1 FOREIGN RELATIONS OF MONGOLIA’S ROAD TRANSPORT SECTOR BROADENING WWW.MONTSAME.MN PUBLISHED:2019/02/21      2 MONGOLIA EXPRESSES READINESS TO CONTRIBUTE TO STRENGTHENING ASIA-EUROPE COOPERATION WWW.MONTSAME.MN PUBLISHED:2019/02/21      3 OYU TOLGOI FUNDED 35.1 KM ROAD OPENS IN KHANBOGD WWW.GOGO.MN PUBLISHED:2019/02/21      4 POLYMER BITUMEN TO BE DOMESTICALLY PRODUCED WWW.MONTSAME.MN PUBLISHED:2019/02/21      5 KHURELBAATAR CHIMED: 319 ENTITIES DREW LOANS FROM TWO FUNDS WWW.ZGM.MN PUBLISHED:2019/02/21      6 CONSTRUCTION OF TAVANTOLGOI-GASHUUNSUKHAIT ROAD TO BE INTENSIFIED WWW.MONTSAME.MN PUBLISHED:2019/02/20      7 OVER 30 MEASURES PLANNED FOR REDUCTION OF ENVIRONMENTAL POLLUTION WWW.MONTSAME.MN PUBLISHED:2019/02/20      8 MONGOLIA SAYS IT EARNS OVER 169 MLN USD FROM COAL EXPORTS TO CHINA IN JAN WWW.HELLENICSHIPPINGNEWS.COM  PUBLISHED:2019/02/20      9 RUSSIA’S GAZPROM TO START CHINA GAS PIPELINE BY DECEMBER 1 WWW.RT.COM PUBLISHED:2019/02/20      10 MONGOLIA'S FOREIGN TRADE UP 41.6 PCT IN JAN. WWW.XINHUANET.COM PUBLISHED:2019/02/20      УГСАРМАЛ ОРОН СУУЦНЫ ДУЛААЛГАД ЗОРИУЛЖ 12.7 ТЭРБУМ ТӨГРӨГИЙГ УЛСЫН ТӨСВӨӨС ГАРГАХААР БОЛЖЭЭ WWW.IKON.MN НИЙТЭЛСЭН:2019/02/21     2018ОНД ЦАГААН БУДАА , ЭЛСЭН ЧИХЭР , ТАХИАНЫ МАХНЫ ИМПОРТ 24-32 ХУВИАР ӨСЖЭЭ WWW.BLOOMBERGTV.MN  НИЙТЭЛСЭН:2019/02/21     ДЦС IV: 2018 ОНД НИЙТ АШИГ 4.7 ДАХИН ӨСӨЖ , 4.48 ТЭРБУМ ТӨГРӨГ БОЛСОН WWW.BLOOMBERGTV.MN  НИЙТЭЛСЭН:2019/02/21     ТУСГАЙ САНГУУДААС ГАРГАСАН ЗЭЭЛИЙН 100 ОРЧИМ ТЭРБУМ ТӨГРӨГ ХУГАЦАА ХЭТЭРСЭН ӨР БОЛЖЭЭ WWW.BLOOMBERGTV.MN  НИЙТЭЛСЭН:2019/02/21     МОНГОЛ УЛСЫН БОРЛУУЛАЛТЫН МЕНЕЖЕРҮҮДИЙН ИНДЕКС СҮҮЛИЙН 12 САРД АНХ УДАА УНАЛТЫН БҮСЭД ШИЛЖИВ WWW.BLOOMBERGTV.MN НИЙТЭЛСЭН:2019/02/21     2018 ОНД ХАМГИЙН ЧИНЭЭЛЭГ БҮЛГИЙН ХЭРЭГЛЭЭ ЯДУУ БҮЛГИЙНХНЭЭС 5.1 ДАХИН ИХ БАЙВ WWW.BLOOMBERGTV.MN НИЙТЭЛСЭН:2019/02/21     ХОВД ГОЛД ОСОЛДСОН 6 НАСТАЙ ХҮҮХДИЙН ЭРЛИЙГ ЗОГСООЛОО WWW.MONTSAME.MN НИЙТЭЛСЭН:2019/02/21     ДБНХ-НООС П.ОРХОНЫ БАРИЛДАХ ЭРХИЙГ 4 ЖИЛЭЭР ХАСАВ WWW.MONTSAME.MN  НИЙТЭЛСЭН:2019/02/21     УУХҮЯ: II САРЫН БАЙДЛААР НИЙТ НУТАГ ДЭВСГЭРИЙН 5.6 ХУВЬД АШИГТ МАЛТМАЛЫН ЛИЦЕНЗ ОЛГОСОН WWW.BLOOMBERGTV.MN  НИЙТЭЛСЭН:2019/02/20     300 ОРТОЙ ТӨРӨХ ЭМНЭЛГИЙН БАРИЛГЫН АЖИЛ 80%-Д ХҮРЧ ГУРАВДУГААР САРЫН 1-НЭЭС ДУЛААНД ХОЛБОГДОХООР БОЛЖЭЭ WWW.IKON.MN НИЙТЭЛСЭН:2019/02/20    

