Hong Kong-listed Companies as Major Acquirers of Resource Assets in Mongolia. Over the last 12 months, Mongolia has become an attractive investment destination for the companies listed on the Hong Kong Stock Exchange (HKEx). Attracted by the country’s huge mineral resources, the HKEx-listed companies have become the biggest acquirers of Mongolia resource assets since the second half of 2009 ($966mn worth of M&A deals or over 90% of total).
Mongolia Business Blog
doing business & investing in Mongolia
Archive for ‘Mining’
Mongolia’s 2010 State Budget and Talks of Revision Amid Inflation Concerns
Sensitive financial issues were discussed at a “secret” meeting on Monday attended by members of the Standing Committee on the Economy, and representatives of the International Monetary Fund, the MongolBank, and the National Statistics Office. They talked mainly about the budget deficit and the threat of inflation.
The Finance Ministry has proposed revisions to the 2010 budget following the increase in the price of copper and gold. If this has meant MNT 364.2 billion in extra revenue, the decision to increase the salary of civil servants by 30 percent, and reinstatement of the child allowance will lead to more expenses. Some new public projects have also been proposed. Taken together, these will take the budget deficit beyond the proposed 5% of GDP as stipulated by the IMF.
Mongolia Mining Policy Report Card – Mongolia Ranked Near Congo (DRC), Zimbabwe, and Venezuela
Few days ago, we posted an article on Fraser Institute’s Mining Survey as obtained from the NAMBC newsletter: Mongolia Drops in Annual Fraser Institute Mining Survey. In this post, we will attempt to break down what it exactly means.
Mongolia Mongolia’s ranking dropped in the Fraser Institute’s Mining Survey – what exactly does it mean?
The “drop in Mongolia’s ranking” was in the “Policy potential index”, which aims to be “a ‘report card’ to governments on the attractiveness of their mining policies”. Please see image below.
Mongolia Drops in Annual Fraser Institute Mining Survey
Mongolia has dropped from 55th place to 67th place out of 72 jurisdictions in the annual Survey of Mining Companies 2009/2010, released on April 15 by the Fraser Institute, one of Canada’s leading public policy think-tanks.
This is Mongolia’s lowest ranking since 2006. Mining industry executives rate Quebec as the world’s most attractive jurisdiction for mineral exploration and development for the third straight year
In the “policy potential index,” Mongolia was in the bottom 10 of 72 jurisdictions rated. Countries rated lower than Mongolia were the Congo (DRC), Zimbabwe, the Philippines, Ecuador and Venezuela. In 2008/2009, Mongolia ranked 55th out of 71, in 2007, 61st of 68, and in 2006-2007, 62nd of 65. California was also in the bottom 10 this year, ranked below Indonesia.
Dornod Uranium, Khan Resources, ARMZ, Russia, & Mongolia
Editor’s note: I found this article online today. It gives an overview of events involving the Dornod Uranium mines. The players include Khan Resources, ARMZ, Russian Government, and Mongolian Government…
Despite the potentially huge profits, it can be difficult to do business in a former communist country — particularly one that is in Asia. Western companies have learned this the hard way.
One current example is in Mongolia, involving a Canadian company, Khan Resources, and a rapid chain of events that put the company on the verge of losing vast amounts of money and essentially being kicked out of Mongolia. In the end, however, Khan Resources would have the last say.
Khan Rebuts All Charges Based on “Inaccurate Information”
In an open letter to MP Z. Enkhbold, Khan Resources has clarified its point of view about certain conclusions and recommendations recently made by the working group led by him after its visit to Dornod uranium district last summer.
The company notes that the license it holds was not included in the list of licenses whose legality was sought to be investigated. Reiterating that the company has been fully cooperating with Government officials, Khan says it would be pleased to provide all relevant documents to the working group if asked to do so. Expressing confidence that Khan has fulfilled all its obligations towards Central Asia Uranium Corporation (CAUC), the company says it is difficult to understand why only it should be investigated when there are two other partners in the joint venture. “It is most unfortunate that inaccurate information has been delivered…through recent official and unofficial sources that suggests that only Khan may have been in breach of the law,” the letter says.
Goldman Sachs May File Case on Olon Ovoot
Goldman Sachs is believed to have filed a case against Mongolia in an international arbitration court in matters relating to Mongol Gazar and the Olon Ovoot mines. This news comes in the wake of unconfirmed but strong reports that the Mongolian Government has lost the case against the Russian-owned Altan Dornod.
Mr. B.Lhagvasuren, director of the Inspection Department at the Central Bank, has denied any information about Goldman Sachs filing any case
Mr. Ts. Myanganbayar, a business magnate, mortgaged the Olon Ovoot gold mine license to several banks and to Goldman Sachs to borrow a total of MNT 210 billion. Of this, Zoos Bank, now known as State Bank, gave him MNT 60 billion, Anod MNT 30 billion, and Goldman Sachs MNT 15 billion.
