 0.35M @ CAD 0.175
After the successful capital raisings, all three junior mining companies currently have drill rigs operating. Both Kincora Copper Ltd. (KCC:CN) and Xanadu Mines Ltd. (XAM:AU) have commenced 2014 exploration activities on their respective flagship copper targets: Bronze Fox and Kharmagtai. Results from current drilling campaigns are expected to be announced by the end of August. Erdene Resource Development Corp. (ERD:CN) began further exploration works on their 100% owned flagship Altan Nar gold project in early May and recently released first round results that indicated the highest gold grade intersections to date, including 19m @ 5.8g/t, and "bonanza grades" of 5m @ 17.7g/t – perhaps the highest ever recorded in Mongolia. Erdene is aiming to announce a compliant resource estimate before year end and could potentially be producing within 18 months.
In May, Xanadu shareholders approved a definitive agreement to acquire 90% interest in the Kharmagtai project, a highly prospective copper-gold exploration project, from Turquoise Hill Resources Ltd. (TRQ:US) with a USD 4M equity facility from its Mongolian partner Mongol Metals LLC. Now with monies successfully raised in April through private placement and a USD 4M loan facility from Noble Group (NOBL:SP), Xanadu is adequately cashed up to progress the Kharmagtai project within this exploration season. We expect results of current exploration activities to be released in August.
These successful placements further our view that regardless of the OT issues, there are thousands of miners and professional investors watching Mongolia and they all want a piece of the extraordinary rich Mongolian minerals pie. The return of investment from the international private sector may be slow, but it will definitely return.
While international media remain fixated on the ongoing delays and disputes surrounding OT's Phase II development, OT's open pit production is generating impressive results. Export of copper concentrate exceeded production this year with 94% of total output for 2014 already committed under contract, and some 84% of copper production from OT has now been contracted for 8 years, according to the first quarter report by Turquoise Hill Resources Ltd.
Aspire Mining Limited (AKM:AU) has signed a non-binding memorandum of understanding (MOU) with Sainshand Industrial Complex which is developing the largest industrial park in Mongolia, to potentially provide coking coal from the Ovoot project. Aspire also received several non-binding Expressions of Interest totalling USD 1.3B from a number of financial institutions and the Noble Group for financing of the key Northern Rail Line, which meets the capital expenditure required in the pre-feasibility study completed by SMEC International in April 2013. According to Proactive Investors analysis, binding rail funding and grant of a rail concession would "unlock the economic riches of the Ovoot project and send the Aspire Mining valuation sky-bound".
Whilst Mongolia has had another difficult half year, we are more optimistic than ever that the worst is behind us. The agreements expected from Russia and China as early as August are likely to be a strong positive catalyst to investor sentiment. Investment into the country's Mining Sector will continue to be a key economic growth driver, and we strongly believe that the recent amendments to the Mining Law provide a solid foundation for a rebound in private sector investment.
The masses of investment about to flow to Mongolia from both its Northern and Southern neighbours will have an enormous and irreversible impact on Mongolia's economy as key infrastructure and transport projects develop and the industrial capacity of the country surges. Following the bilateral (or even trilateral) visits in August, we expect the MNT depreciation to be arrested and the trend to sharply reverse as well as renewed interest in Mongolia's comparably low asset valuations to peak.
Mongolia is maturing and undertaking the necessary steps to reinvigorate its economy through prudent policy and legislative progress. Mega industrial and infrastructure projects are planned for the near future and we expect significant investment flows into the economy over the coming months.
Many portfolio companies remain at or near 52 week lows. We strongly believe that Mongolia's fundamentals and the underlying investment thesis remain as strong as ever. The KMEF remains extremely well positioned to leverage on any improvement in the sentiment towards Mongolian assets.
"To buy when others are despondently selling and to sell when others are euphorically buying takes the greatest courage, but provides the greatest profit." Sir John Templeton.
I thank our investors for their continued support and I look forward to updating you further next month.
Asia Coal: Annual Report 2013/2013
July 17, Asia Coal Ltd. (HKEx:835) --
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Coal Mining
SMI LLC ("SMI", a wholly-owned subsidiary of the Company) has received a letter from the Minerals Authority of Mongolia (the "Letter") informing SMI that the mining license number MV-011985 for mining in Saikan Uul (the "License") held by SMI had been revoked. The License was revoked initially on 22nd September 2008 because the relevant annual license fee was paid on 17th September 2008, a few days after the due date of 5th September 2008. However, the License was subsequently restored by an order of the then director of Minerals Authority on 13th November 2008 (the "Restoration Order").
SMI has paid the relevant annual license fee in a timely manner since 2008. The Letter states that the Restoration Order has been invalidated and that the initial decision to revoke the License has been restored.
The Company disputes the revocation of the License and has submitted a formal request to the Office of Government Cabinet of Mongolia and Ministry of Mining of Mongolia and filed an appeal to the court to cancel the decision to revoke the License (the "Appeal"). Up to the date of approval of these consolidated financial statements, no final decision about the Appeal has been received by the Group.
After seeking legal advice, as the ultimate outcome of the Appeal cannot presently be estimated, full impairment loss on the exploration and evaluation asset of approximately HK$115 million was recognised during the year. However, if the Appeal is finally successful and the revocation order is subsequently cancelled, the impairment of exploration and evaluation assets may be reversed in a subsequent period.
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Notes to the Consolidated Financial Statements
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18. EXPLORATION AND EVALUATION ASSETS
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On 25th January 2008, the Company as the purchaser, CEC Resources Limited ("CEC Resources") as the vendor, and China Enterprise Capital Limited as the guarantor entered into a sale and purchase agreement pursuant to which the Company conditionally agreed to acquire from the vendor the entire issued share capital of Giant Field Group Limited ("GF"). Both CEC Resources and China Enterprise Capital Limited were independent third parties of the Company.
…
In addition, the Group's mining rights may be revoked as a result of the enactment of the Mining Prohibition Law (the "MPL") in 2009, details of which are set out in the published consolidated financial statements of the Group for the year ended 31st March 2013. According to the MPL, the affected license holders, including SMI are to be compensated but the details of the compensation are not currently available. Previously, the management believed that the Mongolian government would pay a reasonable compensation to the Group if the licenses were revoked due to the MPL and accordingly the management concluded that there is no further impairment on the mining rights for the year ended 31 March 2013.
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Revocation of mining right license MV-011985
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Haranga Resources: Change of Company Secretary
July 14, Haranga Resources Ltd. (ASX:HAR) --
The Company advises that Mr Scott Funston has resigned as Company Secretary of the Company.
The Company is pleased to announce the appointment of Jack James as Company Secretary of the Company.
Jack James has a Bachelor of Business from the Queensland University of Technology and is a Chartered Accountant. Mr James provides accounting, secretarial and advisory advice to private and public companies, government and other stakeholders. Mr James has over fifteen years' experience in chartered accounting specialising in corporate advisory and reconstruction. Most recently, he held senior roles in Ernst & Young and KordaMentha.
Fragrant Prosperity plans multiple listings
The UK-listed Malaysian gaming firm, Fragrant Prosperity, said it seeks second and third listing in Hong Kong and Australia to fund its Asian gaming business
July 10 (Macau Business Daily) Malaysian gaming firm Fragrant Prosperity PLC (GXG:FPL), which is engaged in the casino business on Jeju Island in South Korea and here, will consider listing in both Hong Kong and Australia, having acquired the Mongolian National Lottery, Hong Kong media reports.
The company held a signing ceremony in Hong Kong on Monday announcing its acquisition of 60 percent for £3 million (HK$39.8 million) in the Singapore-based firm Monvest Group Pte Ltd, which operates the National Lottery of Mongolia.
Monvest, which holds the exclusive brand name of Mongolian National Lottery, won a grant from the Mongolian Ministry of Finance in February last year for a three-year licence extension to run the lottery business.
Fragrant Prosperity said on Monday that it planned a second listing in Australia in early 2015 and a third in Hong Kong by 2016 to fund expansion of its gaming business in Asia.
Speaking to media on Monday, the investment president of Fragrant Prosperity, Mr. Teh Chee Teong, told Hong Kong media that the company was interested in recruiting management and gaming marketing professionals at a salary level "50 percent" higher than that of Hong Kong to develop the Mongolian gaming business.
He also said that the company had an online gambling licence for Costa Rica and "several partnerships" with casinos in Jeju Island, but he did not elaborate upon the company's operation data.
According to Fragrant Prosperity's profile registered with GXG Markets, the company was established specifically to raise funds to take a 70 percent stake in an existing casino operation on Jeju Island. The company was listed in the GXG Markets in London in December last year.
Teh also mentioned to media on Monday that since two months ago his company has been engaged in the junket business in Macau.
Within two years, the company would like to acquire casino projects in Jeju Island for about US$100 million, he said.
MSE at End of June: Top 20 +7.84%, Talkh Chikher +62.5%, Gobi +57%, Telecom Mongolia +44.7%, State Department +40%, Suu +37.5%, TTL +37%, Silicat +21.6% YoY
July 18 (MSE) As of the first half of 2014, the highest point of TOP-20 index was 17153.80 units, the lowest point was 14686.48 units and the average point was 15903.99 units. TOP-20 index has reached to 15488.80 units and increased by 7.84% or 1125.53 units compared to the same period of last year.
The TOP-20 index influenced mostly due to the increase of share prices of JSCs of index basket including "Talkh Chikher" /62.50%/, "Govi" /57.0%/, "Telecom Mongolia" /44.70%/, "Ulsyn Ikh delguur" /40.0%/, "SUU" /37.5%/, "Tavan tolgoi" /37.0%/ and "Silikat" /21.62%/ compared to the same period of last year.
MSE Turnover in First Half ₮12.9 Billion, Market Cap + 9.36% YoY to ₮1.57 Trillion, Top Broker BDSec
July 18 (MSE) As of the first half of 2014, 123 Joint Stock Companies' total of 29.9 million shares were traded through 127 trading sessions with worth of MNT 12.9 billion. Total traded value was increased by MNT 604.8 million or by 4.9% compared to the same period of last year.
Out of 123 traded stocks, share price of 74 JSC increased, 38 decreased and 11 remained at same price compared to the same period of last year and total market capitalization of listed companies reached at 1 trillion 572.3 billion MNT, indicating a increase of 9.36% or MNT 134.6 billion compared to the same period of last year.
MSE Approves Eermel JSC Name Change to Arig Gal JSC
July 9 (MSE) According to Mongolian Stock Exchange Chief Executive Officer's resolution No 101 of Sep 9th 2014 based on clause 50.3, 57 of MSE's "Listing rule" and official request from "EERMEL" JSC, name of "EERMEL" JSC has changed to "ARIG GAL" JSC.
MSE News, July 10: Top 20 +1.37% to 17,085.18, Turnover ₮7.6 Million
Ulaanbaatar, July 10 /MONTSAME/ At the Stock Exchange trades held Thursday, a total of 2,711 shares of 22 JSCs were traded costing MNT seven million 597 thousand and 156.00.
"E-trans logistics" /550 units/, "Remikon" /515 units/, "Hai Bi Oil" /250 units/, "APU" /205 units/ and "Aduunchuluun" /162 units/ were the most actively traded in terms of trading volume, in terms of trading value--"Talkh chikher" (MNT one million 180 thousand and 400), "Bayangol hotel" (MNT one million and 160 thousand), "APU" (MNT 831 thousand and 220), "Darkhan nekhii" (MNT 727 thousand and 260) and "Gobi" (MNT 706 thousand and 360).
The total market capitalization was set at MNT one trillion 751 billion 363 million 938 thousand and 307. The Index of Top-20 JSCs was 17,085.18, increasing by MNT 230.51 or 1.37% against the previous day.
MSE Weekly Review, July 7-10: Top 20 +11.25%, Turnover ₮142.4 Million
Ulaanbaatar, July 13 /MONTSAME/ Four stock trades were held at Mongolia's Stock Exchange July 7-10, 2014.
In overall, 231 thousand and 549 shares were sold of 67 joint-stock companies totalling MNT 142 million 445 thousand and 718.60.
"Remikon" /82 thousand and 315 units/, "Genco tour bureau" /34 thousand and 169 units/, "Khokh gan" /25 thousand and 328 units/, "Hai Bi Oil" /14 thousand and 829 units/ and "Nako tulsh" /11 thousand and 200 units/ were the most actively traded in terms of trading volume.
In terms of trading value--"Tavantolgoi" (MNT 25 million 822 thousand and 240), "APU" (MNT 14 million 267 thousand and 290), "Remikon" /MNT 12 million 518 thousand and 150/, "Sharyn gol" /MNT six million 923 thousand and 170/ and "Makh impex" (MNT six million 546 thousand and 030).
MSE News, July 16: Top 20 +0.44% to 17,160.49, Turnover ₮4.1 Million
Ulaanbaatar, July 16 /MONTSAME/ At the Stock Exchange trades held Wednesday, a total of 12,804 shares of 19 JSCs were traded costing MNT four million 109 thousand and 400.
"Khot Development" /12,000 units/, "Arig Gal" /510 units/, "Darkhan Nekhii" /105 units/, "Aduunchuluun" /101 units/ and "Tavan Tolgoi" /35 units/ were the most actively traded in terms of trading volume, in terms of trading value-"Darkhan Nekhii" (MNT one million 659 thousand), "Arig Gal " (MNT one million and 70 thousand 490), "Khot Development" (MNT 684 thousand), "Tavan Tolgoi" (MNT 196 thousand) and "Aduunchuluun" (MNT 193 thousand and 415).
The total market capitalization was set at MNT one trillion 749 billion 37 million 59 thousand and 897. The Index of Top-20 JSCs was 17,160.49, increasing by 0.44% against the previous day.
MSE News, July 17: Top 20 -4.8% to 16,337.57, Turnover ₮11.2 Million
Ulaanbaatar, July 17 /MONTSAME/ At the Stock Exchange trades held Thursday, a total of 3,360 shares of 17 JSCs were traded costing MNT 11 million 227 thousand and 557.00.
"E-trans logistics" /1,490 units/, "Baganuur" /580 units/, "APU" /501 units/, "Arig gal" /196 units/ and "Mongol savkhi" /150 units/ were the most actively traded in terms of trading volume, in terms of trading value--"Bayangol hotel" (MNT four million and 350 thousand), "Baganuur" (MNT two million and 494 thousand), "APU" (MNT two million 003 thousand and 901), "Shivee ovoo" (MNT 744 thousand) and "Gobi" (MNT 554 thousand and 200).
The total market capitalization was set at MNT one trillion 685 billion 050 million 654 thousand and 672. The Index of Top-20 JSCs was 16,337.57, decreasing by MNT 882.92 or 4.80% against the previous day.
MSE News, July 18: Top 20 -0.3% to 16,288.54, Turnover ₮5 Million
Ulaanbaatar, July 18 /MONTSAME/ At the Stock Exchange trades held Friday, a total of 6,076 shares of 24 JSCs were traded costing MNT five million 014 thousand and 051.00.
"Genco tour bureau" /4,017 units/, "Remikon" /444 units/, "State Department Store" /299 units/, "Khishig Uul" /250 units/ and "Sharyn gol" /242 units/ were the most actively traded in terms of trading volume, in terms of trading value--"Sharyn gol" (MNT one million 702 thousand and 400), "UB-BUK" (MNT one million 440 thousand and 040), "Genco tour bureau" (MNT 349 thousand and 479), "Khishig Uul" (MNT 250 thousand and 030) and "Tavantolgoi" (MNT 218 thousand).
The total market capitalization was set at MNT one trillion 685 billion 533 million 310 thousand and 263. The Index of Top-20 JSCs was 16,288.54, decreasing by MNT 49.03 or 0.30% against the previous day.
FRC Approves Tender Offer by Majority Holders to Delist Dornod Khuns JSC
July 18 (MSE) Financial Regulatory Committee /FRC/ has approved an offer to buy 169,331 shares equal to 43.56 percent of 'Dornod khuns' / MSE : DHS / JSC for not less than MNT 563 /five hundred sixty three/ per share, made by G.Tsetsegsaikhan, B.Ganzorig, and N.Solongo related parties that currently hold total of 388,719 shares or 56.44 percent of the company. According to FRC's resolution, the offer is valid for 60 business days beginning July 9, 2014.
MSE Approves Transfer of Suu JSC State-Owned Shares to Private Investor
July 18 (MSE) Listing inspection report was made based on clause No.57 of MSE's Listing Rules, Capital Privatization Commission's resolution No.55 of Dec 14th 2007 and "SUU" (MSE:SUU) JSC's request of May 27th 2014, respectively. According to MSE Chief Executive Officer's resolution No.94 of 24th June 2014, "SUU" JSC's state owned total of 175,440 shares were transferred to private investor.
NOTICE TO EXERCISE PRE-EMPTIVE RIGHTS TO ACQUIRE ADDITIONAL SHARES IN BDSEC JSC
July 17 (BDSec) The Financial regulatory commission of Mongolia approved the rights issue of BDSec JSC through its regular meeting on 7 July, 2014.
Please see the below notice on exercise of the pre-emptive rights.
· Issuer: BDSec JSC, Mongolian stock exchange member and brokerage & investment banking
· Shares outstanding: 11,000,000
· The rights issue size: 35.29% of the company
· Pre-emptive right exercising price: MNT 1,931 per share
· Record date for exercising the rights: 03 March, 2014
· Number of shares to be acquired: the same proportion as ownership (or approx. 54.55% of any shareholder's position in the company)
· Date of approval: 07 July, 2014
· End of the rights exercise period: 26 August, 2014.
Please feel free to contact your broker if you want to exercise your rights.
For more information contact us at:
Head of investment banking – shinee@bdsec.mn
Institutional sales – traders@bdsec.mn
APS Stock Recommendation: Remicon JSC - BUY
July 17 (Asia Pacific Securities) --
Executive Summary
Remicon ("MSE:RMC") has been established in January 2008 as a joint stock company and listed on Mongolian Stock Exchange in May 2008. Their core operation is concrete mixing factory as well as renting heavy lorries. Remicon was the first company that started to supply ready to use concrete mix in Mongolia. Today they can produce 25,200m3 concrete mixes per month and by seasonal demand the annual supply increases up to 151,200-200,000m3.
Most of their supply goes to the companies that build road, bridge, buildings and apartments. The raw materials of Remicon's concrete mix are cement, sand, rock, gypsum, special ashes, iron, and limestone. In 2013, they have received most of the raw materials from Chinese companies, but according to the CEO's statement, they have created partnership with Khutul cement plant and other domestic suppliers. Thus this year, they are working to reduce the cost of goods sold (COGS).
Remicon's has appointed Tsognemekh. G as their new CEO in 2013 and he will concentrate on working extensively on developing the corporate governance of Remicon. The company has been supplying their financial and other important information to the shareholders and brokerage firms' in timely manner.
Ownership
· 67.17% or 52,849,111 of the shares are held by 4 entities. The remaining 32.83% (25,830,353) are held by 1346 small shareholders.
· Remicon JSC is the subsidiary company of Hera Holding LLC and the CEO of the parent company, Gankhuyag Kh who owns 45.05%.
· Frontier LLC, the investment bank holds 10.04%
· The parent company Hera Holding owns 7.06%
· Cayman Islands registered company the Impera Mongolia Holding LLC has 5.02%
Financial Review
At the end of 2013, RMC's revenue reached MNT 15,769.1 million, which was a 18.1% decrease from previous year. The company defines that this decline came from the disequilibrium of supply and demand and the government interventions. Moreover, APS thinks that there were certain macroeconomic factors impact as well; i.e. economic growth slowdown, decline in foreign direct investment and increase in balance of payment deficit.
COGS to revenue ratios have increased from 64.98% to 69.43% in 2013 and operating expenses remained same. Thus there was significant decrease on net profit, as it only reached MNT 20 million.
Therefore, the company is working to bring down the unit COGS from MNT 101,100 to MNT 83,400 per m3concrete mix. Moreover, CEO Tsognemekh reported that they have made agreements with major project developing companies to supply concrete mix. For instance, they are going to supply the concrete to Buyant Ukhaa 2 project, and it will certainly help to bring the value.
Business Development
On October 2013, the company has finished the construction of factory's secondary line; and now both factories can produce at least M500 grade concrete. Furthermore, they have received ISO 9001:2008 certificates from International Organization for Standardization as well as ASTM certificate from ASTM international in June. These certificates represent the quality of the products is qualifying the international standards and can compete with foreign competitors.
Also they have received the shotcrete machine recently, which is spraying concrete. Shotcrete helps to cover relatively complicated surfaces and bring same result as normal concrete mix.
They are planning to do several works to develop its business in 2014, such as decreasing the COGS, increasing clients, increasing gross margin etc. The company is starting to apply the strategy to attract both the big and retail consumers. Therefore, they are proposing the "discount policy" to increase the customers number to 400 from 125 and concrete sales up to 130,000 m3.
Share Price Performance
Remicon is a component of the MSE's benchmark Top-20 index. The historical minimum price of the stock was MNT 39 and the maximum was MNT 228, which was recorded on July 31, 2011. The 52 week range standard deviation of the stock is 11.48.
Asia Pacific Securities Recommendation
Asia Pacific Securities currently rates as "BUY" the Remicon's stock. Currently it's fluctuates at 150, but is derived from the macroeconomic factors. Even though the number of competitors is increasing, the customers are loyal to the Remicon. One of the big reasons behind it is the quality of the products.
Remicon's beta is 0.23, which means weakly correlated with the market. There was strong advance seen on MSE Top 20 index last week, and it could slightly affect the shareholders behavior and push the price upward.
Main risks are lies on the supplier raw material sometimes disrupts, price is high, customers cash flow is low, hence sometimes does the business with barter, and government intervention is high.
Currently the stock price is undervalued by the market; APS values it at MNT 179, or 19.33% above the market price. The valuation is based on WACC of 9.60%, 8.01% of terminal growth rate, and a regression analysis correlation of 0.80%.
MIBG CEO: SOEs should be privatized and listed on stock markets
July 18 (UB Post) Executive Director of Mongolian Investment Banking Group A.Bilguun talks about the current economic situation. He is an experienced specialist who graduated in finance from Saint Mary's University, Canada, and worked at the Toronto Stock Exchange.
When economic policies are intensified in September, how do you envision changes in the current economic crisis?
We need to review our economic structure. Mongolia exports natural minerals to build up the majority of the state budget. Direct foreign investments are the biggest doors for bringing in funds to Mongolia. It's beneficial for us to have foreign companies invest in major domestic projects, meaning that they'll be responsible for financial risks. In the current economic situation, it's impossible for Mongolia to monitor and regulate prices in international markets. Therefore, we must attract foreign investors, find funding for our own businesses, and export risks. In order to increase investments, at least the issues related to the 106 mining licenses, the Law on Minerals, and Oyu Tolgoi's (OT) investment should be resolved. Although the Mineral Law was approved, its regulations haven't been established. As for OT, financial issues regarding the underground mines are still unclear and creating more and more problems with each passing day. This also means that investments in Mongolia are moving further away.
The main reason for stocks dropping is the announcement by the General Department of Taxation stating that OT has tax debts on the project. The feasibility study and financial issues of the underground mines, which are to be defined in September, may be delayed. This situation weakens international investors' trust and confidence in Mongolia. The two sides, investors and the Mongolian government, keep on bringing up twenty-something questions, and instead of resolving them, they accuse one another and add more issues. This not only makes investors who wanted to invest in OT lose interest, but also degrades Mongolia's reputation in international markets. This problem must be resolved urgently and put to one side.
You mentioned that the feasibility study and financial issues of OT, the only hope for getting USD into the economy, may be decided in September. However, the investors' side and the Mongolian government aren't able to resolve the issue and are instead increasing the number of issues. Can you elaborate on this?
The Mongolian government and investor, Turquoise Hill Resources, should define the issue specifically and openly announce them to the public, as well as investors. If not, the two sides will have tons of issues in front of them and continue the dispute into next year. Investors and banking and finance companies in other countries are assuming that all of this is the Mongolian government's fault.
In order to fix and correct the economic crisis, the government is taking measures such as giving concessional loans and tax exemptions in specific sectors. In reality, the experts are saying that it's worsening. As a representative of the private sector, in order to calm the economic crisis, what countermeasures should the government take within a short period of time?
The attempts of the government to overcome the economic crisis are failing and making the situation even worse. They issued a huge amount of loans and cash to the construction sector, which increased deficit loan amounts in the banking sector, increased financial risks, and raised apartment prices. Furthermore, under the program to stabilize prices, a large sum of cash was supplied to the economy and became the main aspect of rising inflation. Now, the government should stop this work to supply cash, privatize large, corrupted state-owned companies which are working inefficiently through the domestic stock exchange, and then, prepare them for IPOs in international markets.
