Coal’s remarkable rise from a fuel left for dead to one of the world’s hottest commodities is likely to last for years.

Europe’s plans to wean itself off Russian fuels will support the coal market in two distinct ways, both of which should keep prices of seaborne cargoes inflated for the near future, according to Fitch Solutions analysts.

The EU’s ban on Russian coal that begins this month will boost demand for imports from other countries like Indonesia and even Australia. Meanwhile, plans to replace Russian pipeline gas imports with liquefied natural gas shipments will leave less fuel for other nations, forcing them to use more coal.

Fitch “substantially” lifted its Asian thermal coal price forecast for this year and beyond. It now expects the fuel loaded at Australia’s Newcastle port to average $320 a ton this year and $246 a ton on average from 2022 to 2026, up from previous outlooks of $230 and $159, respectively.

Asian coal prices hit a record earlier this year after Russia’s invasion of Ukraine exacerbated an already tight market. Miners are struggling to keep up with the surge in demand as utilities rush to secure fuel.

Shifting forward curves on coal futures markets also indicates that high prices will last. A December 2026 contract for Newcastle coal is priced at $233.15 a ton, up from $111.15 at the start of this year and $80.80 at the start of 2021.

(By Dan Murtaugh)

In March, Mongolian President Khurelsukh Ukhnaa commissioned Mongolia’s first female Brigadier General, Bolor Ganbold, who currently heads the Military Training and Education Department of the General Staff of the Mongolian Armed Forces. General Bolor was the first female cadet in the history of Mongolia; she has been deployed to multiple international peacekeeping missions and has become a voice for female peacekeepers worldwide.

In an interview with Mongolia’s first female general, The Diplomat’s Bolor Lkhaajav touched on her military career, Mongolia’s military, and how the Mongolian army handles emerging issues such as gender. This interview has been lightly edited for clarity.

How long have you been in the military, and what inspired you to choose the military as your career?

I have been serving in the Mongolian military for 29 years. When I was graduating high school, during that time, in the ‘90s, it was common for the parents to guide – actually choose – children’s schooling, majors, and future professions. My mom’s side had military siblings. With that mindset, my mother advised me to join the military. So, I started my military career early on, at the age of 17.

The Military University of Mongolia, after much debate, began recruiting female cadets in 1994. I was the first female cadet to be recruited. When I first joined, I felt pressured into military life. In retrospect, my military service to my country has been one of the most remarkable contributions one can give.

I also realized that there is a gender aspect to my military service. As the [first] female cadet, I later learned, I was becoming a role model whether I wanted it or not. These realizations came to me after many years of service. As more female cadets joined the military, the Mongolian armed forces diversified and strengthened.

After signing up to join the United Nations peacekeeping operations, I understood that military service could be global. I was part of Mongolia’s contribution to global peace and security.

How have women’s roles in the Mongolian military changed since you joined? Do you see more women in the ranks now? Is the path becoming more accessible for women to join the army and advance through the ranks?

Historically speaking, women occupied an essential role in the Mongolian military. During wars and civil unrest, women have participated in conflict zones without wearing a fancy title. In Mongolian history, Mandukhai Tsetsen Khatan had a significant influence on military strategies against the Ming dynasty. Although men outnumbered women in military affairs in general, they had a role.

Since World War I, the roles have shifted. Men continued to join the armed forces and outnumbered female soldiers worldwide. If there were female soldiers or military personnel, they were often confined to supportive roles rather than combat roles, which has an immense influence on one’s military career.

When I first joined the military there was no professional military female personnel. Most women who had rank were doctors, lawyers, nurses, language instructors, singers, and musicians. In many ways, Mongolia was changing, and the political outlook became more open for a female to join the military. Today, 28 years later, there are women in every sector of the Mongolian armed forces. Now 14 percent of the Mongolian armed forces are female.

Moreover, in my view, leadership is critical when it comes to having women in the military. As leadership changes, the enrollment of women in the armed forces has changed. In my experience, while some leaders – in both government and the military – support the enrollment of females into the military, others have limited the number of women. As such, that year’s registration of women would be less.

Mongolia’s female military personnel are at 14 percent, more or less concurrent with the global rate. During the recent U.N. General Assembly, the Mongolian president, Khurelsukh Ukhnaa, pledged to increase the number of female peacekeepers by 15 percent. This pledge opens the door for many women who have previously considered joining the armed forces and defense university. Moreover, active-duty female officers will have opportunities to enroll in foreign language programs as well as well continued education to excel both personally and professionally.

Outside the military, what are public perceptions like? Is Mongolian society open to female soldiers? How do you see yourself becoming the first of everything to inspire the younger generations?

