BUSINESS COUNCIL of MONGOLIA
NewsWire
www.bcmongolia.org
info@bcmongolia.org
Issue 151, January 14 2011
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NEWS HIGHLIGHTS:
Business: SouthGobi Resources completes Aspire Mining investment;
Khan launches international arbitration against Mongolia government;
Sedgman Ltd. secures new contracts from Energy Resources;
SK Telecom Sells 29.3% Stake In Mongolia's Skytel, Exiting Market;
Rio Tinto Digs Deeper Into Africa;
Peabody lowers earnings outlook on Australia floods;
Floods halt Leighton projects;
Centerra forecasts lower output in 2011;
Khukh Gan Company rumored for an equity offering;
Voyager Resources commenced drilling at Khongor copper gold project;
Mongolian Resource agrees to sell to Alamar Resources;
Silk Road Management acquires MonBiz indices;
Marketing deal for ZENPEP in Russia/CIS/Georgia/Mongolia;
Kindergartens receive Mongolian national intellectual toys from Khan Bank.
Economy: Over 2,300 students are registered in second stage of OT training;
Inflation has increased to 13% y-o-y;
Mongolia counts 32.7 million livestock, a decrease of 11.3 million heads;
External trade deficit of USD378.7 million, exports up 53.8%;
350 billion MNT spent for construction in Mongolia in 2010, up 26%;
Mongolian industrial output increased 169.7 billion MNT, up 10%;
Russia cancels flour export ban;
Searches for urban planning solution in Mongolia;
Companies must improve corporate governance to progress;
Japan, ADB aim to help Mongolia’s savings and credit cooperatives;
Australia floods cut 5% of world coking coal supply;
Wood Mackenzie sees coal price hikes;
Australian shares survive the flood;
Iron-ore prices hit new eight month top;
Gold seen averaging $1,457/oz in 2011;
Most miners agree to tax hike in copper giant Chile;
U.S. loses ground on economic freedom to Asia;
Developing nations fight inflation;
Rising Chinese inflation threatens higher consumer prices;
Chinese foreign currency reserves swell by record amount;
New move to make yuan a global currency;
Raising the red flag on red capitalism.
Politics: Medvedev signs into law joint uranium mining company with Mongolia;
PM Batbold impressed by Dubai, invites Arab investments;
Mongolian foreign policy draft resolution submitted;
Document defines the trend of our foreign relations: G. Zandanshatar;
Tripartite agreement marks first mining grievance mechanism;
Car licenses in demand in Beijing;
Kazakhstan: Leader’s long-term lease.
*Click on titles above to link to articles.
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Business
SOUTHGOBI RESOURCES COMPLETES ASPIRE MINING INVESTMENT
SouthGobi Resources has completed the private placement with Aspire Mining, investing about AUD20.1 million to advance exploration at Aspire's Ovoot Coking Coal Project. SouthGobi now holds about 19.9% of Aspire and will have the right to nominate one director to the Board as well as the right to maintain its proportionate shareholding for two years.
SouthGobi's vice president of corporate development Tony Pearson has subsequently joined the Aspire Board. He has previously held senior positions with the Australian Securities & Investments Commission, Citigroup's Metals and Mining Investment Banking team and Westpac Banking Corporation.
Aspire is an ASX-listed company focused on advancing the Ovoot project along with the Nurant and Shanagan coal projects. Funds from the placement will assist Aspire with its 2011 exploration and resource drilling program at Ovoot and the payment of the deferred consideration owing in respect to the acquisition of Ovoot.
SouthGobi Resources is focused on exploration and development of its Permian-age metallurgical and thermal coal deposits in Mongolia's South Gobi Region. The company's flagship coal mine, Ovoot Tolgoi, is producing and selling coal to customers in China. The company plans to supply a wide range of coal products to markets in Asia.
Drilling at Ovoot began in April 2010 and has established a maiden 330.7 million tonne JORC resource.
Aspire's managing director David Paull says, “We are very pleased to welcome SouthGobi as the company's cornerstone shareholder and look forward to a very active 2011 exploration and development program.”
Source: www.aspiremininglimited.com
KHAN LAUNCHES INTERNATIONAL ARBITRATION AGAINST MONGOLIA GOVERNMENT
TSX-listed Khan Resources has filed for international arbitration against the Mongolian government and is seeking more than $200-million in compensation for losses and damages, the firm said on Monday.
The arbitration action was launched after “expropriatory and unlawful treatment of Khan”, related to the Dornod uranium deposit in the north-east of the country. The Nuclear Energy Agency of Mongolia announced in November 2010 that it would not reinstate the licenses that Khan holds on the Dornod uranium property. The company alleges that the licences were “illegally” cancelled, so that the State could pursue the project without Khan.
The arbitration will take place under the Arbitration Rules of the United Nations Commission on International Trade Law, and asserts claims under the Energy Charter Treaty, the Foreign Investment Law of Mongolia, and the Founding Agreement between Khan and the Mongolian Government.
The claim has been today served on various officials of the Government of Mongolia, Khan said in a statement. "We are disappointed that the government of Mongolia has left us no alternative other than international arbitration,” Khan CEO Grant Edey said.
“The Nuclear Energy Agency of Mongolia continues to falsely denounce us in Mongolia while simultaneously entering into an agreement with ARMZ of Russia for the development of the Dornod deposit, thereby excluding Khan of its rightful interests.” The company believes it has a strong case of expropriation without compensation, and intends to “vigorously” pursue the arbitration process to its conclusion, he said.
Source: Mining Weekly
SEDGMAN LTD. SECURES NEW CONTRACTS FROM ENERGY RESOURCES
Australia-based coal mine engineering provider Sedgman Ltd. (ASX:SDM) has secured US$31 million worth of new contracts that will expand its presence in Mongolia. Sedgman said on Tuesday it had been awarded several new contracts for work with Energy Resources LLC on coal operations in the South Gobi region of Mongolia.
They include a US$19 million contract to carry out engineering work on the second stage of Energy Resources' UHG mine, which follows Sedgman's similar work on the first stage of the mine. The company has also been awarded US$12 million in work to ensure the operational readiness of the coal handling and processing plant at the first stage of the UGH mine and will manage the plant for three years.
Chairman Russell Kempnich said Sedgman was pleased to be expanding its operational management services beyond the Australian market.
Source: AsiaPulse via COMTEX
SK TELECOM SELLS 29.3% STAKE IN SKYTEL, EXITING MARKET
South Korean mobile operator SK Telecom Co. (SKM) said Thursday it has sold its entire 29.3% stake in Mongolia's Skytel LLC to existing shareholders raising a total of KRW28.3 billion ($25.4 million) and marking its exit from the country as the market becomes saturated.
The move is part of SK Telecom's ongoing strategy to pull out of unprofitable markets and shift its focus into other markets and business areas using more advanced network technology. In September last year, SK Telecom also sold its entire 3.8% stake in China Unicom (Hong Kong) Ltd. for US$1.35 billion. In June 2008, SK Telecom sold its unprofitable U.S. mobile unit, Helio, for $39 million in stock to Virgin Mobile USA Inc., which was acquired by Sprint Nextel.
