Speech of President Battulga at opening of Mongolia Economic Forum

President of Mongolia Khaltmaagiin Battulga addressed the General Session of Mongolia Economic Forum on Day 2. The President said:
“Good day to the distinguished guests and participants of the Forum!
Mongolia Economic Forum is continuing on its second day.
There are many things we need to dedicate serious considerations to. However difficult it is to listen and admit to, it is the high time we confronted the unpleasant truth.
Regardless of Mongolians’ imagination of and pedantry and debate over the growth of Mongolia and initiation of countless ornamented projects, geopolitics of great powers, their geo-economic tendency, power distribution and gravitations are the factors which bring actual effect to the Mongolian economy through forcing their interests on, halting and forwarding our projects.
Researcher Lucy Hornby wrote in the Financial Times, one of the leading finance and business newspapers, that Mongolian laws on mining and investment can be deemed the most liberal in the world. Aside from concluding that Mongolian mining and investment regimen as the most liberal on the globe, she added that Mongolian cabinets are keen to modify the mineral laws in favor of investors in order for major agreements to be secured.
Nevertheless, the amount of investment is not rising. Researchers strongly advise to seek the reasons from the instability of governance and geopolitical tendencies of the great powers of the world.
Boasting so-called most favorable legal grounds for investment, yet, Mongolia could not make the Top 80 countries that are “hospitable” to foreign investment, while our neighbor in the south was ranked at the 50th place and the Northern neighbor, at the 60th. Even Vietnam, which can be said to have started from the same start-line as Mongolia, was ranked at the 59th and Kazakhstan, at the 64th. This points to the fact that no matter how soft the conditions our laws offer to the investors, it means that major investments would still run away from us unless we make policies that keep up with the geopolitical interests of the great powers. As a comparison, it’s worth mentioning that China made direct investment of USD 42.8 billion and loaned USD 50 billion to Kazakhstan last year.

