BUSINESS COUNCIL of MONGOLIA NewsWire

www.bcmongolia.org info@bcmongolia.org

Issue 241 – September 28, 2012

NEWS HIGHLIGHTS: Business

Oyu Tolgoi dispels myths;

Rio polishes its image;

A power struggle;

Voyager Resources looks to return to drilling in late 2012;

Centerra to extract value from low-grade ore;

Berkh-Uul confirms 2.3 million tons flurospar at Delgerkhaan;

Eznis adds Bombardier A400 to fleet;

Mongolian air charter export freight needs to stay lively for EFIS;

TDB raises USD 300 million in debt offering;

Mayer Brown advises TDB on international debt offering;

MMC receives B+ from S&P;

Origo to add exposure to MSE fund;

Centerra's regulatory approval at Boroo earns it higher marks;

MMC installs new risk-management software corporate-wide;

Aspire appoints non-executive director;

Centerra nears completion of maternity hospital annex;

Wagner Asia to provide USD 15,000 to environmental projects;

15th Annual NAMBC Investors Conference begins 16 October;

Mongolia set for USD 1.3 billion non-mining power plant investment;

Caterpillar dealers report double-digit sales jump for summer. Economy

Government to spend MNT 58.1 billion in cash payments for children’s welfare;

ADB to loan USD 200 million for UB transportation networks;

Government Action Plan is the chill pill to investors' pains;

Action plan hints at “aggressive policies” favorable to investors, says Origo;

Farmers look to greater rapeseed oil harvests for 2013 in place of wheat;

Street vendors’ apples falsely labeled from Mongolia;

Mongolia joins FTSE's watch list;

Multi-tasking Mongols;

Herders worry about the impact of mining projects;

Don't count out Mongolia's resource sector yet;

Managers—not workers—to blame for unsafe construction, says MBA president;

American University of Mongolia sets out to prepare Mongolia to think;

Solar panels light up herders' futures;

Zimbabwean helps Mongolians dig for gold;

Falcon's nest project aims to boost schools;

Machete armed gang robs crewmen of Mongolian vessel;

China cuts coal, rare earth production. Politics

Parliament passes its 2013 legislative schedule

Deputy Minister recommends maintaining OT investment agreement;

Vice ministers appointed;

Budget cuts effect mass layoffs within government;

MPP loses membership to rival MPRP;

Mongolia's great opportunities must be shared by the nation, says Elbegdorj;

Elbegdorj returns to his alma mater;

Russian-Mongolian military exercise begins today;

China pledges for strengthened military ties;

Brazil to help develop football in Mongolia;

Government Action Plan shows more intended influence from government;

Mongolia's next challenge.

ECONOMIC INDICATORS: MSE Top 20 Index by Market Capitalization;

Foreign-listed Companies with Mongolian Assets;

August Macroeconomic Overview;

Supermarket price comparison-September 2012

Inflation;

Central Bank policy rate;

Currency rates.

*Click on titles above to link to articles. _______________________________________________________________________________

SPONSORS

Khan Bank Eznis Airways

Kempinski Hotel Khan Palace Mongolian National Broadcasting

Breakthrough PR Oxford Business Group

___________________________________________________________________________________

BCM MONTHLY MEETING RECAP

The meeting on 24 September with Laurenz Melchers in the chair was attended by 100 members

and invited guests.

BCM Vice Director Ser-Od reminded members of the open letter to Parliament published in

numerous newspapers in Mongolia. It appealed for a transparent and stable investment climate that

encouraged input from the private sector when Parliament drafts its legislation. The vice director

also reported the Working Group for Education's intention to partner with the Ministries of Labor,

Education, and Economic Development as well as international organizations such as the Korean

International Cooperation Agency (KOICA). Additionally, the Working Groups for Taxes and for

Capital Markets will meet in October, he said.

BCM membership now stands at 242. The three most recent members are:

1. Mott MacDonald Mongolia is a uniquely diverse EUR 1 billion global consultancy, delivering

leading-edge solutions for public and private sector clients across 12 core business areas. As one of

the world's largest employee-owned companies with more than 14,000 staff, it has principal offices

in nearly 50 countries and projects in 140.

2. Oval Partnership is a multi-disciplinary architectural practice headquartered in Hong Kong with

offices in China and the United Kingdom. Oval is the center of a group of companies working on

sustainable lifestyle projects across a variety of design disciplines, including architecture, master

planning and interior design.

3. Od Consulting HGZ is a local legal consultancy firm that provides high-level professional services.

It works closely with its customers to tackle any challenges and define strategies and solutions to

gain significant and effective results. Its concentration is on long-term relationships with its

customers and partners, which are always based on mutual trust and benefits.

The evening began with an update from Anne Delarue, Country Director of Oxford Business Group,

on its Mongolia Report.

For 18 years OBG has focused on research and consultancy, and publishing. However, it is currently

only active in research and publishing in Mongolia. OBG published its first Mongolia Report in March

2012 and has plans to publish its second before the end of the first quarter of 2013.

―At the end of the day, it's all about the information,‖ said Delarue; later adding, ―Data is the first

step toward development.‖

OBG arrived on invitation by the Mongolian government and partnered with the Foreign Investment

and Foreign Trade Agency (FIFTA) and BCM. Due to the restructuring of the government, OBG is now

under talks with the office of the president for a new partnership with the government.

At the conclusion of Delarue's presentation, she and Chairman Laurenz Melchers signed a

memorandum of understanding (MOU), formalizing BCM and OBG's cooperation and partnership.

Patrick Nijs, Ambassador of the Belgium Consulate of Ulaanbaatar, gave the second presentation of

the evening, introducing the audience to Belgium's intentions for economic and political

cooperation with Mongolia.

As a nation familiar with occupations and geopolitical turmoil, said Nijs, ―it's no wonder for us to be

one of most committed to cooperation in Europe‖and to become a founding member of the

European Union. Belgium currently exports 80 percent of its production and ranks as the ninth

largest exporter in the world, he said.

―Trade and business is a national business for us. We have no other national interests other than

peace and trade.‖

Belgium is currently looking over Mongolia for opportunities for engagement and to learn the ―do's

and don'ts for success in Mongolia.‖ The consulate hopes to step up Belgium's presence in Mongolia

to pursue an economic mission after a year spent with fact finding and research. Members of the

Beijing-based consulate are currently visiting Mongolia with three companies to meet with seven

ministries and the Mongolian National Chamber of Commerce and Industry (MNCCI), in addition to

BCM.

B. Bayar, Managing Partner of Economic Legal Consultancy (ELC) Co. and co-chair of the BCM

Legislative Working Group spoke next to give an update on the progress of its draft legislation for

―investment support‖ to be submitted to Parliament. Bayar leads a team of lawyers that have thus

far submitted draft laws for mineral and water resources.

