Mongolia may benefit from being late to party

The Mongol conqueror Genghis Khan may have been an ardent proponent of an early form of globalization. But Mongolia has taken its time embracing international capital markets. Now this “Mortar Economy” — the country is wedged between two BRICs, Russia and China — may be set for rapid growth.

Mongolia is on the verge of opening a stock exchange. The market will finally plug the landlocked nation into the grid of global finance, facilitating privatizations, investment, and the flow of capital to would-be entrepreneurs among its 3 million people.

And the money almost certainly will flow. While still small at around $6 billion, Renaissance Capital reckons Mongolia’s GDP will be the world’s fastest growing over the next five years, growing to $23 billion by 2013. Handling that growth will be a big challenge.

Luckily for Mongolia, it doesn’t, for example, have to reinvent the wheel with its bourse. The London Stock Exchange is the frontrunner among four contenders to run an Ulan Bator exchange. In theory, that will allow the nation to vault overnight from markets not so different from the city’s Naran Tuul bazaar right to electronic trading.

Mongolia and France have signed an Intergovernmental Agreement on Cooperation in Nuclear Energy, in Ulaanbaatar.
On October 14, Mongolia’s Foreign Minister G.Zandanshatar and visiting French Minister of State for Foreign Trade Anne-Marie Idrac inked the document, after holding the talks.

Another document signed was a memorandum of understanding on cooperation in security and emergency. The document will boost efficient partnership between Mongolian and French civil security and emergency bodies.
“The nuclear energy agreement, which is of great importance for the expansion of bilateral relationships, would open more opportunities of bilateral cooperation in many other fields” said Foreign Minister Zandanshatar, at a press conference held after the signing ceremony. He noted that main issues raised by Mongolia during the visit by French minister included France’s support for projects on water supply and water pollution and the development and realization of a mid-term cooperation program based on existing agreements and pacts, as well as cooperation in food security projects for Mongolia. “France welcomed Mongolia’s proposals and agreed to boost effective collaboration in proposed fields” he concluded.

VANCOUVER, BRITISH COLUMBIA, Oct 14, 2010 (MARKETWIRE via COMTEX) -- Prophecy Resource Corp. ("Prophecy" or the "Company") (CA:PCY 0.66, +0.11, +20.00%) (otcqx:PRPCF)(frankfurt:1P2) announces that an official government commission appointed by the Mongolian Ministry of Mineral Resources and Energy conducted the final permit inspection at Prophecy's Ulaan Ovoo mine site on October 4, 2010.

Significant deposits of coal, gold, silver, uranium, zinc and fluorite have been identified under the arid steppes of Mongolia, putting the country in 14th place globally for natural resources.
Many more uncharted mineral resources are thought to be awaiting discovery, potentially enough to put Mongolia in third place.

“Upon arriving in the Chinggis Khaan Airport, I was greeted by so many people, children and adults alike,” wrote the star. "I was excited to be here for the first time – especially for something that I love to do, which is charity. Mongolia has some of the worst air pollution in the world and even before I landed, I could see the smog. The new government wanted to do promotion for clean air and asked me to help out. I didn’t just want to come to Mongolia to do one thing, so I asked if I could do charity as well.

The new gold rush to develop Mongolia's resources could
make it the world's fastest-growing economy over the next five
years, according to Renaissance Capital, which projected GDP
will almost quadruple to $23 billion by 2013 from $6 billion
today.
To profit from its untapped iron ore, coal, copper,
uranium, silver, and gold deposits, the government needs to
build a vast network of roads and railways to ship the minerals
out of the country's vast interior. More than 10 "strategically
important" deposits are in development including the Dornod
uranium deposits, the Asgat silver deposit, and the massive
Tavan Tolgoi coal site.
Tavan Tolgoi, like Oyu Tolgoi, inspires awe among resources
investors. It is a deposit of approximately 7.5 billion tonnes
-- believed to be the world's largest untapped coking coal
site. Most of its projected 50 million tonnes of production
will go to China.
The trick is getting it there. To that end, Mongolia aims
to build a massive industrial park in Sainshand, capital of
Dornogovi Province, to help transport metals and coal to
customers around the world. The facility will include copper
smelting and coal processing plants, as well as railroads to
and from the park.

