Friday, July 4, 2014

Mongolia Brief July 3, 2014 Part III



Tumurtei iron ore concentrator launches

July 3 (UB Post) The opening ceremony of the iron ore concentrator of Tumurtei mine was held on July 1.
The concentrator has the capacity to process three to four million tons of iron ore a year and is a project of the Darkhan Metallurgical Plant, a state owned joint stock company, for establishing an iron and steel industrial complex. Its construction started in 2010. The total cost of the project is estimated to be around 700 million USD and QSC LLC was selected as the investor. So far, QSC LLC has spent around 100 million USD. The project is scheduled to be completed in five years.
Until recently, aside from Altain Khuder LLC, Mongolia didn’t have a high capacity company to process such large amounts of iron ore. In the future, the Darkhan Metallurgic Plant is planning to produce steel. Equipment for the concentrator was manufactured by a U.S. company named TRIO, and it will be used to produce iron ore concentrates of more than 55 percent.
From the 400 million tons of iron ore reserves in Selenge and Darkhan provinces, Tumurtei iron ore mine has 229.3 million tons of reserve. This mine consists of three major sections: eastern and western mines of the eastern section, and its western section. The Mongolian Minerals Council officially approved 18 million tons of iron ore reserve for the western mine in the eastern section, which started operations first, 120 million tons for the eastern mine of the east section, and 90 million tons for the remaining mine in the western section. Mining engineers and a work force for the second stage of exploration have been selected.
According to the plan, two million tons of iron ore from the western mine and three million tons from the eastern mine is to be explored each year. The respective mines can be used for 50 to 60 years. The state owned joint stock company Darkhan Metallurgical Plant took Tumurtei iron ore mine under its ownership in 2008 and started exploration in 2011.
Vice President of Darkhan Metallurgical Plant O.Bolor-Erdene gave clarifications about some issues the project.
The price of iron concentrates fell considerably with the passing years. On top of that, the Mongolian economy and financial environment isn’t doing well. Despite these difficulties, the first stage of the project was implemented successfully. To open the plant, what sorts of difficulties did you face?
Presently, the lowest price for one ton of iron is 80 to 90 USD. During economic crisis, major national companies such as Oyu Tolgoi and Tavan Tolgoi are transferring to a system of laying off employees and reducing salaries. Tumurtei mine, on the other hand, is recruiting staff from within the country, instead of firing them. On July 1, employee salaries were raised by 25 percent.
Investments were delayed and halted but we overcame this difficulty successfully and completed our construction work on time. For instance, we commissioned a substation in Eruu soum and began construction work for a 50 km air strip, a 16 megawatt substation, and a 34.5 km- long railway track from Tumurtei mine to Khangait Railway Station.
I’m happy to have established an iron ore concentrator adjacent to Tumurtei mine and completed processing the first iron ore concentrate.
When will iron ore concentrates of the first stage be exported?
The transportation schedule is uncertain. We’re trying our best to export concentrates as quickly as possible. Next year, we’ll commission the 34.5 km railway track from Tumurtei mine to Khandgait Railway Station of the Boldtumur Eruu Gol LLC. This way, we’ll be able to transport concentrates directly from the mine. Until then, we’ll use vehicles to transport concentrates for the 20 km distance.
How much is Tumurtei mine focusing on improving livelihoods and providing workplaces for local residents?
Tumurtei mine understands its social responsibilities very well. The mine has over 270 workers. There are three local residents for every ten miners. We’re working to increase this number further. Furthermore, we’re sponsoring 25 local students, who will work for the concentrator plant in the future, to study at Darkhan Vocational Education Training Center (VETC). These students will be provided with a workplace at the iron ore concentrator when they graduate. We’ve constantly been investing in local infrastructure work and cultural activities. While doing exploration, we’ve focused on restoration and forestation works. In other words, when resources finish, this land will not be covered with holes and red earth, but with trees and forests.
This work is said to have been completed with state funding under state construction regulations. Can you comment on this?
This project of Darkhan Metallurgical Plant for metallurgical mining costs around 700 million USD. This is a big project, which includes producing steel products from iron ores and establishing wet and dry magnetic concentrator plants. It already received an investment of around 100 billion MNT. If the eastern mine is commissioned in Autumn, it’ll get an additional investment of some 50 billion MNT. Most importantly, we’re at an advantage since the national QSC is investing. Also, we own the concentrator plant through a concession agreement which is also beneficial. For the first stage of the project, we commissioned a substation in Eruu soum and began construction for a 50 km air strip from the substation to Tumurtei mine which has a capacity of 110 KW, a 16 megawatt substation, and a 34.5 km railway track from Tumurtei mine to Khangait Railway Station. We’ve also built a dry magnetic concentrator plant. Soon, the wet concentrator plant will be commissioned and we’ll use its iron ore concentrations for the steel mill. We’re planning to produce steel domestically by 2017.
Source: Daily News