Events

Name organizer Where
“Doing business with Mongolia”, “UK Investors show” бизнес хөтөлбөр March 27-April 02. 2019 ЛОНДОН ХОТ, ИХ БРИТАНИ Mongolian Business Database London UK
SYMPOSIUM ON GLOBAL MARKETS Nationalism and Protectionism: The United States in the International Arena June 17-18, 2019 The Center for American and International Law Plano, Texas, USA The Center for American and International Law (CAILAW) Plano Texas June 17-18 2019
"Open to Export" ICC WTO International business award ICC WTO London

NEWS

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U.S. says 463 migrant parents may have been deported without kids www.reuters.com

(Reuters) - More than 450 immigrant parents who were separated from their children when they entered the United States illegally are no longer in the country though their children remain behind, according to a joint court filing on Monday by the federal government and the American Civil Liberties Union.

Security officers keep watch over a tent encampment housing immigrant children just north of the Mexican border in Tornillo, Texas, June 20, 2018. REUTERS/Mike
The absence of the 463 parents, which U.S. government lawyers said was “under review,” could impede government efforts to reunite separated families by Thursday, the deadline ordered by a federal judge. The filing did not say why the 463 parents had left the country, but government officials previously acknowledged that some parents had been deported without their children.

As of Monday, 879 parents had been reunited with their children, according to the filing.

About 2,500 children were separated from their parents after the Trump administration announced a “zero tolerance” policy in April aimed at discouraging illegal immigration. The policy was ended in June amid an international outcry about the government’s treatment of immigrant children.

U.S. District Judge Dana Sabraw in San Diego ordered last month that the government had to reunite the children with their parents in a case brought by the ACLU.

On Monday, the government also said 917 parents were either not eligible to be reunited or not yet known to be eligible to be reunited with their child. That number includes parents no longer in the country as well as those deemed unsuitable because of criminal convictions or for other reasons.

Immigration advocates have expressed alarm about parents deported without their children, saying it can create problems with the children’s immigration cases.

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Clough awarded two additional scopes of work for Oyu Tolgoi mine in Mongolia www.clough.com.au

Clough, as part of GCR Mongolia Joint Venture, is pleased to announce that the Joint Venture has been awarded the design, construction and commissioning of the blind sink and concrete line of Shaft No 3 and No 4 and the construction of the Underground Material Handling System for Stage 1 for the Oyu Tolgoi mine located in the southern Gobi Desert, Mongolia.

Clough CEO and Managing Director, Peter Bennett said “We are pleased with the award of these two additional scopes. Clough as part of the GCR Mongolia Joint Venture welcomes the opportunity to continue contributing to the progress of the underground development of the Oyu Tolgoi project”.

Situated in the southern Gobi Desert of Mongolia, approximately 550 kilometres south of the capital, Ulaanbaatar and 80 kilometres north of the Mongolia-China border, Oyu Tolgoi is jointly owned by the Government of Mongolia (34 per cent) and Turquoise Hill Resources (66 per cent,). Since 2010, Rio Tinto has also been the manager of Oyu Tolgoi.

