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[OT Director Tsagaan to resign, Current Account Deficit jumps 16.7% to $2.1B in July, and total 1 week BoM bills jumps 31% to ₮1.25T]

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Overseas Market

Oyu Tolgoi Director Tsagaan Announces Intent to Resign, News.mn Says

By Michael Kohn

August 30 (Bloomberg) Puntsag Tsagaan, one of four Mongolian directors on Oyu Tolgoi LLC's board, signaled his intention to resign, website news.mn reported.

The resignation may be submitted today, the website quoted Tsagaan as saying in an interview. Tsagaan, who joined the Oyu Tolgoi board in June 2010, said his resignation was in line with the completion of the first phase of the mine and the next phase would require a new board member.

Tsagaan's stepping down is the latest episode in the Mongolian government's long spat with partner Rio Tinto Group over the $6.6 billion Oyu Tolgoi mine. The companies are at loggerheads over a $5 billion project financing package to develop the second stage of the mine.

The project financing conditions for the second stage of the mine are "unacceptable" for Mongolia, Tsagaan said.

Earlier this month, Turquoise Hill Resources (TRQ), the unit of Rio Tinto (RIO) that owns 66 percent of the mine, announced it was suspending operations on the underground part of the mine. About 1,700 workers were subsequently laid off.

The role on the board doesn't complement his day job as chief of staff for the Office of the President of Mongolia, Tsagaan said.

Link to article

 

OT LLC Board member P.Tsagaan: Shouldn't rock the boat we're on

August 30 (Business-Mongolia) This is a translation of NewsWeek interview with President's Chief of Staff and OT LLC Board Member P.Tsagaan appeared on 30th of August, 2013.

We heard that you are resigning from the OT LLC board?

I haven't given my notice yet. However, I am considering to give my resignation notice within today.

What is the reason of your resignation?

I have worked on OT LLC's board for three years. In this period, all the mine development plans that was on paper became a reality successfully within the envisaged time-frame. The gigantic grinding mills of the concentrator is in operation since the 27th of December, 2012. The shipment of the concentrates has commenced from last month. As stated in the Investment Agreement, the open pit is in full operation mining over 100 thousand tons of ore. This achievement will be announced throughout the world soon. Isn't it a good news? The underground development has already been started. In brief, I have served my duty.

My job has changed since I took on the position of a board member. After I became the Chief of Staff, there was a misconception that I am representing the President. After all, due to the new phase starting at the mine, a new person will suit better for the job.

How do you evaluate your role as a board member?

I think as members of the board, we served our duty well in the frame that is stated in the Shareholders Agreement and the company charter. Our historic goal was to complete the first phase of the mine's development. The first phase is finished. However, the facilities was in place before the schedule, despite that, there was external forces that has delayed the operation. But, the operation commenced on time. Nevertheless, I am pleased with my contribution to the Mongolia's economy, as it has another pillar to stand on. Oyu Tolgoi is one of the biggest developments of the century.

In the period of the first phase, I am also glad that we have amended the Shareholders Agreement decreasing the shareholder loan rate by 5%. The debt pressure for the country has been decreased by USD1.5 billion, think about it, it is as same as what we have raised by Chinggis Bond. It means we have saved a cost in the future.

Furthermore, after our consistent contest on increasing the Mongolian suppliers to the project, we now have an a procurement policy that is supportive of Mongolian businesses. The implementation has just started. Now, the preference goes to the national companies, then joint ventures, and lastly to the foreign companies. There are incentives for the local, Umnugobi companies. This is a better alternative than the uneconomical tax-money distribution. I would like to reiterate that we need pay attention to the implementation of the policy.

There were times when we had to use strong language in the board meetings, but we have made decisions on many critical issues of the project. I am not going to hide that there has been moments in my mind, not everything can be decided as we insist.  I would like to take this opportunity to wish all the best to the people I have worked with in the past.

Three of you have been under a lot of scrutiny when some people criticized you for not being a professional to take on the job. Was the job really that hard only the professionals in a certain industry can do it?

People have different opinions and perspectives. There is no occupation that is specified to work as a board member, but there are questions of competency. Besides my career as a public servant, I worked on boards of Erdenes JVC, and Monrostsvetmet. In short, I think my appointment was due to my experience from the previous jobs and roles I had.

There must have been a great deal of obstacles building such a big mine on a plain steppe. We started to discuss about the Tavan Tolgoi and CHP #5 at the same time. Still, we haven't seen much progress on the latter two?

I would like to emphasize the cooperation effort and support the Mongolian government has given to the project's development.  Of course, there were our infamous bureaucracy and arrogance in parallel with the immodest behaviors of expats working on the project along with other external pressures that we faced. Despite all these, we saw the completion of the first phase. This is a joint success. By the way, all the minutes of the board meetings are recorded in audio and written formats. Therefore, later on, when the minutes will be open as the project's history, people may understand a lot interesting things.

Some people that is outside the project have understanding that the project is completely stopped. How is the reality?

The project is in operation. I have mentioned that the mine is fully operational in its open pit capacity. The open pit will enable us to mine the 20% of the resource. The other 80% is 1300 meters deep underground. It is called the underground which is the second phase. There will be tunnels built 5 meters in diameter, that is as long as the distance between Ulaanbaatar and the northern border. The mining method will be block caving. The ore will be conveyed on a hoist. There will be significant number of machinery and people working under the ground in the 30-40 celsius. In order to operate there will be a great demand of management, ventilation and precise technical schedule.

Many years will be spent to develop the underground mine. We are looking at 3-4 years till the underground mine commencement. The ongoing underground mine development has been halted by Rio Tinto's decision that has been made in London after they imposed the decision on Turquoise Hill Resource and OT LLC. Once the development work has been halted, there will be job redundancies. But, the open pit will be in operation as planned.

What's the reason for Rio Tinto's decision? Was it the company could not perform their duty finance the project as an investor or Erdenes OT LLC's Director Ts.Sedvanchig's letter made an impact?

Financing and management duties are all undertaken by the investor. They have these obligations before Mongolia. It's also true that the amount they are getting for the job is not small. Taking a loan from international banks and financial institutions is just one of the options to finance the project. Perhaps, it has something to do with their interruption on preferred shares financing plan. We can say that the Investment Agreement does not dictate us to finance the project solely by taking a loan. Also, it doesn't prevent it.

There are conditions in the Rio Tinto's loan term-sheet that our side cannot accept in any circumstances, and also contradicts with the Investment Agreement. It is not a secret that there are conditions that is forced on us to see only a single shape after drawing a picture with many edges and shapes.

We can conclude that Rio Tinto is playing a double game by making Mongolia look as a no-go for investors through their meaningless negative PRs. Alright, I do not want to get any more further on this subject. Therefore, we have no other choice to play the game. The letter from Ts.Sedvanchig is not the reason, but the excuse.

So, what is happening?

You have to ask themselves. Perhaps, they won't give you an answer. It's obvious that Rio Tinto is playing a chess on two sides in order to increase their profit from the underground mine. We cannot blame their motivations, but I very much regret that they are deforming our country's reputation in process. The truth is that if we go to a court today, Rio Tinto will lose. However, we want to solve the issues without any legal dispute.

