BUSINESS COUNCIL of MONGOLIA NewsWire

www.bcmongolia.org info@bcmongolia.org

Issue 334-335 – July 25, 2014

A DOUBLE ISSUE, WITH STORIES FROM NAADAM WEEK WHEN THE NEWSWIRE WAS NOT

PUBLISHED.

NEWS HIGHLIGHTS:

Business

Oyu Tolgoi exports 140,000 tons of concentrate;

Moody's downgrades three Mongolian banks after sovereign downgrade;

S&P removes rating suspension on Golomt;

TDB pulls U.S. dollar bond offering due to Europe debt turmoil;

BDSec to issue 6 mn shares;

Bridge Group opens strawberry farm;

Concentrator commissioned at Tumurtein iron ore deposit;

Kincora Copper exploration yields “very encouraging” initial results;

Xanadu Mines tastes copper and gold success drilling in Mongolia;

Aspire Mining to supply Ovoot coal to Zavkhan power station;

Aspire Mining: to benefit from Russia, China, Mongolia infrastructure deals;

Achit-Ikht begins copper cathode production;

Austrian firm to lead five projects in health care;

MIAT to open direct flights to Singapore;

Pizza Hut opens in Ulaanbaatar;

Germany's Paulaner beer arrives in Mongolia;

TDB opens representative office in Japan;

Making opportunities in Mongolia;

New board members appointed at Development Bank;

Oil & Oil Shale Mongolia 2014 in September;

Italian machinery makers see market opportunities in Mongolia;

MSE CEO negotiates with LSE in London;

Salkhit wind farm investment wins EBRD U.S. Treasury award;

Emerging nations bloc to open development bank.

Economy

Mongol Bank: FX auction, swap agreements, 1-week bills, treasury bills;

Moody's downgrades Mongolia sending its currency to record low;

Mongolia bonds a buy for ING after Moody‟s cut spurs drop;

Inspection finds poor construction at Khushigt International Airport;

15 new train cars set off for Moscow;

Samurai bond funds to be spent for tanneries;

Leather producers look to bolster industry with shoe production;

New tax rule for coal exports launched;

Mongolia bolsters Credit Guarantee Fund for small business;

UB to grant free land beginning August;

New mining framework may not be enough to rekindle FDI;

Mongol Bank releases report on Mongolian travel expenditures;

WHO declares Mongolia free of measles;

Two found infected with cow pox in UB;

Orbis launches 7th Flying Eye Hospital program in Mongolia;

Understanding Asia's wool industry;

Encouraging mining FDI in Mongolia - EDITORIAL.

Politics

Cabinet approves common minerals licensing regulation;

Revised draft bill on press freedom submitted to parliament;

President holds powwow for squabbling DP factions;

MPP to hold party forum in November;

Consulate General to open in Bishkek;

Will Mongolia be the next SCO member?;

Japan, Mongolia ink free trade pact;

Mongolia to become part of Australia‟s „New Colombo Plan‟;

Mongolia vies for mid-term development partnership with Russia;

U.S. Ex-Im Bank reauthorization is a “no-brainer,” says NAMBC chair;

Battulga arrives in N. Korea;

President thanks Canadian Ambassador in farewell;

Inspectors find violations at 104 construction sites in Khan Uul;

Groups balk at shutdown of website for reporting on business linked to premier;

Khukh Mongol, Bosoo Mongol attack Uvurkhangai soum;

Seized dinosaur bones return to Mongolia;

Mongolia expands its resource exploration options;

New world record-Walking in Mongolia.

Others

New Mongolian Laws;

Announcements;

BCM Updates - Working Groups; Websites; Social Networks; Photo Gallery.

ECONOMIC INDICATORS

Weekly Market Indicators;

Inflation;

Central bank Policy Rate;

Currency Rates.

*Click on titles above to link to articles.

SPONSORS

Khan Bank International SOS

Wagner Asia Automotive

Invest Mongolia Agency

BUSINESS

OYU TOLGOI EXPORTS 140,000 TONS OF CONCENTRATE

Turquoise Hill Resources Ltd. on 16 July reported 140,000 tons of concentrate produced for total

production of 242,900 tons this year in its quarterly production report on the Oyu Tolgoi copper-

gold mine.

During the quarter, concentrate sales increased significantly driven by ongoing improvements in

customer logistics and marketing, according to the report, which was released coinciding with the

first anniversary of commencement of concentrate shipments. As a result, sales exceeded

production, resulting in an inventory drawdown for the quarter.

―Today‘s quarterly production and sales figures show that we are making the Oyu Tolgoi mine

stronger as we continue on our path to becoming a safe, sustainable, profitable, and internationally

competitive business,‖ said Oyu Tolgoi LLC President and Chief Executive Officer Craig Kinnell.

―Last week‘s anniversary was a true milestone for Oyu Tolgoi - and Mongolia - as we celebrated the

first anniversary of shipments of product.‖

The miner also reported on its progress in maintaining its commitment to the local community.

Water recycling has now reached 86.4 percent, meaning Oyu Tolgoi reuses each drop of water more

than five times. ―This makes it one of the very best copper mines in the world for water efficiency,

using less than half the water per ton of ore processed than average copper mines worldwide,‖

reads the Source. A five-year investment of more than USD 126 million in education and training has

resulted in the training of more than 13,000 Mongolians. Also, more than 200,000 seedlings have

been planted.

Source: Oyu Tolgoi LLC

MOODY'S DOWNGRADES THREE MONGOLIAN BANKS AFTER SOVEREIGN DOWNGRADE

Moody's Investors Service has downgraded the local currency long-term deposit ratings for Khan

Bank LLC, XacBank LLC, and Trade and Development Bank (TDB) of Mongolia LLC to B2 from B1. At

the same time, Moody's has downgraded the foreign currency long-term senior unsecured debt

ratings for TDB to B3 from B1. The outlook for all the ratings is negative. The rating action is

related to the recent revision of Mongolia's sovereign credit rating because the creditworthiness of

the Mongolian banking system is highly correlated to the sovereign. The sovereign downgrade was

driven by its strained external liquidity position, as reflected by a sharp loss in foreign-exchange

reserves. Furthermore, expansionary monetary and fiscal policies have added to demand pressures,

fueled inflation, and heightened spillover risks to the banking system and the balance of payments.

Accompanied by a continued rise in the external debt burden, these factors increase the country's

vulnerability to external and domestic shocks relative to rating peers. Separately, Moody's rating

action on the three banks also takes into account the risks to the banks stemming from the

Mongolian government's pump-priming measures, some of which are heavily credit-driven.

Specifically, the Bank of Mongolia—in addition to policy-rate reductions and fiscal spending—

provided MNT 4.3 trillion (USD 2.6 billion) in loans to the banking system as of end-2013,

representing about 40 percent of total credit for the banking system. The banks lent these loans to

target industries and their assets accordingly grew by 74 percent and loans by 54 percent during

2013. These developments—against the current backdrop of macro-economic and export

deterioration—have increased the risks to the banks' liquidity, profitability, asset quality and

ultimately their capital adequacy.

Source: Moody's Investors Service

S&P REMOVES RATING SUSPENSION ON GOLOMT

Standard and Poor's Rating Agency has removed its suspension of the rating of Golomt Bank LLC,

lowering its rating to B with a negative outlook.

The Source reads: ―We have received sufficient information from Mongolia-based Golomt to

maintain surveillance, including the 2013 annual report. We expect Golomt's loan quality to

continue to deteriorate over the next 12 months. The ratings no longer benefit from extraordinary

government support following the downgrade of the sovereign in April 2014, while the ratings on

the bank were suspended. We are lowering our long-term issuer credit rating on Golomt to 'B' from

'B+'. We are affirming the 'B' short-term issuer credit rating on the bank. The outlook is negative,

which reflects our view that economic risks in Mongolia could increase over the next 12 months and

pressure the ratings on the bank.‖

Source: Standard & Poor's Financial Services

TDB PULLS U.S. DOLLAR BOND OFFERING DUE TO EUROPE DEBT TURMOIL

Trade and Development Bank (TDB) of Mongolia LLC pulled a planned U.S. dollar bond offering

because of financial market turmoil triggered by a debt crisis at Portugal's Banco Espirito Santo, IFR

reported, citing a banking source. TDBM, the largest bank in Mongolia, had expected to sell a five-

year bond. It was indicating a yield in the area of 11.25 percent on Thursday morning.

"When Europe opened, European accounts were shut due to the soured sentiment. So it is only

prudent for us to call the deal off and wait for a better window to tap the market," a banker on the

TDB deal said. "Also with this volatility, the deal would not be performing well in the secondary

market," the banker added.

TDB's canceled offering was part of the bank's USD 1 billion medium-term notes (MTN) program. The

bank is 73.1 percent owned by Chairman Erdenebileg Doljin and his son Tulga Erdenebileg and 5

percent by Goldman Sachs. The rest is owned by a few other individuals, according to the

prospectus. Portugal's BES reportedly missed a coupon payment on its bonds. Global equity markets

tumbled on the news as investors began to worry about the health of European banks.

In spite of the high yield on Mongolia's proposed bond, investors had already been concerned about

prospects for the country's commodity-reliant economy and the bank's concentration of loans to the

commodity and construction sectors.

Source: Reuters

BDSEC TO ISSUE 6 MN SHARES

The Financial Regulatory Commission on 7 July approved BDSec JSC's request to issue six million

shares for a right offering with a fund-raising goal of approximately USD 2.5 million.

Prices for the pre-emption rights and public offering are set at MNT 1,931 and MNT 2,146,

respectively, and will be fully underwritten. The underwriter has committed to a placement of

some 41.7 million shares and 41.7 million options (exercisable at USD 0.06 per option within three

months of grant) raising USD 2.5 million (assuming no options are exercised).

Source: BDSec JSC

BRIDGE GROUP OPENS STRAWBERRY FARM

Bridge Group on 2 July opened a fruit and vegetable farm that will produce 4 tons of strawberries

each year.

The farm, which is located 39 kilometers from Ulaanbaatar, was established in cooperation with

Japan's Farmdo, and the Ministry of Industry and Agriculture provided 4,800 pieces of strawberries

for planting. The farm has 8 greenhouses for growing strawberries to be cultivated annually.

Bridge Group will sell the strawberries at the Everyday supermarket.

