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Tuesday, March 31, 2015

[BREAKING: Tax breakthrough at Oyu Tolgoi, "misunderstandings" on tax resolved -source]

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Tuesday, March 31, 2015

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Tax breakthrough at Rio Tinto's Mongolia copper mine -source

BY TERRENCE EDWARDS

March 31 (Reuters) - Rio Tinto and Mongolia have made a breakthrough in a tax dispute that has been among issues stalling development of the $6.5 billion Oyu Tolgoi copper mine, according to an official familiar with the government's position.

Disputes over costs and taxes have delayed an expansion of the mine that would extend its life beyond an estimated 15 years.

"Misunderstandings and issues surrounding the tax climates have been resolved," the official told Reuters, without specifying the terms of an agreement or what other issues needed to be resolved for the next underground phase of the project to go ahead.

"The parties are working towards agreeing on the commercial terms of the underground project," added the official, who asked not to be named because no announcement had been made yet.

A Rio Tinto spokesman and a spokesman for Mongolia's mining ministry declined to comment.

A spokesman for Rio's Turquoise Hill Resources, which owns 66 percent of the mine, also declined to comment and pointed to a statement last week that said Oyu Tolgoi was appealing a ruling by Mongolia's Tax Dispute Resolution Council to the country's Administrative Appellate Court.

Last year, Rio handed Mongolia a proposed memorandum of understanding that would provide consent to move forwards with the expansion project.

First, however, Rio and the government need to find consensus on issues including a $127 million tax claim against the company, that was later reduced to $30 million, and approval of a $4 billion project financing package.

Rio Tinto's chief executive Sam Walsh said in an interview with Reuters on Saturday that the proposal sent to the government in November was the miner's "best and final offer" and that it did not seek "special treatment" with the agreement.

Walsh added that there "are issues we're working through with the government, and I'm hopeful we'll bring to resolution."

He said the firm would be willing to go to international arbitration to resolve the tax dispute, but said it was not expected to affect current phase-one production at the mine.

In addition to the open-cut mine now in operation, the phase two project would see the construction of an underground mining complex.

Walsh visited the mine on Sunday to mark the one million tonnes of concentrate that had been shipped since its opening in 2013.

Walsh has said financing for the second phase will have to be renegotiated, especially in light of volatile copper prices.

Mongolia has been concerned about costs because it cannot receive dividends for its 34 percent stake in the mine until after investors first recoup their investment.

Construction on the underground complex is currently projected to cost $5.4 billion. 

Link to article

 

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Baga Toiruu, Chingeltei District 1
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Monday, March 30, 2015

3 Days Left Until Mongolia Economic Forum 2015, April 2-3, State Palace - ANNOUNCEMENT

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Monday, March 30, 2015

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10 Days Left Until Mongolia Economic Forum 2015, April 2-3, State Palace

Mongolia Economic Forum 2015, the forum is one of the largest and most prestigious in the country, an annual, politically independent event. During the 6th annual forum, the participants will discuss wide range of topics as a part of theme “BUILDING CREDIBILITY”. The aim of the forum is to provide the opportunity for nation-wide constructive debate and discussion on development policy options by engaging policy makers, researchers, business, public and international organizations.  

The participants also will have a unique opportunity to network with industries’ key contacts and to obtain vital information on legislation and policies on economic and business environment. 

Registration is open now.  Please follow the link to register: http://meforum.mn/register.

For inquiries regarding other opportunities please send an email to info@meforum.mn  or feel free to contact by phone +976-321051.

PRELIMINARY AGENDA (As of March 10)

Thursday, 2 April 2015

PLENARY SESSION:

9:30 – 11:00 Grand hall:          Current state of Macroeconomics of Mongolia 

BREAK OUT SESSIONS:

11:30  - 13:00 Grand hall:       Governance of public institutions and their cooperation
А Hall:              Credit Rating for Mongolia
B hall:               Information ethics /obligation/-Social acceptance

13:00 – 14:00 Grand hall:        Working Lunch –Yvo de Boer, General Director, Global Green Growth Institute 

14:00 – 15:30 Grand hall:        Role of state control and inspection and its impact on economy
                        А hall:              Sustainability and clarity of laws and regulations and its impact on business
                        B hall:               Financial market

16:00 – 17:30  Grand Hall:       FDI environment 
А hall:               Legal environment and current issues and difficulties of Mining Sector
B hall:               Development of national corporations

17:30  -18:00  Grand Hall:       Wrap up

Friday, 3 April 2015 

PLENARY SESSION

9:30 – 11:00    Grand Hall:       Development policy of Mongolia

BREAK OUT SESSIONS:

11:30 – 13:00  Grand hall:       Competitiveness, regional development and industrial policy
A hall:               Development of specialized organization for third-party resolution of disputes.
B hall:               Green Economy  – New climate economy

13:00 – 14:00  Grand hall:       Working Lunch- Enkhsaikhan M., Minister of Mongolia 

14:00 – 15:30  Grand hall:       EPA – How to implement it
А hall:               Human resource policy
B hall:               Population policy through taxation and social insurance policy

BREAK OUT SESSIONS:

16:00 – 17:30  Grand hall:       TBC
А hall:               Tourism industry
B hall:               Health sector management  

17:30-18:00 Grand Hall:          Wrap up

 

 

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Baga Toiruu, Chingeltei District 1
Ulaanbaatar 15170, Mongolia
Email: info@covermongolia.com
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Sunday, March 29, 2015

MetaStory: Creators of Netflix's Marco Polo Visit Mongolia

Writer, Director and Producer attends VIP screening of first two episodes, researches casting opportunity for Season 2

Ulaanbaatar, March 26, 2015 (MetaStory) : Creators of Netflix’s Marco Polo, a show Mongolians know well through actor Amarsaikhan B, arrived in Ulaanbaatar on March 24th to conduct casting and script research. On March 26th, creator-writer John Fusco, director Dan Minahan and producer Richard Sharkey attended a VIP Screening of the first two hour episodes in Hunnu mall. Prominent figures from the government, business, entertainment and arts attended the screening and listened to creator John Fusco’s vision of Marco Polo started when he visited Mongolia in 2002.

The event started with red carpet entrance with important business and entertainment figures walking in. Before the screening, there was a speech by Tumurbaatar Ya, Deputy Minister of Education, Culture and Sciences, Bat-Uul E, Mayor of UB and John Fusco, the creator-writer of the series.

“I am proud that Mongolia’s story is being told by a global media channel with millions of audience,” remarked Mayor Bat-Uul, “as this will greatly boost our tourism.” He said he was also glad that this spring was full of Hollywood visits, as the creators of Wolf Totem had visited UB last month.

John Fusco recounted his travel by Mongolia with then-guide Byambadorj A, who later became his cultural advisor when the show took on. He said he honored his friendship by naming one of his main characters after “Byambaa”.

Marco Polo, a 13th century Mongolian Chinese historical adventure series, which cast Actor Amaraa for Ariq Boke’s role in Season 1, piqued interest of Mongolians since it premiered last December on Netflix, an on-demand Internet streaming media company, which is unavailable in Mongolia.

John Fusco is well known for writing Hidalgo, Young Guns, the Forbidden Kingdom and several other Native American oriented films. He wrote the screenplay of Spirit: Stallion of the Cimarron in 2002, which was nominated for Oscar. Dan Minahan is known for directing several episodes of Six Feet Under, True Blood, Deadwood and Game of Thrones. He has been directing in TV for over 10 years. Richard Sharkey is known for working as Production Manager in The Fifth Estate, Brothers Bloom and Fantastic Four: Rise of the Silver Surfer. He has been in the filmmaking industry for 25 years and is known for working as Location Manager in Lord of the Rings trilogy, Star Wars: Episode I and Tomorrow Never Dies.

The creators are producing the Season 2 of the series, with shooting in Hungary, Malaysia and New Zealand, and casting about 60 Mongolians for supporting roles, background players, stunts and interns for the Hungary Unit, which starts this July for 17 weeks.

Actor “Amaraa”, who was organizing the event said, “Marco Polo team is giving a big opportunity to Mongolians. I have been part of their team and met many famous and acclaimed Hollywood artists.”

The supporting roles will require delivering English and Mongolian lines and bringing depth and context of Mongolian character to the show. The background players should be skillful of horse riding, archery, butchery, singing, playing traditional musical instruments, wrestling and making traditional handicraft. The supporting roles are in the process of being recruited and will be hired with all of their costs covered whereas the background players and interns will have wages and portion of their expenses covered, and the remainder has to be fundraised from Mongolia.

