20.12.2013, NEWSWIRE, Issues 304-305
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Transcript of 20.12.2013, NEWSWIRE, Issues 304-305
BUSINESS COUNCIL of MONGOLIA NewsWire
wwwbcmongoliaorg infobcmongoliaorg
Issue 304-305 ndash December 20 2013
HAPPY HOLIDAYS TO ALL OUR BCM MEMBERS
WATCH FOR SPECIAL bdquo2013 YEARENDER‟ NEWSWIRE ISSUE NEXT FRIDAY
DECEMBER 27
NEWS HIGHLIGHTS
Business
Oyu Tolgoi approves 2014 budget
OT mine‟s bdquoPhase Two‟ bank financing pledges extended
Trafigura agrees to off-take deal for Oyu Tolgoi mine
OT to cooperate in Tavan Tolgoi power plant project
Erdenes TT unlikely to pay $160m debt to Chalco in 2013 says CEO
Reserves of the Tavan Tolgoi JSC coal deposit increased twofold
Shenhua to import 30-50m tons of coke per year from Mongolia
Erdenet Mining brings MNT 370 billion to state budget
Asgat silver deposit to undergo development
MIAT to hire foreign-skilled management
Standard Bank consultant detained amid debt dispute
Khan Bank opens express banking center
Erdene announces new gold discovery at Altan Nar
Xanadu Mines forms JV for copper exploration in Mongolia
Jatenergy tests prove conversion of Mongolian brown coal to semi-coking coal
SouthGobi Resources announces restated financial and operating results
MSE cancels Khansh Invest‟s brokerage licenses
MNU partners with University of California for renewable energy
McDonalds International calls for franchisee to possibly open in Mongolia
Japanese ldquoSun Ricerdquo plant opens in Mongolia
MNBC migrates to DVB-T2 with Thomson Video Networks
Chinese firm negotiating to acquire Just Agro
Mongol TV exposes media corruption with fake McDonalds‟ story
EBRD adopts new strategy for energy and natural resources sector
Sustainability hosts SESA workshop
UB registers Maternity Hospital No 1
Rio Tinto‟s Sam Walsh digs in for the long haul
Kyrgyzstan files ecology damage lawsuit against Centerra
Economy
Fitch affirms two Mongolian banks at B revises outlooks to bdquoNegative‟
Mongolia score falls on political risks index for mining investment
Mongolia looks for second chance with foreign investors
CPI increases to 12 percent year-over-year in November
Growth seen in export of precious metals
MNT 788 billion will be entered into the Stabilization Fund
Economic Development Ministry plans to put 81 of budget into construction
TT power plant may need conclusion to OT dispute says director
Cabinet to conclude concession on Altanbulag-Zamyn Uud highway
MNT 116 billion will be spent for building emergency alarms in UB
EIU clarifies extent of official estimates of oil shale reserves
Mongolia and the threat of the resource curse
Mongolias nomads warm to solar power
Iron-ore and coal prices go separate ways
Are commodities traders bdquotoo big to fail‟
Smog darkens Shanghais prospects for becoming a global financial center
Politics
Minerals Policy enters final discussions
Parliament unanimously backs ldquoSmart Governmentrdquo initiative
Government calls to end practice of appointing MPs as ministers
Committee leaders to be elected this month
Foreign currency banned for miningexploration licensing fees
Mining Ministry to cooperate with Association of Fluorspar Explorers
DP rejects Amarjargal‟s resignation
MPP head to step down
Fifth round of negotiations for the Japan-Mongolia Economic Partnership Agreement
First Mongolia-China joint border commission meeting in Beijing
Belarus to open embassy in Mongolia in 2014
Howell New Jersey USA becomes sister city of Sukhbaatar district
Mongolian calligraphy added to UNESCO Cultural Heritage List
Though Improving Mongolia still reeling under corruption
MPP demands dismissal of ministers
Former Tavan Tolgoi JSC director arrested
Mongolia Turkmenistan join international racing federation
Mongol TV head media can help fix the big problems
ECONOMIC INDICATORS
MSE Top 20 Index by market Capitalization
Foreign-listed Companies with Mongolian Assets
Inflation
Central bank policy rate
Currency rates
Click on titles above to link to articles
SPONSORS
Khan Bank
International SOS
Wagner Asia Automotive
Oxford Business Group
Mongolian National Broadcasting
Breakthrough PR
BCM MONTHLY MEETING RECAP
The BCM meeting on 9 December with Bayanjargal Byambasaikhan in the chair was attended by 80
members and invited guests Byambasaikhan made reference to the changes made to the legal
environment for investors and how the president is putting his efforts into creating a ―smart
government to improve things even further
―I think this message is of a change for the economic life of Mongolia said Byambasaikhan
―Everyone is saying government is an obstacle and it needs to be changed Thats whats being
discussed now
BCM membership now stands at an all-time high The seven most recently joined members are
1 Amar Power LLC operates in the fields of construction of power plant and facilities relevant
configuration services consulting service sales and supply of electrical equipments Its skillful
engineering team cooperates with several organizations companies and research institutes of
Russia China the United States Canada Australia Turkey and Poland that perform similar
operations and activities
2 AREC Mortgage Corporation is a non-banking financial institution that specializes in real estate
finance in Ulaanbaatar AMC provides finance on mortgaged property and provides project finance
to real estate developers for their development projects
The banking system in Mongolia is still relatively underdeveloped AMC provides loans to SMEs at
lower rates than would otherwise be available to them All loans are well secured by property
mortgage AREC has a team in Ulaanbaatar that performs property management and asset
management for the assets AREC manages
3 Fiscal Audit provides audit consulting financial statement analyzing tax consulting and financial
statement assurance services from independent position to legal entities and business owners in line
with the Law of Mongolian Auditing Law of Mongolian Accounting and other International Auditing
and Financial statement preparation standards using with professional ethics of auditors
4 Fluor is one of the worldlsquos leading publicly-traded engineering procurement construction
maintenance and project management companies It was ranked No 1 on Fortune magazinelsquos
―Engineering Construction industry list of Americalsquos largest corporations and 1 in the same
category on Fortunelsquos annual survey of ―Worldlsquos Most Admired Companies
It operates over 1000 projects annually serving more than 600 clients in 79 different countries
with 41000 employees executing projects globally It has offices in 29 countries on six continents
and in 2012 celebrated 100 years of exceeding client expectations
5 Khaan Insurance LLC is a national investor-owned insurance company in Mongolia
Khaan Insurance was formed in 2012 to write insurance throughout the Mongolia It has 18 active
branches and was listed in the top 10 entities in terms of equitymdashall in just a year since its
establishment Khaan Insurances reinsurance partners are globally accredited companies
Its core businesses are property casualty and liability insurance
6 NovaTerra advises entrepreneurs large corporations governments financial institutions and
private equity firms Its approach is to be deeply involved with clients in long-term relationships
NovaTerra can invest alongside its clients and further invest part of its success fees into deals or
companies NovaTerra has a proven record in negotiating and closing projects and agreements with
the Mongolian Government
7 Outotec Oyj provides customers with technology solutions and services that support the entire
life cycle of operations Outotec tailors solutions to customerslsquo needs to ensure that they receive
the smartest value from virtually all types of ore while making the least impact on the
environment In addition its global sales and service network guarantees that there is always an
experienced Outotec professional on hand for support
Outotec Mongolia LLC was officially formed in Mongolia from January 2013 It now cooperates with
Erdenet Mining Co Oyu Tolgoi LLC Energy Resources LLC and Boroo Gold
J Bayarmagnai executive director of the Quality Supplier Development Center (a USAID grantee)
spoke first on his organization and its missions to increase the productivity and competitiveness of
small- and medium-size enterprises He said the center acts by intervening to facilitate in
relationships between buyers and suppliers and that its impact can be determined by looking at
added sales as indicators They also look to remove bottle necks that producers face in meeting the
needs of buyers
―This is very exciting because I believe it can bring real quality and value to business said
Bayarmagnai
One example offered was the centers experience with Wagner Asia Equipment LLC which required
a local company able to repair or salvage parts back to specifications The center sought out a
company and found Geomach which assisted in removing bottlenecks such as attaining financing
for a welding machine
―Basically we have no limit he said ―We can help SMEs deliver quality products and services to
buyers
L Sumati director of the Sant Maral Foundation spoke next to discuss progress made in Mongolias
battle against corruption He said it was impossible to deny all the progress made given all the
positive responses in his latest poll which surveyed 1200 people in the business community about
corruption
Sant Maral found that land access to be a leading challenge for businesses in Mongolia leading the
list of grievances since 2006 Other issues included mining licensing customs and regulations
Respondents said the most difficult agencies to work with were the Tax Office Special Inspection
Agency Customs and local authorities ―There may be some optimal time for development for the
future but for today it remains difficult he said
Meanwhile at the household level people reported dramatically less experiences with corruption
with the number of responders who said they had paid bribes falling from a high of 28 percent in
2007 to 8 percent this year He said there were generally positive feelings about the Independent
Agency Against Corruption and the arrests they had made too
D Jigjidmaa investment promotion program manager at the World Banks International Finance
Corp in Mongolia gave the final presentation on investment protections
―Mongolia is not so different from other developing countries especially regarding the political risks
of the last four to five years said Jigjidmaa
She said IFC had been engaged with the Mongolian government since March 2013 to collaborate on
the Investment Law that took effect in November It has also signed a cooperative agreement with
the Ministry of Economic Development to help improve the investment environment This includes
the establishment of a reference guide for complaints made by investors and how government
responded They hope to work closely with the government to improve grievance management and
dispute resolution
―Now were fine-tuning how the mechanism will work Every minister wants control over
investments in the sectors they oversee
The plan she said is to work from January 2014 to the following July to build awareness and a
stakeholder network Afterward they will then benchmark international experiences such as the
improvements made to South Koreas investment environment since 2009 to help direct the
evolution of Mongolias dispute resolution mechanism
BUSINESS
OYU TOLGOI APPROVES 2014 BUDGET
The Oyu Tolgoi LLC board of directors unanimously approved the company program plan and
budget for 2014 The decision was taken at the quarterly board meeting held in Ulaanbaatar from
11 to 12 December
―Itlsquos great to have unanimous board support for the projectlsquos coming year said Craig Kinnell
president and chief executive officer of Oyu Tolgoi ―This is a sign of confidence in the entire
8000-strong Oyu Tolgoi team After safely ramping up production this year welsquore now looking
forward to our first full year of exporting business
Source Turquoise Hill Resources Ltd
OT MINE‟S bdquoPHASE TWO‟ BANK FINANCING PLEDGES EXTENDED
Turquoise Hill Resources Ltd said on Monday that parent Rio Tinto PLC had secured extended
commitments from the banks that have agreed to finance the underground expansion of the Oyu
Tolgoi copper and gold mine The extension to March 31 gives Rio Tinto more time to resolve a
dispute over costs with the government of Mongolia Rio which owns 508 percent of Turquoise Hill
and operates Oyu Tolgoi put the mines more than USD 5 billion expansion on hold in July saying
the Mongolian government wanted parliament to approve the projects financing Mongolia which
will not see its share of Oyu Tolgois profit until Turquoise Hill recovers its costs has complained
that total costs on the first phase were USD 2 billion higher than planned It wants assurances such
overruns will not happen again and hopes to resolve the dispute by early 2014 a government
source told Reuters last month Turquoise Hill which owns 66 percent of Oyu Tolgoi had said in
June that financing commitments would expire Dec 12 The Vancouver-based company announced
a rights offering to raise up to USD 24 billion in November citing the delays at Oyu Tolgoi A
feasibility study for the underground expansion is still on track for the first half of 2014 the
company said on Monday It also confirmed that it expects Oyu Tolgoi to produce 150000 to
175000 tons of copper in concentrates and 700000 to 750000 ounces of gold in concentrates in
2014
Source Reuters
TRAFIGURA AGREES TO OFF-TAKE DEAL FOR OYU TOLGOI MINE
Commodity trader Trafigura has agreed to provide financing for the massive Oyu Tolgoi mine in
exchange for a long-term deal to buy an undisclosed portion of the output it said on Monday
Trafigura which markets a wide range of metals including copper concentrate referred to the off-
take deal in its first fully public annual report since being set up 20 years ago We also provide
finance in exchange for long-term supplies For instance we recently signed an off-take agreement
with Oyu Tolgoi in Mongolia it said giving no further details
Rio Tinto put the mines USD 5 billion expansion on hold in July saying the Mongolian government
wanted Parliament to approve the projects financing Mongolia hoped to resolve the dispute by
early 2014 a government source told Reuters last month Fifteen banks that have agreed to finance
the expansion have told Rio they will extend their commitments which were due to expire at the
end of the year until next March a statement said on Monday Trafigura also said the global copper
market is expected to be broadly in balance next year as low inventories and a recovery in global
growth offset stronger mine output
We dont expect prices to rise markedly but on the other hand with concentrates trading at close
to cost levels for some producing areas a collapse in prices is also unlikely the Trafigura report
said
The benchmark copper price on the London Metal Exchange has shed 83 percent this year weighed
down by more output from new mines such as Oyu Tolgoi and improved operations at many existing
mines The global copper market is expected to widen its surplus next year to 328000 tons from
182000 tons this year analysts polled by Reuters said in October
Source Reuters
OYU TOLGOI TO COOPERATE IN TAVAN TOLGOI POWER PLANT PROJECT
Oyu Tolgoi LLCs board of directors agreed to participate in the Tavan Tolgoi power plant project
following a series of meeting held from 11 to 13 December
The board discussed issues that remain under dispute at the meeting before giving approval of the
2014 budget After the meeting board members announced their plan to cooperate in the Tavan
Tolgoi power plant project Issues regarding involvement and the volume of investment are
expected to be discussed early next year Also discussed was the issue of the underground mine of
Oyu Tolgoi but the board did not come to any conclusion on the matter Both Mongolian and
foreign board members agreed to grant a loan to resolve the funding issue but did not set on a date
of when the loan could be received
Source Montsame
ERDENES TT UNLIKELY TO PAY $160M DEBT TO CHALCO IN 2013 SAYS CEO
Erdenes Tavan Tolgoi LLC will not likely meet its target for paying off debt owed to Aluminum Corp
of China Ltd (Chalco) by the end of this year its chief executive told newspaper Uls Turiin Toim
―To date we have paid off about 60 percent of total debt and the remaining amount is about USD
160 million out of USD 350 million said Erdenes Tavan Tolgoi Chief Executive Officer Yachil
Batsuuri
The state owned coal miner will sell 600000 tons of coal on top of the one million tons of coal
already sold for a net profit of USD 70 million to USD 80 million Batsuuri said A six-month halt in
shipments was the primary factor for delayed payment of total debt owed he said Although
production at Tavan Tolgoi was on target he said the transportation issues prevent it from making
the sales required to fully pay of its debt
―The coal being extracted from the East Tsankhi of the Tavan Tolgoi site is fully devoted to paying
off the Chalco debt of USD 350 million and therefore in order to work benefaction we have been
developing the West Block since July and started to export coal from September this year said
Batsuuri
He said Mongolia had successfully negotiated new terms for coal sales after months of selling its
coal reserves at a below-market rate The current deal is due to expire at the end of 2013 he said
He added that Erdenes Tavan Tolgoi plans to issue shares on international markets in 2015
Source Info Mongolia
RESERVES OF THE TAVAN TOLGOI JSC COAL DEPOSIT INCREASED TWOFOLD
A court ruling has allowed Tavan Tolgoi JSC to expand the size of its operating territory for an
added 70 million tons of reserves
Tavan Tolgoi JSC which operates upon the same coal deposit as Mongolian Mining Corp (MMC) and
Erdenes Tavan Tolgoi (Erdenes TT) saw its total reserves double with the expanded licensed area
Tavan Tolgoi has signed a memorandum of understanding with Chinas Shenhua Group to supply
coking coal for 20 years and will work in cooperation with Erdenes TT MMC and Shenhua for the
construction of a rail line to China
The rail line will connect the Mongolias Gashuun Sukhait port and the Gantsmod port of China
Source Unuudur
SHENHUA TO IMPORT 30-50M TONS OF COKE PER YEAR FROM MONGOLIA
Chinese coal producer Shenhua Group Corp Ltd will import 30 million to 50 million tons of coke
from Mongolia per year in the future
Zhang Guangjun deputy general manager with the Shenhua Science and Technology Research
Institute disclosed at a forum on 4 December that it would import 30 million to 50 million tons of
coke from Mongolia per year in the future Available data shows that the nation imported a total of
about 30 million tons of coke in the first half of this year and in line with industry observers the
import of Shenhua will deliver a strong impact on the domestic coke market
It has taken the group about a decade to gain the exploitation right of a Mongolia-based Tavan
Tolgoi coal mine Policy factors have been the strongest barrier from reaching that goal
Information from the China National Coal Association (CNCA) released on its website at the start of
November shows that it had signed a memorandum of understanding with three Mongolian firms
namely Erdenes Tavan Tolgoi LLC Energy Resources LLC and Tavan Tolgoi JSC on railway
construction cooperation and boosting coal trade And in line with some industry observers this is a
prelude to its success in gaining the exploitation right
Zhang reiterated that its failure to gain the exploitation right had a close tie with foreign
investment policies of Mongolian and so far the government had not even reached a conclusion
internally People in the circle said at the start of October that Mongolia released new policies for
foreign investments recently and according to the policies provided that a state-owned foreign
firm wanted to invest in industries including mining banking communications and news and media
in Mongolia Purchasing a stake exceeding 33 percent in any of these economic sectors by a foreign
state-owned entity requires a nod from concerned Mongolian authorities only at the ministerial
level And this might mean that the threshold for Chinese firms to invest in the Mongolian mining
industry would be lower
Source MENAFN
ERDENET MINING BRINGS MNT 370 BILLION TO STATE BUDGET
Erdenet Mining Co represents 30 percent of government revenues for industry contributing MNT
370 billion to the state budget in the year to December
According to the Erdenet Minings chief executive the amount of MNT 66 billion will go toward the
state by the years end Last year company represented 13 percent of income from taxes 10
percent of gross domestic product (GDP) and 20 percent of total export
Source Zuunii Medee
ASGAT SILVER DEPOSIT TO UNDERGO DEVELOPMENT
The board of Mongolialsquos 51 percent-owned joint venture with Russia Mongolrostsvetmet LLC decided
to begin development of the Asgat silver deposit
Asgat located in northwest Mongolia 1800 kilometers from Ulaanbaatar has a total average ore
reserve of 231 million tons and estimated 246 million ounces of silver The board agreed that the
project is economically viable now that a paved road leading to the development has been
complete The project is owned 51 percent by Erdenes MGL LLC and 49 percent by Russialsquos Rostec
The board agreed to the establishment of a working group to proceed with the next steps for
development
Source Business-Mongoliacom
MIAT TO HIRE FOREIGN-SKILLED MANAGEMENT
The Cabinet of Ministers decided on 14 December to hire a foreign-skilled executive management
team to operate state-owned MIAT Mongolian Airlines
The Cabinet hopes in hiring a foreign management it may produce greater profits increase its
competitiveness ensure greater flight safety and better prepare national staff The Cabinet
relayed orders to the State Property Committee and MIATs representative Council
Source Montsame
STANDARD BANK CONSULTANT DETAINED AMID DEBT DISPUTE
Mongolia has issued a travel ban on a New Zealand national consulting for Standard Bank Group Ltd
amid an escalation in a dispute with a local company over a debt repayment
Chris Bradley was part of a five-person team from Africalsquos biggest lender that visited Ulaanbaatar
last month to seek talks with the government over its USD 131 million in loans to Just Group LLC a
holding company said two people familiar with the matter The people asked not to be named
because they arenlsquot authorized to speak publicly Standard Bank alleges the loans are in default and
filed a lawsuit in July in a London court seeking repayment
Standardlsquos loans were made between 2007 and 2010 to Just Group to fund raw materials supplies
and debt repayments at state-controlled Erdenet Mining Corp and Ulaanbaatar Railways Bradley
said by phone on 2 December that he had been due to depart Mongolia on 29 November but ―is
restricted by the authorities from leaving Bradley said he was advised of his situation by local
police and that he is a suspect in an investigation
―I went in gladly to assist the police and compare notes said Bradley ―We are focusing on the
commercial aspects of this transaction and they are focusing on the criminal aspects The two
although linked are also running in parallel
Mongolia has barred foreign executives from leaving the country during investigations into
companies before Justin Kapla a US citizen and then-president of coal miner SouthGobi Sands
LLC was banned from departing at the end of last year and is still in the country after the nationlsquos
Independent Authority Against Corruption launched a probe into the companylsquos mining licenses
Sharavlamdan Batkhuu Just Grouplsquos controlling shareholder and other companies in the group
have defaulted on loans since 2011 Danjilaa Ganbat director of the banking supervision
department at Mongol Bank the nationlsquos central bank said in July Ganbat made his comments
after Just Grouplsquos Savings Bank Mongolialsquos fifth-largest lender was declared insolvent due to
affiliated companies defaulting on loans Batkhuu and Just Group are among the defendants in the
Standard Bank lawsuit
Standard Bank wasnlsquot able to arrange any meetings with Mongolialsquos government to resolve the debt
dispute the people familiar with the matter said Bradley was the Mongolia specialist on the team
and the only member not directly employed by the bank said one Bradley said he worked as an
employee of Standard Bank from 1999 to 2001 and has consulted on a contract basis for the bank
over the last nine years including five visits to Mongolia since May ―to engage with the government
on our issues the debt recovery
Cabinet Secretary Saikhanbileg Chimed said by e-mail on 3 December that he thinks itlsquos better to
solve the debt dispute out of court and planned to ―push appropriate people to respond
Bradley 50 is a native of Hokitika New Zealand ―In the absence of a New Zealand consulate the
British Embassy is working on behalf of Bradleylsquos consular welfare said Julian Pearson Deputy
Head of Mission at the British Embassy in Ulaanbaatar on 2 December
Source Bloomberg
KHAN BANK OPENS EXPRESS BANKING CENTER
Khan Bank LLC opened an express banking center on 10 December
The Express Banking Center services include a new ATM to deposit cash an E-Corner which allows
customers to make transfers between Khan Bank accounts review accounts through Internet
banking and receive account slips They can also be used to obtain foreign remittances
The Banking Centers are located at the State and Ulaanbaatar department stores on Peace Avenue
and will be open 24 hours every day
Source Khan Bank LLC
ERDENE ANNOUNCES NEW GOLD DISCOVERY AT ALTAN NAR
Erdene Resource Development Corp reported significant gold and silver results from the second
phase of trenching completed during the fourth quarter at its Altan Nar gold-polymetallic project
Results have been received for an additional 11 of the 28 trenches completed The trenching
program was designed to test 10 distinct mineralized zones across the 55-kilometer-long Altan Nar
target area Samples from the final thirteen trenches over the central Altan Nar prospect area have
been submitted to SGS laboratories with results anticipated during first quarter 2014
Highlights include the discovery of a new high-grade gold mineralized zone one kilometer north of
Discovery Zone (Maggie prospect) Significant gold mineralization (Northbow prospect) identified in
the northern portion of a previously untested 700-meter-long anomaly that widens and intensifies
to the south and gold and base metal mineralized zones confirmed at northwestern and
southeastern extent of the 55-kilometer-long Altan Nar target area (Northwest and Far South
prospects) All 11 trenches testing 6 distinct targets returned highly anomalous precious and base
metal mineralization
Source Erdene Resource Development Corp
XANADU MINES FORMS JV FOR COPPER EXPLORATION IN MONGOLIA
Xanadu Mines Ltd has established a joint venture company Mongol Metals with Ganbayar
Lkhagvasuren director and substantial shareholder of Xanadu to execute Xanadulsquos business and
copper exploration strategies
Xanadu recently returned broad copper and gold values from a 780-meter trenching program to test
coincident geophysical and geochemical anomalies at its Oyut Ulaan copper-gold porphyry project
in Mongolia The program has defined three near-surface mineralized porphyry centers with results
up to 85 meters at 075 percent copper with 054 grams per ton gold including 36 meters at 149
percent copper and 102 grams per ton gold The trenching was performed concurrently with the
recent drilling at the Diorite Hill prospect and drill testing of the new targets is scheduled within
the next phase of drilling
Source Proactive Investors
JATENERGY TESTS PROVE CONVERSION OF MONGOLIAN BROWN COAL TO SEMI-COKING COAL
Jatenergy Ltd is on track to pursue its Mongolian coal upgrading plans after testing proved that
coal from the country were highly suitable for conversion using Coal Plus technology
This sets the stage for the immediate start of its investment strategy with Monrospromugoli LLC
which could result in a USD 2 million upfront technology payment and ongoing annual royalties of
USD 176 million The test results had demonstrated that the high moisture high volatile low
calorific Mongolian brown coal can be easily converted into semi-coking coal using Coal Plus
―This report independently verifies that Coal Plus has potential in Mongolia executive chairman
Tony Crimmins said He added ―As the technology is already commercialized and in use in 5
locations in China for over 4 years we see high probability of financing this project in Mongolia
The confirmation that Mongolian brown coal is suited for conversion using Coal Plus into higher
value products paves the way for Jatenergylsquos agreement with Monrospromugoli to go ahead
Source Proactive Investors
SOUTHGOBI RESOURCES ANNOUNCES RESTATED FINANCIAL AND OPERATING RESULTS
SouthGobi Resources Ltd released its regular update on restated financial statements and
management discussion and analysis presentation In the consolidated financial statements for the
year ended 31 December 2012 the restated financial position at 31 December 2012 31 December
2011 and 1 January 2011 the results of operations for the years ended 31 December 2012 and 31
December 2011 and the statement of changes in equity and statement of cash flows for the years
ended 31 December 2012 and 31 December 2011
Following the correction in SouthGobilsquos point of revenue recognition revenues from affected coal
sales contracts are recognized in later periods than previously reported and some revenue has been
reported after 31 December 2012 as not all contracted coal has been collected by customers
During the periods from 2010 to 31 December 2012 trade and other receivables have been adjusted
lower and deferred revenue recognized to reflect revenue being recorded in later periods than
previously reported The inventory balance increased over the same period to reflect higher coal
inventory stockpile balances Prepaid expenses also increased with a corresponding decrease in
trade and other payables as coal sales royalty expenses were recognized in late r periods than
previously reported
The consolidated financial statements auditorslsquo reports and related financial information for the
affected periods contained in SouthGobilsquos filings filed prior to 14 November 2013 should no longer
be relied upon The restatements do not result in a change in cash at the end of any period The
statement of cash flows as reported does not change except for the reclassification of various items
within operating activities
Separately on 19 November 2013 SouthGobi paid USD 81 million in cash to the China Investment
Corporation in accordance with the convertible debenture agreement The amount related to the
64 percent per year cash interest payment and is payable semi-annually Further on 21 November
2013 SouthGobi issued 35 million common shares to China Investment
Source SouthGobi Resources Ltd
MSE CANCELS KHANSH INVEST‟S BROKERAGE LICENSES
The Mongolian Stock Exchange has invalidated the brokerage and securities dealing licenses of
Khansh Invest LLC on 4 December
―The companylsquos clients will be transferred to other brokerage firms that conduct professional
services in the market with licenses for broker-dealer related issues and it shall be governed
according to the concerning jurisdiction and regulations said the Source
Source Mongolian Stock Exchange
MNU PARTNERS WITH UNIVERSITY OF CALIFORNIA FOR RENEWABLE ENERGY
Mongolian National University (MNU) and the University of California announced 13 December the
signing of a memorandum of understanding to conduct high temperature solar thermal technology
research in Mongolia in 2014
Under the terms of the agreement the Mongolian Innovation and Technology Centre at MNU will
have a 100-kilowatt high-temperature non-tracking solar array on their campus that is not only the
first and the largest solar array of its kind in Mongolia but anywhere in the world
―We are delighted to be working with the University of California on this great project and we
particularly excited to make this announcement on the 15th Anniversary of MNU said MNU
Founder and Chairman Munkhbat Lkhagvasuren ―The thermal solar array will be installed
monitored and evaluated by our MNU Engineering Department under the advice and instruction of
the faculty of the University of California Munkhbat said
The technology was developed by University of Californialsquos solar director and professor Roland
Winston who is also a world-renowned scientist in the solar research field Winstonlsquos technology is
already operational at the University of California Purdue University and the Gas Institute of
Chicago although it has not yet been released for commercial deployment anywhere in the world
―My goal in working with MNU is to provide the technology and the staff he said ―Ultimately it
is the Mongolian engineering students that will be required to install and operate these systems as
well as determine the scope of the application beyond simply providing a high temperature heat
source
Source Mongolian National University
MCDONALDS INTERNATIONAL CALLS FOR FRANCHISEE TO POSSIBLY OPEN IN MONGOLIA
McDonalds International sent out a press release on December 10 calling for partners to approach
the company to open its first burger outlets in Mongolia
―We have not set a firm date for the development of McDonalds restaurants in Mongolia In the
future we may take steps to open McDonalds restaurants in Mongolia and if we seek a franchisee to
represent us the person will have the following characteristics
―High integrity business experience in the market history of success ability to work well with a
franchisor ability to complete a training program that can take about nine months willingness to
devote full time to the McDonalds restaurant business retail experience knowledge of real estate
market significant capital
The press release ends by inviting candidates to apply for a franchise
Source BNE
JAPANESE ldquoSUN RICE PLANT OPENS IN MONGOLIA
An opening ceremony for Mongolialsquos Technik Import LLC and Japanlsquos Niigata Kubota ―Sun Rice
factory in Ulaanbaatar on December 10
Niigata brown rice will be imported sorted and packed at the Ulaanbaatar factory which has a
daily capacity for the production of two to three tons of packaged rice The plant is equipped with
fully automated machines from Kubota The rice will begin sale in the domestic markets at MNT
5000 to MNT 7000 per kilogram
―Mongolia has been receiving rice from the people of Japan under aid program for many years
said Deputy Minister B Tsogtgerel ―During the latter event I and Ambassador Takenori Shimizu
were discussing that the period of receiving rice as aid is over and now the time of reciprocal
assistance has come and the ―Sun Rice factory is a sample of joint cooperation to produce the
world known quality in Mongolia
Niigata Prefecture is the second largest producer of rice in Japan after Hokkaido
Source Info Mongolia
MNBC MIGRATES TO DVB-T2 WITH THOMSON VIDEO NETWORKS
Video Mongolia Digital Broadcasting (MNBC) has launched Mongolias first ever DVB-T2 service using
head-end systems from Thomson Video Networks
Launched in 2007 MNBC was Mongolias first digital terrestrial TV network operator and will now be
able to broadcast up to 120 digital TV channels over five UHF transponders to maintain its position
and compete with Mongolias national satellite operator Working with systems integrator Digital
Horizon MNBC has deployed TVNs Vibe EM1000 multi-channel SD encoders and NetProcessor 9030
multiplexer and video processor with an embedded DVB-T2 gateway
Source Rapid TV News
CHINESE FIRM NEGOTIATING TO ACQUIRE JUST AGRO
A Chinese company is in negotiations to purchase Mongolias only meat exporter said a company
source
Just Agro LLC which owns 11 meat companies with the Makh Market brand is reportedly the subject
of negotiations for sale to a Chinese entity said the source who asked not to be named The Just
Agro company provides 40 percent of meat processing and 30 percent of storage in Mongolia and is
the only meat exporter in Mongolia
Last July authorities revealed that Just Grouplsquos Sh Batkhuu falsified signatures of the State
Property Committee and Erdenet Mining Cos director to receive USD 131 million in loans from
South Africas Standard Bank putting up the Erdenet Mine as collateral for the credit After Just
Group was dissolved the central bank took over all its assets including Just Agro
Source Unuudur
MONGOL TV EXPOSES MEDIA CORRUPTION WITH FAKE MCDONALDS STORY
An investigative news show on Mongol TV planted a false news story last week with all 9 of
Mongolias major local media outlets about McDonalds opening a branch in the country The
exercise was undertaken to expose corruption and the rampant practice of paid-for journalism in
Mongolia Mongol TV said
The appearance of a Mr P Rank promising McMutton burgers and goat milk-shakes in the
official press release set off no alarms at the media networks which took between USD 150 and
USD 700 from an undercover journalist to run the story on their websites on the front page of three
newspapers and on TV news on three networks including the local public broadcaster
―Soon the first letter our children learn will be Mlsquo Mr P Rank says with a golden shining smile
according to the fake release which also claimed McDonalds was to be sponsored by Mongolialsquos
Health Ministry and sold in schools all over the country
After Mongol TV unveiled the sting it invited representatives of the 9 duped media organizations to
explain their actions though all reportedly declined
Source Hollywood Reporter
EBRD ADOPTS NEW STRATEGY FOR ENERGY AND NATURAL RESOURCES SECTOR
The European Bank for Reconstruction and Development (EBRD) has adopted a new strategy that
will guide its investments in the energy and natural resources sector for the next five years EBRD
press release reported Tuesday
The bank sets out a commitment to helping its countries of operations move toward a sustainable
energy future The EBRD region which stretches from Morocco to Mongolia is faced with a
challenge of providing sustainable secure and affordable energy The energy strategy identifies
energy efficiency as the first and best response to this challenge
―What the EBRD brings to this challenge is our focus on structural reform said EBRD Managing
Director for Energy and Natural Resources Riccardo Puliti ―We have learnt from our work that
when properly channeled market forces can be harnessed to make energy sectors more sustainable
- environmentally economically and politically
The bank intends building on its well-established support for the Extractive Industries Transparency
Initiative by requiring clients operating in the extractive industries sector to disclose subsoil
contracts and licenses as well as all payments they make to local and national authorities
In the case of coal-fired generation the strategy supports the move to lower-carbon fuel sources in
response to the challenge of climate change In alignment with other international financial
institutions the EBRD will not finance any coal-fired power generation projects except in rare and
exceptional circumstances in which there is no feasible alternative energy source
The strategy also reinforces the EBRDs growing support for renewable energy which will include
financing both energy-generating capacity and key infrastructure such as transmission lines and
backup generation
―We have also developed and invested in the first wind farm in Mongolia - where it was also the
first new energy generator in 30 years said Puliti
Source Trend News Agency
SUSTAINABILITY HOSTS SESA WORKSHOP
Sustainability East Asia LLC organized a National Validation Workshop on 10 December as part of its
responsibilities for establishing a strategic environment and social assessment (SESA)
Participants from across the country arrived to represent government the private sector and non-
government organizations to discuss the proposed SESA The next step will be to assess mining
growth options and identify at least three likely growth scenarios which mining could bring to
Mongolia Afterward the SESA team will evaluate the environmental and social issues that are likely
to arise as a consequence of each scenario
The Mining Sector Institutional Strengthening Technical Assistance Project commissioned
Sustainability to conduct a strategic environmental and social assessment for Mongolias mining
sector
Sustainability will also perform a gap analysis of the legal regulatory and institutional capacity to
deal with each possible scenario An action plan is expected for SESA by summer 2014
Source Sustainability East Asia LLC
UB REGISTERS MATERNITY HOSPITAL NO 1
The new building annex for Maternity Hospital No 1 was registered as capital city property
13 December at a regular session of the Ulaanbaatar Citizens Council This maternity hospital
building was built with financing from Boroo Gold and was presented as a gift to the people of
Mongolia With a capacity to receive 150 mothers and children its total cost was MNT 92 billion It
includes the hospital building of 1169 square meters external heating clean water and sewer
water pipelines a diesel station an asphalt road a pedestrian walkway outdoor vegetation and an
external LED sign
This new building was commissioned 15 June The new annex has one vacuum operation room and
two standard operating rooms on the fifth floor 100 beds for women and 50 beds for infants on the
third and fourth floors paraclinical and sanitation units a pharmacy a conference room and
training rooms on the second floor an ambulatory section and reception on the first floor and staff
cafeteria closets washrooms and a disinfection chamber in the basement
Source Centerra Gold Inc Newsmn
RIO TINTO‟S SAM WALSH DIGS IN FOR THE LONG HAUL
Sam Walsh wants to remain as Rio Tinto PLClsquos chief executive beyond the end of his contract and
has told the minerlsquos board he will not be ready to retire in 2015
―I am there if they want me said Walsh ―Likewise if therelsquos someone else who can come in and
take what Ilsquove done to the next level thatlsquos fine too
The Australian 63 later this month replaced Tom Albanese 11 months ago after Rio decried
―unacceptable writedowns on its coal business in Mozambique Walsh says investors support his
strategy to cut costs and sell non-core assets
Walsh said he has explored selling all of Riolsquos aluminum business this year in what would be a
signature reversal of Albaneselsquos costly purchase of Alcan in 2007 But he says no offers have been
good enough while the business is not generating enough cash for an initial public share offering or
spin-off to Riolsquos shareholders Walsh has also been frustrated in attempts to sell Riolsquos diamonds
business
―Who would thank me if I sold something under value just to get a tick At the end of the day you
have to be pragmatic about things he said Offers ―werenlsquot in the bailiwick of where we thought
they should be
The Alcan deal epitomized Riolsquos poor recent dealmaking and Walsh admits the company had
―relaxed some of the controls it should have had Rio staff has now ―refound their mojo he said
On operating costs which Rio has said it will cut USD 3 billion next year he said ―There is rolling
momentum and thatlsquos important
Source Financial Times
KYRGYZSTAN FILES ECOLOGY DAMAGE LAWSUIT AGAINST CENTERRA
Kyrgyzstan is suing Canadas Centerra Gold Inc for 15 billion soms (USD 304 million) over what the
government says is ecological damage marking a new twist in a bitter row with the investor running
the largest Kyrgyz gold mine
The state environmental protection and forestry agency said in a statement that it had filed the
lawsuit at an economic court in the Kyrgyz capital Bishkek saying Centerra Gold had ignored its
earlier request for voluntary compensation It said the alleged ecological damage included
emissions of pollutants and waste dumps It said its claim referred to the companys operations
between 1996 and 2011
Centerra had said earlier that it viewed the governments claim as exaggerated and unfounded
The company disagrees with these charges and plans to give explanations on this matter in the
nearest time said a spokesman for the Kumtor Operating Company (KOC) the Centerra subsidiary
that runs the Kumtor mine in the Tien Shan mountains
The Toronto-listed miner which also owns the Boroo gold mine in Mongolia is already under
pressure from the Kyrgyz parliament which demands the state hold 67 percent in a proposed joint
venture to run the mine In September the government and Centerra Gold signed a memorandum
of understanding paving the way for Kyrgyzstan to swap its 327 percent stake in the Canadian firm
for 50 percent in a venture that would own Kumtor But in October the legislature voted to tear up
the document and seek control over the planned venture It gave the cabinet until 23 December to
report on its talks with Centerra Gold on setting up the venture Pearson said Centerra is having
constructive dialogue with the Kyrgyz government
Source Reuters
ECONOMY
FITCH AFFIRMS TWO MONGOLIAN BANKS AT B REVISES OUTLOOKS TO bdquoNEGATIVE‟
Fitch Ratings on 16 December revised the outlook on the Long-Term Issuer Default Ratings (IDRs) of
Khan Bank LLC and XacBank LLC to ―Negative from ―Stable At the same time the agency
affirmed the two Mongolian banks IDRs and viability ratings at B and b
The revision of the outlooks on both banks IDRs reflects weakening operating conditions as
indicated by the change in the Outlook for the Mongolian sovereign (B+) to Negative from Stable on
13 December The sovereigns outlook was revised due to mounting risks to the countrys economic
and financial stability Ratings on the two banks could be downgraded if pressures on asset quality
and liquidity intensify Persistent local-currency depreciation would reduce borrowers repayment
capacity and could lead to accelerated deposit withdrawals given the countrys high level of
dollarization
The banks ratings also remain sensitive to the withdrawal of credit stimulus as this could result in
asset deterioration on slowing economic growth or higher inflation Further decline in the
governments international reserves could also trigger a negative rating action as the banks
currency-related risk is counterbalanced by the authorities swap facility and unlimited foreign-
currency conversion Both banks ratings are also sensitive to any changes in their steady access to
capital from private-sector owners
Khan Banks Support Rating and Support Rating Floor (SRF) reflect Fitchs view that as the largest
bank in Mongolia it would be likely to receive state support in case of need However the
Mongolian sovereigns ability to provide timely support to the banking system remains limited as
underlined by its IDR of B+ A downgrade of the sovereign ratings would point to weakening in the
Mongolian governments ability to provide timely support to the banking system which put negative
rating pressure on Khan Banks SR and SRF In contrast Fitch expects XacBanks SR and SRF of 5B-
to be maintained even if the sovereigns rating is downgraded to B This is because the current SR
and SRF already reflect the agencys view that support from the sovereign in case of need cannot
be relied upon
The rating actions are as follows Khan Bank Long-Term Foreign-Currency IDR affirmed at B
Outlook revised to Negative from Stable Short-Term Foreign-Currency IDR affirmed at B Long-
Term Local-Currency IDR affirmed at B Outlook revised to Negative from Stable Viability Rating
affirmed at b Support Rating affirmed at 4 Support Rating Floor affirmed at B XacBank Long-
Term Foreign-Currency IDR affirmed at B Outlook revised to Negative from Stable Short-Term
Foreign-Currency IDR affirmed at B Long-Term Local-Currency IDR affirmed at B Outlook revised
to Negative from Stable Viability Rating affirmed at b Support Rating affirmed at 5 Support
Rating Floor affirmed at B-
Source Fitch Ratings
MONGOLIA SCORE FALLS ON POLITICAL RISKS INDEX FOR MINING INVESTMENT
An annual survey by Behre Dolbear of political risks saw Mongolia decline 5 points in an index
ranking Mongolia 19th out of 25 countries
Mongolia this year received a score of 269 compared with 32 last year Leading the countries
surveyed was Australia down 07 points from last year Russia with a total score of 171 compared
with 16 last year was the lowest ranking
The 25 countries considered in this yearlsquos survey are ranked based on seven criteria
-the countrylsquos economic system
-the countrylsquos political system
-the degree of social issues affecting mining in the country
-delays in receiving permits due to bureaucratic and other issues
-the degree of corruption prevalent in the country
-the stability of the countrylsquos currency and
-the competitiveness of the countrylsquos tax policy
Each criterion is rated on a qualitative scale from one (worst) to 10 (best) that reflects conditions
that promote investment growth in the mining sector The maximum score attainable for a country
is 70 points
Source Behre Dolbear Group
MONGOLIA LOOKS FOR SECOND CHANCE WITH FOREIGN INVESTORS
Saruul Ganbaatar the deputy head of Mongolias stock exchange hopes the countrys days of
interventionist economic policies are over and new laws ensuring foreign investors access to the
frontier markets industries will bring back sorely needed cash
Ganbaatar 32 who cut his investment teeth in Chicagos financial houses after graduating from
Loyola University is careful not to over-promise on what the stock market can deliver in 2014 and
beyond in terms of new listings or overall growth In October a law was passed easing ownership
restrictions for private companies to invest in the strategic industries A Securities Markets Law
coming into effect 1 January 2014 is expected to provide the key ingredient to attract deep
pocketed institutional investors such as mutual funds to invest
This really is the missing ingredient said Ganbaatar who has been traveling the globe promoting
the changes in the laws to global investors for the past two weeks
The stock index fell 19 percent in 2012 and year-to-date is down 115 percent although it did start
to climb with the newly passed laws On 1 January the new Securities Markets Law will allow
Mongolias commercial banks to offer custodial banking services Custodial banks serve as safeguards
for a firm or individuals financial assets playing a critical role in the final settlement of market
transactions Total market capitalization now is between USD 900 million and USD 1 billion Dont
expect the number of new listings to mushroom There may instead be a cull of companies Fifty-
five to 60 of them many of which have not traded in years are being reviewed for potential
delisting
The Mongolian Stock Exchange 100 percent state-owned is perhaps itself a candidate for
privatization It has been in a strategic partnership with the London Stock Exchange for two and a
half years
They have the right of first refusal he said
Source Reuters
CPI INCREASES TO 12 PERCENT YEAR-OVER-YEAR IN NOVEMBER
The National Statistical Office reported a 12 percent increase in the national consumer price index
(CPI) in November year-over-year
The CPI growth which also in November grew 13 percent from the previous month was explained
by a 14 percent increase in food prices and non-alcoholic beverages 23 percent for clothing
footwear and fabrics and 07 percent for housing water electricity and fuels
Source Info Mongolia
GROWTH SEEN IN EXPORT OF PRECIOUS METALS
The export value of precious metals grew 114 percent in November from the month before and 63
percent from the same period in 2012 according to the National Statistical Office
Exports totaled USD 38 billion in the year to December while imports grew to USD 58 billion The
foreign trade balance saw a deficit of USD 2 billion November saw exports of USD 381 million and
imports of USD 514 million with exports and imports in decline between July and November The
value of export products for the first 11 months was USD 11 billion Despite the gain in precious
metal exports exported minerals which represented 81 percent of all exports in the year to
November fell 129 percent from the year before
Source Zuunii Medee
MNT 788 BILLION WILL BE ENTERED INTO THE STABILIZATION FUND
The Stabilization Fund is set to collect MNT 49 billion this year and MNT 298 billion next
The Stabilization Fund was established to collect surplus revenue in years of economic gains from
the mining sector to cushion possible annual losses during economic downturns and weak
commodity demand Any gain in the price for gold and coal next year will also be reflected in
allotments to the fund
Source Zuunii Medee
ECONOMIC DEVELOPMENT MINISTRY PLANS TO PUT 81 OF BUDGET INTO CONSTRUCTION
The Economic Development Ministry plans to invest MNT 814 percent of its total investment budget
into construction
Beginning 1 January 2014 the ministry will provide MNT 9303 in loans toward the construction
sector The ministry will spend 39 percent of its budget for reconstruction and repair 10 percent
for the purchase of new techniques and technical equipment 3996 percent for infrastructure
2743 percent for education and health 636 percent for employment and agriculture and 2926
percent for other sectors of the economy
Projects include the construction of 30 clinics 27 cultural centers 6831 km of paved roads and
1032 m length of bridges Mongolia has received USD 55 billion in aid in the last two decades of
which 55 percent was in the form of low rate loans and 45 percent as non-repayable grants for
investments into agriculture infrastructure power and health sectors
Economic growth since 2011 has allowed Mongolia less aid than in the past The government has
now turned its focus on providing funding with concession agreements to large scale projects such
as the Nariin Sukhait-Shivee paved road and the power station at Mogoin gol Other projects include
Power Plant No 5 the Altanbulag-Ulaanbaatar-Zamyn Uud highway the Tavan Tolgoi- Khanbogd-
Khangi road and the Tuul Songino water reservoir complex
Source Zuunii Medee
TT POWER PLANT MAY NEED CONCLUSION TO OT DISPUTE SAYS DIRECTOR
Uninterrupted development of the Tavan Tolgoi power plant will ride on the outcome of disputes
concerning Oyu Tolgois underground mine said the director of the plant
―One of the main risks is the issue of a main user Enkhsaikhan said ―The key buyer of the power
from the TT Power Plant is OT Due to the uncertainty over phase twolsquo and unresolved matters
with the government of Mongolia OT is not regarded as a reliable buyer on a stand-alone basis
He added that the power company may request a guarantee from Oyu Tolgoi
A consortium that includes Koreas Posco Energy and Daewoo Engineering and Construction GDF
Suez Energy Asia Japans Marubeni Corp and Kansai Electric Power in March was selected for
development of the plant which has a preliminary estimate cost of USD 1 billion Those expenses
include installation of 150 kilometers of electric lines between Tavan Tolgoi and Oyu Tolgoi The
consortium will be expected to raise 30 percent of the cost itself while the remaining 70 percent
will come from bank loans However the uncertainty surrounding the Oyu Tolgoi copper mine could
create more hold ups
Source Zuunii Medee
CABINET TO CONCLUDE CONCESSION ON ALTANBULAG-ZAMYN UUD HIGHWAY
The Cabinet of Ministers ordered ministers to conclude a concession agreement for the Altanbulag-
Ulaanbaatar-Zamyn-Uud highway
The government is planning to establish the concession contract with the Chinggis Land
Development Group which according to the agreement shall have exclusive rights to construction
ownership and transfer of property using its own financing The concessionaire shall complete the
construction within three years after that shall operate the facility for another 30 years before
transferring the ownership to the Government
If Chinggis Land accepts these terms it would be responsible for developing a feasibility study and
blueprint of the project to be approved by the relevant ministries before concluding a financing
agreement The concession agreement will come into effect after the Chinggis Land Development
Group obtains a financing agreement for USD 1 billion from a commercial bank of Mongolia
The government will be responsible for freeing up the land where the highway is planned while the
Chinggis Land would cover the costs for doing so
Source Montsame
MNT 116 BILLION WILL BE SPENT FOR BUILDING EMERGENCY ALARMS IN UB
The National Emergency Management Agency has installed an emergency alarm system in 60
locations of Ulaanbaatar The alarm will alert citizens to natural disasters such as earthquakes
The alarms will be controlled from a center by microwave radios and satellite communication
devices
Source Udriin Sonin
EIU CLARIFIES EXTENT OF OFFICIAL ESTIMATES OF OIL SHALE RESERVES
The latest research from Mongolias mining ministry gives a clearer picture of oil shales
development potential in the coming years Although Mongolia has long been known to have
substantial oil shale deposits previous estimates were extrapolated from rudimentary surveys
conducted in the 1990s and thus left the actual reserves open to speculation
Plans to develop the industry took shape only in April 2013 when an American company Genie
Energy signed a five-year deal with the Petroleum Authority of Mongolia to explore oil shale
reserves in central Mongolia Genie also plans to build a USD 4 billion processing factory in Tuv
Aimag According to government projections the processing plant will generate USD 850 million of
tax revenue annually Aside from the economic benefits of the project domestic fuel sources could
help Mongolia to improve its energy security by loosening the countrys dependence on its powerful
neighbors At present 90 percent of Mongolias oil and related products come from Russia with most
of the remaining amount being imported from China
Yet the benefits of large-scale oil shale extraction are not as clear as they might seem at first
glance Most importantly Mongolias oil shale resources should not be confused with the shale oil
phenomenon that is currently sweeping the United States Oil shale (also called kerogen) is more
expensive to extract than shale oil and carries greater environmental costs In particular oil shale
requires a large amount of water to process which could be a risky proposition in Mongolia where
hydrological resources are already under strain Although other countriesmdashEstonia in particularmdashuse
oil shale as a substitute for coal extracting liquid fuel from the shale is a complex and relatively
untested process
Genie Energys progress on the project seems more substantial than that of comparable coal
liquefaction projects that have faltered in the region However environmental technical and
political limitations suggest that Mongolias overall dependence on foreign fuel will not change
significantly in the foreseeable future
―We remain doubtful that oil shale will play a significant role in Mongolia in the next two years so
our economic growth and trade forecasts will remain unchanged said the Source
Source Economist Intelligence Unit
MONGOLIA AND THE THREAT OF THE RESOURCE CURSE
Mongolia is at a crossroads while investors complain the government is dragging its feet on allowing
miners to start digging it is crucial that it get things right at the early stages of the resources
boom
Mongolias challenge will soon be the worlds says Richard Dobbs and his team at McKinsey in a
report predicting a USD 17 trillion investment bonanza by 2030 to keep up with demand for oil gas
and other materials In 1995 about 58 countries depended on resources for the bulk of their output
and wealth In 2011 that number had risen to 81 By 2030 roughly half of the worlds economies
will essentially become giant filling stations for developing superpowers from China to South Africa
That means that instead of the world moving toward greater transparency democracy and freer
markets we could see rising corruption levels and even greater income inequality
Economies with natural-resource endowments have a huge opportunity to transform their
prospects but history suggests that they could all too easily squander the windfall says Dobbs
director of the McKinsey Global Institute in London
The world would be wise to take steps today to break this cycle McKinsey recommends several
While not terribly original they include strengthening public institutions and good governance
building decent infrastructure boosting national competitiveness promoting sound fiscal policy
making and spending the windfall wisely while engaging in forward-looking economic and social
planning The trouble is that political will and integrity is often the first casualty once the minerals
start flowing out and the spoils come pouring in
Mongolia is at that very crossroads today Investors complain the government is dragging its feet on
allowing miners to start digging But its more important to get things right at the early stages of
the resources boom That means acting now to create the institutions and regulatory frameworks
needed to ensure revenue transparencymdashknowing exactly how much money is being dug out the
ground and where its going Why not set up a sovereign-wealth fund to save for Mongolias future
When the stakes are that high a little patience can go a long way
Source Bloomberg
MONGOLIAS NOMADS WARM TO SOLAR POWER
In Mongolia often known as the land of the blue skies the sun shines for 250 days on average each
year It beats down on the sparse plains and on the Gobi desert that spans the countrys southern
border with China
It shines even during the frigid winter days on the hundreds of thousands of nomads who still roam
the steppes herding animals and living in dome-like tents calling gers About 800000 of Mongolias
28 million inhabitants still live the traditional nomadic lifestyle that has remained largely
unchanged for generations Apart from the addition of motorbikes the occasional petrol generator
and a passing trade from intrepid tourists wanting to stay in a ger for the night life is almost the
same as that of many nomads grandparents and great-grandparents Almost but not exactly
Dotted across the steppes glints of light can be seen as the sun bounces off the solar panels that
have been installed on the sides of gers made of felt and yaks wool At the start of this millennium
Mongolias herders and nomads had little or no access to modern electric power and its potential
benefits But as of 2013 thanks to a concerted push by the Mongolian government almost 70
percent of nomadic people have access to electricity Bor a herder who mainly travels around
western Mongolias Arkhangai province is one of the people whose family benefits from portable
solar home systems (SHS)
We use it for generating the power for lighting in the ger charging phones we can also generate a
fridge to keep food longer and we can run a television That is very useful for us because we can
get the most recent weather forecast which is important for our work and keeping our animals
safe Before we had power it was very difficult Now it is almost like living in the city
The ability to charge mobile phones is also important for the herders who often have children
staying at boarding schools Access to electricity also allows families to contact emergency health-
care and doctors for advice without having to make the often arduous journey to the nearest village
or town
The solar systems were distributed and installed with the help of the World Bank after the
Mongolian governments National 100000 Solar Ger Electrification Program ran into difficulties A
World Bank report Capturing the Sun in the Land of the Blue Sky describes the difficulties faced by
the Mongolian government on its ambitious project
By 2005 five years into the plan 30000 families had been kitted out with an SHS but then the
program began to stagnateThe government of Mongolia recognized that considerably more effort
was necessary not only to keep the program on track but to scale-up implementation in order to
achieve the National 100000 Solar Ger Electrification Program target the report said In 2006 the
World Bank agreed to cover half of the initial outlay costs for each family as well as after-sales
maintenance with 50 centers set up across the country including at least one in each of its 21
provinces so that the herders would not have to travel to Ulaanbaatar every time the solar panels
needed maintenance
The SHS project also offers environmental benefits to a country where the ratio of carbon dioxide
emissions to economic output is ten times higher than the world average because of the increase in
mining over the past decade as the true extent of Mongolias mineral wealth became apparent The
solar systems are slowly replacing the diesel generators used by some nomads as a means of
generating power although they are still using stoves for heating burning wood coal and dung
throughout the year
Source Al Jazeera
IRON-ORE AND COAL PRICES GO SEPARATE WAYS
Prices of the key ingredients in steel productionmdashiron ore and coking coalmdashare moving along sharply
different paths as mining companies resist cutting coal output despite the market being awash with
the raw material
While iron-ore prices have risen 22 percent since May coking coal is still searching for a rebound
Coking-coal prices are off more than 4 percent over the same period China is on course for another
year of record steel production with supply directed to the construction of high-rise apartment
buildings the manufacture of luxury cars and other uses
There is simply too much coal on the market the International Energy Agency said in a report this
week
Shipments of steelmaking coal from Australiamdashthe worlds biggest exporter of the commoditymdashare
forecast by the government to rise to 178 million tons in 2015 from 145 million tons last year Most
goes to China which accounts for 60 percent of global demand In contrast global iron-ore
exporters are struggling to increase output in areas other than Australias remote Pilbara region
supporting prices of that commodity The spot price of iron ore climbed to nearly USD 140 a ton
earlier this month a four-month high Prices have since eased a bit to USD 13430 a ton but
remain well above the consensus forecasts of analysts at the start of this year
Coal miners could scale back production but that isnt always easy to do In Australia many miners
are locked into so-called take or pay contracts with rail and port operators Many analysts dont
expect coking-coal prices to rebound for at least another 12 months RBC Capital Markets expects
coking-coal prices to average USD 154 a ton in 2014 down from USD 159 a ton forecast for this
year Instead they see more chance that iron-ore prices will come down more sharply RBC predicts
an 11 percent fall in iron-ore prices next year as new supply from Anglo Americans Minas Rio
project and mines owned by Fortescue Metals Group Ltd is added to the market UBS is even more
bearish predicting iron ore will fall below USD100 in the second half of 2014
Source Wall Street Journal
ARE COMMODITIES TRADERS bdquoTOO BIG TO FAIL‟
When the banking industrylsquos top lobby group commissioned a report by on commodity trading
houses the idea was to show trading houses like Glencore Xstrata Vitol or Cargill were ―too big to
fail and therefore needed to be regulated in a similar manner to the banks
But instead of highlighting the inherent issues surrounding the industry the report found trading
companies posed less systemic risk than the big banks As a result the Global Financial Markets
Association which commissioned the report decided not to finalize or publish it (The GFMA claims
that it often commissions reports which are shared with regulators and other interested parties but
never published) But the debate hasnlsquot ended
A separate report published in July by the Centre for European Policy Studies a think-tank argued
the growth of commodity trading houses which underpin the global trade in raw materials could
―have systemic implications Commodities trader Trafigura has become the latest to wade into the
debate In its recent prospectus for a EUR 500 million bond issue the worldlsquos second largest metals
trader and third biggest oil trader addresses the GFMA report as well as the issue of systemic risk
Making some tart observations the trading house says the GFMA paper was aimed squarely at the
Financial Stability Board a group of global regulators
―[The report] was widely seen as a tactic by some banks active in the commodity trading space as a
way of creating more equality between market participants by seeking to usher in further
restrictions on pure commodity trading companies the prospectus says
Commodity traders are facing the need to be more open about their operations and lift the veil of
secrecy Indeed the author of the GFMA reportmdashCraig Pirrong a widely respected academicmdashis
working on a white paper on commodities traders Commissioned by Trafigura it will look at what
commodities trading houses activities and the recent trend to accumulate more assets risk
management as well as looking at different types of commodity companies
Source Financial Times
SMOG DARKENS SHANGHAIS PROSPECTS FOR BECOMING A GLOBAL FINANCIAL CENTER
In the debate over which matters more in China money or quality of life the quality-of-life side
may have found the ultimate argument If you cant breathe nothing else really matters And itlsquos a
debate Mongolia has to have as it makes its own steps towards industrial and economic growth
Chinas pollution problem is spreading and growing worse a fact on stark display last week in
Shanghai the countrys financial center A stretch of filthy-air days in that coastal city so
thoroughly shocked residentsmdashwho had largely escaped the smog that has long plagued the likes of
Beijing and Harbinmdashthat it inspired fresh talk about getting away from China Lawrence Shu a
Shanghai-based partner at Hylands Law Firm said he and his friends are thinking more seriously
about moving abroad
The smog had a big impact because it feels really bad if you cant breathe freely he said
The environment used to take a back seat among the Chinese But as they get richer they are
traveling abroad more making the pollution back home more obvious The Internet also
contributes Blue-sky pictures posted on social networks by Chinese travelers abroad constantly
remind folks of what is lacking at home and Chinese now use various apps to track air-quality data
If Shanghais smog discourages smart financial professionals from wanting to live there that will
hinder Chinas effort to create a global financial center If businesses such as financial companies
and luxury-goods makers perceive that Chinas elites are spending more time outside their home
country they will be less willing to invest in China
Most rich Chinese havent packed their bags and left yet but they are keeping their options open
Relocation is a big decision said Anne Wang who works in the financial industry in Shanghai But
just in case she recently received a US visa that would allow her to live there
Source Wall Street Journal
POLITICS
MINERALS POLICY ENTERS FINAL DISCUSSIONS
The government published a final draft of Mongolialsquos State Policy on the Minerals Sector for 2013
through 2025
The document was first presented to Parliament in July and is now entering final discussions during
the autumn plenary session of Parliament following a 42 percent drop of foreign investment and 23
percent fall in the currency year-on-year
―We have reviewed the proposed State Policy on the Mineral Sector which we feel will be a
positive step forward if passed said the Source ―The passing of this policy will result in more
transparency and an increasing participation from foreign investors That said it will take time for
these feats to be accomplished Investors will be weary of Government promises as they seek
longevity to prove Government intentions
The proposed policy is divided into four main sections rationale principles main policy and
implementation-results The major points stressed in the policy include transparency and
responsible mining The law sends the message that growth is going to be driven by private sector
participation and the intent to provide a stable investment environment technological innovation
and value-added activities
Key priorities of the law since it was first unveiled include stability of taxation and the legal
environment an end to any discrimination between foreign and national investors and the
preservation of strategic resources and deposits
This most recent version saw the inclusion of a new section supporting development of local areas
and the interests of local citizens Other key elements include explorationmdashwhich would see
greater government regulation for strategic mineral deposits while cutting down bureaucracy and
conducting scientific researchmdashproduction support and local support The new document also
highlights greater support for non-governmental organizations for the environment allowing them
to claim damages from mining operations the establishment of funds to support economic
diversification environmental protections and land rehabilitation
The new draft has removed the risk assessment section and replaced it with a section on
implementation This includes the improvement of the legal environment and producing of relevant
regulations programs and projects for 2013 to 2015 followed by the implementation of programs
and projects from 2014 to 2025 and finally the provision of conclusions on midterm policy
implementation and further planning for up to 2020 and 2025
―We believe that this policy will take us one step closer to attracting investors and supporting
private sector development in Mongolia said the Source ―Despite current investor hesitation this
state policy in addition to the new amended Minerals Law set to pass next year will further
encourage investors to enter the market and will build support for the junior mining community
Source Mongolian Investment Banking Group
PARLIAMENT UNANIMOUSLY BACKS ldquoSMART GOVERNMENTrdquo INITIATIVE
Parliament has unanimously backed President Tsakhia Elbegdorjs ―From Big Government to Smart
Government initiative for government reform concepts having signed a joint statement of support
on 13 December
The joint statement gives full support to the presidents initiative and commits to cooperation for
its undertaking This includes support for enhancing government systems and policies in line with
democracy and a market economy improving the capacities of public services and curtailing
government intervention into private business affairs Also included are protections to private
business including establishing government structures for rule of law support to domestic
industries and honoring contracts The fight against corruption is another main perogative
On 16 November 16 the Office of the President of Mongolia organized a national consultative
meeting on this topic at the Government Palace Elbegdorj next met with members of the
Parliament on 9 December to organize an open dialogue with representatives of Parliament for an
appeal for them to sign the joint statement Reaffirming the commitment of the Mongolian
lawmakers to a breakthrough reform of the Government the leaders of party floors and factions in
the Parliament and independent members of the Parliament signed the document for the reform on
December 13 2013
Source Montsame
GOVERNMENT CALLS TO END PRACTICE OF APPOINTING MPS AS MINISTERS
The coalition government has thrown their support behind President Tsakhia Elbegdorjs proposal to
prohibit Parliament members from serving as cabinet ministers
Democratic Party members discussed a draft resolution and proposed amendments submitted by the
president for the new restriction at a party meeting on Monday The draft amendments were
unanimously backed by the faction The Justice Coalition which includes the Monglian Peoples
Revolutionary Party and Mongolian Democratic Party came to the same conclusion following its own
meeting said coalition head N Battsereg on Monday
Source Montsame
COMMITTEE LEADERS TO BE ELECTED THIS MONTH
The coalition government will soon be electing officials to lead the various committees in
government
Parliament has 8 standing committees to elect leaders to this month with each committee to be
led by a representative of the coalition government Current committee heads are Ts Tsolmon at
the Security and Foreign Policy Committee G Bayarsaikhan at the Environment Food and
Agriculture Committee Z Bayanselenge at the Social Policy Education Culture and Science
Committee R Burmaa at the Petition and Requests Committee A Bakei at the State Structural
Committee Ts Davaasuren at the Budget Committee Sh Tuvdendorj at the Legislation
Committee and B Garamgaibaatar at the Economic Committee
Source Zuunii Medee
FOREIGN CURRENCY PAYMENTS BANNED FOR MININGEXPLORATION LICENSING FEES
The Ministry of Finance has banned the use of foreign currencies to pay for mining and exploration
licensing fees to the Mineral Resources Authority beginning 1 January 2014
The Ministry of Finance has prompted these entities and companies holding licenses to comply with
Mongolian currency law that states that all businesses and agencies must do business in Mongolian
tugrug According to the 2009 law transactions must not be carried out in foreign denominated or
foreign currency based rates
Source Newsmn
MINING MINISTRY TO COOPERATE WITH ASSOCIATION OF FLUORSPAR EXPLORERS
The Ministry of Mining Wednesday established a memorandum of mutual understanding with the
Association of Fluorspar Explorers (AFE) to cooperate in augmenting the countrylsquos export
In addition to expanding export goals include developing transparent and responsible mining
improving qualities and standards of fluorspar metallurgy and flotation concentrate and in
increasing the production output of the minerallsquos ore enrichment The hope is the memorandum
will create a launching point for a national program for fluorspar its exploitation increase the
volume of production by intensifying research and increase competitiveness in international
markets It will also be necessary to introduce the latest technology to the country along with
running joint trainings with foreign NGOs the Ministry said
Source Montsame
DP REJECTS AMARJARGAL‟S RESIGNATION
Parliament voted against MP R Amarjargallsquos resignation request on 12 December
During Tuesdaylsquos meeting the majority of the Standing Committee on State Structure voted against
Amarjargal`s resignation The head of the Democratic Party (DP) caucus D Erdenebat took a
strong stance against letting Amarjargal leave
Amarjargal said he wanted to resign to take responsibility on behalf of his party members for the
current political situation and economic restraints in Mongolia DP members agree with his
conclusion but encourage him to make the effort and participate for social change and
development Members of the opposition Mongolian Peoplelsquos Party members said that Amarjargal
could see the problems and nature of the majority of Parliament and praised his plan to resign
Source Newsmn
MPP HEAD TO STEP DOWN
Mongolian People Party (MPP) Head N Enkhbold has requested his resignation as party leader
MPP Deputy Head D Oyunkhorol said 9 December that Enkhbold submitted his request to step down
during a party meeting Oyunkhorol said Enkhboldlsquos resignation was due to personal reasons The
new party head will be appointed by the MPPs governing board
Source Udriin Sonin
FIFTH ROUND OF NEGOTIATIONS FOR THE JAPAN-MONGOLIA ECONOMIC PARTNERSHIP
AGREEMENT
The fifth round of the negotiations for the Japan-Mongolia Economic Partnership Agreement (EPA)
will be held from 16 to 19 December in Ulaanbaatar
The Japanese delegation will be led by Jun Yokota ambassador in charge of economic diplomacy
and the Mongolian delegation will be led by Ochirbat Chuluunbat vice minister for economic
development Experts from relevant ministries and agencies of both sides will participate in the
meetings
In this round negotiations are in areas including trade in goods and investment
Source 4-Traderscom
FIRST MONGOLIA-CHINA JOINT BORDER COMMISSION MEETING IN BEIJING
The very first meeting of Mongolia-China joint commission of borders took place 11 and 12
December in Beijing China
This meeting was co-chaired by T Togsbilguun a director of the Department of Neighbour
Countries of Mongolialsquos Ministry of Foreign Affairs and by Xiao Jiangguo a representative of border
checkpoint and seaport affairs Both sides shared on ideas for implementation of the
intergovernmental contract on the border regime and reached some agreements on conducting a
joint examination in the border signs and on activating the collaboration in law enforcement around
frontier areas After this they discussed issues of developing border checkpoints at a same level
putting some border checkpoints into a permanent regime giving an international status to four
checkpoints
The gathered also made a protocol on their meeting and inked its results The next meeting will run
in 2014 in Ulaanbaatar
Source Montsame
BELARUS TO OPEN EMBASSY IN MONGOLIA IN 2014
Belarus will open its embassy in Mongolia in 2014 reads a resolution from the Belarus Council of
Ministers of the Republic of Belarus from 12 December 2013 Belaruslsquo Finance Ministry will finance
the costs of opening and maintaining Belarusian Embassy in Mongolia from the funds set aside in its
national budget for the opening and maintenance of diplomatic missions and consular missions of
the Republic of Belarus abroad
Source Belarusian Telegraph Agency
HOWELL NEW JERSEY USA BECOMES SISTER CITY OF SUKHBAATAR DISTRICT
The Howell Township and the Sukhbaatar district in Mongolia signed a memorandum of
understanding to create sister citieslsquo between Howell New Jersey USA and the Sukhbaatar District
on Tuesday
The program was aimed at opening up talks on how each can benefit from one another Mayor
William Gatto said Howell Township is a very diverse city and theyve taken the relationship with
the Kalmyk community here in Howell and expanded it to a country where they have had no
relationship in the past he said
The sister citieslsquo program will allow both Mongolia and Howell to exchange ideas and come up
with new and better ways to do things that benefits both cultures Outside of Mongolia Howell has
the largest population of Kalmyks in the world with many living in the Freewood Acres section of
the township Gatto said
Some of the goals of the agreement include promoting a common prosperity and development for
both parties an electronic pen-pal program and education opportunities for exchange students
Through a translator Baljinnyam Gan-erdene of the Citizens Representatives Council of Sukhbaatar
District said he came to Howell to see how democracy works in the United States
Im really glad and hope that this unforgettable and successful visit opens the door to our
friendship and prosperity between our residents Gan-erdene said
Gatto gave Gan-erdene a Howell flag and a throw blanket created by the Historical Society
depicting the history of the township Gan-erdene also gave Gatto several items including a bronze
piece of art
Source NJcom
MONGOLIAN CALLIGRAPHY ADDED TO UNESCO CULTURAL HERITAGE LIST
State Parties at the 8th Session of the Intergovernmental Committee for the Safeguarding of the
Intangible Cultural Heritage in Azerbaijan unanimously agreed to register Mongolian calligraphy as
an intangible cultural heritage in need of urgent safeguarding on 2 December
―Mongolian heritage calligraphy is now being recognized by the world and I am grateful on behalf
of my country for decision makers said Secretary-General of Mongolian National Commission for
UNESCO Gundegmaa Jargalsaikhan He noted that Mongolian calligraphy was the fifth cultural
heritage item of Mongolia to be listed and now stands among the Mongolian epic traditional folk
dance the traditional music Tsuur and a circular breathing technique
Mongolian calligraphy is a 1000-year-old writing system that vertically connects continuous strokes
together to create a word Letters of Mongolian script have been created and taught by nomads
from generation to generation During the 1937-1940 purges of the Soviet era thousands of tutors
and traditional scholars of the script were killed Those who remained alive were banned from
mentoring the younger generation Soon after that or around 1946 a new Cyrillic script was
adopted as the only eligible script therefore banning all the teachings of old Mongolian script and
Latin lettering Only in the 1970s was the old Mongolian script re-introduced to scholars allowing a
limited number of classes in universities
After the 1990 democratic changes along with the revival of Mongolian identity interest in
traditional calligraphy reawakened As a sign of such revival the very first non-communist political
organization the Democratic Union of Mongolia used folded calligraphy as its main logo
Source Info Mongolia
THOUGH IMPROVING MONGOLIA STILL REELING UNDER CORRUPTION
The third joint survey by the Asia Foundation and Sant Maral Foundation to gather data on the
perception of corruption in Mongolia revealed that efforts to curb corruption in what is considered
as one of the worldlsquos most corrupt countries could be having impact
The survey shows a significant drop in the percentage of respondents who believe corruption has
increased in the last three years from 389 percent in November 2012 to 183 percent currently In
contrast in 2006 a majority of respondents (63) indicated that corruption has increased ―a lot in
the last three years The survey also shows that corruption has declined in importance as a critical
social problem since 2006 Despite these positive signs overall respondents indicated that
corruption remains a serious issue in some specific key areas
Conducted in September of this year the survey featured face-to-face interviews in 1360
households across Mongolia including seven districts in Ulaanbaatar and 21 counties in six
provinces A majority (766) cited that widespread corruption in the law enforcement agencies is
one of the main reasons the government has been unable to tackle corruption effectively When
corruption is perceived to be this widespread the attention will obviously turn to the performance
of the apex anti-corruption body the Independent Authority Against Corruption (IAAC) The survey
shows that the IAAC is slowly but surely beginning to gain confidence among citizens The
percentage of those surveyed who think that its performance is ―good or ―very good increased
from 78 percent in March 2010 to 203 percent in March 2013 In September 2013 the result shows
a new high of 294 percent
Peoplelsquos perceptions on corruption are often shaped by personal experiences Although very few
respondents in the survey said that they had actually paid a bribe themselves (8 percent about a 3
percent drop from 2012 and an 18 percent drop since 2006) as noted before many are not willing
to report instances where they are asked for one Similarly 36 percent of respondents said they
would not pay a bribe but 26 percent indicated that they would pay if they had the financial
capability
Basanta Pokharel is The Asia Foundation‟s chief of party for the STAGE program in Mongolia He
can be reached at basantapokharelasiafoundationorg The views and opinions expressed here
are those of the individual author and not those of The Asia Foundation
Source Asia Foundation
MPP DEMANDS DISMISSAL OF MINISTERS
Mongolian Peoplelsquos Party Chairman N Enkhbold and party head S Byambatsogt submitted to the
Speaker a request for the dismissal Minister of Finance Chultem Ulaan and of Economic
Development Minister Nyamjav ―Fortuna Batbayar
Our faction believes that these ministers must be held responsible for the worsening of the
national economic situation We also intend to do the same with other ministers after hearing
opinions of people said Byambatsogt
Source Montsame
FORMER TAVAN TOLGOI JSC DIRECTOR ARRESTED
The Independent Agency Against Corruption arrested former Tavan Tolgoi JSC director Kh
Tumenbayar for undisclosed reasons
An unnamed official source suggested that the arrest may be related to abuses of power and
payments to political parties as well as the construction of a high-class hotel in Dalanzadgad Soum
Umnugobi Aimag Kh Tumenbayar is a member of the Democratic Party a member of Parliament
and is an associate of ―Ajnai Bat-Erdene the Minister of Defense who helped Tumenbayar attain
position as the director of Tavan Tolgoi for 6 years and rise to head of the Umnugobi Aimag Citizens
Council
Tumenbayar voluntarily resigned from his position at Tavan Tolgoi last month The IAAC has
reportedly not given details to the reasons for the investigation opened on Tumenbayar because of
possible connections to high-ranking officials
Source Unuudur
MONGOLIA TURKMENISTAN JOIN INTERNATIONAL RACING FEDERATION
The International Federation of Horseracing Authorities (IFHA) has welcomed racing organizations
from Mongolia and Turkmenistan as affiliate members
Recent ratification to IFHA statutes at its annual General Assembly in October created a new
affiliate membership category within the Federation Thus the Federation of Mongolia Horse Racing
Sport and Trainers and the Turkmen Atlary State Association by unanimous vote of the IFHA
Executive Council in Paris in October have become the IFHAlsquos first two affiliate members
The Federation of Mongolian Horse Racing Sport and Trainers (FMHRST) is a non-governmental
organization (NGO) which serves to the development of equestrian sport in Mongolia and works to
protect the rights of horsemen who specialize in this national sport The new affiliates were
announced by IFHA Chairman Louis Romanet this week and several key appointments to IFHA
executive office positions and committees have also been made
Source Horse Talk
MONGOL TV HEAD MEDIA CAN HELP FIX THE BIG PROBLEMS
Nomin Chinbat head of Mongol TV has grander intentions than just ridding the countrys television
business of rampant pirated content and unlicensed formats The young executive wants to help
clean up Mongolian politics and the nation by creating a free and open media
―The networks are used as propaganda channels for politicians They are used very effectively every
four years at election time says Chinbat whom the Source named one of the 25 Most Powerful
Women in Global TV at MIPCOM 2013
―There are laws against piracy but they arenlsquot implemented explains Chinbat who says that
politicians in the country of roughly three million wonlsquot challenge journalists because their
relationships with them are too cozy
Mongol TV has invested in original programming licenses all of its imported content and runs
investigative journalism features highlighting social problems such as alcoholism and corruption
The company is organizing a Mongol TV Day for February 2014 to which it has invited major
international studios to raise awareness of the issues and introduce the global industry to
Mongolia Britainlsquos ITV and Americalsquos CBS are already confirmed and negotiations are ongoing with
other attendees The situation has improved in recent years with some channels having become
what Chinbat calls ―hybrids which license some sports rights but then steal others and copy
formats
―These days some of these channels might license 25 episodes of a format and make 50 But this is
actually progress says Chinbat
Chinbat and her team were at the Asian Television Forum (ATF) in Singapore looking for new
formats that can be produced within the constraints of Mongolian television budgets However with
Mongolias young populationmdash65 percent of the country is under 35 years oldmdashmobile viewing is on
the rise and the network is already working second-screen utilization and new media applications
This demographic sweet spot should guarantee strong growth in the population economy and
nascent entertainment sector in Mongolia in the coming decades
Source Hollywood Reporter
ANNOUNCEMENTS
ldquoMM TODAYrdquo ON MNB-TV FRIDAY 1900 TO 1910
BCM is pleased to announce that Mongolian National Broadcasting continues its cooperation with
BCM on ―MM Today This English news program is aired every Friday for 10 minutes and is
scheduled from 1900 to 1910 tonight Tune in to watch this program that reports stories from
todaylsquos BCM NewsWire
BCM WEBSITES
MONGOLIAN WEBSITE bdquoPRESENTATIONS‟ AND bdquoNEWS‟ SECTIONS
The Presentationslsquo section on BCMlsquos Mongolian website can be reached via bcmmnitgeluud
As a key component of BCMlsquos Mongolian website articles from the Newslsquo section and the
government website Open-Governmentmn are regularly updated
S Oyun Minister of Environment and Green Development presentation at BCM monthly meeting on
May 27 added to Mongolian website bcmongoliaorgmnилтгэлүүд
- Байгаль орчин ногоон хөгжлийн сайд СОюун Байгаль орчин ногоон хөгжлийн шинэчлэлийн
бодлого үйл ажиллагаа МБЗ-ийн сарын уулзалт 5 сарын 27 2013
___________________________________________
ENGLISH WEBSITE PRESENTATIONS MONGOLIA REPORTS bdquoINTERVIEWSbdquo MONGOLIAN
BUSINESS NEWS‟ bdquoPHOTO GALLERY‟
The following 13 presentations are from the Mongolia Investment Summit- 2013 in Hong Kong
November 18-20
- Regulatory Update Navigating Mongolialsquos legal framework for foreign direct investment
Javkhlanbaatar Sereeter Director General Foreign Investment Regulations and Registration
Department MINISTRY OF ECONOMIC DEVELOPMENT OF MONGOLIA
- Investment keynote Investing into Mongolia in 2013 ndash Where do the opportunities lie James
Passin Co-Founder and Manager FIREBIRD MONGOLIA FUND
- Development keynote Key challenges and opportunities for continued growth in Mongolia
Randolph Koppa President TRADE AND DEVELOPMENT BANK OF MONGOLIA
- Outlining government policies and long-term plans for Mongolialsquos mining sector Amarjargal
Khurelbat Head of International Cooperation Division MINISTRY OF MINING OF MONGOLIA
- From copper to met coal Demand and price outlook and expected impact on Mongolialsquos economy
Ghee Peh Managing Director Metals and Mining Research UBS SECURITIES ASIA
- How Mongolian banks and financial institutions are dealing with the challenges and opportunities
of a fast growing economy Norihiko Kato Chief Executive Officer KHAN BANK
- Update on the Mongolian stock market ndash Impact of the new Securities Law Altai Khangai Chief
Executive Officer MONGOLIAN STOCK EXCHANGE
- From investment banking to trade finance to micro credits to insurance Amartuvshin Hanibal
Managing Director TENGER FINANCIAL GROUP LLC
- Spotlight presentations Showcasing Mongolian investment opportunities Peter Morrow Board
Director ASIA PACIFIC INVESTMENT PARTNERS
- Spotlight presentation Showcasing Mongolian investment opportunities Munkhbat Davaatseren
CEO of Golomt Securities GOLOMT BANK
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources
Batmunkh Batkhuu Chairman SHARYN GOL JSC
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources
Jimmie Wilde Chief Operating Officer BERKH UUL JSC
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources Mona
Forster Executive VP ENTREacuteE GOLD INC
The following two presentations are from the ―ANTI-CORRUPTION LEGISLATIONPOLICY
INTERNATIONAL BEST PRACTICE ON TRANSPARENCY training seminar for businesses in
Ulaanbaatar November 18 2013
-―International business standard on transparency by Jelena Pesic Director PwC
-―Finlandlsquos best practice on transparency and anti corruption by Dr Pekka Hallberg (as it is
worldlsquos number one) Emeritus President of the Supreme Administrative Court of Finland
The following 15 presentations are from the Mongolia Mining Summit Perth Australia October 29-
31 2013
bull Mongolialsquos Minerals Future and Development by Otgochuluu Ch Director General Department of
strategic policy and planning at Ministry of Mining Mongolia at the Mongolian Mining Summit 2013
Perth Australia Oct 29-31 2013
bull Mongolian Economy Investment OpportunitiesChallenges Jim Dwyer Executive Director
Business Council of Mongolia at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31
2013
bull Oyu Tolgoi Lessons from the Gobi Houston Spencer Vice President Communications and Media
Relations Oyu Tolgoi at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Market dynamics for Mongolian coking coal in the Chinese market Graeme Hancock President
and Chief Representative at Anglo American Mongolia at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Speech by Mr Ariunbold Byamba Deputy Director Erdenes MGL LLC at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull Launching Mining Projects in MongoliandashA Major Contractorlsquos Perspective Eric Erdenebat
Tseveendorj Country Manager Orica Limited at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Investing in a dynamic legislative environment Elisabeth Ellis Managing Partner Ulaanbaatar
Minter Ellison at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Sandvik In Pit Crushing amp Conveying (IPCC) Doug Turnbull Principal Mining Engineer Sandvik
Mining Systems at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Ovoot Coking Coal Project David Paull Managing Director Aspire Mining at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull The business of being a third neighbor David Landers General Manager East Asian Growth
Markets at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Nuurst Thermal Coal Project Daniel Rohr Chief Financial Officer Modun Resources Ltd at the
Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Culture matters in building sustainable long-term business relationships Hana Tserenkhand
Byambadash Business Development Consultant AusMon Consulting and Dr Christine Hogan Adjunct
Professor Curtin University Consultant amp Author at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Maximizing Business Benefits from Your IT Investment Brad Skeggs Executive Director COSOL at
the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Presentation by Battsengel Gotov CEO Mongolian Mining Corporation at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull Mongolian Mining Sector Present and Future Developments NAlgaa Executive Director
Mongolian National Mining Association at the Mongolian Mining Summit 2013 Perth Australia Oct
29-31 2013
The ―Mongolia Reports section includes the following
- ―Ministry of Finance of Mongolia 2013 Government Debt Auctions by Bank of Mongolia
- ―Doing Business in Mongolia 2013 Country Commercial Guide for US Companies by US
Embassy
- ―Real Estate Report 2013 by Mongolian Properties
- ―Selected Macroeconomic Indicators November 20 2013 by International Monetary Fund
- ―2013 Second Annual Mongolian CEO Survey from PricewaterhouseCoopers Audit LLC
- ―Selected Macroeconomic Indicators data through October 16 2013 by International Monetary
Fund
- ―IMF Completes 2013 Article IV Mission to Mongolia by International Monetary Fund
The following are added to Interview Section from the Oxford Business Group Mongolia Reports
2013 book
bull B Byambasaikhan Chairman Business Council of Mongolia ―Talk is cheap
bull President Ts Elbegdorj ―Diversifying for growth
bull Jim Dwyer Executive Director Business Council of Mongolia ―Non-mining sectors budding
bull Peter Morrow Chairman American University of Mongolia ―Filling in the blanks
bull N Zoljargal Governor Bank of Mongolia ―Sustainable vision
bull Gansukh Minister of Roads and Transportation ―Accessing new markets
bull J Od President MCS Group ―Building interest
bull B Chuluunbaatar President and CEO of Monnis Group ―Climbing the ranks
bull Cameron McRae President and CEO Oyu Tolgoi ―Sitting on a copper mine
BCMs English website includes the ―Mongolia Business News section where the Open Letter to
Parliament and Government is available for download
BCM continuously posts news stories and analysis of relevance to Mongolia at Mongolian Business
News before they are all put together each week for Fridays weekly NewsWire
The ―Photo Gallery contains photos from the 6th Anniversary BCM Renewal dinner on November
11 2013
BCM Football Cup 2013 pictures are posted to the website - httpbcmongoliaorgenphotos350-
enalbumalbumid=200
The BCM NewsWire will continue to be issued each Friday incorporating items already on the home
page for a consolidated account of the weeklsquos events
SOCIAL NETWORK WITH BCM
BCM LAUNCHES NEW LINKED-IN COMPANY PAGE
The Business Council of Mongolia has launched a new company page on the social networking
website LinkedIn to network its members and followers including small-medium enterprises (SMEs)
The new page will allow BCM to alert followers to the latest news and information critical to their
businesses Memberslsquo businesses will be promoted Additionally BCM plans to deliver monthly
infographics on the latest data as well as videos and other media content as they come The bulk of
the content on the new page will be in Mongolian language to better cater to BCMs Mongolian-
speaking audience and members The following link can direct you to the New BCMs Linked-in page
httpwwwlinkedincomcompanybusiness-council-of-mongoliatrk=company_logo
The Business Council of Mongolia (BCM) has expanded its reach to your favorite social networks
Keep up to date on the latest business deals in Mongolia and how the climate for investment is
improving each day with BCM
Add BCM on Facebook at httpswwwfacebookcomTheBusinessCouncilOfMongolia to read the
latest announcements and comment on events carried in the NewsWire with the community
Hear breaking news and announcements as they happen when you follow BCM on Twitter at
httpstwittercombcmongolia
We have now 2482 fans on our Facebook fans page 1527 connections on LinkedIn network and
835 followers on Twitter
Of course for news information interviews event photos and announcements regarding our
organization visit the official BCM website at httpbcmongoliaorgen
ECONOMIC INDICATORS
INFLATION
Year 2006 60 [source National Statistical Office of Mongolia (NSOM)]
Year 2007 151 [source NSOM]
Year 2008 221 [source NSOM]
Year 2009 42 [source NSOM]
Year 2010 130 [source NSOM]
Year 2011 102 [source NSOM]
November 30 2013 120 [source NSOM]
Year-over-year (y-o-y) nationwide
Note 111 y-o-y Ulaanbaatar city November 30 2013
CENTRAL BANK POLICY LOAN RATE
December 31 2008 975 [source IMF]
March 11 2009 1400 [source IMF]
May 12 2009 1275 [source IMF]
June 12 2009 1150 [source IMF]
September 30 2009 1000 [source IMF]
May 12 2010 1100 [source IMF]
April 28 2011 1150 [source IMF]
August 25 2011 1175 [source IMF]
October 25 2011 1225 [source IMF]
March 19 2012 1275 [source Mongol Bank]
April 18 2012 1325 [source Mongol Bank]
January 25 2013 1250 [source Mongol Bank]
April 8 2013 1150 [source Mongol Bank]
June 25 2013 1050 [source Mongol Bank]
CURRENCY RATES ndash DECEMBER 19 2013
Currency Name Currency Rate
US dollar USD 164138
Euro EUR 224680
Japanese yen JPY 1579
British pound GBP 268874
Hong Kong dollar HKD 21170
Chinese Yuan CNY 27031
Russian Ruble RUB 4981
South Korean won KRW 155
Disclaimer Except for reporting on BCMlsquos activities all information in the BCM NewsWire is
selected from various news sources Opinions are those of the respective news sources
Growth seen in export of precious metals
MNT 788 billion will be entered into the Stabilization Fund
Economic Development Ministry plans to put 81 of budget into construction
TT power plant may need conclusion to OT dispute says director
Cabinet to conclude concession on Altanbulag-Zamyn Uud highway
MNT 116 billion will be spent for building emergency alarms in UB
EIU clarifies extent of official estimates of oil shale reserves
Mongolia and the threat of the resource curse
Mongolias nomads warm to solar power
Iron-ore and coal prices go separate ways
Are commodities traders bdquotoo big to fail‟
Smog darkens Shanghais prospects for becoming a global financial center
Politics
Minerals Policy enters final discussions
Parliament unanimously backs ldquoSmart Governmentrdquo initiative
Government calls to end practice of appointing MPs as ministers
Committee leaders to be elected this month
Foreign currency banned for miningexploration licensing fees
Mining Ministry to cooperate with Association of Fluorspar Explorers
DP rejects Amarjargal‟s resignation
MPP head to step down
Fifth round of negotiations for the Japan-Mongolia Economic Partnership Agreement
First Mongolia-China joint border commission meeting in Beijing
Belarus to open embassy in Mongolia in 2014
Howell New Jersey USA becomes sister city of Sukhbaatar district
Mongolian calligraphy added to UNESCO Cultural Heritage List
Though Improving Mongolia still reeling under corruption
MPP demands dismissal of ministers
Former Tavan Tolgoi JSC director arrested
Mongolia Turkmenistan join international racing federation
Mongol TV head media can help fix the big problems
ECONOMIC INDICATORS
MSE Top 20 Index by market Capitalization
Foreign-listed Companies with Mongolian Assets
Inflation
Central bank policy rate
Currency rates
Click on titles above to link to articles
SPONSORS
Khan Bank
International SOS
Wagner Asia Automotive
Oxford Business Group
Mongolian National Broadcasting
Breakthrough PR
BCM MONTHLY MEETING RECAP
The BCM meeting on 9 December with Bayanjargal Byambasaikhan in the chair was attended by 80
members and invited guests Byambasaikhan made reference to the changes made to the legal
environment for investors and how the president is putting his efforts into creating a ―smart
government to improve things even further
―I think this message is of a change for the economic life of Mongolia said Byambasaikhan
―Everyone is saying government is an obstacle and it needs to be changed Thats whats being
discussed now
BCM membership now stands at an all-time high The seven most recently joined members are
1 Amar Power LLC operates in the fields of construction of power plant and facilities relevant
configuration services consulting service sales and supply of electrical equipments Its skillful
engineering team cooperates with several organizations companies and research institutes of
Russia China the United States Canada Australia Turkey and Poland that perform similar
operations and activities
2 AREC Mortgage Corporation is a non-banking financial institution that specializes in real estate
finance in Ulaanbaatar AMC provides finance on mortgaged property and provides project finance
to real estate developers for their development projects
The banking system in Mongolia is still relatively underdeveloped AMC provides loans to SMEs at
lower rates than would otherwise be available to them All loans are well secured by property
mortgage AREC has a team in Ulaanbaatar that performs property management and asset
management for the assets AREC manages
3 Fiscal Audit provides audit consulting financial statement analyzing tax consulting and financial
statement assurance services from independent position to legal entities and business owners in line
with the Law of Mongolian Auditing Law of Mongolian Accounting and other International Auditing
and Financial statement preparation standards using with professional ethics of auditors
4 Fluor is one of the worldlsquos leading publicly-traded engineering procurement construction
maintenance and project management companies It was ranked No 1 on Fortune magazinelsquos
―Engineering Construction industry list of Americalsquos largest corporations and 1 in the same
category on Fortunelsquos annual survey of ―Worldlsquos Most Admired Companies
It operates over 1000 projects annually serving more than 600 clients in 79 different countries
with 41000 employees executing projects globally It has offices in 29 countries on six continents
and in 2012 celebrated 100 years of exceeding client expectations
5 Khaan Insurance LLC is a national investor-owned insurance company in Mongolia
Khaan Insurance was formed in 2012 to write insurance throughout the Mongolia It has 18 active
branches and was listed in the top 10 entities in terms of equitymdashall in just a year since its
establishment Khaan Insurances reinsurance partners are globally accredited companies
Its core businesses are property casualty and liability insurance
6 NovaTerra advises entrepreneurs large corporations governments financial institutions and
private equity firms Its approach is to be deeply involved with clients in long-term relationships
NovaTerra can invest alongside its clients and further invest part of its success fees into deals or
companies NovaTerra has a proven record in negotiating and closing projects and agreements with
the Mongolian Government
7 Outotec Oyj provides customers with technology solutions and services that support the entire
life cycle of operations Outotec tailors solutions to customerslsquo needs to ensure that they receive
the smartest value from virtually all types of ore while making the least impact on the
environment In addition its global sales and service network guarantees that there is always an
experienced Outotec professional on hand for support
Outotec Mongolia LLC was officially formed in Mongolia from January 2013 It now cooperates with
Erdenet Mining Co Oyu Tolgoi LLC Energy Resources LLC and Boroo Gold
J Bayarmagnai executive director of the Quality Supplier Development Center (a USAID grantee)
spoke first on his organization and its missions to increase the productivity and competitiveness of
small- and medium-size enterprises He said the center acts by intervening to facilitate in
relationships between buyers and suppliers and that its impact can be determined by looking at
added sales as indicators They also look to remove bottle necks that producers face in meeting the
needs of buyers
―This is very exciting because I believe it can bring real quality and value to business said
Bayarmagnai
One example offered was the centers experience with Wagner Asia Equipment LLC which required
a local company able to repair or salvage parts back to specifications The center sought out a
company and found Geomach which assisted in removing bottlenecks such as attaining financing
for a welding machine
―Basically we have no limit he said ―We can help SMEs deliver quality products and services to
buyers
L Sumati director of the Sant Maral Foundation spoke next to discuss progress made in Mongolias
battle against corruption He said it was impossible to deny all the progress made given all the
positive responses in his latest poll which surveyed 1200 people in the business community about
corruption
Sant Maral found that land access to be a leading challenge for businesses in Mongolia leading the
list of grievances since 2006 Other issues included mining licensing customs and regulations
Respondents said the most difficult agencies to work with were the Tax Office Special Inspection
Agency Customs and local authorities ―There may be some optimal time for development for the
future but for today it remains difficult he said
Meanwhile at the household level people reported dramatically less experiences with corruption
with the number of responders who said they had paid bribes falling from a high of 28 percent in
2007 to 8 percent this year He said there were generally positive feelings about the Independent
Agency Against Corruption and the arrests they had made too
D Jigjidmaa investment promotion program manager at the World Banks International Finance
Corp in Mongolia gave the final presentation on investment protections
―Mongolia is not so different from other developing countries especially regarding the political risks
of the last four to five years said Jigjidmaa
She said IFC had been engaged with the Mongolian government since March 2013 to collaborate on
the Investment Law that took effect in November It has also signed a cooperative agreement with
the Ministry of Economic Development to help improve the investment environment This includes
the establishment of a reference guide for complaints made by investors and how government
responded They hope to work closely with the government to improve grievance management and
dispute resolution
―Now were fine-tuning how the mechanism will work Every minister wants control over
investments in the sectors they oversee
The plan she said is to work from January 2014 to the following July to build awareness and a
stakeholder network Afterward they will then benchmark international experiences such as the
improvements made to South Koreas investment environment since 2009 to help direct the
evolution of Mongolias dispute resolution mechanism
BUSINESS
OYU TOLGOI APPROVES 2014 BUDGET
The Oyu Tolgoi LLC board of directors unanimously approved the company program plan and
budget for 2014 The decision was taken at the quarterly board meeting held in Ulaanbaatar from
11 to 12 December
―Itlsquos great to have unanimous board support for the projectlsquos coming year said Craig Kinnell
president and chief executive officer of Oyu Tolgoi ―This is a sign of confidence in the entire
8000-strong Oyu Tolgoi team After safely ramping up production this year welsquore now looking
forward to our first full year of exporting business
Source Turquoise Hill Resources Ltd
OT MINE‟S bdquoPHASE TWO‟ BANK FINANCING PLEDGES EXTENDED
Turquoise Hill Resources Ltd said on Monday that parent Rio Tinto PLC had secured extended
commitments from the banks that have agreed to finance the underground expansion of the Oyu
Tolgoi copper and gold mine The extension to March 31 gives Rio Tinto more time to resolve a
dispute over costs with the government of Mongolia Rio which owns 508 percent of Turquoise Hill
and operates Oyu Tolgoi put the mines more than USD 5 billion expansion on hold in July saying
the Mongolian government wanted parliament to approve the projects financing Mongolia which
will not see its share of Oyu Tolgois profit until Turquoise Hill recovers its costs has complained
that total costs on the first phase were USD 2 billion higher than planned It wants assurances such
overruns will not happen again and hopes to resolve the dispute by early 2014 a government
source told Reuters last month Turquoise Hill which owns 66 percent of Oyu Tolgoi had said in
June that financing commitments would expire Dec 12 The Vancouver-based company announced
a rights offering to raise up to USD 24 billion in November citing the delays at Oyu Tolgoi A
feasibility study for the underground expansion is still on track for the first half of 2014 the
company said on Monday It also confirmed that it expects Oyu Tolgoi to produce 150000 to
175000 tons of copper in concentrates and 700000 to 750000 ounces of gold in concentrates in
2014
Source Reuters
TRAFIGURA AGREES TO OFF-TAKE DEAL FOR OYU TOLGOI MINE
Commodity trader Trafigura has agreed to provide financing for the massive Oyu Tolgoi mine in
exchange for a long-term deal to buy an undisclosed portion of the output it said on Monday
Trafigura which markets a wide range of metals including copper concentrate referred to the off-
take deal in its first fully public annual report since being set up 20 years ago We also provide
finance in exchange for long-term supplies For instance we recently signed an off-take agreement
with Oyu Tolgoi in Mongolia it said giving no further details
Rio Tinto put the mines USD 5 billion expansion on hold in July saying the Mongolian government
wanted Parliament to approve the projects financing Mongolia hoped to resolve the dispute by
early 2014 a government source told Reuters last month Fifteen banks that have agreed to finance
the expansion have told Rio they will extend their commitments which were due to expire at the
end of the year until next March a statement said on Monday Trafigura also said the global copper
market is expected to be broadly in balance next year as low inventories and a recovery in global
growth offset stronger mine output
We dont expect prices to rise markedly but on the other hand with concentrates trading at close
to cost levels for some producing areas a collapse in prices is also unlikely the Trafigura report
said
The benchmark copper price on the London Metal Exchange has shed 83 percent this year weighed
down by more output from new mines such as Oyu Tolgoi and improved operations at many existing
mines The global copper market is expected to widen its surplus next year to 328000 tons from
182000 tons this year analysts polled by Reuters said in October
Source Reuters
OYU TOLGOI TO COOPERATE IN TAVAN TOLGOI POWER PLANT PROJECT
Oyu Tolgoi LLCs board of directors agreed to participate in the Tavan Tolgoi power plant project
following a series of meeting held from 11 to 13 December
The board discussed issues that remain under dispute at the meeting before giving approval of the
2014 budget After the meeting board members announced their plan to cooperate in the Tavan
Tolgoi power plant project Issues regarding involvement and the volume of investment are
expected to be discussed early next year Also discussed was the issue of the underground mine of
Oyu Tolgoi but the board did not come to any conclusion on the matter Both Mongolian and
foreign board members agreed to grant a loan to resolve the funding issue but did not set on a date
of when the loan could be received
Source Montsame
ERDENES TT UNLIKELY TO PAY $160M DEBT TO CHALCO IN 2013 SAYS CEO
Erdenes Tavan Tolgoi LLC will not likely meet its target for paying off debt owed to Aluminum Corp
of China Ltd (Chalco) by the end of this year its chief executive told newspaper Uls Turiin Toim
―To date we have paid off about 60 percent of total debt and the remaining amount is about USD
160 million out of USD 350 million said Erdenes Tavan Tolgoi Chief Executive Officer Yachil
Batsuuri
The state owned coal miner will sell 600000 tons of coal on top of the one million tons of coal
already sold for a net profit of USD 70 million to USD 80 million Batsuuri said A six-month halt in
shipments was the primary factor for delayed payment of total debt owed he said Although
production at Tavan Tolgoi was on target he said the transportation issues prevent it from making
the sales required to fully pay of its debt
―The coal being extracted from the East Tsankhi of the Tavan Tolgoi site is fully devoted to paying
off the Chalco debt of USD 350 million and therefore in order to work benefaction we have been
developing the West Block since July and started to export coal from September this year said
Batsuuri
He said Mongolia had successfully negotiated new terms for coal sales after months of selling its
coal reserves at a below-market rate The current deal is due to expire at the end of 2013 he said
He added that Erdenes Tavan Tolgoi plans to issue shares on international markets in 2015
Source Info Mongolia
RESERVES OF THE TAVAN TOLGOI JSC COAL DEPOSIT INCREASED TWOFOLD
A court ruling has allowed Tavan Tolgoi JSC to expand the size of its operating territory for an
added 70 million tons of reserves
Tavan Tolgoi JSC which operates upon the same coal deposit as Mongolian Mining Corp (MMC) and
Erdenes Tavan Tolgoi (Erdenes TT) saw its total reserves double with the expanded licensed area
Tavan Tolgoi has signed a memorandum of understanding with Chinas Shenhua Group to supply
coking coal for 20 years and will work in cooperation with Erdenes TT MMC and Shenhua for the
construction of a rail line to China
The rail line will connect the Mongolias Gashuun Sukhait port and the Gantsmod port of China
Source Unuudur
SHENHUA TO IMPORT 30-50M TONS OF COKE PER YEAR FROM MONGOLIA
Chinese coal producer Shenhua Group Corp Ltd will import 30 million to 50 million tons of coke
from Mongolia per year in the future
Zhang Guangjun deputy general manager with the Shenhua Science and Technology Research
Institute disclosed at a forum on 4 December that it would import 30 million to 50 million tons of
coke from Mongolia per year in the future Available data shows that the nation imported a total of
about 30 million tons of coke in the first half of this year and in line with industry observers the
import of Shenhua will deliver a strong impact on the domestic coke market
It has taken the group about a decade to gain the exploitation right of a Mongolia-based Tavan
Tolgoi coal mine Policy factors have been the strongest barrier from reaching that goal
Information from the China National Coal Association (CNCA) released on its website at the start of
November shows that it had signed a memorandum of understanding with three Mongolian firms
namely Erdenes Tavan Tolgoi LLC Energy Resources LLC and Tavan Tolgoi JSC on railway
construction cooperation and boosting coal trade And in line with some industry observers this is a
prelude to its success in gaining the exploitation right
Zhang reiterated that its failure to gain the exploitation right had a close tie with foreign
investment policies of Mongolian and so far the government had not even reached a conclusion
internally People in the circle said at the start of October that Mongolia released new policies for
foreign investments recently and according to the policies provided that a state-owned foreign
firm wanted to invest in industries including mining banking communications and news and media
in Mongolia Purchasing a stake exceeding 33 percent in any of these economic sectors by a foreign
state-owned entity requires a nod from concerned Mongolian authorities only at the ministerial
level And this might mean that the threshold for Chinese firms to invest in the Mongolian mining
industry would be lower
Source MENAFN
ERDENET MINING BRINGS MNT 370 BILLION TO STATE BUDGET
Erdenet Mining Co represents 30 percent of government revenues for industry contributing MNT
370 billion to the state budget in the year to December
According to the Erdenet Minings chief executive the amount of MNT 66 billion will go toward the
state by the years end Last year company represented 13 percent of income from taxes 10
percent of gross domestic product (GDP) and 20 percent of total export
Source Zuunii Medee
ASGAT SILVER DEPOSIT TO UNDERGO DEVELOPMENT
The board of Mongolialsquos 51 percent-owned joint venture with Russia Mongolrostsvetmet LLC decided
to begin development of the Asgat silver deposit
Asgat located in northwest Mongolia 1800 kilometers from Ulaanbaatar has a total average ore
reserve of 231 million tons and estimated 246 million ounces of silver The board agreed that the
project is economically viable now that a paved road leading to the development has been
complete The project is owned 51 percent by Erdenes MGL LLC and 49 percent by Russialsquos Rostec
The board agreed to the establishment of a working group to proceed with the next steps for
development
Source Business-Mongoliacom
MIAT TO HIRE FOREIGN-SKILLED MANAGEMENT
The Cabinet of Ministers decided on 14 December to hire a foreign-skilled executive management
team to operate state-owned MIAT Mongolian Airlines
The Cabinet hopes in hiring a foreign management it may produce greater profits increase its
competitiveness ensure greater flight safety and better prepare national staff The Cabinet
relayed orders to the State Property Committee and MIATs representative Council
Source Montsame
STANDARD BANK CONSULTANT DETAINED AMID DEBT DISPUTE
Mongolia has issued a travel ban on a New Zealand national consulting for Standard Bank Group Ltd
amid an escalation in a dispute with a local company over a debt repayment
Chris Bradley was part of a five-person team from Africalsquos biggest lender that visited Ulaanbaatar
last month to seek talks with the government over its USD 131 million in loans to Just Group LLC a
holding company said two people familiar with the matter The people asked not to be named
because they arenlsquot authorized to speak publicly Standard Bank alleges the loans are in default and
filed a lawsuit in July in a London court seeking repayment
Standardlsquos loans were made between 2007 and 2010 to Just Group to fund raw materials supplies
and debt repayments at state-controlled Erdenet Mining Corp and Ulaanbaatar Railways Bradley
said by phone on 2 December that he had been due to depart Mongolia on 29 November but ―is
restricted by the authorities from leaving Bradley said he was advised of his situation by local
police and that he is a suspect in an investigation
―I went in gladly to assist the police and compare notes said Bradley ―We are focusing on the
commercial aspects of this transaction and they are focusing on the criminal aspects The two
although linked are also running in parallel
Mongolia has barred foreign executives from leaving the country during investigations into
companies before Justin Kapla a US citizen and then-president of coal miner SouthGobi Sands
LLC was banned from departing at the end of last year and is still in the country after the nationlsquos
Independent Authority Against Corruption launched a probe into the companylsquos mining licenses
Sharavlamdan Batkhuu Just Grouplsquos controlling shareholder and other companies in the group
have defaulted on loans since 2011 Danjilaa Ganbat director of the banking supervision
department at Mongol Bank the nationlsquos central bank said in July Ganbat made his comments
after Just Grouplsquos Savings Bank Mongolialsquos fifth-largest lender was declared insolvent due to
affiliated companies defaulting on loans Batkhuu and Just Group are among the defendants in the
Standard Bank lawsuit
Standard Bank wasnlsquot able to arrange any meetings with Mongolialsquos government to resolve the debt
dispute the people familiar with the matter said Bradley was the Mongolia specialist on the team
and the only member not directly employed by the bank said one Bradley said he worked as an
employee of Standard Bank from 1999 to 2001 and has consulted on a contract basis for the bank
over the last nine years including five visits to Mongolia since May ―to engage with the government
on our issues the debt recovery
Cabinet Secretary Saikhanbileg Chimed said by e-mail on 3 December that he thinks itlsquos better to
solve the debt dispute out of court and planned to ―push appropriate people to respond
Bradley 50 is a native of Hokitika New Zealand ―In the absence of a New Zealand consulate the
British Embassy is working on behalf of Bradleylsquos consular welfare said Julian Pearson Deputy
Head of Mission at the British Embassy in Ulaanbaatar on 2 December
Source Bloomberg
KHAN BANK OPENS EXPRESS BANKING CENTER
Khan Bank LLC opened an express banking center on 10 December
The Express Banking Center services include a new ATM to deposit cash an E-Corner which allows
customers to make transfers between Khan Bank accounts review accounts through Internet
banking and receive account slips They can also be used to obtain foreign remittances
The Banking Centers are located at the State and Ulaanbaatar department stores on Peace Avenue
and will be open 24 hours every day
Source Khan Bank LLC
ERDENE ANNOUNCES NEW GOLD DISCOVERY AT ALTAN NAR
Erdene Resource Development Corp reported significant gold and silver results from the second
phase of trenching completed during the fourth quarter at its Altan Nar gold-polymetallic project
Results have been received for an additional 11 of the 28 trenches completed The trenching
program was designed to test 10 distinct mineralized zones across the 55-kilometer-long Altan Nar
target area Samples from the final thirteen trenches over the central Altan Nar prospect area have
been submitted to SGS laboratories with results anticipated during first quarter 2014
Highlights include the discovery of a new high-grade gold mineralized zone one kilometer north of
Discovery Zone (Maggie prospect) Significant gold mineralization (Northbow prospect) identified in
the northern portion of a previously untested 700-meter-long anomaly that widens and intensifies
to the south and gold and base metal mineralized zones confirmed at northwestern and
southeastern extent of the 55-kilometer-long Altan Nar target area (Northwest and Far South
prospects) All 11 trenches testing 6 distinct targets returned highly anomalous precious and base
metal mineralization
Source Erdene Resource Development Corp
XANADU MINES FORMS JV FOR COPPER EXPLORATION IN MONGOLIA
Xanadu Mines Ltd has established a joint venture company Mongol Metals with Ganbayar
Lkhagvasuren director and substantial shareholder of Xanadu to execute Xanadulsquos business and
copper exploration strategies
Xanadu recently returned broad copper and gold values from a 780-meter trenching program to test
coincident geophysical and geochemical anomalies at its Oyut Ulaan copper-gold porphyry project
in Mongolia The program has defined three near-surface mineralized porphyry centers with results
up to 85 meters at 075 percent copper with 054 grams per ton gold including 36 meters at 149
percent copper and 102 grams per ton gold The trenching was performed concurrently with the
recent drilling at the Diorite Hill prospect and drill testing of the new targets is scheduled within
the next phase of drilling
Source Proactive Investors
JATENERGY TESTS PROVE CONVERSION OF MONGOLIAN BROWN COAL TO SEMI-COKING COAL
Jatenergy Ltd is on track to pursue its Mongolian coal upgrading plans after testing proved that
coal from the country were highly suitable for conversion using Coal Plus technology
This sets the stage for the immediate start of its investment strategy with Monrospromugoli LLC
which could result in a USD 2 million upfront technology payment and ongoing annual royalties of
USD 176 million The test results had demonstrated that the high moisture high volatile low
calorific Mongolian brown coal can be easily converted into semi-coking coal using Coal Plus
―This report independently verifies that Coal Plus has potential in Mongolia executive chairman
Tony Crimmins said He added ―As the technology is already commercialized and in use in 5
locations in China for over 4 years we see high probability of financing this project in Mongolia
The confirmation that Mongolian brown coal is suited for conversion using Coal Plus into higher
value products paves the way for Jatenergylsquos agreement with Monrospromugoli to go ahead
Source Proactive Investors
SOUTHGOBI RESOURCES ANNOUNCES RESTATED FINANCIAL AND OPERATING RESULTS
SouthGobi Resources Ltd released its regular update on restated financial statements and
management discussion and analysis presentation In the consolidated financial statements for the
year ended 31 December 2012 the restated financial position at 31 December 2012 31 December
2011 and 1 January 2011 the results of operations for the years ended 31 December 2012 and 31
December 2011 and the statement of changes in equity and statement of cash flows for the years
ended 31 December 2012 and 31 December 2011
Following the correction in SouthGobilsquos point of revenue recognition revenues from affected coal
sales contracts are recognized in later periods than previously reported and some revenue has been
reported after 31 December 2012 as not all contracted coal has been collected by customers
During the periods from 2010 to 31 December 2012 trade and other receivables have been adjusted
lower and deferred revenue recognized to reflect revenue being recorded in later periods than
previously reported The inventory balance increased over the same period to reflect higher coal
inventory stockpile balances Prepaid expenses also increased with a corresponding decrease in
trade and other payables as coal sales royalty expenses were recognized in late r periods than
previously reported
The consolidated financial statements auditorslsquo reports and related financial information for the
affected periods contained in SouthGobilsquos filings filed prior to 14 November 2013 should no longer
be relied upon The restatements do not result in a change in cash at the end of any period The
statement of cash flows as reported does not change except for the reclassification of various items
within operating activities
Separately on 19 November 2013 SouthGobi paid USD 81 million in cash to the China Investment
Corporation in accordance with the convertible debenture agreement The amount related to the
64 percent per year cash interest payment and is payable semi-annually Further on 21 November
2013 SouthGobi issued 35 million common shares to China Investment
Source SouthGobi Resources Ltd
MSE CANCELS KHANSH INVEST‟S BROKERAGE LICENSES
The Mongolian Stock Exchange has invalidated the brokerage and securities dealing licenses of
Khansh Invest LLC on 4 December
―The companylsquos clients will be transferred to other brokerage firms that conduct professional
services in the market with licenses for broker-dealer related issues and it shall be governed
according to the concerning jurisdiction and regulations said the Source
Source Mongolian Stock Exchange
MNU PARTNERS WITH UNIVERSITY OF CALIFORNIA FOR RENEWABLE ENERGY
Mongolian National University (MNU) and the University of California announced 13 December the
signing of a memorandum of understanding to conduct high temperature solar thermal technology
research in Mongolia in 2014
Under the terms of the agreement the Mongolian Innovation and Technology Centre at MNU will
have a 100-kilowatt high-temperature non-tracking solar array on their campus that is not only the
first and the largest solar array of its kind in Mongolia but anywhere in the world
―We are delighted to be working with the University of California on this great project and we
particularly excited to make this announcement on the 15th Anniversary of MNU said MNU
Founder and Chairman Munkhbat Lkhagvasuren ―The thermal solar array will be installed
monitored and evaluated by our MNU Engineering Department under the advice and instruction of
the faculty of the University of California Munkhbat said
The technology was developed by University of Californialsquos solar director and professor Roland
Winston who is also a world-renowned scientist in the solar research field Winstonlsquos technology is
already operational at the University of California Purdue University and the Gas Institute of
Chicago although it has not yet been released for commercial deployment anywhere in the world
―My goal in working with MNU is to provide the technology and the staff he said ―Ultimately it
is the Mongolian engineering students that will be required to install and operate these systems as
well as determine the scope of the application beyond simply providing a high temperature heat
source
Source Mongolian National University
MCDONALDS INTERNATIONAL CALLS FOR FRANCHISEE TO POSSIBLY OPEN IN MONGOLIA
McDonalds International sent out a press release on December 10 calling for partners to approach
the company to open its first burger outlets in Mongolia
―We have not set a firm date for the development of McDonalds restaurants in Mongolia In the
future we may take steps to open McDonalds restaurants in Mongolia and if we seek a franchisee to
represent us the person will have the following characteristics
―High integrity business experience in the market history of success ability to work well with a
franchisor ability to complete a training program that can take about nine months willingness to
devote full time to the McDonalds restaurant business retail experience knowledge of real estate
market significant capital
The press release ends by inviting candidates to apply for a franchise
Source BNE
JAPANESE ldquoSUN RICE PLANT OPENS IN MONGOLIA
An opening ceremony for Mongolialsquos Technik Import LLC and Japanlsquos Niigata Kubota ―Sun Rice
factory in Ulaanbaatar on December 10
Niigata brown rice will be imported sorted and packed at the Ulaanbaatar factory which has a
daily capacity for the production of two to three tons of packaged rice The plant is equipped with
fully automated machines from Kubota The rice will begin sale in the domestic markets at MNT
5000 to MNT 7000 per kilogram
―Mongolia has been receiving rice from the people of Japan under aid program for many years
said Deputy Minister B Tsogtgerel ―During the latter event I and Ambassador Takenori Shimizu
were discussing that the period of receiving rice as aid is over and now the time of reciprocal
assistance has come and the ―Sun Rice factory is a sample of joint cooperation to produce the
world known quality in Mongolia
Niigata Prefecture is the second largest producer of rice in Japan after Hokkaido
Source Info Mongolia
MNBC MIGRATES TO DVB-T2 WITH THOMSON VIDEO NETWORKS
Video Mongolia Digital Broadcasting (MNBC) has launched Mongolias first ever DVB-T2 service using
head-end systems from Thomson Video Networks
Launched in 2007 MNBC was Mongolias first digital terrestrial TV network operator and will now be
able to broadcast up to 120 digital TV channels over five UHF transponders to maintain its position
and compete with Mongolias national satellite operator Working with systems integrator Digital
Horizon MNBC has deployed TVNs Vibe EM1000 multi-channel SD encoders and NetProcessor 9030
multiplexer and video processor with an embedded DVB-T2 gateway
Source Rapid TV News
CHINESE FIRM NEGOTIATING TO ACQUIRE JUST AGRO
A Chinese company is in negotiations to purchase Mongolias only meat exporter said a company
source
Just Agro LLC which owns 11 meat companies with the Makh Market brand is reportedly the subject
of negotiations for sale to a Chinese entity said the source who asked not to be named The Just
Agro company provides 40 percent of meat processing and 30 percent of storage in Mongolia and is
the only meat exporter in Mongolia
Last July authorities revealed that Just Grouplsquos Sh Batkhuu falsified signatures of the State
Property Committee and Erdenet Mining Cos director to receive USD 131 million in loans from
South Africas Standard Bank putting up the Erdenet Mine as collateral for the credit After Just
Group was dissolved the central bank took over all its assets including Just Agro
Source Unuudur
MONGOL TV EXPOSES MEDIA CORRUPTION WITH FAKE MCDONALDS STORY
An investigative news show on Mongol TV planted a false news story last week with all 9 of
Mongolias major local media outlets about McDonalds opening a branch in the country The
exercise was undertaken to expose corruption and the rampant practice of paid-for journalism in
Mongolia Mongol TV said
The appearance of a Mr P Rank promising McMutton burgers and goat milk-shakes in the
official press release set off no alarms at the media networks which took between USD 150 and
USD 700 from an undercover journalist to run the story on their websites on the front page of three
newspapers and on TV news on three networks including the local public broadcaster
―Soon the first letter our children learn will be Mlsquo Mr P Rank says with a golden shining smile
according to the fake release which also claimed McDonalds was to be sponsored by Mongolialsquos
Health Ministry and sold in schools all over the country
After Mongol TV unveiled the sting it invited representatives of the 9 duped media organizations to
explain their actions though all reportedly declined
Source Hollywood Reporter
EBRD ADOPTS NEW STRATEGY FOR ENERGY AND NATURAL RESOURCES SECTOR
The European Bank for Reconstruction and Development (EBRD) has adopted a new strategy that
will guide its investments in the energy and natural resources sector for the next five years EBRD
press release reported Tuesday
The bank sets out a commitment to helping its countries of operations move toward a sustainable
energy future The EBRD region which stretches from Morocco to Mongolia is faced with a
challenge of providing sustainable secure and affordable energy The energy strategy identifies
energy efficiency as the first and best response to this challenge
―What the EBRD brings to this challenge is our focus on structural reform said EBRD Managing
Director for Energy and Natural Resources Riccardo Puliti ―We have learnt from our work that
when properly channeled market forces can be harnessed to make energy sectors more sustainable
- environmentally economically and politically
The bank intends building on its well-established support for the Extractive Industries Transparency
Initiative by requiring clients operating in the extractive industries sector to disclose subsoil
contracts and licenses as well as all payments they make to local and national authorities
In the case of coal-fired generation the strategy supports the move to lower-carbon fuel sources in
response to the challenge of climate change In alignment with other international financial
institutions the EBRD will not finance any coal-fired power generation projects except in rare and
exceptional circumstances in which there is no feasible alternative energy source
The strategy also reinforces the EBRDs growing support for renewable energy which will include
financing both energy-generating capacity and key infrastructure such as transmission lines and
backup generation
―We have also developed and invested in the first wind farm in Mongolia - where it was also the
first new energy generator in 30 years said Puliti
Source Trend News Agency
SUSTAINABILITY HOSTS SESA WORKSHOP
Sustainability East Asia LLC organized a National Validation Workshop on 10 December as part of its
responsibilities for establishing a strategic environment and social assessment (SESA)
Participants from across the country arrived to represent government the private sector and non-
government organizations to discuss the proposed SESA The next step will be to assess mining
growth options and identify at least three likely growth scenarios which mining could bring to
Mongolia Afterward the SESA team will evaluate the environmental and social issues that are likely
to arise as a consequence of each scenario
The Mining Sector Institutional Strengthening Technical Assistance Project commissioned
Sustainability to conduct a strategic environmental and social assessment for Mongolias mining
sector
Sustainability will also perform a gap analysis of the legal regulatory and institutional capacity to
deal with each possible scenario An action plan is expected for SESA by summer 2014
Source Sustainability East Asia LLC
UB REGISTERS MATERNITY HOSPITAL NO 1
The new building annex for Maternity Hospital No 1 was registered as capital city property
13 December at a regular session of the Ulaanbaatar Citizens Council This maternity hospital
building was built with financing from Boroo Gold and was presented as a gift to the people of
Mongolia With a capacity to receive 150 mothers and children its total cost was MNT 92 billion It
includes the hospital building of 1169 square meters external heating clean water and sewer
water pipelines a diesel station an asphalt road a pedestrian walkway outdoor vegetation and an
external LED sign
This new building was commissioned 15 June The new annex has one vacuum operation room and
two standard operating rooms on the fifth floor 100 beds for women and 50 beds for infants on the
third and fourth floors paraclinical and sanitation units a pharmacy a conference room and
training rooms on the second floor an ambulatory section and reception on the first floor and staff
cafeteria closets washrooms and a disinfection chamber in the basement
Source Centerra Gold Inc Newsmn
RIO TINTO‟S SAM WALSH DIGS IN FOR THE LONG HAUL
Sam Walsh wants to remain as Rio Tinto PLClsquos chief executive beyond the end of his contract and
has told the minerlsquos board he will not be ready to retire in 2015
―I am there if they want me said Walsh ―Likewise if therelsquos someone else who can come in and
take what Ilsquove done to the next level thatlsquos fine too
The Australian 63 later this month replaced Tom Albanese 11 months ago after Rio decried
―unacceptable writedowns on its coal business in Mozambique Walsh says investors support his
strategy to cut costs and sell non-core assets
Walsh said he has explored selling all of Riolsquos aluminum business this year in what would be a
signature reversal of Albaneselsquos costly purchase of Alcan in 2007 But he says no offers have been
good enough while the business is not generating enough cash for an initial public share offering or
spin-off to Riolsquos shareholders Walsh has also been frustrated in attempts to sell Riolsquos diamonds
business
―Who would thank me if I sold something under value just to get a tick At the end of the day you
have to be pragmatic about things he said Offers ―werenlsquot in the bailiwick of where we thought
they should be
The Alcan deal epitomized Riolsquos poor recent dealmaking and Walsh admits the company had
―relaxed some of the controls it should have had Rio staff has now ―refound their mojo he said
On operating costs which Rio has said it will cut USD 3 billion next year he said ―There is rolling
momentum and thatlsquos important
Source Financial Times
KYRGYZSTAN FILES ECOLOGY DAMAGE LAWSUIT AGAINST CENTERRA
Kyrgyzstan is suing Canadas Centerra Gold Inc for 15 billion soms (USD 304 million) over what the
government says is ecological damage marking a new twist in a bitter row with the investor running
the largest Kyrgyz gold mine
The state environmental protection and forestry agency said in a statement that it had filed the
lawsuit at an economic court in the Kyrgyz capital Bishkek saying Centerra Gold had ignored its
earlier request for voluntary compensation It said the alleged ecological damage included
emissions of pollutants and waste dumps It said its claim referred to the companys operations
between 1996 and 2011
Centerra had said earlier that it viewed the governments claim as exaggerated and unfounded
The company disagrees with these charges and plans to give explanations on this matter in the
nearest time said a spokesman for the Kumtor Operating Company (KOC) the Centerra subsidiary
that runs the Kumtor mine in the Tien Shan mountains
The Toronto-listed miner which also owns the Boroo gold mine in Mongolia is already under
pressure from the Kyrgyz parliament which demands the state hold 67 percent in a proposed joint
venture to run the mine In September the government and Centerra Gold signed a memorandum
of understanding paving the way for Kyrgyzstan to swap its 327 percent stake in the Canadian firm
for 50 percent in a venture that would own Kumtor But in October the legislature voted to tear up
the document and seek control over the planned venture It gave the cabinet until 23 December to
report on its talks with Centerra Gold on setting up the venture Pearson said Centerra is having
constructive dialogue with the Kyrgyz government
Source Reuters
ECONOMY
FITCH AFFIRMS TWO MONGOLIAN BANKS AT B REVISES OUTLOOKS TO bdquoNEGATIVE‟
Fitch Ratings on 16 December revised the outlook on the Long-Term Issuer Default Ratings (IDRs) of
Khan Bank LLC and XacBank LLC to ―Negative from ―Stable At the same time the agency
affirmed the two Mongolian banks IDRs and viability ratings at B and b
The revision of the outlooks on both banks IDRs reflects weakening operating conditions as
indicated by the change in the Outlook for the Mongolian sovereign (B+) to Negative from Stable on
13 December The sovereigns outlook was revised due to mounting risks to the countrys economic
and financial stability Ratings on the two banks could be downgraded if pressures on asset quality
and liquidity intensify Persistent local-currency depreciation would reduce borrowers repayment
capacity and could lead to accelerated deposit withdrawals given the countrys high level of
dollarization
The banks ratings also remain sensitive to the withdrawal of credit stimulus as this could result in
asset deterioration on slowing economic growth or higher inflation Further decline in the
governments international reserves could also trigger a negative rating action as the banks
currency-related risk is counterbalanced by the authorities swap facility and unlimited foreign-
currency conversion Both banks ratings are also sensitive to any changes in their steady access to
capital from private-sector owners
Khan Banks Support Rating and Support Rating Floor (SRF) reflect Fitchs view that as the largest
bank in Mongolia it would be likely to receive state support in case of need However the
Mongolian sovereigns ability to provide timely support to the banking system remains limited as
underlined by its IDR of B+ A downgrade of the sovereign ratings would point to weakening in the
Mongolian governments ability to provide timely support to the banking system which put negative
rating pressure on Khan Banks SR and SRF In contrast Fitch expects XacBanks SR and SRF of 5B-
to be maintained even if the sovereigns rating is downgraded to B This is because the current SR
and SRF already reflect the agencys view that support from the sovereign in case of need cannot
be relied upon
The rating actions are as follows Khan Bank Long-Term Foreign-Currency IDR affirmed at B
Outlook revised to Negative from Stable Short-Term Foreign-Currency IDR affirmed at B Long-
Term Local-Currency IDR affirmed at B Outlook revised to Negative from Stable Viability Rating
affirmed at b Support Rating affirmed at 4 Support Rating Floor affirmed at B XacBank Long-
Term Foreign-Currency IDR affirmed at B Outlook revised to Negative from Stable Short-Term
Foreign-Currency IDR affirmed at B Long-Term Local-Currency IDR affirmed at B Outlook revised
to Negative from Stable Viability Rating affirmed at b Support Rating affirmed at 5 Support
Rating Floor affirmed at B-
Source Fitch Ratings
MONGOLIA SCORE FALLS ON POLITICAL RISKS INDEX FOR MINING INVESTMENT
An annual survey by Behre Dolbear of political risks saw Mongolia decline 5 points in an index
ranking Mongolia 19th out of 25 countries
Mongolia this year received a score of 269 compared with 32 last year Leading the countries
surveyed was Australia down 07 points from last year Russia with a total score of 171 compared
with 16 last year was the lowest ranking
The 25 countries considered in this yearlsquos survey are ranked based on seven criteria
-the countrylsquos economic system
-the countrylsquos political system
-the degree of social issues affecting mining in the country
-delays in receiving permits due to bureaucratic and other issues
-the degree of corruption prevalent in the country
-the stability of the countrylsquos currency and
-the competitiveness of the countrylsquos tax policy
Each criterion is rated on a qualitative scale from one (worst) to 10 (best) that reflects conditions
that promote investment growth in the mining sector The maximum score attainable for a country
is 70 points
Source Behre Dolbear Group
MONGOLIA LOOKS FOR SECOND CHANCE WITH FOREIGN INVESTORS
Saruul Ganbaatar the deputy head of Mongolias stock exchange hopes the countrys days of
interventionist economic policies are over and new laws ensuring foreign investors access to the
frontier markets industries will bring back sorely needed cash
Ganbaatar 32 who cut his investment teeth in Chicagos financial houses after graduating from
Loyola University is careful not to over-promise on what the stock market can deliver in 2014 and
beyond in terms of new listings or overall growth In October a law was passed easing ownership
restrictions for private companies to invest in the strategic industries A Securities Markets Law
coming into effect 1 January 2014 is expected to provide the key ingredient to attract deep
pocketed institutional investors such as mutual funds to invest
This really is the missing ingredient said Ganbaatar who has been traveling the globe promoting
the changes in the laws to global investors for the past two weeks
The stock index fell 19 percent in 2012 and year-to-date is down 115 percent although it did start
to climb with the newly passed laws On 1 January the new Securities Markets Law will allow
Mongolias commercial banks to offer custodial banking services Custodial banks serve as safeguards
for a firm or individuals financial assets playing a critical role in the final settlement of market
transactions Total market capitalization now is between USD 900 million and USD 1 billion Dont
expect the number of new listings to mushroom There may instead be a cull of companies Fifty-
five to 60 of them many of which have not traded in years are being reviewed for potential
delisting
The Mongolian Stock Exchange 100 percent state-owned is perhaps itself a candidate for
privatization It has been in a strategic partnership with the London Stock Exchange for two and a
half years
They have the right of first refusal he said
Source Reuters
CPI INCREASES TO 12 PERCENT YEAR-OVER-YEAR IN NOVEMBER
The National Statistical Office reported a 12 percent increase in the national consumer price index
(CPI) in November year-over-year
The CPI growth which also in November grew 13 percent from the previous month was explained
by a 14 percent increase in food prices and non-alcoholic beverages 23 percent for clothing
footwear and fabrics and 07 percent for housing water electricity and fuels
Source Info Mongolia
GROWTH SEEN IN EXPORT OF PRECIOUS METALS
The export value of precious metals grew 114 percent in November from the month before and 63
percent from the same period in 2012 according to the National Statistical Office
Exports totaled USD 38 billion in the year to December while imports grew to USD 58 billion The
foreign trade balance saw a deficit of USD 2 billion November saw exports of USD 381 million and
imports of USD 514 million with exports and imports in decline between July and November The
value of export products for the first 11 months was USD 11 billion Despite the gain in precious
metal exports exported minerals which represented 81 percent of all exports in the year to
November fell 129 percent from the year before
Source Zuunii Medee
MNT 788 BILLION WILL BE ENTERED INTO THE STABILIZATION FUND
The Stabilization Fund is set to collect MNT 49 billion this year and MNT 298 billion next
The Stabilization Fund was established to collect surplus revenue in years of economic gains from
the mining sector to cushion possible annual losses during economic downturns and weak
commodity demand Any gain in the price for gold and coal next year will also be reflected in
allotments to the fund
Source Zuunii Medee
ECONOMIC DEVELOPMENT MINISTRY PLANS TO PUT 81 OF BUDGET INTO CONSTRUCTION
The Economic Development Ministry plans to invest MNT 814 percent of its total investment budget
into construction
Beginning 1 January 2014 the ministry will provide MNT 9303 in loans toward the construction
sector The ministry will spend 39 percent of its budget for reconstruction and repair 10 percent
for the purchase of new techniques and technical equipment 3996 percent for infrastructure
2743 percent for education and health 636 percent for employment and agriculture and 2926
percent for other sectors of the economy
Projects include the construction of 30 clinics 27 cultural centers 6831 km of paved roads and
1032 m length of bridges Mongolia has received USD 55 billion in aid in the last two decades of
which 55 percent was in the form of low rate loans and 45 percent as non-repayable grants for
investments into agriculture infrastructure power and health sectors
Economic growth since 2011 has allowed Mongolia less aid than in the past The government has
now turned its focus on providing funding with concession agreements to large scale projects such
as the Nariin Sukhait-Shivee paved road and the power station at Mogoin gol Other projects include
Power Plant No 5 the Altanbulag-Ulaanbaatar-Zamyn Uud highway the Tavan Tolgoi- Khanbogd-
Khangi road and the Tuul Songino water reservoir complex
Source Zuunii Medee
TT POWER PLANT MAY NEED CONCLUSION TO OT DISPUTE SAYS DIRECTOR
Uninterrupted development of the Tavan Tolgoi power plant will ride on the outcome of disputes
concerning Oyu Tolgois underground mine said the director of the plant
―One of the main risks is the issue of a main user Enkhsaikhan said ―The key buyer of the power
from the TT Power Plant is OT Due to the uncertainty over phase twolsquo and unresolved matters
with the government of Mongolia OT is not regarded as a reliable buyer on a stand-alone basis
He added that the power company may request a guarantee from Oyu Tolgoi
A consortium that includes Koreas Posco Energy and Daewoo Engineering and Construction GDF
Suez Energy Asia Japans Marubeni Corp and Kansai Electric Power in March was selected for
development of the plant which has a preliminary estimate cost of USD 1 billion Those expenses
include installation of 150 kilometers of electric lines between Tavan Tolgoi and Oyu Tolgoi The
consortium will be expected to raise 30 percent of the cost itself while the remaining 70 percent
will come from bank loans However the uncertainty surrounding the Oyu Tolgoi copper mine could
create more hold ups
Source Zuunii Medee
CABINET TO CONCLUDE CONCESSION ON ALTANBULAG-ZAMYN UUD HIGHWAY
The Cabinet of Ministers ordered ministers to conclude a concession agreement for the Altanbulag-
Ulaanbaatar-Zamyn-Uud highway
The government is planning to establish the concession contract with the Chinggis Land
Development Group which according to the agreement shall have exclusive rights to construction
ownership and transfer of property using its own financing The concessionaire shall complete the
construction within three years after that shall operate the facility for another 30 years before
transferring the ownership to the Government
If Chinggis Land accepts these terms it would be responsible for developing a feasibility study and
blueprint of the project to be approved by the relevant ministries before concluding a financing
agreement The concession agreement will come into effect after the Chinggis Land Development
Group obtains a financing agreement for USD 1 billion from a commercial bank of Mongolia
The government will be responsible for freeing up the land where the highway is planned while the
Chinggis Land would cover the costs for doing so
Source Montsame
MNT 116 BILLION WILL BE SPENT FOR BUILDING EMERGENCY ALARMS IN UB
The National Emergency Management Agency has installed an emergency alarm system in 60
locations of Ulaanbaatar The alarm will alert citizens to natural disasters such as earthquakes
The alarms will be controlled from a center by microwave radios and satellite communication
devices
Source Udriin Sonin
EIU CLARIFIES EXTENT OF OFFICIAL ESTIMATES OF OIL SHALE RESERVES
The latest research from Mongolias mining ministry gives a clearer picture of oil shales
development potential in the coming years Although Mongolia has long been known to have
substantial oil shale deposits previous estimates were extrapolated from rudimentary surveys
conducted in the 1990s and thus left the actual reserves open to speculation
Plans to develop the industry took shape only in April 2013 when an American company Genie
Energy signed a five-year deal with the Petroleum Authority of Mongolia to explore oil shale
reserves in central Mongolia Genie also plans to build a USD 4 billion processing factory in Tuv
Aimag According to government projections the processing plant will generate USD 850 million of
tax revenue annually Aside from the economic benefits of the project domestic fuel sources could
help Mongolia to improve its energy security by loosening the countrys dependence on its powerful
neighbors At present 90 percent of Mongolias oil and related products come from Russia with most
of the remaining amount being imported from China
Yet the benefits of large-scale oil shale extraction are not as clear as they might seem at first
glance Most importantly Mongolias oil shale resources should not be confused with the shale oil
phenomenon that is currently sweeping the United States Oil shale (also called kerogen) is more
expensive to extract than shale oil and carries greater environmental costs In particular oil shale
requires a large amount of water to process which could be a risky proposition in Mongolia where
hydrological resources are already under strain Although other countriesmdashEstonia in particularmdashuse
oil shale as a substitute for coal extracting liquid fuel from the shale is a complex and relatively
untested process
Genie Energys progress on the project seems more substantial than that of comparable coal
liquefaction projects that have faltered in the region However environmental technical and
political limitations suggest that Mongolias overall dependence on foreign fuel will not change
significantly in the foreseeable future
―We remain doubtful that oil shale will play a significant role in Mongolia in the next two years so
our economic growth and trade forecasts will remain unchanged said the Source
Source Economist Intelligence Unit
MONGOLIA AND THE THREAT OF THE RESOURCE CURSE
Mongolia is at a crossroads while investors complain the government is dragging its feet on allowing
miners to start digging it is crucial that it get things right at the early stages of the resources
boom
Mongolias challenge will soon be the worlds says Richard Dobbs and his team at McKinsey in a
report predicting a USD 17 trillion investment bonanza by 2030 to keep up with demand for oil gas
and other materials In 1995 about 58 countries depended on resources for the bulk of their output
and wealth In 2011 that number had risen to 81 By 2030 roughly half of the worlds economies
will essentially become giant filling stations for developing superpowers from China to South Africa
That means that instead of the world moving toward greater transparency democracy and freer
markets we could see rising corruption levels and even greater income inequality
Economies with natural-resource endowments have a huge opportunity to transform their
prospects but history suggests that they could all too easily squander the windfall says Dobbs
director of the McKinsey Global Institute in London
The world would be wise to take steps today to break this cycle McKinsey recommends several
While not terribly original they include strengthening public institutions and good governance
building decent infrastructure boosting national competitiveness promoting sound fiscal policy
making and spending the windfall wisely while engaging in forward-looking economic and social
planning The trouble is that political will and integrity is often the first casualty once the minerals
start flowing out and the spoils come pouring in
Mongolia is at that very crossroads today Investors complain the government is dragging its feet on
allowing miners to start digging But its more important to get things right at the early stages of
the resources boom That means acting now to create the institutions and regulatory frameworks
needed to ensure revenue transparencymdashknowing exactly how much money is being dug out the
ground and where its going Why not set up a sovereign-wealth fund to save for Mongolias future
When the stakes are that high a little patience can go a long way
Source Bloomberg
MONGOLIAS NOMADS WARM TO SOLAR POWER
In Mongolia often known as the land of the blue skies the sun shines for 250 days on average each
year It beats down on the sparse plains and on the Gobi desert that spans the countrys southern
border with China
It shines even during the frigid winter days on the hundreds of thousands of nomads who still roam
the steppes herding animals and living in dome-like tents calling gers About 800000 of Mongolias
28 million inhabitants still live the traditional nomadic lifestyle that has remained largely
unchanged for generations Apart from the addition of motorbikes the occasional petrol generator
and a passing trade from intrepid tourists wanting to stay in a ger for the night life is almost the
same as that of many nomads grandparents and great-grandparents Almost but not exactly
Dotted across the steppes glints of light can be seen as the sun bounces off the solar panels that
have been installed on the sides of gers made of felt and yaks wool At the start of this millennium
Mongolias herders and nomads had little or no access to modern electric power and its potential
benefits But as of 2013 thanks to a concerted push by the Mongolian government almost 70
percent of nomadic people have access to electricity Bor a herder who mainly travels around
western Mongolias Arkhangai province is one of the people whose family benefits from portable
solar home systems (SHS)
We use it for generating the power for lighting in the ger charging phones we can also generate a
fridge to keep food longer and we can run a television That is very useful for us because we can
get the most recent weather forecast which is important for our work and keeping our animals
safe Before we had power it was very difficult Now it is almost like living in the city
The ability to charge mobile phones is also important for the herders who often have children
staying at boarding schools Access to electricity also allows families to contact emergency health-
care and doctors for advice without having to make the often arduous journey to the nearest village
or town
The solar systems were distributed and installed with the help of the World Bank after the
Mongolian governments National 100000 Solar Ger Electrification Program ran into difficulties A
World Bank report Capturing the Sun in the Land of the Blue Sky describes the difficulties faced by
the Mongolian government on its ambitious project
By 2005 five years into the plan 30000 families had been kitted out with an SHS but then the
program began to stagnateThe government of Mongolia recognized that considerably more effort
was necessary not only to keep the program on track but to scale-up implementation in order to
achieve the National 100000 Solar Ger Electrification Program target the report said In 2006 the
World Bank agreed to cover half of the initial outlay costs for each family as well as after-sales
maintenance with 50 centers set up across the country including at least one in each of its 21
provinces so that the herders would not have to travel to Ulaanbaatar every time the solar panels
needed maintenance
The SHS project also offers environmental benefits to a country where the ratio of carbon dioxide
emissions to economic output is ten times higher than the world average because of the increase in
mining over the past decade as the true extent of Mongolias mineral wealth became apparent The
solar systems are slowly replacing the diesel generators used by some nomads as a means of
generating power although they are still using stoves for heating burning wood coal and dung
throughout the year
Source Al Jazeera
IRON-ORE AND COAL PRICES GO SEPARATE WAYS
Prices of the key ingredients in steel productionmdashiron ore and coking coalmdashare moving along sharply
different paths as mining companies resist cutting coal output despite the market being awash with
the raw material
While iron-ore prices have risen 22 percent since May coking coal is still searching for a rebound
Coking-coal prices are off more than 4 percent over the same period China is on course for another
year of record steel production with supply directed to the construction of high-rise apartment
buildings the manufacture of luxury cars and other uses
There is simply too much coal on the market the International Energy Agency said in a report this
week
Shipments of steelmaking coal from Australiamdashthe worlds biggest exporter of the commoditymdashare
forecast by the government to rise to 178 million tons in 2015 from 145 million tons last year Most
goes to China which accounts for 60 percent of global demand In contrast global iron-ore
exporters are struggling to increase output in areas other than Australias remote Pilbara region
supporting prices of that commodity The spot price of iron ore climbed to nearly USD 140 a ton
earlier this month a four-month high Prices have since eased a bit to USD 13430 a ton but
remain well above the consensus forecasts of analysts at the start of this year
Coal miners could scale back production but that isnt always easy to do In Australia many miners
are locked into so-called take or pay contracts with rail and port operators Many analysts dont
expect coking-coal prices to rebound for at least another 12 months RBC Capital Markets expects
coking-coal prices to average USD 154 a ton in 2014 down from USD 159 a ton forecast for this
year Instead they see more chance that iron-ore prices will come down more sharply RBC predicts
an 11 percent fall in iron-ore prices next year as new supply from Anglo Americans Minas Rio
project and mines owned by Fortescue Metals Group Ltd is added to the market UBS is even more
bearish predicting iron ore will fall below USD100 in the second half of 2014
Source Wall Street Journal
ARE COMMODITIES TRADERS bdquoTOO BIG TO FAIL‟
When the banking industrylsquos top lobby group commissioned a report by on commodity trading
houses the idea was to show trading houses like Glencore Xstrata Vitol or Cargill were ―too big to
fail and therefore needed to be regulated in a similar manner to the banks
But instead of highlighting the inherent issues surrounding the industry the report found trading
companies posed less systemic risk than the big banks As a result the Global Financial Markets
Association which commissioned the report decided not to finalize or publish it (The GFMA claims
that it often commissions reports which are shared with regulators and other interested parties but
never published) But the debate hasnlsquot ended
A separate report published in July by the Centre for European Policy Studies a think-tank argued
the growth of commodity trading houses which underpin the global trade in raw materials could
―have systemic implications Commodities trader Trafigura has become the latest to wade into the
debate In its recent prospectus for a EUR 500 million bond issue the worldlsquos second largest metals
trader and third biggest oil trader addresses the GFMA report as well as the issue of systemic risk
Making some tart observations the trading house says the GFMA paper was aimed squarely at the
Financial Stability Board a group of global regulators
―[The report] was widely seen as a tactic by some banks active in the commodity trading space as a
way of creating more equality between market participants by seeking to usher in further
restrictions on pure commodity trading companies the prospectus says
Commodity traders are facing the need to be more open about their operations and lift the veil of
secrecy Indeed the author of the GFMA reportmdashCraig Pirrong a widely respected academicmdashis
working on a white paper on commodities traders Commissioned by Trafigura it will look at what
commodities trading houses activities and the recent trend to accumulate more assets risk
management as well as looking at different types of commodity companies
Source Financial Times
SMOG DARKENS SHANGHAIS PROSPECTS FOR BECOMING A GLOBAL FINANCIAL CENTER
In the debate over which matters more in China money or quality of life the quality-of-life side
may have found the ultimate argument If you cant breathe nothing else really matters And itlsquos a
debate Mongolia has to have as it makes its own steps towards industrial and economic growth
Chinas pollution problem is spreading and growing worse a fact on stark display last week in
Shanghai the countrys financial center A stretch of filthy-air days in that coastal city so
thoroughly shocked residentsmdashwho had largely escaped the smog that has long plagued the likes of
Beijing and Harbinmdashthat it inspired fresh talk about getting away from China Lawrence Shu a
Shanghai-based partner at Hylands Law Firm said he and his friends are thinking more seriously
about moving abroad
The smog had a big impact because it feels really bad if you cant breathe freely he said
The environment used to take a back seat among the Chinese But as they get richer they are
traveling abroad more making the pollution back home more obvious The Internet also
contributes Blue-sky pictures posted on social networks by Chinese travelers abroad constantly
remind folks of what is lacking at home and Chinese now use various apps to track air-quality data
If Shanghais smog discourages smart financial professionals from wanting to live there that will
hinder Chinas effort to create a global financial center If businesses such as financial companies
and luxury-goods makers perceive that Chinas elites are spending more time outside their home
country they will be less willing to invest in China
Most rich Chinese havent packed their bags and left yet but they are keeping their options open
Relocation is a big decision said Anne Wang who works in the financial industry in Shanghai But
just in case she recently received a US visa that would allow her to live there
Source Wall Street Journal
POLITICS
MINERALS POLICY ENTERS FINAL DISCUSSIONS
The government published a final draft of Mongolialsquos State Policy on the Minerals Sector for 2013
through 2025
The document was first presented to Parliament in July and is now entering final discussions during
the autumn plenary session of Parliament following a 42 percent drop of foreign investment and 23
percent fall in the currency year-on-year
―We have reviewed the proposed State Policy on the Mineral Sector which we feel will be a
positive step forward if passed said the Source ―The passing of this policy will result in more
transparency and an increasing participation from foreign investors That said it will take time for
these feats to be accomplished Investors will be weary of Government promises as they seek
longevity to prove Government intentions
The proposed policy is divided into four main sections rationale principles main policy and
implementation-results The major points stressed in the policy include transparency and
responsible mining The law sends the message that growth is going to be driven by private sector
participation and the intent to provide a stable investment environment technological innovation
and value-added activities
Key priorities of the law since it was first unveiled include stability of taxation and the legal
environment an end to any discrimination between foreign and national investors and the
preservation of strategic resources and deposits
This most recent version saw the inclusion of a new section supporting development of local areas
and the interests of local citizens Other key elements include explorationmdashwhich would see
greater government regulation for strategic mineral deposits while cutting down bureaucracy and
conducting scientific researchmdashproduction support and local support The new document also
highlights greater support for non-governmental organizations for the environment allowing them
to claim damages from mining operations the establishment of funds to support economic
diversification environmental protections and land rehabilitation
The new draft has removed the risk assessment section and replaced it with a section on
implementation This includes the improvement of the legal environment and producing of relevant
regulations programs and projects for 2013 to 2015 followed by the implementation of programs
and projects from 2014 to 2025 and finally the provision of conclusions on midterm policy
implementation and further planning for up to 2020 and 2025
―We believe that this policy will take us one step closer to attracting investors and supporting
private sector development in Mongolia said the Source ―Despite current investor hesitation this
state policy in addition to the new amended Minerals Law set to pass next year will further
encourage investors to enter the market and will build support for the junior mining community
Source Mongolian Investment Banking Group
PARLIAMENT UNANIMOUSLY BACKS ldquoSMART GOVERNMENTrdquo INITIATIVE
Parliament has unanimously backed President Tsakhia Elbegdorjs ―From Big Government to Smart
Government initiative for government reform concepts having signed a joint statement of support
on 13 December
The joint statement gives full support to the presidents initiative and commits to cooperation for
its undertaking This includes support for enhancing government systems and policies in line with
democracy and a market economy improving the capacities of public services and curtailing
government intervention into private business affairs Also included are protections to private
business including establishing government structures for rule of law support to domestic
industries and honoring contracts The fight against corruption is another main perogative
On 16 November 16 the Office of the President of Mongolia organized a national consultative
meeting on this topic at the Government Palace Elbegdorj next met with members of the
Parliament on 9 December to organize an open dialogue with representatives of Parliament for an
appeal for them to sign the joint statement Reaffirming the commitment of the Mongolian
lawmakers to a breakthrough reform of the Government the leaders of party floors and factions in
the Parliament and independent members of the Parliament signed the document for the reform on
December 13 2013
Source Montsame
GOVERNMENT CALLS TO END PRACTICE OF APPOINTING MPS AS MINISTERS
The coalition government has thrown their support behind President Tsakhia Elbegdorjs proposal to
prohibit Parliament members from serving as cabinet ministers
Democratic Party members discussed a draft resolution and proposed amendments submitted by the
president for the new restriction at a party meeting on Monday The draft amendments were
unanimously backed by the faction The Justice Coalition which includes the Monglian Peoples
Revolutionary Party and Mongolian Democratic Party came to the same conclusion following its own
meeting said coalition head N Battsereg on Monday
Source Montsame
COMMITTEE LEADERS TO BE ELECTED THIS MONTH
The coalition government will soon be electing officials to lead the various committees in
government
Parliament has 8 standing committees to elect leaders to this month with each committee to be
led by a representative of the coalition government Current committee heads are Ts Tsolmon at
the Security and Foreign Policy Committee G Bayarsaikhan at the Environment Food and
Agriculture Committee Z Bayanselenge at the Social Policy Education Culture and Science
Committee R Burmaa at the Petition and Requests Committee A Bakei at the State Structural
Committee Ts Davaasuren at the Budget Committee Sh Tuvdendorj at the Legislation
Committee and B Garamgaibaatar at the Economic Committee
Source Zuunii Medee
FOREIGN CURRENCY PAYMENTS BANNED FOR MININGEXPLORATION LICENSING FEES
The Ministry of Finance has banned the use of foreign currencies to pay for mining and exploration
licensing fees to the Mineral Resources Authority beginning 1 January 2014
The Ministry of Finance has prompted these entities and companies holding licenses to comply with
Mongolian currency law that states that all businesses and agencies must do business in Mongolian
tugrug According to the 2009 law transactions must not be carried out in foreign denominated or
foreign currency based rates
Source Newsmn
MINING MINISTRY TO COOPERATE WITH ASSOCIATION OF FLUORSPAR EXPLORERS
The Ministry of Mining Wednesday established a memorandum of mutual understanding with the
Association of Fluorspar Explorers (AFE) to cooperate in augmenting the countrylsquos export
In addition to expanding export goals include developing transparent and responsible mining
improving qualities and standards of fluorspar metallurgy and flotation concentrate and in
increasing the production output of the minerallsquos ore enrichment The hope is the memorandum
will create a launching point for a national program for fluorspar its exploitation increase the
volume of production by intensifying research and increase competitiveness in international
markets It will also be necessary to introduce the latest technology to the country along with
running joint trainings with foreign NGOs the Ministry said
Source Montsame
DP REJECTS AMARJARGAL‟S RESIGNATION
Parliament voted against MP R Amarjargallsquos resignation request on 12 December
During Tuesdaylsquos meeting the majority of the Standing Committee on State Structure voted against
Amarjargal`s resignation The head of the Democratic Party (DP) caucus D Erdenebat took a
strong stance against letting Amarjargal leave
Amarjargal said he wanted to resign to take responsibility on behalf of his party members for the
current political situation and economic restraints in Mongolia DP members agree with his
conclusion but encourage him to make the effort and participate for social change and
development Members of the opposition Mongolian Peoplelsquos Party members said that Amarjargal
could see the problems and nature of the majority of Parliament and praised his plan to resign
Source Newsmn
MPP HEAD TO STEP DOWN
Mongolian People Party (MPP) Head N Enkhbold has requested his resignation as party leader
MPP Deputy Head D Oyunkhorol said 9 December that Enkhbold submitted his request to step down
during a party meeting Oyunkhorol said Enkhboldlsquos resignation was due to personal reasons The
new party head will be appointed by the MPPs governing board
Source Udriin Sonin
FIFTH ROUND OF NEGOTIATIONS FOR THE JAPAN-MONGOLIA ECONOMIC PARTNERSHIP
AGREEMENT
The fifth round of the negotiations for the Japan-Mongolia Economic Partnership Agreement (EPA)
will be held from 16 to 19 December in Ulaanbaatar
The Japanese delegation will be led by Jun Yokota ambassador in charge of economic diplomacy
and the Mongolian delegation will be led by Ochirbat Chuluunbat vice minister for economic
development Experts from relevant ministries and agencies of both sides will participate in the
meetings
In this round negotiations are in areas including trade in goods and investment
Source 4-Traderscom
FIRST MONGOLIA-CHINA JOINT BORDER COMMISSION MEETING IN BEIJING
The very first meeting of Mongolia-China joint commission of borders took place 11 and 12
December in Beijing China
This meeting was co-chaired by T Togsbilguun a director of the Department of Neighbour
Countries of Mongolialsquos Ministry of Foreign Affairs and by Xiao Jiangguo a representative of border
checkpoint and seaport affairs Both sides shared on ideas for implementation of the
intergovernmental contract on the border regime and reached some agreements on conducting a
joint examination in the border signs and on activating the collaboration in law enforcement around
frontier areas After this they discussed issues of developing border checkpoints at a same level
putting some border checkpoints into a permanent regime giving an international status to four
checkpoints
The gathered also made a protocol on their meeting and inked its results The next meeting will run
in 2014 in Ulaanbaatar
Source Montsame
BELARUS TO OPEN EMBASSY IN MONGOLIA IN 2014
Belarus will open its embassy in Mongolia in 2014 reads a resolution from the Belarus Council of
Ministers of the Republic of Belarus from 12 December 2013 Belaruslsquo Finance Ministry will finance
the costs of opening and maintaining Belarusian Embassy in Mongolia from the funds set aside in its
national budget for the opening and maintenance of diplomatic missions and consular missions of
the Republic of Belarus abroad
Source Belarusian Telegraph Agency
HOWELL NEW JERSEY USA BECOMES SISTER CITY OF SUKHBAATAR DISTRICT
The Howell Township and the Sukhbaatar district in Mongolia signed a memorandum of
understanding to create sister citieslsquo between Howell New Jersey USA and the Sukhbaatar District
on Tuesday
The program was aimed at opening up talks on how each can benefit from one another Mayor
William Gatto said Howell Township is a very diverse city and theyve taken the relationship with
the Kalmyk community here in Howell and expanded it to a country where they have had no
relationship in the past he said
The sister citieslsquo program will allow both Mongolia and Howell to exchange ideas and come up
with new and better ways to do things that benefits both cultures Outside of Mongolia Howell has
the largest population of Kalmyks in the world with many living in the Freewood Acres section of
the township Gatto said
Some of the goals of the agreement include promoting a common prosperity and development for
both parties an electronic pen-pal program and education opportunities for exchange students
Through a translator Baljinnyam Gan-erdene of the Citizens Representatives Council of Sukhbaatar
District said he came to Howell to see how democracy works in the United States
Im really glad and hope that this unforgettable and successful visit opens the door to our
friendship and prosperity between our residents Gan-erdene said
Gatto gave Gan-erdene a Howell flag and a throw blanket created by the Historical Society
depicting the history of the township Gan-erdene also gave Gatto several items including a bronze
piece of art
Source NJcom
MONGOLIAN CALLIGRAPHY ADDED TO UNESCO CULTURAL HERITAGE LIST
State Parties at the 8th Session of the Intergovernmental Committee for the Safeguarding of the
Intangible Cultural Heritage in Azerbaijan unanimously agreed to register Mongolian calligraphy as
an intangible cultural heritage in need of urgent safeguarding on 2 December
―Mongolian heritage calligraphy is now being recognized by the world and I am grateful on behalf
of my country for decision makers said Secretary-General of Mongolian National Commission for
UNESCO Gundegmaa Jargalsaikhan He noted that Mongolian calligraphy was the fifth cultural
heritage item of Mongolia to be listed and now stands among the Mongolian epic traditional folk
dance the traditional music Tsuur and a circular breathing technique
Mongolian calligraphy is a 1000-year-old writing system that vertically connects continuous strokes
together to create a word Letters of Mongolian script have been created and taught by nomads
from generation to generation During the 1937-1940 purges of the Soviet era thousands of tutors
and traditional scholars of the script were killed Those who remained alive were banned from
mentoring the younger generation Soon after that or around 1946 a new Cyrillic script was
adopted as the only eligible script therefore banning all the teachings of old Mongolian script and
Latin lettering Only in the 1970s was the old Mongolian script re-introduced to scholars allowing a
limited number of classes in universities
After the 1990 democratic changes along with the revival of Mongolian identity interest in
traditional calligraphy reawakened As a sign of such revival the very first non-communist political
organization the Democratic Union of Mongolia used folded calligraphy as its main logo
Source Info Mongolia
THOUGH IMPROVING MONGOLIA STILL REELING UNDER CORRUPTION
The third joint survey by the Asia Foundation and Sant Maral Foundation to gather data on the
perception of corruption in Mongolia revealed that efforts to curb corruption in what is considered
as one of the worldlsquos most corrupt countries could be having impact
The survey shows a significant drop in the percentage of respondents who believe corruption has
increased in the last three years from 389 percent in November 2012 to 183 percent currently In
contrast in 2006 a majority of respondents (63) indicated that corruption has increased ―a lot in
the last three years The survey also shows that corruption has declined in importance as a critical
social problem since 2006 Despite these positive signs overall respondents indicated that
corruption remains a serious issue in some specific key areas
Conducted in September of this year the survey featured face-to-face interviews in 1360
households across Mongolia including seven districts in Ulaanbaatar and 21 counties in six
provinces A majority (766) cited that widespread corruption in the law enforcement agencies is
one of the main reasons the government has been unable to tackle corruption effectively When
corruption is perceived to be this widespread the attention will obviously turn to the performance
of the apex anti-corruption body the Independent Authority Against Corruption (IAAC) The survey
shows that the IAAC is slowly but surely beginning to gain confidence among citizens The
percentage of those surveyed who think that its performance is ―good or ―very good increased
from 78 percent in March 2010 to 203 percent in March 2013 In September 2013 the result shows
a new high of 294 percent
Peoplelsquos perceptions on corruption are often shaped by personal experiences Although very few
respondents in the survey said that they had actually paid a bribe themselves (8 percent about a 3
percent drop from 2012 and an 18 percent drop since 2006) as noted before many are not willing
to report instances where they are asked for one Similarly 36 percent of respondents said they
would not pay a bribe but 26 percent indicated that they would pay if they had the financial
capability
Basanta Pokharel is The Asia Foundation‟s chief of party for the STAGE program in Mongolia He
can be reached at basantapokharelasiafoundationorg The views and opinions expressed here
are those of the individual author and not those of The Asia Foundation
Source Asia Foundation
MPP DEMANDS DISMISSAL OF MINISTERS
Mongolian Peoplelsquos Party Chairman N Enkhbold and party head S Byambatsogt submitted to the
Speaker a request for the dismissal Minister of Finance Chultem Ulaan and of Economic
Development Minister Nyamjav ―Fortuna Batbayar
Our faction believes that these ministers must be held responsible for the worsening of the
national economic situation We also intend to do the same with other ministers after hearing
opinions of people said Byambatsogt
Source Montsame
FORMER TAVAN TOLGOI JSC DIRECTOR ARRESTED
The Independent Agency Against Corruption arrested former Tavan Tolgoi JSC director Kh
Tumenbayar for undisclosed reasons
An unnamed official source suggested that the arrest may be related to abuses of power and
payments to political parties as well as the construction of a high-class hotel in Dalanzadgad Soum
Umnugobi Aimag Kh Tumenbayar is a member of the Democratic Party a member of Parliament
and is an associate of ―Ajnai Bat-Erdene the Minister of Defense who helped Tumenbayar attain
position as the director of Tavan Tolgoi for 6 years and rise to head of the Umnugobi Aimag Citizens
Council
Tumenbayar voluntarily resigned from his position at Tavan Tolgoi last month The IAAC has
reportedly not given details to the reasons for the investigation opened on Tumenbayar because of
possible connections to high-ranking officials
Source Unuudur
MONGOLIA TURKMENISTAN JOIN INTERNATIONAL RACING FEDERATION
The International Federation of Horseracing Authorities (IFHA) has welcomed racing organizations
from Mongolia and Turkmenistan as affiliate members
Recent ratification to IFHA statutes at its annual General Assembly in October created a new
affiliate membership category within the Federation Thus the Federation of Mongolia Horse Racing
Sport and Trainers and the Turkmen Atlary State Association by unanimous vote of the IFHA
Executive Council in Paris in October have become the IFHAlsquos first two affiliate members
The Federation of Mongolian Horse Racing Sport and Trainers (FMHRST) is a non-governmental
organization (NGO) which serves to the development of equestrian sport in Mongolia and works to
protect the rights of horsemen who specialize in this national sport The new affiliates were
announced by IFHA Chairman Louis Romanet this week and several key appointments to IFHA
executive office positions and committees have also been made
Source Horse Talk
MONGOL TV HEAD MEDIA CAN HELP FIX THE BIG PROBLEMS
Nomin Chinbat head of Mongol TV has grander intentions than just ridding the countrys television
business of rampant pirated content and unlicensed formats The young executive wants to help
clean up Mongolian politics and the nation by creating a free and open media
―The networks are used as propaganda channels for politicians They are used very effectively every
four years at election time says Chinbat whom the Source named one of the 25 Most Powerful
Women in Global TV at MIPCOM 2013
―There are laws against piracy but they arenlsquot implemented explains Chinbat who says that
politicians in the country of roughly three million wonlsquot challenge journalists because their
relationships with them are too cozy
Mongol TV has invested in original programming licenses all of its imported content and runs
investigative journalism features highlighting social problems such as alcoholism and corruption
The company is organizing a Mongol TV Day for February 2014 to which it has invited major
international studios to raise awareness of the issues and introduce the global industry to
Mongolia Britainlsquos ITV and Americalsquos CBS are already confirmed and negotiations are ongoing with
other attendees The situation has improved in recent years with some channels having become
what Chinbat calls ―hybrids which license some sports rights but then steal others and copy
formats
―These days some of these channels might license 25 episodes of a format and make 50 But this is
actually progress says Chinbat
Chinbat and her team were at the Asian Television Forum (ATF) in Singapore looking for new
formats that can be produced within the constraints of Mongolian television budgets However with
Mongolias young populationmdash65 percent of the country is under 35 years oldmdashmobile viewing is on
the rise and the network is already working second-screen utilization and new media applications
This demographic sweet spot should guarantee strong growth in the population economy and
nascent entertainment sector in Mongolia in the coming decades
Source Hollywood Reporter
ANNOUNCEMENTS
ldquoMM TODAYrdquo ON MNB-TV FRIDAY 1900 TO 1910
BCM is pleased to announce that Mongolian National Broadcasting continues its cooperation with
BCM on ―MM Today This English news program is aired every Friday for 10 minutes and is
scheduled from 1900 to 1910 tonight Tune in to watch this program that reports stories from
todaylsquos BCM NewsWire
BCM WEBSITES
MONGOLIAN WEBSITE bdquoPRESENTATIONS‟ AND bdquoNEWS‟ SECTIONS
The Presentationslsquo section on BCMlsquos Mongolian website can be reached via bcmmnitgeluud
As a key component of BCMlsquos Mongolian website articles from the Newslsquo section and the
government website Open-Governmentmn are regularly updated
S Oyun Minister of Environment and Green Development presentation at BCM monthly meeting on
May 27 added to Mongolian website bcmongoliaorgmnилтгэлүүд
- Байгаль орчин ногоон хөгжлийн сайд СОюун Байгаль орчин ногоон хөгжлийн шинэчлэлийн
бодлого үйл ажиллагаа МБЗ-ийн сарын уулзалт 5 сарын 27 2013
___________________________________________
ENGLISH WEBSITE PRESENTATIONS MONGOLIA REPORTS bdquoINTERVIEWSbdquo MONGOLIAN
BUSINESS NEWS‟ bdquoPHOTO GALLERY‟
The following 13 presentations are from the Mongolia Investment Summit- 2013 in Hong Kong
November 18-20
- Regulatory Update Navigating Mongolialsquos legal framework for foreign direct investment
Javkhlanbaatar Sereeter Director General Foreign Investment Regulations and Registration
Department MINISTRY OF ECONOMIC DEVELOPMENT OF MONGOLIA
- Investment keynote Investing into Mongolia in 2013 ndash Where do the opportunities lie James
Passin Co-Founder and Manager FIREBIRD MONGOLIA FUND
- Development keynote Key challenges and opportunities for continued growth in Mongolia
Randolph Koppa President TRADE AND DEVELOPMENT BANK OF MONGOLIA
- Outlining government policies and long-term plans for Mongolialsquos mining sector Amarjargal
Khurelbat Head of International Cooperation Division MINISTRY OF MINING OF MONGOLIA
- From copper to met coal Demand and price outlook and expected impact on Mongolialsquos economy
Ghee Peh Managing Director Metals and Mining Research UBS SECURITIES ASIA
- How Mongolian banks and financial institutions are dealing with the challenges and opportunities
of a fast growing economy Norihiko Kato Chief Executive Officer KHAN BANK
- Update on the Mongolian stock market ndash Impact of the new Securities Law Altai Khangai Chief
Executive Officer MONGOLIAN STOCK EXCHANGE
- From investment banking to trade finance to micro credits to insurance Amartuvshin Hanibal
Managing Director TENGER FINANCIAL GROUP LLC
- Spotlight presentations Showcasing Mongolian investment opportunities Peter Morrow Board
Director ASIA PACIFIC INVESTMENT PARTNERS
- Spotlight presentation Showcasing Mongolian investment opportunities Munkhbat Davaatseren
CEO of Golomt Securities GOLOMT BANK
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources
Batmunkh Batkhuu Chairman SHARYN GOL JSC
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources
Jimmie Wilde Chief Operating Officer BERKH UUL JSC
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources Mona
Forster Executive VP ENTREacuteE GOLD INC
The following two presentations are from the ―ANTI-CORRUPTION LEGISLATIONPOLICY
INTERNATIONAL BEST PRACTICE ON TRANSPARENCY training seminar for businesses in
Ulaanbaatar November 18 2013
-―International business standard on transparency by Jelena Pesic Director PwC
-―Finlandlsquos best practice on transparency and anti corruption by Dr Pekka Hallberg (as it is
worldlsquos number one) Emeritus President of the Supreme Administrative Court of Finland
The following 15 presentations are from the Mongolia Mining Summit Perth Australia October 29-
31 2013
bull Mongolialsquos Minerals Future and Development by Otgochuluu Ch Director General Department of
strategic policy and planning at Ministry of Mining Mongolia at the Mongolian Mining Summit 2013
Perth Australia Oct 29-31 2013
bull Mongolian Economy Investment OpportunitiesChallenges Jim Dwyer Executive Director
Business Council of Mongolia at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31
2013
bull Oyu Tolgoi Lessons from the Gobi Houston Spencer Vice President Communications and Media
Relations Oyu Tolgoi at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Market dynamics for Mongolian coking coal in the Chinese market Graeme Hancock President
and Chief Representative at Anglo American Mongolia at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Speech by Mr Ariunbold Byamba Deputy Director Erdenes MGL LLC at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull Launching Mining Projects in MongoliandashA Major Contractorlsquos Perspective Eric Erdenebat
Tseveendorj Country Manager Orica Limited at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Investing in a dynamic legislative environment Elisabeth Ellis Managing Partner Ulaanbaatar
Minter Ellison at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Sandvik In Pit Crushing amp Conveying (IPCC) Doug Turnbull Principal Mining Engineer Sandvik
Mining Systems at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Ovoot Coking Coal Project David Paull Managing Director Aspire Mining at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull The business of being a third neighbor David Landers General Manager East Asian Growth
Markets at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Nuurst Thermal Coal Project Daniel Rohr Chief Financial Officer Modun Resources Ltd at the
Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Culture matters in building sustainable long-term business relationships Hana Tserenkhand
Byambadash Business Development Consultant AusMon Consulting and Dr Christine Hogan Adjunct
Professor Curtin University Consultant amp Author at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Maximizing Business Benefits from Your IT Investment Brad Skeggs Executive Director COSOL at
