08.06.2012, NEWSWIRE, Issue 225
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Transcript of 08.06.2012, NEWSWIRE, Issue 225
BUSINESS COUNCIL of MONGOLIA NewsWire
www.bcmongolia.org [email protected]
Issue 225 – June 8, 2012
NEWS HIGHLIGHTS:
Business:
Erdenes-TT valued at USD 10.6 billion;
Energy Resources signs concession agreement for rail construction;
Mongolia Airlines expands international routes;
Eznis Airways acquires new Boeing 737-700;
FRC suspends Tengri Securities trading;
CLSA expects trading to surge on MSE;
Aspire Mining delivers positive pre-feasibility for Ovoot;
Mongolia Energy CEO retires;
MoveOne delivers to OT from Texas;
Trimble invests in new lab at MUST;
Mongolia: democratization and Rio Tinto.
Economy:
EU and EBRD target diversification;
EU provides EUR 7 million for technical and vocational training;
E-filing could save taxpayers MNT 12 billion;
German center to lead wastewater plant project;
Hazy days: Berkeley tackles pollution;
Herders caught between cashmere and climate change;
For falcons’ sake;
Government’s salary raises bring 36 percent tuition hike at MUST;
Universities set tougher requirements for entrance;
Airline service to soar;
Investors wary ahead of polls;
New Zealand delivers new safety features to quadbikes for miners;
Mining shares plunge despite record profits;
Chinese manufacturing index falls;
China coal: piling high as growth slows;
Heavy tax could sink Indonesia’s coal industry, says industry analyst.
Politics:
General Election Committee bars Enkhbayar's candidacy;
Enkhbayar trial postponed;
Enkhbayar lashes out from hospital;
Ban on new licenses to continue over next 5 years, says Minerals minister;
Meeting with S. Korean finance officials brings talk of liberalized air travel;
Election regulations has UB mayor take temporary leave;
Balancing investor and public interests;
Setting the tone for investment;
Elbegdorj awarded U.N. environmental prize;
Azerbaijan, Russia, Mongolia to cooperate on rail management;
S. Korea, Mongolia agree to streamline visa process;
Mongolia, Japan launch EPA talks;
Migrant workers face discrimination in Korea;
New IDs to be sent beginning 25 June;
Finance ministry lays out development agenda for next 10 years;
Government reviews enforcement of law on mining near rivers and trees;
Dinosaur hearing postponed.
ECONOMIC INDICATORS:
MSE Top 20 Index by Market Capitalization;
Foreign-listed Companies with Mongolian Assets;
Inflation;
Central Bank policy rate;
Currency rates.
*Click on titles above to link to articles.
SPONSORS
Khan Bank Eznis Airways
Kempinski Hotel Khan Palace Mongolian National Broadcasting
Breakthrough PR Oxford Business Group
BUSINESS
ERDENES-TT VALUED AT USD 10.6 BILLION
Erdenes Tavan Tolgoi may be worth as much as USD 10.6 billion, according to Frontier Securities.
The value of each Erdenes-TT share is MNT 933, Frontier Securities said in an emailed report, citing
a 30 May statement on the government's website. Frontier calculated the value of the company
based on Erdenes-TT having 15 billion shares. Erdenes-TT Chief Operating Officer Graeme Hancock
confirmed a value had been set without giving further details.
The company last month delayed its planned initial public offering (IPO) until February or March,
citing a decline in global market conditions. It had planned to raise USD 3 billion from the share sale
in Hong Kong, London, and Ulaanbaatar before the delay.
―The valuation is reasonable and is in line with that of Mongolian Mining Corp.‖ Helen Lau, an
analyst at UOB-Kay Hian Ltd. in Hong Kong. ―But market sentiment is poor right now and investors
may not have the appetite.‖
Mongolian Mining Corp., the nation's biggest coking coal exporters, is worth HKD 19.8 billion (USD
2.5 billion) based on a recent share price. It has 3.7 million shares outstanding. Mining companies
have lost 32 percent of their market value in the past year. Companies including Sany Heavy
Industry Col and China Nonferrous Mining Corp. canceled or reduced share sales planned last month
in Hong Kong.
Companies have raised USD 3.1 billion selling new shares in Hong Kong so far in 2012, down 65
percent on a year earlier. The IPO is set to be Mongolia's first listing of a state-run miner overseas.
Source: Bloomberg
ENERGY RESOURCES SIGNS CONCESSION AGREEMENT FOR RAIL CONSTRUCTION
The government has finalized its agreement with Energy Resources LLC for the construction of a
railway between Ukhaa Khudag coking coal mine and the Gashuun-Sukhait border check point.
The government has signed a concession agreement with Energy Resources, the Mongolian
subsidiary of Mongolian Mining Corp. (MMC), and its subsidiary Energy Resources Rail LLC (ERR) to
build and operate the railway base infrastructure. The major terms under the concession agreement
relate ERR has been granted a right to construct the 1,520-meter railway over a period of up to 19
years from the date of commissioning.
Upon expiration of the concession term, Energy Resources would transfer 51 percent of its
shareholding in ERR to the government. Upon transfer, Energy Resources has the option to trade
remaining shares in ERR for 10 percent of shares in a state-owned company that would own an
integrated railway base structure network between Sainshand, Tavan Tolgoi, Ukhaa Khudag, and
Gashuun Sukhait.
Source: Mongolian Mining Corp.
MONGOLIA AIRLINES EXPANDS INTERNATIONAL ROUTES
Mongolian Airlines Group is planning to add Hong Kong as one of its regular destinations.
The airline will expand its routes to include regular flights from Ulaanbaatar to Haneda Airport in
Hong Kong, in addition to flights to Shanghai, Cheju, and Chongju in China.
The entrance of Mongolian Airlines and others has created greater competition in Mongolia‘s airline
market and could allow cheaper prices for air fare.
Source: Udriin Sonin
EZNIS AIRWAYS ACQUIRES NEW BOEING 737-700
Eznis Airways will lease a new Boeing 737-700 from the International Lease Finance Corp. (ILFC) in
the United States. The plane will be used to extend the airline‘s international‘s routes.
In the first quarter of 2012, international transportation traffic increased by 30 percent compared
to a year ago. The ILFC takes first place in the world with prices, and second place with its fleet.
The new Boeing aircraft is due to touch down in Ulaanbaatar for the first time in the first half of
this month.
Boeing 737 is a middle-distance jet able to make non-stop flights from Ulaanbaatar to Beijing,
Seoul, Tokyo, and Hong Kong.
Source: Montsame
FRC SUSPENDS TENGRI SECURITIES TRADING
The Financial Regulatory Committee (FRC) has suspended the trading activity of Tengri Securities
LLC on the Mongolian Stock Exchange. The suspension took effect on 26 May due to license
expiration.
Source: MSE
CLSA EXPECTS TRADING TO SURGE ON MSE
In anticipation of increasing cross-border investment into Mongolia-listed securities, CLSA has
agreed to become an introducing broker for BDSec JSC, the nation‘s biggest brokerage firm.
―Given the natural resources and direct foreign investment going into Mongolia, most notably from
Korea, China and Australia, there is obviously ongoing speculation that the government will sell
stakes in publicly held vehicles, particularly those of the coal operators,‖ said Andrew Maynard,
global head of trading and execution at CLSA in Hong Kong.