Traditionally, Mongolia has been a patriarchal society. During warfare, the people expected men to join the military and participate in combat. This was true in 1911, 1921, and 1939. However, perceptions have changed in modern Mongolia. The public is more informed, and their perceptions of female soldiers have become more welcoming. The public is learning to appreciate and understand the need for female soldiers in the armed forces.

When I first joined the Military University of Mongolia, there were four female cadets. I think that one of the main aspects of female soldiers joining the armed forces has to do with how Mongolian men viewed women. There was a sense and understanding that they could do more – not necessarily on equal terms – however, there was room for women to be involved and participate.

Women’s roles in the military have continued to transform given changing the security environments of Mongolia and also the world. With this transformation, women have proved capable of performing both traditional and nontraditional roles in a diverse military environment. They have confirmed that they are capable of doing military duties equally with men. Compared to the mid-1990s, the Mongolian public’s perception of women in the military has improved on a positive and supportive stream.

In March, when I became Mongolia’s first female general, there were mixed feelings. I was proud of myself, but I was also anxious that this was a huge step in the Mongolian military and the country. It was an aspiration and inspiration for thousands of uniformed female personnel in Mongolia and beyond. It is something to be highly valued. Moreover, young women can be inspired by this accomplishment and believe that they can, too, achieve these honors.

At the same time, being the country’s first in military rank, promotion, and deployment, the public and the armed forces demand specific responsibilities and commitment. As someone who has previously served in the U.N. peacekeeping missions, my role as the first female general of Mongolia extends to all women in the military.

You were personally involved in multiple U.N. peacekeeping missions. What is the main importance of a woman’s role in these missions, given the security issues you have to face?

In 2010, I was deployed as the first Mongolian female staff officer to the United Nations Mission in the Central African Republic and Chad. In my early deployments, I gained tremendous experience and knowledge of international coalition operations. But I also observed that female peacekeepers – in this case, Mongolians – faced various barriers preventing them from fully developing their potential as peacekeepers.

For example, one of the significant problems experienced by female peacekeepers, especially in the military contingents, was that they were seldom allowed by their contingent leadership to leave the base to interact with the locals. Having access to the host communities is particularly important in principle and in practice. However, when we did not leave the base, it limited our access to assist, engage, and help the community. This restriction, although understandably related to security issues, can be solved. At the same time, this ultimately had something to do with gender issues.

When female peacekeepers cannot leave the compound to perform certain tasks, they lose out on experience and exposure, therefore, negatively affecting them when it comes to promotion and ranks. I wrote about this before in “Mongolia’s Female Peacekeepers: A Case Study for Gender Parity.”

Now that you are a brigadier general, in your personal opinion, in which areas can the Mongolian military enhance its human capital by including more women?

One of the significant areas that need to be developed for the Mongolian military to enhance capability and human resources for female servicemembers is a consistent policy and strategy. And this policy and strategy must support the military education and career development of female servicemembers and military personnel. This includes all levels of the military, including female peacekeepers.

In the Mongolian military today, the employment of women at higher leadership and decision-making levels is insufficient. Most women hold executive and administrative posts and offices. However, times are changing, and women’s role is becoming increasingly visible not just in Mongolia but worldwide. I certainly believe that and would like to say to my fellow female members, “The greater the effort, the sweeter the reward.” If women have a goal and ambition to be and bring more contribution to the military, there is always a way to achieve it. Our government and its policies must support these endeavors.

GUEST AUTHOR

Bolor Lkhaajav

Bolor Lkhaajav is a researcher specializing in Mongolia, China, Russia, Japan, East Asia, and the Americas. She holds an M.A. in Asia-Pacific Studies from the University of San Francisco.

Anarjin Bayarsaikhan walks into the Mongolian Sports Complex in the capital, Ulaanbaatar, looking more like someone on an evening stroll than an athlete. She is dressed in black — a dress, leggings and socks — and on her feet she has pinkish and white fluffy sandals. But Anarjin is a serious athlete and, since 2021, she has been practicing her skills in knucklebone shooting, an ancient Mongolian game known locally as shaga that has been passed down for generations.

“I am extremely excited,” Anarjin says with a broad smile, as she sits on the floor, ready to play.

With her left hand, she picks up a small wooden rail, similar to a Scrabble tile rack, but broader and with flatter surfaces. She rests her arm on her raised right knee. She grabs a small tile, places it on the rail, and aims at her target — cubes made from the best-quality hardwood that grows in the tropics. She flicks the tile strongly with the middle finger of her right hand toward a square box holding the cubes 15.5 feet away. The tile hits with a twang, dropping a square cube called a khasaa.

“That was a pretty hit!” she says and jerks with excitement.

After centuries of excluding women like Anarjin from playing knucklebone shooting, the Mongolian government, activists and sports administrators have embarked on a campaign to change perceptions and increase the number of women participating in tournaments. In 2014, knucklebone shooting was inscribed on the United Nations Educational, Scientific and Cultural Organization’s Representative List of the Intangible Cultural Heritage of Humanity. The Mongolian government followed the news with the creation of a policy to develop the game and turn it into an international sport.