Much like the debate around Oyu Tolgoi, controversy has
dogged the government's infrastructure plans from the
beginning. In April, Prime Minister Sukhbaatariin Batbold threw
his support behind an east-west railway plan, connecting the
Tavan Tolgoi coal deposit to the eastern city of Choibalsan via
Sainshand, at a cost of around $2 billion, according to one
estimate.
Some experts say it would be far more sensible, and half
the cost, to build the railway south towards China, which
bought 70 percent of the country's exports last year.

The government originally planned to sell as much as 49
percent of the Tavan Tolgoi coal deposit to a foreign bidder,
and hired JPMorgan and Deutsche Bank to handle the sale. But in
February, they canceled the auction in favour of 100 percent
state ownership, with plans to sign a development contract
without giving any equity away. Chinese coal giant Shenhua
(1088.HK: Quote) was often named as a frontrunner in the hotly
contested deal. Other bidders named in the original auction
included India's Jindal, Vale, and U.S. coal miner Peabody
(BTU.N: Quote).

Already whispers persist in Mongolia's business community
that many more workers at Oyu Tolgoi are in fact more
experienced Chinese miners, instead of Mongolian nationals as
promised in the investment agreement. Ivanhoe, however, says it
is adhering to an agreement that calls for 60 percent of the
jobs to go to Mongolians during the mine's development phase.
"As of 30 August, we have 4,200 people at site," Marshall, the
Oyu Tolgoi CEO, told Reuters, adding that 2,536 on site were
Mongolian.

HONG KONG, Oct 15, 2010 (GlobeNewswire via COMTEX) -- Sino Fibre Communications, Inc. (SFBE 0.06, +0.03, +114.29%) announced that it has closed an acquisition to acquire 50.1% of Europe-China Commercial Union Holdings Ltd "ECL" for US$100 million.

The consideration for the $100 million acquisition was 400 million SFBE shares ($0.25 per share) representing 140 million SFBE newly issued shares (valued at US$35 million) and a promissory note for 260 million SFBE shares (valued at US$65 million). ECL indirectly holds a 70% interest in approximately 70 sq. kilometers of leased land in Inner Mongolia Province, China. The land rights expire on 31 December 2049.

Daniel McKinney, CEO of Sino Fibre, commented on this new business; "This acquisition is a major turning point in the history of our company and propels us into the high growth arena of bio-energy, bio-diesel, wind and solar farms in China. With our large land resource in Inner Mongolia, the company can develop multiple streams of cash flows in this high growth, green sector."

The company will be appointing new management and board of directors, as well as changing the company name to Sinobioenergy.com. Please see: www.sinobioenergy.com

About Sino Fibre Communications, Inc.

Established in May 2005, Sino Fibre Communications, Inc. is a Nevada Corporation.

Hong Kong, China (CNN) -- As the last of 33 trapped miners were pulled to the surface in Chile, a group of bankers, government officials and mining company executives gathered to talk about the coming minerals explosion in Mongolia.
"We are following the economic model of Chile," said Dashdorj Zorigt, Mongolia's minister of mineral resources and energy. "There are a lot of lessons we can learn from the mine accident."

Mongolia's economic output is projected to nearly quadruple to $23 billion by 2013, according to a Renaissance Capital report. Zorigt projects the nation's per capita income -- which now stands about $3,200 a year -- will grow to $5,000 by 2015 and $12,000 by 2021.

But a commodities boom in developing nations is often beset by the "Dutch disease" -- a lopsided influx of capital that causes currency and prices in the country to inflate without trickling through to the rest of the economy.