The World Bank highlighted in their economic outlook that the high index of balance of payment deficit indicates future major economic difficulty. How can the balance of payment deficit be reduced?
The Central Bank needs to implement a hard money policy. In simple terms, the balance of payment deficit is the money which comes in and goes out of Mongolia. People who come to live and work in Mongolia from overseas carry a considerable amount of risk in coming to Mongolia, and so they get higher salaries. The same applies to investors. Investors have interests in making a lot of profit in exchange for taking up a significant amount of risk when providing funds. During this period of slow economic growth in Mongolia, opportunities to make a profit are decreasing. Businesses and investors are taking this into account and taking actions accordingly. People considering starting a business in the country will only think of saving and protecting their own money in this high risk environment. A certain amount of money has left Mongolia in this manner. It's required for the Central Bank to increase policy development.
Since the Mongolian economy has degraded so much, it's impossible to hold soft policies. Only when the economy has fallen to a certain degree, can it be stabilized with soft policies. However, the current situation is really at a level where soft policies will not work.
The currency savings deposit takes up a considerable percentage of the Mongolian savings deposit. Experts say that there are many people who aren't putting their money in circulation due to fear. In order to get them to put it into circulation, what must be done?
Money will be put into circulation only if the MNT is strengthened. Since 2012, everything was done forcefully. There haven't been any results. Instead of doing things forcefully, we should resolve the problem through negotiation. The Central Bank should think of implementing policies to strengthen the MNT.
Mongolia used to use direct foreign investments to close off the balance of payment deficit. Now that investments have decreased, we're starting to approach foreign exchange (FX) reserves. Through this, FX reserves were reduced by some 50 percent and the USD exchange rate became just over 1,800 MNT. What kind of real risks will this pose to the Mongolian economy?
According to a June 16 report by Morgan Stanley, a multinational financial services corporation, "Mongolia's FX reserves reached 1.7 billion USD by the end of April. However, Mongolia's FX reserves were at nearly 2.2 billion USD at the end of February, according to Mongol Bank. If the FX reserves stay in decline for a few more months, Mongolia will come closer to the two-month import cover, the same point where Mongolia received International Monetary Fund assistance in 2009."
This report was made after comparing FX reserves with GDP. The USD exchange rate may get intense again, since during the summer exploration work and the amount of exportation products increases and brings in the most USD into Mongolia. However, the USD exchange rate isn't dropping from 1,800 MNT. It's certain that the exchange rate will become even tighter in September and October, when students go back to school.
Mongolia announced it will increase its GDP by 70, later by 90 percent. Also, it will build up funds from international markets and then get loans. Objectively, is this possible? Is there any other way Mongolia can accumulate funds?
There are other ways. Getting a loan isn't a difficult decision. There are many gateways. For instance, decrease inefficient spending and the huge structure of state-owned organizations, where 50 percent of total resources produced in Mongolia are spent. If the structure becomes compact, a lot of money can be saved. Before anything, we must cut down on spending. We could also put up stocks of state-owned companies in the domestic stock exchange. There may be foreign companies willing to carry these risks and invest. It's crucial to find and utilize these opportunities. For Mongolia, where revenue is inconsistent and dependent on the price of minerals, getting loans and debts isn't a wise choice. There are countries like Japan and the USA which have more debt than its GDP. These countries are able to produce and manufacture final products within the country and export them. Their future profit is definite so their credit rating is high. For Mongolia, with the current economy, getting a loan is the worst possible option; a dead-end option.
Mongolia wants to put up its companies on domestic and foreign stock markets. Do the Mongolian Stock Exchange and companies have the capacity for it?
Actually, Mongolian stock market structure isn't that bad, but since there aren't any investors in the stock exchange, products are spoiling. Now we should select two to three state-owned companies announce them internationally and apply for an IPO. It's a much wiser step than getting a loan. When companies get an IPO, they'll get funds and supervision as well as transparency in governance, which will reduce deficits and assist them in working efficiently.
Source: Undesnii Shuudan
Moody's downgrades Mongolia's sovereign, DBM rating to B2; outlook remains negative
NOTE: On July 17, 2014, following initial publication, the press release was corrected as follows: In the first sentence of the second paragraph, "senior unsecured" was added to describe the rating. Revised release follows.
Singapore, July 17, 2014 -- Moody's Investors Service has downgraded Mongolia's foreign currency government bond rating to B2 from B1. The outlook remains negative. Concurrently, the government's issuer rating has been downgraded to B2. Mongolia's senior unsecured rating has been lowered to B2 and the government's senior unsecured MTN rating to (P)B2. The issuer's short-term rating remains at Not Prime.
In a related rating action, Moody's has downgraded the senior unsecured rating of the government-owned Development Bank of Mongolia LLC (DBM) to B2 from B1. The outlook remains negative. DBM's senior unsecured rating has been lowered to B2 and its senior unsecured MTN rating to (P)B2. Since DBM's payment obligations carry a credit guarantee of the Government of Mongolia, its debt obligations justify a rating at the same level.
The long-term local currency country risk ceiling remains unchanged at Ba3. The long-term foreign currency deposit ceiling is revised to B3 from B2, while the foreign currency bond ceiling has been revised to B1 from Ba3. All short-term ceilings remain at Not Prime. These ceilings act as a cap on ratings that can be assigned to the foreign- and local-currency obligations of entities domiciled in the country.
RATINGS RATIONALE
Moody's decision to downgrade Mongolia is driven by the country's strained external liquidity position, as reflected by a sharp loss in foreign-exchange reserves. Expansionary monetary and fiscal policies have added to demand pressures, fueled inflation, and heightened spillover risks to the banking system and the balance of payments. Accompanied by a continued rise in the external debt burden, these factors increase the country's vulnerability to external and domestic shocks relative to rating peers.
First driver -- A sharp deterioration in the external liquidity position
Total foreign reserves have fallen rapidly, to $1.6 billion in May 2014 from $2.2 billion at the start of the year, in spite of a narrowing current-account deficit. The sharp pace of deterioration comes as foreign direct investment (FDI) has more than halved from levels last year. Expansionary policies have fueled demand for imports, adding further pressure to the external reserve position. Reserves would most likely be lower, were it not for the Bank of Mongolia drawing down on a bilateral swap facility with the People's Bank of China.
The investment regime remains unpredictable, suggesting that FDI will remain subdued at least over this year. Further ahead, instability in the investment regime threatens to dampen the development of the mining sector. This would have negative consequences on Mongolia's ability to ramp up foreign-exchange export earnings to repay its external debt. We expect reserves to remain weak this year, significantly increasing Mongolia's external vulnerabilities.
Mongolia's rising external debt repayment burden is compounded by the decline of official foreign-exchange reserves to a low level. The development of Mongolia's mineral resources will play an increasingly important role in this context. Moody's External Vulnerability Indicator -- which gauges the adequacy of reserves with respect to maturing external debt obligations over the next year -- has risen to an estimated 130% in 2014 and will increase further to 196% in 2015, significantly above a prudent 100% threshold for systems that are heavily dependent on foreign creditors.
Second driver -- Expansionary policy stance
The central bank's pursuit of expansionary monetary policies since 2013, including liquidity injections to banks, low-cost mortgage loans, and support to the construction and real estate sectors, has boosted demand. Although it is gradually withdrawing some programs, inflationary pressures continue to build, while credit is still growing at a rapid pace. This increases pressure on the balance of payments, raising the risk of capital flight, and further weakens the external payments position. Given regulatory forbearance in the provision of credit and weakening asset quality, there could also be spillover risks for the banking system.
Expansionary monetary policies are accompanied by off-budget spending and investment that circumvent fiscal responsibility legislation and are resulting in a buildup in government liabilities.
RATIONALE FOR MAINTAINING THE NEGATIVE OUTLOOK
The negative outlook reflects the risk of: (1) a continuing decline in foreign-exchange reserves that increases Mongolia's vulnerability to external shocks, (2) continued rapid credit growth and persistent inflationary pressures, and (3) sustained fiscal imbalances over the near term through large off-budget spending that would result in a deterioration in debt metrics.
WHAT COULD CHANGE THE RATING -- UP/DOWN
Key factors that could prompt an upward movement in the rating include: (1) greater price and exchange rate stability, (2) a replenishment of official foreign-exchange reserves, (3) a track record of adherence to the fiscal rule, and (4) steady mineral resource development under a stable and predictable investment regime that would improve the country's long-term fiscal and economic prospects.
Triggers for a downward movement in the rating include: (1) a continuation of expansionary monetary policies that would result in the persistence of high loan growth and inflationary pressures, (2) a lack of adherence to fiscal responsibility legislation, and (3) the persistence of unpredictable foreign investment policies that constrain the development of the mineral export sector and strain the official international reserve position.
· GDP per capita (PPP basis, US$): 5,885 (2013 Actual) (also known as Per Capita Income)
· Real GDP growth (% change): 11.7% (2013 Actual) (also known as GDP Growth)
· Inflation Rate (CPI, % change Dec/Dec): 12.3% (2013 Actual)
· Gen. Gov. Financial Balance/GDP: -1.4% (2013 Actual) (also known as Fiscal Balance)
· Current Account Balance/GDP: -26.5% (2013 Actual) (also known as External Balance)
· External debt/GDP: 157.7% (2013 Actual)
· Level of economic development: Low level of economic resilience
· Default history: At least one default event (on bonds and/or loans) has been recorded since 1983.
On 14 July 2014, a rating committee was called to discuss the rating of the Mongolia, Government of. The main points raised during the discussion were: The issuer has become increasingly susceptible to event risks.
The principal methodology used in these ratings was Sovereign Bond Ratings published in September 2013. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.
The weighting of all rating factors is described in the methodology used in this rating action, if applicable.
Mongolia Bonds a Buy for ING After Moody's Cut Spurs Drop
By Lilian Karunungan
July 18 (Bloomberg) Mongolia's dollar bonds dropped the most in a week after Moody's Investors Service cut the nation's credit rating, a decline that prompted ING Groep NV to recommend buying the securities.
The yield on the government's 5.125 percent notes due December 2022 rose 12 basis points to 7.93 percent as of 1:28 p.m. in Hong Kong, according to data compiled by Bloomberg. The premium investors demand to hold the Asian nation's debt over similar-maturity Treasuries has widened 57 basis points this month to 534, the biggest gap since April. Mongolia's currency, the tugrik, fell as much as 0.3 percent to a record 1,841 per dollar today.
Moody's lowered the rating yesterday by one step to B2, five levels below investment grade, citing a sharp drop in foreign reserves and expansionary polices that have fueled inflation. Reserves fell to $1.6 billion in May from $2.2 billion at the start of the year, the ratings company said. The decline reflected the drawdown of proceeds from Development Bank of Mongolia's international bond sales and has nearly run its course, said Tim Condon, the Singapore-based head of Asian research at ING.
"We think $1.5 billion will be the floor" for the reserves, he said in a phone interview. "Mongolia will also benefit from improved sentiment toward China" as the mainland is the destination of 90 percent of its exports, he said.
Second Downgrade
China is the world's second-biggest economy and reported this week a 7.5 percent increase in gross domestic product for the April-June period, more than the 7.4 percent gain predicted by economists in a Bloomberg survey. Citigroup Inc. and JPMorgan Chase & Co. were among banks that boosted their 2014 growth projections for China following the data.
Mongolia's dollar notes handed investors a return of 5.5 percent this year, the fifth-lowest among 12 regional debt indexes compiled by HSBC Holdings Plc.
Moody's is the second rating company to downgrade Mongolia this year after Standard & Poor's lowered its assessment on April 29 to B+ from BB-, or four levels below investment grade. Fitch Ratings, which ranks Mongolia at B+, warned on July 8 on the growing economic and financial risk in Mongolia due to the decline in reserves, which provide only 1.8 months of external payment coverage.
Mineral-rich Mongolia is seeking to boost the economy after almost two years of declining foreign direct investment, including a 52 percent slump last year and 64 percent in the first five months of 2014. Mining disputes, including a high-profile spat with the Rio Tinto Group over the Oyu Tolgoi copper and gold mine it shares with the government, have chilled foreign interest in the sector.
Action Plan
Prime Minister Altankhuyag Norov unveiled in April a stimulus bill, dubbed a"100-day action plan" to promote investment and cut imports. Since then Mongolia's parliament has approved changes to the nation's 2006 Minerals Law and passed a new law on energy to help expand the sector.
The authorities "have been trying to do what they can to prop up growth with the Development Bank of Mongolia spending, hoping there will be a revival of FDI," Condon said. "They view the reserve loss as something that's fully within their control. The other thing they can do concretely is try and improve the environment for other foreign investors to come to Mongolia."
As recently as 2011, Mongolia's 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.
Moody's Downgrades Mongolia Sending Its Currency to Record Low
By Boby Michael
July 17 (International Business Times) Moody's has cut Mongolia's foreign currency bond rating, citing the country's strained external liquidity position and saying that foreign exchange reserves would further deplete unless the country takes help from its big neighbour China.
The Mongolian tughrik, which has been on a declining trend since 2011, has touched a new record low of 1840 against the US dollar following the rating action.
The tughrik has fallen more than 10% so far this year and weakened more than 35% since April 2011, indicating the severity of the foreign exchange crisis Mongolia is facing. See the chart below.
The foreign currency government bond rating has been downgraded to B2 from B1 with outlook negative. The government's issuer rating as well as senior unsecured rating have also been downgraded to B2.
Moody's has also downgraded the rating of the government-owned Development Bank of Mongolia to B2 from B1 with outlook remaining negative.
"Reserves would most likely be lower, were it not for the Bank of Mongolia drawing down on a bilateral swap facility with the People's Bank of China," the statement showed.
Expansionary monetary and fiscal policies have added to demand pressures, fuelled inflation, and heightened spillover risks to the banking system and the balance of payments, the rating agency said.
Liquidity Position
Mongolia's total foreign reserves have fallen rapidly, to $1.6bn in May 2014 from $2.2bn at the start of the year, in spite of a narrowing current-account deficit, Moody's said.
The rating agency notes that the sharp pace of deterioration comes as foreign direct investment (FDI) has more than halved from levels last year.
"The investment regime remains unpredictable, suggesting that FDI will remain subdued at least over this year. Further ahead, instability in the investment regime threatens to dampen the development of the mining sector."
External Debt
Mongolia's rising external debt repayment burden was compounded by the decline of official foreign-exchange reserves to a low level. The development of Mongolia's mineral resources will play an increasingly important role in this context.
Moody's External Vulnerability Indicator — which gauges the adequacy of reserves with respect to maturing external debt obligations over the next year — has risen to an estimated 130% in 2014 and will increase further to 196% in 2015, significantly above a prudent 100% threshold for systems that are heavily dependent on foreign creditors, the rating agency said.
Expansionary Policies
The central bank's pursuit of expansionary monetary policies since 2013, including liquidity injections to banks, low-cost mortgage loans, and support to the construction and real estate sectors, has boosted demand, Moody's said.
Inflationary pressures continue to build in the country, while credit is still growing at a rapid pace, the rating agency said.
"This increases pressure on the balance of payments, raising the risk of capital flight, and further weakens the external payments position. Given regulatory forbearance in the provision of credit and weakening asset quality, there could also be spillover risks for the banking system."
BoM MNT Rates: Friday, July 18 Close
| 7/18 | 7/17 | 7/16 | 7/10 | 7/9 |
USD | 1,841.93 | 1,840.25 | 1,836.95 | 1,838.54 | 1,834.71 |
EUR | 2,492.32 | 2,490.50 | 2,489.99 | 2,506.67 | 2,497.87 |
CNY | 296.98 | 296.72 | 296.07 | 296.67 | 296.08 |
GBP | 3,150.25 | 3,148.39 | 3,149.45 | 3,149.05 | 3,139.65 |
RUB | 52.46 | 52.82 | 53.48 | 54.27 | 53.83 |
July MNT vs USD, CNY Chart:
June Mongolia CPI +14.6% YoY, +6.7% YTD
July 18 (Bank of Mongolia) --
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Copper Exports +143.9%, Crude Oil +58.2% in First Half by Value, Hard Coal -17.4%, Iron Ore -40.7%
July 10 (NSO) --
Link to download page (click Bulleting on left panel)
BoM FX auction: US$15m sold at ₮1,841.22, CNY70.5m at ₮297, accepts $57m swap bid, $60m ask offers
July 17 (Bank of Mongolia) On the Foreign Exchange Auction held on July 17th, 2014 the BOM has received bid offer of USD and CNY from local commercial banks. The BOM has sold 15.0 million USD as closing rate of MNT 1841.22 and 70.5 million CNY as closing rate of MNT 297.00.
On June 17th, 2014, The BOM has received MNT Swap agreement bid offer in equivalent to 57.0 million USD and USD Swap agreement ask offer of 60.0 million USD from local commercial banks and accepted all offer.
See also:
BoM issues ₮137.7 billion 1-week bills, total outstanding -2.6% to ₮570.3 billion
July 18 (Bank of Mongolia) BoM issues 1 week bills worth MNT 137.7 billion at a weighted interest rate of 10.5 percent per annum /For previous auctions click here/
BoM: CONSOLIDATED BALANCE SHEET OF BANKS, June 2014
July 18 (Bank of Mongolia) --
/In million of togrogs/
Assets | 6/30/2013 | 12/31/2013 | 4/30/2014 | 5/31/2014 | 6/30/2014 |
Bank reservers | 2,911,060.1 | 2,769,813.1 | 2,007,403.1 | 2,411,843.2 | 2,311,039.5 |
Central bank bills | 668,437.7 | 1,626,606.3 | 1,439,480.3 | 926,134.0 | 853,934.4 |
Foreign assets | 685,121.1 | 812,646.8 | 1,027,911.7 | 987,296.8 | 910,633.4 |
Government securities | 1,273,100.9 | 1,778,007.7 | 2,118,160.6 | 2,196,301.7 | 2,210,502.0 |
Other securities | 341,306.1 | 471,105.7 | 242,446.5 | 234,201.6 | 230,912.5 |
Loans | 8,553,473.8 | 10,715,632.7 | 11,689,209.3 | 12,004,820.4 | 12,241,976.4 |
In domestic currency | 6,009,812.4 | 7,785,230.7 | 8,469,000.4 | 8,766,950.5 | 9,043,932.5 |
In foreign currency | 2,543,661.5 | 2,930,402.0 | 3,220,208.9 | 3,237,870.0 | 3,198,043.9 |
Non-performing loans | 315,255.8 | 564,260.4 | 614,610.9 | 618,124.3 | 565,318.2 |
Total Assets | 15,940,911.1 | 20,883,711.1 | 21,213,291.1 | 21,159,590.8 | 21,419,492.4 |
Liabilities | 6/30/2013 | 12/31/2013 | 4/30/2014 | 5/31/2014 | 6/30/2014 |
Current Accounts | 2,362,689.2 | 2,485,412.5 | 2,419,182.5 | 2,506,528.2 | 2,396,081.6 |
In domestic currency | 1,426,471.5 | 1,511,167.7 | 1,254,333.7 | 1,230,137.7 | 1,290,984.1 |
In foreign currency | 936,217.8 | 974,244.7 | 1,164,848.8 | 1,276,390.6 | 1,105,097.5 |
Deposits | 5,012,387.9 | 6,355,003.8 | 7,160,275.5 | 7,093,342.2 | 7,095,349.9 |
In domestic currency | 3,921,529.4 | 4,892,672.6 | 5,713,450.6 | 5,695,818.7 | 5,654,197.5 |
In foreign currency | 1,090,395.8 | 1,461,719.2 | 1,444,920.7 | 1,395,587.5 | 1,439,601.2 |
Foreign liabilities | 1,535,263.0 | 1,654,551.7 | 2,049,302.6 | 2,085,749.7 | 2,048,487.8 |
Government deposits | 1,100,825.7 | 1,186,170.0 | 1,656,528.8 | 1,671,874.2 | 1,680,166.3 |
Capital | 1,140,178.34 | 1,381,214.72 | 1,600,981.97 | 1,621,469.49 | 1,793,894.73 |
Profit/loss of current year | 98,052.6 | 229,741.1 | 85,614.7 | 111,871.7 | 283,827.0 |
Money Supply (M2) +27.6% YoY, Loans Outstanding +42.9% to ₮12.3 Trillion, NPLs +79% to ₮0.57 Trillion
Ulaanbaatar, July 14 (MONTSAME) The Bank of Mongolia (BoM) has reported that money supply (broad money or M2) at the end of June 2014 reached to MNT 102,11.2 billion, declining MNT 29.3 billion or 0.3% the previous month, and increased MNT 2207.4 billion or 27.6% against the previous year.
In the first half of this year, currency issued in circulation reached MNT 860.0 billion, decreasing MNT 2.9 billion or 0.3% against the previous month and increased MNT 24.2 billion or 3.0% over the same period of the previous year.
Loans outstanding at the end of June 2014 amounted to MNT 12,302.1 billion, increasing MNT 237.2 billion or 2.0% against the previous month and MNT 3,693.8 billion or 42.9% against the previous year.
Principals in arrears at the end of June 2014 reached MNT 438.3 billion, increasing MNT 57.0 billion or 15.0% against the previous month and MNT 288.5 billion or 2.9 times against the previous year.
At the end of June 2014, the non-performing loans over the bank system reached MNT 567.0 billion, increasing MNT 52.8 billion or 8.5% against the previous month and MNT 250.1 billion or 79.0% against the previous year.
In the first six months of 2014, 30.1 million shares were traded valued at MNT 133.9 billion at the stock market.
Link to BoM Monthly Statistical Bulletin, June 2014
GoM Bond Auction: Announced ₮10 Billion 3-Year Bills Not Sold Due to Lack of Bids
July 16 (Bank of Mongolia) Auction for 3-year-Government Bond was announced at face value of 10 billion MNT and each unit was worth 1 million MNT. Although 1.5 billion MNT in non-competitive bid was received, Government Bond was not sold due to absence of competitive bids.
GoM Treasury Auction: ₮8 Billion Out of Announced ₮20 Billion 52-Week Bills Sold at Average 12% Yield
July 16 (Bank of Mongolia) Auction for 52 weeks maturity Government Treasury bill was announced at face value of 20.0 billion MNT. Face value of 8.0 billion /out of 8.0 billion bid/ Government Treasury bill was sold at discounted price and with weighted average yield of 12.000%.
8% Mortgage Program Update: ₮537 Billion Refinanced, ₮1.2 Trillion Newly Issued
July 17 (Cover Mongolia) As of July 17, ₮537 billion (₮534.2 billion as of June 27) existing mortgages of 18,511 citizens (18,472 as of June 27) were refinanced at 8% out of ₮852.7 billion (₮850.6 billion as of June 27) worth requests.
Also, ₮1,195.4 billion (₮1,166.3 billion as of June 27) new mortgages of 20,553 citizens (20,734 citizens as of June 27) were issued at new rates out of ₮1.2 trillion (₮1.1 trillion as of June 27) worth requests.
Link to release (in Mongolian)
BoM releases survey results on overseas travel expenditures of Mongolians
July 18 (UB Post) The Central Bank of Mongolia, Mongolian National Tourism Center and Ulaanbaatar City Tourism Department have completed and released the "Study on Foreign Trip Spending Report of Mongolians" with statistics covering the first half of 2014.
The study was conducted as part of a project to improve the quality of data about Mongolians' average spending on trips abroad, and currency outflow to foreign markets for travel purposes in Mongolia's balance of payments statistics.
Officials carefully calculated spending, considering what country Mongolians traveled to and the duration of trips to produce realistic and precise results, according to those who conducted the study.
The average spending of Mongolians traveling abroad was 1,622 USD, which is three times higher than average spending recorded in 2005, though expenses varied depending on destinations and the duration of trips.
More than 80 percent of Mongolian travelers planned and managed their trips themselves and paid cash. The study also showed that 30 percent of their spending was on shopping, while the highest percentage of their budget was spent on international transportation services.
In terms of Mongolians' main purpose for travel, 44 percent of Mongolians traveled abroad for tourism, 32 percent for business or official appointments, 12 percent for medical services, seven percent for education, while five percent went abroad for work.
Link to BoM survey (in Mongolian)
China's Economic Expansion Accelerates to 7.5%
July 16 (Bloomberg) China's economic growth accelerated for the first time in three quarters after the government sped up spending and freed up more money for loans to counter a property slump.
