[Chalco threatens lawsuit, Erdenes TT's Hancock "resigns", and China-Mongolia relationship at its "best" in history]

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Blue Wolf Mongolia Countdown: 83 days left till liquidation

 

Mongolia’s Erdenes TT COO Hancock Said to Resign on Cash Crunch

January 29 (Bloomberg) Graeme Hancock, the chief operating officer of Erdenes Tavan Tolgoi, has resigned as the Mongolian coal mining company faces a cash crunch that’s disrupted shipments to China, a person familiar with the situation said.

The board of the state-run company accepted Hancock’s resignation this week, the person said, declining to be named before the matter is announced publicly. Hancock was the second- highest executive at Erdenes TT, as the miner is also known, and his role included preparing the company to list in Hong Kong, London and on a domestic bourse, the person said.

The departure of Hancock comes as Erdenes TT delays a share sale to focus on securing state financing and restarting shipments, as well as negotiating better sales terms from its biggest buyer, the Aluminum Corp. (2600) of China Ltd. Erdenes stopped deliveries to Chalco, as the Chinese state company is known, on Jan. 11 after saying it could no longer pay the cost of sending the coal to the China.

Mongolia has pledged a $355 million loan to help Erdenes TT climb out of debts, the mining company’s chief executive officer Yaichil Batsuuri said last week. Still, Prime Minister Norovyn Altankhuyag said Jan. 23 that the supply deal between Erdenes TT and Chalco must be renegotiated.

Erdenes TT spokeswoman Gurjav Enkhmanduul said she could not comment on Hancock’s resignation as it has not yet been announced internally. The former mining specialist at the World Bank is the second Erdenes TT executive to resign in the last three months. Baasangombo Enebish quit as the CEO in October, citing personal reasons.

IPO Delay

Erdenes TT, which has delayed its initial public offering several times since 2011, is not likely to seek a share sale until at least 2014, according to Batsuuri, who took over from Enebish.

The current priority is to secure better pricing from Chalco, Batsuuri said. Erdenes TT supplies coal to Chalco at $53 a metric ton, less than the $61 it costs to move it to the Tsagaan Khaad border station, he said.

Chalco International Trading President Li Dongguang said yesterday that the Chinese company will not renegotiate the accord with Erdenes TT, which began operating its first mine in 2011. Instead, Chalco is willing to help the Mongolian company solve financing problems, Li said.

Erdenes TT mines the East Tsankhi part of the 6-billion-ton Tavan Tolgoi field, one of the largest coal deposits in Mongolia. The state company also owns the rights to the untapped West Tsankhi block, which Mongolia has considered leasing to foreign miners in return for royalties.

The money Mongolia plans to lend Erdenes TT will help the company end its contract with Chalco and buy equipment to begin the development of the West Tsankhi block, Batsuuri said.

Mongolia will use part of the $580 million raised from the March 2011 bond sale by the state-owned Development Bank of Mongolia LLC for the loan to Erdenes TT, Ulan Bator-based Origo Partners Plc (OPP) said in a note on Jan. 25, citing comments made by the prime minister in the capital on Jan. 23.

Link to article

 

UPDATE 2-Chalco threatens legal action in Mongolia coal dispute

* Will seek compensation if Tavan Tolgoi breaches deal

* Offers to help pay Mongolian transportation costs

* Already paying $100 per tonne

By Wan Xu and David Stanway

BEIJING, Jan 28 (Reuters) - The Aluminium Corporation of China (Chalco) warned it would seek legal redress if Mongolia breaks what it says is a loss-making coal supply deal.

Mongolia's state-owned Erdenes-Tavan Tolgoi (E-TT), which runs the 7.5 billion-tonne Tavan Tolgoi project, wants to renegotiate a 2011 deal with Chalco to supply $250 million worth of coal.

E-TT last week delayed an IPO of up to $3 billion, citing problems with infrastructure and the deal with Chalco.

Li Dongguang, the president of China Aluminium International Trading Co Ltd, a subsidiary overseeing the Mongolian deal, told a news conference the company would punish any breach.

"If they maliciously breach the contract in order to seek their unilateral interest and neglect the interests of the other side, in that case the compensation will have no upper limit. In that case, we would take legal action," Li said.

Li said Chalco imported 2.37 million tonnes of coal from Tavan Tolgoi in 2012, less than the original plan for 3 to 4 million tonnes.

Chalco made an advance payment of $250 million in July 2011. Shipments to China were suspended earlier this month because the Mongolian firm was unable to pay the costs of delivery.

Chalco would be willing to provide financial help to E-TT to keep operations running, and would consider paying the company's transportation costs, but it says all offers have been ignored.

"We have proposed many solution plans, but there has been no response from them," said Liu Xiangyu, the manager of the company's Hong Kong unit, who is in direct talks with Mongolia. "All they request is to adjust the price, cut the volume, and renegotiate."

HIGHER PRICES

Batsuuri Yaichil, the chief executive of E-TT, last week told Reuters the prices paid by Chalco were lower than the cost of production, and that Mongolia wanted to sell its coal to other customers at international prices.

Chalco said the prices were index-based, with a 10 percent discount compared with Australian prices to account for the lower quality of Mongolian coking coal.

Li said Chalco was paying as much as $100 per tonne to move Tavan Tolgoi coking coal across the border to markets in southern and eastern China.

"The new management team (of E-TT) doesn't understand the situation," he said.

Chalco has long sought to invest in Mongolia's mines, but it has faced political opposition.

A $926 million bid for Canada's Mongolia-based coal miner SouthGobi Resources was dropped in October after it became clear the bid would not be approved.

Last year, the Chinese firm also abandoned an agreement to buy a 29.9 percent stake in Winsway Coking Coal Holdings , which delivers coal from Mongolia to China, for $308 million, as it would not be able to win approvals from Chinese and overseas authorities.

Link to article

 

China-Mongolia Coal Spat Heats Up

January 28 (WSJ) Escalating a standoff with Mongolia over access to a portion of its rich coal reserves, a Chinese state-run company threatened to seek legal action if its Mongolian partner fails to abide by their contract.

Executives with Aluminum Corp. of China Ltd., or Chalco, said Monday that its $350 million coal-for-loans deal (Mogi: $250m is the correct amount)  with Mongolia's Erdenes-Tavan Tolgoi LLC was agreed upon by both companies more than a year ago and sanctioned by both governments. Liu Xiangyu, the general manager of the Chalco unit that negotiated the deal, said Mongolian officials' recent objections to the terms of the deal are "baseless."

"A unilateral breach of the contract...could mean unlimited monetary damages," Li Dongguang, president of Chalco subsidiary China Aluminum International Trading Co., said Monday, adding that he hoped Mongolia "won't walk further and further away."

Mr. Li linked the coal spat to what he described as a wider trend in the new Mongolian government, elected in June, of attempting to revisit all its global mining deals.

A senior executive of state-controlled Erdenes-Tavan Tolgoi declined to comment on the legal dispute Monday. A Mongolian foreign-ministry official said he didn't have an immediate comment.

Last week, Erdenes-Tavan Tolgoi said it had halted coal exports to China and threatened to cancel the coal-supply deal. Mongolia's ambassador to Beijing, Tsedenjav Sukhbaatar, told The Wall Street Journal on Friday that the pricing terms of the deal, which he said capped Mongolia's coal exports at $70 a metric ton, were "unacceptable in the sense of normal international trade."

The dispute marks an early test in the development of what is considered one of the world's largest coal deposits. Energy-hungry China hopes to tap supplies of the Tavan Tolgoi coal deposit. But Mongolia faces a surge of resource nationalism at home as well as concerns over China's growing economic sway there.

It isn't clear how the dispute might affect the mining company's planned public offer, which has been delayed repeatedly and now taken off this year's calendar while the Mongolian government focuses on putting the mine's infrastructure in place.

Separately, the board of Erdenes-Tavan Tolgoi asked Chief Operating Officer Graeme Hancock to resign due to uncertainty surrounding the fundraising plans, according to a person familiar with the matter. The company needs to cut costs, the person said, and with a listing uncertain Mr. Hancock's position "is no longer as important to the company." Tsenguun Tsogt, head of the company's investment and financing department, declined to comment on the resignation.

