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Thursday, May 19, 2016
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ASEM 11
15 Presidents, 21 Prime Ministers expected to attend ASEM 11
May 18 (gogo.mn) 27th regular meeting of the National council to organize the ASEM 11th summit was held on May 17 at the State house. They discussed several issues related to the organization and preparation of the summit.
National council assigned to commence the accomplishment of the press center located at the Shangri-La hotel and to connect the center to the internet within June 10.
Moreover they approved the road routes to carry the guests to be arrived on Jul 14-17 and discussed on creating aircraft resources. In addition, they assigned to improve the surveillance cameras and lighting installed at the protected areas of Chinggis Khan international airport.
Budget to build parking lots with 400 cars and 3.4 kms of roads at Chingisiin Huree tourist camp was approved.
As of today, total of more than 5000 guests and delegations including presidents of 15 countries, premiers of 21 countries, foreign affairs ministries, authorities of international organizations and press staffs are expected to attend the ASEM 11th summit.
Also they discussed the preparation and budget of the 11th Asia-Europe People's Forum (AEPF11) to be held on July 4-6 in Ulaanbaatar. Over 500 delegations are expected to participate while 250 of which are domestic delegations. At the AEPF11, three plenaries will be held at National University of Mongolia, University of the Science and Technology and University of the Humanities while a workshop will be organized at the State house.
MFA hands over China ASEM aid supplies to designated organizations
May 18 (ASEM Mongolia) ASEM-related aid supplies inventory handover ceremony has been organized on May 13th in Ministry of Foreign Affairs (MFA), as the Government of the People's Republic of China donated the first batch of vehicles, office furniture, and equipment aid to several organizations of Mongolia involved in ASEM preparations.
The ceremony was attended by D. Gankhuyag, State Secretary of MFA and Head of ASEM Office of Mongolia, and officials from the benefactor organizations.
The donations from the Government of China to the Government of Mongolia comprise of vehicles, office furniture, and equipment designated for Ulaanbaatar Governor's Office, Civil Aviation Authority, National Emergency Management Agency, General Police Authority, and State Special Security Agency.
KRI closed flat Wednesday at C$0.85, +93.2% YTD
Khan Announces Completion of Documentation for Settlement Payment
TORONTO, ONTARIO--(Marketwired - May 18, 2016) - Khan Resources Inc. ("Khan" or the "Company") (CSE:KRI) announces that Khan and the Government of Mongolia have signed the settlement documentation required for the release of US$70 million to Khan from the escrow agent located in New York. With the execution of such agreement, joint instructions will be issued to the escrow agent to transmit the funds to Khan, and Khan's counsel will secure a dismissal order from the United States District Court in Washington, DC of Khan's petition for certification of the international arbitration award rendered on March 2, 2015 in favour of Khan.
The Company is continuing to investigate and detail options to distribute the majority of the funds remaining, after discharge of liabilities and obligations, to shareholders in a tax-efficient and timely manner. The process may entail multiple tranches.
With the forthcoming transmittal of the settlement to Khan, the Company's primary objectives have now been met, and Martin Quick and Raffi Babikian have announced their retirement from the Board. The Company wishes to thank Messrs. Quick and Babikian for their valued input and years of service through very trying times.
SGQ last traded C$0.26 on Tue, 1878 at HK$1.46
SouthGobi Received No 'Formal' Proposal on Reported Settlement of Tax Verdict
HONG KONG, CHINA--(Marketwired - May 18, 2016) - SouthGobi Resources Ltd. (TSX:SGQ)(HKSE:1878) ("SouthGobi" or the "Company") notes recent Mongolian media reports in connection with a reported settlement of a US$16.5 million residual financial penalty against its wholly owned subsidiary, SouthGobi Sands LLC, arising out of a judgment of the Mongolian Second District Criminal Court of Justice in February 2015 (the "Tax Verdict"). While the Company has previously advised that it is seeking to resolve amicably the dispute giving rise to the Tax Verdict through negotiations with the Government of Mongolia (see the Company's Management Discussion and Analysis for the quarter ended March 31, 2016 available on SEDAR at www.sedar.com and prior filings), the Company has not received any formal notice from the Government of Mongolia in relation to any settlement proposal. The Company will make a further announcement should there be meaningful development of the matter.
Tax debt to be fully paid off by Southgobi Sands – cabinet meeting
Ulaanbaatar, May 18 (MONTSAME) The cabinet discussed and accepted Monday a proposal by the Ministry of Finance regarding the repayment of the tax debt by the "Southgobi Sands" LLC in accordance with a court decision.
Under the decision, the "South Gobi Sands" shall pay off tax debt of MNT 35.3 billion to the state budget of Mongolia. The Ministry of Finance has proposed to collect the money of MNT 15 billion out of total payment in 2016 and 2017 in two stages. The remaining part of the sum of MNT 20.3 billion will be paid off in a form of carrying out exploitation at the "Tavan Tolgoi" coal deposit at Southgobi Sands' own costs and manpower with a lower expense than the current market prices.
In this regard, the cabinet decided to entrust the "Erdenes Tavan Tolgoi" company to endorse an agreement on the proposal's realization.
The "Southgobi Sands" LLC will cover expenses of transportation, epmolyees' salaries, social insurance, accommodation, foods, electricity, repair of techniques and others. No extra money will be allotted from the "Tavan Tolgoi" company for the mining in Tavan Tolgoi deposit.
It is believed that the decision will make Mongolia possible to deal with the tax debt of the Southgobi Sands without bearing any losses and without suspending the company's activities.
AKM closed flat Wednesday at A$0.005
Aspire Mining Chairman and MD Buy Shares On-Market
May 18 (Cover Mongolia) Non-Executive Chairman David McSweeney bought 833,000 shares for A$4,998, Managing Director David Paull bought 416,000 shares for A$2,496.