Knucklebone shooting originated in Mongolia in the 13th century and was originally a royal pastime. Over the centuries, it has been passed down through generations and expanded to the general population. Today, it is one of the sports played during the national festival of Mongolia called Naadam, a holiday observed annually from July 11 to July 13.

Wooden railings and bone tiles that are used in knucklebone shooting are seen here with carrying cases at the Physical Education and Sports Department in Orkhon province, Mongolia.

It’s called knucklebone shooting because pieces of the game were originally made from the ankle bones of animals like sheep and gazelles. Initially, the pieces were shot from the palm of the hand. Nowadays, the railings are made of sandalwood, and the tiles are made of wood or deer antlers. A team consists of six members. It takes about 80 minutes to play against an opposing team, and teams sit in a circle for up to 10 hours a day.

Tsog Semjid, a knucklebone shooting scholar and grand champion shooter of Mongolia, says that because knucklebone shooting is not a physical sport, there is no reason to bar women from playing it.

“It is rather an intellectual, psychological sport,” he says. “That is why anyone can play it.”

The Mongolian Sports Corporation aims to develop knucklebone shooting as an Olympic sport, executive director Khosbayar Bat-Erdene says. The sports organization established the Mongolian Shaga Federation, which now works toward opening sub-federations in 18 different countries.

“We want to make knucklebone shooting a world sport,” Khosbayar says.

A woman plays a game of knucklebone shooting at the Physical Education and Sports Department in Orkhon province. There's a push to get more women to play the game, which used to be played only by men.

Part of the international growth strategy, he says, is a campaign to convince skeptics that the game will benefit from the participation of women.

Those who are opposed to the idea of women playing knucklebone shooting say it goes against ancient Mongolian customs and traditions that have existed for generations. Demidsuren Gonchig, a master knucklebone shooter, is one of them. “It’s our tradition that only men should play knucklebone shooting,” Demidsuren says. “Women never played it. They are not supposed to.”

Oyunchimeg Tumurbaatar, a 46-year-old resident of Khentii province, says that kind of resistance from men is the reason she has been playing knucklebone shooting secretly for more than 30 years. She developed an interest in the game during her childhood because her father and older brother played it often. Over the years, her skills improved to a level where she could compete with her father.

“My father used to praise me that I shot better than him,” Oyunchimeg says.

Although Oyunchimeg says she believed that she could beat anyone in a game of knucklebones, she never played against any opponent other than her father or her older brother because she was afraid that participating in any competition would damage her father’s reputation.

There are over 18,000 registered knucklebone shooters in the country, according to the Mongolian Federation of Knucklebone Shooting, a nongovernmental organization founded in 1987 and officially registered in 1998. Sixty are shooters with official registration as heritage bearers, and many have ranks and titles. There isn’t a single woman among them.

Sunjid Dugar, the commissioner of the National Human Rights Commission of Mongolia, says barring women from playing the game is a violation of their rights. “There is no rule or regulation that prohibits women from shooting knucklebones,” Sunjid says.

In 2021, sports enthusiasts and researchers formed the Mongolian Sports Corporation. Munkhdelger Jigdjav, the organization’s operational director, says it was founded on the principle that everyone has a right to participate in sports. They organized a state knucklebone shooting tournament where women were allowed to compete.

“We noticed that even though women had never participated in past competitions, there were many skilled shooters among them,” Munkhdelger says. “We decided to support them.”

Oyunchimeg was one of more than 50 women who participated in the state knucklebone shooting championship for the first time. Her face lights up as she recounts what it was like to compete in a game she had played secretly for decades.

“I felt like a bird out of its cage,” she says. “It felt really great to be finally free.”

The competition also gave an opportunity to many young women like Oyunsaikhan Tserenmyagmar, a 17-year-old high school student at Devshil School in Zavkhan province. Oyunsaikhan, who only started playing knucklebone shooting in 2021, won the competition and became a state champion.

“I could not believe I became a champion after practicing it for such a short time,” she says. “It was really cool.”

Anarjin, too, took part in the national championship and qualified to participate in international knucklebone shooting competitions. Her dream is to become a champion and inspire more young women to join the sport. She wants to contribute to its development and promotion as it expands beyond Mongolia.

“Each time I play,” she says, “I feel like I am making a new discovery.”

Khorloo Khukhnokhoi is a Global Press Journal reporter based in Mongolia.

IAReporter has learned that Mongolia has been put on notice of a treaty-based dispute by Maximilian Johnson (the half-brother of UK Prime Minster Boris Johnson) and a related Malaysian entity (GRF Paragon).