The partnership with BDSec, which covers 47 percent of foreign account holders and 17 percent of
domestic account holders, is ―advantageous for us to be able to talk about this country with a bit
more conviction, a country that will rise in importance in years to come,‖ added Maynard.
At the same time, it is also true that Mongolia has fallen down Transparency International‘s annual
rankings of in-country corruption, standing now at 120 from over 180 nations. With a total of 150
stocks and trading over two boards—A and B—the Mongolia exchange‘s total market capitalization
stands at 1.45 billion. Board A, on which 36 stocks are listed, accounts for 90 percent of market
value. But secondary market trading volume remains small, at USD 250,000 a day, said M. Ganbold,
who works on institutional sales for BDSec.
Read more…
BDSec already has a U.S. representative after it clinched a partnership agreement with New York-
based agency brokerage Auerback Grayson & Co. in 2007. Of the new collaboration with CLSA,
Ganbold points to the brokerage‘s strong brand in Asia. Although trading volume is still thin, there
are expectations that its two-hour trading window could be extended as more foreign investors
participate.
While Maynard has not yet seen many institutional orders on the local bourse, he sees potential for
growing interests as clients increasingly look to hold frontier-market exposure with Mongolia,
Cambodia, Vietnam, and Sri Lanka standing out as favorites.
Source: Asian Investor
ASPIRE MINING DELIVERS POSITIVE PRE-FEASIBILITY FOR OVOOT
Aspire Mining Ltd announced a pre-feasibility study for the Ovoot coking coal project that has
defied naysayers with positive parameters, delivering an internal rate of return of 43 percent.
Xstract Mining Consultants Pty. Ltd. confirmed that Ovoot is financially robust and commercially
feasible.
The first stage of project development would involve production of six million tons of coal a year
delivered by 191 kilometers via road to a new railhead at Moron before being transported to end
markets from 2016. The study was based on probable coal reserves of 178 million tons, which ranks
Ovoot as the third-largest coking coal deposit in Mongolia, by reserves. Aspire has only explored 20
percent of the Ovoot Basin. The study assumes completion of the multi-user rail line extending the
trans-Mongolian railway at Erdenet through to Moron Soum by 2016. A separate rail pre-feasibility
study for this line has been approved by the Mongolian Rail Authority.
Source: MENAFN
MONGOLIA ENERGY CEO RETIRES
Mongolia Energy Corp.‘s Chief Executive Officer, James Schaeffer, has retired. He will continue to
provide strategic and technical advice to Mongolia Energy as an advisor.
Schaeffer confirmed that he has no disagreement with the board. Schaeffer joined Mongolia Energy
in 2007 to oversee the technical and business development of the newly acquired Khushuut coal
mine during its inception stage. The Khushuut project has since gone into commercial production.
The company has set up a professional team in Hong Kong and Mongolia led by Yvette Ong to cover
the mining and exploration operations. Ong, executive director since 1999, will be appointed as
managing director of Mongolia Energy. Ong is responsible for providing leadership for the
management, implementing strategies and overseeing the operations of the company.
Source: Mongolia Energy Corporation
MOVEONE DELIVERS TO OT FROM TEXAS
MoveOne recently transported mining equipment cargo from the United States to the Oyu Tolgoi
copper mine, a joint venture between British Columbia's Ivanhoe Mines Ltd., Melbourne-based Rio
Tinto PLC, and the government of Mongolia.
Cargo was picked up from a supplier in Dallas, Texas and loaded in Houston on a breakbulk ship. A
pair of 14.5-meter cylinders that was too long to fit in the vessel's hold was secured on the deck. In
addition to the sea cargo, MoveOne was also responsible for lithium batteries transported by air.
After arriving in Beijing, goods were consolidated and transported via rail to Oyu Tolgoi.
In China, special steel frames were made to support the cylinder loads and prevent shifting during
the rail transport.
Source: Breakbulk.com
TRIMBLE INVESTS IN NEW LAB AT MUST
Trimble Navigation Ltd., a U.S. firm for geodesic solutions, has provided for a new laboratory for
the Mongolian University of Science and Technology (MUST).
The project is part of a larger project to provide new technology for activity within earth studies
and cartography worked done in the Mongolia. Trimble will provide USD 220,000 of investment for
the laboratory.
The university has graduated 800 specialists in these studies since 1980.
Source: Undesnii Shuudan
MONGOLIA: DEMOCRATIZATION AND RIO TINTO
Having had to face giants such as the Soviet Union and China in the last few hundred years,
Mongolia is now embarking on a new journey with one of the world's mining giants, Rio Tinto PLC.
It is said that even during Chinggis Khan's time, the outcropping rocks in Oyu Tolgoi were smelted
for copper. The mine was originally explored by Canadian company Ivanhoe Mines Ltd. and is now
being developed by Rio Tinto.
When the Soviet Union left in 1991 after occupying the country for 70 years, all critical mining
exploration data on the country was taken back to Moscow. The Russians refused to share any of
this mineral mapping data with the Mongolians. One senior Mongolian official jokingly said: "You
know how these mining investors started investing here? One of our bureaucrats who knew the
mineral mapping data by heart said to the investor, just dig here and trust me, I know the stomach
of Mongolia by heart and there is good stuff in the ground."
The multinational mining corporation Rio Tinto operates in more than 50 countries and can be
likened to a state of its own. It is a commercial company, but in many ways it operates like a state
with a well-thought out public affairs policy for different countries. If anything, it is perhaps run
much better than many states in the world. It has no option because it has to deliver profit to its
shareholders.
The good news is that Rio Tinto has had a long journey in democratization, which began with its
Bougainville mine in Papua New Guinea in the late 1980s. It is still facing legal challenges seeking to
hold Rio Tinto responsible for human rights violations and the thousands of deaths linked to the
Bougainville copper and gold mine it once ran. Rio Tinto today has a global code of business
conduct, where human rights and doing business democratically are its center piece. The company
has learned its lesson.
As Mongolia tries to translate its economic growth into prosperity, democratization in Rio Tinto has
helped sustain profits. There may be many weaknesses in Rio Tinto, but it is in Mongolia's interest
to ensure that like Rio Tinto, Mongolia can also produce profit while adhering to human rights,
business integrity and accountability—all of which are pillars of democracy.
Source: Jakarta Post
ECONOMY
EU AND EBRD TARGET DIVERSIFICATION
The European Union and European Bank for Reconstruction and Development (EBRD) are combining
their efforts to help Mongolia diversity its economy with a new EUR 3.8 million (USD 4.7 million)
program dedicated to small-and medium-sized enterprises (SMEs), launched in Ulaanbaatar.
―This is the right project at the right time with the right focus,‖ said Philip ter Woort, head of the
EBRD‘s resident office in Mongolia. He added, ―It is important that the growth of Mongolia‘s mining
sector is complemented by strong efforts to diversify the economy and we expect the SME sector to
play a leading role here.
According to the EBRD, the five-year project includes a series of integrated activities aimed at
strengthening the capacity of Mongolia‘s SME agency and promoting reforms that would facilitate
the access of SMEs to financing. The new initiative will also focus on developing business support
and consultancy services in Mongolia. In addition, the project will work with individual companies,
helping them to improve their operational efficiency with support from Mongolian management
consulting firms.
Source: Fin Channel
EU PROVIDES EUR 7 MILLION FOR TECHNICAL AND VOCATIONAL TRAINING
The head of the Development Financing and Cooperation Department at the Ministry of Finance,
signed a financing agreement with the European Union for a EUR 7 million project to bring
assistance for technical and vocational training.