I don't like the fact that our fishing partner is not letting us catch a fish after it got on a boat in order to expand its net and badmouthing us to the other fishers. Things might get out of hands. Things might swing back. God's boomerang laws. I think Australians are well aware how boomerangs work.

When will the underground development will resume?

It will resume. But, it has a little to do with us. Rio Tinto doesn't have the juice. They are considering to draw back what have they financed so far. It will resume after they have a chance to increase their profit from the mine. It is apparent that they are trying to shoot two or three rabbits with a single bullet.

It will be wrong to think that they are only waiting for the government representatives to meet them in London. As we say he who herded the camel knows its behavior (Similar to he knows the water best who has waded through it.), after three years of arguments and talks we have an idea about their behaviors.

Perhaps, the cease of the second phase financing by Rio Tinto is providing us with a chance to contemplate and comprehend about a solution.

You have already decided to resign. After the few years of arguments and discussions, it is easier for you to find a language that they would understand.  Is there anything you would like to tell Rio Tinto?

I would like to say two things. I would like them to be reminded of the things I said in the board meetings. It will be needed. One big-time chairman told me once before his resignation that: "What you had said was true and rightful. If possible, I want to turn back the time for one or two years". Secondly, by slowing the second phase of the project both sides will lose. It may look as if Mongolia is losing today, but in the long-term you might be the biggest one to lose.

What should we be aware of in the future?

Let's work as if there aren't any second phase for OT. Perhaps, the ceasing of the second phase is a chance for us to seek a different solution. Who knows.

In your opinion, how well is the Investment Agreement in terms of profitability for Mongolia?

The agreement should be in textbooks.

In what way?

You can say in many ways. Let's end our interview. If there will be a time to write a memoir, we can talk further at that time.

Last question. Will you be involved in OT project?

I think I will be involved whether I want it or not. I will always be in favor of continuing the project.

Link to article

 

Video: Mongolia's mining blues

August 30 (Reuters TV) Mining Mongolia's commodities reserves is proving to be tougher than expected. Global miner Rio Tinto said earlier this month it would axe thousands of jobs in one of the world's largest untapped copper deposits, a development that may serve as a warning signal for other foreign companies wanting in. Reuters TV Correspondent Cathy Yang reports.

Link to video

 

MP S.Ganbaatar: Labor unions of the world, unite against Rio Tinto!

August 29 (Business-Mongolia) In the Regional Symposium on Occupational Safety and Health and Safety organized by ACTRAV (Bureau for Workers' Activities) Member of Parliament S.Ganbaatar expressed his position on the events happening around Oyu Tolgoi project. He told the press that the OT LLC management or Rio Tinto did not deliver what was expected from the public. Instead of having same level salaries, the pay was significantly lower than the expat peers for the Mongolian nationals. Then he went on criticizing the 1,700 job cuts.

Well, it is logical that if the underground mine development is stopped, there would be no job to perform, thus, making these people redundant. But, it was not his main agenda. His main agenda is to unite the labor unions that has relation with Rio Tinto and take an synergistic measurement. Surprisingly, this initiation started two years ago. He took a examples from the Rio Tinto operations in Canada and Africa. He believes that Rio Tinto is unfair and uses aggressive exploitation methods.

He also criticized that Mongolian government is not taking actions to adopt and ratify the ILO 176th convention which is related to mining health and safety. He believes that mining companies must be transparent on health and safety budget and operation revenues. The symposium is being held in Ulaanbaatar for two days.

MP S.Ganbaatar has been a critic of OT from it's start. His sister worked for OT LLC till her resignation due to salary quarrel last year. It is believed that his sister gave him insight on Rio Tinto operations in Mongolia which the MP found it unfair.

Link to article

 

MEC: POLL RESULTS OF THE ANNUAL GENERAL MEETING HELD ON 30 AUGUST 2013 AND RETIREMENT OF DIRECTOR

August 30, Mongolia Energy Corp (HKEx:276) -- The Board is pleased to announce that the proposed resolutions set out in the Notice of the AGM were duly passed by the Shareholders by way of poll except for resolution 2(b) which was withdrawn and not voted upon at the AGM held on 30 August 2013.

Mr. Liu retired as an executive Director with effect from the conclusion of the AGM.

Link to release

List of Directors and their Roles and Functions – MEC, August 30

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Local Market

NatSec Trading News, 29 August: Top 20 -1.2%, Turnover 9.2 Million

August 29 (National Securities) The MSE TOP-20 Index dropped by -1.2% to 13,700.92 points. 7,971 shares in 17 JSC's traded with a value of 9.2m MNT. Out of 17 companies, 7 were up, 5 were down and 5 were stable.

The top gainer was Bulgan Guril Tejeel (GTJ), limit-up to 2,300 MNT. Rising +7.84% to 27,500 MNT, Gazar Ssuljmel (SUL) was the 2nd biggest gainer of the day. On the decliners side, coal mining companies such as Aduunchuluun (ADL), Sharyn Gol (SHG) were the major losers. ADL's price plunged -13.98% to 1,913 MNT. SHG's price closed down -4.43% to 7,550 MNT. The volume leader was Telecom Mongolia (MCH), with 4,247 shares traded with a value of 4.6m MNT. It's price rallied up 2.73% to 1,130 MNT.

Please click here to see the detailed news

Link to article

 

NatSec Trading News, 30 August: Top 20 -0.29%, Turnover 27.5 Million

August 30 (National Securiteies) The MSE TOP-20 Index dropped again -0.29% to 13,661.40 points. Today's volume was 22,361 shares and trading amount of 27.5m MNT. Out of 19 companies that traded shares, 9 firms went up.

Khishig uul (HSX) was the top gainer and limit-up to 1,380 MNT. Another major gainer were Mongol shevro (MVO), E-trans logistic (ETR), and Mongol leather (UYN). It's price surged 14.84% to 1,470 MNT, 10.09% to 120 MNT, and 8.61% to 1,249 MNT respectively. Also major losers were coal miners Baganuur (BAN), Shivee ovoo (SHV). They plunged -7.12% and -4.85%. The most active share was Hermes centre (HRM), which plays on 10,000 shares were traded with a value of 1.1m MNT. 

Please click here to see the detailed news

Link to update

 

Montsame MSE Weekly Review: Turnover 261.3 Million

Ulaanbaatar, September 1 /MONTSAME/ Five stock trades were held at Mongolia's Stock Exchange on August 26-30, 2013.

In overall, one million 377 thousand and 849 shares were sold of 38 joint-stock companies totaling MNT 261 million 307 thousand and 691.00.

"Khokh gan" /one million 287 thousand and 295 units/, "Genco tour bureau" /22 thousand and 647 units/ and "Hermes center" /20 thousand and 800 units/ were the most actively traded in terms of trading volume, in terms of trading value--  "Khokh gan" (MNT 187 million 736 thousand and 260), "Sharyn gol" (MNT 11 million 697 thousand and 650.00) and "Mongolian telecommunications" (MNT 11 million 641 thousand and 525.00).

