North Korea's ports Mongolia's gateway

Beijing: Mongolia sees North Korea's ports as the gateway for shipping its mineral resources, taking advantage of "very good relations" between the two countries, Prime Minister Sukhbaatar Batbold said.

"We will keep the channel warm with North Korea," Batbold said in an interview with Bloomberg Television in Beijing yesterday.

"We could have further cooperation in the access to the sea and seaports."

Landlocked Mongolia needs to secure access to the sea as it pursues mining projects, he said. Aside from its main exports of coal and copper, the country also has oil, potash, iron ore and uranium resources, as well as rare earths used in electronics, wind turbines and smart bombs.

North Korea was put under tougher United Nations sanctions banning arms trade and restricting financial transactions after its second nuclear test in May 2009. Six-party talks on the country's nuclear-weapons programme, hosted by China and also involving Japan, South Korea, Russia and the US, haven't convened since December 2008.

"Basically we are trying to engage North Korea, keep them engaged with other countries. We don't want them to be isolated," Batbold said yesterday at the end of his visit to China. "We would like peace, stability and security in our region."

China last year accounted for 83 per cent of North Korea's $4.2 billion (Dh15.44 billion) of trade as Kim Jong-Il's regime became increasingly isolated. North Korean dependence on China will grow as long as global sanctions are in place, the Seoul-based Korea Trade-Investment Promotion Agency, or Kotra, said on May 27 in releasing the figures. North Korea doesn't publish its own data.

Balance of interests

Mongolia is trying to seek a "balance of interests" in its relations with neighbours such as Russia and China and Western countries, Batbold said.

"This balance has to be kept not by squeezing somebody, but increasing" the opportunities for cooperation, he said.

Kim's trip last month to China, his main ally and benefactor, was his third in the past year and may have been aimed at extracting more aid and trade to shore up an economy beset by the sanctions aimed at halting the regime's nuclear-weapons programme, crop failures and livestock disease.

Mongolia may also supply North Korea with meat and foodstuffs, Batbold said. The two countries could cooperate in agriculture because of Mongolia's "vast land," he said.

Mongolia is opening up its resource riches to mining as prices for coal surge on demand from Asian steelmakers. The nation is seeking to develop the Tavan Tolgoi coal basin, which is one of the world's largest unexploited reserves of coking coal, a key material in making steel.

Rail network

Peabody Energy Corp., a Shenhua Group Corp.-Mitsui & Co. venture, Vale SA, a Russia-Japan-South Korea group, ArcelorMittal and Xstrata Plc have been shortlisted to develop the basin. Batbold said that three or four bidders may be asked to form a single group to work on the project.

Mongolia aims to quadruple its rail network to send coal, copper and rare earths to nations such as Japan and South Korea under a plan to reduce reliance on the Chinese market and boost economic development.

Construction is scheduled to start this year on a 400-kilometre link from Tavan Tolgoi and the Oyu Tolgoi copper deposit, another of the world's biggest untapped resources, to an existing rail line running north to Russia and south to China.

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Mongolia Plans Dollar-Bond Sale to Finance Mining, Roads, Elbegdorj Says

 By Ye Xie and Sonja Elmquist

Mongolia plans to sell its debut dollar-denominated bond “in the near future,” to finance expansion of the mining industry and build roads and bridges, President Tsakhia Elbegdorj said.

