Prime Minister S. Batbold has made it clear that he would prefer the Tavan Tolgoi deposit to remain under 100% state ownership, and not be developed as a joint venture like Oyu Tolgoi.

The working group set up by Parliament to prepare the general guidelines for using the mine told him at a meeting earlier in the week that there were two options: foreign investors could be taken as partners with the State owning 51 percent, or the State will keep 100 percent ownership and give the selected investor(s) coal extracting rights under an agreement. He said he had advised the group to work on the second option.

Soil removal work must start this summer if the Parliament directive to begin export from Tavan Tolgoi by 2012 is to be followed. Mr. Batbold has instructed the working group to ready its recommendations before Parliament begins its Spring session. The Government will finish negotiations with investors during the session. The tender will be floated in the summer.
The Minister for Nature, Environment and Tourism told him the group is ready to present the plans for infrastructure, railway and water reserves. The project proposes to establish a power station with an initial capacity of 100 mw, to be gradually raised to 600 mw. The Ministry for Road, Transportation, Construction and City Development is working on choosing between the two possible railway routes: Tavantolgoi-Zuunbayan-Sainshand and Tavantolgoi-Oyutolgoi-Gashuunsukhait. The closest water source is Balgas Ulaan Lake, 65 km from the mine, but the water there can supply only about half the mine’s needs. Other sources will have to be identified.

Minister of Minerals and Energy D. Zorigt said a fresh round of talks with 11 international companies and consortiums will be held this month.  Norwest Corporation, a Canadian consultancy, is working as technical advisor, while JP Morgan and Deutsche Bank have been working as financial advisors. Individual consultants of the World Bank will also offer their services. The preliminary payment demanded will be no less than USD250 million.

Article Source

The source of information was obtained from Mongolian language newspapers Ardiin Erkh and Zuunii Medee and was included in English language in the news highlights of BCM Newswire issue 104.  BCM Newswire is sent once a week and highlights leading articles relating to business, investments, & mines in Mongolia.  BCM Newswire is sent to members of Business Council of Mongolia (BCM) and is made available to public after a month at bcmongolia.org.

Shares in Khan Resources surged 14.7% in Toronto on Monday following the announcement that the company has signed a non-binding memorandum of understanding (MoU) with MonAtom, Mongolia's State-owned uranium development company, on setting up a joint venture company to own and develop Khan's uranium project in the country.

Khan's main asset is a 58% interest in Central Asian Uranium Company (CAUC), which holds a mining license on the Dornod uranium project in Mongolia. Khan also owns 100% of an adjacent license. Both MonAtom and a subsidiary of Russia's Atomredmetzoloto (ARMZ), which has launched a hostile bid for Khan, own 21% each of CAUC. The Dornod project has faced uncertainty after Mongolia passed a new nuclear energy law, and with Khan fending off ARMZ's takeover campaign.
Khan said it believes the deal with MonAtom will enable it to fulfill the requirements of the new law in Mongolia and provide certainty for the project, while still retaining value for its own shareholders. The new nuclear energy legislation gives the Government the right to take ownership, without payment, of at least 51% of a project if uranium resources were determined through exploration with State funding.
Under the terms of the MoU, MonAtom would buy a 51% interest in both CAUC and Khan Mongolia, in accordance with the new nuclear energy law, but MonAtom would then transfer to Khan part of its interest in the joint venture in exchange for shares representing 17% of Khan, and a warrant to buy another 2.9%. At the end of the day, Khan would own 65% of the new JV company, which in turn will own 74% of CAUC and 100% of Khan Mongolia.

"With this MoU, we think we have achieved the right balance,” said Khan CEO Martin Quick. “It gives us a stable ownership and regulatory platform upon which we can obtain the necessary financing to complete the project.” The parties aim to have a definitive JV agreement signed by the end of March.
“Khan's board of directors believes that the transactions contemplated by the MoU will, when completed, deliver far greater value to Khan's shareholders than the price per share offered by ARMZ in its hostile bid,” the firm said.

Khan said that under the agreement with MonAtom, applications to reregister the existing CAUC mining license and Khan Mongolia exploration license would be approved and new licenses issued within seven days of signing the MoU. The company's exploration license would also be converted into a mining license within 45 days of signing the MoU and Khan Mongolia will be appointed as the operator of the Dornod project.

The company said the JV partners will aim to negotiate and finalize an investment agreement with the Government of Mongolia within six months after signing a definitive JV agreement. The investment agreement will likely be modeled on the deal secured last year by Rio Tinto and Ivanhoe Mines for their Oyu Tolgoi copper/gold project.

