Mongolia Business Focus November 5th, 2012
Mongolia Business Focus
A digest of key Mongolian business news & information
November 5th, 2012
A selection of key articles, information and links of interest from the last 7 days regarding the business and risk environment of Mongolia compiled by analysts at EBM Consulting ( http://www.ebmconsulting.com.hk ). We provide pre M&A, pre JV and enterprise risk due diligence services in frontier markets across Asia with Mongolia a specialty.
*** It was a pleasure to meet so many delegates at EBM’s exhibition stand at last week’s Mongolia Investment Summit in Hong Kong, including the Mongolian Consul General to Hong Kong. Thank you!***
- Business & Economy
- Mongolian Language News
- Mining & Investment
- Politics & Security
- Upcoming Events
Business & Economy
(Ref: Info Mongolia, 05 Nov, 2012) The regular Cabinet meeting the Ministers of Government took place on Saturday, November 03, where the main issue discussed was the measures to accelerate the implementation of the State Policy on Railway Transportation that was approved by Resolution No.32 by the State Great Khural (Parliament) in June 2012.
(Ref: news.mn, 05 Nov, 2012) Reports say that a new wave of petrol price increases is coming to Mongolia. There is sound reasoning behind these reports. Russia, the only and largest petrol supplier to Mongolia has faced domestic petrol shortages. Russia’s largest oil refineries are undergoing technical reforms because the AI-92 type petrol is widely believed not to be up to standard.
(Ref: UB Post, 04 Nov, 2012) Last Friday, Mongolbank announced the formation of a Monetary Policy Council to assure financial stability in the country. The council has a total of 12 members, four of which are from outside Mongolbank. Those four are: S.Purev, the Deputy Minister of Finance; Dr. B.Otgontugs, the Deputy Director of Economics’ School of Mongolian National University; B.Tuvshintugs, the Head of Economic Science Institution; and D.Batjargal, the Head of Finance and Economics Institution of Mongolia.
(Ref: the Australian, 01 Nov, 2012) WINTER comes early and quickly to Mongolia. Only six weeks into the northern autumn, night-time temperatures are probing -20C and snow regularly dusts the hills that surround the capital, Ulaanbaatar.
(Ref: news.mn, 01 Nov, 2012) The Vice President of the Central Bank of Mongolia, E.Batshugar, spoke to our journalists during the parliamentary discussion on the direction of monetary policy for the State in 2013.
(Ref: Reuters, 01 Nov, 2012) Nov 01 – Fitch Ratings has affirmed Mongolia’s Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDR) at ‘B+’ with Stable Outlook. The agency also affirmed the Short-Term Foreign-Currency IDR at ‘B’, and the Country Ceiling at ‘B+’.
(Ref: the WSJ, 31 Oct, 2012) Mongolia plans to raise $1.5 billion by selling a government bond to finance the development of the landlocked country’s infrastructure, its central bank governor said Wednesday.
(Ref: the NZ week, 31 Oct, 2012) Mongolia’s economy would grow 11 to 12percent in 2012 but still faced major challenges, the World Bank said Tuesday. World Bank (WB) Country Manager to Mongolia Coralie Gevers said the main growth sectors were construction, agriculture and communications and it was positive agriculture had finally recovered from the dzud (extremely cold and heavy snow weather).
(Ref: Info Mongolia, 30 Oct, 2012) A delegation from the National Assembly of the Kingdom of Thailand led by Deputy Speaker of the House of Representatives, Mr. Charoen Chankomol conducted a visit to Mongolia on October 27-29, 2012.
Mongolian Language News
Mongolian language media articles translated by EBM researchers:
(Ref: shudarga.mn, 5 Nov, 2012) The Independent Authority Against Corruption (IAAC) has officially stated that B.Chuluunbaatar President of Monnis Group one of the richest people in Mongolia is being questioned in connection with a bribery case by the IAAC. Monnis Group has 15 subsidiaries, including Monnis International, Monnis Mining, Monnis Properties, Monnis Motors, Monnis Com, Monnis Insurance, Aero Mongolia, Power Concern, and MCPL etc. Big companies Southgobi Sands, and Oyu Tolgoi rent offices at the Monnis Tower which owned by him. One of Chuluunbaatar’s companies owns the right to supply Oyu Tolgoi. He has been said to be the state’s car trader who has used his good connections with politicians. There is enough evidence that he has gained lots of profit through supplying cars to the state. Today the IAAC stated that he was involved in a bribery case which is related with Southgobi and D.Batkhuyag former Head of the Mineral Resources Authority.
(Ref: sonin.mn, 2 Nov, 2012) D.Bat-Erdene MP is known by people as the owner of Ajnai Group. He is said to be a rich person who owns 49% shares of Tavantolgoi JSC which a state-owned company.
Generally, candidates standing in elections must resign from state posts by January 1st of the election year. However D.Bat-Erdene is still a member of the Managing Board of Tavantolgoi JSC [a state post]. Recently there is a rumor going about that he has a debt of MNT 80 billion (approximately US$ 61.5 million). If it’s true, the General Election Committee should not allow him to be a member of parliament.
(Ref: chuhal.mn, 31 Oct, 2012) The Ulaanbaatar City Council Election is coming soon. However the wife, daughter, son, son-in-law, and assistant of S.Erdene Minister of Human Development and Social Welfare [and member of the DP] are standing for positions in the Ulaanbaatar City Council Election in the Bayangol district. Particularly, N.Ninjbadgar wife of the Minister is standing in the 20th Khoroo of Bayangol district, his son E.Ganbolor in the 8th Khoroo of Bayangol district, T.Ser-Od who has worked as an assistant for him in the 14th Khoroo of Bayangol district, and his daughter E.Sodgerel is nominated through the party listing by Proportional System. The Mongolian People’s Party has been campaigning against this senior Democratic Party [DP] member’s relatives gaining state service positions.