The production under dispute represents less than 1% of the Tavan Tolgoi deposit, which by some estimates totals more than one billion tons of high-quality coking coal. Mongolia hasn't made any final decision about the development rights to other parts of the deposit after scotching a bidding process in 2011 that drew interest from China Shenhua Energy Co., Peabody Energy Corp. of the U.S. and a Mongolian-Russian consortium.

Under the deal, Chalco had lent $350 million to help fund Tavan Tolgoi's operations (Mogi: $250m), which was to be repaid in coal. Mr. Sukhbaatar said Friday that more than half the loan had been repaid but the Mongolian government now wants to completely renegotiate the deal. Mr. Sukhbaatar had said Mongolia was now keen to deal with Shenhua rather than Chalco on all bilateral coal matters, a move that could set up a potential contest between two Chinese companies. Shenhua has said it still needs to study the issue.

Chalco officials said they weren't aware if Shenhua had opened talks with Erdenes-Tavan Tolgoi but expressed confidence that Shenhua won't break ranks with another Chinese company.

Ms. Liu, general manager of the Chalco unit that negotiated the deal, said the terms of the deal pegged Mongolia's coal price to market movements and weren't capped at a single price. She declined to disclose specifics on pricing but said the contract price was higher than the market price at the time the deal was signed, though the term price declined in line with the global coal market last year.

Chalco was continuing to reach out to the Mongolian government, and was willing to consider more loans to tide over its operational needs if necessary, said Mr. Li of China Aluminum.

Erdenes-Tavan Tolgoi last year exported 2.37 million tons of coking coal, which is used to make metals, out of a planned three million to four million tons. China's total coking-coal imports reached 19 million tons last year.

Link to article

 

China-Mongolia relationship at its best in history: ambassador

ULAN BATOR, Jan. 28 (Xinhua) -- China and Mongolia have made great efforts to deepen their strategic partnership established in 2011 and their relationship is currently at its best in history, Chinese ambassador Wang Xiaolong told Xinhua in a recent interview.

Wang made the remarks days ahead of a scheduled visit to Mongolia by Wu Bangguo, chairman of the Standing Committee of China's National People's Congress.

It is the common aspiration of both countries to consolidate their friendship, deepen bilateral cooperation and continuously push forward bilateral ties so as to promote development in both countries and bring more benefits for both peoples, Wang said.

China and Mongolia have maintained frequent exchange of high-level visits, the Chinese ambassador said, adding that such factors have greatly contributed to the deepening of political mutual trust between the two neighbors.

In June 2012, Mongolian President Tsakhia Elbegdorj met respectively with his Chinese counterpart, Hu Jintao, and Chinese Vice Premier Li Keqiang on the sidelines of the 12th Shanghai Cooperation Organization summit in Beijing.

During the meetings, the leaders mapped out the route for further development of the China-Mongolia strategic partnership and reached various agreements on trade, economic cooperation and cultural exchanges, Wang said.

In August, Chinese State Councilor Dai Bingguo visited Mongolia soon after the country installed a new parliament and government in order to consolidate the smooth development of bilateral relations, Wang said.

Both countries have viewed their bilateral ties from a strategic perspective and showed respect for each other's core interests and major concerns, Wang said, adding that the two sides have also maintained thorough communication on global and regional issues of common concern.

On the economic front, the two countries have seen rapid growth in two-way trade in the past decade, from 360 million U.S. dollars in 2002 to 6.6 billion dollars in 2012, among which 3.9 billion dollars were Mongolian exports to China, said Wang.

China has been Mongolia's biggest trade partner and top investment source country for several years, he added.

Alongside enhanced political trust and booming economic ties, people-to-people exchanges between the two countries have also become more active in recent years, Wang said.

According to the ambassador, more than 6,000 Mongolian students are studying in China and most of the Mongolian universities now have Chinese language courses.

The reciprocal hosting of culture month by China and Mongolia in 2012 also yielded positive results, Wang added.

The Chinese ambassador believed there are new opportunities for the development of China-Mongolia relations and the two countries could realize win-win results and common development as long as they properly take advantage of complementarity of the two economies.

Link to article

 

Altan Rio Proposes Shares for Drilling Settlement

VANCOUVER, Jan. 28, 2013 /CNW/ - Altan Rio Minerals Limited, TSX.V: AMO ("Altan Rio" or the "Company") announces that, subject to acceptance by the TSX Venture Exchange, it proposes settling a debt for drilling services of $245,860 to Erdenyn Erel LLC ("EEL" or "Erdenyn Erel"), a private Mongolian company, by issuance of an aggregate of 1,606,928 common shares in the Company. As per the agreement dated June 19th, 2012, with EEL, shares will be issued at a 15% discount to market price. The Company's shares closed on January 25th, 2013, the last closing price prior to this release, at $0.18; therefore a 15% discount from this price yields a settlement price of$0.153. The proposed shares to be issued in this settlement of debt will be subject to a hold period of four months and one day from the date of issuance.

Erdenyn Erel drilled 3,030.35 m at the Company's Chandman-Yol copper-gold porphyry project in western Mongolia in 2012. For more information on the recently released drill results please see the Company's news release from January 18th, 2013.

Link to release

 

BDSec WEEKLY

January 28 (BDSec JSC) --

Highlights:

•      After 7 consecutive weeks of gain, Mongolian bourse closed at negative value: MSE Top 20 index went down by 0.97% to close at 18,112.9 points whilst BDS index lost 1.11% to 3,954.2 points. Total market cap reached 1,299.3 mil USD, which is 0.63% lower than the previous week.

•      Despite the short term risk aversion, we are bullish in a year of 2013 in terms of macro-economic wise considering preliminary statistics released by National Statistics Office: GDP grew 12.3% in real terms, foreign trade turnover reached 71.2 billion USD, which is 7.1% higher than the previous year and total loan outstanding hit 6.8 trillion MNT (~4.9 bil USD) that is 21.7% higher than the same period of the previous year.

•      Beverage producer APU (APU), concrete manufacturer Remicon (RMC) and coking coal exporter Tavan Tolgoi (TTL), which are one of the most liquid stocks, stayed relatively flat throughout the week and collectively constituted 60% of the total trading value of the last week.

…

Link to report

 

Nexia International welcomes new member from Mongolia

January 28 (Nexia) We are pleased to announce the addition of a new member firm from Mongolia, Sevillia Audit LLC.

Link to tweet

 

PREMIER N.ALTANKHUYAG INTRODUCED THE REASONS OF FIRING SOME AUTHORITIES OF THE STATE-OWNED COMPANIES

January 28 (InfoMongolia) On January 25, the Government Chairman Norov ALTANKHUYAG hosted a regular monthly on-line meeting, namely “Responsibility, Implementation and Control”, with authorities of the Ministries and Agencies to sum up and give directions on utmost importance to be resolved matters.

At the beginning of the meeting Premier noted that some Ministries and Agencies have accomplished their duties for the past month pretty well, but besides well-doings  there other misunderstandings being aroused that had to be clarified and informed openly. Particularly, in recent days complaints have been heightened that the large number of public servants being fired from their jobs, or the Government Bonds’ interest causing to balance the state economical situation of Mongolia, mentioned Prime Minister N.Altankhuyag.

Thereby, Prime Minister N.Altankhuyag in order to clarify stated the following, ”The Government is working to eliminate the immoral deeds happening in public service and in its system, before some detailed information regarding the state activity was not introduced to public, which consequently it causes some misunderstandings among public, hence from now on I want all authorities to inform their actions open via press and media. Though, several authorities from state-owned companies being fired were a group of people that accused laundering money from state properties who used civil servants’ sovereignty. These officials were removed under reasonable grounds.

For instance, the State Bank of Mongolia’s head was abdicated; in connection with its six members of the management board of the Bank each defrauded 90 million MNT under the reason of “Worked Profitably”. Civilians are in line to get a 9-million long term loan, where a few authorities in the Bank just awarding themselves from state money.

Another sample, Chairman of the “Erdenes Tavan Tolgoi” JSC was fired, the company most expected to be the nation’s “cash cow” instead become nearly to bankruptcy, besides the Company’s Agreement made with Chalco is not profitable causing great loss so far.

Also, MIAT Mongolian Airlines authorities were removed. One example to say is the company spent 3.8 billion MNT (approx. 2.7 million USD) last year for a “household support” and 14 billion MNT for last 5 years, moreover 1.2 billion MNT for a business trip.