the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Presentation by Battsengel Gotov CEO Mongolian Mining Corporation at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull Mongolian Mining Sector Present and Future Developments NAlgaa Executive Director
Mongolian National Mining Association at the Mongolian Mining Summit 2013 Perth Australia Oct
29-31 2013
The ―Mongolia Reports section includes the following
- ―Ministry of Finance of Mongolia 2013 Government Debt Auctions by Bank of Mongolia
- ―Doing Business in Mongolia 2013 Country Commercial Guide for US Companies by US
Embassy
- ―Real Estate Report 2013 by Mongolian Properties
- ―Selected Macroeconomic Indicators November 20 2013 by International Monetary Fund
- ―2013 Second Annual Mongolian CEO Survey from PricewaterhouseCoopers Audit LLC
- ―Selected Macroeconomic Indicators data through October 16 2013 by International Monetary
Fund
- ―IMF Completes 2013 Article IV Mission to Mongolia by International Monetary Fund
The following are added to Interview Section from the Oxford Business Group Mongolia Reports
2013 book
bull B Byambasaikhan Chairman Business Council of Mongolia ―Talk is cheap
bull President Ts Elbegdorj ―Diversifying for growth
bull Jim Dwyer Executive Director Business Council of Mongolia ―Non-mining sectors budding
bull Peter Morrow Chairman American University of Mongolia ―Filling in the blanks
bull N Zoljargal Governor Bank of Mongolia ―Sustainable vision
bull Gansukh Minister of Roads and Transportation ―Accessing new markets
bull J Od President MCS Group ―Building interest
bull B Chuluunbaatar President and CEO of Monnis Group ―Climbing the ranks
bull Cameron McRae President and CEO Oyu Tolgoi ―Sitting on a copper mine
BCMs English website includes the ―Mongolia Business News section where the Open Letter to
Parliament and Government is available for download
BCM continuously posts news stories and analysis of relevance to Mongolia at Mongolian Business
News before they are all put together each week for Fridays weekly NewsWire
The ―Photo Gallery contains photos from the 6th Anniversary BCM Renewal dinner on November
11 2013
BCM Football Cup 2013 pictures are posted to the website - httpbcmongoliaorgenphotos350-
enalbumalbumid=200
The BCM NewsWire will continue to be issued each Friday incorporating items already on the home
page for a consolidated account of the weeklsquos events
SOCIAL NETWORK WITH BCM
BCM LAUNCHES NEW LINKED-IN COMPANY PAGE
The Business Council of Mongolia has launched a new company page on the social networking
website LinkedIn to network its members and followers including small-medium enterprises (SMEs)
The new page will allow BCM to alert followers to the latest news and information critical to their
businesses Memberslsquo businesses will be promoted Additionally BCM plans to deliver monthly
infographics on the latest data as well as videos and other media content as they come The bulk of
the content on the new page will be in Mongolian language to better cater to BCMs Mongolian-
speaking audience and members The following link can direct you to the New BCMs Linked-in page
httpwwwlinkedincomcompanybusiness-council-of-mongoliatrk=company_logo
The Business Council of Mongolia (BCM) has expanded its reach to your favorite social networks
Keep up to date on the latest business deals in Mongolia and how the climate for investment is
improving each day with BCM
Add BCM on Facebook at httpswwwfacebookcomTheBusinessCouncilOfMongolia to read the
latest announcements and comment on events carried in the NewsWire with the community
Hear breaking news and announcements as they happen when you follow BCM on Twitter at
httpstwittercombcmongolia
We have now 2482 fans on our Facebook fans page 1527 connections on LinkedIn network and
835 followers on Twitter
Of course for news information interviews event photos and announcements regarding our
organization visit the official BCM website at httpbcmongoliaorgen
ECONOMIC INDICATORS
INFLATION
Year 2006 60 [source National Statistical Office of Mongolia (NSOM)]
Year 2007 151 [source NSOM]
Year 2008 221 [source NSOM]
Year 2009 42 [source NSOM]
Year 2010 130 [source NSOM]
Year 2011 102 [source NSOM]
November 30 2013 120 [source NSOM]
Year-over-year (y-o-y) nationwide
Note 111 y-o-y Ulaanbaatar city November 30 2013
CENTRAL BANK POLICY LOAN RATE
December 31 2008 975 [source IMF]
March 11 2009 1400 [source IMF]
May 12 2009 1275 [source IMF]
June 12 2009 1150 [source IMF]
September 30 2009 1000 [source IMF]
May 12 2010 1100 [source IMF]
April 28 2011 1150 [source IMF]
August 25 2011 1175 [source IMF]
October 25 2011 1225 [source IMF]
March 19 2012 1275 [source Mongol Bank]
April 18 2012 1325 [source Mongol Bank]
January 25 2013 1250 [source Mongol Bank]
April 8 2013 1150 [source Mongol Bank]
June 25 2013 1050 [source Mongol Bank]
CURRENCY RATES ndash DECEMBER 19 2013
Currency Name Currency Rate
US dollar USD 164138
Euro EUR 224680
Japanese yen JPY 1579
British pound GBP 268874
Hong Kong dollar HKD 21170
Chinese Yuan CNY 27031
Russian Ruble RUB 4981
South Korean won KRW 155
Disclaimer Except for reporting on BCMlsquos activities all information in the BCM NewsWire is
selected from various news sources Opinions are those of the respective news sources
SPONSORS
Khan Bank
International SOS
Wagner Asia Automotive
Oxford Business Group
Mongolian National Broadcasting
Breakthrough PR
BCM MONTHLY MEETING RECAP
The BCM meeting on 9 December with Bayanjargal Byambasaikhan in the chair was attended by 80
members and invited guests Byambasaikhan made reference to the changes made to the legal
environment for investors and how the president is putting his efforts into creating a ―smart
government to improve things even further
―I think this message is of a change for the economic life of Mongolia said Byambasaikhan
―Everyone is saying government is an obstacle and it needs to be changed Thats whats being
discussed now
BCM membership now stands at an all-time high The seven most recently joined members are
1 Amar Power LLC operates in the fields of construction of power plant and facilities relevant
configuration services consulting service sales and supply of electrical equipments Its skillful
engineering team cooperates with several organizations companies and research institutes of
Russia China the United States Canada Australia Turkey and Poland that perform similar
operations and activities
2 AREC Mortgage Corporation is a non-banking financial institution that specializes in real estate
finance in Ulaanbaatar AMC provides finance on mortgaged property and provides project finance
to real estate developers for their development projects
The banking system in Mongolia is still relatively underdeveloped AMC provides loans to SMEs at
lower rates than would otherwise be available to them All loans are well secured by property
mortgage AREC has a team in Ulaanbaatar that performs property management and asset
management for the assets AREC manages
3 Fiscal Audit provides audit consulting financial statement analyzing tax consulting and financial
statement assurance services from independent position to legal entities and business owners in line
with the Law of Mongolian Auditing Law of Mongolian Accounting and other International Auditing
and Financial statement preparation standards using with professional ethics of auditors
4 Fluor is one of the worldlsquos leading publicly-traded engineering procurement construction
maintenance and project management companies It was ranked No 1 on Fortune magazinelsquos
―Engineering Construction industry list of Americalsquos largest corporations and 1 in the same
category on Fortunelsquos annual survey of ―Worldlsquos Most Admired Companies
It operates over 1000 projects annually serving more than 600 clients in 79 different countries
with 41000 employees executing projects globally It has offices in 29 countries on six continents
and in 2012 celebrated 100 years of exceeding client expectations
5 Khaan Insurance LLC is a national investor-owned insurance company in Mongolia
Khaan Insurance was formed in 2012 to write insurance throughout the Mongolia It has 18 active
branches and was listed in the top 10 entities in terms of equitymdashall in just a year since its
establishment Khaan Insurances reinsurance partners are globally accredited companies
Its core businesses are property casualty and liability insurance
6 NovaTerra advises entrepreneurs large corporations governments financial institutions and
private equity firms Its approach is to be deeply involved with clients in long-term relationships
NovaTerra can invest alongside its clients and further invest part of its success fees into deals or
companies NovaTerra has a proven record in negotiating and closing projects and agreements with
the Mongolian Government
7 Outotec Oyj provides customers with technology solutions and services that support the entire
life cycle of operations Outotec tailors solutions to customerslsquo needs to ensure that they receive
the smartest value from virtually all types of ore while making the least impact on the
environment In addition its global sales and service network guarantees that there is always an
experienced Outotec professional on hand for support
Outotec Mongolia LLC was officially formed in Mongolia from January 2013 It now cooperates with
Erdenet Mining Co Oyu Tolgoi LLC Energy Resources LLC and Boroo Gold
J Bayarmagnai executive director of the Quality Supplier Development Center (a USAID grantee)
spoke first on his organization and its missions to increase the productivity and competitiveness of
small- and medium-size enterprises He said the center acts by intervening to facilitate in
relationships between buyers and suppliers and that its impact can be determined by looking at
added sales as indicators They also look to remove bottle necks that producers face in meeting the
needs of buyers
―This is very exciting because I believe it can bring real quality and value to business said
Bayarmagnai
One example offered was the centers experience with Wagner Asia Equipment LLC which required
a local company able to repair or salvage parts back to specifications The center sought out a
company and found Geomach which assisted in removing bottlenecks such as attaining financing
for a welding machine
―Basically we have no limit he said ―We can help SMEs deliver quality products and services to
buyers
L Sumati director of the Sant Maral Foundation spoke next to discuss progress made in Mongolias
battle against corruption He said it was impossible to deny all the progress made given all the
positive responses in his latest poll which surveyed 1200 people in the business community about
corruption
Sant Maral found that land access to be a leading challenge for businesses in Mongolia leading the
list of grievances since 2006 Other issues included mining licensing customs and regulations
Respondents said the most difficult agencies to work with were the Tax Office Special Inspection
Agency Customs and local authorities ―There may be some optimal time for development for the
future but for today it remains difficult he said
Meanwhile at the household level people reported dramatically less experiences with corruption
with the number of responders who said they had paid bribes falling from a high of 28 percent in
2007 to 8 percent this year He said there were generally positive feelings about the Independent
Agency Against Corruption and the arrests they had made too
D Jigjidmaa investment promotion program manager at the World Banks International Finance
Corp in Mongolia gave the final presentation on investment protections
―Mongolia is not so different from other developing countries especially regarding the political risks
of the last four to five years said Jigjidmaa
She said IFC had been engaged with the Mongolian government since March 2013 to collaborate on
the Investment Law that took effect in November It has also signed a cooperative agreement with
the Ministry of Economic Development to help improve the investment environment This includes
the establishment of a reference guide for complaints made by investors and how government
responded They hope to work closely with the government to improve grievance management and
dispute resolution
―Now were fine-tuning how the mechanism will work Every minister wants control over
investments in the sectors they oversee
The plan she said is to work from January 2014 to the following July to build awareness and a
stakeholder network Afterward they will then benchmark international experiences such as the
improvements made to South Koreas investment environment since 2009 to help direct the
evolution of Mongolias dispute resolution mechanism
BUSINESS
OYU TOLGOI APPROVES 2014 BUDGET
The Oyu Tolgoi LLC board of directors unanimously approved the company program plan and
budget for 2014 The decision was taken at the quarterly board meeting held in Ulaanbaatar from
11 to 12 December
―Itlsquos great to have unanimous board support for the projectlsquos coming year said Craig Kinnell
president and chief executive officer of Oyu Tolgoi ―This is a sign of confidence in the entire
8000-strong Oyu Tolgoi team After safely ramping up production this year welsquore now looking
forward to our first full year of exporting business
Source Turquoise Hill Resources Ltd
OT MINE‟S bdquoPHASE TWO‟ BANK FINANCING PLEDGES EXTENDED
Turquoise Hill Resources Ltd said on Monday that parent Rio Tinto PLC had secured extended
commitments from the banks that have agreed to finance the underground expansion of the Oyu
Tolgoi copper and gold mine The extension to March 31 gives Rio Tinto more time to resolve a
dispute over costs with the government of Mongolia Rio which owns 508 percent of Turquoise Hill
and operates Oyu Tolgoi put the mines more than USD 5 billion expansion on hold in July saying
the Mongolian government wanted parliament to approve the projects financing Mongolia which
will not see its share of Oyu Tolgois profit until Turquoise Hill recovers its costs has complained
that total costs on the first phase were USD 2 billion higher than planned It wants assurances such
overruns will not happen again and hopes to resolve the dispute by early 2014 a government
source told Reuters last month Turquoise Hill which owns 66 percent of Oyu Tolgoi had said in
June that financing commitments would expire Dec 12 The Vancouver-based company announced
a rights offering to raise up to USD 24 billion in November citing the delays at Oyu Tolgoi A
feasibility study for the underground expansion is still on track for the first half of 2014 the
company said on Monday It also confirmed that it expects Oyu Tolgoi to produce 150000 to
175000 tons of copper in concentrates and 700000 to 750000 ounces of gold in concentrates in
2014
Source Reuters
TRAFIGURA AGREES TO OFF-TAKE DEAL FOR OYU TOLGOI MINE
Commodity trader Trafigura has agreed to provide financing for the massive Oyu Tolgoi mine in
exchange for a long-term deal to buy an undisclosed portion of the output it said on Monday
Trafigura which markets a wide range of metals including copper concentrate referred to the off-
take deal in its first fully public annual report since being set up 20 years ago We also provide
finance in exchange for long-term supplies For instance we recently signed an off-take agreement
with Oyu Tolgoi in Mongolia it said giving no further details
Rio Tinto put the mines USD 5 billion expansion on hold in July saying the Mongolian government
wanted Parliament to approve the projects financing Mongolia hoped to resolve the dispute by
early 2014 a government source told Reuters last month Fifteen banks that have agreed to finance
the expansion have told Rio they will extend their commitments which were due to expire at the
end of the year until next March a statement said on Monday Trafigura also said the global copper
market is expected to be broadly in balance next year as low inventories and a recovery in global
growth offset stronger mine output
We dont expect prices to rise markedly but on the other hand with concentrates trading at close
to cost levels for some producing areas a collapse in prices is also unlikely the Trafigura report
said
The benchmark copper price on the London Metal Exchange has shed 83 percent this year weighed
down by more output from new mines such as Oyu Tolgoi and improved operations at many existing
mines The global copper market is expected to widen its surplus next year to 328000 tons from
182000 tons this year analysts polled by Reuters said in October
Source Reuters
OYU TOLGOI TO COOPERATE IN TAVAN TOLGOI POWER PLANT PROJECT
Oyu Tolgoi LLCs board of directors agreed to participate in the Tavan Tolgoi power plant project
following a series of meeting held from 11 to 13 December
The board discussed issues that remain under dispute at the meeting before giving approval of the
2014 budget After the meeting board members announced their plan to cooperate in the Tavan
Tolgoi power plant project Issues regarding involvement and the volume of investment are
expected to be discussed early next year Also discussed was the issue of the underground mine of
Oyu Tolgoi but the board did not come to any conclusion on the matter Both Mongolian and
foreign board members agreed to grant a loan to resolve the funding issue but did not set on a date
of when the loan could be received
Source Montsame
ERDENES TT UNLIKELY TO PAY $160M DEBT TO CHALCO IN 2013 SAYS CEO
Erdenes Tavan Tolgoi LLC will not likely meet its target for paying off debt owed to Aluminum Corp
of China Ltd (Chalco) by the end of this year its chief executive told newspaper Uls Turiin Toim
―To date we have paid off about 60 percent of total debt and the remaining amount is about USD
160 million out of USD 350 million said Erdenes Tavan Tolgoi Chief Executive Officer Yachil
Batsuuri
The state owned coal miner will sell 600000 tons of coal on top of the one million tons of coal
already sold for a net profit of USD 70 million to USD 80 million Batsuuri said A six-month halt in
shipments was the primary factor for delayed payment of total debt owed he said Although
production at Tavan Tolgoi was on target he said the transportation issues prevent it from making
the sales required to fully pay of its debt
―The coal being extracted from the East Tsankhi of the Tavan Tolgoi site is fully devoted to paying
off the Chalco debt of USD 350 million and therefore in order to work benefaction we have been
developing the West Block since July and started to export coal from September this year said
Batsuuri
He said Mongolia had successfully negotiated new terms for coal sales after months of selling its
coal reserves at a below-market rate The current deal is due to expire at the end of 2013 he said
He added that Erdenes Tavan Tolgoi plans to issue shares on international markets in 2015
Source Info Mongolia
RESERVES OF THE TAVAN TOLGOI JSC COAL DEPOSIT INCREASED TWOFOLD
A court ruling has allowed Tavan Tolgoi JSC to expand the size of its operating territory for an
added 70 million tons of reserves
Tavan Tolgoi JSC which operates upon the same coal deposit as Mongolian Mining Corp (MMC) and
Erdenes Tavan Tolgoi (Erdenes TT) saw its total reserves double with the expanded licensed area
Tavan Tolgoi has signed a memorandum of understanding with Chinas Shenhua Group to supply
coking coal for 20 years and will work in cooperation with Erdenes TT MMC and Shenhua for the
construction of a rail line to China
The rail line will connect the Mongolias Gashuun Sukhait port and the Gantsmod port of China
Source Unuudur
SHENHUA TO IMPORT 30-50M TONS OF COKE PER YEAR FROM MONGOLIA
Chinese coal producer Shenhua Group Corp Ltd will import 30 million to 50 million tons of coke
from Mongolia per year in the future
Zhang Guangjun deputy general manager with the Shenhua Science and Technology Research
Institute disclosed at a forum on 4 December that it would import 30 million to 50 million tons of
coke from Mongolia per year in the future Available data shows that the nation imported a total of
about 30 million tons of coke in the first half of this year and in line with industry observers the
import of Shenhua will deliver a strong impact on the domestic coke market
It has taken the group about a decade to gain the exploitation right of a Mongolia-based Tavan
Tolgoi coal mine Policy factors have been the strongest barrier from reaching that goal
Information from the China National Coal Association (CNCA) released on its website at the start of
November shows that it had signed a memorandum of understanding with three Mongolian firms
namely Erdenes Tavan Tolgoi LLC Energy Resources LLC and Tavan Tolgoi JSC on railway
construction cooperation and boosting coal trade And in line with some industry observers this is a
prelude to its success in gaining the exploitation right
Zhang reiterated that its failure to gain the exploitation right had a close tie with foreign
investment policies of Mongolian and so far the government had not even reached a conclusion
internally People in the circle said at the start of October that Mongolia released new policies for
foreign investments recently and according to the policies provided that a state-owned foreign
firm wanted to invest in industries including mining banking communications and news and media
in Mongolia Purchasing a stake exceeding 33 percent in any of these economic sectors by a foreign
state-owned entity requires a nod from concerned Mongolian authorities only at the ministerial
level And this might mean that the threshold for Chinese firms to invest in the Mongolian mining
industry would be lower
Source MENAFN
ERDENET MINING BRINGS MNT 370 BILLION TO STATE BUDGET
Erdenet Mining Co represents 30 percent of government revenues for industry contributing MNT
370 billion to the state budget in the year to December
According to the Erdenet Minings chief executive the amount of MNT 66 billion will go toward the
state by the years end Last year company represented 13 percent of income from taxes 10
percent of gross domestic product (GDP) and 20 percent of total export
Source Zuunii Medee
ASGAT SILVER DEPOSIT TO UNDERGO DEVELOPMENT
The board of Mongolialsquos 51 percent-owned joint venture with Russia Mongolrostsvetmet LLC decided
to begin development of the Asgat silver deposit
Asgat located in northwest Mongolia 1800 kilometers from Ulaanbaatar has a total average ore
reserve of 231 million tons and estimated 246 million ounces of silver The board agreed that the
project is economically viable now that a paved road leading to the development has been
complete The project is owned 51 percent by Erdenes MGL LLC and 49 percent by Russialsquos Rostec
The board agreed to the establishment of a working group to proceed with the next steps for
development
Source Business-Mongoliacom
MIAT TO HIRE FOREIGN-SKILLED MANAGEMENT
The Cabinet of Ministers decided on 14 December to hire a foreign-skilled executive management
team to operate state-owned MIAT Mongolian Airlines
The Cabinet hopes in hiring a foreign management it may produce greater profits increase its
competitiveness ensure greater flight safety and better prepare national staff The Cabinet
relayed orders to the State Property Committee and MIATs representative Council
Source Montsame
STANDARD BANK CONSULTANT DETAINED AMID DEBT DISPUTE
Mongolia has issued a travel ban on a New Zealand national consulting for Standard Bank Group Ltd
amid an escalation in a dispute with a local company over a debt repayment
Chris Bradley was part of a five-person team from Africalsquos biggest lender that visited Ulaanbaatar
last month to seek talks with the government over its USD 131 million in loans to Just Group LLC a
holding company said two people familiar with the matter The people asked not to be named
because they arenlsquot authorized to speak publicly Standard Bank alleges the loans are in default and
filed a lawsuit in July in a London court seeking repayment
Standardlsquos loans were made between 2007 and 2010 to Just Group to fund raw materials supplies
and debt repayments at state-controlled Erdenet Mining Corp and Ulaanbaatar Railways Bradley
said by phone on 2 December that he had been due to depart Mongolia on 29 November but ―is
restricted by the authorities from leaving Bradley said he was advised of his situation by local
police and that he is a suspect in an investigation
―I went in gladly to assist the police and compare notes said Bradley ―We are focusing on the
commercial aspects of this transaction and they are focusing on the criminal aspects The two
although linked are also running in parallel
Mongolia has barred foreign executives from leaving the country during investigations into
companies before Justin Kapla a US citizen and then-president of coal miner SouthGobi Sands
LLC was banned from departing at the end of last year and is still in the country after the nationlsquos
Independent Authority Against Corruption launched a probe into the companylsquos mining licenses
Sharavlamdan Batkhuu Just Grouplsquos controlling shareholder and other companies in the group
have defaulted on loans since 2011 Danjilaa Ganbat director of the banking supervision
department at Mongol Bank the nationlsquos central bank said in July Ganbat made his comments
after Just Grouplsquos Savings Bank Mongolialsquos fifth-largest lender was declared insolvent due to
affiliated companies defaulting on loans Batkhuu and Just Group are among the defendants in the
Standard Bank lawsuit
Standard Bank wasnlsquot able to arrange any meetings with Mongolialsquos government to resolve the debt
dispute the people familiar with the matter said Bradley was the Mongolia specialist on the team
and the only member not directly employed by the bank said one Bradley said he worked as an
employee of Standard Bank from 1999 to 2001 and has consulted on a contract basis for the bank
over the last nine years including five visits to Mongolia since May ―to engage with the government
on our issues the debt recovery
Cabinet Secretary Saikhanbileg Chimed said by e-mail on 3 December that he thinks itlsquos better to
solve the debt dispute out of court and planned to ―push appropriate people to respond
Bradley 50 is a native of Hokitika New Zealand ―In the absence of a New Zealand consulate the
British Embassy is working on behalf of Bradleylsquos consular welfare said Julian Pearson Deputy
Head of Mission at the British Embassy in Ulaanbaatar on 2 December
Source Bloomberg
KHAN BANK OPENS EXPRESS BANKING CENTER
Khan Bank LLC opened an express banking center on 10 December
The Express Banking Center services include a new ATM to deposit cash an E-Corner which allows
customers to make transfers between Khan Bank accounts review accounts through Internet
banking and receive account slips They can also be used to obtain foreign remittances
The Banking Centers are located at the State and Ulaanbaatar department stores on Peace Avenue
and will be open 24 hours every day
Source Khan Bank LLC
ERDENE ANNOUNCES NEW GOLD DISCOVERY AT ALTAN NAR
Erdene Resource Development Corp reported significant gold and silver results from the second
phase of trenching completed during the fourth quarter at its Altan Nar gold-polymetallic project
Results have been received for an additional 11 of the 28 trenches completed The trenching
program was designed to test 10 distinct mineralized zones across the 55-kilometer-long Altan Nar
target area Samples from the final thirteen trenches over the central Altan Nar prospect area have
been submitted to SGS laboratories with results anticipated during first quarter 2014
Highlights include the discovery of a new high-grade gold mineralized zone one kilometer north of
Discovery Zone (Maggie prospect) Significant gold mineralization (Northbow prospect) identified in
the northern portion of a previously untested 700-meter-long anomaly that widens and intensifies
to the south and gold and base metal mineralized zones confirmed at northwestern and
southeastern extent of the 55-kilometer-long Altan Nar target area (Northwest and Far South
prospects) All 11 trenches testing 6 distinct targets returned highly anomalous precious and base
metal mineralization
Source Erdene Resource Development Corp
XANADU MINES FORMS JV FOR COPPER EXPLORATION IN MONGOLIA
Xanadu Mines Ltd has established a joint venture company Mongol Metals with Ganbayar
Lkhagvasuren director and substantial shareholder of Xanadu to execute Xanadulsquos business and
copper exploration strategies
Xanadu recently returned broad copper and gold values from a 780-meter trenching program to test
coincident geophysical and geochemical anomalies at its Oyut Ulaan copper-gold porphyry project
in Mongolia The program has defined three near-surface mineralized porphyry centers with results
up to 85 meters at 075 percent copper with 054 grams per ton gold including 36 meters at 149
percent copper and 102 grams per ton gold The trenching was performed concurrently with the
recent drilling at the Diorite Hill prospect and drill testing of the new targets is scheduled within
the next phase of drilling
Source Proactive Investors
JATENERGY TESTS PROVE CONVERSION OF MONGOLIAN BROWN COAL TO SEMI-COKING COAL
Jatenergy Ltd is on track to pursue its Mongolian coal upgrading plans after testing proved that
coal from the country were highly suitable for conversion using Coal Plus technology
This sets the stage for the immediate start of its investment strategy with Monrospromugoli LLC
which could result in a USD 2 million upfront technology payment and ongoing annual royalties of
USD 176 million The test results had demonstrated that the high moisture high volatile low
calorific Mongolian brown coal can be easily converted into semi-coking coal using Coal Plus
―This report independently verifies that Coal Plus has potential in Mongolia executive chairman
Tony Crimmins said He added ―As the technology is already commercialized and in use in 5
locations in China for over 4 years we see high probability of financing this project in Mongolia
The confirmation that Mongolian brown coal is suited for conversion using Coal Plus into higher
value products paves the way for Jatenergylsquos agreement with Monrospromugoli to go ahead
Source Proactive Investors
SOUTHGOBI RESOURCES ANNOUNCES RESTATED FINANCIAL AND OPERATING RESULTS
SouthGobi Resources Ltd released its regular update on restated financial statements and
management discussion and analysis presentation In the consolidated financial statements for the
year ended 31 December 2012 the restated financial position at 31 December 2012 31 December
2011 and 1 January 2011 the results of operations for the years ended 31 December 2012 and 31
December 2011 and the statement of changes in equity and statement of cash flows for the years
ended 31 December 2012 and 31 December 2011
Following the correction in SouthGobilsquos point of revenue recognition revenues from affected coal
sales contracts are recognized in later periods than previously reported and some revenue has been
reported after 31 December 2012 as not all contracted coal has been collected by customers
During the periods from 2010 to 31 December 2012 trade and other receivables have been adjusted
lower and deferred revenue recognized to reflect revenue being recorded in later periods than
previously reported The inventory balance increased over the same period to reflect higher coal
inventory stockpile balances Prepaid expenses also increased with a corresponding decrease in
trade and other payables as coal sales royalty expenses were recognized in late r periods than
previously reported
The consolidated financial statements auditorslsquo reports and related financial information for the
affected periods contained in SouthGobilsquos filings filed prior to 14 November 2013 should no longer
be relied upon The restatements do not result in a change in cash at the end of any period The
statement of cash flows as reported does not change except for the reclassification of various items
within operating activities
Separately on 19 November 2013 SouthGobi paid USD 81 million in cash to the China Investment
Corporation in accordance with the convertible debenture agreement The amount related to the
64 percent per year cash interest payment and is payable semi-annually Further on 21 November
2013 SouthGobi issued 35 million common shares to China Investment
Source SouthGobi Resources Ltd
MSE CANCELS KHANSH INVEST‟S BROKERAGE LICENSES
The Mongolian Stock Exchange has invalidated the brokerage and securities dealing licenses of
Khansh Invest LLC on 4 December
―The companylsquos clients will be transferred to other brokerage firms that conduct professional
services in the market with licenses for broker-dealer related issues and it shall be governed
according to the concerning jurisdiction and regulations said the Source
Source Mongolian Stock Exchange
MNU PARTNERS WITH UNIVERSITY OF CALIFORNIA FOR RENEWABLE ENERGY
Mongolian National University (MNU) and the University of California announced 13 December the
signing of a memorandum of understanding to conduct high temperature solar thermal technology
research in Mongolia in 2014
Under the terms of the agreement the Mongolian Innovation and Technology Centre at MNU will
have a 100-kilowatt high-temperature non-tracking solar array on their campus that is not only the
first and the largest solar array of its kind in Mongolia but anywhere in the world
―We are delighted to be working with the University of California on this great project and we
particularly excited to make this announcement on the 15th Anniversary of MNU said MNU
Founder and Chairman Munkhbat Lkhagvasuren ―The thermal solar array will be installed
monitored and evaluated by our MNU Engineering Department under the advice and instruction of
the faculty of the University of California Munkhbat said
The technology was developed by University of Californialsquos solar director and professor Roland
Winston who is also a world-renowned scientist in the solar research field Winstonlsquos technology is
already operational at the University of California Purdue University and the Gas Institute of
Chicago although it has not yet been released for commercial deployment anywhere in the world
―My goal in working with MNU is to provide the technology and the staff he said ―Ultimately it
is the Mongolian engineering students that will be required to install and operate these systems as
well as determine the scope of the application beyond simply providing a high temperature heat
source
Source Mongolian National University
MCDONALDS INTERNATIONAL CALLS FOR FRANCHISEE TO POSSIBLY OPEN IN MONGOLIA
McDonalds International sent out a press release on December 10 calling for partners to approach
the company to open its first burger outlets in Mongolia
―We have not set a firm date for the development of McDonalds restaurants in Mongolia In the
future we may take steps to open McDonalds restaurants in Mongolia and if we seek a franchisee to
represent us the person will have the following characteristics
―High integrity business experience in the market history of success ability to work well with a
franchisor ability to complete a training program that can take about nine months willingness to
devote full time to the McDonalds restaurant business retail experience knowledge of real estate
market significant capital
The press release ends by inviting candidates to apply for a franchise
Source BNE
JAPANESE ldquoSUN RICE PLANT OPENS IN MONGOLIA
An opening ceremony for Mongolialsquos Technik Import LLC and Japanlsquos Niigata Kubota ―Sun Rice
factory in Ulaanbaatar on December 10
Niigata brown rice will be imported sorted and packed at the Ulaanbaatar factory which has a
daily capacity for the production of two to three tons of packaged rice The plant is equipped with
fully automated machines from Kubota The rice will begin sale in the domestic markets at MNT
5000 to MNT 7000 per kilogram
―Mongolia has been receiving rice from the people of Japan under aid program for many years
said Deputy Minister B Tsogtgerel ―During the latter event I and Ambassador Takenori Shimizu
were discussing that the period of receiving rice as aid is over and now the time of reciprocal
assistance has come and the ―Sun Rice factory is a sample of joint cooperation to produce the
world known quality in Mongolia
Niigata Prefecture is the second largest producer of rice in Japan after Hokkaido
Source Info Mongolia
MNBC MIGRATES TO DVB-T2 WITH THOMSON VIDEO NETWORKS
Video Mongolia Digital Broadcasting (MNBC) has launched Mongolias first ever DVB-T2 service using
head-end systems from Thomson Video Networks
Launched in 2007 MNBC was Mongolias first digital terrestrial TV network operator and will now be
able to broadcast up to 120 digital TV channels over five UHF transponders to maintain its position
and compete with Mongolias national satellite operator Working with systems integrator Digital
Horizon MNBC has deployed TVNs Vibe EM1000 multi-channel SD encoders and NetProcessor 9030
multiplexer and video processor with an embedded DVB-T2 gateway
Source Rapid TV News
CHINESE FIRM NEGOTIATING TO ACQUIRE JUST AGRO
A Chinese company is in negotiations to purchase Mongolias only meat exporter said a company
source
Just Agro LLC which owns 11 meat companies with the Makh Market brand is reportedly the subject
of negotiations for sale to a Chinese entity said the source who asked not to be named The Just
Agro company provides 40 percent of meat processing and 30 percent of storage in Mongolia and is
the only meat exporter in Mongolia
Last July authorities revealed that Just Grouplsquos Sh Batkhuu falsified signatures of the State
Property Committee and Erdenet Mining Cos director to receive USD 131 million in loans from
South Africas Standard Bank putting up the Erdenet Mine as collateral for the credit After Just
Group was dissolved the central bank took over all its assets including Just Agro
Source Unuudur
MONGOL TV EXPOSES MEDIA CORRUPTION WITH FAKE MCDONALDS STORY
An investigative news show on Mongol TV planted a false news story last week with all 9 of
Mongolias major local media outlets about McDonalds opening a branch in the country The
exercise was undertaken to expose corruption and the rampant practice of paid-for journalism in
Mongolia Mongol TV said
The appearance of a Mr P Rank promising McMutton burgers and goat milk-shakes in the
official press release set off no alarms at the media networks which took between USD 150 and
USD 700 from an undercover journalist to run the story on their websites on the front page of three
newspapers and on TV news on three networks including the local public broadcaster
―Soon the first letter our children learn will be Mlsquo Mr P Rank says with a golden shining smile
according to the fake release which also claimed McDonalds was to be sponsored by Mongolialsquos
Health Ministry and sold in schools all over the country
After Mongol TV unveiled the sting it invited representatives of the 9 duped media organizations to
explain their actions though all reportedly declined
Source Hollywood Reporter
EBRD ADOPTS NEW STRATEGY FOR ENERGY AND NATURAL RESOURCES SECTOR
The European Bank for Reconstruction and Development (EBRD) has adopted a new strategy that
will guide its investments in the energy and natural resources sector for the next five years EBRD
press release reported Tuesday
The bank sets out a commitment to helping its countries of operations move toward a sustainable
energy future The EBRD region which stretches from Morocco to Mongolia is faced with a
challenge of providing sustainable secure and affordable energy The energy strategy identifies
energy efficiency as the first and best response to this challenge
―What the EBRD brings to this challenge is our focus on structural reform said EBRD Managing
Director for Energy and Natural Resources Riccardo Puliti ―We have learnt from our work that
when properly channeled market forces can be harnessed to make energy sectors more sustainable
- environmentally economically and politically
The bank intends building on its well-established support for the Extractive Industries Transparency
Initiative by requiring clients operating in the extractive industries sector to disclose subsoil
contracts and licenses as well as all payments they make to local and national authorities
In the case of coal-fired generation the strategy supports the move to lower-carbon fuel sources in
response to the challenge of climate change In alignment with other international financial
institutions the EBRD will not finance any coal-fired power generation projects except in rare and
exceptional circumstances in which there is no feasible alternative energy source
The strategy also reinforces the EBRDs growing support for renewable energy which will include
financing both energy-generating capacity and key infrastructure such as transmission lines and
backup generation
―We have also developed and invested in the first wind farm in Mongolia - where it was also the
first new energy generator in 30 years said Puliti
Source Trend News Agency
SUSTAINABILITY HOSTS SESA WORKSHOP
Sustainability East Asia LLC organized a National Validation Workshop on 10 December as part of its
responsibilities for establishing a strategic environment and social assessment (SESA)
Participants from across the country arrived to represent government the private sector and non-
government organizations to discuss the proposed SESA The next step will be to assess mining
growth options and identify at least three likely growth scenarios which mining could bring to
Mongolia Afterward the SESA team will evaluate the environmental and social issues that are likely
to arise as a consequence of each scenario
The Mining Sector Institutional Strengthening Technical Assistance Project commissioned
Sustainability to conduct a strategic environmental and social assessment for Mongolias mining
sector
Sustainability will also perform a gap analysis of the legal regulatory and institutional capacity to
deal with each possible scenario An action plan is expected for SESA by summer 2014
Source Sustainability East Asia LLC
UB REGISTERS MATERNITY HOSPITAL NO 1
The new building annex for Maternity Hospital No 1 was registered as capital city property
13 December at a regular session of the Ulaanbaatar Citizens Council This maternity hospital
building was built with financing from Boroo Gold and was presented as a gift to the people of
Mongolia With a capacity to receive 150 mothers and children its total cost was MNT 92 billion It
includes the hospital building of 1169 square meters external heating clean water and sewer
water pipelines a diesel station an asphalt road a pedestrian walkway outdoor vegetation and an
external LED sign
This new building was commissioned 15 June The new annex has one vacuum operation room and
two standard operating rooms on the fifth floor 100 beds for women and 50 beds for infants on the
third and fourth floors paraclinical and sanitation units a pharmacy a conference room and
training rooms on the second floor an ambulatory section and reception on the first floor and staff
cafeteria closets washrooms and a disinfection chamber in the basement
Source Centerra Gold Inc Newsmn
RIO TINTO‟S SAM WALSH DIGS IN FOR THE LONG HAUL
Sam Walsh wants to remain as Rio Tinto PLClsquos chief executive beyond the end of his contract and
has told the minerlsquos board he will not be ready to retire in 2015
―I am there if they want me said Walsh ―Likewise if therelsquos someone else who can come in and
take what Ilsquove done to the next level thatlsquos fine too
The Australian 63 later this month replaced Tom Albanese 11 months ago after Rio decried
―unacceptable writedowns on its coal business in Mozambique Walsh says investors support his
strategy to cut costs and sell non-core assets
Walsh said he has explored selling all of Riolsquos aluminum business this year in what would be a
signature reversal of Albaneselsquos costly purchase of Alcan in 2007 But he says no offers have been
good enough while the business is not generating enough cash for an initial public share offering or
spin-off to Riolsquos shareholders Walsh has also been frustrated in attempts to sell Riolsquos diamonds
business
―Who would thank me if I sold something under value just to get a tick At the end of the day you
have to be pragmatic about things he said Offers ―werenlsquot in the bailiwick of where we thought
they should be
The Alcan deal epitomized Riolsquos poor recent dealmaking and Walsh admits the company had
―relaxed some of the controls it should have had Rio staff has now ―refound their mojo he said
On operating costs which Rio has said it will cut USD 3 billion next year he said ―There is rolling
momentum and thatlsquos important
Source Financial Times
KYRGYZSTAN FILES ECOLOGY DAMAGE LAWSUIT AGAINST CENTERRA
Kyrgyzstan is suing Canadas Centerra Gold Inc for 15 billion soms (USD 304 million) over what the
government says is ecological damage marking a new twist in a bitter row with the investor running
the largest Kyrgyz gold mine
The state environmental protection and forestry agency said in a statement that it had filed the
lawsuit at an economic court in the Kyrgyz capital Bishkek saying Centerra Gold had ignored its
earlier request for voluntary compensation It said the alleged ecological damage included
emissions of pollutants and waste dumps It said its claim referred to the companys operations
between 1996 and 2011
Centerra had said earlier that it viewed the governments claim as exaggerated and unfounded
The company disagrees with these charges and plans to give explanations on this matter in the
nearest time said a spokesman for the Kumtor Operating Company (KOC) the Centerra subsidiary
that runs the Kumtor mine in the Tien Shan mountains
The Toronto-listed miner which also owns the Boroo gold mine in Mongolia is already under
pressure from the Kyrgyz parliament which demands the state hold 67 percent in a proposed joint
venture to run the mine In September the government and Centerra Gold signed a memorandum
of understanding paving the way for Kyrgyzstan to swap its 327 percent stake in the Canadian firm
for 50 percent in a venture that would own Kumtor But in October the legislature voted to tear up
the document and seek control over the planned venture It gave the cabinet until 23 December to
report on its talks with Centerra Gold on setting up the venture Pearson said Centerra is having
constructive dialogue with the Kyrgyz government
Source Reuters
ECONOMY
FITCH AFFIRMS TWO MONGOLIAN BANKS AT B REVISES OUTLOOKS TO bdquoNEGATIVE‟
Fitch Ratings on 16 December revised the outlook on the Long-Term Issuer Default Ratings (IDRs) of
Khan Bank LLC and XacBank LLC to ―Negative from ―Stable At the same time the agency
affirmed the two Mongolian banks IDRs and viability ratings at B and b
The revision of the outlooks on both banks IDRs reflects weakening operating conditions as
indicated by the change in the Outlook for the Mongolian sovereign (B+) to Negative from Stable on
13 December The sovereigns outlook was revised due to mounting risks to the countrys economic
and financial stability Ratings on the two banks could be downgraded if pressures on asset quality
and liquidity intensify Persistent local-currency depreciation would reduce borrowers repayment
capacity and could lead to accelerated deposit withdrawals given the countrys high level of
dollarization
The banks ratings also remain sensitive to the withdrawal of credit stimulus as this could result in
asset deterioration on slowing economic growth or higher inflation Further decline in the
governments international reserves could also trigger a negative rating action as the banks
currency-related risk is counterbalanced by the authorities swap facility and unlimited foreign-
currency conversion Both banks ratings are also sensitive to any changes in their steady access to
capital from private-sector owners
Khan Banks Support Rating and Support Rating Floor (SRF) reflect Fitchs view that as the largest
bank in Mongolia it would be likely to receive state support in case of need However the
Mongolian sovereigns ability to provide timely support to the banking system remains limited as
underlined by its IDR of B+ A downgrade of the sovereign ratings would point to weakening in the
Mongolian governments ability to provide timely support to the banking system which put negative
rating pressure on Khan Banks SR and SRF In contrast Fitch expects XacBanks SR and SRF of 5B-
to be maintained even if the sovereigns rating is downgraded to B This is because the current SR
and SRF already reflect the agencys view that support from the sovereign in case of need cannot
be relied upon
The rating actions are as follows Khan Bank Long-Term Foreign-Currency IDR affirmed at B
Outlook revised to Negative from Stable Short-Term Foreign-Currency IDR affirmed at B Long-
Term Local-Currency IDR affirmed at B Outlook revised to Negative from Stable Viability Rating
affirmed at b Support Rating affirmed at 4 Support Rating Floor affirmed at B XacBank Long-
Term Foreign-Currency IDR affirmed at B Outlook revised to Negative from Stable Short-Term
Foreign-Currency IDR affirmed at B Long-Term Local-Currency IDR affirmed at B Outlook revised
to Negative from Stable Viability Rating affirmed at b Support Rating affirmed at 5 Support
Rating Floor affirmed at B-
Source Fitch Ratings
MONGOLIA SCORE FALLS ON POLITICAL RISKS INDEX FOR MINING INVESTMENT
An annual survey by Behre Dolbear of political risks saw Mongolia decline 5 points in an index
ranking Mongolia 19th out of 25 countries
Mongolia this year received a score of 269 compared with 32 last year Leading the countries
surveyed was Australia down 07 points from last year Russia with a total score of 171 compared
with 16 last year was the lowest ranking
The 25 countries considered in this yearlsquos survey are ranked based on seven criteria
-the countrylsquos economic system
-the countrylsquos political system
-the degree of social issues affecting mining in the country
-delays in receiving permits due to bureaucratic and other issues
-the degree of corruption prevalent in the country
-the stability of the countrylsquos currency and
-the competitiveness of the countrylsquos tax policy
Each criterion is rated on a qualitative scale from one (worst) to 10 (best) that reflects conditions
that promote investment growth in the mining sector The maximum score attainable for a country
is 70 points
Source Behre Dolbear Group
MONGOLIA LOOKS FOR SECOND CHANCE WITH FOREIGN INVESTORS
Saruul Ganbaatar the deputy head of Mongolias stock exchange hopes the countrys days of
interventionist economic policies are over and new laws ensuring foreign investors access to the
frontier markets industries will bring back sorely needed cash
Ganbaatar 32 who cut his investment teeth in Chicagos financial houses after graduating from
Loyola University is careful not to over-promise on what the stock market can deliver in 2014 and
beyond in terms of new listings or overall growth In October a law was passed easing ownership
restrictions for private companies to invest in the strategic industries A Securities Markets Law
coming into effect 1 January 2014 is expected to provide the key ingredient to attract deep
pocketed institutional investors such as mutual funds to invest
This really is the missing ingredient said Ganbaatar who has been traveling the globe promoting
the changes in the laws to global investors for the past two weeks
The stock index fell 19 percent in 2012 and year-to-date is down 115 percent although it did start
to climb with the newly passed laws On 1 January the new Securities Markets Law will allow
Mongolias commercial banks to offer custodial banking services Custodial banks serve as safeguards
for a firm or individuals financial assets playing a critical role in the final settlement of market
transactions Total market capitalization now is between USD 900 million and USD 1 billion Dont
expect the number of new listings to mushroom There may instead be a cull of companies Fifty-
five to 60 of them many of which have not traded in years are being reviewed for potential
delisting
The Mongolian Stock Exchange 100 percent state-owned is perhaps itself a candidate for
privatization It has been in a strategic partnership with the London Stock Exchange for two and a
half years
They have the right of first refusal he said
Source Reuters
CPI INCREASES TO 12 PERCENT YEAR-OVER-YEAR IN NOVEMBER
The National Statistical Office reported a 12 percent increase in the national consumer price index
(CPI) in November year-over-year
The CPI growth which also in November grew 13 percent from the previous month was explained
by a 14 percent increase in food prices and non-alcoholic beverages 23 percent for clothing
footwear and fabrics and 07 percent for housing water electricity and fuels
Source Info Mongolia
GROWTH SEEN IN EXPORT OF PRECIOUS METALS
The export value of precious metals grew 114 percent in November from the month before and 63
percent from the same period in 2012 according to the National Statistical Office
Exports totaled USD 38 billion in the year to December while imports grew to USD 58 billion The
foreign trade balance saw a deficit of USD 2 billion November saw exports of USD 381 million and
imports of USD 514 million with exports and imports in decline between July and November The
value of export products for the first 11 months was USD 11 billion Despite the gain in precious
metal exports exported minerals which represented 81 percent of all exports in the year to
November fell 129 percent from the year before
Source Zuunii Medee
MNT 788 BILLION WILL BE ENTERED INTO THE STABILIZATION FUND
The Stabilization Fund is set to collect MNT 49 billion this year and MNT 298 billion next
The Stabilization Fund was established to collect surplus revenue in years of economic gains from
the mining sector to cushion possible annual losses during economic downturns and weak
commodity demand Any gain in the price for gold and coal next year will also be reflected in
allotments to the fund
Source Zuunii Medee
ECONOMIC DEVELOPMENT MINISTRY PLANS TO PUT 81 OF BUDGET INTO CONSTRUCTION
The Economic Development Ministry plans to invest MNT 814 percent of its total investment budget
into construction
Beginning 1 January 2014 the ministry will provide MNT 9303 in loans toward the construction
sector The ministry will spend 39 percent of its budget for reconstruction and repair 10 percent
for the purchase of new techniques and technical equipment 3996 percent for infrastructure
2743 percent for education and health 636 percent for employment and agriculture and 2926
percent for other sectors of the economy
Projects include the construction of 30 clinics 27 cultural centers 6831 km of paved roads and
1032 m length of bridges Mongolia has received USD 55 billion in aid in the last two decades of
which 55 percent was in the form of low rate loans and 45 percent as non-repayable grants for
investments into agriculture infrastructure power and health sectors
Economic growth since 2011 has allowed Mongolia less aid than in the past The government has
now turned its focus on providing funding with concession agreements to large scale projects such
as the Nariin Sukhait-Shivee paved road and the power station at Mogoin gol Other projects include
Power Plant No 5 the Altanbulag-Ulaanbaatar-Zamyn Uud highway the Tavan Tolgoi- Khanbogd-
Khangi road and the Tuul Songino water reservoir complex
Source Zuunii Medee
TT POWER PLANT MAY NEED CONCLUSION TO OT DISPUTE SAYS DIRECTOR
Uninterrupted development of the Tavan Tolgoi power plant will ride on the outcome of disputes
concerning Oyu Tolgois underground mine said the director of the plant
―One of the main risks is the issue of a main user Enkhsaikhan said ―The key buyer of the power
from the TT Power Plant is OT Due to the uncertainty over phase twolsquo and unresolved matters
with the government of Mongolia OT is not regarded as a reliable buyer on a stand-alone basis
He added that the power company may request a guarantee from Oyu Tolgoi
A consortium that includes Koreas Posco Energy and Daewoo Engineering and Construction GDF
Suez Energy Asia Japans Marubeni Corp and Kansai Electric Power in March was selected for
development of the plant which has a preliminary estimate cost of USD 1 billion Those expenses
include installation of 150 kilometers of electric lines between Tavan Tolgoi and Oyu Tolgoi The
consortium will be expected to raise 30 percent of the cost itself while the remaining 70 percent
will come from bank loans However the uncertainty surrounding the Oyu Tolgoi copper mine could
create more hold ups
Source Zuunii Medee
CABINET TO CONCLUDE CONCESSION ON ALTANBULAG-ZAMYN UUD HIGHWAY
The Cabinet of Ministers ordered ministers to conclude a concession agreement for the Altanbulag-
Ulaanbaatar-Zamyn-Uud highway
The government is planning to establish the concession contract with the Chinggis Land
Development Group which according to the agreement shall have exclusive rights to construction
ownership and transfer of property using its own financing The concessionaire shall complete the
construction within three years after that shall operate the facility for another 30 years before
transferring the ownership to the Government
If Chinggis Land accepts these terms it would be responsible for developing a feasibility study and
blueprint of the project to be approved by the relevant ministries before concluding a financing
agreement The concession agreement will come into effect after the Chinggis Land Development
Group obtains a financing agreement for USD 1 billion from a commercial bank of Mongolia
The government will be responsible for freeing up the land where the highway is planned while the
Chinggis Land would cover the costs for doing so
Source Montsame
MNT 116 BILLION WILL BE SPENT FOR BUILDING EMERGENCY ALARMS IN UB
The National Emergency Management Agency has installed an emergency alarm system in 60
locations of Ulaanbaatar The alarm will alert citizens to natural disasters such as earthquakes
The alarms will be controlled from a center by microwave radios and satellite communication
devices
Source Udriin Sonin
EIU CLARIFIES EXTENT OF OFFICIAL ESTIMATES OF OIL SHALE RESERVES
The latest research from Mongolias mining ministry gives a clearer picture of oil shales
development potential in the coming years Although Mongolia has long been known to have
substantial oil shale deposits previous estimates were extrapolated from rudimentary surveys
conducted in the 1990s and thus left the actual reserves open to speculation
Plans to develop the industry took shape only in April 2013 when an American company Genie
Energy signed a five-year deal with the Petroleum Authority of Mongolia to explore oil shale
reserves in central Mongolia Genie also plans to build a USD 4 billion processing factory in Tuv
Aimag According to government projections the processing plant will generate USD 850 million of
tax revenue annually Aside from the economic benefits of the project domestic fuel sources could
help Mongolia to improve its energy security by loosening the countrys dependence on its powerful
neighbors At present 90 percent of Mongolias oil and related products come from Russia with most
of the remaining amount being imported from China
Yet the benefits of large-scale oil shale extraction are not as clear as they might seem at first
glance Most importantly Mongolias oil shale resources should not be confused with the shale oil
phenomenon that is currently sweeping the United States Oil shale (also called kerogen) is more
expensive to extract than shale oil and carries greater environmental costs In particular oil shale
requires a large amount of water to process which could be a risky proposition in Mongolia where
hydrological resources are already under strain Although other countriesmdashEstonia in particularmdashuse
oil shale as a substitute for coal extracting liquid fuel from the shale is a complex and relatively
untested process
Genie Energys progress on the project seems more substantial than that of comparable coal
liquefaction projects that have faltered in the region However environmental technical and
political limitations suggest that Mongolias overall dependence on foreign fuel will not change
significantly in the foreseeable future
―We remain doubtful that oil shale will play a significant role in Mongolia in the next two years so
our economic growth and trade forecasts will remain unchanged said the Source
Source Economist Intelligence Unit
MONGOLIA AND THE THREAT OF THE RESOURCE CURSE
Mongolia is at a crossroads while investors complain the government is dragging its feet on allowing
miners to start digging it is crucial that it get things right at the early stages of the resources
boom
Mongolias challenge will soon be the worlds says Richard Dobbs and his team at McKinsey in a
report predicting a USD 17 trillion investment bonanza by 2030 to keep up with demand for oil gas
and other materials In 1995 about 58 countries depended on resources for the bulk of their output
and wealth In 2011 that number had risen to 81 By 2030 roughly half of the worlds economies
will essentially become giant filling stations for developing superpowers from China to South Africa
That means that instead of the world moving toward greater transparency democracy and freer
markets we could see rising corruption levels and even greater income inequality
Economies with natural-resource endowments have a huge opportunity to transform their
prospects but history suggests that they could all too easily squander the windfall says Dobbs
director of the McKinsey Global Institute in London
The world would be wise to take steps today to break this cycle McKinsey recommends several
While not terribly original they include strengthening public institutions and good governance
building decent infrastructure boosting national competitiveness promoting sound fiscal policy
making and spending the windfall wisely while engaging in forward-looking economic and social
planning The trouble is that political will and integrity is often the first casualty once the minerals
start flowing out and the spoils come pouring in
Mongolia is at that very crossroads today Investors complain the government is dragging its feet on
allowing miners to start digging But its more important to get things right at the early stages of
the resources boom That means acting now to create the institutions and regulatory frameworks
needed to ensure revenue transparencymdashknowing exactly how much money is being dug out the
ground and where its going Why not set up a sovereign-wealth fund to save for Mongolias future
When the stakes are that high a little patience can go a long way
Source Bloomberg
MONGOLIAS NOMADS WARM TO SOLAR POWER
In Mongolia often known as the land of the blue skies the sun shines for 250 days on average each
year It beats down on the sparse plains and on the Gobi desert that spans the countrys southern
border with China
It shines even during the frigid winter days on the hundreds of thousands of nomads who still roam
the steppes herding animals and living in dome-like tents calling gers About 800000 of Mongolias
28 million inhabitants still live the traditional nomadic lifestyle that has remained largely
unchanged for generations Apart from the addition of motorbikes the occasional petrol generator
and a passing trade from intrepid tourists wanting to stay in a ger for the night life is almost the
same as that of many nomads grandparents and great-grandparents Almost but not exactly
Dotted across the steppes glints of light can be seen as the sun bounces off the solar panels that
have been installed on the sides of gers made of felt and yaks wool At the start of this millennium
Mongolias herders and nomads had little or no access to modern electric power and its potential
benefits But as of 2013 thanks to a concerted push by the Mongolian government almost 70
percent of nomadic people have access to electricity Bor a herder who mainly travels around
western Mongolias Arkhangai province is one of the people whose family benefits from portable
solar home systems (SHS)
We use it for generating the power for lighting in the ger charging phones we can also generate a
fridge to keep food longer and we can run a television That is very useful for us because we can
get the most recent weather forecast which is important for our work and keeping our animals
safe Before we had power it was very difficult Now it is almost like living in the city
The ability to charge mobile phones is also important for the herders who often have children
staying at boarding schools Access to electricity also allows families to contact emergency health-
care and doctors for advice without having to make the often arduous journey to the nearest village
or town
The solar systems were distributed and installed with the help of the World Bank after the
Mongolian governments National 100000 Solar Ger Electrification Program ran into difficulties A
World Bank report Capturing the Sun in the Land of the Blue Sky describes the difficulties faced by
the Mongolian government on its ambitious project
By 2005 five years into the plan 30000 families had been kitted out with an SHS but then the
program began to stagnateThe government of Mongolia recognized that considerably more effort
was necessary not only to keep the program on track but to scale-up implementation in order to
achieve the National 100000 Solar Ger Electrification Program target the report said In 2006 the
World Bank agreed to cover half of the initial outlay costs for each family as well as after-sales
maintenance with 50 centers set up across the country including at least one in each of its 21
provinces so that the herders would not have to travel to Ulaanbaatar every time the solar panels
needed maintenance
The SHS project also offers environmental benefits to a country where the ratio of carbon dioxide
emissions to economic output is ten times higher than the world average because of the increase in
mining over the past decade as the true extent of Mongolias mineral wealth became apparent The
solar systems are slowly replacing the diesel generators used by some nomads as a means of
generating power although they are still using stoves for heating burning wood coal and dung
throughout the year
Source Al Jazeera
IRON-ORE AND COAL PRICES GO SEPARATE WAYS
Prices of the key ingredients in steel productionmdashiron ore and coking coalmdashare moving along sharply
different paths as mining companies resist cutting coal output despite the market being awash with
the raw material
While iron-ore prices have risen 22 percent since May coking coal is still searching for a rebound
Coking-coal prices are off more than 4 percent over the same period China is on course for another
year of record steel production with supply directed to the construction of high-rise apartment
buildings the manufacture of luxury cars and other uses
There is simply too much coal on the market the International Energy Agency said in a report this
week
Shipments of steelmaking coal from Australiamdashthe worlds biggest exporter of the commoditymdashare
forecast by the government to rise to 178 million tons in 2015 from 145 million tons last year Most
goes to China which accounts for 60 percent of global demand In contrast global iron-ore
exporters are struggling to increase output in areas other than Australias remote Pilbara region
supporting prices of that commodity The spot price of iron ore climbed to nearly USD 140 a ton
earlier this month a four-month high Prices have since eased a bit to USD 13430 a ton but
remain well above the consensus forecasts of analysts at the start of this year
Coal miners could scale back production but that isnt always easy to do In Australia many miners
are locked into so-called take or pay contracts with rail and port operators Many analysts dont
expect coking-coal prices to rebound for at least another 12 months RBC Capital Markets expects
coking-coal prices to average USD 154 a ton in 2014 down from USD 159 a ton forecast for this
year Instead they see more chance that iron-ore prices will come down more sharply RBC predicts
an 11 percent fall in iron-ore prices next year as new supply from Anglo Americans Minas Rio
project and mines owned by Fortescue Metals Group Ltd is added to the market UBS is even more
bearish predicting iron ore will fall below USD100 in the second half of 2014
Source Wall Street Journal
ARE COMMODITIES TRADERS bdquoTOO BIG TO FAIL‟
When the banking industrylsquos top lobby group commissioned a report by on commodity trading
houses the idea was to show trading houses like Glencore Xstrata Vitol or Cargill were ―too big to
fail and therefore needed to be regulated in a similar manner to the banks
But instead of highlighting the inherent issues surrounding the industry the report found trading
companies posed less systemic risk than the big banks As a result the Global Financial Markets
Association which commissioned the report decided not to finalize or publish it (The GFMA claims
that it often commissions reports which are shared with regulators and other interested parties but
never published) But the debate hasnlsquot ended
A separate report published in July by the Centre for European Policy Studies a think-tank argued
the growth of commodity trading houses which underpin the global trade in raw materials could
―have systemic implications Commodities trader Trafigura has become the latest to wade into the
debate In its recent prospectus for a EUR 500 million bond issue the worldlsquos second largest metals
trader and third biggest oil trader addresses the GFMA report as well as the issue of systemic risk
Making some tart observations the trading house says the GFMA paper was aimed squarely at the
Financial Stability Board a group of global regulators
―[The report] was widely seen as a tactic by some banks active in the commodity trading space as a
way of creating more equality between market participants by seeking to usher in further
restrictions on pure commodity trading companies the prospectus says
Commodity traders are facing the need to be more open about their operations and lift the veil of
secrecy Indeed the author of the GFMA reportmdashCraig Pirrong a widely respected academicmdashis
working on a white paper on commodities traders Commissioned by Trafigura it will look at what
commodities trading houses activities and the recent trend to accumulate more assets risk
management as well as looking at different types of commodity companies
Source Financial Times
SMOG DARKENS SHANGHAIS PROSPECTS FOR BECOMING A GLOBAL FINANCIAL CENTER
In the debate over which matters more in China money or quality of life the quality-of-life side
may have found the ultimate argument If you cant breathe nothing else really matters And itlsquos a
debate Mongolia has to have as it makes its own steps towards industrial and economic growth
Chinas pollution problem is spreading and growing worse a fact on stark display last week in
Shanghai the countrys financial center A stretch of filthy-air days in that coastal city so
thoroughly shocked residentsmdashwho had largely escaped the smog that has long plagued the likes of
Beijing and Harbinmdashthat it inspired fresh talk about getting away from China Lawrence Shu a
Shanghai-based partner at Hylands Law Firm said he and his friends are thinking more seriously
about moving abroad
The smog had a big impact because it feels really bad if you cant breathe freely he said
The environment used to take a back seat among the Chinese But as they get richer they are
traveling abroad more making the pollution back home more obvious The Internet also
contributes Blue-sky pictures posted on social networks by Chinese travelers abroad constantly
remind folks of what is lacking at home and Chinese now use various apps to track air-quality data
If Shanghais smog discourages smart financial professionals from wanting to live there that will
hinder Chinas effort to create a global financial center If businesses such as financial companies
and luxury-goods makers perceive that Chinas elites are spending more time outside their home
country they will be less willing to invest in China
Most rich Chinese havent packed their bags and left yet but they are keeping their options open
Relocation is a big decision said Anne Wang who works in the financial industry in Shanghai But
just in case she recently received a US visa that would allow her to live there
Source Wall Street Journal
POLITICS
MINERALS POLICY ENTERS FINAL DISCUSSIONS
The government published a final draft of Mongolialsquos State Policy on the Minerals Sector for 2013
through 2025
The document was first presented to Parliament in July and is now entering final discussions during
the autumn plenary session of Parliament following a 42 percent drop of foreign investment and 23
percent fall in the currency year-on-year
―We have reviewed the proposed State Policy on the Mineral Sector which we feel will be a
positive step forward if passed said the Source ―The passing of this policy will result in more
transparency and an increasing participation from foreign investors That said it will take time for
these feats to be accomplished Investors will be weary of Government promises as they seek
longevity to prove Government intentions
The proposed policy is divided into four main sections rationale principles main policy and
implementation-results The major points stressed in the policy include transparency and
responsible mining The law sends the message that growth is going to be driven by private sector
participation and the intent to provide a stable investment environment technological innovation
and value-added activities
Key priorities of the law since it was first unveiled include stability of taxation and the legal
environment an end to any discrimination between foreign and national investors and the
preservation of strategic resources and deposits
This most recent version saw the inclusion of a new section supporting development of local areas
and the interests of local citizens Other key elements include explorationmdashwhich would see
greater government regulation for strategic mineral deposits while cutting down bureaucracy and
conducting scientific researchmdashproduction support and local support The new document also
highlights greater support for non-governmental organizations for the environment allowing them
to claim damages from mining operations the establishment of funds to support economic
diversification environmental protections and land rehabilitation
The new draft has removed the risk assessment section and replaced it with a section on
implementation This includes the improvement of the legal environment and producing of relevant
regulations programs and projects for 2013 to 2015 followed by the implementation of programs
and projects from 2014 to 2025 and finally the provision of conclusions on midterm policy
implementation and further planning for up to 2020 and 2025
―We believe that this policy will take us one step closer to attracting investors and supporting
private sector development in Mongolia said the Source ―Despite current investor hesitation this
state policy in addition to the new amended Minerals Law set to pass next year will further
encourage investors to enter the market and will build support for the junior mining community
Source Mongolian Investment Banking Group
PARLIAMENT UNANIMOUSLY BACKS ldquoSMART GOVERNMENTrdquo INITIATIVE
Parliament has unanimously backed President Tsakhia Elbegdorjs ―From Big Government to Smart
Government initiative for government reform concepts having signed a joint statement of support
on 13 December
The joint statement gives full support to the presidents initiative and commits to cooperation for
its undertaking This includes support for enhancing government systems and policies in line with
democracy and a market economy improving the capacities of public services and curtailing
government intervention into private business affairs Also included are protections to private
business including establishing government structures for rule of law support to domestic
industries and honoring contracts The fight against corruption is another main perogative
On 16 November 16 the Office of the President of Mongolia organized a national consultative
meeting on this topic at the Government Palace Elbegdorj next met with members of the
Parliament on 9 December to organize an open dialogue with representatives of Parliament for an
appeal for them to sign the joint statement Reaffirming the commitment of the Mongolian
lawmakers to a breakthrough reform of the Government the leaders of party floors and factions in
the Parliament and independent members of the Parliament signed the document for the reform on
December 13 2013
Source Montsame
GOVERNMENT CALLS TO END PRACTICE OF APPOINTING MPS AS MINISTERS
The coalition government has thrown their support behind President Tsakhia Elbegdorjs proposal to
prohibit Parliament members from serving as cabinet ministers
Democratic Party members discussed a draft resolution and proposed amendments submitted by the
president for the new restriction at a party meeting on Monday The draft amendments were
unanimously backed by the faction The Justice Coalition which includes the Monglian Peoples
Revolutionary Party and Mongolian Democratic Party came to the same conclusion following its own
meeting said coalition head N Battsereg on Monday
Source Montsame
COMMITTEE LEADERS TO BE ELECTED THIS MONTH
The coalition government will soon be electing officials to lead the various committees in
government
Parliament has 8 standing committees to elect leaders to this month with each committee to be
led by a representative of the coalition government Current committee heads are Ts Tsolmon at
the Security and Foreign Policy Committee G Bayarsaikhan at the Environment Food and
Agriculture Committee Z Bayanselenge at the Social Policy Education Culture and Science
Committee R Burmaa at the Petition and Requests Committee A Bakei at the State Structural
Committee Ts Davaasuren at the Budget Committee Sh Tuvdendorj at the Legislation
Committee and B Garamgaibaatar at the Economic Committee
Source Zuunii Medee
FOREIGN CURRENCY PAYMENTS BANNED FOR MININGEXPLORATION LICENSING FEES
The Ministry of Finance has banned the use of foreign currencies to pay for mining and exploration
licensing fees to the Mineral Resources Authority beginning 1 January 2014
The Ministry of Finance has prompted these entities and companies holding licenses to comply with
Mongolian currency law that states that all businesses and agencies must do business in Mongolian
tugrug According to the 2009 law transactions must not be carried out in foreign denominated or
foreign currency based rates
Source Newsmn
MINING MINISTRY TO COOPERATE WITH ASSOCIATION OF FLUORSPAR EXPLORERS
The Ministry of Mining Wednesday established a memorandum of mutual understanding with the
Association of Fluorspar Explorers (AFE) to cooperate in augmenting the countrylsquos export
In addition to expanding export goals include developing transparent and responsible mining
improving qualities and standards of fluorspar metallurgy and flotation concentrate and in
increasing the production output of the minerallsquos ore enrichment The hope is the memorandum
will create a launching point for a national program for fluorspar its exploitation increase the
volume of production by intensifying research and increase competitiveness in international
markets It will also be necessary to introduce the latest technology to the country along with
running joint trainings with foreign NGOs the Ministry said
Source Montsame
DP REJECTS AMARJARGAL‟S RESIGNATION
Parliament voted against MP R Amarjargallsquos resignation request on 12 December
During Tuesdaylsquos meeting the majority of the Standing Committee on State Structure voted against
Amarjargal`s resignation The head of the Democratic Party (DP) caucus D Erdenebat took a
strong stance against letting Amarjargal leave
Amarjargal said he wanted to resign to take responsibility on behalf of his party members for the
current political situation and economic restraints in Mongolia DP members agree with his
conclusion but encourage him to make the effort and participate for social change and
development Members of the opposition Mongolian Peoplelsquos Party members said that Amarjargal
could see the problems and nature of the majority of Parliament and praised his plan to resign
Source Newsmn
MPP HEAD TO STEP DOWN
Mongolian People Party (MPP) Head N Enkhbold has requested his resignation as party leader
MPP Deputy Head D Oyunkhorol said 9 December that Enkhbold submitted his request to step down
during a party meeting Oyunkhorol said Enkhboldlsquos resignation was due to personal reasons The
new party head will be appointed by the MPPs governing board
Source Udriin Sonin
FIFTH ROUND OF NEGOTIATIONS FOR THE JAPAN-MONGOLIA ECONOMIC PARTNERSHIP
AGREEMENT
The fifth round of the negotiations for the Japan-Mongolia Economic Partnership Agreement (EPA)
will be held from 16 to 19 December in Ulaanbaatar
The Japanese delegation will be led by Jun Yokota ambassador in charge of economic diplomacy
and the Mongolian delegation will be led by Ochirbat Chuluunbat vice minister for economic
development Experts from relevant ministries and agencies of both sides will participate in the
meetings
In this round negotiations are in areas including trade in goods and investment
Source 4-Traderscom
FIRST MONGOLIA-CHINA JOINT BORDER COMMISSION MEETING IN BEIJING
The very first meeting of Mongolia-China joint commission of borders took place 11 and 12
December in Beijing China
This meeting was co-chaired by T Togsbilguun a director of the Department of Neighbour
Countries of Mongolialsquos Ministry of Foreign Affairs and by Xiao Jiangguo a representative of border
checkpoint and seaport affairs Both sides shared on ideas for implementation of the
intergovernmental contract on the border regime and reached some agreements on conducting a
joint examination in the border signs and on activating the collaboration in law enforcement around
frontier areas After this they discussed issues of developing border checkpoints at a same level
putting some border checkpoints into a permanent regime giving an international status to four
checkpoints
The gathered also made a protocol on their meeting and inked its results The next meeting will run
in 2014 in Ulaanbaatar
Source Montsame
BELARUS TO OPEN EMBASSY IN MONGOLIA IN 2014
Belarus will open its embassy in Mongolia in 2014 reads a resolution from the Belarus Council of
Ministers of the Republic of Belarus from 12 December 2013 Belaruslsquo Finance Ministry will finance
the costs of opening and maintaining Belarusian Embassy in Mongolia from the funds set aside in its
national budget for the opening and maintenance of diplomatic missions and consular missions of
the Republic of Belarus abroad
Source Belarusian Telegraph Agency
HOWELL NEW JERSEY USA BECOMES SISTER CITY OF SUKHBAATAR DISTRICT
The Howell Township and the Sukhbaatar district in Mongolia signed a memorandum of
understanding to create sister citieslsquo between Howell New Jersey USA and the Sukhbaatar District
on Tuesday
The program was aimed at opening up talks on how each can benefit from one another Mayor
William Gatto said Howell Township is a very diverse city and theyve taken the relationship with
the Kalmyk community here in Howell and expanded it to a country where they have had no
relationship in the past he said
The sister citieslsquo program will allow both Mongolia and Howell to exchange ideas and come up
with new and better ways to do things that benefits both cultures Outside of Mongolia Howell has
the largest population of Kalmyks in the world with many living in the Freewood Acres section of
the township Gatto said
Some of the goals of the agreement include promoting a common prosperity and development for
both parties an electronic pen-pal program and education opportunities for exchange students
Through a translator Baljinnyam Gan-erdene of the Citizens Representatives Council of Sukhbaatar
District said he came to Howell to see how democracy works in the United States
Im really glad and hope that this unforgettable and successful visit opens the door to our
friendship and prosperity between our residents Gan-erdene said
Gatto gave Gan-erdene a Howell flag and a throw blanket created by the Historical Society
depicting the history of the township Gan-erdene also gave Gatto several items including a bronze
piece of art
Source NJcom
MONGOLIAN CALLIGRAPHY ADDED TO UNESCO CULTURAL HERITAGE LIST
State Parties at the 8th Session of the Intergovernmental Committee for the Safeguarding of the
Intangible Cultural Heritage in Azerbaijan unanimously agreed to register Mongolian calligraphy as
an intangible cultural heritage in need of urgent safeguarding on 2 December
―Mongolian heritage calligraphy is now being recognized by the world and I am grateful on behalf
of my country for decision makers said Secretary-General of Mongolian National Commission for
UNESCO Gundegmaa Jargalsaikhan He noted that Mongolian calligraphy was the fifth cultural
heritage item of Mongolia to be listed and now stands among the Mongolian epic traditional folk
dance the traditional music Tsuur and a circular breathing technique
Mongolian calligraphy is a 1000-year-old writing system that vertically connects continuous strokes
together to create a word Letters of Mongolian script have been created and taught by nomads
from generation to generation During the 1937-1940 purges of the Soviet era thousands of tutors
and traditional scholars of the script were killed Those who remained alive were banned from
mentoring the younger generation Soon after that or around 1946 a new Cyrillic script was
adopted as the only eligible script therefore banning all the teachings of old Mongolian script and
Latin lettering Only in the 1970s was the old Mongolian script re-introduced to scholars allowing a
limited number of classes in universities
After the 1990 democratic changes along with the revival of Mongolian identity interest in
traditional calligraphy reawakened As a sign of such revival the very first non-communist political
organization the Democratic Union of Mongolia used folded calligraphy as its main logo
Source Info Mongolia
THOUGH IMPROVING MONGOLIA STILL REELING UNDER CORRUPTION
The third joint survey by the Asia Foundation and Sant Maral Foundation to gather data on the
perception of corruption in Mongolia revealed that efforts to curb corruption in what is considered
as one of the worldlsquos most corrupt countries could be having impact
The survey shows a significant drop in the percentage of respondents who believe corruption has
increased in the last three years from 389 percent in November 2012 to 183 percent currently In
contrast in 2006 a majority of respondents (63) indicated that corruption has increased ―a lot in
the last three years The survey also shows that corruption has declined in importance as a critical
social problem since 2006 Despite these positive signs overall respondents indicated that
corruption remains a serious issue in some specific key areas
Conducted in September of this year the survey featured face-to-face interviews in 1360
households across Mongolia including seven districts in Ulaanbaatar and 21 counties in six
provinces A majority (766) cited that widespread corruption in the law enforcement agencies is
one of the main reasons the government has been unable to tackle corruption effectively When
corruption is perceived to be this widespread the attention will obviously turn to the performance
of the apex anti-corruption body the Independent Authority Against Corruption (IAAC) The survey
shows that the IAAC is slowly but surely beginning to gain confidence among citizens The
percentage of those surveyed who think that its performance is ―good or ―very good increased
from 78 percent in March 2010 to 203 percent in March 2013 In September 2013 the result shows
a new high of 294 percent
Peoplelsquos perceptions on corruption are often shaped by personal experiences Although very few
respondents in the survey said that they had actually paid a bribe themselves (8 percent about a 3
percent drop from 2012 and an 18 percent drop since 2006) as noted before many are not willing
to report instances where they are asked for one Similarly 36 percent of respondents said they
would not pay a bribe but 26 percent indicated that they would pay if they had the financial
capability
Basanta Pokharel is The Asia Foundation‟s chief of party for the STAGE program in Mongolia He
can be reached at basantapokharelasiafoundationorg The views and opinions expressed here
are those of the individual author and not those of The Asia Foundation
Source Asia Foundation
MPP DEMANDS DISMISSAL OF MINISTERS
Mongolian Peoplelsquos Party Chairman N Enkhbold and party head S Byambatsogt submitted to the
Speaker a request for the dismissal Minister of Finance Chultem Ulaan and of Economic
Development Minister Nyamjav ―Fortuna Batbayar
Our faction believes that these ministers must be held responsible for the worsening of the
national economic situation We also intend to do the same with other ministers after hearing
opinions of people said Byambatsogt
Source Montsame
FORMER TAVAN TOLGOI JSC DIRECTOR ARRESTED
The Independent Agency Against Corruption arrested former Tavan Tolgoi JSC director Kh
Tumenbayar for undisclosed reasons
An unnamed official source suggested that the arrest may be related to abuses of power and
payments to political parties as well as the construction of a high-class hotel in Dalanzadgad Soum
Umnugobi Aimag Kh Tumenbayar is a member of the Democratic Party a member of Parliament
and is an associate of ―Ajnai Bat-Erdene the Minister of Defense who helped Tumenbayar attain
position as the director of Tavan Tolgoi for 6 years and rise to head of the Umnugobi Aimag Citizens
Council
Tumenbayar voluntarily resigned from his position at Tavan Tolgoi last month The IAAC has
reportedly not given details to the reasons for the investigation opened on Tumenbayar because of
possible connections to high-ranking officials
Source Unuudur
MONGOLIA TURKMENISTAN JOIN INTERNATIONAL RACING FEDERATION
The International Federation of Horseracing Authorities (IFHA) has welcomed racing organizations
from Mongolia and Turkmenistan as affiliate members
Recent ratification to IFHA statutes at its annual General Assembly in October created a new
affiliate membership category within the Federation Thus the Federation of Mongolia Horse Racing
Sport and Trainers and the Turkmen Atlary State Association by unanimous vote of the IFHA
Executive Council in Paris in October have become the IFHAlsquos first two affiliate members
The Federation of Mongolian Horse Racing Sport and Trainers (FMHRST) is a non-governmental
organization (NGO) which serves to the development of equestrian sport in Mongolia and works to
protect the rights of horsemen who specialize in this national sport The new affiliates were
announced by IFHA Chairman Louis Romanet this week and several key appointments to IFHA
executive office positions and committees have also been made
Source Horse Talk
MONGOL TV HEAD MEDIA CAN HELP FIX THE BIG PROBLEMS
Nomin Chinbat head of Mongol TV has grander intentions than just ridding the countrys television
business of rampant pirated content and unlicensed formats The young executive wants to help
clean up Mongolian politics and the nation by creating a free and open media
―The networks are used as propaganda channels for politicians They are used very effectively every
four years at election time says Chinbat whom the Source named one of the 25 Most Powerful
Women in Global TV at MIPCOM 2013
―There are laws against piracy but they arenlsquot implemented explains Chinbat who says that
politicians in the country of roughly three million wonlsquot challenge journalists because their
relationships with them are too cozy
Mongol TV has invested in original programming licenses all of its imported content and runs
investigative journalism features highlighting social problems such as alcoholism and corruption
The company is organizing a Mongol TV Day for February 2014 to which it has invited major
international studios to raise awareness of the issues and introduce the global industry to
Mongolia Britainlsquos ITV and Americalsquos CBS are already confirmed and negotiations are ongoing with
other attendees The situation has improved in recent years with some channels having become
what Chinbat calls ―hybrids which license some sports rights but then steal others and copy
formats
―These days some of these channels might license 25 episodes of a format and make 50 But this is
actually progress says Chinbat
Chinbat and her team were at the Asian Television Forum (ATF) in Singapore looking for new
formats that can be produced within the constraints of Mongolian television budgets However with
Mongolias young populationmdash65 percent of the country is under 35 years oldmdashmobile viewing is on
the rise and the network is already working second-screen utilization and new media applications
This demographic sweet spot should guarantee strong growth in the population economy and
nascent entertainment sector in Mongolia in the coming decades
Source Hollywood Reporter
ANNOUNCEMENTS
ldquoMM TODAYrdquo ON MNB-TV FRIDAY 1900 TO 1910
BCM is pleased to announce that Mongolian National Broadcasting continues its cooperation with
BCM on ―MM Today This English news program is aired every Friday for 10 minutes and is
scheduled from 1900 to 1910 tonight Tune in to watch this program that reports stories from
todaylsquos BCM NewsWire
BCM WEBSITES
MONGOLIAN WEBSITE bdquoPRESENTATIONS‟ AND bdquoNEWS‟ SECTIONS
The Presentationslsquo section on BCMlsquos Mongolian website can be reached via bcmmnitgeluud
As a key component of BCMlsquos Mongolian website articles from the Newslsquo section and the
government website Open-Governmentmn are regularly updated
S Oyun Minister of Environment and Green Development presentation at BCM monthly meeting on
May 27 added to Mongolian website bcmongoliaorgmnилтгэлүүд
- Байгаль орчин ногоон хөгжлийн сайд СОюун Байгаль орчин ногоон хөгжлийн шинэчлэлийн
бодлого үйл ажиллагаа МБЗ-ийн сарын уулзалт 5 сарын 27 2013
___________________________________________
ENGLISH WEBSITE PRESENTATIONS MONGOLIA REPORTS bdquoINTERVIEWSbdquo MONGOLIAN
BUSINESS NEWS‟ bdquoPHOTO GALLERY‟
The following 13 presentations are from the Mongolia Investment Summit- 2013 in Hong Kong
November 18-20
- Regulatory Update Navigating Mongolialsquos legal framework for foreign direct investment
Javkhlanbaatar Sereeter Director General Foreign Investment Regulations and Registration
Department MINISTRY OF ECONOMIC DEVELOPMENT OF MONGOLIA
- Investment keynote Investing into Mongolia in 2013 ndash Where do the opportunities lie James
Passin Co-Founder and Manager FIREBIRD MONGOLIA FUND
- Development keynote Key challenges and opportunities for continued growth in Mongolia
Randolph Koppa President TRADE AND DEVELOPMENT BANK OF MONGOLIA
- Outlining government policies and long-term plans for Mongolialsquos mining sector Amarjargal
Khurelbat Head of International Cooperation Division MINISTRY OF MINING OF MONGOLIA
- From copper to met coal Demand and price outlook and expected impact on Mongolialsquos economy
Ghee Peh Managing Director Metals and Mining Research UBS SECURITIES ASIA
- How Mongolian banks and financial institutions are dealing with the challenges and opportunities
of a fast growing economy Norihiko Kato Chief Executive Officer KHAN BANK
- Update on the Mongolian stock market ndash Impact of the new Securities Law Altai Khangai Chief
Executive Officer MONGOLIAN STOCK EXCHANGE
- From investment banking to trade finance to micro credits to insurance Amartuvshin Hanibal
Managing Director TENGER FINANCIAL GROUP LLC
- Spotlight presentations Showcasing Mongolian investment opportunities Peter Morrow Board
Director ASIA PACIFIC INVESTMENT PARTNERS
- Spotlight presentation Showcasing Mongolian investment opportunities Munkhbat Davaatseren
CEO of Golomt Securities GOLOMT BANK
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources
Batmunkh Batkhuu Chairman SHARYN GOL JSC
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources
Jimmie Wilde Chief Operating Officer BERKH UUL JSC
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources Mona
Forster Executive VP ENTREacuteE GOLD INC
The following two presentations are from the ―ANTI-CORRUPTION LEGISLATIONPOLICY
INTERNATIONAL BEST PRACTICE ON TRANSPARENCY training seminar for businesses in
Ulaanbaatar November 18 2013
-―International business standard on transparency by Jelena Pesic Director PwC
-―Finlandlsquos best practice on transparency and anti corruption by Dr Pekka Hallberg (as it is
worldlsquos number one) Emeritus President of the Supreme Administrative Court of Finland
The following 15 presentations are from the Mongolia Mining Summit Perth Australia October 29-
31 2013
bull Mongolialsquos Minerals Future and Development by Otgochuluu Ch Director General Department of
strategic policy and planning at Ministry of Mining Mongolia at the Mongolian Mining Summit 2013
Perth Australia Oct 29-31 2013
bull Mongolian Economy Investment OpportunitiesChallenges Jim Dwyer Executive Director
Business Council of Mongolia at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31
2013
bull Oyu Tolgoi Lessons from the Gobi Houston Spencer Vice President Communications and Media
Relations Oyu Tolgoi at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Market dynamics for Mongolian coking coal in the Chinese market Graeme Hancock President
and Chief Representative at Anglo American Mongolia at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Speech by Mr Ariunbold Byamba Deputy Director Erdenes MGL LLC at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull Launching Mining Projects in MongoliandashA Major Contractorlsquos Perspective Eric Erdenebat
Tseveendorj Country Manager Orica Limited at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Investing in a dynamic legislative environment Elisabeth Ellis Managing Partner Ulaanbaatar
Minter Ellison at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Sandvik In Pit Crushing amp Conveying (IPCC) Doug Turnbull Principal Mining Engineer Sandvik
Mining Systems at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Ovoot Coking Coal Project David Paull Managing Director Aspire Mining at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull The business of being a third neighbor David Landers General Manager East Asian Growth
Markets at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Nuurst Thermal Coal Project Daniel Rohr Chief Financial Officer Modun Resources Ltd at the
Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Culture matters in building sustainable long-term business relationships Hana Tserenkhand
Byambadash Business Development Consultant AusMon Consulting and Dr Christine Hogan Adjunct
Professor Curtin University Consultant amp Author at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Maximizing Business Benefits from Your IT Investment Brad Skeggs Executive Director COSOL at
the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Presentation by Battsengel Gotov CEO Mongolian Mining Corporation at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull Mongolian Mining Sector Present and Future Developments NAlgaa Executive Director
Mongolian National Mining Association at the Mongolian Mining Summit 2013 Perth Australia Oct
29-31 2013
The ―Mongolia Reports section includes the following
- ―Ministry of Finance of Mongolia 2013 Government Debt Auctions by Bank of Mongolia
- ―Doing Business in Mongolia 2013 Country Commercial Guide for US Companies by US
Embassy
- ―Real Estate Report 2013 by Mongolian Properties
- ―Selected Macroeconomic Indicators November 20 2013 by International Monetary Fund
- ―2013 Second Annual Mongolian CEO Survey from PricewaterhouseCoopers Audit LLC
- ―Selected Macroeconomic Indicators data through October 16 2013 by International Monetary
Fund
- ―IMF Completes 2013 Article IV Mission to Mongolia by International Monetary Fund
The following are added to Interview Section from the Oxford Business Group Mongolia Reports
2013 book
bull B Byambasaikhan Chairman Business Council of Mongolia ―Talk is cheap
bull President Ts Elbegdorj ―Diversifying for growth
bull Jim Dwyer Executive Director Business Council of Mongolia ―Non-mining sectors budding
bull Peter Morrow Chairman American University of Mongolia ―Filling in the blanks
bull N Zoljargal Governor Bank of Mongolia ―Sustainable vision
bull Gansukh Minister of Roads and Transportation ―Accessing new markets
bull J Od President MCS Group ―Building interest
bull B Chuluunbaatar President and CEO of Monnis Group ―Climbing the ranks
bull Cameron McRae President and CEO Oyu Tolgoi ―Sitting on a copper mine
BCMs English website includes the ―Mongolia Business News section where the Open Letter to
Parliament and Government is available for download
BCM continuously posts news stories and analysis of relevance to Mongolia at Mongolian Business
News before they are all put together each week for Fridays weekly NewsWire
The ―Photo Gallery contains photos from the 6th Anniversary BCM Renewal dinner on November
11 2013
BCM Football Cup 2013 pictures are posted to the website - httpbcmongoliaorgenphotos350-
enalbumalbumid=200
The BCM NewsWire will continue to be issued each Friday incorporating items already on the home
page for a consolidated account of the weeklsquos events
SOCIAL NETWORK WITH BCM
BCM LAUNCHES NEW LINKED-IN COMPANY PAGE
The Business Council of Mongolia has launched a new company page on the social networking
website LinkedIn to network its members and followers including small-medium enterprises (SMEs)
The new page will allow BCM to alert followers to the latest news and information critical to their
businesses Memberslsquo businesses will be promoted Additionally BCM plans to deliver monthly
infographics on the latest data as well as videos and other media content as they come The bulk of
the content on the new page will be in Mongolian language to better cater to BCMs Mongolian-
speaking audience and members The following link can direct you to the New BCMs Linked-in page
httpwwwlinkedincomcompanybusiness-council-of-mongoliatrk=company_logo
The Business Council of Mongolia (BCM) has expanded its reach to your favorite social networks
Keep up to date on the latest business deals in Mongolia and how the climate for investment is
improving each day with BCM
Add BCM on Facebook at httpswwwfacebookcomTheBusinessCouncilOfMongolia to read the
latest announcements and comment on events carried in the NewsWire with the community
Hear breaking news and announcements as they happen when you follow BCM on Twitter at
httpstwittercombcmongolia
We have now 2482 fans on our Facebook fans page 1527 connections on LinkedIn network and
835 followers on Twitter
Of course for news information interviews event photos and announcements regarding our
organization visit the official BCM website at httpbcmongoliaorgen
ECONOMIC INDICATORS
INFLATION
Year 2006 60 [source National Statistical Office of Mongolia (NSOM)]
Year 2007 151 [source NSOM]
Year 2008 221 [source NSOM]
Year 2009 42 [source NSOM]
Year 2010 130 [source NSOM]
Year 2011 102 [source NSOM]
November 30 2013 120 [source NSOM]
Year-over-year (y-o-y) nationwide
Note 111 y-o-y Ulaanbaatar city November 30 2013
CENTRAL BANK POLICY LOAN RATE
December 31 2008 975 [source IMF]
March 11 2009 1400 [source IMF]
May 12 2009 1275 [source IMF]
June 12 2009 1150 [source IMF]
September 30 2009 1000 [source IMF]
May 12 2010 1100 [source IMF]
April 28 2011 1150 [source IMF]
August 25 2011 1175 [source IMF]
October 25 2011 1225 [source IMF]
March 19 2012 1275 [source Mongol Bank]
April 18 2012 1325 [source Mongol Bank]
January 25 2013 1250 [source Mongol Bank]
April 8 2013 1150 [source Mongol Bank]
June 25 2013 1050 [source Mongol Bank]
CURRENCY RATES ndash DECEMBER 19 2013
Currency Name Currency Rate
US dollar USD 164138
Euro EUR 224680
Japanese yen JPY 1579
British pound GBP 268874
Hong Kong dollar HKD 21170
Chinese Yuan CNY 27031
Russian Ruble RUB 4981
South Korean won KRW 155
Disclaimer Except for reporting on BCMlsquos activities all information in the BCM NewsWire is
selected from various news sources Opinions are those of the respective news sources
statement assurance services from independent position to legal entities and business owners in line
with the Law of Mongolian Auditing Law of Mongolian Accounting and other International Auditing
and Financial statement preparation standards using with professional ethics of auditors
4 Fluor is one of the worldlsquos leading publicly-traded engineering procurement construction
maintenance and project management companies It was ranked No 1 on Fortune magazinelsquos
―Engineering Construction industry list of Americalsquos largest corporations and 1 in the same
category on Fortunelsquos annual survey of ―Worldlsquos Most Admired Companies
It operates over 1000 projects annually serving more than 600 clients in 79 different countries
with 41000 employees executing projects globally It has offices in 29 countries on six continents
and in 2012 celebrated 100 years of exceeding client expectations
5 Khaan Insurance LLC is a national investor-owned insurance company in Mongolia
Khaan Insurance was formed in 2012 to write insurance throughout the Mongolia It has 18 active
branches and was listed in the top 10 entities in terms of equitymdashall in just a year since its
establishment Khaan Insurances reinsurance partners are globally accredited companies
Its core businesses are property casualty and liability insurance
6 NovaTerra advises entrepreneurs large corporations governments financial institutions and
private equity firms Its approach is to be deeply involved with clients in long-term relationships
NovaTerra can invest alongside its clients and further invest part of its success fees into deals or
companies NovaTerra has a proven record in negotiating and closing projects and agreements with
the Mongolian Government
7 Outotec Oyj provides customers with technology solutions and services that support the entire
life cycle of operations Outotec tailors solutions to customerslsquo needs to ensure that they receive
the smartest value from virtually all types of ore while making the least impact on the
environment In addition its global sales and service network guarantees that there is always an
experienced Outotec professional on hand for support
Outotec Mongolia LLC was officially formed in Mongolia from January 2013 It now cooperates with
Erdenet Mining Co Oyu Tolgoi LLC Energy Resources LLC and Boroo Gold
J Bayarmagnai executive director of the Quality Supplier Development Center (a USAID grantee)
spoke first on his organization and its missions to increase the productivity and competitiveness of
small- and medium-size enterprises He said the center acts by intervening to facilitate in
relationships between buyers and suppliers and that its impact can be determined by looking at
added sales as indicators They also look to remove bottle necks that producers face in meeting the
needs of buyers
―This is very exciting because I believe it can bring real quality and value to business said
Bayarmagnai
One example offered was the centers experience with Wagner Asia Equipment LLC which required
a local company able to repair or salvage parts back to specifications The center sought out a
company and found Geomach which assisted in removing bottlenecks such as attaining financing
for a welding machine
―Basically we have no limit he said ―We can help SMEs deliver quality products and services to
buyers
L Sumati director of the Sant Maral Foundation spoke next to discuss progress made in Mongolias
battle against corruption He said it was impossible to deny all the progress made given all the
positive responses in his latest poll which surveyed 1200 people in the business community about
corruption
Sant Maral found that land access to be a leading challenge for businesses in Mongolia leading the
list of grievances since 2006 Other issues included mining licensing customs and regulations
Respondents said the most difficult agencies to work with were the Tax Office Special Inspection
Agency Customs and local authorities ―There may be some optimal time for development for the
future but for today it remains difficult he said
Meanwhile at the household level people reported dramatically less experiences with corruption
with the number of responders who said they had paid bribes falling from a high of 28 percent in
2007 to 8 percent this year He said there were generally positive feelings about the Independent
Agency Against Corruption and the arrests they had made too
D Jigjidmaa investment promotion program manager at the World Banks International Finance
Corp in Mongolia gave the final presentation on investment protections
―Mongolia is not so different from other developing countries especially regarding the political risks
of the last four to five years said Jigjidmaa
She said IFC had been engaged with the Mongolian government since March 2013 to collaborate on
the Investment Law that took effect in November It has also signed a cooperative agreement with
the Ministry of Economic Development to help improve the investment environment This includes
the establishment of a reference guide for complaints made by investors and how government
responded They hope to work closely with the government to improve grievance management and
dispute resolution
―Now were fine-tuning how the mechanism will work Every minister wants control over
investments in the sectors they oversee
The plan she said is to work from January 2014 to the following July to build awareness and a
stakeholder network Afterward they will then benchmark international experiences such as the
improvements made to South Koreas investment environment since 2009 to help direct the
evolution of Mongolias dispute resolution mechanism
BUSINESS
OYU TOLGOI APPROVES 2014 BUDGET
The Oyu Tolgoi LLC board of directors unanimously approved the company program plan and
budget for 2014 The decision was taken at the quarterly board meeting held in Ulaanbaatar from
11 to 12 December
―Itlsquos great to have unanimous board support for the projectlsquos coming year said Craig Kinnell
president and chief executive officer of Oyu Tolgoi ―This is a sign of confidence in the entire
8000-strong Oyu Tolgoi team After safely ramping up production this year welsquore now looking
forward to our first full year of exporting business
Source Turquoise Hill Resources Ltd
OT MINE‟S bdquoPHASE TWO‟ BANK FINANCING PLEDGES EXTENDED
Turquoise Hill Resources Ltd said on Monday that parent Rio Tinto PLC had secured extended
commitments from the banks that have agreed to finance the underground expansion of the Oyu
Tolgoi copper and gold mine The extension to March 31 gives Rio Tinto more time to resolve a
dispute over costs with the government of Mongolia Rio which owns 508 percent of Turquoise Hill
and operates Oyu Tolgoi put the mines more than USD 5 billion expansion on hold in July saying
the Mongolian government wanted parliament to approve the projects financing Mongolia which
will not see its share of Oyu Tolgois profit until Turquoise Hill recovers its costs has complained
that total costs on the first phase were USD 2 billion higher than planned It wants assurances such
overruns will not happen again and hopes to resolve the dispute by early 2014 a government
source told Reuters last month Turquoise Hill which owns 66 percent of Oyu Tolgoi had said in
June that financing commitments would expire Dec 12 The Vancouver-based company announced
a rights offering to raise up to USD 24 billion in November citing the delays at Oyu Tolgoi A
feasibility study for the underground expansion is still on track for the first half of 2014 the
company said on Monday It also confirmed that it expects Oyu Tolgoi to produce 150000 to
175000 tons of copper in concentrates and 700000 to 750000 ounces of gold in concentrates in
2014
Source Reuters
TRAFIGURA AGREES TO OFF-TAKE DEAL FOR OYU TOLGOI MINE
Commodity trader Trafigura has agreed to provide financing for the massive Oyu Tolgoi mine in
exchange for a long-term deal to buy an undisclosed portion of the output it said on Monday
Trafigura which markets a wide range of metals including copper concentrate referred to the off-
take deal in its first fully public annual report since being set up 20 years ago We also provide
finance in exchange for long-term supplies For instance we recently signed an off-take agreement
with Oyu Tolgoi in Mongolia it said giving no further details
Rio Tinto put the mines USD 5 billion expansion on hold in July saying the Mongolian government
wanted Parliament to approve the projects financing Mongolia hoped to resolve the dispute by
early 2014 a government source told Reuters last month Fifteen banks that have agreed to finance
the expansion have told Rio they will extend their commitments which were due to expire at the
end of the year until next March a statement said on Monday Trafigura also said the global copper
market is expected to be broadly in balance next year as low inventories and a recovery in global
growth offset stronger mine output
We dont expect prices to rise markedly but on the other hand with concentrates trading at close
to cost levels for some producing areas a collapse in prices is also unlikely the Trafigura report
said
The benchmark copper price on the London Metal Exchange has shed 83 percent this year weighed
down by more output from new mines such as Oyu Tolgoi and improved operations at many existing
mines The global copper market is expected to widen its surplus next year to 328000 tons from
182000 tons this year analysts polled by Reuters said in October
Source Reuters
OYU TOLGOI TO COOPERATE IN TAVAN TOLGOI POWER PLANT PROJECT
Oyu Tolgoi LLCs board of directors agreed to participate in the Tavan Tolgoi power plant project
following a series of meeting held from 11 to 13 December
The board discussed issues that remain under dispute at the meeting before giving approval of the
2014 budget After the meeting board members announced their plan to cooperate in the Tavan
Tolgoi power plant project Issues regarding involvement and the volume of investment are
expected to be discussed early next year Also discussed was the issue of the underground mine of
Oyu Tolgoi but the board did not come to any conclusion on the matter Both Mongolian and
foreign board members agreed to grant a loan to resolve the funding issue but did not set on a date
of when the loan could be received
Source Montsame
ERDENES TT UNLIKELY TO PAY $160M DEBT TO CHALCO IN 2013 SAYS CEO
Erdenes Tavan Tolgoi LLC will not likely meet its target for paying off debt owed to Aluminum Corp
of China Ltd (Chalco) by the end of this year its chief executive told newspaper Uls Turiin Toim
―To date we have paid off about 60 percent of total debt and the remaining amount is about USD
160 million out of USD 350 million said Erdenes Tavan Tolgoi Chief Executive Officer Yachil
Batsuuri
The state owned coal miner will sell 600000 tons of coal on top of the one million tons of coal
already sold for a net profit of USD 70 million to USD 80 million Batsuuri said A six-month halt in
shipments was the primary factor for delayed payment of total debt owed he said Although
production at Tavan Tolgoi was on target he said the transportation issues prevent it from making
the sales required to fully pay of its debt
―The coal being extracted from the East Tsankhi of the Tavan Tolgoi site is fully devoted to paying
off the Chalco debt of USD 350 million and therefore in order to work benefaction we have been
developing the West Block since July and started to export coal from September this year said
Batsuuri
He said Mongolia had successfully negotiated new terms for coal sales after months of selling its
coal reserves at a below-market rate The current deal is due to expire at the end of 2013 he said
He added that Erdenes Tavan Tolgoi plans to issue shares on international markets in 2015
Source Info Mongolia
RESERVES OF THE TAVAN TOLGOI JSC COAL DEPOSIT INCREASED TWOFOLD
A court ruling has allowed Tavan Tolgoi JSC to expand the size of its operating territory for an
added 70 million tons of reserves
Tavan Tolgoi JSC which operates upon the same coal deposit as Mongolian Mining Corp (MMC) and
Erdenes Tavan Tolgoi (Erdenes TT) saw its total reserves double with the expanded licensed area
Tavan Tolgoi has signed a memorandum of understanding with Chinas Shenhua Group to supply
coking coal for 20 years and will work in cooperation with Erdenes TT MMC and Shenhua for the
construction of a rail line to China
The rail line will connect the Mongolias Gashuun Sukhait port and the Gantsmod port of China
Source Unuudur
SHENHUA TO IMPORT 30-50M TONS OF COKE PER YEAR FROM MONGOLIA
Chinese coal producer Shenhua Group Corp Ltd will import 30 million to 50 million tons of coke
from Mongolia per year in the future
Zhang Guangjun deputy general manager with the Shenhua Science and Technology Research
Institute disclosed at a forum on 4 December that it would import 30 million to 50 million tons of
coke from Mongolia per year in the future Available data shows that the nation imported a total of
about 30 million tons of coke in the first half of this year and in line with industry observers the
import of Shenhua will deliver a strong impact on the domestic coke market
It has taken the group about a decade to gain the exploitation right of a Mongolia-based Tavan
Tolgoi coal mine Policy factors have been the strongest barrier from reaching that goal
Information from the China National Coal Association (CNCA) released on its website at the start of
November shows that it had signed a memorandum of understanding with three Mongolian firms
namely Erdenes Tavan Tolgoi LLC Energy Resources LLC and Tavan Tolgoi JSC on railway
construction cooperation and boosting coal trade And in line with some industry observers this is a
prelude to its success in gaining the exploitation right
Zhang reiterated that its failure to gain the exploitation right had a close tie with foreign
investment policies of Mongolian and so far the government had not even reached a conclusion
internally People in the circle said at the start of October that Mongolia released new policies for
foreign investments recently and according to the policies provided that a state-owned foreign
firm wanted to invest in industries including mining banking communications and news and media
in Mongolia Purchasing a stake exceeding 33 percent in any of these economic sectors by a foreign
state-owned entity requires a nod from concerned Mongolian authorities only at the ministerial
level And this might mean that the threshold for Chinese firms to invest in the Mongolian mining
industry would be lower
Source MENAFN
ERDENET MINING BRINGS MNT 370 BILLION TO STATE BUDGET
Erdenet Mining Co represents 30 percent of government revenues for industry contributing MNT
370 billion to the state budget in the year to December
According to the Erdenet Minings chief executive the amount of MNT 66 billion will go toward the
state by the years end Last year company represented 13 percent of income from taxes 10
percent of gross domestic product (GDP) and 20 percent of total export
Source Zuunii Medee
ASGAT SILVER DEPOSIT TO UNDERGO DEVELOPMENT
The board of Mongolialsquos 51 percent-owned joint venture with Russia Mongolrostsvetmet LLC decided
to begin development of the Asgat silver deposit
Asgat located in northwest Mongolia 1800 kilometers from Ulaanbaatar has a total average ore
reserve of 231 million tons and estimated 246 million ounces of silver The board agreed that the
project is economically viable now that a paved road leading to the development has been
complete The project is owned 51 percent by Erdenes MGL LLC and 49 percent by Russialsquos Rostec
The board agreed to the establishment of a working group to proceed with the next steps for
development
Source Business-Mongoliacom
MIAT TO HIRE FOREIGN-SKILLED MANAGEMENT
The Cabinet of Ministers decided on 14 December to hire a foreign-skilled executive management
team to operate state-owned MIAT Mongolian Airlines
The Cabinet hopes in hiring a foreign management it may produce greater profits increase its
competitiveness ensure greater flight safety and better prepare national staff The Cabinet
relayed orders to the State Property Committee and MIATs representative Council
Source Montsame
STANDARD BANK CONSULTANT DETAINED AMID DEBT DISPUTE
Mongolia has issued a travel ban on a New Zealand national consulting for Standard Bank Group Ltd
amid an escalation in a dispute with a local company over a debt repayment
Chris Bradley was part of a five-person team from Africalsquos biggest lender that visited Ulaanbaatar
last month to seek talks with the government over its USD 131 million in loans to Just Group LLC a
holding company said two people familiar with the matter The people asked not to be named
because they arenlsquot authorized to speak publicly Standard Bank alleges the loans are in default and
filed a lawsuit in July in a London court seeking repayment
Standardlsquos loans were made between 2007 and 2010 to Just Group to fund raw materials supplies
and debt repayments at state-controlled Erdenet Mining Corp and Ulaanbaatar Railways Bradley
said by phone on 2 December that he had been due to depart Mongolia on 29 November but ―is
restricted by the authorities from leaving Bradley said he was advised of his situation by local
police and that he is a suspect in an investigation
―I went in gladly to assist the police and compare notes said Bradley ―We are focusing on the
commercial aspects of this transaction and they are focusing on the criminal aspects The two
although linked are also running in parallel
Mongolia has barred foreign executives from leaving the country during investigations into
companies before Justin Kapla a US citizen and then-president of coal miner SouthGobi Sands
LLC was banned from departing at the end of last year and is still in the country after the nationlsquos
Independent Authority Against Corruption launched a probe into the companylsquos mining licenses
Sharavlamdan Batkhuu Just Grouplsquos controlling shareholder and other companies in the group
have defaulted on loans since 2011 Danjilaa Ganbat director of the banking supervision
department at Mongol Bank the nationlsquos central bank said in July Ganbat made his comments
after Just Grouplsquos Savings Bank Mongolialsquos fifth-largest lender was declared insolvent due to
affiliated companies defaulting on loans Batkhuu and Just Group are among the defendants in the
Standard Bank lawsuit
Standard Bank wasnlsquot able to arrange any meetings with Mongolialsquos government to resolve the debt
dispute the people familiar with the matter said Bradley was the Mongolia specialist on the team
and the only member not directly employed by the bank said one Bradley said he worked as an
employee of Standard Bank from 1999 to 2001 and has consulted on a contract basis for the bank
over the last nine years including five visits to Mongolia since May ―to engage with the government
on our issues the debt recovery
Cabinet Secretary Saikhanbileg Chimed said by e-mail on 3 December that he thinks itlsquos better to
solve the debt dispute out of court and planned to ―push appropriate people to respond
Bradley 50 is a native of Hokitika New Zealand ―In the absence of a New Zealand consulate the
British Embassy is working on behalf of Bradleylsquos consular welfare said Julian Pearson Deputy
Head of Mission at the British Embassy in Ulaanbaatar on 2 December
Source Bloomberg
KHAN BANK OPENS EXPRESS BANKING CENTER
Khan Bank LLC opened an express banking center on 10 December
The Express Banking Center services include a new ATM to deposit cash an E-Corner which allows
customers to make transfers between Khan Bank accounts review accounts through Internet
banking and receive account slips They can also be used to obtain foreign remittances
The Banking Centers are located at the State and Ulaanbaatar department stores on Peace Avenue
and will be open 24 hours every day
Source Khan Bank LLC
ERDENE ANNOUNCES NEW GOLD DISCOVERY AT ALTAN NAR
Erdene Resource Development Corp reported significant gold and silver results from the second
phase of trenching completed during the fourth quarter at its Altan Nar gold-polymetallic project
Results have been received for an additional 11 of the 28 trenches completed The trenching
program was designed to test 10 distinct mineralized zones across the 55-kilometer-long Altan Nar
target area Samples from the final thirteen trenches over the central Altan Nar prospect area have
been submitted to SGS laboratories with results anticipated during first quarter 2014
Highlights include the discovery of a new high-grade gold mineralized zone one kilometer north of
Discovery Zone (Maggie prospect) Significant gold mineralization (Northbow prospect) identified in
the northern portion of a previously untested 700-meter-long anomaly that widens and intensifies
to the south and gold and base metal mineralized zones confirmed at northwestern and
southeastern extent of the 55-kilometer-long Altan Nar target area (Northwest and Far South
prospects) All 11 trenches testing 6 distinct targets returned highly anomalous precious and base
metal mineralization
Source Erdene Resource Development Corp
XANADU MINES FORMS JV FOR COPPER EXPLORATION IN MONGOLIA
Xanadu Mines Ltd has established a joint venture company Mongol Metals with Ganbayar
Lkhagvasuren director and substantial shareholder of Xanadu to execute Xanadulsquos business and
copper exploration strategies
Xanadu recently returned broad copper and gold values from a 780-meter trenching program to test
coincident geophysical and geochemical anomalies at its Oyut Ulaan copper-gold porphyry project
in Mongolia The program has defined three near-surface mineralized porphyry centers with results
up to 85 meters at 075 percent copper with 054 grams per ton gold including 36 meters at 149
percent copper and 102 grams per ton gold The trenching was performed concurrently with the
recent drilling at the Diorite Hill prospect and drill testing of the new targets is scheduled within
the next phase of drilling
Source Proactive Investors
JATENERGY TESTS PROVE CONVERSION OF MONGOLIAN BROWN COAL TO SEMI-COKING COAL
Jatenergy Ltd is on track to pursue its Mongolian coal upgrading plans after testing proved that
coal from the country were highly suitable for conversion using Coal Plus technology
This sets the stage for the immediate start of its investment strategy with Monrospromugoli LLC
which could result in a USD 2 million upfront technology payment and ongoing annual royalties of
USD 176 million The test results had demonstrated that the high moisture high volatile low
calorific Mongolian brown coal can be easily converted into semi-coking coal using Coal Plus
―This report independently verifies that Coal Plus has potential in Mongolia executive chairman
Tony Crimmins said He added ―As the technology is already commercialized and in use in 5
locations in China for over 4 years we see high probability of financing this project in Mongolia
The confirmation that Mongolian brown coal is suited for conversion using Coal Plus into higher
value products paves the way for Jatenergylsquos agreement with Monrospromugoli to go ahead
Source Proactive Investors
SOUTHGOBI RESOURCES ANNOUNCES RESTATED FINANCIAL AND OPERATING RESULTS
SouthGobi Resources Ltd released its regular update on restated financial statements and
management discussion and analysis presentation In the consolidated financial statements for the
year ended 31 December 2012 the restated financial position at 31 December 2012 31 December
2011 and 1 January 2011 the results of operations for the years ended 31 December 2012 and 31
December 2011 and the statement of changes in equity and statement of cash flows for the years
ended 31 December 2012 and 31 December 2011
Following the correction in SouthGobilsquos point of revenue recognition revenues from affected coal
sales contracts are recognized in later periods than previously reported and some revenue has been
reported after 31 December 2012 as not all contracted coal has been collected by customers
During the periods from 2010 to 31 December 2012 trade and other receivables have been adjusted
lower and deferred revenue recognized to reflect revenue being recorded in later periods than
previously reported The inventory balance increased over the same period to reflect higher coal
inventory stockpile balances Prepaid expenses also increased with a corresponding decrease in
trade and other payables as coal sales royalty expenses were recognized in late r periods than
previously reported
The consolidated financial statements auditorslsquo reports and related financial information for the
affected periods contained in SouthGobilsquos filings filed prior to 14 November 2013 should no longer
be relied upon The restatements do not result in a change in cash at the end of any period The
statement of cash flows as reported does not change except for the reclassification of various items
within operating activities
Separately on 19 November 2013 SouthGobi paid USD 81 million in cash to the China Investment
Corporation in accordance with the convertible debenture agreement The amount related to the
64 percent per year cash interest payment and is payable semi-annually Further on 21 November
2013 SouthGobi issued 35 million common shares to China Investment
Source SouthGobi Resources Ltd
MSE CANCELS KHANSH INVEST‟S BROKERAGE LICENSES
The Mongolian Stock Exchange has invalidated the brokerage and securities dealing licenses of
Khansh Invest LLC on 4 December
―The companylsquos clients will be transferred to other brokerage firms that conduct professional
services in the market with licenses for broker-dealer related issues and it shall be governed
according to the concerning jurisdiction and regulations said the Source
Source Mongolian Stock Exchange
MNU PARTNERS WITH UNIVERSITY OF CALIFORNIA FOR RENEWABLE ENERGY
Mongolian National University (MNU) and the University of California announced 13 December the
signing of a memorandum of understanding to conduct high temperature solar thermal technology
research in Mongolia in 2014
Under the terms of the agreement the Mongolian Innovation and Technology Centre at MNU will
have a 100-kilowatt high-temperature non-tracking solar array on their campus that is not only the
first and the largest solar array of its kind in Mongolia but anywhere in the world
―We are delighted to be working with the University of California on this great project and we
particularly excited to make this announcement on the 15th Anniversary of MNU said MNU
Founder and Chairman Munkhbat Lkhagvasuren ―The thermal solar array will be installed
monitored and evaluated by our MNU Engineering Department under the advice and instruction of
the faculty of the University of California Munkhbat said
The technology was developed by University of Californialsquos solar director and professor Roland
Winston who is also a world-renowned scientist in the solar research field Winstonlsquos technology is
already operational at the University of California Purdue University and the Gas Institute of
Chicago although it has not yet been released for commercial deployment anywhere in the world
―My goal in working with MNU is to provide the technology and the staff he said ―Ultimately it
is the Mongolian engineering students that will be required to install and operate these systems as
well as determine the scope of the application beyond simply providing a high temperature heat
source
Source Mongolian National University
MCDONALDS INTERNATIONAL CALLS FOR FRANCHISEE TO POSSIBLY OPEN IN MONGOLIA
McDonalds International sent out a press release on December 10 calling for partners to approach
the company to open its first burger outlets in Mongolia
―We have not set a firm date for the development of McDonalds restaurants in Mongolia In the
future we may take steps to open McDonalds restaurants in Mongolia and if we seek a franchisee to
represent us the person will have the following characteristics
―High integrity business experience in the market history of success ability to work well with a
franchisor ability to complete a training program that can take about nine months willingness to
devote full time to the McDonalds restaurant business retail experience knowledge of real estate
market significant capital
The press release ends by inviting candidates to apply for a franchise
Source BNE
JAPANESE ldquoSUN RICE PLANT OPENS IN MONGOLIA
An opening ceremony for Mongolialsquos Technik Import LLC and Japanlsquos Niigata Kubota ―Sun Rice
factory in Ulaanbaatar on December 10
Niigata brown rice will be imported sorted and packed at the Ulaanbaatar factory which has a
daily capacity for the production of two to three tons of packaged rice The plant is equipped with
fully automated machines from Kubota The rice will begin sale in the domestic markets at MNT
5000 to MNT 7000 per kilogram
―Mongolia has been receiving rice from the people of Japan under aid program for many years
said Deputy Minister B Tsogtgerel ―During the latter event I and Ambassador Takenori Shimizu
were discussing that the period of receiving rice as aid is over and now the time of reciprocal
assistance has come and the ―Sun Rice factory is a sample of joint cooperation to produce the
world known quality in Mongolia
Niigata Prefecture is the second largest producer of rice in Japan after Hokkaido
Source Info Mongolia
MNBC MIGRATES TO DVB-T2 WITH THOMSON VIDEO NETWORKS
Video Mongolia Digital Broadcasting (MNBC) has launched Mongolias first ever DVB-T2 service using
head-end systems from Thomson Video Networks
Launched in 2007 MNBC was Mongolias first digital terrestrial TV network operator and will now be
able to broadcast up to 120 digital TV channels over five UHF transponders to maintain its position
and compete with Mongolias national satellite operator Working with systems integrator Digital
Horizon MNBC has deployed TVNs Vibe EM1000 multi-channel SD encoders and NetProcessor 9030
multiplexer and video processor with an embedded DVB-T2 gateway
Source Rapid TV News
CHINESE FIRM NEGOTIATING TO ACQUIRE JUST AGRO
A Chinese company is in negotiations to purchase Mongolias only meat exporter said a company
source
Just Agro LLC which owns 11 meat companies with the Makh Market brand is reportedly the subject
of negotiations for sale to a Chinese entity said the source who asked not to be named The Just
Agro company provides 40 percent of meat processing and 30 percent of storage in Mongolia and is
the only meat exporter in Mongolia
Last July authorities revealed that Just Grouplsquos Sh Batkhuu falsified signatures of the State
Property Committee and Erdenet Mining Cos director to receive USD 131 million in loans from
South Africas Standard Bank putting up the Erdenet Mine as collateral for the credit After Just
Group was dissolved the central bank took over all its assets including Just Agro
Source Unuudur
MONGOL TV EXPOSES MEDIA CORRUPTION WITH FAKE MCDONALDS STORY
An investigative news show on Mongol TV planted a false news story last week with all 9 of
Mongolias major local media outlets about McDonalds opening a branch in the country The
exercise was undertaken to expose corruption and the rampant practice of paid-for journalism in
Mongolia Mongol TV said
The appearance of a Mr P Rank promising McMutton burgers and goat milk-shakes in the
official press release set off no alarms at the media networks which took between USD 150 and
USD 700 from an undercover journalist to run the story on their websites on the front page of three
newspapers and on TV news on three networks including the local public broadcaster
―Soon the first letter our children learn will be Mlsquo Mr P Rank says with a golden shining smile
according to the fake release which also claimed McDonalds was to be sponsored by Mongolialsquos
Health Ministry and sold in schools all over the country
After Mongol TV unveiled the sting it invited representatives of the 9 duped media organizations to
explain their actions though all reportedly declined
Source Hollywood Reporter
EBRD ADOPTS NEW STRATEGY FOR ENERGY AND NATURAL RESOURCES SECTOR
The European Bank for Reconstruction and Development (EBRD) has adopted a new strategy that
will guide its investments in the energy and natural resources sector for the next five years EBRD
press release reported Tuesday
The bank sets out a commitment to helping its countries of operations move toward a sustainable
energy future The EBRD region which stretches from Morocco to Mongolia is faced with a
challenge of providing sustainable secure and affordable energy The energy strategy identifies
energy efficiency as the first and best response to this challenge
―What the EBRD brings to this challenge is our focus on structural reform said EBRD Managing
Director for Energy and Natural Resources Riccardo Puliti ―We have learnt from our work that
when properly channeled market forces can be harnessed to make energy sectors more sustainable
- environmentally economically and politically
The bank intends building on its well-established support for the Extractive Industries Transparency
Initiative by requiring clients operating in the extractive industries sector to disclose subsoil
contracts and licenses as well as all payments they make to local and national authorities
In the case of coal-fired generation the strategy supports the move to lower-carbon fuel sources in
response to the challenge of climate change In alignment with other international financial
institutions the EBRD will not finance any coal-fired power generation projects except in rare and
exceptional circumstances in which there is no feasible alternative energy source
The strategy also reinforces the EBRDs growing support for renewable energy which will include
financing both energy-generating capacity and key infrastructure such as transmission lines and
backup generation
―We have also developed and invested in the first wind farm in Mongolia - where it was also the
first new energy generator in 30 years said Puliti
Source Trend News Agency
SUSTAINABILITY HOSTS SESA WORKSHOP
Sustainability East Asia LLC organized a National Validation Workshop on 10 December as part of its
responsibilities for establishing a strategic environment and social assessment (SESA)
Participants from across the country arrived to represent government the private sector and non-
government organizations to discuss the proposed SESA The next step will be to assess mining
growth options and identify at least three likely growth scenarios which mining could bring to
Mongolia Afterward the SESA team will evaluate the environmental and social issues that are likely
to arise as a consequence of each scenario
The Mining Sector Institutional Strengthening Technical Assistance Project commissioned
Sustainability to conduct a strategic environmental and social assessment for Mongolias mining
sector
Sustainability will also perform a gap analysis of the legal regulatory and institutional capacity to
deal with each possible scenario An action plan is expected for SESA by summer 2014
Source Sustainability East Asia LLC
UB REGISTERS MATERNITY HOSPITAL NO 1
The new building annex for Maternity Hospital No 1 was registered as capital city property
13 December at a regular session of the Ulaanbaatar Citizens Council This maternity hospital
building was built with financing from Boroo Gold and was presented as a gift to the people of
Mongolia With a capacity to receive 150 mothers and children its total cost was MNT 92 billion It
includes the hospital building of 1169 square meters external heating clean water and sewer
water pipelines a diesel station an asphalt road a pedestrian walkway outdoor vegetation and an
external LED sign
This new building was commissioned 15 June The new annex has one vacuum operation room and
two standard operating rooms on the fifth floor 100 beds for women and 50 beds for infants on the
third and fourth floors paraclinical and sanitation units a pharmacy a conference room and
training rooms on the second floor an ambulatory section and reception on the first floor and staff
cafeteria closets washrooms and a disinfection chamber in the basement
Source Centerra Gold Inc Newsmn
RIO TINTO‟S SAM WALSH DIGS IN FOR THE LONG HAUL
Sam Walsh wants to remain as Rio Tinto PLClsquos chief executive beyond the end of his contract and
has told the minerlsquos board he will not be ready to retire in 2015
―I am there if they want me said Walsh ―Likewise if therelsquos someone else who can come in and
take what Ilsquove done to the next level thatlsquos fine too
The Australian 63 later this month replaced Tom Albanese 11 months ago after Rio decried
―unacceptable writedowns on its coal business in Mozambique Walsh says investors support his
strategy to cut costs and sell non-core assets
Walsh said he has explored selling all of Riolsquos aluminum business this year in what would be a
signature reversal of Albaneselsquos costly purchase of Alcan in 2007 But he says no offers have been
good enough while the business is not generating enough cash for an initial public share offering or
spin-off to Riolsquos shareholders Walsh has also been frustrated in attempts to sell Riolsquos diamonds
business
―Who would thank me if I sold something under value just to get a tick At the end of the day you
have to be pragmatic about things he said Offers ―werenlsquot in the bailiwick of where we thought
they should be
The Alcan deal epitomized Riolsquos poor recent dealmaking and Walsh admits the company had
―relaxed some of the controls it should have had Rio staff has now ―refound their mojo he said
On operating costs which Rio has said it will cut USD 3 billion next year he said ―There is rolling
momentum and thatlsquos important
Source Financial Times
KYRGYZSTAN FILES ECOLOGY DAMAGE LAWSUIT AGAINST CENTERRA
Kyrgyzstan is suing Canadas Centerra Gold Inc for 15 billion soms (USD 304 million) over what the
government says is ecological damage marking a new twist in a bitter row with the investor running
the largest Kyrgyz gold mine
The state environmental protection and forestry agency said in a statement that it had filed the
lawsuit at an economic court in the Kyrgyz capital Bishkek saying Centerra Gold had ignored its
earlier request for voluntary compensation It said the alleged ecological damage included
emissions of pollutants and waste dumps It said its claim referred to the companys operations
between 1996 and 2011
Centerra had said earlier that it viewed the governments claim as exaggerated and unfounded
The company disagrees with these charges and plans to give explanations on this matter in the
nearest time said a spokesman for the Kumtor Operating Company (KOC) the Centerra subsidiary
that runs the Kumtor mine in the Tien Shan mountains
The Toronto-listed miner which also owns the Boroo gold mine in Mongolia is already under
pressure from the Kyrgyz parliament which demands the state hold 67 percent in a proposed joint
venture to run the mine In September the government and Centerra Gold signed a memorandum
of understanding paving the way for Kyrgyzstan to swap its 327 percent stake in the Canadian firm
for 50 percent in a venture that would own Kumtor But in October the legislature voted to tear up
the document and seek control over the planned venture It gave the cabinet until 23 December to
report on its talks with Centerra Gold on setting up the venture Pearson said Centerra is having
constructive dialogue with the Kyrgyz government
Source Reuters
ECONOMY
FITCH AFFIRMS TWO MONGOLIAN BANKS AT B REVISES OUTLOOKS TO bdquoNEGATIVE‟
Fitch Ratings on 16 December revised the outlook on the Long-Term Issuer Default Ratings (IDRs) of
Khan Bank LLC and XacBank LLC to ―Negative from ―Stable At the same time the agency
affirmed the two Mongolian banks IDRs and viability ratings at B and b
The revision of the outlooks on both banks IDRs reflects weakening operating conditions as
indicated by the change in the Outlook for the Mongolian sovereign (B+) to Negative from Stable on
13 December The sovereigns outlook was revised due to mounting risks to the countrys economic
and financial stability Ratings on the two banks could be downgraded if pressures on asset quality
and liquidity intensify Persistent local-currency depreciation would reduce borrowers repayment
capacity and could lead to accelerated deposit withdrawals given the countrys high level of
dollarization
The banks ratings also remain sensitive to the withdrawal of credit stimulus as this could result in
asset deterioration on slowing economic growth or higher inflation Further decline in the
governments international reserves could also trigger a negative rating action as the banks
currency-related risk is counterbalanced by the authorities swap facility and unlimited foreign-
currency conversion Both banks ratings are also sensitive to any changes in their steady access to
capital from private-sector owners
Khan Banks Support Rating and Support Rating Floor (SRF) reflect Fitchs view that as the largest
bank in Mongolia it would be likely to receive state support in case of need However the
Mongolian sovereigns ability to provide timely support to the banking system remains limited as
underlined by its IDR of B+ A downgrade of the sovereign ratings would point to weakening in the
Mongolian governments ability to provide timely support to the banking system which put negative
rating pressure on Khan Banks SR and SRF In contrast Fitch expects XacBanks SR and SRF of 5B-
to be maintained even if the sovereigns rating is downgraded to B This is because the current SR
and SRF already reflect the agencys view that support from the sovereign in case of need cannot
be relied upon
The rating actions are as follows Khan Bank Long-Term Foreign-Currency IDR affirmed at B
Outlook revised to Negative from Stable Short-Term Foreign-Currency IDR affirmed at B Long-
Term Local-Currency IDR affirmed at B Outlook revised to Negative from Stable Viability Rating
affirmed at b Support Rating affirmed at 4 Support Rating Floor affirmed at B XacBank Long-
Term Foreign-Currency IDR affirmed at B Outlook revised to Negative from Stable Short-Term
Foreign-Currency IDR affirmed at B Long-Term Local-Currency IDR affirmed at B Outlook revised
to Negative from Stable Viability Rating affirmed at b Support Rating affirmed at 5 Support
Rating Floor affirmed at B-
Source Fitch Ratings
MONGOLIA SCORE FALLS ON POLITICAL RISKS INDEX FOR MINING INVESTMENT
An annual survey by Behre Dolbear of political risks saw Mongolia decline 5 points in an index
ranking Mongolia 19th out of 25 countries
Mongolia this year received a score of 269 compared with 32 last year Leading the countries
surveyed was Australia down 07 points from last year Russia with a total score of 171 compared
with 16 last year was the lowest ranking
The 25 countries considered in this yearlsquos survey are ranked based on seven criteria
-the countrylsquos economic system
-the countrylsquos political system
-the degree of social issues affecting mining in the country
-delays in receiving permits due to bureaucratic and other issues
-the degree of corruption prevalent in the country
-the stability of the countrylsquos currency and
-the competitiveness of the countrylsquos tax policy
Each criterion is rated on a qualitative scale from one (worst) to 10 (best) that reflects conditions
that promote investment growth in the mining sector The maximum score attainable for a country
is 70 points
Source Behre Dolbear Group
MONGOLIA LOOKS FOR SECOND CHANCE WITH FOREIGN INVESTORS
Saruul Ganbaatar the deputy head of Mongolias stock exchange hopes the countrys days of
interventionist economic policies are over and new laws ensuring foreign investors access to the
frontier markets industries will bring back sorely needed cash
Ganbaatar 32 who cut his investment teeth in Chicagos financial houses after graduating from
Loyola University is careful not to over-promise on what the stock market can deliver in 2014 and
beyond in terms of new listings or overall growth In October a law was passed easing ownership
restrictions for private companies to invest in the strategic industries A Securities Markets Law
coming into effect 1 January 2014 is expected to provide the key ingredient to attract deep
pocketed institutional investors such as mutual funds to invest
This really is the missing ingredient said Ganbaatar who has been traveling the globe promoting
the changes in the laws to global investors for the past two weeks
The stock index fell 19 percent in 2012 and year-to-date is down 115 percent although it did start
to climb with the newly passed laws On 1 January the new Securities Markets Law will allow
Mongolias commercial banks to offer custodial banking services Custodial banks serve as safeguards
for a firm or individuals financial assets playing a critical role in the final settlement of market
transactions Total market capitalization now is between USD 900 million and USD 1 billion Dont
expect the number of new listings to mushroom There may instead be a cull of companies Fifty-
five to 60 of them many of which have not traded in years are being reviewed for potential
delisting
The Mongolian Stock Exchange 100 percent state-owned is perhaps itself a candidate for
privatization It has been in a strategic partnership with the London Stock Exchange for two and a
half years
They have the right of first refusal he said
Source Reuters
CPI INCREASES TO 12 PERCENT YEAR-OVER-YEAR IN NOVEMBER
The National Statistical Office reported a 12 percent increase in the national consumer price index
(CPI) in November year-over-year
The CPI growth which also in November grew 13 percent from the previous month was explained
by a 14 percent increase in food prices and non-alcoholic beverages 23 percent for clothing
footwear and fabrics and 07 percent for housing water electricity and fuels
Source Info Mongolia
GROWTH SEEN IN EXPORT OF PRECIOUS METALS
The export value of precious metals grew 114 percent in November from the month before and 63
percent from the same period in 2012 according to the National Statistical Office
Exports totaled USD 38 billion in the year to December while imports grew to USD 58 billion The
foreign trade balance saw a deficit of USD 2 billion November saw exports of USD 381 million and
imports of USD 514 million with exports and imports in decline between July and November The
value of export products for the first 11 months was USD 11 billion Despite the gain in precious
metal exports exported minerals which represented 81 percent of all exports in the year to
November fell 129 percent from the year before
Source Zuunii Medee
MNT 788 BILLION WILL BE ENTERED INTO THE STABILIZATION FUND
The Stabilization Fund is set to collect MNT 49 billion this year and MNT 298 billion next
The Stabilization Fund was established to collect surplus revenue in years of economic gains from
the mining sector to cushion possible annual losses during economic downturns and weak
commodity demand Any gain in the price for gold and coal next year will also be reflected in
allotments to the fund
Source Zuunii Medee
ECONOMIC DEVELOPMENT MINISTRY PLANS TO PUT 81 OF BUDGET INTO CONSTRUCTION
The Economic Development Ministry plans to invest MNT 814 percent of its total investment budget
into construction
Beginning 1 January 2014 the ministry will provide MNT 9303 in loans toward the construction
sector The ministry will spend 39 percent of its budget for reconstruction and repair 10 percent
for the purchase of new techniques and technical equipment 3996 percent for infrastructure
2743 percent for education and health 636 percent for employment and agriculture and 2926
percent for other sectors of the economy
Projects include the construction of 30 clinics 27 cultural centers 6831 km of paved roads and
1032 m length of bridges Mongolia has received USD 55 billion in aid in the last two decades of
which 55 percent was in the form of low rate loans and 45 percent as non-repayable grants for
investments into agriculture infrastructure power and health sectors
Economic growth since 2011 has allowed Mongolia less aid than in the past The government has
now turned its focus on providing funding with concession agreements to large scale projects such
as the Nariin Sukhait-Shivee paved road and the power station at Mogoin gol Other projects include
Power Plant No 5 the Altanbulag-Ulaanbaatar-Zamyn Uud highway the Tavan Tolgoi- Khanbogd-
Khangi road and the Tuul Songino water reservoir complex
Source Zuunii Medee
TT POWER PLANT MAY NEED CONCLUSION TO OT DISPUTE SAYS DIRECTOR
Uninterrupted development of the Tavan Tolgoi power plant will ride on the outcome of disputes
concerning Oyu Tolgois underground mine said the director of the plant
―One of the main risks is the issue of a main user Enkhsaikhan said ―The key buyer of the power
from the TT Power Plant is OT Due to the uncertainty over phase twolsquo and unresolved matters
with the government of Mongolia OT is not regarded as a reliable buyer on a stand-alone basis
He added that the power company may request a guarantee from Oyu Tolgoi
A consortium that includes Koreas Posco Energy and Daewoo Engineering and Construction GDF
Suez Energy Asia Japans Marubeni Corp and Kansai Electric Power in March was selected for
development of the plant which has a preliminary estimate cost of USD 1 billion Those expenses
include installation of 150 kilometers of electric lines between Tavan Tolgoi and Oyu Tolgoi The
consortium will be expected to raise 30 percent of the cost itself while the remaining 70 percent
will come from bank loans However the uncertainty surrounding the Oyu Tolgoi copper mine could
create more hold ups
Source Zuunii Medee
CABINET TO CONCLUDE CONCESSION ON ALTANBULAG-ZAMYN UUD HIGHWAY
The Cabinet of Ministers ordered ministers to conclude a concession agreement for the Altanbulag-
Ulaanbaatar-Zamyn-Uud highway
The government is planning to establish the concession contract with the Chinggis Land
Development Group which according to the agreement shall have exclusive rights to construction
ownership and transfer of property using its own financing The concessionaire shall complete the
construction within three years after that shall operate the facility for another 30 years before
transferring the ownership to the Government
If Chinggis Land accepts these terms it would be responsible for developing a feasibility study and
blueprint of the project to be approved by the relevant ministries before concluding a financing
agreement The concession agreement will come into effect after the Chinggis Land Development
Group obtains a financing agreement for USD 1 billion from a commercial bank of Mongolia
The government will be responsible for freeing up the land where the highway is planned while the
Chinggis Land would cover the costs for doing so
Source Montsame
MNT 116 BILLION WILL BE SPENT FOR BUILDING EMERGENCY ALARMS IN UB
The National Emergency Management Agency has installed an emergency alarm system in 60
locations of Ulaanbaatar The alarm will alert citizens to natural disasters such as earthquakes
The alarms will be controlled from a center by microwave radios and satellite communication
devices
Source Udriin Sonin
EIU CLARIFIES EXTENT OF OFFICIAL ESTIMATES OF OIL SHALE RESERVES
The latest research from Mongolias mining ministry gives a clearer picture of oil shales
development potential in the coming years Although Mongolia has long been known to have
substantial oil shale deposits previous estimates were extrapolated from rudimentary surveys
conducted in the 1990s and thus left the actual reserves open to speculation
Plans to develop the industry took shape only in April 2013 when an American company Genie
Energy signed a five-year deal with the Petroleum Authority of Mongolia to explore oil shale
reserves in central Mongolia Genie also plans to build a USD 4 billion processing factory in Tuv
Aimag According to government projections the processing plant will generate USD 850 million of
tax revenue annually Aside from the economic benefits of the project domestic fuel sources could
help Mongolia to improve its energy security by loosening the countrys dependence on its powerful
neighbors At present 90 percent of Mongolias oil and related products come from Russia with most
of the remaining amount being imported from China
Yet the benefits of large-scale oil shale extraction are not as clear as they might seem at first
glance Most importantly Mongolias oil shale resources should not be confused with the shale oil
phenomenon that is currently sweeping the United States Oil shale (also called kerogen) is more
expensive to extract than shale oil and carries greater environmental costs In particular oil shale
requires a large amount of water to process which could be a risky proposition in Mongolia where
hydrological resources are already under strain Although other countriesmdashEstonia in particularmdashuse
oil shale as a substitute for coal extracting liquid fuel from the shale is a complex and relatively
untested process
Genie Energys progress on the project seems more substantial than that of comparable coal
liquefaction projects that have faltered in the region However environmental technical and
political limitations suggest that Mongolias overall dependence on foreign fuel will not change
significantly in the foreseeable future
―We remain doubtful that oil shale will play a significant role in Mongolia in the next two years so
our economic growth and trade forecasts will remain unchanged said the Source
Source Economist Intelligence Unit
MONGOLIA AND THE THREAT OF THE RESOURCE CURSE
Mongolia is at a crossroads while investors complain the government is dragging its feet on allowing
miners to start digging it is crucial that it get things right at the early stages of the resources
boom
Mongolias challenge will soon be the worlds says Richard Dobbs and his team at McKinsey in a
report predicting a USD 17 trillion investment bonanza by 2030 to keep up with demand for oil gas
and other materials In 1995 about 58 countries depended on resources for the bulk of their output
and wealth In 2011 that number had risen to 81 By 2030 roughly half of the worlds economies
will essentially become giant filling stations for developing superpowers from China to South Africa
That means that instead of the world moving toward greater transparency democracy and freer
markets we could see rising corruption levels and even greater income inequality
Economies with natural-resource endowments have a huge opportunity to transform their
prospects but history suggests that they could all too easily squander the windfall says Dobbs
director of the McKinsey Global Institute in London
The world would be wise to take steps today to break this cycle McKinsey recommends several
While not terribly original they include strengthening public institutions and good governance
building decent infrastructure boosting national competitiveness promoting sound fiscal policy
making and spending the windfall wisely while engaging in forward-looking economic and social
planning The trouble is that political will and integrity is often the first casualty once the minerals
start flowing out and the spoils come pouring in
Mongolia is at that very crossroads today Investors complain the government is dragging its feet on
allowing miners to start digging But its more important to get things right at the early stages of
the resources boom That means acting now to create the institutions and regulatory frameworks
needed to ensure revenue transparencymdashknowing exactly how much money is being dug out the
ground and where its going Why not set up a sovereign-wealth fund to save for Mongolias future
When the stakes are that high a little patience can go a long way
Source Bloomberg
MONGOLIAS NOMADS WARM TO SOLAR POWER
In Mongolia often known as the land of the blue skies the sun shines for 250 days on average each
year It beats down on the sparse plains and on the Gobi desert that spans the countrys southern
border with China
It shines even during the frigid winter days on the hundreds of thousands of nomads who still roam
the steppes herding animals and living in dome-like tents calling gers About 800000 of Mongolias
28 million inhabitants still live the traditional nomadic lifestyle that has remained largely
unchanged for generations Apart from the addition of motorbikes the occasional petrol generator
and a passing trade from intrepid tourists wanting to stay in a ger for the night life is almost the
same as that of many nomads grandparents and great-grandparents Almost but not exactly
Dotted across the steppes glints of light can be seen as the sun bounces off the solar panels that
have been installed on the sides of gers made of felt and yaks wool At the start of this millennium
Mongolias herders and nomads had little or no access to modern electric power and its potential
benefits But as of 2013 thanks to a concerted push by the Mongolian government almost 70
percent of nomadic people have access to electricity Bor a herder who mainly travels around
western Mongolias Arkhangai province is one of the people whose family benefits from portable
solar home systems (SHS)
We use it for generating the power for lighting in the ger charging phones we can also generate a
fridge to keep food longer and we can run a television That is very useful for us because we can
get the most recent weather forecast which is important for our work and keeping our animals
safe Before we had power it was very difficult Now it is almost like living in the city
The ability to charge mobile phones is also important for the herders who often have children
staying at boarding schools Access to electricity also allows families to contact emergency health-
care and doctors for advice without having to make the often arduous journey to the nearest village
or town
The solar systems were distributed and installed with the help of the World Bank after the
Mongolian governments National 100000 Solar Ger Electrification Program ran into difficulties A
World Bank report Capturing the Sun in the Land of the Blue Sky describes the difficulties faced by
the Mongolian government on its ambitious project
By 2005 five years into the plan 30000 families had been kitted out with an SHS but then the
program began to stagnateThe government of Mongolia recognized that considerably more effort
was necessary not only to keep the program on track but to scale-up implementation in order to
achieve the National 100000 Solar Ger Electrification Program target the report said In 2006 the
World Bank agreed to cover half of the initial outlay costs for each family as well as after-sales
maintenance with 50 centers set up across the country including at least one in each of its 21
provinces so that the herders would not have to travel to Ulaanbaatar every time the solar panels
needed maintenance
The SHS project also offers environmental benefits to a country where the ratio of carbon dioxide
emissions to economic output is ten times higher than the world average because of the increase in
mining over the past decade as the true extent of Mongolias mineral wealth became apparent The
solar systems are slowly replacing the diesel generators used by some nomads as a means of
generating power although they are still using stoves for heating burning wood coal and dung
throughout the year
Source Al Jazeera
IRON-ORE AND COAL PRICES GO SEPARATE WAYS
Prices of the key ingredients in steel productionmdashiron ore and coking coalmdashare moving along sharply
different paths as mining companies resist cutting coal output despite the market being awash with
the raw material
While iron-ore prices have risen 22 percent since May coking coal is still searching for a rebound
Coking-coal prices are off more than 4 percent over the same period China is on course for another
year of record steel production with supply directed to the construction of high-rise apartment
buildings the manufacture of luxury cars and other uses
There is simply too much coal on the market the International Energy Agency said in a report this
week
Shipments of steelmaking coal from Australiamdashthe worlds biggest exporter of the commoditymdashare
forecast by the government to rise to 178 million tons in 2015 from 145 million tons last year Most
goes to China which accounts for 60 percent of global demand In contrast global iron-ore
exporters are struggling to increase output in areas other than Australias remote Pilbara region
supporting prices of that commodity The spot price of iron ore climbed to nearly USD 140 a ton
earlier this month a four-month high Prices have since eased a bit to USD 13430 a ton but
remain well above the consensus forecasts of analysts at the start of this year
Coal miners could scale back production but that isnt always easy to do In Australia many miners
are locked into so-called take or pay contracts with rail and port operators Many analysts dont
expect coking-coal prices to rebound for at least another 12 months RBC Capital Markets expects
coking-coal prices to average USD 154 a ton in 2014 down from USD 159 a ton forecast for this
year Instead they see more chance that iron-ore prices will come down more sharply RBC predicts
an 11 percent fall in iron-ore prices next year as new supply from Anglo Americans Minas Rio
project and mines owned by Fortescue Metals Group Ltd is added to the market UBS is even more
bearish predicting iron ore will fall below USD100 in the second half of 2014
Source Wall Street Journal
ARE COMMODITIES TRADERS bdquoTOO BIG TO FAIL‟
When the banking industrylsquos top lobby group commissioned a report by on commodity trading
houses the idea was to show trading houses like Glencore Xstrata Vitol or Cargill were ―too big to
fail and therefore needed to be regulated in a similar manner to the banks
But instead of highlighting the inherent issues surrounding the industry the report found trading
companies posed less systemic risk than the big banks As a result the Global Financial Markets
Association which commissioned the report decided not to finalize or publish it (The GFMA claims
that it often commissions reports which are shared with regulators and other interested parties but
never published) But the debate hasnlsquot ended
A separate report published in July by the Centre for European Policy Studies a think-tank argued
the growth of commodity trading houses which underpin the global trade in raw materials could
―have systemic implications Commodities trader Trafigura has become the latest to wade into the
debate In its recent prospectus for a EUR 500 million bond issue the worldlsquos second largest metals
trader and third biggest oil trader addresses the GFMA report as well as the issue of systemic risk
Making some tart observations the trading house says the GFMA paper was aimed squarely at the
Financial Stability Board a group of global regulators
―[The report] was widely seen as a tactic by some banks active in the commodity trading space as a
way of creating more equality between market participants by seeking to usher in further
restrictions on pure commodity trading companies the prospectus says
Commodity traders are facing the need to be more open about their operations and lift the veil of
secrecy Indeed the author of the GFMA reportmdashCraig Pirrong a widely respected academicmdashis
working on a white paper on commodities traders Commissioned by Trafigura it will look at what
commodities trading houses activities and the recent trend to accumulate more assets risk
management as well as looking at different types of commodity companies
Source Financial Times
SMOG DARKENS SHANGHAIS PROSPECTS FOR BECOMING A GLOBAL FINANCIAL CENTER
In the debate over which matters more in China money or quality of life the quality-of-life side
may have found the ultimate argument If you cant breathe nothing else really matters And itlsquos a
debate Mongolia has to have as it makes its own steps towards industrial and economic growth
Chinas pollution problem is spreading and growing worse a fact on stark display last week in
Shanghai the countrys financial center A stretch of filthy-air days in that coastal city so
thoroughly shocked residentsmdashwho had largely escaped the smog that has long plagued the likes of
Beijing and Harbinmdashthat it inspired fresh talk about getting away from China Lawrence Shu a
Shanghai-based partner at Hylands Law Firm said he and his friends are thinking more seriously
about moving abroad
The smog had a big impact because it feels really bad if you cant breathe freely he said
The environment used to take a back seat among the Chinese But as they get richer they are
traveling abroad more making the pollution back home more obvious The Internet also
contributes Blue-sky pictures posted on social networks by Chinese travelers abroad constantly
remind folks of what is lacking at home and Chinese now use various apps to track air-quality data
If Shanghais smog discourages smart financial professionals from wanting to live there that will
hinder Chinas effort to create a global financial center If businesses such as financial companies
and luxury-goods makers perceive that Chinas elites are spending more time outside their home
country they will be less willing to invest in China
Most rich Chinese havent packed their bags and left yet but they are keeping their options open
Relocation is a big decision said Anne Wang who works in the financial industry in Shanghai But
just in case she recently received a US visa that would allow her to live there
Source Wall Street Journal
POLITICS
MINERALS POLICY ENTERS FINAL DISCUSSIONS
The government published a final draft of Mongolialsquos State Policy on the Minerals Sector for 2013
through 2025
The document was first presented to Parliament in July and is now entering final discussions during
the autumn plenary session of Parliament following a 42 percent drop of foreign investment and 23
percent fall in the currency year-on-year
―We have reviewed the proposed State Policy on the Mineral Sector which we feel will be a
positive step forward if passed said the Source ―The passing of this policy will result in more
transparency and an increasing participation from foreign investors That said it will take time for
these feats to be accomplished Investors will be weary of Government promises as they seek
longevity to prove Government intentions
The proposed policy is divided into four main sections rationale principles main policy and
implementation-results The major points stressed in the policy include transparency and
responsible mining The law sends the message that growth is going to be driven by private sector
participation and the intent to provide a stable investment environment technological innovation
and value-added activities
Key priorities of the law since it was first unveiled include stability of taxation and the legal
environment an end to any discrimination between foreign and national investors and the
preservation of strategic resources and deposits
This most recent version saw the inclusion of a new section supporting development of local areas
and the interests of local citizens Other key elements include explorationmdashwhich would see
greater government regulation for strategic mineral deposits while cutting down bureaucracy and
conducting scientific researchmdashproduction support and local support The new document also
highlights greater support for non-governmental organizations for the environment allowing them
to claim damages from mining operations the establishment of funds to support economic
diversification environmental protections and land rehabilitation
The new draft has removed the risk assessment section and replaced it with a section on
implementation This includes the improvement of the legal environment and producing of relevant
regulations programs and projects for 2013 to 2015 followed by the implementation of programs
and projects from 2014 to 2025 and finally the provision of conclusions on midterm policy
implementation and further planning for up to 2020 and 2025
―We believe that this policy will take us one step closer to attracting investors and supporting
private sector development in Mongolia said the Source ―Despite current investor hesitation this
state policy in addition to the new amended Minerals Law set to pass next year will further
encourage investors to enter the market and will build support for the junior mining community
Source Mongolian Investment Banking Group
PARLIAMENT UNANIMOUSLY BACKS ldquoSMART GOVERNMENTrdquo INITIATIVE
Parliament has unanimously backed President Tsakhia Elbegdorjs ―From Big Government to Smart
Government initiative for government reform concepts having signed a joint statement of support
on 13 December
The joint statement gives full support to the presidents initiative and commits to cooperation for
its undertaking This includes support for enhancing government systems and policies in line with
democracy and a market economy improving the capacities of public services and curtailing
government intervention into private business affairs Also included are protections to private
business including establishing government structures for rule of law support to domestic
industries and honoring contracts The fight against corruption is another main perogative
On 16 November 16 the Office of the President of Mongolia organized a national consultative
meeting on this topic at the Government Palace Elbegdorj next met with members of the
Parliament on 9 December to organize an open dialogue with representatives of Parliament for an
appeal for them to sign the joint statement Reaffirming the commitment of the Mongolian
lawmakers to a breakthrough reform of the Government the leaders of party floors and factions in
the Parliament and independent members of the Parliament signed the document for the reform on
December 13 2013
Source Montsame
GOVERNMENT CALLS TO END PRACTICE OF APPOINTING MPS AS MINISTERS
The coalition government has thrown their support behind President Tsakhia Elbegdorjs proposal to
prohibit Parliament members from serving as cabinet ministers
Democratic Party members discussed a draft resolution and proposed amendments submitted by the
president for the new restriction at a party meeting on Monday The draft amendments were
unanimously backed by the faction The Justice Coalition which includes the Monglian Peoples
Revolutionary Party and Mongolian Democratic Party came to the same conclusion following its own
meeting said coalition head N Battsereg on Monday
Source Montsame
COMMITTEE LEADERS TO BE ELECTED THIS MONTH
The coalition government will soon be electing officials to lead the various committees in
government
Parliament has 8 standing committees to elect leaders to this month with each committee to be
led by a representative of the coalition government Current committee heads are Ts Tsolmon at
the Security and Foreign Policy Committee G Bayarsaikhan at the Environment Food and
Agriculture Committee Z Bayanselenge at the Social Policy Education Culture and Science
Committee R Burmaa at the Petition and Requests Committee A Bakei at the State Structural
Committee Ts Davaasuren at the Budget Committee Sh Tuvdendorj at the Legislation
Committee and B Garamgaibaatar at the Economic Committee
Source Zuunii Medee
FOREIGN CURRENCY PAYMENTS BANNED FOR MININGEXPLORATION LICENSING FEES
The Ministry of Finance has banned the use of foreign currencies to pay for mining and exploration
licensing fees to the Mineral Resources Authority beginning 1 January 2014
The Ministry of Finance has prompted these entities and companies holding licenses to comply with
Mongolian currency law that states that all businesses and agencies must do business in Mongolian
tugrug According to the 2009 law transactions must not be carried out in foreign denominated or
foreign currency based rates
Source Newsmn
MINING MINISTRY TO COOPERATE WITH ASSOCIATION OF FLUORSPAR EXPLORERS
The Ministry of Mining Wednesday established a memorandum of mutual understanding with the
Association of Fluorspar Explorers (AFE) to cooperate in augmenting the countrylsquos export
In addition to expanding export goals include developing transparent and responsible mining
improving qualities and standards of fluorspar metallurgy and flotation concentrate and in
increasing the production output of the minerallsquos ore enrichment The hope is the memorandum
will create a launching point for a national program for fluorspar its exploitation increase the
volume of production by intensifying research and increase competitiveness in international
markets It will also be necessary to introduce the latest technology to the country along with
running joint trainings with foreign NGOs the Ministry said
Source Montsame
DP REJECTS AMARJARGAL‟S RESIGNATION
Parliament voted against MP R Amarjargallsquos resignation request on 12 December
During Tuesdaylsquos meeting the majority of the Standing Committee on State Structure voted against
Amarjargal`s resignation The head of the Democratic Party (DP) caucus D Erdenebat took a
strong stance against letting Amarjargal leave
Amarjargal said he wanted to resign to take responsibility on behalf of his party members for the
current political situation and economic restraints in Mongolia DP members agree with his
conclusion but encourage him to make the effort and participate for social change and
development Members of the opposition Mongolian Peoplelsquos Party members said that Amarjargal
could see the problems and nature of the majority of Parliament and praised his plan to resign
Source Newsmn
MPP HEAD TO STEP DOWN
Mongolian People Party (MPP) Head N Enkhbold has requested his resignation as party leader
MPP Deputy Head D Oyunkhorol said 9 December that Enkhbold submitted his request to step down
during a party meeting Oyunkhorol said Enkhboldlsquos resignation was due to personal reasons The
new party head will be appointed by the MPPs governing board
Source Udriin Sonin
FIFTH ROUND OF NEGOTIATIONS FOR THE JAPAN-MONGOLIA ECONOMIC PARTNERSHIP
AGREEMENT
The fifth round of the negotiations for the Japan-Mongolia Economic Partnership Agreement (EPA)
will be held from 16 to 19 December in Ulaanbaatar
The Japanese delegation will be led by Jun Yokota ambassador in charge of economic diplomacy
and the Mongolian delegation will be led by Ochirbat Chuluunbat vice minister for economic
development Experts from relevant ministries and agencies of both sides will participate in the
meetings
In this round negotiations are in areas including trade in goods and investment
Source 4-Traderscom
FIRST MONGOLIA-CHINA JOINT BORDER COMMISSION MEETING IN BEIJING
The very first meeting of Mongolia-China joint commission of borders took place 11 and 12
December in Beijing China
This meeting was co-chaired by T Togsbilguun a director of the Department of Neighbour
Countries of Mongolialsquos Ministry of Foreign Affairs and by Xiao Jiangguo a representative of border
checkpoint and seaport affairs Both sides shared on ideas for implementation of the
intergovernmental contract on the border regime and reached some agreements on conducting a
joint examination in the border signs and on activating the collaboration in law enforcement around
frontier areas After this they discussed issues of developing border checkpoints at a same level
putting some border checkpoints into a permanent regime giving an international status to four
checkpoints
The gathered also made a protocol on their meeting and inked its results The next meeting will run
in 2014 in Ulaanbaatar
Source Montsame
BELARUS TO OPEN EMBASSY IN MONGOLIA IN 2014
Belarus will open its embassy in Mongolia in 2014 reads a resolution from the Belarus Council of
Ministers of the Republic of Belarus from 12 December 2013 Belaruslsquo Finance Ministry will finance
the costs of opening and maintaining Belarusian Embassy in Mongolia from the funds set aside in its
national budget for the opening and maintenance of diplomatic missions and consular missions of
the Republic of Belarus abroad
Source Belarusian Telegraph Agency
HOWELL NEW JERSEY USA BECOMES SISTER CITY OF SUKHBAATAR DISTRICT
The Howell Township and the Sukhbaatar district in Mongolia signed a memorandum of
understanding to create sister citieslsquo between Howell New Jersey USA and the Sukhbaatar District
on Tuesday
The program was aimed at opening up talks on how each can benefit from one another Mayor
William Gatto said Howell Township is a very diverse city and theyve taken the relationship with
the Kalmyk community here in Howell and expanded it to a country where they have had no
relationship in the past he said
The sister citieslsquo program will allow both Mongolia and Howell to exchange ideas and come up
with new and better ways to do things that benefits both cultures Outside of Mongolia Howell has
the largest population of Kalmyks in the world with many living in the Freewood Acres section of
the township Gatto said
Some of the goals of the agreement include promoting a common prosperity and development for
both parties an electronic pen-pal program and education opportunities for exchange students
Through a translator Baljinnyam Gan-erdene of the Citizens Representatives Council of Sukhbaatar
District said he came to Howell to see how democracy works in the United States
Im really glad and hope that this unforgettable and successful visit opens the door to our
friendship and prosperity between our residents Gan-erdene said
Gatto gave Gan-erdene a Howell flag and a throw blanket created by the Historical Society
depicting the history of the township Gan-erdene also gave Gatto several items including a bronze
piece of art
Source NJcom
MONGOLIAN CALLIGRAPHY ADDED TO UNESCO CULTURAL HERITAGE LIST
State Parties at the 8th Session of the Intergovernmental Committee for the Safeguarding of the
Intangible Cultural Heritage in Azerbaijan unanimously agreed to register Mongolian calligraphy as
an intangible cultural heritage in need of urgent safeguarding on 2 December
―Mongolian heritage calligraphy is now being recognized by the world and I am grateful on behalf
of my country for decision makers said Secretary-General of Mongolian National Commission for
UNESCO Gundegmaa Jargalsaikhan He noted that Mongolian calligraphy was the fifth cultural
heritage item of Mongolia to be listed and now stands among the Mongolian epic traditional folk
dance the traditional music Tsuur and a circular breathing technique
Mongolian calligraphy is a 1000-year-old writing system that vertically connects continuous strokes
together to create a word Letters of Mongolian script have been created and taught by nomads
from generation to generation During the 1937-1940 purges of the Soviet era thousands of tutors
and traditional scholars of the script were killed Those who remained alive were banned from
mentoring the younger generation Soon after that or around 1946 a new Cyrillic script was
adopted as the only eligible script therefore banning all the teachings of old Mongolian script and
Latin lettering Only in the 1970s was the old Mongolian script re-introduced to scholars allowing a
limited number of classes in universities
After the 1990 democratic changes along with the revival of Mongolian identity interest in
traditional calligraphy reawakened As a sign of such revival the very first non-communist political
organization the Democratic Union of Mongolia used folded calligraphy as its main logo
Source Info Mongolia
THOUGH IMPROVING MONGOLIA STILL REELING UNDER CORRUPTION
The third joint survey by the Asia Foundation and Sant Maral Foundation to gather data on the
perception of corruption in Mongolia revealed that efforts to curb corruption in what is considered
as one of the worldlsquos most corrupt countries could be having impact
The survey shows a significant drop in the percentage of respondents who believe corruption has
increased in the last three years from 389 percent in November 2012 to 183 percent currently In
contrast in 2006 a majority of respondents (63) indicated that corruption has increased ―a lot in
the last three years The survey also shows that corruption has declined in importance as a critical
social problem since 2006 Despite these positive signs overall respondents indicated that
corruption remains a serious issue in some specific key areas
Conducted in September of this year the survey featured face-to-face interviews in 1360
households across Mongolia including seven districts in Ulaanbaatar and 21 counties in six
provinces A majority (766) cited that widespread corruption in the law enforcement agencies is
one of the main reasons the government has been unable to tackle corruption effectively When
corruption is perceived to be this widespread the attention will obviously turn to the performance
of the apex anti-corruption body the Independent Authority Against Corruption (IAAC) The survey
shows that the IAAC is slowly but surely beginning to gain confidence among citizens The
percentage of those surveyed who think that its performance is ―good or ―very good increased
from 78 percent in March 2010 to 203 percent in March 2013 In September 2013 the result shows
a new high of 294 percent
Peoplelsquos perceptions on corruption are often shaped by personal experiences Although very few
respondents in the survey said that they had actually paid a bribe themselves (8 percent about a 3
percent drop from 2012 and an 18 percent drop since 2006) as noted before many are not willing
to report instances where they are asked for one Similarly 36 percent of respondents said they
would not pay a bribe but 26 percent indicated that they would pay if they had the financial
capability
Basanta Pokharel is The Asia Foundation‟s chief of party for the STAGE program in Mongolia He
can be reached at basantapokharelasiafoundationorg The views and opinions expressed here
are those of the individual author and not those of The Asia Foundation
Source Asia Foundation
MPP DEMANDS DISMISSAL OF MINISTERS
Mongolian Peoplelsquos Party Chairman N Enkhbold and party head S Byambatsogt submitted to the
Speaker a request for the dismissal Minister of Finance Chultem Ulaan and of Economic
Development Minister Nyamjav ―Fortuna Batbayar
Our faction believes that these ministers must be held responsible for the worsening of the
national economic situation We also intend to do the same with other ministers after hearing
opinions of people said Byambatsogt
Source Montsame
FORMER TAVAN TOLGOI JSC DIRECTOR ARRESTED
The Independent Agency Against Corruption arrested former Tavan Tolgoi JSC director Kh
Tumenbayar for undisclosed reasons
An unnamed official source suggested that the arrest may be related to abuses of power and
payments to political parties as well as the construction of a high-class hotel in Dalanzadgad Soum
Umnugobi Aimag Kh Tumenbayar is a member of the Democratic Party a member of Parliament
and is an associate of ―Ajnai Bat-Erdene the Minister of Defense who helped Tumenbayar attain
position as the director of Tavan Tolgoi for 6 years and rise to head of the Umnugobi Aimag Citizens
Council
Tumenbayar voluntarily resigned from his position at Tavan Tolgoi last month The IAAC has
reportedly not given details to the reasons for the investigation opened on Tumenbayar because of
possible connections to high-ranking officials
Source Unuudur
MONGOLIA TURKMENISTAN JOIN INTERNATIONAL RACING FEDERATION
The International Federation of Horseracing Authorities (IFHA) has welcomed racing organizations
from Mongolia and Turkmenistan as affiliate members
Recent ratification to IFHA statutes at its annual General Assembly in October created a new
affiliate membership category within the Federation Thus the Federation of Mongolia Horse Racing
Sport and Trainers and the Turkmen Atlary State Association by unanimous vote of the IFHA
Executive Council in Paris in October have become the IFHAlsquos first two affiliate members
The Federation of Mongolian Horse Racing Sport and Trainers (FMHRST) is a non-governmental
organization (NGO) which serves to the development of equestrian sport in Mongolia and works to
protect the rights of horsemen who specialize in this national sport The new affiliates were
announced by IFHA Chairman Louis Romanet this week and several key appointments to IFHA
executive office positions and committees have also been made
Source Horse Talk
MONGOL TV HEAD MEDIA CAN HELP FIX THE BIG PROBLEMS
Nomin Chinbat head of Mongol TV has grander intentions than just ridding the countrys television
business of rampant pirated content and unlicensed formats The young executive wants to help
clean up Mongolian politics and the nation by creating a free and open media
―The networks are used as propaganda channels for politicians They are used very effectively every
four years at election time says Chinbat whom the Source named one of the 25 Most Powerful
Women in Global TV at MIPCOM 2013
―There are laws against piracy but they arenlsquot implemented explains Chinbat who says that
politicians in the country of roughly three million wonlsquot challenge journalists because their
relationships with them are too cozy
Mongol TV has invested in original programming licenses all of its imported content and runs
investigative journalism features highlighting social problems such as alcoholism and corruption
The company is organizing a Mongol TV Day for February 2014 to which it has invited major
international studios to raise awareness of the issues and introduce the global industry to
Mongolia Britainlsquos ITV and Americalsquos CBS are already confirmed and negotiations are ongoing with
other attendees The situation has improved in recent years with some channels having become
what Chinbat calls ―hybrids which license some sports rights but then steal others and copy
formats
―These days some of these channels might license 25 episodes of a format and make 50 But this is
actually progress says Chinbat
Chinbat and her team were at the Asian Television Forum (ATF) in Singapore looking for new
formats that can be produced within the constraints of Mongolian television budgets However with
Mongolias young populationmdash65 percent of the country is under 35 years oldmdashmobile viewing is on
the rise and the network is already working second-screen utilization and new media applications
This demographic sweet spot should guarantee strong growth in the population economy and
nascent entertainment sector in Mongolia in the coming decades
Source Hollywood Reporter
ANNOUNCEMENTS
ldquoMM TODAYrdquo ON MNB-TV FRIDAY 1900 TO 1910
BCM is pleased to announce that Mongolian National Broadcasting continues its cooperation with
BCM on ―MM Today This English news program is aired every Friday for 10 minutes and is
scheduled from 1900 to 1910 tonight Tune in to watch this program that reports stories from
todaylsquos BCM NewsWire
BCM WEBSITES
MONGOLIAN WEBSITE bdquoPRESENTATIONS‟ AND bdquoNEWS‟ SECTIONS
The Presentationslsquo section on BCMlsquos Mongolian website can be reached via bcmmnitgeluud
As a key component of BCMlsquos Mongolian website articles from the Newslsquo section and the
government website Open-Governmentmn are regularly updated
S Oyun Minister of Environment and Green Development presentation at BCM monthly meeting on
May 27 added to Mongolian website bcmongoliaorgmnилтгэлүүд
- Байгаль орчин ногоон хөгжлийн сайд СОюун Байгаль орчин ногоон хөгжлийн шинэчлэлийн
бодлого үйл ажиллагаа МБЗ-ийн сарын уулзалт 5 сарын 27 2013
___________________________________________
ENGLISH WEBSITE PRESENTATIONS MONGOLIA REPORTS bdquoINTERVIEWSbdquo MONGOLIAN
BUSINESS NEWS‟ bdquoPHOTO GALLERY‟
The following 13 presentations are from the Mongolia Investment Summit- 2013 in Hong Kong
November 18-20
- Regulatory Update Navigating Mongolialsquos legal framework for foreign direct investment
Javkhlanbaatar Sereeter Director General Foreign Investment Regulations and Registration
Department MINISTRY OF ECONOMIC DEVELOPMENT OF MONGOLIA
- Investment keynote Investing into Mongolia in 2013 ndash Where do the opportunities lie James
Passin Co-Founder and Manager FIREBIRD MONGOLIA FUND
- Development keynote Key challenges and opportunities for continued growth in Mongolia
Randolph Koppa President TRADE AND DEVELOPMENT BANK OF MONGOLIA
- Outlining government policies and long-term plans for Mongolialsquos mining sector Amarjargal
Khurelbat Head of International Cooperation Division MINISTRY OF MINING OF MONGOLIA
- From copper to met coal Demand and price outlook and expected impact on Mongolialsquos economy
Ghee Peh Managing Director Metals and Mining Research UBS SECURITIES ASIA
- How Mongolian banks and financial institutions are dealing with the challenges and opportunities
of a fast growing economy Norihiko Kato Chief Executive Officer KHAN BANK
- Update on the Mongolian stock market ndash Impact of the new Securities Law Altai Khangai Chief
Executive Officer MONGOLIAN STOCK EXCHANGE
- From investment banking to trade finance to micro credits to insurance Amartuvshin Hanibal
Managing Director TENGER FINANCIAL GROUP LLC
- Spotlight presentations Showcasing Mongolian investment opportunities Peter Morrow Board
Director ASIA PACIFIC INVESTMENT PARTNERS
- Spotlight presentation Showcasing Mongolian investment opportunities Munkhbat Davaatseren
CEO of Golomt Securities GOLOMT BANK
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources
Batmunkh Batkhuu Chairman SHARYN GOL JSC
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources
Jimmie Wilde Chief Operating Officer BERKH UUL JSC
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources Mona
Forster Executive VP ENTREacuteE GOLD INC
The following two presentations are from the ―ANTI-CORRUPTION LEGISLATIONPOLICY
INTERNATIONAL BEST PRACTICE ON TRANSPARENCY training seminar for businesses in
Ulaanbaatar November 18 2013
-―International business standard on transparency by Jelena Pesic Director PwC
-―Finlandlsquos best practice on transparency and anti corruption by Dr Pekka Hallberg (as it is
worldlsquos number one) Emeritus President of the Supreme Administrative Court of Finland
The following 15 presentations are from the Mongolia Mining Summit Perth Australia October 29-
31 2013
bull Mongolialsquos Minerals Future and Development by Otgochuluu Ch Director General Department of
strategic policy and planning at Ministry of Mining Mongolia at the Mongolian Mining Summit 2013
Perth Australia Oct 29-31 2013
bull Mongolian Economy Investment OpportunitiesChallenges Jim Dwyer Executive Director
Business Council of Mongolia at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31
2013
bull Oyu Tolgoi Lessons from the Gobi Houston Spencer Vice President Communications and Media
Relations Oyu Tolgoi at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Market dynamics for Mongolian coking coal in the Chinese market Graeme Hancock President
and Chief Representative at Anglo American Mongolia at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Speech by Mr Ariunbold Byamba Deputy Director Erdenes MGL LLC at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull Launching Mining Projects in MongoliandashA Major Contractorlsquos Perspective Eric Erdenebat
Tseveendorj Country Manager Orica Limited at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Investing in a dynamic legislative environment Elisabeth Ellis Managing Partner Ulaanbaatar
Minter Ellison at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Sandvik In Pit Crushing amp Conveying (IPCC) Doug Turnbull Principal Mining Engineer Sandvik
Mining Systems at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Ovoot Coking Coal Project David Paull Managing Director Aspire Mining at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull The business of being a third neighbor David Landers General Manager East Asian Growth
Markets at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Nuurst Thermal Coal Project Daniel Rohr Chief Financial Officer Modun Resources Ltd at the
Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Culture matters in building sustainable long-term business relationships Hana Tserenkhand
Byambadash Business Development Consultant AusMon Consulting and Dr Christine Hogan Adjunct
Professor Curtin University Consultant amp Author at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Maximizing Business Benefits from Your IT Investment Brad Skeggs Executive Director COSOL at
the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Presentation by Battsengel Gotov CEO Mongolian Mining Corporation at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull Mongolian Mining Sector Present and Future Developments NAlgaa Executive Director
Mongolian National Mining Association at the Mongolian Mining Summit 2013 Perth Australia Oct
29-31 2013
The ―Mongolia Reports section includes the following
- ―Ministry of Finance of Mongolia 2013 Government Debt Auctions by Bank of Mongolia
- ―Doing Business in Mongolia 2013 Country Commercial Guide for US Companies by US
Embassy
- ―Real Estate Report 2013 by Mongolian Properties
- ―Selected Macroeconomic Indicators November 20 2013 by International Monetary Fund
- ―2013 Second Annual Mongolian CEO Survey from PricewaterhouseCoopers Audit LLC
- ―Selected Macroeconomic Indicators data through October 16 2013 by International Monetary
Fund
- ―IMF Completes 2013 Article IV Mission to Mongolia by International Monetary Fund
The following are added to Interview Section from the Oxford Business Group Mongolia Reports
2013 book
bull B Byambasaikhan Chairman Business Council of Mongolia ―Talk is cheap
bull President Ts Elbegdorj ―Diversifying for growth
bull Jim Dwyer Executive Director Business Council of Mongolia ―Non-mining sectors budding
bull Peter Morrow Chairman American University of Mongolia ―Filling in the blanks
bull N Zoljargal Governor Bank of Mongolia ―Sustainable vision
bull Gansukh Minister of Roads and Transportation ―Accessing new markets
bull J Od President MCS Group ―Building interest
bull B Chuluunbaatar President and CEO of Monnis Group ―Climbing the ranks
bull Cameron McRae President and CEO Oyu Tolgoi ―Sitting on a copper mine
BCMs English website includes the ―Mongolia Business News section where the Open Letter to
Parliament and Government is available for download
BCM continuously posts news stories and analysis of relevance to Mongolia at Mongolian Business
News before they are all put together each week for Fridays weekly NewsWire
The ―Photo Gallery contains photos from the 6th Anniversary BCM Renewal dinner on November
11 2013
BCM Football Cup 2013 pictures are posted to the website - httpbcmongoliaorgenphotos350-
enalbumalbumid=200
The BCM NewsWire will continue to be issued each Friday incorporating items already on the home
page for a consolidated account of the weeklsquos events
SOCIAL NETWORK WITH BCM
