Archives have name of poster & date at the top of each, and the date & time stamp at the bottom of each post. These are prior posts from the dates indicated. To search the posts for particular data or companies use control-F on PCs and command-F on Macs.
For current news posts, links to other Mongolia-related pages, and current author disclosures, please go to Mongolia Weekly Update.
Some changes at the top of this blog:
- Link to my list of articles about Mongolia http://bit.ly/HQmGZJ
- Link to a list of public companies (listed outside of Monglia) and investment fundshttp://bit.ly/Hk2BxO
- A link to a list of upcoming IPOs on all exchanges including the Mongolia Stock Exchange (need help filling this in; help is welcome) http://bit.ly/HQmI3O
- A link to a conference calendar (need help filling this in; help is welcome)http://bit.ly/Hk2yCe
- The list of free overviews at the top of this page now includes: the U.S. Embassy in Mongolia's Investment Climate report on Mongolia (http://bit.ly/HXzmMh ) (which is good and thorough read for those who want to assess the risks of investing in Mongolia critically)
- A link to Mongolia Growth's Group's external links page (http://bit.ly/Ho2Gh6) which then has hyperlinks to the most current reports from the World Bank in Mongolia and the National Statistics Office of Mongolia, among other links.
6 Apr, 02:35 PMReplyDelete CommentLike3
- Also added a link to the free The Mongolian Real Estate Report Executive Summary 2012 (dated October 21, 2011) http://bit.ly/HScvlt
The full report is $1,200 http://bit.ly/HLZ4Il
7 Apr, 08:40 AMReplyDelete CommentLike3
9 Apr, 08:42 PMReplyDelete CommentLike3
Could you repost the 3rd link after putting it through tinyurl.com ? It got broken.
Thanks for the geopolitical thinking. This week's weekly update about 2 hours away (its long...)
9 Apr, 08:59 PMReplyDelete CommentLike2
I'll try this link which has the same article.
9 Apr, 09:03 PMReplyDelete CommentLike1
Thanks, that's quite an article. I'm trying to figure out where this uranium is supposedly coming from. Most mines I know of are not actively producing at this time.
9 Apr, 10:28 PMReplyDelete CommentLike2
I get the sense that everybody's interest in Mongolian uranium deposits is of a preliminary nature. Maybe not all of it will be used for peaceful purposes. Perhaps an agreeable political solution can be eventually be found for using any exported Mongolian uranium ore for civilian purposes only. The Mongolian government seems to have excellent diplomatic skills so they may gain the necessary influence with other countries about this. Or perhaps the government will decide the uranium can only be used for internal economic development given the tense geopolitical circumstances.
9 Apr, 11:15 PMReplyDelete CommentLike2
April 9, 2012
Happy day/night to everyone. Thanks to Valley Boy and Schumpeter_1 for the compliments on the new links at the top of this page. Thanks to all those in Mongolia who have helped improve those resources.
On to the weekly update...
1a) My article (a bit clunky due to corrections after original publication that were done between 2 a.m. and 5 a.m.; with thanks to those who helped correct it in Mongolia) http://seekingalpha.co...
1b) TD Securities downgrades Ivanhoe: http://bit.ly/Ht3in0
1c) BMO downgrades Ivanhoe: http://bit.ly/HQFKXL
1d) (Brisbane Times) Canadian Miner Fuels Fears On Rio Project:http://bit.ly/Ht3in4
1e) (Australian) Rio Tinto Takes $450m Hit On Ivanhoe Mines http://bit.ly/Hp6fEt
1f) (News.mn) "Rio Tinto refused to comment on the report and the accuracy of its claims last night, prompting suspicions that the release of the report might be yet another chapter in the long, strained relationship between Rio and Ivanhoe executives." http://bit.ly/HvwFaM
1g) Business Daily: http://bit.ly/HjVeTN
1h) UBS said it does not expect the acquisition of SouthGobi (01878) by Chalco (02600) to be a turnaround event for Chalco, as the coal price remains weak and transportation bottleneck remains. http://bit.ly/IcZIvf
1i) (Frontier Securities) Mongolia Is Not Likely To Object To SouthGobi/Chalco Takeover http://bit.ly/HwM1EL
2) Seven other stocks to think about with copper-gold in the Gobi related to the fact that"Ivanhoe recently published a 513-page technical report into Oyu Tolgoi, which warned that ore grades would be less impressive than earlier thought, while the costs of mining and processing would be higher." Stocks to watch might be the junior copper-gold companies in the surrounding area getting walloped on this news and creating possible value: Kincora Copper (OTC:BZDLF) (KCC.V), Voyager Resources (OTC:VOYRF) (VOR.AX), Entrée Gold (NYSEMKT:EGI) (ETG.TO), Erdene Resource Development (OTCPK:ERDCF) (ERD.TO), and possibly Xanadu Mines (XAM.AX) which recently shifted its focus to coking coal and copper-gold. Also, Altan Rio & Undur Tolgoi (AMO & UTM are two separate companies in Canada - both very thinly traded, check Bloomberg to find).
3) Mongolia Growth Group (OTCPK:MNGGF)
3a) There's a recent news note on Mandal Insurance I'm still getting details on: Khan Bank and Mandal Insurance Sign First Ever Banker's Blanket Bond Policyhttp://bit.ly/Ht... (Khan Bank is among the four largest banks in Mongolia.)
3b) March 2012 newsletter. Company is cash flow positive. Four dates set for shareholder visits to Mongolia. Annual meeting is this Saturday. More:http://bit.ly/IcZIvl
8) Coking coal. "Importing coal from abroad is becoming cheaper than extracting it home. Our company has extracted coal for many years, now we are taking coal from a 2,000-meter depth. If we can tackle the transport matter, we want to import coal from Mongolia," ThyssenKrupp Steel Europe AG (OTCPK:TYEKF)http://bit.ly/HvwCvP
10) Deloitte Mongolia Tax Highlights 2012 (this resource added to the top under "Free overviews"): http://bit.ly/HTMSQ0
11) Railway progress? Maybe. An interview with J. Bat-Erdene, the State Secretary of the Ministry of Roads, Transportation, and Urban Development, and also the Chairman of the Mongolian Railway Board of Directors. "Before, there was the Ulaanbaatar Railroad, a company owned by both Mongolia and Russia… [then] Mongolian Railway was established [to be 100% Mongolian owned]… [now] the Base Structure of the National Railway will own the railroad that it builds. Before, the Mongolian Railway was responsible for building and transporting. But now, the Mongolian Railway has given the duty of building the railroad to the newly established the Base Structure of the National Railway." http://bit.ly/HvwCM5-
12) Mongolia Stock Exchange:
12a) Financial Minister signed new financial reporting standard and procedures (March 29, 2012). Looking for their availability in English. (In Mongolian:http://bit.ly/IcZKDq or http://bit.ly/HvwFaY) [SEE LAST ITEM IN THIS SERIES FOR FRONTIER SECURITIES DALE CHOI CONCULSIONS]
12b) 2011 Export and Tax date for mining companies operating in Mongolian (only available in Mongolian language; if you want the data for a specific company, send me a message and I'll work on it) http://bit.ly/IcZLHh
12c) Monet Capital rates Remicon a buy with a target of MNT246. Remicon is currently conducting a secondary public offering which is scheduled to price between 190 and 238 MNT per share. Last close = 182. Secondary offerings in Mongolia typically price higher than the current share price.
12d) Monet Capital rates APU a buy with a target of MNT 6,010. Last close = 4,250.
12e) Monet Capital rates Shivee Ovoo a sell with a target of MNT 5,680. Last close = 10,500.
12f) Khuhk Gan "as signed a long-term DRI supply contract with one of the China's largest steel producer." And "the Mongolian Parliament has issued a resolution that contained including Khukh Gan's DRI in the refined iron category which means there will be no value added tax or export tax on it." http://bit.ly/HvwCM7
12g) Dale Choi notes the number of brokerages in Mongolia is now 88, up from 49 in July 2011.
12h) (Dale Choi) Frontier Securities conclusions on the pending new securities law [all caps added by me for emphasis]: "Approval of Securities Market Law will be one of High level milestones in the development of MSE and Mongolian capital markets in general and that also include: Market education and performance of trained market participants; Performance of technology roll out and MSE organization; Performance of SGF and investor protection after move to T+3 and international risk management; Impact on corporate governance and transparency after development of new listing rules; [Erdenes Tavan Tolgoi] listing in 2012; Remote access for international brokers after introduction of membership rules; Approval of Securities Market Law Submitted to the Ministry of Justice on September 01, 2011; CUSTODY SERVICES AND ENABLEMENT OF SET-UP OF CUSTODIANS; Reduction of fees will make the market more attractive to international brokers, support the local brokers and help create increase liquidity; Successful target by MSE of state privatizations, New Domestics, Repatriations, New Licenses, Developing companies and Foreign Listings"
13) One article http://bit.ly/IcZLHi many stories
13a) B. Enebish, director of Erdenes Tavan Tolgoi (Big TT), represents Mongolia at Germany-Mongolia meetings
13b) MOU of cooperation between two countries
13c) Memorandum of implementation on water supply project between two countries
13d) "Mongolia's MCS holding company and the Petrovis LLC, and Germany's Lurgi AG have established a memorandum on supplying facilities for liquidizing coal based on fischer tropsch technology."
13e) "Mongolia's Tsetsens Mining and Energy LLC, and Germany's Lurgi AG, and GTLF1 have inked a cooperation contract on coal liquidizing equipment based on GTLF1 technology. A memorandum on supplying a technology for coal liquidizing industry has been signed by the MCS holding, the Petrovis companies and the Siemens AG."
13f) Mongolia and Germany "agreed to cooperate in refining upon a legal environment for geological exploration and mining sector, to realize a project on liquidizing coal, collaborate in the renewable energy sector, to reduce factors polluting environment (environment protection), and to establish the Mongolia-Germany joint academy of mining."
14) Jargalsaihan interviews Peter Brabeck-Letmathe, Chairman and former CEO of Nestle (30 minutes; English commences after 1 minute). Mr. Brabeck-Letmanthe also works with a Public Private Partnership called Water Resources Group. Interview includes: discussion of water issues (minute 1 to 11:15; and, 23:40 to 25:35), Nestle's world (11:15 to 16:25), animal husbandry in Mongolia (16:25 to 17:55), Peter Brabeck's career history from being an ice cream salesman to CEO & Chairman including time in Chile 1970 to 1980 (17:55 to 23:40), personal life & values (25:35 - end).
- Interview: http://bit.ly/IcZLHm
- Water Resources Group: http://bit.ly/HvwCM9
15) Wages. (NASDAQ:BBC) "the world's average salary is $1,480 (£928) a month, which is just less than $18,000 (£11,291) a year. But these dollars are not normal US dollars. The economists use specially adjusted exchange rates - the average salary is calculated in Purchasing Power Parity (NYSE:PPP) dollars. One PPP dollar is equal to $1 spent in the US. Essentially, the PPP dollar takes into account the fact that it is cheaper to live in some countries than others. The idea is that we don't care how many actual dollars somebody is paid in, say, China, but we care about what sort of stuff those dollars can buy." In these terms, Mongolians earn $415/month, ranking it 66th among 72 countries ranked.
- Article: http://bbc.in/HtpezR
- Interactive chart: http://bbc.in/IidJYj
16) Pro and con debate over MNT 70,000 (U.S. $54) monthly government handout to students. http://bit.ly/HvwCMf
17) Optimistic words: Experiencing Transformation Through Mining (UB Post). Select quotes. "Each job created in the mining sector creates another four jobs elsewhere in the economy" said Bernard Guarnera, President of the Behre Dolbear Group. "Infrastructural development becomes the second engine of growth. We have already announced large bids for new power plants. We have new projects in railway construction and social housing," said D.Zorigt, Minister of Mineral Resources and Energy. http://bit.ly/IcZLHx-
18) Words of caution:
18a) Where Does Responsible Mining Begin? (Mongolian Economy). Good article on the concerns about the places politics and mining mix. http://bit.ly/IcZKTV
18b) Jargalsaihan on The Ethics of Public Servants and how it relates to Mongolia (excerpt): "The state system of Mongolia is not people-centered, it is political party-centered. Therefore, thieves disguised under the names of "political party member" have been sneaking into the government, promising a better future and they have been stealing from public funds. The only thing they do is fortify the shield that protects them…. The biggest obstacle which is hindering Mongolia's future development and keeps people from improving their lives are the corrupt officials who steal public property and the political system that protects and encourages them. Mongolia has already got everything it needs for rapid development. We have democracy, freedom, independence, natural resources and finally money. The only thing we lack is a system that uses its resources for the sake of people."http://bit.ly/HvwCMl-
18c) Privately held Mongolian Minerals Corporation faces a hunger strike by local herders http://bit.ly/IcZKTY
18d) A Nation With Nothing To Lose (Mongolian Economy). Article spans from a nomadic herder that attended the Mongolia Economic Forum to the President Of Mongolia's speech at the forum (keeping in mind the President is part of the opposition Democrat Party and the election for President is in 2013, always one year after the parliamentary elections that decide the Prime Minister).http://bit.ly/HvwCMn
18e) David Stanway of Reuters makes his quarterly update on Key Political Risks To Watch In Mongolia http://bit.ly/IcZLag
18f) (Huffington Post) Last of the Nomads: How Mongolian Culture May Change Drastically Within a Generation (by Nine Wegner of the Vanishing Cultures project). [Ms. Wegner talks about "dzuds" (severe winters that cause loss of livestock) as if it were an anomalous event instead of mentioning this is something that occurs on average once every 8 years which is why it has a name. Et cetera.]http://huff.to/HvwFrm
18g) But the above HuffPo article will lead to a book in November to be titled, Mongolia: Nomads No More http://bit.ly/IcZLam
19a) Permission granted by cabinet to "Finance Minister, to sign a credit agreement to be established between Mongolia's Ministry of Finance and China's Export-Import Bank for a project on purchasing small tractors for agricultural works."http://bit.ly/HvwFro
19b) PetroChina's Request For More Land Raises Questions "April 6 (BCM NewsWire from Unuudur) PetroChina Daqing Tamsag LLC has requested from the government another 650-square kilometers of land for its oil extraction operations, meanwhile the firm has failed to meet the reclamation requirements imposed by the government... Hundreds of thousands of barrels of oil have passed through the Memengiin plains by truck, bringing great damage to the land. Examinations ... in September 2010 estimated damages to be worth MNT 1.3 trillion. ... The Petroleum Authority and heads of PetroChina agreed in June 2011 to increase the extent of its operations by annexing the 650-square kilometer Toson Uul XIX site. ... and there is word that the Ministry of Mineral Resources and Energy has already given its approval. .... The Petroleum Authority has handed PetroChina orders for reclamations for both 2010 and 2011, which have reportedly since been ignored by the company. ... Furthermore, PetroChina has failed to make good on its promise to build an oil refinery, instead sending its production to Hohhot in China for refining." [No link]
19c) China Consumer Prices Rise Faster-Than-Estimated 3.6%http://bloom.bg/IcZLau
19d) "China accelerated the opening of its capital markets by more than doubling the amount foreigners can invest in stocks, bonds and bank deposits as the government shifts its growth model to domestic consumption from exports."http://bloom.bg/HvwFrq
19e) Four Obvious Signs Of Asia's Rise Over The West by Sovereign Manhttp://bit.ly/IcZMeh
20) MUST READ on Vietnam/ Mongolia & a recommended author:
20a) MUST READ this note by Futures Asia on the Mongolia Vietnam ETF (NYSEARCA:VNM), as Van Eck has a single country Mongolia ETF approved by the SEC since May 2011 (but not launched yet), and this is a good start for considering the issues that will occur when Mongolia updates it regulations (in process now) and becomes more open to foreign investors, ETFs, and closed-end funds such as Van Eck and Mark Mobius http://seekingalpha.co...
20b) Additionally, if you are interested in investing in Vietnam, please follow Futures Asia (http://bit.ly/HvwFrr) on Seeking Alpha
21) ETF related note:
21a) Mongolia only ETF (not launched) makes list of 10 wackiest ETFs along the not yet launched Kazakhstan ETF and Pakistan ETF http://bit.ly/IcZLav
21b) The Mongolia ETF also gets its own separate article on its wackiness from the same author, "The new ETF will hold at least 80% of its assets in Mongolia-based firms or companies based outside the Asian country that get at least half their revenue from Mongolia." http://bit.ly/HvwD2F
22) Myanmar (NOT open for U.S. investors yet - U.S. investors banned by sanctions):
22a) Investment Opportunities In Myanmar (Bloomberg TV) http://bloom.bg/HEjeUh
22b) Suu Kyi Win Risks Myanmar Army Backlash Without Economic Gains. April 2, 2012. http://bloom.bg/HvwD2G
22c) The US Prepares To Open Up One Of The Most Exciting Untapped Energy Troves In The World http://read.bi/Hm23bk
22d) Myanmar: Countdown To Sanctions Being Lifted Begins (John Polomny)http://seekingalpha.co...
23) Bio of Piper Campbell, incoming U.S. Ambassador to Mongoliahttp://bit.ly/HvwFrw
24a) New trademark for Mongolian cashmere http://bit.ly/IcZO60
24b) 100,000 Mongolian cashmere goats being exported to Kyrgyz Republichttp://bit.ly/HvwFHM
25) Top websites in Mongolia (Alexa.com): 1. Facebook, 2. Google.mn, 3. YouTube, 4. Yahoo!, 5. Google.com, 6. GoGo, 7. zaluu.com, 8. news.mn, 9. caak.mn, 10. blogspot.com, 11. unegui.mn, 12. XoroM.mn, 13. Olloo.mn, 14. Babylon, 15. setge.mn, 16. Wikipedia, 17. biznetwork.mn, 18. shuud.mn, 19. miniih.com, 20. Y8, 21. Twitter, 22. Bolor Dictionary, 23. zindaa.mn, 24. factnews.mn, 25. now.mn http://bit.ly/IcZMet
26) For some peace, here's 22 photos of "Mongolia: The least densely populated country on the planet" http://bit.ly/HvwD2P
9 Apr, 10:40 PMReplyDelete CommentLike5
YouTube has some great videos of Mongolia's wide open spaces. Watching them is another quick way of obtaining some mental relaxation, especially on the full screen.
10 Apr, 12:21 AMReplyDelete CommentLike2
I reviewed the Deloitte Mongolia Tax Highlights 2012 further and think three things may be missing: (1) does not include exit tax (20% on gains on principal brought into country); (2) does not include MNT 3 billion break point on income taxes (goes from 10% to 25%); (3) does not explicitly include that some foreigners may be subject to double taxation. This is now noted at the top where it is still linked as a "free overview" item.
Baganuur was added to my Mongolia Stock Exchange holdings today. Current MSE holdings are APU [APU], Baganuur [BAN], Remicon [RMC], Sharyn Gol [SHG], Shivee Ovoo [SHV], and Tavan Tolgoi [TTL].
Archives 4 of the news updates, February 12 to April 3, 2012 is here:http://bit.ly/IfPa2M (this means those comments are getting deleted from this blog)
10 Apr, 11:05 AMReplyDelete CommentLike3
Please see my new blog on Former Prime Minister and President Enkhbayar's arrest this morning: http://bit.ly/IDucZA
I am leaving for a 10 hour drive to Toronto now. I felt investors should know about this before leaving for a busy weekend. I have set up a separate blog about this news item as it is a big enough piece of news that thoughts and follow up on it should be segregated. Thank you.
13 Apr, 10:16 AMReplyDelete CommentLike3
April 16, 2012
Brief note to be focused. Full update tomorrow.
Two key things that have happened in the last four days:
1) Former Prime Minister and President Enkhbayar's arrest Friday.
My blog of news on this arrest (same link as above): http://bit.ly/IDucZA
2) The Mineral Resource Authority of Mongolia [MRAM] has suspended SouthGobi Resources (OTC:SGQRF) mining license for Ovoot Tolgoi in the early stages of the government blocking Ivanhoe Mines (IVN) sale of its 57.6% stake in SouthGobi to CHALCO (ACH).
There is a lot of other news, and I will post it tomorrow. These two news events are significant and are still being digested by the global media. Bloomberg TV Mongolia launched today, so there is now an additional platform with which this news may travel.
Today I published an article covering some of these topics, along with Ivanhoe (IVN)'s recent share price action, and significant coverage of Kincora (OTC:BZDLF) and Voyager (OTC:VOYRF). http://tinyurl.com/87s...
I will have another post tomorrow.
Major point of the day. Through the elections, and perhaps a bit after for the post-election reactions, investing in Mongolia related listings is going to be bumpy. The long-term bullish economic boom story is intact and unchanged. In the near-term, one should be watching for price movements that create buying opportunities and invest with a level of caution.
See you back here tomorrow with a full round-up of all the other news.
16 Apr, 10:41 PMReplyDelete CommentLike4
Here is my new article SouthGobi/Chalco/Ivanhoe Deal Possibly Blocked: Is Mongolia's Investment Climate Ready For The Global Stage?
17 Apr, 02:49 AMReplyDelete CommentLike3
April 17, 2012
Greetings and welcome to this delayed weekly update. Congratulations to Bloomberg TV Mongolia on its successful launch (http://bit.ly/HGFDNT)!
1) SouthGobi Resources (OTC:SGQRF) (SGQ.TO), one other item not covered above:
Deloitte resigned as the company's auditor. SouthGobi has hired PriceWaterhourseCoopers to replace them. PWC is the most respected auditing house in Mongolia at this time. http://reut.rs/HGFFFo
2) Mongolia Growth Group (OTCPK:MNGGF)
2a) Capitalist Exploits interview with CEO Harris Kupperman http://bit.ly/HGFDO3
2b) Interview with CEO Harris Kupperman by Robert Hallberghttp://tinyurl.com/7nh... (Mr. Kupperman indicates Mongolia Growth Group is considering a listing on the Mongolia Stock Exchange in this interview)
2c) I was at the company's annual meeting on April 14, 2012. It will take me a while to get around to writing about it due to recent events in Mongolia. Short version: Overall, things are as the company says in its monthly newsletters. The company's weighting has shifted more in favor of property business at this time (i.e. the property business is growing whereas the insurance business will take longer to develop as insurance is relatively new in Mongolia). As discussed in MGG's monthly letter, the company is shifting toward doing some property development work (will self-execute on smaller projects and partner on larger ones).
3) Mongolian Mining Corporation (OTCPK:MOGLF) (0975.HK)
3a) April 17: "Monet Capital initiates coverage on Mongolian Mining Corporation with a BUY rating at a target price of HKD9.72, representing a 50% upside potential to today's price." (no link)
3b) April 10, 2012 /PRNewswire-Asia/ -- Mongolian Mining Corporation ("MMC", or together with its subsidiaries, the "Group"; HKEx: 975), is pleased to announce that Energy Resources LLC, an indirect wholly-owned subsidiary of the Group, entered into a long-term cooperation agreement with China Datang Overseas Investment Co., Ltd ("Datang") to supply middling for a period of 10 years commencing 9 April 2012. Middling, the high calorific value thermal coal produced as a secondary product from the processing of coking coal, is suitable for coal-fired power plant boilers operations. Pursuant to the agreement, the quantity of middling to be supplied will be between 500,000 and 2,000,000 tonnes annually, depending on the availability of the product. The product price will be set based on market price, and will be subject to periodic review."
3c) Mongol Mining (975) inks power supply deal with major holderhttp://bit.ly/HOAPtK
3e) Connected and continuing transaction (company release on parent company MCS reorganization and effects on shareholding of Mongolian Mining Corporation)http://bit.ly/HGFFFp
4) Kincora Copper (OTC:BZDLF) (KCC.V)
4a) Very good interview with CEO Igor Kovarsky I missed from March 23, 2012http://bit.ly/HOAPtM
4b) Kincora Copper has what it takes for a strong re-rating - Ocean Equitieshttp://bit.ly/HGFE4l
5) Meritus Minerals (OTC:MERMF) (MER.V) updates status of mining licenses (they're okay, just being reviewed). Shares dropped to $.025 last week before recovering back to their usual $.05. The deposit they have may have issues with Mongolia's law regarding forests and rivers, but that is yet to be determined. Early stage and speculative. http://bit.ly/HOATcN
6) Khan Resources (OTC:KHRIF) (KRI.TO)
6a) Khan is planning to raise CAD$2.312 million in a private placement that is expected to close April 18 (announced April 16) at 17 cents per share. These funds will be used for their ongoing legal case against ARMZ (in Canada) and against the Mongolian gov't (in a U.N. tribunal) http://mwne.ws/HGFE4o
6b) Delisted from TSX and tentatively listing on the CSNX http://bit.ly/HOATcP
7) Draig Resources (DRG.AX), audio interview with Managing Director Mark Earley about positive drill results and accompanying release (scroll down linked page)http://bit.ly/HGFE4q
8) Haranga (HAR.AX).