Oyu Tolgoi is one of the most exciting developments in copper and gold mining for several decades. It contains reserves and resources that make it one of the world’s largest known copper and gold deposits. The project is expected to be a significant contributor to Mongolia’s development.

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China launches dumping probe into steel imports from Indonesia, EU, Japan, and South Korea www.rt.com

China’s Commerce Ministry launched an anti-dumping investigation on Monday into stainless steel imports from four countries. Domestic producers have complained that a flood of cheaper products has damaged the local industry.
Dumping is an international-trade term that describes a country or company exporting a product at a price that is lower in the foreign import market than the price in the exporter’s domestic market in order to gain a competitive advantage.

The investigation will target imports of stainless steel billet and hot-rolled stainless steel sheet and plate from the European Union, Japan, South Korea and Indonesia, which nearly tripled last year. The complaint was filed by Shanxi Taigang Stainless Steel, which accounts for 25-35 percent of China’s steel production, and four other mills.

According to the complaint, almost two-thirds of China’s stainless steel imports came from Indonesia last year, up from five percent in 2016 and zero in 2015. That surged to 86 percent in the first quarter, it said.

Imported prices of stainless steel products fell by 23 percent to $1,867 a ton in 2017 from $2,436 a year earlier.

“If we allow these products to continue to enter the Chinese market with low prices and take more market share, sales of China’s domestic products will continue to decrease,” the complaint said.

China, which makes and consumes around half of the world’s stainless steel, imported 703,000 tons in 2017 – up almost 200 percent from a year earlier. Some 98 percent of that came from the regions targeted by the investigation.

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Bituminous coal export increases www.montsame.mn

Ulaanbaatar /MONTSAME/ As of the first half of 2018, export of bituminous coal, copper concentrate, fluorite, iron ore and crude oil made up 83.3 percent of mineral products export.

Bituminous coal export increased by 0.9 million tons, or by USD 126.9 thousand compared with the previous year. 
Mongolia exported 98.9 percent of bituminous coal to China in the first 6 months of 2018.

Export of copper concentrate raised by 0.8 thousand tons, or by USD 249.3 million. Copper concentrate was entirely exported to China.

Although molybdenium concentrate export decreased by 162.3 tons as of the first half of 2018, total value of the export increased by USD 6.1 million. 86.5 percent of molybdenum concentrate was exported to China, 8.2 percent to the Republic of Korea. Export of fluorite increased by USD 53.4 thousand tons or USD 29.9 million. Fluorite price was an average of USD 240.8 per ton in the first six months of 2017 and it increased to USD 328.1 at the same time of 2018. 48.3 percent of fluorite was exported to Russia and 51.5 percent to China.


B.Batchimeg

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Mongolian companies to sell their products on Japanese market www.montsame.mn

Ulaanbaatar /MONTSAME/ During the Mongolia-Japan Business Forum held in Tokyo at the beginning of July, domestic companies signed an agreement for sale of goods on Japanese market.

Specifically, the forum participant ‘Maral Design’ LLC agreed to export leather bags and purses made in accordance with Japanese standards in cooperation with Kawano Japan. Monos group also signed a contract to sell its products to the Japanese market. The organic cosmetics producer ‘Spirit of Nature’ visited the best organic beauty product shopping center of Japan, making product development research and their products will be analyzed by testing laboratory of Japan.

Director of the Commercial Department of the Mongolian Commodity Exchange LLC D.Oyun-Erdene met with authority of a Japanese investor company, which is interested in privatization of stock exchange and made first steps of cooperation.

The Embassy of Mongolia in Japan will promote Mongolian light industry sector to the Japanese market step by step and plans to hold a meeting with representatives of leather industry in September.