BCM LAUNCHES NEW LINKED-IN COMPANY PAGE
The Business Council of Mongolia has launched a new company page on the social networking
website LinkedIn to network its members and followers including small-medium enterprises (SMEs)
The new page will allow BCM to alert followers to the latest news and information critical to their
businesses Memberslsquo businesses will be promoted Additionally BCM plans to deliver monthly
infographics on the latest data as well as videos and other media content as they come The bulk of
the content on the new page will be in Mongolian language to better cater to BCMs Mongolian-
speaking audience and members The following link can direct you to the New BCMs Linked-in page
httpwwwlinkedincomcompanybusiness-council-of-mongoliatrk=company_logo
The Business Council of Mongolia (BCM) has expanded its reach to your favorite social networks
Keep up to date on the latest business deals in Mongolia and how the climate for investment is
improving each day with BCM
Add BCM on Facebook at httpswwwfacebookcomTheBusinessCouncilOfMongolia to read the
latest announcements and comment on events carried in the NewsWire with the community
Hear breaking news and announcements as they happen when you follow BCM on Twitter at
httpstwittercombcmongolia
We have now 2482 fans on our Facebook fans page 1527 connections on LinkedIn network and
835 followers on Twitter
Of course for news information interviews event photos and announcements regarding our
organization visit the official BCM website at httpbcmongoliaorgen
ECONOMIC INDICATORS
INFLATION
Year 2006 60 [source National Statistical Office of Mongolia (NSOM)]
Year 2007 151 [source NSOM]
Year 2008 221 [source NSOM]
Year 2009 42 [source NSOM]
Year 2010 130 [source NSOM]
Year 2011 102 [source NSOM]
November 30 2013 120 [source NSOM]
Year-over-year (y-o-y) nationwide
Note 111 y-o-y Ulaanbaatar city November 30 2013
CENTRAL BANK POLICY LOAN RATE
December 31 2008 975 [source IMF]
March 11 2009 1400 [source IMF]
May 12 2009 1275 [source IMF]
June 12 2009 1150 [source IMF]
September 30 2009 1000 [source IMF]
May 12 2010 1100 [source IMF]
April 28 2011 1150 [source IMF]
August 25 2011 1175 [source IMF]
October 25 2011 1225 [source IMF]
March 19 2012 1275 [source Mongol Bank]
April 18 2012 1325 [source Mongol Bank]
January 25 2013 1250 [source Mongol Bank]
April 8 2013 1150 [source Mongol Bank]
June 25 2013 1050 [source Mongol Bank]
CURRENCY RATES ndash DECEMBER 19 2013
Currency Name Currency Rate
US dollar USD 164138
Euro EUR 224680
Japanese yen JPY 1579
British pound GBP 268874
Hong Kong dollar HKD 21170
Chinese Yuan CNY 27031
Russian Ruble RUB 4981
South Korean won KRW 155
Disclaimer Except for reporting on BCMlsquos activities all information in the BCM NewsWire is
selected from various news sources Opinions are those of the respective news sources
Respondents said the most difficult agencies to work with were the Tax Office Special Inspection
Agency Customs and local authorities ―There may be some optimal time for development for the
future but for today it remains difficult he said
Meanwhile at the household level people reported dramatically less experiences with corruption
with the number of responders who said they had paid bribes falling from a high of 28 percent in
2007 to 8 percent this year He said there were generally positive feelings about the Independent
Agency Against Corruption and the arrests they had made too
D Jigjidmaa investment promotion program manager at the World Banks International Finance
Corp in Mongolia gave the final presentation on investment protections
―Mongolia is not so different from other developing countries especially regarding the political risks
of the last four to five years said Jigjidmaa
She said IFC had been engaged with the Mongolian government since March 2013 to collaborate on
the Investment Law that took effect in November It has also signed a cooperative agreement with
the Ministry of Economic Development to help improve the investment environment This includes
the establishment of a reference guide for complaints made by investors and how government
responded They hope to work closely with the government to improve grievance management and
dispute resolution
―Now were fine-tuning how the mechanism will work Every minister wants control over
investments in the sectors they oversee
The plan she said is to work from January 2014 to the following July to build awareness and a
stakeholder network Afterward they will then benchmark international experiences such as the
improvements made to South Koreas investment environment since 2009 to help direct the
evolution of Mongolias dispute resolution mechanism
BUSINESS
OYU TOLGOI APPROVES 2014 BUDGET
The Oyu Tolgoi LLC board of directors unanimously approved the company program plan and
budget for 2014 The decision was taken at the quarterly board meeting held in Ulaanbaatar from
11 to 12 December
―Itlsquos great to have unanimous board support for the projectlsquos coming year said Craig Kinnell
president and chief executive officer of Oyu Tolgoi ―This is a sign of confidence in the entire
8000-strong Oyu Tolgoi team After safely ramping up production this year welsquore now looking
forward to our first full year of exporting business
Source Turquoise Hill Resources Ltd
OT MINE‟S bdquoPHASE TWO‟ BANK FINANCING PLEDGES EXTENDED
Turquoise Hill Resources Ltd said on Monday that parent Rio Tinto PLC had secured extended
commitments from the banks that have agreed to finance the underground expansion of the Oyu
Tolgoi copper and gold mine The extension to March 31 gives Rio Tinto more time to resolve a
dispute over costs with the government of Mongolia Rio which owns 508 percent of Turquoise Hill
and operates Oyu Tolgoi put the mines more than USD 5 billion expansion on hold in July saying
the Mongolian government wanted parliament to approve the projects financing Mongolia which
will not see its share of Oyu Tolgois profit until Turquoise Hill recovers its costs has complained
that total costs on the first phase were USD 2 billion higher than planned It wants assurances such
overruns will not happen again and hopes to resolve the dispute by early 2014 a government
source told Reuters last month Turquoise Hill which owns 66 percent of Oyu Tolgoi had said in
June that financing commitments would expire Dec 12 The Vancouver-based company announced
a rights offering to raise up to USD 24 billion in November citing the delays at Oyu Tolgoi A
feasibility study for the underground expansion is still on track for the first half of 2014 the
company said on Monday It also confirmed that it expects Oyu Tolgoi to produce 150000 to
175000 tons of copper in concentrates and 700000 to 750000 ounces of gold in concentrates in
2014
Source Reuters
TRAFIGURA AGREES TO OFF-TAKE DEAL FOR OYU TOLGOI MINE
Commodity trader Trafigura has agreed to provide financing for the massive Oyu Tolgoi mine in
exchange for a long-term deal to buy an undisclosed portion of the output it said on Monday
Trafigura which markets a wide range of metals including copper concentrate referred to the off-
take deal in its first fully public annual report since being set up 20 years ago We also provide
finance in exchange for long-term supplies For instance we recently signed an off-take agreement
with Oyu Tolgoi in Mongolia it said giving no further details
Rio Tinto put the mines USD 5 billion expansion on hold in July saying the Mongolian government
wanted Parliament to approve the projects financing Mongolia hoped to resolve the dispute by
early 2014 a government source told Reuters last month Fifteen banks that have agreed to finance
the expansion have told Rio they will extend their commitments which were due to expire at the
end of the year until next March a statement said on Monday Trafigura also said the global copper
market is expected to be broadly in balance next year as low inventories and a recovery in global
growth offset stronger mine output
We dont expect prices to rise markedly but on the other hand with concentrates trading at close
to cost levels for some producing areas a collapse in prices is also unlikely the Trafigura report
said
The benchmark copper price on the London Metal Exchange has shed 83 percent this year weighed
down by more output from new mines such as Oyu Tolgoi and improved operations at many existing
mines The global copper market is expected to widen its surplus next year to 328000 tons from
182000 tons this year analysts polled by Reuters said in October
Source Reuters
OYU TOLGOI TO COOPERATE IN TAVAN TOLGOI POWER PLANT PROJECT
Oyu Tolgoi LLCs board of directors agreed to participate in the Tavan Tolgoi power plant project
following a series of meeting held from 11 to 13 December
The board discussed issues that remain under dispute at the meeting before giving approval of the
2014 budget After the meeting board members announced their plan to cooperate in the Tavan
Tolgoi power plant project Issues regarding involvement and the volume of investment are
expected to be discussed early next year Also discussed was the issue of the underground mine of
Oyu Tolgoi but the board did not come to any conclusion on the matter Both Mongolian and
foreign board members agreed to grant a loan to resolve the funding issue but did not set on a date
of when the loan could be received
Source Montsame
ERDENES TT UNLIKELY TO PAY $160M DEBT TO CHALCO IN 2013 SAYS CEO
Erdenes Tavan Tolgoi LLC will not likely meet its target for paying off debt owed to Aluminum Corp
of China Ltd (Chalco) by the end of this year its chief executive told newspaper Uls Turiin Toim
―To date we have paid off about 60 percent of total debt and the remaining amount is about USD
160 million out of USD 350 million said Erdenes Tavan Tolgoi Chief Executive Officer Yachil
Batsuuri
The state owned coal miner will sell 600000 tons of coal on top of the one million tons of coal
already sold for a net profit of USD 70 million to USD 80 million Batsuuri said A six-month halt in
shipments was the primary factor for delayed payment of total debt owed he said Although
production at Tavan Tolgoi was on target he said the transportation issues prevent it from making
the sales required to fully pay of its debt
―The coal being extracted from the East Tsankhi of the Tavan Tolgoi site is fully devoted to paying
off the Chalco debt of USD 350 million and therefore in order to work benefaction we have been
developing the West Block since July and started to export coal from September this year said
Batsuuri
He said Mongolia had successfully negotiated new terms for coal sales after months of selling its
coal reserves at a below-market rate The current deal is due to expire at the end of 2013 he said
He added that Erdenes Tavan Tolgoi plans to issue shares on international markets in 2015
Source Info Mongolia
RESERVES OF THE TAVAN TOLGOI JSC COAL DEPOSIT INCREASED TWOFOLD
A court ruling has allowed Tavan Tolgoi JSC to expand the size of its operating territory for an
added 70 million tons of reserves
Tavan Tolgoi JSC which operates upon the same coal deposit as Mongolian Mining Corp (MMC) and
Erdenes Tavan Tolgoi (Erdenes TT) saw its total reserves double with the expanded licensed area
Tavan Tolgoi has signed a memorandum of understanding with Chinas Shenhua Group to supply
coking coal for 20 years and will work in cooperation with Erdenes TT MMC and Shenhua for the
construction of a rail line to China
The rail line will connect the Mongolias Gashuun Sukhait port and the Gantsmod port of China
Source Unuudur
SHENHUA TO IMPORT 30-50M TONS OF COKE PER YEAR FROM MONGOLIA
Chinese coal producer Shenhua Group Corp Ltd will import 30 million to 50 million tons of coke
from Mongolia per year in the future
Zhang Guangjun deputy general manager with the Shenhua Science and Technology Research
Institute disclosed at a forum on 4 December that it would import 30 million to 50 million tons of
coke from Mongolia per year in the future Available data shows that the nation imported a total of
about 30 million tons of coke in the first half of this year and in line with industry observers the
import of Shenhua will deliver a strong impact on the domestic coke market
It has taken the group about a decade to gain the exploitation right of a Mongolia-based Tavan
Tolgoi coal mine Policy factors have been the strongest barrier from reaching that goal
Information from the China National Coal Association (CNCA) released on its website at the start of
November shows that it had signed a memorandum of understanding with three Mongolian firms
namely Erdenes Tavan Tolgoi LLC Energy Resources LLC and Tavan Tolgoi JSC on railway
construction cooperation and boosting coal trade And in line with some industry observers this is a
prelude to its success in gaining the exploitation right
Zhang reiterated that its failure to gain the exploitation right had a close tie with foreign
investment policies of Mongolian and so far the government had not even reached a conclusion
internally People in the circle said at the start of October that Mongolia released new policies for
foreign investments recently and according to the policies provided that a state-owned foreign
firm wanted to invest in industries including mining banking communications and news and media
in Mongolia Purchasing a stake exceeding 33 percent in any of these economic sectors by a foreign
state-owned entity requires a nod from concerned Mongolian authorities only at the ministerial
level And this might mean that the threshold for Chinese firms to invest in the Mongolian mining
industry would be lower
Source MENAFN
ERDENET MINING BRINGS MNT 370 BILLION TO STATE BUDGET
Erdenet Mining Co represents 30 percent of government revenues for industry contributing MNT
370 billion to the state budget in the year to December
According to the Erdenet Minings chief executive the amount of MNT 66 billion will go toward the
state by the years end Last year company represented 13 percent of income from taxes 10
percent of gross domestic product (GDP) and 20 percent of total export
Source Zuunii Medee
ASGAT SILVER DEPOSIT TO UNDERGO DEVELOPMENT
The board of Mongolialsquos 51 percent-owned joint venture with Russia Mongolrostsvetmet LLC decided
to begin development of the Asgat silver deposit
Asgat located in northwest Mongolia 1800 kilometers from Ulaanbaatar has a total average ore
reserve of 231 million tons and estimated 246 million ounces of silver The board agreed that the
project is economically viable now that a paved road leading to the development has been
complete The project is owned 51 percent by Erdenes MGL LLC and 49 percent by Russialsquos Rostec
The board agreed to the establishment of a working group to proceed with the next steps for
development
Source Business-Mongoliacom
MIAT TO HIRE FOREIGN-SKILLED MANAGEMENT
The Cabinet of Ministers decided on 14 December to hire a foreign-skilled executive management
team to operate state-owned MIAT Mongolian Airlines
The Cabinet hopes in hiring a foreign management it may produce greater profits increase its
competitiveness ensure greater flight safety and better prepare national staff The Cabinet
relayed orders to the State Property Committee and MIATs representative Council
Source Montsame
STANDARD BANK CONSULTANT DETAINED AMID DEBT DISPUTE
Mongolia has issued a travel ban on a New Zealand national consulting for Standard Bank Group Ltd
amid an escalation in a dispute with a local company over a debt repayment
Chris Bradley was part of a five-person team from Africalsquos biggest lender that visited Ulaanbaatar
last month to seek talks with the government over its USD 131 million in loans to Just Group LLC a
holding company said two people familiar with the matter The people asked not to be named
because they arenlsquot authorized to speak publicly Standard Bank alleges the loans are in default and
filed a lawsuit in July in a London court seeking repayment
Standardlsquos loans were made between 2007 and 2010 to Just Group to fund raw materials supplies
and debt repayments at state-controlled Erdenet Mining Corp and Ulaanbaatar Railways Bradley
said by phone on 2 December that he had been due to depart Mongolia on 29 November but ―is
restricted by the authorities from leaving Bradley said he was advised of his situation by local
police and that he is a suspect in an investigation
―I went in gladly to assist the police and compare notes said Bradley ―We are focusing on the
commercial aspects of this transaction and they are focusing on the criminal aspects The two
although linked are also running in parallel
Mongolia has barred foreign executives from leaving the country during investigations into
companies before Justin Kapla a US citizen and then-president of coal miner SouthGobi Sands
LLC was banned from departing at the end of last year and is still in the country after the nationlsquos
Independent Authority Against Corruption launched a probe into the companylsquos mining licenses
Sharavlamdan Batkhuu Just Grouplsquos controlling shareholder and other companies in the group
have defaulted on loans since 2011 Danjilaa Ganbat director of the banking supervision
department at Mongol Bank the nationlsquos central bank said in July Ganbat made his comments
after Just Grouplsquos Savings Bank Mongolialsquos fifth-largest lender was declared insolvent due to
affiliated companies defaulting on loans Batkhuu and Just Group are among the defendants in the
Standard Bank lawsuit
Standard Bank wasnlsquot able to arrange any meetings with Mongolialsquos government to resolve the debt
dispute the people familiar with the matter said Bradley was the Mongolia specialist on the team
and the only member not directly employed by the bank said one Bradley said he worked as an
employee of Standard Bank from 1999 to 2001 and has consulted on a contract basis for the bank
over the last nine years including five visits to Mongolia since May ―to engage with the government
on our issues the debt recovery
Cabinet Secretary Saikhanbileg Chimed said by e-mail on 3 December that he thinks itlsquos better to
solve the debt dispute out of court and planned to ―push appropriate people to respond
Bradley 50 is a native of Hokitika New Zealand ―In the absence of a New Zealand consulate the
British Embassy is working on behalf of Bradleylsquos consular welfare said Julian Pearson Deputy
Head of Mission at the British Embassy in Ulaanbaatar on 2 December
Source Bloomberg
KHAN BANK OPENS EXPRESS BANKING CENTER
Khan Bank LLC opened an express banking center on 10 December
The Express Banking Center services include a new ATM to deposit cash an E-Corner which allows
customers to make transfers between Khan Bank accounts review accounts through Internet
banking and receive account slips They can also be used to obtain foreign remittances
The Banking Centers are located at the State and Ulaanbaatar department stores on Peace Avenue
and will be open 24 hours every day
Source Khan Bank LLC
ERDENE ANNOUNCES NEW GOLD DISCOVERY AT ALTAN NAR
Erdene Resource Development Corp reported significant gold and silver results from the second
phase of trenching completed during the fourth quarter at its Altan Nar gold-polymetallic project
Results have been received for an additional 11 of the 28 trenches completed The trenching
program was designed to test 10 distinct mineralized zones across the 55-kilometer-long Altan Nar
target area Samples from the final thirteen trenches over the central Altan Nar prospect area have
been submitted to SGS laboratories with results anticipated during first quarter 2014
Highlights include the discovery of a new high-grade gold mineralized zone one kilometer north of
Discovery Zone (Maggie prospect) Significant gold mineralization (Northbow prospect) identified in
the northern portion of a previously untested 700-meter-long anomaly that widens and intensifies
to the south and gold and base metal mineralized zones confirmed at northwestern and
southeastern extent of the 55-kilometer-long Altan Nar target area (Northwest and Far South
prospects) All 11 trenches testing 6 distinct targets returned highly anomalous precious and base
metal mineralization
Source Erdene Resource Development Corp
XANADU MINES FORMS JV FOR COPPER EXPLORATION IN MONGOLIA
Xanadu Mines Ltd has established a joint venture company Mongol Metals with Ganbayar
Lkhagvasuren director and substantial shareholder of Xanadu to execute Xanadulsquos business and
copper exploration strategies
Xanadu recently returned broad copper and gold values from a 780-meter trenching program to test
coincident geophysical and geochemical anomalies at its Oyut Ulaan copper-gold porphyry project
in Mongolia The program has defined three near-surface mineralized porphyry centers with results
up to 85 meters at 075 percent copper with 054 grams per ton gold including 36 meters at 149
percent copper and 102 grams per ton gold The trenching was performed concurrently with the
recent drilling at the Diorite Hill prospect and drill testing of the new targets is scheduled within
the next phase of drilling
Source Proactive Investors
JATENERGY TESTS PROVE CONVERSION OF MONGOLIAN BROWN COAL TO SEMI-COKING COAL
Jatenergy Ltd is on track to pursue its Mongolian coal upgrading plans after testing proved that
coal from the country were highly suitable for conversion using Coal Plus technology
This sets the stage for the immediate start of its investment strategy with Monrospromugoli LLC
which could result in a USD 2 million upfront technology payment and ongoing annual royalties of
USD 176 million The test results had demonstrated that the high moisture high volatile low
calorific Mongolian brown coal can be easily converted into semi-coking coal using Coal Plus
―This report independently verifies that Coal Plus has potential in Mongolia executive chairman
Tony Crimmins said He added ―As the technology is already commercialized and in use in 5
locations in China for over 4 years we see high probability of financing this project in Mongolia
The confirmation that Mongolian brown coal is suited for conversion using Coal Plus into higher
value products paves the way for Jatenergylsquos agreement with Monrospromugoli to go ahead
Source Proactive Investors
SOUTHGOBI RESOURCES ANNOUNCES RESTATED FINANCIAL AND OPERATING RESULTS
SouthGobi Resources Ltd released its regular update on restated financial statements and
management discussion and analysis presentation In the consolidated financial statements for the
year ended 31 December 2012 the restated financial position at 31 December 2012 31 December
2011 and 1 January 2011 the results of operations for the years ended 31 December 2012 and 31
December 2011 and the statement of changes in equity and statement of cash flows for the years
ended 31 December 2012 and 31 December 2011
Following the correction in SouthGobilsquos point of revenue recognition revenues from affected coal
sales contracts are recognized in later periods than previously reported and some revenue has been
reported after 31 December 2012 as not all contracted coal has been collected by customers
During the periods from 2010 to 31 December 2012 trade and other receivables have been adjusted
lower and deferred revenue recognized to reflect revenue being recorded in later periods than
previously reported The inventory balance increased over the same period to reflect higher coal
inventory stockpile balances Prepaid expenses also increased with a corresponding decrease in
trade and other payables as coal sales royalty expenses were recognized in late r periods than
previously reported
The consolidated financial statements auditorslsquo reports and related financial information for the
affected periods contained in SouthGobilsquos filings filed prior to 14 November 2013 should no longer
be relied upon The restatements do not result in a change in cash at the end of any period The
statement of cash flows as reported does not change except for the reclassification of various items
within operating activities
Separately on 19 November 2013 SouthGobi paid USD 81 million in cash to the China Investment
Corporation in accordance with the convertible debenture agreement The amount related to the
64 percent per year cash interest payment and is payable semi-annually Further on 21 November
2013 SouthGobi issued 35 million common shares to China Investment
Source SouthGobi Resources Ltd
MSE CANCELS KHANSH INVEST‟S BROKERAGE LICENSES
The Mongolian Stock Exchange has invalidated the brokerage and securities dealing licenses of
Khansh Invest LLC on 4 December
―The companylsquos clients will be transferred to other brokerage firms that conduct professional
services in the market with licenses for broker-dealer related issues and it shall be governed
according to the concerning jurisdiction and regulations said the Source
Source Mongolian Stock Exchange
MNU PARTNERS WITH UNIVERSITY OF CALIFORNIA FOR RENEWABLE ENERGY
Mongolian National University (MNU) and the University of California announced 13 December the
signing of a memorandum of understanding to conduct high temperature solar thermal technology
research in Mongolia in 2014
Under the terms of the agreement the Mongolian Innovation and Technology Centre at MNU will
have a 100-kilowatt high-temperature non-tracking solar array on their campus that is not only the
first and the largest solar array of its kind in Mongolia but anywhere in the world
―We are delighted to be working with the University of California on this great project and we
particularly excited to make this announcement on the 15th Anniversary of MNU said MNU
Founder and Chairman Munkhbat Lkhagvasuren ―The thermal solar array will be installed
monitored and evaluated by our MNU Engineering Department under the advice and instruction of
the faculty of the University of California Munkhbat said
The technology was developed by University of Californialsquos solar director and professor Roland
Winston who is also a world-renowned scientist in the solar research field Winstonlsquos technology is
already operational at the University of California Purdue University and the Gas Institute of
Chicago although it has not yet been released for commercial deployment anywhere in the world
―My goal in working with MNU is to provide the technology and the staff he said ―Ultimately it
is the Mongolian engineering students that will be required to install and operate these systems as
well as determine the scope of the application beyond simply providing a high temperature heat
source
Source Mongolian National University
MCDONALDS INTERNATIONAL CALLS FOR FRANCHISEE TO POSSIBLY OPEN IN MONGOLIA
McDonalds International sent out a press release on December 10 calling for partners to approach
the company to open its first burger outlets in Mongolia
―We have not set a firm date for the development of McDonalds restaurants in Mongolia In the
future we may take steps to open McDonalds restaurants in Mongolia and if we seek a franchisee to
represent us the person will have the following characteristics
―High integrity business experience in the market history of success ability to work well with a
franchisor ability to complete a training program that can take about nine months willingness to
devote full time to the McDonalds restaurant business retail experience knowledge of real estate
market significant capital
The press release ends by inviting candidates to apply for a franchise
Source BNE
JAPANESE ldquoSUN RICE PLANT OPENS IN MONGOLIA
An opening ceremony for Mongolialsquos Technik Import LLC and Japanlsquos Niigata Kubota ―Sun Rice
factory in Ulaanbaatar on December 10
Niigata brown rice will be imported sorted and packed at the Ulaanbaatar factory which has a
daily capacity for the production of two to three tons of packaged rice The plant is equipped with
fully automated machines from Kubota The rice will begin sale in the domestic markets at MNT
5000 to MNT 7000 per kilogram
―Mongolia has been receiving rice from the people of Japan under aid program for many years
said Deputy Minister B Tsogtgerel ―During the latter event I and Ambassador Takenori Shimizu
were discussing that the period of receiving rice as aid is over and now the time of reciprocal
assistance has come and the ―Sun Rice factory is a sample of joint cooperation to produce the
world known quality in Mongolia
Niigata Prefecture is the second largest producer of rice in Japan after Hokkaido
Source Info Mongolia
MNBC MIGRATES TO DVB-T2 WITH THOMSON VIDEO NETWORKS
Video Mongolia Digital Broadcasting (MNBC) has launched Mongolias first ever DVB-T2 service using
head-end systems from Thomson Video Networks
Launched in 2007 MNBC was Mongolias first digital terrestrial TV network operator and will now be
able to broadcast up to 120 digital TV channels over five UHF transponders to maintain its position
and compete with Mongolias national satellite operator Working with systems integrator Digital
Horizon MNBC has deployed TVNs Vibe EM1000 multi-channel SD encoders and NetProcessor 9030
multiplexer and video processor with an embedded DVB-T2 gateway
Source Rapid TV News
CHINESE FIRM NEGOTIATING TO ACQUIRE JUST AGRO
A Chinese company is in negotiations to purchase Mongolias only meat exporter said a company
source
Just Agro LLC which owns 11 meat companies with the Makh Market brand is reportedly the subject
of negotiations for sale to a Chinese entity said the source who asked not to be named The Just
Agro company provides 40 percent of meat processing and 30 percent of storage in Mongolia and is
the only meat exporter in Mongolia
Last July authorities revealed that Just Grouplsquos Sh Batkhuu falsified signatures of the State
Property Committee and Erdenet Mining Cos director to receive USD 131 million in loans from
South Africas Standard Bank putting up the Erdenet Mine as collateral for the credit After Just
Group was dissolved the central bank took over all its assets including Just Agro
Source Unuudur
MONGOL TV EXPOSES MEDIA CORRUPTION WITH FAKE MCDONALDS STORY
An investigative news show on Mongol TV planted a false news story last week with all 9 of
Mongolias major local media outlets about McDonalds opening a branch in the country The
exercise was undertaken to expose corruption and the rampant practice of paid-for journalism in
Mongolia Mongol TV said
The appearance of a Mr P Rank promising McMutton burgers and goat milk-shakes in the
official press release set off no alarms at the media networks which took between USD 150 and
USD 700 from an undercover journalist to run the story on their websites on the front page of three
newspapers and on TV news on three networks including the local public broadcaster
―Soon the first letter our children learn will be Mlsquo Mr P Rank says with a golden shining smile
according to the fake release which also claimed McDonalds was to be sponsored by Mongolialsquos
Health Ministry and sold in schools all over the country
After Mongol TV unveiled the sting it invited representatives of the 9 duped media organizations to
explain their actions though all reportedly declined
Source Hollywood Reporter
EBRD ADOPTS NEW STRATEGY FOR ENERGY AND NATURAL RESOURCES SECTOR
The European Bank for Reconstruction and Development (EBRD) has adopted a new strategy that
will guide its investments in the energy and natural resources sector for the next five years EBRD
press release reported Tuesday
The bank sets out a commitment to helping its countries of operations move toward a sustainable
energy future The EBRD region which stretches from Morocco to Mongolia is faced with a
challenge of providing sustainable secure and affordable energy The energy strategy identifies
energy efficiency as the first and best response to this challenge
―What the EBRD brings to this challenge is our focus on structural reform said EBRD Managing
Director for Energy and Natural Resources Riccardo Puliti ―We have learnt from our work that
when properly channeled market forces can be harnessed to make energy sectors more sustainable
- environmentally economically and politically
The bank intends building on its well-established support for the Extractive Industries Transparency
Initiative by requiring clients operating in the extractive industries sector to disclose subsoil
contracts and licenses as well as all payments they make to local and national authorities
In the case of coal-fired generation the strategy supports the move to lower-carbon fuel sources in
response to the challenge of climate change In alignment with other international financial
institutions the EBRD will not finance any coal-fired power generation projects except in rare and
exceptional circumstances in which there is no feasible alternative energy source
The strategy also reinforces the EBRDs growing support for renewable energy which will include
financing both energy-generating capacity and key infrastructure such as transmission lines and
backup generation
―We have also developed and invested in the first wind farm in Mongolia - where it was also the
first new energy generator in 30 years said Puliti
Source Trend News Agency
SUSTAINABILITY HOSTS SESA WORKSHOP
Sustainability East Asia LLC organized a National Validation Workshop on 10 December as part of its
responsibilities for establishing a strategic environment and social assessment (SESA)
Participants from across the country arrived to represent government the private sector and non-
government organizations to discuss the proposed SESA The next step will be to assess mining
growth options and identify at least three likely growth scenarios which mining could bring to
Mongolia Afterward the SESA team will evaluate the environmental and social issues that are likely
to arise as a consequence of each scenario
The Mining Sector Institutional Strengthening Technical Assistance Project commissioned
Sustainability to conduct a strategic environmental and social assessment for Mongolias mining
sector
Sustainability will also perform a gap analysis of the legal regulatory and institutional capacity to
deal with each possible scenario An action plan is expected for SESA by summer 2014
Source Sustainability East Asia LLC
UB REGISTERS MATERNITY HOSPITAL NO 1
The new building annex for Maternity Hospital No 1 was registered as capital city property
13 December at a regular session of the Ulaanbaatar Citizens Council This maternity hospital
building was built with financing from Boroo Gold and was presented as a gift to the people of
Mongolia With a capacity to receive 150 mothers and children its total cost was MNT 92 billion It
includes the hospital building of 1169 square meters external heating clean water and sewer
water pipelines a diesel station an asphalt road a pedestrian walkway outdoor vegetation and an
external LED sign
This new building was commissioned 15 June The new annex has one vacuum operation room and
two standard operating rooms on the fifth floor 100 beds for women and 50 beds for infants on the
third and fourth floors paraclinical and sanitation units a pharmacy a conference room and
training rooms on the second floor an ambulatory section and reception on the first floor and staff
cafeteria closets washrooms and a disinfection chamber in the basement
Source Centerra Gold Inc Newsmn
RIO TINTO‟S SAM WALSH DIGS IN FOR THE LONG HAUL
Sam Walsh wants to remain as Rio Tinto PLClsquos chief executive beyond the end of his contract and
has told the minerlsquos board he will not be ready to retire in 2015
―I am there if they want me said Walsh ―Likewise if therelsquos someone else who can come in and
take what Ilsquove done to the next level thatlsquos fine too
The Australian 63 later this month replaced Tom Albanese 11 months ago after Rio decried
―unacceptable writedowns on its coal business in Mozambique Walsh says investors support his
strategy to cut costs and sell non-core assets
Walsh said he has explored selling all of Riolsquos aluminum business this year in what would be a
signature reversal of Albaneselsquos costly purchase of Alcan in 2007 But he says no offers have been
good enough while the business is not generating enough cash for an initial public share offering or
spin-off to Riolsquos shareholders Walsh has also been frustrated in attempts to sell Riolsquos diamonds
business
―Who would thank me if I sold something under value just to get a tick At the end of the day you
have to be pragmatic about things he said Offers ―werenlsquot in the bailiwick of where we thought
they should be
The Alcan deal epitomized Riolsquos poor recent dealmaking and Walsh admits the company had
―relaxed some of the controls it should have had Rio staff has now ―refound their mojo he said
On operating costs which Rio has said it will cut USD 3 billion next year he said ―There is rolling
momentum and thatlsquos important
Source Financial Times
KYRGYZSTAN FILES ECOLOGY DAMAGE LAWSUIT AGAINST CENTERRA
Kyrgyzstan is suing Canadas Centerra Gold Inc for 15 billion soms (USD 304 million) over what the
government says is ecological damage marking a new twist in a bitter row with the investor running
the largest Kyrgyz gold mine
The state environmental protection and forestry agency said in a statement that it had filed the
lawsuit at an economic court in the Kyrgyz capital Bishkek saying Centerra Gold had ignored its
earlier request for voluntary compensation It said the alleged ecological damage included
emissions of pollutants and waste dumps It said its claim referred to the companys operations
between 1996 and 2011
Centerra had said earlier that it viewed the governments claim as exaggerated and unfounded
The company disagrees with these charges and plans to give explanations on this matter in the
nearest time said a spokesman for the Kumtor Operating Company (KOC) the Centerra subsidiary
that runs the Kumtor mine in the Tien Shan mountains
The Toronto-listed miner which also owns the Boroo gold mine in Mongolia is already under
pressure from the Kyrgyz parliament which demands the state hold 67 percent in a proposed joint
venture to run the mine In September the government and Centerra Gold signed a memorandum
of understanding paving the way for Kyrgyzstan to swap its 327 percent stake in the Canadian firm
for 50 percent in a venture that would own Kumtor But in October the legislature voted to tear up
the document and seek control over the planned venture It gave the cabinet until 23 December to
report on its talks with Centerra Gold on setting up the venture Pearson said Centerra is having
constructive dialogue with the Kyrgyz government
Source Reuters
ECONOMY
FITCH AFFIRMS TWO MONGOLIAN BANKS AT B REVISES OUTLOOKS TO bdquoNEGATIVE‟
Fitch Ratings on 16 December revised the outlook on the Long-Term Issuer Default Ratings (IDRs) of
Khan Bank LLC and XacBank LLC to ―Negative from ―Stable At the same time the agency
affirmed the two Mongolian banks IDRs and viability ratings at B and b
The revision of the outlooks on both banks IDRs reflects weakening operating conditions as
indicated by the change in the Outlook for the Mongolian sovereign (B+) to Negative from Stable on
13 December The sovereigns outlook was revised due to mounting risks to the countrys economic
and financial stability Ratings on the two banks could be downgraded if pressures on asset quality
and liquidity intensify Persistent local-currency depreciation would reduce borrowers repayment
capacity and could lead to accelerated deposit withdrawals given the countrys high level of
dollarization
The banks ratings also remain sensitive to the withdrawal of credit stimulus as this could result in
asset deterioration on slowing economic growth or higher inflation Further decline in the
governments international reserves could also trigger a negative rating action as the banks
currency-related risk is counterbalanced by the authorities swap facility and unlimited foreign-
currency conversion Both banks ratings are also sensitive to any changes in their steady access to
capital from private-sector owners
Khan Banks Support Rating and Support Rating Floor (SRF) reflect Fitchs view that as the largest
bank in Mongolia it would be likely to receive state support in case of need However the
Mongolian sovereigns ability to provide timely support to the banking system remains limited as
underlined by its IDR of B+ A downgrade of the sovereign ratings would point to weakening in the
Mongolian governments ability to provide timely support to the banking system which put negative
rating pressure on Khan Banks SR and SRF In contrast Fitch expects XacBanks SR and SRF of 5B-
to be maintained even if the sovereigns rating is downgraded to B This is because the current SR
and SRF already reflect the agencys view that support from the sovereign in case of need cannot
be relied upon
The rating actions are as follows Khan Bank Long-Term Foreign-Currency IDR affirmed at B
Outlook revised to Negative from Stable Short-Term Foreign-Currency IDR affirmed at B Long-
Term Local-Currency IDR affirmed at B Outlook revised to Negative from Stable Viability Rating
affirmed at b Support Rating affirmed at 4 Support Rating Floor affirmed at B XacBank Long-
Term Foreign-Currency IDR affirmed at B Outlook revised to Negative from Stable Short-Term
Foreign-Currency IDR affirmed at B Long-Term Local-Currency IDR affirmed at B Outlook revised
to Negative from Stable Viability Rating affirmed at b Support Rating affirmed at 5 Support
Rating Floor affirmed at B-
Source Fitch Ratings
MONGOLIA SCORE FALLS ON POLITICAL RISKS INDEX FOR MINING INVESTMENT
An annual survey by Behre Dolbear of political risks saw Mongolia decline 5 points in an index
ranking Mongolia 19th out of 25 countries
Mongolia this year received a score of 269 compared with 32 last year Leading the countries
surveyed was Australia down 07 points from last year Russia with a total score of 171 compared
with 16 last year was the lowest ranking
The 25 countries considered in this yearlsquos survey are ranked based on seven criteria
-the countrylsquos economic system
-the countrylsquos political system
-the degree of social issues affecting mining in the country
-delays in receiving permits due to bureaucratic and other issues
-the degree of corruption prevalent in the country
-the stability of the countrylsquos currency and
-the competitiveness of the countrylsquos tax policy
Each criterion is rated on a qualitative scale from one (worst) to 10 (best) that reflects conditions
that promote investment growth in the mining sector The maximum score attainable for a country
is 70 points
Source Behre Dolbear Group
MONGOLIA LOOKS FOR SECOND CHANCE WITH FOREIGN INVESTORS
Saruul Ganbaatar the deputy head of Mongolias stock exchange hopes the countrys days of
interventionist economic policies are over and new laws ensuring foreign investors access to the
frontier markets industries will bring back sorely needed cash
Ganbaatar 32 who cut his investment teeth in Chicagos financial houses after graduating from
Loyola University is careful not to over-promise on what the stock market can deliver in 2014 and
beyond in terms of new listings or overall growth In October a law was passed easing ownership
restrictions for private companies to invest in the strategic industries A Securities Markets Law
coming into effect 1 January 2014 is expected to provide the key ingredient to attract deep
pocketed institutional investors such as mutual funds to invest
This really is the missing ingredient said Ganbaatar who has been traveling the globe promoting
the changes in the laws to global investors for the past two weeks
The stock index fell 19 percent in 2012 and year-to-date is down 115 percent although it did start
to climb with the newly passed laws On 1 January the new Securities Markets Law will allow
Mongolias commercial banks to offer custodial banking services Custodial banks serve as safeguards
for a firm or individuals financial assets playing a critical role in the final settlement of market
transactions Total market capitalization now is between USD 900 million and USD 1 billion Dont
expect the number of new listings to mushroom There may instead be a cull of companies Fifty-
five to 60 of them many of which have not traded in years are being reviewed for potential
delisting
The Mongolian Stock Exchange 100 percent state-owned is perhaps itself a candidate for
privatization It has been in a strategic partnership with the London Stock Exchange for two and a
half years
They have the right of first refusal he said
Source Reuters
CPI INCREASES TO 12 PERCENT YEAR-OVER-YEAR IN NOVEMBER
The National Statistical Office reported a 12 percent increase in the national consumer price index
(CPI) in November year-over-year
The CPI growth which also in November grew 13 percent from the previous month was explained
by a 14 percent increase in food prices and non-alcoholic beverages 23 percent for clothing
footwear and fabrics and 07 percent for housing water electricity and fuels
Source Info Mongolia
GROWTH SEEN IN EXPORT OF PRECIOUS METALS
The export value of precious metals grew 114 percent in November from the month before and 63
percent from the same period in 2012 according to the National Statistical Office
Exports totaled USD 38 billion in the year to December while imports grew to USD 58 billion The
foreign trade balance saw a deficit of USD 2 billion November saw exports of USD 381 million and
imports of USD 514 million with exports and imports in decline between July and November The
value of export products for the first 11 months was USD 11 billion Despite the gain in precious
metal exports exported minerals which represented 81 percent of all exports in the year to
November fell 129 percent from the year before
Source Zuunii Medee
MNT 788 BILLION WILL BE ENTERED INTO THE STABILIZATION FUND
The Stabilization Fund is set to collect MNT 49 billion this year and MNT 298 billion next
The Stabilization Fund was established to collect surplus revenue in years of economic gains from
the mining sector to cushion possible annual losses during economic downturns and weak
commodity demand Any gain in the price for gold and coal next year will also be reflected in
allotments to the fund
Source Zuunii Medee
ECONOMIC DEVELOPMENT MINISTRY PLANS TO PUT 81 OF BUDGET INTO CONSTRUCTION
The Economic Development Ministry plans to invest MNT 814 percent of its total investment budget
into construction
Beginning 1 January 2014 the ministry will provide MNT 9303 in loans toward the construction
sector The ministry will spend 39 percent of its budget for reconstruction and repair 10 percent
for the purchase of new techniques and technical equipment 3996 percent for infrastructure
2743 percent for education and health 636 percent for employment and agriculture and 2926
percent for other sectors of the economy
Projects include the construction of 30 clinics 27 cultural centers 6831 km of paved roads and
1032 m length of bridges Mongolia has received USD 55 billion in aid in the last two decades of
which 55 percent was in the form of low rate loans and 45 percent as non-repayable grants for
investments into agriculture infrastructure power and health sectors
Economic growth since 2011 has allowed Mongolia less aid than in the past The government has
now turned its focus on providing funding with concession agreements to large scale projects such
as the Nariin Sukhait-Shivee paved road and the power station at Mogoin gol Other projects include
Power Plant No 5 the Altanbulag-Ulaanbaatar-Zamyn Uud highway the Tavan Tolgoi- Khanbogd-
Khangi road and the Tuul Songino water reservoir complex
Source Zuunii Medee
TT POWER PLANT MAY NEED CONCLUSION TO OT DISPUTE SAYS DIRECTOR
Uninterrupted development of the Tavan Tolgoi power plant will ride on the outcome of disputes
concerning Oyu Tolgois underground mine said the director of the plant
―One of the main risks is the issue of a main user Enkhsaikhan said ―The key buyer of the power
from the TT Power Plant is OT Due to the uncertainty over phase twolsquo and unresolved matters
with the government of Mongolia OT is not regarded as a reliable buyer on a stand-alone basis
He added that the power company may request a guarantee from Oyu Tolgoi
A consortium that includes Koreas Posco Energy and Daewoo Engineering and Construction GDF
Suez Energy Asia Japans Marubeni Corp and Kansai Electric Power in March was selected for
development of the plant which has a preliminary estimate cost of USD 1 billion Those expenses
include installation of 150 kilometers of electric lines between Tavan Tolgoi and Oyu Tolgoi The
consortium will be expected to raise 30 percent of the cost itself while the remaining 70 percent
will come from bank loans However the uncertainty surrounding the Oyu Tolgoi copper mine could
create more hold ups
Source Zuunii Medee
CABINET TO CONCLUDE CONCESSION ON ALTANBULAG-ZAMYN UUD HIGHWAY
The Cabinet of Ministers ordered ministers to conclude a concession agreement for the Altanbulag-
Ulaanbaatar-Zamyn-Uud highway
The government is planning to establish the concession contract with the Chinggis Land
Development Group which according to the agreement shall have exclusive rights to construction
ownership and transfer of property using its own financing The concessionaire shall complete the
construction within three years after that shall operate the facility for another 30 years before
transferring the ownership to the Government
If Chinggis Land accepts these terms it would be responsible for developing a feasibility study and
blueprint of the project to be approved by the relevant ministries before concluding a financing
agreement The concession agreement will come into effect after the Chinggis Land Development
Group obtains a financing agreement for USD 1 billion from a commercial bank of Mongolia
The government will be responsible for freeing up the land where the highway is planned while the
Chinggis Land would cover the costs for doing so
Source Montsame
MNT 116 BILLION WILL BE SPENT FOR BUILDING EMERGENCY ALARMS IN UB
The National Emergency Management Agency has installed an emergency alarm system in 60
locations of Ulaanbaatar The alarm will alert citizens to natural disasters such as earthquakes
The alarms will be controlled from a center by microwave radios and satellite communication
devices
Source Udriin Sonin
EIU CLARIFIES EXTENT OF OFFICIAL ESTIMATES OF OIL SHALE RESERVES
The latest research from Mongolias mining ministry gives a clearer picture of oil shales
development potential in the coming years Although Mongolia has long been known to have
substantial oil shale deposits previous estimates were extrapolated from rudimentary surveys
conducted in the 1990s and thus left the actual reserves open to speculation
Plans to develop the industry took shape only in April 2013 when an American company Genie
Energy signed a five-year deal with the Petroleum Authority of Mongolia to explore oil shale
reserves in central Mongolia Genie also plans to build a USD 4 billion processing factory in Tuv
Aimag According to government projections the processing plant will generate USD 850 million of
tax revenue annually Aside from the economic benefits of the project domestic fuel sources could
help Mongolia to improve its energy security by loosening the countrys dependence on its powerful
neighbors At present 90 percent of Mongolias oil and related products come from Russia with most
of the remaining amount being imported from China
Yet the benefits of large-scale oil shale extraction are not as clear as they might seem at first
glance Most importantly Mongolias oil shale resources should not be confused with the shale oil
phenomenon that is currently sweeping the United States Oil shale (also called kerogen) is more
expensive to extract than shale oil and carries greater environmental costs In particular oil shale
requires a large amount of water to process which could be a risky proposition in Mongolia where
hydrological resources are already under strain Although other countriesmdashEstonia in particularmdashuse
oil shale as a substitute for coal extracting liquid fuel from the shale is a complex and relatively
untested process
Genie Energys progress on the project seems more substantial than that of comparable coal
liquefaction projects that have faltered in the region However environmental technical and
political limitations suggest that Mongolias overall dependence on foreign fuel will not change
significantly in the foreseeable future
―We remain doubtful that oil shale will play a significant role in Mongolia in the next two years so
our economic growth and trade forecasts will remain unchanged said the Source
Source Economist Intelligence Unit
MONGOLIA AND THE THREAT OF THE RESOURCE CURSE
Mongolia is at a crossroads while investors complain the government is dragging its feet on allowing
miners to start digging it is crucial that it get things right at the early stages of the resources
boom
Mongolias challenge will soon be the worlds says Richard Dobbs and his team at McKinsey in a
report predicting a USD 17 trillion investment bonanza by 2030 to keep up with demand for oil gas
and other materials In 1995 about 58 countries depended on resources for the bulk of their output
and wealth In 2011 that number had risen to 81 By 2030 roughly half of the worlds economies
will essentially become giant filling stations for developing superpowers from China to South Africa
That means that instead of the world moving toward greater transparency democracy and freer
markets we could see rising corruption levels and even greater income inequality
Economies with natural-resource endowments have a huge opportunity to transform their
prospects but history suggests that they could all too easily squander the windfall says Dobbs
director of the McKinsey Global Institute in London
The world would be wise to take steps today to break this cycle McKinsey recommends several
While not terribly original they include strengthening public institutions and good governance
building decent infrastructure boosting national competitiveness promoting sound fiscal policy
making and spending the windfall wisely while engaging in forward-looking economic and social
planning The trouble is that political will and integrity is often the first casualty once the minerals
start flowing out and the spoils come pouring in
Mongolia is at that very crossroads today Investors complain the government is dragging its feet on
allowing miners to start digging But its more important to get things right at the early stages of
the resources boom That means acting now to create the institutions and regulatory frameworks
needed to ensure revenue transparencymdashknowing exactly how much money is being dug out the
ground and where its going Why not set up a sovereign-wealth fund to save for Mongolias future
When the stakes are that high a little patience can go a long way
Source Bloomberg
MONGOLIAS NOMADS WARM TO SOLAR POWER
In Mongolia often known as the land of the blue skies the sun shines for 250 days on average each
year It beats down on the sparse plains and on the Gobi desert that spans the countrys southern
border with China
It shines even during the frigid winter days on the hundreds of thousands of nomads who still roam
the steppes herding animals and living in dome-like tents calling gers About 800000 of Mongolias
28 million inhabitants still live the traditional nomadic lifestyle that has remained largely
unchanged for generations Apart from the addition of motorbikes the occasional petrol generator
and a passing trade from intrepid tourists wanting to stay in a ger for the night life is almost the
same as that of many nomads grandparents and great-grandparents Almost but not exactly
Dotted across the steppes glints of light can be seen as the sun bounces off the solar panels that
have been installed on the sides of gers made of felt and yaks wool At the start of this millennium
Mongolias herders and nomads had little or no access to modern electric power and its potential
benefits But as of 2013 thanks to a concerted push by the Mongolian government almost 70
percent of nomadic people have access to electricity Bor a herder who mainly travels around
western Mongolias Arkhangai province is one of the people whose family benefits from portable
solar home systems (SHS)
We use it for generating the power for lighting in the ger charging phones we can also generate a
fridge to keep food longer and we can run a television That is very useful for us because we can
get the most recent weather forecast which is important for our work and keeping our animals
safe Before we had power it was very difficult Now it is almost like living in the city
The ability to charge mobile phones is also important for the herders who often have children
staying at boarding schools Access to electricity also allows families to contact emergency health-
care and doctors for advice without having to make the often arduous journey to the nearest village
or town
The solar systems were distributed and installed with the help of the World Bank after the
Mongolian governments National 100000 Solar Ger Electrification Program ran into difficulties A
World Bank report Capturing the Sun in the Land of the Blue Sky describes the difficulties faced by
the Mongolian government on its ambitious project
By 2005 five years into the plan 30000 families had been kitted out with an SHS but then the
program began to stagnateThe government of Mongolia recognized that considerably more effort
was necessary not only to keep the program on track but to scale-up implementation in order to
achieve the National 100000 Solar Ger Electrification Program target the report said In 2006 the
World Bank agreed to cover half of the initial outlay costs for each family as well as after-sales
maintenance with 50 centers set up across the country including at least one in each of its 21
provinces so that the herders would not have to travel to Ulaanbaatar every time the solar panels
needed maintenance
The SHS project also offers environmental benefits to a country where the ratio of carbon dioxide
emissions to economic output is ten times higher than the world average because of the increase in
mining over the past decade as the true extent of Mongolias mineral wealth became apparent The
solar systems are slowly replacing the diesel generators used by some nomads as a means of
generating power although they are still using stoves for heating burning wood coal and dung
throughout the year
Source Al Jazeera
IRON-ORE AND COAL PRICES GO SEPARATE WAYS
Prices of the key ingredients in steel productionmdashiron ore and coking coalmdashare moving along sharply
different paths as mining companies resist cutting coal output despite the market being awash with
the raw material
While iron-ore prices have risen 22 percent since May coking coal is still searching for a rebound
Coking-coal prices are off more than 4 percent over the same period China is on course for another
year of record steel production with supply directed to the construction of high-rise apartment
buildings the manufacture of luxury cars and other uses
There is simply too much coal on the market the International Energy Agency said in a report this
week
Shipments of steelmaking coal from Australiamdashthe worlds biggest exporter of the commoditymdashare
forecast by the government to rise to 178 million tons in 2015 from 145 million tons last year Most
goes to China which accounts for 60 percent of global demand In contrast global iron-ore
exporters are struggling to increase output in areas other than Australias remote Pilbara region
supporting prices of that commodity The spot price of iron ore climbed to nearly USD 140 a ton
earlier this month a four-month high Prices have since eased a bit to USD 13430 a ton but
remain well above the consensus forecasts of analysts at the start of this year
Coal miners could scale back production but that isnt always easy to do In Australia many miners
are locked into so-called take or pay contracts with rail and port operators Many analysts dont
expect coking-coal prices to rebound for at least another 12 months RBC Capital Markets expects
coking-coal prices to average USD 154 a ton in 2014 down from USD 159 a ton forecast for this
year Instead they see more chance that iron-ore prices will come down more sharply RBC predicts
an 11 percent fall in iron-ore prices next year as new supply from Anglo Americans Minas Rio
project and mines owned by Fortescue Metals Group Ltd is added to the market UBS is even more
bearish predicting iron ore will fall below USD100 in the second half of 2014
Source Wall Street Journal
ARE COMMODITIES TRADERS bdquoTOO BIG TO FAIL‟
When the banking industrylsquos top lobby group commissioned a report by on commodity trading
houses the idea was to show trading houses like Glencore Xstrata Vitol or Cargill were ―too big to
fail and therefore needed to be regulated in a similar manner to the banks
But instead of highlighting the inherent issues surrounding the industry the report found trading
companies posed less systemic risk than the big banks As a result the Global Financial Markets
Association which commissioned the report decided not to finalize or publish it (The GFMA claims
that it often commissions reports which are shared with regulators and other interested parties but
never published) But the debate hasnlsquot ended
A separate report published in July by the Centre for European Policy Studies a think-tank argued
the growth of commodity trading houses which underpin the global trade in raw materials could
―have systemic implications Commodities trader Trafigura has become the latest to wade into the
debate In its recent prospectus for a EUR 500 million bond issue the worldlsquos second largest metals
trader and third biggest oil trader addresses the GFMA report as well as the issue of systemic risk
Making some tart observations the trading house says the GFMA paper was aimed squarely at the
Financial Stability Board a group of global regulators
―[The report] was widely seen as a tactic by some banks active in the commodity trading space as a
way of creating more equality between market participants by seeking to usher in further
restrictions on pure commodity trading companies the prospectus says
Commodity traders are facing the need to be more open about their operations and lift the veil of
secrecy Indeed the author of the GFMA reportmdashCraig Pirrong a widely respected academicmdashis
working on a white paper on commodities traders Commissioned by Trafigura it will look at what
commodities trading houses activities and the recent trend to accumulate more assets risk
management as well as looking at different types of commodity companies
Source Financial Times
SMOG DARKENS SHANGHAIS PROSPECTS FOR BECOMING A GLOBAL FINANCIAL CENTER
In the debate over which matters more in China money or quality of life the quality-of-life side
may have found the ultimate argument If you cant breathe nothing else really matters And itlsquos a
debate Mongolia has to have as it makes its own steps towards industrial and economic growth
Chinas pollution problem is spreading and growing worse a fact on stark display last week in
Shanghai the countrys financial center A stretch of filthy-air days in that coastal city so
thoroughly shocked residentsmdashwho had largely escaped the smog that has long plagued the likes of
Beijing and Harbinmdashthat it inspired fresh talk about getting away from China Lawrence Shu a
Shanghai-based partner at Hylands Law Firm said he and his friends are thinking more seriously
about moving abroad
The smog had a big impact because it feels really bad if you cant breathe freely he said
The environment used to take a back seat among the Chinese But as they get richer they are
traveling abroad more making the pollution back home more obvious The Internet also
contributes Blue-sky pictures posted on social networks by Chinese travelers abroad constantly
remind folks of what is lacking at home and Chinese now use various apps to track air-quality data
If Shanghais smog discourages smart financial professionals from wanting to live there that will
hinder Chinas effort to create a global financial center If businesses such as financial companies
and luxury-goods makers perceive that Chinas elites are spending more time outside their home
country they will be less willing to invest in China
Most rich Chinese havent packed their bags and left yet but they are keeping their options open
Relocation is a big decision said Anne Wang who works in the financial industry in Shanghai But
just in case she recently received a US visa that would allow her to live there
Source Wall Street Journal
POLITICS
MINERALS POLICY ENTERS FINAL DISCUSSIONS
The government published a final draft of Mongolialsquos State Policy on the Minerals Sector for 2013
through 2025
The document was first presented to Parliament in July and is now entering final discussions during
the autumn plenary session of Parliament following a 42 percent drop of foreign investment and 23
percent fall in the currency year-on-year
―We have reviewed the proposed State Policy on the Mineral Sector which we feel will be a
positive step forward if passed said the Source ―The passing of this policy will result in more
transparency and an increasing participation from foreign investors That said it will take time for
these feats to be accomplished Investors will be weary of Government promises as they seek
longevity to prove Government intentions
The proposed policy is divided into four main sections rationale principles main policy and
implementation-results The major points stressed in the policy include transparency and
responsible mining The law sends the message that growth is going to be driven by private sector
participation and the intent to provide a stable investment environment technological innovation
and value-added activities
Key priorities of the law since it was first unveiled include stability of taxation and the legal
environment an end to any discrimination between foreign and national investors and the
preservation of strategic resources and deposits
This most recent version saw the inclusion of a new section supporting development of local areas
and the interests of local citizens Other key elements include explorationmdashwhich would see
greater government regulation for strategic mineral deposits while cutting down bureaucracy and
conducting scientific researchmdashproduction support and local support The new document also
highlights greater support for non-governmental organizations for the environment allowing them
to claim damages from mining operations the establishment of funds to support economic
diversification environmental protections and land rehabilitation
The new draft has removed the risk assessment section and replaced it with a section on
implementation This includes the improvement of the legal environment and producing of relevant
regulations programs and projects for 2013 to 2015 followed by the implementation of programs
and projects from 2014 to 2025 and finally the provision of conclusions on midterm policy
implementation and further planning for up to 2020 and 2025
―We believe that this policy will take us one step closer to attracting investors and supporting
private sector development in Mongolia said the Source ―Despite current investor hesitation this
state policy in addition to the new amended Minerals Law set to pass next year will further
encourage investors to enter the market and will build support for the junior mining community
Source Mongolian Investment Banking Group
PARLIAMENT UNANIMOUSLY BACKS ldquoSMART GOVERNMENTrdquo INITIATIVE
Parliament has unanimously backed President Tsakhia Elbegdorjs ―From Big Government to Smart
Government initiative for government reform concepts having signed a joint statement of support
on 13 December
The joint statement gives full support to the presidents initiative and commits to cooperation for
its undertaking This includes support for enhancing government systems and policies in line with
democracy and a market economy improving the capacities of public services and curtailing
government intervention into private business affairs Also included are protections to private
business including establishing government structures for rule of law support to domestic
industries and honoring contracts The fight against corruption is another main perogative
On 16 November 16 the Office of the President of Mongolia organized a national consultative
meeting on this topic at the Government Palace Elbegdorj next met with members of the
Parliament on 9 December to organize an open dialogue with representatives of Parliament for an
appeal for them to sign the joint statement Reaffirming the commitment of the Mongolian
lawmakers to a breakthrough reform of the Government the leaders of party floors and factions in
the Parliament and independent members of the Parliament signed the document for the reform on
December 13 2013
Source Montsame
GOVERNMENT CALLS TO END PRACTICE OF APPOINTING MPS AS MINISTERS
The coalition government has thrown their support behind President Tsakhia Elbegdorjs proposal to
prohibit Parliament members from serving as cabinet ministers
Democratic Party members discussed a draft resolution and proposed amendments submitted by the
president for the new restriction at a party meeting on Monday The draft amendments were
unanimously backed by the faction The Justice Coalition which includes the Monglian Peoples
Revolutionary Party and Mongolian Democratic Party came to the same conclusion following its own
meeting said coalition head N Battsereg on Monday
Source Montsame
COMMITTEE LEADERS TO BE ELECTED THIS MONTH
The coalition government will soon be electing officials to lead the various committees in
government
Parliament has 8 standing committees to elect leaders to this month with each committee to be
led by a representative of the coalition government Current committee heads are Ts Tsolmon at
the Security and Foreign Policy Committee G Bayarsaikhan at the Environment Food and
Agriculture Committee Z Bayanselenge at the Social Policy Education Culture and Science
Committee R Burmaa at the Petition and Requests Committee A Bakei at the State Structural
Committee Ts Davaasuren at the Budget Committee Sh Tuvdendorj at the Legislation
Committee and B Garamgaibaatar at the Economic Committee
Source Zuunii Medee
FOREIGN CURRENCY PAYMENTS BANNED FOR MININGEXPLORATION LICENSING FEES
The Ministry of Finance has banned the use of foreign currencies to pay for mining and exploration
licensing fees to the Mineral Resources Authority beginning 1 January 2014
The Ministry of Finance has prompted these entities and companies holding licenses to comply with
Mongolian currency law that states that all businesses and agencies must do business in Mongolian
tugrug According to the 2009 law transactions must not be carried out in foreign denominated or
foreign currency based rates
Source Newsmn
MINING MINISTRY TO COOPERATE WITH ASSOCIATION OF FLUORSPAR EXPLORERS
The Ministry of Mining Wednesday established a memorandum of mutual understanding with the
Association of Fluorspar Explorers (AFE) to cooperate in augmenting the countrylsquos export
In addition to expanding export goals include developing transparent and responsible mining
improving qualities and standards of fluorspar metallurgy and flotation concentrate and in
increasing the production output of the minerallsquos ore enrichment The hope is the memorandum
will create a launching point for a national program for fluorspar its exploitation increase the
volume of production by intensifying research and increase competitiveness in international
markets It will also be necessary to introduce the latest technology to the country along with
running joint trainings with foreign NGOs the Ministry said
Source Montsame
DP REJECTS AMARJARGAL‟S RESIGNATION
Parliament voted against MP R Amarjargallsquos resignation request on 12 December
During Tuesdaylsquos meeting the majority of the Standing Committee on State Structure voted against
Amarjargal`s resignation The head of the Democratic Party (DP) caucus D Erdenebat took a
strong stance against letting Amarjargal leave
Amarjargal said he wanted to resign to take responsibility on behalf of his party members for the
current political situation and economic restraints in Mongolia DP members agree with his
conclusion but encourage him to make the effort and participate for social change and
development Members of the opposition Mongolian Peoplelsquos Party members said that Amarjargal
could see the problems and nature of the majority of Parliament and praised his plan to resign
Source Newsmn
MPP HEAD TO STEP DOWN
Mongolian People Party (MPP) Head N Enkhbold has requested his resignation as party leader
MPP Deputy Head D Oyunkhorol said 9 December that Enkhbold submitted his request to step down
during a party meeting Oyunkhorol said Enkhboldlsquos resignation was due to personal reasons The
new party head will be appointed by the MPPs governing board
Source Udriin Sonin
FIFTH ROUND OF NEGOTIATIONS FOR THE JAPAN-MONGOLIA ECONOMIC PARTNERSHIP
AGREEMENT
The fifth round of the negotiations for the Japan-Mongolia Economic Partnership Agreement (EPA)
will be held from 16 to 19 December in Ulaanbaatar
The Japanese delegation will be led by Jun Yokota ambassador in charge of economic diplomacy
and the Mongolian delegation will be led by Ochirbat Chuluunbat vice minister for economic
development Experts from relevant ministries and agencies of both sides will participate in the
meetings
In this round negotiations are in areas including trade in goods and investment
Source 4-Traderscom
FIRST MONGOLIA-CHINA JOINT BORDER COMMISSION MEETING IN BEIJING
The very first meeting of Mongolia-China joint commission of borders took place 11 and 12
December in Beijing China
This meeting was co-chaired by T Togsbilguun a director of the Department of Neighbour
Countries of Mongolialsquos Ministry of Foreign Affairs and by Xiao Jiangguo a representative of border
checkpoint and seaport affairs Both sides shared on ideas for implementation of the
intergovernmental contract on the border regime and reached some agreements on conducting a
joint examination in the border signs and on activating the collaboration in law enforcement around
frontier areas After this they discussed issues of developing border checkpoints at a same level
putting some border checkpoints into a permanent regime giving an international status to four
checkpoints
The gathered also made a protocol on their meeting and inked its results The next meeting will run
in 2014 in Ulaanbaatar
Source Montsame
BELARUS TO OPEN EMBASSY IN MONGOLIA IN 2014
Belarus will open its embassy in Mongolia in 2014 reads a resolution from the Belarus Council of
Ministers of the Republic of Belarus from 12 December 2013 Belaruslsquo Finance Ministry will finance
the costs of opening and maintaining Belarusian Embassy in Mongolia from the funds set aside in its
national budget for the opening and maintenance of diplomatic missions and consular missions of
the Republic of Belarus abroad
Source Belarusian Telegraph Agency
HOWELL NEW JERSEY USA BECOMES SISTER CITY OF SUKHBAATAR DISTRICT
The Howell Township and the Sukhbaatar district in Mongolia signed a memorandum of
understanding to create sister citieslsquo between Howell New Jersey USA and the Sukhbaatar District
on Tuesday
The program was aimed at opening up talks on how each can benefit from one another Mayor
William Gatto said Howell Township is a very diverse city and theyve taken the relationship with
the Kalmyk community here in Howell and expanded it to a country where they have had no
relationship in the past he said
The sister citieslsquo program will allow both Mongolia and Howell to exchange ideas and come up
with new and better ways to do things that benefits both cultures Outside of Mongolia Howell has
the largest population of Kalmyks in the world with many living in the Freewood Acres section of
the township Gatto said
Some of the goals of the agreement include promoting a common prosperity and development for
both parties an electronic pen-pal program and education opportunities for exchange students
Through a translator Baljinnyam Gan-erdene of the Citizens Representatives Council of Sukhbaatar
District said he came to Howell to see how democracy works in the United States
Im really glad and hope that this unforgettable and successful visit opens the door to our
friendship and prosperity between our residents Gan-erdene said
Gatto gave Gan-erdene a Howell flag and a throw blanket created by the Historical Society
depicting the history of the township Gan-erdene also gave Gatto several items including a bronze
piece of art
Source NJcom
MONGOLIAN CALLIGRAPHY ADDED TO UNESCO CULTURAL HERITAGE LIST
State Parties at the 8th Session of the Intergovernmental Committee for the Safeguarding of the
Intangible Cultural Heritage in Azerbaijan unanimously agreed to register Mongolian calligraphy as
an intangible cultural heritage in need of urgent safeguarding on 2 December
―Mongolian heritage calligraphy is now being recognized by the world and I am grateful on behalf
of my country for decision makers said Secretary-General of Mongolian National Commission for
UNESCO Gundegmaa Jargalsaikhan He noted that Mongolian calligraphy was the fifth cultural
heritage item of Mongolia to be listed and now stands among the Mongolian epic traditional folk
dance the traditional music Tsuur and a circular breathing technique
Mongolian calligraphy is a 1000-year-old writing system that vertically connects continuous strokes
together to create a word Letters of Mongolian script have been created and taught by nomads
from generation to generation During the 1937-1940 purges of the Soviet era thousands of tutors
and traditional scholars of the script were killed Those who remained alive were banned from
mentoring the younger generation Soon after that or around 1946 a new Cyrillic script was
adopted as the only eligible script therefore banning all the teachings of old Mongolian script and
Latin lettering Only in the 1970s was the old Mongolian script re-introduced to scholars allowing a
limited number of classes in universities
After the 1990 democratic changes along with the revival of Mongolian identity interest in
traditional calligraphy reawakened As a sign of such revival the very first non-communist political
organization the Democratic Union of Mongolia used folded calligraphy as its main logo
Source Info Mongolia
THOUGH IMPROVING MONGOLIA STILL REELING UNDER CORRUPTION
The third joint survey by the Asia Foundation and Sant Maral Foundation to gather data on the
perception of corruption in Mongolia revealed that efforts to curb corruption in what is considered
as one of the worldlsquos most corrupt countries could be having impact
The survey shows a significant drop in the percentage of respondents who believe corruption has
increased in the last three years from 389 percent in November 2012 to 183 percent currently In
contrast in 2006 a majority of respondents (63) indicated that corruption has increased ―a lot in
the last three years The survey also shows that corruption has declined in importance as a critical
social problem since 2006 Despite these positive signs overall respondents indicated that
corruption remains a serious issue in some specific key areas
Conducted in September of this year the survey featured face-to-face interviews in 1360
households across Mongolia including seven districts in Ulaanbaatar and 21 counties in six
provinces A majority (766) cited that widespread corruption in the law enforcement agencies is
one of the main reasons the government has been unable to tackle corruption effectively When
corruption is perceived to be this widespread the attention will obviously turn to the performance
of the apex anti-corruption body the Independent Authority Against Corruption (IAAC) The survey
shows that the IAAC is slowly but surely beginning to gain confidence among citizens The
percentage of those surveyed who think that its performance is ―good or ―very good increased
from 78 percent in March 2010 to 203 percent in March 2013 In September 2013 the result shows
a new high of 294 percent
Peoplelsquos perceptions on corruption are often shaped by personal experiences Although very few
respondents in the survey said that they had actually paid a bribe themselves (8 percent about a 3
percent drop from 2012 and an 18 percent drop since 2006) as noted before many are not willing
to report instances where they are asked for one Similarly 36 percent of respondents said they
would not pay a bribe but 26 percent indicated that they would pay if they had the financial
capability
Basanta Pokharel is The Asia Foundation‟s chief of party for the STAGE program in Mongolia He
can be reached at basantapokharelasiafoundationorg The views and opinions expressed here
are those of the individual author and not those of The Asia Foundation
Source Asia Foundation
MPP DEMANDS DISMISSAL OF MINISTERS
Mongolian Peoplelsquos Party Chairman N Enkhbold and party head S Byambatsogt submitted to the
Speaker a request for the dismissal Minister of Finance Chultem Ulaan and of Economic
Development Minister Nyamjav ―Fortuna Batbayar
Our faction believes that these ministers must be held responsible for the worsening of the
national economic situation We also intend to do the same with other ministers after hearing
opinions of people said Byambatsogt
Source Montsame
FORMER TAVAN TOLGOI JSC DIRECTOR ARRESTED
The Independent Agency Against Corruption arrested former Tavan Tolgoi JSC director Kh
Tumenbayar for undisclosed reasons
An unnamed official source suggested that the arrest may be related to abuses of power and
payments to political parties as well as the construction of a high-class hotel in Dalanzadgad Soum
Umnugobi Aimag Kh Tumenbayar is a member of the Democratic Party a member of Parliament
and is an associate of ―Ajnai Bat-Erdene the Minister of Defense who helped Tumenbayar attain
position as the director of Tavan Tolgoi for 6 years and rise to head of the Umnugobi Aimag Citizens
Council
Tumenbayar voluntarily resigned from his position at Tavan Tolgoi last month The IAAC has
reportedly not given details to the reasons for the investigation opened on Tumenbayar because of
possible connections to high-ranking officials
Source Unuudur
MONGOLIA TURKMENISTAN JOIN INTERNATIONAL RACING FEDERATION
The International Federation of Horseracing Authorities (IFHA) has welcomed racing organizations
from Mongolia and Turkmenistan as affiliate members
Recent ratification to IFHA statutes at its annual General Assembly in October created a new
affiliate membership category within the Federation Thus the Federation of Mongolia Horse Racing
Sport and Trainers and the Turkmen Atlary State Association by unanimous vote of the IFHA
Executive Council in Paris in October have become the IFHAlsquos first two affiliate members
The Federation of Mongolian Horse Racing Sport and Trainers (FMHRST) is a non-governmental
organization (NGO) which serves to the development of equestrian sport in Mongolia and works to
protect the rights of horsemen who specialize in this national sport The new affiliates were
announced by IFHA Chairman Louis Romanet this week and several key appointments to IFHA
executive office positions and committees have also been made
Source Horse Talk
MONGOL TV HEAD MEDIA CAN HELP FIX THE BIG PROBLEMS
Nomin Chinbat head of Mongol TV has grander intentions than just ridding the countrys television
business of rampant pirated content and unlicensed formats The young executive wants to help
clean up Mongolian politics and the nation by creating a free and open media
―The networks are used as propaganda channels for politicians They are used very effectively every
four years at election time says Chinbat whom the Source named one of the 25 Most Powerful
Women in Global TV at MIPCOM 2013
―There are laws against piracy but they arenlsquot implemented explains Chinbat who says that
politicians in the country of roughly three million wonlsquot challenge journalists because their
relationships with them are too cozy
Mongol TV has invested in original programming licenses all of its imported content and runs
investigative journalism features highlighting social problems such as alcoholism and corruption
The company is organizing a Mongol TV Day for February 2014 to which it has invited major
international studios to raise awareness of the issues and introduce the global industry to
Mongolia Britainlsquos ITV and Americalsquos CBS are already confirmed and negotiations are ongoing with
other attendees The situation has improved in recent years with some channels having become
what Chinbat calls ―hybrids which license some sports rights but then steal others and copy
formats
―These days some of these channels might license 25 episodes of a format and make 50 But this is
actually progress says Chinbat
Chinbat and her team were at the Asian Television Forum (ATF) in Singapore looking for new
formats that can be produced within the constraints of Mongolian television budgets However with
Mongolias young populationmdash65 percent of the country is under 35 years oldmdashmobile viewing is on
the rise and the network is already working second-screen utilization and new media applications
This demographic sweet spot should guarantee strong growth in the population economy and
nascent entertainment sector in Mongolia in the coming decades
Source Hollywood Reporter
ANNOUNCEMENTS
ldquoMM TODAYrdquo ON MNB-TV FRIDAY 1900 TO 1910
BCM is pleased to announce that Mongolian National Broadcasting continues its cooperation with
BCM on ―MM Today This English news program is aired every Friday for 10 minutes and is
scheduled from 1900 to 1910 tonight Tune in to watch this program that reports stories from
todaylsquos BCM NewsWire
BCM WEBSITES
MONGOLIAN WEBSITE bdquoPRESENTATIONS‟ AND bdquoNEWS‟ SECTIONS
The Presentationslsquo section on BCMlsquos Mongolian website can be reached via bcmmnitgeluud
As a key component of BCMlsquos Mongolian website articles from the Newslsquo section and the
government website Open-Governmentmn are regularly updated
S Oyun Minister of Environment and Green Development presentation at BCM monthly meeting on
May 27 added to Mongolian website bcmongoliaorgmnилтгэлүүд
- Байгаль орчин ногоон хөгжлийн сайд СОюун Байгаль орчин ногоон хөгжлийн шинэчлэлийн
бодлого үйл ажиллагаа МБЗ-ийн сарын уулзалт 5 сарын 27 2013
___________________________________________
ENGLISH WEBSITE PRESENTATIONS MONGOLIA REPORTS bdquoINTERVIEWSbdquo MONGOLIAN
BUSINESS NEWS‟ bdquoPHOTO GALLERY‟
The following 13 presentations are from the Mongolia Investment Summit- 2013 in Hong Kong
November 18-20
- Regulatory Update Navigating Mongolialsquos legal framework for foreign direct investment
Javkhlanbaatar Sereeter Director General Foreign Investment Regulations and Registration
Department MINISTRY OF ECONOMIC DEVELOPMENT OF MONGOLIA
- Investment keynote Investing into Mongolia in 2013 ndash Where do the opportunities lie James
Passin Co-Founder and Manager FIREBIRD MONGOLIA FUND
- Development keynote Key challenges and opportunities for continued growth in Mongolia
Randolph Koppa President TRADE AND DEVELOPMENT BANK OF MONGOLIA
- Outlining government policies and long-term plans for Mongolialsquos mining sector Amarjargal
Khurelbat Head of International Cooperation Division MINISTRY OF MINING OF MONGOLIA
- From copper to met coal Demand and price outlook and expected impact on Mongolialsquos economy
Ghee Peh Managing Director Metals and Mining Research UBS SECURITIES ASIA
- How Mongolian banks and financial institutions are dealing with the challenges and opportunities
of a fast growing economy Norihiko Kato Chief Executive Officer KHAN BANK
- Update on the Mongolian stock market ndash Impact of the new Securities Law Altai Khangai Chief
Executive Officer MONGOLIAN STOCK EXCHANGE
- From investment banking to trade finance to micro credits to insurance Amartuvshin Hanibal
Managing Director TENGER FINANCIAL GROUP LLC
- Spotlight presentations Showcasing Mongolian investment opportunities Peter Morrow Board
Director ASIA PACIFIC INVESTMENT PARTNERS
- Spotlight presentation Showcasing Mongolian investment opportunities Munkhbat Davaatseren
CEO of Golomt Securities GOLOMT BANK
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources
Batmunkh Batkhuu Chairman SHARYN GOL JSC
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources
Jimmie Wilde Chief Operating Officer BERKH UUL JSC
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources Mona
Forster Executive VP ENTREacuteE GOLD INC
The following two presentations are from the ―ANTI-CORRUPTION LEGISLATIONPOLICY
INTERNATIONAL BEST PRACTICE ON TRANSPARENCY training seminar for businesses in
Ulaanbaatar November 18 2013
-―International business standard on transparency by Jelena Pesic Director PwC
-―Finlandlsquos best practice on transparency and anti corruption by Dr Pekka Hallberg (as it is
worldlsquos number one) Emeritus President of the Supreme Administrative Court of Finland
The following 15 presentations are from the Mongolia Mining Summit Perth Australia October 29-
31 2013
bull Mongolialsquos Minerals Future and Development by Otgochuluu Ch Director General Department of
strategic policy and planning at Ministry of Mining Mongolia at the Mongolian Mining Summit 2013
Perth Australia Oct 29-31 2013
bull Mongolian Economy Investment OpportunitiesChallenges Jim Dwyer Executive Director
Business Council of Mongolia at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31
2013
bull Oyu Tolgoi Lessons from the Gobi Houston Spencer Vice President Communications and Media
Relations Oyu Tolgoi at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Market dynamics for Mongolian coking coal in the Chinese market Graeme Hancock President
and Chief Representative at Anglo American Mongolia at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Speech by Mr Ariunbold Byamba Deputy Director Erdenes MGL LLC at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull Launching Mining Projects in MongoliandashA Major Contractorlsquos Perspective Eric Erdenebat
Tseveendorj Country Manager Orica Limited at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Investing in a dynamic legislative environment Elisabeth Ellis Managing Partner Ulaanbaatar
Minter Ellison at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Sandvik In Pit Crushing amp Conveying (IPCC) Doug Turnbull Principal Mining Engineer Sandvik
Mining Systems at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Ovoot Coking Coal Project David Paull Managing Director Aspire Mining at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull The business of being a third neighbor David Landers General Manager East Asian Growth
Markets at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Nuurst Thermal Coal Project Daniel Rohr Chief Financial Officer Modun Resources Ltd at the
Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Culture matters in building sustainable long-term business relationships Hana Tserenkhand
Byambadash Business Development Consultant AusMon Consulting and Dr Christine Hogan Adjunct
Professor Curtin University Consultant amp Author at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Maximizing Business Benefits from Your IT Investment Brad Skeggs Executive Director COSOL at
the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Presentation by Battsengel Gotov CEO Mongolian Mining Corporation at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull Mongolian Mining Sector Present and Future Developments NAlgaa Executive Director
Mongolian National Mining Association at the Mongolian Mining Summit 2013 Perth Australia Oct
29-31 2013
The ―Mongolia Reports section includes the following
- ―Ministry of Finance of Mongolia 2013 Government Debt Auctions by Bank of Mongolia
- ―Doing Business in Mongolia 2013 Country Commercial Guide for US Companies by US
Embassy
- ―Real Estate Report 2013 by Mongolian Properties
- ―Selected Macroeconomic Indicators November 20 2013 by International Monetary Fund
- ―2013 Second Annual Mongolian CEO Survey from PricewaterhouseCoopers Audit LLC
- ―Selected Macroeconomic Indicators data through October 16 2013 by International Monetary
Fund
- ―IMF Completes 2013 Article IV Mission to Mongolia by International Monetary Fund
The following are added to Interview Section from the Oxford Business Group Mongolia Reports
2013 book
bull B Byambasaikhan Chairman Business Council of Mongolia ―Talk is cheap
bull President Ts Elbegdorj ―Diversifying for growth
bull Jim Dwyer Executive Director Business Council of Mongolia ―Non-mining sectors budding
bull Peter Morrow Chairman American University of Mongolia ―Filling in the blanks
bull N Zoljargal Governor Bank of Mongolia ―Sustainable vision
bull Gansukh Minister of Roads and Transportation ―Accessing new markets
bull J Od President MCS Group ―Building interest
bull B Chuluunbaatar President and CEO of Monnis Group ―Climbing the ranks
bull Cameron McRae President and CEO Oyu Tolgoi ―Sitting on a copper mine
BCMs English website includes the ―Mongolia Business News section where the Open Letter to
Parliament and Government is available for download
BCM continuously posts news stories and analysis of relevance to Mongolia at Mongolian Business
News before they are all put together each week for Fridays weekly NewsWire
The ―Photo Gallery contains photos from the 6th Anniversary BCM Renewal dinner on November
11 2013
BCM Football Cup 2013 pictures are posted to the website - httpbcmongoliaorgenphotos350-
enalbumalbumid=200
The BCM NewsWire will continue to be issued each Friday incorporating items already on the home
page for a consolidated account of the weeklsquos events
SOCIAL NETWORK WITH BCM
BCM LAUNCHES NEW LINKED-IN COMPANY PAGE
The Business Council of Mongolia has launched a new company page on the social networking
website LinkedIn to network its members and followers including small-medium enterprises (SMEs)
The new page will allow BCM to alert followers to the latest news and information critical to their
businesses Memberslsquo businesses will be promoted Additionally BCM plans to deliver monthly
infographics on the latest data as well as videos and other media content as they come The bulk of
the content on the new page will be in Mongolian language to better cater to BCMs Mongolian-
speaking audience and members The following link can direct you to the New BCMs Linked-in page
httpwwwlinkedincomcompanybusiness-council-of-mongoliatrk=company_logo
The Business Council of Mongolia (BCM) has expanded its reach to your favorite social networks
Keep up to date on the latest business deals in Mongolia and how the climate for investment is
improving each day with BCM
Add BCM on Facebook at httpswwwfacebookcomTheBusinessCouncilOfMongolia to read the
latest announcements and comment on events carried in the NewsWire with the community
Hear breaking news and announcements as they happen when you follow BCM on Twitter at
httpstwittercombcmongolia
We have now 2482 fans on our Facebook fans page 1527 connections on LinkedIn network and
835 followers on Twitter
Of course for news information interviews event photos and announcements regarding our
organization visit the official BCM website at httpbcmongoliaorgen
ECONOMIC INDICATORS
INFLATION
Year 2006 60 [source National Statistical Office of Mongolia (NSOM)]
Year 2007 151 [source NSOM]
Year 2008 221 [source NSOM]
Year 2009 42 [source NSOM]
Year 2010 130 [source NSOM]
Year 2011 102 [source NSOM]
November 30 2013 120 [source NSOM]
Year-over-year (y-o-y) nationwide
Note 111 y-o-y Ulaanbaatar city November 30 2013
CENTRAL BANK POLICY LOAN RATE
December 31 2008 975 [source IMF]
March 11 2009 1400 [source IMF]
May 12 2009 1275 [source IMF]
June 12 2009 1150 [source IMF]
September 30 2009 1000 [source IMF]
May 12 2010 1100 [source IMF]
April 28 2011 1150 [source IMF]
August 25 2011 1175 [source IMF]
October 25 2011 1225 [source IMF]
March 19 2012 1275 [source Mongol Bank]
April 18 2012 1325 [source Mongol Bank]
January 25 2013 1250 [source Mongol Bank]
April 8 2013 1150 [source Mongol Bank]
June 25 2013 1050 [source Mongol Bank]
CURRENCY RATES ndash DECEMBER 19 2013
Currency Name Currency Rate
US dollar USD 164138
Euro EUR 224680
Japanese yen JPY 1579
British pound GBP 268874
Hong Kong dollar HKD 21170
Chinese Yuan CNY 27031
Russian Ruble RUB 4981
South Korean won KRW 155
Disclaimer Except for reporting on BCMlsquos activities all information in the BCM NewsWire is
selected from various news sources Opinions are those of the respective news sources
175000 tons of copper in concentrates and 700000 to 750000 ounces of gold in concentrates in
2014
Source Reuters
TRAFIGURA AGREES TO OFF-TAKE DEAL FOR OYU TOLGOI MINE
Commodity trader Trafigura has agreed to provide financing for the massive Oyu Tolgoi mine in
exchange for a long-term deal to buy an undisclosed portion of the output it said on Monday
Trafigura which markets a wide range of metals including copper concentrate referred to the off-
take deal in its first fully public annual report since being set up 20 years ago We also provide
finance in exchange for long-term supplies For instance we recently signed an off-take agreement
with Oyu Tolgoi in Mongolia it said giving no further details
Rio Tinto put the mines USD 5 billion expansion on hold in July saying the Mongolian government
wanted Parliament to approve the projects financing Mongolia hoped to resolve the dispute by
early 2014 a government source told Reuters last month Fifteen banks that have agreed to finance
the expansion have told Rio they will extend their commitments which were due to expire at the
end of the year until next March a statement said on Monday Trafigura also said the global copper
market is expected to be broadly in balance next year as low inventories and a recovery in global
growth offset stronger mine output
We dont expect prices to rise markedly but on the other hand with concentrates trading at close
to cost levels for some producing areas a collapse in prices is also unlikely the Trafigura report
said
The benchmark copper price on the London Metal Exchange has shed 83 percent this year weighed
down by more output from new mines such as Oyu Tolgoi and improved operations at many existing
mines The global copper market is expected to widen its surplus next year to 328000 tons from
182000 tons this year analysts polled by Reuters said in October
Source Reuters
OYU TOLGOI TO COOPERATE IN TAVAN TOLGOI POWER PLANT PROJECT
Oyu Tolgoi LLCs board of directors agreed to participate in the Tavan Tolgoi power plant project
following a series of meeting held from 11 to 13 December
The board discussed issues that remain under dispute at the meeting before giving approval of the
2014 budget After the meeting board members announced their plan to cooperate in the Tavan
Tolgoi power plant project Issues regarding involvement and the volume of investment are
expected to be discussed early next year Also discussed was the issue of the underground mine of
Oyu Tolgoi but the board did not come to any conclusion on the matter Both Mongolian and
foreign board members agreed to grant a loan to resolve the funding issue but did not set on a date
of when the loan could be received
Source Montsame
ERDENES TT UNLIKELY TO PAY $160M DEBT TO CHALCO IN 2013 SAYS CEO
Erdenes Tavan Tolgoi LLC will not likely meet its target for paying off debt owed to Aluminum Corp
of China Ltd (Chalco) by the end of this year its chief executive told newspaper Uls Turiin Toim
―To date we have paid off about 60 percent of total debt and the remaining amount is about USD
160 million out of USD 350 million said Erdenes Tavan Tolgoi Chief Executive Officer Yachil
Batsuuri
The state owned coal miner will sell 600000 tons of coal on top of the one million tons of coal
already sold for a net profit of USD 70 million to USD 80 million Batsuuri said A six-month halt in
shipments was the primary factor for delayed payment of total debt owed he said Although
production at Tavan Tolgoi was on target he said the transportation issues prevent it from making
the sales required to fully pay of its debt
―The coal being extracted from the East Tsankhi of the Tavan Tolgoi site is fully devoted to paying
off the Chalco debt of USD 350 million and therefore in order to work benefaction we have been
developing the West Block since July and started to export coal from September this year said
Batsuuri
He said Mongolia had successfully negotiated new terms for coal sales after months of selling its
coal reserves at a below-market rate The current deal is due to expire at the end of 2013 he said
He added that Erdenes Tavan Tolgoi plans to issue shares on international markets in 2015
Source Info Mongolia
RESERVES OF THE TAVAN TOLGOI JSC COAL DEPOSIT INCREASED TWOFOLD
A court ruling has allowed Tavan Tolgoi JSC to expand the size of its operating territory for an
added 70 million tons of reserves
Tavan Tolgoi JSC which operates upon the same coal deposit as Mongolian Mining Corp (MMC) and
Erdenes Tavan Tolgoi (Erdenes TT) saw its total reserves double with the expanded licensed area
Tavan Tolgoi has signed a memorandum of understanding with Chinas Shenhua Group to supply
coking coal for 20 years and will work in cooperation with Erdenes TT MMC and Shenhua for the
construction of a rail line to China
The rail line will connect the Mongolias Gashuun Sukhait port and the Gantsmod port of China
Source Unuudur
SHENHUA TO IMPORT 30-50M TONS OF COKE PER YEAR FROM MONGOLIA
Chinese coal producer Shenhua Group Corp Ltd will import 30 million to 50 million tons of coke
from Mongolia per year in the future
Zhang Guangjun deputy general manager with the Shenhua Science and Technology Research
Institute disclosed at a forum on 4 December that it would import 30 million to 50 million tons of
coke from Mongolia per year in the future Available data shows that the nation imported a total of
about 30 million tons of coke in the first half of this year and in line with industry observers the
import of Shenhua will deliver a strong impact on the domestic coke market
It has taken the group about a decade to gain the exploitation right of a Mongolia-based Tavan
Tolgoi coal mine Policy factors have been the strongest barrier from reaching that goal
Information from the China National Coal Association (CNCA) released on its website at the start of
November shows that it had signed a memorandum of understanding with three Mongolian firms
namely Erdenes Tavan Tolgoi LLC Energy Resources LLC and Tavan Tolgoi JSC on railway
construction cooperation and boosting coal trade And in line with some industry observers this is a
prelude to its success in gaining the exploitation right
Zhang reiterated that its failure to gain the exploitation right had a close tie with foreign
investment policies of Mongolian and so far the government had not even reached a conclusion
internally People in the circle said at the start of October that Mongolia released new policies for
foreign investments recently and according to the policies provided that a state-owned foreign
firm wanted to invest in industries including mining banking communications and news and media
in Mongolia Purchasing a stake exceeding 33 percent in any of these economic sectors by a foreign
state-owned entity requires a nod from concerned Mongolian authorities only at the ministerial
level And this might mean that the threshold for Chinese firms to invest in the Mongolian mining
industry would be lower
Source MENAFN
ERDENET MINING BRINGS MNT 370 BILLION TO STATE BUDGET
Erdenet Mining Co represents 30 percent of government revenues for industry contributing MNT
370 billion to the state budget in the year to December
According to the Erdenet Minings chief executive the amount of MNT 66 billion will go toward the
state by the years end Last year company represented 13 percent of income from taxes 10
percent of gross domestic product (GDP) and 20 percent of total export
Source Zuunii Medee
ASGAT SILVER DEPOSIT TO UNDERGO DEVELOPMENT
The board of Mongolialsquos 51 percent-owned joint venture with Russia Mongolrostsvetmet LLC decided
to begin development of the Asgat silver deposit
Asgat located in northwest Mongolia 1800 kilometers from Ulaanbaatar has a total average ore
reserve of 231 million tons and estimated 246 million ounces of silver The board agreed that the
project is economically viable now that a paved road leading to the development has been
complete The project is owned 51 percent by Erdenes MGL LLC and 49 percent by Russialsquos Rostec
The board agreed to the establishment of a working group to proceed with the next steps for
development
Source Business-Mongoliacom
MIAT TO HIRE FOREIGN-SKILLED MANAGEMENT
The Cabinet of Ministers decided on 14 December to hire a foreign-skilled executive management
team to operate state-owned MIAT Mongolian Airlines
The Cabinet hopes in hiring a foreign management it may produce greater profits increase its
competitiveness ensure greater flight safety and better prepare national staff The Cabinet
relayed orders to the State Property Committee and MIATs representative Council
Source Montsame
STANDARD BANK CONSULTANT DETAINED AMID DEBT DISPUTE
Mongolia has issued a travel ban on a New Zealand national consulting for Standard Bank Group Ltd
amid an escalation in a dispute with a local company over a debt repayment
Chris Bradley was part of a five-person team from Africalsquos biggest lender that visited Ulaanbaatar
last month to seek talks with the government over its USD 131 million in loans to Just Group LLC a
holding company said two people familiar with the matter The people asked not to be named
because they arenlsquot authorized to speak publicly Standard Bank alleges the loans are in default and
filed a lawsuit in July in a London court seeking repayment
Standardlsquos loans were made between 2007 and 2010 to Just Group to fund raw materials supplies
and debt repayments at state-controlled Erdenet Mining Corp and Ulaanbaatar Railways Bradley
said by phone on 2 December that he had been due to depart Mongolia on 29 November but ―is
restricted by the authorities from leaving Bradley said he was advised of his situation by local
police and that he is a suspect in an investigation
―I went in gladly to assist the police and compare notes said Bradley ―We are focusing on the
commercial aspects of this transaction and they are focusing on the criminal aspects The two
although linked are also running in parallel
Mongolia has barred foreign executives from leaving the country during investigations into
companies before Justin Kapla a US citizen and then-president of coal miner SouthGobi Sands
LLC was banned from departing at the end of last year and is still in the country after the nationlsquos
Independent Authority Against Corruption launched a probe into the companylsquos mining licenses
Sharavlamdan Batkhuu Just Grouplsquos controlling shareholder and other companies in the group
have defaulted on loans since 2011 Danjilaa Ganbat director of the banking supervision
department at Mongol Bank the nationlsquos central bank said in July Ganbat made his comments
after Just Grouplsquos Savings Bank Mongolialsquos fifth-largest lender was declared insolvent due to
affiliated companies defaulting on loans Batkhuu and Just Group are among the defendants in the
Standard Bank lawsuit
Standard Bank wasnlsquot able to arrange any meetings with Mongolialsquos government to resolve the debt
dispute the people familiar with the matter said Bradley was the Mongolia specialist on the team
and the only member not directly employed by the bank said one Bradley said he worked as an
employee of Standard Bank from 1999 to 2001 and has consulted on a contract basis for the bank
over the last nine years including five visits to Mongolia since May ―to engage with the government
on our issues the debt recovery
Cabinet Secretary Saikhanbileg Chimed said by e-mail on 3 December that he thinks itlsquos better to
solve the debt dispute out of court and planned to ―push appropriate people to respond
Bradley 50 is a native of Hokitika New Zealand ―In the absence of a New Zealand consulate the
British Embassy is working on behalf of Bradleylsquos consular welfare said Julian Pearson Deputy
Head of Mission at the British Embassy in Ulaanbaatar on 2 December
Source Bloomberg
KHAN BANK OPENS EXPRESS BANKING CENTER
Khan Bank LLC opened an express banking center on 10 December
The Express Banking Center services include a new ATM to deposit cash an E-Corner which allows
customers to make transfers between Khan Bank accounts review accounts through Internet
banking and receive account slips They can also be used to obtain foreign remittances
The Banking Centers are located at the State and Ulaanbaatar department stores on Peace Avenue
and will be open 24 hours every day
Source Khan Bank LLC
ERDENE ANNOUNCES NEW GOLD DISCOVERY AT ALTAN NAR
Erdene Resource Development Corp reported significant gold and silver results from the second
phase of trenching completed during the fourth quarter at its Altan Nar gold-polymetallic project
Results have been received for an additional 11 of the 28 trenches completed The trenching
program was designed to test 10 distinct mineralized zones across the 55-kilometer-long Altan Nar
target area Samples from the final thirteen trenches over the central Altan Nar prospect area have
been submitted to SGS laboratories with results anticipated during first quarter 2014
Highlights include the discovery of a new high-grade gold mineralized zone one kilometer north of
Discovery Zone (Maggie prospect) Significant gold mineralization (Northbow prospect) identified in
the northern portion of a previously untested 700-meter-long anomaly that widens and intensifies
to the south and gold and base metal mineralized zones confirmed at northwestern and
southeastern extent of the 55-kilometer-long Altan Nar target area (Northwest and Far South
prospects) All 11 trenches testing 6 distinct targets returned highly anomalous precious and base
metal mineralization
Source Erdene Resource Development Corp
XANADU MINES FORMS JV FOR COPPER EXPLORATION IN MONGOLIA
Xanadu Mines Ltd has established a joint venture company Mongol Metals with Ganbayar
Lkhagvasuren director and substantial shareholder of Xanadu to execute Xanadulsquos business and
copper exploration strategies
Xanadu recently returned broad copper and gold values from a 780-meter trenching program to test
coincident geophysical and geochemical anomalies at its Oyut Ulaan copper-gold porphyry project
in Mongolia The program has defined three near-surface mineralized porphyry centers with results
up to 85 meters at 075 percent copper with 054 grams per ton gold including 36 meters at 149
percent copper and 102 grams per ton gold The trenching was performed concurrently with the
recent drilling at the Diorite Hill prospect and drill testing of the new targets is scheduled within
the next phase of drilling
Source Proactive Investors
JATENERGY TESTS PROVE CONVERSION OF MONGOLIAN BROWN COAL TO SEMI-COKING COAL
Jatenergy Ltd is on track to pursue its Mongolian coal upgrading plans after testing proved that
coal from the country were highly suitable for conversion using Coal Plus technology
This sets the stage for the immediate start of its investment strategy with Monrospromugoli LLC
which could result in a USD 2 million upfront technology payment and ongoing annual royalties of
USD 176 million The test results had demonstrated that the high moisture high volatile low
calorific Mongolian brown coal can be easily converted into semi-coking coal using Coal Plus
―This report independently verifies that Coal Plus has potential in Mongolia executive chairman
Tony Crimmins said He added ―As the technology is already commercialized and in use in 5
locations in China for over 4 years we see high probability of financing this project in Mongolia
The confirmation that Mongolian brown coal is suited for conversion using Coal Plus into higher
value products paves the way for Jatenergylsquos agreement with Monrospromugoli to go ahead
Source Proactive Investors
SOUTHGOBI RESOURCES ANNOUNCES RESTATED FINANCIAL AND OPERATING RESULTS
SouthGobi Resources Ltd released its regular update on restated financial statements and
management discussion and analysis presentation In the consolidated financial statements for the
year ended 31 December 2012 the restated financial position at 31 December 2012 31 December
2011 and 1 January 2011 the results of operations for the years ended 31 December 2012 and 31
December 2011 and the statement of changes in equity and statement of cash flows for the years
ended 31 December 2012 and 31 December 2011
Following the correction in SouthGobilsquos point of revenue recognition revenues from affected coal
sales contracts are recognized in later periods than previously reported and some revenue has been
reported after 31 December 2012 as not all contracted coal has been collected by customers
During the periods from 2010 to 31 December 2012 trade and other receivables have been adjusted
lower and deferred revenue recognized to reflect revenue being recorded in later periods than
previously reported The inventory balance increased over the same period to reflect higher coal
inventory stockpile balances Prepaid expenses also increased with a corresponding decrease in
trade and other payables as coal sales royalty expenses were recognized in late r periods than
previously reported
The consolidated financial statements auditorslsquo reports and related financial information for the
affected periods contained in SouthGobilsquos filings filed prior to 14 November 2013 should no longer
be relied upon The restatements do not result in a change in cash at the end of any period The
statement of cash flows as reported does not change except for the reclassification of various items
within operating activities
Separately on 19 November 2013 SouthGobi paid USD 81 million in cash to the China Investment
Corporation in accordance with the convertible debenture agreement The amount related to the
64 percent per year cash interest payment and is payable semi-annually Further on 21 November
2013 SouthGobi issued 35 million common shares to China Investment
Source SouthGobi Resources Ltd
MSE CANCELS KHANSH INVEST‟S BROKERAGE LICENSES
The Mongolian Stock Exchange has invalidated the brokerage and securities dealing licenses of
Khansh Invest LLC on 4 December
―The companylsquos clients will be transferred to other brokerage firms that conduct professional
services in the market with licenses for broker-dealer related issues and it shall be governed
according to the concerning jurisdiction and regulations said the Source
Source Mongolian Stock Exchange
MNU PARTNERS WITH UNIVERSITY OF CALIFORNIA FOR RENEWABLE ENERGY
Mongolian National University (MNU) and the University of California announced 13 December the
signing of a memorandum of understanding to conduct high temperature solar thermal technology
research in Mongolia in 2014
Under the terms of the agreement the Mongolian Innovation and Technology Centre at MNU will
have a 100-kilowatt high-temperature non-tracking solar array on their campus that is not only the
first and the largest solar array of its kind in Mongolia but anywhere in the world
―We are delighted to be working with the University of California on this great project and we
particularly excited to make this announcement on the 15th Anniversary of MNU said MNU
Founder and Chairman Munkhbat Lkhagvasuren ―The thermal solar array will be installed
monitored and evaluated by our MNU Engineering Department under the advice and instruction of
the faculty of the University of California Munkhbat said
The technology was developed by University of Californialsquos solar director and professor Roland
Winston who is also a world-renowned scientist in the solar research field Winstonlsquos technology is
already operational at the University of California Purdue University and the Gas Institute of
Chicago although it has not yet been released for commercial deployment anywhere in the world
―My goal in working with MNU is to provide the technology and the staff he said ―Ultimately it
is the Mongolian engineering students that will be required to install and operate these systems as
well as determine the scope of the application beyond simply providing a high temperature heat
source
Source Mongolian National University
MCDONALDS INTERNATIONAL CALLS FOR FRANCHISEE TO POSSIBLY OPEN IN MONGOLIA
McDonalds International sent out a press release on December 10 calling for partners to approach
the company to open its first burger outlets in Mongolia
―We have not set a firm date for the development of McDonalds restaurants in Mongolia In the
future we may take steps to open McDonalds restaurants in Mongolia and if we seek a franchisee to
represent us the person will have the following characteristics
―High integrity business experience in the market history of success ability to work well with a
franchisor ability to complete a training program that can take about nine months willingness to
devote full time to the McDonalds restaurant business retail experience knowledge of real estate
market significant capital
The press release ends by inviting candidates to apply for a franchise
Source BNE
JAPANESE ldquoSUN RICE PLANT OPENS IN MONGOLIA
An opening ceremony for Mongolialsquos Technik Import LLC and Japanlsquos Niigata Kubota ―Sun Rice
factory in Ulaanbaatar on December 10
Niigata brown rice will be imported sorted and packed at the Ulaanbaatar factory which has a
daily capacity for the production of two to three tons of packaged rice The plant is equipped with
fully automated machines from Kubota The rice will begin sale in the domestic markets at MNT
5000 to MNT 7000 per kilogram
―Mongolia has been receiving rice from the people of Japan under aid program for many years
said Deputy Minister B Tsogtgerel ―During the latter event I and Ambassador Takenori Shimizu
were discussing that the period of receiving rice as aid is over and now the time of reciprocal
assistance has come and the ―Sun Rice factory is a sample of joint cooperation to produce the
world known quality in Mongolia
Niigata Prefecture is the second largest producer of rice in Japan after Hokkaido
Source Info Mongolia
MNBC MIGRATES TO DVB-T2 WITH THOMSON VIDEO NETWORKS
Video Mongolia Digital Broadcasting (MNBC) has launched Mongolias first ever DVB-T2 service using
head-end systems from Thomson Video Networks
Launched in 2007 MNBC was Mongolias first digital terrestrial TV network operator and will now be
able to broadcast up to 120 digital TV channels over five UHF transponders to maintain its position
and compete with Mongolias national satellite operator Working with systems integrator Digital
Horizon MNBC has deployed TVNs Vibe EM1000 multi-channel SD encoders and NetProcessor 9030
multiplexer and video processor with an embedded DVB-T2 gateway
Source Rapid TV News
CHINESE FIRM NEGOTIATING TO ACQUIRE JUST AGRO
A Chinese company is in negotiations to purchase Mongolias only meat exporter said a company
source
Just Agro LLC which owns 11 meat companies with the Makh Market brand is reportedly the subject
of negotiations for sale to a Chinese entity said the source who asked not to be named The Just
Agro company provides 40 percent of meat processing and 30 percent of storage in Mongolia and is
the only meat exporter in Mongolia
Last July authorities revealed that Just Grouplsquos Sh Batkhuu falsified signatures of the State
Property Committee and Erdenet Mining Cos director to receive USD 131 million in loans from
South Africas Standard Bank putting up the Erdenet Mine as collateral for the credit After Just
Group was dissolved the central bank took over all its assets including Just Agro
Source Unuudur
MONGOL TV EXPOSES MEDIA CORRUPTION WITH FAKE MCDONALDS STORY
An investigative news show on Mongol TV planted a false news story last week with all 9 of
Mongolias major local media outlets about McDonalds opening a branch in the country The
exercise was undertaken to expose corruption and the rampant practice of paid-for journalism in
Mongolia Mongol TV said
The appearance of a Mr P Rank promising McMutton burgers and goat milk-shakes in the
official press release set off no alarms at the media networks which took between USD 150 and
USD 700 from an undercover journalist to run the story on their websites on the front page of three
newspapers and on TV news on three networks including the local public broadcaster
―Soon the first letter our children learn will be Mlsquo Mr P Rank says with a golden shining smile
according to the fake release which also claimed McDonalds was to be sponsored by Mongolialsquos
Health Ministry and sold in schools all over the country
After Mongol TV unveiled the sting it invited representatives of the 9 duped media organizations to
explain their actions though all reportedly declined
Source Hollywood Reporter
EBRD ADOPTS NEW STRATEGY FOR ENERGY AND NATURAL RESOURCES SECTOR
The European Bank for Reconstruction and Development (EBRD) has adopted a new strategy that
will guide its investments in the energy and natural resources sector for the next five years EBRD
press release reported Tuesday
The bank sets out a commitment to helping its countries of operations move toward a sustainable
energy future The EBRD region which stretches from Morocco to Mongolia is faced with a
challenge of providing sustainable secure and affordable energy The energy strategy identifies
energy efficiency as the first and best response to this challenge
―What the EBRD brings to this challenge is our focus on structural reform said EBRD Managing
Director for Energy and Natural Resources Riccardo Puliti ―We have learnt from our work that
when properly channeled market forces can be harnessed to make energy sectors more sustainable
- environmentally economically and politically
The bank intends building on its well-established support for the Extractive Industries Transparency
Initiative by requiring clients operating in the extractive industries sector to disclose subsoil
contracts and licenses as well as all payments they make to local and national authorities
In the case of coal-fired generation the strategy supports the move to lower-carbon fuel sources in
response to the challenge of climate change In alignment with other international financial
institutions the EBRD will not finance any coal-fired power generation projects except in rare and
exceptional circumstances in which there is no feasible alternative energy source
The strategy also reinforces the EBRDs growing support for renewable energy which will include
financing both energy-generating capacity and key infrastructure such as transmission lines and
backup generation
―We have also developed and invested in the first wind farm in Mongolia - where it was also the
first new energy generator in 30 years said Puliti
Source Trend News Agency
SUSTAINABILITY HOSTS SESA WORKSHOP
Sustainability East Asia LLC organized a National Validation Workshop on 10 December as part of its
responsibilities for establishing a strategic environment and social assessment (SESA)
Participants from across the country arrived to represent government the private sector and non-
government organizations to discuss the proposed SESA The next step will be to assess mining
growth options and identify at least three likely growth scenarios which mining could bring to
Mongolia Afterward the SESA team will evaluate the environmental and social issues that are likely
to arise as a consequence of each scenario
The Mining Sector Institutional Strengthening Technical Assistance Project commissioned
Sustainability to conduct a strategic environmental and social assessment for Mongolias mining
sector
Sustainability will also perform a gap analysis of the legal regulatory and institutional capacity to
deal with each possible scenario An action plan is expected for SESA by summer 2014
Source Sustainability East Asia LLC
UB REGISTERS MATERNITY HOSPITAL NO 1
The new building annex for Maternity Hospital No 1 was registered as capital city property
13 December at a regular session of the Ulaanbaatar Citizens Council This maternity hospital
building was built with financing from Boroo Gold and was presented as a gift to the people of
Mongolia With a capacity to receive 150 mothers and children its total cost was MNT 92 billion It
includes the hospital building of 1169 square meters external heating clean water and sewer
water pipelines a diesel station an asphalt road a pedestrian walkway outdoor vegetation and an
external LED sign
This new building was commissioned 15 June The new annex has one vacuum operation room and
two standard operating rooms on the fifth floor 100 beds for women and 50 beds for infants on the
third and fourth floors paraclinical and sanitation units a pharmacy a conference room and
training rooms on the second floor an ambulatory section and reception on the first floor and staff
cafeteria closets washrooms and a disinfection chamber in the basement
Source Centerra Gold Inc Newsmn
RIO TINTO‟S SAM WALSH DIGS IN FOR THE LONG HAUL
Sam Walsh wants to remain as Rio Tinto PLClsquos chief executive beyond the end of his contract and
has told the minerlsquos board he will not be ready to retire in 2015
―I am there if they want me said Walsh ―Likewise if therelsquos someone else who can come in and
take what Ilsquove done to the next level thatlsquos fine too
The Australian 63 later this month replaced Tom Albanese 11 months ago after Rio decried
―unacceptable writedowns on its coal business in Mozambique Walsh says investors support his
strategy to cut costs and sell non-core assets
Walsh said he has explored selling all of Riolsquos aluminum business this year in what would be a
signature reversal of Albaneselsquos costly purchase of Alcan in 2007 But he says no offers have been
good enough while the business is not generating enough cash for an initial public share offering or
spin-off to Riolsquos shareholders Walsh has also been frustrated in attempts to sell Riolsquos diamonds
business
―Who would thank me if I sold something under value just to get a tick At the end of the day you
have to be pragmatic about things he said Offers ―werenlsquot in the bailiwick of where we thought
they should be
The Alcan deal epitomized Riolsquos poor recent dealmaking and Walsh admits the company had
―relaxed some of the controls it should have had Rio staff has now ―refound their mojo he said
On operating costs which Rio has said it will cut USD 3 billion next year he said ―There is rolling
momentum and thatlsquos important
Source Financial Times
KYRGYZSTAN FILES ECOLOGY DAMAGE LAWSUIT AGAINST CENTERRA
Kyrgyzstan is suing Canadas Centerra Gold Inc for 15 billion soms (USD 304 million) over what the
government says is ecological damage marking a new twist in a bitter row with the investor running
the largest Kyrgyz gold mine
The state environmental protection and forestry agency said in a statement that it had filed the
lawsuit at an economic court in the Kyrgyz capital Bishkek saying Centerra Gold had ignored its
earlier request for voluntary compensation It said the alleged ecological damage included
emissions of pollutants and waste dumps It said its claim referred to the companys operations
between 1996 and 2011
Centerra had said earlier that it viewed the governments claim as exaggerated and unfounded
The company disagrees with these charges and plans to give explanations on this matter in the
nearest time said a spokesman for the Kumtor Operating Company (KOC) the Centerra subsidiary
that runs the Kumtor mine in the Tien Shan mountains
The Toronto-listed miner which also owns the Boroo gold mine in Mongolia is already under
pressure from the Kyrgyz parliament which demands the state hold 67 percent in a proposed joint
venture to run the mine In September the government and Centerra Gold signed a memorandum
of understanding paving the way for Kyrgyzstan to swap its 327 percent stake in the Canadian firm
for 50 percent in a venture that would own Kumtor But in October the legislature voted to tear up
the document and seek control over the planned venture It gave the cabinet until 23 December to
report on its talks with Centerra Gold on setting up the venture Pearson said Centerra is having
constructive dialogue with the Kyrgyz government
Source Reuters
ECONOMY
FITCH AFFIRMS TWO MONGOLIAN BANKS AT B REVISES OUTLOOKS TO bdquoNEGATIVE‟
Fitch Ratings on 16 December revised the outlook on the Long-Term Issuer Default Ratings (IDRs) of
Khan Bank LLC and XacBank LLC to ―Negative from ―Stable At the same time the agency
affirmed the two Mongolian banks IDRs and viability ratings at B and b
The revision of the outlooks on both banks IDRs reflects weakening operating conditions as
indicated by the change in the Outlook for the Mongolian sovereign (B+) to Negative from Stable on
13 December The sovereigns outlook was revised due to mounting risks to the countrys economic
and financial stability Ratings on the two banks could be downgraded if pressures on asset quality
and liquidity intensify Persistent local-currency depreciation would reduce borrowers repayment
capacity and could lead to accelerated deposit withdrawals given the countrys high level of
dollarization
The banks ratings also remain sensitive to the withdrawal of credit stimulus as this could result in
asset deterioration on slowing economic growth or higher inflation Further decline in the
governments international reserves could also trigger a negative rating action as the banks
currency-related risk is counterbalanced by the authorities swap facility and unlimited foreign-
currency conversion Both banks ratings are also sensitive to any changes in their steady access to
capital from private-sector owners
Khan Banks Support Rating and Support Rating Floor (SRF) reflect Fitchs view that as the largest
bank in Mongolia it would be likely to receive state support in case of need However the
Mongolian sovereigns ability to provide timely support to the banking system remains limited as
underlined by its IDR of B+ A downgrade of the sovereign ratings would point to weakening in the
Mongolian governments ability to provide timely support to the banking system which put negative
rating pressure on Khan Banks SR and SRF In contrast Fitch expects XacBanks SR and SRF of 5B-
to be maintained even if the sovereigns rating is downgraded to B This is because the current SR
and SRF already reflect the agencys view that support from the sovereign in case of need cannot
be relied upon
The rating actions are as follows Khan Bank Long-Term Foreign-Currency IDR affirmed at B
Outlook revised to Negative from Stable Short-Term Foreign-Currency IDR affirmed at B Long-
Term Local-Currency IDR affirmed at B Outlook revised to Negative from Stable Viability Rating
affirmed at b Support Rating affirmed at 4 Support Rating Floor affirmed at B XacBank Long-
Term Foreign-Currency IDR affirmed at B Outlook revised to Negative from Stable Short-Term
Foreign-Currency IDR affirmed at B Long-Term Local-Currency IDR affirmed at B Outlook revised
to Negative from Stable Viability Rating affirmed at b Support Rating affirmed at 5 Support
Rating Floor affirmed at B-
Source Fitch Ratings
MONGOLIA SCORE FALLS ON POLITICAL RISKS INDEX FOR MINING INVESTMENT
An annual survey by Behre Dolbear of political risks saw Mongolia decline 5 points in an index
ranking Mongolia 19th out of 25 countries
Mongolia this year received a score of 269 compared with 32 last year Leading the countries
surveyed was Australia down 07 points from last year Russia with a total score of 171 compared
with 16 last year was the lowest ranking
The 25 countries considered in this yearlsquos survey are ranked based on seven criteria
-the countrylsquos economic system
-the countrylsquos political system
-the degree of social issues affecting mining in the country
-delays in receiving permits due to bureaucratic and other issues
-the degree of corruption prevalent in the country
-the stability of the countrylsquos currency and
-the competitiveness of the countrylsquos tax policy
Each criterion is rated on a qualitative scale from one (worst) to 10 (best) that reflects conditions
that promote investment growth in the mining sector The maximum score attainable for a country
is 70 points
Source Behre Dolbear Group
MONGOLIA LOOKS FOR SECOND CHANCE WITH FOREIGN INVESTORS
Saruul Ganbaatar the deputy head of Mongolias stock exchange hopes the countrys days of
interventionist economic policies are over and new laws ensuring foreign investors access to the
frontier markets industries will bring back sorely needed cash
Ganbaatar 32 who cut his investment teeth in Chicagos financial houses after graduating from
Loyola University is careful not to over-promise on what the stock market can deliver in 2014 and
beyond in terms of new listings or overall growth In October a law was passed easing ownership
restrictions for private companies to invest in the strategic industries A Securities Markets Law
coming into effect 1 January 2014 is expected to provide the key ingredient to attract deep
pocketed institutional investors such as mutual funds to invest
This really is the missing ingredient said Ganbaatar who has been traveling the globe promoting
the changes in the laws to global investors for the past two weeks
The stock index fell 19 percent in 2012 and year-to-date is down 115 percent although it did start
to climb with the newly passed laws On 1 January the new Securities Markets Law will allow
Mongolias commercial banks to offer custodial banking services Custodial banks serve as safeguards
for a firm or individuals financial assets playing a critical role in the final settlement of market
transactions Total market capitalization now is between USD 900 million and USD 1 billion Dont
expect the number of new listings to mushroom There may instead be a cull of companies Fifty-
five to 60 of them many of which have not traded in years are being reviewed for potential
delisting
The Mongolian Stock Exchange 100 percent state-owned is perhaps itself a candidate for
privatization It has been in a strategic partnership with the London Stock Exchange for two and a
half years
They have the right of first refusal he said
Source Reuters
CPI INCREASES TO 12 PERCENT YEAR-OVER-YEAR IN NOVEMBER
The National Statistical Office reported a 12 percent increase in the national consumer price index
(CPI) in November year-over-year
The CPI growth which also in November grew 13 percent from the previous month was explained
by a 14 percent increase in food prices and non-alcoholic beverages 23 percent for clothing
footwear and fabrics and 07 percent for housing water electricity and fuels
Source Info Mongolia
GROWTH SEEN IN EXPORT OF PRECIOUS METALS
The export value of precious metals grew 114 percent in November from the month before and 63
percent from the same period in 2012 according to the National Statistical Office
Exports totaled USD 38 billion in the year to December while imports grew to USD 58 billion The
foreign trade balance saw a deficit of USD 2 billion November saw exports of USD 381 million and
imports of USD 514 million with exports and imports in decline between July and November The
value of export products for the first 11 months was USD 11 billion Despite the gain in precious
metal exports exported minerals which represented 81 percent of all exports in the year to
November fell 129 percent from the year before
Source Zuunii Medee
MNT 788 BILLION WILL BE ENTERED INTO THE STABILIZATION FUND
The Stabilization Fund is set to collect MNT 49 billion this year and MNT 298 billion next
The Stabilization Fund was established to collect surplus revenue in years of economic gains from
the mining sector to cushion possible annual losses during economic downturns and weak
commodity demand Any gain in the price for gold and coal next year will also be reflected in
allotments to the fund
Source Zuunii Medee
ECONOMIC DEVELOPMENT MINISTRY PLANS TO PUT 81 OF BUDGET INTO CONSTRUCTION
The Economic Development Ministry plans to invest MNT 814 percent of its total investment budget
into construction
Beginning 1 January 2014 the ministry will provide MNT 9303 in loans toward the construction
sector The ministry will spend 39 percent of its budget for reconstruction and repair 10 percent
for the purchase of new techniques and technical equipment 3996 percent for infrastructure
2743 percent for education and health 636 percent for employment and agriculture and 2926
percent for other sectors of the economy
Projects include the construction of 30 clinics 27 cultural centers 6831 km of paved roads and
1032 m length of bridges Mongolia has received USD 55 billion in aid in the last two decades of
which 55 percent was in the form of low rate loans and 45 percent as non-repayable grants for
investments into agriculture infrastructure power and health sectors
Economic growth since 2011 has allowed Mongolia less aid than in the past The government has
now turned its focus on providing funding with concession agreements to large scale projects such
as the Nariin Sukhait-Shivee paved road and the power station at Mogoin gol Other projects include
Power Plant No 5 the Altanbulag-Ulaanbaatar-Zamyn Uud highway the Tavan Tolgoi- Khanbogd-
Khangi road and the Tuul Songino water reservoir complex
Source Zuunii Medee
TT POWER PLANT MAY NEED CONCLUSION TO OT DISPUTE SAYS DIRECTOR
Uninterrupted development of the Tavan Tolgoi power plant will ride on the outcome of disputes
concerning Oyu Tolgois underground mine said the director of the plant
―One of the main risks is the issue of a main user Enkhsaikhan said ―The key buyer of the power
from the TT Power Plant is OT Due to the uncertainty over phase twolsquo and unresolved matters
with the government of Mongolia OT is not regarded as a reliable buyer on a stand-alone basis
He added that the power company may request a guarantee from Oyu Tolgoi
A consortium that includes Koreas Posco Energy and Daewoo Engineering and Construction GDF
Suez Energy Asia Japans Marubeni Corp and Kansai Electric Power in March was selected for
development of the plant which has a preliminary estimate cost of USD 1 billion Those expenses
include installation of 150 kilometers of electric lines between Tavan Tolgoi and Oyu Tolgoi The
consortium will be expected to raise 30 percent of the cost itself while the remaining 70 percent
will come from bank loans However the uncertainty surrounding the Oyu Tolgoi copper mine could
create more hold ups
Source Zuunii Medee
CABINET TO CONCLUDE CONCESSION ON ALTANBULAG-ZAMYN UUD HIGHWAY
The Cabinet of Ministers ordered ministers to conclude a concession agreement for the Altanbulag-
Ulaanbaatar-Zamyn-Uud highway
The government is planning to establish the concession contract with the Chinggis Land
Development Group which according to the agreement shall have exclusive rights to construction
ownership and transfer of property using its own financing The concessionaire shall complete the
construction within three years after that shall operate the facility for another 30 years before
transferring the ownership to the Government
If Chinggis Land accepts these terms it would be responsible for developing a feasibility study and
blueprint of the project to be approved by the relevant ministries before concluding a financing
agreement The concession agreement will come into effect after the Chinggis Land Development
Group obtains a financing agreement for USD 1 billion from a commercial bank of Mongolia
The government will be responsible for freeing up the land where the highway is planned while the
Chinggis Land would cover the costs for doing so
Source Montsame
MNT 116 BILLION WILL BE SPENT FOR BUILDING EMERGENCY ALARMS IN UB
The National Emergency Management Agency has installed an emergency alarm system in 60
locations of Ulaanbaatar The alarm will alert citizens to natural disasters such as earthquakes
The alarms will be controlled from a center by microwave radios and satellite communication
devices
Source Udriin Sonin
EIU CLARIFIES EXTENT OF OFFICIAL ESTIMATES OF OIL SHALE RESERVES
The latest research from Mongolias mining ministry gives a clearer picture of oil shales
development potential in the coming years Although Mongolia has long been known to have
substantial oil shale deposits previous estimates were extrapolated from rudimentary surveys
conducted in the 1990s and thus left the actual reserves open to speculation
Plans to develop the industry took shape only in April 2013 when an American company Genie
Energy signed a five-year deal with the Petroleum Authority of Mongolia to explore oil shale
reserves in central Mongolia Genie also plans to build a USD 4 billion processing factory in Tuv
Aimag According to government projections the processing plant will generate USD 850 million of
tax revenue annually Aside from the economic benefits of the project domestic fuel sources could
help Mongolia to improve its energy security by loosening the countrys dependence on its powerful
neighbors At present 90 percent of Mongolias oil and related products come from Russia with most
of the remaining amount being imported from China
Yet the benefits of large-scale oil shale extraction are not as clear as they might seem at first
glance Most importantly Mongolias oil shale resources should not be confused with the shale oil
phenomenon that is currently sweeping the United States Oil shale (also called kerogen) is more
expensive to extract than shale oil and carries greater environmental costs In particular oil shale
requires a large amount of water to process which could be a risky proposition in Mongolia where
hydrological resources are already under strain Although other countriesmdashEstonia in particularmdashuse
oil shale as a substitute for coal extracting liquid fuel from the shale is a complex and relatively
untested process
Genie Energys progress on the project seems more substantial than that of comparable coal
liquefaction projects that have faltered in the region However environmental technical and
political limitations suggest that Mongolias overall dependence on foreign fuel will not change
significantly in the foreseeable future
―We remain doubtful that oil shale will play a significant role in Mongolia in the next two years so
our economic growth and trade forecasts will remain unchanged said the Source
Source Economist Intelligence Unit
MONGOLIA AND THE THREAT OF THE RESOURCE CURSE
Mongolia is at a crossroads while investors complain the government is dragging its feet on allowing
miners to start digging it is crucial that it get things right at the early stages of the resources
boom
Mongolias challenge will soon be the worlds says Richard Dobbs and his team at McKinsey in a
report predicting a USD 17 trillion investment bonanza by 2030 to keep up with demand for oil gas
and other materials In 1995 about 58 countries depended on resources for the bulk of their output
and wealth In 2011 that number had risen to 81 By 2030 roughly half of the worlds economies
will essentially become giant filling stations for developing superpowers from China to South Africa
That means that instead of the world moving toward greater transparency democracy and freer
markets we could see rising corruption levels and even greater income inequality
Economies with natural-resource endowments have a huge opportunity to transform their
prospects but history suggests that they could all too easily squander the windfall says Dobbs
director of the McKinsey Global Institute in London
The world would be wise to take steps today to break this cycle McKinsey recommends several
While not terribly original they include strengthening public institutions and good governance
building decent infrastructure boosting national competitiveness promoting sound fiscal policy
making and spending the windfall wisely while engaging in forward-looking economic and social
planning The trouble is that political will and integrity is often the first casualty once the minerals
start flowing out and the spoils come pouring in
Mongolia is at that very crossroads today Investors complain the government is dragging its feet on
allowing miners to start digging But its more important to get things right at the early stages of
the resources boom That means acting now to create the institutions and regulatory frameworks
needed to ensure revenue transparencymdashknowing exactly how much money is being dug out the
ground and where its going Why not set up a sovereign-wealth fund to save for Mongolias future
When the stakes are that high a little patience can go a long way
Source Bloomberg
MONGOLIAS NOMADS WARM TO SOLAR POWER
In Mongolia often known as the land of the blue skies the sun shines for 250 days on average each
year It beats down on the sparse plains and on the Gobi desert that spans the countrys southern
border with China
It shines even during the frigid winter days on the hundreds of thousands of nomads who still roam
the steppes herding animals and living in dome-like tents calling gers About 800000 of Mongolias
28 million inhabitants still live the traditional nomadic lifestyle that has remained largely
unchanged for generations Apart from the addition of motorbikes the occasional petrol generator
and a passing trade from intrepid tourists wanting to stay in a ger for the night life is almost the
same as that of many nomads grandparents and great-grandparents Almost but not exactly
Dotted across the steppes glints of light can be seen as the sun bounces off the solar panels that
have been installed on the sides of gers made of felt and yaks wool At the start of this millennium
Mongolias herders and nomads had little or no access to modern electric power and its potential
benefits But as of 2013 thanks to a concerted push by the Mongolian government almost 70
percent of nomadic people have access to electricity Bor a herder who mainly travels around
western Mongolias Arkhangai province is one of the people whose family benefits from portable
solar home systems (SHS)
We use it for generating the power for lighting in the ger charging phones we can also generate a
fridge to keep food longer and we can run a television That is very useful for us because we can
get the most recent weather forecast which is important for our work and keeping our animals
safe Before we had power it was very difficult Now it is almost like living in the city
The ability to charge mobile phones is also important for the herders who often have children
staying at boarding schools Access to electricity also allows families to contact emergency health-
care and doctors for advice without having to make the often arduous journey to the nearest village
or town
The solar systems were distributed and installed with the help of the World Bank after the
Mongolian governments National 100000 Solar Ger Electrification Program ran into difficulties A
World Bank report Capturing the Sun in the Land of the Blue Sky describes the difficulties faced by
the Mongolian government on its ambitious project
By 2005 five years into the plan 30000 families had been kitted out with an SHS but then the
program began to stagnateThe government of Mongolia recognized that considerably more effort
was necessary not only to keep the program on track but to scale-up implementation in order to
achieve the National 100000 Solar Ger Electrification Program target the report said In 2006 the
World Bank agreed to cover half of the initial outlay costs for each family as well as after-sales
maintenance with 50 centers set up across the country including at least one in each of its 21
provinces so that the herders would not have to travel to Ulaanbaatar every time the solar panels
needed maintenance
The SHS project also offers environmental benefits to a country where the ratio of carbon dioxide
emissions to economic output is ten times higher than the world average because of the increase in
mining over the past decade as the true extent of Mongolias mineral wealth became apparent The
solar systems are slowly replacing the diesel generators used by some nomads as a means of
generating power although they are still using stoves for heating burning wood coal and dung
throughout the year
Source Al Jazeera
IRON-ORE AND COAL PRICES GO SEPARATE WAYS
Prices of the key ingredients in steel productionmdashiron ore and coking coalmdashare moving along sharply
different paths as mining companies resist cutting coal output despite the market being awash with
the raw material
While iron-ore prices have risen 22 percent since May coking coal is still searching for a rebound
Coking-coal prices are off more than 4 percent over the same period China is on course for another
year of record steel production with supply directed to the construction of high-rise apartment
buildings the manufacture of luxury cars and other uses
There is simply too much coal on the market the International Energy Agency said in a report this
week
Shipments of steelmaking coal from Australiamdashthe worlds biggest exporter of the commoditymdashare
forecast by the government to rise to 178 million tons in 2015 from 145 million tons last year Most
goes to China which accounts for 60 percent of global demand In contrast global iron-ore
exporters are struggling to increase output in areas other than Australias remote Pilbara region
supporting prices of that commodity The spot price of iron ore climbed to nearly USD 140 a ton
earlier this month a four-month high Prices have since eased a bit to USD 13430 a ton but
remain well above the consensus forecasts of analysts at the start of this year
Coal miners could scale back production but that isnt always easy to do In Australia many miners
are locked into so-called take or pay contracts with rail and port operators Many analysts dont
expect coking-coal prices to rebound for at least another 12 months RBC Capital Markets expects
coking-coal prices to average USD 154 a ton in 2014 down from USD 159 a ton forecast for this
year Instead they see more chance that iron-ore prices will come down more sharply RBC predicts
an 11 percent fall in iron-ore prices next year as new supply from Anglo Americans Minas Rio
project and mines owned by Fortescue Metals Group Ltd is added to the market UBS is even more
bearish predicting iron ore will fall below USD100 in the second half of 2014
Source Wall Street Journal
ARE COMMODITIES TRADERS bdquoTOO BIG TO FAIL‟
When the banking industrylsquos top lobby group commissioned a report by on commodity trading
houses the idea was to show trading houses like Glencore Xstrata Vitol or Cargill were ―too big to
fail and therefore needed to be regulated in a similar manner to the banks
But instead of highlighting the inherent issues surrounding the industry the report found trading
companies posed less systemic risk than the big banks As a result the Global Financial Markets
Association which commissioned the report decided not to finalize or publish it (The GFMA claims
that it often commissions reports which are shared with regulators and other interested parties but
never published) But the debate hasnlsquot ended
A separate report published in July by the Centre for European Policy Studies a think-tank argued
the growth of commodity trading houses which underpin the global trade in raw materials could
―have systemic implications Commodities trader Trafigura has become the latest to wade into the
debate In its recent prospectus for a EUR 500 million bond issue the worldlsquos second largest metals
trader and third biggest oil trader addresses the GFMA report as well as the issue of systemic risk
Making some tart observations the trading house says the GFMA paper was aimed squarely at the
Financial Stability Board a group of global regulators
―[The report] was widely seen as a tactic by some banks active in the commodity trading space as a
way of creating more equality between market participants by seeking to usher in further
restrictions on pure commodity trading companies the prospectus says
Commodity traders are facing the need to be more open about their operations and lift the veil of
secrecy Indeed the author of the GFMA reportmdashCraig Pirrong a widely respected academicmdashis
working on a white paper on commodities traders Commissioned by Trafigura it will look at what
commodities trading houses activities and the recent trend to accumulate more assets risk
management as well as looking at different types of commodity companies
Source Financial Times
SMOG DARKENS SHANGHAIS PROSPECTS FOR BECOMING A GLOBAL FINANCIAL CENTER
In the debate over which matters more in China money or quality of life the quality-of-life side
may have found the ultimate argument If you cant breathe nothing else really matters And itlsquos a
debate Mongolia has to have as it makes its own steps towards industrial and economic growth
Chinas pollution problem is spreading and growing worse a fact on stark display last week in
Shanghai the countrys financial center A stretch of filthy-air days in that coastal city so
thoroughly shocked residentsmdashwho had largely escaped the smog that has long plagued the likes of
Beijing and Harbinmdashthat it inspired fresh talk about getting away from China Lawrence Shu a
Shanghai-based partner at Hylands Law Firm said he and his friends are thinking more seriously
about moving abroad
The smog had a big impact because it feels really bad if you cant breathe freely he said
The environment used to take a back seat among the Chinese But as they get richer they are
traveling abroad more making the pollution back home more obvious The Internet also
contributes Blue-sky pictures posted on social networks by Chinese travelers abroad constantly
remind folks of what is lacking at home and Chinese now use various apps to track air-quality data
If Shanghais smog discourages smart financial professionals from wanting to live there that will
hinder Chinas effort to create a global financial center If businesses such as financial companies
and luxury-goods makers perceive that Chinas elites are spending more time outside their home
country they will be less willing to invest in China
Most rich Chinese havent packed their bags and left yet but they are keeping their options open
Relocation is a big decision said Anne Wang who works in the financial industry in Shanghai But
just in case she recently received a US visa that would allow her to live there
Source Wall Street Journal
POLITICS
MINERALS POLICY ENTERS FINAL DISCUSSIONS
The government published a final draft of Mongolialsquos State Policy on the Minerals Sector for 2013
through 2025
The document was first presented to Parliament in July and is now entering final discussions during
the autumn plenary session of Parliament following a 42 percent drop of foreign investment and 23
percent fall in the currency year-on-year
―We have reviewed the proposed State Policy on the Mineral Sector which we feel will be a
positive step forward if passed said the Source ―The passing of this policy will result in more
transparency and an increasing participation from foreign investors That said it will take time for
these feats to be accomplished Investors will be weary of Government promises as they seek
longevity to prove Government intentions
The proposed policy is divided into four main sections rationale principles main policy and
implementation-results The major points stressed in the policy include transparency and
responsible mining The law sends the message that growth is going to be driven by private sector
participation and the intent to provide a stable investment environment technological innovation
and value-added activities
Key priorities of the law since it was first unveiled include stability of taxation and the legal
environment an end to any discrimination between foreign and national investors and the
preservation of strategic resources and deposits
This most recent version saw the inclusion of a new section supporting development of local areas
and the interests of local citizens Other key elements include explorationmdashwhich would see
greater government regulation for strategic mineral deposits while cutting down bureaucracy and
conducting scientific researchmdashproduction support and local support The new document also
highlights greater support for non-governmental organizations for the environment allowing them
to claim damages from mining operations the establishment of funds to support economic
diversification environmental protections and land rehabilitation
The new draft has removed the risk assessment section and replaced it with a section on
implementation This includes the improvement of the legal environment and producing of relevant
regulations programs and projects for 2013 to 2015 followed by the implementation of programs
and projects from 2014 to 2025 and finally the provision of conclusions on midterm policy
implementation and further planning for up to 2020 and 2025
―We believe that this policy will take us one step closer to attracting investors and supporting
private sector development in Mongolia said the Source ―Despite current investor hesitation this
state policy in addition to the new amended Minerals Law set to pass next year will further
encourage investors to enter the market and will build support for the junior mining community
Source Mongolian Investment Banking Group
PARLIAMENT UNANIMOUSLY BACKS ldquoSMART GOVERNMENTrdquo INITIATIVE
Parliament has unanimously backed President Tsakhia Elbegdorjs ―From Big Government to Smart
Government initiative for government reform concepts having signed a joint statement of support
on 13 December
The joint statement gives full support to the presidents initiative and commits to cooperation for
its undertaking This includes support for enhancing government systems and policies in line with
democracy and a market economy improving the capacities of public services and curtailing
government intervention into private business affairs Also included are protections to private
business including establishing government structures for rule of law support to domestic
industries and honoring contracts The fight against corruption is another main perogative
On 16 November 16 the Office of the President of Mongolia organized a national consultative
meeting on this topic at the Government Palace Elbegdorj next met with members of the
Parliament on 9 December to organize an open dialogue with representatives of Parliament for an
appeal for them to sign the joint statement Reaffirming the commitment of the Mongolian
lawmakers to a breakthrough reform of the Government the leaders of party floors and factions in
the Parliament and independent members of the Parliament signed the document for the reform on
December 13 2013
Source Montsame
GOVERNMENT CALLS TO END PRACTICE OF APPOINTING MPS AS MINISTERS
The coalition government has thrown their support behind President Tsakhia Elbegdorjs proposal to
prohibit Parliament members from serving as cabinet ministers
Democratic Party members discussed a draft resolution and proposed amendments submitted by the
president for the new restriction at a party meeting on Monday The draft amendments were
unanimously backed by the faction The Justice Coalition which includes the Monglian Peoples
Revolutionary Party and Mongolian Democratic Party came to the same conclusion following its own
meeting said coalition head N Battsereg on Monday
Source Montsame
COMMITTEE LEADERS TO BE ELECTED THIS MONTH
The coalition government will soon be electing officials to lead the various committees in
government
Parliament has 8 standing committees to elect leaders to this month with each committee to be
led by a representative of the coalition government Current committee heads are Ts Tsolmon at
the Security and Foreign Policy Committee G Bayarsaikhan at the Environment Food and
Agriculture Committee Z Bayanselenge at the Social Policy Education Culture and Science
Committee R Burmaa at the Petition and Requests Committee A Bakei at the State Structural
Committee Ts Davaasuren at the Budget Committee Sh Tuvdendorj at the Legislation
Committee and B Garamgaibaatar at the Economic Committee
Source Zuunii Medee
FOREIGN CURRENCY PAYMENTS BANNED FOR MININGEXPLORATION LICENSING FEES
The Ministry of Finance has banned the use of foreign currencies to pay for mining and exploration
licensing fees to the Mineral Resources Authority beginning 1 January 2014
The Ministry of Finance has prompted these entities and companies holding licenses to comply with
Mongolian currency law that states that all businesses and agencies must do business in Mongolian
tugrug According to the 2009 law transactions must not be carried out in foreign denominated or
foreign currency based rates
Source Newsmn
MINING MINISTRY TO COOPERATE WITH ASSOCIATION OF FLUORSPAR EXPLORERS
The Ministry of Mining Wednesday established a memorandum of mutual understanding with the
Association of Fluorspar Explorers (AFE) to cooperate in augmenting the countrylsquos export
In addition to expanding export goals include developing transparent and responsible mining
improving qualities and standards of fluorspar metallurgy and flotation concentrate and in
increasing the production output of the minerallsquos ore enrichment The hope is the memorandum
will create a launching point for a national program for fluorspar its exploitation increase the
volume of production by intensifying research and increase competitiveness in international
markets It will also be necessary to introduce the latest technology to the country along with
running joint trainings with foreign NGOs the Ministry said
Source Montsame
DP REJECTS AMARJARGAL‟S RESIGNATION
Parliament voted against MP R Amarjargallsquos resignation request on 12 December
During Tuesdaylsquos meeting the majority of the Standing Committee on State Structure voted against
Amarjargal`s resignation The head of the Democratic Party (DP) caucus D Erdenebat took a
strong stance against letting Amarjargal leave
Amarjargal said he wanted to resign to take responsibility on behalf of his party members for the
current political situation and economic restraints in Mongolia DP members agree with his
conclusion but encourage him to make the effort and participate for social change and
development Members of the opposition Mongolian Peoplelsquos Party members said that Amarjargal
could see the problems and nature of the majority of Parliament and praised his plan to resign
Source Newsmn
MPP HEAD TO STEP DOWN
Mongolian People Party (MPP) Head N Enkhbold has requested his resignation as party leader
MPP Deputy Head D Oyunkhorol said 9 December that Enkhbold submitted his request to step down
during a party meeting Oyunkhorol said Enkhboldlsquos resignation was due to personal reasons The
new party head will be appointed by the MPPs governing board
Source Udriin Sonin
FIFTH ROUND OF NEGOTIATIONS FOR THE JAPAN-MONGOLIA ECONOMIC PARTNERSHIP
AGREEMENT
The fifth round of the negotiations for the Japan-Mongolia Economic Partnership Agreement (EPA)
will be held from 16 to 19 December in Ulaanbaatar
The Japanese delegation will be led by Jun Yokota ambassador in charge of economic diplomacy
and the Mongolian delegation will be led by Ochirbat Chuluunbat vice minister for economic
development Experts from relevant ministries and agencies of both sides will participate in the
meetings
In this round negotiations are in areas including trade in goods and investment
Source 4-Traderscom
FIRST MONGOLIA-CHINA JOINT BORDER COMMISSION MEETING IN BEIJING
The very first meeting of Mongolia-China joint commission of borders took place 11 and 12
December in Beijing China
This meeting was co-chaired by T Togsbilguun a director of the Department of Neighbour
Countries of Mongolialsquos Ministry of Foreign Affairs and by Xiao Jiangguo a representative of border
checkpoint and seaport affairs Both sides shared on ideas for implementation of the
intergovernmental contract on the border regime and reached some agreements on conducting a
joint examination in the border signs and on activating the collaboration in law enforcement around
frontier areas After this they discussed issues of developing border checkpoints at a same level
putting some border checkpoints into a permanent regime giving an international status to four
checkpoints
The gathered also made a protocol on their meeting and inked its results The next meeting will run
in 2014 in Ulaanbaatar
Source Montsame
BELARUS TO OPEN EMBASSY IN MONGOLIA IN 2014
Belarus will open its embassy in Mongolia in 2014 reads a resolution from the Belarus Council of
Ministers of the Republic of Belarus from 12 December 2013 Belaruslsquo Finance Ministry will finance
the costs of opening and maintaining Belarusian Embassy in Mongolia from the funds set aside in its
national budget for the opening and maintenance of diplomatic missions and consular missions of
the Republic of Belarus abroad
Source Belarusian Telegraph Agency
HOWELL NEW JERSEY USA BECOMES SISTER CITY OF SUKHBAATAR DISTRICT
The Howell Township and the Sukhbaatar district in Mongolia signed a memorandum of
understanding to create sister citieslsquo between Howell New Jersey USA and the Sukhbaatar District
on Tuesday
The program was aimed at opening up talks on how each can benefit from one another Mayor
William Gatto said Howell Township is a very diverse city and theyve taken the relationship with
the Kalmyk community here in Howell and expanded it to a country where they have had no
relationship in the past he said
The sister citieslsquo program will allow both Mongolia and Howell to exchange ideas and come up
with new and better ways to do things that benefits both cultures Outside of Mongolia Howell has
the largest population of Kalmyks in the world with many living in the Freewood Acres section of
the township Gatto said
Some of the goals of the agreement include promoting a common prosperity and development for
both parties an electronic pen-pal program and education opportunities for exchange students
Through a translator Baljinnyam Gan-erdene of the Citizens Representatives Council of Sukhbaatar
District said he came to Howell to see how democracy works in the United States
Im really glad and hope that this unforgettable and successful visit opens the door to our
friendship and prosperity between our residents Gan-erdene said
Gatto gave Gan-erdene a Howell flag and a throw blanket created by the Historical Society
depicting the history of the township Gan-erdene also gave Gatto several items including a bronze
piece of art
Source NJcom
MONGOLIAN CALLIGRAPHY ADDED TO UNESCO CULTURAL HERITAGE LIST
State Parties at the 8th Session of the Intergovernmental Committee for the Safeguarding of the
Intangible Cultural Heritage in Azerbaijan unanimously agreed to register Mongolian calligraphy as
an intangible cultural heritage in need of urgent safeguarding on 2 December
―Mongolian heritage calligraphy is now being recognized by the world and I am grateful on behalf
of my country for decision makers said Secretary-General of Mongolian National Commission for
UNESCO Gundegmaa Jargalsaikhan He noted that Mongolian calligraphy was the fifth cultural
heritage item of Mongolia to be listed and now stands among the Mongolian epic traditional folk
dance the traditional music Tsuur and a circular breathing technique
Mongolian calligraphy is a 1000-year-old writing system that vertically connects continuous strokes
together to create a word Letters of Mongolian script have been created and taught by nomads
from generation to generation During the 1937-1940 purges of the Soviet era thousands of tutors
and traditional scholars of the script were killed Those who remained alive were banned from
mentoring the younger generation Soon after that or around 1946 a new Cyrillic script was
adopted as the only eligible script therefore banning all the teachings of old Mongolian script and
Latin lettering Only in the 1970s was the old Mongolian script re-introduced to scholars allowing a
limited number of classes in universities
After the 1990 democratic changes along with the revival of Mongolian identity interest in
traditional calligraphy reawakened As a sign of such revival the very first non-communist political
organization the Democratic Union of Mongolia used folded calligraphy as its main logo
Source Info Mongolia
THOUGH IMPROVING MONGOLIA STILL REELING UNDER CORRUPTION
The third joint survey by the Asia Foundation and Sant Maral Foundation to gather data on the
perception of corruption in Mongolia revealed that efforts to curb corruption in what is considered
as one of the worldlsquos most corrupt countries could be having impact
The survey shows a significant drop in the percentage of respondents who believe corruption has
increased in the last three years from 389 percent in November 2012 to 183 percent currently In
contrast in 2006 a majority of respondents (63) indicated that corruption has increased ―a lot in
the last three years The survey also shows that corruption has declined in importance as a critical
social problem since 2006 Despite these positive signs overall respondents indicated that
corruption remains a serious issue in some specific key areas
Conducted in September of this year the survey featured face-to-face interviews in 1360
households across Mongolia including seven districts in Ulaanbaatar and 21 counties in six
provinces A majority (766) cited that widespread corruption in the law enforcement agencies is
one of the main reasons the government has been unable to tackle corruption effectively When
corruption is perceived to be this widespread the attention will obviously turn to the performance
of the apex anti-corruption body the Independent Authority Against Corruption (IAAC) The survey
shows that the IAAC is slowly but surely beginning to gain confidence among citizens The
percentage of those surveyed who think that its performance is ―good or ―very good increased
from 78 percent in March 2010 to 203 percent in March 2013 In September 2013 the result shows
a new high of 294 percent
Peoplelsquos perceptions on corruption are often shaped by personal experiences Although very few
respondents in the survey said that they had actually paid a bribe themselves (8 percent about a 3
percent drop from 2012 and an 18 percent drop since 2006) as noted before many are not willing
to report instances where they are asked for one Similarly 36 percent of respondents said they
would not pay a bribe but 26 percent indicated that they would pay if they had the financial
capability
Basanta Pokharel is The Asia Foundation‟s chief of party for the STAGE program in Mongolia He
can be reached at basantapokharelasiafoundationorg The views and opinions expressed here
are those of the individual author and not those of The Asia Foundation
Source Asia Foundation
MPP DEMANDS DISMISSAL OF MINISTERS
Mongolian Peoplelsquos Party Chairman N Enkhbold and party head S Byambatsogt submitted to the
Speaker a request for the dismissal Minister of Finance Chultem Ulaan and of Economic
Development Minister Nyamjav ―Fortuna Batbayar
Our faction believes that these ministers must be held responsible for the worsening of the
national economic situation We also intend to do the same with other ministers after hearing
opinions of people said Byambatsogt
Source Montsame
FORMER TAVAN TOLGOI JSC DIRECTOR ARRESTED
The Independent Agency Against Corruption arrested former Tavan Tolgoi JSC director Kh
Tumenbayar for undisclosed reasons
An unnamed official source suggested that the arrest may be related to abuses of power and
payments to political parties as well as the construction of a high-class hotel in Dalanzadgad Soum
Umnugobi Aimag Kh Tumenbayar is a member of the Democratic Party a member of Parliament
and is an associate of ―Ajnai Bat-Erdene the Minister of Defense who helped Tumenbayar attain
position as the director of Tavan Tolgoi for 6 years and rise to head of the Umnugobi Aimag Citizens
Council
Tumenbayar voluntarily resigned from his position at Tavan Tolgoi last month The IAAC has
reportedly not given details to the reasons for the investigation opened on Tumenbayar because of
possible connections to high-ranking officials
Source Unuudur
MONGOLIA TURKMENISTAN JOIN INTERNATIONAL RACING FEDERATION
The International Federation of Horseracing Authorities (IFHA) has welcomed racing organizations
from Mongolia and Turkmenistan as affiliate members
Recent ratification to IFHA statutes at its annual General Assembly in October created a new
affiliate membership category within the Federation Thus the Federation of Mongolia Horse Racing
Sport and Trainers and the Turkmen Atlary State Association by unanimous vote of the IFHA
Executive Council in Paris in October have become the IFHAlsquos first two affiliate members
The Federation of Mongolian Horse Racing Sport and Trainers (FMHRST) is a non-governmental
organization (NGO) which serves to the development of equestrian sport in Mongolia and works to
protect the rights of horsemen who specialize in this national sport The new affiliates were
announced by IFHA Chairman Louis Romanet this week and several key appointments to IFHA
executive office positions and committees have also been made
Source Horse Talk
MONGOL TV HEAD MEDIA CAN HELP FIX THE BIG PROBLEMS
Nomin Chinbat head of Mongol TV has grander intentions than just ridding the countrys television
business of rampant pirated content and unlicensed formats The young executive wants to help
clean up Mongolian politics and the nation by creating a free and open media
―The networks are used as propaganda channels for politicians They are used very effectively every
four years at election time says Chinbat whom the Source named one of the 25 Most Powerful
Women in Global TV at MIPCOM 2013
―There are laws against piracy but they arenlsquot implemented explains Chinbat who says that
politicians in the country of roughly three million wonlsquot challenge journalists because their
relationships with them are too cozy
Mongol TV has invested in original programming licenses all of its imported content and runs
investigative journalism features highlighting social problems such as alcoholism and corruption
The company is organizing a Mongol TV Day for February 2014 to which it has invited major
international studios to raise awareness of the issues and introduce the global industry to
Mongolia Britainlsquos ITV and Americalsquos CBS are already confirmed and negotiations are ongoing with
other attendees The situation has improved in recent years with some channels having become
what Chinbat calls ―hybrids which license some sports rights but then steal others and copy
formats
―These days some of these channels might license 25 episodes of a format and make 50 But this is
actually progress says Chinbat
Chinbat and her team were at the Asian Television Forum (ATF) in Singapore looking for new
formats that can be produced within the constraints of Mongolian television budgets However with
Mongolias young populationmdash65 percent of the country is under 35 years oldmdashmobile viewing is on
the rise and the network is already working second-screen utilization and new media applications
This demographic sweet spot should guarantee strong growth in the population economy and
nascent entertainment sector in Mongolia in the coming decades
Source Hollywood Reporter
ANNOUNCEMENTS
ldquoMM TODAYrdquo ON MNB-TV FRIDAY 1900 TO 1910
BCM is pleased to announce that Mongolian National Broadcasting continues its cooperation with
BCM on ―MM Today This English news program is aired every Friday for 10 minutes and is
scheduled from 1900 to 1910 tonight Tune in to watch this program that reports stories from
todaylsquos BCM NewsWire
BCM WEBSITES
MONGOLIAN WEBSITE bdquoPRESENTATIONS‟ AND bdquoNEWS‟ SECTIONS
The Presentationslsquo section on BCMlsquos Mongolian website can be reached via bcmmnitgeluud
As a key component of BCMlsquos Mongolian website articles from the Newslsquo section and the
government website Open-Governmentmn are regularly updated
S Oyun Minister of Environment and Green Development presentation at BCM monthly meeting on
May 27 added to Mongolian website bcmongoliaorgmnилтгэлүүд
- Байгаль орчин ногоон хөгжлийн сайд СОюун Байгаль орчин ногоон хөгжлийн шинэчлэлийн
бодлого үйл ажиллагаа МБЗ-ийн сарын уулзалт 5 сарын 27 2013
___________________________________________
ENGLISH WEBSITE PRESENTATIONS MONGOLIA REPORTS bdquoINTERVIEWSbdquo MONGOLIAN
BUSINESS NEWS‟ bdquoPHOTO GALLERY‟
The following 13 presentations are from the Mongolia Investment Summit- 2013 in Hong Kong
November 18-20
- Regulatory Update Navigating Mongolialsquos legal framework for foreign direct investment
Javkhlanbaatar Sereeter Director General Foreign Investment Regulations and Registration
Department MINISTRY OF ECONOMIC DEVELOPMENT OF MONGOLIA
- Investment keynote Investing into Mongolia in 2013 ndash Where do the opportunities lie James
Passin Co-Founder and Manager FIREBIRD MONGOLIA FUND
- Development keynote Key challenges and opportunities for continued growth in Mongolia
Randolph Koppa President TRADE AND DEVELOPMENT BANK OF MONGOLIA
- Outlining government policies and long-term plans for Mongolialsquos mining sector Amarjargal
Khurelbat Head of International Cooperation Division MINISTRY OF MINING OF MONGOLIA
- From copper to met coal Demand and price outlook and expected impact on Mongolialsquos economy
Ghee Peh Managing Director Metals and Mining Research UBS SECURITIES ASIA
- How Mongolian banks and financial institutions are dealing with the challenges and opportunities
of a fast growing economy Norihiko Kato Chief Executive Officer KHAN BANK
- Update on the Mongolian stock market ndash Impact of the new Securities Law Altai Khangai Chief
Executive Officer MONGOLIAN STOCK EXCHANGE
- From investment banking to trade finance to micro credits to insurance Amartuvshin Hanibal
Managing Director TENGER FINANCIAL GROUP LLC
- Spotlight presentations Showcasing Mongolian investment opportunities Peter Morrow Board
Director ASIA PACIFIC INVESTMENT PARTNERS
- Spotlight presentation Showcasing Mongolian investment opportunities Munkhbat Davaatseren
CEO of Golomt Securities GOLOMT BANK
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources
Batmunkh Batkhuu Chairman SHARYN GOL JSC
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources
Jimmie Wilde Chief Operating Officer BERKH UUL JSC
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources Mona
Forster Executive VP ENTREacuteE GOLD INC
The following two presentations are from the ―ANTI-CORRUPTION LEGISLATIONPOLICY
INTERNATIONAL BEST PRACTICE ON TRANSPARENCY training seminar for businesses in
Ulaanbaatar November 18 2013
-―International business standard on transparency by Jelena Pesic Director PwC
-―Finlandlsquos best practice on transparency and anti corruption by Dr Pekka Hallberg (as it is
worldlsquos number one) Emeritus President of the Supreme Administrative Court of Finland
The following 15 presentations are from the Mongolia Mining Summit Perth Australia October 29-
31 2013
bull Mongolialsquos Minerals Future and Development by Otgochuluu Ch Director General Department of
strategic policy and planning at Ministry of Mining Mongolia at the Mongolian Mining Summit 2013
Perth Australia Oct 29-31 2013
bull Mongolian Economy Investment OpportunitiesChallenges Jim Dwyer Executive Director
Business Council of Mongolia at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31
2013
bull Oyu Tolgoi Lessons from the Gobi Houston Spencer Vice President Communications and Media
Relations Oyu Tolgoi at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Market dynamics for Mongolian coking coal in the Chinese market Graeme Hancock President
and Chief Representative at Anglo American Mongolia at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Speech by Mr Ariunbold Byamba Deputy Director Erdenes MGL LLC at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull Launching Mining Projects in MongoliandashA Major Contractorlsquos Perspective Eric Erdenebat
Tseveendorj Country Manager Orica Limited at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Investing in a dynamic legislative environment Elisabeth Ellis Managing Partner Ulaanbaatar
Minter Ellison at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Sandvik In Pit Crushing amp Conveying (IPCC) Doug Turnbull Principal Mining Engineer Sandvik
Mining Systems at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Ovoot Coking Coal Project David Paull Managing Director Aspire Mining at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull The business of being a third neighbor David Landers General Manager East Asian Growth
Markets at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Nuurst Thermal Coal Project Daniel Rohr Chief Financial Officer Modun Resources Ltd at the
Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Culture matters in building sustainable long-term business relationships Hana Tserenkhand
Byambadash Business Development Consultant AusMon Consulting and Dr Christine Hogan Adjunct
Professor Curtin University Consultant amp Author at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Maximizing Business Benefits from Your IT Investment Brad Skeggs Executive Director COSOL at
the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Presentation by Battsengel Gotov CEO Mongolian Mining Corporation at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull Mongolian Mining Sector Present and Future Developments NAlgaa Executive Director
Mongolian National Mining Association at the Mongolian Mining Summit 2013 Perth Australia Oct
29-31 2013
The ―Mongolia Reports section includes the following
- ―Ministry of Finance of Mongolia 2013 Government Debt Auctions by Bank of Mongolia
- ―Doing Business in Mongolia 2013 Country Commercial Guide for US Companies by US
Embassy
- ―Real Estate Report 2013 by Mongolian Properties
- ―Selected Macroeconomic Indicators November 20 2013 by International Monetary Fund
- ―2013 Second Annual Mongolian CEO Survey from PricewaterhouseCoopers Audit LLC
- ―Selected Macroeconomic Indicators data through October 16 2013 by International Monetary
Fund
- ―IMF Completes 2013 Article IV Mission to Mongolia by International Monetary Fund
The following are added to Interview Section from the Oxford Business Group Mongolia Reports
2013 book
bull B Byambasaikhan Chairman Business Council of Mongolia ―Talk is cheap
bull President Ts Elbegdorj ―Diversifying for growth
bull Jim Dwyer Executive Director Business Council of Mongolia ―Non-mining sectors budding
bull Peter Morrow Chairman American University of Mongolia ―Filling in the blanks
bull N Zoljargal Governor Bank of Mongolia ―Sustainable vision
bull Gansukh Minister of Roads and Transportation ―Accessing new markets
bull J Od President MCS Group ―Building interest
bull B Chuluunbaatar President and CEO of Monnis Group ―Climbing the ranks
bull Cameron McRae President and CEO Oyu Tolgoi ―Sitting on a copper mine
BCMs English website includes the ―Mongolia Business News section where the Open Letter to
Parliament and Government is available for download
BCM continuously posts news stories and analysis of relevance to Mongolia at Mongolian Business
News before they are all put together each week for Fridays weekly NewsWire
The ―Photo Gallery contains photos from the 6th Anniversary BCM Renewal dinner on November
11 2013
BCM Football Cup 2013 pictures are posted to the website - httpbcmongoliaorgenphotos350-
enalbumalbumid=200
The BCM NewsWire will continue to be issued each Friday incorporating items already on the home
page for a consolidated account of the weeklsquos events
SOCIAL NETWORK WITH BCM
BCM LAUNCHES NEW LINKED-IN COMPANY PAGE
The Business Council of Mongolia has launched a new company page on the social networking
website LinkedIn to network its members and followers including small-medium enterprises (SMEs)
The new page will allow BCM to alert followers to the latest news and information critical to their
businesses Memberslsquo businesses will be promoted Additionally BCM plans to deliver monthly
infographics on the latest data as well as videos and other media content as they come The bulk of
the content on the new page will be in Mongolian language to better cater to BCMs Mongolian-
speaking audience and members The following link can direct you to the New BCMs Linked-in page
httpwwwlinkedincomcompanybusiness-council-of-mongoliatrk=company_logo
The Business Council of Mongolia (BCM) has expanded its reach to your favorite social networks
Keep up to date on the latest business deals in Mongolia and how the climate for investment is
improving each day with BCM
Add BCM on Facebook at httpswwwfacebookcomTheBusinessCouncilOfMongolia to read the
latest announcements and comment on events carried in the NewsWire with the community
Hear breaking news and announcements as they happen when you follow BCM on Twitter at
httpstwittercombcmongolia
We have now 2482 fans on our Facebook fans page 1527 connections on LinkedIn network and
835 followers on Twitter
Of course for news information interviews event photos and announcements regarding our
organization visit the official BCM website at httpbcmongoliaorgen
ECONOMIC INDICATORS
INFLATION
Year 2006 60 [source National Statistical Office of Mongolia (NSOM)]
Year 2007 151 [source NSOM]
Year 2008 221 [source NSOM]
Year 2009 42 [source NSOM]
Year 2010 130 [source NSOM]
Year 2011 102 [source NSOM]
November 30 2013 120 [source NSOM]
Year-over-year (y-o-y) nationwide
Note 111 y-o-y Ulaanbaatar city November 30 2013
CENTRAL BANK POLICY LOAN RATE
December 31 2008 975 [source IMF]
March 11 2009 1400 [source IMF]
May 12 2009 1275 [source IMF]
June 12 2009 1150 [source IMF]
September 30 2009 1000 [source IMF]
May 12 2010 1100 [source IMF]
April 28 2011 1150 [source IMF]
August 25 2011 1175 [source IMF]
October 25 2011 1225 [source IMF]
March 19 2012 1275 [source Mongol Bank]
April 18 2012 1325 [source Mongol Bank]
January 25 2013 1250 [source Mongol Bank]
April 8 2013 1150 [source Mongol Bank]
June 25 2013 1050 [source Mongol Bank]
CURRENCY RATES ndash DECEMBER 19 2013
Currency Name Currency Rate
US dollar USD 164138
Euro EUR 224680
Japanese yen JPY 1579
British pound GBP 268874
Hong Kong dollar HKD 21170
Chinese Yuan CNY 27031
Russian Ruble RUB 4981
South Korean won KRW 155
Disclaimer Except for reporting on BCMlsquos activities all information in the BCM NewsWire is
selected from various news sources Opinions are those of the respective news sources
Batsuuri
He said Mongolia had successfully negotiated new terms for coal sales after months of selling its
coal reserves at a below-market rate The current deal is due to expire at the end of 2013 he said
He added that Erdenes Tavan Tolgoi plans to issue shares on international markets in 2015
Source Info Mongolia
RESERVES OF THE TAVAN TOLGOI JSC COAL DEPOSIT INCREASED TWOFOLD
A court ruling has allowed Tavan Tolgoi JSC to expand the size of its operating territory for an
added 70 million tons of reserves
Tavan Tolgoi JSC which operates upon the same coal deposit as Mongolian Mining Corp (MMC) and
Erdenes Tavan Tolgoi (Erdenes TT) saw its total reserves double with the expanded licensed area
Tavan Tolgoi has signed a memorandum of understanding with Chinas Shenhua Group to supply
coking coal for 20 years and will work in cooperation with Erdenes TT MMC and Shenhua for the
construction of a rail line to China
The rail line will connect the Mongolias Gashuun Sukhait port and the Gantsmod port of China
Source Unuudur
SHENHUA TO IMPORT 30-50M TONS OF COKE PER YEAR FROM MONGOLIA
Chinese coal producer Shenhua Group Corp Ltd will import 30 million to 50 million tons of coke
from Mongolia per year in the future
Zhang Guangjun deputy general manager with the Shenhua Science and Technology Research
Institute disclosed at a forum on 4 December that it would import 30 million to 50 million tons of
coke from Mongolia per year in the future Available data shows that the nation imported a total of
about 30 million tons of coke in the first half of this year and in line with industry observers the
import of Shenhua will deliver a strong impact on the domestic coke market
It has taken the group about a decade to gain the exploitation right of a Mongolia-based Tavan
Tolgoi coal mine Policy factors have been the strongest barrier from reaching that goal
Information from the China National Coal Association (CNCA) released on its website at the start of
November shows that it had signed a memorandum of understanding with three Mongolian firms
namely Erdenes Tavan Tolgoi LLC Energy Resources LLC and Tavan Tolgoi JSC on railway
construction cooperation and boosting coal trade And in line with some industry observers this is a
prelude to its success in gaining the exploitation right
Zhang reiterated that its failure to gain the exploitation right had a close tie with foreign
investment policies of Mongolian and so far the government had not even reached a conclusion
internally People in the circle said at the start of October that Mongolia released new policies for
foreign investments recently and according to the policies provided that a state-owned foreign
firm wanted to invest in industries including mining banking communications and news and media
in Mongolia Purchasing a stake exceeding 33 percent in any of these economic sectors by a foreign
state-owned entity requires a nod from concerned Mongolian authorities only at the ministerial
level And this might mean that the threshold for Chinese firms to invest in the Mongolian mining
industry would be lower
Source MENAFN
ERDENET MINING BRINGS MNT 370 BILLION TO STATE BUDGET
Erdenet Mining Co represents 30 percent of government revenues for industry contributing MNT
370 billion to the state budget in the year to December
According to the Erdenet Minings chief executive the amount of MNT 66 billion will go toward the
state by the years end Last year company represented 13 percent of income from taxes 10
percent of gross domestic product (GDP) and 20 percent of total export
Source Zuunii Medee
ASGAT SILVER DEPOSIT TO UNDERGO DEVELOPMENT
The board of Mongolialsquos 51 percent-owned joint venture with Russia Mongolrostsvetmet LLC decided
to begin development of the Asgat silver deposit
Asgat located in northwest Mongolia 1800 kilometers from Ulaanbaatar has a total average ore
reserve of 231 million tons and estimated 246 million ounces of silver The board agreed that the
project is economically viable now that a paved road leading to the development has been
complete The project is owned 51 percent by Erdenes MGL LLC and 49 percent by Russialsquos Rostec
The board agreed to the establishment of a working group to proceed with the next steps for
development
Source Business-Mongoliacom
MIAT TO HIRE FOREIGN-SKILLED MANAGEMENT
The Cabinet of Ministers decided on 14 December to hire a foreign-skilled executive management
team to operate state-owned MIAT Mongolian Airlines
The Cabinet hopes in hiring a foreign management it may produce greater profits increase its
competitiveness ensure greater flight safety and better prepare national staff The Cabinet
relayed orders to the State Property Committee and MIATs representative Council
Source Montsame
STANDARD BANK CONSULTANT DETAINED AMID DEBT DISPUTE
Mongolia has issued a travel ban on a New Zealand national consulting for Standard Bank Group Ltd
amid an escalation in a dispute with a local company over a debt repayment
Chris Bradley was part of a five-person team from Africalsquos biggest lender that visited Ulaanbaatar
last month to seek talks with the government over its USD 131 million in loans to Just Group LLC a
holding company said two people familiar with the matter The people asked not to be named
because they arenlsquot authorized to speak publicly Standard Bank alleges the loans are in default and
filed a lawsuit in July in a London court seeking repayment
Standardlsquos loans were made between 2007 and 2010 to Just Group to fund raw materials supplies
and debt repayments at state-controlled Erdenet Mining Corp and Ulaanbaatar Railways Bradley
said by phone on 2 December that he had been due to depart Mongolia on 29 November but ―is
restricted by the authorities from leaving Bradley said he was advised of his situation by local
police and that he is a suspect in an investigation
―I went in gladly to assist the police and compare notes said Bradley ―We are focusing on the
commercial aspects of this transaction and they are focusing on the criminal aspects The two
although linked are also running in parallel
Mongolia has barred foreign executives from leaving the country during investigations into
companies before Justin Kapla a US citizen and then-president of coal miner SouthGobi Sands
LLC was banned from departing at the end of last year and is still in the country after the nationlsquos
Independent Authority Against Corruption launched a probe into the companylsquos mining licenses
Sharavlamdan Batkhuu Just Grouplsquos controlling shareholder and other companies in the group
have defaulted on loans since 2011 Danjilaa Ganbat director of the banking supervision
department at Mongol Bank the nationlsquos central bank said in July Ganbat made his comments
after Just Grouplsquos Savings Bank Mongolialsquos fifth-largest lender was declared insolvent due to
affiliated companies defaulting on loans Batkhuu and Just Group are among the defendants in the
Standard Bank lawsuit
Standard Bank wasnlsquot able to arrange any meetings with Mongolialsquos government to resolve the debt
dispute the people familiar with the matter said Bradley was the Mongolia specialist on the team
and the only member not directly employed by the bank said one Bradley said he worked as an
employee of Standard Bank from 1999 to 2001 and has consulted on a contract basis for the bank
over the last nine years including five visits to Mongolia since May ―to engage with the government
on our issues the debt recovery
Cabinet Secretary Saikhanbileg Chimed said by e-mail on 3 December that he thinks itlsquos better to
solve the debt dispute out of court and planned to ―push appropriate people to respond
Bradley 50 is a native of Hokitika New Zealand ―In the absence of a New Zealand consulate the
British Embassy is working on behalf of Bradleylsquos consular welfare said Julian Pearson Deputy
Head of Mission at the British Embassy in Ulaanbaatar on 2 December
Source Bloomberg
KHAN BANK OPENS EXPRESS BANKING CENTER
Khan Bank LLC opened an express banking center on 10 December
The Express Banking Center services include a new ATM to deposit cash an E-Corner which allows
customers to make transfers between Khan Bank accounts review accounts through Internet
banking and receive account slips They can also be used to obtain foreign remittances
The Banking Centers are located at the State and Ulaanbaatar department stores on Peace Avenue
and will be open 24 hours every day
Source Khan Bank LLC
ERDENE ANNOUNCES NEW GOLD DISCOVERY AT ALTAN NAR
Erdene Resource Development Corp reported significant gold and silver results from the second
phase of trenching completed during the fourth quarter at its Altan Nar gold-polymetallic project
Results have been received for an additional 11 of the 28 trenches completed The trenching
program was designed to test 10 distinct mineralized zones across the 55-kilometer-long Altan Nar
target area Samples from the final thirteen trenches over the central Altan Nar prospect area have
been submitted to SGS laboratories with results anticipated during first quarter 2014
Highlights include the discovery of a new high-grade gold mineralized zone one kilometer north of
Discovery Zone (Maggie prospect) Significant gold mineralization (Northbow prospect) identified in
the northern portion of a previously untested 700-meter-long anomaly that widens and intensifies
to the south and gold and base metal mineralized zones confirmed at northwestern and
southeastern extent of the 55-kilometer-long Altan Nar target area (Northwest and Far South
prospects) All 11 trenches testing 6 distinct targets returned highly anomalous precious and base
metal mineralization
Source Erdene Resource Development Corp
XANADU MINES FORMS JV FOR COPPER EXPLORATION IN MONGOLIA
Xanadu Mines Ltd has established a joint venture company Mongol Metals with Ganbayar
Lkhagvasuren director and substantial shareholder of Xanadu to execute Xanadulsquos business and
copper exploration strategies
Xanadu recently returned broad copper and gold values from a 780-meter trenching program to test
coincident geophysical and geochemical anomalies at its Oyut Ulaan copper-gold porphyry project
in Mongolia The program has defined three near-surface mineralized porphyry centers with results
up to 85 meters at 075 percent copper with 054 grams per ton gold including 36 meters at 149
percent copper and 102 grams per ton gold The trenching was performed concurrently with the
recent drilling at the Diorite Hill prospect and drill testing of the new targets is scheduled within
the next phase of drilling
Source Proactive Investors
JATENERGY TESTS PROVE CONVERSION OF MONGOLIAN BROWN COAL TO SEMI-COKING COAL
Jatenergy Ltd is on track to pursue its Mongolian coal upgrading plans after testing proved that
coal from the country were highly suitable for conversion using Coal Plus technology
This sets the stage for the immediate start of its investment strategy with Monrospromugoli LLC
which could result in a USD 2 million upfront technology payment and ongoing annual royalties of
USD 176 million The test results had demonstrated that the high moisture high volatile low
calorific Mongolian brown coal can be easily converted into semi-coking coal using Coal Plus
―This report independently verifies that Coal Plus has potential in Mongolia executive chairman
Tony Crimmins said He added ―As the technology is already commercialized and in use in 5
locations in China for over 4 years we see high probability of financing this project in Mongolia
The confirmation that Mongolian brown coal is suited for conversion using Coal Plus into higher
value products paves the way for Jatenergylsquos agreement with Monrospromugoli to go ahead
Source Proactive Investors
SOUTHGOBI RESOURCES ANNOUNCES RESTATED FINANCIAL AND OPERATING RESULTS
SouthGobi Resources Ltd released its regular update on restated financial statements and
management discussion and analysis presentation In the consolidated financial statements for the
year ended 31 December 2012 the restated financial position at 31 December 2012 31 December
2011 and 1 January 2011 the results of operations for the years ended 31 December 2012 and 31
December 2011 and the statement of changes in equity and statement of cash flows for the years
ended 31 December 2012 and 31 December 2011
Following the correction in SouthGobilsquos point of revenue recognition revenues from affected coal
sales contracts are recognized in later periods than previously reported and some revenue has been
reported after 31 December 2012 as not all contracted coal has been collected by customers
During the periods from 2010 to 31 December 2012 trade and other receivables have been adjusted
lower and deferred revenue recognized to reflect revenue being recorded in later periods than
previously reported The inventory balance increased over the same period to reflect higher coal
