1 ‘ASIAN DOOR 2018’ FAIR KICKS OFF WWW.MONTSAME.MN PUBLISHED:2018/11/21      2 BEYOND BITCOIN: THE OTHER CRYPTOCURRENCIES YOU SHOULD KNOW TOO WWW.CNN.COM PUBLISHED:2018/11/21      3 ATTRACTING INVESTMENT FROM FRANCE TO AGRICULTURAL SECTOR WWW.MONTSAME.MN PUBLISHED:2018/11/21      4 MONGOLIA AND RUSSIA TO EXPAND COOPERATION IN TRANSPORT SECTOR WWW.MONTSAME.MN PUBLISHED:2018/11/21      5 NEWLY-OPENED CHINA-MONGOLIA FRIENDSHIP CULTURAL CENTER TO BOOST TIES WWW.CHINA.ORG.CN PUBLISHED:2018/11/21      6 UN APPRECIATES MONGOLIA’S CONTRIBUTIONS FOR NORTHEAST ASIA WWW.NEWS.MN PUBLISHED:2018/11/21      7 BHP OFFICIALLY DROPS 'BILLITON' FROM NAME WWW.MINING.COM PUBLISHED:2018/11/21      8 THE NOTICE: WWW.MONGOLIANBUSINESSDATABASE.COM PUBLISHED:2018/11/21      9 IRKUTSK REGION SUPPLIES USD 31 MILLION PRODUCTS TO MONGOLIA WWW.MONTSAME.MN PUBLISHED:2018/11/20      10 27 PARLIAMENT MEMBERS SUBMIT PETITION ON CABINET DISSOLUTION WWW.ZGM.MN PUBLISHED:2018/11/20      ОРОН СУУЦНЫ БАРИЛГЫН ӨРТГИЙН ИНДЕКС III УЛИРАЛД ЖИЛИЙН ДҮНГЭЭР 15 ХУВИАР ӨСЖЭЭ WWW.BLOOMBERGTV.MN НИЙТЭЛСЭН:2018/11/21     САЙЖРУУЛСАН ТҮЛШНИЙ БОРЛУУЛАЛТ УДААШИРЧЭЭ WWW.ZGM.MN НИЙТЭЛСЭН:2018/11/21     ЗАСГИЙН ГАЗРЫН ТОГТВОРГҮЙ БАЙДЛААС ҮҮДЭЖ “ГЭРЭГЭ” БОНДЫН ХАНШ БУУРЧЭЭ WWW.MEDEE.MN НИЙТЭЛСЭН:2018/11/21     ЭДИЙН ЗАСГИЙН ӨСӨЛТ 7.1 ХУВЬД ХҮРНЭ ГЭВ WWW.EAGLE.MN НИЙТЭЛСЭН:2018/11/21     ТӨРИЙН ҮЙЛЧИЛГЭЭ ЦАХИМД ШИЛЖЛЭЭ WWW.UNUUDUR.MN НИЙТЭЛСЭН:2018/11/21     УЛААН БУУДАЙ, ТӨМСНИЙ ДОТООДЫНХОО ХЭРЭГЦЭЭГ БҮРЭН ХАНГАНА WWW.GOGO.MN НИЙТЭЛСЭН:2018/11/21     "ГУДАМЖ" ТӨСЛИЙН 14 БАЙРШЛЫН, 50 ТЭРБУМ ТӨГРӨГИЙН БАЙГУУЛАМЖИЙГ НИЙСЛЭЛИЙН ӨМЧИД БҮРТГЭЖ АВЛАА WWW.MONTSAME.MN НИЙТЭЛСЭН:2018/11/21     САНАМЖ: WWW.MONGOLIANBUSINESSDATABASE.COM НИЙТЭЛСЭН:2018/11/21     ЭРЧИМ ХҮЧНИЙ ИХ АЧААЛАЛ 973 МВТ-Д ХҮРЧЭЭ WWW.EAGLE.MN НИЙТЭЛСЭН:2018/11/20     ЗАСГИЙН ГАЗРЫГ ОГЦРУУЛАХ БИЧИГ ӨРГӨН БАРЬСНЫ ДАРАА "ГЭРЭГЭ" БОНДЫН ХАНШ БУУРЛАА WWW.BLOOMBERGTV.MN НИЙТЭЛСЭН:2018/11/20    

Events

Name organizer Where
Frontier's "Invest Mongolia Tokyo 2018" Frontier Securities Tokyo Japan
"Open to Export" ICC WTO International business award ICC WTO London

NEWS

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UK to contribute to build geo-database of Mongolia www.montsame.mn

Ulaanbaatar/MONTSAME/ On December 12, D. Sumiyabazar, Mining and Heavy Industry Minister D.Sumiyabazar met with Catherine Arnold, Ambassador of the United Kingdom of Great Britain and Northern Ireland to Mongolia.