The project aims to support the economic and human development of Mongolia, enabling key
stakeholders to provide training in a way that is responsive to the needs of a rapidly changing labor
market. The project will begin in 2013 and last for five years.
The project adds to the European Union‘s EUR 25 million worth of commitments, mostly in rural
development, access to basic social services, and support to small-medium enterprises. A
partnership and cooperation agreement (PCA) between the European Union and Mongolia is
expected for 2012.
Source: European Union
E-FILING COULD SAVE TAXPAYERS MNT 12 BILLION
Research shows that electronic tax filing could result in MNT 12 billion in savings. Electronic filing
was introduced on 1 June.
The elimination of paper records would save businesses MNT 4.7 billion and more than 80,000 tax
payers MNT 1.5 million each.
―We are working to enter Mongolia as one of the top 10 countries in the world for tax renovation,‖
said USAID development consultant Olin McGill.
Source: Zuunii Medee
GERMAN CENTER TO LEAD WASTEWATER PLANT PROJECT
Researchers from the Helmholtz Centre for Environmental Research (UFZ) have opened a pilot
decentralized wastewater plant with integrated wood production in Mongolia. They have
collaborated with their partners in Germany and Mongolia to address three critical issues facing
Mongolia—deforestation, water scarcity and sanitation.
The Germany Ministry of Education and Research has provided funds for the Integrated Water
Resource Management in Central Asia: Model Region Mongolia (MoMo) project. This project aims to
find suitable water management solutions for the country. The Mongolia University of Technology in
Darkhan has been put in charge of the pilot decentralized wastewater plant.
In the second phase of the MoMo project, the director of the Mongolian University of Science and
Technology (MUST), Professor D. Lkhanag, and Momo-project leader at UFZ Professor Dietrich
Borchardt, have commenced a research pilot plant. They aim to devise an integrated water
resources management concept for the Kharaa Basin in northern Mongolia. Deforestation has
occurred due to continued grazing and logging.
The infrastructure has faced difficulties with sanitation due to changes in the Mongolian population
pattern. The existing systems are unreliable and pose a risk to human health and the environment.
Treatments may require heating frozen infrastructure, which may not be economically feasible for
the country.
Source: AZO Clean Tech, Helmholtz Centre for Environmental Research
HAZY DAYS: BERKELEY TACKLES POLLUTION
Scientists are working with the Millennium Challenge Corp. (MCC), a U.S. foreign aid agency, to
improve air quality in the capital city by lowering emissions from outdated stoves and boilers. MCC
has a five-year project in Mongolia to reduce poverty and promote sustainable economic growth.
In 2010 the agency approached Berkeley Lab's Ashok Gadgil, the driving force behind the Berkeley-
Darfur stoves, to lend vision and technical expertise to solving Mongolia's air quality problem.
Through an interagency agreement between MCC and the Department of Energy, a small team of
Berkeley Lab scientists has been providing technical guidance and support to MCC. Their focus has
been on the coal-burning stoves found in every ger.
Ulaanbaatar's concentrations of particulate matter, a mixture of solid particles and liquid droplets,
are among the highest in the world. And the highest concentrations have been measured in the ger
districts, on the outskirts of the capital, inhabited largely by formerly nomadic families. The
negative health impacts of the matter can be serious, including adverse birth outcomes, irregular
heartbeat, nonfatal heart attacks, development of chronic bronchitis, and premature death due to
heart or lung disease.
To monitor and evaluate the new stoves, a separate team went to Ulaanbaatar to collect data from
20 households. They also imported the Turkish Silver Mini to Berkeley and set it up in the lab to
replicate local conditions. He found potential challenges associated with consumers' lighting and
refueling the new stove compared to the traditional stoves.
The next project for the implementation support team is overseeing the replacement of eight heat-
only boilers, which are large boilers for heating schools and office building outside the central core
of the city where steam heat from power plants is not available. The project will also research
commercially available low-pressure boilers for heating homes and gers.
Source: Phys.org, Lawrence Berkeley National Laboratory
HERDERS CAUGHT BETWEEN CASHMERE AND CLIMATE CHANGE
Cashmere wool is one of Mongolia‘s most prized animal product exports. The second-largest
cashmere producer (after China), Mongolia accounts for 28 percent of the world‘s total supply. The
wool brings about USD 180 million annually into the country, and for the 36 percent of Mongols still
living nomadic lifestyles, cashmere is often an integral part of their livelihood.
―Eighty percent of our income is from cashmere. It‘s the money we earn now [in the spring] that we
rely on for the entire year—to send our kids to school, to stock food, repair things,‖ said B. Dorj, a
nomad herder.
It was not always so. The reliance on cashmere is a market-driven phenomenon that first gained
momentum after communism‘s collapse in 1991. Cut off from milk and meat buyers in the former
Soviet Union, the herders turned to raising cashmere as one of the only profitable activities
available. And without collective farms to manage the animals, individuals began keeping larger
flocks, causing the goat population to swell from 5 million in 1990 to almost 20 million by 2009.
Goats now comprise almost half of Mongolia‘s total livestock population, and the population
explosion has caused environmental stress, evidenced by overgrazing, pastureland degradation, and
desertification. At the same time, volatile international cashmere prices have pushed many herders
to keep larger flocks as a hedge against falling prices. This year prices dropped 29 percent to MNT
50,000 a kilogram.
Temperatures seem to be rising steadily, with the national average having risen 2.1 degrees Celsius
over the last 70 years. Additionally, the country has experienced a 30 percent decline in surface
water over the past 15 years, and 90 percent of Mongolia is at risk of becoming a desert compared
with its current 17 percent of desert landmass.
Source: Eurasianet
FOR FALCONS’ SAKE
The cabinet has decided to permit the export of 150 valuable saker falcons in 2012.
Mongolia has exported 2,700 saker falcons from 2000 to 2010, and sales in the past five years have
earned the country USD 11 million, said the government in a statement. The saker falcon is
classified as endangered on the International Union for Conservation of Nature Red List, with a 2010
population estimate of 6,800.
Mongolia began exporting a limited number of the falcon in 1994, mainly to Gulf Arab countries
such as Saudi Arabia, the United Arab Emirates, Kuwait, and Qatar. Every year falconers from Gulf
countries come to Mongolia to catch them. Local people and environmentalists often complain the
exports are reducing their numbers in Mongolia. Saker falcons are the most commonly used raptor
by Arab falconers. They are the most well-suited falcon to Arab falconry due to their adaptability to
desert climates, resilience, and their size in relation to the traditional quarry.
Source: Live Trading News
GOVERNMENT’S SALARY RAISES BRING 36 PERCENT TUITION HIKE AT MUST
Government‘s decision to increase the salaries of state workers by 53 percent may effect higher
tuition fees next fall.
Every spring there are reports of tuition hikes at universities. But this year is a particular problem
because public schools do not have the budget to afford the 53 percent increase in teacher salaries
mandated by government.
The total MNT 40 billion budgeted to the Mongolian University of Science and Technology (MUST)
falls short of covering all the school‘s costs, said B. Damdinsuren, a professor and the president of
the university. He said the school employs some 1,300 lecturers whose salaries vary, but some can
comprise up to 70 percent of the budget of a school under the university‘s umbrella.
