|Frontier's "Invest Mongolia Tokyo 2018"||Frontier Securities||Tokyo Japan|
|"Open to Export" ICC WTO International business award||ICC WTO||London|
Russian President Vladimir Putin sent a letter of congratulation to Kh.Battulga, President of Mongolia on his 55th birthday on 3 March.
The letter said, in part:
‘I remember with pleasure our effective business meetings in Budapest and Vladivostok. I hope to continue cooperating with you in matters concerning well-being between the nations of Mongolia and Russia. I wish you strong health as an athlete, happiness and success.'
Both presidents are proficient in judo.
Rio Tinto's Mongolian subsidiary has filed a notice of dispute with the Mongolian government. www.afr.com
Rio Tinto and the Mongolian government could be headed for international arbitration, after the Rio subsidiary that owns the Oyu Tolgoi copper mine filed a formal notice of dispute against the developing nation.
The dispute relates to Mongolia's recent claim for $US155 million in taxes that the government believes were not paid between 2013 and 2015, and it comes after months of rising tensions between Rio and the developing nation.
Rio's exposure to the Mongolian mine comes through its 50.8 per cent stake in Canadian company Turquoise Hill Resources (TRQ), which in turn owns 66 per cent of the Mongolian company that owns the mine; Oyu Tolgoi LLC.
The latter company agreed to pay $US4.8 million of the tax claim, but filed the notice of dispute on Thursday over the remainder of the claim.
"On March 15, 2018, Oyu Tolgoi filed a notice of dispute with the Government of Mongolia under the Investment Agreement," said TRQ on Friday morning.
Dispute resolution is covered by chapter 14 of the 2009 Investment Agreement for Oyu Tolgoi, which is the seminal legal and financial contract between Rio, its subsidiaries and the Mongolian government.
"The notice of dispute filing is the first step in the process and includes a 60 working day negotiation period. If the parties are unable to reach a resolution during the 60 working day period, the dispute can be referred to international arbitration," said TRQ.
According to the 2009 investment agreement, the arbitration must take place in the London Court of International Arbitration, be conducted in English language and be in keeping with the arbitration rules of the United Nations Commission on International Trade Law.
"The arbitral award shall be final and binding on the parties," says chapter 14 of the 2009 investment agreement.
TRQ declined to record a provision for the tax claim on Friday, but noted that the sums involved would be material if forced to pay.
In a generic statement of corporate risks filed by TRQ on Friday, it conceded it may struggle to enforce the outcome of any arbitration proceeding if Mongolia chose to ignore the terms of the 2009 investment agreement.
"To the extent that the government of Mongolia does not observe the terms and conditions of the investment agreement and the underground plan, there may be limitations on the company's ability to enforce the terms of the investment agreement and the underground plan against the government of Mongolia, which is a sovereign nation, regardless of the outcome of any arbitration proceeding," said TRQ.
"If the terms of the investment agreement and or the underground plan cannot be enforced effectively, the company could be deprived of substantial rights and benefits arising from its investment in Oyu Tolgoi with little or no recourse against the government of Mongolia for fair and reasonable compensation."
The dispute comes almost four years after TRQ filed a similar notice of dispute against the Mongolian government over the government's claim for $US130 million in unpaid taxes.
Mongolia settled on that occasion for a $US30 million payment.
Rio, TRQ and Oyu Tolgoi have had a rough start to 2018, with copper exports being interrupted by a blockade at the Chinese border.
Mongolia also tore up a power supply agreement in February, which had allowed Oyu Tolgoi to source power from China. Rio must now find a way to source power for the mine from within Mongolia within four years, in a change that could add to the costs of the project.
First production of copper concentrate from Oyu Tolgoi's open pit came in 2013, but most of the mine's value lies in a giant underground expansion that is now under way and is expected to deliver copper from about 2021.
That expansion is expected to cost $US5.3 billion and will make Oyu Tolgoi the world's third biggest copper producer by 2025, when the underground mine reaches peak production rates....
Turquoise Hill Resources today announced its financial results for the year ended December 31, 2017. All figures are in
U.S. dollars unless otherwise stated.