Beginning the meeting, Catherine Arnold said it looks forward to cooperate with the Ministry and requested to let her know about what cooperation possibilities they have.

In turn, D.Sumiyabazar expressed his gratitude to her request and stressed out of an importance of foreign investment in mining sector. He briefed about large projects being implemented in the sector. He also added that it encounters water issue to put strategically important deposits in southern Mongolia into economic circulation and to develop processing industries and infrastructure further.

For this reason, the Minister put forward a request to UK to render support and cooperate in implementing projects to transfer water through pipelines from eastern and western part to Gobi, instead of using underground water of Gobi region.

The Ambassador expressed her support for it and said that UK will support building ‘Geo-database of Mongolia’ and organizing ‘Mongolia Investors’ Forum’ in London.

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Gas pipeline to be ready in 3 years www.chinadaily.com.cn

Demand for clean fuel set to increase and may outstrip domestic output

China is expected to complete the China-Russia East-Route Natural Gas Pipeline by the end of 2020, which will send up to 38 billion cubic meters of gas annually from Russia to China, according to China National Petroleum Corp.

The first phase of the pipeline linking Heihe in Heilongjiang province and Changling in Jilin province will be completed by October 2019, with the rest of the domestic pipelines linking Changling to Shanghai completed by the end of 2020, CNPC, the country's largest oil and gas producer by annual output, said on Wednesday.

Li Li, energy research director at ICIS China, a consulting company providing energy market analysis, said the step will further guarantee China's energy diversification.

"Completion of the natural gas pipeline will massively help ease China's shortage of natural gas while further diversifying China's energy supply," said Li.

China's natural gas demand will continue to increase toward 2040, outstripping domestic output by around 43 percent, according to a recent report released by the International Energy Agency.

China's annual gas production will more than double to 340 billion cu m by 2040, while consumption is expected to grow even faster, reaching 600 billion cu m, it said.

The natural gas pipeline is the China leg of the Russia-China natural gas pipeline, dubbed "Power of Siberia" that will provide China with natural gas under a 30-year term, with a planned annual capacity of 38 billion cu m.

The 3,371-kilometer China-Russia natural gas pipeline starts in Heihe and ends in Shanghai, passing through Heilongjiang, Jilin, the Inner Mongolia autonomous region, Liaoning, Hebei, Tianjin, Shandong, Jiangsu and Shanghai.

Work on the Russian section of the east-route pipeline began in eastern Siberia in 2014 and in China in 2015.

Han Xiaoping, chief information officer of China Energy Net Consulting, said the two countries, the world's second-largest energy consumer and the world's top energy producer, have always complemented each other as producers and exporters.

The pipeline, one of the latest examples of energy cooperation between China and Russia, benefits both countries, he said.

The "Power of Siberia" pipeline is one of the biggest Russia-China projects. The two countries signed a $400 billion 30-year agreement in 2014 to deliver 38 billion cu m of Russian gas to China annually.

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Coal loading at Tavan Tolgoi suspended until border jam clears www.montsame.mn

Ulaanbaatar /MONTSAME/ Starting from December 13, Erdenes Tavan Tolgoi JSC, Tavan Tolgoi JSC and Energy Resources LLC have suspended their coal loading at Tavan Tolgoi mine.

The Minister of Mining and Heavy Industry took the measure in an effort to reduce the 120 km logjam of coal trucks at the Gashuunsukhait border crossing.

“It has been four months since the situation arose at the Gashuunsukhait border crossing. The decision aims to protect the rights of 4,000 truck drivers who are waiting to pass the border,” said D.Ariunbold, CEO of Erdenes Tavan Tolgoi JSC on December 14, speaking to a MONTSAME correspondent.