―The expenses are beginning to grow larger than our income. We need to increase tuition,‖ said
Damdinsuren. He later added, ―If the state would provide some of the expenses, at least for things
like a new laboratory for our school of engineering and technology, it would be a big help.‖
He said joint efforts by the student union and workers union resulted in the decision that tuition
could rise by 36 percent. As a state school, however, MUST is responsible for basing tuition
increases on the lowest figure for inflation. In the end, the decision will be up to the school‘s
governing board. Recently government has begun to provide for expenses for renovations to
university buildings and dorms. After the two salary increases introduced this year, the average
salary of lecturers is MNT 800,000.
Source: Udriin Sonin
UNIVERSITIES SET TOUGHER REQUIREMENTS FOR ENTRANCE
Entrance into Mongolian universities is becoming more competitive as they set new minimum scores
for entrance exams.
Entrance exams will be held 8 to 10 June this year, with this year seeing some of the highest
minimum scores at the nation‘s top universities. The Institute of Finance and Economics leads the
pack with a minimum score of 620 needed for acceptance. Not far behind are the Academy of
Management with 600 and the National University of Mongolia with 560.
Tuition, too, is due to change this autumn. School boards of directors will meet later this year to
decide on tuition fees.
Source: Udriin Sonin
AIRLINE SERVICE TO SOAR
While Mongolia‘s tourism industry continues to grow, it will have to wrestle with the gap in airline
capacity.
Mongolia‘s transportation services are perhaps a trial for some tourists more accustomed to
comfortable trips, and some tourist services are lacking. Now, however, competition is growing in
Mongolia‘s airline services. Laying the foundation is the Khushigiin Khundi International airport,
planned for commissioning in 2016. Having an airport that meets international service
requirements and standards means huge opportunities for tourism in Mongolia.
Developers have planned for a 3,600-by 45-meter runway at the new airport, with two lanes each
for landing and takeoff. The airport will have six gates total. By 2019, according to plans, the
airport will have served 1.6 million passengers annually and transported 11,900 tons of cargo.
The number of international flights has grown with new competitors entering the arena and airlines
expanding their fleets. MIAT Mongolian Airlines plans to purchase a new Boeing 767-300 next year
and Boeing 737-800 in 2015 for international flights. There are also plans to expand the number of
routes, including direct flights to both of the United States‘ coasts.
Source: Mongolian Economy
INVESTORS WARY AHEAD OF POLLS
Mongolia‘s mining boom has transformed the former Soviet state into one of the world‘s hottest
economies, but an uncertain political outlook before parliamentary polls is making foreign investors
wary.
―The laws here are still forming, so for now, Mongolia is on watch mode,‖ Sardor Koshnazarov, head
of research for Eurasia Capital, told AFP at a recent coal mining conference in Ulaanbaatar. ―After
elections we should have more clarity on laws and the [foreign investment law].‖
The government, led by the Mongolian People‘s Party (MPP), is slightly behind in the latest polls to
the Democratic Party—both support the law—and the vote promises to be close. The victors will
inherit a government that is seeing increased revenues from mining and foreign investment and will
need to steer the country through a critical period when its biggest ever infrastructure projects
come online.
As government faces mounting pressures to grab a larger stake of its vast resources ahead of
parliamentary polls on 28 June, a new law that requires parliamentary approval for all foreign
investments worth more than USD 76 million within select sectors has added to the uncertain
conditions for overseas companies seeking work in Mongolia. The foreign investment law is untested
still, and foreign miners are eager to see how it might affect business arrangements.
The new government will also need to juggle an increasingly complex geopolitical role as Mongolia‘s
regional neighbors and allies in Europe and the United States vie for a slice of its resources. Last
year, Mongolia overtook Australia as the leading supplier of coal to its resource-hungry neighbor
China.
Source: Michael Kohn
NEW ZEALAND DELIVERS NEW SAFETY FEATURES TO QUADBIKES FOR MINERS
Miners in Mongolia will soon be using new quadbike safety bars designed by a team of Wairarapa
engineers in New Zealand.
Loader Construction Engineering Ltd. has already sold six models of it rear-fitted frames to a
Mongolian-based mining company and is now hoping to get feedback from New Zealand quadbike
users. Loader Construction has secured intellectual property rights for its twin-frame design, which
it says will slow or stop rolling quadbikes, reducing the risk of riders being pinned underneath.
Each year about five people die and 850 others are injured on New Zealand farms, causing
enthusiasts to look for added safety. The bars provide a gap between the bike and the ground in
cases of rolling. After talking about the idea to an Australian mine worker in Mongolia, an order for
six of the frames came.
However, New Zealand‘s labor department remains ―neutral‖ on the matter of what it calls ―roll-
over-protection-devises‖ (Rops). Its website states: ―These attachments have not been approved by
manufacturers of the vehicles, and manufacturers have openly expressed concern that the presence
of Rops increases the likelihood of serious harm if a quadbike should roll.‖
Source: The Dominion Post
MINING SHARES PLUNGE DESPITE RECORD PROFITS
The global mining industry is facing a growing disconnect with a significant decline in market
capitalization, an increase in commodity prices and a lack of shareholder confidence,
PricewaterhouseCoopers (PwC) said.
Although the mining industry started the 2011 year strongly, with the world's 40 largest miners
reaching record profits, company stocks significantly underperformed in the broader equity
markets, losing value by year-end as a result of continuing fears stemming from the recent
economic uncertainty, PwC stated in its ninth yearly review of global trends in the mining industry.
The survey further stated that a lack of confidence in the sector's growth prospects saw market
values plunge 25 percent by year-end to about USD 1.2 trillion, with only six of the world's top 40
miners seeing an increase in market value. The survey analyzed companies by market capitalization
in several significant economies, including the United Kingdom, the United States, Canada,
Australia, China and Hong Kong, South Africa, Russia, India, Brazil, Peru, and Mexico. Nineteen of
the top 40 companies were either from or primarily concentrated on emerging markets, with iron-
ore showing a significant growth spurt.
As the mining industry battles against a backdrop of the market's demands for heightened capital
discipline, the report showed that supply would be the story for the future. Some companies would
look to develop a tailored portfolio of projects to secure supply and increasingly look to locate new
mines in remote areas.
The study found that in 2011, revenues increased by 26 percent year-on-year to over USD 700
billion. Net profits were up 21 percent to USD 133 billion. The top 40 returned 156 percent more to
shareholders than in 2010. However the top four companies—BHP Billiton, Vale SA, Rio Tinto PLC,
and China Shenhua Energy Co., lost a total of almost USD 175 billion in market capitalization last
year. The top 40 companies' total assets remained about USD 1 trillion and grew a further 13
percent in 2011.
Source: Mining Weekly
CHINESE MANUFACTURING INDEX FALLS
A key measure of Chinese manufacturing activity fell more than analysts expected on Friday,
underscoring the economy's weakness and raising expectations that the government will step up a
stimulus program to revive it. Mongolia depends on Chinese activity as its production and growth
results in greater demand for Mongolia's metals and energy products.
The government's purchasing managers' index dropped to 50.4 points in May, down from 53.3 in
April. The decline ended five straight months in which the index had risen. Economists had
predicted that the government index would drop to 52.2.