S.Ganbaatar: Being a Member of Parliament is not about fame while sitting on a soft seat

July 3 (UB Post) The following interview is with Member of Parliament S.Ganbaatar about the recent dispute with Oyu Tolgoi (OT) regarding taxation.
Issues around OT have emerged again. You may have heard that OT has still not paid the taxation of 130 million USD to the Mongolian government. Do you have any information about this?
This report has been proved and guaranteed, since it was made by the Ministry of Finance and Mongolian legal organizations. In other words, the General Department of Taxation has announced that OT must pay taxes totaling 130 million USD. In this case, Rio Tinto must stop saying that they won’t pay the tax and refer to arbitration. Instead, they should complete what is written in the OT contract.
But they have the right to go to arbitration, don’t they?
If OT considers the General Department of Taxation’s report to be false, they can go to the Taxation Argument Management Commission, under the General Department of Taxation. Any taxation arguments have to be solved through this commission. Going to arbitration and skipping the Taxation Argument Management Commission is not a positive step for OT. I believe in the Mongolian authorities that made that report.
Do you think taxation issues could become a reason for delaying the pre-feasibility studies for underground mining? There is information that investors made this statement.
Mongolians believed that the OT contract would create a lot of jobs, improve our budget and that then unemployment would vanish. That is why we established the contract. Unfortunately, OT has turned into a company that threatens and puts pressure on us. At the time when the contract was being established, I appealed and questioned it a lot, pointing out the specific terms in the contract, but lawmakers barely acknowledged my words. Besides, investments in underground mining will be harmful to us because our stake of 34 percent in these projects will incur a debt of 1.2 billion USD. This amount of money could build 1,700 kindergartens, but 800 kindergartens are enough for all the children in Mongolia.
But if the underground mine isn’t financed the project will be over, right?
Honestly, the investment for the underground mine has already been included in the initial investment of 5.1 billion USD.  The OT contract stated that 262 million USD for surface mining and 1.52 billion USD was for underground mining. In other words, the investment in underground mining has already been given through the first pre-feasibility study. I know the OT contract by heart and I guess there are very few members of parliament who have read the OT contract.
The initial investment of 5.1 billion USD has increased since then, right?
We should ask investors why it has increased. For the last few years, the price of mining equipment has increased by five percent, at maximum. The price of some equipment has decreased. If people compare the price of a Toyota Land Cruiser with the first year of the OT contract, they will see that it has barely increased. Consumer goods might have increased, but the price of mining equipment has not increased. Why don’t we ask investors about this? OT wants four billion USD now and 30 percent of this is 1.2 billion USD.  Thirty-four percent of 5.1 billion USD of the initial investment was 1.4 billion MNT. Just think about it, we will be paying our debt without earning any benefit in the future.
Did the government send a letter to Rio Tinto about its use of underground mining?
The majority of our members of Parliament are representatives of multinational corporations. In my view, we have to confront people who considered an investment of 5.1 billion USD enough when they made their pre-feasibility studies. Furthermore, they also defrauded the Mongolian people, why don’t we use the income from open pit mining for the investment in underground mining if we really need that investment. This is my wish and politicians have to understand it. Sometimes I’m critical of myself because I can’t convince politicians.
A “breakfast club” has been established as part of the Cabinet meetings. Have the members of this club concluded their ideas?
I believe that we have one idea.
Do you have any plan to deal with the problem with the help of others? Some politicians were saying that your group is engaged in populism in order to become presidents one after another?
Member of Parliament Ts.Nyamdorj spoke about it. He is a senior politician. I think senior politicians are to blame for the hard situations in this society. He always talks about assigning blame, but I am different from him because I talk about real issues happening in Mongolia. In conclusion, I don’t talk about people and I will still be talking about issues.
The public expects policy change in railway transportation. What is the stance of the ten members of the breakfast club?
The members of the breakfast club are very friendly with each other on this issue. We are standing firm over the laws regarding railway and mineral resources. Mongolia needs money at present, but I prefer Mongolian freedom and independence much more.
Could you talk about the Law on Mineral Resources?
I am wondering why they are trying to pass this law during Naadam. I will definitely protest this law. I am respectfully pleading with the initiators of this law to stop it.
It seems that independent candidates are not able to cooperate with each other. You are talking about other issues and the others are talking about the Law on Petroleum.
We do separate work.  Kh.Bolorchuluun cares about the Law on Petroleum, I care about issues of the Central Bank of Mongolia, price increases and exchange rate policy, and Ts.Davaasuren watches over the health insurance and accountancy laws. We have the special status “Member of Parliament”. I understand that this status is given to me to protest against the oligarchy. Being a Member of Parliament is not about fame while sitting on a soft seat.
Source: Undesnii Shuudan Newspaper