B.Misheel

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Mongolian Customs Agency generated 1.2 trillion MNT in state revenue in the first half of 2018 www.gogo.mn

In the first half of 2018, the Mongolian Customs Agency generated 1.2 trillion MNT in state revenue. The figure represented a 71 percent increase compared to the average of the past five years. Key drivers for the increase were value-added tax growth of 43.7 percent (192.1 billion MNT) and the customs duty growth of 42 percent (90.2 billion MNT). National Statistical Office analysts noted that GDP growth was 6.1 percent as of the end of June, due to favorable economic indicators.

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ADB offers loan to Mongolia for road improvement www.xinhuanet.com

ULAN BATOR, July 23 (Xinhua) -- The Asian Development Bank (ADB) on Monday signed a deal worth 60 million U.S. dollars with the Mongolian government to help the country renovate its roads.

Mongolian Finance Minister Khurelbaatar Chimed and Yolanda Fernandez Lommen, ADB country director for Mongolia, signed the agreement at a ceremony in Ulan Bator.

The money will be earmarked for the renovation of 311 km of roads along the routes of Ulan Bator-Darkhan and Darkhan-Altanbulag, crucial parts in Mongolia's road corridor sections that link with China and Russia, Khurelbaatar said.

The renovation work will begin later this year, he added.

The 27-year loan will have an interest rate of 0.6 percent and principle payments will be waived during the four years, he said.

"Road development is very important for any country's socio-economic development. Having good and safe roads will create many good opportunities for the economy through trade and tourism," Lommen said.

According to Mongolia's Ministry of Road and Transport Development, the East Asian country with a total land area of 1,564,116 square km has a road network of about 50,000 km, but less than 15 percent has been paved.

Over the past 25 years, the ADB has implemented about 280 projects and programs in Mongolia involving a total of 1.9 billion dollars in fields such as health, social protection, infrastructure and urban planning, the ministry said.

Editor: xuxin

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Tokyo hosts Mongolia-Japan Business Forum www.akipress.com

The Mongolian-Japanese Business Forum was held in Tokyo with the aim of increasing exports from Mongolia to Japan and intensifying the partnership agreement.

Over 120 entrepreneurs from Japan and Mongolian representatives from 15 entities attended the forum.

Chargé d'Affaires of Mongolia to Japan, head of the Foreign Trade Department of the Japan Chamber of Commerce and Industry and representing the organizers Deputy Director of the SME Development Fund at the Ministry of Food, Agriculture and Light Industry and head of the EICT gave opening remarks.

Deputy Director of the SME Development Fund delivered a presentation and provided the Japanese businessmen with actual information of the sector.

In addition, Mongolian representatives of light industry including cashmere and wool, leather, food, cosmetics, freight forwarding and labor force companies provided detailed information on their activities,presenting their capabilities and unique features.

Moreover, officials led by Chairman of Kawasaki Chamber of Commerce and Industry Osamitsu Yamada received Mongolian delegation and the parties signed a memorandum of cooperation.

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China Premier Orders Probe of Vaccine Makers After Violation www.bloomberg.com

Chinese Premier Li Keqiang ordered the government to investigate the nation’s vaccine industry after violations found at a biologics manufacturer heightened consumer concerns about drug safety.

Shares of vaccine makers tumbled in Shanghai after Li said China will crack down on crimes that endanger people’s lives and hold perpetrators responsible. The premier’s order followed an outcry on social media after Changsheng Bio-Technology Co. was fined for having produced and sold low-quality vaccines for infants, as well as found to have fabricated production and inspection data on a rabies vaccine. China’s drug regulator will vet all vaccine makers, China Central Television reported.

Social media users on platforms WeChat and Weibo criticized what many said was lax enforcement by the regulator and government on vaccines. Worried parents also shared articles on how Chinese families can vaccinate their children in Hong Kong, while expressing concern about fake or poor-quality vaccines available in China.

Demand for vaccines in China is on the rise, driven by loosened family planning policies, increasing awareness and an aging population. The country’s 30 billion yuan ($4.4 billion) vaccine market is expected to double by 2021. The rapid growth of the vaccines market has also been tainted with safety issues, with consumers in an uproar in 2016 over expired vaccines being sold nationally.

