View
250
Download
4
Embed Size (px)
Citation preview
BUSINESS COUNCIL of MONGOLIA NewsWire
www.bcmongolia.org [email protected]
Issue 268 – April 5, 2013
NEWS HIGHLIGHTS:
Business
OT gets continued funding through April;
Government has second thoughts on canceling Chalco agreement;
Government to establish power plant JV at Tavan Tolgoi;
Mongolia, Rio Tinto both have reasons to settle OT dispute;
MSE Top 20 falls 10 percent in March;
Areva denies charges that uranium exploration caused cattle deaths;
Transneft seeking alternative routes for Chinese crude supplies;
Modun Resources receives positive environmental assessment for Nuurst;
Changi Airport proposes direct flight between Singapore and UB;
Russia calls for technical upgrade to Ulaanbaatar Railway;
Canadian firms introduce development solutions for Ulaanbaatar's ger districts;
Global X to launch Central Asia and Mongolia ETF;
Peabody-Winsway, SouthGobi sue Umnugobi government;
Akica Group heads sued over bad business deal;
Khan receives unfavorable decision in ARMZ litigation;
Relocation firm opens UB office;
UK renewable energy trade mission to Mongolia;
SouthGobi head steps down from Aspire board;
Winsway appoints new CEO;
Coaltrans Mongolia in UB on 25-26 June;
Rio starts copper exploration in Uzbekistan;
Anglo American cancels $555m Mozambique coal acquisition;
Areva CEO says Japan may restart two-thirds of nuclear reactors.
Economy
CTU proposes increase in minimum wage;
TT power plant to get greater power output capacity;
Highways to link Russian and China borders;
JICA leads project for new UB bridge;
Government to relocate tannery plants now in UB;
MNT 95 billion of Chinggis bonds to go to cashmere sector;
Mongol Bank holds foreign-exchange auction;
Metro planners to undertake feasibility study for subway project;
Real estate market update - Q2 2013;
Ongoing mining disputes hurt growth;
Mongolia needs schools and hospitals: why talk about savings?;
Liquid economics;
Air pollution linked to 1.2 million premature deaths in China.
Politics
Deputy speaker expected to resign after revelation of secret off-shore account;
MPP electoral wins approved by Supreme Court;
Spring session begins with incomplete Parliament;
2013 spring session agenda released;
Ganbaatar to file suit against Rio Tinto in Hague Court;
Mining Minister continues push for changes to OT investment agreement;
Bill to restrict certain uses of Chinggis Khan’s name and image;
Japanese premier moves to boost ties with Mongolia;
Fourth India-Mongolia cooperation meeting held in Delhi;
Mongolia to ease visa process for Turkish citizens;
Elbegdorj calls for support to “reindeer people” culture.
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
Major Drilling
International SOS
Wagner Asia Automotive
Techenomics
Breakthrough PR
Oxford Business Group Mongolian National Broadcasting
BUSINESS
OT GETS CONTINUED FUNDING THROUGH APRIL
The board of Mongolia's Oyu Tolgoi copper and gold mine agreed to continue funding the project
through April, Mining Minister Davaajav Gankhuyag said in mobile phone text message.
The mine is operating on a month-to-month budget and requires approval from the board of
directors. International investors currently cash fund the entire project.
Putsag Tsagaan, an Oyu Tolgoi board member, said earlier this month that Mongolia will not
approve the budget for the entire year until the company produces a feasibility study for phase two
of the project.
Source: Bloomberg
GOVERNMENT HAS SECOND THOUGHTS ON CANCELING CHALCO AGREEMENT
Mongolian politicians have changed their tone on the Tavan Tolgoi offtake agreement with
Aluminum Corp. of China Ltd. (Chalco), indicating they may be able to resolve their disagreements
without canceling it.
At a recent press conference Prime Minister Norov Altankhuyag suggested that canceling the
contract might not be in Mongolia's best interest. Furthermore, in a 2 April interview with
newspaper Udriin Shuudan, both Mining Minister Davaajav Gankhuyag and Erdenes Tavan Tolgoi LLC
Chief Executive Officer Yaichil Batsuuri echoed the prime minister's remarks. They said ministry
officials had met with their Chinese counterparts to discuss the issue and that Chalco
representatives would arrive in Mongolia on Thursday for discussion.
―At the Cabinet level, we are assessing whether we should pay our debt back with coal or with
cash,‖ said Gankhuyag.
Source: Mongolia International Capital Corp.
GOVERNMENT TO ESTABLISH POWER PLANT JV AT TAVAN TOLGOI
The Cabinet of Ministers has agreed to pursue a joint venture with private investors for a 450-
megawatt power plant at Tavan Tolgoi.
The government plans to hold at least a 34-percent stake in the project, but the Ministry of Energy
has the authority to modify that expectation. Energy Minister M. Sonompil will act as project
coordinator of the company.
Source: News.mn
MONGOLIA, RIO TINTO BOTH HAVE REASONS TO SETTLE OT DISPUTE
A cost overrun of a couple of billion bucks at Oyu Tolgoi is no doubt significant even to a big
company such as Rio Tinto PLC, with sales last year topping USD 50 billion. But to a small economy
such as Mongolia's, it's a staggeringly large sum. It accounts for fully a fifth of last year's gross
domestic product (GDP).
Parliament signed on in 2009 to borrow a third of the money to fund the USD 4.2 billion project,
said Parliament Speaker Zandaakhuu Enkhbold, who was in Vancouver last week at the end of a
cross-Canada visit.
―If at the time they had told us the cost will be USD 6.2 billion, then we would have thought
twice,‖ he said. Now that the costs have escalated so steeply, ―We want to know how it happened.
How much? Spent where?‖
The dispute and related issues have colored both the performance of Turquoise Hill Resources Ltd.'s
stock and the international view of Mongolia as a place to invest in recent months. The company's
stock is trading in the mid-USD 6 range, down from a peak of about USD 28 in early 2010 and about
USD 15 a year ago. And foreign investment in Mongolia nosedived last year, plunging 17 percent to
USD 3.9 billion, in response to what was seen as heavy-handed legislation concerning foreign
investment.
Enkhbold conceded that the law hurt his country's business reputation, but adds that investors' fears
will be eased now that the Strategic Entities Foreign Investment Law (SEFIL) has been revised and
clarified. He said the threshold approval for foreign investment will be lifted and that it applies
only to state-owned investments. Enkhbold said mining has come to dominate the country's
economy, and the revenue from it is urgently needed to give the government the means to invest in
other sectors—mainly agriculture, tourism and services.
―Mining doesn't employ a lot of people. It employs a lot of big machines,‖ he said. ―We have very
high unemployment, and without diversification of the economy it will stay high.‖
Source: Vancouver Sun
MSE TOP 20 FALLS 10 PERCENT IN MARCH
The MSE Top 20 Index declined by 0.06 percent to sit at 15,542.24 points on the last trading day of
the month. For the month, the MSE Top 20 lost 10.1 percent.
Remicon jumped 2.1 percent to close at MNT 195, following the news about the trilateral
agreement between the Ministry of Construction and Urban Planning, the Authority for Fair
Competition and Consumer Protection (AFCCP) and over 50 construction, steel, and cement
producers signing for a soft loan of MNT 370 billion.
Source: BDSec JSC
AREVA DENIES CHARGES THAT URANIUM EXPLORATION CAUSED CATTLE DEATHS
Areva Mongol LLC formally denied accusations that its operations had led to the death of nearby
cattle.
―The exploration has no risk or danger for citizens and animals,‖ reads the statement.
The company listed reasons that its exploration operation could not have caused the deaths,
including the fact that it is operating in a ―region with low radiation.‖ They added that the heavy
metal found by laboratory test could not have come from its operations as it has not extracted
heavy metals.
The company said that the prime minister has ordered a working group be established to investigate
the reasons for the deaths. It added that it has complied with government regulations and has led
its own inspections as well as that of permitted third parties into its facilities.
―We constantly make environmental controls and tests in the region where the company operates
including radiation and chemical characteristics of ground water,‖ says the statement.
―Independent investigations by other organizations are constant. They have still not revealed any
faults.‖
Source: Areva SA
TRANSNEFT SEEKING ALTERNATIVE ROUTES FOR CHINESE CRUDE SUPPLIES
Russian oil giant Transneft is eyeing Mongolia as a possible transit shortcut for crude oil supplies for
China. The current Kazakhstan route could lose Russia up to USD 2.6 billion a year in export levy.