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MSE Trading Report: Top 20 +0.08%, ALL +0.1%, Turnover ₮13.4 Million Shares
May 18 (MSE) --
Historic low ₮2,050.85/USD set March 28, 2016. Reds are rates that set a new low at the time
BoM MNT Rates: Wednesday, May 18 Close
5/18 | 5/17 | 5/16 | 5/13 | 5/12 | 5/11 | 5/10 | 5/9 | 5/6 | 5/5 | 5/4 | 5/3 | 5/2 | 4/29 | 4/28 | ||
| USD | 2,001.86 | 1,991.54 | 1,998.70 | 2,003.01 | 2,012.16 | 2,017.93 | 2,020.06 | 2,021.40 | 2,021.03 | 2,020.79 | 2,019.89 | 2,017.26 | 2,015.41 | 2,011.84 | 2,009.41 |
| EUR | 2,257.50 | 2,256.22 | 2,261.33 | 2,271.41 | 2,296.08 | 2,298.02 | 2,300.44 | 2,307.83 | 2,306.80 | 2,321.48 | 2,321.86 | 2,332.66 | 2,309.76 | 2,290.78 | 2,279.17 |
| JPY | 18.28 | 18.21 | 18.38 | 18.44 | 18.46 | 18.56 | 18.58 | 18.79 | 18.89 | 18.87 | 18.90 | 19.06 | 18.93 | 18.75 | 18.57 |
| GBP | 2,889.58 | 2,888.93 | 2,870.83 | 2,885.14 | 2,901.94 | 2909.55 | 2,912.62 | 2,913.75 | 2,926.65 | 2,931.96 | 2,938.84 | 2,972.43 | 2,947.44 | 2,944.13 | 2,927.81 |
| RUB | 30.79 | 30.89 | 30.80 | 30.76 | 30.91 | 30.48 | 30.52 | 30.82 | 30.64 | 30.63 | 30.28 | 31.13 | 31.18 | 31.23 | 30.82 |
| CNY | 306.35 | 305.49 | 306.26 | 307.07 | 309.14 | 309.68 | 310.01 | 310.84 | 310.73 | 310.90 | 310.87 | 311.65 | 311.31 | 310.46 | 310.25 |
| KRW | 1.69 | 1.70 | 1.70 | 1.71 | 1.72 | 1.72 | 1.73 | 1.73 | 1.73 | 1.74 | 1.75 | 1.77 | 1.77 | 1.76 | 1.77 |
| SGD | 1,455.42 | 1,456.60 | 1,458.96 | 1,456.47 | 1,469.53 | 1,473.59 | 1,475.14 | 1,482.07 | 1,486.49 | 1,492.73 | 1,492.29 | 1,504.63 | 1,501.52 | 1,497.57 | 1,496.49 |
| CAD | 1,544.17 | 1,550.56 | 1,546.68 | 1,556.04 | 1,563.81 | 1,558.97 | 1,560.61 | 1,564.67 | 1,567.97 | 1,576.53 | 1,587.40 | 1,616.39 | 1,606.61 | 1,606.39 | 1,601.12 |
| AUD | 1,454.05 | 1,464.48 | 1,457.95 | 1,459.99 | 1,473.81 | 1,481.87 | 1,483.43 | 1,488.26 | 1,488.39 | 1,517.01 | 1,514.82 | 1,531.10 | 1,534.43 | 1,539.56 | 1,536.50 |
| HKD | 257.87 | 256.56 | 257.44 | 258.05 | 259.34 | 259.97 | 260.25 | 260.48 | 260.40 | 260.40 | 260.29 | 259.98 | 259.75 | 259.35 | 259.06 |
| CHF | 2,037.10 | 2,037.90 | 2,048.27 | 2,057.75 | 2,069.91 | 2,078.41 | 2,080.61 | 2,083.81 | 2,087.84 | 2,110.38 | 2,114.29 | 2,120.20 | 2,099.82 | 2,088.92 | 2,075.30 |
Bank USD rates at time of sending: Khan (Buy ₮1,995 Sell ₮2,005), TDB (Buy ₮1,995 Sell ₮2,007), Golomt (Buy ₮1,995 Sell ₮2,005), XacBank (Buy ₮1,995 Sell ₮2,005), State Bank (Buy ₮1,995 Sell ₮2,010)
MNT vs USD (blue), CNY (red) in last 1 year:
BoM declines USD, CNY ask, bid offers, accepts US$32.5m MNT swap offers
May 17 (Bank of Mongolia) On the Foreign Exchange Auction held on May 17th, 2016, the BOM has received selling bid offers of USD 7.0 million in a rate between MNT 1998.80-2005.00, buying bid offers of USD 0.8 million in a rate between MNT 1995.00-1998.00, selling bid offers of CNY 0.65 million in a rate with MNT306.40 and buying bid offers of CNY 13.0 million in a rate between MNT 305.05-305.86 respectively. The BOM did not accept any bid offers.
On May 17th, 2016, the BOM has received MNT Swap agreement buying bid offers equivalent to USD 32.5 million from local commercial banks and the BOM accepted all of the bid offers.
Mongolia FDI $166.4 Million in Q1, Current Account Deficit $11.1 Million
May 18 (Bank of Mongolia) Compared with the preliminary estimates of Balance of Payments (BOP) which were released on the April 28, 2016, the revised estimates show that current account deficit has decreased by US$ 88.9 million and capital and financial account deficit has decreased by US$ 172.3 million reached surplus of US$ 140.9 million. As a result, errors and omission have increased by US$ 83.4 million.
These changes are subject to quarterly survey received from enterprises. Particularly, the reported net operating incomes of foreign entities in mining sector were significantly larger than the estimates in the preliminary BOP and some enterprises paid their debts from banking accounts located abroad.
