message from Japan

"subject: Mongolia
2011-03-12

"Hello there. I am an Australian currently writing from Japan and have been given some information that Mongolia may be one of the safest places as far as natural disasters are concerned. As you are aware we got shaken up terribly yesterday...

"Anyway I am seriously considering moving to Mongolia and would like to discuss how things over there are..."

=

RE: Mongolia

Thanks for your message. It's terrible about the disaster in Japan.

Here is a post I wrote about earthquakes in Mongolia, and particularly in the capital city of Ulaanbaatar:

http://radiganneuhalfen.blogspot.com/2010/04/earthquake-in-ulaanbaatar.html

Here is a recent article on the rapidly-changing society of Mongolia:

http://www.foreignpolicy.com/articles/2011/01/02/welcome_to_minegolia

Cheers,
Radigan

2009 October 16

Mongolia, Ulaanbaatar

models backstage at Gobi cashmere fashion show

photo by Timothy Fadek / Polaris Images

2010 June 17

Mongolia, worksite near Uyanga

ninja miners playing pool

photo by Timothy Fadek / Polaris Images

2010 June 25

Mongolia, Gobi Desert, Oyu Tolgoi gold and copper mine

miners

photo by Timothy Fadek / Polaris Images

2010 June 27

Mongolia, Ulaanbaatar, Tuul River

swimming

photo by Timothy Fadek / Polaris Images

2010 July 14

Mongolia, Erdenet

woman with umbrella

photo by Timothy Fadek / Polaris Images

"Bidders Line Up to Purchase World’s Largest Coal Deposit"

"Seven bidders, including Arcelor Mittal, Vale, Xstrata, Peabody, Shenhua and Mitsui, plus a Japanese, Korean and Russian consortium have been shortlisted to develop Mongolia’s massive Tavan Tolgoi reserves.

"The site, owned by Mongolia’s state-owned Erdenes, has 6 billion tons of coal reserves and is capable of producing 15 million tons annually for over 30 years. The site is expected to require an initial US$7.3 billion investment to get it ready for development. A separate IPO is also being planned for the mine, with estimates this could raise at least US$15 billion.

"The Tavan Tolgoi site is in the Gobi Desert, about 540 kilometers south of Mongolia’s capital of Ulaan Baatar. The winning bid is expected to be announced on June 30, 2011."

--2point6billion.com

Sudden Prosperity

“Mongolia’s billions of dollars worth of copper, gold, uranium and coal reserves promise the greatest influx of wealth for the country since Genghis Khan conquered much of the known world in the 13th century.

“They also may spawn a crisis. Sudden prosperity can overwhelm an economy, exposing it to commodity-price swings. Mongolia’s leaders say they are determined to avoid a sudden surge in wealth that ultimately hampers expansion....

“'If you go to most developing countries, they’ll tell you, “We’re saved; we’ve found uranium,”' said Hernando de Soto, a Peruvian free-market economist. Mongolia has 'a president who says, “We are in grave danger because we have discovered we have a lot of natural resources.”' The fact that 'they are forewarned gives you hope.'”


--Michael Forsythe, Bloomberg.com, 2010 February 15

Mine-golia

Two articles on Mongolia mining

New Statesman:

"Not all of these licenses have been exploited yet, but those that have are causing immense problems already – literally carving chunks out of Mongolia’s beautiful landscapes and leaving a legacy of pollution that will be there for years to come. More than 2,000 of the country’s small and medium sized rivers have disappeared, due to mining operations digging up their sources, and there is widespread soil and water pollution from the mercury and cyanide used in the mining and extraction process."


Asia Times:

"The magnitude of potential investment and forecast revenues from deposit sales have led some to christen Mongolia the 'El Dorado' of the new millennium. While this may be a slight exaggeration, the government's National Development Strategy 2021 anticipates per capita income in Mongolia increasing from US$1,100 today to $7,000 in five years and $15,000 by 2021."

