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Wednesday, August 1, 2012

[CPSI NewsWire: Post Capitalist Exploits Mongolia Meet Up Mega Edition]

CPSI NewsWire brings you market updates on Mongolia, compiled by CPS International, a Mongolian marketing arm of CPS Securities, a Perth, Western Australia based stockbroking and corporate advisory firm, specialising in capital raising for mining and junior stocks.

Follow CPSI NewsWire on Twitter, Like CPSI on Facebook, View Archive on Website

 

LinkedIn's Mongolian Mining Sector Group Networking Event on 3 August

July 30 -- Mongolian Mining Sector Group on Linkedin with Partnership of Iarudi LLC and Mining Gate Mongolia LLC cordially invites you to our first networking event to be held at 7 p.m. on August 3rd, 2012 at Bojangles Restaurant in Ulaanbaatar Mongolia.

As our group, Mongolian Mining Sector on Linkedin has grown, it is time to meet each other and exchange ideas, expertise and knowledge on how we can improve the mining sector in Mongolia. This is a casual networking event that is aimed to help, advise and aid our esteemed members and colleagues in their endeavors. 

The event will be held at 7 p.m. on Friday, August 3rd of 2012 at Bojangles Restaurant, Jiguur Grand Building on Narny Zam Street, next to Monnis showroom.  

The IARUDI Group

Established in early April 2011, IARUDI Group is one of Mongolia's premier professional services firms. Based out of its offices in Central Tower and San Business Centre in Ulaanbaatar the group has approximately twenty five team members based in country full time. A highly skilled and experienced team of Mongolians is complimented by four international chartered accountants (from England, South Africa and Australia), an experienced ex investment banker from Australia and an Australian lawyer.

Boasting an impressive mix of international and local experience IARUDI has created a unique service offering platform to both international and Mongolian clients. The group provides an array of services ranging from transaction advisory and virtual CFO services through to back office accounting and local regulatory compliance. The group also actively identifies business opportunities within Mongolia and either invests or partners with local and international players to convert such opportunities into successful businesses.

Link to Group page

 

IARUDI launches the first course in its new training programme: Fundamentals of IFRS

July 30 (IARUDI) In line with IARUDI's commitment to developing the skills of Mongolian professionals, we are launching the first course in a new training programme: Fundamentals of IFRS.

In conjunction ATC International - Becker Professional Education, we are running two 5 day training courses covering the fundamental elements of accounting under IFRS.

September dates are now available - see the link below for further details on the courses and how to book.

Fundamentals if IFRS: booking information

Link to IARUDI

 

Capitalist Exploits: Mongolia – Private Investor Summit 2012

July 30 (Mogi) I had the fortune of being invited to present at this Mongolian Meet Up, organized by Mark and Chris of www.CapitalistExploits.at this July 25-28.

So a big thank you to Mark and Chris, and all of the investors, who came to see the country's potential first hand, and guests for putting up with me these few days.

So apologies to my subscribers for the late newswire and also for the big newswire, all in wrapped in one.

---

 

Voyager: JUNE 2012 QUARTERLY ACTIVITIES REPORT

July 31, Voyager Resources Limited (ASX:VOR) --

Highlights

Ø  Fundraising completed through an underwritten non renounceable entitlement issue of 446,373,854 options at an issue price of 1 cent each to raise approximately $4.464 million before costs. 

Ø  The Company is now fully funded.

Ø  A study aimed at reviewing the extensive drilling, geology and geophysical database generated at the Company's KM Project over the last 12 months was successfully completed.  

Ø  A number of high priority drill targets have been identified.

Ø  The application for the mining license at the Company's KM project has commenced.

Ø  A ground magnetic survey was completed on the Company's Daltiin Ovor Gold Project. A soil geochemistry programme has now commenced.

Ø  A number of management changes including the appointment of Joe Burke as Chief Executive Officer.

Link to report

Link to Cashflow report

 

Voyager: COMPLETION OF ENTITLEMENT OFFER

July 25, Voyager Resources Limited (ASX:VOR) (Company)  advises that it has received applications for 92,370,797 shares pursuant to the Entitlement Issue Prospectus dated 21 June 2012. This includes applications from existing shareholders for additional shares pursuant to the Shortfall Offer.

The Company has notified the Underwriter to the offer of the  remaining  shortfall of 354,003,057 shares.

The Company will now proceed with the allotment process and dispatch holding statements for the applications received according to the timetable included in the prospectus.

The Company will proceed with the allotment process and dispatch of holding statements for the remaining shortfall following receipt of applications and cleared funds.

Link to release

 

Voyager Resources soars 35%, prompts ASX price and volume query

July 24 (Proactive Investors) Voyager Resources (ASX: VOR) shares soared yesterday hitting an intra-day high of $0.027 - 35% higher than where the company traded on Friday, prompting a price and volume query from the ASX.

Voyager responded to the Exchange saying that it was not aware of any material information that has not been announced to the market which may explain the sudden investor interest.

The company though does have some very interesting projects, including the KM Copper Porphyry Project (80%) in Mongolia, which earlier in the year delivered some very impressive intersections such as 104 metres at 1.0% copper and 8.2 g/t silver from 4 metres, including 42 metres at 2.1% copper and 16.4 g/t silver from 20 metres.

Other highlights include:

- 168 metres at 0.74% copper and 5.4g/t silver from 76 metres, including 36 metres at 2.1% copper and 16.2 g/t silver from 86 metres;
- 140 metres at 0.6% copper and 5.3g/t silver from 4 metres; and
- 80 metres at 0.8% copper and 10.3g/t silver from 60 metres to end of hole.

Worth noting for investors, these results along with previously announced intersections from the Cughur and Gaans Discoveries sees Voyager continuing to drill some of the best copper mineralisation reported in Mongolia, external to the giant Oyu Tolgoi Copper Deposit.

Link to article

 

Cash at end of Q at A$4.8m

STZ: JUNE 2012 QUARTERLY ACTIVITIES REPORT

July 31, Strzelecki Metals Limited (ASX: STZ) --

HIGHLIGHTS

Ø  Strzelecki Metals Limited ("Strzelecki" or "Company") has entered into a Heads of Agreement to acquire 100% of Wolf Petroleum Limited ("Wolf Petroleum"). This is a 100% scrip transaction.

Ø  Wolf Petroleum shareholders to be offered twenty five (25) Strzelecki Shares for every one (1) Wolf Petroleum Share.

Ø  Proposal to re name Strzelecki to Wolf Petroleum Limited.

Ø  Wolf Petroleum is an unlisted highly successful Mongolian focussed oil and gas explorer. 

Ø  Wolf Petroleum is one of the largest and most active petroleum explorers in Mongolia and his currently running successful work programmes across three blocks.

Ø  Mongolia is an emerging petroleum province with early exploration success and production being delivered proximal to  Wolf Petroleum's Blocks.

Ø  Mongolia is "open for business" and actively encourages foreign investment in its resources sector. The Wolf Petroleum Board including; Matthew Wood, George Tumur and Tim Flavel have had considerable success operating in Mongolia.

Ø  Exploration interests in both southern Poland and Western Australia were enhanced through the activities of the joint venture partners.

WOLF PETROLEUM LIMITED

The Company has entered into a Heads of Agreement with Wolf Petroleum pursuant to which it will acquire all of the issued capital in Wolf Petroleum through an offer to Wolf Petroleum shareholders. The offer will be an all scrip transaction with Wolf Petroleum shareholders to be offered 25 Strzelecki Shares for every Wolf Petroleum Share.

It is proposed that Strzelecki be renamed Wolf Petroleum Limited. Wolf Petroleum is an unlisted Mongolian focussed oil and gas explorer and is currently conducting successful work programmes across three blocks. Mongolia is an emerging petroleum province with early exploration success and production being delivered proximal to Wolf Petroleum's Blocks. Wolf Petroleum currently holds joint survey exploration block contracts at Jinst and Baruun Urt and has been recently been awarded a third block at Sukhbaatar with a product sharing contract (PSC) to be awarded.

Ø  Aggressive onshore, low cost exploration with elephant upside.

Ø  Giant exploration package assembled across three blocks, with additional blocks being assessed.

Ø  Shallow targets depths at between 500 metres and 3,000 metres.

Ø  Strong and growing market domestically in Mongolia and in China.

Ø  Blocks are proximal to multi-billion barrel oil fields located within Mongolia and within China to the south.

Ø  Near term development potential, subject to successful exploration.

Ø  Experienced Board of Directors. The Board of Directors and senior management team have an enviable track record operating in Mongolia.

Ø  Mongolia is open for business and is actively encouraging investment in its resources sector.

Completion of the acquisition will be subject to conditions including ASX and shareholder approval, completion of due diligence and Strzelecki becoming entitled to acquire 100% of Wolf Petroleum as a result of Wolf Petroleum shareholders accepting the offers to be made to them by Strzelecki. Strzelecki continues to undertake due diligence on the acquisition. Due diligence is expected to be completed during August 2012.

Link to report

Link to cashflow report

 

Strzelecki Director Buys On Market

July 24 (Mogi) Mr. Matthew Wood, a director of Strzelecki Metals Limited (ASX:STZ), which has made takeover bid for Wolf Petroleum, a oil exploration company operating in Mongolia, has bought 500,000 shares STZ shares on market for A$10,000 on 18 July, according to a change in director's interest notice.

Link to notice

 

Haranga: June 2012 Quarterly Activities Report

July 26, Haranga Resources Limited (ASX:HAR) --

- Highlights -

Exploration Activity

      Outstanding results obtained from the metallurgical test work thus far completed at the Selenge Iron Ore Project.

      Comprehensive Davis Tube Recovery (DTR) test program revealed that all three Selenge deposit/prospects thus far drilled can consistently produce magnetite concentrate at an average grade of over 65% Fe with low levels of contaminants.

Summary DTR Results – Average Conc Quality from all Iron Zones

(80% passing 75µm, 10% yield cutoff)

Deposit

Average Mass Yield

Fe (%)

SiO2 (%)

Al2O3 (%)

S (%)

P (%)

Bayantsogt

29.1%

65.77

3.25

0.96

1.03

0.02

Prospects

 

 

 

 

 

 

Dund Bulag

18.0%

65.15

5.34

1.32

0.18

0.00

Huiten Gol

29.8%

68.78

1.90

0.41

0.01

0.01

      Even the lower grade ore at Selenge is upgradable to a top quality concentrate justifying a significant price premium.

      The 75µm grind employed may not be necessary to achieve a saleable concentrate and DTR tests will be conducted at even coarser grind sizes.

      The 2012 drill program has commenced, with seven diamond core rigs now actively drilling at Selenge.

Corporate Activity

      Mongolia passed a Foreign Investment Law that provides for a Government approval process for significant change of control transactions in the minerals sector.

      Marshall Cooper, a nominee of the Lippo Group, has joined the Company's board.

      The Company maintains a cash position of $15 million.

Link to report

Link to Quarterly Cash Flow Report

 

CPS Securities was Lead Manager in EUM's IPO. Cash at end of Q at A$2.9m

Eumeralla: ACTIVITIES REPORT JUNE QUARTER 2012

July 31, Eumeralla Resources Limited (ASX:EUM) --

HIGHLIGHTS

      Eumeralla Resources Limited ("the Company") successfully completed its listing on the Australian Securities Exchange on 3 May 2012.

      Since listing, the Company has signed a contract to provide initial mapping, sampling and surveying of the Company's licence site in Northern Mongolia.

      The total cost of this mapping and sampling is estimated at approximately USD 80,000

      During the quarter, field work commenced and exploration drilling is planned to commence in Q3 of 2012.

      The Company continues to identify and evaluate resource projects in the South East Asian region consistent with its stated objectives.

      During the period, the Company commenced legal and geological due diligence of several projects in both Mongolia and Myanmar.

CHULUUN KHOROOT TUNGSTEN PROJECT

The Company has signed a contract to provide initial mapping, sampling and surveying of its licence site in Northern Mongolia, ahead of commencing a drilling program. The License covers an area of 12,657 hectares and incorporates the historical Chuluun Khoroot tungsten mine which was active during the period 1945-195.

Field work commenced during the quarter and exploration drilling is planned to commence in Q3 2012.  During July, approximately 300 samples have been collected. The total cost of the mapping and sampling is estimated to be USD 80,000.

MYANMAR PROJECTS

Following legal and geological due diligence work, the Company signed a non-binding Letter of Intent in July 2012 with Myanmar incorporated Southern World Mining Co Ltd. to jointly explore tin and tungsten licences in Southern Myanmar's historical Tenasserim region.

CORPORATE

As at the 30 June the company had a cash balance of AUD $2.856m. The Top 20 shareholders held approximately 68.6% of the company's issued capital.

Link to report

Link to cashflow report

 

Rio Tinto Spends Nearly $1 Billion in Ivanhoe Rights Issue

July 30 (Dow Jones Newswires) Mining titan Rio Tinto PLC (RIO) said Monday it has spent nearly $1 billion in accordance with a pact to participate in Canada-based Ivanhoe Mines Ltd.'s (IVN.T) $1.8 billion rights issue, which is aimed at funding the development of the massive Mongolian Oyu Tolgoi copper and gold project.

Rio Tinto spent $935 million to participate in the oversubscribed rights issue and increased its stake to 51.0% from 50.9% as a consequence. The purchase is in keeping with Rio Tinto's agreement to participate in any Ivanhoe rights issue to fund the Oyu Tolgoi project.

Ivanhoe's founder and former chief executive, Robert Friedland exercised his rights to keep his holding in the Vancouver-based mining company at about 13%, according to a person familiar with the matter. Mr. Friedland resigned as chief executive of Ivanhoe in April, not long after losing control of the company when Rio Tinto became its majority owner, a situation he had fought to prevent.

"We are pleased with the strong reception our rights offering received from shareholders," said Ivanhoe's new chief executive, Kay Priestly, adding that the project remains on track to process its first ore in the second half of 2012 and begin commercial production in the first half of 2013.

Rio said that it has no plans to buy additional Ivanhoe shares at the moment, although it has the ability to exercise warrants that would allow it boost its shares to 54.4% if desired.

The Anglo-Australian mining company also has the right to be the first to participate in further equity financing from Ivanhoe up until Oct. 24; it also has antidilution rights to make sure it is able to maintain its current stake in the company in the future.

"The purpose of Rio Tinto acquiring additional shares under Ivanhoe's rights offering was to honor its contractual obligations to Ivanhoe and to provide additional funding to Ivanhoe to ensure the timely development of Ivanhoe's Oyu Tolgoi copper-gold mine in Mongolia," it said.

The mine holds some of the world's largest unexploited gold and copper deposits, with estimated reserves of 46 million ounces of gold and 81 billion pounds of copper.

Rio Tinto's shares closed up 1.6%, or 45 pence, at 29.37 pounds, while Ivanhoe's shares were down 2.4%, or 21 Canadian cents, at C$8.57 a share.

Link to article

 

Cash at end of Q at A$6m

Draig: QUARTERLY REPORT

July 31 -- Coal explorer Draig Resources Ltd (ASX: DRG) ("Draig" or "the Company") is pleased to provide shareholders with its latest Quarterly Report, which outlines the progress made by the Company in the last quarter. Draig is exploring its parcel of eight coal licences across Mongolia's Ovorhangay and South Gobi Provinces.

HIGHLIGHTS

·         Maiden JORC reportable coal resource for Teeg licence of 75 million tonnes

·         Teeg exploration target of up to a further 25 to 100 million tonnes1

·         Evidence for a significant deposit of high grade coal with metallurgical potential

·         Initial 6,000 metre Teeg exploration program completed

·         Best apparent cumulative seam thicknesses 86.28m, 66.75m, 37.80m & 36.12m

·         Exploration planned for South Gobi licences in H2 2012

Link to report

Link to cashflow report

 

DRAIG REPORTS MAIDEN JORC COAL RESOURCE FOR TEEG LICENCE, MONGOLIA

July 30, Draig Resources Limited (ASX:DRG) --

Highlights

·         Maiden JORC reportable coal resource for Teeg licence of 75 million tonnes

·         Teeg exploration target of up to a further 25 to 100 million tonnes1  

·         Evidence for a significant deposit of high grade coal with metallurgical potential

·         Resource defined following initial exploration drilling program

·         Target drill areas identified to further explore licence area

·         New exploration program to focus on Draig's South Gobi licences

Coal explorer Draig Resources Limited (ASX: DRG) ("Draig" or "the Company") is pleased to announce a maiden JORC compliant inferred coal resource of 75 million tonnes for its Teeg Licence ("Teeg"), plus an additional exploration target of between 25100 million tonnes1.

The JORC report added there is 'compelling evidence' for a significant deposit of high grade coal with metallurgical potential in a coal seam with a true average coal thickness of 24.12m.

The 22.2km2 Teeg licence is situated in the Bayanteeg district of the Ovorhangay province in centralsouthern Mongolia and is one of eight licences owned by Draig across the Ovorhangay and South Gobi regions.  

The JORC resource estimate was determined using the results of geological mapping, trenching, induced polarization and resistivity surveys, 6784m of drilling and coal sample analyses.

The Company believes the results confirm the highly prospective nature of Teeg and the wider Bayanteeg area.

The resource estimation on the Teeg licence was compiled by PT Danmar Explorindo, a geological consulting company with extensive experience in coal geology.

Link to release

 

Draig: Investor Presentation July 2012 – Teeg Project, Mongolia: Maiden JORC Resource

July 31, Draig Resources Limited (ASX:DRG) --

Link to presentation

Link to Draig Broadcast with Draig MD Mark Early

 

Tribunal rules in favour of Khan Resources

TORONTO, July 26 (miningweekly.com) – The United Nations (UN) tribunal has ruled in favour of uranium explorer Khan Resources (CNSX:KRI) in a $200-million arbitration case against the government of Mongolia, the TSX-listed company (Mogi: CNSX listed actually) said on Thursday.

The UN Commission on International Trade Law ruled on matters of jurisdiction and has dismissed all of Mongolia's objections to the continuation of the suite.

Khan alleged that during 2009 the government of Mongolia in concert with a Russian partner took actions that amounted to the illegal expropriation of the company's mining and exploration permits.

Khan said this took place after the government initially invited and encouraged the company and its predecessors to invest millions of dollars, expertise and resources in the Dornod Aimag uranium project, in north-eastern Mongolia.

The action would now progress to the next phase, in which the panel would rule on the merits of the arbitral claims and the amount of damages suffered by Khan arising from Mongolia's expropriatory and unlawful treatment of the company.

In Khan's arbitration filings, the company said the uranium deposit had substantial resources of uranium and a capacity to produce about three-million tons of yellow cake a year, for 15 years.

The established net present value is $276-million, which would be derived from $2.94-billion in revenue over the life of the mine.

Khan said that just as it was preparing to start construction of the mine in October 2009, the governments of Mongolia and Russia in January made a statement that they intended to exploit the resource, and by August, had formed a Dornod Uranium joint venture (JV).

On December 14, 2010, Russian Prime Minister Vladimir Putin and Mongolian Prime Minister Sukhbaatar Batbold signed an agreement confirming the JV, which also effectively confirmed the expropriation of Khan's project rights.

Subsequently Khan received a notice from Mongolia's Nuclear Energy Agency in which it said Khan's Dornod rights had been invalidated, retroactive to October 8, 2009.

Khan initiated the international arbitration suite in January 2011.

"We are pleased that the tribunal has validated Khan's initiatives to achieve recourse to damages suffered by our shareholders. Our treasury is well funded and we will continue to vigorously pursue this action to its logical end to receive value for our investments in Mongolia," Khan CEO Grant Edey said.

Khan added that it would immediately start preparing for the upcoming merits/damages phase of the proceedings.