inventory stockpile balances Prepaid expenses also increased with a corresponding decrease in
trade and other payables as coal sales royalty expenses were recognized in late r periods than
previously reported
The consolidated financial statements auditorslsquo reports and related financial information for the
affected periods contained in SouthGobilsquos filings filed prior to 14 November 2013 should no longer
be relied upon The restatements do not result in a change in cash at the end of any period The
statement of cash flows as reported does not change except for the reclassification of various items
within operating activities
Separately on 19 November 2013 SouthGobi paid USD 81 million in cash to the China Investment
Corporation in accordance with the convertible debenture agreement The amount related to the
64 percent per year cash interest payment and is payable semi-annually Further on 21 November
2013 SouthGobi issued 35 million common shares to China Investment
Source SouthGobi Resources Ltd
MSE CANCELS KHANSH INVEST‟S BROKERAGE LICENSES
The Mongolian Stock Exchange has invalidated the brokerage and securities dealing licenses of
Khansh Invest LLC on 4 December
―The companylsquos clients will be transferred to other brokerage firms that conduct professional
services in the market with licenses for broker-dealer related issues and it shall be governed
according to the concerning jurisdiction and regulations said the Source
Source Mongolian Stock Exchange
MNU PARTNERS WITH UNIVERSITY OF CALIFORNIA FOR RENEWABLE ENERGY
Mongolian National University (MNU) and the University of California announced 13 December the
signing of a memorandum of understanding to conduct high temperature solar thermal technology
research in Mongolia in 2014
Under the terms of the agreement the Mongolian Innovation and Technology Centre at MNU will
have a 100-kilowatt high-temperature non-tracking solar array on their campus that is not only the
first and the largest solar array of its kind in Mongolia but anywhere in the world
―We are delighted to be working with the University of California on this great project and we
particularly excited to make this announcement on the 15th Anniversary of MNU said MNU
Founder and Chairman Munkhbat Lkhagvasuren ―The thermal solar array will be installed
monitored and evaluated by our MNU Engineering Department under the advice and instruction of
the faculty of the University of California Munkhbat said
The technology was developed by University of Californialsquos solar director and professor Roland
Winston who is also a world-renowned scientist in the solar research field Winstonlsquos technology is
already operational at the University of California Purdue University and the Gas Institute of
Chicago although it has not yet been released for commercial deployment anywhere in the world
―My goal in working with MNU is to provide the technology and the staff he said ―Ultimately it
is the Mongolian engineering students that will be required to install and operate these systems as
well as determine the scope of the application beyond simply providing a high temperature heat
source
Source Mongolian National University
MCDONALDS INTERNATIONAL CALLS FOR FRANCHISEE TO POSSIBLY OPEN IN MONGOLIA
McDonalds International sent out a press release on December 10 calling for partners to approach
the company to open its first burger outlets in Mongolia
―We have not set a firm date for the development of McDonalds restaurants in Mongolia In the
future we may take steps to open McDonalds restaurants in Mongolia and if we seek a franchisee to
represent us the person will have the following characteristics
―High integrity business experience in the market history of success ability to work well with a
franchisor ability to complete a training program that can take about nine months willingness to
devote full time to the McDonalds restaurant business retail experience knowledge of real estate
market significant capital
The press release ends by inviting candidates to apply for a franchise
Source BNE
JAPANESE ldquoSUN RICE PLANT OPENS IN MONGOLIA
An opening ceremony for Mongolialsquos Technik Import LLC and Japanlsquos Niigata Kubota ―Sun Rice
factory in Ulaanbaatar on December 10
Niigata brown rice will be imported sorted and packed at the Ulaanbaatar factory which has a
daily capacity for the production of two to three tons of packaged rice The plant is equipped with
fully automated machines from Kubota The rice will begin sale in the domestic markets at MNT
5000 to MNT 7000 per kilogram
―Mongolia has been receiving rice from the people of Japan under aid program for many years
said Deputy Minister B Tsogtgerel ―During the latter event I and Ambassador Takenori Shimizu
were discussing that the period of receiving rice as aid is over and now the time of reciprocal
assistance has come and the ―Sun Rice factory is a sample of joint cooperation to produce the
world known quality in Mongolia
Niigata Prefecture is the second largest producer of rice in Japan after Hokkaido
Source Info Mongolia
MNBC MIGRATES TO DVB-T2 WITH THOMSON VIDEO NETWORKS
Video Mongolia Digital Broadcasting (MNBC) has launched Mongolias first ever DVB-T2 service using
head-end systems from Thomson Video Networks
Launched in 2007 MNBC was Mongolias first digital terrestrial TV network operator and will now be
able to broadcast up to 120 digital TV channels over five UHF transponders to maintain its position
and compete with Mongolias national satellite operator Working with systems integrator Digital
Horizon MNBC has deployed TVNs Vibe EM1000 multi-channel SD encoders and NetProcessor 9030
multiplexer and video processor with an embedded DVB-T2 gateway
Source Rapid TV News
CHINESE FIRM NEGOTIATING TO ACQUIRE JUST AGRO
A Chinese company is in negotiations to purchase Mongolias only meat exporter said a company
source
Just Agro LLC which owns 11 meat companies with the Makh Market brand is reportedly the subject
of negotiations for sale to a Chinese entity said the source who asked not to be named The Just
Agro company provides 40 percent of meat processing and 30 percent of storage in Mongolia and is
the only meat exporter in Mongolia
Last July authorities revealed that Just Grouplsquos Sh Batkhuu falsified signatures of the State
Property Committee and Erdenet Mining Cos director to receive USD 131 million in loans from
South Africas Standard Bank putting up the Erdenet Mine as collateral for the credit After Just
Group was dissolved the central bank took over all its assets including Just Agro
Source Unuudur
MONGOL TV EXPOSES MEDIA CORRUPTION WITH FAKE MCDONALDS STORY
An investigative news show on Mongol TV planted a false news story last week with all 9 of
Mongolias major local media outlets about McDonalds opening a branch in the country The
exercise was undertaken to expose corruption and the rampant practice of paid-for journalism in
Mongolia Mongol TV said
The appearance of a Mr P Rank promising McMutton burgers and goat milk-shakes in the
official press release set off no alarms at the media networks which took between USD 150 and
USD 700 from an undercover journalist to run the story on their websites on the front page of three
newspapers and on TV news on three networks including the local public broadcaster
―Soon the first letter our children learn will be Mlsquo Mr P Rank says with a golden shining smile
according to the fake release which also claimed McDonalds was to be sponsored by Mongolialsquos
Health Ministry and sold in schools all over the country
After Mongol TV unveiled the sting it invited representatives of the 9 duped media organizations to
explain their actions though all reportedly declined
Source Hollywood Reporter
EBRD ADOPTS NEW STRATEGY FOR ENERGY AND NATURAL RESOURCES SECTOR
The European Bank for Reconstruction and Development (EBRD) has adopted a new strategy that
will guide its investments in the energy and natural resources sector for the next five years EBRD
press release reported Tuesday
The bank sets out a commitment to helping its countries of operations move toward a sustainable
energy future The EBRD region which stretches from Morocco to Mongolia is faced with a
challenge of providing sustainable secure and affordable energy The energy strategy identifies
energy efficiency as the first and best response to this challenge
―What the EBRD brings to this challenge is our focus on structural reform said EBRD Managing
Director for Energy and Natural Resources Riccardo Puliti ―We have learnt from our work that
when properly channeled market forces can be harnessed to make energy sectors more sustainable
- environmentally economically and politically
The bank intends building on its well-established support for the Extractive Industries Transparency
Initiative by requiring clients operating in the extractive industries sector to disclose subsoil
contracts and licenses as well as all payments they make to local and national authorities
In the case of coal-fired generation the strategy supports the move to lower-carbon fuel sources in
response to the challenge of climate change In alignment with other international financial
institutions the EBRD will not finance any coal-fired power generation projects except in rare and
exceptional circumstances in which there is no feasible alternative energy source
The strategy also reinforces the EBRDs growing support for renewable energy which will include
financing both energy-generating capacity and key infrastructure such as transmission lines and
backup generation
―We have also developed and invested in the first wind farm in Mongolia - where it was also the
first new energy generator in 30 years said Puliti
Source Trend News Agency
SUSTAINABILITY HOSTS SESA WORKSHOP
Sustainability East Asia LLC organized a National Validation Workshop on 10 December as part of its
responsibilities for establishing a strategic environment and social assessment (SESA)
Participants from across the country arrived to represent government the private sector and non-
government organizations to discuss the proposed SESA The next step will be to assess mining
growth options and identify at least three likely growth scenarios which mining could bring to
Mongolia Afterward the SESA team will evaluate the environmental and social issues that are likely
to arise as a consequence of each scenario
The Mining Sector Institutional Strengthening Technical Assistance Project commissioned
Sustainability to conduct a strategic environmental and social assessment for Mongolias mining
sector
Sustainability will also perform a gap analysis of the legal regulatory and institutional capacity to
deal with each possible scenario An action plan is expected for SESA by summer 2014
Source Sustainability East Asia LLC
UB REGISTERS MATERNITY HOSPITAL NO 1
The new building annex for Maternity Hospital No 1 was registered as capital city property
13 December at a regular session of the Ulaanbaatar Citizens Council This maternity hospital
building was built with financing from Boroo Gold and was presented as a gift to the people of
Mongolia With a capacity to receive 150 mothers and children its total cost was MNT 92 billion It
includes the hospital building of 1169 square meters external heating clean water and sewer
water pipelines a diesel station an asphalt road a pedestrian walkway outdoor vegetation and an
external LED sign
This new building was commissioned 15 June The new annex has one vacuum operation room and
two standard operating rooms on the fifth floor 100 beds for women and 50 beds for infants on the
third and fourth floors paraclinical and sanitation units a pharmacy a conference room and
training rooms on the second floor an ambulatory section and reception on the first floor and staff
cafeteria closets washrooms and a disinfection chamber in the basement
Source Centerra Gold Inc Newsmn
RIO TINTO‟S SAM WALSH DIGS IN FOR THE LONG HAUL
Sam Walsh wants to remain as Rio Tinto PLClsquos chief executive beyond the end of his contract and
has told the minerlsquos board he will not be ready to retire in 2015
―I am there if they want me said Walsh ―Likewise if therelsquos someone else who can come in and
take what Ilsquove done to the next level thatlsquos fine too
The Australian 63 later this month replaced Tom Albanese 11 months ago after Rio decried
―unacceptable writedowns on its coal business in Mozambique Walsh says investors support his
strategy to cut costs and sell non-core assets
Walsh said he has explored selling all of Riolsquos aluminum business this year in what would be a
signature reversal of Albaneselsquos costly purchase of Alcan in 2007 But he says no offers have been
good enough while the business is not generating enough cash for an initial public share offering or
spin-off to Riolsquos shareholders Walsh has also been frustrated in attempts to sell Riolsquos diamonds
business
―Who would thank me if I sold something under value just to get a tick At the end of the day you
have to be pragmatic about things he said Offers ―werenlsquot in the bailiwick of where we thought
they should be
The Alcan deal epitomized Riolsquos poor recent dealmaking and Walsh admits the company had
―relaxed some of the controls it should have had Rio staff has now ―refound their mojo he said
On operating costs which Rio has said it will cut USD 3 billion next year he said ―There is rolling
momentum and thatlsquos important
Source Financial Times
KYRGYZSTAN FILES ECOLOGY DAMAGE LAWSUIT AGAINST CENTERRA
Kyrgyzstan is suing Canadas Centerra Gold Inc for 15 billion soms (USD 304 million) over what the
government says is ecological damage marking a new twist in a bitter row with the investor running
the largest Kyrgyz gold mine
The state environmental protection and forestry agency said in a statement that it had filed the
lawsuit at an economic court in the Kyrgyz capital Bishkek saying Centerra Gold had ignored its
earlier request for voluntary compensation It said the alleged ecological damage included
emissions of pollutants and waste dumps It said its claim referred to the companys operations
between 1996 and 2011
Centerra had said earlier that it viewed the governments claim as exaggerated and unfounded
The company disagrees with these charges and plans to give explanations on this matter in the
nearest time said a spokesman for the Kumtor Operating Company (KOC) the Centerra subsidiary
that runs the Kumtor mine in the Tien Shan mountains
The Toronto-listed miner which also owns the Boroo gold mine in Mongolia is already under
pressure from the Kyrgyz parliament which demands the state hold 67 percent in a proposed joint
venture to run the mine In September the government and Centerra Gold signed a memorandum
of understanding paving the way for Kyrgyzstan to swap its 327 percent stake in the Canadian firm
for 50 percent in a venture that would own Kumtor But in October the legislature voted to tear up
the document and seek control over the planned venture It gave the cabinet until 23 December to
report on its talks with Centerra Gold on setting up the venture Pearson said Centerra is having
constructive dialogue with the Kyrgyz government
Source Reuters
ECONOMY
FITCH AFFIRMS TWO MONGOLIAN BANKS AT B REVISES OUTLOOKS TO bdquoNEGATIVE‟
Fitch Ratings on 16 December revised the outlook on the Long-Term Issuer Default Ratings (IDRs) of
Khan Bank LLC and XacBank LLC to ―Negative from ―Stable At the same time the agency
affirmed the two Mongolian banks IDRs and viability ratings at B and b
The revision of the outlooks on both banks IDRs reflects weakening operating conditions as
indicated by the change in the Outlook for the Mongolian sovereign (B+) to Negative from Stable on
13 December The sovereigns outlook was revised due to mounting risks to the countrys economic
and financial stability Ratings on the two banks could be downgraded if pressures on asset quality
and liquidity intensify Persistent local-currency depreciation would reduce borrowers repayment
capacity and could lead to accelerated deposit withdrawals given the countrys high level of
dollarization
The banks ratings also remain sensitive to the withdrawal of credit stimulus as this could result in
asset deterioration on slowing economic growth or higher inflation Further decline in the
governments international reserves could also trigger a negative rating action as the banks
currency-related risk is counterbalanced by the authorities swap facility and unlimited foreign-
currency conversion Both banks ratings are also sensitive to any changes in their steady access to
capital from private-sector owners
Khan Banks Support Rating and Support Rating Floor (SRF) reflect Fitchs view that as the largest
bank in Mongolia it would be likely to receive state support in case of need However the
Mongolian sovereigns ability to provide timely support to the banking system remains limited as
underlined by its IDR of B+ A downgrade of the sovereign ratings would point to weakening in the
Mongolian governments ability to provide timely support to the banking system which put negative
rating pressure on Khan Banks SR and SRF In contrast Fitch expects XacBanks SR and SRF of 5B-
to be maintained even if the sovereigns rating is downgraded to B This is because the current SR
and SRF already reflect the agencys view that support from the sovereign in case of need cannot
be relied upon
The rating actions are as follows Khan Bank Long-Term Foreign-Currency IDR affirmed at B
Outlook revised to Negative from Stable Short-Term Foreign-Currency IDR affirmed at B Long-
Term Local-Currency IDR affirmed at B Outlook revised to Negative from Stable Viability Rating
affirmed at b Support Rating affirmed at 4 Support Rating Floor affirmed at B XacBank Long-
Term Foreign-Currency IDR affirmed at B Outlook revised to Negative from Stable Short-Term
Foreign-Currency IDR affirmed at B Long-Term Local-Currency IDR affirmed at B Outlook revised
to Negative from Stable Viability Rating affirmed at b Support Rating affirmed at 5 Support
Rating Floor affirmed at B-
Source Fitch Ratings
MONGOLIA SCORE FALLS ON POLITICAL RISKS INDEX FOR MINING INVESTMENT
An annual survey by Behre Dolbear of political risks saw Mongolia decline 5 points in an index
ranking Mongolia 19th out of 25 countries
Mongolia this year received a score of 269 compared with 32 last year Leading the countries
surveyed was Australia down 07 points from last year Russia with a total score of 171 compared
with 16 last year was the lowest ranking
The 25 countries considered in this yearlsquos survey are ranked based on seven criteria
-the countrylsquos economic system
-the countrylsquos political system
-the degree of social issues affecting mining in the country
-delays in receiving permits due to bureaucratic and other issues
-the degree of corruption prevalent in the country
-the stability of the countrylsquos currency and
-the competitiveness of the countrylsquos tax policy
Each criterion is rated on a qualitative scale from one (worst) to 10 (best) that reflects conditions
that promote investment growth in the mining sector The maximum score attainable for a country
is 70 points
Source Behre Dolbear Group
MONGOLIA LOOKS FOR SECOND CHANCE WITH FOREIGN INVESTORS
Saruul Ganbaatar the deputy head of Mongolias stock exchange hopes the countrys days of
interventionist economic policies are over and new laws ensuring foreign investors access to the
frontier markets industries will bring back sorely needed cash
Ganbaatar 32 who cut his investment teeth in Chicagos financial houses after graduating from
Loyola University is careful not to over-promise on what the stock market can deliver in 2014 and
beyond in terms of new listings or overall growth In October a law was passed easing ownership
restrictions for private companies to invest in the strategic industries A Securities Markets Law
coming into effect 1 January 2014 is expected to provide the key ingredient to attract deep
pocketed institutional investors such as mutual funds to invest
This really is the missing ingredient said Ganbaatar who has been traveling the globe promoting
the changes in the laws to global investors for the past two weeks
The stock index fell 19 percent in 2012 and year-to-date is down 115 percent although it did start
to climb with the newly passed laws On 1 January the new Securities Markets Law will allow
Mongolias commercial banks to offer custodial banking services Custodial banks serve as safeguards
for a firm or individuals financial assets playing a critical role in the final settlement of market
transactions Total market capitalization now is between USD 900 million and USD 1 billion Dont
expect the number of new listings to mushroom There may instead be a cull of companies Fifty-
five to 60 of them many of which have not traded in years are being reviewed for potential
delisting
The Mongolian Stock Exchange 100 percent state-owned is perhaps itself a candidate for
privatization It has been in a strategic partnership with the London Stock Exchange for two and a
half years
They have the right of first refusal he said
Source Reuters
CPI INCREASES TO 12 PERCENT YEAR-OVER-YEAR IN NOVEMBER
The National Statistical Office reported a 12 percent increase in the national consumer price index
(CPI) in November year-over-year
The CPI growth which also in November grew 13 percent from the previous month was explained
by a 14 percent increase in food prices and non-alcoholic beverages 23 percent for clothing
footwear and fabrics and 07 percent for housing water electricity and fuels
Source Info Mongolia
GROWTH SEEN IN EXPORT OF PRECIOUS METALS
The export value of precious metals grew 114 percent in November from the month before and 63
percent from the same period in 2012 according to the National Statistical Office
Exports totaled USD 38 billion in the year to December while imports grew to USD 58 billion The
foreign trade balance saw a deficit of USD 2 billion November saw exports of USD 381 million and
imports of USD 514 million with exports and imports in decline between July and November The
value of export products for the first 11 months was USD 11 billion Despite the gain in precious
metal exports exported minerals which represented 81 percent of all exports in the year to
November fell 129 percent from the year before
Source Zuunii Medee
MNT 788 BILLION WILL BE ENTERED INTO THE STABILIZATION FUND
The Stabilization Fund is set to collect MNT 49 billion this year and MNT 298 billion next
The Stabilization Fund was established to collect surplus revenue in years of economic gains from
the mining sector to cushion possible annual losses during economic downturns and weak
commodity demand Any gain in the price for gold and coal next year will also be reflected in
allotments to the fund
Source Zuunii Medee
ECONOMIC DEVELOPMENT MINISTRY PLANS TO PUT 81 OF BUDGET INTO CONSTRUCTION
The Economic Development Ministry plans to invest MNT 814 percent of its total investment budget
into construction
Beginning 1 January 2014 the ministry will provide MNT 9303 in loans toward the construction
sector The ministry will spend 39 percent of its budget for reconstruction and repair 10 percent
for the purchase of new techniques and technical equipment 3996 percent for infrastructure
2743 percent for education and health 636 percent for employment and agriculture and 2926
percent for other sectors of the economy
Projects include the construction of 30 clinics 27 cultural centers 6831 km of paved roads and
1032 m length of bridges Mongolia has received USD 55 billion in aid in the last two decades of
which 55 percent was in the form of low rate loans and 45 percent as non-repayable grants for
investments into agriculture infrastructure power and health sectors
Economic growth since 2011 has allowed Mongolia less aid than in the past The government has
now turned its focus on providing funding with concession agreements to large scale projects such
as the Nariin Sukhait-Shivee paved road and the power station at Mogoin gol Other projects include
Power Plant No 5 the Altanbulag-Ulaanbaatar-Zamyn Uud highway the Tavan Tolgoi- Khanbogd-
Khangi road and the Tuul Songino water reservoir complex
Source Zuunii Medee
TT POWER PLANT MAY NEED CONCLUSION TO OT DISPUTE SAYS DIRECTOR
Uninterrupted development of the Tavan Tolgoi power plant will ride on the outcome of disputes
concerning Oyu Tolgois underground mine said the director of the plant
―One of the main risks is the issue of a main user Enkhsaikhan said ―The key buyer of the power
from the TT Power Plant is OT Due to the uncertainty over phase twolsquo and unresolved matters
with the government of Mongolia OT is not regarded as a reliable buyer on a stand-alone basis
He added that the power company may request a guarantee from Oyu Tolgoi
A consortium that includes Koreas Posco Energy and Daewoo Engineering and Construction GDF
Suez Energy Asia Japans Marubeni Corp and Kansai Electric Power in March was selected for
development of the plant which has a preliminary estimate cost of USD 1 billion Those expenses
include installation of 150 kilometers of electric lines between Tavan Tolgoi and Oyu Tolgoi The
consortium will be expected to raise 30 percent of the cost itself while the remaining 70 percent
will come from bank loans However the uncertainty surrounding the Oyu Tolgoi copper mine could
create more hold ups
Source Zuunii Medee
CABINET TO CONCLUDE CONCESSION ON ALTANBULAG-ZAMYN UUD HIGHWAY
The Cabinet of Ministers ordered ministers to conclude a concession agreement for the Altanbulag-
Ulaanbaatar-Zamyn-Uud highway
The government is planning to establish the concession contract with the Chinggis Land
Development Group which according to the agreement shall have exclusive rights to construction
ownership and transfer of property using its own financing The concessionaire shall complete the
construction within three years after that shall operate the facility for another 30 years before
transferring the ownership to the Government
If Chinggis Land accepts these terms it would be responsible for developing a feasibility study and
blueprint of the project to be approved by the relevant ministries before concluding a financing
agreement The concession agreement will come into effect after the Chinggis Land Development
Group obtains a financing agreement for USD 1 billion from a commercial bank of Mongolia
The government will be responsible for freeing up the land where the highway is planned while the
Chinggis Land would cover the costs for doing so
Source Montsame
MNT 116 BILLION WILL BE SPENT FOR BUILDING EMERGENCY ALARMS IN UB
The National Emergency Management Agency has installed an emergency alarm system in 60
locations of Ulaanbaatar The alarm will alert citizens to natural disasters such as earthquakes
The alarms will be controlled from a center by microwave radios and satellite communication
devices
Source Udriin Sonin
EIU CLARIFIES EXTENT OF OFFICIAL ESTIMATES OF OIL SHALE RESERVES
The latest research from Mongolias mining ministry gives a clearer picture of oil shales
development potential in the coming years Although Mongolia has long been known to have
substantial oil shale deposits previous estimates were extrapolated from rudimentary surveys
conducted in the 1990s and thus left the actual reserves open to speculation
Plans to develop the industry took shape only in April 2013 when an American company Genie
Energy signed a five-year deal with the Petroleum Authority of Mongolia to explore oil shale
reserves in central Mongolia Genie also plans to build a USD 4 billion processing factory in Tuv
Aimag According to government projections the processing plant will generate USD 850 million of
tax revenue annually Aside from the economic benefits of the project domestic fuel sources could
help Mongolia to improve its energy security by loosening the countrys dependence on its powerful
neighbors At present 90 percent of Mongolias oil and related products come from Russia with most
of the remaining amount being imported from China
Yet the benefits of large-scale oil shale extraction are not as clear as they might seem at first
glance Most importantly Mongolias oil shale resources should not be confused with the shale oil
phenomenon that is currently sweeping the United States Oil shale (also called kerogen) is more
expensive to extract than shale oil and carries greater environmental costs In particular oil shale
requires a large amount of water to process which could be a risky proposition in Mongolia where
hydrological resources are already under strain Although other countriesmdashEstonia in particularmdashuse
oil shale as a substitute for coal extracting liquid fuel from the shale is a complex and relatively
untested process
Genie Energys progress on the project seems more substantial than that of comparable coal
liquefaction projects that have faltered in the region However environmental technical and
political limitations suggest that Mongolias overall dependence on foreign fuel will not change
significantly in the foreseeable future
―We remain doubtful that oil shale will play a significant role in Mongolia in the next two years so
our economic growth and trade forecasts will remain unchanged said the Source
Source Economist Intelligence Unit
MONGOLIA AND THE THREAT OF THE RESOURCE CURSE
Mongolia is at a crossroads while investors complain the government is dragging its feet on allowing
miners to start digging it is crucial that it get things right at the early stages of the resources
boom
Mongolias challenge will soon be the worlds says Richard Dobbs and his team at McKinsey in a
report predicting a USD 17 trillion investment bonanza by 2030 to keep up with demand for oil gas
and other materials In 1995 about 58 countries depended on resources for the bulk of their output
and wealth In 2011 that number had risen to 81 By 2030 roughly half of the worlds economies
will essentially become giant filling stations for developing superpowers from China to South Africa
That means that instead of the world moving toward greater transparency democracy and freer
markets we could see rising corruption levels and even greater income inequality
Economies with natural-resource endowments have a huge opportunity to transform their
prospects but history suggests that they could all too easily squander the windfall says Dobbs
director of the McKinsey Global Institute in London
The world would be wise to take steps today to break this cycle McKinsey recommends several
While not terribly original they include strengthening public institutions and good governance
building decent infrastructure boosting national competitiveness promoting sound fiscal policy
making and spending the windfall wisely while engaging in forward-looking economic and social
planning The trouble is that political will and integrity is often the first casualty once the minerals
start flowing out and the spoils come pouring in
Mongolia is at that very crossroads today Investors complain the government is dragging its feet on
allowing miners to start digging But its more important to get things right at the early stages of
the resources boom That means acting now to create the institutions and regulatory frameworks
needed to ensure revenue transparencymdashknowing exactly how much money is being dug out the
ground and where its going Why not set up a sovereign-wealth fund to save for Mongolias future
When the stakes are that high a little patience can go a long way
Source Bloomberg
MONGOLIAS NOMADS WARM TO SOLAR POWER
In Mongolia often known as the land of the blue skies the sun shines for 250 days on average each
year It beats down on the sparse plains and on the Gobi desert that spans the countrys southern
border with China
It shines even during the frigid winter days on the hundreds of thousands of nomads who still roam
the steppes herding animals and living in dome-like tents calling gers About 800000 of Mongolias
28 million inhabitants still live the traditional nomadic lifestyle that has remained largely
unchanged for generations Apart from the addition of motorbikes the occasional petrol generator
and a passing trade from intrepid tourists wanting to stay in a ger for the night life is almost the
same as that of many nomads grandparents and great-grandparents Almost but not exactly
Dotted across the steppes glints of light can be seen as the sun bounces off the solar panels that
have been installed on the sides of gers made of felt and yaks wool At the start of this millennium
Mongolias herders and nomads had little or no access to modern electric power and its potential
benefits But as of 2013 thanks to a concerted push by the Mongolian government almost 70
percent of nomadic people have access to electricity Bor a herder who mainly travels around
western Mongolias Arkhangai province is one of the people whose family benefits from portable
solar home systems (SHS)
We use it for generating the power for lighting in the ger charging phones we can also generate a
fridge to keep food longer and we can run a television That is very useful for us because we can
get the most recent weather forecast which is important for our work and keeping our animals
safe Before we had power it was very difficult Now it is almost like living in the city
The ability to charge mobile phones is also important for the herders who often have children
staying at boarding schools Access to electricity also allows families to contact emergency health-
care and doctors for advice without having to make the often arduous journey to the nearest village
or town
The solar systems were distributed and installed with the help of the World Bank after the
Mongolian governments National 100000 Solar Ger Electrification Program ran into difficulties A
World Bank report Capturing the Sun in the Land of the Blue Sky describes the difficulties faced by
the Mongolian government on its ambitious project
By 2005 five years into the plan 30000 families had been kitted out with an SHS but then the
program began to stagnateThe government of Mongolia recognized that considerably more effort
was necessary not only to keep the program on track but to scale-up implementation in order to
achieve the National 100000 Solar Ger Electrification Program target the report said In 2006 the
World Bank agreed to cover half of the initial outlay costs for each family as well as after-sales
maintenance with 50 centers set up across the country including at least one in each of its 21
provinces so that the herders would not have to travel to Ulaanbaatar every time the solar panels
needed maintenance
The SHS project also offers environmental benefits to a country where the ratio of carbon dioxide
emissions to economic output is ten times higher than the world average because of the increase in
mining over the past decade as the true extent of Mongolias mineral wealth became apparent The
solar systems are slowly replacing the diesel generators used by some nomads as a means of
generating power although they are still using stoves for heating burning wood coal and dung
throughout the year
Source Al Jazeera
IRON-ORE AND COAL PRICES GO SEPARATE WAYS
Prices of the key ingredients in steel productionmdashiron ore and coking coalmdashare moving along sharply
different paths as mining companies resist cutting coal output despite the market being awash with
the raw material
While iron-ore prices have risen 22 percent since May coking coal is still searching for a rebound
Coking-coal prices are off more than 4 percent over the same period China is on course for another
year of record steel production with supply directed to the construction of high-rise apartment
buildings the manufacture of luxury cars and other uses
There is simply too much coal on the market the International Energy Agency said in a report this
week
Shipments of steelmaking coal from Australiamdashthe worlds biggest exporter of the commoditymdashare
forecast by the government to rise to 178 million tons in 2015 from 145 million tons last year Most
goes to China which accounts for 60 percent of global demand In contrast global iron-ore
exporters are struggling to increase output in areas other than Australias remote Pilbara region
supporting prices of that commodity The spot price of iron ore climbed to nearly USD 140 a ton
earlier this month a four-month high Prices have since eased a bit to USD 13430 a ton but
remain well above the consensus forecasts of analysts at the start of this year
Coal miners could scale back production but that isnt always easy to do In Australia many miners
are locked into so-called take or pay contracts with rail and port operators Many analysts dont
expect coking-coal prices to rebound for at least another 12 months RBC Capital Markets expects
coking-coal prices to average USD 154 a ton in 2014 down from USD 159 a ton forecast for this
year Instead they see more chance that iron-ore prices will come down more sharply RBC predicts
an 11 percent fall in iron-ore prices next year as new supply from Anglo Americans Minas Rio
project and mines owned by Fortescue Metals Group Ltd is added to the market UBS is even more
bearish predicting iron ore will fall below USD100 in the second half of 2014
Source Wall Street Journal
ARE COMMODITIES TRADERS bdquoTOO BIG TO FAIL‟
When the banking industrylsquos top lobby group commissioned a report by on commodity trading
houses the idea was to show trading houses like Glencore Xstrata Vitol or Cargill were ―too big to
fail and therefore needed to be regulated in a similar manner to the banks
But instead of highlighting the inherent issues surrounding the industry the report found trading
companies posed less systemic risk than the big banks As a result the Global Financial Markets
Association which commissioned the report decided not to finalize or publish it (The GFMA claims
that it often commissions reports which are shared with regulators and other interested parties but
never published) But the debate hasnlsquot ended
A separate report published in July by the Centre for European Policy Studies a think-tank argued
the growth of commodity trading houses which underpin the global trade in raw materials could
―have systemic implications Commodities trader Trafigura has become the latest to wade into the
debate In its recent prospectus for a EUR 500 million bond issue the worldlsquos second largest metals
trader and third biggest oil trader addresses the GFMA report as well as the issue of systemic risk
Making some tart observations the trading house says the GFMA paper was aimed squarely at the
Financial Stability Board a group of global regulators
―[The report] was widely seen as a tactic by some banks active in the commodity trading space as a
way of creating more equality between market participants by seeking to usher in further
restrictions on pure commodity trading companies the prospectus says
Commodity traders are facing the need to be more open about their operations and lift the veil of
secrecy Indeed the author of the GFMA reportmdashCraig Pirrong a widely respected academicmdashis
working on a white paper on commodities traders Commissioned by Trafigura it will look at what
commodities trading houses activities and the recent trend to accumulate more assets risk
management as well as looking at different types of commodity companies
Source Financial Times
SMOG DARKENS SHANGHAIS PROSPECTS FOR BECOMING A GLOBAL FINANCIAL CENTER
In the debate over which matters more in China money or quality of life the quality-of-life side
may have found the ultimate argument If you cant breathe nothing else really matters And itlsquos a
debate Mongolia has to have as it makes its own steps towards industrial and economic growth
Chinas pollution problem is spreading and growing worse a fact on stark display last week in
Shanghai the countrys financial center A stretch of filthy-air days in that coastal city so
thoroughly shocked residentsmdashwho had largely escaped the smog that has long plagued the likes of
Beijing and Harbinmdashthat it inspired fresh talk about getting away from China Lawrence Shu a
Shanghai-based partner at Hylands Law Firm said he and his friends are thinking more seriously
about moving abroad
The smog had a big impact because it feels really bad if you cant breathe freely he said
The environment used to take a back seat among the Chinese But as they get richer they are
traveling abroad more making the pollution back home more obvious The Internet also
contributes Blue-sky pictures posted on social networks by Chinese travelers abroad constantly
remind folks of what is lacking at home and Chinese now use various apps to track air-quality data
If Shanghais smog discourages smart financial professionals from wanting to live there that will
hinder Chinas effort to create a global financial center If businesses such as financial companies
and luxury-goods makers perceive that Chinas elites are spending more time outside their home
country they will be less willing to invest in China
Most rich Chinese havent packed their bags and left yet but they are keeping their options open
Relocation is a big decision said Anne Wang who works in the financial industry in Shanghai But
just in case she recently received a US visa that would allow her to live there
Source Wall Street Journal
POLITICS
MINERALS POLICY ENTERS FINAL DISCUSSIONS
The government published a final draft of Mongolialsquos State Policy on the Minerals Sector for 2013
through 2025
The document was first presented to Parliament in July and is now entering final discussions during
the autumn plenary session of Parliament following a 42 percent drop of foreign investment and 23
percent fall in the currency year-on-year
―We have reviewed the proposed State Policy on the Mineral Sector which we feel will be a
positive step forward if passed said the Source ―The passing of this policy will result in more
transparency and an increasing participation from foreign investors That said it will take time for
these feats to be accomplished Investors will be weary of Government promises as they seek
longevity to prove Government intentions
The proposed policy is divided into four main sections rationale principles main policy and
implementation-results The major points stressed in the policy include transparency and
responsible mining The law sends the message that growth is going to be driven by private sector
participation and the intent to provide a stable investment environment technological innovation
and value-added activities
Key priorities of the law since it was first unveiled include stability of taxation and the legal
environment an end to any discrimination between foreign and national investors and the
preservation of strategic resources and deposits
This most recent version saw the inclusion of a new section supporting development of local areas
and the interests of local citizens Other key elements include explorationmdashwhich would see
greater government regulation for strategic mineral deposits while cutting down bureaucracy and
conducting scientific researchmdashproduction support and local support The new document also
highlights greater support for non-governmental organizations for the environment allowing them
to claim damages from mining operations the establishment of funds to support economic
diversification environmental protections and land rehabilitation
The new draft has removed the risk assessment section and replaced it with a section on
implementation This includes the improvement of the legal environment and producing of relevant
regulations programs and projects for 2013 to 2015 followed by the implementation of programs
and projects from 2014 to 2025 and finally the provision of conclusions on midterm policy
implementation and further planning for up to 2020 and 2025
―We believe that this policy will take us one step closer to attracting investors and supporting
private sector development in Mongolia said the Source ―Despite current investor hesitation this
state policy in addition to the new amended Minerals Law set to pass next year will further
encourage investors to enter the market and will build support for the junior mining community
Source Mongolian Investment Banking Group
PARLIAMENT UNANIMOUSLY BACKS ldquoSMART GOVERNMENTrdquo INITIATIVE
Parliament has unanimously backed President Tsakhia Elbegdorjs ―From Big Government to Smart
Government initiative for government reform concepts having signed a joint statement of support
on 13 December
The joint statement gives full support to the presidents initiative and commits to cooperation for
its undertaking This includes support for enhancing government systems and policies in line with
democracy and a market economy improving the capacities of public services and curtailing
government intervention into private business affairs Also included are protections to private
business including establishing government structures for rule of law support to domestic
industries and honoring contracts The fight against corruption is another main perogative
On 16 November 16 the Office of the President of Mongolia organized a national consultative
meeting on this topic at the Government Palace Elbegdorj next met with members of the
Parliament on 9 December to organize an open dialogue with representatives of Parliament for an
appeal for them to sign the joint statement Reaffirming the commitment of the Mongolian
lawmakers to a breakthrough reform of the Government the leaders of party floors and factions in
the Parliament and independent members of the Parliament signed the document for the reform on
December 13 2013
Source Montsame
GOVERNMENT CALLS TO END PRACTICE OF APPOINTING MPS AS MINISTERS
The coalition government has thrown their support behind President Tsakhia Elbegdorjs proposal to
prohibit Parliament members from serving as cabinet ministers
Democratic Party members discussed a draft resolution and proposed amendments submitted by the
president for the new restriction at a party meeting on Monday The draft amendments were
unanimously backed by the faction The Justice Coalition which includes the Monglian Peoples
Revolutionary Party and Mongolian Democratic Party came to the same conclusion following its own
meeting said coalition head N Battsereg on Monday
Source Montsame
COMMITTEE LEADERS TO BE ELECTED THIS MONTH
The coalition government will soon be electing officials to lead the various committees in
government
Parliament has 8 standing committees to elect leaders to this month with each committee to be
led by a representative of the coalition government Current committee heads are Ts Tsolmon at
the Security and Foreign Policy Committee G Bayarsaikhan at the Environment Food and
Agriculture Committee Z Bayanselenge at the Social Policy Education Culture and Science
Committee R Burmaa at the Petition and Requests Committee A Bakei at the State Structural
Committee Ts Davaasuren at the Budget Committee Sh Tuvdendorj at the Legislation
Committee and B Garamgaibaatar at the Economic Committee
Source Zuunii Medee
FOREIGN CURRENCY PAYMENTS BANNED FOR MININGEXPLORATION LICENSING FEES
The Ministry of Finance has banned the use of foreign currencies to pay for mining and exploration
licensing fees to the Mineral Resources Authority beginning 1 January 2014
The Ministry of Finance has prompted these entities and companies holding licenses to comply with
Mongolian currency law that states that all businesses and agencies must do business in Mongolian
tugrug According to the 2009 law transactions must not be carried out in foreign denominated or
foreign currency based rates
Source Newsmn
MINING MINISTRY TO COOPERATE WITH ASSOCIATION OF FLUORSPAR EXPLORERS
The Ministry of Mining Wednesday established a memorandum of mutual understanding with the
Association of Fluorspar Explorers (AFE) to cooperate in augmenting the countrylsquos export
In addition to expanding export goals include developing transparent and responsible mining
improving qualities and standards of fluorspar metallurgy and flotation concentrate and in
increasing the production output of the minerallsquos ore enrichment The hope is the memorandum
will create a launching point for a national program for fluorspar its exploitation increase the
volume of production by intensifying research and increase competitiveness in international
markets It will also be necessary to introduce the latest technology to the country along with
running joint trainings with foreign NGOs the Ministry said
Source Montsame
DP REJECTS AMARJARGAL‟S RESIGNATION
Parliament voted against MP R Amarjargallsquos resignation request on 12 December
During Tuesdaylsquos meeting the majority of the Standing Committee on State Structure voted against
Amarjargal`s resignation The head of the Democratic Party (DP) caucus D Erdenebat took a
strong stance against letting Amarjargal leave
Amarjargal said he wanted to resign to take responsibility on behalf of his party members for the
current political situation and economic restraints in Mongolia DP members agree with his
conclusion but encourage him to make the effort and participate for social change and
development Members of the opposition Mongolian Peoplelsquos Party members said that Amarjargal
could see the problems and nature of the majority of Parliament and praised his plan to resign
Source Newsmn
MPP HEAD TO STEP DOWN
Mongolian People Party (MPP) Head N Enkhbold has requested his resignation as party leader
MPP Deputy Head D Oyunkhorol said 9 December that Enkhbold submitted his request to step down
during a party meeting Oyunkhorol said Enkhboldlsquos resignation was due to personal reasons The
new party head will be appointed by the MPPs governing board
Source Udriin Sonin
FIFTH ROUND OF NEGOTIATIONS FOR THE JAPAN-MONGOLIA ECONOMIC PARTNERSHIP
AGREEMENT
The fifth round of the negotiations for the Japan-Mongolia Economic Partnership Agreement (EPA)
will be held from 16 to 19 December in Ulaanbaatar
The Japanese delegation will be led by Jun Yokota ambassador in charge of economic diplomacy
and the Mongolian delegation will be led by Ochirbat Chuluunbat vice minister for economic
development Experts from relevant ministries and agencies of both sides will participate in the
meetings
In this round negotiations are in areas including trade in goods and investment
Source 4-Traderscom
FIRST MONGOLIA-CHINA JOINT BORDER COMMISSION MEETING IN BEIJING
The very first meeting of Mongolia-China joint commission of borders took place 11 and 12
December in Beijing China
This meeting was co-chaired by T Togsbilguun a director of the Department of Neighbour
Countries of Mongolialsquos Ministry of Foreign Affairs and by Xiao Jiangguo a representative of border
checkpoint and seaport affairs Both sides shared on ideas for implementation of the
intergovernmental contract on the border regime and reached some agreements on conducting a
joint examination in the border signs and on activating the collaboration in law enforcement around
frontier areas After this they discussed issues of developing border checkpoints at a same level
putting some border checkpoints into a permanent regime giving an international status to four
checkpoints
The gathered also made a protocol on their meeting and inked its results The next meeting will run
in 2014 in Ulaanbaatar
Source Montsame
BELARUS TO OPEN EMBASSY IN MONGOLIA IN 2014
Belarus will open its embassy in Mongolia in 2014 reads a resolution from the Belarus Council of
Ministers of the Republic of Belarus from 12 December 2013 Belaruslsquo Finance Ministry will finance
the costs of opening and maintaining Belarusian Embassy in Mongolia from the funds set aside in its
national budget for the opening and maintenance of diplomatic missions and consular missions of
the Republic of Belarus abroad
Source Belarusian Telegraph Agency
HOWELL NEW JERSEY USA BECOMES SISTER CITY OF SUKHBAATAR DISTRICT
The Howell Township and the Sukhbaatar district in Mongolia signed a memorandum of
understanding to create sister citieslsquo between Howell New Jersey USA and the Sukhbaatar District
on Tuesday
The program was aimed at opening up talks on how each can benefit from one another Mayor
William Gatto said Howell Township is a very diverse city and theyve taken the relationship with
the Kalmyk community here in Howell and expanded it to a country where they have had no
relationship in the past he said
The sister citieslsquo program will allow both Mongolia and Howell to exchange ideas and come up
with new and better ways to do things that benefits both cultures Outside of Mongolia Howell has
the largest population of Kalmyks in the world with many living in the Freewood Acres section of
the township Gatto said
Some of the goals of the agreement include promoting a common prosperity and development for
both parties an electronic pen-pal program and education opportunities for exchange students
Through a translator Baljinnyam Gan-erdene of the Citizens Representatives Council of Sukhbaatar
District said he came to Howell to see how democracy works in the United States
Im really glad and hope that this unforgettable and successful visit opens the door to our
friendship and prosperity between our residents Gan-erdene said
Gatto gave Gan-erdene a Howell flag and a throw blanket created by the Historical Society
depicting the history of the township Gan-erdene also gave Gatto several items including a bronze
piece of art
Source NJcom
MONGOLIAN CALLIGRAPHY ADDED TO UNESCO CULTURAL HERITAGE LIST
State Parties at the 8th Session of the Intergovernmental Committee for the Safeguarding of the
Intangible Cultural Heritage in Azerbaijan unanimously agreed to register Mongolian calligraphy as
an intangible cultural heritage in need of urgent safeguarding on 2 December
―Mongolian heritage calligraphy is now being recognized by the world and I am grateful on behalf
of my country for decision makers said Secretary-General of Mongolian National Commission for
UNESCO Gundegmaa Jargalsaikhan He noted that Mongolian calligraphy was the fifth cultural
heritage item of Mongolia to be listed and now stands among the Mongolian epic traditional folk
dance the traditional music Tsuur and a circular breathing technique
Mongolian calligraphy is a 1000-year-old writing system that vertically connects continuous strokes
together to create a word Letters of Mongolian script have been created and taught by nomads
from generation to generation During the 1937-1940 purges of the Soviet era thousands of tutors
and traditional scholars of the script were killed Those who remained alive were banned from
mentoring the younger generation Soon after that or around 1946 a new Cyrillic script was
adopted as the only eligible script therefore banning all the teachings of old Mongolian script and
Latin lettering Only in the 1970s was the old Mongolian script re-introduced to scholars allowing a
limited number of classes in universities
After the 1990 democratic changes along with the revival of Mongolian identity interest in
traditional calligraphy reawakened As a sign of such revival the very first non-communist political
organization the Democratic Union of Mongolia used folded calligraphy as its main logo
Source Info Mongolia
THOUGH IMPROVING MONGOLIA STILL REELING UNDER CORRUPTION
The third joint survey by the Asia Foundation and Sant Maral Foundation to gather data on the
perception of corruption in Mongolia revealed that efforts to curb corruption in what is considered
as one of the worldlsquos most corrupt countries could be having impact
The survey shows a significant drop in the percentage of respondents who believe corruption has
increased in the last three years from 389 percent in November 2012 to 183 percent currently In
contrast in 2006 a majority of respondents (63) indicated that corruption has increased ―a lot in
the last three years The survey also shows that corruption has declined in importance as a critical
social problem since 2006 Despite these positive signs overall respondents indicated that
corruption remains a serious issue in some specific key areas
Conducted in September of this year the survey featured face-to-face interviews in 1360
households across Mongolia including seven districts in Ulaanbaatar and 21 counties in six
provinces A majority (766) cited that widespread corruption in the law enforcement agencies is
one of the main reasons the government has been unable to tackle corruption effectively When
corruption is perceived to be this widespread the attention will obviously turn to the performance
of the apex anti-corruption body the Independent Authority Against Corruption (IAAC) The survey
shows that the IAAC is slowly but surely beginning to gain confidence among citizens The
percentage of those surveyed who think that its performance is ―good or ―very good increased
from 78 percent in March 2010 to 203 percent in March 2013 In September 2013 the result shows
a new high of 294 percent
Peoplelsquos perceptions on corruption are often shaped by personal experiences Although very few
respondents in the survey said that they had actually paid a bribe themselves (8 percent about a 3
percent drop from 2012 and an 18 percent drop since 2006) as noted before many are not willing
to report instances where they are asked for one Similarly 36 percent of respondents said they
would not pay a bribe but 26 percent indicated that they would pay if they had the financial
capability
Basanta Pokharel is The Asia Foundation‟s chief of party for the STAGE program in Mongolia He
can be reached at basantapokharelasiafoundationorg The views and opinions expressed here
are those of the individual author and not those of The Asia Foundation
Source Asia Foundation
MPP DEMANDS DISMISSAL OF MINISTERS
Mongolian Peoplelsquos Party Chairman N Enkhbold and party head S Byambatsogt submitted to the
Speaker a request for the dismissal Minister of Finance Chultem Ulaan and of Economic
Development Minister Nyamjav ―Fortuna Batbayar
Our faction believes that these ministers must be held responsible for the worsening of the
national economic situation We also intend to do the same with other ministers after hearing
opinions of people said Byambatsogt
Source Montsame
FORMER TAVAN TOLGOI JSC DIRECTOR ARRESTED
The Independent Agency Against Corruption arrested former Tavan Tolgoi JSC director Kh
Tumenbayar for undisclosed reasons
An unnamed official source suggested that the arrest may be related to abuses of power and
payments to political parties as well as the construction of a high-class hotel in Dalanzadgad Soum
Umnugobi Aimag Kh Tumenbayar is a member of the Democratic Party a member of Parliament
and is an associate of ―Ajnai Bat-Erdene the Minister of Defense who helped Tumenbayar attain
position as the director of Tavan Tolgoi for 6 years and rise to head of the Umnugobi Aimag Citizens
Council
Tumenbayar voluntarily resigned from his position at Tavan Tolgoi last month The IAAC has
reportedly not given details to the reasons for the investigation opened on Tumenbayar because of
possible connections to high-ranking officials
Source Unuudur
MONGOLIA TURKMENISTAN JOIN INTERNATIONAL RACING FEDERATION
The International Federation of Horseracing Authorities (IFHA) has welcomed racing organizations
from Mongolia and Turkmenistan as affiliate members
Recent ratification to IFHA statutes at its annual General Assembly in October created a new
affiliate membership category within the Federation Thus the Federation of Mongolia Horse Racing
Sport and Trainers and the Turkmen Atlary State Association by unanimous vote of the IFHA
Executive Council in Paris in October have become the IFHAlsquos first two affiliate members
The Federation of Mongolian Horse Racing Sport and Trainers (FMHRST) is a non-governmental
organization (NGO) which serves to the development of equestrian sport in Mongolia and works to
protect the rights of horsemen who specialize in this national sport The new affiliates were
announced by IFHA Chairman Louis Romanet this week and several key appointments to IFHA
executive office positions and committees have also been made
Source Horse Talk
MONGOL TV HEAD MEDIA CAN HELP FIX THE BIG PROBLEMS
Nomin Chinbat head of Mongol TV has grander intentions than just ridding the countrys television
business of rampant pirated content and unlicensed formats The young executive wants to help
clean up Mongolian politics and the nation by creating a free and open media
―The networks are used as propaganda channels for politicians They are used very effectively every
four years at election time says Chinbat whom the Source named one of the 25 Most Powerful
Women in Global TV at MIPCOM 2013
―There are laws against piracy but they arenlsquot implemented explains Chinbat who says that
politicians in the country of roughly three million wonlsquot challenge journalists because their
relationships with them are too cozy
Mongol TV has invested in original programming licenses all of its imported content and runs
investigative journalism features highlighting social problems such as alcoholism and corruption
The company is organizing a Mongol TV Day for February 2014 to which it has invited major
international studios to raise awareness of the issues and introduce the global industry to
Mongolia Britainlsquos ITV and Americalsquos CBS are already confirmed and negotiations are ongoing with
other attendees The situation has improved in recent years with some channels having become
what Chinbat calls ―hybrids which license some sports rights but then steal others and copy
formats
―These days some of these channels might license 25 episodes of a format and make 50 But this is
actually progress says Chinbat
Chinbat and her team were at the Asian Television Forum (ATF) in Singapore looking for new
formats that can be produced within the constraints of Mongolian television budgets However with
Mongolias young populationmdash65 percent of the country is under 35 years oldmdashmobile viewing is on
the rise and the network is already working second-screen utilization and new media applications
This demographic sweet spot should guarantee strong growth in the population economy and
nascent entertainment sector in Mongolia in the coming decades
Source Hollywood Reporter
ANNOUNCEMENTS
ldquoMM TODAYrdquo ON MNB-TV FRIDAY 1900 TO 1910
BCM is pleased to announce that Mongolian National Broadcasting continues its cooperation with
BCM on ―MM Today This English news program is aired every Friday for 10 minutes and is
scheduled from 1900 to 1910 tonight Tune in to watch this program that reports stories from
todaylsquos BCM NewsWire
BCM WEBSITES
MONGOLIAN WEBSITE bdquoPRESENTATIONS‟ AND bdquoNEWS‟ SECTIONS
The Presentationslsquo section on BCMlsquos Mongolian website can be reached via bcmmnitgeluud
As a key component of BCMlsquos Mongolian website articles from the Newslsquo section and the
government website Open-Governmentmn are regularly updated
S Oyun Minister of Environment and Green Development presentation at BCM monthly meeting on
May 27 added to Mongolian website bcmongoliaorgmnилтгэлүүд
- Байгаль орчин ногоон хөгжлийн сайд СОюун Байгаль орчин ногоон хөгжлийн шинэчлэлийн
бодлого үйл ажиллагаа МБЗ-ийн сарын уулзалт 5 сарын 27 2013
___________________________________________
ENGLISH WEBSITE PRESENTATIONS MONGOLIA REPORTS bdquoINTERVIEWSbdquo MONGOLIAN
BUSINESS NEWS‟ bdquoPHOTO GALLERY‟
The following 13 presentations are from the Mongolia Investment Summit- 2013 in Hong Kong
November 18-20
- Regulatory Update Navigating Mongolialsquos legal framework for foreign direct investment
Javkhlanbaatar Sereeter Director General Foreign Investment Regulations and Registration
Department MINISTRY OF ECONOMIC DEVELOPMENT OF MONGOLIA
- Investment keynote Investing into Mongolia in 2013 ndash Where do the opportunities lie James
Passin Co-Founder and Manager FIREBIRD MONGOLIA FUND
- Development keynote Key challenges and opportunities for continued growth in Mongolia
Randolph Koppa President TRADE AND DEVELOPMENT BANK OF MONGOLIA
- Outlining government policies and long-term plans for Mongolialsquos mining sector Amarjargal
Khurelbat Head of International Cooperation Division MINISTRY OF MINING OF MONGOLIA
- From copper to met coal Demand and price outlook and expected impact on Mongolialsquos economy
Ghee Peh Managing Director Metals and Mining Research UBS SECURITIES ASIA
- How Mongolian banks and financial institutions are dealing with the challenges and opportunities
of a fast growing economy Norihiko Kato Chief Executive Officer KHAN BANK
- Update on the Mongolian stock market ndash Impact of the new Securities Law Altai Khangai Chief
Executive Officer MONGOLIAN STOCK EXCHANGE
- From investment banking to trade finance to micro credits to insurance Amartuvshin Hanibal
Managing Director TENGER FINANCIAL GROUP LLC
- Spotlight presentations Showcasing Mongolian investment opportunities Peter Morrow Board
Director ASIA PACIFIC INVESTMENT PARTNERS
- Spotlight presentation Showcasing Mongolian investment opportunities Munkhbat Davaatseren
CEO of Golomt Securities GOLOMT BANK
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources
Batmunkh Batkhuu Chairman SHARYN GOL JSC
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources
Jimmie Wilde Chief Operating Officer BERKH UUL JSC
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources Mona
Forster Executive VP ENTREacuteE GOLD INC
The following two presentations are from the ―ANTI-CORRUPTION LEGISLATIONPOLICY
INTERNATIONAL BEST PRACTICE ON TRANSPARENCY training seminar for businesses in
Ulaanbaatar November 18 2013
-―International business standard on transparency by Jelena Pesic Director PwC
-―Finlandlsquos best practice on transparency and anti corruption by Dr Pekka Hallberg (as it is
worldlsquos number one) Emeritus President of the Supreme Administrative Court of Finland
The following 15 presentations are from the Mongolia Mining Summit Perth Australia October 29-
31 2013
bull Mongolialsquos Minerals Future and Development by Otgochuluu Ch Director General Department of
strategic policy and planning at Ministry of Mining Mongolia at the Mongolian Mining Summit 2013
Perth Australia Oct 29-31 2013
bull Mongolian Economy Investment OpportunitiesChallenges Jim Dwyer Executive Director
Business Council of Mongolia at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31
2013
bull Oyu Tolgoi Lessons from the Gobi Houston Spencer Vice President Communications and Media
Relations Oyu Tolgoi at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Market dynamics for Mongolian coking coal in the Chinese market Graeme Hancock President
and Chief Representative at Anglo American Mongolia at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Speech by Mr Ariunbold Byamba Deputy Director Erdenes MGL LLC at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull Launching Mining Projects in MongoliandashA Major Contractorlsquos Perspective Eric Erdenebat
Tseveendorj Country Manager Orica Limited at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Investing in a dynamic legislative environment Elisabeth Ellis Managing Partner Ulaanbaatar
Minter Ellison at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Sandvik In Pit Crushing amp Conveying (IPCC) Doug Turnbull Principal Mining Engineer Sandvik
Mining Systems at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Ovoot Coking Coal Project David Paull Managing Director Aspire Mining at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull The business of being a third neighbor David Landers General Manager East Asian Growth
Markets at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Nuurst Thermal Coal Project Daniel Rohr Chief Financial Officer Modun Resources Ltd at the
Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Culture matters in building sustainable long-term business relationships Hana Tserenkhand
Byambadash Business Development Consultant AusMon Consulting and Dr Christine Hogan Adjunct
Professor Curtin University Consultant amp Author at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Maximizing Business Benefits from Your IT Investment Brad Skeggs Executive Director COSOL at
the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Presentation by Battsengel Gotov CEO Mongolian Mining Corporation at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull Mongolian Mining Sector Present and Future Developments NAlgaa Executive Director
Mongolian National Mining Association at the Mongolian Mining Summit 2013 Perth Australia Oct
29-31 2013
The ―Mongolia Reports section includes the following
- ―Ministry of Finance of Mongolia 2013 Government Debt Auctions by Bank of Mongolia
- ―Doing Business in Mongolia 2013 Country Commercial Guide for US Companies by US
Embassy
- ―Real Estate Report 2013 by Mongolian Properties
- ―Selected Macroeconomic Indicators November 20 2013 by International Monetary Fund
- ―2013 Second Annual Mongolian CEO Survey from PricewaterhouseCoopers Audit LLC
- ―Selected Macroeconomic Indicators data through October 16 2013 by International Monetary
Fund
- ―IMF Completes 2013 Article IV Mission to Mongolia by International Monetary Fund
The following are added to Interview Section from the Oxford Business Group Mongolia Reports
2013 book
bull B Byambasaikhan Chairman Business Council of Mongolia ―Talk is cheap
bull President Ts Elbegdorj ―Diversifying for growth
bull Jim Dwyer Executive Director Business Council of Mongolia ―Non-mining sectors budding
bull Peter Morrow Chairman American University of Mongolia ―Filling in the blanks
bull N Zoljargal Governor Bank of Mongolia ―Sustainable vision
bull Gansukh Minister of Roads and Transportation ―Accessing new markets
bull J Od President MCS Group ―Building interest
bull B Chuluunbaatar President and CEO of Monnis Group ―Climbing the ranks
bull Cameron McRae President and CEO Oyu Tolgoi ―Sitting on a copper mine
BCMs English website includes the ―Mongolia Business News section where the Open Letter to
Parliament and Government is available for download
BCM continuously posts news stories and analysis of relevance to Mongolia at Mongolian Business
News before they are all put together each week for Fridays weekly NewsWire
The ―Photo Gallery contains photos from the 6th Anniversary BCM Renewal dinner on November
11 2013
BCM Football Cup 2013 pictures are posted to the website - httpbcmongoliaorgenphotos350-
enalbumalbumid=200
The BCM NewsWire will continue to be issued each Friday incorporating items already on the home
page for a consolidated account of the weeklsquos events
SOCIAL NETWORK WITH BCM
BCM LAUNCHES NEW LINKED-IN COMPANY PAGE
The Business Council of Mongolia has launched a new company page on the social networking
website LinkedIn to network its members and followers including small-medium enterprises (SMEs)
The new page will allow BCM to alert followers to the latest news and information critical to their
businesses Memberslsquo businesses will be promoted Additionally BCM plans to deliver monthly
infographics on the latest data as well as videos and other media content as they come The bulk of
the content on the new page will be in Mongolian language to better cater to BCMs Mongolian-
speaking audience and members The following link can direct you to the New BCMs Linked-in page
httpwwwlinkedincomcompanybusiness-council-of-mongoliatrk=company_logo
The Business Council of Mongolia (BCM) has expanded its reach to your favorite social networks
Keep up to date on the latest business deals in Mongolia and how the climate for investment is
improving each day with BCM
Add BCM on Facebook at httpswwwfacebookcomTheBusinessCouncilOfMongolia to read the
latest announcements and comment on events carried in the NewsWire with the community
Hear breaking news and announcements as they happen when you follow BCM on Twitter at
httpstwittercombcmongolia
We have now 2482 fans on our Facebook fans page 1527 connections on LinkedIn network and
835 followers on Twitter
Of course for news information interviews event photos and announcements regarding our
organization visit the official BCM website at httpbcmongoliaorgen
ECONOMIC INDICATORS
INFLATION
Year 2006 60 [source National Statistical Office of Mongolia (NSOM)]
Year 2007 151 [source NSOM]
Year 2008 221 [source NSOM]
Year 2009 42 [source NSOM]
Year 2010 130 [source NSOM]
Year 2011 102 [source NSOM]
November 30 2013 120 [source NSOM]
Year-over-year (y-o-y) nationwide
Note 111 y-o-y Ulaanbaatar city November 30 2013
CENTRAL BANK POLICY LOAN RATE
December 31 2008 975 [source IMF]
March 11 2009 1400 [source IMF]
May 12 2009 1275 [source IMF]
June 12 2009 1150 [source IMF]
September 30 2009 1000 [source IMF]
May 12 2010 1100 [source IMF]
April 28 2011 1150 [source IMF]
August 25 2011 1175 [source IMF]
October 25 2011 1225 [source IMF]
March 19 2012 1275 [source Mongol Bank]
April 18 2012 1325 [source Mongol Bank]
January 25 2013 1250 [source Mongol Bank]
April 8 2013 1150 [source Mongol Bank]
June 25 2013 1050 [source Mongol Bank]
CURRENCY RATES ndash DECEMBER 19 2013
Currency Name Currency Rate
US dollar USD 164138
Euro EUR 224680
Japanese yen JPY 1579
British pound GBP 268874
Hong Kong dollar HKD 21170
Chinese Yuan CNY 27031
Russian Ruble RUB 4981
South Korean won KRW 155
Disclaimer Except for reporting on BCMlsquos activities all information in the BCM NewsWire is
selected from various news sources Opinions are those of the respective news sources
to begin development of the Asgat silver deposit
Asgat located in northwest Mongolia 1800 kilometers from Ulaanbaatar has a total average ore
reserve of 231 million tons and estimated 246 million ounces of silver The board agreed that the
project is economically viable now that a paved road leading to the development has been
complete The project is owned 51 percent by Erdenes MGL LLC and 49 percent by Russialsquos Rostec
The board agreed to the establishment of a working group to proceed with the next steps for
development
Source Business-Mongoliacom
MIAT TO HIRE FOREIGN-SKILLED MANAGEMENT
The Cabinet of Ministers decided on 14 December to hire a foreign-skilled executive management
team to operate state-owned MIAT Mongolian Airlines
The Cabinet hopes in hiring a foreign management it may produce greater profits increase its
competitiveness ensure greater flight safety and better prepare national staff The Cabinet
relayed orders to the State Property Committee and MIATs representative Council
Source Montsame
STANDARD BANK CONSULTANT DETAINED AMID DEBT DISPUTE
Mongolia has issued a travel ban on a New Zealand national consulting for Standard Bank Group Ltd
amid an escalation in a dispute with a local company over a debt repayment
Chris Bradley was part of a five-person team from Africalsquos biggest lender that visited Ulaanbaatar
last month to seek talks with the government over its USD 131 million in loans to Just Group LLC a
holding company said two people familiar with the matter The people asked not to be named
because they arenlsquot authorized to speak publicly Standard Bank alleges the loans are in default and
filed a lawsuit in July in a London court seeking repayment
Standardlsquos loans were made between 2007 and 2010 to Just Group to fund raw materials supplies
and debt repayments at state-controlled Erdenet Mining Corp and Ulaanbaatar Railways Bradley
said by phone on 2 December that he had been due to depart Mongolia on 29 November but ―is
restricted by the authorities from leaving Bradley said he was advised of his situation by local
police and that he is a suspect in an investigation
―I went in gladly to assist the police and compare notes said Bradley ―We are focusing on the
commercial aspects of this transaction and they are focusing on the criminal aspects The two
although linked are also running in parallel
Mongolia has barred foreign executives from leaving the country during investigations into
companies before Justin Kapla a US citizen and then-president of coal miner SouthGobi Sands
LLC was banned from departing at the end of last year and is still in the country after the nationlsquos
Independent Authority Against Corruption launched a probe into the companylsquos mining licenses
Sharavlamdan Batkhuu Just Grouplsquos controlling shareholder and other companies in the group
have defaulted on loans since 2011 Danjilaa Ganbat director of the banking supervision
department at Mongol Bank the nationlsquos central bank said in July Ganbat made his comments
after Just Grouplsquos Savings Bank Mongolialsquos fifth-largest lender was declared insolvent due to
affiliated companies defaulting on loans Batkhuu and Just Group are among the defendants in the
Standard Bank lawsuit
Standard Bank wasnlsquot able to arrange any meetings with Mongolialsquos government to resolve the debt
dispute the people familiar with the matter said Bradley was the Mongolia specialist on the team
and the only member not directly employed by the bank said one Bradley said he worked as an
employee of Standard Bank from 1999 to 2001 and has consulted on a contract basis for the bank
over the last nine years including five visits to Mongolia since May ―to engage with the government
on our issues the debt recovery
Cabinet Secretary Saikhanbileg Chimed said by e-mail on 3 December that he thinks itlsquos better to
solve the debt dispute out of court and planned to ―push appropriate people to respond
Bradley 50 is a native of Hokitika New Zealand ―In the absence of a New Zealand consulate the
British Embassy is working on behalf of Bradleylsquos consular welfare said Julian Pearson Deputy
Head of Mission at the British Embassy in Ulaanbaatar on 2 December
Source Bloomberg
KHAN BANK OPENS EXPRESS BANKING CENTER
Khan Bank LLC opened an express banking center on 10 December
The Express Banking Center services include a new ATM to deposit cash an E-Corner which allows
customers to make transfers between Khan Bank accounts review accounts through Internet
banking and receive account slips They can also be used to obtain foreign remittances
The Banking Centers are located at the State and Ulaanbaatar department stores on Peace Avenue
and will be open 24 hours every day
Source Khan Bank LLC
ERDENE ANNOUNCES NEW GOLD DISCOVERY AT ALTAN NAR
Erdene Resource Development Corp reported significant gold and silver results from the second
phase of trenching completed during the fourth quarter at its Altan Nar gold-polymetallic project
Results have been received for an additional 11 of the 28 trenches completed The trenching
program was designed to test 10 distinct mineralized zones across the 55-kilometer-long Altan Nar
target area Samples from the final thirteen trenches over the central Altan Nar prospect area have
been submitted to SGS laboratories with results anticipated during first quarter 2014
Highlights include the discovery of a new high-grade gold mineralized zone one kilometer north of
Discovery Zone (Maggie prospect) Significant gold mineralization (Northbow prospect) identified in
the northern portion of a previously untested 700-meter-long anomaly that widens and intensifies
to the south and gold and base metal mineralized zones confirmed at northwestern and
southeastern extent of the 55-kilometer-long Altan Nar target area (Northwest and Far South
prospects) All 11 trenches testing 6 distinct targets returned highly anomalous precious and base
metal mineralization
Source Erdene Resource Development Corp
XANADU MINES FORMS JV FOR COPPER EXPLORATION IN MONGOLIA
Xanadu Mines Ltd has established a joint venture company Mongol Metals with Ganbayar
Lkhagvasuren director and substantial shareholder of Xanadu to execute Xanadulsquos business and
copper exploration strategies
Xanadu recently returned broad copper and gold values from a 780-meter trenching program to test
coincident geophysical and geochemical anomalies at its Oyut Ulaan copper-gold porphyry project
in Mongolia The program has defined three near-surface mineralized porphyry centers with results
up to 85 meters at 075 percent copper with 054 grams per ton gold including 36 meters at 149
percent copper and 102 grams per ton gold The trenching was performed concurrently with the
recent drilling at the Diorite Hill prospect and drill testing of the new targets is scheduled within
the next phase of drilling
Source Proactive Investors
JATENERGY TESTS PROVE CONVERSION OF MONGOLIAN BROWN COAL TO SEMI-COKING COAL
Jatenergy Ltd is on track to pursue its Mongolian coal upgrading plans after testing proved that
coal from the country were highly suitable for conversion using Coal Plus technology
This sets the stage for the immediate start of its investment strategy with Monrospromugoli LLC
which could result in a USD 2 million upfront technology payment and ongoing annual royalties of
USD 176 million The test results had demonstrated that the high moisture high volatile low
calorific Mongolian brown coal can be easily converted into semi-coking coal using Coal Plus
―This report independently verifies that Coal Plus has potential in Mongolia executive chairman
Tony Crimmins said He added ―As the technology is already commercialized and in use in 5
locations in China for over 4 years we see high probability of financing this project in Mongolia
The confirmation that Mongolian brown coal is suited for conversion using Coal Plus into higher
value products paves the way for Jatenergylsquos agreement with Monrospromugoli to go ahead
Source Proactive Investors
SOUTHGOBI RESOURCES ANNOUNCES RESTATED FINANCIAL AND OPERATING RESULTS
SouthGobi Resources Ltd released its regular update on restated financial statements and
management discussion and analysis presentation In the consolidated financial statements for the
year ended 31 December 2012 the restated financial position at 31 December 2012 31 December
2011 and 1 January 2011 the results of operations for the years ended 31 December 2012 and 31
December 2011 and the statement of changes in equity and statement of cash flows for the years
ended 31 December 2012 and 31 December 2011
Following the correction in SouthGobilsquos point of revenue recognition revenues from affected coal
sales contracts are recognized in later periods than previously reported and some revenue has been
reported after 31 December 2012 as not all contracted coal has been collected by customers
During the periods from 2010 to 31 December 2012 trade and other receivables have been adjusted
lower and deferred revenue recognized to reflect revenue being recorded in later periods than
previously reported The inventory balance increased over the same period to reflect higher coal
inventory stockpile balances Prepaid expenses also increased with a corresponding decrease in
trade and other payables as coal sales royalty expenses were recognized in late r periods than
previously reported
The consolidated financial statements auditorslsquo reports and related financial information for the
affected periods contained in SouthGobilsquos filings filed prior to 14 November 2013 should no longer
be relied upon The restatements do not result in a change in cash at the end of any period The
statement of cash flows as reported does not change except for the reclassification of various items
within operating activities
Separately on 19 November 2013 SouthGobi paid USD 81 million in cash to the China Investment
Corporation in accordance with the convertible debenture agreement The amount related to the
64 percent per year cash interest payment and is payable semi-annually Further on 21 November
2013 SouthGobi issued 35 million common shares to China Investment
Source SouthGobi Resources Ltd
MSE CANCELS KHANSH INVEST‟S BROKERAGE LICENSES
The Mongolian Stock Exchange has invalidated the brokerage and securities dealing licenses of
Khansh Invest LLC on 4 December
―The companylsquos clients will be transferred to other brokerage firms that conduct professional
services in the market with licenses for broker-dealer related issues and it shall be governed
according to the concerning jurisdiction and regulations said the Source
Source Mongolian Stock Exchange
MNU PARTNERS WITH UNIVERSITY OF CALIFORNIA FOR RENEWABLE ENERGY
Mongolian National University (MNU) and the University of California announced 13 December the
signing of a memorandum of understanding to conduct high temperature solar thermal technology
research in Mongolia in 2014
Under the terms of the agreement the Mongolian Innovation and Technology Centre at MNU will
have a 100-kilowatt high-temperature non-tracking solar array on their campus that is not only the
first and the largest solar array of its kind in Mongolia but anywhere in the world
―We are delighted to be working with the University of California on this great project and we
particularly excited to make this announcement on the 15th Anniversary of MNU said MNU
Founder and Chairman Munkhbat Lkhagvasuren ―The thermal solar array will be installed
monitored and evaluated by our MNU Engineering Department under the advice and instruction of
the faculty of the University of California Munkhbat said
The technology was developed by University of Californialsquos solar director and professor Roland
Winston who is also a world-renowned scientist in the solar research field Winstonlsquos technology is
already operational at the University of California Purdue University and the Gas Institute of
Chicago although it has not yet been released for commercial deployment anywhere in the world
―My goal in working with MNU is to provide the technology and the staff he said ―Ultimately it
is the Mongolian engineering students that will be required to install and operate these systems as
well as determine the scope of the application beyond simply providing a high temperature heat
source
Source Mongolian National University
MCDONALDS INTERNATIONAL CALLS FOR FRANCHISEE TO POSSIBLY OPEN IN MONGOLIA
McDonalds International sent out a press release on December 10 calling for partners to approach
the company to open its first burger outlets in Mongolia
―We have not set a firm date for the development of McDonalds restaurants in Mongolia In the
future we may take steps to open McDonalds restaurants in Mongolia and if we seek a franchisee to
represent us the person will have the following characteristics
―High integrity business experience in the market history of success ability to work well with a
franchisor ability to complete a training program that can take about nine months willingness to
devote full time to the McDonalds restaurant business retail experience knowledge of real estate
market significant capital
The press release ends by inviting candidates to apply for a franchise
Source BNE
JAPANESE ldquoSUN RICE PLANT OPENS IN MONGOLIA
An opening ceremony for Mongolialsquos Technik Import LLC and Japanlsquos Niigata Kubota ―Sun Rice
factory in Ulaanbaatar on December 10
Niigata brown rice will be imported sorted and packed at the Ulaanbaatar factory which has a
daily capacity for the production of two to three tons of packaged rice The plant is equipped with
fully automated machines from Kubota The rice will begin sale in the domestic markets at MNT
5000 to MNT 7000 per kilogram
―Mongolia has been receiving rice from the people of Japan under aid program for many years
said Deputy Minister B Tsogtgerel ―During the latter event I and Ambassador Takenori Shimizu
were discussing that the period of receiving rice as aid is over and now the time of reciprocal
assistance has come and the ―Sun Rice factory is a sample of joint cooperation to produce the
world known quality in Mongolia
Niigata Prefecture is the second largest producer of rice in Japan after Hokkaido
Source Info Mongolia
MNBC MIGRATES TO DVB-T2 WITH THOMSON VIDEO NETWORKS
Video Mongolia Digital Broadcasting (MNBC) has launched Mongolias first ever DVB-T2 service using
head-end systems from Thomson Video Networks
Launched in 2007 MNBC was Mongolias first digital terrestrial TV network operator and will now be
able to broadcast up to 120 digital TV channels over five UHF transponders to maintain its position
and compete with Mongolias national satellite operator Working with systems integrator Digital
Horizon MNBC has deployed TVNs Vibe EM1000 multi-channel SD encoders and NetProcessor 9030
multiplexer and video processor with an embedded DVB-T2 gateway
Source Rapid TV News
CHINESE FIRM NEGOTIATING TO ACQUIRE JUST AGRO
A Chinese company is in negotiations to purchase Mongolias only meat exporter said a company
source
Just Agro LLC which owns 11 meat companies with the Makh Market brand is reportedly the subject
of negotiations for sale to a Chinese entity said the source who asked not to be named The Just
Agro company provides 40 percent of meat processing and 30 percent of storage in Mongolia and is
the only meat exporter in Mongolia
Last July authorities revealed that Just Grouplsquos Sh Batkhuu falsified signatures of the State
Property Committee and Erdenet Mining Cos director to receive USD 131 million in loans from
South Africas Standard Bank putting up the Erdenet Mine as collateral for the credit After Just
Group was dissolved the central bank took over all its assets including Just Agro
Source Unuudur
MONGOL TV EXPOSES MEDIA CORRUPTION WITH FAKE MCDONALDS STORY
An investigative news show on Mongol TV planted a false news story last week with all 9 of
Mongolias major local media outlets about McDonalds opening a branch in the country The
exercise was undertaken to expose corruption and the rampant practice of paid-for journalism in
Mongolia Mongol TV said
The appearance of a Mr P Rank promising McMutton burgers and goat milk-shakes in the
official press release set off no alarms at the media networks which took between USD 150 and
USD 700 from an undercover journalist to run the story on their websites on the front page of three
newspapers and on TV news on three networks including the local public broadcaster
―Soon the first letter our children learn will be Mlsquo Mr P Rank says with a golden shining smile
according to the fake release which also claimed McDonalds was to be sponsored by Mongolialsquos
Health Ministry and sold in schools all over the country
After Mongol TV unveiled the sting it invited representatives of the 9 duped media organizations to
explain their actions though all reportedly declined
Source Hollywood Reporter
EBRD ADOPTS NEW STRATEGY FOR ENERGY AND NATURAL RESOURCES SECTOR
The European Bank for Reconstruction and Development (EBRD) has adopted a new strategy that
will guide its investments in the energy and natural resources sector for the next five years EBRD
press release reported Tuesday
The bank sets out a commitment to helping its countries of operations move toward a sustainable
energy future The EBRD region which stretches from Morocco to Mongolia is faced with a
challenge of providing sustainable secure and affordable energy The energy strategy identifies
energy efficiency as the first and best response to this challenge
―What the EBRD brings to this challenge is our focus on structural reform said EBRD Managing
Director for Energy and Natural Resources Riccardo Puliti ―We have learnt from our work that
when properly channeled market forces can be harnessed to make energy sectors more sustainable
- environmentally economically and politically
The bank intends building on its well-established support for the Extractive Industries Transparency
Initiative by requiring clients operating in the extractive industries sector to disclose subsoil
contracts and licenses as well as all payments they make to local and national authorities
In the case of coal-fired generation the strategy supports the move to lower-carbon fuel sources in
response to the challenge of climate change In alignment with other international financial
institutions the EBRD will not finance any coal-fired power generation projects except in rare and
exceptional circumstances in which there is no feasible alternative energy source
The strategy also reinforces the EBRDs growing support for renewable energy which will include
financing both energy-generating capacity and key infrastructure such as transmission lines and
backup generation
―We have also developed and invested in the first wind farm in Mongolia - where it was also the
first new energy generator in 30 years said Puliti
Source Trend News Agency
SUSTAINABILITY HOSTS SESA WORKSHOP
Sustainability East Asia LLC organized a National Validation Workshop on 10 December as part of its
responsibilities for establishing a strategic environment and social assessment (SESA)
Participants from across the country arrived to represent government the private sector and non-
government organizations to discuss the proposed SESA The next step will be to assess mining
growth options and identify at least three likely growth scenarios which mining could bring to
Mongolia Afterward the SESA team will evaluate the environmental and social issues that are likely
to arise as a consequence of each scenario
The Mining Sector Institutional Strengthening Technical Assistance Project commissioned
Sustainability to conduct a strategic environmental and social assessment for Mongolias mining
sector
Sustainability will also perform a gap analysis of the legal regulatory and institutional capacity to
deal with each possible scenario An action plan is expected for SESA by summer 2014
Source Sustainability East Asia LLC
UB REGISTERS MATERNITY HOSPITAL NO 1
The new building annex for Maternity Hospital No 1 was registered as capital city property
13 December at a regular session of the Ulaanbaatar Citizens Council This maternity hospital
building was built with financing from Boroo Gold and was presented as a gift to the people of
Mongolia With a capacity to receive 150 mothers and children its total cost was MNT 92 billion It
includes the hospital building of 1169 square meters external heating clean water and sewer
water pipelines a diesel station an asphalt road a pedestrian walkway outdoor vegetation and an
external LED sign
This new building was commissioned 15 June The new annex has one vacuum operation room and
two standard operating rooms on the fifth floor 100 beds for women and 50 beds for infants on the
third and fourth floors paraclinical and sanitation units a pharmacy a conference room and
training rooms on the second floor an ambulatory section and reception on the first floor and staff
cafeteria closets washrooms and a disinfection chamber in the basement
Source Centerra Gold Inc Newsmn
RIO TINTO‟S SAM WALSH DIGS IN FOR THE LONG HAUL
Sam Walsh wants to remain as Rio Tinto PLClsquos chief executive beyond the end of his contract and
has told the minerlsquos board he will not be ready to retire in 2015
―I am there if they want me said Walsh ―Likewise if therelsquos someone else who can come in and
take what Ilsquove done to the next level thatlsquos fine too
The Australian 63 later this month replaced Tom Albanese 11 months ago after Rio decried
―unacceptable writedowns on its coal business in Mozambique Walsh says investors support his
strategy to cut costs and sell non-core assets
Walsh said he has explored selling all of Riolsquos aluminum business this year in what would be a
signature reversal of Albaneselsquos costly purchase of Alcan in 2007 But he says no offers have been
good enough while the business is not generating enough cash for an initial public share offering or
spin-off to Riolsquos shareholders Walsh has also been frustrated in attempts to sell Riolsquos diamonds
business
―Who would thank me if I sold something under value just to get a tick At the end of the day you
have to be pragmatic about things he said Offers ―werenlsquot in the bailiwick of where we thought
they should be
The Alcan deal epitomized Riolsquos poor recent dealmaking and Walsh admits the company had
―relaxed some of the controls it should have had Rio staff has now ―refound their mojo he said
On operating costs which Rio has said it will cut USD 3 billion next year he said ―There is rolling
momentum and thatlsquos important
Source Financial Times
KYRGYZSTAN FILES ECOLOGY DAMAGE LAWSUIT AGAINST CENTERRA
Kyrgyzstan is suing Canadas Centerra Gold Inc for 15 billion soms (USD 304 million) over what the
government says is ecological damage marking a new twist in a bitter row with the investor running
the largest Kyrgyz gold mine
The state environmental protection and forestry agency said in a statement that it had filed the
lawsuit at an economic court in the Kyrgyz capital Bishkek saying Centerra Gold had ignored its
earlier request for voluntary compensation It said the alleged ecological damage included
emissions of pollutants and waste dumps It said its claim referred to the companys operations
between 1996 and 2011
Centerra had said earlier that it viewed the governments claim as exaggerated and unfounded
The company disagrees with these charges and plans to give explanations on this matter in the
nearest time said a spokesman for the Kumtor Operating Company (KOC) the Centerra subsidiary
that runs the Kumtor mine in the Tien Shan mountains
The Toronto-listed miner which also owns the Boroo gold mine in Mongolia is already under
pressure from the Kyrgyz parliament which demands the state hold 67 percent in a proposed joint
venture to run the mine In September the government and Centerra Gold signed a memorandum
of understanding paving the way for Kyrgyzstan to swap its 327 percent stake in the Canadian firm
for 50 percent in a venture that would own Kumtor But in October the legislature voted to tear up
the document and seek control over the planned venture It gave the cabinet until 23 December to
report on its talks with Centerra Gold on setting up the venture Pearson said Centerra is having
constructive dialogue with the Kyrgyz government
Source Reuters
ECONOMY
FITCH AFFIRMS TWO MONGOLIAN BANKS AT B REVISES OUTLOOKS TO bdquoNEGATIVE‟
Fitch Ratings on 16 December revised the outlook on the Long-Term Issuer Default Ratings (IDRs) of
Khan Bank LLC and XacBank LLC to ―Negative from ―Stable At the same time the agency
affirmed the two Mongolian banks IDRs and viability ratings at B and b
The revision of the outlooks on both banks IDRs reflects weakening operating conditions as
indicated by the change in the Outlook for the Mongolian sovereign (B+) to Negative from Stable on
13 December The sovereigns outlook was revised due to mounting risks to the countrys economic
and financial stability Ratings on the two banks could be downgraded if pressures on asset quality
and liquidity intensify Persistent local-currency depreciation would reduce borrowers repayment
capacity and could lead to accelerated deposit withdrawals given the countrys high level of
dollarization
The banks ratings also remain sensitive to the withdrawal of credit stimulus as this could result in
asset deterioration on slowing economic growth or higher inflation Further decline in the
governments international reserves could also trigger a negative rating action as the banks
currency-related risk is counterbalanced by the authorities swap facility and unlimited foreign-
currency conversion Both banks ratings are also sensitive to any changes in their steady access to
capital from private-sector owners
Khan Banks Support Rating and Support Rating Floor (SRF) reflect Fitchs view that as the largest
bank in Mongolia it would be likely to receive state support in case of need However the
Mongolian sovereigns ability to provide timely support to the banking system remains limited as
underlined by its IDR of B+ A downgrade of the sovereign ratings would point to weakening in the
Mongolian governments ability to provide timely support to the banking system which put negative
rating pressure on Khan Banks SR and SRF In contrast Fitch expects XacBanks SR and SRF of 5B-
to be maintained even if the sovereigns rating is downgraded to B This is because the current SR
and SRF already reflect the agencys view that support from the sovereign in case of need cannot
be relied upon
The rating actions are as follows Khan Bank Long-Term Foreign-Currency IDR affirmed at B
Outlook revised to Negative from Stable Short-Term Foreign-Currency IDR affirmed at B Long-
Term Local-Currency IDR affirmed at B Outlook revised to Negative from Stable Viability Rating
affirmed at b Support Rating affirmed at 4 Support Rating Floor affirmed at B XacBank Long-
Term Foreign-Currency IDR affirmed at B Outlook revised to Negative from Stable Short-Term
Foreign-Currency IDR affirmed at B Long-Term Local-Currency IDR affirmed at B Outlook revised
to Negative from Stable Viability Rating affirmed at b Support Rating affirmed at 5 Support
Rating Floor affirmed at B-
Source Fitch Ratings
MONGOLIA SCORE FALLS ON POLITICAL RISKS INDEX FOR MINING INVESTMENT
An annual survey by Behre Dolbear of political risks saw Mongolia decline 5 points in an index
ranking Mongolia 19th out of 25 countries
Mongolia this year received a score of 269 compared with 32 last year Leading the countries
surveyed was Australia down 07 points from last year Russia with a total score of 171 compared
with 16 last year was the lowest ranking
The 25 countries considered in this yearlsquos survey are ranked based on seven criteria
-the countrylsquos economic system
-the countrylsquos political system
-the degree of social issues affecting mining in the country
-delays in receiving permits due to bureaucratic and other issues
-the degree of corruption prevalent in the country
-the stability of the countrylsquos currency and
-the competitiveness of the countrylsquos tax policy
Each criterion is rated on a qualitative scale from one (worst) to 10 (best) that reflects conditions
that promote investment growth in the mining sector The maximum score attainable for a country
is 70 points
Source Behre Dolbear Group
MONGOLIA LOOKS FOR SECOND CHANCE WITH FOREIGN INVESTORS
Saruul Ganbaatar the deputy head of Mongolias stock exchange hopes the countrys days of
interventionist economic policies are over and new laws ensuring foreign investors access to the
frontier markets industries will bring back sorely needed cash
Ganbaatar 32 who cut his investment teeth in Chicagos financial houses after graduating from
Loyola University is careful not to over-promise on what the stock market can deliver in 2014 and
beyond in terms of new listings or overall growth In October a law was passed easing ownership
restrictions for private companies to invest in the strategic industries A Securities Markets Law
coming into effect 1 January 2014 is expected to provide the key ingredient to attract deep
pocketed institutional investors such as mutual funds to invest
This really is the missing ingredient said Ganbaatar who has been traveling the globe promoting
the changes in the laws to global investors for the past two weeks
The stock index fell 19 percent in 2012 and year-to-date is down 115 percent although it did start
to climb with the newly passed laws On 1 January the new Securities Markets Law will allow
Mongolias commercial banks to offer custodial banking services Custodial banks serve as safeguards
for a firm or individuals financial assets playing a critical role in the final settlement of market
transactions Total market capitalization now is between USD 900 million and USD 1 billion Dont
expect the number of new listings to mushroom There may instead be a cull of companies Fifty-
five to 60 of them many of which have not traded in years are being reviewed for potential
delisting
The Mongolian Stock Exchange 100 percent state-owned is perhaps itself a candidate for
privatization It has been in a strategic partnership with the London Stock Exchange for two and a
half years
They have the right of first refusal he said
Source Reuters
CPI INCREASES TO 12 PERCENT YEAR-OVER-YEAR IN NOVEMBER
The National Statistical Office reported a 12 percent increase in the national consumer price index
(CPI) in November year-over-year
The CPI growth which also in November grew 13 percent from the previous month was explained
by a 14 percent increase in food prices and non-alcoholic beverages 23 percent for clothing
footwear and fabrics and 07 percent for housing water electricity and fuels
Source Info Mongolia
GROWTH SEEN IN EXPORT OF PRECIOUS METALS
The export value of precious metals grew 114 percent in November from the month before and 63
percent from the same period in 2012 according to the National Statistical Office
Exports totaled USD 38 billion in the year to December while imports grew to USD 58 billion The
foreign trade balance saw a deficit of USD 2 billion November saw exports of USD 381 million and
imports of USD 514 million with exports and imports in decline between July and November The
value of export products for the first 11 months was USD 11 billion Despite the gain in precious
metal exports exported minerals which represented 81 percent of all exports in the year to
November fell 129 percent from the year before
Source Zuunii Medee
MNT 788 BILLION WILL BE ENTERED INTO THE STABILIZATION FUND
The Stabilization Fund is set to collect MNT 49 billion this year and MNT 298 billion next
The Stabilization Fund was established to collect surplus revenue in years of economic gains from
the mining sector to cushion possible annual losses during economic downturns and weak
commodity demand Any gain in the price for gold and coal next year will also be reflected in
allotments to the fund
Source Zuunii Medee
ECONOMIC DEVELOPMENT MINISTRY PLANS TO PUT 81 OF BUDGET INTO CONSTRUCTION
The Economic Development Ministry plans to invest MNT 814 percent of its total investment budget
into construction
Beginning 1 January 2014 the ministry will provide MNT 9303 in loans toward the construction
sector The ministry will spend 39 percent of its budget for reconstruction and repair 10 percent
for the purchase of new techniques and technical equipment 3996 percent for infrastructure
2743 percent for education and health 636 percent for employment and agriculture and 2926
percent for other sectors of the economy
Projects include the construction of 30 clinics 27 cultural centers 6831 km of paved roads and
1032 m length of bridges Mongolia has received USD 55 billion in aid in the last two decades of
which 55 percent was in the form of low rate loans and 45 percent as non-repayable grants for
investments into agriculture infrastructure power and health sectors
Economic growth since 2011 has allowed Mongolia less aid than in the past The government has
now turned its focus on providing funding with concession agreements to large scale projects such
as the Nariin Sukhait-Shivee paved road and the power station at Mogoin gol Other projects include
Power Plant No 5 the Altanbulag-Ulaanbaatar-Zamyn Uud highway the Tavan Tolgoi- Khanbogd-
Khangi road and the Tuul Songino water reservoir complex
Source Zuunii Medee
TT POWER PLANT MAY NEED CONCLUSION TO OT DISPUTE SAYS DIRECTOR
Uninterrupted development of the Tavan Tolgoi power plant will ride on the outcome of disputes
concerning Oyu Tolgois underground mine said the director of the plant
―One of the main risks is the issue of a main user Enkhsaikhan said ―The key buyer of the power
from the TT Power Plant is OT Due to the uncertainty over phase twolsquo and unresolved matters
with the government of Mongolia OT is not regarded as a reliable buyer on a stand-alone basis
He added that the power company may request a guarantee from Oyu Tolgoi
A consortium that includes Koreas Posco Energy and Daewoo Engineering and Construction GDF
Suez Energy Asia Japans Marubeni Corp and Kansai Electric Power in March was selected for
development of the plant which has a preliminary estimate cost of USD 1 billion Those expenses
include installation of 150 kilometers of electric lines between Tavan Tolgoi and Oyu Tolgoi The
consortium will be expected to raise 30 percent of the cost itself while the remaining 70 percent
will come from bank loans However the uncertainty surrounding the Oyu Tolgoi copper mine could
create more hold ups
Source Zuunii Medee
CABINET TO CONCLUDE CONCESSION ON ALTANBULAG-ZAMYN UUD HIGHWAY
The Cabinet of Ministers ordered ministers to conclude a concession agreement for the Altanbulag-
Ulaanbaatar-Zamyn-Uud highway
The government is planning to establish the concession contract with the Chinggis Land
Development Group which according to the agreement shall have exclusive rights to construction
ownership and transfer of property using its own financing The concessionaire shall complete the
construction within three years after that shall operate the facility for another 30 years before
transferring the ownership to the Government
If Chinggis Land accepts these terms it would be responsible for developing a feasibility study and
blueprint of the project to be approved by the relevant ministries before concluding a financing
agreement The concession agreement will come into effect after the Chinggis Land Development
Group obtains a financing agreement for USD 1 billion from a commercial bank of Mongolia
The government will be responsible for freeing up the land where the highway is planned while the
Chinggis Land would cover the costs for doing so
Source Montsame
MNT 116 BILLION WILL BE SPENT FOR BUILDING EMERGENCY ALARMS IN UB
The National Emergency Management Agency has installed an emergency alarm system in 60
locations of Ulaanbaatar The alarm will alert citizens to natural disasters such as earthquakes
The alarms will be controlled from a center by microwave radios and satellite communication
devices
Source Udriin Sonin
EIU CLARIFIES EXTENT OF OFFICIAL ESTIMATES OF OIL SHALE RESERVES
The latest research from Mongolias mining ministry gives a clearer picture of oil shales
development potential in the coming years Although Mongolia has long been known to have
substantial oil shale deposits previous estimates were extrapolated from rudimentary surveys
conducted in the 1990s and thus left the actual reserves open to speculation
Plans to develop the industry took shape only in April 2013 when an American company Genie
Energy signed a five-year deal with the Petroleum Authority of Mongolia to explore oil shale
reserves in central Mongolia Genie also plans to build a USD 4 billion processing factory in Tuv
Aimag According to government projections the processing plant will generate USD 850 million of
tax revenue annually Aside from the economic benefits of the project domestic fuel sources could
help Mongolia to improve its energy security by loosening the countrys dependence on its powerful
neighbors At present 90 percent of Mongolias oil and related products come from Russia with most
of the remaining amount being imported from China
Yet the benefits of large-scale oil shale extraction are not as clear as they might seem at first
glance Most importantly Mongolias oil shale resources should not be confused with the shale oil
phenomenon that is currently sweeping the United States Oil shale (also called kerogen) is more
expensive to extract than shale oil and carries greater environmental costs In particular oil shale
requires a large amount of water to process which could be a risky proposition in Mongolia where
hydrological resources are already under strain Although other countriesmdashEstonia in particularmdashuse
oil shale as a substitute for coal extracting liquid fuel from the shale is a complex and relatively
untested process
Genie Energys progress on the project seems more substantial than that of comparable coal
liquefaction projects that have faltered in the region However environmental technical and
political limitations suggest that Mongolias overall dependence on foreign fuel will not change
significantly in the foreseeable future
―We remain doubtful that oil shale will play a significant role in Mongolia in the next two years so
our economic growth and trade forecasts will remain unchanged said the Source
Source Economist Intelligence Unit
MONGOLIA AND THE THREAT OF THE RESOURCE CURSE
Mongolia is at a crossroads while investors complain the government is dragging its feet on allowing
miners to start digging it is crucial that it get things right at the early stages of the resources
boom
Mongolias challenge will soon be the worlds says Richard Dobbs and his team at McKinsey in a
report predicting a USD 17 trillion investment bonanza by 2030 to keep up with demand for oil gas
and other materials In 1995 about 58 countries depended on resources for the bulk of their output
and wealth In 2011 that number had risen to 81 By 2030 roughly half of the worlds economies
will essentially become giant filling stations for developing superpowers from China to South Africa
That means that instead of the world moving toward greater transparency democracy and freer
markets we could see rising corruption levels and even greater income inequality
Economies with natural-resource endowments have a huge opportunity to transform their
prospects but history suggests that they could all too easily squander the windfall says Dobbs
director of the McKinsey Global Institute in London
The world would be wise to take steps today to break this cycle McKinsey recommends several
While not terribly original they include strengthening public institutions and good governance
building decent infrastructure boosting national competitiveness promoting sound fiscal policy
making and spending the windfall wisely while engaging in forward-looking economic and social
planning The trouble is that political will and integrity is often the first casualty once the minerals
start flowing out and the spoils come pouring in
Mongolia is at that very crossroads today Investors complain the government is dragging its feet on
allowing miners to start digging But its more important to get things right at the early stages of
the resources boom That means acting now to create the institutions and regulatory frameworks
needed to ensure revenue transparencymdashknowing exactly how much money is being dug out the
ground and where its going Why not set up a sovereign-wealth fund to save for Mongolias future
When the stakes are that high a little patience can go a long way
Source Bloomberg
MONGOLIAS NOMADS WARM TO SOLAR POWER
In Mongolia often known as the land of the blue skies the sun shines for 250 days on average each
year It beats down on the sparse plains and on the Gobi desert that spans the countrys southern
border with China
It shines even during the frigid winter days on the hundreds of thousands of nomads who still roam
the steppes herding animals and living in dome-like tents calling gers About 800000 of Mongolias
28 million inhabitants still live the traditional nomadic lifestyle that has remained largely
unchanged for generations Apart from the addition of motorbikes the occasional petrol generator
and a passing trade from intrepid tourists wanting to stay in a ger for the night life is almost the
same as that of many nomads grandparents and great-grandparents Almost but not exactly
Dotted across the steppes glints of light can be seen as the sun bounces off the solar panels that
have been installed on the sides of gers made of felt and yaks wool At the start of this millennium
Mongolias herders and nomads had little or no access to modern electric power and its potential
benefits But as of 2013 thanks to a concerted push by the Mongolian government almost 70
percent of nomadic people have access to electricity Bor a herder who mainly travels around
western Mongolias Arkhangai province is one of the people whose family benefits from portable
solar home systems (SHS)
We use it for generating the power for lighting in the ger charging phones we can also generate a
fridge to keep food longer and we can run a television That is very useful for us because we can
get the most recent weather forecast which is important for our work and keeping our animals
safe Before we had power it was very difficult Now it is almost like living in the city
The ability to charge mobile phones is also important for the herders who often have children
staying at boarding schools Access to electricity also allows families to contact emergency health-
care and doctors for advice without having to make the often arduous journey to the nearest village
or town
The solar systems were distributed and installed with the help of the World Bank after the
Mongolian governments National 100000 Solar Ger Electrification Program ran into difficulties A
World Bank report Capturing the Sun in the Land of the Blue Sky describes the difficulties faced by
the Mongolian government on its ambitious project
By 2005 five years into the plan 30000 families had been kitted out with an SHS but then the
program began to stagnateThe government of Mongolia recognized that considerably more effort
was necessary not only to keep the program on track but to scale-up implementation in order to
achieve the National 100000 Solar Ger Electrification Program target the report said In 2006 the
World Bank agreed to cover half of the initial outlay costs for each family as well as after-sales
maintenance with 50 centers set up across the country including at least one in each of its 21
provinces so that the herders would not have to travel to Ulaanbaatar every time the solar panels
needed maintenance
The SHS project also offers environmental benefits to a country where the ratio of carbon dioxide
emissions to economic output is ten times higher than the world average because of the increase in
mining over the past decade as the true extent of Mongolias mineral wealth became apparent The
solar systems are slowly replacing the diesel generators used by some nomads as a means of
generating power although they are still using stoves for heating burning wood coal and dung
throughout the year
Source Al Jazeera
IRON-ORE AND COAL PRICES GO SEPARATE WAYS
Prices of the key ingredients in steel productionmdashiron ore and coking coalmdashare moving along sharply
different paths as mining companies resist cutting coal output despite the market being awash with
the raw material
While iron-ore prices have risen 22 percent since May coking coal is still searching for a rebound
Coking-coal prices are off more than 4 percent over the same period China is on course for another
year of record steel production with supply directed to the construction of high-rise apartment
buildings the manufacture of luxury cars and other uses
There is simply too much coal on the market the International Energy Agency said in a report this
week
Shipments of steelmaking coal from Australiamdashthe worlds biggest exporter of the commoditymdashare
forecast by the government to rise to 178 million tons in 2015 from 145 million tons last year Most
goes to China which accounts for 60 percent of global demand In contrast global iron-ore
exporters are struggling to increase output in areas other than Australias remote Pilbara region
supporting prices of that commodity The spot price of iron ore climbed to nearly USD 140 a ton
earlier this month a four-month high Prices have since eased a bit to USD 13430 a ton but
remain well above the consensus forecasts of analysts at the start of this year
Coal miners could scale back production but that isnt always easy to do In Australia many miners
are locked into so-called take or pay contracts with rail and port operators Many analysts dont
expect coking-coal prices to rebound for at least another 12 months RBC Capital Markets expects
coking-coal prices to average USD 154 a ton in 2014 down from USD 159 a ton forecast for this
year Instead they see more chance that iron-ore prices will come down more sharply RBC predicts
an 11 percent fall in iron-ore prices next year as new supply from Anglo Americans Minas Rio
project and mines owned by Fortescue Metals Group Ltd is added to the market UBS is even more
bearish predicting iron ore will fall below USD100 in the second half of 2014
Source Wall Street Journal
ARE COMMODITIES TRADERS bdquoTOO BIG TO FAIL‟
When the banking industrylsquos top lobby group commissioned a report by on commodity trading
houses the idea was to show trading houses like Glencore Xstrata Vitol or Cargill were ―too big to
fail and therefore needed to be regulated in a similar manner to the banks
But instead of highlighting the inherent issues surrounding the industry the report found trading
companies posed less systemic risk than the big banks As a result the Global Financial Markets
Association which commissioned the report decided not to finalize or publish it (The GFMA claims
that it often commissions reports which are shared with regulators and other interested parties but
never published) But the debate hasnlsquot ended
A separate report published in July by the Centre for European Policy Studies a think-tank argued
the growth of commodity trading houses which underpin the global trade in raw materials could
―have systemic implications Commodities trader Trafigura has become the latest to wade into the
debate In its recent prospectus for a EUR 500 million bond issue the worldlsquos second largest metals
trader and third biggest oil trader addresses the GFMA report as well as the issue of systemic risk
Making some tart observations the trading house says the GFMA paper was aimed squarely at the
Financial Stability Board a group of global regulators
―[The report] was widely seen as a tactic by some banks active in the commodity trading space as a
way of creating more equality between market participants by seeking to usher in further
restrictions on pure commodity trading companies the prospectus says
Commodity traders are facing the need to be more open about their operations and lift the veil of
secrecy Indeed the author of the GFMA reportmdashCraig Pirrong a widely respected academicmdashis
working on a white paper on commodities traders Commissioned by Trafigura it will look at what
commodities trading houses activities and the recent trend to accumulate more assets risk
management as well as looking at different types of commodity companies
Source Financial Times
SMOG DARKENS SHANGHAIS PROSPECTS FOR BECOMING A GLOBAL FINANCIAL CENTER
In the debate over which matters more in China money or quality of life the quality-of-life side
may have found the ultimate argument If you cant breathe nothing else really matters And itlsquos a
debate Mongolia has to have as it makes its own steps towards industrial and economic growth
Chinas pollution problem is spreading and growing worse a fact on stark display last week in
Shanghai the countrys financial center A stretch of filthy-air days in that coastal city so
thoroughly shocked residentsmdashwho had largely escaped the smog that has long plagued the likes of
Beijing and Harbinmdashthat it inspired fresh talk about getting away from China Lawrence Shu a
Shanghai-based partner at Hylands Law Firm said he and his friends are thinking more seriously
about moving abroad
The smog had a big impact because it feels really bad if you cant breathe freely he said
The environment used to take a back seat among the Chinese But as they get richer they are
traveling abroad more making the pollution back home more obvious The Internet also
contributes Blue-sky pictures posted on social networks by Chinese travelers abroad constantly
remind folks of what is lacking at home and Chinese now use various apps to track air-quality data
If Shanghais smog discourages smart financial professionals from wanting to live there that will
hinder Chinas effort to create a global financial center If businesses such as financial companies
and luxury-goods makers perceive that Chinas elites are spending more time outside their home
country they will be less willing to invest in China
Most rich Chinese havent packed their bags and left yet but they are keeping their options open
Relocation is a big decision said Anne Wang who works in the financial industry in Shanghai But
just in case she recently received a US visa that would allow her to live there
Source Wall Street Journal
POLITICS
MINERALS POLICY ENTERS FINAL DISCUSSIONS
The government published a final draft of Mongolialsquos State Policy on the Minerals Sector for 2013
through 2025
The document was first presented to Parliament in July and is now entering final discussions during
the autumn plenary session of Parliament following a 42 percent drop of foreign investment and 23
percent fall in the currency year-on-year
―We have reviewed the proposed State Policy on the Mineral Sector which we feel will be a
positive step forward if passed said the Source ―The passing of this policy will result in more
transparency and an increasing participation from foreign investors That said it will take time for
these feats to be accomplished Investors will be weary of Government promises as they seek
longevity to prove Government intentions
The proposed policy is divided into four main sections rationale principles main policy and
implementation-results The major points stressed in the policy include transparency and
responsible mining The law sends the message that growth is going to be driven by private sector
participation and the intent to provide a stable investment environment technological innovation
and value-added activities
Key priorities of the law since it was first unveiled include stability of taxation and the legal
environment an end to any discrimination between foreign and national investors and the
preservation of strategic resources and deposits
This most recent version saw the inclusion of a new section supporting development of local areas
and the interests of local citizens Other key elements include explorationmdashwhich would see
greater government regulation for strategic mineral deposits while cutting down bureaucracy and
conducting scientific researchmdashproduction support and local support The new document also
highlights greater support for non-governmental organizations for the environment allowing them
to claim damages from mining operations the establishment of funds to support economic
diversification environmental protections and land rehabilitation
The new draft has removed the risk assessment section and replaced it with a section on
implementation This includes the improvement of the legal environment and producing of relevant
regulations programs and projects for 2013 to 2015 followed by the implementation of programs
and projects from 2014 to 2025 and finally the provision of conclusions on midterm policy
implementation and further planning for up to 2020 and 2025
―We believe that this policy will take us one step closer to attracting investors and supporting
private sector development in Mongolia said the Source ―Despite current investor hesitation this
state policy in addition to the new amended Minerals Law set to pass next year will further
encourage investors to enter the market and will build support for the junior mining community
Source Mongolian Investment Banking Group
PARLIAMENT UNANIMOUSLY BACKS ldquoSMART GOVERNMENTrdquo INITIATIVE
Parliament has unanimously backed President Tsakhia Elbegdorjs ―From Big Government to Smart
Government initiative for government reform concepts having signed a joint statement of support
on 13 December
The joint statement gives full support to the presidents initiative and commits to cooperation for
its undertaking This includes support for enhancing government systems and policies in line with
democracy and a market economy improving the capacities of public services and curtailing
government intervention into private business affairs Also included are protections to private
business including establishing government structures for rule of law support to domestic
industries and honoring contracts The fight against corruption is another main perogative
On 16 November 16 the Office of the President of Mongolia organized a national consultative
meeting on this topic at the Government Palace Elbegdorj next met with members of the
Parliament on 9 December to organize an open dialogue with representatives of Parliament for an
appeal for them to sign the joint statement Reaffirming the commitment of the Mongolian
lawmakers to a breakthrough reform of the Government the leaders of party floors and factions in
the Parliament and independent members of the Parliament signed the document for the reform on
December 13 2013
Source Montsame
GOVERNMENT CALLS TO END PRACTICE OF APPOINTING MPS AS MINISTERS
The coalition government has thrown their support behind President Tsakhia Elbegdorjs proposal to
prohibit Parliament members from serving as cabinet ministers
Democratic Party members discussed a draft resolution and proposed amendments submitted by the
president for the new restriction at a party meeting on Monday The draft amendments were
unanimously backed by the faction The Justice Coalition which includes the Monglian Peoples
Revolutionary Party and Mongolian Democratic Party came to the same conclusion following its own
meeting said coalition head N Battsereg on Monday
Source Montsame
COMMITTEE LEADERS TO BE ELECTED THIS MONTH
The coalition government will soon be electing officials to lead the various committees in
government
Parliament has 8 standing committees to elect leaders to this month with each committee to be
led by a representative of the coalition government Current committee heads are Ts Tsolmon at
the Security and Foreign Policy Committee G Bayarsaikhan at the Environment Food and
Agriculture Committee Z Bayanselenge at the Social Policy Education Culture and Science
Committee R Burmaa at the Petition and Requests Committee A Bakei at the State Structural
Committee Ts Davaasuren at the Budget Committee Sh Tuvdendorj at the Legislation
Committee and B Garamgaibaatar at the Economic Committee
Source Zuunii Medee
FOREIGN CURRENCY PAYMENTS BANNED FOR MININGEXPLORATION LICENSING FEES
The Ministry of Finance has banned the use of foreign currencies to pay for mining and exploration
licensing fees to the Mineral Resources Authority beginning 1 January 2014
The Ministry of Finance has prompted these entities and companies holding licenses to comply with
Mongolian currency law that states that all businesses and agencies must do business in Mongolian
tugrug According to the 2009 law transactions must not be carried out in foreign denominated or
foreign currency based rates
Source Newsmn
MINING MINISTRY TO COOPERATE WITH ASSOCIATION OF FLUORSPAR EXPLORERS
The Ministry of Mining Wednesday established a memorandum of mutual understanding with the
Association of Fluorspar Explorers (AFE) to cooperate in augmenting the countrylsquos export
In addition to expanding export goals include developing transparent and responsible mining
improving qualities and standards of fluorspar metallurgy and flotation concentrate and in
increasing the production output of the minerallsquos ore enrichment The hope is the memorandum
will create a launching point for a national program for fluorspar its exploitation increase the
volume of production by intensifying research and increase competitiveness in international
markets It will also be necessary to introduce the latest technology to the country along with
running joint trainings with foreign NGOs the Ministry said
Source Montsame
DP REJECTS AMARJARGAL‟S RESIGNATION
Parliament voted against MP R Amarjargallsquos resignation request on 12 December
During Tuesdaylsquos meeting the majority of the Standing Committee on State Structure voted against
Amarjargal`s resignation The head of the Democratic Party (DP) caucus D Erdenebat took a
strong stance against letting Amarjargal leave
Amarjargal said he wanted to resign to take responsibility on behalf of his party members for the
current political situation and economic restraints in Mongolia DP members agree with his
conclusion but encourage him to make the effort and participate for social change and
development Members of the opposition Mongolian Peoplelsquos Party members said that Amarjargal
could see the problems and nature of the majority of Parliament and praised his plan to resign
Source Newsmn
MPP HEAD TO STEP DOWN
Mongolian People Party (MPP) Head N Enkhbold has requested his resignation as party leader
MPP Deputy Head D Oyunkhorol said 9 December that Enkhbold submitted his request to step down
during a party meeting Oyunkhorol said Enkhboldlsquos resignation was due to personal reasons The
new party head will be appointed by the MPPs governing board
Source Udriin Sonin
FIFTH ROUND OF NEGOTIATIONS FOR THE JAPAN-MONGOLIA ECONOMIC PARTNERSHIP
AGREEMENT
The fifth round of the negotiations for the Japan-Mongolia Economic Partnership Agreement (EPA)
will be held from 16 to 19 December in Ulaanbaatar
The Japanese delegation will be led by Jun Yokota ambassador in charge of economic diplomacy
and the Mongolian delegation will be led by Ochirbat Chuluunbat vice minister for economic
development Experts from relevant ministries and agencies of both sides will participate in the
meetings
In this round negotiations are in areas including trade in goods and investment
Source 4-Traderscom
FIRST MONGOLIA-CHINA JOINT BORDER COMMISSION MEETING IN BEIJING
The very first meeting of Mongolia-China joint commission of borders took place 11 and 12
December in Beijing China
This meeting was co-chaired by T Togsbilguun a director of the Department of Neighbour
Countries of Mongolialsquos Ministry of Foreign Affairs and by Xiao Jiangguo a representative of border
checkpoint and seaport affairs Both sides shared on ideas for implementation of the
intergovernmental contract on the border regime and reached some agreements on conducting a
joint examination in the border signs and on activating the collaboration in law enforcement around
frontier areas After this they discussed issues of developing border checkpoints at a same level
putting some border checkpoints into a permanent regime giving an international status to four
checkpoints
The gathered also made a protocol on their meeting and inked its results The next meeting will run
in 2014 in Ulaanbaatar
Source Montsame
BELARUS TO OPEN EMBASSY IN MONGOLIA IN 2014
Belarus will open its embassy in Mongolia in 2014 reads a resolution from the Belarus Council of
Ministers of the Republic of Belarus from 12 December 2013 Belaruslsquo Finance Ministry will finance
the costs of opening and maintaining Belarusian Embassy in Mongolia from the funds set aside in its
national budget for the opening and maintenance of diplomatic missions and consular missions of
the Republic of Belarus abroad
Source Belarusian Telegraph Agency
HOWELL NEW JERSEY USA BECOMES SISTER CITY OF SUKHBAATAR DISTRICT
The Howell Township and the Sukhbaatar district in Mongolia signed a memorandum of
understanding to create sister citieslsquo between Howell New Jersey USA and the Sukhbaatar District
on Tuesday
The program was aimed at opening up talks on how each can benefit from one another Mayor
William Gatto said Howell Township is a very diverse city and theyve taken the relationship with
the Kalmyk community here in Howell and expanded it to a country where they have had no
relationship in the past he said
The sister citieslsquo program will allow both Mongolia and Howell to exchange ideas and come up
with new and better ways to do things that benefits both cultures Outside of Mongolia Howell has
the largest population of Kalmyks in the world with many living in the Freewood Acres section of
the township Gatto said
Some of the goals of the agreement include promoting a common prosperity and development for
both parties an electronic pen-pal program and education opportunities for exchange students
Through a translator Baljinnyam Gan-erdene of the Citizens Representatives Council of Sukhbaatar
District said he came to Howell to see how democracy works in the United States
Im really glad and hope that this unforgettable and successful visit opens the door to our
friendship and prosperity between our residents Gan-erdene said
Gatto gave Gan-erdene a Howell flag and a throw blanket created by the Historical Society
depicting the history of the township Gan-erdene also gave Gatto several items including a bronze
piece of art
Source NJcom
MONGOLIAN CALLIGRAPHY ADDED TO UNESCO CULTURAL HERITAGE LIST
State Parties at the 8th Session of the Intergovernmental Committee for the Safeguarding of the
Intangible Cultural Heritage in Azerbaijan unanimously agreed to register Mongolian calligraphy as
an intangible cultural heritage in need of urgent safeguarding on 2 December
―Mongolian heritage calligraphy is now being recognized by the world and I am grateful on behalf
of my country for decision makers said Secretary-General of Mongolian National Commission for
UNESCO Gundegmaa Jargalsaikhan He noted that Mongolian calligraphy was the fifth cultural
heritage item of Mongolia to be listed and now stands among the Mongolian epic traditional folk
dance the traditional music Tsuur and a circular breathing technique
Mongolian calligraphy is a 1000-year-old writing system that vertically connects continuous strokes
together to create a word Letters of Mongolian script have been created and taught by nomads
from generation to generation During the 1937-1940 purges of the Soviet era thousands of tutors
and traditional scholars of the script were killed Those who remained alive were banned from
mentoring the younger generation Soon after that or around 1946 a new Cyrillic script was
adopted as the only eligible script therefore banning all the teachings of old Mongolian script and
Latin lettering Only in the 1970s was the old Mongolian script re-introduced to scholars allowing a
limited number of classes in universities
After the 1990 democratic changes along with the revival of Mongolian identity interest in
traditional calligraphy reawakened As a sign of such revival the very first non-communist political
organization the Democratic Union of Mongolia used folded calligraphy as its main logo
Source Info Mongolia
THOUGH IMPROVING MONGOLIA STILL REELING UNDER CORRUPTION
The third joint survey by the Asia Foundation and Sant Maral Foundation to gather data on the
perception of corruption in Mongolia revealed that efforts to curb corruption in what is considered
as one of the worldlsquos most corrupt countries could be having impact
The survey shows a significant drop in the percentage of respondents who believe corruption has
increased in the last three years from 389 percent in November 2012 to 183 percent currently In
contrast in 2006 a majority of respondents (63) indicated that corruption has increased ―a lot in
the last three years The survey also shows that corruption has declined in importance as a critical
social problem since 2006 Despite these positive signs overall respondents indicated that
corruption remains a serious issue in some specific key areas
Conducted in September of this year the survey featured face-to-face interviews in 1360
households across Mongolia including seven districts in Ulaanbaatar and 21 counties in six
provinces A majority (766) cited that widespread corruption in the law enforcement agencies is
one of the main reasons the government has been unable to tackle corruption effectively When
corruption is perceived to be this widespread the attention will obviously turn to the performance
of the apex anti-corruption body the Independent Authority Against Corruption (IAAC) The survey
shows that the IAAC is slowly but surely beginning to gain confidence among citizens The
percentage of those surveyed who think that its performance is ―good or ―very good increased
from 78 percent in March 2010 to 203 percent in March 2013 In September 2013 the result shows
a new high of 294 percent
Peoplelsquos perceptions on corruption are often shaped by personal experiences Although very few
respondents in the survey said that they had actually paid a bribe themselves (8 percent about a 3
percent drop from 2012 and an 18 percent drop since 2006) as noted before many are not willing
to report instances where they are asked for one Similarly 36 percent of respondents said they
would not pay a bribe but 26 percent indicated that they would pay if they had the financial
capability
Basanta Pokharel is The Asia Foundation‟s chief of party for the STAGE program in Mongolia He
can be reached at basantapokharelasiafoundationorg The views and opinions expressed here
are those of the individual author and not those of The Asia Foundation
Source Asia Foundation
MPP DEMANDS DISMISSAL OF MINISTERS
Mongolian Peoplelsquos Party Chairman N Enkhbold and party head S Byambatsogt submitted to the
Speaker a request for the dismissal Minister of Finance Chultem Ulaan and of Economic
Development Minister Nyamjav ―Fortuna Batbayar
Our faction believes that these ministers must be held responsible for the worsening of the
national economic situation We also intend to do the same with other ministers after hearing
opinions of people said Byambatsogt
Source Montsame
FORMER TAVAN TOLGOI JSC DIRECTOR ARRESTED
The Independent Agency Against Corruption arrested former Tavan Tolgoi JSC director Kh
Tumenbayar for undisclosed reasons
An unnamed official source suggested that the arrest may be related to abuses of power and
payments to political parties as well as the construction of a high-class hotel in Dalanzadgad Soum
Umnugobi Aimag Kh Tumenbayar is a member of the Democratic Party a member of Parliament
and is an associate of ―Ajnai Bat-Erdene the Minister of Defense who helped Tumenbayar attain
position as the director of Tavan Tolgoi for 6 years and rise to head of the Umnugobi Aimag Citizens
Council
Tumenbayar voluntarily resigned from his position at Tavan Tolgoi last month The IAAC has
reportedly not given details to the reasons for the investigation opened on Tumenbayar because of
possible connections to high-ranking officials
Source Unuudur
MONGOLIA TURKMENISTAN JOIN INTERNATIONAL RACING FEDERATION
The International Federation of Horseracing Authorities (IFHA) has welcomed racing organizations
from Mongolia and Turkmenistan as affiliate members
Recent ratification to IFHA statutes at its annual General Assembly in October created a new
affiliate membership category within the Federation Thus the Federation of Mongolia Horse Racing
Sport and Trainers and the Turkmen Atlary State Association by unanimous vote of the IFHA
Executive Council in Paris in October have become the IFHAlsquos first two affiliate members
The Federation of Mongolian Horse Racing Sport and Trainers (FMHRST) is a non-governmental
organization (NGO) which serves to the development of equestrian sport in Mongolia and works to
protect the rights of horsemen who specialize in this national sport The new affiliates were
announced by IFHA Chairman Louis Romanet this week and several key appointments to IFHA
executive office positions and committees have also been made
Source Horse Talk
MONGOL TV HEAD MEDIA CAN HELP FIX THE BIG PROBLEMS
Nomin Chinbat head of Mongol TV has grander intentions than just ridding the countrys television
business of rampant pirated content and unlicensed formats The young executive wants to help
clean up Mongolian politics and the nation by creating a free and open media
―The networks are used as propaganda channels for politicians They are used very effectively every
four years at election time says Chinbat whom the Source named one of the 25 Most Powerful
Women in Global TV at MIPCOM 2013
―There are laws against piracy but they arenlsquot implemented explains Chinbat who says that
politicians in the country of roughly three million wonlsquot challenge journalists because their
relationships with them are too cozy
Mongol TV has invested in original programming licenses all of its imported content and runs
investigative journalism features highlighting social problems such as alcoholism and corruption
The company is organizing a Mongol TV Day for February 2014 to which it has invited major
international studios to raise awareness of the issues and introduce the global industry to
Mongolia Britainlsquos ITV and Americalsquos CBS are already confirmed and negotiations are ongoing with
other attendees The situation has improved in recent years with some channels having become
what Chinbat calls ―hybrids which license some sports rights but then steal others and copy
formats
―These days some of these channels might license 25 episodes of a format and make 50 But this is
actually progress says Chinbat
Chinbat and her team were at the Asian Television Forum (ATF) in Singapore looking for new
formats that can be produced within the constraints of Mongolian television budgets However with
Mongolias young populationmdash65 percent of the country is under 35 years oldmdashmobile viewing is on
the rise and the network is already working second-screen utilization and new media applications
This demographic sweet spot should guarantee strong growth in the population economy and
nascent entertainment sector in Mongolia in the coming decades
Source Hollywood Reporter
ANNOUNCEMENTS
ldquoMM TODAYrdquo ON MNB-TV FRIDAY 1900 TO 1910
BCM is pleased to announce that Mongolian National Broadcasting continues its cooperation with
BCM on ―MM Today This English news program is aired every Friday for 10 minutes and is
scheduled from 1900 to 1910 tonight Tune in to watch this program that reports stories from
todaylsquos BCM NewsWire
BCM WEBSITES
MONGOLIAN WEBSITE bdquoPRESENTATIONS‟ AND bdquoNEWS‟ SECTIONS
The Presentationslsquo section on BCMlsquos Mongolian website can be reached via bcmmnitgeluud
As a key component of BCMlsquos Mongolian website articles from the Newslsquo section and the
government website Open-Governmentmn are regularly updated
S Oyun Minister of Environment and Green Development presentation at BCM monthly meeting on
May 27 added to Mongolian website bcmongoliaorgmnилтгэлүүд
- Байгаль орчин ногоон хөгжлийн сайд СОюун Байгаль орчин ногоон хөгжлийн шинэчлэлийн
бодлого үйл ажиллагаа МБЗ-ийн сарын уулзалт 5 сарын 27 2013
___________________________________________
ENGLISH WEBSITE PRESENTATIONS MONGOLIA REPORTS bdquoINTERVIEWSbdquo MONGOLIAN
BUSINESS NEWS‟ bdquoPHOTO GALLERY‟
The following 13 presentations are from the Mongolia Investment Summit- 2013 in Hong Kong
November 18-20
- Regulatory Update Navigating Mongolialsquos legal framework for foreign direct investment
Javkhlanbaatar Sereeter Director General Foreign Investment Regulations and Registration
Department MINISTRY OF ECONOMIC DEVELOPMENT OF MONGOLIA
- Investment keynote Investing into Mongolia in 2013 ndash Where do the opportunities lie James
Passin Co-Founder and Manager FIREBIRD MONGOLIA FUND
- Development keynote Key challenges and opportunities for continued growth in Mongolia
Randolph Koppa President TRADE AND DEVELOPMENT BANK OF MONGOLIA
- Outlining government policies and long-term plans for Mongolialsquos mining sector Amarjargal
Khurelbat Head of International Cooperation Division MINISTRY OF MINING OF MONGOLIA
- From copper to met coal Demand and price outlook and expected impact on Mongolialsquos economy
Ghee Peh Managing Director Metals and Mining Research UBS SECURITIES ASIA
- How Mongolian banks and financial institutions are dealing with the challenges and opportunities
of a fast growing economy Norihiko Kato Chief Executive Officer KHAN BANK
- Update on the Mongolian stock market ndash Impact of the new Securities Law Altai Khangai Chief
Executive Officer MONGOLIAN STOCK EXCHANGE
- From investment banking to trade finance to micro credits to insurance Amartuvshin Hanibal
Managing Director TENGER FINANCIAL GROUP LLC
- Spotlight presentations Showcasing Mongolian investment opportunities Peter Morrow Board
Director ASIA PACIFIC INVESTMENT PARTNERS
- Spotlight presentation Showcasing Mongolian investment opportunities Munkhbat Davaatseren
CEO of Golomt Securities GOLOMT BANK
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources
Batmunkh Batkhuu Chairman SHARYN GOL JSC
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources
Jimmie Wilde Chief Operating Officer BERKH UUL JSC
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources Mona
Forster Executive VP ENTREacuteE GOLD INC
The following two presentations are from the ―ANTI-CORRUPTION LEGISLATIONPOLICY
INTERNATIONAL BEST PRACTICE ON TRANSPARENCY training seminar for businesses in
Ulaanbaatar November 18 2013
-―International business standard on transparency by Jelena Pesic Director PwC
-―Finlandlsquos best practice on transparency and anti corruption by Dr Pekka Hallberg (as it is
worldlsquos number one) Emeritus President of the Supreme Administrative Court of Finland
The following 15 presentations are from the Mongolia Mining Summit Perth Australia October 29-
31 2013
bull Mongolialsquos Minerals Future and Development by Otgochuluu Ch Director General Department of
strategic policy and planning at Ministry of Mining Mongolia at the Mongolian Mining Summit 2013
Perth Australia Oct 29-31 2013
bull Mongolian Economy Investment OpportunitiesChallenges Jim Dwyer Executive Director
Business Council of Mongolia at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31
2013
bull Oyu Tolgoi Lessons from the Gobi Houston Spencer Vice President Communications and Media
Relations Oyu Tolgoi at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Market dynamics for Mongolian coking coal in the Chinese market Graeme Hancock President
and Chief Representative at Anglo American Mongolia at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Speech by Mr Ariunbold Byamba Deputy Director Erdenes MGL LLC at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull Launching Mining Projects in MongoliandashA Major Contractorlsquos Perspective Eric Erdenebat
Tseveendorj Country Manager Orica Limited at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Investing in a dynamic legislative environment Elisabeth Ellis Managing Partner Ulaanbaatar
Minter Ellison at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Sandvik In Pit Crushing amp Conveying (IPCC) Doug Turnbull Principal Mining Engineer Sandvik
Mining Systems at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Ovoot Coking Coal Project David Paull Managing Director Aspire Mining at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull The business of being a third neighbor David Landers General Manager East Asian Growth
Markets at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Nuurst Thermal Coal Project Daniel Rohr Chief Financial Officer Modun Resources Ltd at the
Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Culture matters in building sustainable long-term business relationships Hana Tserenkhand
Byambadash Business Development Consultant AusMon Consulting and Dr Christine Hogan Adjunct
Professor Curtin University Consultant amp Author at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Maximizing Business Benefits from Your IT Investment Brad Skeggs Executive Director COSOL at
the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Presentation by Battsengel Gotov CEO Mongolian Mining Corporation at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull Mongolian Mining Sector Present and Future Developments NAlgaa Executive Director
Mongolian National Mining Association at the Mongolian Mining Summit 2013 Perth Australia Oct
29-31 2013
The ―Mongolia Reports section includes the following
- ―Ministry of Finance of Mongolia 2013 Government Debt Auctions by Bank of Mongolia
- ―Doing Business in Mongolia 2013 Country Commercial Guide for US Companies by US
Embassy
- ―Real Estate Report 2013 by Mongolian Properties
- ―Selected Macroeconomic Indicators November 20 2013 by International Monetary Fund
- ―2013 Second Annual Mongolian CEO Survey from PricewaterhouseCoopers Audit LLC
- ―Selected Macroeconomic Indicators data through October 16 2013 by International Monetary
Fund
- ―IMF Completes 2013 Article IV Mission to Mongolia by International Monetary Fund
The following are added to Interview Section from the Oxford Business Group Mongolia Reports
2013 book
bull B Byambasaikhan Chairman Business Council of Mongolia ―Talk is cheap
bull President Ts Elbegdorj ―Diversifying for growth
bull Jim Dwyer Executive Director Business Council of Mongolia ―Non-mining sectors budding
bull Peter Morrow Chairman American University of Mongolia ―Filling in the blanks
bull N Zoljargal Governor Bank of Mongolia ―Sustainable vision
bull Gansukh Minister of Roads and Transportation ―Accessing new markets
bull J Od President MCS Group ―Building interest
bull B Chuluunbaatar President and CEO of Monnis Group ―Climbing the ranks
bull Cameron McRae President and CEO Oyu Tolgoi ―Sitting on a copper mine
BCMs English website includes the ―Mongolia Business News section where the Open Letter to
Parliament and Government is available for download
BCM continuously posts news stories and analysis of relevance to Mongolia at Mongolian Business
News before they are all put together each week for Fridays weekly NewsWire
The ―Photo Gallery contains photos from the 6th Anniversary BCM Renewal dinner on November
11 2013
BCM Football Cup 2013 pictures are posted to the website - httpbcmongoliaorgenphotos350-
enalbumalbumid=200
The BCM NewsWire will continue to be issued each Friday incorporating items already on the home
page for a consolidated account of the weeklsquos events
SOCIAL NETWORK WITH BCM
BCM LAUNCHES NEW LINKED-IN COMPANY PAGE
The Business Council of Mongolia has launched a new company page on the social networking
website LinkedIn to network its members and followers including small-medium enterprises (SMEs)
The new page will allow BCM to alert followers to the latest news and information critical to their
businesses Memberslsquo businesses will be promoted Additionally BCM plans to deliver monthly
infographics on the latest data as well as videos and other media content as they come The bulk of
the content on the new page will be in Mongolian language to better cater to BCMs Mongolian-
speaking audience and members The following link can direct you to the New BCMs Linked-in page
httpwwwlinkedincomcompanybusiness-council-of-mongoliatrk=company_logo
The Business Council of Mongolia (BCM) has expanded its reach to your favorite social networks
Keep up to date on the latest business deals in Mongolia and how the climate for investment is
improving each day with BCM
Add BCM on Facebook at httpswwwfacebookcomTheBusinessCouncilOfMongolia to read the
latest announcements and comment on events carried in the NewsWire with the community
Hear breaking news and announcements as they happen when you follow BCM on Twitter at
httpstwittercombcmongolia
We have now 2482 fans on our Facebook fans page 1527 connections on LinkedIn network and
835 followers on Twitter
Of course for news information interviews event photos and announcements regarding our
organization visit the official BCM website at httpbcmongoliaorgen
ECONOMIC INDICATORS
INFLATION
Year 2006 60 [source National Statistical Office of Mongolia (NSOM)]
Year 2007 151 [source NSOM]
Year 2008 221 [source NSOM]
Year 2009 42 [source NSOM]
Year 2010 130 [source NSOM]
Year 2011 102 [source NSOM]
November 30 2013 120 [source NSOM]
Year-over-year (y-o-y) nationwide
Note 111 y-o-y Ulaanbaatar city November 30 2013
CENTRAL BANK POLICY LOAN RATE
December 31 2008 975 [source IMF]
March 11 2009 1400 [source IMF]
May 12 2009 1275 [source IMF]
June 12 2009 1150 [source IMF]
September 30 2009 1000 [source IMF]
May 12 2010 1100 [source IMF]
April 28 2011 1150 [source IMF]
August 25 2011 1175 [source IMF]
October 25 2011 1225 [source IMF]
March 19 2012 1275 [source Mongol Bank]
April 18 2012 1325 [source Mongol Bank]
January 25 2013 1250 [source Mongol Bank]
April 8 2013 1150 [source Mongol Bank]
June 25 2013 1050 [source Mongol Bank]
CURRENCY RATES ndash DECEMBER 19 2013
Currency Name Currency Rate
US dollar USD 164138
Euro EUR 224680
Japanese yen JPY 1579
British pound GBP 268874
Hong Kong dollar HKD 21170
Chinese Yuan CNY 27031
Russian Ruble RUB 4981
South Korean won KRW 155
Disclaimer Except for reporting on BCMlsquos activities all information in the BCM NewsWire is
selected from various news sources Opinions are those of the respective news sources
Head of Mission at the British Embassy in Ulaanbaatar on 2 December
Source Bloomberg
KHAN BANK OPENS EXPRESS BANKING CENTER
Khan Bank LLC opened an express banking center on 10 December
The Express Banking Center services include a new ATM to deposit cash an E-Corner which allows
customers to make transfers between Khan Bank accounts review accounts through Internet
banking and receive account slips They can also be used to obtain foreign remittances
The Banking Centers are located at the State and Ulaanbaatar department stores on Peace Avenue
and will be open 24 hours every day
Source Khan Bank LLC
ERDENE ANNOUNCES NEW GOLD DISCOVERY AT ALTAN NAR
Erdene Resource Development Corp reported significant gold and silver results from the second
phase of trenching completed during the fourth quarter at its Altan Nar gold-polymetallic project
Results have been received for an additional 11 of the 28 trenches completed The trenching
program was designed to test 10 distinct mineralized zones across the 55-kilometer-long Altan Nar
target area Samples from the final thirteen trenches over the central Altan Nar prospect area have
been submitted to SGS laboratories with results anticipated during first quarter 2014
Highlights include the discovery of a new high-grade gold mineralized zone one kilometer north of
Discovery Zone (Maggie prospect) Significant gold mineralization (Northbow prospect) identified in
the northern portion of a previously untested 700-meter-long anomaly that widens and intensifies
to the south and gold and base metal mineralized zones confirmed at northwestern and
southeastern extent of the 55-kilometer-long Altan Nar target area (Northwest and Far South
prospects) All 11 trenches testing 6 distinct targets returned highly anomalous precious and base
metal mineralization
Source Erdene Resource Development Corp
XANADU MINES FORMS JV FOR COPPER EXPLORATION IN MONGOLIA
Xanadu Mines Ltd has established a joint venture company Mongol Metals with Ganbayar
Lkhagvasuren director and substantial shareholder of Xanadu to execute Xanadulsquos business and
copper exploration strategies
Xanadu recently returned broad copper and gold values from a 780-meter trenching program to test
coincident geophysical and geochemical anomalies at its Oyut Ulaan copper-gold porphyry project
in Mongolia The program has defined three near-surface mineralized porphyry centers with results
up to 85 meters at 075 percent copper with 054 grams per ton gold including 36 meters at 149
percent copper and 102 grams per ton gold The trenching was performed concurrently with the
recent drilling at the Diorite Hill prospect and drill testing of the new targets is scheduled within
the next phase of drilling
Source Proactive Investors
JATENERGY TESTS PROVE CONVERSION OF MONGOLIAN BROWN COAL TO SEMI-COKING COAL
Jatenergy Ltd is on track to pursue its Mongolian coal upgrading plans after testing proved that
coal from the country were highly suitable for conversion using Coal Plus technology
This sets the stage for the immediate start of its investment strategy with Monrospromugoli LLC
which could result in a USD 2 million upfront technology payment and ongoing annual royalties of
USD 176 million The test results had demonstrated that the high moisture high volatile low
calorific Mongolian brown coal can be easily converted into semi-coking coal using Coal Plus
―This report independently verifies that Coal Plus has potential in Mongolia executive chairman
Tony Crimmins said He added ―As the technology is already commercialized and in use in 5
locations in China for over 4 years we see high probability of financing this project in Mongolia
The confirmation that Mongolian brown coal is suited for conversion using Coal Plus into higher
value products paves the way for Jatenergylsquos agreement with Monrospromugoli to go ahead
Source Proactive Investors
SOUTHGOBI RESOURCES ANNOUNCES RESTATED FINANCIAL AND OPERATING RESULTS
SouthGobi Resources Ltd released its regular update on restated financial statements and
management discussion and analysis presentation In the consolidated financial statements for the
year ended 31 December 2012 the restated financial position at 31 December 2012 31 December
2011 and 1 January 2011 the results of operations for the years ended 31 December 2012 and 31
December 2011 and the statement of changes in equity and statement of cash flows for the years
ended 31 December 2012 and 31 December 2011
Following the correction in SouthGobilsquos point of revenue recognition revenues from affected coal
sales contracts are recognized in later periods than previously reported and some revenue has been
reported after 31 December 2012 as not all contracted coal has been collected by customers
During the periods from 2010 to 31 December 2012 trade and other receivables have been adjusted
lower and deferred revenue recognized to reflect revenue being recorded in later periods than
previously reported The inventory balance increased over the same period to reflect higher coal
inventory stockpile balances Prepaid expenses also increased with a corresponding decrease in
trade and other payables as coal sales royalty expenses were recognized in late r periods than
previously reported
The consolidated financial statements auditorslsquo reports and related financial information for the
affected periods contained in SouthGobilsquos filings filed prior to 14 November 2013 should no longer
be relied upon The restatements do not result in a change in cash at the end of any period The
statement of cash flows as reported does not change except for the reclassification of various items
within operating activities
Separately on 19 November 2013 SouthGobi paid USD 81 million in cash to the China Investment
Corporation in accordance with the convertible debenture agreement The amount related to the
64 percent per year cash interest payment and is payable semi-annually Further on 21 November
2013 SouthGobi issued 35 million common shares to China Investment
Source SouthGobi Resources Ltd
MSE CANCELS KHANSH INVEST‟S BROKERAGE LICENSES
The Mongolian Stock Exchange has invalidated the brokerage and securities dealing licenses of
Khansh Invest LLC on 4 December
―The companylsquos clients will be transferred to other brokerage firms that conduct professional
services in the market with licenses for broker-dealer related issues and it shall be governed
according to the concerning jurisdiction and regulations said the Source
Source Mongolian Stock Exchange
MNU PARTNERS WITH UNIVERSITY OF CALIFORNIA FOR RENEWABLE ENERGY
Mongolian National University (MNU) and the University of California announced 13 December the
signing of a memorandum of understanding to conduct high temperature solar thermal technology
research in Mongolia in 2014
Under the terms of the agreement the Mongolian Innovation and Technology Centre at MNU will
have a 100-kilowatt high-temperature non-tracking solar array on their campus that is not only the
first and the largest solar array of its kind in Mongolia but anywhere in the world
―We are delighted to be working with the University of California on this great project and we
particularly excited to make this announcement on the 15th Anniversary of MNU said MNU
Founder and Chairman Munkhbat Lkhagvasuren ―The thermal solar array will be installed
monitored and evaluated by our MNU Engineering Department under the advice and instruction of
the faculty of the University of California Munkhbat said
The technology was developed by University of Californialsquos solar director and professor Roland
Winston who is also a world-renowned scientist in the solar research field Winstonlsquos technology is
already operational at the University of California Purdue University and the Gas Institute of
Chicago although it has not yet been released for commercial deployment anywhere in the world
―My goal in working with MNU is to provide the technology and the staff he said ―Ultimately it
is the Mongolian engineering students that will be required to install and operate these systems as
well as determine the scope of the application beyond simply providing a high temperature heat
source
Source Mongolian National University
MCDONALDS INTERNATIONAL CALLS FOR FRANCHISEE TO POSSIBLY OPEN IN MONGOLIA
McDonalds International sent out a press release on December 10 calling for partners to approach
the company to open its first burger outlets in Mongolia
―We have not set a firm date for the development of McDonalds restaurants in Mongolia In the
future we may take steps to open McDonalds restaurants in Mongolia and if we seek a franchisee to
represent us the person will have the following characteristics
―High integrity business experience in the market history of success ability to work well with a
franchisor ability to complete a training program that can take about nine months willingness to
devote full time to the McDonalds restaurant business retail experience knowledge of real estate
market significant capital
The press release ends by inviting candidates to apply for a franchise
Source BNE
JAPANESE ldquoSUN RICE PLANT OPENS IN MONGOLIA
An opening ceremony for Mongolialsquos Technik Import LLC and Japanlsquos Niigata Kubota ―Sun Rice
factory in Ulaanbaatar on December 10
Niigata brown rice will be imported sorted and packed at the Ulaanbaatar factory which has a
daily capacity for the production of two to three tons of packaged rice The plant is equipped with
fully automated machines from Kubota The rice will begin sale in the domestic markets at MNT
5000 to MNT 7000 per kilogram
―Mongolia has been receiving rice from the people of Japan under aid program for many years
said Deputy Minister B Tsogtgerel ―During the latter event I and Ambassador Takenori Shimizu
were discussing that the period of receiving rice as aid is over and now the time of reciprocal
assistance has come and the ―Sun Rice factory is a sample of joint cooperation to produce the
world known quality in Mongolia
Niigata Prefecture is the second largest producer of rice in Japan after Hokkaido
Source Info Mongolia
MNBC MIGRATES TO DVB-T2 WITH THOMSON VIDEO NETWORKS
Video Mongolia Digital Broadcasting (MNBC) has launched Mongolias first ever DVB-T2 service using
head-end systems from Thomson Video Networks
Launched in 2007 MNBC was Mongolias first digital terrestrial TV network operator and will now be
able to broadcast up to 120 digital TV channels over five UHF transponders to maintain its position
and compete with Mongolias national satellite operator Working with systems integrator Digital
Horizon MNBC has deployed TVNs Vibe EM1000 multi-channel SD encoders and NetProcessor 9030
multiplexer and video processor with an embedded DVB-T2 gateway
Source Rapid TV News
CHINESE FIRM NEGOTIATING TO ACQUIRE JUST AGRO
A Chinese company is in negotiations to purchase Mongolias only meat exporter said a company
source
Just Agro LLC which owns 11 meat companies with the Makh Market brand is reportedly the subject
of negotiations for sale to a Chinese entity said the source who asked not to be named The Just
Agro company provides 40 percent of meat processing and 30 percent of storage in Mongolia and is
the only meat exporter in Mongolia
Last July authorities revealed that Just Grouplsquos Sh Batkhuu falsified signatures of the State
Property Committee and Erdenet Mining Cos director to receive USD 131 million in loans from
South Africas Standard Bank putting up the Erdenet Mine as collateral for the credit After Just
Group was dissolved the central bank took over all its assets including Just Agro
Source Unuudur
MONGOL TV EXPOSES MEDIA CORRUPTION WITH FAKE MCDONALDS STORY
An investigative news show on Mongol TV planted a false news story last week with all 9 of
Mongolias major local media outlets about McDonalds opening a branch in the country The
exercise was undertaken to expose corruption and the rampant practice of paid-for journalism in
Mongolia Mongol TV said
The appearance of a Mr P Rank promising McMutton burgers and goat milk-shakes in the
official press release set off no alarms at the media networks which took between USD 150 and
USD 700 from an undercover journalist to run the story on their websites on the front page of three
newspapers and on TV news on three networks including the local public broadcaster
―Soon the first letter our children learn will be Mlsquo Mr P Rank says with a golden shining smile
according to the fake release which also claimed McDonalds was to be sponsored by Mongolialsquos
Health Ministry and sold in schools all over the country
After Mongol TV unveiled the sting it invited representatives of the 9 duped media organizations to
explain their actions though all reportedly declined
Source Hollywood Reporter
EBRD ADOPTS NEW STRATEGY FOR ENERGY AND NATURAL RESOURCES SECTOR
The European Bank for Reconstruction and Development (EBRD) has adopted a new strategy that
will guide its investments in the energy and natural resources sector for the next five years EBRD
press release reported Tuesday
The bank sets out a commitment to helping its countries of operations move toward a sustainable
energy future The EBRD region which stretches from Morocco to Mongolia is faced with a
challenge of providing sustainable secure and affordable energy The energy strategy identifies
energy efficiency as the first and best response to this challenge
―What the EBRD brings to this challenge is our focus on structural reform said EBRD Managing
Director for Energy and Natural Resources Riccardo Puliti ―We have learnt from our work that
when properly channeled market forces can be harnessed to make energy sectors more sustainable
- environmentally economically and politically
The bank intends building on its well-established support for the Extractive Industries Transparency
Initiative by requiring clients operating in the extractive industries sector to disclose subsoil
contracts and licenses as well as all payments they make to local and national authorities
In the case of coal-fired generation the strategy supports the move to lower-carbon fuel sources in
response to the challenge of climate change In alignment with other international financial
institutions the EBRD will not finance any coal-fired power generation projects except in rare and
exceptional circumstances in which there is no feasible alternative energy source
The strategy also reinforces the EBRDs growing support for renewable energy which will include
financing both energy-generating capacity and key infrastructure such as transmission lines and
backup generation
―We have also developed and invested in the first wind farm in Mongolia - where it was also the
first new energy generator in 30 years said Puliti
Source Trend News Agency
SUSTAINABILITY HOSTS SESA WORKSHOP
Sustainability East Asia LLC organized a National Validation Workshop on 10 December as part of its
responsibilities for establishing a strategic environment and social assessment (SESA)
Participants from across the country arrived to represent government the private sector and non-
government organizations to discuss the proposed SESA The next step will be to assess mining
growth options and identify at least three likely growth scenarios which mining could bring to
Mongolia Afterward the SESA team will evaluate the environmental and social issues that are likely
to arise as a consequence of each scenario
The Mining Sector Institutional Strengthening Technical Assistance Project commissioned
Sustainability to conduct a strategic environmental and social assessment for Mongolias mining
sector
Sustainability will also perform a gap analysis of the legal regulatory and institutional capacity to
deal with each possible scenario An action plan is expected for SESA by summer 2014
Source Sustainability East Asia LLC
UB REGISTERS MATERNITY HOSPITAL NO 1
The new building annex for Maternity Hospital No 1 was registered as capital city property
13 December at a regular session of the Ulaanbaatar Citizens Council This maternity hospital
building was built with financing from Boroo Gold and was presented as a gift to the people of
Mongolia With a capacity to receive 150 mothers and children its total cost was MNT 92 billion It
includes the hospital building of 1169 square meters external heating clean water and sewer
water pipelines a diesel station an asphalt road a pedestrian walkway outdoor vegetation and an
external LED sign
This new building was commissioned 15 June The new annex has one vacuum operation room and
two standard operating rooms on the fifth floor 100 beds for women and 50 beds for infants on the
third and fourth floors paraclinical and sanitation units a pharmacy a conference room and
training rooms on the second floor an ambulatory section and reception on the first floor and staff
cafeteria closets washrooms and a disinfection chamber in the basement
Source Centerra Gold Inc Newsmn
RIO TINTO‟S SAM WALSH DIGS IN FOR THE LONG HAUL
Sam Walsh wants to remain as Rio Tinto PLClsquos chief executive beyond the end of his contract and
has told the minerlsquos board he will not be ready to retire in 2015
―I am there if they want me said Walsh ―Likewise if therelsquos someone else who can come in and
take what Ilsquove done to the next level thatlsquos fine too
The Australian 63 later this month replaced Tom Albanese 11 months ago after Rio decried
―unacceptable writedowns on its coal business in Mozambique Walsh says investors support his
strategy to cut costs and sell non-core assets
Walsh said he has explored selling all of Riolsquos aluminum business this year in what would be a
signature reversal of Albaneselsquos costly purchase of Alcan in 2007 But he says no offers have been
good enough while the business is not generating enough cash for an initial public share offering or
spin-off to Riolsquos shareholders Walsh has also been frustrated in attempts to sell Riolsquos diamonds
business
―Who would thank me if I sold something under value just to get a tick At the end of the day you
have to be pragmatic about things he said Offers ―werenlsquot in the bailiwick of where we thought
they should be
The Alcan deal epitomized Riolsquos poor recent dealmaking and Walsh admits the company had
―relaxed some of the controls it should have had Rio staff has now ―refound their mojo he said
On operating costs which Rio has said it will cut USD 3 billion next year he said ―There is rolling
momentum and thatlsquos important
Source Financial Times
KYRGYZSTAN FILES ECOLOGY DAMAGE LAWSUIT AGAINST CENTERRA
Kyrgyzstan is suing Canadas Centerra Gold Inc for 15 billion soms (USD 304 million) over what the
government says is ecological damage marking a new twist in a bitter row with the investor running
the largest Kyrgyz gold mine
The state environmental protection and forestry agency said in a statement that it had filed the
lawsuit at an economic court in the Kyrgyz capital Bishkek saying Centerra Gold had ignored its
earlier request for voluntary compensation It said the alleged ecological damage included
emissions of pollutants and waste dumps It said its claim referred to the companys operations
between 1996 and 2011
Centerra had said earlier that it viewed the governments claim as exaggerated and unfounded
The company disagrees with these charges and plans to give explanations on this matter in the
nearest time said a spokesman for the Kumtor Operating Company (KOC) the Centerra subsidiary
that runs the Kumtor mine in the Tien Shan mountains
The Toronto-listed miner which also owns the Boroo gold mine in Mongolia is already under
pressure from the Kyrgyz parliament which demands the state hold 67 percent in a proposed joint
venture to run the mine In September the government and Centerra Gold signed a memorandum
of understanding paving the way for Kyrgyzstan to swap its 327 percent stake in the Canadian firm
for 50 percent in a venture that would own Kumtor But in October the legislature voted to tear up
the document and seek control over the planned venture It gave the cabinet until 23 December to
report on its talks with Centerra Gold on setting up the venture Pearson said Centerra is having
constructive dialogue with the Kyrgyz government
Source Reuters
ECONOMY
FITCH AFFIRMS TWO MONGOLIAN BANKS AT B REVISES OUTLOOKS TO bdquoNEGATIVE‟
Fitch Ratings on 16 December revised the outlook on the Long-Term Issuer Default Ratings (IDRs) of
Khan Bank LLC and XacBank LLC to ―Negative from ―Stable At the same time the agency
affirmed the two Mongolian banks IDRs and viability ratings at B and b
The revision of the outlooks on both banks IDRs reflects weakening operating conditions as
indicated by the change in the Outlook for the Mongolian sovereign (B+) to Negative from Stable on
13 December The sovereigns outlook was revised due to mounting risks to the countrys economic
and financial stability Ratings on the two banks could be downgraded if pressures on asset quality
and liquidity intensify Persistent local-currency depreciation would reduce borrowers repayment
capacity and could lead to accelerated deposit withdrawals given the countrys high level of
dollarization
The banks ratings also remain sensitive to the withdrawal of credit stimulus as this could result in
asset deterioration on slowing economic growth or higher inflation Further decline in the
governments international reserves could also trigger a negative rating action as the banks
currency-related risk is counterbalanced by the authorities swap facility and unlimited foreign-
currency conversion Both banks ratings are also sensitive to any changes in their steady access to
capital from private-sector owners
Khan Banks Support Rating and Support Rating Floor (SRF) reflect Fitchs view that as the largest
bank in Mongolia it would be likely to receive state support in case of need However the
Mongolian sovereigns ability to provide timely support to the banking system remains limited as
underlined by its IDR of B+ A downgrade of the sovereign ratings would point to weakening in the
Mongolian governments ability to provide timely support to the banking system which put negative
rating pressure on Khan Banks SR and SRF In contrast Fitch expects XacBanks SR and SRF of 5B-
to be maintained even if the sovereigns rating is downgraded to B This is because the current SR
and SRF already reflect the agencys view that support from the sovereign in case of need cannot
be relied upon
The rating actions are as follows Khan Bank Long-Term Foreign-Currency IDR affirmed at B
Outlook revised to Negative from Stable Short-Term Foreign-Currency IDR affirmed at B Long-
Term Local-Currency IDR affirmed at B Outlook revised to Negative from Stable Viability Rating
affirmed at b Support Rating affirmed at 4 Support Rating Floor affirmed at B XacBank Long-
Term Foreign-Currency IDR affirmed at B Outlook revised to Negative from Stable Short-Term
Foreign-Currency IDR affirmed at B Long-Term Local-Currency IDR affirmed at B Outlook revised
to Negative from Stable Viability Rating affirmed at b Support Rating affirmed at 5 Support
Rating Floor affirmed at B-
Source Fitch Ratings
MONGOLIA SCORE FALLS ON POLITICAL RISKS INDEX FOR MINING INVESTMENT
An annual survey by Behre Dolbear of political risks saw Mongolia decline 5 points in an index
ranking Mongolia 19th out of 25 countries
Mongolia this year received a score of 269 compared with 32 last year Leading the countries
surveyed was Australia down 07 points from last year Russia with a total score of 171 compared
with 16 last year was the lowest ranking
The 25 countries considered in this yearlsquos survey are ranked based on seven criteria
-the countrylsquos economic system
-the countrylsquos political system
-the degree of social issues affecting mining in the country
-delays in receiving permits due to bureaucratic and other issues
-the degree of corruption prevalent in the country
-the stability of the countrylsquos currency and
-the competitiveness of the countrylsquos tax policy
Each criterion is rated on a qualitative scale from one (worst) to 10 (best) that reflects conditions
that promote investment growth in the mining sector The maximum score attainable for a country
is 70 points
Source Behre Dolbear Group
MONGOLIA LOOKS FOR SECOND CHANCE WITH FOREIGN INVESTORS
Saruul Ganbaatar the deputy head of Mongolias stock exchange hopes the countrys days of
interventionist economic policies are over and new laws ensuring foreign investors access to the
frontier markets industries will bring back sorely needed cash
Ganbaatar 32 who cut his investment teeth in Chicagos financial houses after graduating from
Loyola University is careful not to over-promise on what the stock market can deliver in 2014 and
beyond in terms of new listings or overall growth In October a law was passed easing ownership
restrictions for private companies to invest in the strategic industries A Securities Markets Law
coming into effect 1 January 2014 is expected to provide the key ingredient to attract deep
pocketed institutional investors such as mutual funds to invest
This really is the missing ingredient said Ganbaatar who has been traveling the globe promoting
the changes in the laws to global investors for the past two weeks
The stock index fell 19 percent in 2012 and year-to-date is down 115 percent although it did start
to climb with the newly passed laws On 1 January the new Securities Markets Law will allow
Mongolias commercial banks to offer custodial banking services Custodial banks serve as safeguards
for a firm or individuals financial assets playing a critical role in the final settlement of market
transactions Total market capitalization now is between USD 900 million and USD 1 billion Dont
expect the number of new listings to mushroom There may instead be a cull of companies Fifty-
five to 60 of them many of which have not traded in years are being reviewed for potential
delisting
The Mongolian Stock Exchange 100 percent state-owned is perhaps itself a candidate for
privatization It has been in a strategic partnership with the London Stock Exchange for two and a
half years
They have the right of first refusal he said
Source Reuters
CPI INCREASES TO 12 PERCENT YEAR-OVER-YEAR IN NOVEMBER
The National Statistical Office reported a 12 percent increase in the national consumer price index
(CPI) in November year-over-year
The CPI growth which also in November grew 13 percent from the previous month was explained
by a 14 percent increase in food prices and non-alcoholic beverages 23 percent for clothing
footwear and fabrics and 07 percent for housing water electricity and fuels
Source Info Mongolia
GROWTH SEEN IN EXPORT OF PRECIOUS METALS
The export value of precious metals grew 114 percent in November from the month before and 63
percent from the same period in 2012 according to the National Statistical Office
Exports totaled USD 38 billion in the year to December while imports grew to USD 58 billion The
foreign trade balance saw a deficit of USD 2 billion November saw exports of USD 381 million and
imports of USD 514 million with exports and imports in decline between July and November The
value of export products for the first 11 months was USD 11 billion Despite the gain in precious
metal exports exported minerals which represented 81 percent of all exports in the year to
November fell 129 percent from the year before
Source Zuunii Medee
MNT 788 BILLION WILL BE ENTERED INTO THE STABILIZATION FUND
The Stabilization Fund is set to collect MNT 49 billion this year and MNT 298 billion next
The Stabilization Fund was established to collect surplus revenue in years of economic gains from
the mining sector to cushion possible annual losses during economic downturns and weak
commodity demand Any gain in the price for gold and coal next year will also be reflected in
allotments to the fund
Source Zuunii Medee
ECONOMIC DEVELOPMENT MINISTRY PLANS TO PUT 81 OF BUDGET INTO CONSTRUCTION
The Economic Development Ministry plans to invest MNT 814 percent of its total investment budget
into construction
Beginning 1 January 2014 the ministry will provide MNT 9303 in loans toward the construction
sector The ministry will spend 39 percent of its budget for reconstruction and repair 10 percent
for the purchase of new techniques and technical equipment 3996 percent for infrastructure
2743 percent for education and health 636 percent for employment and agriculture and 2926
percent for other sectors of the economy
Projects include the construction of 30 clinics 27 cultural centers 6831 km of paved roads and
1032 m length of bridges Mongolia has received USD 55 billion in aid in the last two decades of
which 55 percent was in the form of low rate loans and 45 percent as non-repayable grants for
investments into agriculture infrastructure power and health sectors
Economic growth since 2011 has allowed Mongolia less aid than in the past The government has
now turned its focus on providing funding with concession agreements to large scale projects such
as the Nariin Sukhait-Shivee paved road and the power station at Mogoin gol Other projects include
Power Plant No 5 the Altanbulag-Ulaanbaatar-Zamyn Uud highway the Tavan Tolgoi- Khanbogd-
Khangi road and the Tuul Songino water reservoir complex
Source Zuunii Medee
TT POWER PLANT MAY NEED CONCLUSION TO OT DISPUTE SAYS DIRECTOR
Uninterrupted development of the Tavan Tolgoi power plant will ride on the outcome of disputes
concerning Oyu Tolgois underground mine said the director of the plant
―One of the main risks is the issue of a main user Enkhsaikhan said ―The key buyer of the power
from the TT Power Plant is OT Due to the uncertainty over phase twolsquo and unresolved matters
with the government of Mongolia OT is not regarded as a reliable buyer on a stand-alone basis
He added that the power company may request a guarantee from Oyu Tolgoi
A consortium that includes Koreas Posco Energy and Daewoo Engineering and Construction GDF
Suez Energy Asia Japans Marubeni Corp and Kansai Electric Power in March was selected for
development of the plant which has a preliminary estimate cost of USD 1 billion Those expenses
include installation of 150 kilometers of electric lines between Tavan Tolgoi and Oyu Tolgoi The
consortium will be expected to raise 30 percent of the cost itself while the remaining 70 percent
will come from bank loans However the uncertainty surrounding the Oyu Tolgoi copper mine could
create more hold ups
Source Zuunii Medee
CABINET TO CONCLUDE CONCESSION ON ALTANBULAG-ZAMYN UUD HIGHWAY
The Cabinet of Ministers ordered ministers to conclude a concession agreement for the Altanbulag-
Ulaanbaatar-Zamyn-Uud highway
The government is planning to establish the concession contract with the Chinggis Land
Development Group which according to the agreement shall have exclusive rights to construction
ownership and transfer of property using its own financing The concessionaire shall complete the
construction within three years after that shall operate the facility for another 30 years before
transferring the ownership to the Government
If Chinggis Land accepts these terms it would be responsible for developing a feasibility study and
blueprint of the project to be approved by the relevant ministries before concluding a financing
agreement The concession agreement will come into effect after the Chinggis Land Development
Group obtains a financing agreement for USD 1 billion from a commercial bank of Mongolia
The government will be responsible for freeing up the land where the highway is planned while the
Chinggis Land would cover the costs for doing so
Source Montsame
MNT 116 BILLION WILL BE SPENT FOR BUILDING EMERGENCY ALARMS IN UB
The National Emergency Management Agency has installed an emergency alarm system in 60
locations of Ulaanbaatar The alarm will alert citizens to natural disasters such as earthquakes
The alarms will be controlled from a center by microwave radios and satellite communication
devices
Source Udriin Sonin
EIU CLARIFIES EXTENT OF OFFICIAL ESTIMATES OF OIL SHALE RESERVES
The latest research from Mongolias mining ministry gives a clearer picture of oil shales
development potential in the coming years Although Mongolia has long been known to have
substantial oil shale deposits previous estimates were extrapolated from rudimentary surveys
conducted in the 1990s and thus left the actual reserves open to speculation
Plans to develop the industry took shape only in April 2013 when an American company Genie
Energy signed a five-year deal with the Petroleum Authority of Mongolia to explore oil shale
reserves in central Mongolia Genie also plans to build a USD 4 billion processing factory in Tuv
Aimag According to government projections the processing plant will generate USD 850 million of
tax revenue annually Aside from the economic benefits of the project domestic fuel sources could
help Mongolia to improve its energy security by loosening the countrys dependence on its powerful
neighbors At present 90 percent of Mongolias oil and related products come from Russia with most
of the remaining amount being imported from China
Yet the benefits of large-scale oil shale extraction are not as clear as they might seem at first
glance Most importantly Mongolias oil shale resources should not be confused with the shale oil
phenomenon that is currently sweeping the United States Oil shale (also called kerogen) is more
expensive to extract than shale oil and carries greater environmental costs In particular oil shale
requires a large amount of water to process which could be a risky proposition in Mongolia where
hydrological resources are already under strain Although other countriesmdashEstonia in particularmdashuse
oil shale as a substitute for coal extracting liquid fuel from the shale is a complex and relatively
untested process
Genie Energys progress on the project seems more substantial than that of comparable coal
liquefaction projects that have faltered in the region However environmental technical and
political limitations suggest that Mongolias overall dependence on foreign fuel will not change
significantly in the foreseeable future
―We remain doubtful that oil shale will play a significant role in Mongolia in the next two years so
our economic growth and trade forecasts will remain unchanged said the Source
Source Economist Intelligence Unit
MONGOLIA AND THE THREAT OF THE RESOURCE CURSE
Mongolia is at a crossroads while investors complain the government is dragging its feet on allowing
miners to start digging it is crucial that it get things right at the early stages of the resources
boom
Mongolias challenge will soon be the worlds says Richard Dobbs and his team at McKinsey in a
report predicting a USD 17 trillion investment bonanza by 2030 to keep up with demand for oil gas
and other materials In 1995 about 58 countries depended on resources for the bulk of their output
and wealth In 2011 that number had risen to 81 By 2030 roughly half of the worlds economies
will essentially become giant filling stations for developing superpowers from China to South Africa
That means that instead of the world moving toward greater transparency democracy and freer
markets we could see rising corruption levels and even greater income inequality
Economies with natural-resource endowments have a huge opportunity to transform their
prospects but history suggests that they could all too easily squander the windfall says Dobbs
director of the McKinsey Global Institute in London
The world would be wise to take steps today to break this cycle McKinsey recommends several
While not terribly original they include strengthening public institutions and good governance
building decent infrastructure boosting national competitiveness promoting sound fiscal policy
making and spending the windfall wisely while engaging in forward-looking economic and social
planning The trouble is that political will and integrity is often the first casualty once the minerals
start flowing out and the spoils come pouring in
Mongolia is at that very crossroads today Investors complain the government is dragging its feet on
allowing miners to start digging But its more important to get things right at the early stages of
the resources boom That means acting now to create the institutions and regulatory frameworks
needed to ensure revenue transparencymdashknowing exactly how much money is being dug out the
ground and where its going Why not set up a sovereign-wealth fund to save for Mongolias future
When the stakes are that high a little patience can go a long way
Source Bloomberg
MONGOLIAS NOMADS WARM TO SOLAR POWER
In Mongolia often known as the land of the blue skies the sun shines for 250 days on average each
year It beats down on the sparse plains and on the Gobi desert that spans the countrys southern
border with China
It shines even during the frigid winter days on the hundreds of thousands of nomads who still roam
the steppes herding animals and living in dome-like tents calling gers About 800000 of Mongolias
28 million inhabitants still live the traditional nomadic lifestyle that has remained largely
unchanged for generations Apart from the addition of motorbikes the occasional petrol generator
and a passing trade from intrepid tourists wanting to stay in a ger for the night life is almost the
same as that of many nomads grandparents and great-grandparents Almost but not exactly
Dotted across the steppes glints of light can be seen as the sun bounces off the solar panels that
have been installed on the sides of gers made of felt and yaks wool At the start of this millennium
Mongolias herders and nomads had little or no access to modern electric power and its potential
benefits But as of 2013 thanks to a concerted push by the Mongolian government almost 70
percent of nomadic people have access to electricity Bor a herder who mainly travels around
western Mongolias Arkhangai province is one of the people whose family benefits from portable
solar home systems (SHS)
We use it for generating the power for lighting in the ger charging phones we can also generate a
fridge to keep food longer and we can run a television That is very useful for us because we can
get the most recent weather forecast which is important for our work and keeping our animals
safe Before we had power it was very difficult Now it is almost like living in the city
The ability to charge mobile phones is also important for the herders who often have children
staying at boarding schools Access to electricity also allows families to contact emergency health-
care and doctors for advice without having to make the often arduous journey to the nearest village
or town
The solar systems were distributed and installed with the help of the World Bank after the
Mongolian governments National 100000 Solar Ger Electrification Program ran into difficulties A
World Bank report Capturing the Sun in the Land of the Blue Sky describes the difficulties faced by
the Mongolian government on its ambitious project
By 2005 five years into the plan 30000 families had been kitted out with an SHS but then the
program began to stagnateThe government of Mongolia recognized that considerably more effort
was necessary not only to keep the program on track but to scale-up implementation in order to
achieve the National 100000 Solar Ger Electrification Program target the report said In 2006 the
World Bank agreed to cover half of the initial outlay costs for each family as well as after-sales
maintenance with 50 centers set up across the country including at least one in each of its 21
provinces so that the herders would not have to travel to Ulaanbaatar every time the solar panels
needed maintenance
The SHS project also offers environmental benefits to a country where the ratio of carbon dioxide
emissions to economic output is ten times higher than the world average because of the increase in
mining over the past decade as the true extent of Mongolias mineral wealth became apparent The
solar systems are slowly replacing the diesel generators used by some nomads as a means of
generating power although they are still using stoves for heating burning wood coal and dung
throughout the year
Source Al Jazeera
IRON-ORE AND COAL PRICES GO SEPARATE WAYS
Prices of the key ingredients in steel productionmdashiron ore and coking coalmdashare moving along sharply
different paths as mining companies resist cutting coal output despite the market being awash with
the raw material
While iron-ore prices have risen 22 percent since May coking coal is still searching for a rebound
Coking-coal prices are off more than 4 percent over the same period China is on course for another
year of record steel production with supply directed to the construction of high-rise apartment
buildings the manufacture of luxury cars and other uses
There is simply too much coal on the market the International Energy Agency said in a report this
week
Shipments of steelmaking coal from Australiamdashthe worlds biggest exporter of the commoditymdashare
forecast by the government to rise to 178 million tons in 2015 from 145 million tons last year Most
goes to China which accounts for 60 percent of global demand In contrast global iron-ore
exporters are struggling to increase output in areas other than Australias remote Pilbara region
supporting prices of that commodity The spot price of iron ore climbed to nearly USD 140 a ton
earlier this month a four-month high Prices have since eased a bit to USD 13430 a ton but
remain well above the consensus forecasts of analysts at the start of this year
Coal miners could scale back production but that isnt always easy to do In Australia many miners
are locked into so-called take or pay contracts with rail and port operators Many analysts dont
expect coking-coal prices to rebound for at least another 12 months RBC Capital Markets expects
coking-coal prices to average USD 154 a ton in 2014 down from USD 159 a ton forecast for this
year Instead they see more chance that iron-ore prices will come down more sharply RBC predicts
an 11 percent fall in iron-ore prices next year as new supply from Anglo Americans Minas Rio
project and mines owned by Fortescue Metals Group Ltd is added to the market UBS is even more
bearish predicting iron ore will fall below USD100 in the second half of 2014
Source Wall Street Journal
ARE COMMODITIES TRADERS bdquoTOO BIG TO FAIL‟
When the banking industrylsquos top lobby group commissioned a report by on commodity trading
houses the idea was to show trading houses like Glencore Xstrata Vitol or Cargill were ―too big to
fail and therefore needed to be regulated in a similar manner to the banks
But instead of highlighting the inherent issues surrounding the industry the report found trading
companies posed less systemic risk than the big banks As a result the Global Financial Markets
Association which commissioned the report decided not to finalize or publish it (The GFMA claims
that it often commissions reports which are shared with regulators and other interested parties but
never published) But the debate hasnlsquot ended
A separate report published in July by the Centre for European Policy Studies a think-tank argued
the growth of commodity trading houses which underpin the global trade in raw materials could
―have systemic implications Commodities trader Trafigura has become the latest to wade into the
debate In its recent prospectus for a EUR 500 million bond issue the worldlsquos second largest metals
trader and third biggest oil trader addresses the GFMA report as well as the issue of systemic risk
Making some tart observations the trading house says the GFMA paper was aimed squarely at the
Financial Stability Board a group of global regulators
―[The report] was widely seen as a tactic by some banks active in the commodity trading space as a