Nuclear Energy and Uranium in Mongolia
Mr. Eric de SEZE, General Director & CEO of Areva Mongolia, “Nuclear Energy and Uranium” “PART TWO of BCM Meeting Highlights”
On Monday, December 7, 2009, Business Council of Mongolia (BCM) held its last meeting of the year. Guest speakers Mr. B. Enhuyag, First Deputy Governor of Bank of Mongolia and Mr. Eric de SEZE, General Director & CEO of Areva Mongolia discussed “Views on Current Macro-Economics and Mongolia’s Banking Sector” and “Nuclear Energy and Uranium”, respectively.
James Passin Bullish on Mongolian Stock Market
Today, while going through some articles on Mongolia, I ran across an article that happened to cover the Mongolian stock market by a stock market guru named James Passin. It was a lucky find as the article mostly talked about Berrylium. Anyway, please read on.
As you will find, James is very bullish on the local Mongolian stock market.
Source:
- The Energy Report (TER), interviewed by Karen Roche, Publisher 11/19/2009
- http://www.theenergyreport.com/pub/na_u/1214
Mongolian Stock Market Overview
TER: Any other regional international plays that you can discuss with us?
JP: Ivanhoe Mines Ltd. (NYSE:IVN, TSX:IVN) , the Canadian exploration company, finally executed an agreement with the Mongolian government with respect to the development of Oyu Tolgoi, the world’s largest undeveloped copper mine. This is a massive mine that will generate $5 billion of revenue per year for over 50 years. While this is a positive development of Ivanhoe, a stock that we’ve been trading from the long side all year, it will be much bigger story for the Mongolian stock market.
Mongolia GDP is only about $5 billion, so Oyu Tolgoi, or OT as the mine is called, will transform the prospects for employment and per capita GDP growth. A great wall of domestic liquidity will support the local stock market, creating a new bull market which will last for decades. The local stock market currently has depressed valuation and almost zero liquidity. Mongolia has structural similarities to other emerging markets that started out with very low market capitalizations, such Vietnam or the smaller Gulf states. There are 24 mineral projects that have been deemed strategic by the Mongolian government and that represent potential sources of commodity exports. The Ivanhoe deal marks the beginning of the Mongolian mining boom and I think the most leveraged long-term way to play this mining boom is through the local stock market.
Ivanhoe Mines Financial Results and Review of Operations (Third Quarter of 2009)
On November 13, 2009, the following article was released on CNN Money. It contains highlights from Ivanhoe Mines’ financial tesults and review of operations. The full PDF can be downloaded from the Ivanhoe Mines website.
————————–
Ivanhoe Mines Ltd. (TSX: IVN)(NYSE: IVN)(NASDAQ: IVN) today announced its results for the quarter ended September 30, 2009. All figures are in US dollars, unless otherwise stated.
HIGHLIGHTS DURING THE QUARTER AND SUBSEQUENT WEEKS
- On October 6, Ivanhoe Mines and its strategic partner, Rio Tinto, joined with the Government of Mongolia in a state ceremony for the signing of an Investment Agreement for the Oyu Tolgoi copper-gold project. The Investment Agreement establishes a stable legal, fiscal and regulatory environment for the construction and operation of the Oyu Tolgoi mining complex.
- On October 27, Ivanhoe received $388 million from Rio Tinto, increasing Rio Tinto’s equity ownership in Ivanhoe Mines to 19.7%. The additional funds will be used to help build and commission the open-pit mine and to advance development of the underground block-cave mine at Ivanhoe’s Oyu Tolgoi copper-gold project in Mongolia.
-
- Newsletter Subscription http://bit.ly/9ghIBe
- Oyu Tolgoi to start training 2,500 people, who will work in the mines to in three years, starting September 1 http://bit.ly/dA3bJo
- Naadam and Summertime in Mongolia | Mongolia Business Podcast New Episode http://bit.ly/7JTMQj
- Hunting wolves with golden eagles in Mongolia http://bit.ly/bQAxQF
- Some really neat Mongolian songs on YouTube! Check them out!!
- Growth is ‘first priority’ for Rio Tinto cash – CEO Tom Albanese http://bit.ly/9alo5o
- Hunnu starts trial mining at Mongolia coal mine http://bit.ly/c143uQ
- Oyu Tolgoi to start training 2,500 people, who will work in the mines to in three years, starting September 1 http://bit.ly/dA3bJo
- Ivanhoe 'trillions' reports send ripples http://bit.ly/aIZT9z
- Erdenes Tavantolgoi is proposed to be set up to hold 100% share of the Tavan Tolgoi deposit. http://bit.ly/a0ZSyh