8a) April corporate presentation http://bit.ly/HOATcV
8b) Foster Stockbroking initiates coverage with a buy rating and targets of A$.90 (no link; almost double current share price)
8c) Research report dated April 12, 2012 available here http://bit.ly/ydwJ6J
10) Kumai Energy (coal) IPO brochure (this will be an ASX listing led by CPS, planned for April or May): http://bit.ly/HGFE4w
11) Debt markets and credit ratings
11a) Golomt Bank road-showing their bonds. http://bit.ly/HOATd1
11b) S&P Rates Golomt Bank's Senior Notes 'B+' http://reut.rs/HGFEkM
11c) Mongolia's XacBank shelves debut USD deal, "The enthusiasm that investors showed for two global bond deals from resource-rich Mongolia earlier this year failed to spill over to the banking sector last week, causing private lender XacBank to shelve its debut dollar deal." This was attribute to bad pricing of the debt.
12) Mongolia Stock Exchange:
12a) Proposed new securities law explained [when this law passes, the market will be in line to take off, ready or not] http://bit.ly/HOAPK6
12b) The number of licensed underwriting companies is up to 24. This is greater than the number of IPO and secondary offerings planned for this year and that took place last year combined. (no link)
13) Tugrik (local currency, the MNT). Two sides to every argument:
13a) Mongol Bank says, Wrong speculation led to increase in value of MNT
13b) Eurasia Capital notes it hit their 2012 exchange target (for appreciation of the currency). Detailed yet short article. The currency has lost a little ground due to recent events, but not that much. http://bit.ly/HGFFFx
14) Coal liquification, gasification, coal to liquids:
14a) ThyssenKrupp Uhde (OTCPK:TYEKF) and the Mongolian government reach agreement on coal-to-liquids plant and heat recovery coke making plant in Mongolia
http://tinyurl.com/7z2... & http://bit.ly/HGFEkN
14b) Coal gasification plant to be built from Mongolia and Germany's diplomatic partnership http://bit.ly/HGFEkR-
14c) Plant discussed for Mongolia. Cougar Energy of Autralia not mentioned in article. Energy Resources (OTCPK:MOGLF) and parent conglomerate MCS mentioned, along with several other Mongolian companies. [If there's anyone reading this, I know someone at another company in Mongolia that really knows well what is necessary for these various coal processes to be cost-effective and what companies can execute.] http://bit.ly/HOAPKd
15) Two-part interview with "Mogi" Munkhdul Badral of CPS International. I have an account with Mogi (see above) primarily to trade securities in Australia at this time. (CPS is involved with Hunnu Coal, Voyager Resources, Haranga Resources, Eumeralla Resources, Wolf Petroleum, Robe, and Kumai Energy in Mongolia.) Interview by Capitalist Exploits.
15a) Part 1 http://bit.ly/HGFEkV
15b) Part 2 http://bit.ly/HGFEkX
16) 4 ½ minute video interview with Harvey Sawikin of Firebird Funds, first half about Mongolia http://buswk.co/HGFEkZ
17) Editorial comment worth reading. Terrence Edwards weighs in on the government handouts in a piece titled "Promises Best Left Broken"http://bit.ly/HOATto
18) "The Mongolian government should review and re-direct government expenditure to critical areas such as transport, energy, water, education and health care to ensure sustainable economic growth, an expert of the Asian Development Bank (ADB) said here Wednesday… The report also noted Mongolia's economy was developing rapidly, but fiscal policy must balance the need for macroeconomic stability and support for long-term economic growth that benefits all Mongolians."http://bit.ly/HGFFVT
19) Iron ore. A new ferrous metallurgy to be built in Darkhan could fully supply domestic iron demand http://bit.ly/HGFEl2-
20) Mongol Bank Statistical Bulletin March 2012. Headers are in Mongolia, but numbers are numbers. http://bit.ly/HOATtq
21) Mongolia's population will reach 3 million people in 2017 according to the National Statistics Office. Current numbers are 2.8 million people.
22) National Statistics Office report for the 1st quarter of 2012 http://bit.ly/HOAQ0x
23) Asian Network for Free Elections with a report on Mongolia's electoral history.http://bit.ly/HGFEl4
24a) World Bank Quarterly China Report (includes a clear and calm 3 minute video worth watching). A soft landing is expected by the World Bank. http://bit.ly/HOAQ0z
24b) Expecting A Steel Producer Rally In The Second Half Of 2012 by Seeking Alpha contributor Elliott Gue http://tinyurl.com/d4x...
24c) Widens Yuan Trading Band http://bloom.bg/HIjcKI
24d) China Widening Yuan Band Shows Confidence in Economy
24e) China Unexpectedly Reports Trade Surplus (Bloomberg)http://bloom.bg/HGFEBm
24f) World Bank Cuts China 2012 Growth Outlook On Exports (Bloomberg). Great headline, then the reality comes as shown above already: "The Washington-based lender cut its estimate for China's expansion this year to 8.2 percent in a report released today in Beijing from a January projection of 8.4 percent."http://bloom.bg/HCJFt7
24g) IMF Said Ready to Cut China Current-Account Surplus Forecast
24h) "China's aluminum demand will grow 8 to 10 percent annually on average for the next five years" http://bloom.bg/HOAQ0B
25) I will continue to update news related to the arrest of former Prime Minister and President Enkhbayar separately on a blog dedicated to news about this eventhttp://tinyurl.com/7yb...
26) Capitalist Exploits is organizing a trip to Mongolia in late July. Contact them here for details: http://bit.ly/HGFEBn Please let them know I sent you, maybe they'll bake me a cake I can exploit if I send enough people their way.
17 Apr, 11:33 PMReplyDelete CommentLike4
Elections are June 25, 2012.
17 Apr, 11:57 PMReplyDelete CommentLike2
Ivanhoe Mines (IVN) CEO Robert Friedland has resigned as Rio Tinto (RIO) takes over many senior executive positions at the company. RIO controls IVN now. Rights offering for IVN shareholders forthcoming.
Financial Post (Peter Koven): http://natpo.st/J9XgJS
Times Colonist (Victoria & Vancouver): http://bit.ly/J9Wdtm
4Traders (press release): http://bit.ly/J9Wdtw
DowJones NewsWire: http://fxn.ws/J9Wf4r
18 Apr, 10:32 AMReplyDelete CommentLike3
A thousand thanks, Jon. Really.
I am a frequent commenter on SA, and I try to contribute where I can - but I find myself a very silent "user" on these Mongolia articles, as I am ignorant (and unwilling to waste people's time contributing ignorant comments lacking any value for others).
Still, with apologies to all for my lacking the ability to push forward the many important topics contained here, I must acknowledge the magnificent effort which I know goes into each of your fact-heavy creations.
24 Apr, 10:17 AMReplyDelete CommentLike4
Thanks TB. Much appreciated.
24 Apr, 10:22 AMReplyDelete CommentLike3
Eh, what TB said! Me too.
24 Apr, 11:11 AMReplyDelete CommentLike3
April 23, 2012
Congratulations this week to Asia Pacific Investment Partners on a successful round of pre-IPO fund raising toward their planned IPO for next year. (http://tinyurl.com/8xk...). Added to the recommended list at the top this week is Leopard Capital's Emerging Frontiers Blog (http://bit.ly/I6LUaw).
Posting #1 separately from the rest, because its long. A reminder that I am updating the news on the arrest of Former Prime Minister and President Enkhbayar separately here: http://tinyurl.com/7yb...
Here's your long #1 followed by the rest.
1a) (from the UB Post) Several MPs mentioned at a press conference that the Research Center at the Office of the Parliament studied the Oyu Tolgoi (OT) contract and drew a conclusion that Mongolia won't make profit from this contract. Could you please give more information about that? (read the answer to the last question in the linked interview here) http://bit.ly/K4cNGe-
1c) "Mining giant Rio Tinto faced a protest today from a broad coalition of unions, social and environmental groups from as far afield as Mongolia over its role as a key sponsor and sole provider of gold, silver and bronze for the 2012 Olympic medals… protesters complained that Rio Tinto's social and environmental record was "tarnishing" what Lord Coe has claimed will be the greenest and most sustainable Olympics ever." http://bit.ly/K4cLOs
1d) Oyu Tolgoi raises environmental fears http://bit.ly/I6LUaB
1e) Rio backs Oyu Tolgoi project http://bit.ly/K4cLOt
1f) Friedland steps down from Ivanhoe in Rio Tinto's $6-billion financing planhttp://bit.ly/I6LSPQ
1g) Ivanhoe CEO Loses in Rio 'Chess Game' Over Mongolia Mine (long Bloomberg story) (actually, I think he's quite fine; but Ivanhoe shareholders have missed out on any takeover premium) http://bloom.bg/K4cNGm
1h) Rio Tinto Executive: No Interest In Ivanhoe Assets Other Than Oyu Tolgoihttp://fxn.ws/I6LSPR
1i) SouthGobi Plunges On Threat To License (FT's Leslie Hook, subscription)http://on.ft.com/K4cLOv
1j) Double Whammy For SouthGobi Shares (WSJ) http://on.wsj.com/I6LSPT
1k) Parliament To Discuss SouthGobi (New.mn April 18) http://bit.ly/K4cLOz
1m) Ivanhoe shares tumble to new low on Mongolia woes http://buswk.co/I6LSPV
1n) April 17 New.mn article about possible amendments to Mineral Laws to alter the trajectory of the SouthGobi deal and note on the licenses of SouthGobi being suspended in the interim. http://bit.ly/K4cNWB
1o) Mongolia suspends SouthGobi licences (Peter Koven) http://natpo.st/IVcuhY
1p) SouthGobi shares dive on fears Mongolia may derail Chalco bid (Reuters)http://reut.rs/K4cLOD
1q) Rio moves closer to owning Mongolia copper, gold mine http://reut.rs/I6LUqX
23 Apr, 11:25 PMReplyDelete CommentLike3
April 23, 2012 (continued)
2) Prophecy Coal (OTCPK:PRPCF)
2a) article Prophecy Coal Founder and Director Greg Hall Discusses Chandgana Power Plant on Midas Letter Money http://reut.rs/I6M41u
2b) Related video (6 minutes) http://bit.ly/K4cR8Z (clarification, they have "guided" that they will have a power purchase agreement with the Mongolian government by Q2 2012, but they do not yet have it in place)
6) Mongolia Growth Group (OTCPK:MNGGF) will host a corporate update presentation and reception for shareholders and interested investors on May 2nd, 2012 at The Sheraton Los Angeles Downtown Hotel, from 2:30-4:30PM. If you would like to attend this presentation, please contact Genevieve Walkden at GWalkden@MongoliaGrowt...
7) Mongolia is on the list of top ten countries for growth from 2010 to 2050. Find out the other 9 and guess which one I should go to next by visiting the list here: http://bit.ly/K4cR91
8) Wide ranging interview with the Chairwoman of Petrovis (oil company), from Oyu Tolgoi to coal to liquids and much more http://bit.ly/I6M2a8-
9) Jonathan Manthorpe's Miners' motherlode Mongolia faces instability ahead of June elections http://bit.ly/I56ibT
10) The Bank of Mongolia increases Monetary Policy Rate in order to stave off inflation "The Board of Directors of the Bank of Mongolia have made a decision to increase the policy rate by 0.5 % to 13.25, with reserves required from one percent to 12 percent, from April 17th 2012." http://bit.ly/I6M41F
11) Ninja miners satisfy gold lust (decent profile of some of the mining and exporting of Mongolia's resources that is off the books) http://bit.ly/K4cR95
12) Mining Mania by Jargalsaikhan, "This level of implementation of our government's mining management policy altogether with the fact that few ones who ignore the negative environmental outcomes of mining are getting rich while the rest is not benefitting from their natural resources have created a mining phobia among people. It is time that government pursued a general policy for mining development besides looking after every single project. We have to learn from the initiatives and examples of the governments of Canada and Australia on responsible mining, green mining and social responsibilities of a company and improve the laws regarding mining." http://bit.ly/I6M2qs
13) Mongolia Stock Exchange
13a) New Securities Law will clear the way for IPOs http://bit.ly/K4cU4t-
13b) Mongolia Starts Share Sale Process for State-Owned Coal Company (Bloomberg) (oddly, this is about Baganuur which only trades on the MSE)http://bloom.bg/I6M2qv
13c) FMG launches Mongolia fund "The FMG Mongolia fund, which has a minimum investment of $10,000 (£6,270), will target the top 25 most-liquid companies on the Mongolian Stock Exchange." http://bit.ly/K4cU4z
14) Central Bank of Mongolia
14a) reports available in English can be downloaded here: http://bit.ly/I6M41x
14b) Dale Choi of Frontier Securities notes on the report from 2012 . 04 . 23 (April 23, 2012) that "Main indicators: Current account deficit increased 1.5 times yoy or by 229M USD to 701M USD, mainly influenced by; (i) goods foreign trade account deficit increased 1.9 times yoy to 382M USD; (ii) services trade account deficit increased 1.5 times yoy to 327M USD. Capital and financial account surplus increased 2.1 times yoy or by 612M USD to of 1.15B USD. Although FDI declined 41% yoy or by 435M USD, in connection with issuance of bonds by Development Bank of Mongolia surplus of portfolio investment account reached 577M USD which influenced increase of surplus of capital and financial account.Although Bank of Mongolia supplied 245M USD worth of USD and RMB to FX market and banks transferred outside of Mongolia through Bank of Mongolia net of 221M USD, because of Development Bank bonds, official foreign exchange reserves increased by 359M USD YTD to 2.63B USD."
15) Lottery update from MonVest http://on.mktw.net/K4cTxG
16a) Coal Seen Rebounding as China Sets Steel Output Record (Bloomberg)http://bloom.bg/I6M41N
16b) Politics Of The Economically Possible In China (EconIntersect; analysis of the World's Banks's report on China outlook for 2030)
16c) China's Problematic Coal Plan (The Diplomat) http://bit.ly/I6M2qC
16d) China Manufacturing Contraction May Spur More Easing (Bloomberg)http://bloom.bg/K4cTxH
16e) China Home Prices Fall in More Than Half Cities Tracked (Bloomberg)http://bloom.bg/I6M4i4
16f) China May Cut Ratio Without Altering Monetary Stance (Bloomberg)http://bloom.bg/K4cTNY
16g) Ethnic Mongolians in China concerned about cultural threat (CNN - 5 minute video) http://bit.ly/I6M2qG
17) Debate over how much of a hero a Mongolian man is that handled another passenger who went after the flight crew on a Cathay Pacific flight
17a) South China Morning Post http://bit.ly/K4cU4H
17b) UB Post http://bit.ly/I6M4i9
18) If you want to connect with me on Linked In, feel free to do sohttp://linkd.in/J5WWN3
23 Apr, 11:27 PMReplyDelete CommentLike3
Some addendums to this week:
19) Billionaire Rinehart Seeks More Royalties From Rio Tinto (Bloomberg) (Asia's richest woman wants 12 years of back royalties from Rio Tinto on a couple of mines) http://bloom.bg/Ie224m (Thanks to Mercy Jimenez for the link)
20) Dale Choi from Frontier Securities came out with a note last night on the Winsway (1733.HK)/ Chalco (ACH) deal relevant to the SouthGobi/Chalco deal headlined: Winsway's Mongolian Transportation Operations Could Be Subject To Proposed Controls On Foreign Investment Into Enterprises With Strategic Significance To Ensure National Security. [I haven't talked about the strategic deposits laws much since my article on uranium; do a CNTRL-F search for the word "strategic" in the article for the info http://tinyurl.com/bnq.... It would be a major stretch to block Chalco from taking a minority stake in Winsway, however pre-election politics could create noise about doing so.] Quotes of relevance:
20a) On April 18,2012 MP, Minister of Foreign Affairs of Mongolia G.Zandanshatar has said "Bills on implementing foreign investment in enterprises with strategic significance to ensure national security and amendment to law on state registration of legal entities will be hopefully approved this week. The taskforce is working speedily."
20b) (same minister) "It is fully possible to stop Southgobi/Chalco deal. Parliament has full possibility to approve the bill. Because Parliament already approved whether to discuss the bill. For second reading it is only necessary two weeks.In another words, it is possible to approve this law within two weeks."
20c) Road and transportation is mentioned among strategically significant sectors of the economy for which lawmakers MP-s G.Zandanshatar, N.Batbayar, Ts.Bayarsaikhan, S.Byambatsogt, D.Terbishdagva and U.Enkhtuvshin proposed controls on foreign investment in their bill on procedures to implement foreign investment into enterprises with strategic significance to ensure national security, which they have submitted to Parliament Speaker on October 16, 2009.
21) Mongolians marked the 50th anniversary of S. Zorig on April 20th. Mr. Zorig was a hero of the democracy movement in the 1990s. He was assassinated in 1998 and his murder remains unsolved. The eponymous Zorig Foundation works against corruption and for the good of Mongolia. His sister, Ms. Oyun is a leader of the Civil Will Green Party (2 seats in parliament; the other is Mr. Enkhabat) and a voice frequently quoted by the western media.http://bit.ly/JDCvGc
22) There is a lot about the laws on foreign investment being amended (blocking the SouthGobi/Chalco deal, etc) at the same time as there is a lot about the Financial Regulations changing for the Mongolia Stock Exchange. The first will discourage foreign investors, the second will encourage foreign investors.
With elections coming up at the end of June; until laws are actually passed, I will not link every single article and comment about it.
24 Apr, 10:47 AMReplyDelete CommentLike2
Here's another way of looking at the Big Picture:
Mongolia's position on the New Silk Road.
24 Apr, 12:52 PMReplyDelete CommentLike2
Thanks VB. Those maps are good for seeing Mongolia's infrastructure challenges (5% of roads paved; limited rail links out which are overburdened already; every route out is through China or Russia; etc.). This is why post-election, one of the ministries I'm watching most closely is who winds up getting the Ministry of Transportation, etc. Mongolia cannot afford to have someone running the Ministry of Transportation who profits from the trucking business or prospective industrial centers that will take years to bring on line. Infrastructure takes years to develop and they are behind as it is.
24 Apr, 01:11 PMReplyDelete CommentLike2
New article on Myanmar.
25 Apr, 07:12 AMReplyDelete CommentLike2
Thank you StillDazed.
There was also this one http://bit.ly/JppwVk
25 Apr, 07:44 AMReplyDelete CommentLike3
It would be interesting to see what trading develops between Mongolia and Myanmar as the years go by. As Mongolians become wealthier they probably would be interested in purchasing Burmese rice and specialty woods.
25 Apr, 12:53 PMReplyDelete CommentLike2
25 Apr, 12:58 PMReplyDelete CommentLike2
I apologize that the weekly update will be delayed until tomorrow. I have most of it saved in a Word document on my computer that I spilled water on about an hour ago - I'll find out tomorrow if I need to redo it or not.
In the meantime, you can check the news for yourself by checking out the new link to Mongolia News Sources: http://bit.ly/JnsPyC
30 Apr, 05:18 PMReplyDelete CommentLike3
Going to have to catch up the update this weekend.
Some things of note going on:
- Some members of the ruling MPP have left the MPP for Mr. Enkhbayar's MPRP. 3 so far. The volume of nationalism & populism in the run up to the election will be increased with the MPRP's increasing size.
- Mr. Enkhbayar has been jailed for more than 10 days now. He was supposed to be released after 10 days according to original reports on the arrest.
- May 20th is the deadline for citizens of Mongolia to cash in their pre-IPO shares of Erdenes Tavan Tolgoi (Big TT). [this process is offensive to me; the gov't is offering a cash pay-off for votes now while stealing people's IPO shares for a song and re-packaging them to the wealthy; this will put inflation into the system via the cash payout which will hurt the people who take the cash; and this will widen the wealth gap by consolidating the IPO shares with those already wealthy who snap them up]
- Big TT's IPO is now pushed back to early 2013. It continues to slide back as issues in the government's machinations cause further delays.
- More reports in the international press about Mr. Enkhbayar's arrest. This one from Xinhua says an "opposition coalition" of the DP and MPRP is blaming President Elbegdorj among others. http://bit.ly/IG0Zjx This doesn't quite make sense since President Elbegdorj is a DP member thought the seat of President is "party neutral." One other interesting thing in this article and others is that no one at the top seems to be accepting accountability for ordering Mr. Enkhbayar's arrest.
- Mr. Enkhbayar was arrested without his shoes on. Shoes are culturally important in Mongolia. They are supposed to be the first part of you that enters the room and people will shine the tips of their shoes so that the best part of them enters the room first. People who do not even like or support Mr. Enkhbayar were upset that he was arrested without his shoes on.
- This is the long version of Mr. Enkhbayar's arrest. 23 minutes with subtitleshttp://bit.ly/IXDtZP
- I'll be away for about the next 28 hours.
3 May, 06:16 AMReplyDelete CommentLike4
Jon this is my first trip to your blog on Mongolia. Quite impressive would be an understatement. I am adding it to one of the places I need to check in on. Sorry I am so late getting here.
4 May, 11:04 AMReplyDelete CommentLike5
Thanks DG. Appreciate that. Let me know if you need some briefer thoughts.
Its a very touchy time right now leading up to the elections, and hopefully an opportune one. I just saw this morning there's a proposed law to lower the bar on strategic mining deposits to anything valued at $75 million or more - though locals don't seem to think it will pass. (This is because Chinese company Chalco has an offer on the books for a majority stake in SouthGobi.). The laws governing "strategic deposits" (of which there are currently 15 in the whole country) are pretty broad, though not always exercised. There's different demarcation points for the government taking a 34% or 51% stake in strategic deposits (and then a whole set of separate issues with uranium).
The point being I expect a wave of stories about Mongolia threatening to nationalize the mining industry in the international press in a bit. If the Mongolian parliaments leave the proposed law pending without passing it or shooting it down for a few weeks (likely; more time to gyrate it in the local press then), then this could hit the international press in a bigger way in a week or two weeks, as the international media is slow to catch up to stuff going on in Mongolia.
*If*, as I expect, things in Mongolia revert to the trajectory of the last few years post-election (laissez-fair policies encouraged by most people in the parliament being business people too), then there should be some good buy opportunities in the next few months.
Thanks again; and hope the shoulder and arms are feeling better.
4 May, 11:32 AMReplyDelete CommentLike3
Jon: Will you be attending the Capitalist Exploits "investor summit" July 25-29 in UB? Joe Harned
5 May, 12:39 PMReplyDelete CommentLike2
No, I am not. My ability to travel is very limited between now and late August. I am busy with relocating, etc. I also have a wedding to attend the weekend of the Cap-Ex trip.
I would remind readers who are holders - or potential investors - of Mongolia Growth Group that they "are setting up 4 investor trips (May 12-15, June 9-12, July 14-17, August 11-14)." http://bit.ly/IcZIvl
I don't know of any other companies organizing trips in the distant future currently, though Frontier Securities is organizing an Energy Sector Tour May 13 to 17.
I am tentatively planning to go back to Mongolia in September in conjunction with the Discover Mongolia conference.
6 May, 12:17 PMReplyDelete CommentLike5
May 8, 2012
Here's a new link at top to a list of news sources you can follow from which I get most of the news in these updates: http://tinyurl.com/7lt... I am trying to winnow how much I cover in these news updates. I have to reduce the time I spent on these updates. If you want more than I provide, use this link http://tinyurl.com/7lt....
On to the update:
1st) If you're reading this, please click this video to support democracy and transparency in Mongolia http://bit.ly/IDvS5U . I do not endorse the content of the video or the position of the politicians involved. However, this is an important event in the country's democracy and we should care, and show that we do.
2nd) The Business Council Of Mongolia has provided analysis of the newly proposed Foreign Investment Laws by law firms Allen Arthur Robinson and Minter Ellison.
2a) Potential Impact on the Draft Law on Regulation of Foreign Investment in a Business Entity of Strategic Importance 2012 http://bit.ly/KChEFg
(this briefing is also available in Mongolian http://bit.ly/JtlETi)
2b) Comparison of Mongolian legislation with Australian Foreign investments ruleshttp://bit.ly/JtlH1F
2c) Legal Issues - Annex 2 http://bit.ly/KChEVw
2d) Mongolian investment law table - Annex 3 http://bit.ly/JtlETm
3) Ivanhoe/Rio/SouthGobi/... drama continues:
3a) The most sensationalist headline of the week award goes to Frik Els with, "Report: Mongolia going the way of Zimbabwe with mandatory state control of foreign miners" http://bit.ly/JtlH1J
3b) Enkhbayar delivered to prosecutors office: http://bit.ly/KChEVE
3c) Reuters cites Mr. Enkhbayar's lawyer as saying his arrest is about getting him out of the elections http://reut.rs/KChEVG
3d) The Wall Street Journal cites "Mark C. Minton, who served as U.S. ambassador to Mongolia from 2006 to 2009, said the treatment of Mr. Enkhbayar is "not only an image problem. That's a problem for the credibility of the rule of law in Mongolia.""http://on.wsj.com/KChGgi
3e) The Wall Street Journal also thinks there is something amiss in Mongoliahttp://on.wsj.com/JtlETq
3f) There are reports that Mr. Enkhbayar began a hunger strike this past Friday and is in deteriorating health http://bit.ly/KChGgl
3g) Prime Minister S.Batbold [in a parliamentary hearing about Mr. Nyamdorj, head of the Ministry of Justice] replied: "Legislative organizations investigated and concluded that Ts.Nyamdorj didn't break the law, and the arrest operation of N.Enkhbayar was in compliance with the law. Any issue is decided by the majority votes. MPs pursued the principle." http://bit.ly/KChFc1
3h) The FT, Corruption Case Looms Over Mongolia: http://on.ft.com/KChFc5
3i) Complicating Understandings of Mongolian "Resource Nationalism" Ahead of the Parliamentary Elections (blog by a Princeton anthropology Ph.D. candidate in Mongolia) http://bit.ly/KChGwD
3j) New foreign investors law not likely to be retroactive (Reuters)http://reut.rs/JtlETA
3k) Suspension of SouthGobi Sands License was a warning sign to Ivanhoe Mines (UB Post) (interview also claims Oyu Tolgoi reserves estimates will be increasing)http://reut.rs/JtlETA
3l) Son of Mr. Enkhbayar speaks out (UB Post) http://reut.rs/JtlETA
3m) Mongolia policy worries hit SouthGobi deal (Reuters) http://reut.rs/IJDAtv
3n) Steppe in an ugly direction (The Economist) http://econ.st/IDvS5I
3p) Mongolia considering foreign investment rules, Ivanhoe and Chalco say (Canadian Business) http://bit.ly/IDvS5N
3r) (English subtitles on related YouTube video) http://bit.ly/IDvS5U
3s) Ivanhoe CEO Loses in Rio 'Chess Game' Over Mongolia Mine (Bloomberg)http://bloom.bg/K4cNGm
3t) Ivanhoe Mines names new CEO, CFO, under Rio Tinto regimehttp://reut.rs/JtlHib
4) Erdenes Tavan Tolgoi:
4a) The deadline for citizens who want to sell their 1,072 IPO shares in Erdenes Tavan Tolgoi back to the government for approximately $765 is May 20.