This latest law aims to introduce a tax system to offer stability for both foreign and Mongolian

investors, said Bayar.

―The Law on Supporting Investors and a Stable Tax Environment aims to provide a tax environment

where local and foreign shareholders are the same.‖

The law would allow companies to apply for long-term tax stability after meeting a certain

threshold for investment. Companies would receive a certificate that allots a given number of years

for the duration of tax stability. Other companies would also be granted a conditional term where

it must reach the threshold or have its certificate status revoked.

The law would include the procedures for applying, the time for approval, and other details to

provide a clear and predictable process.

―This is a way to mitigate some anti-foreign investment sentiment in Parliament and hopefully

improve it for you all,‖ said Bayar.

Houston Spencer, Vice President of Communications and Media Relations of Oyu Tolgoi LLC, gave

the final presentation, providing a summary of the Oyu Tolgoi investment agreement to dispel some

of the rumors plaguing the media. He began by thanking BCM and its partners in the private sector

for releasing their open letter to the government

―BCM worked together with the Mongolian National Chamber of Commerce and Industry, the

Federation of Mongolian Employers, the CEO Club, the Mongolian National Mining Association, the

Mongolian Confederation of Professionals, and an NGO called Fair Taxes and Wise Spending. That‘s

a very long list of like-minded people who put their names on a full-page ad to the government. It

is the length of the list that struck me. I don‘t think I‘ve ever seen anything come out from that

group of organizations together.‖

Spencer listed off a number of false rumors such as Mongolia receives no benefit from the Oyu

Tolgoi project; it will not see any money for decades; and Mongolia bears a huge risk. In actuality,

Mongolia receives the largest share of Oyu Tolgoi's cash flow (71 cents on every dollar made); it has

received significant tax income since the first day of construction (with projections to receive 700

million by the time the mine goes into commercial operation next year); and bears no-risk as per

the Oyu Togloi investment agreement.

―Without access to global capital Mongolia would face very tough choices. If foreign investors

hesitate, what are the alternatives? Who would fund development?‖ asked Spencer.

―Mongolia needs its friends and third-neighbor investors now more than it ever has.‖

___________________________________________________________________________________ BUSINESS OYU TOLGOI DISPELS MYTHS

Oyu Tolgoi LLC has issued some corrections regarding its characterization in the media in an official

statement.

To the claim that the Oyu Tolgoi investment agreement exempts investors from paying value-added

tax (VAT) and export duty, the company said it does in fact pay tax and it was Mongolia's top

Customs tax payer and the sixth top tax payer to the government in 2011. By the end of 2013, the

total taxes Oyu Tolgoi will have paid to the state budget will total USD 700 million. In 2011 alone,

the government of Mongolia received USD 251 million in taxes from Oyu Tolgoi.

To claims that Mongolia will receive no more than 30 percent of the cash flow from the project,

statistics from the International Monetary Fund (IMF) show Mongolia will receive up to 71 percent of

Oyu Tolgoi's cash flow over the lifetime of the project. Independent experts calculated Mongolia

benefits far more than ―third neighbor‖ investors through dividends, income tax, royalties, VAT and

additional taxes.

Source: Oyu Tolgoi LLC

RIO POLISHES ITS IMAGE

Amid public back lash and political posturing by Parliament members against the Oyu Tolgoi copper

and gold project, Rio Tinto PLC is faced with the great public-relations challenge of explaining that

the project is truly beneficial to Mongolia.

Twice in the past year, backbench members of Parliament have issued a letter to the prime

minister ordering a renegotiation of the terms so that Mongolia can grab its 50 percent stake as

soon as investors recoup their USD 6 billion start-up investment. Rio Tinto, the 66 percent indirect

stakeholder through majority ownership of Turquoise Hill Resources Ltd., says that the time for

negotiations has passed. But its defensive position comes with a dose of soft power too.

The Anglo-Australian firm is spending over USD 2 million on environmental and social development

projects. Projects included the renovation of a hospital near the mine site, a vocational program

for the local population and a new dental clinic. Rio Tinto also donated USD 150,000 to rebuild a

local Buddhist monastery, which Stalin's forces destroyed in 1937. For many locals, the most

popular initiative is a USD 125 million vocational training program for more than 3,300 Mongolian

workers. Rio Tinto is also helping to fund the American University of Mongolia, to open in 2014.

Rio Tinto's efforts and reputation as a world-class block-cave miner has made the company a

welcome part of Mongolia's corporate fabric, in sharp contrast to Canada's Ivanhoe Mines Ltd., the

early license holder of the project. For many here, Ivanhoe Mines became a symbol of alleged

foreign greed following media and political attacks against the project.

―Public opinion was really tough on Ivanhoe Mines, but Rio Tinto is more respected because

Mongolians recognize the underground expertise of this global mining corporation,‖ said Origo

Partners PLC analyst Dale Choi. ―Mongolians see this company as an indispensible partner.‖

But while Rio Tinto's mining skills and corporate responsibility are highly regarded, the company

remains dogged by an investment agreement that many see as unfair. But while Rio Tinto

repeatedly asks the country to keep a long-term perspective, for Mongolians the need for

development is immediate.

Source: Michael Kohn

A POWER STRUGGLE

In the middle of the Gobi Desert, Rio Tinto PLC's flagship USD 5.2 billion U.S. copper-gold mine

stands nearly completion except for one thing: the mine is waiting for the power to be switched on.

The Oyu Tolgoi mine, which holds the world's largest undeveloped copper deposit, has been caught

in the middle of a complex negotiation between China and Mongolia. The two sides are trying to

reach a deal under which the mine would buy electricity from the Chinese grid.

―Active discussions are continuing on the commercial agreement. You have to remember this is a

complex deal, but we are maintaining our focus and working hard towards reaching an agreement,‖

said a Rio Tinto spokesperson.

But for now the copper concentrator at Oyu Tolgoi sits idle after a multi-billion-dollar, three-year

construction effort. The power lines from China to the mine have been built and tested, according

to Rio Tinto, but the two sides have not been able to reach an agreement over the commercial

terms of the power supply contract despite several years of negotiations. The mine construction

currently stands at 97 percent completion, and further steps in the construction, such as fine-

tuning the copper concentrator, will require larger and larger amounts of power.

―In the absence of a power supply agreement they can't turn the plant on and start producing

metal,‖ said Andrew Driscoll of CLSA.

However, he still believes the power supply will come through without being a major disruption to

commissioning plans. If the delay persists, the mine stands to miss out on roughly USD 8.4 million

per day in delayed revenues from copper and gold production, according to rough estimates based

on the mine's first-year production forecast.