 The government is talking to investment banks in New York about underwriting the planned $500 million debt sale, said Naidansuren Zoljargal, deputy governor at the nation’s central bank, who is visiting the U.S. with the president. The $1 billion of 10-year debt that Sri Lanka, whose bonds carry the same B1 rating from Moody’s Investors Service as Mongolia, sold in September yield 6.252 percent, unchanged from their issue. “Mongolia is in a good shape in terms of issuing bonds and paying back those things,” Elbegdorj, 48, said in an interview today at Bloomberg’s headquarters in New York.
“Our economic growth is good.” Mongolia’s MSE Top 20 Index rose 108 percent in the past 12 months, the world’s best performer among 91 stock benchmark measures tracked by Bloomberg, and the local currency gained 9 percent against the dollar as the country’s exports of coal and copper surged.
Resource-rich Mongolia, where Elbegdorj said the economy is growing at a rate of 7 percent to 8 percent, needs to quadruple the size of its rail network, add power and water plant, and build more roads to boost metal and mineral exports.
Currency Swaps
The government is also negotiating with Russia to secure currency swaps, according to Elbegdorj, who received a degree from Harvard University’s John F. Kennedy School of Government in Cambridge, Massachusetts in 2002. He said he expects trade in local currency with Mongolia’s two neighbors, Russia and China, to increase.
A currency swap agreement signed with China last month paved the way for the planned five-year bond because the “safety belt” will boost investors’ confidence in its debt market, Zoljargal said in a telephone interview in New York. The swap, worth 5 billion yuan ($772 million), allows Mongolia to tap the Chinese currency during an economic crisis. About 25 percent of trade between China and Mongolia is settled in the yuan, according to Zoljargal. Policy makers are also keen to develop five-, 10- and 15- year benchmarks for its local-currency government bond market to secure financing and take advantage of growing interest from foreign investors, Zoljargal said.
The Development Bank of Mongolia also plans to sell $700 million of domestic-currency bonds this year, he said. London Exchange A partnership agreement with the London Stock Exchange signed in January and aimed at overseeing the development of the Mongolian bourse and its sale to investors, will help spur international participation in the equity markets, where domestic investment is now dominant, Elbegdorj said. “We are focusing on developing our stock exchange,” he said. The planned bond sale would open the international capital markets for the government and local companies to raise funds to finance $50 billion of investment projects in the next decade, said Zoljargal.
Mongolia’s B1 rating at Moody’s is four levels below investment grade, while S&P ranks it a step higher at BB-. “We are watching the market carefully,” said Zoljargal. “The government really wants to have this. The benchmark itself is a very important thing for the private company to go to the market.”
‘Quite Keen’
Jeremy Brewin, who manages $3.3 billion of emerging market assets as a fund manager at Aviva Investors in London, said he’s interested in Mongolian dollar debt because of the nation’s debt levels and commodities-driven economy.
“We’re quite keen as it has very little debt outstanding and the resources, the declared resources, suggest that Mongolia is asset rich,” he said. “Until proven otherwise, we like idea of investigating the credit with prospects for participating in the deal.” A mining boom in the world’s most sparsely populated nation promises the greatest influx of wealth for Mongolia since Genghis Khan conquered much of the known world in the 13th century. Economic growth may surge to 23 percent in 2013, more than twice the forecast expansion in China, as large mining projects begin production, the International Monetary Fund said in a March report.
Landlocked Country
International companies such as Rio Tinto Group, the world’s No. 2 mining company, are flocking to the landlocked country to tap its natural resources. Rio Tinto is developing the nation’s natural resources Oyu Tolgoi copper and gold deposit, which it expects will account for 30 percent of Mongolia’s gross domestic product when completed. Mongolia may award its Tavan Tolgoi coal mining project, one of the largest in the world, to a group of companies as soon as this month, Elbegdorj said. Elbegdorj, a former journalist who led the peaceful revolution that ended more than 65 years of communist rule in Mongolia in 1990, said he’s concerned about how to “manage” the surge of foreign investment and ensure the windfall spreads among the nation’s citizens.
More than 33 percent of Mongolians live below the poverty line, and per capita income in the nation of 2.7 million is $2,111, the IMF said in 2010. “Earlier days, we focused on attracting investment,” Elbegdorj said. “One of the biggest challenges is how to manage the money flowing from the mining to the benefit of our people.” Sandwiched between Russia’s far east to the north and the 1.3 billion-strong, resource-hungry China to the south, Mongolia is looking for ways to lessen its vulnerability. China accounts for 80 percent of Mongolia’s imports and buys about 85 percent of its exports, according to Mongolia’s central bank data.
The country depends almost 100 percent on Russian oil. “Our best interest is to balance investments and trade between our two neighbors, Russia and China, and other parts of the world,” Elbegdorj said. “I’m trying to encourage investment from the United States of America.”
To contact the reporters on this story: Ye Xie in New York at yxie6@bloomberg.net; Sonja Elmquist at selmquist1@bloomberg.net.
To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net

source: Bloomberg

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World Economic Forum held on East Asia

Food and fuel supplies, disasters, income, and economic development issues discussed

Prime Minister S.Batbold meeting Indonesian President, Susilo Bambang Yudhoyono in Jakarta

PM S.Batbold and WEF founder, Klaus Schwab

On June 12-13, Prime Minister S. Batbold participated in the World  Economic Forum on East Asia 2011  held in Jakarta, Indonesia. The forum  brought together some 600 leaders  of over 40 countries under the topic,  ‘Responding to the New Globalism’ to  discuss food supply and safety, fuels,  natural disasters, unequal allocation  of income, the imbalance of economic  development of countries and their  consequences.
The gathered considered that the   common difficulties facing countries  are climate change, natural disasters,  food safety and great disparity in income and unemployment. To tackle them, many important proposals were made.
Prime Minister S.Batbold was one of the five participants in a sub-meeting themed ‘Regulating global difficulties: Asian mechanism responding to crisis’ at the invitation of Klaus Schwab, founder and executive chairman of the World Economic Forum (WEF). A proposal made by S.Batbold highlighted the importance of developing smart collaboration in solving problems faced by East Asian countries.
The Prime Minister raised a matter on the negative effects of desertification to socio-economic life and then mentioned that Mongolia is one of 60 countries that suffer a water shortage and that 70 percent of its territory has become desert. The economists gathered in Jakarta showed interest in the speed of Mongolia’s economic growth and in its mineral resources such as coal and oil. “Mongolia is rich in mineral resources as well as agriculture. In the future, we can become a big food supplier when global discussion concerns food shortage,” the Prime Minister said.
During the forum, the Prime Minister met his counterpart from Singapore Lee Hsien Loong, representatives of the European Union (EU), the Indonesian Ministers of Trade and Energy, and authorities of the world’s biggest companies to share the issue of opportunities to develop cooperation.
Within a scope of the World Economic Forum on East Asia held in Jakarta, Indonesia, PM S. Batbold met with leaders of countries, authorities of international organizations and business delegates to discuss relations and cooperation. 