Main indicators
Current account deficit stands at US$ 11.1 million, decrease of US$ 17.1 million or 61 percent compared to the same period of the previous year. The change is attributable to improvement in income account deficit by 13 percent with or US$ 29.0 million. Whereas goods account surplus has decreased by 24 percent or US$ 47.2 million.
Capital and financial accounts showed surplus of US$ 140.9 million, increase of US$ 176.9 million from the previous year which is mainly caused by rise of foreign direct investment in Mongolia by 245 percent or US$ 278.3 million.
Detailed information
· Balance of Payments for Quarter 1 of 2016
BoM Monthly Statistical Bulletin, April 2016
May 18 (Bank of Mongolia) --
'Good Herder' 10% Loan Program: ₮93.8 Billion Loan Requests Received, ₮86 Billion Issued
May 18 (Cover Mongolia) Since the Government of Mongolia launched the "Good Herder" Program in March 15, 2016 the State Bank and Khan Bank has received requests from 24,163 herders for ₮93.8 billion loans at 10% and as of May 17 ₮86 billion 10% loans have been issued.
Link to BoM announcement (in Mongolian)
Government budget deficit at ₮663.6 billion in first 4 months
Ulaanbaatar, May 18 (MONTSAME) In the first four months of this year, total revenue and grants of the General Government Budget (GGB) amounted to MNT 1,656.3 billion and total expenditure and net lending amounted to MNT 2,319.9 billion, representing a deficit of MNT 663.6 billion in the balance.
Compared to same period of the previous year, tax revenue decreased by MNT 12.6 billion or 0.9%, which was mainly due to decreases of MNT 102.1 billion or 41.7% in other taxes, fees, and by MNT 101.8 billion or 29.9% in income tax, whereas social contributions, taxes on property, VAT increased by MNT 7.3-183.0 billion or 4.2-59.5% against the previous year.
GGB's total expenditure and net lending reached MNT 23,19.9 billion which increased by MNT 400.1 billion or 20.8% against the previous year. It was mainly due to increases of MNT 248.5 billion or 14.5% in current expenditure, by MNT 137.8 billion or 72.1% in capital expenditure and MNT 82.0 billion or 12.0% in current transfers against the previous year.
Guest Post: Mongolia 2016 – Will there be light at the end of the tunnel?
By Stefan Hanselmann
May 18 (Mongolian Economy) If the development of the last quarter of 2015 can serve as an indicator, we can eventually expect for next year some real light at the end of the tunnel. Unfortunately, Mongolia had to learn the hard way that trust and a good reputation within the public domain is hard earned but easily lost. Whether it is Mongolian citizens or international investors – in the end both were equally disenchanted and somewhat at a loss over the question why Mongolian politicians found it so hard to rally for the common cause of keeping Mongolia´s investment story alive.
Improved economic outlook
Chances are good that 2016 will be a turning point. For one, there is the recovery of the international copper market. Projections for 2016 done by the International Copper Study Group indicate that the market should see a small deficit of around 130,000 metric tons as demand growth outpaces production growth. This reflects changes in market conditions over the course of 2015. After all, global production cuts are starting to turn the table in favor of the supply side. Secondly, Rio Tinto announced in December 2015 that it could secure the financing for the development of its underground mine. Although the effect on the Mongolian economy won´t be immediate and certainly not as staggering as the years 2010 to 2012, the US$2.5b USD that will be invested in the country from 2016 onwards will stabilize the economy, ease tensions on the labor market and create additional employment not only with the Oyu Tolgoi company, but also with domestic suppliers of goods and services. Projections for the labor market estimate that by2018 at least 40,000 additional technical staff will be required in Mongolia's mineral resource sector and in the upstream and downstream industries, particularly in electrical, construction, and mechanical occupations. However, the training market is currently unable to satisfy this need – neither in terms of quality nor quantity. Given all the construction and industrial projects the government plans to implement, it will be of utmost importance to have Mongolian experts engineer the projects and operate the machines. But creating value within the country starts with a proper education of future generations.
As some of the urgently needed foreign direct investment will return to the country, 2016 will see an improved balance of payment situation. With disputes over seized licenses settled and new exploration licenses issued, the government will continue to send a strong message that it is open for business. The inflow of foreign capital will also help to prop up the Mongolian currency, so that the Central Bank can ease its interventions on the currency market in order to keep the Mongolian Tugrik below the politically and psychologically important rate of 2000 MNT to the US Dollar.
Economic diversification
The government will continue to pay close attention to the diversification of the Mongolian economy and improved competitiveness of the agricultural and meat sector. More agreements with additional meat processing plants in export markets such as Russia and China can be expected. This will help to promote private investment for agriculture and the dairy and meat industry. More importantly, it will help to expand and diversify the labor market that, like the economy as a whole, overly depends on the mining industry. In this regard it will be also very interesting so see if and how the Chinese "New Silk Road Initiative" will be incorporated into the Mongolian economic diversification strategy. And of course, which economic potential can be unlocked in Mongolia´s western region once the new road connecting Mongolia´s Bayan Ulgii and Hovd aimags with Urumqui in China and Bysk in Russia will be completed.
Political change is looming – once again
So, will everything be good next year? Like so often in Mongolia, the answer will wholly depend on the political process which will once again be shaped by parliamentary elections in June 2016. Much is at stake for the established political parties. Having seen 13 governments come and go within 23 years, the electorate is acutely aware of the need for political stability. So are foreign investors. The next government will be once again a coalition, hopefully born from a true spirit of national unity. The people of Mongolia deserve it, the country needs it.
Mogi: not a betrayal but a partnership. CWGP and Ekh-Oron (Motherland) parties couldn't run as themselves.