Gross domestic product rose 7.5 percent in the April-June period from a year earlier, the statistics bureau said today in Beijing, compared with the 7.4 percent median estimate in a Bloomberg News survey of analysts. June industrial production and first-half fixed-asset investment exceeded projections.
Premier Li Keqiang's government has brought forward railway spending, reduced reserve requirements for some lenders and cut taxes to protect an annual growth goal of about 7.5 percent that's under threat from a plunge in property construction and weaker home-price gains. Even with the support, analysts have forecast China is headed for the slowest full-year expansion since 1990.
"The data are quite positive," said Zhu Haibin, chief China economist at JPMorgan Chase & Co. in Hong Kong. "The government will continue to support the key sectors it is supporting now but will not expand to sectors they are not encouraging."
Industrial production rose 9.2 percent in June from a year earlier, topping the 9 percent median estimate of analysts and 8.8 percent in May. Retail sales increased 12.4 percent from a year earlier, compared with the 12.5 percent median estimate.
Fixed-asset investment excluding rural households increased 17.3 percent in the first half from a year earlier, the statistics bureau said. That compared with the median estimate of analysts for 17.2 percent growth, also the pace in the January-May period.
Stock Markets
The benchmark Shanghai Composite Index (SHCOMP) of stocks was little changed at 1:10 p.m. local time, and the MSCI Asia Pacific Index fell 0.1 percent.
The world's second-largest economy grew a seasonally-adjusted 2 percent last quarter from the previous period, the statistics bureau said today, compared with the 1.8 percent median estimate of analysts and a revised 1.5 percent in the first quarter. That implies 8.2 percent growth on an annualized basis, up from 6.1 percent in January-to-March, according to data compiled by Bloomberg.
Australia & New Zealand Banking Group Ltd. economists raised their 2014 growth forecast to 7.5 percent from 7.2 percent, saying fixed-asset investment gains are likely to accelerate to 18 percent in the second half.
Commodity Inventories
"Further monetary policy easing across the board will be needed to reduce the downside risks facing the economy and help the Chinese authorities to deliver the 7.5 percent growth target," Liu Li-Gang, ANZ's chief Greater China economist in Hong Kong, said in a report. High inventories of commodities including imported iron ore indicate risks to growth, Liu wrote.
Local governments are starting to ease curbs on home buying to sustain the property industry. Hohhot, capital of Inner Mongolia province, became the first city to scrap home-purchase restrictions last month, followed by the eastern city of Jinan this month.
The value of home sales rose 33 percent in June from May as price cuts by developers lured buyers, based on the difference between the statistics bureau's data for the first half and the first five months of the year. The value of sales in the first six months fell 9.2 percent to 2.56 trillion yuan from a year earlier, the figures showed.
UBS AG estimates the real-estate industry accounts for more than a quarter of final demand in the economy when including property-generated needs for goods including electric machinery and instruments, chemicals and metals.
Services' Share
China's growth will become less volatile as services take a larger share of the economy, Sheng Laiyun, a spokesman for the National Bureau of Statistics, said at a briefing today in Beijing. Expansion in services quickened to 8 percent in the first half from 7.8 percent in the first quarter, the agency said.
Looser credit and increased fiscal spending may also fuel growth. Aggregate financing, China's broadest measure of new credit, was the highest for June since the lending spree of 2009 and money supply grew more than forecast, central bank data showed yesterday. Fiscal spending rose 26.1 percent in June from a year earlier, compared with an 8.8 percent increase in revenue, the Finance Ministry said July 14.
The government has also weakened the yuan, which was down about 2.5 percent against the dollar this year through yesterday, the worst performance among 11 major Asian currencies tracked by Bloomberg. The currency rose 0.03 percent to 6.2059 per dollar today.
Global Demand
Positive forces such as global demand and monetary easing may help the economy rebound in the second half, Ding Shuang, senior China economist at Citigroup Inc. in Hong Kong, said on Bloomberg Television. The property-investment slowdown will "weigh more heavily" next year and growth could slow to around 7 percent, he said.
Policy makers are trying to limit support to areas including railway spending and agriculture. The People's Bank of China cut reserve requirements for banks who qualify based on lending to rural borrowers and smaller companies, rather than nationwide, as it last did two years ago.
Using debt to support growth risks increasing dangers of a slump, with JPMorgan last year comparing China's borrowing surge to the 1980s run-up to Japan's lost decade. China's aggregate financing as a percentage of GDP rose to 206.3 percent in the second quarter from 202.1 percent in the previous period, according to data compiled by Bloomberg. The ratio was 166.6 percent at the end of 2011.
Easier credit may support regional governments in their own stimulus plans, as provinces hit hard by slumps in energy and resources announced investments last month after first-quarter growth trailed their annual targets.
Northern Hebei province will invest 1.2 trillion yuan in areas including railways, energy and housing. Heilongjiang province in the northeast will spend more than 300 billion yuan over two years in areas including infrastructure and mining.
De Fact: Balanced Overlap – Mongolia's Economic Foreign Policy
By Jargalsaikhan Dambadarjaa
July 20 (UB Post) The Concept of Mongolia's Foreign Policy states, "Maintaining friendly relations with the Russian Federation and the People's Republic of China shall be priority directions of Mongolia's foreign policy activity… The second direction of Mongolia's foreign policy activity shall be developing friendly relations with highly developed countries of the West and the East such as the United States of America, Japan, the European Union, India, the Republic of Korea, and Turkey." Also, it is stated that the objective of our economic foreign policy is to achieve sustainable development of the national economy, ensure economic security, and improve the livelihood of the people.
It has almost been 20 years since the Concept of Mongolia's Foreign Policy was first developed. Some observations can be made today about how this policy can be implemented and developed in the future. Mongolia has had many high-level visits from many countries and our dignitaries have paid numerous official visits to other countries. There have been many formal documents signed. Furthermore, the heads of state from our two neighboring nations are visiting Mongolia soon. President Elbegdorj has also proposed holding a summit with the leaders of the two countries. A very timely question in front of us today is whether Mongolia's foreign policy has established a balanced overlap between the circles of interests of our two neighbors and the "third neighbor" countries in certain economic sectors. Another related question is whether we have formulated an approach to be used in implementing policy for finding a balance between these overlapping interests.
ENERGY AND MINING
A total of 17 international companies are currently conducting petroleum exploration activities in Mongolia. Petro China Dachin Tamsag, which operates in the largest area, is extracting and exporting petroleum from a deposit with estimated reserves of 180 million tons and proven reserves of 20 million tons. Due to several sudden changes made to the foreign investment law and changing mineral policy, the majority of companies from the third neighbor countries have left Mongolia.
Peabody Energy from the United States and Shenhua Group of China are interested in taking part in coal extraction at the TavanTolgoi deposit. A year ago, the Government of Mongolia and Sinopec Group signed a memorandum of understanding to implement a multi-billion dollar project to build a gas plant, produce, and export fuel gas. It is still unclear whether German technology will be used in this project. There has been recent talk about the cheapest and shortest route to transport oil and gas from Russia's Siberia not being the Altai Mountains, but the Mongolian steppe. There are also prospective projects to build power plants in proximity to brown coal deposits.
In this industry, China's circle of interest keeps expanding while that of our third neighbor nations is shrinking. There is almost no sign of Russia having its own circle of interest here.
INFRASTRUCTURE
It has mostly been thought that the key to unlocking the infrastructure industry is largely dependent on which railway track gauge to use. Track gauge is significant in Mongolia's access to the sea. As President Elbegdorj pointed out, we are interested in reaching the markets of our third neighbor nations by acquiring access to the sea by using both the track gauges employed by our neighboring countries. Mongolia is currently waiting for China to issue a permit that will allow cargo from Mongolia to be transported across its territory with the same rates that apply to Chinese companies.
Mongolia should build a dual-gauge railway horizontally, trade with Russia and China using their own track gauges, and establish a railway hub where the different track gauges meet and transshipment services are provided. When finding investment and implementing these projects, it is important to balance the overlap between the interests of our two neighboring countries as well as the third neighbor countries. This way, Mongolia can become a true transport hub that links Europe and Asia. It will also allow Russia to send its natural resources to Southeast Asia and India. In this industry, we should find an overlap where the interests of our two neighboring nations are equal.
INDUSTRIAL SECTOR
We can develop our industrial sector by proposing that investors make investments providing that they will be repaid with our products, while meeting domestic demands to a certain extent of the value chain, including extraction, processing, and production.
China has come up with an initiative and proposed training our workforce. We need to incorporate the interests of our third neighbors in every part of the value chain in our industrial sector and introduce the most advanced technology.
In this industry, we should pursue a policy to overlap the interests of our two neighbors and the third neighbor countries equally.
FINANCE
Mongolbank and the People's Bank of China (the central bank of China) have recently renewed the currency swap agreement for another three years. This agreement allows Mongolia to acquire a CNY loan worth 3.3 billion USD (up to 20 billion CNY) when required. It proves that Mongolia's foreign trade now uses Chinese yuan.
The Bank of China has applied to open a branch in Mongolia. However, our government has not yet reached a decision with respect to their request. Although this bank is only supposed to fund large projects, some clarifications need to be made around land to be used as loan collateral and the issuance of special permits.
There is an increasing trend that China's circle of interest in these industries is likely to keep expanding. It has divided Mongolia's society in two. One half thinks that Mongolia might become too dependent on China and is wary of an increased influx of Chinese people if the railway is built using their gauges. They are also cautious of China sending their military into Mongolia if a conflict arises between Mongolian citizens and Chinese citizens. The other half views China as Mongolia's biggest partner in foreign trade and investment, as well as the sole client who buys our natural resources and other products. They believe that Mongolia should regard China as its client and point out that European leaders have been pursuing a more pragmatic policy towards China while being reluctant to raise the issues of human rights or receive the Dalai Lama.
In order to deescalate this division, we need to work closely together with our two neighbors on large, economically significant projects, while ensuring that the interests of our third neighbor countries exist equally. As companies from our two neighbors are dominated by state-owned enterprises, we need to make it clear from the beginning when the shares of new companies being jointly established will be publicly sold on international stock exchanges. Such arrangements will allow us to attract investment from third neighbor countries and increase their involvement.
When Mongolia's foreign policy finds an equally balanced overlap between the circles of interest of our two neighbors, as well as third neighbor countries, Mongolians will be more united, as there will be less polarization and differences of opinion.
Encouraging Mining FDI in Mongolia
July 20 (Oxford Business Group) Changes to Mongolia's mining legislation will open up vast new tracts of land for exploration and pave the way for new license issuances. This should help restore the confidence of foreign investors made wary by government intervention in the sector.
On July 1, the Mongolian parliament voted to approve amendments to legislation governing mining activity, ratifying changes to the Mineral Laws of 2006, aimed at regenerating foreign interest in the sector.
Among the key changes to the legislation will be the expansion of Mongolia's landmass open for exploration and subsequent mining activity, with 20 percent of the country set to be rated as available for development, rather than the eight percent available prior to the change.
The amendments will also see an end to the moratorium on new mineral exploration licenses, imposed in 2010 as a means of cooling the rush into the sector at the time. Lifting the ban is intended to encourage a return to Mongolia by mining firms, as is the provision extending the term of exploration on a lease from nine years to 12.
The amended legislation also establishes a policy body that will be tasked with addressing issues faced by the industry and working with sector players to overcome challenges.
Re-tender 106 permits
In another step forward for the mining sector, the government approved plans on July 6 to re-tender 106 exploration permits. This reverses a decision taken in 2013 to cancel the mining licenses, according to a cabinet meeting memo cited in local media. The licenses in question were revoked late last year as a result of a court case involving senior officials of the Mineral Resource Authority of Mongolia.
Though the companies affected by the cancellation were not directly involved in the investigation, the allegations of corruption against the officials were seen to have tainted many of the activities in the sector.
The memo did not elaborate on a timetable for details of the procedures but by marking a path of reconciliation, the government will go a long way towards restoring confidence among foreign and domestic miners.
Mongolia's leaders hope the liberalized minerals law will encourage a fast turnaround in interest in the country's resources. O. Erdenebulgan, the deputy minister for mining, told Bloomberg in May that amendments in the legislative pipeline could attract 1 billion USD in new investments into the sector, this year alone. This could help reverse the sharp decline in the flow of foreign direct investment (FDI), which halved last year and is down 64 percent for the first five months of 2014.
According to Independent Mongolian Metals & Mining Research analyst Dale Choi, the amendments should help in resolving the uncertainty that has been hanging over the mining and exploration industry in recent years.
"Lifting of the moratorium on issuance of new exploration licenses is of particular importance for the viability of the exploration sector," Choi said in a statement issued on July 2.
Implementing and delivering long-term stability and sustainability, he said, would help Mongolia rebuild investor confidence as well as attract global top tier mining investment, adding that the amendments represented a significant message to investors around the world.
Concerns linger
While the government is looking for a surge in investment, it may take some time before the tide turns. With commodity prices well down and prospects for a rebound in the short-term unlikely, leading mining firms are looking to consolidate their present holdings rather than take on new, potentially expensive projects. With growth prospects for the Chinese economy uncertain, and a general oversupply of coal and other minerals on the international market, investors may hold back to see both how demand trends develop over the next year or two, as well as to determine the full impact of the legislative amendments.
The outlook for Mongolian coal may also be affected by a rise in production in some segments of the Chinese mining sector; for example, the output of washed coking coal in the northern province of Shanxi rose as capacity expanded last year. Production from the province's mines has continued to increase this year, rising by 1.44 percent over the first five months of 2014, but jumping more than 12 percent month-on-month in May, taking production since the beginning of the year to 387 million tons.
Potential new entrants to the Mongolian market may also want to see the outcome of a series of disputes between the government and one of the highest-profile foreign operators in the sector, Turquoise Hill Resources, which is majority-owned by mining giant Rio Tinto. Operator of the 6.6 billion USD Oyu Tolgoi copper and gold mine, Turquoise Hill is in dispute with the government over claims of unpaid taxes and penalties; the firm is also in disagreement over fees it is owed.
On June 26, the company announced it had filed a dispute notice with the government over a state audit report. It has been claimed that Turquoise Hill owes up to 130 million USD in taxes, an allegation the company has rejected.
If the disputes can be resolved to the satisfaction of all, this will boost confidence in the whole mining sector and in the potential for future investment in the industry. With the opening up of new exploration opportunities, more adventurous companies may look to buck the trend of consolidation and caution currently marking the industry around the world. Some may seek to get in on the early stages of what could be the next big minerals rush in Mongolia – one that could be better managed and more transparent than the first.
Mongolia: Recent Economic Development and Challenges
July 2013 (World Bank Mongolia) --
Mongolia's new mining framework may not be enough to rekindle foreign investment
By Jax Jacobsen
July 9 (SNL) On July 1, the Mongolian government passed a series of amendments to its mining regime as well as other regulations in a desperate effort to bring foreign direct investment back to the country.
Damaged by a monthslong public spat with Rio Tinto over the massive Oyu Tolgoi copper-gold mine and by continued reports of corruption in allocating mining licenses, Mongolia has seen foreign investment dwindle from its peak of US$1.9 billion in the first five months of 2012 to US$400 million in 2013.
Construction of the mine was suspended in July over continued disagreements over revenue distribution and delays in securing parliamentary approval for the project.
In August 2013, the head of the Mongolian unit of Oyu Tolgoi was sacked following another dispute with Turquoise Hill. In May, Turquoise Hill negotiated a six-month funding extension for the proposed underground expansion of the producing mine.
According to Bloomberg News, foreign direct investment fell by 52% in 2013 compared to 2012, and fell another 64% in the first five months of this year.
The new amendments are reported to expand available areas for mineral exploration from 8% of Mongolia's total area to one-fifth of the country. A ban on new exploration licenses that was imposed in 2010 has also been lifted, according to government ministers.
The full text of the amendments has not yet been made public.
Mongolia will also create a National Geological Survey and a Policy Council that will oversee changes made to the mining regime.
But it remains to be seen whether the measures will be enough to rescue the country's mining industry, on which its economic boom has depended.
Munkhdul Badral Bontoi, an analyst at Cover Mongolia in Ulaanbaatar, called the changes a small step in the right direction.
"The legal reforms — just changing the laws — will not be enough to convince investors to start coming back, but I think it sets up the framework for concrete action that will signal that Mongolia is open for business again," he told SNL Metals & Mining.
But the return of foreign investment will only come once investors engage in more mergers and acquisitions and the government follows through on promises on the exploration permits.
"There's one listed company that had their licenses suspended, Kincora Copper Ltd.," Bontoi said. "The investor community will find out if this kind of process is going to be conducted fairly or not through the company's press releases."
Mongolia's inexperience with foreign firms
In late June, Turquoise Hill was presented with a US$130 million tax bill by Mongolia's tax authority, in the latest deterioration in relations between the Mongolian government and the miners of Oyu Tolgoi.
Turquoise Hill has a 66% stake in the mine, while Rio Tinto owns a 51% stake in Turquoise Hill.
The Canadian company said it has filed a dispute with the government, which will initiate a 60-day period of negotiations.
Bontoi said the tax dispute was not planned by Mongolia's leaders, but was instead the responsibility of an independent tax authority.
"I think it was probably a unilateral action taken by the tax authority," the analyst said. "I don't think people at the top knew it was going to happen. From my understanding, people at the top were very angry that the tax authority took it upon itself to do this."
The incident is indicative of Mongolia's lack of experience in dealing with foreign firms, Bontoi said. Mongolia's tax authority, he noted, did not anticipate that Turquoise Hill would make the tax demands public.
"The tax authority had no understanding of how public companies work," he explained. "In Mongolia, the public market is very small, and probably did not have enough experience to know that these companies might react that way."
Rio Tinto's step back on Oyu Tolgoi
On July 8, Mongolian Prime Minister Altankhuyag Norv accused Rio Tinto of slowing down second-phase development of the Oyu Tolgoi mine.
"We are acting, and at the same time we are asking Rio Tinto why they are being slow to act," he told Bloomberg TV.
Norv may be correct in that Rio Tinto has been slow in pushing forward with project developments, but the global miner has its reasons for doing so.
"I think they jumped on the opportunity [presented by the tax dispute] to say they might delay things," Bontoi said. "Rio Tinto is keen on postponing the second round of financing because they want more assurances from the government that there won't be any more trouble ahead."
Rio Tinto is also faced with a depressed market for commodities which is tempering its appetite for expansion, Duncan Innes-Ker, a senior editor and economist with Economic Intelligence Unit, told SNL.
"I'm sure Rio Tinto is playing hardball," Innes-Ker said.
"For them, the urgency to expand out is a lot less," he noted. "The global environment [for mining] has changed, the risk factor of Mongolia has changed, with some very negative developments on mining policy over the past few years. So, from Rio Tinto's perspective, they're a lot more ambiguous about expanding [Oyu Tolgoi] at the same pace."
Mongolia on the brink
Decreasing investment levels from Rio Tinto in particular, and foreign mining companies in general, will likely send the Mongolian economy into a balance of payment crisis, Innes-Ker said.
Mongolia has had to provide the capital resources — such as purchasing mining equipment, fuel and the investment goods to build the necessary infrastructure — to sustain a rapidly growing economy. However, exports have been very low because many of the mining projects are not at the production stage yet, Innes-Ker said.
To finance these costs, Mongolia has relied heavily on foreign borrowing.
"If things carry on the way they're going … the debt burden can become unsustainable, and we're looking at a possible International Monetary Fund rescue if foreign investment doesn't perk up quickly," the economist said.
Rio Tinto's pullback of the Oyu Tolgoi expansion is making the Mongolian government uneasy as the slowdown in investment constrains the government's ability to go to the debt markets, he said.
"The level of goodwill [to reach an accommodating deal between both sides] might be a lot harder to find now," in the wake of the tax dispute, he added. "The interesting question is if Mongolia goes to the IMF after another payment crisis and how that will play out into mining disputes in the country."
Amended Law on Minerals 2014
Link to law (in Mongolian)
Mongolia attempting to win back alienated mining investors
By Jonathan Manthorpe
July 14 (Business in Vancouver) Mongolia is attempting to inspire market confidence in its economically crucial mining sector after foreign investors started staying away in droves in response to years of political vacillation.
Early this month Mongolia's parliament, the Great Hural, passed a series of new laws and amendments to existing legislation aimed at providing a sound and predictable structure to regulate the mining industry. The changes by the government of Prime Minister Altankhuyag Norov come after two years of slowing growth and sharp declines in foreign investment.
Economic growth in Mongolia was a world-leading 17.5% in 2011, but that fell to 11.5% last year, and the Asian Development Bank is predicting a rise of 9.5% this year. Foreign money coming into Mongolia fell 52% last year over 2012, and in the first six months of this year it was down a further 64% over the same period in 2013.
Investors have greeted the changes with muted optimism. But the main influence on investor confidence will be whether the government and the Anglo-Australian Rio Tinto Group can resolve their differences over the massive Oyu Tolgoi copper and gold mine, which is expected to provide 30% of the country's gross domestic product when in full production.
Amendments to the 2006 Minerals Law expand from 8% to 20% the proportion of Mongolia available to mining exploration.
The previous limit was based on environmental concerns and a 2009 law aimed at protecting rivers and forests. These amendments also foresee the creation of a National Geological Survey and the establishment of a policy council to oversee future changes to mining law.
Changes include the lifting of the 2010 ban on new licences and increasing the period of exploration from nine years to 12.
At the same time, the government wants to encourage investment in coal, shale gas and oil exploration. The hope is to attract investments of about $1 billion this year and end the country's dependence on energy imports by the end of the decade.
Still unresolved is the question of 106 mining licences that the government revoked late last year. The licences were cancelled after officials in the Mineral Resource Authority of Mongolia were charged with corruption.
On several occasions government officials have said they want to resolve the issue as soon as possible.
Some of the mining companies have launched court challenges against the government, claiming their licences were illegally revoked. In court actions by 31 of the 106 companies, they say they have spent about $19 million and have further costs of $36 million pending.
Mongolia emerged as one of the world's most enticing storehouses of untapped mineral resources after the country achieved independence from the collapsing Soviet Union in 1990. The country has some of the world's largest reserves of coal, copper and gold as well as economic deposits of uranium, silver and molybdenum.
The bonanza mentality has been spurred on by Mongolia's closeness to the industrial areas of neighbouring northern China, where the appetite for natural resources appeared, until recently, to be insatiable.
But developing the institutions to manage the mining industry and adapting the culture of an economy based on mineral extraction has been a tempestuous and emotional experience for the country of only three million people.
Until the mineral potential of Mongolia became apparent in the early 2000s, most Mongolians subsisted on the semi-nomadic herding of sheep, goats, horses, cattle and camels.
Mongolia has become a vibrant democracy with frequent changes of government.
A constant theme, accompanied by several changes of direction that have unnerved investors, is how best to ensure all Mongolians get the best value from their national assets.
Government in tug of war with companies over copper-gold mine
Mongolia's vast Oyu Tolgoi copper and gold mining project has become a daily barometer of the health of the country's nascent resource industries since the deposit was discovered by Vancouver-based Ivanhoe Mines in 2001.
At the moment the barometer is recording stormy weather, but with the chance of clearing conditions ahead as the Mongolian government tries to put in place workable and predictable mining regulations.
But for the time being, relations between the Ulan Bator government, which owns 34% of the Oyu Tolgoi project, and Anglo-Australian miner Rio Tinto, with the other 66%, are difficult. Although the open-pit section of the mine started production last year, the government is concerned that the ballooning of development costs from a predicted $5 billion in 2010 to $11 billion last year will eat into its revenues.
Political parties have been free with their promises to voters on how they will benefit from the vast treasure house of untapped mineral reserves under the deserts and steppe grassland. They need the Oyu Tolgoi revenues.
Earlier this year Rio Tinto missed a deadline to secure about $5 billion in investment in the underground mine portion of the project. Meanwhile relations have deteriorated further since the government announced last month that $130 million in evaded taxes and penalty payments are owed by Turquoise Hill Resources, the Vancouver-based manager of the Oyu Tolgoi project created by Ivanhoe and now owned by Rio Tinto.
Mongolia expands its resource exploration options
But olive branch to resource industry might not be enough to lure investors, miners
July 14 (Business in Vancouver) The Mongolian government plans to more than double the size of the territory open to mining and exploration in Mongolia.
While that might sound promising for an idle junior mining and exploration sector looking for the next bonanza, it may not be enough to take the chill off doing business in Mongolia.