Is has been estimated that the 4,000 trucks will pass the border within 7-8 days, after which the coal loading will resume at the Tavan Tolgoi mine. After the logjam is relieved, the companies will begin to load coal on a quota in correlation with the number of trucks passing the border on daily basis so as to avoid similar complication. The quota is 45 percent for Erdenes Tavan Tolgoi JSC, 40 percent for Energy Resources LLC and 15 percent for Tavan Tolgoi JSC.

By far, Erdenes Tavan Tolgoi JSC has exported 8.5 million tons of coal although it planned to export 11 million tons of coal in 2017.

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China-Mongolia meat trade full of potential www.globaltimes.cn

In a joint press release issued by the foreign ministers of China and Mongolia on December 4, the Chinese government expressed its willingness to give positive consideration to Mongolia's desire to expand its exports of mineral and energy products as well as increasing its beef and mutton exports.

While we are quite familiar with Mongolia's mineral and energy products, not so much attention has been paid to the country's meat exports. In fact, Mongolia in recent years has started to export meat products in order to build up foreign exchange earnings. According to Mongolian media reports, the country has already exported large amounts of meat products to countries including China, Russia, Kazakhstan, Japan, Iran, Vietnam and Qatar, with the annual export volume expanding five times compared to the level in 2013. From the perspective of Mongolia's foreign trade in 2017, the Mongolian government obviously intends to promote its economic growth by means of expanding exports of meat products. Such a development trend deserves our attention.

During the 16th session of the Vietnam-Mongolia Inter-Governmental Committee for Economic, Scientific and Technical Cooperation, held in August in Ulan Bator, capital of Mongolia, both countries reached an agreement on meat exports. Mongolia will export 200 tons of goat meat to Vietnam between 2017 and 2018. The two governments believe that the signing of export agreements on livestock products will be a great boost to the goal of achieving bilateral trade of $70 million by 2020.

Also in August, when a Saudi Arabian government delegation visited Mongolia, both parties conducted extensive discussions on the establishment of a joint-venture meat processing plant and a relevant working team.

In November, during a political consultation meeting between Mongolia and Paraguay, Mongolia showed great interest in Paraguay's experience in beef exports and expressed a desire to strengthen bilateral exchanges and cooperation in relevant fields.

In my opinion, there are several reasons behind Mongolia's growing focus on meat product exports and cooperation in its foreign trade. First, Mongolia's meat production is significant. At present, the country's livestock industry can not only fully meet the domestic demand for meat products, but also has the potential for exports. Statistics show that Mongolia's total livestock herd reached 55.97 million at the end of 2015, and the figure reached 61 million at the end of 2016. The country's current consumption of meat is roughly 11 million livestock per year, with 6 to 9 million livestock available for meat exports. 

Second, the government has the need for diversified economic development. For a long time, Mongolia's mineral exports accounted for about 80 percent of its total export value. In comparison, its exports of animal and livestock products was so low that the value was nearly negligible. Mongolia's foreign trade has been heavily dependent on its mining industry, leading to imbalanced development of its industrial structure. Its economic development also appears unstable, and is vulnerable to fluctuations in global market demand for minerals and prices. Thus, in order to promote more diversified economic development, the Mongolian government has started to tap into the potential of meat exports.

Mongolia will continue to vigorously promote its meat exports in the future, but it should be noted that the country's actual meat export volume has always failed to meet the target, with its 2015 exports only reaching 3.8 percent of the planned export volume. 

Due to some bottleneck factors, Mongolia still faces many uncertainties in exporting meat products. First, the quality and safety of its meat products is not guaranteed, which directly affects its export prospects given the relatively low level of prevention and control of livestock diseases in the country. Second, its raw meat processing capacity is limited. Official data shows that there are more than 40 meat processing factories in Mongolia, but only 10 have strong productivity and most of them do not operate year-round. Finally, the structure of its livestock also constrains exports. At present, horse meat is what the international market demands the most from Mongolia, and Russia and China also mainly import beef and horse meat from Mongolia. But sheep and goats account for nearly 90 percent of the country's livestock herd, with horses and cattle accounting for only 10 percent.