Transneft is looking for new efficient ways to transport additional volumes of Russian crude oil to
China, company spokesman Igor Demin told Vedomost. The agreement to ramp up crude exports
was signed by Rosneft Chief Executive Igor Sechin and CNPC President Zhou Jiping on 22 March.
―Kazakhstan so far has been merely talking about the possibility of transferring export tax to the
Russian budget as applied to crude swap deals.‖ With seven million tons at stake Russia could incur
losses in the region of RUB 80 billion (some USD 2.6 billion), he said. The Russian export tax on
crude stood at USD 420.6 per ton in March 2013.
DLA Piper counsel Marine Kyakisheva said the export tax is not charged on commodities being sold
within the Customs Union (which unites Belarus, Russia and Kazakhstan), but that it has to be paid
if the commodity in question is being re-exported to a third country.
Infranews news agency Director General Alexei Bezborodov said the Mongolian route from Meget is
currently being used to just 20 percent of its overall capacity, which means Mongolia would be
happy to offer a discount. Demin said another Russian oil giant, Rosneft, once planned to supply
crude oil to China via Kazakhstan from its Samotlor field. On the other hand, the current decline in
pipeline loads may cause Transneft to hike transit rates along its pipelines by up to 25 percent, he
noted.
No deadline has been set for deciding on a possible alternative route, Demin said.
Source: Russia Beyond the Headlines
MODUN RESOURCES RECEIVES POSITIVE ENVIRONMENTAL ASSESSMENT FOR NUURST
Coal explorer Modun Resources Ltd. reported a positive environmental impact assessment from the
Ministry of Environment and Green Development for the Nuurst thermal coal project.
On the strength of the assessment, Modun has submitted all the relevant documentation to the
Mineral Resources Authority for the final review of its mining license application.
―The progress towards obtaining the mining license for the Nuurst project continues,‖ said Rick
Dalton, managing director. ―As we enter the final stage of the process, we remain on track to
achieve project development and first mining of coal in the next 12 to 18 months.‖
Modun also announced the appointment of Darambazar Achit-Erdene as a director of Modun
Resources Ltd.'s Mongolian subsidiary, Modun Resources LLC Mongolia. Achit-Erdene is the founder
and president of Mongolia International Capital Corp. (MICC), a leading investment banking firm in
Mongolia.
―Achit-Erdene is a welcome addition to Modun's in-country Mongolian team as we change our focus
from exploration to development of the 100 percent-owned Nuurst coal project in central
Mongolia,‖ said Dalton. ―Achit-Erdene's local experience and expertise has been and will continue
to be invaluable as we work in conjunction with the Mongolian government and business partners to
advance the Nuurst coal project and pursue several other local opportunities that are arising as we
move towards production.‖
Source: Modun Resources Ltd.
CHANGI AIRPORT PROPOSES DIRECT FLIGHT BETWEEN SINGAPORE AND UB
The chief executive of Singapore's Changi Airport Group suggested a direct flight between
Ulaanbaatar and Singapore in a meeting with Ulaanbaatar's chairman of tourism.
Chief Executive Officer Wong Woon Liong suggested the flight to encourage tourism and promote
mutual collaboration between the two nations. Singapore and Mongolia see an exchange of 8,000
passengers a year. Changi Airport is a major hub of Asia and considered the world's seventh busiest
for air traffic.
Source: Info Mongolia
RUSSIA TO COOPERATE FOR TECHNICAL UPGRADE TO ULAANBAATAR RAILWAY
Russia has agreed to cooperate with Mongolia to upgrade the facilities of Ulaanbaatar Railway JSC.
At a meeting between Deputy Prime Minister and Chairman of Russia-Mongolia Intergovernmental
Committee, Dendev Terbishdagva, spoke about the need for technical improvement with Russian
Ambassador Viktor Samoilenko on 29 March. Samoilenko noted that although Mongolia and Russia
discussed the need for technical renovation for the Mongolian-Russian joint venture rail company
three years ago, no progress had been made. Meanwhile, railway traffic has grown annually.
Terbishdagva agreed, but noted there were many other Russian-Mongolian matters that need
attention following the 16th Russia-Mongolia Intergovernmental Committee meeting on Trade,
Economy, Science and Technical Cooperation held last December.
Russian and Mongolian officials are expected to discuss this and more on April 15 when they will
discuss jointly held assets. From 18 to 20 April officials from both countries will meet again for the
Erdenet Mining Corp. board of directors meeting.
Source: Info Mongolia
CANADIAN FIRMS INTRODUCE DEVELOPMENT SOLUTIONS FOR ULAANBAATAR'S GER DISTRICTS
Parliament Speaker Zandaakhuu Enkhbold visited Colombia, Canada in an effort to seek out
development strategies for Ulaanbaatar's ger districts.
Enkhbold visited the factories of wood-processing firms Linwood Homes Ltd. and Interex Canada
Inc. to observe their production and implementation techniques. He found that Linwood, who is
partnered with the Mongolian University of Science and Technology, has model homes that are
guaranteed to last 80 to 100 years.
Linwood has conducted studies specifically targeting the development of the Gandan ger districts.
The company found that one to three families could live in one of the Canadian-developed homes.
The homes were proven to withstand Mongolia's harsh winters and could be used outside of
Ulaanbaatar, too, in places such as Uvurkhangai Aimag.
―It is not only helping each other but also competition for the market,‖ said Enkhbold. ―The
entrance of Canadian companies in Mongolia means the market would expand, whereas the
choosing of Canadian standards among others from throughout the world is one area for
cooperation.‖
Source: Unuudur
GLOBAL X TO LAUNCH CENTRAL ASIA AND MONGOLIA INDEX ETF
NYSE Euronext has announced that two new Global X ETFs would begin trading on Wednesday, 3
April: The Global X Nigeria Index ETF (NGE) and the Global X Central Asia & Mongolia Index ETF.
Both funds will track indexes comprised of 25 stocks drawing from Kazakhstan, Kyrgyzstan,
Tajikistan, Turkmenistan, and Uzbekistan, along with Mongolia.
Source: Barron's
PEABODY-WINSWAY, SOUTHGOBI SUE UMNUGOBI GOVERNMENT
Peabody-Winsway Resources JV and SouthGobi Resources Ltd. have filed suits against the Umnugobi
government for its suspension of mining licenses covering 22,000 hectares of land until 2014.
SouthGobi and Peabody-Winsway saw government protections placed on land licensed to them for
exploration until 2041 and 2014, respectively. The Umnugobi Citizens‘ Representative Council
declared 32,000 hectares of land about 200 kilometers from Dalanzadgad Soum on November 26 last
year under state protection. Prior to that, on 24 December 2010 the council declared 10,000
hectares of land near Ulaan Nuur protected land also.
The companies are now suing Umnugobi's provincial government for MNT 3.6 billion for placing
protections over land they say are in violation of federally granted licenses. They are seeking to
have the locally passed resolution canceled and their licenses recognized. SouthGobi is also
reportedly considering a MNT 40 billion lawsuit, but no official decision has been made.
―Although the resolution was made after the licenses were issued, the land was registered as
protected in 2005. However, they were released from protection in 2007, giving foreigners the
chance to attain it,‖ said a statement from Umnugobi authorities.
The Umnugobi governor‘s office has lost two court cases regarding the matter and is now expecting
another court date before the Supreme Court.
Source: Zuunii Medee
AKICA GROUP HEADS SUED OVER BAD BUSINESS DEAL
Head officials of Akica Group in Mongolia were hit with a suit on Wednesday for allegedly defrauded
the owners of a European communications holding company who partnered with them to invest in
the launch of a Mongolian business.
Andrew Bain and David Stewart, the owners of the Atlantic Group Ltd., said they provided financial
backing for what was supposed to be a surefire business opportunity in Mongolia, but that attorney
Ed Winfrey and his business partner, Michael Plue, lied about securing government licenses and
used the investment money for personal and family expenses. The suit alleges fraud, breach of
fiduciary duty and breach of contract, seeking punitive damages and the return of an initial USD
900,000 stake in the proposed business. Both did work at Akica Group in Mongolia, Winfrey as the
head of overseas development and Plue as chief operations officer.