From a raw resource perspective, Mongolia is a potential Xanadu, rich in mineral deposits. Politically, it's a landscape filled with uncertainty.
The government of Mongolia has earned a reputation for rolling out the welcome mat, only to pull the rug out from under the companies walking on it. It suspended more than 100 mining licences as part of a fraud investigation in the country's mining authority and just recently accused Vancouver's Turquoise Hill Resources (TSX:TRQ) – a subsidiary of Rio Tinto PLC ADS (NYSE:RIO) – with tax evasion on its multibillion-dollar Oyu Tolgoi copper-gold mine.
Last month, following an audit, the Mongolian tax authority claimed the mine's owners owed the government – which is itself a 34% shareholder – unpaid taxes and assorted entitlements it claims it should not have claimed. The company did not return calls to Business in Vancouver.
On June 26, Turquoise Hill responded with an announcement that it had filed a dispute with the Mongolian government.
Days later, on July 1, in what Bloomberg News characterized as a move to regain investor confidence, the Mongolian government passed a law that lifts a ban on new mining licences, which would increase the area open to mining and exploration to 20% from 8%.
Mickey Fulp, a mining analyst and publisher of mercenarygeologist.com, doubts that will be enough for investors to ignore Mongolia's "horrible track record," he said. "They change the rules all the time. There are many other countries like that, but Mongolia is absolutely, hands down, the worst, I think."
Julian Dierkes, an associate professor at the Institute of Asian Research at the University of British Columbia, is an expert on Mongolia. He said the recent reversal of policies on exploration in Mongolia may be good for junior exploration companies that are already invested there – Vancouver's Kincora Copper Ltd. (TSX-V:KCC), for example – but whether it attracts any new investors remains to be seen.
"This is, in part, economic desperation because foreign investment has evaporated," Dierkes said. "My concern is it's just another swing of the pendulum, rather than being a long-term, really well-founded policy change."
Cabinet Approves Rules on Issuing Permits to Explore, Exploit Common Minerals
July 10 (infomongolia.com) The regular Cabinet meeting was held on July 09, 2014, and one of the issues resolved was releasing a specific regulation on exploration and exploitation of common mineral resources that needed for construction of auto road and railway projects, which considered as important for the country's socio-economic development.
The authorization for exploration and exploitation of such projects and programs will be allocated by the Cabinet decision and license owners will extract above minerals at its own cost and it's required to use the common mineral resources only within the area of project and period term.
In the frameworks to accelerate construction works being carried out nationwide, Minister of Roads and Transportation, Minister of Mining and Governors of Capital City and Aimags are obliged to monitor on the implementation of this new regulation.
Mongolia Cabinet Replaces Three Board Members of DBM
July 17 (infomongolia.com) At the Cabinet meeting held on July 16, 2014, three Board Members of the Development Bank of Mongolia were released from duties on their own requests and new members were appointed.
The freed members of the Board are:
- Former State Secretary at the Ministry of Finance D.Battur,
- Executive Director of Khadgalamjiin Daatgal (Deposit Insurance) Corporation B.Lkhagvasuren,
- Executive Director and Secretary General of Mongolian Bankers Association B.Naidalaa.
Newly promoted three Members of Board of the Development Bank of Mongolia are:
- Director of Supervision Department at the Bank of Mongolia (Central Bank) D.Ganbat,
- Director of Budget Expenditure Division at Fiscal Policy and Planning Department, Ministry of Finance, O.Khuyagtsogt,
- Acting Director of Public Administration and Management Department at the Ministry of Economic Development R.Baasanjav.
Also, during the Cabinet meeting, it was resolved to retire Director of Economic Partnership and Aid Policy Department at the Ministry of Economic Development D.Boldbaatar.
The Development Bank of Mongolia, which is a subject of the state-owned entity, was established on July 20, 2010 by the Government decision with specific functions to finance big projects and programs carried out nationwide, and Chairman and Board Members of the Development Bank are appointed and released by the Cabinet decision.
TDBM dollar deal hopes dashed by Mongolia worries
Trade & Development Bank of Mongolia (TDBM) was forced to pull its dollar bond after announcing guidance on Thursday July 9. While bankers on the deal blamed shockwaves from a bank crisis in Portugal, investors said they were not willing to take on Mongolian risk and that the deal hardly received
By Virginia Furness
July 17 (GlobalCapital) A global panic was sparked on July 9 European time when trading in Espírito Santo Financial Group's shares was suspended, sparking fears that a new crisis might be about to engulf peripheral European financial names The group is the largest shareholder in Portugal's Banco Espírito Santo, whose shares were also subsequently suspended after falling sharply.
Contagion fears saw investors flipping out of subordinated bonds across jurisdictions. Haven assets such as gold and US Treasuries saw a rally as investors fled to safety.
After books opened for TDBM's five year Reg S offering at 11.25% on Thursday morning, bankers away from the deal said there was no update from Bank of America Merrill Lynch, Goldman Sachs and ING until the following morning, when an announcement went out saying that the deal had been postponed.
A syndicate banker on the trade maintained that the deal had got off to a good start. But when European markets opened on a softer tone, bankers cautioned the issuer that it would not be advisable to continue with the transaction.
Investors who had looked at the deal were unconvinced by the Portugal related explanation, arguing instead that the Mongolia sovereign risk was not at all appetising and hadn't been for some time. One fixed income manager pointed out that the country's sovereign bonds were down around seven cash points at the long end of the curve.
"Honestly, I think the issue is with Mongolia in general — people just didn't want to take it on," he said. "People are concerned about the position of the sovereign with regards to FX reserves. If you are buying a bank in a country with potential dollar liquidity risk you are making a call as there is no way that if the sovereign is running into problems, it will not have an impact on the bank."
Desperate measures
Things looked pretty desperate after the Asian session, with TDBM taking with very few orders. The bank was planning to keep the books open until the next day, hoping it could develop US interest in the evening of Thursday 10. But this did not materialise either. "Even the sovereign would have difficulty issuing at this time so I'm not sure why they are using the bank," he added.
The execution of the deal, coupled with investor reticence to take on risky debt from Mongolia was most likely to blame, a banker away from the deal agreed. "I don't blame them for trying to find an excuse," he said. "Obviously they didn't anchor the deal securely. The fact that they pulled it so early meant that they didn't have a chance of getting it over the line."
Mongolia recently released dismal data that showed gross foreign reserves had fallen by 27% from $2.2bn at the end of 2013 to $1.6bn at the end of May this year.
"As a result, reserves now provide only 1.8 months of external payment coverage, well below the B range median of 3.2 months," wrote Fitch analyst Andrew Colquhoun in a July 8 report. Mongolia has a sovereign rating of B1/B+/B+.
Mongolia was also downgraded from BB- to B+ by Standard & Poor's in April this year and saw its fifth largest lender, Savings Bank, declared insolvent after affiliated companies defaulted on loans. It also carries a B1/B+ rating from Moody's and Standard & Poor's.
The borrower does intend to return however, according to bankers on the deal, though this is likely to take place after the summer lull.
Mongolia's TDBM pulls U.S. dollar bond due to Europe debt turmoil-IFR
July 11 (Reuters) - Trade and Development Bank of Mongolia, or TDBM, pulled a planned U.S. dollar bond offering because of financial market turmoil triggered by a debt crisis at Portugal's Banco Espirito Santo, IFR reported, citing a banking source.
TDBM, the largest bank in Mongolia, had expected to sell a 5-year bond. It was indicating a yield in the area of 11.25 percent on Thursday morning.
"When Europe opened, European accounts were shut due to the soured sentiment. So it is only prudent for us to call the deal off and wait for a better window to tap the market," a banker on the TDBM deal said.
"Also with this volatility, the deal would not be performing well in the secondary market," the banker added.
The TDBM's cancelled offering was part of the bank's $1 billion medium-term notes (MTN) program.
The bank is 73.1 percent owned by Chairman Erdenebileg Doljin and his son Tulga Erdenebileg and 5 percent by Goldman Sachs. The rest is owned by a few other individuals, according to the prospectus.
Portugal's BES reportedly missed a coupon payment on its bonds. Global equity markets tumbled on the news as investors began to worry about the health of European banks.
In spite of the high yield on Mongolia's proposed bond, investors had already been concerned about prospects for the country's commodity-reliant economy and the bank's concentration of loans to the commodity and construction sector.
Related:
Moody's: Exclusion of Mongolia government letter of support has no rating implications for TDBM's GMTN program – Moody's Investors Services, July 10
Mongolia Bank Plans Dollar Bond as Buyers Scrape Credit Junkyard – Bloomberg, July 10
Moody's downgrades three Mongolian banks following sovereign downgrade
Hong Kong, July 18, 2014 -- Moody's Investors Service has downgraded the local currency long-term deposit ratings for Khan Bank LLC, XacBank LLC, and Trade and Development Bank of Mongolia LLC (TDBM) to B2 from B1. At the same time, Moody's has downgraded the foreign currency long-term senior unsecured debt ratings for TDBM to B3 from B1.
The outlook for all the ratings is negative.
See below for a full list of the ratings, both downgraded and affirmed.
The rating action follows Moody's downgrade of Mongolia's sovereign ratings to B2 from B1 on 17 July 2014. Please see the related press release on www.moodys.com.
RATINGS RATIONALE
The rating action on the three banks' ratings is based on the consideration that the creditworthiness of the Mongolian banking system is highly correlated to the sovereign. The sovereign downgrade was driven by its strained external liquidity position, as reflected by a sharp loss in foreign-exchange reserves.
Furthermore, expansionary monetary and fiscal policies have added to demand pressures, fuelled inflation, and heightened spillover risks to the banking system and the balance of payments. Accompanied by a continued rise in the external debt burden, these factors increase the country's vulnerability to external and domestic shocks relative to rating peers.
Separately, Moody's rating action on the three banks also takes into account the risks to the banks stemming from the Mongolian government's pump-priming measures, some of which are heavily credit-driven.
Specifically, the Bank of Mongolia -- in addition to policy-rate reductions and fiscal spending -- provided MNT4.3 trillion ($2.6 billion) in loans to the banking system as of end-2013, representing about 40% of total credit for the banking system.
The banks on-lent these loans to targeted industries and their assets accordingly grew by 74% and loans by 54% during 2013.
These developments -- against the current backdrop of macro-economic and export deterioration -- have increased the risks to the banks' liquidity, profitability, asset quality and ultimately -- their capital adequacy.
Liquidity conditions for the banks continue to tighten as loan growth exceeds deposit growth. The system's loan-to-deposit ratio jumped to 97% at end-2013 from 85% a year ago.
Meanwhile, profitability is shrinking, as the banks lower lending rates to support the government's accommodative policies, while maintaining relatively high deposit rates to stem the deterioration in their funding profiles.
Moody's expects the banks' asset quality performance to deteriorate further during the rest of 2014 and into 2015, as the economy remains under pressure, and as loans booked during the continuing credit boom season.
For example, asset quality has deteriorated in the mining and manufacturing sectors, whose NPL ratios stood at 17.9% and 6.4% at end-March 2014, compared to 12.2% and 3.3% a year ago.
The construction sector has not shown a material deterioration and the NPL ratio for the sector stood at 2.9% at end-March 2014. However, loans to the sector grew by 123.7% year-on-year at end-March 2014, twice as fast as systemic loan growth at 54.5%. Once the loans season, we expect substantial asset quality deterioration.
Moreover, the mining sector remains vulnerable to continued slides in commodity prices and demand, while the manufacturing and construction sectors remain exposed to the subdued state of domestic economic growth.
Below we discuss each individual bank.
Trade and Development Bank of Mongolia
Moody's has lowered TDBM's baseline credit assessment (BCA) to b3 from b2. TDBM's BCA of b3 reflects its: (1) solid market position as a leading corporate lender in foreign exchange and trade-related businesses; and (2) diversified funding sources from both domestic depositors and foreign financial institutions.
However, the ratings are constrained by the bank's vulnerability to a deterioration in asset quality, given its high loan concentration and portfolio of corporate loans.
TDBM's top 20 group borrower exposures were equivalent to 366% of its Tier 1 capital, two times higher than those of Khan Bank and XacBank at end-March 2014. More than 50% of these borrowers are also in risky sectors, such as mining and construction. These sectors accounted for 19.4% and 18.1% of its total loans, respectively, at end-March 2014.
TDBM's BCA of b3 also reflects potential challenges related to corporate governance that could arise from its narrow shareholding structure.
Moody's has not incorporated any systemic support notching uplift to TDBM's B3 foreign currency unsecured debt rating, given its assessment of limited foreign currency support capacity of the Mongolia government. This is despite the systemic importance of TDBM -- as the second-largest lender in terms of loans -- in the Mongolian banking system.
However, Moody's has incorporated one notch of systemic support to its local currency deposit rating of B2, given the proven track record of the Mongolian government of providing support to depositors of failed banks such as Anod Bank (unrated), Zoos Bank (unrated) and Savings Bank (unrated). Moody's expects the government to support deposits at banks that are considered to be of high systemic importance to the economy.
Khan Bank
Moody's has lowered Khan Bank's BCA to b2 from b1. Its BCA of b2 reflects its (1) strong franchise in Mongolia as the largest bank in terms of loans, as well as its extensive nationwide branch network, the largest among all domestic banks; and (2) relatively granular loan book given that retail borrowers accounted for over 60% of its total loan portfolio at end-March 2014.
The ratings do not incorporate any uplift for systemic support because Mongolia's sovereign rating is also B2.
XacBank
Moody's has lowered XacBank's BCA to b2 from b1. The bank's b2 BCA reflects its (1) growing franchise and well-established expertise in micro-finance; and (2) relatively low credit concentration risk.
The bank's local currency deposit rating does not incorporate any uplift for systemic support because the sovereign rating for the Mongolian government is the same as the bank's standalone rating of B2.
What Could Change the Rating - Up
Given that the B2 issuer ratings assigned to Khan Bank and XacBank are the same as the sovereign rating, an upgrade of the banks' ratings is unlikely. A return to a stable outlook would require a return to a stable outlook on the sovereign rating, as well as evidence that asset quality pressures can be contained as loan books season.
Upward pressure on the B3 issuer rating of TDBM could occur if it substantially reduces its borrower concentration and exposure to risky sectors.
What Could Change the Rating - Down
The following factors could exert negative pressure on the three banks' ratings: (1) corporate governance-related problems that cause a loss of depositor confidence, therefore increasing the threat of a deposit flight; (2) a significant deterioration in asset quality; for example new NPLs to gross loans exceeding 4.0%; (3) a rise in concentrations, or a rise in exposures to risky sectors, in particular construction; (4) the Tier 1 ratio falling below 9%; or (5) a significant deterioration in profitability, such that net income is less than 1.4% of average risk weighted assets.
The resultant ratings and actions are listed below:
Trade Development Bank of Mongolia --
• baseline credit assessment of b2 lowered to b3;
• local currency bank deposits rating of B1 downgraded to B2;
• foreign currency bank deposits rating of B2 downgraded to B3;
• issuer rating of B1 downgraded to B3;
• local currency long-term senior unsecured of B1 downgraded to B3;
• foreign currency long-term senior unsecured debt/subordinated debt of B1/B2 downgraded to B3/Caa1; and
• foreign currency long-term senior unsecured MTN/subordinated MTN of (P)B1/(P)B2 downgraded to (P)B3/(P)Caa1.
The revised ratings all carry negative outlooks.
All other ratings were affirmed: Bank Financial Strength of E+; local currency/foreign currency short-term deposits rating of NP; local currency/foreign currency short-term issuer rating of NP; and ST MTN program rating of (P)NP.
Khan Bank --
• baseline credit assessment of b1 lowered to b2;
• local currency bank deposits rating of B1 downgraded to B2;
• foreign currency bank deposits rating of B2 downgraded to B3;
• issuer rating of B1 downgraded to B2; and
• local currency/foreign currency long-term senior unsecured
MTN/subordinated MTN of (P)B1/(P)B2 downgraded to (P)B2/(P)B3.
The revised ratings all carry negative outlooks.
All other ratings were affirmed: Bank Financial Strength of E+; and local currency/foreign currency short-term deposits rating of NP.
XacBank --
• baseline credit assessment of b1 lowered to b2;
• local currency bank deposits rating of B1 downgraded to B2;
• foreign currency bank deposits rating of B2 downgraded to B3;
• issuer rating of B1 downgraded to B2; and
• foreign currency long-term senior unsecured MTN of (P)B1 downgraded to (P)B2.
The revised ratings all carry negative outlooks.
All other ratings were affirmed: Bank Financial Strength of E+; local currency/foreign currency short-term deposit rating of NP; local currency/foreign currency short-term issuer rating of NP; and ST MTN program rating of (P)NP.
The principal methodology used in these ratings was Global Banks published in May 2013. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.
Trade and Development Bank of Mongolia LLC, based in Ulaanbaatar, reported total assets of MNT5.1 trillion (US$3.1 billion) as of end-2013.
Khan Bank LLC, based in Ulaanbaatar, reported total assets of MNT4.8 trillion (US$2.9 billion) as of end-2013
XacBank LLC, headquartered in Ulaanbaatar, reported total assets of MNT1.8 trillion (US$1.1 million) as of end-2013.
S&P: Rating On Golomt Bank Of Mongolia Lowered To 'B', No Longer Suspended; Outlook Negative
· We have received sufficient information from Mongolia-based Golomt to maintain surveillance, including the 2013 annual report.
· We expect Golomt's loan quality to continue to deteriorate over the next 12 months. The ratings no longer benefit from extraordinary government support following the downgrade of the sovereign in April 2014, while the ratings on the bank were suspended.
· We are lowering our long-term issuer credit rating on Golomt to 'B' from 'B+'. We are affirming the 'B' short-term issuer credit rating on the bank.
· The outlook is negative, which reflects our view that economic risks in Mongolia could increase over the next 12 months and pressure the ratings on the bank.
HONG KONG (Standard & Poor's) July 14, 2014--Standard & Poor's Ratings Services said today that it had lowered its long-term issuer credit rating on Golomt Bank of Mongolia to 'B' from 'B+'. The outlook is negative. We affirmed our 'B' short-term issuer credit rating on the bank. The ratings are no longer suspended. We had suspended the ratings on Nov. 8, 2013, because of a lack of sufficient information to maintain surveillance.
We downgraded Golomt to reflect the lowering of the sovereign credit rating on Mongolia (B+/Stable/B) in April 2014, while the ratings on the bank were suspended. The ratings on Golomt no longer benefit from extraordinary government support because the bank's stand-alone credit profile of 'b' is close to the sovereign rating on Mongolia.
The rating on Golomt is no longer suspended because we have received sufficient information to maintain surveillance, including the 2013 annual report.
We assess Golomt's stand-alone credit profile based on the anchor of 'b+' for banks operating predominantly in Mongolia. We consider the bank's business position as "adequate", its capital and earnings as "weak," its risk position as "moderate," its funding as "average," and its liquidity as "adequate," as our criteria define those terms.
"Golomt's loan quality has been weakening, in our opinion," said Standard & Poor's credit analyst Joseph Leung.
The bank's nonperforming assets ratio, which includes overdue loans and restructured assets, continued to rise in 2013. Credit losses were also above our projected normalized losses in 2013. Conservative loan growth and tightened underwriting policy partially offset these negative developments.
"We project further moderate deterioration in loan quality over the next year owing to uncertain economic conditions in Mongolia."
We expect Golomt to remain Mongolia's third-largest bank by total assets, despite some loss of market share in recent months. The bank's solid franchise in card services, international trade finance, and treasury services also support its business position. This advantage is reflected in its steady funding costs and more diversified revenue mix than peers'.
We believe the Golomt management has focused on its future development, after resolving corporate governance issues among the bank's major beneficiary shareholders and the bank management in 2013. The bank is also strengthening its internal control procedures and policies to address corporate governance and risk management issues identified in 2013.
Our assessment of Golomt's capital and earnings primarily reflects our projection that the bank's risk-adjusted capital ratio before diversification will be 3%-4% over the next two years, compared with about 3.8% as of end-2013.
We revised our assessment on Golomt's funding to "average" from "above average" to reflect the bank's reducing market share in deposits. While we believe the bank has a strong retail franchise in the domestic banking industry, the corporate governance issues and rating actions by credit rating agencies have hit depositor confidence, in our view.
"The negative outlook on Golomt reflects our view that economic risks for the Mongolian banking industry could increase over the next 12 months," said Mr. Leung. "Volatile property prices, rising private sector debt, and a deteriorating net external liability position signal rising economic risks, in our view."
We think that economic risks could further increase if the surge in private sector debt is significantly greater than our base-case expectations.
We may downgrade Golomt if we lower our assessment of economic risks for Mongolia's banking industry. If the economic risk score of the banking industry were to move to '10' from '9', Golomt's anchor would move to 'b' from 'b+' and the risk charge in our risk-adjusted capital ratio calculation will increase. Under this scenario, we could lower the rating on Golomt by more than one notch in an extreme case.
We could also reassess Golomt's credit profile if: (1) its loan quality deteriorates such that credit losses rise above 2%; or (2) the bank's asset growth consumes capital at a rate faster than our expectations, such that we project its risk-adjusted capital ratio to fall below 3%; this could happen if we revise down the economic risk score of Mongolia's banking industry or Golomt's loans grow by more than 35% without any capital injection.
We may revise the outlook to stable if we revise the banking industry trend to stable from negative and Golomt's stand-alone credit profile remains stable.
Jiaozuo Wanfang Aluminum to acquire oil & gas related assets in Mongolia, Morocco
July 16 (Reuters) - Jiaozuo Wanfang Aluminum Manufacturing Co Ltd says signs framework agreement to acquire oil & gas related assets in Mongolia and Morocco for 1.5-2.0 billion yuan ($241.80-$322.40 million)
Source text in Chinese: http://www.cninfo.com.cn/finalpage/2014-07-17/1200059099.PDF
MIAT Airlines to Open Direct Flights to Singapore from September 20
July 17 (infomongolia.com) The National Flag Carrier MIAT Airlines JSC announces to conduct a direct flight between Ulaanbaatar (UB) and Singapore from September 20, 2014.
The company's recent new route opened was between UB and Frankfurt, which is effective from last June 19th, so this time MIAT plans to commence destination to island country in Southeast Asia.
Singapore is one of the original Four Asian Tigers and has a highly developed market economy, where tourism also forms a large part of the country's economy and the main tourist destinations are:
Universal Studios Singapore, Marina Bay Sands and Resorts World Sentosa casinos, Adventure Cove Waterpark™, Gardens by The Bay, Merlion Park, Wave House Sentosa, Marine Life Park™, River Safari, Art Science Museum, Songs of the Sea, Singapore Flyer, iFly.
Italian textile machinery sector to develop cashmere processing in Mongolia
July 18 (Knitting Industry) Meetings of ACIMIT with the local authorities, held during the recent trade industry mission organised by the Association and the ICE- Italian Trade Agency in Mongolia, have confirmed the need for modernising existing technology for the processing of cashmere.
ACIMIT President Raffaella Carabelli said: "Mongolia is a market in which Italian machinery manufacturers can find excellent opportunities, thanks to the expertise they have developed in the technology required for the production of this raw material."
Presenting technology
An institutional trade mission in Mongolia, organised by ACIMIT (the Association of Italian Textile Machinery Manufacturers) and Italian Trade Agency, took place from 7-9 July in Ulaanbaatar.
A total of nine Italian machinery manufacturers, among which ACIMIT's affiliated members, presented their latest and most suitable technology for the processing of cashmere during the course of the symposium 'Italian advanced textile technology and Mongolian cashmere sector: a winning partnership'.
The companies included Bellini, Bianco, Bigagli-Proxima, Cormatex, Fadis, Stalam and Sant'Andrea Novara. The Italian contingent declared themselves satisfied with the proceedings, as they were also permitted to visit some important local manufacturers, eliciting interest among local businesses.
Developing textile industry
The three-day mission on Mongolian soil also served to strengthen ties between the local authorities and ACIMIT's management. The Vice-Minister for Industry and Agriculture, B. Tsogtgerel, presented a Mongolian project to develop the textile industry in the country, processing the majority of the raw cashmere wool currently exported.
Within five years, the quantity of unprocessed raw material shipped out to foreign markets is essentially expected to disappear, compared to the current 6,300 tons exported.
Trade possibilities
Raffaella Carabelli commented: "Local processing of cashmere will broaden possibilities for trade within Mongolia for Italian manufacturers, who for years have been at the forefront in supplying suitable technologies for the processing of this prestigious raw material."