Other firms are also currently embroiled in arbitration proceedings with Mongolia, including SouthGobi Resources, which had filed a notice of arbitration on the government, owing to the country's Mineral Resources Authority's failure to execute the premining agreements for the Zag Suuj, and certain areas of the broader Soumber coal deposits.

A newly elected conservative coalition government is also seeking to restrict foreign companies from mining Mongolia's wealth of mineral resources and recently made noises about renegotiating a 2009 government agreement, which gave Canada's Ivanhoe Mines, now controlled by mining giant Rio Tinto, 66% ownership of the $13-billion Oyu Tolgoi copper/gold project.

Canada's Prophecy Coal is also active in the country.

Link to article

Link KRI release

 

Prophecy Coal strengthens its team as it seeks to become major coal power producer in Mongolia

July 27 (Proactive Investors) Prophecy Coal Corp. (TSE:PCY) Friday announced the addition of some experienced team members to the positions of directors and advisors, making clear its intent to become a big coal energy provider in Mongolia.

As the company aggressively pursues measures to bring its 600 megawatt (MW) Chandgana power project in central Mongolia online by the first quarter of 2016, it is bulking up the team with some major players in the energy industry as it moves forward with its plan of helping to relieve a major ongoing and growing power deficit in the country.

Joining Prophecy's board is Harald Batista, an entrepreneur with over two decades of international sales and marketing experience. Batista is a member of the prominent Batista family in Brazil that includes Eike Batista, the founder of EBX Group

The EBX Group focuses on investment opportunities in infrastructure and natural resources, including energy, and the combined market capitalization of the EBX Group of companies exceeds US $20 billion.

Prophecy also announced the appointment of V.P. Sharma to its advisory board.

Sharma has over 40 years of experience in the energy industry. His experience covers all aspects of power generation, including operations and maintenance, construction, planning, engineering, business development, safety, and project management. 

The company also appointed to its advisory board, Maree Roos - an independent energy consultant with an understanding of the electricity industry, gained from involvement in numerous major projects across Africa, Singapore, Malaysia, Thailand and now Mongolia.

To its external council, Prophecy added Lynia Lau, a Hong Kong based partner in the international law firm Clyde & Co. and the Asian head of energy and resources for the firm.

Lau specializes in acquisition, development, financing, operation, sales and governmental regulation of large-scale infrastructure projects including power plant, oil and gas, refinery, and LNG.

Lau's background in the power sector includes the role of lead lawyer for at least five major Asian power companies, and she was also a core team member advising Electricite de France and GEC Alstom on the first foreign-invested power project in China.

"Our expert team of staff and advisors has been working to implement the Chandgana mine mouth power project in Mongolia," said Prophecy chairman and CEO John Lee.

"Chandgana is the most mature and the only fully licensed 600 MW independent power project in Mongolia

"Significant advances have been made in the areas of EPC, PPA, developer sponsorship, and project financing. A progress update will be provided shortly."

The company's proposed 600 megawatt mine-mouth power plant adjacent to its Chandgana coal deposit has been permitted by the Mongolian government, and would be the first thermal coal power plant in the country in over 20 years.

Prophecy is actively driving the process forward, and recently signed a co-operation agreement with the Energy Authority (EA) of Mongolia, another step toward getting the plant up and running in the next four years. The EA is the agency that implements governmental policy in the power and energy sector of Mongolia.

The co-operation agreement covers the basic rights and obligations of Prophecy as the seller and the National Electricity Transmission Grid Company of Mongolia (NETGCO) as the purchaser of energy.

Prophecy noted that the plant will supply electricity to the central and eastern energy systems in Mongolia, with an expected 100 MW net electric output starting from the first quarter of 2016, up to 200 MW from the third quarter of 2016, 300 MW from the first quarter of 2017, and 400 MW from the third quarter of 2017.

At the start-up date in 2016, the plant will only be able to meet about two thirds of the country's deficit, leaving the government to seek additional power sources.

Prophecy plans on increasing output from its Chandgana plant from 2017 to 2020 by adding 3,600 MW of capacity, selling excess power to Chinese markets and to industrial users, who typically pay a higher rate than governments.

The initial life of the plant is estimated to be around 30 years.

Coal for the Chandgana plant will be sourced from the company's Chandgana deposit, for which it has obtained all necessary permits and licenses to initiate production.

Prophecy Coal also owns the Ulaan Ovoo mine in Mongolia, which is in production, and the company continues to make progress on opening the Zheltura border crossing - 17 kilometres from the mine - to facilitate coal export to Russia, which would increase the total demand for coal from Ulaan Ovoo. 

Just over a week ago, Prophecy said it has arranged a $10 million secured debt facility with Waterton Global Value, to complete the purchase of the Tugalgatai, Mongolia coal licenses from Tethys Mining LLC.

The Tugalgatai licenses are contiguous to the company's Chandgana licenses, which host a measured resource of 650 million tonnes and an indicated resource of 540 million tonnes of thermal coal.

According to records reviewed by Prophecy, on March 15 of last year, Tethys applied to register a resource estimate of 2.33 billion tonnes of thermal coal for the Tugalgatai licenses with the Minerals Resource Council of Mongolia. The resources registered by Tethys are not NI 43-101 compliant.

Separately, the company announced Friday that directors Paul Venter and Paul McKenzie have resigned to pursue other interests.

Link to article

Link to PCY release

 

Aspire Identifies Potential Significant Rail Capital and Operating Cost Savings

July 30 -- Aspire Mining Limited (ASX: AKM) ("Aspire" or "the  "Company") and its Mongolian rail infrastructure subsidiary, Northern Railways LLC ("Northern Railways"), are pleased to announce the results of an independent review of the Rail Pre-Feasibility Study ("Rail PFS") which was completed in February 2012.

The review was conducted by Calibre Rail ("Calibre"), world leaders in bulk commodity rail design, who applied the same Mongolian rail design parameters and unit rates used in the Rail PFS prepared by Optimal Projects LLC.

The review highlighted that an alternative direct rail alignment connecting Ovoot to Erdenet (bypassing Moron) could result in capital expenditure savings of approximately US$188 million. The review has also identified the potential to significantly reduce operating costs over the life of the project that will be further explored in a second iteration of the Rail PFS.

Possible changes to some of the operational parameters originally used in the Rail PFS could lead to an additional availability of approximately 8 Mtpa for other users to access. 

Calibre reviewed both the 406 kilometre multi-user rail alignment from Erdenet to Moron and the 222 kilometre spur line that connects to the Ovoot Coking Coal Project ("Ovoot Project").

The total distance from the Ovoot Project through to Erdenet on this rail alignment is 628 kilometers. Calibre tested a number of alternative alignments that showed potential to reduce both capital and operating expenditures over the complete alignment.

The review by Calibre essentially confirmed the alignment between Erdenet to Moron as being the most efficient with some minor modifications that will need to be confirmed by conducting detailed ground surveys. However, Calibre addressed the question of "what is the most efficient path" for Ovoot Project coking coal to reach Erdenet. Calibre's study suggests an alternative rail alignment some 50 kilometres to the south of Moron, connecting the Ovoot Project directly to Erdenet could provide substantial savings to the Ovoot Project.

This alternative alignment reduces the distance that Ovoot Project coking coal needs to travel to reach Erdenet by 47 kilometres and reduces capital expenditure by approximately $188 million plus contingencies (refer Table 1) due to the significantly more agreeable terrain to support a rail line. A 57 km spur line from the main Ovoot to Erdenet line would be required to connect to Moron should this be justified (refer Figure 1). Alternatively, sealed road access from Moron to the main line could handle the forecast volume of freight and passengers.

 

Rail PFS

Calibre Review

 

Ovoot - Moron

Moron - Erdenet

Total

Ovoot - Erdenet

Total

Total length of track, km 

222

406

628

581

581

US$ million (plus contingencies)

$400

$1,100

$1,500

 

$1,312

Table 1: Comparison of rail distances and cost between Rail PFS and Alternative Alignment

Further savings from this alternative alignment relate primarily to the more agreeable terrain which reduces the necessity of several capital intensive components including tunnels, bridges and complexity of design. Calibre has estimated that two locomotive and 100 wagon consists are possible between Ovoot and Erdenet, thereby increasing the availability of capacity for other users (the Rail PFS had assumed  50 wagon consists). Further capital savings will also be investigated by the Company resultant from the capacity de-rating.

The result of using larger trains will result in fuel savings of approximately 11% per tonne of coal transported, as well as lower locomotive leasing and maintenance costs.

This alternative alignment, its capital and operating costs will be reviewed in more detail in a second iteration of the Rail PFS to commence shortly. 

Link to release

 

Cash at end of Q at A$14m

Guildford: QUARTERLY ACTIVITIES & CASHFLOW REPORT

HIGHLIGHTS

MONGOLIA

Ø  Increased stake in Mongolian subsidiary Terra Energy to approximately 75%

Ø  Finalising mining contractor negotiations with preferred  contractor for mining start-up on South Gobi Project with contract signing expected in early August 2012.

Ø  Confirmed start up schedule for commencement of  mining in September 2012 with management reaching one of their key objectives of transitioning from explorer to miner, delivering positive cash flow and allowing  the Guildford Board the opportunity to consider potential dividend flow to shareholders in this financial year

Ø  Formal Tenders received from short listed offtake partners with final agreement to be negotiated and finalised mid August 2012. Tender submissions in line with expectations for raw sales at mine gate

Ø  Washability results confirm 2 coking coal products with a Chinese Classification Fat Coal (Yr1 mean F1.60 Yield of 72%, 4.1% Ash & CSN 8) and a Gas Coal (Yr1 mean F1.60 Yield of 61%, 6.1% Ash & CSN 4)

Ø  Drilling  to recommence in August 2012  to prove the coal resources in other potential conceptual pits for the South Gobi Project

QUEENSLAND

Ø  Maiden JORC Indicated Resource estimated for the  Hughenden Project (100% Guildford)  on EPC1477 in the northern Galilee Basin of 123.63Mt. This  is an important prerequisite to allow progression of studies for Mining Licence application

Ø  Guildford increased  its  stake in the White Mountains subsidiary to approximately 60%

Ø  Drilling on White Mountain Project in the northern Galilee Basin, has continued to intersect the target seams and is expected to allow an increase to the potential open cut resource late in the September 2012 quarter

Ø  Studies in support of the IAS and EIS for  Hughenden and  White Mountain Projects have commenced and an application for a Mining Lease is expected to be lodged by the end of 2012 which should allow binding arrangements to be entered into for rail and port

Ø  Guildford acquired additional 20% stake in Orion Mining Pty Ltd (Orion) taking Guildford ownership to 100%. Orion wholly owns the tenements which form the Pentland Project in the north eastern Galilee Basin

Ø  Drilling  recommenced on the  Springsure Project (50.52% Guildford) in the Bowen Basin, with the target seams intersected. Further drilling is expected to result in the estimation of a maiden resource  late  in the September  2012 quarter

Ø  Guildford entered into a  Farm-In and JV Agreement with QCI (Coking) Pty Ltd (QCI), a wholly owned subsidiary of Hancock Prospecting Pty Ltd (HPPL) at the Kolan Project in Queensland.

Link to report

 

Cash at end of Q at A$9.3m

Aspire: QUARTERLY REPORT - Quarter Ended 30 June 2012

July 31 -- Aspire Mining Limited (ASX: AKM, "Aspire" or "the Company") is pleased to present its June 2012 Quarterly Report.

Aspire is focused on developing its world-class 100%-owned Ovoot Coking Coal Project ("Ovoot Project") in northern Mongolia and advancing the region's infrastructure to bring Ovoot Project coking coal to world markets. The Ovoot Project is a new discovery of a large coking coal deposit and the Company has so far spent AU$21 M on its discovery and development.

Aspire's other Mongolian projects include the Nuramt Coal Project (100%), Jilchigbulag Coal Project (100%) and the Zavkhan Iron Ore Project (earning 70%). 

Highlights

      Positive Pre-Feasibility Study for the Ovoot Project completed;

      Initial Probable Reserve of 178 Mt of coking coal,  82% yield and Life of Mine average operating costs of US$118/t;

      Mine Plan has ROM tonnes of 185 Mt and saleable coking coal production of 153 Mt over 15 years;

      Mr James Benson appointed as the Mongolian based Ovoot Project Director. Jim has significant experience in design  and construction of large coal, iron ore and associated rail projects in former CIS countries;

      Basin Evolution Study at Ovoot Project by SRK identifies additional exploration targets;

      23 holes for 4,974 metres of drilling completed at the Ovoot Project in the Quarter;

      Review of Rail Pre-Feasibility Study identifies potential cost savings;

      Ministerial approval received for the alignment of  a sealed road from Ovoot to the regional capital of Moron to support initial coal haulage, project development and construction; and

      Non Binding MOU entered into with the Mongolian subsidiary of JSC Russian Railways to discuss a joint development of the Erdenet – Moron – Ovoot rail line. 

Link to report

Link to cashflow report

 

MRC: Quarterly Report

July 31, Mongolian Resources Corporation ( ASX:MUB) --

CORPORATE FINANCES

The company's cash reserves sit at US$1.81m at the end of June, 2012 with a planned budget for Quarter 3, 2012 of US$1.2m. Given the permitting issues discussed above the company has rescheduled its production to late quarter 3 commencement and but is still expected to achieve positive cashflow this year.

MONGOLIAN PROJECTS

Status on work completed this quarter includes

      Overall 100tpd Plant readiness awaiting Cyanide Permission

      Further upgrade of Gravity plant with  installing of larger ball mill and new centrifugal concentrator

      Mine Contractor selection has identified Filipino Paramina Group

      Underground Drill rigs being mobilized to commence 6,300m drill program.

Link to report

Link to cashflow report

 

Altan Rio Completes Onon Project Earn-In

VANCOUVER, July 24, 2012 /CNW/ - Altan Rio Minerals Limited, TSX.V: AMO ("Altan Rio" or the "Company") announces today that the earn-in for 90% ownership in one of the Onon epithermal gold project ("Onon") tenements in northeastern Mongolia, as referred to in the Company's July 10th, 2012 announcement, is now complete.

Altan Rio completed the earn-in with Erdenyn Erel LLC, a private Mongolian company, for 90% interest in one of the three Onon tenements with a final payment of 240,000 common shares in the capital of Altan Rio. The shares are subject to a four-month escrow expiring on November 13th, 2012, in accordance with TSX Venture Exchange policy. The Company owns 100% of the remaining two tenements.

The earn-in dated August 2008, as amended May 2010, October 2010, May 2011, and May 2012, gives Altan Rio Mongolia LLC, a wholly owned subsidiary of the Company, the option to acquire an undivided 90% interest in one of the Onon tenements. With this final share payment of 240,000 shares (substituted for the final cash payment of USD$60,000, as per the May 2012 amendment), the Company has satisfied all requirements of the earn-in including exploration expenditures of USD $900,000, cash payments totaling USD $100,000 and a share payment of 240,000 shares made to Erdenyn Erel LLC.

Link to release

 

Kincora Copper closes convertible note private placement financing with Origo

July 24 (Proactive Investors) Vancouver-based Kincora Copper (CVE:KCC) announced late Monday the completion of its non-brokered private placement offering with Origo Partners of a convertible note of up to $2.5 million due and payable in three years.

The mining exploration and development company said the convertible note bears interest at 8.7 per cent per year, payable annually in company shares priced at the time of issuance in accordance with the TSX Venture Exchange.

The note is convertible into units of the company at any time after the date of issuance, at a cost of 25 cents each.

Each unit is made up of one common share and one purchase warrant, where one warrant is exercisable to purchase one common share at 45 cents for a term ending at the maturity date.

Kincora has given Origo certain pre-emptive rights to purchase further equity securities of the company.

Oirgo is the largest shareholder of Kincora, currently holding more than 46.37 million common shares, or 29.28 per cent of the company.

The private placement funds will be directed toward further developing its mineral properties located in Mongolia, as well as for general working capital.

The company announced in late April that it had closed its previously announced acquisition of Temujin Mining Corp's subsidiary, Golden Grouse, which was first reported in January.

Golden Grouse is a Mongolian company that holds the mineral exploration licenses 15075X and 15076X, next to Kincora's Bronze Fox project.

Kincora focuses on major copper-gold deposits in Mongolia, with its strategic assets the Bronze Fox and Tourmaline Hills deposits located in southeast Mongolia.

Link to article

Link to KCC release

 

Xanadu: Quarterly Activities Report - Period ended 30 June 2012

July 25, Xanadu Mines Ltd (ASX:XAM) --

XANADU KEY HIGHLIGHTS

      Exploration drilling continues at the Sharchuluut Uul porphyry project,  with 3,197.8m completed to date and assay results expected next month;

      Reconnaissance exploration commenced at the Amgalant porphyry copper project;

      Completion  of resource studies and maiden metallurgical test work to enable an application for a Mining Licence (30 year tenure) to be submitted for the Oyut Ulaan copper project;

      Drill tender awarded for 10,000m program at Elgen Zost gold system in South East Gobi;

      Mining Licence application for Galshar thermal project well advanced;

      A$15.5 million cash on hand at 30 June 2012 to fund exploration and pursue new opportunities.

EKHGOVIIN CHULUU LLC KEY HIGHLIGHTS (Joint Venture Company Xanadu/Noble Group)

      Agreement signed to earn 80% interest in the Khus Coal Project located in the South Gobi region, where exploration drilling commenced in July 2012;

      Option agreement signed on Khar Servegen Coal Project, located in the South Gobi, where due diligence drilling commenced in July 2012.

Link to report

 

Eumeralla Resources signs letter of intent on Tin and Tungsten concession in Myanmar

July 26 --

The Directors of Eumeralla Resources (ASX:EUM) are pleased to provide the following update on the company.

Summary:

·         Eumeralla Resources Ltd (EUM) and Myanmar incorporated Southern World Mining Co Ltd. (SWM) have signed a non-binding letter of intent (LOI) to jointly explore tin and tungsten licences in Southern Myanmar's historical Tenasserim region.

·         On final confirmation of the agreement with SWM, one licence will transfer the mineral rights to EUM. In addition, the JV is currently negotiating on securing three additional large scale exploration or mining licences in the tin and tungsten belt in southern Myanmar.

·         The four licences will give EUM approximately 4,000 acre footprint in an exciting region which is well recognised for its historical Tungsten, Gold and Copper production.

·         The current agreement is non-binding and subject to due diligence. The Directors of EUM expect binding legal documentation and due diligence to be completed before the end of Q32012.

·         The company is also engaged in advanced talks with several other parties holding tin and tungsten exploration licences and hope to conclude these agreements shortly.

Key Developments:

The Directors of EUM have signed a non-binding letter of intent with SWM to jointly develop a total of four large scale exploration or mining licences in the Tenasserim tin and tungsten region of southern Myanmar. Myanmar based SWM specialises in identifying large scale, quality resource assets in the region.  EUM will utilise SWM's extensive regional geological expertise to assist in identifying the three additional large scale exploration licences.  EUM expects the four large scale licences to total approximately 4,000 acres.

EUM's directors continue to be encouraged by political and economic developments in Myanmar and believe that the lack of exploration over the last 30 years combined with favourable geology make the country highly prospective for tin and tungsten.

The southern regions of Myanmar include areas belonging to the South East Asian tin belt.  This belt includes parts of Indonesia, Malaysia and Thailand and at times produced 65 per cent of the world's tin and the largest percentage of the world's tungsten. The area around the port city of Dawei is the major focus of exploration. (Diagram 1)

Link to release

 

Cash at end of Q at A$739K

Newera: QUARTERLY ACTIVITIES REPORT: June Quarter 2012

July 31 -- Newera Resources Limited (ASX: NRU) is pleased to provide the following report on its activities for the previous quarter;

HIGHLIGHTS – Exploration:

Mongolia

·         Newera establishes a Mongolian bridgehead through an option agreement on a Mongolian exploration licence.

