Thursday, June 26, 2014

Mongolia Brief June 26, 2014 Part I



Mongolians at UNEA in Nairobi

Ulaanbaatar, June 26 (MONTSAME) A delegation of Mongolia is participating in the first UN Environment Assembly which is running in the United Nations Environment Programme (UNEP) Headquarters Nairobi, Kenya.

The delegation’s head and the Minister of Environment and Green Development Ms S.Oyun is chairing meetings of the assembly and of a bureau, whereas others have worked in the committee comprising  officials from Asia-Pacific region, in the group of the Assembly president’s fellows and in a working group for updating domestic rules.
Our delegation sounded for all a message of the Mongolian President and granted it to the Secretariat.
Ms Oyun has given interviews to the UN Radio, China’s CCTV and Phoenix TV of Hong Kong. Together with a head of the External Relations Section of the Ministry D.Batbold, she met with Mr Ittiporn Boonpracong, a chairman of the "77+China" Group and Permanent Representative of Thailand, and with Ms Maria Eugenia, the Ambassador of Colombia to Kenya and chairwoman of the Group of Latin America and Caribbean countries.
Ms Oyun also has attended a symposium themed “Financial mechanism for green economy” to emphasize an importance of developing the financial market, delivering to the public an understanding of green economy and changing their tendency to environment in order to tackle financial matters of green economy. After this, she has met with Mr Yvo de Boer, the Director-General of the Global Green Growth Institute; Mr Hassan Hilal, the Minister of Environment of Sudan and a former chairman of the UNEA; Mr Yogeshwar Varma, the Permanent Representative of India to the UNEP, and with delegates of civil society for UNEP. Moreover, she has been invited to a banquet given jointly Peru, France and Poland.
The UN Environment Assembly will continue until Friday.

Turkish Speaker Visits Mongolian Ancient Capital

Ulaanbaatar, June 26 (MONTSAME) The parliament Speakers of Mongolia and Turkey visited Wednesday the ancient capital of Mongolia–Karakorum.
Our Speaker Z.Enkhbold and his Turkish counterpart Mr Cemil Cicek toured around the Erdenezuu Monastery, a probably the earliest surviving Buddhist monastery in Mongolia, and Karakorum museum in Kharkorin town, before heading for nearby Khoshoo Tsaidam museum displaying memorial installations erected by the Gokturks written in Old Turkic alphabet in the early 8th century in the Orkhon Valley in Mongolia.
After this, the Speakers watched a mini-Naadam festival dedicated to Mr Cicek. The visit of the Turkish parliamentary delegation ended with the countryside trips.
Khoshoo Tsaidam museum was established in 2010 to display and conserve valuable findings and inscriptions in both Chinese and Old Turkic, which relates the legendary origins of the Turks, the golden age of their history, their subjugation by the Chinese, and their liberation by Bilge Khagan.
Karakorum was the capital of the Mongol Empire in the 13th century and of the Northern Yuan in the 14–15th centuries. Its ruins lie in the northwestern corner of the Ovorkhangai province, near today's town of Kharkhorin, and adjacent to the Erdene Zuu monastery. They are part of the upper part of the World Heritage Site Orkhon Valley Cultural Landscape.

Standing Committee Head Works in Provinces

Ulaanbaatar, June 26 (MONTSAME) Head of the parliamentary Standing committee on security and foreign policy Ts.Oyunbaatar had a working tour to Selenge and Darkhan-Uul aimags on June 19-22.
He got acquainted with #330 military unit in Darkhan-Uul aimag and #0243 military unit in Selenge aimag to share views with their authorities on urgent problems facing the Armed Forces and border units.
Mr Oyunbaatar also attended an opening ceremony of the Altanbulag commercial free zone in Selenge aimag’s Altanbulag soum. The opening of this free zone is a start of vital actions to attract investments to Mongolia, he said and underlined an importance of improving a legal environment for free zones. 

Women MPs Work in ‘11 11’ Center

Ulaanbaatar, June 26 (MONTSAME) A group of women MPs is putting efforts to eliminate burdens ahead of engaging in small businesses, said L.Erdenechimeg MP amid an interview given to this Center on Wednesday.
Within its "100-day economic stimulus" program, the government is giving a special emphasize in fostering small- and medium-sized enterprises, she noted. As an overwhelming majority or nearly 80% of small or household business doers are women, the group conducted a survey to find out why so many complaints have been addressed to them about encumbrances from inspection authorities. The results revealed there is excessive formality in applying for launching a business, as ten documents at least are required ahead of granting a relevant permission or license, she said and promised that all the offers and survey results will be included in a law on operating  permissions as needed.
G.Uyanga MP called small business doers to make efforts to include their offers on the matter in a draft law on protection of rights of renters.