4b) The international IPO has now been delayed until the 1st quarter of 2013http://on.wsj.com/KChFcb
4c) Mongolia could go it alone on giant coal mine (Reuters) http://reut.rs/JtlF9R
4d) Mongolia struggles to find the right investors for Tavan Tolgoihttp://bit.ly/KChFce
4e) Eyes 1st quarter 2013 (Reuters) http://reut.rs/JtlHyt
5) Mongolian Economy looks at possible effects on inflation of the election (however, they miss looking at the funds distributed to citizens taking a lump sum instead of IPO shares for Erdenes Tavan Tolgoi - $765) http://bit.ly/KChGwT
7) Top 15 out of top 150 enterprises in Mongolia named (Mongolian Economy). Mongolian Mining Corporation parent MCS Group is #1 and its subsidiary Energy Resources is #3. http://bit.ly/KChGN7
8) Mongolia to create a $600 million sovereign wealth fund in July after elections (Bloomberg) http://bloom.bg/JtlHyw
9) SCHCD [Security Clearing House & Central Depository, where all brokerage accounts are held], GOLOMT BANK, BDSEC SIGNS AGREEMENT TO EXECUTE CLEARING AND SETTLEMENT SERVICES
In relation to completion of installation of "Millennium IT" system and migrating to T+3 or new clearing and settlement system, The Securities Clearing House and Central Depositary (SCHCD) has concluded agreement to offer clearing and settlement bank services with Golomt Bank and BDSec JSC.
MSE CEO Kh.Altai, SCHCD Executive Director T.Gandulam, Golomt Bank Deputy Director D.Munkhtur and BDSec JSC Deputy Director B.Lhagvadorj and other related officials were present at the signing ceremony.
Source: Mongolian Stock Exchange
10) There is a lot more minor company news and other data that has transpired and not been covered in this update. The update is on a diet.
11) Elections are reported to be on June 28.
8 May, 09:40 AMReplyDelete CommentLike5
Oliver Belfitt-Nash of Monet Capital on the new foreign investors' law:
Mongolia News Update - Friday, May 04, 2012
After Chalco's proposed bid of SouthGobi, the Mongolian government moved quickly to prepare a law that gave authorities a say in deals of this kind. This week a draft of the law was released and has been translated unofficially into English. This draft can be found here. (http://bit.ly/IUQpp9)
While this is a first draft of the proposed legislation, there are still clauses that will cause great concern to some investors. The law expands the definition of a 'strategic entity' to include companies:
a) Over the value of MNT 100Bn (USD 77Mn) shall be deemed a strategic entity, and subject to more stringent regulations.
b) Operating in a sector of strategic importance such as "minerals, food, agriculture, power supply, road, transportation, information and communication"
c) Conducting a strategic activity, which includes many other operations
These types of companies will need to apply for permission when a company is acquiring more than a third of the shares, or if the majority of management and board members are being elected "without any preconditions". If the company attempts to create a monopoly or "directly or indirectly" affect the price of key exports, they must also apply for permission.
While the sovereignty of the nation is a priority for Mongolia, the rules outlined in this document strike us as excessive, and we believe the final lawmakers will agree. However, the draft shows the lengths the lobbyists are willing to go to in order to retain control over mongolia's most important assets and it is sure to raise the hair on investors' backs as it is being reviewed by parliament.
8 May, 09:40 AMReplyDelete CommentLike4
Dale Choi of Frontier Securities updates us this morning (May 8, 2012) on revisions being made to the Foreign Investment law:
All Mongolian global equities
BILL TO CONTROL FOREIGN INVESTMENT INTO STRATEGIC SECTORS IS SOFTENED, ADVANCES IN THE PARLIAMENT
According to official website of Parliament of Mongolia on May 8,2012 (http://bit.ly/KJrGOo)
Parliament's Standing Committee on Security and Foreign Policy made initial reading of the bill on regulating foreign investment into enterprises with strategic significance.
During discussion of the bill some members have expressed opinion that including too many sectors as strategically significant sectors will push away foreign investment. Therefore, number of strategically significant sectors have been reduced to minerals, finance and banking , media and communications, a motion that has been supported by members.
Also a vote to eliminate all 16 operations with strategic significance has been supported.
Also a clause to enroll enterprises with market value above 100.0 billion MNT into strategic enterprises also has been eliminated.
"Approval of this bill will not in any way mean closing off or hindering foreign investment. Bill authors have stated that the purpose of the bill to ensure market competition and prevention of illegal monopoly. This bill is not to prohibit but only to transfer to procedure of getting permission from the Government."
Members have supported the bill by voting on 28 formulations proposed by the bill taskforce and bill is to transfer to the floor of the united session of Parliament.
• Communication from Parliament creates impression that lawmakers are concerned with balancing interests of Mongolia and foreign investors and not to push away foreign investment
• In its softened form the bill has even higher likelihood of being speedily approved
• Exact regulations and implications of this bill for investors and especially regarding globally listed companies with assets and operations in Mongolia will be fully understood after the bill becomes a law and its publication
• We re-iterate our recommendation to investors to continue further diligently research implications of this bill if approved
• Negative. Minerals and banking sector are included in the strategically significant sectors.
8 May, 09:41 AMReplyDelete CommentLike4
Someone mentioned a couple of new items in a chat room about Mongolia's coal industry.
- SouthGobi's (OTC:SGQRF) office raided by Anti Corruption Agency with some portions of the office sealed off
- Former head of Mineral Resource Authority of Mongolia [MRAM] D.Batkhuyag arrested/detained in connection to SouthGobi's license.
I don't view these reports as confirmed yet as I have not seen it in multiple news outlets, only this one: http://bit.ly/Je9Mny
The question becomes what the agenda is. What is smoke and mirrors? What is policy?
What could have the former head of the MRAM done wrong to merit even being detained? SouthGobi had no problem with its license until Ivanhoe Mines agreed to sell its 57.6% stake in SouthGobi to (China's) Chalco. The former head of the MRAM didn't agree to sell his stake to Chalco, Ivanhoe did.
8 May, 05:47 PMReplyDelete CommentLike4
Report confirmed. I'm told multiple coal companies were visited by the ACA (anti-corruption agency) including Mongolian Mining Corporation.
It will be a long two months until the elections at the end of June and the protests after the election are over.
8 May, 06:05 PMReplyDelete CommentLike5
BMO (Bank of Montreal) reporting that the investigation for which South Gobi's offices were raided is unrelated to SouthGobi/Chalco deal, and regarding an investigation into practices of the MRAM. BMO adds that SouthGobi and "other companies" are cooperating with the ACA investigation into the MRAM.
ACA = Anti-Corruption Agency
MRAM = Mineral Resource Authority of Mongolia
8 May, 09:52 PMReplyDelete CommentLike3
I'm told Mr. D. Batkhuyag, the former director of the MRAM being detained and investigated, had been intending to run for parliament with the ruling MPP.
Mr. Batkhuyag is also formerly a Vice Minister of Roads, Transportation and Tourism in the mid-2000s.
For anyone looking for a picture, here he is in a greeting to the mining journal from October 2011 http://bit.ly/JdnE3b
I'll try to return to my usual erratic weekly updates now.
9 May, 12:32 AMReplyDelete CommentLike4
I'll explain political angle a bit.
President of Mongolia is a Democrat. He appointed his allies to the Anti-Corruption Agency, office of Prosecutor General of Mongolia, police and courts (including the Supreme Court).
Current Government and all other government agencies controlled by MPP and therefore are his political rivals.
That's why he uses ACA and courts to arrest on corruption charges as many people from MPP and MPRP as possible, since it would only make things easier for his Democratic Party.
10 May, 08:37 AMReplyDelete CommentLike5
I'll explain a bit political situation here.
Anti-Corruption Agency, Prosecutor General of Mongolia, secret police and even courts (including Supreme Court) are controlled by allies of current president Mr. Elbegdorj, who is of course a Democrat.
Current Government and its agencies controlled by his rivals from MPP.
That's why the ACA is not afraid of launching anti-corruption investigations and making arrests of people close to MPP and the current Government - they are enemies of President Elbegdorj.
10 May, 08:37 AMReplyDelete CommentLike3
Thank you for providing some local perspective.
I have heard rumors that more people have been arrested than just Mr. Batkhuyag and Mr. Enkhbayar. Have they all been MPP and MPRP?
What about the National Security Council's role in events? and Prime Minister Batbold's role (who is MPP)?
I am trying to keep up with the news, but things are happening rapidly.
Thank you again for your perspective.
10 May, 09:35 AMReplyDelete CommentLike4
The list of recent politically motivated arrests in Mongolia is rather long.
9 provincial governors are under arrest on corruption charges (out of 21). They are all MPP members.
Also, five senior police generals and officers are in prison for their role in shooting of protesters in 2008 unrest.
The former head of Anti-Corruption Agency itself was arrested (with several of his subordinates) and imprisoned for corruption.
Several army generals are also investigated on charges of embezzlement of state property.
Ms Udval, secretary-general of MPRP will be tried tomorrow for organizing protest on April 13th (against arrest of Mr. Enkhbayar)
Even Khamba Lama Choijamts, head of Mongolian Buddhist church is under investigation by ACA in connection with Enkhbayar's case.
Taken together, I think the picture is clear. Mongolia is currently experiencing a purge on unprecedented scale since 1930s.
And there sure will be more arrests. Just wait
10 May, 12:50 PMReplyDelete CommentLike4
The role of MPP leadership in all this is unclear. Looks like infighting between various factions within MPP and they are using Democrats, President and law enforcement to settle scores with each other.
I feel that if MPP was united, it could easily stop this campaign of arrests (and in fact, they do from time to time - there were many cases of ACA investigations against senior MPP members going nowhere.)
In case of Mr. Enkhbayar's arrest, I think there was an agreement between MPP and Democrats (or at least with the President Elbegdorj), since he is their common enemy.
10 May, 12:50 PMReplyDelete CommentLike4
Wow. Thanks guestinvestor.
Do you have a link to a news article listing all those arrested so far? (if it has pictures and names, I can try to manage if it is in Mongolia; though in English would obviously be easier).
I've also noticed that the CivilWill Green Party has abstained from all the discussions in parliament about the corruption arrests. This is quite interesting as Ms. Oyun (of CWGP) is a leading voice in Mongolia against corruption - in parliament and in the foundation dedicated to her brother's assassination (Zorig foundation) - yet seems to not support the current actions.
I also wonder what you think about Mr. Temuujin of the DP (http://bit.ly/L6XG1C-) who I heard was among the younger people in politics that will challenge and critique the way things are.
Lastly, I keep looking at my list of Mongolia's 100 wealthiest people from one of last year's issue of HERO magazine. As far as I can tell, so far only Mr. Enkhbayar appears on this list (at #96) among those arrested. Perhaps I am missing someone else, but it seems so far that the richest 95 people in Mongolia are all completely clean.
10 May, 01:09 PMReplyDelete CommentLike4
One more arrest. D.Davaatsogt, chief of the Geology and Mining cadastre division of the Mineral Resource Authority was arrested today. See story and picture here http://bit.ly/JnCa8F
The status of the 192 mineral licences awarded by Mr. Bathuyag when he was head of MRAM starts looking very troubling. All holders of these licences and investors should be wary
11 May, 01:17 AMReplyDelete CommentLike5
Could these arrests be the beginning of nationalization of resources in a bid for election and power?
11 May, 02:13 AMReplyDelete CommentLike4
I am not sure what the plan is exactly, but there are accusations widely reported in Mongolian press that Mongolian government led by then Prime Minister Enkhbayar received loan of 50 mln dollars from Mr.Friedman of Ivanhoe Mines in 2003 which was used to pay to Russia part of the Soviet era-debt settlement (nominally 10 bln Soviet rubles).
In exchange, it is reported that Mongolian Government ordered MRAM to grant 48 licences on one day in December 2003 to the Ivanhoe Mines, including Oyu Tolgoi deposit and coal deposits currently held by SouthGobi (which is a subsidiary of Ivanhoe Mines).
Presumably, if they can find anything in their investigation of MRAM officials that would make this act look illegal or corrupt, then this would present a legitimate way to annul these licenses.
11 May, 05:42 AMReplyDelete CommentLike4
Regarding CivilWill Green Party , I think their abstaining from discussion in parliament just helped MPP (Democrats and 9 pro-Enkhbayar members of MPP were calling for resignation of Mr.Nyamdorj, Minister of Justice from MPP for his role in Enkhbayar's arrest).
11 May, 06:41 AMReplyDelete CommentLike4
Here is a rather long article in Mongolian with names and pictures.
1. Governor of the Orkhon province (Erdenet City) Mr. D.Oyunbat sentenced to 2.6 years imprisonment for criminal neglect which led to loss of public funds.
2. Governor of Uvs province Mr. E.Tsaschiher received 3 years sentence for embezlement of state money.
3. Governor of Nalaikh district Mr. B.Bayandelger is being investigated by Anti-Corruption Authority for corruption.
4. Governor of Govisumber province Mr. J.Bayanmunkh was arrested by ACA, but then released for medical treatment. He is accused of illegal privatisation of state property.
5. Governor of Dornod province Mr. Ts.Janhlav is being investigated by ACA for failing to present income and property statement.
6. Governor of Songinokhairkhan district Mr.Ts.Bold is being investigated by ACA for embezzlement of state money. Some of his subordinates are under arrest.
7. Governor of Gobi-Altai province Mr. Sh.Amgalanbayar is being investigated by ACA for corruption.
8. Governor of Khuvsgul province Mr. L.Tserenjav is being investigated by ACA for corruption.
9. Governor of Bulgan province Mr. M.Oyunbat is being investigated by ACA for illegally granting land.
10. Governor of Arkhangai province Mr. Yo.Baatarbileg is being investigated by ACA, concrete charges are unclear.
11. Governor of Uvurkhangai province Mr. D.Togtokhsuren is being investigated by ACA for corruption.
11 May, 07:14 AMReplyDelete CommentLike4
Jon, if I may ask, are you still long IVN?
9 May, 01:13 AMReplyDelete CommentLike4
Readers can inquire about my positions in Mongolia anytime. I take my disclosures seriously and do my best to keep them up-to-date.
As for IVN, not happily, but yes I am still long IVN. I have not traded the company since August 19, 2011.
With political commotion I'm hearing about, there may be another 20% or more downside. (I'm told more ACA arrests are in the pipeline.)
As things are, I need to be prepared to write about Ivanhoe, which means not trading it (per personal rules about not trading one week before or after writing about a company), which means I'll have to wait until sometime between late this year and the middle of next year to get out from under it at a fair value.
If you were considering buying IVN for a value play, I would say "not yet" still.
Please follow me if you find this useful. I need more followers on SA so I can get some larger media outlets to publish my work.
9 May, 08:12 AMReplyDelete CommentLike5
For ALL investing in Mongolia (whether holding IVN or not)... consider:
WSJ did Ivanhoe (IVN) no favors yesterday in its tenuous reporting: "Ivanhoe Mines Ltd.'s shares fell sharply Tuesday after Mongolian anticorruption authorities visited the head office of the Canadian miner's coal operations in the Asian country."
A few points that question the correlation between Ivanhoe's share price drop and SouthGobi's office raided:
- SouthGobi is a bit under 5% of Ivanhoe's total company valuation.
- Ivanhoe was down 4.82% yesterday on top of weeks of going down
- global markets were down yesterday
- the SouthGobi office was raided as part of an investigation into the arrested former director of the MRAM
This is NOT just an Ivanhoe Mines issue. As things unfold in the lead-up to the election in Mongolia, news will be reported in ways that may be even less beneficial to your holdings than the actual news. Post-election, the news cycle will evaporate into a fine mist of periodic journalists bleating hyperbole about Mongolia's coming economic boom and the tide will turn.
9 May, 08:35 AMReplyDelete CommentLike6
Jon, thanks for the update; I appreciate it!
9 May, 11:49 AMReplyDelete CommentLike5
Mr. Enkhbayar's arrest finally made it to Bloomberg. The man had to starve himself for a few days, but now he's been Bloomberged. Article came up on Bloomberg's home page (listed last; but nonetheless on the home page). As Mr. Enkhbayar has been taken to the hospital, I assume they will put an IV drip in Mr. Enkhbayar to end his hunger strike.
Nothing in the article about Mr. Batkhuyag's arrest, or any other arrests. Article suggests the situation with Mr. Enkhbayar is generically bad for stocks doing business in Mongolia.
P.S. Thanks for the thanks Jason.
9 May, 10:46 PMReplyDelete CommentLike5
Yesterday Mongolian parliament discussed the proposed law on restriction on foreign investment in three strategic areas (mining, finance and media and telecommunications)
Times.mn reports a rather lively exchange of opinions.
MP L.Bold criticized the proposed law and said: "We are scaring away foreign investors, but can't do anything ourselves. Foreign media even compares Mongolia with Zimbabwe. Foreigners will flee from our country"
MP D.Odkhuu replied "We've met with several people from embassies of Japan, Australia and other countries. They were asking why are you restricting foreign investment. We explained that this is not a new law in response to Chalco takeover bid. MP N.Batbayar proposed this law three years ago, but it was left undiscussed until today. New issues were added to the draft law being proposed now. USA, Germany and Russia have similar laws limiting foreign ownership in strategic sectors. We are not trying to invent new law unique only to Mongolia. When explained in these terms, foreigners understand. I don't think that this law would stop foreign investment or make investors flee. Only three sectors will be subject to limits, others are free. Also, the law proposes limits, not state ownership. No need to make comparisons with Zimbabwe"
MP D.Zorigt said "It's too extreme. The draft needs to be discussed first by Economic affairs subcommittee.Let's stop first reading and wait discussion by Economic affairs subcommittee."
Deputy speaker of Parliament MP G.Batkhuu proposed to vote on MP Zorigt's proposal.
MP N.Batbayar became angry and shouted "We don't have time. If we postpone this time, we will not be able to pass this before end of current session. Batkhuu, are you trying to drop this law on orders from foreigners? You damned traitor! Let's continue with first reading"
Deputy speaker of Parliament MP G.Batkhuu answered with "Did Enkhbayar stop giving you money? Lacking now money for you reelection campaign?"
MP N.Batbayar also replied to MP Zorigt "This draft law was prepared three years ago. You left it undiscussed when you were head of Economics Subcommittee. We are masters of our motherland, we should have authority to say how mineral riches should be used. Is it right that foreigners come, dig it and go away? We don't have time, election time is near. Apparently lobbyists of foreigners are trying to drop this law" and added insultingly "You damned Chinese piss"...
To which MP D.Zorigt replied "You are Chinese halfbreed yourself!" and left the room. Then apparently he calmed and returned back.
Discussion ended with proposal by MP Ts.Bayarsaikhan to continue with first reading, but meanwhile have it discussed in the Economic Subcommittee before the second reading.
11 May, 06:19 AMReplyDelete CommentLike4
Very big thank you to guestinvestor for all the posts and data.
I do not believe the foreign investment law is about nationalization, it is about the right to be arbitrary. It will mean any mining license of significance *could* be revoked or *could* be forced to take on a 51% Mongolian partner. The intent is to be able to block dealings with unwanted companies. It also may lead to sovereign (other countries) and corporate corruption as the law could potentially be used to swipe mining licenses out from under companies.
Everyone in Mongolia knows that bribery is often involved in mining licenses. Heck, I've heard bribery is sometimes involved in just trying to get a person to hand you your driver's license at the office where you get them. Its just how things are. Now what? Are the mining companies going to have to bribe someone to cover-up that they bribed someone to get the license? >>> and I don't mean this to be rude, but frankly, *if* part of doing business is someplace is handing a few people cash, it just is. It is not bad, it is not good, it is just how business is done.
I used to know painting contractors in NY, they had to bribe a lot of people to get a contract, from city officials to unions to the mafia. It was just how business was done, period.
What is painful here is that the Anti-Corruption Agency seems to be used now as a tool for a type of corruption, toward modifying the outcome of the election. The ACA has had minimal activity up until Mr. Enkhbayar's arrest, and here this agency is suddenly with a flurry of activity beginning 2 1/2 months before an election.
This is hurting the integrity of the agency and the integrity of Mongolia trying to reduce its corruption.
I actually do not think that Mongolia is particularly anymore corrupt than most western nations, it is just easier to see the corruption in Mongolia because the country is smaller so one can see all the moving parts more easily.
However, the ACA being used for elections is bad form in my opinion. To me, the timing of the activities of the ACA are the most worrying corrupt activity at the moment. If the arrests were more balanced across parties and among the wealthy, this would be less of a question.
Lastly, for now, because I'm late for a meeting, I cannot believe they are going back to 2003 and picking on Robert Friedland. It is bizarre that Mongolia's best salesman - Mr. Friedland - is viewed as a scoundrel that robbed the country of its big copper-gold mine. His company has now been taken over by Rio Tinto and it seems the government is in a hurry to get in some parting shots at Mr. Friedland. It makes no sense. What is the goal? To delay production from Oyu Tolgoi? To delay the economy?
Mongolia's GDP in 2003 was $1.6 billion, still less than half of its 1989 GDP of $3.6 billion.
Thanks again guestinvestor. Please let me know if you disagree with anything I have said.
11 May, 08:12 AMReplyDelete CommentLike3
I mostly agree with everything you say. Needless to say, the situation worries me to the extremes.
I shudder at the thought what would happen to the country if Enkhbayar dies in prison (such things do happen in Mongolia, eg. Enkhbat accused of assassination of Zorig died in Mongolian prison and the case is still unsolved)
Regarding ACA objectivity, problem is that Democratic party is hardly united and there are many warring factions among them. It is well known that President Elbegdorj dislikes Mr. Altankhuyag, his successor and current head of Democratic Party.
Mr. Altankhuyag used to be Deputy Prime Minister in the coalition government, so presumably there is a lot of things for which he can be blamed by ACA.
His arrest would present President Elbegdorj with a chance to reestablish control over the Democratic Party where he has many allies.
So I am pretty sure that there are many Democratic members of parliament worried about current witchhunt...
11 May, 08:47 AMReplyDelete CommentLike4
Like Jon, I wish to sincerely thank you for your thoughtful input here. It is invaluable to us who wish to understand the financial and political risk of investing in Mongolia.
Please continue to share your observations and insights here. The evolving political drama is fascinating in its own right, independent of any discussion of investing implications. But your perspective on both provides us outsiders a unique view that cannot be found in western media.
11 May, 10:53 AMReplyDelete CommentLike5
Thanks for your kind words.
Just want to make sure that you understand that I am not really a political insider, I don't work in the government or parties and have no confidential information.
I just read Mongolian press and internet sites, watch TV and listen to rumours.
But as Jon says, Mongolia is a small country where it's difficult to hide secrets, so probably I will be able to tell something interesting from time to time.
11 May, 11:15 AMReplyDelete CommentLike3
I am not sure which Mongolia thread would be appropriate, but this comparison with Zimbabwe is instructive.
Very few investors or journalists writing about Mongolia realize that Mongolia is experiencing very, very fast demographic growth. Birth rate is reported as 24 per 1000 population, which is twice as high as China and in fact higher than in countries like Pakistan or Cambodia. There are no signs of this growth abating, fertility rates are still very high at 2.6 (Indian level, I think) and population age structure is extremely biased towards youth.
Thus it's very difficult to provide jobs for so many young people (especially when there are Chinese guest-workers in such numbers).
This is, I think one of the reasons why political situation is in such sorry state.
Lots of young and unemployed people on the streets and every year tens of thousands graduates from schools and colleges are added to them, plus unending stream of migrants from countryside arriving to Ulaanbaatar to seek jobs and income.
This is a very dangerous combination with striking resemblance to Arab world and its current turmoil.