IAReporter has confirmed that the notice of dispute was submitted to Mongolia on July 27, 2022, under the Mongolia-UK and Mongolia-Malaysia bilateral investment treaties (BITs). The claimants are understood to allege a denial of justice at the hands of local authorities in relation to a criminal complaint filed by the claimants for alleged fraud, embezzlement, and money laundering by their local business partner.

IAReporter understands that the underlying dispute concerns the claimants’ investment in a local mining company, Zasagchandmani Mines. The claimants (acting together with former Glencore chairman Simon Murray) are said to have, between 2016 and 2018, advanced certain loans to Zasagchandmani Mines that were intended to be used for the purposes of the local mining enterprise. The claimants allege that these funds were subsequently misappropriated by Zasagchandmani Mines’ majority shareholder, Buyantogtokh Dashdeleg, and his associates.

In early 2019, the claimants filed a criminal complaint in relation to the alleged misappropriation of funds, leading to Mr. Dashdeleg being initially subject to a travel ban. However, this travel ban was lifted in late 2019 by a local district court, allegedly in violation of Mongolian law. While the order lifting the travel ban was subsequently nullified, Mr. Dashdeleg had by then left the country, according to the claimants. (According to one report, an Interpol Red Notice warrant was subsequently issued against Mr. Dashdeleg, although Interpol’s database appears to indicate that the warrant is no longer active.)

IAReporter understands that the claimants further allege that their case against Mr. Dashdeleg has been going back and forth between various Mongolian administrative authorities, in particular the Mongolian Central Investigation Bureau and the Public Prosecutor’s Office.

While the Public Prosecutor’s Office eventually in early 2022 issued an indictment against Mr. Dashdeleg’s associates and Zasagchandmani Mines, the claimants say that the Prosecutor failed to effect service on the defendants in Mongolia. Finally, in June of 2022, the Prosecutor is said to have annulled the indictment and once more sought to return the matter to the Central Investigation Bureau, prompting the claimants to invoke their rights under the BITs.

IAReporter understands that the claimants are alleging breaches of several of the relevant BITs’ provisions, including those on expropriation, fair and equitable treatment, full protection and security, and unrestricted transfer of investments.

The value of the claim is currently estimated at approximately 50 million USD.

Mongolia’s BITs with Malaysia and the UK provide for 3- and 6-month waiting periods, respectively.

According to a report in the Financial Times, Mr. Buyantogtokh has dismissed the allegations against him as being “spurious” and is seeking asylum in the US.

The claimants are represented in the matter by Signature Litigation in London. It remains unknown whether Mongolia has yet retained counsel.

We will continue to monitor this dispute.

By Vladislav Djanic

Case(s) discussed in this article:

The representatives of the Central Provident Fund of the Republic of Singapore arrived in Mongolia to provide consulting services for the establishment of Mongolia’s Unified Accumulation Fund.

The representatives of the Central Provident Fund of Singapore were received by Deputy Minister of Labor and Social Protection S.Zulpkhar and Secretary of State G.Unurbayar.

The Government of Mongolia aims to establish a unified accumulation fund, gradually transition to a system that provides comprehensive solutions to education, health, pension, housing, and social security services, reduce poverty, and raise the standard of living.

During the Prime Minister of Mongolia’s visit to the Republic of Singapore in July, the Ministry of Labor and Social Protection signed a memorandum of understanding to receive consulting services from the Singapore Cooperation Enterprise regarding the introduction of the unified accumulation fund system of Singapore to Mongolia.

The consulting service team will work in Mongolia on August 10-16, share the experience of creating and developing the system, and assess and identify the problems and delays in the current governance and policies of the pension fund and social welfare system.

Ministry of Mining and Heavy Industry of Mongolia and the Korea Petroleum Quality and Distribution Authority (K-Petro) signed a Memorandum of Understanding on technical cooperation on August 8.

State secretary of the Ministry G.Nandinjargal exchanged views with the Chairman of K-Petro’s Board of Directors on the possibilities of further cooperation in the field of oil quality, standards and control system.

Within the framework of the MoU, the parties will cooperate in improving oil quality, standards and control systems, exchanging experiences, creating database as well as conducting a joint research. The two organizations will also jointly organize training and seminars and exchange information on techniques and technologies related to oil refining and petrochemical production in South Korea.

We, the defacto team, reach all of our readers with a fresh interview with Junichi Hattori, a member of the founding family of Seiko Holding, and the largest shareholder of Khan bank, the largest commercial bank of Mongolia. In this interview, he talked about his businesses in Mongolia and acquisition process of Khan bank.

Jargalsaikhan Dambadarjaa: Please tell us about you and your connection to Mongolia?