Article Source

This article was originally published by miningweekly.com and was obtained from the highlights of BCM Newswire issue 103.  BCM Newswire is sent once a week and highlights leading articles relating to business, investments, & mines in Mongolia.  BCM Newswire is sent to members of Business Council of Mongolia (BCM) and is made available to public after a month at bcmongolia.org.

25 January 2010 – Mongolia is currently threatened by a “Dzud”, which is a multiple natural disaster consisting of a summer drought producing small stockpiling of fodder, followed by very heavy winter snow and lower than normal temperatures.

Heavy and continuous snowfall and blizzards have resulted in a sharp fall in daily temperatures - dropping to below -40°Celsius in 19 out of a total of 21 ‘aimags’ (provinces) in Mongolia.

According to the National Emergency Management Agency (NEMA), the extreme cold and heavy snow have already caused the death of more than one million livestock, worsening food security and predicted subsequently to result in a deepening of poverty and increased internal rural-urban migration for many families.  According to the World Bank, livestock herding today, accounts for around 35% of employment in Mongolia.

In addition to a concern for the situation of isolated herding families, the agencies making up the United Nations Team are assessing the situation of the poor, particularly those living in the 94 soums (villages) considered to be most affected and inaccessible. “The poor did not have the resources to stockpile food or fuel for heating and the supplies in the now inaccessible village as a whole are stretched”, said Rana Flowers, the Resident Coordinator a.i. in Mongolia. “The UN agencies have mobilized to assess the situation and coordinate our efforts to reach the most affected populations.  In addition to the impact this is having on livelihoods now and into the future, we are worried about the immediate plight of the isolated population. Among health concerns are pregnant women cut off from facilities and trained care (three women have reportedly already died in childbirth); increases in ARI and pneumonia in the light of the H1N1 in the country among children and pregnant women; and malnutrition levels with lowering levels of access to food and nutrition in affected areas”, she added.

In addition, children who have been ordered to remain in dormitories due to the danger they would face trying to travel to their families in such conditions, are living with limited and extremely poor heat and limited food supplies in many schools. There are approximately 22,200 children in 265 dormitories in need of assistance.

In the last dzud of 2001, not considered to be as severe as the current 2010 experience, an increase in malnutrition and acute infections of children and pregnant mothers were documented. The plight of populations in the post-dzud period which lasts from late February to early spring is also a period of concern with food supplies having been exhausted and the animal supply severely depleted, and the risk of disease heightened. The trauma of losing livelihoods results in families and children at high risk of developing extreme fatigue and psychological stress.

The Government has appealed to the donor community for food, flour, rice, medicines and equipment, candles, heating supplies, warm clothing, as well as for funding to buy and deliver fodder for livestock. The United Nations in Mongolia was formally requested to coordinate all donor contributions.
The United Nations agencies and specialized agencies actively contributing to the relief efforts in Mongolia include FAO, UNDP, UNFPA, UNICEF, WHO and UN-HABITAT.

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For more information please contact:
Rana Flowers, Resident Coordinator a.i and UNICEF Representative, phone: +976 11 326221
Wiwat Rojanapithayakorn, WHO Representative, phone:  +976 11 327870
Argentina Matavel, UNFPA Representative, phone: +976 11 323665
Shoko Noda, UNDP Resident Representative, phone: +976 11 327585
N. Oyundelger, FAO Assistant Representative, phone: +976 11 352512

This Saturday, 30 January at 5.00 PM there will be a splendid performance of "Tosca" the wonderfull opera by Giacomo Puccini which had it first premiers this month a 109 years ago, on 14 January 1900.

The State Academic Theatre has a many years of practice with Tosca and assembled a great cast of opera singers for this performance. Tickets are available at the the box office of the State Academic Theatre for Opera and Ballet (the pink Roman style building) at Sukhbaatar Square.