Source: Udriin Sonin

CONCENTRATOR COMMISSIONED AT TUMURTEIN IRON ORE DEPOSIT

The state-owned Darkhan Iron Factory on 1 July launched operations for its concentrator facility for

the Tumurtein iron ore deposit in Selenge Aimag.

The facility will produce up to 4 million tons of 55 percent iron concentrate using the dry magnet

concentration method. The Tumertein deposit has a resource of 229.3 million tons. The plant was

built with a concession agreement with Mongolian company QSC and utilizes equipment from the

United States' Trio Co.

Darkhan Iron recently increased workers salaries 25 percent, despite the falling market for iron ore,

said Deputy Director O. Bolor-Erdene, adding that layoffs were also not anticipated. Work is

currently underway to install 50 kilometers of 110-kilowatt electricity lines, a 16-megawatt

electricity generation substation, and 34.5 kilometers of rail for transport of the concentrate.

Darkhan Iron plans to launch the second phase of development with the construction of a steel

plant, which it says it plans to complete in 2017.

Source: Udriin Sonin

KINCORA COPPER EXPLORATION YIELDS “VERY ENCOURAGING” INITIAL RESULTS

Kincora Copper Ltd. released what it called ―very encouraging‖ initial exploration results from

Mongolia, in a new area which is now being known as Shargal Tolgoi—which means ―Yellowish Hill.‖

This new mineralized copper zone is adjacent to a prominent regional fault to the southeast of

previous drilling and mineralization at West Kasulu, Kincora said. Assay results from drilling are

currently pending, but the company has said that all holes yielded ―at least broad visual lower

grade copper mineralization‖. Three drill holes have thus far been completed, while drilling

continues in two others.

―Initial exploration activities this field season are very encouraging, supporting our strategy of

testing large scale targets in line with known copper porphyry ore bodies, including Oyu Tolgoi,‖

said Chief Executive Sam Spring. ―The successful identification of at least broad visual lower grade

copper mineralization in all drill holes, noting assay results are pending, and the favorable near

surface expressions to date, has confirmed our geological model.‖

The drilling campaign also expands the copper porphyry potential at Bronze Fox in a significant and

new mineralized copper zone, Spring said.

Source: Proactive Investors

XANADU MINES TASTES COPPER AND GOLD SUCCESS DRILLING IN MONGOLIA

Xanadu Mines Ltd. has received assays from step-out drilling at Altan Tolgoi which did not

disappoint with widths and good copper and gold grades intersected.

At the Kharmagtai project, located in the South Gobi porphyry copper province which hosts the

world-class Oyu Tolgoi copper-gold mine, hole KHDDH343 returned 505.6 meters at 0.38 percent

copper and 0.35 grams per ton gold from 58 meters. It also intersected visible copper sulphides.

Hole KHDDH344 intersected visible copper sulphides from 28.1 meters to 114.0 meters and from 223

meters to the current hole depth of 331 meters. The hole KHDDH343 was a 100 meters step out

from historical drilling and tested a buried IP anomaly along strike from Altan Tolgoi.

A second diamond drill rig has moved to Kharmagtai to advance the eastward step out drilling. The

rig has started drilling with additional results to be released when received.

Source: Proactive Investors

ASPIRE MINING TO SUPPLY OVOOT COAL TO ZAVKHAN POWER STATION

Aspire Mining Ltd. has demonstrated the quality of its Ovoot Coking Coal Project in Mongolia,

reaching a non-binding memorandum of understanding to sell up to 250,000 tons of oxidized coal

per annum to Zavkhan Power Station.

Small quantities of oxidized (non-coking coal) would have been produced as part of the Ovoot

Project mine plan and are not included in its probable coal reserves of 255 million tons. The

memorandum also covers the supply of 35 megawatts of power per year to the Ovoot Project from

Zavkhan. The Zavkhan Power Station, located 70 kilometers south of Ovoot, is currently under

constructed by New Asia Group, which has a concession to build, own and operate this power

station to supply northern Mongolia with power. It is expected to be commissioned in late 2015.

Source: Proactive Investors

ASPIRE MINING: TO BENEFIT FROM RUSSIA, CHINA, MONGOLIA INFRASTRUCTURE DEALS

The Northern Rail Line that Aspire Mining Ltd. is developing in Mongolia could become an important

link for Russian-Chinese trade as it moves from a project-specific rail connection to becoming part

of a network.

Along with the Tavan Tolgoi mine, Ovoot is recognized as one of the key potential coal suppliers to

Mongolia‘s Sainshand Industrial Park. Current off-take interest in Ovoot coking coal exceeds

targeted production. The Ovoot project requires a 547-kilometer (USD 1.3 billion) rail line linking

the project to existing rail infrastructure. Request for a concession from Northern Railways LLC is

awaiting approval for construction by the Mongolian government. This would de-risk the entire

Ovoot project.

Financing interest has already been received for USD 1.3 billion to construct the rail line. It may

also find funding support from Russian institutional investors for both the rail and Ovoot

development. Mongolia has embarked on a massive upgrade of its railway system that should see

the development as part of a new and upgraded country-wide network.

Source: Proactive Investors

ACHIT-IKHT BEGINS COPPER CATHODE PRODUCTION

The Achit-Ikht copper concentrator in Orkhon Aimag has launched its copper cathode plant.

The cathode plant, which has a processing capacity for 10,000 tons of copper cathode per year, has

extracted about 30 tons of pure copper, according to an unnamed, unofficial source. Although

Japan's Marubeni Corp. and Trafigura Beheer BV have expressed interest in purchasing copper

concentrate for the plant, Achit-Ikht has still yet to export copper.

Source: Unuudur

AUSTRIAN FIRM TO LEAD FIVE PROJECTS IN HEALTH CARE

The Cabinet Secretariat on 1 July named Austria's Vamed Engineering GmbH & Co. Kg, to execute

five projects proposed by the Ministry of Health.

The five projects will finance the purchase of new equipment for the National Cancer Center of

Mongolia and update equipment at the Maternal and Child Health Research Center and the State

Central First Hospital.

Mongolia and Austria have yet to exercise a partnership established in November 2011 to open

concession agreements in health care. Now, with that agreement due to end this month, Mongolia is

streamlining the process so that it can take advantage of the EUR 40 million in low-interest credit

to come from Austria as part of that agreement.

Source: InfoMongolia.com

MIAT TO OPEN DIRECT FLIGHTS TO SINGAPORE

MIAT Mongolian Airlines has announced a new direct flight from Ulaanbaatar to Singapore to launch

on 20 September. MIAT also recently opened direct flights to Frankfurt, Germany.

Source: InfoMongolia.com

PIZZA HUT OPENS IN ULAANBAATAR

A grand opening ceremony for the first Pizza Hut to open in Mongolia was held in Ulaanbaatar on 14

July.

Pizza Hut, which is a subsidiary of Yum! Brands, Inc., follows the opening of another Yum!

Franchise, KFC, in 2013. Both restaurants have opened with Tavan Bogd Foods LLC, a subsidiary of

Tavan Bogd Group, acting as the franchise operator.

Among those in attendance at the ceremony were U.S. Ambassador Piper Campbell and Bayangol

District Governor Demberel Orosoo and Yum! Restaurants International General Manager for Asia

Franchises Vipul Chawla, and Tavan Bogd Foods LLC Chief Executive Officer Dashdavaa Khulan.

Source: Info Mongolia

GERMANY'S PAULANER BEER ARRIVES IN MONGOLIA

Gem International LLC has begun distribution of German beer, Paulaner, in Mongolia. An official

opening ceremony was held for the beer, which it says is ―the most sold unfiltered beer in the

world.‖ Paulaner is distributed in 80 countries around the world.

Source: Unuudur

TDB OPENS REPRESENTATIVE OFFICE IN JAPAN

Trade and Development Bank (TDB) of Mongolia LLC opened its first representative office in Japan

on 23 July, during an official visit by President Tsakhia Elbegdorj. The office will be staffed with 9

personnel and will cooperate with Japanese financial entities including Bank of Tokyo Mitsubishi,

Sumitomo Mitsui Banking Corp., Mizuho Corporate Bank, JCB Intergenerational and MG Leasing.

Source: Unuudur

MAKING OPPORTUNITIES IN MONGOLIA

Given the Irish obsession with the weather, you‘d wonder why anyone would actively choose to

move to the coldest capital on the planet. But in 2011, 31-year-old Adrienne Youngman from Dingle

did just that.

Within three months of marrying her fiancé Tom, she agreed to move with him to Ulaanbaatar in

Mongolia, having never set foot in the country. Her love for adventure and travel began when, as a

small child, Youngman and her family moved to Zimbabwe for three years, after her father

answered a call for teachers to help stabilize the country after independence. ―When we arrived,

there was nowhere for me and my sister to go to school, so my mother set one up.‖

She lived in Dingle, Ireland between the ages of 6 and 10 before her family then moved to London

where she spent her teens and eventually went on to study English literature at Cambridge. After

working for a couple of companies as a management and brand consultant, she landed a role with

alcohol-giant Diageo in 2007 and, once again, her passport began to fill up with stamps.

She met Tom and the pair decided to get married in 2011. While many couples would feel under

pressure to start putting down roots, Youngman had found someone who shared her sense of

adventure. While in Mongolia the couple noticed a gaping hole in the recruitment sector and

decided to dive in, as Tom had experience in the industry. Now their agency, Mongolia Talent

Network, aims to help both Mongolians and expats find jobs, but that‘s not as straightforward as it

sounds.

―There‘s a real shortage of specific qualifications and depth of experience here. Despite this being

a mining-driven economy, less than 2 percent of graduates finished with a mining-specific degree

last year. Qualifications like law and engineering are also under-represented. ―The challenge is to

find and recruit locals as well as expats that have experience in emerging markets such as Mongolia.

That has meant a significant demand for our type of work. We currently employ 10 people in

Ulaanbaatar and hope to expand the business internationally in the coming months.‖

Source: Irish Times

NEW BOARD MEMBERS APPOINTED AT DEVELOPMENT BANK

Three new board members for the Development Bank of Mongolia were appointed at a 16 July

meeting of the Cabinet Secretariat.