way of creating more equality between market participants by seeking to usher in further
restrictions on pure commodity trading companies the prospectus says
Commodity traders are facing the need to be more open about their operations and lift the veil of
secrecy Indeed the author of the GFMA reportmdashCraig Pirrong a widely respected academicmdashis
working on a white paper on commodities traders Commissioned by Trafigura it will look at what
commodities trading houses activities and the recent trend to accumulate more assets risk
management as well as looking at different types of commodity companies
Source Financial Times
SMOG DARKENS SHANGHAIS PROSPECTS FOR BECOMING A GLOBAL FINANCIAL CENTER
In the debate over which matters more in China money or quality of life the quality-of-life side
may have found the ultimate argument If you cant breathe nothing else really matters And itlsquos a
debate Mongolia has to have as it makes its own steps towards industrial and economic growth
Chinas pollution problem is spreading and growing worse a fact on stark display last week in
Shanghai the countrys financial center A stretch of filthy-air days in that coastal city so
thoroughly shocked residentsmdashwho had largely escaped the smog that has long plagued the likes of
Beijing and Harbinmdashthat it inspired fresh talk about getting away from China Lawrence Shu a
Shanghai-based partner at Hylands Law Firm said he and his friends are thinking more seriously
about moving abroad
The smog had a big impact because it feels really bad if you cant breathe freely he said
The environment used to take a back seat among the Chinese But as they get richer they are
traveling abroad more making the pollution back home more obvious The Internet also
contributes Blue-sky pictures posted on social networks by Chinese travelers abroad constantly
remind folks of what is lacking at home and Chinese now use various apps to track air-quality data
If Shanghais smog discourages smart financial professionals from wanting to live there that will
hinder Chinas effort to create a global financial center If businesses such as financial companies
and luxury-goods makers perceive that Chinas elites are spending more time outside their home
country they will be less willing to invest in China
Most rich Chinese havent packed their bags and left yet but they are keeping their options open
Relocation is a big decision said Anne Wang who works in the financial industry in Shanghai But
just in case she recently received a US visa that would allow her to live there
Source Wall Street Journal
POLITICS
MINERALS POLICY ENTERS FINAL DISCUSSIONS
The government published a final draft of Mongolialsquos State Policy on the Minerals Sector for 2013
through 2025
The document was first presented to Parliament in July and is now entering final discussions during
the autumn plenary session of Parliament following a 42 percent drop of foreign investment and 23
percent fall in the currency year-on-year
―We have reviewed the proposed State Policy on the Mineral Sector which we feel will be a
positive step forward if passed said the Source ―The passing of this policy will result in more
transparency and an increasing participation from foreign investors That said it will take time for
these feats to be accomplished Investors will be weary of Government promises as they seek
longevity to prove Government intentions
The proposed policy is divided into four main sections rationale principles main policy and
implementation-results The major points stressed in the policy include transparency and
responsible mining The law sends the message that growth is going to be driven by private sector
participation and the intent to provide a stable investment environment technological innovation
and value-added activities
Key priorities of the law since it was first unveiled include stability of taxation and the legal
environment an end to any discrimination between foreign and national investors and the
preservation of strategic resources and deposits
This most recent version saw the inclusion of a new section supporting development of local areas
and the interests of local citizens Other key elements include explorationmdashwhich would see
greater government regulation for strategic mineral deposits while cutting down bureaucracy and
conducting scientific researchmdashproduction support and local support The new document also
highlights greater support for non-governmental organizations for the environment allowing them
to claim damages from mining operations the establishment of funds to support economic
diversification environmental protections and land rehabilitation
The new draft has removed the risk assessment section and replaced it with a section on
implementation This includes the improvement of the legal environment and producing of relevant
regulations programs and projects for 2013 to 2015 followed by the implementation of programs
and projects from 2014 to 2025 and finally the provision of conclusions on midterm policy
implementation and further planning for up to 2020 and 2025
―We believe that this policy will take us one step closer to attracting investors and supporting
private sector development in Mongolia said the Source ―Despite current investor hesitation this
state policy in addition to the new amended Minerals Law set to pass next year will further
encourage investors to enter the market and will build support for the junior mining community
Source Mongolian Investment Banking Group
PARLIAMENT UNANIMOUSLY BACKS ldquoSMART GOVERNMENTrdquo INITIATIVE
Parliament has unanimously backed President Tsakhia Elbegdorjs ―From Big Government to Smart
Government initiative for government reform concepts having signed a joint statement of support
on 13 December
The joint statement gives full support to the presidents initiative and commits to cooperation for
its undertaking This includes support for enhancing government systems and policies in line with
democracy and a market economy improving the capacities of public services and curtailing
government intervention into private business affairs Also included are protections to private
business including establishing government structures for rule of law support to domestic
industries and honoring contracts The fight against corruption is another main perogative
On 16 November 16 the Office of the President of Mongolia organized a national consultative
meeting on this topic at the Government Palace Elbegdorj next met with members of the
Parliament on 9 December to organize an open dialogue with representatives of Parliament for an
appeal for them to sign the joint statement Reaffirming the commitment of the Mongolian
lawmakers to a breakthrough reform of the Government the leaders of party floors and factions in
the Parliament and independent members of the Parliament signed the document for the reform on
December 13 2013
Source Montsame
GOVERNMENT CALLS TO END PRACTICE OF APPOINTING MPS AS MINISTERS
The coalition government has thrown their support behind President Tsakhia Elbegdorjs proposal to
prohibit Parliament members from serving as cabinet ministers
Democratic Party members discussed a draft resolution and proposed amendments submitted by the
president for the new restriction at a party meeting on Monday The draft amendments were
unanimously backed by the faction The Justice Coalition which includes the Monglian Peoples
Revolutionary Party and Mongolian Democratic Party came to the same conclusion following its own
meeting said coalition head N Battsereg on Monday
Source Montsame
COMMITTEE LEADERS TO BE ELECTED THIS MONTH
The coalition government will soon be electing officials to lead the various committees in
government
Parliament has 8 standing committees to elect leaders to this month with each committee to be
led by a representative of the coalition government Current committee heads are Ts Tsolmon at
the Security and Foreign Policy Committee G Bayarsaikhan at the Environment Food and
Agriculture Committee Z Bayanselenge at the Social Policy Education Culture and Science
Committee R Burmaa at the Petition and Requests Committee A Bakei at the State Structural
Committee Ts Davaasuren at the Budget Committee Sh Tuvdendorj at the Legislation
Committee and B Garamgaibaatar at the Economic Committee
Source Zuunii Medee
FOREIGN CURRENCY PAYMENTS BANNED FOR MININGEXPLORATION LICENSING FEES
The Ministry of Finance has banned the use of foreign currencies to pay for mining and exploration
licensing fees to the Mineral Resources Authority beginning 1 January 2014
The Ministry of Finance has prompted these entities and companies holding licenses to comply with
Mongolian currency law that states that all businesses and agencies must do business in Mongolian
tugrug According to the 2009 law transactions must not be carried out in foreign denominated or
foreign currency based rates
Source Newsmn
MINING MINISTRY TO COOPERATE WITH ASSOCIATION OF FLUORSPAR EXPLORERS
The Ministry of Mining Wednesday established a memorandum of mutual understanding with the
Association of Fluorspar Explorers (AFE) to cooperate in augmenting the countrylsquos export
In addition to expanding export goals include developing transparent and responsible mining
improving qualities and standards of fluorspar metallurgy and flotation concentrate and in
increasing the production output of the minerallsquos ore enrichment The hope is the memorandum
will create a launching point for a national program for fluorspar its exploitation increase the
volume of production by intensifying research and increase competitiveness in international
markets It will also be necessary to introduce the latest technology to the country along with
running joint trainings with foreign NGOs the Ministry said
Source Montsame
DP REJECTS AMARJARGAL‟S RESIGNATION
Parliament voted against MP R Amarjargallsquos resignation request on 12 December
During Tuesdaylsquos meeting the majority of the Standing Committee on State Structure voted against
Amarjargal`s resignation The head of the Democratic Party (DP) caucus D Erdenebat took a
strong stance against letting Amarjargal leave
Amarjargal said he wanted to resign to take responsibility on behalf of his party members for the
current political situation and economic restraints in Mongolia DP members agree with his
conclusion but encourage him to make the effort and participate for social change and
development Members of the opposition Mongolian Peoplelsquos Party members said that Amarjargal
could see the problems and nature of the majority of Parliament and praised his plan to resign
Source Newsmn
MPP HEAD TO STEP DOWN
Mongolian People Party (MPP) Head N Enkhbold has requested his resignation as party leader
MPP Deputy Head D Oyunkhorol said 9 December that Enkhbold submitted his request to step down
during a party meeting Oyunkhorol said Enkhboldlsquos resignation was due to personal reasons The
new party head will be appointed by the MPPs governing board
Source Udriin Sonin
FIFTH ROUND OF NEGOTIATIONS FOR THE JAPAN-MONGOLIA ECONOMIC PARTNERSHIP
AGREEMENT
The fifth round of the negotiations for the Japan-Mongolia Economic Partnership Agreement (EPA)
will be held from 16 to 19 December in Ulaanbaatar
The Japanese delegation will be led by Jun Yokota ambassador in charge of economic diplomacy
and the Mongolian delegation will be led by Ochirbat Chuluunbat vice minister for economic
development Experts from relevant ministries and agencies of both sides will participate in the
meetings
In this round negotiations are in areas including trade in goods and investment
Source 4-Traderscom
FIRST MONGOLIA-CHINA JOINT BORDER COMMISSION MEETING IN BEIJING
The very first meeting of Mongolia-China joint commission of borders took place 11 and 12
December in Beijing China
This meeting was co-chaired by T Togsbilguun a director of the Department of Neighbour
Countries of Mongolialsquos Ministry of Foreign Affairs and by Xiao Jiangguo a representative of border
checkpoint and seaport affairs Both sides shared on ideas for implementation of the
intergovernmental contract on the border regime and reached some agreements on conducting a
joint examination in the border signs and on activating the collaboration in law enforcement around
frontier areas After this they discussed issues of developing border checkpoints at a same level
putting some border checkpoints into a permanent regime giving an international status to four
checkpoints
The gathered also made a protocol on their meeting and inked its results The next meeting will run
in 2014 in Ulaanbaatar
Source Montsame
BELARUS TO OPEN EMBASSY IN MONGOLIA IN 2014
Belarus will open its embassy in Mongolia in 2014 reads a resolution from the Belarus Council of
Ministers of the Republic of Belarus from 12 December 2013 Belaruslsquo Finance Ministry will finance
the costs of opening and maintaining Belarusian Embassy in Mongolia from the funds set aside in its
national budget for the opening and maintenance of diplomatic missions and consular missions of
the Republic of Belarus abroad
Source Belarusian Telegraph Agency
HOWELL NEW JERSEY USA BECOMES SISTER CITY OF SUKHBAATAR DISTRICT
The Howell Township and the Sukhbaatar district in Mongolia signed a memorandum of
understanding to create sister citieslsquo between Howell New Jersey USA and the Sukhbaatar District
on Tuesday
The program was aimed at opening up talks on how each can benefit from one another Mayor
William Gatto said Howell Township is a very diverse city and theyve taken the relationship with
the Kalmyk community here in Howell and expanded it to a country where they have had no
relationship in the past he said
The sister citieslsquo program will allow both Mongolia and Howell to exchange ideas and come up
with new and better ways to do things that benefits both cultures Outside of Mongolia Howell has
the largest population of Kalmyks in the world with many living in the Freewood Acres section of
the township Gatto said
Some of the goals of the agreement include promoting a common prosperity and development for
both parties an electronic pen-pal program and education opportunities for exchange students
Through a translator Baljinnyam Gan-erdene of the Citizens Representatives Council of Sukhbaatar
District said he came to Howell to see how democracy works in the United States
Im really glad and hope that this unforgettable and successful visit opens the door to our
friendship and prosperity between our residents Gan-erdene said
Gatto gave Gan-erdene a Howell flag and a throw blanket created by the Historical Society
depicting the history of the township Gan-erdene also gave Gatto several items including a bronze
piece of art
Source NJcom
MONGOLIAN CALLIGRAPHY ADDED TO UNESCO CULTURAL HERITAGE LIST
State Parties at the 8th Session of the Intergovernmental Committee for the Safeguarding of the
Intangible Cultural Heritage in Azerbaijan unanimously agreed to register Mongolian calligraphy as
an intangible cultural heritage in need of urgent safeguarding on 2 December
―Mongolian heritage calligraphy is now being recognized by the world and I am grateful on behalf
of my country for decision makers said Secretary-General of Mongolian National Commission for
UNESCO Gundegmaa Jargalsaikhan He noted that Mongolian calligraphy was the fifth cultural
heritage item of Mongolia to be listed and now stands among the Mongolian epic traditional folk
dance the traditional music Tsuur and a circular breathing technique
Mongolian calligraphy is a 1000-year-old writing system that vertically connects continuous strokes
together to create a word Letters of Mongolian script have been created and taught by nomads
from generation to generation During the 1937-1940 purges of the Soviet era thousands of tutors
and traditional scholars of the script were killed Those who remained alive were banned from
mentoring the younger generation Soon after that or around 1946 a new Cyrillic script was
adopted as the only eligible script therefore banning all the teachings of old Mongolian script and
Latin lettering Only in the 1970s was the old Mongolian script re-introduced to scholars allowing a
limited number of classes in universities
After the 1990 democratic changes along with the revival of Mongolian identity interest in
traditional calligraphy reawakened As a sign of such revival the very first non-communist political
organization the Democratic Union of Mongolia used folded calligraphy as its main logo
Source Info Mongolia
THOUGH IMPROVING MONGOLIA STILL REELING UNDER CORRUPTION
The third joint survey by the Asia Foundation and Sant Maral Foundation to gather data on the
perception of corruption in Mongolia revealed that efforts to curb corruption in what is considered
as one of the worldlsquos most corrupt countries could be having impact
The survey shows a significant drop in the percentage of respondents who believe corruption has
increased in the last three years from 389 percent in November 2012 to 183 percent currently In
contrast in 2006 a majority of respondents (63) indicated that corruption has increased ―a lot in
the last three years The survey also shows that corruption has declined in importance as a critical
social problem since 2006 Despite these positive signs overall respondents indicated that
corruption remains a serious issue in some specific key areas
Conducted in September of this year the survey featured face-to-face interviews in 1360
households across Mongolia including seven districts in Ulaanbaatar and 21 counties in six
provinces A majority (766) cited that widespread corruption in the law enforcement agencies is
one of the main reasons the government has been unable to tackle corruption effectively When
corruption is perceived to be this widespread the attention will obviously turn to the performance
of the apex anti-corruption body the Independent Authority Against Corruption (IAAC) The survey
shows that the IAAC is slowly but surely beginning to gain confidence among citizens The
percentage of those surveyed who think that its performance is ―good or ―very good increased
from 78 percent in March 2010 to 203 percent in March 2013 In September 2013 the result shows
a new high of 294 percent
Peoplelsquos perceptions on corruption are often shaped by personal experiences Although very few
respondents in the survey said that they had actually paid a bribe themselves (8 percent about a 3
percent drop from 2012 and an 18 percent drop since 2006) as noted before many are not willing
to report instances where they are asked for one Similarly 36 percent of respondents said they
would not pay a bribe but 26 percent indicated that they would pay if they had the financial
capability
Basanta Pokharel is The Asia Foundation‟s chief of party for the STAGE program in Mongolia He
can be reached at basantapokharelasiafoundationorg The views and opinions expressed here
are those of the individual author and not those of The Asia Foundation
Source Asia Foundation
MPP DEMANDS DISMISSAL OF MINISTERS
Mongolian Peoplelsquos Party Chairman N Enkhbold and party head S Byambatsogt submitted to the
Speaker a request for the dismissal Minister of Finance Chultem Ulaan and of Economic
Development Minister Nyamjav ―Fortuna Batbayar
Our faction believes that these ministers must be held responsible for the worsening of the
national economic situation We also intend to do the same with other ministers after hearing
opinions of people said Byambatsogt
Source Montsame
FORMER TAVAN TOLGOI JSC DIRECTOR ARRESTED
The Independent Agency Against Corruption arrested former Tavan Tolgoi JSC director Kh
Tumenbayar for undisclosed reasons
An unnamed official source suggested that the arrest may be related to abuses of power and
payments to political parties as well as the construction of a high-class hotel in Dalanzadgad Soum
Umnugobi Aimag Kh Tumenbayar is a member of the Democratic Party a member of Parliament
and is an associate of ―Ajnai Bat-Erdene the Minister of Defense who helped Tumenbayar attain
position as the director of Tavan Tolgoi for 6 years and rise to head of the Umnugobi Aimag Citizens
Council
Tumenbayar voluntarily resigned from his position at Tavan Tolgoi last month The IAAC has
reportedly not given details to the reasons for the investigation opened on Tumenbayar because of
possible connections to high-ranking officials
Source Unuudur
MONGOLIA TURKMENISTAN JOIN INTERNATIONAL RACING FEDERATION
The International Federation of Horseracing Authorities (IFHA) has welcomed racing organizations
from Mongolia and Turkmenistan as affiliate members
Recent ratification to IFHA statutes at its annual General Assembly in October created a new
affiliate membership category within the Federation Thus the Federation of Mongolia Horse Racing
Sport and Trainers and the Turkmen Atlary State Association by unanimous vote of the IFHA
Executive Council in Paris in October have become the IFHAlsquos first two affiliate members
The Federation of Mongolian Horse Racing Sport and Trainers (FMHRST) is a non-governmental
organization (NGO) which serves to the development of equestrian sport in Mongolia and works to
protect the rights of horsemen who specialize in this national sport The new affiliates were
announced by IFHA Chairman Louis Romanet this week and several key appointments to IFHA
executive office positions and committees have also been made
Source Horse Talk
MONGOL TV HEAD MEDIA CAN HELP FIX THE BIG PROBLEMS
Nomin Chinbat head of Mongol TV has grander intentions than just ridding the countrys television
business of rampant pirated content and unlicensed formats The young executive wants to help
clean up Mongolian politics and the nation by creating a free and open media
―The networks are used as propaganda channels for politicians They are used very effectively every
four years at election time says Chinbat whom the Source named one of the 25 Most Powerful
Women in Global TV at MIPCOM 2013
―There are laws against piracy but they arenlsquot implemented explains Chinbat who says that
politicians in the country of roughly three million wonlsquot challenge journalists because their
relationships with them are too cozy
Mongol TV has invested in original programming licenses all of its imported content and runs
investigative journalism features highlighting social problems such as alcoholism and corruption
The company is organizing a Mongol TV Day for February 2014 to which it has invited major
international studios to raise awareness of the issues and introduce the global industry to
Mongolia Britainlsquos ITV and Americalsquos CBS are already confirmed and negotiations are ongoing with
other attendees The situation has improved in recent years with some channels having become
what Chinbat calls ―hybrids which license some sports rights but then steal others and copy
formats
―These days some of these channels might license 25 episodes of a format and make 50 But this is
actually progress says Chinbat
Chinbat and her team were at the Asian Television Forum (ATF) in Singapore looking for new
formats that can be produced within the constraints of Mongolian television budgets However with
Mongolias young populationmdash65 percent of the country is under 35 years oldmdashmobile viewing is on
the rise and the network is already working second-screen utilization and new media applications
This demographic sweet spot should guarantee strong growth in the population economy and
nascent entertainment sector in Mongolia in the coming decades
Source Hollywood Reporter
ANNOUNCEMENTS
ldquoMM TODAYrdquo ON MNB-TV FRIDAY 1900 TO 1910
BCM is pleased to announce that Mongolian National Broadcasting continues its cooperation with
BCM on ―MM Today This English news program is aired every Friday for 10 minutes and is
scheduled from 1900 to 1910 tonight Tune in to watch this program that reports stories from
todaylsquos BCM NewsWire
BCM WEBSITES
MONGOLIAN WEBSITE bdquoPRESENTATIONS‟ AND bdquoNEWS‟ SECTIONS
The Presentationslsquo section on BCMlsquos Mongolian website can be reached via bcmmnitgeluud
As a key component of BCMlsquos Mongolian website articles from the Newslsquo section and the
government website Open-Governmentmn are regularly updated
S Oyun Minister of Environment and Green Development presentation at BCM monthly meeting on
May 27 added to Mongolian website bcmongoliaorgmnилтгэлүүд
- Байгаль орчин ногоон хөгжлийн сайд СОюун Байгаль орчин ногоон хөгжлийн шинэчлэлийн
бодлого үйл ажиллагаа МБЗ-ийн сарын уулзалт 5 сарын 27 2013
___________________________________________
ENGLISH WEBSITE PRESENTATIONS MONGOLIA REPORTS bdquoINTERVIEWSbdquo MONGOLIAN
BUSINESS NEWS‟ bdquoPHOTO GALLERY‟
The following 13 presentations are from the Mongolia Investment Summit- 2013 in Hong Kong
November 18-20
- Regulatory Update Navigating Mongolialsquos legal framework for foreign direct investment
Javkhlanbaatar Sereeter Director General Foreign Investment Regulations and Registration
Department MINISTRY OF ECONOMIC DEVELOPMENT OF MONGOLIA
- Investment keynote Investing into Mongolia in 2013 ndash Where do the opportunities lie James
Passin Co-Founder and Manager FIREBIRD MONGOLIA FUND
- Development keynote Key challenges and opportunities for continued growth in Mongolia
Randolph Koppa President TRADE AND DEVELOPMENT BANK OF MONGOLIA
- Outlining government policies and long-term plans for Mongolialsquos mining sector Amarjargal
Khurelbat Head of International Cooperation Division MINISTRY OF MINING OF MONGOLIA
- From copper to met coal Demand and price outlook and expected impact on Mongolialsquos economy
Ghee Peh Managing Director Metals and Mining Research UBS SECURITIES ASIA
- How Mongolian banks and financial institutions are dealing with the challenges and opportunities
of a fast growing economy Norihiko Kato Chief Executive Officer KHAN BANK
- Update on the Mongolian stock market ndash Impact of the new Securities Law Altai Khangai Chief
Executive Officer MONGOLIAN STOCK EXCHANGE
- From investment banking to trade finance to micro credits to insurance Amartuvshin Hanibal
Managing Director TENGER FINANCIAL GROUP LLC
- Spotlight presentations Showcasing Mongolian investment opportunities Peter Morrow Board
Director ASIA PACIFIC INVESTMENT PARTNERS
- Spotlight presentation Showcasing Mongolian investment opportunities Munkhbat Davaatseren
CEO of Golomt Securities GOLOMT BANK
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources
Batmunkh Batkhuu Chairman SHARYN GOL JSC
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources
Jimmie Wilde Chief Operating Officer BERKH UUL JSC
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources Mona
Forster Executive VP ENTREacuteE GOLD INC
The following two presentations are from the ―ANTI-CORRUPTION LEGISLATIONPOLICY
INTERNATIONAL BEST PRACTICE ON TRANSPARENCY training seminar for businesses in
Ulaanbaatar November 18 2013
-―International business standard on transparency by Jelena Pesic Director PwC
-―Finlandlsquos best practice on transparency and anti corruption by Dr Pekka Hallberg (as it is
worldlsquos number one) Emeritus President of the Supreme Administrative Court of Finland
The following 15 presentations are from the Mongolia Mining Summit Perth Australia October 29-
31 2013
bull Mongolialsquos Minerals Future and Development by Otgochuluu Ch Director General Department of
strategic policy and planning at Ministry of Mining Mongolia at the Mongolian Mining Summit 2013
Perth Australia Oct 29-31 2013
bull Mongolian Economy Investment OpportunitiesChallenges Jim Dwyer Executive Director
Business Council of Mongolia at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31
2013
bull Oyu Tolgoi Lessons from the Gobi Houston Spencer Vice President Communications and Media
Relations Oyu Tolgoi at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Market dynamics for Mongolian coking coal in the Chinese market Graeme Hancock President
and Chief Representative at Anglo American Mongolia at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Speech by Mr Ariunbold Byamba Deputy Director Erdenes MGL LLC at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull Launching Mining Projects in MongoliandashA Major Contractorlsquos Perspective Eric Erdenebat
Tseveendorj Country Manager Orica Limited at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Investing in a dynamic legislative environment Elisabeth Ellis Managing Partner Ulaanbaatar
Minter Ellison at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Sandvik In Pit Crushing amp Conveying (IPCC) Doug Turnbull Principal Mining Engineer Sandvik
Mining Systems at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Ovoot Coking Coal Project David Paull Managing Director Aspire Mining at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull The business of being a third neighbor David Landers General Manager East Asian Growth
Markets at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Nuurst Thermal Coal Project Daniel Rohr Chief Financial Officer Modun Resources Ltd at the
Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Culture matters in building sustainable long-term business relationships Hana Tserenkhand
Byambadash Business Development Consultant AusMon Consulting and Dr Christine Hogan Adjunct
Professor Curtin University Consultant amp Author at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Maximizing Business Benefits from Your IT Investment Brad Skeggs Executive Director COSOL at
the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Presentation by Battsengel Gotov CEO Mongolian Mining Corporation at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull Mongolian Mining Sector Present and Future Developments NAlgaa Executive Director
Mongolian National Mining Association at the Mongolian Mining Summit 2013 Perth Australia Oct
29-31 2013
The ―Mongolia Reports section includes the following
- ―Ministry of Finance of Mongolia 2013 Government Debt Auctions by Bank of Mongolia
- ―Doing Business in Mongolia 2013 Country Commercial Guide for US Companies by US
Embassy
- ―Real Estate Report 2013 by Mongolian Properties
- ―Selected Macroeconomic Indicators November 20 2013 by International Monetary Fund
- ―2013 Second Annual Mongolian CEO Survey from PricewaterhouseCoopers Audit LLC
- ―Selected Macroeconomic Indicators data through October 16 2013 by International Monetary
Fund
- ―IMF Completes 2013 Article IV Mission to Mongolia by International Monetary Fund
The following are added to Interview Section from the Oxford Business Group Mongolia Reports
2013 book
bull B Byambasaikhan Chairman Business Council of Mongolia ―Talk is cheap
bull President Ts Elbegdorj ―Diversifying for growth
bull Jim Dwyer Executive Director Business Council of Mongolia ―Non-mining sectors budding
bull Peter Morrow Chairman American University of Mongolia ―Filling in the blanks
bull N Zoljargal Governor Bank of Mongolia ―Sustainable vision
bull Gansukh Minister of Roads and Transportation ―Accessing new markets
bull J Od President MCS Group ―Building interest
bull B Chuluunbaatar President and CEO of Monnis Group ―Climbing the ranks
bull Cameron McRae President and CEO Oyu Tolgoi ―Sitting on a copper mine
BCMs English website includes the ―Mongolia Business News section where the Open Letter to
Parliament and Government is available for download
BCM continuously posts news stories and analysis of relevance to Mongolia at Mongolian Business
News before they are all put together each week for Fridays weekly NewsWire
The ―Photo Gallery contains photos from the 6th Anniversary BCM Renewal dinner on November
11 2013
BCM Football Cup 2013 pictures are posted to the website - httpbcmongoliaorgenphotos350-
enalbumalbumid=200
The BCM NewsWire will continue to be issued each Friday incorporating items already on the home
page for a consolidated account of the weeklsquos events
SOCIAL NETWORK WITH BCM
BCM LAUNCHES NEW LINKED-IN COMPANY PAGE
The Business Council of Mongolia has launched a new company page on the social networking
website LinkedIn to network its members and followers including small-medium enterprises (SMEs)
The new page will allow BCM to alert followers to the latest news and information critical to their
businesses Memberslsquo businesses will be promoted Additionally BCM plans to deliver monthly
infographics on the latest data as well as videos and other media content as they come The bulk of
the content on the new page will be in Mongolian language to better cater to BCMs Mongolian-
speaking audience and members The following link can direct you to the New BCMs Linked-in page
httpwwwlinkedincomcompanybusiness-council-of-mongoliatrk=company_logo
The Business Council of Mongolia (BCM) has expanded its reach to your favorite social networks
Keep up to date on the latest business deals in Mongolia and how the climate for investment is
improving each day with BCM
Add BCM on Facebook at httpswwwfacebookcomTheBusinessCouncilOfMongolia to read the
latest announcements and comment on events carried in the NewsWire with the community
Hear breaking news and announcements as they happen when you follow BCM on Twitter at
httpstwittercombcmongolia
We have now 2482 fans on our Facebook fans page 1527 connections on LinkedIn network and
835 followers on Twitter
Of course for news information interviews event photos and announcements regarding our
organization visit the official BCM website at httpbcmongoliaorgen
ECONOMIC INDICATORS
INFLATION
Year 2006 60 [source National Statistical Office of Mongolia (NSOM)]
Year 2007 151 [source NSOM]
Year 2008 221 [source NSOM]
Year 2009 42 [source NSOM]
Year 2010 130 [source NSOM]
Year 2011 102 [source NSOM]
November 30 2013 120 [source NSOM]
Year-over-year (y-o-y) nationwide
Note 111 y-o-y Ulaanbaatar city November 30 2013
CENTRAL BANK POLICY LOAN RATE
December 31 2008 975 [source IMF]
March 11 2009 1400 [source IMF]
May 12 2009 1275 [source IMF]
June 12 2009 1150 [source IMF]
September 30 2009 1000 [source IMF]
May 12 2010 1100 [source IMF]
April 28 2011 1150 [source IMF]
August 25 2011 1175 [source IMF]
October 25 2011 1225 [source IMF]
March 19 2012 1275 [source Mongol Bank]
April 18 2012 1325 [source Mongol Bank]
January 25 2013 1250 [source Mongol Bank]
April 8 2013 1150 [source Mongol Bank]
June 25 2013 1050 [source Mongol Bank]
CURRENCY RATES ndash DECEMBER 19 2013
Currency Name Currency Rate
US dollar USD 164138
Euro EUR 224680
Japanese yen JPY 1579
British pound GBP 268874
Hong Kong dollar HKD 21170
Chinese Yuan CNY 27031
Russian Ruble RUB 4981
South Korean won KRW 155
Disclaimer Except for reporting on BCMlsquos activities all information in the BCM NewsWire is
selected from various news sources Opinions are those of the respective news sources
Source Proactive Investors
SOUTHGOBI RESOURCES ANNOUNCES RESTATED FINANCIAL AND OPERATING RESULTS
SouthGobi Resources Ltd released its regular update on restated financial statements and
management discussion and analysis presentation In the consolidated financial statements for the
year ended 31 December 2012 the restated financial position at 31 December 2012 31 December
2011 and 1 January 2011 the results of operations for the years ended 31 December 2012 and 31
December 2011 and the statement of changes in equity and statement of cash flows for the years
ended 31 December 2012 and 31 December 2011
Following the correction in SouthGobilsquos point of revenue recognition revenues from affected coal
sales contracts are recognized in later periods than previously reported and some revenue has been
reported after 31 December 2012 as not all contracted coal has been collected by customers
During the periods from 2010 to 31 December 2012 trade and other receivables have been adjusted
lower and deferred revenue recognized to reflect revenue being recorded in later periods than
previously reported The inventory balance increased over the same period to reflect higher coal
inventory stockpile balances Prepaid expenses also increased with a corresponding decrease in
trade and other payables as coal sales royalty expenses were recognized in late r periods than
previously reported
The consolidated financial statements auditorslsquo reports and related financial information for the
affected periods contained in SouthGobilsquos filings filed prior to 14 November 2013 should no longer
be relied upon The restatements do not result in a change in cash at the end of any period The
statement of cash flows as reported does not change except for the reclassification of various items
within operating activities
Separately on 19 November 2013 SouthGobi paid USD 81 million in cash to the China Investment
Corporation in accordance with the convertible debenture agreement The amount related to the
64 percent per year cash interest payment and is payable semi-annually Further on 21 November
2013 SouthGobi issued 35 million common shares to China Investment
Source SouthGobi Resources Ltd
MSE CANCELS KHANSH INVEST‟S BROKERAGE LICENSES
The Mongolian Stock Exchange has invalidated the brokerage and securities dealing licenses of
Khansh Invest LLC on 4 December
―The companylsquos clients will be transferred to other brokerage firms that conduct professional
services in the market with licenses for broker-dealer related issues and it shall be governed
according to the concerning jurisdiction and regulations said the Source
Source Mongolian Stock Exchange
MNU PARTNERS WITH UNIVERSITY OF CALIFORNIA FOR RENEWABLE ENERGY
Mongolian National University (MNU) and the University of California announced 13 December the
signing of a memorandum of understanding to conduct high temperature solar thermal technology
research in Mongolia in 2014
Under the terms of the agreement the Mongolian Innovation and Technology Centre at MNU will
have a 100-kilowatt high-temperature non-tracking solar array on their campus that is not only the
first and the largest solar array of its kind in Mongolia but anywhere in the world
―We are delighted to be working with the University of California on this great project and we
particularly excited to make this announcement on the 15th Anniversary of MNU said MNU
Founder and Chairman Munkhbat Lkhagvasuren ―The thermal solar array will be installed
monitored and evaluated by our MNU Engineering Department under the advice and instruction of
the faculty of the University of California Munkhbat said
The technology was developed by University of Californialsquos solar director and professor Roland
Winston who is also a world-renowned scientist in the solar research field Winstonlsquos technology is
already operational at the University of California Purdue University and the Gas Institute of
Chicago although it has not yet been released for commercial deployment anywhere in the world
―My goal in working with MNU is to provide the technology and the staff he said ―Ultimately it
is the Mongolian engineering students that will be required to install and operate these systems as
well as determine the scope of the application beyond simply providing a high temperature heat
source
Source Mongolian National University
MCDONALDS INTERNATIONAL CALLS FOR FRANCHISEE TO POSSIBLY OPEN IN MONGOLIA
McDonalds International sent out a press release on December 10 calling for partners to approach
the company to open its first burger outlets in Mongolia
―We have not set a firm date for the development of McDonalds restaurants in Mongolia In the
future we may take steps to open McDonalds restaurants in Mongolia and if we seek a franchisee to
represent us the person will have the following characteristics
―High integrity business experience in the market history of success ability to work well with a
franchisor ability to complete a training program that can take about nine months willingness to
devote full time to the McDonalds restaurant business retail experience knowledge of real estate
market significant capital
The press release ends by inviting candidates to apply for a franchise
Source BNE
JAPANESE ldquoSUN RICE PLANT OPENS IN MONGOLIA
An opening ceremony for Mongolialsquos Technik Import LLC and Japanlsquos Niigata Kubota ―Sun Rice
factory in Ulaanbaatar on December 10
Niigata brown rice will be imported sorted and packed at the Ulaanbaatar factory which has a
daily capacity for the production of two to three tons of packaged rice The plant is equipped with
fully automated machines from Kubota The rice will begin sale in the domestic markets at MNT
5000 to MNT 7000 per kilogram
―Mongolia has been receiving rice from the people of Japan under aid program for many years
said Deputy Minister B Tsogtgerel ―During the latter event I and Ambassador Takenori Shimizu
were discussing that the period of receiving rice as aid is over and now the time of reciprocal
assistance has come and the ―Sun Rice factory is a sample of joint cooperation to produce the
world known quality in Mongolia
Niigata Prefecture is the second largest producer of rice in Japan after Hokkaido
Source Info Mongolia
MNBC MIGRATES TO DVB-T2 WITH THOMSON VIDEO NETWORKS
Video Mongolia Digital Broadcasting (MNBC) has launched Mongolias first ever DVB-T2 service using
head-end systems from Thomson Video Networks
Launched in 2007 MNBC was Mongolias first digital terrestrial TV network operator and will now be
able to broadcast up to 120 digital TV channels over five UHF transponders to maintain its position
and compete with Mongolias national satellite operator Working with systems integrator Digital
Horizon MNBC has deployed TVNs Vibe EM1000 multi-channel SD encoders and NetProcessor 9030
multiplexer and video processor with an embedded DVB-T2 gateway
Source Rapid TV News
CHINESE FIRM NEGOTIATING TO ACQUIRE JUST AGRO
A Chinese company is in negotiations to purchase Mongolias only meat exporter said a company
source
Just Agro LLC which owns 11 meat companies with the Makh Market brand is reportedly the subject
of negotiations for sale to a Chinese entity said the source who asked not to be named The Just
Agro company provides 40 percent of meat processing and 30 percent of storage in Mongolia and is
the only meat exporter in Mongolia
Last July authorities revealed that Just Grouplsquos Sh Batkhuu falsified signatures of the State
Property Committee and Erdenet Mining Cos director to receive USD 131 million in loans from
South Africas Standard Bank putting up the Erdenet Mine as collateral for the credit After Just
Group was dissolved the central bank took over all its assets including Just Agro
Source Unuudur
MONGOL TV EXPOSES MEDIA CORRUPTION WITH FAKE MCDONALDS STORY
An investigative news show on Mongol TV planted a false news story last week with all 9 of
Mongolias major local media outlets about McDonalds opening a branch in the country The
exercise was undertaken to expose corruption and the rampant practice of paid-for journalism in
Mongolia Mongol TV said
The appearance of a Mr P Rank promising McMutton burgers and goat milk-shakes in the
official press release set off no alarms at the media networks which took between USD 150 and
USD 700 from an undercover journalist to run the story on their websites on the front page of three
newspapers and on TV news on three networks including the local public broadcaster
―Soon the first letter our children learn will be Mlsquo Mr P Rank says with a golden shining smile
according to the fake release which also claimed McDonalds was to be sponsored by Mongolialsquos
Health Ministry and sold in schools all over the country
After Mongol TV unveiled the sting it invited representatives of the 9 duped media organizations to
explain their actions though all reportedly declined
Source Hollywood Reporter
EBRD ADOPTS NEW STRATEGY FOR ENERGY AND NATURAL RESOURCES SECTOR
The European Bank for Reconstruction and Development (EBRD) has adopted a new strategy that
will guide its investments in the energy and natural resources sector for the next five years EBRD
press release reported Tuesday
The bank sets out a commitment to helping its countries of operations move toward a sustainable
energy future The EBRD region which stretches from Morocco to Mongolia is faced with a
challenge of providing sustainable secure and affordable energy The energy strategy identifies
energy efficiency as the first and best response to this challenge
―What the EBRD brings to this challenge is our focus on structural reform said EBRD Managing
Director for Energy and Natural Resources Riccardo Puliti ―We have learnt from our work that
when properly channeled market forces can be harnessed to make energy sectors more sustainable
- environmentally economically and politically
The bank intends building on its well-established support for the Extractive Industries Transparency
Initiative by requiring clients operating in the extractive industries sector to disclose subsoil
contracts and licenses as well as all payments they make to local and national authorities
In the case of coal-fired generation the strategy supports the move to lower-carbon fuel sources in
response to the challenge of climate change In alignment with other international financial
institutions the EBRD will not finance any coal-fired power generation projects except in rare and
exceptional circumstances in which there is no feasible alternative energy source
The strategy also reinforces the EBRDs growing support for renewable energy which will include
financing both energy-generating capacity and key infrastructure such as transmission lines and
backup generation
―We have also developed and invested in the first wind farm in Mongolia - where it was also the
first new energy generator in 30 years said Puliti
Source Trend News Agency
SUSTAINABILITY HOSTS SESA WORKSHOP
Sustainability East Asia LLC organized a National Validation Workshop on 10 December as part of its
responsibilities for establishing a strategic environment and social assessment (SESA)
Participants from across the country arrived to represent government the private sector and non-
government organizations to discuss the proposed SESA The next step will be to assess mining
growth options and identify at least three likely growth scenarios which mining could bring to
Mongolia Afterward the SESA team will evaluate the environmental and social issues that are likely
to arise as a consequence of each scenario
The Mining Sector Institutional Strengthening Technical Assistance Project commissioned
Sustainability to conduct a strategic environmental and social assessment for Mongolias mining
sector
Sustainability will also perform a gap analysis of the legal regulatory and institutional capacity to
deal with each possible scenario An action plan is expected for SESA by summer 2014
Source Sustainability East Asia LLC
UB REGISTERS MATERNITY HOSPITAL NO 1
The new building annex for Maternity Hospital No 1 was registered as capital city property
13 December at a regular session of the Ulaanbaatar Citizens Council This maternity hospital
building was built with financing from Boroo Gold and was presented as a gift to the people of
Mongolia With a capacity to receive 150 mothers and children its total cost was MNT 92 billion It
includes the hospital building of 1169 square meters external heating clean water and sewer
water pipelines a diesel station an asphalt road a pedestrian walkway outdoor vegetation and an
external LED sign
This new building was commissioned 15 June The new annex has one vacuum operation room and
two standard operating rooms on the fifth floor 100 beds for women and 50 beds for infants on the
third and fourth floors paraclinical and sanitation units a pharmacy a conference room and
training rooms on the second floor an ambulatory section and reception on the first floor and staff
cafeteria closets washrooms and a disinfection chamber in the basement
Source Centerra Gold Inc Newsmn
RIO TINTO‟S SAM WALSH DIGS IN FOR THE LONG HAUL
Sam Walsh wants to remain as Rio Tinto PLClsquos chief executive beyond the end of his contract and
has told the minerlsquos board he will not be ready to retire in 2015
―I am there if they want me said Walsh ―Likewise if therelsquos someone else who can come in and
take what Ilsquove done to the next level thatlsquos fine too
The Australian 63 later this month replaced Tom Albanese 11 months ago after Rio decried
―unacceptable writedowns on its coal business in Mozambique Walsh says investors support his
strategy to cut costs and sell non-core assets
Walsh said he has explored selling all of Riolsquos aluminum business this year in what would be a
signature reversal of Albaneselsquos costly purchase of Alcan in 2007 But he says no offers have been
good enough while the business is not generating enough cash for an initial public share offering or
spin-off to Riolsquos shareholders Walsh has also been frustrated in attempts to sell Riolsquos diamonds
business
―Who would thank me if I sold something under value just to get a tick At the end of the day you
have to be pragmatic about things he said Offers ―werenlsquot in the bailiwick of where we thought
they should be
The Alcan deal epitomized Riolsquos poor recent dealmaking and Walsh admits the company had
―relaxed some of the controls it should have had Rio staff has now ―refound their mojo he said
On operating costs which Rio has said it will cut USD 3 billion next year he said ―There is rolling
momentum and thatlsquos important
Source Financial Times
KYRGYZSTAN FILES ECOLOGY DAMAGE LAWSUIT AGAINST CENTERRA
Kyrgyzstan is suing Canadas Centerra Gold Inc for 15 billion soms (USD 304 million) over what the
government says is ecological damage marking a new twist in a bitter row with the investor running
the largest Kyrgyz gold mine
The state environmental protection and forestry agency said in a statement that it had filed the
lawsuit at an economic court in the Kyrgyz capital Bishkek saying Centerra Gold had ignored its
earlier request for voluntary compensation It said the alleged ecological damage included
emissions of pollutants and waste dumps It said its claim referred to the companys operations
between 1996 and 2011
Centerra had said earlier that it viewed the governments claim as exaggerated and unfounded
The company disagrees with these charges and plans to give explanations on this matter in the
nearest time said a spokesman for the Kumtor Operating Company (KOC) the Centerra subsidiary
that runs the Kumtor mine in the Tien Shan mountains
The Toronto-listed miner which also owns the Boroo gold mine in Mongolia is already under
pressure from the Kyrgyz parliament which demands the state hold 67 percent in a proposed joint
venture to run the mine In September the government and Centerra Gold signed a memorandum
of understanding paving the way for Kyrgyzstan to swap its 327 percent stake in the Canadian firm
for 50 percent in a venture that would own Kumtor But in October the legislature voted to tear up
the document and seek control over the planned venture It gave the cabinet until 23 December to
report on its talks with Centerra Gold on setting up the venture Pearson said Centerra is having
constructive dialogue with the Kyrgyz government
Source Reuters
ECONOMY
FITCH AFFIRMS TWO MONGOLIAN BANKS AT B REVISES OUTLOOKS TO bdquoNEGATIVE‟
Fitch Ratings on 16 December revised the outlook on the Long-Term Issuer Default Ratings (IDRs) of
Khan Bank LLC and XacBank LLC to ―Negative from ―Stable At the same time the agency
affirmed the two Mongolian banks IDRs and viability ratings at B and b
The revision of the outlooks on both banks IDRs reflects weakening operating conditions as
indicated by the change in the Outlook for the Mongolian sovereign (B+) to Negative from Stable on
13 December The sovereigns outlook was revised due to mounting risks to the countrys economic
and financial stability Ratings on the two banks could be downgraded if pressures on asset quality
and liquidity intensify Persistent local-currency depreciation would reduce borrowers repayment
capacity and could lead to accelerated deposit withdrawals given the countrys high level of
dollarization
The banks ratings also remain sensitive to the withdrawal of credit stimulus as this could result in
asset deterioration on slowing economic growth or higher inflation Further decline in the
governments international reserves could also trigger a negative rating action as the banks
currency-related risk is counterbalanced by the authorities swap facility and unlimited foreign-
currency conversion Both banks ratings are also sensitive to any changes in their steady access to
capital from private-sector owners
Khan Banks Support Rating and Support Rating Floor (SRF) reflect Fitchs view that as the largest
bank in Mongolia it would be likely to receive state support in case of need However the
Mongolian sovereigns ability to provide timely support to the banking system remains limited as
underlined by its IDR of B+ A downgrade of the sovereign ratings would point to weakening in the
Mongolian governments ability to provide timely support to the banking system which put negative
rating pressure on Khan Banks SR and SRF In contrast Fitch expects XacBanks SR and SRF of 5B-
to be maintained even if the sovereigns rating is downgraded to B This is because the current SR
and SRF already reflect the agencys view that support from the sovereign in case of need cannot
be relied upon
The rating actions are as follows Khan Bank Long-Term Foreign-Currency IDR affirmed at B
Outlook revised to Negative from Stable Short-Term Foreign-Currency IDR affirmed at B Long-
Term Local-Currency IDR affirmed at B Outlook revised to Negative from Stable Viability Rating
affirmed at b Support Rating affirmed at 4 Support Rating Floor affirmed at B XacBank Long-
Term Foreign-Currency IDR affirmed at B Outlook revised to Negative from Stable Short-Term
Foreign-Currency IDR affirmed at B Long-Term Local-Currency IDR affirmed at B Outlook revised
to Negative from Stable Viability Rating affirmed at b Support Rating affirmed at 5 Support
Rating Floor affirmed at B-
Source Fitch Ratings
MONGOLIA SCORE FALLS ON POLITICAL RISKS INDEX FOR MINING INVESTMENT
An annual survey by Behre Dolbear of political risks saw Mongolia decline 5 points in an index
ranking Mongolia 19th out of 25 countries
Mongolia this year received a score of 269 compared with 32 last year Leading the countries
surveyed was Australia down 07 points from last year Russia with a total score of 171 compared
with 16 last year was the lowest ranking
The 25 countries considered in this yearlsquos survey are ranked based on seven criteria
-the countrylsquos economic system
-the countrylsquos political system
-the degree of social issues affecting mining in the country
-delays in receiving permits due to bureaucratic and other issues
-the degree of corruption prevalent in the country
-the stability of the countrylsquos currency and
-the competitiveness of the countrylsquos tax policy
Each criterion is rated on a qualitative scale from one (worst) to 10 (best) that reflects conditions
that promote investment growth in the mining sector The maximum score attainable for a country
is 70 points
Source Behre Dolbear Group
MONGOLIA LOOKS FOR SECOND CHANCE WITH FOREIGN INVESTORS
Saruul Ganbaatar the deputy head of Mongolias stock exchange hopes the countrys days of
interventionist economic policies are over and new laws ensuring foreign investors access to the
frontier markets industries will bring back sorely needed cash
Ganbaatar 32 who cut his investment teeth in Chicagos financial houses after graduating from
Loyola University is careful not to over-promise on what the stock market can deliver in 2014 and
beyond in terms of new listings or overall growth In October a law was passed easing ownership
restrictions for private companies to invest in the strategic industries A Securities Markets Law
coming into effect 1 January 2014 is expected to provide the key ingredient to attract deep
pocketed institutional investors such as mutual funds to invest
This really is the missing ingredient said Ganbaatar who has been traveling the globe promoting
the changes in the laws to global investors for the past two weeks
The stock index fell 19 percent in 2012 and year-to-date is down 115 percent although it did start
to climb with the newly passed laws On 1 January the new Securities Markets Law will allow
Mongolias commercial banks to offer custodial banking services Custodial banks serve as safeguards
for a firm or individuals financial assets playing a critical role in the final settlement of market
transactions Total market capitalization now is between USD 900 million and USD 1 billion Dont
expect the number of new listings to mushroom There may instead be a cull of companies Fifty-
five to 60 of them many of which have not traded in years are being reviewed for potential
delisting
The Mongolian Stock Exchange 100 percent state-owned is perhaps itself a candidate for
privatization It has been in a strategic partnership with the London Stock Exchange for two and a
half years
They have the right of first refusal he said
Source Reuters
CPI INCREASES TO 12 PERCENT YEAR-OVER-YEAR IN NOVEMBER
The National Statistical Office reported a 12 percent increase in the national consumer price index
(CPI) in November year-over-year
The CPI growth which also in November grew 13 percent from the previous month was explained
by a 14 percent increase in food prices and non-alcoholic beverages 23 percent for clothing
footwear and fabrics and 07 percent for housing water electricity and fuels
Source Info Mongolia
GROWTH SEEN IN EXPORT OF PRECIOUS METALS
The export value of precious metals grew 114 percent in November from the month before and 63
percent from the same period in 2012 according to the National Statistical Office
Exports totaled USD 38 billion in the year to December while imports grew to USD 58 billion The
foreign trade balance saw a deficit of USD 2 billion November saw exports of USD 381 million and
imports of USD 514 million with exports and imports in decline between July and November The
value of export products for the first 11 months was USD 11 billion Despite the gain in precious
metal exports exported minerals which represented 81 percent of all exports in the year to
November fell 129 percent from the year before
Source Zuunii Medee
MNT 788 BILLION WILL BE ENTERED INTO THE STABILIZATION FUND
The Stabilization Fund is set to collect MNT 49 billion this year and MNT 298 billion next
The Stabilization Fund was established to collect surplus revenue in years of economic gains from
the mining sector to cushion possible annual losses during economic downturns and weak
commodity demand Any gain in the price for gold and coal next year will also be reflected in
allotments to the fund
Source Zuunii Medee
ECONOMIC DEVELOPMENT MINISTRY PLANS TO PUT 81 OF BUDGET INTO CONSTRUCTION
The Economic Development Ministry plans to invest MNT 814 percent of its total investment budget
into construction
Beginning 1 January 2014 the ministry will provide MNT 9303 in loans toward the construction
sector The ministry will spend 39 percent of its budget for reconstruction and repair 10 percent
for the purchase of new techniques and technical equipment 3996 percent for infrastructure
2743 percent for education and health 636 percent for employment and agriculture and 2926
percent for other sectors of the economy
Projects include the construction of 30 clinics 27 cultural centers 6831 km of paved roads and
1032 m length of bridges Mongolia has received USD 55 billion in aid in the last two decades of
which 55 percent was in the form of low rate loans and 45 percent as non-repayable grants for
investments into agriculture infrastructure power and health sectors
Economic growth since 2011 has allowed Mongolia less aid than in the past The government has
now turned its focus on providing funding with concession agreements to large scale projects such
as the Nariin Sukhait-Shivee paved road and the power station at Mogoin gol Other projects include
Power Plant No 5 the Altanbulag-Ulaanbaatar-Zamyn Uud highway the Tavan Tolgoi- Khanbogd-
Khangi road and the Tuul Songino water reservoir complex
Source Zuunii Medee
TT POWER PLANT MAY NEED CONCLUSION TO OT DISPUTE SAYS DIRECTOR
Uninterrupted development of the Tavan Tolgoi power plant will ride on the outcome of disputes
concerning Oyu Tolgois underground mine said the director of the plant
―One of the main risks is the issue of a main user Enkhsaikhan said ―The key buyer of the power
from the TT Power Plant is OT Due to the uncertainty over phase twolsquo and unresolved matters
with the government of Mongolia OT is not regarded as a reliable buyer on a stand-alone basis
He added that the power company may request a guarantee from Oyu Tolgoi
A consortium that includes Koreas Posco Energy and Daewoo Engineering and Construction GDF
Suez Energy Asia Japans Marubeni Corp and Kansai Electric Power in March was selected for
development of the plant which has a preliminary estimate cost of USD 1 billion Those expenses
include installation of 150 kilometers of electric lines between Tavan Tolgoi and Oyu Tolgoi The
consortium will be expected to raise 30 percent of the cost itself while the remaining 70 percent
will come from bank loans However the uncertainty surrounding the Oyu Tolgoi copper mine could
create more hold ups
Source Zuunii Medee
CABINET TO CONCLUDE CONCESSION ON ALTANBULAG-ZAMYN UUD HIGHWAY
The Cabinet of Ministers ordered ministers to conclude a concession agreement for the Altanbulag-
Ulaanbaatar-Zamyn-Uud highway
The government is planning to establish the concession contract with the Chinggis Land
Development Group which according to the agreement shall have exclusive rights to construction
ownership and transfer of property using its own financing The concessionaire shall complete the
construction within three years after that shall operate the facility for another 30 years before
transferring the ownership to the Government
If Chinggis Land accepts these terms it would be responsible for developing a feasibility study and
blueprint of the project to be approved by the relevant ministries before concluding a financing
agreement The concession agreement will come into effect after the Chinggis Land Development
Group obtains a financing agreement for USD 1 billion from a commercial bank of Mongolia
The government will be responsible for freeing up the land where the highway is planned while the
Chinggis Land would cover the costs for doing so
Source Montsame
MNT 116 BILLION WILL BE SPENT FOR BUILDING EMERGENCY ALARMS IN UB
The National Emergency Management Agency has installed an emergency alarm system in 60
locations of Ulaanbaatar The alarm will alert citizens to natural disasters such as earthquakes
The alarms will be controlled from a center by microwave radios and satellite communication
devices
Source Udriin Sonin
EIU CLARIFIES EXTENT OF OFFICIAL ESTIMATES OF OIL SHALE RESERVES
The latest research from Mongolias mining ministry gives a clearer picture of oil shales
development potential in the coming years Although Mongolia has long been known to have
substantial oil shale deposits previous estimates were extrapolated from rudimentary surveys
conducted in the 1990s and thus left the actual reserves open to speculation
Plans to develop the industry took shape only in April 2013 when an American company Genie
Energy signed a five-year deal with the Petroleum Authority of Mongolia to explore oil shale
reserves in central Mongolia Genie also plans to build a USD 4 billion processing factory in Tuv
Aimag According to government projections the processing plant will generate USD 850 million of
tax revenue annually Aside from the economic benefits of the project domestic fuel sources could
help Mongolia to improve its energy security by loosening the countrys dependence on its powerful
neighbors At present 90 percent of Mongolias oil and related products come from Russia with most
of the remaining amount being imported from China
Yet the benefits of large-scale oil shale extraction are not as clear as they might seem at first
glance Most importantly Mongolias oil shale resources should not be confused with the shale oil
phenomenon that is currently sweeping the United States Oil shale (also called kerogen) is more
expensive to extract than shale oil and carries greater environmental costs In particular oil shale
requires a large amount of water to process which could be a risky proposition in Mongolia where
hydrological resources are already under strain Although other countriesmdashEstonia in particularmdashuse
oil shale as a substitute for coal extracting liquid fuel from the shale is a complex and relatively
untested process
Genie Energys progress on the project seems more substantial than that of comparable coal
liquefaction projects that have faltered in the region However environmental technical and
political limitations suggest that Mongolias overall dependence on foreign fuel will not change
significantly in the foreseeable future
―We remain doubtful that oil shale will play a significant role in Mongolia in the next two years so
our economic growth and trade forecasts will remain unchanged said the Source
Source Economist Intelligence Unit
MONGOLIA AND THE THREAT OF THE RESOURCE CURSE
Mongolia is at a crossroads while investors complain the government is dragging its feet on allowing
miners to start digging it is crucial that it get things right at the early stages of the resources
boom
Mongolias challenge will soon be the worlds says Richard Dobbs and his team at McKinsey in a
report predicting a USD 17 trillion investment bonanza by 2030 to keep up with demand for oil gas
and other materials In 1995 about 58 countries depended on resources for the bulk of their output
and wealth In 2011 that number had risen to 81 By 2030 roughly half of the worlds economies
will essentially become giant filling stations for developing superpowers from China to South Africa
That means that instead of the world moving toward greater transparency democracy and freer
markets we could see rising corruption levels and even greater income inequality
Economies with natural-resource endowments have a huge opportunity to transform their
prospects but history suggests that they could all too easily squander the windfall says Dobbs
director of the McKinsey Global Institute in London
The world would be wise to take steps today to break this cycle McKinsey recommends several
While not terribly original they include strengthening public institutions and good governance
building decent infrastructure boosting national competitiveness promoting sound fiscal policy
making and spending the windfall wisely while engaging in forward-looking economic and social
planning The trouble is that political will and integrity is often the first casualty once the minerals
start flowing out and the spoils come pouring in
Mongolia is at that very crossroads today Investors complain the government is dragging its feet on
allowing miners to start digging But its more important to get things right at the early stages of
the resources boom That means acting now to create the institutions and regulatory frameworks
needed to ensure revenue transparencymdashknowing exactly how much money is being dug out the
ground and where its going Why not set up a sovereign-wealth fund to save for Mongolias future
When the stakes are that high a little patience can go a long way
Source Bloomberg
MONGOLIAS NOMADS WARM TO SOLAR POWER
In Mongolia often known as the land of the blue skies the sun shines for 250 days on average each
year It beats down on the sparse plains and on the Gobi desert that spans the countrys southern
border with China
It shines even during the frigid winter days on the hundreds of thousands of nomads who still roam
the steppes herding animals and living in dome-like tents calling gers About 800000 of Mongolias
28 million inhabitants still live the traditional nomadic lifestyle that has remained largely
unchanged for generations Apart from the addition of motorbikes the occasional petrol generator
and a passing trade from intrepid tourists wanting to stay in a ger for the night life is almost the
same as that of many nomads grandparents and great-grandparents Almost but not exactly
Dotted across the steppes glints of light can be seen as the sun bounces off the solar panels that
have been installed on the sides of gers made of felt and yaks wool At the start of this millennium
Mongolias herders and nomads had little or no access to modern electric power and its potential
benefits But as of 2013 thanks to a concerted push by the Mongolian government almost 70
percent of nomadic people have access to electricity Bor a herder who mainly travels around
western Mongolias Arkhangai province is one of the people whose family benefits from portable
solar home systems (SHS)
We use it for generating the power for lighting in the ger charging phones we can also generate a
fridge to keep food longer and we can run a television That is very useful for us because we can
get the most recent weather forecast which is important for our work and keeping our animals
safe Before we had power it was very difficult Now it is almost like living in the city
The ability to charge mobile phones is also important for the herders who often have children
staying at boarding schools Access to electricity also allows families to contact emergency health-
care and doctors for advice without having to make the often arduous journey to the nearest village
or town
The solar systems were distributed and installed with the help of the World Bank after the
Mongolian governments National 100000 Solar Ger Electrification Program ran into difficulties A
World Bank report Capturing the Sun in the Land of the Blue Sky describes the difficulties faced by
the Mongolian government on its ambitious project
By 2005 five years into the plan 30000 families had been kitted out with an SHS but then the
program began to stagnateThe government of Mongolia recognized that considerably more effort
was necessary not only to keep the program on track but to scale-up implementation in order to
achieve the National 100000 Solar Ger Electrification Program target the report said In 2006 the
World Bank agreed to cover half of the initial outlay costs for each family as well as after-sales
maintenance with 50 centers set up across the country including at least one in each of its 21
provinces so that the herders would not have to travel to Ulaanbaatar every time the solar panels
needed maintenance
The SHS project also offers environmental benefits to a country where the ratio of carbon dioxide
emissions to economic output is ten times higher than the world average because of the increase in
mining over the past decade as the true extent of Mongolias mineral wealth became apparent The
solar systems are slowly replacing the diesel generators used by some nomads as a means of
generating power although they are still using stoves for heating burning wood coal and dung
throughout the year
Source Al Jazeera
IRON-ORE AND COAL PRICES GO SEPARATE WAYS
Prices of the key ingredients in steel productionmdashiron ore and coking coalmdashare moving along sharply
different paths as mining companies resist cutting coal output despite the market being awash with
the raw material
While iron-ore prices have risen 22 percent since May coking coal is still searching for a rebound
Coking-coal prices are off more than 4 percent over the same period China is on course for another
year of record steel production with supply directed to the construction of high-rise apartment
buildings the manufacture of luxury cars and other uses
There is simply too much coal on the market the International Energy Agency said in a report this
week
Shipments of steelmaking coal from Australiamdashthe worlds biggest exporter of the commoditymdashare
forecast by the government to rise to 178 million tons in 2015 from 145 million tons last year Most
goes to China which accounts for 60 percent of global demand In contrast global iron-ore
exporters are struggling to increase output in areas other than Australias remote Pilbara region
supporting prices of that commodity The spot price of iron ore climbed to nearly USD 140 a ton
earlier this month a four-month high Prices have since eased a bit to USD 13430 a ton but
remain well above the consensus forecasts of analysts at the start of this year
Coal miners could scale back production but that isnt always easy to do In Australia many miners
are locked into so-called take or pay contracts with rail and port operators Many analysts dont
expect coking-coal prices to rebound for at least another 12 months RBC Capital Markets expects
coking-coal prices to average USD 154 a ton in 2014 down from USD 159 a ton forecast for this
year Instead they see more chance that iron-ore prices will come down more sharply RBC predicts
an 11 percent fall in iron-ore prices next year as new supply from Anglo Americans Minas Rio
project and mines owned by Fortescue Metals Group Ltd is added to the market UBS is even more
bearish predicting iron ore will fall below USD100 in the second half of 2014
Source Wall Street Journal
ARE COMMODITIES TRADERS bdquoTOO BIG TO FAIL‟
When the banking industrylsquos top lobby group commissioned a report by on commodity trading
houses the idea was to show trading houses like Glencore Xstrata Vitol or Cargill were ―too big to
fail and therefore needed to be regulated in a similar manner to the banks
But instead of highlighting the inherent issues surrounding the industry the report found trading
companies posed less systemic risk than the big banks As a result the Global Financial Markets
Association which commissioned the report decided not to finalize or publish it (The GFMA claims
that it often commissions reports which are shared with regulators and other interested parties but
never published) But the debate hasnlsquot ended
A separate report published in July by the Centre for European Policy Studies a think-tank argued
the growth of commodity trading houses which underpin the global trade in raw materials could
―have systemic implications Commodities trader Trafigura has become the latest to wade into the
debate In its recent prospectus for a EUR 500 million bond issue the worldlsquos second largest metals
trader and third biggest oil trader addresses the GFMA report as well as the issue of systemic risk
Making some tart observations the trading house says the GFMA paper was aimed squarely at the
Financial Stability Board a group of global regulators
―[The report] was widely seen as a tactic by some banks active in the commodity trading space as a
way of creating more equality between market participants by seeking to usher in further
restrictions on pure commodity trading companies the prospectus says
Commodity traders are facing the need to be more open about their operations and lift the veil of
secrecy Indeed the author of the GFMA reportmdashCraig Pirrong a widely respected academicmdashis
working on a white paper on commodities traders Commissioned by Trafigura it will look at what
commodities trading houses activities and the recent trend to accumulate more assets risk
management as well as looking at different types of commodity companies
Source Financial Times
SMOG DARKENS SHANGHAIS PROSPECTS FOR BECOMING A GLOBAL FINANCIAL CENTER
In the debate over which matters more in China money or quality of life the quality-of-life side
may have found the ultimate argument If you cant breathe nothing else really matters And itlsquos a
debate Mongolia has to have as it makes its own steps towards industrial and economic growth
Chinas pollution problem is spreading and growing worse a fact on stark display last week in
Shanghai the countrys financial center A stretch of filthy-air days in that coastal city so
thoroughly shocked residentsmdashwho had largely escaped the smog that has long plagued the likes of
Beijing and Harbinmdashthat it inspired fresh talk about getting away from China Lawrence Shu a
Shanghai-based partner at Hylands Law Firm said he and his friends are thinking more seriously
about moving abroad
The smog had a big impact because it feels really bad if you cant breathe freely he said
The environment used to take a back seat among the Chinese But as they get richer they are
traveling abroad more making the pollution back home more obvious The Internet also
contributes Blue-sky pictures posted on social networks by Chinese travelers abroad constantly
remind folks of what is lacking at home and Chinese now use various apps to track air-quality data
If Shanghais smog discourages smart financial professionals from wanting to live there that will
hinder Chinas effort to create a global financial center If businesses such as financial companies
and luxury-goods makers perceive that Chinas elites are spending more time outside their home
country they will be less willing to invest in China
Most rich Chinese havent packed their bags and left yet but they are keeping their options open
Relocation is a big decision said Anne Wang who works in the financial industry in Shanghai But
just in case she recently received a US visa that would allow her to live there
Source Wall Street Journal
POLITICS
MINERALS POLICY ENTERS FINAL DISCUSSIONS
The government published a final draft of Mongolialsquos State Policy on the Minerals Sector for 2013
through 2025
The document was first presented to Parliament in July and is now entering final discussions during
the autumn plenary session of Parliament following a 42 percent drop of foreign investment and 23
percent fall in the currency year-on-year
―We have reviewed the proposed State Policy on the Mineral Sector which we feel will be a
positive step forward if passed said the Source ―The passing of this policy will result in more
transparency and an increasing participation from foreign investors That said it will take time for
these feats to be accomplished Investors will be weary of Government promises as they seek
longevity to prove Government intentions
The proposed policy is divided into four main sections rationale principles main policy and
implementation-results The major points stressed in the policy include transparency and
responsible mining The law sends the message that growth is going to be driven by private sector
participation and the intent to provide a stable investment environment technological innovation
and value-added activities
Key priorities of the law since it was first unveiled include stability of taxation and the legal
environment an end to any discrimination between foreign and national investors and the
preservation of strategic resources and deposits
This most recent version saw the inclusion of a new section supporting development of local areas
and the interests of local citizens Other key elements include explorationmdashwhich would see
greater government regulation for strategic mineral deposits while cutting down bureaucracy and
conducting scientific researchmdashproduction support and local support The new document also
highlights greater support for non-governmental organizations for the environment allowing them
to claim damages from mining operations the establishment of funds to support economic
diversification environmental protections and land rehabilitation
The new draft has removed the risk assessment section and replaced it with a section on
implementation This includes the improvement of the legal environment and producing of relevant
regulations programs and projects for 2013 to 2015 followed by the implementation of programs
and projects from 2014 to 2025 and finally the provision of conclusions on midterm policy
implementation and further planning for up to 2020 and 2025
―We believe that this policy will take us one step closer to attracting investors and supporting
private sector development in Mongolia said the Source ―Despite current investor hesitation this
state policy in addition to the new amended Minerals Law set to pass next year will further
encourage investors to enter the market and will build support for the junior mining community
Source Mongolian Investment Banking Group
PARLIAMENT UNANIMOUSLY BACKS ldquoSMART GOVERNMENTrdquo INITIATIVE
Parliament has unanimously backed President Tsakhia Elbegdorjs ―From Big Government to Smart
Government initiative for government reform concepts having signed a joint statement of support
on 13 December
The joint statement gives full support to the presidents initiative and commits to cooperation for
its undertaking This includes support for enhancing government systems and policies in line with
democracy and a market economy improving the capacities of public services and curtailing
government intervention into private business affairs Also included are protections to private
business including establishing government structures for rule of law support to domestic
industries and honoring contracts The fight against corruption is another main perogative
On 16 November 16 the Office of the President of Mongolia organized a national consultative
meeting on this topic at the Government Palace Elbegdorj next met with members of the
Parliament on 9 December to organize an open dialogue with representatives of Parliament for an
appeal for them to sign the joint statement Reaffirming the commitment of the Mongolian
lawmakers to a breakthrough reform of the Government the leaders of party floors and factions in
the Parliament and independent members of the Parliament signed the document for the reform on
December 13 2013
Source Montsame
GOVERNMENT CALLS TO END PRACTICE OF APPOINTING MPS AS MINISTERS
The coalition government has thrown their support behind President Tsakhia Elbegdorjs proposal to
prohibit Parliament members from serving as cabinet ministers
Democratic Party members discussed a draft resolution and proposed amendments submitted by the
president for the new restriction at a party meeting on Monday The draft amendments were
unanimously backed by the faction The Justice Coalition which includes the Monglian Peoples
Revolutionary Party and Mongolian Democratic Party came to the same conclusion following its own
meeting said coalition head N Battsereg on Monday
Source Montsame
COMMITTEE LEADERS TO BE ELECTED THIS MONTH
The coalition government will soon be electing officials to lead the various committees in
government
Parliament has 8 standing committees to elect leaders to this month with each committee to be
led by a representative of the coalition government Current committee heads are Ts Tsolmon at
the Security and Foreign Policy Committee G Bayarsaikhan at the Environment Food and
Agriculture Committee Z Bayanselenge at the Social Policy Education Culture and Science
Committee R Burmaa at the Petition and Requests Committee A Bakei at the State Structural
Committee Ts Davaasuren at the Budget Committee Sh Tuvdendorj at the Legislation
Committee and B Garamgaibaatar at the Economic Committee
Source Zuunii Medee
FOREIGN CURRENCY PAYMENTS BANNED FOR MININGEXPLORATION LICENSING FEES
The Ministry of Finance has banned the use of foreign currencies to pay for mining and exploration
licensing fees to the Mineral Resources Authority beginning 1 January 2014
The Ministry of Finance has prompted these entities and companies holding licenses to comply with
Mongolian currency law that states that all businesses and agencies must do business in Mongolian
tugrug According to the 2009 law transactions must not be carried out in foreign denominated or
foreign currency based rates
Source Newsmn
MINING MINISTRY TO COOPERATE WITH ASSOCIATION OF FLUORSPAR EXPLORERS
The Ministry of Mining Wednesday established a memorandum of mutual understanding with the
Association of Fluorspar Explorers (AFE) to cooperate in augmenting the countrylsquos export
In addition to expanding export goals include developing transparent and responsible mining
improving qualities and standards of fluorspar metallurgy and flotation concentrate and in
increasing the production output of the minerallsquos ore enrichment The hope is the memorandum
will create a launching point for a national program for fluorspar its exploitation increase the
volume of production by intensifying research and increase competitiveness in international
markets It will also be necessary to introduce the latest technology to the country along with
running joint trainings with foreign NGOs the Ministry said
Source Montsame
DP REJECTS AMARJARGAL‟S RESIGNATION
Parliament voted against MP R Amarjargallsquos resignation request on 12 December
During Tuesdaylsquos meeting the majority of the Standing Committee on State Structure voted against
Amarjargal`s resignation The head of the Democratic Party (DP) caucus D Erdenebat took a
strong stance against letting Amarjargal leave
Amarjargal said he wanted to resign to take responsibility on behalf of his party members for the
current political situation and economic restraints in Mongolia DP members agree with his
conclusion but encourage him to make the effort and participate for social change and
development Members of the opposition Mongolian Peoplelsquos Party members said that Amarjargal
could see the problems and nature of the majority of Parliament and praised his plan to resign
Source Newsmn
MPP HEAD TO STEP DOWN
Mongolian People Party (MPP) Head N Enkhbold has requested his resignation as party leader
MPP Deputy Head D Oyunkhorol said 9 December that Enkhbold submitted his request to step down
during a party meeting Oyunkhorol said Enkhboldlsquos resignation was due to personal reasons The
new party head will be appointed by the MPPs governing board
Source Udriin Sonin
FIFTH ROUND OF NEGOTIATIONS FOR THE JAPAN-MONGOLIA ECONOMIC PARTNERSHIP
AGREEMENT
The fifth round of the negotiations for the Japan-Mongolia Economic Partnership Agreement (EPA)
will be held from 16 to 19 December in Ulaanbaatar
The Japanese delegation will be led by Jun Yokota ambassador in charge of economic diplomacy
and the Mongolian delegation will be led by Ochirbat Chuluunbat vice minister for economic
development Experts from relevant ministries and agencies of both sides will participate in the
meetings
In this round negotiations are in areas including trade in goods and investment
Source 4-Traderscom
FIRST MONGOLIA-CHINA JOINT BORDER COMMISSION MEETING IN BEIJING
The very first meeting of Mongolia-China joint commission of borders took place 11 and 12
December in Beijing China
This meeting was co-chaired by T Togsbilguun a director of the Department of Neighbour
Countries of Mongolialsquos Ministry of Foreign Affairs and by Xiao Jiangguo a representative of border
checkpoint and seaport affairs Both sides shared on ideas for implementation of the
intergovernmental contract on the border regime and reached some agreements on conducting a
joint examination in the border signs and on activating the collaboration in law enforcement around
frontier areas After this they discussed issues of developing border checkpoints at a same level
putting some border checkpoints into a permanent regime giving an international status to four
checkpoints
The gathered also made a protocol on their meeting and inked its results The next meeting will run
in 2014 in Ulaanbaatar
Source Montsame
BELARUS TO OPEN EMBASSY IN MONGOLIA IN 2014
Belarus will open its embassy in Mongolia in 2014 reads a resolution from the Belarus Council of
Ministers of the Republic of Belarus from 12 December 2013 Belaruslsquo Finance Ministry will finance
the costs of opening and maintaining Belarusian Embassy in Mongolia from the funds set aside in its
national budget for the opening and maintenance of diplomatic missions and consular missions of
the Republic of Belarus abroad
Source Belarusian Telegraph Agency
HOWELL NEW JERSEY USA BECOMES SISTER CITY OF SUKHBAATAR DISTRICT
The Howell Township and the Sukhbaatar district in Mongolia signed a memorandum of
understanding to create sister citieslsquo between Howell New Jersey USA and the Sukhbaatar District
on Tuesday
The program was aimed at opening up talks on how each can benefit from one another Mayor
William Gatto said Howell Township is a very diverse city and theyve taken the relationship with
the Kalmyk community here in Howell and expanded it to a country where they have had no
relationship in the past he said
The sister citieslsquo program will allow both Mongolia and Howell to exchange ideas and come up
with new and better ways to do things that benefits both cultures Outside of Mongolia Howell has
the largest population of Kalmyks in the world with many living in the Freewood Acres section of
the township Gatto said
Some of the goals of the agreement include promoting a common prosperity and development for
both parties an electronic pen-pal program and education opportunities for exchange students
Through a translator Baljinnyam Gan-erdene of the Citizens Representatives Council of Sukhbaatar
District said he came to Howell to see how democracy works in the United States
Im really glad and hope that this unforgettable and successful visit opens the door to our
friendship and prosperity between our residents Gan-erdene said
Gatto gave Gan-erdene a Howell flag and a throw blanket created by the Historical Society
depicting the history of the township Gan-erdene also gave Gatto several items including a bronze
piece of art
Source NJcom
MONGOLIAN CALLIGRAPHY ADDED TO UNESCO CULTURAL HERITAGE LIST
State Parties at the 8th Session of the Intergovernmental Committee for the Safeguarding of the
Intangible Cultural Heritage in Azerbaijan unanimously agreed to register Mongolian calligraphy as
an intangible cultural heritage in need of urgent safeguarding on 2 December
―Mongolian heritage calligraphy is now being recognized by the world and I am grateful on behalf
of my country for decision makers said Secretary-General of Mongolian National Commission for
UNESCO Gundegmaa Jargalsaikhan He noted that Mongolian calligraphy was the fifth cultural
heritage item of Mongolia to be listed and now stands among the Mongolian epic traditional folk
dance the traditional music Tsuur and a circular breathing technique
Mongolian calligraphy is a 1000-year-old writing system that vertically connects continuous strokes
together to create a word Letters of Mongolian script have been created and taught by nomads
from generation to generation During the 1937-1940 purges of the Soviet era thousands of tutors
and traditional scholars of the script were killed Those who remained alive were banned from
mentoring the younger generation Soon after that or around 1946 a new Cyrillic script was
adopted as the only eligible script therefore banning all the teachings of old Mongolian script and
Latin lettering Only in the 1970s was the old Mongolian script re-introduced to scholars allowing a
limited number of classes in universities
After the 1990 democratic changes along with the revival of Mongolian identity interest in
traditional calligraphy reawakened As a sign of such revival the very first non-communist political
organization the Democratic Union of Mongolia used folded calligraphy as its main logo
Source Info Mongolia
THOUGH IMPROVING MONGOLIA STILL REELING UNDER CORRUPTION
The third joint survey by the Asia Foundation and Sant Maral Foundation to gather data on the
perception of corruption in Mongolia revealed that efforts to curb corruption in what is considered
as one of the worldlsquos most corrupt countries could be having impact
The survey shows a significant drop in the percentage of respondents who believe corruption has
increased in the last three years from 389 percent in November 2012 to 183 percent currently In
contrast in 2006 a majority of respondents (63) indicated that corruption has increased ―a lot in
the last three years The survey also shows that corruption has declined in importance as a critical
social problem since 2006 Despite these positive signs overall respondents indicated that
corruption remains a serious issue in some specific key areas
Conducted in September of this year the survey featured face-to-face interviews in 1360
households across Mongolia including seven districts in Ulaanbaatar and 21 counties in six
provinces A majority (766) cited that widespread corruption in the law enforcement agencies is
one of the main reasons the government has been unable to tackle corruption effectively When
corruption is perceived to be this widespread the attention will obviously turn to the performance
of the apex anti-corruption body the Independent Authority Against Corruption (IAAC) The survey
shows that the IAAC is slowly but surely beginning to gain confidence among citizens The
percentage of those surveyed who think that its performance is ―good or ―very good increased
from 78 percent in March 2010 to 203 percent in March 2013 In September 2013 the result shows
a new high of 294 percent
Peoplelsquos perceptions on corruption are often shaped by personal experiences Although very few
respondents in the survey said that they had actually paid a bribe themselves (8 percent about a 3
percent drop from 2012 and an 18 percent drop since 2006) as noted before many are not willing
to report instances where they are asked for one Similarly 36 percent of respondents said they
would not pay a bribe but 26 percent indicated that they would pay if they had the financial
capability
Basanta Pokharel is The Asia Foundation‟s chief of party for the STAGE program in Mongolia He
can be reached at basantapokharelasiafoundationorg The views and opinions expressed here
are those of the individual author and not those of The Asia Foundation
Source Asia Foundation
MPP DEMANDS DISMISSAL OF MINISTERS
Mongolian Peoplelsquos Party Chairman N Enkhbold and party head S Byambatsogt submitted to the
Speaker a request for the dismissal Minister of Finance Chultem Ulaan and of Economic
Development Minister Nyamjav ―Fortuna Batbayar
Our faction believes that these ministers must be held responsible for the worsening of the
national economic situation We also intend to do the same with other ministers after hearing
opinions of people said Byambatsogt
Source Montsame
FORMER TAVAN TOLGOI JSC DIRECTOR ARRESTED
The Independent Agency Against Corruption arrested former Tavan Tolgoi JSC director Kh
Tumenbayar for undisclosed reasons
An unnamed official source suggested that the arrest may be related to abuses of power and
payments to political parties as well as the construction of a high-class hotel in Dalanzadgad Soum
Umnugobi Aimag Kh Tumenbayar is a member of the Democratic Party a member of Parliament
and is an associate of ―Ajnai Bat-Erdene the Minister of Defense who helped Tumenbayar attain
position as the director of Tavan Tolgoi for 6 years and rise to head of the Umnugobi Aimag Citizens
Council
Tumenbayar voluntarily resigned from his position at Tavan Tolgoi last month The IAAC has
reportedly not given details to the reasons for the investigation opened on Tumenbayar because of
possible connections to high-ranking officials
Source Unuudur
MONGOLIA TURKMENISTAN JOIN INTERNATIONAL RACING FEDERATION
The International Federation of Horseracing Authorities (IFHA) has welcomed racing organizations
from Mongolia and Turkmenistan as affiliate members
Recent ratification to IFHA statutes at its annual General Assembly in October created a new
affiliate membership category within the Federation Thus the Federation of Mongolia Horse Racing
Sport and Trainers and the Turkmen Atlary State Association by unanimous vote of the IFHA
Executive Council in Paris in October have become the IFHAlsquos first two affiliate members
The Federation of Mongolian Horse Racing Sport and Trainers (FMHRST) is a non-governmental
organization (NGO) which serves to the development of equestrian sport in Mongolia and works to
protect the rights of horsemen who specialize in this national sport The new affiliates were
announced by IFHA Chairman Louis Romanet this week and several key appointments to IFHA
executive office positions and committees have also been made
Source Horse Talk
MONGOL TV HEAD MEDIA CAN HELP FIX THE BIG PROBLEMS
Nomin Chinbat head of Mongol TV has grander intentions than just ridding the countrys television
business of rampant pirated content and unlicensed formats The young executive wants to help
clean up Mongolian politics and the nation by creating a free and open media
―The networks are used as propaganda channels for politicians They are used very effectively every
four years at election time says Chinbat whom the Source named one of the 25 Most Powerful
Women in Global TV at MIPCOM 2013
―There are laws against piracy but they arenlsquot implemented explains Chinbat who says that
politicians in the country of roughly three million wonlsquot challenge journalists because their
relationships with them are too cozy
Mongol TV has invested in original programming licenses all of its imported content and runs
investigative journalism features highlighting social problems such as alcoholism and corruption
The company is organizing a Mongol TV Day for February 2014 to which it has invited major
international studios to raise awareness of the issues and introduce the global industry to
Mongolia Britainlsquos ITV and Americalsquos CBS are already confirmed and negotiations are ongoing with
other attendees The situation has improved in recent years with some channels having become
what Chinbat calls ―hybrids which license some sports rights but then steal others and copy
formats
―These days some of these channels might license 25 episodes of a format and make 50 But this is
actually progress says Chinbat
Chinbat and her team were at the Asian Television Forum (ATF) in Singapore looking for new
formats that can be produced within the constraints of Mongolian television budgets However with
Mongolias young populationmdash65 percent of the country is under 35 years oldmdashmobile viewing is on
the rise and the network is already working second-screen utilization and new media applications
This demographic sweet spot should guarantee strong growth in the population economy and
nascent entertainment sector in Mongolia in the coming decades
Source Hollywood Reporter
ANNOUNCEMENTS
ldquoMM TODAYrdquo ON MNB-TV FRIDAY 1900 TO 1910
BCM is pleased to announce that Mongolian National Broadcasting continues its cooperation with
BCM on ―MM Today This English news program is aired every Friday for 10 minutes and is
scheduled from 1900 to 1910 tonight Tune in to watch this program that reports stories from
todaylsquos BCM NewsWire
BCM WEBSITES
MONGOLIAN WEBSITE bdquoPRESENTATIONS‟ AND bdquoNEWS‟ SECTIONS
The Presentationslsquo section on BCMlsquos Mongolian website can be reached via bcmmnitgeluud
As a key component of BCMlsquos Mongolian website articles from the Newslsquo section and the
government website Open-Governmentmn are regularly updated
S Oyun Minister of Environment and Green Development presentation at BCM monthly meeting on
May 27 added to Mongolian website bcmongoliaorgmnилтгэлүүд
- Байгаль орчин ногоон хөгжлийн сайд СОюун Байгаль орчин ногоон хөгжлийн шинэчлэлийн
бодлого үйл ажиллагаа МБЗ-ийн сарын уулзалт 5 сарын 27 2013
___________________________________________
ENGLISH WEBSITE PRESENTATIONS MONGOLIA REPORTS bdquoINTERVIEWSbdquo MONGOLIAN
BUSINESS NEWS‟ bdquoPHOTO GALLERY‟
The following 13 presentations are from the Mongolia Investment Summit- 2013 in Hong Kong
November 18-20
- Regulatory Update Navigating Mongolialsquos legal framework for foreign direct investment
Javkhlanbaatar Sereeter Director General Foreign Investment Regulations and Registration
Department MINISTRY OF ECONOMIC DEVELOPMENT OF MONGOLIA
- Investment keynote Investing into Mongolia in 2013 ndash Where do the opportunities lie James
Passin Co-Founder and Manager FIREBIRD MONGOLIA FUND
- Development keynote Key challenges and opportunities for continued growth in Mongolia
Randolph Koppa President TRADE AND DEVELOPMENT BANK OF MONGOLIA
- Outlining government policies and long-term plans for Mongolialsquos mining sector Amarjargal
Khurelbat Head of International Cooperation Division MINISTRY OF MINING OF MONGOLIA
- From copper to met coal Demand and price outlook and expected impact on Mongolialsquos economy
Ghee Peh Managing Director Metals and Mining Research UBS SECURITIES ASIA
- How Mongolian banks and financial institutions are dealing with the challenges and opportunities
of a fast growing economy Norihiko Kato Chief Executive Officer KHAN BANK
- Update on the Mongolian stock market ndash Impact of the new Securities Law Altai Khangai Chief
Executive Officer MONGOLIAN STOCK EXCHANGE
- From investment banking to trade finance to micro credits to insurance Amartuvshin Hanibal
Managing Director TENGER FINANCIAL GROUP LLC
- Spotlight presentations Showcasing Mongolian investment opportunities Peter Morrow Board
Director ASIA PACIFIC INVESTMENT PARTNERS
- Spotlight presentation Showcasing Mongolian investment opportunities Munkhbat Davaatseren
CEO of Golomt Securities GOLOMT BANK
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources
Batmunkh Batkhuu Chairman SHARYN GOL JSC
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources
Jimmie Wilde Chief Operating Officer BERKH UUL JSC
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources Mona
Forster Executive VP ENTREacuteE GOLD INC
The following two presentations are from the ―ANTI-CORRUPTION LEGISLATIONPOLICY
INTERNATIONAL BEST PRACTICE ON TRANSPARENCY training seminar for businesses in
Ulaanbaatar November 18 2013
-―International business standard on transparency by Jelena Pesic Director PwC
-―Finlandlsquos best practice on transparency and anti corruption by Dr Pekka Hallberg (as it is
worldlsquos number one) Emeritus President of the Supreme Administrative Court of Finland
The following 15 presentations are from the Mongolia Mining Summit Perth Australia October 29-
31 2013
bull Mongolialsquos Minerals Future and Development by Otgochuluu Ch Director General Department of
strategic policy and planning at Ministry of Mining Mongolia at the Mongolian Mining Summit 2013
Perth Australia Oct 29-31 2013
bull Mongolian Economy Investment OpportunitiesChallenges Jim Dwyer Executive Director
Business Council of Mongolia at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31
2013
bull Oyu Tolgoi Lessons from the Gobi Houston Spencer Vice President Communications and Media
Relations Oyu Tolgoi at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Market dynamics for Mongolian coking coal in the Chinese market Graeme Hancock President
and Chief Representative at Anglo American Mongolia at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Speech by Mr Ariunbold Byamba Deputy Director Erdenes MGL LLC at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull Launching Mining Projects in MongoliandashA Major Contractorlsquos Perspective Eric Erdenebat
Tseveendorj Country Manager Orica Limited at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Investing in a dynamic legislative environment Elisabeth Ellis Managing Partner Ulaanbaatar
Minter Ellison at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Sandvik In Pit Crushing amp Conveying (IPCC) Doug Turnbull Principal Mining Engineer Sandvik
Mining Systems at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Ovoot Coking Coal Project David Paull Managing Director Aspire Mining at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull The business of being a third neighbor David Landers General Manager East Asian Growth
Markets at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Nuurst Thermal Coal Project Daniel Rohr Chief Financial Officer Modun Resources Ltd at the
Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Culture matters in building sustainable long-term business relationships Hana Tserenkhand
Byambadash Business Development Consultant AusMon Consulting and Dr Christine Hogan Adjunct
Professor Curtin University Consultant amp Author at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Maximizing Business Benefits from Your IT Investment Brad Skeggs Executive Director COSOL at
the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Presentation by Battsengel Gotov CEO Mongolian Mining Corporation at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull Mongolian Mining Sector Present and Future Developments NAlgaa Executive Director
Mongolian National Mining Association at the Mongolian Mining Summit 2013 Perth Australia Oct
29-31 2013
The ―Mongolia Reports section includes the following
- ―Ministry of Finance of Mongolia 2013 Government Debt Auctions by Bank of Mongolia
- ―Doing Business in Mongolia 2013 Country Commercial Guide for US Companies by US
Embassy
- ―Real Estate Report 2013 by Mongolian Properties
- ―Selected Macroeconomic Indicators November 20 2013 by International Monetary Fund
- ―2013 Second Annual Mongolian CEO Survey from PricewaterhouseCoopers Audit LLC
- ―Selected Macroeconomic Indicators data through October 16 2013 by International Monetary
Fund
- ―IMF Completes 2013 Article IV Mission to Mongolia by International Monetary Fund
The following are added to Interview Section from the Oxford Business Group Mongolia Reports
2013 book
bull B Byambasaikhan Chairman Business Council of Mongolia ―Talk is cheap
bull President Ts Elbegdorj ―Diversifying for growth
bull Jim Dwyer Executive Director Business Council of Mongolia ―Non-mining sectors budding
bull Peter Morrow Chairman American University of Mongolia ―Filling in the blanks
bull N Zoljargal Governor Bank of Mongolia ―Sustainable vision
bull Gansukh Minister of Roads and Transportation ―Accessing new markets
bull J Od President MCS Group ―Building interest
bull B Chuluunbaatar President and CEO of Monnis Group ―Climbing the ranks
bull Cameron McRae President and CEO Oyu Tolgoi ―Sitting on a copper mine
BCMs English website includes the ―Mongolia Business News section where the Open Letter to
Parliament and Government is available for download
BCM continuously posts news stories and analysis of relevance to Mongolia at Mongolian Business
News before they are all put together each week for Fridays weekly NewsWire
The ―Photo Gallery contains photos from the 6th Anniversary BCM Renewal dinner on November
11 2013
BCM Football Cup 2013 pictures are posted to the website - httpbcmongoliaorgenphotos350-
enalbumalbumid=200
The BCM NewsWire will continue to be issued each Friday incorporating items already on the home
page for a consolidated account of the weeklsquos events
SOCIAL NETWORK WITH BCM
BCM LAUNCHES NEW LINKED-IN COMPANY PAGE
The Business Council of Mongolia has launched a new company page on the social networking
website LinkedIn to network its members and followers including small-medium enterprises (SMEs)
The new page will allow BCM to alert followers to the latest news and information critical to their
businesses Memberslsquo businesses will be promoted Additionally BCM plans to deliver monthly
infographics on the latest data as well as videos and other media content as they come The bulk of
the content on the new page will be in Mongolian language to better cater to BCMs Mongolian-
speaking audience and members The following link can direct you to the New BCMs Linked-in page
httpwwwlinkedincomcompanybusiness-council-of-mongoliatrk=company_logo
The Business Council of Mongolia (BCM) has expanded its reach to your favorite social networks
Keep up to date on the latest business deals in Mongolia and how the climate for investment is
improving each day with BCM
Add BCM on Facebook at httpswwwfacebookcomTheBusinessCouncilOfMongolia to read the
latest announcements and comment on events carried in the NewsWire with the community
Hear breaking news and announcements as they happen when you follow BCM on Twitter at
httpstwittercombcmongolia
We have now 2482 fans on our Facebook fans page 1527 connections on LinkedIn network and
835 followers on Twitter
Of course for news information interviews event photos and announcements regarding our
organization visit the official BCM website at httpbcmongoliaorgen
ECONOMIC INDICATORS
INFLATION
Year 2006 60 [source National Statistical Office of Mongolia (NSOM)]
Year 2007 151 [source NSOM]
Year 2008 221 [source NSOM]
Year 2009 42 [source NSOM]
Year 2010 130 [source NSOM]
Year 2011 102 [source NSOM]
November 30 2013 120 [source NSOM]
Year-over-year (y-o-y) nationwide
Note 111 y-o-y Ulaanbaatar city November 30 2013
CENTRAL BANK POLICY LOAN RATE
December 31 2008 975 [source IMF]
March 11 2009 1400 [source IMF]
May 12 2009 1275 [source IMF]
June 12 2009 1150 [source IMF]
September 30 2009 1000 [source IMF]
May 12 2010 1100 [source IMF]
April 28 2011 1150 [source IMF]
August 25 2011 1175 [source IMF]
October 25 2011 1225 [source IMF]
March 19 2012 1275 [source Mongol Bank]
April 18 2012 1325 [source Mongol Bank]
January 25 2013 1250 [source Mongol Bank]
April 8 2013 1150 [source Mongol Bank]
June 25 2013 1050 [source Mongol Bank]
CURRENCY RATES ndash DECEMBER 19 2013
Currency Name Currency Rate
US dollar USD 164138
Euro EUR 224680
Japanese yen JPY 1579
British pound GBP 268874
Hong Kong dollar HKD 21170
Chinese Yuan CNY 27031
Russian Ruble RUB 4981
South Korean won KRW 155
Disclaimer Except for reporting on BCMlsquos activities all information in the BCM NewsWire is
selected from various news sources Opinions are those of the respective news sources
―My goal in working with MNU is to provide the technology and the staff he said ―Ultimately it
is the Mongolian engineering students that will be required to install and operate these systems as
well as determine the scope of the application beyond simply providing a high temperature heat
source
Source Mongolian National University
MCDONALDS INTERNATIONAL CALLS FOR FRANCHISEE TO POSSIBLY OPEN IN MONGOLIA
McDonalds International sent out a press release on December 10 calling for partners to approach
the company to open its first burger outlets in Mongolia
―We have not set a firm date for the development of McDonalds restaurants in Mongolia In the
future we may take steps to open McDonalds restaurants in Mongolia and if we seek a franchisee to
represent us the person will have the following characteristics
―High integrity business experience in the market history of success ability to work well with a
franchisor ability to complete a training program that can take about nine months willingness to
devote full time to the McDonalds restaurant business retail experience knowledge of real estate
market significant capital
The press release ends by inviting candidates to apply for a franchise
Source BNE
JAPANESE ldquoSUN RICE PLANT OPENS IN MONGOLIA
An opening ceremony for Mongolialsquos Technik Import LLC and Japanlsquos Niigata Kubota ―Sun Rice
factory in Ulaanbaatar on December 10
Niigata brown rice will be imported sorted and packed at the Ulaanbaatar factory which has a
daily capacity for the production of two to three tons of packaged rice The plant is equipped with
fully automated machines from Kubota The rice will begin sale in the domestic markets at MNT
5000 to MNT 7000 per kilogram
―Mongolia has been receiving rice from the people of Japan under aid program for many years
said Deputy Minister B Tsogtgerel ―During the latter event I and Ambassador Takenori Shimizu
were discussing that the period of receiving rice as aid is over and now the time of reciprocal
assistance has come and the ―Sun Rice factory is a sample of joint cooperation to produce the
world known quality in Mongolia
Niigata Prefecture is the second largest producer of rice in Japan after Hokkaido
Source Info Mongolia
MNBC MIGRATES TO DVB-T2 WITH THOMSON VIDEO NETWORKS
Video Mongolia Digital Broadcasting (MNBC) has launched Mongolias first ever DVB-T2 service using
head-end systems from Thomson Video Networks
Launched in 2007 MNBC was Mongolias first digital terrestrial TV network operator and will now be
able to broadcast up to 120 digital TV channels over five UHF transponders to maintain its position
and compete with Mongolias national satellite operator Working with systems integrator Digital
Horizon MNBC has deployed TVNs Vibe EM1000 multi-channel SD encoders and NetProcessor 9030
multiplexer and video processor with an embedded DVB-T2 gateway
Source Rapid TV News
CHINESE FIRM NEGOTIATING TO ACQUIRE JUST AGRO
A Chinese company is in negotiations to purchase Mongolias only meat exporter said a company
source
Just Agro LLC which owns 11 meat companies with the Makh Market brand is reportedly the subject
of negotiations for sale to a Chinese entity said the source who asked not to be named The Just
Agro company provides 40 percent of meat processing and 30 percent of storage in Mongolia and is
the only meat exporter in Mongolia
Last July authorities revealed that Just Grouplsquos Sh Batkhuu falsified signatures of the State
Property Committee and Erdenet Mining Cos director to receive USD 131 million in loans from
South Africas Standard Bank putting up the Erdenet Mine as collateral for the credit After Just
Group was dissolved the central bank took over all its assets including Just Agro
Source Unuudur
MONGOL TV EXPOSES MEDIA CORRUPTION WITH FAKE MCDONALDS STORY
An investigative news show on Mongol TV planted a false news story last week with all 9 of
Mongolias major local media outlets about McDonalds opening a branch in the country The
exercise was undertaken to expose corruption and the rampant practice of paid-for journalism in
Mongolia Mongol TV said
The appearance of a Mr P Rank promising McMutton burgers and goat milk-shakes in the
official press release set off no alarms at the media networks which took between USD 150 and
USD 700 from an undercover journalist to run the story on their websites on the front page of three
newspapers and on TV news on three networks including the local public broadcaster
―Soon the first letter our children learn will be Mlsquo Mr P Rank says with a golden shining smile
according to the fake release which also claimed McDonalds was to be sponsored by Mongolialsquos
Health Ministry and sold in schools all over the country
After Mongol TV unveiled the sting it invited representatives of the 9 duped media organizations to
explain their actions though all reportedly declined
Source Hollywood Reporter
EBRD ADOPTS NEW STRATEGY FOR ENERGY AND NATURAL RESOURCES SECTOR
The European Bank for Reconstruction and Development (EBRD) has adopted a new strategy that
will guide its investments in the energy and natural resources sector for the next five years EBRD
press release reported Tuesday
The bank sets out a commitment to helping its countries of operations move toward a sustainable
energy future The EBRD region which stretches from Morocco to Mongolia is faced with a
challenge of providing sustainable secure and affordable energy The energy strategy identifies
energy efficiency as the first and best response to this challenge
―What the EBRD brings to this challenge is our focus on structural reform said EBRD Managing
Director for Energy and Natural Resources Riccardo Puliti ―We have learnt from our work that
when properly channeled market forces can be harnessed to make energy sectors more sustainable
- environmentally economically and politically
The bank intends building on its well-established support for the Extractive Industries Transparency
Initiative by requiring clients operating in the extractive industries sector to disclose subsoil
contracts and licenses as well as all payments they make to local and national authorities
In the case of coal-fired generation the strategy supports the move to lower-carbon fuel sources in
response to the challenge of climate change In alignment with other international financial
institutions the EBRD will not finance any coal-fired power generation projects except in rare and
exceptional circumstances in which there is no feasible alternative energy source
The strategy also reinforces the EBRDs growing support for renewable energy which will include
financing both energy-generating capacity and key infrastructure such as transmission lines and
backup generation
―We have also developed and invested in the first wind farm in Mongolia - where it was also the
first new energy generator in 30 years said Puliti
Source Trend News Agency
SUSTAINABILITY HOSTS SESA WORKSHOP
Sustainability East Asia LLC organized a National Validation Workshop on 10 December as part of its
responsibilities for establishing a strategic environment and social assessment (SESA)
Participants from across the country arrived to represent government the private sector and non-
government organizations to discuss the proposed SESA The next step will be to assess mining
growth options and identify at least three likely growth scenarios which mining could bring to
Mongolia Afterward the SESA team will evaluate the environmental and social issues that are likely
to arise as a consequence of each scenario
The Mining Sector Institutional Strengthening Technical Assistance Project commissioned
Sustainability to conduct a strategic environmental and social assessment for Mongolias mining
sector
Sustainability will also perform a gap analysis of the legal regulatory and institutional capacity to
deal with each possible scenario An action plan is expected for SESA by summer 2014
Source Sustainability East Asia LLC
UB REGISTERS MATERNITY HOSPITAL NO 1
The new building annex for Maternity Hospital No 1 was registered as capital city property
13 December at a regular session of the Ulaanbaatar Citizens Council This maternity hospital
building was built with financing from Boroo Gold and was presented as a gift to the people of
Mongolia With a capacity to receive 150 mothers and children its total cost was MNT 92 billion It
includes the hospital building of 1169 square meters external heating clean water and sewer
water pipelines a diesel station an asphalt road a pedestrian walkway outdoor vegetation and an
external LED sign
This new building was commissioned 15 June The new annex has one vacuum operation room and
two standard operating rooms on the fifth floor 100 beds for women and 50 beds for infants on the
third and fourth floors paraclinical and sanitation units a pharmacy a conference room and
training rooms on the second floor an ambulatory section and reception on the first floor and staff
cafeteria closets washrooms and a disinfection chamber in the basement
Source Centerra Gold Inc Newsmn
RIO TINTO‟S SAM WALSH DIGS IN FOR THE LONG HAUL
Sam Walsh wants to remain as Rio Tinto PLClsquos chief executive beyond the end of his contract and
has told the minerlsquos board he will not be ready to retire in 2015
―I am there if they want me said Walsh ―Likewise if therelsquos someone else who can come in and
take what Ilsquove done to the next level thatlsquos fine too
The Australian 63 later this month replaced Tom Albanese 11 months ago after Rio decried
―unacceptable writedowns on its coal business in Mozambique Walsh says investors support his
strategy to cut costs and sell non-core assets
Walsh said he has explored selling all of Riolsquos aluminum business this year in what would be a
signature reversal of Albaneselsquos costly purchase of Alcan in 2007 But he says no offers have been
good enough while the business is not generating enough cash for an initial public share offering or
spin-off to Riolsquos shareholders Walsh has also been frustrated in attempts to sell Riolsquos diamonds
business
―Who would thank me if I sold something under value just to get a tick At the end of the day you
have to be pragmatic about things he said Offers ―werenlsquot in the bailiwick of where we thought
they should be
The Alcan deal epitomized Riolsquos poor recent dealmaking and Walsh admits the company had
―relaxed some of the controls it should have had Rio staff has now ―refound their mojo he said
On operating costs which Rio has said it will cut USD 3 billion next year he said ―There is rolling
momentum and thatlsquos important
Source Financial Times
KYRGYZSTAN FILES ECOLOGY DAMAGE LAWSUIT AGAINST CENTERRA
Kyrgyzstan is suing Canadas Centerra Gold Inc for 15 billion soms (USD 304 million) over what the
government says is ecological damage marking a new twist in a bitter row with the investor running
the largest Kyrgyz gold mine
The state environmental protection and forestry agency said in a statement that it had filed the
lawsuit at an economic court in the Kyrgyz capital Bishkek saying Centerra Gold had ignored its
earlier request for voluntary compensation It said the alleged ecological damage included
emissions of pollutants and waste dumps It said its claim referred to the companys operations
between 1996 and 2011
Centerra had said earlier that it viewed the governments claim as exaggerated and unfounded
The company disagrees with these charges and plans to give explanations on this matter in the
nearest time said a spokesman for the Kumtor Operating Company (KOC) the Centerra subsidiary
that runs the Kumtor mine in the Tien Shan mountains
The Toronto-listed miner which also owns the Boroo gold mine in Mongolia is already under
pressure from the Kyrgyz parliament which demands the state hold 67 percent in a proposed joint
venture to run the mine In September the government and Centerra Gold signed a memorandum
of understanding paving the way for Kyrgyzstan to swap its 327 percent stake in the Canadian firm
for 50 percent in a venture that would own Kumtor But in October the legislature voted to tear up
the document and seek control over the planned venture It gave the cabinet until 23 December to
report on its talks with Centerra Gold on setting up the venture Pearson said Centerra is having
constructive dialogue with the Kyrgyz government
Source Reuters
ECONOMY
FITCH AFFIRMS TWO MONGOLIAN BANKS AT B REVISES OUTLOOKS TO bdquoNEGATIVE‟
Fitch Ratings on 16 December revised the outlook on the Long-Term Issuer Default Ratings (IDRs) of
Khan Bank LLC and XacBank LLC to ―Negative from ―Stable At the same time the agency
affirmed the two Mongolian banks IDRs and viability ratings at B and b
The revision of the outlooks on both banks IDRs reflects weakening operating conditions as
indicated by the change in the Outlook for the Mongolian sovereign (B+) to Negative from Stable on
13 December The sovereigns outlook was revised due to mounting risks to the countrys economic
and financial stability Ratings on the two banks could be downgraded if pressures on asset quality
and liquidity intensify Persistent local-currency depreciation would reduce borrowers repayment
capacity and could lead to accelerated deposit withdrawals given the countrys high level of
dollarization
The banks ratings also remain sensitive to the withdrawal of credit stimulus as this could result in
asset deterioration on slowing economic growth or higher inflation Further decline in the
governments international reserves could also trigger a negative rating action as the banks
currency-related risk is counterbalanced by the authorities swap facility and unlimited foreign-
currency conversion Both banks ratings are also sensitive to any changes in their steady access to
capital from private-sector owners
Khan Banks Support Rating and Support Rating Floor (SRF) reflect Fitchs view that as the largest
bank in Mongolia it would be likely to receive state support in case of need However the
Mongolian sovereigns ability to provide timely support to the banking system remains limited as
underlined by its IDR of B+ A downgrade of the sovereign ratings would point to weakening in the
Mongolian governments ability to provide timely support to the banking system which put negative
rating pressure on Khan Banks SR and SRF In contrast Fitch expects XacBanks SR and SRF of 5B-
to be maintained even if the sovereigns rating is downgraded to B This is because the current SR
and SRF already reflect the agencys view that support from the sovereign in case of need cannot
be relied upon
The rating actions are as follows Khan Bank Long-Term Foreign-Currency IDR affirmed at B
Outlook revised to Negative from Stable Short-Term Foreign-Currency IDR affirmed at B Long-
Term Local-Currency IDR affirmed at B Outlook revised to Negative from Stable Viability Rating
affirmed at b Support Rating affirmed at 4 Support Rating Floor affirmed at B XacBank Long-
Term Foreign-Currency IDR affirmed at B Outlook revised to Negative from Stable Short-Term
Foreign-Currency IDR affirmed at B Long-Term Local-Currency IDR affirmed at B Outlook revised
to Negative from Stable Viability Rating affirmed at b Support Rating affirmed at 5 Support
Rating Floor affirmed at B-
Source Fitch Ratings
MONGOLIA SCORE FALLS ON POLITICAL RISKS INDEX FOR MINING INVESTMENT
An annual survey by Behre Dolbear of political risks saw Mongolia decline 5 points in an index
ranking Mongolia 19th out of 25 countries
Mongolia this year received a score of 269 compared with 32 last year Leading the countries
surveyed was Australia down 07 points from last year Russia with a total score of 171 compared
with 16 last year was the lowest ranking
The 25 countries considered in this yearlsquos survey are ranked based on seven criteria
-the countrylsquos economic system
-the countrylsquos political system
-the degree of social issues affecting mining in the country
-delays in receiving permits due to bureaucratic and other issues
-the degree of corruption prevalent in the country
-the stability of the countrylsquos currency and
-the competitiveness of the countrylsquos tax policy
Each criterion is rated on a qualitative scale from one (worst) to 10 (best) that reflects conditions
that promote investment growth in the mining sector The maximum score attainable for a country
is 70 points
Source Behre Dolbear Group
MONGOLIA LOOKS FOR SECOND CHANCE WITH FOREIGN INVESTORS
Saruul Ganbaatar the deputy head of Mongolias stock exchange hopes the countrys days of
interventionist economic policies are over and new laws ensuring foreign investors access to the
frontier markets industries will bring back sorely needed cash
Ganbaatar 32 who cut his investment teeth in Chicagos financial houses after graduating from
Loyola University is careful not to over-promise on what the stock market can deliver in 2014 and
beyond in terms of new listings or overall growth In October a law was passed easing ownership
restrictions for private companies to invest in the strategic industries A Securities Markets Law
coming into effect 1 January 2014 is expected to provide the key ingredient to attract deep
pocketed institutional investors such as mutual funds to invest
This really is the missing ingredient said Ganbaatar who has been traveling the globe promoting
the changes in the laws to global investors for the past two weeks
The stock index fell 19 percent in 2012 and year-to-date is down 115 percent although it did start
to climb with the newly passed laws On 1 January the new Securities Markets Law will allow
Mongolias commercial banks to offer custodial banking services Custodial banks serve as safeguards
for a firm or individuals financial assets playing a critical role in the final settlement of market
transactions Total market capitalization now is between USD 900 million and USD 1 billion Dont
expect the number of new listings to mushroom There may instead be a cull of companies Fifty-
five to 60 of them many of which have not traded in years are being reviewed for potential
delisting
The Mongolian Stock Exchange 100 percent state-owned is perhaps itself a candidate for
privatization It has been in a strategic partnership with the London Stock Exchange for two and a
half years
They have the right of first refusal he said
Source Reuters
CPI INCREASES TO 12 PERCENT YEAR-OVER-YEAR IN NOVEMBER
The National Statistical Office reported a 12 percent increase in the national consumer price index
(CPI) in November year-over-year
The CPI growth which also in November grew 13 percent from the previous month was explained
by a 14 percent increase in food prices and non-alcoholic beverages 23 percent for clothing
footwear and fabrics and 07 percent for housing water electricity and fuels
Source Info Mongolia
GROWTH SEEN IN EXPORT OF PRECIOUS METALS
The export value of precious metals grew 114 percent in November from the month before and 63
percent from the same period in 2012 according to the National Statistical Office
Exports totaled USD 38 billion in the year to December while imports grew to USD 58 billion The
foreign trade balance saw a deficit of USD 2 billion November saw exports of USD 381 million and
imports of USD 514 million with exports and imports in decline between July and November The
value of export products for the first 11 months was USD 11 billion Despite the gain in precious
metal exports exported minerals which represented 81 percent of all exports in the year to
November fell 129 percent from the year before
Source Zuunii Medee
MNT 788 BILLION WILL BE ENTERED INTO THE STABILIZATION FUND
The Stabilization Fund is set to collect MNT 49 billion this year and MNT 298 billion next
The Stabilization Fund was established to collect surplus revenue in years of economic gains from
the mining sector to cushion possible annual losses during economic downturns and weak
commodity demand Any gain in the price for gold and coal next year will also be reflected in
allotments to the fund
Source Zuunii Medee
ECONOMIC DEVELOPMENT MINISTRY PLANS TO PUT 81 OF BUDGET INTO CONSTRUCTION
The Economic Development Ministry plans to invest MNT 814 percent of its total investment budget
into construction
Beginning 1 January 2014 the ministry will provide MNT 9303 in loans toward the construction
sector The ministry will spend 39 percent of its budget for reconstruction and repair 10 percent
for the purchase of new techniques and technical equipment 3996 percent for infrastructure
2743 percent for education and health 636 percent for employment and agriculture and 2926
percent for other sectors of the economy
Projects include the construction of 30 clinics 27 cultural centers 6831 km of paved roads and
1032 m length of bridges Mongolia has received USD 55 billion in aid in the last two decades of
which 55 percent was in the form of low rate loans and 45 percent as non-repayable grants for
investments into agriculture infrastructure power and health sectors
Economic growth since 2011 has allowed Mongolia less aid than in the past The government has
now turned its focus on providing funding with concession agreements to large scale projects such
as the Nariin Sukhait-Shivee paved road and the power station at Mogoin gol Other projects include
Power Plant No 5 the Altanbulag-Ulaanbaatar-Zamyn Uud highway the Tavan Tolgoi- Khanbogd-
Khangi road and the Tuul Songino water reservoir complex
Source Zuunii Medee
TT POWER PLANT MAY NEED CONCLUSION TO OT DISPUTE SAYS DIRECTOR
Uninterrupted development of the Tavan Tolgoi power plant will ride on the outcome of disputes
concerning Oyu Tolgois underground mine said the director of the plant
―One of the main risks is the issue of a main user Enkhsaikhan said ―The key buyer of the power
from the TT Power Plant is OT Due to the uncertainty over phase twolsquo and unresolved matters
with the government of Mongolia OT is not regarded as a reliable buyer on a stand-alone basis
He added that the power company may request a guarantee from Oyu Tolgoi
A consortium that includes Koreas Posco Energy and Daewoo Engineering and Construction GDF
Suez Energy Asia Japans Marubeni Corp and Kansai Electric Power in March was selected for
development of the plant which has a preliminary estimate cost of USD 1 billion Those expenses
include installation of 150 kilometers of electric lines between Tavan Tolgoi and Oyu Tolgoi The
consortium will be expected to raise 30 percent of the cost itself while the remaining 70 percent
will come from bank loans However the uncertainty surrounding the Oyu Tolgoi copper mine could
create more hold ups
Source Zuunii Medee
CABINET TO CONCLUDE CONCESSION ON ALTANBULAG-ZAMYN UUD HIGHWAY
The Cabinet of Ministers ordered ministers to conclude a concession agreement for the Altanbulag-
Ulaanbaatar-Zamyn-Uud highway
The government is planning to establish the concession contract with the Chinggis Land
Development Group which according to the agreement shall have exclusive rights to construction
ownership and transfer of property using its own financing The concessionaire shall complete the
construction within three years after that shall operate the facility for another 30 years before
transferring the ownership to the Government
If Chinggis Land accepts these terms it would be responsible for developing a feasibility study and
blueprint of the project to be approved by the relevant ministries before concluding a financing
agreement The concession agreement will come into effect after the Chinggis Land Development
Group obtains a financing agreement for USD 1 billion from a commercial bank of Mongolia
The government will be responsible for freeing up the land where the highway is planned while the
Chinggis Land would cover the costs for doing so
Source Montsame
MNT 116 BILLION WILL BE SPENT FOR BUILDING EMERGENCY ALARMS IN UB
The National Emergency Management Agency has installed an emergency alarm system in 60
locations of Ulaanbaatar The alarm will alert citizens to natural disasters such as earthquakes
The alarms will be controlled from a center by microwave radios and satellite communication
devices
Source Udriin Sonin
EIU CLARIFIES EXTENT OF OFFICIAL ESTIMATES OF OIL SHALE RESERVES
The latest research from Mongolias mining ministry gives a clearer picture of oil shales
development potential in the coming years Although Mongolia has long been known to have
substantial oil shale deposits previous estimates were extrapolated from rudimentary surveys
conducted in the 1990s and thus left the actual reserves open to speculation
Plans to develop the industry took shape only in April 2013 when an American company Genie
Energy signed a five-year deal with the Petroleum Authority of Mongolia to explore oil shale
reserves in central Mongolia Genie also plans to build a USD 4 billion processing factory in Tuv
Aimag According to government projections the processing plant will generate USD 850 million of
tax revenue annually Aside from the economic benefits of the project domestic fuel sources could
help Mongolia to improve its energy security by loosening the countrys dependence on its powerful
neighbors At present 90 percent of Mongolias oil and related products come from Russia with most
of the remaining amount being imported from China
Yet the benefits of large-scale oil shale extraction are not as clear as they might seem at first
glance Most importantly Mongolias oil shale resources should not be confused with the shale oil
phenomenon that is currently sweeping the United States Oil shale (also called kerogen) is more
expensive to extract than shale oil and carries greater environmental costs In particular oil shale
requires a large amount of water to process which could be a risky proposition in Mongolia where
hydrological resources are already under strain Although other countriesmdashEstonia in particularmdashuse
oil shale as a substitute for coal extracting liquid fuel from the shale is a complex and relatively
untested process
Genie Energys progress on the project seems more substantial than that of comparable coal
liquefaction projects that have faltered in the region However environmental technical and
political limitations suggest that Mongolias overall dependence on foreign fuel will not change
significantly in the foreseeable future
―We remain doubtful that oil shale will play a significant role in Mongolia in the next two years so
our economic growth and trade forecasts will remain unchanged said the Source
Source Economist Intelligence Unit
MONGOLIA AND THE THREAT OF THE RESOURCE CURSE
Mongolia is at a crossroads while investors complain the government is dragging its feet on allowing
miners to start digging it is crucial that it get things right at the early stages of the resources
boom
Mongolias challenge will soon be the worlds says Richard Dobbs and his team at McKinsey in a
report predicting a USD 17 trillion investment bonanza by 2030 to keep up with demand for oil gas
and other materials In 1995 about 58 countries depended on resources for the bulk of their output
and wealth In 2011 that number had risen to 81 By 2030 roughly half of the worlds economies
will essentially become giant filling stations for developing superpowers from China to South Africa
That means that instead of the world moving toward greater transparency democracy and freer
markets we could see rising corruption levels and even greater income inequality
Economies with natural-resource endowments have a huge opportunity to transform their
prospects but history suggests that they could all too easily squander the windfall says Dobbs
director of the McKinsey Global Institute in London
The world would be wise to take steps today to break this cycle McKinsey recommends several
While not terribly original they include strengthening public institutions and good governance
building decent infrastructure boosting national competitiveness promoting sound fiscal policy
making and spending the windfall wisely while engaging in forward-looking economic and social
planning The trouble is that political will and integrity is often the first casualty once the minerals
start flowing out and the spoils come pouring in
Mongolia is at that very crossroads today Investors complain the government is dragging its feet on
allowing miners to start digging But its more important to get things right at the early stages of
the resources boom That means acting now to create the institutions and regulatory frameworks
needed to ensure revenue transparencymdashknowing exactly how much money is being dug out the
ground and where its going Why not set up a sovereign-wealth fund to save for Mongolias future
When the stakes are that high a little patience can go a long way
Source Bloomberg
MONGOLIAS NOMADS WARM TO SOLAR POWER
In Mongolia often known as the land of the blue skies the sun shines for 250 days on average each
year It beats down on the sparse plains and on the Gobi desert that spans the countrys southern
border with China
It shines even during the frigid winter days on the hundreds of thousands of nomads who still roam
the steppes herding animals and living in dome-like tents calling gers About 800000 of Mongolias
28 million inhabitants still live the traditional nomadic lifestyle that has remained largely
unchanged for generations Apart from the addition of motorbikes the occasional petrol generator
and a passing trade from intrepid tourists wanting to stay in a ger for the night life is almost the
same as that of many nomads grandparents and great-grandparents Almost but not exactly
Dotted across the steppes glints of light can be seen as the sun bounces off the solar panels that
have been installed on the sides of gers made of felt and yaks wool At the start of this millennium
Mongolias herders and nomads had little or no access to modern electric power and its potential
benefits But as of 2013 thanks to a concerted push by the Mongolian government almost 70
percent of nomadic people have access to electricity Bor a herder who mainly travels around
western Mongolias Arkhangai province is one of the people whose family benefits from portable
solar home systems (SHS)
We use it for generating the power for lighting in the ger charging phones we can also generate a
fridge to keep food longer and we can run a television That is very useful for us because we can
get the most recent weather forecast which is important for our work and keeping our animals
safe Before we had power it was very difficult Now it is almost like living in the city
The ability to charge mobile phones is also important for the herders who often have children
staying at boarding schools Access to electricity also allows families to contact emergency health-
care and doctors for advice without having to make the often arduous journey to the nearest village
or town
The solar systems were distributed and installed with the help of the World Bank after the
Mongolian governments National 100000 Solar Ger Electrification Program ran into difficulties A
World Bank report Capturing the Sun in the Land of the Blue Sky describes the difficulties faced by
the Mongolian government on its ambitious project
By 2005 five years into the plan 30000 families had been kitted out with an SHS but then the
program began to stagnateThe government of Mongolia recognized that considerably more effort
was necessary not only to keep the program on track but to scale-up implementation in order to
achieve the National 100000 Solar Ger Electrification Program target the report said In 2006 the
World Bank agreed to cover half of the initial outlay costs for each family as well as after-sales
maintenance with 50 centers set up across the country including at least one in each of its 21
provinces so that the herders would not have to travel to Ulaanbaatar every time the solar panels
needed maintenance
The SHS project also offers environmental benefits to a country where the ratio of carbon dioxide
emissions to economic output is ten times higher than the world average because of the increase in
mining over the past decade as the true extent of Mongolias mineral wealth became apparent The
solar systems are slowly replacing the diesel generators used by some nomads as a means of
generating power although they are still using stoves for heating burning wood coal and dung
throughout the year
Source Al Jazeera
IRON-ORE AND COAL PRICES GO SEPARATE WAYS
Prices of the key ingredients in steel productionmdashiron ore and coking coalmdashare moving along sharply
different paths as mining companies resist cutting coal output despite the market being awash with
the raw material
While iron-ore prices have risen 22 percent since May coking coal is still searching for a rebound
Coking-coal prices are off more than 4 percent over the same period China is on course for another
year of record steel production with supply directed to the construction of high-rise apartment
buildings the manufacture of luxury cars and other uses
There is simply too much coal on the market the International Energy Agency said in a report this
week
Shipments of steelmaking coal from Australiamdashthe worlds biggest exporter of the commoditymdashare
forecast by the government to rise to 178 million tons in 2015 from 145 million tons last year Most
goes to China which accounts for 60 percent of global demand In contrast global iron-ore
exporters are struggling to increase output in areas other than Australias remote Pilbara region
supporting prices of that commodity The spot price of iron ore climbed to nearly USD 140 a ton
earlier this month a four-month high Prices have since eased a bit to USD 13430 a ton but
remain well above the consensus forecasts of analysts at the start of this year
Coal miners could scale back production but that isnt always easy to do In Australia many miners
are locked into so-called take or pay contracts with rail and port operators Many analysts dont
expect coking-coal prices to rebound for at least another 12 months RBC Capital Markets expects
coking-coal prices to average USD 154 a ton in 2014 down from USD 159 a ton forecast for this
year Instead they see more chance that iron-ore prices will come down more sharply RBC predicts
an 11 percent fall in iron-ore prices next year as new supply from Anglo Americans Minas Rio
project and mines owned by Fortescue Metals Group Ltd is added to the market UBS is even more
bearish predicting iron ore will fall below USD100 in the second half of 2014
Source Wall Street Journal
ARE COMMODITIES TRADERS bdquoTOO BIG TO FAIL‟
When the banking industrylsquos top lobby group commissioned a report by on commodity trading
houses the idea was to show trading houses like Glencore Xstrata Vitol or Cargill were ―too big to
fail and therefore needed to be regulated in a similar manner to the banks
But instead of highlighting the inherent issues surrounding the industry the report found trading
companies posed less systemic risk than the big banks As a result the Global Financial Markets
Association which commissioned the report decided not to finalize or publish it (The GFMA claims
that it often commissions reports which are shared with regulators and other interested parties but
never published) But the debate hasnlsquot ended
A separate report published in July by the Centre for European Policy Studies a think-tank argued
the growth of commodity trading houses which underpin the global trade in raw materials could
―have systemic implications Commodities trader Trafigura has become the latest to wade into the
debate In its recent prospectus for a EUR 500 million bond issue the worldlsquos second largest metals
trader and third biggest oil trader addresses the GFMA report as well as the issue of systemic risk
Making some tart observations the trading house says the GFMA paper was aimed squarely at the
Financial Stability Board a group of global regulators
―[The report] was widely seen as a tactic by some banks active in the commodity trading space as a
way of creating more equality between market participants by seeking to usher in further
restrictions on pure commodity trading companies the prospectus says
Commodity traders are facing the need to be more open about their operations and lift the veil of
secrecy Indeed the author of the GFMA reportmdashCraig Pirrong a widely respected academicmdashis
working on a white paper on commodities traders Commissioned by Trafigura it will look at what
commodities trading houses activities and the recent trend to accumulate more assets risk
management as well as looking at different types of commodity companies
Source Financial Times
SMOG DARKENS SHANGHAIS PROSPECTS FOR BECOMING A GLOBAL FINANCIAL CENTER
In the debate over which matters more in China money or quality of life the quality-of-life side
may have found the ultimate argument If you cant breathe nothing else really matters And itlsquos a
debate Mongolia has to have as it makes its own steps towards industrial and economic growth
Chinas pollution problem is spreading and growing worse a fact on stark display last week in
Shanghai the countrys financial center A stretch of filthy-air days in that coastal city so
thoroughly shocked residentsmdashwho had largely escaped the smog that has long plagued the likes of
Beijing and Harbinmdashthat it inspired fresh talk about getting away from China Lawrence Shu a
Shanghai-based partner at Hylands Law Firm said he and his friends are thinking more seriously
about moving abroad
The smog had a big impact because it feels really bad if you cant breathe freely he said
The environment used to take a back seat among the Chinese But as they get richer they are
traveling abroad more making the pollution back home more obvious The Internet also
contributes Blue-sky pictures posted on social networks by Chinese travelers abroad constantly
remind folks of what is lacking at home and Chinese now use various apps to track air-quality data
If Shanghais smog discourages smart financial professionals from wanting to live there that will
hinder Chinas effort to create a global financial center If businesses such as financial companies
and luxury-goods makers perceive that Chinas elites are spending more time outside their home
country they will be less willing to invest in China
Most rich Chinese havent packed their bags and left yet but they are keeping their options open
Relocation is a big decision said Anne Wang who works in the financial industry in Shanghai But
just in case she recently received a US visa that would allow her to live there
Source Wall Street Journal
POLITICS
MINERALS POLICY ENTERS FINAL DISCUSSIONS
The government published a final draft of Mongolialsquos State Policy on the Minerals Sector for 2013
through 2025
The document was first presented to Parliament in July and is now entering final discussions during
the autumn plenary session of Parliament following a 42 percent drop of foreign investment and 23
percent fall in the currency year-on-year
―We have reviewed the proposed State Policy on the Mineral Sector which we feel will be a
positive step forward if passed said the Source ―The passing of this policy will result in more
transparency and an increasing participation from foreign investors That said it will take time for
these feats to be accomplished Investors will be weary of Government promises as they seek
longevity to prove Government intentions
The proposed policy is divided into four main sections rationale principles main policy and
implementation-results The major points stressed in the policy include transparency and
responsible mining The law sends the message that growth is going to be driven by private sector
participation and the intent to provide a stable investment environment technological innovation
and value-added activities
Key priorities of the law since it was first unveiled include stability of taxation and the legal
environment an end to any discrimination between foreign and national investors and the
preservation of strategic resources and deposits
This most recent version saw the inclusion of a new section supporting development of local areas
and the interests of local citizens Other key elements include explorationmdashwhich would see
greater government regulation for strategic mineral deposits while cutting down bureaucracy and
conducting scientific researchmdashproduction support and local support The new document also
highlights greater support for non-governmental organizations for the environment allowing them
to claim damages from mining operations the establishment of funds to support economic
diversification environmental protections and land rehabilitation
The new draft has removed the risk assessment section and replaced it with a section on
implementation This includes the improvement of the legal environment and producing of relevant
regulations programs and projects for 2013 to 2015 followed by the implementation of programs
and projects from 2014 to 2025 and finally the provision of conclusions on midterm policy
implementation and further planning for up to 2020 and 2025
―We believe that this policy will take us one step closer to attracting investors and supporting
private sector development in Mongolia said the Source ―Despite current investor hesitation this
state policy in addition to the new amended Minerals Law set to pass next year will further
encourage investors to enter the market and will build support for the junior mining community
Source Mongolian Investment Banking Group
PARLIAMENT UNANIMOUSLY BACKS ldquoSMART GOVERNMENTrdquo INITIATIVE
Parliament has unanimously backed President Tsakhia Elbegdorjs ―From Big Government to Smart
Government initiative for government reform concepts having signed a joint statement of support
on 13 December
The joint statement gives full support to the presidents initiative and commits to cooperation for
its undertaking This includes support for enhancing government systems and policies in line with
democracy and a market economy improving the capacities of public services and curtailing
government intervention into private business affairs Also included are protections to private
business including establishing government structures for rule of law support to domestic
industries and honoring contracts The fight against corruption is another main perogative
On 16 November 16 the Office of the President of Mongolia organized a national consultative
meeting on this topic at the Government Palace Elbegdorj next met with members of the
Parliament on 9 December to organize an open dialogue with representatives of Parliament for an
appeal for them to sign the joint statement Reaffirming the commitment of the Mongolian
lawmakers to a breakthrough reform of the Government the leaders of party floors and factions in
the Parliament and independent members of the Parliament signed the document for the reform on
December 13 2013
Source Montsame
GOVERNMENT CALLS TO END PRACTICE OF APPOINTING MPS AS MINISTERS
The coalition government has thrown their support behind President Tsakhia Elbegdorjs proposal to
prohibit Parliament members from serving as cabinet ministers
Democratic Party members discussed a draft resolution and proposed amendments submitted by the
president for the new restriction at a party meeting on Monday The draft amendments were
unanimously backed by the faction The Justice Coalition which includes the Monglian Peoples
Revolutionary Party and Mongolian Democratic Party came to the same conclusion following its own
meeting said coalition head N Battsereg on Monday
Source Montsame
COMMITTEE LEADERS TO BE ELECTED THIS MONTH
The coalition government will soon be electing officials to lead the various committees in
government
Parliament has 8 standing committees to elect leaders to this month with each committee to be
led by a representative of the coalition government Current committee heads are Ts Tsolmon at
the Security and Foreign Policy Committee G Bayarsaikhan at the Environment Food and
Agriculture Committee Z Bayanselenge at the Social Policy Education Culture and Science
Committee R Burmaa at the Petition and Requests Committee A Bakei at the State Structural
Committee Ts Davaasuren at the Budget Committee Sh Tuvdendorj at the Legislation
Committee and B Garamgaibaatar at the Economic Committee
Source Zuunii Medee
FOREIGN CURRENCY PAYMENTS BANNED FOR MININGEXPLORATION LICENSING FEES
The Ministry of Finance has banned the use of foreign currencies to pay for mining and exploration
licensing fees to the Mineral Resources Authority beginning 1 January 2014
The Ministry of Finance has prompted these entities and companies holding licenses to comply with
Mongolian currency law that states that all businesses and agencies must do business in Mongolian
tugrug According to the 2009 law transactions must not be carried out in foreign denominated or
foreign currency based rates
Source Newsmn
MINING MINISTRY TO COOPERATE WITH ASSOCIATION OF FLUORSPAR EXPLORERS
The Ministry of Mining Wednesday established a memorandum of mutual understanding with the
Association of Fluorspar Explorers (AFE) to cooperate in augmenting the countrylsquos export
In addition to expanding export goals include developing transparent and responsible mining
improving qualities and standards of fluorspar metallurgy and flotation concentrate and in
increasing the production output of the minerallsquos ore enrichment The hope is the memorandum
will create a launching point for a national program for fluorspar its exploitation increase the
volume of production by intensifying research and increase competitiveness in international
markets It will also be necessary to introduce the latest technology to the country along with
running joint trainings with foreign NGOs the Ministry said
Source Montsame
DP REJECTS AMARJARGAL‟S RESIGNATION
Parliament voted against MP R Amarjargallsquos resignation request on 12 December
During Tuesdaylsquos meeting the majority of the Standing Committee on State Structure voted against
Amarjargal`s resignation The head of the Democratic Party (DP) caucus D Erdenebat took a
strong stance against letting Amarjargal leave
Amarjargal said he wanted to resign to take responsibility on behalf of his party members for the
current political situation and economic restraints in Mongolia DP members agree with his
conclusion but encourage him to make the effort and participate for social change and
development Members of the opposition Mongolian Peoplelsquos Party members said that Amarjargal
could see the problems and nature of the majority of Parliament and praised his plan to resign
Source Newsmn
MPP HEAD TO STEP DOWN
Mongolian People Party (MPP) Head N Enkhbold has requested his resignation as party leader
MPP Deputy Head D Oyunkhorol said 9 December that Enkhbold submitted his request to step down
during a party meeting Oyunkhorol said Enkhboldlsquos resignation was due to personal reasons The
new party head will be appointed by the MPPs governing board
Source Udriin Sonin
FIFTH ROUND OF NEGOTIATIONS FOR THE JAPAN-MONGOLIA ECONOMIC PARTNERSHIP
AGREEMENT
The fifth round of the negotiations for the Japan-Mongolia Economic Partnership Agreement (EPA)
will be held from 16 to 19 December in Ulaanbaatar
The Japanese delegation will be led by Jun Yokota ambassador in charge of economic diplomacy
and the Mongolian delegation will be led by Ochirbat Chuluunbat vice minister for economic
development Experts from relevant ministries and agencies of both sides will participate in the
meetings
In this round negotiations are in areas including trade in goods and investment
Source 4-Traderscom
FIRST MONGOLIA-CHINA JOINT BORDER COMMISSION MEETING IN BEIJING
The very first meeting of Mongolia-China joint commission of borders took place 11 and 12
December in Beijing China
This meeting was co-chaired by T Togsbilguun a director of the Department of Neighbour
Countries of Mongolialsquos Ministry of Foreign Affairs and by Xiao Jiangguo a representative of border
checkpoint and seaport affairs Both sides shared on ideas for implementation of the
intergovernmental contract on the border regime and reached some agreements on conducting a
joint examination in the border signs and on activating the collaboration in law enforcement around
frontier areas After this they discussed issues of developing border checkpoints at a same level
putting some border checkpoints into a permanent regime giving an international status to four
checkpoints
The gathered also made a protocol on their meeting and inked its results The next meeting will run
in 2014 in Ulaanbaatar
Source Montsame
BELARUS TO OPEN EMBASSY IN MONGOLIA IN 2014
Belarus will open its embassy in Mongolia in 2014 reads a resolution from the Belarus Council of
Ministers of the Republic of Belarus from 12 December 2013 Belaruslsquo Finance Ministry will finance
the costs of opening and maintaining Belarusian Embassy in Mongolia from the funds set aside in its
national budget for the opening and maintenance of diplomatic missions and consular missions of
the Republic of Belarus abroad
Source Belarusian Telegraph Agency
HOWELL NEW JERSEY USA BECOMES SISTER CITY OF SUKHBAATAR DISTRICT
The Howell Township and the Sukhbaatar district in Mongolia signed a memorandum of
understanding to create sister citieslsquo between Howell New Jersey USA and the Sukhbaatar District
on Tuesday
The program was aimed at opening up talks on how each can benefit from one another Mayor
William Gatto said Howell Township is a very diverse city and theyve taken the relationship with
the Kalmyk community here in Howell and expanded it to a country where they have had no
relationship in the past he said
The sister citieslsquo program will allow both Mongolia and Howell to exchange ideas and come up
with new and better ways to do things that benefits both cultures Outside of Mongolia Howell has
the largest population of Kalmyks in the world with many living in the Freewood Acres section of
the township Gatto said
Some of the goals of the agreement include promoting a common prosperity and development for
both parties an electronic pen-pal program and education opportunities for exchange students
Through a translator Baljinnyam Gan-erdene of the Citizens Representatives Council of Sukhbaatar
District said he came to Howell to see how democracy works in the United States
Im really glad and hope that this unforgettable and successful visit opens the door to our
friendship and prosperity between our residents Gan-erdene said
Gatto gave Gan-erdene a Howell flag and a throw blanket created by the Historical Society
depicting the history of the township Gan-erdene also gave Gatto several items including a bronze
piece of art
Source NJcom
MONGOLIAN CALLIGRAPHY ADDED TO UNESCO CULTURAL HERITAGE LIST
State Parties at the 8th Session of the Intergovernmental Committee for the Safeguarding of the
Intangible Cultural Heritage in Azerbaijan unanimously agreed to register Mongolian calligraphy as
an intangible cultural heritage in need of urgent safeguarding on 2 December
―Mongolian heritage calligraphy is now being recognized by the world and I am grateful on behalf
of my country for decision makers said Secretary-General of Mongolian National Commission for
UNESCO Gundegmaa Jargalsaikhan He noted that Mongolian calligraphy was the fifth cultural
heritage item of Mongolia to be listed and now stands among the Mongolian epic traditional folk
dance the traditional music Tsuur and a circular breathing technique
Mongolian calligraphy is a 1000-year-old writing system that vertically connects continuous strokes
together to create a word Letters of Mongolian script have been created and taught by nomads
from generation to generation During the 1937-1940 purges of the Soviet era thousands of tutors
and traditional scholars of the script were killed Those who remained alive were banned from
mentoring the younger generation Soon after that or around 1946 a new Cyrillic script was
adopted as the only eligible script therefore banning all the teachings of old Mongolian script and
Latin lettering Only in the 1970s was the old Mongolian script re-introduced to scholars allowing a
limited number of classes in universities
After the 1990 democratic changes along with the revival of Mongolian identity interest in
traditional calligraphy reawakened As a sign of such revival the very first non-communist political
organization the Democratic Union of Mongolia used folded calligraphy as its main logo
Source Info Mongolia
THOUGH IMPROVING MONGOLIA STILL REELING UNDER CORRUPTION
The third joint survey by the Asia Foundation and Sant Maral Foundation to gather data on the
perception of corruption in Mongolia revealed that efforts to curb corruption in what is considered
as one of the worldlsquos most corrupt countries could be having impact
The survey shows a significant drop in the percentage of respondents who believe corruption has
increased in the last three years from 389 percent in November 2012 to 183 percent currently In
contrast in 2006 a majority of respondents (63) indicated that corruption has increased ―a lot in
the last three years The survey also shows that corruption has declined in importance as a critical
social problem since 2006 Despite these positive signs overall respondents indicated that
corruption remains a serious issue in some specific key areas
Conducted in September of this year the survey featured face-to-face interviews in 1360
households across Mongolia including seven districts in Ulaanbaatar and 21 counties in six
provinces A majority (766) cited that widespread corruption in the law enforcement agencies is
one of the main reasons the government has been unable to tackle corruption effectively When
corruption is perceived to be this widespread the attention will obviously turn to the performance
of the apex anti-corruption body the Independent Authority Against Corruption (IAAC) The survey
shows that the IAAC is slowly but surely beginning to gain confidence among citizens The
percentage of those surveyed who think that its performance is ―good or ―very good increased
from 78 percent in March 2010 to 203 percent in March 2013 In September 2013 the result shows
a new high of 294 percent
Peoplelsquos perceptions on corruption are often shaped by personal experiences Although very few
respondents in the survey said that they had actually paid a bribe themselves (8 percent about a 3
percent drop from 2012 and an 18 percent drop since 2006) as noted before many are not willing
to report instances where they are asked for one Similarly 36 percent of respondents said they
would not pay a bribe but 26 percent indicated that they would pay if they had the financial
capability
Basanta Pokharel is The Asia Foundation‟s chief of party for the STAGE program in Mongolia He
can be reached at basantapokharelasiafoundationorg The views and opinions expressed here
are those of the individual author and not those of The Asia Foundation
Source Asia Foundation
MPP DEMANDS DISMISSAL OF MINISTERS
Mongolian Peoplelsquos Party Chairman N Enkhbold and party head S Byambatsogt submitted to the
Speaker a request for the dismissal Minister of Finance Chultem Ulaan and of Economic
Development Minister Nyamjav ―Fortuna Batbayar
Our faction believes that these ministers must be held responsible for the worsening of the
national economic situation We also intend to do the same with other ministers after hearing
opinions of people said Byambatsogt
Source Montsame
FORMER TAVAN TOLGOI JSC DIRECTOR ARRESTED
The Independent Agency Against Corruption arrested former Tavan Tolgoi JSC director Kh
Tumenbayar for undisclosed reasons
An unnamed official source suggested that the arrest may be related to abuses of power and
payments to political parties as well as the construction of a high-class hotel in Dalanzadgad Soum
Umnugobi Aimag Kh Tumenbayar is a member of the Democratic Party a member of Parliament
and is an associate of ―Ajnai Bat-Erdene the Minister of Defense who helped Tumenbayar attain
position as the director of Tavan Tolgoi for 6 years and rise to head of the Umnugobi Aimag Citizens
Council
Tumenbayar voluntarily resigned from his position at Tavan Tolgoi last month The IAAC has
reportedly not given details to the reasons for the investigation opened on Tumenbayar because of
possible connections to high-ranking officials
Source Unuudur
MONGOLIA TURKMENISTAN JOIN INTERNATIONAL RACING FEDERATION
The International Federation of Horseracing Authorities (IFHA) has welcomed racing organizations
from Mongolia and Turkmenistan as affiliate members
Recent ratification to IFHA statutes at its annual General Assembly in October created a new
affiliate membership category within the Federation Thus the Federation of Mongolia Horse Racing
Sport and Trainers and the Turkmen Atlary State Association by unanimous vote of the IFHA
Executive Council in Paris in October have become the IFHAlsquos first two affiliate members
The Federation of Mongolian Horse Racing Sport and Trainers (FMHRST) is a non-governmental
organization (NGO) which serves to the development of equestrian sport in Mongolia and works to
protect the rights of horsemen who specialize in this national sport The new affiliates were
announced by IFHA Chairman Louis Romanet this week and several key appointments to IFHA
executive office positions and committees have also been made
Source Horse Talk
MONGOL TV HEAD MEDIA CAN HELP FIX THE BIG PROBLEMS
Nomin Chinbat head of Mongol TV has grander intentions than just ridding the countrys television
business of rampant pirated content and unlicensed formats The young executive wants to help
clean up Mongolian politics and the nation by creating a free and open media
―The networks are used as propaganda channels for politicians They are used very effectively every
four years at election time says Chinbat whom the Source named one of the 25 Most Powerful
Women in Global TV at MIPCOM 2013
―There are laws against piracy but they arenlsquot implemented explains Chinbat who says that
politicians in the country of roughly three million wonlsquot challenge journalists because their
relationships with them are too cozy
Mongol TV has invested in original programming licenses all of its imported content and runs
investigative journalism features highlighting social problems such as alcoholism and corruption
The company is organizing a Mongol TV Day for February 2014 to which it has invited major
international studios to raise awareness of the issues and introduce the global industry to
Mongolia Britainlsquos ITV and Americalsquos CBS are already confirmed and negotiations are ongoing with
other attendees The situation has improved in recent years with some channels having become
what Chinbat calls ―hybrids which license some sports rights but then steal others and copy
formats
―These days some of these channels might license 25 episodes of a format and make 50 But this is
actually progress says Chinbat
Chinbat and her team were at the Asian Television Forum (ATF) in Singapore looking for new
formats that can be produced within the constraints of Mongolian television budgets However with
Mongolias young populationmdash65 percent of the country is under 35 years oldmdashmobile viewing is on
the rise and the network is already working second-screen utilization and new media applications
This demographic sweet spot should guarantee strong growth in the population economy and
nascent entertainment sector in Mongolia in the coming decades
Source Hollywood Reporter
ANNOUNCEMENTS
ldquoMM TODAYrdquo ON MNB-TV FRIDAY 1900 TO 1910
BCM is pleased to announce that Mongolian National Broadcasting continues its cooperation with
BCM on ―MM Today This English news program is aired every Friday for 10 minutes and is
scheduled from 1900 to 1910 tonight Tune in to watch this program that reports stories from
todaylsquos BCM NewsWire
BCM WEBSITES
MONGOLIAN WEBSITE bdquoPRESENTATIONS‟ AND bdquoNEWS‟ SECTIONS
The Presentationslsquo section on BCMlsquos Mongolian website can be reached via bcmmnitgeluud
As a key component of BCMlsquos Mongolian website articles from the Newslsquo section and the
government website Open-Governmentmn are regularly updated
S Oyun Minister of Environment and Green Development presentation at BCM monthly meeting on
May 27 added to Mongolian website bcmongoliaorgmnилтгэлүүд
- Байгаль орчин ногоон хөгжлийн сайд СОюун Байгаль орчин ногоон хөгжлийн шинэчлэлийн
бодлого үйл ажиллагаа МБЗ-ийн сарын уулзалт 5 сарын 27 2013
___________________________________________
ENGLISH WEBSITE PRESENTATIONS MONGOLIA REPORTS bdquoINTERVIEWSbdquo MONGOLIAN
BUSINESS NEWS‟ bdquoPHOTO GALLERY‟
The following 13 presentations are from the Mongolia Investment Summit- 2013 in Hong Kong
November 18-20
- Regulatory Update Navigating Mongolialsquos legal framework for foreign direct investment
Javkhlanbaatar Sereeter Director General Foreign Investment Regulations and Registration
Department MINISTRY OF ECONOMIC DEVELOPMENT OF MONGOLIA
- Investment keynote Investing into Mongolia in 2013 ndash Where do the opportunities lie James
Passin Co-Founder and Manager FIREBIRD MONGOLIA FUND
- Development keynote Key challenges and opportunities for continued growth in Mongolia
Randolph Koppa President TRADE AND DEVELOPMENT BANK OF MONGOLIA
- Outlining government policies and long-term plans for Mongolialsquos mining sector Amarjargal
Khurelbat Head of International Cooperation Division MINISTRY OF MINING OF MONGOLIA
- From copper to met coal Demand and price outlook and expected impact on Mongolialsquos economy
Ghee Peh Managing Director Metals and Mining Research UBS SECURITIES ASIA
- How Mongolian banks and financial institutions are dealing with the challenges and opportunities
of a fast growing economy Norihiko Kato Chief Executive Officer KHAN BANK
- Update on the Mongolian stock market ndash Impact of the new Securities Law Altai Khangai Chief
Executive Officer MONGOLIAN STOCK EXCHANGE
- From investment banking to trade finance to micro credits to insurance Amartuvshin Hanibal
Managing Director TENGER FINANCIAL GROUP LLC
- Spotlight presentations Showcasing Mongolian investment opportunities Peter Morrow Board
Director ASIA PACIFIC INVESTMENT PARTNERS
- Spotlight presentation Showcasing Mongolian investment opportunities Munkhbat Davaatseren
CEO of Golomt Securities GOLOMT BANK
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources
Batmunkh Batkhuu Chairman SHARYN GOL JSC
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources
Jimmie Wilde Chief Operating Officer BERKH UUL JSC
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources Mona
Forster Executive VP ENTREacuteE GOLD INC
The following two presentations are from the ―ANTI-CORRUPTION LEGISLATIONPOLICY
INTERNATIONAL BEST PRACTICE ON TRANSPARENCY training seminar for businesses in
Ulaanbaatar November 18 2013
-―International business standard on transparency by Jelena Pesic Director PwC
-―Finlandlsquos best practice on transparency and anti corruption by Dr Pekka Hallberg (as it is
worldlsquos number one) Emeritus President of the Supreme Administrative Court of Finland
The following 15 presentations are from the Mongolia Mining Summit Perth Australia October 29-
31 2013
bull Mongolialsquos Minerals Future and Development by Otgochuluu Ch Director General Department of
strategic policy and planning at Ministry of Mining Mongolia at the Mongolian Mining Summit 2013
Perth Australia Oct 29-31 2013
bull Mongolian Economy Investment OpportunitiesChallenges Jim Dwyer Executive Director
Business Council of Mongolia at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31
2013
bull Oyu Tolgoi Lessons from the Gobi Houston Spencer Vice President Communications and Media
Relations Oyu Tolgoi at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Market dynamics for Mongolian coking coal in the Chinese market Graeme Hancock President
and Chief Representative at Anglo American Mongolia at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Speech by Mr Ariunbold Byamba Deputy Director Erdenes MGL LLC at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull Launching Mining Projects in MongoliandashA Major Contractorlsquos Perspective Eric Erdenebat
Tseveendorj Country Manager Orica Limited at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Investing in a dynamic legislative environment Elisabeth Ellis Managing Partner Ulaanbaatar
Minter Ellison at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Sandvik In Pit Crushing amp Conveying (IPCC) Doug Turnbull Principal Mining Engineer Sandvik
Mining Systems at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Ovoot Coking Coal Project David Paull Managing Director Aspire Mining at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull The business of being a third neighbor David Landers General Manager East Asian Growth
Markets at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Nuurst Thermal Coal Project Daniel Rohr Chief Financial Officer Modun Resources Ltd at the
Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Culture matters in building sustainable long-term business relationships Hana Tserenkhand
Byambadash Business Development Consultant AusMon Consulting and Dr Christine Hogan Adjunct
Professor Curtin University Consultant amp Author at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Maximizing Business Benefits from Your IT Investment Brad Skeggs Executive Director COSOL at
the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Presentation by Battsengel Gotov CEO Mongolian Mining Corporation at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull Mongolian Mining Sector Present and Future Developments NAlgaa Executive Director
Mongolian National Mining Association at the Mongolian Mining Summit 2013 Perth Australia Oct
29-31 2013
The ―Mongolia Reports section includes the following
- ―Ministry of Finance of Mongolia 2013 Government Debt Auctions by Bank of Mongolia
- ―Doing Business in Mongolia 2013 Country Commercial Guide for US Companies by US
Embassy
- ―Real Estate Report 2013 by Mongolian Properties
- ―Selected Macroeconomic Indicators November 20 2013 by International Monetary Fund
- ―2013 Second Annual Mongolian CEO Survey from PricewaterhouseCoopers Audit LLC
- ―Selected Macroeconomic Indicators data through October 16 2013 by International Monetary
Fund
- ―IMF Completes 2013 Article IV Mission to Mongolia by International Monetary Fund
The following are added to Interview Section from the Oxford Business Group Mongolia Reports
2013 book
bull B Byambasaikhan Chairman Business Council of Mongolia ―Talk is cheap
bull President Ts Elbegdorj ―Diversifying for growth
bull Jim Dwyer Executive Director Business Council of Mongolia ―Non-mining sectors budding
bull Peter Morrow Chairman American University of Mongolia ―Filling in the blanks
bull N Zoljargal Governor Bank of Mongolia ―Sustainable vision
bull Gansukh Minister of Roads and Transportation ―Accessing new markets
bull J Od President MCS Group ―Building interest
bull B Chuluunbaatar President and CEO of Monnis Group ―Climbing the ranks
bull Cameron McRae President and CEO Oyu Tolgoi ―Sitting on a copper mine
BCMs English website includes the ―Mongolia Business News section where the Open Letter to
Parliament and Government is available for download
BCM continuously posts news stories and analysis of relevance to Mongolia at Mongolian Business
News before they are all put together each week for Fridays weekly NewsWire
The ―Photo Gallery contains photos from the 6th Anniversary BCM Renewal dinner on November
11 2013
BCM Football Cup 2013 pictures are posted to the website - httpbcmongoliaorgenphotos350-
enalbumalbumid=200
The BCM NewsWire will continue to be issued each Friday incorporating items already on the home
page for a consolidated account of the weeklsquos events
SOCIAL NETWORK WITH BCM
BCM LAUNCHES NEW LINKED-IN COMPANY PAGE
The Business Council of Mongolia has launched a new company page on the social networking
website LinkedIn to network its members and followers including small-medium enterprises (SMEs)
The new page will allow BCM to alert followers to the latest news and information critical to their
businesses Memberslsquo businesses will be promoted Additionally BCM plans to deliver monthly
infographics on the latest data as well as videos and other media content as they come The bulk of
the content on the new page will be in Mongolian language to better cater to BCMs Mongolian-
speaking audience and members The following link can direct you to the New BCMs Linked-in page
httpwwwlinkedincomcompanybusiness-council-of-mongoliatrk=company_logo
The Business Council of Mongolia (BCM) has expanded its reach to your favorite social networks
Keep up to date on the latest business deals in Mongolia and how the climate for investment is
improving each day with BCM
Add BCM on Facebook at httpswwwfacebookcomTheBusinessCouncilOfMongolia to read the
latest announcements and comment on events carried in the NewsWire with the community
Hear breaking news and announcements as they happen when you follow BCM on Twitter at
httpstwittercombcmongolia
We have now 2482 fans on our Facebook fans page 1527 connections on LinkedIn network and
835 followers on Twitter
Of course for news information interviews event photos and announcements regarding our
organization visit the official BCM website at httpbcmongoliaorgen
ECONOMIC INDICATORS
INFLATION
Year 2006 60 [source National Statistical Office of Mongolia (NSOM)]
Year 2007 151 [source NSOM]
Year 2008 221 [source NSOM]
Year 2009 42 [source NSOM]
Year 2010 130 [source NSOM]
Year 2011 102 [source NSOM]
November 30 2013 120 [source NSOM]
Year-over-year (y-o-y) nationwide
Note 111 y-o-y Ulaanbaatar city November 30 2013
CENTRAL BANK POLICY LOAN RATE
December 31 2008 975 [source IMF]
March 11 2009 1400 [source IMF]
May 12 2009 1275 [source IMF]
June 12 2009 1150 [source IMF]
September 30 2009 1000 [source IMF]
May 12 2010 1100 [source IMF]
April 28 2011 1150 [source IMF]
August 25 2011 1175 [source IMF]
October 25 2011 1225 [source IMF]
March 19 2012 1275 [source Mongol Bank]
April 18 2012 1325 [source Mongol Bank]
January 25 2013 1250 [source Mongol Bank]
April 8 2013 1150 [source Mongol Bank]
June 25 2013 1050 [source Mongol Bank]
CURRENCY RATES ndash DECEMBER 19 2013
Currency Name Currency Rate
US dollar USD 164138
Euro EUR 224680
Japanese yen JPY 1579
British pound GBP 268874
Hong Kong dollar HKD 21170
Chinese Yuan CNY 27031
Russian Ruble RUB 4981
South Korean won KRW 155
Disclaimer Except for reporting on BCMlsquos activities all information in the BCM NewsWire is
selected from various news sources Opinions are those of the respective news sources
South Africas Standard Bank putting up the Erdenet Mine as collateral for the credit After Just
Group was dissolved the central bank took over all its assets including Just Agro
Source Unuudur
MONGOL TV EXPOSES MEDIA CORRUPTION WITH FAKE MCDONALDS STORY
An investigative news show on Mongol TV planted a false news story last week with all 9 of
Mongolias major local media outlets about McDonalds opening a branch in the country The
exercise was undertaken to expose corruption and the rampant practice of paid-for journalism in
Mongolia Mongol TV said
The appearance of a Mr P Rank promising McMutton burgers and goat milk-shakes in the
official press release set off no alarms at the media networks which took between USD 150 and
USD 700 from an undercover journalist to run the story on their websites on the front page of three
newspapers and on TV news on three networks including the local public broadcaster
―Soon the first letter our children learn will be Mlsquo Mr P Rank says with a golden shining smile
according to the fake release which also claimed McDonalds was to be sponsored by Mongolialsquos
Health Ministry and sold in schools all over the country
After Mongol TV unveiled the sting it invited representatives of the 9 duped media organizations to
explain their actions though all reportedly declined
Source Hollywood Reporter
EBRD ADOPTS NEW STRATEGY FOR ENERGY AND NATURAL RESOURCES SECTOR
The European Bank for Reconstruction and Development (EBRD) has adopted a new strategy that
will guide its investments in the energy and natural resources sector for the next five years EBRD
press release reported Tuesday
The bank sets out a commitment to helping its countries of operations move toward a sustainable
energy future The EBRD region which stretches from Morocco to Mongolia is faced with a
challenge of providing sustainable secure and affordable energy The energy strategy identifies
energy efficiency as the first and best response to this challenge
―What the EBRD brings to this challenge is our focus on structural reform said EBRD Managing
Director for Energy and Natural Resources Riccardo Puliti ―We have learnt from our work that
when properly channeled market forces can be harnessed to make energy sectors more sustainable
- environmentally economically and politically
The bank intends building on its well-established support for the Extractive Industries Transparency
Initiative by requiring clients operating in the extractive industries sector to disclose subsoil
contracts and licenses as well as all payments they make to local and national authorities
In the case of coal-fired generation the strategy supports the move to lower-carbon fuel sources in
response to the challenge of climate change In alignment with other international financial
institutions the EBRD will not finance any coal-fired power generation projects except in rare and
exceptional circumstances in which there is no feasible alternative energy source
The strategy also reinforces the EBRDs growing support for renewable energy which will include
financing both energy-generating capacity and key infrastructure such as transmission lines and
backup generation
―We have also developed and invested in the first wind farm in Mongolia - where it was also the
first new energy generator in 30 years said Puliti
Source Trend News Agency
SUSTAINABILITY HOSTS SESA WORKSHOP
Sustainability East Asia LLC organized a National Validation Workshop on 10 December as part of its
responsibilities for establishing a strategic environment and social assessment (SESA)
Participants from across the country arrived to represent government the private sector and non-
government organizations to discuss the proposed SESA The next step will be to assess mining
growth options and identify at least three likely growth scenarios which mining could bring to
Mongolia Afterward the SESA team will evaluate the environmental and social issues that are likely
to arise as a consequence of each scenario
The Mining Sector Institutional Strengthening Technical Assistance Project commissioned
Sustainability to conduct a strategic environmental and social assessment for Mongolias mining
sector
Sustainability will also perform a gap analysis of the legal regulatory and institutional capacity to
deal with each possible scenario An action plan is expected for SESA by summer 2014
Source Sustainability East Asia LLC
UB REGISTERS MATERNITY HOSPITAL NO 1
The new building annex for Maternity Hospital No 1 was registered as capital city property
13 December at a regular session of the Ulaanbaatar Citizens Council This maternity hospital
building was built with financing from Boroo Gold and was presented as a gift to the people of
Mongolia With a capacity to receive 150 mothers and children its total cost was MNT 92 billion It
includes the hospital building of 1169 square meters external heating clean water and sewer
water pipelines a diesel station an asphalt road a pedestrian walkway outdoor vegetation and an
external LED sign
This new building was commissioned 15 June The new annex has one vacuum operation room and
two standard operating rooms on the fifth floor 100 beds for women and 50 beds for infants on the
third and fourth floors paraclinical and sanitation units a pharmacy a conference room and
training rooms on the second floor an ambulatory section and reception on the first floor and staff
cafeteria closets washrooms and a disinfection chamber in the basement
Source Centerra Gold Inc Newsmn
RIO TINTO‟S SAM WALSH DIGS IN FOR THE LONG HAUL
Sam Walsh wants to remain as Rio Tinto PLClsquos chief executive beyond the end of his contract and
has told the minerlsquos board he will not be ready to retire in 2015
―I am there if they want me said Walsh ―Likewise if therelsquos someone else who can come in and
take what Ilsquove done to the next level thatlsquos fine too
The Australian 63 later this month replaced Tom Albanese 11 months ago after Rio decried
―unacceptable writedowns on its coal business in Mozambique Walsh says investors support his
strategy to cut costs and sell non-core assets
Walsh said he has explored selling all of Riolsquos aluminum business this year in what would be a
signature reversal of Albaneselsquos costly purchase of Alcan in 2007 But he says no offers have been
good enough while the business is not generating enough cash for an initial public share offering or
spin-off to Riolsquos shareholders Walsh has also been frustrated in attempts to sell Riolsquos diamonds
business
―Who would thank me if I sold something under value just to get a tick At the end of the day you
have to be pragmatic about things he said Offers ―werenlsquot in the bailiwick of where we thought
they should be
The Alcan deal epitomized Riolsquos poor recent dealmaking and Walsh admits the company had
―relaxed some of the controls it should have had Rio staff has now ―refound their mojo he said
On operating costs which Rio has said it will cut USD 3 billion next year he said ―There is rolling
momentum and thatlsquos important
Source Financial Times
KYRGYZSTAN FILES ECOLOGY DAMAGE LAWSUIT AGAINST CENTERRA
Kyrgyzstan is suing Canadas Centerra Gold Inc for 15 billion soms (USD 304 million) over what the
government says is ecological damage marking a new twist in a bitter row with the investor running
the largest Kyrgyz gold mine
The state environmental protection and forestry agency said in a statement that it had filed the
lawsuit at an economic court in the Kyrgyz capital Bishkek saying Centerra Gold had ignored its
earlier request for voluntary compensation It said the alleged ecological damage included
emissions of pollutants and waste dumps It said its claim referred to the companys operations
between 1996 and 2011
Centerra had said earlier that it viewed the governments claim as exaggerated and unfounded
The company disagrees with these charges and plans to give explanations on this matter in the
nearest time said a spokesman for the Kumtor Operating Company (KOC) the Centerra subsidiary
that runs the Kumtor mine in the Tien Shan mountains
The Toronto-listed miner which also owns the Boroo gold mine in Mongolia is already under
pressure from the Kyrgyz parliament which demands the state hold 67 percent in a proposed joint
venture to run the mine In September the government and Centerra Gold signed a memorandum
of understanding paving the way for Kyrgyzstan to swap its 327 percent stake in the Canadian firm
for 50 percent in a venture that would own Kumtor But in October the legislature voted to tear up
the document and seek control over the planned venture It gave the cabinet until 23 December to
report on its talks with Centerra Gold on setting up the venture Pearson said Centerra is having
constructive dialogue with the Kyrgyz government
Source Reuters
ECONOMY
FITCH AFFIRMS TWO MONGOLIAN BANKS AT B REVISES OUTLOOKS TO bdquoNEGATIVE‟
Fitch Ratings on 16 December revised the outlook on the Long-Term Issuer Default Ratings (IDRs) of
Khan Bank LLC and XacBank LLC to ―Negative from ―Stable At the same time the agency
affirmed the two Mongolian banks IDRs and viability ratings at B and b
The revision of the outlooks on both banks IDRs reflects weakening operating conditions as
indicated by the change in the Outlook for the Mongolian sovereign (B+) to Negative from Stable on
13 December The sovereigns outlook was revised due to mounting risks to the countrys economic
and financial stability Ratings on the two banks could be downgraded if pressures on asset quality
and liquidity intensify Persistent local-currency depreciation would reduce borrowers repayment
capacity and could lead to accelerated deposit withdrawals given the countrys high level of
dollarization
The banks ratings also remain sensitive to the withdrawal of credit stimulus as this could result in
asset deterioration on slowing economic growth or higher inflation Further decline in the
governments international reserves could also trigger a negative rating action as the banks
currency-related risk is counterbalanced by the authorities swap facility and unlimited foreign-
currency conversion Both banks ratings are also sensitive to any changes in their steady access to
capital from private-sector owners
Khan Banks Support Rating and Support Rating Floor (SRF) reflect Fitchs view that as the largest
bank in Mongolia it would be likely to receive state support in case of need However the
Mongolian sovereigns ability to provide timely support to the banking system remains limited as
underlined by its IDR of B+ A downgrade of the sovereign ratings would point to weakening in the
Mongolian governments ability to provide timely support to the banking system which put negative
rating pressure on Khan Banks SR and SRF In contrast Fitch expects XacBanks SR and SRF of 5B-
to be maintained even if the sovereigns rating is downgraded to B This is because the current SR
and SRF already reflect the agencys view that support from the sovereign in case of need cannot
be relied upon
The rating actions are as follows Khan Bank Long-Term Foreign-Currency IDR affirmed at B
Outlook revised to Negative from Stable Short-Term Foreign-Currency IDR affirmed at B Long-
Term Local-Currency IDR affirmed at B Outlook revised to Negative from Stable Viability Rating
affirmed at b Support Rating affirmed at 4 Support Rating Floor affirmed at B XacBank Long-
Term Foreign-Currency IDR affirmed at B Outlook revised to Negative from Stable Short-Term
Foreign-Currency IDR affirmed at B Long-Term Local-Currency IDR affirmed at B Outlook revised
to Negative from Stable Viability Rating affirmed at b Support Rating affirmed at 5 Support
Rating Floor affirmed at B-
Source Fitch Ratings
MONGOLIA SCORE FALLS ON POLITICAL RISKS INDEX FOR MINING INVESTMENT
An annual survey by Behre Dolbear of political risks saw Mongolia decline 5 points in an index
ranking Mongolia 19th out of 25 countries
Mongolia this year received a score of 269 compared with 32 last year Leading the countries
surveyed was Australia down 07 points from last year Russia with a total score of 171 compared
with 16 last year was the lowest ranking
The 25 countries considered in this yearlsquos survey are ranked based on seven criteria
-the countrylsquos economic system
-the countrylsquos political system
-the degree of social issues affecting mining in the country
-delays in receiving permits due to bureaucratic and other issues
-the degree of corruption prevalent in the country
-the stability of the countrylsquos currency and
-the competitiveness of the countrylsquos tax policy
Each criterion is rated on a qualitative scale from one (worst) to 10 (best) that reflects conditions
that promote investment growth in the mining sector The maximum score attainable for a country
is 70 points
Source Behre Dolbear Group
MONGOLIA LOOKS FOR SECOND CHANCE WITH FOREIGN INVESTORS
Saruul Ganbaatar the deputy head of Mongolias stock exchange hopes the countrys days of
interventionist economic policies are over and new laws ensuring foreign investors access to the
frontier markets industries will bring back sorely needed cash
Ganbaatar 32 who cut his investment teeth in Chicagos financial houses after graduating from
Loyola University is careful not to over-promise on what the stock market can deliver in 2014 and
beyond in terms of new listings or overall growth In October a law was passed easing ownership
restrictions for private companies to invest in the strategic industries A Securities Markets Law
coming into effect 1 January 2014 is expected to provide the key ingredient to attract deep
pocketed institutional investors such as mutual funds to invest
This really is the missing ingredient said Ganbaatar who has been traveling the globe promoting
the changes in the laws to global investors for the past two weeks
The stock index fell 19 percent in 2012 and year-to-date is down 115 percent although it did start
to climb with the newly passed laws On 1 January the new Securities Markets Law will allow
Mongolias commercial banks to offer custodial banking services Custodial banks serve as safeguards
for a firm or individuals financial assets playing a critical role in the final settlement of market
transactions Total market capitalization now is between USD 900 million and USD 1 billion Dont
expect the number of new listings to mushroom There may instead be a cull of companies Fifty-
five to 60 of them many of which have not traded in years are being reviewed for potential
delisting
The Mongolian Stock Exchange 100 percent state-owned is perhaps itself a candidate for
privatization It has been in a strategic partnership with the London Stock Exchange for two and a
half years
They have the right of first refusal he said
Source Reuters
CPI INCREASES TO 12 PERCENT YEAR-OVER-YEAR IN NOVEMBER
The National Statistical Office reported a 12 percent increase in the national consumer price index
(CPI) in November year-over-year
The CPI growth which also in November grew 13 percent from the previous month was explained
by a 14 percent increase in food prices and non-alcoholic beverages 23 percent for clothing
footwear and fabrics and 07 percent for housing water electricity and fuels
Source Info Mongolia
GROWTH SEEN IN EXPORT OF PRECIOUS METALS
The export value of precious metals grew 114 percent in November from the month before and 63
percent from the same period in 2012 according to the National Statistical Office
Exports totaled USD 38 billion in the year to December while imports grew to USD 58 billion The
foreign trade balance saw a deficit of USD 2 billion November saw exports of USD 381 million and
imports of USD 514 million with exports and imports in decline between July and November The
value of export products for the first 11 months was USD 11 billion Despite the gain in precious
metal exports exported minerals which represented 81 percent of all exports in the year to
November fell 129 percent from the year before
Source Zuunii Medee
MNT 788 BILLION WILL BE ENTERED INTO THE STABILIZATION FUND
The Stabilization Fund is set to collect MNT 49 billion this year and MNT 298 billion next
The Stabilization Fund was established to collect surplus revenue in years of economic gains from
the mining sector to cushion possible annual losses during economic downturns and weak
commodity demand Any gain in the price for gold and coal next year will also be reflected in
allotments to the fund
Source Zuunii Medee
ECONOMIC DEVELOPMENT MINISTRY PLANS TO PUT 81 OF BUDGET INTO CONSTRUCTION
The Economic Development Ministry plans to invest MNT 814 percent of its total investment budget
into construction
Beginning 1 January 2014 the ministry will provide MNT 9303 in loans toward the construction
sector The ministry will spend 39 percent of its budget for reconstruction and repair 10 percent
for the purchase of new techniques and technical equipment 3996 percent for infrastructure
2743 percent for education and health 636 percent for employment and agriculture and 2926
percent for other sectors of the economy
Projects include the construction of 30 clinics 27 cultural centers 6831 km of paved roads and
1032 m length of bridges Mongolia has received USD 55 billion in aid in the last two decades of
which 55 percent was in the form of low rate loans and 45 percent as non-repayable grants for
investments into agriculture infrastructure power and health sectors
Economic growth since 2011 has allowed Mongolia less aid than in the past The government has
now turned its focus on providing funding with concession agreements to large scale projects such
as the Nariin Sukhait-Shivee paved road and the power station at Mogoin gol Other projects include
Power Plant No 5 the Altanbulag-Ulaanbaatar-Zamyn Uud highway the Tavan Tolgoi- Khanbogd-
Khangi road and the Tuul Songino water reservoir complex
Source Zuunii Medee
TT POWER PLANT MAY NEED CONCLUSION TO OT DISPUTE SAYS DIRECTOR
Uninterrupted development of the Tavan Tolgoi power plant will ride on the outcome of disputes
concerning Oyu Tolgois underground mine said the director of the plant
―One of the main risks is the issue of a main user Enkhsaikhan said ―The key buyer of the power
from the TT Power Plant is OT Due to the uncertainty over phase twolsquo and unresolved matters
with the government of Mongolia OT is not regarded as a reliable buyer on a stand-alone basis
He added that the power company may request a guarantee from Oyu Tolgoi
A consortium that includes Koreas Posco Energy and Daewoo Engineering and Construction GDF
Suez Energy Asia Japans Marubeni Corp and Kansai Electric Power in March was selected for
development of the plant which has a preliminary estimate cost of USD 1 billion Those expenses
include installation of 150 kilometers of electric lines between Tavan Tolgoi and Oyu Tolgoi The
consortium will be expected to raise 30 percent of the cost itself while the remaining 70 percent
will come from bank loans However the uncertainty surrounding the Oyu Tolgoi copper mine could
create more hold ups
Source Zuunii Medee
CABINET TO CONCLUDE CONCESSION ON ALTANBULAG-ZAMYN UUD HIGHWAY
The Cabinet of Ministers ordered ministers to conclude a concession agreement for the Altanbulag-
Ulaanbaatar-Zamyn-Uud highway
The government is planning to establish the concession contract with the Chinggis Land
Development Group which according to the agreement shall have exclusive rights to construction
ownership and transfer of property using its own financing The concessionaire shall complete the
construction within three years after that shall operate the facility for another 30 years before
transferring the ownership to the Government
If Chinggis Land accepts these terms it would be responsible for developing a feasibility study and
blueprint of the project to be approved by the relevant ministries before concluding a financing
agreement The concession agreement will come into effect after the Chinggis Land Development
