44.HAFTA BCM (BUSINESS COUNCIL OF MONGOLIA) HABERLERİ

Business
ERDENES TT, IN FACE OF PROTESTS, WILL NOT END AGREEMENT WITH CHINESE CONTRACTOR
Erdenes Tavan Tolgoi LLCsays it has retained many of the staff mining coal at the Tavan Tolgoi mines, despite claims by strike workers that they were all let go after a Chinese company was hired. The state-owned miner has transferred personnel employed by Australia's MacMahon Holdings Ltd. to mine the East Tsankhi mine to the operations now being led of China's TTJVCo, said the acting executive director in a 23 October press conference. TTJVCo was hired to replace MacMahon because of a contract dispute and money owed. “We will not draw back this decision,” said Erdenes TT Chief Executive Officer B. Batbileg.
Workers began a sit-down strike on 19 October after the Chinese company's appointment. The head of the labor union for Erdenes Tavan Tolgoi, S. Erdene, said they are striking because the miner had discontinued its practice of collective bargaining. Although workers were no longer on strike, Erdene said they would not be satisfied until their demands had been met.
Source:Montsame
ERDENET DENIES RUMORS OF ECONOMIC TROUBLE
Erdenet Mining Corp. has denied rumors reported by local media that poor market conditions have affected its operations. The mining unit shared by the Mongolian and Russian governments has implemented cost-efficiency measures, including a ramp up of production, to counter the falling copper price.
“The supposed information about the corporation having a deficit and its business's being on razor edge are fraught with negative impact on the corporation’s actions,” reads a statement from the company. It warned that it would follow-up with the sources spreading the “misleading” information.
Source:Montsame
RUSSIA TRANSFERS MONGOLIA JV SHARES TO ROSTEC
Russia has transferred its ownership of its mining joint ventures with Mongolia to state-owned Russian Technologies (Rostec). Parliament on 22 October ratified an intergovernmental protocol for the transfer of equity from Erdenet Mining Corp. and Mongolrostsvetment. The protocol requires that all stakeholders be state-owned entities.
Source:Montsame
STEADY PROGRESS AT OT'S UNDERGROUND
Oyu Tolgoi LLCis moving forward with preparation for the launch of construction of an underground mining complex, scheduled for the second quarter of 2016. Project financing for the expansion, dubbed phase two, is expected by the end of this quarter. Pre-start activities have commenced with a budget of USD100 million, including hiring, detailed engineering and early procurement for equipment and materials required.
Oyu Tolgoi on 4 November is hosting a Forum for Perspective Suppliers during the construction phase, and, last week, signed two major agreements with the National Power Transmission Grid for the transfer of 96 kilometers of power lines running between the mine and the Mongolia-China border. This power lines now connect Mongolia’s national power grid to both China and Russia, helping Mongolia’s energy security and supporting the nation’s transition from an energy importer to an energy exporter.
Read more about Oyu Tolgoi's current operations in thisscorecardpublished by the company, which includes details about its safety record, efficiency of resource consumption and communityoutreach.
Source:NAMBC
MONGOLIAN BRANDS PREPARE FOR SALES BONANZA IN JAPAN
Mongolian producers such as the Mongolian cashmere brand Gobi Corp. are prepping for what they expect to be a new competitive edge in Japan once import taxes on certain goods are lifted. Gobi has reopened its flagship store in the Arakawa District of Tokyo, Japan in anticipation of greater sales opportunities. Signed last February, the agreement removes import tax on certain goods traded between the countries, including up to two million cashmere garments. That will give Mongolian brands a pricing edge over other foreign competitors such as China. Mongolia exported about 13,000 cashmere garments from various brands in the first nine months of 2015 that were subject to a 10.1 percent import tax in Japan.
Mongolia's total exports to Japan during the same period reach a sum of USD14.3 million. About half of that was copper concentrate, which was sent as a pilot program to test the market fundamentals for the trade. Other goods include animal parts and vodka.
Source:Montsame
MIAT MONGOLIAN AIRLINES SELECTS ZELA AVIATION AS GSA
MIAT Mongolian Airlines has hired Europe's Zela Aviation as general sales agent for handling air passenger transportation services. “MIAT offers an extremely high standard of service as an IATA Operational Safety Audit certified airline and we look forward to a long and successful partnership,” said Andreas Christodoulides, chairman at Zela Aviation.
Cyprus-based Zela Aviation is an air charter broking company active in most areas of the air transport industry and works with many leading E.U. independent tour operators and a range of airlines.
Source:Cyprus Traveler
KINCORA, ORIGO MOVE CONVERTIBLE NOTE DEADLINE TO NEXT YEAR
Kincora Copper Ltd. has reached an agreement with Origo Partners to renegotiation a USD2.5 million convertible note due on 19 July to become payable on 21 October 2016, said the Mongolia-focused copper explorer in a 22 October statement. Under the terms of the new agreement Kincora, will issue Origo a new note, also for USD2.5 million, with interest at 8.7 percent a year. Kincora has also agreed to put USD500,000 in escrow, which can be called by Origo.