The appointments made to replace former State Secretary at the Ministry of Finance D. Battur,

Khadgalamjiin Daatgal Corp. Executive Director B. Lkhagvasuren, and Mongolian Bankers Association

Executive Director B. Naidalaa upon notice of their resignations. Their replacements are Bank of

Mongolia Director of the Supervision Department D. Ganbat, Director of the Budget Expenditure

Division at Fiscal Policy and Planning Department at the Ministry of Finance, O. Khuyagtsogt, and

Acting Director of Public Administration and Management at the Ministry of Economic Development

R. Baasanjav.

Source: InfoMongolia.com

OIL & OIL SHALE MONGOLIA 2014 IN SEPTEMBER

The Oil & Oil Shale Mongolia 2014 international investment conference will be held 10 and 11

September in Ulaanbaatar, Mongolia. The event was postponed from its original schedule dates in

April so the event could be passed after the Law on Petroleum was amended. Organizers hope to

introduce the revised law to investors.

Source: Oil Mongolia

ITALIAN MACHINERY MAKERS SEE MARKET OPPORTUNITIES IN MONGOLIA

Meetings between Mongolian authorities and an Italian industry mission organized by the Association

of Italian Textile Machinery Manufacturers (ACIMIT) and ICE—the Italian Trade Agency in Mongolia—

have confirmed the need for modernizing existing technology for the processing of cashmere.

An institutional trade mission in Mongolia, organized by ACIMIT and ICE was held 7 to 9 July in

Ulaanbaatar where nine Italian machinery manufacturers presented their latest and most suitable

technology for the processing of cashmere. The three-day mission also served to strengthen ties

between the local authorities and ACIMIT‘s management.

"Mongolia is a market in which Italian machinery manufacturers can find excellent opportunities,

thanks to the expertise they have developed in the technology required for the production of this

raw material," ACIMIT President Raffaella Carabelli said.

Source: Fibre2Fashion

MSE CEO NEGOTIATES WITH LSE IN LONDON

Mongolian Stock Exchange Acting Chief Executive Officer D. Angar negotiated in London for the

introduction of new financial products to the Mongolian bourse to attract greater foreign

investment.

Angar met with representatives of the London Stock Exchange (LSE), Clearinghouse LCH.Clearnet,

the FTSE index and the European Bank for Reconstruction and Development (EBRD) in London from

15 to 18 July.

Source: InfoMongolia.com

SALKHIT WIND FARM INVESTMENT WINS EBRD U.S. TREASURY AWARD

The European Bank for Reconstruction and Development has received the U.S. Treasury

Development Impact Honors for its equity participation in the Salkhit wind farm project, as it

‖reflect the critical work of the MDB [multi-lateral development banks], which strengthens

communities around the world, including in fragile states.‖

―The project captures the best of the EBRD: a strong presence on the ground with very good

relationships with the government in order to develop the legal and regulatory framework of this

public-private partnership project; the capability to work with local and international shareholders;

quick decision-making on the early equity portion of the transaction; the capability to provide long-

term debt financing; and the capacity to manage grant funding from international donors,‖ said

Riccardo Puliti, ERBD managing director for energy and natural resources, when receiving the

award.

The Salkhit wind farm, the first large-scale renewable project in Mongolia and the first new

electricity generator in the country for the last 30 years, was conceived by local investors with

early EBRD equity participation. The plant, which is located 70 kilometer from Ulaanbaatar,

received long-term financing from the EBRD and the Netherlands Development Finance Company

FMO (USD 4D million each) and further equity contribution from General Electric (GE) Co., which

also provided the turbines to harness the powerful Mongolian wind.

The Mongolian wind farm project benefited from donor support provided by Japan (to the Mongolian

government for the legal and regulatory framework) and Luxembourg (for environmental and social

assistance).

Source: European Bank for Reconstruction and Development

EMERGING NATIONS BLOC TO OPEN DEVELOPMENT BANK

At a meeting in Brazil, the leaders of Brazil, Russia, India, China and South Africa announced on

Tuesday that they were establishing a development bank to challenge the influence of venerable

institutions like the World Bank and the International Monetary Fund.

The New Development Bank, which will be based in Shanghai, will open with an initial capitalization

of USD 50 billion. India will name the first president, according to a statement from the leaders of

the so-called BRICS group of nations who have gathered in the northeastern city of Fortaleza, and

Russia and Brazil will select other top officers. The five-nation bloc also said it would create a USD

100 billion fund of currency reserves for members to use during balance of payments crises.

Pointing to concerns that the U.S. Federal Reserve was stepping back in its aggressive efforts to

stimulate the American economy, possibly opening the way for interest rate increases in the United

States, Brazil‘s president, Dilma Rousseff, said the fund could mitigate the volatility that could

emerge from such shifts.

―This provides security, a kind of safety net for BRICS countries and others,‖ Ms. Rousseff said.

Taken together, the New Development Bank and the contingency fund reflect ambitions of forging a

new global economic framework. Nations like Brazil already have huge development banks that

dwarf the World Bank in size. Still, leaders in emerging economic powers chafe at the policy

prescriptions coming from the World Bank and the I.M.F., which emerged from the Bretton Woods

monetary conference in New Hampshire 70 years ago. While the United States has long wielded

influence in the global economy through those institutions, China, which accounts for about 70

percent of the collective gross national product of the countries represented at Fortaleza, has tried

to play down its staggering economic weight in the bloc. But that could change over time, analysts

said, if animus grows over China‘s trade surpluses with other members.

Source: New York Times

ECONOMY

MONGOL BANK: FX AUCTION, SWAP AGREEMENTS, 1-WEEK BILLS, TREASURY BILLS

The Bank of Mongolia on 17 July auctioned USD 15 million and CNY 70.5 million to commercial banks

for closing rates of MNT 1,841.22 and MNT 297.00, respectively. The central bank also reported on

17 July that it had received an equivalent of USD 57 million from swap agreements and a USD 60

million ask offer from commercial banks.

The central bank reported on 18 July the issue of one-week bills worth MNT 137.7 billion at a

weighted interest of 10.5 percent a year.

The central bank reported on 16 July that it rejected MNT 1.5 billion in bids for the sale of three-

year treasury bills with a face value of MNT 10 billion ―due to [an] absence of competitive bids.‖

The central bank reported on 23 July that it rejected MNT 12.5 billion in bids for the sale of 12-

week treasury bills with a face value of MNT 50 billion.

Source: Bank of Mongolia

MOODY'S DOWNGRADES MONGOLIA SENDING ITS CURRENCY TO RECORD LOW

Moody's Investors Services has cut Mongolia's foreign currency bond rating, citing the country's

strained external liquidity position and saying that foreign exchange reserves would further deplete

unless the country takes help from its big neighbor China.

The Mongolian tugrug, which has been on a declining trend since 2011, has touched a new record

low of MNT 1,840 against the U.S. dollar following the rating action. The tugrug has fallen more

than 10 percent so far this year and weakened more than 35 percent since April 2011, indicating the

severity of the foreign exchange crisis Mongolia is facing. The foreign currency government bond

rating has been downgraded to B2 from B1 with outlook negative. The government's issuer rating as

well as senior unsecured rating have also been downgraded to B2.

Moody's has also downgraded the rating of the government-owned Development Bank of Mongolia to

B2 from B1 with outlook remaining negative.

"Reserves would most likely be lower, were it not for the Bank of Mongolia drawing down on a

bilateral swap facility with the People's Bank of China," the statement showed.

Expansionary monetary and fiscal policies have added to demand pressures, fueled inflation, and

heightened spillover risks to the banking system and the balance of payments, the rating agency

said. Mongolia's total foreign reserves have fallen rapidly, to USD 1.6 billion in May 2014 from USD

2.2 billion at the start of the year, in spite of a narrowing current-account deficit, Moody's said. The

rating agency notes that the sharp pace of deterioration comes as foreign direct investment (FDI)

has more than halved from levels last year. Mongolia's rising external debt repayment burden was

compounded by the decline of official foreign-exchange reserves to a low level.

Source: International Business Times

MONGOLIA BONDS A BUY FOR ING AFTER MOODY‟S CUT SPURS DROP

Mongolia‘s dollar bonds dropped the most in a week after Moody‘s Investors Service cut the nation‘s

credit rating, a decline that prompted ING Groep NV to recommend buying the securities.

The yield on the government‘s 5.125 percent notes due December 2022 rose 12 basis points to 7.93

percent as of 13:28 on 18 July in Hong Kong. The premium investors demand to hold the Asian

nation‘s debt over similar-maturity Treasuries has widened 57 basis points this month to 534 basis

points, the biggest gap since April. Mongolia‘s currency, the tugrug, fell as much as 0.3 percent to a

record 1,841 per dollar today.

Mongolia‘s dollar notes handed investors a return of 5.5 percent this year, the fifth-lowest among

12 regional debt indexes compiled by HSBC Holdings PLC. Moody‘s is the second rating company to

downgrade Mongolia this year after Standard & Poor‘s lowered its assessment on April 29 to B+ from

BB-, or four levels below investment grade. Fitch Ratings, which ranks Mongolia at B+, warned on 8

July on the growing economic and financial risk in Mongolia due to the decline in reserves, which

provide only 1.8 months of external payment coverage.

Source: Bloomberg

INSPECTION FINDS POOR CONSTRUCTION AT KHUSHIGT INTERNATIONAL AIRPORT

The General Agency for Specialized Inspection has found the work done at the new Khushigt

International Airport unsatisfactory in an inspection of the site.

The agency said some of the work fell short of provisions set by the Law on Roads and that the

runway being built by Nasnii Zam and National Developer was too weak to support air traffic. Also

participating in the project are Ochir Tuv for tunnel construction, China's Sainokhidro Bureau 9 for

terminal and bridges construction, and South Korea's Sungdo Gonsol Suwon for the concrete used for

the runway.

Source: Udriin Sonin

15 NEW TRAIN CARS SET OFF FOR MOSCOW

Mongolian-Russian joint venture Ulaanbaatar Railway (UBTZ) commissioned 15 new passenger train

cars with some 200 passengers traveling to Moscow on 18 July.

The Mongolia and Russia governments have provided an additional USD 125 million each to UBTZ's

budget and have launched technical upgrades to increase transportation capacity. A one-way

business class ticket for the Ulaanbaatar-Moscow train is MNT 260,000 MNT compared with first-

class tickets that cost MNT 405,000. The train cars are also wheelchair accessible.

Source: UB Post

SAMURAI BOND FUNDS TO BE SPENT FOR TANNERIES

The Cabinet Secretariat has approved a proposal to funnel MNT 110.4 billion from the 2013 Samurai

bond to commercial banks so that they can finance projects that would boost Mongolia's leather

industry. The government is looking to finance the establishment of new tanneries and upgrade

existing facilities with the program.