11 May, 11:39 AMReplyDelete CommentLike6
The fact that you can read Mongolian and translate it fluently for us makes you a cultural insider, if not a political insider.
In fact, I would trust you more as a "man in the street" than if you claimed to be a "political insider." Your observations thus far seem to be politically neutral, as best I can tell, and are certainly appreciated by me.
11 May, 12:00 PMReplyDelete CommentLike4
An article in the Wall Street Journal titled "Mongolia Faces Questions Over Commitment to Democracy"
I note that the US Government is starting to put pressure on President Elbegdorj. See this quote:
"The U.S. has voiced its concern about Mr. Enkhbayar. A U.S. State Department spokeswoman said this week that Kurt Campbell, assistant secretary of State for East Asian and Pacific Affairs, summoned Mongolia's ambassador to discuss his case. Other U.S. efforts related to the "detention and health" of Mongolia's former president are being led by the embassy in Ulan Bator, she said."
12 May, 05:24 AMReplyDelete CommentLike5
And with all this commotion and instability going on, it creates more of an uncertain environment which will cause more people to sell their Erdenes Tavan Tolgoi IPO shares back to the government for a pittance of $765... and then the government in turn will flip the cheap shares over to Mongolia's wealthiest corporations; which many politicians are connected to.
Meanwhile, I have been sitting on an article about this for two weeks that no one will publish.
All the commotion with the ACA and everything will settle out after the election, and in the meantime people will have taken cash for their IPO shares that will create more inflation that will make their cost of living higher; while at the same time having given up their IPO shares for far less than their value (the CEO of ETT, Mr. Enebish, said this week that the IPO shares would be worth more at listing now that the company will IPO next year).
Thus, while the bullish story for investing in Mongolia remains in place despite all the commotion; the story that all of Mongolia's people will benefit from this economic boom is deteriorating badly.
12 May, 10:00 AMReplyDelete CommentLike5
Probably the worst propaganda piece I've read in many, many years. Read at your own risk
In the Mongolian version of the site, they went even further with wild accusations against international press. The article here claims that Wall Street Journal, Bloomberg, Financial Times were bribed by Mr. Enkhbayar or his friend Mr. Friedman of Ivanhoe Mines to write about abuses of democracy and human rights in Mongolia in connection with Enkhbayar's arrest.
On this very page, someone was asking is Myanmar becoming next Mongolia?
It looks like that actually the opposite is happening - Mongolia is quickly becoming next Myanmar-like pariah state!
12 May, 09:56 AMReplyDelete CommentLike5
This is absurd. How easy is it to go down the list of Mongolia's 100 wealthiest and point to all the people that have bribed, stolen, and smuggled more than Enkhbayar? Very easy.
Of course, some of them are currently MPs and protected from the ACA as long as they are MPs - a problematic fallacy.
The people engineering this propaganda want to claim that Ivanhoe's Robert Friedland stole Oyu Tolgoi from the government somehow. Well, this is interesting because the government, and not its citizens, hold a 34% stake in Oyu Tolgoi. If the citizens were informed shareholders, they would not tolerate the games played with this company for political grandstanding.
When the ACA goes after those who got seriously wealthy through graft, bribes, smuggling, and land grabs, I might take them seriously. Right now, this is just election-year shenanigans.
12 May, 10:10 AMReplyDelete CommentLike3
Enkhbayar is dying.
Director of the Second Hospital Mr. G.Bayasgalan said today that Mr.Enkhbayar's health is in critical condition after nine days of dry hunger strike (body temperature 35 degrees Celsius, acetone breath, has difficulty speaking, severe dehydration, etc)
Police ordered forcible treatment, Dr. Bayasgalan says that it is against medical ethics - doctors should not use force against patients and it is probably illegal as well.
Dr. Bayasgalan asked to release him on bail for medical reasons, otherwise Enkhbayar will die.
12 May, 10:51 AMReplyDelete CommentLike4
Amnesty International issued a statement calling for immediate release of Mr. Enkhbayar and citing numerous violations of due process and international human rights standards http://bit.ly/JrguIC
12 May, 12:09 PMReplyDelete CommentLike4
Time.mn reports that urgent meeting of National Security Council of Mongolia to discuss developing crisis with Mr.Enkhbayar's health is currently in progress (at midnight of Saturday, Mongolian time) http://bit.ly/JrhZX3
12 May, 12:19 PMReplyDelete CommentLike4
If he dies, its a problem.
If they release him, its a problem.
House arrest like Aung Suu Kyi?
I don't know. I think his death would be the worst thing possible for everyone at the top of Mongolia's society. Never mind the riots, there will be investigations from all sorts of international agencies.
Mongolia is used to being off the grid, largely unnoticed by the world. This will not be good attention.
12 May, 12:40 PMReplyDelete CommentLike3
He is in coma
12 May, 01:03 PMReplyDelete CommentLike4
Thanks for the update guestinvestor.
12 May, 01:25 PMReplyDelete CommentLike4
MPP parliament faction just had an urgent meeting and adopted a resolution calling for release of Mr.Enkhbayar on bail.
Rather late, I'd say
12 May, 01:30 PMReplyDelete CommentLike4
Enkhbayar's health is getting even worse. MPRP members are praying for his life outside the 2nd Hospital
See this touching picture http://bit.ly/KVm7CW
13 May, 02:38 AMReplyDelete CommentLike3
It is interesting how little attention the western press is giving to this. I can only find two recent articles with a google news search for "Enkhbayar health". And they are from wsj and Bloomberg. I find no mention of him entering a coma. I would expect that to be headline news.
Guest investor, what is your perspective on this: http://bit.ly/KV049W
13 May, 02:15 PMReplyDelete CommentLike3
Thanks for the link to the President's speech SMaturin. Unfortunately, its a lot of nice sounding pledges that revealed no new information.
A question that is rolling around in my head is if there is a common thread among the arrests and agenda beyond politics. I may be reaching, but I am wondering if everything going on is moving chess pieces toward completely unraveling the Oyu Tolgoi deal. I hope that is wrong, but the attempt would not surprise me in the run up to the election.
I look forward to what guestinvestor and others have to say about President Elbegdorj's speech as well.
13 May, 06:53 PMReplyDelete CommentLike4
Apologies for the past and future weeks that we'll have rolling update on the big news (as we have been discussing Enkhbayar, Elbegdorj, the Foreign Investment Law, etc), but I'll be a bit clunky and not on time with the weekly updates due to personal obligations. I have a lot on my plate currently and keeping up with the big news seems more germane than keeping up with quarterly reports from individual companies for the moment.
13 May, 06:56 PMReplyDelete CommentLike4
I am really not sure about this. The US support is vital for Democratic Party and Mr. Elbegdorj personally and cancellation of Oyu Tolgoi deal will definitely throw it away.
Besides, if Mr.Elbegdorj loses reelection next year (which now appears very likely), he definitely will be subject to criminal persecution for his actions during his presidency, following the precedent he set himself.
He might then need to flee the country and therefore needs to be on good terms with the US Government.
14 May, 12:53 AMReplyDelete CommentLike4
Just more propaganda, that's all. On Sunday, there was a disgusting scene broadcast on TV. MPs Terbishdagva and Ulaan on behalf of MPRP asked President Elbegdorj to release Mr.Enkhbayar on bail to save his life.
Elbegdorj refused sarcastically claiming that they should ask Enkhbayar himself to stop the dry hunger strike. He also said that he will order forcible treatment of Mr. Enkhbayar.
All this makes very unfavorable impression on Mongolian voters, I am afraid.
There might be riots in the city, armed police in full combat gear stands in readiness (see article and picture here http://bit.ly/KjjuIJ )
As for international press, the New York Times today run a story about it titled "Ex-Leader's Detention Tests Mongolia's Budding Democracy"
An excerpt from the article:
One of Mr. Enkhbayar's lawyers is Peter Goldsmith, a former British attorney general and a member of the House of Lords, who visited Mongolia but was not allowed to see his client. He called the accusations "insubstantial, stale and petty."
Just as troubling, Mr. Goldsmith said, are Mr. Enkhbayar's detention without formal charge and the mistreatment of his supporters. Mr. Enkhbayar's party secretary was harassed after being called into a police station, and another party member was detained for collecting petition signatures, Mr. Goldsmith said.
"Everyone had hoped Mongolia had broken away from the Soviet chain," he said in a phone interview. "But this is Soviet stuff."
Still, Mr. Enkhbayar's hunger strike, said Mr. Minton, the former American ambassador, has left Mongolia's government looking confused and uncoordinated. "They got a lot more than they bargained for," he said.
14 May, 12:46 AMReplyDelete CommentLike4
As an investor with a decent amount riding on select Mongolian equities, bonds and a mining P/P I very much appreciate this pure source of information. Thank you to Jon, GI and SMaturin for keeping this thread running. There are people out here who appreciate your time and insight - you are helping us other frontier investors......
Sure hope we don't have to cancel our booked trip at the end of July for the CapEx event due to civil disturbances. Let's hope good sense prevails among these politicians and the country can move forward for the benefit of all Mongolians. It is about time for this country, they are obviously poised and in the drivers seat. But how many times in history has the desire for power and greed screwed up a bright future?
14 May, 06:09 AMReplyDelete CommentLike5
Elections are at end of June and protests will be in early July. Your trip in late July should time out to be back at normal safety levels.
14 May, 09:17 AMReplyDelete CommentLike2
Sukhbaatar District Court issued today an order authorizing release of Mr. Enkhbayar on bail.
3rd President of Mongolia, leader of the Mongolian People's Revolutionary Party Nambaryn Enkhbayar has ended his dry hunger strike which lasted 10 days and 6 hours.
Here is what he looks like now
Before the hunger strike http://bit.ly/JcG7yv
14 May, 06:30 AMReplyDelete CommentLike3
Thank you for all the updates guestinvestor. They are highly appreciated.
I just want to note that the report that Mr. Enkhbayar was in a coma seems to have been inaccurate. Inaccurate news reports happen often in Mongolia for various reasons (there's way more media than 2.8 million people need; a lot of media is financed by people with political agendas; etc.).
I am still glad you let us know there was a report he was in a coma as understanding all the various news coming out helps our perspective.
14 May, 09:20 AMReplyDelete CommentLike3
Mongolian websites citing his lawyers reported that he lost consciousness and was close to dying, I, and most Mongolian readers assumed that this means he was in coma.
14 May, 10:04 AMReplyDelete CommentLike3
Absolutely fair and appreciated.
14 May, 10:46 AMReplyDelete CommentLike3
Bloomberg story reports release of Mr.Enkhbayar
14 May, 06:36 AMReplyDelete CommentLike3
Funny Youtube video of Mr. Enkhbayar refusing to listen to the reading of the indictment order. He calls the indictment illegal and refuses to listen while telling Anti-Corruption Agency officer Naranbaatar that he will answer for his illegal actions one day
14 May, 06:57 AMReplyDelete CommentLike3
More worrying developments.
Mongolian General Intelligence Agency reported today that they revealed a spy ring working for foreign powers. The ring was led by foreign resident spy.
Four Mongolian citizens are accused of high treason, becoming agents of foreign powers and selling state secrets, including information related to national security and strategic deposits to the foreign spies.
On DVD, at that.
In 1930s, during the Stalinist purge in Mongolia, tens of thousands of Mongolians were falsely accused of being Japanese spies, tortured and shot in a campaign of terror which lasted many years.
We hoped that these terrible times would never return, but alas....
PS. I think foreign investors coming to Mongolia need to be extremely cautious while buying any kind of information related to these strategic deposits. You may well be labelled a foreign agent and spend the rest of your days in Mongolian prison...
14 May, 07:16 AMReplyDelete CommentLike4
I would also always counsel at least looking at the most conservative view when assessing risk. In the U.S. Embassy's 2011 Investment Climate Report, I would read the sections on Exit Visas that begin respectively on pages 10 and 50 -http://bit.ly/HXzmMh - to understand that foreign investors already were subject to occasional random problems. These instances - I believe - are rare. However, as with the proposed Foreign Investment Law, the issue is not that these laws will be enforced often, but that they can be used arbitrarily at whim to create difficult situations.
14 May, 09:24 AMReplyDelete CommentLike4
Stalinist purges in Mongolia killed at least 3% of the populationhttp://bit.ly/Mcfyvg (but I think those numbers are actually low based on talking to people... likely closer to 5%)
14 May, 09:26 AMReplyDelete CommentLike3
I would like to add that Mongolian police and prosecutors often take bribes to illegally open criminal investigations against Mongolian and foreign businessmen on little or no evidence. This is well known fact in Mongolia.
The bribery at courts is not totally unknown, but much less developed. However, as Mr. Enkhbayar's case shows there is a fair amount of political pressure on judges which forces them to make illegal decisions.
I think it's fair to say that there is no independence of courts at all, they all depend on the state, the so called General Council of Courts for their jobs and salaries. See here in detail http://bit.ly/Je6LqM
14 May, 11:12 AMReplyDelete CommentLike4
Here is a brief list of the members of the General Council of Courts.
Ts.Zorig, Chief Justice of the Supreme Court and head of the General Council of Courts. Became Supreme Court Justice in 2010 (after Mr.Elbegdorj became President) and was appointed Supreme Court Chief Justice by Executive Order No 234t of the President of Mongolia dated 5th of November 2011.
1. B.Bat-Erdene - Member of Parliament (MPP)
2. P.Tsagaan - President Elbegdorj's Advisor on legal policy issues. Appointed to the General Council of Courts by President Elbegdorj
3. Ts.Nyamdorj - Minister of Justice and Internal Affairs, MP (http://bit.ly/JdJCjN)
4. D.Dorligjav - General Prosecutor of Mongolia, appointed by President Elbegdorj
5. Ts.Nyamjav - Justice of the Supreme Court. Appointed to the General Council of Courts in 2012.
6. B.Undrah- Justice of the Supreme Court. Appointed to the General Council of Courts in 2012.
7. B.Sarantuya- Appointed Chief Justice of Capital City Court in 2011.Appointed to the General Council of Courts in 2011.
8. N.Enkhbaatar - Appointed to the General Council of Courts in 2012.
9. P.Batsaikhan - Appointed to the General Council of Courts in 2011.
10. D.Myagmarjav - Appointed to the General Council of Courts in 2010.
11. D.Damdindorj - Appointed to the General Council of Courts in 2010.
12. G.Bolormaa- Appointed to the General Council of Courts in 2010.
13. Yo.Tsogtdanzan - Appointed to the General Council of Courts in 2011.
As you can see, this body with stated duty "to provide conditions to ensure judicial independence and impartiality of judges" consists almost entirely of people appointed by President Elbegdorj in 2010-2012. It has wideranging powers which include:
submits proposals to the Parliament and President on the establishment of courts, their personnel quota and salaries, appointment and release of justices and judges. In addition, it selects and examines justices and judges, upgrades their skills and qualifications, organizes re-trainings, distributes budget and controls over expenditure of funds, and is engaged in other matters provided for in the Law.
Given this reality, I think it's clear why Judge of the Sukhbaatar District Court Ms. Oyuntuya has ordered legally dubious arrest of Mr. Enkhbayar and why Chief Justice of the Sukhbaatar District Court Mr. Soyombo-Erdene has issued even more blatantly illegal order to prolong Mr.Enkhbayar's arrest for two months
14 May, 11:45 AMReplyDelete CommentLike4
Excellent and complete data - thank you again!
14 May, 12:57 PMReplyDelete CommentLike1
I forgot to mention probably the most juicy part of "impartiality of judges".
Apparently General Council of Judges has funds to purchase apartments and power to give them free of charge to the judges. Just in 2008, for example, General Council of Judges purchased 48 apartments (7 in the Ulaanbaatar) at the cost of 1.7 bln tugrugs.
Interestingly, among 7 lucky Ulaanbaatar judges to own new apartment we find none other than the current Chief Justice of the Sukhbaatar District Court Mr. Soyombo-Erdene.
I wonder if Judge Oyuntuya was promised a city apartment for her verdict against Mr.Enkhbayar?
I'd think this would be a good case for the Anti-Corruption Agency to investigate...
15 May, 12:36 AMReplyDelete CommentLike4
Financial Times has new story on release of Mr. Enkhbayar
Although Mongolia has successfully seen several peaceful transfers of power during its 20 years of democracy, the recent jailing and hunger protest of Nambaryn Enkhbayar, who left power in 2009, have highlighted the turbulent and capricious political battles in this mineral-rich democracy.
Mr Enkhbayar's release on bail late on Monday followed several days of protests by supporters in Ulan Bator, and mounting concerns from human-rights organisations about his treatment in jail.
The former president had been planning to run for parliament in Mongolia's nationwide elections on June 28 as the head of an independent political party he founded that is Mongolia's third-most popular political party, according to polls conducted before his arrest.
However Mr Enkhbayar has been charged with five instances of corrupt behaviour, and was forcibly arrested on April 13 after failing to appear for questioning, according to a statement from Mongolia's anti-corruption watchdog.
The allegations represent the highest-level corruption case Mongolia has ever experienced, which has deepened political fissures ahead of the June polls.
Mr Enkhbayar, 54, ended his hunger strike on Monday evening after authorities granted his request for bail. He is currently receiving medical treatment, according to his family.
"Doctors are very worried about his health recovery," his son Batshugar wrote in an email. Before he ended the strike, Mr Enkhbayar's heart, kidney, liver and stomach were beginning to fail, according to a doctor's report translated by his family.
Mr Enkhbayar's lead defence lawyer said that he plans to ask for the case to be dismissed on procedural irregularities. According to the lawyer, Mr Enkhbayar has been denied basic legal rights granted to defendants under Mongolian law, including the right to confidential legal counsel.
14 May, 08:45 AMReplyDelete CommentLike3
The western media is focusing on the human rights story of Mr. Enkhbayar. Meanwhile, they are missing the human rights' story of the people of Mongolia, and their ability to prosper. That is THE story of the last few months and the coming years in Mongolia. The opportunity for all Mongolians to have a massive economic lift is huge, and yet that opportunity is being squandered by power games, greed, and jealousies at the top of their society.
14 May, 09:31 AMReplyDelete CommentLike3
United Nations Secretary-General Ban Ki-moon has called Mongolian President Mr. Elbegdorj to ask about health of Mr. Enkhbayar
14 May, 10:07 AMReplyDelete CommentLike3
Sonin.mn reports citing "informed sources" that President Elbegdorj was against release of Mr.Enkhbayar on bail until the unexpected telephone call from Secretary-General of the United Nations.
Sukhbaatar district court issued bail order afterwards.
15 May, 12:48 AMReplyDelete CommentLike3
The question is if Enkhbayar will be able to participate in the elections or not. If he can, and he wins, then he gets immunity from the charges like all the other MPs and officials.
15 May, 12:54 AMReplyDelete CommentLike2
New Election law gives 28 seats to the party lists. Since Enkhbayar will most certainly be No.1 on the MPRP party list and since MPRP electoral rating already was higher than the required 5% ceiling (see April poll conducted by Sant-Maral Foundation http://bit.ly/JPCjDp ), it seems that he will definitely win a seat, unless the authorities decide to deprive him of an opportunity to stand in election.
By now, I am pretty sure he can beat Elbegdorj in Presidential elections as well, his rating grew incredibly during these weeks.
15 May, 01:20 AMReplyDelete CommentLike5
Anti-Corruption Authority finally gave a statement with some details on charges against Mr. Enkhbayar. See full text in English here http://bit.ly/KIXl69
A few things to note.
1. Accusations brought for the first time against two MPs from the MPP - MP Ts.Batbayar, former mayor of Ulaanbaatar and MP Narankhuu, former director of the Erdenet Mining Corporation
2. I am not a lawyer, but have some knowledge of how Mongolian bureaucracy functions. This case appears to lack any kind of material evidence linking Mr.Enkhbayar to alleged offenses.
Mr. Enkhbayar as a Prime-Minister or a President would not have any legal right to make formal decisions on privatisation of small hotel or granting contracts for Erdenet Mining Corporation.
In fact, even if ACA manages to produce any document signed by Mr.Enkhbayar, it most probably would be a handwritten resolution saying something like "To Batbayar. Please study this issue and resolve in accordance with the law".
Therefore, the prosecution will have to rely on witnesses which will say that they were present when Mr.Enkhbayar was ordering mayor Batbayar or director Narankhuu to proceed with privatization or granting of contract.
So it appears most likely that ACA would make deals with other accused suspects and offer them a deal in return for testimony against Mr.Enkhbayar.
Given a good attorney and impartial judges, the case would likely collapse for lack of firm evidence. But we can hardly expect both, especially the latter....
15 May, 01:01 AMReplyDelete CommentLike4
US Senator Dianne Feinstein (D-Calif.) warned on the House floor Monday of political crackdown in Mongolia ahead of June elections.
She said that the United States should demand that Mongolia, the only functioning democracy in Central Asia and a close U.S. ally, respect its citizens' legal rights amid a crackdown on political opponents.
Excerpt from the article
Feinstein said she has been in contact with the State Department and Vice President Biden's office throughout the weekend as the health of imprisoned former President Nambaryn Enkhbayar took a turn for the worse. Enkhbayar was released on bail Monday morning so he could get medical help following a hunger strike.
The former president from 2005 to 2009 was arrested last month by an anti-corruption agency after taking the head of a new political party due to compete in parliamentary elections next month.
"Certainly, to say the least, the bringing of charges against a political leader in the midst of an important election campaign is, to say the least, unusual," Feinstein said. "We need to press for due process in the adjudication of his case and ensure he is afforded his full rights."
She called on the government of Mongolia to restore the former president's due process rights and announce the procedures and schedule for adjudication of his case.
"To do less would be to reinforce fears that the process employed here is politically driven and meant exclusively to remove Mr. Enkhbayar from participation in the parliamentary election now underway."
And her statement
"Under the leadership of President Enkhbayar, Mongolia saw substantial democratic gains and the signing of a Millennium Challenge Corporation pact with the United States. It has been deeply troubling to follow the way in which he has been treated: summarily detained and unable to see his lawyers or family members in private on a regular basis. He has not been convicted of anything and the allegations against him have been deemed by one of his attorneys to be 'insubstantial, stale and petty.'
"Mongolia is a nascent democracy, and for any democracy, due process and the rule of law are essential. In my view, the former president's jailing was to prevent him from running for parliament, and I am hopeful that is he is well enough to continue his campaign."
15 May, 01:32 AMReplyDelete CommentLike3
Feinstein is my State senator, while in general I disagree with her on most everything, it is nice to know that she is on top of this (credit where due). I only hope that there is no backlash, as there were accusations of foreign spying mentioned in an earlier post by guestinvestor.
15 May, 02:42 AMReplyDelete CommentLike3
I am not sure if it's legal to view in the US (if not, I'll delete), but here is a link to classified cables from US Embassy in Ulaanbaatar (1990-2010)
Lots of fascinating and confidential info about Mongolian politics.
Of particular interest to this site is this cable about the then President Enkhbayar's position on Oyu Tolgoi deal http://bit.ly/KpBFOb
The most interesting stuff, like cables immediately after the July 1st, 2008 riots is unavailable, but this cable http://bit.ly/IVzzjY (especially the last sentence about hooligans and their political backers makes clear Ambassador Minton's view of who is to blame for riots)
15 May, 06:43 AMReplyDelete CommentLike3
Please don't view these links if it is not legal for you to do so.
For those who can read them, thanks to guestinvestor for posting them.
For those reading them, please keep in mind that -
Today's Mongolia's People's Party (MPP) is the original Mongolia People's Revolutionary Party (MPRP) which was the party that won that election (prior to changing its name).
The new MPRP was formed by Mr. Enkhbayar two years ago after the old MPRP changed its name to the MPP.
The Democrat Party was and is still the Democrat Party.
15 May, 08:20 AMReplyDelete CommentLike4
Wall Street Journal published an article titled "Mongolia Was Under Pressure Over Presidential Detention" which described in detail international pressure on President Elbegdorj over treatment of Mr. Enkhbayar.
Most interesting excerpt from the article
Led by his U.S- educated son Enkhbayar Batshugar, a banker, and the son's fiancée, Darima Tumur, the family played an important role drumming up international attention, dispatching a flurry of passionate emails about his health. They enlisted the help not only of politicians and the media, but of bankers and financiers who know their father, including a former top Goldman Sachs & Co. executive, John L. Thornton.
The family hired Tony Blair's attorney general, Peter Goldsmith, who made a brief visit to the country last week and pressed for intervention by human-rights groups including Amnesty International, which last week said the arrest appeared arbitrary.
Kurt Campbell, assistant U.S. Secretary of State for East Asian and Pacific Affairs, summoned Mongolia's ambassador to discuss the situation last week in Washington, and the U.S. Embassy in Ulan Batoralso pressed the issue, according to the State Department.
By late last week, President Elbegdorj indicated he was feeling the heat. He published a lengthy discussion of his own democratic values on his official website, declaring his commitment to justice and human rights, as well as eagerness to ensure Mr. Enkhbayar would be treated humanely in a transparent legal process.
15 May, 07:17 AMReplyDelete CommentLike6
Another discussion of foreign investment law in parliament. Times.mn reports following details.