Telephone: 70110389, 11 320268, 96683639. Website of the theatre: www.opera-ballet.mn

Summary
In February 1798 French troops had occupied Rome and other parts of the Papal States and proclaimed a new Roman Republic. The opera's Cesare Angelotti (based on the historic Liborio Angelucci[4]) was one of the republican leaders and consul of Rome. The Pope had to flee to Tuscany: Ferdinando IV of Bourbon, King of Naples, tried to rescue him but was himself defeated. In January 1799 the Parthenopean Republic or Neapolitan Republic was proclaimed. In April 1799, while Napoleon was in Egypt, an Austrian-Russian army under General Suvorov crossed into northern Italy and defeated the French. In June Cardinal Ruffo occupied Naples in the name of King Ferdinand, and in September the Bourbon troops entered Rome. The reactionary party was inspired by Maria Carolina of Austria, the wife of Ferdinando IV and sister of Marie Antoinette. After the death of Pope Pius VI in August 1799 she assumed the regency and started a "cleansing" action against republicans, liberals or simply people who had compromised themselves under French rule. There were thousands of victims, including many artists, scientists and intellectuals.

The following spring, Napoleon crossed the Alps with an army and met the Austrians (commanded by general Mélas) at Marengo. The Austrians outnumbered the enemy and, after fierce fighting, took control of the locality in the morning of 14 June 1800. The battle seemed over when Marshal Desaix, at the cost of his life, managed to reverse the situation. By evening the victory had been won by the French army.

1. S. Purevsuren, Senior biologist, Snow Leopard Conservation Fund Mongolia will give a talk entitled: The snow leopard research conservation center talk will be about Tserendeleg snow leopard research conservation center located in the Mongolian south Gobi. It is the first ever long term study of snow leopards, which consists of an international team of scientists and students, aiming to improve their conservation. They used many research methods such as sign survey, remote cameras, satellite-GPS collars to identify the home ranges etc. In addition, you will hear about their snow leopard enterprise program and so on.

2. Batmunkh Davaasuren from NUM, will give a talk entitled: The status of the Pallas's fish eagle in Mongolia The Pallas's fish eagle is distributed throughout central and southern Asia. This species is classified as Vulnerable by IUCN. The survey objectives were to determine the distribution and status of PFEs in Mongolia, identify the threats to the Mongolian population, assess local recognition of the species and describe preferred habitat in Mongolia. This study has shown many results such as observation of PFEs in 9 out of 13 historic sites visited, a preference for freshwater sites with good fish stocks etc. In addition, they identified many threats to this species.

on *Thursday, February 4, 2010.* at 6:30 pm

Biobeers is held on the first Thursday of every month at Sweet Cafe (located behind the Information and Technological National Park and next to the Admon Printing Company, west of Internom Bookstore Building). People are requested to arrive after 6pm, in time for the talk to start at 6.30.

Biobeers is a monthly gathering of government and NGO staff, biologists, researchers, and other professionals interested in conservation. Each month, Biobeers sponsors a half-hour presentation on a topic relevant to Mongolian conservation, followed by an informal gathering to discuss activities and issues of interest. Biobeers is an opportunity to find out what is happening in the field of conservation in Mongolia, talk informally to other researchers and peers in your field, and share information about issues critical to the environment and people of Mongolia.

The Research Institute for Humanity and Nature (RIHN), Kyoto, Japan holds an International Symposium on "The Collapse and Restoration of the Mongolian Ecosystem Network in the Context of Global Environmental and Social Changes" on 23rd to 24th of January, 2010.
This symposium aims integration of information related to the environmental issues and deepening the understanding ecological system in Mongolia. About 20 presentations are scheduled by both natural science and humanities’ studies. Those researches are managed by one of the RIHN’s projects “Collapse and Restoration of Ecosystem Networks with Human Activity”. Leading scientists from Mongolia are invited to the conference as well.

Venue: RIHN, Kyoto, Japan
Date: 23rd-24th, January 2010. (25th excursion)
Details & Website: http://www.chikyu.ac.jp/yamamura-pro/mn_sympo/

One of the abstracts

“Interference impact of global warming and globalization on the society in Mongolia”