Source: Zuunii Medee

LEATHER PRODUCERS LOOK TO BOLSTER INDUSTRY WITH SHOE PRODUCTION

Mongolia can boost its leather goods industry with the production of shoes this year, said the head

of the Leather Producers Union.

The government is set to lend MNT 30 billion to companies producing leather goods, and an

additional MNT 110 billion will be used for companies' working capital, said Union Executive

Director T. Bayarsaikhan. The Ministry of Industry and Agriculture aims to process 80 percent of

Mongolian hides by 2018, he said, with the first priority going towards the production of shoes.

Mongolia currently produces all the boots for military and police, with an estimated six million

shoes imported from China each year, Bayarsaikhan said. Beginning with the production of children's

shoes, a factory able to produce 150,000 pairs of shoes is scheduled to open September 2014.

Mongolia currently produces up to MNT 160 billion in hides each year, of which MNT 30 billion is

bought by domestic manufacturers, said Bayarsaikhan. The remaining MNT 130 billion is sourced

from Chinese traders

―Domestic enterprises have semi-processing capacity for 22 million pieces of livestock hides

annually. However, only eight to 10 million hides can be processed domestically,‖ he said.

―Mongolia is buying equipment from abroad to do full-processing (or crusting) and produce final

products.‖

Source: Udriin Sonin

NEW TAX RULE FOR COAL EXPORTS LAUNCHED

New rules for taxes on coal exports will take effect this month after introducing new terms last

April.

The tax rate will now be calculated based on international market prices first to be later adjusted

according to the sale contract price. The government in April first set the tax rate based on coal

sales and the price agreed upon under contract rather than listed rates set by the government.

The high frequency of tax avoidance by companies has reportedly prompted the new change.

Source: Zuunii Medee

MONGOLIA BOLSTERS CREDIT GUARANTEE FUND FOR SMALL BUSINESS

Mongolia has amended its law regulating the Credit Guarantee Fund to grant a larger scope of credit

access to small business around the country.

Although the government issued MNT 11 billion in loan guarantees to small businesses that employ

no more than 50 employees during the first half of 2014, its outreach efforts only managed to

benefit 0.45 percent of the 36,800 enterprises registered in Mongolia. This, says Finance Minister

Chultem Ulaan, shows there is still a great need to do more.

The government is prepared to provide more funds to the Credit Guarantee Fund and promote local

small-and medium-sized business owners around Mongolia. They will also attempt to grant greater

access to the whole country, rather than only the capital.

Over 40,000 small businesses operated in Mongolia, with 20,000 based in Ulaanbaatar. The

government hopes to eliminate challenges presented to such companies by providing greater access

to credit. Companies will be able to attain 8 percent mortgages to follow last year's program that

provided mortgages to families.

Source: Mongolian Economy

UB TO GRANT FREE LAND BEGINNING AUGUST

Ulaanbaatar will distribute land at 52 locations to nearly 15,000 Mongolian citizens at no cost next

month, said Ulaanbaatar Mayor Erdene Bat-Uul and the City Property and Land Affairs Office (CPLO)

at an 18 July press conference.

Five different areas of land covering 1,524 hectares will be distributed to 14,954 Mongolians for

ownership beginning 1 August. Mongolians will be able to receive 0.05 hectares of land compared

with the 0.077 hectares proscribed by the Land Law because of scarcity of land.

CPLO will accept applications electronically over the Internet. A representative of CPLO at the

press conference said going forward land designated for development will be sold exclusively

through an open bidding process, with 20 plots of land to be sold through at auction in September.

Ulaanbaatar has nullified 91 land permits given through other means, he said.

Source: Udriin Sonin

NEW MINING FRAMEWORK MAY NOT BE ENOUGH TO REKINDLE FDI

The Mongolian government on 1 July passed a series of amendments to its mining regime as well as

other regulations in a desperate effort to bring foreign direct investment back to the country.

Damaged by a months-long public spat with Rio Tinto PLC over the massive Oyu Tolgoi copper-gold

mine and by continued reports of corruption in allocating mining licenses, Mongolia has seen foreign

investment dwindle from its peak of USD 1.9 billion in the first five months of 2012 to USD 400

million in 2013. According to Bloomberg News, foreign direct investment fell by 52 percent in 2013

compared to 2012, and fell another 64 percent in the first five months of this year.

The new amendments are reported to expand available areas for mineral exploration from 8

percent of Mongolia's total area to one-fifth of the country. A ban on new exploration licenses that

was imposed in 2010 has also been lifted, according to government ministers. Mongolia will also

create a National Geological Survey and a Policy Council that will oversee changes made to the

mining regime. But it remains to be seen whether the measures will be enough to rescue the

country's mining industry, on which its economic boom has depended.

―The legal reforms—just changing the laws—will not be enough to convince investors to start coming

back, but I think it sets up the framework for concrete action that will signal that Mongolia is open

for business again," said Munkhdul Badral Bontoi, an analyst at Cover Mongolia.

On July 8, Mongolian Prime Minister Altankhuyag Norov accused Rio Tinto of slowing down second-

phase development of the Oyu Tolgoi mine. Altankhuyag may be correct in that Rio Tinto has been

slow in pushing forward with project developments, but the global miner has its reasons for doing

so. Rio Tinto wants assurances of stability moving forward. It is also faced with a depressed market

for commodities which is tempering its appetite for expansion, said Duncan Innes-Ker, a senior

editor and economist with Economic Intelligence Unit.

"For [Rio Tinto], the urgency to expand out is a lot less," Innes-Ker noted. "The global environment

[for mining] has changed, the risk factor of Mongolia has changed, with some very negative

developments on mining policy over the past few years. So, from Rio Tinto's perspective, they're a

lot more ambiguous about expanding [Oyu Tolgoi] at the same pace."

Decreasing investment levels from Rio Tinto in particular, and foreign mining companies in general,

will likely send the Mongolian economy into a balance of payment crisis, Innes-Ker said. Mongolia

has had to provide the capital resources—such as purchasing mining equipment, fuel and the

investment goods to build the necessary infrastructure—to sustain a rapidly growing economy.

However, exports have been very low because many of the mining projects are not at the

production stage yet, Innes-Ker said. To finance these costs, Mongolia has relied heavily on foreign

borrowing.

"If things carry on the way they're going... the debt burden can become unsustainable, and we're

looking at a possible International Monetary Fund rescue if foreign investment doesn't perk up

quickly," the economist said.

Source: SNL Metals & Mining

MONGOL BANK RELEASES REPORT ON MONGOLIAN TRAVEL EXPENDITURES

The Bank of Mongolia and the Mongolian National Tourism Center and Ulaanbaatar City Tourism

Department have released a new report that shows how much was spent by Mongolia's citizens who

have traveled abroad in the first half of this year.

Mongolians traveling abroad spent on average USD 1,622, or three times more than what was

recorded in 2005, with some variances depending on the traveled destinations. More than 80

percent of Mongolian travelers paid cash while managing their own trips. The study also showed

that 30 percent of spending was on shopping. The highest portion of the budget was spent on

transportation.

Responses for reasons for travel included the answers that 44 percent of Mongolians traveled abroad

for tourism, 32 percent for business or official appointments, 12 percent for medical services, 7

percent for education, and 5 percent for work.

The study was conducted to record the amount of time Mongolians travel abroad and spend in

foreign markets.

Source: UB Post

WHO DECLARES MONGOLIA FREE OF MEASLES

The Mongolian government received a certificate acknowledging the achievement from the WHO‘s

Regional Office for the Western Pacific, joining Australia, Macao, China and South Korea as the only

countries and areas in the region that have a 95 percent population immunity level against the

disease.

―This is an important step towards measles elimination in the Western Pacific Region,‖ Shin Young-

soo, the WHO regional director for the Western Pacific, said. ‖It demonstrates that measles

elimination is not only theoretically feasible, but also achievable in middle- and low-income

countries and areas of the Western Pacific.‖

During a ceremony in Ulaanbaatar, Prime Minister Norov Altankhuyag acknowledged the efforts of

healthcare workers and parents, as well as the WHO and other partners in supporting measles

vaccination programs. Mongolia adopted a national immunization program in 1993 and a law on

immunization in 2002. The Mongolian government covered 90 percent of the costs for vaccinations

in 2013, versus 7 percent in 2003. By 1940, Mongolia became the first country in Asia to eliminate

smallpox. The country first began using measles vaccines provided by the WHO in 1974.

The WHO plans to help member states in its Western Pacific Region eliminate measles by 2020.

Source: Vaccine News Daily

TWO FOUND INFECTED WITH COW POX IN UB

Two individuals have been diagnosed with cow pox in Ulaanbaatar as cases of animal diseases

emerge.

The patients are receiving treatment at the National Center for Infectious Disease. Meanwhile 15

horses, 5 wild horses, 2 cattle reportedly died of anthrax in Durvuljin Soum, Zavkhan province

between 7 and 16 July. Also, on 11 July, 7 horses and one goat owned by six different families have

died of anthrax.

Source: Udriin Sonin

ORBIS LAUNCHES 7TH FLYING EYE HOSPITAL PROGRAM IN MONGOLIA

The Orbis Flying Eye Hospital is visiting Ulaanbaatar for a seventh time to conduct an intensive and

comprehensive training and skills exchange program aimed at strengthening ophthalmic services in

the capital.

The program's focus is on subspecialty training in the areas of cataract, glaucoma, medical retina

for adults and pediatric cataract, strabismus and oculoplastics. The comprehensive activities will

provide hands-on training to the local eye care community including doctors, nurses and biomedical

engineers.

"The Orbis Flying Eye Hospital team is pleased to be back in Ulaanbaatar," said Ahmed Gomaa,

medical director of the Flying Eye Hospital. "We look forward to reconnecting with past trainees we

have mentored over the years as well as working alongside the next generation of ophthalmologists

and eye-health workers. We are excited to continue working together to deliver the highest

standards of training, so that in turn the ophthalmic community in this country can continue to

build a strong, high-quality service."

The Flying Eye Hospital program is focusing on strengthening and supporting the Model of

Excellence in Modern Ophthalmology (MEMO Mongolia) Adult and Pediatric Vision Network projects

that have been planned in cooperation with the Mongolian Ministry of Health. MEMO Mongolia is

aimed at building capacity in adult and pediatric ophthalmology.