MP Batj.Batbayar was unhappy: "Does our country need investment or not? Why are you trying to limit foreign investment? If it's true that we don't need money, then, please, "pozhaluysta", stop, limit everything! Mongolian economy grew strongly in the recent years, because of mining. We can't limit foreign investment in mining. Do we truly have no need for money, answer me!"
MP E.Munkh-Ochir, head of the Standing Committee on Security and foreign policy, answered that "National security is more important than money. That's why we need to discuss this law, understand? In the final reading, we'll exchange opinions and vote. Don't talk too much and make trouble"
MP R.Bud, head of Standing Committee on Economic affairs asked about 100 bln tugrug limit.
MP R.Gonchigdorj explained "In three strategic sectors, any company with even 1 per cent foreign state ownership needs a permission. For companies with private foreign investors, permission needed only if foreign investors account for more than 1/3rd of total investment by that company. If foreign ownership is less than 49% of the company, Government will give permission. If more than 49%, the Parliament will decide. 100 bln tugrugs was chosen, so that we wouldn't need to discuss every small takeover in the parliament.
Such regulation in these three sectors is crucially needed. In many foreign countries they have such limits. This doesn't mean that the state wants to own shares in these companies"
MP Batj.Batbayar cried "You are doing wrong thing! You are scaring away foreign investors", received no support from colleagues and, distressed, left the parliament chamber
15 May, 08:22 AMReplyDelete CommentLike3
Seems like it would be easier to make a law about neighboring countries ownership rights (instead of this arbitrary blanket law) if it was a national security issue.
Also... economic security is part of national security. Perhaps the MPs need to be reminded of the GDP in the 1990s, or the two bank failures in 2009 that still have not been resolved.
15 May, 08:32 AMReplyDelete CommentLike3
Unfortunately such law would contradict provisions of every Mongolian-Russian or Mongolian-Chinese treaty. Most favored nation status and all that...
15 May, 08:56 AMReplyDelete CommentLike3
Well... the truth is they are worried about 1 country and going to upset businessmen from all countries of the world.
This makes no sense.
Why no one has the political and business fortitude to organize a White Knight company to swoop in and offer a couple of pennies more for SouthGobi to end this stupidity is beyond me.
Someone in Mongolia's 10 wealthiest could do this *if * they wanted to.
15 May, 09:06 AMReplyDelete CommentLike5
The list Mongolia's 10 wealthiest in English
15 May, 09:58 AMReplyDelete CommentLike3
Useful, but rather scientific looking article on corruption and law in Mongolia.
Excerpt on [inexistent] "independence" of Mongolian judges
Additionally, though Mongolian judges do not lack formal authority or independence, only 19% of experts agreed that "court decisions are free from political influence from other branches of government or other public officials." 133
Experts interviewed widely shared the view that high- ranking government officials (particularly the President) exert considerable influence over Supreme Court and Constitutional Court decisions.134
Additionally, some experts were able, off the record, to identify specific instances of high-ranking government officials interfering directly with judges to arrange specific judicial outcomes. 135
Mostly disturbingly, however, there was near universal agreement among experts that court decisions are influenced by improper payments and judges' own personal interests. 136
135. Id. Judicial reform in Mongolia has done little to directly address this issue and certain features of the new judicial system seem to make it worse. Id. First, the President has disproportionate power over the appointment, removal, and promotion of judges, and the processes for each lack sufficient transparency. Id. Indeed, one expert expressed the opinion, backed by substantial evidence, that the disciplinary process for judges is more often used to punish judges who are too independent than to punish or remove judges who are unethical or incompetent. See id. at 233. Second, the budget of the judiciary, as well as judges' own salaries, are subject to decrease in any given year. Id. at 230. Thus, in the words of one Supreme Court judge, "the judicial budget depends on maintaining good relations with those in the legislative and executive branch who control budgetary decisions." Id. Third, the Judicial Code of Conduct does not prohibit judges from discussing pending or future litigation either before the court or in private with other public officials (or other non-parties) who are free to convey to judges their preferred outcomes. Id.
15 May, 10:13 AMReplyDelete CommentLike3
Interview with Batshugar, Enkhbayar's son (in Mongolian). http://bit.ly/JIFnQb
Interesting character, very well might run for parliament from MPRP.
Young, American-educated (Bentley University), professional investment banker, worked for JP Morgan in New York and London, apparently has amazing personal connections in the global political and economic elite.
Judging from the interview, sounds smart and certainly very well educated.
Would definitely be an improvement over the kind of MPs who are discussing foreign investment law now...
His Linkedin profile
16 May, 08:26 AMReplyDelete CommentLike3
Last two e-mail posts from Dale Choi at Frontier Securities in reverse.
Subject: FOREIGN INVESTMENT ABOVE 49% CAP INTO STRATEGIC ENTERPRISES MIGHT HAVE TO BE AUTHORIZED BY PARLIAMENT OF MONGOLIA
Date: Wed, 16 May 2012 19:59:28 +0800
According to official Website of Parliament of Mongolia (http://bit.ly/JIHTWH) final reading of the bill on regulation of foreign investment in enterprises in sectors of strategic significance will be held during united session of Parliament on Thursday, May 18,2012 and Friday, May 19,2012
According to unofficial copy of draft bill as of May 14,2012 submitted before final reading by Parliament Standing Committee on May 15,2012(http://bit.ly/JIHROg). According to leading Mongolian news portal news.mn on May 15,2012(http://bit.ly/Mk51Oz) during voting several formulations have been sorted.
· Foreign state owned legal entity or legal entity with foreign state owned stake, international organization, common interest party or related third party would have to get permission from Government of Mongolia to invest in a company operating in Mongolia
· Also it will have to get permission from Government of Mongolia to make certain agreements with enterprises operating in strategic sectors
· The law would apply to agreements done overseas if features regulated by law are contained
The law states
" foreign investment stake in an enterprise OPERATING in strategic sector can be up 49% and if it is above that it will be resolved by Parliament after Government introduces."(Capitaliz... by Frontier Securities) (in some unofficial versions in case investment amount is higher than 100 billion MNT)
Investment applies to purchase and transfer of shares foreign registered companies, subsidiaries and dependent companies of strategic enterprise
if Government views it necessary it can submit to Parliament and have resolved issue of enrolling sectors into strategically significant sectors at each instance
Following agreements are regulated by the bill:
agreements to get one third or more shares in shares of strategic enterprise. In this case, official tax according to taxation legislation of Mongolia will be levied on payment from one party to another and transferred to Mongolian budget.
agreements to appoint solely executive management of strategic enterprise, or majority of joint executive management, elect majority of board of directors
agreements to get capacity to veto decisions of management of strategic enterprises
agreement to implement direction and duties of management of strategic enterprise, determine decisions
agreements potentially establishing monopoly of buyer and seller in trading of Mongolian and international market of mining raw materials
agreements potentially directly or indirectly impacting market and price level of market of mining export products of Mongolia
agreements to establish on own or by common interest parties or related third parties agreements with effects of declining amount of shares in strategic enterprises
related party must request permission from authorized organization within 30 days of foreign investor agreeing to make the agreements mentioned
Reviewing applications to make agreement state administrative organization in charge of foreign investment will examine whether
· If features of any activity of an investors contradict national security policy of Mongolia
· Compliance of applicant to Mongolian laws and established business norms
· Whether feature is present of shutting down competition in certain sector and establishing monopoly
· If there is any grave impact on Mongolian budget revenues, other policies and activities
· If there is negative impact on activities within the specific sector
State organization will deliver proposal to Government whether it is possible or not to issue permission within 45 days of receiving the application
Government will decide whether permit or not within 45 days of receipt of proposal, applicant will be informed within 5 days of decision
Foreign investor must notify state administrative organization within 30 days of acquiring from five percent till one third of shares of strategic enterprise
Foreign investor shall deliver information to state organization within 180 days regarding owning five or more percent of strategic enterprise before this law becoming effective
Agreements breaching this law clause on agreement shall be invalid
Authorized organization shall stop activities and invalidate license of strategic enterprise breaching this law
This law shall be followed after its approval.
Frontier Securities would like to note that those from unofficial versions of the draft bill and the bill is being debated and there could be amendments.
From: Dale Choi, Frontier Securities [mailto:firstname.lastname@example.org]
Sent: Tuesday, May 15, 2012 10:33 PM
To: 'Dale Choi, Frontier Securities'
Subject: BILL TO CONTROL FOREIGN INVESTMENT INTO STRATEGIC ENTERPRISES MAKES IT TO THE FLOOR OF UNITED SESSION OF PARLIAMENT FOR FINAL READING
All Mongolian global equities
BILL TO CONTROL FOREIGN INVESTMENT INTO STRATEGIC ENTERPRISES MAKES IT TO THE FLOOR OF UNITED SESSION OF PARLIAMENT FOR FINAL READING
According to official website of Parliament of Mongolia on May 15,2012 (http://bit.ly/Mk51OD)
"Joint meeting of Parliament's Standing Committees on Security and Foreign Policy, Economics made final reading of bill on regulation for foreign investment into enterprises of strategic significance. Members have voted on proposals by bill taskforce and supported transferring the bill to floor of the united session for discussion and approval."
According to leading Mongolian news portal news.mn on May 15,2012(http://bit.ly/Mk51Oz) during voting several formulations have been sorted.
· There is no issue on private foreign investor company making investment into sectors of strategic significance. It can be 100 billion MNT, 200 billion MNT or even 500 billion MNT. Only investment will be capped and should not go above 49% stake. At this instance foreign investor company must approach Government and get a permission. If stake goes above 49% it should raise issue with Government and Government will introduce to Parliament and get a permission. If state owned foreign investor company wants to invest in the sectors it must get permission even if it is 1 %. This is to ensure national security and regulation to have foreign investment in proper amount.
· Bill taskforce head MP N. Enkhbold has said that bill has been significantly changed, strict clauses have been substantially softened and positions of both sides have been brought closer. In order to do so, personal meetings have been held with President Ts.Elbegdorj, Prime Minister S.Batbold, Mongolian Mining Association and many others, opinions exchanged and solutions reached.
Following is the link to draft bill before it went to final reading to standing committee today , however in Mongolian - http://bit.ly/JIHROg
• We expect the bill to be approved shortly
• Frontier Securities will comment on draft bill shortly
• We re-iterate our recommendation to investors to continue further diligently research implications of this bill for their investments
16 May, 08:37 AMReplyDelete CommentLike3
17 May, 09:09 AMReplyDelete CommentLike2
Looked at the link to the Mongolian draft, found an interesting clause:
Section 3.8. of proposed Law states that a company operating in strategic sector must give preference to the Mongolian-registered, Mongolian-national companies in procurement of any good, work or service and that the Government of Mongolia and that company shall have establish a binding agreement which regulates this issue.
I mean, it well could mean that a company would have to buy mining equipment from Mongolian importer instead of going straight to the manufacturer...
16 May, 09:02 AMReplyDelete CommentLike5
Would be particularly interesting in the mining equipment sector where I have heard complaints about the organization and efficiency of some Mongolian-run outfits while the best rated mining equipment and services company is foreign run.
16 May, 11:29 AMReplyDelete CommentLike6
This is very concerning to me as I have been planning on starting an underground mining equipment distribution company in Mongolia.
19 May, 11:44 AMReplyDelete CommentLike3
More arrests on the way.
Deputy director of Mineral Resource Authority Mr.M.Ariunbayar was arrested today in connection with what Mongolian media begins to call "SouthGobi resources case". Two more MRAM officials - chief of Law and Legislation division Mr. Ch.Altanbaatar and chief of Statistical division Mr. Kh.Batbaatar are under investigation. http://bit.ly/J0Y1BI
Unconfirmed rumour about MP S.Bayar (former Prime Minister and former head of MPRP/MPP). It's claimed that he was beaten by Canadian investors (apparently unhappy because of SouthGobi Resources investigation). Police arrested the perpetrators and released them after Mr.Bayar declined to bring charges. Mr. Bayar is currently reported to be in the US for treatment of his injuries.
Proposal to suspend three MPs because of ongoing corruption investigation by ACA will be discussed in the parliament next week. Two of them are MP Ts.Batbayar and MP Narankhuu as reported earlier, identity of the third MP is not disclosed (could it be Mr. S.Bayar?)
The anti-MPP bias in investigations by ACA is noticed by the public and there are calls for investigations against Democratic Party officials to restore public trust in neutrality and objectivity of ACA. The person most often mentioned in this regard is Governor of the Umnugovi (South Gobi) province (and local Democratic Party boss) Mr.B.Badraa . There is apparently an unending stream of complaints against him, most often mentioning his corrupt dealings with the SouthGobi Resources corporation.
Trial of Mr. Ts.Munkhbayar, a prominent environmental activist accused of shooting at the mining equipment of Centerra Gold company in 2009 begins today.
His case will be closely watched by Mongolian public. If convicted, he may be regarded as a political prisoner persecuted by corrupt courts in payroll of foreign companies.
17 May, 01:05 AMReplyDelete CommentLike5
" foreign investment stake in an enterprise OPERATING in strategic sector can be up 49% and if it is above that it will be resolved by Parliament after Government introduces."(Capitaliz... by Frontier Securities) (in some unofficial versions in case investment amount is higher than 100 billion MNT)
Any idea how they will resolve that. Force sale of stocks, buy the stocks, issue more stock........Anyone have any speculative ideas?
17 May, 10:49 AMReplyDelete CommentLike3
Everything is arbitrary now... unless someone comes to their senses and vetoes this abomination. National Security Council or President can act like they have a clue.
In 2006, the Government of Mongolia created a 68% Windfall Profit Tax that caused a lot of mining investment to dry up. They reversed that in January 2010. The investment thesis had been that the government had learned from its mistake and knew that mining investment money was needed for the economy; and that a stable laissez-fair mining investment environment was best for the mining companies and the country.
The idea that the government learned anything from the 2006 mishap is now out the window. Waiting to see how this develops, but I'm not pleased.
17 May, 11:37 AMReplyDelete CommentLike5
If things go to shit it will be a great buying opportunity but its the waiting 4 years for a reversal that worries me.
Wonder if the flip flop will occure sooner this time? Months not years.
17 May, 04:46 PMReplyDelete CommentLike5
If the National Security Council flips it - it will be sooner.
If the enforcement is negligible - it will be sooner.
If the election at the end of June changes things - it will be sooner.
If that and other such things don't change the dynamics this year, there's always the Presidential election next summer.
Timeline from 2006 to January 2010 was a turnaround of under three years.
The shame of this whole thing is that so much of this would not happen if there were not an election coming up.
Notably, while most of my holdings outside of Mongolia have taken a beating, my main Mongolian Stock Exchange holdings have been stable. Either the MSE is slow on the uptake, or locals have an idea of what this law really means that we don't.
17 May, 08:16 PMReplyDelete CommentLike3
Jon, that's because you own a lot of gold and gold has been taking a tremendous beating lately.
The locals know that ultimately it is about what happens after the elections. 1) Will the MPP join forces with the DP to completely dominate the MPRP? That would be the best case scenario. 2) Will the DP join forces with the MPRP and take majority of the seats over the MPP? That would be the worst case scenario.
I hope #2 does not happen and that the political leaders understand there is so much wealth and improvement for all of Mongolia in this upcoming decade if the government just sit on the sidelines and collect massive amounts of taxes and raise sovereign funds (not cash handouts) for its citizens.
19 May, 12:04 PMReplyDelete CommentLike4
I think another DP-MPP coalition is the most likely outcome.
However, this will just increase political risks. Mongolians are fed up with DP-MPP coalitions (they were continually in power in one form or another since 2004).
I am not sure Mongolians will tolerate four more years of this. Riots or full-blown Arab spring like revolution is what happens when deeply unpopular politicians just keep staying in power for years and years on....
19 May, 11:18 PMReplyDelete CommentLike4
Yeah, I'm putting my other plans on hold and just focusing on "Business Consulting" in Mongolia, HK, and mainland China until this mess get resolved and stabilizes.
What I have learned is that almost all plans get delayed in Mongolia. Mongolia has a limited window of opportunity to capitalize on the commodities boom and China's insatiable desire for energy and raw materials over this decade. If Mongolia misses this opportunity, Canada and Australia are more than capable of supplying this demand.
19 May, 11:53 AMReplyDelete CommentLike4
From Dale Choi at Frontier Securities
All Mongolian global equities and foreign owned assets related to minerals, finance and banking, media and communications sectors in Mongolia with investment amount higher than 75 million USD
BILL ON REGULATION OF FOREIGN INVESTMENT IN STRATEGIC ENTERPRISES IS APPROVED BY PARLIAMENT OF MONGOLIA
According to official website of Parliament of Mongolia on May 17,2012 (http://bit.ly/Jm5s4F)
United session of Parliament made final reading of bill on regulation of foreign investment in enterprises of strategic significance and accompanying bills and approved them.
Members have supported that
· Minerals, finance and banking, media and communications are included in sectors of strategic significance.
· Foreign investors stake in enterprises in those sectors is to be 49 per cent and in case it is to go above and investment amount is higher than 100 billion MNT(approximately 75 million USD - Frontier Securities) issue of giving permission is to be resolved by Parliament by submission of Government
• As we expected, the bill is approved speedily.
• In their investment analysis, actions and decisions, among other considerations we recommend investors to account for issue of Parliament's expected authority to decide whether to allow foreign investment stake above 49% based on criteria that possibly include
o If features of any activity of investors contradict national security policy of Mongolia
o Compliance of applicant to Mongolian laws and established business norms
o Whether feature is present of shutting down competition in certain sector and establishing monopoly
o If there is any grave impact on Mongolian budget revenues, other policies and activities
o If there is negative impact on activities within the specific sector
Recommendation for Southgobi (TSX: SGX, 1878 HK) /Winsway Coking Coal (1733 HK) / Aluminum Corporation of China Limited(2600 HK)
• Copy of the approved bill is unavailable to us, however, we believe that the clause related to the proportional takeover, namely
o Foreign state owned legal entity or legal entity with foreign state owned stake, international organization, common interest party or related third party would have to get permission from Government of Mongolia to invest in a company operating in Mongolia
o Also it will have to get permission from Government of Mongolia to make certain agreements with enterprises operating in strategic sectors
o The law would apply to agreements done overseas if features regulated by law are contained
o Investment applies to purchase and transfer of shares foreign registered companies, subsidiaries and dependent companies of strategic enterprise
o Following agreements are regulated by the bill:
o agreements to get one third or more shares in shares of strategic enterprise. In this case, official tax according to taxation legislation of Mongolia will be levied on payment from one party to another and transferred to Mongolian budget.
o agreements to appoint solely executive management of strategic enterprise, or majority of joint executive management, elect majority of board of directors
o agreements to get capacity to veto decisions of management of strategic enterprises
o agreement to implement direction and duties of management of strategic enterprise, determine decisions
o agreements potentially establishing monopoly of buyer and seller in trading of Mongolian and international market of mining raw materials
o agreements potentially directly or indirectly impacting market and price level of market of mining export products of Mongolia
o agreements to establish on own or by common interest parties or related third parties agreements with effects of declining amount of shares in strategic enterprises
o related party must request permission from authorized organization within 30 days of foreign investor agreeing to make the agreements mentioned
are likely to be in the approved bill. Therefore,
• In their investment analysis, action and decisions regarding proportional takeover of Southgobi/Chalco among other considerations we recommend investors to account for issue of Parliament's expected authority to decide whether to allow foreign investment to proceed based on possible criteria that include
o If features of any activity of an investors contradict national security policy of Mongolia
o Compliance of applicant to Mongolian laws and established business norms
o Whether feature is present of shutting down competition in certain sector and establishing monopoly
o If there is any grave impact on Mongolian budget revenues, other policies and activities
o If there is negative impact on activities within the specific sector
After certain procedural formalities, unless there is a veto from President of Mongolia, bill becomes a law approximately 10 days after publication in State Information Digest.
17 May, 11:29 AMReplyDelete CommentLike5
I would like to note that they have done this days before the deadline for citizens to sell their pre-IPO Erdenes Tavan Tolgoi shares. The government has succeeded in having so many distractions go on during this time that the public has assuredly never received adequate education about what to do with these shares or their meaning... which also ensures too many people will sell their shares which will then be passed on by the government to Mongolia's richest.
Dutch Disease is firmly in play.
17 May, 11:39 AMReplyDelete CommentLike6
I have serious doubts that Mongolian government can afford to pay promised amount for the Erdenes Tavan Tolgoi shares.
18 May, 08:31 AMReplyDelete CommentLike4
Not if FDI dries up because they keep mucking about with their foreign investors.
18 May, 05:41 PMReplyDelete CommentLike2
Letter from Enkhbayar's wife to the British MP Andrew Rosindell, Chairman of the All-Party Parliamentary Group on Mongolia, dated May 10, in English and Mongolian
On April 13, 2012, my husband, the former President of Mongolia, Nambaryn Enkhbayar, was arrested in a brutal manner at home and detained to one of the most notorious prisons in Mongolia.
Since that time he has been treated with utter disregard not only for a former president but also simply for a human being. My children and I were prevented from visiting him, talking to him by phone, or even receiving letters from him. He has been interrogated without the presence of his lawyer and tortured in the most inhumane ways. The law-enforcement authorities detaining him even threatened to hurt our 10-year-old daughter, forced him to walk among naked inmates, insulted him in the most terrible ways. They broke his dignity so much with their illegal and inhumane treatment that my husband had no choice but to go on a dry hunger strike last Friday, May 4.
18 May, 08:40 AMReplyDelete CommentLike5
Anti-Corruption Authority of Mongolia wants to interrogate Mr. Robert Friedland, former CEO of Ivanhoe Mines in connection with SouthGobi Resources case.
However, it's not clear how they plan to accomplish that since Mr.Friedland is not in Mongolia and very likely will never return (if he has any sense)
18 May, 08:43 AMReplyDelete CommentLike6
Friedland's fairly astute. I would guess he will never set foot on Mongolian soil again for the remainder of his life.
Shame. He did a lot for the country, and all the folks at the top want to do is go after him to cover their own tracks.
18 May, 05:33 PMReplyDelete CommentLike4
A calmer view of the outcome at MINEWEB, the Canadian analytical group for the mining industry worlwide:
"Mongolia's patliament passed a controversial law aimed at capping foreign ownership in "startegic" indutries like mining on Thursday, but investors expressed relief that the legislation was weaker than first anticipated. The baill has been watered down considerably since first drafted......The law stipulates that foreign investors are allowed to own a maximum of 49 percent of companies involved in the mining, finance, media and telecommunications sectors before being subject to scrutiny by a government panel. But it only applies to deals valued above $75 million, or ones involving state-owned companies like Chalco."
Aspire Mining's Director David Paull told Reuters "The only impact for us is in terms of adding a layer of time in the approvals process", adding that the new law would would provide more certainty for investors in Mongolian resouirces, according to MINEWEB.
Reuters (and Mineweb) observed: "After the bill's first draft appeared, Mongolia's private sector banded together to lobby parliament, critisizing the failure to define key terms like 'minerals' and 'finance' sectors and its catch-all provisions about what was 'strategic'."
"The foreign investment (NYSE:FI) Law bill caused an overwhelming coming together of the business community including key Mongolian entities affested as well", Reuters quoted Jim Dwyer, executive director of the business council of Mongolia, as saying. "I have never seen anything like it over the last 10 years."
My own (albeit early) conclusions: Short-term
Positive, first in righting the ship and correcting the course;
second, allowing resource nationalism to be vetted;
third, in getting private sector actors who had not worked together before to join forces.
Longer-term: The jury is still out until the elections and post-election manifestations. Joe Harned
18 May, 04:02 PMReplyDelete CommentLike5
Aspire's Director is an interesting perspective. Among the news I've barely skimmed the last few days, I also saw that Matthew Wood (Chairman of Hunnu, Voyager, Haranga, Wolf) added shares of Haranga.
18 May, 05:31 PMReplyDelete CommentLike2
From Dale Choi at Frontier Securities. (on inflation coming from money distributed for ETT shares.)
CASH INJECTION EQUIVALENT TO A QUARTER OF CURRENCY IN CIRCULATION IS TO HIT THE ECONOMY NEXT WEEK
ALL MNT DENOMINATED ASSETS
According to Government of Mongolia on May 16, 2012 (http://bit.ly/LkWwDM) ,
Finance Minister D.Khayankhyarvaa has informed that 1 million MNT will be started to be issued starting next week in Ulaanbaatar to those senior and developmentally challenged citizens who have applied for cash. In doing so, money for April and May will be issued together.
According to Ministry of Social protection and Labor of Mongolia, as of May 15,2012, 272 582 senior and developmentally challenged citizens have applied to receive one million MNT bounty and share in cash. According to interview of Finance Minister to major Mongolian daily "Zuuny Medee", remaining 90% of senior and developmentally challenged citizens preferred to keep the shares.
Further, according to Government , also, as of May 15,2012, 738 917 citizens expressed desire to sell the Erdenes Tavantolgoi shares to Government. 97% of those or 717 748 citizens applied to sell shares and get cash, 21 thousand citizens in form of payment for residence, 294 citizens in form of education and health payment. According to reports, those monies are to be paid next year in three installments.
Further, according to Government, Cabinet meeting will finalize issue of nominal price of Erdenes Tavantolgoi company shares next week. After nominal price will be decided the shares will be started to be sold to national enterprises since June 1,2012.