―Winfrey and Plue represented that, due to Winfrey's contacts with the Mongolian government, the
business could have any project desired from a list of 114 construction and social services
contracts,‖ the suit said. ―The representations were patently false.‖
According to the suit, Stewart and Bain agreed to invest in a company as Plue claimed that
Winfrey's extensive contacts with the Mongolian government would allow them to pick up a plum
government contract that would net the company 50 percent profits on those projects. Winfrey also
allegedly promised the company would earn a steady income from a lottery business in Mongolia.
But Winfrey and Plue falsified financial records showing they had completed work on government
projects and Winfrey falsified the transaction with the Mongolian government to make it appear he
had secured a gaming license that would allow them to operate the lottery, the suit says. Winfrey
allegedly used the money for personal expenses and an unrelated business and made direct
payments to some of his family members. Plue came clean about the misdeeds in October to Bain, a
Colorado native living in Austria, and Stewart, who lives in Scotland, but by then it was too late to
recover their money according to the suit.
Source: Law 360
KHAN RECEIVES UNFAVORABLE DECISION IN ARMZ LITIGATION
The Court of Appeals for Ontario has dismissed Khan Resources Inc.'s USD 300 million lawsuit against
Atomredmetzoloto (ARMZ) JSC.
Khan has pursued the lawsuit on ARMZ since late 2010. After following the necessary procedures in
Russia to serve ARMZ, Khan's attempts at service were stymied when the Russian Ministry of Justice
refused to effect service. The Ministry of Justice cited Article 13 of the Hague Convention that
provides that the state address may refuse to effect service ―only if it deems that compliance
would infringe its sovereignty or security.‖
―We are disappointed by the outcome of the decision,‖ said Khan's president and chief executive
officer, Grant Edey. ―We find it highly regrettable that ARMZ, a business with substantial interests
in Canada, can engage in business with a Canadian company and then be sheltered by its
shareholder, the government of Russia, from being held accountable in a Canadian court for the
wrongdoing and the damages inflicted on Khan and its shareholders.‖
Source: Market Wire
RELOCATION FIRM OPENS UB OFFICE
The Sante Fe Group, a relocation and moving firm, has opened a new office in Ulaanbaatar.
The company has appointed Thomas Morocz as general manager. He has experience in the
relocation industry since 2007, when he first worked in Seoul, Korea.
Source: The Sante Fe Group
UK RENEWABLE ENERGY TRADE MISSION TO MONGOLIA
The Mongolian British Chamber of Commerce is organizing a renewable energy and sustainable
mining trade mission.
―British companies lead the world in many areas of renewable energy, and there are huge business
opportunities in Mongolia,‖ said John Grogan, a trade mission organizer and chairman of the
Mongolian British Chamber of Commerce. He added, ―The trade mission will give companies working
in these fields the opportunity to showcase their technology and knowledge to an eager
marketplace.‖
Glasgow firm Sgurr Energy is already working on the Salkhit wind farm project.
David Scott, Mongolian honorary consul in Ulaanbaatar, has helped organize the trade mission to run
from 2 to 9 June, coinciding with Ulaanbaatar's hosting of the United Nations' World Environment
Day on 5 June.
―Scotland leads the world in many areas of renewable energy and there are huge business
opportunities in Mongolia.‖ The trade mission will give companies working in the fields the
opportunity to showcase their technology and knowledge to an eager marketplace.‖
Source: Herald Scotland, Renewable Energy Focus
SOUTHGOBI HEAD STEPS DOWN FROM ASPIRE BOARD
Aspire Mining Ltd. announced the resignation of non-executive director Ross Tromans from its
board.
Tromans currently acts as president and chief executive officer of SouthGobi Resources Ltd. His
resignation follows the recent announcement of a re-commencement of operations at SouthGobi's
Ovoot Tolgoi mine in Mongolia.
―We fully understand Ross' decision to focus his attention on the performance of SouthGobi
Resources,‖ said Aspire's chairman, David McSweeney.
Source: Aspire Mining Ltd.
WINSWAY APPOINTS NEW CEO
Winsway Coking Coal Holdings Ltd. announced the appointment of Ma Li as executive director
following the resignation of Apolonius Struijk.
Li is a member of the Health and Safety and Environmental Committee. Also appointed was Ng Yuk
Keung and George Hambro as members of the Remuneration Committee and Health and Safety and
Environment Committee.
Source: Winsway Coking Coal Holdings Ltd.
COALTRANS MONGOLIA IN UB ON 25-26 JUNE
The Coaltrans Mongolia conference will be held at the Blue Sky Tower from 25 to 26 June.
Conference highlights include an assessment of elections, descriptions of how groundbreaking
projects are enabling Mongolia to add value to its coal assets, discussions of how regional dynamic
are evolving, and an array of networking opportunities.
Speakers will include Batsuuri Yaichil, chief executive officer of Erdenes Tavan Tolgoi LLC, Graeme
Hancock, president and chief representative of Anglo American Development, and Bayanjargal
Byambasaikhan, chairman of the Business Council of Mongolia.
Source: Coaltrans
RIO STARTS COPPER EXPLORATION IN UZBEKISTAN
The lead mining partner of Oyu Tolgoi, Rio Tinto PLC, has started exploration work for copper in the
Gava area in Uzbekistan's Namangan region.
The exploration work is being carried out by Gava Exploration, a wholly owned subsidiary of Rio
Tinto set up in Uzbekistan. The company has drawn up a work program for 2013 in cooperation with
State Committee of the Republic of Uzbekistan on Geology and Mineral Resources (Goscomgeology),
UzDaily reported.
Rio Tinto received a five-year license to carry out geological studies at Gava in December 2012. The
company announced in October 2011 that it may invest as much as USD 100 million into copper
exploration in Uzbekistan. Speaking at a conference in Tashkent, the company's head of exploration
for Central Asia, Chris Welton, said Rio Tinto may invest up to USD 100 million if the results of
exploration work at Gava are positive.
Around 900 copper deposits have been discovered, but as of 2011 just three were being developed,
all by the Almalyk Mining and Metallurgical Complex, Interfax reported. According to UzDaily, Rio
Tinto is also looking at other opportunities in Uzbekistan's mining sector.
Source: BNE
ANGLO AMERICAN CANCELS $555M MOZAMBIQUE COAL ACQUISITION
Diversified miner Anglo American PLC, who recently opened an office in Ulaanbaatar, will not
proceed with its USD 555 million acquisition of a 58.9 percent stake in the Revuboè metallurgical
coal project in Mozambique.
The global miner announced in July last year that it would buy the stake in the 1.4 billion ton hard
coking and thermal coal project from the Talbot Estate. However the deal had been subject to
various conditions precedent, which had not been satisfied. Anglo American said it would continue
with its objective of establishing a position in the emerging metallurgical coal basin in Mozambique.
Source: Mining Weekly
AREVA CEO SAYS JAPAN MAY RESTART TWO-THIRDS OF NUCLEAR REACTORS
Areva SA, the French maker of nuclear reactors, wants to boost safety-equipment sales as the
company expects Japan to restart two-thirds of its atomic plants that were idled after the 2011
Fukushima accident.
Half a dozen reactors may restart by the end of this year in addition to the two that resumed
operations in 2012, Areva Chief Executive Officer Luc Oursel said. ―I think two-thirds of reactors
will restart,‖ within several years.
Safety authorities are reviewing each site and the work carried out by operators, Oursel said. Areva
expects EUR 200 million (USD 260 million) in orders for safety equipment and services this year, up
from EUR 1500 million in 2012, as nuclear operators worldwide respond to demands for higher
security from regulators, the chief executive said.
Prime Minister Shinzo Abe said he would reopen Japan's reactors, which once supplied about a third
of the country's electricity, even as the approaching second anniversary of the 11 March quake and
subsequent tsunami stir memories of the worst nuclear accident in a quarter of a century. Areva,
which used to supply fuel for Japanese plants before the Fukushima accident, has since sold
equipment that transform hydrogen into water to prevent explosions in case of a severe accident,
Oursel said. Areva and its partner Kobe Steel Ltd. have sold storage casks for spent fuel from the
Fukushima reactors to Tokyo Electric Power Co.
―If the plants restart as we hope, Japan will recoup a significant place‖ in Areva's revenue, Oursel
said.
Source: Bloomberg
ECONOMY
CTU PROPOSES INCREASE IN MINIMUM WAGE
The Confederation of Trade Unions (CTU) is proposing a raise in the minimum wage in Mongolia to
MNT 239,400.
