Sunday, November 16, 2014

Mongolia Brief November 11, 2014

R.Amarjargal rumored to be the DP caucus nominee for new PM
November 11 ( The meeting of the National Coordinating Committee of the Democratic Party (DP) on Saturday assigned responsibility to the DP caucus and party leader to nominate the next Prime Minister. If the DP caucus agrees with other political parties in parliament on the candidate, the chances of R.Amarjargal becoming the next PM are high.

However, the DP's conflicting political factions Altangadas, Shonkhor and Mongolian Democratic Union have not agreed on a candidate for PM.
The possible choice might be a candidate from the Mongolian National Democratic Party (MNDP). The MNDP suggested Ts.Bayarsaikhan as a candidate for PM but he declined the nomination. Rumors say that the political factions will agree on the nomination of R.Amarjargal, a former member of the MNDP.
After the ousting of PM N.Altankhuyag on November 5, the Mongolian State Great Khural (Mongolian parliament) has only 30 days to appoint new a PM, according to law.
Apparent conflict between the Shonkhor and Mongolian Democratic Union led to PM N.Altankhuyag's reform government election from Altangadas.
Altankhuyag will remain as the leader of the DP, as the party agreed to review the issue during the meeting of the party's National Coordinating Committee of the Democratic in one month.

Kawai - Future of Piano Opens Its Doors in Ulaanbaatar, Mongolia
November 11 ( One the largest and best known musical instruments manufacturing companies in the world, the Kawai has opened its doors in Mongolia and the launching ceremony with participants of well known musicians, politicians and other attendees was held at the Blue Sky Tower in Ulaanbaatar on November 07, 2014.
At the blue ribbon cutting ceremony, Kawai Company President Hirotaka Kawai, Minister of Culture, Sports and Tourism Ts.Oyungerel, Ambassador Extraordinary and Plenipotentiary of Japan to Mongolia Takenori Shimizu, Governor of the Capital City and Mayor of Ulaanbaatar E.Bat-Uul and many other familiarities were present.
Most notably at the launching ceremony, famous Russian pianist Elmar Gasanov and well known Japanese pianist Nanako Kurita have performed their best pieces introducing the Kawai piano’s unique sounds upon the invitation.
“By opening this brand shop in Mongolia, it creates a new atmosphere on music market and brings large-scale investment into social aesthetic education”, comments Culture Minister Ts.Oyungerel.
Also, the company authorities added to open Kawai Musical School in Ulaanbaatar.
On the same day, Mayor E.Bat-Uul received in his office the Company President Mr. Hirotaka Kawai and in the scope of “Friendly Ulaanbaatar” Program, parties agreed to collaborate by organizing Piano Festival in Mongolia.
Kawai Musical Instruments Manufacturing Co., Ltd., best known for its grand pianos, upright pianos, electronic keyboards and electronic synthesizers, headquartered in Hamamatsu, Shizuoka, Japan was established in August 1927 by Koichi Kawai.
Mr. Hirotaka Kawai was appointed as President of the Company in 1989. He established Kawai manufacturing facilities around the globe. Today, the Kawai Musical Instrument Manufacturing Company distributes acoustic and digital pianos to over 80 countries.
In Ulaanbaatar, the Kawai Shop is opened in the Blue Sky Tower.

Hunnu Air Stops Its Direct Flights to Hong Kong
November 11 ( The Hunnu Air, Mongolian domestic airline temporarily cancelled for uncertain period its international flights to Hong Kong from November 07, 2014.
The reason to stop flights to Hong Kong is said due to financial difficulties and the Hunnu Air’s two Airbus A319-100, the only fleets that conduct Medium and Short-Haul flights are being kept in Hong Kong and not authorized to departure until the Hunnu covers its debt to an affiliated company in Hong Kong.
At this moment, all tickets purchased to/from Hong Kong-UB are being returned at “Air Trans” Ticket Agency.
Currently, the Hunnu Air conducts its scheduled international flights to/from Erlian (Inner Mongolia), Manzhouli (Inner Mongolia) and Hailar (Inner Mongolia) as well as domestic flights to/from Uliastai (Zavkhan), Dalanzadgad (Umnugovi), Khovd (Khovd), Murun (Khuvsgul), Choibalsan (Dornod) and Ulaangom (Uvs).
In May 2014, Mongolian domestic airline, Eznis Airways LLC announced to stop its operation for an uncertain period of time due to the financial difficulties.