Also next week 50 billion MNT will be transferred to State Bank to enroll citizens to 6% residential loans and 50 billion MNT to Development Bank to support SME.Finance Minister also informed that funding necessary for vertical axis road works and rail road construction has been fully resolved.
According to interview to major Mongolian daily "Udriin Sonin" on May 15,2012 Finance Minister said
that it has been planned to pay 330 thousand MNT per senior and developmentally challenged citizen per month in April, May and June. However, funds were not accumulated because of "funding shortcoming difficulty". 344 billion MNT accounted in the budget for payments are estimated to come in from dividends of Erdenet copper mine and prepayments to Erdenes MGL company. "We have requested those companies to accumulate monies in the budget."
In interview to major Mongolian daily " Mongolyn Unen" on May 14,2012 Finance Minister said that funding from Erdenes Tavantolgoi and Erdenet mines will come in on May 15,2012.
"In anycase, 334 billion MNT will be transferred before July 1,2012."
"Dividing money or not, it will impact inflation."
• Negative for MNT denominated assets. We expect continued significant inflationary pressure. According to Bank of Mongolia,
MoM YTD YOY
Ulaanbaatar 0.2 8.4 17.8
State 0.5 8.2 16
According to National Statistics Office of Mongolia, "the increase in national consumer price index compared to the previous month was mainly due to 0.7 percent increase in food and non-alcoholic beverages and 2.0 percent in clothing, footwear and cloth".
· Further, according to the Statistics, "at the end of April 2012, currency issued in circulation reached 708.9 bln.tog, increased by 60.4 bln.tog or 9.3 percent compared to the previous month, and increased by 80.3 bln.tog or 12.8 percent compared to same period of the previous year."
· Payments next week are estimated to be 660, 000MNT for 272 582 senior and developmentally challenged citizens or approximately 180 billion MNT(equivalent to approximately 136 million USD). That would be equivalent to a quarter of currency in circulation and 2.82 % of money supply.
• We recommend investors especially those based in Mongolia to account for significant inflation already and further continued substantial inflationary pressure.
· Inflation is to impact exchange rate to certain degree and vice versa.
Dale Choi | Chief Investment Strategist | Frontier Securities | #705, Blue Sky Tower, Peace Avenue 17, 1st khoroo, Sukhbaatar district, Ulaanbaatar, Mongolia| Office: +976 7011999 | Mobile: +976.99103371 | Email: email@example.com
18 May, 05:38 PMReplyDelete CommentLike5
Mongolian resource nationalism at work.
Mongolian officials are asking a U.S. auction house to halt the Sunday sale of a Tyrannosaurus skeleton, suggesting it was illegally smuggled from their nation.
All your Tyrannosaurus belong to us!
18 May, 09:39 PMReplyDelete CommentLike4
Probably the strongest condemnation of Mr.Elbegdorj in mainstream western media I've ever seen. Wall Street Journal writes an opinion piece and comes within an inch of calling Mr.Elbegdorj a dictator
All this strongly suggests an effort by Mr. Elbegdorj to use raw government coercion to head off a legitimate political challenger-in other words, to criminalize democratic differences. A similar drama is also unfolding in the Ukraine, where former Prime Minister Yulia Tymoshenko has been jailed on dubious corruption charges by the government of Viktor Yanukovych, who will also be showing up in Chicago this weekend.
So why should you care about political skullduggery in places like Ulan Bator or Kiev? Partly because rulers like Mr. Elbegdorj and Mr. Yanukovych are counting on Western indifference to consolidate their power and pay no price for abusing it. Democratic setbacks in both countries also form part of a broader trend in the retreat of freedom in the post-Communist sphere, notably in Russia.
Messrs. Elbegdorj and Yanukovych both have pretensions of being modern democratic leaders. Perhaps Mr. Obama can have a hot mic moment to demand they act accordingly, or else to not expect future invitations to NATO summits.
18 May, 10:48 PMReplyDelete CommentLike5
Voldemort, er, Obama is in Putin's pocket. Don't expect much except heartbreak from that bully pulpit.
18 May, 11:16 PMReplyDelete CommentLike2
Mr.Enkhbayar's trial scheduled for next Thursday, May 24th. Presumably, this would give enough time to convict Mr.Enkhbayar and hence legally remove him from MPRP party list.
Technically this would be a rather difficult to arrange, since Mr.Enkhbayar's health is still in critical condition and he remains in the Emergency Care Unit of the hospital recovering after a 10 day dry hunger strike.
They couldn't possibly plan to forcibly drag him out of hospital emergency room and bring to the court?
In other news, the prison authorities released a heavily edited tape of Mr.Enkhbayar's while in captivity, where he appears to cursing in rather a strong language at policemen and doctors.
I am not a lawyer, but this action seems to violate several Mongolian laws on protection of privacy, as well as international human rights conventions to which Mongolia is a party.
18 May, 11:26 PMReplyDelete CommentLike4
I can't blame him under the circumstances for cussing out the guards and medics. I can cuss in 6 different languages with some fluency, and they would have had to hire a whole tribe of translators if they wanted to figure out what I was calling them.
18 May, 11:45 PMReplyDelete CommentLike5
Just read a story in Mongolian tabloid which claims that Canadian investors unhappy with anti-corruption investigations and new foreign investment law brought gangsters to the country in order to pressure and beat Mongolian MPs. One MP is undergoing treatment overseas, because of beating by Canadian mafia (presumably this refers to MP S.Bayar which was reported above)
Has anyone heard of Canadian mafia before?
19 May, 01:33 AMReplyDelete CommentLike3
Has anyone heard of Canadian mafia before?
Are they called Canucks and do they carry hockey sticks?
21 May, 10:28 AMReplyDelete CommentLike4
This is surreal humor. What's next, Americans in league with martians to steal Mongolian coal?
21 May, 10:45 AMReplyDelete CommentLike5
I think a collaborative best-seller is available if Jon and Guest get together.
Movie rights to follow. Producers need start researching casting possibilities right now.
21 May, 11:12 AMReplyDelete CommentLike3
I wanna carry a hocky stick, can I, huh, can I.
21 May, 11:55 AMReplyDelete CommentLike2
You have to say "Eh" a lot.
21 May, 12:09 PMReplyDelete CommentLike3
Can I, can I Eh?
21 May, 01:21 PMReplyDelete CommentLike3
Why does your hockey stick have trigger guard and sights?
Why a silver sheen to it?
Is that some new material approved by the NHL?
I noticed your "EH" had a Chitown accent.
21 May, 01:37 PMReplyDelete CommentLike3
I dont actually own a hocky stick so I had to improvise and the wife said I could not use the broom. She was quite adamant about that in fact, I could see it in her eyes before she threatened me.
Guess I will have to work on the accent. See why I am practicing now.
21 May, 04:09 PMReplyDelete CommentLike3
Thanks for all the updates guestinvestor.
I'm surprised there are not more people protesting yet (lots of things to be irritated about). Seems like they will protest after the election... which will be twice as nuts because it won't change anything then. However, that's been what's happened in the past.
The notion of trying Munkhbayar and Enkhbayar in the same week is not lost on me for absurdity.
This is getting closer to a Kafka novel than governance.
19 May, 11:55 AMReplyDelete CommentLike3
Foreign spy rings, Canadian gangsters, dinosaur extradition....
I wonder what comes next, probably something even more absurd. Count on it!
19 May, 12:19 PMReplyDelete CommentLike3
Maybe because ordinary people are confused. All my sympathy was with the jailed man a week ago but with the recent footage of him swearing like a trooper, calling names people around him (prison guards, nurses etc.) I am not so sure anymore. Besides, his son seemed to be lying about not being able to see his father. All this may very well be the attempts of some media to discredit him, but... Besides, there was an article published recently by Reuters "Resource-rich Mongolia plays populist card in run-up to polls". The article is citing Dale Choi from Frontier Securities, which calls Enkhbayar the father figure for resource nationalism with his party trying to capitalize on that and maximize their chances to get more MPs in the Parliament". According to the article it's Enkhbayar who wants to renegotiate the deal with Ivanhoe. No doubt that his arrest was politically motivated but as the things unfold it seems to me that neither side is too scrupulous in their attempt to get to the power. Of course, it's just my impression...
19 May, 02:07 PMReplyDelete CommentLike3
Greetings and weclome szamijan,
you cite an "article it's Enkhbayar who wants to renegotiate the deal with Ivanhoe"
Some of the investigations seem to be trying to suggest that the original deal for Ivanhoe to buy Oyu Tolgoi and other properties under Enkhbayar's watch involved foul play. It seems like all the investigation of Enkhbayar is trying to conflate with investigations of South Gobi and Ivanhoe to question the legality of Ivanhoe's original contracts and possibly attempt to void them. That's not Enkhbayar... that's the ACA and whoever is pulling their strings.
19 May, 06:37 PMReplyDelete CommentLike3
Oyu Tolgoi deal remains highly unpopular in Mongolia. It was signed at a rather bad time for Mongolian economy and its terms are not really favorable for Mongolia.
The deal was approved by parliament and both parties, but the Democrats managed to place all the blame at the senior partner in coalition - MPP.
MPP of course can not admit that Oyu Tolgoi deal was wrong. The Democrats can and do, but I really have doubts that they would dare to demand renegotiation. Mongolian economy will not survive confrontation with Western powers on this issue.
Any period of isolation from the West will leave Mongolia to the mercy of our neighbors - China and Russia and this is the last thing any Mongolian politician wants.
Enkhbayar was against Oyu Tolgoi deal in the first place, so he is not admitting anything. His stance is popular and will gain him more votes, but I think he realizes that this is unrealistic, even if he could hope to form government alone after elections (at least this seems very doubtful). The best he can do is to join coalition with MPP or Democrats after which things will go on as usual (though if the first coalition comes, we are in for some "interesting times")
19 May, 11:09 PMReplyDelete CommentLike4
The Honorable Carlos Cortez, a Dallas, Texas district court judge, granted a "Temporary Restraining Order" (TRO), after an application by Houston attorney Robert Painter, legal counsel for His Excellency Elbegdorj Tsakhia, President of Mongolia.
The TRO prevents Dallas-based Heritage Auctions, Inc. from selling a rare national treasure that paleontology and dinosaur experts believe may have been illegally removed from Mongolia.
The emergency TRO was issued Saturday morning to stop a New York City auction tomorrow of the dinosaur remains to a private buyer in New York City. At issue is an extremely rare near-complete skeleton of a Tyrannosaurus bataar, a cousin of the North American T-Rex.
I never suspected that the reach and legal sophistication of Mongolian government extends this far...
I wonder if they could have stopped Chalco takeover bid in a similar manner?
20 May, 12:31 AMReplyDelete CommentLike3
Moody's cuts the ratings of four Mongolia banks to B1
May 21 (Reuters) - Golomt Bank, Khan Bank, Trade and Development Bank of Mongolia, and XacBank
* Moody's downgrades the ratings of four Mongolia banks to B1 from Ba3
Well, it starts looking like 2008-2009 all over again....
21 May, 07:25 AMReplyDelete CommentLike3
This is basically just a change in Moody's ratings policy - they have decided that they will not allow banks to have long term foreign currency ratings above their host country, which makes sense. All they are saying is that no matter how well run these banks are, the Mongolian government has the power to act stupid and bury them.
Anyway, Moody's ratings were above those from Fitch and S&P, so they are really just bringing their ratings in line with the consensus.
21 May, 10:34 PMReplyDelete CommentLike4
Thanks Mr. Bennett
(who is another voice from Mongolia)
21 May, 10:36 PMReplyDelete CommentLike3
[quoting from Mogi's CPS Newswire]
Jason Peterson, CPS Securities Director, comments on the recently passed law on Foreign Investment Regulation
Jason Peterson: Mongolia and Investments in Mongolia on the ASX
May 21 --
Please see the clarification regarding the recent speculation in the market regarding the foreign ownership of assets within Mongolia.
We see this as positive, that the country is taking these initiatives and providing clarification towards foreign investment in the country, however the law still needs to be applied in a sensible manner.
Summarised (from late last week):
The Parliament of Mongolia last night approved a law that regulates foreign direct investment into a number of key sectors of strategic importance which includes mineral resources. Unless vetoed by the President (which is unlikely), the Law will have immediate effect.
This law does not limit foreign direct investment. It does set up a process of review and approvals for significant investments into those industries of strategic importance to the country. The approvals regime is based on the following levels of investment:
• All foreign direct investments in excess of 5% in an entity operating in a sector of strategic importance must register with the Foreign Investment Agency of Mongolia ("FIA").
• Foreign direct investments in excess of 33% in an entity operating in a sector of strategic importance must receive Government of Mongolia approval [Comment: FIRB over 15% is required in Australia]
• Foreign direct investments in excess of 49% in an entity operating in a sector of strategic importance and in excess of 100bn MNT (approximately AUD$75m), requires approval from the Mongolian Parliament. [Comment: FIRB over 15% is required in Australia]
• Foreign direct investments made by a company with state ownership will require Government of Mongolia approval.
This law does not apply retrospectively.
The enacting of this foreign investment law now provides legislative certainty surrounding future foreign direct investments into Mongolia and in particular into its rapidly growing resources industry. The regime is not dissimilar to regimes enacted in other resource rich jurisdictions such as Australia and Canada.
The country will still be viewed negatively from an international investment perspective until the elections are held on June 28th this year. Once the elections are held, we find out who will govern the country over the next four years, we expect, from July the 1st, it will be business as usual in Mongolia and investment stability should return.
On the back of this, Mongolian stocks listed on the ASX will probably be a high risk speculative buy over the next two to three weeks with potential substantial returns to be made as the status quo is returned. In addition, the next few weeks could see substantial tax loss selling within the sector, leading to additional price pressure within the sector.
Our preferred stocks within the Mongolian sector are Haranga Resources (ASX:HAR) and Voyager Resources (ASX: VOR) both of which have come under heavy selling in recent weeks, as well as the recently listed Eumeralla resources (ASX:EUM) as it further develops it Tin and Tungsten projects.
Further information on these stocks can be provided upon request.
If you have any questions, please do not hesitate to ask.
Disclosure: I hold shares and options in HAR, VOR and EUM, as well as other Mongolian based stocks. [Haranga, Voyager, Eumeralla]
Springer's disclosure: I have an account with Jason Peterson
21 May, 09:27 AMReplyDelete CommentLike3
My comment would be for potential investors to substitute the term "if" for "as" in this message. "As" implies certainty...
21 May, 11:07 AMReplyDelete CommentLike2
From Dale Choi; Frontier Securities:
All Mongolian global equities
FOREIGN INVESTMENT REGULATION LAW TASKFORCE HEAD: NOT RETROSPECTIVE, VERY FLEXIBLE LAW, GOLDEN MIDDLE BETWEEN INTERESTS OF MONGOLIA AND INVESTORS
According to major Mongolian daily " Zuuny Medee" on May 21,2012 Head of taskforce on law on regulation of foreign investment into enterprises of strategic significance, Deputy Chairman of Parliament of Mongolia N. Enkhbold said in the interview:
· In some respects, foreign investors have concerns and doubts that changing old legislation would put them into difficult situation. However, this law is a golden middle between interests of Mongolia and investors, for mutual benefit of cooperation.
· Law is to issue permission in connection with national needs and requirements, not to stop or limit foreign investment
· It seems that foreigners are seeing it as limiting foreign investment , increasing administrative steps and stages. We will not refuse this to happen to certain degree. However, our goals are not money, not investment. Where should be our national interests, how is it to be connected with national security policy, this idea is reflected in the law
· We have made best effort to reflect great many opinions of foreign investors, embassies representatives and domestic organizations that they have submitted to us. If one compares initial bill and approved law one would see that they have been reflected
· If law is followed in content I would think that there would be no negative effect on the foreign investment
· Law is not retrospective. Agreements done by companies with foreign investment according to law are in force and will go on.
· There are two separate issues reflected in the law. State owned foreign investment will have to get permission from Government. This is difficult issue. If foreign state owned companies start operating it becomes more of a political issue rather than economical one. Conflict of opinions and interests arise. Any country is cautious of that.
· As for private foreign investment into strategic sectors, if investment below one third it will go by business rules. If it is between one third and 49 per cent Government has to be informed and permission obtained. If agreement has conflict it will be said that it is not possible. If investment is above 49 per cent and 100 billion MNT Parliament will decide by introduction of Government. To clarify, if it is above 49 per cent and below 100 billion MNT it is not necessary to be required to discussed by Parliament, Government can decide. On the other hand if it is above 100 billion MNT but below 49% it is also not necessary to be required to be discussed by Parliament
· This means it is very flexible law
• Not retrospective feature of the law has positive impact on valuation of all current global Mongolian equities as it their increases value because now, after the law, getting same investment stakes would be subject to the law.
• In their investment analysis, actions and decisions, among other considerations we recommend investors to account for not retrospective feature of the law
Recommendation for Southgobi (TSX: SGX, 1878 HK) /Winsway Coking Coal (1733 HK) / Aluminum Corporation of China Limited(2600 HK)
• our views remain unchanged since our last update note of May 17,2012
Dale Choi | Chief Investment Strategist | Frontier Securities | #705, Blue Sky Tower, Peace Avenue 17, 1st khoroo, Sukhbaatar district, Ulaanbaatar, Mongolia| Office: +976 7011999 | Mobile: +976.99103371 | Email: firstname.lastname@example.org
21 May, 04:03 PMReplyDelete CommentLike3
Very illustrative case showing true face of Mongolian judicial system.
Judge of the Tuv (Central) province D.Oyunjargal was found guilty of
1) taking bribes amounting to 2.9 mln tugrugs (about 2200 USD) for granting bail to 4 men accused of group robbery.
2) taking bribes amounting to 10 mln tugrugs (about 7500 USD) for favorable verdict from defendant's wife.
3) taking bribes amounting to 3.5 mln tugrugs (about 2500 USD) in form of loan from defendant's sister for favorable verdict.
She was convicted by Khan-Uul District court to two years imprisonment, but instead of serving a prison sentence, she was freed under the Amnesty Law of 2010.
22 May, 05:58 AMReplyDelete CommentLike3
I apologize for lack of posts and articles of late. I am slammed with personal obligations. If I was being paid to do this, I'd have to rebalance... but no one wants to pay me... so I'm doing what I need to get done for my wife who is 7 1/2 months pregnant.
A reminder of the link to news sources -> http://tinyurl.com/7lt...
From Dale Choi, at Frontier Securities.
All Mongolian global equities
Following are links to photos of hard copies of the unofficial translation of the text of the adopted law on regulation of foreign investment into enterprises of strategic significance (some wording changes expected for paragraphs in black) provided by Ministry of Foreign Affairs and Trade of Mongolia.
There is an opinion that implementation of the law in reality would be of critical importance as the law itself could have reasonable impact to foreign investment or could alternately significantly negatively impact foreign investment.
Southgobi (TSX: SGX, 1878 HK) /Winsway Coking Coal (1733 HK) / Aluminum Corporation of China Limited(2600 HK)
In an interview to leading Mongolian news portal news.mn on May 22,2012 (http://bit.ly/K95nUT) Head of Fiscal Policy Department of Finance Ministry of Mongolia, Chairman of Board of Directors of Development Bank of Mongolia B.Batjargal clarified regarding how agreement between SouthGobi Sands and Chalco will be resolved
· In case of sale of controlling stake of SouthGobi Sands to Chalco permission is to be obtained from Government of Mongolia. Law instructs so.
· If stake is sold without permission of Government of Mongolia mineral license of SouthGobi will be confiscated. This applies not only to SouthGobi. All majority stakes in strategic enterprises for sale to foreign investors will have to get permission from Government
· 600 million USD raised from bonds of Development Bank is not spent on anything. Projects to finance have not been submitted. If Ministry of Roads and Transportation delivers rail project to us, we are ready to finance even today. Indeed issue of building railroad has not yet has been resolved
· Instead of keeping money without doing anything we will fund 50 billion MNT financing for 6% residential financing, in coming days we will give money to State Bank and Capitron banks. Soon citizens will start getting 6% loans.
ALL MNT DENOMINATED ASSETS
According to leading Mongolian news portal news.mn on May 22,2012http://bit.ly/K862Yj ) starting tomorrow, Wednesday, May 23,2012, 350 thousand MNT from 1 million MNT cash transfer will be started to be issued to senior and developmentally challenged citizens who have applied for it.
Dale Choi | Chief Investment Strategist | Frontier Securities | #705, Blue Sky Tower, Peace Avenue 17, 1st khoroo, Sukhbaatar district, Ulaanbaatar, Mongolia| Office: +976 7011999 | Mobile: +976.99103371 | Email: email@example.com
22 May, 01:08 PMReplyDelete CommentLike6
I note that the article 4.8. stipulating preference to be given to Mongolian entities in all procurement by strategic companies is still in place.
23 May, 01:06 AMReplyDelete CommentLike2
In regards to the 6% mortgages offered by the government, I heard that this fund would pay for up to 50% of the cost of a new apartment (along with a host of other restrictions). The lowest overall mortgage rate that I have heard will be offered is more like 12%. Can anyone out there verify this rumor?
22 May, 11:48 PMReplyDelete CommentLike3
The 6% mortgage is available to a limited group of first-time homebuyers. For regular homebuyers, I haven't even heard of a mortgage as low as 12%. The mortgage culture in Mongolia is limited to-date. This will change, but slowly at first... rapidly at some point.
Remember that the gov't interest rate is over 13% right now as well.
23 May, 12:47 AMReplyDelete CommentLike3
Sorry, I should have been more clear. I heard that the government (really Development Bank of Mongolia) 6% rate would only cover 50% of the mortgage for the limited group of first-time homebuyers. The other 50% of the mortgage would be put up by a PFI (Capitron and State Banks are the PFI's involved in the program).
What I heard is that the final rate to clients (50% @ 6% per annum, 50% at the bank rate) would be--as a lowest value--something like 12% per annum.
I wanted to check to see if anyone else has heard this as well. News releases focus on the 6% government rate but have no mention of whether the DBM would cover all of individual mortgages or not.
23 May, 04:28 AMReplyDelete CommentLike3
I believe that.
23 May, 09:55 AMReplyDelete CommentLike1
The dog that didn't bark...
Mongolian President Mr.Ts.Elbegdorj did not attend Chicago NATO Summit on Sunday as expected. http://bit.ly/JBmkVo
No reason is given, but I am tempted to suggest that he took a hint from Wall Street Journal editorial I referenced above - dictators are not welcome....
23 May, 01:03 AMReplyDelete CommentLike3
Quote of the week: "Our lawyers aren't aware of any treaties between Mongolia and the United States that would prohibit the importation of dinosaurs."
23 May, 01:05 AMReplyDelete CommentLike3
300 mln USD Hong Kong IPO by Mongolian iron ore miner Altain Khuder announced. IPO would value the company at 1 bln USD.
An interesting legal analysis of Mongolia's new strategic foreign investment law. Particularly notable is this analysis
"Article 3.8 of the SFI Law states that the Government will determine regulations which give preference to domestic business entities registered in Mongolia for the procurement of any goods and services to the strategic sectors. This provision appears to have application beyond transactions involving foreign investment, as it applies to all BESIs, whether or not they have been subject to a foreign investment event. In the Plenary Session, the definition of "domestic entity" for the purposes of clause 3.8 was extensively debated and was ultimately diluted to entities with greater than 50 per cent Mongolian ownership."
23 May, 01:25 AMReplyDelete CommentLike4
The law seems to indicate that FeOre Limited will not receive any particular governmental preferential treatment then. FeOre is another new iron ore miner operating in Mongolia.
23 May, 05:16 PMReplyDelete CommentLike2
I think I noted it above, but FWIW, Haranga (another iron ore company) Chairman Matthew Wood bought more shares of Haranga a few days ago.
23 May, 05:27 PMReplyDelete CommentLike2
From Lee Cashell of APIP
May 22nd 2012
Dear Asia Pacific Securities Client,
I am writing to inform you of our great frustration with the recent decision taken by the Financial Regulatory
Committee ("FRC") to revoke Asia Pacific Securities LLC's ("APS") licence for activities relating to dealing and
broking in the Mongolian securities market, and to suspend APS' licence for underwriting activities.
The FRC has alleged that APS was engaged in insider trading and artificially supported Asia Pacific Properties JSC's
share price. It is our opinion that the FRC has formed its view without properly considering many aspects of the
case. We dispute the allegation and consequently it is our intention to take all appropriate actions to vigorously
defend our interests.
Please be assured that it is of paramount importance to us that all of our clients' assets remain secure and that
arrangements are rapidly implemented to ensure access to them. We will provide you with details on this very
shortly and will also send you any updates regarding the progress with our licenses.
Chairman and CEO, Asia Pacific Securities
23 May, 09:55 AMReplyDelete CommentLike3
I find this case a bit odd and interesting. Mr. Cashell will have no issue with any 51% law for multiple reasons:
- his company is mostly non-mining
- his wife is Mongolian, and an executive ranking only second to her husband at APIP
23 May, 05:29 PMReplyDelete CommentLike1
New developments in the story of beating of the former prime minister of Mongolia, MP S.Bayar by Canadian gangsters/investors.