CTU Vice President Kh. Amgalanbaatar appealed to the Ulaanbaatar mayor's office and Mongolian
Employers' Federation for the wage rise. He said that food prices for staples such as bread, meat,
and vegetables had risen by 70 percent and are likely to rise further.
The proposal included 29 other related initiatives that together would help improve employment
and develop the nation's small businesses, said Amgalanbaatar. He added that a campaign for
improved labor safety and hygiene was scheduled to begin 1 May.
Source: Unuudur
TT POWER PLANT TO GET GREATER POWER OUTPUT CAPACITY
Mongolia will increase the size of a planned thermal power plant in the Gobi desert by 50 percent
to meet the needs of its biggest project, the Oyu Tolgoi copper and gold mine.
The Tavan Tolgoi power station will generate 450 megawatts, compared with an earlier capacity of
300 megawatts, Minister of Energy Mishig Sonompil said in a phone interview today. The plan was
approved by the government at a meeting on 30 March. The generator will run on fuel from the
Tavan Tolgoi coking coal deposit, which has 6.4 billion metric tons of reserves.
Mongolia will fund 30 percent of the power station through its USD 1.5 billion Chinggis bond. The
rest will come from private investors and loans. Mongolia will own at least 34 percent of the plant,
according to a 30 March statement.
Former Prime Minister Mendsaikhan Enkhsaikhan was appointed head of the power plant.
Source: BusinessWeek
HIGHWAYS TO LINK RUSSIAN AND CHINA BORDERS
The Mongolian government is planning to build a USD 3.5 billion cross-country highway stretching
from its border with Russia to Zamyn-Uud on the Chinese frontier.
The 628-mile long highway is expected to be completed by late 2015 and will see foreign investors
provide up to 70 percent of the initial funding while a Mongolian investment group called
Chinggisland Development will bear the remainder.
Construction of the road will start in May and will see North American and Italian companies
involved in the project, the agency reported, without identifying specific firms. Meanwhile the
Mongolian government is also seeking a non-state partner to build a 160-mile railway from the
Tavan Tolgoi coal field to the Chinese border. The government has accepted bids from 20
companies, including 14 from overseas, and the partners will take a 49 percent stake in the project.
Prime Minister Norov Altankhuyag said that more than one bidder may be chosen, raising the
possibility of a joint venture. The state-controlled Development Bank of Mongolia LLC will also
contribute USD 200 million to the project, Altankhuyag said.
Source: Economy Watch
JICA LEADS PROJECT FOR NEW UB BRIDGE
The Japan International Cooperation Agency has completed its pre-feasibility study of the Ajilchin
bridge connecting the Narny street with the Gurvaljingin bridge.
The 828-meter extension would bring the bridge to a total length of 2,265 meters, three times
larger than the Narny bridge completed last fall.
The new bridge will be made from steel and concrete and is expected to reduce traffic congestion
by 30 percent. The government is expected to reveal the investors and construction company of the
project after it has fully discussed the proposal. Prime Minister Shinzo Abe spoke of interest in
supporting this project.
Source: Unuudur
GOVERNMENT TO RELOCATE TANNERY PLANTS NOW IN UB
Government authorities are ordering the closure of tanneries in Ulaanbaatar by 2017 to make room
for new areas for settlement.
The Ministry of Industry and Agriculture invited inspectors to visit leather processing factories in
Ulaanbaatar. The investigative team wrote a follow-up report that recommended plants and
factories be located in a single central location as opposed to the haphazard placement the city
now has.
The government ordered feasibility studies for the removal of the tanneries to be drawn up for
relocation in Emeelt. The government, however, is taking proper measures to prevent the spread of
animal disease from western provinces in the process.
Source: News.mn
MNT 95 BILLION OF CHINGGIS BONDS TO GO TO CASHMERE SECTOR
The Cabinet of Ministries has given approval to spend MNT 95 billion from last year's USD 1.5 billion
Chinggis bond toward introducing improved facilities in the cashmere industry.
The ministry of economic development received approval to fund a plan for modern processing
machinery to cashmere producers in 2013 for value-added production. The initiative would cut raw-
material exports, instead replacing them with the finished goods, and create 20,000 new jobs. The
proposal also projects the creation of 200 textile factories throughout the country.
In 2012, 40 percent of the 3,000 tons of raw cashmere was processed into finished goods by
domestic producers. Another 40 percent was most likely shipped to China for manufacturing. The
government has previously issued a resolution to support cashmere processing with soft loans for
herders and manufacturers. The government hopes to establish a strong supply chain, developing
the cashmere sector from the bottom up.
Source: Business Mongolia
MONGOL BANK HOLDS FOREIGN-EXCHANGE AUCTION
The Bank of Mongolia has refused bids from commercial banks of USD 47.3 million and CNY 107
million placed on 28 March.
The Central Bank received tugrik swap agreement offers worth USD 87 million from Mongolia's
domestic commercial banks and sold USD 75 million through the swap agreement. Swaps obligate
banks to deliver dollars back to the Central Bank by a specific date and at a specific exchange rate.
The bank holds the auction on Tuesdays and Thursdays for domestic commercial banks. The
auctions are a tool of the bank to stabilize the foreign exchange rate for the Mongolian tugrik.
Source: Bank of Mongolia
METRO PLANNERS TO UNDERTAKE FEASIBILITY STUDY FOR SUBWAY PROJECT
Ulaanbaatar city authorities have ordered a feasibility study for a new metro subway station
targeting completion in 2020.
The Japan International Cooperation Agency (JICA) will draw up a feasibility study for the public
transportation project following the approval of a pre-feasibility study. The pre-feasibility report
projects Ulaanbaatar's population to grow to 1.7 million by 2030, increasing demand of roads and
transportation threefold. The project also expects to cut pollution from auto emissions by 30
percent while reducing accidents on the road.
According to the pre-feasibility study, travel would cost from MNT 500 to MNT 600 per ride and
would reduce travel time by 30 minutes.
Project planners are targeting project development to begin in 2014, with construction to begin in
2016 and completion in 2020. The plans are for a 17.7 kilometer track underground running east to
west along Peace Avenue. Another line will run 6.6 kilometers from north to south from Baruun 4
Road to Zuun 4 Road. JICA has projected a total cost of USD 1.5 billion. JICA and other international
organization would provide USD 600 million while the Mongolian government would cover USD 700
million for the project.
Source: News.mn
REAL ESTATE MARKET UPDATE - Q2 2013
As spring arrives in Mongolia, so does the normally busy construction season. However, this year
cranes stand still and construction sites are deserted.
The government initially canceled all construction licenses to verify their legality. A considerable
number of construction projects already underway were canceled and future developments were
put in jeopardy, as the government is actively seizing land that has been owned for two years, but
was not developed by the owner. The city has also warned about the impending collapse of the
public utilities sector for the 2013-2014 winter, the lack of drinkable water to supply the city and
the constant delays in the start of construction for the essential new power plant.
There is considerable amounts of ―grade A‖ ―and grade B‖ office supply coming online in the next
two months, but investors' uncertainty in Mongolia means most large-scale hotel projects are facing
cancellations or delays. Uncertainty within the real estate industry is expected until the
presidential elections are over.
While the approval for construction of a new metro system is laudable, it is unrealistic. Ulaanbaatar
lacks the space to build exit and entry points, the city has no idea where the pipes lay underneath
the ground and it does not have the expertise to undertake such a large-scale project, let alone the
machinery. Almaty, Kazakhstan took 23 years to build a single metro line of 8.5 kilometers for USD
11 billion compared with government expectations to build 50 kilometers for USD 1.5 billion in four
years.
But one saving grace for construction companies may come from the city's renewed desire to re-
develop the ger districts. If those various projects do go ahead, they will provide construction work
of a considerable scale for a number of years. This is of course dependent on the government
managing the re-development carefully and learning from the lessons of the failures of the 100,000
homes project.
2013 is not all doom and gloom. Such market corrections are essential and a slowdown in Mongolia's
real estate sector could be beneficial. It should be of particular interest to investors looking to
make a fundamental play on the market.
Source: M.A.D. Investment Solutions
ONGOING MINING DISPUTES HURT GROWTH
It has proven difficult for the government to convince interested parties that disputes reported in
the media are not indicative of a deeper conflict building between the present leadership and the
foreign firms that are extracting minerals.