·         A  binding agreement was  executed for the acquisition of up to an 80% interest in the Shanagan Project licence  - located in Central Mongolia.

·         The Licence is ideally located ~ 50km from existing heavy gauge rail siding which connects to the trans-Siberian railway servicing China and Russia.

·         A greenfield exploration opportunity with outcropping Late Permian coal seams in the north-west of the tenement.

·         Several historical trenches expose shallow dipping coal seams of consistent thickness between 1 – 5 metres.

·         Recent trench sampling by Newera confirms bituminous coal.

·         An immediate exploration program was instigated through contracting local geological consultants to undertake a 1:10,000 scale mapping program over the Shanagan project licence.

·         At the end of the period, the mapping exercise was in progress.

Sweden

·         Newera received notification from the Swedish Department that its applications for two large licences covering copper/gold prospective areas had been received and were being processed.

Australia

·         Work programs are planned for Newera's Jailor Bore (WA), Cummins Range (WA) and White Lady (NT) projects.

HIGHLIGHTS - Corporate:

·         Newera establishes a Mongolian subsidiary  – Newera Resources Mongolia LLC.

·         Newera continues a campaign to source new projects in Mongolia.

Link to report

Link to cashflow report

 

Banpu Lowers Global/Mongolian Four-Year Investment Plan

July 25 (Bangkok Post) Thailand's top coal miner Banpu has suspended up to US$600 million of its four-year investment plan and lowered its production target by 10% due to softening coal prices.

The SET-listed company has also revised down this year's growth forecast from 15% to flat growth. Production revenue will fall to 44 million tonnes from the original 47 million-tonne target, said chief executive Chanin Vongkusolkit.

Under the current forecast, Indonesian coal prices are expected to average $92 a tonne compared with $95 a tonne last year. Tonnes of coal for the year were originally expected to range somewhere from $100-120.

Including coal swap gains of $3 a tonne, Banpu's average price is estimated at $95, said Mr Chanin.

"Altogether, we're likely to delay until the end of 2015 some $500-600 million of our planned $1.75-billion capital expenditures," Mr Chanin said yesterday.

Of the total amount, investments allocated for Australian operations will be lowered by to $400 million. Capital expenditure planned for Indonesia will be cut by $100 million from $345 million, while the budget for Mongolia is down by $250 million from $400 million.

The Mongolian project, for example, is delayed because there is no urgency to mine coal during unfavourable price conditions. Under the previous plan, Banpu would have produced up to 1 million tonnes in Mongolia this year.

The company also plans cost-cutting measures aimed at lowering operation costs in Indonesia by $4 a tonne this year and plans to increase savings in future years.

"We have to lower costs and suspend unnecessary projects to maintain our sound financial status and cope with short-term coal price fluctuations," said Mr Chanin.

Banpu will maintain enough cash to safeguard itself and pursue growth opportunities. As of March, its cash on hand totalled 30 billion baht.

"Our net profit will certainly shrink this year from 20 billion baht last year, while the revenue will be flat or merely increase by 3% at best," he said.

Mr Chanin said low shale gas prices and coal exports from the US have caused coal prices to plummet.

Currently, there is a 10% surplus or 80 million tonnes of seaborne coal trading, which will take nearly a month to balance out.

The price of shale gas is below production costs and should rise to $4-5 million in two years, he said.

Coal is currently trading at $88-89 per tonne compared with $125 last year and a contracted price of $93 for next year.

In the worst-case scenario, the price will drop to about $80 for the rest of the year.

By postponing some projects, Banpu's 2015 production target will possibly be reduced to 55 million tonnes from 60 million tonnes. The company produced 42 million tonnes last year.

BANPU shares closed unchanged yesterday on the SET at 440 baht in trade worth 551 million baht.

Link to article

 

Ivanhoe Mines Closes Successful Rights Offering Yielding US$1.8 Billion in Gross Proceeds; Shareholders Subscribed to 100% of Available Common Shares

VANCOUVER, BRITISH COLUMBIA--(Marketwire - July 27, 2012) - Ivanhoe Mines (TSX:IVN)(NYSE:IVN)(NASDAQ:IVN) today announced the closing of its recent rights offering, which expired on July 19, 2012, and confirmed the offering generated US$1.8 billion in gross proceeds, which will be used to advance the construction and development of the Oyu Tolgoi Project.

Upon the closing of the offering, Ivanhoe Mines issued a total of 259,558,050 new common shares, which represents 100% of the maximum number of common shares that were available under the rights offering.

Approximately 99.2% of the shares were taken up in the initial subscription of the rights offering with the balance taken up in the secondary subscription. Rio Tinto exercised all of its respective rights and participated in the secondary subscription provision available to all shareholders. Because the offering was over-subscribed, Rio Tinto did not purchase any shares under its standby commitment. As a result of the rights offering, Rio Tinto's stake in Ivanhoe Mines increased from 50.9% to 51.0%.

Kay Priestly, Chief Executive Officer of Ivanhoe Mines, said, "We are pleased with the strong reception our rights offering received from shareholders and greatly appreciate their support. The proceeds will be used to further the development of the Oyu Tolgoi Project, which will provide far reaching economic benefits to Mongolia. The project continues to make good progress and we look forward to the processing of first ore in the second half of 2012 and the commencement of commercial production in the first half of 2013."

Ivanhoe will distribute new common shares acquired through the rights offering to registered subscribers on or about three business days after the closing of the offering.

This news release does not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

Link to release

 

Petro Matad: Two non- exec directors buy shares

July 27 (Proactive Investors) Oil explorer Petro Matad (LON:MATD) revealed that two non-executive directors had today bought shares worth more than £50,000 in the company.

Philip Vingoe purchased half a million shares at 7.63 pence a share for £38,150, while George Watkins bought 200,000 company shares at the same price for £15,260.

In a statement, the Mongolia- focused company said that following the transactions, Vingoe is beneficially interested in 500,000 shares or around 0.27 per cent of the firm's capital.

Meanwhile, Watkins has a beneficial interest in 200,000 shares or around 0.11 per cent of the company's share capital.

Last month, the company said it was to review its exploration assets in Mongolia and assess a technical path forward possibly through partnerships.

The company, which recently installed a new management team, added it plans to revisit the data from last year's troubled drilling campaign at Davsan Tolgoi to lower the risks for a drilling campaign planned for 2013.

Link to article

Link to MATD release

 

GMM: QUARTERLY ACTIVITIES REPORT – JUNE 2012

July 31, General Mining Corporation Limited (ASX:GMM) --

HIGHLIGHTS

·         Due diligence and field reconnaissance continues on potential coal exploration interests at Uvs in Mongolia

·         Work program scheduled to commence at Khangai Project in Mongolia during August

·         Additional tenement area secured in Khangai Fault area prospective for Copper–Nickel-PGM targets

·         Field reconnaissance on new WA gold projects completed in preparation for drilling later in the year

·         First stage of capital raising completed to raise $1,000,000, in conjunction with acquisitions of two new gold projects in Western Australia.

Link to report

Link to cashflow report

 

GMM: NON RENOUNCEABLE RIGHTS ISSUE TO RAISE A$0.87 AT 0.5C

July 27 -- On 31 January 2012, General Mining  Corporation Limited (ASX: GMM) (General Mining Corporation or the Company) announced to the market that it was proceeding with a non-renounceable rights issue (Rights Issue) of one (1) fully paid ordinary share (New Share) for every five (5) fully paid ordinary shares held on the record date, which has been set as 5:00pm (WST) on Wednesday, 8  August 2012 (Record Date), to shareholders with a registered address in Australia or New Zealand (Eligible Shareholders). Full details of the Rights Issue are set out in a prospectus, which was lodged with ASIC today (Prospectus).

Pursuant to the Rights  Issue, the Company will issue up to 17,406,925 New Shares at an issue price of $0.05 each to raise approximately $0.87 million (before issue costs).  New Shares under the Rights Issue will rank equally with the Company's existing fully paid ordinary shares and the Company will apply for quotation of the New Shares. 

In addition, subscribers in the Rights Issue will receive one free attaching op (New Option) (which will be quoted, subject to ASX approval) for every New Share subscribed for, to be granted in three tranches as follows: 

a)    the first tranche, comprising approximately 5,802,309 New Options, exercisable at $0.075 expiring 3 September 2013;

b)    the second tranche, comprising approximately 5,802,308 New Options, exercisable at $0.10 expiring 3 September 2014; and

c)    the third tranche, comprising approximately 5,802,308 New Options, exercisable at $0.125 expiring 3 September 2015. 

The terms and conditions of the New  Options will be described in the Prospectus. 

Investmet Limited (Investmet) has been appointed to act as underwriter to the Rights Issue. The terms of appointment, including fees payable, are set out below and in the prospectus.  The funds raised under the Rights Issue, along with funds already raised by way of the sophisticated investor placement (refer to the Notice of General Meeting dated 9 May 2012), are intended to be used as follows:

Link to release

 

Cash at end of Q at A$27.4m

FeOre: Quarterly Activities Report

July 27, FeOre Limited (ASX:FEO) --

Highlights:

      Encouraging progress has been made on the processing design that would be incorporated into the overall mine design of the Ereeny Project;

      Mine planning design remains on track for completion in the next quarter;

      Civil work completed for supporting utilities, including power supply, accommodation and water facilities;

      Water studies are underway to determine the location of optimal bore water sources;

      Exploration report completed for the Dartsagt Project. Application of the mining permit for the project has been submitted.

FeOre Chief Executive Officer, George Wang said:

"FeOre is making encouraging progress in the development of its Ereeny Project. Design work and utilities preparation is on track and on budget. The Management remains focused on the development of its flagship Ereeny Project and bring into commissioning a successful, sustainable iron ore producer.

We are also proud to have completed the exploration report for Dartsagt Project and have lodged the application for the mining permit which we expect to receive approval in the forthcoming quarter. This project will enhance the resource base of the Company and provide a complement to our Ereeny Project."

Link to report

Link to Quarterly Cashflow Report

 

Modun: June 2012 Quarterly Report

July 30, Modun Resources Limited (ASX:MOU) --

Highlights:

·         Drilling re-commences on Nuurst Project

·         Nuurst Project progresses towards the granting of Mining license

·         New Foreign Investment Law approved

·         Elections completed and coalition government being formed

·         Cash balance of $3.5 m

The Directors of Modun Resources Ltd (ASX: MOU) (Modun) are pleased to provide you with an update of activities during the June quarter 2012.   It has been a challenging three month period  with significant uncertainty created by the introduction of new foreign investment laws into Mongolia and a general election that is likely to result in a new coalition government led by the centre right Democratic Party coming to power.  These events and the market response to them have compounded the challenges of operating in Mongolia.  Despite these challenges, Modun has continued to progress the Nuurst Project towards the granting of a mining licence as well as putting in place plans to broaden its geographical focus when searching for additional projects to add to its portfolio.

Relevance to the Nuurst Coal Project:

Under the new  foreign investment  legislation, Modun is required to notify the Foreign Investment Agency within 180 days of its existing investment in the Nuurst Coal Project.  No further Mongolian Governmental approvals are anticipated.    However, the newly formed Government is yet to provide details as to how the new  Foreign  Investment  Law will be administered and implemented and Modun continues to work with the relevant Government authorities to ensure that all the requirements to progress the Nuurst  Project towards the granting of a mining licence continue to be met. 

Relevance to the Tsagaan Tolgoi Coal Project:

Modun anticipates that it will be required to obtain Mongolian Government Approval under the new Foreign Investment Legislation in order to complete the Tsagaan Tolgoi Coal  Project acquisition.

Modun continues to believe that Mongolia is an attractive investment destination, with a significant supply of largely untapped mineral resources and a highly competitive market advantage given its proximity to Mongolia's "resource-hungry" southern neighbour China.

However, given the uncertainty over the new Governments intentions as to how it will implement the new Foreign Investment Law and the likely impact this will have on the timing of receiving approval for new acquisitions, Modun plans to broaden its geographical focus when searching for additional resource projects to add to its portfolio.

Link to report

Link to Cashflow report

 

Credit Suisse starts Mongolian Mining at "neutral" & HK$4.7

July 25 (ET Net) Credit Suisse initiated coverage on Mongolian Mining Corporation (MMC)(00975) with a "neutral" rating and a target price of HK$4.7.

It believes MMC's margin will continue to expand in 2012-13 at 50% YoY, driven by a product-mix change, low production cost and strong volume growth. However, earnings growth will plateau in 2014-15 to 3-7%, when MMC starts to produce thermal coal seams post the  completion of railway lines.

Credit Suisse noted that MMC's valuations came off to a fair range due to the drop in coal prices and its lower-than-expected 2012 earnings growth. (KL)

Link to article

 

Credit Suisse Starts Winsway at "Neutral" & HK$1.2

July 25 (ET Net) Credit Suisse initiated coverage on Winsway Coking Coal (01733) with a "neutral" rating and a target price of HK$1.2.

It believes Winsway's earnings will likely come off from its 2011 peak more severely than coking coal prices, driven by decreased coking coal prices, a squeezed GP margin and low transaction volumes in the current stagnant market. 

Hence, Credit Suisse believes the current share price is fair given the deteriorated earnings of Winsway. 

Link to article

 

President of Mongolia opens trading on London Stock Exchange 

- His Excellency, Mr Elbegdorj Tsakhia, The President of Mongolia, opens the market
- Ceremony marks start of 2012 Mongolia-London Business Forum
- Event attended by Prince Michael of Kent and Lord Green, Minister of State Department of Business Innovation and Skills and Foreign Office

July 30 (LSE) His Excellency, The President of Mongolia, Elbegdorj Tsakhia, today opened trading on London Stock Exchange in a Market Open Ceremony. He was welcomed by Xavier Rolet, CEO of London Stock Exchange Group (LSEG).

The Market Open Ceremony was held to mark the start of the 2012 Mongolia-London Business Forum, a one day conference organised by the Embassy of Mongolia and Mongolian British Chamber of Commerce, hosted at London Stock Exchange. The Forum brings together leading politicians from both countries, UK investors and advisors and Mongolian businesses. Keynote addresses at the Forum are to be given by Prince Michael of Kent, Elbegdorj Tsakhia, the President of Mongolia and Xavier Rolet, LSEG CEO.

His Excellency, The President of Mongolia, Elbegdorj Tsakhia said:

"I am delighted to open London Stock Exchange's first trading day following the opening of the London 2012 Olympic Games. Stock exchanges are a vital instrument of modern international economic relations and in this regard I am pleased to praise London Stock Exchange's leading role in driving global capital exchange." 

Xavier Rolet, CEO London Stock Exchange Group said:

"I am delighted to welcome His Excellency, the President of Mongolia to London Stock Exchange to open trading this morning. The Ceremony is a symbol of our very close relationship with Mongolia and reflects our successful partnership with the Mongolian Stock Exchange. Events like today's Mongolia-London Business Forum demonstrate the significant interest in London in working with Mongolia to help the country realise its exciting potential. We look forward to the future and continuing to work with our partners in Mongolia."

In the first quarter of 2012, Mongolia's real GDP growth was almost 17 per cent on the previous year, and is forecast to grow 19 per cent next year, making it the world's fastest growing economy.

The Mongolian Stock Exchange successfully migrated to the new MillenniumIT trading platform on 2 July, marking the culmination of a 14-month project to completely modernise the country's capital markets infrastructure. As well as overhauling the market's technology, LSEG developed a wide-ranging education programme for market participants and worked with the Mongolian government to re-write the country's capital markets regulations and securities law.

Link to release

 

VOLUMES STAY LOW ON MSE

26 July 2012 (BDSec) - Volumes have been very low on the Mongolian Stock Exchange (MSE) lately due to the transition to the newly implemented trading system MIT. Only 220 shares of 6 companies worth of MNT 2.3 mn (~$1700) were traded on Wednesday. According to the MSE, the number of members that meet the requirements set by the new trading system has reached 17, compared to only 5 during the system launch.

MSE Top 20 index gained 0.49% or 95.37 points to 19,722.37 points. Baganuur (BAN), the largest domestic thermal coal supplier in Mongolia, jumped 13.64% to MNT 7,915 today. In the fiscal year of 2011, Baganuur removed 15.4 mn cubic meters of overburden and exploited and sold 3.2Mt of coal. 

Mongol Savkhi (UYN) advanced 2.86% to MNT 1700 while the prices of Atar Urguu (ATR) and Tavantolgoi (TTL) remained unchanged at MNT 40,000 and MNT 10,000, respectively.

Sharyn Gol (SHG) closed 0.10% down to MNT 10,390. Sharyn Gol (SHG) announced on Wednesday that the Ministry of Nature, Environment and Tourism has accepted its Environmental Impact Assessment Report for the planned new open pit mine at the Shaazgait thermal coal deposit ("Shaazgait"). Following the recent approval of its Feasibility Study by the Mineral Resources Authority of Mongolia, Sharyn Gol has now received all government approvals necessary to launch operations at Shaazgait.

Local News in Brief

- President Elbegdorj received Z. Enkhbold, after his nomination to congratulate him on being elected as the Speaker of the State Great Khural (Parliament). The President wished newly appointed Speaker of the Parliament Z. Enkhbold to work for the sake of people and put the rule of law and justice at the top of his priority and wished him success.

- SouthGobi Resources Ltd. (TSX: SGQ, HK: 1878) ("SouthGobi") provided operating update. In the news, they said that in recent weeks the Company has observed a substantial deterioration in sentiment among its customers and a decline in reference prices in key end-use markets. With the difficult conditions of the second quarter and the uncertainty regarding how the third quarter may evolve, the Company cautions that at this time sales volumes, pricing and production volume outcomes for the full year of 2012 cannot be estimated.

- The government meeting of July 25 did two appointments. Tsagaan Nanzaddorj appointed for new chairman of State Property committee. Tsagaan Nanzaddorj has worked as head of Privatization Department of State Property committee. J.Ganbat appointed as chairman of Board of Directors of Development Bank of Mongolia. J.Ganbat worked as head of Income Department of Finance Ministry.

Link to report

 

NUMBER OF ELIGIBLE MSE MEMBERS REACHES 17

July 24 (MSE) The number of members that met the requirements set by the new trading system is increasing day by day. Consequentially, the number of satisfactory members has reached 17.

1. "BDSec" JSC

2. "Altan Khoromsog" LLC

3. "Bulgan Broker" LLC

4. "Delgerkhangai Securities" LLC

5. "Frontier" LLC

6. "DCF" LLC

7. "MICC" LLC

8. "Tenger Capital" LLC

9. "MIBG" LLC

10. "Finance Link Group" LLC

11. "Rescap Securities" LLC

12. "TDB Capital" LLC

13. "Standard Investment" LLC

14. "Tuushin Invest" LLC

15. "Grandline" LLC

16. "Golomt Securities" LLC

17. "Progress Partners" LLC

Therefore, the number of members that contributed to the Settlement Guarantee Fund has reached 41; the number of members that concluded a revised agreement with MSE has reached 49, as well as the number of members that placed the collateral has reached 18.

Link to release

 

Sharyn Gol JSC announces the receipt of all government approvals necessary for production at the new open pit mine at the Shaazgait coal deposit

July 24, 2012 -- Sharyn Gol JSC (MSE: SHG; "Sharyn Gol") is pleased to announce that the Ministry of Nature, Environment and Tourism has accepted its Environmental Impact Assessment Report for the planned new open pit mine at the Shaazgait thermal coal deposit ("Shaazgait"). Following the recent approval of its Feasibility Study by the Mineral Resources Authority of Mongolia, Sharyn Gol has now received all government approvals necessary to launch operations at Shaazgait.

The new opencast mine will enable Sharyn Gol to retain its role as a supplier of low ash, low sulfur, and high calorific value product to the local market. Additionally, the Company is well positioned to utilize its existing infrastructure to expand into both regional and international thermal coal markets.