The latter money is enough to supply with complete computer tomography equipments for an aimag hospital, hence aimag residents are coming for diagnosis to the capital city.

There are several same samples in other state entities such as General Customs and Taxation. Therefore the Government will protect its civilian’s rights and renew the system; we will not allow anymore laundering money from state properties”.

Link to article

 

Speculation on withdrawal of MNDP from Government

January 29 (news.mn) A rumor has started that MPRP-MNDP (Mongolian People`s Revolutionary Party- Mongolian National Democratic Party) Justice coalition is to withdraw from the Government. 

There is speculation that the Justice Coalition will withdraw from the Government after Enkhsaikhan Mendsaikhan, the head of MNDP was dismissed from the post as the head of the Mongolian Railway joint venture.

But Enkhsaikhan Mendsaikhan, the head of MNDP spoke to journalists saying that “the MNDP membership discussion meeting was held today. We discussed and shared opinions on the issues about geopolitics, geo-economics and Mongolia. We also discussed the current Government`s main policies.

During the meeting members of MNDP reached a decision to hold a plenary meeting of MNDP in the next few days. But we cannot give more details.”

Observers are saying that MNDP will decide whether or not to withdraw from the Government during the up-coming plenary meeting.

Link to article

 

Central Bank Survey on Commercial Banks

January 28 (news.mn) The Central Bank of Mongolia conducted a poll survey of loans and saving rates among commercial banks in the fourth quarter of last year. 

The survey involved 14 senior officials from banks.  According to the survey, commercial banks issued 7 trillion MNT in loans in 2012. This is a 24.1 percent increase on the previous year. The weighted average interest rose to 18.2 percent gaining 2.7 percent. 

During 2000 to 2007 a good time in foreign and domestic markets caused loan interest rates to collapse. 

But loan interest has risen up to 18.2 percent since last April. Organisations say that the commercial bank interest loan rates that are near to 20 percent are too high. 

In the survey the Central bank asked: “Do you think loan interest is high”, in order to observe commercial bank’s views. 

Most of the bank officials replied that the loan interest rate is high. 

The explanation given for the high loan interest is due to scarce and high valued loan sources. According to the survey 57 percent of commercial bank loan interest is not based on the Central Banks interest rate, but instead consider expenses and other bank`s average interest and savings interest rate. 

The survey indicated that commercial banks make up an assessment for loans of 54 percent from savings, 24 percent from current account and 16 percent from foreign investment sources. 

Only one of the commercial banks in the survey revealed that it could decrease its savings interest rate in three months while 54 percent of them replied to decrease in 3-9 months and15 percent would do so in 9-12 months. 

The remaining 15 percent revealed that they would not decrease their savings rate. 

The survey indicated that when the savings rate is not decreased the fall in loan interest rates is impossible. 

Over 35 percent of the commercial banks involved in the survey revealed they would increase their loan interest in 2013 while 57 percent said they would make no changes. Only 7 percent of them promised to decrease loan interest rates. 

Link to article

 

Mongolia: Balance of Payments Analytic Presentation - 2012

January 28 (Bank of Mongolia) --

Link to Excel sheet

 

Fuel importers vs AFCCP

January 28 (news.mn) The Authority for Fair Competition and Consumer Protection (AFCCP) has imposed a 4.9 billion MNT fine to NIC, the National fuel importer company, for allegedly intentionally creating a false fuel shortage last November. 

The Authority for Fair Competition and Consumer Protection (AFCCP) accused the company for neglecting the ban to serve customers with vouchers when the fuel reserves are not low on 6th and 7th November, violating the regulation ruled by the AFCCP. 

The Petroleum Authority also proved the allegation that the company created a false fuel shortage through an inspection. 

But NIC refuted the allegation and sued the Administrative Court claiming the Authority imposed illegal fines. 

O.Magnai, the Chief of the Authority for Fair Competition and Consumer Protection explained that “it is not acceptable for the State to grant lower interest loans to a company that sued against a State agency. Therefore we suspended 50 billion lower interest loans that were to be issued to NIC by the Central Bank. We expect now that the Court will reach a fair decision on the case”.

Not including the 4.9 billion MNT fines to NIC, the Authority for Fair Competition and Consumer Protection also imposed 17 billion and 249 million MNT fines to eight importer companies for increasing the fuel price to 230 MNT after conspiring together in 2011. 

The Authority for Fair Competition and Consumer Protection imposed fines of 6 billion MNT to NIC, 4.5 to Magnai Trade, 2 billion to Sod Mongol and 1 billion to Just Oil, Oin Birj, Shunkhlai Trade, M Oil and PetroJump LLC. 

However, last May B.Lhagva canceled the fines to fuel importers claiming the allegations were reasonless after he was appointed the Chief of the Authority for Fair Competition and Consumer Protection.  

O.Magnai again raised the issues of fines at the directors` board meeting of the Authority for Fair Competition and Consumer Protection to recover the fines due from the fuel importers after he was appointed as the Chief. 

B.Lhagva , the former chief of the Authority for Fair Competition and Consumer Protection has been questioned by the Anti Corruption Authority over the case. 

Link to article

 

City Mayor plans industrial town in Baganuur

January 28 (news.mn) MPs were presented with the Master Plan to develop Ulaanbaatar City by Governor E.Bat-Uul during the DP caucus meeting on Monday. 

The Master Plan is designed to focus on population centralization. According to the plan the Ulaanbaatar City Administration will consider not letting the population of Ulaanbaatar reach more than 1.4 million by 2030. Currently 1.2 million people reside in the City. In order to decelerate centralization in the City measures to build new towns are being planned. 

For instance, it was decided to establish small and medium scale industrial regions by building a transport logistic center in Bagakhangai district, while Baganuur district is planned to be turned into a heavy industrial district with a student village nearby. 

The plan also included the idea to establish a building material industry in Nalaikh district. Building industrial centers in the districts will open a door to people to dwell in the towns near to the City. The City Administrative hopes that centralization in Ulaanbaatar city will be lessened as a result. 

The project to turn ger districts into apartment districts and the plan of development for Bayankhoshuu in Songinokhairkhan district and Doloon buudal in Chingeltei district like Darkhan – Uul aimag was already planned. 

There is a lot of speculation that the City Administration will be moved from the city center. But the City Governor said that the suggestion to remove the City Administrative from the city center to the western part of the city, in Songinokhairkhan district, is still in consideration. 

The City Governor also stated that the V Power Plant project has now reached the inquiry stage. 

Link to article

 

Misc

Book

LIVE From Mongolia!: From Wall Street Banker to Mongolian News Anchor

By Patricia Sexton

EAT
Blowtorched sheep. Wash down with fermented horse milk. 

PRAY
Beneath a canopy of stars under the endless Mongolian sky. 

LOVE
Fall in love with the possibility of a future you'd only ever dreamed of. 

In 2006, author Patricia Sexton set out on a journey most of us have only ever fantasized about. She quit her job to pursue her dream. Thirty years old and a rising star at a Wall Street investment bank, Patricia wanted nothing more than to work as a foreign correspondent. So, that's just what she did, moving to Mongolia after landing an internship at the country's national TV station. 

"LIVE from Mongolia!" follows Patricia's unlikely journey from Wall Street to Ulan Bator. And it doesn't stop there. Not only does Patricia manage to get promoted to anchor of the Mongolian news, she also begins to meet some very unusual people following very unusual dreams of their own. There's the Mongolian hip-hop star who worked in London restaurants to make his dream come true, the Italian textile executive who left everything behind to pursue his passion for mozzarella cheese, the German brewmaster plying his trade so lovingly that there were always tears in his eyes. And many more. 

While Patricia chronicles her own journey from what she'd been told to pursue in life, to what she actually wanted to pursue, she meets and chronicles the stories of others on much the same path. And all this while Patricia is learning the ropes of reporting the news for the first time, camping with nomads in the Gobi desert, traveling to Siberia to meet a shaman, and even crashing Genghis Khan's 800th anniversary party. 

But of course a journey like this isn't without its stumbles, and Patricia has her fair share of them, including briefly returning to Wall Street -- even after meeting with the president of CNN. 

It isn't often that the Executive Producer of CBS Evening News gives out blurbs, but what Rick Kaplan had to say describes it best: "Leaving a good job on Wall Street for the unknown in Mongolia? I've never heard of a more ill-conceived plan. But although author Patricia Sexton achieved what she set out to do -- change her life -- hers is a journey that is by no means finished."