Link to article

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Economy

BoM holds FX auction

August 29 (Bank of Mongolia) On the Foreign Exchange Auction held on August 29th, 2013 the BOM has received bid offer of USD and CNY from local commercial banks. BOM has sold 59 million CNY as closing rate of MNT 263.0 to the local commercial banks. 

On August 29th, 2013, The BOM has received bid offer of 48 million USD for Swap agreement from local commercial banks and accepted the offer.

Foreign Exchange Auction 

Foreign Exchange Auction is used as a policy instrument by Bank of Mongolia to improve the transparency and efficiency of the foreign exchange market and to stabilize foreign exchange rate of MNT determined by the market force. 

The BOM holds foreign exchange auctions on Tuesdays and Thursdays (if the day falls on an official holiday, on a preceding business day). Eligible bidders of the auction are domestic commercial banks only. 

BOM provides necessary information for domestic market participants to maintain stability of the foreign exchange market and to prevent high fluctuations of foreign exchange rate of MNT.

See also:

FX Auction Statistics

Link to release

 

BoM: Balance of Payment for First 7 months, 2013: Current Account Deficit $2.1 Billion

August 30 (Bank of Mongolia) --

Link to release

 

Mogi: Total outstanding 1 week bills at 1.25 trillion. Must be some kind of a record

BoM issues 1-week bills

August 30 (Bank of Mongolia) BoM issues 1 week bills worth MNT 632.8 billion at a weighted interest rate of 10.5 percent per annum /For previous auctions click here/

Link to release

 

First 42 Days of New Mortgage Program

September 1 (Cover Mongolia) Bank of Mongolia announcement dating August 28 (in Mongolian only) reports that commercial banks have so far received requests to refinance 792.1 billion worth of old mortgages and accordingly have converted 434 billion old mortgages of 15,234 citizens to 8%.

368.2 billion worth of new mortgage requests were received and 303.5 billion out of these of 5,536 citizens were issued at 8%.

Link to release (in Mongolian)

 

Internal Trade Increased 17% in First Half

Ulaanbaatar, September 1 /MONTSAME/ Gross sales of the domestic trade increased by 17 percent in the first half year of 2013 against the same period of 2012, the National Statistical Committee (NSC) reports. 

The wholesale accounted for 67 percent of the total sales, and the retail sales--33 per cent.

The total sales reached this year MNT two trillion and 523 billion, whereas it stood at two trillion 157 billion in 2012. It means that the whole sale went up by 15 percent, the retailing--by 21.3 percent. Almost 90 percent of the sales was made in Ulaanbaatar city alone, increasing 20.3 percent against the previous year.

Geographically closest to the capital city, Tov aimag made the largest amount of trade--129 billion MNT among other provinces. The eastern provinces made the least amount of trade--20.1 billion. At the same time, the trade volume of the eastern aimags increased 16.4 percent against the same period of 2012.     

Link to article

 

PRIME MINISTER: MOST ECONOMIC INDICATORS ARE POSITIVE

Ulaanbaatar, September 1 /MONTSAME/ A report of the National Statistical Committee (NSC) says that the economic growth of Mongolia was 11.3 percent in the first six months of this year. In 2012, it stood at 14.4 percent.

The inflation rate was 12 percent by end of the previous year, whereas it has dropped to 8.5 percent this year; besides, some 37 thous. job places have been created. 

However, the PM says, there two negative indicators out of the five. The one is that foreign investments have declined by a certain amount due to some gold companies' freezing investments in a process of implementation of the law on prohibition of mineral extraction and exploration near water sources and forests, the another is an escalation of some currencies against the Mongolian Togrog (MNT). 

About the latter economists say that there is no need to make fuss, "everybody knows that before the Lunar New year and the academic year the currency rates change."    

Link to article

 

EBRD PRESIDENT: PRIVATE SECTOR NEEDS GREATER ROLE IN MONGOLIA

During his first visit as EBRD President, Sir Suma Chakrabarti will meet the Mongolian President, discuss economy and investment climate

August 30 (EBRD) The President of the European Bank for Reconstruction and Development (EBRD), Sir Suma Chakrabarti, will visit Mongolia between 30 August and 2 September, to emphasise the Bank's support for the diversification of the country's economy and the development of the private sector. He will also underline the need for sustainable growth and the transparent management of natural resources, and the EBRD's role in addressing these challenges, including assistance in building up institutions and developing policies.

The goals are set out in the EBRD's Mongolia country strategy for 2013-16, recently approved by the Bank's Board of Directors. Sir Suma will meet with the President of Mongolia, Mr Ts. Elbegdorj, and will emphasise the EBRD's commitment to the country's sustainable development.

The EBRD President will also meet the Speaker of the State Great Khural, Mr Z. Enkhbold, and other representatives of the Government of Mongolia. 

President Chakrabarti said ahead of his visit: "The EBRD has been investing in Mongolia since 2006. We are the largest institutional investor in the private sector, with US$ 1 billion of investments in private companies from small and medium-sized cashmere manufacturers to large local agribusiness and mining corporations. In the current global economic climate, we believe Mongolia needs to encourage private firms to invest in all sectors, from infrastructure to natural resources. A stable and predictable business environment is crucial for all investors, domestic and foreign."

The EBRD President will also meet business clients, and will participate in a signing ceremony with Khan Bank for a financing package of US$ 25 million aimed at Mongolian small and medium-sized enterprises.

Apart from lending and equity investments, the EBRD runs a Small Business Support programme – supported in Mongolia by the EU, Japan, Luxembourg and other donors – which helps growing enterprises through the provision of expert advice. 

More on this: First Vice President Phil Bennett discusses the EBRD's plans to diversify the Bank's investment strategy in Mongolia.

Link to release

 

Tony Blair to advise on FDI

August 29 (Business-Mongolia) As Mongolian government struggles to find a common language with Rio Tinto it hired the ex-PM of UK: Tony Blair. The government is forming a new working group headed by G.Denzen – former Deputy Chief of Cabinet to deal with Oyu Tolgoi project related matters and of course further on – foreign direct investment in the country.

Tony Blair will make a quiet visit to Mongolia soon to adivse the government on various of issues. Apparently, the OT related matters will be in the core of the issues. Inner circles of the government is naming the visit as a  "secret" one.

Tony Blair's consulting team advised many governments in the past years including the government of Kazakhstan.

We will update our readers in due course.

Link to article

 

MONGOLIA'S 2013 WHEAT HARVEST EXPECTED TO MEET DOMESTIC DEMAND

August 28 (InfoMongolia) On August 27, 2013, the Ministry of Industry and Agriculture delivered the preliminary harvest report of this year.

A total of 407.4 thousand hectare land was planted this year, whereas 293.4 thousand hectare land was planted for grain, out of which 276.6 thousand hectare land was wheat, and 15.1 thousand hectare land for potatoes, 7.6 thousand hectare land for other vegetables, 79.4 thousand hectares for oil plants and 11.9 thousand hectare land for forage. Preliminarily, 423.4 thousand ton grain, out of which 404.6 thousand ton wheat, and 211.8 thousand ton potatoes, 103.4 thousand ton other vegetables, 65.2 thousand ton oil plants and 21.0 thousand ton forage has been estimated to be harvested.

