Friday, August 29, 2014

Mongolia Brief August 28, 2014 Part III

Cabinet meeting in brief

By B. Khuder
Ulaanbaatar, August 28 (MONTSAME) A programme will be implemented to have governmental staffers study experiences in the International Monetary Fund (IMF) and the World Bank (WB) with aims to augment Mongolia's representation in international banking and financial organizations and to strengthen the skills of staffers.

It was decided as such at the cabinet regular meeting on Thursday. The cabinet also backed an issue of appointing a consultant to represent Mongolia’s government in the Board of Directors of the IFM and WB. The government believes that this will help Mongolia fortify its participation in these organizations by reflecting its position in decisions of the Board of Directors, intensifying cooperation with them and implementing its interests.
- The 20th governmental resolution was annulled in conjunction with altering an order of border checkpoint inspections in accordance with the law on border checkpoint.
- The Minister of Finance Ch.Ulaan spoke about a process and outcome of the procurement actions of 2014 by budget general managers in the first half of this year. Obligations were given to all the managers to take measures for intensifying the procurement.
- The cabinet annulled special licenses of three beverage plants.
- Mr S.Baatarjav was appointed the head of the General Police Department.

Stock Exchange news for August 28

By B. Khuder
Ulaanbaatar, August 28 (MONTSAME) At the Stock Exchange trades on Thursday, a total of 8,310 shares of 14 JSCs were traded costing six million 257 thousand and 771.00 togrog.
"E-trans logistics” /5,249 units/, “Hermes center” /1,000 units/, “Avto impex” /560/, “Tavantolgoi” /450/ and "State Department Store” /447 units/ were the most actively traded in terms of trading volume, in terms of trading value were "Tavantolgoi” (MNT two million 292 thousand and 530), "Avto impex” (MNT two million and 072 thousand), "Baganuur” (MNT 554 thousand and 900), "E-trans logistics” (MNT 519 thousand and 651) and "Mongolia Telecom” (MNT 290 thousand and 020).
The total market capitalization was set at MNT one trillion 616 billion 389 million 821 thousand and 818. The Index of Top-20 JSCs was 15,778.17, increasing 10.87 units or 0.07% against the previous day.

Construction of National Library new building begins

By B. Amarsaikhan
Ulaanbaatar, August 28 (MONTSAME) A ceremony took place Thursday to lay the foundation stone of a new national library.
Pursuant to a decree of the President, a land of 0.3 hectares given to the new building of National Library in 2008 in the Sukhbaatar district, and the construction works started six years after.
The director of the National Library A.Nansalmaa said that money of MNT 12 billion has been budgeted from the government to build the library, and this amount money will cover the all construction expenses if the construction works are completed in two years. A design of the library building was developed by the “Egel” LLC, and the construction works will be performed by the AKMI holding company.
The new 11 story building of the National Library will have the latest science and technological achievements in terms of service, database and will offer comfortable conditions for the readers. In the 1-3rd stories, it will have multi-selection reading rooms, and cabinets for the disabled.
The National Library is a state protected object to keep the treasuries such as written heritage of Mongolia and Central Asian culture, scientific studies manuscripts, typolithographic sources, and precious books and chronicles created in gold and silver and other precious stones.
The old building of the National Library was built in 1951 with 500 thousand books. Now the number of book increased to some three million books, nine funds and five reading sections.
The construction of new National Library is expected to be completed by 2016.

E-sport players to compete in Asian Championship

By B. Khuder
Ulaanbaatar, August 28 (MONTSAME) A Mongolian team named “The MongolZ” will take part in the first Asian Championship for E-sports, which will take place on September 12 in Cebu, the Philippines.
The competition will run in two kinds of games “Cosplay” and “Dota2”. Apart from Mongolia, the championship will be attended by teams of South Korea, India, Indonesia, the Philippines, Sri Lanka, Vietnam and Malaysia.
Headed by A.Ariunbolor, the Mongolian team has comprised B.Enkhbayar, N.Enkh-Od, T.Tulga and U.Tormandakh.