Recent coal washability test work, performed by the internationally accredited Stewart Laboratory in Ulaanbaatar, indicated that a product with 6500 kcal/kg heat value, less than 10% ash and 0.5% sulphur (all air dried basis) can be produced with high plant yields. These results are consistent with Sharyn Gol being able to produce a premium export quality thermal coal.

Consequently, Sharyn Gol's management is reviewing strategic options for washing and exporting coal to maximize potential revenue streams in coming years. Sharyn Gol is in a strong financial position, with a USD equivalent cash balance of $10m and no debt. Sharyn Gol JSC is also pleased to announced the receipt of 2011 IFRS-compliant, annual financial statements, audited by Ernst & Young. The statements are available on Sharyn Gol's website (www.sharyngol.com).

Chairman Batkhuu Batmunkh added, "We are pleased that the development of the new mining area at Shaazgait remains on schedule, and are excited by the prospect of realizing our vision of launching modern commercial operations before the year-end."

Link to release

 

Khan Investment Management Update (24/07/2012)

Mongolia has a new government (Mogi: well, not exactly, just elected the speaker yesterday on Tuesday, the very first order in the path to forming a government), the Mongolian Stock Exchange (MSE) is now trading on the Millennium IT System (introduced by the London Stock Exchange), Naadam festivities are over, and the country is now poised for intensified growth as Oyu Tolgoi approaches production and other mining and infrastructure projects come on line. In our view, there has never been a better time to gain a diversified exposure to the Mongolian growth story.

June was a challenging month for the Khan Mongolia Equity Fund (KMEF) with performance suffering from continued short-term price volatility exacerbated by political stability concerns in the lead up to Mongolia's general elections held on June 28th and global anxieties about Chinese growth, resulting in a selloff of Mongolian mining companies listed on international exchanges, particularly those in the coal sector. We believe that Mongolian resource and mining stocks have been grossly oversold – largely in line with global equities and the resource sector in particular – without consideration to individual company analysis or even the most conservative estimations of valuation. 

Of the 19 securities held within the portfolio as at end of June, only 3 recorded positive gains for the month. The worst performer was Xanadu Mines (XAM:AU) which shed 26.00%. Xanadu remains a core position within the portfolio and one of our top stock picks, which we continue to acquire on price weakness. Erdene Resource Development (ERD:CN) lost 20.00% and Mongolian Mining Corporation (975:HK), Mongolia's largest coal exporter, fell 16.79%. 

The Khan Mongolia Equity Fund performance for June was -10.33%.

The Net Asset Value as at 30 June 2012 was USD 67.17

The June Factsheet can be downloaded by registered users of the Khan Investment Management website – www.Khan-Management.com

In June, Mongolia successfully completed its 7th free and fair national parliamentary elections. The business friendly Democratic Party (DP) will lead a new coalition government 75%/25% in partnership with the nationalist "Justice Coalition" (JC) which is led by the Mongolian People's Revolutionary Party (MPRP), headed by former President Enkhbayar, who is now on bail awaiting trial at the end of this month on allegations of corruption. Mr N. Altankhuyag, head of the DP, will become Mongolia's new Prime Minister. We expect the DP, with 75% control of the coalition, to enforce their pro-business agenda upon the junior members of the coalition, welcoming foreign investment, driving positive policy and encouraging growth over the next 4 year term.

The new DP led government will sit for the first time this week and we are confident that they will be quick to hasten growth and development, including the slated privatization of promising state-owned enterprises, encouraging growth in non-mining industries, and maintaining double digit economic growth targets.

We reiterate that China is not broken, that absolute growth still remains strong, and that even in the advent of a Chinese "slow down", Chinese consumption of Mongolian resources will continue to increase at considerable multiples as access to the country's comparatively cheap commodities improves via new infrastructure developments.

The Mongolian Stock Exchange (MSE) has now officially adopted and is operating the Millennium IT Trading system provided by the London Stock Exchange, allowing for T + 3 settlements. This significant development in conjunction with additional regulatory reform will assist further in attracting capital to the nascent bourse.

In early June, Temasek, Singapore's sovereign wealth fund, purchased 5% of Ivanhoe Mines (IVN:US) and the world's richest woman, Gina Rinehart, is also believed to be acquiring significant Mongolian mining assets through her company Hancock Prospecting. Turkish Airlines recently announced services from Istanbul to Ulaanbaatar, and MIAT Mongolian Airlines has increased the number of direct flights from HK.

In our view, there has never been a better time to gain exposure to the Mongolian growth story. After almost 700 years of occupation and oppression, and after only just over two decades of democracy, the country is finally on the precipice of financial independence, however for the time being remains heavily dependent on foreign investment. Mongolia is experiencing phenomenal GDP growth – currently the fastest in the world – growth not seen in Mongolia since the last of the great Khans.

Within the next couple of years the country will have the potential capacity to effect global coal prices and will be one of the largest copper exporters in the world. With a massive resource endowment literally on the doorstep of the world's largest and growing commodity consumer, poor infrastructure, a small population, and masses of required development needed in order to extract the country's mineral riches there are ample investment opportunities.

We foresee many attractive IPOs in the coming months, a number of positions we are invested in remain at very attractive entry points, and the long-term growth story and prospects for capital appreciation remain inherently strong.

I will be traveling to Melbourne from 26th July to 3rd August, Singapore from 5th to the 14th August and Hong Kong from 15th to 17th August to meet with our investors and prospects.

 I will then travel to Mongolia from the 19th August to 7th September where in conjunction with my colleagues we will be visiting a number of Chinese border crossings, surveying a number of exploration, developing and operating mines, undertaking company visits in Ulaanbaatar, participating in the Discover Mongolia 2012 conference and finally, I will be speaking at Frontier Securities' Invest Mongolia 2012 conference. For investors interested to visit Mongolia, we recommend that the last week of August and first week of September is a great time to gain an intensive insight into Mongolian opportunities, participate in a number of exciting conferences, and meet with officials, regulators and companies. 

I thank our investors for their continued support and I look forward to updating you further of our developments next month.

Best regards,

Travis Hamilton

Managing Director

KHAN INVESTMENT MANAGEMENT LIMITED

Link to Khan

 

BoM issues 10 billion 28-week 17.17% bills

July 30 (Bank of Mongolia) BoM issues 28 week bills worth MNT 10 billion at a weighted interest rate of 17.17 percent per annum.

Link to release

 

Hogan Lovells advises General Electric on Mongolia's first renewable energy independent power project

ULAANBAATAR, 31 July 2012 (Hogan Lovells)– Hogan Lovells advised General Electric ("GE") on the financing and equity aspects of a US$122 million 50MW wind farm in Salkhit, Mongolia, the first renewable energy independent power project in Mongolia.

The 50MW wind farm is located 70km southeast of the Mongolian capital Ulaanbaatar and is part of a renewable energy programme intended to reduce the country's dependence on coal. The project, which is expected to become operational in 2012, will supply almost 5% of Mongolia's electricity.

The project is being developed and sponsored by Mongolia-based Newcom LLC, which retains a majority interest in the Mongolian project company, Clean Energy LLC. GE Pacific Private Limited acquired an equity interest in Clean Energy LLC in March 2012 and debt financing for the project closed in July 2012.

Hogan Lovells' role included drafting and revising Mongolian law-governed transaction documents, review of financing agreements, issuing legal opinions, and advising on applicable legislation and general matters of Mongolian law.

The cross-border team advising GE was led by Michael Aldrich, managing partner of the Ulaanbaatar office, and included partners Jamie Barr and senior associate Laurence Davidson in Hong Kong, partner James Harris and senior associate Lawrence Low in Singapore, and partner Chris Melville, senior associate Anthony Woolley and associate Solongoo Bayarsaikhan in Ulaanbaatar.

Commenting on the transaction, Ulaanbaatar office managing partner Michael Aldrich said:

"We have a long-standing relationship with GE in the USA and across our international network and we are pleased to augment this relationship with our capabilities in Mongolia. We have extensively advised clients on their energy projects in Asia, establishing a prominent reputation for ourselves as a trusted advisor in the region. Representing GE on this landmark transaction further reinforces our position as the leading international firm based in Mongolia."

Link to release

 

Mott MacDonald advises EBRD in financing of US$100 million Mongolian wind farm

July 31 (Mott MacDonald) Construction is underway on Mongolia's first wind power scheme which is being developed at Salkhit Uul, 75km from Ulaanbaatar in Mongolia. Mott MacDonald supported the European Bank for Reconstruction and Development and FMO as lender's technical advisor on the scheme which is being developed by Newcom LLC, a Mongolian investment company.

The US$100 million onshore wind farm is the country's first independently developed power project and is the first project of any type within Mongolia to be financed by international project finance. It will comprise of 31 General Electric 1.6 XLE wind turbine generators giving a total capacity of 49.6MW. The clean power generated by this wind farm will service customers connected to the Mongolian central grid.

It is hoped that the wind farm will promote private sector involvement in the country's energy sector through the development of a green energy power source. The project will also help reduce the impact of power generation in Ulaanbaatar, which is one of the world's most polluted cities.

Mott MacDonald's project director Clare Rhodes-James said: "This is a particularly challenging project as the Mongolian environment is quite extreme, with winter temperatures dropping to -50°C and summer temperatures rising to 50°C, while there can also be large diurnal temperature variations. The project is also the first renewable power project to connect to the Mongolian grid, and represents an exciting challenge to the grid operator."

Marc Buiting, senior investment officer at FMO added: "Mott MacDonald is one of the few engineering firms to fully understand how to analyse and report on bankability issues, as demonstrated on the Salkhit project. They also displayed a very welcome open attitude on areas of uncommon ground for any participant involved in the project, such as the cold-weather conditions and their impact on technology and construction management."

Mott MacDonald is monitoring construction of the wind farm which is scheduled to finish by the end of 2012. The consultancy will continue to provide operations monitoring support for up to three years following completion.

Link to release

 

Frontier Securities: Capital Raising & Investment Conference 3 - 5 Sept. 2012

July 24 (ABN Newswire) Frontier's annual conference is the most comprehensive forum on investing in Mongolia. It facilitates foreign investment in Mongolia by giving investors insight into what investment opportunities exist, while streamlining the capital raising process by connecting service providers to Mongolian companies looking to raise capital internationally. Mongolia's economy is developing at an extremely rapid rate, and the investment climate is changing at the same pace. The general election on June 28 will change the political scene dramatically. So, don't miss out on the latest trends and investment prospects! Attending Frontier's conference will keep you up to date with all the latest information on the Mongolian investing scene and keep you ahead of others. 

http://frontier-conference.com

Location: Government Palace, Ulaanbaatar Mongolia

Start Date: Monday, September 03, 2012
End Date: Wednesday, September 05, 2012

Link to release

 

CHIBA BANK OF JAPAN IS TO HOST A MEETING IN MONGOLIA

July 24 (InfoMongolia) The Chiba Bank of Japan has announced that they were planning to host an official business meeting dedicated for the companies and organizations connecting Japan and Mongolia in Ulaanbaatar on September 07-09, 2012.

This is the first time ever that Japanese Bank is organizing a meeting related with Mongolian economy. The registration of interested participants has started on July 23, 2012.

The Chiba Bank was founded in 1943 and is recognized as the second largest regional bank of Japan coming after the Yokohama Bank. The Chiba Bank, Ltd. Has branches in Osaka, New York, London, and Hong Kong respectively.

Link to article

 

Mongolian Airlines launches its second international route from Ulaanbaatar, Tokyo's Haneda

July 25 (anna.aero) On 14 July, the private Mongolian carrier Mongolian Airlines launched services from Ulaanbaatar (ULN) to Tokyo Haneda (HND), making the Japanese capital its second international destination following the launch of Hong Kong services just over a month ago. Thrice-weekly services are now offered on the 3,000-kilometre route, and will be operated using A319s on a seasonal basis until early September.

Link to article

 

AUSTRALIAN GOVERNMENT OFFICIALS ARE STUDYING: NEW GOVERNMENT POLICY OF MONGOLIA

July 31, (InfoMongolia.com) Representatives of the Government officials from the Commonwealth of Australia, who are on official acquaintance trip to Mongolia have met with member of the Parliament Ts.Oyungerel today on July 31, 2012. The Australian Government sends its officials in positions higher that Chairman of Government Authorities on an acquaintance trip to foreign countries for interchanging experiences and formulating further partnership directions. The delegation team comprises a total of 13 people from Australia's Central Bank; Office of Human Services; and from the Second Gillard Ministry including officials of Ministry of Sustainability, Environment, Water, Population and Communities; Ministry of Regional Australia, Regional Development and Local Government; Attorney-General, Ministry of Health and Ageing; Ministry of Tertiary Education, Skills, Jobs and Workplace Relations, and Australian Taxation Office. The delegations are to work in Mongolia for a period of two days and their main objective is investigating partnership directions and possibilities with Mongolia's new Government. Hence they have met with member of the Parliament Ts.Oyungerel to comprehend more about on current DP policies and perspective of a female member.

Link to article

 

New Mongolian parliament speaker elected

ULAN BATOR, July 24 (Xinhua) -- Democratic Party nominee Z. Enkhbold was elected as Mongolia's new parliamentary speaker on Tuesday.

A former chairman of the parliament's standing committee on foreign policy and security, Enkhbold was elected in a parliamentary session here chairman of the unicameral Mongolian State Great Hural (parliament).

Voting on the position took place in the absence of the ruling Mongolian People's Party (MPP), which boycotted the vote in protest at what it claimed was a lack of consultation by the Democratic Party in nominating a candidate for the position on July 16.

The Democratic Party of Mongolia (DP) won the June 28 general election, capturing 31 seats in the country's 76-member parliament, while the MPP obtained 27 seats.

Link to article

 

MPP TO CHALLENGE CONSTITUTIONALITY OF THE NEW SPEAKER

July 25 (InfoMongolia.com) Representation of the Parliamentary opposition - Mongolian People's Party (MPP) grouping have made a press conference yesterday, following the new Speaker of the State Great Khural (Parliament) Z.Enkhbold was elected at the First Plenary Session of the Parliament and was received by the President of Mongolia on July 24, 2012.

Chairman of the MPP group at the Parliament N.Enkhbold, Parliament members Ya.Sodbaatar and S.Byambatsogt at the press conference explained that electing of new Speaker without MPP representation breached several laws and articles. Stating, "The procedure of electing new Speaker of the Parliament violated several articles of the Law of the Parliament of Mongolia and Bylaw of the Session of the Parliament.

The announcing of the First Session of the Parliament and appointing the Speaker are regulated under several terms of law. More specifically, the First Session of the Parliament is announced by the eldest member and then chaired. There is no article state that the next eldest member of the Parliament should chair the First Session. In other hand, none of the political force gained over 39 seats out of 76 in the Parliament, therefore the party received majority seats has to negotiate with other political representatives in the Parliament. In this scope, the MPP group asked the candidate for Speaker (Z.Enkhbold) to attend the MPP grouping meeting for discussions and express his attitudes. But the nominee for Speaker refused to come. However, the MPP group announced to express his position and to co-elect the Speaker no later than Wednesday (July 25, 2012). Also, the eldest member D.Demberel, who obeys to chair the First Session of the Parliament had issued a resolution to open the Session at 10:00 am on Wednesday, July 25, 2012. Nevertheless, the Democratic Party group at the Parliament neglected the above forcefully, opened the Session and elected the Speaker, where Parliament members were not assembled with its full memberships, in other words only 42 members were present out of 69. The fact of electing the Speaker of the Parliament breached the law."

Also, noted that the DP group did not implement the article states that the President of Mongolia had to attend the First Session of the Parliament. "As a matter of fact, the MPP group will claim for the Constitutional Court of Mongolia", announced at the press conference.

Link to article

 

U.Enkhtuvshin elected as new chairman of MPP

July 25 (news.mn) Mongolian People's Party (MPP) plenum started yesterday at Independent Palace. The plenum continued till midnight. As informed before the plenum discussing hot issue such as nomination of new chairman and secretary general of party. U.Enkhtuvshin elected as new chairman of MPP by 89 per cent vote.

By the MPP's rule chairman will propose name of secretary general. New chairman asked time on nomination of secretary general and plenum will continue today at 12 am. According the source former MP G.Zandanshatar and J.Sukhbaatar and Environment and Tourism minister D.Tsogtbaatar will nominate as secretary general of MPP.

Former chairman S.Batbold delivered a speech in the plenum. S.Batbold named a several reason of MPP's fail on June 28 parliamentary and local election. "MPP was in difficult condition. Some politicians used party's previous name and aimed to split MPP. Also was hard pressure from judicial organization. During the election campaign some candidates and local governors was arrested. But we have to find reason of defeat among us not outside. We have to review our platform and policy. MPP's rating is going down especially in Ulaanbaatar city. We have to consider this point" said S.Batbold.

According to the U.Enkhtuvshin Leading board members expressed their resignation. This issue will discussed today.

Link to article

 

MPP Changes Leadership

July 26 (news.mn) Plenum of Mongolian People's Party ended yesterday after two days session. Two days plenum renewed party leader and governing board. As informed before U.Enkhtuvshin will lead the party instead of S.Batbold. U.Enkhtivshin elected by majority vote of plenum delegates.

Yesterday's session elected also new general secretary. Plenum delegates voted for three person as general secretary. There are G.Zandanshatar, Minister for Foreign relation, D.Tsgogtbaatar, Minister for Environment and Tourism and J.Sukhbaatar, former MP. And as results of vote G.Zandanshatar elected as general secretary of MPP, replacing U.Khurelsukh.

Besides general secretary MPP has four secretaries. Former MP Ts.Munkh-Orgil nominated as secretary charge for capital city, former MP J.Sukhbaatar a secretary charge for local organizations, D.Sarangerel charge for media and former Minister for Agriculture, Food and Light Industry T.Badamjunai charge for finance and funding.

The plenum also resigned Governing Board and recruited new members.

Link to article

 

HEAD OF MPP HELD TALKS WITH THE SPEAKER OF THE PARLIAMENT OF MONGOLIA

July 27 (InfoMongolia) On July 27, 2012, the newly elected Head of the Mongolian People's Party (MPP) U.Enkhtuvshin and Minister for Justice and Home Affairs, Member of the Parliament Ts.Nyamdorj held a 40-minute talk with the Speaker of the State Great Khural (Parliament) Z.Enkhbold.

The parties have exchanged thoughts on resolving the current issues that have commenced regarding the First Parliament Session. After the meeting, Member of the Parliament, Head of MPP U.Enkhtuvshin gave brief answers to the questions of reporters.

On what issues did you exchange thoughts with the Speaker of the Parliament?

On the part of MPP, we will not hinder with state operations. We have numerously expressed our position to run all operations in the frames of law. The First Parliament Session was held illegitimately, where the Speaker of the Parliament was elected. Two articles were violated. The first article sounds that negotiation is held, where one part raises an issue through a written state, whereas the other part is to also give a written answer. The second article sounds, the current eldest member of the Parliament is to chair the First Session. However, these articles were violated, where the Session was chaired by Parliament Member L.Tsog, although D.Demberel was present in the Government House. These types of violation will complicate further Parliament procedures. In other words, there will be no mutual understandings. We put this issue during this meeting. We are ready to enter the Parliament session. The main matter is our position to run all procedures in the frames of law.

What is the MPP position on the two candidates in Uvurkhangai aimag?

Within the talks, we have discussed to accelerate the court procedure of our two candidates in Uvurkhangai aimag and their oath taking process. We asked to pay exclusive attention to this matter after he will be officially appointed as the Speaker of the Parliament. We also requested to make a manual count of the votes of Arkhangai, Uvurkhagai, Khentii aimags and Sukhbaatar and Chingeltei District of Ulaanbaatar city. We have agreed to make a hand count the votes of the above aimags and districts, and we have negotiated to establish work groups from the two sides in order to resolve these issues.