What I mean to say by breaking down all of the above is that the future of major projects of Mongolia is uncertain until we unite our interests with those of the neighboring great powers by becoming integrated with the regional economic alliances. We will go further only when we deciphered the mystery of hyper-dependency of Mongolian economy on external factors and sluggishness when it comes to exploiting full internal resources for the last 28 years.
Around the close of last year, after the US President Donald Trump had announced his new foreign policy, his Security Advisor Herbert McMaster said “Geopolitics are back, and back with a vengeance…”. It seems to be coming true as the days go by.
Balance of power in the modern world offers both pleasant and unpleasant for Mongolian conditions. The only reason behind the impressive 5.1 percent increase of GDP recorded in 2017 was the favorable condition provided by the sanctions imposed on North Korean coal exports, which allowed Mongolian coal export to rise on the occasion. I would like to underline that there has been no contribution whatsoever to the growth from the Government or the miners.
In all periods of history, Mongolian economy has been affected by the external factors more intensively than the internal factors, and it is projected to remain the same in the future. Our naïve imagination which brought hope in free-market economy, “the invisible hand” and privatization for the upheaval of our economy has failed to deliver in the face of reality. The invisible hand is impalpable for ensuring national security, and yet, geopolitics still remain effective.
As the international arena reforms at an incredible pace, new alliances and divisions are likely to arise. The recent events, in which, the DPRK Leader Kim Jong Un suddenly warmed his connections with the US and South Korea, Chinese authorities met twice with the North Korean leader within just a couple of months, and the US announced its exit from the Iran Nuclear Deal, Russia strengthened partnership with Syria and Iran and Europe announced the end of dependency on the US and began negotiations with Russia on the northern pipelines, as well as the US compromised on the trade deal with China, is expected to bring inevitable and irreversible geopolitical changes, followed by geo-economic convictions.
When the US President Trump announced the “National Security Strategy”, he introduced a new terminology called “Indo-Pacific” region, which is also a new category. According to Washington’s claims, the Indo-Pacific occupies a vast space stretching from western coasts of India to the America’s west coast. The new categorization is an expression of opposition to China’s rise to power. The US is not making bones about its interest in balancing out China’s growth in Asia, especially in Southeast Asia, and neutralizing Russia’s influence in the region. Meanwhile, China expresses its opposition to the US Policies through its Belt and Road Initiative, firm pursuit of globalization and close partnership with Europe and Russia.
The above-mentioned were not unpredictable at all, but the embodiment of assumptions, mainly issued by the WEF, about the eventual shift from mono-pillar to multi-pillar world order, stranglehold of globalization and inception of new alliances, contributed by the fall of western liberal democracy, shift of conflict of power to Eurasia and aspiration of the US to restore its scope of influence.
In such situation, discussions revolving around only Mongolian economic relations and policies can only be described as credulousness to be put softly. We can never ignore the fact that World Economic Forum, the specimen for today’s Forum in Mongolia, has been taking geopolitics and geoeconomics as its main agenda.
Economies of our two eternal neighbors are estimated to expend to a total worth of USD 30 trillion within the next three years, a study suggests. What will our involvement in the Belt and Road Initiative look like? 28 years of being thrown here and there by the current have brought us to a dead-end, in the absence of adequate policies that coordinate with the neighboring powers and harmonious actions with our “third neighbors” in order to balance influence.
It is not necessary to look for solutions from afar. Actualizing the National Security Concept approved by the Parliament in 2010 will open multiple opportunities.
National Security Concept states:  Good neighbor friendly relations and wide-ranging cooperation with the Russian Federation and the People’s Republic of China (PRC) shall be developed. More specifically, national interests and the history of bilateral relationships shall be taken into account while regional peace and stability, as well as a general balance of relations with neighbors shall be sought. Pursuant to the “third neighbor” strategy, bilateral and multilateral cooperation with highly developed democracies in political, economic, cultural and humanitarian affairs shall be undertaken.
Pragmatizing these two will solve many issues.
Therefore, Mongolia must immediately enter into a Free Trade Agreement with the Eurasian Customs Union, which includes five nations, namely, Armenia, Belarus, Kazakhstan, Kyrgyzstan and the Russian Federation. With the agreement, I view that a trade opportunity with customs duty exemption will open with these five countries. Also, it is necessary to advance and activate cooperation with the Shanghai Cooperation Organization (SCO) within this year.
Not only will this allow for a favorable environment in the relations with the eight members of the SCO, it will also help accomplish something we were unable to actualize for many years, which is to join regional networks. Needless to say the population and economic capability of the SCO member states.
Only when creating favorable environment for foreign trade with this pragmatic approach, will we be able to attract tangible investment into Mongolia. Investors may even be able to export to European Union, Eurasian Economic Union and the SCO member states under favorable conditions, as well as non-tariff trade to Japan.
I impart that it is the convenient time to invest in Mongolia’s processing industry. Furthermore, I must mention that the country is holding a policy to retract raw materials export. The investors must note that over 7.0 thousand products manufactured in Mongolia will enjoy exemption of tax and quantity limit of European Union by joining the Eurasian integration.
Although the Cabinet is taking an initiative to focus on domestic issues by reforming the tax system, they are not utilizing the opportunities at hand that could raise tax revenue. We also need to estimate other possibilities of elevating tax revenue.
Only 10 products account for 96 percent of Mongolia’s exports. We have conducted a research, confirming that only semi-processed products which include value-added tax could build up USD 30.0 billion economy and create savings enough to fund the next phase investment.
Implementation of the already approved trilateral infrastructure network and economic corridor initiatives will provide enough profit that could equal Oyu Tolgoi project. We are now ready to sign transit transport agreement with the Russian Federation. Only when we develop the transit that connects the PRC and the Russian Federation and extends towards Europe from Eurasia, we will be able to eradicate the economic downfall that follows commodity cycle. Mongolia is able to exploit our status as one of the 57 founders of the Asian Infrastructure Investment Bank. We have no choice but to make Mongolia’s involvement active and clear in the land-based infrastructure development – Belt and Road initiative. Our geoeconomic opportunity lies here only.
If we manage to increase the revenue from Mongolia’s core sectors that fostered the country for centuries – agriculture and animal husbandry – in both environmentally-friendly and sustainable manners, we will create numerous workplaces and make substantial profit.
However, we lack political commitment and courage more than we lack necessary finance and capability. Looking back at South Korea amid the brinks of warfare and Singapore stranded at sea, they did not have wealth, chance or skills at the start of their road to become the Asia’s leading economy. It was their aspiration, sincerity and bravery that earned them today’s status.
A medieval thinker Niccolo Machiavelli described the three factors of a successful state as:
  • Virtu – the courage and determination of the leaders
  • Necessita – the willingness of leaders to implement what they consider necessary
  • Fortuna – luck.
I believe that Machiavelli meant a resolute and valiant politician capable of administering what they deem necessary will be lucky enough to lead the nation towards success. This is the only thing Mongolia and its economy are lacking. The ruling Cabinet has only a year and a half left until the end of its term. We have to think twice about whether we have the time to decide and establish.
Mongolia Economic Forum has been carried out for eight consecutive years. People has to stop gathering here just to quibble and pretend to be smarter than others. I hope that they discuss more about actual projects, pressing issues and find effective solutions.
I would like to point out once again that pragmatic economy, instead of theories and wise judgements, requires political courage, commitment and decisiveness. Today, pedantry has taken over Mongolia, while decisiveness became a rarity.
I hope the participants of the forum realize that their voters will not support or bear the current situation if we do not lower our head and take actions for our people from this point on.
Taking this opportunity, I wish success in the organization of the Economic Forum.
May the future be bright. May the Eternal Sky watch over us.”


Speech made by Arnaud Soirat, a top Rio Tinto official at Mongolian Economic Forum

Here is text of the speech made by Arnaud Soirat, Chief executive, Copper and Diamonds at Mongolia Economic Forum, Ulanbaatar on May 22, 2018.

Arnaud Soirat, président de Rio Tinto Alcan, Métal primaire

Partnering for success

Mongolia is at a pivotal moment in its history. 

Thank you for the kind introduction. It’s great to be here in Mongolia again. And it’s an honour to be at the Mongolia Economic Forum. 

Nearly 10 years ago Rio Tinto came to this country with such a rich history, and incredible prospects, and chose to put its faith into the magical hills of the South Gobi, the home of our Oyu Tolgoi mine. 

Over this time and on my many trips to this country, I have been impressed by what our Mongolian employees and team have built over a short period of time and today I wanted to share some ideas on how we can continue to work together to make Mongolia proud of its mining industry. 

I want to specifically thank and acknowledge our host today, as well as the President, Prime Minister, Ministers, and Members of Parliament. 

I lead Rio Tinto’s Copper & Diamonds product group. We have operations across the globe including a range of open pit and underground mines in USA, Chile, Indonesia and OT supplying important metals and minerals that make modern life work. Our talented work force uses industry-leading mining processes and technology to make our operations safer, low cost efficient. We also operate two leading diamonds mines in Australia and Canada. 

I note this conference is about all of us, the public sector, the private sector civil society, coming together to accelerate the development of Mongolia. 

This is very important, as the only real way, in my experience, to get sustainable economic and social development in a country is to form strong partnerships between government, business and society. 