Asian Development Bank to Administer on Financing "Glass Account" Project in Mongolia
November 11 ( The State Great Khural (Parliament) of Mongolia ratified the Budget Transparency Law or Law on "Glass Account" last July 01st initiated by the President of Mongolia, which is to be effective from January 01, 2015.
The Budget Transparency Law that entered into daily lexicon as “Glass Account” Law is purposed enabling citizens to control and monitor the expenditure of taxpayers’ money. In order to adhere the law, the Ministry of Finance is to carry out a Project to Improve Transparent and Efficient Public Financial Management.
Earlier, the Government of Mongolia requested the Asian Development Bank (ADB) to assist, where the ADB accepting the proposal decided to administer this Project financed by Japan Fund for Poverty Reduction.
Accordingly, the ADB, Japan Fund for Poverty Reduction and the Ministry of Finance of Mongolia signed 1.1 million USD Grant Agreement on Technical Assistance in Ulaanbaatar on November 10, 2014.
The Grant Agreement was signed by the State Secretary of Finance Ministry Kh.Gantsogt, Director General of the General Department of Taxation T.Batmagnai, and Director General of the ADB East Asia Ayumi Konishi with the attendance of the Embassy of Japan in Ulaanbaatar and Japan International Cooperation Agency (JICA).
The Project will be carried out over 2 years until November 2016 and consists of two parts, the first phase to be implemented by Ministry of Finance is a Project to Improve Transparent and Efficient Public Financial Management and the second to be carried out by General Department of Taxation is Project to Improve e-Taxation Systems, where the Government is providing 55,000 USD in counterpart financing.
“Modern public investment management and e-taxation systems will make the Government of Mongolia more accountable, build trust among citizens, and ensure public financial management is more effective by enabling better budgeting for limited public resources”, said Ayumi Konishi.
Mongolia initiated a public investment management system in 2011 to make information and data publicly available and better manage public investments. However, the lack of expertise available has hampered progress and the system remains in its formative stage.

DP nominates MP R.Amarjargal and Ch.Saikhanbileg for PM
November 11 ( The DP caucus in parliament held a meeting today to discuss nominations for a new Prime Minister.
MP R.Amarjargal, MP and head of the Cabinet Secretariat for Government Ch.Saikhanbileg, MP and head of the Standing Committee on Environment, Food and Agriculture G.Bayarsaikhan, and MP and head of the Standing Committee on Justice D.Ganbat were nominated as candidates for new PM.
But D.Ganbat is not able to gain support from the caucus, so the votes will be divided between the two MPs, say reports.
The DP caucus meeting took an afternoon break and resumed the meeting at 1:00 p.m.
As the DP caucus meeting continues, the most favored MP of those nominated will be nominated for PM.

T.Batmagnai: No details on Oyu Tolgoi tax issues
November 11 ( T. Batmagnai, Commissioner of the General Department of Taxation, spoke on current, timely issues.
-As the year comes to an end, how will the General Department of Taxation collect tax payments?
-Currently taxable income planning is at 74.7 percent at the General Department of Taxation. In past years, the taxation office has increased budget revenue from tax income. Tax income that goes towards that budget was higher in 2013 than in 2012, and in 2014, a higher number is planned than was collected in 2013.
In 2014, the General Department of Taxation aims to provide revenue to the budget no less than it did in 2013. The department produced 1.9 trillion MNT for the government budget in 2013, more than it did in 2012. For 2014 the department is in charge of producing 2.6 trillion MNT in revenue from tax income. Everyone knows about the current economic situation, and there is no positive sign from the overseas market.
In October, the department applied 1.6 trillion MNT in revenue to the budget, and the tax office will do so according to the law in the last two months of the year.
-There are a lot complaints from businesses and entrepreneurs about tax pressure due to the economic downturn. Are there tax burdens or fines due to the economic situation?
-There is no tax increase caused by the economic situation. We work here to collect tax payers' reported taxes. There is no means of collecting tax illegally or collecting more.
But tax payment delays or laziness for tax payment have been popular lately. Especially when corporations take out a large amount of loans and hesitate in paying their taxes, pretending it is in the name of their projects.
Besides, companies have a lot of debt. Most of the companies blame their delayed tax payments on debt payment deadlines. Tax payments among miners are bad.
-Some people may say that the General Department of Taxation cut 100 million MNT in taxes for Oyu Tolgoi LLC. What do you say about this?
-People in charge of the issue are working on it. So I do not have to give details on the issue.