"LIVE from Mongolia!" is the story of this ongoing journey -- from a corporate career to a dream job, one that even Patricia hadn't imagined she'd land.

Link to article

 

Breckenridge International Snow Sculpture Championships Awards Mongolia 1st Place

January 28 (Huffington Post) The 23rd annual International Snow Sculpture Championships in Breckenridge is an eagerly-awaited event that brings the Colorado snow to life.

This year's first place winner of both the Artist's and People's Choice Awards was Team Mongolia, whose "Mongolian Warriors" sculpture depicted life-like 13th-century warriors and their horses striding out of a solid 20-ton block base of snow.

“Team Mongolia evoked the furious energy of galloping across the Mongolian steppe,” said Jenn Cram, judge coordinator and Breckenridge Arts District Administrator. “The piece is powerful with its deliberate attention to detail and the dynamic alignment of planes. We could see that sculpture done in bronze, in marble; it was truly a sculptural piece.”

Alongside 14 other teams, Mongolia worked a total of 65 hours across five days without the use of power tools, internal support structures or colorants.

Second place was awarded to Team Catalonia-Spain for their homage to Picasso, or "Banyista Nua" piece. Team Estonia won third place with their piece titled "Koit."

The sculptures this year were built from Jan. 22-26, with some artists staying up all night to complete their masterpieces.

Last year's winner of the Snow Sculpture Championships was Team Canada-Quebec with a piece entitled, "Great Expectations."

Link to article

 

--

“Mogi” Munkhdul Badral

Cover Mongolia

Email: mogi@covermongolia.mn

Mobile: +976 9999 6779

Skype: mogibb

[Banks lower MMC ratings, MTZ granted $55m DBM financing, and million dollar Asashoryu swindler gets jail]

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Blue Wolf Mongolia Countdown: 84 days left till liquidation

 

JPM lowers MMC (00975) to "neutral" & HK$4.5

[ET Net News Agency, 23 January 2013] JP Morgan lowered its target price for Mongolian Mining Corporation (MMC)(00975) to HK$4.5 from HK$5.5, and downgraded the stock to "neutral" from "overweight".

MMC expects a FY2012 loss, while the stock has enjoyed a 30% rebound from its September 2012 low. However, JPM believes downside may be limited given improving coking coal markets and MMC's strong leverage to coking coal prices. (KL) 

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Citi cuts Mongol Mining (00975) TP to HK$4.8, maintains "buy" call

[ET Net News Agency, 24 January 2013] Citigroup lowered its price target for Mongolian Mining (MMC)(00975) to HK$4.8 from HK$5.2, and maintained its "buy" call. 

The research house said MMC's development, from a profitability perspective, has been slower than expected. Nonetheless, Citi likes MMC's value proposition as a low cost base load supplier of coking coal to China.

It believes that coking coal prices should firm slowly in 2013, but value in the shares would be a function of MMC growing and maximizing HCC volumes under the new mine plan and monetizing improving infrastructure over time. (KL) 

Link to article

 

Moody's reviews Mongolian Mining's B1 ratings for downgrade

[ET Net News Agency, 24 January 2013] Moody's Investors Service has placed Mongolian Mining Corporation's (MMC)(00975) B1 corporate family and senior unsecured ratings under review for downgrade after MMC's profit warning announcement on 21 January 2012 of an expected consolidated loss for its FY 2012 financial results, owing to the decrease in the selling price of coking coal, and increases in its finance costs, as well as inventory loss provisions. 

"MMC was expected to announce a breakeven net profit for 2012. Its warning of a loss, with weaker cash flows anticipated could temper its liquidity and hinder its ability to ride out the relatively lower prices for coking coal," said Simon Wong, a Moody's Vice President and Senior Analyst. 

"The announcement also comes on top of MMC's weaker-than-expected results for the first half of the year, from poor sales volumes and lower operating margins because of weakened Chinese demand for coking coal," Wong added. (KL) 

Link to article

 

Prophecy Coal Announces Executive Chairman Appointment and Director Resignation

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Jan. 25, 2013) - Prophecy Coal Corp. ("Prophecy Coal" or the "Company") (TSX:PCY)(OTCQX:PRPCF)(FRANKFURT:1P2) is pleased to announce that Mr. John Lee has transitioned from his role as Chief Executive Officer ("CEO") of the Company to Executive Chairman of the Board of Directors (the "Board") of the Company.

The Board has determined that the Company has reached a critical stage and now requires Mr. Lee to focus his time and attention on negotiating the major government and joint venture agreements for the development of the Company's Chandgana power plant project in Mongolia.

To complement Mr. Lee in his role as Executive Chairman of the Board, the Company has initiated a search for a new CEO to carry out day-to-day management responsibilities as the Company transitions into a true developer of coal powered electrical generation. Mr. Lee will serve as Interim CEO until a new candidate has been identified and appointed.

Prophecy Coal also announces the resignation of Mr. Jivko Savov as a director of the Company. In light of recent increases to his responsibilities as Director of Global Business Development, M&A and Retail for Gazprom in London, Mr. Savov has decided to focus his attention on his position with Gazprom. As such, Mr. Savov considered that it would be best for him to step down from the Board. However, Mr. Savov will continue to assist Prophecy in its business development as an advisor. The Board wishes to thank Mr. Savov for his contribution to the Company to date and looks forward to Mr. Savov working with the Company in the future in an advisory capacity.

Link to release

 

Petro Matad: Issue of Equity

January 25, Petro Matad Limited (MATD:LN) -- 

Issue of Equity

Petro Matad announces that it will issue 500,000 ordinary shares of US$0.01 each under the Company's Long Term Equity Incentive Plan (the "Plan") (the "New Shares").  The New Shares will be issued, under the terms of the Plan, at nominal value. 

Application has been made for the New Shares to be admitted to AIM and it is anticipated that this will occur on or around 31 January 2013. 

Total Voting Rights

Following the issue of the New Shares, Petro Matad will have 186,676,001 shares in issue. There are no shares held in treasury and therefore the total voting rights in the Company will be 186,676,001.

Link to article

 

Mongolia Cuts Rates for First Time Since 2009 to Support Growth

January 26 (Bloomberg) Mongolia's central bank cut interest rates for the first time since 2009 after determining that the outlook for inflation is benign and deciding to "cautiously" ease policy, its chief economist said.

The Bank of Mongolia reduced its policy rate to 12.5 percent from the previous 13.25 percent effective yesterday, according to a table on the monetary authority's website and confirmed by chief economist Sandagdorj Bold. The central bank is confident it will be able to achieve its 8 percent inflation target for this year, Bold said in a telephone interview.

Mongolia's gross domestic product growth moderated to 12.3 percent last year from a record 17.3 percent in 2011 after the price of coal, the biggest export, fell. Slower growth in China, which buys 92 percent of Mongolian exports, also reduced demand.

Inflationary pressure has eased as a result of fiscal limits adopted by the government that have resulted in "more disciplined" spending, Bold said.

Programs by the central bank to ensure the stability of food, fuel, housing and transportation costs have also helped, he said. Those efforts included providing loans to importers of fuel, he said.

Mongolia's central bank at the end of last year gave the country's fuel importers 83 billion tugrik ($59.7 million) of loans after the companies said they may have to increase gasoline prices, news website News.mn reported this month.

The nation's economy has been spurred by a mining boom and influx of capital to fund projects such as the $6 billion Oyu Tolgoi copper and gold mine operated by Rio Tinto Group.

Mongolia exported 20.9 million tons of coal last year, down from 21.3 million in 2011, according to the National Statistics Office. The value of the exported coal in 2012 was $1.9 billion, compared with $2.27 billion in 2011, according to the agency.

Link to article

 

Mongolia Bets on China Rivals to Break Impasse

BEIJING, January 25 (WSJ)—Mongolia is reaching out to China's largest coal producer, China Shenhua Energy, in an effort to break a deadlock over the terms of a souring coal-for-loan deal with another Chinese resource company, Aluminum Corp. of China Ltd., according to Mongolia's ambassador to Beijing, Tsedenjav Sukhbaatar.

China's state-owned resource giants often compete with each other—at least in the early stages—in securing projects, and Mongolia may be counting on the Chinese companies' innate sense of rivalry to prompt renegotiation of an increasingly untenable resource deal.