Depending on the soil moisture and weather, this year's plantation of wheat was completed in May 01-30. Due to the cool weather in May and June and the continuous rain in July and August, harvest readiness for crops may be delayed 5-8 days and 80% of all crops are in their ripening stage and 20% are almost ready to be harvested. This means, if the weather is pleasant, the crops can start to be harvested in the first 10 days of September.

According to the information provided by the Institute of Meteorology and Hydrology of Mongolia, there may be sudden coolness in the soil on August 29-30; therefore actions need to be taken throughout the country in order to prevent frosting in the crops not ready to be harvested, potatoes and other vegetables. Due to unpreventable weather factors, 2,871 hectare crop land in Selenge, Bulgan, and Arkhangai aimags were hit with hail.

From the estimated 404.6 thousand ton wheat to be harvested, 44.4 thousand ton seed will be reserved for the 2014 plantation, 2.8 thousand ton seed for the national seed reserves, 33.0 thousand ton for forage, and 6.2 thousand ton for alcohol manufacturing, which leaves 318.0 thousand ton supply of wheat, out of which 129.0 thousand ton will be provided to Agriculture Production Support Fund (Crop Production Supporting Fund) and 189.0 thousand ton will be provided for flour milling. Adding the 10.5 thousand ton wheat reserved at the Agriculture Production Support Fund, there is a total reserve of 328.5 thousand ton wheat. 328.6 thousand ton of wheat is necessary to domestically manufacture Mongolia's yearly demand of flour and wheat demand for 2013-2014 is planned to be supplied domestically.

Link to article

 

CABINET OBLIGES MINISTERS TO ACCELERATE HARVESTING WORKS

Ulaanbaatar, September 1 /MONTSAME/ After a report on ongoing harvesting works, the cabinet Friday obliged Kh.Battulga, the Minister of Industry and Agriculture, to organize the harvesting in a short time and with the use of the most appropriate hi tech. 

Other orders were given to the Ministers of Road and Transportation and of Energy to finish the repair of roads and bridges that are exploited during the harvest and to provide energy, fuels and oil products.

By preliminary calculations, Mongolia is to harvest 420 thousand tons of grain, of which 400  thousand tons is wheat, also 210 thousand tons of potatoes, 100 thousand tons of vegs, 65 thousand tons of oil plants and 21 thousand tons of fodder plants.  

Link to article

 

BILL ON MAKING GOLD TRADE TRANSPARENT TO BE SUBMITTED

Ulaanbaatar, September 1 /MONTSAME/ At its regular meeting on Friday, the cabinet discussed a draft law on making a gold trade transparent and decided to submit it to the State Great Khural.

Together with the bill, the cabinet will submit a draft amendment to the law on mineral resources, reflecting proposals from MPs.

Recently, the gold reserves are decreasing kept in the Bank of Mongolia (BoM) and commercial banks, affecting the exchange reserves of the country, so the draft law reflects regulations regarding imposing of responsibilities on the BoM for purchasing, exporting and registering the gold, creating of a system of purchasing the gold, extracted by companies and small mines with special licenses, and  abolishing an illegal trade of gold. It is also said that a person or enterprise, which saves its gold at the BoM or domestic commercial banks, will enjoy a tax discount for exploiting mineral resources.

If the draft is adopted, an annual exploitation of gold will go up by 20 tons, meaning that 150 tons of gold will be exploited within five years.  

Link to article

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Politics

Frontier's 7th Annual Conference: Invest Mongolia 2013 

2nd-3rd Sept. at Ulaanbaatar Mongolia

With only 2 days left for the conference, we are delighted to announce that we have over 300 registered delegates (with the remaining spots being filled up rapidly) and 70 confirmed speakers! You may have a look at the most updated agenda here. With this response, we are confident that our conference will continue to remain as one of the most popular investment conferences in Ulaanbataar.

Our conference this year will be held on September 2nd & 3rd at the Chinggis Khan Hotel, Ulaanbaatar and is being supported by the Ministry of Mining, the Ministry of Environment & Green Development and the Ministry of Economic Development.

The conference this year aims to address the concerns of the business community – within Mongolia and international investors.  We expect the discussions at the conference, made by international as well as local investors, to fall on the right ears and serve as a warning bell for policy makers. This will hopefully have a positive impact on the state strategies, policies and regulations. If you have existing investments or are looking for investors and strategic partners, this is the forum for you. With the right changes, we still believe that Mongolia has a bright future.

Link to update

 

"Discover Mongolia-2013" Mining Investors Forum, September 5-6

August 30 (news.mn) "Discover Mongolia-2013" International Mining Investors Forum is scheduled to take place at the Mongolian Children`s Palace in Ulaanbaatar on September 5th and 6th 2013. 

Prime Info LLC and the Mongolian National Mining Association are the main organizers of the forum from the first edition. Representatives from over 10 countries have been registered to participate at the forum. 

In previous years the forum included an hour long Government panel session with Mongolian ministers and other Government representatives discussing the Government's policies and projects in the minerals industry. There were also speeches and introductions on specified subjects. 

This year participants have the opportunity to view an exhibition and discuss and exchange views on the following topics: "World economy and its impact on the mining industry", "Creating a Stable Legal Environment", "Building up an Enabling Infrastructure", "Environmental Issues", "How to meet the growing demand for qualified human resources", "Stakeholders Engagement at Local Level"," Is Mongolian Mineral Sector Ready for Regional Integration?", "International Investors Exchange" and "Mongolia perspectives of oil shale". 

Participants will include the Ministry of Mining as an official supporter, the Ministry of Environment and Green Development,  the Ministry of Finance, the Mineral Authority and other agencies from the Government of Mongolia. Governors and Chairmen of the People`s Representative Khural of Govi-Altai, Khovd and Umnugovi provinces will also be in attendance. 

During the forum on September 5th and 6th there will be an Investors Exchange Exhibition that will give foreign and national companies introductions and advertise these companies' services and products. It is designed to help the participant find good projects, reliable services, quality equipment or skilled personnel.

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Business

POSCO: Extracting clean materials from coal in Mongolia

-       Establishing 'Coal to Liquid' plant with Mongolia's largest private company, MCS 

-       Joint venture 'Baganuur Energy Corporation' project to start 

-       Plans to produce 450,000 tons of diesel oil and 100,000 tons of dimethyl ether annually 

August 30 (POSCO) POSCO is speeding up the clean CTL (Coal to Liquid) project with Mongolia`s largest private company, MCS. 

The Coal to Liquid (CTL) process produces a liquid-type fuel from coal that can replace oil, and has greater cost competitiveness over imported diesel oil. Further, less sulfuric acid and nitric acid are produced than when coal is directly burned, while most of the carbon dioxide formed can be collected and recycled for industrial use, having an effect of reducing air pollution. 

This project utilizes low quality coal that is abundant in the Mongolian region, ranked in the top 10 countries in size of coal reserves, to produce a compound gas of hydrogen and carbon monoxide, and applies clean CTL technology to remove pollutants. POSCO and MCS plan on producing 450,000 tons of diesel oil and 100,000 tons of dimethyl ether annually. 

Of these, dimethyl ether, a compound material extracted from the compound gas made from pyrolyzing coal, is lower in price than LPG and causes less carbon dioxide and ash, and is in the spotlight as an environment friendly fuel to replace fossil fuels. 