In 2013 alone, 68 million euros in investments were set aside for the development of new production technologies, and another 145 million euros are expected for a further increase in production capacity.
Carabelli added: "We are looking at numbers that will provide a healthy boost for the cashmere industry in Mongolia, beginning with the spinning sector, and subsequently the knitting, weaving and finishing sectors."
Italian textile machinery industry
ACIMIT represents an industrial sector comprising around 300 companies and producing machinery for an overall value of EUR 2.3 billion, with exports amounting to 84% of total sales.
Italian textile machinery is sold in around 130 countries worldwide. www.acimit.it
Making opportunities in Mongolia
The Dingle native has a keen sense of adventure, leading her to Ulan Bator
July 11 (The Irish Times) Given the Irish obsession with the weather, you'd wonder why anyone would actively choose to move to the coldest capital on the planet. But in 2011, 31-year-old Adrienne Youngman from Dingle did just that.
Within three months of marrying her fiancé Tom, she agreed to move with him to Ulan Bator in Mongolia, having never set foot in the country.
But as risky as it may sound to emigrants who prefer to tramp the well-worn trail to Australia, New Zealand and Canada, a closer look at Youngman's background makes it easier to understand why moving to one of the most isolated places in the world wasn't as daunting as it seems.
As a small child, Youngman and her family moved to Zimbabwe for three years, after her father answered a call for teachers to help stabilise the country after independence.
"When we arrived, there was nowhere for me and my sister to go to school, so my mother set one up."
The family returned to Dingle when Youngman was six-years-old, where they stayed until she was 10. "It was a beautiful place to grow up; I was schooled in Irish and still consider Dingle home and Irish my first language."
The family then moved to London where she spent her teens and eventually went on to study English literature at Cambridge.
After working for a couple of companies as a management and brand consultant, she landed a role with alcohol giant Diageo in 2007 and, once again her passport began to fill up with stamps.
"It was a fantastic place to work. I got to live in Spain and Russia. My job was about strategising and the global marketing of Captain Morgan rum."
Sense of adventure
She met Tom and the pair decided to get married in 2011. While many couples would feel under pressure to start putting down roots, Youngman had found someone who shared her sense of adventure.
"We decided to start looking for work abroad. Initially I thought I would move within Diageo and we considered Asia, Latin America and Africa, but in the end it was Tom who got offered a job as a general manager in Mongolia."
While in Mongolia the couple noticed a gaping hole in the recruitment sector and decided to dive in, as Tom had experience in the industry.
"So we did a bit of research and decided to go for it and set up the Mongolia Talent Network. We spent the first month working from our flat. It was challenging being married to your business partner, as we literally talked about nothing else. So as soon as we could, we rented an office and agreed to keep things as separate as possible."
The agency aims to help both Mongolians and ex-pats find jobs, but that's not as straightforward as it sounds.
"There are a lot of rules about employment here. The government want jobs to stay with locals and there are restrictions on hiring here. The standard quota is that a company can only employ one foreign worker for every Mongolian."
Despite its vast geographical size, Mongolia's population is less than three million, with a working population of just over a million. In the past few years the economy has seen rapid growth in both the mining and financial sectors, but the number of people qualified to work in these industries struggles to keep up.
"There's a real shortage of specific qualifications and depth of experience here. Despite this being a mining-driven economy, less than 2 per cent of graduates finished with a mining-specific degree last year. Qualifications like law and engineering are also under-represented.
"The challenge is to find and recruit locals as well as ex-pats that have experience in emerging markets such as Mongolia. That has meant a significant demand for our type of work. We currently employ 10 people in Ulan Bator and hope to expand the business internationally in the coming months."
Surprisingly cosmopolitan
But despite having itchy feet professionally, the mum-of- one says Mongolia is home for now. "I love it here. The people are very friendly and despite the cold you get a lot of beautiful crisp sunny days. The ex-pat community is very supportive and it's more cosmopolitan than people might think. We are trying to learn Mongolian, but it's not an easy language to master.
"I've even managed to find one other person who can speak Irish to me, so I still have a connection with home. I'd also like to teach my son Oli how to speak Irish when he's old enough. He might not need it commercially but it could be handy to have our own secret language!"
Mogi: as one friend put it: was this written 3 years ago?
Investing in Mongolia: Why Every Mongolian is a Millionaire
By Carl Delfeld
July 15 (Wealth Daily) When I unexpectedly received an invitation to the 1991 opening of the Mongolian Stock Exchange, I thought, "Why not?"
After all, this was the new frontier. I was expecting a real "Wild West," since the country had just broken free from Russia to form a fledgling democracy.
But I got more adventure than I bargained for. In fact, I was lucky to get out of there alive.
The first challenge was handling the tumblers of vodka. Mongolia has the honor of being the highest per-capita imbiber of vodka in the world.
Now, I like a martini or two. But as the dozens of toasts with pints of vodka and calls of "bottoms up" went on late into the evening of my arrival in the capital of Ulan Bator, I nearly drowned in the stuff.
The second day, we went by Jeep deep into the rugged steppe for a traditional Mongolian barbecue, capped by races to the top of mountains and a midnight Mongolian wrestling match on some cliffs.
I managed to win the race in my Nikes, but a slip here or there during the cliff wrestling would have led to my unfortunate demise.
3 Million Mongolians
About half of Mongolia's population of 3 million lives in Ulan Bator. To put things in perspective, the country is two times the size of Texas — but the Texas economy is 100 times larger. That creates a massive growth potential.
Mongolia is sitting on a treasure trove of resources. Its top ten mines alone, holding coal, copper, gold, uranium, and rare earths, are worth $2.75 trillion.
This makes every Mongolian a resource millionaire — if the country can get its act together and get this stuff out of the ground and to global markets. Corruption and red tape are major issues, and inflation tops 20% as the gold rush mentality takes hold.
Still, the willing buyers are certainly there. Billions in new capital pumped into the economy is fueling a stunning 15%-plus increase in the country's GDP each year. And KFC, Louis Vuitton, Versace, and IMAX have opened for business.
Surprisingly, Mongolia beats out China, Vietnam, Philippines, Brazil, and India in the World Bank's "ease of doing business" survey.
But the Mongolia Stock Exchange is not for the faint of heart. The brave have been rewarded with returns of 121% in 2010 and 58% in 2011, but in 2012, it pulled back 19%. Over the last year, it has rebounded 9%.
There are 332 companies listed worth about $3.2 billion in total. About one-fifth of these companies are in the mining sector, and the exchange is only open from 11 a.m. to 2 p.m. each day.
And even if you can stomach the uncertainty, there are only a few ways you can participate in this frontier opportunity.
A Shot of Mongolia
Temasek, Singapore's investment arm, took a 5.5% stake in Canada's Ivanhoe Mines, which has a 66% share of Mongolia's Oyu Tolgoi gold and copper mine located on the Mongolia-China border.
The Oyu Tolgoi deposits reportedly contain 79 billion pounds of copper and 45 million ounces of gold. Australia's Rio Tinto (NYSE: RIO) has already spent $7 billion to prepare the mine for operations.
There is also an ETF you should keep an eye on. Launched in April 2013, the Global X Central Asia & Mongolia Index ETF (NYSE: AZIA) tracks the performance of 22 securities from the various nations that have exposure to the central Asia and Mongolia region.
This ETF needs to boost its trading liquidity, and about 75% of its total assets are in its top ten holdings.
A small shot of Mongolia could lead to some handsome profits.
Until next time,
Carl Delfeld for Wealth Daily
Toyota Awards Naadam Wrestling Champion with Land Cruiser
July 16 (infomongolia.com) The 2014 National Naadam Festival's winner in the traditional wrestling tournament, Namsraijav BATSUURI, who achieved a State Lion title after 9 rounds and runner-up, new State Garuda Shirbazar JARGALSAIKHAN have been rewarded with considerable prizes.
The presenting ceremony of grand prix pledged by Toyota Corporation was held at the beginning of Deeltei Mongol Festival, where CEO of East Asia and Oceania Division Toyota Motor Corporation Toshiro Hidaka conferred a key of Toyota Land Cruiser 200 SUV to State Lion N.Batsuuri on July 13, 2014. This year, the Toyota Company has collaborated as an Official Partner of Mongol Naadam and during the presenting ceremony, the Naadam Organizing Committee's Chairman, Deputy Prime Minister D.Terbishdagva, City Council Chairman D.Battulga, City Mayor E.Bat-Uul and other officials were present.
Also, the Uvs Aimag Council presented a key of 4-room apartment in Ulaanbaatar to State Lion N.Batsuuri, resident of Khovd Sum, Uvs Aimag, wrestler of "Uvs Nuur" arena during the "Uyachdiin Naadam" or Horse Trainers Festival held on July 13, 2014.
So, the Zavkhan Aimag Council awarded the State Garuda Sh.Jargalsaikhan with brand new Lexus 570 SUV and key of 3-room apartment in UB, who was born in Ider Sum, Zavkhan Aimag, wrestler of "Zavkhan" arena and runner-up in the traditional wrestling tournament.
Moreover, the Naadam Organizing Committee rewarded the winner N.Batsuuri with 15 million MNT (Tugrug) and runner-up Sh.Jargalsaikhan with 10 million MNT respectively.
Pizza Hut Mongolia Launches in Ulaanbaatar
July 16 (infomongolia.com) The grand opening ceremony of Pizza Hut in Mongolia was held in Ulaanbaatar on July 14, 2014, an American restaurant chain and international franchise, which is a subsidiary of Yum! Brands, Inc. that first opened its KFC restaurants in UB last year.
The Pizza Hut that offers different styles of pizza along with side dishes including salad, pasta, buffalo wings, breadsticks, garlic bread and desserts was successfully brought to Mongolia by Tavan Bogd Foods LLC, as subsidiary of Tavan Bogd Group.
At the opening ceremony Ambassador Extraordinary and Plenipotentiary of the United States to Mongolia Mrs. Piper Anne Wind Campbell, Governor of Bayangol District Mr. Demberel OROSOO, General Manager of Yum! Restaurants International, Asia Franchise, Mr. Vipul Chawla, CEO of Tavan Bogd Foods LLC Mrs. Dashdavaa KHULAN and other officials were present.
Pizza Hut Mongolia consists of three main concepts: Dine-In Restaurant, Delivery and Express, and is starting with Delivery and striving to build delivery network to cover subzones of Ulaanbaatar, where infrastructure is developed. Also, the chain's first restaurant is located in the III-IV micro-district known to be the most bustling area in Ulaanbaatar city and the franchisee plans to open a total of 5 stores in 2014, and orders made only on-line between 10:00 and 24:00.
Toyota proposes working with UB on traffic safety
Ulaanbaatar, July 13 (MONTSAME) Mayor of Ulaanbaatar city E.Bat-Uul Sunday received Mr Toshiro Hidaka, an executive director of the Toyota Corporation in charge of East Asia and Pacific countries' affairs.
The Mayor thanked the guest for giving the Toyota "Land Cruiser-200" to the winner of the national wrestling tournament of the Naadam as a gift and introduced to Mr Hidaka a general plan of developing the capital city until 2030.
Noting that the Toyota Corporation always shows technological achievements in the world vehicle market, Mr Bat-Uul said Ulaanbaatar wants to cooperate with the Toyota in all possible forms.
In response, Mr Hidaka said he is happy to sponsor the national wrestling competition and proposed collaborating not only in the car trade but also in ensuring the traffic safety. The Corporation is cooperating with many countries in this direction, he added.
The Mayor thankfully received the proposal and promised to develop the cooperation.
DBM to issue ₮29 billion for construction & renovation of four roads in UB
Ulaanbaatar, July 17 (MONTSAME) The cabinet meeting on Wednesday decided to issue some 29 billion togrog from the Development Bank for financing a construction/renovation of four auto roads in the UB city.
It will be a part of the Government and the UB city's 2012-2016 action platform, according to which 212 km auto roads will run and 350 km will be renovated/expanded.
The cabinet also resolved that the money will be paid back to the Bank by a way of putting 20 billion with an interest to the government's budget in 2015 and 8,6 billion with an interest—to the city's budget of the same year.
Buildings damaged in recent Naadam fire undergoing immediate repair
July 18 (UB Post) Three apartment buildings located west of the Embassy of the Russian Federation in Mongolia in 40 Myangat (near State Department Store), caught fire on Monday, July 14. Fire fighters extinguished the fire after three hours.
A section of Peace Avenue between West Central Intersection and Chinggis Square was temporarily blocked during fire-fighting efforts.
"The fire broke out on the roof of one of the buildings and spread to the other two, but we successfully prevented the fire from going downstairs. Residents complained that it took us a long time to extinguish the fire. However, if we used all 200 tons of water available in our 23 fire trucks, which were there to extinguish the fire as soon as possible, the three buildings would've been completely flooded," explained Deputy Chief of National Emergency Management Agency D.Erdenebaatar.
He reported that a working group appointed by the Ulaanbaatar City Governor is currently working on fire damage assessment and starting repairs right away.
Residents reported that the fire was caused by electricity problems of one of the service businesses operating on the ground floor of the building. Regarding this claim, D.Ganbaatar noted, "Over 20 businesses operate on the ground floor. If the investigation proves that the faulty electricity settings of the businesses were responsible for the fire, we will have the accused pay for the compensation of the residents."
Ulaanbaatar Partnership International Exhibition 2014 Taking Place on September 11-15
July 16 (infomongolia.com) The 18th edition of Ulaanbaatar Partnership International Exhibition will be taking place at Misheel Expo Center in UB organized by Mongolian National Chamber of Commerce and Industry (MNCCI) in association with Capital City Administration on September 11-15, 2014.
During the event, Asia-Pacific Summit will be convened at MNCCI, where member companies of Matrade (Malaysian External Trade Development Corporation) and Taitra (Taiwan External Trade Development Council) are pledged to participate.
Preliminary, over 40 entities from Japan, Malaysia and Taiwan as well as Mongolian entrepreneurs have been requesting to take part in order to promote their activities, products and services.
The Exhibition will be displayed in the following categories:
- Construction and building materials
- Banking and credit opportunities
- Machinery and equipment
- Pharmaceutical and medical products
- Wool and cashmere
- Food and food products
- New technologies
- Leather products and souvenirs
- Household appliances
- Jewellery
In Ulaanbaatar Partnership 2013, over 50 companies from China, Japan, Poland, Russia, Singapore, South Korea, Taiwan and United States along with Mongolia's over 90 entities have participated.
Best sculptures selected at Ulaanbaatar Sculpture 2014 Festival
July 20 (UB Post) One of the main features that showcases a city's character is its sculptures. For the first time, the Office of the Ulaanbaatar City Governor and Mongolian Arts Council organized the Ulaanbaatar Sculpture-2014 festival to celebrate the public art of Ulaanbaatar.
Thirty sculptures were presented at National Garden during Naadam Festival and every sculpture had its own meaning. The creators of the best three sculptures were awarded a memorial cup and five million MNT on Friday, followed by sponsor prizes.
The sculptures won't be handed back to their owners, but their creators will keep their artistic copyright.
Ulaanbaatar to Turn Waste Disposal Site into Sea Buckthorn Grove
July 20 (UB Post) A ravine in the 13th khoroo of Khan-Uul District, where residents in the neighborhood dispose of their solid waste, will soon be turned into a sea buckthorn grove as part of the Model Khoroo program of the Office of the Ulaanbaatar City Governor and the Asia Foundation.
The program received upgrade proposal drafts from ger area residents throughout Ulaanbaatar, and selected several drafts for further consideration. Nine locations in ger areas of six central districts will be upgraded with Model Khoroo program funding this year.
Another project launching shortly will clean up the accumulated solid waste in the 14th khoroo of Sukhbaatar District and build a public park for the residents on the site. A 75 meter long sidewalk, greenery and a park will be developed in the area as part of the project.
Mogi: nice, he's his envoy now, well, in matter of DPRK perhaps he should be, but then again, DPRK is a big part of his railway agenda
Envoy of Mongolian leader arrives in N. Korea
SEOUL, July 14 (Yonhap) -- A special envoy of Mongolian President Tsakhia Elbegdorj arrived in Pyongyang on Monday, North Korea's state news agency said.
Khaltmaa Battulga, a member of Mongolia's parliament, and his entourage arrived in the North, the official Korean Central News Agency said, without giving further details.
The trip came on the same day North Korea fired about 100 artillery shells into the sea off the country's east coast from near the heavily fortified border, in its latest show of force against South Korea.
In October, Elbegdorj visited North Korea but did not meet with his North Korean counterpart Kim Jong-un.
Elbegdorj was the first foreign head of state to visit Pyongyang since 2011 when Kim took over the country following the sudden death of his father and long-time leader Kim Jong-il.
Mongolia's tango with Pyongyang
Ulan Bator's partnerships, diplomacy offer the U.S. some lessons in North Korea policy
By Jort van Oosterhout - Jort van Oosterhout holds a master's degree in international relations with a specialization in international security and foreign policy analysis. He currently works as a freelance policy analyst based in Amsterdam.
July 16 (NKNews) On May 23 Mongolia provided North Korea and the United States neutral ground in its capital for track 1.5 meetings. Presumably, North Korea's chief nuclear envoy met with two former U.S. State Department officials to discuss resumption of the Six Party Talks, which have been at a complete standstill since 2009. Ulan Bator has been keen on normalizing Pyongyang's fractious relations with its adversaries and assist its Soviet-era ally in implementing economic reform. In this way, Mongolia has unveiled an alternative strategy that could incrementally reconfigure Pyongyang's behavior, offering the U.S. some lessons for its failing North Korea policy.
As a Soviet satellite, Mongolia was the second country to recognize North Korea, and sheltered more than 200 orphans who lost their families during the Korean War. Ulan Bator continued its charitable moves after its democratic transition, delivering food aid numerous times during North Korea's hardships in the 1990s. Even though bilateral relations made a downturn after Mongolia's post-communist strategic swung towards South Korea (Ulan Bator stepped up its trade with Seoul during the 1990s), they were revamped in 2002 after North Korean Foreign Minister Nam Sun Park made the first high-level visit to Mongolia in 14 years.
Earlier this year, Ulan Bator actively sought to thaw relations between Japan and North Korea by inserting itself as an intermediary in the abduction conflict. In March, a Japanese woman who was abducted at age 13 by North Korean agents was reunited with her parents in Mongolia (Mogi: actually, the daughter of the abducted woman, claimed dead by DPRK, met with her grandparents). Meanwhile, Ulan Bator props up North Korea's impoverished economy through cooperation and investment in industry, tourism and agriculture.
While many human rights advocates denounce these efforts as doing nothing but reinforcing Kim Jong Un's stranglehold on North Korea, economic cooperation and dialogue could offer the only viable opportunity for meticulously changing the country from within. U.S.-spearheaded sanctions and international isolation of the "Hermit Kingdom" have not brought the defiant Kim family to its knees over the past 50 years. Notwithstanding the gruesome atrocities carried out by the regime against its people, simply condemning the North for its deplorable human rights record from the sidelines will not deliver any significant results. Nor will choking off its economy. These policies have been tried for a long time to no avail. Diplomatic coercion has primarily solidified Pyongyang's obstinate behavior, while only providing the West with moral justice on its side.
THE MONGOLIAN MODEL
Mongolian President Tsakhiagiin Elbegdorj visited the reclusive state in October last year to cement a longstanding friendship. At the renowned Kim Il Sung university, he gave an unprecedented speech about freedom, upholding the rule of law and respecting human rights. "No tyranny lasts forever. It is the desire of the people to live free that is the eternal power," thus Elbegdorj stated. He urged North Korea to emulate Mongolia's transition model while implicitly encouraging Pyongyang to provide freedom to its people. Probably baffled by its content, no questions were asked by the professors and students in the audience. Instead, the speech was followed by lengthy applause.
What was particularly prudent about this visit, was that along with this value-laden speech, were lucrative cooperation and investment deals. Seeking to ease both countries' dependency on China and Russia, Elbegdorj concluded significant trade and cultural accords. Through warming its relations with Pyongyang, some analysts claim that landlocked Mongolia seeks to obtain sea outlets to ship its energy resources and minerals to other Asian nations, and thus ironically gain potential access to international markets.
Ulan Bator has been pushing the Kremlin for rail construction to the North Korean port of Rajin, which would connect Mongolia with the North via Russia. Apart from being potentially profitable, these engagement efforts make Ulan Bator a crucial stakeholder in North Korea's economy, rendering it increasingly costly for Kim Jong Un to ignore Mongolia's calls for more freedom and stability on the Korean peninsula.
Mongolia's thriving mining industry has fueled the country's rapidly growing economy. According to the Economist, Mongolia was one of the top performers in 2013, expanding its GDP at a rate of 11.7 percent. North Korea, for its part, is seeking to implement its Byungjin policy of parallel nuclear development and economic expansion, irrespective of the United Nations (UN) sanctions regime. It has been reaching out to friendly nations such as Mongolia and Indonesia to attract foreign trade and investment, and modernize its economy.
Last September, the Mongolian oil trading and processing company, HBOil, bought a 20 percent stake in North Korea's Sungri refinery. HBOil announced that it would supply crude oil to the state-owned refinery for processing, and subsequently re-import refined products to Mongolia. By planting itself firmly into the North's economy, and engaging it on a diplomatic level, Mongolia is potentially able to influence Kim Jong Un's policies. Elbegdorj's landmark speech may well indicate a readiness by Ulan Bator to utilize this privileged position vis-à-vis Pyongyang.
In line with its economic ascendance, Mongolia is translating its growing status into numerous prolific initiatives to bolster its diplomatic footprint within the Central and Northeast Asian neighborhood. The Elbegdorj administration conceives itself as a potential broker in Korean affairs, being the only country both Koreas trust. Mongolia's foreign minister, Luvsanvandan Bold, underlined these aspirations, telling reporters that "Ulan Bator can be a useful platform to create understanding." He stated, "What Mongolia can provide is leverage to improve the situation in the region and pursue the initiative for parties to share dialogue."
A PRAGMATIC APPROACH
Also, Mongolian construction and manufacturing firms have hired around 1,700 North Korean laborers to work in Mongolia. Bilateral agreements allow for 5,000 North Koreans to work there. Even though the Kim regime absorbs a large chunk of their remunerations, it remains incredibly lucrative for North Koreans to work abroad. What is particularly promising, is that these labor exchanges, however limited, expose North Koreans to the relative riches and plural perspectives of the outside world. Most experts on Korean affairs argue that first-hand experience in other countries, especially in post-communist Mongolia where people have recently lived through a democratic transition, could slowly modify their frame of reference by infusing them with information that deviates from the Pyongyang propaganda narrative.
Besides their converging interests in regional security and monetary benefits, both countries share common geopolitical concerns: Russian and Chinese dominance within Central and Northeast Asia, and preservation of political and economic maneuvering space. Mongolia's foreign policy agenda is replete with experience in balancing economic, military and political interests between its two neighbors. It has learned to deal with its geographic confines and still been able to maintain constructive relations with both Moscow and Beijing, cultivate close relations with powerful though distant nations such as the U.S., and project its regional interests successfully.
This pragmatic foreign policy, famously depicted as Mongolia's Third Neighbor Doctrine, has mitigated pressure from China and Russia while simultaneously seeking to bring beneficial terms to the table in trade and diplomacy. It has avoided potential territorial disputes and nationalist tensions by stoically adhering to this long-term strategy, which is multilateralist and realist by nature. Following the recent Crimean conflict, which critically exposed the intimate Russian-Chinese connection, Ulan Bator will have to balance within its complex geopolitical environment once again.
North Korea is confronted with tightened UN sanctions and strained relations with its traditional patron in Beijing. Kim Jong Un thus eagerly embraces Ulan Bator's outreach, enabling him to counterbalance external coercion. These overlapping geopolitical and security interests, in combination with shared economic goals, provide ample opportunity for Mongolia to try and change Pyongyang's relations with the outside world, ameliorate its debilitated economy, and perhaps even encourage them to implement tentative political reform.
Of course, next to an appreciation of Mongolia's goodwill, North Korea's candidness towards the former also illustrates Ulan Bator's geographical distance from the Korean Peninsula and weakness relative to Beijing, Washington, Moscow, Tokyo and Seoul. Notwithstanding the fact that Mongolia is developing itself into a strategic economic partner of Pyongyang, these greater powers possess far more potential leverage over the North.