A deepening disagreement with China—Mongolia's largest trading partner—over the deal highlights moves to regulate foreign investment in the country's fledgling mining sector that could throw into disarray the development of Tavan Tolgoi, potentially the world's largest untapped coal reserve.

State-owned Erdenes-Tavan Tolgoi LLC, which owns the project, has halted coal exports to China in a bid to renegotiate the July agreement, under which Aluminum Corp. of China, also called Chalco, lent Tavan Tolgoi $350 million to be repaid in coal but capped the commodity's price at $70 a metric ton, Mr. Sukhbaatar told The Wall Street Journal.

"Chalco was just using a moment when the government badly needed funding to get a deal that was unacceptable in the sense of normal international trade," he said.

The management team at Tavan Tolgoi, appointed last fall by the freshly elected Mongolian government, has repaid nearly two-thirds of the loan, and now wants to change the contract to reflect fluctuating market prices for coal, he said. Coking coal import prices are about $190 a ton, according to the 52Steel.com consultancy, though they were even higher at the time the Chalco deal was reached. (Russian coal imports cost $229 a ton including transport and taxes.)

A failure to come to new terms led, in part, to Tavan Tolgoi being unable to continue to pay for transportation and exportation of the coal to China, he added.

Mongolia may be hoping Shenhua, which is in the running to develop the western half of Tavan Tolgoi, will work to resolve the impasse with a focus on gaining goodwill in its bid for the project.

"What we're trying is to deal with Shenhua as the principal and the biggest coal company" in China, he said. "They have the infrastructure. They are the international company. Chalco has nothing to do with coal."

In July, Ulan Bator awarded rights to develop Tavan Tolgoi's western area to Shenhua, Peabody Energy Corp. and a Mongolia-Russia consortium with 40%, 24% and 36% stakes, respectively. But complaints from competing countries about the bidding process led the government to hastily withdraw the decision. Mongolia hasn't made any final decision on the development rights.

An official in Shenhua's media department said Friday that the company needed to study the issue and had no immediate comment. Chalco said in a statement that it hoped Mongolia would honor all the terms of its agreement, "including confidentiality arrangements." Chalco has also said it dispatched a team in November to Tavan Tolgoi to convey Beijing's views.

Public opposition to the division of the spoils in Mongolia's newfound mining wealth in recent years prompted the new Mongolian government, elected on a crest of resource nationalism last June, to redraw policies seen as overly favoring global mining interests and potentially creating overreliance on China.

But Mr. Sukhbaatar said Friday that the Chalco coal stalemate wasn't tied to any of the proposed changes, which include proposed amendments to the country's mining law. The law, if amended, won't affect existing deals, he said.

The changes essentially would devolve project approval power to local governments and require miners to conduct "at least initial processing" before exporting coal and mineral ores, he added.

Business leaders and investors have been less sanguine about the proposed amendments. The Business Council of Mongolia said in an open letter earlier this month that the changes could "halt current minerals exploration and development in Mongolia and greatly discourage any future investment."

Exports of all other types of Mongolian commodities are proceeding as normal, Mr. Sukhbaatar said.

Tavan Tolgoi isn't likely to hold an initial public offering this year as previously planned, as Ulan Bator would prefer the mine's infrastructure to be in place, which would potentially improve the offer price, he said. Mongolia was initially seeking $3 billion in the IPO.

Link to article

Related:

Troubles at the world's largest coal mine escalate – MINING.com, January 25

Mongolia postpones Tavan Tolgoi IPO – bne, January 25

 

Development Bank cleared to provide $55 million initial financing to Mongolian Railways

January 28 (Business-Mongolia) The Cabinet meeting of Mongolian Government was held on January 26, 2012, discussing a number of timely issues faced by the policy makers. Following an earlier decision made by government, Mongolian Railway, a state owned company, has been provided with the special license to build rail tracks and related structures, and were tasked to raise the financing of the projects with local and international partners with a condition where government share is dominant.

The latest cabinet meeting decided to provide the state company with the concession to build, utilize and transfer railway infrastructure within the framework of the state policy on railway.

The Board of Development Bank was allowed by the government to do the financing of the initial USD 55 Million to be used for the implementation of "New Railway" project within February this year. Economic Development Minister N.Batbayar was tasked to ensure that future repayments of the loan are made on a timely manner to the government.

Link to article

 

Risky Mongolia could revive this hard-hit investment trust: Origo Partners

One of the worst performing investment trusts of 2012 could see a reversal of fortunes this year, writes James Carthew.

January 25 (Citywire Money) Last week's article noted that some of the best-performing investment companies of 2012 were stocks that had previously disappointed. There is a long list of disappointing stocks to trawl through to identify what might surprise on the upside in 2013 but one I have been meaning to write about for ages turned out to be one of the worst-performing funds in 2012: Origo Partners.

The decline was dramatic – the share price fell from a high of more than 51p in June 2011 to 13.375p today; the stock was trading at more than 30p as recently as last March.

Rise and fall

Origo started life late in 2006 as Origo Sino-India, and was designed to invest in fast-growing Chinese and Indian private companies. Its share price collapsed as the credit crisis took hold and, in September 2009, it was merged with Origo Resources (a separate fund launched in November 2007, which had also fallen out of favour with investors).

At the same time, it moved its focus away from the Indian side of the business to China and changed its name to Origo Partners. The fund is now designed to be a play on China's rapid urbanisation and industrialisation, the idea being that this will fuel demand for resources and a need for investment in renewable energy and clean technology. The portfolio is quite concentrated, with the top 10 investments accounting for 90%.

The company was expanded through a couple of share issues (June 2010, raising £20 million at 25p, and December 2011, raising £21 million at 36p) and an issue of $60 million of zero-dividend convertible preference shares in March 2011.

The preferences mature in March 2016, when holders can opt for $1.28 in cash or, at any time before maturity, choose to exchange them for ordinary shares at $0.95 each.

At the end of December 2011, Origo had net assets (less the preference shares) of $241 million; by September 2012, this had fallen to $202 million or 57 cents per share. This is the last published net asset value (NAV). While we can only guess at the likely NAV decline since then, it still seems likely Origo is trading at a substantial discount.

In 2011, the company initiated a $1.5 NAV buyback programme, which, while modest, should be NAV-enhancing. Net cash in September was $25.8 million, so there is room to step up share repurchases in future.

Origo is self-managed, with more than 50 employees and ongoing expenses (excluding performance fees) of about $6 million. The senior management positions are held by executive chairman Wang Chao Yong, chief executive Chris Rynning and chief financial officer Niklas Ponnert.

A performance fee introduced in 2009 gave senior management 20% of realised profits on investments over a 10% per annum hurdle. At the end of June 2012, Origo had accrued performance fees of $6 million.

There are also 13.6 million options exercisable at 31p, 11.5 million exercisable at 23.45p and 4.8 million granted in 2009, initially exercisable at 15.5p but this grows by 3.5% per annum. Most of these are held by the senior management. While all of these options are underwater, they could act as a drag on future performance and could add 8.3% to the issued share capital.

Future shock

So what upside is there in the portfolio? A lot will depend on your view of China and whether you believe the recent positive news coming out of the country will be sustained, but one issue, more than any other, has affected Origo's recent fortunes: the introduction of a new mineral law in Mongolia.

More than half (54%) of the fund is invested in metals/mining stocks and Mongolian projects account for more than 40% of the fund. The biggest is Gobi Coal & Energy but it also holds stakes in Moly World, a molybdenum/tungsten project, and Kincora Copper, Kincora's Bronze Fox copper/gold deposit, sits alongside Rio's larger Oyu Tolgoi operation.

Gobi Coal (almost 30% of the fund) is also held by Baker Steel. Recently it wrote down its carrying value on the back of poor prices for Mongolian coal at the Chinese border. Gobi was supposed to float in 2012 but the Mongolian government started to make noises about rewriting the law that underpins the state's relationship with big, mostly foreign-owned, resource projects, and this unnerved investors.

As drafted, the law says Mongolian citizens must hold at least 34%/51% in each project (depending on the type of project), the state has pre-emptive rights in the event that a project changes hands and it can take a stake in the licence holder of a deposit for no consideration.

Unsurprisingly, investors are protesting. If the law is watered down, Origo's shares should jump; if not, the focus switches to its remaining investments.

