 BCM Mongolia Newswire Highlights: Mineral Deposits Priority; Uranium Mines; Central Bank President Resigns; Presidential Hopefuls Friday, January 9, 2009 NEWS HIGHLIGHTS: Business: Work on mining deposits a priority, says Bayar; Marubeni obtains first rights to three uranium mines; Companies chosen for oil exploration; Erdenet output to go to Russia from now on; PM urges banks to be patient with defaulting herders; All board members of Anod Bank under police scanner; American Express chooses Golomt Bank as partner;SouthGobi sells its metals division to Ivanhoe; Malaysian firm scraps deal to buy coal mines in Mongolia; 25 companies chosen for ADB loan to help create national brands; S. Korea signs MOU with Mongolia on methane. Economy: L. Purevdorj appointed Central Bank President; “I quit to uphold the Bank’s independence,” says Batsukh; Expected fiscal deterioration led to rating agency’s decision on Mongolia; China and Mongolia agree to settle trade accounts in RMB, if desired; Plans scrapped for budget airline to Mongolia, among other places; Mongolia to import more fuel from Kazakhstan; Mongolia to buy Chinese fruits worth USD140 million; US agency offers Mongolia funds to curb methane emission; Czech doors closed on Mongolian workers; China gifts building to MNCCI. Politics: Bayar says he will not run for President; President noncommittal about seeking another term; Speculation rife on Presidential hopefuls; Ministers draw up plans to revive Mongolia-Russia military ties; Government approves 42 agencies, 5 of them new; New vice ministers appointed; MPRP elects new General Secretary; Compensation for July 1 losses a complex issue: Nyamdorj; MP unhappy expenses do not fall; Ulaanbaatar mayor gets four deputies. WORK ON MINING DEPOSITS A PRIORITY, SAYS BAYAR At a meeting with journalists as part of the program to mark 100 days of the government, members of the Cabinet restated their commitment to industrialization, stabilizing the banking system, and getting the economy going. The Prime Minister said, “Our two parties’ decision to join hands in forming a government has been proved right. The unity is needed to tackle substantial economic and social problems. Our present priority is to start work on the two large mining deposits. Preliminary negotiations are under way and we should be prepared with our offer before February 1.” Mr. Bayar referred to the difficulties posed by the volatile economic situation worldwide, and hoped foreign investors would continue to be interested in Mongolia’s mineral resources. Source: en.News.mn MARUBENI OBTAINS FIRST RIGHTS TO THREE URANIUM MINES Marubeni Corp, Japan's fifth-biggest trading company, has obtained first rights to conduct feasibility studies in Mongolian uranium mines. A company spokesman has said the success of Marubeni, set to become the first Japanese firm to acquire stakes in uranium mines in Mongolia, comes at a time when demand for the nuclear fuel is expected to rise as China goes through a nuclear building spree to boost clean energy use. Marubeni aims to obtain stakes in 2009 in three mines in Mongolia, the spokesman said, including Dornod and Gurvanbulag, developed by Canadian firms Khan Resources Inc. and Western Prospector. The company aims to start production in 2012, he said. It is unclear how much Marubeni will pay to hold stakes in the three mines, as well as for their development costs. Mongolia, whose uranium mines were abandoned after the collapse of the Soviet Union, sits on about 2 percent of the world's uranium reserves. Source: thomsonreuters.com
"I QUIT TO UPHOLD THE BANK’S INDEPENDENCE,” SAYS BATSUKH
The resignation of Mr. A.Batsukh, President of the Central Bank, submitted to Parliament on the last day of the year, caught everybody unawares and caused widespread confusion in the political world. Another person to submit his resignation was Mr. D. Bayarsaikhan, head of the Financial Regulatory Committee. Neither would reveal what prompted their decision but it is believed that it was in reaction to criticism of their actions relating to the scandal in Anod Bank in particular, and financial instability in the Mongolian economy in general. A Mongolian newspaper, Undesnii Shuudan, quoted Mr. Batsukh as saying that he had decided on the step “to maintain the dignity of his office”. He wanted “to uphold the independence” of the Central Bank which was not “meant to become a tool of any political party or individual”. He said, “We did a lot for the economic stability of Mongolia, but some people do not see it that way and present facts exactly opposite of what we do. Even the state did not support us.” In a subsequent conversation with a journalist from Odriin Sonin, Mr. Batsukh was more forthcoming and said he had been pained and surprised to find that “some people blamed me for anything that went wrong in the economy” all through the two years that he was head of the Central Bank. He felt there was a deliberate and sustained effort to misguide the public about the Bank’s purpose, role, activity and policy. Admitting that an inflation rate of 34 percent was unacceptable, he wondered if anybody had “given a thought to why this had happened”, instead of laying the blame at the Central Bank’s door. He said, “It has taken our politicians one year to understand the connection between unproductive expenses and inflation. They have also realized that uncontrolled lending and unchecked money supply were major factors behind the inflation. But I doubt how much our politicians really understand. How could they have adopted a budget with a deficit of MNT395 billion?” Pressed to answer what exactly had led to his offer of resignation, Mr. Batsukh said, “When I found that some people wanted to trace every bad development to me and the Central Bank, I decided to help the Bank retain its reputation by removing myself from it. I do not want the people to lose their trust in an institution because of sustained misinformation. I decided to resign to put an end to that.” Source: Ardiin Erkh, Niigmiin toli SPECULATION RIFE ON PRESIDENTIAL HOPEFULS The presidential election promises to be the biggest event in Mongolian politics in 2009. Only political parties represented in Parliament are allowed to put up a candidate, and speculation is already rife on who will be nominated by which party. Prime Minister S. Bayar has been categorical in disclaiming any interest in being the MPRP candidate, increasing the chances of the party choosing President N.Enkhbayar for a second term. Mr. N.Bagabandi, who served two successive terms as President from 1997 to 2005 and has since kept himself in the public eye as a contributor to a newspaper, is also known to be not averse to standing again. It is almost certain that the DP will choose between Mr. Ts. Elbegdorj and Mr. E. Bat-Uul. Civil Will Party leader S. Oyun has announced she will not be a candidate. If a Civil Movement coalition candidate is among those finally declared winners from the 25th constituency, it will also have a right to put up a candidate. In that case, the “pro-democracy” votes will be split, improving the prospects of the MPRP nominee. Source: www.news.m
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