"The penetration rate of the Mongolian cellphone market has reached more than 60% and is getting saturated," said Lauren Kim, a spokeswoman at SK Telecom. "The funds will be reinvested in the areas we are now focusing on, such as (mobile) platforms." SK Telecom said it sold the stake to existing shareholders in Mongolia including Sun Clay Group and Global Com LLC.
SK Telecom acquired an initial 20% stake in Skytel in 1999 and provided analog telecommunications equipment. The Korean company further increased its stake in Mongolia's second-largest mobile telecommunications firm by subscribers to 29.3% by investing KRW600 million in cash in 2002.
SK Telecom said it received an additional KRW2.5 billion in dividend income after the stake sale. Skytel was established in 1999 through a joint venture between SK Telecom and Korea-based firm Taihan Electric Wire Co.
Read more…
Source: Dow Jones Newswires
rio TINTO DIGS DEEPER INTO AFRICA
Rio Tinto has prided itself on the fact that more than 80% of its assets are in OECD countries. So its $3.9 billion deal last month to buy Australian-listed Riversdale Mining, whose principal assets are in Mozambique, represents a strategic shift for the global mining giant.
Riversdale will double Rio Tinto’s African gross assets, catapulting that continent past the U.S. in importance for Rio Tinto. Following on the heels of Rio Tinto’s multibillion-dollar investment in a metals project in Mongolia, the Riversdale acquisition signals the necessity for the global miner take on political risks it has heretofore shunned.
In this case, there are precious few Tier 1 hard coking (metallurgical) coal reserves in the world. Riversdale expects that by 2025 Mozambique will supplant the U.S. as the world’s second largest exporter of premium hard coking coal used for steelmaking (with a current global market share of 17%) after Australia (64%).
Riversdale didn’t have the financial wherewithal to bring the African reserves to production, however. As with the similarly sized Mongolian Oyu Tolgoi copper-gold mine (development cost in the neighborhood of $5 billion), where Rio Tinto stepped in to develop a site originally discovered by Canada’s Ivanhoe Mines, Rio Tinto brings operating credibility, depth of experience and marketing resources as well as financial backing.
Like Mongolia, Mozambique will need to raise its technical and educational levels to attain industrial competency on par with developed countries in order to attract foreign investments and know-how for further economic development and political stability.
Read more…
Source: Dow Jones Investment Banker
PEABODY LOWERS EARNINGS OUTLOOK ON AUSTRALIA FLOODS
Peabody Energy, the biggest US coal producer, said on Friday that it expects to report lower earnings for 2010 than previously indicated, because of the effect of record rains and flooding on its Australian operations.
Peabody said in October it expected full-year earnings before interest, tax, depreciation and amortisation (ebitda) of between $1,85-billion and $1,9-billion. However, the disruptions in Australia mean that ebitda will likely come in around the midpoint of an earlier forecast range of $1,7-billion to $1,9-billion, which was issued by the company last July.
“December has resulted in the worst rain and flooding in Australia in approximately 50 years, which has impacted production and shipments, washed out roads, restricted employee access, caused train derailments and created port delays,” Peabody said in a statement on Friday.
Peabody said on December 30 it had issued force majeure notices advising customers of shipment disruptions in Queensland because of torrential rainfal that has disrupted mines and slowed port and freight operations. Force majeure is a clause in contracts that frees companies from their obligations because of circumstances beyond their control. Anglo American, BHP Billiton, Rio Tinto and Xstrata also issued similar notices, citing the heavy rains and flooding in Australia, the number-one exporter of metallurgical coal.
Peabody operates 10 surface and underground mines producing thermal and metallurgical coal in Queensland and New South Wales, according to the company's website. “Combined with high global metallurgical coal demand and strong electricity generation in key coal-consuming nations, the reduced shipments are significantly tightening the seaborne supply-demand balance,” Peabody commented. The company said it still expects to produce between 35-million and 40-million tons from Australia by 2015.
Read more…
Source: Mining News
FLOODS HALT LEIGHTON PROJECTS
Floods have halted work on Leighton Holdings Ltd. $4.1 billion Airport Link in Brisbane, but the firm says it is too early to determine any possible impact on company earnings overall from the floods.
The firm says many of its construction and mining operations in Queensland may be affected by the flood crisis. Some projects in the region had been temporarily shut down and employees granted leave to protect their properties, the company said in an announcement.
"The extreme weather events unfolding in Queensland are unprecedented and widespread," Leighton said. "Any material impact to Leighton Holdings full year earnings will be determined over the coming weeks and reported once known."
Rain and flooding have impacted Leighton's contract mining activities in Queensland, with varying degrees of severity since late December. Some mining operations have recommenced, while others remain on reduced rosters as "dewatering" continues, Leighton said. There had been no injuries to personnel or any significant loss of plant or equipment, it said.
Read more…
Source: Sydney Morning Herald
CENTERRA FORECASTS LOWER OUTPUT IN 2011
Centerra Gold, TSX-listed, produced 678 941 oz of gold last year, including 249 866 oz in the fourth quarter, but expects output in 2011 will be lower because of delayed permitting approvals in Mongolia.The company had forecast production of 640 000 oz to 700 000 oz in 2010.
Centerra owns the Kumtor mine, in Kyrgyzstan, and the Gatsuurt project in Mongolia. The firm ended operations at another Mongolian mine, Boroo, in November and had planned to replace the production with ore from Gatsuurt, which is located about 50 km away. However, the firm is still waiting to hear how the project will be affected by a new water and forests law enacted in Mongolia, and the final permitting for Gatsuurt will not be approved until the uncertainty under the new law is dealt with.
The company expects to produce between 600 000 oz and 650 000 oz of gold this year, including 550 000 to 600 000 oz from Kumtor, and 50 000 oz from processing stockpiled Boroo ore. “We had another strong fourth quarter, despite a ten-day shutdown at Kumtor, enabling the company to achieve its 2010 production guidance,” CEO Steve Lang said in a statement.
The company is continuing to look for additional projects and aims to increase annual gold production to 1,5-million ounces, Lang said. Centerra has budgeted $34-million for exploration this year, up from $30-million in 2010, and expects capital expenditure will be $213-million, including $38-million of sustaining capital and $175-million of growth capital.
Source: BUSINESSMONGOLIA
KHUKH GAN COMPANY RUMORED FOR AN EQUITY OFFERING
Khukh Gan Company, which runs steel production business, has recently merged and integrated 18.9 billion tugrugs of fixed assets of “Ar Gan” Company. As a result, the company’s production capacity has increased. It has plans to decrease costs by having a second line in operation and to double its marketing budget. At the moment, the company produces 35 tons of steel on average per day and is working at 85% of its production capacity.
A decision of issuing an equity offering for the purpose of additional financing could be made during Khukh Gan’s shareholders’ meeting. There are rumors that the company is going to do so by this coming April.
Source: Unuudur
VOYAGER RESOURCES COMMENCED DRILLING AT KHONGOR COPPER GOLD PROJECT
Voyager Resources Ltd. (ASX:VOR) announced on 20 December 2010 it commenced diamond core drilling at its 100%-owned Khongor Copper Gold Project located in the Oyu Tolgoi copper belt of the South Gobi province.