However, Mongolia's activist approach towards North Korea does offer some basic guidelines for a more sensible strategy. The Obama administration's current policy of strategic patience (which most Korea observers refer to as "doing nothing"), did not bring about any efforts towards denuclearization or a desired change in North Korean behavior; rather the opposite. Nor did diplomatic isolation and punitive sanctions alter the regime's actions or hamper its continuity during the last five decades.
Even though North Korea remains anxious about its security position in East Asia, and is therefore hard to deflect from its strategic-military arrangement, Mongolia's approach of investing in the North and becoming a stakeholder in its development, represents a far more promising alternative. Elbegdorj's speech surely testifies to its potential.
Elbegdorj to Meet Abe in Japan During Visit, July 21-24
July 20 (UB Post) Mongolian President Ts.Elbegdorj is going to pay a working visit to Japan, from July 21 to 24. During the visit President Ts.Elbegdorj will meet with Prime Minister of Japan Shinzo Abe, where both sides are expected to sign a statement on cooperation.
President Ts.Elbegdorj will also hold meetings with the head of the Japanese Parliamentary Friendship Group, members of the public, public sector organizations, Japan Business Federation (Keidanren), Japan External Trade Organization (JETRO), and presidents of the Japan-Mongolia Economic Committee. Also, President Ts.Elbegdorj will give a presentation at a Mongolia-Japan business forum organized in cooperation with Keidanren
While he is attending the business forum, he will speak about the environment and potential of Mongolian investments and promote building projects planned for implementation in Mongolia with support from the Japanese private sector.
Mongolian and Japanese business organizations plan to host a business networking event in collaboration with JETRO, in order to foster and enhance communication and cooperation between the Mongolian and Japanese private sectors.
Mongolia Considers Establishing Mid-Term Strategic Partnership Development Program with Russia
July 17 (infomongolia.com) At the Cabinet meeting of Government held on July 16, 2014, one of the issues discussed was "Mid-Term Strategic Partnership Development Program" to establish between Mongolia and the Russian Federation.
Following the revision it was agreed to negotiate with Russian part and exchange opinions on some issues, after which to re-submit to the Cabinet meeting obliged by Foreign Minister of Mongolia L.Bold.
Within the scope of this Program, outlook for trade and economic cooperation between Mongolia and Russia in the next five years would be determined and clarified. In addition, cooperation in political, defense, security, law enforcement and humanitarian areas as well as partnership in regional and international spheres would be reflected comprehensively in this Program.
During the President Ts.Elbegdorj's visit to Shanghai on May 20 and Prime Minister N.Altankhuyag's visit to St. Petersburg on May 23, 2014, Mongolian leaders mentioned to establish the Program during the meeting with the President V.V.Putin and the Russian side accepted the proposal positively.
Mongolia and the Russian Federation established the Friendly Relations and Partnership Agreement on January 20, 1993 and Strategic Partnership in 2009.
Related:
Strategic program considered – Montsame, July 17
China-Mongolia-Russia Economic and Trade Partnership Forum to Be Held in Inner Mongolia, August 20-24
July 16 (infomongolia.com) Mongolian National Chamber of Commerce and Industry (MNCCI) in collaboration with the People's Government of Inner Mongolia Autonomous Region are organizing "China-Mongolia-Russia Economic and Trade Partnership Forum and Exhibition 2014" in Erlian city of Inner Mongolia on August 20-24, 2014.
This year's Economic and Trade Forum is themed under "Public Trust & Innovation, Development and Cooperation" and will be held in the frames of national manufacturing and import commodity exhibitions and promotion for projects as well as a trade fair.
The trade fair will take place in the newly erected Exhibition Hall in Erlian on August 20-24, so the Project and Forum will convene at the People's Government of Inner Mongolia on August 20-22, 2014.
During the Forum, some local administrative organs and entities from China, Mongolia and Russia will discuss issues of development in trade, investment and partnership focused on mining, infrastructure and other sectors. Also, many projects will be introduced and entrepreneurs need investment will be provided with opportunity to seek partners and tete-a-tete meetings will be also organized.
In conjunction, the 10th Trilateral Business Forum between Mongolian, Russian and Chinese Chambers of Commerce was successfully organized in Ulaanbaatar, Mongolia in June 2014.
Political, economic conjuncture could mean a new era of trilateral cooperation between neighbors Russia, Mongolia, China
July 13 (business-mongolia.com) Hence famous expression; whether you like it or not neighbours are eternal: China and Mongolia had been eternal neighbours for thousands of years and Russia is also Mongolia's eternal neighbour in the north. Since the Crimean event, the energy route to Europe from Russia has been shifting, and just a month ago, the two giants, a consumer and a supplier, signed a USD30 billion gas deal to cement their cooperation in the changing international environment.
Few reckoned that Mongolia is being left out in the trilateral cooperation. However, soon after the gas deal, Russian Rosneft and Mongolian NIC signed a long-term petroleum deal. Moreover, last May Speaker of the Mongolian State Great Khural met the Chairman & CEO of China Investment Corporation Mr. Ding Xuedong. Two parties restated the importance of China's investment for the country's development, especially in infrastructure sector. Furthermore, the Chairman specified that coal gasification project that would require USD30 billion to develop believes that SGK will provide tax reliefs that would make the project possible. Mongolia has been contemplating coal to oil and coal gasification projects for some time.
In the coming month, President of Russian Federation Vladimir Putin will visit the country on 75th Anniversary of joint Mongolian and Soviet Khalkhin Gol Battle against Japanese Empire. In conjunction, President of PRC Xi Jinping will pay high level official visit to the country. This could be a decisive and next level cooperation between the countries in the new changing economic and political environment. Also, it could be a stepping stone on country's ambition on becoming integrated with newly establishing logistic route from Asia to Eurasia and Europe.
Bank of China, a first Chinese bank, opened its representative office in Mongolia last year, and this year, it would become eligible to open its official branch according to the country's law. It already issued its multimillion dollar loan to local Tuushin Group earlier this year. Also, it would facilitate new investments in the country through project financing and short-term loans.
One of the vital negotiation during the two country's presidents would be conducting trades in their respective currencies, Roubles with Russia, and RMB with China. Bank of Mongolia already in swap agreement with China on RMB. Also, it borrowed a billion dollar to ease the country's currency depreciation. It has been said that it could borrow USD3 billion more if necessary.
In the times of financial and economic difficulties, trilateral and joint economic initiatives would be beneficial to all sides. Three of the neighbours need each other more than ever in these times.
Foreign Minister of Canada to Pay First Official Visit to Mongolia
July 17 (infomongolia.com) The Minister for Foreign Affairs of Canada Mr. John Russell Baird will be paying an official visit to Mongolia on July 23-25, 2014.
At the Cabinet meeting held on July 16, a draft guidance to adhere by Mongolian part during the visit of Foreign Minister John Baird was discussed and agreed to be ratified by Prime Minister N.Altankhuyag.
This is the first visit to be carried out at Canada Foreign Minister-level and considered with high significance. During the visit, Foreign Minister J.Baird will be received by the Prime Minister of Mongolia N.Altankhuyag and Deputy Speaker of the State Great Khural (Parliament) R.Gonchigdorj, who is a Chairman of Mongolia-Canada Parliamentary Group. Also, the two Foreign Ministers of Canada and Mongolia will hold an official talk and a meeting with Mining Minister D.Gankhuyag is also included in the program.
Canada and Mongolia have a cooperative bilateral relationship, which includes significant Canadian investment interests in the mining sector of Mongolia, where both sides are seeking to expand bilateral and multilateral ties, and the diplomatic relations between Mongolia and Canada were established on November 30, 1973.
Related:
Foreign Minister of Canada to visit – Montsame, July 17
Chinese President Xi Jinping to pay a visit in August
July 18 (UB Post) President of China Xi Jinping plans to conduct an official visit to Mongolia this August. During July 16's governmental meeting, the Government of Mongolia instructed Economic Development Minister N.Batbayar to oversee preparations for the state visit, according to Mass Media News Agency.
It has been more than 60 years since Mongolia and China established diplomatic relations, and the countries established strategic partnership relations in 2011. Under the strategic partnership, the sides agreed on strengthening collaboration in the political, economic, minerals and energy sectors. The strategic partnership agreement states that the sides will support active, mutually beneficial cooperation on vested projects such as Oyu Tolgoi and Tavan Tolgoi. China will promote the development of Mongolia's domestic manufacturing, and the agreement states that both sides will actively collaborate on the entity investment sector and the construction and management of Sainshand Industrial Park.
Analysts say the destiny of the recovery of the Mongolian minerals sector, currently in decline, will depend on the upcoming official visit of Chinese President Xi Jinping. Railway issues are also expected to be touched upon, reported News.mn.
SCO membership in sight for Mongolia — China's FM
Mongolia has held an observer status in the Shanghai Cooperation Organization for the last 10 years
BEIJING, July 11. /ITAR-TASS/. After ten years as an observer state, Mongolia may become a full member of the Shanghai Cooperation Organization (SCO), comprising states in Eurasia and East Asia, Chinese Foreign Minister Wang Yi said.
"We have great prospects for the development of the SCO," Wang Yi told a reception in Beijing on the occasion of the 13th anniversary of the organization's foundation. "There are currently five observers and three dialogue partners in the organization."
"We have received a message from the Mongolian prime minister on the occasion. Although we have not scrutinized the contents of this message yet, we regard it as a good signal," he added. "Ten years have passed, and it is time to consider preparations for granting Mongolia a status of a full-fledged member of the SCO."
Founded in 2001, the Beijing-based Shanghai Cooperation Organization is composed of Russia, China, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan. The security organization consolidates efforts to counter terrorism and radicalization in member-states, and also works in other spheres such as politics and trade.
Afghanistan, India, Iran, Mongolia and Pakistan have observer status, while Belarus, Sri Lanka and Turkey are described as 'dialogue partners'.
Will Mongolia Be The Next SCO Member?
by Joshua Kucera
July 14 (EurasiaNet) China's foreign minister has suggested that Mongolia could become the next full member of the Shanghai Cooperation Organization, even though Mongolia has appeared far less eager to join the organization than other aspirants like India, Iran, and Pakistan.
At an event marking the 13th anniversary of the organization, Chinese Foreign Minister Wang Yi said: "We have received a message from the Mongolian prime minister on the occasion. Although we have not scrutinized the contents of this message yet, we regard it as a good signal," he added. "Ten years have passed, and it is time to consider preparations for granting Mongolia a status of a full-fledged member of the SCO."
That's an odd statement, particularly regarding the Mongolian prime minister's message. And in the past, Mongolia hasn't shown too much interest in becoming a full member, although it's been an observer since 2004. There are a number of reasons for that, wrote local analyst Mendee Jargalsaikhan in a 2012 paper (pdf). For one, Mongolia's ties to Central Asia are not particularly strong. In addition, Mongolia is a relatively successful democracy, and "the SCO is perceived in Ulaanbaatar as an 'authoritarian club' whose members main concern is their own regime security," Mendee writes. And SCO membership also could diminish Mongolia's foreign policy independence, exemplified by its "third neighbor" strategy of courting allies other than its two massive geographic neighbors, China and Russia. "Joining the SCO could ... weaken both Mongolia's domestic democratization efforts, and its international image with the European Union or the United States," Mendee writes.
Also in 2012, Richard Weitz wrote that there didn't seem much interest from the SCO's perspective, either:
Russia and China have apparently decided that Mongolia cannot join the SCO anytime soon. In addition to its being a geographic outlier, NATO's recently expanding ties with Mongolia have attracted unfavorable commentary in the Chinese media, which accuses Mongolia of cultivating ties with NATO to balance and enhance its leverage with Beijing and Russia as part of its "third neighbor" policy. Mongolia has supplied troops to the NATO-led operations in Kosovo and Afghanistan, attended the recent Chicago summit, and become the first nation to receive an Individual Partnership and Cooperation Program from NATO.
So what may have changed? It's hard to say, but Mongolia may have come to the conclusion that in spite of the group's problems, it's useful to be part of the decision-making process, Mendee told The Bug Pit. "It could be better in the room when they divide the cake," he said. And from the perspective of Russia and China, as they get closer as a result of the West-Russia rift in Ukraine, they may be trying to shore up their alliances, and Mongolia's absence was "a challenge to the legitimacy of the SCO," Mendee added.
So far there doesn't seem to be any comment from Ulaanbaatar. The next SCO summit will be in September in Dushanbe.
China Seeks to Strengthen Mongolian Trade Links During August Trilateral Summit
By: Alicia J. Campi
July 17 (Jamestown Foundation) This year Sino-Mongolian relations have been buffeted by a series of challenging interruptions: the Mongolian government's standoff with Rio Tinto over expanding underground mining operations at Oyu Tolgoi (OT) which will disrupt development of shipments of copper concentrate supplies to China, another Mongolian postponement in the repayment of $130 million worth of coal owed by Mongolia's state-owned Erdenes Tavan Tolgoi JSC since 2011 to Chalco (China Aluminum International Trading Co., Ltd), and the news that the former chairman of Mongolia's Petroleum Authority, Djashzeveg Amarsaikhan, who was a suspect in a money laundering conspiracy with Petro China Daqing Tamsag, suddenly died in prison ("Transparent Mining" press conference of April 30, 2014 reported by mad-intelligence.com, May 2, 2014; english.news.mn, May 14, 2014). Nonetheless, the Chinese have not allowed such factors to negatively impact the relationship during the China-Mongolia Friendship and Exchange Year.
This spring saw a spate of high-level Sino-Mongolian meetings in China which now appear to be steps that have led to a new wave of economic cooperation agreements. In late April, Chinese Vice President Li Yuanchao hosted a delegation from the opposition Mongolian People's Party and stated that "the Communist Party of China (CPC) and the Chinese government always deal with China-Mongolia ties strategically and with a long-term perspective" (Global Times, english.news.mn, April 26). On May 19 in Shanghai, Mongolian President Tsakhia Elbegdorj had met Xi prior to the Fourth Conference on Interaction and Confidence Building Measures in Asia (CICA) to discuss mining, infrastructure and financial cooperation. At that time Xi promised to support Mongolia's bid to enter APEC and emphasized China's desire to strengthen bilateral energy and mineral development (The Mongol Messenger, May 23).
China's Silk Road Economic Belt and Asian Infrastructure Investment Bank initiatives have also contributed to newly concluded agreements governing transport, finance, and construction cooperation concluded as part of the celebrations marking the 65th anniversary of the establishment of bilateral diplomatic relations and the 20th anniversary of the Treaty on Friendly Relations and Cooperation. Chinese President Xi Jinping has agreed to make a state visit to Mongolia in the latter part of August, at the same time as Russia's Vladimir Putin is in Mongolia to celebrate the 75th anniversary of the Soviet-Mongolian victory over the Japanese at Khalkhin Gol. Mongolian officials proudly labeled this a "Trilateral Summit" (announced at Ulaanbaatar Dialogue on Northeast Asian Security meeting, June 17). PRC Minister of Foreign Affairs, Wang Yi, then paid an official visit to Mongolia on June 24–26 to complete trip logistics (Mongolian Ministry of Foreign Affairs,www.mfa.gov.mn, June 25).
Coal continues to dominate Sino-Mongolian trade relations, despite the steep decline in coal prices on the world market. Mongolian coal exports to China from April 2013 to March 2014 grew 8.4 percent by volume, although their value fell by 1 percent, according to Mongolia's National Statistical Office. Agreement to export another 450,000 tons of coal to China was concluded between Mongolia and China's Shenhua Bayannaoer Energy Co. on April 17, 2014. Price per ton of coal was set at $48.50, with the stipulation that $17.4 million or 80 percent of the total estimated $21.8 million should first be transferred into Mongolia's account (infomongolia, May 2). However, the greatest potential growth for Sino-Mongolian trade will be in copper as the country moves toward a "copper economy" (Mongolian Investment Banking Group, "Economy—Mongolia Transitions into a Copper Economy," carried in mad-investment.com, May 5). Mongolia's copper concentrate export volumes increased 53 percent during the 2013–2014 period, which accounted for 35 percent of total mineral export earnings with sales totaling $349 million—a 67 percent increase. This was due to production from Rio Tinto's $6.5 billion Oyu Tolgoi mining investment. Mongolia's March 2014 overall trade turnover with China grew 9 percent over March 2013, even though the country's total trade turnover fell 1.6 percent (Reuters, April 23).
Financial Cooperation and the Asian Infrastructure Investment Bank
In late March, Mongolian Minister of Finance Chultem Ulaan and Shi Yaobin, the PRC Vice Minister of Finance, signed a Memorandum of Understanding agreement on cooperation in Ulaanbaatar. Shi also proposed that Mongolia become a founding member in the establishment of the PRC-initiated Asian Infrastructure Investment Bank, which seeks the participation of 15 Asian countries (montsame.gov.mn, March 28). During the subsequent April 28–29 visit of Chinese Finance Minister Lu Jiwei, Mongolian Prime Minister Norov Altankhuyag announced that due to the exceptional importance of infrastructure development to his landlocked country, the Government of Mongolia had agreed to become a bank founder (english.news.mn, April 28; montsame.gov.mn, April 29). While Lu was in Ulaanbaatar, a second meeting was held in Beijing of Chinese and Mongolian MFA officials from their respective Treaty and Law Departments to review the terms and relevancy of the 426 bilateral contracts and treaties which were established between 1949 and late 2012 (montsame.gov.mn, April 29).
The Chinese renminbi is now Mongolia's second most actively traded currency as bilateral ties in trade, economy and investment have become closer (Xinhua, May 6). The Bank of Mongolia said that in May it was extending for three years a bilateral local currency-swap line with the People's Bank of China and double its size to 20 billion yuan to increase confidence in the foreign-exchange market and strengthen the "off-balance" reserves buffer. The latest such swap was made in early July (The Mongolian Messenger, July 10). Because Mongolian foreign reserves have fallen amid lower export prices for copper and coal, its currency holdings stood at $2.44 billion at the end of January, 40 per cent lower than a year earlier. Mongolia's tugrik has declined 20 percent in the past 12 months, the sixth worst performance among more than 100 exchange rates tracked by Bloomberg. This decline is despite the fact that in the first two months of 2014 Mongolia's exports rose almost 18 percent to $594.6 million, while imports fell about 24 percent to $613.9 million—making the trade deficit of $19.3 million 94 per cent lower than in 2013 (National Statistics Office as reported in english.news.mn, March 20).
Sino-Mongol Rail Ties
Mongolia plans to spend $5.2 billion to expand its railway network (Reuters, April 9). In early May, the Mongolian Government submitted a resolution to the Parliament to allow for a mix of Chinese and Russian-gauge rails in Mongolia—a change from previous Mongolian rail policy requiring the use of Russia's wider gauge standard. This has the potential to dramatically change the way Sino-Mongolian trade is handled and grows, because it will permit for the first time the building of international-standard (1,435 mm) narrow-gauge railroad spurs across the Mongolian border with China for transporting raw minerals. Effective April 7, the Mongolian state-owned giant coal company of Erdenes Tavan Tolgoi (ETT), in consortium with privately-held Mongolian Mining Corporation, will invest with Chinese companies led by state-owned mining group Shenhua to establish a joint venture to build and operate a 20 km border railway linking the huge coal field of Tavan Tolgoi (TT) in the South Gobi region via the Mongolian Gashuun Sukhait port. The Shenhua group reportedly will take a 49 percent stake in this joint venture. This project initially will build a 13 km standard gauge cross-border line from the nearest Chinese railhead north of Baotou (Gants Mod) to a transloading terminal in southern Mongolia where coal will be trucked from the mines by road. A second phase would extend the cross-border link with Russian-style broad-gauge (1,534 mm) a further 27 km to meet the 217 km broad-gauge coal railway from the Ukhaa Khudag coking coal mine, which is being built by South Korea's Samsung C&T under a $483 million contract. Shenhua in October 2013 signed an agreement to buy one billion tons of coal from Mongolia over 20 years, which is now delivered by costly trucks (Xinhua, March 22; railwaygazette.com, April 11). There are additional plans for the Chinese gauge between Tavan Tolgoi and Gashuun Sukhait, Sainshand and Zamiin Uud, and Khuut and Bichigt to be used for direct rails to China. Mongolia and China hope that establishing narrow gauge railways will make coal export stages easier and costs cheaper so Mongolian coal will be more competitive and thus boost exports (english.news.mn, April 8). However, the fact that new northbound rail spurs to Russia using the Russian wide gauge also will be constructed between Tavan Tolgoi and Sainshand, Huut and Choibalsan, and Erdenet and Mogoin Gol indicates that Mongolia still is committed to creating the rail infrastructure to link its minerals to a 'northern corridor' via the Trans-Siberian Railways to deliver to new customers in the Asia Pacific (Udriin Sonin, May 7).
Intensified Construction Projects
On May 10, the Mongolian cabinet finally decided to allocate $193 million from a Chinese soft loan worth $500 million, which was promised in 2011 when the two nations announced their strategic partnership, to finance the construction of a hi-speed road along the Tuul River in Ulaanbaatar. This "Street Project" will be supervised by Mongolia's Economic Development Ministry (Montsame, May 13). Construction projects are now beginning operations in the power sector through a concession agreement executed by the Mongolian Ministry of Energy with China Machinery Engineering Corporation (CMEC) in 2013. The most significant project is the 348MW Amgalan Thermal Power Project (TPP). Mongolian partner companies and the Energy Development Center are building earth works, flood facilities, and a draining system. According to Ch. Tsogtsaikhan of Amgalan TPP Pre-Service Administration, there are a total of some 1000 Mongols and 800 Chinese now working on the project. Although there have been delays on the Mongol side, it is expected that CMEC will put the heating furnace into operation by October 15. The Amgalan TPP will be constructed at a cost of $75.9 million and will supply heating to some 50,000 households—one-fourth of the total 1300MW needs of Ulaanbaatar (The Mongol Messenger, May 16; infomongolia.com, February 4).
Conclusion
Meanwhile, the United States remains silent on Mongolia's ever-growing strong economic relationship with China. A bipartisan congressional delegation mission from the House Subcommittee on National Security led by Congressman Steve Chabot (R-OH), Chairman of the House Foreign Affairs Subcommittee on Asia and the Pacific, and Congressman Stephen Lynch (D-MA) visited Mongolia May 15–16 on a larger trip encompassing China and Ukraine. The stated purpose of the trip was "to conduct official discussions with high-ranking government leaders regarding political, economic and security issues affecting bilateral and regional relationships," but the only public statement emerging was a U.S. Embassy Ulaanbaatar press release that highlighted U.S.-Mongolian strategic relations and military cooperation (lynch.house.gov/press-release, May 15; U.S. Embassy in Ulaanbaatar, May 18).
TAKM to be reestablished after Mongolia quits
Mongolia quits the organization, Kazakhstan applies for membership
Baku. Rashad Suleymanov, July 19 (APA) The Organization of the Eurasian Law Enforcement Agencies with Military Status (TAKM) will be reestablished, APA reports quoting the Turkish Gendarmerie General Command.
Reason of the reformation of TAKM is that Mongolia did not sign the foundation agreement. In connection with refusal of Mongolia, the organization is decided to be reestablished.
According to APA, the initialism TAKM is expected to be changed.
The Organization of the Eurasian Law Enforcement Agencies with Military Status (TAKM) was established by Turkey, Azerbaijan, Kyrgyzstan and Mongolia in Baku on January 25, 2013.
U.S. Department of State: Mongolia National Day
John Kerry, Secretary of State, Washington, DC
July 11 (U.S. Department of State) On behalf of President Obama and the people of the United States, I extend our best wishes to the people of Mongolia as you celebrate your National Day on July 11.
Mongolia is more than a mosaic of different cultures and communities. It is a model for countries undergoing democratic transitions.
In the 24 years since Mongolia took its historic "decision for democracy," the Mongolian people have made great progress in building a society that celebrates diversity, respects the rule of law, and upholds the universal rights and fundamental freedoms that make all nations stronger.
By embracing these universal values, Mongolia has become a strong force for stability and a reliable partner. Our shared values and common interests will continue to unite our two governments and our two peoples.
The United States looks forward to strengthening our partnership in the years to come.
U.S. Army Civil Affairs Team Trains Mongolian Forces
JOINT BASE LEWIS MCCHORD, Wash., July 18 (DVIDS) - It's not every day you would expect to see American Soldiers in Mongolia, but members of the 84th Civil Affairs Battalion from Joint Base Lewis-McChord, Wash., conducted a three-week training mission there in June.
The seven-man Civil Affairs Team from 3rd Team, Alpha Company, 84th Civil Affairs Battalion, known as CAT 8413, trained and worked 20 miles west of Ulaanbaatar, Mongolia, with Mongolian forces for Khaan Quest 2014.