WEF Chair meets with S. Batbold 

Firstly, the Prime Minister held a meeting with Klaus Schwab, founder and executive chairman of the World Economic Forum (WEF). At the meeting, the Prime Minister expressed gratitude to Mr. Schwab for inviting him to the forum and they shared views on cooperation. S. Batbold noted that Mongolia and the WEF collaborated in
strengthening democracy, developing responsible mining and creating an anti-corruption partnership.
In turn, Mr. Schwab thanked the PM for participating in the World Economic Forum on East Asia, and
congratulated him for Mongolia joining the 150 companies in the Anti- Corruption Partnership Initiative. Mr. Schwab officially invited the Prime Minister to take part in the World Economic Forum in Davos which will run in January next year. They agreed to organize measures for a day of Mongolia and publicize Mongolian brand products during the forum. Mr. Schwab received an invitation from
the Prime Minister to visit Mongolia, and then promised to visit next year. Moreover, Prime Minister S. Batbold met some 20 members of the ‘Young Leader’ club at the WEF. While attending the World
Economic Forum on East Asia, Prime Minister S. Batbold was received by Indonesian President Susilo Bambang Yudhoyono in Jakarta. They shared views on opportunities to develop mutually-beneficial cooperation between the two countries 

 PM welcomed in Indonesia 

Beginning the meeting, the Indonesian President invited S.Batbold to participate in the Bali Forum to be held in December this year. The Prime Minister thankfully received

the invitation and expressed hope that Indonesia will support Mongolia in its leadership of the Community of Democracies.
The Indonesia’s President underlined that a new chapter has opened for bilateral relations and  expressed willingness to collaborate with Mongolia in experiences of extracting oil, coal and copper and in the energy sector. In addition, the sides agreed to bring bilateral relations to a new level and to widen cooperation in the fields of agriculture and trade Mr. Yudhoyono promised to realize proposals of the Prime Minister for establishing a Mongolia-Indonesia inter-governmental commission in the first turn and for creating a Mongolia- Indonesia business council. The sides also agreed to cooperate on a visa-free matter for the countries. The Indonesian President invited S.Batbold to pay an official visit to his country. After the meeting, Prime Minister S. Batbold was interviewed by the central television channel of Indonesia, CNBC in Hong Kong, BBC Television, and Dow Jones Newspaper

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Czechs return Przewalski horses to Mongolia

Matyááš, aged three, was the sixth foal born at Slatinany and went to
Prague Zoo a year later. © Jozef Sebin

The Czech Republic has returned four rare Przewalski horses to their native Mongolia. The four prized animals have safely made the journey from Prague Zoo in a military plane, which touched down in Khovd, Mongolia The flight carrying the horses, all  bred in captivity, took 17 hours, making  two refuelling stops in Russia.
 The three mares named Kordula,  Cassovia and Lima, and a stallion  named Matyááš, now face a 280km  truck trip to a western Mongolianreserve to join a herd of more than  20 already re-introduced by a French  group.
 Prague Zoo director Miroslav  Bobek reported on Facebook that the  horses had a smooth flight, aided by  good weather.
 Przewalski horses once inhabitated  the grasslands of central Asia, but  became extinct in the wild in the late  1960s and early 1970s due to hunting  and pressure from agriculture. Since then, efforts have been made  to introduce monitored herds back to  their native country.  They were first described in 1881  by Russian zoologist I.S. Poliakov. He  named them after Russian explorer  Nikolai Przewalski.
The stallion Matyááš is by Fucík,  and is a brother to Lima, who is a year  older. She was also born in Slatinany, and was transferred with her mother in  April to Dolní Dobrejov.
The mare, Kordula, was born on  June 7, 2006 and was the 213th foal at  Prague Zoo. Her father was Gino, born  in 1986 in Denver, and her mother was  Uršula, born at Prague Zoo in 1990.  In 2008, Kordula was transferred to  the stud and acclimatisation station  in Dolní Dobrejov where she joined a  band of 11 mares.  

The horses begin their journey to
Mongolia from Dolní Dobřejov

Cassovia, was born on August26, 200,6 at Košice Zoo. Her father  is an eleven-year-old stallion from  Prague, Xeron, who was transferred to  Košice Zoo in August 2005. Cassovia  was transported to the acclimatisation  station in Dolní Dobrejov in mid- May.  The horses are bound for the  Khomiin Tal Reserve, occupying  more than 50,000 hectares, which lies  on the edge of the Khar Us National  Park, east of the town of Khovd (the  Old Russian name was Kobdo). This  town played an important role in the  story of the Przewalski’s Horse. All caravans of horses caught at the turn of the 19th and 20th centuries in Gobi and Dzungaria passed through Khovd on their way to Biysk in the Russian Altai, then onward to Europe by the Trans-Siberian Railway. Khomiin Tal was chosen as another place for reintroduction of the Przewalski’s Horse by Claudia Feh, head of the Association Takh foundation under the French branch of the WWF and by Mongolian zoologist, Byamba Munkhtuya. Over the years 2004 and 2005, the French transported 22 horses to Khomiin Tal, some of the mares, however, wereunable to acclimatise fully. At present, the horse population numbers 24: only 5 foals have been born as yet. “The arrival of four young and  genetically different horses from Prague is essential for successful continuation of the population in Khomiin Tal, both from a point of view of quantity and quality,” the zoo said. “Completely unrelated horses will significantly enhance the current genetic variety and contribute to an increase in the birth rate.”

source-Horsetalk

2011.06.16

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B. Gangaamaa’s perilous climb up Mt. Everest

Before the climb, B.Gangaamaa poses for a photo at the base camp, 5,200
meters above sea level