Mongolia's intention to enhance exports of its meat products and its lack of relevant capacity provides a large amount of potential for cooperation with China. The two countries can expand their trade in meat products by establishing joint-venture meat processing plants or increasing or expanding cold-chain logistics zones for meat trade and processing in their border areas. Also, both parties can strengthen cooperation on prevention and control of livestock diseases and the development of relevant vaccines. In addition, China should attach great importance to technical aid for Mongolia in the prevention and control of foot-and-mouth disease and other livestock diseases, which would provide a great boost to bilateral ties.

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Mongolia Vows Action to Get Off European Union Tax Haven Blacklist www.nytimes.com

ULAANBAATAR — Mongolia needs to take action at "all levels of government" to get itself removed from a European Union blacklist of tax havens, its foreign minister said, following talks with European counterparts.

The landlocked nation between China and Russia is one of 17 jurisdictions outside the European Union that risk losing access to EU funds, or facing other forms of censure, after the bloc this month deemed them to not be cooperative on tax matters.

"We have to implement a series of coordinated measures at all levels of government," Foreign Minister Damdin Tsogtbaatar said in comments posted on Facebook on Tuesday, without mentioning specifics.

The foreign ministry verified the remarks to Reuters on Wednesday, but declined to provide details.

Tsogtbaatar said he discussed the issue last week with officials of each EU member nation at a ministerial meeting in Vienna of the Organisation for Security and Co-operation in Europe.

It is important that Mongolia comply with international standards for tax, said Dendevsambuu Onchinsuren, the country managing partner for tax accountancy Deloitte Onch in Ulaanbaatar, the capital.

"Mongolia needs to cooperate with the EU," Onchinsuren said. "Also it needs to improve its transparency."

In 2011, Mongolia took the rare step of cancelling a tax treaty with the Netherlands, saying it would cost the country income from the Oyu Tolgoi mine jointly owned by mining giant Rio Tinto and the Mongolian government.

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EBRD lends US$ 8 million to Mongolian pharmaceutical manufacturer www.ebrd.com

The EBRD is lending US$ 8 million to Monos Holding LLC – a holding company of Monos Group, a leading pharmaceutical conglomerate in Mongolia – to help the firm invest in new equipment to expand manufacturing capacity, develop training, and reorganise long-term capital financing to support its wholesale business.

The five-year loan will enable Monos Group to become more competitive, by supporting the certification of manufacturing capacity and improving employee skills through training. By the end of 2019 the firm aims to secure Good Manufacturing Practice (GMP) certification and to have at least 30 new employees who are trained regularly according to GMP standards.

The optimisation of the company’s balance sheet will support Monos Group – which is owned by Mr Luvsan Khurelbaatar, a prominent Mongolian businessman, and his wife and two children – in becoming more resilient.

Anand Khurelbaatar, CEO of Monos Holding, said: “Monos has been working successfully with the EBRD, which has provided substantial support to the development of Mongolia, since the first investment agreements were signed in 2010. We are happy that the first stage of the GMP production facility project, the largest project in the Mongolian pharmaceutical sector and implemented jointly by Monos and the EBRD, has been completed and that we are now proceeding with the signing of the second-phase investment. We would like to express our gratitude to the EBRD, not only for the financial support it has provided to us, but also for being a business advisor, partner and mentor. We hope that our cooperation with the EBRD will continue to expand.”

Irina Kravchenko, EBRD Associate Director, Head of Mongolia, said: “Monos is the Bank’s longstanding client and we are very pleased with the progress the company has made in expanding its activities and introducing best manufacturing practices in Mongolia’s pharmaceutical sector. We are happy to continue supporting the firm’s growth and believe that our support will help to further strengthen its competitiveness as well as contribute to the diversification of the local economy.”

The Bank is a leading institutional investor in Mongolia. To date the EBRD has invested more than €1.42 billion in over 92 projects in the country. Its investments aim to make the local economy more competitive, integrated and resilient. According to the EBRD’s latest regional economic forecast, published in November, the Mongolian economy will grow by 2.6 per cent this year and 3.0 per cent in 2018.

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Credit rating on MMC raised www.montsame.mn

Ulaanbaatar /MONTSAME/ Long-term credit rating on Mongolian Mining Corporation (ММС) or Energy Resources LLC raised to ‘B-’ from ‘D’ and revised to ‘Stable’ by S&P Global Ratings. In other words the company’s operation and financial condition has been evaluated positively.