Full year 2017
• Oyu Tolgoi achieved an All Injury Frequency Rate of 0.27 per 200,000 hours worked for the year ended December 31,
• Underground lateral development made good progress during 2017 completing 6.1 equivalent kilometres for the year
which was in-line with the 2016 Technical Report expectations.
• Since the re-start of development in January 2016, a total of 7.7 equivalent kilometres has been completed, which is
• Shaft 2 sinking was completed in January 2018 with fit out expected to occur over 2018.
• Shaft 5 had approximately 100 metres remaining at the end of 2017 and sinking is expected to be complete in Q1’18.
• During 2017, total underground expansion spend was $835.7 million, meeting guidance and resulting in total
underground project spend since January 1, 2016 of approximately $1.1 billion.
• Production from first draw bell remains planned for mid-2020 and sustainable first production in 2021.
• During 2017, Oyu Tolgoi set operational records for total material mined and concentrator throughput.
• Copper production of 157,400 tonnes and gold production of 114,000 ounces in 2017 met the Company’s guidance.
• Oyu Tolgoi recorded revenue of $939.8 million in 2017 compared with $1,203.3 million in 2016 reflecting lower sales
volumes partially offset by higher copper prices.
• For 2017, the Company recorded income of $110.9 million and net income attributable to owners of Turquoise Hill of
$181.2 million or $0.09 per share.
• Turquoise Hill generated cash flow from operating activities before interest and tax of $325.8 million in 2017, with net
cash generated from operating activities of $118.0 million.
• For 2017, Oyu Tolgoi’s cost of sales was $2.32 per pound of copper sold, C1 cash costs were $1.92 per pound of
copper produced and all-in sustaining costs were $2.39 per pound of copper produced1
• Operating cash costs1 of $711.6 million in 2017 beat the Company’s guidance.
• Of the $4.2 billion project finance facility proceeds deposited with Rio Tinto in June 2016, approximately $1.0 billion
has been redrawn as of December 31, 2017 with approximately $3.2 billion available.
• Turquoise Hill’s cash and cash equivalents at December 31, 2017 were approximately $1.4 billion.
Please review the full report at www.turquoisehill.com...
Ulaanbaatar /MONTSAME/ The Mongolian Government spends a relatively high amount of money on education compared to other countries in the East Asia Pacific, says a new World Bank report released today.
In Mongolia, the government spends 4.6 percent of its GDP on education – a relatively high rate compared to the regional countries. However, most of this spending is allocated to recurrent expenses while capital investment such as books and educational equipment have more impact on improving learning outcomes, overall is one of the lowest in the region. Mongolia is also among countries which does not participate regularly in globally comparable standardized tests making it difficult to benchmark Mongolian students’ learning outcomes against comparator countries.
The East Asia and Pacific region has seven of the top ten performing education systems in the world, with schools in China and Vietnam showing significant progress. This is a major accomplishment that offers important lessons to countries around the world. In the rest of the region, however, up to 60 percent of students are in under-performing schools that fail to equip them with the skills necessary for success.
The report found that across the region, household incomes do not necessarily determine children’s educational success.
ULAN BATOR, Mongolia — Mongolians have long relied on folklore to explain how miserably cold their winters are.
During the first of nine phases of winter — each composed of nine days, starting on Dec. 22 — it is said that vodka made from milk freezes. During the third set of nine days, when temperatures can hit minus 40 degrees in both Fahrenheit and Celsius, the tail of a 3-year-old ox is said to fall off. Around the sixth set of nine days, which falls in the middle of February, roads are expected to re-emerge from underneath the ice and snow.
But for the nearly 1.5 million residents of the capital, Ulan Bator, the misery of winter is now defined almost singularly by the smoke rising out of the city’s chimneys. Since 2016, in addition to being the world’s coldest capital city, it has also had the distinction of being the one with the highest recorded levels of air pollution, surpassing notoriously polluted megacities like Beijing and New Delhi.
According to local government figures, around 80 percent of Ulan Bator’s air pollution is produced by just over half the population, living in the so-called ger districts in the north of the city, named for the traditional nomadic dwelling central to Mongolians’ herding lifestyle.