In 2005, the first Mongolian in history stood on the top of Mount Everest. The second conquest occurred six years later by a female climber, B. Gangaamaa. B. Gangaamaa first attempted to climb the Everest in 2007 as a member of a team led by Mongolia’s honored mountaineer G. Osokhbayar. However, she stopped climbing at 7,680 meters and returned due to health factors. Early this spring, she was involved with a Russian team called ‘Seven Summit’ and achieved her goal. A certificate was presented to her by the Mountain Climbing Union of the Tibet Autonomous Region of China that reads: “This is to certify that B. Gangaamaa has climbed to Jomolungma summit of the Himalayas and reached 8,848 meters above sea level at 6.30 am on May 22, 2011”. B. Gangaamaa was briefly interviewed during a press conference on June 2 at the Central Sports Palace in Ulaanbaatar.

-Every mountaineer has a dream to stand on the top of Mount Everest. You have become the first Mongolian woman that reached the peak of the Mount.  

Every sportsperson wants to takepart in Olympic Games and become an Olympic winner. Likewise, every mountaineers dream and sincere wish is to climb Mount Everest. 

 I have studied and made preparations for the  past decade. Previously, I was part of the team to climb this Mountain; but had no way to return when only I needed to climb 168 meter further.

It gave me an important lesson. As a result of persistent effort, I was able to reach the peak. I am very excited. 

-How does the earth look from the summit?

-For two months, I climbed. I started the most important climb at 9pm on May 21, and continuously climbed during the night and reached the peak when it was dawn. I felt there was only one way to go down from Mount Everest when I saw it from the summit. The summit has very little space. When I looked down from the summit, there were clouds below and it was just dawning in the east. Also, I saw thunder in dark clouds in the west. It looked completely dark covering the world from the highest peak of the world. My guide followed me up. We spent about 10 minutes on the peak and it was impossible to stay longer because it has negative effects on human health. On the peak, I was photographed holding the State Flag of Mongolia. The Physical Culture and Sports Department gave me this State Flag that was raised when Mongolian athletes brought number of medals won during the Beijing Olympic Games. I raised it on the  peak of highest mountain. I believe that I could invigorate the spirit of Mongolian sportspeople who will take part in 2012 London Olympic Games. 

-Was your long travel full of  adventures?

-Weather and your own physical condition are very important. This year, the weather was not so good. Therefore, the specific path for climbing stretched above 8,300 meters late in May. I climbed up carrying a total weight of 10 kg, including two 4-liter hydrogen balloons, three state flags and a hot pot of tea. Our team was comprised of one each from 7 countries such as Mongolia, Russia and Canada and two from the USA. I and one of two US sportspeople could stand on the peak and the others could not. I cannot express in words what I felt at the summit after so much effort. It was also difficult to go down safely from the summit. It was vital to go down  fast because my hydrogen reserve was nearly depleted. During my climb up and going down, I saw many dead people who could not reach the peak. A mountaineer from UK, a member of our team, died. It was so sad seeing own team’s member die. Also, another mountaineer became blind. This year, 20 expeditions, comprising about 30 countries participated in the climbing.

During the press conference, Physical Culture and Sports Department and National Olympic Committee of Mongolia awarded B Gangaama with its top prize ‘Altan Od’ and Mongolia’s Mountain Sport Union awarded her with a medal for its 40th anniversary

source:'The Mongol Messenger'

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Stamp duties cut to lowest amount

burden made alcohol sales unprofitable

The stamp duty tax law which has been highly criticized since the first days of its approval has been revised. Business people engaged in alcohol sales and service protested that high license fees on strong drinks and services makes this kind of business impossible to operate.

The government decided to revise the law after surveying more than  3000 business entities and considered cutting-off the stamp duty taxation. A separate bill was also drafted by parliament member L.Gantumur, but it was unified with the government- drafted law.

On June 9, the revised law on state stamp duty was approved with 67.3 percent of the vote of MPs who participated in the plenary parliamentary session. During the draft law debate, some MPs argued that by  reducing the stamp duty 40 percent, there would be a budget adjustment of almost Tgs800 million.

Surprised by the principle of the law’s amendment that some taxes were cut 100 times, for example Tgs7 million stamp duty has changed to Tgs70,000 tax, member P.Altangerel advised that the cabinet to be more careful when drafting laws. “Citizens and business entities must not be imposed high taxation for their services to the state and expenses for service should only be re-accounted. This proposal was discussed during a meeting of parliamentary working group, but reducing the amount of the stamp duty was not allowed”, said MP L.Gundalai.

The stamp duty law which regulates over 500 services has widely been deliberated, especially the license fees to sell or serve with strong drinks. The amended law authorizes aimag and city governors to grant licenses for sales and services and perform stamp duty taxation as follows:

To pay Tgs600,000–1,500,000 for licenses to serve very strong spirits in the capital city,

- Tgs320,000–800,000 in aimag soum centers, Tgs200,000– 500,000 in other soums,

- Tgs200,000–500,000 to extend a service license in the capital city, 

- Tgs160,000–400,000 in aimag soum centers; and,

- Tgs80,000–200,000 in other soums.

Most MPs supported the proposal to add a provision for a tax payment of Tgs40,000–100,000 for a license to produce alcoholic drinks made from milk. It was also decided that under the state stamp duty law, the energy and power service that should be regulated by state policy, import and sales of chemical and dangerous substances, tobacco planting and production and spirit production will be taxed by parliament.