Source: The Globe and Mail

VOYAGER RESOURCES LOOKS TO RETURN TO DRILLING IN LATE 2012

Mongolian copper and gold explorer Voyager Resources Ltd. said diamond core drilling would

recommence in late 2012 to focus on copper porphyry in an update on its Khul Morit project.

Voyager Resources has received ―highly encouraging‖ results from its Khul Morit exploration,

including 34 meters of 3.4 percent copper and 14.7 grams per ton of silver from 92 meters as well

as 116 meters of 2.4 percent copper and 7.2 grams per ton of silver from 30 meters at the Cughur

prospect. A total of 763 samples from 26 of the last set of drill holes completed during the drilling

program in early 2012 have been sent to the laboratory for assaying. These include three diamond

core drill holes, three diamond core drill tails and 20 reverse circulation holes. Assay results are

expected to be returned in early October.

The company has also created a new geological team, led by Ken Stone, a senior consulting

geologist with over 40 years international exploration experience. Stone has particular experience

in the search and evaluation of porphyry copper and gold related environments.

The geological and alteration signature at KM are typical of large copper porphyry systems globally.

In particular the quartz tourmaline breccias, which indicate a high level copper mineralized

porphyry system and the classic potassic alteration, typical of the low level core of a porphyry

system. These results maintain Voyager Resource's confidence that Khul Morit has the potential to

hose a significant copper porphyry system.

The emphasis of recommenced drilling aims to ensure that the porphyry is in line with the

company's primary strategy to focus on the large copper porphyry targets at KM. The company will

also complete a number of hydro-geological drill holes to support the application for a mining

license.

Source: Voyager Resources Ltd.

CENTERRA TO EXTRACT VALUE FROM LOW-GRADE ORE

Centerra Gold Inc. has acquired the permits to use special techniques to produce gold from low-

grade ore at its Boroo mine in Selenge Aimag.

Heap leach technology produces gold by stacking low-grade ore on a specially prepared pad and

leaching the gold by applying weak cyanide solution through the drippers installed in the ore. Boroo

Gold LLC, the subsidiary company operating the mine, made estimates to produce 2,000 ounces of

gold monthly by applying weak cyanide solution through the drippers installed in the ore.

Boroo Gold estimates it can produce 2,000 ounces of gold per month starting from December this

year. Centerra Gold also announced that it acquired the mining license to operate at Altan Tsagaan

Ovoo in Dornod Aimag from the Mineral Resources Authority and is continuing exploration drilling at

this property.

―We are pleased that we have been able to move forward with these permits. Progress on these

milestones underline our continued confidence in the future of our Mongolian projects.‖ Source: Centerra Gold Inc.

BERKH-UUL CONFIRMS 2.3 MILLION TONS FLUROSPAR AT DELGERKHAAN

Berkh-Uul JSC has confirmed a fluorspar resource of 2.3 million tons at Delgerkhaan Soum, Khenti

Aimag by the Mineral Resource Agency (MRA)

The deposit reportedly comprises mineralization of 50.52 percent flurospar compared with average

contents of 30 percent. The discovery raises Mongolia‘s potential for flurospar production nearly

four times from 16 million to 60 million tons.

Source: Unuudur

EZNIS ADDS BOMBARDIER A400 TO FLEET

Eznis Airways LLC, the largest private airline in Mongolia, has acquired a previously owned Q400

aircraft and has started service in the country with the fast and fuel-efficient turboprop. Eznis

acquired the Q400 aircraft through Nordic Aviation Capital, the Denmark-based leasing company.

Eznis Airways' acquisition of the aircraft follows the type acceptance certification that was awarded

by the Civil Aviation Authority (CAA) in May 2012 for operation of the aircraft in Mongolia. The

certification preceded the decision in June 2012 by the Interstate Aviation Committee (IAC) to

award aircraft type approval to the Q400 turboprop for operation in Russia and the Commonwealth

of Independent States (CIS).

―The Q400 aircraft is leading Bombardier's expansion across much of Asia and the certification in

Mongolia, in addition to the recent type approval in Russia and the CIS nations, are an important

party of our strategy,‖ said Rod Sheridan, vice president of customer finance for Bombardier

Commercial Aircrafts.

Powered by two new-generation, 5,071 shaft horsepower PW150A engines, and capable of flying at

a speed of up to 667 kilometers per hour, the Q400 aircraft can quickly climb above the strong

summer head winds, which blow across Mongolia, and also access the high elevation airports in

mountainous regions of the country. Its steep approach capabilities allow the aircraft to quickly

descend over the mountains to easily navigate the strong northerly winds found at Chinggis Khan

International Airport.

The Q400 aircraft has been certified for gravel runway operations that predominate in rural

Mongolia, which enables Eznis to fly mining charter customers directly to mine sites, while the

aircraft's large baggage compartment allows ample storage of mining provisions.

Source: Bombardier Inc.

MONGOLIAN AIR CHARTER EXPORT FREIGHT NEEDS TO STAY LIVELY FOR EFIS

A shipment of cattle to Mongolia arrived without problem, thanks to special care by a shipping

company.

Some consignments need to be handled with a little more care than others and when EFIS Air, part

of the ECS conglomerate group which features a host of air cargo industry stakeholders, were

approached to handle a particularly delicate shipment, the freight compound at Châteauroux-Déols

airport in France took on more of the look of a farmyard than a cargo transit terminal.

EFIS Air chartered a Boeing 747 freighter for the flight to Ulaanbaatar to ensure the 150 limousin

and 30 montbéliarde cattle arrived safely at their destination. The cows are being used in a

program to establish the breeds in Mongolia. On arrival at the airport, EFIS Air arranged for the

cows to be carefully loaded into specially created shipping pens to ensure their safety during the

flight.

―Moving livestock requires great care and attention to ensure the welfare of the animals and to

meet all the regulatory requirements,‖ said Alain Boussard, managing director of EFIS Air. ―We

were given responsibility for this flight because of our reputation for trust, expertise, and

commitment.‖

Source: Handy Shipping Guide

TDB RAISES USD 300 MILLION IN DEBT OFFERING

Trade and Development Bank (TDB) of Mongolia LLC has issued USD 300 million senior unsecured

notes listed at the Singapore Stock Exchange (SGX).

This is the fourth time that TDB tapped the international bond market, after two successful senior

unsecured deals in 2007 and 2010 and a subordinated notes issuance in 2010. TDB was the first ever

Mongolian bank to issue bonds and the only Mongolian repeat bond issuer.

With the world economy stagnated by the Eurozone debt crisis, an unstable financial environment

in the United States and a slowdown in China, the bond issuance marks the first ever ―benchmark‖-

sized bond issue from TDB and the Mongolian banking sector. The bond issuance is a notable

achievement for a B1 rated country such as Mongolia. The transaction met with overwhelming

demand and produced an overbook of USD 1.2 billion, comprising 150 accounts, an unprecedented

number compared to previous USD 75 million and 175 million bonds which TDB has been

implementing within its Euro Medium-term Note program since 2007.