Shares Suspended
China’s securities regulator is also investigating Changsheng over disclosure violations, the company said in a statement to the Shenzhen stock exchange on Monday. Changsheng, which has a market capitalization of more than $2 billion, said it will cooperate with the investigation. The stock dropped by the 10 percent daily limit as trading resumed following a suspension during morning trading. The shares fell that amount every day last week after the company disclosed the violations.

The biologics manufacturer said on July 19 it was fined about 3 million yuan ($500,000) for producing and selling poor quality infant vaccines, after China’s drug regulator last year probed violations in its manufacturing of a childhood vaccine that protects against tetanus, whooping cough and diphtheria. The company said it has stopped production of the infant vaccines.

That disclosure came after Changsheng said on July 16 that it halted production and recalled a rabies vaccine under orders from the government. The company, based in the northeastern city of Changchun, issued an apology to vaccine users and investors in a statement Sunday evening.

Vaccine Demand
Li’s call for an industry-wide investigation caused stocks to tumble, with shares of many vaccine companies falling by the daily limit on Monday. Shenzhen Kangtai Biological Products Co., which produces vaccines against hepatitis B and pneumonia, lost 10 percent, as did Chongqing Zhifei Biological Products Co., the marketing partner in China for Merck & Co.’s Gardasil vaccine against the human papilloma virus that can cause cervical cancer. Both have seen their share prices jump more than 57 percent this year on growing demand for vaccines.

In the 2016 vaccines scandal, more than 200 people were detained after an investigation revealed improperly stored or expired vaccines had been illegally sold throughout the country. Product safety is a key issue in the country, where consumers still remember a tainted-milk scandal that poisoned thousands of children a decade ago. At the same time, China has overhauled regulations to bring innovative new drugs to the world’s second-largest pharmaceutical market.

— With assistance by Daniela Wei, Bruce Einhorn, and Jacob Gu

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Bio of four articles on Oyu Tolgoi www.zgm.mn

OPINION: by Baabar
I wrote four articles on Oyu Tolgoi (OT) in the past. The “Oyu Tolgoi”, (Daily Newspaper, September 14, 2008), “Oyu Tolgoi on the way to its real owner” (Daily Newspaper, July 18, 2009), “Baron Robert” (Daily Newspaper, February 1, 2010) and “Oyu Tolgoi agreement is terrible” (Daily Newspaper, May 15, 2011). A global giant BHP conducted exploration around OT deposit and drilled several holes in hopes of finding copper; however, they retracted the license since they did not find anything. After this, a small company named Ivanhoe Mines tried its luck there. It is said that they drilled 150 holes and did not find anything and was about to give up when they got lucky and found copper deposit in depths of 600 meters. This was in 2001. First of all, this deposit containing 72 billion ounce of copper and 30 million ounce gold was the biggest luck for Mongolia. However, this vast wealth, which was not used until today, became the root of the biggest quarrel, argument and fight of this decade. If the deposit was not found, we could not have found it ourselves. Maybe, we would have lived peaceful to that extent?! There is a Mongolian proverb that says “do not tell rumors to a bad man, do not show water to a stubborn cow!” Ivanhoe is a junior that tried its luck. They took a risk in order to discover huge deposits and sell it to big companies that can develop mine in those deposits. That is actually the general principle of mining businesses. In my article “Baron Robert”, I compared him to Baron Ungern. Ungern is a crazy genius. He came to Mongolia to bring back Chinese, Mongolian and Manchurian emperors back to their thrones and stabilize the statehood and chased away the Chinese.