I have had the privilege of spending 25 years in the metals and mining industry, living and working across five continents and I have seen first-hand how the mining industry can develop and transform a country’s economy over time – I can see that Mongolia is already well on its development path and this has only happened because some government and business leaders made some brave choices along the way. 

Since 2010, OT spent $7.5 billion in country on suppliers, salaries, taxes and royalties. 

Together with TT and Erdenet this is a vital contribution to the economy. So, to be clear, I think the opportunity for Mongolia is significant and I believe the country is at a pivotal, important moment. 

Mongolia now has the chance, together with partners, to really encourage faster growth, investment and development, if we work together. It is up to us to seize this moment and show visionary leadership.The kind of leadership that Mongolia has displayed over many centuries. 

Rio Tinto: pioneering progress with partners 

Let me start with a few quick words about Rio Tinto for those who are not familiar with us. 

Our purpose is to supply the essential materials that drive human progress – and we’ve been doing this for 145 years. We supply the metals and minerals used in everyday life from Tesla cars to your favourite mobile phone, Rio Tinto’s technology and know-how make it one of the most efficient miners worldwide. The business is also pioneering in its commitment to sustainability and responsible mineral development. 

Let me give you an example of this commitment in action. A week or so ago, Rio Tinto announced a new partnership with Alcoa, the government of Canada and Apple to invest in technology called inert anode which will help to create the world’s first carbon-free aluminium. 

This is a step-change for the industry, something metals companies have been chasing for decades. We are proud together with Alcoa to partner with our customer, Apple, and the Canadian & Quebec governments. Real leaders. It is an exciting time for the mining industry – particularly as we continue to transform to meet the Business to People, or “B2P” era. 

This means we must get much better at explaining what we do, how we do it and the contribution we make to society – this is as true here in Mongolia, as it is wherever we operate around the world. 

As you may know, we are a publicly traded company – on the New York, London and Sydney stock exchanges – and with this comes specific requirements and global standards that need to be met and maintained. 

We take this responsibility seriously and are guided by our 4Ps strategy: Performance, Portfolio, Partners and People. 

More specifically, last year we invigorated our company values Safety, Teamwork, Respect, Integrity and Excellence and conducted leadership workshops with all leaders in Rio Tinto and Oyu Tolgoi to reinforce our commitment to doing the right thing. 

We are very committed to our efforts in transparency, safety and responsible mining. 

We are successfully transferring the best practices from our other business, particularly from Kennecott copper mine in US which has been operating over 115 years. 

In terms of state of the art operations, first and foremost for us is Oyu Tolgoi, our newest copper mine. It is one of the best performers in terms of safety across Rio Tinto’s global portfolio.

And we are also leading here in contract transparency with international bodies, such as the Extractives International Transparency Initiative, applauding our efforts to disclose our investment agreements publicly. 

In Rio Tinto’s global code of conduct, The Way We Work, we outline our approach and commitment to being a good corporate citizen. This is not just lip service we expect all of our employees around the world, to behave in accordance with our values wherever they are. We accept zero tolerance to breaches. 

So, for us the way we work is as important as what we do. We must form and grow long-term partnerships with governments, communities and civil society. As we are trying to do in Mongolia.

Oyu Tolgoi: one of the most exciting copper businesses in the world 

As I said a moment ago, we manage the Oyu Tolgoi, “OT” for short, operation in the South Gobi, on behalf of all shareholders – Turquoise Hill Resources, the Government of Mongolia and ourselves.

 We are proud to be associated with one of the most exciting copper and gold businesses in the world. A business that once fully operational, will provide high quality copper at a time the world needs it. 

Our strategic partnership with Mongolia was formalized in 2009 through the signing of the OT Investment Agreement. 

And it was reaffirmed in 2015 with the signing of the UDP. 

These agreements have allowed shareholders to invest heavily in Mongolia. The shareholders have invested more than US$7 billion in this country – and together with a consortium of 15 financial institutions a further US$5.5 billion could be committed. 

By the end of the underground development we could have invested US$12 billion. To put that into context, that’s more than Mongolia’s entire annual GDP. 

This investment is already having a huge impact across Mongolia: 

 OT is now one of Mongolia’s top corporate tax payers – paying approximately US$1.7 billion in the form of taxes and royalties, since 2010. 
 OT is the largest private sector employer in Mongolia – currently employing 14,000 people, 94 percent of whom are Mongolian. 75 per cent of whom are engineers, professionals and in leadership roles. 
 We committed about $1 billion investment in the country per year for underground development and more to come. We are pioneering a Made in Mongolia strategy – aiming to bring more value in the supply chain into Mongolia and Mongolian supplier community and bringing new technology and capacity to Mongolia. 

This impact may continue to expand if we work together to successfully deliver OT’s underground. It is critical that all project partners work towards this objective – as it is the only way shareholders will receive a return. 

Once underground mine starts producing, OT will be one of the world’s largest copper mines with a potential productive life lasting several generations. It represents many opportunities to bring sustainable development to Mongolia. 

In addition to our investment in OT we also opened an office in UB in January of this year. It houses our exploration team and the Mongolia Delivery Centre – about 80 data analysts and software engineers are providing reporting and analytic supports to our global operations. 

We will consider growing our business beyond OT and utilize the extraordinary talent here throughout our global businesses – this is truly a competitive advantage for Mongolia in attracting international investment and growing the country’s wealth. 

Mongolian copper will be the source of much of tomorrow’s innovation 

Let me zoom out for a moment – and share some thinking on the global commodities markets, specifically copper: 

The long term outlook for copper is positive. We anticipate further demand growth and a supply deficit that are combining to produce a positive pricing environment. 