TDB's new 2012 bond shows that Mongolian commercial banks have credibility with investors even in

the current condition of the global economy. The first bond issued by TDB in 2007, worth USD 75

million, was duly repaid on maturity in January 2010. After the reappointment of its first issue,

TDB's second issue of USD 150 million took place in October 2010. The new issue of senior notes

carries a coupon of 8.5 percent and compares favorably with the first issue, which had a coupon of

8.625 percent. The bank's strong financial performance, positive record on previous issues and

overall sound fundamentals have enabled it to solicit a strong market response, resulting in a four-

times over-subscription of the offering.

The issue met TDB's object over a broad institutional placement with 60 percent of the sale going

to asset managers and hedge funds, 25 percent to private banks, and 15 percent to financial

institutions. Geographically Asia took up 60 percent and Europe and offshore United States took up

the remaining 40 percent.

Source: Trade and Development Bank of Mongolia LLC

MAYER BROWN ADVISES TDB ON INTERNATIONAL DEBT OFFERING

Mayer Brown JSM announced that it has advised Trade and Development Bank (TDB) of Mongolia LLC

on its recent issuance of USD 300 million senior notes due 2015.

―Mayer Brown JSM has built a long-standing relationship with TDB and we are delighted to have

advised them on yet another international capital markets issuance,‖ said Jason T. Elder, a partner

of Mayer Brown LLP, based in Hong Kong. ―We see great potential in Mongolia's banking sector, and

we look forward to continue assisting TDB as they explore future business opportunities.‖

ING Bank NV, Singapore Branch and Merrill Lynch International acted as joint lead managers and

TDB Capital LLC acted as the co-manager.

Source: News.mn

MMC RECEIVES B+ FROM S&P

Standard and Poor‘s Rating Services (S&P) has given Mongolian Mining Corp. (MMC) a ―B+/Stable‖

credit rating.

The rating reflects the company‘s mineral concentration in coking coal, customer concentration

risks, and its exposure to an untested and evolving regulatory environment in Mongolia (―BB-

/Positive‖). S&P had an ―uncertain‖ outlook for coking coal prices over the next 12 months, due to

wavering demand from China that ―will likely limit a rapid, substantial, and sustainable price

recovery over the next six months,‖ despite the government‘s expressed intention to provide

stimulus.

―While China‘s recently announced USD 150 billion stimulus program could temporarily push up the

demand for steel, the possibility of lasting effects remains unclear, in our view,‖ said S&P. ―Still

current coking coal prices of US$140-US$150 per ton are inching toward the production costs of

higher cost producers. This could trigger supply cuts and provide some cushion from a significant

fall in prices.‖

MMC‘s financial performance for the first six months of 2012 was weaker than S&P had anticipated,

with sales declined due to slowed growth in China. It described MMC as with ―adequate,‖ but easily

swayed by coal prices. The credit rater expected MMC‘s liquidity to exceed its needs, however, by

about 1.2 times.

―The stable outlook reflects our view that MMC‘s sales will increase and that the company will

maintain its profitability over the next two years, further supporting its cash flow adequacy,‖ said

S&P.

The rating could be raised if there was greater transparency into MMC‘s financial performance and

risk profile. However, lower than expected coal sales and falls in gross profit per tons below USD 35

could also lower it.

Source: Standard & Poor‘s Rating Services

ORIGO PARTNERS TO ADD EXPOSURE TO MSE FUND

Strong performance by Origo Partners PLC's Mongolian Stock Exchange (MSE) fund has convinced its

managers to increase its exposure.

The private equity investment company gave the MSE high marks in its half year report. It said the

MSE Liquidity Fund continued to perform well during the period, reporting a return of 10.3 percent

annualized, with June being its ninth consecutive month of positive performance since inception.

―With the fund's peers delivering negative returns year to date, we are very pleased this product

has achieved comparatively world-class returns on the basis of modest risks,‖ said the company.

―We have therefore decided to increase exposure to the fund.‖

In the first half of the year China experienced economic slowdown, led by a contraction of the real

estate market and reduced exports. China's economic deceleration has been accompanied by a loss

of investor confidence in Chinese companies in the wake of a broad range of widely covered

financial fraud cases. The reputation of Chinese companies have fallen significantly as a result.

Mongolia, to which Origo Partners has a significant exposure through a number of mining

investments, has gone through a turbulent period with negative foreign investment rhetoric,

hampering its ability to increase the value of investments and generate cash realizations.

Source: Origo Partners PLC

CENTERRA'S REGULATORY APPROVAL AT BOROO EARNS IT HIGHER MARKS

Centerra Gold Inc. announced last week that it had won regulatory approval to resume its

operations at its Boroo mine in Mongolia, prompting a Scotiabank analyst to hike his price target on

the company.

Craig Johnston, analyst with Scotiabank, boosted his 12-month price target to USD 16 from a

previous target of USD 12. As part of his price hike, Johnston increased his net asset valuation on

Centerra Gold by 1.5 percent to USD 13.88.

He also increased his net asset valuation on Centerra by 1.25 percent from 1 percent as Centerra

Gold restarted its Kumtor mine in Kyrgyzstan. The gold miner has had trouble in Kyrgyzstan this

year, given some politicians have tried to strip the company of its mining license as talks of

nationalizing resources flared up. But the idea was voted down by lawmakers earlier this year, and

Johnston notes a new government was sworn in this week.

Johnston added, however, that Centerra Gold still has concerns at its Gatsuurt project, which

requires a change in Mongolia's waters and forestries law to be approved.

―However operations could begin a matter of weeks after permission is received as ore is scheduled

to be trucked to Boroo for processing,‖ he said.

Source: Financial Post

MMC INSTALLS NEW RISK-MANAGEMENT SOFTWARE CORPORATE-WIDE

Active Risk announced that Mongolian Mining Corp. (MMC), the largest producer and exporter of

high-quality hard coking coal in Mongolia, has selected its award-winning software Active Risk

Manager (ARM) for enterprise risk management across all its department and subsidiary companies.

―Prior to the installation of Active Risk Manager, we were using spreadsheets and other related

tools to manage risk,‖ said Tserdondov, senior risk analyst at MMC. ―This was proving time

consuming and required considerable manual effort, therefore we looked around for a new

dedicated risk management software solution.‖

Active Risk Manager is being implemented by MMC at a corporate level, through to its subsidiaries,

and has also been adopted by MCS Holding Group, the majority shareholder in MMC.