S.Demberel and B.Erdenebat: no longer party chairmen
May 18 (news.mn) On Monday, the Supreme Court has discussed the official requests delivered from the Civil Will Green Party and Ekh-Oron Party. According to the decision of the court, S.Demberel has been dismissed from his post as chairman of the Civil Will Green Party. B.Tserenbaljir been appointed as the new chairman of the Ekh-Oron Party in the place vacated by B.Erdenebat.
The General Electoral Law has ruled that candidates cannot enter the election under the name of another party. Therefore, S.Demberel has officially left the Civil Will Green Party, and B.Erdenebat the Ekh-Oron Party. They will now stand in the upcoming parliamentary election under the name of the Democratic Party. In order to do this, they must now become full members of the DP.
UB Election Commission denies registration of any independents for city elections
May 18 (news.mn) On 17th May, the Ulaanbaatar City Electoral Commission presented its conclusions following the review of the documents submitted for the City Representative Assembly. On this occasion, 333 candidates from 11 political parties and 2 alliances have presented their documents. Today, the director at the City Electoral Commission Yo.Gerelchuluun presented detailed information regarding their review; 238 people will stand to be elected to the City Representative Assembly. The breakdown is as follows:
Mongolian People's Party-45
Democratic Party- 45
Republican Party- 21
Mongolian Traditional United Party- 3
Mongolian People's Revolutionary Party- 45
Civil Movement Party- 44
Development Program Party-5
National Labor Party-25
Mongolian Conservative Party-8
The candidates will receive their candidate's certificate on 7th June.
ICF Workshop "State's Role in Large Resource Projects"
Co-organized and co-hosted by
International Cooperation Fund
Ministry of Foreign Affairs
Government of Mongolia
Canadian International Resources and Development Institute
May 16, 2016, Monday
"State Participation in Mining: Global Trends and Perspectives" Matthew Genasci, Mining Policy Group LLC
Panel One: Political and Executive Perspectives
H.E. R. Amarjargal, Member of Parliament, State Great Hural of Mongolia
H.E. S. Oyun, Member of Parliament, State Great Hural of Mongolia
Panel Two: Perspectives of the Executives and Operators
Ch. Otgochuluu, Chief Economist, Erdenes Mongol LLC
D. Galbaatar, Deputy Director, Erdenet Mining Corporation
M. Otgonbayar, CEO, Baganuur JSC
M. Bayanmunkh, Director, Strategic Policy and Planning Department, Ministry of Mining
Panel Three: Participating Countries' Presentations
Masouma Zargar, Senior Policy and Program Adviser,
Ministry of Mines and Petroleum, the Islamic Republic of Afghanistan
Boobekov Kudaimende, Head of Subsoil Protection and Mining Industry Office of State Agency of Geology and Mineral Resource, the Kyrgyz Republic
Abdrakhmanov Sagynbek, Vice President, Kyrgyzaltyn JSC
Vongthong Thimahaxay, Assistant Director of Mines Safety, Health and Environment Division, the Lao People's Democratic Republic
Kyaw Zin Oo, Assistant General Manager, No. 1 Mining Enterprise, the Republic of the Union of Myanmar
Zarni Myint Maung, Metallurgical Assistant, No. 2 Mining Enterprise, the Republic of the Union of Myanmar
May 17, 2016, Tuesday
"State Participation in Mining: Economics and Alternatives" Matthew Genasci, Mining Policy Group LLC
Panel Four: Perspectives of Private Industry
N. Algaa, President of Mongolian National Mining Associations
G. Battsengel, CEO, Energy Resources LLC
Dr. D. Bat-Erdene, Board Member, Mongolian Society of Economic Geologists
M. Tulgat, Khishig Arvin LLC
"Findings of the Corporate Governance Study on the Mongolian SOEs" D. Bailikhuu, Advisor to Prime Minister on Privatization and Restructuring
Panel Five: Perspectives of Civil Society
N. Dorjdari, Mongolia Country Coordinator, NGRI
D. Erdenechimeg, Manager for Governance Program, Open Society Forum
B. Tuvshintugs, Director, Economic Research Institute, National University of Mongolia
Dr. M. Dagva, General Director, QMC LLC
Bosoo Khukh Mongol members arrested for intimidating foreigners
May 18 (news.mn) There is information that four members of the "Bosoo khukh Mongol" movement have been arrested by the police. The leader of the right-wing NGO, P.Shinjeeravdan has confirmed this. He said: "I do not know exactly why they were arrested. I only heard about this this morning form their relatives. Last Saturday, 1000 people gathered at the UB Palace for the "Patriots' Forum". After that, they delivered a demand to cancel the authority and mandates of people who were named as off-shore account holders and ban them from standing for Government office. I think that they (the police) are trying to stop us at the earliest opportunity."
According to official sources, however, the four were arrested for intimidating and frightening foreigners.
Local Development Funds Shift Decision-Making Power to Mongolia's Citizens
By Ariunaa Norovsambuu
May 18 (The Asia Foundation) Many stories about Mongolia lead with the economic "boom" the country has experienced from its vast mineral resources. While the economic windfalls have certainly driven the country's rapid development over the last decade, Mongolia has struggled to shift its highly centralized governance structure to a more participative one. However, signs of change are under way. Under President Elbegdorj's leadership, a series of initiatives toward decentralization and increased public participation at the local level in the country's budget priorities and decision-making are beginning to take hold.
The Integrated Budget Law (IBL) of Mongolia that came into effect in January 2013 is the first law that specifically prescribes public consultations and inputs to government budget-related decision-making. The law also introduced the Local Development Fund (LDF), monetary assistance provided directly to local governments both in rural areas and in Ulaanbaatar for projects that improve the living standards of local residents. We're now seeing some tangible results in terms of local development since its start.
