Mongolia Business Focus December 10th, 2012 - EBM Consulting

Mongolia Business Focus

A digest of key Mongolian business news & information

December 10^th, 2012

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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.

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Sections:

• Business & Economy
• Mongolian Language Media News
• Mining & Investment
• Politics & Security
• Upcoming Events

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Business & Economy

EBRD arranges US$ 46 million syndication in Mongolia to boost XacBank?s SME financing

(Ref: News.mn, 10 Dec, 2012) The EBRD is arranging a senior US$ 46 million loan to Mongolia?s XacBank, the fourth largest bank and a leading small business lender in the country. This will be the first syndicated financing facility for the EBRD in Mongolia?s financial sector involving commercial banks, and one of the first syndicated loans in the country in general.

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84 Company?s Gravel Exploitation Permits To Be Terminated

(Ref: UB Post, 07 Dec, 2012) The Capital City Environmental Protection Agency (CCEPA) is planning to request the termination of permits, to businesses that are currently conducting exploration and exploitation of gravel deposits in and around the protected areas of Tuul River, from the Ulaanbaatar Governor.

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METI ? Ministry of Economy, Trade and Industry of : Japan Signed the Joint Statement on Environmental Cooperation, Climate Change and the Joint Crediting Mechanism with Mongolia

(Ref: 4trader, 07 Dec, 2012) On December 6, 2012, on the occasion of the 18th Session of the Conference of the Parties (COP18) of the United Nations Framework Convention on Climate Change (UNFCCC), which is currently held in Doha, Qatar, the Government of Japan had a bilateral meeting with the Government of Mongolia.

Mongolia fends off Chinese control of strategic industries

(Ref: Malaya Business Insight, 06 Dec, 2012) Amid the current China-fueled rush for resources, Mongolia?s national strategy identifies the country?s mineral wealth as a security Achilles heel, citing the risk of ?turning into a raw materials appendage to other countries.? As part of that, China and Russia are each limited to a third of Mongolia?s total foreign investment.

200 billion MNT bond approved

(Ref: News.mn, 06 Dec, 2012) The Standing Committee on the Economy in parliament discussed the Government bond that was designated to support tanneries and approved it during today`s meeting. Currently there are 35 tanneries and 178 processing factories operating in Mongolia. Herders supply 178 million skins to these tanneries. Domestic producers process only 25 percent of this supply and foreign tanneries buy 75 percent.

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In Mongolia, a backdoor to the Hermit Kingdom

(Ref: Global Post, 06 Dec, 2012) They come and they go without much international fanfare: delegations of North Korean ministers in Mongolia, invited by the pro-Western government to discuss trade, cultural ties and questions of ?mutual interest.?

Turmoil in Mongolia Batters Bonds

(Ref: WSJ, 05 Dec, 2012) Mongolia is flush with fresh cash from a massive international bond sale, but political turmoil in the capital is threatening to overshadow the achievement. News that a minority party in Mongolia?s parliament?s governing coalition could leave the government sent the bonds sharply lower on their first day of trading Wednesday.

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Mongolian Language Media News

Mongolian language media articles translated by EBM researchers

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Four mining companies operating mine in Selenge Province to be investigated by the ACA and SIO

(Ref: 24tsag.mn, 9 Dec, 2012) The Law Association for Mongolian Environment has turned to the Anti-Corruption Agency and the State Investigation Office to conduct investigations into Chamin Alt LLC, Selenge Mining LLC, Hunanjinlin LLC owning exploration and mining licenses in the territory of Selenge Province, and Kharanga Khuder LLC which is conducting iron ore exploration in the area of the Eruu River.

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The Law Association for the Mongolian Environment considers that the above companies had not submitted two-thirds of the mined gold to the state, and have breached the Law on Prohibition of Exploration and Mining Operations in the Areas of Water and Forest Reserve.

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The State Garuda title holder wrestler B.Gantogtokh, who serves as the Director of Chamin Alt LLC, was named and the company was apparently dissolved without paying damages of MNT 10.7 billion for having polluted the environment. Moreover the Chinese owners of the company have already returned back to their homeland.