Source: Active Risk

ASPIRE APPOINTS NON-EXECUTIVE DIRECTOR

Mongolian coking coal explorer and developer Aspire Mining Ltd. has appointed S. Turbat as a non-

executive director.

Turbat has over 12 years of experience in the resource sector of Mongolia. As one of the authors of

the 1997 Minerals Law of Mongolia and as an honorary member of the Mongolian National Mining

Association (MNMA), he is a key figure in the development of the Mongolian mining industry policy

and regulative framework. Turbat is a founder of Mine Info LLC and the Discover Mongolia annual

international mining forum. He currently serves as managing director of Behre Dolbear Mongolia

LLC.

Source: Aspire Mining Ltd.

CENTERRA NEARS COMPLETION OF MATERNITY HOSPITAL ANNEX

Centerra Gold Inc. is about 80 percent complete with the new annex of Ulaanbaatar's 1st Maternity

Hospital.

The hospital annex will have 150 beds (100 for women and 50 for infants), additional furniture and

medical equipment, said D. Enkhbayar, hospital chairman. He said the building will be used for

child birth only. The annex will provide medical treatment for women, utilizing computer

tomography equipment. The addition will require the staff to double in size, including additional

infant physicians and nurses.

Current work on the hospital annex includes the installation of an oxygen system, sanitary

engineering work, and air ventilation, said Ch. Ganchuudur, supervising engineer of the

Ulaanbaatar City Investment Department.

―Our company is not a construction company, but a mining company,‖ said A. Ariunzaya, Media

Relations Manager for the Boroo gold mine. ―However, our objective is to ensure that this hospital

building is built according to high standards where children will be born in conditions that fulfill

sanitary and hygiene requirements.‖

The completion of construction has been delayed from June to ensure that the annex is of suitable

quality, said Ariunzaya. She added that the project is of special importance to the company, and

that it would do whatever is necessary to bring about satisfactory results.

Source: Centerra Gold Inc.

WAGNER ASIA TO PROVIDE USD 15,000 TO ENVIRONMENTAL PROJECTS

Wagner Asia Equipment LLC has agreed to provide USD 15,000 in funding for projects targeting

environmental protection in Mongolia

Wagner Asia acts as Mongolia‘s official Ford Motor Co. dealer in its decision to direct USD 15,000 for

the financing of four projects using funds from the Ford Foundation. So far the company has

allotted a sum of USD 5,000 to a project that aims to build a park at the Tolgoi Micro-district.

Funding to the remaining three projects will cover up to 50 percent of costs.

Source: Unuudur

15TH ANNUAL NAMBC INVESTORS CONFERENCE BEGINS 16 OCTOBER

The 15th Annual North America-Mongolia Business Council‘s Investors Conference will be held in

Ulaanbaatar from 16 to 18 October.

The conference opens with a reception at the Zanabazar Museum on Tuesday, 16 October, followed

by two full days of speakers and panels on 17 October and 18 at the Kempinski Khan Palace Hotel.

Full simultaneous interpretation in Mongolian and English is available for all sessions.

Registration ends on 1 October.

Source: NAMBC

MONGOLIA SET FOR USD 1.3 BILLION NON-MINING POWER PLANT INVESTMENT

A group of foreign energy companies is set to invest USD 1.3 billion in a Mongolian power plant, the

biggest foreign investment in Mongolia outside the mining sector.

GDF Suez Group of France, Posco Energy of South Korea, Sojitz Corp. of Japan and Newcom Group

of Mongolia are negotiating the final details of a USD 1.3 billion coal power plant that will supply

power to Ulaanbaatar. The consortium announced in July that it was the preferred bidder for the

project but negotiations over the contract had to be postponed while Mongolia's newly elected

parliament formed a government, following the nationwide parliamentary elections in June.

―The new power plant is a priority project for this country and the government wants to make it

happen as soon as possible,‖ he said. ―The power plant is scheduled to begin operations by 2016

and will supply roughly half of Ulaanbaatar's energy needs.‖

GDF Suez, Posco Energy and Sojitz will each hold a 30 percent stake in the consortium, and

Newcom will hold 10 percent. GDF Suez will invest in the project through its subsidiary

International Power PLC. Of the USD 1.3 billion price tag for the plant, USD 400 million will be

raised in equity by the four consortium partners and a further USD 950 million will be raised in

debt, according to B. Byambasaikhan, Newcom's chief executive.

The imminent deal comes at a time when some foreign investors have started to pull back from

Mongolia due to a new law on foreign investment. Earlier this year Mongolia passed new rules that

mandate parliamentary approval for big investments in sectors including mining, banking and

telecommunications. However, the power plant will not require parliamentary approval because

the power sector is not covered by the foreign investment law.

Source: Financial Times

CATERPILLAR DEALERS REPORT DOUBLE-DIGIT SALES JUMP FOR SUMMER

Caterpillar Inc. dealers reported a double-digit sales jump for the three-month period ended in

August, partly due to strong sales in North America as customers replaced aging equipment. Wagner

Asia Equipment LLC is the official Caterpillar dealer in Mongolia.

Retail dealers for the world's largest heavy equipment maker reported a 13 percent sales increase

for the June-through-August period. The figure is down slightly from the 14 percent increase for the

May-through-July period, the company said in a filing with the U.S. Securities and Exchange

Commission. Peoria, Illinois-based Caterpillar said dealer sales in North America—where most of the

company's revenue comes from—were up 24 percent for the period, and dealer sales in the Asia-

Pacific region—the second largest—were up 27 percent.

While the U.S. economy remains depressed, many construction firms are having to replace aging

heavy equipment, boosting Caterpillar and its peers. Sales in China have been dented this year,

Caterpillar executives have said, and the company began exporting Chinese-made machines earlier

this summer. The company does brisk business in Australia and other Asian nations, though, and

expects China's recently announced USD 150 billion in stimulus spending to help results by next

year.

Source: Reuters

ECONOMY

GOVERNMENT TO SPEND MNT 58.1 BILLION IN CASH PAYMENTS FOR CHILDREN‘S WELFARE

The government has set out to allocate MNT 58.1 billion in financial assistance to children up to age

18 beginning 1 October.

The Ministry of Human Development and Social welfare is charged with responsibility for the

distribution of cash payments. Meanwhile, Minister of Finance Ch. Ulaan will be responsible for

setting aside funds of MNT 154.8 million for the monthly payments, training, advertisement of the

program, and filing of applications.

According to the National Statistics Office (NSO), Mongolia has 967,900 children eligible for

payments, totaling to MNT 58.1 billion.

Source: Undesnii Shuudan

ADB TO LOAN USD 200 MILLION FOR UB TRANSPORTATION NETWORKS

The Asian Development Bank (ADB) is to loan more than USD 200 million to Mongolia for the

improvement of transportation in Ulaanbaatar.

