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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