Regarding the fact of electing the Speaker of the Parliament, the MPP addressed the Constitutional Court. Does it make sense that the MPP members will not participate in the Parliament session until the decision is released from the Constitutional Court of Mongolia?

Work groups are to be established from the two sides. If we can come to an agreement, we do not have to wait for the decision of the Constitutional Court.

Will the Speaker of the Parliament elected again?

It is in discussion. At today's meeting, we exchanged opinions, if we could come to a consensus and resolve the matter. In any case, we have negotiated to establish a work group on the controversial issues.

Link to article

 

DP group says "impossible to accept" MPP's proposals

July 30 (news.mn) Since today political party groups in the parliament started their regular session. Right now DP and Justice coalition established their groups. By the law after nomination of Speaker political parties who has a seats should submit their proposal to the Speaker within the 24 hour. MPP group who didn't attend the first session not confirmed their groups in the parliament.

DP group and Justice coalition group held a meeting today. DP group have discussed MPP's proposal. MPP's chairman U.Enkhtuvshin have met with N.Altankhuyag, chairman of DP on Friday and expressed three point request. First, to do re-nomination of Speaker, second, to solve issue related two MPP candidates, who court decided they violated the Election law, in Uvurkhangai province and third, to do re-count of vote by hand in five polling stations.

DP group discussed MPP's request and said "impossible to accept" MPP's request. "Nomination of Speaker done according to the law, any violation of law should be decided in court, not between political parties. And regarding third point, the Election law says counting of electors vote will be done through digital machine. The General Election commission officially declared digital voting machine worked properly" said D.Erdenebat, chairman of DP group in the parliament.

"But as political force who get majority seats in the parliament DP have to negotiate with MPP to solve current situation" added D.Erdenebat.

Link to article

 

THE PARLIAMENTARY CANDIDATES RE-VOTING TO BE HELD IN SEPTEMBER 2012

July 27 (InfoMongolia) As the candidates that had run in the 22nd electoral district (Bayanzurkh-Nalaikh) and the 26th electoral district (Songinokhairkhan) of the 2012 State Great Khural (Parliament) Elections did not reach the 28% votes, a re-voting is to be held in the near.

Candidate of the Democratic Party (DP) L.Erkhembayar and candidate of the Mongolian People's Party (MPP) D.Sumiyabazar will run in the re-voting in Songinokhairkhan District, whereas MPP candidate B.Batzorig and MPP candidate D.Arvin will run in the Bayanzurkh-Nalaikh Electoral District.

Also, MPP candidates in Uvurkhangai aimag S.Chinzorig and N.Tumurkhuu have been suspended from receiving their Parliament Member sovereign power rights from the Supreme Court on the grounds that they had violated the election law.

Moreover, as the three Parliament members from the "Justice" Coalition (MPRP-MNDP) have not yet taken their oaths, the 76 members of the Parliament are still not composed. Regarding this situation, the Head of the General Election Commission N.Luvsanjav has made a statement to the reporters yesterday on July 26, 2012.

He said, "The re-elections in Bayanzurkh and Songinokhairkhan districts have been decided to be held in September, 2012. The particular date is not yet to be announced. Works are going at the preparation stage. The primary court has pleaded the controversy of MPP candidates in Uvurkhangai aimag S.Chinzorig and N.Tumurkhuu to be guilty. The follow-up court trial has been postponed by an indefinite period. The electoral district committee will discuss the matter after the decision is released from the court."

Also, the date for Parliament member oath taking of the "Justice" Coalition party-listed candidates of O.Baasankhuu, Ts.Oyunbaatar and Ts.Tsolmon is to be released by the Coalition Board meeting.

Link to article

 

SPEAKER OF THE PARLIAMENT RECEIVED THE ADMINISTRATIONS OF THE BANK OF MONGOLIA, NSO AND THE NATIONAL AUDIT OFFICE

July 27 (InfoMongolia) On July 26, 2012, the Speaker of the State Great Khural (Parliament) Z.Enkhbold has received the administration of the Bank of Mongolia, Governor L.Purevdorj, First Deputy Governor B.Javkhlan and Deputy Governor N.Zoljargal.

During the meeting, Governor of the Bank of Mongolia L.Purevdorj made introductions on the current and future tendencies of the Bank, State Budget and Fiscal Policy. President L.Purevdorj said, "As of May 17, 2012, inflation had reached 17%, out which 67% was meat price increase. Today, inflation has decreased down to 14.7%, where meat price growth is at 49%. If we extract the meat price growth, inflation will go as low as 8%. Also, due to the weakening foreign asset flow pace, the pace of money supply is also slowing down. One significant factor that will affect inflation in the future is the issue of budget deficit. With the increased foreign trade deficit and increased domestic budget deficit, quotation has been stable up until May-June, from where it started to increase".

The Speaker of the Parliament emphasized, "We need to arrange the matter of keeping meat management apart from external factors and to decrease inflation. This is a matter fully under our power without any external approval."

Also same day, Speaker of the Parliament Z.Enkhbold received the Chairman of the National Statistical Office of Mongolia (NSO) S.Mendsaikhan, First Vice Chairman G.Gerelt-Od and Vice Chairman B.Erdenesuren, following the Auditor General of the Mongolian National Audit Office Ch.Radnaa, Under Auditor General B.Batbayar and Audit Office Director Ts.Baatar, where the Speaker Z.Enkhbold familiarized with their works.

Link to article

 

State Property Committee & DBM Has New Chairmen

July 26 (news.mn) The government meeting of July 25 did two appointments. Tsagaan Nanzaddorj appointed for new chairman of State Property committee. Tsagaan Nanzaddorj has worked as head of Privatization Department of State Property committee.

J.Ganbat appointed as chairman of Board of Directors of Development Bank of Mongolia. J.Ganbat worked as head of Income Department of Finance Ministry.

Link to article

 

CAPITAL BANK APPROVED FOR 6% MORTGAGE LOANS ALONGSIDE STATE BANK

July 26 (InfoMongolia) The regular Cabinet of Ministers' meeting took place on July 25, 2012, where following issue has been discussed and resolved accordingly.

At the meeting the Minister for Finance D.Khayankhyarvaa introduced the Capital Bank's proposal for cooperation with the Government within the frames of an action to grant civilians with low and medium incomes with 6% interest rate mortgage loans.

From commercial banks of Mongolia only the State Bank and Capital Bank have submitted their cooperation proposals to issue of the loans with its own funding, where the Capital Bank expressed its interest in attaching amendments to the cooperation agreement and said that if the amendments are to be attached they are capable of granting loans worth of 5-10 billion MNT from their own financial sources.

Afterwards, the Cabinet imposed duties upon the Finance Minister D.Khayankhyarvaa and the Management Board of the Development Bank to take relevant measures to involve the Capital Bank in granting the citizens with low interest loans, building loan funding upon own sources of Capital Bank and Development Bank as well.

Link to article

 

Constitutional court rules down N.Enkhbayar's appeal

July 25 (news.mn) The Constitutional court of Mongolia took a final decision regarding former president Nambar Enkhbayar's petition. N.Enkhbayar complained to the Constitutional court over his right to be nominate as candidate and elected guaranteed by Constitution of Mongolia. The Genaral Election Committee has refused register N.Enkhbayar and his son E.Batshugar and lawyer S.Narangerel as candidate from Justice coalition (the coalition of Mongolian People's Revolutionary Party, headed by N.Enkhbayar and Mongolian National Democratic Party, headed by M.Enkhsaikhan) to the parliamentary election which took place on June 28, 2012.

The Constitutional court has reviewed N.Enkhbayar's petition on June 27 by 3 seats hearing and decided not accept appeal. But N.Enkhbayar doesn't agreed with the decision and appealed to high level of Constitutional court. On July 24 the Constitutional court remained decision of 6 seats hearing in effective.

Link to article

 

IAAC URGES PROMPT SETTLEMENT OF N. ENKHBAYAR'S CASE

July 30 (InfoMongolia) On July 30, 2012, the Public Relations Department of the Independent Authority Against Corruption of Mongolia has held a press conference at the Mongol News Center.

The officials stated, "Since the Authority Against Corruption has been appointed with new administration, we have enhanced the inquiry of high officials within the frames of law and are intensively combating against corruption. For instance, we are inquiring the act of the Head of the Mongolian People's Revolutionary Party (MPRP) N.Enkhbayar, in which he squandered large amount of state assets by misusing his power of position, where he was restrained and taken into conviction under the regulation of the Sukhbaatar District Court. However, we can see from the repeated postponing of N.Enkhbayar's trial how the self-protection barrier of the corrupt has become thick. Overall, the cases of State Great Khural (Parliament) members and other state spokesmen eventually die away, whereas the cases of normal citizens are promptly resolved. The time has come for this to stop. Thus, we remind all levels of juridical organizations to adhere to the principle of equality of all citizens in front of the law."

Tomorrow, July 31, 2012, is scheduled the trial of N.Enkhbayar at the Sukhbaatar District Court. However, there are many that predict the trial to be postponed once again alike to the previous ones. Thus, this press conference was a reminder from the Independent Authority Against Corruption to the juridical organization to promptly resolve this matter and finish.

Link to article

 

TWO MEMBERS OF JUSTICE COALITION TO TAKE THEIR OATHS

July 30 (InfoMongolia) On July 30, 2012, the group meeting of "Justice" Coalition (MPRP-MNDP) group at the State Great Khural (Parliament) was held at the State Palace. The Chairman of this Parliament group N.Battsereg informed the reporters on the discussed matters of the meeting.

N.Battsereg said, "The "Justice" Coalition regulation was discussed and ratified with today's meeting. With this regulation were established the regulations and principles that coordinate the procedures of members with internal affairs, other parties, groups and coalition and state systems, and were reflected articles regarding the group leader's legal authorities and responsibility and the order of meetings. Also, was discussed the adjuration matter of our party (MPRP) listed Parliament members.

O.Baasankhuu and Ts.Tsolmon will take their oaths at this week's plenary assembly meeting. However, the 7th party listed Ts.Oyunbaatar's adjuration has been temporarily postponed. This is due to the advice of lawyers to review the rationale released by the Constitutional Court on the particular candidate of N.Enkhbayar. Thus, the Coalition Administrative Council deems to re-address the Constitutional Court with the case of N.Enkhbayar. We will decide on our third member after the resolving of this matter."

Also, the composition and membership of the Coalition Government will be discussed between the "Justice" Coalition and Democratic Party work groupings. Previously, during the concession work group meeting, it was negotiated to compound the Cabinet members by a 75-25 rationale. By this agreement, "Justice" Coalition will decide upon which members to recommend on which position of which Ministry within the Government composition.

Link to article

 

Mogi: an unworthy article for THE Economist

Mongolia: Change at the top

July 30, (The Economist) THE MONTH-LONG wrangle over the make-up of Mongolia's new governing coalition is almost over. It was announced on July 19th that the Democratic Party (DP), which has 31 of the parliament's 76 seats and is the party of the current president, will rule in coalition with several smaller parties that have a total of 11 seats. (Mogi: numbers which will gain after few more seats are decided) They replace a coalition led by the Mongolian People's Party (MPP), the main heir of the Mongolian People's Revolutionary Party which governed during Mongolia's one-party communist era from 1921-1990, so the transfer of power marks only the second time the MPP will have been out of direct control in its 90-year history.

The June 28th election may have left no party with a majority, but Mongolian politicians can at least take comfort in the fact that it didn't turn violent: the previous poll in 2008 was marred by several days of post-election rioting that left five dead and millions of dollars in damage.

Notable among the challenges facing the coalition is how to deal with the rise of resource nationalism. Many Mongolian politicians want the lucrative mining contracts signed with foreign companies to be renegotiated in the government's favour. According to Dale Choi of Origo Partners, a private-equity company, 25 members of parliament can be classed as "resource nationalists". They include Nambariin Enkhbayar, the ex-president (Mogi: Enkhbayar is not an MP) who is on trial for alleged corruption and who leads one of the smaller parties in the coalition, called, confusingly, the MPRP. Mr Enkhbayar's presence in the ruling coalition provides an unusual twist. Having accused opponents of waging a politically motivated legal campaign against him, he has not ruled out running for the presidency again in the future, and has been vocal about changing the country's stake in mining contracts. (Mogi: vocal but since quiet after the election)

According to Luvsandenvev Sumati of the Sant Maral Foundation, a polling firm, Mr Enkhbayar is not a danger to Mongolia's sitting president, Tsakhiagiin Elbegdorj, in next year's presidential election, "since the coalition agreement states that they will have a single candidate representing all three parties"—and that is likely to be the incumbent. Mr Enkhbayar could, however, be a danger to relations with the big foreign mining companies such as Ivanhoe and its largest shareholder, Rio Tinto, if his stance on natural resources turns out to be anything other than political posturing.

The new coalition will also need to find a better way to distribute Mongolia's mining wealth. Many voters, especially those in the shanty town of "gers"—felt tents—north of the capital, believe too much goes to line the pockets of the powerful, at the expense of the population at large. The economy grew by 17.3% last year thanks to a booming mining sector, but on Transparency International's corruption perception index the country regressed from 116th place to 120th in 2011.

"This was an election where people actually tried to change the political establishment," says Mr Sumati in reference to the rise of smaller parties challenging the DP and the MMP (Mogi: MMP?!). Voters, it seems, were fed up with what they saw as parties only helping those with influence.

Following the announcement of the new coalition, the MMP's (Mogi: again MMP?!)  main policy-making body, its governing committee, resigned en masse. "They lost the presidential election last time, and now the parliamentary one," says Mr Sumati. "This is a party used to being attached to state machinery so they must feel something is not working for them."

Their losses might be temporary, however, since Mongolian voters could well elect an MMP candidate in next year's presidential election in order to balance out the influence of the two main parties. Consequently the new coalition will be doing all it can in the months ahead to make a case for retaining the new status quo.

Link to article

 

Coalition takes over at crucial time in Mongolia's development

July 24 (Oliver Belfitt-Nash for bne) Three weeks after winning 31 out of 76 seats in the Mongolian parliamentary elections on June 28, the Democratic Party (DP) said it has formed a coalition with a number of smaller parties in order to secure a majority. This untested party (Mogi: I wouldn't say DemParty is an untested party, ruled once for a full term 96-00, and in many instances in coalition) will oversee a crucial period in Mongolia's post-communist history as large resource projects come onstream.

The DP is known for its progressive pro-business stance, but has historically been the weaker of the two major parties (Mogi: Ehmmm, Oli is mistaking some other party to be a bigger party than DP), originally formed as a unification of many pro-democracy factions after the fall of socialism in the early 1990s.

The next biggest party in the coalition is the controversial Mongolian People's Revolutionary Party (MPRP), a splinter group from the old communist party. This is led by Nambaryn Enkhbayar, who was arrested before the election on corruption charges and is to be tried at the end of July. The MPRP's aggressive policies on national ownership of the country's coal, copper, uranium, gold, zinc and lead mines (Mogi: I wouldn't say it is MPRP's official policy to nationalize mines, but only something they've used in their election campaigns, time will tell if it is actually their policy, which, looking at their coalition with DP, likely not) has worried some investors that the new government may further lean away from luring foreign investment. They are due to take four or five of the 18 ministries on offer, and analysts predict that a member of this party could take the finance minister position, key to the country's investment agenda.

These two may seem like an unlikely pair for a coalition, but both can agree that the old communist party, the Mongolian People's Party or MPP, has had its turn and must now make way. While there promises to be some heated debates over the plan for the next four years, the DP have stated that any coalition partners must follow their lead. The DP are clearly pushing to make this government their own, and this will be their chance to shine. (Mogi: DP, MPRP, Civil Will Green Party has already merged their election manifestos before deciding to officially unite).

Money & mining

Over the next four years, the country's vast mineral wealth will be exploited and the state coffers will begin to fill, putting the new government in a strong but testing position.

"The importance of this next term cannot be understated," says Travis Hamilton, founder of the Khan Mongolia Equities Fund. "The stakes are a lot higher now, and the actions over the next four years will determine the coming decades. Mongolia is still heavily dependent on foreign investment, but when they run at capacity they will be able to go on their own. The country is on the precipice of financial independence."

The issues of natural resources, investment and wealth distribution are some of the most important campaign issues for the public, and now the DP must prove they can spend the mining revenues responsibly.

The new prime minister,  Norov Altanhuyag, (Mogi: Altankhuyag is only a candidate, however it might be inevitable) is an ex-physics professor-turned-revolutionary in 1989, and has been fighting as an underdog ever since. He speaks calmly and confidently, his words well-rehearsed. "In the last four years we have just started to use our mining resources, but the coming four years is a tipping point," says Altankhuyag. "We have huge discussions on how to use the mining wealth."

There is already a mechanism being developed that allows the government to dish out shares of major mining projects to every member of the public. The country's largest coking coal mine, Tavan Tolgoi, is due to be listed next year in Hong Kong and London with potentially over 2m shareholders ready to trade. This ambitious scheme has caught the attention of many investors watching for the next opportunity, and will be a pillar event for the coalition. Unfortunately, the deal came to a halt last year over an international dispute on who should partner with Mongolia to develop the mine. China's Shenhua, a Russian consortium, US' Peabody, South Korean and Japanese players are all in the bidding war for this huge deposit. "There is still a question on how we will collaborate with foreign investors in all sectors," says Altankhuyag. "Some we can do ourselves, some we can cooperate with investors."

Standing firm

As with all coalitions, there is a threat that the decision-making process will be fragmented. The DP itself is comprised of many different factions, some more radical than others, and the coalition partners could pose problems for Altanhuyag and his party. The opposition MPP, on the other hand, enjoys a consolidated, experienced group of political veterans ready to pounce on the DP should they falter over the next four years. (Mogi: recent announcements have showed MPP members are starting to fragment in public now)

As a response to this, Altanhuyag has stated that the others must follow his lead if they are to participate in the coalition – a welcome remark for analysts who feared an indecisive leadership. The DP pledges to focus on education and infrastructure, while nurturing the cash flows from the mining sector. It will be a hard test for the newcomers, but one that Altanhuyag is willing to take.

"I am a team player," he says with a chuckle. Presumably, though, he's the captain. 

Link to article

 

President Elbegdorj meets with the Queen Elizabeth II

July 30 (news.mn) The London 2012 Olympics Games are under way, a symbol of peace and brotherhood among nations. President Elbegdorj travelled to London to support Mongolian athletes. During the event Mr. President met with the leaders of countries and exchanged their opinion. 

Before the start of the opening ceremony President Elbegdorj met with Queen Elizabeth II. President Elbegdorj congratulated for successfully organizing the 2012 Summer Olympic Games, the Games of the XXX Olympiad and introduced Mongolian team of the finest athletes. 

Also, President Elbegdorj held a meeting with U.N. Secretary-General Ban Ki-moon, the President of the International Olympic Committee Jacques Rogge and the Prime Minister of the United Kingdom David Cameron. 

President Elbegdorj met with Prince Charles, Prince William, Duke of Cambridge, Kate Middleton and Prince Harry of Wales

Also, President Elbegdorj had the opportunity to meet the President of the Federal Republic of Germany Joachim Gauck, the President of Brazil Dilma Rousseff, the Prime Minister of Russia Dmitry Medvedev, the State Councilor of the People's Republic of China Dai Bingguo, the President of the Republic of Finland Sauli Niinito, the President of the Republic of Kazakhstan Nursultan Nazarbayev, the President of Italy Giorgio Napolitano, the Prime Minister of Turkey Recep Tayyip Erdogan, the Queen Sofia of Spain and the First Lady of United States Michelle Obama.

Link to article

 

Mongolia or Bust: A New 'It' Country Draws Adventurous Lawyers to BigLaw

August 1 (ABA Journal) Sure, the electricity flickered off twice as Elisabeth Ellis waited for a phone call one recent morning. She's heard hot water can be scarce at times, but she's not yet experienced that hiccup. And she admits to a first-day thought at the supermarket of "God, what have we done?"