Drilling is expected to continue well into January 2011 with initial assay results expected late January. The commencement of drilling programmes is the first phase of an aggressive exploration programmed that will include additional drilling, soil geochemical and geophysical surveys. Kell Nielsen, Managing Director, stated “with further exploration (this) has the potential to be a Company making project for Voyager.”
Source: Voyager Resources Ltd.
MONGOLIAN RESOURCE AGREES TO SELL TO ALAMAR RESOURCES
Mongolian Resource Corporation (MRC) has entered into a conditional agreement to be acquired by Alamar Resources Limited, which is traded on the ASX. MRC is a diversified mining company engaged in the acquisition, development and operation of resource properties in Mongolia, particularly late stage or current producing mines. The company's current assets include gold, coal, tungsten, iron ore, and lithium.
In addition to the share exchange agreement executed by MRC and Alamar Resources, Alamar has signed a Letter of Engagement (LOE) with Stifel Nicolaus Weisel, the investment banking arm of Stifel Financial Corp., for a planned AUD10 million capital raise. As part of the LOE, Stifel Nicolaus Weisel has been engaged for a period of 24 months following the completion of the transaction to provide investment banking services for Alamar Resources.
MRC is a client of S3 Investment Company’s wholly-owned Redwood Capital subsidiary. Redwood Capital has been engaged as the Asian merchant banking financial advisor for MRC. Redwood Capital recently opened a new office in Ulaanbaatar.
Source: Globe Newswire
SILK ROAD MANAGEMENT ACQUIRES MONBIZ INDICES
Silk Road Management Ltd is pleased to announce that it has entered into an agreement with MonBiz Media Ltd to acquire the rights to MonBiz Mongolia Index and MonBiz Hong Kong Index, two equity indices MonBiz Media has co-developed with Eurasia Capital Ltd in 2010. Following the acquisition, MonBiz Mongolia Index and MonBiz Hong Kong Index are renamed Silk Road Mongolia Index and Silk Road Hong Kong Index respectively. Eurasia Capital has agreed to continue providing its analytical support in maintaining and updating these two indices as well as assist Silk Road Management in launching several new regional indices.
Silk Road Management is an investment management firm focused on investments in various asset classes in Mongolia, including public equities, private equity and property. Based in Ulaanbaatar, the capital of Mongolia, Silk Road Management intends to become the largest fund management firm focused on Mongolia.
Eurasia Capital is a leading investment bank in Mongolia. Headquartered in Ulaanbaatar, the Firm offers cross border M&A and advisory, capital raising, sales & trading and research services to its international and regional clients including government agencies, major energy and resource companies, sovereign wealth funds, private equity groups and global portfolio investors.
Source: Silk Road Management
MARKETING DEAL FOR ZENPEP IN RUSSIA/CIS/GEORGIA/MONGOLIA
Eurand N.V. (NASDAQ: EURX), a global specialty pharmaceutical company, and Nycomed, a privately owned global pharmaceutical company, announced today that Eurand has entered into an exclusive commercialization, license and supply agreement with Nycomed for Russia and the Commonwealth of Independent States (CIS), as well as Georgia and Mongolia. Financial terms were not disclosed.
Under the agreement, Nycomed Russia-CIS will market and distribute ZENPEP® (pancrelipase) Delayed-Release Capsules in Russia and CIS, as well as Georgia and Mongolia, subject to regulatory review and approval of the product in those territories. ZENPEP is an FDA-approved pancreatic enzyme product (PEP) indicated for the treatment of pancreatic insufficiency in patients with cystic fibrosis or other conditions, such as chronic pancreatitis, gastrointestinal surgery and pancreatic cancer. Eurand markets ZENPEP directly in the U.S. through its own sales force.
"This agreement represents an important development in our international marketing strategy for ZENPEP," said Andrew Thompson, Eurand's Vice President, Commercial Operations. "Nycomed is one of the fastest-growing pharmaceutical companies in Russia, and we are very confident of their ability to maximize the value of ZENPEP in that market. We look forward to working with Nycomed in pursuing regulatory approval for this product in the important Russia-CIS region."
"Nycomed is excited at the prospect of launching ZENPEP into the Russia-CIS market, where we are launching our recently established gastrointestinal product portfolio," said Jostein Davidson, Senior Vice President, Nycomed Group, and President, Nycomed Russia-CIS. "We believe ZENPEP, which has been specifically formulated to meet the FDA's stringent guidelines for PEPs, will offer physicians an important new treatment option for their patients with pancreatic insufficiency."
Russia-CIS is a significant market for PEPs, which is dominated by digestive disorders such as chronic pancreatitis. According to data provided by IMS Health Incorporated, the PEP market in this region was estimated to be approximately EUR 93.5 million ($130.5 million) in 2009.
Source: Market Wire
KINDERGARTENS RECEIVE MONGOLIAN NATIONAL INTELLECTUAL TOYS FROM KHAN BANK
The Khan Bank Foundation has started a project to diversify toys for children in kindergartens, and to give Mongolian traditional intellectual puzzle toys that are good for children's health as well their IQ development.
Within the framework of this project named “Intellectual toys-intellectual future”, the Khan Bank Foundation has granted 6000 intellectual toys of 44 types, including lock, puzzle, intellectual and mathematical toys to each kindergarten in 21 aimags, and six kindergartens from UB, for a total of 27 kindergartens. The toys were distributed Thursday to six kindergartens from Ulaanbaatar. The Minister of Education, Science and Culture, directors of Khan Bank and the International Intellectual Museum participated in the event which was held in the Khan Uul District Kindergarten #28. Managers of six kindergartens have received the toys and were asked to use these Mongolian traditional toys in their lessons.
The toys, which are targeted for the senior classes of kindergartens, were selected by kindergarten teachers and intellectual Museum specialists. Each kindergarten is granted a kit including 222 toys of 44 different types, CD and instruction booklet.
Read more…
Source: Montsame
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sponsors:
Khan Bank Eznis Airways
Mongolia Web Mongolian National Broadcasting
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Economy
OVER 2,300 STUDENTS ARE REGISTERED IN SECOND STAGE OF OT TRAINING
A total of 9,000 are set to be trained in Oyu Tolgoi’s Vocational Training Center. The first 1,000 students are being trained at vocational training and production centers. The students now have acquired their tuition fees and cost of their food and transportation as Oyu Tolgoi’s investment is made. 2,300 people were registered prior to New Year for the second stage. Over 40 students are set to be trained at vocational training centers. So far 27 of them are attending their courses.
First Deputy Premier criticized the status of delayed work of training basics and emphasized that it’s important to create an environment which meets modern training requirements. Training equipment and techniques for the welding course were missing, but they will be supplied to the training centers at the beginning of this year.
Source: Zuunii medee
INFLATION HAS INCREASED TO 13% Y-O-Y
The National Statistical Office held a press conference Wednesday to present economic statistical information for 2010. GDP increased by 6.1% in 2010. GDP increased by 25.3% compared to 2009 which was impacted by the economic crisis, but 6.1% when compared to the 2005 constant price base period.
Trade in service, processing industry and mining had high profit. However, the agriculture sector experienced immense losses and 11.3 million livestock died.
Inflation has reached double digits. Economists view that inflation must be confined to one digit, but in fact inflation has increased by 13% year-over-year (y-o-y) from December 31, 2009.