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The General Investigation Office revealed two companies conducting uranium mine illegally in Dornod Province

(Ref: mongolnews.mn, 8 Dec, 2012) Yesterday, J.Batzandan MP stated at a press meeting that the General Investigations Office had revealed that two companies, namely Khonboo LLC and Shinshin LLC, had Chinese investors and were conducting uranium mining operation covered by lead and zinc mining operation in Dashbalbar soum of Dornod Province. There are totally 84 companies conducting uranium mining operations in Mongolia and most of them are foreign invested.

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He criticized the situation, stating that uranium should be produced strategically, but today it?s dominated by foreigners not the Mongolian state. ?Mongolia should change the policies in the uranium sector. It should be prohibited to utilize radioactive substances in future. We have founded an unofficial group in parliament to lobby for this? he stated.

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Moreover, N.Tegshbayar Chairman of the Nuclear Energy Agency who also attended the press meeting said ?All uranium exploration and mining licenses were issued by the Mineral Resource Authority before our organization was established. We will submit a proposal to parliament for changing the current policies early in the new year.? He added that the Nuclear Energy Agency is able to work in cooperation with unofficial groups of MPs, citizens, or NGOs.

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Mining & Investment

The Best Performers of 2012 in the Mining Sector of Mongolia Were Announced

(Ref: Info Mongolia, 10 Dec, 2012) For the consecutive third year, the Mongolian Mining Journal selected and announced the best performers in the mining sector of Mongolia, where the ceremony took place at the Blue Sky Tower, Ulaanbaatar on December 07, 2012.

Voyager Resources restarts flagship Mongolian copper project

(Ref: Steerguru, 06 Dec, 2012) Voyager Resources has restarted its Khul Morit copper project in Mongolia. The re commencement of exploration at the project is buoyed by assay results that demonstrate the strongest indication yet of the Khul Morit project?s suitability to host a copper porphyry system. The current drill program will focus on initial targets identified from an extensive audit that the company completed in recent months.

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Canada Should Draw Lessons from Mongolia?s Foreign Deal Confusion

(Ref: News.mn, 05 Dec, 2012) With two big foreign deals in the balance, Canada is now being advised by a Calgary think tank not to follow in the path of another resource-rich nation that?s recently scared off international investors: Mongolia.

Aspire Mining: study positions Ovoot as potential low cost coking coal producer

(Ref: Proactive Investor, 05 Dec, 2012) Aspire Mining (ASX: AKM) has completed a revised Pre-Feasibility Study that shows the Ovoot Coking Coal Project in Mongolia could become one of the lowest cost producers of coal into China. The PFS Revision is based on a large Open Pit mine delivering up to 14 million tonnes per annum and a small Underground mine delivering up to 0.75 Mtpa of raw coal over 20 years.

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Mongolian mine to affect water supply?

(Ref: UPI, 05 Dec, 2012) Mongolia?s nomadic herders are concerned about the future of already-limited water supplies due to Rio Tinto?s $6 billion Oyu Tolgoi, the world?s largest undeveloped copper-gold project in the South Gobi desert region. Oyu Tolgoi was 94 percent complete in July and is slated for commercial production in the first half of 2013. The Mongolian government holds a 34 percent stake in the project, expected to account for about 30 percent of Mongolia?s annual economic output.

New private owned airports are planned to be constructed in 9 centers of 6 aimags Mongolia

(Ref: Info Mongolia, 04 Dec, 2012) On November 29, 2012, the authorities of the Civil Aviation Authority of Mongolia have organized an on-line open discussion with affiliated organs regarding the current activities and further to implement on airport services and urgent issues necessary to accomplish.

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Petro Matad chief Douglas McGay retires

(Ref: News.mn, 03 Dec, 2012) Petro Matad (LON:MATD) announced that chief executive Douglas McGay is retiring with immediate effect on December 1. The company said that a new chief executive will be recruited once the exploration and work programmes have been finalised. In the meantime chief financial officer John Henriksen and exploration manager Dr Ridvan Karpuz will take over the management responsibilities in Mongolia.