Group obtains a financing agreement for USD 1 billion from a commercial bank of Mongolia
The government will be responsible for freeing up the land where the highway is planned while the
Chinggis Land would cover the costs for doing so
Source Montsame
MNT 116 BILLION WILL BE SPENT FOR BUILDING EMERGENCY ALARMS IN UB
The National Emergency Management Agency has installed an emergency alarm system in 60
locations of Ulaanbaatar The alarm will alert citizens to natural disasters such as earthquakes
The alarms will be controlled from a center by microwave radios and satellite communication
devices
Source Udriin Sonin
EIU CLARIFIES EXTENT OF OFFICIAL ESTIMATES OF OIL SHALE RESERVES
The latest research from Mongolias mining ministry gives a clearer picture of oil shales
development potential in the coming years Although Mongolia has long been known to have
substantial oil shale deposits previous estimates were extrapolated from rudimentary surveys
conducted in the 1990s and thus left the actual reserves open to speculation
Plans to develop the industry took shape only in April 2013 when an American company Genie
Energy signed a five-year deal with the Petroleum Authority of Mongolia to explore oil shale
reserves in central Mongolia Genie also plans to build a USD 4 billion processing factory in Tuv
Aimag According to government projections the processing plant will generate USD 850 million of
tax revenue annually Aside from the economic benefits of the project domestic fuel sources could
help Mongolia to improve its energy security by loosening the countrys dependence on its powerful
neighbors At present 90 percent of Mongolias oil and related products come from Russia with most
of the remaining amount being imported from China
Yet the benefits of large-scale oil shale extraction are not as clear as they might seem at first
glance Most importantly Mongolias oil shale resources should not be confused with the shale oil
phenomenon that is currently sweeping the United States Oil shale (also called kerogen) is more
expensive to extract than shale oil and carries greater environmental costs In particular oil shale
requires a large amount of water to process which could be a risky proposition in Mongolia where
hydrological resources are already under strain Although other countriesmdashEstonia in particularmdashuse
oil shale as a substitute for coal extracting liquid fuel from the shale is a complex and relatively
untested process
Genie Energys progress on the project seems more substantial than that of comparable coal
liquefaction projects that have faltered in the region However environmental technical and
political limitations suggest that Mongolias overall dependence on foreign fuel will not change
significantly in the foreseeable future
―We remain doubtful that oil shale will play a significant role in Mongolia in the next two years so
our economic growth and trade forecasts will remain unchanged said the Source
Source Economist Intelligence Unit
MONGOLIA AND THE THREAT OF THE RESOURCE CURSE
Mongolia is at a crossroads while investors complain the government is dragging its feet on allowing
miners to start digging it is crucial that it get things right at the early stages of the resources
boom
Mongolias challenge will soon be the worlds says Richard Dobbs and his team at McKinsey in a
report predicting a USD 17 trillion investment bonanza by 2030 to keep up with demand for oil gas
and other materials In 1995 about 58 countries depended on resources for the bulk of their output
and wealth In 2011 that number had risen to 81 By 2030 roughly half of the worlds economies
will essentially become giant filling stations for developing superpowers from China to South Africa
That means that instead of the world moving toward greater transparency democracy and freer
markets we could see rising corruption levels and even greater income inequality
Economies with natural-resource endowments have a huge opportunity to transform their
prospects but history suggests that they could all too easily squander the windfall says Dobbs
director of the McKinsey Global Institute in London
The world would be wise to take steps today to break this cycle McKinsey recommends several
While not terribly original they include strengthening public institutions and good governance
building decent infrastructure boosting national competitiveness promoting sound fiscal policy
making and spending the windfall wisely while engaging in forward-looking economic and social
planning The trouble is that political will and integrity is often the first casualty once the minerals
start flowing out and the spoils come pouring in
Mongolia is at that very crossroads today Investors complain the government is dragging its feet on
allowing miners to start digging But its more important to get things right at the early stages of
the resources boom That means acting now to create the institutions and regulatory frameworks
needed to ensure revenue transparencymdashknowing exactly how much money is being dug out the
ground and where its going Why not set up a sovereign-wealth fund to save for Mongolias future
When the stakes are that high a little patience can go a long way
Source Bloomberg
MONGOLIAS NOMADS WARM TO SOLAR POWER
In Mongolia often known as the land of the blue skies the sun shines for 250 days on average each
year It beats down on the sparse plains and on the Gobi desert that spans the countrys southern
border with China
It shines even during the frigid winter days on the hundreds of thousands of nomads who still roam
the steppes herding animals and living in dome-like tents calling gers About 800000 of Mongolias
28 million inhabitants still live the traditional nomadic lifestyle that has remained largely
unchanged for generations Apart from the addition of motorbikes the occasional petrol generator
and a passing trade from intrepid tourists wanting to stay in a ger for the night life is almost the
same as that of many nomads grandparents and great-grandparents Almost but not exactly
Dotted across the steppes glints of light can be seen as the sun bounces off the solar panels that
have been installed on the sides of gers made of felt and yaks wool At the start of this millennium
Mongolias herders and nomads had little or no access to modern electric power and its potential
benefits But as of 2013 thanks to a concerted push by the Mongolian government almost 70
percent of nomadic people have access to electricity Bor a herder who mainly travels around
western Mongolias Arkhangai province is one of the people whose family benefits from portable
solar home systems (SHS)
We use it for generating the power for lighting in the ger charging phones we can also generate a
fridge to keep food longer and we can run a television That is very useful for us because we can
get the most recent weather forecast which is important for our work and keeping our animals
safe Before we had power it was very difficult Now it is almost like living in the city
The ability to charge mobile phones is also important for the herders who often have children
staying at boarding schools Access to electricity also allows families to contact emergency health-
care and doctors for advice without having to make the often arduous journey to the nearest village
or town
The solar systems were distributed and installed with the help of the World Bank after the
Mongolian governments National 100000 Solar Ger Electrification Program ran into difficulties A
World Bank report Capturing the Sun in the Land of the Blue Sky describes the difficulties faced by
the Mongolian government on its ambitious project
By 2005 five years into the plan 30000 families had been kitted out with an SHS but then the
program began to stagnateThe government of Mongolia recognized that considerably more effort
was necessary not only to keep the program on track but to scale-up implementation in order to
achieve the National 100000 Solar Ger Electrification Program target the report said In 2006 the
World Bank agreed to cover half of the initial outlay costs for each family as well as after-sales
maintenance with 50 centers set up across the country including at least one in each of its 21
provinces so that the herders would not have to travel to Ulaanbaatar every time the solar panels
needed maintenance
The SHS project also offers environmental benefits to a country where the ratio of carbon dioxide
emissions to economic output is ten times higher than the world average because of the increase in
mining over the past decade as the true extent of Mongolias mineral wealth became apparent The
solar systems are slowly replacing the diesel generators used by some nomads as a means of
generating power although they are still using stoves for heating burning wood coal and dung
throughout the year
Source Al Jazeera
IRON-ORE AND COAL PRICES GO SEPARATE WAYS
Prices of the key ingredients in steel productionmdashiron ore and coking coalmdashare moving along sharply
different paths as mining companies resist cutting coal output despite the market being awash with
the raw material
While iron-ore prices have risen 22 percent since May coking coal is still searching for a rebound
Coking-coal prices are off more than 4 percent over the same period China is on course for another
year of record steel production with supply directed to the construction of high-rise apartment
buildings the manufacture of luxury cars and other uses
There is simply too much coal on the market the International Energy Agency said in a report this
week
Shipments of steelmaking coal from Australiamdashthe worlds biggest exporter of the commoditymdashare
forecast by the government to rise to 178 million tons in 2015 from 145 million tons last year Most
goes to China which accounts for 60 percent of global demand In contrast global iron-ore
exporters are struggling to increase output in areas other than Australias remote Pilbara region
supporting prices of that commodity The spot price of iron ore climbed to nearly USD 140 a ton
earlier this month a four-month high Prices have since eased a bit to USD 13430 a ton but
remain well above the consensus forecasts of analysts at the start of this year
Coal miners could scale back production but that isnt always easy to do In Australia many miners
are locked into so-called take or pay contracts with rail and port operators Many analysts dont
expect coking-coal prices to rebound for at least another 12 months RBC Capital Markets expects
coking-coal prices to average USD 154 a ton in 2014 down from USD 159 a ton forecast for this
year Instead they see more chance that iron-ore prices will come down more sharply RBC predicts
an 11 percent fall in iron-ore prices next year as new supply from Anglo Americans Minas Rio
project and mines owned by Fortescue Metals Group Ltd is added to the market UBS is even more
bearish predicting iron ore will fall below USD100 in the second half of 2014
Source Wall Street Journal
ARE COMMODITIES TRADERS bdquoTOO BIG TO FAIL‟
When the banking industrylsquos top lobby group commissioned a report by on commodity trading
houses the idea was to show trading houses like Glencore Xstrata Vitol or Cargill were ―too big to
fail and therefore needed to be regulated in a similar manner to the banks
But instead of highlighting the inherent issues surrounding the industry the report found trading
companies posed less systemic risk than the big banks As a result the Global Financial Markets
Association which commissioned the report decided not to finalize or publish it (The GFMA claims
that it often commissions reports which are shared with regulators and other interested parties but
never published) But the debate hasnlsquot ended
A separate report published in July by the Centre for European Policy Studies a think-tank argued
the growth of commodity trading houses which underpin the global trade in raw materials could
―have systemic implications Commodities trader Trafigura has become the latest to wade into the
debate In its recent prospectus for a EUR 500 million bond issue the worldlsquos second largest metals
trader and third biggest oil trader addresses the GFMA report as well as the issue of systemic risk
Making some tart observations the trading house says the GFMA paper was aimed squarely at the
Financial Stability Board a group of global regulators
―[The report] was widely seen as a tactic by some banks active in the commodity trading space as a
way of creating more equality between market participants by seeking to usher in further
restrictions on pure commodity trading companies the prospectus says
Commodity traders are facing the need to be more open about their operations and lift the veil of
secrecy Indeed the author of the GFMA reportmdashCraig Pirrong a widely respected academicmdashis
working on a white paper on commodities traders Commissioned by Trafigura it will look at what
commodities trading houses activities and the recent trend to accumulate more assets risk
management as well as looking at different types of commodity companies
Source Financial Times
SMOG DARKENS SHANGHAIS PROSPECTS FOR BECOMING A GLOBAL FINANCIAL CENTER
In the debate over which matters more in China money or quality of life the quality-of-life side
may have found the ultimate argument If you cant breathe nothing else really matters And itlsquos a
debate Mongolia has to have as it makes its own steps towards industrial and economic growth
Chinas pollution problem is spreading and growing worse a fact on stark display last week in
Shanghai the countrys financial center A stretch of filthy-air days in that coastal city so
thoroughly shocked residentsmdashwho had largely escaped the smog that has long plagued the likes of
Beijing and Harbinmdashthat it inspired fresh talk about getting away from China Lawrence Shu a
Shanghai-based partner at Hylands Law Firm said he and his friends are thinking more seriously
about moving abroad
The smog had a big impact because it feels really bad if you cant breathe freely he said
The environment used to take a back seat among the Chinese But as they get richer they are
traveling abroad more making the pollution back home more obvious The Internet also
contributes Blue-sky pictures posted on social networks by Chinese travelers abroad constantly
remind folks of what is lacking at home and Chinese now use various apps to track air-quality data
If Shanghais smog discourages smart financial professionals from wanting to live there that will
hinder Chinas effort to create a global financial center If businesses such as financial companies
and luxury-goods makers perceive that Chinas elites are spending more time outside their home
country they will be less willing to invest in China
Most rich Chinese havent packed their bags and left yet but they are keeping their options open
Relocation is a big decision said Anne Wang who works in the financial industry in Shanghai But
just in case she recently received a US visa that would allow her to live there
Source Wall Street Journal
POLITICS
MINERALS POLICY ENTERS FINAL DISCUSSIONS
The government published a final draft of Mongolialsquos State Policy on the Minerals Sector for 2013
through 2025
The document was first presented to Parliament in July and is now entering final discussions during
the autumn plenary session of Parliament following a 42 percent drop of foreign investment and 23
percent fall in the currency year-on-year
―We have reviewed the proposed State Policy on the Mineral Sector which we feel will be a
positive step forward if passed said the Source ―The passing of this policy will result in more
transparency and an increasing participation from foreign investors That said it will take time for
these feats to be accomplished Investors will be weary of Government promises as they seek
longevity to prove Government intentions
The proposed policy is divided into four main sections rationale principles main policy and
implementation-results The major points stressed in the policy include transparency and
responsible mining The law sends the message that growth is going to be driven by private sector
participation and the intent to provide a stable investment environment technological innovation
and value-added activities
Key priorities of the law since it was first unveiled include stability of taxation and the legal
environment an end to any discrimination between foreign and national investors and the
preservation of strategic resources and deposits
This most recent version saw the inclusion of a new section supporting development of local areas
and the interests of local citizens Other key elements include explorationmdashwhich would see
greater government regulation for strategic mineral deposits while cutting down bureaucracy and
conducting scientific researchmdashproduction support and local support The new document also
highlights greater support for non-governmental organizations for the environment allowing them
to claim damages from mining operations the establishment of funds to support economic
diversification environmental protections and land rehabilitation
The new draft has removed the risk assessment section and replaced it with a section on
implementation This includes the improvement of the legal environment and producing of relevant
regulations programs and projects for 2013 to 2015 followed by the implementation of programs
and projects from 2014 to 2025 and finally the provision of conclusions on midterm policy
implementation and further planning for up to 2020 and 2025
―We believe that this policy will take us one step closer to attracting investors and supporting
private sector development in Mongolia said the Source ―Despite current investor hesitation this
state policy in addition to the new amended Minerals Law set to pass next year will further
encourage investors to enter the market and will build support for the junior mining community
Source Mongolian Investment Banking Group
PARLIAMENT UNANIMOUSLY BACKS ldquoSMART GOVERNMENTrdquo INITIATIVE
Parliament has unanimously backed President Tsakhia Elbegdorjs ―From Big Government to Smart
Government initiative for government reform concepts having signed a joint statement of support
on 13 December
The joint statement gives full support to the presidents initiative and commits to cooperation for
its undertaking This includes support for enhancing government systems and policies in line with
democracy and a market economy improving the capacities of public services and curtailing
government intervention into private business affairs Also included are protections to private
business including establishing government structures for rule of law support to domestic
industries and honoring contracts The fight against corruption is another main perogative
On 16 November 16 the Office of the President of Mongolia organized a national consultative
meeting on this topic at the Government Palace Elbegdorj next met with members of the
Parliament on 9 December to organize an open dialogue with representatives of Parliament for an
appeal for them to sign the joint statement Reaffirming the commitment of the Mongolian
lawmakers to a breakthrough reform of the Government the leaders of party floors and factions in
the Parliament and independent members of the Parliament signed the document for the reform on
December 13 2013
Source Montsame
GOVERNMENT CALLS TO END PRACTICE OF APPOINTING MPS AS MINISTERS
The coalition government has thrown their support behind President Tsakhia Elbegdorjs proposal to
prohibit Parliament members from serving as cabinet ministers
Democratic Party members discussed a draft resolution and proposed amendments submitted by the
president for the new restriction at a party meeting on Monday The draft amendments were
unanimously backed by the faction The Justice Coalition which includes the Monglian Peoples
Revolutionary Party and Mongolian Democratic Party came to the same conclusion following its own
meeting said coalition head N Battsereg on Monday
Source Montsame
COMMITTEE LEADERS TO BE ELECTED THIS MONTH
The coalition government will soon be electing officials to lead the various committees in
government
Parliament has 8 standing committees to elect leaders to this month with each committee to be
led by a representative of the coalition government Current committee heads are Ts Tsolmon at
the Security and Foreign Policy Committee G Bayarsaikhan at the Environment Food and
Agriculture Committee Z Bayanselenge at the Social Policy Education Culture and Science
Committee R Burmaa at the Petition and Requests Committee A Bakei at the State Structural
Committee Ts Davaasuren at the Budget Committee Sh Tuvdendorj at the Legislation
Committee and B Garamgaibaatar at the Economic Committee
Source Zuunii Medee
FOREIGN CURRENCY PAYMENTS BANNED FOR MININGEXPLORATION LICENSING FEES
The Ministry of Finance has banned the use of foreign currencies to pay for mining and exploration
licensing fees to the Mineral Resources Authority beginning 1 January 2014
The Ministry of Finance has prompted these entities and companies holding licenses to comply with
Mongolian currency law that states that all businesses and agencies must do business in Mongolian
tugrug According to the 2009 law transactions must not be carried out in foreign denominated or
foreign currency based rates
Source Newsmn
MINING MINISTRY TO COOPERATE WITH ASSOCIATION OF FLUORSPAR EXPLORERS
The Ministry of Mining Wednesday established a memorandum of mutual understanding with the
Association of Fluorspar Explorers (AFE) to cooperate in augmenting the countrylsquos export
In addition to expanding export goals include developing transparent and responsible mining
improving qualities and standards of fluorspar metallurgy and flotation concentrate and in
increasing the production output of the minerallsquos ore enrichment The hope is the memorandum
will create a launching point for a national program for fluorspar its exploitation increase the
volume of production by intensifying research and increase competitiveness in international
markets It will also be necessary to introduce the latest technology to the country along with
running joint trainings with foreign NGOs the Ministry said
Source Montsame
DP REJECTS AMARJARGAL‟S RESIGNATION
Parliament voted against MP R Amarjargallsquos resignation request on 12 December
During Tuesdaylsquos meeting the majority of the Standing Committee on State Structure voted against
Amarjargal`s resignation The head of the Democratic Party (DP) caucus D Erdenebat took a
strong stance against letting Amarjargal leave
Amarjargal said he wanted to resign to take responsibility on behalf of his party members for the
current political situation and economic restraints in Mongolia DP members agree with his
conclusion but encourage him to make the effort and participate for social change and
development Members of the opposition Mongolian Peoplelsquos Party members said that Amarjargal
could see the problems and nature of the majority of Parliament and praised his plan to resign
Source Newsmn
MPP HEAD TO STEP DOWN
Mongolian People Party (MPP) Head N Enkhbold has requested his resignation as party leader
MPP Deputy Head D Oyunkhorol said 9 December that Enkhbold submitted his request to step down
during a party meeting Oyunkhorol said Enkhboldlsquos resignation was due to personal reasons The
new party head will be appointed by the MPPs governing board
Source Udriin Sonin
FIFTH ROUND OF NEGOTIATIONS FOR THE JAPAN-MONGOLIA ECONOMIC PARTNERSHIP
AGREEMENT
The fifth round of the negotiations for the Japan-Mongolia Economic Partnership Agreement (EPA)
will be held from 16 to 19 December in Ulaanbaatar
The Japanese delegation will be led by Jun Yokota ambassador in charge of economic diplomacy
and the Mongolian delegation will be led by Ochirbat Chuluunbat vice minister for economic
development Experts from relevant ministries and agencies of both sides will participate in the
meetings
In this round negotiations are in areas including trade in goods and investment
Source 4-Traderscom
FIRST MONGOLIA-CHINA JOINT BORDER COMMISSION MEETING IN BEIJING
The very first meeting of Mongolia-China joint commission of borders took place 11 and 12
December in Beijing China
This meeting was co-chaired by T Togsbilguun a director of the Department of Neighbour
Countries of Mongolialsquos Ministry of Foreign Affairs and by Xiao Jiangguo a representative of border
checkpoint and seaport affairs Both sides shared on ideas for implementation of the
intergovernmental contract on the border regime and reached some agreements on conducting a
joint examination in the border signs and on activating the collaboration in law enforcement around
frontier areas After this they discussed issues of developing border checkpoints at a same level
putting some border checkpoints into a permanent regime giving an international status to four
checkpoints
The gathered also made a protocol on their meeting and inked its results The next meeting will run
in 2014 in Ulaanbaatar
Source Montsame
BELARUS TO OPEN EMBASSY IN MONGOLIA IN 2014
Belarus will open its embassy in Mongolia in 2014 reads a resolution from the Belarus Council of
Ministers of the Republic of Belarus from 12 December 2013 Belaruslsquo Finance Ministry will finance
the costs of opening and maintaining Belarusian Embassy in Mongolia from the funds set aside in its
national budget for the opening and maintenance of diplomatic missions and consular missions of
the Republic of Belarus abroad
Source Belarusian Telegraph Agency
HOWELL NEW JERSEY USA BECOMES SISTER CITY OF SUKHBAATAR DISTRICT
The Howell Township and the Sukhbaatar district in Mongolia signed a memorandum of
understanding to create sister citieslsquo between Howell New Jersey USA and the Sukhbaatar District
on Tuesday
The program was aimed at opening up talks on how each can benefit from one another Mayor
William Gatto said Howell Township is a very diverse city and theyve taken the relationship with
the Kalmyk community here in Howell and expanded it to a country where they have had no
relationship in the past he said
The sister citieslsquo program will allow both Mongolia and Howell to exchange ideas and come up
with new and better ways to do things that benefits both cultures Outside of Mongolia Howell has
the largest population of Kalmyks in the world with many living in the Freewood Acres section of
the township Gatto said
Some of the goals of the agreement include promoting a common prosperity and development for
both parties an electronic pen-pal program and education opportunities for exchange students
Through a translator Baljinnyam Gan-erdene of the Citizens Representatives Council of Sukhbaatar
District said he came to Howell to see how democracy works in the United States
Im really glad and hope that this unforgettable and successful visit opens the door to our
friendship and prosperity between our residents Gan-erdene said
Gatto gave Gan-erdene a Howell flag and a throw blanket created by the Historical Society
depicting the history of the township Gan-erdene also gave Gatto several items including a bronze
piece of art
Source NJcom
MONGOLIAN CALLIGRAPHY ADDED TO UNESCO CULTURAL HERITAGE LIST
State Parties at the 8th Session of the Intergovernmental Committee for the Safeguarding of the
Intangible Cultural Heritage in Azerbaijan unanimously agreed to register Mongolian calligraphy as
an intangible cultural heritage in need of urgent safeguarding on 2 December
―Mongolian heritage calligraphy is now being recognized by the world and I am grateful on behalf
of my country for decision makers said Secretary-General of Mongolian National Commission for
UNESCO Gundegmaa Jargalsaikhan He noted that Mongolian calligraphy was the fifth cultural
heritage item of Mongolia to be listed and now stands among the Mongolian epic traditional folk
dance the traditional music Tsuur and a circular breathing technique
Mongolian calligraphy is a 1000-year-old writing system that vertically connects continuous strokes
together to create a word Letters of Mongolian script have been created and taught by nomads
from generation to generation During the 1937-1940 purges of the Soviet era thousands of tutors
and traditional scholars of the script were killed Those who remained alive were banned from
mentoring the younger generation Soon after that or around 1946 a new Cyrillic script was
adopted as the only eligible script therefore banning all the teachings of old Mongolian script and
Latin lettering Only in the 1970s was the old Mongolian script re-introduced to scholars allowing a
limited number of classes in universities
After the 1990 democratic changes along with the revival of Mongolian identity interest in
traditional calligraphy reawakened As a sign of such revival the very first non-communist political
organization the Democratic Union of Mongolia used folded calligraphy as its main logo
Source Info Mongolia
THOUGH IMPROVING MONGOLIA STILL REELING UNDER CORRUPTION
The third joint survey by the Asia Foundation and Sant Maral Foundation to gather data on the
perception of corruption in Mongolia revealed that efforts to curb corruption in what is considered
as one of the worldlsquos most corrupt countries could be having impact
The survey shows a significant drop in the percentage of respondents who believe corruption has
increased in the last three years from 389 percent in November 2012 to 183 percent currently In
contrast in 2006 a majority of respondents (63) indicated that corruption has increased ―a lot in
the last three years The survey also shows that corruption has declined in importance as a critical
social problem since 2006 Despite these positive signs overall respondents indicated that
corruption remains a serious issue in some specific key areas
Conducted in September of this year the survey featured face-to-face interviews in 1360
households across Mongolia including seven districts in Ulaanbaatar and 21 counties in six
provinces A majority (766) cited that widespread corruption in the law enforcement agencies is
one of the main reasons the government has been unable to tackle corruption effectively When
corruption is perceived to be this widespread the attention will obviously turn to the performance
of the apex anti-corruption body the Independent Authority Against Corruption (IAAC) The survey
shows that the IAAC is slowly but surely beginning to gain confidence among citizens The
percentage of those surveyed who think that its performance is ―good or ―very good increased
from 78 percent in March 2010 to 203 percent in March 2013 In September 2013 the result shows
a new high of 294 percent
Peoplelsquos perceptions on corruption are often shaped by personal experiences Although very few
respondents in the survey said that they had actually paid a bribe themselves (8 percent about a 3
percent drop from 2012 and an 18 percent drop since 2006) as noted before many are not willing
to report instances where they are asked for one Similarly 36 percent of respondents said they
would not pay a bribe but 26 percent indicated that they would pay if they had the financial
capability
Basanta Pokharel is The Asia Foundation‟s chief of party for the STAGE program in Mongolia He
can be reached at basantapokharelasiafoundationorg The views and opinions expressed here
are those of the individual author and not those of The Asia Foundation
Source Asia Foundation
MPP DEMANDS DISMISSAL OF MINISTERS
Mongolian Peoplelsquos Party Chairman N Enkhbold and party head S Byambatsogt submitted to the
Speaker a request for the dismissal Minister of Finance Chultem Ulaan and of Economic
Development Minister Nyamjav ―Fortuna Batbayar
Our faction believes that these ministers must be held responsible for the worsening of the
national economic situation We also intend to do the same with other ministers after hearing
opinions of people said Byambatsogt
Source Montsame
FORMER TAVAN TOLGOI JSC DIRECTOR ARRESTED
The Independent Agency Against Corruption arrested former Tavan Tolgoi JSC director Kh
Tumenbayar for undisclosed reasons
An unnamed official source suggested that the arrest may be related to abuses of power and
payments to political parties as well as the construction of a high-class hotel in Dalanzadgad Soum
Umnugobi Aimag Kh Tumenbayar is a member of the Democratic Party a member of Parliament
and is an associate of ―Ajnai Bat-Erdene the Minister of Defense who helped Tumenbayar attain
position as the director of Tavan Tolgoi for 6 years and rise to head of the Umnugobi Aimag Citizens
Council
Tumenbayar voluntarily resigned from his position at Tavan Tolgoi last month The IAAC has
reportedly not given details to the reasons for the investigation opened on Tumenbayar because of
possible connections to high-ranking officials
Source Unuudur
MONGOLIA TURKMENISTAN JOIN INTERNATIONAL RACING FEDERATION
The International Federation of Horseracing Authorities (IFHA) has welcomed racing organizations
from Mongolia and Turkmenistan as affiliate members
Recent ratification to IFHA statutes at its annual General Assembly in October created a new
affiliate membership category within the Federation Thus the Federation of Mongolia Horse Racing
Sport and Trainers and the Turkmen Atlary State Association by unanimous vote of the IFHA
Executive Council in Paris in October have become the IFHAlsquos first two affiliate members
The Federation of Mongolian Horse Racing Sport and Trainers (FMHRST) is a non-governmental
organization (NGO) which serves to the development of equestrian sport in Mongolia and works to
protect the rights of horsemen who specialize in this national sport The new affiliates were
announced by IFHA Chairman Louis Romanet this week and several key appointments to IFHA
executive office positions and committees have also been made
Source Horse Talk
MONGOL TV HEAD MEDIA CAN HELP FIX THE BIG PROBLEMS
Nomin Chinbat head of Mongol TV has grander intentions than just ridding the countrys television
business of rampant pirated content and unlicensed formats The young executive wants to help
clean up Mongolian politics and the nation by creating a free and open media
―The networks are used as propaganda channels for politicians They are used very effectively every
four years at election time says Chinbat whom the Source named one of the 25 Most Powerful
Women in Global TV at MIPCOM 2013
―There are laws against piracy but they arenlsquot implemented explains Chinbat who says that
politicians in the country of roughly three million wonlsquot challenge journalists because their
relationships with them are too cozy
Mongol TV has invested in original programming licenses all of its imported content and runs
investigative journalism features highlighting social problems such as alcoholism and corruption
The company is organizing a Mongol TV Day for February 2014 to which it has invited major
international studios to raise awareness of the issues and introduce the global industry to
Mongolia Britainlsquos ITV and Americalsquos CBS are already confirmed and negotiations are ongoing with
other attendees The situation has improved in recent years with some channels having become
what Chinbat calls ―hybrids which license some sports rights but then steal others and copy
formats
―These days some of these channels might license 25 episodes of a format and make 50 But this is
actually progress says Chinbat
Chinbat and her team were at the Asian Television Forum (ATF) in Singapore looking for new
formats that can be produced within the constraints of Mongolian television budgets However with
Mongolias young populationmdash65 percent of the country is under 35 years oldmdashmobile viewing is on
the rise and the network is already working second-screen utilization and new media applications
This demographic sweet spot should guarantee strong growth in the population economy and
nascent entertainment sector in Mongolia in the coming decades
Source Hollywood Reporter
ANNOUNCEMENTS
ldquoMM TODAYrdquo ON MNB-TV FRIDAY 1900 TO 1910
BCM is pleased to announce that Mongolian National Broadcasting continues its cooperation with
BCM on ―MM Today This English news program is aired every Friday for 10 minutes and is
scheduled from 1900 to 1910 tonight Tune in to watch this program that reports stories from
todaylsquos BCM NewsWire
BCM WEBSITES
MONGOLIAN WEBSITE bdquoPRESENTATIONS‟ AND bdquoNEWS‟ SECTIONS
The Presentationslsquo section on BCMlsquos Mongolian website can be reached via bcmmnitgeluud
As a key component of BCMlsquos Mongolian website articles from the Newslsquo section and the
government website Open-Governmentmn are regularly updated
S Oyun Minister of Environment and Green Development presentation at BCM monthly meeting on
May 27 added to Mongolian website bcmongoliaorgmnилтгэлүүд
- Байгаль орчин ногоон хөгжлийн сайд СОюун Байгаль орчин ногоон хөгжлийн шинэчлэлийн
бодлого үйл ажиллагаа МБЗ-ийн сарын уулзалт 5 сарын 27 2013
___________________________________________
ENGLISH WEBSITE PRESENTATIONS MONGOLIA REPORTS bdquoINTERVIEWSbdquo MONGOLIAN
BUSINESS NEWS‟ bdquoPHOTO GALLERY‟
The following 13 presentations are from the Mongolia Investment Summit- 2013 in Hong Kong
November 18-20
- Regulatory Update Navigating Mongolialsquos legal framework for foreign direct investment
Javkhlanbaatar Sereeter Director General Foreign Investment Regulations and Registration
Department MINISTRY OF ECONOMIC DEVELOPMENT OF MONGOLIA
- Investment keynote Investing into Mongolia in 2013 ndash Where do the opportunities lie James
Passin Co-Founder and Manager FIREBIRD MONGOLIA FUND
- Development keynote Key challenges and opportunities for continued growth in Mongolia
Randolph Koppa President TRADE AND DEVELOPMENT BANK OF MONGOLIA
- Outlining government policies and long-term plans for Mongolialsquos mining sector Amarjargal
Khurelbat Head of International Cooperation Division MINISTRY OF MINING OF MONGOLIA
- From copper to met coal Demand and price outlook and expected impact on Mongolialsquos economy
Ghee Peh Managing Director Metals and Mining Research UBS SECURITIES ASIA
- How Mongolian banks and financial institutions are dealing with the challenges and opportunities
of a fast growing economy Norihiko Kato Chief Executive Officer KHAN BANK
- Update on the Mongolian stock market ndash Impact of the new Securities Law Altai Khangai Chief
Executive Officer MONGOLIAN STOCK EXCHANGE
- From investment banking to trade finance to micro credits to insurance Amartuvshin Hanibal
Managing Director TENGER FINANCIAL GROUP LLC
- Spotlight presentations Showcasing Mongolian investment opportunities Peter Morrow Board
Director ASIA PACIFIC INVESTMENT PARTNERS
- Spotlight presentation Showcasing Mongolian investment opportunities Munkhbat Davaatseren
CEO of Golomt Securities GOLOMT BANK
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources
Batmunkh Batkhuu Chairman SHARYN GOL JSC
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources
Jimmie Wilde Chief Operating Officer BERKH UUL JSC
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources Mona
Forster Executive VP ENTREacuteE GOLD INC
The following two presentations are from the ―ANTI-CORRUPTION LEGISLATIONPOLICY
INTERNATIONAL BEST PRACTICE ON TRANSPARENCY training seminar for businesses in
Ulaanbaatar November 18 2013
-―International business standard on transparency by Jelena Pesic Director PwC
-―Finlandlsquos best practice on transparency and anti corruption by Dr Pekka Hallberg (as it is
worldlsquos number one) Emeritus President of the Supreme Administrative Court of Finland
The following 15 presentations are from the Mongolia Mining Summit Perth Australia October 29-
31 2013
bull Mongolialsquos Minerals Future and Development by Otgochuluu Ch Director General Department of
strategic policy and planning at Ministry of Mining Mongolia at the Mongolian Mining Summit 2013
Perth Australia Oct 29-31 2013
bull Mongolian Economy Investment OpportunitiesChallenges Jim Dwyer Executive Director
Business Council of Mongolia at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31
2013
bull Oyu Tolgoi Lessons from the Gobi Houston Spencer Vice President Communications and Media
Relations Oyu Tolgoi at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Market dynamics for Mongolian coking coal in the Chinese market Graeme Hancock President
and Chief Representative at Anglo American Mongolia at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Speech by Mr Ariunbold Byamba Deputy Director Erdenes MGL LLC at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull Launching Mining Projects in MongoliandashA Major Contractorlsquos Perspective Eric Erdenebat
Tseveendorj Country Manager Orica Limited at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Investing in a dynamic legislative environment Elisabeth Ellis Managing Partner Ulaanbaatar
Minter Ellison at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Sandvik In Pit Crushing amp Conveying (IPCC) Doug Turnbull Principal Mining Engineer Sandvik
Mining Systems at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Ovoot Coking Coal Project David Paull Managing Director Aspire Mining at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull The business of being a third neighbor David Landers General Manager East Asian Growth
Markets at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Nuurst Thermal Coal Project Daniel Rohr Chief Financial Officer Modun Resources Ltd at the
Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Culture matters in building sustainable long-term business relationships Hana Tserenkhand
Byambadash Business Development Consultant AusMon Consulting and Dr Christine Hogan Adjunct
Professor Curtin University Consultant amp Author at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Maximizing Business Benefits from Your IT Investment Brad Skeggs Executive Director COSOL at
the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Presentation by Battsengel Gotov CEO Mongolian Mining Corporation at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull Mongolian Mining Sector Present and Future Developments NAlgaa Executive Director
Mongolian National Mining Association at the Mongolian Mining Summit 2013 Perth Australia Oct
29-31 2013
The ―Mongolia Reports section includes the following
- ―Ministry of Finance of Mongolia 2013 Government Debt Auctions by Bank of Mongolia
- ―Doing Business in Mongolia 2013 Country Commercial Guide for US Companies by US
Embassy
- ―Real Estate Report 2013 by Mongolian Properties
- ―Selected Macroeconomic Indicators November 20 2013 by International Monetary Fund
- ―2013 Second Annual Mongolian CEO Survey from PricewaterhouseCoopers Audit LLC
- ―Selected Macroeconomic Indicators data through October 16 2013 by International Monetary
Fund
- ―IMF Completes 2013 Article IV Mission to Mongolia by International Monetary Fund
The following are added to Interview Section from the Oxford Business Group Mongolia Reports
2013 book
bull B Byambasaikhan Chairman Business Council of Mongolia ―Talk is cheap
bull President Ts Elbegdorj ―Diversifying for growth
bull Jim Dwyer Executive Director Business Council of Mongolia ―Non-mining sectors budding
bull Peter Morrow Chairman American University of Mongolia ―Filling in the blanks
bull N Zoljargal Governor Bank of Mongolia ―Sustainable vision
bull Gansukh Minister of Roads and Transportation ―Accessing new markets
bull J Od President MCS Group ―Building interest
bull B Chuluunbaatar President and CEO of Monnis Group ―Climbing the ranks
bull Cameron McRae President and CEO Oyu Tolgoi ―Sitting on a copper mine
BCMs English website includes the ―Mongolia Business News section where the Open Letter to
Parliament and Government is available for download
BCM continuously posts news stories and analysis of relevance to Mongolia at Mongolian Business
News before they are all put together each week for Fridays weekly NewsWire
The ―Photo Gallery contains photos from the 6th Anniversary BCM Renewal dinner on November
11 2013
BCM Football Cup 2013 pictures are posted to the website - httpbcmongoliaorgenphotos350-
enalbumalbumid=200
The BCM NewsWire will continue to be issued each Friday incorporating items already on the home
page for a consolidated account of the weeklsquos events
SOCIAL NETWORK WITH BCM
BCM LAUNCHES NEW LINKED-IN COMPANY PAGE
The Business Council of Mongolia has launched a new company page on the social networking
website LinkedIn to network its members and followers including small-medium enterprises (SMEs)
The new page will allow BCM to alert followers to the latest news and information critical to their
businesses Memberslsquo businesses will be promoted Additionally BCM plans to deliver monthly
infographics on the latest data as well as videos and other media content as they come The bulk of
the content on the new page will be in Mongolian language to better cater to BCMs Mongolian-
speaking audience and members The following link can direct you to the New BCMs Linked-in page
httpwwwlinkedincomcompanybusiness-council-of-mongoliatrk=company_logo
The Business Council of Mongolia (BCM) has expanded its reach to your favorite social networks
Keep up to date on the latest business deals in Mongolia and how the climate for investment is
improving each day with BCM
Add BCM on Facebook at httpswwwfacebookcomTheBusinessCouncilOfMongolia to read the
latest announcements and comment on events carried in the NewsWire with the community
Hear breaking news and announcements as they happen when you follow BCM on Twitter at
httpstwittercombcmongolia
We have now 2482 fans on our Facebook fans page 1527 connections on LinkedIn network and
835 followers on Twitter
Of course for news information interviews event photos and announcements regarding our
organization visit the official BCM website at httpbcmongoliaorgen
ECONOMIC INDICATORS
INFLATION
Year 2006 60 [source National Statistical Office of Mongolia (NSOM)]
Year 2007 151 [source NSOM]
Year 2008 221 [source NSOM]
Year 2009 42 [source NSOM]
Year 2010 130 [source NSOM]
Year 2011 102 [source NSOM]
November 30 2013 120 [source NSOM]
Year-over-year (y-o-y) nationwide
Note 111 y-o-y Ulaanbaatar city November 30 2013
CENTRAL BANK POLICY LOAN RATE
December 31 2008 975 [source IMF]
March 11 2009 1400 [source IMF]
May 12 2009 1275 [source IMF]
June 12 2009 1150 [source IMF]
September 30 2009 1000 [source IMF]
May 12 2010 1100 [source IMF]
April 28 2011 1150 [source IMF]
August 25 2011 1175 [source IMF]
October 25 2011 1225 [source IMF]
March 19 2012 1275 [source Mongol Bank]
April 18 2012 1325 [source Mongol Bank]
January 25 2013 1250 [source Mongol Bank]
April 8 2013 1150 [source Mongol Bank]
June 25 2013 1050 [source Mongol Bank]
CURRENCY RATES ndash DECEMBER 19 2013
Currency Name Currency Rate
US dollar USD 164138
Euro EUR 224680
Japanese yen JPY 1579
British pound GBP 268874
Hong Kong dollar HKD 21170
Chinese Yuan CNY 27031
Russian Ruble RUB 4981
South Korean won KRW 155
Disclaimer Except for reporting on BCMlsquos activities all information in the BCM NewsWire is
selected from various news sources Opinions are those of the respective news sources
to arise as a consequence of each scenario
The Mining Sector Institutional Strengthening Technical Assistance Project commissioned
Sustainability to conduct a strategic environmental and social assessment for Mongolias mining
sector
Sustainability will also perform a gap analysis of the legal regulatory and institutional capacity to
deal with each possible scenario An action plan is expected for SESA by summer 2014
Source Sustainability East Asia LLC
UB REGISTERS MATERNITY HOSPITAL NO 1
The new building annex for Maternity Hospital No 1 was registered as capital city property
13 December at a regular session of the Ulaanbaatar Citizens Council This maternity hospital
building was built with financing from Boroo Gold and was presented as a gift to the people of
Mongolia With a capacity to receive 150 mothers and children its total cost was MNT 92 billion It
includes the hospital building of 1169 square meters external heating clean water and sewer
water pipelines a diesel station an asphalt road a pedestrian walkway outdoor vegetation and an
external LED sign
This new building was commissioned 15 June The new annex has one vacuum operation room and
two standard operating rooms on the fifth floor 100 beds for women and 50 beds for infants on the
third and fourth floors paraclinical and sanitation units a pharmacy a conference room and
training rooms on the second floor an ambulatory section and reception on the first floor and staff
cafeteria closets washrooms and a disinfection chamber in the basement
Source Centerra Gold Inc Newsmn
RIO TINTO‟S SAM WALSH DIGS IN FOR THE LONG HAUL
Sam Walsh wants to remain as Rio Tinto PLClsquos chief executive beyond the end of his contract and
has told the minerlsquos board he will not be ready to retire in 2015
―I am there if they want me said Walsh ―Likewise if therelsquos someone else who can come in and
take what Ilsquove done to the next level thatlsquos fine too
The Australian 63 later this month replaced Tom Albanese 11 months ago after Rio decried
―unacceptable writedowns on its coal business in Mozambique Walsh says investors support his
strategy to cut costs and sell non-core assets
Walsh said he has explored selling all of Riolsquos aluminum business this year in what would be a
signature reversal of Albaneselsquos costly purchase of Alcan in 2007 But he says no offers have been
good enough while the business is not generating enough cash for an initial public share offering or
spin-off to Riolsquos shareholders Walsh has also been frustrated in attempts to sell Riolsquos diamonds
business
―Who would thank me if I sold something under value just to get a tick At the end of the day you
have to be pragmatic about things he said Offers ―werenlsquot in the bailiwick of where we thought
they should be
The Alcan deal epitomized Riolsquos poor recent dealmaking and Walsh admits the company had
―relaxed some of the controls it should have had Rio staff has now ―refound their mojo he said
On operating costs which Rio has said it will cut USD 3 billion next year he said ―There is rolling
momentum and thatlsquos important
Source Financial Times
KYRGYZSTAN FILES ECOLOGY DAMAGE LAWSUIT AGAINST CENTERRA
Kyrgyzstan is suing Canadas Centerra Gold Inc for 15 billion soms (USD 304 million) over what the
government says is ecological damage marking a new twist in a bitter row with the investor running
the largest Kyrgyz gold mine
The state environmental protection and forestry agency said in a statement that it had filed the
lawsuit at an economic court in the Kyrgyz capital Bishkek saying Centerra Gold had ignored its
earlier request for voluntary compensation It said the alleged ecological damage included
emissions of pollutants and waste dumps It said its claim referred to the companys operations
between 1996 and 2011
Centerra had said earlier that it viewed the governments claim as exaggerated and unfounded
The company disagrees with these charges and plans to give explanations on this matter in the
nearest time said a spokesman for the Kumtor Operating Company (KOC) the Centerra subsidiary
that runs the Kumtor mine in the Tien Shan mountains
The Toronto-listed miner which also owns the Boroo gold mine in Mongolia is already under
pressure from the Kyrgyz parliament which demands the state hold 67 percent in a proposed joint
venture to run the mine In September the government and Centerra Gold signed a memorandum
of understanding paving the way for Kyrgyzstan to swap its 327 percent stake in the Canadian firm
for 50 percent in a venture that would own Kumtor But in October the legislature voted to tear up
the document and seek control over the planned venture It gave the cabinet until 23 December to
report on its talks with Centerra Gold on setting up the venture Pearson said Centerra is having
constructive dialogue with the Kyrgyz government
Source Reuters
ECONOMY
FITCH AFFIRMS TWO MONGOLIAN BANKS AT B REVISES OUTLOOKS TO bdquoNEGATIVE‟
Fitch Ratings on 16 December revised the outlook on the Long-Term Issuer Default Ratings (IDRs) of
Khan Bank LLC and XacBank LLC to ―Negative from ―Stable At the same time the agency
affirmed the two Mongolian banks IDRs and viability ratings at B and b
The revision of the outlooks on both banks IDRs reflects weakening operating conditions as
indicated by the change in the Outlook for the Mongolian sovereign (B+) to Negative from Stable on
13 December The sovereigns outlook was revised due to mounting risks to the countrys economic
and financial stability Ratings on the two banks could be downgraded if pressures on asset quality
and liquidity intensify Persistent local-currency depreciation would reduce borrowers repayment
capacity and could lead to accelerated deposit withdrawals given the countrys high level of
dollarization
The banks ratings also remain sensitive to the withdrawal of credit stimulus as this could result in
asset deterioration on slowing economic growth or higher inflation Further decline in the
governments international reserves could also trigger a negative rating action as the banks
currency-related risk is counterbalanced by the authorities swap facility and unlimited foreign-
currency conversion Both banks ratings are also sensitive to any changes in their steady access to
capital from private-sector owners
Khan Banks Support Rating and Support Rating Floor (SRF) reflect Fitchs view that as the largest
bank in Mongolia it would be likely to receive state support in case of need However the
Mongolian sovereigns ability to provide timely support to the banking system remains limited as
underlined by its IDR of B+ A downgrade of the sovereign ratings would point to weakening in the
Mongolian governments ability to provide timely support to the banking system which put negative
rating pressure on Khan Banks SR and SRF In contrast Fitch expects XacBanks SR and SRF of 5B-
to be maintained even if the sovereigns rating is downgraded to B This is because the current SR
and SRF already reflect the agencys view that support from the sovereign in case of need cannot
be relied upon
The rating actions are as follows Khan Bank Long-Term Foreign-Currency IDR affirmed at B
Outlook revised to Negative from Stable Short-Term Foreign-Currency IDR affirmed at B Long-
Term Local-Currency IDR affirmed at B Outlook revised to Negative from Stable Viability Rating
affirmed at b Support Rating affirmed at 4 Support Rating Floor affirmed at B XacBank Long-
Term Foreign-Currency IDR affirmed at B Outlook revised to Negative from Stable Short-Term
Foreign-Currency IDR affirmed at B Long-Term Local-Currency IDR affirmed at B Outlook revised
to Negative from Stable Viability Rating affirmed at b Support Rating affirmed at 5 Support
Rating Floor affirmed at B-
Source Fitch Ratings
MONGOLIA SCORE FALLS ON POLITICAL RISKS INDEX FOR MINING INVESTMENT
An annual survey by Behre Dolbear of political risks saw Mongolia decline 5 points in an index
ranking Mongolia 19th out of 25 countries
Mongolia this year received a score of 269 compared with 32 last year Leading the countries
surveyed was Australia down 07 points from last year Russia with a total score of 171 compared
with 16 last year was the lowest ranking
The 25 countries considered in this yearlsquos survey are ranked based on seven criteria
-the countrylsquos economic system
-the countrylsquos political system
-the degree of social issues affecting mining in the country
-delays in receiving permits due to bureaucratic and other issues
-the degree of corruption prevalent in the country
-the stability of the countrylsquos currency and
-the competitiveness of the countrylsquos tax policy
Each criterion is rated on a qualitative scale from one (worst) to 10 (best) that reflects conditions
that promote investment growth in the mining sector The maximum score attainable for a country
is 70 points
Source Behre Dolbear Group
MONGOLIA LOOKS FOR SECOND CHANCE WITH FOREIGN INVESTORS
Saruul Ganbaatar the deputy head of Mongolias stock exchange hopes the countrys days of
interventionist economic policies are over and new laws ensuring foreign investors access to the
frontier markets industries will bring back sorely needed cash
Ganbaatar 32 who cut his investment teeth in Chicagos financial houses after graduating from
Loyola University is careful not to over-promise on what the stock market can deliver in 2014 and
beyond in terms of new listings or overall growth In October a law was passed easing ownership
restrictions for private companies to invest in the strategic industries A Securities Markets Law
coming into effect 1 January 2014 is expected to provide the key ingredient to attract deep
pocketed institutional investors such as mutual funds to invest
This really is the missing ingredient said Ganbaatar who has been traveling the globe promoting
the changes in the laws to global investors for the past two weeks
The stock index fell 19 percent in 2012 and year-to-date is down 115 percent although it did start
to climb with the newly passed laws On 1 January the new Securities Markets Law will allow
Mongolias commercial banks to offer custodial banking services Custodial banks serve as safeguards
for a firm or individuals financial assets playing a critical role in the final settlement of market
transactions Total market capitalization now is between USD 900 million and USD 1 billion Dont
expect the number of new listings to mushroom There may instead be a cull of companies Fifty-
five to 60 of them many of which have not traded in years are being reviewed for potential
delisting
The Mongolian Stock Exchange 100 percent state-owned is perhaps itself a candidate for
privatization It has been in a strategic partnership with the London Stock Exchange for two and a
half years
They have the right of first refusal he said
Source Reuters
CPI INCREASES TO 12 PERCENT YEAR-OVER-YEAR IN NOVEMBER
The National Statistical Office reported a 12 percent increase in the national consumer price index
(CPI) in November year-over-year
The CPI growth which also in November grew 13 percent from the previous month was explained
by a 14 percent increase in food prices and non-alcoholic beverages 23 percent for clothing
footwear and fabrics and 07 percent for housing water electricity and fuels
Source Info Mongolia
GROWTH SEEN IN EXPORT OF PRECIOUS METALS
The export value of precious metals grew 114 percent in November from the month before and 63
percent from the same period in 2012 according to the National Statistical Office
Exports totaled USD 38 billion in the year to December while imports grew to USD 58 billion The
foreign trade balance saw a deficit of USD 2 billion November saw exports of USD 381 million and
imports of USD 514 million with exports and imports in decline between July and November The
value of export products for the first 11 months was USD 11 billion Despite the gain in precious
metal exports exported minerals which represented 81 percent of all exports in the year to
November fell 129 percent from the year before
Source Zuunii Medee
MNT 788 BILLION WILL BE ENTERED INTO THE STABILIZATION FUND
The Stabilization Fund is set to collect MNT 49 billion this year and MNT 298 billion next
The Stabilization Fund was established to collect surplus revenue in years of economic gains from
the mining sector to cushion possible annual losses during economic downturns and weak
commodity demand Any gain in the price for gold and coal next year will also be reflected in
allotments to the fund
Source Zuunii Medee
ECONOMIC DEVELOPMENT MINISTRY PLANS TO PUT 81 OF BUDGET INTO CONSTRUCTION
The Economic Development Ministry plans to invest MNT 814 percent of its total investment budget
into construction
Beginning 1 January 2014 the ministry will provide MNT 9303 in loans toward the construction
sector The ministry will spend 39 percent of its budget for reconstruction and repair 10 percent
for the purchase of new techniques and technical equipment 3996 percent for infrastructure
2743 percent for education and health 636 percent for employment and agriculture and 2926
percent for other sectors of the economy
Projects include the construction of 30 clinics 27 cultural centers 6831 km of paved roads and
1032 m length of bridges Mongolia has received USD 55 billion in aid in the last two decades of
which 55 percent was in the form of low rate loans and 45 percent as non-repayable grants for
investments into agriculture infrastructure power and health sectors
Economic growth since 2011 has allowed Mongolia less aid than in the past The government has
now turned its focus on providing funding with concession agreements to large scale projects such
as the Nariin Sukhait-Shivee paved road and the power station at Mogoin gol Other projects include
Power Plant No 5 the Altanbulag-Ulaanbaatar-Zamyn Uud highway the Tavan Tolgoi- Khanbogd-
Khangi road and the Tuul Songino water reservoir complex
Source Zuunii Medee
TT POWER PLANT MAY NEED CONCLUSION TO OT DISPUTE SAYS DIRECTOR
Uninterrupted development of the Tavan Tolgoi power plant will ride on the outcome of disputes
concerning Oyu Tolgois underground mine said the director of the plant
―One of the main risks is the issue of a main user Enkhsaikhan said ―The key buyer of the power
from the TT Power Plant is OT Due to the uncertainty over phase twolsquo and unresolved matters
with the government of Mongolia OT is not regarded as a reliable buyer on a stand-alone basis
He added that the power company may request a guarantee from Oyu Tolgoi
A consortium that includes Koreas Posco Energy and Daewoo Engineering and Construction GDF
Suez Energy Asia Japans Marubeni Corp and Kansai Electric Power in March was selected for
development of the plant which has a preliminary estimate cost of USD 1 billion Those expenses
include installation of 150 kilometers of electric lines between Tavan Tolgoi and Oyu Tolgoi The
consortium will be expected to raise 30 percent of the cost itself while the remaining 70 percent
will come from bank loans However the uncertainty surrounding the Oyu Tolgoi copper mine could
create more hold ups
Source Zuunii Medee
CABINET TO CONCLUDE CONCESSION ON ALTANBULAG-ZAMYN UUD HIGHWAY
The Cabinet of Ministers ordered ministers to conclude a concession agreement for the Altanbulag-
Ulaanbaatar-Zamyn-Uud highway
The government is planning to establish the concession contract with the Chinggis Land
Development Group which according to the agreement shall have exclusive rights to construction
ownership and transfer of property using its own financing The concessionaire shall complete the
construction within three years after that shall operate the facility for another 30 years before
transferring the ownership to the Government
If Chinggis Land accepts these terms it would be responsible for developing a feasibility study and
blueprint of the project to be approved by the relevant ministries before concluding a financing
agreement The concession agreement will come into effect after the Chinggis Land Development
Group obtains a financing agreement for USD 1 billion from a commercial bank of Mongolia
The government will be responsible for freeing up the land where the highway is planned while the
Chinggis Land would cover the costs for doing so
Source Montsame
MNT 116 BILLION WILL BE SPENT FOR BUILDING EMERGENCY ALARMS IN UB
The National Emergency Management Agency has installed an emergency alarm system in 60
locations of Ulaanbaatar The alarm will alert citizens to natural disasters such as earthquakes
The alarms will be controlled from a center by microwave radios and satellite communication
devices
Source Udriin Sonin
EIU CLARIFIES EXTENT OF OFFICIAL ESTIMATES OF OIL SHALE RESERVES
The latest research from Mongolias mining ministry gives a clearer picture of oil shales
development potential in the coming years Although Mongolia has long been known to have
substantial oil shale deposits previous estimates were extrapolated from rudimentary surveys
conducted in the 1990s and thus left the actual reserves open to speculation
Plans to develop the industry took shape only in April 2013 when an American company Genie
Energy signed a five-year deal with the Petroleum Authority of Mongolia to explore oil shale
reserves in central Mongolia Genie also plans to build a USD 4 billion processing factory in Tuv
Aimag According to government projections the processing plant will generate USD 850 million of
tax revenue annually Aside from the economic benefits of the project domestic fuel sources could
help Mongolia to improve its energy security by loosening the countrys dependence on its powerful
neighbors At present 90 percent of Mongolias oil and related products come from Russia with most
of the remaining amount being imported from China
Yet the benefits of large-scale oil shale extraction are not as clear as they might seem at first
glance Most importantly Mongolias oil shale resources should not be confused with the shale oil
phenomenon that is currently sweeping the United States Oil shale (also called kerogen) is more
expensive to extract than shale oil and carries greater environmental costs In particular oil shale
requires a large amount of water to process which could be a risky proposition in Mongolia where
hydrological resources are already under strain Although other countriesmdashEstonia in particularmdashuse
oil shale as a substitute for coal extracting liquid fuel from the shale is a complex and relatively
untested process
Genie Energys progress on the project seems more substantial than that of comparable coal
liquefaction projects that have faltered in the region However environmental technical and
political limitations suggest that Mongolias overall dependence on foreign fuel will not change
significantly in the foreseeable future
―We remain doubtful that oil shale will play a significant role in Mongolia in the next two years so
our economic growth and trade forecasts will remain unchanged said the Source
Source Economist Intelligence Unit
MONGOLIA AND THE THREAT OF THE RESOURCE CURSE
Mongolia is at a crossroads while investors complain the government is dragging its feet on allowing
miners to start digging it is crucial that it get things right at the early stages of the resources
boom
Mongolias challenge will soon be the worlds says Richard Dobbs and his team at McKinsey in a
report predicting a USD 17 trillion investment bonanza by 2030 to keep up with demand for oil gas
and other materials In 1995 about 58 countries depended on resources for the bulk of their output
and wealth In 2011 that number had risen to 81 By 2030 roughly half of the worlds economies
will essentially become giant filling stations for developing superpowers from China to South Africa
That means that instead of the world moving toward greater transparency democracy and freer
markets we could see rising corruption levels and even greater income inequality
Economies with natural-resource endowments have a huge opportunity to transform their
prospects but history suggests that they could all too easily squander the windfall says Dobbs
director of the McKinsey Global Institute in London
The world would be wise to take steps today to break this cycle McKinsey recommends several
While not terribly original they include strengthening public institutions and good governance
building decent infrastructure boosting national competitiveness promoting sound fiscal policy
making and spending the windfall wisely while engaging in forward-looking economic and social
planning The trouble is that political will and integrity is often the first casualty once the minerals
start flowing out and the spoils come pouring in
Mongolia is at that very crossroads today Investors complain the government is dragging its feet on
allowing miners to start digging But its more important to get things right at the early stages of
the resources boom That means acting now to create the institutions and regulatory frameworks
needed to ensure revenue transparencymdashknowing exactly how much money is being dug out the
ground and where its going Why not set up a sovereign-wealth fund to save for Mongolias future
When the stakes are that high a little patience can go a long way
Source Bloomberg
MONGOLIAS NOMADS WARM TO SOLAR POWER
In Mongolia often known as the land of the blue skies the sun shines for 250 days on average each
year It beats down on the sparse plains and on the Gobi desert that spans the countrys southern
border with China
It shines even during the frigid winter days on the hundreds of thousands of nomads who still roam
the steppes herding animals and living in dome-like tents calling gers About 800000 of Mongolias
28 million inhabitants still live the traditional nomadic lifestyle that has remained largely
unchanged for generations Apart from the addition of motorbikes the occasional petrol generator
and a passing trade from intrepid tourists wanting to stay in a ger for the night life is almost the
same as that of many nomads grandparents and great-grandparents Almost but not exactly
Dotted across the steppes glints of light can be seen as the sun bounces off the solar panels that
have been installed on the sides of gers made of felt and yaks wool At the start of this millennium
Mongolias herders and nomads had little or no access to modern electric power and its potential
benefits But as of 2013 thanks to a concerted push by the Mongolian government almost 70
percent of nomadic people have access to electricity Bor a herder who mainly travels around
western Mongolias Arkhangai province is one of the people whose family benefits from portable
solar home systems (SHS)
We use it for generating the power for lighting in the ger charging phones we can also generate a
fridge to keep food longer and we can run a television That is very useful for us because we can
get the most recent weather forecast which is important for our work and keeping our animals
safe Before we had power it was very difficult Now it is almost like living in the city
The ability to charge mobile phones is also important for the herders who often have children
staying at boarding schools Access to electricity also allows families to contact emergency health-
care and doctors for advice without having to make the often arduous journey to the nearest village
or town
The solar systems were distributed and installed with the help of the World Bank after the
Mongolian governments National 100000 Solar Ger Electrification Program ran into difficulties A
World Bank report Capturing the Sun in the Land of the Blue Sky describes the difficulties faced by
the Mongolian government on its ambitious project
By 2005 five years into the plan 30000 families had been kitted out with an SHS but then the
program began to stagnateThe government of Mongolia recognized that considerably more effort
was necessary not only to keep the program on track but to scale-up implementation in order to
achieve the National 100000 Solar Ger Electrification Program target the report said In 2006 the
World Bank agreed to cover half of the initial outlay costs for each family as well as after-sales
maintenance with 50 centers set up across the country including at least one in each of its 21
provinces so that the herders would not have to travel to Ulaanbaatar every time the solar panels
needed maintenance
The SHS project also offers environmental benefits to a country where the ratio of carbon dioxide
emissions to economic output is ten times higher than the world average because of the increase in
mining over the past decade as the true extent of Mongolias mineral wealth became apparent The
solar systems are slowly replacing the diesel generators used by some nomads as a means of
generating power although they are still using stoves for heating burning wood coal and dung
throughout the year
Source Al Jazeera
IRON-ORE AND COAL PRICES GO SEPARATE WAYS
Prices of the key ingredients in steel productionmdashiron ore and coking coalmdashare moving along sharply
different paths as mining companies resist cutting coal output despite the market being awash with
the raw material
While iron-ore prices have risen 22 percent since May coking coal is still searching for a rebound
Coking-coal prices are off more than 4 percent over the same period China is on course for another
year of record steel production with supply directed to the construction of high-rise apartment
buildings the manufacture of luxury cars and other uses
There is simply too much coal on the market the International Energy Agency said in a report this
week
Shipments of steelmaking coal from Australiamdashthe worlds biggest exporter of the commoditymdashare
forecast by the government to rise to 178 million tons in 2015 from 145 million tons last year Most
goes to China which accounts for 60 percent of global demand In contrast global iron-ore
exporters are struggling to increase output in areas other than Australias remote Pilbara region
supporting prices of that commodity The spot price of iron ore climbed to nearly USD 140 a ton
earlier this month a four-month high Prices have since eased a bit to USD 13430 a ton but
remain well above the consensus forecasts of analysts at the start of this year
Coal miners could scale back production but that isnt always easy to do In Australia many miners
are locked into so-called take or pay contracts with rail and port operators Many analysts dont
expect coking-coal prices to rebound for at least another 12 months RBC Capital Markets expects
coking-coal prices to average USD 154 a ton in 2014 down from USD 159 a ton forecast for this
year Instead they see more chance that iron-ore prices will come down more sharply RBC predicts
an 11 percent fall in iron-ore prices next year as new supply from Anglo Americans Minas Rio
project and mines owned by Fortescue Metals Group Ltd is added to the market UBS is even more
bearish predicting iron ore will fall below USD100 in the second half of 2014
Source Wall Street Journal
ARE COMMODITIES TRADERS bdquoTOO BIG TO FAIL‟
When the banking industrylsquos top lobby group commissioned a report by on commodity trading
houses the idea was to show trading houses like Glencore Xstrata Vitol or Cargill were ―too big to
fail and therefore needed to be regulated in a similar manner to the banks
But instead of highlighting the inherent issues surrounding the industry the report found trading
companies posed less systemic risk than the big banks As a result the Global Financial Markets
Association which commissioned the report decided not to finalize or publish it (The GFMA claims
that it often commissions reports which are shared with regulators and other interested parties but
never published) But the debate hasnlsquot ended
A separate report published in July by the Centre for European Policy Studies a think-tank argued
the growth of commodity trading houses which underpin the global trade in raw materials could
―have systemic implications Commodities trader Trafigura has become the latest to wade into the
debate In its recent prospectus for a EUR 500 million bond issue the worldlsquos second largest metals
trader and third biggest oil trader addresses the GFMA report as well as the issue of systemic risk
Making some tart observations the trading house says the GFMA paper was aimed squarely at the
Financial Stability Board a group of global regulators
―[The report] was widely seen as a tactic by some banks active in the commodity trading space as a
way of creating more equality between market participants by seeking to usher in further
restrictions on pure commodity trading companies the prospectus says
Commodity traders are facing the need to be more open about their operations and lift the veil of
secrecy Indeed the author of the GFMA reportmdashCraig Pirrong a widely respected academicmdashis
working on a white paper on commodities traders Commissioned by Trafigura it will look at what
commodities trading houses activities and the recent trend to accumulate more assets risk
management as well as looking at different types of commodity companies
Source Financial Times
SMOG DARKENS SHANGHAIS PROSPECTS FOR BECOMING A GLOBAL FINANCIAL CENTER
In the debate over which matters more in China money or quality of life the quality-of-life side
may have found the ultimate argument If you cant breathe nothing else really matters And itlsquos a
debate Mongolia has to have as it makes its own steps towards industrial and economic growth
Chinas pollution problem is spreading and growing worse a fact on stark display last week in
Shanghai the countrys financial center A stretch of filthy-air days in that coastal city so
thoroughly shocked residentsmdashwho had largely escaped the smog that has long plagued the likes of
Beijing and Harbinmdashthat it inspired fresh talk about getting away from China Lawrence Shu a
Shanghai-based partner at Hylands Law Firm said he and his friends are thinking more seriously
about moving abroad
The smog had a big impact because it feels really bad if you cant breathe freely he said
The environment used to take a back seat among the Chinese But as they get richer they are
traveling abroad more making the pollution back home more obvious The Internet also
contributes Blue-sky pictures posted on social networks by Chinese travelers abroad constantly
remind folks of what is lacking at home and Chinese now use various apps to track air-quality data
If Shanghais smog discourages smart financial professionals from wanting to live there that will
hinder Chinas effort to create a global financial center If businesses such as financial companies
and luxury-goods makers perceive that Chinas elites are spending more time outside their home
country they will be less willing to invest in China
Most rich Chinese havent packed their bags and left yet but they are keeping their options open
Relocation is a big decision said Anne Wang who works in the financial industry in Shanghai But
just in case she recently received a US visa that would allow her to live there
Source Wall Street Journal
POLITICS
MINERALS POLICY ENTERS FINAL DISCUSSIONS
The government published a final draft of Mongolialsquos State Policy on the Minerals Sector for 2013
through 2025
The document was first presented to Parliament in July and is now entering final discussions during
the autumn plenary session of Parliament following a 42 percent drop of foreign investment and 23
percent fall in the currency year-on-year
―We have reviewed the proposed State Policy on the Mineral Sector which we feel will be a
positive step forward if passed said the Source ―The passing of this policy will result in more
transparency and an increasing participation from foreign investors That said it will take time for
these feats to be accomplished Investors will be weary of Government promises as they seek
longevity to prove Government intentions
The proposed policy is divided into four main sections rationale principles main policy and
implementation-results The major points stressed in the policy include transparency and
responsible mining The law sends the message that growth is going to be driven by private sector
participation and the intent to provide a stable investment environment technological innovation
and value-added activities
Key priorities of the law since it was first unveiled include stability of taxation and the legal
environment an end to any discrimination between foreign and national investors and the
preservation of strategic resources and deposits
This most recent version saw the inclusion of a new section supporting development of local areas
and the interests of local citizens Other key elements include explorationmdashwhich would see
greater government regulation for strategic mineral deposits while cutting down bureaucracy and
conducting scientific researchmdashproduction support and local support The new document also
highlights greater support for non-governmental organizations for the environment allowing them
to claim damages from mining operations the establishment of funds to support economic
diversification environmental protections and land rehabilitation
The new draft has removed the risk assessment section and replaced it with a section on
implementation This includes the improvement of the legal environment and producing of relevant
regulations programs and projects for 2013 to 2015 followed by the implementation of programs
and projects from 2014 to 2025 and finally the provision of conclusions on midterm policy
implementation and further planning for up to 2020 and 2025
―We believe that this policy will take us one step closer to attracting investors and supporting
private sector development in Mongolia said the Source ―Despite current investor hesitation this
state policy in addition to the new amended Minerals Law set to pass next year will further
encourage investors to enter the market and will build support for the junior mining community
Source Mongolian Investment Banking Group
PARLIAMENT UNANIMOUSLY BACKS ldquoSMART GOVERNMENTrdquo INITIATIVE
Parliament has unanimously backed President Tsakhia Elbegdorjs ―From Big Government to Smart
Government initiative for government reform concepts having signed a joint statement of support
on 13 December
The joint statement gives full support to the presidents initiative and commits to cooperation for
its undertaking This includes support for enhancing government systems and policies in line with
democracy and a market economy improving the capacities of public services and curtailing
government intervention into private business affairs Also included are protections to private
business including establishing government structures for rule of law support to domestic
industries and honoring contracts The fight against corruption is another main perogative
On 16 November 16 the Office of the President of Mongolia organized a national consultative
meeting on this topic at the Government Palace Elbegdorj next met with members of the
Parliament on 9 December to organize an open dialogue with representatives of Parliament for an
appeal for them to sign the joint statement Reaffirming the commitment of the Mongolian
lawmakers to a breakthrough reform of the Government the leaders of party floors and factions in
the Parliament and independent members of the Parliament signed the document for the reform on
December 13 2013
Source Montsame
GOVERNMENT CALLS TO END PRACTICE OF APPOINTING MPS AS MINISTERS
The coalition government has thrown their support behind President Tsakhia Elbegdorjs proposal to
prohibit Parliament members from serving as cabinet ministers
Democratic Party members discussed a draft resolution and proposed amendments submitted by the
president for the new restriction at a party meeting on Monday The draft amendments were
unanimously backed by the faction The Justice Coalition which includes the Monglian Peoples
Revolutionary Party and Mongolian Democratic Party came to the same conclusion following its own
meeting said coalition head N Battsereg on Monday
Source Montsame
COMMITTEE LEADERS TO BE ELECTED THIS MONTH
The coalition government will soon be electing officials to lead the various committees in
government
Parliament has 8 standing committees to elect leaders to this month with each committee to be
led by a representative of the coalition government Current committee heads are Ts Tsolmon at
the Security and Foreign Policy Committee G Bayarsaikhan at the Environment Food and
Agriculture Committee Z Bayanselenge at the Social Policy Education Culture and Science
Committee R Burmaa at the Petition and Requests Committee A Bakei at the State Structural
Committee Ts Davaasuren at the Budget Committee Sh Tuvdendorj at the Legislation
Committee and B Garamgaibaatar at the Economic Committee
Source Zuunii Medee
FOREIGN CURRENCY PAYMENTS BANNED FOR MININGEXPLORATION LICENSING FEES
The Ministry of Finance has banned the use of foreign currencies to pay for mining and exploration
licensing fees to the Mineral Resources Authority beginning 1 January 2014
The Ministry of Finance has prompted these entities and companies holding licenses to comply with
Mongolian currency law that states that all businesses and agencies must do business in Mongolian
tugrug According to the 2009 law transactions must not be carried out in foreign denominated or
foreign currency based rates
Source Newsmn
MINING MINISTRY TO COOPERATE WITH ASSOCIATION OF FLUORSPAR EXPLORERS
The Ministry of Mining Wednesday established a memorandum of mutual understanding with the
Association of Fluorspar Explorers (AFE) to cooperate in augmenting the countrylsquos export
In addition to expanding export goals include developing transparent and responsible mining
improving qualities and standards of fluorspar metallurgy and flotation concentrate and in
increasing the production output of the minerallsquos ore enrichment The hope is the memorandum
will create a launching point for a national program for fluorspar its exploitation increase the
volume of production by intensifying research and increase competitiveness in international
markets It will also be necessary to introduce the latest technology to the country along with
running joint trainings with foreign NGOs the Ministry said
Source Montsame
DP REJECTS AMARJARGAL‟S RESIGNATION
Parliament voted against MP R Amarjargallsquos resignation request on 12 December
During Tuesdaylsquos meeting the majority of the Standing Committee on State Structure voted against
Amarjargal`s resignation The head of the Democratic Party (DP) caucus D Erdenebat took a
strong stance against letting Amarjargal leave
Amarjargal said he wanted to resign to take responsibility on behalf of his party members for the
current political situation and economic restraints in Mongolia DP members agree with his
conclusion but encourage him to make the effort and participate for social change and
development Members of the opposition Mongolian Peoplelsquos Party members said that Amarjargal
could see the problems and nature of the majority of Parliament and praised his plan to resign
Source Newsmn
MPP HEAD TO STEP DOWN
Mongolian People Party (MPP) Head N Enkhbold has requested his resignation as party leader
MPP Deputy Head D Oyunkhorol said 9 December that Enkhbold submitted his request to step down
during a party meeting Oyunkhorol said Enkhboldlsquos resignation was due to personal reasons The
new party head will be appointed by the MPPs governing board
Source Udriin Sonin
FIFTH ROUND OF NEGOTIATIONS FOR THE JAPAN-MONGOLIA ECONOMIC PARTNERSHIP
AGREEMENT
The fifth round of the negotiations for the Japan-Mongolia Economic Partnership Agreement (EPA)
will be held from 16 to 19 December in Ulaanbaatar
The Japanese delegation will be led by Jun Yokota ambassador in charge of economic diplomacy
and the Mongolian delegation will be led by Ochirbat Chuluunbat vice minister for economic
development Experts from relevant ministries and agencies of both sides will participate in the
meetings
In this round negotiations are in areas including trade in goods and investment
Source 4-Traderscom
FIRST MONGOLIA-CHINA JOINT BORDER COMMISSION MEETING IN BEIJING
The very first meeting of Mongolia-China joint commission of borders took place 11 and 12
December in Beijing China
This meeting was co-chaired by T Togsbilguun a director of the Department of Neighbour
Countries of Mongolialsquos Ministry of Foreign Affairs and by Xiao Jiangguo a representative of border
checkpoint and seaport affairs Both sides shared on ideas for implementation of the
intergovernmental contract on the border regime and reached some agreements on conducting a
joint examination in the border signs and on activating the collaboration in law enforcement around
frontier areas After this they discussed issues of developing border checkpoints at a same level
putting some border checkpoints into a permanent regime giving an international status to four
checkpoints
The gathered also made a protocol on their meeting and inked its results The next meeting will run
in 2014 in Ulaanbaatar
Source Montsame
BELARUS TO OPEN EMBASSY IN MONGOLIA IN 2014
Belarus will open its embassy in Mongolia in 2014 reads a resolution from the Belarus Council of
Ministers of the Republic of Belarus from 12 December 2013 Belaruslsquo Finance Ministry will finance
the costs of opening and maintaining Belarusian Embassy in Mongolia from the funds set aside in its
national budget for the opening and maintenance of diplomatic missions and consular missions of
the Republic of Belarus abroad
Source Belarusian Telegraph Agency
HOWELL NEW JERSEY USA BECOMES SISTER CITY OF SUKHBAATAR DISTRICT
The Howell Township and the Sukhbaatar district in Mongolia signed a memorandum of
understanding to create sister citieslsquo between Howell New Jersey USA and the Sukhbaatar District
on Tuesday
The program was aimed at opening up talks on how each can benefit from one another Mayor
William Gatto said Howell Township is a very diverse city and theyve taken the relationship with
the Kalmyk community here in Howell and expanded it to a country where they have had no
relationship in the past he said
The sister citieslsquo program will allow both Mongolia and Howell to exchange ideas and come up
with new and better ways to do things that benefits both cultures Outside of Mongolia Howell has
the largest population of Kalmyks in the world with many living in the Freewood Acres section of
the township Gatto said
Some of the goals of the agreement include promoting a common prosperity and development for
both parties an electronic pen-pal program and education opportunities for exchange students
Through a translator Baljinnyam Gan-erdene of the Citizens Representatives Council of Sukhbaatar
District said he came to Howell to see how democracy works in the United States
Im really glad and hope that this unforgettable and successful visit opens the door to our
friendship and prosperity between our residents Gan-erdene said
Gatto gave Gan-erdene a Howell flag and a throw blanket created by the Historical Society
depicting the history of the township Gan-erdene also gave Gatto several items including a bronze
piece of art
Source NJcom
MONGOLIAN CALLIGRAPHY ADDED TO UNESCO CULTURAL HERITAGE LIST
State Parties at the 8th Session of the Intergovernmental Committee for the Safeguarding of the
Intangible Cultural Heritage in Azerbaijan unanimously agreed to register Mongolian calligraphy as
an intangible cultural heritage in need of urgent safeguarding on 2 December
―Mongolian heritage calligraphy is now being recognized by the world and I am grateful on behalf
of my country for decision makers said Secretary-General of Mongolian National Commission for
UNESCO Gundegmaa Jargalsaikhan He noted that Mongolian calligraphy was the fifth cultural
heritage item of Mongolia to be listed and now stands among the Mongolian epic traditional folk
dance the traditional music Tsuur and a circular breathing technique
Mongolian calligraphy is a 1000-year-old writing system that vertically connects continuous strokes
together to create a word Letters of Mongolian script have been created and taught by nomads
from generation to generation During the 1937-1940 purges of the Soviet era thousands of tutors
and traditional scholars of the script were killed Those who remained alive were banned from
mentoring the younger generation Soon after that or around 1946 a new Cyrillic script was
adopted as the only eligible script therefore banning all the teachings of old Mongolian script and
Latin lettering Only in the 1970s was the old Mongolian script re-introduced to scholars allowing a
limited number of classes in universities
After the 1990 democratic changes along with the revival of Mongolian identity interest in
traditional calligraphy reawakened As a sign of such revival the very first non-communist political
organization the Democratic Union of Mongolia used folded calligraphy as its main logo
Source Info Mongolia
THOUGH IMPROVING MONGOLIA STILL REELING UNDER CORRUPTION
The third joint survey by the Asia Foundation and Sant Maral Foundation to gather data on the
perception of corruption in Mongolia revealed that efforts to curb corruption in what is considered
as one of the worldlsquos most corrupt countries could be having impact
The survey shows a significant drop in the percentage of respondents who believe corruption has
increased in the last three years from 389 percent in November 2012 to 183 percent currently In
contrast in 2006 a majority of respondents (63) indicated that corruption has increased ―a lot in
the last three years The survey also shows that corruption has declined in importance as a critical
social problem since 2006 Despite these positive signs overall respondents indicated that
corruption remains a serious issue in some specific key areas
Conducted in September of this year the survey featured face-to-face interviews in 1360
households across Mongolia including seven districts in Ulaanbaatar and 21 counties in six
provinces A majority (766) cited that widespread corruption in the law enforcement agencies is
one of the main reasons the government has been unable to tackle corruption effectively When
corruption is perceived to be this widespread the attention will obviously turn to the performance
of the apex anti-corruption body the Independent Authority Against Corruption (IAAC) The survey
shows that the IAAC is slowly but surely beginning to gain confidence among citizens The
percentage of those surveyed who think that its performance is ―good or ―very good increased
from 78 percent in March 2010 to 203 percent in March 2013 In September 2013 the result shows
a new high of 294 percent
Peoplelsquos perceptions on corruption are often shaped by personal experiences Although very few
respondents in the survey said that they had actually paid a bribe themselves (8 percent about a 3
percent drop from 2012 and an 18 percent drop since 2006) as noted before many are not willing
to report instances where they are asked for one Similarly 36 percent of respondents said they
would not pay a bribe but 26 percent indicated that they would pay if they had the financial
capability
Basanta Pokharel is The Asia Foundation‟s chief of party for the STAGE program in Mongolia He
can be reached at basantapokharelasiafoundationorg The views and opinions expressed here
are those of the individual author and not those of The Asia Foundation
Source Asia Foundation
MPP DEMANDS DISMISSAL OF MINISTERS
Mongolian Peoplelsquos Party Chairman N Enkhbold and party head S Byambatsogt submitted to the
Speaker a request for the dismissal Minister of Finance Chultem Ulaan and of Economic
Development Minister Nyamjav ―Fortuna Batbayar
Our faction believes that these ministers must be held responsible for the worsening of the
national economic situation We also intend to do the same with other ministers after hearing
opinions of people said Byambatsogt
Source Montsame
FORMER TAVAN TOLGOI JSC DIRECTOR ARRESTED
The Independent Agency Against Corruption arrested former Tavan Tolgoi JSC director Kh
Tumenbayar for undisclosed reasons
An unnamed official source suggested that the arrest may be related to abuses of power and
payments to political parties as well as the construction of a high-class hotel in Dalanzadgad Soum
Umnugobi Aimag Kh Tumenbayar is a member of the Democratic Party a member of Parliament
and is an associate of ―Ajnai Bat-Erdene the Minister of Defense who helped Tumenbayar attain
position as the director of Tavan Tolgoi for 6 years and rise to head of the Umnugobi Aimag Citizens
Council
Tumenbayar voluntarily resigned from his position at Tavan Tolgoi last month The IAAC has
reportedly not given details to the reasons for the investigation opened on Tumenbayar because of
possible connections to high-ranking officials
Source Unuudur
MONGOLIA TURKMENISTAN JOIN INTERNATIONAL RACING FEDERATION
The International Federation of Horseracing Authorities (IFHA) has welcomed racing organizations
from Mongolia and Turkmenistan as affiliate members
Recent ratification to IFHA statutes at its annual General Assembly in October created a new
affiliate membership category within the Federation Thus the Federation of Mongolia Horse Racing
Sport and Trainers and the Turkmen Atlary State Association by unanimous vote of the IFHA
Executive Council in Paris in October have become the IFHAlsquos first two affiliate members
The Federation of Mongolian Horse Racing Sport and Trainers (FMHRST) is a non-governmental
organization (NGO) which serves to the development of equestrian sport in Mongolia and works to
protect the rights of horsemen who specialize in this national sport The new affiliates were
announced by IFHA Chairman Louis Romanet this week and several key appointments to IFHA
executive office positions and committees have also been made
Source Horse Talk
MONGOL TV HEAD MEDIA CAN HELP FIX THE BIG PROBLEMS
Nomin Chinbat head of Mongol TV has grander intentions than just ridding the countrys television
business of rampant pirated content and unlicensed formats The young executive wants to help
clean up Mongolian politics and the nation by creating a free and open media
―The networks are used as propaganda channels for politicians They are used very effectively every
four years at election time says Chinbat whom the Source named one of the 25 Most Powerful
Women in Global TV at MIPCOM 2013
―There are laws against piracy but they arenlsquot implemented explains Chinbat who says that
politicians in the country of roughly three million wonlsquot challenge journalists because their
relationships with them are too cozy
Mongol TV has invested in original programming licenses all of its imported content and runs
investigative journalism features highlighting social problems such as alcoholism and corruption
The company is organizing a Mongol TV Day for February 2014 to which it has invited major
international studios to raise awareness of the issues and introduce the global industry to
Mongolia Britainlsquos ITV and Americalsquos CBS are already confirmed and negotiations are ongoing with
other attendees The situation has improved in recent years with some channels having become
what Chinbat calls ―hybrids which license some sports rights but then steal others and copy
formats
―These days some of these channels might license 25 episodes of a format and make 50 But this is
actually progress says Chinbat
Chinbat and her team were at the Asian Television Forum (ATF) in Singapore looking for new
formats that can be produced within the constraints of Mongolian television budgets However with
Mongolias young populationmdash65 percent of the country is under 35 years oldmdashmobile viewing is on
the rise and the network is already working second-screen utilization and new media applications
This demographic sweet spot should guarantee strong growth in the population economy and
nascent entertainment sector in Mongolia in the coming decades
Source Hollywood Reporter
ANNOUNCEMENTS
ldquoMM TODAYrdquo ON MNB-TV FRIDAY 1900 TO 1910
BCM is pleased to announce that Mongolian National Broadcasting continues its cooperation with
BCM on ―MM Today This English news program is aired every Friday for 10 minutes and is
scheduled from 1900 to 1910 tonight Tune in to watch this program that reports stories from
todaylsquos BCM NewsWire
BCM WEBSITES
MONGOLIAN WEBSITE bdquoPRESENTATIONS‟ AND bdquoNEWS‟ SECTIONS
The Presentationslsquo section on BCMlsquos Mongolian website can be reached via bcmmnitgeluud
As a key component of BCMlsquos Mongolian website articles from the Newslsquo section and the
government website Open-Governmentmn are regularly updated
S Oyun Minister of Environment and Green Development presentation at BCM monthly meeting on
May 27 added to Mongolian website bcmongoliaorgmnилтгэлүүд
- Байгаль орчин ногоон хөгжлийн сайд СОюун Байгаль орчин ногоон хөгжлийн шинэчлэлийн
бодлого үйл ажиллагаа МБЗ-ийн сарын уулзалт 5 сарын 27 2013
___________________________________________
ENGLISH WEBSITE PRESENTATIONS MONGOLIA REPORTS bdquoINTERVIEWSbdquo MONGOLIAN
BUSINESS NEWS‟ bdquoPHOTO GALLERY‟
The following 13 presentations are from the Mongolia Investment Summit- 2013 in Hong Kong
November 18-20
- Regulatory Update Navigating Mongolialsquos legal framework for foreign direct investment
Javkhlanbaatar Sereeter Director General Foreign Investment Regulations and Registration
Department MINISTRY OF ECONOMIC DEVELOPMENT OF MONGOLIA
- Investment keynote Investing into Mongolia in 2013 ndash Where do the opportunities lie James
Passin Co-Founder and Manager FIREBIRD MONGOLIA FUND
- Development keynote Key challenges and opportunities for continued growth in Mongolia
Randolph Koppa President TRADE AND DEVELOPMENT BANK OF MONGOLIA
- Outlining government policies and long-term plans for Mongolialsquos mining sector Amarjargal
Khurelbat Head of International Cooperation Division MINISTRY OF MINING OF MONGOLIA
- From copper to met coal Demand and price outlook and expected impact on Mongolialsquos economy
Ghee Peh Managing Director Metals and Mining Research UBS SECURITIES ASIA
- How Mongolian banks and financial institutions are dealing with the challenges and opportunities
of a fast growing economy Norihiko Kato Chief Executive Officer KHAN BANK
- Update on the Mongolian stock market ndash Impact of the new Securities Law Altai Khangai Chief
Executive Officer MONGOLIAN STOCK EXCHANGE
- From investment banking to trade finance to micro credits to insurance Amartuvshin Hanibal
Managing Director TENGER FINANCIAL GROUP LLC
- Spotlight presentations Showcasing Mongolian investment opportunities Peter Morrow Board
Director ASIA PACIFIC INVESTMENT PARTNERS
- Spotlight presentation Showcasing Mongolian investment opportunities Munkhbat Davaatseren
CEO of Golomt Securities GOLOMT BANK
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources
Batmunkh Batkhuu Chairman SHARYN GOL JSC
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources
Jimmie Wilde Chief Operating Officer BERKH UUL JSC
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources Mona
Forster Executive VP ENTREacuteE GOLD INC
The following two presentations are from the ―ANTI-CORRUPTION LEGISLATIONPOLICY
INTERNATIONAL BEST PRACTICE ON TRANSPARENCY training seminar for businesses in
Ulaanbaatar November 18 2013
-―International business standard on transparency by Jelena Pesic Director PwC
-―Finlandlsquos best practice on transparency and anti corruption by Dr Pekka Hallberg (as it is
worldlsquos number one) Emeritus President of the Supreme Administrative Court of Finland
The following 15 presentations are from the Mongolia Mining Summit Perth Australia October 29-
31 2013
bull Mongolialsquos Minerals Future and Development by Otgochuluu Ch Director General Department of
strategic policy and planning at Ministry of Mining Mongolia at the Mongolian Mining Summit 2013
Perth Australia Oct 29-31 2013
bull Mongolian Economy Investment OpportunitiesChallenges Jim Dwyer Executive Director
Business Council of Mongolia at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31
2013
bull Oyu Tolgoi Lessons from the Gobi Houston Spencer Vice President Communications and Media
Relations Oyu Tolgoi at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Market dynamics for Mongolian coking coal in the Chinese market Graeme Hancock President
and Chief Representative at Anglo American Mongolia at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Speech by Mr Ariunbold Byamba Deputy Director Erdenes MGL LLC at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull Launching Mining Projects in MongoliandashA Major Contractorlsquos Perspective Eric Erdenebat
Tseveendorj Country Manager Orica Limited at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Investing in a dynamic legislative environment Elisabeth Ellis Managing Partner Ulaanbaatar
Minter Ellison at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Sandvik In Pit Crushing amp Conveying (IPCC) Doug Turnbull Principal Mining Engineer Sandvik
Mining Systems at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Ovoot Coking Coal Project David Paull Managing Director Aspire Mining at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull The business of being a third neighbor David Landers General Manager East Asian Growth
Markets at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Nuurst Thermal Coal Project Daniel Rohr Chief Financial Officer Modun Resources Ltd at the
Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Culture matters in building sustainable long-term business relationships Hana Tserenkhand
Byambadash Business Development Consultant AusMon Consulting and Dr Christine Hogan Adjunct
Professor Curtin University Consultant amp Author at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Maximizing Business Benefits from Your IT Investment Brad Skeggs Executive Director COSOL at
the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Presentation by Battsengel Gotov CEO Mongolian Mining Corporation at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull Mongolian Mining Sector Present and Future Developments NAlgaa Executive Director
Mongolian National Mining Association at the Mongolian Mining Summit 2013 Perth Australia Oct
29-31 2013
The ―Mongolia Reports section includes the following
- ―Ministry of Finance of Mongolia 2013 Government Debt Auctions by Bank of Mongolia
- ―Doing Business in Mongolia 2013 Country Commercial Guide for US Companies by US
Embassy
- ―Real Estate Report 2013 by Mongolian Properties
- ―Selected Macroeconomic Indicators November 20 2013 by International Monetary Fund
- ―2013 Second Annual Mongolian CEO Survey from PricewaterhouseCoopers Audit LLC
- ―Selected Macroeconomic Indicators data through October 16 2013 by International Monetary
Fund
- ―IMF Completes 2013 Article IV Mission to Mongolia by International Monetary Fund
The following are added to Interview Section from the Oxford Business Group Mongolia Reports
2013 book
bull B Byambasaikhan Chairman Business Council of Mongolia ―Talk is cheap
bull President Ts Elbegdorj ―Diversifying for growth
bull Jim Dwyer Executive Director Business Council of Mongolia ―Non-mining sectors budding
bull Peter Morrow Chairman American University of Mongolia ―Filling in the blanks
bull N Zoljargal Governor Bank of Mongolia ―Sustainable vision
bull Gansukh Minister of Roads and Transportation ―Accessing new markets
bull J Od President MCS Group ―Building interest
bull B Chuluunbaatar President and CEO of Monnis Group ―Climbing the ranks
bull Cameron McRae President and CEO Oyu Tolgoi ―Sitting on a copper mine
BCMs English website includes the ―Mongolia Business News section where the Open Letter to
Parliament and Government is available for download
BCM continuously posts news stories and analysis of relevance to Mongolia at Mongolian Business
News before they are all put together each week for Fridays weekly NewsWire
The ―Photo Gallery contains photos from the 6th Anniversary BCM Renewal dinner on November
11 2013
BCM Football Cup 2013 pictures are posted to the website - httpbcmongoliaorgenphotos350-
enalbumalbumid=200
The BCM NewsWire will continue to be issued each Friday incorporating items already on the home
page for a consolidated account of the weeklsquos events
SOCIAL NETWORK WITH BCM
BCM LAUNCHES NEW LINKED-IN COMPANY PAGE
The Business Council of Mongolia has launched a new company page on the social networking
website LinkedIn to network its members and followers including small-medium enterprises (SMEs)
The new page will allow BCM to alert followers to the latest news and information critical to their
businesses Memberslsquo businesses will be promoted Additionally BCM plans to deliver monthly
infographics on the latest data as well as videos and other media content as they come The bulk of
the content on the new page will be in Mongolian language to better cater to BCMs Mongolian-
speaking audience and members The following link can direct you to the New BCMs Linked-in page
httpwwwlinkedincomcompanybusiness-council-of-mongoliatrk=company_logo
The Business Council of Mongolia (BCM) has expanded its reach to your favorite social networks
Keep up to date on the latest business deals in Mongolia and how the climate for investment is
improving each day with BCM
Add BCM on Facebook at httpswwwfacebookcomTheBusinessCouncilOfMongolia to read the
latest announcements and comment on events carried in the NewsWire with the community
Hear breaking news and announcements as they happen when you follow BCM on Twitter at
httpstwittercombcmongolia
We have now 2482 fans on our Facebook fans page 1527 connections on LinkedIn network and
835 followers on Twitter
Of course for news information interviews event photos and announcements regarding our
organization visit the official BCM website at httpbcmongoliaorgen
ECONOMIC INDICATORS
INFLATION
Year 2006 60 [source National Statistical Office of Mongolia (NSOM)]
Year 2007 151 [source NSOM]
Year 2008 221 [source NSOM]
Year 2009 42 [source NSOM]
Year 2010 130 [source NSOM]
Year 2011 102 [source NSOM]
November 30 2013 120 [source NSOM]
Year-over-year (y-o-y) nationwide
Note 111 y-o-y Ulaanbaatar city November 30 2013
CENTRAL BANK POLICY LOAN RATE
December 31 2008 975 [source IMF]
March 11 2009 1400 [source IMF]
May 12 2009 1275 [source IMF]
June 12 2009 1150 [source IMF]
September 30 2009 1000 [source IMF]
May 12 2010 1100 [source IMF]
April 28 2011 1150 [source IMF]
August 25 2011 1175 [source IMF]
October 25 2011 1225 [source IMF]
March 19 2012 1275 [source Mongol Bank]
April 18 2012 1325 [source Mongol Bank]
January 25 2013 1250 [source Mongol Bank]
April 8 2013 1150 [source Mongol Bank]
June 25 2013 1050 [source Mongol Bank]
CURRENCY RATES ndash DECEMBER 19 2013
Currency Name Currency Rate
US dollar USD 164138
Euro EUR 224680
Japanese yen JPY 1579
British pound GBP 268874
Hong Kong dollar HKD 21170
Chinese Yuan CNY 27031
Russian Ruble RUB 4981
South Korean won KRW 155
Disclaimer Except for reporting on BCMlsquos activities all information in the BCM NewsWire is
selected from various news sources Opinions are those of the respective news sources
between 1996 and 2011
Centerra had said earlier that it viewed the governments claim as exaggerated and unfounded
The company disagrees with these charges and plans to give explanations on this matter in the
nearest time said a spokesman for the Kumtor Operating Company (KOC) the Centerra subsidiary
that runs the Kumtor mine in the Tien Shan mountains
The Toronto-listed miner which also owns the Boroo gold mine in Mongolia is already under
pressure from the Kyrgyz parliament which demands the state hold 67 percent in a proposed joint
venture to run the mine In September the government and Centerra Gold signed a memorandum
of understanding paving the way for Kyrgyzstan to swap its 327 percent stake in the Canadian firm
for 50 percent in a venture that would own Kumtor But in October the legislature voted to tear up
the document and seek control over the planned venture It gave the cabinet until 23 December to
report on its talks with Centerra Gold on setting up the venture Pearson said Centerra is having
constructive dialogue with the Kyrgyz government
Source Reuters
ECONOMY
FITCH AFFIRMS TWO MONGOLIAN BANKS AT B REVISES OUTLOOKS TO bdquoNEGATIVE‟
Fitch Ratings on 16 December revised the outlook on the Long-Term Issuer Default Ratings (IDRs) of
Khan Bank LLC and XacBank LLC to ―Negative from ―Stable At the same time the agency
affirmed the two Mongolian banks IDRs and viability ratings at B and b
The revision of the outlooks on both banks IDRs reflects weakening operating conditions as
indicated by the change in the Outlook for the Mongolian sovereign (B+) to Negative from Stable on
13 December The sovereigns outlook was revised due to mounting risks to the countrys economic
and financial stability Ratings on the two banks could be downgraded if pressures on asset quality
and liquidity intensify Persistent local-currency depreciation would reduce borrowers repayment
capacity and could lead to accelerated deposit withdrawals given the countrys high level of
dollarization
The banks ratings also remain sensitive to the withdrawal of credit stimulus as this could result in
asset deterioration on slowing economic growth or higher inflation Further decline in the
governments international reserves could also trigger a negative rating action as the banks
currency-related risk is counterbalanced by the authorities swap facility and unlimited foreign-
currency conversion Both banks ratings are also sensitive to any changes in their steady access to
capital from private-sector owners
Khan Banks Support Rating and Support Rating Floor (SRF) reflect Fitchs view that as the largest
bank in Mongolia it would be likely to receive state support in case of need However the
Mongolian sovereigns ability to provide timely support to the banking system remains limited as
underlined by its IDR of B+ A downgrade of the sovereign ratings would point to weakening in the
Mongolian governments ability to provide timely support to the banking system which put negative
rating pressure on Khan Banks SR and SRF In contrast Fitch expects XacBanks SR and SRF of 5B-
to be maintained even if the sovereigns rating is downgraded to B This is because the current SR
and SRF already reflect the agencys view that support from the sovereign in case of need cannot
be relied upon
The rating actions are as follows Khan Bank Long-Term Foreign-Currency IDR affirmed at B
Outlook revised to Negative from Stable Short-Term Foreign-Currency IDR affirmed at B Long-
Term Local-Currency IDR affirmed at B Outlook revised to Negative from Stable Viability Rating
affirmed at b Support Rating affirmed at 4 Support Rating Floor affirmed at B XacBank Long-
Term Foreign-Currency IDR affirmed at B Outlook revised to Negative from Stable Short-Term
Foreign-Currency IDR affirmed at B Long-Term Local-Currency IDR affirmed at B Outlook revised
to Negative from Stable Viability Rating affirmed at b Support Rating affirmed at 5 Support
Rating Floor affirmed at B-
Source Fitch Ratings
MONGOLIA SCORE FALLS ON POLITICAL RISKS INDEX FOR MINING INVESTMENT
An annual survey by Behre Dolbear of political risks saw Mongolia decline 5 points in an index
ranking Mongolia 19th out of 25 countries
Mongolia this year received a score of 269 compared with 32 last year Leading the countries
surveyed was Australia down 07 points from last year Russia with a total score of 171 compared
with 16 last year was the lowest ranking
The 25 countries considered in this yearlsquos survey are ranked based on seven criteria
-the countrylsquos economic system
-the countrylsquos political system
-the degree of social issues affecting mining in the country
-delays in receiving permits due to bureaucratic and other issues
-the degree of corruption prevalent in the country
-the stability of the countrylsquos currency and
-the competitiveness of the countrylsquos tax policy
Each criterion is rated on a qualitative scale from one (worst) to 10 (best) that reflects conditions
that promote investment growth in the mining sector The maximum score attainable for a country
is 70 points
Source Behre Dolbear Group
MONGOLIA LOOKS FOR SECOND CHANCE WITH FOREIGN INVESTORS
Saruul Ganbaatar the deputy head of Mongolias stock exchange hopes the countrys days of
interventionist economic policies are over and new laws ensuring foreign investors access to the
frontier markets industries will bring back sorely needed cash
Ganbaatar 32 who cut his investment teeth in Chicagos financial houses after graduating from
Loyola University is careful not to over-promise on what the stock market can deliver in 2014 and
beyond in terms of new listings or overall growth In October a law was passed easing ownership
restrictions for private companies to invest in the strategic industries A Securities Markets Law
coming into effect 1 January 2014 is expected to provide the key ingredient to attract deep
pocketed institutional investors such as mutual funds to invest
This really is the missing ingredient said Ganbaatar who has been traveling the globe promoting
the changes in the laws to global investors for the past two weeks
The stock index fell 19 percent in 2012 and year-to-date is down 115 percent although it did start
to climb with the newly passed laws On 1 January the new Securities Markets Law will allow
Mongolias commercial banks to offer custodial banking services Custodial banks serve as safeguards
for a firm or individuals financial assets playing a critical role in the final settlement of market
transactions Total market capitalization now is between USD 900 million and USD 1 billion Dont
expect the number of new listings to mushroom There may instead be a cull of companies Fifty-
five to 60 of them many of which have not traded in years are being reviewed for potential
delisting
The Mongolian Stock Exchange 100 percent state-owned is perhaps itself a candidate for
privatization It has been in a strategic partnership with the London Stock Exchange for two and a
half years
They have the right of first refusal he said
Source Reuters
CPI INCREASES TO 12 PERCENT YEAR-OVER-YEAR IN NOVEMBER
The National Statistical Office reported a 12 percent increase in the national consumer price index
(CPI) in November year-over-year
The CPI growth which also in November grew 13 percent from the previous month was explained
by a 14 percent increase in food prices and non-alcoholic beverages 23 percent for clothing
footwear and fabrics and 07 percent for housing water electricity and fuels
Source Info Mongolia
GROWTH SEEN IN EXPORT OF PRECIOUS METALS
The export value of precious metals grew 114 percent in November from the month before and 63
percent from the same period in 2012 according to the National Statistical Office
Exports totaled USD 38 billion in the year to December while imports grew to USD 58 billion The
foreign trade balance saw a deficit of USD 2 billion November saw exports of USD 381 million and
imports of USD 514 million with exports and imports in decline between July and November The
value of export products for the first 11 months was USD 11 billion Despite the gain in precious
metal exports exported minerals which represented 81 percent of all exports in the year to
November fell 129 percent from the year before
Source Zuunii Medee
MNT 788 BILLION WILL BE ENTERED INTO THE STABILIZATION FUND
The Stabilization Fund is set to collect MNT 49 billion this year and MNT 298 billion next
The Stabilization Fund was established to collect surplus revenue in years of economic gains from
the mining sector to cushion possible annual losses during economic downturns and weak
commodity demand Any gain in the price for gold and coal next year will also be reflected in
allotments to the fund
Source Zuunii Medee
ECONOMIC DEVELOPMENT MINISTRY PLANS TO PUT 81 OF BUDGET INTO CONSTRUCTION
The Economic Development Ministry plans to invest MNT 814 percent of its total investment budget
into construction
Beginning 1 January 2014 the ministry will provide MNT 9303 in loans toward the construction
sector The ministry will spend 39 percent of its budget for reconstruction and repair 10 percent
for the purchase of new techniques and technical equipment 3996 percent for infrastructure
2743 percent for education and health 636 percent for employment and agriculture and 2926
percent for other sectors of the economy
Projects include the construction of 30 clinics 27 cultural centers 6831 km of paved roads and
1032 m length of bridges Mongolia has received USD 55 billion in aid in the last two decades of
which 55 percent was in the form of low rate loans and 45 percent as non-repayable grants for
investments into agriculture infrastructure power and health sectors
Economic growth since 2011 has allowed Mongolia less aid than in the past The government has
now turned its focus on providing funding with concession agreements to large scale projects such
as the Nariin Sukhait-Shivee paved road and the power station at Mogoin gol Other projects include
Power Plant No 5 the Altanbulag-Ulaanbaatar-Zamyn Uud highway the Tavan Tolgoi- Khanbogd-
Khangi road and the Tuul Songino water reservoir complex
Source Zuunii Medee
TT POWER PLANT MAY NEED CONCLUSION TO OT DISPUTE SAYS DIRECTOR
Uninterrupted development of the Tavan Tolgoi power plant will ride on the outcome of disputes
concerning Oyu Tolgois underground mine said the director of the plant
―One of the main risks is the issue of a main user Enkhsaikhan said ―The key buyer of the power
from the TT Power Plant is OT Due to the uncertainty over phase twolsquo and unresolved matters
with the government of Mongolia OT is not regarded as a reliable buyer on a stand-alone basis
He added that the power company may request a guarantee from Oyu Tolgoi
A consortium that includes Koreas Posco Energy and Daewoo Engineering and Construction GDF
Suez Energy Asia Japans Marubeni Corp and Kansai Electric Power in March was selected for
development of the plant which has a preliminary estimate cost of USD 1 billion Those expenses
include installation of 150 kilometers of electric lines between Tavan Tolgoi and Oyu Tolgoi The
consortium will be expected to raise 30 percent of the cost itself while the remaining 70 percent
will come from bank loans However the uncertainty surrounding the Oyu Tolgoi copper mine could
create more hold ups
Source Zuunii Medee
CABINET TO CONCLUDE CONCESSION ON ALTANBULAG-ZAMYN UUD HIGHWAY
The Cabinet of Ministers ordered ministers to conclude a concession agreement for the Altanbulag-
Ulaanbaatar-Zamyn-Uud highway
The government is planning to establish the concession contract with the Chinggis Land
Development Group which according to the agreement shall have exclusive rights to construction
ownership and transfer of property using its own financing The concessionaire shall complete the
construction within three years after that shall operate the facility for another 30 years before
transferring the ownership to the Government
If Chinggis Land accepts these terms it would be responsible for developing a feasibility study and
blueprint of the project to be approved by the relevant ministries before concluding a financing
agreement The concession agreement will come into effect after the Chinggis Land Development
Group obtains a financing agreement for USD 1 billion from a commercial bank of Mongolia
The government will be responsible for freeing up the land where the highway is planned while the
Chinggis Land would cover the costs for doing so
Source Montsame
MNT 116 BILLION WILL BE SPENT FOR BUILDING EMERGENCY ALARMS IN UB
The National Emergency Management Agency has installed an emergency alarm system in 60
locations of Ulaanbaatar The alarm will alert citizens to natural disasters such as earthquakes
The alarms will be controlled from a center by microwave radios and satellite communication
devices
Source Udriin Sonin
EIU CLARIFIES EXTENT OF OFFICIAL ESTIMATES OF OIL SHALE RESERVES
The latest research from Mongolias mining ministry gives a clearer picture of oil shales
development potential in the coming years Although Mongolia has long been known to have
substantial oil shale deposits previous estimates were extrapolated from rudimentary surveys
conducted in the 1990s and thus left the actual reserves open to speculation
Plans to develop the industry took shape only in April 2013 when an American company Genie
Energy signed a five-year deal with the Petroleum Authority of Mongolia to explore oil shale
reserves in central Mongolia Genie also plans to build a USD 4 billion processing factory in Tuv
Aimag According to government projections the processing plant will generate USD 850 million of
tax revenue annually Aside from the economic benefits of the project domestic fuel sources could
help Mongolia to improve its energy security by loosening the countrys dependence on its powerful
neighbors At present 90 percent of Mongolias oil and related products come from Russia with most
of the remaining amount being imported from China
Yet the benefits of large-scale oil shale extraction are not as clear as they might seem at first
glance Most importantly Mongolias oil shale resources should not be confused with the shale oil
phenomenon that is currently sweeping the United States Oil shale (also called kerogen) is more
expensive to extract than shale oil and carries greater environmental costs In particular oil shale
requires a large amount of water to process which could be a risky proposition in Mongolia where
hydrological resources are already under strain Although other countriesmdashEstonia in particularmdashuse
oil shale as a substitute for coal extracting liquid fuel from the shale is a complex and relatively
untested process
Genie Energys progress on the project seems more substantial than that of comparable coal
liquefaction projects that have faltered in the region However environmental technical and
political limitations suggest that Mongolias overall dependence on foreign fuel will not change
significantly in the foreseeable future
―We remain doubtful that oil shale will play a significant role in Mongolia in the next two years so
our economic growth and trade forecasts will remain unchanged said the Source
Source Economist Intelligence Unit
MONGOLIA AND THE THREAT OF THE RESOURCE CURSE
Mongolia is at a crossroads while investors complain the government is dragging its feet on allowing
miners to start digging it is crucial that it get things right at the early stages of the resources
boom
Mongolias challenge will soon be the worlds says Richard Dobbs and his team at McKinsey in a
report predicting a USD 17 trillion investment bonanza by 2030 to keep up with demand for oil gas
and other materials In 1995 about 58 countries depended on resources for the bulk of their output
and wealth In 2011 that number had risen to 81 By 2030 roughly half of the worlds economies
will essentially become giant filling stations for developing superpowers from China to South Africa
That means that instead of the world moving toward greater transparency democracy and freer
markets we could see rising corruption levels and even greater income inequality
Economies with natural-resource endowments have a huge opportunity to transform their
prospects but history suggests that they could all too easily squander the windfall says Dobbs
director of the McKinsey Global Institute in London
The world would be wise to take steps today to break this cycle McKinsey recommends several
While not terribly original they include strengthening public institutions and good governance
building decent infrastructure boosting national competitiveness promoting sound fiscal policy
making and spending the windfall wisely while engaging in forward-looking economic and social
planning The trouble is that political will and integrity is often the first casualty once the minerals
start flowing out and the spoils come pouring in
Mongolia is at that very crossroads today Investors complain the government is dragging its feet on
allowing miners to start digging But its more important to get things right at the early stages of
the resources boom That means acting now to create the institutions and regulatory frameworks
needed to ensure revenue transparencymdashknowing exactly how much money is being dug out the
ground and where its going Why not set up a sovereign-wealth fund to save for Mongolias future
When the stakes are that high a little patience can go a long way
Source Bloomberg
MONGOLIAS NOMADS WARM TO SOLAR POWER
In Mongolia often known as the land of the blue skies the sun shines for 250 days on average each
year It beats down on the sparse plains and on the Gobi desert that spans the countrys southern
border with China
It shines even during the frigid winter days on the hundreds of thousands of nomads who still roam
the steppes herding animals and living in dome-like tents calling gers About 800000 of Mongolias
28 million inhabitants still live the traditional nomadic lifestyle that has remained largely
unchanged for generations Apart from the addition of motorbikes the occasional petrol generator
and a passing trade from intrepid tourists wanting to stay in a ger for the night life is almost the
same as that of many nomads grandparents and great-grandparents Almost but not exactly
Dotted across the steppes glints of light can be seen as the sun bounces off the solar panels that
have been installed on the sides of gers made of felt and yaks wool At the start of this millennium
Mongolias herders and nomads had little or no access to modern electric power and its potential
benefits But as of 2013 thanks to a concerted push by the Mongolian government almost 70
percent of nomadic people have access to electricity Bor a herder who mainly travels around
western Mongolias Arkhangai province is one of the people whose family benefits from portable
solar home systems (SHS)
We use it for generating the power for lighting in the ger charging phones we can also generate a
fridge to keep food longer and we can run a television That is very useful for us because we can
get the most recent weather forecast which is important for our work and keeping our animals
safe Before we had power it was very difficult Now it is almost like living in the city
The ability to charge mobile phones is also important for the herders who often have children
staying at boarding schools Access to electricity also allows families to contact emergency health-
care and doctors for advice without having to make the often arduous journey to the nearest village
or town
The solar systems were distributed and installed with the help of the World Bank after the
Mongolian governments National 100000 Solar Ger Electrification Program ran into difficulties A
World Bank report Capturing the Sun in the Land of the Blue Sky describes the difficulties faced by
the Mongolian government on its ambitious project
By 2005 five years into the plan 30000 families had been kitted out with an SHS but then the
program began to stagnateThe government of Mongolia recognized that considerably more effort
was necessary not only to keep the program on track but to scale-up implementation in order to
achieve the National 100000 Solar Ger Electrification Program target the report said In 2006 the
World Bank agreed to cover half of the initial outlay costs for each family as well as after-sales
maintenance with 50 centers set up across the country including at least one in each of its 21
provinces so that the herders would not have to travel to Ulaanbaatar every time the solar panels
needed maintenance
The SHS project also offers environmental benefits to a country where the ratio of carbon dioxide
emissions to economic output is ten times higher than the world average because of the increase in
mining over the past decade as the true extent of Mongolias mineral wealth became apparent The
solar systems are slowly replacing the diesel generators used by some nomads as a means of
generating power although they are still using stoves for heating burning wood coal and dung
throughout the year
Source Al Jazeera
IRON-ORE AND COAL PRICES GO SEPARATE WAYS
Prices of the key ingredients in steel productionmdashiron ore and coking coalmdashare moving along sharply
different paths as mining companies resist cutting coal output despite the market being awash with
the raw material
While iron-ore prices have risen 22 percent since May coking coal is still searching for a rebound
Coking-coal prices are off more than 4 percent over the same period China is on course for another
year of record steel production with supply directed to the construction of high-rise apartment
buildings the manufacture of luxury cars and other uses
There is simply too much coal on the market the International Energy Agency said in a report this
week
Shipments of steelmaking coal from Australiamdashthe worlds biggest exporter of the commoditymdashare
forecast by the government to rise to 178 million tons in 2015 from 145 million tons last year Most
goes to China which accounts for 60 percent of global demand In contrast global iron-ore
exporters are struggling to increase output in areas other than Australias remote Pilbara region
supporting prices of that commodity The spot price of iron ore climbed to nearly USD 140 a ton
earlier this month a four-month high Prices have since eased a bit to USD 13430 a ton but
remain well above the consensus forecasts of analysts at the start of this year
Coal miners could scale back production but that isnt always easy to do In Australia many miners
are locked into so-called take or pay contracts with rail and port operators Many analysts dont
expect coking-coal prices to rebound for at least another 12 months RBC Capital Markets expects
coking-coal prices to average USD 154 a ton in 2014 down from USD 159 a ton forecast for this
year Instead they see more chance that iron-ore prices will come down more sharply RBC predicts
an 11 percent fall in iron-ore prices next year as new supply from Anglo Americans Minas Rio
project and mines owned by Fortescue Metals Group Ltd is added to the market UBS is even more
bearish predicting iron ore will fall below USD100 in the second half of 2014
Source Wall Street Journal
ARE COMMODITIES TRADERS bdquoTOO BIG TO FAIL‟
When the banking industrylsquos top lobby group commissioned a report by on commodity trading
houses the idea was to show trading houses like Glencore Xstrata Vitol or Cargill were ―too big to
fail and therefore needed to be regulated in a similar manner to the banks
But instead of highlighting the inherent issues surrounding the industry the report found trading
companies posed less systemic risk than the big banks As a result the Global Financial Markets
Association which commissioned the report decided not to finalize or publish it (The GFMA claims
that it often commissions reports which are shared with regulators and other interested parties but
never published) But the debate hasnlsquot ended
A separate report published in July by the Centre for European Policy Studies a think-tank argued
the growth of commodity trading houses which underpin the global trade in raw materials could
―have systemic implications Commodities trader Trafigura has become the latest to wade into the
debate In its recent prospectus for a EUR 500 million bond issue the worldlsquos second largest metals
trader and third biggest oil trader addresses the GFMA report as well as the issue of systemic risk
Making some tart observations the trading house says the GFMA paper was aimed squarely at the
Financial Stability Board a group of global regulators
―[The report] was widely seen as a tactic by some banks active in the commodity trading space as a
way of creating more equality between market participants by seeking to usher in further
restrictions on pure commodity trading companies the prospectus says
Commodity traders are facing the need to be more open about their operations and lift the veil of
secrecy Indeed the author of the GFMA reportmdashCraig Pirrong a widely respected academicmdashis
working on a white paper on commodities traders Commissioned by Trafigura it will look at what
commodities trading houses activities and the recent trend to accumulate more assets risk
management as well as looking at different types of commodity companies
Source Financial Times
SMOG DARKENS SHANGHAIS PROSPECTS FOR BECOMING A GLOBAL FINANCIAL CENTER
In the debate over which matters more in China money or quality of life the quality-of-life side
may have found the ultimate argument If you cant breathe nothing else really matters And itlsquos a
debate Mongolia has to have as it makes its own steps towards industrial and economic growth
Chinas pollution problem is spreading and growing worse a fact on stark display last week in
Shanghai the countrys financial center A stretch of filthy-air days in that coastal city so
thoroughly shocked residentsmdashwho had largely escaped the smog that has long plagued the likes of
Beijing and Harbinmdashthat it inspired fresh talk about getting away from China Lawrence Shu a
Shanghai-based partner at Hylands Law Firm said he and his friends are thinking more seriously
about moving abroad
The smog had a big impact because it feels really bad if you cant breathe freely he said
The environment used to take a back seat among the Chinese But as they get richer they are
traveling abroad more making the pollution back home more obvious The Internet also
contributes Blue-sky pictures posted on social networks by Chinese travelers abroad constantly
remind folks of what is lacking at home and Chinese now use various apps to track air-quality data
If Shanghais smog discourages smart financial professionals from wanting to live there that will
hinder Chinas effort to create a global financial center If businesses such as financial companies
and luxury-goods makers perceive that Chinas elites are spending more time outside their home
country they will be less willing to invest in China
Most rich Chinese havent packed their bags and left yet but they are keeping their options open
Relocation is a big decision said Anne Wang who works in the financial industry in Shanghai But
just in case she recently received a US visa that would allow her to live there
Source Wall Street Journal
POLITICS
MINERALS POLICY ENTERS FINAL DISCUSSIONS
The government published a final draft of Mongolialsquos State Policy on the Minerals Sector for 2013
through 2025
The document was first presented to Parliament in July and is now entering final discussions during
the autumn plenary session of Parliament following a 42 percent drop of foreign investment and 23
percent fall in the currency year-on-year
―We have reviewed the proposed State Policy on the Mineral Sector which we feel will be a
positive step forward if passed said the Source ―The passing of this policy will result in more
transparency and an increasing participation from foreign investors That said it will take time for
these feats to be accomplished Investors will be weary of Government promises as they seek
longevity to prove Government intentions
The proposed policy is divided into four main sections rationale principles main policy and
implementation-results The major points stressed in the policy include transparency and
responsible mining The law sends the message that growth is going to be driven by private sector
participation and the intent to provide a stable investment environment technological innovation
and value-added activities
Key priorities of the law since it was first unveiled include stability of taxation and the legal
environment an end to any discrimination between foreign and national investors and the
preservation of strategic resources and deposits
This most recent version saw the inclusion of a new section supporting development of local areas
and the interests of local citizens Other key elements include explorationmdashwhich would see
greater government regulation for strategic mineral deposits while cutting down bureaucracy and
conducting scientific researchmdashproduction support and local support The new document also
highlights greater support for non-governmental organizations for the environment allowing them
to claim damages from mining operations the establishment of funds to support economic
diversification environmental protections and land rehabilitation
The new draft has removed the risk assessment section and replaced it with a section on
implementation This includes the improvement of the legal environment and producing of relevant
regulations programs and projects for 2013 to 2015 followed by the implementation of programs
and projects from 2014 to 2025 and finally the provision of conclusions on midterm policy
implementation and further planning for up to 2020 and 2025
―We believe that this policy will take us one step closer to attracting investors and supporting
private sector development in Mongolia said the Source ―Despite current investor hesitation this
state policy in addition to the new amended Minerals Law set to pass next year will further
encourage investors to enter the market and will build support for the junior mining community
Source Mongolian Investment Banking Group
PARLIAMENT UNANIMOUSLY BACKS ldquoSMART GOVERNMENTrdquo INITIATIVE
Parliament has unanimously backed President Tsakhia Elbegdorjs ―From Big Government to Smart
Government initiative for government reform concepts having signed a joint statement of support
on 13 December
The joint statement gives full support to the presidents initiative and commits to cooperation for
its undertaking This includes support for enhancing government systems and policies in line with
democracy and a market economy improving the capacities of public services and curtailing
government intervention into private business affairs Also included are protections to private
business including establishing government structures for rule of law support to domestic
industries and honoring contracts The fight against corruption is another main perogative
On 16 November 16 the Office of the President of Mongolia organized a national consultative
meeting on this topic at the Government Palace Elbegdorj next met with members of the
Parliament on 9 December to organize an open dialogue with representatives of Parliament for an
appeal for them to sign the joint statement Reaffirming the commitment of the Mongolian
lawmakers to a breakthrough reform of the Government the leaders of party floors and factions in
the Parliament and independent members of the Parliament signed the document for the reform on
December 13 2013
Source Montsame
GOVERNMENT CALLS TO END PRACTICE OF APPOINTING MPS AS MINISTERS
The coalition government has thrown their support behind President Tsakhia Elbegdorjs proposal to
prohibit Parliament members from serving as cabinet ministers
Democratic Party members discussed a draft resolution and proposed amendments submitted by the
president for the new restriction at a party meeting on Monday The draft amendments were
unanimously backed by the faction The Justice Coalition which includes the Monglian Peoples
Revolutionary Party and Mongolian Democratic Party came to the same conclusion following its own
meeting said coalition head N Battsereg on Monday
Source Montsame
COMMITTEE LEADERS TO BE ELECTED THIS MONTH
The coalition government will soon be electing officials to lead the various committees in
government
Parliament has 8 standing committees to elect leaders to this month with each committee to be
led by a representative of the coalition government Current committee heads are Ts Tsolmon at
the Security and Foreign Policy Committee G Bayarsaikhan at the Environment Food and
Agriculture Committee Z Bayanselenge at the Social Policy Education Culture and Science
Committee R Burmaa at the Petition and Requests Committee A Bakei at the State Structural
Committee Ts Davaasuren at the Budget Committee Sh Tuvdendorj at the Legislation
Committee and B Garamgaibaatar at the Economic Committee
Source Zuunii Medee
FOREIGN CURRENCY PAYMENTS BANNED FOR MININGEXPLORATION LICENSING FEES
The Ministry of Finance has banned the use of foreign currencies to pay for mining and exploration
licensing fees to the Mineral Resources Authority beginning 1 January 2014
The Ministry of Finance has prompted these entities and companies holding licenses to comply with
Mongolian currency law that states that all businesses and agencies must do business in Mongolian
tugrug According to the 2009 law transactions must not be carried out in foreign denominated or
foreign currency based rates
Source Newsmn
MINING MINISTRY TO COOPERATE WITH ASSOCIATION OF FLUORSPAR EXPLORERS
The Ministry of Mining Wednesday established a memorandum of mutual understanding with the
Association of Fluorspar Explorers (AFE) to cooperate in augmenting the countrylsquos export
In addition to expanding export goals include developing transparent and responsible mining
improving qualities and standards of fluorspar metallurgy and flotation concentrate and in
increasing the production output of the minerallsquos ore enrichment The hope is the memorandum
will create a launching point for a national program for fluorspar its exploitation increase the
volume of production by intensifying research and increase competitiveness in international
markets It will also be necessary to introduce the latest technology to the country along with
running joint trainings with foreign NGOs the Ministry said
Source Montsame
DP REJECTS AMARJARGAL‟S RESIGNATION
Parliament voted against MP R Amarjargallsquos resignation request on 12 December
During Tuesdaylsquos meeting the majority of the Standing Committee on State Structure voted against
Amarjargal`s resignation The head of the Democratic Party (DP) caucus D Erdenebat took a
strong stance against letting Amarjargal leave
Amarjargal said he wanted to resign to take responsibility on behalf of his party members for the
current political situation and economic restraints in Mongolia DP members agree with his
conclusion but encourage him to make the effort and participate for social change and
development Members of the opposition Mongolian Peoplelsquos Party members said that Amarjargal
could see the problems and nature of the majority of Parliament and praised his plan to resign
Source Newsmn
MPP HEAD TO STEP DOWN
Mongolian People Party (MPP) Head N Enkhbold has requested his resignation as party leader
MPP Deputy Head D Oyunkhorol said 9 December that Enkhbold submitted his request to step down
during a party meeting Oyunkhorol said Enkhboldlsquos resignation was due to personal reasons The
new party head will be appointed by the MPPs governing board
Source Udriin Sonin
FIFTH ROUND OF NEGOTIATIONS FOR THE JAPAN-MONGOLIA ECONOMIC PARTNERSHIP
AGREEMENT
The fifth round of the negotiations for the Japan-Mongolia Economic Partnership Agreement (EPA)
will be held from 16 to 19 December in Ulaanbaatar
The Japanese delegation will be led by Jun Yokota ambassador in charge of economic diplomacy
and the Mongolian delegation will be led by Ochirbat Chuluunbat vice minister for economic
development Experts from relevant ministries and agencies of both sides will participate in the
meetings
In this round negotiations are in areas including trade in goods and investment
Source 4-Traderscom
FIRST MONGOLIA-CHINA JOINT BORDER COMMISSION MEETING IN BEIJING
The very first meeting of Mongolia-China joint commission of borders took place 11 and 12
December in Beijing China
This meeting was co-chaired by T Togsbilguun a director of the Department of Neighbour
Countries of Mongolialsquos Ministry of Foreign Affairs and by Xiao Jiangguo a representative of border
checkpoint and seaport affairs Both sides shared on ideas for implementation of the
intergovernmental contract on the border regime and reached some agreements on conducting a
joint examination in the border signs and on activating the collaboration in law enforcement around
frontier areas After this they discussed issues of developing border checkpoints at a same level
putting some border checkpoints into a permanent regime giving an international status to four
checkpoints
The gathered also made a protocol on their meeting and inked its results The next meeting will run
in 2014 in Ulaanbaatar
Source Montsame
BELARUS TO OPEN EMBASSY IN MONGOLIA IN 2014
Belarus will open its embassy in Mongolia in 2014 reads a resolution from the Belarus Council of
Ministers of the Republic of Belarus from 12 December 2013 Belaruslsquo Finance Ministry will finance
the costs of opening and maintaining Belarusian Embassy in Mongolia from the funds set aside in its
national budget for the opening and maintenance of diplomatic missions and consular missions of
the Republic of Belarus abroad
Source Belarusian Telegraph Agency
HOWELL NEW JERSEY USA BECOMES SISTER CITY OF SUKHBAATAR DISTRICT
The Howell Township and the Sukhbaatar district in Mongolia signed a memorandum of
understanding to create sister citieslsquo between Howell New Jersey USA and the Sukhbaatar District
on Tuesday
The program was aimed at opening up talks on how each can benefit from one another Mayor
William Gatto said Howell Township is a very diverse city and theyve taken the relationship with
the Kalmyk community here in Howell and expanded it to a country where they have had no
relationship in the past he said
The sister citieslsquo program will allow both Mongolia and Howell to exchange ideas and come up
with new and better ways to do things that benefits both cultures Outside of Mongolia Howell has
the largest population of Kalmyks in the world with many living in the Freewood Acres section of
the township Gatto said
Some of the goals of the agreement include promoting a common prosperity and development for
both parties an electronic pen-pal program and education opportunities for exchange students
Through a translator Baljinnyam Gan-erdene of the Citizens Representatives Council of Sukhbaatar
District said he came to Howell to see how democracy works in the United States
Im really glad and hope that this unforgettable and successful visit opens the door to our
friendship and prosperity between our residents Gan-erdene said
Gatto gave Gan-erdene a Howell flag and a throw blanket created by the Historical Society
depicting the history of the township Gan-erdene also gave Gatto several items including a bronze
piece of art
Source NJcom
MONGOLIAN CALLIGRAPHY ADDED TO UNESCO CULTURAL HERITAGE LIST
State Parties at the 8th Session of the Intergovernmental Committee for the Safeguarding of the
Intangible Cultural Heritage in Azerbaijan unanimously agreed to register Mongolian calligraphy as
an intangible cultural heritage in need of urgent safeguarding on 2 December
―Mongolian heritage calligraphy is now being recognized by the world and I am grateful on behalf
of my country for decision makers said Secretary-General of Mongolian National Commission for
UNESCO Gundegmaa Jargalsaikhan He noted that Mongolian calligraphy was the fifth cultural
heritage item of Mongolia to be listed and now stands among the Mongolian epic traditional folk
dance the traditional music Tsuur and a circular breathing technique
Mongolian calligraphy is a 1000-year-old writing system that vertically connects continuous strokes
together to create a word Letters of Mongolian script have been created and taught by nomads
from generation to generation During the 1937-1940 purges of the Soviet era thousands of tutors
and traditional scholars of the script were killed Those who remained alive were banned from
mentoring the younger generation Soon after that or around 1946 a new Cyrillic script was
adopted as the only eligible script therefore banning all the teachings of old Mongolian script and
Latin lettering Only in the 1970s was the old Mongolian script re-introduced to scholars allowing a
limited number of classes in universities
After the 1990 democratic changes along with the revival of Mongolian identity interest in
traditional calligraphy reawakened As a sign of such revival the very first non-communist political
organization the Democratic Union of Mongolia used folded calligraphy as its main logo
Source Info Mongolia
THOUGH IMPROVING MONGOLIA STILL REELING UNDER CORRUPTION
The third joint survey by the Asia Foundation and Sant Maral Foundation to gather data on the
perception of corruption in Mongolia revealed that efforts to curb corruption in what is considered
as one of the worldlsquos most corrupt countries could be having impact
The survey shows a significant drop in the percentage of respondents who believe corruption has
increased in the last three years from 389 percent in November 2012 to 183 percent currently In
contrast in 2006 a majority of respondents (63) indicated that corruption has increased ―a lot in
the last three years The survey also shows that corruption has declined in importance as a critical
social problem since 2006 Despite these positive signs overall respondents indicated that
corruption remains a serious issue in some specific key areas
Conducted in September of this year the survey featured face-to-face interviews in 1360
households across Mongolia including seven districts in Ulaanbaatar and 21 counties in six
provinces A majority (766) cited that widespread corruption in the law enforcement agencies is
one of the main reasons the government has been unable to tackle corruption effectively When
corruption is perceived to be this widespread the attention will obviously turn to the performance
of the apex anti-corruption body the Independent Authority Against Corruption (IAAC) The survey
shows that the IAAC is slowly but surely beginning to gain confidence among citizens The
percentage of those surveyed who think that its performance is ―good or ―very good increased
from 78 percent in March 2010 to 203 percent in March 2013 In September 2013 the result shows
a new high of 294 percent
Peoplelsquos perceptions on corruption are often shaped by personal experiences Although very few
respondents in the survey said that they had actually paid a bribe themselves (8 percent about a 3
percent drop from 2012 and an 18 percent drop since 2006) as noted before many are not willing
to report instances where they are asked for one Similarly 36 percent of respondents said they
would not pay a bribe but 26 percent indicated that they would pay if they had the financial
capability
Basanta Pokharel is The Asia Foundation‟s chief of party for the STAGE program in Mongolia He
can be reached at basantapokharelasiafoundationorg The views and opinions expressed here
are those of the individual author and not those of The Asia Foundation
Source Asia Foundation
MPP DEMANDS DISMISSAL OF MINISTERS
Mongolian Peoplelsquos Party Chairman N Enkhbold and party head S Byambatsogt submitted to the
Speaker a request for the dismissal Minister of Finance Chultem Ulaan and of Economic
Development Minister Nyamjav ―Fortuna Batbayar
Our faction believes that these ministers must be held responsible for the worsening of the
national economic situation We also intend to do the same with other ministers after hearing
opinions of people said Byambatsogt
Source Montsame
FORMER TAVAN TOLGOI JSC DIRECTOR ARRESTED
The Independent Agency Against Corruption arrested former Tavan Tolgoi JSC director Kh
Tumenbayar for undisclosed reasons
An unnamed official source suggested that the arrest may be related to abuses of power and
payments to political parties as well as the construction of a high-class hotel in Dalanzadgad Soum
Umnugobi Aimag Kh Tumenbayar is a member of the Democratic Party a member of Parliament
and is an associate of ―Ajnai Bat-Erdene the Minister of Defense who helped Tumenbayar attain
position as the director of Tavan Tolgoi for 6 years and rise to head of the Umnugobi Aimag Citizens
Council
Tumenbayar voluntarily resigned from his position at Tavan Tolgoi last month The IAAC has
reportedly not given details to the reasons for the investigation opened on Tumenbayar because of
possible connections to high-ranking officials
Source Unuudur
MONGOLIA TURKMENISTAN JOIN INTERNATIONAL RACING FEDERATION
The International Federation of Horseracing Authorities (IFHA) has welcomed racing organizations
from Mongolia and Turkmenistan as affiliate members
Recent ratification to IFHA statutes at its annual General Assembly in October created a new
affiliate membership category within the Federation Thus the Federation of Mongolia Horse Racing
Sport and Trainers and the Turkmen Atlary State Association by unanimous vote of the IFHA
Executive Council in Paris in October have become the IFHAlsquos first two affiliate members
The Federation of Mongolian Horse Racing Sport and Trainers (FMHRST) is a non-governmental
organization (NGO) which serves to the development of equestrian sport in Mongolia and works to
protect the rights of horsemen who specialize in this national sport The new affiliates were
announced by IFHA Chairman Louis Romanet this week and several key appointments to IFHA
executive office positions and committees have also been made
Source Horse Talk
MONGOL TV HEAD MEDIA CAN HELP FIX THE BIG PROBLEMS
Nomin Chinbat head of Mongol TV has grander intentions than just ridding the countrys television
business of rampant pirated content and unlicensed formats The young executive wants to help
clean up Mongolian politics and the nation by creating a free and open media
―The networks are used as propaganda channels for politicians They are used very effectively every
four years at election time says Chinbat whom the Source named one of the 25 Most Powerful
Women in Global TV at MIPCOM 2013
―There are laws against piracy but they arenlsquot implemented explains Chinbat who says that
politicians in the country of roughly three million wonlsquot challenge journalists because their
relationships with them are too cozy
Mongol TV has invested in original programming licenses all of its imported content and runs
investigative journalism features highlighting social problems such as alcoholism and corruption
The company is organizing a Mongol TV Day for February 2014 to which it has invited major
international studios to raise awareness of the issues and introduce the global industry to
Mongolia Britainlsquos ITV and Americalsquos CBS are already confirmed and negotiations are ongoing with
other attendees The situation has improved in recent years with some channels having become
what Chinbat calls ―hybrids which license some sports rights but then steal others and copy
formats
―These days some of these channels might license 25 episodes of a format and make 50 But this is
actually progress says Chinbat
Chinbat and her team were at the Asian Television Forum (ATF) in Singapore looking for new
formats that can be produced within the constraints of Mongolian television budgets However with
Mongolias young populationmdash65 percent of the country is under 35 years oldmdashmobile viewing is on
the rise and the network is already working second-screen utilization and new media applications
This demographic sweet spot should guarantee strong growth in the population economy and
nascent entertainment sector in Mongolia in the coming decades
Source Hollywood Reporter
ANNOUNCEMENTS
ldquoMM TODAYrdquo ON MNB-TV FRIDAY 1900 TO 1910
BCM is pleased to announce that Mongolian National Broadcasting continues its cooperation with
BCM on ―MM Today This English news program is aired every Friday for 10 minutes and is
scheduled from 1900 to 1910 tonight Tune in to watch this program that reports stories from
todaylsquos BCM NewsWire
BCM WEBSITES
MONGOLIAN WEBSITE bdquoPRESENTATIONS‟ AND bdquoNEWS‟ SECTIONS
The Presentationslsquo section on BCMlsquos Mongolian website can be reached via bcmmnitgeluud
As a key component of BCMlsquos Mongolian website articles from the Newslsquo section and the
government website Open-Governmentmn are regularly updated
S Oyun Minister of Environment and Green Development presentation at BCM monthly meeting on
May 27 added to Mongolian website bcmongoliaorgmnилтгэлүүд
- Байгаль орчин ногоон хөгжлийн сайд СОюун Байгаль орчин ногоон хөгжлийн шинэчлэлийн
бодлого үйл ажиллагаа МБЗ-ийн сарын уулзалт 5 сарын 27 2013
___________________________________________
ENGLISH WEBSITE PRESENTATIONS MONGOLIA REPORTS bdquoINTERVIEWSbdquo MONGOLIAN
BUSINESS NEWS‟ bdquoPHOTO GALLERY‟
The following 13 presentations are from the Mongolia Investment Summit- 2013 in Hong Kong
November 18-20
- Regulatory Update Navigating Mongolialsquos legal framework for foreign direct investment
Javkhlanbaatar Sereeter Director General Foreign Investment Regulations and Registration
Department MINISTRY OF ECONOMIC DEVELOPMENT OF MONGOLIA
- Investment keynote Investing into Mongolia in 2013 ndash Where do the opportunities lie James
Passin Co-Founder and Manager FIREBIRD MONGOLIA FUND
- Development keynote Key challenges and opportunities for continued growth in Mongolia
Randolph Koppa President TRADE AND DEVELOPMENT BANK OF MONGOLIA
- Outlining government policies and long-term plans for Mongolialsquos mining sector Amarjargal
Khurelbat Head of International Cooperation Division MINISTRY OF MINING OF MONGOLIA
- From copper to met coal Demand and price outlook and expected impact on Mongolialsquos economy
Ghee Peh Managing Director Metals and Mining Research UBS SECURITIES ASIA
- How Mongolian banks and financial institutions are dealing with the challenges and opportunities
of a fast growing economy Norihiko Kato Chief Executive Officer KHAN BANK
- Update on the Mongolian stock market ndash Impact of the new Securities Law Altai Khangai Chief
Executive Officer MONGOLIAN STOCK EXCHANGE
- From investment banking to trade finance to micro credits to insurance Amartuvshin Hanibal
Managing Director TENGER FINANCIAL GROUP LLC
- Spotlight presentations Showcasing Mongolian investment opportunities Peter Morrow Board
Director ASIA PACIFIC INVESTMENT PARTNERS
- Spotlight presentation Showcasing Mongolian investment opportunities Munkhbat Davaatseren
CEO of Golomt Securities GOLOMT BANK
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources
Batmunkh Batkhuu Chairman SHARYN GOL JSC
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources
Jimmie Wilde Chief Operating Officer BERKH UUL JSC
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources Mona
Forster Executive VP ENTREacuteE GOLD INC
The following two presentations are from the ―ANTI-CORRUPTION LEGISLATIONPOLICY
INTERNATIONAL BEST PRACTICE ON TRANSPARENCY training seminar for businesses in
Ulaanbaatar November 18 2013
-―International business standard on transparency by Jelena Pesic Director PwC
-―Finlandlsquos best practice on transparency and anti corruption by Dr Pekka Hallberg (as it is
worldlsquos number one) Emeritus President of the Supreme Administrative Court of Finland
The following 15 presentations are from the Mongolia Mining Summit Perth Australia October 29-
31 2013
bull Mongolialsquos Minerals Future and Development by Otgochuluu Ch Director General Department of
strategic policy and planning at Ministry of Mining Mongolia at the Mongolian Mining Summit 2013
Perth Australia Oct 29-31 2013
bull Mongolian Economy Investment OpportunitiesChallenges Jim Dwyer Executive Director
Business Council of Mongolia at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31
2013
bull Oyu Tolgoi Lessons from the Gobi Houston Spencer Vice President Communications and Media
Relations Oyu Tolgoi at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Market dynamics for Mongolian coking coal in the Chinese market Graeme Hancock President
and Chief Representative at Anglo American Mongolia at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Speech by Mr Ariunbold Byamba Deputy Director Erdenes MGL LLC at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull Launching Mining Projects in MongoliandashA Major Contractorlsquos Perspective Eric Erdenebat
Tseveendorj Country Manager Orica Limited at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Investing in a dynamic legislative environment Elisabeth Ellis Managing Partner Ulaanbaatar
Minter Ellison at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Sandvik In Pit Crushing amp Conveying (IPCC) Doug Turnbull Principal Mining Engineer Sandvik
Mining Systems at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Ovoot Coking Coal Project David Paull Managing Director Aspire Mining at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull The business of being a third neighbor David Landers General Manager East Asian Growth
Markets at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Nuurst Thermal Coal Project Daniel Rohr Chief Financial Officer Modun Resources Ltd at the
Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Culture matters in building sustainable long-term business relationships Hana Tserenkhand
Byambadash Business Development Consultant AusMon Consulting and Dr Christine Hogan Adjunct
Professor Curtin University Consultant amp Author at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Maximizing Business Benefits from Your IT Investment Brad Skeggs Executive Director COSOL at
the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Presentation by Battsengel Gotov CEO Mongolian Mining Corporation at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull Mongolian Mining Sector Present and Future Developments NAlgaa Executive Director
Mongolian National Mining Association at the Mongolian Mining Summit 2013 Perth Australia Oct
29-31 2013
The ―Mongolia Reports section includes the following
- ―Ministry of Finance of Mongolia 2013 Government Debt Auctions by Bank of Mongolia
- ―Doing Business in Mongolia 2013 Country Commercial Guide for US Companies by US
Embassy
- ―Real Estate Report 2013 by Mongolian Properties
- ―Selected Macroeconomic Indicators November 20 2013 by International Monetary Fund
- ―2013 Second Annual Mongolian CEO Survey from PricewaterhouseCoopers Audit LLC
- ―Selected Macroeconomic Indicators data through October 16 2013 by International Monetary
Fund
- ―IMF Completes 2013 Article IV Mission to Mongolia by International Monetary Fund
The following are added to Interview Section from the Oxford Business Group Mongolia Reports
2013 book
bull B Byambasaikhan Chairman Business Council of Mongolia ―Talk is cheap
bull President Ts Elbegdorj ―Diversifying for growth
bull Jim Dwyer Executive Director Business Council of Mongolia ―Non-mining sectors budding
bull Peter Morrow Chairman American University of Mongolia ―Filling in the blanks
bull N Zoljargal Governor Bank of Mongolia ―Sustainable vision
bull Gansukh Minister of Roads and Transportation ―Accessing new markets
bull J Od President MCS Group ―Building interest
bull B Chuluunbaatar President and CEO of Monnis Group ―Climbing the ranks
bull Cameron McRae President and CEO Oyu Tolgoi ―Sitting on a copper mine
BCMs English website includes the ―Mongolia Business News section where the Open Letter to
Parliament and Government is available for download
BCM continuously posts news stories and analysis of relevance to Mongolia at Mongolian Business
News before they are all put together each week for Fridays weekly NewsWire
The ―Photo Gallery contains photos from the 6th Anniversary BCM Renewal dinner on November
11 2013
BCM Football Cup 2013 pictures are posted to the website - httpbcmongoliaorgenphotos350-
enalbumalbumid=200
The BCM NewsWire will continue to be issued each Friday incorporating items already on the home
page for a consolidated account of the weeklsquos events
SOCIAL NETWORK WITH BCM
BCM LAUNCHES NEW LINKED-IN COMPANY PAGE
The Business Council of Mongolia has launched a new company page on the social networking
website LinkedIn to network its members and followers including small-medium enterprises (SMEs)
The new page will allow BCM to alert followers to the latest news and information critical to their
businesses Memberslsquo businesses will be promoted Additionally BCM plans to deliver monthly
infographics on the latest data as well as videos and other media content as they come The bulk of
the content on the new page will be in Mongolian language to better cater to BCMs Mongolian-
speaking audience and members The following link can direct you to the New BCMs Linked-in page
httpwwwlinkedincomcompanybusiness-council-of-mongoliatrk=company_logo
The Business Council of Mongolia (BCM) has expanded its reach to your favorite social networks
Keep up to date on the latest business deals in Mongolia and how the climate for investment is
improving each day with BCM
Add BCM on Facebook at httpswwwfacebookcomTheBusinessCouncilOfMongolia to read the
latest announcements and comment on events carried in the NewsWire with the community
Hear breaking news and announcements as they happen when you follow BCM on Twitter at
httpstwittercombcmongolia
We have now 2482 fans on our Facebook fans page 1527 connections on LinkedIn network and
835 followers on Twitter
Of course for news information interviews event photos and announcements regarding our
organization visit the official BCM website at httpbcmongoliaorgen
ECONOMIC INDICATORS
INFLATION
Year 2006 60 [source National Statistical Office of Mongolia (NSOM)]
Year 2007 151 [source NSOM]
Year 2008 221 [source NSOM]
Year 2009 42 [source NSOM]
Year 2010 130 [source NSOM]
Year 2011 102 [source NSOM]
November 30 2013 120 [source NSOM]
Year-over-year (y-o-y) nationwide
Note 111 y-o-y Ulaanbaatar city November 30 2013
CENTRAL BANK POLICY LOAN RATE
December 31 2008 975 [source IMF]
March 11 2009 1400 [source IMF]
May 12 2009 1275 [source IMF]
June 12 2009 1150 [source IMF]
September 30 2009 1000 [source IMF]
May 12 2010 1100 [source IMF]
April 28 2011 1150 [source IMF]
August 25 2011 1175 [source IMF]
October 25 2011 1225 [source IMF]
March 19 2012 1275 [source Mongol Bank]
April 18 2012 1325 [source Mongol Bank]
January 25 2013 1250 [source Mongol Bank]
April 8 2013 1150 [source Mongol Bank]
June 25 2013 1050 [source Mongol Bank]
CURRENCY RATES ndash DECEMBER 19 2013
Currency Name Currency Rate
US dollar USD 164138
Euro EUR 224680
Japanese yen JPY 1579
British pound GBP 268874
Hong Kong dollar HKD 21170
Chinese Yuan CNY 27031
Russian Ruble RUB 4981
South Korean won KRW 155
Disclaimer Except for reporting on BCMlsquos activities all information in the BCM NewsWire is
selected from various news sources Opinions are those of the respective news sources
MONGOLIA SCORE FALLS ON POLITICAL RISKS INDEX FOR MINING INVESTMENT
An annual survey by Behre Dolbear of political risks saw Mongolia decline 5 points in an index
ranking Mongolia 19th out of 25 countries
Mongolia this year received a score of 269 compared with 32 last year Leading the countries
surveyed was Australia down 07 points from last year Russia with a total score of 171 compared
with 16 last year was the lowest ranking
The 25 countries considered in this yearlsquos survey are ranked based on seven criteria
-the countrylsquos economic system
-the countrylsquos political system
-the degree of social issues affecting mining in the country
-delays in receiving permits due to bureaucratic and other issues
-the degree of corruption prevalent in the country
-the stability of the countrylsquos currency and
-the competitiveness of the countrylsquos tax policy
Each criterion is rated on a qualitative scale from one (worst) to 10 (best) that reflects conditions
that promote investment growth in the mining sector The maximum score attainable for a country
is 70 points
Source Behre Dolbear Group
MONGOLIA LOOKS FOR SECOND CHANCE WITH FOREIGN INVESTORS
Saruul Ganbaatar the deputy head of Mongolias stock exchange hopes the countrys days of
interventionist economic policies are over and new laws ensuring foreign investors access to the
frontier markets industries will bring back sorely needed cash
Ganbaatar 32 who cut his investment teeth in Chicagos financial houses after graduating from
Loyola University is careful not to over-promise on what the stock market can deliver in 2014 and
beyond in terms of new listings or overall growth In October a law was passed easing ownership
restrictions for private companies to invest in the strategic industries A Securities Markets Law
coming into effect 1 January 2014 is expected to provide the key ingredient to attract deep
pocketed institutional investors such as mutual funds to invest
This really is the missing ingredient said Ganbaatar who has been traveling the globe promoting
the changes in the laws to global investors for the past two weeks
The stock index fell 19 percent in 2012 and year-to-date is down 115 percent although it did start
to climb with the newly passed laws On 1 January the new Securities Markets Law will allow
Mongolias commercial banks to offer custodial banking services Custodial banks serve as safeguards
for a firm or individuals financial assets playing a critical role in the final settlement of market
transactions Total market capitalization now is between USD 900 million and USD 1 billion Dont
expect the number of new listings to mushroom There may instead be a cull of companies Fifty-
five to 60 of them many of which have not traded in years are being reviewed for potential
delisting
The Mongolian Stock Exchange 100 percent state-owned is perhaps itself a candidate for
privatization It has been in a strategic partnership with the London Stock Exchange for two and a
half years
They have the right of first refusal he said
Source Reuters
CPI INCREASES TO 12 PERCENT YEAR-OVER-YEAR IN NOVEMBER
The National Statistical Office reported a 12 percent increase in the national consumer price index
(CPI) in November year-over-year
The CPI growth which also in November grew 13 percent from the previous month was explained
by a 14 percent increase in food prices and non-alcoholic beverages 23 percent for clothing
footwear and fabrics and 07 percent for housing water electricity and fuels
Source Info Mongolia
GROWTH SEEN IN EXPORT OF PRECIOUS METALS
The export value of precious metals grew 114 percent in November from the month before and 63
percent from the same period in 2012 according to the National Statistical Office
Exports totaled USD 38 billion in the year to December while imports grew to USD 58 billion The
foreign trade balance saw a deficit of USD 2 billion November saw exports of USD 381 million and
imports of USD 514 million with exports and imports in decline between July and November The
value of export products for the first 11 months was USD 11 billion Despite the gain in precious
metal exports exported minerals which represented 81 percent of all exports in the year to
November fell 129 percent from the year before
Source Zuunii Medee
MNT 788 BILLION WILL BE ENTERED INTO THE STABILIZATION FUND
The Stabilization Fund is set to collect MNT 49 billion this year and MNT 298 billion next
The Stabilization Fund was established to collect surplus revenue in years of economic gains from
the mining sector to cushion possible annual losses during economic downturns and weak
commodity demand Any gain in the price for gold and coal next year will also be reflected in
allotments to the fund
Source Zuunii Medee
ECONOMIC DEVELOPMENT MINISTRY PLANS TO PUT 81 OF BUDGET INTO CONSTRUCTION
The Economic Development Ministry plans to invest MNT 814 percent of its total investment budget
into construction
Beginning 1 January 2014 the ministry will provide MNT 9303 in loans toward the construction
sector The ministry will spend 39 percent of its budget for reconstruction and repair 10 percent
for the purchase of new techniques and technical equipment 3996 percent for infrastructure
2743 percent for education and health 636 percent for employment and agriculture and 2926
percent for other sectors of the economy
Projects include the construction of 30 clinics 27 cultural centers 6831 km of paved roads and
1032 m length of bridges Mongolia has received USD 55 billion in aid in the last two decades of
which 55 percent was in the form of low rate loans and 45 percent as non-repayable grants for
investments into agriculture infrastructure power and health sectors
Economic growth since 2011 has allowed Mongolia less aid than in the past The government has
now turned its focus on providing funding with concession agreements to large scale projects such
as the Nariin Sukhait-Shivee paved road and the power station at Mogoin gol Other projects include
Power Plant No 5 the Altanbulag-Ulaanbaatar-Zamyn Uud highway the Tavan Tolgoi- Khanbogd-
Khangi road and the Tuul Songino water reservoir complex
Source Zuunii Medee
TT POWER PLANT MAY NEED CONCLUSION TO OT DISPUTE SAYS DIRECTOR
Uninterrupted development of the Tavan Tolgoi power plant will ride on the outcome of disputes
concerning Oyu Tolgois underground mine said the director of the plant
―One of the main risks is the issue of a main user Enkhsaikhan said ―The key buyer of the power
from the TT Power Plant is OT Due to the uncertainty over phase twolsquo and unresolved matters
with the government of Mongolia OT is not regarded as a reliable buyer on a stand-alone basis
He added that the power company may request a guarantee from Oyu Tolgoi
A consortium that includes Koreas Posco Energy and Daewoo Engineering and Construction GDF
Suez Energy Asia Japans Marubeni Corp and Kansai Electric Power in March was selected for
development of the plant which has a preliminary estimate cost of USD 1 billion Those expenses
include installation of 150 kilometers of electric lines between Tavan Tolgoi and Oyu Tolgoi The
consortium will be expected to raise 30 percent of the cost itself while the remaining 70 percent
will come from bank loans However the uncertainty surrounding the Oyu Tolgoi copper mine could
create more hold ups
Source Zuunii Medee
CABINET TO CONCLUDE CONCESSION ON ALTANBULAG-ZAMYN UUD HIGHWAY
The Cabinet of Ministers ordered ministers to conclude a concession agreement for the Altanbulag-
Ulaanbaatar-Zamyn-Uud highway
The government is planning to establish the concession contract with the Chinggis Land
Development Group which according to the agreement shall have exclusive rights to construction
ownership and transfer of property using its own financing The concessionaire shall complete the
construction within three years after that shall operate the facility for another 30 years before
transferring the ownership to the Government
If Chinggis Land accepts these terms it would be responsible for developing a feasibility study and
blueprint of the project to be approved by the relevant ministries before concluding a financing
agreement The concession agreement will come into effect after the Chinggis Land Development
Group obtains a financing agreement for USD 1 billion from a commercial bank of Mongolia
The government will be responsible for freeing up the land where the highway is planned while the
Chinggis Land would cover the costs for doing so
Source Montsame
MNT 116 BILLION WILL BE SPENT FOR BUILDING EMERGENCY ALARMS IN UB
The National Emergency Management Agency has installed an emergency alarm system in 60
locations of Ulaanbaatar The alarm will alert citizens to natural disasters such as earthquakes
The alarms will be controlled from a center by microwave radios and satellite communication
devices
Source Udriin Sonin
EIU CLARIFIES EXTENT OF OFFICIAL ESTIMATES OF OIL SHALE RESERVES
The latest research from Mongolias mining ministry gives a clearer picture of oil shales
development potential in the coming years Although Mongolia has long been known to have
substantial oil shale deposits previous estimates were extrapolated from rudimentary surveys
conducted in the 1990s and thus left the actual reserves open to speculation
Plans to develop the industry took shape only in April 2013 when an American company Genie
Energy signed a five-year deal with the Petroleum Authority of Mongolia to explore oil shale
reserves in central Mongolia Genie also plans to build a USD 4 billion processing factory in Tuv
Aimag According to government projections the processing plant will generate USD 850 million of
tax revenue annually Aside from the economic benefits of the project domestic fuel sources could
help Mongolia to improve its energy security by loosening the countrys dependence on its powerful
neighbors At present 90 percent of Mongolias oil and related products come from Russia with most
of the remaining amount being imported from China
Yet the benefits of large-scale oil shale extraction are not as clear as they might seem at first
glance Most importantly Mongolias oil shale resources should not be confused with the shale oil
phenomenon that is currently sweeping the United States Oil shale (also called kerogen) is more
expensive to extract than shale oil and carries greater environmental costs In particular oil shale
requires a large amount of water to process which could be a risky proposition in Mongolia where
hydrological resources are already under strain Although other countriesmdashEstonia in particularmdashuse
oil shale as a substitute for coal extracting liquid fuel from the shale is a complex and relatively
untested process
Genie Energys progress on the project seems more substantial than that of comparable coal
liquefaction projects that have faltered in the region However environmental technical and
political limitations suggest that Mongolias overall dependence on foreign fuel will not change
significantly in the foreseeable future
―We remain doubtful that oil shale will play a significant role in Mongolia in the next two years so
our economic growth and trade forecasts will remain unchanged said the Source
Source Economist Intelligence Unit
MONGOLIA AND THE THREAT OF THE RESOURCE CURSE
Mongolia is at a crossroads while investors complain the government is dragging its feet on allowing
miners to start digging it is crucial that it get things right at the early stages of the resources
boom
Mongolias challenge will soon be the worlds says Richard Dobbs and his team at McKinsey in a
report predicting a USD 17 trillion investment bonanza by 2030 to keep up with demand for oil gas
and other materials In 1995 about 58 countries depended on resources for the bulk of their output
and wealth In 2011 that number had risen to 81 By 2030 roughly half of the worlds economies
will essentially become giant filling stations for developing superpowers from China to South Africa
That means that instead of the world moving toward greater transparency democracy and freer
markets we could see rising corruption levels and even greater income inequality
Economies with natural-resource endowments have a huge opportunity to transform their
prospects but history suggests that they could all too easily squander the windfall says Dobbs
director of the McKinsey Global Institute in London
The world would be wise to take steps today to break this cycle McKinsey recommends several
While not terribly original they include strengthening public institutions and good governance
building decent infrastructure boosting national competitiveness promoting sound fiscal policy
making and spending the windfall wisely while engaging in forward-looking economic and social
planning The trouble is that political will and integrity is often the first casualty once the minerals
start flowing out and the spoils come pouring in
Mongolia is at that very crossroads today Investors complain the government is dragging its feet on
allowing miners to start digging But its more important to get things right at the early stages of
the resources boom That means acting now to create the institutions and regulatory frameworks
needed to ensure revenue transparencymdashknowing exactly how much money is being dug out the
ground and where its going Why not set up a sovereign-wealth fund to save for Mongolias future
When the stakes are that high a little patience can go a long way
Source Bloomberg
MONGOLIAS NOMADS WARM TO SOLAR POWER
In Mongolia often known as the land of the blue skies the sun shines for 250 days on average each
year It beats down on the sparse plains and on the Gobi desert that spans the countrys southern
border with China
It shines even during the frigid winter days on the hundreds of thousands of nomads who still roam
the steppes herding animals and living in dome-like tents calling gers About 800000 of Mongolias
28 million inhabitants still live the traditional nomadic lifestyle that has remained largely
unchanged for generations Apart from the addition of motorbikes the occasional petrol generator
and a passing trade from intrepid tourists wanting to stay in a ger for the night life is almost the
same as that of many nomads grandparents and great-grandparents Almost but not exactly
Dotted across the steppes glints of light can be seen as the sun bounces off the solar panels that
have been installed on the sides of gers made of felt and yaks wool At the start of this millennium
Mongolias herders and nomads had little or no access to modern electric power and its potential
benefits But as of 2013 thanks to a concerted push by the Mongolian government almost 70
percent of nomadic people have access to electricity Bor a herder who mainly travels around
western Mongolias Arkhangai province is one of the people whose family benefits from portable
solar home systems (SHS)
We use it for generating the power for lighting in the ger charging phones we can also generate a
fridge to keep food longer and we can run a television That is very useful for us because we can
get the most recent weather forecast which is important for our work and keeping our animals
safe Before we had power it was very difficult Now it is almost like living in the city
The ability to charge mobile phones is also important for the herders who often have children
staying at boarding schools Access to electricity also allows families to contact emergency health-
care and doctors for advice without having to make the often arduous journey to the nearest village
or town
The solar systems were distributed and installed with the help of the World Bank after the
Mongolian governments National 100000 Solar Ger Electrification Program ran into difficulties A
World Bank report Capturing the Sun in the Land of the Blue Sky describes the difficulties faced by
the Mongolian government on its ambitious project
By 2005 five years into the plan 30000 families had been kitted out with an SHS but then the
program began to stagnateThe government of Mongolia recognized that considerably more effort
was necessary not only to keep the program on track but to scale-up implementation in order to
achieve the National 100000 Solar Ger Electrification Program target the report said In 2006 the
World Bank agreed to cover half of the initial outlay costs for each family as well as after-sales
maintenance with 50 centers set up across the country including at least one in each of its 21
provinces so that the herders would not have to travel to Ulaanbaatar every time the solar panels
needed maintenance
The SHS project also offers environmental benefits to a country where the ratio of carbon dioxide
emissions to economic output is ten times higher than the world average because of the increase in
mining over the past decade as the true extent of Mongolias mineral wealth became apparent The
solar systems are slowly replacing the diesel generators used by some nomads as a means of
generating power although they are still using stoves for heating burning wood coal and dung
throughout the year
Source Al Jazeera
IRON-ORE AND COAL PRICES GO SEPARATE WAYS
Prices of the key ingredients in steel productionmdashiron ore and coking coalmdashare moving along sharply
different paths as mining companies resist cutting coal output despite the market being awash with
the raw material
While iron-ore prices have risen 22 percent since May coking coal is still searching for a rebound
Coking-coal prices are off more than 4 percent over the same period China is on course for another
year of record steel production with supply directed to the construction of high-rise apartment
buildings the manufacture of luxury cars and other uses
There is simply too much coal on the market the International Energy Agency said in a report this
week
Shipments of steelmaking coal from Australiamdashthe worlds biggest exporter of the commoditymdashare
forecast by the government to rise to 178 million tons in 2015 from 145 million tons last year Most
goes to China which accounts for 60 percent of global demand In contrast global iron-ore
exporters are struggling to increase output in areas other than Australias remote Pilbara region
supporting prices of that commodity The spot price of iron ore climbed to nearly USD 140 a ton
earlier this month a four-month high Prices have since eased a bit to USD 13430 a ton but
remain well above the consensus forecasts of analysts at the start of this year
Coal miners could scale back production but that isnt always easy to do In Australia many miners
are locked into so-called take or pay contracts with rail and port operators Many analysts dont
expect coking-coal prices to rebound for at least another 12 months RBC Capital Markets expects
coking-coal prices to average USD 154 a ton in 2014 down from USD 159 a ton forecast for this
year Instead they see more chance that iron-ore prices will come down more sharply RBC predicts
an 11 percent fall in iron-ore prices next year as new supply from Anglo Americans Minas Rio
project and mines owned by Fortescue Metals Group Ltd is added to the market UBS is even more
bearish predicting iron ore will fall below USD100 in the second half of 2014
Source Wall Street Journal
ARE COMMODITIES TRADERS bdquoTOO BIG TO FAIL‟
When the banking industrylsquos top lobby group commissioned a report by on commodity trading
houses the idea was to show trading houses like Glencore Xstrata Vitol or Cargill were ―too big to
fail and therefore needed to be regulated in a similar manner to the banks
But instead of highlighting the inherent issues surrounding the industry the report found trading
companies posed less systemic risk than the big banks As a result the Global Financial Markets
Association which commissioned the report decided not to finalize or publish it (The GFMA claims
that it often commissions reports which are shared with regulators and other interested parties but
never published) But the debate hasnlsquot ended
A separate report published in July by the Centre for European Policy Studies a think-tank argued
the growth of commodity trading houses which underpin the global trade in raw materials could
―have systemic implications Commodities trader Trafigura has become the latest to wade into the
debate In its recent prospectus for a EUR 500 million bond issue the worldlsquos second largest metals
trader and third biggest oil trader addresses the GFMA report as well as the issue of systemic risk
Making some tart observations the trading house says the GFMA paper was aimed squarely at the
Financial Stability Board a group of global regulators
―[The report] was widely seen as a tactic by some banks active in the commodity trading space as a
way of creating more equality between market participants by seeking to usher in further
restrictions on pure commodity trading companies the prospectus says
Commodity traders are facing the need to be more open about their operations and lift the veil of
secrecy Indeed the author of the GFMA reportmdashCraig Pirrong a widely respected academicmdashis
working on a white paper on commodities traders Commissioned by Trafigura it will look at what
commodities trading houses activities and the recent trend to accumulate more assets risk
management as well as looking at different types of commodity companies
Source Financial Times
SMOG DARKENS SHANGHAIS PROSPECTS FOR BECOMING A GLOBAL FINANCIAL CENTER
In the debate over which matters more in China money or quality of life the quality-of-life side
may have found the ultimate argument If you cant breathe nothing else really matters And itlsquos a
debate Mongolia has to have as it makes its own steps towards industrial and economic growth
Chinas pollution problem is spreading and growing worse a fact on stark display last week in
Shanghai the countrys financial center A stretch of filthy-air days in that coastal city so
thoroughly shocked residentsmdashwho had largely escaped the smog that has long plagued the likes of
Beijing and Harbinmdashthat it inspired fresh talk about getting away from China Lawrence Shu a
Shanghai-based partner at Hylands Law Firm said he and his friends are thinking more seriously
about moving abroad
The smog had a big impact because it feels really bad if you cant breathe freely he said
The environment used to take a back seat among the Chinese But as they get richer they are
traveling abroad more making the pollution back home more obvious The Internet also
contributes Blue-sky pictures posted on social networks by Chinese travelers abroad constantly
remind folks of what is lacking at home and Chinese now use various apps to track air-quality data
If Shanghais smog discourages smart financial professionals from wanting to live there that will
hinder Chinas effort to create a global financial center If businesses such as financial companies
and luxury-goods makers perceive that Chinas elites are spending more time outside their home
country they will be less willing to invest in China
Most rich Chinese havent packed their bags and left yet but they are keeping their options open
Relocation is a big decision said Anne Wang who works in the financial industry in Shanghai But
just in case she recently received a US visa that would allow her to live there
Source Wall Street Journal
POLITICS
MINERALS POLICY ENTERS FINAL DISCUSSIONS
The government published a final draft of Mongolialsquos State Policy on the Minerals Sector for 2013
through 2025
The document was first presented to Parliament in July and is now entering final discussions during
the autumn plenary session of Parliament following a 42 percent drop of foreign investment and 23
percent fall in the currency year-on-year
―We have reviewed the proposed State Policy on the Mineral Sector which we feel will be a
positive step forward if passed said the Source ―The passing of this policy will result in more
transparency and an increasing participation from foreign investors That said it will take time for
these feats to be accomplished Investors will be weary of Government promises as they seek
longevity to prove Government intentions
The proposed policy is divided into four main sections rationale principles main policy and
implementation-results The major points stressed in the policy include transparency and
responsible mining The law sends the message that growth is going to be driven by private sector
participation and the intent to provide a stable investment environment technological innovation
and value-added activities
Key priorities of the law since it was first unveiled include stability of taxation and the legal
environment an end to any discrimination between foreign and national investors and the
preservation of strategic resources and deposits
This most recent version saw the inclusion of a new section supporting development of local areas
and the interests of local citizens Other key elements include explorationmdashwhich would see
greater government regulation for strategic mineral deposits while cutting down bureaucracy and
conducting scientific researchmdashproduction support and local support The new document also
highlights greater support for non-governmental organizations for the environment allowing them
to claim damages from mining operations the establishment of funds to support economic
diversification environmental protections and land rehabilitation
The new draft has removed the risk assessment section and replaced it with a section on
implementation This includes the improvement of the legal environment and producing of relevant
regulations programs and projects for 2013 to 2015 followed by the implementation of programs
and projects from 2014 to 2025 and finally the provision of conclusions on midterm policy
implementation and further planning for up to 2020 and 2025
―We believe that this policy will take us one step closer to attracting investors and supporting
private sector development in Mongolia said the Source ―Despite current investor hesitation this
state policy in addition to the new amended Minerals Law set to pass next year will further
encourage investors to enter the market and will build support for the junior mining community
Source Mongolian Investment Banking Group
PARLIAMENT UNANIMOUSLY BACKS ldquoSMART GOVERNMENTrdquo INITIATIVE
Parliament has unanimously backed President Tsakhia Elbegdorjs ―From Big Government to Smart
Government initiative for government reform concepts having signed a joint statement of support
on 13 December
The joint statement gives full support to the presidents initiative and commits to cooperation for
its undertaking This includes support for enhancing government systems and policies in line with
democracy and a market economy improving the capacities of public services and curtailing
government intervention into private business affairs Also included are protections to private
business including establishing government structures for rule of law support to domestic
industries and honoring contracts The fight against corruption is another main perogative
On 16 November 16 the Office of the President of Mongolia organized a national consultative
meeting on this topic at the Government Palace Elbegdorj next met with members of the
Parliament on 9 December to organize an open dialogue with representatives of Parliament for an
appeal for them to sign the joint statement Reaffirming the commitment of the Mongolian
lawmakers to a breakthrough reform of the Government the leaders of party floors and factions in
the Parliament and independent members of the Parliament signed the document for the reform on
December 13 2013
Source Montsame
GOVERNMENT CALLS TO END PRACTICE OF APPOINTING MPS AS MINISTERS
The coalition government has thrown their support behind President Tsakhia Elbegdorjs proposal to
prohibit Parliament members from serving as cabinet ministers
Democratic Party members discussed a draft resolution and proposed amendments submitted by the
president for the new restriction at a party meeting on Monday The draft amendments were
unanimously backed by the faction The Justice Coalition which includes the Monglian Peoples
Revolutionary Party and Mongolian Democratic Party came to the same conclusion following its own
meeting said coalition head N Battsereg on Monday
Source Montsame
COMMITTEE LEADERS TO BE ELECTED THIS MONTH
The coalition government will soon be electing officials to lead the various committees in
government
Parliament has 8 standing committees to elect leaders to this month with each committee to be
led by a representative of the coalition government Current committee heads are Ts Tsolmon at
the Security and Foreign Policy Committee G Bayarsaikhan at the Environment Food and
Agriculture Committee Z Bayanselenge at the Social Policy Education Culture and Science
Committee R Burmaa at the Petition and Requests Committee A Bakei at the State Structural
Committee Ts Davaasuren at the Budget Committee Sh Tuvdendorj at the Legislation
Committee and B Garamgaibaatar at the Economic Committee
Source Zuunii Medee
FOREIGN CURRENCY PAYMENTS BANNED FOR MININGEXPLORATION LICENSING FEES
The Ministry of Finance has banned the use of foreign currencies to pay for mining and exploration
licensing fees to the Mineral Resources Authority beginning 1 January 2014
The Ministry of Finance has prompted these entities and companies holding licenses to comply with
Mongolian currency law that states that all businesses and agencies must do business in Mongolian
tugrug According to the 2009 law transactions must not be carried out in foreign denominated or
foreign currency based rates
Source Newsmn
MINING MINISTRY TO COOPERATE WITH ASSOCIATION OF FLUORSPAR EXPLORERS
The Ministry of Mining Wednesday established a memorandum of mutual understanding with the
Association of Fluorspar Explorers (AFE) to cooperate in augmenting the countrylsquos export
In addition to expanding export goals include developing transparent and responsible mining
improving qualities and standards of fluorspar metallurgy and flotation concentrate and in
increasing the production output of the minerallsquos ore enrichment The hope is the memorandum
will create a launching point for a national program for fluorspar its exploitation increase the
volume of production by intensifying research and increase competitiveness in international