The exercise originally began in 2003 between the United States and Mongolia, said Capt. Jeffrey Y. Cho, team leader for CAT 8413. It now has increased to a multilateral exercise with 22 nations. The team worked with many other nations including the United Kingdom, South Korea and Singapore.
Khaan Quest is a part of the I Corps Pacific Rebalance mission under the U.S. Pacific Command to enhance security and integrate other service components to create unified land operations within the Pacific Rim.
CAT 8413 provided assistance to the Mongolian Armed Forces, or MAF, during the peacekeeping practice drill. The 1st Mongolian Battalion of the MAF is preparing for a United Nations peacekeeping mission in Sudan later this year. CAT 8413 assisted in teaching members of the MAF the Military Decision Making Process, or MDMP, used by the United States Army.
"The Mongolians before were using a Russian form of decision making process and recently they decided to adopt the U.S. form of MDMP," said Sgt. 1st Class Anthony R. Medina, team sergeant for CAT 8413.
Along with practicing peacekeeping scenarios the team also performed veterinary assistance to livestock and provided routine medical aid for Mongolian civilians. Approximately 7,000 locals received dental work and other treatments during the course of Khaan Quest.
Cho and Medina spent long days training soldiers sometimes lasting from early morning to late in the night.
Despite the language barrier between American and Mongolian soldiers, the MAF personnel were eager to learn and hardworking from their battalion commander down to the lowest staff member, Cho said.
Besides concentrating on humanitarian assistance and disaster relief, the team members were able to experience Mongolian culture. A few team members were able to participate in cultural ceremonies, traditional herding practices and ate authentic Mongolian meals.
Through working together and immersing themselves in the culture, a brotherhood formed. Friendships grew within the three weeks and a few team members learned some Mongolian words and phrases to better communicate with MAF soldiers.
There was camaraderie among them, Medina said. "I think the most important point of Khaan Quest was the camaraderie built between all of the countries involved."
The mission created a better understanding of Mongolian culture for the team and taught them more about standard operating procedures for foreign militaries. Working in Civil Affairs provides Cho and Medina the opportunity to travel to Mongolia and other places many people have never been to build bonds with all types of people.
After completing Khaan Quest successfully, leaders of CAT 8413 left Mongolia with confidence knowing that they are well-prepared to accomplish any mission they are tasked with.
His Highness The Amir of Kuwait congratulates Mongolia on national day
KUWAIT, July 11 (KUNA) -- His Highness the Amir Sheikh Sabah Al-Ahmad Al-Jaber Al-Sabah sent a congratulatory cable to Mongolian President Tsakhiagiin Elbegdorj on the occasion of his country's National Day.
His Highness the Crown Prince Sheikh Nawaf Al-Ahmad Al-Jaber Al-Sabah and His Highness the Prime Minister Sheikh Jaber Mubarak Al-Hamad Al-Sabah sent similar cables.
Defense Minister of Qatar Conducts Official Visit to Mongolia
July 10 (infomongolia.com) A delegation of Qatar Armed Forces led by Minister of State for Defense Affairs, Major General Hamad Bin Ali Al Attiyah is conducting an official visit to Mongolia on July 10-11, 2014.
Today on July 10, Minister for Defense of Mongolia D.Bat-Erdene welcome the visiting guests at the Government House and parties held an official talk exchanging views on the global and regional security and discussing current situation of bilateral partnership issues between the two defense sectors and prospects of actions to be implemented in the future.
Mongolia and the State of Qatar have established the diplomatic relations on January 21, 1998 and the first Partnership Agreement between the Armed Forces of Mongolia and Qatar was inked in December 2007.
In the scope of the Agreement, relationships between Defense sectors of the two countries have been growing in terms of professional staff preparation, joint military training and practices, peace support operations as well as efforts in combating terrorism.
On the same day, Major General Hamad Bin Ali Al Attiyah paid courtesy call on the President of Mongolia Ts.Elbegdorj and during the reception, Qatar Defense Minister conveyed greetings of the Emir of Qatar Hamad bin Khalifa Al Thani and predecessor Khalifa bin Hamad Al Thani.
The Qatari delegation visit coincides with Mongolian National Naadam Festival and today they have participated in the ceremony of the Honorary Day for the State Flag of Mongolia at Chinggis Square, Ulaanbaatar and visited the Khui Doloo Khudag valley in Tuv Aimag to get familiarized with Shudlen (three-year old) horse racing competition as part of Mongolian tradition and custom to celebrate the biggest national holiday.
On July 11, the Defense Minister Hamad Bin Ali Al Attiyah is invited to participate in the official Opening Ceremony of 2014 National Naadam Festival dedicated to the 2,223rd Anniversary of the Mongolia's First Statehood, the 808th Anniversary of the Great Mongol Empire and the 93rd Anniversary of the People's Revolution.
Related:
Defense Minister of Qatar visits – Montsame, July 10
Visa waiver agreement signed between Mongolia and Italy for diplomatic passport holders
Ulaanbaatar, July 16 (MONTSAME) A visa exemption agreement for holders of diplomatic passports was signed between the Governments of Mongolia and Italy in Rome on July 14.
Holders of diplomatic passports of both countries are now able to visa-free travel to each other up to ninety days within half-year's time.
The same day, the Ambassador of Mongolia to Italy Sh.Odonbaatar held a meeting with Under-Secretary for Foreign Affairs of Italy Benedetto Della Vedova to discuss matters of the bilateral relations and cooperation. The sides also talked about a meeting of the Mongolian-Italian intergovernmental commission and a consultative meeting between the Foreign Ministries of the two countries, ASEM summit to be held in Milan in October of 2014, EXPO 2015, as well as ways of fostering bilateral ties, including a facilitation of travel conditions for each other.
Austrian Vamed Engineering to Implement Five Health Projects as Part of Bilateral Cooperation
July 17 (infomongolia.com) The Governments of Mongolia and the Republic of Austria had established Financial Cooperation Agreement for the purpose of providing financing by the latter part on concessional terms to implement some joint projects in a health sector of Mongolia on November 28, 2011.
Nevertheless, the effective period of the Financial Cooperation Agreement is due to end this month and some difficulties to select executors for joint projects have been arisen on timely basis. Therefore, in order to accelerate some projects to be funded from the 40 million EUR soft loans provided by the Government of Austria, the Government of Mongolia decided to establish direct contracts with executors and afterwards accepted some proposals from the Ministry of Health.
The Ministry of Health of Mongolia submitted five projects and promoted the name of an executor company, where at the Cabinet meeting held on July 16, 2014, it was agreed to select Vamed Engineering GmbH & Co. KG, an Austrian company, as an executor and to establish financing agreement entrusted by the Minister of Finance Ch.Ulaan and Minister of Health N.Udval representing the Government of Mongolia.
The five projects will be implemented in financing to renew equipment at National Cancer Center of Mongolia, equipment modernization at Maternal and Child Health Research Center as well as equipment modernization and human resources capacity building projects at the State Central First Hospital.
During the Intergovernmental Committee Meetings between Mongolia and Austria held in 2010 and 2013, the Ministry of Health of Mongolia was obliged to study proposals on above projects submitted by the Vamed Engineering Company as an executor, which were reflected in the Protocols to implement. Moreover, the UniCredit Bank Austria AG officially announced to provide an export loan to Vamed Engineering GmbH & Co. KG.
Related:
Joint projects on health to be co-implemented with Austria – Montsame, July 17
Swiss Yodeling Band to Perform in UB Celebrating 50th Anniversary of Switzerland-Mongolia Diplomatic Ties
July 16 (infomongolia.com) The Swiss Confederation and Mongolia are celebrating double anniversaries in 2014, the 50 years of diplomatic relations and 10 years of development cooperation in the scope of Swiss Agency for Development and Cooperation (SDC).
To commemorate the milestones, a series of celebratory events were launched in Mongolia and Switzerland in May 2014, where the June edition of "Onsite Insights" was focused on the celebrations, including an interview with SDC Director-General Martin Dahinden, who represented Switzerland at the launch of events in Ulaanbaatar on May 21, 2014.
In the frameworks of the July celebration for the 50th anniversary of Swiss and Mongolia diplomatic relations, Jodelchorli Alpsteinblick Abtwil yodeling band from St. Gallen, Switzerland in cooperation with the Mongolian instrumental and singing group "Domog" and the "Bayasgalant" children choir will feature a concert at the State Academic Theatre of Opera and Ballet in Ulaanbaatar on July 26, 2014.
According to organizers, the concert will be staged at 07:00 pm and all benefit will be donated to an orphanage and care center in Ulaanbaatar.
Social, Environmental and Other
FC Deren Sumida shows unprecedented success at World Youth Cup winning bronze
July 20 (UB Post) Two Mongolian teams of FC Deren Sumida competed in the boy's 12 (age) and boy's 16 divisions at the largest international youth football tournament in the world, the Gothia Cup, last week in Gothenburg, Sweden.
The tournament finished on Saturday with a record performance by Mongolian teams. FC Deren Sumida, which competed in the boy's 16 division, excelled in the cup and made it to the 1/32 Final with two defeats and two wins. In the 1/32 Final, Mongolia won against Sweden 7 – 5 on Thursday, and won against Germany on the same day 0 – 2 in the 1/16 Final. On Friday, FC Deren Sumida played against the Swedish team and won 4 – 0, and won against Norway 1 – 3 in the ¼ Final.
The boy's 16 team lost the playoff B's Semi final match to the Swedish team 0 – 2.
A total of 190 teams from 32 countries played in the boy's 16 division. FC Deren Sumida played in Group 15.
Mongolia's boy's 12 lost two matches to Germany and Sweden but managed to defeat another Swedish team. The team advanced to the 1/32 Final but lost the match.
Every year, a total of 1,600 teams from 80 nations participate in the Gothia Cup.
SUMO/ Hakuho takes down Osunaarashi to remain in 3-way tie for lead on Day 8
(Yokozuna Hakuho, back, forces down No. 3 maegashira Osunaarashi with an "over-arm throw" technique on Day 8 of the Nagoya Grand Sumo Tournament on July 20 at the Aichi Prefectural Gymnasium. (Yuta Takahashi))
July 20 (Asahi Shimbun) Mongolia's Hakuho proved he is still the wrestler to beat by upending yokozuna-killer Osunaarashi before a standing-room-only crowd at the Nagoya Grand Sumo Tournament on July 20.
The win means Hakuho, shooting for his 30th title, remains unbeaten and in the lead with ozeki Kotoshogiku and rank-and-filer Takayasu.
Showing a bit more caution than usual after watching Osunaarashi (4-4) defeat both yokozuna Harumafuji and Kakuryu last week, Hakuho went straight for the No. 3 maegashira's belt in an effort to avoid his now notorious upward slamming style at the face-off. Hakuho's tactic worked, but he then had to ward off the Egyptian in a fairly evenly matched grappling duel.
After both held their ground, Osunaarashi--the first wrestler ever to win his first two matches against yokozuna opponents--appeared to try to make a move to improve his position. Hakuho used the chance to send him off balance and flip him to the dirt with an "uwate-nage," or overhand throw. The match lasted more than one minute, by far Hakuho's longest yet in Nagoya.
The other yokozuna wrestlers had a light day.
Kakuryu grabbed an easy victory over No. 2 maegashira Yoshikaze, who overextended on his initial attack and ended up sprawling to the ground as the yokozuna pulled back. Kakuryu's sole loss so far was to Osunaarashi on July 17. Yokozuna Harumafuji, moving up to 6-2, got a default win over sekiwake Tochiozan, who has withdrawn with an injury.
No longer in danger of demotion, ozeki Kotoshogiku is now looking at giving the yokozuna trio a run for the money. He fought his way back from a poor start to drive out No. 4 maegashira Tamawashi and collect his win for the day. Though not flawless, the fight demonstrated Kotoshogiku's new-found confidence under pressure, and his finishing attack was strong.
No. 11 maegashira Takayasu thrust No. 16 maegashira Chiyomaru (6-2) to the dirt to keep his record perfect at 8-0. The former komusubi takes on No. 6 maegashira Myogiryu, himself a former sekiwake, on July 21.
Kisenosato, meanwhile, had a poor face-off and was driven to the edge then forced to tumble out of the ring as sekiwake Goeido blazed forward. The seasoned sekiwake came out with his head down and once he got the momentum going refused to let up. The loss was Kisenosato's second of the tournament and could be a costly one if he is going to be a contender for the title. Goeido, who has become a fixture at the sekiwake slot, is also 6-2.
"I was focused and had a good match," Goeido said.
Komusubi Aoiyama was too big for top maegashira Shohozan to budge before the Bulgarian sent him stumbling to the dirt, and komusubi Aminishiki brought down top maegashira Ikioi for his second win. Aoiyama, Shohozan and Ikioi are all also 2-6.
Video: World Cup Blues? Check Out Mongolia's Sports Heroes
July 14 (Bloomberg) –- Germany has won the World Cup, with a narrow one-nil win over Argentina. Fans around the world watched the game, but not everywhere... Mongolia was largely indifferent to the drama, preferring its own sporting and cultural event. Here's how the Naadam festival is helping boost the economy.
Naadam: A History of Pride
By Mathilde Michaud
July 18 (UB Post) Before you arrive in Mongolia for the first time, you picture it as Western history books have described it: Chinggis Khan's empire abundant with men on horses, living in gers and ready for conquest. But the real Ulaanbaatar will leave you surprised. The city has a completely different feel from popular imaginings. Soviet architecture lines the streets and Wi-Fi is available in nearly every square and public space. You then understand what 2014 Mongolia is: a land with a culture rich in history far from being forgotten, present in everyday life, and where pride in the past reinforces today's nationalism.
The Naadam Festival is a unique demonstration of this mixing of eras in Mongolian culture. Entering Central Stadium, Mongolian flags flap in the wind and traditional clothing is seen alongside t-shirts and trousers, but this variety gathered in the tiers could not compare to what followed, as the opening ceremony elaborated upon this beauty. The most interesting part of the ceremony was not how beautiful the costumes were, or how impressive the whole parade was on the surface – even though both were noteworthy, it was the rich history that made it all possible. To better understand it, a review of the meaning of Naadam is necessary.
From survival to national holiday
Naadam, short for Eriin Gurvan Naadam, stands for the Three Games of Men: wrestling, archery and horse riding. All three of these games can be traced back in Mongolian history to long before the appearance of the first official Naadam festival. Indeed, they have their roots in the military traditions of the Mongols, whose leaders would choose their warriors based on how well they performed during public competitions preceding major hunts or battles. Furthermore, practicing these three sports was a matter of survival. Denis Sinor, former professor of Central Asian Studies at the University of Indiana, conveyed it in simple words in his essay The Inner Asian Warrior:"fighting was a precondition for survival." No distinction was made between soldiers and herdsmen; the Mongol language did not even have a word for "soldier", or a distinction between "war" and "peace". Equipment and space for the enactment of the three games could be found within the nomadic lifestyle itself, as every family possessed horses, bows and arrows and every child learned to wrestle from his earliest years.
What had been a matter of personal survival soon became one of national survival. In the 15th century, as Buddhism was introduced to Mongolia, these martial and hunting rituals – Naadam – became part of the religious ceremonies organized to pay tribute to the new Living Buddha. For the first time, the Three Games of Men were given political meaning. They were to publically display the location of power within society, to reaffirm the role of religion as partner to the state in the ruling of the Mongols. The two-century rule of the Qing Dynasty – from the late 17th century to the early 20th century – changed this balance of power as participation in Naadam was forbidden to monks. What had always been a crucial part of Mongolian culture and their way to form united action for independence was partly obstructed, putting a spoke in the wheels of Mongolia's unity. This interdiction led the people to organize mini-Naadam events among themselves in order to preserve their culture, making it a central part of their fight for independence.
Multiple commemorations
It comes as no surprise then when Naadam became one of the central commemorations of the 1921 revolution that freed Mongolia from the rule of the Manchus. As Mongolia achieved independence, it also regained the freedom for all to participate in the Three Manly Games. Naadam became a ceremony of state, demonstrating its new political status and how communist ideals won back Mongolia's unity. Seventy years later, a new revolution, a democratic one, once again changed Mongolia's course. Sandwiched between China and Russia, two giants who had been battling for influence over the steppes, Mongolia had its first democratically elected government in 1990. Emblematic of Mongolia's independence and national identity, Naadam took a new turn, as it became the country's national day, a commemoration of the two revolutions that brought the country to its newly redefined national identity. Naadam has also more recently been a celebration of the foundation of the Mongolian Empire by Chinggis Khan 808 years ago.
In the light of all this history, we can now understand why the 1920s waltz, military marches and traditional singing and dancing are intertwined in the festival's opening ceremony. Mongolia's culture is one that carries its history, making past pride shine only to make its present brighter.
Youth: Today's Best Investment
By Naomi Kitahara, UNFPA Representative in Mongolia
July 18 (UB Post) As Mongolia celebrated Naadam on July 11th, the global community celebrated World Population Day, this year dedicated to the theme of "Investing in Youth." Over 25 percent of the world's population is between the ages of 15 and 25: the largest youth population in history. For Mongolia, nearly 50 percent of the population is under the age of 25.
Adolescents and youth are central to Mongolia's development agenda, representing a vast population cohort and a demographic dividend capable of driving Mongolia's development for years to come, but with a major caveat – investment. Investing in youth builds a society where everybody can claim their rights and maximize their opportunities to contribute to Mongolia's development. Investing in youth is not an option, but it is a necessity. Youth is a period of transition, where choices and opportunities determine their future, dramatically impacting families, communities, society and the development of Mongolia.
Key fact #1: worldwide, more than 15 million girls aged 15 to 19 give birth every year. In Mongolia, the adolescent birth rate is rising, recording in 2013 the highest level in the past 15 years, 33 births per 1,000 adolescents. Early pregnancy threatens the health of mothers and their children – the risk of maternal death is up to 50 percent greater for adolescent mothers than for older women. It is the leading cause of death among adolescent girls. For those who survive, early pregnancy disrupts girls' education, impairing their life chances, professional development, and economic opportunities.
Key fact #2: globally, young people are almost three times more likely than adults to be unemployed. In Mongolia, the unemployment rate, as of 2010, for adolescents was approximately 31 percent. This can and must change – in Mongolia, 80 percent of undergraduates study a major in business administration, economics and law, yet labor demand is highest in mining-related industries such as engineering and construction. Education must equip youth with appropriate skills to gain employment.
Key fact #3: this generation of young people is the most inter-connected in history. Despite rural-urban, economic and other disparities, an impressive 72.9 percent of Mongolian youth access the internet. This is a golden opportunity for education, economic and social development, an opportunity that must be maximized.
The main question is how can we improve the situation for youth in Mongolia? First and foremost, policy-making must be supportive, prioritizing and meeting the needs of adolescents and youth. Ongoing Government efforts to revise the population policy and develop a youth policy and adolescent health policy are a good start. Policy is one thing, but implementation is critical for genuinely improving the lives of youth. Youth-supportive policy in other sectors and ministries is also vital. Effective policy demands young people's participation: contributing to policy development and decision-making in a meaningful, influential way. Beyond policy, young people's formal and informal education must go beyond technical skills, providing life skills, such as understanding health and gender issues, communicating effectively and making sound decisions. This is what youth need not just for employability, but to make critical choices in daily life. Finally, investing in youth requires targeted, accessible social services, particularly youth-friendly health services, giving them the opportunity to determine their own life paths.
Mongolian youth have expectations – higher than the generations before them – for a fulfilling life, freedom, and opportunities. They want their human rights upheld, and they want to be influencing decisions that affect their lives – "nothing about us without us." Investing in youth supports young people to be productive and dynamic, enhancing their lives and the lives of those around them – parents, siblings, children and all of society. This is what will drive Mongolia's development for years to come.
We all must be united in placing young people at the heart of Mongolian and global development efforts.
22 friends of the T.bataar dinosaur to arrive in Mongolia
July 18 (UB Post) The Lenin Museum, once property of the Mongolian People's Party (MPP), will soon be converted into the Central Museum of Dinosaurs. Construction of the museum is underway. A corridor to the exhibition hall has been covered with white felt printed with the footprints of dinosaurs, and a sculpture of the head of T.bataar, a dinosaur that lived in Asia 70 million years ago, was built on the museum's door.
The building was set to open on June 1, but has not yet fulfilled that promise. However, an exhibition was held at the museum on June 8, titled "T.bataar and Best Collections."
The exhibit featured the skeleton of the T.bataar dinosaur in the center of the hall, who spent the winter in Darkhan-Uul Province. A life-size foam sculpture of the Saikhaniya dinosaur, posed next to him, was also included in the exhibit, along with the skeletons of a small Tseratops that lived 70 million years ago in Gurvantes soum of Umnugobi Province, and 15 baby Prototseratops found in Tugrug Shiree of Bulgan soum.
Painter D.Batjargal and five other painters and sculptors created the Saikhaniya dinosaur.
Minister of Ministry of Culture, Sport and Tourism (MCST) Ts.Oyungerel was interviewed by Dulguun of Gogo.mn on July 10, where she revealed that the skeletons of 22 dinosaurs found in the same location as the T.bataar have been legally repossessed by Mongolia.
When will the Central Museum of Dinosaurs officially open?
The building was in bad condition. It will take a lot of time to repair it. But next week the exhibition "Past and Present of the Lenin Museum" will be opened.
What is the cost of the museum renovation?
We expected that the repairs would cost between 200 and 300 million MNT, but we want to build a world standard museum, which means we will need 5 billion MNT.
How many paleontological finds have occurred in Mongolia?
There have been 186 Mongolian finds which are now being returned from Europe. More than 20 of them are as big as the T.bataar. We sent two big collections to the Japanese exhibition "Dinosaurs of the Mongolian Gobi", and six dinosaurs are stored at the Paleontological Centre. If our museum has a big enough space, we will include ten dinosaur skeletons.
Additionally, 22 dinosaur fossils found in the same location as the T.baatar have been legally repossessed by Mongolia from the United States as of July 10.
Has the illegal dinosaur trading network been shut down?
Law enforcement officials in the United States and our experts have stricken down the illegal dinosaur trading network.
Dinosaur tale: Happy ending for Houston lawyer
July 16 (Texas Lawyer) The U.S. attorney for the Southern District of New York in Manhattan announced on July 10 the return of fossilized remains of more than 18 dinosaur skeletons to Mongolia. Among the bones going back: two Tyrannosaurus bataar skeletons that were unlawfully taken from Mongolia.
Return of the bones culminates an effort that began in 2012, when Robert Painter of Houston's Painter Law Firm came to know and represent the president of Mongolia, Elbegdorj Tsakhia. Although Painter was advising the president on election law, he ended up helping his client halt a planned auction of a Tyrannosaurus bataar skeleton.
Dallas-based Heritage Auctions Inc. had scheduled the auction for May 20, 2012. But on May 19, Painter obtained for Tsakhia an ex parte temporary restraining order from a Dallas court, barring Heritage Auctions from selling the bones. Subsequently, the auction house agreed to stop the event. Eventually, the U.S. attorney in Manhattan filed two successful civil forfeiture lawsuits to secure the transfer of the groups of fossils, and pursued a successful criminal prosecution against a dinosaur bones importer.
"I don't really expect someone else to call about stolen dinosaur bones," said Painter. But the final outcome of his efforts has brought him much satisfaction, Painter said. After the discovery of the first bones, other bones were found, and there have been additional smuggling allegations, according to Painter. Also, a London-based dealer agreed to voluntarily turn over more bones to Mongolia, where one of the skeletons is now displayed at a museum.
The news reports of the forfeitures and prosecutions also discouraged prospective bone smugglers, Painter said.
"As we had hoped would happen, it had a chilling effect," Painter said.
Stolen 'Nest of Dinosaurs' Returned to Mongolia
By Megan Gannon, News Editor
July 14 (Live Science) More than 18 dinosaur skeletons illegally taken from Mongolia were formally returned to their homeland last week, U.S. authorities announced.
The fossilized bones were handed over to Mongolian officials in a repatriation ceremony held July 10 in New York. "Today, we return a veritable nest of dinosaurs," Manhattan U.S. Attorney Preet Bharara said in a statement after the ceremony.