According to Bank of Mongolia’s information, money supply has increased to 4.7 trillion tugrugs, or by 1.8 trillion tugrugs over the prior year. As mining investment and economic turnover improve, currency rates of USD and the Euro have decreased and the tugrug rate has strengthened.
Source: Udriin sonin
MONGOLIA COUNTS 32.7 MILLION LIVESTOCK, A DECREASE OF 11.3 MILLION HEADS
At national level by the end of 2010, 32.7 million heads of livestock were counted, of which 1,920.3 thousand were horses, 2,176.0 thousand cattle, 269.6 thousand camels, 14,480.4 thousand sheep and 13,883.2 thousand goats.
The total number of livestock decreased 11.3 million heads or 25.7 percent against the previous year, of which horses–by 301.0 percent or 13.5 thousand, cattle by 423.3 thousand or 16.3 percent, camel by 7.5 thousand or 2.7 percent, sheep by 4.8 million or 24.9 percent, goats by 5.8 million or 29.4 percent.
In 2010, 10.3 million heads of adult animals were lost, up by 8.6 million heads compared to 2010. In the same period, 355.1 thousand tons of cereals, 168.0 thousand tons of potatoes, 82.3 thousand tons of vegetables were harvested, and 1,132.3 thousand tons of gross hay harvest, 31.3 thousand tons of hand-made fodder were produced.
Cereals harvest decreased by 36.6 thousand tons or 9.3 percent, while potatoes increased 16.7 thousand tons or 11.1 percent, vegetables–by 4.3 thousand tons or 5.5 percent, gross hay harvest–by 220.0 thousand tons or 24.1 percent, hand-made fodder–by 5.5 thousand tons or 21.1 percent against the previous year.
Source: Montsame
EXTERNAL TRADE DEFICIT OF USD378.7 MILLION, EXPORTS UP 53.8%
Total external trade turnover reached USD6,177.1 million, of which exports made up USD2,899.2 million, imports--USD3,277.9 million.
External trade balance showed a deficit of USD378.7 million in 2010, increased by 126.4 million or 50.1 percent compared to the previous year. Total external trade turnover increased USD2,154.0 million or 53.5 percent, of which exports was up by USD1,013.8 million or 53.8 percent, and imports–up by USD1,140.2 million or 53.3 percent respectively, compared to the previous year. Mineral products, natural or cultured stones, precious metal, jewelry, coins, textiles & textile articles live animals, animal origin products, raw & processed hides, skins, fur & articles thereof accounted for 98.0 percent of the total export value amount.
Source: Montsame
350 BILLION MNT SPENT FOR CONSTRUCTION IN MONGOLIA IN 2010, UP 26%
In 2010, a total of 350.8 billion MNT of construction and installation works were carried out at nationwide.
326.5 billion MNT or 93.1 percent of the work was executed by domestic entities, 24.3 billion MNT or 6.9 percent–by foreign entities. Against 2009, 71.4 billion MNT or 25.6 percent increase in construction and installation was mainly due to 75.9 billion MNT or 30.3 percent increase in the works executed by the domestic entities.
In 2010, 29.4 million tons freight and 250.7 million passengers (double counting) were carried by all types of transport; carried freight rose by 4.6 million tons or 18.7 percent, carried passengers–by 18.2 million persons or 7.8 percent.
Source: Montsame
MONGOLIAN INDUSTRIAL OUTPUT INCREASED 169.7 BILLION MNT, UP 10%
In 2010, the total industrial output increased 169.7 billion MNT or 10 percent to 1,874.6 billion MNT (at 2005 constant prices) compared to the previous year.
This increase was mainly due to 16.7-91.8 percent increase in main mining and quarrying products such as crude oil, fluor spar concentrate and coal; 11.2-69.0 percent increase in manufacturing products such as copper, lime, alcohol, metal steel, flour, solid concrete, cement, sawn wood, yoghurt, soft drinks, juice, metal foundries, fodder, milk; and 2.1-2.3 times increase in products such as steel casting, and iron ore.
Industrial output (at 2005 constant prices) in 2010 showed increase in mining of coal and lignite extraction of peat (91.8%), other mining and quarrying (19.5%), extraction of crude petroleum and natural gas (16.7%) for the mining and quarrying sector; manufacture of office accounting and computing (5.5 times), manufacture of rubber and plastics products (84.4%), production of non-metallic mineral products (54.0%), manufacture of wood and wooden products (35.6%), manufacture of basic metals (29.6%), manufacture of food products and beverages (24.0%), manufacture of chemicals and chemical products (18.2%), manufacture of wearing apparel, dressing and dyeing of fur (17.5%), publishing, printing and reproduction of recorded media (7.6%), manufacture of tobacco products (2.9%) for the manufacturing sector compared to the previous year.
For the electricity, thermal energy and water supply subdivision, there was an increase in production of electricity, thermal energy, and steam (6.4%).
Source: Montsame
RUSSIA CANCELS FLOUR EXPORT BAN
Russia cancelled its flour export ban on January 1, following appeals from flour millers who fear losing foreign customers.
Russia introduced the ban on wheat, barley, rye, corn and flour exports on August 15 following the worst summer drought in decades, which damaged around a third of the country's crops. Initially, the ban was in force until December 2010, but it was later extended until June 30, 2011.
According to the Russian Grain Union, Russia exports flour to Mongolia, Afghanistan, South Korea, Israel, Turkmenistan, Tajikistan, Moldova, Thailand and other states.
Source: RIA Novosti
SEARCHES FOR URBAN PLANNING SOLUTION IN MONGOLIA
Mongolia may be best known for its endless steppe and nomadic culture, but a significant demographic shift is underway in which rural residents are crowding into urban centers, especially in the capital Ulaanbaatar.
Hundreds of thousands of Mongolians face declining living standards as they pack into the capital’s polluted, unplanned “ger districts” — named after the traditional nomad tent being used by migrants unable to find affordable housing.
Ulaanbaatar’s population is exploding, rising 70 percent in the just the past 20 years, according to World Bank estimates. Capital city residents now comprise roughly half of the country’s population of 3 million, leaving government and international development agencies scrambling to find urban planning solutions. “The city is not meant to cope with this size. The demand for basic urban services has long superseded what is available,” says Bijay Karmacharya, chief technical advisor at UN Habitat.
Read more…
Source: Pearly Jacob, a freelance journalist based in Ulaanbaatar for Eurasiane
COMPANIES MUST IMPROVE CORPORATE RESPONSIBILITY TO PROGRESS
O. Erdenedalai, consultant at IFC is interviewed in respect to “corporate governance”.
What exactly does “corporate governance” means? Isn’t it similar to a company administration?
Corporate governance had been formulated by some lawyers as appropriate company management. Now, one can assume that it has been agreed on a terminology of corporate governance. Corporate governance is much broader concept than company management. Company management is relevant to administration and management of activities of just one particular company. Whereas this is concept involves reciprocal dependence of administration as well as shareholders, board members, and other stakeholders…Positive aspects, which can emerge as a result of developing corporate governance, can be categorized at macro level or at a given national level and micro level or at a given company level. In terms of macro level, many beneficial aspects can be underlined such as increased foreign direct investment, creation of fair competition as a result of increased transparency, and decreased corruption. In terms of micro level, beneficial aspects can be mentioned such as 1) more benefit for operation, 2) increased financing and investment, 3) decreased cost of financing and investment, and 4) increased profile.