The drivers on the demand side are new and exciting such as: large-scale infrastructure projects all over the world –plus new applications in renewable energy and the transition to electric vehicle transportation. 

All of these trends point to a positive picture for copper to 2020 and beyond. 

This bodes well for Oyu Tolgoi – which will supply copper for many of the world’s latest technologies. For example, OT will play a critical role in supplying materials for things like smart phones and electric vehicles. 

In many ways, Mongolian copper will be the source of much of tomorrow’s innovation. 

What do investors look for? 

Finally, because we are here today to talk about how to accelerate the growth of Mongolia and enhance its ability to attract further investment, I will offer three observations on how I have seen other countries flourish and how Mongolia can also build on its work in these areas. 

Number One: provide certainty for investors and safeguard their investments 

Protecting agreements and honouring contracts is critical – particularly in mining where time horizons are long and upfront investment is massive. 

This is what the OT IA, UDP and other agreements represent – just like in other countries, such as Chile, that have had fiscal stability agreements which set tax and royalty rates for 30 years with no changes to attract investment after the move to democracy and privatization of its industry. 

At OT, we rely on the sanctity of the key investment agreements which serve as the foundation of the shareholders potential US$12 billion investment in Mongolia.

These agreements provide a foundation for the development of Oyu Tolgoi and ensure the Government of Mongolia receives more than 50 per cent of economic benefits over the life of the project.

 In a globally competitive environment for mineral investment, complex and very capital-intensive mining projects need to clearly set out from the beginning their investment terms, the efficiency of regulatory bodies responsible for licensing and permitting, and the stability of agreed investment terms. 

Simply put: no major investor can invest without such agreements in place. When agreements and contracts are honored – it gives international investors’ confidence the same will be done for them. 

Number Two: Rule of law and a strong regulatory framework is essential 

Fair and consistent application of the law requires working with partners and investors so they have confidence in the system. 

The aim should be to foster dispute resolution mechanisms and forums that yield fair and fact-based results. 

The most successful countries continue to promote their commitment to democracy and the strength of their institutions. 

Number Three: Promote the country’s value proposition abroad 

Oyu Tolgoi is already a world-class mining operation. For example, Mongolia has a highly talented and motivated workforce. 

Our 94 per cent Mongolian workforce has made OT one of the safest mines not only in Rio Tinto, but also in the world. Our team has also made OT one the world’s most innovative operations – especially when it comes to the environment. 

In Gobi region, water is truly precious resource, and Oyu Tolgoi leads the industry in water recycling at 85 per cent. We are particularly proud that the project uses previously unknown underground saline aquifer and we help the community to increase their water reserves and provision of new local town water supply is under way. 

While we are currently the largest international investor in Mongolia– we want many more here with us. 

A diversified economy can only be good for Mongolia and all investors. And this will only happen if OT is a success. 

A model for success: the power of mining for sustainable development 

As I mentioned earlier, I have worked for a quarter century in the mining industry and I want to quickly illustrate a real world example of successful resource development. 

Part of my job is to manage Rio Tinto’s interests in the copper mine joint venture, Escondida, in Chile – the largest copper operation in the world.

Chile is a relevant benchmark for Mongolia, in many respects. 

Fifty years ago, Chile, today’s largest copper producer, had a small population with a small and isolated economy. It has since been the fastest growing economy of Latin America. Back then, Chile’s mining sector was driven by one large copper company, Codelco. 

Codelco still owns and operates mines, but the country’s position as pre-eminent producer is largely due to important free market reforms and the rights that were afforded to private companies. 

In fact, copper has underpinned Chile’s economic growth mostly since private investment was unleashed in the 1980s. 

New companies flooded in, looking to tap into the country’s massive copper potential and exploration peaked in the mid-1990s. 

Copper production exploded making Chile one of the largest global copper producers and this remains the case today. Copper production has increased ten-fold since the 1990s. And yet, Chile’s most important economic story has been about diversification. Even with the massive growth, Chile’s copper dropped from 80 per cent to about 50 per cent of exports in the same period. 

Lessons point to an improvement in government capabilities and purposeful broad-based growth policies with sector specific targeting and state support. 

The same success can happen right here. 

Mongolia has all the ingredients to become a successful resource nation and to use her mineral revenue to fuel sustainable, long-term, diversified growth. 

But the three things I talked about are critical: a safe and secure climate for investment… adherence to the rule of law…and a clear signal to the world about the value of doing business here in Mongolia. 

Partnering for success 

The world is watching how Oyu Tolgoi develops. It is a test case for future investment in Mongolia which brings with it jobs, new business opportunities and community development. 

There is no doubt OT Underground is a complex and difficult project and it will require Rio Tinto’s balance sheet and technological competence to succeed. 

We are confident we can pull it off but we do need your trust, patience and support, please let us get on with the work of continuing to build a world class business. 

A business we can all be proud of, and generations of Mongolians can enjoy for decades to come. Mongolia has huge opportunity in front of it: an ability to leverage its great mineral resource for broad growth and prosperity. 

Rio Tinto is a long-term partner with Mongolia and we want to partner for progress and success. 

Success counts on expertise, consistency and revenue management. 

We will succeed together or fail together. Let’s join together to take Mongolia forward. 

Thank you.


