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General News
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General News
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Saturday, 21 March 2009 00:25 |
 Business: Ivanhoe welcomes Parliament assurance that agreement is “principal priority”; MPs itemize areas of disagreement; Agreement will be a milestone, reaffirms Minister; Ivanhoe shares fall, but analysts not perturbed; Australia extends Chinalco-Rio deal review by 90 days; Australian Senate to examine foreign investment; BHP should spin off units in slump, JPMorgan says; Rio Tinto’s China deal needs revision, major investor says; Rio Tinto names Jan du Plessis as chairman; Japanese company wants to make satellite parts in Mongolia.
Economy: Donor countries, institutions make initial offers to IMF program; Budget deficit brought down without cutting salaries; “Look beyond the crisis,” donors’ forum urges Mongolia; Raising policy rate was part of IMF program, Central Bank explains; Mongolian Stock Exchange and MICEX Group to cooperate; Meteoric rise in number of bank card holders; Mongolia looks to carrying more transit freight; Narantuul market reopens, trade remains sluggish; Turkish aid for water project in Gobi region; Economic crisis will hurt women more than men, says ILO; Mongolia slips marginally in tourism index; Construction companies to exchange views.
Politics: New phase in relationship, Bayar says as he leaves Russia; Bayar visiting European capitals; Law changed to allow return of politically appointed governors; Human traffickers exploit “too light” punishment; 100 dogs killed daily in Ulaanbaatar; Goals set for human rights program; New drafts to help people access information; Physicist likely to head AtoMon; Mini parks to be built in Ulaanbaatar; Kitchen garden training for poor women; Mongolian herders in Australia to study farm management.
LEAD STORIES:
IVANHOE WELCOMES PARLIAMENT ASSURANCE THAT AGREEMENT IS “PRINCIPAL PRIORITY”
Ivanhoe Mines has welcomed the assurance given last week by Mongolia's Parliament that completion of an Investment Agreement for the development of the Oyu Tolgoi copper-gold mining complex will continue to be a principal priority for the coalition government when Parliament reconvenes in the first week of April. A statement issued by the press office of Parliament confirmed that discussion of the draft agreement would resume when Parliament returns for the spring session. The statement added, "We will place the review at the top of the Government's action agenda to help ensure that new investment is directed to Mongolia and new jobs are created for Mongolians to help our economy weather the present international financial crisis.”
Saying that the coalition Government believes that the draft agreement “represents a significant step forward in the development of Mongolia's mineral wealth to benefit present and future generations of Mongolians, and the nation," the statement noted that the Standing Committee on the Economy had made significant progress in discussing the agreement last week and that Members of Parliament had requested that a small number of points be reviewed. A Working Group formed to address the issues will continue its review during the break between the extraordinary winter session of Parliament, which ended on March 13, and the beginning of the regular spring session of Parliament in early April.
Ivanhoe Mines and Rio Tinto will continue their cooperation with the Working Group during the short parliamentary recess to prepare additional information to facilitate an early approval by Parliament. Following the completion of negotiations earlier this month, each page of the draft Investment Agreement was initialed by representatives of the Mongolian Cabinet and of Ivanhoe Mines Mongolia before the document was presented to Parliament as part of the final approval process.
Source: www.ivanhoemines.com
MPs ITEMIZE AREAS OF DISAGREEMENT
The MPRP group in Parliament has listed their reservations about the draft investment agreement. A brief summary is given below.
1. The Constitution and the Minerals Law alike say that details of all mineral resources in an area to be opened to mining and quarrying should be registered at the state reserve document. Also, the technical and economic grounds (TEG) for exploiting the deposit should be set out, the investment amount specified, and an assessment of the cash flow made as there is urgent need to increase the revenue to the State budget and to the Mongolia Development Fund.
2. There should be a clear explanation of why the initial investment amount has been changed to USD5 billion. The specifics of any increased investment must also be provided.
3. What the returns on the investment on the project will be to Mongolia must be clarified with a full account of customs duties, VAT and all other applicable taxes, as also of expenses to be exempted from taxation.
4. The draft mentions that financial matters have been settled in accordance with TEG. It is not clear what will happen if the investor decides on major changes to the planned phases of implementing the project. It is merely mentioned that he has only to inform the Minerals and Energy Minister, but nothing is said about protections against the investor abandoning the project, or keeping it idle for long, or any other eventuality that might defeat the purpose of the agreement to benefit the people of Mongolia.
5. The following issues, related to infrastructure, must be unambiguously explained:
a. What are the water requirements for the project and what are the grounds for their utilization? Have the estimated amounts and the sources been ratified by authorized entities of the Government? Who will pay for supply and use of the water? It also has to be clarified how much of the water needs will be met from surface water and how much from underground sources.
b. Similar issues relating to electricity supply must also be clarified, and the possibilities of supplying water from the central water supply system to meet energy needs should be specified on the basis of TEG, and must be included in the project financing.
c. All references to roads should be clearly spelled out.
6. It has to be clarified if any shareholder can pledge or transfer his shares to a third party or transfer his duties and obligations under the agreement.