If there was no Ungern, current independence of Mongolia would have been very doubtful. However, Ungern was cursed by Mongolians for several generations for making Mongolia independent. This must be the game of fate. Robert Friedland also cursed by Mongolians for discovering this vast wealth in Mongolia which was never found before. “He obtained exploration license of OT which was abandoned by global giant BHP after conducting explorations that cost billions of dollars and found nothing. This is a fact. If he did not find anything, he would have gone bankrupt; however, he was lucky enough to find the largest copper deposit in the world from the Gobi desert of Mongolia. This is also a fact. Rather than Friedland, Mongolians were the lucky ones. Only a crazy person would take such a crazy step. If he did not find OT and took such an unbelievably brave risk, Mongolia would have remained as an abandoned country that nobody is interested in. This is also a solid truth. Friedland started promoting Mongolia as an unbelievably good country in the world in an attempt to save his huge investment and asset that was on the verge of bankruptcy. He lied through his teeth, saying “there are room for corruption in Mongolia”, “its laws are reliable”, “the judicial system is very solid”, “the Government keeps its promises” and “the Parliament is very good and the lawmakers are honest”, etc. This promotion of Mongolia, which was based on Friedland’s personal interest, attracted western companies and those who do not know much about Mongolia to invest here. This is also another fact. Robert is one of those people who brought the revival of new Mongolia in the 21st century.

Maybe, in some other places, he is called “Toxic Bob”; however, he did not cause any harm for Mongolians. On the contrary, he actually helped us. This is an inevitable truth. Business entrepreneurs like him, who takes risk in order to get profit, brought development of today’s world. This is the true history. However, his name is used as a curse in Mongolia. Cursing him is a big opportunity to demonstrate one’s patriotism. Anybody related to him, talked with him and/or smiled to him are identified as public enemy, and demonstrating one’s patriotism is one of the stages for our generation to get awards,” says the “Baron Robert” article. Since Ivanhoe cannot develop the giant deposit like OT on its own, it promoted it throughout the world and brought in a giant company called Rio Tinto. “Ivanhoe Mines-Mongolia” is a company which holds the license of the deposit established by Ivanhoe. Rio Tinto, which lent huge sum of money to this company, came to convert its loan into company shares. This was perceived as if foreigners were taking over Mongolia’s OT deposit. Hysteria that Mongolians, specifically Mongolian state, should rob 34 percent, or even 50 percent, of a foreign company took ground. Comments such as “why Mongolians have to give 66 percent of our wealth to others as a gift” became a trend. Actually, OT is Mongolia’s and nobody tried to take it away from us and nobody has such right. It was just a matter of arguing about and fighting over the shares of a foreign company established according to Mongolian law and has the mining license.

When Rio became a player on OT, “corruption” became impossible
“Someone literate cited from the internet and talked on TV about how Friedland is exploiting Mongolia to their skin. Friedland, who wanted to boost his company shares, exaggerated in Brazilian stock exchange, saying “it is possible to spend five dollars in OT and earn 100 dollars”. Unless it is a narco business, there is no such business with such high returns in the world. While he was trying to promote his company and sell the shares on the exchange, many people understood it as if he was selling our land for higher prices abroad. Exaggerated talks of Friedland about how OT is massively profitable were perceived by many Mongolians as though he is pocketing 95 percent and about to run away. It is a deposit that is not developed and used until today. Many socially-active people saw that it is possible to get rich by blackmailing. They did not want to understand common business practices and they do no need to. Their goal was different. A certain policy was developed to force Mongolian people to own a minimum of 50 percent of OT. Numerous street demonstrations were organized. It became inevitable that anybody who spoke with a sound logic will be identified as a traitor from the motherland.

The more stupid they acted, the more patriotic they have become. This company, who not only knows, but comply strictly with proper ethic and standards, was ready to cooperate with Mongolians unlike Friedland. They developed the deposit according to established international practices and standards. When they arrived in Ulaanbaatar, they met with some insane people, really. The negotiation was to be conducted not by the Government, but Parliamentary opposition in charge of this issue. They said, when Ivanhoe was about to exploit Mongolia, they were shocked by 68 percent windfall profits tax and this way, they secured rights to get 30 percent stake ownership for the Government. Mongolia obtained 30 percent stake and then talked about having them finance it. Then the 30 percent stake ownership felt too little and they wanted to get 50 percent and said we will not be responsible for the financing. They often reminded the investors to get out of Mongolia.” This is what I wrote in the article “Oyu Tolgoi”. In 2009, Rio Tinto, Ivanhoe Mines and the Government of Mongolia concluded a Preliminary agreement on three partite ownership of the OT. As for Ivanhoe, they sold half of their shares and were interested in selling the remaining shares at a higher price and they actually sold it soon after.