Junichi Hattori: I came here 4 years ago for the first time. My friend Reiko Okano san and I came as tourists. Before that, I studied geopolitics for a few years and read a lot of material and became interested in it. I have found that Japan is unique, and it is not getting along with all the surrounding countries very well. Relation with China is delicate, South Korea – is delicate, North Korea – is hostile, now Russia – is hostile. Somehow, we survived for the last 60-70 years because of a Military Treaty with the United States. I think, that is the only way we could survive safely in this environment. But now it is time to think about what to do by ourselves as a country. In that concept, Mongolia is very attractive for Japan.

J: For us, Japan is attractive too.

H: Because it is on the north side of China and in front of Russia. We have a long history of a good relationship between Mongolia and Japan.

J: It has been already 50 years since Mongolia and Japan have established a diplomatic relationship.

H: Mongolia also has a very good relationship with both countries, Russia and China.

J: You graduated from Stanford University, California. I was there last year for an international conference. Also 20 years ago, I went there to listen to Dalai Lama’s speech. Now, I do interviews with many guests and meet interesting people, like you. Please tell us about your connection with Seiko. Who founded the company? And who is running it?

H: My great great grandfather founded the Seiko watch shop in Ginza in 1881. I’m the fourth generation.

J: Did he open it as a shop for watches, was it only for the Seiko watch?

H: At that time, it was a small shop, selling imported watches and clocks because there was no manufacturing of watches in Japan at that time. They imported watches and clocks from Switzerland. After some years, they started manufacturing it by themselves.

J: But now you have the best watches. Probably, Number 1 or Number 2 in the world.

H: It is now Number 1 in the world as a matter of production of quality watches because there are many manufacturing companies based in Hong Kong, selling very cheap electronics, for $10 a piece. We have a lot of products priced above $100-300.

J: What is the secret for keeping that name for many years in such a competitive market?

H: We started with manufacturing clocks. Then we started producing watches just after WW2, I think. The difference between a Swiss and a Japanese watch at that time was that we have an integrated manufacturing system unlike a Swiss company, which consists of many suppliers of parts, such as base plate, gears, spring and assembling services and cases from all different companies. But our system is all integrated.

J: You mean, you do everything by yourself.

H: Yes, as far as the mechanical movement is concerned. This helps us to improve the quality. We do quality control (QC) and manage to mass produce high-quality watches. We were the first to introduce practical quartz watches on a mass production basis. The reason we could do this is the integrated system. We manufacture all the parts and run the entire manufacturing system by ourselves. In watch industry, for many parts manufacturers, it is not easy to introduce an electronic system because it is risky and may cost jobs. We have highly skilled professionals in the chain and we could convert some process into electronics work.

J: Who is now running the company?

H: My family, my younger brother.

J: How do you become an investor? You shifted yourself into finance. Please, tell us about it.

H: I have originally been working as the group company chair, not only for the watch company but also for the electronic parts. We are selling all parts to mobile phone manufactures. We produce semi-conductors, LCD panels, batteries, and all parts. We also manufacture watches, which makes up less than 20 percent of the business. I do not like to talk about the details, but there were problems in the family. Some family members were not interested in electronics and wanted to focus only on watches. So, I decided to leave the company.

My investment in Mongolia was a coincidence because of my studies in geopolitics. I was interested in Mongolia as a country, and I came here. Many people approached me presenting investment opportunities for many businesses. Among those businesses, I am somehow interested in acid spar-fluorspar because this is the material, an essential part of a semi-conductor. Because of my experience in parts and semi-conductors, I became interested in these materials.

J: By fluorspar reserves in the world, China is number one, Mexico – number two and Mongolia is number three. I am also familiar with fluorspar deposits, reserves in Mongolia, and have visited plants that are producing concentrates, including the one in Mexico. The process is the same across the countries. They float the particles, then wipe away the cream on top.

When will you produce fluorspar in Berkh mine, Mongolia, that you are investing in now?

H: Some Mongolian people approached me that they have and will develop mines. They took me to Delgerkhaan site, and I found that the site was excavated for many years by Russians and then they just left after the USSR fell apart.

J: How deep are those mines?

H: I never went down there.

J: Is it an open pit?

H: No. There were some holes and tunnels. Probably, not very deep, maybe, less than 10 meters. I am not quite sure, though.

J: Then, there must have been artisanal miners, they dig holes by themselves by hand. The main deposits were developed by Russians. That Berkh mine might be owned by some Mongolian family. You now bought a part of it?

H: Yes, because there is the evidence of excavation. I’m not quite sure that we could still develop this fluorspar. But it is a lemon of the mining business, I think, there is a sign of higher probability of mining. So, I have decided to invest in it.

J: Now about your other business in Mongolia. You have bought share of the largest bank in Mongolia, the Khan Bank. What percentage of shares do you own?

H: It was around 60 percent. Now, 55.3 percent because we sold some shares to the Khan Bank employees.

J: It belonged to Sawada san.

