Written in Mongolia and read by professionals
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Wednesday, July 6, 2011

Mongolia Briefing is a magazine and daily news service about doing business in Mongolia. We cover topics relating to the Mongolian economy, the market in Mongolia, foreign direct investment and Mongolian law and tax. It is written in-house by the foreign investment professionals at Dezan Shira & Associates

Industry Reports

Samsung C&T Corp to Build Railway Connecting Tavan Tolgoi with Chinese Border

By Elena Fehrbach

May 21 – South Korean Samsung C&T Corporation won the tender and signed the agreement for the construction of a 217 kilometer railway that will connect Tavan Tolgoi coking coal deposit with the Mongolia-China border.

The project also assumes construction of the relevant infrastructure, such as rolling stock depot. Samsung will be sole contractor to implement the project. Estimated cost of the project is US$483 million. Continue reading

Posted in Business, Mining, Shipping & Logistics | Leave a comment

Terms for Low Interest Housing Loans Approved

By Elena Fehrbach

May 5 – The Government of Mongolia has approved 8 percent interest rate for long- term housing loans. The duration of the loan can be up to 20 years for the purchase of both old and new houses and apartments with the total area not more than 80 square meters. The compulsory condition is the provision of deposit in the amount of 10 to 30 percent of the purchase amount. Continue reading

Posted in Business, Politics, Real Estate | Leave a comment

Fuel Prices in Mongolia Expected to Stabilize

By Elena Fehrbach

May. 2 – The Government of Mongolia is expecting the fuel prices in Mongolia to stabilize due to diversification in the quantity of fuel suppliers. The current situation in Mongolia is almost 100 percent fuel dependence from Rosneft, one of the key fuel producers in Russia. Such direct dependence causes unexpected fluctuations in fuel price due to company’s corporate and regional conditions. The Deputy Minister of Mongolia is discussing the amendment to the fuel purchase agreement allowing Mongolia to buy fuel from Rosneft based on international market prices. Continue reading

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Potential of Oil Shale in Mongolia

By Elena Fehrbach

Apr. 18 – Oil shale in Mongolia has been on the radar of technical experts and investors for a number of years already, but the actual potential of oil shale development in Mongolia has never been widely discussed. Preliminary “greenfield” estimates assume 800 billion tonnes of oil shale are available in Mongolia. The preliminary estimate was completed in 1990 based on exploration of about 19 per cent outlined oil shale area. Though the final amount of oil shale is not defined yet, it is clearly a promising opportunity for Mongolia to establish a fuel independence. Continue reading

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Proposal to Develop Tavan Tolgoi Supported by Government

By Elena Fehrbach

Apr. 15 – Ch. Saikhanbileg, Minister of the Cabinet of Mongolia met Francisco J. Sanchez, the Under Secretary for International Trade of the U.S. Department of Commerce to discuss economic and trade cooperation between 2 countries. During the meeting, the Minister noted that Mongolia is willing to widen the economic relationship between Mongolia and USA. One of the important steps taken by the Ministry recently is introduction of the amended Strategic Foreign Investment Law creating encouraging investment opportunities for private companies. Continue reading

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Majority Stake in Sainshand Industrial Park to be Foreign

By Elena Fehrbach

Apr. 8 – The Government of Mongolia has approved the investment structure for proposed Sainshand Industrial Complex, where 66 percent of investment is expected to be foreign. The preliminary feasibility study conducted by Bechtel Group Inc., a civil engineering company from the USA, shows that more than 10 billion USA investment may be required in total to fund the project, out of which 4 billion USD required to build the power distribution system and waste storage facility. The Development Bank of Mongolia is currently deciding on lending of approximately 10 million USD needed to cover the technical studies preparation. Continue reading

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Tavan Tolgoi Power Plant to Increase Capacity

By Elena Fehrbach

Apr. 2 – The capacity of the planned power plant at Tavan Tolgoi coal mine will be increased from previously planned 300 MW to 450 MW. According to the Ministry of Energy, the capacity of the future plant should meet the needs of Tavan Tolgoi coal mine and help Oyu Tolgoi with power supply. Power plant will be fueled by the coal from Tavan Tolgoi. Continue reading

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New Mineral Law proposed by the Mongolian Government

By Elena Fehrbach

Mar. 1 – Legal reform is continuing in Mongolia. Release of the new Strategic Foreign Investment Law draft in May 2012 is followed by release of the new Minerals Law draft. Minerals Law is truly considered to be one of the most important legal documents in Mongolia where 90% of all exports is occupied by different mineral commodities.

The current Minerals Law was adopted in 2006. The next step was taken on 17 June 2010 when the Government has issued the moratorium on issuance of the new exploration licenses. The moratorium was supposed to be in place until 31 December 2012, the date when the new Mineral Law was assumed to be adopted. Recently conducted plenary session has extended the moratorium term until the new Minerals Law is adopted. The current status of new exploration licenses issuing keeps local and foreign miners concerned about the opportunity to extend the portfolio of licenses by issuing and/or tender process, as the date of adoption of the new Minerals Law is not defined yet. Continue reading

Posted in Legal and Regulatory, Mining | Leave a comment

Dezan Shira & Associates provide a range of services for companies looking to undertake foreign direct investment into Asia, These include corporate establishment, accounting, tax, payroll, audit and due diligence. To learn more about the firm, please contact one of our specialists at mongolia@dezshira.com, download our corporate brochure or visit at us www.dezshira.com

Dezan Shira & Associates, Twenty years of Excellence

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