Source: Orbis

UNDERSTANDING ASIA'S WOOL INDUSTRY

We hear a lot about the lucrative Asian market, particularly for wool producers. But how many

Australian farmers have actually visited the continent to see what it looks like on the ground? David

Lindner is a wool producer from South Australia's southern pastoral district, and visited China to

tour some of their processing facilities. His group also headed out into rural Mongolia to see how

they farm their sheep.

Lindner said the landscape was similar to areas in South Australia's Mid North, near Peterborough,

where there are fairly low rainfall levels and growing good quality feed can be an issue. He said

dealing with the weather in Mongolia would be a challenge.

"For nearly six months of the year it's that cold that they've got to shed their livestock," he says. "It's

a big hole in their ability to grow quality animals."

Lindner said the technology used to farm the region was decades behind Australia in some cases

"We actually saw a lot of people out there in their fields still using donkeys to turn the soil over.‖

Linder and his group also introduced their methods for sheep shearing. "We had a couple of

professional shearers in our group and they asked if they could help shear the sheep. "So we ended

up being the stars of the day because the people there had never seen sheep shorn in the proper

fashion."

Source: ABC

ENCOURAGING MINING FDI IN MONGOLIA - EDITORIAL

Changes to Mongolia‘s mining legislation will open up vast new tracts of land for exploration and

pave the way for new license issuances. This should help restore the confidence of foreign investors

made wary by government intervention in the sector.

On July 1, the Mongolian parliament voted to approve amendments to legislation governing mining

activity, ratifying changes to the Mineral Laws of 2006, aimed at regenerating foreign interest in

the sector. Among the key changes to the legislation will be the expansion of Mongolia‘s landmass

open for exploration and subsequent mining activity, with 20 percent of the country set to be rated

as available for development compared with the prior 8 percent. The amendments will also see an

end to the moratorium on new mineral exploration licenses, imposed in 2010 as a means of cooling

the rush into the sector at the time. The amended legislation also establishes a policy body that will

be tasked with addressing issues faced by the industry and working with sector players to overcome

challenges.

In another step forward for the mining sector, the government approved plans on 6 July to re-

tender 106 exploration permits. This reverses a decision taken in 2013 to cancel the mining

licenses, according to a cabinet meeting memo cited in local media. The licenses in question were

revoked late last year as a result of a court case involving senior officials of the Mineral Resource

Authority. The memo did not elaborate on a timetable for details of the procedures but by marking

a path of reconciliation, the government will go a long way towards restoring confidence among

foreign and domestic miners.

While the government is looking for a surge in investment, it may take some time before the tide

turns. With commodity prices well down and prospects for a rebound in the short-term unlikely,

leading mining firms are looking to consolidate their present holdings rather than take on new,

potentially expensive projects. With growth prospects for the Chinese economy uncertain, the

outlook for Mongolian coal may also be affected by a rise in production in some segments of the

Chinese mining sector.

Potential new entrants to the Mongolian market may also want to see the outcome of a series of

disputes between the government and one of the highest-profile foreign operators in the sector,

Turquoise Hill Resources, which is majority-owned by mining giant Rio Tinto PLC, operator of the

USD 6.6 billion Oyu Tolgoi copper and gold mine, Turquoise Hill is in dispute with the government

over claims of unpaid taxes and penalties; the firm is also in disagreement over fees it is owed. If a

dispute can be resolved where the government says that up to USD 130 million in taxes is owed by

Turquoise Hill—an allegation the company has rejected—this would boost confidence in the whole

mining sector and in the potential for future investment in the industry.

With the opening up of new exploration opportunities, more adventurous companies may look to

buck the trend of consolidation and caution currently marking the industry around the world. Some

may seek to get in on the early stages of what could be the next big minerals rush in Mongolia—one

that could be better managed and more transparent than the first.

Paulius Kuncinas is regional editor of Oxford Business Group.

Source: UB Post

POLITICS

CABINET APPROVES COMMON MINERALS LICENSING REGULATION

The Cabinet Secretariat on 16 July approved a special rule for exploration and exploitation of

common minerals concerning auto roads, railways and great construction projects. The government

will grant permission to explore and exploit these minerals to anyone able to spend their own funds

on the operation that follow specific government programs.

Source: Montsame

REVISED DRAFT BILL ON PRESS FREEDOM SUBMITTED TO PARLIAMENT

The MPs M. Batchimeg and S. Demberel on 8 July submitted a bill concerning press freedoms to

Speaker Zandaakhuu Enkhbold.

The bill would revise the 1998 Law on Press Freedom, which ensures citizens‘ rights to inquire,

attain and disseminate information freely. The bill has been promoted by the numerous new media

outlets that have emerged in recent years. The current total of media groups in Mongolia is 555.

Currently, the Law on Press Freedom grants limited powers while regulating communications

between the state and media.

Source: UB Post

PRESIDENT HOLDS POWWOW FOR SQUABBLING DP FACTIONS

President Tsakhia Elbegdorj met with leading officials within the Democratic Party at his home on 4

July to resolve squabbles between factions within the party, according to an unnamed source.

The president implored the faction leaders to work together in light of news that some groups

within the party had aligned themselves with the recently resigned Minister of Industry and

Agriculture Khaltmaa Batulgaa, who was not in attendance for the meeting, according to the

source. Battulga is reportedly the leader of the Mongolian Democratic Union.

Elbegdorj reportedly said that conflict among the factions was badly affecting the performance of

the government, and he praised Parliament Speaker Zandaakhuu Enkhbold for his good work and

honesty.

The factions within the party and their members are as follows:

Former Mongolian National Development Party Faction

D. Erdenebat

R. Amarjargal

N. Batbayar

B. Bolor

B. Garamgaibaatar

Ts. Bayarsaikhan

D. Bat-Erdene

D. Zorigt

B. Narankhuu

A. Bakei

Shonkhor Faction

Z. Enkhbold (leader)

J. Batzandan

S. Odontuya

G. Bayarsaikhan

D. Gankhuyag

D. Ariun (also sometimes known to belong to Altangadas)

S. Erdene

G. Batkhuu

Ts. Oyungerel (originally belonged to Mongolian Democratic Union)

Altangadas Faction

N. Altankhuyag (leader)

R. Gonchigdorj

Ch. Saikhanbileg

S. Bayartsogt

Ya. Sanjmyatav

L. Erdenechimeg (also said to belong to Shonkhor)

One Democracy Faction

L. Gantumur, leader

M. Batchimeg

Kh. Temuujin

Mongolian Democratic Union Faction

Kh. Battulga (leader)

R. Burmaa

Z. Ganbat (also said to have recently joined the Shonkhor Fraction)

Sh. Tuvdendorj

M. Zorigt

Northeast Asian Faction

L. Bold

Source: Zuunii Medee

MPP TO HOLD PARTY FORUM IN NOVEMBER

A small forum will be held in November as the Mongolian People's Party (MPP) looks ahead to a

reform committee forum scheduled for next May.

Ninety-nine party members from all levels of government and across the country are expected to

attend the November meeting. The forum will be used to prepare an agenda for the May forum and

establish rules for the selection of forum delegates. The main focus for the larger forum set for

next year is to resolve political and economic challenges for the country and discuss ways of

increase living standards for Mongolians.

Source: Udriin Sonin

CONSULATE GENERAL TO OPEN IN BISHKEK

A Consulate General for Mongolia will open in Bishkek, Kyrgyzstan as announced by the countries'

premiers at a meeting in Ulaanbaatar on 9 July.

"The Kyrgyz side has enthusiastically accepted the proposal and supported the decision of the

Mongolian side about opening of the Consulate General of Mongolia in Bishkek," said Kyrgyz Prime

Minister Dzhoomart Otorbayev.

Kyrgyzstan has parliamentary elections scheduled for 2015, he said and hoped to learn from

Mongolia's successful reformation of its electoral system for its own 2012 election. Negotiations for

trade and economic cooperation between the two countries resulted in the proposal for a Mongolia-

Kyrgyz business council as well as agreements in the fields such as agriculture, animal husbandry,

and mining.

Source: 24.kg

WILL MONGOLIA BE THE NEXT SCO MEMBER?

China's foreign minister has suggested that Mongolia could become the next full member of the

Shanghai Cooperation Organization, even though Mongolia has appeared far less eager to join the

organization than other aspirants like India, Iran, and Pakistan.

At an event marking the 13th anniversary of the organization, Chinese Foreign Minister Wang Yi

said: ―We have received a message from the Mongolian prime minister on the occasion. Although we

have not scrutinized the contents of this message yet, we regard it as a good signal,‖ he added.

―Ten years have passed, and it is time to consider preparations for granting Mongolia a status of a

full-fledged member of the SCO.‖

That's an odd statement, particularly regarding the Mongolian prime minister's message. And in the

past, Mongolia has not shown too much interest in becoming a full member, although it's been an

observer since 2004. There are a number of reasons for that, wrote local analyst Mendee

Jargalsaikhan in a 2012 paper.

For one, Mongolia's ties to Central Asia are not particularly strong. In addition, Mongolia is a

relatively successful democracy, and "the SCO is perceived in Ulaanbaatar as an 'authoritarian club'

whose members main concern is their own regime security," Mendee writes. And SCO membership

also could diminish Mongolia's foreign policy independence, exemplified by its "third neighbor"

strategy of courting allies other than its two massive geographic neighbors, China and Russia.

"Joining the SCO could ... weaken both Mongolia's domestic democratization efforts, and its

international image with the European Union or the United States," Mendee writes.

Also in 2012, Richard Weitz wrote that there did not seem much interest from the SCO's

perspective, either: ―Russia and China have apparently decided that Mongolia cannot join the SCO

anytime soon,‖ said Weitz, adding that its geographic position, ties with NATO also pose obstacles.

It is hard to say what changed, but Mongolia may have come to the conclusion that in spite of the

group's problems, it's useful to be part of the decision-making process, Mendee said. "It could be

better to be in the room when they divide the cake," he said. And from the perspective of Russia

and China, as they get closer as a result of the West-Russia rift in Ukraine, they may be trying to

shore up their alliances, and Mongolia's absence was "a challenge to the legitimacy of the SCO,"

Mendee added.

So far there doesn't seem to be any comment from Ulaanbaatar. The next SCO summit will be in

September in Dushanbe.

Source: Eurasianet

JAPAN, MONGOLIA INK FREE TRADE PACT

Japan and Mongolia reached a basic accord on a free-trade deal during a summit in Tokyo on

Tuesday evening, Prime Minister Shinzo Abe said.