POSCO and MCS started discussing this project in 2010. After Hatch, the Canadian CTL plant engineering specialist, confirmed economic feasibility of the project, the joint venture Baganuur Energy Corporation was established in May and is in the process of selecting technicians and receiving approvals and permissions of the Mongolian government to proceed with the project. 

The Mongolian government recognizes the importance of the project from two perspectives: 1) securing a stable energy source and developing an environmentally friendly power plant business; 2) and is offering full support to successful proceeding such as applying no taxes on imported materials and equipment for constructing the plant. 

The Mongolian government is proactively supporting the project because, although it is one of the world`s top 10 resource-rich countries, it imports most of its oil from Russia. 

With the rapid economic development of Mongolia, the current annual 800,000 ton fuel consumption is expected to reach 3.5 million tons by 2020. As fossil fuel usage increases, Mongolia`s environmental pollution has also become a social issue. Air pollution in Ulaanbaatar, the country`s capital where about half of the population resides, has already reached serious levels. 

Mongolia, through the CTL project, expects to solve the air pollution issue by self-supplying environmentally friendly fuel, and also replace fuels imported from overseas. 

Through this project, POSCO also plans to lead the global clean energy plant business based on accumulated coal processing and energy production technology and operation management experience, and in the mid- to long-term, take an advantageous position in securing natural resources in Central Asia, including Mongolia. 

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MONGOLIA TO COOPERATE WITH KOREA TELECOM IN BRINGING 4G LTE WIRELESS TECHNOLOGY

Ulaanbaatar, September 1 /MONTSAME/ The cabinet Friday discussed a cooperation memorandum to be established between Mongolia's government and the South Korean Korea Telecom Corporation (KTC).

The cabinet authorized the Information, Communications Technology and Post Authority and State Property Committee (SPC) to sign the document. 

Accordingly, a collaboration is supposed to begin in introducing to Mongolia the 4G LTE technology  and launching thus a new era of wireless communications.

KTC has been holding 40 percent of stocks of the parastatal Mongolian Telecommunication Company since 1995. In its country, the corporation has already introduced the Internet service based on the 4G LTE technology.  

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BelAZ's 55-tonne truck on display in Mongolia

MINSK, 29 August (BelTA) – The Belarusian automobile engineering company OAO BelAZ will present a mine dump truck with the carrying capacity of 55 tonnes at the national expo of Belarus that will take place in Ulaanbaatar, Mongolia on 5-8 September, BelAZ representatives told BelTA.

BelAZ's booth will feature advertising and information materials about the company while the open-air site will showcase a full-scale specimen of the mine dump truck BelAZ 7555B with the carrying capacity of 55 tonnes. "Mongolian companies are interested in products of Belarusian Autoworks (BelAZ trademark)," said BelAZ representatives. "There are plans to sign documents on future cooperation during the visit of a Belarusian delegation to Mongolia in September".

Mongolian customers are familiar with the BelAZ trademark, they have a long record of operating and maintaining Belarusian vehicles. At present Mongolia uses 178 BelAZ vehicles. Mine dump trucks with the carrying capacity of 30-240 tonnes and other special vehicles are used for coal mining operations. In Mongolia BelAZ's official representative, the company United Belaz Machinery also offers aftersales service.

Founded in September 1948, the Zhodino-based mechanical engineering company Belarusian Autoworks (BelAZ) was incorporated into a joint-stock company in 2010. As of October 2012 OAO BelAZ is the management company of BelAZ Holding. BelAZ offers rock haulers, frontal wheeled loaders and bulldozers, tow trucks, special vehicles for underground operations, heavy-duty trucks for metallurgy industry, and other specialized vehicles. BelAZ accounts for a third of the global market of rock haulers and is a leading global supplier of quarry machines.

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Central Asian Animals are Becoming Victims of Fashion

August 29 (One Green Plant) The continued growth of the global cashmere garment industry is placing a number of Central Asian mammals, like snow leopards, wild yaks, Tibetan antelope and gazelles, in danger, reports a recent study.

The study entitled "Globalization of the Cashmere Market and the Decline of Large Mammals in Central Asia," was published in the scientific journal Conservation Biology and was run by researchers from the University of Montana (U.S.A.) and the Wildlife Conservation Society (U.S.A.), the Wildlife Conservation Society (Mongolia), the Snow Leopard Trust  (U.S.A.), and the Nature Conservation Foundation (India), according to The Global Fool.

The study reveals that an expansion of pastureland for goats used in the cashmere industry is the main cause of the decline in Central Asian wild animal populations. Many of these animals native to China's Tibetan plateau, Mongolia and India are already endangered.

Over the last decades, the cashmere industry has become a multi-billion dollar industry and in order to support this large demand, local herders across Central Asia have increased the number of livestock they keep. In 1990, Mongolia alone had around five million heads of livestock which grew to nearly 14 million in 2010, reports the Snow Leopard Trust.

As a result, these domestic goats have been competing with wild animals for their main food sources. Moreover, Central Asian animals are suffering from a reduction in their habitat space and displacement. They are even put at risk of being killed or injured by domestic dogs that accompany herders.

"Cashmere production is a complicated human issue. Understandably, indigenous herders are trying to improve their livelihoods, but the short-term economic gain is harming the local ecosystem," said Charu Mishra, the Snow Leopard Trust's Science and Conservation Director and a co-author of the study.

The overall purpose of the study is to raise awareness about the link between the western cashmere industry and the impact on wildlife and ecosystems. The authors of the study hope that it will serve to propel dialogue between the industry, cashmere herders and conservation groups. The authors also stress that blaming the herders is counterproductive and that it would be much more fruitful to involve Western consumers, the garment industry and local communities in conservation efforts.

"I care about the snow leopard but I also genuinely care about those people and their livelihoods. The solution is about empowering them," said Mishra.

According to Science Daily, the World Conservation Society has already started to tackle this issue by working with the Responsible Ecosystems Sourcing Platform (RESP), a public-private partnership initiative that aims to address sustainability issues from the beginning to the end of supply chains.

A few ways you can help reduce the negative impact on Central Asian mammals yourself are by choosing garments that are sourced from solely plant-based materials and encouraging your family, friends and local stores to do the same. You can also donate to the Snow Leopard Trust and the World Conservation Society to support their conservation efforts and their fight to protect Central Asian animals.

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Ulaanbaatar

MONGOLIA TO UPGRADE CHP4 WITH $42.5 MILLION JICA SOFT-LOAN

Ulaanbaatar, September 1 /MONTSAME/ The government of Mongolia has worked out a proposal on augmenting effectiveness of the #4 thermal power station with a soft-loan from the Japan International Cooperation Agency (JICA).

At the regular meeting Friday, the cabinet discussed this issue and considered as necessity to consult  a parliamentary Standing committee a matter on establishing a credit agreement with the JICA.

As projected, a total loan will be USD 42.5 million to be paid back within 40 years with annual interest of 0.3 percent. The renovation is expected to launch this year and to end in 2017.

It has been calculated that the energy consumption of Mongolia will increase 5-7 percent in five years to come.   