Ambassador of Mongolia to Brazil, Ch.Sosormaa Presents Her Credentials
November 11 ( On November 10, 2014, Ambassador Extraordinary and Plenipotentiary of Mongolia to the Federative Republic of Brazil, Mrs. Chuluunbat SOSORMAA has presented a Letter of Credence to the President of Brazil, Her Excellency Dilma Rousseff.
The credential handing ceremony was held along with other 32 Ambassadors to represent their states and during the credential handing, newly accredited Ambassador Ch.Sosormaa conveyed greetings of the President of Mongolia and noted that in order to open gateway to Latin America, Mongolia opened its Embassy in Brasilia in June 2014. Also, Ambassador of Mongolia congratulated Her Excellency Dilma Rousseff on being elected as the Head of State for her second term.
In response, President D.Rousseff pledged to pay particular attention in stimulating Mongolia-Brazil bilateral relations and will be pleased to welcome top and high-level visits from Mongolia.
Mongolia and the Federative Republic of Brazil have established the diplomatic relations on June 19, 1987.

‘Remote Control' premieres in Dharamshala
November 11 ( Busan International Film Festival award winner “Remote Control”, a film by Mongolian director S.Byamba, was selected for the third edition of the Dharamshala International Film Festival in India, held from October 3 to November 2nd.
Over 40 films by directors from India, Mongolia, France, the United Arab Emirates, Spain, the USA, Canada, Switzerland, Finland, Lebanon, Germany, South Korea, China, Argentina, Poland, and Sweden were presented during the 3rd International Film Festival Dharamsala.
Mongolian director S.Byamba presented his film and was interviewed by those in attendance.
Ambassador Extraordinary and Plenipotentiary of Mongolia to India S.Bayaraa was also invited to the event as a special guest.
“Remote Control”, won a top prize at the Busan International Film Festival  and has been dubbed the "New Wave" in Central Asian Cinema, gaining international acclaim.

Mongolian 24 Sambists to Compete in 2014 World Sambo Championships
November 11 ( On November 21-23, 2014, the World SAMBO Championships are to take place at Nakadai Sports Park in Narita City of Japan, where about 600 athletes from 70 countries are to compete in the 2014 Championships.
Mongolian Team will compete with its 24 Sambists in all 3 categories, Senior Sport SAMBO men, women and Combat SAMBO men headed by President of Mongolian SAMBO Federation D.Gerel and President of Mongolian Judo Federation, MP Kh.Battulga.
To remind, the two Presidents have inked a Memorandum of Understanding to cooperate on November 07, 2014 and under the MoU, the Judo Federation will assist the SAMBO Federation in terms of the consolidation of partnership, joint trainings, preparation of coaches and trainers as well as joint participation in the regional and international competitions.
Mongolian SAMBO Team in the 2014 World SAMBO Championships
Senior Sport SAMBO Men:
52 kg - Sh.Erdenebaatar
57 kg - S.Batgal
62 kg - Ch.Boldbaatar
68 kg - D.Tumurkhuleg
74 kg - S.Miyaragchaa
82 kg - G.Tuvshinjargal
90 kg - L.Otgonbaatar
-100 kg - B.Ariun-Erdene
+100 kg - P.Batmunkh
Senior Sport SAMBO Women:
48 kg - M.Urantsetseg
52 kg - S.Solongogerel
56 kg - D.Sumiya
64 kg - T.Battugs
68 kg - B.Sainbuyan
72 kg - Ts.Naranjargal
-80 kg - M.Uuganjargal
+80 kg - G.Enkhriimaa
Combat SAMBO Men:
52 kg - B.Munkhbat
57 kg - S.Orkhonbaatar
62 kg - B.Damlanpurev
68 kg - T.Otgonzaya
74 kg - Kh.Amartuvshin
82 kg - Ts.Narantogtokh
90 kg - B.Tsogtbayar