“Horse-based cultures” exhibition on display

June 26 (news.mn) On the 90th anniversary of the founding of the modern museum and the 93rd anniversary of the People's Revolution in Mongolia, the Mongolian Military Museum is opening a “horse-based cultures” exhibition along with Dundgovi provincial museum until July 4th.
Dundgovi is famous in Mongolia for its fast horses and singers. At the exhibition, a collection of traditional cultural objects including horse related objects and airag is on display. There are also whole suit of ancient Mongolian warrior’s armor on the horse and senior army service men and soldiers saddles from around the 1930s. Other items from the archives of the Mongolian Military Museum will also be displayed at the exhibition.
In the exhibition over 100 unique and rare objects will be on display from the outstanding khalkh craftsmen. The items include a full complex horse saddle with silver attire and a silver horse bridle, horse branding irons, horse bit, airag bowls, an airag spoon made of horn, a sandalwood bucket, a sheepskin sack for airag, and horse sculptures and a borjigin horse-head fiddle.

Mongolian ambassador visits; future flights on agenda

June 24 (japanupdate.com) Mongolian Ambassador to Japan Sodovjamts Khurelbaatar visited Okinawa last week, and also paid a visit to Okinawa Governor Hirokazu Nakaima, Friday.
During the meeting Khurelbaatar expressed his interest to begin direct flights between Mongolia and Okinawa when the new airport at Mongolia’s capital Ulan Bator opens in 2016. Ambassador Khurelbaatar said, “I hope to develop many types of exchanges, both economical and regional, with Okinawa.”
The new Ulan Bator International Airport in Mongolia is scheduled to be complete in 2016 when direct flights between Okinawa and Mongolia could be possible.
In an interview after the meeting, chairman of the Okinawa-Mongolia Friendship Association Isamu Kouei announced a plan to construct a Mongolia Village in Nakijin, where people can experience Mongolian lifestyles and learn about the traditional tent-like dwellings of Mongolian nomadic tribes called yurt. The facility is scheduled to open within this year.

Viking Mines signs second coal MoU with Mongolian power authorities

June 26 (proactiveinvestors.com) Viking Mines (ASX:VKA) has signed a second future coal supply agreement with a Mongolian Government power authority for its Berkh Uul Bituminous Coal Project in northern Mongolia.
This further validates the rationale for Viking to takeover Auminco Mines and Berkh Uul’s potential to deliver high quality thermal coal.
The non-binding Memorandum of Understanding was signed with Erdenet Power Plant State Owned Stock Company (EPP), a major supplier of electricity to the Erdenet copper mine.
“The fact that Berkh Uul Project continues to be recognised by the Mongolian Government as a potential key supplier of coal to the EPP is a further significant milestone in the development of the project,” managing director Peter McMickan.
“Auminco’s ongoing discussions with domestic end-users continue to confirm a local industrial demand in northern Mongolia for unwashed Berkh Uul coal, due to its low ash, low sulphur and relatively high calorific value.
“This second MoU provides more evidence of the potential customer base for Berkh Uul’s coal.”
Erdenet Power Plant
The Erdenet Power Plant is a 36 megawatt power plant that consumes about 250,000 tonnes of coal per annum.
The MoU relates to the intent by EPP to enter into future purchase agreements for Berkh Uul coal.
It also establishes a basis for technical evaluation of the quality and quantity of coal, which includes testing of a bulk sample.
This follows an earlier agreement with Darkhan Thermal Power Plant, the major supplier of electricity to Mongolia’s second largest city, the commercial and industrial centre of Darkhan, and the northern region of Mongolia.
Berkh Uul
Berkh Uul is 100% owned by Auminco Mines. It is located 400 kilometres north of Ulaanbaatar in Northern Mongolia, and within 40 kilometres of rail access into Russian off-take markets.
It is currently held under an exploration permit that covers 4,550 hectares and is valid until 2015. A Mining Lease application is imminent.
RungePincockMinarco has completed an Independent Geological Report in March 2014 that was based on 45 diamond drill holes and estimated a JORC (2012) Indicated Resource of 21.4 million tonnes, and Inferred Resource of 16.9 million tonnes, for a total of 38.3 million tonnes of near surface and high quality bituminous coal.
Evaluation of raw unwashed coal quality shows: moisture content of 19.8%, ash 15.5%, sulphur 0.37%, and calorific value of 5,323 kcal/kg.
This work also identified the presence of multiple, shallow dipping sub-parallel coal seams on the eastern limb of a gently folded syncline, with individual seams of 0.6 – 4.5 metres over a 3 kilometre strike length that extends to a depth of 200 metres.
Viking has received acceptances for 97.08% of Auminco under its takeover offer of 60.6 Viking Shares and 20.2 Viking Options for every 100 Auminco Shares held.
Analysis
While not binding, this second MoU from Mongolian power authorities confirm a local industrial demand in northern Mongolia for unwashed Berkh Uul coal, due to its low ash, low sulphur and relatively high calorific value. 
Auminco’s ongoing discussions with domestic end-users continue to bear fruit. It is further evidence of the potential customer base for Berkh Uul’s coal.
It is clearly being recognised by the Mongolian Government as a potential key supplier of coal to the EPP which should underpin the development of the Project.
Importantly, this sould fast track the development of Berkh Uul over the next 12 - 18 months.
We believe that Viking Ashanti can develop a small scale operation that could generate a conceptual free cash flow of up to US$3-5 million.
Our projected valuation for Viking Ashanti is $0.085 to $0.165 per share. This compares to its current share price of $0.04 per share. 