Narantsogt B, Chairman of MetaStory NGO, which received the rights to screen the episodes, said, “This is a once-in-a-lifetime opportunity. Netflix is a modern powerhouse and Marco Polo is a story deeply rooted in 13th century Mongolia. The creators truly care about illuminating and showcasing our history, especially with previously unknown angle of Mongolians being the rulers of Yuan Empire. We should partner with the Marco Polo team, work with them and learn from them as much as possible. The benefits that come from this, tourism and cultural awareness-wise, are more important than anything we’ve ever seen here in Mongolia.”
Contact:
Narantsogt Baatarkhuu
MetaStory NGO
Phone:(976) 8905-6627

Khasvuu Plaza, 14210
Ulaanbaatar, Mongolia
facebook.com/metastory

Appointment of Italy's First Honorary Consul in Ulaanbaatar, Mongolia

PRESS RELEASE

The Embassy of Italy to China and Mongolia is pleased to announce the appointment of Italy’s first Honorary Consul in Ulaanbaatar, competent for the whole Mongolia, Mr. Alfredo Savino.

Mr. Savino has been an active member of the Italian community in Ulaanbaatar for many years, having unofficially served as consular focal point for more than 3 years before being appointed Honoray Consul. He is also professor of Italian language and culture at the Mongolian National University.

On March 17th, on the occasion of Ambassador of Italy’s visit to Ulaanbaatar, a ceremony was held at the Best Western Tuushin Hotel to celebrate the positive development for Italian-Mongolian relations.

The Ambassador of Italy to China and Mongolia, Alberto Bradanini, said: “Given the current lack of a diplomatic mission, the Honorary Consul plays a critical role for Italy in Mongolia, helping to provide essential consular services to Italian citizens and to deliver our trade, investment, tourism and cultural messages to the Mongolian interlocutors and friends. Mr. Savino’s appointment enhances this network and we are delighted to have him formally in our team.”

On his appointment, Mr. Savino said: “It is a great honour to have the opportunity to connect Italy, where I was born, and Mongolia, where I have lived for the past 6 years. Both Countries have incredible natural beauties and a great history behind, and I want to think myself as a heir of the first Italian missionaries that travelled through these lands, thereby creating the first interactions between our two Countries.”

Mr. Savino is a native of Milan, in Northern Italy. He first arrived in Mongolia in 2008 and have lived in UB for more than 6 years.

Here his contact information:

Alfredo Savino

Honorary Consul of Italy

Bogd ar 15/a Bair 12 toot Ulaanbaatar, Mongolia

Cell: +976 95868948

Email: alfredosavino@gmail.com

Office Hours:

Mon-Wed-Fri from 15.00 to 19.00

Upon request, it is possible to schedule appointments at a different time.

 

COMUNICATO

Si rende noto che il Ministero degli Esteri ha istituito in Ulaanbaatar (Mongolia) un Consolato onorario, posto alle dipendenze dell'Ambasciata d'Italia in Pechino, con circoscrizione territoriale estesa all’intero territorio dello Stato.

Con decreto ministeriale 5013/436/BIS del 29.08.2014, pubblicato su Gazzetta Ufficiale del 20.10.2014, lo stesso Ministero degli Esteri ha nominato Console Onorario d’Italia in Ulaanbaatar il Sig. Alfredo Savino, già punto di contatto per le questioni consolari nel Paese.

Si fa presente che l’incarico e’ a titolo onorifico e gratuito e che le spese per il funzionamento dell’Ufficio consolare onorario sono a carico del titolare dell’Ufficio stesso, con l’eccezione dei rimborsi previsti per alcune categorie di spese, in particolare quelle postali, telegrafiche e telefoniche e quelle per sussidi ai connazionali.

Alfredo Savino

Console Onorario d’Italia

Bogd ar 15/a Bair 12 toot Ulaanbaatar, Mongolia

Cell: +86 95868948

Email: alfredosavino@gmail.com

Orari d'ufficio:

Lunedi  dalle 15.00 alle 19.00
Mercoledì  dalle 15.00 alle 19.00

Venerdi dalle 15.00 alle 19.00

E’ possibile, previa telefonata, prendere appuntamento in altro orario.

Wednesday, March 25, 2015

MetaStory: Official Screening of Marco Polo TV Series in Mongolia, 26 March

March 25 (MetaStory NGO) The creators of Marco Polo, American drama series is visiting Mongolia for official screening. Ten episodes of series is about 13th century Mongol Empire.  

Jon Fusco, writer of Hidalgo and Spirit: The Stallion of Cimarron, Dan Minahan, Director of Six Feet Under and other TV shows, and Richard Sharkey, Location Production Manager of Lord of the Rings trilogy, are coming to Ulaanbaatar for official screening for Mongolians. The screening will be held on 26th of March, at Hunnu Cinema. The screening will show the first two episodes of Marco Polo series.

One of the reason brought those creators to Ulaanbaatar is that the creators want more Mongolian talent to be involved in the upcoming 2nd season of Marco Polo that should be skillful of horse riding, archery, butchery, singing, playing traditional musical instruments, wrestling and making traditional handicraft.