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MONGOLIA CABINET DISCUSSES ULAANBAATAR METRO PLAN

Ulaanbaatar, September 1 /MONTSAME/ The cabinet meeting on Friday discussed a research report on the "Ulaanbaatar Metro" project and obliged officials to calculate the cost and draw up a credit contract.

According to the report, a metro in the capital city will bring many advantages, for example, it is possible to redevelop about 1,300 hectares of lands near the metro stations until 2030. Real estate costing USD 10.5 billion can be erected along the metro lines, creating thus 156 thousand job places, and apartments for 50 thousand families will be erected in frames of stations development. Needless to say, traffic jam will reduce 16 percent.

In accordance with the cabinet decision, an advanced research into the metro issues will be completed in 2015.  

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Night trolley service will run until winter

August 28 (news.mn) For the Eco Night Transportation project, four night trolley buses on two routes have been running between 11:00 pm and 5:00 am for passengers since last July. The night trolley bus service will serve passengers until the beginning of winter. The City Administration will decide whether or not to continue the service depending on its efforts. 

According to an official of the City Transportation Authority only a few passengers were served during the summer by the night trolley buses. It was explained that most citizens were on holiday during summer so the service was not as effective as it could be. 

Due to the new school year the City Transportation Authority hopes more and more passengers will be served by the night trolley buses. 

The night trolley service will charge adults 1000 MNT and children 500 MNT. The night trolleys will run on routes between "ХМК – Офицерүүдийн ордон – Ботаник" (HMK – Officers Palace – Botanik) and "3,4 хороолол – БММЗ" (3rd and 4th khoroolol – BMMZ).

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License plates with lucky numbers could be subject to new tax

August 30 (news.mn) The Nationwide vehicle registration has been updated for 2013. According to the data, as of August 2013, a total 597,658 vehicles were registered nationwide in the vehicle registration renewal. 

The Road and Transportation Minister stated that a tax rule for owners with license plates with desirable numbers is being discussed by the decision makers in the Ministry. 

The Ministry of Road and Transportation has issued no new unique license plate numbers since it was reformed. The Ministry of Road could impose the new tax rule for license plates with desirable numbers due an issue with releasing new accession numbers for vehicles. These lucky numbers include examples such as "УН 5555", "УМА 6161" and "УБН 9999".

In addition the Ministry of Road and Transportation is now connected with license plate producers so it is able to control the license plate numbers of vehicles. 

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Seven people detained as suspects in Narantuul market fire

August 29 (news.mn) The fire at the grocery section of Narantuul market last Friday caused a death and a large to over 300 renters.  

The Investigation Division I of Bayanzurkh District Police have initiated an investigation to determine the cause of the fire while the prosecutor externally controls police activities. Police have conducted interviews regarding the fire based on the evidence and description of 16 people as victims and witnesses including the owners of Narantuul, the manager, organizers and employees. 

Currently a thorough inspection of Narantuul market is in progress as a significant part of the market was destroyed by the fire. There are still a large amount of goods being kept in storehouses. 

An investigation to determine the identity of the woman who was found dead at the scene of the fire revealed the victim was a member of the service staff at the market. 

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Diplomacy

Foreign Ministries of Mongolia and Russia sign 2013-2014 partnership agreement

August 30 (news.mn) Vice Foreign Minister of Mongolia D.Gankhuyag and Russian Deputy Foreign Minister Igor Morgulov held a meeting for the Consultation of Ministers of Foreign Affairs in Ulaanbaatar on Thursday August 29th. 

The Mongolian and Russian counterparts exchanged views on certain issues of bilateral economics, political relations and collaboration during the meeting.

Both parties noted that bilateral relations and collaboration on economy and politics are at a certain level in every sector. They agreed that they must continue an approach to cultivate bilateral relations and cooperation with full efforts and start to develop mutually beneficial strategic partnerships.

Following the meeting Vice Foreign Minister of Mongolia D.Gankhuyag and Russian Deputy Foreign Minister Igor Morgulov signed an agreement on partnership in 2013-2014 between the Foreign Ministries of Mongolia and Russia. 

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Czech Republic wants to increase its exports to Mongolia, which is for domestic exporters a significant opportunity

Ministers of both countries agreed to create a common schema to interconnect specific objectives and needs of the Mongolian economy with the capabilities and competencies of Czech companies.

Czech Republic wants to increase its exports to Mongolia, which is for domestic exporters a significant opportunity

POSSIBILITIES FOR FURTHER DEVELOPMENT OF COOPERATION IN THE FIELDS OF GEOLOGY, MINING INDUSTRY, TRANSPORT INFRASTRUCTURE, ENVIRONMENTAL TECHNOLOGIES, ENERGY, FOOD, TEXTILE AND CLOTHING INDUSTRIES WERE THE SUBJECT OF TUESDAY'S DISCUSSION OF THE MINISTER OF INDUSTRY AND TRADE, JIRI CIENCIA£A WITH THE MINISTER FOR HOUSING AND URBAN PLANNING OF MONGOLIA TSEVELM BAYARSAIKHAN. BOTH MINISTERS AGREED THAT RECENT POSITIVE DEVELOPMENTS OF TRADE RELATIONS BETWEEN CZECH AND MONGOLIAN FIRMS CAN BE EVEN MORE INTENSE WITH THE AIM OF INCREASING MUTUAL INVESTMENTS. THEY WANT TO MAKE ALL CONDITIONS TO THAT END AT THE GOVERNMENT LEVEL OF BOTH COUNTRIES.

August 29 (Ministry of Industry and Trade of the Czech Republic) The Minister Bayarsaikhan visited the Czech Republic on the occasion of the fifth meeting of the Joint Committee between the Government of the Czech Republic and the Government of Mongolia (26 and 27 August), where he led the Mongolian delegation.

During the talks, both Ministers agreed to create a common schema to interconnect specific objectives and needs of the Mongolian economy with the capabilities and competencies of Czech companies. "Through this array, we shall monitor and regularly evaluate how we succeed in promoting the cooperation between companies of both countries. We want to achieve concrete results that would be beneficial to both parties and that would promote not only trade, but also investment and joint production," said the Minister Cienciala, who considers Mongolia a very interesting country due to its dynamic development and tradition of good relations with the Czech Republic, offering our companies a number of interesting opportunities. "However we must do more to make use of these opportunities," he added.

Individual areas of cooperation were discussed during the meeting of the Joint Committee, and according to the statements of both parties there were evident by endeavours to achieve tangible results. "During the two-day meeting we really focused primarily on specific projects that Czech companies intend to implement in Mongolia, and on how it should be supported at the level of governments of both countries. The fact that the meeting of the Committee was attended by the numerous group of representatives of companies from both countries was also very beneficial. After all, the committee is theirs," said the Deputy Minister of Industry and Trade Milan Hovorka, who led the Czech delegation at this meeting.

In terms of the specific objectives of Czech companies in the Mongolian market, Mr Hovorka said that Czech firms put hope above all to unfinished projects in the sectors of energy, heating, mining, public utilities, manufacturing and construction of health facilities. A detailed discussion, however, also included the intentions of Mongolia in the areas of transport infrastructure development and mobility support of citizens. The Czech companies could significantly exert themselves especially in the construction of railways or airports.