Preparation for Naadam is underway

June 26 (news.mn) A wide range of preparation for the opening and closing ceremonies and State Ceremonial Concert of Naadam for the 808th anniversary of the Mongol State and 93rd anniversary of the People`s Revolution has begun.
Last year`s organizing team is reuniting for the preparation of this year`s Naadam Festival.
For the opening and closing ceremonies of Naadam, over 5000 artists will participate while 1000 artists will perform in the State Ceremonial Concert that will be held at the Central Cultural Palace.
The organizing team of Naadam includes the prominent choreographer D.Bayarbaatar, D.Enkhgerel, and Ariunbold and State Honored, State Merit Artist D.Sosorbaram. The organizer of the Naadam preparation D.Sosorbaram said that Naadam will be organized under the theme of “High destiny of Mongolia” displaying nomadic people`s history, philosophy and wonders.
During the concert there will be 21 female throat singers and 21 male khoomii singers, and 33 Mongolian traditional folk dancers in a display like an opening flower.
This year the government approved a budget of 300 million MNT for the preparation of the three main events: the opening, closing and ceremonial concert.

Opening of “Ulaanbaatar Sculpture Festival” held

June 26 (news.mn) An opening of “Ulaanbaatar Sculpture Festival” was held at Independence Square on June 24th.
Ulaanbaatar Sculpture Festival, organized by the Ulaanbaatar Governor`s Office and Municipal Planning Authority will continue until July 19th.
At the opening of the festival, an exhibition of drawings created through different methods including by Mongolian traditional script, in an aquarium, by computer, by feet, by mouth and by sand were displayed.
A drawings and sculpture work contest for adults and plasticine work contest among children was carried out.
In the scope of the program “Friendly Ulaanbaatar”, the 3D art decoration contest has announced that it will name its winner on July 21st.
As part of the program “Community culture” a contest for the design of sculptures has been announced. The contest has received 25 amazing works from competitors.
During the Ulaanbaatar Sculpture Festival, the “City Decoration and Sculpture” scientific conference will take place at Khangarid Palace on June 27th.
The works of the Festival will be displayed to the public at the National Garden Park in Ulaanbaatar between July 5th and 14th.
The closing of the festival will be held during the Investors Forum at the Mongolian National Chamber of Commerce and Industry on July 16th.