The trade pact features Ulaanbaatar abolishing its tariffs on most Japanese automobiles in 10 years.

The amount of trade between Japan and Mongolia is relatively small, but Tokyo could leverage

closer economic ties to boost their political relations. Japan now often relies on Mongolian

assistance in negotiating with North Korea over the abduction issue.

During his summit Tuesday with President Tsakhia Elbegdorj in Tokyo, Abe vowed to provide support

for facilitating Mongolia‘s exports and sustainable economic development, as a complementary

package of an economic initiative Tokyo announced at a summit last year. In the free trade

agreement negotiations, which began in 2012, Japan called on Mongolia to eliminate a 5 percent

tariff on Japanese car imports, while Ulaanbaatar asked Tokyo to remove or significantly reduce its

38.5 percent tariff on Mongolian beef.

At Tuesday‘s summit, Abe was expected to ask Elbegdorj for further cooperation on the abduction

issue. Tokyo and Pyongyang have recently resumed talks on the matter, and North Korea has

launched a special committee to investigate the victims‘ fate.

In 2013, Japan‘s exports to Mongolia were valued at JPY 29.3 billion (USD 288.6 million) and

Mongolia‘s exports to Japan at JPY 1.9 billion (USD 1.9 million). Japan‘s main export items to

Mongolia include used passenger vehicles, which account for some 45 percent of the total. Tokyo

has also called on Ulaanbaatar to ease restrictions on foreign investment to facilitate Japanese

firms‘ businesses in such sectors as energy and infrastructure.

Source: Japan Times

MONGOLIA TO BECOME PART OF AUSTRALIA‟S „NEW COLOMBO PLAN‟

Australian Foreign Affairs Minister Julie Bishop has proposed to include Mongolia in the Australian

government‘s ‗New Colombo Plan‘ for 2015.

The invitation, which came at the request Foreign Minister Luvsanvandan Bold, follows the plan's

introduction in December 2013 to launch a program to provide young Australians scholarships for

short-and long-term trainings at Asian-Pacific counties. Trainings will be held Japan, Indonesia and

Singapore.

Bold extended the invitation to include Mongolia in the work and holiday visa opportunities

provided by the New Colombo Plan, which would allow Mongolians between the ages 18 and 30

years to visit Australia for up to 12 months and participate in 4 months of training and work.

Source: UB Post

MONGOLIA VIES FOR MID-TERM DEVELOPMENT PARTNERSHIP WITH RUSSIA

Mongolia plans to turn to Russia for greater cooperation for development with a new mid-term

partnership strategy.

The Cabinet Secretariat on 16 July ordered Foreign Minister Luvsanvandan Bold to negotiate a five-

year trade and economic cooperation agreement as well as terms to negotiate in political spheres

such as defense, security, and humanitarian matters.

Mongolia and Russia established the Friendly Relations and Partnership Agreement in 1993 and the

Strategic Partnership in 2009.

Source: InfoMongolia.com

U.S. EX-IM BANK REAUTHORIZATION IS A “NO-BRAINER,” SAYS NAMBC CHAIR

The chair of the North America-Mongolia Business Council (NAMBC) has endorsed renewed

authorization of the U.S. Export-Import Bank (Ex-Im), which has a partnership with Mongolia, while

commenting on the uncertain prospects for Congressional approval.

Ex-Im‘s current authorization expires 30 September, at the end of the current federal fiscal year.

Some members of U.S. Congress strongly oppose re-authorization for ideological reasons, but Slutz

emphasized, ―every other exporting nation has an aggressive, and in some cases even predatory,

export finance strategy—that‘s the environment in which U.S. companies compete abroad—so for

the United States to terminate Ex-Im is akin to unilateral disarmament.‖

―This should be a no-brainer,‖ said Pamela Slutz, Chairman of the NAMBC, and former U.S.

Ambassador to Mongolia. She noted that not only was Ex-Im financing necessary for Boeing‘s recent

sale of three new planes with GE engines to MIAT Mongolian Airlines, but also ―Ex-Im is committed

to financing USD 500 million in U.S. exports for the expansion of the underground mine at Oyu

Tolgoi, which alone will support about 2,000 jobs in the U.S.‖

―Maybe some U.S. capital goods sales to Japan, Saudi Arabia, and Western Europe can go forward

without Ex-Im, but for developing countries like Mongolia, if American companies don‘t have Ex-Im

backing, they are out of the game.‖ she said.

Source: NAMBC

BATTULGA ARRIVES IN N. KOREA

A special envoy of Mongolian President Tsakhia Elbegdorj arrived in Pyongyang on Monday, North

Korea's state news agency said.

Khaltmaa Battulga, a member of Mongolia's parliament, and his entourage arrived in the North, the

official Korean Central News Agency said, without giving further details. The trip came on the same

day North Korea fired about 100 artillery shells into the sea off the country's east coast from near

the heavily fortified border, in its latest show of force against South Korea.

In October, Elbegdorj visited North Korea but did not meet with his North Korean counterpart Kim

Jong-un. Elbegdorj was the first foreign head of state to visit Pyongyang since 2011 when Kim took

over the country following the sudden death of his father and long-time leader Kim Jong-il.

Source: Global Post

PRESIDENT THANKS CANADIAN AMBASSADOR IN FAREWELL

President Tsakhia Elbegdorj on 14 July thanked outgoing Canadian Ambassador Gregory Goldhawk

for his work in improving economic and political relations between their two countries during his

term.

Goldhawk "made a great contribution to deepening of the bilateral relations," said Elbegdorj. The

president thanked the Canadian ambassador for this and his work to include Mongolia on the list of

countries to receive the official developmental assistance from Canada.

Goldhawk in response lauded Mongolia for making democracy and human rights priorities, and that

he had observed intensive development along with the economic growth in the country. Last year

Mongolia and Canada saw visits paid by Canadian Governor-General David Johnston to Mongolia and

Speaker Zandaakhuu Enkhbold to Canada.

Source: Montsame

GROUPS BALK AT SHUTDOWN OF WEBSITE FOR REPORTING ON BUSINESS LINKED TO PREMIER

Media rights groups have spoken out against what they believe to be government action to censor

negative press about a tourism group linked to the prime minister posted on the Mongolian news

website Amjilt.com.

The website came down after an Amjilt journalist posted an article and photo with the headline

―Prime Minister‘s Khaan Jims tourist camp is dumping its sewage in the Tuul River‖ on 3 July. The

Communications Regulatory Commission‘s (CRC) notified Amjilt administrators on 4 July of a

complaint from Khaan Jims that the article was false and warned that it would shut down the

website in one hour unless they retracted the article and posted a correction admitting to

―complete libel.‖ When the website's administrators asked on what grounds the order was coming

from, the CRC provided no explanation or official statement, said Amjilt administrators. The CRC

shut down the website about three hours later.

The CRC put Amjilt.com on the ―List of Domains in Violation,‖ a list of websites shut down for

violating the Law on Copyright and Related Rights (LMCRR), as well as international treaties and

conventions Mongolia has joined. The CRC has the authority to temporarily shut down websites that

fail to meet the demands of authorities or law enforcement. However, no order to shut down

Amjilt.com came from any official source. An unsubstantiated article published by the rumor-

mongering website Kimono on 9 May reported that the Prime Minister owns 33 percent of Khaan

Jims, which was originally privatized for the aim of cultivating sea buckthorn.

Globe International has strongly opposed the CRC‘s decision, claiming that the government's

blackout of the website is a clear example of state interference in the rights of media. The

Mongolian Website Association (MWA) and Amjilt.com held a joint press conference on 8 July where

MWA Director J. Jargalsaikhan said they would organize a demonstration for the demand that the

government restore the website. The MWA said it would post articles about the illegal actions by

the prime minister N. Altankhuyag until its demands were met.

Khaan Jims Manager L. Saintugs said the reports were false and that the camp's treatment plant

transfers 99.1 percent of clean water to the Tuul River. Another interview with the director of the

company that built the water treatment plant corroborated Saintugs statement. Mon-Tungil LLC

Director T. Tuvshinjargal told News.mn that the treatment plant installed five years ago uses the

latest technology from South Korea to treat 90 percent of the wastewater before being released to

the Tuul River.

Source: UB Post

INSPECTORS FIND VIOLATIONS AT 104 CONSTRUCTION SITES IN KHAN UUL

The General Agency for Specialized Inspection found violations for 104 buildings in Khan-Uul District

in recent inspections.

The violations relate to the environment, land allowances, and the use of water and heating—an

issue that still needing legislative clarification. About half of the buildings under construction in

Ulaanbaatar are located in Khan-Uul district. The district has 500 construction sites being

developed by 90 companies or individuals.

Source: Zuunii Medee

KHUKH MONGOL, BOSOO MONGOL ATTACK UVURKHANGAI SOUM

Around 10 young people from the nationalist group Khukh Mongol and Bosoo Mongol attacked miners

working at the Ultiin gold mine in Uyanga Soum, Uvurkhangai Aimag.

Members of the groups said the attack was spurred by their desire to protect the environment from

the miners. The Uyanga Soum Governor Office was also attacked, with some officials suffering from

injuries. Victims included some women.

The 7-man police unit was unable to stop the assailants and have asked for additional force from

the provincial center.

Source: Zuunii Medee

SEIZED DINOSAUR BONES RETURN TO MONGOLIA

U.S. officials on Thursday turned over to the Mongolian government enough 80 million-year-old

dinosaur skeletons to stock a museum, including two relics of a kind of dinosaur that a prosecutor

said "memorably stampeded" in the Hollywood movie, ―Jurassic Park.‖

U.S. Attorney Preet Bharara said the fossilized remains of more than 18 dinosaurs recovered by

federal authorities were transferred after a ceremony attended by Mongolia's ambassador to the

United Nations. "This is a historic event for the U.S. attorney's office, in addition to being a pre-

historic event," Bharara quipped at the gathering.

James T. Hayes, special agent in charge of the New York office of Homeland Security Investigations,

said at least 31 fossilized dinosaur remains will eventually be returned to Mongolian authorities,

after it was determined that they were illegally poached and smuggled out of the east Central Asian

country between 2005 and 2012. He said the bones will be displayed at a national museum in

Mongolia because they "do not belong in the hands of any private collection or one owner."

Bharara said the dinosaurs returned to Mongolia on Thursday included two Tyrannosaurus bataar

skeletons, a dinosaur egg and two skeletons of Gallimimus, "the dinosaurs that memorably

stampeded in one scene" of the movie "Jurassic Park."