Recently not just one but two banks, which had been issued IPOs, got bankrupted?
Bankruptcies of “Anod” and “Zoos” are directly relevant to deviations from the main principles of corporate governance.
Are there any companies in Mongolia of which corporate governance and its board activity have met with international standards?
Of course. Recently our companies have already started issuing IPOs not just on the Mongolian Stock Exchange, but also on the stock exchanges in London, Australia, Singapore, and Hong Kong. This means that good principles of corporate governance have been facilitated.
Source: Unuudur
JAPAN, ADB AIM TO HELP MONGOLIA’s SAVINGS AND CREDIT COOPERATIVES
A USD 2.5 million grant from Japan’s Fund for Poverty Reduction, which is financed by the Japanese government and administered by Asian Development Bank (ADB), will be used to attempt to strengthen the regulation of Mongolia’s savings and credit cooperative market.
Having passed a new law recently to regulate savings and credit cooperatives, Mongolia will use the grant to further support the Financial Regulatory Commission, which inspects all savings and credit cooperative activities, provides training for staff and offers evaluation systems.
The grant will also be used to improve financial literacy in poor households through a six-part pilot drama series on Mongolian television covering savings and managing money. According to Betty Wilkinson, Senior Finance Specialist in ADB’s East Asia Department, this television series will be extended if the public response is positive.
Source: Microcapital Brief
AUSTRALIA FLOODS CUT 5% OF WORLD COKING COAL SUPPLY
Australia's devastating floods could remove 5% or more of steelmaking coal from world markets, a major bank estimated on Wednesday, as signs emerged that damage and disruption to coal infrastructure continued to spread with the floodwaters.
Australia's Bowen Basin coal district, the heart of its coking coal industry in Queensland state, is slowly emerging from floods, which have now raced south, but recovery has been slow, with one Queensland coal port closed and two restricted.
Commonwealth Bank of Australia said the floods could remove nearly 14-million tons of coking coal from world markets, and that figure could rise if rains returned to the Bowen Basin. "Open-cut mines are flooded, mine roads and railways are underwater and/or washed out," the bank said in a report. "Full recovery will take months and that assumes rains stop, despite another two to three months of the wet season to go."
Showers are forecast for the rest of this week around Bowen Basin coal centres of Emerald and Rockhampton, but the heavy rains have passed and clear skies are expected by the weekend.
Read more…
Source: Reuters
WOOD MACKENZIE SEES COAL PRICE HIKES DUE TO AUSTRALIA FLOODING
Energy consultancy Wood Mackenzie said on Wednesday that it sees both thermal and coking coal prices rising sharply in 2011 due to the impact of floods in coal-producing Australia.
Thermal coal prices could reach or exceed the high of $197 per ton free-on-board Newcastle seen in 2008, when flooding caused price spikes, according to Wood Mackenzie.
Hard coking coal spot prices could exceed $400 per ton, the firm said.
Australia accounts for almost two-thirds of global exports of coking or metallurgical coal, which is used for steel making. It is also the second-biggest exporter behind Indonesia of thermal coal, used for power generation.
Source: Reuters
AUSTRALIAN SHARES SURVIVE THE FLOOD
Severe flooding in Australia's resource-rich state of Queensland is taking a mounting human and economic toll. Economists now say the floods—which have hit a critical coal-exporting and agriculture region—could shave as much as three-quarters of a percentage point off the nation's economic growth in the six months through March. It's a substantial hit to growth, given that Australian gross domestic product was expected to grow only 3% this year.
The reaction in Australia's share market? So far this year the S&P/ASX 200 index is down less than half a percent.
The broad figure, of course, belies pockets of selling. Companies facing a direct hit to their business are suffering, but most of these are too small to move the broad benchmarks: Bank of Queensland is down 7.6%, and Cockatoo Coal off 8.5%. Queensland's biggest bank and insurance company, Suncorp Group, is down 3.7%.
Offsetting these declines are gains in shares of companies that will benefit, as coal prices rise because of production shutdowns in Queensland, for example. Gloucester Coal is up 4.2% after saying it is well placed to maintain high output. Elsewhere, the slipping Australian dollar is good news for exporters, retailers, and the tourism sector that has suffered under the currency's strength.
Read more…
Source: Wall Street Journal
IRON-ORE PRICES HIT EIGHT MONTH TOP
Shanghai rebar futures rose to two-month peaks on Monday, showing that iron-ore prices have room to keep recent gains as firm Chinese demand lifted key indexes to their highest since May.
Chinese steel mills, the biggest buyers of the world's iron ore, have been replenishing stocks of the steelmaking raw material ahead of the Lunar New Year in February, with stronger steel prices also supporting the buying binge. "Steel prices are increasing because traders are boosting their stocks of steel products and raw material costs, like coal, are rising," said an iron-ore trader in Rizhao in China's eastern Shandong province.
Steelmakers across Asia have been raising product prices to meet a projected increase in coking coal prices to around $300/t, the highest in two years, as supply from top exporter Australia had been disrupted by massive floods. The most active May rebar contract on the Shanghai Futures Exchange hit a high of 4 851 yuan a ton in morning trade, a level last seen on November 11.
Read more…
Source: Reuters
GOLD SEEN AVERAGING $1,457/OZ IN 2011
The average gold price this year may be 19% higher than in 2010, according to experts surveyed by the London Bullion Metals Association (LBMA). The average gold price forecast was $1 457/oz, the LBMA said on Friday.
Analysts surveyed by the group predicted that silver prices will average $29,88/oz, which would represent a 48% increase on the average price in 2010. The average platinum price in 2011 was forecast to rise 12,6% from the average 2010 price, to $1 813/oz. “And palladium shows no sign of slowing down with an average 2011 price prediction of $814,65, a 54,8% increase on last year’s bumper average price,” the LBMA noted in a press release.
Looking back at last year's survey, the average gold price prediction of $1 199/oz, which was 23,4% higher than the 2009 price, was just $26 lower than the actual average price of $1 225/oz. “All metals rose as predicted, although silver and palladium exceeded almost everyone’s expectations,” the group said.
Source: Mining Weekly
MOST MINERS AGREE TO TAX HIKE IN COPPER GIANT CHILE
Most miners in Chile have agreed to pay higher taxes to fund post-earthquake reconstruction, but investment is seen safe in the top world copper producer as prices for the red metal soar and new projects remain scarce.
Mining Minister Laurence Golborne said on Wednesday nearly all of Chile's mining industry, which initially criticized the plan, will adopt a new royalty scheme that will link tax payments to margins and cash in on a copper bonanza. "With this confirmation we have more than 80 percent of miners in terms of volume adopting the new tax system," Golborne said. "I expect that by Monday we will have more than 90 percent of miners accepting the tax." The deadline to adopt the new royalty expires on Monday, and follows similar attempts in Australia and Mongolia to reap the benefits of a comeback in commodity prices.
The private mines that have adopted the royalty extract most of the copper out of Chile, which produces a third of the world's mined copper. Continued investment will ensure steady supplies for consumers from China to the United States and Brazil. The tax increase is seen as moderate and unlikely to hit the investment plan of multinationals such as Xstrata, Anglo American and BHP Billiton, industry experts said.