A separate index compiled by HSBC and geared more to Chinese export activity fell to 48.4 in May,
down from 49.3 HSBC said the decline reflected weakness in both domestic and export markets. In
general, a reading of either index over 50 indicates manufacturing is growing, while a number
below suggests contraction. The logistics and purchasing federation cited that manufacturing
activity has continued to expand, albeit at a slower pace. Private economists said, however, that
the numbers showed manufacturing was stalling.
The government and Chinese economists close to it have played down the scope of any effort to
resuscitate the economy, but a spate of new infrastructure projects and subsidies for consumer
auto purchases last month indicate a stimulus program already is underway. However, economists
warned that government spending and subsidies can only prop up China's economy for so long, and
that only an economic overhaul that shifts activity more to consumers and private businesses will
improve the nation's long-term growth outlook.
Source: New York Times
CHINA COAL: PILING HIGH AS GROWTH SLOWS
To the growing list of data that demonstrates how China‘s economic growth is slowing down, add
this: At China‘s largest coal port, thermal coal inventories—a major export commodity for
Mongolia—have built up so much that the port is almost out of coal storage space, according to
Bernstein Research.
Summer is China‘s peak electricity season because the heat prompts people to turn on their air
conditioners. But instead of the normally brisk trading, coal stockpiles are building up at Chinese
ports, putting further pressures on domestic Chinese coal prices that have already slid more than 10
percent since late last year.
China is the world‘s biggest consumer of thermal coal—which is burned in power plants and provides
more than 70 percent of China‘s electricity—and is one of the world‘s biggest net importers of coal.
So the building in port stockpiles is significant in the near term because it could reduce demand for
coal imports, weighing on global coal prices at a time when commodities across the board grapple
with the impact of the Chinese slowdown.
And in the longer term, the high inventories point to an even more significant truth: China actually
has plenty of coal under the ground, it only imports coal now because it does not have the railways
and infrastructure in place to efficiently get enough coal from the mines to the power plants
thousands of kilometers away where the coal is needed. This situation will shift as China builds
more railways, and more ultrahigh-voltage power lines that will transport power mines to distant
cities. Because of those changes, in the long run China may not be a net importer of thermal coal at
all, some analysts believe.
The long-term dynamics behind falling coal prices are structural: power and steel consumption
growth are slowing; coal production capacity and transport capacity are continuing to increase.
This process of becoming more self-sufficient in coal could be accelerated by Beijing‘s recent push
to accelerate infrastructure projects. The outlook for coal, in Bernstein Research‘s analysis, is
looking a bit sooty.
Source: Financial Times
HEAVY TAX COULD SINK INDONESIA’S COAL INDUSTRY, SAYS INDUSTRY ANALYST
Indonesia‘s plan to introduce an export tax could devalue the country‘s coal business by some USD
11 billion, research and consultancy firm Wood Mackenzie warned on Tuesday. Politicians in
Mongolia are considering similar tax hikes with President Ts. Elbegdorj proposing legislation that
would bring taxes on miners as high as 40 percent on profits.
Speaking at the Coaltrans Asia conference, senior coal research analyst Rohan Kendall said that the
introduction of an export tax could cause Indonesia to lose competitiveness when compared with
other major supply regions, and could put at risk some 68 million tons a year of coal exports.
―Indonesian cash costs have doubled since 2006. This was not an issue while coal prices were rising
but now that prices have softened it is important to constrain costs to keep projects viable, said
Kendall. He added producers might find it difficult to avoid losses even without the tax due to
difficulties with developing new projects.
Kendall said that Indonesia was already one of the highest tax and royalty rates for coal-exporting
countries, with around 20 percent of coal producer‘s revenue flowing to the government.
Comparatively, the tax proposed to Mongolian Parliament would be double that. Kendall said that
an export tax would have a larger effect than the combined impact of Australia‘s minerals resource
rent tax and carbon tax, which Wood Mackenzie estimated would devalue Australia‘s coal industry
by 9 billion.
―China and India will continue to ensure strong growth in coal demand. But for Indonesia to
maintain its position as the world‘s largest coal exporter it will need to ensure cost increases are
manageable. An export tax on top of already increasing costs will jeopardize the viability of
significant volume, low-rank coal exports,‖ Kendall said.
Source: Mining Weekly
POLITICS
GENERAL ELECTION COMMITTEE BARS ENKHBAYAR'S CANDIDACY
The General Election Committee decided it would not allow former President N. Enkhbayar to run
for office in the upcoming parliamentary election on 28 June. The former president is in the midst
of a corruption case he says is a ploy to keep him from returning to power.
Enkhbayar planned to run as a candidate under the Justice Coalition, a political pact between the
Mongolian People's Revolutionary Party and the Republican Party. The Election Committee ruled
that Enkhbayar could not run under the terms of the Law on Elections as well as the Law on Central
Election Organizations.
One clause directly attributed to the Enkhbayar case: ―devotion of one‘s mind, labor and strength
for homeland and people, ethics to respect justice and law, ability to adhere to norms and ethics of
Member of Parliament.‖
Enkhbayar's son, E. Batshugar, was also denied his registration. Batshugar could not qualify on the
grounds that he had never fulfilled his military service, compulsory for all Mongolian males.
Dale Choi, chief investment strategist of Frontier Securities, saw the news as negative for
investment into Mongolia, citing ―increasing political risks due to intensification of political
confrontation.‖
Source: News.mn, Frontier Securities
ENKHBAYAR TRIAL POSTPONED
The corruption trial of N. Enkhbayar has been postponed until 12 June. The trial was set to begin on
Monday, but the judge granted Enkhbayar‘s request for a delay so that his lawyers could have more
time to prepare the case, said Enkhbayar's son.
The trial is Mongolia's highest-level corruption case and is seen as a bellwether of how the young
democracy will handle graft accusations. Enkhbayar, who had been planning to run for Parliament
at the end of this month, insists the charges are politically motivated and the timing is designed to
exclude him from the election.
Lady Ashton, the European Union foreign policy chief, said over the weekend that the European
bloc was closely following the case.
―We trust that this case will be treated transparently and with full respect for democratic
principles, the rule of law and human rights. The EU reiterates its full support to the strengthening
of democratic processes in Mongolia,‖ said a statement from Lady Ashton's office.
Source: Financial Times
ENKHBAYAR LASHES OUT FROM HOSPITAL
In room 304 of Hospital No. 2, former President N. Enkhbayar lies hooked up to a drip after a 10-day
hunger strike that doctors say nearly killed him. Enkhbayar, whose trial was expected to begin on
Monday before being delayed for a second time, insists the corruption charges against him are
fabricated by opponents who want him sidelined during parliamentary elections he planned to
contest this month.
If his own administration failed to contain corruption, Enkhbayar said, then Elbegdorj's government
has let it run wild. As money has started to gush into Mongolia, a treasure house of coal, copper and
rare earth's on China's doorstep, its institutions face the danger of corrosion.
Enkhbayar's image has been tarnished by the recently broadcast of footage in which he was seen
lambasting doctors and seemingly in better heath than many had imagined. Some Mongolians are
scornful of foreign media reports that, they say, portray Enkhbayar as a victim and his arrest as a
blow to Mongolia's fragile democracy.‖
Enkhbayar was arrested in April after representatives of the Independent Agency Against Corruption
(IAAC) said he refused to submit to questioning. In prison, he said he only had restricted access to
family and lawyers, and was never questioned. After 14 days, he was charged and subsequently
began his hunger strike. Ten days into his hunger strike, and after his transfer to the hospital,
doctors say his organs began to fail. It was his anger after officials proposed force-feeding him that
was filmed and broadcast.
