Mongolbank made request from the Government to refund “Anod” shareholders

Last week, Standing Committee on Economy held meeting and discussed three issues. First, to discuss the draft law on prohibiting issuance of exploration licenses, initiated by the President of Mongolia; MPs of Standing Committee voted for the draft laws to be discussed by the State Great Khural.  Second, Mongolbank and the Financial Regulatory Committee made a statement and proposed to the Standing Committee to refund Anod shareholders’ money 5.2 billion MNT. MPs of the Standing Committee reviewed the statement and suggested to made decision independently or to propose officially to the State Great Khural.  The last issue was on accredit of US$200 million by a former President of Mongolbank, MP O.Chuluunbat. Due to this non-secure accredit Mongolia would suffer notable loss. According to Mr. L.Purevdorj, President of Mongolbank, the legal sues are being held at two courts, one is in favour to the Mongolian side.   Source: business-mongolia

Mongolian mining companies to attend event at London Stock Exchange

The London Stock Exchange will hold a Mongolian Mining Companies’ Day on June 8. Northernsec is behind the event and its Director, B.Ulziibayar, gives more information on the planned day.

Why is such an event being organized?

We felt our domestic mining companies must be able to access investment and financing from foreign sources. Their needs for large amounts for long periods cannot be met from inside the country. The event will help bring them and investors together. 

How many companies have expressed interest?

We already have 20 confirmed registrations. 

How is the preparation work going?

Registration is being done in our company’s office in Ulaanbaatar. The London Stock Exchange is also active. The Ministry of Minerals and Energy, the Mineral Resources Authority and the foreign investment office have offered help and cooperation. 

What do companies have to do to participate?

There are no selection requirements as such. Companies which need visas should send their details of their company and project to info@northern-securities.com before May 21. Companies which don’t need visas can register in June, too. Interested companies can get further information from dialing 310-262.

Who first had the idea and how did the London Stock Exchange receive your proposal?

Last October we successfully organized a workshop in Ulaanbaatar on new ways of raising capital, in cooperation with the London Stock Exchange and the New York Mellon Bank. So the exchange already knew of the problems and the possibilities and favorably considered our proposal to organize a special day. We expect several international financial organizations to attend the event. They include J.P.Morgan, ING Bank, Citibank, Credit Suisse, Deutsche Bank, Bank of New York, Morgan Stanley and Nomura.

Northensec works as broker, dealer and underwriter and is a member of  the Mongolian Stock Exchange. It was established in 2007 and is offering new financial services in Mongolian stock market. It also facilitates Mongolian customers to trade on international stock market.

Source: http://www.news.mn

Itochu targets Mongolian coal to expand trade

Itochu Corp., Japan’s fourth-largest trading company, has invested in Winsway Coking Coal Holdings Ltd. to secure coal from Mongolia, stepping up competition with China and Russia for the steelmaking ingredient as prices jump, says a report by Bloomberg.

Itochu joined a group led by Hopu Investment Management Co., the $2.5 billion fund run by Goldman Sachs Group Inc. partner Fang Fenglei, in investing in Winsway with the purchase of $10 million of convertible debt last month, Ken Tezuka, manager of the company’s coking coal section, said in an interview in Tokyo. Winsway, based in the British Virgin Islands, transports coal from Mongolia to China.

China Shenhua Energy Co. and Russia’s government-run ARMZ Uranium Holding are seeking access to coal and energy assets in Mongolia, the home of some of the largest undeveloped mineral resources in the world. Itochu wants to add Mongolian assets to its operations in Australia, Indonesia and North America as prices climbed to a near record this year.

“The current levels enable Mongolian coal to sufficiently compete against coal produced in other regions,” Tezuka said May 14. “Mongolian coal wasn’t viable to export when prices were around $30 and $40” a metric ton.

Winsway has expanded sales recently by investing in trucks to carry coal from mines in Mongolia, including one close to the $2 billion Tavan Tolgoi coal deposit, Tezuka said.

Mongolia’s coal exports to China may climb to about 12 million tons this year from 8.5 million tons in 2009, Alexander Molyneux, the chief executive officer of SouthGobi Energy Resources Ltd., said last month.

China bought about 4 million tons of coal in total from Mongolia in 2008 out of national production of 10 million tons, according to a March 18 statement released by Japan’s Ministry of Economy, Trade and Industry.

Mongolia will develop its biggest untapped uranium field in a venture with Russia. State-owned KOO MonAtom will hold at least 51 percent in a venture with ARMZ Uranium and possible partners from Japan or China, Bayarbayasgalan Tudevbazar, nuclear materials chief of Mongolia’s Nuclear Energy Agency, said last month.

SouthGobi halts plan to build rail link to China border

SouthGobi Resources has halted its plans to build a rail link between its pit in southern Mongolia and the Chinese border because of uncertainty over government policy. Instead, it will concentrate on upgrading a road link in the deserts to the border.

CEO Alexander Molyneux said the Mongolian government is reviewing the nation’s entire railways policy, and “given the question marks over the policy, we decided to suspend work on the rail link”. SouthGobi had earmarked $150 million to develop rail and road links near its Ovoot Tolgoi mine.

Source: http://www.news.mn

Stock exchange to be restructured under contract

The Government yesterday approved draft proposals on selecting a management team to restructure the operating procedures of the Mongolian Stock Exchange (MSE). They have been forwarded to the State Property Committee for beginning the tender process of selection.

The bidders have to be a legal entity or a consortium of such entities. Members of the administrative team must have experience of working in the securities and capital market, especially in countries that have made the transition to a market economy in the recent past and that still do not have a comprehensive securities market environment in place.

A bidder will have to submit a detailed 3-year business plan to cover four principal areas: Facilitating a sustainable securities market; facilitating efficient operation of the securities market; establishment of a fair market; and protecting investors’ interest.

The State Property Committee has been asked to complete the competitive selection process within 3 months. There will be no dilution of state ownership, and the management team will run the MSE on the basis of an administrative contract.