patrick101957
13 years ago
READ THIS!!! Is there any other place in the entire world that compares to the investor opportunities that are being revealed in Mongolia!!!
“This will be the Richest Place in the World Per Capita in 10 Years”
by Chris on June 27, 2011 · 8 comments
These words from a friend I was recently discussing Mongolia with. He’s easily one of the most astute investors we know, and later this week we’ll introduce you to him, but first I want to explain why Mark and I agree with that statement.
Mark spoke about Mongolia some time back, and since then growth and returns have been spectacular and breathtaking all at once. That said, we believe that this party is far from over. In fact it’s only getting started.
Due to my unashamed and admittedly bullish stance, I’m cognizant that when discussing Mongolian investment opportunities I may come across sounding like one of those cheesy salesman advertising “the next best, most unbelievable, swish whizzy, never to be repeated again, must buy now before the sky falls in” sort of opportunities, where not only will you assuredly make millions, but you’ll have a better sex life too! Instead I’ll attempt to temper my enthusiasm and simply provide you with a brief breakdown of some important points for you to consider. After all, we have nothing to sell, and though we believe we are correct in our assessment we’re willing to accept that maybe, just maybe, we are actually wrong, and if that is indeed the case we’d love to hear from you as to why.
On with the show then… To the land of Ghengis Khan:
Population: 2.8 M
97.8% literacy rate
Multi-party democracy
Median age: 26
Sits conveniently between Russia and China, and close to the worlds fastest growing economies. India, Philippines, Indonesia – you get the picture.
19th largest country in the world with a total of 1.56M sq.km (giving it 1st prize in terms of lowest population density in the world).
No restrictions on foreign ownership of businesses, and the government doesn’t pre-screen. However, foreigners cannot own land directly. Incidentally, there is no discrimination between foreigners and Mongolians when buying shares.
The currency is freely exchangeable.
A GDP of $5.1B and a GDP per capita of $1,900.
Strategic minerals and natural resources are subject to a 34% government stake.
The London Stock Exchange (LSE) is helping develop the Mongolian Stock exchange and opening it up to capital flows previously not available.
With the above as a very brief overview let’s put our investor hat on and take a look at some important facts. The entire market cap of the Mongolian stock market is roughly $1B. To give you an idea of growth, in 2008 the market cap was $406M. It finished 2010 with the title of the worlds best performing equity market, up a stunning 64% YTD. This is some stupendous growth, but lets put this into perspective with what’s taking place.
Consider the two largest projects in the country: The Oyu Tolgoi Mine (OT); and, the Tavan Tolgoi Mine (TT). Together these two projects completely dwarf the current entire Mongolian economy. OT alone will produce roughly $7B of metal per year at current prices. TT is considered the largest coking coal deposit on this ball of dirt we call home, with a total coal resource of 6.4 billion tonnes of high quality coking coal. Initial estimates have it that TT will produce 30 M tonnes of coal annually for the next 30 years.
Although these are currently the two largest mining projects in Mongolia, there are literally dozens more in varying stages of implementation.
What happens when the capital required to fulfill the dreams of just these two projects alone hits such a tiny market?
The answer of course is open to debate, but we believe that the Mongolian economy and market will go from “Lada to Mercedes Bentley” in short order. In fact it’s already happening. If you’ve ever wanted to upgrade from economy to first class we suggest you sit up and take notice.
Why might this happen?
Mongolia is still the smallest market in Asia, yet it has resources its counterparts in Asia only dream of. Remember it has the lowest population density in the world, let alone Asia. Billions upon billions of dollars are required to extract the resources known to be present. How do you push this sort of capital into such a tiny economy without an eruption?
Per capita income for Mongolians is expected to rise to US$5,000 within the next two years and to a staggering US$12,000 by as early as 2015. Back of the napkin math tells me this is about what the average Shanghainese and Beijingese earns now. What happens when Joe Sixpack, or in this instance Odtsetseg or any of his relatives, experiences a doubling, tripling or more in his disposable income?
We don’t know for sure but we’re willing to make some educated guesses.
Mongolia is about to experience the biggest boom it’s seen probably since the Khanate era. Last year the economy grew 6.1%, with international reserves hitting an all time high of $1.6B. On the back of this the banking sector is weak, and bond markets underdeveloped, liquidity is poor, and financial statements are at times non-existent or hard to come by in many instances. Problems to be sure, but these problems create severe miss-pricing in valuations. These are opportunities for an astute investor, and we don’t believe they will last.
Stay tuned to one of the ways we are personally playing this growth. We’ve made the case previously for picking the best management possible in any company. It is easily THE MOST IMPORTANT aspect for us and of all the companies we’ve ever looked at. The management of the entity we’re going to introduce you to later this week is absolutely superb, with what has to be the most shareholder-friendly corporate structure we’ve ever seen.
Lastly, since we’re possibly being monitored by any number of three letter agencies in any number of countries, please read our disclosure statement here.
Chris
“Mongolia could be the Saudi Arabia of Asia” – Marc Faber
patrick101957
13 years ago
In 2011, over half of Chinas imported coal came from Mongolia. Now, read this: MMC: VOLUNTARY ANNOUNCEMENT: ERDENES MGL/ER EXPANDS GASHUUN SUKHAIT BORDER CROSSING TO 1,200 TRUCKS A DAY . .Jan 16, 2012 (hkexnews.hk) - Mongolian Mining Corporation Limited (HK:975) --
The board of directors (the “Board”) of Mongolian Mining Corporation (the “Company”) is pleased to announce that in December 2011, a consortium comprised of Erdenes MGL LLC, a state owned company (“Erdenes MGL”) and Energy Resources LLC (“ER”), an indirect wholly-owned subsidiary of the Company has completed an expansion project of border crossing capacity (“Border Crossing Expansion”) at Gashuun Sukhait border checkpoint(“GS”) of Mongolia, for coal export transportation.
According to Government Resolution, Erdenes MGL leads the consortium, and Gobi Road LLC, an indirect wholly-owned subsidiary of the Company, managed the construction and project management of the Border Crossing Expansion at GS under the Consortium Agreement executed betweenErdenes MGL and ER. The expansion project commenced in June 2011 and was fully completed and commissioned for operation on 12 January 2012.
The Border Crossing Expansion comprises the construction of 8 new lanes for cross border trucks transportation in addition to the existing 4 lanes, together with the construction and commissioning of support buildings, infrastructures and facilities for inspection and clearance process of customs, border control, immigration and professional inspection agencies. The Border Crossing Expansion also covered construction of new lanes and support infrastructures at “no-man” buffer zone between Mongolia and the People’s Republic of China (“PRC”) directly connecting existing lanes at Ganqimaodu(“GM”) of the PRC to newly constructed lanes at GS of Mongolia.
Upon full operation, the total capacity of GS is estimated to handle 1,200 loaded trucks for the export to the PRC per day, which is approximately 3 times higher than the current capacity of GS.
The Border Crossing Expansion is expected to boost coal export volume and truck turnaround over the GS and GM borders, reduce transportation cost of the Company and its subsidiaries, and improve the environmental and safety conditions of cross border transport operation. Furthermore, as the port for Mongolian coal export, the Border Crossing Expansion at GS would bring significant benefit to the economy of Mongolia by increasing regional cross border trade cooperation between Mongolia and the PRC and in turn encourage export of key mineral commodities.
This announcement is a voluntary announcement made by the order of the Board which is not pursuant to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited. The directors of the Company individually and jointly accept responsibility for the accuracy of this announcement.
Source: hkexnews.hk
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