Mongolia’s Proposal on Improving Bird Species Conservation Approved
By B. Amarsaikhan
Ulaanbaatar, November 11 (MONTSAME) The suggestion on conservation of bird species named “Great Bustard” has been approved at the eleventh meeting of the Conference of the parties to the Convention on the Conservation of Migratory Species of Wild Animals (CMS). 
 The meeting ran on November 3-9 in Quito of Ecuador. Mongolia was represented by a head of Department for Foreign Cooperation of the Ministry of Environment and Green Development D.Batbold.
The proposal was approved along with other 31 from several countries on improving conservations of sharks, birds and gazelles. “Great Bustard” was moved to the Appendix I of the CMS from its Appendix II. “Great bustard” has been reported a population of 2,000 left in Russia, Mongolia and China, and some 300 in Central Asia.
The reproduction of the species are very slow in process as it takes approximately ten years for a female bird to be able to give offspring. The Secretariat of the Convention agreed, for the first round of activities, to collect funding for organizing an international conference on conservation of “Great bustard”.
The meeting also included Mongolia in the Standing Committee on implementing the convention and appointed Mongolia the deputy chairman of the Committee for a three-year term. The Deputy Chairman is obligated to participate in annual meetings, to take part in settlement of the issues occurred outside of the meetings, and to chair meetings of the Committee in the absence of a chairman. Mongolia will also serve as the Asian representative to the Financial Committee of the Convention.
The migratory species of wild animals have higher risks to lose their migrating territories due to hunting and to have food deficits during their ecological migrating periods. Thus the Convention on Conservation of Migratory Species of Wild Animals was enacted in 1979.
Mongolia joined the Convention in 1999, the parties to which must observe duties to protect the avian and aquatic animals and vertebrates that migrate through their territories. The Convention on CMS is ratified by 120 countries so far.

MP Gives Details about Oyu Tolgoi
By B. Amarsaikhan
Ulaanbaatar, November 11 (MONTSAME) A member of parliament Ms G.Uyanga presented on November 11 results of recent studies on Oyu Tolgoi LLC staff salaries and conclusions of the inspection of Oyu Tolgoi project’s investment expenditure.
The inspection was made by a working group that was set up at order of Deputy PM and Ministers of Mining and of Finance last year, she noted and reminded the media that she asked the cabinet this October 13 to sound an outcome of its discussion of reports by the above working group, to explain why the expenditure report has been include in a list of secret matters, and why 2,724 million USD, reflected in the Shareholders’ Agreement, has increased to 5.1 billion. “The inquiry should have been responded within two weeks, but I have not received any answers, the Minister Ch.Saikhanbileg has postponed the response until this November 18,” she said.
A study by Project Management Institute on wages of over 30 thousand project managers from 29 countries show that an average annual salary of Oyu Tolgoi project managers amounted to USD 92 thousand in 2011, which is 2.8 times higher than that of other managers. Moreover, salaries of Mongolian and of foreign personnel, hired for underground mine works by Red Path LLC, varies within a big margin, for instance, the Mongolian welder receives some 71 thous.Togrog per day, while his foreign counterpart--1.8 million, which shows ratio of 25:1, she said. Another violation was inspected that a “Fluor”-named company, which has nothing to do with the OT project, receives big money transfer from the project, “I will give details about it later”.
Since the commencement of OT project, some USD 214.4 million (MNT 400 billion and 928 million) went for business trips of Rio Tinto and Ivanhoe Mines groups, apartment rents of foreign personnel of the project, their health services, their gifts to others and donations, she informed.
“Petrovis LLC has been supplying expensive fuel to OT project in a monopolist manner since 2007, and receives 20-50 million Togrog every month for so-called salaries of personnel and their insurances,” she went on.  
Thirty four percent of all of the above costs are paid by the Mongolian taxpayers with high interests, she stressed. Petrovis LLC should be investigated by Corruption Combating Agency and other related monitoring organizations, she underlined.

Mongolia and Germany Sign Memorandum of Cooperation
By N. Khaliun
Ulaanbaatar, November 11 (MONTSAME) The Ministry of Population Development and Social Welfare of Mongolia signed the memorandum of cooperation with the Ministry for Labour and Social Affairs of Germany on November 7.
The document was inked by B.Otgonjargal, the State Secretary of the Ministry, and by the member of Bundestag and State Secretary for the Federal Minister of Labour and Social Affairs A.Kramme. Accordingly, the two sides will cooperate in studies for innovation of the pension insurance system, establishing pension reserve funds, provision of social care services for the disabled, preparing educated personnel to serve the disabled.