Czech and Mongolian officials also discussed the use of foreign development cooperation projects being implemented by the Czech Republic in Mongolia, which already valued at the amount of several hundred million of the Czech crowns, to support the follow-up commercial cooperation. Last year, the overall Czech exports to Mongolia reached a record level of more than 400 million Czech crowns and the large part of them consisted of deliveries implemented within the development cooperation projects.

Representatives of the both countries also exchanged opinions on how to solve business cases that went wrong in the past and that were supported by the Czech state export and insurance funding.

A business forum with the Mongolian party attended by over 50 representatives of companies from both countries and prepared by the Economic Chamber of the Czech Republic was also held on the occasion of the meeting of the Committee. At the Forum, representatives of Mongolian ministries presented Czech companies the development of the Mongolian economy, investment environment, intentions and plans for the development of Mongolian infrastructure. 

A rich program of the Minister Bayarsaikhan and his delegation in the Czech Republic also included a meeting with the Minister for Regional Development Franti¹ek Lukl and visits of some plants, where the minister and his entourage got acquainted with the technologies and know-how in the field of building materials and disposal of municipal waste.

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Belarus PM Myasnikovich to visit Mongolia on 3-5 September

MINSK, 30 August (BelTA) – A governmental delegation led by Belarusian Prime Minister Mikhail Myasnikovich will pay an official visit to Mongolia. The visit is scheduled for 3-5 September, BelTA learnt from the press service of the Belarusian government.

Mikhail Myasnikovich will hold official talks with Mongolian Prime Minister Norovyn Altankhuyag and sign a number of international documents.

The Belarusian head of government is also set to meet with President of Mongolia Tsakhiagiin Elbegdorj and Chairman of the State Great Khural (Parliament) of Mongolia Miyeegombyn Enkhbold (Mogi: haha).

On 5 September Mikhail Myasnikovich will take part in the opening ceremony of the national expo of the Republic of Belarus and the Belarus-Mongolia Business Forum.

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Social, Environmental and Other

M.Urantsetseg crowned women's judo world champion in Rio

August 27 (news.mn) A Mongolian judoka won gold at the IJF World Judo Championship for Senior Individuals and Teams in Rio de Janeiro, Brazil on Monday August 26th. All international judo associates gathered together in Rio de Janeiro for the most important moment of the season: the World Judo Championships, Senior Individuals and Teams from August 26th to September 1st, 2013.

According to schedule the winners of the women`s -48 kg and men`s 60 kg were released on Monday. 

In the women`s 48 kg category M.Urantsetseg won the gold and D.Amartuvshin won silver in the lightweight category. G.Boldbaatar placed fifth by competing in the weight category for the bronze. 

The Mongolian team took the lead with a gold and silver medal out of 123 countries on the first day of the World Judo Championship. 

This year`s edition of the World Judo Championship was organized according to new rules approved by the International Judo Federation. 

For seven days, the best judoka in the world will compete for the ultimate World Champion title in 14 different weight categories. Nations will also compete for the world title in the team competition, an event that might be integrated with the Olympic program in 2016.

Paris Grand Slam bronze medalist Munkhbat Urantsetseg produced the performance of her career by defeating former world champion Asami Haruna (JPN) in the -48kg final. Munkhbat Urantsetseg sealed the win by juji-gatame to claim the gold medal.

M.Urantsetseg is the first female judoka to be crowned the judo world champion in the sports history of Mongolia. She won the second gold for Mongolia. In 2009, Mongolian judoka Khashbaatar Tsagaanbaatar brought the title of judo world champion from the Judo World Championship held in Holland. 

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In Mongolia, back to school, back to better water and sanitation facilities

By Byambaragchaa Magvandorj

World Water Week 2013 is being held 1–6 September. An estimated [PDF] 768 million people still use unsafe drinking water sources. There are major disparities in availability of water among regions, and between poor and wealthy, and rural and urban. 

Inadequate access to safe water and sanitation services, coupled with poor hygiene practices, kills and sickens many children every day, and leads to impoverishment and diminished opportunities for thousands more.

It's almost time for Khaliunaa, Bulganaa and the other children of nomadic herder families to return to their boarding school in Khuvsgul province, Mongolia. This year, back-to-school preparations have included major improvements to the school's water, sanitation and hygiene facilities.  

KHUVSGUL PROVINCE, Mongolia, 30 August 2013 (UNICEF) – Khaliunaa, 13, and her sister Bulganaa, 9, live in Tarialan soum, Khuvsgul province, a remote area in the north of Mongolia. Their father Buyanbadrakh and mother Narangerel are nomadic herders – the family move several times a year in search of better pasture land for the sheep, goats, horses and cows that are their livelihood. 

Right now, the family are in their summer home, a small wooden cabin on the steppe, some 12 km from the soum centre, according to Buyanbadrakh. He says that, in the winter, the family shelter some 28 km away.

Because they live so far from the centre, the girls attend boarding school, together with the other nomadic children. The school year runs from September to May. "I like learning new things at school," Khaliunaa says. "My favourite subject is Mongolian script."

Home away from home

At the Tarialan soum school dormitory, the staff have started preparing for the coming school year. In the kitchen, a cook stirs rhubarb jam in a large saucepan, and collects the juice and decants it into bottles for drinking.

When school is in session, the children will wake at 6 am. They'll exercise, have breakfast and brush their teeth. This last is difficult to organize, though, according to dormitory teacher Erdene-Chimeg: "[T]here are not enough taps and water for all the children to clean their teeth at once."

The children will go to school in two shifts – the older children in the morning, and the younger ones in the afternoon. In the evening, they'll do their homework with the dormitory teacher. During free time, they'll use the school hall to play basketball and volleyball, and to dance.

Khaliunaa enjoys dormitory life, but she raises a few issues of her own about the water, sanitation and hygiene (WASH) facilities. For example, she and her sister are afraid to use the outdoor toilet at night.

According to school manager Oyun-Erdene, "We conducted an assessment of the school with the teachers and children. We found that the main issue was the lack of clean water. It has to be fetched, which is particularly hard for the dormitory children. Also, the toilets are very far from the dormitory. It is difficult for younger children to use them in the winter."

Upgrades for Tarialam soum school

UNICEF, in consultation with the provincial authority, has selected Tarialan soum school, including the dormitory, for upgrades to the WASH facilities. These improvements are part of UNICEF's strategy to address inequality by focusing on the most vulnerable children and communities. Tarialan is one of the target schools under the Australian Government Overseas Aid Program (AusAID)-funded WASH in schools and kindergartens project.

The school has been open since 1939. It currently has over 1,000 students, including 153 in Khaliunaa and Bulganaa's dormitory.

UNICEF Mongolia Water and Sanitation Officer Batnasan Nyamsuren describes the improvements: "These facilities will consist of hand-washing sinks, indoor toilets, showers for dormitory children, connection to the water supply and a septic tank."

In addition, says Oyun-Erdene, "UNICEF has provided child-friendly school training to teachers, parents and children."

A fresh start

Beyond the dormitory, Tarialan soum school staff are busy with preparations for the coming term, and winter. Teachers have started painting floors, walls and windows of classrooms so that they will look like new when children arrive in September. But this year, the children have more to be excited about.