But Ellis found a fresh-food market the next day and is now reveling in the assignment she began in February—launching an office for her Australia-based firm Minter Ellison in Ulan Bator, the capital of the remote and harsh—yet resource-rich—country of Mongolia.

"I'd gone to Mongolia in December 2010 and was pretty stunned by all the development," recalls the Australian, who's a bit like the nomadic Mongols, having worked in Sidney, Bangkok and Hong Kong. "I got incredibly excited, but it took about a year for me to convince my 175 partners to open an office here.

"Obviously, those involved in natural resources were also excited. But those in Canberra doing real estate were saying, 'You want to go to where? Why would you do that?' "

Ellis isn't the only Western lawyer setting up shop in Ulan Bator, or UB as they call it. David Wenger, a Hong Kong-based partner, has opened an office for Australia's Allens Arthur Robinson.

But Michael Aldrich, an American partner at Hogan Lovells, has bragging rights as the first lawyer to establish a Mongolian outpost on behalf of a major Western firm. "I'd been a regular visitor here since 1993," recalls Aldrich. "In 2008, a local firm asked if Lovells could send a lawyer here and, in particular, if I could be sent. In May 2009, I came with the idea that I'd be here for two months—and here I am."

SURROUNDED BY RICHES

Where, exactly, is Aldrich? Mongolia is a Central Asian country bordered by Russia to the north and China to the south. Its official tourism website boasts that it's the world's most sparsely populated "independent largest country" (2,754,314 inhabitants spread over roughly 603,902 square miles).

"The country sits on great reservoirs of natural resources—mounds of things like gold, copper, uranium and coal," Aldrich explains. "By 2008 it was clear that with China's appetite for these resources, it would be a natural for development."

Hence the rush to open Western law offices.

However, Mongolia is not yet a first-world country. "There are proper paved roads, but the median strip is dirt," says Ellis. "And within 100 meters of the road, there will be no curb and the sidewalk is stones. There's a lot of wind and dirt."

Aldrich and Wenger rave about Mongolian summers, but the winters take some getting used to. "You can be told about minus 45-degree weather," says Wenger, "but it's hard to adjust to. You have to wear lots of layers, and you have to buy pretty specific clothing. You need a long, down-filled coat with a big fur hood to stop your face from freezing.

"You can adjust, but it takes some preparation and advice from the friendly locals."

Don't, however, assume the climate permits a less-formal business attire. "There's quite formal dress, even in the depths of winter," Ellis says. "I was told in the nicest way by my office manager that I had to up my look. Louis Vuitton is here, and people are wearing 3-inch heels."

Aldrich says Mongolia is developmentally about where China was in the 1980s, but it differs in a critical way: "Mongolia is the unsung success story in Asian human rights. I was in Hong Kong in 1989 hearing the depressing news coming out of Beijing before the June 4 incident in Tiananmen Square. Nine months later, the same situation arose here in Mongolia. Instead of maintaining their political monopoly on power, the dictators let go and the country has evolved away from a Soviet-style dictatorship into a democracy."

Given their history of dynastic and communist rule, Aldrich says, he's continually surprised by the Mongolians' progressiveness.

"There are no controls on the Internet, there's no censorship of books, and ideas are freely expressed in the media, including about a dozen daily newspapers," he says. "It's ironic that, in some ways, coming here brought me back to work in a society whose political ideas are closer to our own when compared to other continental Asian countries like China, Russia, Myanmar and Indonesia."

SMALL WORLD

Though its homeland is massive, Ulan Bator's business community is more mini. "I like that it's so small that it's very much like being part of a club," says Ellis. "You very quickly get to know people."

Mining is a huge industry in both Australia and Mongolia, so there's a sizable group of Australians—about 300, Ellis estimates—in Ulan Bator. "There's also a whole community of about 200 Mongolians who've studied in Australia," she adds. "They call themselves the Mossies—the Mongolian Aussies."

Taken by Mongolia and its people, Aldrich could see himself staying for years. Ellis also says it'll be hard to walk away—but for both, new adventures will always beckon. "Now," says Ellis, "it's all about Myanmar."

Link to article

 

Mongolia blocks Chinese investment to protect resources - Audio

July 27 (Radio Australia) Anxious to protect its vast and newly discovered mineral resources, Mongolia's new coalition government, led by the more western-leaning Democrats, has rushed through legislation to make it harder for China to invest in Mongolia. (Mogi: hehe, clearly the presenter or the writer of this can't even ask his guest if this is true).

It's a bold step by a new government, but Eddie Namnansuren, a foreign news journalist with Shuud TV and a former government advisor says the Democrats still need to shore up a deal with the breakaway People's Revolutionary Party if the coalition formed after last month's election is to last.

Presenter: Richard Ewart

Speaker: Eddie Namnansuren, journalist, Shuud TV

Link to audio interview

 

Video: A Cashmere Story

July 30 (Humus, Fonds Pour La Biodiversite with M.A.D. Investment Solutions) As the title suggests, this is a story about cashmere. More specifically this a story about the dilemma faced by nomadic herders caught between their reliance on cashmere and the impacts of climate change and overgrazing on the fragile grasslands of Mongolia.

Three herders from the North Gobi region of Bayankhongor Province narrate the changes they have witnessed to their environment, how global demand and volatile cashmere prices have changed herding practices and what they think has to be done to ensure their income and environment.

Link to video

 

Mongolia: Growing pains for agriculture

July 30 (Oxford Business Group) Although Mongolia's agriculture sector is feeling the benefits of new management approaches and seeing intensified production thanks to technological advances, it is still struggling to overcome issues created by under-investment and a transition from a planned to a market economy.

In mid-June T. Badamjunai, the minister of food, agriculture and light industry, told the cabinet that the livestock industry expects 15m births this year, a record high, and that the spring planting of most crops was almost complete.

Animal herding provides almost two-thirds of agricultural production, while the main crops grown are wheat, potatoes and vegetables. These saw rises in output of 25% (433,400 tonnes), 14% (191,500) and 18% (97,200), respectively in 2011 thanks in part to a crop rehabilitation programme (CRP) that ran between 2008 and 2010.

The introduction of measures such as 40-50% loans for fuel, wheat seeds and fertilisers, along with Customs remittances and tax incentives for small and medium-sized enterprises (SMEs) are hoped to produce even higher yields in 2012, with targets of 490,000 tonnes of wheat, 200,000 tonnes of potatoes and 110,000 tonnes of other vegetables from 330,000 ha of arable land. The ministry has also procured new technical equipment using state funds and soft loans from China.

Trade links with Beijing are emerging as an area of great potential for agriculture, with Prime Minister S. Batbold predicting in May it could one day emulate the mining sector's level of exports to China. Batbold made the claim as he was announcing that talks were under way for a deal that would see 100,000 tonnes of crops exported to China annually.

In a similar agreement, in 2011 Ulaanbaatar agreed to export 8m sheep. However, as a result of concerns over depleting reserves, inflation and speculation in March the government restricted meat exports until July 1. Such moves highlight recurring national concerns over the need to build up reserves for dzuds (harsh winters), which in 2009-10 claimed up to 17% of livestock – 7.8m animals.

Other concerns over such livestock exports include a fear that over-dependence on animal husbandry for meat and the nation's cashmere industry are both contributing towards desertification. The process has seen a 20-30% decrease in pasture grassland yields over the past 40 years due to an increase in air temperature, increased dust storms and over-grazing.

The problem has likely worsened due to the move to a market economy in the early 1990s. As the privatisation of agriculture has led to production being dominated by household-level production, the sector is hard to regulate and less attractive to investors.

The CRP focused on establishing legally and economically favourable conditions for farming and vocational programmes, while bringing more advanced technologies and techniques into the sector, but critics say it didn't represent a thorough enough attempt to establish farms on a truly commercial basis.

In a step expected to lay the groundwork for better coordination and regulation, the country launched its first nationwide agricultural census in May, meant to cover all households, entities and organisations. It will also provide data on land use, ownership, soil erosion, afforestation, protection, utilisation and irrigation. This follows a law passed in June 2011 establishing a state-run commodities exchange to help determine fair market pricing and encourage farmers to form independent cooperatives.

One possible model for future farming investment that uses foreign expertise while promoting sustainable techniques was a May 2011 investment by the Korea Mongolia Agricultural Development Preparation Committee, which leased 30,000 ha in the Khalkhgol region to carry out eco-friendly agriculture and livestock breeding. Both the Korean and Mongolian governments said the "Special Economic Agricultural Zone" would contribute to Mongolia's food export market while helping to ease Seoul's food-security fears.

Addressing the concerns over the lack of foreign interest in the sector, officials told OBG the government was working to improve the investment climate for agriculture. "There is a substantial possibility to increase investments in our sector. We will work towards proper management of investment policies to increase economic efficiency," Badamjunai told OBG. "Given our agricultural potential and raw material resources, attracting investment for developing export-orientated industries is significant."

Agro-processing, such as the processing of meat, milk, leather and raw materials, is one area identified as ripe for growth. However, agro-processing industries are generally on a small scale domestically, with only cashmere and some niche products currently available for export.

Technological innovations have lifted yields to new levels and the next step will be to create viable agriculture industries that invite foreign investment. With no shortage of arable land – if grazing is well managed – and a host of other high-quality raw materials at its disposal, Mongolia's agriculture industry should post improved performance. However, until the sector is better organised and regulated, it will be hard for it to attract the investment it needs.

Link to article

 

Mogi: overall a not too bad of an article, but wondering how these things get published on Forbes.

Untapping Mongolia's Mineral Riches

By CARL T. DELFELD

July 24 (Forbes) When I was invited as a U.S. representative to the Asian Development Bank to speak at the 1991 opening of the Mongolian Stock Exchange, I expected a frontier adventure, as the country had just broken free from Russia to form a fledgling democracy. I got more than I bargained for and, in retrospect, was lucky to get out of there alive.

The first challenge was vodka. Mongolians are the highest per capita imbibers of vodka in the world. I nearly drowned in the stuff as dozens of toasts and calls of "bottoms up" went on late into the evening of my arrival in the capital of Ulan Bator.

The second day I was a bit wobbly but went with my hosts deep into the rugged steppe for a traditional barbecue capped by races to the top of mountains and a clifftop midnight wrestling match. I held my own but a slip would have led to my demise.

Two decades later global investors, especially China and Russia, are eyeing its huge untapped natural resources. Mongolia, three times the size of France with a population of only 2.7 million, is a relatively poor country with a per capita income of about $3,000. But it is sitting on a treasure trove. The country's top ten mines are estimated to be worth $2.75 trillion in coal, copper, gold, uranium and rare earths.

This makes every Mongolian a millionaire—if they can get this stuff out of the ground and to global markets. Unfortunately, corruption is a rising issue, and inflation tops 20% (Mogi: inflation stands at actually 14.7% in Q1 2012) as a gold rush mentality takes hold.

Still, willing buyers are certainly there, with $5 billion pumped into the economy in 2011 fueling a stunning 17% increase in the country's GDP.

The Mongolian Stock Exchange is not for the fainthearted, but the brave have been rewarded with returns of 121% in 2010 and 58% in 2011, although the index made up of the largest 20 companies has cooled 10% so far in 2012. There are 332 companies listed on the exchange, with a total market value of $3.2 billion.

There is political risk. Mongolia's former president is facing corruption charges that he insists were engineered by the current president to keep him from participating in the recent parliamentary elections.

If you're gun-shy about investing directly in the Mongolian market but want a piece of the action, go with Vancouver-based Ivanhoe Mines (NYSE, IVN, 8), which has a 66% share of Mongolia's Oyu Tolgoi gold and copper mine, which is on the Mongolia-China border. Temasek, Singapore's investment arm, recently put up $420 million for a 5.5% stake in Ivanhoe; Australia's Rio Tinto has a controlling interest in it. Ivanhoe's stock has lost 64% of its value in the past 12 months as copper and gold prices have pulled back.

The Oyu Tolgoi deposits reportedly contain 79 billion pounds of copper and 45 million ounces of gold. Rio Tinto has already spent $7 billion to prepare the mine for operation. It is expected to begin production in August.

For stocks listed on the Mongolian Stock Exchange, my favorite is APU JSC (APU, 3), the country's largest beverage company. The company was founded in 1924 and privatized in the 1990s. It has the dominant market share of—you guessed it—vodka and beer while also producing milk and juices.

The Leopard Asia Frontier Fund likes and holds concrete producer Remikon JSC (RMC, 0.14), also traded on the Mongolian Stock Exchange. Right now  80% of the cement supporting Mongolia's construction boom is imported from China, but Remikon is planning to build an $8 million cement plant near its limestone deposit.

For speculators I'm going with ­Sydney-traded Aspire Mining (AKM, 0.15). While the company has exploration licenses for five projects, a lot is riding on its Avoot (Mogi: Haha!) coking coal project, potentially the country's third largest. Mining is not expected on any scale until 2016. The company has about $28 million in cash with no debt, and the stock price is tempting after falling 77% over the last 12 months.

Mongolia is a frontier market with huge potential. Steel your nerves and take a small stake.

Carl Delfeld represented the U.S. on the Asian Development Bank board and heads the global investment advisory firm Chartwell Partners. He is editor of Chartwell Advisor Global ETF Report. www.forbesnewsletters.com/chartwell.

Link to article

 

Mongolia, one of the fastest growing frontier markets

New York, July 26 (Opalesque) Simon Potter is a veteran hedge fund seeder who has recently moved to Hong Kong to start a Mongolia focused fund and head up Quam Asset Management. Quam is focused both in the capital markets and wealth management, with products that are broadly involved in the Asia region. Potter was recently interviewed by Matthias Knab for Opalesque TV.

The Mongolia fund is an open ended vehicle designed to give investors liquid access to longer-term, very fast commodity driven emerging market. According to Potter, few investors have taken Mongolia seriously, but the country has a thriving economy. Prior to the launch of the Mongolia fund, the firm launched a Middle Eastern fund in partnership with InvestAD; that now acts as a sub-advisor to the fund. Quam also has a China fund that is managed from Hong Kong. The firm is also active in the private equity space and maintains a partnership with Global Alliance Partners in order to offer clients more access to deal flow an optionality in their investments.

Beyond individual funds, Quam provides a variety of services to investors including Quamnet which allows investors to look up locally based securities through a subscription based platform. The firm also manages a corporate finance division and a separate securities division which make up the bulk of the firm's activities.

Potter was drawn to creating the Mongolia fund due to the rapid growth of the Mongol economy and vast natural resources within the country itself. "Really, what we are trying to do is invest conservatively within that market and try and benefit from the major upswings that you have. So, Mongolia is actually the fastest growing market in the world for the last two years, although it has had a recent pull back, we see this as a great buying opportunity within the market where we can pick up good commodity companies, but also some local food and beverage manufacturers and distributors. We can also pick some property assets," he explains.

He notes that there is a certain level of election risk in the short term and that the political situation may always be a factor investors need to consider before getting involved, but only in the sense that elections will add to short-term swings in volatility. According to Potter, Mongolia now is much like Dubai was 15 years ago and that presents a significant opportunity.

The same is true for the firm's Middle East fund which Potter says shows a lot of upside, potential despite recent uprisings. "Our target with our Middle Eastern fund is to access the markets, but in a very fundamental way, again, so really bottom-up stock picking. We tend to focus on mid-to-small cap companies, because they are companies that you might not get access to by buying an ETF that tracks the various indices that you can track in the Middle East."

For Potter, the key to being successful in both regions is having teams on the ground who are familiar with their localities and can provide daily, updated information. This is especially true in areas where several significant projects are in the pipeline. Mongolia is to begin two large scale mining operations over the near term which will increase the country's exports into China, Potter notes.

"We expect, next year, one of the largest copper mines which is called Oyu Tolgoi run by a company called Ivanhoe and 51% owned by Rio Tinto will start to go into full production midway through 2013. {...} The second project that we expect to see listed in March of next year is Tavan Tolgoi. This is one of the largest coking coal projects in Asia." He expects that as a result of these projects, the local currency will also appreciate and begin to mature.

Link to article

 

Mongolia strikes it rich, but at what cost?

July 27 (The Christian Science Monitor) If you've never heard of Ulan Bator, that's about to change.

Mongolia, of which this ramshackle city is the capital, is on the cusp of cashing in on the planet's richest untapped store of copper, gold, other precious minerals, and coal. There could be enough underground wealth in the steppe to make every nomadic herder a millionaire.

Lucky Mongolians? Maybe. The kind of money that is going to start flowing here soon could buy an awful lot of consumer goods, not to mention more durable benefits such as schools, hospitals, roads, and wind farms.

But sudden floods of easy cash are not always a blessing. Ask the citizens of Nigeria or Papua New Guinea, most of whom seem to have experienced a tragic spiral of corruption, violence, and poverty in the wake of their resource booms.

Mongolia's Deputy Finance Minister Ganhuyag, who like most Mongolians uses only one name (Mogi: again not so very true), likes to boast of his country's future as Asia's "alpha wolf economy," pointing out that the country's gross domestic product is currently growing by 16.7 percent a year, the fastest pace in the world.

But that is not the whole picture, acknowledges President Elbegdorj. "The government and the people are very aware of the risk of the 'natural resource curse,' " he says. "And we are also very aware that with bad government and corruption my country will be in trouble."

'Whether we want it or not'

Mongolia is in "a race" to build its institutional, political, and moral defenses "before large-scale revenues materialize," according to a recent report by the European Bank for Reconstruction and Development. There are "grounds for optimism," it found, but "remaining challenges are enormous."

As far as Munkhbayar is concerned, sitting in the yurt he has pitched in a meadow by the banks of the fast-flowing Tuul River, the damage has already been done.

A prominent environmentalist who has campaigned against the gold mines that have polluted Mongolia's rivers and lakes, Mr. Munkhbayar deplores how the mining boom means "people now are interested only in earning money, not in taking care of our motherland."

If he had his way, Mongolia would not dig holes in the ground at all – "our resources should be left where they are," he says – but rely instead on tourism and herding.

Though his position is extreme, his sensibilities are widely shared. "Most people in the countryside do not want mining here," says Oyun, a geologist and member of parliament for the centrist Civil Will-Green Party.

"But whether we want it or not," she adds, "we don't see many venues Mongolia can use except mining to expand our economy and integrate ourselves into the world economy. Like it or not, we have to use mining as the main engine for growth at this stage, and hopefully the revenues will be wisely spent."

Ms. Oyun, who heads a foundation commemorating her murdered brother, Zorig, a hero of Mongolia's democratic movement, is relatively sanguine.

Though it is too early to predict how the country will turn out, she says, she points to new laws on corruption, conflicts of interest, freedom of information, campaign finance, judicial reform, and environmental standards as hopeful signs.

"Most decision makers here realize that the main factors determining whether the resources are a blessing or a curse are strong institutions, good governance, and the rule of law," Oyun says. But laws are not always implemented. Munkhbayar staged a couple of publicity stunts in 2010 and 2011, opening fire on mining equipment at mines he thought should be shut in assaults he had announced at press conferences. No person was targeted or hurt. He has not been punished.

'Corruption is everywhere'

Nor is the law necessarily applied equally. A popular former president, Enkhbayar, was charged with corruption earlier this year and arrested just in time to stop him running for parliament against the ruling party.

Though Mr. Enkhbayar has a reputation for corruption, the timing of his arrest "appears to be arbitrary," according to a statement by Amnesty International at the time. "Our legal system works in some cases but not in others," says Sumati, who heads the Sant Maral polling organization. "It needs tuning."

Corruption is worsening, foreign businessmen and ordinary Mongolians report. The country's ranking in Transparency International's table stands at 120th of 183 nations. But the official anticorruption agency has picked up steam in recent months, taking on some high-profile cases; and citizens are speaking out more, local observers say.