Read more…
Source: Reuters
U.S. LOSES GROUND ON ECONOMIC FREEDOM TO ASIA
The world is resuming its trend toward more freedom, but the U.S. is losing economic vitality and leadership to Asia.
Riots in Greece and France! An IMF bailout for Ireland! The Euro under threat! A new government in London! Tea parties in America! Is it the end of capitalism? Many were predicting just that last year.
The 2011 Index of Economic Freedom, released today by the Heritage Foundation and The Wall Street Journal, tells a different story. The Index records countries' commitment to the free enterprise/capitalist system by measuring 10 categories of economic freedom: fiscal soundness and openness to trade and investment, government size, business and labor regulation, property rights, corruption, monetary stability and financial competition.
The good news this year? One hundred and seventeen countries, mainly developing and emerging market economies, improved their scores, and the average level of economic freedom around the world improved by about a third of a point on the Index's 0 to 100 scale.
Economies that stuck to the principles of economic freedom are recovering more quickly from the recession and financial crisis, and growing faster than countries whose governments tried to spend their way out of trouble. There's an amazing 4.5 percentage point difference in average growth rates between the big spenders and those governments that kept their budgets under control.
Read more…
Source: Wall Street Journal
DEVELOPING NATIONS FIGHT INFLATION
Price Jumps, Especially on Food, Threaten Growth Engines; A Contrast With West
Inflation is spreading across the world's largest emerging nations, leaving a noisy rattle in what have been the engines of global growth in recent years.
Central banks in Brazil, Russia, India and China, the fast-growing so-called BRIC nations now responsible for nearly a fifth of global economic activity, have all raised interest rates in recent weeks, and are testing more exotic measures to stanch rising prices, especially for food: India and Russia banned exports of onions and wheat, respectively, while China has promised price controls on items such as cooking oil.
Brazil said Friday that its 2010 inflation rate had risen to 5.9%, its fastest rate in six years, raising the chances the nation will push its already sky-high interest rates even higher, potentially hampering growth. To be sure, Brazil's single-digit inflation rate is a universe away from the hyperinflation it suffered in the early 1990s. And some analysts say fears of an emerging-market inflation spiral are overstated, with current inflation rates still below where they were when prices peaked before the financial crisis in 2008.
Still, the inflation trend is creating tricky policy headaches for officials from Beijing to New Delhi, including fears that rising food prices in these mostly poor nations may jeopardize social stability. "Inflation is one of the major risks for this year," says Nicholas Kwan, economist for Standard Chartered in Hong Kong.
Read more…
Source: Wall Street Journal
RISING CHINESE INFLATION THREATENS HIGHER CONSUMER PRICES
As China’s booming economy has made its citizens more prosperous, prices for many items, from food to clothing to new cars, have been rising. When garment buyers from New York show up next month at China’s annual trade shows to bargain over next autumn’s fashions, many will face sticker shock.
Though many Chinese are earning higher salaries, the government has become worried that rising inflation could lead to social unrest. “They’re going to go home with 35 percent less product than for the same dollars as last year,” particularly for fur coats and cotton sportswear, said Bennett Model, chief executive of Cassin, a Manhattan-based line of designer clothing. “The consumer will definitely see the price rise.”
Inflation has arrived in China. And after Tuesday’s release of crucial financial statistics by China’s central bank, few economists expect Beijing officials to be able to tame rising prices any time soon.
While American importers of Chinese goods will feel the squeeze, the effect on American consumers may be more subtle and the overall impact on United States inflation may be minimal.
Read more…
Source: New York Times
CHINESE FOREIGN CURRENCY RESERVES SWELL BY RECORD AMOUNT
China’s foreign exchange reserves surged in the fourth quarter by a record amount while the money circulating within the Chinese economy also climbed more than expected in December, according to government statistics released Tuesday that underline the country’s worsening inflation dilemma.
The Chinese government has been printing renminbi at a furious pace in order to buy foreign currencies like the dollar and the euro, which are pouring into the country through trade surpluses and foreign investment. The People’s Bank of China, the country’s central bank, has been doing so in an effort to hold down the value of the renminbi and preserve a competitive advantage in foreign markets for exporters in China and the tens of millions of workers they employ.
The additional renminbi issued to pay for rising foreign exchange reserves will make China’s inflation problem even worse, said Diana Choyleva, an economist in Hong Kong for Lombard Street Research. The extra renminbi come as the Chinese central bank has been grappling with the additional money that it pumped into the Chinese banking system in 2009 and early 2010 to keep the economy growing through the global financial crisis.
“Considering that they engineered the most dramatic monetary expansion in their own history and in the world’s since World War II, there was a large monetary overhang” even before the recent currency market intervention, Ms. Choyleva said.
Read more…
Source: New York Times
NEW MOVE TO MAKE YUAN A GLOBAL CURRENCY
China has launched trading in its currency in the U.S. for the first time, an explicit endorsement by Beijing of the fast-growing market in the yuan and a significant step in the country's plan to foster global trading in its currency.
The state-controlled Bank of China Ltd. is allowing customers to trade the yuan, also known as the renminbi, in the U.S., expanding the nascent offshore market for the currency which began last year in Hong Kong. China starts trading the yuan in the U.S., and a low-cost Indian carrier orders 180 jetliners from Airbus in a $15.6 billion deal. WSJ's Andrew LaVallee speaks to Heard on the Street Asia Editor Mohammed Hadi about these stories.
The decision is the latest move by China to allow the yuan, whose value is still tightly controlled by the government, to become an international currency that can be used for trade and investment. "We're preparing for the day when renminbi becomes fully convertible," Li Xiaojing, general manager of Bank of China's New York branch, told The Wall Street Journal. He said the bank's goal is to become "the renminbi clearing center in America."
Until the middle of last year, the buying and selling of yuan had largely been confined to mainland China by the country's strict capital controls. But in July, it opened the currency to trading in Hong Kong. Daily trading has since ballooned from zero to $400 million.
Read more…
Source: Wall Street Journal
RAISING THE RED FLAG ON RED CAPITALISM
Scratch the surface and China's economic model is less impressive than it looks.
The conventional wisdom, propagated by senior businessmen, pundits and policy makers, holds that the 21st century is China's for the taking. The wise leaders in Beijing, we're led to believe, sailed through the financial crisis with deft management. They benefit from a long-term view that eludes their American and European counterparts. Growth is steaming along at nearly 10% and the global slowdown barely registered. The counterpoint, sometimes implicit and sometimes explicit, is that China's rise comes at the cost of America's decline.
So pervasive has this view become that any effort to examine whether it's actually true comes as a breath of fresh air. "Red Capitalism" is such a work. Authors Carl E. Walter and Fraser J.T. Howie, both investment bankers, argue that China isn't so different from other economies nor so immune from normal economic laws as cheerleaders argue. An examination of the financial system—or "how China's political elite manages money and the country's economy," as the authors put it—offers a useful lens through which to view much broader issues.
A striking observation is that foreigners (and perhaps Chinese policy makers too) have become so entranced by the large amounts of money flowing through the economy that they often forget to follow it. Noting only that China has produced six of the world's 15 largest initial public offerings since 2007 might create the impression that the country is developing a capitalistic financial market capable of intermediating its vast savings into a productive corporate sector. Last year, IPOs by Chinese companies reached $105 billion, 37% of global IPO volume.