One of Asia's fastest growing cities, housing a population of 1.2 million, Ulaanbaatar is to benefit

from an upgrade to its roads and internal transport systems. Using a multi-tranch loan of up to UD

217.4 million, ADB will help fund the upgrade of 7.7 kilometers of road and expand a bridge for a

bus rapid transit corridor installation, and also upgrade 14 kilometers of electric trolleybus

infrastructure, including electric wires, feeder cables, and substations.

A second phase will comprise the construction of three additional bus depots and upgrade 11.1

kilometers of trolleybus infrastructure. The final phase, which will be completed by 2020, included

the further expansion of the bus lane network.

Source: KHL Group

GOVERNMENT ACTION PLAN IS THE CHILL PILL TO INVESTORS' PAINS

The Government Action Plan will soon be filed officially, as the government set its four-year agenda

following certain procedural formalities and publication in the State Information Digest of Mongolia.

The news coming from Ulaanbaatar is positive. After a significance amount of uncertainty before

and after the June 2012 election, the government is getting back to business, evidenced by the

proposed action plan and a formally documented set of policies from the recently formed

Democratic Party (DP)-led coalition government. The government has included some new light

controls in regulating the mining sector, which will reaffirm the attractiveness of Mongolia as a

mining investment jurisdiction.

Positive news around Turquoise Hill Resources Ltd. sees the renegotiation of the Oyu Tolgoi

investment agreement not included in the Action Plan after support from the current agreement

was reaffirmed in a recent State Structure Standing Committee (SSSC). The agreement will still be

subject to review, but this is in line with all investment agreements and recent concerns regarding

populist and resource nationalism pressures appear to have been firmly dismissed.

Foreign investment and capital into Mongolia is resuming with investors showing signs of supporting

Mongolia after the election. Trade and Development Bank (TDB) of Mongolia LLC successfully issued

senior notes on the Singapore Stock Exchange (SGX) worth USD 300 million last week, a record low

yield, which provides a real time precedent and positive sign for investment appetite for Mongolia

in the capital markets. At a meeting of the Cabinet of Ministers, support was thrown behind

proposal for a USD 5 billion of bonds from the Development Bank of Mongolia over the next two

years to go before Parliament. The funds would be used to finance major projects such as rail and

automobile road networks, power generation, the Tavan Tolgoi mine and the Sainshand industrial

complex.

The last 180 days will be remembered as a temporary softening amidst a highly contested national

election presenting investors a terrific opportunity to gain Mongolian exposure amid weakened

sentiment. The next 180 months (15 years) should vindicate these investors in making very well-

timed decisions.

Source: ResCap's Mongol Minute

ACTION PLAN HINTS AT ―AGGRESSIVE POLICIES‖ FAVORABLE TO INVESTORS, SAYS ORIGO

Mongolia's new four-year Government Action Plan is favorable to foreign investment, easing the

concerns of private equity investors in the country.

The newly elected Parliament of Mongolia has approved a four-year Action Plan that helps ease

concerns over foreign investment in the country, according to a statement from United Kingdom-

listed fund manager Origo Partners PLC, which has USD 100 million invested in Mongolia. Although

the 21-page action plan has yet to be published, Dale Choi, an associate at Origo Partners,

describes the plan as ―ambitious and progressive‖ and said the country is generally moving toward

favorable foreign investment policies.

―The new government has been extremely action-oriented,‖ Choi said, adding that they are intent

on seeing results from foreign investment in the Mongolian market. He later added, ―We welcome

these aggressive policies.‖

In May the Mongolian government passed several bills regulating foreign investment and includes

several projects the government hopes to do in conjunction with foreign investors.

Source: Emerging Frontiers

FARMERS LOOK TO GREATER RAPESEED OIL HARVESTS FOR 2013 IN PLACE OF WHEAT

The cheap price for wheat has driven Urgats Khuder LLC to pursue the cultivation of rapeseed for

next year.

With wheat prices as low as MNT 250,000 a ton for wheat and transport costs of up to MNT 190,000,

wheat production is fast becoming less profitable, and thus less attractive, to producers. Expanded

production and large harvests following an unusually rainy summer season have quickly led to a glut

in the market and falling prices.

―The owners of wheat factories are among the richest people in Mongolia,‖ said L. Tsandeleg,

director of Urgats Khuder. ―If they don‘t understand farmers and treat them cheaply, wheat

farming will fall.‖

Unless export prices from China grow to MNT 350,000 per ton, said Tsandeleg, farmers will opt to

grow rapeseed for rapeseed oil production, which is currently a more profitable endeavor. Last year

farmers could sell wheat to the government‘s Wheat Fund. But with leftover reserves from last year

still there, this is no longer an option. Instead farmers must sell at market prices dictated by

distributors.

The aid from subsidies provided by the government are limited because they are based on how

much wheat farmers sell to distributors. Tsandeleg, who is also the head of the Mongolian National

Association of Concentrated Farming and Animal Husbandry (MNACFAH), recommended that

subsidies instead be based on the number of hectares farmed.

If the plans go through, Mongolia would see increased production from the 400 hectares of land

farmed for rapeseed oil this year.

Source: Udriin Sonin

STREET VENDORS‘ APPLES FALSELY LABELED FROM MONGOLIA

Street vendors are selling apples on the streets of Ulaanbaatar they falsely claim to be grown in

Mongolia.

The reality is that not enough apples are even produced in Hovd and Bayan Ulgii Aimags, where 90

percent of apples are grown in Mongolia, for sale in Ulaanbaatar, said Ts. Tsegmid, a senior

specialist at the Unfair Competition Regulatory Authority. She said all of the 10 tons of apples

produced in those provinces are sold in those provinces, while 70 percent of the 2,144 tons of

imported apples come from China. Tsegmid said laboratory results of alleged Mongolian-grown

apples purchased on the street revealed that they actually came from China.

―We have received information from the provinces that it isn‘t possible to supply the Ulaanbaatar

market with [Mongolian apples],‖ said Tsegmid.

Although the apples did not come from Mongolia, laboratory results showed that they were not

harmful for consumption. However, they had been marked up from MNT 3,000 a pound to about

MNT 5,000.

Source: UB Post

MONGOLIA JOINS FTSE'S WATCH LIST

Mongolia has joined the watch group of the Annual Country Classification Review for 2012 by FTSE

Group, a leading global index provider.

This year the FTSE Policy Group has not reclassified any countries but has added two further

countries to the current watch list of seven countries being considered for promotion between

market classifications. Argentina is listed for possible removal from the ―Frontier‖ classification

while Mongolia is under consideration for possible inclusion of the same category.

Mongolia will join the Watch List for possible inclusion due to its progress in developing a market

infrastructure that is attractive to foreign investors through improvements to its trading settlement

and custody arrangements.