7. Article 4 of the draft agreement must be modified to comply with the Regional Development Concept, so that attention is paid to development of the area around the mines, to supporting the livelihood of local residents, assisting local and regional socio-economic programs, and to operating at all times in a transparent and responsible manner.
8. The exact legal status of Ivanhoe Oyutolgoi Ltd., registered in the British Virgin Islands, has to be ascertained. It should be clarified whether it has the authority to sign on behalf of the parent company, and the exact duties and obligations of the various other legal entities, such as Rio Tinto Peak, Rio Tinto Ltd., Rio Tinto International Holding, Ivanhoe Group, Ivanhoe Mining, Rio Tinto and China Alco must be clarified.
9. The 30-year validity of the term of the agreement must be changed to one not exceeding 15 years. It also has to be made clear for how long the agreement can be extended after the initial 15 years.
10. The amount of advance to be paid by the investors is too low and the interest to be paid on this is too high. Both have to be reviewed.
11. The issue of increasing the Mongolian ownership from 34 percent to 50 percent should be resolved in compliance with Parliament guidelines on terms of investments. Will there be opportunities for Mongolians to own shares? The Mongolian side and the investors should have equal representation on the Governing Board.
12. There should be specific statements of obligations under the agreement, so that they can be assessed and enforced, and any dispute can be resolved quickly.
13. It is stated that the text of the English version of the Agreement shall be followed if there is any discrepancy between the English and Mongolian versions. Therefore, all terms and clauses in the translated documents must be identical in meaning, there should be no mistakes in the translation, nor any typing errors. The texts must be edited and proofread by professionals selected by the Ministry of Foreign Affairs.
Source: Business-Mongolia.com
DONOR COUNTRIES, INSTITUTIONS MAKE INITIAL OFFER TO IMF PROGRAM
A meeting was held on March 14 between representatives of the Government and various donor countries and international donor organizations to find out who will give how much to meet Mongolia’s estimated requirement to tackle the economic crisis. The country’s total needs have been put at more than MNT1 trillion. The IMF has stated it is willing to approve a USD224 million program, of which USD204 million is to be provided by donors. At Saturday’s meeting, Japan promised USD50 million, the USA USD22 million, the Asian Development Bank USD50 million and the World Bank USD60 million. The figures are not final.
Mr. David Dollar, the World Bank’s Country Director for Mongolia, called the meeting “successful” and said the Bank will help the Government spend the money in the best ways. The IMF Representative said the Mongolian economy has been “rocked by a steadily worsening trade situation, a turbulent banking system, and a wasteful budget policy”, and the risks of “instability in the macro economy are increasing”. The IMF-Mongolia joint program was meant to restore the stability.
Minister for Finance S.Bayartsogt said the IMF had estimated that the recovery program would need USD630 million, apart from the Oyu Tolgoi and Tavan Tolgoi advance payments. “We have requested China for a loan and negotiations will start in autumn. Another request was sent to Russia. The response from there is that there would be no cash loan, but food and agricultural material would be supplied,” said the Minister.
Source: www.news.mn, Business-Mongolia.com
NEW PHASE IN RELATIONSHIP, BAYAR SAYS AS HE LEAVES RUSSIA
Russia will lend Mongolia USD300 million for agriculture, Prime Minister Vladimir Putin said Tuesday after a meeting with his Mongolian counterpart S.Bayar. The loan “will be used to buy Russian machinery and other Russian goods, also seeds, and milk cows,” Mr. Putin said. Mr. Bayar was on a three-day visit to Russia. The loan will be issued by Rosselkhoz bank to Mongolian commercial banks.
Later, before leaving Russia at the end of a three-day visit, Mr. Bayar termed it “a success” and expressed the hope that the relationship between the two countries would now reach “a new phase”. “I am leaving with a full pocket,” he said to the press in Moscow with a smile.
The two Prime Ministers met privately before a meeting between the full Mongolian delegation and a Russian team. The two countries discussed the possibility of using the RUB and the MNT as trade currencies. They also said they would cooperate in the railroad sector. “We’ve agreed on the creation of a joint enterprise with Russian Railways and on the joint use of Mongolia’s natural resources to realize major investment projects,” Mr. Bayar said.
Mr. Putin said Russia would continue sending specialists to train Mongolia’s armed forces. Russia agreed to accept 15 Mongolian students every year on nuclear energy. It also agreed to increase the number of Mongolian students admitted to Russian institutes to 235. Russian academic centers will offer refresher courses to their Mongolian alumni. The prime ministers also signed a cooperation agreement between state-run Rosatom and the Mongolian Atomic Energy Department as well as agreements on culture and science.
Mr. Bayar said he was interested in forging closer ties between the Mongolian People’s Revolutionary Party, of which he is Chairman, and United Russia, which Mr. Putin heads.
Source: www.infomongol.com, Moscow Times
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Last Updated on Saturday, 21 March 2009 00:30 |
Home > General News > BCM Mongolia NewsWire Highlights: PARLIAMENT'S PRINCIPAL PRIORITY; DISAGREEMENTS ITEMIZED; DONORS OFFERS; RUSSIAN RELATIONSHIP.
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