“Origo has been and remains a long term and supportive shareholder, being instrumental in the formation of Kincora, and is our largest shareholder with a ~25% equity interest,” said President and Chief Executive Officer Sam Spring. “The replacement note reiterates Origo’s backing of management and Kincora’s strategy, which includes continued work on our existing prospects, potentially expanding our footprint and pursuing more advanced opportunities that would not otherwise be available at other points of the commodity cycle”.
Source:Kincora Copper Ltd.
REAL ESTATE JOINT VENTURE MDP APPOINTS CEO
Mongolian Development Partnership (MDP), the joint venture founded by Mongolian real estate developers, has appointed Luvsanchultem Vanjildorj as the chief executive officer in charge of establishing Mongolia’s first real estate investment trust and expanding service export potential for the real estate developers. Vanjildorj has 15 years of finance and investment management experience in real estate, infrastructure and mining developments, and currently holds the title of director of finance and investment atZag Group, while he concurrently serves as executive director for Alchem Global Private Limited of Singapore and a board director of London-based Ferro Mongolia Resources. Touted as a “buy-and-sell side investment expert,” he has closed a number of private placement deals including for Zest Undur and the delisting of SBB.
MDP's board includes representatives of Zag Group, Tsast Group, Orchlong Construction, Gandirs and Green Recourses Construction, as well as CHMM and Buyanpel.
Source:Mongolian Development Partnership
EXPO TO IMPROVE CHINA-MONGOLIA COOPERATION, SAYS CHINESE PRESIDENT
The first China-Mongolia Expo was an important platform for improving economic cooperation and cultural exchange between China and Mongolia, President Xi Jinping said in a letter sent to the expo, which opened on 23 October. The expo would help promote China-Mongolia relations to a higher level, and improve cooperation among northeast Asian nations at large, the president said. China highly values the comprehensive strategic partnership between the two countries, and is ready to integrate China's "Belt and Road" initiative with Mongolia's Steppe Road plan based on mutual respect, benefit, and win-win cooperation, Xi said.
The biennial event is the biggest exchange program between the two countries in recent years. Delegates from China, Mongolia, Russia and Malaysia attended the expo in Hohhot, capital city of China's Inner Mongolia Autonomous Region.
Source:CIHAN
KHAN BANK FOUNDATION SPONSORS GOBI BEAR PROJECT
Khan Bank LLC's charity arm is sponsoring the creation of a new exhibition area to highlight the endangered Gobi bear, known to Mongolians as Mazaalai, and its living conditions. Khan Bank Foundation took on the cause after a branch in Bayankhongor Aimag initiated the program, in coordination with the Bayankhongor Environment and Tourism Department and the NGO Khongor Nutgiin Duudlaga. It also hosted a four-day adventure tour to travel around the 1,312 kilometers of territory Mazaalai occupies in the hope that it would raise awareness and funds for the bear's protection.
Mazaalai is described in the Mongolian and global Red Book as a very rare species that inhabits strictly protected areas of Mongolia such as Segs Tsagaan Bogd, Ekhiin Gol, the oasis of Atas and Inges and the Gobi desert. Only 22 were known to remain in 2014, compared with a head count of about 20 in 1960.
Source:Khan Bank LLC
MONGOLIAN FILM NOMINATED AT ASIAN WORLD FILM FESTIVAL
The 2012 Mongolian Bodlyn Khulgaich (tr: Idea Thief) was nominated for an award at the Asian World Film Festival (AWFF) held in Los Angeles, California on 28 and 29 October. The film was screened at the festival for members of the Oscar Academy, giving it opportunity to receive a nomination for “Best Foreign Film” for the 2015 awards.
Idea Thief is a political thriller written by B. Gansukh and directed by J. Sengedorj about a down-in-his-luck Mongolian, suffering after the transition from a planned economy, who sees what looked to be a miracle turn into a curse. Gansukh, nicknamed “90 million” for the money took, thought he had come into luck when in a chance encounter he convinced Mongolia's prime minister to fund his program to bring artifacts dug out from Mongolia back to the homeland. However, the temptation of a life of luxury got the best of him and he eventually found himself in prison after squandering the money.
Source:Montsame
EVEN MONGOLIA’S GOT TALENT NOW AS GENGHIS COWELL TAKES OVER THE WORLD
Music mogul Simon Cowell has conquered Mongolia as he builds a global empire Chinggis Khaan would be proud of. Mongolia’s Got Talent has achieved the country’s highest-ever TV ratings, with an “almost unheard of” 70 percent audience share. A third of the three million population tuned in for the launch of the show last month—with the numbers rocketing as the series has gone on.