Source: Associated Press

MONGOLIA EXPANDS ITS RESOURCE EXPLORATION OPTIONS

The Mongolian government plans to more than double the size of the territory open to mining and

exploration in Mongolia. While that might sound promising for an idle junior mining and exploration

sector looking for the next bonanza, it may not be enough to take the chill off doing business in

Mongolia.

The government of Mongolia has earned a reputation for rolling out the welcome mat, only to pull

the rug out from under the companies walking on it. It suspended more than 100 mining licenses as

part of a fraud investigation in the country's mining authority and just recently accused Vancouver's

Turquoise Hill Resources Ltd.—a subsidiary of Rio Tinto PLC—with tax evasion on its multi-billion-

dollar Oyu Tolgoi copper-gold mine. Last month, following an audit, the Mongolian tax authority

claimed the mine's owners owed the government—which is itself a 34 percent shareholder—unpaid

taxes and assorted entitlements it claims it should not have claimed.

Days later after Turquoise Hill reported the dispute on 26 June, on July 1, in what Bloomberg News

characterized as a move to regain investor confidence, the Mongolian government passed a law that

lifts a ban on new mining licenses. The move would increase the area open to mining and

exploration to 20 percent from 8 percent. Mickey Fulp, a mining analyst and publisher of

Mercenarygeologist.com, doubts that will be enough for investors to ignore Mongolia's ―horrible

track record,‖ he said. ―They change the rules all the time. There are many other countries like

that, but Mongolia is absolutely, hands down, the worst, I think.‖

Julian Dierkes, an associate professor at the Institute of Asian Research at the University of British

Columbia, said the recent reversal of policies on exploration in Mongolia may be good for junior

exploration companies that are already invested there—Vancouver's Kincora Copper Ltd., for

example—but whether it attracts any new investors remains to be seen. ―This is, in part, economic

desperation because foreign investment has evaporated,‖ Dierkes said. ―My concern is it's just

another swing of the pendulum, rather than being a long-term, really well-founded policy change.‖

Source: Business Vancouver

NEW WORLD RECORD-WALKING IN MONGOLIA

A new world record Mongolia mission has been set by young explorer Ash Dykes, a 23 year from

North Wales.

Ash commenced his journey towards the end of May this year from Olgiy Soum, a settlement to the

West of Mongolia. He has exceeded the current record and is continuing his journey in an attempt

to walk the length of Mongolia and achieve a world first. The trek has taken him through the Altai

mountains, Gobi desert and the Mongolian steppe. During his trek Ash has walked a staggering 1,100

miles as he makes his way to Choibalsan in the east, to complete his journey.

Source: BusByway

NEW MONGOLIAN LAWS

The following laws, amendments, addenda and annulments of/to laws were published in the latest

weekly Government bulletin. Unless otherwise decided by Parliament, they will take effect ten (10)

days after publication.

Date Laws

10.07.2014 Law on Livestock Index Insurance

Amendments to Law on Insurance

Amendments to Law on Statistics

Addendum to Law on State and Local Property

Amendments to Law on Financial Regulatory Commission's Legal Status

Amendments to Law on Holidays and Commemorative Days

Annulment of Some Provision of Law on National Holiday

Addendum to Law on Diplomatic Service

Addendum to Law on Holidays and Commemorative Days

Addendum to Law on Labor

Amendments to Law on Communication

Law on Petroleum /Revised Version/

Amendments to Law on Special Permits for Business

Addendum to Law on State Reserve

Annulment of Law on Petroleum

Addendum to General Law on Taxation

Addendum to Law on Customs Tariff, Customs Tax

Addendum to Law on Value Added Tax

Amendments to Law on Corporate Income Tax

Amendments to Law on State Audit

Addendum to Law on Budget

Addendum to Law on Government's Special Fund

Addendum to Minerals Law

Amendments to Minerals Law

Law on Regulation to Follow Law on Amendments to Minerals Law

Annulment of Law on Prohibiting Issuance of New special Permits for Mineral

Exploration

Addendum to Law on Land Under Special Protection

Addendum to Law on Value Added Tax

Addendum to Law on Customs Tariff, Customs Tax

Law on Glass Account

Amendments to Law on Information Transparency, Rights to Acquire Information

Amendments to Law on Budget

Amendments to Law on Government of Mongolia

Amendments to Law on Buying Products, Work, Service with State and Local Property

Please visit BCM's website, Legislative Working Group, for a summary of Mongolian laws. BCM

members who wish to access complete versions of the laws and regulations in Mongolian language

are welcome to email the BCM office.

ANNOUNCEMENTS

INVEST MONGOLIA, 2-3 SEPTEMBER, ULAANBAATAR

Frontier Securities' eighth annual Invest Mongolia conference is scheduled for 2 and 3 September in

Ulaanbaatar

This year, the conference will be held over two days for presentations and discussions on ―smart‖

governance, a roadmap for Mongolia to come out of its economic crisis, and industries such as

mining, infrastructure, tourism, real estate and oil.

BCM members will receive a 15 percent discount at registration. Register online at frontier-

conference.com. For more information call 976-7011-9999 or email: conference@frontier.mn

___________________________________________

2014 DISCOVER MONGOLIA, 4-5 SEPTEMBER, ULAANBAATAR

The 12th Discover Mongolia International Mining Investors Forum (IMIF) will be held in Ulaanbaatar,

Mongolia 4 and 5 September at the Children's Palace of Mongolia— the location of the conference

for the past 11 years.

The forum will have two days of intensive minerals and mining discourse and exhibition for

companies. Although the Mongolian economy is undergoing serious challenges and difficulties, some

decisions and resolutions adopted at the law-making and executive branches of the government

makes us restore confidence and trust. Parliament‘s decision to harness the country‘s economic and

business environment makes long-term steps to nurture investor confidence and trust in Mongolia.

The 12th annual Discover Mongolia- 2014 IMIF is pleased to announce its Platinum Sponsors are

Xanadu Mines and Mongol Metals and Gold Sponsor is Anglo American.

Business Council of Mongolia is supporting Discover Mongolia 2014 International Mining. BCM

members will receive an early bird rate to attend the forum. For Exhibition, Sponsorship and

Delegates information visit discovermongolaiforum.com. For more information call 976-7014-9762,

fax 976-7014-9762, or email info@discovermongoliaforum.com.

___________________________________________

OIL & OIL SHALE MONGOLIA 2014, 10-11 SEPTEMBER, ULAANBAATAR

The Oil & Oil Shale Mongolia 2014 International Investment Conference is back with a new

scheduled date on 10 and 11 September in Ulaanbaatar, Mongolia.

This is the country's first international investment conference on oil, gas, and oil shale. The event

will be attended by international investors, oil, gas, and oil shale companies, service providers,

consultancies, equipment suppliers, and traders. The delegates will have a unique opportunity to

network with industry's key contacts and to obtain vital information on legislation and policies on

oil, gas, and oil shale exploration and production regulations from the officials of the Ministry of

Mining and Petroleum Authority of Mongolia.

Those who attend the Oil & Oil Shale Mongolia 2014 International Investment Conference will learn

how to reap the rewards from Mongolia‘s growth, the evermore favorable policies, and emerging

market of oil and oil shale.

BCM is supporting the conference. BCM members will receive a 15 percent discount. For more

information logon to OilMongolia.com.

BCM WORKING GROUP NEWS

The BCM Environmental Working Group met on 26 June with 15 members attending.

Bayarmaa A, Vice Director, BCM, moderated the session.

New member: Shinetsetseg-Breakthrough PR

Participants: Binderya Oyunbaatar, Dolzmaa Davaasuren-The Nature Conservancy, Tirza Thevnissen-

The Asia Foundation

Guests: Baigalmaa Puntsagmaa-Mongolian Water Forum, Tsenguun Tumurkhuyag, Munkhjargal

Bayarlkhgva-Sustainability East Asia, Altai Onkhor, Kevin Trzcinski-Mongolian National University.

Speakers and topics were:

- Introduction of Urban Services Program by Tirza Theunissen, TAF Deputy Country Representative,

Asia Foundation;

- Impact of Climate Change on Water Resources by P. Batima, Director, Mongolia Water Forum;

- Application and Use of Solar Thermal and Energy Efficient Technologies in Mongolia by Kevin

Trzcinski, Vice President of International Relations, Mongolian National University.

If you have any questions, please contact Erdenetsetseg at erka@bcmongolia.org.

___________________________________________

The BCM Logistics Working Group met on 10 June with 7 members attending.

Mattias Ahlin-Scania, Chairman, moderated the session.

New members: D Enkhbat CEO-Mongolian Express; Rentsendorj Yondon, Mongolian Opportunities

Fund; Buyanderler Tsogt-Ochir, Logistics Supervisor, Cummins Mongolia; Nobuo Okada, General

Manager, Mitsui Co.

Tengis Garamgaibaatar, Chief Executive Officer, Monroad, was elected as WG chairman.

Congratulations to him for his new role as BCM`s Logistics Working Group Chairman! We thank

Mattias Ahlin for his groundbreaking efforts in launching the Working Group. Mattias is returning to

Scania‘s headquarters in Sweden.

Speakers and topics were:

1. Follow up from last meeting‘s discussion

a. Main challenges for the Mongolian Logistic sector

2. Discussion about BCM Logistics Working group role and focus areas

(Mission Statement)

a. Transport modes; road, rail, air

b. Customs efficiency

c. Legal framework; Loads and dimension, safety, standards

d. Stakeholders: Ministries, customs, transport organizations, vehicle manufacturer association

e. Transport efficiency

3. Discussion about meeting intensity and organization

4. Other business

Next meeting was scheduled on 7 August. If you have any interest joining the new and growing

Logistics Working Group, please contact Erdenetsetseg at erka@bcmongolia.org

___________________________________________

The BCM Capital Markets Working Group met on 29 May with 11 members attending.

Howard Lambert /ING Bank/ and Nick Cousyn /BDSec/, Co-chairmen, moderated the session.

Guest: Michael O`Malley-Executive Director at ISG MineElect.

Speakers and topics were:

Facilitating foreign direct investment (FDI) and Capital Markets update - by Byambaa Losolsuren,

Leader of FDI Capital Markets group of 100 Day Revitalization Council, and Partner of Mandal

Capital LLC.