markets It will also be necessary to introduce the latest technology to the country along with
running joint trainings with foreign NGOs the Ministry said
Source Montsame
DP REJECTS AMARJARGAL‟S RESIGNATION
Parliament voted against MP R Amarjargallsquos resignation request on 12 December
During Tuesdaylsquos meeting the majority of the Standing Committee on State Structure voted against
Amarjargal`s resignation The head of the Democratic Party (DP) caucus D Erdenebat took a
strong stance against letting Amarjargal leave
Amarjargal said he wanted to resign to take responsibility on behalf of his party members for the
current political situation and economic restraints in Mongolia DP members agree with his
conclusion but encourage him to make the effort and participate for social change and
development Members of the opposition Mongolian Peoplelsquos Party members said that Amarjargal
could see the problems and nature of the majority of Parliament and praised his plan to resign
Source Newsmn
MPP HEAD TO STEP DOWN
Mongolian People Party (MPP) Head N Enkhbold has requested his resignation as party leader
MPP Deputy Head D Oyunkhorol said 9 December that Enkhbold submitted his request to step down
during a party meeting Oyunkhorol said Enkhboldlsquos resignation was due to personal reasons The
new party head will be appointed by the MPPs governing board
Source Udriin Sonin
FIFTH ROUND OF NEGOTIATIONS FOR THE JAPAN-MONGOLIA ECONOMIC PARTNERSHIP
AGREEMENT
The fifth round of the negotiations for the Japan-Mongolia Economic Partnership Agreement (EPA)
will be held from 16 to 19 December in Ulaanbaatar
The Japanese delegation will be led by Jun Yokota ambassador in charge of economic diplomacy
and the Mongolian delegation will be led by Ochirbat Chuluunbat vice minister for economic
development Experts from relevant ministries and agencies of both sides will participate in the
meetings
In this round negotiations are in areas including trade in goods and investment
Source 4-Traderscom
FIRST MONGOLIA-CHINA JOINT BORDER COMMISSION MEETING IN BEIJING
The very first meeting of Mongolia-China joint commission of borders took place 11 and 12
December in Beijing China
This meeting was co-chaired by T Togsbilguun a director of the Department of Neighbour
Countries of Mongolialsquos Ministry of Foreign Affairs and by Xiao Jiangguo a representative of border
checkpoint and seaport affairs Both sides shared on ideas for implementation of the
intergovernmental contract on the border regime and reached some agreements on conducting a
joint examination in the border signs and on activating the collaboration in law enforcement around
frontier areas After this they discussed issues of developing border checkpoints at a same level
putting some border checkpoints into a permanent regime giving an international status to four
checkpoints
The gathered also made a protocol on their meeting and inked its results The next meeting will run
in 2014 in Ulaanbaatar
Source Montsame
BELARUS TO OPEN EMBASSY IN MONGOLIA IN 2014
Belarus will open its embassy in Mongolia in 2014 reads a resolution from the Belarus Council of
Ministers of the Republic of Belarus from 12 December 2013 Belaruslsquo Finance Ministry will finance
the costs of opening and maintaining Belarusian Embassy in Mongolia from the funds set aside in its
national budget for the opening and maintenance of diplomatic missions and consular missions of
the Republic of Belarus abroad
Source Belarusian Telegraph Agency
HOWELL NEW JERSEY USA BECOMES SISTER CITY OF SUKHBAATAR DISTRICT
The Howell Township and the Sukhbaatar district in Mongolia signed a memorandum of
understanding to create sister citieslsquo between Howell New Jersey USA and the Sukhbaatar District
on Tuesday
The program was aimed at opening up talks on how each can benefit from one another Mayor
William Gatto said Howell Township is a very diverse city and theyve taken the relationship with
the Kalmyk community here in Howell and expanded it to a country where they have had no
relationship in the past he said
The sister citieslsquo program will allow both Mongolia and Howell to exchange ideas and come up
with new and better ways to do things that benefits both cultures Outside of Mongolia Howell has
the largest population of Kalmyks in the world with many living in the Freewood Acres section of
the township Gatto said
Some of the goals of the agreement include promoting a common prosperity and development for
both parties an electronic pen-pal program and education opportunities for exchange students
Through a translator Baljinnyam Gan-erdene of the Citizens Representatives Council of Sukhbaatar
District said he came to Howell to see how democracy works in the United States
Im really glad and hope that this unforgettable and successful visit opens the door to our
friendship and prosperity between our residents Gan-erdene said
Gatto gave Gan-erdene a Howell flag and a throw blanket created by the Historical Society
depicting the history of the township Gan-erdene also gave Gatto several items including a bronze
piece of art
Source NJcom
MONGOLIAN CALLIGRAPHY ADDED TO UNESCO CULTURAL HERITAGE LIST
State Parties at the 8th Session of the Intergovernmental Committee for the Safeguarding of the
Intangible Cultural Heritage in Azerbaijan unanimously agreed to register Mongolian calligraphy as
an intangible cultural heritage in need of urgent safeguarding on 2 December
―Mongolian heritage calligraphy is now being recognized by the world and I am grateful on behalf
of my country for decision makers said Secretary-General of Mongolian National Commission for
UNESCO Gundegmaa Jargalsaikhan He noted that Mongolian calligraphy was the fifth cultural
heritage item of Mongolia to be listed and now stands among the Mongolian epic traditional folk
dance the traditional music Tsuur and a circular breathing technique
Mongolian calligraphy is a 1000-year-old writing system that vertically connects continuous strokes
together to create a word Letters of Mongolian script have been created and taught by nomads
from generation to generation During the 1937-1940 purges of the Soviet era thousands of tutors
and traditional scholars of the script were killed Those who remained alive were banned from
mentoring the younger generation Soon after that or around 1946 a new Cyrillic script was
adopted as the only eligible script therefore banning all the teachings of old Mongolian script and
Latin lettering Only in the 1970s was the old Mongolian script re-introduced to scholars allowing a
limited number of classes in universities
After the 1990 democratic changes along with the revival of Mongolian identity interest in
traditional calligraphy reawakened As a sign of such revival the very first non-communist political
organization the Democratic Union of Mongolia used folded calligraphy as its main logo
Source Info Mongolia
THOUGH IMPROVING MONGOLIA STILL REELING UNDER CORRUPTION
The third joint survey by the Asia Foundation and Sant Maral Foundation to gather data on the
perception of corruption in Mongolia revealed that efforts to curb corruption in what is considered
as one of the worldlsquos most corrupt countries could be having impact
The survey shows a significant drop in the percentage of respondents who believe corruption has
increased in the last three years from 389 percent in November 2012 to 183 percent currently In
contrast in 2006 a majority of respondents (63) indicated that corruption has increased ―a lot in
the last three years The survey also shows that corruption has declined in importance as a critical
social problem since 2006 Despite these positive signs overall respondents indicated that
corruption remains a serious issue in some specific key areas
Conducted in September of this year the survey featured face-to-face interviews in 1360
households across Mongolia including seven districts in Ulaanbaatar and 21 counties in six
provinces A majority (766) cited that widespread corruption in the law enforcement agencies is
one of the main reasons the government has been unable to tackle corruption effectively When
corruption is perceived to be this widespread the attention will obviously turn to the performance
of the apex anti-corruption body the Independent Authority Against Corruption (IAAC) The survey
shows that the IAAC is slowly but surely beginning to gain confidence among citizens The
percentage of those surveyed who think that its performance is ―good or ―very good increased
from 78 percent in March 2010 to 203 percent in March 2013 In September 2013 the result shows
a new high of 294 percent
Peoplelsquos perceptions on corruption are often shaped by personal experiences Although very few
respondents in the survey said that they had actually paid a bribe themselves (8 percent about a 3
percent drop from 2012 and an 18 percent drop since 2006) as noted before many are not willing
to report instances where they are asked for one Similarly 36 percent of respondents said they
would not pay a bribe but 26 percent indicated that they would pay if they had the financial
capability
Basanta Pokharel is The Asia Foundation‟s chief of party for the STAGE program in Mongolia He
can be reached at basantapokharelasiafoundationorg The views and opinions expressed here
are those of the individual author and not those of The Asia Foundation
Source Asia Foundation
MPP DEMANDS DISMISSAL OF MINISTERS
Mongolian Peoplelsquos Party Chairman N Enkhbold and party head S Byambatsogt submitted to the
Speaker a request for the dismissal Minister of Finance Chultem Ulaan and of Economic
Development Minister Nyamjav ―Fortuna Batbayar
Our faction believes that these ministers must be held responsible for the worsening of the
national economic situation We also intend to do the same with other ministers after hearing
opinions of people said Byambatsogt
Source Montsame
FORMER TAVAN TOLGOI JSC DIRECTOR ARRESTED
The Independent Agency Against Corruption arrested former Tavan Tolgoi JSC director Kh
Tumenbayar for undisclosed reasons
An unnamed official source suggested that the arrest may be related to abuses of power and
payments to political parties as well as the construction of a high-class hotel in Dalanzadgad Soum
Umnugobi Aimag Kh Tumenbayar is a member of the Democratic Party a member of Parliament
and is an associate of ―Ajnai Bat-Erdene the Minister of Defense who helped Tumenbayar attain
position as the director of Tavan Tolgoi for 6 years and rise to head of the Umnugobi Aimag Citizens
Council
Tumenbayar voluntarily resigned from his position at Tavan Tolgoi last month The IAAC has
reportedly not given details to the reasons for the investigation opened on Tumenbayar because of
possible connections to high-ranking officials
Source Unuudur
MONGOLIA TURKMENISTAN JOIN INTERNATIONAL RACING FEDERATION
The International Federation of Horseracing Authorities (IFHA) has welcomed racing organizations
from Mongolia and Turkmenistan as affiliate members
Recent ratification to IFHA statutes at its annual General Assembly in October created a new
affiliate membership category within the Federation Thus the Federation of Mongolia Horse Racing
Sport and Trainers and the Turkmen Atlary State Association by unanimous vote of the IFHA
Executive Council in Paris in October have become the IFHAlsquos first two affiliate members
The Federation of Mongolian Horse Racing Sport and Trainers (FMHRST) is a non-governmental
organization (NGO) which serves to the development of equestrian sport in Mongolia and works to
protect the rights of horsemen who specialize in this national sport The new affiliates were
announced by IFHA Chairman Louis Romanet this week and several key appointments to IFHA
executive office positions and committees have also been made
Source Horse Talk
MONGOL TV HEAD MEDIA CAN HELP FIX THE BIG PROBLEMS
Nomin Chinbat head of Mongol TV has grander intentions than just ridding the countrys television
business of rampant pirated content and unlicensed formats The young executive wants to help
clean up Mongolian politics and the nation by creating a free and open media
―The networks are used as propaganda channels for politicians They are used very effectively every
four years at election time says Chinbat whom the Source named one of the 25 Most Powerful
Women in Global TV at MIPCOM 2013
―There are laws against piracy but they arenlsquot implemented explains Chinbat who says that
politicians in the country of roughly three million wonlsquot challenge journalists because their
relationships with them are too cozy
Mongol TV has invested in original programming licenses all of its imported content and runs
investigative journalism features highlighting social problems such as alcoholism and corruption
The company is organizing a Mongol TV Day for February 2014 to which it has invited major
international studios to raise awareness of the issues and introduce the global industry to
Mongolia Britainlsquos ITV and Americalsquos CBS are already confirmed and negotiations are ongoing with
other attendees The situation has improved in recent years with some channels having become
what Chinbat calls ―hybrids which license some sports rights but then steal others and copy
formats
―These days some of these channels might license 25 episodes of a format and make 50 But this is
actually progress says Chinbat
Chinbat and her team were at the Asian Television Forum (ATF) in Singapore looking for new
formats that can be produced within the constraints of Mongolian television budgets However with
Mongolias young populationmdash65 percent of the country is under 35 years oldmdashmobile viewing is on
the rise and the network is already working second-screen utilization and new media applications
This demographic sweet spot should guarantee strong growth in the population economy and
nascent entertainment sector in Mongolia in the coming decades
Source Hollywood Reporter
ANNOUNCEMENTS
ldquoMM TODAYrdquo ON MNB-TV FRIDAY 1900 TO 1910
BCM is pleased to announce that Mongolian National Broadcasting continues its cooperation with
BCM on ―MM Today This English news program is aired every Friday for 10 minutes and is
scheduled from 1900 to 1910 tonight Tune in to watch this program that reports stories from
todaylsquos BCM NewsWire
BCM WEBSITES
MONGOLIAN WEBSITE bdquoPRESENTATIONS‟ AND bdquoNEWS‟ SECTIONS
The Presentationslsquo section on BCMlsquos Mongolian website can be reached via bcmmnitgeluud
As a key component of BCMlsquos Mongolian website articles from the Newslsquo section and the
government website Open-Governmentmn are regularly updated
S Oyun Minister of Environment and Green Development presentation at BCM monthly meeting on
May 27 added to Mongolian website bcmongoliaorgmnилтгэлүүд
- Байгаль орчин ногоон хөгжлийн сайд СОюун Байгаль орчин ногоон хөгжлийн шинэчлэлийн
бодлого үйл ажиллагаа МБЗ-ийн сарын уулзалт 5 сарын 27 2013
___________________________________________
ENGLISH WEBSITE PRESENTATIONS MONGOLIA REPORTS bdquoINTERVIEWSbdquo MONGOLIAN
BUSINESS NEWS‟ bdquoPHOTO GALLERY‟
The following 13 presentations are from the Mongolia Investment Summit- 2013 in Hong Kong
November 18-20
- Regulatory Update Navigating Mongolialsquos legal framework for foreign direct investment
Javkhlanbaatar Sereeter Director General Foreign Investment Regulations and Registration
Department MINISTRY OF ECONOMIC DEVELOPMENT OF MONGOLIA
- Investment keynote Investing into Mongolia in 2013 ndash Where do the opportunities lie James
Passin Co-Founder and Manager FIREBIRD MONGOLIA FUND
- Development keynote Key challenges and opportunities for continued growth in Mongolia
Randolph Koppa President TRADE AND DEVELOPMENT BANK OF MONGOLIA
- Outlining government policies and long-term plans for Mongolialsquos mining sector Amarjargal
Khurelbat Head of International Cooperation Division MINISTRY OF MINING OF MONGOLIA
- From copper to met coal Demand and price outlook and expected impact on Mongolialsquos economy
Ghee Peh Managing Director Metals and Mining Research UBS SECURITIES ASIA
- How Mongolian banks and financial institutions are dealing with the challenges and opportunities
of a fast growing economy Norihiko Kato Chief Executive Officer KHAN BANK
- Update on the Mongolian stock market ndash Impact of the new Securities Law Altai Khangai Chief
Executive Officer MONGOLIAN STOCK EXCHANGE
- From investment banking to trade finance to micro credits to insurance Amartuvshin Hanibal
Managing Director TENGER FINANCIAL GROUP LLC
- Spotlight presentations Showcasing Mongolian investment opportunities Peter Morrow Board
Director ASIA PACIFIC INVESTMENT PARTNERS
- Spotlight presentation Showcasing Mongolian investment opportunities Munkhbat Davaatseren
CEO of Golomt Securities GOLOMT BANK
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources
Batmunkh Batkhuu Chairman SHARYN GOL JSC
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources
Jimmie Wilde Chief Operating Officer BERKH UUL JSC
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources Mona
Forster Executive VP ENTREacuteE GOLD INC
The following two presentations are from the ―ANTI-CORRUPTION LEGISLATIONPOLICY
INTERNATIONAL BEST PRACTICE ON TRANSPARENCY training seminar for businesses in
Ulaanbaatar November 18 2013
-―International business standard on transparency by Jelena Pesic Director PwC
-―Finlandlsquos best practice on transparency and anti corruption by Dr Pekka Hallberg (as it is
worldlsquos number one) Emeritus President of the Supreme Administrative Court of Finland
The following 15 presentations are from the Mongolia Mining Summit Perth Australia October 29-
31 2013
bull Mongolialsquos Minerals Future and Development by Otgochuluu Ch Director General Department of
strategic policy and planning at Ministry of Mining Mongolia at the Mongolian Mining Summit 2013
Perth Australia Oct 29-31 2013
bull Mongolian Economy Investment OpportunitiesChallenges Jim Dwyer Executive Director
Business Council of Mongolia at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31
2013
bull Oyu Tolgoi Lessons from the Gobi Houston Spencer Vice President Communications and Media
Relations Oyu Tolgoi at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Market dynamics for Mongolian coking coal in the Chinese market Graeme Hancock President
and Chief Representative at Anglo American Mongolia at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Speech by Mr Ariunbold Byamba Deputy Director Erdenes MGL LLC at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull Launching Mining Projects in MongoliandashA Major Contractorlsquos Perspective Eric Erdenebat
Tseveendorj Country Manager Orica Limited at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Investing in a dynamic legislative environment Elisabeth Ellis Managing Partner Ulaanbaatar
Minter Ellison at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Sandvik In Pit Crushing amp Conveying (IPCC) Doug Turnbull Principal Mining Engineer Sandvik
Mining Systems at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Ovoot Coking Coal Project David Paull Managing Director Aspire Mining at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull The business of being a third neighbor David Landers General Manager East Asian Growth
Markets at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Nuurst Thermal Coal Project Daniel Rohr Chief Financial Officer Modun Resources Ltd at the
Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Culture matters in building sustainable long-term business relationships Hana Tserenkhand
Byambadash Business Development Consultant AusMon Consulting and Dr Christine Hogan Adjunct
Professor Curtin University Consultant amp Author at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Maximizing Business Benefits from Your IT Investment Brad Skeggs Executive Director COSOL at
the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Presentation by Battsengel Gotov CEO Mongolian Mining Corporation at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull Mongolian Mining Sector Present and Future Developments NAlgaa Executive Director
Mongolian National Mining Association at the Mongolian Mining Summit 2013 Perth Australia Oct
29-31 2013
The ―Mongolia Reports section includes the following
- ―Ministry of Finance of Mongolia 2013 Government Debt Auctions by Bank of Mongolia
- ―Doing Business in Mongolia 2013 Country Commercial Guide for US Companies by US
Embassy
- ―Real Estate Report 2013 by Mongolian Properties
- ―Selected Macroeconomic Indicators November 20 2013 by International Monetary Fund
- ―2013 Second Annual Mongolian CEO Survey from PricewaterhouseCoopers Audit LLC
- ―Selected Macroeconomic Indicators data through October 16 2013 by International Monetary
Fund
- ―IMF Completes 2013 Article IV Mission to Mongolia by International Monetary Fund
The following are added to Interview Section from the Oxford Business Group Mongolia Reports
2013 book
bull B Byambasaikhan Chairman Business Council of Mongolia ―Talk is cheap
bull President Ts Elbegdorj ―Diversifying for growth
bull Jim Dwyer Executive Director Business Council of Mongolia ―Non-mining sectors budding
bull Peter Morrow Chairman American University of Mongolia ―Filling in the blanks
bull N Zoljargal Governor Bank of Mongolia ―Sustainable vision
bull Gansukh Minister of Roads and Transportation ―Accessing new markets
bull J Od President MCS Group ―Building interest
bull B Chuluunbaatar President and CEO of Monnis Group ―Climbing the ranks
bull Cameron McRae President and CEO Oyu Tolgoi ―Sitting on a copper mine
BCMs English website includes the ―Mongolia Business News section where the Open Letter to
Parliament and Government is available for download
BCM continuously posts news stories and analysis of relevance to Mongolia at Mongolian Business
News before they are all put together each week for Fridays weekly NewsWire
The ―Photo Gallery contains photos from the 6th Anniversary BCM Renewal dinner on November
11 2013
BCM Football Cup 2013 pictures are posted to the website - httpbcmongoliaorgenphotos350-
enalbumalbumid=200
The BCM NewsWire will continue to be issued each Friday incorporating items already on the home
page for a consolidated account of the weeklsquos events
SOCIAL NETWORK WITH BCM
BCM LAUNCHES NEW LINKED-IN COMPANY PAGE
The Business Council of Mongolia has launched a new company page on the social networking
website LinkedIn to network its members and followers including small-medium enterprises (SMEs)
The new page will allow BCM to alert followers to the latest news and information critical to their
businesses Memberslsquo businesses will be promoted Additionally BCM plans to deliver monthly
infographics on the latest data as well as videos and other media content as they come The bulk of
the content on the new page will be in Mongolian language to better cater to BCMs Mongolian-
speaking audience and members The following link can direct you to the New BCMs Linked-in page
httpwwwlinkedincomcompanybusiness-council-of-mongoliatrk=company_logo
The Business Council of Mongolia (BCM) has expanded its reach to your favorite social networks
Keep up to date on the latest business deals in Mongolia and how the climate for investment is
improving each day with BCM
Add BCM on Facebook at httpswwwfacebookcomTheBusinessCouncilOfMongolia to read the
latest announcements and comment on events carried in the NewsWire with the community
Hear breaking news and announcements as they happen when you follow BCM on Twitter at
httpstwittercombcmongolia
We have now 2482 fans on our Facebook fans page 1527 connections on LinkedIn network and
835 followers on Twitter
Of course for news information interviews event photos and announcements regarding our
organization visit the official BCM website at httpbcmongoliaorgen
ECONOMIC INDICATORS
INFLATION
Year 2006 60 [source National Statistical Office of Mongolia (NSOM)]
Year 2007 151 [source NSOM]
Year 2008 221 [source NSOM]
Year 2009 42 [source NSOM]
Year 2010 130 [source NSOM]
Year 2011 102 [source NSOM]
November 30 2013 120 [source NSOM]
Year-over-year (y-o-y) nationwide
Note 111 y-o-y Ulaanbaatar city November 30 2013
CENTRAL BANK POLICY LOAN RATE
December 31 2008 975 [source IMF]
March 11 2009 1400 [source IMF]
May 12 2009 1275 [source IMF]
June 12 2009 1150 [source IMF]
September 30 2009 1000 [source IMF]
May 12 2010 1100 [source IMF]
April 28 2011 1150 [source IMF]
August 25 2011 1175 [source IMF]
October 25 2011 1225 [source IMF]
March 19 2012 1275 [source Mongol Bank]
April 18 2012 1325 [source Mongol Bank]
January 25 2013 1250 [source Mongol Bank]
April 8 2013 1150 [source Mongol Bank]
June 25 2013 1050 [source Mongol Bank]
CURRENCY RATES ndash DECEMBER 19 2013
Currency Name Currency Rate
US dollar USD 164138
Euro EUR 224680
Japanese yen JPY 1579
British pound GBP 268874
Hong Kong dollar HKD 21170
Chinese Yuan CNY 27031
Russian Ruble RUB 4981
South Korean won KRW 155
Disclaimer Except for reporting on BCMlsquos activities all information in the BCM NewsWire is
selected from various news sources Opinions are those of the respective news sources
GROWTH SEEN IN EXPORT OF PRECIOUS METALS
The export value of precious metals grew 114 percent in November from the month before and 63
percent from the same period in 2012 according to the National Statistical Office
Exports totaled USD 38 billion in the year to December while imports grew to USD 58 billion The
foreign trade balance saw a deficit of USD 2 billion November saw exports of USD 381 million and
imports of USD 514 million with exports and imports in decline between July and November The
value of export products for the first 11 months was USD 11 billion Despite the gain in precious
metal exports exported minerals which represented 81 percent of all exports in the year to
November fell 129 percent from the year before
Source Zuunii Medee
MNT 788 BILLION WILL BE ENTERED INTO THE STABILIZATION FUND
The Stabilization Fund is set to collect MNT 49 billion this year and MNT 298 billion next
The Stabilization Fund was established to collect surplus revenue in years of economic gains from
the mining sector to cushion possible annual losses during economic downturns and weak
commodity demand Any gain in the price for gold and coal next year will also be reflected in
allotments to the fund
Source Zuunii Medee
ECONOMIC DEVELOPMENT MINISTRY PLANS TO PUT 81 OF BUDGET INTO CONSTRUCTION
The Economic Development Ministry plans to invest MNT 814 percent of its total investment budget
into construction
Beginning 1 January 2014 the ministry will provide MNT 9303 in loans toward the construction
sector The ministry will spend 39 percent of its budget for reconstruction and repair 10 percent
for the purchase of new techniques and technical equipment 3996 percent for infrastructure
2743 percent for education and health 636 percent for employment and agriculture and 2926
percent for other sectors of the economy
Projects include the construction of 30 clinics 27 cultural centers 6831 km of paved roads and
1032 m length of bridges Mongolia has received USD 55 billion in aid in the last two decades of
which 55 percent was in the form of low rate loans and 45 percent as non-repayable grants for
investments into agriculture infrastructure power and health sectors
Economic growth since 2011 has allowed Mongolia less aid than in the past The government has
now turned its focus on providing funding with concession agreements to large scale projects such
as the Nariin Sukhait-Shivee paved road and the power station at Mogoin gol Other projects include
Power Plant No 5 the Altanbulag-Ulaanbaatar-Zamyn Uud highway the Tavan Tolgoi- Khanbogd-
Khangi road and the Tuul Songino water reservoir complex
Source Zuunii Medee
TT POWER PLANT MAY NEED CONCLUSION TO OT DISPUTE SAYS DIRECTOR
Uninterrupted development of the Tavan Tolgoi power plant will ride on the outcome of disputes
concerning Oyu Tolgois underground mine said the director of the plant
―One of the main risks is the issue of a main user Enkhsaikhan said ―The key buyer of the power
from the TT Power Plant is OT Due to the uncertainty over phase twolsquo and unresolved matters
with the government of Mongolia OT is not regarded as a reliable buyer on a stand-alone basis
He added that the power company may request a guarantee from Oyu Tolgoi
A consortium that includes Koreas Posco Energy and Daewoo Engineering and Construction GDF
Suez Energy Asia Japans Marubeni Corp and Kansai Electric Power in March was selected for
development of the plant which has a preliminary estimate cost of USD 1 billion Those expenses
include installation of 150 kilometers of electric lines between Tavan Tolgoi and Oyu Tolgoi The
consortium will be expected to raise 30 percent of the cost itself while the remaining 70 percent
will come from bank loans However the uncertainty surrounding the Oyu Tolgoi copper mine could
create more hold ups
Source Zuunii Medee
CABINET TO CONCLUDE CONCESSION ON ALTANBULAG-ZAMYN UUD HIGHWAY
The Cabinet of Ministers ordered ministers to conclude a concession agreement for the Altanbulag-
Ulaanbaatar-Zamyn-Uud highway
The government is planning to establish the concession contract with the Chinggis Land
Development Group which according to the agreement shall have exclusive rights to construction
ownership and transfer of property using its own financing The concessionaire shall complete the
construction within three years after that shall operate the facility for another 30 years before
transferring the ownership to the Government
If Chinggis Land accepts these terms it would be responsible for developing a feasibility study and
blueprint of the project to be approved by the relevant ministries before concluding a financing
agreement The concession agreement will come into effect after the Chinggis Land Development
Group obtains a financing agreement for USD 1 billion from a commercial bank of Mongolia
The government will be responsible for freeing up the land where the highway is planned while the
Chinggis Land would cover the costs for doing so
Source Montsame
MNT 116 BILLION WILL BE SPENT FOR BUILDING EMERGENCY ALARMS IN UB
The National Emergency Management Agency has installed an emergency alarm system in 60
locations of Ulaanbaatar The alarm will alert citizens to natural disasters such as earthquakes
The alarms will be controlled from a center by microwave radios and satellite communication
devices
Source Udriin Sonin
EIU CLARIFIES EXTENT OF OFFICIAL ESTIMATES OF OIL SHALE RESERVES
The latest research from Mongolias mining ministry gives a clearer picture of oil shales
development potential in the coming years Although Mongolia has long been known to have
substantial oil shale deposits previous estimates were extrapolated from rudimentary surveys
conducted in the 1990s and thus left the actual reserves open to speculation
Plans to develop the industry took shape only in April 2013 when an American company Genie
Energy signed a five-year deal with the Petroleum Authority of Mongolia to explore oil shale
reserves in central Mongolia Genie also plans to build a USD 4 billion processing factory in Tuv
Aimag According to government projections the processing plant will generate USD 850 million of
tax revenue annually Aside from the economic benefits of the project domestic fuel sources could
help Mongolia to improve its energy security by loosening the countrys dependence on its powerful
neighbors At present 90 percent of Mongolias oil and related products come from Russia with most
of the remaining amount being imported from China
Yet the benefits of large-scale oil shale extraction are not as clear as they might seem at first
glance Most importantly Mongolias oil shale resources should not be confused with the shale oil
phenomenon that is currently sweeping the United States Oil shale (also called kerogen) is more
expensive to extract than shale oil and carries greater environmental costs In particular oil shale
requires a large amount of water to process which could be a risky proposition in Mongolia where
hydrological resources are already under strain Although other countriesmdashEstonia in particularmdashuse
oil shale as a substitute for coal extracting liquid fuel from the shale is a complex and relatively
untested process
Genie Energys progress on the project seems more substantial than that of comparable coal
liquefaction projects that have faltered in the region However environmental technical and
political limitations suggest that Mongolias overall dependence on foreign fuel will not change
significantly in the foreseeable future
―We remain doubtful that oil shale will play a significant role in Mongolia in the next two years so
our economic growth and trade forecasts will remain unchanged said the Source
Source Economist Intelligence Unit
MONGOLIA AND THE THREAT OF THE RESOURCE CURSE
Mongolia is at a crossroads while investors complain the government is dragging its feet on allowing
miners to start digging it is crucial that it get things right at the early stages of the resources
boom
Mongolias challenge will soon be the worlds says Richard Dobbs and his team at McKinsey in a
report predicting a USD 17 trillion investment bonanza by 2030 to keep up with demand for oil gas
and other materials In 1995 about 58 countries depended on resources for the bulk of their output
and wealth In 2011 that number had risen to 81 By 2030 roughly half of the worlds economies
will essentially become giant filling stations for developing superpowers from China to South Africa
That means that instead of the world moving toward greater transparency democracy and freer
markets we could see rising corruption levels and even greater income inequality
Economies with natural-resource endowments have a huge opportunity to transform their
prospects but history suggests that they could all too easily squander the windfall says Dobbs
director of the McKinsey Global Institute in London
The world would be wise to take steps today to break this cycle McKinsey recommends several
While not terribly original they include strengthening public institutions and good governance
building decent infrastructure boosting national competitiveness promoting sound fiscal policy
making and spending the windfall wisely while engaging in forward-looking economic and social
planning The trouble is that political will and integrity is often the first casualty once the minerals
start flowing out and the spoils come pouring in
Mongolia is at that very crossroads today Investors complain the government is dragging its feet on
allowing miners to start digging But its more important to get things right at the early stages of
the resources boom That means acting now to create the institutions and regulatory frameworks
needed to ensure revenue transparencymdashknowing exactly how much money is being dug out the
ground and where its going Why not set up a sovereign-wealth fund to save for Mongolias future
When the stakes are that high a little patience can go a long way
Source Bloomberg
MONGOLIAS NOMADS WARM TO SOLAR POWER
In Mongolia often known as the land of the blue skies the sun shines for 250 days on average each
year It beats down on the sparse plains and on the Gobi desert that spans the countrys southern
border with China
It shines even during the frigid winter days on the hundreds of thousands of nomads who still roam
the steppes herding animals and living in dome-like tents calling gers About 800000 of Mongolias
28 million inhabitants still live the traditional nomadic lifestyle that has remained largely
unchanged for generations Apart from the addition of motorbikes the occasional petrol generator
and a passing trade from intrepid tourists wanting to stay in a ger for the night life is almost the
same as that of many nomads grandparents and great-grandparents Almost but not exactly
Dotted across the steppes glints of light can be seen as the sun bounces off the solar panels that
have been installed on the sides of gers made of felt and yaks wool At the start of this millennium
Mongolias herders and nomads had little or no access to modern electric power and its potential
benefits But as of 2013 thanks to a concerted push by the Mongolian government almost 70
percent of nomadic people have access to electricity Bor a herder who mainly travels around
western Mongolias Arkhangai province is one of the people whose family benefits from portable
solar home systems (SHS)
We use it for generating the power for lighting in the ger charging phones we can also generate a
fridge to keep food longer and we can run a television That is very useful for us because we can
get the most recent weather forecast which is important for our work and keeping our animals
safe Before we had power it was very difficult Now it is almost like living in the city
The ability to charge mobile phones is also important for the herders who often have children
staying at boarding schools Access to electricity also allows families to contact emergency health-
care and doctors for advice without having to make the often arduous journey to the nearest village
or town
The solar systems were distributed and installed with the help of the World Bank after the
Mongolian governments National 100000 Solar Ger Electrification Program ran into difficulties A
World Bank report Capturing the Sun in the Land of the Blue Sky describes the difficulties faced by
the Mongolian government on its ambitious project
By 2005 five years into the plan 30000 families had been kitted out with an SHS but then the
program began to stagnateThe government of Mongolia recognized that considerably more effort
was necessary not only to keep the program on track but to scale-up implementation in order to
achieve the National 100000 Solar Ger Electrification Program target the report said In 2006 the
World Bank agreed to cover half of the initial outlay costs for each family as well as after-sales
maintenance with 50 centers set up across the country including at least one in each of its 21
provinces so that the herders would not have to travel to Ulaanbaatar every time the solar panels
needed maintenance
The SHS project also offers environmental benefits to a country where the ratio of carbon dioxide
emissions to economic output is ten times higher than the world average because of the increase in
mining over the past decade as the true extent of Mongolias mineral wealth became apparent The
solar systems are slowly replacing the diesel generators used by some nomads as a means of
generating power although they are still using stoves for heating burning wood coal and dung
throughout the year
Source Al Jazeera
IRON-ORE AND COAL PRICES GO SEPARATE WAYS
Prices of the key ingredients in steel productionmdashiron ore and coking coalmdashare moving along sharply
different paths as mining companies resist cutting coal output despite the market being awash with
the raw material
While iron-ore prices have risen 22 percent since May coking coal is still searching for a rebound
Coking-coal prices are off more than 4 percent over the same period China is on course for another
year of record steel production with supply directed to the construction of high-rise apartment
buildings the manufacture of luxury cars and other uses
There is simply too much coal on the market the International Energy Agency said in a report this
week
Shipments of steelmaking coal from Australiamdashthe worlds biggest exporter of the commoditymdashare
forecast by the government to rise to 178 million tons in 2015 from 145 million tons last year Most
goes to China which accounts for 60 percent of global demand In contrast global iron-ore
exporters are struggling to increase output in areas other than Australias remote Pilbara region
supporting prices of that commodity The spot price of iron ore climbed to nearly USD 140 a ton
earlier this month a four-month high Prices have since eased a bit to USD 13430 a ton but
remain well above the consensus forecasts of analysts at the start of this year
Coal miners could scale back production but that isnt always easy to do In Australia many miners
are locked into so-called take or pay contracts with rail and port operators Many analysts dont
expect coking-coal prices to rebound for at least another 12 months RBC Capital Markets expects
coking-coal prices to average USD 154 a ton in 2014 down from USD 159 a ton forecast for this
year Instead they see more chance that iron-ore prices will come down more sharply RBC predicts
an 11 percent fall in iron-ore prices next year as new supply from Anglo Americans Minas Rio
project and mines owned by Fortescue Metals Group Ltd is added to the market UBS is even more
bearish predicting iron ore will fall below USD100 in the second half of 2014
Source Wall Street Journal
ARE COMMODITIES TRADERS bdquoTOO BIG TO FAIL‟
When the banking industrylsquos top lobby group commissioned a report by on commodity trading
houses the idea was to show trading houses like Glencore Xstrata Vitol or Cargill were ―too big to
fail and therefore needed to be regulated in a similar manner to the banks
But instead of highlighting the inherent issues surrounding the industry the report found trading
companies posed less systemic risk than the big banks As a result the Global Financial Markets
Association which commissioned the report decided not to finalize or publish it (The GFMA claims
that it often commissions reports which are shared with regulators and other interested parties but
never published) But the debate hasnlsquot ended
A separate report published in July by the Centre for European Policy Studies a think-tank argued
the growth of commodity trading houses which underpin the global trade in raw materials could
―have systemic implications Commodities trader Trafigura has become the latest to wade into the
debate In its recent prospectus for a EUR 500 million bond issue the worldlsquos second largest metals
trader and third biggest oil trader addresses the GFMA report as well as the issue of systemic risk
Making some tart observations the trading house says the GFMA paper was aimed squarely at the
Financial Stability Board a group of global regulators
―[The report] was widely seen as a tactic by some banks active in the commodity trading space as a
way of creating more equality between market participants by seeking to usher in further
restrictions on pure commodity trading companies the prospectus says
Commodity traders are facing the need to be more open about their operations and lift the veil of
secrecy Indeed the author of the GFMA reportmdashCraig Pirrong a widely respected academicmdashis
working on a white paper on commodities traders Commissioned by Trafigura it will look at what
commodities trading houses activities and the recent trend to accumulate more assets risk
management as well as looking at different types of commodity companies
Source Financial Times
SMOG DARKENS SHANGHAIS PROSPECTS FOR BECOMING A GLOBAL FINANCIAL CENTER
In the debate over which matters more in China money or quality of life the quality-of-life side
may have found the ultimate argument If you cant breathe nothing else really matters And itlsquos a
debate Mongolia has to have as it makes its own steps towards industrial and economic growth
Chinas pollution problem is spreading and growing worse a fact on stark display last week in
Shanghai the countrys financial center A stretch of filthy-air days in that coastal city so
thoroughly shocked residentsmdashwho had largely escaped the smog that has long plagued the likes of
Beijing and Harbinmdashthat it inspired fresh talk about getting away from China Lawrence Shu a
Shanghai-based partner at Hylands Law Firm said he and his friends are thinking more seriously
about moving abroad
The smog had a big impact because it feels really bad if you cant breathe freely he said
The environment used to take a back seat among the Chinese But as they get richer they are
traveling abroad more making the pollution back home more obvious The Internet also
contributes Blue-sky pictures posted on social networks by Chinese travelers abroad constantly
remind folks of what is lacking at home and Chinese now use various apps to track air-quality data
If Shanghais smog discourages smart financial professionals from wanting to live there that will
hinder Chinas effort to create a global financial center If businesses such as financial companies
and luxury-goods makers perceive that Chinas elites are spending more time outside their home
country they will be less willing to invest in China
Most rich Chinese havent packed their bags and left yet but they are keeping their options open
Relocation is a big decision said Anne Wang who works in the financial industry in Shanghai But
just in case she recently received a US visa that would allow her to live there
Source Wall Street Journal
POLITICS
MINERALS POLICY ENTERS FINAL DISCUSSIONS
The government published a final draft of Mongolialsquos State Policy on the Minerals Sector for 2013
through 2025
The document was first presented to Parliament in July and is now entering final discussions during
the autumn plenary session of Parliament following a 42 percent drop of foreign investment and 23
percent fall in the currency year-on-year
―We have reviewed the proposed State Policy on the Mineral Sector which we feel will be a
positive step forward if passed said the Source ―The passing of this policy will result in more
transparency and an increasing participation from foreign investors That said it will take time for
these feats to be accomplished Investors will be weary of Government promises as they seek
longevity to prove Government intentions
The proposed policy is divided into four main sections rationale principles main policy and
implementation-results The major points stressed in the policy include transparency and
responsible mining The law sends the message that growth is going to be driven by private sector
participation and the intent to provide a stable investment environment technological innovation
and value-added activities
Key priorities of the law since it was first unveiled include stability of taxation and the legal
environment an end to any discrimination between foreign and national investors and the
preservation of strategic resources and deposits
This most recent version saw the inclusion of a new section supporting development of local areas
and the interests of local citizens Other key elements include explorationmdashwhich would see
greater government regulation for strategic mineral deposits while cutting down bureaucracy and
conducting scientific researchmdashproduction support and local support The new document also
highlights greater support for non-governmental organizations for the environment allowing them
to claim damages from mining operations the establishment of funds to support economic
diversification environmental protections and land rehabilitation
The new draft has removed the risk assessment section and replaced it with a section on
implementation This includes the improvement of the legal environment and producing of relevant
regulations programs and projects for 2013 to 2015 followed by the implementation of programs
and projects from 2014 to 2025 and finally the provision of conclusions on midterm policy
implementation and further planning for up to 2020 and 2025
―We believe that this policy will take us one step closer to attracting investors and supporting
private sector development in Mongolia said the Source ―Despite current investor hesitation this
state policy in addition to the new amended Minerals Law set to pass next year will further
encourage investors to enter the market and will build support for the junior mining community
Source Mongolian Investment Banking Group
PARLIAMENT UNANIMOUSLY BACKS ldquoSMART GOVERNMENTrdquo INITIATIVE
Parliament has unanimously backed President Tsakhia Elbegdorjs ―From Big Government to Smart
Government initiative for government reform concepts having signed a joint statement of support
on 13 December
The joint statement gives full support to the presidents initiative and commits to cooperation for
its undertaking This includes support for enhancing government systems and policies in line with
democracy and a market economy improving the capacities of public services and curtailing
government intervention into private business affairs Also included are protections to private
business including establishing government structures for rule of law support to domestic
industries and honoring contracts The fight against corruption is another main perogative
On 16 November 16 the Office of the President of Mongolia organized a national consultative
meeting on this topic at the Government Palace Elbegdorj next met with members of the
Parliament on 9 December to organize an open dialogue with representatives of Parliament for an
appeal for them to sign the joint statement Reaffirming the commitment of the Mongolian
lawmakers to a breakthrough reform of the Government the leaders of party floors and factions in
the Parliament and independent members of the Parliament signed the document for the reform on
December 13 2013
Source Montsame
GOVERNMENT CALLS TO END PRACTICE OF APPOINTING MPS AS MINISTERS
The coalition government has thrown their support behind President Tsakhia Elbegdorjs proposal to
prohibit Parliament members from serving as cabinet ministers
Democratic Party members discussed a draft resolution and proposed amendments submitted by the
president for the new restriction at a party meeting on Monday The draft amendments were
unanimously backed by the faction The Justice Coalition which includes the Monglian Peoples
Revolutionary Party and Mongolian Democratic Party came to the same conclusion following its own
meeting said coalition head N Battsereg on Monday
Source Montsame
COMMITTEE LEADERS TO BE ELECTED THIS MONTH
The coalition government will soon be electing officials to lead the various committees in
government
Parliament has 8 standing committees to elect leaders to this month with each committee to be
led by a representative of the coalition government Current committee heads are Ts Tsolmon at
the Security and Foreign Policy Committee G Bayarsaikhan at the Environment Food and
Agriculture Committee Z Bayanselenge at the Social Policy Education Culture and Science
Committee R Burmaa at the Petition and Requests Committee A Bakei at the State Structural
Committee Ts Davaasuren at the Budget Committee Sh Tuvdendorj at the Legislation
Committee and B Garamgaibaatar at the Economic Committee
Source Zuunii Medee
FOREIGN CURRENCY PAYMENTS BANNED FOR MININGEXPLORATION LICENSING FEES
The Ministry of Finance has banned the use of foreign currencies to pay for mining and exploration
licensing fees to the Mineral Resources Authority beginning 1 January 2014
The Ministry of Finance has prompted these entities and companies holding licenses to comply with
Mongolian currency law that states that all businesses and agencies must do business in Mongolian
tugrug According to the 2009 law transactions must not be carried out in foreign denominated or
foreign currency based rates
Source Newsmn
MINING MINISTRY TO COOPERATE WITH ASSOCIATION OF FLUORSPAR EXPLORERS
The Ministry of Mining Wednesday established a memorandum of mutual understanding with the
Association of Fluorspar Explorers (AFE) to cooperate in augmenting the countrylsquos export
In addition to expanding export goals include developing transparent and responsible mining
improving qualities and standards of fluorspar metallurgy and flotation concentrate and in
increasing the production output of the minerallsquos ore enrichment The hope is the memorandum
will create a launching point for a national program for fluorspar its exploitation increase the
volume of production by intensifying research and increase competitiveness in international
markets It will also be necessary to introduce the latest technology to the country along with
running joint trainings with foreign NGOs the Ministry said
Source Montsame
DP REJECTS AMARJARGAL‟S RESIGNATION
Parliament voted against MP R Amarjargallsquos resignation request on 12 December
During Tuesdaylsquos meeting the majority of the Standing Committee on State Structure voted against
Amarjargal`s resignation The head of the Democratic Party (DP) caucus D Erdenebat took a
strong stance against letting Amarjargal leave
Amarjargal said he wanted to resign to take responsibility on behalf of his party members for the
current political situation and economic restraints in Mongolia DP members agree with his
conclusion but encourage him to make the effort and participate for social change and
development Members of the opposition Mongolian Peoplelsquos Party members said that Amarjargal
could see the problems and nature of the majority of Parliament and praised his plan to resign
Source Newsmn
MPP HEAD TO STEP DOWN
Mongolian People Party (MPP) Head N Enkhbold has requested his resignation as party leader
MPP Deputy Head D Oyunkhorol said 9 December that Enkhbold submitted his request to step down
during a party meeting Oyunkhorol said Enkhboldlsquos resignation was due to personal reasons The
new party head will be appointed by the MPPs governing board
Source Udriin Sonin
FIFTH ROUND OF NEGOTIATIONS FOR THE JAPAN-MONGOLIA ECONOMIC PARTNERSHIP
AGREEMENT
The fifth round of the negotiations for the Japan-Mongolia Economic Partnership Agreement (EPA)
will be held from 16 to 19 December in Ulaanbaatar
The Japanese delegation will be led by Jun Yokota ambassador in charge of economic diplomacy
and the Mongolian delegation will be led by Ochirbat Chuluunbat vice minister for economic
development Experts from relevant ministries and agencies of both sides will participate in the
meetings
In this round negotiations are in areas including trade in goods and investment
Source 4-Traderscom
FIRST MONGOLIA-CHINA JOINT BORDER COMMISSION MEETING IN BEIJING
The very first meeting of Mongolia-China joint commission of borders took place 11 and 12
December in Beijing China
This meeting was co-chaired by T Togsbilguun a director of the Department of Neighbour
Countries of Mongolialsquos Ministry of Foreign Affairs and by Xiao Jiangguo a representative of border
checkpoint and seaport affairs Both sides shared on ideas for implementation of the
intergovernmental contract on the border regime and reached some agreements on conducting a
joint examination in the border signs and on activating the collaboration in law enforcement around
frontier areas After this they discussed issues of developing border checkpoints at a same level
putting some border checkpoints into a permanent regime giving an international status to four
checkpoints
The gathered also made a protocol on their meeting and inked its results The next meeting will run
in 2014 in Ulaanbaatar
Source Montsame
BELARUS TO OPEN EMBASSY IN MONGOLIA IN 2014
Belarus will open its embassy in Mongolia in 2014 reads a resolution from the Belarus Council of
Ministers of the Republic of Belarus from 12 December 2013 Belaruslsquo Finance Ministry will finance
the costs of opening and maintaining Belarusian Embassy in Mongolia from the funds set aside in its
national budget for the opening and maintenance of diplomatic missions and consular missions of
the Republic of Belarus abroad
Source Belarusian Telegraph Agency
HOWELL NEW JERSEY USA BECOMES SISTER CITY OF SUKHBAATAR DISTRICT
The Howell Township and the Sukhbaatar district in Mongolia signed a memorandum of
understanding to create sister citieslsquo between Howell New Jersey USA and the Sukhbaatar District
on Tuesday
The program was aimed at opening up talks on how each can benefit from one another Mayor
William Gatto said Howell Township is a very diverse city and theyve taken the relationship with
the Kalmyk community here in Howell and expanded it to a country where they have had no
relationship in the past he said
The sister citieslsquo program will allow both Mongolia and Howell to exchange ideas and come up
with new and better ways to do things that benefits both cultures Outside of Mongolia Howell has
the largest population of Kalmyks in the world with many living in the Freewood Acres section of
the township Gatto said
Some of the goals of the agreement include promoting a common prosperity and development for
both parties an electronic pen-pal program and education opportunities for exchange students
Through a translator Baljinnyam Gan-erdene of the Citizens Representatives Council of Sukhbaatar
District said he came to Howell to see how democracy works in the United States
Im really glad and hope that this unforgettable and successful visit opens the door to our
friendship and prosperity between our residents Gan-erdene said
Gatto gave Gan-erdene a Howell flag and a throw blanket created by the Historical Society
depicting the history of the township Gan-erdene also gave Gatto several items including a bronze
piece of art
Source NJcom
MONGOLIAN CALLIGRAPHY ADDED TO UNESCO CULTURAL HERITAGE LIST
State Parties at the 8th Session of the Intergovernmental Committee for the Safeguarding of the
Intangible Cultural Heritage in Azerbaijan unanimously agreed to register Mongolian calligraphy as
an intangible cultural heritage in need of urgent safeguarding on 2 December
―Mongolian heritage calligraphy is now being recognized by the world and I am grateful on behalf
of my country for decision makers said Secretary-General of Mongolian National Commission for
UNESCO Gundegmaa Jargalsaikhan He noted that Mongolian calligraphy was the fifth cultural
heritage item of Mongolia to be listed and now stands among the Mongolian epic traditional folk
dance the traditional music Tsuur and a circular breathing technique
Mongolian calligraphy is a 1000-year-old writing system that vertically connects continuous strokes
together to create a word Letters of Mongolian script have been created and taught by nomads
from generation to generation During the 1937-1940 purges of the Soviet era thousands of tutors
and traditional scholars of the script were killed Those who remained alive were banned from
mentoring the younger generation Soon after that or around 1946 a new Cyrillic script was
adopted as the only eligible script therefore banning all the teachings of old Mongolian script and
Latin lettering Only in the 1970s was the old Mongolian script re-introduced to scholars allowing a
limited number of classes in universities
After the 1990 democratic changes along with the revival of Mongolian identity interest in
traditional calligraphy reawakened As a sign of such revival the very first non-communist political
organization the Democratic Union of Mongolia used folded calligraphy as its main logo
Source Info Mongolia
THOUGH IMPROVING MONGOLIA STILL REELING UNDER CORRUPTION
The third joint survey by the Asia Foundation and Sant Maral Foundation to gather data on the
perception of corruption in Mongolia revealed that efforts to curb corruption in what is considered
as one of the worldlsquos most corrupt countries could be having impact
The survey shows a significant drop in the percentage of respondents who believe corruption has
increased in the last three years from 389 percent in November 2012 to 183 percent currently In
contrast in 2006 a majority of respondents (63) indicated that corruption has increased ―a lot in
the last three years The survey also shows that corruption has declined in importance as a critical
social problem since 2006 Despite these positive signs overall respondents indicated that
corruption remains a serious issue in some specific key areas
Conducted in September of this year the survey featured face-to-face interviews in 1360
households across Mongolia including seven districts in Ulaanbaatar and 21 counties in six
provinces A majority (766) cited that widespread corruption in the law enforcement agencies is
one of the main reasons the government has been unable to tackle corruption effectively When
corruption is perceived to be this widespread the attention will obviously turn to the performance
of the apex anti-corruption body the Independent Authority Against Corruption (IAAC) The survey
shows that the IAAC is slowly but surely beginning to gain confidence among citizens The
percentage of those surveyed who think that its performance is ―good or ―very good increased
from 78 percent in March 2010 to 203 percent in March 2013 In September 2013 the result shows
a new high of 294 percent
Peoplelsquos perceptions on corruption are often shaped by personal experiences Although very few
respondents in the survey said that they had actually paid a bribe themselves (8 percent about a 3
percent drop from 2012 and an 18 percent drop since 2006) as noted before many are not willing
to report instances where they are asked for one Similarly 36 percent of respondents said they
would not pay a bribe but 26 percent indicated that they would pay if they had the financial
capability
Basanta Pokharel is The Asia Foundation‟s chief of party for the STAGE program in Mongolia He
can be reached at basantapokharelasiafoundationorg The views and opinions expressed here
are those of the individual author and not those of The Asia Foundation
Source Asia Foundation
MPP DEMANDS DISMISSAL OF MINISTERS
Mongolian Peoplelsquos Party Chairman N Enkhbold and party head S Byambatsogt submitted to the
Speaker a request for the dismissal Minister of Finance Chultem Ulaan and of Economic
Development Minister Nyamjav ―Fortuna Batbayar
Our faction believes that these ministers must be held responsible for the worsening of the
national economic situation We also intend to do the same with other ministers after hearing
opinions of people said Byambatsogt
Source Montsame
FORMER TAVAN TOLGOI JSC DIRECTOR ARRESTED
The Independent Agency Against Corruption arrested former Tavan Tolgoi JSC director Kh
Tumenbayar for undisclosed reasons
An unnamed official source suggested that the arrest may be related to abuses of power and
payments to political parties as well as the construction of a high-class hotel in Dalanzadgad Soum
Umnugobi Aimag Kh Tumenbayar is a member of the Democratic Party a member of Parliament
and is an associate of ―Ajnai Bat-Erdene the Minister of Defense who helped Tumenbayar attain
position as the director of Tavan Tolgoi for 6 years and rise to head of the Umnugobi Aimag Citizens
Council
Tumenbayar voluntarily resigned from his position at Tavan Tolgoi last month The IAAC has
reportedly not given details to the reasons for the investigation opened on Tumenbayar because of
possible connections to high-ranking officials
Source Unuudur
MONGOLIA TURKMENISTAN JOIN INTERNATIONAL RACING FEDERATION
The International Federation of Horseracing Authorities (IFHA) has welcomed racing organizations
from Mongolia and Turkmenistan as affiliate members
Recent ratification to IFHA statutes at its annual General Assembly in October created a new
affiliate membership category within the Federation Thus the Federation of Mongolia Horse Racing
Sport and Trainers and the Turkmen Atlary State Association by unanimous vote of the IFHA
Executive Council in Paris in October have become the IFHAlsquos first two affiliate members
The Federation of Mongolian Horse Racing Sport and Trainers (FMHRST) is a non-governmental
organization (NGO) which serves to the development of equestrian sport in Mongolia and works to
protect the rights of horsemen who specialize in this national sport The new affiliates were
announced by IFHA Chairman Louis Romanet this week and several key appointments to IFHA
executive office positions and committees have also been made
Source Horse Talk
MONGOL TV HEAD MEDIA CAN HELP FIX THE BIG PROBLEMS
Nomin Chinbat head of Mongol TV has grander intentions than just ridding the countrys television
business of rampant pirated content and unlicensed formats The young executive wants to help
clean up Mongolian politics and the nation by creating a free and open media
―The networks are used as propaganda channels for politicians They are used very effectively every
four years at election time says Chinbat whom the Source named one of the 25 Most Powerful
Women in Global TV at MIPCOM 2013
―There are laws against piracy but they arenlsquot implemented explains Chinbat who says that
politicians in the country of roughly three million wonlsquot challenge journalists because their
relationships with them are too cozy
Mongol TV has invested in original programming licenses all of its imported content and runs
investigative journalism features highlighting social problems such as alcoholism and corruption
The company is organizing a Mongol TV Day for February 2014 to which it has invited major
international studios to raise awareness of the issues and introduce the global industry to
Mongolia Britainlsquos ITV and Americalsquos CBS are already confirmed and negotiations are ongoing with
other attendees The situation has improved in recent years with some channels having become
what Chinbat calls ―hybrids which license some sports rights but then steal others and copy
formats
―These days some of these channels might license 25 episodes of a format and make 50 But this is
actually progress says Chinbat
Chinbat and her team were at the Asian Television Forum (ATF) in Singapore looking for new
formats that can be produced within the constraints of Mongolian television budgets However with
Mongolias young populationmdash65 percent of the country is under 35 years oldmdashmobile viewing is on
the rise and the network is already working second-screen utilization and new media applications
This demographic sweet spot should guarantee strong growth in the population economy and
nascent entertainment sector in Mongolia in the coming decades
Source Hollywood Reporter
ANNOUNCEMENTS
ldquoMM TODAYrdquo ON MNB-TV FRIDAY 1900 TO 1910
BCM is pleased to announce that Mongolian National Broadcasting continues its cooperation with
BCM on ―MM Today This English news program is aired every Friday for 10 minutes and is
scheduled from 1900 to 1910 tonight Tune in to watch this program that reports stories from
todaylsquos BCM NewsWire
BCM WEBSITES
MONGOLIAN WEBSITE bdquoPRESENTATIONS‟ AND bdquoNEWS‟ SECTIONS
The Presentationslsquo section on BCMlsquos Mongolian website can be reached via bcmmnitgeluud
As a key component of BCMlsquos Mongolian website articles from the Newslsquo section and the
government website Open-Governmentmn are regularly updated
S Oyun Minister of Environment and Green Development presentation at BCM monthly meeting on
May 27 added to Mongolian website bcmongoliaorgmnилтгэлүүд
- Байгаль орчин ногоон хөгжлийн сайд СОюун Байгаль орчин ногоон хөгжлийн шинэчлэлийн
бодлого үйл ажиллагаа МБЗ-ийн сарын уулзалт 5 сарын 27 2013
___________________________________________
ENGLISH WEBSITE PRESENTATIONS MONGOLIA REPORTS bdquoINTERVIEWSbdquo MONGOLIAN
BUSINESS NEWS‟ bdquoPHOTO GALLERY‟
The following 13 presentations are from the Mongolia Investment Summit- 2013 in Hong Kong
November 18-20
- Regulatory Update Navigating Mongolialsquos legal framework for foreign direct investment
Javkhlanbaatar Sereeter Director General Foreign Investment Regulations and Registration
Department MINISTRY OF ECONOMIC DEVELOPMENT OF MONGOLIA
- Investment keynote Investing into Mongolia in 2013 ndash Where do the opportunities lie James
Passin Co-Founder and Manager FIREBIRD MONGOLIA FUND
- Development keynote Key challenges and opportunities for continued growth in Mongolia
Randolph Koppa President TRADE AND DEVELOPMENT BANK OF MONGOLIA
- Outlining government policies and long-term plans for Mongolialsquos mining sector Amarjargal
Khurelbat Head of International Cooperation Division MINISTRY OF MINING OF MONGOLIA
- From copper to met coal Demand and price outlook and expected impact on Mongolialsquos economy
Ghee Peh Managing Director Metals and Mining Research UBS SECURITIES ASIA
- How Mongolian banks and financial institutions are dealing with the challenges and opportunities
of a fast growing economy Norihiko Kato Chief Executive Officer KHAN BANK
- Update on the Mongolian stock market ndash Impact of the new Securities Law Altai Khangai Chief
Executive Officer MONGOLIAN STOCK EXCHANGE
- From investment banking to trade finance to micro credits to insurance Amartuvshin Hanibal
Managing Director TENGER FINANCIAL GROUP LLC
- Spotlight presentations Showcasing Mongolian investment opportunities Peter Morrow Board
Director ASIA PACIFIC INVESTMENT PARTNERS
- Spotlight presentation Showcasing Mongolian investment opportunities Munkhbat Davaatseren
CEO of Golomt Securities GOLOMT BANK
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources
Batmunkh Batkhuu Chairman SHARYN GOL JSC
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources
Jimmie Wilde Chief Operating Officer BERKH UUL JSC
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources Mona
Forster Executive VP ENTREacuteE GOLD INC
The following two presentations are from the ―ANTI-CORRUPTION LEGISLATIONPOLICY
INTERNATIONAL BEST PRACTICE ON TRANSPARENCY training seminar for businesses in
Ulaanbaatar November 18 2013
-―International business standard on transparency by Jelena Pesic Director PwC
-―Finlandlsquos best practice on transparency and anti corruption by Dr Pekka Hallberg (as it is
worldlsquos number one) Emeritus President of the Supreme Administrative Court of Finland
The following 15 presentations are from the Mongolia Mining Summit Perth Australia October 29-
31 2013
bull Mongolialsquos Minerals Future and Development by Otgochuluu Ch Director General Department of
strategic policy and planning at Ministry of Mining Mongolia at the Mongolian Mining Summit 2013
Perth Australia Oct 29-31 2013
bull Mongolian Economy Investment OpportunitiesChallenges Jim Dwyer Executive Director
Business Council of Mongolia at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31
2013
bull Oyu Tolgoi Lessons from the Gobi Houston Spencer Vice President Communications and Media
Relations Oyu Tolgoi at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Market dynamics for Mongolian coking coal in the Chinese market Graeme Hancock President
and Chief Representative at Anglo American Mongolia at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Speech by Mr Ariunbold Byamba Deputy Director Erdenes MGL LLC at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull Launching Mining Projects in MongoliandashA Major Contractorlsquos Perspective Eric Erdenebat
Tseveendorj Country Manager Orica Limited at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Investing in a dynamic legislative environment Elisabeth Ellis Managing Partner Ulaanbaatar
Minter Ellison at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Sandvik In Pit Crushing amp Conveying (IPCC) Doug Turnbull Principal Mining Engineer Sandvik
Mining Systems at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Ovoot Coking Coal Project David Paull Managing Director Aspire Mining at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull The business of being a third neighbor David Landers General Manager East Asian Growth
Markets at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Nuurst Thermal Coal Project Daniel Rohr Chief Financial Officer Modun Resources Ltd at the
Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Culture matters in building sustainable long-term business relationships Hana Tserenkhand
Byambadash Business Development Consultant AusMon Consulting and Dr Christine Hogan Adjunct
Professor Curtin University Consultant amp Author at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Maximizing Business Benefits from Your IT Investment Brad Skeggs Executive Director COSOL at
the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Presentation by Battsengel Gotov CEO Mongolian Mining Corporation at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull Mongolian Mining Sector Present and Future Developments NAlgaa Executive Director
Mongolian National Mining Association at the Mongolian Mining Summit 2013 Perth Australia Oct
29-31 2013
The ―Mongolia Reports section includes the following
- ―Ministry of Finance of Mongolia 2013 Government Debt Auctions by Bank of Mongolia
- ―Doing Business in Mongolia 2013 Country Commercial Guide for US Companies by US
Embassy
- ―Real Estate Report 2013 by Mongolian Properties
- ―Selected Macroeconomic Indicators November 20 2013 by International Monetary Fund
- ―2013 Second Annual Mongolian CEO Survey from PricewaterhouseCoopers Audit LLC
- ―Selected Macroeconomic Indicators data through October 16 2013 by International Monetary
Fund
- ―IMF Completes 2013 Article IV Mission to Mongolia by International Monetary Fund
The following are added to Interview Section from the Oxford Business Group Mongolia Reports
2013 book
bull B Byambasaikhan Chairman Business Council of Mongolia ―Talk is cheap
bull President Ts Elbegdorj ―Diversifying for growth
bull Jim Dwyer Executive Director Business Council of Mongolia ―Non-mining sectors budding
bull Peter Morrow Chairman American University of Mongolia ―Filling in the blanks
bull N Zoljargal Governor Bank of Mongolia ―Sustainable vision
bull Gansukh Minister of Roads and Transportation ―Accessing new markets
bull J Od President MCS Group ―Building interest
bull B Chuluunbaatar President and CEO of Monnis Group ―Climbing the ranks
bull Cameron McRae President and CEO Oyu Tolgoi ―Sitting on a copper mine
BCMs English website includes the ―Mongolia Business News section where the Open Letter to
Parliament and Government is available for download
BCM continuously posts news stories and analysis of relevance to Mongolia at Mongolian Business
News before they are all put together each week for Fridays weekly NewsWire
The ―Photo Gallery contains photos from the 6th Anniversary BCM Renewal dinner on November
11 2013
BCM Football Cup 2013 pictures are posted to the website - httpbcmongoliaorgenphotos350-
enalbumalbumid=200
The BCM NewsWire will continue to be issued each Friday incorporating items already on the home
page for a consolidated account of the weeklsquos events
SOCIAL NETWORK WITH BCM
BCM LAUNCHES NEW LINKED-IN COMPANY PAGE
The Business Council of Mongolia has launched a new company page on the social networking
website LinkedIn to network its members and followers including small-medium enterprises (SMEs)
The new page will allow BCM to alert followers to the latest news and information critical to their
businesses Memberslsquo businesses will be promoted Additionally BCM plans to deliver monthly
infographics on the latest data as well as videos and other media content as they come The bulk of
the content on the new page will be in Mongolian language to better cater to BCMs Mongolian-
speaking audience and members The following link can direct you to the New BCMs Linked-in page
httpwwwlinkedincomcompanybusiness-council-of-mongoliatrk=company_logo
The Business Council of Mongolia (BCM) has expanded its reach to your favorite social networks
Keep up to date on the latest business deals in Mongolia and how the climate for investment is
improving each day with BCM
Add BCM on Facebook at httpswwwfacebookcomTheBusinessCouncilOfMongolia to read the
latest announcements and comment on events carried in the NewsWire with the community
Hear breaking news and announcements as they happen when you follow BCM on Twitter at
httpstwittercombcmongolia
We have now 2482 fans on our Facebook fans page 1527 connections on LinkedIn network and
835 followers on Twitter
Of course for news information interviews event photos and announcements regarding our
organization visit the official BCM website at httpbcmongoliaorgen
ECONOMIC INDICATORS
INFLATION
Year 2006 60 [source National Statistical Office of Mongolia (NSOM)]
Year 2007 151 [source NSOM]
Year 2008 221 [source NSOM]
Year 2009 42 [source NSOM]
Year 2010 130 [source NSOM]
Year 2011 102 [source NSOM]
November 30 2013 120 [source NSOM]
Year-over-year (y-o-y) nationwide
Note 111 y-o-y Ulaanbaatar city November 30 2013
CENTRAL BANK POLICY LOAN RATE
December 31 2008 975 [source IMF]
March 11 2009 1400 [source IMF]
May 12 2009 1275 [source IMF]
June 12 2009 1150 [source IMF]
September 30 2009 1000 [source IMF]
May 12 2010 1100 [source IMF]
April 28 2011 1150 [source IMF]
August 25 2011 1175 [source IMF]
October 25 2011 1225 [source IMF]
March 19 2012 1275 [source Mongol Bank]
April 18 2012 1325 [source Mongol Bank]
January 25 2013 1250 [source Mongol Bank]
April 8 2013 1150 [source Mongol Bank]
June 25 2013 1050 [source Mongol Bank]
CURRENCY RATES ndash DECEMBER 19 2013
Currency Name Currency Rate
US dollar USD 164138
Euro EUR 224680
Japanese yen JPY 1579
British pound GBP 268874
Hong Kong dollar HKD 21170
Chinese Yuan CNY 27031
Russian Ruble RUB 4981
South Korean won KRW 155
Disclaimer Except for reporting on BCMlsquos activities all information in the BCM NewsWire is
selected from various news sources Opinions are those of the respective news sources
CABINET TO CONCLUDE CONCESSION ON ALTANBULAG-ZAMYN UUD HIGHWAY
The Cabinet of Ministers ordered ministers to conclude a concession agreement for the Altanbulag-
Ulaanbaatar-Zamyn-Uud highway
The government is planning to establish the concession contract with the Chinggis Land
Development Group which according to the agreement shall have exclusive rights to construction
ownership and transfer of property using its own financing The concessionaire shall complete the
construction within three years after that shall operate the facility for another 30 years before
transferring the ownership to the Government
If Chinggis Land accepts these terms it would be responsible for developing a feasibility study and
blueprint of the project to be approved by the relevant ministries before concluding a financing
agreement The concession agreement will come into effect after the Chinggis Land Development
Group obtains a financing agreement for USD 1 billion from a commercial bank of Mongolia
The government will be responsible for freeing up the land where the highway is planned while the
Chinggis Land would cover the costs for doing so
Source Montsame
MNT 116 BILLION WILL BE SPENT FOR BUILDING EMERGENCY ALARMS IN UB
The National Emergency Management Agency has installed an emergency alarm system in 60
locations of Ulaanbaatar The alarm will alert citizens to natural disasters such as earthquakes
The alarms will be controlled from a center by microwave radios and satellite communication
devices
Source Udriin Sonin
EIU CLARIFIES EXTENT OF OFFICIAL ESTIMATES OF OIL SHALE RESERVES
The latest research from Mongolias mining ministry gives a clearer picture of oil shales
development potential in the coming years Although Mongolia has long been known to have
substantial oil shale deposits previous estimates were extrapolated from rudimentary surveys
conducted in the 1990s and thus left the actual reserves open to speculation
Plans to develop the industry took shape only in April 2013 when an American company Genie
Energy signed a five-year deal with the Petroleum Authority of Mongolia to explore oil shale
reserves in central Mongolia Genie also plans to build a USD 4 billion processing factory in Tuv
Aimag According to government projections the processing plant will generate USD 850 million of
tax revenue annually Aside from the economic benefits of the project domestic fuel sources could
help Mongolia to improve its energy security by loosening the countrys dependence on its powerful
neighbors At present 90 percent of Mongolias oil and related products come from Russia with most
of the remaining amount being imported from China
Yet the benefits of large-scale oil shale extraction are not as clear as they might seem at first
glance Most importantly Mongolias oil shale resources should not be confused with the shale oil
phenomenon that is currently sweeping the United States Oil shale (also called kerogen) is more
expensive to extract than shale oil and carries greater environmental costs In particular oil shale
requires a large amount of water to process which could be a risky proposition in Mongolia where
hydrological resources are already under strain Although other countriesmdashEstonia in particularmdashuse
oil shale as a substitute for coal extracting liquid fuel from the shale is a complex and relatively
untested process
Genie Energys progress on the project seems more substantial than that of comparable coal
liquefaction projects that have faltered in the region However environmental technical and
political limitations suggest that Mongolias overall dependence on foreign fuel will not change
significantly in the foreseeable future
―We remain doubtful that oil shale will play a significant role in Mongolia in the next two years so
our economic growth and trade forecasts will remain unchanged said the Source
Source Economist Intelligence Unit
MONGOLIA AND THE THREAT OF THE RESOURCE CURSE
Mongolia is at a crossroads while investors complain the government is dragging its feet on allowing
miners to start digging it is crucial that it get things right at the early stages of the resources
boom
Mongolias challenge will soon be the worlds says Richard Dobbs and his team at McKinsey in a
report predicting a USD 17 trillion investment bonanza by 2030 to keep up with demand for oil gas
and other materials In 1995 about 58 countries depended on resources for the bulk of their output
and wealth In 2011 that number had risen to 81 By 2030 roughly half of the worlds economies
will essentially become giant filling stations for developing superpowers from China to South Africa
That means that instead of the world moving toward greater transparency democracy and freer
markets we could see rising corruption levels and even greater income inequality
Economies with natural-resource endowments have a huge opportunity to transform their
prospects but history suggests that they could all too easily squander the windfall says Dobbs
director of the McKinsey Global Institute in London
The world would be wise to take steps today to break this cycle McKinsey recommends several
While not terribly original they include strengthening public institutions and good governance
building decent infrastructure boosting national competitiveness promoting sound fiscal policy
making and spending the windfall wisely while engaging in forward-looking economic and social
planning The trouble is that political will and integrity is often the first casualty once the minerals
start flowing out and the spoils come pouring in
Mongolia is at that very crossroads today Investors complain the government is dragging its feet on
allowing miners to start digging But its more important to get things right at the early stages of
the resources boom That means acting now to create the institutions and regulatory frameworks
needed to ensure revenue transparencymdashknowing exactly how much money is being dug out the
ground and where its going Why not set up a sovereign-wealth fund to save for Mongolias future
When the stakes are that high a little patience can go a long way
Source Bloomberg
MONGOLIAS NOMADS WARM TO SOLAR POWER
In Mongolia often known as the land of the blue skies the sun shines for 250 days on average each
year It beats down on the sparse plains and on the Gobi desert that spans the countrys southern
border with China
It shines even during the frigid winter days on the hundreds of thousands of nomads who still roam
the steppes herding animals and living in dome-like tents calling gers About 800000 of Mongolias
28 million inhabitants still live the traditional nomadic lifestyle that has remained largely
unchanged for generations Apart from the addition of motorbikes the occasional petrol generator
and a passing trade from intrepid tourists wanting to stay in a ger for the night life is almost the
same as that of many nomads grandparents and great-grandparents Almost but not exactly
Dotted across the steppes glints of light can be seen as the sun bounces off the solar panels that
have been installed on the sides of gers made of felt and yaks wool At the start of this millennium
Mongolias herders and nomads had little or no access to modern electric power and its potential
benefits But as of 2013 thanks to a concerted push by the Mongolian government almost 70
percent of nomadic people have access to electricity Bor a herder who mainly travels around
western Mongolias Arkhangai province is one of the people whose family benefits from portable
solar home systems (SHS)
We use it for generating the power for lighting in the ger charging phones we can also generate a
fridge to keep food longer and we can run a television That is very useful for us because we can
get the most recent weather forecast which is important for our work and keeping our animals
safe Before we had power it was very difficult Now it is almost like living in the city
The ability to charge mobile phones is also important for the herders who often have children
staying at boarding schools Access to electricity also allows families to contact emergency health-
care and doctors for advice without having to make the often arduous journey to the nearest village
or town
The solar systems were distributed and installed with the help of the World Bank after the
Mongolian governments National 100000 Solar Ger Electrification Program ran into difficulties A
World Bank report Capturing the Sun in the Land of the Blue Sky describes the difficulties faced by
the Mongolian government on its ambitious project
By 2005 five years into the plan 30000 families had been kitted out with an SHS but then the
program began to stagnateThe government of Mongolia recognized that considerably more effort
was necessary not only to keep the program on track but to scale-up implementation in order to
achieve the National 100000 Solar Ger Electrification Program target the report said In 2006 the
World Bank agreed to cover half of the initial outlay costs for each family as well as after-sales
maintenance with 50 centers set up across the country including at least one in each of its 21
provinces so that the herders would not have to travel to Ulaanbaatar every time the solar panels
needed maintenance
The SHS project also offers environmental benefits to a country where the ratio of carbon dioxide
emissions to economic output is ten times higher than the world average because of the increase in
mining over the past decade as the true extent of Mongolias mineral wealth became apparent The
solar systems are slowly replacing the diesel generators used by some nomads as a means of
generating power although they are still using stoves for heating burning wood coal and dung
throughout the year
Source Al Jazeera
IRON-ORE AND COAL PRICES GO SEPARATE WAYS
Prices of the key ingredients in steel productionmdashiron ore and coking coalmdashare moving along sharply
different paths as mining companies resist cutting coal output despite the market being awash with
the raw material
While iron-ore prices have risen 22 percent since May coking coal is still searching for a rebound
Coking-coal prices are off more than 4 percent over the same period China is on course for another
year of record steel production with supply directed to the construction of high-rise apartment
buildings the manufacture of luxury cars and other uses
There is simply too much coal on the market the International Energy Agency said in a report this
week
Shipments of steelmaking coal from Australiamdashthe worlds biggest exporter of the commoditymdashare
forecast by the government to rise to 178 million tons in 2015 from 145 million tons last year Most
goes to China which accounts for 60 percent of global demand In contrast global iron-ore
exporters are struggling to increase output in areas other than Australias remote Pilbara region
supporting prices of that commodity The spot price of iron ore climbed to nearly USD 140 a ton
earlier this month a four-month high Prices have since eased a bit to USD 13430 a ton but
remain well above the consensus forecasts of analysts at the start of this year
Coal miners could scale back production but that isnt always easy to do In Australia many miners
are locked into so-called take or pay contracts with rail and port operators Many analysts dont
expect coking-coal prices to rebound for at least another 12 months RBC Capital Markets expects
coking-coal prices to average USD 154 a ton in 2014 down from USD 159 a ton forecast for this
year Instead they see more chance that iron-ore prices will come down more sharply RBC predicts
an 11 percent fall in iron-ore prices next year as new supply from Anglo Americans Minas Rio
project and mines owned by Fortescue Metals Group Ltd is added to the market UBS is even more
bearish predicting iron ore will fall below USD100 in the second half of 2014
Source Wall Street Journal
ARE COMMODITIES TRADERS bdquoTOO BIG TO FAIL‟
When the banking industrylsquos top lobby group commissioned a report by on commodity trading
houses the idea was to show trading houses like Glencore Xstrata Vitol or Cargill were ―too big to
fail and therefore needed to be regulated in a similar manner to the banks
But instead of highlighting the inherent issues surrounding the industry the report found trading
companies posed less systemic risk than the big banks As a result the Global Financial Markets
Association which commissioned the report decided not to finalize or publish it (The GFMA claims
that it often commissions reports which are shared with regulators and other interested parties but
never published) But the debate hasnlsquot ended
A separate report published in July by the Centre for European Policy Studies a think-tank argued
the growth of commodity trading houses which underpin the global trade in raw materials could
―have systemic implications Commodities trader Trafigura has become the latest to wade into the
debate In its recent prospectus for a EUR 500 million bond issue the worldlsquos second largest metals
trader and third biggest oil trader addresses the GFMA report as well as the issue of systemic risk
Making some tart observations the trading house says the GFMA paper was aimed squarely at the
Financial Stability Board a group of global regulators
―[The report] was widely seen as a tactic by some banks active in the commodity trading space as a
way of creating more equality between market participants by seeking to usher in further
restrictions on pure commodity trading companies the prospectus says
Commodity traders are facing the need to be more open about their operations and lift the veil of
secrecy Indeed the author of the GFMA reportmdashCraig Pirrong a widely respected academicmdashis
working on a white paper on commodities traders Commissioned by Trafigura it will look at what
commodities trading houses activities and the recent trend to accumulate more assets risk
management as well as looking at different types of commodity companies
Source Financial Times
SMOG DARKENS SHANGHAIS PROSPECTS FOR BECOMING A GLOBAL FINANCIAL CENTER
In the debate over which matters more in China money or quality of life the quality-of-life side
may have found the ultimate argument If you cant breathe nothing else really matters And itlsquos a
debate Mongolia has to have as it makes its own steps towards industrial and economic growth
Chinas pollution problem is spreading and growing worse a fact on stark display last week in
Shanghai the countrys financial center A stretch of filthy-air days in that coastal city so
thoroughly shocked residentsmdashwho had largely escaped the smog that has long plagued the likes of
Beijing and Harbinmdashthat it inspired fresh talk about getting away from China Lawrence Shu a
Shanghai-based partner at Hylands Law Firm said he and his friends are thinking more seriously
about moving abroad
The smog had a big impact because it feels really bad if you cant breathe freely he said
The environment used to take a back seat among the Chinese But as they get richer they are
traveling abroad more making the pollution back home more obvious The Internet also
contributes Blue-sky pictures posted on social networks by Chinese travelers abroad constantly
remind folks of what is lacking at home and Chinese now use various apps to track air-quality data
If Shanghais smog discourages smart financial professionals from wanting to live there that will
hinder Chinas effort to create a global financial center If businesses such as financial companies
and luxury-goods makers perceive that Chinas elites are spending more time outside their home
country they will be less willing to invest in China
Most rich Chinese havent packed their bags and left yet but they are keeping their options open
Relocation is a big decision said Anne Wang who works in the financial industry in Shanghai But
just in case she recently received a US visa that would allow her to live there
Source Wall Street Journal
POLITICS
MINERALS POLICY ENTERS FINAL DISCUSSIONS
The government published a final draft of Mongolialsquos State Policy on the Minerals Sector for 2013
through 2025
The document was first presented to Parliament in July and is now entering final discussions during
the autumn plenary session of Parliament following a 42 percent drop of foreign investment and 23
percent fall in the currency year-on-year
―We have reviewed the proposed State Policy on the Mineral Sector which we feel will be a
positive step forward if passed said the Source ―The passing of this policy will result in more
transparency and an increasing participation from foreign investors That said it will take time for
these feats to be accomplished Investors will be weary of Government promises as they seek
longevity to prove Government intentions
The proposed policy is divided into four main sections rationale principles main policy and
implementation-results The major points stressed in the policy include transparency and
responsible mining The law sends the message that growth is going to be driven by private sector
participation and the intent to provide a stable investment environment technological innovation
and value-added activities
Key priorities of the law since it was first unveiled include stability of taxation and the legal
environment an end to any discrimination between foreign and national investors and the
preservation of strategic resources and deposits
This most recent version saw the inclusion of a new section supporting development of local areas
and the interests of local citizens Other key elements include explorationmdashwhich would see
greater government regulation for strategic mineral deposits while cutting down bureaucracy and
conducting scientific researchmdashproduction support and local support The new document also
highlights greater support for non-governmental organizations for the environment allowing them
to claim damages from mining operations the establishment of funds to support economic
diversification environmental protections and land rehabilitation
The new draft has removed the risk assessment section and replaced it with a section on
implementation This includes the improvement of the legal environment and producing of relevant
regulations programs and projects for 2013 to 2015 followed by the implementation of programs
and projects from 2014 to 2025 and finally the provision of conclusions on midterm policy
implementation and further planning for up to 2020 and 2025
―We believe that this policy will take us one step closer to attracting investors and supporting
private sector development in Mongolia said the Source ―Despite current investor hesitation this
state policy in addition to the new amended Minerals Law set to pass next year will further
encourage investors to enter the market and will build support for the junior mining community
Source Mongolian Investment Banking Group
PARLIAMENT UNANIMOUSLY BACKS ldquoSMART GOVERNMENTrdquo INITIATIVE
Parliament has unanimously backed President Tsakhia Elbegdorjs ―From Big Government to Smart
Government initiative for government reform concepts having signed a joint statement of support
on 13 December
The joint statement gives full support to the presidents initiative and commits to cooperation for
its undertaking This includes support for enhancing government systems and policies in line with
democracy and a market economy improving the capacities of public services and curtailing
government intervention into private business affairs Also included are protections to private
business including establishing government structures for rule of law support to domestic
industries and honoring contracts The fight against corruption is another main perogative
On 16 November 16 the Office of the President of Mongolia organized a national consultative
meeting on this topic at the Government Palace Elbegdorj next met with members of the
Parliament on 9 December to organize an open dialogue with representatives of Parliament for an
appeal for them to sign the joint statement Reaffirming the commitment of the Mongolian
lawmakers to a breakthrough reform of the Government the leaders of party floors and factions in
the Parliament and independent members of the Parliament signed the document for the reform on
December 13 2013
Source Montsame
GOVERNMENT CALLS TO END PRACTICE OF APPOINTING MPS AS MINISTERS
The coalition government has thrown their support behind President Tsakhia Elbegdorjs proposal to
prohibit Parliament members from serving as cabinet ministers
Democratic Party members discussed a draft resolution and proposed amendments submitted by the
president for the new restriction at a party meeting on Monday The draft amendments were
unanimously backed by the faction The Justice Coalition which includes the Monglian Peoples
Revolutionary Party and Mongolian Democratic Party came to the same conclusion following its own
meeting said coalition head N Battsereg on Monday
Source Montsame
COMMITTEE LEADERS TO BE ELECTED THIS MONTH
The coalition government will soon be electing officials to lead the various committees in
government
Parliament has 8 standing committees to elect leaders to this month with each committee to be
led by a representative of the coalition government Current committee heads are Ts Tsolmon at
the Security and Foreign Policy Committee G Bayarsaikhan at the Environment Food and
Agriculture Committee Z Bayanselenge at the Social Policy Education Culture and Science
Committee R Burmaa at the Petition and Requests Committee A Bakei at the State Structural
Committee Ts Davaasuren at the Budget Committee Sh Tuvdendorj at the Legislation
Committee and B Garamgaibaatar at the Economic Committee
Source Zuunii Medee
FOREIGN CURRENCY PAYMENTS BANNED FOR MININGEXPLORATION LICENSING FEES
The Ministry of Finance has banned the use of foreign currencies to pay for mining and exploration
licensing fees to the Mineral Resources Authority beginning 1 January 2014
The Ministry of Finance has prompted these entities and companies holding licenses to comply with
Mongolian currency law that states that all businesses and agencies must do business in Mongolian
tugrug According to the 2009 law transactions must not be carried out in foreign denominated or
foreign currency based rates
Source Newsmn
MINING MINISTRY TO COOPERATE WITH ASSOCIATION OF FLUORSPAR EXPLORERS
The Ministry of Mining Wednesday established a memorandum of mutual understanding with the
Association of Fluorspar Explorers (AFE) to cooperate in augmenting the countrylsquos export
In addition to expanding export goals include developing transparent and responsible mining
improving qualities and standards of fluorspar metallurgy and flotation concentrate and in
increasing the production output of the minerallsquos ore enrichment The hope is the memorandum
will create a launching point for a national program for fluorspar its exploitation increase the
volume of production by intensifying research and increase competitiveness in international
markets It will also be necessary to introduce the latest technology to the country along with
running joint trainings with foreign NGOs the Ministry said
Source Montsame
DP REJECTS AMARJARGAL‟S RESIGNATION
Parliament voted against MP R Amarjargallsquos resignation request on 12 December
During Tuesdaylsquos meeting the majority of the Standing Committee on State Structure voted against
Amarjargal`s resignation The head of the Democratic Party (DP) caucus D Erdenebat took a
strong stance against letting Amarjargal leave
Amarjargal said he wanted to resign to take responsibility on behalf of his party members for the
current political situation and economic restraints in Mongolia DP members agree with his
conclusion but encourage him to make the effort and participate for social change and
development Members of the opposition Mongolian Peoplelsquos Party members said that Amarjargal
could see the problems and nature of the majority of Parliament and praised his plan to resign
Source Newsmn
MPP HEAD TO STEP DOWN
Mongolian People Party (MPP) Head N Enkhbold has requested his resignation as party leader
MPP Deputy Head D Oyunkhorol said 9 December that Enkhbold submitted his request to step down
during a party meeting Oyunkhorol said Enkhboldlsquos resignation was due to personal reasons The
new party head will be appointed by the MPPs governing board
Source Udriin Sonin
FIFTH ROUND OF NEGOTIATIONS FOR THE JAPAN-MONGOLIA ECONOMIC PARTNERSHIP
AGREEMENT
The fifth round of the negotiations for the Japan-Mongolia Economic Partnership Agreement (EPA)
will be held from 16 to 19 December in Ulaanbaatar
The Japanese delegation will be led by Jun Yokota ambassador in charge of economic diplomacy
and the Mongolian delegation will be led by Ochirbat Chuluunbat vice minister for economic
development Experts from relevant ministries and agencies of both sides will participate in the
meetings
In this round negotiations are in areas including trade in goods and investment
Source 4-Traderscom
FIRST MONGOLIA-CHINA JOINT BORDER COMMISSION MEETING IN BEIJING
The very first meeting of Mongolia-China joint commission of borders took place 11 and 12
December in Beijing China
This meeting was co-chaired by T Togsbilguun a director of the Department of Neighbour
Countries of Mongolialsquos Ministry of Foreign Affairs and by Xiao Jiangguo a representative of border
checkpoint and seaport affairs Both sides shared on ideas for implementation of the
intergovernmental contract on the border regime and reached some agreements on conducting a
joint examination in the border signs and on activating the collaboration in law enforcement around
frontier areas After this they discussed issues of developing border checkpoints at a same level
putting some border checkpoints into a permanent regime giving an international status to four
checkpoints
The gathered also made a protocol on their meeting and inked its results The next meeting will run
in 2014 in Ulaanbaatar
Source Montsame
BELARUS TO OPEN EMBASSY IN MONGOLIA IN 2014
Belarus will open its embassy in Mongolia in 2014 reads a resolution from the Belarus Council of
Ministers of the Republic of Belarus from 12 December 2013 Belaruslsquo Finance Ministry will finance
the costs of opening and maintaining Belarusian Embassy in Mongolia from the funds set aside in its
national budget for the opening and maintenance of diplomatic missions and consular missions of
the Republic of Belarus abroad
Source Belarusian Telegraph Agency
HOWELL NEW JERSEY USA BECOMES SISTER CITY OF SUKHBAATAR DISTRICT
The Howell Township and the Sukhbaatar district in Mongolia signed a memorandum of
understanding to create sister citieslsquo between Howell New Jersey USA and the Sukhbaatar District
on Tuesday
The program was aimed at opening up talks on how each can benefit from one another Mayor
William Gatto said Howell Township is a very diverse city and theyve taken the relationship with
the Kalmyk community here in Howell and expanded it to a country where they have had no
relationship in the past he said
The sister citieslsquo program will allow both Mongolia and Howell to exchange ideas and come up
with new and better ways to do things that benefits both cultures Outside of Mongolia Howell has
the largest population of Kalmyks in the world with many living in the Freewood Acres section of
the township Gatto said
Some of the goals of the agreement include promoting a common prosperity and development for
both parties an electronic pen-pal program and education opportunities for exchange students
Through a translator Baljinnyam Gan-erdene of the Citizens Representatives Council of Sukhbaatar
District said he came to Howell to see how democracy works in the United States
Im really glad and hope that this unforgettable and successful visit opens the door to our
friendship and prosperity between our residents Gan-erdene said
Gatto gave Gan-erdene a Howell flag and a throw blanket created by the Historical Society
depicting the history of the township Gan-erdene also gave Gatto several items including a bronze
piece of art
Source NJcom
MONGOLIAN CALLIGRAPHY ADDED TO UNESCO CULTURAL HERITAGE LIST
State Parties at the 8th Session of the Intergovernmental Committee for the Safeguarding of the
Intangible Cultural Heritage in Azerbaijan unanimously agreed to register Mongolian calligraphy as
an intangible cultural heritage in need of urgent safeguarding on 2 December
―Mongolian heritage calligraphy is now being recognized by the world and I am grateful on behalf
of my country for decision makers said Secretary-General of Mongolian National Commission for
UNESCO Gundegmaa Jargalsaikhan He noted that Mongolian calligraphy was the fifth cultural
heritage item of Mongolia to be listed and now stands among the Mongolian epic traditional folk
dance the traditional music Tsuur and a circular breathing technique
Mongolian calligraphy is a 1000-year-old writing system that vertically connects continuous strokes
together to create a word Letters of Mongolian script have been created and taught by nomads
from generation to generation During the 1937-1940 purges of the Soviet era thousands of tutors
and traditional scholars of the script were killed Those who remained alive were banned from
mentoring the younger generation Soon after that or around 1946 a new Cyrillic script was
adopted as the only eligible script therefore banning all the teachings of old Mongolian script and
Latin lettering Only in the 1970s was the old Mongolian script re-introduced to scholars allowing a
limited number of classes in universities
After the 1990 democratic changes along with the revival of Mongolian identity interest in
traditional calligraphy reawakened As a sign of such revival the very first non-communist political
organization the Democratic Union of Mongolia used folded calligraphy as its main logo
Source Info Mongolia
THOUGH IMPROVING MONGOLIA STILL REELING UNDER CORRUPTION
The third joint survey by the Asia Foundation and Sant Maral Foundation to gather data on the
perception of corruption in Mongolia revealed that efforts to curb corruption in what is considered
as one of the worldlsquos most corrupt countries could be having impact
The survey shows a significant drop in the percentage of respondents who believe corruption has
increased in the last three years from 389 percent in November 2012 to 183 percent currently In
contrast in 2006 a majority of respondents (63) indicated that corruption has increased ―a lot in
the last three years The survey also shows that corruption has declined in importance as a critical
social problem since 2006 Despite these positive signs overall respondents indicated that
corruption remains a serious issue in some specific key areas
Conducted in September of this year the survey featured face-to-face interviews in 1360
households across Mongolia including seven districts in Ulaanbaatar and 21 counties in six
provinces A majority (766) cited that widespread corruption in the law enforcement agencies is
one of the main reasons the government has been unable to tackle corruption effectively When
corruption is perceived to be this widespread the attention will obviously turn to the performance
of the apex anti-corruption body the Independent Authority Against Corruption (IAAC) The survey
shows that the IAAC is slowly but surely beginning to gain confidence among citizens The
percentage of those surveyed who think that its performance is ―good or ―very good increased
from 78 percent in March 2010 to 203 percent in March 2013 In September 2013 the result shows
a new high of 294 percent
Peoplelsquos perceptions on corruption are often shaped by personal experiences Although very few
respondents in the survey said that they had actually paid a bribe themselves (8 percent about a 3
percent drop from 2012 and an 18 percent drop since 2006) as noted before many are not willing
to report instances where they are asked for one Similarly 36 percent of respondents said they
would not pay a bribe but 26 percent indicated that they would pay if they had the financial
capability
Basanta Pokharel is The Asia Foundation‟s chief of party for the STAGE program in Mongolia He
can be reached at basantapokharelasiafoundationorg The views and opinions expressed here
are those of the individual author and not those of The Asia Foundation
Source Asia Foundation
MPP DEMANDS DISMISSAL OF MINISTERS
Mongolian Peoplelsquos Party Chairman N Enkhbold and party head S Byambatsogt submitted to the
Speaker a request for the dismissal Minister of Finance Chultem Ulaan and of Economic
Development Minister Nyamjav ―Fortuna Batbayar
Our faction believes that these ministers must be held responsible for the worsening of the
national economic situation We also intend to do the same with other ministers after hearing
opinions of people said Byambatsogt
Source Montsame
FORMER TAVAN TOLGOI JSC DIRECTOR ARRESTED
The Independent Agency Against Corruption arrested former Tavan Tolgoi JSC director Kh
Tumenbayar for undisclosed reasons
An unnamed official source suggested that the arrest may be related to abuses of power and
payments to political parties as well as the construction of a high-class hotel in Dalanzadgad Soum
Umnugobi Aimag Kh Tumenbayar is a member of the Democratic Party a member of Parliament
and is an associate of ―Ajnai Bat-Erdene the Minister of Defense who helped Tumenbayar attain
position as the director of Tavan Tolgoi for 6 years and rise to head of the Umnugobi Aimag Citizens
Council
Tumenbayar voluntarily resigned from his position at Tavan Tolgoi last month The IAAC has
reportedly not given details to the reasons for the investigation opened on Tumenbayar because of
possible connections to high-ranking officials
Source Unuudur
MONGOLIA TURKMENISTAN JOIN INTERNATIONAL RACING FEDERATION
The International Federation of Horseracing Authorities (IFHA) has welcomed racing organizations
from Mongolia and Turkmenistan as affiliate members
Recent ratification to IFHA statutes at its annual General Assembly in October created a new
affiliate membership category within the Federation Thus the Federation of Mongolia Horse Racing
Sport and Trainers and the Turkmen Atlary State Association by unanimous vote of the IFHA
Executive Council in Paris in October have become the IFHAlsquos first two affiliate members
The Federation of Mongolian Horse Racing Sport and Trainers (FMHRST) is a non-governmental
organization (NGO) which serves to the development of equestrian sport in Mongolia and works to
protect the rights of horsemen who specialize in this national sport The new affiliates were
announced by IFHA Chairman Louis Romanet this week and several key appointments to IFHA
executive office positions and committees have also been made
Source Horse Talk
MONGOL TV HEAD MEDIA CAN HELP FIX THE BIG PROBLEMS
Nomin Chinbat head of Mongol TV has grander intentions than just ridding the countrys television
business of rampant pirated content and unlicensed formats The young executive wants to help
clean up Mongolian politics and the nation by creating a free and open media
―The networks are used as propaganda channels for politicians They are used very effectively every
four years at election time says Chinbat whom the Source named one of the 25 Most Powerful
Women in Global TV at MIPCOM 2013
―There are laws against piracy but they arenlsquot implemented explains Chinbat who says that
politicians in the country of roughly three million wonlsquot challenge journalists because their
relationships with them are too cozy
Mongol TV has invested in original programming licenses all of its imported content and runs
investigative journalism features highlighting social problems such as alcoholism and corruption
The company is organizing a Mongol TV Day for February 2014 to which it has invited major
international studios to raise awareness of the issues and introduce the global industry to
Mongolia Britainlsquos ITV and Americalsquos CBS are already confirmed and negotiations are ongoing with
other attendees The situation has improved in recent years with some channels having become
what Chinbat calls ―hybrids which license some sports rights but then steal others and copy
formats
―These days some of these channels might license 25 episodes of a format and make 50 But this is
actually progress says Chinbat
Chinbat and her team were at the Asian Television Forum (ATF) in Singapore looking for new
formats that can be produced within the constraints of Mongolian television budgets However with
Mongolias young populationmdash65 percent of the country is under 35 years oldmdashmobile viewing is on
the rise and the network is already working second-screen utilization and new media applications
This demographic sweet spot should guarantee strong growth in the population economy and
nascent entertainment sector in Mongolia in the coming decades
Source Hollywood Reporter
ANNOUNCEMENTS
ldquoMM TODAYrdquo ON MNB-TV FRIDAY 1900 TO 1910
BCM is pleased to announce that Mongolian National Broadcasting continues its cooperation with
BCM on ―MM Today This English news program is aired every Friday for 10 minutes and is
scheduled from 1900 to 1910 tonight Tune in to watch this program that reports stories from
todaylsquos BCM NewsWire
BCM WEBSITES
MONGOLIAN WEBSITE bdquoPRESENTATIONS‟ AND bdquoNEWS‟ SECTIONS
The Presentationslsquo section on BCMlsquos Mongolian website can be reached via bcmmnitgeluud
As a key component of BCMlsquos Mongolian website articles from the Newslsquo section and the
government website Open-Governmentmn are regularly updated
S Oyun Minister of Environment and Green Development presentation at BCM monthly meeting on
May 27 added to Mongolian website bcmongoliaorgmnилтгэлүүд
- Байгаль орчин ногоон хөгжлийн сайд СОюун Байгаль орчин ногоон хөгжлийн шинэчлэлийн
бодлого үйл ажиллагаа МБЗ-ийн сарын уулзалт 5 сарын 27 2013
___________________________________________
ENGLISH WEBSITE PRESENTATIONS MONGOLIA REPORTS bdquoINTERVIEWSbdquo MONGOLIAN
BUSINESS NEWS‟ bdquoPHOTO GALLERY‟
The following 13 presentations are from the Mongolia Investment Summit- 2013 in Hong Kong
November 18-20
- Regulatory Update Navigating Mongolialsquos legal framework for foreign direct investment
Javkhlanbaatar Sereeter Director General Foreign Investment Regulations and Registration
Department MINISTRY OF ECONOMIC DEVELOPMENT OF MONGOLIA
- Investment keynote Investing into Mongolia in 2013 ndash Where do the opportunities lie James
Passin Co-Founder and Manager FIREBIRD MONGOLIA FUND
- Development keynote Key challenges and opportunities for continued growth in Mongolia
Randolph Koppa President TRADE AND DEVELOPMENT BANK OF MONGOLIA
- Outlining government policies and long-term plans for Mongolialsquos mining sector Amarjargal
Khurelbat Head of International Cooperation Division MINISTRY OF MINING OF MONGOLIA
- From copper to met coal Demand and price outlook and expected impact on Mongolialsquos economy
Ghee Peh Managing Director Metals and Mining Research UBS SECURITIES ASIA
- How Mongolian banks and financial institutions are dealing with the challenges and opportunities
of a fast growing economy Norihiko Kato Chief Executive Officer KHAN BANK
- Update on the Mongolian stock market ndash Impact of the new Securities Law Altai Khangai Chief
Executive Officer MONGOLIAN STOCK EXCHANGE
- From investment banking to trade finance to micro credits to insurance Amartuvshin Hanibal
Managing Director TENGER FINANCIAL GROUP LLC
- Spotlight presentations Showcasing Mongolian investment opportunities Peter Morrow Board
Director ASIA PACIFIC INVESTMENT PARTNERS
- Spotlight presentation Showcasing Mongolian investment opportunities Munkhbat Davaatseren
CEO of Golomt Securities GOLOMT BANK
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources
Batmunkh Batkhuu Chairman SHARYN GOL JSC
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources
Jimmie Wilde Chief Operating Officer BERKH UUL JSC
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources Mona
Forster Executive VP ENTREacuteE GOLD INC
The following two presentations are from the ―ANTI-CORRUPTION LEGISLATIONPOLICY
INTERNATIONAL BEST PRACTICE ON TRANSPARENCY training seminar for businesses in
Ulaanbaatar November 18 2013
-―International business standard on transparency by Jelena Pesic Director PwC
-―Finlandlsquos best practice on transparency and anti corruption by Dr Pekka Hallberg (as it is
worldlsquos number one) Emeritus President of the Supreme Administrative Court of Finland
The following 15 presentations are from the Mongolia Mining Summit Perth Australia October 29-
31 2013
bull Mongolialsquos Minerals Future and Development by Otgochuluu Ch Director General Department of
strategic policy and planning at Ministry of Mining Mongolia at the Mongolian Mining Summit 2013
Perth Australia Oct 29-31 2013
bull Mongolian Economy Investment OpportunitiesChallenges Jim Dwyer Executive Director
Business Council of Mongolia at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31
2013
bull Oyu Tolgoi Lessons from the Gobi Houston Spencer Vice President Communications and Media
Relations Oyu Tolgoi at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Market dynamics for Mongolian coking coal in the Chinese market Graeme Hancock President
and Chief Representative at Anglo American Mongolia at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Speech by Mr Ariunbold Byamba Deputy Director Erdenes MGL LLC at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull Launching Mining Projects in MongoliandashA Major Contractorlsquos Perspective Eric Erdenebat
Tseveendorj Country Manager Orica Limited at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Investing in a dynamic legislative environment Elisabeth Ellis Managing Partner Ulaanbaatar
Minter Ellison at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Sandvik In Pit Crushing amp Conveying (IPCC) Doug Turnbull Principal Mining Engineer Sandvik
Mining Systems at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Ovoot Coking Coal Project David Paull Managing Director Aspire Mining at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull The business of being a third neighbor David Landers General Manager East Asian Growth
Markets at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Nuurst Thermal Coal Project Daniel Rohr Chief Financial Officer Modun Resources Ltd at the
Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Culture matters in building sustainable long-term business relationships Hana Tserenkhand
Byambadash Business Development Consultant AusMon Consulting and Dr Christine Hogan Adjunct
Professor Curtin University Consultant amp Author at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Maximizing Business Benefits from Your IT Investment Brad Skeggs Executive Director COSOL at
the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Presentation by Battsengel Gotov CEO Mongolian Mining Corporation at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull Mongolian Mining Sector Present and Future Developments NAlgaa Executive Director
Mongolian National Mining Association at the Mongolian Mining Summit 2013 Perth Australia Oct
29-31 2013
The ―Mongolia Reports section includes the following
- ―Ministry of Finance of Mongolia 2013 Government Debt Auctions by Bank of Mongolia
- ―Doing Business in Mongolia 2013 Country Commercial Guide for US Companies by US
Embassy
- ―Real Estate Report 2013 by Mongolian Properties
- ―Selected Macroeconomic Indicators November 20 2013 by International Monetary Fund
- ―2013 Second Annual Mongolian CEO Survey from PricewaterhouseCoopers Audit LLC
- ―Selected Macroeconomic Indicators data through October 16 2013 by International Monetary
Fund
- ―IMF Completes 2013 Article IV Mission to Mongolia by International Monetary Fund
The following are added to Interview Section from the Oxford Business Group Mongolia Reports
2013 book
bull B Byambasaikhan Chairman Business Council of Mongolia ―Talk is cheap
bull President Ts Elbegdorj ―Diversifying for growth
bull Jim Dwyer Executive Director Business Council of Mongolia ―Non-mining sectors budding
bull Peter Morrow Chairman American University of Mongolia ―Filling in the blanks
bull N Zoljargal Governor Bank of Mongolia ―Sustainable vision
bull Gansukh Minister of Roads and Transportation ―Accessing new markets
bull J Od President MCS Group ―Building interest
bull B Chuluunbaatar President and CEO of Monnis Group ―Climbing the ranks
bull Cameron McRae President and CEO Oyu Tolgoi ―Sitting on a copper mine
BCMs English website includes the ―Mongolia Business News section where the Open Letter to
Parliament and Government is available for download
BCM continuously posts news stories and analysis of relevance to Mongolia at Mongolian Business
News before they are all put together each week for Fridays weekly NewsWire
The ―Photo Gallery contains photos from the 6th Anniversary BCM Renewal dinner on November
11 2013
BCM Football Cup 2013 pictures are posted to the website - httpbcmongoliaorgenphotos350-
enalbumalbumid=200
The BCM NewsWire will continue to be issued each Friday incorporating items already on the home
page for a consolidated account of the weeklsquos events
SOCIAL NETWORK WITH BCM
BCM LAUNCHES NEW LINKED-IN COMPANY PAGE
The Business Council of Mongolia has launched a new company page on the social networking
website LinkedIn to network its members and followers including small-medium enterprises (SMEs)
The new page will allow BCM to alert followers to the latest news and information critical to their
businesses Memberslsquo businesses will be promoted Additionally BCM plans to deliver monthly
infographics on the latest data as well as videos and other media content as they come The bulk of
the content on the new page will be in Mongolian language to better cater to BCMs Mongolian-
speaking audience and members The following link can direct you to the New BCMs Linked-in page
httpwwwlinkedincomcompanybusiness-council-of-mongoliatrk=company_logo
The Business Council of Mongolia (BCM) has expanded its reach to your favorite social networks
Keep up to date on the latest business deals in Mongolia and how the climate for investment is
improving each day with BCM
Add BCM on Facebook at httpswwwfacebookcomTheBusinessCouncilOfMongolia to read the
latest announcements and comment on events carried in the NewsWire with the community
Hear breaking news and announcements as they happen when you follow BCM on Twitter at
httpstwittercombcmongolia
We have now 2482 fans on our Facebook fans page 1527 connections on LinkedIn network and
835 followers on Twitter
Of course for news information interviews event photos and announcements regarding our
organization visit the official BCM website at httpbcmongoliaorgen
ECONOMIC INDICATORS
INFLATION
Year 2006 60 [source National Statistical Office of Mongolia (NSOM)]
Year 2007 151 [source NSOM]
Year 2008 221 [source NSOM]
Year 2009 42 [source NSOM]
Year 2010 130 [source NSOM]
Year 2011 102 [source NSOM]
November 30 2013 120 [source NSOM]
Year-over-year (y-o-y) nationwide
Note 111 y-o-y Ulaanbaatar city November 30 2013
CENTRAL BANK POLICY LOAN RATE
December 31 2008 975 [source IMF]
March 11 2009 1400 [source IMF]
May 12 2009 1275 [source IMF]
June 12 2009 1150 [source IMF]
September 30 2009 1000 [source IMF]
May 12 2010 1100 [source IMF]
April 28 2011 1150 [source IMF]
August 25 2011 1175 [source IMF]
October 25 2011 1225 [source IMF]
March 19 2012 1275 [source Mongol Bank]
April 18 2012 1325 [source Mongol Bank]
January 25 2013 1250 [source Mongol Bank]
April 8 2013 1150 [source Mongol Bank]
June 25 2013 1050 [source Mongol Bank]
CURRENCY RATES ndash DECEMBER 19 2013
Currency Name Currency Rate
US dollar USD 164138
Euro EUR 224680
Japanese yen JPY 1579
British pound GBP 268874
Hong Kong dollar HKD 21170
Chinese Yuan CNY 27031
Russian Ruble RUB 4981
South Korean won KRW 155
Disclaimer Except for reporting on BCMlsquos activities all information in the BCM NewsWire is
selected from various news sources Opinions are those of the respective news sources
MONGOLIA AND THE THREAT OF THE RESOURCE CURSE
Mongolia is at a crossroads while investors complain the government is dragging its feet on allowing
miners to start digging it is crucial that it get things right at the early stages of the resources
boom
Mongolias challenge will soon be the worlds says Richard Dobbs and his team at McKinsey in a
report predicting a USD 17 trillion investment bonanza by 2030 to keep up with demand for oil gas
and other materials In 1995 about 58 countries depended on resources for the bulk of their output
and wealth In 2011 that number had risen to 81 By 2030 roughly half of the worlds economies
will essentially become giant filling stations for developing superpowers from China to South Africa
That means that instead of the world moving toward greater transparency democracy and freer
markets we could see rising corruption levels and even greater income inequality
Economies with natural-resource endowments have a huge opportunity to transform their
prospects but history suggests that they could all too easily squander the windfall says Dobbs
director of the McKinsey Global Institute in London
The world would be wise to take steps today to break this cycle McKinsey recommends several
While not terribly original they include strengthening public institutions and good governance
building decent infrastructure boosting national competitiveness promoting sound fiscal policy
making and spending the windfall wisely while engaging in forward-looking economic and social
planning The trouble is that political will and integrity is often the first casualty once the minerals
start flowing out and the spoils come pouring in
Mongolia is at that very crossroads today Investors complain the government is dragging its feet on
allowing miners to start digging But its more important to get things right at the early stages of
the resources boom That means acting now to create the institutions and regulatory frameworks
needed to ensure revenue transparencymdashknowing exactly how much money is being dug out the
ground and where its going Why not set up a sovereign-wealth fund to save for Mongolias future
When the stakes are that high a little patience can go a long way
Source Bloomberg
MONGOLIAS NOMADS WARM TO SOLAR POWER
In Mongolia often known as the land of the blue skies the sun shines for 250 days on average each
year It beats down on the sparse plains and on the Gobi desert that spans the countrys southern
border with China
It shines even during the frigid winter days on the hundreds of thousands of nomads who still roam
the steppes herding animals and living in dome-like tents calling gers About 800000 of Mongolias
28 million inhabitants still live the traditional nomadic lifestyle that has remained largely
unchanged for generations Apart from the addition of motorbikes the occasional petrol generator
and a passing trade from intrepid tourists wanting to stay in a ger for the night life is almost the
same as that of many nomads grandparents and great-grandparents Almost but not exactly
Dotted across the steppes glints of light can be seen as the sun bounces off the solar panels that
have been installed on the sides of gers made of felt and yaks wool At the start of this millennium
Mongolias herders and nomads had little or no access to modern electric power and its potential
benefits But as of 2013 thanks to a concerted push by the Mongolian government almost 70
percent of nomadic people have access to electricity Bor a herder who mainly travels around
western Mongolias Arkhangai province is one of the people whose family benefits from portable
solar home systems (SHS)
We use it for generating the power for lighting in the ger charging phones we can also generate a
fridge to keep food longer and we can run a television That is very useful for us because we can
get the most recent weather forecast which is important for our work and keeping our animals
safe Before we had power it was very difficult Now it is almost like living in the city
The ability to charge mobile phones is also important for the herders who often have children
staying at boarding schools Access to electricity also allows families to contact emergency health-
care and doctors for advice without having to make the often arduous journey to the nearest village
or town
The solar systems were distributed and installed with the help of the World Bank after the
Mongolian governments National 100000 Solar Ger Electrification Program ran into difficulties A
World Bank report Capturing the Sun in the Land of the Blue Sky describes the difficulties faced by
the Mongolian government on its ambitious project
By 2005 five years into the plan 30000 families had been kitted out with an SHS but then the
program began to stagnateThe government of Mongolia recognized that considerably more effort
was necessary not only to keep the program on track but to scale-up implementation in order to
achieve the National 100000 Solar Ger Electrification Program target the report said In 2006 the
World Bank agreed to cover half of the initial outlay costs for each family as well as after-sales
maintenance with 50 centers set up across the country including at least one in each of its 21
provinces so that the herders would not have to travel to Ulaanbaatar every time the solar panels
needed maintenance
The SHS project also offers environmental benefits to a country where the ratio of carbon dioxide
emissions to economic output is ten times higher than the world average because of the increase in
mining over the past decade as the true extent of Mongolias mineral wealth became apparent The
solar systems are slowly replacing the diesel generators used by some nomads as a means of
generating power although they are still using stoves for heating burning wood coal and dung
throughout the year
Source Al Jazeera
IRON-ORE AND COAL PRICES GO SEPARATE WAYS
Prices of the key ingredients in steel productionmdashiron ore and coking coalmdashare moving along sharply
different paths as mining companies resist cutting coal output despite the market being awash with
the raw material
While iron-ore prices have risen 22 percent since May coking coal is still searching for a rebound
Coking-coal prices are off more than 4 percent over the same period China is on course for another
year of record steel production with supply directed to the construction of high-rise apartment
buildings the manufacture of luxury cars and other uses
There is simply too much coal on the market the International Energy Agency said in a report this
week
Shipments of steelmaking coal from Australiamdashthe worlds biggest exporter of the commoditymdashare
forecast by the government to rise to 178 million tons in 2015 from 145 million tons last year Most
goes to China which accounts for 60 percent of global demand In contrast global iron-ore
exporters are struggling to increase output in areas other than Australias remote Pilbara region
supporting prices of that commodity The spot price of iron ore climbed to nearly USD 140 a ton
earlier this month a four-month high Prices have since eased a bit to USD 13430 a ton but
remain well above the consensus forecasts of analysts at the start of this year
Coal miners could scale back production but that isnt always easy to do In Australia many miners
are locked into so-called take or pay contracts with rail and port operators Many analysts dont
expect coking-coal prices to rebound for at least another 12 months RBC Capital Markets expects
coking-coal prices to average USD 154 a ton in 2014 down from USD 159 a ton forecast for this
year Instead they see more chance that iron-ore prices will come down more sharply RBC predicts
an 11 percent fall in iron-ore prices next year as new supply from Anglo Americans Minas Rio
project and mines owned by Fortescue Metals Group Ltd is added to the market UBS is even more
bearish predicting iron ore will fall below USD100 in the second half of 2014
Source Wall Street Journal
ARE COMMODITIES TRADERS bdquoTOO BIG TO FAIL‟
When the banking industrylsquos top lobby group commissioned a report by on commodity trading
houses the idea was to show trading houses like Glencore Xstrata Vitol or Cargill were ―too big to
fail and therefore needed to be regulated in a similar manner to the banks
But instead of highlighting the inherent issues surrounding the industry the report found trading
companies posed less systemic risk than the big banks As a result the Global Financial Markets
Association which commissioned the report decided not to finalize or publish it (The GFMA claims
that it often commissions reports which are shared with regulators and other interested parties but
never published) But the debate hasnlsquot ended
A separate report published in July by the Centre for European Policy Studies a think-tank argued
the growth of commodity trading houses which underpin the global trade in raw materials could
―have systemic implications Commodities trader Trafigura has become the latest to wade into the
debate In its recent prospectus for a EUR 500 million bond issue the worldlsquos second largest metals
trader and third biggest oil trader addresses the GFMA report as well as the issue of systemic risk
Making some tart observations the trading house says the GFMA paper was aimed squarely at the
Financial Stability Board a group of global regulators
―[The report] was widely seen as a tactic by some banks active in the commodity trading space as a
way of creating more equality between market participants by seeking to usher in further
restrictions on pure commodity trading companies the prospectus says
Commodity traders are facing the need to be more open about their operations and lift the veil of
secrecy Indeed the author of the GFMA reportmdashCraig Pirrong a widely respected academicmdashis
working on a white paper on commodities traders Commissioned by Trafigura it will look at what
commodities trading houses activities and the recent trend to accumulate more assets risk
management as well as looking at different types of commodity companies
Source Financial Times
SMOG DARKENS SHANGHAIS PROSPECTS FOR BECOMING A GLOBAL FINANCIAL CENTER
In the debate over which matters more in China money or quality of life the quality-of-life side
may have found the ultimate argument If you cant breathe nothing else really matters And itlsquos a
debate Mongolia has to have as it makes its own steps towards industrial and economic growth
Chinas pollution problem is spreading and growing worse a fact on stark display last week in
Shanghai the countrys financial center A stretch of filthy-air days in that coastal city so
thoroughly shocked residentsmdashwho had largely escaped the smog that has long plagued the likes of
Beijing and Harbinmdashthat it inspired fresh talk about getting away from China Lawrence Shu a
Shanghai-based partner at Hylands Law Firm said he and his friends are thinking more seriously
about moving abroad
The smog had a big impact because it feels really bad if you cant breathe freely he said
The environment used to take a back seat among the Chinese But as they get richer they are
traveling abroad more making the pollution back home more obvious The Internet also
contributes Blue-sky pictures posted on social networks by Chinese travelers abroad constantly
remind folks of what is lacking at home and Chinese now use various apps to track air-quality data
If Shanghais smog discourages smart financial professionals from wanting to live there that will
hinder Chinas effort to create a global financial center If businesses such as financial companies
and luxury-goods makers perceive that Chinas elites are spending more time outside their home
country they will be less willing to invest in China
Most rich Chinese havent packed their bags and left yet but they are keeping their options open
Relocation is a big decision said Anne Wang who works in the financial industry in Shanghai But
just in case she recently received a US visa that would allow her to live there
Source Wall Street Journal
POLITICS
MINERALS POLICY ENTERS FINAL DISCUSSIONS
The government published a final draft of Mongolialsquos State Policy on the Minerals Sector for 2013
through 2025
The document was first presented to Parliament in July and is now entering final discussions during
the autumn plenary session of Parliament following a 42 percent drop of foreign investment and 23
percent fall in the currency year-on-year
―We have reviewed the proposed State Policy on the Mineral Sector which we feel will be a
positive step forward if passed said the Source ―The passing of this policy will result in more
transparency and an increasing participation from foreign investors That said it will take time for
these feats to be accomplished Investors will be weary of Government promises as they seek
longevity to prove Government intentions
The proposed policy is divided into four main sections rationale principles main policy and
implementation-results The major points stressed in the policy include transparency and
responsible mining The law sends the message that growth is going to be driven by private sector
participation and the intent to provide a stable investment environment technological innovation
and value-added activities
Key priorities of the law since it was first unveiled include stability of taxation and the legal
environment an end to any discrimination between foreign and national investors and the
preservation of strategic resources and deposits
This most recent version saw the inclusion of a new section supporting development of local areas
and the interests of local citizens Other key elements include explorationmdashwhich would see
greater government regulation for strategic mineral deposits while cutting down bureaucracy and
conducting scientific researchmdashproduction support and local support The new document also
highlights greater support for non-governmental organizations for the environment allowing them
to claim damages from mining operations the establishment of funds to support economic
diversification environmental protections and land rehabilitation
The new draft has removed the risk assessment section and replaced it with a section on
implementation This includes the improvement of the legal environment and producing of relevant
regulations programs and projects for 2013 to 2015 followed by the implementation of programs
and projects from 2014 to 2025 and finally the provision of conclusions on midterm policy
implementation and further planning for up to 2020 and 2025
―We believe that this policy will take us one step closer to attracting investors and supporting
private sector development in Mongolia said the Source ―Despite current investor hesitation this
state policy in addition to the new amended Minerals Law set to pass next year will further
encourage investors to enter the market and will build support for the junior mining community
Source Mongolian Investment Banking Group
PARLIAMENT UNANIMOUSLY BACKS ldquoSMART GOVERNMENTrdquo INITIATIVE
Parliament has unanimously backed President Tsakhia Elbegdorjs ―From Big Government to Smart
Government initiative for government reform concepts having signed a joint statement of support
on 13 December
The joint statement gives full support to the presidents initiative and commits to cooperation for
its undertaking This includes support for enhancing government systems and policies in line with
democracy and a market economy improving the capacities of public services and curtailing
government intervention into private business affairs Also included are protections to private
business including establishing government structures for rule of law support to domestic
industries and honoring contracts The fight against corruption is another main perogative
On 16 November 16 the Office of the President of Mongolia organized a national consultative
meeting on this topic at the Government Palace Elbegdorj next met with members of the
Parliament on 9 December to organize an open dialogue with representatives of Parliament for an
appeal for them to sign the joint statement Reaffirming the commitment of the Mongolian
lawmakers to a breakthrough reform of the Government the leaders of party floors and factions in
the Parliament and independent members of the Parliament signed the document for the reform on
December 13 2013
Source Montsame
GOVERNMENT CALLS TO END PRACTICE OF APPOINTING MPS AS MINISTERS
The coalition government has thrown their support behind President Tsakhia Elbegdorjs proposal to
prohibit Parliament members from serving as cabinet ministers
Democratic Party members discussed a draft resolution and proposed amendments submitted by the
president for the new restriction at a party meeting on Monday The draft amendments were
unanimously backed by the faction The Justice Coalition which includes the Monglian Peoples
Revolutionary Party and Mongolian Democratic Party came to the same conclusion following its own
meeting said coalition head N Battsereg on Monday
Source Montsame
COMMITTEE LEADERS TO BE ELECTED THIS MONTH
The coalition government will soon be electing officials to lead the various committees in
government
Parliament has 8 standing committees to elect leaders to this month with each committee to be
led by a representative of the coalition government Current committee heads are Ts Tsolmon at
the Security and Foreign Policy Committee G Bayarsaikhan at the Environment Food and
Agriculture Committee Z Bayanselenge at the Social Policy Education Culture and Science
Committee R Burmaa at the Petition and Requests Committee A Bakei at the State Structural
Committee Ts Davaasuren at the Budget Committee Sh Tuvdendorj at the Legislation
Committee and B Garamgaibaatar at the Economic Committee
Source Zuunii Medee
FOREIGN CURRENCY PAYMENTS BANNED FOR MININGEXPLORATION LICENSING FEES
The Ministry of Finance has banned the use of foreign currencies to pay for mining and exploration
licensing fees to the Mineral Resources Authority beginning 1 January 2014
The Ministry of Finance has prompted these entities and companies holding licenses to comply with
Mongolian currency law that states that all businesses and agencies must do business in Mongolian
tugrug According to the 2009 law transactions must not be carried out in foreign denominated or
foreign currency based rates
Source Newsmn
MINING MINISTRY TO COOPERATE WITH ASSOCIATION OF FLUORSPAR EXPLORERS
The Ministry of Mining Wednesday established a memorandum of mutual understanding with the
Association of Fluorspar Explorers (AFE) to cooperate in augmenting the countrylsquos export
In addition to expanding export goals include developing transparent and responsible mining
improving qualities and standards of fluorspar metallurgy and flotation concentrate and in
increasing the production output of the minerallsquos ore enrichment The hope is the memorandum
will create a launching point for a national program for fluorspar its exploitation increase the
volume of production by intensifying research and increase competitiveness in international
markets It will also be necessary to introduce the latest technology to the country along with
running joint trainings with foreign NGOs the Ministry said
Source Montsame
DP REJECTS AMARJARGAL‟S RESIGNATION
Parliament voted against MP R Amarjargallsquos resignation request on 12 December
During Tuesdaylsquos meeting the majority of the Standing Committee on State Structure voted against
Amarjargal`s resignation The head of the Democratic Party (DP) caucus D Erdenebat took a
strong stance against letting Amarjargal leave
Amarjargal said he wanted to resign to take responsibility on behalf of his party members for the
current political situation and economic restraints in Mongolia DP members agree with his
conclusion but encourage him to make the effort and participate for social change and
development Members of the opposition Mongolian Peoplelsquos Party members said that Amarjargal
could see the problems and nature of the majority of Parliament and praised his plan to resign
Source Newsmn
MPP HEAD TO STEP DOWN
Mongolian People Party (MPP) Head N Enkhbold has requested his resignation as party leader
MPP Deputy Head D Oyunkhorol said 9 December that Enkhbold submitted his request to step down
during a party meeting Oyunkhorol said Enkhboldlsquos resignation was due to personal reasons The
new party head will be appointed by the MPPs governing board
Source Udriin Sonin
FIFTH ROUND OF NEGOTIATIONS FOR THE JAPAN-MONGOLIA ECONOMIC PARTNERSHIP
AGREEMENT
The fifth round of the negotiations for the Japan-Mongolia Economic Partnership Agreement (EPA)
will be held from 16 to 19 December in Ulaanbaatar
The Japanese delegation will be led by Jun Yokota ambassador in charge of economic diplomacy
and the Mongolian delegation will be led by Ochirbat Chuluunbat vice minister for economic
development Experts from relevant ministries and agencies of both sides will participate in the
meetings
In this round negotiations are in areas including trade in goods and investment
Source 4-Traderscom
FIRST MONGOLIA-CHINA JOINT BORDER COMMISSION MEETING IN BEIJING
The very first meeting of Mongolia-China joint commission of borders took place 11 and 12
December in Beijing China
This meeting was co-chaired by T Togsbilguun a director of the Department of Neighbour
Countries of Mongolialsquos Ministry of Foreign Affairs and by Xiao Jiangguo a representative of border
checkpoint and seaport affairs Both sides shared on ideas for implementation of the
intergovernmental contract on the border regime and reached some agreements on conducting a
joint examination in the border signs and on activating the collaboration in law enforcement around
frontier areas After this they discussed issues of developing border checkpoints at a same level
putting some border checkpoints into a permanent regime giving an international status to four
checkpoints
The gathered also made a protocol on their meeting and inked its results The next meeting will run
in 2014 in Ulaanbaatar
Source Montsame
BELARUS TO OPEN EMBASSY IN MONGOLIA IN 2014
Belarus will open its embassy in Mongolia in 2014 reads a resolution from the Belarus Council of
Ministers of the Republic of Belarus from 12 December 2013 Belaruslsquo Finance Ministry will finance
the costs of opening and maintaining Belarusian Embassy in Mongolia from the funds set aside in its
national budget for the opening and maintenance of diplomatic missions and consular missions of
the Republic of Belarus abroad
Source Belarusian Telegraph Agency
HOWELL NEW JERSEY USA BECOMES SISTER CITY OF SUKHBAATAR DISTRICT
The Howell Township and the Sukhbaatar district in Mongolia signed a memorandum of
understanding to create sister citieslsquo between Howell New Jersey USA and the Sukhbaatar District
on Tuesday
The program was aimed at opening up talks on how each can benefit from one another Mayor
William Gatto said Howell Township is a very diverse city and theyve taken the relationship with
the Kalmyk community here in Howell and expanded it to a country where they have had no
relationship in the past he said
The sister citieslsquo program will allow both Mongolia and Howell to exchange ideas and come up
with new and better ways to do things that benefits both cultures Outside of Mongolia Howell has
the largest population of Kalmyks in the world with many living in the Freewood Acres section of
the township Gatto said
Some of the goals of the agreement include promoting a common prosperity and development for
both parties an electronic pen-pal program and education opportunities for exchange students
Through a translator Baljinnyam Gan-erdene of the Citizens Representatives Council of Sukhbaatar
District said he came to Howell to see how democracy works in the United States
Im really glad and hope that this unforgettable and successful visit opens the door to our
friendship and prosperity between our residents Gan-erdene said
Gatto gave Gan-erdene a Howell flag and a throw blanket created by the Historical Society
depicting the history of the township Gan-erdene also gave Gatto several items including a bronze
piece of art
Source NJcom
MONGOLIAN CALLIGRAPHY ADDED TO UNESCO CULTURAL HERITAGE LIST
State Parties at the 8th Session of the Intergovernmental Committee for the Safeguarding of the
Intangible Cultural Heritage in Azerbaijan unanimously agreed to register Mongolian calligraphy as
an intangible cultural heritage in need of urgent safeguarding on 2 December
―Mongolian heritage calligraphy is now being recognized by the world and I am grateful on behalf
of my country for decision makers said Secretary-General of Mongolian National Commission for
UNESCO Gundegmaa Jargalsaikhan He noted that Mongolian calligraphy was the fifth cultural
heritage item of Mongolia to be listed and now stands among the Mongolian epic traditional folk
dance the traditional music Tsuur and a circular breathing technique
Mongolian calligraphy is a 1000-year-old writing system that vertically connects continuous strokes
together to create a word Letters of Mongolian script have been created and taught by nomads
from generation to generation During the 1937-1940 purges of the Soviet era thousands of tutors
and traditional scholars of the script were killed Those who remained alive were banned from
mentoring the younger generation Soon after that or around 1946 a new Cyrillic script was
adopted as the only eligible script therefore banning all the teachings of old Mongolian script and
Latin lettering Only in the 1970s was the old Mongolian script re-introduced to scholars allowing a
limited number of classes in universities
After the 1990 democratic changes along with the revival of Mongolian identity interest in
traditional calligraphy reawakened As a sign of such revival the very first non-communist political
organization the Democratic Union of Mongolia used folded calligraphy as its main logo
Source Info Mongolia
THOUGH IMPROVING MONGOLIA STILL REELING UNDER CORRUPTION
The third joint survey by the Asia Foundation and Sant Maral Foundation to gather data on the
perception of corruption in Mongolia revealed that efforts to curb corruption in what is considered
as one of the worldlsquos most corrupt countries could be having impact
The survey shows a significant drop in the percentage of respondents who believe corruption has
increased in the last three years from 389 percent in November 2012 to 183 percent currently In
contrast in 2006 a majority of respondents (63) indicated that corruption has increased ―a lot in
the last three years The survey also shows that corruption has declined in importance as a critical
social problem since 2006 Despite these positive signs overall respondents indicated that
corruption remains a serious issue in some specific key areas
Conducted in September of this year the survey featured face-to-face interviews in 1360
households across Mongolia including seven districts in Ulaanbaatar and 21 counties in six
provinces A majority (766) cited that widespread corruption in the law enforcement agencies is
one of the main reasons the government has been unable to tackle corruption effectively When
corruption is perceived to be this widespread the attention will obviously turn to the performance
of the apex anti-corruption body the Independent Authority Against Corruption (IAAC) The survey
shows that the IAAC is slowly but surely beginning to gain confidence among citizens The
percentage of those surveyed who think that its performance is ―good or ―very good increased
from 78 percent in March 2010 to 203 percent in March 2013 In September 2013 the result shows
a new high of 294 percent
Peoplelsquos perceptions on corruption are often shaped by personal experiences Although very few
respondents in the survey said that they had actually paid a bribe themselves (8 percent about a 3
percent drop from 2012 and an 18 percent drop since 2006) as noted before many are not willing
to report instances where they are asked for one Similarly 36 percent of respondents said they
would not pay a bribe but 26 percent indicated that they would pay if they had the financial
capability
Basanta Pokharel is The Asia Foundation‟s chief of party for the STAGE program in Mongolia He
can be reached at basantapokharelasiafoundationorg The views and opinions expressed here
are those of the individual author and not those of The Asia Foundation
Source Asia Foundation
MPP DEMANDS DISMISSAL OF MINISTERS
Mongolian Peoplelsquos Party Chairman N Enkhbold and party head S Byambatsogt submitted to the
Speaker a request for the dismissal Minister of Finance Chultem Ulaan and of Economic
Development Minister Nyamjav ―Fortuna Batbayar
Our faction believes that these ministers must be held responsible for the worsening of the
national economic situation We also intend to do the same with other ministers after hearing
opinions of people said Byambatsogt
Source Montsame
FORMER TAVAN TOLGOI JSC DIRECTOR ARRESTED
The Independent Agency Against Corruption arrested former Tavan Tolgoi JSC director Kh
Tumenbayar for undisclosed reasons
An unnamed official source suggested that the arrest may be related to abuses of power and
payments to political parties as well as the construction of a high-class hotel in Dalanzadgad Soum
Umnugobi Aimag Kh Tumenbayar is a member of the Democratic Party a member of Parliament
and is an associate of ―Ajnai Bat-Erdene the Minister of Defense who helped Tumenbayar attain
position as the director of Tavan Tolgoi for 6 years and rise to head of the Umnugobi Aimag Citizens
Council
Tumenbayar voluntarily resigned from his position at Tavan Tolgoi last month The IAAC has
reportedly not given details to the reasons for the investigation opened on Tumenbayar because of
possible connections to high-ranking officials
Source Unuudur
MONGOLIA TURKMENISTAN JOIN INTERNATIONAL RACING FEDERATION
The International Federation of Horseracing Authorities (IFHA) has welcomed racing organizations
from Mongolia and Turkmenistan as affiliate members
Recent ratification to IFHA statutes at its annual General Assembly in October created a new
affiliate membership category within the Federation Thus the Federation of Mongolia Horse Racing
Sport and Trainers and the Turkmen Atlary State Association by unanimous vote of the IFHA
Executive Council in Paris in October have become the IFHAlsquos first two affiliate members
The Federation of Mongolian Horse Racing Sport and Trainers (FMHRST) is a non-governmental
organization (NGO) which serves to the development of equestrian sport in Mongolia and works to
protect the rights of horsemen who specialize in this national sport The new affiliates were
announced by IFHA Chairman Louis Romanet this week and several key appointments to IFHA
executive office positions and committees have also been made
Source Horse Talk
MONGOL TV HEAD MEDIA CAN HELP FIX THE BIG PROBLEMS
Nomin Chinbat head of Mongol TV has grander intentions than just ridding the countrys television
business of rampant pirated content and unlicensed formats The young executive wants to help
clean up Mongolian politics and the nation by creating a free and open media
―The networks are used as propaganda channels for politicians They are used very effectively every
four years at election time says Chinbat whom the Source named one of the 25 Most Powerful
Women in Global TV at MIPCOM 2013
―There are laws against piracy but they arenlsquot implemented explains Chinbat who says that
politicians in the country of roughly three million wonlsquot challenge journalists because their
relationships with them are too cozy
Mongol TV has invested in original programming licenses all of its imported content and runs
investigative journalism features highlighting social problems such as alcoholism and corruption
The company is organizing a Mongol TV Day for February 2014 to which it has invited major
international studios to raise awareness of the issues and introduce the global industry to
Mongolia Britainlsquos ITV and Americalsquos CBS are already confirmed and negotiations are ongoing with
other attendees The situation has improved in recent years with some channels having become
what Chinbat calls ―hybrids which license some sports rights but then steal others and copy
formats
―These days some of these channels might license 25 episodes of a format and make 50 But this is
actually progress says Chinbat
Chinbat and her team were at the Asian Television Forum (ATF) in Singapore looking for new
formats that can be produced within the constraints of Mongolian television budgets However with
Mongolias young populationmdash65 percent of the country is under 35 years oldmdashmobile viewing is on
the rise and the network is already working second-screen utilization and new media applications
This demographic sweet spot should guarantee strong growth in the population economy and
nascent entertainment sector in Mongolia in the coming decades
Source Hollywood Reporter
ANNOUNCEMENTS
ldquoMM TODAYrdquo ON MNB-TV FRIDAY 1900 TO 1910
BCM is pleased to announce that Mongolian National Broadcasting continues its cooperation with
BCM on ―MM Today This English news program is aired every Friday for 10 minutes and is
scheduled from 1900 to 1910 tonight Tune in to watch this program that reports stories from
todaylsquos BCM NewsWire
BCM WEBSITES
MONGOLIAN WEBSITE bdquoPRESENTATIONS‟ AND bdquoNEWS‟ SECTIONS
The Presentationslsquo section on BCMlsquos Mongolian website can be reached via bcmmnitgeluud
As a key component of BCMlsquos Mongolian website articles from the Newslsquo section and the
government website Open-Governmentmn are regularly updated
S Oyun Minister of Environment and Green Development presentation at BCM monthly meeting on
May 27 added to Mongolian website bcmongoliaorgmnилтгэлүүд
- Байгаль орчин ногоон хөгжлийн сайд СОюун Байгаль орчин ногоон хөгжлийн шинэчлэлийн
бодлого үйл ажиллагаа МБЗ-ийн сарын уулзалт 5 сарын 27 2013
___________________________________________
ENGLISH WEBSITE PRESENTATIONS MONGOLIA REPORTS bdquoINTERVIEWSbdquo MONGOLIAN
BUSINESS NEWS‟ bdquoPHOTO GALLERY‟
The following 13 presentations are from the Mongolia Investment Summit- 2013 in Hong Kong
November 18-20
- Regulatory Update Navigating Mongolialsquos legal framework for foreign direct investment
Javkhlanbaatar Sereeter Director General Foreign Investment Regulations and Registration
Department MINISTRY OF ECONOMIC DEVELOPMENT OF MONGOLIA
- Investment keynote Investing into Mongolia in 2013 ndash Where do the opportunities lie James
Passin Co-Founder and Manager FIREBIRD MONGOLIA FUND
- Development keynote Key challenges and opportunities for continued growth in Mongolia
Randolph Koppa President TRADE AND DEVELOPMENT BANK OF MONGOLIA
- Outlining government policies and long-term plans for Mongolialsquos mining sector Amarjargal
Khurelbat Head of International Cooperation Division MINISTRY OF MINING OF MONGOLIA
- From copper to met coal Demand and price outlook and expected impact on Mongolialsquos economy
Ghee Peh Managing Director Metals and Mining Research UBS SECURITIES ASIA
- How Mongolian banks and financial institutions are dealing with the challenges and opportunities
of a fast growing economy Norihiko Kato Chief Executive Officer KHAN BANK
- Update on the Mongolian stock market ndash Impact of the new Securities Law Altai Khangai Chief
Executive Officer MONGOLIAN STOCK EXCHANGE
- From investment banking to trade finance to micro credits to insurance Amartuvshin Hanibal
Managing Director TENGER FINANCIAL GROUP LLC
- Spotlight presentations Showcasing Mongolian investment opportunities Peter Morrow Board
Director ASIA PACIFIC INVESTMENT PARTNERS
- Spotlight presentation Showcasing Mongolian investment opportunities Munkhbat Davaatseren
CEO of Golomt Securities GOLOMT BANK
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources
Batmunkh Batkhuu Chairman SHARYN GOL JSC
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources
Jimmie Wilde Chief Operating Officer BERKH UUL JSC
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources Mona
Forster Executive VP ENTREacuteE GOLD INC
The following two presentations are from the ―ANTI-CORRUPTION LEGISLATIONPOLICY
INTERNATIONAL BEST PRACTICE ON TRANSPARENCY training seminar for businesses in
Ulaanbaatar November 18 2013
-―International business standard on transparency by Jelena Pesic Director PwC
-―Finlandlsquos best practice on transparency and anti corruption by Dr Pekka Hallberg (as it is
worldlsquos number one) Emeritus President of the Supreme Administrative Court of Finland
The following 15 presentations are from the Mongolia Mining Summit Perth Australia October 29-
31 2013
bull Mongolialsquos Minerals Future and Development by Otgochuluu Ch Director General Department of
strategic policy and planning at Ministry of Mining Mongolia at the Mongolian Mining Summit 2013
Perth Australia Oct 29-31 2013
bull Mongolian Economy Investment OpportunitiesChallenges Jim Dwyer Executive Director
Business Council of Mongolia at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31
2013
bull Oyu Tolgoi Lessons from the Gobi Houston Spencer Vice President Communications and Media
Relations Oyu Tolgoi at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Market dynamics for Mongolian coking coal in the Chinese market Graeme Hancock President
and Chief Representative at Anglo American Mongolia at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Speech by Mr Ariunbold Byamba Deputy Director Erdenes MGL LLC at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull Launching Mining Projects in MongoliandashA Major Contractorlsquos Perspective Eric Erdenebat
Tseveendorj Country Manager Orica Limited at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Investing in a dynamic legislative environment Elisabeth Ellis Managing Partner Ulaanbaatar
Minter Ellison at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Sandvik In Pit Crushing amp Conveying (IPCC) Doug Turnbull Principal Mining Engineer Sandvik
Mining Systems at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Ovoot Coking Coal Project David Paull Managing Director Aspire Mining at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull The business of being a third neighbor David Landers General Manager East Asian Growth
Markets at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Nuurst Thermal Coal Project Daniel Rohr Chief Financial Officer Modun Resources Ltd at the
Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Culture matters in building sustainable long-term business relationships Hana Tserenkhand
Byambadash Business Development Consultant AusMon Consulting and Dr Christine Hogan Adjunct
Professor Curtin University Consultant amp Author at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Maximizing Business Benefits from Your IT Investment Brad Skeggs Executive Director COSOL at
the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Presentation by Battsengel Gotov CEO Mongolian Mining Corporation at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull Mongolian Mining Sector Present and Future Developments NAlgaa Executive Director
Mongolian National Mining Association at the Mongolian Mining Summit 2013 Perth Australia Oct
29-31 2013
The ―Mongolia Reports section includes the following
- ―Ministry of Finance of Mongolia 2013 Government Debt Auctions by Bank of Mongolia
- ―Doing Business in Mongolia 2013 Country Commercial Guide for US Companies by US
Embassy
- ―Real Estate Report 2013 by Mongolian Properties
- ―Selected Macroeconomic Indicators November 20 2013 by International Monetary Fund
- ―2013 Second Annual Mongolian CEO Survey from PricewaterhouseCoopers Audit LLC
- ―Selected Macroeconomic Indicators data through October 16 2013 by International Monetary
Fund
- ―IMF Completes 2013 Article IV Mission to Mongolia by International Monetary Fund
The following are added to Interview Section from the Oxford Business Group Mongolia Reports
2013 book
bull B Byambasaikhan Chairman Business Council of Mongolia ―Talk is cheap
bull President Ts Elbegdorj ―Diversifying for growth
bull Jim Dwyer Executive Director Business Council of Mongolia ―Non-mining sectors budding
bull Peter Morrow Chairman American University of Mongolia ―Filling in the blanks
bull N Zoljargal Governor Bank of Mongolia ―Sustainable vision
bull Gansukh Minister of Roads and Transportation ―Accessing new markets
bull J Od President MCS Group ―Building interest
bull B Chuluunbaatar President and CEO of Monnis Group ―Climbing the ranks
bull Cameron McRae President and CEO Oyu Tolgoi ―Sitting on a copper mine
BCMs English website includes the ―Mongolia Business News section where the Open Letter to
Parliament and Government is available for download
BCM continuously posts news stories and analysis of relevance to Mongolia at Mongolian Business
News before they are all put together each week for Fridays weekly NewsWire
The ―Photo Gallery contains photos from the 6th Anniversary BCM Renewal dinner on November
11 2013
BCM Football Cup 2013 pictures are posted to the website - httpbcmongoliaorgenphotos350-
enalbumalbumid=200
The BCM NewsWire will continue to be issued each Friday incorporating items already on the home
page for a consolidated account of the weeklsquos events
SOCIAL NETWORK WITH BCM
BCM LAUNCHES NEW LINKED-IN COMPANY PAGE
The Business Council of Mongolia has launched a new company page on the social networking
website LinkedIn to network its members and followers including small-medium enterprises (SMEs)
The new page will allow BCM to alert followers to the latest news and information critical to their
businesses Memberslsquo businesses will be promoted Additionally BCM plans to deliver monthly
infographics on the latest data as well as videos and other media content as they come The bulk of
the content on the new page will be in Mongolian language to better cater to BCMs Mongolian-
speaking audience and members The following link can direct you to the New BCMs Linked-in page
httpwwwlinkedincomcompanybusiness-council-of-mongoliatrk=company_logo
The Business Council of Mongolia (BCM) has expanded its reach to your favorite social networks
Keep up to date on the latest business deals in Mongolia and how the climate for investment is
improving each day with BCM
Add BCM on Facebook at httpswwwfacebookcomTheBusinessCouncilOfMongolia to read the
latest announcements and comment on events carried in the NewsWire with the community
Hear breaking news and announcements as they happen when you follow BCM on Twitter at
httpstwittercombcmongolia
We have now 2482 fans on our Facebook fans page 1527 connections on LinkedIn network and
835 followers on Twitter
Of course for news information interviews event photos and announcements regarding our
organization visit the official BCM website at httpbcmongoliaorgen
ECONOMIC INDICATORS
INFLATION
Year 2006 60 [source National Statistical Office of Mongolia (NSOM)]
Year 2007 151 [source NSOM]
Year 2008 221 [source NSOM]
Year 2009 42 [source NSOM]
Year 2010 130 [source NSOM]
Year 2011 102 [source NSOM]
November 30 2013 120 [source NSOM]
Year-over-year (y-o-y) nationwide
Note 111 y-o-y Ulaanbaatar city November 30 2013
CENTRAL BANK POLICY LOAN RATE
December 31 2008 975 [source IMF]
March 11 2009 1400 [source IMF]
May 12 2009 1275 [source IMF]
June 12 2009 1150 [source IMF]
September 30 2009 1000 [source IMF]
May 12 2010 1100 [source IMF]
April 28 2011 1150 [source IMF]
August 25 2011 1175 [source IMF]
October 25 2011 1225 [source IMF]
March 19 2012 1275 [source Mongol Bank]
April 18 2012 1325 [source Mongol Bank]
January 25 2013 1250 [source Mongol Bank]
April 8 2013 1150 [source Mongol Bank]
June 25 2013 1050 [source Mongol Bank]
CURRENCY RATES ndash DECEMBER 19 2013
Currency Name Currency Rate
US dollar USD 164138
Euro EUR 224680
Japanese yen JPY 1579
British pound GBP 268874
Hong Kong dollar HKD 21170
Chinese Yuan CNY 27031
Russian Ruble RUB 4981
South Korean won KRW 155
Disclaimer Except for reporting on BCMlsquos activities all information in the BCM NewsWire is
selected from various news sources Opinions are those of the respective news sources
The solar systems were distributed and installed with the help of the World Bank after the
Mongolian governments National 100000 Solar Ger Electrification Program ran into difficulties A
World Bank report Capturing the Sun in the Land of the Blue Sky describes the difficulties faced by
the Mongolian government on its ambitious project
By 2005 five years into the plan 30000 families had been kitted out with an SHS but then the
program began to stagnateThe government of Mongolia recognized that considerably more effort
was necessary not only to keep the program on track but to scale-up implementation in order to
achieve the National 100000 Solar Ger Electrification Program target the report said In 2006 the
World Bank agreed to cover half of the initial outlay costs for each family as well as after-sales
maintenance with 50 centers set up across the country including at least one in each of its 21
provinces so that the herders would not have to travel to Ulaanbaatar every time the solar panels
needed maintenance
The SHS project also offers environmental benefits to a country where the ratio of carbon dioxide
emissions to economic output is ten times higher than the world average because of the increase in
mining over the past decade as the true extent of Mongolias mineral wealth became apparent The
solar systems are slowly replacing the diesel generators used by some nomads as a means of
generating power although they are still using stoves for heating burning wood coal and dung
throughout the year
Source Al Jazeera
IRON-ORE AND COAL PRICES GO SEPARATE WAYS
Prices of the key ingredients in steel productionmdashiron ore and coking coalmdashare moving along sharply
different paths as mining companies resist cutting coal output despite the market being awash with
the raw material
While iron-ore prices have risen 22 percent since May coking coal is still searching for a rebound
Coking-coal prices are off more than 4 percent over the same period China is on course for another
year of record steel production with supply directed to the construction of high-rise apartment
buildings the manufacture of luxury cars and other uses
There is simply too much coal on the market the International Energy Agency said in a report this
week
Shipments of steelmaking coal from Australiamdashthe worlds biggest exporter of the commoditymdashare
forecast by the government to rise to 178 million tons in 2015 from 145 million tons last year Most
goes to China which accounts for 60 percent of global demand In contrast global iron-ore
exporters are struggling to increase output in areas other than Australias remote Pilbara region
supporting prices of that commodity The spot price of iron ore climbed to nearly USD 140 a ton
earlier this month a four-month high Prices have since eased a bit to USD 13430 a ton but
remain well above the consensus forecasts of analysts at the start of this year
Coal miners could scale back production but that isnt always easy to do In Australia many miners
are locked into so-called take or pay contracts with rail and port operators Many analysts dont
expect coking-coal prices to rebound for at least another 12 months RBC Capital Markets expects
coking-coal prices to average USD 154 a ton in 2014 down from USD 159 a ton forecast for this
year Instead they see more chance that iron-ore prices will come down more sharply RBC predicts
an 11 percent fall in iron-ore prices next year as new supply from Anglo Americans Minas Rio
project and mines owned by Fortescue Metals Group Ltd is added to the market UBS is even more
bearish predicting iron ore will fall below USD100 in the second half of 2014
Source Wall Street Journal
ARE COMMODITIES TRADERS bdquoTOO BIG TO FAIL‟
When the banking industrylsquos top lobby group commissioned a report by on commodity trading
houses the idea was to show trading houses like Glencore Xstrata Vitol or Cargill were ―too big to
fail and therefore needed to be regulated in a similar manner to the banks
But instead of highlighting the inherent issues surrounding the industry the report found trading
companies posed less systemic risk than the big banks As a result the Global Financial Markets
Association which commissioned the report decided not to finalize or publish it (The GFMA claims
that it often commissions reports which are shared with regulators and other interested parties but
never published) But the debate hasnlsquot ended
A separate report published in July by the Centre for European Policy Studies a think-tank argued
the growth of commodity trading houses which underpin the global trade in raw materials could
―have systemic implications Commodities trader Trafigura has become the latest to wade into the
debate In its recent prospectus for a EUR 500 million bond issue the worldlsquos second largest metals
trader and third biggest oil trader addresses the GFMA report as well as the issue of systemic risk
Making some tart observations the trading house says the GFMA paper was aimed squarely at the
Financial Stability Board a group of global regulators
―[The report] was widely seen as a tactic by some banks active in the commodity trading space as a
way of creating more equality between market participants by seeking to usher in further
restrictions on pure commodity trading companies the prospectus says
Commodity traders are facing the need to be more open about their operations and lift the veil of
secrecy Indeed the author of the GFMA reportmdashCraig Pirrong a widely respected academicmdashis
working on a white paper on commodities traders Commissioned by Trafigura it will look at what
commodities trading houses activities and the recent trend to accumulate more assets risk
management as well as looking at different types of commodity companies
Source Financial Times
SMOG DARKENS SHANGHAIS PROSPECTS FOR BECOMING A GLOBAL FINANCIAL CENTER
In the debate over which matters more in China money or quality of life the quality-of-life side
may have found the ultimate argument If you cant breathe nothing else really matters And itlsquos a
debate Mongolia has to have as it makes its own steps towards industrial and economic growth
Chinas pollution problem is spreading and growing worse a fact on stark display last week in
Shanghai the countrys financial center A stretch of filthy-air days in that coastal city so
thoroughly shocked residentsmdashwho had largely escaped the smog that has long plagued the likes of
Beijing and Harbinmdashthat it inspired fresh talk about getting away from China Lawrence Shu a
Shanghai-based partner at Hylands Law Firm said he and his friends are thinking more seriously
about moving abroad
The smog had a big impact because it feels really bad if you cant breathe freely he said
The environment used to take a back seat among the Chinese But as they get richer they are
traveling abroad more making the pollution back home more obvious The Internet also
contributes Blue-sky pictures posted on social networks by Chinese travelers abroad constantly
remind folks of what is lacking at home and Chinese now use various apps to track air-quality data
If Shanghais smog discourages smart financial professionals from wanting to live there that will
hinder Chinas effort to create a global financial center If businesses such as financial companies
and luxury-goods makers perceive that Chinas elites are spending more time outside their home
country they will be less willing to invest in China
Most rich Chinese havent packed their bags and left yet but they are keeping their options open
Relocation is a big decision said Anne Wang who works in the financial industry in Shanghai But
just in case she recently received a US visa that would allow her to live there
Source Wall Street Journal
POLITICS
MINERALS POLICY ENTERS FINAL DISCUSSIONS
The government published a final draft of Mongolialsquos State Policy on the Minerals Sector for 2013
through 2025
The document was first presented to Parliament in July and is now entering final discussions during
the autumn plenary session of Parliament following a 42 percent drop of foreign investment and 23
percent fall in the currency year-on-year
―We have reviewed the proposed State Policy on the Mineral Sector which we feel will be a
positive step forward if passed said the Source ―The passing of this policy will result in more
transparency and an increasing participation from foreign investors That said it will take time for
these feats to be accomplished Investors will be weary of Government promises as they seek
longevity to prove Government intentions
The proposed policy is divided into four main sections rationale principles main policy and
implementation-results The major points stressed in the policy include transparency and
responsible mining The law sends the message that growth is going to be driven by private sector
participation and the intent to provide a stable investment environment technological innovation
and value-added activities
Key priorities of the law since it was first unveiled include stability of taxation and the legal
environment an end to any discrimination between foreign and national investors and the
preservation of strategic resources and deposits
This most recent version saw the inclusion of a new section supporting development of local areas
and the interests of local citizens Other key elements include explorationmdashwhich would see
greater government regulation for strategic mineral deposits while cutting down bureaucracy and
conducting scientific researchmdashproduction support and local support The new document also
highlights greater support for non-governmental organizations for the environment allowing them
to claim damages from mining operations the establishment of funds to support economic
diversification environmental protections and land rehabilitation
The new draft has removed the risk assessment section and replaced it with a section on
implementation This includes the improvement of the legal environment and producing of relevant
regulations programs and projects for 2013 to 2015 followed by the implementation of programs
and projects from 2014 to 2025 and finally the provision of conclusions on midterm policy
implementation and further planning for up to 2020 and 2025
―We believe that this policy will take us one step closer to attracting investors and supporting
private sector development in Mongolia said the Source ―Despite current investor hesitation this
state policy in addition to the new amended Minerals Law set to pass next year will further
encourage investors to enter the market and will build support for the junior mining community
Source Mongolian Investment Banking Group
PARLIAMENT UNANIMOUSLY BACKS ldquoSMART GOVERNMENTrdquo INITIATIVE
Parliament has unanimously backed President Tsakhia Elbegdorjs ―From Big Government to Smart
Government initiative for government reform concepts having signed a joint statement of support
on 13 December
The joint statement gives full support to the presidents initiative and commits to cooperation for
its undertaking This includes support for enhancing government systems and policies in line with
democracy and a market economy improving the capacities of public services and curtailing
government intervention into private business affairs Also included are protections to private
business including establishing government structures for rule of law support to domestic
industries and honoring contracts The fight against corruption is another main perogative
On 16 November 16 the Office of the President of Mongolia organized a national consultative
meeting on this topic at the Government Palace Elbegdorj next met with members of the
Parliament on 9 December to organize an open dialogue with representatives of Parliament for an
appeal for them to sign the joint statement Reaffirming the commitment of the Mongolian
lawmakers to a breakthrough reform of the Government the leaders of party floors and factions in
the Parliament and independent members of the Parliament signed the document for the reform on
December 13 2013
Source Montsame
GOVERNMENT CALLS TO END PRACTICE OF APPOINTING MPS AS MINISTERS
The coalition government has thrown their support behind President Tsakhia Elbegdorjs proposal to
prohibit Parliament members from serving as cabinet ministers
Democratic Party members discussed a draft resolution and proposed amendments submitted by the
president for the new restriction at a party meeting on Monday The draft amendments were
unanimously backed by the faction The Justice Coalition which includes the Monglian Peoples
Revolutionary Party and Mongolian Democratic Party came to the same conclusion following its own
meeting said coalition head N Battsereg on Monday
Source Montsame
COMMITTEE LEADERS TO BE ELECTED THIS MONTH
The coalition government will soon be electing officials to lead the various committees in
government
Parliament has 8 standing committees to elect leaders to this month with each committee to be
led by a representative of the coalition government Current committee heads are Ts Tsolmon at
the Security and Foreign Policy Committee G Bayarsaikhan at the Environment Food and
Agriculture Committee Z Bayanselenge at the Social Policy Education Culture and Science
Committee R Burmaa at the Petition and Requests Committee A Bakei at the State Structural
Committee Ts Davaasuren at the Budget Committee Sh Tuvdendorj at the Legislation
Committee and B Garamgaibaatar at the Economic Committee
Source Zuunii Medee
FOREIGN CURRENCY PAYMENTS BANNED FOR MININGEXPLORATION LICENSING FEES
The Ministry of Finance has banned the use of foreign currencies to pay for mining and exploration
licensing fees to the Mineral Resources Authority beginning 1 January 2014
The Ministry of Finance has prompted these entities and companies holding licenses to comply with
Mongolian currency law that states that all businesses and agencies must do business in Mongolian
tugrug According to the 2009 law transactions must not be carried out in foreign denominated or
foreign currency based rates
Source Newsmn
MINING MINISTRY TO COOPERATE WITH ASSOCIATION OF FLUORSPAR EXPLORERS
The Ministry of Mining Wednesday established a memorandum of mutual understanding with the
Association of Fluorspar Explorers (AFE) to cooperate in augmenting the countrylsquos export
In addition to expanding export goals include developing transparent and responsible mining
improving qualities and standards of fluorspar metallurgy and flotation concentrate and in
increasing the production output of the minerallsquos ore enrichment The hope is the memorandum
will create a launching point for a national program for fluorspar its exploitation increase the
volume of production by intensifying research and increase competitiveness in international
markets It will also be necessary to introduce the latest technology to the country along with
running joint trainings with foreign NGOs the Ministry said
Source Montsame
DP REJECTS AMARJARGAL‟S RESIGNATION
Parliament voted against MP R Amarjargallsquos resignation request on 12 December
During Tuesdaylsquos meeting the majority of the Standing Committee on State Structure voted against
Amarjargal`s resignation The head of the Democratic Party (DP) caucus D Erdenebat took a
strong stance against letting Amarjargal leave
Amarjargal said he wanted to resign to take responsibility on behalf of his party members for the
current political situation and economic restraints in Mongolia DP members agree with his
conclusion but encourage him to make the effort and participate for social change and
development Members of the opposition Mongolian Peoplelsquos Party members said that Amarjargal
could see the problems and nature of the majority of Parliament and praised his plan to resign
Source Newsmn
MPP HEAD TO STEP DOWN
Mongolian People Party (MPP) Head N Enkhbold has requested his resignation as party leader
MPP Deputy Head D Oyunkhorol said 9 December that Enkhbold submitted his request to step down
during a party meeting Oyunkhorol said Enkhboldlsquos resignation was due to personal reasons The
new party head will be appointed by the MPPs governing board
Source Udriin Sonin
FIFTH ROUND OF NEGOTIATIONS FOR THE JAPAN-MONGOLIA ECONOMIC PARTNERSHIP
AGREEMENT
The fifth round of the negotiations for the Japan-Mongolia Economic Partnership Agreement (EPA)
will be held from 16 to 19 December in Ulaanbaatar
The Japanese delegation will be led by Jun Yokota ambassador in charge of economic diplomacy
and the Mongolian delegation will be led by Ochirbat Chuluunbat vice minister for economic
development Experts from relevant ministries and agencies of both sides will participate in the
meetings
In this round negotiations are in areas including trade in goods and investment
Source 4-Traderscom
FIRST MONGOLIA-CHINA JOINT BORDER COMMISSION MEETING IN BEIJING
The very first meeting of Mongolia-China joint commission of borders took place 11 and 12
December in Beijing China
This meeting was co-chaired by T Togsbilguun a director of the Department of Neighbour
Countries of Mongolialsquos Ministry of Foreign Affairs and by Xiao Jiangguo a representative of border
checkpoint and seaport affairs Both sides shared on ideas for implementation of the
intergovernmental contract on the border regime and reached some agreements on conducting a
joint examination in the border signs and on activating the collaboration in law enforcement around
frontier areas After this they discussed issues of developing border checkpoints at a same level
putting some border checkpoints into a permanent regime giving an international status to four
checkpoints
The gathered also made a protocol on their meeting and inked its results The next meeting will run
in 2014 in Ulaanbaatar
Source Montsame
BELARUS TO OPEN EMBASSY IN MONGOLIA IN 2014
Belarus will open its embassy in Mongolia in 2014 reads a resolution from the Belarus Council of
Ministers of the Republic of Belarus from 12 December 2013 Belaruslsquo Finance Ministry will finance
the costs of opening and maintaining Belarusian Embassy in Mongolia from the funds set aside in its
national budget for the opening and maintenance of diplomatic missions and consular missions of
the Republic of Belarus abroad
Source Belarusian Telegraph Agency
HOWELL NEW JERSEY USA BECOMES SISTER CITY OF SUKHBAATAR DISTRICT
The Howell Township and the Sukhbaatar district in Mongolia signed a memorandum of
understanding to create sister citieslsquo between Howell New Jersey USA and the Sukhbaatar District
on Tuesday
The program was aimed at opening up talks on how each can benefit from one another Mayor
William Gatto said Howell Township is a very diverse city and theyve taken the relationship with
the Kalmyk community here in Howell and expanded it to a country where they have had no
relationship in the past he said
The sister citieslsquo program will allow both Mongolia and Howell to exchange ideas and come up
with new and better ways to do things that benefits both cultures Outside of Mongolia Howell has
the largest population of Kalmyks in the world with many living in the Freewood Acres section of
the township Gatto said
Some of the goals of the agreement include promoting a common prosperity and development for
both parties an electronic pen-pal program and education opportunities for exchange students
Through a translator Baljinnyam Gan-erdene of the Citizens Representatives Council of Sukhbaatar
District said he came to Howell to see how democracy works in the United States
Im really glad and hope that this unforgettable and successful visit opens the door to our
friendship and prosperity between our residents Gan-erdene said
Gatto gave Gan-erdene a Howell flag and a throw blanket created by the Historical Society
depicting the history of the township Gan-erdene also gave Gatto several items including a bronze
piece of art
Source NJcom
MONGOLIAN CALLIGRAPHY ADDED TO UNESCO CULTURAL HERITAGE LIST
State Parties at the 8th Session of the Intergovernmental Committee for the Safeguarding of the
Intangible Cultural Heritage in Azerbaijan unanimously agreed to register Mongolian calligraphy as
an intangible cultural heritage in need of urgent safeguarding on 2 December
―Mongolian heritage calligraphy is now being recognized by the world and I am grateful on behalf
of my country for decision makers said Secretary-General of Mongolian National Commission for
UNESCO Gundegmaa Jargalsaikhan He noted that Mongolian calligraphy was the fifth cultural
heritage item of Mongolia to be listed and now stands among the Mongolian epic traditional folk
dance the traditional music Tsuur and a circular breathing technique
Mongolian calligraphy is a 1000-year-old writing system that vertically connects continuous strokes
together to create a word Letters of Mongolian script have been created and taught by nomads
from generation to generation During the 1937-1940 purges of the Soviet era thousands of tutors
and traditional scholars of the script were killed Those who remained alive were banned from
mentoring the younger generation Soon after that or around 1946 a new Cyrillic script was
adopted as the only eligible script therefore banning all the teachings of old Mongolian script and
Latin lettering Only in the 1970s was the old Mongolian script re-introduced to scholars allowing a
limited number of classes in universities
After the 1990 democratic changes along with the revival of Mongolian identity interest in
traditional calligraphy reawakened As a sign of such revival the very first non-communist political
organization the Democratic Union of Mongolia used folded calligraphy as its main logo
Source Info Mongolia
THOUGH IMPROVING MONGOLIA STILL REELING UNDER CORRUPTION
The third joint survey by the Asia Foundation and Sant Maral Foundation to gather data on the
perception of corruption in Mongolia revealed that efforts to curb corruption in what is considered
as one of the worldlsquos most corrupt countries could be having impact
The survey shows a significant drop in the percentage of respondents who believe corruption has
increased in the last three years from 389 percent in November 2012 to 183 percent currently In
contrast in 2006 a majority of respondents (63) indicated that corruption has increased ―a lot in
the last three years The survey also shows that corruption has declined in importance as a critical
social problem since 2006 Despite these positive signs overall respondents indicated that
corruption remains a serious issue in some specific key areas
Conducted in September of this year the survey featured face-to-face interviews in 1360
households across Mongolia including seven districts in Ulaanbaatar and 21 counties in six
provinces A majority (766) cited that widespread corruption in the law enforcement agencies is
one of the main reasons the government has been unable to tackle corruption effectively When
corruption is perceived to be this widespread the attention will obviously turn to the performance
of the apex anti-corruption body the Independent Authority Against Corruption (IAAC) The survey
shows that the IAAC is slowly but surely beginning to gain confidence among citizens The
percentage of those surveyed who think that its performance is ―good or ―very good increased
from 78 percent in March 2010 to 203 percent in March 2013 In September 2013 the result shows
a new high of 294 percent
Peoplelsquos perceptions on corruption are often shaped by personal experiences Although very few
respondents in the survey said that they had actually paid a bribe themselves (8 percent about a 3
percent drop from 2012 and an 18 percent drop since 2006) as noted before many are not willing
to report instances where they are asked for one Similarly 36 percent of respondents said they
would not pay a bribe but 26 percent indicated that they would pay if they had the financial
capability
Basanta Pokharel is The Asia Foundation‟s chief of party for the STAGE program in Mongolia He
can be reached at basantapokharelasiafoundationorg The views and opinions expressed here
are those of the individual author and not those of The Asia Foundation
Source Asia Foundation
MPP DEMANDS DISMISSAL OF MINISTERS
Mongolian Peoplelsquos Party Chairman N Enkhbold and party head S Byambatsogt submitted to the
Speaker a request for the dismissal Minister of Finance Chultem Ulaan and of Economic
Development Minister Nyamjav ―Fortuna Batbayar
Our faction believes that these ministers must be held responsible for the worsening of the
national economic situation We also intend to do the same with other ministers after hearing
opinions of people said Byambatsogt
Source Montsame
FORMER TAVAN TOLGOI JSC DIRECTOR ARRESTED
The Independent Agency Against Corruption arrested former Tavan Tolgoi JSC director Kh
Tumenbayar for undisclosed reasons
An unnamed official source suggested that the arrest may be related to abuses of power and
payments to political parties as well as the construction of a high-class hotel in Dalanzadgad Soum
Umnugobi Aimag Kh Tumenbayar is a member of the Democratic Party a member of Parliament
and is an associate of ―Ajnai Bat-Erdene the Minister of Defense who helped Tumenbayar attain
position as the director of Tavan Tolgoi for 6 years and rise to head of the Umnugobi Aimag Citizens
Council
Tumenbayar voluntarily resigned from his position at Tavan Tolgoi last month The IAAC has
reportedly not given details to the reasons for the investigation opened on Tumenbayar because of
possible connections to high-ranking officials
Source Unuudur
MONGOLIA TURKMENISTAN JOIN INTERNATIONAL RACING FEDERATION
The International Federation of Horseracing Authorities (IFHA) has welcomed racing organizations
from Mongolia and Turkmenistan as affiliate members
Recent ratification to IFHA statutes at its annual General Assembly in October created a new
affiliate membership category within the Federation Thus the Federation of Mongolia Horse Racing
Sport and Trainers and the Turkmen Atlary State Association by unanimous vote of the IFHA
Executive Council in Paris in October have become the IFHAlsquos first two affiliate members
The Federation of Mongolian Horse Racing Sport and Trainers (FMHRST) is a non-governmental
organization (NGO) which serves to the development of equestrian sport in Mongolia and works to
protect the rights of horsemen who specialize in this national sport The new affiliates were
announced by IFHA Chairman Louis Romanet this week and several key appointments to IFHA
executive office positions and committees have also been made
Source Horse Talk
MONGOL TV HEAD MEDIA CAN HELP FIX THE BIG PROBLEMS
Nomin Chinbat head of Mongol TV has grander intentions than just ridding the countrys television
business of rampant pirated content and unlicensed formats The young executive wants to help
clean up Mongolian politics and the nation by creating a free and open media
―The networks are used as propaganda channels for politicians They are used very effectively every
four years at election time says Chinbat whom the Source named one of the 25 Most Powerful
Women in Global TV at MIPCOM 2013
―There are laws against piracy but they arenlsquot implemented explains Chinbat who says that
politicians in the country of roughly three million wonlsquot challenge journalists because their
relationships with them are too cozy
Mongol TV has invested in original programming licenses all of its imported content and runs
investigative journalism features highlighting social problems such as alcoholism and corruption
The company is organizing a Mongol TV Day for February 2014 to which it has invited major
international studios to raise awareness of the issues and introduce the global industry to
Mongolia Britainlsquos ITV and Americalsquos CBS are already confirmed and negotiations are ongoing with
other attendees The situation has improved in recent years with some channels having become
what Chinbat calls ―hybrids which license some sports rights but then steal others and copy
formats
―These days some of these channels might license 25 episodes of a format and make 50 But this is
actually progress says Chinbat
Chinbat and her team were at the Asian Television Forum (ATF) in Singapore looking for new
formats that can be produced within the constraints of Mongolian television budgets However with
Mongolias young populationmdash65 percent of the country is under 35 years oldmdashmobile viewing is on
the rise and the network is already working second-screen utilization and new media applications
This demographic sweet spot should guarantee strong growth in the population economy and
nascent entertainment sector in Mongolia in the coming decades
Source Hollywood Reporter
ANNOUNCEMENTS
ldquoMM TODAYrdquo ON MNB-TV FRIDAY 1900 TO 1910
BCM is pleased to announce that Mongolian National Broadcasting continues its cooperation with
BCM on ―MM Today This English news program is aired every Friday for 10 minutes and is
scheduled from 1900 to 1910 tonight Tune in to watch this program that reports stories from
todaylsquos BCM NewsWire
BCM WEBSITES
MONGOLIAN WEBSITE bdquoPRESENTATIONS‟ AND bdquoNEWS‟ SECTIONS
The Presentationslsquo section on BCMlsquos Mongolian website can be reached via bcmmnitgeluud
As a key component of BCMlsquos Mongolian website articles from the Newslsquo section and the
government website Open-Governmentmn are regularly updated
S Oyun Minister of Environment and Green Development presentation at BCM monthly meeting on
May 27 added to Mongolian website bcmongoliaorgmnилтгэлүүд
- Байгаль орчин ногоон хөгжлийн сайд СОюун Байгаль орчин ногоон хөгжлийн шинэчлэлийн
бодлого үйл ажиллагаа МБЗ-ийн сарын уулзалт 5 сарын 27 2013
___________________________________________
ENGLISH WEBSITE PRESENTATIONS MONGOLIA REPORTS bdquoINTERVIEWSbdquo MONGOLIAN
BUSINESS NEWS‟ bdquoPHOTO GALLERY‟
The following 13 presentations are from the Mongolia Investment Summit- 2013 in Hong Kong
November 18-20
- Regulatory Update Navigating Mongolialsquos legal framework for foreign direct investment
Javkhlanbaatar Sereeter Director General Foreign Investment Regulations and Registration
Department MINISTRY OF ECONOMIC DEVELOPMENT OF MONGOLIA
- Investment keynote Investing into Mongolia in 2013 ndash Where do the opportunities lie James
Passin Co-Founder and Manager FIREBIRD MONGOLIA FUND
- Development keynote Key challenges and opportunities for continued growth in Mongolia
Randolph Koppa President TRADE AND DEVELOPMENT BANK OF MONGOLIA
- Outlining government policies and long-term plans for Mongolialsquos mining sector Amarjargal
Khurelbat Head of International Cooperation Division MINISTRY OF MINING OF MONGOLIA