What gets forgotten is just how "public" these offerings are—for IPOs within China, the majority of the investment capital comes from other state-owned companies rather than the private sector. And in an environment where regulators carefully manage the supply of new shares coming to market, it helps to be a state-owned company if you want to secure permission to list. Hence the stock market that's presented as evidence of China's capitalist transformation is in reality a merry-go-round for circulating money from one state-owned enterprise to another.
Read more…
Source: Wall Street Journal
Politics
MEDVEDEV SIGNS INTO LAW JOINT URANIUM MINING COMPANY WITH MONGOLIA
Russian President Dmitry Medvedev has signed into law the Federal bill "On the Ratification of the Agreement between the Governments of the Russian Federation and Mongolia on the Founding of a Joint (uranium mining) Limited-Liability Company 'Dornod-Uranium'," the Kremlin press service announced.
The Bill was passed by the State Duma lower house of parliament on December 22 and approved by the Federation Council upper house of parliament on December 24, 2010.
The Agreement was drawn up by the Rosatom state corporation for the purposes of maximum protection of the rights and interests of Russia in the sphere of prospecting for and mining of uranium in Mongolia's territory. The Agreement provides for the founding of a joint limited-liability company for the mining of uranium and other associate economic minerals.
Provision is made for the main areas of the prospective company's activities as prospecting for and mining of uranium ores, transportation, the processing and enrichment of the mined minerals, the marketing of the end product, the establishment and operation of uranium production and processing plants and other infrastructure facilities on Mongolia's territory, the attraction of investments to finance joint activities in Mongolian territory, the conduct of recultivation work, and the ensurance of nuclear, radiological, and environmental safety.
The Atomredmetzoloto public joint-stock company will act as the founder of the Joint Company on the Russian side. Rosatom will act as a competent Mongolian agency.
The Agreement was subject to ratification, for it contains rules that differ from those provided for by Russia's legislation. Specifically, the Agreement presupposes the establishment of a legal entity in the organizational-and-legal form of a joint limited-liability company. Russian legislation lacks such a provision.
Source: ITAR-TASS
PM BATBOLD IMPRESSED BY DUBAI, INVITES ARAB INVESTMENTS
Prime Minister of Mongolia Batbold Sukhbaatar said he was "impressed by the highly developed infrastructure in Dubai and United Arab Emirates," and expressed hope "to build bridges of cooperation" between both countries.
During a meeting in Dubai on Monday with Sheikh Mohammed bin Rashid Al Maktoum, UAE Vice President, Prime Minister and Ruler of Dubai, Sukhbaatar said Mongolia welcomes investments from UAE and Arabic countries in the livestock and natural resources sectors.
Mongolia has more than 45 million livestock and vast agricultural and mineral resources including gold and uranium, "and this is open for investments," the visiting Mongolian Premier said in the meeting.
Sheikh Mohammed bin Rashid expressed hope that the friendly relations between their countries and peoples are boosted, WAM news agency reported.
In Abu Dhabi, Prime Minister Batbold met Sheikh Ahmed Bin Zayed Al Nahyan, Managing Director of Abu Dhabi Investment Authority and discussed cooperation opportunities in large projects of infrastructure in Mongolia.
He also met Deputy Commander of Emirates Armed Forces General Mohammed Bin Zayed Al Nahyan, and talked about developing Mongolia-Emirates relations and collaboration in wide scope of fields.
Source: PanOrient News
MONGOLIAN FOREIGN POLICY DRAFT RESOLUTION SUBMITTED
Minister of Foreign Affairs G.Zandanshatar submitted Friday a draft resolution on approval of the concept of foreign policy of Mongolia, to the Parliament Speaker D.Demberel.
The Foreign Minister has said that he submitted the draft resolution in conjunction with requirements to increase benefits of the external relations and to provide the foreign policy with economic content, in times of widening of the foreign relations and cooperation and an intensive development of economics.
According to the draft resolution, some clauses on a change of the foreign environment and on some new goals for Mongolia have been added in the concept. Furthermore, a new wording has been reflected in the concept in order to harmonize the foreign policy with the concept of national security.
Source: Montsame
DOCUMENT DEFINES THE TREND OF OUR FOREIGN RELATIONS: G. ZANDANSHATAR
You have submitted a renewed draft of foreign policy concept, which is clarified and enriched in compliance to the concept of National Security to the parliament. Foreign policy concept is viewed as foreign policy constitution. There must have been inevitable requirements as this important document gets clarified and enriched. Could you explain more about that?
There are many internal and external factors, which demand clarification over policy, have indeed emerged. In specific, noticeable change occurred in international relations since 1994. Globalization has deepened, development centers are newly emerged, and growth and development energy of technique technology, economy and climate have changed. New challenges such as environmental degradation, organized crimes such as international terrorism, human trafficking, and opium trade as well as infectious disease outbreak face us. Some Eastern European countries have become members of European Union. Changes are being made in international foreign policies.
Then what about internal factors?
The number of our country citizens studying, working, and living overseas is increasing in substantial scale, which should not be left outside of our attention. Grand development works with high speed precede prospective exploitation of substantially big mining deposits and expansion of infrastructure network. Necessity of balancing dependence on economic impact is emerging. Facilitation of continuity and unity of foreign policy, which values Mongolian national interest, is now quite significant. To tell you truth, there are cases here and there by conducting talks and discussions without much background formulation and analysis, which haven’t complied with the government policy and having negotiations, which don’t have any point. Considering these factors, renewed draft of foreign policy concept is formulated and submitted to the parliament…reliable press news would strengthen inter-citizens trust and provide positive impact to cooperation of the government organizations. However insubstantial and untimely news and information would degrade inter-citizens relation and they may even have counterbalance to friendly relations.
Public had evaluated by giving Ministry of Foreign Affairs a good mark in its works done in last year?
Relation and cooperation with our key partner countries including Russian Federation, People’s Republic of China, Japan, European countries, and other countries are strengthened and reciprocal official visits were made, which brought these relations to a new level. It’s appropriate to state that some achievements were made in course of establishing free trade agreement with partner and neighboring countries and of integrating in regional trade agreements. In specific we’re working through establishing a joint research team in course of establishing economic partnership agreement with Japan.
What about process of the program of having foreign relations with economic value?
As of first 11 months of last year, total trade turnover had reached USD 5421.8 million. This is the sum with an increase of 51.0% comparing to the prior period, when the program of having foreign relations with economic value started to get implemented.
Source: Unuudur
TRIPARTITE AGREEMENT MARKS FIRST IN MINING GRIEVANCE MECHANISM
On Friday 31 December 2010, Ch. Khurelbaatar, Chair of the Cabinet Secretariat; S. Ganbaatar, the President of the Confederation of Mongolian Trade Unions; and Kh. Ganbaatar, the President of Mongolian Employer’s Federation signed a landmark tripartite memorandum of collaboration on behalf of the Government of Mongolia, civil society, and the business community to establish an unprecedented grievance handling mechanism for the mining industry.