Mining giant Rio Tinto urges Mongolia not to tamper with copper mine deal

ULAN BATOR, May 22 (Xinhua) -- Anglo-Australian mining giant Rio Tinto urged the Mongolian government not to tamper with the contract on the Oyu Tolgoi copper-gold mine in the Gobi desert if it wants to attract more foreign investors.
Speaking at the Mongolia Economic Forum held here Tuesday in Ulan Bator, Arnaud Soirat, the head of Rio's copper business, said Mongolia had all ingredients to become a "successful resource nation" but only if it honored agreements around issues such as tax and royalty payments.
"The world is watching how Oyu Tolgoi develops. Therefore, Mongolia has to demonstrate its stability to foreign investors to attract more investment. It is a test case for future investment in Mongolia which brings with it jobs, new business opportunities and community development," Soirat said.
"A strong partnership between the government and the private sector is important for sustainable economic and social development of the country. If we can work together, Mongolia will be able to attract more investment," he added.
Oyu Tolgoi is the largest public-private employer in Mongolia. Currently, the company employs 14,000 people, of which 94 percent are Mongolians.
Rio Tinto has invested more than 7.5 billion U.S. dollars in the country since 2010 and paid the Mongolian government some 1.5 billion dollars in taxes, royalties and other fees.
The company, the largest foreign investor of the resource-rich country, is now planning to spend a further 5.5 billion dollars on developing an underground mine.
However, the expansion has been delayed by political disputes and became the subject in a corruption investigation that has led to the arrest of two former prime ministers and an ex-finance minister who signed the 2009 investment deal.
Oyu Tolgoi copper-gold mine, located in the South Gobi Desert of Mongolia, is expected to produce an average of 430,000 tons of copper and 425,000 ounces (about 12,050 kg) of gold annually for 20 years, and is estimated to generate up to a third of government revenue by 2019.
The Mongolian government has a 34 percent stake in Oyu Tolgoi while Rio Tinto-controlled Turquoise Hill Resources owns the remaining 66 percent.

Source:Xinhua news agency

Rio Tinto warns Mongolia on tampering with rights to copper mine

By Neil Hume

Rio Tinto has warned Mongolia not to tamper with the contracts that underpin its investment in a giant copper mine in the Gobi desert if it wants to attract more foreign capital to the country.

Speaking at the Mongolia Economic Forum on Tuesday, Arnaud Soirat, the head of Rio’s copper business, said Mongolia had all ingredients to become a “successful resource nation” but only if it honoured agreements around issues such as tax and royalty payments. 

 “The world is watching how Oyu Tolgoi develops. It is a test case for future investment in Mongolia which brings with it jobs, new business opportunities and community development,” he told delegates, including government ministers. 

 A resource-rich nation of just 3.1m people, Mongolia desperately needs foreign direct investment. Last year, the country, which is sandwiched between China and Russia, turned to the International Monetary Fund for a bailout as bond payments loomed. 

 Rio is currently the largest foreign investor in Mongolia. It has ploughed more than $7bn into the first phase of the Oyu Tolgoi. It is planning to spend a further $5.5bn on developing an underground mine that will unlock the project’s full potential. 

 But these plans are under threat. Earlier this year, the cash strapped government hit Rio with a $155m tax bill, while members of parliament have set up a working group to review the agreements that underpin the development of the Oyu Tolgoi mine. 

 Analysts say much of the frustration with the contracts can be traced to the government’s decision to take a 34 per cent equity stake in Oyu Tolgoi. To finance its share of the mine’s development costs Ulan Bator has had to borrow money from a Rio subsidiary. Until that debt is paid off it cannot receive dividends. 

 “Protecting agreements and honouring contracts is critical – particularly in mining where time horizons are long and upfront investment is massive”, said Mr Soirat. “When agreements and contracts are honoured – it gives international investors’ confidence the same will be done for them.”

 Mr Soirat also touched on the tax row in his speech, saying that resource-rich countries like Mongolia should aim “to foster dispute resolution mechanisms and forums that yield fair and fact-based results.” 

 Rio has said it will take the tax dispute to international arbitration if it cannot reach agreement with the government. 

 “Mongolia has all the ingredients to become a successful resource nation and to use her mineral revenue to fuel sustainable, long-term, diversified growth,” said Mr Siorat. “But the three things I talked about are critical: a safe and secure climate for investment… adherence to the rule of law… and a clear signal to the world about the value of doing business here in Mongolia.”

Source:Financial Times


Mongolian queen of last Chinese emperor

China’s last emperor Puyi and empress Wan Rong, studying a photo album in Tientsin, 1925-1929. Courtesy of Palace Museum in Beijing.

Image may contain: 2 people, people sitting, shoes and indoor

Empress Wan Rong was royal Mongol princess from ruling Borjigon clan. Her sub-clan Daguur Mongol resides in Manchuria and her dad was influential official at the court of Daicing Gurun or Ching Dynasty. Her life was tragic..., to say the least.

Pan-Mongol Sentiments Re-Surfacing among Buryats

Paul Goble

            Staunton, May 20 – It has long been an axiom of Eurasian analysis that pan-Mongolism emerges only when Russia and/or China are weak. That has certainly been true in the past, but with Mongolia now a much more independent country than ever before in modern times, it may be time to modify the assumptions underlying that approach.
            Three recent developments suggest that: First, Moscow has forced the liquidation of the office of the plenipotentiary representative of Buryatia in Ulan Bator, apparently fearful that it was promoting the restoration of closer ties between the two Mongol peoples than the Russian government is prepared to tolerate.

            Instead, it has concentrated any ties between the Buryat Republic within the Russian Federation and the Mongolian government through a single official in the Russian embassy in Ulan Bator, an individual who is known to be a vocal opponent of Buryat national causes (asiarussia.ru/news/19508/).