Permission fee for visa service of foreign and Mongolian citizens, for consular service, for the registration of all kinds of transport vehicles, for state registration duty of newspapers,journals, radio and television service, of legal subject state registration, finance and banking activity, special license and permits on educational activity and activities except services with an adverse environmental impact shall be given by the government under parliament restrictions.

When the draft law was discussed in parliament, MPs had priciples that special permissions for works and services indicated in the provision 35 of the acting law on state stamp should be granted by the aimag and city Citizens Representative Hurals under the framework established by Parliament, the highest rate of stamp tax collection will be made by the government’s proposed amount and the lowest to be cut by 40 percent.

The certain provisions related to reduced taxes will be followed from January 1,2011. But other provisions of the law in relation with the following activities, come into force from the day the revised law was adopted:

- The activities of higher educational establishments; for acquiring and mastering professional skills and qualifications, for granting Master and Doctor’s Degrees,

- For production and sales of fire arms; and importing them across state border;

- For license granting to export livestock breeding animals for food, agricultural and light industry purposes;

- For granting licenses for frozen animal breed fertilizers,

- For building a nuclear facility; its restructuring and operation;

- For supplying nuclear equipment

source: 'The  Mongol Messenger'

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Mongolia, US join hands on democracy, energy

WASHINGTON (AFP) – Mongolia promised to give US companies a role in its booming energy sector as President Barack Obama reached out to the young democracy that is also being courted by neighboring China.

Mongolian President Tsakhia Elbegdorj on Thursday capped a trip to Washington with a White House meeting with Obama, the very day that the country's Prime Minister Sukhbaatar Batbold held talks in Beijing and received loan guarantees.

In a joint statement released by the White House, the United States and Mongolia "emphasized their two countries' common interest in protecting and promoting freedom, democracy and human rights worldwide."

The two nations also promised to expand economic ties. During Elbegdorj's trip, MIAT Mongolian Airlines said it would buy three aircraft from the Chicago-based Boeing Co. at a value of $245 million.

"Mongolia noted the important role that US companies," the statement said, "will play in the development of the country's coal, other mineral resource, infrastructure, agriculture, energy and tourism industries."

Mongolia is opening up its mining industry to foreign investors, hoping to stimulate growth and alleviate poverty. US-based Peabody Energy is among bidders to develop part of the Tavan Tolgoi mine, one of the world's largest coal fields.

Sandwiched between China and Russia, Mongolia has traditionally pursued a careful foreign policy that does not alienate its giant neighbors. But it has also sought closer ties with the United States and sent troops to both Iraq and Afghanistan.

"We regard the United States of America as our first 'third neighbor' and we would like to improve that relation," Elbegdorj said at the Brookings Institution think-tank shortly before his summit with Obama.

"We have a peaceful foreign policy," he said. "Some call it a tough neighborhood. But we exist next to each other for centuries and we know how to get along with the People's Republic of China and the Russian Federation."

Elbegdorj also visited Russia for talks with President Dmitry Medvedev and Prime Minister Vladimir Putin earlier this month.

Elbegdorj, 48, was a key leader of the peaceful 1990 revolution that ended 70 years of Soviet-backed communist rule in Mongolia. He was elected in 2009 on promises to end graft and reverse the rich-poor gap in the vast nation of fewer than three million people.

Mongolia next month takes the helm of the Community of Democracies, an international initiative. He voiced hope Mongolia would serve as a "regional beacon" but stopped short of commenting directly about the state of democracy in China.

In sometimes colorful language, Elbegdorj saluted protesters who toppled authoritarian regimes in the Middle East but warned them that democracy takes time.

"Today I see joyful demonstrations on the streets of the Middle East. I think they will go through very hard times for years -- maybe 20 years -- to achieve today's level of Mongolia," he said.

"The beauty of freedom is that there is always space to correct our mistakes," he said. "When there is criticism from the public, we are forced to change and to make better decisions."

"Democracy is not a one-day, one-week, one-year, 20-year issue. I think you have to care for that every morning, like changing the diapers of a baby," he said.

source:AFP

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In Mongolia, lessons for Obama from Genghis Khan

Misha Japaridze/AP - Mongolian President Tsakhia Elbegdorj, right, reviews an honor guard upon his arrival during a welcoming ceremony at Sheremetyevo airport, in Moscow, Russia, May 30, 2011.

ULAANBAATAR, Mongolia — As the leader of a diminished land that was once an invincible superpower, President Tsakhia Elbegdorj of Mongolia has some advice for Americans fatigued by the burdens of global power: Remember Genghis Khan, and stick with your friends.
“It is tough, but Mongolia was the biggest power in the world, and we had the same responsibility,” said Elbegdorj, who is to meet with President Obama at the White House on Thursday to pitch his country as a stable, pro-American democracy deserving of more attention.
Sandwiched between a rising, authoritarian China and an often pugnacious and, in these parts, still very powerful Russia, Mongolia is the only nation in the vast expanse of territory conquered by Genghis Khan in the 13th century that holds regular elections and lets power pass peacefully between rival parties.
The United States, like Mongolia in its heyday, “has a responsibility to help those who are trying to follow in its steps,” Elbegdorj said in an interview in a felt-lined tent outside his official residence in the Mongolian capital.
Genghis Khan’s warriors killed lots of people, to be sure, but according to the president, a Soviet-trained former military journalist who helped lead Mongolia’s democratic revolution in 1990, it was done in a good cause.
“Do you think we just went to places and killed?” Elbegdorj said. “No.”
Mongolia, he said, used its muscle to keep trade along the Silk Road flowing and to

enforce a written law. And “when there was a killer, or in today’s expression, a terrorist nation,” he said, “we were God’s will to make them peaceful. . . . When there was a poor nation, we helped them.”