If you have any recommendations on Capital Markets for the Revitalization Council, please contact:

erka@bcmongolia.org

___________________________________________

The BCM Tax Working Group met on 22 May, with 12 members attending.

Onch D. - Co-chair, BCM‘s Tax WG and Deloitte Onch a moderated the session.

Attending were representatives from the following BCM member entities - Deloitte Onch, PwC,

Ernst & Young, KPMG Tax, OT, Terra Energy, Petro Matad, MahoneyLiotta, TMZ and BCM.

New members: Amarbayasgalan and Tuvshinbayar from Terra Energy.

Meeting agenda:

• Overview - B. Byambasaikhan, Secretariat, 100 Day Revitalization Program; Chairman, BCM;

• Initial new tax policy thoughts from WG members.

On May 29 BCM‘s Tax Working Group sent a detailed study of the current value added tax (VAT)

deficiencies and recommendations for efficiencies to result in greater tax revenue to the 100 Days

Revitalization Council.

Please contact T.Erdenetsetseg, BCM Working Group Coordinator, erka@bcmongolia.org .

___________________________________________

The BCM ‗expanded‘ Legislative Working Group (LWG) met on 20 May with 42 members attending at

Corporate Hotel meeting room.

This was the third expanded WG meeting on the draft Amendments to the Minerals Law. The 2 ½

hour session included BCM members from mining companies, embassies and the MNMA. Special

guests were 5 members of Parliament and others from the Mining Ministry, Geological Society and

Export Society.

LWG Co-chair, James Liotta, Mahoney Liotta, moderated the session.

The following 11 presentations were made:

- A healthy Private Sector Driven Industry (1997 and 2006 Minerals Law / Amendments / what to

look for. By Doug McGay – longtime resident in the Minerals and petroleum industry;

- Investor views and concerns about making investments in Mongolia and its mining sector. By

Randolph Koppa – Vice Chairman, BCM and President, TDB;

- A view from the Mining Majors by Sunjidmaa Jamba from Peabody Energy;

- A supply side view by Stephen Potter, Wagner Asia;

- Tax Issues impacting the Minerals Industry by D. Onchinsuren – Co-chair BCM Tax Working

Group and Deloitte Onch Audit;

- Use of MSE for State Privatizations by Nick Cousyn – Co-chair, BCM Capital Markets Working

Group and BDSec;

- Views from within the Industry by N. Algaa – Executive Director, MNMA;

- Transparency and Public Comment by David Wyche – Economic/Commercial Section Chief,

Embassy of the United States of America

- International Agreements that attract bi-lateral investment, and views on the State ownership

of assets by Maxim Berdichevsky – Counselor & Senior Trade Commissioner, Embassy of Canada

- Some specific thoughts on the Amendments by James Liotta – Co-chair, BCM LWG and

MahoneyLiotta Law Firm; Bayar Budragchaa - Co-chair, BCM LWG and ELC Law Firm.

As MP Garamgaibaatar, Chair of the Standing Committee on Economic Affairs and Head of the

Parliamentary Working Group on the Draft Amendments to the Minerals Law, commented at the

meeting's conclusion - "We should not really change general structure and core contents of the draft

Amendments."

Also MP Garamgaibaatar welcomed BCM sending any additional comments directly to his Working

Group which was accomplished by the BCM Legislative Working Group.

Note: Amendments to the Minerals Law were passed by Parliament on 1 July 2014.

BCM WEBSITES

MONGOLIAN WEBSITE: „PRESENTATIONS‟

The following statistics and reports posted on Presentations section in Mongolian:

http://bcmongolia.org/mn/илтгэлүүд

• Монгол улсын нийгэм эдийн засгийн байдал, 2014 оны 4 сарын байдлаар, Үндэсний

статистикийн хороо

• Мандал Женерал Даатгал тайлан, 2014 оны 5 сар

• Сант марал сангаас гаргасан УЛС ТӨРИЙН БАРОМЕТР №13(47), 2014 ОН 3 САР

• Монгол улсын нийгэм эдийн засгийн байдал, 2014 оны 3 сарын байдлаар, Үндэсний

статистикийн хороо

•―Anti-Corruption legislation and State Policy‖ (Mongolian) by D. Munkhjargal, Prevention and

Public Awareness Department, Senior Commissioner, Independent Authority Against Corruption

(IAAC) Mongolia at the ―ANTI-CORRUPTION LEGISLATION/POLICY, INTERNATIONAL BEST PRACTICE

ON TRANSPARENCY‖ Training seminar, Mar 06, 2014

___________________________________________

ENGLISH WEBSITE: 'PRESENTATIONS', 'MONGOLIA REPORTS', „INTERVIEWS„, MONGOLIAN

BUSINESS NEWS‟, „PHOTO GALLERY‟

2 presentations from BCM monthly meeting on June 23, 2014:

• T. Gansuld, Executive Director, Outotec Mongolia – ―Outotec Mineral Processing Solutions and

Experience in Mongolia‖

• Lisa Gardner, Journalist & Media Trainer – ―Mongolia‘s Media Laws: Defamation, Libel and

Threats to Press Freedom‖

3 presentations from BCM monthly meeting on May 26, 2014:

• B. Lakshmi, Director, Mongolia Economic Forum – ―Why Mongolia Business Summit?‖

• Nick Cousyn, Co-chair, BCM Capital Markets Working Group – ―Use of MSE for State Privatizations‖

• Peter Benson, VicRoads Team Leader, ADB Capacity Building Project – ―Mongolia Roads –

Achievements and Challenges‖

• China Metals & Mining Thermal Coal, Coking Coal, Copper, Gold, Steel by Macquarie Capital

Securities Limited

4 presentations from 3rd Mongolia Trade and Commodity Finance Conference, May 13, Blue Sky-UB:

• Mongolia – New Investment Laws, Stephen Tricks, Consultant, Clyde & Co;

• Mongolia Investment Law: select issues, B. Enkhbat, Partner, MDS & KhanLex Law Firm;

• Mongolia‘s promise of mineral wealth, Arnout van Heukelem, Head of Metals & Mining Asia ING;

• Utilizing international partnerships to extend access to trade finance, Marco Nindl, Trade Finance

Banker, EBRD.

Mongolia Reports: http://bcmongolia.org/en/mongolia-reports

• World Investment Report 2014 by United Nations Conference on Trade and Development ;

• Social and economic situation of Mongolia as of May 2014 by National Statistical Office of

Mongolia; (available in Mongolian language - Монгол улсын нийгэм эдийн засгийн байдал 2014

оны 3 сарын байдлаар, Үндэсний статистикийн хороо);

• Real Estate Report 2014 by Mongolia Properties;

• ASIA Reaching for the Top by International Monetary Fund, June 2014;

• ASIA Achieving Its Potential by International Monetary Fund, June 2014;

• Mongolia: Economy outlook 2014, by Asian Development Bank;

• Polit Barometer by Sant Maral Foundation, March 2014.

Interview Section: http://bcmongolia.org/en/interviews

• Talking to United World, the Executive Director of the Mongolian Drilling Association (MDA)

Professor J. Tseveenjav. Source: http://www.worldfolio.co.uk/;

• Jim Dwyer, Executive Director, BCM – ―Business need more business‖;

• Damshnamjil Tsogtbaatar, Chairman of the SPC: ―Privatizing Mongolia‖;

• Jan Hansen, Economist, ADB: ―The depreciation should help to increase the competitiveness and

to develop the non-mining industrial sector‖.

BCM's English website includes the ―Mongolia Business News‖ section. BCM continuously posts news

stories and analysis of relevance to Mongolia at ‗Mongolian Business News‖ before they are all put

together each week for Friday's weekly NewsWire.

The ―Photo Gallery‖ contains photos from the 6th Anniversary BCM Renewal dinner on November

11, 2013.

The BCM NewsWire will continue to be issued each Friday, incorporating items already on the home

page for a consolidated account of the week‘s events.

SOCIAL NETWORK WITH BCM

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 https://www.facebook.com/TheBusinessCouncilOfMongolia 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

https://twitter.com/bcmongolia.

The bulk of the content on BCM‘s new LinkedIn page is Mongolian language to better cater to BCM's

Mongolian-speaking audience and members. Please click on the below link to follow us on our new

LinkedIn page.

http://www.linkedin.com/company/business-council-of-mongolia?trk=company_logo

Social stats: BCM now has 5,871 fans on our Facebook fans page, 642 connections on LinkedIn

network, and 1,136 followers on Twitter.

Of course for news information, interviews, event photos, VIDEOS and announcements regarding our

organization, visit the official BCM website at http://bcmongolia.org/en/

INFLATION

Year 2006 6.0% [source: National Statistical Office of Mongolia (NSOM)]

Year 2007 *15.1% [source: NSOM]

Year 2008 *22.1% [source: NSOM]

Year 2009 *4.2% [source: NSOM]

Year 2010 *13.0% [source: NSOM]

Year 2011 *10.2% [source: NSOM]

Year 2012 *14.0% [source: NSOM]

Year 2013 *12.5% [source: NSOM]

June 30, 2014 *14.6% [source: NSOM]

*Year-over-year (y-o-y), nationwide

Note: 15.1% y-o-y, Ulaanbaatar city, June 30, 2014

CENTRAL BANK POLICY LOAN RATE

December 31, 2008 9.75% [source: IMF]

March 11, 2009 14.00% [source: IMF]

May 12, 2009 12.75% [source: IMF]

June 12, 2009 11.50% [source: IMF]

September 30, 2009 10.00% [source: IMF]

May 12, 2010 11.00% [source: IMF]

April 28, 2011 11.50% [source: IMF]

August 25, 2011 11.75% [source: IMF]

October 25, 2011 12.25% [source: IMF]

March 19, 2012 12.75% [source: Mongol Bank]

April 18, 2012 13.25% [source: Mongol Bank]

January 25, 2013 12.50% [source: Mongol Bank]

April 8, 2013 11.50% [source: Mongol Bank]

June 25, 2013 10.50% [source: Mongol Bank]

CURRENCY RATES – 24 JULY 2014

Currency Name Currency Rate

US Dollar USD 1,853.09

Euro EUR 2,496.67

Japanese yen JPY 18.24

British pound GBP 3,158.13

Hong Kong dollar HKD 238.60

Chinese Yuan CNY 299.23

Russian Ruble RUB 52.94

South Korean won KRW 1.81

Disclaimer: Except for reporting on BCM‘s activities, all information in the BCM NewsWire is

selected from various news sources. Opinions are those of the respective news sources.