In March government officials said a disagreement with multinational firm Rio Tinto PLC on key
points related to costs overruns, the feasibility study for phase two of the Oyu Tolgoi copper-gold
mine and the employment of Mongolian workers would not delay the start of production, expected
in June.
―The Mongolian government and the investor both [want to] highlight the importance of production
starting on time,‖ Dorjsuren Javkhlanbold, a senior official at the ministry of mining, told Reuters.
Ulaanbaatar also announced in March that it will ease limits on foreign investment, specifically
concerning the MNT 100 billion threshold for deals involving the transfer of more than 49 percent of
a Mongolian company to a foreign group be referred to parliament for approval, Luvsanvandan Bold,
the minister of foreign affairs, said that figure would be raised to MNT 1 trillion.
Meanwhile the coal sector has also fallen victim to a dispute between the government and mining
firms. Aluminum Corp. of China Ltd. (Chalco) said in January that it would seek legal redress if the
Mongolian government followed through with a decision to try to alter an agreement signed in 2011.
State-owned Erdenes Tavan Tolgoi LLC, the mining unit operating at the mine, wanted to
renegotiate the deal with Chalco. The agreement had Chalco lend Erdenes TT some USD 350
million, which the Mongolian company would then repay with coal from Tavan Tolgoi.
―There is a significant need for techno-economic based capacity building and associated technology
awareness training to be provided, covering the efficiency and environmental impacts of clean coal
and alternative technologies,‖ Andrew Minchiner, the principle associate at the IEA Clean Coal
Center, wrote in March 2013. ―This is necessary both to assist the nation in its near-term
development plans and also to build up the national capacity from a longer-term sustainable
perspective.
Source: Oxford Business Group
MONGOLIA NEEDS SCHOOLS AND HOSPITALS: WHY TALK ABOUT SAVINGS?
Mongolia's mining revenues are set to soar in the coming years, but here people talk about the need
to save for the future. To prevent boom-bust cycles, saving some of the revenues in good times is
part of effective natural resources management.
―If natural resource booms are well managed they can be a blessing,‖ said Eric Parrado, former
head of Chile's Economic and Social Stabilization Fund, adding, ―an important general lesson is that
governments should avoid temptation to spend significant temporary surpluses.‖
There are four challenges Mongolia will surely have to face. The first is natural resource revenues
are volatile and uncertain. They are also exhaustible, so the benefits must be made to last by
transferring some (and not all) for future generations. The export of commodities such as coal and
copper will have direct implications to the domestic economy to sectors other than mining. Finally,
the country will have to keep corruption in check as mineral wealth often is tempting for officials
looking to climb to the top.
In good years government should run a fiscal surplus for savings. That saved money can be used in
the tough years preventing cuts to important areas of expenditure such as education, health and
infrastructure while reducing the need to borrow and incur interest costs. Mongolia has a
stabilization account and a Fiscal Stability Law limiting budget deficits, but improvements are
needed. In 2012 and 2013 the government bypassed the stability law and procedures by spending
off-budget.
Chile is joined by Norway, Timor-Leste, Botswana, Trinidad and others in utilizing savings for
success in natural resource management. No story is perfect and in each instance policy makers
muddled through, enhancing the design of their savings instruments and improving institutions in an
iterative and incremental manager. Short-term and unsustainable gains versus medium-to long-term
sustainable benefits are optimal, but it is up to Mongolians to decide on the trade-off: which way is
best for Mongolia?
Source: World Bank Blogs
LIQUID ECONOMICS
As Mongolia continues to strive toward the manufacturing of finished goods, it will have to consider
proper water management for its pursuit of green development
Water in Mongolia means sustenance for its people, grass for its grazing herds, and a key ingredient
for a variety production processes. Mongolia's cannot develop a brand, as it set out to do in the
Mongolian Economic Forum, without its livestock.
To give some perspective into how much water is consumed during production, one study shows
that production of just a single pair of jeans requires 11,000 liters of water. According to G.
Dolgorsuren of the Tuul River Basin Administration, international organizations operating in Asia say
Mongolia has the largest water footprint—the representation of water consumed by a nation. It is
also third in the world for its size of its water footprint.
One concern for many in Mongolia is the management of the Tuul River, a key source of water for
Ulaanbaatar and the source of water of the area responsible for 60 to 70 percent of Mongolia's gross
domestic product (GDP). The State Inspection Agency found in 2011 that the river met the fifth tier
of pollution criteria. The River Basin Organization was established by the Ministry of Environment to
help identify who is polluting the country's water sources, but it has had difficulty enforcing its
regulations and collecting on the fine it administers.
―It is important that large organizations such as those for mining use water efficiently. They should
reuse their water,‖ said G. Munkh-Erdem, director of watering and coordination at the
environmental ministry.
As the city continues to develop, it will face increasing difficulty in this area. However, if the
government can implement plans such as those for the development of Ulaanbaatar's ger districts it
will be able to improve efficiency. Another challenge will be instilling good habits for water
management in households, as those who live in apartments consume between 100 and 120 liters of
water compared with eight to nine liters for ger-dwelling households. With about 60 percent of
Ulaanbaatar's population living in gers, the increased consumption could be drastic.
Source: Mongolian Economy
AIR POLLUTION LINKED TO 1.2 MILLION PREMATURE DEATHS IN CHINA
Outdoor air pollution contributed to 1.2 million premature deaths in China in 2010, nearly 40
percent of the global total, according to a new summary of data from a scientific study on leading
causes of death worldwide. This occurs just as Mongolia is grappling with its own battle with air
pollution.
Figured another way, the researchers said, China's toll from pollution was the loss of 25 million
healthy years of life from the population. The data on which the analysis is based was first
presented in the ambitious 2010 Global Burden of Disease Study, which was published in December
in the Lancet, a British medical journal.
―We have been rolling out the India-and China-specific numbers, as they speak more directly to
national leaders than regional numbers,‖ said Robert O'Keefe, the vice president of the Health
Effect Institute, a research organization that is helping to present the study. The organization is
partly financed by the United States Environmental Protection Agency and the global motor vehicle
industry. What the researchers called ―ambient particulate matter pollution‖ was the fourth-
leading risk factor for deaths in China in 2010, behind dietary risks, high blood pressure, and
smoking. Air pollution ranked seventh on the worldwide list of risk factors, contributing to 3.2
million deaths in 2010.
Calculations of premature deaths because of outdoor air pollution are politically threatening in the
eyes of some Chinese officials. According to news reports, Chinese officials cut out sections of a
2007 report called ―Cost of Pollution in China‖ that discussed premature deaths. The report's
authors had concluded that 350,000 to 400,000 people die prematurely in China each year because
of outdoor air pollution.
There has been growing outrage in Chinese cities over what many say are untenable levels of air
pollution. Cities across the north hit record levels in January, and official Chinese newspapers ran
front-page articles on the surge—what some foreigners call the ―airpocalypse‖—despite earlier
limits on such discussion by propaganda officials.
Source: New York Times
POLITICS
DEPUTY SPEAKER EXPECTED TO RESIGN AFTER REVELATION OF SECRET OFF-SHORE ACCOUNT
Millions of internal records have leaked from Britain's offshore financial industry, exposing for the
first time the identities of thousands of holders of anonymous wealth from around the world,
including MP Sangajav Bayartsogt.
The leak of two million emails and other documents, mainly from the offshore haven of the British
Virgin Islands (BVI), has the potential to cause a seismic shock worldwide to the booming offshore
trade, with a former chief economist at McKinsey estimating that wealthy individuals may have as
much as USD 32 trillion stashed in overseas havens.
The former finance minister and Parliament's current deputy speaker, Bayartsogt, said he may have
to resign from politics as a result of this investigation.
"I shouldn't have opened that account. I should have included the company in my declarations," said
Bayartsogt. "I don't worry about my reputation. I worry about my family. I probably should consider
resigning from my position."
Bayartsogt said his account at one point contained more than USD 1 million.
Source: Business Insider, The Guardian
MPP ELECTORAL WINS APPROVED BY SUPREME COURT
The Uvs parliamentary candidates accused of lawful campaigning have had their elections approved
and will be able to participate in Parliament.
