Mongolia Business and Mongolian Daily Business News

Economic Standing Committee of the parliament discussed yesterday the draft law on modifications to the Minerals Law of Mongolia, initiated by E.Bat-Uul, M.Zorigt and R.Erdeneburen and which is called as Short distance and pre-election political show by MPRP.
Since it is the only Standing Committee in which DP members are majority, it supported the draft law of its members. They included 3 clauses in the draft law that said, an investment agreement must be concluded on the basis of production sharing contract in case of jointly using the strategic minerals deposits with foreign and domestic investors; a guarantee on environment-friendly technology should be taken and a special license should be withdrawn in case of corruption committed by the investor. Members concerned about whether a concept on ownership of the state over 51 percent and foreign investor over less than 49 percent of the strategic deposit gets lost because of production sharing contract. Read the rest of this entry »

It is previously reported that S.Shaariibuu, father of a woman, killed at the Malaysian politician order, held a press conference in Malaysia. In his statement on behalf of Minister of Foreign Affairs, he noted that unless the case is decided fairly, bilateral relations of the two might be halted. We got details from MFA on it. It is said that statement of S.Shaariibuu, father of the killed, is not the official position of the Government of Mongolia but it is a personal opinion only. Also MFA pays close observation on the court trial, being held in Malaysia. In addition, PM and MFA sent official letters 4 times regarding this matter. Minister S.Oyun has just informed that she sent another letter to Malaysia hoping that the case would be solved fairly.

Yesterday, President N.Enkhbayar received Mohammed Saif Ali-Svaidi, who is envoy of UAE Emir, project director of Abu Dhabi Development Foundation. M.S.Ali-Svaidi handled the president letter of Abu Dhabi Development Foundation’s director Mansur Bin Zaied Ali Nahayan. During the meeting, mr.Ali Svaidi expressed UAE’s interest in Mongolian banking and financial sector. And in letter, Arabs wrote that they want to know more about Mongolian agriculture, real estate, and infrastructure.
President N.Enkhbayar invited UAE’s Emir in Mongolia through his envoy. President also welcomed UAE’s investment to Mongolia.

In recent days a fear that tugrug rate might fall down is among the public. Halting of lending by commercial banks contributed to this guesstimate. Last Friday, authorities of Ministry of Finance and the Mongolbank expressed their positions officially.
Ch.Ulaan, Minister of Finance highlighted that Mongolian economy and finance goes through a not so easy phase due to sudden internal and external factors. Because of instable commodity price in the market, state budget expenditure increased and exceeded the planned amount, which might create a lot of debt.
Also the Minister warned about a new demand for implementing wise economic policy, not declining purchasing power of consumers and government organizations should learn parsimony. Ch.Ulaan promised that the Government would never make a decision to let tugrug rate fall down. Read the rest of this entry »

Tendency of price fall in cashmere creates favorable opportunities for domestic producers this year. We got some details from Ch.Tumenbayar, Executive Director of Gobi Cashmere Ltd.

What do you think, what are the reasons of decline in cashmere price?
Chinese Government issued a decree on not to import raw cashmere to China. Also the Parliament of Mongolia is to discuss draft law on imposing tariff on export of raw, de-haired and washed cashmere during the spring session. It is included in the list of issues to be discussed by the parliament. Experts explain that a cycle of cashmere price fall begins in the world market on the other hand. Cashmere price in the world market falls down by particular phases. I think this phase comes in the year 2008.
Is there any tentative guess on cashmere price fluctuation?
Experts say the price of raw cashmere will be approx. MNT32-35 thousand depending on the above factors. Read the rest of this entry »

Bloomberg agency, which broadcast financial market information, is to broadcast stock trading information at the Mongolian Stock exchange worldwide. Last March, these two organizations concluded an agreement and Bloomberg delegates are visiting Mongolia to get acquainted with activities of the Stock Exchange. Stocks over 300 companies are traded at the Stock Exchange.
Since financial organizations of foreign countries are interested in economic state and stock information of Mongolia, delegates highlighted that it was essential to conclude the above agreement and broadcast trading information immediately. However, it is not clear so far when the information of stock trading is to be broadcast.

Parties have tentatively agreed on constructing an international airport in Khushig valley in Tuv aimag at the soft loan, provided by Japanese International Cooperation Bank. In order to use this asset, the Government of Mongolia should negotiate with the parliament on the Loan Agreement on A Project to Construct International Airport in Ulaanbaatar. Yesterday Budget Standing Committee Meeting discussed Loan agreement. However members did not hide their cautiousness on some issues. USD 270 million loan is to be taken for the construction of the new international airport. If the term is 40 years, interest rate per annum shall be 0.2 percent. Members appreciated 10-year interest payment-free condition. They support effective use of loan, though they worry about potential oppression under foreign loans. But representative of Ministry of Finance suggests “Such thing will not happen”. This loan, which is going to be provided by Japan, is the softest one in comparison to other loans that Mongolia had and going to have. Read the rest of this entry »

Yesterday, Prime Minister S.Bayar held a meeting with newly appointed ambassadors that A.Battur to Belgium, S.Khurelbaatar to North Korea, O.Ochirjav to Turkey, and discussed about foreign policy issues. Ambassadors will depart to their countries soon. During the meeting, prime minister stated that: “In recent years, government policy to diplomatic mission has been tending to build a more professional service. Before that, as we knew, political influence was too strong. Foreign affairs of our country is really important. Ambassadors’ role in this relations also must be serious. Then, if you have any new ideas, policy recommendations, contact me directly.” In the end, ambassadors expressed their strong commitment to improve Mongolia’s external relations.

A group of Democratic Party in the Parliament of Mongolia held a restricted meeting yesterday and discussed laws and regulations to be discussed this week. With reference to 68 percent windfall tax on gold, the Parliament is to discuss draft law on modifications to Bank law and Treasury law. The draft law says that gold should be traded through Mongolbank but no through commercial banks. DP Group members didn’t support it. In connection with the above draft law, Micro mining draft law has been discussed as well. The Government decision, coinciding with this draft law, conflicts with the draft. Since there is a Government resolution, even the related regulation is not ratified, local Governors already started to grant land for micro-mining purposes. Read the rest of this entry »

Another overseas mining company eyes Mongolian assets

SouthGobi Energy Resources, a Canadian-listed mining company that owns mines in Mongolia, plans to raise as much as US$800 million from a secondary share offering in Hong Kong later this year at the earliest.
UBS had been hired to arrange the share sale, sources said, adding that the lower end of the range of the deal could be US$500 million. A spokesman at Vancouver-based SouthGobi declined to comment.
More overseas mining companies with assets in Asia have been looking at raising funds in Hong Kong to access investors familiar with the region, particularly China, with its demand for natural resources to fuel economic growth. Read the rest of this entry »