            Second, despite this, Buryat officials and Buryats more generally are intensifying their contacts with their Mongol counterparts, seeking Moscow’s permission for expanded ties with Mongolia and urging the Buryat government to promote Mongol language classes in the republic’s schools (asiarussia.ru/news/19706/).

            The latter if successful could lead to a rapprochement between the two Mongol languages, Khalka and Buryat, and thus help promote the view widely held by many Buryats to this day that they are part of a broader Mongol nation, something that already informs the statements of some Buryat activists (rus.azattyk.org/a/29190792.html).

            And third, the self-described Pan-Mongol Party in Emigration based in Baku is using the Internet to reach out to Buryats in particular. It has become more active following the decision of the Buryat Republic parliament to disband the republic’s supreme court in order to save money and increase efficiency (facebook.com/groups/superinfo/permalink/1940275529340002/).

            Arguing that this move is but the latest step in Moscow’s campaign to destroy Buryat statehood, the party calls on all Buryats “to struggle with all their forces until complete victory.”  Specifically, it declares that “we do not recognize the collaborationist powers in Buryatia as legitimate” and declares that Russian government is “an occupation administration.”

            “We appeal to the world community to recognize Buryatia as an occupied territory, we consider that the Buryat-Mongol ethnos is being subjected to political and cultural genocide,” and, it declares, “activists of the Buryat national-liberation movement in emigration are the only legal power on the territory of Buryatia.”

            The party makes clear its final goal: “Buryatia will be independent!”


IMF Reaches Staff-Level Agreement on the Fourth Review of Mongolia’s Extended Fund Facility

May 18, 2018
End-of-Mission press releases include statements of IMF staff teams that convey preliminary findings after a visit to a country. The views expressed in this statement are those of the IMF staff and do not necessarily represent the views of the IMF’s Executive Board. Based on the preliminary findings of this mission, staff will prepare a report that, subject to management approval, will be presented to the IMF's Executive Board for discussion and decision.
  • Driven by strong external demand, Mongolia’s economy continues to recover; key macro-economic goals, including to reduce the fiscal deficit and boost international reserves, have been achieved.
  • This progress notwithstanding, risks to the program remain, including lower external demand for commodities, a slowdown in structural reforms, rising domestic spending pressures, and adverse changes to the investment climate.
  • To safeguard the program’s continued success, the focus should remain on strengthening the banking system, ensuring a prudent fiscal policy, remaining vigilant against inflation, building foreign exchange buffers, and improving public financial management.
    An International Monetary Fund (IMF) staff team led by Mr. Geoff Gottlieb visited Ulaanbaatar from May 2-17, 2018 to conduct discussions on the fourth review of the three-year Extended Fund Facility (EFF) arrangement approved on May 24, 2017, in an amount equivalent to SDR314.5054 million, or about US$434.3 million [1] (see Press Release No. 17/193 ).
    At the conclusion of the visit, Mr. Gottlieb made the following statement:
    “Macro-economic performance under the program remains positive, with all quantitative targets met. Fiscal results in the first quarter of 2018 have been much better than expected with a 21-percent improvement in revenues. Net international reserves improved by $200 million over the same period.
    “On fiscal policy, the authorities’ program for 2018 envisages continued budgetary restraint and strengthening tax administration. In addition, the authorities are taking concrete steps to improve public financial management particularly with respect to concessions, public investment projects, and the operations of the Development Bank of Mongolia.
    “In the financial sector, the authorities are moving ahead with the strengthening of the banking system as part of the follow-up to the recently completed Asset Quality Review. Banks that are undercapitalized will have until end-December to raise capital. A law that sets out, under appropriate conditions, when public funds can be used to stabilize banks is expected to be passed shortly. The authorities are also moving ahead with reforms that will allow for more rapid NPL resolution and strengthening banks’ balance sheets.
    “The authorities are committed to maintaining a monetary policy stance that is vigilant against inflation and supporting further strengthening in the balance of payments. It is critical to maintain progress in building reserves to help insulate the economy from external shocks. Sound macro-economic policies accompanied with structural reforms of the banking system will help durably reduce interest rates.
    “The authorities and the mission have reached staff-level agreement on the completion of the fourth review under the EFF arrangement, which is subject to the approval of the IMF Executive Board.
    “The team thanks the authorities for their cooperation, constructive dialogue, and hospitality during its stay in Mongolia.”
    [1] The dollar amount is calculated based on the SDR-dollar rate of May 24, 2017, equivalent to $425mn at SDR-dollar rate of 1.35274 as of February 27, 2017.
IMF Communications Department
PHONE: +1 202 623-7100EMAIL: MEDIA@IMF.ORG

Dr Mahathir should reopen Altantuya case, says Mongolia's President

PETALING JAYA: Prime Minister Tun Dr Mahathir Mohamad should reopen the murder case of Altantuya Shariibuu, said Mongolia's President Khaltmaagiin Battulga.  
“I sincerely hope that you will pay attention to bringing justice, implementing court decisions and settling the civil suit of the family of the victim in a fair manner to invigorate the atmosphere in the bilateral relations between our two countries,” Battulga said in a letter to Dr Mahathir on Wednesday (May 16).  
“As the President of Mongolia, I pay special attention to the grave crime committed in Malaysia on Oct 18, 2006 - the murder of Ms Shariibuu Altantuya, a Mongolian national and a mother of two children," he added.  
The letter was reproduced on the official website of the president’s office.  
Battulga also congratulated Dr Mahathir for being sworn in again as Prime Minister, saying that under his previous tenure, Malaysia developed intensively and that its reputation in the regional and international arena strengthened tremendously.  
“I am confident that Your Excellency will extend valuable support in restoring and activating the traditionally friendly relations between Mongolia and Malaysia as well as strengthening the people-to-people ties,” he said.


