Eurasia Capital in Press
By: Geraldine Tan
Assistant Producer, CNBC Asia Pacific
The Mongolian mining industry, which is to benefit from China's huge appetite for resources, is a sector to bet on. One fund manager suggests investing in mining plays that are listed internationally, but have assets in Mongolia.
"Mongolia will emerge as one of the most significant resource producers in Asia," Alisher Ali, managing partner of Silk Road Management told CNBC.
By Michael Kohn
ULAN BATOR | Wed Jul 6, 2011 7:33am EDT
(Reuters) - Forced to sell his animals and flee his dried-up lands, former herder Sainbuyangiin Tsagaan-Ovgon is now hoping mining profits will let him return to his native Gobi.
The 72-year old, who admits he knows nothing about stocks, will soon receive 536 shares in the Mongolian company that owns the world's largest coking coal deposit.
The potential windfall is part of an experiment to allow Mongolians to share directly in wealth generated by mining at Tavan Tolgoi, the hotly contested coal project.
"These shares will be a big help to herders like myself," said Tsagaan-Ovgon, who sported a traditional silk robe and white fedora as he mingled with the crowd on Ulan Bator's Sukhbaatar Square.
"We can plant fruit, vegetables and trees. In the city people can use their shares to start small businesses, they can package jam or make sweaters and then build their own brand names."
Erdenes Tavan Tolgoi's international IPO could raise up to $5 billion, a vast sum for one of the poorest countries in Asia. Ten percent of shares are reserved for Mongolian citizens, and another 10 percent is to be split among Mongolian companies. Some lawmakers support giving those shares to citizens as well.
The value of each Mongolian's shares could be around $300, Mongolian officials have estimated, a substantial amount in a country where the average GDP per capita stands at $1,573.
The rights to develop the site are expected to go to a consortium led by Chinese coal giant Shenhua Energy Co Ltd (1088.HK), U.S. coal miner Peabody Energy Corp (BTU.N) and a Russian consortium. Read more
Bloomberg: By Yuriy Humber and Daniel Ten Kate
Mongolia’s aim of quadrupling its rail network will send coal, copper and rare earths to nations such as Japan and South Korea under a plan to reduce dependence on the Chinese market and boost economic development. The landlocked nation’s drive to lay 5,700 kilometers (3,542 miles) of track across the country and to Russia’s Far Eastern ports stands to benefit such companies as Australia- listed Aspire Mining Ltd. and Canada’s Prophecy Resource Corp., said Richard Harris, chief executive officer of Hong Kong-based Quam Asset Management. His firm has raised $20 million for a Mongolia-focused fund that will start investing in a few months. “The missing link in the Mongolian gold rush now is transportation infrastructure,” said Roland Nash, who helps manage about $150 million of Russian stocks at Moscow-based hedge fund Verno Investment Management Ltd. “The key for the Mongolians is to attract investments from as many different countries as possible to lessen their dependence on China.” A mining boom in the world’s most sparsely populated nation promises the greatest influx of wealth for Mongolia since Genghis Khan conquered much of the known world in the 13th century. Mongolia’s benchmark MSE Top 20 Index is the world’s best performer in the past 12 months and its currency, the tugrik, the fifth-biggest gainer against the dollar. Economic growth may surge to 23 percent in 2013, more than twice the forecast expansion in China, as large mining projects begin production, the International Monetary Fund says. Read more
January 27, 2011 4:06 pm
The world’s best-performing stock market last year was, of course, in an emerging economy. But rather than a steel-and-glass tower rising above a heaving megalopolis, it was in a cheerful pink former children’s cinema in Ulan Bator.
This is the Mongolian Stock Exchange, where share prices climbed 121 per cent in local currency terms in 2010 – more than any other market tracked by beyondbrics – and have jumped another 50 per cent this year.