H: Sawada san invested in it a long time ago. Sawada san is an entrepreneur. He started and invested in many businesses. But his main business is H.I.S., a travel company. He is trying to retire and is thinking of giving this business to his son. But then, he came to the idea of selling those other businesses and concentrating on H.I.S. And he was trying to sell the shares of Sawada Holdings. At that time, there were many other buyers. All of a sudden, he was in a very difficult position due to the corona virus pandemic. His travel business is in a very difficult environment now. He has to concentrate on H.I.S. now. So, he sold the other businesses.

J: You changed the name Sawada Holdings to S.H. What percentage of Sawada Holdings did you buy?

H: Almost 43 percent as per yesterday (22.08.04) at Tokyo stock exchange and together with other friendly groups, we control the majority.

J: You have spent 22 billion yen from your family investment to buy them?

H: I am not directly buying H.S. Holdings; I buy through a limited partnership managed by Meta Capital. Meta Capital is investing and buying those shares.

J: Meta Capital initiated a tender offer for Sawada Holdings. There is a name of Upsilon Investment Limited Partnership. Where did this name come from?

H: I am not quite sure. Upsilon is a company that manages the partnerships of Meta Capital.

J: Are you a board of member of H.S.? Are you a managing director?

H: Yes, the managing director, but not the CEO.

J: There is a scandal here in Mongolia, concerning the transfer of the shares of Khan Bank. According to our law, one should disclose how the shares are sold and who is involved. There was a conflict: the Ex-Finance Minister was saying one thing and the President of Mongol Bank was saying something different. Do you know about that?

H: Yes, we have a lot of talks and exchange of documents between the Central Bank of Mongolia. Because the Central Bank has consented that this acquisition is legitimate according to the laws. Since Sawada san has not really agreed to sell until the Central Bank admits those transactions as legal. And so that TOB has not been successful because it has been more than one year, and it has never been accepted by the Central Bank. At that time, I gave up. After some months, the Central Bank approved everything, those transactions. And Sawada san agreed to sell the shares.

J: I understood that the Central Bank of Mongolia agreed to the transaction to Upsilon. The legal owner of Khan bank is now Upsilon, right?

H: Yes, 55 percent. We got an approval last July, 2021 and then an official letter came from the Central Bank, this May, 2022, saying that we are the legitimate owner.

J: Can I have a copy of the letter?

H: I’m not quite sure. I did not see it. Meta Capital managed everything. I can ask them.

J: Here, it is still causing some issues. It is required by our law, that banks have to issue IPO’s this year. I do not know what percent, but they have to issue IPO’s this year. Next year, it is required by law that banks should have at least five owners, which means that you have to sell some shares, too. How would you do that? Would that happen here or in Japan?

H: We have not decided yet. But we are talking to the Central Bank here and we are already approved to go public. There are some processes on variations of all the owners of the company. The variations are inside (among) the Khan Bank first before we officially go public.

J: Have you got Khan Bank’s value (estimation) already?

H: We are now starting that process.

J: Do you make it by yourself or are you asking someone to do that?

H: We are asking PwC to conduct an Asset Quality Review.

J: Do you make it in cooperation with your Mongolian partners or are you doing it separately?

H: I think that it is separate. I am not quite sure. But we got an approval from the Central Bank to start it.

J: You, 55 percent of Upsilon, got approved by the Central Bank to do an independent an AQR?

H: Yes, to prepare to go public.

J: Have you met your Mongolian shareholders, the 40 percent owners of the bank?

H: No, never. I understand that there are some litigations from the other owners against the Central Bank.

J: That is the reason why you have not met your Mongolian owners (partners-shareholders). Once the litigations are resolved, would you meet the Mongolian partners?

H: We may do. If the Central Bank agrees, we could get together.

J: Delicate situation. According to the law, you must sell some shares this year. How would you do this? Will you sell some of your shares? 40 percent or so should be sold. What is your position on that?

H: Well, we are preparing to go public. The Central Bank requires that each owner should have less than 20 percent of the bank before the end of 2023.

J: IPO will start this year and you will sell more than half of your shares. What is your understanding? Will you sell it in the Mongolian market or in the Japanese one?

H: We have not decided yet. Because in my thinking, it is natural and the right thing that eventually major bank shareholders are Mongolian people, but not under special forces. Many diversified shareholders are essential for the stable management of banking. Banking is the center of the monetary policy of the country. This is important to the Government policy.

J: The operation of the banks should be transparent. That is the assurance of the banking quality and assurance towards their clients.

H: My concern is that if we go public at this point, anybody can buy it on the market. It is easy to buy all the shares. Some special groups can buy the majority after going public. This regulation said that one owner’s holdings should be less than 20 percent. But it is not really safe because multiple related companies or persons can buy it.