Critically Endangered Mongolian Saiga Antelope Population Drops by 40 Percent, WWF Survey Shows

Ulanbaatar, Mongolia – WEBWIRE – 
Populations of the critically endangered Mongolian saiga antelope (hereinafter ‘saiga’), which occurs only in Mongolia, have plummeted by 40 percent following large die-offs due to a harsh winter, World Wildlife Fund (WWF) announced. The findings of a population survey show around 3,000 saiga remaining after the brutal winter kept them from their food source of natural hay.
“Mongolia’s saiga antelope population has been suffering for several years now from a combination of disease and harsh weather conditions, so this news is extremely worrying,” said Chimeddorj Buyanaa, WWF-Mongolia Conservation Director.  “WWF and the Government of Mongolia are doing everything they can to prevent them going extinct but urgent action and support is needed.” 
The saiga population has suffered a roller coaster ride since 2001 when the numbers dropped to only 750 animals following a summer drought and a heavy winter. However, thanks to continuous conservation efforts by WWF and the Government of Mongolia, the population increased to 14,000 and its range increased by 13 percent in 2014. But then an outbreak of goat plague reduced the numbers to 5,000 in 2017. Poaching has also reduced the saiga population.  
To help conserve the species over the winter, WWF-Mongolia specialists and officers took emergency actions such as putting additional hay, forage food and salt licks in saiga distribution ranges. They monitored the results of their emergency actions through automatic cameras placed in the field and found that the saiga individuals were feeding on the hay. 
The survey of the saiga populations was performed by WWF-Mongolia in April 2018 in order to identify the current population size and compare it to those in the previous year, in addition to assessing their mortality rates. The team used a transect method for the survey within the saiga distribution range and counted about 3,000 saiga individuals, resulting in a 40 percent reduction from the March 2017 data.
According to the researchers, the saiga distribution areas are still lacking natural hay to be eaten, forcing the populations to travel large distances in search of food. This means that strategic conservation actions are needed, including setting aside breeding and calving areas for conservation and preservation of the saiga herds. In addition, detailed studies on saiga genetic survivability/capability are required to prevent this unique, globally important species from going extinct in Mongolia.


Inner Mongolia provides the perfect escape from big cities of China

By Luo Yunzhou Source:Global Times Published: 2018/5/17 18:17:40

With more youngsters in China seeking out a freer and more relaxed lifestyle, Inner Mongolia has become a dreamland for those who just want to chill out on the prairie as they appreciate the local wildlife. 

"Here you have the opportunity to see the world's most azure sky and the flourishing grasslands, " Zhang Qian, a young man I ran into from Hohhot, the provincial capital of North China's Inner Mongolia Autonomous Region. 

"Since ancient times, Chinese poets have been attracted by the beauty of this place. One of the most popular folk songs during the Northern Dynasties (386-534), "A Song of Chi Le," describes the vast wilderness and herds of cows and sheep," Zhang added. 

The Mausoleum of Genghis Khan

The first Great Khan of the Mongol Empire, Genghis Khan founded what would become the largest contiguous empire in history. Born Temüjin, he became the top leader of the nomadic tribes of Northeast Asia, and eventually took on the name by which he is known today - Genghis Khan. Under his command, the Mongol empire conquered a large portion of China and expanded its territory to Central Asia.  

Genghis Khan spent his lifetime fighting with other tribes and nations, including the Qara Khitai (1124-1218), Khwarazmian (1077-1231), Western Xia (1038-1227) and Jin dynasties (1115-1234). 

The Caucasus region also fell under his control during that time. After his death in 1227, his descendants continued to expand the empire's territory through invasion and war. As a result, the Mongol Empire became a fearsome legend throughout history.

After Genghis Khan's death, his remains were buried at a secret location. Since then several temples dedicated to the father of the Mongol Empire have been built over the centuries. 

To commemorate the khan, between 1954 to 1956, the Chinese government built a mausoleum to Genghis Khan in the  Kandehuo Enclosure in the Ejin Horo Banner, Ordos Prefecture of Inner Mongolia.

Unfortunately, the mausoleum was severely damaged during the Cultural Revolution (1966-76). With the help of local authorities, it was restored during the 1980s, and new replicas of other temples were also built around the original structure. 

Standing on the grassland, the mausoleum is an impressive monument to Genghis Khan. The white coloring of the structure makes it look both elegant and solemn. Though there is coffin inside the building, it actually only contains a headdress and other accessories similar to those that would have once belonged to the khan. 

Resonant Sand Bay 

Another recommended site for your Inner Mongolia vacation is Resonant Sand Bay, a desert surrounded by grasslands. What makes this place really special is that the sand gives off a singing sound whenever someone slides on it. This interesting facet is what gives the area its name. 

Since the area is China's seventh largest desert, you can experience the typical desert climate. When the wind is strong and dry, it causes sand to randomly shift from one place to another. If you are sliding on the sand with others, it sounds just like an airplane is passing over head. 

To explore the desert, horse riding and camel riding are two good choices that can allow you to appreciate the landscape and see the local wildlife.

Motor racing on the sand is also a great activity for those who crave something a bit more exciting. The soft sand makes riding around a very different experience than driving over hard-packed earth or concrete. The bikes are far more difficult to control on this type of terrain, so make sure you don't go too fast! 

If you are looking for something more relaxing, a sandbath might be a good option for you. Lying down on the warm sand and feeling the breeze of the wind kissing your cheeks, is far more comfortable than I ever imagined.