G.Boldbaatar conquers World Judo Championship

August 28 (UB Post) Paris Grand Slam winner G.Boldbaatar made history for Mongolia as he won Mongolia’s first men’s 60kg world championship title, against European champion Beslan Mudranov of Russia.
The World Judo Championships is taking place in Chelyabinsk, Russia, from August 25 to 31, in the Traktor Ice Arena.
Having a bye in the first round, G.Boldbaatar defeated opponents from Turkey, Taiwan and Kazakhstan. In the semi-final, G.Boldbaatar beat Georgian judoka Amiran Papinashvili, with shido penalties.
In the finals, G.Boldbaatar defeated a two-time European champion Beslan Mudranov, with shido penalties.
A total of 751 judokas from 120 countries are fighting in the championships.
On the first day of the championships on August 25, men’s -60 kg and women’s -48 kg contests were held.
Silver medalist of the 2013 World Judo Championships and International Sports Master D.Amartuvshin and International Sports Master G.Boldbaatar fought in the men’s event. Mongolian State Honored Athlete M.Urantsetseg and International Sports Master G.Otgontsetseg fought in the women’s event.
The following is a brief interview of World Champion G.Boldbaatar with
Congratulations on your victory. How do you feel?
I am extremely happy because I won. I have to express my gratitude for my family, relatives, parents, the Mongolian Judo Association, Khangarid sports committee and Erdenet Mining Corporation.
How long have you been training for today’s victory?
I started my judo training at Khangarid sports committee in 2001. After 13 years, I became a world champion.
What was going through your mind before the final round? What advice did your trainers give you?
My instructors said that I might lose through shido penalties so be careful. I only thought about what my coaches told me. So I defeated my opponents with shido penalties.
Olympic Champion N.Tuvshinbayar gave you advice and helped you before the final round.
Yes. He did. He said, “You are stronger than them. Use your hidden skills, you can defeat them.”
You fought with top world ranking judokas Naohisa Takato of Japan and Beslan Mudranov of Russia at the semi-final. Did you expect to face off against world’s top judokas?
I expected the Japanese judoka.
Have you fought against Beslan Mudronav before?
Yes. I fought against him at Qingdao Grand Prix in 2009 and won. We haven’t fought again since 2009.
You were taking a nap in the training hall after you qualified for the semi-final. You were very calm in every fight. Were you mentally well prepared?
My expectation was low. That’s why I fell asleep without a problem.
Your brother and childhood friends came to root for you. You did not fail their expectations. The Mongolian audience were more supportive than a hall full of Russian audiences.
Of course. All Mongolians shouted “Boldbaatar” and “Mongolia”. It was nice to see our state flag. Mongolians were so strong.

B.Munguntuul seizes silver at 13th World University Chess Championship

August 28 (UB Post) The 13th World University Chess Championship took place in Katowice, Poland from August 17 to 24.
The Mongolian team included member of Aldar sports committee and Grandmaster Ts.Batchuluun, International Master G.Munkhgal, Sports Master B.Galmandakh, Grandmaster B.Mungultuul, and Grandmaster A.Enkhtuul.
Grandmaster B.Mungultuulwon a silver medal, with six points, in the World Chess Championship.
Polish chess master Klaudia Kulon won the women’s competition, followed by B.Munguntuul and Chinese player Ding Yixin.
B.Munguntuul previously won a gold medal in 2010, a bronze medal in 2008 from the World Student Championships.
Grandmaster A.Enkhtuul placed 22th in the women’s category, with 3.5 points.
In the men’s competition, Grandmaster Ts.Batchuluun placed fifth, with six points, International Master G.Munkhgal stood at 18th, with five points, and Sports Master B.Galmandakh took 30th place with four points.