Today, too, Elbegdorj said, “sometimes you have to pay attention to your friends.”

Kurt Campbell, assistant secretary of state for East Asian and Pacific affairs, said that the Obama administration is “committed to developing a broader, deeper and more strategic relationship with Mongolia, including expanded commercial, political and cultural ties.” Thursday’s meeting in the Oval Office, he said, speaking from Washington, “is testament to that, as will be other high-level American visits and engagements in the months to come.”

Vice President Biden and Secretary of State Hillary Rodham Clinton are both due to visit Mongolia.

So far, however, only one U.S. leader has trekked to Ulaanbaatar, the world’s coldest capital city in winter: President George W. Bush stopped off for a few hours in 2005. Efforts to secure a free-trade agreement have gone nowhere, and U.S. investment in Mongolia is tiny, despite the country’s bountiful natural resources and a big push by other countries, particularly China and Canada, to join what looks set to be a minerals-driven economic boom. The World Bank in a recent report described Mongolia’s prospects for growth as “excellent.”

Mongolia has sent troops to support U.S. forces in Afghanistan and Iraq, and unlike China, Russia and the former Soviet lands of Central Asia, it has a vibrant free press, allows street protests and does not routinely harass critics. Some local leaders are bullies, and the national parliament is heavily influenced by Mongolia’s version of Russian oligarchs, but Mongolia is far freer than its neighbors.

 

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Elbegdorj, Obama hail shared common interests

US President Barack Obama speaks with Tsakhia Elbegdorj (L), President of Mongolia, during their meeting at the Oval Office of the White House in Washington, DC. Mongolia promised to give US companies a role in its booming energy sector as Obama reached out to the young democracy that is also being courted by neighboring China.

President Barack Obama and President Ts. Elbegdorj discussed steps to expand diplomatic, economic and defense cooperation between the two nations during an afternoon meeting in the Oval Office in the White House on Thursday. The two leaders said in a joint statement released after their meeting they shared common interests in promoting freedom and human rights.

The US and Mongolia have common interests in "protecting and promoting freedom, democracy and human rights worldwide, and confirmed their intention to strengthen trade, investment and people-to-people ties so as to support economic growth and deepen the bonds of friendship between their two peoples," the statement said. "Mongolia welcomed and supported the key role played by the United States as an Asia-Pacific nation in securing peace, stability and prosperity in the region," it said.

The two nations also decided to "explore mutually advantageous activities in nuclear energy based on the September 2010 Memorandum of Understanding between the two countries," and the United States "applauded Mongolia"s nuclear-weapons-free status."

Mongolia is a U.S. friend that merits increased U.S. attention, Elbegdorj said before  his meeting with Obama. "Sometimes you have to pay attention to your friends," Elbegdorj told The Washington Post.

The United States, like long-ago superpower Mongolia, "has a responsibility to help those who are trying to follow in its steps," said Elbegdorj, whose market-economy nation is a parliamentary republic that holds regular elections and lets power pass peacefully between rival parties.

Vice President Joe Biden and Secretary of State Hillary Clinton are to visit the giant, landlocked, minerals-rich country bordered by Russia to the north and the China to the south, east and west.

Mongolia -- which broke free from China in 1921 but then was under heavy Soviet influence until the early 1990s -- is the 19th-largest independent and the most sparsely populated country in the world, with about 2.8 million people occupying an area the size of western and central Europe combined.

The country is now a U.S. ally -- sending troops to support U.S. forces in Afghanistan and Iraq -- has a vibrant free press, allows street protests and does not routinely harass critics, the Post said. "Maybe if we caused problems -- if we hid [Osama] bin Laden or atom bombs -- America would pay more attention," Elbegdorj joked.

U.S. Ambassador to Mongolia Jonathan Addleton said Mongolia -- which gets about USD10 million a year in U.S. assistance -- would be "in a better place when it moves from an aid relationship to commercial relationships, as it is doing now." Mongolia plans to buy three airplanes from Boeing Co., Elbegdorj told the Post, with the deal to be announced soon.

The World Bank recently described Mongolia"s prospects for economic growth -- due in part to its rich mineral resources, including copper, coal, molybdenum, tin, tungsten and gold -- as "excellent". "The values connection is very important," Elbegdorj said. "We have to strengthen that connection. If America invests in that, America will have many friends [in Mongolia] who live on their own, not with bombs or American troops."

 

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Mongolia’s prime minister says development of giant copper-gold mine, coal mine on track

HONG KONG — Mongolia’s prime minister says a huge copper and gold mining complex in southern Mongolia is on track to be completed next year.

