Thread: Mongolia's new model

Mongolia Wind Profits

http://www.energyandcapital.com/arti...d-project/1283

What We Just Learned from a Meeting with the Mongolian Prime Minister

By Jeff Siegel
Tuesday, September 28th, 2010
Yesterday morning, General Electric (NYSE: GE) announced it was forming a joint venture with Harbin Power Equipment Company (PK: HBPWF) to manufacture wind turbines for customers in China.
In response to that announcement, I read close to a dozen comments on various message boards where people were actually blasting GE for doing business with the Chinese.
One guy, proudly wearing his Gadsden flag t-shirt in his thumbnail picture, even suggested that GE was somehow being unpatriotic by doing this deal with the Chinese:
“Why is GE going to China? They are an American company. They shouldn't deal with the [expletive] Chinese! Why is it all about money. What ever happened to patriotism? Why are they doing this?”
What a load of crap!
It doesn't take a rocket scientist to figure out why GE did this deal. It's pretty simple, actually...
This joint venture will allow the company to get a piece of China's $13 billion wind energy market!
This should not be a hard concept to grasp: You see an opportunity and you act. We do it every single day here at Energy and Capital — and you better believe I'll never apologize for making a buck.
Nor will I ever apologize for passing on this next opportunity to you...
Another way to profit from China
The folks over at GE aren't stupid.
China is the world's largest wind turbine sales territory, and it's expected to grow another 500 percent by 2020 — thanks to China's electricity demands, which are growing at a rate of 12 percent a year, and strong policy support by the Chinese government.
Who wouldn't want a piece of that action?
And by the way, GE isn't new to China... The company has been supplying China with gas, hydro, and wind turbines for years.
And it's not just GE profiting from China. The fact is you'd be hard-pressed to find a single major player in the energy game that isn't doing business with the Chinese.
Spanish wind turbine company Gamesa (PK: GCTAF) recently announced plans to triple its China investments. The company actually forecasts China will account for more than 30 percent of its total sales in 2011, compared to 15 percent last year.
A couple of weeks ago, the company opened its sixth manufacturing center in Inner Mongolia. That factory — which goes online next year — will be used to manufacture nacelles for the company's G8X-2MW turbine.
Tapping the Mongolian money train
It is clear that Mongolia is quickly becoming a hot spot for wind development.
After all, about 20 percent of the electricity in Inner Mongolia today is being generated from wind. Estimates show that Inner Mongolia holds about half of China's overall wind power potential.
That's huge!
Of course, if you're a regular reader of Energy and Capital, you already know about the massive potential in Mongolian energy resources...
Thanks mostly to my colleague Chris DeHaemer, who has spent an extraordinary amount of time on the ground in Mongolia sniffing out new opportunities for his readers.
Just last week, Chris met with Mongolian Prime Minister Sukhbaatar Batbold in New York City. The Prime Minister reminded him that Mongolia is now projected to be the best performing economy in terms of GDP growth over the next five years.
But this isn't news to Chris...
After all, he is one of only a few American analysts who's been able to gain access inside Mongolia's elite inner circle.
Why else do you think Chris was able to tip his readers off to a Mongolian oil play that's already delivered gains of more than 900%?
Of course, the question today is: Where's the next big energy play in Mongolia?
Well, only Chris can answer that one. Click here to see what he's looking at now.
To a new way of life, and a new generation of wealth...

Who has the real power in Mongolia?
http://ubpost.mongolnews.mn/index.ph...5571&Itemid=41
Written by G.Chingis Tuesday, November 30, 2010. This is probably the most difficult question for foreign investors. There are several ways to start to think about investing in Mongolia. Sometimes, you will meet Mongolians in your country; or you might be invited to Mongolia for some reason. Of course, foreigners will think the way he/she thinks due to their national background. Russians, Central Asians will think that the most powerful man in this country is the President of Mongolia. Europeans will think about the parliament. Koreans and other Asians will think about the Mongolian military. In the end, this is also quite a difficult question for Mongolians too.
Let us start with the President of Mongolia. The first President of Mongolia was Mr. P. Ochirbat. He managed to stay in office for two terms: For the first term, Mr. P. Ochirbat was nominated by the Mongolian People’s Revolutionary Party (MPRP), and for the second term he managed to be nominated by their rival, the Mongolian Democratic Party (MDP). Therefore, Mr. P. Ochirbat was the first “democratic” President of Mongolia. The concept of presidency was very new for him and for Mongolians as well. Mongolia was suffering from a devastating crisis; Mongolians were receiving food through ration cards. Anyway, Mr. P. Ochirbat was a more entertaining President than a powerful one. People remember him more for the first Mongolian oilfield, and he was famous with his participation of various New Years Parties.
The second President of Mongolia, Mr. N. Bagabandi was very powerful. He killed many people’s dreams in his bid to become Prime Minister of Mongolia. Probably, some of them will never realize that dream. Therefore, foreign investors thought that the President of Mongolia was the most powerful man in this country. But it is unclear who was the most powerful at that time? Mr. N. Bagabandi or his subordinates, such as the Head of his administration, current Members of Parliament, former Prime Minister, Mr. S. Bayar and/or other people, such as his various advisers.
The third President of Mongolia, Mr. N. Enkhbayar was powerful too. But, he was not as powerful as Mr. N. Bagabandi. In the end, he lost his second term bid, and Mr. N. Enkhbayar almost finished his political career at that time.
Now, Mongolia has its fourth President of Mongolian, Mr. Ts. Elbegdorj. Is he powerful or not? Usually, every Mongolian will say to foreigners that he is very powerful. Probably, Mr. Ts. Elbegdorj would say the same stuff. And he actually did this during his last visit to Japan. His visit there overlapped with another state visit to Japan. Mr. Ts. Elbegdorj was competing with the President of the USA Mr. Barak Obama. There was a huge crowd in Kyoto, where the American President wanted to see some sights, and visit some places where he was with his grandmother; Mr. Ts. Elbegdorj also wanted to see places in Kyoto too. Nevertheless, his visit to Russia was postponed and his relationship with the President of Russia is a big headache for him.
So, what about the Prime Minister of Mongolia? Usually, PT’s are very important for investors, but they are unreliable due to their typically short terms. Russians were so excited with Mr. S. Bayar; in the end he left them with nothing, even Mr. S. Bayar was visiting Russia every three months. Russians even received in their dreams Oyu Tolgoi, Tavan Tolgoi and Mongolian uranium. Psychologists know this important phenomenon: when you will lose, you will say that the external environment was negative, and when you will win, you will say that it was due to his/her genius skills. Therefore, foreign investors should prepare for the success of Prime Minister of Mongolia. Then you might see in his interview that thanks to his extraordinary skills, he succeeded with the project. Of course, the Prime Minister will never say that thanks to the astonishing efforts of foreign investors we succeeded.
The parliament of Mongolia is the most powerful structure in Mongolia. But it is unrealistic to make a simultaneous deal with 76 Members of Parliament. Of course, some foreign investors tried to take such steps. It is unrealistic unless you will approach them all simultaneously. Otherwise, some of these 76 Members of Parliament will say, “Why I am the last person in this line.”
The military in Mongolia is not powerful at all. They are underfinanced; they do not any connections with Mongolian politics and business. We are different from South Korea, Thailand, Taiwan and other Asian countries in terms of power distribution.
In the end, every foreign investor should find his own unique solution. They need to forget their backgrounds, and their experiences in other countries. It is time consuming, but challenging to succeed in Mongolia. By the way, Mongolian investors do the same thing. It is difficult for them as well.