Mongolians to invest in Hollywood

August 28 (UB Post) A Mongolian production team of around ten members is collaborating with Hollywood producers for the film, “Precious”, and will be investing 1.5 million USD.
The members of the production team wished to remain anonymous.
Many famous Hollywood actors, including Gary Oldman, Harvey Keitel, and Christopher Walken are to star in the film, and auditions are currently being held. The audition for Mongolian actors and actresses haven’t started yet.
It can be said that Mongolian artists mostly get foreign investments. In that sense, Mongolian production lifespan is considerably short as it’s only screened in Mongolian cinemas. This time, Mongolians are investing in a Hollywood production, which will enable many more opportunities. Not only will the production go into world markets and return sufficient amount of profit to Mongolia, but also open Hollywood’s doors to Mongolian artists.
Film researchers and enthusiasts are making uproar on the rapid development of the South Korean film industry. Korea’s secret for a rapid development was that they attained global recognition by investing in Hollywood films and featuring their own actors and actresses in feature films. Their latest products were “Lucy” and “Walking Dead”.
“Precious” is giving Mongolia the chance to compete head-to-head against other Hollywood producers. By investing in foreign film industries, Mongolians are promoting Mongolia through Hollywood film productions.

‘The Wind of Steppe’

August 28 (UB Post) D.Batnasan opened his eighth solo exhibition, “The Wind of Steppe” on August 23, at Blue Moon Art Gallery. The exhibition features more than 50 nature studies, scenes from daily life and urban themes.
There are few watercolor painters noted in the history of fine arts. D.Batnasan recognizes the importance and uniqueness of watercolors and has been painting in watercolor for the last five years.
His watercolors feature compositions of color and smooth transitions, with unique, airy qualities difficult to capture in other mediums. He works quickly to create what he wants to express through his art and presents what he feels in a real environment, tapping into his inner soul.
The artist runs the Masters of Mongolian Watercolors NGO to promote the special characteristics of watercolor, and he is now organizing an intensive, three-day watercolor workshop. D.Batnasan is also known as a writer and host of the “Listen to Classics Project” (Songodguudiig Sonsukhui) on Eagle Television.
“The Wind of Steppe” is on view through September 1.
Visit Blue Moon Art Gallery’s Facebook page for more information.

There is no monitoring of long distance transportation

August 28 (UB Post) Do you believe that just ten years ago, 30 people would crowd into a van and drive for over one thousand kilometers? You probably would not believe it if you didn’t see it yourself.
Around ten years ago, vans were the only option for long distance transportation. Then, drivers charged whatever they wanted for transportation costs. The cost of long distance transportation from Ulaanbaatar to Khovd Province was 85,000 MNT. The cost of long distance transportation stabilized when new buses arrived in Mongolia in 2008. The use of vans began to decline.
Seniors like to go to the province of their birth by bus because buses aren’t overloaded with luggage and the cost is cheap. But people say they can’t see any difference between a bus and a van. Also, there is no monitoring on long distance transportation.
I left for Khovd Province at the end of July, when I took my annual leave. Some 50 passengers, including youth and elders, sat in the long distance bus with 36 passenger seats. Each passenger can bring 15 kg of luggage. If someone brings luggage over 15 kg, the driver charges 2,000 MNT per excess kg. The driver was quoting high costs for some luggage. The passenger bus couldn’t fit all the luggage in it, but the bus was loaded with luggage like a truck. The bus was loaded with passengers, filling its seats when the bus left the Dragon Center long distance transportation station. A worker at the station warned the driver, “Don’t take anymore passengers. Your bus is full now.” Unfortunately, the driver picked up five more passengers on the way to Khovd Province. The driver and passengers had made previous arrangements. It became quite difficult to get on and off the bus, because passengers put their luggage between seats and some 10 passengers sat on the luggage.
On board were American and French tourists travelling around Mongolia. At the start of the journey to Khovd Province, the driver’s manner was so nice. By the middle of the journey, his manner had changed. Some passenger asked to get off the bus and take a rest. But he said, “If you want to go with me, then shut up.”
Parents often requested to stop the bus because of their small children, but the driver got upset and said, “I can’t stop very often.” A woman who sat in front of me was scared of the driver and let her child urinate on the bus.
According to the tobacco law, no smoking is allowed on public transportation, but this law doesn’t seem to cover long distance transportation.
I stayed in Khovd Province for two days. I returned home on the same bus, once again crowded with a lot of people. The bus moved from the center of Khovd Province with passengers equal to seats, but the driver picked up more passengers from Mankhan, Zereg and Darvi soums. The police didn’t stop the overloaded bus, because the driver and police were already friends.
Forty-five companies currently operate 1,000 long distance buses in 68 directions.
Seventy to 80 percent of long distance buses are equipped with GPS. The Ulaanbaatar City Traffic Monitoring Center says they monitor the speed of transport and whether a bus is following its route or not. One official said that GPS even controls whether the number of passengers is in accordance with the number of provided seats.
It is impossible to monitor over 250 buses in service. GPS can transmit data but can’t we cannot use it for 100 percent of buses due to budget constraints. According to one survey, service on long distance transportation buses is terrible and cannot provide safety for passengers. Before, companies running long distance transportation services were required to obtain a special permit. Head of the Regulatory Agency for Auto Transportation Regulations A.Munkhbold noted that the National Center of Transportation, transport and road authorities in provinces, and transportation companies established a trilateral contract in 2012. This affects the quality and service of transportation, and it is why companies operating passenger transportation services require a special permit in every country.
That is why we are including these issues in the revised Law on Transportation. Long distance transportation drivers who drive over 400 km have to have a shift driver, have no less than five years experience driving specific classification vehicles, go through professional driver training, and pass authorization tests.
Drivers working in long distance transportation say they are professional, but the real situation is different. Drivers are bad mannered and all drivers are related.