J: Our law specifically says that the final owners cannot be connected (related persons) and the government will make sure that it is not the case. That is why they will ask to see your transactions, to check whether they are connected or not.

H: But it is not easy to find out.

J: Of course.

H: It is very difficult. It is the same thing in Japan. There are a lot of regulations to eliminate shadow owners.

J: In the process of buying shares from Sawada san, have you met any other Mongolian investors who are interested in working with you?

H: Not yet. Nobody has approached me.

J: You do not know any Mongolians through Upsilon?

H: No because all management of shares is controlled by the general partner, not by me.

J: Who is the general partner?

H: Upsilon because I invested in buying the shares through Meta Capital, which is managed by Upsilon. That is why I am not a Board Member of Khan Bank.

J: That is the reason you have not met the Mongolian owner because they have a litigation at the Central Bank. What is that litigation about?

H: I am not quite sure. There is some news that the litigation against the Central Bank is about the process of some approval. Under the Mongolian law, they say any contact should go through the commercial bank itself, however, since we were approved directly by the Central Bank, other shareholders are complaining. I know about it only news, though, and I am not sure.

J: The key here is that Mongolian people should understand clearly. It is very important. One thing, is it legal or not? The other thing is that the Mongolian public wants to know about the Japanese buyer and the largest share owner of our largest bank. That is why it is a key for us to receive that permission from the Central Bank. It should be public information. You can ask Upsilon and other people for a copy of the letter. If you could send me a copy of the letter that would settle many doubts in Mongolia. If that letter remains as undisclosed to the public, then there will be many doubts.

H: I will ask them. They might need an approval from the Central Bank to release that information publicly.

J: If the Central Bank refuses to disclose that approval letter, I will ask them directly why they are not disclosing that information to the public. This is one reason for all these doubts because it is the largest bank of the country, where 2.2 million people out of the 3.4 million population bank with. These people really want to make sure that their money is safe. Instead of Sawada san, we now see you as the largest owner of our largest bank.

That is the reason that we are interviewing you to introduce you. You are a wealthy man, with a long history in business. In that sense, we talked about your Seiko history. In the same way, we also want you to ask a copy of that letter.

H: I am really contributing to the Mongolian economy through my investment. My major business is fluorspar, not banking.

J: Still, you are the largest share owner of the largest bank and our people are very serious to get to know you, your intentions with the bank.

H: That is why I am very positive to go public to sell the shares to Mongolian people and diversify the owners.

J: Sounds well. We want to see your fluorspar business moving. You will export fluoride acid and will compete with China. It will make life easier for many businesses in Taiwan, Japan and Korea, as it is used for some parts of electric vehicles.

H: Because, we have almost no mineral resources in Japan. There is no domestic mining industry in Japan. So, we rely on imports. Mongolia has a lot of underground assets. Thus, it is a very good partnership.

J: I think, when you start to produce fluorspar in Mongolia, you will use the best technology and train people. There are many other deposits in Mongolia.

H: We would like to invite many investors from Japan.

J: That is also what we want to see. At the beginning of our interview, you said that Japan has a problematic relationship with its surrounding countries.

H: Yes, it is risky.

J: Mongolia and Japan have a good relationship and that relationship should be growing and bringing more investment and more business.

H: I hope that we develop our relationship for a long time.

J: Are there any other things that you would like to tell Mongolians?

H: There will be some TV program shootings in here. It is a very popular program in Japan. The previous series of the program will be on TV in Mongolia this year.

J: What is the name of the program?

H: Hanzawa Naoki. Probably, this year, the program would be released with Mongolian translations. Subtitle is now being produced here.

J: What does the name mean?

H: It is the name of the person in the banking business. It is a very banking scandal and is a funny and interesting story. The new series of drama will be produced in Mongolia.

J: Is it happening between Mongolians and Japanese?

H: Yes. If broadcasted in Japan, then many people would come to Mongolia.

J: How long will you stay in Mongolia?

H: Leaving on the 5th and coming back in October. I come here 4-5 times a year.

J: Our interview will be published in English, Mongolian, Russian, and Japanese in our Defacto Gazette soon. Thank you very much Hattori San.

The 25th Annual Meeting of the Asia-Pacific Anti-Money Laundering Group - organized by the Asia-Pacific Anti-Money Laundering Group (APG) – took place in Kuala Lumpur, Malaysia, during 24 to 28 July, 2022. D. Bayarsaikhan (Chairman, FRC) represented Mongolia, along with participants from related organizations.

The Financial Action Task Force (FATF) had previously presented recommendations regarding the identification of virtual asset service providers, implementation of requirements on anti-money laundering and combatting the financing of terrorism (AML/CFT), and implementation of a risk-based methodology.

Member countries had also been notified by FATF to implement the recommendations.