Sukhbataar Batbold also said Tuesday the government is aiming to choose a bidder for the giant Tavan Tolgoi coal mine this year

Canada’s Ivanhoe Mines and Anglo-Australian Rio Tinto are jointly developing the $4.6 billion Oyu Tolgoi copper and gold mine. It is expected to produce 1.2 billion pounds of copper and 650,000 ounces of gold per year in the first decade of operation.
Mongolia is inviting foreign companies to bid to operate Tavan Tolgoi, which is estimated to hold 6 billion metric tons of steelmaking coal. Batbold spoke to reporters on a visit to Hong Kong.
Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

source: AP

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Mining Mongolia: Ivanhoe, T-shirts, NGOs, and Wikileaks

In 2005, Robert Friedland, chairman of the Vancouver-based Ivanhoe Mines Ltd., famously regaled potential investors in Florida with his Mongolian mega-project, the “cash machine we really intend to build,” – a massive copper-gold and coal project in the southern Gobi desert called Oyu Tolgoi or Turquoise Hill.

Friedland talked about the size of his claim: “Mongolia is three times the size of France, twice the size of Texas, 2.6 million people, and our lands...are about the same size as Japan...about 135,000 square kilometres, the largest land position in the mining industry.”[1]

Friedland talked about his good relations with the government and low anticipated tax rates: “Now Mongolian political leaders have helped us a lot, the president of Mongolia came to Canada. We met with Paul Martin and we’ve signed a free trade agreement between Canada and Mongolia to avoid double taxation. We have virtually no taxation contemplated on the remittance of dividends and we are in the final stages of a very important long-term agreement with the Mongolian government that will protect our stakeholders on everything we are going to do.... if our tax rate was say 5% or 6%, we only have to be half as good as Grasberg to make as much money for our shareholders.”

Friedland talked a lot about how much money would be made:

• Block caving was described as a cash cow – “The amount of money that this block cave can draw off is terrifying...typical operating cost for a block cave would be a dollar or two a tonne. And about 3 or 4 dollars a tonne to mill it say 5 or 6 bucks a tonne, all in. What’s amazing is this 3%, 4% copper is 100-dollar rock. So you’re in the T-shirt business, you’re making T-shirts for 5 bucks and selling them for 100 dollars. That is a robust margin.”

• Labour costs would be low – “Now you can see how these trucks are just going to come in here and pull money out of the bank. The mining is automatic. It’s just like a rock factory. There’s no moving parts, it can be totally automated. Kids with joysticks can be running these things from the surface. You don’t need any people underground, it’s all done by gravity drainage.”

• The associated coal was another money maker – “These old coals are really the Beluga caviar of coals.... And you can make more money digging that stuff up, and hauling it south, than you can screwing around with sort of a marginal gold mine anywhere in the world.... You can mine this coal for a buck a ton. If it’s worth 100 bucks a ton, it’s a quarter of an ounce gold equivalent. If it’s 50 dollars steam coal, it’s still several grams per ton gold equivalent, and you don’t have to mill it, you don’t have to wash it, you don’t have to clean it, you don’t have to process it. All you do is do what the Chinese are doing in these pictures. You load it into trucks and they go across the Gobi Desert, see that dust, heading for China. And you trade it for money. This is what mining is supposed to be.”

Finally, Friedland talked about the lack of social hassles in the desert – “And the nice thing about the Gobi is, there’s no railroad tracks in the way, there are no people in the way, there are no houses in the way...there’s no NGOs...You’ve got lots of room for waste dumps without disrupting the populations...”

If Friedland “underestimated” anything in his typically hyperbolic speech it was likely the social landscape. When Friedland’s speech – especially the analogy to making 95% profit on T-shirts – hit Mongolia and was translated it caused enough anger to lead to the burning of his effigy (in a top hat) in a protest in the capital Ulaanbaatar in April of 2006. And the “Toxic Bob” moniker Friedland has carried with him since long before his disastrous Summitville mine in Colorado is now commonly used in Mongolia. By 2008, Ivanhoe had found a partner in Rio Tinto but the agreement Friedland had talked up between Ivanhoe and the Mongolian government had failed to materialize.

Friedland also failed to anticipate approvals by the Mongolian parliament for windfall taxes on gold and copper exports and for the government to take up to 50% stakes in certain mining assets.[2] Amidst global outcry by mining moguls a call went out for political intervention. According to a cable from the U.S. Embassy in Ulaanbataar dated January 11, 2008, recently released by Wikileaks, that intervention was certainly forthcoming.[3] In January 2008, then-trade minister David Emerson flew into Ulaanbaatar. While there he expressed concern that Mongolian President “Enkhbayar’s approach to mining was too statist for Canadian tastes, saying that Enkhbayar was behind many of the efforts to re-nationalize Mongolia’s natural resources.”“The Canadian minister, however, praised Mongolia’s prime minister, foreign minister, and minister of the interior, saying they agreed nationalization was not the preferred choice, but that “severe political pressures” and a fear that the country would not benefit from its natural resources were at play.... Emerson also met with mining companies that “want and need foreign governments to project a united front to the [Government of Mongolia] to cover their political flank,” the cable reads. “In short, the mining companies told Canada to join US, British, Japanese, Australian and German efforts to encourage (cajole, harangue, etc.) the [Mongolian government] into staying out of the mining business...” During Emerson’s visit, Canada and Mongolia announced they would begin negotiating a Foreign Investment Promotion and Protection Agreement to provide protection for foreign investors. Later in 2008, Canada opened an Embassy in Ulanbaatur.