"We are happy that these funds have provided lighting for our streets. We're now less worried about the safety of our kids coming back from school because the streets are no longer dark as they were a few years ago," said one kheseg (local) leader from Bayangol district, khoroo (sub-district) BGD 23, one of target khoroos under The Asia Foundation's Urban Governance Project, which since September 2015 has worked with the Municipality of Ulaanbaatar to support urban governance and decentralization efforts at the subnational level. From 2013 to 2015, more than 280 new street lights were put in BGD 23 funded by the LDF in accordance with what residents identified as their most pressing development needs.
While this is good news, citizen participation in how the funds are allocated remains insufficient. According to an Asia Foundation survey, 82 percent of respondents in the 33 project khoroos do not know about the LDF, and many are not aware of its legal framework and their participation rights. Consulting with citizens, especially on the selection and prioritization of LDF projects, remains largely symbolic at khoroo offices. Since the majority of residents are not well informed about the benefits of being engaged in LDF processes, they tend to not attend public consultation meetings.
Building on our community mapping project that started in 2013 (read more about that work here), in 2014, the Ulaanbaatar City Municipality and The Asia Foundation launched a new online community website, manaikhoroo, as an interactive resource for citizens and city officials to find information and download maps with indicators about the accessibility and availability of various public services in the city's districts. One of the site's main features is the Google Maps interface with which users can interact and display the indicators in various ways as selected by the user.
Using this tool, together with local NGO GER Community Mapping Center, last year we began mapping out all of the LDF projects implemented in the 33 project khoroos targeted by the UGP project between 2013-2015. After verification was completed, we organized community meetings to present the end results and to gather feedback and comments on the quality, benefits, and use of the maps during community consultation meetings on LDF projects.
Even though there were certain limitations in the mapping process, it revealed a number of improvement areas for policymakers to consider. Firstly, after several meetings with khoroo and community representatives, it became evident that they did not have sufficient information on LDF, especially on the projects that had been implemented through the LDF. As a result of the community mapping exercise, the information about the exact location, budget, and implementing agency for each LDF project became available on maps. Knowing the details of the project enables residents to be better informed about the benefits of LDF projects for their community and to monitor the implementation and maintenance of each of the projects in their khoroos.
The maps, which will soon be available on the manaikhoroo website, also helped to identify whether the LDF fund had been distributed evenly throughout the khoroo territory or not. There were examples where the LDF-funded projects were accumulated only in certain khesegs of the khoroo, benefiting only the people in those specific khesegs, whereas in some khoroos the LDF was used to fund projects outside the boundaries of that khoroo. For community representatives, it is important to know that projects are selected and implemented after careful examination of their relevance, impact, and usefulness for all khoroo residents that is, the local community on the whole.
Community maps also have potential to be a useful tool for LDF project selection and prioritization during local community consultation meetings. The maps show the status of LDF projects implemented in previous years, but also provide useful information on where and which projects could be developed for the coming years given the information on khoroo territory, population size by khesegs, and the location and type of projects of previous years.
The Asia Foundation will continue to work with the Ministry of Finance (MoF), Municipality of Ulaanbaatar (MUB), district and khoroo offices to improve the LDF legal framework, streamlining the management of LDF processes at all levels of city government, and increasing the transparency of LDF budget prioritization and implementation through innovative mechanisms such as community mapping. Such work will enable citizens to play a direct and active role in deciding how and where resources should be spent.
The Urban Governance Project is funded by the Swiss Agency for Development and Cooperation and supported by the Municipality of Ulaanbaatar under the Governance and Decentralization Programme Phase II.
Ariunaa Norovsambuu is The Asia Foundation's deputy manager of the Urban Governance Project in Mongolia and can be reached at ariunaa.norovsambuu@asiafoundation.org. The views and opinions expressed here are those of the individual author and not those of The Asia Foundation or its funders.
Erdenet without Erdenet: A city or a ghost town?
By B. Enkhtsetseg
March 18 (Mongolian Economy) Imagine that Erdenet Mining Corporation suddenly disappeared one day. The city of Erdenet would no longer have drinking water anymore. Public servants such as teachers and the police would not get paid, and the local budget would fall into the hands of the central government. This is just a slight sorry in Erdenet city.
The residents of Erdenet city, whose support for mining is incomparably higher than the rest of the nation, do not like the phrase "mine closure." It is an almost offensive phrase in this city. Half of the resources of the Erdenet-Ovoo deposit have been exploited since its establishment in 1978, and the deposit has an estimated 30-40 years of life left. It is not exactly a short time, but it is a signal that the time is coming when Erdenet city will have to learn to walk on its own, without the deposit to hold its hand.
About 100 thousand people live in this city, the third biggest in Mongolia, and the economy of the city is almost fed through an umbilical cord connecting to EMC. In 2014, taxes and other contributions by EMC made up the vast majority of Orkhon province's budget. In 2010, EMC paid MNT 625 billion to the national and local budgets, the highest amount of taxes paid in its history. In addition, the energy plant of this company provides drinking water to the residents of Erdenet from the Selenge River, channeling water from 64km away into the city. At the same time, EMC's waste water treatment facility cleans the city's waste water. These demonstrate the risks related to the factory's closure for the community and economy of this region.
Hence, it is crucial to take comprehensive measures to reduce dependence on the factory in the long-term and diversify the economy of Erdenet city, in order to avoid what may come due to either the unexpected or planned closure of the mine. In a nutshell, Erdenet city runs the risk of turning into ruins after 40 years, if measures for the future are not taken today. "Works are being carried out to prevent the city from becoming a ghost town when the mine closes," stated P.Ganbat, Head of the Development Department of EMC. There are many cities around the world which became ghost towns when deposit resources were exhausted. There is much to be done to prevent this city from suffering the same fate.