Back at home, Khaliunaa and Bulganaa are pleased to hear about the plans for new WASH facilities at their dormitory, as is Narangerel. "I'm very happy that there will be an indoor toilet at the school," she says. "They'll be warm, comfortable and not afraid."

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Seeing the world: golf in Mongolia

Florida native Jason Chennault is among the world's most travelled golf course superintendents. As he prepares to open Mongolia's first golf resort, he tells GCA why he keeps moving

August 8 (Golf Course Architect) "My whole goal, when I went to college, was to get out of America and see the world," says Jason Chennault, by phone from his home in Moscow. He's certainly done that. GCA caught up with the Florida native only a day or two before his return for a second season of grow-in at the Mount Bogd golf course outside the Mongolian capital of Ulaanbaatar. Chennault's Mongolian visa had just arrived, and he was packing for a return to the frozen steppes of Central Asia.

"I graduated in 1996 and by 1999 I was in Manila at my first superintendent's job – managing 26 holes at the Orchard club," he recalls. "It had the biggest clubhouse I've ever seen. The eighteenth hole of the Palmer course is cut through a mango orchard – that's where the club gets its name. It's a par five, and the clubhouse starts at the 250 yard mark! That gave me the bug.

"I had travelled the Caribbean and other parts of North America on holiday, but I'd never worked outside the US. And it was hard to adapt. I didn't fit into the culture. I ended up back in America a year later –a connection in the Philippines sent me to Lost Canyons in California, under Jeff Pritchard, and we opened 36 holes. After that, I went down to the Bahamas for a grow in, then to Aruba, over to Costa Rica, and to Puerto Peñasco in Mexico – mostly either grow-in jobs, or there was some kind of renovation going on.

"I came to Moscow in 2007, to work with a group that was closely tied to the government, and were planning five projects. We opened the second eighteen hole golf course in the country, and we hosted the Russian Senior Open in 2008. As for Ulaanbaatar, I saw an advertised opening, and it turned out I had a social media connection to a guy who was responsible for helping the club hire someone. I reached out to him, and that's how I got the job, and I came here for the first time last July."

That travelogue tells you most of what you need to know about Jason Chennault. Few people his age can have worked in a wider range of locations. So, what has he learned about the global golf industry during his travels? "The biggest key is that you have to be adaptable, fluid, spontaneous," he says. "When you think about something that seems really extraordinary, in some places it can be a very ordinary way of thinking. A guy that's successful internationally has to be results oriented. You have to find a way to get the result."

Operating at the bleeding edge means established procedures don't necessarily work, something Chennault is learning fast in the extreme climate of Mongolia. "The guy who developed the seed we have on our greens gave me protocols for growing that grass," he says. "I have had to tell him – I can't do that, I don't have the temperatures, I don't have the tools, but I know I can get a great surface if I do it right. He wants me to be aggressively verticutting and at a certain level of fertility, moisture and cutting heights. But I can't."

Similarly, working in countries where golf is new means training staff basically from scratch. "You have to be a great teacher," he explains. "It's about being willing to be hands on, sleeves rolled up. You can't lead from a cart, you have to do it with them. You participate in whatever they enjoy – if they like to play football at lunchtime, play football with them. But it is incredibly rewarding when you have an impact on people. If you hired my translator from my first job in Russia, I think he'd be a really good deputy greenkeeper. His life's now completely different."

Mount Bogd, designed by David Dale of Golfplan (another famously globetrotting organisation), is Mongolia's first real golf course, and Chennault says it is a wild ride. "We're at the base of a mountain, about 15km from the city," he says. "It's a wide-open, windswept place with one tree on it, and native tundra fescue everywhere. They basically just turned over enough rock and spread topsoil to have golf holes. It's an amazing contrast – there's rock everywhere, and the colours, gold and green are beautiful.

"We're in a big valley with 300 plus days of sunshine a year. We're getting all our grass from Jacklin – T1 bentgrass on the greens, and NuGlade bluegrass mixed with fine fescues for everything else. Top guys. The temperature averages 22-23˚C in the summer, blue skies and a nice breeze, just perfect for golf. A nice natural creek that's spring fed runs down the mountain and splits the property."

That's the good side. Now for the bad. "It truly is the most extreme climate I've ever seen," Chennault says. "It feels like it'll peel your skin off, it's so dry. You can feel your skin cracking during the day. The wind rips through you. But it's pure air. Ulaanbaatar is the coldest capital city in the world, and in the winter you could eat the air. The city might be covered in smog, but you look back towards it from the site, you're in perfect air,with lots of little birds fluttering through the fescue. Ulanbaatar is a city if 1.5 million people, but it feels like a village. Every building is a vertical high-rise, so you can cover the whole city in ten or fifteen minutes driving."

Mount Bogd is being developed by Mongolia's richest man, Odjargal Jambaljamts, chairman of Mongolian Mining Corporation. "He just loves golf," Chennault says. "There are 160 registered golfers in the Mongolian federation, all playing on artificial greens at Genghis Khan Golf Links in the city. They can't wait for this place to be ready."

And when it is, Chennault will no doubt be planning his next move.

This article first appeared in Golf Course Architecture Issue 32.

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2013 Genco Mongolia Bike Challenge: Stage One

Wallace and Williamson take Stage One of the 2013 GENCO Mongolia Bike Challenge presented by Orbea

September 1 (Mongolia Bike Challenge) Stage One of the 2013 Genco Mongolia Bike Challenge presented by Orbea was a 120-kilometer loop in an out of the Genghis Khan Statue Complex in Tuv Province with 2,950 metres of climbing. The heat of the Mongolian sun combined with the seemingly endless short, steep climbing sections challenged the professionals and age-groupers alike. 

Defending champion, Cory Wallace continues his dominance in Mongolia regaining the Pink Jersey which has held since Stage One of 2012. He did so in impressive fashion leaving a talented group of riders at the 90km mark solo-ing to a 7-minute victory over his nearest competitors, Mark Frendo (former Australian U23 XC National Champion) and Antonio Ortiz (Selle SMP) of Spain.

In the Elite Women's field, 2013 ABSA Cape Epic Winner, Catherine Williamson (Bizhub-Energas) of the UK put in a strong first performance giving her a commanding lead of 30 minutes on her nearest rivals, American Sonya Looney (Topeak Ergon), and Erin Greene (Endura NZ) of New Zealand. 

Stage Two takes the racers 125 kilometres to the Khan Khentii area on the bank of the Tuul River via the Zamt Hills.

Stage One Results in brief:

Elite Men
1. Cory Wallace (Canada) 4:57:20
2. Mark Frendo (Australia) 5:05:56
3. Antonio Ortiz (Spain) 5:06:10

Elite Women
1.Catherine Williamson (UK) 5:33:18
2. Sonya Looney (USA) 6:09:31
3. Eric Greene (NZ) 6:13:04

Full Race Results can be found at www.mongoliabikechallenge.com

The 2013 Genco MBC runs from September 1 to 7. The newly re-designed seven stage course is over 850 kilometres long and includes 14,000 metres of climbing. 

Early Bird Registration for the 2014 event opens September 8.

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