The ger, or yurt, is a circular tent comprising a single room, with a family’s bedding and furniture arrayed around the device that makes its simple architecture survivable in such a harsh climate: a stove. The ger can be packed onto a truck and set up within a few hours.
In recent years, the predominantly lower- to middle-income migrant workers who reside in these unplanned districts have been burning over a million tons of raw coal per year.
With little work available in Mongolia’s smaller cities, hundreds of thousands have left behind the nomadic herding lifestyle in the hope of finding opportunities in the mineral boomtown that Ulan Bator has become. And they have settled in the ger districts, which have sprung up because of a lack of clarity about land ownership.
During the Communist era, land belonged to the state, but starting in 1991, land was defined as belonging to the citizens of Mongolia, leading to confusion as newcomers to the city claimed land and demanded ownership of it.
In recent years, the predominantly lower- to middle-income migrant workers who reside in these unplanned districts have been burning over a million tons of raw coal per year. The heaviest use is during the winter when staying warm is a matter of survival as temperatures remain well below freezing for weeks at a time. Those who can’t afford coal often burn garbage, adding plastics and other pollutants into the soupy mix.
As families huddle indoors, burning coal around the clock, sections of the city see their levels of fine particulate matter, a pollutant, soar into the thousands. On Jan. 30, one station in Ulan Bator recorded a reading of 3,320 micrograms per cubic meter — 133 times what the World Health Organization considers safe, and more than six times what it considers hazardous.
In January, Prime Minister Ukhnaagiin Khurelsukh announced that the transportation and use of raw coal in Ulan Bator would be banned starting in April 2019 as part of an effort to improve the city’s air quality.
Meantime, the government has been trying with its limited resources to put a dent in the problem. Subsidies have been offered to families for stoves that produce less pollution, and since January 2017, electricity in many of the city’s highest-polluting districts was made free at night, when pollution levels are at their most severe.
But the cost of electric heaters that can adequately heat a thinly insulated home in the cold of winter is far out of reach for many in the ger districts. Nonsubsidized electricity is more expensive than coal, and far less plentiful.
The planned ban on coal has raised eyebrows among miners and sellers who extract and transport truckloads of the freshly extracted fuel from the city’s Nalaikh area, which provides 75 percent of the coal burned in the ger districts.
Many are skeptical that Mongolia’s government will be able to enforce the ban.
An entire flatbed of a small truck — weighting 1.3 ton — is enough to last a single family roughly one month during the coldest four months of winter.
“There are thousands of families who mine, sell and burn coal in order to live,” added Mr. Unurkhaan, who had barely given his name before he was off to deliver to a client’s home his 1.3-ton load of coal, which at $65 to $75, depending on the quality of coal, lasts a family about one month, according to official estimates.
But residents agree that something has to be done, particularly to protect the youngest and the elderly, who are most at risk because of the pollution.
Already, the pediatric wards of hospitals have banks of nebulizers to treat the large variety of respiratory infections and viruses that become both chronic and dangerous during the winter months.
Because of the pollution, “a simple flu becomes a pneumonia or bronchitis very easily,” said Dr. Soyol-Erdene Jadambaa, an immunologist at the Batchingun allergy and immunology children’s hospital, a private clinic. “It requires long-term treatment.”
Pneumonia killed up to 435 children under the age of 5 in Ulan Bator in 2015, according to Unicef.
“We need a completely new city,” said Batmend Shirgal, who was raised in Ulan Bator and is now an engineer at one of the city’s power plants, as his 2-year-old daughter helped her younger brother hold a nebulizer to his small face at the Seven Dwarfs Pediatric Clinic near Ulan Bator’s airport.
The family had lived year-round in a planned part of the city with municipal heating until last year, when both children suffered severe cases of pneumonia and were hospitalized. This winter, the family decamped to Nalaikh, 24 miles outside the city, where the air is cleaner despite the area’s being the primary source of Ulan Bator’s coal.