One of the nine objectives proposed by the new management team at EMC concerns a "closure-development policy." Studies on the impact of EMC's operations on the environment, society and economy of the region have been commissioned within the framework of this objective.
A development concept was developed two times in the last decade. The main objective of the 2005-2015 concept was to maintain the capacity of the Mineral Processing Plant, process copper concentrate, low-content and high-oxidation ore by hydrometallurgy methods and produce value-added products. As for the 2010-2015 revised development concept, the objective was to introduce modern technology that will enable the factory's equipment to utilise less power and reduce the average production cost by harnessing economies of scale. The next development concept for the years 2016-2025 aims to resolve policy by comprehensive methods, including basic operations of the factory, human resources, public section and subsidiaries. This concept is quite distinguished from the previous concepts as it includes a sustainable development and closure management plan for the mine in accordance with the laws of Mongolia and international standards.
EMC allocates no small amount on social support, which is increasing each year, and it is causing a burden on the business side of the company at a time when the price of copper is falling on the global market. For example, the company has spent MNT 70.2 billion on social expenses and MNT 23 billion on the expenses of the public programme account. In addition, as the company's social expenses rise and fall, which depends on the copper price cycle, there are direct and indirect negative impacts on the company and the local populace. A system to resolve this issue is required for the long-term. EMC believes that social aspects of its operations, such as the miners' cultural centre, Selenge recreational complex and its athletics complex can become independent bodies if the management of these organs can be guided properly. Social programmes' finances are taking about a 90 percent subsidy from EMC, and fixed expenses are at 70 percent. In that figure, salaries account for 57 percent and depreciation account for 12.4 percent.
It is noted that the infrastructure of Erdenet city is too dependent on EMC in a report by the organisation "Competitiveness Institute." There are risks that the city will not be able to independently maintain crucial infrastructure related to supplying water and the water treatment facility. It can be seen that the region is highly dependent on EMC.
EMC is supporting many SMEs – including a molybdenum concentrate processing plant, a pure copper manufacturer, a mask factory, a metallurgical complex plant, a raw rubber and rubber products factory, a nano-technology texture factory and an LED light factory – within the initiative to support the economic independence of Orkhon province by supporting import-substitutive, export-orientated businesses. Although there are business that will go under with the closure of EMC's factory, businesses that will find a way through it and stand on their own two feet are being established in Erdenet. For example, the hospital "Erdenet Medical," financed through investment by EMC, is operating independently and will repay the costs.
"We are aiming to develop a parallel economy by supporting businesses that can develop independent of EMC," stated Ganbat. "In addition, we will support our subsidiaries that can develop independently even when the factory closes down in the future."
By the order of the General Director of EMC dated 26 May 2015, guidance on sustainable development of the mine, its closure and an environment sub-section were established, and it is developing the issue to be reflected in the concept within the framework of mine closure-development policy. (See the main issues to be included in the sustainable development of the mine and closure management plan above)
As for the major project included in the above works, it is believed that making the Mechanical Foundry Plant a large equipment and parts plant is crucial. In addition, there are also plans to build a research, innovation and design institute, integrating science and production. At the same time, projects related to the environment and restoration will be included in the sustainable development of the mine and closure management plan.
EMC, have depleted half of its mine's reserves, is facing an urgent need to start establishing the closure-development fund while it is still operating profitably. The fund is planned to be constituted from deposits and other sources which will be created by putting the company revenue, subsidiary and dependent companies' dividends and non-technological ore stockpiles into economic circulation.
The development of EMC is being resolved in accordance with the policy of Orkhon province by developing and introducing the sustainable development of the mine and long-term plan for closure management in line with the new development concept and international standards. EMC has the objective of not losing its fire, until its city can stand firmly on its own feet. The concept's main aim is influence the question of whether the city becomes a ghost town or not.
Korea's largest retailer E-Mart gives 'thumbs up' to Mongolian products
May 18 (news.mn) South Korea's largest retailer, the "E mart" chain store, which has 160 branches nationwide, plans to open in Ulaanbaatar. The construction of the new "E mart", which is being built next to the "Sky Department Store" in the Bayanzurkh district of the Mongolian capital is nearing completion.
Also, "E mart" is going to start selling "Made in Mongolia" products. In this connection, an exhibition entitled "Export to Korea" was organized by the "Sky Trading" company at the Mongolian Chamber of Commerce yesterday (17th May). The purpose of the exhibition was to introduce Mongolian products to the experts from "E mart".
The exhibition promoted a total of 30 types of Mongolian goods. The cashmere and wool products still hold pride of place. Mongolian clothes combining fur with the wool and cashmere were also considered to be very stylish. The senior expert of the Global Sourcing Department at the "E mart" chain store gave these products the thumbs up: "Mongolian cashmere and wool products can definitely be sold at "E mart," he said.
CBM and CMM development in Mongolia
About the authors: Felicia Ruiz works with the Coalbed Methane Outreach Program at the US Environmental Protection Agency. Raymond C. Pilcher is President of Raven Ridge Resources Inc.
May 18 (World Coal) Even as reduced coal consumption is reflected in adjustments to coal pricing throughout Asian energy markets, Mongolia continues on a path to encourage production of coal mine methane (CMM) and coalbed methane (CBM). Although Mongolia has abundant coal supply, the government is keen to diversify its energy mix. The potential for developing coal-associated gas resources was first publicly recognized by Chimmidorj in 1995;1 in 2004 a small publicly-traded US oil and gas exploration firm, Storm Cat, negotiated a production sharing contract with the Petroleum Authority, the implementing agency of the Ministry of Mining (MOM). Storm Cat drilled several exploratory boreholes in a number of promising basins, but determined that infrastructure was an impediment that they could not tackle and ceded its licenses without developing any of the prospects.2 This work did, however, bring the potential for developing indigenous gas resources to the attention of the Mongolian government and, with it, the hope of developing valuable resources that could provide an affordable, cleaner energy supply.