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Politics & Security

Russia and Mongolia to Restore The Mutual Visa-free Travel Status

(Ref: Info Mongolia, 10 Dec, 2012) On December 06, 2012, foreign ministers and top officials from the OSCE participating States heard calls for further efforts to create a security community based on shared values at the opening of the 19^th OSCE Ministerial Council in Dublin, Ireland.

Mongolian Supreme Court commutes sentence of ex-president

(Ref: China Daily, 08 Dec, 2012) Mongolia?s Supreme Court on Friday commuted former President Nambar Enkhbayar?s four-year sentence to two and a half years. The supreme court found that Enkhbayar was guilty for the privatization of a hotel and a state-owned publishing house. But he was cleared of other charges.

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UN independent expert warns economic growth in Mongolia is not benefiting the poor

(Ref: UN News, 07 Dec, 2012) While the Mongolian economy has experienced continued growth, this has not benefited the country?s poor, a United Nations independent expert warned today, urging the Government to adopt poverty reduction strategies based on human rights approaches.

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New Ambassadors Were Approved Through The Parliament of Mongolia

(Ref: Info Mongolia, 07 Dec, 2012) On December 07, at the plenary session meeting of the State Great Khural (Parliament) of Mongolia, new resident Ambassadors Extraordinary and Plenipotentiary of Mongolia to the United States of America, to the Republic of Korea, to the Republic of Austria, to the Kingdom of Belgium and European Union, to the Republic of Turkey?

Mongolia finds China can be too close for comfort

(Ref: SCMP, 06 Dec, 2012) After years of testy debate, Mongolia broke ground this spring for a railroad that will haul coal across the pebbled Gobi desert to China, but with one costly condition. Citing national security, the government ordered the rails be laid 1,520mm apart, Mongolia?s standard gauge inherited from the Soviets. The width ensures that the rails cannot connect to China?s, which are 85mm closer together.

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Chinese premier pledges to strengthen cooperation with Kazakhstan, Mongolia

(Ref: Xinhua, 06 Dec, 2012) Chinese Premier Wen Jiabao on Wednesday pledged to strengthen cooperation with Kazakhstan and Mongolia during bilateral meetings with his counterparts. During a meeting with Kazakh Prime Minister Serik Akhmetov, Wen noted that China and Kazakhstan have worked closely in recent years in addressing various challenges such as the global financial crisis and have established a comprehensive strategic partnership.

Mongolia finds China can be too close for comfort

(Ref: Unuudur, 06 Dec, 2012) After years of testy debate, Mongolia broke ground this spring for a railroad that will haul coal across the pebbled Gobi desert to China, but with one costly condition. Citing national security, the government ordered the rails be laid 1,520 millimeters apart, Mongolia?s standard gauge inherited from the Soviets. The width ensures that the rails cannot connect to China?s, which are 85 millimeters (about 3 1/2 inches) closer together. So at the border, either the train undercarriages will need to be changed or the coal transferred to trucks, adding costs in delivering the fuel to Mongolia?s biggest customer.

Major Mongolian party to quit coalition government

(Ref: NZ Week, 05 Dec, 2012) The Mongolian People?s Revolutionary Party (MPRP) said here Tuesday that it had decided to pull out from the coalition government over alleged persecution of its chairman. MPRP Secretary G.Byambasuren said the party made the decision at a meeting held by its executive bureau Monday afternoon.

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Upcoming Events

Mongolia Investment Congress 2012 & Clean Coal Asia Summit 2012 (10-13 Dec)

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

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Coal Mongolia 2013 (21-22 Feb 2013)

It is the first conference where newly elected government will present its policy and direction on coal mining sector. The International Conference and Exhibition ?Coal Mongolia? has become the biggest coal conference in Mongolia and it has been a great opportunity to explore the Mongolian coal industry.

Venue: SS-Convention center, Ulaanbaatar, Mongolia

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Asia Mining Congress 2013 (12-15 Mar 2013)

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

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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.

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Source: http://www.ebmconsulting.com.hk/ebm-news/mongolia-business-focus-december-10th-2012-2/

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