Mongolia Business and Mongolian Daily Business News

The Russian delegates of “Ulaanbaatar Railway” Joint Cooperative have arrived in Ulaanbaatar to attend the general committee meeting. The meeting will focus on possible increase of capital. Parties agreed upon increasing its capital up to $250 million, but no progress is made so far. Parties consider this meeting as important. 11 main issues will be discussed during the meeting such as production activities of 2010, financial situation of the Joint Cooperative.

The general committee consists of six members, three Mongolians and three Russians.

Last Friday, 571,098 shares of 19 companies were sold at MSE, totaling sales of ₮411,235,647. TOP 20 Index has gained 4,8%, reaching 8507,89 points. It has been gaining since the New Year.
APU share gained 15%, reached ₮1150. But Genco Tour Bureau slumped by 2.5%, ₮120. Most sold shares were Khukh Gan, Naco Fuel and Shivee Ovoo.

6 months after signing of Oyu Tolgoi IA, the Government has held a hearing on the investment agreement implementation. 12 compulsory tasks were planned, but issues such as feasibility study, independent auditing, tax proof, Board of Directors and article of association of company are under implementation process.

For example, international independent auditing, a German branch of PricewaterhouseCoopers, has been working on the Oyu Tolgoi project and it will be completed within March. General Authority of Taxation is in charge of expense of the investors, tax redemption issues and a working group with 5 members is conducting inspection at Oyu Tolgoi LLC. Read the rest of this entry »

Prime Minister S.Batbold informed that Mongolia will pursue policy to own Tavan Tolgoi deposit 100%. Faith of Tavan Tolgoi is set to be decided during the spring session of SGK.

After this notice, there was fear of who would be interested in Tavan Tolgoi deposit accepting an operator’s status. The government said that interested bidders will not own share or equity of the deposit, but they will pay the payment for mining. But Minister D.Zorigt is confident that interested parties would be interested in the project, because such deals are common in the mining world. Read the rest of this entry »

Proceeds to be used by Ivanhoe to acquire critical mining and milling equipment for the Oyu Tolgoi copper-gold complex in Mongolia

LONDON, ENGLAND — Robert Friedland, Executive Chairman of Ivanhoe Mines, and John Macken, President and Chief Executive Officer, announced today that the company has entered into an agreement to issue 15 million common shares to Rio Tinto at CDN$16.31 per share, for net proceeds of CDN$244.7 million (US$232.4 million*).

Ivanhoe Mines will use the proceeds to purchase from Rio Tinto key mining and milling equipment to be installed during the construction of the Oyu Tolgoi copper-gold mining complex in Mongolia.

The equipment includes principal components for the 100,000-tonne-per-day Oyu Tolgoi phase-one copper-gold concentrator, including two large, 38-foot-diameter, semi-autogenous grinding (SAG) mills, four ball mills, re-grind mills, crushers, motors, gearless drives, conveyors and flotation cells. Also included is the hoist and major components for the sinking of Shaft #2 — the 10-metre-diameter, main production shaft for the underground block-cave mine at the Hugo North Deposit. Read the rest of this entry »

Many people are interested in Oyu Tolgoi project effect in the market and economy. The Investment Agreement assures direct payment and cash injection from OT investors into the Mongolian economy and public also received ₮70K right before the Lunar New Year. This distribution was a long awaited one for the mass, but those who contribute tax and revenue to the state, are suffering its cost; inflation.

Business sector of the Mongolian community wanted to provide and supply services and products that can be produced in Mongolia. According to the shareholders’ agreement, if the proposed services or products, existing in or originated from Mongolia offered by the Mongolian companies fully meet the requirement, Oyu Tolgoi LLC will prioritize it. Also local companies of Umnugobi aimag will be considered first.

Read the rest of this entry »

A working group established by the Security and Foreign Policy Standing Committee of SGK has concluded its examination on Mardai group deposits. MP Z.Enkhbold, Chairman of the Committee, held press conference.

Q: Was illegal issuance of licenses revealed during the examination?

MP Z.Enkhbold: Uranium deposits located in the territory of Bayandun, Gurvanzagal and Dashbalbar soums of Dornodn aimag were explored between 1971-1974 and “Uranium exploitation Agreement in the Mongolian territory” was made between the Government of Mongolia and Soviet Union in December 23 1981. It mined 510.6 thousand tons of ore between 1988 – 1995.

But MRA issued mining and exploration licenses to “Emeelt Mines”, “Western Prospector Mongolia”, “Adamas Mining” companies in the previously mined areas, breaching provision 2.3 of article 17 and provision 1.4 of article 19 of the Mineral Law of Mongolia. It is illegal to issue exploration license in the previously mined areas. After Agreement of Concession was annulled in late 1989 and early 1990, all uranium properties returned to Mongolia. I would like to quote two examples to give you how big scale of work were underwent in the above – mentioned areas; over 40 kilometers of railway to transport small carriers was laid and three horizontal shafts were built. After the Agreement with Russia was annulled, all reports, findings, locations of ore, electrical supply lines and over 130 kilometers long railway was transferred to the Mongolian side free. Over 14 licenses were issued to 4 companies in the previously mined areas. It is much similar to issue an exploration license in the mining area of Erdenet copper and molybdenum mine and then to raise fund at the Canadian Stock Exchange. Read the rest of this entry »

photo courtesy of gogo.mn

Q: Feasibility study of OT deposit was rejected by the Mineral Wealth Council of Mongolia. What was the main reason of rejection?

Minister D.Zorigt: Professionals and experts made comments during the hearing and meeting of the Mineral Wealth Council of Mongolia. Also they put several questions from investors. Upon receipt of the response the approval will be discussed. Working group met with investors regarding the above-mentioned questions on February 5 2010. Investors’ side promised to give detailed explanation on the questions .

Q: It said that total capital investment size increased in the feasibility study by $1 billion. What is your opinion?

Minister D.Zorigt: Initial investment size hasn’t increased. It’s all investment is made according to the investment agreement.

Q: Upon signature of the agreement, the Government will receive $250 million as pre-paid loan. When the second funding will be made? Read the rest of this entry »

Mongolian dream

THE eyebrow-raiser on Friday was the debut of Hunnu Coal (HUN), whose 20c shares shot to 41c on debut, then settled to close at 33.5c. Who would have thought that coal exploration in Mongolia could have got investor pulses racing so quickly?

This has concentrated minds at the so far unlisted Xanadu Mines, which has some advanced coal projects in Mongolia. The Sydney company had been planning to float in Hong Kong, but that exchange has yet to bed down its new resource company rules, so it looks as if Xanadu might strike on the ASX while the iron’s hot.

Friday also saw the settlement by Windy Knob Resources (WKR) on its Ovoot coal project in Mongolia. Sadly for those who had become attached to probably the most colourful company name on the ASX, WKR will trade as Aspire Mining (AKM) from tomorrow. Read the rest of this entry »

Mr. G.Zandashatar, Minister for Foreign Affairs and Trade received Mr. Kobayashi, Board Director of Itochu Corporation. Mr. Kobayashi has vast experience in the relationship between Mongolia and Japan, leading Economy Committee of Mongolia – Japan, and Itochu has been active in Mongolia over 20 years. Read the rest of this entry »