"People are less accepting of the sort of easy corruption that happened 10 years ago," says Jonathan Addleton, the outgoing US ambassador. "They freely express their concern."

Uyanga, who lives with her husband, a manual laborer, and five children in a yurt in a shantytown outside the capital, has no doubt that "the people in government are taking the money for themselves. Corruption is everywhere."

Creating a 'rainbow economy'

Ms. Uyanga has benefited from monthly government handouts of $16 per family member, paid for from the government's mining income, but is not sorry they have just been stopped on the advice of economists, who warned they were inflationary and not really helping the poor.

Like 45 percent of the population of just under 3 million, according to a Sant Maral poll in April, Uyanga says she believes the government should be making the growing wealth gap a high priority and addressing social needs. "Instead of giving us cash, I'd rather the government did something useful like build more apartments," she says.

President Elbegdorj, too, says he wants to invest mining money in other sectors "to make our one-color economy into a rainbow economy."

One economic aspect of the "resource curse" is the way extractive industries crowd out other sectors and stunt their growth – a phenomenon already evident here, where tourist agencies have lost many of their English speakers to high-paying mining companies.

Elbegdorj has tried to take some of the heat out of the mining industry, whose poor environmental record has earned it few friends, by imposing a moratorium on exploration licenses. Three years ago miners were free to drill on 46 percent of Mongolia's territory. Today that proportion has dropped to 16 percent, the president says.

'Civil society' on the rise

"If growth and exploration happen too fast and too greedily, they will be a curse," warns Oyungerel, a human rights activist and newly elected parliamentarian for Elbegdorj's Democratic Party. "The new parliament's historic mission will be to regulate the pace and the environmental impact of mining."

Mongolia's democracy is vibrant; last month's parliamentary elections were the seventh since the country's Soviet-dominated puppet regime fell in 1990. And "civil society is on the rise," Mr. Sumati says. "Our population at large is more sophisticated and has a sounder approach than some politicians."

Those strengths, predicts Mr. Addleton, will serve Mongolia well. Dealing with the wealth that will start flowing when the $7 billion Oyu Tolgoi copper and gold mine comes on line in September "will mean huge challenges, and it will always be a challenge," he warns.

"But for all the detours and obstacles," Addleton adds, "I think Mongolia will make its way to a better place."

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Mongolia's relationship status with China? Complicated

Mongolia just rushed a law through parliament to make it harder for China to invest in Mongolia

July 25 (The Christian Science Monitor) In today's harsh economic climate, most countries are falling over themselves to attract Chinese investment.

Mongolia's government, however, just rushed a law through parliament to make it harder.

The law requires investments by foreign state-owned enterprises in strategic sectors, such as mining, to get special government approval. And it has held up a deal by Canadian mining company Ivanhoe to sell a majority stake in one of its Mongolian coal mines to Chalco, the Chinese state-owned aluminum giant.

"We need a policy to stop all the [mining] licenses ending up in Chinese hands," says Tsolmon, a former deputy foreign minister, who like most Mongolians uses only one name. (Mogi: Mmmm, not exactly true, but sure)  "Otherwise we could wake up one morning and most of our land would be controlled by the Chinese. That would not be good."

Mongolia, a sparsely populated, mineral-rich country landlocked between Russia and China, is in an awkward geopolitical spot.

For most of the 20th century, it was dominated by the Soviet Union, which installed a puppet regime. Before that, Mongolia was part of the Chinese Empire for two centuries. (Mogi: you could say Manchurian Empire but sure) Today, the country is attempting to steer a more independent path by reaching out to what it calls "third neighbors," such as the United States, Japan, South Korea, and the European Union.

But geography is implacable.

"We cannot change our borders," says Mr. Tsolmon. "We have to find a way to make our location work to our advantage."

In one sense, "Mongolia is in a particularly good place, both geographically and metaphorically," says Houston Spencer, the spokesman for Oyu Tolgoi, a $7 billion copper and gold mine operated by Rio Tinto that is about to start production.

"To have one of the world's largest copper deposits ready to come on line when the hungriest copper consumer in the world is sitting next door is pretty good timing," Mr. Spencer says. Oyu Tolgoi is planning to sell the vast majority of its production to Chinese customers.

Indeed, says President Elbegdorj, "it is because we share the longest land border with the fastest-growing big economy in the world that foreign investors are interested in Mongolia."

But China is already Mongolia's largest foreign investor, and 85 percent of Mongolia's exports – be they minerals, cashmere, wool, or milk products (Mogi: milk products?!) – go to China. Some Mongolians are worried that Oyu Tolgoi, and massive coal deposits at Tavan Tolgoi that are also destined for China once large-scale mining starts there, will only deepen their country's uncomfortable dependence on their giant southern neighbor.

Mongolia's economy was left in ruins by the collapse of the Soviet Union, recalls Sumati, a well-known Mongolian pollster and political analyst. "If China's economic health suddenly deteriorates … we may really face big troubles," he warns.

And even if China's economy stays on track, its role as Mongolia's indispensable customer gives Beijing unusual power: When the Dalai Lama has visited Ulan Bator in the past, China has expressed its displeasure by closing its border with Mongolia for a few days, just as a reminder.

The Mongolian authorities, while seeking the best possible relations with their neighbor, are also trying to broaden their options. The government plans a new railroad, for example, that would connect to the trans-Siberian track and offer a northern exit route for Mongolia's coal and copper concentrate.

It makes political and strategic sense, but the eastern Russian port of Vladivostok is 3,000 miles from the Tavan Tolgoi coal mine, while the Chinese port of Tianjin is only 1,000 miles away, points out Graeme Hancock, chief operating officer of Erdenes TT, the Mongolian government firm mining at Tavan Tolgoi.

"Digging the coal is the easy bit," Mr. Hancock says. "This game is all about logistics and how to transport the coal to market at the least cost," he adds. That puts China in a powerful position.

China is not popular in Mongolia because of its imperial past, and also because "when violations of labor rights and environmental standards are reported, they seem to happen usually in factories linked to Chinese investors," says Oyungerel, a human rights activist recently elected to parliament. The illegal influx of Chinese laborers is also a source of resentment, she adds.

When Mr. Sumati's polling company asked Mongolians last April "which country is the best partner for Mongolia?" only 1.2 percent of respondents suggested China. The other 98.8 percent may have to get used to the idea, Tsolmon says.

"Policy does not depend on human will but on reality," he argues bluntly. "We cannot fly away. And there is no point in complaining about where we live. All we can do is make the best of it."

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Mongolia Seeks to Contain Rising Popular Anger Over Resource Boom

July 25 (World Politics Review) A remarkable transformation is underway in a country where most people were nomadic herders a generation ago.

Mongolia has the fastest-growing economy in the world, with GDP increasing by more than 17 percent last year. It sits on vast precious metal and mineral resources: The 10 biggest deposits alone are estimated to be worth almost $1.5 trillion. Given all this wealth in a country of only 3 million people, Mongolia has the potential to become an Asian version of Norway.

However, popular anger is growing as fast as the economy.

Despite the "gold rush," the poverty rate increased between 2008 and 2010 from 35 percent to 40 percent. And although the capital, Ulan Bator, has become a typical Asian boom city, complete with luxury stores and gleaming skyscrapers, one only has to look to the hills that surround the city to see those who have been left behind.

Many of these hills are packed with "Ger Districts" -- entire neighborhoods of traditional felt tents. Row after row, more than half the population of Ulan Bator lives in these tent cities without water or roads, relying on coal-burning stoves for cooking and heating.

Against that backdrop, voters warily turned to the business-friendly Democratic Party (DP) in last month's parliamentary elections. But though the party won the most seats in the 76-member legislature, it fell 8 seats short of a majority, forcing it to look for partners in order to govern.

It was expected the DP would form a coalition with a few breakaway members of the Mongolian People's Party. Heirs to the old Soviet regime, the MPP has ruled Mongolia for most of the past 90 years.

Instead, the DP joined forces with the Justice Coalition (Mogi: Justice Coalition IS the breakaway members of MPP, the MPRP), a new faction made up of members of two smaller parties. But there's a catch: The Justice Coalition is committed to reversing policies it believes are too generous to foreign mining investors. (Mogi: not exactly true, more the rhetoric used in the election campaign)

Landlocked between Russia and China, Mongolians often say their country is a pony between two elephants. Russia provides all of Mongolia's oil and has not been shy about leveraging Ulan Bator's dependence to advance Moscow's interests. China takes 90 percent of Mongolia's exports, and for that Beijing wants a large role in developing Mongolia's resources.

Indeed, Mongolia began to develop its resources in earnest about a decade ago, when Chinese demand for minerals exploded. However, Ulan Bator also sought to attract Western expertise rather than relying on its two giant neighbors.

This is consistent with a longtime Mongolian foreign policy goal of finding a "third neighbor." With business interests to protect, the reasoning went, Western governments would have an economic incentive to be concerned about Mongolia more generally. The move seems to have paid off, as highlighted by U.S. Secretary of State Hillary Clinton's recent visit, in which she vaunted the democratic opening that has accompanied the nation's economic growth.

But to attract private foreign investment into a country with little infrastructure and poor rule of law, Mongolia had to give Western firms sweetheart deals. And many Mongolians are now outraged by the terms.

Take Oyu Tolgoi, which when it becomes fully operational in 2018 will be the world's largest gold mine and third-largest copper mine, generating an estimated 33 percent of Mongolia's GDP: The project is two-thirds foreign-owned.

Critics also charge that many foreign mining companies are paying effectively no tax.

Mongolians' sense they have been ripped off is exacerbated by the perception that pervasive corruption was a major factor in awarding these contracts. Transparency International ranks Mongolia 120th out of 183 nations for corruption.

That explains why corruption has become the hot-button issue in Mongolian politics. When the parliamentary campaign started, few believed the DP would be committed to cleaning up the government. But in April, with the DP and MPP running neck-and-neck in polls, former MPP leader Nambar Enkhbayar was arrested by agents of Mongolia's Independent Authority Against Corruption (IAAC). Because the IAAC is not considered entirely independent, some observers called Enkhbayar's arrest dirty politics and pointed the finger at Mongolian President Tsakhia Elbegdorj, himself a DP member. Nevertheless, the DP surged in the polls. 

"This is a democracy," said a DP insider who spoke with World Politics Review on condition of anonymity. "And the people tell us corruption, dubious mining deals and the wealth gap are all connected."   

Many in the DP also recognize that getting more for the country's resources is not just about populism and winning elections. The Trade and Development Bank of Mongolia says the country must invest about $68 billion in infrastructure and social services by 2015. Simply put, the government needs to increase its revenues.

During the campaign, the MPP-led parliament tried to capitalize on popular anger by passing a bill that would do so by restricting foreign ownership of strategic industries -- including mining -- to 49 percent, unless parliament grants an exemption, with the rest going to Mongolian state-owned enterprises.

The DP argued that abrogating already signed contracts in this manner would damage Mongolia's international reputation and risk driving out Western investors, essentially leaving Mongolia at the mercy of the Chinese. But the need to find a coalition partner to govern will now force the DP to accept some of the Justice Coalition's reform agenda. The DP hopes the reaction of foreign investors will be mitigated by the knowledge that their plight would be much worse under another government. It helps that, given the anticipated returns on investment in the country, even restructured deals will remain lucrative.

Stopping official corruption and spreading prosperity while finding a balanced economic model with China is a regional challenge, from the Philippines to Pakistan. In Mongolia, voters have instructed the new government to tackle these issues head-on. If Ulan Bator gets even some of it right, there's a chance that often-overlooked Mongolia will become a model for the rest of Asia.

Geoff Bell is an award-winning journalist based in Hong Kong. A former press secretary to federal and provincial politicians in Canada and TV producer for the CTV National News, he holds a master's degree from Case Western Reserve University.

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International Religious Freedom Report for 2011: Mongolia

July 2012, (US Department of State- Bureau of Democracy, Human Rights and Labor)

Executive Summary

The constitution and other laws and policies protect religious freedom but, in practice, the government enforced legal and policy protections of religious freedom selectively. The government did not demonstrate a trend toward either improvement or deterioration in respect for and protection of the right to religious freedom, which varied between provinces. The law limits proselytizing and some religious groups, particularly foreign-run religious organizations, faced bureaucratic harassment from local governments or were denied registration.

There were reports of societal abuses and discrimination based on religious affiliation, belief, or practice, including pressure on persons who converted to Christianity. The growing influence of Christian religious groups worried some and in certain cases led to harassment of Christians. Observers noted some members of society, fearing foreign influence might lead to erosion of respect for the country's culture, pushed back against what they viewed as a "foreign" religion. Muslim institutions generally fared better as a result of their deeper historical roots in society.

During the year, U.S. embassy officials discussed religious freedom with government officials at the local, provincial, and national levels. Embassy officials also met frequently with religious leaders across the country.

Section I. Religious Demography

Buddhism is closely linked with the country's cultural traditions. Local scholars claim that more than 90 percent of citizens subscribe to some form of Buddhism, although practice varies widely. Lamaist Buddhism of the Tibetan variety is the traditional and dominant religion.

Ethnic Kazakhs, most of whom are Muslim, are the largest ethnic minority. They constitute approximately 5 percent of the population nationwide and 80 percent of the population of the western province of Bayan-Olgiy. The Mongolian Muslim Association estimates there are 120,000 Kazakh Muslims and 30,000 Khoton Muslims, largely in the province of Uvs. Muslims operate more than 40 mosques and ten Islamic student centers, and there are an estimated 3,000 students of Islam.

There is a small but growing number of Christians. Christian groups estimate that more than 4 percent of the population practices Christianity, of which an estimated 90 percent are Protestant and 9 percent are members of The Church of Jesus Christ of Latter-Day Saints (Mormons). Roman Catholics and members of the Russian Orthodox Church together account for the remaining 1 percent.

Some citizens practice shamanism, often in tandem with another religion, but there are no reliable statistics on their number.

At the end of the year, there were 630 registered places of worship, 272 of which were Buddhist, 293 Christian, and 65 others belonging to various religious denominations. During the year the State General Registration Office registered 50 new places of worship. According to the Evangelical Alliance nongovernmental organization (NGO), there are approximately 600 evangelical churches operating in the country. Of the 368 churches that belong to the Evangelical Alliance, over 140 are not registered. The Evangelical Alliance reported that most churches not registered are in the countryside.

Section II. Status of Government Respect for Religious Freedom

Legal/Policy Framework

The constitution and other laws and policies protect religious freedom and the constitution explicitly recognizes the separation of church and state. Although there is no state religion, the Law on Religion and State asserts the government shall grant proper respect to Buddhism as the predominant religion of the country for the sake of national unity and the maintenance of cultural and historic traditions. The government contributed financially to the restoration of several Buddhist sites that were important religious, historical, and cultural centers. The government did not otherwise subsidize Buddhism or any other religious groups.

Religious groups and NGOs must register with local and provincial authorities, as well as the General Authority of State Registration (General Authority), to function legally. Religious organizations are required to pay property taxes and social security. NGOs, including religious organizations, are not required to pay income tax. By law all foreign organizations must hire a certain number of nationals for every foreign employee. The mandatory percentage of national employees varies from 60 percent to 95 percent, depending on the industry. The law applies to both religious and secular organizations. Foreigners who enter on work visas are not allowed to undertake religious activities during their work hours.

National law also limits proselytizing. The law forbids spreading religious views by "force, pressure, material incentives, deception, or means which harm health or morals or are psychologically damaging." Organizations involved in providing child care, welfare, or child protection services may not promote religion or religious customs counter to the child's "national traditional religion." The law also prohibits the use of gifts for religious recruitment.

All private religious schools are entitled to state funding for their secular curricula. The government is prohibited by law from giving state funds to religious schools for religious education. This policy was applied equally to all religious groups.

A Ministry of Education directive bans religious instruction in public schools. The government may revoke the request of a religious group for an extension of registration if the group violates the ban, or the ministry may recommend that employers fire teachers who teach religion in the classroom.

The government does not observe any religious holidays as national holidays.

Government Practices

There were no reports of abuses of religious freedom. In practice, the government enforced legal and policy protections of religious freedom selectively. There was no change in the status of respect for religious freedom by the government during the reporting period. Some religious groups seeking registration faced burdensome bureaucratic requirements and significant delays.

Problems with registration and operation varied significantly across the country, largely as a product of the policies and practices of local government officials. Registration requirements changed frequently and without public announcement; religious organizations reported these practices routinely caused confusion.

Registrations and renewals of religious groups allowed the government to vet applications, as well as to supervise and limit the number of places of worship and clergy. It also allowed the government to monitor the ratio of foreigners to nationals of the country conducting religious activities. A religious group must provide the following documentation to the General Authority when applying to register: a letter requesting registration, a letter from the city council or other local authority granting approval to conduct religious services, a brief description of the organization, its charter, documentation of its founding, a list of leaders, financial information, documentation of ownership of a building, brief biographic information on the person wishing to conduct religious services, and the expected number of worshippers. Although the General Authority possessed the ultimate authority to approve an organization's application, approval was often made difficult by local officials who refused to cooperate with the applicants.

Registrations were only valid for 12 months and religious institutions must renew their registrations annually with up to six different government institutions across local and national levels. Foreign-run churches in certain regions mentioned that Mongolian-run Christian churches were sometimes permitted to register every three years rather than every year, suggesting a bias against foreign missionaries.

The Ulaanbaatar City Representative Hural registered 23 religious organizations (17 Christian, five Buddhist, and one Catholic) and extended the permits granted to 121 preexisting religious organizations in Ulaanbaatar between July 1 and December 31. At year's end, there was a total of 59 Buddhist, 153 Christian, nine Shaman, four Muslim, and one Baha'i religious organizations registered at the Ulaanbaatar Hural office.

In practice local legislative bodies adjudicated the applications and administered a separate local registration process. Officials in Ulaanbaatar reportedly employed an arbitrary and extemporaneous means of registering places of worship and were cited by multiple religious groups as justifying their approach by stating that relevant laws were outdated. The Ulaanbaatar City Council also refused to recognize branch churches as being affiliated with one religion; instead it required each individual church to register as a separate entity. This caused particular problems for various Christian denominations seeking to operate multiple churches within Ulaanbaatar. Church groups with multiple branches suspected the Ulaanbaatar authorities preferred this system because it allowed the government to collect greater tax revenue. At the same time, this past year Khovd Province began to allow one common registration umbrella for faiths containing multiple branch places of worship. The regulations and procedures for registering religious organizations were not fixed and were subject to change based on the whim of local and city government legislatures.

Both the preliminary registration and annual renewal process were burdensome for religious groups. However, unregistered religious institutions were often able to function in practice. The application process, which can range from two weeks to several years, may deter religious organizations that wish to register. Some Christian groups alleged one of the main reasons for government officials' refusal was that there were "too many" churches or that there should at least be parity in the registration of Buddhist temples and Christian churches. Registration problems were reported particularly for Tuv Province, while certain other regions reported few issues regarding registration for minority religious groups.

The Muslim community in Ulaanbaatar reported last year's difficulties in attaining registration and land acquisition for proposed mosques in the provinces of Darkhan-Uul and Khovd had been resolved. The Muslim community also reported that the registrations of the three mosques in Khovd Aimag that had been suspended were now restored. They reported no bureaucratic problems with the ongoing construction of a new Islamic cultural center and mosque in Ulaanbaatar. Construction had, however, been suspended due to funding issues from certain sponsoring Arabic countries in the wake of political and economic problems. The mosques and Islamic centers received financial assistance from religious organizations in Kazakhstan, Turkey, and the Gulf States.