UB’s Shortage of Kindergartens Violate Children’s Rights

August 28 (UB Post) A small war often rises up between UB parents at this time of year. When registration for kindergartens begins, quarrels, arguments and lines outside of popular kindergartens become an ordinary occurrence, but residents and the press don’t pay much attention to it.
The kindergartens in Ulaanbaatar started registering previous year enrollees two days ago and they will register new children from August 28 to 29.
Unuudur interviewed kindergartens 19, 33 and 39 in Chingeltei District to investigate the issue.
Children of the 3rd khoroo grow up at 19th kindergarten and over 150 children are enrolled from over 700 applicants. The manager of 19th kindergarten said, “I could not bring my first son to kindergarten last year. There was no advantage from working in the khoroo. But this year, my second son is able to attend the kindergarten because I stood in line for four nights and days. We don’t have enough kindergartens, since many khoroolols and apartments have been built.”
One father noted, “My son could not enroll because he was not old enough to go to kindergarten and he stayed at home for a year. He turned two years old on September 15, 2013. But this year, my son is about to enroll in a class for three-year-olds, unfortunately there was no room. Children cannot choose their date of birth. It is wrong to violate children’s rights for a year.”
Over 150 little city residents live in the 3rd khoroo, but only 30 children were able to enroll in kindergarten this year. Managers of the 19th kindergarten explain that age difference is an issue because of space limitations.
The revised Law on Education calls for the enrollment of children who are two, three and four years-old. If even a single day is left for a child to turn two years old, enrollment is not permitted. Due to this issue, arguments start between kindergarten managers and parents.
The 33rd kindergarten welcomed us differently. Over 288 children attended the kindergarten last year. Three, four and five year-old children cannot be registered because capacity has already been met this year. Luckily, 15 children in the junior group and 20 children in the senior group can be registered this year. It was not crowded and people were registering children without any argument at kindergarten 33.
“For the last two years, we did not receive any complaints and arguments about enrolling children from other khoroos. Parents once stood in line and took bribes. We gave specific information to households, promoted the law and made parents understand. We conducted a survey, and based on its results we have started working on a new system. We gave invitations to two children who will turn two years old this year. We are solving problems by sending invitations. This system is followed only by our kindergarten,” noted the manager of the 33rd kindergarten, D.Munkh-Amgalan.
The fifth kindergarten of Chingeltei District was demolished and is being built, and the second khoroo (where 285 children live) did not have a suitable facility. The 33rd kindergarten was charged with receiving these kindergarten’s children and now they are working in shifts.
Downtown residents are capable of enrolling their children in private kindergartens, unlike many ger district families. Kindergarten 33 has focused its enrollment on children whose families need assistance.
Over 75,600 children attend 178 state-run and 250 private kindergartens. Seventy-nine percent of these children are attending state-owned kindergartens.
Source: Unuudur