“If you take coal out of the ger, people will burn anything,” Mr. Shirgal said. “The tires on their cars, their neighbors’ fences. It’s hard to survive in minus 30 degrees.”
Munkhchimeg Davaasharav contributed reporting.
Produced by Gray Beltran, Meghan Petersen and Mikko Takkunen. Map by Baden Copeland....
According to the Ministry of Mining and Heavy Industries, gross output of the industry has reached to MNT 2 trillion in two months of 2018; increased by MNT 255 billion from same time in previous year.
The Ministry plans to explore a total of 8.1 million of barrel crude oil in 2018 and generate MNT 223.4 billion in budget revenue. As of 9 March, the Ministry explored 1.31 million of crude oil. Mongolia still does not have any refining capacity - its first refinery is under construction; as a result the country is dependent on Russia for fuel imports. A fairly serious situation has developed: the Mineral Resources and Petroleum Authority has reported that the country has petrol and diesel reserves for 44 days. Russia's Rosneft has agreed to discount fuel supply to Mongolia from June.
Minister of Froeign Affairs Tsogtbaatar Damdin and Member of the Parliament Enkhbayar Jadamba are attending the first international conference of the silk road support group in the Parliamentary Assembly of the Organization for Security and Cooperation in Europe (OSCE). Under the theme "the Role of Parliamentarians in Boosting Economic Cooperation and Cultural Ties along the Silk Road", the conferece took place on March 13-14. Mr Tsogtbaatar delivered a speech at the plenary session which was held on the first day. In his speech, he highlighted the historical role of the Mongol Empire in the silk road development and noted that Mongolia supports latest initiatives designed for redevelopment of the silk road, especially in line with the China’s Belt and Road initiative. “Initiatives for redevelopment of the silk road have a great significance not only for the development of trade and economy, but also for development of cultural, humanitarian and person-to-person relations,” he added. Moreover, Mr. Tsogtbaatar made a proposal to launch scholarship for ambitious young diplomats who have offered new proposals and initiatives within the frame of the initiatives for the silk road redevelopment. In 2012, Mongolia became a full member of the OSCE. Since then, it has been taking part in its Parliament Assembly which is the main mechanism for inter-parliamentarian talks for its member countries....
A Mongolian delegation led by Defence Minister N.Enkhbold, has paid an official visit to Qatar at invitation of his counterpart Halid bin Muhammed al Attiyah. In Doha, the minister attended a two-day maritime defence and security expo, DIMDEX 2018, organized by the Qatar Armed Forces. About 180 companies from more than 60 countries took part in the annual event.
During the meeting, the two sides renewed expired agreements and agreed to expand cooperation as well as increase visits between their respective ministries. Mr. N.Enkhbold invited Qatar to partake ‘Khaan Quest’ Mongolian-hosted, combined, joint training exercise designed to strengthen the capabilities of the U.S., Mongolia and other partner nations in international peacekeeping operations. Furthermore, Mongolia's defence minister requested training officers (including Arabic language courses) in Qatar.
Launched in 2008, DIMDEX is considered the Middle East and North Africa's largest event devoted exclusively to maritime security, with a total of USD 32bn in deals being signed at the last five exhibitions.
Last week, The Asia Foundation and the Sant Maral Foundation released the eighth biannual survey of private sector perceptions of corruption, revealing a pivotal time in Mongolia’s business environment.
During Mongolia’s transition in the 1990s from a centrally planned to a free market economy, the country underwent the privatization of its government property such as factories, apartments, and even livestock. These changes led people to enthusiastically jump on opportunities to build their own businesses within the new framework of a competitive and open market. These new business opportunities ranged from thousands of people re-selling goods from China to Mongolia and Russia while traveling on trains for weeks, to buying and operating old socialist-era factories and plants.
After nearly two decades, the country’s economy has expanded considerably, and today, Mongolia’s leading businesses have passed through the initial hurdles of learning how to operate in a free market economy. This latest round of the survey shows that businesses are now feeling the tangible effects that corruption is having on their bottom line: 80 percent of the businesses reported “a lot” of corruption in the government, and at least 20 percent of them said that they observe corrupt acts on a monthly or quarterly basis. This growing recognition of corruption and its negative impact on the economy is both a marker of the maturation of the private sector as businesses start to call for improvements in the business environment, as well as an indication that corruption remains one of the major constraints on economic growth in Mongolia.