Got Talent is now the most successful reality format ever, aired in 193 countries and watched by 500 million worldwide. A source said: “Simon is super proud of the Mongolian show and the fact Got Talent is now seen in more or less every corner of Earth.” Cowell, 56, who today announced he will be a judge on the next series of America’s Got Talent, rolled out the franchise in Afghanistan, Azerbaijan, Cambodia, Iceland, Mexico and Myanmar in 2014.
Source:Mirror
NEW DOCUMENTARY ON MONGOLIAN SHAMANISM TO SCREEN AT GWU
A free screening of a new Sas Carey documentary about Northern Mongolia’s shamans entitled ‘Ceremony’ will be held at the George Washington University (GWU) in Washington D.C. on 9 November. The event includes both the film and live commentary by director Sas Carey, who spent 11 years making this documentary.
Clickherefor more information.
Economy
MONGOL BANK: FX AUCTIONS, CURRENCY SWAPS, 1-WEEK BILLS, T-BILLS
The Bank of Mongolia on 29 October failed to report currency auction results after receiving bids of USD 5 million and CNY9.1 million. “The BoM accepted any offers,” reads a statement from the central bank. Also that day, it reported accepting dollar swaps with commercial banks for an equivalent of USD25 million, tugrug swaps worth USD14.3 million and yuan swaps worth CNY30 million.
The Bank of Mongolia on 28 October issued 1-week bills worth MNT211 billion at a weighted interest rate of 13 percent. Also that day, the central bank received MNT18.5 billion in bids for 12-week treasury bills with a face value of MNT10 billion that were sold at a discounted price and with a weighted average yield of 13.871 percent.
Source:Bank of Mongolia
MOODY'S ASSIGNS B2 ISSUER RATING TO DEVELOPMENT BANK
Moody's Investors Service on 27 October assigned a B2 issuer rating to Development Bank of Mongolia LLC (DBM).Moody's has also assigned a caa1 baseline credit assessment (BCA) and adjusted BCA to the bank, as well as a B2)/NP) long- and short-term Counterparty Risk Assessment (CR Assessment). In addition, Moody's affirms the B2 ratings on DBM's outstanding foreign currency debt and the B2 ratings on DBM's medium-term note tugrug program. The debt and the tugrug program are guaranteed by the government of Mongolia (B2 negative).
"The B2 issuer rating assigned to DBM incorporates a two-notch uplift from the bank's BCA of caa1, due to our assessment of full government support to DBM in times of need," says Hyun Hee Park, a Moody's Assistant Vice President and Analyst. "Such support mitigates the bank's weak stand-alone credit strength."
Read the full statementhere.
Source:Moody's Investors Service
BCM BUSINESS GROWTH INDEX Q3-2015
Businesses in Mongolia are not very hopeful for improvement in the business environment, according to theBusiness Council of Mongolia's (BCM's) Business Growth Index Q3-2015. The BCM Business Growth Index, a regular barometer of business climate in Mongolia which tracks movements in business confidence quarterly, indicated a -6C temperature on a scale ranging between +50C to -50C, where +50C is the best temperature.
The 2015 third-quarter release is the second of the Business Growth Index. The data was analyzed with consultation from Sumati Luvsandendev, founder and director of the Sant Maral Foundation.
Read the full analysis in Englishhere, or in Mongolianhere.
Source:BCM
MONGOL BANK'S GOLD BUYING UP 27%
The Bank of Mongolia increased its purchase of gold by 27 percent in the first nine months of 2015 compared with the same period last year, as it seeks to increase its gold reserves. The bank reported USD1.73 billion in gold reserves for the year to the end of September. The buying follows a 2014 amendment to Mongolia's tax code that reduced the tax on gold sold to the central bank from as much as 10 percent to a flat 2.5 percent. The tax reduction is only available to producers who sell to the central bank.
The Bank of Mongolia exported 13 tons of gold last year.
Source:Undesnii Shuudan
BANK LOAN PORTFOLIOS AT RISK AS MINING DEBT DETERIORATES IN QUALITY
Loans to miners have become a growing risk to commercial bank's lending portfolios as the fall out in prices wreaks havoc on the industry that drives the national economy. From the total volume of lending to the mining industry, 13.4 percent was rated poor, while 19.6 percent had gone delinquent.
The volume of non-performing shot up 70 percent in the first nine months of 2015, according to figures from the Bank of Mongolia. The number of bad loans is even larger when adding in bad debt carried over from the banks that failed between 2009 and 2013, Anod, Zoos and Khadgalamj (Savings), which make up more than a quarter totalling MNT834.5 billion. Excluding the failed banks loans, the total of bad loans stood at MNT596.6 billion.