BATJARGAL Zamba, World Meteorological Organization, UN

There still is a significant portion of uncertainties with regard to the global climate change despite that the last Fourth Assessment Report of the IPCC increased a worldwide common understanding about the present trend of global climate change and human activities as its main cause. Estimated future climate scenarios vary from model to model due to the limitation of global climate models (GCMs) and accordingly climate projections are different for given particular areas. Mongolia has developed the National Climate Change Programme referring to the results of projections based on well known GCMs. However, the scientific and professional communities engaged in this exercise are not able to guarantee full confidence in these projections due to the fact that the current GCMs had not captured all intrinsic components in driving factors and possible imperative non-linear feedback effects. The current level of warming at the territory of Mongolia based on instrumental records also needs to be shaped taking into account the locations of specifics of meteorological stations and gradually increasing localized “smog cap” effect in cold seasons in some key settlement areas. Studies on climate change undertaken so far mostly focused on the expected stresses of climate change on ecosystems, while interaction between natural and managed socio-economic systems were considered in simplified ways. In the IPCC Synthesis Report on Climate Change it was recognized that the “effects of climate change on human and some natural systems are difficult to detect due to adaptation and non-climatic drivers”. Mongolian society in recent years has been experiencing series of “shocks” induced by globalization related pressures. At the same time, Mongolia has a limited background to absorb these shocks as a nation due to its past political isolation with non market economic system and culturally “land locked” situation with limited access to a broader cultural domain in the world due to its imposed ideological barriers. Therefore, it is important for Mongolia to consider possible combined effects of global warming and globalization on the society in the process of developing its adaptation strategy anticipating both long term variability and non reversible change in climate conditions.

 

As most people, who are even remotely connected to Mongolia know, the much publicised (and long overdue) Mongolian economic boom is set to start in earnest. World analysts have now jumped in and tried to predict the shape of things to come.

Mr. MacNamara, a journalist from the Financial Times has recently written an article about Mongolia’s third neighbour policy, while today the news about Mongolia seems to be all about the pre-IPO road-show of South Gobi Energy trying to raise $400m in HK for its Mongolia projects.  Before that it was the agreement between Areva and Mitsubishi to develop Uranium deposits in Mongolia together. Not a week goes by that Mongolia does not make the international business headlines with a new deal or story about its upcoming growth, it is clear that the world media’s are slowly catching up to the “Mongolia story” but where is that story heading?

Principally, it seems that the main questions asked by analysts are:

• How will Mongolia juggle its appetite for foreign investments while maintaining national and political integrity?
• How will Mongolia play its formidable neighbours to its advantage yet retain a real independence from both?
• Will the much flaunted “third neighbor policy” work and be efficient or is it merely an elaborate trap for foreign investors?

While the Mongolian economy and its democratic movement are notoriously wild and unpredictable, all the signs seem to point towards a real desire from the political class to move in the right direction. All the ingredients for Mongolia to become this decade’s success story are present, now it is simply a case of blending the right mix of ingredients together to obtain a performing economy. This is actually a lot trickier than it sounds. Thankfully, Mongolia is still a functioning democracy and its elected representatives are still answerable to the people of Mongolia, if only through a system of fair elections and a generally free press.

The will to move in the right direction is clearly demonstrated by the new generation of Mongolia’s politicians who are fast becoming a formidable force, Mr. Zorig, the minister for Mineral Resources, has already accomplished much; he not only achieved the completion of the OT agreement but he has also restored Mongolia’s tainted reputation with Foreign Investors. Mrs. Oyun from the Civil Will Party seems to be one of the political shooting starts and also one of the finest and most driven politicians I have ever seen.

Mongolia’s main weakness has always been its isolation, landlocked between two enormous powers. With the correct exploitation of its resources, Mongolia now has the opportunity to turn that weaknesses into a strength and take full advantage of both neighbours. To achieve this, Mongolia will need to thread a fine line and play a tricky political game if it is to come out on top. Mongolia’s position is not an easy one; it is likely to become the setting of the clash of the titans over its resources. Russia’s agenda for Mongolia seems to be more a question of political dominance while China seems to be primarily concerned with securing easy and cheap access to the resources Mongolia is so abundant in and that China so desperately needs. The country itself seems locked in a love / hate relationship with China while it still has ambiguous feelings about Russia.

Concerning Russia, Mongolia seems uncertain as to where its relationship now stands and worries that Russia will increasingly use the carrot and stick method to obtain what it wants from Mongolia, this was demonstrated with the opposition to the Millennium Challenge railway funds as well as the timely reminders of Mongolia’s supposed outstanding debt to Russia. Russia has notoriously used threats, blackmail and occasional symbolic rewards in dealing with its own internal affairs as well as its previous (Soviet) area of influence; the pressure from Russia is likely to come from the Public sector and will be aimed squarely at the Mongolian Government. China on the other hand is more likely to play a more subtle game, using discrete methods of cajoling, bribery, corruption and its own economic dominance to ascertain its power over Mongolia but this is unlikely to be done by the state but rather led by private Chinese entities.

The best way for Mongolia to leverage its enormous resources against its neighbours is to use what has now been termed “The Third Neighbour Policy”, essentially a loose understanding that whenever possible and advantageous, Mongolia will deal with countries or entities that are neither Chinese nor Russian. This policy has a number of clear advantages, the most obvious of which is that Mongolia should be able to retain a greater independence from either of its neighbours but should also be able to obtain greater transparency and accountability from the  “third neighbour” companies such as Rio Tinto, BHP, Peabody and so forth than from its geographic neighbours.