The issue was first initiated when the Democratic Party (DP) and 13 citizens from Tarialan Soum of
the 15th electoral district accused two Mongolian People's Party candidates, Ch. Khurelbaatar and
B. Choijilsuren, of violating the election law, which should have disqualified their candidacy. An Uvs
court decided on 11 November that their wins in the election were invalid and disqualified them
from acting in Parliament. An appellate court overturned that ruling on 17 January, and then, on 1
April, an administrative legal branch of the Supreme Court ruled in favor of their electoral wins.
Source: Udriin Sonin
SPRING SESSION BEGINS WITH INCOMPLETE PARLIAMENT
The first year anniversary of the current parliament is fast approaching. However two seats remain
vacant due to ongoing disputes.
Disputes arose over the Uvurkhangai Aimag and Songinokhairkhan District seats due to conflicts with
the new election law passed before last year's parliamentary election. In Songinokhairkhan, where
three seats represent the district, one of the seats was unable to secure the 28 percent vote
threshold required in order to be elected, so a new election is expected. In Uvurkhangai the
election campaigns of two winners from the Mongolian People's Party were questioned due to
accusations of employing minors for campaigning purposes. The accusations were proven and the
candidates were found guilty by a local court and the General Election Committee in October.
The resultant decision for the Uvurkhangai seat was that the second-place winners, candidates from
the Democratic Party (DP), should be sworn in, however, one candidate, Zorigt, has yet to be sworn
in. Another election between the MPP and DP candidates will take place. The local election
committee has proposed that the run-off election take place during the presidential election.
If these loose ends are taken care of, Parliament could become complete by June. But there is also
cases pending in Uvs Aimag, where the election MPP members were found guilty of unlawful
campaign practices by two levels of district courts. The Independent Agency Against Corruption
(IAAC) is also investigating MPP caucus members Khayankhyarvaa and Sodbileg.
Currently the DP has 33 seats, the MPP has 25 seats, the Justice Coalition has 11, the Civil Will-
Green Party has two, and there are three independents, bringing the total to 74 MPs. If the
pending court decisions on re-elections are won by the DP, it could move up to 37 seats. While this
could increase their voice, it would still be two seats short of a majority.
Source: Mongolian Investment Banking Group
2013 SPRING SESSION AGENDA RELEASED
Parliament announced its agenda for the spring 2013 session.
The agenda includes 18 issues for discussion. The first is the presidential election date and its
financing scheme. Behind that is the amendment to the Strategic Entities Foreign Investment Law
(SEFIL) and the latest revision of the Securities Market Law. Other laws needing consideration are
the citizens' health insurance bill, a bill concerning the transfer of shares from Erdenes Mongol LLC
to Bayanmongol and the Human Development Fund, a state service bill, and revisions to the draft
Law on Lands.
The agenda included some analytical and forward-looking budgetary initiatives, including a financial
report on the 2012 budget, a proposed resolution for a program for investment for the 2014-2016
budgets, and an initial plan for the 2015-2016 budget. Time will also be made for the
implementation of Parliament's 2012 ―socio-economic priorities‖ and ―socio-economic main
directives‖ for 2014.
Regarding infrastructure, this session's agenda includes matters related to the development of
Ulaanbaatar's ger districts.
Source: Cover Mongolia
GANBAATAR TO FILE SUIT AGAINST RIO TINTO IN HAGUE COURT
MP Sainkhuu Ganbaatar announced at a press conference on 2 April his intention to sue Rio Tinto
PLC in the International Court of Justice in Hague.
Ganbaatar said his cased is based on Resolution 1803 of the United Nations, which guarantees the
sovereignty of countries developing their economies through mineral extraction. The resolution,
established in 1962, states that the natural resources of a country belongs to the people, not to any
single company
―ICJ has jurisdiction over the enforcement of this resolution,‖ said Ganbaatar. ―Therefore we are to
submit a claim to the ICJ. We will also deliver a notice to the secretary general of the United
Nations.‖
He also added the Rio Tinto's operations greatly threaten the water supply of the Gobi desert.
Research by Mongolia's water experts found that 35.4 million milliliters is to be consumed by Oyu
Tolgoi's processing plants in a year, which Ganbaatar says breaches the limits of the Gobi's inferred
water resources. Oyu Tolgoi is permitted consumption of 27.4 million milliliters, said Ganbaatar.
Source: News.mn
MINING MINISTER CONTINUES PUSH FOR CHANGES TO OT INVESTMENT AGREEMENT
Mining Minister Davaajav Gankhuyag has issued a decree to amend the Oyu Tolgoi investment
agreement.
―The decree says, based on the discussion with investors, changes have to be made to the
agreement,‖ said Gankhuyag. ―In my opinion, this agreement is not a good one.‖
The minister said the issue of taxes should be considered first. All parties have agreed to work
towards greater transparency in investment expenses to identify where greater-than-expected costs
may have originated. He claimed that development had exceeded the costs stated in the original
play by USD 80 million.
The Minister added that all these factors have made it obligatory that the government implement
his decree.
Source: Zuunii Medee
BILL TO RESTRICT CERTAIN USES OF CHINGGIS KHAN‟S NAME AND IMAGE
MPs D. Ganbat and G. Bayarsaikhan submitted a draft law on 28 March that puts restrictions on the
use of Chinggis Khan's name and image.
―The possibility of using Chinggis Khan's name and portrait is open, but commercial products and
packages that use the great conqueror's name and image are popularly seen in streets as trash,‖
said a statement from the MPs. ―Therefore, we need to initiate a draft law to try for proper use of
the name, limit commercial use, and hold it as a form of national pride for Mongolia.‖
The bill is made up of three articles and 12 acts outlining the use of Chinggis' name and image.
Source: News.mn
JAPANESE PREMIER MOVES TO BOOST TIES WITH MONGOLIA
Japanese Premier Shinzo Abe moved to boost ties with another Chinese neighbor last weekend,
visiting Mongolia where he offered increased foreign aid and referred to the countries' ―shared
democratic values.‖
It was the first visit to Mongolia by a Japanese prime minister in seven years. The trip underscored
the two priorities of the foreign policy that Abe and his center-right government have pursued since
winning power in December: gaining access to natural resources, and building alliances to counter
the rising regional clout of China. Abe drew criticism from some in China in January during his first
trip abroad as leader—to Vietnam, Thailand and Indonesia—for laying out a vision for a coalition of
Asian democracies that would cooperate in what appeared to be unspoken but obvious opposition to
China.
Abe persisted with similar language in Mongolia. In an opinion piece published in a Mongolian
newspaper, he called the two countries ―partners with shared values of freedom and democracy.‖
In an allusion to territorial disputes involving China—including Japan's stand-off with it over the
ownership of the Senkaku Islands in the East China Sea—as well as militant signals from North Korea,
he added that international problems ―should be solved by peaceful means and not by force.‖ In
meetings with Mongolian President Tsakhia Elbegdorj and Prime Minister Norov Altankhuyag, Abe
agreed to provide JPY 4.2 billion (USD 45 million) in low-interest loans to fit coal-fired electric
power plants in Mongolia with pollution-reducing technology.
Japan is already Mongolia's biggest foreign-aid donor and is negotiating a trade agreement with the
country. The government of Mongolia, a landlocked country sandwiched between China and Russia,
has been focusing on developing closer ties with countries such as Japan and the United States to
help counterbalance occasionally strained ties with Moscow and Beijing. A big target for Japan is
the Tavan Tolgoi coal deposit. Japan's demand for fossil fuels has jumped since the March 2011
Fukushima disaster all but shut down its nuclear-power sector. Abe urged Mongolian leaders to
consider allowing Japanese trading companies and other groups to participate in developing the
field.
Source: Financial Times
FOURTH INDIA-MONGOLIA COOPERATION MEETING HELD IN DELHI
Education and Science Minister L. Gantumur met with India's minister of state for external affairs at
a India-Mongolia Join Committee meeting in Delhi.
The meeting with Gantumur and Minister E. Ahamed covered a broad range of issues related to
India-Mongolia relations. Indian companies are interested in playing a larger role in Mongolia's
mineral processing and extraction activities and have requested attention brought to creating a
favorable environment for them to open operations in Mongolia. Ahmed also said there was interest
in establishing a milk processing plant in Mongolia.
Ahamed noted India's continued support of Mongolia's development and reaffirmed their intention
to renovate the Rajiv Gandhi Polytechnic College of Production and Art in Ulaanbaatar. India is also
looking to loan USD 20 million for an India-Mongolia Joint Information Technology Education and
Outsourcing center in Ulaanbaatar.