A Dark Life in Tsagaan Khad

June 26 (Mongolian Economy) A number of trucks scurry along a dirt road, raising dust in the air. The clouds of dust force them to detour on and off the road because of poor visibility. This happens every day here in Tsagaan Khad and is just the norm for those who live and work here.
Tsagaan Khad meaning “white rock” is a baghs (a sub-category of a county) of Khanbogd in the province of Umnugobi, close to where the Oyu Tolgoi mine operates. A number of people, especially truck drivers, have been lured here by the opportunity to make money. Just a few years ago, this area was just a desolate landscape. It is located 130 kilometres from Khanbogd and 240 kilometres from Tsogttsetsii, near where the Tavan Tolgoi coal mine is located.
Everything has changed since a customs control zone was established in Tsagaan Khad a few years ago. This customs facilitates coal en route to China. In Tsagaan Khad, there are a number of residents from different provinces such as Khuvsgul, Bulgan, Orkhon, Uvs, Khovd and Zavkhan. The population is increasing and they need schools, kindergartens and health facilities for the area. 
Many people in Tsagaan Khad live in traditional gers, but most are dirty and shabby because of the dust kicked up by the never-ending cavalcade of coal trucks driving over the dirt roads and soot picked up from coal by strong gusts of wind. Tsagaan Khan is increasingly beginning to resemble a small town as the number of migrants from other provinces grows.
In Tsagaan Khad, the organisation’s gers and houses are found strewn about across the landscape. According to the governor of Khan Bogd, it is because of unregulated sprawl. Gers are built haphazardly and are surrounded by unused tyres and broken spare parts for trucks.
A great deal of coal is stored at Tsagaan Khad as well, but moving tons of coal also spreads giant clouds of soot. It is typical for mines to curtail operations at mines for three months each year, but the clouds never disappear because of all the coal left outdoors for soot to be picked up by winds.
Trucks typically have the capacity to load 70 tonnes of coal at once. But it is common for mining companies to load more than 100 tonnes to save money. This leads to an increase in a number of accidents.
Trucks often drive slowly to maintain visibility, but every minute is money here. And with coal prices declining, the truck drivers are under immense pressure. One truck driver said that 1,000 trucks usually pass by customs each day. However, the soft coal market means it’s not unusual for just 400 trucks to pass on some days.
Hazy Futures
It is 25 kilometres between Tsagaan Khad and the Gashuun Sukhait – Mongolia’s third biggest customs check point. Coal trucks travel along a narrow and dangerous dirt road. Most drivers have grown accustomed to the hazardous nature of their job. 
There are two types of drivers that travel between Mongolia’s coal mines and China’s Gants Mod border point: those who work for Mongolian mines and those who work for Chinese.
The only requirement to work for a Chinese company is a driver’s licence. It is a tempting prospect for those looking for work, and people travel from all over.
Chinese companies do not pay insurance fees and drivers risk their lives on these hazardously dusty roads. Any accidents that occur are the drivers’ faults and they are responsible for paying for the damage. Drivers are paid MNT 280,000 per trip across the border, which creates large incentive to drive even when it is dangerous to do so because of exhaustion.
Chinese companies have 8,000 trucks in total, of which 4,000 are driven by Mongolian drivers. Each one of them has to pay a RMB 1,500 (MNT436,000) for a year’s permission to drive across the border. The distance drivers travel is entirely up to employers. Any driver who manages to transport more than 110 tonnes of coal in one trip is given a bonus of RMB 100 (MNT 29,000).
Mongolian coal mining companies find it hard to compete with those across the border because drivers are so expensive.
“Chinese people voluntarily let Mongolians work for them as truck drivers. In general, they drive trucks to transport coal from Tsagaan Khad. But when their visa is over, they let us complete the short distance to transport for them,” said Dashdavaa, a Mongolia driver who works for a Chinese company.
Dashdavaa came to Tsagaan Khad from the northern province of Khuvsgul more than three months ago, but he said that he has not been able to earn enough money to send to his family in his hometown because of the downturn in coal demand. 
Dashdavaa’s truck was carrying 118 tonnes of coal, 48 more tonnes then the truck is meant to hold. He said it was common for the link carrying the trailer to get damaged, as well as problems with brakes. But drivers are desperate for the RMB 100 (MNT 29,000) bonus.
Lucrative Tyre Repair Work
Tsagaan Khad has five or six tyre repair services because it is common to have holes punched in tyres. It costs MNT 10,000 per tyre repaired MNT 8,000 to change in a new tyre. Tyre service centres used to earn MNT 150,000 to MNT 200,000 a day when coal exports were booming. But those days are gone and business is merely sputtering along today.
“If we stay here longer, our health will deteriorate. So, we hope that we will not be here for that long,” laments Oyuntsetseg, the owner of a tyre service centre. “It is a quite difficult to face strong and dusty wind every day.”
“Immediately after moving here, we started thinking of going back to Orkhon province, where we came from. After a month we managed to adapt to the current situation. Before we came here, our monthly wages sustained our lives. Since we started earning some profit here on our own, we thought to continue our business and be more patient.”
This family intends to go back to their hometown to resettle after the eldest son’s graduation from university.
Work hazards and health risks
When drivers return from the Chinese border point after unloading their coal hauls, there is a paved road that costs RMB 100 to use. The companies do not pay for that, however, so naturally drivers do not use the road to avoid the extra fee.
The roads are dangerous but air pollution caused by the dust and coal is also causing concern.
“There is no doubt that this tremendous air pollution causes respiratory disease,” said Oyuntsetseg.
Because we are still young, we might not feel it at this moment. When we need medical services, Khanbogd county, located 130 kilometres from here, is the only place we can find a hospital and see a doctor.” 
“Sometimes, we have a headache or stomach ache. In that case, we use some pain killers to get over it. Everybody here does the same. It is not easy to find cars that will take us to Khanbogd county. Also it’s quite rare for people to hitchhike to Khanbogd county to see a doctor.” 
The lure of more money and a prosperous life is the main draw card for the truck drivers navigating the dirt roads of Tsagaan Khad. The trade off, however, is huge risk to one’s health and life. 

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