In October 2009 Ivanhoe signed a long-term investment agreement with the Government of Mongolia, and on March 31, 2010, the Government approved the investment agreement with Ivanhoe and Rio Tinto for the development of Oyu Tolgoi.

In spite of these developments, NGOs, whose existence Friedland has somehow failed to recognize in 2005, have been increasingly vocal in raising social, environmental as well as political concerns associated with the Oyu Tolgoi project. “The Mongolian Government approved the Oyu Tolgoi Investment Agreement on 31st March 2010 without obtaining the prior consent of Mongolia’s parliament (the State Great Hural) and despite the fact that the technical and economic feasibility study submitted by Ivanhoe Mines Mongolia Inc. had been rejected by Mongolia’s Mineral Expert Council [the technical council that has the responsibility to approve mining projects]” said Ms. Urantsooj of the Centre for Human Rights and Development, a NGO which has made a study of Mongolia’s mining and environmental legislation.[4]

On April 1, 2010, Mongolian NGO Oyu Tolgoi Watch tabled a complaint with OECD National Contact Points (NCP) of the U.K. and Canada on behalf of the Centre for Citizens’ Alliance, the Centre for Human Rights and Development, Steppes without Borders, Drastic Change Movement, and National Soyombo Movement.[5] In brief, the complaint alleges the company’s Technical and Economic Feasibility Study that was accepted by Mongolia’s Technical Council of Minerals Experts in March and implemented in April 2010 does not demonstrate the availability of sufficient water resources to carry out the project. It also raises issues concerning the long-term commitment of Ivanhoe Mines to the region and proposed royalty transfers among owners of the mining licence.[6]

After a lengthy process of requesting further information and documents from both sides the Canadian NCP decided not to take the case to the next stage. In its final statement the NCP determined the “environmental assessments to be complete and of a high quality” and finding the “governance and management of the water and all other resources of the area” to be “the responsibility of the Government of Mongolia.” The NCP further argued that “it is not practical or realistic to expect these extensive and complex matters to be resolved by dialogue between NGOs and companies on a case-by-case basis. These matters are more appropriately addressed by the national government using a comprehensive governance mechanism with appropriate laws, regulations and enforcement mechanisms.”

This finding is remarkable for at least two reasons. Firstly, the Canadian NCP made a statement of fact about the quality of Ivanhoe’s environmental assessment. The Canadian NCP normally takes the position that it will not make determinations of fact regarding the validity of a complaint but rather seeks to offer its “good offices” to bring about dialogue between the parties. The fact that the Canadian NCP determined that dialogue could not be expected to resolve these issues, and that they be best handled by the Mongolian government, is the second remarkable finding. As noted elsewhere in this newsletter, non-judicial grievance mechanisms such as the NCP are touted by U.N. Special representative John Ruggie as an effective response to weak governance. It is hard to see how non-judicial grievance mechanisms can fill the void left by weak governance if they refuse to accept that role. The question of whether there was a conflict of interest given that the complaint came in to the Canadian NCP at the same time that Ivanhoe was seeking funding from Export Development Canada is pertinent in this case.

Not long after the Canadian NCP prepared its final statement on the Oyu Tolgoi complaint, the International Finance Corporation (IFC) replied to a letter of concern by Oyu Tolgoi Watch.[7] The IFC’s letter confirms many of the very concerns regarding the lack of adequate environmental assessment, particularly with respect to water resources and social impacts, that were raised in Oyu Tolgoi Watch’s complaint to Canada’s National Contact Point. The financial institution insists it is “deeply committed to helping the Oyu Tolgoi project develop in a manner that will maximize its benefits to the people of Mongolia.” The question is whether the IFC’s stated commitment to achieving benefits for the Mongolian people is more believable than the less politically smooth, but perhaps more honestly rapacious statements of Friedland when he described the Oyu Tolgoi project as a “cash machine” for investors and shareholders.

source: miningwatch.ca

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Mongolian Coal Mine Auction Progresses

The coal mine project at Tavan Tolgoi in Mongolia is all set to move ahead with the government being deep into negotiations to appoint an operator for the mine. About six different companies have bid on operating the large coking coal resource. The ownership of the mine will remain with the government.

The Mongolian government is currently taking into account all the implications of developing the mine and its related infrastructure. The infrastructure could include railway and a new port to transport the coal. Being one of the largest under developed coal deposits in the world has made the Mongolian mine a popular one for major mining companies across the world.

Companies who are interested in operating the mine include US’s Peabody Energy Corporation, Brazil’s Vale SA, steelmaker ArcelorMittal, mining giant Xstrata and a consortium of companies from Korea, Japan and Russia which includes Korea Resources Corp, Itochu Corp, Sumitomo Corp, Marubeni Corp, Sojitz Corp, and OAO Russian Railways.

Mongolian Prime Minister Sukhbaatar Batbold said in a statement on Sunday that his government hoped to finalize the first round of negotiations with bidders soon. He hoped to pick the operator of the Taavn Tolgoi mine by end June although it was a flexible deadline. The Prime Minster was speaking to reporters at the World Economic Forum on East Asia.

The Tavan Tolgoi project is said to have six billion tons of coking coal reserves. This being an essential component of steel making there have been a number of interested parties racing for the profits from the mine. Steel is essential as rapid industrialization in Asian nations takes place. 

source:Azomining

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