B.Enkhtsetseg: Labor exploitation is another form of human trafficking

July 3 (UB Post) We talked to B.Enkhtsetseg, official of a program against human trafficking at the Center for Human Rights and Development (CHRD), about human trafficking issues in Mongolia, earlier this week. Our interview largely focused on labor exploitation – one of the identified forms of human trafficking – which reportedly makes up most of the cases related to human trafficking in Mongolia but still remains outside of the public’s knowledge.
Can you talk about the severity of human trafficking in Mongolia?
Mongolia acts as both a transit and source country, as well as a destination point for trafficking victims. However, I want to talk more about domestic human trafficking, especially labor exploitation in Mongolia, whose victims are mostly found in road and construction projects, or in remote areas.  For instance, the Division Against Human Trafficking at the State Investigation Authority solved a case where an orphan child was forced to herd livestock for one family for two years.
We’ve heard that there has been a growth in labor exploitation, more so than sex trafficking. The organizations involved, especially the police, are getting better at recording these cases, which makes it seem like the crime rates have gone up. Do you believe that human trafficking is getting worse in Mongolia, or are the police just getting better at recording these incidents?
The first human trafficking case in Mongolia was reported in 2000. Though human trafficking was included in the Criminal Code of Mongolia, it was still lacking much. Finally, the code was revised in accordance with the Palermo Protocols after Mongolia joined them in 2008.
Also, there are several major organizations in Mongolia that are working against human trafficking, including the CHRD, which was founded in 1998. We have been holding training for law enforcement investigation skills on human trafficking cases. Police officers have improved a lot in the past 14 years, and also the laws have been amended. A specific law against human trafficking was approved in Mongolia in 2012 and I believe that all these helped police competency in recording the cases.
The public has also learned about human trafficking in the past few years and started contacting the police as victims. Police departments established divisions against human trafficking with the support of the government as well. Many factors have influenced the increase in recorded cases.
The overall situation of human trafficking has changed a lot in Mongolia. Which areas still need work in order to improve? For example, the number of labor exploitation cases has been increasing lately. What do you think can be done to bring down the number of these cases?
Law enforcement organizations need to track down and investigate labor exploitation cases more. The case of the orphan child was actually the only one the police initiated a criminal case for. The courts, police and other law enforcement organizations still need to learn more and acquire a proper education and practical experience in labor exploitation cases.
One reason that labor exploitation cases are not being solved is that those citizens who have been doing forced labor for a small amount of pay, or without pay while either captured or free, can’t show law enforcement organizations enough evidence that they didn’t have any other options and were forced to work. Enforcement of the Human Trafficking Law has been quite poor as well.
In 2012 and 2013, the CHRD submitted five labor exploitation cases to the police and they investigated two of the cases, but refused to further initiate a criminal case on them.
We are hoping that the revised draft of the Criminal Code of Mongolia will enable a better legal framework for labor exploitation if it is approved by Parliament.
Which countries are Mongolians trafficked to, and from which countries is Mongolia receiving trafficked people?
People from the Philippines and Vietnam are coming to Mongolia to work as maids, and several of them have become victims of labor exploitation here, but we haven’t worked closely on those cases. As for Mongolians, we have received labor exploitation reports where Mongolians went to Kazakhstan, Turkey and South Korea to work and ended up working while detained without a pay.  But these cases have been dealt with in accordance with fraud laws, as certain people deceived those Mongolians and charged them for helping them find jobs in those countries.
Why are labor exploitation cases so difficult to prove?
Mongolians think the only identified forms of human trafficking are sex work or organ trafficking, so they do not realize that they are actual victims of another form of human trafficking -  labor exploitation. That is why the number of labor exploitation reports is still low.
They believe that their work of a week or a month without pay is not a big deal and just think it is due to rising demand for jobs.
As I’ve mentioned before, the police don’t know how to investigate and prove labor exploitation cases. The Human Security Policy Studies Center, Caritas Mongolia of Caritas Czech Republic and the European Union jointly established a network in Mongolia, through their own funding, and are enrolling law enforcement officials in training for improving their skills in investigating, detecting and solving labor exploitation cases.
Mongolia is only in the early stages of working on labor exploitation cases, and these are typically seen as civil violations rather than criminal cases.