- From copper to met coal Demand and price outlook and expected impact on Mongolialsquos economy
Ghee Peh Managing Director Metals and Mining Research UBS SECURITIES ASIA
- How Mongolian banks and financial institutions are dealing with the challenges and opportunities
of a fast growing economy Norihiko Kato Chief Executive Officer KHAN BANK
- Update on the Mongolian stock market ndash Impact of the new Securities Law Altai Khangai Chief
Executive Officer MONGOLIAN STOCK EXCHANGE
- From investment banking to trade finance to micro credits to insurance Amartuvshin Hanibal
Managing Director TENGER FINANCIAL GROUP LLC
- Spotlight presentations Showcasing Mongolian investment opportunities Peter Morrow Board
Director ASIA PACIFIC INVESTMENT PARTNERS
- Spotlight presentation Showcasing Mongolian investment opportunities Munkhbat Davaatseren
CEO of Golomt Securities GOLOMT BANK
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources
Batmunkh Batkhuu Chairman SHARYN GOL JSC
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources
Jimmie Wilde Chief Operating Officer BERKH UUL JSC
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources Mona
Forster Executive VP ENTREacuteE GOLD INC
The following two presentations are from the ―ANTI-CORRUPTION LEGISLATIONPOLICY
INTERNATIONAL BEST PRACTICE ON TRANSPARENCY training seminar for businesses in
Ulaanbaatar November 18 2013
-―International business standard on transparency by Jelena Pesic Director PwC
-―Finlandlsquos best practice on transparency and anti corruption by Dr Pekka Hallberg (as it is
worldlsquos number one) Emeritus President of the Supreme Administrative Court of Finland
The following 15 presentations are from the Mongolia Mining Summit Perth Australia October 29-
31 2013
bull Mongolialsquos Minerals Future and Development by Otgochuluu Ch Director General Department of
strategic policy and planning at Ministry of Mining Mongolia at the Mongolian Mining Summit 2013
Perth Australia Oct 29-31 2013
bull Mongolian Economy Investment OpportunitiesChallenges Jim Dwyer Executive Director
Business Council of Mongolia at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31
2013
bull Oyu Tolgoi Lessons from the Gobi Houston Spencer Vice President Communications and Media
Relations Oyu Tolgoi at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Market dynamics for Mongolian coking coal in the Chinese market Graeme Hancock President
and Chief Representative at Anglo American Mongolia at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Speech by Mr Ariunbold Byamba Deputy Director Erdenes MGL LLC at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull Launching Mining Projects in MongoliandashA Major Contractorlsquos Perspective Eric Erdenebat
Tseveendorj Country Manager Orica Limited at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Investing in a dynamic legislative environment Elisabeth Ellis Managing Partner Ulaanbaatar
Minter Ellison at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Sandvik In Pit Crushing amp Conveying (IPCC) Doug Turnbull Principal Mining Engineer Sandvik
Mining Systems at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Ovoot Coking Coal Project David Paull Managing Director Aspire Mining at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull The business of being a third neighbor David Landers General Manager East Asian Growth
Markets at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Nuurst Thermal Coal Project Daniel Rohr Chief Financial Officer Modun Resources Ltd at the
Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Culture matters in building sustainable long-term business relationships Hana Tserenkhand
Byambadash Business Development Consultant AusMon Consulting and Dr Christine Hogan Adjunct
Professor Curtin University Consultant amp Author at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Maximizing Business Benefits from Your IT Investment Brad Skeggs Executive Director COSOL at
the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Presentation by Battsengel Gotov CEO Mongolian Mining Corporation at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull Mongolian Mining Sector Present and Future Developments NAlgaa Executive Director
Mongolian National Mining Association at the Mongolian Mining Summit 2013 Perth Australia Oct
29-31 2013
The ―Mongolia Reports section includes the following
- ―Ministry of Finance of Mongolia 2013 Government Debt Auctions by Bank of Mongolia
- ―Doing Business in Mongolia 2013 Country Commercial Guide for US Companies by US
Embassy
- ―Real Estate Report 2013 by Mongolian Properties
- ―Selected Macroeconomic Indicators November 20 2013 by International Monetary Fund
- ―2013 Second Annual Mongolian CEO Survey from PricewaterhouseCoopers Audit LLC
- ―Selected Macroeconomic Indicators data through October 16 2013 by International Monetary
Fund
- ―IMF Completes 2013 Article IV Mission to Mongolia by International Monetary Fund
The following are added to Interview Section from the Oxford Business Group Mongolia Reports
2013 book
bull B Byambasaikhan Chairman Business Council of Mongolia ―Talk is cheap
bull President Ts Elbegdorj ―Diversifying for growth
bull Jim Dwyer Executive Director Business Council of Mongolia ―Non-mining sectors budding
bull Peter Morrow Chairman American University of Mongolia ―Filling in the blanks
bull N Zoljargal Governor Bank of Mongolia ―Sustainable vision
bull Gansukh Minister of Roads and Transportation ―Accessing new markets
bull J Od President MCS Group ―Building interest
bull B Chuluunbaatar President and CEO of Monnis Group ―Climbing the ranks
bull Cameron McRae President and CEO Oyu Tolgoi ―Sitting on a copper mine
BCMs English website includes the ―Mongolia Business News section where the Open Letter to
Parliament and Government is available for download
BCM continuously posts news stories and analysis of relevance to Mongolia at Mongolian Business
News before they are all put together each week for Fridays weekly NewsWire
The ―Photo Gallery contains photos from the 6th Anniversary BCM Renewal dinner on November
11 2013
BCM Football Cup 2013 pictures are posted to the website - httpbcmongoliaorgenphotos350-
enalbumalbumid=200
The BCM NewsWire will continue to be issued each Friday incorporating items already on the home
page for a consolidated account of the weeklsquos events
SOCIAL NETWORK WITH BCM
BCM LAUNCHES NEW LINKED-IN COMPANY PAGE
The Business Council of Mongolia has launched a new company page on the social networking
website LinkedIn to network its members and followers including small-medium enterprises (SMEs)
The new page will allow BCM to alert followers to the latest news and information critical to their
businesses Memberslsquo businesses will be promoted Additionally BCM plans to deliver monthly
infographics on the latest data as well as videos and other media content as they come The bulk of
the content on the new page will be in Mongolian language to better cater to BCMs Mongolian-
speaking audience and members The following link can direct you to the New BCMs Linked-in page
httpwwwlinkedincomcompanybusiness-council-of-mongoliatrk=company_logo
The Business Council of Mongolia (BCM) has expanded its reach to your favorite social networks
Keep up to date on the latest business deals in Mongolia and how the climate for investment is
improving each day with BCM
Add BCM on Facebook at httpswwwfacebookcomTheBusinessCouncilOfMongolia to read the
latest announcements and comment on events carried in the NewsWire with the community
Hear breaking news and announcements as they happen when you follow BCM on Twitter at
httpstwittercombcmongolia
We have now 2482 fans on our Facebook fans page 1527 connections on LinkedIn network and
835 followers on Twitter
Of course for news information interviews event photos and announcements regarding our
organization visit the official BCM website at httpbcmongoliaorgen
ECONOMIC INDICATORS
INFLATION
Year 2006 60 [source National Statistical Office of Mongolia (NSOM)]
Year 2007 151 [source NSOM]
Year 2008 221 [source NSOM]
Year 2009 42 [source NSOM]
Year 2010 130 [source NSOM]
Year 2011 102 [source NSOM]
November 30 2013 120 [source NSOM]
Year-over-year (y-o-y) nationwide
Note 111 y-o-y Ulaanbaatar city November 30 2013
CENTRAL BANK POLICY LOAN RATE
December 31 2008 975 [source IMF]
March 11 2009 1400 [source IMF]
May 12 2009 1275 [source IMF]
June 12 2009 1150 [source IMF]
September 30 2009 1000 [source IMF]
May 12 2010 1100 [source IMF]
April 28 2011 1150 [source IMF]
August 25 2011 1175 [source IMF]
October 25 2011 1225 [source IMF]
March 19 2012 1275 [source Mongol Bank]
April 18 2012 1325 [source Mongol Bank]
January 25 2013 1250 [source Mongol Bank]
April 8 2013 1150 [source Mongol Bank]
June 25 2013 1050 [source Mongol Bank]
CURRENCY RATES ndash DECEMBER 19 2013
Currency Name Currency Rate
US dollar USD 164138
Euro EUR 224680
Japanese yen JPY 1579
British pound GBP 268874
Hong Kong dollar HKD 21170
Chinese Yuan CNY 27031
Russian Ruble RUB 4981
South Korean won KRW 155
Disclaimer Except for reporting on BCMlsquos activities all information in the BCM NewsWire is
selected from various news sources Opinions are those of the respective news sources
Association which commissioned the report decided not to finalize or publish it (The GFMA claims
that it often commissions reports which are shared with regulators and other interested parties but
never published) But the debate hasnlsquot ended
A separate report published in July by the Centre for European Policy Studies a think-tank argued
the growth of commodity trading houses which underpin the global trade in raw materials could
―have systemic implications Commodities trader Trafigura has become the latest to wade into the
debate In its recent prospectus for a EUR 500 million bond issue the worldlsquos second largest metals
trader and third biggest oil trader addresses the GFMA report as well as the issue of systemic risk
Making some tart observations the trading house says the GFMA paper was aimed squarely at the
Financial Stability Board a group of global regulators
―[The report] was widely seen as a tactic by some banks active in the commodity trading space as a
way of creating more equality between market participants by seeking to usher in further
restrictions on pure commodity trading companies the prospectus says
Commodity traders are facing the need to be more open about their operations and lift the veil of
secrecy Indeed the author of the GFMA reportmdashCraig Pirrong a widely respected academicmdashis
working on a white paper on commodities traders Commissioned by Trafigura it will look at what
commodities trading houses activities and the recent trend to accumulate more assets risk
management as well as looking at different types of commodity companies
Source Financial Times
SMOG DARKENS SHANGHAIS PROSPECTS FOR BECOMING A GLOBAL FINANCIAL CENTER
In the debate over which matters more in China money or quality of life the quality-of-life side
may have found the ultimate argument If you cant breathe nothing else really matters And itlsquos a
debate Mongolia has to have as it makes its own steps towards industrial and economic growth
Chinas pollution problem is spreading and growing worse a fact on stark display last week in
Shanghai the countrys financial center A stretch of filthy-air days in that coastal city so
thoroughly shocked residentsmdashwho had largely escaped the smog that has long plagued the likes of
Beijing and Harbinmdashthat it inspired fresh talk about getting away from China Lawrence Shu a
Shanghai-based partner at Hylands Law Firm said he and his friends are thinking more seriously
about moving abroad
The smog had a big impact because it feels really bad if you cant breathe freely he said
The environment used to take a back seat among the Chinese But as they get richer they are
traveling abroad more making the pollution back home more obvious The Internet also
contributes Blue-sky pictures posted on social networks by Chinese travelers abroad constantly
remind folks of what is lacking at home and Chinese now use various apps to track air-quality data
If Shanghais smog discourages smart financial professionals from wanting to live there that will
hinder Chinas effort to create a global financial center If businesses such as financial companies
and luxury-goods makers perceive that Chinas elites are spending more time outside their home
country they will be less willing to invest in China
Most rich Chinese havent packed their bags and left yet but they are keeping their options open
Relocation is a big decision said Anne Wang who works in the financial industry in Shanghai But
just in case she recently received a US visa that would allow her to live there
Source Wall Street Journal
POLITICS
MINERALS POLICY ENTERS FINAL DISCUSSIONS
The government published a final draft of Mongolialsquos State Policy on the Minerals Sector for 2013
through 2025
The document was first presented to Parliament in July and is now entering final discussions during
the autumn plenary session of Parliament following a 42 percent drop of foreign investment and 23
percent fall in the currency year-on-year
―We have reviewed the proposed State Policy on the Mineral Sector which we feel will be a
positive step forward if passed said the Source ―The passing of this policy will result in more
transparency and an increasing participation from foreign investors That said it will take time for
these feats to be accomplished Investors will be weary of Government promises as they seek
longevity to prove Government intentions
The proposed policy is divided into four main sections rationale principles main policy and
implementation-results The major points stressed in the policy include transparency and
responsible mining The law sends the message that growth is going to be driven by private sector
participation and the intent to provide a stable investment environment technological innovation
and value-added activities
Key priorities of the law since it was first unveiled include stability of taxation and the legal
environment an end to any discrimination between foreign and national investors and the
preservation of strategic resources and deposits
This most recent version saw the inclusion of a new section supporting development of local areas
and the interests of local citizens Other key elements include explorationmdashwhich would see
greater government regulation for strategic mineral deposits while cutting down bureaucracy and
conducting scientific researchmdashproduction support and local support The new document also
highlights greater support for non-governmental organizations for the environment allowing them
to claim damages from mining operations the establishment of funds to support economic
diversification environmental protections and land rehabilitation
The new draft has removed the risk assessment section and replaced it with a section on
implementation This includes the improvement of the legal environment and producing of relevant
regulations programs and projects for 2013 to 2015 followed by the implementation of programs
and projects from 2014 to 2025 and finally the provision of conclusions on midterm policy
implementation and further planning for up to 2020 and 2025
―We believe that this policy will take us one step closer to attracting investors and supporting
private sector development in Mongolia said the Source ―Despite current investor hesitation this
state policy in addition to the new amended Minerals Law set to pass next year will further
encourage investors to enter the market and will build support for the junior mining community
Source Mongolian Investment Banking Group
PARLIAMENT UNANIMOUSLY BACKS ldquoSMART GOVERNMENTrdquo INITIATIVE
Parliament has unanimously backed President Tsakhia Elbegdorjs ―From Big Government to Smart
Government initiative for government reform concepts having signed a joint statement of support
on 13 December
The joint statement gives full support to the presidents initiative and commits to cooperation for
its undertaking This includes support for enhancing government systems and policies in line with
democracy and a market economy improving the capacities of public services and curtailing
government intervention into private business affairs Also included are protections to private
business including establishing government structures for rule of law support to domestic
industries and honoring contracts The fight against corruption is another main perogative
On 16 November 16 the Office of the President of Mongolia organized a national consultative
meeting on this topic at the Government Palace Elbegdorj next met with members of the
Parliament on 9 December to organize an open dialogue with representatives of Parliament for an
appeal for them to sign the joint statement Reaffirming the commitment of the Mongolian
lawmakers to a breakthrough reform of the Government the leaders of party floors and factions in
the Parliament and independent members of the Parliament signed the document for the reform on
December 13 2013
Source Montsame
GOVERNMENT CALLS TO END PRACTICE OF APPOINTING MPS AS MINISTERS
The coalition government has thrown their support behind President Tsakhia Elbegdorjs proposal to
prohibit Parliament members from serving as cabinet ministers
Democratic Party members discussed a draft resolution and proposed amendments submitted by the
president for the new restriction at a party meeting on Monday The draft amendments were
unanimously backed by the faction The Justice Coalition which includes the Monglian Peoples
Revolutionary Party and Mongolian Democratic Party came to the same conclusion following its own
meeting said coalition head N Battsereg on Monday
Source Montsame
COMMITTEE LEADERS TO BE ELECTED THIS MONTH
The coalition government will soon be electing officials to lead the various committees in
government
Parliament has 8 standing committees to elect leaders to this month with each committee to be
led by a representative of the coalition government Current committee heads are Ts Tsolmon at
the Security and Foreign Policy Committee G Bayarsaikhan at the Environment Food and
Agriculture Committee Z Bayanselenge at the Social Policy Education Culture and Science
Committee R Burmaa at the Petition and Requests Committee A Bakei at the State Structural
Committee Ts Davaasuren at the Budget Committee Sh Tuvdendorj at the Legislation
Committee and B Garamgaibaatar at the Economic Committee
Source Zuunii Medee
FOREIGN CURRENCY PAYMENTS BANNED FOR MININGEXPLORATION LICENSING FEES
The Ministry of Finance has banned the use of foreign currencies to pay for mining and exploration
licensing fees to the Mineral Resources Authority beginning 1 January 2014
The Ministry of Finance has prompted these entities and companies holding licenses to comply with
Mongolian currency law that states that all businesses and agencies must do business in Mongolian
tugrug According to the 2009 law transactions must not be carried out in foreign denominated or
foreign currency based rates
Source Newsmn
MINING MINISTRY TO COOPERATE WITH ASSOCIATION OF FLUORSPAR EXPLORERS
The Ministry of Mining Wednesday established a memorandum of mutual understanding with the
Association of Fluorspar Explorers (AFE) to cooperate in augmenting the countrylsquos export
In addition to expanding export goals include developing transparent and responsible mining
improving qualities and standards of fluorspar metallurgy and flotation concentrate and in
increasing the production output of the minerallsquos ore enrichment The hope is the memorandum
will create a launching point for a national program for fluorspar its exploitation increase the
volume of production by intensifying research and increase competitiveness in international
markets It will also be necessary to introduce the latest technology to the country along with
running joint trainings with foreign NGOs the Ministry said
Source Montsame
DP REJECTS AMARJARGAL‟S RESIGNATION
Parliament voted against MP R Amarjargallsquos resignation request on 12 December
During Tuesdaylsquos meeting the majority of the Standing Committee on State Structure voted against
Amarjargal`s resignation The head of the Democratic Party (DP) caucus D Erdenebat took a
strong stance against letting Amarjargal leave
Amarjargal said he wanted to resign to take responsibility on behalf of his party members for the
current political situation and economic restraints in Mongolia DP members agree with his
conclusion but encourage him to make the effort and participate for social change and
development Members of the opposition Mongolian Peoplelsquos Party members said that Amarjargal
could see the problems and nature of the majority of Parliament and praised his plan to resign
Source Newsmn
MPP HEAD TO STEP DOWN
Mongolian People Party (MPP) Head N Enkhbold has requested his resignation as party leader
MPP Deputy Head D Oyunkhorol said 9 December that Enkhbold submitted his request to step down
during a party meeting Oyunkhorol said Enkhboldlsquos resignation was due to personal reasons The
new party head will be appointed by the MPPs governing board
Source Udriin Sonin
FIFTH ROUND OF NEGOTIATIONS FOR THE JAPAN-MONGOLIA ECONOMIC PARTNERSHIP
AGREEMENT
The fifth round of the negotiations for the Japan-Mongolia Economic Partnership Agreement (EPA)
will be held from 16 to 19 December in Ulaanbaatar
The Japanese delegation will be led by Jun Yokota ambassador in charge of economic diplomacy
and the Mongolian delegation will be led by Ochirbat Chuluunbat vice minister for economic
development Experts from relevant ministries and agencies of both sides will participate in the
meetings
In this round negotiations are in areas including trade in goods and investment
Source 4-Traderscom
FIRST MONGOLIA-CHINA JOINT BORDER COMMISSION MEETING IN BEIJING
The very first meeting of Mongolia-China joint commission of borders took place 11 and 12
December in Beijing China
This meeting was co-chaired by T Togsbilguun a director of the Department of Neighbour
Countries of Mongolialsquos Ministry of Foreign Affairs and by Xiao Jiangguo a representative of border
checkpoint and seaport affairs Both sides shared on ideas for implementation of the
intergovernmental contract on the border regime and reached some agreements on conducting a
joint examination in the border signs and on activating the collaboration in law enforcement around
frontier areas After this they discussed issues of developing border checkpoints at a same level
putting some border checkpoints into a permanent regime giving an international status to four
checkpoints
The gathered also made a protocol on their meeting and inked its results The next meeting will run
in 2014 in Ulaanbaatar
Source Montsame
BELARUS TO OPEN EMBASSY IN MONGOLIA IN 2014
Belarus will open its embassy in Mongolia in 2014 reads a resolution from the Belarus Council of
Ministers of the Republic of Belarus from 12 December 2013 Belaruslsquo Finance Ministry will finance
the costs of opening and maintaining Belarusian Embassy in Mongolia from the funds set aside in its
national budget for the opening and maintenance of diplomatic missions and consular missions of
the Republic of Belarus abroad
Source Belarusian Telegraph Agency
HOWELL NEW JERSEY USA BECOMES SISTER CITY OF SUKHBAATAR DISTRICT
The Howell Township and the Sukhbaatar district in Mongolia signed a memorandum of
understanding to create sister citieslsquo between Howell New Jersey USA and the Sukhbaatar District
on Tuesday
The program was aimed at opening up talks on how each can benefit from one another Mayor
William Gatto said Howell Township is a very diverse city and theyve taken the relationship with
the Kalmyk community here in Howell and expanded it to a country where they have had no
relationship in the past he said
The sister citieslsquo program will allow both Mongolia and Howell to exchange ideas and come up
with new and better ways to do things that benefits both cultures Outside of Mongolia Howell has
the largest population of Kalmyks in the world with many living in the Freewood Acres section of
the township Gatto said
Some of the goals of the agreement include promoting a common prosperity and development for
both parties an electronic pen-pal program and education opportunities for exchange students
Through a translator Baljinnyam Gan-erdene of the Citizens Representatives Council of Sukhbaatar
District said he came to Howell to see how democracy works in the United States
Im really glad and hope that this unforgettable and successful visit opens the door to our
friendship and prosperity between our residents Gan-erdene said
Gatto gave Gan-erdene a Howell flag and a throw blanket created by the Historical Society
depicting the history of the township Gan-erdene also gave Gatto several items including a bronze
piece of art
Source NJcom
MONGOLIAN CALLIGRAPHY ADDED TO UNESCO CULTURAL HERITAGE LIST
State Parties at the 8th Session of the Intergovernmental Committee for the Safeguarding of the
Intangible Cultural Heritage in Azerbaijan unanimously agreed to register Mongolian calligraphy as
an intangible cultural heritage in need of urgent safeguarding on 2 December
―Mongolian heritage calligraphy is now being recognized by the world and I am grateful on behalf
of my country for decision makers said Secretary-General of Mongolian National Commission for
UNESCO Gundegmaa Jargalsaikhan He noted that Mongolian calligraphy was the fifth cultural
heritage item of Mongolia to be listed and now stands among the Mongolian epic traditional folk
dance the traditional music Tsuur and a circular breathing technique
Mongolian calligraphy is a 1000-year-old writing system that vertically connects continuous strokes
together to create a word Letters of Mongolian script have been created and taught by nomads
from generation to generation During the 1937-1940 purges of the Soviet era thousands of tutors
and traditional scholars of the script were killed Those who remained alive were banned from
mentoring the younger generation Soon after that or around 1946 a new Cyrillic script was
adopted as the only eligible script therefore banning all the teachings of old Mongolian script and
Latin lettering Only in the 1970s was the old Mongolian script re-introduced to scholars allowing a
limited number of classes in universities
After the 1990 democratic changes along with the revival of Mongolian identity interest in
traditional calligraphy reawakened As a sign of such revival the very first non-communist political
organization the Democratic Union of Mongolia used folded calligraphy as its main logo
Source Info Mongolia
THOUGH IMPROVING MONGOLIA STILL REELING UNDER CORRUPTION
The third joint survey by the Asia Foundation and Sant Maral Foundation to gather data on the
perception of corruption in Mongolia revealed that efforts to curb corruption in what is considered
as one of the worldlsquos most corrupt countries could be having impact
The survey shows a significant drop in the percentage of respondents who believe corruption has
increased in the last three years from 389 percent in November 2012 to 183 percent currently In
contrast in 2006 a majority of respondents (63) indicated that corruption has increased ―a lot in
the last three years The survey also shows that corruption has declined in importance as a critical
social problem since 2006 Despite these positive signs overall respondents indicated that
corruption remains a serious issue in some specific key areas
Conducted in September of this year the survey featured face-to-face interviews in 1360
households across Mongolia including seven districts in Ulaanbaatar and 21 counties in six
provinces A majority (766) cited that widespread corruption in the law enforcement agencies is
one of the main reasons the government has been unable to tackle corruption effectively When
corruption is perceived to be this widespread the attention will obviously turn to the performance
of the apex anti-corruption body the Independent Authority Against Corruption (IAAC) The survey
shows that the IAAC is slowly but surely beginning to gain confidence among citizens The
percentage of those surveyed who think that its performance is ―good or ―very good increased
from 78 percent in March 2010 to 203 percent in March 2013 In September 2013 the result shows
a new high of 294 percent
Peoplelsquos perceptions on corruption are often shaped by personal experiences Although very few
respondents in the survey said that they had actually paid a bribe themselves (8 percent about a 3
percent drop from 2012 and an 18 percent drop since 2006) as noted before many are not willing
to report instances where they are asked for one Similarly 36 percent of respondents said they
would not pay a bribe but 26 percent indicated that they would pay if they had the financial
capability
Basanta Pokharel is The Asia Foundation‟s chief of party for the STAGE program in Mongolia He
can be reached at basantapokharelasiafoundationorg The views and opinions expressed here
are those of the individual author and not those of The Asia Foundation
Source Asia Foundation
MPP DEMANDS DISMISSAL OF MINISTERS
Mongolian Peoplelsquos Party Chairman N Enkhbold and party head S Byambatsogt submitted to the
Speaker a request for the dismissal Minister of Finance Chultem Ulaan and of Economic
Development Minister Nyamjav ―Fortuna Batbayar
Our faction believes that these ministers must be held responsible for the worsening of the
national economic situation We also intend to do the same with other ministers after hearing
opinions of people said Byambatsogt
Source Montsame
FORMER TAVAN TOLGOI JSC DIRECTOR ARRESTED
The Independent Agency Against Corruption arrested former Tavan Tolgoi JSC director Kh
Tumenbayar for undisclosed reasons
An unnamed official source suggested that the arrest may be related to abuses of power and
payments to political parties as well as the construction of a high-class hotel in Dalanzadgad Soum
Umnugobi Aimag Kh Tumenbayar is a member of the Democratic Party a member of Parliament
and is an associate of ―Ajnai Bat-Erdene the Minister of Defense who helped Tumenbayar attain
position as the director of Tavan Tolgoi for 6 years and rise to head of the Umnugobi Aimag Citizens
Council
Tumenbayar voluntarily resigned from his position at Tavan Tolgoi last month The IAAC has
reportedly not given details to the reasons for the investigation opened on Tumenbayar because of
possible connections to high-ranking officials
Source Unuudur
MONGOLIA TURKMENISTAN JOIN INTERNATIONAL RACING FEDERATION
The International Federation of Horseracing Authorities (IFHA) has welcomed racing organizations
from Mongolia and Turkmenistan as affiliate members
Recent ratification to IFHA statutes at its annual General Assembly in October created a new
affiliate membership category within the Federation Thus the Federation of Mongolia Horse Racing
Sport and Trainers and the Turkmen Atlary State Association by unanimous vote of the IFHA
Executive Council in Paris in October have become the IFHAlsquos first two affiliate members
The Federation of Mongolian Horse Racing Sport and Trainers (FMHRST) is a non-governmental
organization (NGO) which serves to the development of equestrian sport in Mongolia and works to
protect the rights of horsemen who specialize in this national sport The new affiliates were
announced by IFHA Chairman Louis Romanet this week and several key appointments to IFHA
executive office positions and committees have also been made
Source Horse Talk
MONGOL TV HEAD MEDIA CAN HELP FIX THE BIG PROBLEMS
Nomin Chinbat head of Mongol TV has grander intentions than just ridding the countrys television
business of rampant pirated content and unlicensed formats The young executive wants to help
clean up Mongolian politics and the nation by creating a free and open media
―The networks are used as propaganda channels for politicians They are used very effectively every
four years at election time says Chinbat whom the Source named one of the 25 Most Powerful
Women in Global TV at MIPCOM 2013
―There are laws against piracy but they arenlsquot implemented explains Chinbat who says that
politicians in the country of roughly three million wonlsquot challenge journalists because their
relationships with them are too cozy
Mongol TV has invested in original programming licenses all of its imported content and runs
investigative journalism features highlighting social problems such as alcoholism and corruption
The company is organizing a Mongol TV Day for February 2014 to which it has invited major
international studios to raise awareness of the issues and introduce the global industry to
Mongolia Britainlsquos ITV and Americalsquos CBS are already confirmed and negotiations are ongoing with
other attendees The situation has improved in recent years with some channels having become
what Chinbat calls ―hybrids which license some sports rights but then steal others and copy
formats
―These days some of these channels might license 25 episodes of a format and make 50 But this is
actually progress says Chinbat
Chinbat and her team were at the Asian Television Forum (ATF) in Singapore looking for new
formats that can be produced within the constraints of Mongolian television budgets However with
Mongolias young populationmdash65 percent of the country is under 35 years oldmdashmobile viewing is on
the rise and the network is already working second-screen utilization and new media applications
This demographic sweet spot should guarantee strong growth in the population economy and
nascent entertainment sector in Mongolia in the coming decades
Source Hollywood Reporter
ANNOUNCEMENTS
ldquoMM TODAYrdquo ON MNB-TV FRIDAY 1900 TO 1910
BCM is pleased to announce that Mongolian National Broadcasting continues its cooperation with
BCM on ―MM Today This English news program is aired every Friday for 10 minutes and is
scheduled from 1900 to 1910 tonight Tune in to watch this program that reports stories from
todaylsquos BCM NewsWire
BCM WEBSITES
MONGOLIAN WEBSITE bdquoPRESENTATIONS‟ AND bdquoNEWS‟ SECTIONS
The Presentationslsquo section on BCMlsquos Mongolian website can be reached via bcmmnitgeluud
As a key component of BCMlsquos Mongolian website articles from the Newslsquo section and the
government website Open-Governmentmn are regularly updated
S Oyun Minister of Environment and Green Development presentation at BCM monthly meeting on
May 27 added to Mongolian website bcmongoliaorgmnилтгэлүүд
- Байгаль орчин ногоон хөгжлийн сайд СОюун Байгаль орчин ногоон хөгжлийн шинэчлэлийн
бодлого үйл ажиллагаа МБЗ-ийн сарын уулзалт 5 сарын 27 2013
___________________________________________
ENGLISH WEBSITE PRESENTATIONS MONGOLIA REPORTS bdquoINTERVIEWSbdquo MONGOLIAN
BUSINESS NEWS‟ bdquoPHOTO GALLERY‟
The following 13 presentations are from the Mongolia Investment Summit- 2013 in Hong Kong
November 18-20
- Regulatory Update Navigating Mongolialsquos legal framework for foreign direct investment
Javkhlanbaatar Sereeter Director General Foreign Investment Regulations and Registration
Department MINISTRY OF ECONOMIC DEVELOPMENT OF MONGOLIA
- Investment keynote Investing into Mongolia in 2013 ndash Where do the opportunities lie James
Passin Co-Founder and Manager FIREBIRD MONGOLIA FUND
- Development keynote Key challenges and opportunities for continued growth in Mongolia
Randolph Koppa President TRADE AND DEVELOPMENT BANK OF MONGOLIA
- Outlining government policies and long-term plans for Mongolialsquos mining sector Amarjargal
Khurelbat Head of International Cooperation Division MINISTRY OF MINING OF MONGOLIA
- From copper to met coal Demand and price outlook and expected impact on Mongolialsquos economy
Ghee Peh Managing Director Metals and Mining Research UBS SECURITIES ASIA
- How Mongolian banks and financial institutions are dealing with the challenges and opportunities
of a fast growing economy Norihiko Kato Chief Executive Officer KHAN BANK
- Update on the Mongolian stock market ndash Impact of the new Securities Law Altai Khangai Chief
Executive Officer MONGOLIAN STOCK EXCHANGE
- From investment banking to trade finance to micro credits to insurance Amartuvshin Hanibal
Managing Director TENGER FINANCIAL GROUP LLC
- Spotlight presentations Showcasing Mongolian investment opportunities Peter Morrow Board
Director ASIA PACIFIC INVESTMENT PARTNERS
- Spotlight presentation Showcasing Mongolian investment opportunities Munkhbat Davaatseren
CEO of Golomt Securities GOLOMT BANK
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources
Batmunkh Batkhuu Chairman SHARYN GOL JSC
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources
Jimmie Wilde Chief Operating Officer BERKH UUL JSC
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources Mona
Forster Executive VP ENTREacuteE GOLD INC
The following two presentations are from the ―ANTI-CORRUPTION LEGISLATIONPOLICY
INTERNATIONAL BEST PRACTICE ON TRANSPARENCY training seminar for businesses in
Ulaanbaatar November 18 2013
-―International business standard on transparency by Jelena Pesic Director PwC
-―Finlandlsquos best practice on transparency and anti corruption by Dr Pekka Hallberg (as it is
worldlsquos number one) Emeritus President of the Supreme Administrative Court of Finland
The following 15 presentations are from the Mongolia Mining Summit Perth Australia October 29-
31 2013
bull Mongolialsquos Minerals Future and Development by Otgochuluu Ch Director General Department of
strategic policy and planning at Ministry of Mining Mongolia at the Mongolian Mining Summit 2013
Perth Australia Oct 29-31 2013
bull Mongolian Economy Investment OpportunitiesChallenges Jim Dwyer Executive Director
Business Council of Mongolia at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31
2013
bull Oyu Tolgoi Lessons from the Gobi Houston Spencer Vice President Communications and Media
Relations Oyu Tolgoi at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Market dynamics for Mongolian coking coal in the Chinese market Graeme Hancock President
and Chief Representative at Anglo American Mongolia at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Speech by Mr Ariunbold Byamba Deputy Director Erdenes MGL LLC at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull Launching Mining Projects in MongoliandashA Major Contractorlsquos Perspective Eric Erdenebat
Tseveendorj Country Manager Orica Limited at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Investing in a dynamic legislative environment Elisabeth Ellis Managing Partner Ulaanbaatar
Minter Ellison at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Sandvik In Pit Crushing amp Conveying (IPCC) Doug Turnbull Principal Mining Engineer Sandvik
Mining Systems at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Ovoot Coking Coal Project David Paull Managing Director Aspire Mining at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull The business of being a third neighbor David Landers General Manager East Asian Growth
Markets at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Nuurst Thermal Coal Project Daniel Rohr Chief Financial Officer Modun Resources Ltd at the
Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Culture matters in building sustainable long-term business relationships Hana Tserenkhand
Byambadash Business Development Consultant AusMon Consulting and Dr Christine Hogan Adjunct
Professor Curtin University Consultant amp Author at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Maximizing Business Benefits from Your IT Investment Brad Skeggs Executive Director COSOL at
the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Presentation by Battsengel Gotov CEO Mongolian Mining Corporation at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull Mongolian Mining Sector Present and Future Developments NAlgaa Executive Director
Mongolian National Mining Association at the Mongolian Mining Summit 2013 Perth Australia Oct
29-31 2013
The ―Mongolia Reports section includes the following
- ―Ministry of Finance of Mongolia 2013 Government Debt Auctions by Bank of Mongolia
- ―Doing Business in Mongolia 2013 Country Commercial Guide for US Companies by US
Embassy
- ―Real Estate Report 2013 by Mongolian Properties
- ―Selected Macroeconomic Indicators November 20 2013 by International Monetary Fund
- ―2013 Second Annual Mongolian CEO Survey from PricewaterhouseCoopers Audit LLC
- ―Selected Macroeconomic Indicators data through October 16 2013 by International Monetary
Fund
- ―IMF Completes 2013 Article IV Mission to Mongolia by International Monetary Fund
The following are added to Interview Section from the Oxford Business Group Mongolia Reports
2013 book
bull B Byambasaikhan Chairman Business Council of Mongolia ―Talk is cheap
bull President Ts Elbegdorj ―Diversifying for growth
bull Jim Dwyer Executive Director Business Council of Mongolia ―Non-mining sectors budding
bull Peter Morrow Chairman American University of Mongolia ―Filling in the blanks
bull N Zoljargal Governor Bank of Mongolia ―Sustainable vision
bull Gansukh Minister of Roads and Transportation ―Accessing new markets
bull J Od President MCS Group ―Building interest
bull B Chuluunbaatar President and CEO of Monnis Group ―Climbing the ranks
bull Cameron McRae President and CEO Oyu Tolgoi ―Sitting on a copper mine
BCMs English website includes the ―Mongolia Business News section where the Open Letter to
Parliament and Government is available for download
BCM continuously posts news stories and analysis of relevance to Mongolia at Mongolian Business
News before they are all put together each week for Fridays weekly NewsWire
The ―Photo Gallery contains photos from the 6th Anniversary BCM Renewal dinner on November
11 2013
BCM Football Cup 2013 pictures are posted to the website - httpbcmongoliaorgenphotos350-
enalbumalbumid=200
The BCM NewsWire will continue to be issued each Friday incorporating items already on the home
page for a consolidated account of the weeklsquos events
SOCIAL NETWORK WITH BCM
BCM LAUNCHES NEW LINKED-IN COMPANY PAGE
The Business Council of Mongolia has launched a new company page on the social networking
website LinkedIn to network its members and followers including small-medium enterprises (SMEs)
The new page will allow BCM to alert followers to the latest news and information critical to their
businesses Memberslsquo businesses will be promoted Additionally BCM plans to deliver monthly
infographics on the latest data as well as videos and other media content as they come The bulk of
the content on the new page will be in Mongolian language to better cater to BCMs Mongolian-
speaking audience and members The following link can direct you to the New BCMs Linked-in page
httpwwwlinkedincomcompanybusiness-council-of-mongoliatrk=company_logo
The Business Council of Mongolia (BCM) has expanded its reach to your favorite social networks
Keep up to date on the latest business deals in Mongolia and how the climate for investment is
improving each day with BCM
Add BCM on Facebook at httpswwwfacebookcomTheBusinessCouncilOfMongolia to read the
latest announcements and comment on events carried in the NewsWire with the community
Hear breaking news and announcements as they happen when you follow BCM on Twitter at
httpstwittercombcmongolia
We have now 2482 fans on our Facebook fans page 1527 connections on LinkedIn network and
835 followers on Twitter
Of course for news information interviews event photos and announcements regarding our
organization visit the official BCM website at httpbcmongoliaorgen
ECONOMIC INDICATORS
INFLATION
Year 2006 60 [source National Statistical Office of Mongolia (NSOM)]
Year 2007 151 [source NSOM]
Year 2008 221 [source NSOM]
Year 2009 42 [source NSOM]
Year 2010 130 [source NSOM]
Year 2011 102 [source NSOM]
November 30 2013 120 [source NSOM]
Year-over-year (y-o-y) nationwide
Note 111 y-o-y Ulaanbaatar city November 30 2013
CENTRAL BANK POLICY LOAN RATE
December 31 2008 975 [source IMF]
March 11 2009 1400 [source IMF]
May 12 2009 1275 [source IMF]
June 12 2009 1150 [source IMF]
September 30 2009 1000 [source IMF]
May 12 2010 1100 [source IMF]
April 28 2011 1150 [source IMF]
August 25 2011 1175 [source IMF]
October 25 2011 1225 [source IMF]
March 19 2012 1275 [source Mongol Bank]
April 18 2012 1325 [source Mongol Bank]
January 25 2013 1250 [source Mongol Bank]
April 8 2013 1150 [source Mongol Bank]
June 25 2013 1050 [source Mongol Bank]
CURRENCY RATES ndash DECEMBER 19 2013
Currency Name Currency Rate
US dollar USD 164138
Euro EUR 224680
Japanese yen JPY 1579
British pound GBP 268874
Hong Kong dollar HKD 21170
Chinese Yuan CNY 27031
Russian Ruble RUB 4981
South Korean won KRW 155
Disclaimer Except for reporting on BCMlsquos activities all information in the BCM NewsWire is
selected from various news sources Opinions are those of the respective news sources
―We have reviewed the proposed State Policy on the Mineral Sector which we feel will be a
positive step forward if passed said the Source ―The passing of this policy will result in more
transparency and an increasing participation from foreign investors That said it will take time for
these feats to be accomplished Investors will be weary of Government promises as they seek
longevity to prove Government intentions
The proposed policy is divided into four main sections rationale principles main policy and
implementation-results The major points stressed in the policy include transparency and
responsible mining The law sends the message that growth is going to be driven by private sector
participation and the intent to provide a stable investment environment technological innovation
and value-added activities
Key priorities of the law since it was first unveiled include stability of taxation and the legal
environment an end to any discrimination between foreign and national investors and the
preservation of strategic resources and deposits
This most recent version saw the inclusion of a new section supporting development of local areas
and the interests of local citizens Other key elements include explorationmdashwhich would see
greater government regulation for strategic mineral deposits while cutting down bureaucracy and
conducting scientific researchmdashproduction support and local support The new document also
highlights greater support for non-governmental organizations for the environment allowing them
to claim damages from mining operations the establishment of funds to support economic
diversification environmental protections and land rehabilitation
The new draft has removed the risk assessment section and replaced it with a section on
implementation This includes the improvement of the legal environment and producing of relevant
regulations programs and projects for 2013 to 2015 followed by the implementation of programs
and projects from 2014 to 2025 and finally the provision of conclusions on midterm policy
implementation and further planning for up to 2020 and 2025
―We believe that this policy will take us one step closer to attracting investors and supporting
private sector development in Mongolia said the Source ―Despite current investor hesitation this
state policy in addition to the new amended Minerals Law set to pass next year will further
encourage investors to enter the market and will build support for the junior mining community
Source Mongolian Investment Banking Group
PARLIAMENT UNANIMOUSLY BACKS ldquoSMART GOVERNMENTrdquo INITIATIVE
Parliament has unanimously backed President Tsakhia Elbegdorjs ―From Big Government to Smart
Government initiative for government reform concepts having signed a joint statement of support
on 13 December
The joint statement gives full support to the presidents initiative and commits to cooperation for
its undertaking This includes support for enhancing government systems and policies in line with
democracy and a market economy improving the capacities of public services and curtailing
government intervention into private business affairs Also included are protections to private
business including establishing government structures for rule of law support to domestic
industries and honoring contracts The fight against corruption is another main perogative
On 16 November 16 the Office of the President of Mongolia organized a national consultative
meeting on this topic at the Government Palace Elbegdorj next met with members of the
Parliament on 9 December to organize an open dialogue with representatives of Parliament for an
appeal for them to sign the joint statement Reaffirming the commitment of the Mongolian
lawmakers to a breakthrough reform of the Government the leaders of party floors and factions in
the Parliament and independent members of the Parliament signed the document for the reform on
December 13 2013
Source Montsame
GOVERNMENT CALLS TO END PRACTICE OF APPOINTING MPS AS MINISTERS
The coalition government has thrown their support behind President Tsakhia Elbegdorjs proposal to
prohibit Parliament members from serving as cabinet ministers
Democratic Party members discussed a draft resolution and proposed amendments submitted by the
president for the new restriction at a party meeting on Monday The draft amendments were
unanimously backed by the faction The Justice Coalition which includes the Monglian Peoples
Revolutionary Party and Mongolian Democratic Party came to the same conclusion following its own
meeting said coalition head N Battsereg on Monday
Source Montsame
COMMITTEE LEADERS TO BE ELECTED THIS MONTH
The coalition government will soon be electing officials to lead the various committees in
government
Parliament has 8 standing committees to elect leaders to this month with each committee to be
led by a representative of the coalition government Current committee heads are Ts Tsolmon at
the Security and Foreign Policy Committee G Bayarsaikhan at the Environment Food and
Agriculture Committee Z Bayanselenge at the Social Policy Education Culture and Science
Committee R Burmaa at the Petition and Requests Committee A Bakei at the State Structural
Committee Ts Davaasuren at the Budget Committee Sh Tuvdendorj at the Legislation
Committee and B Garamgaibaatar at the Economic Committee
Source Zuunii Medee
FOREIGN CURRENCY PAYMENTS BANNED FOR MININGEXPLORATION LICENSING FEES
The Ministry of Finance has banned the use of foreign currencies to pay for mining and exploration
licensing fees to the Mineral Resources Authority beginning 1 January 2014
The Ministry of Finance has prompted these entities and companies holding licenses to comply with
Mongolian currency law that states that all businesses and agencies must do business in Mongolian
tugrug According to the 2009 law transactions must not be carried out in foreign denominated or
foreign currency based rates
Source Newsmn
MINING MINISTRY TO COOPERATE WITH ASSOCIATION OF FLUORSPAR EXPLORERS
The Ministry of Mining Wednesday established a memorandum of mutual understanding with the
Association of Fluorspar Explorers (AFE) to cooperate in augmenting the countrylsquos export
In addition to expanding export goals include developing transparent and responsible mining
improving qualities and standards of fluorspar metallurgy and flotation concentrate and in
increasing the production output of the minerallsquos ore enrichment The hope is the memorandum
will create a launching point for a national program for fluorspar its exploitation increase the
volume of production by intensifying research and increase competitiveness in international
markets It will also be necessary to introduce the latest technology to the country along with
running joint trainings with foreign NGOs the Ministry said
Source Montsame
DP REJECTS AMARJARGAL‟S RESIGNATION
Parliament voted against MP R Amarjargallsquos resignation request on 12 December
During Tuesdaylsquos meeting the majority of the Standing Committee on State Structure voted against
Amarjargal`s resignation The head of the Democratic Party (DP) caucus D Erdenebat took a
strong stance against letting Amarjargal leave
Amarjargal said he wanted to resign to take responsibility on behalf of his party members for the
current political situation and economic restraints in Mongolia DP members agree with his
conclusion but encourage him to make the effort and participate for social change and
development Members of the opposition Mongolian Peoplelsquos Party members said that Amarjargal
could see the problems and nature of the majority of Parliament and praised his plan to resign
Source Newsmn
MPP HEAD TO STEP DOWN
Mongolian People Party (MPP) Head N Enkhbold has requested his resignation as party leader
MPP Deputy Head D Oyunkhorol said 9 December that Enkhbold submitted his request to step down
during a party meeting Oyunkhorol said Enkhboldlsquos resignation was due to personal reasons The
new party head will be appointed by the MPPs governing board
Source Udriin Sonin
FIFTH ROUND OF NEGOTIATIONS FOR THE JAPAN-MONGOLIA ECONOMIC PARTNERSHIP
AGREEMENT
The fifth round of the negotiations for the Japan-Mongolia Economic Partnership Agreement (EPA)
will be held from 16 to 19 December in Ulaanbaatar
The Japanese delegation will be led by Jun Yokota ambassador in charge of economic diplomacy
and the Mongolian delegation will be led by Ochirbat Chuluunbat vice minister for economic
development Experts from relevant ministries and agencies of both sides will participate in the
meetings
In this round negotiations are in areas including trade in goods and investment
Source 4-Traderscom
FIRST MONGOLIA-CHINA JOINT BORDER COMMISSION MEETING IN BEIJING
The very first meeting of Mongolia-China joint commission of borders took place 11 and 12
December in Beijing China
This meeting was co-chaired by T Togsbilguun a director of the Department of Neighbour
Countries of Mongolialsquos Ministry of Foreign Affairs and by Xiao Jiangguo a representative of border
checkpoint and seaport affairs Both sides shared on ideas for implementation of the
intergovernmental contract on the border regime and reached some agreements on conducting a
joint examination in the border signs and on activating the collaboration in law enforcement around
frontier areas After this they discussed issues of developing border checkpoints at a same level
putting some border checkpoints into a permanent regime giving an international status to four
checkpoints
The gathered also made a protocol on their meeting and inked its results The next meeting will run
in 2014 in Ulaanbaatar
Source Montsame
BELARUS TO OPEN EMBASSY IN MONGOLIA IN 2014
Belarus will open its embassy in Mongolia in 2014 reads a resolution from the Belarus Council of
Ministers of the Republic of Belarus from 12 December 2013 Belaruslsquo Finance Ministry will finance
the costs of opening and maintaining Belarusian Embassy in Mongolia from the funds set aside in its
national budget for the opening and maintenance of diplomatic missions and consular missions of
the Republic of Belarus abroad
Source Belarusian Telegraph Agency
HOWELL NEW JERSEY USA BECOMES SISTER CITY OF SUKHBAATAR DISTRICT
The Howell Township and the Sukhbaatar district in Mongolia signed a memorandum of
understanding to create sister citieslsquo between Howell New Jersey USA and the Sukhbaatar District
on Tuesday
The program was aimed at opening up talks on how each can benefit from one another Mayor
William Gatto said Howell Township is a very diverse city and theyve taken the relationship with
the Kalmyk community here in Howell and expanded it to a country where they have had no
relationship in the past he said
The sister citieslsquo program will allow both Mongolia and Howell to exchange ideas and come up
with new and better ways to do things that benefits both cultures Outside of Mongolia Howell has
the largest population of Kalmyks in the world with many living in the Freewood Acres section of
the township Gatto said
Some of the goals of the agreement include promoting a common prosperity and development for
both parties an electronic pen-pal program and education opportunities for exchange students
Through a translator Baljinnyam Gan-erdene of the Citizens Representatives Council of Sukhbaatar
District said he came to Howell to see how democracy works in the United States
Im really glad and hope that this unforgettable and successful visit opens the door to our
friendship and prosperity between our residents Gan-erdene said
Gatto gave Gan-erdene a Howell flag and a throw blanket created by the Historical Society
depicting the history of the township Gan-erdene also gave Gatto several items including a bronze
piece of art
Source NJcom
MONGOLIAN CALLIGRAPHY ADDED TO UNESCO CULTURAL HERITAGE LIST
State Parties at the 8th Session of the Intergovernmental Committee for the Safeguarding of the
Intangible Cultural Heritage in Azerbaijan unanimously agreed to register Mongolian calligraphy as
an intangible cultural heritage in need of urgent safeguarding on 2 December
―Mongolian heritage calligraphy is now being recognized by the world and I am grateful on behalf
of my country for decision makers said Secretary-General of Mongolian National Commission for
UNESCO Gundegmaa Jargalsaikhan He noted that Mongolian calligraphy was the fifth cultural
heritage item of Mongolia to be listed and now stands among the Mongolian epic traditional folk
dance the traditional music Tsuur and a circular breathing technique
Mongolian calligraphy is a 1000-year-old writing system that vertically connects continuous strokes
together to create a word Letters of Mongolian script have been created and taught by nomads
from generation to generation During the 1937-1940 purges of the Soviet era thousands of tutors
and traditional scholars of the script were killed Those who remained alive were banned from
mentoring the younger generation Soon after that or around 1946 a new Cyrillic script was
adopted as the only eligible script therefore banning all the teachings of old Mongolian script and
Latin lettering Only in the 1970s was the old Mongolian script re-introduced to scholars allowing a
limited number of classes in universities
After the 1990 democratic changes along with the revival of Mongolian identity interest in
traditional calligraphy reawakened As a sign of such revival the very first non-communist political
organization the Democratic Union of Mongolia used folded calligraphy as its main logo
Source Info Mongolia
THOUGH IMPROVING MONGOLIA STILL REELING UNDER CORRUPTION
The third joint survey by the Asia Foundation and Sant Maral Foundation to gather data on the
perception of corruption in Mongolia revealed that efforts to curb corruption in what is considered
as one of the worldlsquos most corrupt countries could be having impact
The survey shows a significant drop in the percentage of respondents who believe corruption has
increased in the last three years from 389 percent in November 2012 to 183 percent currently In
contrast in 2006 a majority of respondents (63) indicated that corruption has increased ―a lot in
the last three years The survey also shows that corruption has declined in importance as a critical
social problem since 2006 Despite these positive signs overall respondents indicated that
corruption remains a serious issue in some specific key areas
Conducted in September of this year the survey featured face-to-face interviews in 1360
households across Mongolia including seven districts in Ulaanbaatar and 21 counties in six
provinces A majority (766) cited that widespread corruption in the law enforcement agencies is
one of the main reasons the government has been unable to tackle corruption effectively When
corruption is perceived to be this widespread the attention will obviously turn to the performance
of the apex anti-corruption body the Independent Authority Against Corruption (IAAC) The survey
shows that the IAAC is slowly but surely beginning to gain confidence among citizens The
percentage of those surveyed who think that its performance is ―good or ―very good increased
from 78 percent in March 2010 to 203 percent in March 2013 In September 2013 the result shows
a new high of 294 percent
Peoplelsquos perceptions on corruption are often shaped by personal experiences Although very few
respondents in the survey said that they had actually paid a bribe themselves (8 percent about a 3
percent drop from 2012 and an 18 percent drop since 2006) as noted before many are not willing
to report instances where they are asked for one Similarly 36 percent of respondents said they
would not pay a bribe but 26 percent indicated that they would pay if they had the financial
capability
Basanta Pokharel is The Asia Foundation‟s chief of party for the STAGE program in Mongolia He
can be reached at basantapokharelasiafoundationorg The views and opinions expressed here
are those of the individual author and not those of The Asia Foundation
Source Asia Foundation
MPP DEMANDS DISMISSAL OF MINISTERS
Mongolian Peoplelsquos Party Chairman N Enkhbold and party head S Byambatsogt submitted to the
Speaker a request for the dismissal Minister of Finance Chultem Ulaan and of Economic
Development Minister Nyamjav ―Fortuna Batbayar
Our faction believes that these ministers must be held responsible for the worsening of the
national economic situation We also intend to do the same with other ministers after hearing
opinions of people said Byambatsogt
Source Montsame
FORMER TAVAN TOLGOI JSC DIRECTOR ARRESTED
The Independent Agency Against Corruption arrested former Tavan Tolgoi JSC director Kh
Tumenbayar for undisclosed reasons
An unnamed official source suggested that the arrest may be related to abuses of power and
payments to political parties as well as the construction of a high-class hotel in Dalanzadgad Soum
Umnugobi Aimag Kh Tumenbayar is a member of the Democratic Party a member of Parliament
and is an associate of ―Ajnai Bat-Erdene the Minister of Defense who helped Tumenbayar attain
position as the director of Tavan Tolgoi for 6 years and rise to head of the Umnugobi Aimag Citizens
Council
Tumenbayar voluntarily resigned from his position at Tavan Tolgoi last month The IAAC has
reportedly not given details to the reasons for the investigation opened on Tumenbayar because of
possible connections to high-ranking officials
Source Unuudur
MONGOLIA TURKMENISTAN JOIN INTERNATIONAL RACING FEDERATION
The International Federation of Horseracing Authorities (IFHA) has welcomed racing organizations
from Mongolia and Turkmenistan as affiliate members
Recent ratification to IFHA statutes at its annual General Assembly in October created a new
affiliate membership category within the Federation Thus the Federation of Mongolia Horse Racing
Sport and Trainers and the Turkmen Atlary State Association by unanimous vote of the IFHA
Executive Council in Paris in October have become the IFHAlsquos first two affiliate members
The Federation of Mongolian Horse Racing Sport and Trainers (FMHRST) is a non-governmental
organization (NGO) which serves to the development of equestrian sport in Mongolia and works to
protect the rights of horsemen who specialize in this national sport The new affiliates were
announced by IFHA Chairman Louis Romanet this week and several key appointments to IFHA
executive office positions and committees have also been made
Source Horse Talk
MONGOL TV HEAD MEDIA CAN HELP FIX THE BIG PROBLEMS
Nomin Chinbat head of Mongol TV has grander intentions than just ridding the countrys television
business of rampant pirated content and unlicensed formats The young executive wants to help
clean up Mongolian politics and the nation by creating a free and open media
―The networks are used as propaganda channels for politicians They are used very effectively every
four years at election time says Chinbat whom the Source named one of the 25 Most Powerful
Women in Global TV at MIPCOM 2013
―There are laws against piracy but they arenlsquot implemented explains Chinbat who says that
politicians in the country of roughly three million wonlsquot challenge journalists because their
relationships with them are too cozy
Mongol TV has invested in original programming licenses all of its imported content and runs
investigative journalism features highlighting social problems such as alcoholism and corruption
The company is organizing a Mongol TV Day for February 2014 to which it has invited major
international studios to raise awareness of the issues and introduce the global industry to
Mongolia Britainlsquos ITV and Americalsquos CBS are already confirmed and negotiations are ongoing with
other attendees The situation has improved in recent years with some channels having become
what Chinbat calls ―hybrids which license some sports rights but then steal others and copy
formats
―These days some of these channels might license 25 episodes of a format and make 50 But this is
actually progress says Chinbat
Chinbat and her team were at the Asian Television Forum (ATF) in Singapore looking for new
formats that can be produced within the constraints of Mongolian television budgets However with
Mongolias young populationmdash65 percent of the country is under 35 years oldmdashmobile viewing is on
the rise and the network is already working second-screen utilization and new media applications
This demographic sweet spot should guarantee strong growth in the population economy and
nascent entertainment sector in Mongolia in the coming decades
Source Hollywood Reporter
ANNOUNCEMENTS
ldquoMM TODAYrdquo ON MNB-TV FRIDAY 1900 TO 1910
BCM is pleased to announce that Mongolian National Broadcasting continues its cooperation with
BCM on ―MM Today This English news program is aired every Friday for 10 minutes and is
scheduled from 1900 to 1910 tonight Tune in to watch this program that reports stories from
todaylsquos BCM NewsWire
BCM WEBSITES
MONGOLIAN WEBSITE bdquoPRESENTATIONS‟ AND bdquoNEWS‟ SECTIONS
The Presentationslsquo section on BCMlsquos Mongolian website can be reached via bcmmnitgeluud
As a key component of BCMlsquos Mongolian website articles from the Newslsquo section and the
government website Open-Governmentmn are regularly updated
S Oyun Minister of Environment and Green Development presentation at BCM monthly meeting on
May 27 added to Mongolian website bcmongoliaorgmnилтгэлүүд
- Байгаль орчин ногоон хөгжлийн сайд СОюун Байгаль орчин ногоон хөгжлийн шинэчлэлийн
бодлого үйл ажиллагаа МБЗ-ийн сарын уулзалт 5 сарын 27 2013
___________________________________________
ENGLISH WEBSITE PRESENTATIONS MONGOLIA REPORTS bdquoINTERVIEWSbdquo MONGOLIAN
BUSINESS NEWS‟ bdquoPHOTO GALLERY‟
The following 13 presentations are from the Mongolia Investment Summit- 2013 in Hong Kong
November 18-20
- Regulatory Update Navigating Mongolialsquos legal framework for foreign direct investment
Javkhlanbaatar Sereeter Director General Foreign Investment Regulations and Registration
Department MINISTRY OF ECONOMIC DEVELOPMENT OF MONGOLIA
- Investment keynote Investing into Mongolia in 2013 ndash Where do the opportunities lie James
Passin Co-Founder and Manager FIREBIRD MONGOLIA FUND
- Development keynote Key challenges and opportunities for continued growth in Mongolia
Randolph Koppa President TRADE AND DEVELOPMENT BANK OF MONGOLIA
- Outlining government policies and long-term plans for Mongolialsquos mining sector Amarjargal
Khurelbat Head of International Cooperation Division MINISTRY OF MINING OF MONGOLIA
- From copper to met coal Demand and price outlook and expected impact on Mongolialsquos economy
Ghee Peh Managing Director Metals and Mining Research UBS SECURITIES ASIA
- How Mongolian banks and financial institutions are dealing with the challenges and opportunities
of a fast growing economy Norihiko Kato Chief Executive Officer KHAN BANK
- Update on the Mongolian stock market ndash Impact of the new Securities Law Altai Khangai Chief
Executive Officer MONGOLIAN STOCK EXCHANGE
- From investment banking to trade finance to micro credits to insurance Amartuvshin Hanibal
Managing Director TENGER FINANCIAL GROUP LLC
- Spotlight presentations Showcasing Mongolian investment opportunities Peter Morrow Board
Director ASIA PACIFIC INVESTMENT PARTNERS
- Spotlight presentation Showcasing Mongolian investment opportunities Munkhbat Davaatseren
CEO of Golomt Securities GOLOMT BANK
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources
Batmunkh Batkhuu Chairman SHARYN GOL JSC
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources
Jimmie Wilde Chief Operating Officer BERKH UUL JSC
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources Mona
Forster Executive VP ENTREacuteE GOLD INC
The following two presentations are from the ―ANTI-CORRUPTION LEGISLATIONPOLICY
INTERNATIONAL BEST PRACTICE ON TRANSPARENCY training seminar for businesses in
Ulaanbaatar November 18 2013
-―International business standard on transparency by Jelena Pesic Director PwC
-―Finlandlsquos best practice on transparency and anti corruption by Dr Pekka Hallberg (as it is
worldlsquos number one) Emeritus President of the Supreme Administrative Court of Finland
The following 15 presentations are from the Mongolia Mining Summit Perth Australia October 29-
31 2013
bull Mongolialsquos Minerals Future and Development by Otgochuluu Ch Director General Department of
strategic policy and planning at Ministry of Mining Mongolia at the Mongolian Mining Summit 2013
Perth Australia Oct 29-31 2013
bull Mongolian Economy Investment OpportunitiesChallenges Jim Dwyer Executive Director
Business Council of Mongolia at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31
2013
bull Oyu Tolgoi Lessons from the Gobi Houston Spencer Vice President Communications and Media
Relations Oyu Tolgoi at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Market dynamics for Mongolian coking coal in the Chinese market Graeme Hancock President
and Chief Representative at Anglo American Mongolia at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Speech by Mr Ariunbold Byamba Deputy Director Erdenes MGL LLC at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull Launching Mining Projects in MongoliandashA Major Contractorlsquos Perspective Eric Erdenebat
Tseveendorj Country Manager Orica Limited at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Investing in a dynamic legislative environment Elisabeth Ellis Managing Partner Ulaanbaatar
Minter Ellison at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Sandvik In Pit Crushing amp Conveying (IPCC) Doug Turnbull Principal Mining Engineer Sandvik
Mining Systems at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Ovoot Coking Coal Project David Paull Managing Director Aspire Mining at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull The business of being a third neighbor David Landers General Manager East Asian Growth
Markets at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Nuurst Thermal Coal Project Daniel Rohr Chief Financial Officer Modun Resources Ltd at the
Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Culture matters in building sustainable long-term business relationships Hana Tserenkhand
Byambadash Business Development Consultant AusMon Consulting and Dr Christine Hogan Adjunct
Professor Curtin University Consultant amp Author at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Maximizing Business Benefits from Your IT Investment Brad Skeggs Executive Director COSOL at
the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Presentation by Battsengel Gotov CEO Mongolian Mining Corporation at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull Mongolian Mining Sector Present and Future Developments NAlgaa Executive Director
Mongolian National Mining Association at the Mongolian Mining Summit 2013 Perth Australia Oct
29-31 2013
The ―Mongolia Reports section includes the following
- ―Ministry of Finance of Mongolia 2013 Government Debt Auctions by Bank of Mongolia
- ―Doing Business in Mongolia 2013 Country Commercial Guide for US Companies by US
Embassy
- ―Real Estate Report 2013 by Mongolian Properties
- ―Selected Macroeconomic Indicators November 20 2013 by International Monetary Fund
- ―2013 Second Annual Mongolian CEO Survey from PricewaterhouseCoopers Audit LLC
- ―Selected Macroeconomic Indicators data through October 16 2013 by International Monetary
Fund
- ―IMF Completes 2013 Article IV Mission to Mongolia by International Monetary Fund
The following are added to Interview Section from the Oxford Business Group Mongolia Reports
2013 book
bull B Byambasaikhan Chairman Business Council of Mongolia ―Talk is cheap
bull President Ts Elbegdorj ―Diversifying for growth
bull Jim Dwyer Executive Director Business Council of Mongolia ―Non-mining sectors budding
bull Peter Morrow Chairman American University of Mongolia ―Filling in the blanks
bull N Zoljargal Governor Bank of Mongolia ―Sustainable vision
bull Gansukh Minister of Roads and Transportation ―Accessing new markets
bull J Od President MCS Group ―Building interest
bull B Chuluunbaatar President and CEO of Monnis Group ―Climbing the ranks
bull Cameron McRae President and CEO Oyu Tolgoi ―Sitting on a copper mine
BCMs English website includes the ―Mongolia Business News section where the Open Letter to
Parliament and Government is available for download
BCM continuously posts news stories and analysis of relevance to Mongolia at Mongolian Business
News before they are all put together each week for Fridays weekly NewsWire
The ―Photo Gallery contains photos from the 6th Anniversary BCM Renewal dinner on November
11 2013
BCM Football Cup 2013 pictures are posted to the website - httpbcmongoliaorgenphotos350-
enalbumalbumid=200
The BCM NewsWire will continue to be issued each Friday incorporating items already on the home
page for a consolidated account of the weeklsquos events
SOCIAL NETWORK WITH BCM
BCM LAUNCHES NEW LINKED-IN COMPANY PAGE
The Business Council of Mongolia has launched a new company page on the social networking
website LinkedIn to network its members and followers including small-medium enterprises (SMEs)
The new page will allow BCM to alert followers to the latest news and information critical to their
businesses Memberslsquo businesses will be promoted Additionally BCM plans to deliver monthly
infographics on the latest data as well as videos and other media content as they come The bulk of
the content on the new page will be in Mongolian language to better cater to BCMs Mongolian-
speaking audience and members The following link can direct you to the New BCMs Linked-in page
httpwwwlinkedincomcompanybusiness-council-of-mongoliatrk=company_logo
The Business Council of Mongolia (BCM) has expanded its reach to your favorite social networks
Keep up to date on the latest business deals in Mongolia and how the climate for investment is
improving each day with BCM
Add BCM on Facebook at httpswwwfacebookcomTheBusinessCouncilOfMongolia to read the
latest announcements and comment on events carried in the NewsWire with the community
Hear breaking news and announcements as they happen when you follow BCM on Twitter at
httpstwittercombcmongolia
We have now 2482 fans on our Facebook fans page 1527 connections on LinkedIn network and
835 followers on Twitter
Of course for news information interviews event photos and announcements regarding our
organization visit the official BCM website at httpbcmongoliaorgen
ECONOMIC INDICATORS
INFLATION
Year 2006 60 [source National Statistical Office of Mongolia (NSOM)]
Year 2007 151 [source NSOM]
Year 2008 221 [source NSOM]
Year 2009 42 [source NSOM]
Year 2010 130 [source NSOM]
Year 2011 102 [source NSOM]
November 30 2013 120 [source NSOM]
Year-over-year (y-o-y) nationwide
Note 111 y-o-y Ulaanbaatar city November 30 2013
CENTRAL BANK POLICY LOAN RATE
December 31 2008 975 [source IMF]
March 11 2009 1400 [source IMF]
May 12 2009 1275 [source IMF]
June 12 2009 1150 [source IMF]
September 30 2009 1000 [source IMF]
May 12 2010 1100 [source IMF]
April 28 2011 1150 [source IMF]
August 25 2011 1175 [source IMF]
October 25 2011 1225 [source IMF]
March 19 2012 1275 [source Mongol Bank]
April 18 2012 1325 [source Mongol Bank]
January 25 2013 1250 [source Mongol Bank]
April 8 2013 1150 [source Mongol Bank]
June 25 2013 1050 [source Mongol Bank]
CURRENCY RATES ndash DECEMBER 19 2013
Currency Name Currency Rate
US dollar USD 164138
Euro EUR 224680
Japanese yen JPY 1579
British pound GBP 268874
Hong Kong dollar HKD 21170
Chinese Yuan CNY 27031
Russian Ruble RUB 4981
South Korean won KRW 155
Disclaimer Except for reporting on BCMlsquos activities all information in the BCM NewsWire is
selected from various news sources Opinions are those of the respective news sources
Democratic Party members discussed a draft resolution and proposed amendments submitted by the
president for the new restriction at a party meeting on Monday The draft amendments were
unanimously backed by the faction The Justice Coalition which includes the Monglian Peoples
Revolutionary Party and Mongolian Democratic Party came to the same conclusion following its own
meeting said coalition head N Battsereg on Monday
Source Montsame
COMMITTEE LEADERS TO BE ELECTED THIS MONTH
The coalition government will soon be electing officials to lead the various committees in
government
Parliament has 8 standing committees to elect leaders to this month with each committee to be
led by a representative of the coalition government Current committee heads are Ts Tsolmon at
the Security and Foreign Policy Committee G Bayarsaikhan at the Environment Food and
Agriculture Committee Z Bayanselenge at the Social Policy Education Culture and Science
Committee R Burmaa at the Petition and Requests Committee A Bakei at the State Structural
Committee Ts Davaasuren at the Budget Committee Sh Tuvdendorj at the Legislation
Committee and B Garamgaibaatar at the Economic Committee
Source Zuunii Medee
FOREIGN CURRENCY PAYMENTS BANNED FOR MININGEXPLORATION LICENSING FEES
The Ministry of Finance has banned the use of foreign currencies to pay for mining and exploration
licensing fees to the Mineral Resources Authority beginning 1 January 2014
The Ministry of Finance has prompted these entities and companies holding licenses to comply with
Mongolian currency law that states that all businesses and agencies must do business in Mongolian
tugrug According to the 2009 law transactions must not be carried out in foreign denominated or
foreign currency based rates
Source Newsmn
MINING MINISTRY TO COOPERATE WITH ASSOCIATION OF FLUORSPAR EXPLORERS
The Ministry of Mining Wednesday established a memorandum of mutual understanding with the
Association of Fluorspar Explorers (AFE) to cooperate in augmenting the countrylsquos export
In addition to expanding export goals include developing transparent and responsible mining
improving qualities and standards of fluorspar metallurgy and flotation concentrate and in
increasing the production output of the minerallsquos ore enrichment The hope is the memorandum
will create a launching point for a national program for fluorspar its exploitation increase the
volume of production by intensifying research and increase competitiveness in international
markets It will also be necessary to introduce the latest technology to the country along with
running joint trainings with foreign NGOs the Ministry said
Source Montsame
DP REJECTS AMARJARGAL‟S RESIGNATION
Parliament voted against MP R Amarjargallsquos resignation request on 12 December
During Tuesdaylsquos meeting the majority of the Standing Committee on State Structure voted against
Amarjargal`s resignation The head of the Democratic Party (DP) caucus D Erdenebat took a
strong stance against letting Amarjargal leave
Amarjargal said he wanted to resign to take responsibility on behalf of his party members for the
current political situation and economic restraints in Mongolia DP members agree with his
conclusion but encourage him to make the effort and participate for social change and
development Members of the opposition Mongolian Peoplelsquos Party members said that Amarjargal
could see the problems and nature of the majority of Parliament and praised his plan to resign
Source Newsmn
MPP HEAD TO STEP DOWN
Mongolian People Party (MPP) Head N Enkhbold has requested his resignation as party leader
MPP Deputy Head D Oyunkhorol said 9 December that Enkhbold submitted his request to step down
during a party meeting Oyunkhorol said Enkhboldlsquos resignation was due to personal reasons The
new party head will be appointed by the MPPs governing board
Source Udriin Sonin
FIFTH ROUND OF NEGOTIATIONS FOR THE JAPAN-MONGOLIA ECONOMIC PARTNERSHIP
AGREEMENT
The fifth round of the negotiations for the Japan-Mongolia Economic Partnership Agreement (EPA)
will be held from 16 to 19 December in Ulaanbaatar
The Japanese delegation will be led by Jun Yokota ambassador in charge of economic diplomacy
and the Mongolian delegation will be led by Ochirbat Chuluunbat vice minister for economic
development Experts from relevant ministries and agencies of both sides will participate in the
meetings
In this round negotiations are in areas including trade in goods and investment
Source 4-Traderscom
FIRST MONGOLIA-CHINA JOINT BORDER COMMISSION MEETING IN BEIJING
The very first meeting of Mongolia-China joint commission of borders took place 11 and 12
December in Beijing China
This meeting was co-chaired by T Togsbilguun a director of the Department of Neighbour
Countries of Mongolialsquos Ministry of Foreign Affairs and by Xiao Jiangguo a representative of border
checkpoint and seaport affairs Both sides shared on ideas for implementation of the
intergovernmental contract on the border regime and reached some agreements on conducting a
joint examination in the border signs and on activating the collaboration in law enforcement around
frontier areas After this they discussed issues of developing border checkpoints at a same level
putting some border checkpoints into a permanent regime giving an international status to four
checkpoints
The gathered also made a protocol on their meeting and inked its results The next meeting will run
in 2014 in Ulaanbaatar
Source Montsame
BELARUS TO OPEN EMBASSY IN MONGOLIA IN 2014
Belarus will open its embassy in Mongolia in 2014 reads a resolution from the Belarus Council of
Ministers of the Republic of Belarus from 12 December 2013 Belaruslsquo Finance Ministry will finance
the costs of opening and maintaining Belarusian Embassy in Mongolia from the funds set aside in its
national budget for the opening and maintenance of diplomatic missions and consular missions of
the Republic of Belarus abroad
Source Belarusian Telegraph Agency
HOWELL NEW JERSEY USA BECOMES SISTER CITY OF SUKHBAATAR DISTRICT
The Howell Township and the Sukhbaatar district in Mongolia signed a memorandum of
understanding to create sister citieslsquo between Howell New Jersey USA and the Sukhbaatar District
on Tuesday
The program was aimed at opening up talks on how each can benefit from one another Mayor
William Gatto said Howell Township is a very diverse city and theyve taken the relationship with
the Kalmyk community here in Howell and expanded it to a country where they have had no
relationship in the past he said
The sister citieslsquo program will allow both Mongolia and Howell to exchange ideas and come up
with new and better ways to do things that benefits both cultures Outside of Mongolia Howell has
the largest population of Kalmyks in the world with many living in the Freewood Acres section of
the township Gatto said
Some of the goals of the agreement include promoting a common prosperity and development for
both parties an electronic pen-pal program and education opportunities for exchange students
Through a translator Baljinnyam Gan-erdene of the Citizens Representatives Council of Sukhbaatar
District said he came to Howell to see how democracy works in the United States
Im really glad and hope that this unforgettable and successful visit opens the door to our
friendship and prosperity between our residents Gan-erdene said
Gatto gave Gan-erdene a Howell flag and a throw blanket created by the Historical Society
depicting the history of the township Gan-erdene also gave Gatto several items including a bronze
piece of art
Source NJcom
MONGOLIAN CALLIGRAPHY ADDED TO UNESCO CULTURAL HERITAGE LIST
State Parties at the 8th Session of the Intergovernmental Committee for the Safeguarding of the
Intangible Cultural Heritage in Azerbaijan unanimously agreed to register Mongolian calligraphy as
an intangible cultural heritage in need of urgent safeguarding on 2 December
―Mongolian heritage calligraphy is now being recognized by the world and I am grateful on behalf
of my country for decision makers said Secretary-General of Mongolian National Commission for
UNESCO Gundegmaa Jargalsaikhan He noted that Mongolian calligraphy was the fifth cultural
heritage item of Mongolia to be listed and now stands among the Mongolian epic traditional folk
dance the traditional music Tsuur and a circular breathing technique
Mongolian calligraphy is a 1000-year-old writing system that vertically connects continuous strokes
together to create a word Letters of Mongolian script have been created and taught by nomads
from generation to generation During the 1937-1940 purges of the Soviet era thousands of tutors
and traditional scholars of the script were killed Those who remained alive were banned from
mentoring the younger generation Soon after that or around 1946 a new Cyrillic script was
adopted as the only eligible script therefore banning all the teachings of old Mongolian script and
Latin lettering Only in the 1970s was the old Mongolian script re-introduced to scholars allowing a
limited number of classes in universities
After the 1990 democratic changes along with the revival of Mongolian identity interest in
traditional calligraphy reawakened As a sign of such revival the very first non-communist political
organization the Democratic Union of Mongolia used folded calligraphy as its main logo
Source Info Mongolia
THOUGH IMPROVING MONGOLIA STILL REELING UNDER CORRUPTION
The third joint survey by the Asia Foundation and Sant Maral Foundation to gather data on the
perception of corruption in Mongolia revealed that efforts to curb corruption in what is considered
as one of the worldlsquos most corrupt countries could be having impact
The survey shows a significant drop in the percentage of respondents who believe corruption has
increased in the last three years from 389 percent in November 2012 to 183 percent currently In
contrast in 2006 a majority of respondents (63) indicated that corruption has increased ―a lot in
the last three years The survey also shows that corruption has declined in importance as a critical
social problem since 2006 Despite these positive signs overall respondents indicated that
corruption remains a serious issue in some specific key areas
Conducted in September of this year the survey featured face-to-face interviews in 1360
households across Mongolia including seven districts in Ulaanbaatar and 21 counties in six
provinces A majority (766) cited that widespread corruption in the law enforcement agencies is
one of the main reasons the government has been unable to tackle corruption effectively When
corruption is perceived to be this widespread the attention will obviously turn to the performance
of the apex anti-corruption body the Independent Authority Against Corruption (IAAC) The survey
shows that the IAAC is slowly but surely beginning to gain confidence among citizens The
percentage of those surveyed who think that its performance is ―good or ―very good increased
from 78 percent in March 2010 to 203 percent in March 2013 In September 2013 the result shows
a new high of 294 percent
Peoplelsquos perceptions on corruption are often shaped by personal experiences Although very few
respondents in the survey said that they had actually paid a bribe themselves (8 percent about a 3
percent drop from 2012 and an 18 percent drop since 2006) as noted before many are not willing
to report instances where they are asked for one Similarly 36 percent of respondents said they
would not pay a bribe but 26 percent indicated that they would pay if they had the financial
capability
Basanta Pokharel is The Asia Foundation‟s chief of party for the STAGE program in Mongolia He
can be reached at basantapokharelasiafoundationorg The views and opinions expressed here
are those of the individual author and not those of The Asia Foundation
Source Asia Foundation
MPP DEMANDS DISMISSAL OF MINISTERS
Mongolian Peoplelsquos Party Chairman N Enkhbold and party head S Byambatsogt submitted to the
Speaker a request for the dismissal Minister of Finance Chultem Ulaan and of Economic
Development Minister Nyamjav ―Fortuna Batbayar
Our faction believes that these ministers must be held responsible for the worsening of the
national economic situation We also intend to do the same with other ministers after hearing
opinions of people said Byambatsogt
Source Montsame
FORMER TAVAN TOLGOI JSC DIRECTOR ARRESTED
The Independent Agency Against Corruption arrested former Tavan Tolgoi JSC director Kh
Tumenbayar for undisclosed reasons
An unnamed official source suggested that the arrest may be related to abuses of power and
payments to political parties as well as the construction of a high-class hotel in Dalanzadgad Soum
Umnugobi Aimag Kh Tumenbayar is a member of the Democratic Party a member of Parliament
and is an associate of ―Ajnai Bat-Erdene the Minister of Defense who helped Tumenbayar attain
position as the director of Tavan Tolgoi for 6 years and rise to head of the Umnugobi Aimag Citizens
Council
Tumenbayar voluntarily resigned from his position at Tavan Tolgoi last month The IAAC has
reportedly not given details to the reasons for the investigation opened on Tumenbayar because of
possible connections to high-ranking officials
Source Unuudur
MONGOLIA TURKMENISTAN JOIN INTERNATIONAL RACING FEDERATION
The International Federation of Horseracing Authorities (IFHA) has welcomed racing organizations
from Mongolia and Turkmenistan as affiliate members
Recent ratification to IFHA statutes at its annual General Assembly in October created a new
affiliate membership category within the Federation Thus the Federation of Mongolia Horse Racing
Sport and Trainers and the Turkmen Atlary State Association by unanimous vote of the IFHA
Executive Council in Paris in October have become the IFHAlsquos first two affiliate members
The Federation of Mongolian Horse Racing Sport and Trainers (FMHRST) is a non-governmental
organization (NGO) which serves to the development of equestrian sport in Mongolia and works to
protect the rights of horsemen who specialize in this national sport The new affiliates were
announced by IFHA Chairman Louis Romanet this week and several key appointments to IFHA
executive office positions and committees have also been made
Source Horse Talk
MONGOL TV HEAD MEDIA CAN HELP FIX THE BIG PROBLEMS
Nomin Chinbat head of Mongol TV has grander intentions than just ridding the countrys television
business of rampant pirated content and unlicensed formats The young executive wants to help
clean up Mongolian politics and the nation by creating a free and open media
―The networks are used as propaganda channels for politicians They are used very effectively every
four years at election time says Chinbat whom the Source named one of the 25 Most Powerful
Women in Global TV at MIPCOM 2013
―There are laws against piracy but they arenlsquot implemented explains Chinbat who says that
politicians in the country of roughly three million wonlsquot challenge journalists because their
relationships with them are too cozy
Mongol TV has invested in original programming licenses all of its imported content and runs
investigative journalism features highlighting social problems such as alcoholism and corruption
The company is organizing a Mongol TV Day for February 2014 to which it has invited major
international studios to raise awareness of the issues and introduce the global industry to
Mongolia Britainlsquos ITV and Americalsquos CBS are already confirmed and negotiations are ongoing with
other attendees The situation has improved in recent years with some channels having become
what Chinbat calls ―hybrids which license some sports rights but then steal others and copy
formats
―These days some of these channels might license 25 episodes of a format and make 50 But this is
actually progress says Chinbat
Chinbat and her team were at the Asian Television Forum (ATF) in Singapore looking for new
formats that can be produced within the constraints of Mongolian television budgets However with
Mongolias young populationmdash65 percent of the country is under 35 years oldmdashmobile viewing is on
the rise and the network is already working second-screen utilization and new media applications
This demographic sweet spot should guarantee strong growth in the population economy and
nascent entertainment sector in Mongolia in the coming decades
Source Hollywood Reporter
ANNOUNCEMENTS
ldquoMM TODAYrdquo ON MNB-TV FRIDAY 1900 TO 1910
BCM is pleased to announce that Mongolian National Broadcasting continues its cooperation with
BCM on ―MM Today This English news program is aired every Friday for 10 minutes and is
scheduled from 1900 to 1910 tonight Tune in to watch this program that reports stories from
todaylsquos BCM NewsWire
BCM WEBSITES
MONGOLIAN WEBSITE bdquoPRESENTATIONS‟ AND bdquoNEWS‟ SECTIONS
The Presentationslsquo section on BCMlsquos Mongolian website can be reached via bcmmnitgeluud
As a key component of BCMlsquos Mongolian website articles from the Newslsquo section and the
government website Open-Governmentmn are regularly updated
S Oyun Minister of Environment and Green Development presentation at BCM monthly meeting on
May 27 added to Mongolian website bcmongoliaorgmnилтгэлүүд
- Байгаль орчин ногоон хөгжлийн сайд СОюун Байгаль орчин ногоон хөгжлийн шинэчлэлийн
бодлого үйл ажиллагаа МБЗ-ийн сарын уулзалт 5 сарын 27 2013
___________________________________________
ENGLISH WEBSITE PRESENTATIONS MONGOLIA REPORTS bdquoINTERVIEWSbdquo MONGOLIAN
BUSINESS NEWS‟ bdquoPHOTO GALLERY‟
The following 13 presentations are from the Mongolia Investment Summit- 2013 in Hong Kong
November 18-20
- Regulatory Update Navigating Mongolialsquos legal framework for foreign direct investment
Javkhlanbaatar Sereeter Director General Foreign Investment Regulations and Registration
Department MINISTRY OF ECONOMIC DEVELOPMENT OF MONGOLIA
- Investment keynote Investing into Mongolia in 2013 ndash Where do the opportunities lie James
Passin Co-Founder and Manager FIREBIRD MONGOLIA FUND
- Development keynote Key challenges and opportunities for continued growth in Mongolia
Randolph Koppa President TRADE AND DEVELOPMENT BANK OF MONGOLIA
- Outlining government policies and long-term plans for Mongolialsquos mining sector Amarjargal
Khurelbat Head of International Cooperation Division MINISTRY OF MINING OF MONGOLIA
- From copper to met coal Demand and price outlook and expected impact on Mongolialsquos economy
Ghee Peh Managing Director Metals and Mining Research UBS SECURITIES ASIA
- How Mongolian banks and financial institutions are dealing with the challenges and opportunities
of a fast growing economy Norihiko Kato Chief Executive Officer KHAN BANK
- Update on the Mongolian stock market ndash Impact of the new Securities Law Altai Khangai Chief
Executive Officer MONGOLIAN STOCK EXCHANGE
- From investment banking to trade finance to micro credits to insurance Amartuvshin Hanibal
Managing Director TENGER FINANCIAL GROUP LLC
- Spotlight presentations Showcasing Mongolian investment opportunities Peter Morrow Board
Director ASIA PACIFIC INVESTMENT PARTNERS
- Spotlight presentation Showcasing Mongolian investment opportunities Munkhbat Davaatseren
CEO of Golomt Securities GOLOMT BANK
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources
Batmunkh Batkhuu Chairman SHARYN GOL JSC
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources
Jimmie Wilde Chief Operating Officer BERKH UUL JSC
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources Mona
Forster Executive VP ENTREacuteE GOLD INC
The following two presentations are from the ―ANTI-CORRUPTION LEGISLATIONPOLICY
INTERNATIONAL BEST PRACTICE ON TRANSPARENCY training seminar for businesses in
Ulaanbaatar November 18 2013
-―International business standard on transparency by Jelena Pesic Director PwC
-―Finlandlsquos best practice on transparency and anti corruption by Dr Pekka Hallberg (as it is
worldlsquos number one) Emeritus President of the Supreme Administrative Court of Finland
The following 15 presentations are from the Mongolia Mining Summit Perth Australia October 29-
31 2013
bull Mongolialsquos Minerals Future and Development by Otgochuluu Ch Director General Department of
strategic policy and planning at Ministry of Mining Mongolia at the Mongolian Mining Summit 2013
Perth Australia Oct 29-31 2013
bull Mongolian Economy Investment OpportunitiesChallenges Jim Dwyer Executive Director
Business Council of Mongolia at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31
2013
bull Oyu Tolgoi Lessons from the Gobi Houston Spencer Vice President Communications and Media
Relations Oyu Tolgoi at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Market dynamics for Mongolian coking coal in the Chinese market Graeme Hancock President
and Chief Representative at Anglo American Mongolia at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Speech by Mr Ariunbold Byamba Deputy Director Erdenes MGL LLC at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull Launching Mining Projects in MongoliandashA Major Contractorlsquos Perspective Eric Erdenebat
Tseveendorj Country Manager Orica Limited at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Investing in a dynamic legislative environment Elisabeth Ellis Managing Partner Ulaanbaatar
Minter Ellison at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Sandvik In Pit Crushing amp Conveying (IPCC) Doug Turnbull Principal Mining Engineer Sandvik
Mining Systems at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Ovoot Coking Coal Project David Paull Managing Director Aspire Mining at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull The business of being a third neighbor David Landers General Manager East Asian Growth
Markets at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Nuurst Thermal Coal Project Daniel Rohr Chief Financial Officer Modun Resources Ltd at the
Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Culture matters in building sustainable long-term business relationships Hana Tserenkhand
Byambadash Business Development Consultant AusMon Consulting and Dr Christine Hogan Adjunct
Professor Curtin University Consultant amp Author at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Maximizing Business Benefits from Your IT Investment Brad Skeggs Executive Director COSOL at
the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Presentation by Battsengel Gotov CEO Mongolian Mining Corporation at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull Mongolian Mining Sector Present and Future Developments NAlgaa Executive Director
Mongolian National Mining Association at the Mongolian Mining Summit 2013 Perth Australia Oct
29-31 2013
The ―Mongolia Reports section includes the following
- ―Ministry of Finance of Mongolia 2013 Government Debt Auctions by Bank of Mongolia
- ―Doing Business in Mongolia 2013 Country Commercial Guide for US Companies by US
Embassy
- ―Real Estate Report 2013 by Mongolian Properties
- ―Selected Macroeconomic Indicators November 20 2013 by International Monetary Fund
- ―2013 Second Annual Mongolian CEO Survey from PricewaterhouseCoopers Audit LLC
- ―Selected Macroeconomic Indicators data through October 16 2013 by International Monetary
Fund
- ―IMF Completes 2013 Article IV Mission to Mongolia by International Monetary Fund
The following are added to Interview Section from the Oxford Business Group Mongolia Reports
2013 book
bull B Byambasaikhan Chairman Business Council of Mongolia ―Talk is cheap
bull President Ts Elbegdorj ―Diversifying for growth
bull Jim Dwyer Executive Director Business Council of Mongolia ―Non-mining sectors budding
bull Peter Morrow Chairman American University of Mongolia ―Filling in the blanks
bull N Zoljargal Governor Bank of Mongolia ―Sustainable vision
bull Gansukh Minister of Roads and Transportation ―Accessing new markets
bull J Od President MCS Group ―Building interest
bull B Chuluunbaatar President and CEO of Monnis Group ―Climbing the ranks
bull Cameron McRae President and CEO Oyu Tolgoi ―Sitting on a copper mine
BCMs English website includes the ―Mongolia Business News section where the Open Letter to
Parliament and Government is available for download
BCM continuously posts news stories and analysis of relevance to Mongolia at Mongolian Business
News before they are all put together each week for Fridays weekly NewsWire
The ―Photo Gallery contains photos from the 6th Anniversary BCM Renewal dinner on November
11 2013
BCM Football Cup 2013 pictures are posted to the website - httpbcmongoliaorgenphotos350-
enalbumalbumid=200
The BCM NewsWire will continue to be issued each Friday incorporating items already on the home
page for a consolidated account of the weeklsquos events
SOCIAL NETWORK WITH BCM
BCM LAUNCHES NEW LINKED-IN COMPANY PAGE
The Business Council of Mongolia has launched a new company page on the social networking
website LinkedIn to network its members and followers including small-medium enterprises (SMEs)
The new page will allow BCM to alert followers to the latest news and information critical to their
businesses Memberslsquo businesses will be promoted Additionally BCM plans to deliver monthly
infographics on the latest data as well as videos and other media content as they come The bulk of
the content on the new page will be in Mongolian language to better cater to BCMs Mongolian-
speaking audience and members The following link can direct you to the New BCMs Linked-in page
httpwwwlinkedincomcompanybusiness-council-of-mongoliatrk=company_logo
The Business Council of Mongolia (BCM) has expanded its reach to your favorite social networks
Keep up to date on the latest business deals in Mongolia and how the climate for investment is
improving each day with BCM
Add BCM on Facebook at httpswwwfacebookcomTheBusinessCouncilOfMongolia to read the
latest announcements and comment on events carried in the NewsWire with the community
Hear breaking news and announcements as they happen when you follow BCM on Twitter at
httpstwittercombcmongolia
We have now 2482 fans on our Facebook fans page 1527 connections on LinkedIn network and
835 followers on Twitter
Of course for news information interviews event photos and announcements regarding our
organization visit the official BCM website at httpbcmongoliaorgen
ECONOMIC INDICATORS
INFLATION
Year 2006 60 [source National Statistical Office of Mongolia (NSOM)]
Year 2007 151 [source NSOM]
Year 2008 221 [source NSOM]
Year 2009 42 [source NSOM]
Year 2010 130 [source NSOM]
Year 2011 102 [source NSOM]
November 30 2013 120 [source NSOM]
Year-over-year (y-o-y) nationwide
Note 111 y-o-y Ulaanbaatar city November 30 2013
CENTRAL BANK POLICY LOAN RATE
December 31 2008 975 [source IMF]
March 11 2009 1400 [source IMF]
May 12 2009 1275 [source IMF]
June 12 2009 1150 [source IMF]
September 30 2009 1000 [source IMF]
May 12 2010 1100 [source IMF]
April 28 2011 1150 [source IMF]
August 25 2011 1175 [source IMF]
October 25 2011 1225 [source IMF]
March 19 2012 1275 [source Mongol Bank]
April 18 2012 1325 [source Mongol Bank]
January 25 2013 1250 [source Mongol Bank]
April 8 2013 1150 [source Mongol Bank]
June 25 2013 1050 [source Mongol Bank]
CURRENCY RATES ndash DECEMBER 19 2013
Currency Name Currency Rate
US dollar USD 164138
Euro EUR 224680
Japanese yen JPY 1579
British pound GBP 268874
Hong Kong dollar HKD 21170
Chinese Yuan CNY 27031
Russian Ruble RUB 4981
South Korean won KRW 155
Disclaimer Except for reporting on BCMlsquos activities all information in the BCM NewsWire is
selected from various news sources Opinions are those of the respective news sources
MPP HEAD TO STEP DOWN
Mongolian People Party (MPP) Head N Enkhbold has requested his resignation as party leader
MPP Deputy Head D Oyunkhorol said 9 December that Enkhbold submitted his request to step down
during a party meeting Oyunkhorol said Enkhboldlsquos resignation was due to personal reasons The
new party head will be appointed by the MPPs governing board
Source Udriin Sonin
FIFTH ROUND OF NEGOTIATIONS FOR THE JAPAN-MONGOLIA ECONOMIC PARTNERSHIP
AGREEMENT
The fifth round of the negotiations for the Japan-Mongolia Economic Partnership Agreement (EPA)
will be held from 16 to 19 December in Ulaanbaatar
The Japanese delegation will be led by Jun Yokota ambassador in charge of economic diplomacy
and the Mongolian delegation will be led by Ochirbat Chuluunbat vice minister for economic
development Experts from relevant ministries and agencies of both sides will participate in the
meetings
In this round negotiations are in areas including trade in goods and investment
Source 4-Traderscom
FIRST MONGOLIA-CHINA JOINT BORDER COMMISSION MEETING IN BEIJING
The very first meeting of Mongolia-China joint commission of borders took place 11 and 12
December in Beijing China
This meeting was co-chaired by T Togsbilguun a director of the Department of Neighbour
Countries of Mongolialsquos Ministry of Foreign Affairs and by Xiao Jiangguo a representative of border
checkpoint and seaport affairs Both sides shared on ideas for implementation of the
intergovernmental contract on the border regime and reached some agreements on conducting a
joint examination in the border signs and on activating the collaboration in law enforcement around
frontier areas After this they discussed issues of developing border checkpoints at a same level
putting some border checkpoints into a permanent regime giving an international status to four
checkpoints
The gathered also made a protocol on their meeting and inked its results The next meeting will run
in 2014 in Ulaanbaatar
Source Montsame
BELARUS TO OPEN EMBASSY IN MONGOLIA IN 2014
Belarus will open its embassy in Mongolia in 2014 reads a resolution from the Belarus Council of
Ministers of the Republic of Belarus from 12 December 2013 Belaruslsquo Finance Ministry will finance
the costs of opening and maintaining Belarusian Embassy in Mongolia from the funds set aside in its
national budget for the opening and maintenance of diplomatic missions and consular missions of
the Republic of Belarus abroad
Source Belarusian Telegraph Agency
HOWELL NEW JERSEY USA BECOMES SISTER CITY OF SUKHBAATAR DISTRICT
The Howell Township and the Sukhbaatar district in Mongolia signed a memorandum of
understanding to create sister citieslsquo between Howell New Jersey USA and the Sukhbaatar District
on Tuesday
The program was aimed at opening up talks on how each can benefit from one another Mayor
William Gatto said Howell Township is a very diverse city and theyve taken the relationship with
the Kalmyk community here in Howell and expanded it to a country where they have had no
relationship in the past he said
The sister citieslsquo program will allow both Mongolia and Howell to exchange ideas and come up
with new and better ways to do things that benefits both cultures Outside of Mongolia Howell has
the largest population of Kalmyks in the world with many living in the Freewood Acres section of
the township Gatto said
Some of the goals of the agreement include promoting a common prosperity and development for
both parties an electronic pen-pal program and education opportunities for exchange students
Through a translator Baljinnyam Gan-erdene of the Citizens Representatives Council of Sukhbaatar
District said he came to Howell to see how democracy works in the United States
Im really glad and hope that this unforgettable and successful visit opens the door to our
friendship and prosperity between our residents Gan-erdene said
Gatto gave Gan-erdene a Howell flag and a throw blanket created by the Historical Society
depicting the history of the township Gan-erdene also gave Gatto several items including a bronze
piece of art
Source NJcom
MONGOLIAN CALLIGRAPHY ADDED TO UNESCO CULTURAL HERITAGE LIST
State Parties at the 8th Session of the Intergovernmental Committee for the Safeguarding of the
Intangible Cultural Heritage in Azerbaijan unanimously agreed to register Mongolian calligraphy as
an intangible cultural heritage in need of urgent safeguarding on 2 December
―Mongolian heritage calligraphy is now being recognized by the world and I am grateful on behalf
of my country for decision makers said Secretary-General of Mongolian National Commission for
UNESCO Gundegmaa Jargalsaikhan He noted that Mongolian calligraphy was the fifth cultural
heritage item of Mongolia to be listed and now stands among the Mongolian epic traditional folk
dance the traditional music Tsuur and a circular breathing technique
Mongolian calligraphy is a 1000-year-old writing system that vertically connects continuous strokes
together to create a word Letters of Mongolian script have been created and taught by nomads
from generation to generation During the 1937-1940 purges of the Soviet era thousands of tutors
and traditional scholars of the script were killed Those who remained alive were banned from
mentoring the younger generation Soon after that or around 1946 a new Cyrillic script was
adopted as the only eligible script therefore banning all the teachings of old Mongolian script and
Latin lettering Only in the 1970s was the old Mongolian script re-introduced to scholars allowing a
limited number of classes in universities
After the 1990 democratic changes along with the revival of Mongolian identity interest in
traditional calligraphy reawakened As a sign of such revival the very first non-communist political
organization the Democratic Union of Mongolia used folded calligraphy as its main logo
Source Info Mongolia
THOUGH IMPROVING MONGOLIA STILL REELING UNDER CORRUPTION
The third joint survey by the Asia Foundation and Sant Maral Foundation to gather data on the
perception of corruption in Mongolia revealed that efforts to curb corruption in what is considered
as one of the worldlsquos most corrupt countries could be having impact
The survey shows a significant drop in the percentage of respondents who believe corruption has
increased in the last three years from 389 percent in November 2012 to 183 percent currently In
contrast in 2006 a majority of respondents (63) indicated that corruption has increased ―a lot in
the last three years The survey also shows that corruption has declined in importance as a critical
social problem since 2006 Despite these positive signs overall respondents indicated that
corruption remains a serious issue in some specific key areas
Conducted in September of this year the survey featured face-to-face interviews in 1360
households across Mongolia including seven districts in Ulaanbaatar and 21 counties in six
provinces A majority (766) cited that widespread corruption in the law enforcement agencies is
one of the main reasons the government has been unable to tackle corruption effectively When
corruption is perceived to be this widespread the attention will obviously turn to the performance
of the apex anti-corruption body the Independent Authority Against Corruption (IAAC) The survey
shows that the IAAC is slowly but surely beginning to gain confidence among citizens The
percentage of those surveyed who think that its performance is ―good or ―very good increased
from 78 percent in March 2010 to 203 percent in March 2013 In September 2013 the result shows
a new high of 294 percent
Peoplelsquos perceptions on corruption are often shaped by personal experiences Although very few
respondents in the survey said that they had actually paid a bribe themselves (8 percent about a 3
percent drop from 2012 and an 18 percent drop since 2006) as noted before many are not willing
to report instances where they are asked for one Similarly 36 percent of respondents said they
would not pay a bribe but 26 percent indicated that they would pay if they had the financial
capability
Basanta Pokharel is The Asia Foundation‟s chief of party for the STAGE program in Mongolia He
can be reached at basantapokharelasiafoundationorg The views and opinions expressed here
are those of the individual author and not those of The Asia Foundation
Source Asia Foundation
MPP DEMANDS DISMISSAL OF MINISTERS
Mongolian Peoplelsquos Party Chairman N Enkhbold and party head S Byambatsogt submitted to the
Speaker a request for the dismissal Minister of Finance Chultem Ulaan and of Economic
Development Minister Nyamjav ―Fortuna Batbayar
Our faction believes that these ministers must be held responsible for the worsening of the
national economic situation We also intend to do the same with other ministers after hearing
opinions of people said Byambatsogt
Source Montsame
FORMER TAVAN TOLGOI JSC DIRECTOR ARRESTED
The Independent Agency Against Corruption arrested former Tavan Tolgoi JSC director Kh
Tumenbayar for undisclosed reasons
An unnamed official source suggested that the arrest may be related to abuses of power and
payments to political parties as well as the construction of a high-class hotel in Dalanzadgad Soum
Umnugobi Aimag Kh Tumenbayar is a member of the Democratic Party a member of Parliament
and is an associate of ―Ajnai Bat-Erdene the Minister of Defense who helped Tumenbayar attain
position as the director of Tavan Tolgoi for 6 years and rise to head of the Umnugobi Aimag Citizens
Council
Tumenbayar voluntarily resigned from his position at Tavan Tolgoi last month The IAAC has
reportedly not given details to the reasons for the investigation opened on Tumenbayar because of
possible connections to high-ranking officials
Source Unuudur
MONGOLIA TURKMENISTAN JOIN INTERNATIONAL RACING FEDERATION
The International Federation of Horseracing Authorities (IFHA) has welcomed racing organizations
from Mongolia and Turkmenistan as affiliate members
Recent ratification to IFHA statutes at its annual General Assembly in October created a new
affiliate membership category within the Federation Thus the Federation of Mongolia Horse Racing
Sport and Trainers and the Turkmen Atlary State Association by unanimous vote of the IFHA
Executive Council in Paris in October have become the IFHAlsquos first two affiliate members
The Federation of Mongolian Horse Racing Sport and Trainers (FMHRST) is a non-governmental
organization (NGO) which serves to the development of equestrian sport in Mongolia and works to
protect the rights of horsemen who specialize in this national sport The new affiliates were
announced by IFHA Chairman Louis Romanet this week and several key appointments to IFHA
executive office positions and committees have also been made
Source Horse Talk
MONGOL TV HEAD MEDIA CAN HELP FIX THE BIG PROBLEMS
Nomin Chinbat head of Mongol TV has grander intentions than just ridding the countrys television
business of rampant pirated content and unlicensed formats The young executive wants to help
clean up Mongolian politics and the nation by creating a free and open media
―The networks are used as propaganda channels for politicians They are used very effectively every
four years at election time says Chinbat whom the Source named one of the 25 Most Powerful
Women in Global TV at MIPCOM 2013
―There are laws against piracy but they arenlsquot implemented explains Chinbat who says that
politicians in the country of roughly three million wonlsquot challenge journalists because their
relationships with them are too cozy
Mongol TV has invested in original programming licenses all of its imported content and runs
investigative journalism features highlighting social problems such as alcoholism and corruption
The company is organizing a Mongol TV Day for February 2014 to which it has invited major
international studios to raise awareness of the issues and introduce the global industry to
Mongolia Britainlsquos ITV and Americalsquos CBS are already confirmed and negotiations are ongoing with
other attendees The situation has improved in recent years with some channels having become
what Chinbat calls ―hybrids which license some sports rights but then steal others and copy
formats
―These days some of these channels might license 25 episodes of a format and make 50 But this is
actually progress says Chinbat
Chinbat and her team were at the Asian Television Forum (ATF) in Singapore looking for new
formats that can be produced within the constraints of Mongolian television budgets However with
Mongolias young populationmdash65 percent of the country is under 35 years oldmdashmobile viewing is on
the rise and the network is already working second-screen utilization and new media applications
This demographic sweet spot should guarantee strong growth in the population economy and
nascent entertainment sector in Mongolia in the coming decades
Source Hollywood Reporter
ANNOUNCEMENTS
ldquoMM TODAYrdquo ON MNB-TV FRIDAY 1900 TO 1910
BCM is pleased to announce that Mongolian National Broadcasting continues its cooperation with
BCM on ―MM Today This English news program is aired every Friday for 10 minutes and is
scheduled from 1900 to 1910 tonight Tune in to watch this program that reports stories from
todaylsquos BCM NewsWire
BCM WEBSITES
MONGOLIAN WEBSITE bdquoPRESENTATIONS‟ AND bdquoNEWS‟ SECTIONS
The Presentationslsquo section on BCMlsquos Mongolian website can be reached via bcmmnitgeluud
As a key component of BCMlsquos Mongolian website articles from the Newslsquo section and the
government website Open-Governmentmn are regularly updated
S Oyun Minister of Environment and Green Development presentation at BCM monthly meeting on
May 27 added to Mongolian website bcmongoliaorgmnилтгэлүүд
- Байгаль орчин ногоон хөгжлийн сайд СОюун Байгаль орчин ногоон хөгжлийн шинэчлэлийн
бодлого үйл ажиллагаа МБЗ-ийн сарын уулзалт 5 сарын 27 2013
___________________________________________
ENGLISH WEBSITE PRESENTATIONS MONGOLIA REPORTS bdquoINTERVIEWSbdquo MONGOLIAN
BUSINESS NEWS‟ bdquoPHOTO GALLERY‟
The following 13 presentations are from the Mongolia Investment Summit- 2013 in Hong Kong
November 18-20
- Regulatory Update Navigating Mongolialsquos legal framework for foreign direct investment
Javkhlanbaatar Sereeter Director General Foreign Investment Regulations and Registration
Department MINISTRY OF ECONOMIC DEVELOPMENT OF MONGOLIA
- Investment keynote Investing into Mongolia in 2013 ndash Where do the opportunities lie James
Passin Co-Founder and Manager FIREBIRD MONGOLIA FUND
- Development keynote Key challenges and opportunities for continued growth in Mongolia
Randolph Koppa President TRADE AND DEVELOPMENT BANK OF MONGOLIA
- Outlining government policies and long-term plans for Mongolialsquos mining sector Amarjargal
Khurelbat Head of International Cooperation Division MINISTRY OF MINING OF MONGOLIA
- From copper to met coal Demand and price outlook and expected impact on Mongolialsquos economy
Ghee Peh Managing Director Metals and Mining Research UBS SECURITIES ASIA
- How Mongolian banks and financial institutions are dealing with the challenges and opportunities
of a fast growing economy Norihiko Kato Chief Executive Officer KHAN BANK
- Update on the Mongolian stock market ndash Impact of the new Securities Law Altai Khangai Chief
Executive Officer MONGOLIAN STOCK EXCHANGE
- From investment banking to trade finance to micro credits to insurance Amartuvshin Hanibal
Managing Director TENGER FINANCIAL GROUP LLC
- Spotlight presentations Showcasing Mongolian investment opportunities Peter Morrow Board
Director ASIA PACIFIC INVESTMENT PARTNERS
- Spotlight presentation Showcasing Mongolian investment opportunities Munkhbat Davaatseren
CEO of Golomt Securities GOLOMT BANK
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources
Batmunkh Batkhuu Chairman SHARYN GOL JSC
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources
Jimmie Wilde Chief Operating Officer BERKH UUL JSC
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources Mona
Forster Executive VP ENTREacuteE GOLD INC
The following two presentations are from the ―ANTI-CORRUPTION LEGISLATIONPOLICY
INTERNATIONAL BEST PRACTICE ON TRANSPARENCY training seminar for businesses in
Ulaanbaatar November 18 2013
-―International business standard on transparency by Jelena Pesic Director PwC
-―Finlandlsquos best practice on transparency and anti corruption by Dr Pekka Hallberg (as it is
worldlsquos number one) Emeritus President of the Supreme Administrative Court of Finland
The following 15 presentations are from the Mongolia Mining Summit Perth Australia October 29-
31 2013
bull Mongolialsquos Minerals Future and Development by Otgochuluu Ch Director General Department of
strategic policy and planning at Ministry of Mining Mongolia at the Mongolian Mining Summit 2013
Perth Australia Oct 29-31 2013
bull Mongolian Economy Investment OpportunitiesChallenges Jim Dwyer Executive Director
Business Council of Mongolia at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31
2013
bull Oyu Tolgoi Lessons from the Gobi Houston Spencer Vice President Communications and Media
Relations Oyu Tolgoi at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Market dynamics for Mongolian coking coal in the Chinese market Graeme Hancock President
and Chief Representative at Anglo American Mongolia at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Speech by Mr Ariunbold Byamba Deputy Director Erdenes MGL LLC at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull Launching Mining Projects in MongoliandashA Major Contractorlsquos Perspective Eric Erdenebat
Tseveendorj Country Manager Orica Limited at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Investing in a dynamic legislative environment Elisabeth Ellis Managing Partner Ulaanbaatar
Minter Ellison at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Sandvik In Pit Crushing amp Conveying (IPCC) Doug Turnbull Principal Mining Engineer Sandvik
Mining Systems at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Ovoot Coking Coal Project David Paull Managing Director Aspire Mining at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull The business of being a third neighbor David Landers General Manager East Asian Growth
Markets at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Nuurst Thermal Coal Project Daniel Rohr Chief Financial Officer Modun Resources Ltd at the
Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Culture matters in building sustainable long-term business relationships Hana Tserenkhand
Byambadash Business Development Consultant AusMon Consulting and Dr Christine Hogan Adjunct
Professor Curtin University Consultant amp Author at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Maximizing Business Benefits from Your IT Investment Brad Skeggs Executive Director COSOL at
the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Presentation by Battsengel Gotov CEO Mongolian Mining Corporation at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull Mongolian Mining Sector Present and Future Developments NAlgaa Executive Director
Mongolian National Mining Association at the Mongolian Mining Summit 2013 Perth Australia Oct
29-31 2013
The ―Mongolia Reports section includes the following
- ―Ministry of Finance of Mongolia 2013 Government Debt Auctions by Bank of Mongolia
- ―Doing Business in Mongolia 2013 Country Commercial Guide for US Companies by US
Embassy
- ―Real Estate Report 2013 by Mongolian Properties
- ―Selected Macroeconomic Indicators November 20 2013 by International Monetary Fund
- ―2013 Second Annual Mongolian CEO Survey from PricewaterhouseCoopers Audit LLC
- ―Selected Macroeconomic Indicators data through October 16 2013 by International Monetary
Fund
- ―IMF Completes 2013 Article IV Mission to Mongolia by International Monetary Fund
The following are added to Interview Section from the Oxford Business Group Mongolia Reports
2013 book
bull B Byambasaikhan Chairman Business Council of Mongolia ―Talk is cheap
bull President Ts Elbegdorj ―Diversifying for growth
bull Jim Dwyer Executive Director Business Council of Mongolia ―Non-mining sectors budding
bull Peter Morrow Chairman American University of Mongolia ―Filling in the blanks
bull N Zoljargal Governor Bank of Mongolia ―Sustainable vision
bull Gansukh Minister of Roads and Transportation ―Accessing new markets
bull J Od President MCS Group ―Building interest
bull B Chuluunbaatar President and CEO of Monnis Group ―Climbing the ranks
bull Cameron McRae President and CEO Oyu Tolgoi ―Sitting on a copper mine
BCMs English website includes the ―Mongolia Business News section where the Open Letter to
Parliament and Government is available for download
BCM continuously posts news stories and analysis of relevance to Mongolia at Mongolian Business
News before they are all put together each week for Fridays weekly NewsWire
The ―Photo Gallery contains photos from the 6th Anniversary BCM Renewal dinner on November
11 2013
BCM Football Cup 2013 pictures are posted to the website - httpbcmongoliaorgenphotos350-
enalbumalbumid=200
The BCM NewsWire will continue to be issued each Friday incorporating items already on the home
page for a consolidated account of the weeklsquos events
SOCIAL NETWORK WITH BCM
BCM LAUNCHES NEW LINKED-IN COMPANY PAGE
The Business Council of Mongolia has launched a new company page on the social networking
website LinkedIn to network its members and followers including small-medium enterprises (SMEs)
The new page will allow BCM to alert followers to the latest news and information critical to their
businesses Memberslsquo businesses will be promoted Additionally BCM plans to deliver monthly
infographics on the latest data as well as videos and other media content as they come The bulk of
the content on the new page will be in Mongolian language to better cater to BCMs Mongolian-
speaking audience and members The following link can direct you to the New BCMs Linked-in page
httpwwwlinkedincomcompanybusiness-council-of-mongoliatrk=company_logo
The Business Council of Mongolia (BCM) has expanded its reach to your favorite social networks
Keep up to date on the latest business deals in Mongolia and how the climate for investment is
improving each day with BCM
Add BCM on Facebook at httpswwwfacebookcomTheBusinessCouncilOfMongolia to read the
latest announcements and comment on events carried in the NewsWire with the community
Hear breaking news and announcements as they happen when you follow BCM on Twitter at
httpstwittercombcmongolia
We have now 2482 fans on our Facebook fans page 1527 connections on LinkedIn network and
835 followers on Twitter
Of course for news information interviews event photos and announcements regarding our
organization visit the official BCM website at httpbcmongoliaorgen
ECONOMIC INDICATORS
INFLATION
Year 2006 60 [source National Statistical Office of Mongolia (NSOM)]
Year 2007 151 [source NSOM]
Year 2008 221 [source NSOM]
Year 2009 42 [source NSOM]
Year 2010 130 [source NSOM]
Year 2011 102 [source NSOM]
November 30 2013 120 [source NSOM]
Year-over-year (y-o-y) nationwide
Note 111 y-o-y Ulaanbaatar city November 30 2013
CENTRAL BANK POLICY LOAN RATE
December 31 2008 975 [source IMF]
March 11 2009 1400 [source IMF]
May 12 2009 1275 [source IMF]
June 12 2009 1150 [source IMF]
September 30 2009 1000 [source IMF]
May 12 2010 1100 [source IMF]
April 28 2011 1150 [source IMF]
August 25 2011 1175 [source IMF]
October 25 2011 1225 [source IMF]
March 19 2012 1275 [source Mongol Bank]
April 18 2012 1325 [source Mongol Bank]
January 25 2013 1250 [source Mongol Bank]
April 8 2013 1150 [source Mongol Bank]
June 25 2013 1050 [source Mongol Bank]
CURRENCY RATES ndash DECEMBER 19 2013
Currency Name Currency Rate
US dollar USD 164138
Euro EUR 224680
Japanese yen JPY 1579
British pound GBP 268874
Hong Kong dollar HKD 21170
Chinese Yuan CNY 27031
Russian Ruble RUB 4981
South Korean won KRW 155
Disclaimer Except for reporting on BCMlsquos activities all information in the BCM NewsWire is
selected from various news sources Opinions are those of the respective news sources
Some of the goals of the agreement include promoting a common prosperity and development for
both parties an electronic pen-pal program and education opportunities for exchange students
Through a translator Baljinnyam Gan-erdene of the Citizens Representatives Council of Sukhbaatar
District said he came to Howell to see how democracy works in the United States
Im really glad and hope that this unforgettable and successful visit opens the door to our
friendship and prosperity between our residents Gan-erdene said
Gatto gave Gan-erdene a Howell flag and a throw blanket created by the Historical Society
depicting the history of the township Gan-erdene also gave Gatto several items including a bronze
piece of art
Source NJcom
MONGOLIAN CALLIGRAPHY ADDED TO UNESCO CULTURAL HERITAGE LIST
State Parties at the 8th Session of the Intergovernmental Committee for the Safeguarding of the
Intangible Cultural Heritage in Azerbaijan unanimously agreed to register Mongolian calligraphy as
an intangible cultural heritage in need of urgent safeguarding on 2 December
―Mongolian heritage calligraphy is now being recognized by the world and I am grateful on behalf
of my country for decision makers said Secretary-General of Mongolian National Commission for
UNESCO Gundegmaa Jargalsaikhan He noted that Mongolian calligraphy was the fifth cultural
heritage item of Mongolia to be listed and now stands among the Mongolian epic traditional folk
dance the traditional music Tsuur and a circular breathing technique
Mongolian calligraphy is a 1000-year-old writing system that vertically connects continuous strokes
together to create a word Letters of Mongolian script have been created and taught by nomads
from generation to generation During the 1937-1940 purges of the Soviet era thousands of tutors
and traditional scholars of the script were killed Those who remained alive were banned from
mentoring the younger generation Soon after that or around 1946 a new Cyrillic script was
adopted as the only eligible script therefore banning all the teachings of old Mongolian script and
Latin lettering Only in the 1970s was the old Mongolian script re-introduced to scholars allowing a
limited number of classes in universities
After the 1990 democratic changes along with the revival of Mongolian identity interest in
traditional calligraphy reawakened As a sign of such revival the very first non-communist political
organization the Democratic Union of Mongolia used folded calligraphy as its main logo
Source Info Mongolia
THOUGH IMPROVING MONGOLIA STILL REELING UNDER CORRUPTION
The third joint survey by the Asia Foundation and Sant Maral Foundation to gather data on the
perception of corruption in Mongolia revealed that efforts to curb corruption in what is considered
as one of the worldlsquos most corrupt countries could be having impact
The survey shows a significant drop in the percentage of respondents who believe corruption has
increased in the last three years from 389 percent in November 2012 to 183 percent currently In
contrast in 2006 a majority of respondents (63) indicated that corruption has increased ―a lot in
the last three years The survey also shows that corruption has declined in importance as a critical
social problem since 2006 Despite these positive signs overall respondents indicated that
corruption remains a serious issue in some specific key areas
Conducted in September of this year the survey featured face-to-face interviews in 1360
households across Mongolia including seven districts in Ulaanbaatar and 21 counties in six
provinces A majority (766) cited that widespread corruption in the law enforcement agencies is
one of the main reasons the government has been unable to tackle corruption effectively When
corruption is perceived to be this widespread the attention will obviously turn to the performance
of the apex anti-corruption body the Independent Authority Against Corruption (IAAC) The survey
shows that the IAAC is slowly but surely beginning to gain confidence among citizens The
percentage of those surveyed who think that its performance is ―good or ―very good increased
from 78 percent in March 2010 to 203 percent in March 2013 In September 2013 the result shows
a new high of 294 percent
Peoplelsquos perceptions on corruption are often shaped by personal experiences Although very few
respondents in the survey said that they had actually paid a bribe themselves (8 percent about a 3
percent drop from 2012 and an 18 percent drop since 2006) as noted before many are not willing
to report instances where they are asked for one Similarly 36 percent of respondents said they
would not pay a bribe but 26 percent indicated that they would pay if they had the financial
capability
Basanta Pokharel is The Asia Foundation‟s chief of party for the STAGE program in Mongolia He
can be reached at basantapokharelasiafoundationorg The views and opinions expressed here
are those of the individual author and not those of The Asia Foundation
Source Asia Foundation
MPP DEMANDS DISMISSAL OF MINISTERS
Mongolian Peoplelsquos Party Chairman N Enkhbold and party head S Byambatsogt submitted to the
Speaker a request for the dismissal Minister of Finance Chultem Ulaan and of Economic
Development Minister Nyamjav ―Fortuna Batbayar
Our faction believes that these ministers must be held responsible for the worsening of the
national economic situation We also intend to do the same with other ministers after hearing
opinions of people said Byambatsogt
Source Montsame
FORMER TAVAN TOLGOI JSC DIRECTOR ARRESTED
The Independent Agency Against Corruption arrested former Tavan Tolgoi JSC director Kh
Tumenbayar for undisclosed reasons
An unnamed official source suggested that the arrest may be related to abuses of power and
payments to political parties as well as the construction of a high-class hotel in Dalanzadgad Soum
Umnugobi Aimag Kh Tumenbayar is a member of the Democratic Party a member of Parliament
and is an associate of ―Ajnai Bat-Erdene the Minister of Defense who helped Tumenbayar attain
position as the director of Tavan Tolgoi for 6 years and rise to head of the Umnugobi Aimag Citizens
Council
Tumenbayar voluntarily resigned from his position at Tavan Tolgoi last month The IAAC has
reportedly not given details to the reasons for the investigation opened on Tumenbayar because of
possible connections to high-ranking officials
Source Unuudur
MONGOLIA TURKMENISTAN JOIN INTERNATIONAL RACING FEDERATION
The International Federation of Horseracing Authorities (IFHA) has welcomed racing organizations
from Mongolia and Turkmenistan as affiliate members
Recent ratification to IFHA statutes at its annual General Assembly in October created a new
affiliate membership category within the Federation Thus the Federation of Mongolia Horse Racing
Sport and Trainers and the Turkmen Atlary State Association by unanimous vote of the IFHA
Executive Council in Paris in October have become the IFHAlsquos first two affiliate members
The Federation of Mongolian Horse Racing Sport and Trainers (FMHRST) is a non-governmental
organization (NGO) which serves to the development of equestrian sport in Mongolia and works to
protect the rights of horsemen who specialize in this national sport The new affiliates were
announced by IFHA Chairman Louis Romanet this week and several key appointments to IFHA
executive office positions and committees have also been made
Source Horse Talk
MONGOL TV HEAD MEDIA CAN HELP FIX THE BIG PROBLEMS
Nomin Chinbat head of Mongol TV has grander intentions than just ridding the countrys television
business of rampant pirated content and unlicensed formats The young executive wants to help
clean up Mongolian politics and the nation by creating a free and open media
―The networks are used as propaganda channels for politicians They are used very effectively every
four years at election time says Chinbat whom the Source named one of the 25 Most Powerful
Women in Global TV at MIPCOM 2013
―There are laws against piracy but they arenlsquot implemented explains Chinbat who says that
politicians in the country of roughly three million wonlsquot challenge journalists because their
relationships with them are too cozy
Mongol TV has invested in original programming licenses all of its imported content and runs
investigative journalism features highlighting social problems such as alcoholism and corruption
The company is organizing a Mongol TV Day for February 2014 to which it has invited major
international studios to raise awareness of the issues and introduce the global industry to
Mongolia Britainlsquos ITV and Americalsquos CBS are already confirmed and negotiations are ongoing with
other attendees The situation has improved in recent years with some channels having become
what Chinbat calls ―hybrids which license some sports rights but then steal others and copy
formats
―These days some of these channels might license 25 episodes of a format and make 50 But this is
actually progress says Chinbat
Chinbat and her team were at the Asian Television Forum (ATF) in Singapore looking for new
formats that can be produced within the constraints of Mongolian television budgets However with
Mongolias young populationmdash65 percent of the country is under 35 years oldmdashmobile viewing is on
the rise and the network is already working second-screen utilization and new media applications
This demographic sweet spot should guarantee strong growth in the population economy and
nascent entertainment sector in Mongolia in the coming decades
Source Hollywood Reporter
ANNOUNCEMENTS
ldquoMM TODAYrdquo ON MNB-TV FRIDAY 1900 TO 1910
BCM is pleased to announce that Mongolian National Broadcasting continues its cooperation with
BCM on ―MM Today This English news program is aired every Friday for 10 minutes and is
scheduled from 1900 to 1910 tonight Tune in to watch this program that reports stories from
todaylsquos BCM NewsWire
BCM WEBSITES
MONGOLIAN WEBSITE bdquoPRESENTATIONS‟ AND bdquoNEWS‟ SECTIONS
The Presentationslsquo section on BCMlsquos Mongolian website can be reached via bcmmnitgeluud
As a key component of BCMlsquos Mongolian website articles from the Newslsquo section and the
government website Open-Governmentmn are regularly updated
S Oyun Minister of Environment and Green Development presentation at BCM monthly meeting on
May 27 added to Mongolian website bcmongoliaorgmnилтгэлүүд
- Байгаль орчин ногоон хөгжлийн сайд СОюун Байгаль орчин ногоон хөгжлийн шинэчлэлийн
бодлого үйл ажиллагаа МБЗ-ийн сарын уулзалт 5 сарын 27 2013
___________________________________________
ENGLISH WEBSITE PRESENTATIONS MONGOLIA REPORTS bdquoINTERVIEWSbdquo MONGOLIAN
BUSINESS NEWS‟ bdquoPHOTO GALLERY‟
The following 13 presentations are from the Mongolia Investment Summit- 2013 in Hong Kong
November 18-20
- Regulatory Update Navigating Mongolialsquos legal framework for foreign direct investment
Javkhlanbaatar Sereeter Director General Foreign Investment Regulations and Registration
Department MINISTRY OF ECONOMIC DEVELOPMENT OF MONGOLIA
- Investment keynote Investing into Mongolia in 2013 ndash Where do the opportunities lie James
Passin Co-Founder and Manager FIREBIRD MONGOLIA FUND
- Development keynote Key challenges and opportunities for continued growth in Mongolia
Randolph Koppa President TRADE AND DEVELOPMENT BANK OF MONGOLIA
- Outlining government policies and long-term plans for Mongolialsquos mining sector Amarjargal
Khurelbat Head of International Cooperation Division MINISTRY OF MINING OF MONGOLIA
- From copper to met coal Demand and price outlook and expected impact on Mongolialsquos economy
Ghee Peh Managing Director Metals and Mining Research UBS SECURITIES ASIA
- How Mongolian banks and financial institutions are dealing with the challenges and opportunities
of a fast growing economy Norihiko Kato Chief Executive Officer KHAN BANK
- Update on the Mongolian stock market ndash Impact of the new Securities Law Altai Khangai Chief
Executive Officer MONGOLIAN STOCK EXCHANGE
- From investment banking to trade finance to micro credits to insurance Amartuvshin Hanibal
Managing Director TENGER FINANCIAL GROUP LLC
- Spotlight presentations Showcasing Mongolian investment opportunities Peter Morrow Board
Director ASIA PACIFIC INVESTMENT PARTNERS
- Spotlight presentation Showcasing Mongolian investment opportunities Munkhbat Davaatseren
CEO of Golomt Securities GOLOMT BANK
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources
Batmunkh Batkhuu Chairman SHARYN GOL JSC
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources
Jimmie Wilde Chief Operating Officer BERKH UUL JSC
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources Mona
Forster Executive VP ENTREacuteE GOLD INC
The following two presentations are from the ―ANTI-CORRUPTION LEGISLATIONPOLICY
INTERNATIONAL BEST PRACTICE ON TRANSPARENCY training seminar for businesses in
Ulaanbaatar November 18 2013
-―International business standard on transparency by Jelena Pesic Director PwC
-―Finlandlsquos best practice on transparency and anti corruption by Dr Pekka Hallberg (as it is
worldlsquos number one) Emeritus President of the Supreme Administrative Court of Finland
The following 15 presentations are from the Mongolia Mining Summit Perth Australia October 29-
31 2013
bull Mongolialsquos Minerals Future and Development by Otgochuluu Ch Director General Department of
strategic policy and planning at Ministry of Mining Mongolia at the Mongolian Mining Summit 2013
Perth Australia Oct 29-31 2013
bull Mongolian Economy Investment OpportunitiesChallenges Jim Dwyer Executive Director
Business Council of Mongolia at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31
2013
bull Oyu Tolgoi Lessons from the Gobi Houston Spencer Vice President Communications and Media
Relations Oyu Tolgoi at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Market dynamics for Mongolian coking coal in the Chinese market Graeme Hancock President
and Chief Representative at Anglo American Mongolia at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Speech by Mr Ariunbold Byamba Deputy Director Erdenes MGL LLC at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull Launching Mining Projects in MongoliandashA Major Contractorlsquos Perspective Eric Erdenebat
Tseveendorj Country Manager Orica Limited at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Investing in a dynamic legislative environment Elisabeth Ellis Managing Partner Ulaanbaatar
Minter Ellison at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Sandvik In Pit Crushing amp Conveying (IPCC) Doug Turnbull Principal Mining Engineer Sandvik
Mining Systems at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Ovoot Coking Coal Project David Paull Managing Director Aspire Mining at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull The business of being a third neighbor David Landers General Manager East Asian Growth
Markets at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Nuurst Thermal Coal Project Daniel Rohr Chief Financial Officer Modun Resources Ltd at the
Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Culture matters in building sustainable long-term business relationships Hana Tserenkhand
Byambadash Business Development Consultant AusMon Consulting and Dr Christine Hogan Adjunct
Professor Curtin University Consultant amp Author at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Maximizing Business Benefits from Your IT Investment Brad Skeggs Executive Director COSOL at
the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Presentation by Battsengel Gotov CEO Mongolian Mining Corporation at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull Mongolian Mining Sector Present and Future Developments NAlgaa Executive Director
Mongolian National Mining Association at the Mongolian Mining Summit 2013 Perth Australia Oct
29-31 2013
The ―Mongolia Reports section includes the following
- ―Ministry of Finance of Mongolia 2013 Government Debt Auctions by Bank of Mongolia
- ―Doing Business in Mongolia 2013 Country Commercial Guide for US Companies by US
Embassy
- ―Real Estate Report 2013 by Mongolian Properties
- ―Selected Macroeconomic Indicators November 20 2013 by International Monetary Fund
- ―2013 Second Annual Mongolian CEO Survey from PricewaterhouseCoopers Audit LLC
- ―Selected Macroeconomic Indicators data through October 16 2013 by International Monetary
Fund
- ―IMF Completes 2013 Article IV Mission to Mongolia by International Monetary Fund
The following are added to Interview Section from the Oxford Business Group Mongolia Reports
2013 book
bull B Byambasaikhan Chairman Business Council of Mongolia ―Talk is cheap
bull President Ts Elbegdorj ―Diversifying for growth
bull Jim Dwyer Executive Director Business Council of Mongolia ―Non-mining sectors budding
bull Peter Morrow Chairman American University of Mongolia ―Filling in the blanks
bull N Zoljargal Governor Bank of Mongolia ―Sustainable vision
bull Gansukh Minister of Roads and Transportation ―Accessing new markets
bull J Od President MCS Group ―Building interest
bull B Chuluunbaatar President and CEO of Monnis Group ―Climbing the ranks
bull Cameron McRae President and CEO Oyu Tolgoi ―Sitting on a copper mine
BCMs English website includes the ―Mongolia Business News section where the Open Letter to
Parliament and Government is available for download
BCM continuously posts news stories and analysis of relevance to Mongolia at Mongolian Business
News before they are all put together each week for Fridays weekly NewsWire
The ―Photo Gallery contains photos from the 6th Anniversary BCM Renewal dinner on November
11 2013
BCM Football Cup 2013 pictures are posted to the website - httpbcmongoliaorgenphotos350-
enalbumalbumid=200
The BCM NewsWire will continue to be issued each Friday incorporating items already on the home
page for a consolidated account of the weeklsquos events
SOCIAL NETWORK WITH BCM
BCM LAUNCHES NEW LINKED-IN COMPANY PAGE
The Business Council of Mongolia has launched a new company page on the social networking
website LinkedIn to network its members and followers including small-medium enterprises (SMEs)
The new page will allow BCM to alert followers to the latest news and information critical to their
businesses Memberslsquo businesses will be promoted Additionally BCM plans to deliver monthly
infographics on the latest data as well as videos and other media content as they come The bulk of
the content on the new page will be in Mongolian language to better cater to BCMs Mongolian-
speaking audience and members The following link can direct you to the New BCMs Linked-in page
httpwwwlinkedincomcompanybusiness-council-of-mongoliatrk=company_logo
The Business Council of Mongolia (BCM) has expanded its reach to your favorite social networks
Keep up to date on the latest business deals in Mongolia and how the climate for investment is
improving each day with BCM
Add BCM on Facebook at httpswwwfacebookcomTheBusinessCouncilOfMongolia to read the
latest announcements and comment on events carried in the NewsWire with the community
Hear breaking news and announcements as they happen when you follow BCM on Twitter at
httpstwittercombcmongolia
We have now 2482 fans on our Facebook fans page 1527 connections on LinkedIn network and
835 followers on Twitter
Of course for news information interviews event photos and announcements regarding our
organization visit the official BCM website at httpbcmongoliaorgen
ECONOMIC INDICATORS
INFLATION
Year 2006 60 [source National Statistical Office of Mongolia (NSOM)]
Year 2007 151 [source NSOM]
Year 2008 221 [source NSOM]
Year 2009 42 [source NSOM]
Year 2010 130 [source NSOM]
Year 2011 102 [source NSOM]
November 30 2013 120 [source NSOM]
Year-over-year (y-o-y) nationwide
Note 111 y-o-y Ulaanbaatar city November 30 2013
CENTRAL BANK POLICY LOAN RATE
December 31 2008 975 [source IMF]
March 11 2009 1400 [source IMF]
May 12 2009 1275 [source IMF]
June 12 2009 1150 [source IMF]
September 30 2009 1000 [source IMF]
May 12 2010 1100 [source IMF]
April 28 2011 1150 [source IMF]
August 25 2011 1175 [source IMF]
October 25 2011 1225 [source IMF]
March 19 2012 1275 [source Mongol Bank]
April 18 2012 1325 [source Mongol Bank]
January 25 2013 1250 [source Mongol Bank]
April 8 2013 1150 [source Mongol Bank]
June 25 2013 1050 [source Mongol Bank]
CURRENCY RATES ndash DECEMBER 19 2013
Currency Name Currency Rate
US dollar USD 164138
Euro EUR 224680
Japanese yen JPY 1579
British pound GBP 268874
Hong Kong dollar HKD 21170
Chinese Yuan CNY 27031
Russian Ruble RUB 4981
South Korean won KRW 155
Disclaimer Except for reporting on BCMlsquos activities all information in the BCM NewsWire is
selected from various news sources Opinions are those of the respective news sources
Peoplelsquos perceptions on corruption are often shaped by personal experiences Although very few
respondents in the survey said that they had actually paid a bribe themselves (8 percent about a 3
percent drop from 2012 and an 18 percent drop since 2006) as noted before many are not willing
to report instances where they are asked for one Similarly 36 percent of respondents said they
would not pay a bribe but 26 percent indicated that they would pay if they had the financial
capability
Basanta Pokharel is The Asia Foundation‟s chief of party for the STAGE program in Mongolia He
can be reached at basantapokharelasiafoundationorg The views and opinions expressed here
are those of the individual author and not those of The Asia Foundation
Source Asia Foundation
MPP DEMANDS DISMISSAL OF MINISTERS
Mongolian Peoplelsquos Party Chairman N Enkhbold and party head S Byambatsogt submitted to the
Speaker a request for the dismissal Minister of Finance Chultem Ulaan and of Economic
Development Minister Nyamjav ―Fortuna Batbayar
Our faction believes that these ministers must be held responsible for the worsening of the
national economic situation We also intend to do the same with other ministers after hearing
opinions of people said Byambatsogt
Source Montsame
FORMER TAVAN TOLGOI JSC DIRECTOR ARRESTED
The Independent Agency Against Corruption arrested former Tavan Tolgoi JSC director Kh
Tumenbayar for undisclosed reasons
An unnamed official source suggested that the arrest may be related to abuses of power and
payments to political parties as well as the construction of a high-class hotel in Dalanzadgad Soum
Umnugobi Aimag Kh Tumenbayar is a member of the Democratic Party a member of Parliament
and is an associate of ―Ajnai Bat-Erdene the Minister of Defense who helped Tumenbayar attain
position as the director of Tavan Tolgoi for 6 years and rise to head of the Umnugobi Aimag Citizens
Council
Tumenbayar voluntarily resigned from his position at Tavan Tolgoi last month The IAAC has
reportedly not given details to the reasons for the investigation opened on Tumenbayar because of
possible connections to high-ranking officials
Source Unuudur
MONGOLIA TURKMENISTAN JOIN INTERNATIONAL RACING FEDERATION
The International Federation of Horseracing Authorities (IFHA) has welcomed racing organizations
from Mongolia and Turkmenistan as affiliate members
Recent ratification to IFHA statutes at its annual General Assembly in October created a new
affiliate membership category within the Federation Thus the Federation of Mongolia Horse Racing
Sport and Trainers and the Turkmen Atlary State Association by unanimous vote of the IFHA
Executive Council in Paris in October have become the IFHAlsquos first two affiliate members
The Federation of Mongolian Horse Racing Sport and Trainers (FMHRST) is a non-governmental
organization (NGO) which serves to the development of equestrian sport in Mongolia and works to
protect the rights of horsemen who specialize in this national sport The new affiliates were
announced by IFHA Chairman Louis Romanet this week and several key appointments to IFHA
executive office positions and committees have also been made
Source Horse Talk
MONGOL TV HEAD MEDIA CAN HELP FIX THE BIG PROBLEMS
Nomin Chinbat head of Mongol TV has grander intentions than just ridding the countrys television
business of rampant pirated content and unlicensed formats The young executive wants to help
clean up Mongolian politics and the nation by creating a free and open media
―The networks are used as propaganda channels for politicians They are used very effectively every
four years at election time says Chinbat whom the Source named one of the 25 Most Powerful
Women in Global TV at MIPCOM 2013
―There are laws against piracy but they arenlsquot implemented explains Chinbat who says that
politicians in the country of roughly three million wonlsquot challenge journalists because their
relationships with them are too cozy
Mongol TV has invested in original programming licenses all of its imported content and runs
investigative journalism features highlighting social problems such as alcoholism and corruption
The company is organizing a Mongol TV Day for February 2014 to which it has invited major
international studios to raise awareness of the issues and introduce the global industry to
Mongolia Britainlsquos ITV and Americalsquos CBS are already confirmed and negotiations are ongoing with
other attendees The situation has improved in recent years with some channels having become
what Chinbat calls ―hybrids which license some sports rights but then steal others and copy
formats
―These days some of these channels might license 25 episodes of a format and make 50 But this is
actually progress says Chinbat
Chinbat and her team were at the Asian Television Forum (ATF) in Singapore looking for new
formats that can be produced within the constraints of Mongolian television budgets However with
Mongolias young populationmdash65 percent of the country is under 35 years oldmdashmobile viewing is on
the rise and the network is already working second-screen utilization and new media applications
This demographic sweet spot should guarantee strong growth in the population economy and
nascent entertainment sector in Mongolia in the coming decades
Source Hollywood Reporter
ANNOUNCEMENTS
ldquoMM TODAYrdquo ON MNB-TV FRIDAY 1900 TO 1910
BCM is pleased to announce that Mongolian National Broadcasting continues its cooperation with
BCM on ―MM Today This English news program is aired every Friday for 10 minutes and is
scheduled from 1900 to 1910 tonight Tune in to watch this program that reports stories from
todaylsquos BCM NewsWire
BCM WEBSITES
MONGOLIAN WEBSITE bdquoPRESENTATIONS‟ AND bdquoNEWS‟ SECTIONS
The Presentationslsquo section on BCMlsquos Mongolian website can be reached via bcmmnitgeluud
As a key component of BCMlsquos Mongolian website articles from the Newslsquo section and the
government website Open-Governmentmn are regularly updated
S Oyun Minister of Environment and Green Development presentation at BCM monthly meeting on
May 27 added to Mongolian website bcmongoliaorgmnилтгэлүүд
- Байгаль орчин ногоон хөгжлийн сайд СОюун Байгаль орчин ногоон хөгжлийн шинэчлэлийн
бодлого үйл ажиллагаа МБЗ-ийн сарын уулзалт 5 сарын 27 2013
___________________________________________
ENGLISH WEBSITE PRESENTATIONS MONGOLIA REPORTS bdquoINTERVIEWSbdquo MONGOLIAN
BUSINESS NEWS‟ bdquoPHOTO GALLERY‟
The following 13 presentations are from the Mongolia Investment Summit- 2013 in Hong Kong
November 18-20
- Regulatory Update Navigating Mongolialsquos legal framework for foreign direct investment
Javkhlanbaatar Sereeter Director General Foreign Investment Regulations and Registration
Department MINISTRY OF ECONOMIC DEVELOPMENT OF MONGOLIA
- Investment keynote Investing into Mongolia in 2013 ndash Where do the opportunities lie James
Passin Co-Founder and Manager FIREBIRD MONGOLIA FUND
- Development keynote Key challenges and opportunities for continued growth in Mongolia
Randolph Koppa President TRADE AND DEVELOPMENT BANK OF MONGOLIA
- Outlining government policies and long-term plans for Mongolialsquos mining sector Amarjargal
Khurelbat Head of International Cooperation Division MINISTRY OF MINING OF MONGOLIA
- From copper to met coal Demand and price outlook and expected impact on Mongolialsquos economy
Ghee Peh Managing Director Metals and Mining Research UBS SECURITIES ASIA
- How Mongolian banks and financial institutions are dealing with the challenges and opportunities
of a fast growing economy Norihiko Kato Chief Executive Officer KHAN BANK
- Update on the Mongolian stock market ndash Impact of the new Securities Law Altai Khangai Chief
Executive Officer MONGOLIAN STOCK EXCHANGE
- From investment banking to trade finance to micro credits to insurance Amartuvshin Hanibal
Managing Director TENGER FINANCIAL GROUP LLC
- Spotlight presentations Showcasing Mongolian investment opportunities Peter Morrow Board
Director ASIA PACIFIC INVESTMENT PARTNERS
- Spotlight presentation Showcasing Mongolian investment opportunities Munkhbat Davaatseren
CEO of Golomt Securities GOLOMT BANK
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources
Batmunkh Batkhuu Chairman SHARYN GOL JSC
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources
Jimmie Wilde Chief Operating Officer BERKH UUL JSC
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources Mona
Forster Executive VP ENTREacuteE GOLD INC
The following two presentations are from the ―ANTI-CORRUPTION LEGISLATIONPOLICY
INTERNATIONAL BEST PRACTICE ON TRANSPARENCY training seminar for businesses in
Ulaanbaatar November 18 2013
-―International business standard on transparency by Jelena Pesic Director PwC
-―Finlandlsquos best practice on transparency and anti corruption by Dr Pekka Hallberg (as it is
worldlsquos number one) Emeritus President of the Supreme Administrative Court of Finland
The following 15 presentations are from the Mongolia Mining Summit Perth Australia October 29-
31 2013
bull Mongolialsquos Minerals Future and Development by Otgochuluu Ch Director General Department of
strategic policy and planning at Ministry of Mining Mongolia at the Mongolian Mining Summit 2013
Perth Australia Oct 29-31 2013
bull Mongolian Economy Investment OpportunitiesChallenges Jim Dwyer Executive Director
Business Council of Mongolia at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31
2013
bull Oyu Tolgoi Lessons from the Gobi Houston Spencer Vice President Communications and Media
Relations Oyu Tolgoi at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Market dynamics for Mongolian coking coal in the Chinese market Graeme Hancock President
and Chief Representative at Anglo American Mongolia at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Speech by Mr Ariunbold Byamba Deputy Director Erdenes MGL LLC at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull Launching Mining Projects in MongoliandashA Major Contractorlsquos Perspective Eric Erdenebat
Tseveendorj Country Manager Orica Limited at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Investing in a dynamic legislative environment Elisabeth Ellis Managing Partner Ulaanbaatar
Minter Ellison at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Sandvik In Pit Crushing amp Conveying (IPCC) Doug Turnbull Principal Mining Engineer Sandvik
Mining Systems at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Ovoot Coking Coal Project David Paull Managing Director Aspire Mining at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull The business of being a third neighbor David Landers General Manager East Asian Growth
Markets at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Nuurst Thermal Coal Project Daniel Rohr Chief Financial Officer Modun Resources Ltd at the
Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Culture matters in building sustainable long-term business relationships Hana Tserenkhand
Byambadash Business Development Consultant AusMon Consulting and Dr Christine Hogan Adjunct
Professor Curtin University Consultant amp Author at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Maximizing Business Benefits from Your IT Investment Brad Skeggs Executive Director COSOL at
the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Presentation by Battsengel Gotov CEO Mongolian Mining Corporation at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull Mongolian Mining Sector Present and Future Developments NAlgaa Executive Director
Mongolian National Mining Association at the Mongolian Mining Summit 2013 Perth Australia Oct
29-31 2013
The ―Mongolia Reports section includes the following
- ―Ministry of Finance of Mongolia 2013 Government Debt Auctions by Bank of Mongolia
- ―Doing Business in Mongolia 2013 Country Commercial Guide for US Companies by US
Embassy
- ―Real Estate Report 2013 by Mongolian Properties
- ―Selected Macroeconomic Indicators November 20 2013 by International Monetary Fund
- ―2013 Second Annual Mongolian CEO Survey from PricewaterhouseCoopers Audit LLC
- ―Selected Macroeconomic Indicators data through October 16 2013 by International Monetary
Fund
- ―IMF Completes 2013 Article IV Mission to Mongolia by International Monetary Fund
The following are added to Interview Section from the Oxford Business Group Mongolia Reports
2013 book
bull B Byambasaikhan Chairman Business Council of Mongolia ―Talk is cheap
bull President Ts Elbegdorj ―Diversifying for growth
bull Jim Dwyer Executive Director Business Council of Mongolia ―Non-mining sectors budding
bull Peter Morrow Chairman American University of Mongolia ―Filling in the blanks
bull N Zoljargal Governor Bank of Mongolia ―Sustainable vision
bull Gansukh Minister of Roads and Transportation ―Accessing new markets
bull J Od President MCS Group ―Building interest
bull B Chuluunbaatar President and CEO of Monnis Group ―Climbing the ranks
bull Cameron McRae President and CEO Oyu Tolgoi ―Sitting on a copper mine
BCMs English website includes the ―Mongolia Business News section where the Open Letter to
Parliament and Government is available for download
BCM continuously posts news stories and analysis of relevance to Mongolia at Mongolian Business
News before they are all put together each week for Fridays weekly NewsWire
The ―Photo Gallery contains photos from the 6th Anniversary BCM Renewal dinner on November
11 2013
BCM Football Cup 2013 pictures are posted to the website - httpbcmongoliaorgenphotos350-
enalbumalbumid=200
The BCM NewsWire will continue to be issued each Friday incorporating items already on the home
page for a consolidated account of the weeklsquos events
SOCIAL NETWORK WITH BCM
BCM LAUNCHES NEW LINKED-IN COMPANY PAGE
The Business Council of Mongolia has launched a new company page on the social networking
website LinkedIn to network its members and followers including small-medium enterprises (SMEs)
The new page will allow BCM to alert followers to the latest news and information critical to their
businesses Memberslsquo businesses will be promoted Additionally BCM plans to deliver monthly
infographics on the latest data as well as videos and other media content as they come The bulk of
the content on the new page will be in Mongolian language to better cater to BCMs Mongolian-
speaking audience and members The following link can direct you to the New BCMs Linked-in page
httpwwwlinkedincomcompanybusiness-council-of-mongoliatrk=company_logo
The Business Council of Mongolia (BCM) has expanded its reach to your favorite social networks
Keep up to date on the latest business deals in Mongolia and how the climate for investment is
improving each day with BCM
Add BCM on Facebook at httpswwwfacebookcomTheBusinessCouncilOfMongolia to read the
latest announcements and comment on events carried in the NewsWire with the community
Hear breaking news and announcements as they happen when you follow BCM on Twitter at
httpstwittercombcmongolia
We have now 2482 fans on our Facebook fans page 1527 connections on LinkedIn network and
835 followers on Twitter
Of course for news information interviews event photos and announcements regarding our
organization visit the official BCM website at httpbcmongoliaorgen
ECONOMIC INDICATORS
INFLATION
Year 2006 60 [source National Statistical Office of Mongolia (NSOM)]
Year 2007 151 [source NSOM]
Year 2008 221 [source NSOM]
Year 2009 42 [source NSOM]
Year 2010 130 [source NSOM]
Year 2011 102 [source NSOM]
November 30 2013 120 [source NSOM]
Year-over-year (y-o-y) nationwide
Note 111 y-o-y Ulaanbaatar city November 30 2013
CENTRAL BANK POLICY LOAN RATE
December 31 2008 975 [source IMF]
March 11 2009 1400 [source IMF]
May 12 2009 1275 [source IMF]
June 12 2009 1150 [source IMF]
September 30 2009 1000 [source IMF]
May 12 2010 1100 [source IMF]
April 28 2011 1150 [source IMF]
August 25 2011 1175 [source IMF]
October 25 2011 1225 [source IMF]
March 19 2012 1275 [source Mongol Bank]
April 18 2012 1325 [source Mongol Bank]
January 25 2013 1250 [source Mongol Bank]
April 8 2013 1150 [source Mongol Bank]
June 25 2013 1050 [source Mongol Bank]
CURRENCY RATES ndash DECEMBER 19 2013
Currency Name Currency Rate
US dollar USD 164138
Euro EUR 224680
Japanese yen JPY 1579
British pound GBP 268874
Hong Kong dollar HKD 21170
Chinese Yuan CNY 27031
Russian Ruble RUB 4981
South Korean won KRW 155
Disclaimer Except for reporting on BCMlsquos activities all information in the BCM NewsWire is
selected from various news sources Opinions are those of the respective news sources
four years at election time says Chinbat whom the Source named one of the 25 Most Powerful
Women in Global TV at MIPCOM 2013
―There are laws against piracy but they arenlsquot implemented explains Chinbat who says that
politicians in the country of roughly three million wonlsquot challenge journalists because their
relationships with them are too cozy
Mongol TV has invested in original programming licenses all of its imported content and runs
investigative journalism features highlighting social problems such as alcoholism and corruption
The company is organizing a Mongol TV Day for February 2014 to which it has invited major
international studios to raise awareness of the issues and introduce the global industry to
Mongolia Britainlsquos ITV and Americalsquos CBS are already confirmed and negotiations are ongoing with
other attendees The situation has improved in recent years with some channels having become
what Chinbat calls ―hybrids which license some sports rights but then steal others and copy
formats
―These days some of these channels might license 25 episodes of a format and make 50 But this is
actually progress says Chinbat
Chinbat and her team were at the Asian Television Forum (ATF) in Singapore looking for new
formats that can be produced within the constraints of Mongolian television budgets However with
Mongolias young populationmdash65 percent of the country is under 35 years oldmdashmobile viewing is on
the rise and the network is already working second-screen utilization and new media applications
This demographic sweet spot should guarantee strong growth in the population economy and
nascent entertainment sector in Mongolia in the coming decades
Source Hollywood Reporter
ANNOUNCEMENTS
ldquoMM TODAYrdquo ON MNB-TV FRIDAY 1900 TO 1910
BCM is pleased to announce that Mongolian National Broadcasting continues its cooperation with
BCM on ―MM Today This English news program is aired every Friday for 10 minutes and is
scheduled from 1900 to 1910 tonight Tune in to watch this program that reports stories from
todaylsquos BCM NewsWire
BCM WEBSITES
MONGOLIAN WEBSITE bdquoPRESENTATIONS‟ AND bdquoNEWS‟ SECTIONS
The Presentationslsquo section on BCMlsquos Mongolian website can be reached via bcmmnitgeluud
As a key component of BCMlsquos Mongolian website articles from the Newslsquo section and the
government website Open-Governmentmn are regularly updated
S Oyun Minister of Environment and Green Development presentation at BCM monthly meeting on
May 27 added to Mongolian website bcmongoliaorgmnилтгэлүүд
- Байгаль орчин ногоон хөгжлийн сайд СОюун Байгаль орчин ногоон хөгжлийн шинэчлэлийн
бодлого үйл ажиллагаа МБЗ-ийн сарын уулзалт 5 сарын 27 2013
___________________________________________
ENGLISH WEBSITE PRESENTATIONS MONGOLIA REPORTS bdquoINTERVIEWSbdquo MONGOLIAN
BUSINESS NEWS‟ bdquoPHOTO GALLERY‟
The following 13 presentations are from the Mongolia Investment Summit- 2013 in Hong Kong
November 18-20
- Regulatory Update Navigating Mongolialsquos legal framework for foreign direct investment
Javkhlanbaatar Sereeter Director General Foreign Investment Regulations and Registration
Department MINISTRY OF ECONOMIC DEVELOPMENT OF MONGOLIA
- Investment keynote Investing into Mongolia in 2013 ndash Where do the opportunities lie James
Passin Co-Founder and Manager FIREBIRD MONGOLIA FUND
- Development keynote Key challenges and opportunities for continued growth in Mongolia
Randolph Koppa President TRADE AND DEVELOPMENT BANK OF MONGOLIA
- Outlining government policies and long-term plans for Mongolialsquos mining sector Amarjargal
Khurelbat Head of International Cooperation Division MINISTRY OF MINING OF MONGOLIA
- From copper to met coal Demand and price outlook and expected impact on Mongolialsquos economy
Ghee Peh Managing Director Metals and Mining Research UBS SECURITIES ASIA
- How Mongolian banks and financial institutions are dealing with the challenges and opportunities
of a fast growing economy Norihiko Kato Chief Executive Officer KHAN BANK
- Update on the Mongolian stock market ndash Impact of the new Securities Law Altai Khangai Chief
Executive Officer MONGOLIAN STOCK EXCHANGE
- From investment banking to trade finance to micro credits to insurance Amartuvshin Hanibal
Managing Director TENGER FINANCIAL GROUP LLC
- Spotlight presentations Showcasing Mongolian investment opportunities Peter Morrow Board
Director ASIA PACIFIC INVESTMENT PARTNERS
- Spotlight presentation Showcasing Mongolian investment opportunities Munkhbat Davaatseren
CEO of Golomt Securities GOLOMT BANK
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources
Batmunkh Batkhuu Chairman SHARYN GOL JSC
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources
Jimmie Wilde Chief Operating Officer BERKH UUL JSC
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources Mona
Forster Executive VP ENTREacuteE GOLD INC
The following two presentations are from the ―ANTI-CORRUPTION LEGISLATIONPOLICY
INTERNATIONAL BEST PRACTICE ON TRANSPARENCY training seminar for businesses in
Ulaanbaatar November 18 2013
-―International business standard on transparency by Jelena Pesic Director PwC
-―Finlandlsquos best practice on transparency and anti corruption by Dr Pekka Hallberg (as it is
worldlsquos number one) Emeritus President of the Supreme Administrative Court of Finland
The following 15 presentations are from the Mongolia Mining Summit Perth Australia October 29-
31 2013
bull Mongolialsquos Minerals Future and Development by Otgochuluu Ch Director General Department of
strategic policy and planning at Ministry of Mining Mongolia at the Mongolian Mining Summit 2013
Perth Australia Oct 29-31 2013
bull Mongolian Economy Investment OpportunitiesChallenges Jim Dwyer Executive Director
Business Council of Mongolia at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31
2013
bull Oyu Tolgoi Lessons from the Gobi Houston Spencer Vice President Communications and Media
Relations Oyu Tolgoi at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Market dynamics for Mongolian coking coal in the Chinese market Graeme Hancock President
and Chief Representative at Anglo American Mongolia at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Speech by Mr Ariunbold Byamba Deputy Director Erdenes MGL LLC at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull Launching Mining Projects in MongoliandashA Major Contractorlsquos Perspective Eric Erdenebat
Tseveendorj Country Manager Orica Limited at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Investing in a dynamic legislative environment Elisabeth Ellis Managing Partner Ulaanbaatar
Minter Ellison at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Sandvik In Pit Crushing amp Conveying (IPCC) Doug Turnbull Principal Mining Engineer Sandvik
Mining Systems at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Ovoot Coking Coal Project David Paull Managing Director Aspire Mining at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull The business of being a third neighbor David Landers General Manager East Asian Growth
Markets at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Nuurst Thermal Coal Project Daniel Rohr Chief Financial Officer Modun Resources Ltd at the
Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Culture matters in building sustainable long-term business relationships Hana Tserenkhand
Byambadash Business Development Consultant AusMon Consulting and Dr Christine Hogan Adjunct
Professor Curtin University Consultant amp Author at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Maximizing Business Benefits from Your IT Investment Brad Skeggs Executive Director COSOL at
the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Presentation by Battsengel Gotov CEO Mongolian Mining Corporation at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull Mongolian Mining Sector Present and Future Developments NAlgaa Executive Director
Mongolian National Mining Association at the Mongolian Mining Summit 2013 Perth Australia Oct
29-31 2013
The ―Mongolia Reports section includes the following
- ―Ministry of Finance of Mongolia 2013 Government Debt Auctions by Bank of Mongolia
- ―Doing Business in Mongolia 2013 Country Commercial Guide for US Companies by US
Embassy
- ―Real Estate Report 2013 by Mongolian Properties
- ―Selected Macroeconomic Indicators November 20 2013 by International Monetary Fund
- ―2013 Second Annual Mongolian CEO Survey from PricewaterhouseCoopers Audit LLC
- ―Selected Macroeconomic Indicators data through October 16 2013 by International Monetary
Fund
- ―IMF Completes 2013 Article IV Mission to Mongolia by International Monetary Fund
The following are added to Interview Section from the Oxford Business Group Mongolia Reports
2013 book
bull B Byambasaikhan Chairman Business Council of Mongolia ―Talk is cheap
bull President Ts Elbegdorj ―Diversifying for growth
bull Jim Dwyer Executive Director Business Council of Mongolia ―Non-mining sectors budding
bull Peter Morrow Chairman American University of Mongolia ―Filling in the blanks
bull N Zoljargal Governor Bank of Mongolia ―Sustainable vision
bull Gansukh Minister of Roads and Transportation ―Accessing new markets
bull J Od President MCS Group ―Building interest
bull B Chuluunbaatar President and CEO of Monnis Group ―Climbing the ranks
bull Cameron McRae President and CEO Oyu Tolgoi ―Sitting on a copper mine
BCMs English website includes the ―Mongolia Business News section where the Open Letter to
Parliament and Government is available for download
BCM continuously posts news stories and analysis of relevance to Mongolia at Mongolian Business
News before they are all put together each week for Fridays weekly NewsWire
The ―Photo Gallery contains photos from the 6th Anniversary BCM Renewal dinner on November
11 2013
BCM Football Cup 2013 pictures are posted to the website - httpbcmongoliaorgenphotos350-
enalbumalbumid=200
The BCM NewsWire will continue to be issued each Friday incorporating items already on the home
page for a consolidated account of the weeklsquos events
SOCIAL NETWORK WITH BCM
BCM LAUNCHES NEW LINKED-IN COMPANY PAGE
The Business Council of Mongolia has launched a new company page on the social networking
website LinkedIn to network its members and followers including small-medium enterprises (SMEs)
The new page will allow BCM to alert followers to the latest news and information critical to their
businesses Memberslsquo businesses will be promoted Additionally BCM plans to deliver monthly
infographics on the latest data as well as videos and other media content as they come The bulk of
the content on the new page will be in Mongolian language to better cater to BCMs Mongolian-
speaking audience and members The following link can direct you to the New BCMs Linked-in page
httpwwwlinkedincomcompanybusiness-council-of-mongoliatrk=company_logo
The Business Council of Mongolia (BCM) has expanded its reach to your favorite social networks
Keep up to date on the latest business deals in Mongolia and how the climate for investment is
improving each day with BCM
Add BCM on Facebook at httpswwwfacebookcomTheBusinessCouncilOfMongolia to read the
latest announcements and comment on events carried in the NewsWire with the community
Hear breaking news and announcements as they happen when you follow BCM on Twitter at
httpstwittercombcmongolia
We have now 2482 fans on our Facebook fans page 1527 connections on LinkedIn network and
835 followers on Twitter
Of course for news information interviews event photos and announcements regarding our
organization visit the official BCM website at httpbcmongoliaorgen
ECONOMIC INDICATORS
INFLATION
Year 2006 60 [source National Statistical Office of Mongolia (NSOM)]
Year 2007 151 [source NSOM]
Year 2008 221 [source NSOM]
Year 2009 42 [source NSOM]
Year 2010 130 [source NSOM]
Year 2011 102 [source NSOM]
November 30 2013 120 [source NSOM]
Year-over-year (y-o-y) nationwide
Note 111 y-o-y Ulaanbaatar city November 30 2013
CENTRAL BANK POLICY LOAN RATE
December 31 2008 975 [source IMF]
March 11 2009 1400 [source IMF]
May 12 2009 1275 [source IMF]
June 12 2009 1150 [source IMF]
September 30 2009 1000 [source IMF]
May 12 2010 1100 [source IMF]
April 28 2011 1150 [source IMF]
August 25 2011 1175 [source IMF]
October 25 2011 1225 [source IMF]
March 19 2012 1275 [source Mongol Bank]
April 18 2012 1325 [source Mongol Bank]
January 25 2013 1250 [source Mongol Bank]
April 8 2013 1150 [source Mongol Bank]
June 25 2013 1050 [source Mongol Bank]
CURRENCY RATES ndash DECEMBER 19 2013
Currency Name Currency Rate
US dollar USD 164138
Euro EUR 224680
Japanese yen JPY 1579
British pound GBP 268874
Hong Kong dollar HKD 21170
Chinese Yuan CNY 27031
Russian Ruble RUB 4981
South Korean won KRW 155
Disclaimer Except for reporting on BCMlsquos activities all information in the BCM NewsWire is
selected from various news sources Opinions are those of the respective news sources
- Investment keynote Investing into Mongolia in 2013 ndash Where do the opportunities lie James
Passin Co-Founder and Manager FIREBIRD MONGOLIA FUND
- Development keynote Key challenges and opportunities for continued growth in Mongolia
Randolph Koppa President TRADE AND DEVELOPMENT BANK OF MONGOLIA
- Outlining government policies and long-term plans for Mongolialsquos mining sector Amarjargal
Khurelbat Head of International Cooperation Division MINISTRY OF MINING OF MONGOLIA
- From copper to met coal Demand and price outlook and expected impact on Mongolialsquos economy
Ghee Peh Managing Director Metals and Mining Research UBS SECURITIES ASIA
- How Mongolian banks and financial institutions are dealing with the challenges and opportunities
of a fast growing economy Norihiko Kato Chief Executive Officer KHAN BANK
- Update on the Mongolian stock market ndash Impact of the new Securities Law Altai Khangai Chief
Executive Officer MONGOLIAN STOCK EXCHANGE
- From investment banking to trade finance to micro credits to insurance Amartuvshin Hanibal
Managing Director TENGER FINANCIAL GROUP LLC
- Spotlight presentations Showcasing Mongolian investment opportunities Peter Morrow Board
Director ASIA PACIFIC INVESTMENT PARTNERS
- Spotlight presentation Showcasing Mongolian investment opportunities Munkhbat Davaatseren
CEO of Golomt Securities GOLOMT BANK
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources
Batmunkh Batkhuu Chairman SHARYN GOL JSC
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources
Jimmie Wilde Chief Operating Officer BERKH UUL JSC
- Spotlight presentation Showcasing Mongolian investment opportunities ndash Natural Resources Mona
Forster Executive VP ENTREacuteE GOLD INC
The following two presentations are from the ―ANTI-CORRUPTION LEGISLATIONPOLICY
INTERNATIONAL BEST PRACTICE ON TRANSPARENCY training seminar for businesses in
Ulaanbaatar November 18 2013
-―International business standard on transparency by Jelena Pesic Director PwC
-―Finlandlsquos best practice on transparency and anti corruption by Dr Pekka Hallberg (as it is
worldlsquos number one) Emeritus President of the Supreme Administrative Court of Finland
The following 15 presentations are from the Mongolia Mining Summit Perth Australia October 29-
31 2013
bull Mongolialsquos Minerals Future and Development by Otgochuluu Ch Director General Department of
strategic policy and planning at Ministry of Mining Mongolia at the Mongolian Mining Summit 2013
Perth Australia Oct 29-31 2013
bull Mongolian Economy Investment OpportunitiesChallenges Jim Dwyer Executive Director
Business Council of Mongolia at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31
2013
bull Oyu Tolgoi Lessons from the Gobi Houston Spencer Vice President Communications and Media
Relations Oyu Tolgoi at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Market dynamics for Mongolian coking coal in the Chinese market Graeme Hancock President
and Chief Representative at Anglo American Mongolia at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Speech by Mr Ariunbold Byamba Deputy Director Erdenes MGL LLC at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull Launching Mining Projects in MongoliandashA Major Contractorlsquos Perspective Eric Erdenebat
Tseveendorj Country Manager Orica Limited at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Investing in a dynamic legislative environment Elisabeth Ellis Managing Partner Ulaanbaatar
Minter Ellison at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Sandvik In Pit Crushing amp Conveying (IPCC) Doug Turnbull Principal Mining Engineer Sandvik
Mining Systems at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Ovoot Coking Coal Project David Paull Managing Director Aspire Mining at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull The business of being a third neighbor David Landers General Manager East Asian Growth
Markets at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Nuurst Thermal Coal Project Daniel Rohr Chief Financial Officer Modun Resources Ltd at the
Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Culture matters in building sustainable long-term business relationships Hana Tserenkhand
Byambadash Business Development Consultant AusMon Consulting and Dr Christine Hogan Adjunct
Professor Curtin University Consultant amp Author at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Maximizing Business Benefits from Your IT Investment Brad Skeggs Executive Director COSOL at
the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Presentation by Battsengel Gotov CEO Mongolian Mining Corporation at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull Mongolian Mining Sector Present and Future Developments NAlgaa Executive Director
Mongolian National Mining Association at the Mongolian Mining Summit 2013 Perth Australia Oct
29-31 2013
The ―Mongolia Reports section includes the following
- ―Ministry of Finance of Mongolia 2013 Government Debt Auctions by Bank of Mongolia
- ―Doing Business in Mongolia 2013 Country Commercial Guide for US Companies by US
Embassy
- ―Real Estate Report 2013 by Mongolian Properties
- ―Selected Macroeconomic Indicators November 20 2013 by International Monetary Fund
- ―2013 Second Annual Mongolian CEO Survey from PricewaterhouseCoopers Audit LLC
- ―Selected Macroeconomic Indicators data through October 16 2013 by International Monetary
Fund
- ―IMF Completes 2013 Article IV Mission to Mongolia by International Monetary Fund
The following are added to Interview Section from the Oxford Business Group Mongolia Reports
2013 book
bull B Byambasaikhan Chairman Business Council of Mongolia ―Talk is cheap
bull President Ts Elbegdorj ―Diversifying for growth
bull Jim Dwyer Executive Director Business Council of Mongolia ―Non-mining sectors budding
bull Peter Morrow Chairman American University of Mongolia ―Filling in the blanks
bull N Zoljargal Governor Bank of Mongolia ―Sustainable vision
bull Gansukh Minister of Roads and Transportation ―Accessing new markets
bull J Od President MCS Group ―Building interest
bull B Chuluunbaatar President and CEO of Monnis Group ―Climbing the ranks
bull Cameron McRae President and CEO Oyu Tolgoi ―Sitting on a copper mine
BCMs English website includes the ―Mongolia Business News section where the Open Letter to
Parliament and Government is available for download
BCM continuously posts news stories and analysis of relevance to Mongolia at Mongolian Business
News before they are all put together each week for Fridays weekly NewsWire
The ―Photo Gallery contains photos from the 6th Anniversary BCM Renewal dinner on November
11 2013
BCM Football Cup 2013 pictures are posted to the website - httpbcmongoliaorgenphotos350-
enalbumalbumid=200
The BCM NewsWire will continue to be issued each Friday incorporating items already on the home
page for a consolidated account of the weeklsquos events
SOCIAL NETWORK WITH BCM
BCM LAUNCHES NEW LINKED-IN COMPANY PAGE
The Business Council of Mongolia has launched a new company page on the social networking
website LinkedIn to network its members and followers including small-medium enterprises (SMEs)
The new page will allow BCM to alert followers to the latest news and information critical to their
businesses Memberslsquo businesses will be promoted Additionally BCM plans to deliver monthly
infographics on the latest data as well as videos and other media content as they come The bulk of
the content on the new page will be in Mongolian language to better cater to BCMs Mongolian-
speaking audience and members The following link can direct you to the New BCMs Linked-in page
httpwwwlinkedincomcompanybusiness-council-of-mongoliatrk=company_logo
The Business Council of Mongolia (BCM) has expanded its reach to your favorite social networks
Keep up to date on the latest business deals in Mongolia and how the climate for investment is
improving each day with BCM
Add BCM on Facebook at httpswwwfacebookcomTheBusinessCouncilOfMongolia to read the
latest announcements and comment on events carried in the NewsWire with the community
Hear breaking news and announcements as they happen when you follow BCM on Twitter at
httpstwittercombcmongolia
We have now 2482 fans on our Facebook fans page 1527 connections on LinkedIn network and
835 followers on Twitter
Of course for news information interviews event photos and announcements regarding our
organization visit the official BCM website at httpbcmongoliaorgen
ECONOMIC INDICATORS
INFLATION
Year 2006 60 [source National Statistical Office of Mongolia (NSOM)]
Year 2007 151 [source NSOM]
Year 2008 221 [source NSOM]
Year 2009 42 [source NSOM]
Year 2010 130 [source NSOM]
Year 2011 102 [source NSOM]
November 30 2013 120 [source NSOM]
Year-over-year (y-o-y) nationwide
Note 111 y-o-y Ulaanbaatar city November 30 2013
CENTRAL BANK POLICY LOAN RATE
December 31 2008 975 [source IMF]
March 11 2009 1400 [source IMF]
May 12 2009 1275 [source IMF]
June 12 2009 1150 [source IMF]
September 30 2009 1000 [source IMF]
May 12 2010 1100 [source IMF]
April 28 2011 1150 [source IMF]
August 25 2011 1175 [source IMF]
October 25 2011 1225 [source IMF]
March 19 2012 1275 [source Mongol Bank]
April 18 2012 1325 [source Mongol Bank]
January 25 2013 1250 [source Mongol Bank]
April 8 2013 1150 [source Mongol Bank]
June 25 2013 1050 [source Mongol Bank]
CURRENCY RATES ndash DECEMBER 19 2013
Currency Name Currency Rate
US dollar USD 164138
Euro EUR 224680
Japanese yen JPY 1579
British pound GBP 268874
Hong Kong dollar HKD 21170
Chinese Yuan CNY 27031
Russian Ruble RUB 4981
South Korean won KRW 155
Disclaimer Except for reporting on BCMlsquos activities all information in the BCM NewsWire is
selected from various news sources Opinions are those of the respective news sources
bull Sandvik In Pit Crushing amp Conveying (IPCC) Doug Turnbull Principal Mining Engineer Sandvik
Mining Systems at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Ovoot Coking Coal Project David Paull Managing Director Aspire Mining at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull The business of being a third neighbor David Landers General Manager East Asian Growth
Markets at the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Nuurst Thermal Coal Project Daniel Rohr Chief Financial Officer Modun Resources Ltd at the
Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Culture matters in building sustainable long-term business relationships Hana Tserenkhand
Byambadash Business Development Consultant AusMon Consulting and Dr Christine Hogan Adjunct
Professor Curtin University Consultant amp Author at the Mongolian Mining Summit 2013 Perth
Australia Oct 29-31 2013
bull Maximizing Business Benefits from Your IT Investment Brad Skeggs Executive Director COSOL at
the Mongolian Mining Summit 2013 Perth Australia Oct 29-31 2013
bull Presentation by Battsengel Gotov CEO Mongolian Mining Corporation at the Mongolian Mining
Summit 2013 Perth Australia Oct 29-31 2013
bull Mongolian Mining Sector Present and Future Developments NAlgaa Executive Director
Mongolian National Mining Association at the Mongolian Mining Summit 2013 Perth Australia Oct
29-31 2013
The ―Mongolia Reports section includes the following
- ―Ministry of Finance of Mongolia 2013 Government Debt Auctions by Bank of Mongolia
- ―Doing Business in Mongolia 2013 Country Commercial Guide for US Companies by US
Embassy
- ―Real Estate Report 2013 by Mongolian Properties
- ―Selected Macroeconomic Indicators November 20 2013 by International Monetary Fund
- ―2013 Second Annual Mongolian CEO Survey from PricewaterhouseCoopers Audit LLC
- ―Selected Macroeconomic Indicators data through October 16 2013 by International Monetary
Fund
- ―IMF Completes 2013 Article IV Mission to Mongolia by International Monetary Fund
The following are added to Interview Section from the Oxford Business Group Mongolia Reports
2013 book
bull B Byambasaikhan Chairman Business Council of Mongolia ―Talk is cheap
bull President Ts Elbegdorj ―Diversifying for growth
bull Jim Dwyer Executive Director Business Council of Mongolia ―Non-mining sectors budding
bull Peter Morrow Chairman American University of Mongolia ―Filling in the blanks
bull N Zoljargal Governor Bank of Mongolia ―Sustainable vision
bull Gansukh Minister of Roads and Transportation ―Accessing new markets
bull J Od President MCS Group ―Building interest
bull B Chuluunbaatar President and CEO of Monnis Group ―Climbing the ranks
bull Cameron McRae President and CEO Oyu Tolgoi ―Sitting on a copper mine
BCMs English website includes the ―Mongolia Business News section where the Open Letter to
Parliament and Government is available for download
BCM continuously posts news stories and analysis of relevance to Mongolia at Mongolian Business
News before they are all put together each week for Fridays weekly NewsWire
The ―Photo Gallery contains photos from the 6th Anniversary BCM Renewal dinner on November
11 2013
BCM Football Cup 2013 pictures are posted to the website - httpbcmongoliaorgenphotos350-
enalbumalbumid=200
The BCM NewsWire will continue to be issued each Friday incorporating items already on the home
page for a consolidated account of the weeklsquos events
SOCIAL NETWORK WITH BCM
BCM LAUNCHES NEW LINKED-IN COMPANY PAGE
The Business Council of Mongolia has launched a new company page on the social networking
website LinkedIn to network its members and followers including small-medium enterprises (SMEs)
The new page will allow BCM to alert followers to the latest news and information critical to their
businesses Memberslsquo businesses will be promoted Additionally BCM plans to deliver monthly
infographics on the latest data as well as videos and other media content as they come The bulk of
the content on the new page will be in Mongolian language to better cater to BCMs Mongolian-
speaking audience and members The following link can direct you to the New BCMs Linked-in page
httpwwwlinkedincomcompanybusiness-council-of-mongoliatrk=company_logo
The Business Council of Mongolia (BCM) has expanded its reach to your favorite social networks
Keep up to date on the latest business deals in Mongolia and how the climate for investment is
improving each day with BCM
Add BCM on Facebook at httpswwwfacebookcomTheBusinessCouncilOfMongolia to read the
latest announcements and comment on events carried in the NewsWire with the community
Hear breaking news and announcements as they happen when you follow BCM on Twitter at
httpstwittercombcmongolia
We have now 2482 fans on our Facebook fans page 1527 connections on LinkedIn network and
835 followers on Twitter
Of course for news information interviews event photos and announcements regarding our
organization visit the official BCM website at httpbcmongoliaorgen
ECONOMIC INDICATORS
INFLATION
Year 2006 60 [source National Statistical Office of Mongolia (NSOM)]
Year 2007 151 [source NSOM]
Year 2008 221 [source NSOM]
Year 2009 42 [source NSOM]
Year 2010 130 [source NSOM]
Year 2011 102 [source NSOM]
November 30 2013 120 [source NSOM]
Year-over-year (y-o-y) nationwide
Note 111 y-o-y Ulaanbaatar city November 30 2013
CENTRAL BANK POLICY LOAN RATE
December 31 2008 975 [source IMF]
March 11 2009 1400 [source IMF]
May 12 2009 1275 [source IMF]
June 12 2009 1150 [source IMF]
September 30 2009 1000 [source IMF]
May 12 2010 1100 [source IMF]
April 28 2011 1150 [source IMF]
August 25 2011 1175 [source IMF]
October 25 2011 1225 [source IMF]
March 19 2012 1275 [source Mongol Bank]
April 18 2012 1325 [source Mongol Bank]
January 25 2013 1250 [source Mongol Bank]
April 8 2013 1150 [source Mongol Bank]
June 25 2013 1050 [source Mongol Bank]
CURRENCY RATES ndash DECEMBER 19 2013
Currency Name Currency Rate
US dollar USD 164138
Euro EUR 224680
Japanese yen JPY 1579
British pound GBP 268874
Hong Kong dollar HKD 21170
Chinese Yuan CNY 27031
Russian Ruble RUB 4981
South Korean won KRW 155
Disclaimer Except for reporting on BCMlsquos activities all information in the BCM NewsWire is
selected from various news sources Opinions are those of the respective news sources
The BCM NewsWire will continue to be issued each Friday incorporating items already on the home
page for a consolidated account of the weeklsquos events
SOCIAL NETWORK WITH BCM
BCM LAUNCHES NEW LINKED-IN COMPANY PAGE
The Business Council of Mongolia has launched a new company page on the social networking
website LinkedIn to network its members and followers including small-medium enterprises (SMEs)
The new page will allow BCM to alert followers to the latest news and information critical to their
businesses Memberslsquo businesses will be promoted Additionally BCM plans to deliver monthly
infographics on the latest data as well as videos and other media content as they come The bulk of
the content on the new page will be in Mongolian language to better cater to BCMs Mongolian-
speaking audience and members The following link can direct you to the New BCMs Linked-in page
httpwwwlinkedincomcompanybusiness-council-of-mongoliatrk=company_logo
The Business Council of Mongolia (BCM) has expanded its reach to your favorite social networks
Keep up to date on the latest business deals in Mongolia and how the climate for investment is
improving each day with BCM
Add BCM on Facebook at httpswwwfacebookcomTheBusinessCouncilOfMongolia to read the
latest announcements and comment on events carried in the NewsWire with the community
Hear breaking news and announcements as they happen when you follow BCM on Twitter at
httpstwittercombcmongolia
We have now 2482 fans on our Facebook fans page 1527 connections on LinkedIn network and
835 followers on Twitter
Of course for news information interviews event photos and announcements regarding our
organization visit the official BCM website at httpbcmongoliaorgen
ECONOMIC INDICATORS
INFLATION
Year 2006 60 [source National Statistical Office of Mongolia (NSOM)]
Year 2007 151 [source NSOM]
Year 2008 221 [source NSOM]
Year 2009 42 [source NSOM]
Year 2010 130 [source NSOM]
Year 2011 102 [source NSOM]
November 30 2013 120 [source NSOM]
Year-over-year (y-o-y) nationwide
Note 111 y-o-y Ulaanbaatar city November 30 2013
CENTRAL BANK POLICY LOAN RATE
December 31 2008 975 [source IMF]
March 11 2009 1400 [source IMF]
May 12 2009 1275 [source IMF]
June 12 2009 1150 [source IMF]
September 30 2009 1000 [source IMF]
May 12 2010 1100 [source IMF]
April 28 2011 1150 [source IMF]
August 25 2011 1175 [source IMF]
October 25 2011 1225 [source IMF]
March 19 2012 1275 [source Mongol Bank]
April 18 2012 1325 [source Mongol Bank]
January 25 2013 1250 [source Mongol Bank]
April 8 2013 1150 [source Mongol Bank]
June 25 2013 1050 [source Mongol Bank]
CURRENCY RATES ndash DECEMBER 19 2013
Currency Name Currency Rate
US dollar USD 164138
Euro EUR 224680
Japanese yen JPY 1579
British pound GBP 268874
Hong Kong dollar HKD 21170
Chinese Yuan CNY 27031
Russian Ruble RUB 4981
South Korean won KRW 155
Disclaimer Except for reporting on BCMlsquos activities all information in the BCM NewsWire is
selected from various news sources Opinions are those of the respective news sources
ECONOMIC INDICATORS
INFLATION
Year 2006 60 [source National Statistical Office of Mongolia (NSOM)]
Year 2007 151 [source NSOM]
Year 2008 221 [source NSOM]
Year 2009 42 [source NSOM]
Year 2010 130 [source NSOM]
Year 2011 102 [source NSOM]
November 30 2013 120 [source NSOM]
Year-over-year (y-o-y) nationwide
Note 111 y-o-y Ulaanbaatar city November 30 2013
CENTRAL BANK POLICY LOAN RATE
December 31 2008 975 [source IMF]
March 11 2009 1400 [source IMF]
May 12 2009 1275 [source IMF]
June 12 2009 1150 [source IMF]
September 30 2009 1000 [source IMF]
May 12 2010 1100 [source IMF]
April 28 2011 1150 [source IMF]
August 25 2011 1175 [source IMF]
October 25 2011 1225 [source IMF]
March 19 2012 1275 [source Mongol Bank]
April 18 2012 1325 [source Mongol Bank]
January 25 2013 1250 [source Mongol Bank]
April 8 2013 1150 [source Mongol Bank]
June 25 2013 1050 [source Mongol Bank]
CURRENCY RATES ndash DECEMBER 19 2013
Currency Name Currency Rate
US dollar USD 164138
Euro EUR 224680
Japanese yen JPY 1579
British pound GBP 268874
Hong Kong dollar HKD 21170
Chinese Yuan CNY 27031
Russian Ruble RUB 4981
South Korean won KRW 155
Disclaimer Except for reporting on BCMlsquos activities all information in the BCM NewsWire is
selected from various news sources Opinions are those of the respective news sources
INFLATION
Year 2006 60 [source National Statistical Office of Mongolia (NSOM)]
Year 2007 151 [source NSOM]
Year 2008 221 [source NSOM]
Year 2009 42 [source NSOM]
Year 2010 130 [source NSOM]
Year 2011 102 [source NSOM]
November 30 2013 120 [source NSOM]
Year-over-year (y-o-y) nationwide
Note 111 y-o-y Ulaanbaatar city November 30 2013
CENTRAL BANK POLICY LOAN RATE
December 31 2008 975 [source IMF]
March 11 2009 1400 [source IMF]
May 12 2009 1275 [source IMF]
June 12 2009 1150 [source IMF]
September 30 2009 1000 [source IMF]
May 12 2010 1100 [source IMF]
April 28 2011 1150 [source IMF]
August 25 2011 1175 [source IMF]
October 25 2011 1225 [source IMF]
March 19 2012 1275 [source Mongol Bank]
April 18 2012 1325 [source Mongol Bank]
January 25 2013 1250 [source Mongol Bank]
April 8 2013 1150 [source Mongol Bank]
June 25 2013 1050 [source Mongol Bank]
CURRENCY RATES ndash DECEMBER 19 2013
Currency Name Currency Rate
US dollar USD 164138
Euro EUR 224680
Japanese yen JPY 1579
British pound GBP 268874
Hong Kong dollar HKD 21170
Chinese Yuan CNY 27031
Russian Ruble RUB 4981
South Korean won KRW 155
Disclaimer Except for reporting on BCMlsquos activities all information in the BCM NewsWire is
selected from various news sources Opinions are those of the respective news sources