Also discussed were diplomatic matters including the continuation of joint military exercises, the
proposed visit of an Indian business delegation to Mongolia this summer, the possibility of launching
air services between India and Mongolia and the establishment of an India-Mongolia Joint School.
Next year's Joint Committee on Cooperation meeting is expected to be held in Mongolia.
Source: World Bulletin
MONGOLIA TO EASE VISA PROCESS FOR TURKISH CITIZENS
Turkish Deputy Prime Minister Bulent Arinc and Mongolian Defense Minister Dashdemberal Bat-
Erdene said they were expecting to begin talks on dropping visa requirements for Turkish citizens
traveling to Mongolia.
The officials made their announcement during a signing ceremony for the Turkey-Mongolia Joint
Economic Commission Seventh Term Meeting memorandum in Ankara, Turkey's capital. Arinc said
that after talks were finished Turkish citizens would be able to travel to Mongolia more frequently.
Bat-Erdene said the memorandum they signed demonstrated the will of the two countries to boost
cooperation.
Source: World Bulletin
ELBEGDORJ CALLS FOR SUPPORT TO “REINDEER PEOPLE” CULTURE
President Tsakhia Elbegdorj issued a decree for the protection of the livelihood and identity of
Mongolia's Tsaatan ethnic group, the country's smallest, on 2 April.
The decree for the group commonly referred to as Mongolia's ―reindeer people‖ was the first time
the president spoke out for the protection and support of an ethnic group in Mongolia. The
president has initiated monthly allowances to all Tsaatan children up to age 18 and a Tsaatan
language program for them to study in school. The president also asked that the government
provide employment for Tsaatan people and purchase for them first-rate reindeer to improve the
quality of their herds.
Government statistics show that Mongolia has 500 to 670 Tsaatan living in Khuvsgul Aimag. The
livelihood of most is based on herding about 1,500 reindeer in total in the deep forest.
Source: News.mn
ANNOUNCEMENT
FOREIGN INVESTMENT IN MONGOLIA CONFERENCE, APRIL 19, UB
BCM and UB Risk Management Consulting (headed by Dr. Khashchuluun, former Chair of NDIC) are
organizing a "Foreign Investment in Mongolia: Challenges, Risks and Solutions" conference on April
19, 2013 at the Kempinski Hotel.
As we know, Mongolian economy has been rapidly growing with 17.5% in 2012 and 12.3% growth in
2013. During 2010-2012, foreign investment in Mongolia increased at a rapid speed, contributing
significantly to economic growth, creating more jobs and financing various projects in the country.
However, the OT copper gold project, long a cornerstone of Mongolia‘s increased FDI, is almost
completed. The timing of other potentially large FDI projects such as PPP power stations and the TT
project are not clear. The result could be that inflows into Mongolia may not grow as much as in
previous years.
Speakers include:
- S. Bold, Chief Economist, Central Bank
- S. Javkhlanbaatar, Foreign Investment Regulations and Registration Department Head, Ministry of
Economic – Development of Mongolia
- B. Amarsanaa, Academic Secretary of National Legal Institute
- D. Gan-Ochir, Head of Financial Stability Council, Advisor to President of Central Bank
- D. Achit-Erdene, CEO, MICC
Attached is the Agenda of the event. FREE registration, please contact [email protected],
317027.
___________________________________________
NEW YORK INTERNATIONAL FRANCHISE EXPO, June 20 – 22, New York City, USA
The Business Council of Mongolia in collaboration with the U.S. Embassy‘s Commercial Section is
now registering a Mongolian business delegation to participate in ―NEW YORK INTERNATIONAL
FRANCHISE EXPO‖ which will be organized in New York City, USA at Jacob K. Javits Convention
Center, from June 20 to 22, 2013.
Join thousands of entrepreneurs and business owners at the International Franchise Expo, the
largest franchise expo in the country. Meet hundreds of proven franchise opportunities. Every
industry. Every investment level. Full-time and part-time.
Benefits will be:
• Meet over 400 of the top franchises.
• Take advantage of 70 free Seminars and in-depth Symposia.
• Get the help you need in deciding which franchise is right for you.
• Find out what you need to know as a new franchisee.
• Discover industries that are new, or that you might not have considered.
• Get advice on the wide range of financial options from experts.
• Talk face-to-face with hundreds of the best franchise opportunities expanding in our area!
Please contact 317027, 99131377 or [email protected] for registration or for additional
information. Registration deadline is 6:00PM, April 19, 2013.
___________________________________________
MONGOLIA INVESTMENT SUMMIT 2013, APRIL 16-18, LONDON
Business Council of Mongolia members are invited to attend the Mongolia Investment Summit
London 2013 and receive a 15 percent discount on their registration fee.
Mongolia Investment Summit London has over 200 delegates registered to attend in April. With
significant amounts of investment in Mongolia traditionally coming from Asia there are new
opportunities to be explored in the Western Hemisphere. Investor interest is high from the west and
fund managers, private investors and financiers want to gain exposure to Mongolian growth.
Mongolia Investment Summit London in April will provide an important opportunity to meet these
investors, raise the profile of Mongolia and promote your business.
The event provides an excellent opportunity to meet with major investors, mining groups,
government officials and real estate specialists to identify new business partners. At the event, the
views on the country will be discussed by investors from companies such as Barclays Natural
Resource Investments, HSBC Global Asset Management, Collabrium Capital and more. The event
provides an opportunity not to be missed.
Enter the discount code ―Business-Council-Mongolia-Special‖ when you register to receive the early
bird discount plus an additional 15 percent off.
___________________________________________
3RD RISK MANAGEMENT FORUM, 1 MAY, ULAANBAATAR
The 3rd Risk Management Forum of Mongolia will be held on 1 May 2013 in Ulaanbaatar at the Blue
Sky Tower.
This is the largest risk event in Mongolia, co-organized by the Business Council of Mongolia and
Mandal General Insurance. The Risk Forum will provide the most comprehensive overview of risks
that Mongolia faces today and the status of risk management all under one roof. Risk management
techniques and tools will be shared and best practices promoted across industries.
Last year, the event had attracted over 250 representatives of Mongolia's top corporations and
government agencies and resulted in the formation of Risk Institute of Mongolia. This year, the
expert speakers will be address topics concerning Macro Risks, Business Risks, and Community Risks.
For more information, visit RiskForum.mn.
___________________________________________
2nd MONGOLIA TRADE & COMMODITY FINANCE CONFERENCE, 14 MAY, ULAANBAATAR
Exporta's second Mongolia Trade & Commodity Finance Conference will be held at the Chinggis Khan
Hotel in Ulaanbaatar on 14 May. The Business Council of Mongolia (BCM) is acting as an institutional
partner for the event and has negotiated a 15 percent discount for its members to attend.
The Mongolia Trade & Commodity Finance Conference is the only specifically organized event for
the Mongolian trade and commodity finance community. It provides an unrivaled platform for
discussion and networking for leading local businesses and institutions, as well as those
international practitioners looking to tap into the huge potential of this rapidly developing market.
Speakers include Chuluunbat Orchirbat, Vice Minister of the Ministry of Economic Development,
Battsengel Gotov, Chief Executive Officer of Mongolian Mining Corp., and Jim Dwyer, Executive
Director of BCM.
To receive the discount quote BCM15 when booking. Click here for more information and booking.
___________________________________________
MONGOLIA ENERGY AND INFRASTRUCTURE SUMMIT, 15-16 MAY, ULAANBAATAR
Business Council of Mongolia members are invited to attend the Mongolia Energy and Infrastructure
Summit and receive a 15 percent discount on registration fees.
On the 15th and 16th May 2013, the Mongolia Energy and Infrastructure Summit will bring together
independent power providers, asset management firms, local and international banks, law firms,
and government officials to discuss the business opportunities and challenges facing the Mongolian
energy and infrastructure sector.
Key coverage includes:
- Renewable energy and the future of clean energy in Mongolia
- Infrastructure needs for the mining industry
- Insurance and political risk considerations for investors and developers
- Power and infrastructure projects for Ulaanbaatar‘s urbanization
- Financing challenges and the role of ECAs and multilaterals
For more information, please visit the event website: www.euromoneyseminars.com/MEI13
Enter the discount code ―MEI_BCM‖ when you register online to receive 15 percent off.