Like many countries with abundant coal and methane resources, Mongolian authorities were confronted with questions that arose over gas ownership and the lack of experience dealing with the technical aspects of assessing, evaluating and producing gas from coal seams. With its desire to develop CMM and CBM resources, the Mongolian government has endeavored to adapt existing laws to regulate unconventional gas resource development. The Petroleum Law passed by the Mongolian Parliament in 1991 regulates exploration and development of hydrocarbons, but the original law focused on exploration and development of conventional oil and gas resources and did not contemplate the occurrence of oil and gas deposits associated with coal seams or organic-rich shale.
In 2008, Mongolia became the 24th country partner of the Global Methane Initiative (GMI; formerly, the Methane to Markets Partnership), an international public-private initiative that advances cost-effective, near-term methane abatement and recovery and use of methane as a clean energy source. Joining the GMI indicated the Mongolian government's awareness of the need to reduce fugitive methane emissions liberated during coal mining. The Ministry's interest in co-development of the coal and coal mine methane resources created an opportunity for the US Environmental Protection Agency (EPA) to collaborate under the auspices of GMI.
In 2009, the EPA began working with the Mongolia Nature and Environmental Consortium, a non-governmental eorganizati based in the country's capital, Ulaanbaatar, to help identify and assess potential CMM recovery and use projects at active coal mines with targeted CMM pre-feasibility studies, technical and financial workshops, and via a country-wide CMM resource assessment.3 As part of this process, the EPA met with government officials, who were determining how to promote the development of this unconventional gas resource. The EPA evaluated the results of policies employed in various countries to encourage development of CMM. In 2014, the Mongolian government hosted a formal workshop in Ulaanbaatar and published these findings as a policy paper titled "Legal and Regulatory Status of CMM Ownership in Key Countries: An Overview Provided for Decision Makers in Mongolia".4
The Mongolian Government passed an amendment to the Petroleum Law in 2014, defining unconventional petroleum resources to include those found as natural bitumen, oil shale, tar sand, gas-rich shale, gas sand and CBM. During the same parliamentary session, an amendment to the Mining Law was passed, but it was silent on methane associated with coal. Passage of the Petroleum Law amendment marked the culmination of an open debate between the MOM and Ministry of Energy (MOE). Before the passage of the 2014 amendment to the Petroleum Law, there were overlapping requirements by the two ministries. Leasing CBM or CMM would be controlled by the MOM, but the MOE claimed that any research or exploration for methane associated with coal must also be permitted through its system.
In 2014, the Mongolian government re-organised the ministries and clarified responsibilities. Accordingly, the MOE will only be involved in CMM or CBM to the extent that it is used to generate power. The MOM's subordinate agencies, the Petroleum Authority and the Mineral Resources Authority, are charged with the responsibility of implementing laws and regulation and enabling licensing and permitting to promote the beneficial development of mineral and petroleum resources. The Mongolian parliament passed a resolution in 2015 that further clarifies procedures for obtaining a permit to explore and exploit coal-associated gas. This resolution was crafted as a way of avoiding conflict between operators that presently have production sharing agreements for conventional oil and gas and entities seeking to apply for unconventional petroleum exploration and exploitation permits. The resolution also requires that the Petroleum Authority notify a coal mine operator holding mining licenses granted by the Mineral Resources Authority of any application to explore for CMM/CBM within the mining license block. Further, the mine operator has the opportunity to apply for a CMM exploration and exploitation license covering its license block if notified, and the obligation to formally refuse the opportunity if it does not wish to develop the resource. With these recent governmental eorganization and legislative actions, companies interested in developing CMM or CBM can follow a relatively clear procedure from discovery through to production. Nevertheless, further regulation is being contemplated to remove remaining uncertainty in the process.
GMI continues to support stakeholder engagement with the Mongolian government to encourage capture and use of methane associated with coal deposits in Mongolia. The GMI held a Global Methane Forum from 29 – 30 March this year in Washington DC to provide opportunities for networking and discussion with methane experts in the public and private sectors from around the world. Technical, finance and policy sessions covered issues relevant to capturing and using CMM. During a session on policy governing CMM project development, a representative from Mongolia reported that the Ministry of Mining will continue to work with stakeholders and recommend additional legislation to parliament, to further define procedures for exploring and developing CMM and CBM resources.5
References
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ICT Expo 2016 starts today at Misheel Expo
May 18 (gogo.mn) Mongolia celebrates the 95th anniversary of establishment of modern telecommunication this year. Mongolia is organizing the biggest information and technology event "ICT Expo" at Misheel expo center coinciding the World Telecommunication and Information Society day on May 18.
The event is being organized for the 10th year and is running under the subject "Unlimited Opportunity" and 99 companies are participating to introduce their service and products.
Official opening ceremony will start 11:00 at Misheel Expo. The expo will run for five days, introducing many new, interesting services and products while holding some side events such as "National E-Sports championship", "Cosplay tournament".
President Elbegdorj begins visit to South Korea
May 18 (news.mn) At the invitation of South Korean President Park Geun-hye, the President of Mongolia's official visit starts today. The state visit to South Korea lasts from 18th to 20th May.
During the visit, the two presidents will exchange their opinions on deepening the "Complete Partnership" with South Korea, maintaining the frequency of high level visits and strengthening relationships especially in the economic sphere. They will also discuss regional and international issues.
President Ts.Elbegdorj will have an official meeting with President Park Geun-hye and will meet the Speaker of the South Korean National Assembly, Mr Chung Eui-hwa and the Mayor of Seoul, Mr Park Won-soon. In the framework of the visit, the President will meet Mongolians who are working and living in the country and visit the South Korean University for Foreign Studies where he will make a speech entitled "Mongolian Foreign Policy and Regional Security". Mr Elbegdorj will also give an interview to the KBS television.