The exchange has 340 or so listed companies, 45 brokers, and sees turnover of about $200,000 on a fast day. Mongolia itself has vast untapped reserves of coal, copper and gold, and because the exchange is open to foreign investment – unlike those in neighboring China – the Soviet-styled cinema house has become a focal point for investors betting that China’s growth will continue to fuel a commodities supercycle throughout the region. Read more
By Joseph Chaney and David Stanway ULAN BATOR, Oct 12 (Reuters) -
A feeling of expectation hung in the air early one September morning as a group of bankers emerged from the aging, Soviet-era chic of Ulan Bator's Chinggis Khaan Hotel en route to a two-hour flight deep into the Gobi Desert, which blankets Mongolia's southern frontier. Their destination, about 80 km (50 miles) from China's northern border, was Oyu Tolgoi, which bankers, geologists, journalists, and the mine's main developer Ivanhoe Mines Ltd routinely describe as one of the world's largest untapped copper and gold deposits. Ivanhoe, led by the colourful American-born billionaire Robert Friedland, owns 66 percent of the mine, and the Mongolian government the rest. "This is going to be among the top five mines in size around the world," Keith Marshall, president and CEO of Oyu Tolgoi LLC told a conference in Mongolia's capital, Ulan Bator. "The only way to describe it is that it is just an awesome deposit. Read more
Mongolia, a resource-rich country positioned between Russia and China, was hit hard by the recent global economic downturn as prices for the major export commodities, in particular copper, plunged substantially. Income from mineral exports declined significantly, resulting in a widening budget deficit, reduced foreign exchange reserves and weaker national currency. These factors, combined with domestic pressure, pushed the Mongolian government to speed up the signing of big mining deals – in particular, Ivanhoe Mines Ltd’s flagship Oyu Tolgoi copper-gold project – and work towards bringing substantial foreign investment into the country. This saw the government, Ivanhoe Mines and its project partner Rio Tinto sign the long-awaited investment agreement on October 6. Earlier in the year, the Mongolian parliament decided to repeal the controversial 68% windfall tax on copper and gold, much to the delight of the investment community, clearing the final hurdle for the Oyu Tolgoi investment agreement. The cash-strapped, yet resource-abundant, nation is likely to launch multi-billion-dollar resource projects in the next few years, which will create investment opportunities for both strategic and portfolio investors. It should also stimulate one of the fastest rates of economic growth in the world...
South China Morning Post
Aug 09, 2010
Watch out, Hong Kong. Another Asian stock exchange has big plans to start snapping at your heels.
It is not Singapore, Thailand or even Malaysia -but Mongolia.
The undeveloped country's stock exchange may be the world's smallest national share trading platform, with a total market capitalisation of only US693m dollars.
It is housed in a bright-pink former children's cinema in Ulan Bator and open for trading between 11am and noon. Unsurprisingly, hardly any global money managers, except a few specialist hedge funds, want to use it.
But this pint-sized bourse is determined to move into the modern age. Read more
Hong Kong listings of Mongolian-focused companies could raise up to US$3 billion within the next three years, according to Eurasia Capital.
Mongolian-focused companies are targeting Hong Kong’s IPO market for up to US$3 billion over the next three years, according to investment banking boutique Eurasia Capital. SouthGobi Energy Resources, which owns Mongolian resources, created history in January this year when it became the first foreign company to list shares on the Hong Kong stock exchange. Rivals are now queuing up to follow suit. Read more
Why do Asian investors find Mongolian story attractive?
Growing demand for natural resources in Asia, primarily in fast growing China, and geographical proximity of resource-rich Mongolia to the world’s largest consumer of many industrial commodities is particularly an attractive destination for Asian investors, including from China (Hong Kong), Japan and South Korea. Mongolia is a home for world-class mineral resources. It holds the second-largest copper and the third-largest coal reserves in the world. It also has significant uranium and rare earth metal resources, as well as significant deposits of gold and zinc. Official estimates suggest that there are 6,000 known deposits of ore minerals and 15 of them are strategic deposits. It is estimated that 10 largest strategic deposits of Mongolia worth a staggering US$1.3trn against the currently modest GDP of US$4.2bn. Read more
By John Duce
June 12 (Bloomberg) -- Mongolia plans to sell 30 percent of a company controlling the Tavan Tolgoi coking coal deposit in share sales to help fund $1.5 billion of initial development cost, the mining minister said.
The share offerings may take place overseas or in Mongolia and a government-owned company will retain a 40 percent stake, Minister for Minerals and Energy Dashdorj Zorigt said in a telephone interview, after a parliamentary vote yesterday. The rest will be offered to local businesses and the public, he said, without giving details. Read more
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Metals & Mining
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