Last Week's Bestsellers
By B. Amarsaikhan
Ulaanbaatar, November 11 (MONTSAME) An "Internom" book store introduces a list of best sold book of November 3-9. The list was topped again by Oxford English-Mongolia and Mongolia-English pocket dictionary.
It was followed by “The Law” by Frederic Bastiat, translated to Mongolian in 2007. A third bestseller became “Sorkhugtani” novel by b.Sarantuya.
Newly added bestsellers were “Mongolian Folk Tales”, “Developing Right Brains of Six-year-olds” and “Mongolians: XVII century until the beginning of XX”. They were followed by "The Girl Who Kicked Hornet’s Nest" and “The Girl with the Dragon Tattoo” by Stieg Larsson, “Lean In: Women, Work and Will to Lead” by Sheryl Sandberg and “Green-Eyed Monk” by Ts.Oyungerel and J.Falt.

Stock Exchange News for November 11
By B. Amarsaikhan
Ulaanbaatar, November 11 (MONTSAME) At the Stock Exchange trades on Tuesday, a total of 36,882 shares of 11 JSCs were traded costing MNT 237 million 793 thousand and 700.00.
"Khongon Beton” /23,306 units/, “Khokh Gan” /9,000 units/, “Hermes Center” /2,000 units/, “APU” /100 units/ and "Remicon” /50 units/ were the most actively traded in terms of trading volume, in terms of trading value were "Khongon Beton” (MNT four million 661 thousand and 200), "Khokh Gan” (MNT 945 thousand), “Ulaanbaatar Khivs” (MNT 496 thousand), “APU” (MNT 375 thousand) and "Hermes Center” (MNT two thousand).
The total market capitalization was set at MNT one trillion 535 billion 547 million 793 thousand and 411. The Index of Top-20 JSCs was 15,366.12, increasing 20.11 units or 0.13% against the previous day.

Associations of Judo and Sambo Sign Memorandum of Cooperation
By B. Amarsaikhan
Ulaanbaatar, November 11 (MONTSAME) The Mongolian Associations of Judo and Sambo have signed a memorandum of cooperation. The document has been inked by Kh.Battulga MP, a president of Judo Association, and by D.Gerel, a head of the sambo association.
The parties intend to support each other, to pay attention to athletes and coaches development, to involve more their athletes in international and continental competitions, to seek ways of organizing sambo special trainings, and to work on including sambo in the Olympic programme.

Oyu Tolgoi - 2014 Third Quarter Results
November 11 (Oyu Tolgoi) Ulaanbaatar, Mongolia - Oyu Tolgoi LLC, through its parent company Turquoise Hill Resources, announced today financial results for the third quarter, ending 30 September, 2014.
Oyu Tolgoi LLC Chief Financial Officer Steve Duggan said, “The third quarter’s results show once again the steady progress we are making in safely optimizing production and ramping up sales from the open-pit mine.”.
Highlights include:
Ø  An All Injury Frequency Rate of 0.50 per 200,000 hours worked and no fatalities for the nine months ended 30 September, 2014.
Ø  Net revenue of US$466.1 million on sales of approximately 220,300 tonnes of copper-gold concentrate. By metals in concentrates: approximately 53,600 tonnes of copper for US$302.6 million, approximately 144,000 ounces of gold for US$158.5 million and approximately 323,000 ounces of silver for US$5.0 million.
Ø  Recognised cost of sales of US$380.0 million.
Ø  Royalties of US$25.4 million to the Government of Mongolia on concentrate sales.
Ø  Concentrate sales increased approximately nine per cent over Q2’14 with sales exceeding production resulting in a planned inventory drawdown for the quarter.
Ø  Production of 134,100 tonnes of copper-gold concentrate, containing 36,600 tonnes of copper.
Ø  As Oyu Tolgoi’s open pit deepens into the high-grade zone in Q4’14 and Q1’15, copper and gold head grades are expected to increase.
Ø  Oyu Tolgoi is expected to produce between 135,000 – 150,000 tonnes of copper and 550,000 – 600,000 ounces of gold in concentrates for 2014.

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