Enkhbayar sees his treatment as the culmination of a campaign against him by President Ts.
Elbegdorj, who he claims stole the 2009 presidential election although it was declared fair by
international observers. He also alleges that the anti-corruption agency is stuffed with presidential
appointees, though the government says official are approved by Parliament.
Elbegdorj presents himself as a strong democrat leading the campaign against graft. Legal
authorities, he insists, act independently. Lord Goldsmith, the former U.K. Attorney-general
representing Enkhbayar, said there was insufficient time to prepare, given the unseemly rush to
trial‖ and the volume of documents—no fewer than 50 binders. Government said swift action
became necessary before Enkhbayar won parliamentary immunity.
Source: Financial Times
BAN ON NEW LICENSES TO CONTINUE OVER NEXT 5 YEARS, SAYS MINERALS MINISTER
The minister of mineral resources said he did not see the issuance of any new licenses within the
next five years. Many miners have waited anxiously for the ban on new mining licenses to be lifted,
which has been in effect since 2010.
Minister D. Zorigt said government has committed to keeping up to 20 percent of Mongolia's
previously licensed areas for mining under its protection. Instead there will be geological study at
these areas. Any extraordinary findings would have to be discussed by Parliament, he added.
―This is a huge and historical decision,‖ said Zorigt.
The government has introduced many changes to its regulations, including the reduction of the
amount of land it would license from 44.5 percent of Mongolia's territory to 14 percent and the
number of active licenses permitted from 7,000 to 4,000, he said. The government also passed a
resolution that it must receive exploration results from all companies in Mongolia for its greater
observation over mining activities.
The government has already canceled 242 licenses where there were operations in areas needing
protection. It currently has plans to revoke 1,400 licensees.
Source: Zuunii Medee
MEETING WITH S. KOREAN FINANCE OFFICIALS BRINGS TALK OF LIBERALIZED AIR TRAVEL
Representatives from the finance ministries of Mongolia and South Korea met this week for their
annual meetings to discuss how they can better coordinate their respective policies.
Mongolia and Korea tightened their political ties and expanded communications after the visit of
Korean President Lee Myung-Bak in May 2011. It was then that the governments decided that the
secretaries of their respective ministries of foreign relations would meet annually.
This year‘s meeting resulted in agreements that include a reduction on passenger requirements and
loosened air communication regulations. There has been greater demand for travel to Korea for
business trips and medical treatment.
Agreements made include a no-fee visa made available to Korean citizens. Currently Koreans must
pay USD 30 per head for entrance into the country. It has also been suggested that the time needed
to issue a visa be reduced from 14 to five days.
Greater freedom for air traffic was another issue up for compromise. Korea would like to involve
more airline carriers in the profitable Ulaanbaatar-Seoul route. In addition to MIAT Mongolian
Airline and Korean Air, the only two airlines providing this service, Asiana Air, Eznis Airways and
Mongolian Airlines Group would also like permission to fly that route.
Allowing more airlines access to the route would decrease ticket prices and improve service quality,
said B. Ganbold, a director of the Department of Asian Affairs of the Ministry of Foreign Affairs. It
would also encourage investment into Mongolia, as it would allow a greater number of passengers to
travel to Mongolia. Estimates indicate that the changes would double the number of passengers
traveling to Mongolia.
Among developing and tertiary countries, Korea is Mongolia‘s third partner in foreign trade and
fourth for foreign direct investment. Korea has about 30,000 Mongolians living and working there.
Source: Undesnii Shuudan
ELECTION REGULATIONS HAS UB MAYOR TAKE TEMPORARY LEAVE
Ulaanbaatar Mayor G. Munkhbayar will temporarily step down from his position to comply with new
regulations to the election law.
Various clauses within the election law state that government officials should give up their public
duties before registering as a candidate.
In addition to the mayor, 16 other candidates will step down, including seven government officials,
eight individuals holding office in the capital, and one member of a non-government organization
(NGO).
Source: Udriin Sonin
BALANCING INVESTOR AND PUBLIC INTERESTS
New developments in Mongolia‘s new foreign investment law demonstrate some of the concerns
about the protecting of foreign direct investment in Mongolia‘s mining sector.
It is important in this context to emphasize that states have the sovereign right to regulate foreign
investment, which should be subject to certain conditions as stipulated by their domestic laws and
the states‘ obligations under international law. At the same time, it is important to ensure a
balance between investors‘ and public interests.
―I welcome the proposal by the president of Mongolia to engage with the international community
and combine efforts to further improve investment legislation in creating a level playing field for
domestic and foreign investors in regards to important aspects related to dangers associated with
mineral wealth, which is known as ‗Dutch disease‘. I consider it would be important to promote
international dialogue and experience sharing with the ECT constituency, where a number of oil and
gas producing countries have similar challenges,‖ said Urban Rusnak, Secretary General of the
Energy Charter Secretariat in Brussels, Belgium.
Source: Financial Times
SETTING THE TONE FOR INVESTMENT
Concerns that a new foreign investment law would severely impact Mongolia‘s natural resource
sector and economy as a whole are beginning to ease, as industry players now see that reformed
legislation is necessary for the country‘s economic evolution.
Reports that the government planned to set limits on foreign ownership led to speculation over an
investor exodus. However, in a nod to foreign interests, the law‘s provisions were significantly
diluted before its approval on 17 May. Projects worth more than USD 76 million will not be required
to have majority Mongolian ownership. Additionally, the number of strategic sectors that were
previously required to be 51 percent state-controlled was also significantly reduced. The legislation
is also not retroactive.
Indeed, some investors believe these regulatory changes will eventually improve the long-term
prospects of the country. Officials from Aspire Mining, which owns the Ovoot coking coal mine and
rail project in northern Mongolia, said the new law would provide more certainty for investors in
Mongolian resources and that it would not limit potential funding sources for Aspire Mining‘s
mineral and rails project, which is expected to cost a total of USD 2 billion.
―It is a good law for Mongolia and provides stability and clarity for investors,‖ said Eric Zurrin, the
chief executive officer of ResCap, a boutique investment bank in Ulaanbaatar. ―This brings Mongolia
more in line with mature, resource-rich economies, such as Australia and Canada.‖
The introduction of this law is likely to be viewed as political posturing before elections on 28 June,
with the ruling party seeking to reassure Mongolian voters that foreign entities will not enjoy the
spoils of the country‘s hoard of coal, copper, gold, and other natural resources on their watch.
However, it can also be argued that the legislation seeks to put interests of future generations of
Mongolians ahead of foreign investors.
Source: Business-Mongolia, Oxford Business Group
ELBEGDORJ AWARDED U.N. ENVIRONMENTAL PRIZE
President Ts. Elbegdorj was among the six winners of the United Nations' Champions of the Earth
2012 award. The award is given to those whose actions and leadership have had a positive impact
on the environment.
―This is a great honor, not only for me but for our nation,‖ said Elbegdorj. ―As president, I have a
green policy. It has two pillars: one is our people, the other is our environment.‖ He added, ―One
day I will give up my presidency, but I will continue as a Champion of the Earth.‖
President Elbegdorj won the award in the ―Policy Leadership‖ category for his delivery on promises
to put the environment at the forefront of policies. The awards are meant to inspire attendees at
Rio+20, the United Nation's conference on sustainable development taking place in Rio later this
month, 20 years after the U.N. Earth Summit that set many of today's environmental programs in
motion.