To create an appropriate legal environment for virtual asset service providers (and a system that supports innovation and reduces risk) the FRC had assessed the risks related to AML/CFT at the national level. The Commission had also developed and approved regulations, expanded cooperation, and warned the public.

To improve the evaluation of FATF Recommendation 15 (New technologies) within Mongolia, the FRC submitted reports and clarifications to the APG for re-evaluation, and worked to ensure the implementation of technical recommendations. On 27 July, 2022, the Revaluation Report of Mongolia was discussed and approved by Member States. At the meeting, the re-evaluation was presented - within the framework of Recommendation 15 - and with respect to Mongolia Recommendation 15 was assessed to be ‘mostly implemented’; in contrast to ‘half implemented’ in 2021.

The FRC participated in a presentation, sharing with member states of the APG its experiences on adoption of FATF requirements and international standards in the field of proper regulation of virtual asset service providers, AML/CFT, and prevention of financial crimes.

The Chairman, and representatives of the National Security Agency, congratulated and praised Mongolia for its improvements, and its creation of an AML/CFT system.

In addition, Ian McCartney (Chairman, APG) received Mr Bayarsaikhan (and representatives of related organizations) in a meeting, where they exchanged views on expanding cooperation AML/CFT. Mr Bayarsaikhan also participated in a meeting - Participation of Women in AML/CFT - with Raja Kumar (the newly appointed President of FATF) and representatives of member states.

Source: Financial Regulatory Committee of Mongolia

On August 9, Prime Minister L. Oyun-Erdene received UN Secretary-General António Guterres, who is on an official visiting to Mongolia.

At the outset of the meeting, the PM said he is glad to meet him again in Mongolia after the 2022 Winter Olympics in Beijing.

PM said, “During the Olympic Games in Beijing, we discussed with you about hydropower plant to be built on the Eg River, which is the first important hydropower plant project of our country. Construction work for this project began in 2016 with a USD1 billion soft loan from China, but the work was put on hold due to Russia’s complaint filed with the UNESCO World Heritage Committee. However, studies conducted in the past have shown that this project will not have a negative impact on the water regime and resources of the Selenge River and Lake Baikal in Russia. In addition, our country announced an international tender. A French company is conducting a biological impact assessment. The results of the assessments and studies will be presented at the meeting of the UNESCO World Heritage Committee next year. If the Committee issues a decision, it will become possible to continue the project”.

He asked Mr. Guterres for active support in resolving the problem of this project, which will play a crucial role in ensuring Mongolia's energy security.

In turn, UN Secretary-General António Guterres stressed that developing countries should not be in energy dependency. Therefore, in this regard, the UN is ready to provide policy support by familiarizing with the results of the studies at the 46th session of the UNESCO World Heritage Committee. He also commended the Mongolian government for digitalizing its public services and making progress on e-governance to reduce the corruption index.

The Mongolian government aims to become a ‘digital nation’. In this context, the government intends to involve at least 90 percent of public services in a unified platform ‘E-Mongolia’ by 2024. The ‘New Revival Policy’ proposed by the government aims to decentralize the urban population, develop rural areas, and create new jobs.

At the end of the meeting, the parties agreed that the UN will conduct an assessment on urban and rural areas’ concentration.

Greens Party leader Adam Bandt has warned the Australian government needs to start moving away from coal exports to prop up its bottom line, saying net zero goals in major trade partners will cut into fossil fuel earnings.

Bandt said three of Australia’s biggest export markets for thermal coal — Japan, South Korea and Taiwan — had all pledged to reach net zero carbon emissions by 2050 or 2060. The process to decarbonize their economies to meet those targets would act as a “deadline” for Australian coal exports, he added.

“It’s going to be increasingly untenable for the government to maintain its desire to keep opening new coal and gas projects,” Bandt said in an interview with Bloomberg Television.

The Greens Party has a significant number of senators in Australia’s upper house, making Bandt’s support vital to passing Prime Minister Anthony Albanese’s policy agenda. Since he was elected in May, Albanese has attempted to push greater climate action in Australia, including increasing emission cuts targets to 43% by 2030 and rolling out a strategy for greater use of electric vehicles.

However, Australia’s economy is heavily reliant on its mining and minerals exports, with the trade surplus hitting a record high in August off the back of strong growth in the resource sector. Coal is forecast to generate about A$104 billion ($73 billion) of export earnings in the year through June 30.

Australia is the world’s largest exporter of metallurgical coal and the second largest exporter of thermal coal.

Bandt has called on Albanese to go further in his action on climate change, including committing to end all new coal and gas mines in Australia. Albanese’s rejection of a moratorium on new fossil fuel projects is undermining his government’s promise of bolder decarbonization policies, according to campaigners.

“These weak targets could be blown out of the water in the next 12 months or so as the government approves some very big coal and gas projects that are on the books in Australia at the moment,” Bandt said.

(By Ben Westcott)