It is now claimed that the beating took place two weeks ago in Green House compound on Zaisan Hill where Mr.Bayar lives.
According to the Ardyn Erkh newspaper, Mr.S.Bayar was beaten by a certain Canadian citizen named Alex, who is a senior manager at the SouthGobi Sands company.
I checked the website of SouthGobi Resources and found only one person named Alex among the senior management - Mr. Alexander Molyneux, CEO and President of the SouthGobi Resources Ltd.
I am shocked...
24 May, 01:30 AMReplyDelete CommentLike4
24 May, 05:37 AMReplyDelete CommentLike3
Its a plot to give the government something to couterweight their own rough methods. Its the Mongolian version of establishing a sufficiently low common ground, ie, what they did to Enkhbayar.
Now they have an equal weight club to use against the "enemy", which is a convenient foreign "oppressor".
This sort of thing is both very old, and very new...
24 May, 07:40 AMReplyDelete CommentLike5
SouthGobi Resources fired almost all of its Mongolian staff a few months ago.
No wonder that Mongolian public hates this company and is ready to believe anything.
Months and months of continuing bad press coverage, never seen anything like that.
24 May, 07:08 PMReplyDelete CommentLike4
Very well written article on Tavan Tolgoi in Hong Kong newspaper Asia Times titled "Mongolian coal's long road to market". This newspaper is known for refreshing lack of political correctness and telling things as they are:
The chief executive officer of Erdennes TT, B Enebish, glumly explained the current state of play to the UB Post:
Since the IPO release has been postponed we see a definite need to find funding from a different source. We are discussing this with a number of investors, seeking to solve it through the sale of coal, presale of coal, and various loans.
Sale and pre-sale of coal most likely means deals with China, probably on concessionary terms.
Chalco, the same company that was subjected to the public crotch-kicking over its purchase of South Gobi, made a $250 million pre-payment to state-run Erdennes Tavan Tolgoi in 2011 for coking coal. At the price Chalco is paying-reportedly US$70/ton, a far cry from the $200+/ton for Australian coking coal - that is over three years' worth of exports. 
This cash is by no means a bonanza for Erdennes TT, or its investors.
Erdennes TT is obligated to help fund Mongolia's Human Development Fund.
The Human Development Fund is funded by revenues from resource exploitation along the lines of the Alaska Permanent Fund and the Norwegian sovereign wealth fund. In other words, it is a non-renewable resource fund, albeit with Mongolian characteristics - ie it has become something of a piggy bank for politicians to curry favor with the electorate while slighting the restructuring of the economy against the day, admittedly far in the future, when all the ores are gone.
The Chalco payment to Erdennes TT amounts to about half of the value of the $500 to $600 million social welfare payout (in cash and services) that Mongolian politicians have promised to make from the nation's Human Development Fund to Mongolia's 3.1 million citizens in the runup to the June 2012 parliamentary election.
In effect, then, Chalco is getting a bargain on coking coal while effectively bankrolling the Mongolian election-year giveaway meant to demonstrate the advantages of resource nationalism. 
Further complicating the Tavan Tolgoi situation is the expectation that the Mongolian People's Revolutionary Party of Nambaryn Enkhbayar, the hunger-striking ex-president, will do very well in the upcoming elections. He is running on the platform that Mongolia should keep all of Tavan Tolgoi to itself.
Counter-intuitively, not opening Tavan Tolgoi to foreign investment would probably strengthen the position of China. It appears that only China would possess the ability to continue stumping up hundreds of millions of dollars in pre-payments for coking coal without holding equity in the project or sharing the risk with other investors or stockholders.
Winsway is a Hong Kong trading company staffed to a considerable degree by ex-Minmetals personnel. Minmetals is the minerals and metals trading arm of the Chinese government foreign trade apparatus, in charge of moving material, not making it.
Winsway's main business is not investing in coal mines, despite its name. Its job is running the non-stop parade of 40-ton trucks that carry coal from Mongolia across the dusty roads of the Gobi Desert to China.
Chalco's $308 million investment in Winsway looks like a sizable hedge against the possibility that the Tavan Tolgoi investment/IPO project will continue to be dogged by political gridlock, and Mongolia will continue to hemorrhage coal across the border to China at concessional rates in order to finance its national ambitions.
24 May, 07:50 AMReplyDelete CommentLike5
General Intelligence Agency of Mongolia issued a statement denying that a beating of MP S.Bayar took place. They say that Mr. Bayar as a former Prime Minister has state bodyguards and they wouldn't let anyone beat him...
Anti-Corruption Authority of Mongolia arrested Mr. Ts.Anandbazar, a prominent businessman and owner of "Sod Mongol Group". The arrest was made just hours after a congress of the ruling MPP party announced final list of candidates for the June election which includes Mr. Anandbazar.
Anti-Corruption Authority of Mongolia investigates Mr. S.Enkhbat, former head of the Nuclear Energy Authority. He is accused of illegally granting 21 uranium exploration licenses to private companies.
25 May, 09:35 AMReplyDelete CommentLike4
SouthGobi Resources held a press conference yesterday (perhaps only for Mongolian press, since I don't see anything on English news)
They denied numerous rumors about the company circulating in the Mongolian press.
They denied that their licenses are suspended. They have received no official letter from Mineral Resource Authority on this issue.
They said that coal exports from Ovoot Tolgoi mine proceed normally.
They said that deal between Ivanhoe Mines and Chalco is on hold, waiting for decision of Mongolian authorities.
They denied reports in Mongolian press that company holds over 30 licenses. They only have 3 exploitation and 8 exploration licenses.
They denied that the company is being investigated by Anti-Corruption Authority. They said that ACA is investigating certain Mineral Resource Authority officials suspected of corruption and that ACA has requested information from over 40 mining companies. SouthGobi Resources gave requested information and cooperated with investigation.
They said "We believe that we are witnesses, not suspects in this case"
Finally they denied rumors that CEO of SouthGobi Resources Mr. Alexander Molyneux has beaten MP S.Bayar. Mr. Alexander Molyneux was in Hong Kong during the past month.
25 May, 09:51 AMReplyDelete CommentLike5
Mongolia's General Election Commission refused to register Mr.Enkhbayar as a candidate for election. Several other leading MPRP candidates (including Mr. Batshugar, Enkhbayar' son) also weren't registered on dubious pretexts.
It appears increasingly likely that the coming elections on June 28th will not be recognized as free or fair by international community.
Mongolia is sliding even faster to international pariah state status
7 Jun, 01:00 AMReplyDelete CommentLike4
Sukhbaatar District Court convicted today a police general Mr. Ch.Amarbold and three other police colonels to 9 and 8 years of imprisonment for "omission to exercise powers by a official person, causing a large damage to the state".
During the trial there were numerous glaring violations of law (defendants did not have lawyers present at the trial, for example), moreover, the court and persecution failed to connect defendants to exact crime committed (4 people were shot by unknown persons, suspected to be policemen in riots after elections of 2008. The killers were not found and were not proven to have been policemen, so instead the authorities decided to blame everything on the then police leadership, who didn't shoot anybody and it was not proven that they ordered to shoot anyone).
So, from now on, Mongolia has four new political prisoners.
7 Jun, 01:15 AMReplyDelete CommentLike4
Financial Times reports:
the General Elections Committee failed to accept Mr Enkhbayar's candidacy before a crucial June 6 registration deadline, effectively barring him from participating. The committee had questioned his qualifications and said in a statement on Thursday that he was unfit to be a candidate...
The elections committee's decision was met with anger by the former president's family, who say that since he has not been convicted of any crime he still has the right to run for office under Mongolian law.
"It is ridiculous," said Batshugar Enkhbayar, the son of the former president. "What the election committee has been doing is outside of the law and their jurisdiction ... the election committee is creating new laws for itself which is an illegal act."
Mr Enkhbayar's party had been on track to win enough seats to be the third-largest party in parliament, a linchpin position because the two largest parties will probably have to ally with smaller parties to form a majority after the election, according to political analysts...
Mr Enkhbayar plans to appeal the election committee's decision by bringing a lawsuit to the constitutional court, his son said.
7 Jun, 01:26 AMReplyDelete CommentLike4
After failing to attend Chicago NATO Summit, Mongolian president Mr. Ts.Elbegdorj found more suitable company
Here he is, at Beijing Shanghai Security Organization Summit (between Ahmadinejad and Putin)
7 Jun, 06:10 AMReplyDelete CommentLike5
I did not see Putin in the picture next to Arm-pit-in-a-jar. Did you mean Karzai. Is that him between and behind them.
7 Jun, 06:57 AMReplyDelete CommentLike3
Oh, looked him up on wikipedia and found him. Looks like his coat is a bit tight. Needs a better tailor.
7 Jun, 07:00 AMReplyDelete CommentLike3
My apologies for being away.
I'm just turning on my computer for the first time in two weeks. I've been busy moving houses with my wife - and it became a bit more work than expected. As she's due with our first child in the first week of July (and planning to give birth at home), getting our move settled is a priority.
Not much looks to have changed in Mongolia or elsewhere in the last two weeks. Thanks to GuestInvestor for noting that Enkhbayar and his son cannot run in the elections (not a surprise, but unfortunate for Mongolia's democracy).
I have had time to think about things while packing and unpacking boxes, lifting furniture hither and yon, and driving a moving truck the last couple of weeks.
My simple-minded thoughts:
1) The Anti-Corruption Agency has become a tool of corruption. It cannot arrest members of parliament or high-ranking cabinet members. Meanwhile, all the competition for parliamentary seats not in office is eligible for arrest (example:http://bit.ly/K0v2lA) (I think this is the same person now blamed for the beating previously attributed to the CEO of SouthGobi Resources)
2) The elite pay lip service to sharing the wealth by issuing shares of Erdenes Tavan Tolgoi to all citizens, and then willfully steal the shares back from them on the cheap when possible; they have no intent of sharing the wealth or helping the common citizenry of Mongolia.
3) The general policies of cash payoffs (such as the monthly payments to all citizens and the government payouts for shares Erdenes Tavan Tolgoi) will lead to much higher inflation.
4) Wages across the country cannot and will not keep up with inflation in the manner that mining jobs will. The general populace will become further impoverished by the mining boom if current policies continue beyond the election (as they seem they will almost assuredly with the ACA snuffing out all competition).
5) We are looking at a country - that despite public statements by members of the government otherwise - is not only heading toward Dutch Disease, but embracing Dutch Disease with greedy lust.
6) As objective investors, the question is if investing in such a country will be a good investment. I think there are some good investments and values at this time.
7) As human beings, the question is if investing in such a country feels proper.
8) There is a question of if things can be changed and if the government can redirect its energies; but I think the corporate elite and political elite are too intertwined and too ignorant of how idiotic their behavior is. In the long-term, they would be wealthier if they shared more wealth with their common citizens. However, like all other countries that experience Dutch Disease, the majority of the elite are too short-sighted to see it.
9) I am taking some more time to think over the questions of number 6 & 7.
Will catch up more in time.
7 Jun, 09:45 AMReplyDelete CommentLike5
Being a military brat and knowing how much work is involved in moving, I know you're glad it's done, except fro some tail-end unpacking.
Good to hear you're about done and back in action.
7 Jun, 10:49 AMReplyDelete CommentLike1
I can relate to taking time away from the internet in favor of catching up on personal projects. It has to happen sometimes.
7 Jun, 11:25 AMReplyDelete CommentLike2
Jon, question about your avitar. Is that some strange Mongolian form or pole vaulting with a bull assist or was that fool actually beating the bull with that stick in his hands.
7 Jun, 09:48 AMReplyDelete CommentLike2
It is actually a photo I took in Pamplona.
I went to see the running of the bulls one day a few years ago. I checked the program on-line before we went, and there was listed a free buffet in the stadium at 11 am (as later became apparent, this was badly translated from Spanish to English). My wife, my in-laws and I went to check it out and discovered it was an early day practice run with the bulls that just ran in for that night - for free. We got to see all the things they do with the bull during a bull fight minus the killing part. Thereafter, they brought on this group of acrobatic clown-types who did various tricks with the bull. The photo is one I took that day of a guy pole vaulting the bull.
Long story short, it seems like a good mantra for investing: play with the bulls, avoid the horns.
7 Jun, 10:04 AMReplyDelete CommentLike3
Hey, welcome back, Jon!
Hope your move went well and the new nest is cozy.
The story about the Pamplona bulls is a good one. I too was curious about it. I like that mantra.
7 Jun, 10:32 AMReplyDelete CommentLike3
Thank you sir!
Moving isn't done yet (but getting down to a manageable list of tasks); soon as we finish off a few odds and ends (at least a week's worth), we need to start figuring out what baby stuff we need (preferably before his arrival).
This was an abnormal move. Two houses into one. We put things from our house in Virginia into this house, and then took 250 square feet of storage (things from my parents who passed away 14 years ago) and put them into the house too.
And, of course, the contractor fixing up our house that promised it would be done by the end of April is not done yet.
Internet guy installing things now. Civilization returns.
7 Jun, 10:51 AMReplyDelete CommentLike3
I know the feeling! When my wife and I bought our first house, we moved in as she was seven months pregnant. Exciting and exhausting and life-changing!
Best of luck to both of you, Jon.
7 Jun, 10:59 AMReplyDelete CommentLike3
And, of course, the contractor fixing up our house that promised it would be done by the end of April is not done yet.
With few jobs around the labor may be milking this job as long as possible.
7 Jun, 11:22 AMReplyDelete CommentLike3
News re IVN:
Ganaxi Small Cap movers reports on SA that Singapore's sovereign wealth fund Temasek Holdings has bought up 5.5% of the outstanding shares of IVN. This is a new position for the $185 billion investment company, which indicated it now owns 40.9 million shares of IVN in an SEC Form SC 13G/A filing.
10 Jun, 01:05 PMReplyDelete CommentLike4
For my money, quite literally, this is the first encouraging, transparent, objective, highly respected third party assessment of the future prospects of IVN that I have seen in the last year. JH
10 Jun, 01:18 PMReplyDelete CommentLike4
Oyu Tolgoi prospects are good in the long run (ie, in 30 to 60 years of exploitation).
Investors like Temasek could certainly afford to take a long-term view, but others could see a lot of troubles in more nearer future
11 Jun, 06:23 AMReplyDelete CommentLike3
Thanks Joseph for those notes on IVN.
IVN seems to be a good value here... but its a slog to that value being realized. It seems more clear to me that there is future value for the company than for the shareholders... though nice to see a big shareholder jumping aboard.
11 Jun, 09:40 AMReplyDelete CommentLike3
Several articles in the Forbes by Douglas Schoen on lack of democracy in Mongolia.
First one titled "Mongolia's Slide Toward Autocracy Should Set Off Alarm Bells For West" claims that
"With each day, democracy becomes further at risk in Mongolia. If Enkhbayar and his son are not permitted to stand in the upcoming elections, it is clear that the era of democratic politics in Mongolia will be over.
This is a risk that the West can ill-afford. Mongolia's strategic position between Russia and China makes it of paramount importance that it remains a democracy. If Mongolia backslides, its rich mining deposits and vast mineral wealth will be up for grabs in the region.
The international democratic community must band together in support of Enkhbayar and his son. With each new development, Mongolia slips further towards autocracy. As the West has done for other countries, it is important that the U.S. and other leading democracies cooperate to send a message to the Mongolian government that anything but free and fair elections will not be tolerated by the international community."
Two more articles look in detail at new statements by President Elbegdorj on his human rights record.
"The international coverage of former president Nambar Enkhbayar's treatment by the current government and the General Election Committee of Mongolia has clearly rattled President Elbegdorj. He has issued a series of comments defending the government's actions and reaffirming not only the charges logged against Enkhbayar, but also imploring Mongolia's democratic allies to recognize the he is supporting due process of law in Mongolia.
If President Elbegdorj is so concerned about his, and Mongolia's, reputation as a free, democratic society then it is in his best interest to let Enkhbayar and his son stand in the upcoming elections. While he is correct that corruption plagues far too many of the world's developing countries, he has inaccurately placed the blame on Enkhbayar.
It is clear that international support for Enkhbayar and, most importantly, for democracy in Mongolia is affecting the administration. It is therefore crucial that we continue in this effort and work to ensure that Enkhbayar is allowed to participate in the parliamentary elections on June 28th."
"President Elbegdorj's statement makes much of the alleged independence of the Electoral Committee that rejected both Enkhbayar and his son's candidacy. It does not mention that the cause of the decision of the Electoral Committee was pressure from the Prosecutor, who is a government appointee, and by the Court itself which is charged with trying Enkhbayar. The final decision came as a result of "clarifications" from both these two bodies - a clear breach of the principle of separation of powers and the presumption of innocence.
it is quite clear that Enkhbayar's corruption trial and subsequent ban from standing in the parliamentary election is politically motivated. As the most significant political challenge to President Elbegdorj, he has every reason to want to keep Enkhbayar in the courtroom and off the ballot."
11 Jun, 06:20 AMReplyDelete CommentLike4
Thanks GuestInvestor. Can't say I disagree much. Albeit, its just a corrupt democracy... and if anyone can show me a democracy that's not corrupt, I'd be interested to hear about it.
11 Jun, 09:39 AMReplyDelete CommentLike2
"The international democratic community must band together in support of Enkhbayar and his son."
Gotta love western journalism - Touting that democracy is so great and foolproof.
12 Jun, 03:52 AMReplyDelete CommentLike2
"Western journalism" touting democracy. Preposterous. Are you sure it was not, just possibly, crony democracy they were touting. /s
12 Jun, 09:20 AMReplyDelete CommentLike2
from Dale Choi at Frontier Securities -
380 THOUSAND USD HAS BEEN RAISED FROM SALES OF ETT SHARES TO NATIONAL ENTERPRISES FROM AT 0.70USD PER SHARE, FUNDS TO BE RAISED FROM ENTERPRISES ARE ESTIMATED AT 7.8 MILLION USD
According to official Website of Government of Mongolia on June 13,2012 (http://bit.ly/MIwe9v), Cabinet meeting discussed and approved " Regulations on activities of sales of shares of Erdenes Tavantolgoi company shares to national enterprises, have citizens own shares and purchase of citizens' shares by Government". The regulations also regulate the situation if senior citizens and developmentally challenged citizens who are receiving 1 million MNT in cash decide to return 1 million MNT and get shares back.
Minister of Social Protection has informed that June 25,2012 will be deadline to sort out list of senior and developmentally challenged citizens who have decided to cancel cashing the shares and get shares and the list will be forwarded to Central Depositary and Settlements and Clearings Center for Securities. As of May 29,2012 nationwide 1 532 853 citizens have applied to sell the shares to the Government. However, not a few citizens have been too late to make applications due to not much understanding of shares, not enough information and short time.
Also citizens who have felt benefits of shares have started applying to cancel applications to sell the shares and to get shares back. Also since funds are reflected in the budget for senior and developmentally challenged citizens and student their applications are continued to be received.
Furthermore, according to leading Mongolian news portal news.mn on May 13,2012 (http://bit.ly/Lb8cbI) Finance Minister also clarified to media
· About 160 thousand students have received one million MNT in cash. Together with previous 500,000 MNT students in total received 1,5 million MNT. Senior and developmentally challenged citizens are receiving in total 330 billion MNT. 330 thousand MNT is being issued. Remainder of 670 thousand MNT will be issued to them within Q2 of this year and work of distributing to them one million MNT will be finished. According to research by Ministry of Social Protection and Welfare about 270 thousand senior and developmentally challenged citizens have applied to receive cash and remainder of 90 thousand have applied to get shares.
· Those citizens who have received cash can deposit money back in certain account and can get the shares
· July 1,2012 will be deadline for orders from national enterprises to get shares of ETT. As of today 500 million MNT(379 thousand USD using Bank of Mongolia today's reference rate of 1320MNT - Frontier Securities) have been accumulated from over 10 enterprises. National Tax Agency has informed that there is research that shares orders shortly will accumulate 10,3 billion MNT (7.8 million USD using Bank of Mongolia today's reference rate of 1320MNT - Frontier Securities)
· Citizens cannot trade shares ETT shares between them. This is closed by law. If citizens want to sell, they can sell only to Government
14 Jun, 07:56 AMReplyDelete CommentLike4
Mongolia's population is 2.8 million people.
Thus, more than half the people have subscribed to sell out their IPO shares to the government who in turn will sell the shares on the cheap to local corporations.
Government is selling shares to corporations at (according to my math) the same exact price as they are paying citizens. The rich will get richer with the IPO, the poor get cash to create inflation to make their lives more difficult while buying goods from the rich. This is a very efficient lose-lose situation for the general population.
More importantly as objective investors, this is a win-lose for the country's elite (they get to consolidate IPO shares (more money) but they get it at the price of inflation (devalued currency) and irreparably pushing their general population further down below them (the history of developing countries says this doesn't work out well); and quite simply, this is not very good for foreign investors.
With only 2.8 million people, the opportunity to evade Dutch Disease and raise the economic level of average citizen while the rich get richer is palpable. It *could* be done, but those at the top would need to care a smidgeon more than they do, and not just pay lip service to caring about the health of the country's economy for all of its citizens.
14 Jun, 08:15 AMReplyDelete CommentLike7
Jon, you're likely to be the most astute individual on Mongolia who is not living in Mongolia.
14 Jun, 12:08 PMReplyDelete CommentLike3
it's sad how short sighted policy is around the globe.
14 Jun, 11:58 PMReplyDelete CommentLike4
To my knowledge, that seems to be everywhere except Singapore and maybe China at the moment.
19 Jun, 10:24 PMReplyDelete CommentLike2
China has a history of long range planing (in spite of some truly terrifying social products), please feel free to increase my understanding of Singapore with links. I like good news :)
20 Jun, 09:33 AMReplyDelete CommentLike0
Pre-election survey by Sant Maral Foundation http://bit.ly/NfbAhy
It appears than MPP is doing badly and MPRP is very close to overtaking it, becoming in effect the second largest party after Democratic Party (which is clearly going to win the election, but still will be short of majority needed to form a government)
One consequence of such MPP electoral defeat could be a MPRP/MPP coalition, in which MPRP would be a senior partner (certainly nominating Enkhbayar for Prime Minister!)
21 Jun, 10:24 PMReplyDelete CommentLike3
My understanding is that the prime minister has to be a sitting MP. Since Enkhbayar is not/can't run for election, wouldn't it have to be somebody else from his party? Please correct me if I am wrong.
My impression from talking to my Mongolian colleagues is that a DP/MPP coalition would be more likely. Do you disagree?
I personally like the DP/Elbegdorj, and think that a DP/MPP coalition with the MPP as a junior partner is the best possible outcome for Mongolia.
This economist article seems to get most things right to me -http://econ.st/MOcKzK
21 Jun, 11:58 PMReplyDelete CommentLike3
I think that's a tradition, not a legal requirement
Anyway, this is irrelevant, because decision to bar Enkhbayar from participating in election was clearly illegal and he does not consider it valid. I suppose he will just claim his seat at parliament and there will be another constitutional headache for authorities.
On coalition chances - it's quite likely that MPP will get much better deal from coalition with MPRP than with DP, especially if democrats will be just a few seats from majority.
On Elbegdorj. You need to re-read this thread. The man is an autocrat, a dictator in the making, very dangerous for fragile Mongolian democracy. I am amazed how able he is at putting entire courts and law enforcement system at his disposal, skillfully guiding them against his political enemies. What makes it more remarkable is that he managed to organize a mini-purge with quite limited constitutional powers of a Mongolian president. I don't want to find out what he will be able to accomplish with both parliament and government at his side.
22 Jun, 06:23 AMReplyDelete CommentLike5
Excellent video on Ulaanbaatar's infrastructure challenges from the team at M.A.D. Mongolia http://bit.ly/LHxzO5
22 Jun, 10:38 PMReplyDelete CommentLike3
Mongolia's history for the last century was characterized by periods of intense elite infighting which generally ended with emergence of a strong autocratic leader. Examples are Choibalsan in 1940s, Tsedenbal in 1960-70s, Batmunkh in 1980s.
Transition to democracy changed only rules, but not the pattern. In 1992, after just two years, first democratic strong leader has emerged, Prime Minister Jasrai. He was elderly, humble and well respected, being dictatorial wasn't in his nature apparently. Anyway, his rule ended with Democratic victory in 1996, after which we had four years of intense and scary elite infighting (mostly within Democratic coalition itself, with depressingly bad results - witness assassination of Zorig in 1998 when he was on the brink of taking Prime Minister's post from Elbegdorj)
MPRP victory in 2000 produced another autocratic leader, Mr. Enkhbayar. He was modern and progressive, but all that power tends to corrupt, by the end of his prime-ministership, something like a personality cult began developing. But it ended soon enough with disputed elections of 2004, post-election riots, gridlock and MPRP-DP coalition with Elbedgorj as a Prime Minister.
So another period of elite infighting began. Even election of Enkhbayar as a President in 2005 did not change situation. He was not a strong President at first, because he had to coexist with Democratic Prime Minister, but even after Elbegdorj's resignation he had to still deal with Parliament where Democrats had a half of seats.
Situation soon changed with emergence of S.Bayar as a strong leader when he first took chairmanship of MPRP and post of Prime Minister.