E.Khaliunbold wins two gold medals at Russian Motocross Championship

July 3 (UB Post) Motocross racers of the Mongolian Automobile Motorcycle Sports Federation participated in the Russian Motocross Championship, which took place in Angarsk, Russia, on June 28 and 29.
Mongolian racers won five medals.
International Sports Master and Asian champion E.Khaliunbold captured two gold medals in the 250 cc and 450 cc categories.
Mongolian racer Kh.Temuujin received double bronze medals in the 250 cc and 450 cc categories.
In the youth 250 cc category, Mongolian racer Kh.Munkhbolor won a bronze medal and newcomer B.Batmunkh placed fifth.

Open-air concert at Chinggis Square to bring classical music to the people

July 3 (UB Post) The birds will be singing along on Sunday.
On July 6, 2014, the Mongolian State Academic Theater will offer an open air concert to the public at Chinggis Square, performing select classical works from its ballet and opera repertoire. The theater is hoping to bring classical music to a wide-ranging audience at the relaxed square, usually seeing a limited audience due to seating constraints in its theater.
The Mongolian State Academic theater is currently in its 51st season, hosting 14 ballets and 14 operas per year. The Western classical music performance in the economic and political city center marks the art form’s place among Mongolia’s rich traditional musical styles such as morin khuur and throat singing. Western classical music has existed and thrived in Mongolia since becoming a satellite nation to the Soviet Union, who introduced many art forms to much of Asia. Many Western music and dance schools now exist in Mongolia, where the Mongolian State Academic Theater selects its performers.
A special outdoor stage will be built for the dancers and musicians at Chinggis Square, with seats available for two to three thousand people. International classics will be performed, such as excerpts from “Don Quixote” and music by Strauss, as well as music by celebrated Mongolian composers.
Ch.Munkhzul spoke about the purpose and importance of the performance, emphasizing her desire to spread the art form to a younger crowd.
“Most people see ballet and opera as very far away from themselves, especially young people. If they could see the wonderful world of classic dance and music, they would not feel this way… there is a lot to learn from ballet dancers. They are very brave. They learn when they are so young and dedicate their lives to the practice,” she remarked. “Mongolia is very musical. Music is in our blood with our folk dancing and singing; the traditional peoples could sing and dance for days. So it is natural for us to excel in classical art performance.”
Patrons are invited to Chinggis Square at 8:30 p.m. for the 9:00 p.m. performance and are advised to arrive early as seats will fill quickly.