___________________________________________
COAL PROCESSING & MINING TECHNOLOGY EXPO, 4-5 JUNE, ULAANBAATAR
The Coal Processing & Mining Technology Expo will be held in Ulaanbaatar from 4 to 5 June 2013.
The expo is co-located with the Transportation & Logistics Expo, and because of this co-location you
will be able to meet with a more diverse and broader group of attendees. With many international
as well as local Mongolian companies already signed up to exhibit, you will be a part of what is
becoming the premier event for the mining and transportation industries serving Mongolia.
BCM members will receive a special 10 percent discount. To register and receive your discount
email Saruul at [email protected]. For more information about the exhibition, contact Glenn
Scott [email protected] or visit the website coalexpomongolia.com.
___________________________________________
FUTURE MONGOLIA, 19-22 JUNE, ULAANBAATAR
The Future Mongolia international trade fair will be held at the Buyant Ukhaa Sport Palace in
Ulaanbaatar, near the Chinggis Khaan International Airport, from 19 to 22 June, 2013.
After the successful premier with nearly 100 exhibitors from 14 nations and some 4,200 visitors, we
cordially invite you to the second Future Mongolia. This international trade fair offers the
opportunity on an enlarged exhibition space to present modern and sustainable solutions and
responses to the present needs of Mongolia and its population.
For more information, visit Future-Mongolia.com.
___________________________________________
“MM TODAY” on MNB-TV, Friday, 18:50-19:00
BCM is pleased to announce that Mongolian National Broadcasting continues its cooperation with
BCM on ―MM Today‖. This English news program is aired every Friday for 10 minutes and is
scheduled from 18:50 to 19:00 tonight. Tune in to watch this program that reports stories from
today‘s BCM NewsWire.
___________________________________________
BCM‟S MINING SUPPLY CHAIN DATABASE
The new version of BCM‘s Mining Supply Chain Database is in use. Following the initiative of Oyu
Tolgoi LLC, the BCM has maintained the Mining Supply Chain Database since March 2009. It is an
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.
As of December 31, suppliers registered on the database totaled 1,405. During 2012, 251 new
supplier entities joined the Database and 236 prior supplier registrants updated their company
profiles. In addition, 22 buyers were also registered and 82 tender announcements were posted.
We are inviting all Mongolian mining suppliers and buyer companies to join the Mining Supply Chain
Database. Please visit here for registration—FREE!
If you have any questions regarding the database, please contact Undral at [email protected]
or 317027.
BCM WEBSITES
MONGOLIAN WEBSITE „PRESENTATIONS‟ AND „NEWS‟ SECTIONS
The ‗Presentations‘ section on BCM‘s Mongolian website can be reached via bcm.mn/itgeluud.
As a key component of BCM‘s Mongolian website, articles from the ‗News‘ section and the
government website Open-Government.mn are regularly updated.
___________________________________________
ENGLISH WEBSITE: 'PRESENTATIONS', 'MONGOLIA REPORTS', „MONGOLIAN BUSINESS NEWS‟,
„PHOTO GALLERY‟
On BCM‘s English website, the ―Resources‖ and ―Presentations‖ sections are available. Recently
added from BCM‘s monthly meeting on March 25:
• Ruth Pulaski, Director Marketing & Development, American University of Mongolia – ―American
University of Mongolia: Integrating a Liberal Education Approach to Learning‖ at the BCM monthly
meeting, March 25, 2013
• B. Bayar, Managing Director, ELC LLC – ―Update on Legal Developments Regarding Foreign
Investment‖ at the BCM monthly meeting, March 25, 2013
• Tony Burchill, Australian Consul-General & Trade Commissioner, Austrade – ―The Business of Being
a Third Neighbour‖ at the BCM monthly meeting, March 25, 2013
Other recently added presentations:
• Dr. .Brian Fisher, Managing Director, BAEconomics, "Economic Impact of draft Minerals Law" at the
Kempinski Hotel, March 18, 2013, Ulaanbaatar
• Dr. Ch. Khashchuluun, CEO of UBRM Consulting, Mongolia and Mining, The policy evolution: What's
next? at the Kempinski Hotel, March 18, 2013, Ulaanbaatar
• Martin Pow, Partner, Enterprise Risk Services and Learning Leader, Deloitte Onch LLC, Black
Swans: Fact or Fiction, A different risk management philosophy at the BCM Risk Management
Working Group meeting, March 14, 2013
The following 3 presentations were added from Coal Mongolia, 21-22 February:
―Current state of coal sector of Mongolia and future trends‖ by Minister of Mining D. Gankhuyag at
the Coal Mongolia 2013, Feb 21, SS Convention Center, Ulaanbaatar;
―Economic Reform Objectives‖ by Vice Minister, Economic Development, H.E. Mr. O. Chuluunbat at
the Coal Mongolia 2013, Feb 21, SS Convention center, Ulaanbaatar;
―Presentation for Coal Mongolia 2013‖, Norihiko Kato, CEO of Khan Bank, Feb 21 at the SS
Convention Center, Ulaanbaatar, Mongolia.
Presentation by Bold Baatar, CEO of Altan Dornod Mongol, ―Mongolian Mining Investment
Environment‖ at the Mining Industry Open Discussion, February 1, 2013, at Kempinski Khan Palace
Hotel.
Please note the presentations from each of the BCM monthly meetings. Please also note 25
presentations from the Mongolian Investment Summit 2012 on 30-31 October in Hong Kong; and 9
presentations from Discover Mongolia 2012.
The ―Mongolia Reports‖ section includes ―Highlights of 2012, Mongolia‖ by European Bank for
Reconstruction and Development (EBRD); the ―Official statement of Oyu Tolgoi LLC in relation to
information, data and facts related to Oyu Tolgoi discussed during open session of the State Great
Khural, dated 1 February, 2013‖; ―2013 Mongolia Investment Climate Statement‖ by the Economic
and Commercial Section of the U.S. Embassy; ―Mongolia Foreign Labor Force Ratio for 2013‖ by
Hogan Lovells International LLP; ―How Mongolia will perform in 2013?‖ by Mandal Asset
Management; ―Mongolia Business Owner and CFO Survey result‖ by BDSec JSC; ―The fiscal regime
for mining - a way forward‖ by IMF Fiscal Affairs Department; ―Mongolia-a supplement to Mining
Journal‖ from Mining Journal October, 2012; ―Macro Overview‖ September, 2012 by EPCRC; ―Taxes
for Expatriates in Mongolia‖ by PricewaterhouseCoopers.
BCM's English website includes the ―Mongolia Business News‖ section where the Open Letter to
Parliament and Government is available for download.
BCM continuously posts news stories and analysis of relevance to Mongolia at ‗Mongolian Business
News‖ before they are all put together each week for Friday's weekly NewsWire.
The ―Photo Gallery‖ contains photos from the 5th Anniversary BCM Gala dinner on November 5.
The BCM NewsWire will continue to be issued each Friday, incorporating items already on the home
page for a consolidated account of the week‘s events.
___________________________________________
SOCIAL NETWORKS 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.
We have now 1,036 fans on our Facebook fans page, 1,182 connections on LinkedIn network, and
648 followers on Twitter.
Of course for news information, interviews, event photos, and announcements regarding our
organization, visit the official BCM website at www.bcmongolia.org and www.bcm.mn.
BCM WORKING GROUP MEETINGS
BCM`s Tax Working Group met on 26th of March 2013. During the meeting discussion the Working
Group decided to proceed with a letter to S. Purev, Vice Minister of Finance, on the subject of VAT.
The final letter is available on BCM`s Tax Working Group Web Page or please click on the direct link
in Mongolian official version: http://bcmongolia.org/images/files; In English, unofficial translation:
http://bcmongolia.org/images/files/en/Working-group/tax/purev-eng.pdf
Please contact [email protected].
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]
February 28, 2013 *11.3% [source: NSOM]
*Year-over-year (y-o-y), nationwide
Note: 11.1% y-o-y, Ulaanbaatar city, February 28, 2013
CENTRAL BANK POLICY LOAN 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]
January 25, 2013 12.50% [source: Mongol Bank]
CURRENCY RATES – APRIL 4, 2013
Currency Name Currency Rate
US dollar USD 1,410.63
Euro EUR 1,804.20
Japanese yen JPY 15.06
British pound GBP 2,126.38
Hong Kong dollar HKD 181.42
Chinese Yuan CNY 227.47
Russian Ruble RUB 44.45
South Korean won KRW 1.26
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.