These include Celadon Mining, a Chinese coal miner, two holdings in the agricultural sector (25% of the fund) China Rice (rice processing and distribution) and RM Wiliams (an Australian farming company exporting to China) and a spread of 'clean tech' investments (17%) including stakes in China Cleantech Partners (a fund launched in conjunction with Ecofin), Unipower Battery (lithium ion batteries) and Niutech Energy (tyre and plastic recycling).

We will know what the real discount is when Origo releases its end-December NAV estimate around the end of this month, when it makes its next interim statement. Short-term success largely depends on factors outside its control but, with a fair wind, Origo could be a winner in 2013.

James Carthew is a director of Sapient Research

Link to article

 

Mongolian President Says No Tolerance on Corruption

Jan. 25 (Bloomberg) -- Mongolian President Tsakhia Elbegdorj talks about the economy and fighting corruption. He spoke with Bloomberg Television's Caroline Connan on the sidelines of the World Economic Forum's annual meeting in Davos, Switzerland. 

Link to interview

 

Accountability is the Gobi's Scarcest Resource

January 25 (The Mongolist) The Gobi has a government accountability shortage that is reaching breathtaking levels. In the news this week is the revelation that Erdenes Tavan Tolgoi (ETT), the government owned mining company overseeing the development of the Tavan Tolgoi coal deposit, is running low on cash. The cause of the cash flow problem appears to be the fact that the company is selling coal to its main Chinese consumer Chalco for USD 53 per tonne, but it costs USD 61 per tonne for ETT to transport the coal to the border.^{1, 2} Yes, you read that right. The company is selling coal at a loss of USD 8 per tonne, or at least it was until mathematical reality wiped out the company's cash on hand. What is breathtaking about this story is that it has all the hallmarks of a massive political scandal, and yet it has so far received scant coverage in Mongolia and almost dispassionate reporting in the international press as if such a mistake is routine and a loan of a few hundred million dollars and renegotiation or buy out of the Chalco deal should fix the problem. And, the current CEO of ETT is saying just that. A loan of approximately USD 355 million should about cover the Chalco problem and also address lingering issues of infrastructure and equipment on site.³

This kind of story is sadly all too common in the Gobi, and the region is fast becoming the poster child for the expression "throwing good money after bad." Where's the accountability? I should be up front that I have a bit of ax to grind in this blog post. My wife and I have been connected to the region in one way or another over the last decade, and we've seen first hand the rapid changes that have occurred during that time. There are plenty of positives. There are employment opportunities, the provincial capital feels like a boomtown, personal car ownership is becoming the norm, people are healthier and happier, and there are many other changes that have provided friends and neighbors economic mobility and freedom. These positives, however, have been marred by an on-going and severe accountability shortage. Millions of dollars are spent each year to "fix" problems only to have the same or similar problem pop up again very soon after the fix. It is extremely frustrating to watch this game play out over and over again.

As an example I take the on-going problem with electricity in the province. I think a few lines from a letter to the daily newspaper Unuudur from a resident of the provincial capital Dalanzadgad sums up the frustration best:

Member of Parliament Ts. Bayarsaikhan and Provincial Governor Tsedencamba said during the opening ceremony of the new Dalanzadgad power plant in 2000 that the province would finally have cheap, reliable energy. Three days after the ceremony the plant broke down. Thirteen years later the power plant is still crawling along and we've arrived at the developmental level of the 1950s and 1960s.⁴

Indeed, it's hard to imagine it was worse in the 1950s and 1960s than today in the Gobi. The power is off more than it is on in spite of tens of millions of dollars being spent on repairs for the plant since 2000. Almost daily we receive assurances from someone in a position of authority that everything will be fixed by some date soon. Just before the local elections in November the provincial governor came to our town to assure us that from December onward the power problems would be fixed. Now two months later it is reported that the power plant can only operate at 50-60 percent its normal operating capacity and the province is dependent on surplus electricity when available from a power plant built to serve Tavan Tolgoi.⁵ The only hours of the day that the power plant can reliably provide electricity are 2am to 7am when, of course, most of the province is asleep.⁶ But, that's not all, it is also reported that all the problems could be fixed in "2-3 hours" if only the government provided the plant with USD 60 million or MNT 84 billion.⁷ Just like ETT, the problem is money--not a lack of accountability--according to those in charge.

These problems are not new, and in the past provincial incompetence and shenanigans could easily go unnoticed by the wider world because the region was literally in the middle of nowhere. But, now the entire country is economically dependent on this region getting things right. Mistakes here affect everyone in the country, and yet oddly most of the news coverage about the area seems to center on Oyu Tolgoi, the only major development initiative in the region that is arguably showing sustainable results. As I have written in the past, Oyu Tolgoi shouldn't get a free pass on accountability (see The 7.5 Billion Tonne Gorilla), but sometimes it appears from on the ground that a lot of outside public scrutiny is misdirected and wasted on Oyu Tolgoi to the detriment of other serious problems. ETT running out of cash by selling coal at an avoidable loss and one of the richest provinces in the country struggling to provide electricity to its citizens are just symptoms of wider problems. Something is definitely in short supply here, but it's more than just cash, electricity, or even water. Where's the accountability?

Footnotes
1. "Chalco Urges Erdenes TT to Honor Terms of Coal-Supply Accord", Bloomberg News, http://www.bloomberg.com/news/2013-01-22/chalco-urges-erdenes-tt-to-honor-terms-of-coal-supply-accord.html, January 22, 2013.
2. "Erdenes TT is in negotiations with CHALCO", News.mn, http://english.news.mn/content/131511.shtml, January 21, 2013.
3. Michael Kohn, "Mongolia Loan May Help Tavan Tolgoi Exit Chalco Deal, CEO Says", Bloomberg News, http://www.businessweek.com/news/2013-01-24/mongolia-loan-may-help-tavan-tolgoi-exit-chalco-deal-ceo-says, January 24, 2013. 
4. Ш. Нямдаваа, "Өмнөговь аймаг цахилгааны тэг зогсолт хийгээд байна", Өнөөдөр, January 17, 2013, A7.
5. Б. Цэгцэгсүрэн, "Ухаахудагийн станцаас эрчим хүч нийлүүлэхээр болсон", Өнөөдөр, January 17, 2013, A7.
6. Б. Номин, "Өмнөговийнхон цахилгаангүй олон хонож байна", Зууны Мэдээ, January 17, 2013, 1.
7. Ibid.

Link to article

 

Bombardier Commercial Aircraft Caps Off Successful Year for its Q400 and Q400 NextGen Aircraft Program

- Recorded orders and options for up to 81 Q400 NextGen aircraft

- Q400 NextGen aircraft with new dual-class configuration entered service

- Approval awarded for Q400 and Q400 NextGen aircraft to operate in new countries

TORONTO, ONTARIO--(Marketwire - Jan. 25, 2013) - Bombardier Aerospace announced today that its Q400 and Q400 NextGen aircraft program wrapped up a successful year in 2012 with up to $2.7 billion US in orders including 50 firm orders and 31 option aircraft, while welcoming seven new customers, operators and leasing companies.

"In 2012, the Q400 NextGen aircraft order book grew significantly with orders from first-time customers - WestJet and Eurolot − as well as from repeat customers looking to enhance their fleets with the only turboprop that accommodates more passengers and route possibilities," said Mike Arcamone, President, Bombardier Commercial Aircraft. "The Q400 aircraft spread further into secondary markets and, together with theQ400 NextGen aircraft, brought new customers, operators and leasing companies from almost every continent into the Bombardier turboprop family. This demonstrates the flexibility and performance capability of the aircraft.

"For airlines seeking high productivity and profitability on a diversity of routes, Q400 and Q400 NextGen aircraft are unbeatable. With up to 10 more seats, up to 35 per cent more cargo volume and with their jet-like speed, the aircraft can fly up to 18 per cent more flights per day than a competing turboprop. That's approximately 30 per cent more revenue potential," added Mr. Arcamone.

Russia and CIS Type Approval and Mongolia Type Acceptance Certification

In June 2012, the Q400 and Q400 NextGen aircraft became the largest Western-built turboprop aircraft to be awarded type approval for operation in Russia and the CIS. Mongolia in central Asia granted the aircraft type acceptance certification in the region in May 2012. A few weeks later, EZnis Airways began operating its first Q400 aircraft showcasing the aircraft's performance on gravel runways and in cold weather, as well as its ample cargo and baggage compartments for supporting mining charters and equipment.