N.Algaa: Government is discussing transit railway when domestic railway issues aren’t resolved

August 28 (UB Post) Below is an interview with Executive Director of the Mongolia National Mining Association (MNMA) N.Algaa about the current Mongolian mining situations coal prices and other timely issues.
As of July 2014, mining product exports increased significantly but the price of coal, the primary export product of the mining sector, continues to drop. What’s the price of a ton of coal produced by Mongolian domestic companies?
Companies aren’t able to sell a ton of coal for 35 USD. The media reported that coal is being supplied at 35 USD, but in reality, it’s sold for lower prices.
A ton of coking coal is being sold for 100 USD at global markets. Is this correct?
In the Chinese market, a ton of coking coal is barely able to reach the price of 100 USD. Generally, Mongolians refer to Chinese coal prices as the world market price. Only two places, near the Pacific and Atlantic coasts, define coal prices in the global coal market.
Specifically, countries supplying coal to Europe are mostly located around the Atlantic coast, and Japan, Korea and China focuses on the Pacific coast.
Prices are defined at ports as the main supply is conducted at these two ports. Price negotiation at the ports is considered as the international and world market standard. Mongolia will draw upon the world standard price if our coal can access the Pacific coast.
Our southern neighbor, China, is purchasing coal with consideration of the transportation costs from Mongolia to the Pacific coast. China explains that they buy coal from mining sites and borders at market prices while taking transportation costs into account. Although it’s possible, it’s wrong to compare prices of Chinese companies purchasing coal from Mongolia with prices at the Pacific coast.
Above all, Mongolia needs to be capable of transporting coal to the Pacific coast. Mongolia-China and Mongolia-Russia border coal prices were established because Mongolia couldn’t resolve logistics issues for transporting coal through China. This is defined as border price internationally.
Mongolia is a land-locked country so it doesn’t have port prices and supplies products at border prices. After improving competitiveness of coal quality, coal should be shipped to seaports.
Aren’t Mongolian coal standard prices the same as international port prices? In the state budget, a ton of coal is valued at 120 USD, but coals aren’t supplied at adequate prices. Can you comment on this?
Yes, actually, a resolution was issued stating that coal prices will remain consistent with contract prices until December, meaning that Chinese companies will negotiate on the prices set from Mongolia.
Both sides of the negotiators have to establish price agreements, register it at the General Customs Office, and then taxes will be imposed based on the contract. Depending on where the coal is being supplied from, whether at the mining site or border points, contract prices will differ.
If coal is supplied near the border, the price will be the same as border prices, which is 10 USD more than that of mining site prices.
It’s impossible to compare prices to world market prices as companies are selling at different prices. Taxes will be paid depending on the distance and the purchaser.
Are you indicting that even if the transit railway through China is resolved, there’s no insurance that the market will recover?
It means that a part of the necessary environment will be consistent. Apart from the transit railway, domestic transportation is important. If Mongolia doesn’t construct a railway, we will never create a stable environment for supplying products.
Mongolia’s competitiveness will not enhance as long as railway gauge issues are unsettled. Mongolians keep on discussing transit railways when there isn’t even a railway that links the mines to the Chinese railway.
Some people are surprised that people are talking about transporting goods to China with railway despite undetermined domestic railway issues. It’s no wonder they’re surprised. Mongolia doesn’t have a railway from coal mines to border points. This is the most important issue to be debated domestically.
Currently, how many companies are mining and exporting coal and how many companies have ceased operations?
Local companies exporting coal are Tavan Tolgoi, Erdenes Tavan Tolgoi, SouthGobi Sand, Xinhua Mak, MAK, and Energy Resource companies. Khushuut mine was included in the strategic mines’ list and their operations, as well as investment were halted for six months. Their operation may revive in the coming fall.