"This is a historic event for the U.S. Attorney's Office, in addition to being a prehistoric event, and we are proud to participate in the return of these dinosaur skeletons to their rightful home," Bharara said. [Album: A Tarbosaurus Travels from Auction to Courtroom]
The road to repatriation began two years ago, in 2012, when an auction house in New York was offering a skeleton of a Tarbosaurus bataar — an Asian cousin of Tyrannosaurus rex. Mongolian authorities voiced concern that the specimen had likely been smuggled into the United States. The 70-million-year-old dinosaur species was native to the Gobi desert in Asia, and to date, has only been found in modern-day Mongolia.
The Tarbosaurus sale attracted a bid of more than $1 million, but the suspicions of the Mongolian authorities sparked a long legal battle and federal investigation. U.S. authorities froze the sale, and after a lengthy custody battle, the specimen was returned to Mongolia in May 2013.
Eric Prokopi, a self-described commercial paleontologist who imported the dinosaur, pleaded guilty to criminal charges that he smuggled the skeleton and other fossils into the United States. In June, Prokopi was sentenced to three months in federal prison.
The other Mongolian fossils forfeited by Prokopi during the case were returned in the July 10 ceremony, including a second Tarbosaurus, oviraptors and skeletons of the duckbilled, plant-eating Saurolophus angustirostris.
Federal authorities also returned fossils that had been forfeited by Christopher Moore, a onetime business partner of Prokopi in the United Kingdom, including a third Tarbosaurus, skeletons of a roosterlike Gallimimus dinosaur and a nest of fossilized eggs, all looted from Mongolia.
"The fossils returned today do not belong in the hands of any private collection or one owner," James T. Hayes Jr., special agent in charge of Homeland Security Investigations (HSI) in New York, said in a statement. "They belong to the people of Mongolia where they will be displayed in their national museum alongside the Bataar ICE repatriated last year. HSI will not allow the illicit greed of some to trump the cultural history of an entire nation."
The Mongolian government made it illegal in 1924 to own or export items of cultural significance, including dinosaur fossils.
Related:
US RETURNS SMUGGLED DINOSAUR HAUL TO MONGOLIA – AFP, July 16
Repatriation Ceremony of 18 Dinosaur Fossils Derived from Mongolia's Gobi Territory Held in New York City on July 10, 2014 – infomongolia.com, July 16
US: Enough dinosaur skeletons to stock a museum are on their way home in Mongolia – AP, July 10
Smuggled dinosaur fossils headed home to Mongolia from New York – Reuters, July 11
New York hosts official repatriation ceremony for smuggled Mongolian dinosaur fossils – AllVoices, July 11
Museum to be created on remains of Kharkhorum monastery
Ulaanbaatar, July 16 (MONTSAME) A monastery of the Mongolian ancient capital Kharkhorum will be restored.
A mutual understanding memorandum about it has been signed by the Culture, Sports and Tourism Minister Ts.Oyungerel and the German Archeological Institute's president Friederike Fless.
The remains of the monastery will be renovated for the establishment of the open museum. The sides have also agreed to cooperate in restoring cultural heritage, furnishing an exhibition hall, and preparing specialists. The museum project is to be completed late 2015.
Street Food in Mongolia
By Michelle Borok and Margaux Maxwell
July 18 (UB Post) During Naadam, floods of families and individuals prepare fresh khuushuur (a meat-filled fried pastry) in tents, kiosks, stalls, and gers for locals and foreigners hoping to grab a tasty street snack while viewing the colorful display of Mongolian sport.
But when the holiday fanfare dies down, ready-to-eat street food virtually disappears with it.
Ulaanbaatar is an unconventional scene for street food, a culinary culture of low-cost outdoor dining popular in cities and small towns across Asia. Perhaps the county's underdeveloped roads have prevented a definitive outdoor food culture from emerging, or the brutal winters and traditional Mongolian dining etiquette, a conduct which considers eating in a public space rude. Although rural people in developing urban areas typically take stock in the informal food sector, playing a critical socioeconomic role for local communities, this has not been the case for Mongolia.
Naadam is the country's only real glimpse of affordable outdoor public dining, and it's a unique one. Sellers are generally educated, middle class families looking to make an extra buck, or area restaurants setting up special khuushuur stalls for Naadam. A family or group of friends may pool resources, like tables, chairs, an extra ger and stove, mixing bowls and other essentials, just to set up a khuushuur ger or tent. Some industrious families make khuushuur at home and send them to Naadam festival grounds in insulated coolers to be sold directly to non-food vendors who are unable to leave their stalls.
Khuushuur, prepared quickly and to order and best eaten when hot, are sold during Naadam at wrestling stadiums, parks and horse racing fields in the provinces and capital, as per Mongolian tradition. For many, khuushuur is one of the most important aspects of the annual festival. Naadam even has its own special khuushuur, a gigantic, disc shaped variation that's rarely found anywhere else but festival grounds. "I'm just going to go to Central Stadium, buy some khuushuur and leave. That will be my Naadam," laughed Chuulun, a resident of Ulaanbaatar. Khuushuur is the taste of Mongolian summer, even though it's eaten year-round.
As reported in the UB Post's special Naadam edition, 10,000,000 MNT was budgeted this year to keep government officials full on khuushuur during the holiday, and an estimated 6,000,000 khuushuur were eaten during Naadam. Yet, a study by the International Labour Organization (ILO) found that 17 to 20 percent of gross domestic product (GDP) in Mongolia is from the informal economy, of which street food vending is only a part.
On the surface, Ulaanbaatar has everything that would bring to life a booming street food culture: a densely populated capital, lots of pedestrians, community members in need of work after relocating from rural areas, and access to an abundance of cheap meat products. But Mongolia faces challenges in developing such a culture.
Roads
Street food implies food made, sold and eaten on the street. A 2009 report from the Ministry of Roads, Transportation Construction and Urban Development stated that there were 49,186 kilometers of road in Mongolia, 1,394 kilometers of which were paved. The availability of paved roads has risen since then, with over 1,800 kilometers of newly paved road being promised this year by Deputy Minister of Ministry of Roads and Transportation Kh.Yerjan in a "Development Hour" meeting held in June. While asphalt and sidewalks aren't required for street food dining, they certainly help. A more geographically concentrated population helps as well, which UB has in spades. Pedestrians own the streets (despite the aggression of UB drivers) yet the city still doesn't have a regional street food culture. Long term residents pop into their local guanz (cafeteria-style restaurants with simple national favorites) when they want a cheap and easy meal, but they order and eat indoors. Demand for delivery services is on the rise, but largely among a more affluent percentage of the population. People want faster food and convenience, but they aren't looking to street food for solutions.
Weathering Winter
A trip to the National Garden Park, where UB residents can go to enjoy the surrounding mountain view, cycle, and gather for special events, is revealing. Kiosks now line the main entrance to the park and people can be found selling beverages, snacks and ready to eat goods, including khuushuur, in the surrounding area. Thirty vendors were authorized to sell food during Naadam at National Garden Park, but their presence is a new development and recent rumors of a city-wide ban on street food vendors presents an unclear long-term future for these enterprising folk.
Bayarmaa, whose hometown is Ulaanbaatar, explained that harsh weather conditions, vending permits and sanitation concerns contribute to lack of business for street vendors: "Only during Naadam is street food common, when people buy the khuushuur, after that it is not so common, although some buy and sell barbequed meat in some place(s) or at train stations. This is because (in) the winter it is very cold, and in summer it is very hot, so this makes it hard for people to sell their products. Also, people are worried that the food is not clean. But we who have permission have clean food, the problem is those who don't."
Summer also brings enterprising herding families to the highway to set up roadside food gers. Travelers heading to summer homes, holiday family visits, and setting off for camping excursions can stop for airag (fermented mare's milk) with the milked mares usually just outside the ger, khuushuur, or khorkhog and shorlog (actual Mongolian barbeque). Cars pull off the road, enter the ger to order and eat at small tables set up outside. Perhaps this summer tradition is the most indigenous representation of Mongolian street food, but they are a purely seasonal set up. Families move their camps and herds to run these small businesses along the highway for just a couple months out of the year, and as the warm weather and tourists fade, the gers disappear again into the hills to their fall and winter sites.
Cold weather doesn't kill off street food in other parts of the world. Menus change based on the seasons and open stalls usually adapt with some weatherproofing, but the culture still lives. Roasted chestnut vendors in Seoul epitomize winter for some Koreans, the way that buuz is the taste of winter and Tsagaan Sar. Yet, as much time as Mongolians spend outdoors when it's below freezing, buuz food trucks still aren't parked at UB curbs.
Khuushuur is the only real contender in UB's world of mobile food businesses, operational even during Mongolia's long winters. The adaptation of large Korean tour buses into khuushuur gers on wheels can be spotted not only during the authorized Naadam run at the National Garden Park, but on the outskirts of the city. They serve khuushuur and beverages, nothing more, but the bus seats have been moved around and tables and counters are available to customers to dine-in, out of the cold.
Mongolian Manners
The general Mongolian attitude towards street food is not positive. Khongorzul, a visitor of the National Garden Park who was born in Ulaanbaatar, spoke about the Mongolian perception of street food, contributing to the lack thereof, "People in the city don't want street food. We want food from restaurants. During Naadam we buy khuushuur, but even that is not reliable. At Central Stadium some tents are from restaurants, and we prefer that. Sometimes people use goat meat instead of mutton or beef because it is cheaper… Also, in the city it is so dusty and this makes it not clean maybe…. That is why we do not like street food."
Mongolians frown on eating meals out in "public", away from a table or out in the open, and there are numerous proverbs that warn against eating food too quickly. Walking and eating is another no-no, almost as rude as the refusal of food in a ger and as unfortunate as eating alone. Even at Naadam, it's rare to see anyone but small children or tourists eating khuushuur as they walk and explore the festival grounds. These rules of etiquette are a cultural blow to street food's prosperity here, but times are rapidly changing.
The formality, attention and consideration offered to a guest being served food in a ger is found in only a handful of restaurants in Ulaanbaatar, and diners often pay much higher prices for such service than the average UB resident can afford. The hospitality of herding families has become iconic in Mongolian popular culture, captured in television commercials, music videos and sold by tour companies around the city. UB's city-dwelling Naadam festival attendees tap into this "traditional" spirit when they don deel for the festival, and buy tickets to watch games that are an everyday part of life in the countryside. What they aren't comfortable with is the hygiene standards of a ger kitchen.
Future of Street Food in UB
Mongolia is a prime hunting ground for the analysis of changing cultural attitudes and adaptation. B.Enkhzaya, COO of Rosewood Cafe and Rosewood Kitchen + Enoteca, commented on public response to their summer outdoor dining series of pop-up cafes outside of Central Tower: "We have had a great response from our guests with our street cafe. We believe the secret is in making sure the quality and service do not falter just because it is street food. There is always a chance for businesses that create a unique concept and understand the fundamentals of service."
Informal street vending has been shown to create an economic boost in terms of GDP and employment. According to the ILO, the informal sector's contribution to GDP ranges from 13 percent in Mexico to 58 percent in Ghana, and from 48 percent in North Africa to 72 percent in sub-Saharan Africa in terms of employment, where statistics are available.
As more and more Mongolians spend time abroad, and as interest in foreign cuisines continues to grow, safe, regulated street food could take off in Ulaanbaatar. Mongolia's own unique culinary culture and traditions shouldn't be replaced with hot dog carts, taco trucks and takoyaki stands, but perhaps more innovations and economic opportunity will emerge for Mongolian cuisine.
Mongol Rally News:
- Mongolia here we come! – East Lothian Courier, July 18
TWO former Knox Academy pupils are getting ready to leave East Lothian's roads behind for a trip across 19 countries.
- Rothco Art Director Set for Mongolian Adventure – ADWORLD News, July 18
- Daring pair staring at epic drive to far Mongolia – TheHerald.com.au, July 16
- Mongol Rally with eight Aussie teams set to launch from Battersea Park on Saturday – TNT Magazine, July 16
- HomeSlyce sponsors team driving 10,000 miles from England to Mongolia – Baltimore Business Journal, July 16
- 10,000 MILES FROM CORK TO MONGOLIA IN A 1999 FORD FOCUS – EveningEcho.ie, July 16
- Bath brothers to take their Nissan Micra for a spin...all the way to Mongolia for charity – BathChronicle.co.uk, July 16
- Destination Mongolia for students in £500 Skoda – StroudLife.co.uk, July 15
- Intrepid Haverfordwest four set off on death-defying 2014 Mongol Rally – WesternTelegraph.co.uk, July 19
- Students to race old car to Mongolia – The Bristol Post, July 11
Local rider saddling up for world's longest horse race – The Mongol Derby
HINCKLEY, Ohio, July 15 (wkyc.com) -- Say "derby" in the sporting world, and it's "Kentucky" that immediately comes to mind. But the world's most grueling horse derby takes place far from Churchill Downs. It's run in the Mongolian Steppe and as we found out a local woman is among a small group of international riders brave enough to try it.
Stephanie "Stevie" Murray has ridden most of her life, but much of it has been in the show ring on her dependable mount Gilbert. Murray's horseback riding experience is about as far removed from the Mongol Derby as you can get.
"Murray said when we met up with her at Horse Haven Stables in Hinckley, which is here she has come for training.
The Mongol Derby is only in its 5th year, although its inspiration dates back to the 13th century. Mongol Emperor Genghis Khan established the legendary postal route across the rugged grasslands of Mongolia. The Mongol Derby incorporates 25 horse stations and rest stops throughout the 1000 km (621.371 mile) route. Along the course, riders have the option of staying with local nomads, or camping out. In 2010, the Guinness Book of World Records officially designated the Mongol Derby title of the longest multi-horse race.
Risk of injury to the rider is high, as Murray is keenly aware. During the trek she'll ride up to 25 different horses. The riders have not ridden any beforehand to test them out, and each of the horses is "semi-wild". They will travel through remote and unmarked territory, endure harsh elements including heat and blistering winds, physical pain and exhaustion. Murray has befriended a 2013 Derby rider who dropped out for saddle sores so severe he needed stitches. Rules also restrict riding hours allowed each day. And stiff penalties are assessed at each outpost if a horse comes in overworked.
Murray is one of 40 riders chosen among roughly 400 who applied. "It was just kind of a pipe dream and I thought well I will just interview to see if I can get a spot. They interviewed me, they interviewed all my horse trainers and they gave me the green light," Murray says adding that her love for travel, camping and riding experience helped seal the deal.
Her training regime is not for the feint of heart. A typical training day starts with a 5 -6 mile run. Murray then heads to Horse Haven where she will ride 5 to 6 different horses, most of them ponies to get accustomed to the size of the horses in Mongolia. Then Murray heads to her own barn where she rides her horse Gilbert. On a work day she'll then head to work at her job bartending. On days off, Murray will spend some time her husband before ending the day with another run. "Being physically fit is really important just because it helps you do anything in life. I mean you are doing wall squats almost for 11 hours a day, standing on your horse so you don't want to be putting the weight on the horse. You want to be up off their backs so they can run. A lot of physical training; running too because sometimes you get get separated from your horse and they might take off," Murray explains. The distance between the outposts is roughly 25 miles. She wants to be ready in case she must have to run the distance, on foot, in case she gets thrown.
The training program comes courtesy of Solange Ellis, owner of Horse Haven Stables. Ellis had never heard of the Mongol Derby until Murray mentioned it. "I think my mind just kind of stopped for 15 seconds and had to reset itself. You have to tell me everything because I am now going to start teaching you in a completely different fashion," Ellis recalls of her first conversation with Murray.
Ellis says training Murray for the Derby has been one of the most challenging assignments in her career, and one of the most rewarding. "Stevie has a really indomitable spirit. I've seen her mildly unhappy that I am making her ride the tiny pony bareback again – because she has fallen off 3 times. But other than that she's been in really good spirits. She's been up for everything I've offered to do with her. And we talk a lot about logistics. What is she going to carry? What can we ask previous participants? You know the internet has been wonderful, that we can talk to people from New Zealand. And we can ask did you encounter this? Did you encounter that? I think that Stevie is an amazing athlete," Ellis says.
In addition to training for the derby each rider must raise funds to participate in it. The cost is roughly $12,000. In addition to the cost each rider must also raise money for 2 charities. One is chosen by the race organizers. It is Cool Earth, a charity that works alongside indigenous villages to stop rain forest destruction. Each rider also chooses their own charity. Murray has chosen the American Society for the Prevention of Cruelty to Animals (ASPCA). Murray is a newlywed. She says her new husband is 100% behind her efforts to compete in the Mongol Derby. "When I said I wanted to do the race he said do 'whatever it takes'. So all our money for our honeymoon has gone to this and he can't even go. He said he doesn't care, he's just happy I can go. I am really lucky," Murray says. Fundraising is helping foot the bill too. Murray has set up a GoFundMe page to help with donations.
Murray will leave on July 28th and the race begins on August 3rd. Murray considers herself a competitor, but won't be crushed if she doesn't win the race. Her goal is to finish, and enjoy the scenery, experience and the people along the way. "Winning the title will not help my future. People who win don't normally get to stay with the nomadic herding families. They just plow through and are done in 7 days. I'd like the whole 10 day experience," Murray shares.
Mongol Derby: http://www.theadventurists.com/mongol-derby/#whats-the-mongol-derby
Mongolia adventure sees Ash Dykes enter the record books for solo trek
Ash Dykes from Conwy has become first to make longest solo trek across Mongolia - and the locals have given the explorer his own nickname
(Pictures from @ash_dykes twitter feed. Ash Dykes, who has walked over 1000 miles through Mongolia unsupported.)
July 20 (Wales Online) The locals in Mongolia call him the "lonely snow leopard".
And one intrepid Welsh adventurer is soon to become equally well known here after breaking the world record for the longest unsupported solo trek across that gruelling Asian landscape.
On Friday Ash Dykes, from Old Colwyn Bay became the first person to walk a mammoth 1,012 miles through the world's second largest landlocked terrain, a feat he managed in just 59 days.
And the 23-year-old former lifeguard has about another 400 miles left to go before he can claim another world first – being the only one ever to walk unaided and alone across Mongolia in its entirety, from its eastern border with China to westerly city of Choibalsan, near southern Russia.
"Hopefully it'll take him another three or four weeks to complete," said his driving instructor father Phil.
"He's been averaging about 10 to 12 hours walking a day, although the cart full of provisions he's been pulling behind him the whole way is going to be hitting a lot of sand between his current and final destinations.
"And when that happens those wheels may as well be square-shaped – it's a real slog, especially when you consider that, at its heaviest, it probably weighed about 24 stone.
"That's the equivalent of more than two Ashs put together."
Not that his son hasn't surmounted his fair share of epic challenges already, like crossing the sandstorm-ridden Gobi desert, the nose-bleed altitudes of the Altai Mountains, dodging venomous snakes, wild dogs, dehydration and coping with extreme conditions – Mongolia's temperatures often going from below freezing to stifling heat.
"Ash suffered really badly with heat exhaustion quite recently, but luckily he was able to find a small settlement in which to recoup," said Phil, 45.
"Still took him several days, mind.
"But if anything more serious were to go wrong at least he's equipped with an SOS button and satellite tracker to help people find him.
"The only problem is that, depending on where he is at the time, it could take a rescue party up to four days to extri-cate him. He's really got to be so careful."
Fortunately, the Conwy globe-trotter has had plenty of practise in honing his survival skills.
Three years ago he embarked on the first of his adventures by traversing the Himalayas before cycling across Cambodia to north Vietnam, covering some 1,130 miles taking just 13 days over mountains on a bike with no gears.
He also had a similar expedition Down Under and went to live with a remote hilltop tribe in Burma.
"He's a very positive person with a lot of physical and mental stamina," added Phil.
"Once he gets an idea for a challenge in his head he won't back down until it's done, he's always been that way."
And Ash, who was previously working as a scuba instructor in Thailand, has also raised thousands for the British Red Cross in the process.
"It's difficult to know just how much he's raised because some people have been donating via his website, while others who've been inspired by him have given directly to the Red Cross," said his dad.
"One thing's for sure, he's developed quite a following for himself out there.
"No matter how remote, there's always someone in the places he passes on his way who's already heard of him.
"So they're always really pleased to see him turn up."
For more information on how to donate, go to www.ashdykes.com
Related:
Old Colwyn adventurer to break World Record today walking across the Mongolian steppes – Powys Country Times, July 16
A Rare Look At The Abandoned Military Bases Of The USSR
July 17 (Business Insider Australia) Photographer Eric Lusito was only 12 when he witnessed the destruction of the Berlin Wall on television in his native Italy. At that point, he had little understanding of the impact the Iron Curtain had on Europe and Asia, but the looks relief on the faces he saw on TV left an indelible mark on him.
After working for a few years, Lusito left his industrial job and hit the roads of Europe in his van with a camera and little to no plan. He had a chance meeting with a geography professor in the Czech Republic who invited him on a trek to discover an abandoned Soviet military base.
It was a life-changing experience.
"I started to understand the power that the Red Army represented and the fear that it provoked … I decided to seek out these military remains throughout the former Soviet territories, relics of the ambition and power of the USSR," Lusito says.
Much like an archaeologist, Lusito traveled the former Soviet and communist world from East Germany to Mongolia, from Poland to Kazakhstan, searching for vacated military bases. He found and documented many of them, including this one in Choibalsan, Mongolia, where many Soviet military personnel, support staff, and their families were stationed. Under communism, the area's population was more than 300,000. Now, only around 39,000 people live there.
Eric Lusito, 2nd Guards Tank Division, Mongolia
Built in the 1970s, this air base in Mongolia had a 2-mile-long runway and was seen as a frontline for any possible conflict with China.
Mig-21, 126th Fighter Aviation Regiment, Mongolia
The aircraft shelters alongside the runway were constructed with reinforced concrete and designed to protect fighter jets. They now lie vacant.
126th Fighter Aviation Regiment, Mongolia
Lusito told Business Insider he purposefully sought out bases "that embodied the ambition and the might of the USSR … with their symbols of the all-powerful Soviet Empire once seemingly inviolable" now lying in ruins. At the base of this statue is an inscription reading "All that was built by the people, must be imperatively defended."
Aliosha, 41st Motor Rifle Division, Mongolia
The inscription on the building below says "Glory to the Communist Party of Soviet Union." Soviet architecture was known for being geometrical and plain. Military buildings were built as economically as possible using standard designs.
44th Mixed Air Corps, Mongolia
These were residential areas that housed officers and their families. "Soviet military bases abroad tended to be isolated settlements, in restricted areas and at a distance from any town, mirroring of the Soviet state and its culture of secrecy," Lusito says.
12th Motor Rifle Division, Mongolia
This base is located close to the northern edge of the Gobi desert in Mongolia, and is now disappearing into the sand.
677th Artillery Regiment, Mongolia
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Special Mention for Mongolia Photograph at Travel Photographer of the Year 2013
July 16 (Mail Online) --
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Special Mention went to Tariq Sawyer from Switzerland for his photograph of a shepherd and his flock in the Altai Mountains, Bayan-Olgii Aimag, Mongolia
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Young Man from Mongolia Thanks Locals for Helping Him Through Life-Saving Surgery
July 13 (ABC 6 News) -- A young man from Mongolia is in Rochester to say thanks to the church and family that saved his life twelve years ago.
He was one of the three sponsored children who traveled to Rochester for a life-saving heart surgery at the Mayo Clinic.
Bayassa Bars, age 26, is a typical young adult. He's happily engaged, has a career plan, and he recently finished college all the way in Mongolia.
"To be an interior designer," he said.
But the fruition of his dreams could not have been possible without a life saving surgery in 2002.
"I had a hole in my heart," said Bars.
He was one of three children from Mongolia who went to Mayo Clinic for heart surgeries long ago, thanks to the Samaritan's Purse, an international relief organization supported by Christian communities.
"I really thank God, who brought me here for this amazing project," reflected Bars.
Twelve years later after his surgery, he sent a Facebook message to the family who took him in during those crucial weeks.
"When we said goodbye to him at the airport, we were all sad and crying, we thought we would never see him again," said Kim Schmidt, who's parents, with the support of their church, volunteered to care for Bayasaa, following a mission to be a part of the Children's Heart Project, one of the many programs through the Samaritan's Purse that reaches out to those where vital healthcare needs are inaccessible.
"So we are his American family, his church family here in Minnesota," said Schmidt.
This week, Bayassa will be doing some reaching out of his own, giving out his eternal thanks to those who helped him along the way.
On Tuesday, a benefit concert for Bayassa will be held at Bethel Lutheran Church which helped sponsor a host family for him twelve years ago.
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Room #5, Coffice Hub, 5th Floor, Time Center
21 Baga Toiruu Street, Sukhbaatar District 8
Ulaanbaatar, Mongolia 15160
Email: info@covermongolia.com
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