…

Link to release

 

JAPANESE MAN JAILED FOR CHEATING EX-SUMO CHAMP ASASHORYU

TOKYO (AFP) - A 78-year-old Japanese businessman was sentenced to five-and-a-half years in prison Friday for swindling former Mongolian sumo grand champion Asashoryu out of 1.1 million dollars.

Takeo Kikuchi conspired with an associate in 2009 to cheat the then-champion, whose real name is Dolgorsuren Dagvadorj, by saying they needed the money to help develop projects in Mongolia, the Tokyo District Court said.

Kikuchi and Takaharu Kumada, 65, told the wrestler they had gold ingots abroad and wanted to melt and cash them in before investing in Mongolia, presiding judge Yukihiko Imasaki said. Kumada has been tried separately on the same charges and is awaiting sentencing.

Dagvadorj handed them about 100 million yen after they asked him to help pay an overdue storage fee for the gold.

"What the defendants told him (Dagvadorj) were all false," the judge said.

"We cannot help but sympathise with him as the defendants took advantage of his feelings for his country although he was so naive as to respond to such a suspicious proposition," he said.

Dagvadorj retired from competition in 2010 after winning 25 tournaments as the third most successful wrestler in sumo history while raising some eyebrows for making comments and behaviour which were seen too abrasive for a sumo champion.

Now 32, he is a leading entrepreneur and personality in his home country.

Link to article

 

New study shows 10% of death in UB caused by air pollution

January 23 (InfoMongolia) American Center for Mongolian Studies (ACMS) presented their latest lecture "Air Pollution in Ulaanbaatar: Public Health Impacts and Research Opportunities" given by Dr. Ryan Allen, Ph.D of Simon Fraser University, Canada on Tuesday, 22 January.

Part of his research team such as the professor in the Faculty of Health Sciences at Simon Fraser University Dr. Bruce Lanphear, directors of international NGOs, nurses, doctors, journalists, university students and others from the community were amongst those that attended.

Dr. Allen who was last in Mongolia in 2010, recently did an assessment of UB air pollution using the land use regression technique over a two week period and discovered "that 10% of the deaths in Ulaanbaatar can be attributed to outdoor air pollution". He is leading the team Ulaanbaatar Gestation and Air Pollution Research (UGAAR) comprised of Mongolian and international professionals to investigate what the effects are on babies when pregnant women breathe air pollution, in collaboration between the Health Sciences University of Mongolia, Sukhbaatar Health District and Simon Fraser University of Canada, funded by the Canadian Institutes of Health Research.

The way air pollution is being measured is by particular matter (PM) which is proven to be one of the strongest types that affect public health, one of the main issues discussed. Diesel buses (emitting nitrogen oxide) and ger stoves burning coal (emitting sulphur oxide) are some of the examples that measure PM 2.5 are common factors found in UB air pollution.

According to World Health Organization (WHO), 89 percent of the world's population lives in high air pollution levels and most of this percentage lies in Asia. Ulaanbaatar is the second most polluted city in the world today. "There is no safe level of air pollution", says Dr. Allen who further suggests more near term interventions could be used to improve and manage air pollution which forms the basis of his work. The team will carry out their research in the Sukhbaatar District of the city and some of the surrounding khoroos. He finds Ulaanbaatar to be full of opportunity to conduct efficient research due to its smaller population and finishes the lecture in saying "If you improve the air pollution levels you will improve public health".

Simon Fraser University was established in Vancouver in 1965 and is named after a famous explorer. It is ranked as one of the top three most comprehensive universities of Canada over the past 20 years.

ACMS Speaker Series is a series of on-going lectures that are presented by Mongolian and visiting international academics to the public and generally held between 5:30 – 6:30 pm every Tuesday at the American Corner, Natsagdorj Library in Ulaanbaatar.

Link to article

 

Book

Marketing implications of the destination image of Mongolia

Document Information:
Title:	Marketing implications of the destination image of Mongolia
Author(s):	David Mwaura, (London School of Commerce, London, UK), David Acquaye, (London School of Commerce, London, UK), Sarnai Jargal, (London School of Commerce, London, UK)
Citation:	David Mwaura, David Acquaye, Sarnai Jargal, (2013) "Marketing implications of the destination image of Mongolia", Worldwide Hospitality and Tourism Themes, Vol. 5 Iss: 1, pp.80 - 91
Keywords:	Consumer behaviour, Destination marketing, Image, Marketers, Mongolia,Perception, Tourism development
Article Type:	Research paper
DOI:	10.1108/17554211311292466 (Permanent URL)
Publisher:	Emerald Group Publishing Limited
Abstract:	Purpose – The purpose of this paper is to explore the destination image of Mongolia held by actual and potential tourists, including how such images are formed and its implications in destination marketing. Design/methodology/approach – A quantitative research was undertaken in order to understand the image of Mongolia held by actual and potential tourists and how such images were formed. An online questionnaire survey, that utilized structured questions, was carried out in leading travel blogs. Findings – Destination image plays an important role in determining whether a destination will be visited or not. Actual visitors' experience and perception of Mongolia was found to be highly positive and showed that generally the projected image represents an accurate picture of Mongolia. However, many potential visitors perceived Mongolia to be a long haul destination, that is remote and isolated. Practical implications – Successful destination marketing campaigns will require tourism marketers to understand how those images are formed. This information will enable them to project a positive image to the right target markets. Understanding the information sources is beneficial to long haul destinations such as Mongolia, which can use such channels to promote their destination. Originality/value – Most destination image studies have concentrated on mainstream tourism destination and less popular long haul destinations such as Mongolia have received little, if no, attention. This paper will appeal to destination marketers of other long haul destinations who are seeking to position their destination in the right target markets.

Link to page

 

Misc

It's goodbye Lenin, hello dinosaur as fossils head to Mongolia museum

Ulan Bator to transform its Lenin museum into a centre housing prehistoric fossils, including a Tyrannosaurus bataar specimen

January 27 (The Guardian) Once he bestrode his world, lending his name to more museums, streets, monuments and public institutions than any other 20th-century figure. But in the Mongolian capital, Ulan Bator, at least, it is goodbye Lenin, as a political dinosaur makes way for the real kind.

Mongolia is to transform a museum once dedicated to the Soviet dictator into a centre for its wealth of fossils, including a 70m-year-old Tyrannosaurus bataar specimen.

The grand building in Ulan Bator, which still boasts a giant bust of Vladimir Ilyich, has been used as offices for several years. The government has now earmarked the complex for a new dinosaur museum.

"Mongolia has been sending dinosaur exhibits abroad for 20 years, while not having a museum at home," said Oyungerel Tsedevdamba, the minister for culture, sports and tourism. "We have a wonderful dinosaur heritage but people are not aware of it."

She said that fossils lent to overseas institutions, and specimens smuggled abroad illegally, would fill several facilities if they were all brought home.

The centre will also be home to a new register for Mongolia's dinosaur finds, allowing proper tracking of discoveries.

The minister said she hoped that education via the Ulan Bator museum and other new exhibits around the country would help turn people into protectors of Mongolia's heritage, and deter smuggling. The government also hopes to encourage tourism.

The Lenin Museum opened in 1980, when the country was a Soviet satellite. "It was a very grand museum with Lenin's statue, everything embellished with red flags and with pictures of Lenin's childhood and history," said the  minister.

She learned more about Lenin when glasnost began as she was studying in the Soviet Union, and, like many of her compatriots, "started thinking Lenin was not such a great figure and had caused so much misery to his own and other people".

Since the transition to a multiparty democracy in 1990, the Mongolian People's party has been based in the building, which has also housed a bar and restaurant; at one stage Lenin's bust gazed down over pool tables.

In the building's new incarnation the centrepiece is likely to be the seven-metre long Tyrannosaurus bataar – also known as Tarbosaurus bataar, because experts dispute its taxonomy – which prompted a dispute when it was put on sale by a New York auction house last May. In December, prosecutors in the US said Erik Prokopi, a fossils dealer from Florida, had agreed to surrender the nearly complete Tyrannosaurus bataar and other fossils – paving the way for their return to Mongolia – after pleading guilty to smuggling dinosaur specimens into the US. They described Prokopi as  "a one-man black market in prehistoric fossils".