Mining & Investment
(Ref: Taipei Times, 05 Nov, 2012) Deep in the heart of the Gobi Desert in Mongolia amid a landscape of sand dunes and ice canyons, one of the world’s biggest copper mines is about to come on stream. Anglo-Australian miner Rio Tinto and Canada’s Turquoise Hill Resources have jointly led construction of the US$6.2 billion Oyu Tolgoi mine, which is expected to produce 450,000 tonnes of copper concentrate a year at its peak.
(Ref: news.mn, 05 Nov, 2012) The Hong Kong arm of a major Australian mining company based in Mongolia has yet to comment on why its senior lawyer is still being questioned by anti-corruption authorities and banned from leaving the country.
(Ref: UB Post, 04 Nov, 2012) On Wednesday, the Economic Standing Committee held a meeting where Ts.Orkhon, the Executive Director of the MIAT Mongolian Airlines, introduced their operations and management. Though the airline, which flies four rented planes to Asian and European countries, has a potentially profitable future Ts.Orkhon stated that MIAT is still operating at a loss.
(Ref: unuudur, 02 Nov, 2012) Newera Resources (ASX: NRU) has concluded maiden drilling at its Shanagan East Coal Project in Mongolia with the most recent holes drilled intersecting shallow coal. Drilling intercepted between 2 metres and 4.3 metres of cummulative net coal in five of the last holes to be drilled in the 24-hole, 1,500 metre program.
(Ref: Proactive Investors, 02 Nov, 2012) Aspire Mining (ASX: AKM) has boosted the coking coal Probable Reserves at the Ovoot project in northern Mongolia by 23% to 219 million tonnes. Ovoot, with the higher reserves is now more than ever a world class ranking coking coal asset.
(Ref: unuudur, 02 Nov, 2012) A former Mongolian president and fighter for greater state control of mining may be in jail, but the coalition that will rule Mongolia for the next four years is stacked with resource nationalists. Little over two weeks ago shares in Turquoise Hill Resources (NYSE:TRQ TSE:TRQ) plummeted after the company said it received a letter from Mongolia’s mines minister asking to renegotiate a deal that gave the country 34% ownership of the massive Oyu Tolgoi mine.
(Ref: Xinhua, 30 Oct, 2012) Mongolia expects to recover its mine supply to the Chinese market in five to ten months as China has reduced purchasing mine in Mongolia due to the sluggish global economy, the vice minister of the country’s Ministry of Economic Development Chuluunbat Orhirbat said here on Tuesday.
Politics & Security
(Ref: news.mn, 05 Nov, 2012) Some MPs of the opposition party MPRP held a sit-in strike blocking the MPP building. The protest by MPRP members is related to up-coming local election. The Election Committee in Sukhbaatar district had refused to register 12 members of MPRP as candidates in local election.
(Ref: news.mn, 05 Nov, 2012) Prime Minister Altankhuyag Norov departed to visit the provinces of Khentii, Dornod and Sukhbaatar on the morning of 5th November. The Prime Minister`s first destination is the resource rich Dornod province, which has a promising future of crude oil development.
(Ref: UB Post, 04 Nov, 2012) A Consultative Meeting among the Foreign Ministries of the Russian Federation, People’s Republic of China and Mongolia was held for the 8th time at the Directorial-level of the affiliated territorial departments in Moscow on Monday, October 29th.
(Ref: Info Mongolia, 02 Nov, 2012) Member of the State Great Khural (Parliament) of Mongolia Ukhnaa KHURELSUKH delivered a letter of resignation from Parliament membership to the Speaker of the Parliament Zandaakhuu ENKHBOLD on November 02, 2012.
(Ref: Info Mongolia, 01 Nov, 2012) The President of Mongolia Tsakhia ELBEGDORJ is to attend the 9th Asia-Europe meeting Summit (ASEM) to be held in Vientiane, Lao PDR under the theme “Friends for Peace, Partners for Prosperity” on November 05-06, 2012.
“Metals Mongolia-2012” is Mongolia’s premier international conference focusing on mining and metallurgy, organized in line with the government’s long term vision for economic diversification and competitive industrialization.
Venue: Chinggis Khaan Hotel, Ulaanbaatar
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Venue: Business Design Centre, London
The Mongolia Investment Congress is China’s only conference to focus on the investment, business, and finance opportunities this emerging market has to offer. Meet investors, governments, frontier funds, regulators, and many more key players at China’s only Mongolian Investment Conference.
Venue: Shanghai, China
The Asia Mining Congress is the region’s leading mining investment event connecting the most important global mining stakeholders with Asian opportunities and capital. In its 9th year, AMC attracts 2,000+ participants and will continue to offer the most authoritative agenda and targeted networking for you to do business with the mining and investment community in Asia.
Venue: Marina Bay Sands Convention Centre, Singapore
About ‘Mongolia Business Focus‘
Mongolia Business Focus is a periodic compilation of news and enterprise risk related articles associated with Mongolia. The articles are compiled and distributed by frontier market specialists EBM Consulting, market entry & enterprise risk consultants (www.ebmconsulting.com.hk). EBM has offices in Hong Kong and Ulaanbaatar and associates in 55 countries worldwide. We have over 4 years of experience supporting companies and investors making informed business decisions in Mongolia through the provision of due diligence and related services.