According to the memorandum, the three parties will form a working group in the next two months that will conduct investigations to establish a mechanism for mitigating and resolving mining related conflicts and grievances; develop training curricula on the mine life cycle for local communities and the business community; and promote broad citizen participation in mining.
Spearheading the Tripartite Initiative is the Confederation of Mongolian Trade Unions (CMTU), led by Mr. S. Ganbaatar and the Mongolian Employer’s Federaration (MONEF), headed by Mr. Kh. Ganbaatar. Upon signing of the agreement, Mr. S. Ganbaatar, President of CMTU, stated, “communities across Mongolia need a voice and the tripartite offers an opportunity to build capacity and resolve challenges related to natural resources at both the national and local level. We are pleased to sign this agreement after many months of work with assistance from the USAID-funded Economic Policy Reform and Competitiveness project.” Mr. Kh. Ganbaatar, head of MONEF, echoed these words stating, “the work we are doing now brings industry, government, and communities together to educate stakeholders on mining, its processes, benefits, and trade-offs to minimize potential disruptions and conflicts that may arise at the local and national level.”
Signing on behalf of the Government of Mongolia, Mr. Ch. Khurelbaatar, Chairman of the Cabinet Secretariat declared, “the mining industry will play a key role in the economics and social development of Mongolia. Along with the increasing investments by the foreign and domestic entities, more work places and jobs will be created. The signing of this Tripartite agreement is a major step in establishing a national conflict and grievance handling mechanism.” He added that, “the working group will investigate the best international practices for resolving conflicts and grievances regarding natural resources and will develop grievance handling methods that are appropriate for Mongolia.”
Read more…
Source: Confederation of Mongolian Trade Unions
CAR LICENSES IN DEMAND IN BEIJING
Residents in Beijing rushed to apply for new vehicle licenses under a quota system started Jan. 1 as China’s government seeks to ease traffic congestion. In all, 53,549 applications were made on the first day of the year, more than double the number of license plates to be available each month, the Beijing News reported on Saturday.
The government said on Dec. 23 that it would set a monthly quota of 20,000 new vehicle licenses in the Chinese capital. Nontransferrable license plates will be issued through a lottery system that runs on the 26th day of every month after government officials review applications on 25th, according to the measures.
An unprecedented 30,000 new vehicles were registered in Beijing in the week of Dec. 13, increasing the number of autos on the city’s roads to a record 4.76 million, as car buyers rushed to complete purchases before government incentives expired at the end of the month.
Vehicles that are not registered in Beijing are now required to apply for a permit before entering the capital, according to the government.
Read more…
Source: New York Times
KAZAKHSTAN LEADER’S LONG-TERM LEASE
Kazakhstan’s senate, generally considered a rubber-stamp chamber, voted unanimously on Thursday to ask President Nursultan Nazarbayev to extend his current term in office until 2020 by holding a referendum on continuing his rule rather than a scheduled election. Mr. Nazarbayev, who has already ruled for almost 20 years, would be 80 years old in 2020.
Source: New York Times
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NEW MONGOLIAN LAWS AND REGULATIONS
The following new law was published in the latest weekly Government bulletin. Unless otherwise decided by Parliament, it will take effect ten (10) days after publication.
Date Law
07.01.2011 Law on State sign fee
Please visit BCM's website, Legislative Working Group, for a summary of new Mongolian laws. BCM members who wish to access complete versions of the laws and regulations in Mongolian language are welcome to call or email the BCM office: 332345 or info@bcmongolia.org.
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ANNOUNCEMENTS
MANUFACTURING AND SUPPLY CHAIN “ProMat 2011” EXPO, March 21-24, 2011, Chicago
The Business Council of Mongolia in collaboration with the U.S. Embassy’s Commercial Section is now registering a Mongolian business delegation to participate in the Manufacturing and Supply Chain “ProMat 2011” Expo which will be held at McCormick Place, Chicago, Illinois, USA, from March 21 to 24, 2011.
ProMat 2011 will feature more than 700 exhibiting companies from the United States and 100 countries around the world. Attendees will find advances in the latest manufacturing, distribution and supply chain equipment and systems solutions. About 80 Educational Seminars hosted by leading experts will be included in the agenda to deliver valuable insights into the latest trends, technologies and innovations.
Please contact 332345 or saruul@bcmongolia.org for registration and additional information about the event. Registration deadline is 6 pm, February 10, 2011.
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MONGOLIAN ECONOMIC FORUM 2011, February 27-28, Ulaanbaatar
Following the success of the first Mongolia Economic Forum (MEF) in 2010, the MEF NGO will host the Mongolia Economic Forum 2011 to provide a platform for debate and discussion about important issues having an impact on Mongolia's economic growth. To register, contact the Organizing Committee at the address below by January 21, 2011. Visit: http://www.meforum.mn/
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“HOW THEY SEE US” ON BTV on JAN 15
Saturday, January 15 is the next date for “How they see us”, BTV’s fortnightly program in Mongolian started in cooperation with BCM. Tomorrow’s 15-minute program will be from 19:40, and will cover reports on Mongolia in international media, featured in the BCM NewsWire and other sources.
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“MM TODAY” on MNB-TV, Fridays at 21:15
BCM is pleased to announce that Mongolian National Broadcasting continues its cooperation with BCM on “MM Today”. This English news program is aired every Friday for 10 minutes and is scheduled for 21:15 tonight. Tune in to watch this program that reports stories from today’s BCM NewsWire.
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NEW POSTINGS ON BCM WEBSITE'S 'PRESENTATIONS' AND 'MONGOLIAN BUSINESS NEWS'
From the successful Mining Investment Summit UK 2010 in London on November 24-25, 2010, posted are 15 featured speaker presentations on BCM's website (www.bcmongolia.org) in the "Resource, Presentations" section for your review.
We are now posting some news stories and analyses relevant to Mongolia on the BCM website's ‘Mongolian Business News’ as they come, instead of waiting until Friday to put them all together in the weekly NewsWire. The NewsWire will, however, continue to be issued on Friday, and will incorporate items that are already on the home page, so that it presents a consolidated account of the week’s events.
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Economic Indicators
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INFLATION
Year 2006 6.0% [source: National Statistical Office of Mongolia (NSOM)]
Year 2007 *15.1% [source: NSOM]
Year 2008 *22.1% [source: NSOM]
Year 2009 *4.2% [source: NSOM]
December 31, 2010 *13.0% [source: NSOM]
*Year-over-year (y-o-y)
CENTRAL BANK POLICY LOAN RATE
December 31, 2008 9.75% [source: IMF]
March 11, 2009 14.00% [source: IMF]
May 12, 2009 12.75% [source: IMF]
June 12, 2009 11.50% [source: IMF]
September 30, 2009 10.00% [source: IMF]
May 12, 2010 11.00% [source: IMF]
CURRENCY RATES – january 13, 2010
Currency Name Currency Rate
US dollar USD 1251.29
Euro EUR 1643.01
Japanese yen JPY 15.07
British pound GBP 1969.22
Hong Kong dollar HKD 160.90
Chinese Yuan CNY 189.28
Russian Ruble RUB 41.58
South Korean won KRW 1.13
Disclaimer: Except for reporting on BCM’s activities, all information in the BCM NewsWire is selected from various news sources. Opinions are those of the respective news sources.