Mongolia Investment Forum in New York

Here is an article on investment in Mongolia from The UB Post last month. The adverse effects of the Windfall Tax law are mentioned as expected, but there are also some surprises, such as concern over the railway and the idea to export energy to China.

"Entree Gold has drawn-down their investment by around 50 percent since 2002. The Western Prospector Group withdrew over US$3 billion capital outlay from the country after the windfall profits tax was adopted hastily last year...

"There are 15 strategically significant mineral deposits, where government participation is indefinite...

"Another barrier in trading with Mongolia is surface transportation links. Most of the cargo traffic is carried by the railway. Mongolia’s railway gauge is different from Chinese railway system, which has a standard gauge of 1,435 mm while it is 1,524 mm in Mongolia. Each carriage has to be lifted in turn to have its bogies changed...

"'We are looking principally at four sectors of the Mongolian economy. The first one is upgrading the railway. It would cost US$129 million to upgrade and increase the capacity of the railway system. It’s considered to be a key constraint of the Mongolian economy’s growth,' said James Hallmark, Millennium Challenge Corporation’s Country Director for Mongolia...

"'The windy southern province in Gobi, which shares a border with China on the south, is a good place to build wind power stations and export the energy to China... We should export energy to China rather than coal,' said Alan Fontaine, CEO of Newcom Group."

--Ch.Sumiyabazar for The UB Post

Mongolia Mining Less Attractive

Unfortunately, this was the perfectly predictable result of last year's "Windfall Tax" on mining companies:

"TORONTO, March 5 /PRNewswire/ - The attractiveness of Mongolia for mineral exploration has dropped significantly in the eyes of mining executives, according to the Survey of Mining Companies 2006/2007, released today by independent research organization The Fraser Institute. Mongolia's ranking fell significantly, dropping to 62nd from 33rd last year, reflective of the regulatory difficulties and lack of openness experienced by mineral exploration companies operating in Mongolia in the past year.

"'Our experience with the survey has shown that above all, mineral exploration companies value stability and certainty when it comes to government policy,' said Fred McMahon, co-ordinator of the survey and the institute's Director of Trade and Globalization Studies."

-Mongolia Web

Mongolia, China, and Chinggis Khaan in *The Economist*

"Battle for Mongolia's soul

"On the 800th anniversary of his empire's birth, China and Mongolia both claim Genghis Khan as their own"

The Economist, Dec 19th 2006

"The Mongolian government has already suffered the downsides of economic nationalism. By law, all gold output is supposed to be sold to the Bank of Mongolia, the central bank. This year the amount sold has fallen by half even though production has continued to rise, says the central bank's former governor, Ochirbat Chuluunbat. He blames a windfall tax that has encouraged small producers to sell gold on the black market rather than to the bank. Most black-market gold is smuggled across the 4,677km border with China...

"For all Mongolia's nationalism, the government remains acutely aware of the dangers of upsetting its powerful southern neighbour. Officials studiously avoid criticism of China, which provides vital port facilities for Mongolia's exports...

"In order to avoid falling under the sway of either Russia or, particularly, China, Mongolia pursues what it calls a 'third neighbour' policy. This involves remaining on good terms with its giant neighbours but also reaching out to countries such as America and Japan (Mongolia's biggest aid donor). America has been delighted by Mongolia's support for its military operations in Iraq, including the dispatch of some 200 support troops. This is the first time Mongolian troops have been stationed in Iraq since Genghis's grandson, Hulagu, conquered Baghdad...

"A Mongolian general, given warning by an American counterpart of the dangers of operating in Baghdad, is said to have quipped: 'I know. We've been here before.'"

Face of the Future

"Mongolia is the latest country to be sucked into the centrifugal force of China's rapid economic growth, yesterday signing a series of economic agreements with its prosperous neighbour. . .

"The biggest coal mine in Mongolia is sending train-loads south to China, whose energy hunger is voracious, at a tonnage price well below the global market price."

-The Australian