By Elena Fehrbach
Moody’s Investors Service has changed the outlook on Mongolia’s government bond from stable to negative. At the same time, Moody’s affirmed government’s issuer and bond B1 ratings, unsecured MNT rating at (P)B1 and the issuer’s short-term Not Prime issuer rating.
As part of the rating action, Moody’s has changed the outlook on the government-owned bond raised by the Development Bank of Mongolia (DBM) from stable to negative and affirmed DBM’s senior unsecured B1 rating and its senior unsecured MNT (P)B1 rating. DBM’s debt obligations justify rating at the same level as the government of Mongolia as DBM’s payment obligations carry a credit guarantee of the government. Continue reading
By Elena Fehrbach
The Government of Mongolia has issued new Resolutions Nos. 88 and 89 on the definition and calculation of mineral royalties.
Basis for the royalty calculation and general terms:
- The royalties on coal exports will be based on the export sale’s contract price of the coal mine owner. The previous royalty was based on the buying Chinese market price.
- The mineral royalties shall be paid within 21 days after the commodities sale’s completion. In the previous version of the regulation, the royalty was supposed to be paid within the next quarter from the sales date. Continue reading
By Elena Fehrbach
Oct. 26 – According to Mongolian legislation, the following types of legal entities can be incorporated in Mongolia:
- Limited Liability Company (LLC)
- Joint Stock Company (JSC)
- Representative Office (RO)
JSCs may be created in the form of an “Open” JSC or a “Closed” JSC. An Open JSC is a legal entity where shareholders’ invested capital is divided into shares and registered at the Mongolian Stock Exchange. Shares are traded by the public without regard to preemptive rights of shareholders. Continue reading
By Elena Fehrbach
Sept. 24 – Mongolia has a substantial legal framework regulating local and foreign activities established in the country. The most important regulating vehicles are the Company Law, the Civil Code and the Law on Strategic Foreign Investment. Continue reading
Jul. 7 – We welcome new and existing readers to our new Mongolia Briefing web site. Founded on the back of increased interest in the economic and business development of the country, we aim this site to be a major source of updated Mongolian commercial news, foreign investment and legal, regulatory, tax and financial updates about this exciting new emerging Asian economy. With a GDP growth of 12 percent expected this year, Mongolia is already outstripping most Asian nations in GDP development, and with that figure expected to reach 30 percent by 2013, the changes that will happen in this country will both be rapid and far reaching. It is our goal to capture these and to provide timely, accurate and interesting intelligence about the country and its opportunities to the global business community. Continue reading
Jun. 9 – Mongolian President Tsakhiagiin Elbegdorj has been in Russia recently meeting with Russian President Dmitry Medvedev and Prime Minister Vladimir Putin. One of the key issues at stake is the development of an additional 6,000 kilometers of rail track, a requirement that has been put out to tender but is increasingly looking at going to Russia.
Russia’s railway monopoly OAO Russian Railways is prepared to invest US$1.5 billion towards this train network to help boost trade between the two countries, according to CEO Vladimir Yakunin. Continue reading
Jun. 3 – Every Mongolian has just been given shares in the Erdenes-Tavan Tolgoi IPO, as was suggested would happen by us earlier in the year. The offering, in a coal mining operation commonly referred to as “TT” (for Tavan Tolgoi), is designed to ensure every Mongolian national shares in the new wealth being created through the development of the country’s mining sector.
Income from the global mining sector is pouring into Mongolia, lifting the current rate of GDP growth to 12 percent this year with predictions of it rising to 30 percent by 2015. Mongolia’s stock exchange, which has recently entered into a partnership with the London Stock Exchange, is soaring to previously unheard of highs, while the Mongolian national currency, the togrog, is the world’s fastest appreciating currency unit. That is giving rise to concerns about inflation and fears that traditional industries such as agriculture and cashmere could face problems as costs rise in a competitive market. Continue reading
Chinese Inner Mongolia and the Mongolian State are separate entities, but confusion remains as to the differences.
Op-Ed Commentary: Chris Devonshire-Ellis
ULAANBAATAR, May 30 – Recent reports in the press over ethnic tensions “in Mongolia” demonstrate there is still much to be understood about the region. Apparently, an ethnic Mongolian herder was killed by a Han Chinese lorry driver in an accident that has sparked unrest in the Chinese autonomous region of Inner Mongolia. Meanwhile, Mongolia itself remains an independent country and is utterly unaffected by the incident in China. Such reports however, tend to demonstrate poor standards of journalism, a lack of appreciation of the dynamics between the two areas, and a disregard for historical fact. That the incident was widely reported in headlines as having taken place in “Mongolia” blurs distinctions and is indicative of lazy journalism. In this article I aim to describe the differences between the two as well as shed some light on the background to the incident in question. Continue reading