Ulaan Ovoo mine, located in Selenge Province, is ready to export coal. Terry Energy LLC is also ready to export coal but is observing and waiting for favorable market conditions.
Several companies led by Khunnu Coal LLC stopped mining coal and are doing explorations for other minerals. [Mongolian companies] are waiting for policies to stabilize and coal prices to rise.
Marketing strategies must be very good at places where companies trade. Partnership agreements with China on every economic level should be established in the future or we can’t deny that China will set taxes for Mongolian value-added products. If that happens, Mongolia’s competitiveness will no longer exist.
Copper exportation is rapidly increasing this year. Will this have positive effects?
Indeed. Copper concentrate exports of Oyu Tolgoi accelerated. Erdenet company exported concentrates that exceeded volume, price and cost value. Iron ore and spar prices dropped and income centralization became insufficient.
In the last few years, the government has been discussing standard prices for mining products. How should this standard price issue be resolved?
The government has been talking about standard prices for the last five years. They’ve been holding meetings on standard prices on top of determining the specific amount of state revenue that will be collect per year. Other than state budget revenue, issues on how to make up the long-term taxation foundation and how to make the mining business stable in the future are connected to standard prices.
Taxation has two purposes. One is to obviously construct the state budget revenue and the other is to be used for expanding and developing businesses. This isn’t implemented in Mongolia and taxation is seen as only budget revenue.
After establishing a Minerals Exchange, mining products are to be exported under a unified policy. Will the concept of standard price disappear then?
A unified standard policy will never function as long as there’s a standard price. If the government sets standard prices for minerals, there will not be a need for a Minerals Exchange. Only after eliminating standard prices, the government can start talking about the issue to establish a Minerals Exchange. However, Mongolia cannot hope to compete with the London Metal Exchange.
I think it’s better to create the price stabilizing mechanism through an integrated price policy, which exporters always discuss, even though it doesn’t function like an actual exchange.
Domestic companies are facing some difficulties this year as coal prices fell despite the increase in the export volume. Will the coal market recover in the future?
It’s definite that Mongolia will cooperate with China in the mining and infrastructure sectors. China proposed a joint railway project. Many issues, including the transit transportation and changing trade tax to liberal, are being discussed. Transit railway through China is of utmost importance.
There are many issues that need to be resolved within the country to enhance coal competitiveness in the market.
Firstly, coal quality needs to be adequate. Secondly, operating costs must be inexpensive. Thirdly, an environment for constant and regular coal supply must be created. Simply, to have reliable purchasers. Only when these three conditions are ensured, Mongolian coal will be able to compete with other markets.
It’s said that Australia is Mongolia’s competitor. Actually, Mongolia’s strongest rival is China. A lot of coal companies were established in many Chinese regions such as Ordos and Inner Mongolia and started to supply their domestic needs. Multiple companies started to process and supply coal.
In other words, China started to pay a great deal of attention on developing its northern region. Some provinces of Inner Mongolia now have rights to determine taxes and fees for the coal sector.
This will have negative impact on Mongolian coal competitiveness. China’s approach is to mix good quality coals of Mongolia with their own coal to increase quality and expand businesses. This, itself, will force Mongolia to downgrade as a competitor.
In this time of economic difficulty, how do you see the future of the mining sector?
Companies working in the mining sector are working to keep the number of employees and overcome the economic crisis during this difficult time.
As for the state and the government, they seem to have become a hindrance, instead of help. Taxes are still very high. While other countries zeroed taxes for using mineral resources to increase mineral exports, Mongolia is doing the opposite and setting standard prices.
Link to interview

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