As for the Government of Mongolia, ownership of this company’s shares was a very illogical matter. First, digging earth is not the Government’s work. It would lead to large corruption and bribery cases. Secondly, it was possible to get half of OT’s revenue or more from taxes and royalties only, without lifting a single finger. There was no use of ending up in debt and taking a risk. However, the Parliament demanded and legalized the Government to own a minimum of 34 percent of the Ivanhoe Mines Mongolia company, borrowing from its future profits. Such huge Western investment in Mongolia was a big surprise for Russia and China. During his visit to Mongolia, Russian President Putin inquired his ambassador about this. That ambassador did not know anything about this. So he was removed immediately. Later, when I visited Moscow, I heard that the Ministry of Foreign Affairs and National Security officials complained that Mongolians did not include them in the OT deal. Chinese also did not notice that large global mining company was aiming to make a huge investment in Mongolia. The fact that a large amount of Western investment was decided without the participation of these two giant neighbors means a real danger to the buffer zone.

If the Parliament was to confirm its decision to allow in Rio Tinto, this could have been rejected by the lawmakers’ votes. I have written an article “Oyu Tolgoi on the way to its real owner” to explain that western investment has been stalled under implicit and strong pressure of China, which was the only neighbor who can invest instead of them, and that the real “owner” of OT was China. Chinese were really trying to get the shares of Ivanhoe Mines at a good price. “During the last six years, Ivanhoe Mines Mongolia, sat down behind the negotiation table with the Government three times. A corruption method that stretched to three Parliament was perfected in this long period. There is an unconfirmed report among the public that some influential members of the first Parliament, especially, some Government members received large bribery from the Ivanhoe Mines. Based on this, the next Parliament considered they were discriminated and began to demand their shares in various forms. Over the time, it became clear that some groups of the Parliament lawmakers were organizing almost an armed attack and protest as the number of racketeer-patriots against the foreign companies was growing. It is documented that some demonstrations were led by a Cabinet member who demanded money.

However, when Rio Tinto, with its good reputation, became a player on OT, “corruption measures” became impossible. With a sudden global economic downturn, commodity prices fell sharply and shares of mining companies plunged. This became a good opportunity for China, which needed commodity and raw materials for its rapid development. They managed to increase their hard currency reserve to USD 2 trillion and began to acquire mining companies as they were cheaper. It was agreed that China would invest nearly USD 18 billion in Rio Tinto; however, it failed and that became almost a national tragedy that went beyond the business circle and turned into a political conflict. Mongolia’s economy, which depends solely on copper export, deteriorated sharply because of the crisis and its budget deficit reached hundreds of millions of dollars. Therefore, Mongolia negotiated with China to get USD 3 billion loan. This deposit were to turn Mongolia into another Kuwait in a short time and the lawmakers knew this very well. However, there was one bad disadvantage. A group which made such important decision will not get any direct benefit. This was demanded during the last six years directly and indirectly and failed”.

That is what I wrote in the article “Oyu Tolgoi on the way to its real owner”. During the OT negotiation, the three parties were always in conflict with each other. Especially, the conflict between Ivanhoe Mines and Rio Tinto was very serious; however, Mongolian side saw them as one party. Generally, the agreement was different than the international practices. Three ministers that represented Mongolian Government had no relevant experience and knowledge. Actually, there was not a single person with such relevant knowledge and experience in Mongolia. According to international practices, not only the government, which owns the wealth, but also private companies need to hire experienced companies to conclude such agreements. It was definitely not a simple matter that ministers and officials could sit behind the negotiation table. For writing these, I made many enemies such as racketeer, corrupt officials, blackmailers etc. I do not want to name them as enemies of Mongolia that betrayed national interest. Actually, they do not have such concepts. That is just how they are. They are born like that and therefore, what can we do? They are just trying to live in the given circumstances. Motherland and the future of the country are too holy and alien to them. I will tell a new story of what happened to Oyu Tolgoi four years after signing the agreement.

2013-05-19

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