In review which made by S&P says "We completed our review on MMC’s operation and capital structure. It is appreciated that coking coal price is expected to be stable for next 12 months and the company can meet cash flow from internal resource entirely at current condition and retain liquidity.

Currently credit rating on Mongolia is ‘В-/ В’. Corporate credit rating does not excess credit rating on the country and it associates certainly with each other. For that reason credit rating on MMC assigned to ‘B’, mentioned in the review as well.

Energy Resource LLC has successfully accomplished structural reform on credit in 2016.

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December 13, 2017 trading report www.mse.mn

On December 13, 2017, 854,159 shares of 22 firms listed as Tier I, II, and III were traded. 6 firms’ shares increased in price, 12 decreased and 4 remained unchanged. Khunnu Management /HBZ/ was the top performer, increasing 14.99 percent, whereas E-Trans Logistics JSC /ETR/ was the worst performer, decreasing 14.90 percent.

The MSE ALL Index decreased by 1.78 percent to stand at 1,200.94 points. The MSE market cap stands at MNT2,557,178,728,873

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Aspire Mining attracts $16.5 million to advance coking coal project in Mongolia www.proactiveinvestors.com.au

The company aims to take the Nuurstei Coking Coal Project into production within 18 months.

Aspire is starting a drilling and exploration program
Aspire Mining Ltd (ASX:AKM) has successfully completed its fully underwritten $16.5 million pro-rata renounceable entitlement offer at an issue price of $0.012 per share.

The funds will be used to expedite development of Aspire’s 90% owned Nuurstei Coking Coal Project in Mongolia.

Aspire aims to take the project into production within 18 months.

The company is now planning to undertake a drilling and exploration program at the Nuurstei project.

Rights issue details

Eligible shareholders had the opportunity to subscribe for six new shares for every five shares held at an issue price of $0.012 each.

The rights issue was fully underwritten by Patersons Securities Limited and sub-underwritten by the company’s major shareholder Noble Group (SGX:CGP).

Noble subscribed for the full amount of its entitlement (circa $2.97 million) and took up a further amount of $0.59 million on a priority sub-underwriting basis.

This takes Noble’s voting power in the company to 19.9% on an undiluted basis.

Drilling and exploration program commencing

Aspire has planned a $2 million drilling and exploration program at the Nuurstei Coking Coal Project.

The program aims to increase current resources and establish an ore reserve, which will then lead to a new resource model planned to be completed in the first quarter of 2018.

Capital costs for the development of Nuurstei have been further refined, with the current estimate of US$13 to US$14 million to be confirmed in the feasibility study process.

The end objective of these studies is to confirm an economically viable mining operation commencing within an estimated 18 month period.

David Paull, managing director, said: “Further to our announcement on Tuesday 5 December, we are pleased to have successfully raised the full amount of $16.5 million from the fully underwritten rights issue.

“The underwriting was supported by a strong panel of institutional sub-underwriters seeking to position themselves as shareholders and we welcome them in that capacity.

“Our focus is now squarely on confirming the feasibility and commencing the development of the Nuurstei Coking Coal Project.”

Debt reduction on track

Aspire intends to pay $0.19 million of the funds raised under the rights issue to Noble which, when combined with Noble’s participation in the rights issue, will result in a total reduction of $3.75 million in the amount owing to Noble.

This completes the first of a further series of transactions designed to reduce the existing US$6.65 million debt owing under the Noble Facility to US$1.8 million.

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Audit of Oyu Tolgoi and Erdenes TT planned www.news.mn

The Parliamentary Budgetary Standing Committee held a meeting on Tuesday (12 December) to discuss the draft 2018 audit bill.

According to the Mongolian National Audit Office, the institution is planning to audit to country’s biggest mining companies such as Oyu Tolgoi, Erdenes TT as well as the Governmental Vehicle Fleet, the Civil Aviation Authority, the Mineral Resources and Petroleum Authority, Presidential Election Spending, reports on implementing ASEM 2016-2017, the State Housing Corporation, and Ministry of Defence investment spending.

The projected cost of the audit as set out in the bill is over MNT 700 million.

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