Bolortsetseg Minjin, the New York-based founder of the Institute for the Study of Mongolian Dinosaurs, said the case had proved a turning point, raising awareness among the Mongolian public and officials. "Mongolia is known to have many different species and the preservation is unique: you find complete skeletons in the Gobi desert, which is very rare."

International palaeontologists and the public have been interested in the country's treasures, but many in Mongolia had been unaware of them, she added. She described running an outreach programme for children who lived next to fossil sites in the Gobi but who thought dinosaurs were mythical creatures.

"They should know what they have in their backyard … [but] there were no books they could read in their language and no toys or TV programmes to learn about their inheritance."

The paleontologist has been at the forefront of efforts to promote public interest in dinosaurs and protect specimens such as the Tyrannosaur bataar.

She added: "If they decided to use it as a permanent museum, I would think Lenin's head would need to be removed because in terms of content it doesn't really go. I suppose some people might be against that."

But, she added: "Both are part of our history. Dinosaurs go back millions of years; Lenin was [decades] of history under the Soviets. I don't think there will be strong objections from the public, because they are excited about what's going on with the dinosaurs."

The government has called a new dinosaur centre as an urgent priority because the natural history museum is in a state of disrepair, and other specimens are due to return home soon.

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Mongolia: Eagle Hunting Sustains Kazakhs' Living Legacy

January 25 (EurasiNet) "It's good, yes? It's veeeery good!" Orisbai Shatirbai laughs giddily, as Hiran, his five-year-old golden eagle, perches over the large fox it has just caught on the Mongolian steppe.

Seventy-three-year-old Shatirbai was six or seven when his father first taught him to hunt with an eagle. By 15 he was doing it alone. He's passed the knowledge on to his own sons, emphasizing that this tradition is an important cultural legacy that they – as ethnic Kazakhs – are responsible for maintaining.

Eagle hunting is a seasonal pastime, only practical in the autumn and winter after the birds have molted.

Shatirbai's family of sheepherders moves between three steppe camps in spring, summer, and early autumn. Ahead of the brutal winters, each October the family retreats from their felt yurts to a couple of houses nestled in a hillside a few miles outside of the small, western Mongolian town of Tolbo. There, Shatirbai and his wife Khama live with their youngest son and his large family. Most days, Hiran can be found hooded and on her perch outside the house. Once every two days she is fed chopped, raw meat—usually fox, rabbit or cow.

The day before the hunt, Hiran is brought inside the house; she must get ample exercise to make her hungry enough to hunt for a fox (females are used exclusively as they are more aggressive). Shatirbai prepares Hiran by tethering her to a thick mitt that he then rocks up and down rapidly for several minutes at a time, as she tries to hold on like a cowboy on a bucking bronco.

One need spend only a few minutes with Shatirbai and Hiran to see their strong relationship. If it weren't obvious, family photomontages around the house all seem to include a snapshot of Shatirbai with one of the golden eagles he's trained over the years.

Though foxes are the most common prey, two well-trained, strong eagles can together hunt animals as large as a wolf. (Kazakhs and Kyrgyz also sometimes hunt smaller prey with falcons.)

On a recent morning, after reaching the top of a rocky bluff, Shatirbai removes Hiran's hood and she quickly alights toward something no one else can see. After swiftly coasting down on a scuttling fox, the bird lashes its talons and elegantly sinks them into its prey.

Shatirbai could not be happier. Sitting with his bird, his son, and the dead fox, he poses proudly for a photograph. Kazakhs both in Mongolia and across the border in Kazakhstan have strived to preserve their rich nomadic cultural traditions in modern times. At least for today, in a desolate swath of the great Central Asian steppe, that heritage is alive and well.

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Wanders never cease: The nomadic life of Mongolia's Kazakh eagle-hunters

Amid the harsh splendour of Mongolia's arid plains, nomadic eagle hunters still follow a traditional way of life that has defied history, geography and political change. The photographer Christo Geoghegan offers an insight into their lives...

January 27 (The Independent) The Kazakh nomad's hand rocks forwards in a gentle stroking motion and the eagle needs no keener reminder of the business of the day, springing from her master's wrist like a fluid extension of his will, gaining the thin, freezing-cold upper air with a few strokes of her vast wings. From there she sees the province of Bayan-Olgii spread out below, the bare, dun-brown, ice-streaked mountains culminating in Mongolia's highest, Khuiten Uul, climbing 13,000ft into the sky.

On the arid plains at the foot of the mountains, those dirty grey specks are hundreds of head of scrawny sheep and goats, tearing at the sparse vegetation – but it's not on them that the eagle's eyes are fixed but rather that fox down there, invisible to human eye, even if one could get up to that height and look where the eagle is looking, creeping from the shade of a rock.

In less time than it takes to tell, she is on to it, screaming in like a racing yacht with a fierce wind behind it, slicing diagonally across the sky, then with a sudden, stunning turn of speed just a few feet above the ground she has the scruff of the fox's fur in her talons, its feet leave the ground then crash back on it as all 15lb of the eagle's weight descends like doom on its neck.

Within minutes the fox is no more than another fine trophy hat for the berkutchi (Kazakh for eagle hunter) in the making.

Kazakhstan and Mongolia share no common border, but at the closest point, where China to the south meets Russia to the north, they are less than 40km apart. And the two countries share much else: the world's first- and second-biggest landlocked countries respectively, both are heirs to the legacy of Genghis Khan and his many and varied successors and imitators; both have tiny populations considering their vast size; both amaze the eye with their endless perspectives; both gladly discarded their Soviet overlords and sent the Red Army packing when the Bolshevik experiment bit the dust.

Long before the bug for drawing hard and fast borders reached these latitudes, this region was home, it is believed, to the first domesticated horses in the world and the first hunting eagles: falconry, we are told, was invented here, the use of these beautiful and powerful raptors to hunt where no other means would have a chance.

And through all the barbaric vicissitudes of the 20th century, the habit of nomadism, of moving from the uplands to the plains with the flocks, and back again as the seasons turn, persisted, as did the love and knowledge of falconry of which it was an intrinsic element: a source of pride and a badge of identity, as much as the extravagant fur coats and hats in which it resulted.

Yet the Kazakh nomads of the far west of Mongolia, though they were accepted – Islamic religion, Turkic language and all – as part of the traditional Mongolian mix, had a hankering for the company of their co-nationals. So when Nursultan Nazarbayev, the ruler of Kazakhstan since before the collapse of the Soviet empire, invited them to return "home" en masse, many heeded the call: the population of their Mongolian province, Bayan-Olgii, crashed from 102,000 in 1991 to 75,000 in 1993 as they streamed west along the jagged Russian-Chinese border to rejoin their country.

Twenty years on, many say the experiment has failed. Although Nazarbayev's appeal, post-Communism, was to Kazakh nationalism, the native traditions which the nomads represented, whatever their sentimental value, have no place in the country he has engineered – a place which today, thanks to its huge oil reserves and the ambition of Nazarbayev himself, has more in common with the hyper-modern monarchies of the Gulf than with Mongolia. Lured by the call of home, the Kazakhs from Mongolia found themselves trapped on their country's margins. Less than ever was there a call for the traditions by which they defined themselves.

It has dawned on many of the Kazakh nomads that the siren song of nationalism means less in the long run than the company of Mongolians who, however different in language, ethnicity and religion (most Mongolians are devout Buddhists in the Tibetan style), still find a place in their lives for yurts (the Mongolians call them gers), for flocks of animals, for fiery little horses ridden bareback and all the other customs and consolations of life on the plains.

So the exodus has been inverted: though many of the Kazakhs confronted previously unimagined obstacles of passports, visas and guarded frontiers, many have returned to Mongolia: the slump in the population of Bayan-Olgii reversed, and at the last estimate, in 2009, had increased to more than 93,000.

And if, even in Mongolia, the old ways seem increasingly anachronistic, the fascination of hunting with eagles, and the winter festivals in which the sport is celebrated, attract a growing following among visitors from Europe and the US. Challenged on all sides by modernity, there is life in the berkutchi and their fabulous birds yet.

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"Mogi" Munkhdul Badral

Cover Mongolia

Email: mogi@covermongolia.mn

Mobile: +976 9999 6779

Skype: mogibb