There are 40-60 slots for people with characterful faces of young and old to represent Mongolians and provide depth and context to the scenes of one.

Mongolians are grateful for Netflix, for making “Marco Polo” a Netflix series, one of the most expensive ventures for Netflix; an estimate cost of 94 million USD was put into the project. "Marco Polo," is produced by The Weinstein Company, based on records of Marco Polo, 13th century explorer in Kublai Khan's court in Yuan dynasty with presenting Mongolian invasion in Asia. The series utilized Mongolian artists, from acting to score to be part of the series, and used Mongolian folk rock band’s music for the score. Additionally, one troupe is the recognizable Mongolian words can be heard throughout the series, which no other filmmaker really tried to do till Marco Polo. Lastly, the series describes Mongolian history and culture more authentically than any other foreign rendition of Mongolia.

[BREAKING: SouthGobi Loses Appeal Over Tax Case, Court Upholds ₮35.3 Billion Fine]

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Wednesday, March 25, 2015

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SouthGobi Loses Appeal Over Tax Case, Court Upholds 35.3 Billion Fine

March 25 (InfoMongolia) It was earlier (February 01, 2015) reported that three former employees of SouthGobi Sands LLC ("SGS"), the Turquoise Hill's Mongolian subsidiary, were found guilty of tax evasion by the panel of appointed judges from the Second District Criminal Court of Justice.

Sentences for the former employees were ranged from 5 years and 6 months to 5 years and 10 months of imprisonment in the correctional facilities of strict regimen in Mongolia, but later on February 26, 2015, the President of Mongolia Ts.Elbegdorj issued an official pardon to these three defendants, where fines of 1,000,000 MNT (approx. 510 USD) or the equivalent amount in assets for each defendant were issued. In addition, SGS has been found to be financially liable as a "civil defendant" for a penalty of 35.3 billion MNT (approx. 17.7 million USD as of March 20, 2015 rates).

Nevertheless, the Turquoise Hill firmly rejected the Court's verdict and therefore, it filed an appeal against the Court's verdict issued on February 18, 2015. The Company has been notified by the 10th Appeal Court for Criminal Case of Mongolia that the hearing for the appeal has been set for March 25, 2015 and today the SouthGobi Sands lost the appeal in the tax case heard by Mongolia's Court of Appeal.

Regarding to this ongoings, Mongolia's "Udriin Sonin" (Daily News) newspaper recently interviewed Mongolian Metals & Mining analyst Erdenedalai CHOINKHOR aka Dale Choi, who operates in investment industry between Ulaanbaatar and London and is known to the market as Dale Choi, Founder of Independent Mongolian Metals & Mining Research.

In his interview, Dale Choi stressed, "Deterioration of foreign direct investment (FDI) in Mongolia is directly reflected and closely related to performance of companies operating in Mongolia and listed in international exchanges, specifically one can say that their stock's prices are market barometer for investment condition of Mongolia. Specifically, deterioration is reflected in collapse of prices of stocks of these companies. I want to illustrate relationship between collapse in FDI and stock price on shocking example of one company (SGS).

The company is called SouthGobi Sands, the SouthGobi Resources' wholly-owned subsidiary. In the beginning, it was operating very successfully and now it is in very difficult condition. When the company did its IPO on Hong Kong Stock Exchange in 2010 it valued itself at 17 Canadian dollars per share or 2.73 billion Canadian dollars in total and raised 459 million Canadian dollars in cash. Foreign institutional investors were optimistic on future of Mongolian mining and expected it to grow. South Gobi exported 4 million tons of coal to China in 2011 and Mongolia was leading country which supplied coal to China, even ahead of Australia. However, starting with last election cycle and because of regrettable co-incidence today's tragic situation has been realized.

However, it should not be overstatement that it is all Mongolia's fault. Factors such as collapse of coal market and decline in coal price affected the company. However, the biggest factors are laws and regulations. The shareholder of company, Turquoise Hill Resources, announced financial agreement before 2012 elections that it will sell 56 per cent of the company to China's Chalco Company. At that time populists have treated the issue emotionally that Chinese company is buying and this have led to initiation and approval of law to limit foreign investment. At that time Turquoise Hill Resources owned 56 per cent of South Gobi and valued each share at 8.48 Canadian dollars to raise 898 million dollars from the sale. In another words, the buyer and seller both have valued the company at 1.54 billion Canadian dollars. Now, in 2015, Turquoise Hill Resources is selling its last remaining shares in the company to a Chinese company at 35 Canadian cents per share valuing company at 77 million Canadian dollars and raising 17 million Canadian dollars. In summary, South Gobi, which was worth 1.54 billion in 2012, is now worth 77 million or there is 95% destruction in shareholder value. Wealth of investors, who invested in Mongolia, disappeared by 95%. This closely resembles collapse in FDI from 4.45 billion USD in 2012 to 506 million in 2014 or by 89%.