Although the blame for corruption is mostly placed on the government, respondents in fact acknowledged their own culpability in corruption by not taking proactive measures to combat it. The survey reveals that only 14 percent of the businesses that responded have rules to prevent corruption and only six percent of them had reported corruption, a surprisingly low number given how many reported observing lot of incidents of corruption.
On March 2, The Asia Foundation and the Economic Club of Ulaanbaatar brought together 30 members of the business community to discuss the survey findings, as well as the importance of fairness and ethics in business and how it should help the businesses succeed in the long run and better serve society.
One well-known local business woman who leads an association of construction companies recalled that while many business people in Mongolia operate large successful companies today, they still run them under behaviors learned during the early transition years when the idea of business ethics was largely a foreign concept. This may be why only nine percent of the businesses think that doing business in an ethical way is a part of their corporate social responsibility, according to a study on corporate social responsibility by the Corporate Governance Development Center in Ulaanbaatar.
A CEO of local company “Nuudelchin” or “Nomads” in Mongolian, told the group that he witnesses acts of corruption in his daily life as a business leader. “We encounter cases where a seller cheats a customer not telling that them that a product was made in China and poor quality. This demonstrates that the nature of our businesses, regardless of their size that has short run motivation to make profit,” he said.
Another local businessman attending said that “many of our large companies are split into two groups that support two political parties. Some even serve both major parties at the same time. There are those ‘middle men’ whose businesses exist only on paper yet consistently win government tenders, whereas real business people with skills and equipment are getting hurt and going bankrupt.”
Despite these bleak observations, there is hope. Over the last few years, many business leaders in the country are starting to take the lead in combatting corruption, and the concept of a “business ethic” is starting to emerge. For example, The Business Council of Mongolia (BCM), a local business association established a Business Ethics Working group two years ago and created an anti-bribery e-learning course tool last year (supported by The Asia Foundation’s Strengthening Democratic Participation and Transparency in the Public Sector in Mongolia Project). The tool enables anyone in the business community to log on and complete tests aimed at improving their knowledge about corruption and relevant legislation. Recently, XAC Bank made this online course mandatory for their new employees during their induction sessions. Another BCM member who owns a local electronics retail company responded extremely positively to the anti-corruption training, requiring that his 30-plus managers take part in the training.
As the business community begins to realize the need for change, and public pressure grows, the government is also taking positive steps. On July 1, 2017, Mongolia’s Parliament passed a revision of the Criminal code, introducing legislation that for the first time, makes a legal entity responsible for an act of corruption and abuse of power; any embezzlement from the executives and managers of private companies is now a criminal act.
There is no doubt that corruption presents a big challenge in Mongolia. Yet there is a growing confidence in and hope that ongoing collective efforts such as improving corporate governance, corporate social responsibility, and improving ethics will take Mongolian businesses to the next stage of development.
The survey launch event was an initiative of The Asia Foundation under its Strengthening Democratic Participation and Transparency in the Public Sector in Mongolia Project funded by Global Affairs Canada. The “Study of Private Sector Perceptions of Corruption” is conducted under The Foundation’s Global Affairs Canada funded Strengthening Democratic Participation and Transparency in the Public Sector in Mongolia Project (STEPS).
Bayanmunkh Ariunbold is a project manager for The Asia Foundation in Mongolia. The views and opinions expressed here are those of the author and not those of The Asia Foundation or its funders....
ULAN BATOR, March 14 (Xinhua) -- The number of people infected with HIV in Mongolia rose to 252 after one case was registered in February, the country's National Statistical Office said in a report Wednesday.
More than half of the HIV patients are between 20 and 44 years old and about 99 percent of the infections were sexually transmitted, according to the report.
The first case of HIV infection in Mongolia was registered in 1992. Since then, 40 people have died from this disease in the Asian country with a population of more than three million.