Mongolia’s favoured third neighbours have traditionally been considered to be Japan, Korea, India, the USA and sometimes a few of the European countries. The policy allows them to indiscriminately pick and choose the  most  suitable partner for each project. The next mega project in the pipeline is the famed Tavan Tolgoi project, the huge coal deposit in the South Gobi. It is too big for a single company to exploit and so will have to be divided and its licenses allocated accordingly. The way this will be done will really settle the question of Mongolia’s foreign policy and its use and abuse of the third neighbour policy. Mr. Zorig has announced that they will announce the shape of things to come regarding Tavan Tolgoi early in 2010 and choose its companies soon thereafter. If Oyu Tolgoi was the appetizer, the amuse-bouche even, Tavan Tolgoi will be the main course.

But, for the policy to have any chance of success it is not simply sufficient to wish it so, Mongolia must become an attractive destination for foreign investments. While some progress has certainly been made, it still needs to improve its offering; the corner stones of foreign investments in Mongolia will be the introduction of effective measures against the rising problems of corruption and the creation of a strong, independent, judicial system. The business environment of Mongolia is still good but can be further strengthened with more comprehensive, transparent and accessible information to foreign investors. Improving political stability is a longer term goal but is part of the greater understanding required on the part of Mongolia as to what is essential for the country to remain competitive in an increasingly globalised world.

Mongolia has already learned much with the debacle of the 68% windfall tax, it must carefully manage its fiscal and foreign policies, a too obvious show of greed on the part of the government will force foreign investors to seek their fortunes elsewhere while a too lenient policy will mean that Mongolia gets taken advantage of and will not receive its fair share of revenues.

On the flip side of the coin, if the third neighbour policy becomes truly effective, it may well anger its two very large and powerful neighbours who feel that they are missing out and see their influence diminish within Mongolia. Mongolia depends on those neighbours for its survival as they are (China in particular) Mongolia’s majority trading partners. Furthermore, Mongolia could be perceived as setting a bad example for its neighbours; a democratic and successful economy on their doorstep might set a dangerous precedent, in particular for the inner Mongolian region of China. It does not take a big stretch of the imagination to understand that both Russia and China have every interest to see Mongolia’s democracy and its third neighbour policy fail. A strong Mongolia is the last thing they want to see. How Mongolia handles this potential political and economical backlash from both countries is the most interesting of questions.

In the end it might well be the case that Mongolia’s abundant availability of minerals might end up being  the catalyst that will lead the country to its very own demise. As many other ex-Soviet, resource rich, central Asian countries have already demonstrated, the tightrope balancing act of democracy and good governance is hard to achieve, leaving very little room for errors. It would only be too easy for Mongolia to become a failed state, ruled by despots and only concerned with the well being of its ruling class.

Most people are confident that Mongolia will manage this difficult balancing act well, it will of course make mistakes along the way but as long as it retains a fair system of checks and balances, it will be able to recover from those mistakes and forge ahead. I look forward to seeing Mongolia develop into one of the most successful economies of this decade and will continue to be an avid spectator of this fantastic story.

This article was written by Christopher de Gruben.

More articles by this author available here.

By Chukata

Mongol horse racing at Nariinteel

Mongol Naadam festival in July is followed by a season of weddings and feasts. Traditionally Naadam and any major feasts include the “three manly sports”, namely archery, wrestling and horse racing. There was a trend for wrestling and racing to be included in main events and archery being excluded. That has changed when the President of Mongolia made a decree to support archery. I would like to turn your attention to Mongol horse racing and how this traditional sport is changing in modern...

World cup fever and summer heat have hit UB, with beer gardens on every corner and stores running out of cold drinks. Here's a multi-lingual cover of the "Waving Flag" done by the participants of Universe Best Songs, the Mongolian translation of American Idol.

And if you view the video on Youtube itself, don't forget to activate the Vuvuzela button with the football icon at the bottom for a complete football experience.

I think I heard the girl say "habibi" in Arabic at around 2:15 into the song. Universe Best Songs participants seem more interesting than I'd thought....

I can't embed it. but if you follow the link it's one awesome film about our planet earth.
and it kicks off with a Mongolian long song!

http://www.youtube.com/watch?v=jqxENMKaeCU