Shares of SouthGobi up to recently have declined all the way to 34 cents per share. However, curiously last month shares revived till 1.06 dollar per share. As I understand, market has optimistic expectation of revival of company's business. Currently, the company has total of 219 million shares outstanding and market capitalization of 235 million dollars.

Finally, The Company itself has reported that it might go bankrupt. At the same time, foreign investors are likely to see that Mongolian authorities have, in the end, bankrupted the company. This is very risky issue.

As I am bystander and observer, it is not proper for me to directly instruct and say do this and that on how to solve the problem.

However, from financial analyst point of view, if this case can be resolved exactly according to law and due process it will be very important positive message to foreign investors".

Moreover, Turquoise Hill Resources Ltd., which owns 47.9% of the SouthGobi Resources (Company), is to announce the Company's fourth quarter and full year 2014 financial results on March 30, 2015.

Turquoise Hill has advised the Company that it will include select financial information for the 11 months ended November 30, 2014 including Revenue and Cost of Sales and additional information for the 12 months ended December 31, 2014 as it relates to their investment in the Company.

Link to article

 

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Baga Toiruu, Chingeltei District 1
Ulaanbaatar 15170, Mongolia
Email: info@covermongolia.com
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Monday, March 23, 2015

10 Days Left Until Mongolia Economic Forum 2015, April 2-3, State Palace - ANNOUNCEMENT

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Monday, March 23, 2015

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10 Days Left Until Mongolia Economic Forum 2015, April 2-3, State Palace

Mongolia Economic Forum 2015, the forum is one of the largest and most prestigious in the country, an annual, politically independent event. During the 6th annual forum, the participants will discuss wide range of topics as a part of theme “BUILDING CREDIBILITY”. The aim of the forum is to provide the opportunity for nation-wide constructive debate and discussion on development policy options by engaging policy makers, researchers, business, public and international organizations.  

The participants also will have a unique opportunity to network with industries’ key contacts and to obtain vital information on legislation and policies on economic and business environment. 

Registration is open now.  Please follow the link to register: http://meforum.mn/register.

For inquiries regarding other opportunities please send an email to info@meforum.mn  or feel free to contact by phone +976-321051.

PRELIMINARY AGENDA (As of March 10)

Thursday, 2 April 2015

PLENARY SESSION:

9:30 – 11:00 Grand hall:          Current state of Macroeconomics of Mongolia 

BREAK OUT SESSIONS:

11:30  - 13:00 Grand hall:       Governance of public institutions and their cooperation
А Hall:              Credit Rating for Mongolia
B hall:               Information ethics /obligation/-Social acceptance

13:00 – 14:00 Grand hall:        Working Lunch –Yvo de Boer, General Director, Global Green Growth Institute 

14:00 – 15:30 Grand hall:        Role of state control and inspection and its impact on economy
                        А hall:              Sustainability and clarity of laws and regulations and its impact on business
                        B hall:               Financial market

16:00 – 17:30  Grand Hall:       FDI environment 
А hall:               Legal environment and current issues and difficulties of Mining Sector
B hall:               Development of national corporations

17:30  -18:00  Grand Hall:       Wrap up

Friday, 3 April 2015 

PLENARY SESSION

9:30 – 11:00    Grand Hall:       Development policy of Mongolia

BREAK OUT SESSIONS:

11:30 – 13:00  Grand hall:       Competitiveness, regional development and industrial policy
A hall:               Development of specialized organization for third-party resolution of disputes.
B hall:               Green Economy  – New climate economy

13:00 – 14:00  Grand hall:       Working Lunch- Enkhsaikhan M., Minister of Mongolia 

14:00 – 15:30  Grand hall:       EPA – How to implement it
А hall:               Human resource policy
B hall:               Population policy through taxation and social insurance policy

BREAK OUT SESSIONS:

16:00 – 17:30  Grand hall:       TBC
А hall:               Tourism industry
B hall:               Health sector management  

17:30-18:00 Grand Hall:          Wrap up

 

 

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6th Floor, NTN Tower
Baga Toiruu, Chingeltei District 1
Ulaanbaatar 15170, Mongolia
Email: info@covermongolia.com
P Please consider the environment before printing this e-mail.