―As the world heads to Brazil for Rio+20, these six individuals deservedly named as champion,
demonstrate that committed, concrete action can have a transformative effect on countries,
communities and businesses,‖ said Achim Steiner, head of the UN Environment Program.
Champions of the Earth, which was launched in 2005, is the United Nation's flagship environmental
award. To date, it has recognized 51 individuals and organization for their leadership, vision,
inspiration, and action on the environment. The remaining five 2012 Champions of the Earth
winners are Fabio Barbosa of Brazil and Sultan Ahmed Al Javer of the United Arab Emirates,
Bertrand Piccard of Switzerland, Sander Van der Leeuw of The Netherlands, and Samson Parashina
of Kenya.
Source: ENS
AZERBAIJAN, RUSSIA, MONGOLIA TO COOPERATE ON RAIL MANAGEMENT
The Railway authorities of Azerbaijan, Russia, and Mongolia signed a cooperation agreement in
Sochi for improving passenger services.
The signed document envisages exchanges of experience and cooperation for the pricing policy, the
development of a ticket sales system, and improving the legal framework. Each side agreed to
cooperate on repairs, maintenance and the leasing of rolling stock, the reduction of delays to
passenger trains at the border.
Source: Trend
S. KOREA, MONGOLIA AGREE TO STREAMLINE VISA PROCESS
South Korea and Mongolia signed an agreement last week to streamline the visa process for each
other's citizens in a bid to boost people-to-people exchanges and economic cooperation between
them, officials said.
The agreement was signed after talks between South Korean Foreign Minister Kim Sung-hwan and
his Mongolian counterpart G. Zandanshatar, who arrived in Seoul earlier in the day for a three-day
visit.
"The agreement will grant the nationals of the two countries multiple-entry visas valid for a
maximum of five years if they meet the required conditions, and exempt them from visa fees," said
Korean ministry spokesperson Cho Byung-jae.
In addition, South Koreans who are long-term residents of Mongolia will no longer have to obtain an
exit visa for a temporary trip out of the country, Cho said.
Source: Yonhap
MONGOLIA, JAPAN LAUNCH EPA TALKS
Mongolia and Japan launched the first round of negotiations for an Economic Partnership Agreement
(EPA) on Monday.
During the four-day talks, the two countries will discuss issues relating to trade in goods and
services, rules of origin, customs procedures and investment. Mongolian Foreign Minister G.
Zandanshatar said at the opening of the negotiations that Japan has been the largest provider of
development assistance to Mongolia since the 1990s, and is also a major trading partner of
Mongolia.
He emphasized that concluding the agreement with Japan is one of the top priorities in bilateral
relations, saying that by doing so Mongolia is seeking to boost greater economic integration
between the two economies. Shinichi Nishimiya, Deputy Foreign Minister of Japan, said Japanese
companies are becoming increasingly interested in investment opportunities in Mongolia.
Source: Xinhuanet
MIGRANT WORKERS FACE DISCRIMINATION IN KOREA
Many Mongolian migrant workers bring their children when they move to South Korea to work.
Culturally, it is more important for Mongolian children to live with their parents than to continue
their education in their country. Many Mongolian children in South Korea have limited access to
public services, including free education.
Yoo Hyung Geum, a pastor, opened Mongol School to educate the children of migrant workers from
Mongolia and to restore their hope and future.
"Compared to late 90s, the employers treat their migrant workers much better," said Yoo. "At least
the workers are compensated and the law protects them from employers' confiscation of their
passports."
However, when it comes to the rights of migrant workers' children, Yoo said Korean society has a
long way to go to improve their rights. One Mongolian student, Batmong, recalls his unpleasant
memory about Korean students.
"During our lunch break, we like to play on the playground near by the Korean school right next to
our school. But whenever we passed by the school building, Korean students threw milk, erasers, or
garbage at us from their classroom on the second floor." He later added, "I don't think they respect
us as individuals because our country is poor."
Another student, 19-year-old Oorie, explained how she felt lucky to attend Korean school, as it was
much larger and only a few select migrant workers can attend. That was until one day she was
pushed down a flight of stairs. She broke her front teeth and injured the muscles on her upper lips.
She cannot completely close her mouth still and receives treatment.
Despite rapid economic development, South Korea remains tragically stunted in terms of civil
rights. Rights for marginalized populations are virtually non-existent in South Korea. Children of
illegal immigrants from developing countries face even greater discrimination. Yoo hopes that will
change sooner in South Korea rather than later.
Source: Washington Times
NEW IDS TO BE SENT BEGINNING 25 JUNE
Distribution of new electronic identification cards will begin just before the 28 June parliamentary
election.
Less than 40,000 of those who lost their identification cards between 26 December and 1 May
received a new one. Voters will need their identification to participate in the election.
The General Registration Office intends to finish printing by 10 June and begin distribution on 25
June.
Source: News.mn
FINANCE MINISTRY LAYS OUT DEVELOPMENT AGENDA FOR NEXT 10 YEARS
The Ministry of Finance presented its accomplishments from the last 10 years as well its plans for
the next 10 at the Central Asia Regional Economic Cooperation (CAREC) forum held last May.
Presented items included more than 10 projects in four fields that totaled USD 15 billion as well as
10 capacity-building training seminars. Additionally, the government has invested USD 274 million
into eight projects for road infrastructure, customs services, and the urban development of
Umnugobi Aimag.
At the seminar the ministry laid out its plans for the next ten years, which include its plan to direct
USD 20 million for a variety of projects concerning roads and customs infrastructure. One project
mentioned was the introduction of customs processing via an electronic screen. It will be the
energy sector, however, which will be the main focus of development.
Source: Zuunii Medee
GOVERNMENT REVIEWS ENFORCEMENT OF LAW ON MINING NEAR RIVERS AND TREES
Cabinet members have acquainted themselves for its enforcement of law on banning mineral
exploration at areas near rivers and trees.
The government has suspended 242 licenses for gold deposits at sites near riverheads, reserved
areas with ponds, and forestry. Sixty-nine of those licenses have been cancelled completely, while
36 have been only partially annulled.
Boundaries for the areas, comprising 1,400 licenses, have been set. At the next Cabinet meeting the
final boundaries are expected for approval. Issues such as suspending and cancelling licenses as well
as compensation will also be debated.
Mongolia has licensed 14 percent of its territory through the issuance of special licenses, and
approximately 20 percent of that land has been put under government protection. That land will be
used for geological study and research.
Source: Montsame
DINOSAUR HEARING POSTPONED
A hearing set for Friday regarding dinosaur fossils the president believes were illegally taken from
Mongolian soil was canceled after a Dallas court extended a temporary restraining order.
The Mongolian government and Dallas-based Heritage Auctions have agreed to cooperate to try and
resolve their dispute over the sale of a Tyrannosaurus baatar skeleton. In the spirit of cooperation,
President Ts. Elbegdorj has vowed not to go further with the claim that Heritage Auctions violated
the restraining order when it sold the skeleton in New York for more than USD 1 million on 20 May.
Mongolian experts will inspect the fossil in New York on Tuesday.