A meat feast

If you head to Inner Mongolia, a traditional Mongolian dinner is something you shouldn't miss out on. If you are lucky enough to have some local friends, ask them to introduce you to the most distinctive Mongolian food!

"The food here will definitely impress!" Zhang told me in an excited voice. 

"We have kumiss, hand-served mutton, special cheese and milk tea. They may all be a bit greasy, but they are really tasty." 

Every time I walked into a Mongolian restaurant got my stomach rumbling. Since meat is served everywhere, it felt almost like I was visiting a museum of meat, as entire roasted cows, lambs and pigs hung from hooks or had been placed on tables not far from where we sat. 

Looking at these roasted delicacies, we could just point at what we want, and the server brought it over to our table. 

"The lambs here are from the prairie, where the weather is dry, which provides a really good natural environment for grass, but not for any other plants to grow, so lambs and cows here have a plenty of food," Zhang explained.

Except for meat, some staple foods such as beizi, a kind of bun, and shaomai, a kind of steamed dumpling stuffed with lamb are also worth trying.

"I heard from the older generations that shaomai and beizi were probably brought from North China's Shanxi Province, when people started moving from Shanxi during the mid-Ming Dynasty (1368-1644). This lasted for 300 years, until the end of Qing Dynasty (1644-1911), since overpopulation in Shanxi caused many problems such as food shortages and Inner Mongolia at that time was still developing."

Nadaam Fair 

Once a year, a traditional festival is held in Inner Mongolia at the end of summer, usually around September 11-13. Locally called the Naadam Fair, or "The Three Games of Men," the festival involves three activities: Mongolian wrestling, horse racing and archery. In recent years, more woman have been participating in all women races and archery competitions, but wrestling is still reserved exclusively for men.

As one of the most popular festivals among ethnic Mongolians, the Naadam Fair can be traced back to the sporting competitions and military parades in ancient times, when the three events were widely held to celebrate special occasions, including spiritual gatherings and wedding ceremonies. 

There are some must-haves for any Nadaam Fair. The first is a splendid opening ceremony, during which many beautiful young ladies wearing traditional Mongolian clothing will perform traditional dances.  Then comes the introduction, when athletes and musicians make their appearance. The games then begin after the opening ceremony.

This interesting festival was inscribed on the Representative List of the Intangible Cultural Heritage of Humanity of UNESCO in 2010.

Rules of thumb

What to wear: The weather is dry and temps can range from very cold to extremely hot, so summer clothes are suitable for the afternoons, but long sleeves are required in the early morning and at nighttime.

Getting around: Taxies and buses are cheap and convenient when in cities, but there are no subways. Make sure you have some coins ready for public transport.
Newspaper headline: The sound of nature

Source:Global Times

Mongolia buys 3.2 tons of gold in 4 months

Mongolia purchased over 3.2 tons of gold in the first 4 months of 2018, the Bank of Mongolia said. 
This marked a rise of 257.6 kg from the same period last year. As of April, the central bank's average gold price was 102,096 tugrik (US$42.52) per gram, which corresponds to a low rate on the London Metal Exchange, according to the Bank of Mongolia.
It is expected that the gold purchase will increase with the start of the peak of gold mining in August, September and October.
Miners in the country submitted 20.01 tons of gold to the central bank in 2017, contributing 800 million dollars to the state budget.
Annual gold production had not surpassed 20 tons since 2005 when it reached its record high of 25 tons, Xinhua reported.

Source:Xinhua news agency

Mongolia to hold forum on renewable energy

ULAN BATOR, May 16 (Xinhua) -- Mongolia will hold the 9th National Renewable Energy Forum here on May 24, organizers said in a statement on Wednesday.
The annual forum is co-organized by Ministry of Energy, the Energy Regulation Commission of Mongolia, the Mongolian Renewable Industries Association and the Mongolian Wind Energy Association.
This year's forum is expected to cover topics such as establishing independent grid in remote area, current renewable energy situation on grid, opportunities of reducing air pollution using renewable energy in urban areas.
Currently, the number of attendees of this year's forum has reached 600.
Mongolia has enormous potential for the development of renewable energy.
The East Asian country with a population of just over three million enjoys more than 250 days of sunshine a year.
The country's renewable capacity nearly doubled last year, reaching 155 MW, according to data from the Ministry of Energy.
The landlocked country installed its first large solar power plant, with a capacity of 10 MW, in Darkhan-Uul province, in the north of the county, in January 2017. Its second wind farm, the 50 MW Tsetsii Wind Farm, also opened in October of that year.
Mongolia seeks to provide sufficient heat and electricity to its population, especially in rural areas, and renewable energy projects are seen as a possible solution.
According to Mongolia's Ministry of Energy, the country has a potential wind capacity of 1,100 GW.

Source:Xinhua news agency

Mongolia to allocate over 8,600 hectares of free land to families

ULAN BATOR, May 16 (Xinhua) -- Mongolia will allocate a total of 8,605 hectares of land free of charge for families this year, the Mongolian government press office said in a statement Wednesday.
The government will also allocate 30 hectares of land to business people who want to grow potatoes and vegetables.
Last year, 32,000 Mongolians owned 3,443 hectares of land free of charge.
The total land area of Mongolia is 1,564,116 square km. But over half of its three million population live in the capital, Ulan Bator
Those residing in the capital are also able to own land in rural areas for free, according to the Department of Land Privatization Management of the Ulan Bator Property Relations Agency.
According to the law on land allocation, the size of land allocated for ownership for family needs varies depending on location.
Foreign citizens and companies who are not permitted to own land can only use it under definite conditions and terms.

Source:Xinhua news agency

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