Monday, April 12, 2010

"Mining hordes invade Mongolia, the 'Kuwait of Central Asia'" and "Hong Kong a good market for Mongolian IPOs"

A year ago we posted "With a Name Like Inner Mongolia Baotou Steel Rare-Earth Hi-Tech Co., it has to be good ( 600111:Shanghai)":

In December 2007 I wrote:

How the heck did I miss Mongolia Energy Co. Ltd.?...
The question has haunted me to this day.
[you really need to get out more -ed]

MEco was the number two stock in the Bloomberg Worldwide Index that year, up 5911.17%.
I vowed that I "will study and learn, and one day my chance will come."
[ummm, wasn't that Lincoln?]

So when a reader emailed in response to this morning's "China tightens grip on rare earths":
"How do I participate?"
I had the [a -ed] answer.

IMBSREHTco's parent company has world’s largest rare earths deposits.
[the first letters of the acronym are IMBS, tee hee -ed]...

...Here's the extent of my knowledge of Mongolia's fashion scene:

Nomadic chic hairdo
Reconstructed by M.Chimeddorj

From the Mongolia Today article:

Best hairdo, Hun style

Punks, rocks, skin heads... over last decades the world has seen all possible shapes and forms of human haircut. What was in fashion among steppe nomads some 2,000 years ago?

Prof. Bayar's research sheds light into the best hairdos of the past. [ full story ]
Be careful, do your own research. And email if you have editing/trading aspirations.
(requirements/renumeration can be found at "Help Wanted: Trader/Blogger")
[wha? -ed]
Most of our posts have focused on the Rare Earth minerals found in China's Inner Mongolia rather than on Mongolia itself.
Well here we go! First up the Telegraph:
If there was a competition to find the ugliest city on Earth, then the Mongolian capital of Ulan Bator would be the leading contender for the title. The combination of grim, Soviet-style concrete high-rises, rambling slum-shanties and towering coal-fired power plants belching out smoke over the city reeks of the depression and decay that was a legacy of decades of communist rule.

But look more closely and it is clear that change is afoot in this mineral-rich former Soviet acolyte which is on the cusp of a mining boom that has led investors to describe Mongolia as the "Kuwait of Central Asia". The augurs of new wealth are already visible on Ulan Bator's dowdy streets – luxury brands such as Louis Vuitton and Armani have opened branches in the past year, catering to customers in Range Rovers and Porsche Cayennes. And in the city's Grand Khaan Irish Pub the vanguard of the coming investment boom can be found quaffing pints and discussing deals – suited diplomats and investment bankers rubbing shoulders with rough-necked mining engineers and their suspiciously pretty local "girlfriends".

For decades the global resources industry has had its eye on Mongolia's huge mineral deposits – it has world-class reserves of gold, copper, coal, fluorspar, silver, uranium and tungsten – but has been deterred by a combination of corruption and political instability.

That all changed last year, however, with the election of a pro-business Democratic Party government that is now, albeit cautiously, welcoming foreign investors to partake in a boom that the government hopes will triple the nation's GDP in the next decade.

The catalyst for investors was a decision last August by Mongolia's new president, Elbegdorj Tsakhia, to scrap a punitive 68pc windfall tax on copper and gold profits imposed in 2005 by the previous communist-leaning government. Within months the government had also finalised a deal with the Canadian-listed Ivanhoe Mines to develop the $5bn (£3.3bn) Oyu Tolgoi (OT) copper and gold reserve, a Manhattan-sized deposit which will take 60 years to exhaust.

The scale of Mongolia's mineral reserves is mind-boggling, with 15 more OT-sized strategic reserves, according to a research note by Eurasia Capital Management.

The rapid conclusion of the OT deal, which had dragged on for six years under previous governments, has provoked a flurry of activity from both private equity and Chinese, Russian and Singaporean sovereign wealth funds. Mongolia wants to attract $25bn in investment over the next five years to build the roads, railways and new towns needed to exploit its natural wealth.

Market momentum gathered further force this January when Canadian-listed SouthGobi Energy Resources, which mines coal in Mongolia just across the border with China, raised $394m in a secondary listing in Hong Kong. The company had already attracted a $500m investment from China's sovereign wealth fund, the China Investment Corporation (CIC), which itself put $700m into Iron Mining International, a Hong Kong-based mining company with interests in Mongolia.

Masa Igata, CEO of Frontier Securities, which advises Mongolian businesses seeking to raise funds on the international markets, says he expects at least "three or four" Mongolian-based businesses to follow SouthGobi's lead in the next 12 months....MORE

From Reuters (HK) via Mineweb:

Mongolia's prime minister said the Asian bourse is a natural choice for Mongolian companies looking to list

Hong Kong is a natural choice for Mongolian enterprises to go public as the resources-rich country develops its vast untapped mineral wealth, the Mongolian prime minister said on Monday.

Mongolia is attracting attention from global investors after it sealed a deal in October with Ivanhoe Mines (IVN.TO: Quote) and Rio Tinto (RIO.AX: Quote) (RIO.L: Quote) to develop the $3 billion Oyu Tolgoi mine, one of the world's biggest untapped copper and gold deposits.

Now, Mongolia's resources companies -- from coal to copper to iron ore miners -- are actively seeking foreign investors and aim to list shares in markets such as Hong Kong this year.

"Hong Kong is a natural choice for us because of its geographic proximity -- it's the best gateway to trade destinations, such as China," Mongolian Prime Minister Sukhbaatariin Batbold said in a joint event with Hong Kong's stock exchange on Monday.

Batbold said the government would also press ahead with its initiative to privatise many of the country's assets and companies, including coal producers and power plants, with an eye toward creating 'national champions'.

The landlocked country's firms are in need of foreign investment and expertise as they ramp up development, he said.

Mongolia also plans to raise $1 billion-plus via a global bond sale in the fourth quarter this year to fund major development projects in areas such as mining and infrastructure.

"Mongolia is at a very exciting stage of development. We need expertise from investors abroad," said Batbold, who added he will meet Chinese Premier Wen Jiabao on Tuesday to talk about economic ties between the two countries.

"We have this momentum and we need to keep up this momentum.">>>MORE