Mr.Bayar used to be an Ambassador to Russia and he quickly began forming what looked like an eerie imitation of Putin's authoritarian regime. Co-existence of President Enkhbayar and Prime Minister Bayar was very uneasy and by the end they hated each other.
By 2008-2009, Bayar has managed to undermine completely Enkhbayar's formerly dominant position and became a real strongman of Mongolia. But then, situation changed again. Elbegdorj won presidential elections of 2009 (with some speculating that Mr. Bayar helped him to get rid of Enkhbayar) and then Bayar got sick and resigned from both Prime Minister's post and from MPP chairmanship.
And From then on, another period of elite infighting has began.
Amazingly, Democratic President Elbegdorj, despite being strongly disadvantaged (coexisting with MPP Prime Minister Batbold and having lost DP chairmanship to Mr. Altankhuyag) managed very quickly to establish political control over General Prosecutor's office, Anti-Corruption Authority and Supreme Court and courts system in general.
Weak Prime Minister Batbold and divided MPP leadership were unable to put an effective resistance and allowed President Elbegdorj to organize on a frightening scale a purge of MPP and MPRP leadership under pretext of fighting corruption.
So this is where situation stands now. We are witnessing emergence of another autocratic strong leader in Mongolia, this time someone who intends (and loves it!) to imprison his political opponents and re-establish a one-party state.
Victory of Democratic Party will give him an opportunity to do exactly that.
I even know what his first move will be. Anti-Corruption Authority will open investigation of some newly elected MPs from MPP, Democratic-dominated parliament will vote to strip them of parliamentary immunity and subservient courts will quickly mete out harsh sentences. Repeat the process as many times as needed until there is no opposition left.
Only strong external pressure or a violent domestic uprising could stop him at that point.
23 Jun, 05:43 AMReplyDelete CommentLike5
Thank you for giving us your view in such detail. I'll definitely be discussing this with my Mongolian friends and colleagues for their views.
I understand why you think Elbegdorj is such a dangerous person, but don't you think that Enkhbayar would do exactly the same thing if he were able?
Some of my Mongolian friends seems to think the Elbegdorj was involved in the assassination of Zorig. Do you agree? Or who do you think was responsible? It certainly seems like Elbegdorj and Khurts are very close now, and like Khurts was sent to abduct and then kill Zorig's assassin to cover up the involvement of some people in the Mongolian government.
Anyway, thank you for sharing your views with us. They are very interesting.
24 Jun, 04:16 AMReplyDelete CommentLike3
Thank you for the history lesson GI.
I think during the last few months, one of the strangest parts has been the relative silence and acquiescence of the MPP. I have expected some counter move led by Batbold that has never come.
It feels like the MPP has no leadership or rudder to steer their ship. It will be interesting to see how the election plays out Thursday.
24 Jun, 01:07 PMReplyDelete CommentLike2
I posted a comment on why I think Mongolian Mining Corporation is in the vicinity of a strong buy here: http://bit.ly/PW9mqz
24 Jun, 01:07 PMReplyDelete CommentLike2
Enkhbayar was much more powerful than Elbegdorj now when he was Prime Minister in 2000-2004. He did nothing of the sort back then.
Granted, he is now angry and bitter and probably wants to settle scores with his enemies, but still... He was an intellectual, you know, before he went into politics. His idea of having a good time is translating Shakespeare and Tibetan Buddhist philosophy books. Hardly an evil dictator type.
Regarding Zorig, I think the simplest explanation is probably true.
Prime Minister Elbegdorj was sacked by Parliament for corrupt and illegal privatization of a state owned Reconstruction Bank to the private Golomt Bank (owned in fact by prominent members of Democratic party). The Democrats then couldn't agree for several months who should be his replacement and Elbegdorj remained an acting Prime Minister.
Finally, Zorig, a respected member of pro-democracy movement of 1990 has accepted an offer to lead a government. And the next night he was mysteriously killed.
Here is what I think has happened. Some members of Democratic party went to talk with Zorig, had an argument (presumably over the issue of who should be a Prime Minister), it turned ugly and Zorig was lethally stabbed*.
To cover-up the murder they came up with an assassination theory. Zorig's wife agreed and told police an improbable story of a group of assassins who tied her up in the bathroom and killed her husband in the next room.
Police investigation quickly found holes in her story, she was briefly arrested as a possible accomplice to murder. Moreover, police found some clothing items on the murder scene which happened to belong to Mr. Bat-Uul, a prominent Democratic party member. But he of course had an alibi and claimed that he used to visit Zorig a lot and just forgot his hat there.
Then acting Prime Minister Elbegdorj (who stayed in his post for two more months) began interfering with police investigation, accusing police leadership of a plot against Democrats.
Investigators were sacked or changed. And several of them soon died in mysterious circumstances**....
The crime is still not solved. And in 2009, new President Elbegdorj awarded Mr. Bat-Uul with the title of Hero of Mongolia - a really surprising move since if he did any heroic deeds, they remained secret.
*I know, politicians in the West don't usually behave like this, so this might seem puzzling. But Mongolian politicians, especially Democrats of the 1990s are of a rather rough street background. Mr.Bat-Uul, for example, has a reputation of something of a semi-gangster (he is still sometimes refered to as Dochin Myangatyn atmaan - gang chief from "40,000" district)
** Enkhbat, a rather sinister Mongolian gangster kidnapped by Mongolian intelligence team from France in 2003 was accused of assassinating Zorig in 1998. Likely he was used in post-assassination cover-up
24 Jun, 02:16 PMReplyDelete CommentLike3
24 Jun, 02:26 PMReplyDelete CommentLike2
On Khurts and Elbegdorj. I don't want to speculate on nature of their alliance, but can offer a general observation.
According to some well-informed Mongolian sources (Khukh Tolbo newspaper, for example) Mongolian Democratic movement of 1989 was originally created by the ministry of public security. The plan was apparently to use them in internal struggle for power within the party leadership.
This conspiracy theory looks very lose to truth in light of the Soviet and Eastern European experience. And this probably can explain some very strange connections between prominent Democrats and state security/intelligence officers like this Khurts/Elbegdorj alliance.
24 Jun, 03:06 PMReplyDelete CommentLike3
four posts from Dale Choi at Frontier Securites coming
with thanks to Mercy Jimenez, Latest on Southgobi:
"SouthGobi Resources Ltd. said Tuesday that output at its main Ovoot Tolgoi mine will be curtailed by the end of this quarter. It cited a weak market and regulatory issues.
SouthGobi said previously that Mongolian authorities asked for production to be suspended while they reviewed a plan by a Chinese government-owned company to acquire a majority stake in SouthGobi."
26 Jun, 09:35 AMReplyDelete CommentLike3
post 1 of 4 from Dale Choi at Frontier Securities (scroll to bottom for PDF version as this one has a graph embedded in the original e-mail)
Subject: ELECTION OUTLOOK: ODDS ARE IN DP'S FAVOR YET RESOURCE NATIONALISM IS TO RISE WHICHEVER PARTY WINS
Date: Thu, 21 Jun 2012 13:41:45 +0800
¨ Difference between the parties: To begin with, MPP is much more old and experienced political party than DP as it has been a ruling party for almost 60 years during socialist period of Mongolia. Moreover, it can said that by definition DP is more liberal than MPP and is associated with Democratic Revolution in Mongolia. However, both parties have substantially reformed and matured over last 20 years of Mongolia's transition to democracy and even were partners in Coalition Government of 2008-2012. According to DP's presentation (http://bit.ly/LyOWE3) , it is right center party characterized by low taxes and support for production and industry aiming to creating comfortable middle class in Mongolia, while it could be implied that it views MPP as left center party characterized by higher taxes and more attention to social welfare.
¨ Both DP and MPP have resource nationalism oriented items in their election agenda. We believe that resource nationalism is broadly bi-partisan and is to increase whichever party wins.
¨ According to polls, interrelated trio of unemployment, standard of living\ poverty\ income and price increase\ Inflation continues to be major problems in Mongolia. Yet there is consistent lack of confidence by voters in ability of Government to solve these major problems for them.
¨ Despite high growth rate, Mongolians appear to be unimpressed by it and view that growth alone is not enough-the government has to action to reduce unemployment
¨ Not surprisingly, majority of Mongolians are consistently not happy with income difference between rich and poor, another crucial question for voters.
¨ Latest polls could be interpreted that voters are not happy at the status quo and that is reflected in advance of DP ratings especially in Ulaanbaatar.
¨ Polls could be interpreted that there is substantial advance in DP ratings, from nationwide 19.2% in 2010 to nationwide 28.6% in 2012. Number of critically important undecided voters has substantially declined from 32.2% in 2010 to 23.3% in 2012. Similarly, no answer voters have declined substantially from 19.2% in 2010 to 9.2% in 2012. MPP remained almost same, nationwide 17% in April 2010 to nationwide 18.8% in June 2012. MPRP which was absent in April 2010 jumped to 15.9% in June 2012
¨ We believe that shift in voters opinions resulting from voter dissatisfaction with status quo translates in odds being in DP's favor as MPRP is capitalizing on this dissatisfaction with authorities and, according to L.Sumati, director of Sant Maral Foundation, breaking away votes from traditional MPP electorate.
¨ We believe that most likely scenario is " slight DP plurality (30-35 seats), but not enough to form government with CWGP. Result: DP-led coalition with MPP, PM = Altankhuyag", according to Julian Dierkes, an associate professor at the University of British Columbia's Institute of Asian Research.
¨ New Government would be likely to be overall characterized by low taxes and support of production and industry with goal of establishing comfortable middle class and emphasis on creating jobs and income for Mongolians, universal residential programs, paying attention to their health, education, safe environment, freedom and liberties.
Economically, according to DP's election program, new Government's policy would be likely to be characterized by prioritizing policy of reducing dependency from mining sector, ensuring sustainable long term development, and economic diversification
¨ We believe that election platform of DP overall is broadly defined so it would be hard to specify clearly impact of the new Government. On the other hand, we don't expect drastic changes in Government policies as DP will value highly continuity quality of Mongolian state policy. Over 20 years of democracy, DP has become major mature political party and gained considerable state policy experience being partner of MPP in Coalition Government of 2008-2012 where both parties had similar approaches to many issues due to both being center parties. Therefore, overall, we expect business as usual in Mongolian politics to come.
¨ At the same time, we do believe that there is a clear trend of increasing resource nationalism in election platform of DP reflecting popular voters support for it.
¨ Overall, we expect business as usual with the likely new Government and generally pragmatic approach to resolving various issues. Broadly speaking, DP election platforms fares well in terms in various aspects such as good governance and so on. At the same, time, our recommendation to investors is to be prepared for resource nationalism which is clearly to increase.
To get a full PDF version of this research report please click on http://bit.ly/LyOZ2y
26 Jun, 09:38 AMReplyDelete CommentLike3
post 2 of 4 from Dale Choi at Frontier Securities
Subject: 1.5 MILLION USD HAVE BEEN RAISED SO FAR FROM SALES OF ETT SHARES TO NATIONAL ENTERPRISES AT 0.70USD PER SHARE, 60% OF THE POPULATION HAVE APPLIED TO SELL ETT SHARES TO GOVERNMENT AT 0.70USD PER SHARE
Date: Fri, 22 Jun 2012 16:54:28 +0800
According to official website of Government of Mongolia on June 20,2012 (http://bit.ly/MytXP3) "Cabinet meeting has resolved establish additional agreement with banks that are distributing share and bounty from Human Development Fund and transfer payments to citizens who have decided to sell Erdenes Tavantolgoi shares to Government."
· "As of May 29,2012 1 532 853 citizens have applied to sell the shares to Government, majority in cash".
· "As of June 20, 2012 1096 enterprises have applied to National General Taxation Agency to buy 93 million shares of ETT. As of now, 82 enterprises have deposited over 2 billion MNT (1.5 million USD using today's Bank of Mongolia's reference rate of 1333MNT-Frontier Securities). Enterprises who ordered to buy shares should have deposited the money by June 28,2012. The proceeds will be used for subsequent financing."
26 Jun, 09:39 AMReplyDelete CommentLike3
post 3 of 4 from Dale Choi at Frontier Securities
Subject: PREFERRED SHARES OF ERDENES MGL TO BE ISSUED TO EVERY CITIZEN OF MONGOLIA
Date: Mon, 25 Jun 2012 18:40:39 +0800
According to official website of Government of Mongolia on June 25, 2012(http://bit.ly/LNwTrT) Cabinet Meeting has approved issuance of preferred shares of "Erdenes MGL" company to every citizen of Mongolia
· While Government of Mongolia has issued to every citizen of Mongolia 1072 shares of "Erdenes Tavantolgoi" company, today's Cabinet meeting has made historic decision to add and issue to every citizen preferred shares of "Erdenes MGL" company.
· Currently "Erdenes MGL" company has two daughter companies - "Erdenes MGL" and "Oyutolgoi" and three mining licenses of Shivee Ovoo thermal coal strategic deposit. Thus, according to this decision, opportunity is guaranteed for every citizen to receive for a lifetime dividends from all 15 strategic deposits
· In another words, the distinct feature of preferred share is that citizens of Mongolia will have an opportunity to get dividends even before Government of Mongolia and shareholders.
· Prime Minister of Mongolia has said that this action is concrete realization of Government policy to deliver to each citizen equal distribution of natural wealth.
· Erdenes MGL company has 100 million common shares and 3 million preferred shares. Every registered citizen without citizenship jurisdiction issue is to have right to own preferred share free of charge.
· However, it is prohibited by law to sell, trade, give as a gift, use a collateral or give as inheritance preferred shares. Right to own preferred shares finishes in case a specific person dies or ceases to be a citizen of Mongolia
26 Jun, 09:41 AMReplyDelete CommentLike3
post 4 of 4 from Dale Choi at Frontier Securities (which is a summary perspective on the World Bank Quarterly Report on Mongolia for June 2012 found here: http://bit.ly/MmQvpI)
Subject: ECONOMIC OVERHEATING CONTINUES AMONG WORSENING GLOBAL ECONOMIC OUTLOOK
Date: Tue, 26 Jun 2012 16:58:07 +0800
· Download Full Report: Mongolia Quarterly Economic Update June 2012
· Download the Brief: Mongolia Quarterly Economic Update June 2012
World Bank Economic Update June 2012 Key Findings
· The Mongolian economy is continuing to grow at a very rapid pace, expanding by 16.7 percent year-on-year (yoy) in Q1.
· This high growth however, is also fuelling inflation which touched 16 percent in April, well above the Bank of Mongolia's (BoM) inflation target of 10 percent.
· Increasing government spending on wages and salaries, large cash handouts to the general population, and burgeoning capital expenditures are adding to the demand pressures.
· Meanwhile, the worsening global economic outlook, in particular a faster than expected slowdown in China, Mongolia's largest trading partner, has negatively impacted export growth, resulting in deterioration in external balances.
· Under these circumstances, the advice to Mongolian policy-makers is to "hold your horses" and adopt a more cautious macro-economic stance, tightening both monetary and fiscal policy to prevent further over-heating of the economy.
Real sector developments
· Growth is being led by the service sectors, in particular wholesale and retail trade which expanded by 51 percent yoy in Q1, following an outturn of 70.5 percent in the last quarter of 2011, and transport which grew by 11.7 percent yoy.
· The development of the Oyu Tolgoi mine is having strong spillovers into the rest of the economy, including through lifting consumer and business sentiment.
· The first quarter data also revealed that the agriculture sector is finally recovering from the effects of "dzud" (severe weather conditions) suffered in late 2009/early 2010, growing by 13.6 percent in Q1.
· Government spending growth is outpacing revenue growth, resulting in an increasing fiscal deficit. Spending, in nominal terms, was 32 percent yoy higher in April (year to date, YTD, basis) with capital spending growing by more than 100 percent.
· Revenues are failing to grow at the same pace, rising only 21 percent in nominal terms on a YTD basis in April, as a result of weaker growth in receipts from taxes on international trade, and negative growth in excise taxes, royalties and dividends from mining sector companies.
· As a result, the fiscal deficit has climbed considerably, reaching 4.7 percent of GDP in March, its highest level in nearly two years.
Inflation and Banking Sector
· Inflation is being pushed up by rising core inflation, which reflects demand side pressures from higher government spending, and by rising food prices, notably of meat.
· Recent rate hikes by the BoM are helping to reduce the pace of bank lending, which had been growing over 60 percent at the start of the year. Although there is room to hike further, with the interest rates on central bank paper still negative in real terms, monetary tightening needs to be complemented by fiscal restraint in order to be effective.
· Exports contracted by 2.8 percent yoy in April. This was the first fall in more than two years, and reflected weaker global economic conditions, sliding commodity prices and slowing growth in China which is Mongolia's largest trading partner.
· Coal, which is the largest export earner, is barely growing, while copper exports have been performing poorly for some time now.
· On a four-quarter rolling sum basis, the current account deficit widened to 35 percent of GDP in Q1 2012 from 18 percent in Q1 2011 but was financed by the record levels of FDI(Foreign Direct Investment) inflows of US$ 4.4 bn or roughly half of GDP, and Foreign Currency reserves remain high.
· The Togrog (Mongolian currency) has appreciated in recent months, in both nominal and in real terms which will undermine the competitiveness of Mongolia's non-mineral traded sector.
· Recent poverty analysis, conducted jointly by the World Bank and the National Statistics Office of Mongolia, finds that the national poverty headcount rate declined from 39.2 percent in 2010 to 29.8 percent in 2011. This progress took place against the backdrop of strong economic growth, sizeable social transfers, and large investments to help the recovery from the 2010 dzud.
· However, the recent acceleration in inflation is worrying since it will impact the poor disproportionally, and rising food inflation is particularly worrying since food constitutes 49 percent of expenditures among households in the lowest quintile of the income distribution.
· The global economic outlook has deteriorated considerably in recent months. Financial conditions in high-income Europe, higher oil prices, and, most importantly, the slowing Chinese economy pose risks for Mongolia.
· Given these risks, Mongolian policy-makers need to adopt a cautious macro-economic stance. This will entail limiting the build-up of vulnerabilities in the banking sector, reining in the growth of government expenditures, minimizing off-budget financing activities and ensuring that the lending of the Development Bank of Mongolia is within the framework of the Fiscal Stability Law.
· Adjusting the policy stance in this manner will address the internal imbalances that are already evident as well as position Mongolia better to deal with the risks to the regional and global economy.
· It will also ensure that the money spent is well spent, namely on activities that help to build the public and human capital infrastructure of Mongolia and maximize the returns of the country's mineral wealth to its people.
26 Jun, 10:26 AMReplyDelete CommentLike4
World Bank Quarterly Report on Mongolia for June 2012 found here: http://bit.ly/MmQvpI
26 Jun, 10:26 AMReplyDelete CommentLike4
SouthGobi (OTC:SGQRF) (1878.HK) (SGQ.TO) down 19% in Hong Kong over night. Admits problems and curtailing of CapEx.
Press Release: http://mwne.ws/KD44Mn
Campaigning in Mongolia is done. One day buffer is in effect today. Elections tomorrow. Results expected by 11pm Thursday night local time (11am in New York) (expected time of results courtesy of Oliver Belfitt-Nash at Monet Capital).
27 Jun, 06:55 AMReplyDelete CommentLike2
Exclusive Enkhbayar's interview to UB Post.
27 Jun, 12:18 PMReplyDelete CommentLike5
Thank you GI
27 Jun, 02:21 PMReplyDelete CommentLike1
It may be my computer, but it is taking a long time to load comments on this article.
27 Jun, 02:26 PMReplyDelete CommentLike1
Not you SD. This blog is long overdue for maintenance. It is on my list (which is long but getting shorter). Will get to it by the weekend or sooner I hope - apologies for the slow load time in the interim.
27 Jun, 03:02 PMReplyDelete CommentLike4
I know you are very busy with the move, remodel and a baby on the way (BTW, congrats. no sleep for 6 months). We have 4 grandkids visiting at the moment, 3 are from Pittsburg PA, one from LA CA. Grandkids are great, grandpa doesn't change diapers and can be a best bud.
27 Jun, 04:28 PMReplyDelete CommentLike4
Stilldazed: the best part is you can spoil the grandkids rotten and then send them home! :-)) It's a lot more fun than having to raise 'em again!
Method # 2: Get even! Live long enough to become a problem for your children! :-))
27 Jun, 04:34 PMReplyDelete CommentLike3
You got it!!
27 Jun, 04:40 PMReplyDelete CommentLike2
Almost every young and educated Mongolian I know of does not have kind words for Enkhbayar "The Godfather of Corruption". It's interesting how he now uses the media for sympathy and influence. It reminds me of the Dalai Lama who is powerless.
27 Jun, 08:20 PMReplyDelete CommentLike3
Interesting perspective Haiguike.
He may be "The Godfather of Corruption" but there's a lot of people much better than him at it, or he'd be higher than the 96th richest person in Mongolia.
27 Jun, 09:58 PMReplyDelete CommentLike2
Of course, because politicians are always transparent about their financial assets. :) My opinion is that he's no longer that rich because he has lost a great deal of power since 2008 and I would not be surprised if he has non-transparent and off-shore assets.
From what I have been told in Mongolia, Enkhbayar is infamous for corruption and rigging elections, and now he's complaining to the international media about unfair elections and corruption by the MPP and DP.
When Enkhbayar was arrested, very few came to protest. Even when he was arrested, he did not receive much sympathy and that level of sympathy waned once the details of his behavior were released.
28 Jun, 01:25 AMReplyDelete CommentLike2
The MPRP party led by Mr. Enkhbayar received 62.5% and 59.2% of vote in presidential elections of 1997 and 2001, and further 51.6%, 48.23% and 52.67% of vote in parliamentary elections of 2000, 2004 and 2008, and Mr. Enkhbayar himself elected with 54.20% of vote in presidential elections of 2005 and lost re-election in 2009 with 47.41% of vote.
This kind of statistics would suggest that the "young and educated Mongolians" you know are representative of only a half (or less) of Mongolian electorate.
One would assume that hundreds and hundreds of thousands of Mongolians who regularly vote for Enkhbayar and his party in every election for the last decade and a half definitely do not regard him as "Godfather of corruption".
28 Jun, 02:27 AMReplyDelete CommentLike2
To me, Enkhbayar's corruption level is not the point. The point is the ACA has far more work to do if it is actually intent on seriously limiting corruption in Mongolia, and not merely appearing to be a tool of the most corrupt that keeps their competition down.
The ACA was a fairly irrelevant and useless agency prior to arresting Enkhbayar. Deciding to come out of nowhere two months before national elections and arrest people looks corrupt; and more so when members of the national parliament and those of higher rank are immune from arrest.
If the President is truly the ACA's final authority (and truly, I have no idea who is directing the ACA behind the curtains), then next year's Presidential election may actually matter more than today's results.
28 Jun, 07:58 AMReplyDelete CommentLike2
figureheads make better headlines though.
28 Jun, 04:09 PMReplyDelete CommentLike3
true... but under the current law, they could not have arrested Enkhbayar had he been in office at the time (as 4 of the 10 richest people in the country are - and thus are exempt from arrest)
it was only because Enkhbayar lost political office in 2008 and 2009 that he could be arrested now
otherwise... the rules of Mongolia basically give free reign on corruption for almost 100 aspiring Berlusconis
28 Jun, 04:19 PMReplyDelete CommentLike3
President Elbegdorj hails 7th democratic elections since end of communism: http://on.mktw.net/MYk1Nq
(30 minutes ago on PR Newswire)
Results should be coming soon.
28 Jun, 12:32 PMReplyDelete CommentLike4
Twitter feed from an election observer in Mongolia:
Last post by him: Coalition speculation: DP (35) + CWGP (3) + independents (4). Not until after Naadam, new cabinet in September #mglelect #mglpoli #Mongolia
Naadam (annual traditional sporting events of great import) will take up a chunk of time in the interim.
28 Jun, 06:11 PMReplyDelete CommentLike2
Prime Minister and head of the Mongolian People's Party S.Batbold demands manual recount of votes. The control recount in several districts produced different results from the vote counting machines.
Enkhbayar tweeted: "Vote counting machine brought in by Z.Enkjbold [Democratic Party] has won. Mongolian sovereignty has lost"
Looks like yet another disputed election
28 Jun, 07:33 PMReplyDelete CommentLike4
Thanks for those links GI!
28 Jun, 08:05 PMReplyDelete CommentLike2
The disputes aside, the election produced striking split between the city and countryside.
DP claims 11 out of 14 Ulaanbaatar city seats.
MPP claims 26 out of 34 countryside seats.
We'll see what will happen to these claims after recount, but still, such kind of city-countryside splits are very dangerous.
Witness Thailand's recent electoral history
28 Jun, 08:10 PMReplyDelete CommentLike3
4 independents have apparently won (among them MP Ts.Davaasuren and trade union leader Ganbaatar).
MPRP looks like won 2 seats in the city (according to DP claims, MPP won only 1 seat in UB - Mr. D.Zorigt, minister of mineral resources and energy)
There are of course, further 28 seats on party lists. DP already claims that they got 50% of vote on party list, ie, they will claim further 14-15 seats.
We'll see what recount will make of these claims. For now, the outright DP victory seems unlikely, they are still short of 5-9 seats from majority.
28 Jun, 08:15 PMReplyDelete CommentLike3