Source: News.mn
NEW MONGOLIAN LAWS The following amendments and addenda to laws were published in the latest weekly Government bulletin. Unless otherwise decided by Parliament, they will take effect ten (10) days after publication. Date Laws 05.06.2012 Amendments to Law on Education Amendments to Law on Primary, secondary education Addendum to Law on Pre-school education Addendum to Law on Special permits for business Please visit BCM's website, Legislative Working Group, for a summary of new Mongolian laws. BCM members who wish to access complete versions of the laws and regulations in Mongolian language are welcome to email the BCM office: [email protected].
ANNOUNCEMENTS
MINExpo INTERNATIONAL 2012, LAS VEGAS, 24-26 SEPTEMBER
The Business Council of Mongolia (BCM) and the Mongolian National Mining Association (MNMA) with
the support of the U.S. Embassy‘s Commercial Section in Ulaanbaatar are now registering a
Mongolian business delegation to participate in ―MinExpo International 2012‖ which will be
organized at the Las Vegas Convention Center on September 24-26, 2012.
MinExpo International 2012 is the world's largest and most comprehensive exposition dedicated to
mining equipment, products and services. More than 1,400 exhibitors in eleven exhibit halls will
display the latest technology, equipment, components, parts and services for exploration,
extraction, safety, environmental remediation and preparation and processing of metallic ores,
coal, industrial minerals and more!
Registration deadline is 5 pm, 15 June. Please contact BCM at 70114442, [email protected] or
MNMA at 314877, [email protected] for registration and additional information about
the event.
___________________________________________
REGISTER NOW FOR MONGOLIAN MINING DIRECTORY-2013
Mongolian Mining Directory-2013 which provides information database for Mining companies,
investors, suppliers, service companies, government and non government organizations will be
published for the fourth year to commemorate the 90th anniversary of the Mongolian mining
industry. The MMD is distributed free of charge to international and domestic mining companies,
international conferences and exhibition, embassy offices in Mongolia and foreign countries to
investors.
BCM is a Supporting Organization of the MMD and welcomes Mongolian mining industry participants
who are interested in advertising their products and services in Mongolian Mining Directory-2013.
For more information please visit: www.mining.mn, www.mongolianminingdirectory.mn or call
+976-7011 5590.
___________________________________________
REGISTER FOR BCM’S MINING SUPPLY CHAIN DATABASE AT NO COST
The new version of BCM‘s Mining Supply Chain Database is ready for use. Following the initiative of
Oyu Tolgoi LLC, the BCM has maintained the Mining supply chain database since March 2009. It is
honor to introduce you to the new version of the database which is totally upgraded as to its
content and use of information technology opportunities.
We are inviting all Mongolian mining suppliers and buyer companies to join the Mining Supply Chain
Database. Please visit here for registration.
If you have any questions regarding the database, please contact Undral
at [email protected] or 317027.
___________________________________________
POSTINGS ON MONGOLIAN WEBSITE ‘PRESENTATIONS’ AND ‘NEWS’ SECTIONS
The new ‗Presentations‘ section on BCM‘s Mongolian website can be reached via link to
bcm.mn/itgeluud. Several presentations already posted include 11 from the 2nd Coaltrans on May
23-24 in UB.
As a key component of BCM‘s Mongolian website ‗News‘ section, articles from the Government‘s
―Open-Government.mn‖ site are regularly posted.
___________________________________________
POSTINGS ON ENGLISH WEBSITE 'PRESENTATIONS', 'MONGOLIA REPORTS' AND ‘MONGOLIAN
BUSINESS NEWS’
On BCM‘s English website, ‗Resource, Presentations‘ section, for your review are 12 presentations
from the 2nd Coaltrans on May 23-24 in UB; 5 presentations from BCM‘s May 28 monthly meeting; 3
speeches from ―Corporate Governance Training for Directors‖ on April 27-28; 12 presentations on
Mongolian entities at Mines and Money Hong Kong 2012 on March 21-23; 11 presentations from Coal
Mongolia 2012 on February 9-10; and speeches from all BCM‘s monthly meetings in 2011-12.
Also on BCM‘s English website, ‗Resource, Mongolia Reports‘ section, please note the Polit
Barometer, April 2012 by Sant Maral Foundation (Mongolian and English versions); ―Preliminary
estimates of staggering costs of inefficient trade regulation in Mongolia‖ by Olin McGill, consultant
to USAID BPI; ADB‘s Asian Development Outlook, April 2012; detailed results of BCM‘s NewsWire
survey of March 2012; World Bank‘s Mongolia Quarterly Economic Update, February 2012; and
Executive Summary of the Mongolian Real Estate Report 2012 by M.A.D. Investment Solutions.
We are now posting some news stories and analyses relevant to Mongolia to BCM website's
‗Mongolian Business News‘ as they come, instead of waiting until each Friday to put them all
together in the weekly NewsWire. The NewsWire will, however, continue to be issued on Friday,
and will incorporate items that are already on the home page, so that it presents a consolidated
account of the week‘s events.
___________________________________________
SOCIAL NETWORK WITH BCM
The Business Council of Mongolia (BCM) has expanded its reach to your favorite social networks.
Keep up to date on the latest business deals in Mongolia and how the climate for investment is
improving each day with BCM.
Connect with BCM on Linked-in to join the diverse group of professional contacts creating a better
business environment in Mongolia today.
Add BCM on Facebook at http://www.facebook.com/pages/THE-BUSINESS-COUNCIL-OF-
MONGOLIA/129826330435540 to read the latest announcements and comment on events carried in
the NewsWire with the community.
Hear breaking news and announcements as they happen when you follow BCM on Twitter at
http://twitter.com/#!/bcMongolia.
Of course for news information, interviews, and announcements regarding our organization, visit
the official BCM website at www.bcmongolia.org and www.bcm.mn.
ECONOMIC INDICATORS
INFLATION
Year 2006 6.0% [source: National Statistical Office of Mongolia (NSOM)]
Year 2007 *15.1% [source: NSOM]
Year 2008 *22.1% [source: NSOM]
Year 2009 *4.2% [source: NSOM]
Year 2010 *13.0% [source: NSOM]
Year 2011 *10.2% [source: NSOM]
April 30, 2012 *16.0% [source: NSOM]
*Year-over-year (y-o-y), nationwide
Note: 17.8% y-o-y, Ulaanbaatar city, April 30, 2012
CENTRAL BANK POLICY RATE
December 31, 2008 9.75% [source: IMF]
March 11, 2009 14.00% [source: IMF]
May 12, 2009 12.75% [source: IMF]
June 12, 2009 11.50% [source: IMF]
September 30, 2009 10.00% [source: IMF]
May 12, 2010 11.00% [source: IMF]
April 28, 2011 11.50% [source: IMF]
August 25, 2011 11.75% [source: IMF]
October 25, 2011 12.25% [source: IMF]
March 19, 2012 12.75% [source: Mongol Bank]
April 18, 2012 13.25% [source: Mongol Bank]
CURRENCY RATES – June 7, 2012
Currency Name Currency Rate
U.S. dollar USD 1,318.40
Euro EUR 1,654.39
Japanese yen JPY 16.61
British pound GBP 2,037.13
Hong Kong dollar HKD 169.52
Chinese yuan CNY 207.28
South Korean won KRW ` 1.12
Russian ruble RUB 40.88
Disclaimer: Except for reporting on BCM‘s activities, all information in the BCM NewsWire is
selected from various news sources. Opinions are those of the respective news sources.