Authorities in Tuv Province, near Ulaanbaatar, continued to deny registration to Christian churches during the year. There were no churches registered in the province. Nonetheless, according to a Tuv religious leader, more than 30 unregistered evangelical churches operated in the province. Several of these churches reported close monitoring and scrutiny from the General Intelligence Agency (the country's main intelligence service) and other government officials. Multiple religious leaders stated that the chief of the Tuv Provincial Legislature explicitly stated his opposition to registering any churches. The current crop of leaders in the provincial legislature has been in office since 1999 and the de facto policy since that time has been to refuse permission for churches to register.

One Tuv Province church that had been denied registration approached the country's National Human Rights Commission in 2008 to obtain assistance. The Commission met with the Tuv Provincial Legislature. After that meeting, the Legislature's members again voted unanimously against registration. After ten years of registration denials, this church proceeded to sue the Tuv Province legislature in 2009. That same year, the Supreme Court found that the provincial legislature's denial of registration to the church was illegal. Nevertheless, the provincial legislature continued to defy the Supreme Court decision. The legislative speaker wrote to the church explaining that registration was not granted due to the church's alleged enticement and proselytizing of citizenry and the involvement of foreigners (the basis of this latter charge was unclear.) The church rejected both claims and subsequently filed another lawsuit in May demanding registration, which was again denied in September, this time on the basis that the church was conducting religious activities without registration. (The Tuv Province government has often employed this basis over the years for denying churches registration.)

A Protestant church in the city of Erdenet, Orkhon Province, with over 100 members reported repeated problems with local officials over the past several years regarding its re-registration. Church leaders reported that five to six other registered churches and approximately 15 unregistered churches faced similar registration problems in Erdenet, but also stated that Mongolian-run churches had fewer problems. They also reported that unregistered churches did not experience obstacles in conducting religious activities despites their status. Nevertheless, religious leaders stated that city officials frequently denied permits to Christian organizations to meet in public places. This Protestant church expected to learn whether it would receive an extension of its registration in March 2012; at the end of the year, however, the church did not know whether this extension would be for six months or a year. The local pastor alleged that the failure of local authorities to issue extensions of at least a year at a time is in contravention of the law, which is arbitrarily applied at best. The Erdenet government has also delayed issuing previous extensions to the church. As a result of the Erdenet government's delays in issuing extensions, the church has had to pay various fines over the years to stay in operation. The pastor expressed the fear that if the church's registration is not renewed, local authorities intended to obtain the land of the church, located in the center of the city of Erdenet.

Unregistered religious institutions were often able to function in practice. Some institutions reported harassment by authorities and were unable to sponsor foreign clergy for visas. Unregistered churches allegedly experienced harassment from frequent visits by local tax officers, police, and other agencies. Registered churches also reported harassment by local authorities who demanded, at times without clear legal justification, that they present official documentation and rosters of church members, and, in some cases, pay bribes. Since businesses and other nonreligious organizations also reported similar treatment, it was not clear if such action was due to the religious affiliation of the given organizations.

The law forbids those who entered on work visas from undertaking religious activities during their work hours. Those with work visas sometimes proselytized during their free time, after working hours. Officials in the Immigration Agency reportedly called and threatened organizations sponsoring visas for Mormon missionaries, complaining about their extracurricular religious activities.

The government theoretically granted religious visas for individuals intending to stay in the country more than 90 days, but the application process was lengthy and restricted to officially registered religious organizations. Christian organizations reported that no religious visas were issued to foreign Christian missionaries during the year and that such individuals seeking to enter the country usually were given other types of visas (such as student, business, or volunteer). Christian organizations also reported problems with certain immigration officials who they said categorically denied foreigners visas if they believed the visitor was a Christian coming over for religious purposes. In cases where visa requests were sent from registered religious organizations, the Immigration Agency was legally required to make a decision within seven working days. The Immigration Agency reported that 50 foreigners from 10 countries received religious visas during the reporting period.

During the year, the Immigration Agency did not report expelling any foreign religious workers. Nevertheless, local lawyers representing Christian missionaries reported that 8 to 11 foreigners were unofficially deported for religious activities during the year. These foreigners carried on missionary activities to the extent permissible without a religious visa and were in turn deported on the basis of visa violation technicalities unconnected with religious activities.

Some officials criticized instances of Christian charity work, alleging the charity workers used material incentives to attract potential converts to their religion. Christian churches also reported a high frequency of financial audits.

All non-diplomatic individuals and organizations, including religious organizations, are required to pay customs duties and value added tax on nonfinancial goods from abroad, including food, clothing, and medical donations. The Mormon Church in Ulaanbaatar reported that officials demanded fees in addition to the customs duties for imported donated clothing.

Certain religious organizations had difficulty obtaining visas and visa extensions because they did not meet their quota of national employees.

Parliament internally observed a greater number of official Buddhist and Shamanist ceremonies in parliament than in previous years. Parliament also allocated 136 million tugrik (approximately $100,000) to build a ger (traditional tent) inside the parliament for a Shaman fire ritual.

Section III. Status of Societal Respect for Religious Freedom

There were reports of societal abuses and discrimination based on religious affiliation, belief, or practice. On a number of occasions, Christian groups reported that foreign Christians in Ulaanbaatar were victims of assault or other crimes, although it was not clear whether the crimes were religiously motivated, directed at them for xenophobic reasons, or simply motivated by criminal gain. There were also reports of civil servants in Tuv Aimag facing discrimination at work for being Christian.

Christian leaders reported that the growing influence of Christian religions worried some Buddhist leaders in the country and in certain cases led to harassment of Christians. Some Buddhist leaders reported monitoring the activities of foreign religious groups. The country's political leaders overtly supported Buddhism and there was fear that foreigners and foreign influence could lead to a steady erosion of respect for the country's culture at large.

Muslim institutions reportedly fared better than Christian organizations as a result of their deeper roots in society and history. The Muslim community (which is overwhelmingly Kazakh) was strongly supported in society and Kazakhs served in virtually every government institution, including three members of parliament. As a result, the Kazakh Muslim community was well represented.

Section IV. U.S. Government Policy

During the year, U.S. embassy officials discussed religious freedom with government officials at the local, provincial, and national levels. This dialogue served to articulate a number of U.S. government concerns, particularly about registration difficulties Christian groups and others experienced. Embassy officials encouraged the National Human Rights Commission to enhance its efforts to protect religious freedom. Embassy officials also met frequently with religious leaders across the country.

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Misc

How the Search for Genghis Khan Helped the United Nations Map Refugees in Somalia

July 23 (National Geographic) National Geographic has been exploring new worlds for well over a hundred years. In the present century, these new worlds include digital worlds—the next frontier of exploration. Take National Geographic's recent digital expedition in Mongolia. The "Valley of the Khans Project" represents a new approach to archeology that gives us each the opportunity to be a digital Indiana Jones by searching for the tomb of Genghis Khan using the World Wide Web. The very same technologies can also turn us into digital humanitarians in support of the United Nations (UN). Here's a story about  how National Geographic's digital expedition in Mongolia inspired the UN during their humanitarian response operations in Somalia.

More than 3 million square kilometers of satellite imagery is produced every single day. The total surface area of the moon is about 35 million square kilometers. So every week, there is a new moon's worth of exploration to be done in the digital world of satellite imagery. Question is, how can we possibly explore an entire new moon every week? Do we need to build the digital equivalent of the Millenium Falcon? Do we even have a pilot good enough for this mission? The software to automatically and accurately analyze this vast amount of satellite imagery is still not good enough. So what to do? Turns out National Geographic had the answer all along: crowdsource the expedition.

In their phenomenal project, Valley of the Kahns, National Geographic crowdsourced the  analysis of high resolution satellite imagery in the search for clues to an 800 year old mystery, the location of Genghis Khan's tomb. Welcome to my world, the world of intrepid digital exploration. The answer to the 3 million kilometer question wasn't one pilot and one Millennium Falcon. No! The answer was hundreds of thousands of pilots from all around the world flying their own X-wings over the vast virtual landscape of Mongolia in search of Genghis Khan.

blogged about this awesome project when it was launched and described how we could take this same approach in humanitarian crises. A few months later, the crisis in the Horn of Africa began to escalate, displacing a massive number of peoples West of Mogadishu. So the UN Refugee Agency (UNHCR) asked me if we could use the same approach as National Geographic's to estimate the displaced refugee population in Somalia. Why? Because due to Al Shabbab's terrorist activities, humanitarians could not do this kind of survey on the ground, they too were being targeted and kidnapped. So we needed to take it to the skies and the UN was in dire need of pilots.

So we used the same technology that was used for the Mongolia expedition. Called Tomnod, the platform is designed to crowdsource and crowdtag satellite imagery. We obtained free imagery from DigitalGlobe, which was then "sliced up" into thousands of smaller pictures. Each of these, like the one below was then analyzed by digital explorers looking for signs of permanent and temporary shelters.

Whey found such shelters, they would simply tag the feature with the appropriate icon, just like in the Valley of the Khans. Only when a shelter was tagged by at least three individual volunteers would that data point be shared with the United Nations. This was a great way to ensure some quality control in the process.

The result? Within 120 hours, volunteers created over a quarter million tags after analyzing close to 4,000 individual images, thus yielding a triangulated count of some 47,000 shelters in the Afgooye corridor of Somalia, which the UN could use to estimate the population in the area. To provide context, it took two UNHCR staff over an entire month to do this back in 2010. We did the equivalent in 120 hours.

But who do I mean when I say "we did this"? I mean the Standby Volunteer Task Force (SBTF), a global network of some 800+ volunteers in 80+ countries who support humanitarian and human rights organizations in times of need. They were the pilots who flew the Somalia Mission for the United Nations after being inspired by National Geographic's search for Genghis Khan in Mongolia.

Digital expeditions like these can democratize the next frontier of exploration. So I look forward to collaborating with my colleagues at National Geographic to support future explorations into the digital unknown. Onwards!

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Mongolia: How the Sparsely Populated Land of Genghis Khan Succeeds at the Olympics

July 27 (TIME) When their most famous native son is a 13th century conqueror who amassed the largest land empire in history, it's not surprising that Mongolians have evolved into a rather sporty bunch. The land of Genghis Khan is populated today by fewer than 3 million people. Yet in Beijing 2008, Mongolia's athletes brought home four medals, two gold (judo and boxing) and two silver (shooting and boxing). In London, 29 Mongolians will be competing, and the team expects to at least equal its Beijing medal haul. "Come watch us in London," said Mongolian National Olympic Committee Secretary-General Jugder Otgontsagaan, as he slurped down a bowl of lamb-bone soup in the Mongolian capital of Ulan Bator. "You won't be disappointed. I promise."

Like Jamaica and Australia, Mongolia punches well above its weight at the Olympics. The reasons for its success are simple. Mongolia is a country where one-third of citizens still roam the steppe and semi-desert as nomads. It's a harsh life that develops muscle and fortitude. "When you get up at dawn to milk the camels or grab the cattle by their horns, it builds natural fitness," said Otgontsagaan. "Mongolians, I think we're tougher than anybody else."

Case in point is Bundmaa Mukhbaatar, Mongolia's medal contender in the 52 kg women's judo event. Born near the ancient Mongolian capital of Karakorum, Bundmaa grew up wrestling—and beating—her three older brothers. At 12, she discovered judo and pleaded with her parents to allow her to train in Ulan Bator. Since then, she's racked up a slew of world cup and grand prix titles. "Sports is in Mongolian genes," said the 26 year old. "Nature is harsh, and its breeds endurance in us."

The country's athleticism has been further honed by the legacy of a Soviet-style system that provides ample state funding for promising young athletes like Bundmaa. Each summer, Mongolia celebrates Naadam, a sporting festival of epic proportions. Three so-called "manly sports" are contested nationwide: wrestling, horseback riding and archery. The whole country stops for days to watch the games. No surprise, then, that Mongolian athletes excel in pugilistic Olympic sports like freestyle wrestling, boxing and judo. Mongolia also regularly sends archers to the Olympics. The one exception to the Naadam rule is equestrian, in which the thundering of hooves across Mongolian steppes just can't be tamed into an Olympic dressage or jumping competition.

Even though Mongolia is one of the sparsest populated countries on earth, its citizens love to get together to watch sports. Satellite television often reaches the most remote ger, as the Mongolian circular felt tent is known. While in the Gobi, the forbidding semi-desert in the country's south, I met several nomads who had a working knowledge of the NBA and the NHL. Sumo is a popular sport, since Mongolian wrestlers have risen to the top ranks of the Japanese sport.  After the 2008 Olympics, judo outfits and boxing gloves sold out in Ulan Bator. And curiously, Tiger Woods appears to have a strong fan base in Mongolia.

Mongolia's Olympic success contrasts with countries like India and Indonesia, which fare poorly when population figures are factored into medal counts. A nation of more than 1 billion people, India only won its first individual Olympic gold in 2008 when Abhinav Bindra shot his way to glory in the 10 m air rifle. (A field hockey powerhouse, India has won the men's team gold multiple times, most recently in 1980.) Even China, when its 51 gold medals in 2008 were divided by its 1 billion-plus population, ended up ranking 47th out of 55 nations in a tally compiled by Australian researcher Simon Forsyth. That put the People's Republic between Uzbekistan and Argentina, not nearly as impressive as the absolute figure in which China topped the gold-medal charts ahead of the United States.

According to Forsyth's calculations, Mongolia ranks sixth when its gold medal haul is factored together with its population. Further brightening the country's prospects is the fact that Mongolian gold has been used to make the London medals. Last year, Mongolia's economy was one of the fastest growing in the world due to a mining boom. "Gold is where our heart is," said Otgontsagaan. "Both at home and at the Olympics."

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The Proto-Olympics: Mongolia's Weird, Inspiring "Three Games Of Men"

July 31, ( David Roth, BuzzFeed Contributer) Strange sports are worth celebrating, and not (just) because they're funny.

Strange sports are usually very hard to find these days: the ratings indicate that we, collectively, would rather hear someone talk about the NFL than watch, say, a lumberjacking contest or Australian-rules football. But every four years one particular set of strange sports gets its moment at the Olympics, and over the weekend we've already seen numerous fencers and archers and table-tennis champions charm the country, their uncontrived excitement and anonymously-honed excellence breaking through NBC's primary coverage, which tends to ignore anyone who has not already been in a Gatorade ad. But for those of us who celebrate the marginal competitions of the world, whose very strangeness renders them immune from corporate and bureaucratic defilement, there is a level of weirdness beyond fencing, beyond even lumberjackery: Mongolia's just-concluded Naadam festival, which makes even the most obscure ESPN2 competitions look about as authentic and spontaneous as a Super Bowl halftime show.

The name Naadam is short for Eriin Gurvan Naadam, which translates to "The Three Games of Men," and is a sort of miniature — miniature only in that it's comprised of three events — olympiad. Like the Olympics, Naadam features an elaborate opening ceremony. But while London's featuredthe usual derp-o theme songs, this year's just-concluded Naadam in the Mongolian capital of Ulaanbaatar opened with a (possibly geopolitically significant) two-song set from the Chinese rock band Banana Monkey. An iconic image defines the games, but Naadam's answer to the Olympic rings are nine totems driven into the earth. They're called the Nine Yak Tails, and Naadam wrestlers perform an arm-waving eagle dance around the Yak Tails before every bout. You are maybe starting to see how this is different from the Olympics.

There is an equestrian aspect to Naadam, but Naadam's involves kids ranging in age from kindergartner to tween tear-assing around the Mongolian steppe on the backs of horses, for 20 kilometers. Archery is a part of Naadam, although Naadam's archers — men and women alike — don traditional Mongolian garb for the event; that's about the only difference, really, archery being archery. (Despite the "of Men" in Naadam's name, women are in fact allowed to compete in both horse racing and archery.) And, most of all, there is wrestling in Naadam. There's wrestling in London, too, with the difference being that Naadam's hilariously ponderous wrestling matches are held between men wearing bikini-style underpants, knee-high boots and long-sleeved vestlets that would, in the world of women's fashion, be called shrugs.

"Matches generally feature a few seconds in which wrestlers circle in a slow-motion scrum, punctuated by endless breaks for conferences with coaches," the Wall Street Journal's Ron Gluckman wrote back in 2003. "One semi-final match lasts two hours, with perhaps 10 minutes of activity. 'A great battle,' proclaims one excited Mongolian, adding that past matches have lasted four hours." YouTube confirms all this, while demonstrating that any number of these lengthy, brief-clad grapple-and-strategize sessions are held simultaneously, on an open soccer field. Advance past a given round and you earn the right to a given animal title: falcon, elephant, garuda (a bird-like Hindu deity). There is also a great deal of traditional dancing and singing involved, and that too is unlike anything most Naadam non-attendees have ever seen.

"It's a fantastic journey back in time," says Patricia Sexton, a Mongolian news anchor — it's a long story — who covered Naadam back in 2006, when it doubled as an 800th-anniversary celebration, Genghis Khan having founded the Mongol Empire in 1206. "The three manly sports date back centuries, and you can experience this in everything from the sports themselves to the food, drink, and carnival atmosphere: mutton prepared with fire and milk tins, fermented mare's milk, and ancient knucklebone fortune-telling." For a people who've spent many centuries being controlled to varying degrees by Russia and China (many ethnic Mongols still live to the south in the Chinese-governed Inner Mongolian Autonomous Region), the desire to protect and celebrate this kind of unmistakable Mongolian-ness makes a lot of sense.

Watching underpants-clad men struggle through a ritualized hugging contest is sort of definitionally not-for everyone; throw in the fact that it takes many hours, is held outdoors in the world's coldest capital city, and involves concessions heavy on the horse milk and it's arguably the most not-for-everyone sporting event imaginable. And yet its jarring foreignness and slack pace and disconcerting costumes are actually reassuringly suggestive of the environment that our own more familiar sports probably evolved/devolved from, and of the odd, mostly un-televisable space that our current weird sports inhabit. (Naadam is, actually, on television — in Mongolia, where that doesn't mean all that much.) It's meant to be experienced live, and slowly, and that's how most Mongolians do it. "My understanding is that every Mongolian attends Naadam," Sexton says. "Most who are out in the countryside and don't have the means to travel to the capital will party like it's 1206 in the comfort of their hometown," which is possible thanks to regional mini-Naadams.

Naadam isn't alone, either: Scotland's Highland Games — a national contest that's predictably heavy on the bagpipes and the throwing-heavy-things-for-height-and-distance — and Argentina'spato (a soccer/basketball amalgam that's played on horseback) are more proof that indigenous sport weirdness is still alive and well. And, of course, lumberjacks are still spinning and splashing and suchlike somewhere in the upper Midwest. What looks like a bar brawl is, somewhere, being interrupted by a gesticulating man in a feathered hat and thus being revealed as an Australian-rules football game.

It's a bummer that most of us will almost certainly never see Nadaam. In the unforced way it defines and unites a sporting culture — and does so in the most flagrantly and defiantly Naadam-y way possible — Mongolia's goofy festival offers a counterpoint to the Olympics, whose appeal is often buried by excessive branding and storylines that start out fun but are quickly beaten to death by overzealous producers. This isn't to say it's better, exactly: Ryan Lochte versus Michael Phelps is admittedly a more viscerally exciting athletic matchup than two portly dudes in briefs and mini-sweaters grappling sluggishly. (And in the age of a thousand cable channels and Internet streaming, it's a lot easier to get an unmediated Olympic experience that it used to be.) Still, in a sports scene that's now been defined for a good two-plus decades by brand-friendly surfaces and meticulously on-message athletes, weird sports like Naadam — gnarled by odd traditions, entirely too strange to make major-league profits — are reassuringly and, perhaps because of their deep weirdness, welcomingly, wonderfully human.

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"Mogi" Munkhdul Badral

Senior Client Manager / Executive Director

CPS International LLC

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CPS International is a marketing arm of CPS Securities in Mongolia. CPS Securities is a Perth, Western Australia based AFSLicense Holder. To trade ASX and international stocks, feel free to contact me at mogi@cpsinternational.mn or +976-99996779.

 

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