The annual review is the process by which global equity markets are classified as ―developed,‖

―advanced,‖ ―emerging,‖ ―secondary emerging,‖ or ―frontier.‖ They are evaluated against a set of

21 ―quality markets‖ criteria. As of July 2012, the FTSE All-World Index Series includes 47

countries, 25 ―Developed,‖ 10 ―Advanced Emerging,‖ and 12 ―Secondary Emerging.‖ A further 26

countries are classified as frontier.

Source: FX-MM

MULTI-TASKING MONGOLS

Ulaanbaatar is teeming with entrepreneurs who are involved in three, four, or more ventures at

once.

What is partly behind Mongolia's brand of entrepreneurship is the simple economics of growth. Even

though Mongolia's infrastructure remains poor and basic services limited, the country is emerging as

one of the top growth stories of the decade, largely due to its massive, untapped mining wealth.

Most of these resources, including rich deposits of copper, coal, gold, iron ore, silver, uranium, and

molybdenum, remain in the ground, but some estimate the total worth to be close to USD 2 trillion.

A high-growth environment paired with a relatively low level of economic development creates

countless opportunities for Mongolians with the hustle and connection to launch new businesses.

Since few products are manufactured in Mongolia, many local entrepreneurs get their start in

equipment. A foothold established in one or two businesses makes launching the next one, two, or

five that much easier by leveraging their existing customer-supplier networks and revenue base.

This is in stark contrast to entrepreneurs in the West where the standard practice is to pick one

venture at a time and pursue it with laser focus. It is certainly true that successful new businesses

in Western markets often require a higher level of innovation than those in Mongolia, so it is

understandable that entrepreneurs there typically do not try to balance three or four businesses at

one time. But closing the door on new opportunities just because one path has already been

selected could limit an entrepreneur's potential in the end.

Source: Forbes

HERDERS WORRY ABOUT THE IMPACT OF MINING PROJECTS

Livestock herders are worried that a series of massive gold and copper mining projects will dry up

scarce water reserves and exacerbate desertification in the delicate Gobi Desert when operations

begin next year to tap one of the world's largest copper and gold deposits.

Critics say the large-scale mining operations have dire social and environmental costs. D. Sukhgerel,

head of Oyu Tolgoi Watch, a Mongolian non-governmental organization (NGO) that keeps tabs on

the Oyu Tolgoi copper-gold mine, said that the investment agreement the government signed with

Rio Tinto PLC, the project's lead developer, is unfair and that World Bank leadership pushed too

hard for the Mongolian government to sign on. She told the Bank Information Center in Washington

DC that the World Bank extended ―too much credit to Mongolia‖ in support of mining ―without

implementing compliance monitoring mechanisms or impact assessments.‖

Additionally, the London Mining Network notes that the mining company has failed to show that

there is enough water for the 30-to 60-year project. This is despite the fact that mining industries

consume the largest part to the country's annual water consumption, says the Rivers Movement, a

Mongolian environmental group which points out that Oyu Tolgoi will use approximately 243 gallons

of water a second. Meanwhile nomadic herders, who comprise 40 percent of the country's

population, will be forced to wander further to find water for their flocks, a 2011 United States

Agency of International Development report said.

Rio Tinto says it is committed to having a ―zero impact on community water sources,‖ but many

local herders are skeptical.

―When we come to the well, we can see the level of the well water is eight inches lower than it

used to be,‖ said A. Mijiddorj, a 76-year-old who herds his camel near Oyu Tolgoi.

The government has made a major effort to ban mining in environmentally sensitive areas but

ironically this has the heaviest economic impact on the 100,000 Mongolian self-employed miners

rather than on Rio Tinto. By contrast, Oyu Tolgoi will employ about 3,500 workers when it is

operational, according to the World Bank.

Source: Corp Watch

DON'T COUNT OUT MONGOLIA'S RESOURCE SECTOR YET

According to Australia's resource minister, Martin Ferguson, the mining booms in Australia is ―over.‖

BHP Billiton Ltd. recently canceled its USD 30 billion expansion plans for its Australian Olympic Dam

project, Rio Tinto PLC has abandoned several Australian projects, and Fortescue Metals has

announced hundreds of job cuts and a significant downsize of its expansion plans. These moves

highlight Mongolia's growing competitive advantage to deliver comparably cheap resources to

China—and potentially Japan and South Korea.

August was another challenging month for the resource sector, however recent news of stimulus

initiatives from China and the United States appears to be providing much needed market

confidence. The U.S. Federal Reserve has announced QE3, a third round of quantitative easing,

following similar moves from the European Central Bank (ECB). China is stepping up infrastructure

development as part of stimulus efforts to revive economic growth. According to HSBC, the Chinese

government may boost infrastructure spending growth to an annual pace of more than 20 percent in

the coming months. Road building, subway projects, rail upgrades are but some of the initiatives

announced—projects that will underpin continued and increasing consumption of Mongolian

resources.

The implications of increased Chinese infrastructure development and consumption bode well for

Mongolian resource exporters and the country's economy at large. After traveling to Mongolia for

three weeks and visiting many companies and their mine sites with colleagues, our strong

conviction is that Khan Investment Management Ltd.'s portfolio companies have substantial upside

potential. Companies whose sites were visited including Mongolian Mining Corp., Erdenes Tavan

Tolgoi JSC, SouthGobi Resources Ltd., Erdene Resource Development Corp., Xanadu Mines Ltd.,

Haranga Resources and Eruu Gol JSC.

Author Travis Hamilton has worked in the financial services industry in Switzerland, Singapore and

Australia since 2002. He founded Singapore-based Red Horse Investment Partners PTE Ltd., and

Khan Investment Management Ltd.

Source: UB Post

MANAGERS—NOT WORKERS—TO BLAME FOR UNSAFE CONSTRUCTION, SAYS MBA PRESIDENT

The president of the Mongolian Builders Association (MBA) has placed the blame from illegal

construction projects that have resulted in deadly accidents onto the managers and companies

instead of the construction workers operating at the sites. Accidents at buildings currently under

construction have led to the Ulaanbaatar government to suspend the activities at a number of

construction projects, many without the necessary permits.

MBA President M. Batbaatar said that too many construction projects, led by rich financiers rather

than those with construction experience, have begun without regard to regulations or industry

wisdom. With the 100,000 Homes housing program delayed for two years, people set out to build

as many residential development projects as possible so they could profit after the apartments

were built, he said. The result is a number of projects hazardously spread across the city center

and beyond, many less than 10 meters apart from each other. He noted that many of these projects

were operating illegally, without the necessary permits, and were rushed to finish before winter

sets.