Related:
President Ts.Elbegdorj arrives in South Korea – Montsame, May 18
UAE to open embassy in Mongolia, Speaker receives new ambassador
Ulaanbaatar, May 18 (MONTSAME) Mongolia is pleased that the government of the United Arab Emirates (UAE) decided to open its Embassy in Ulaanbaatar, said Z.Enkhbold, the Speaker of parliament during a meeting with Abdullah Abdulrahman Abdullabin Rabia Al Tinij, the Ambassador of the United Arab Emirates to Mongolia on Wednesday.
The Speaker congratulated Abdullah on his assignment as the Ambassador to Mongolia, and underlined the UAE's governmental decision is evidence that UAE attaches a great significance to the relations and cooperation with Mongolia.
The Ambassador expressed gratitude to the Speaker for the audience, and conveyed to him greetings of Khalifa bin Zayed bin Sultan Al Nahyan, the UAE President; and Sheikh Amal Al Qubaisi, the Speaker of the Federal National Council. Noting that the inter-parliamentary ties play a vital role in boosting and strengthening bilateral relations and cooperation, Abdullah pointed out his country is attaching importance to focusing bilateral ties on politics, economy, trade and culture.
"The Embassy will start issuing visas in near future, therefore I am confident that our relations will activate, and we are studying a possibility to open direct flights between the countries," the Ambassador said.
Mongolia has been developing friendly relations with the UAE, the Speaker noted and added he believes that the UAE Embassy will significantly contribute to broadening the Mongolia-UAE relations and cooperation especially the collaboration between the legislative bodies. He said the bilateral ties and cooperation will progress not only in political and economic spheres, but also in other fields.
2nd Mongolia-Thailand MFA consultations held in Bangkok
Ulaanbaatar, May 18 (MONTSAME) The Foreign Ministries of Mongolia and the Kingdom of Thailand held Tuesday their 2nd consultative meeting in Bangkok city, which was co-chaired by D.Gankhuyag, the State Secretary of the Mongolian Ministry of Foreign Affairs; and Vitavas Srivihok, acting State Secretary of the Thai Minister of Foreign Affairs.
The meeting addressed a broad range of topics related to expanding bilateral friendly relations and cooperation in the spheres of politics, economy, trade, tourism, health, education and humanity, as well as regional and international issues of mutual concern. Underlining an importance of holding reciprocal high-level visits and meetings on a regular basis for expanding the cooperation between the two countries, three sides welcomed the results of implementation of agreements reached at the 1st consultative meeting which took place in Bangkok.
D.Gankhuyag gave details on preparation works for the upcoming 11th ASEM Summit in UB and celebration of the 20th anniversary of the ASEM, and acknowledged active participation of Thai delegates in meetings held within the ASEM.
Started under auspices of Princess of Thailand, the "Lunch" project is succeeding in rural schools, noted D.Gankhuyag and thanked the Thai side for organizing workshops in 2014 and 2015 dedicated to Mongolian young public servants in frames of the Thailand International Cooperation Agency (TICA). He put forward a proposal to make this workshop regular.
The State Secretary asked Thailand to cooperate with Mongolia in establishing a vocational training center in Mongolia with support from the TICA in order to provide youths with occupations and job places.
During the meeting, the parties agreed to support each other within the UN and other international organizations. As a member of the Group of 77, Thailand is ready to push forward a Mongolian initiative on establishing the International Think Tank for Landlocked Developing Countries.
Measles vaccination rate at 43.9%
May 18 (gogo.mn) As of yesterday at 11 am, the percentage of people being vaccinated against measles and rubella have reached 43.9%. In other words, 274 thousand people have vaccinated against measles and rubella out of total 640 thousand people need to be vaccinated.
As of yesterday at 12 pm, the percentage of people being vaccinated was 34.5%.
An additional immunization have started on May 12 throughout the nation and will continue until May 25. All health clinics and health centers of districts and aimags are working everyday even weekends to vaccinate the people.
You can get the vaccine at any health centers near you.
Related:
Measles immunization to be intensified – news.mn, May 18
National Naadam Organizing Committee Approves Budget for Parliament Approval
Ulaanbaatar, May 18 (MONTSAME) A regular meeting of the Naadam festival organizing committee discussed Tuesday a draft budget for the celebration and decided to submit it to parliament.
The committee also nominated N.Naranbaatar, director of the Academic Theatre of Drama; and G.Tsoggerel, the director of the Academic Ensemble of National Song and Dance to assign as directors of opening and closing ceremonies of and state ceremonial concerts for the Naadam festival which is dedicated to the 2225th anniversary of the Mongolian statehood, the 810th anniversary of the Great Mongolian Empire and the 95th anniversary of the People's Revolution of Mongolia. It considered as necessity to choose the ceremonies directors through selection.
Deputy Premier and chair of the organizing committee Ts.Oyunbaatar tasked heads of the sub-committees to ensure the preparation works for the festival and to draft program of the events for presenting at the next meeting.
25th Mister Mongolia to be held May 28-29
May 18 (gogo.mn) The Mongolian Bodybuilding, Fitness Association is organizing the 25th 'Mister of Mongolia' competition on May 28-29 at UB Palace.
The competition will run in 17 different categories. First three place winners will qualify for the Asian World Championship taking place between Sept 2-8 in Butan, and then followed up by the World Championship in Nov in San Paula, Brasil.
In the past, 25 athletes were crowned as the Mister of Mongolia. And 'Taikhar' club has the most winning record while J.Nurlan, first Mongolian to win the World Championship and Mongolian State Honored Athlete, won the competition 4 times setting personnel record in the Mister of Mongolia competition history.
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