Pushing the boundaries of creativity

July 3 (UB Post) Erdene is an art director and designer. Viewing Erdene’s online portfolio you can see interesting animated figures that direct you to her different projects. She shares her life and career motto, “It’s not how good you are, it’s how good you want to be.” At once you can see her ability to work in many different fields of design.
Erdenechimeg, or simply Erdene, graduated in 2010 from The One Academy of Communication Design Malaysia, majoring in multimedia design. After graduating, she worked for renowned advertising companies in Singapore, including Publicis, Ogilvy & Mather, and JWT Singapore. Currently, she is working towards finding her true, unique style with the career goal of creating her own lifestyle brand.
A firm believer of not restricting creativity to a single discipline, her professional directions are wide, but mainly she concentrates on creative solutions, art direction, design, illustration, interactive design, and fashion and beauty.
She has won numerous awards, such as “Most Outstanding Portfolio” at Singapore’s Portfolio Night 2011, the Silver Effie 2013 for her anti-binge drinking campaign “Last Man Standing”, gold and silver accolades at 2013 Spikes Asia, and the most prestigious advertising award, the Cannes Lions, with “Sharing Can” for Coca-Cola.
We asked her a few questions about her career:
How do you find inspiration?
I collect everything that interests me visually or conceptually. Since inspiration comes from real life experiences, it’s also important to go out, make friends, meet interesting people and travel.
What is the best part of being an art director?
I really enjoy the process of idea generation. Another favorite part of mine is art directing where I need to explore different types of visual styles.
As you know, art is very subjective in nature. What some people like, others do not. I’m sure you’ve received both positive and negative feedback in your career, but what I want to know, is how you handle the negative criticism.
Yes, it’s true that art is subjective. So you need to have a strong rationale behind your work and be able to explain it to anyone. You also need to be confident and stand by your opinion. That doesn’t mean close yourself off from feedback, but listen to constructive feedback and make changes if you feel it improves the work. It’s also worth noting that while art is about self-expression, advertising is about communication. A beautiful piece of art that doesn’t communicate the message; it’s worthless in advertising.
Do you think your Mongolian roots are reflected in your work?
Unfortunately, I don’t see it in my commercial work. I never really have done work for a  Mongolian audience or for Mongolian products, although I’m looking for that opportunity. That’s why I try to do work that is inspired by Mongolian culture in my free time. I’m truly fascinated by Mongolian script. It’s not so much utilized in modern design. As a Mongolian, I hope to do typography work using Mongolian script. I also hope to do my little part in stepping up the Mongolian design and advertising industry. I joined the Mongolian designers group “Bid Mongol Aguulga” and also started a blog at www.erdene.co to share my experience.
What’s the coolest art tip you’ve ever received?
In the beginning of my career, I was made art director on a big regional campaign and was worried that I didn’t have enough experience. But my senior colleague told me that there is no wrong or right in advertising, so be confident.
Coca-Cola “Sharing Can” was really interesting. Explain the idea to us, and the results.
Me and my two other colleagues came up with this idea one year prior to the production of the advertisement. Coca-Cola branding is all about sharing happiness. So we got this simple idea to design Coca-Cola’s classic one-person can for two. People just had to split Coke down in the middle. Half for the person, half for someone you love – half the size resulting in twice the happiness. It was a successful campaign and won many awards, such as the Cannes Lions, London International Awards, and has nearly two million hits on YouTube currently.
What are your future career goals?
I want to continue working in advertising. Also, I want to keep exploring my personal style in my free time and try to make lifestyle products, such as a phone cases, greeting cards, calendars, and so on.
What are your dreams?
My ultimate dream is to have a global lifestyle brand that is inspired by Mongolian culture.
To see samples of her work go to: www.erdene.co
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