―People who got rich in other professions are entering the construction industry thinking they

would triple their money which they put into the project,‖ said Batbaatar. ―They are hiring the

builders at low costs and making them work day and night.‖

Batbaatar stressed that blame should not be placed on the 37,000 construction workers working at

the sites, who are taken advantage of and lack protections from their employers. He recommended

government institute employee protections and benefits as well as enforce regulations that are in

the interest of public safety around these sites.

He added that the quality of construction has deteriorated, too, in Mongolia.

―In old times, Ulaanbaatar's infrastructure was well organized; the buildings had a certain distances

between each other. But today buildings are almost fastened to each other. There are no buildings

that can keep people safe in the event of an accident or earthquake.‖

The reorganization of construction projects would improve the quality of buildings as well as

reduce real estate prices, he said.

Source: UB Post

AMERICAN UNIVERSITY OF MONGOLIA SETS OUT TO PREPARE MONGOLIA TO THINK

Mongolia will need thinking to manage all the change flooding the country, and Peter Morrow,

Chairman of the new American University of Mongolia (AUM), intends to bring that here.

Morrows intends to offer a liberal United States-style education in Ulaanbaatar at the university,

formally established this week. Classes for AUM‘s first freshmen will begin in the fall of 2014. The

university, which currently occupies one floor of an office building on Seoul Street, already offers

an executive MBA and English language classes. The university focus, at least to begin with, will be

on environmental and business issues, to produce graduates with the hard skills the emerging

economy needs, Morrow said.

―We will train them. But they have to be able to think. So logically any curriculum would start with

that,‖ he said. He added, ―Mongolia is obviously a strategic place to a lot of people. It needs more

education, not just to dig stuff out of the ground and sell it, but also in terms of managing the

change,‖ said Morrow.

Key problems include environmental degradation and accompanying health risks, said Morrow. Then

there is ―the pace of cultural change.‖ The consequences of moving large numbers of nomads and

herders into apartments and having them working in mines is unknown, he said, but family abuse

and alcoholism are two major social challenges already plaguing society.

Governance is another: ―How do you mange important government functions in the face of all that

change? How do you manage taxes and royalties? How do you manage it wisely?‖

While Japan, South Korea, and Taiwan became democratic only after liberalizing their economies,

Mongolia worked from the other side, introducing its capitalist mechanisms after declaring a

democratic government, said Morrow.

The new university, whose funders include Newcom Group, Rio Tinto PLC, and the GE Foundation,

is part of an informal chain of worldwide American Universities that includes those in Beirut and

Cairo. It joins tertiary institutions already operating in Mongolia, such as the National University of

Humanities.

Source: New York Times

SOLAR PANELS LIGHT UP HERDERS' FUTURES

Off-grid solar home systems have changed the daily lives of about 100,000 herder families.

The herders have gained access to solar power through a program launched by the Mongolian

government with support from the World Bank and the government of the Netherlands. Thanks to

the National 100,000 Solar Ger Electrification Program, over half a million men, women and

children covering half the rural population and 70 percent of herders, now have access to modern

electricity. The solar systems generate enough power for lights, televisions, radios, mobile phone

charging, and small appliances.

―A few years ago, country herders managed with candles and lanterns. The change in life between

then and now is like night and day,‖ said herder B. Khandaa. ―I believe that the quality of life in

the countryside and the city are now about the same.‖

This program provided portable solar home systems adapted to herders' nomadic way of life.

Herders can easily set them up and dismantle them when they relocate. The project employed a

balanced approach to pricing the systems, where herders purchased the solar home systems, albeit

with a subsidy that covered about half the costs. It made the systems affordable to herders while

helping to expand sales.

Reaching herders living it the vast rural countryside was a particular challenge to the project

managers. The project established 50 privately owned solar home system sales and service centers

spread across Mongolia. Their staff were trained to promote and sell certified solar home systems

so that herders could buy with confidence. They were also trained to repair and maintain the

units—vital to sustaining the benefits of the program. To extend their reach, the sales and service

centers partnered with an existing network of village administrators located in 342 villages. This

effective public-private partnership helped the project sell solar homes in every remote corner of

the country.

Mongolia has found off-grid electrification with solar power to be a viable approach to serving a

nomadic rural population that is scattered across a vast territory of over 1.5 million square

kilometers. The program has supplied 100,146 solar home systems, while also developing a

sustainable supply chain of local businesses that will help achieve the government's goal of

universal rural electrification by 2020.

Source: World Bank

ZIMBABWEAN HELPS MONGOLIANS DIG FOR GOLD

Development workers do not necessarily have to come from the West. A mining expert from

Zimbabwe is helping to improve the lives of small-scale miners in Mongolia.

Patience Singo knows the situation enterprising artisan miners are facing from his experience in his

own country, Zimbabwe. The 40-year old is a mining engineer who has worked in various

development projects across Africa aimed at improving the living and working conditions of artisan

miners. In Mongolia he works with the Swiss Development Council (SDC), which has set up a project

for small-scale miners in cooperation with the Mongolian government.

When he first came to the country, three years ago, his first assignment was to set up a mercury-

free processing plant for the miners because the Mongolian government had just banned the use of

the toxic substance in small-scale mining. Within three months Patience and his colleagues had the

plant up and running and it became a model for other mercury-free processing plants that were to

follow.

Singo had to deal with skepticism, as some did not see how someone who came from a developing

country would be able to help. But with his positive attitude, Patience was quickly able to

overcome their reservations. He said it is funny that Western experts are sent for training in one

developing country so they can gain experience in such a context and then pass it on to people in

another developing country.

―Why not bring a guy from a developing country and we do a south-to-south knowledge transfer?

Isn't it cheaper and better and more effective?‖ he asked.

In addition to deploying his professional skills, Patience also tries to introduce something of the

African way of doing things.

―Mongolians are used to being nomadic, to living in an individualistic culture, but as Africans we are

community-based people. There is a unique African value we call Ubuntu., and I always try to bring

that community culture into the team because of my African background,‖ he said.

Source: DW

FALCON'S NEST PROJECT AIMS TO BOOST SCHOOLS

An Abu Dhabi-funded program to build artificial nests for falcons could provide benefits for

impoverished schools in Mongolia.

Mongolian children in areas where the nests are built have been forging links with overseas schools,

and sharing stores about falconry and their culture. In return, children overseas have been raising

funds to help modernize schools in Mongolia. The project linking schools in different countries is

the latest development to come from the artificial nests program, which was started in 2009 with

funding from the Environment Agency-Abu Dhabi and aims to help increase the number of saker

falcons in the wild.

Mongolia is the only country with a Convention on International Trade in Endangered Species of

Wild Fauna and Flora (Cites)-sanctioned trade in falcons, and the program was designed to ensure

the trade was sustainable. Nicola Dixon, manager of the artificial nests program at the United

Kingdom-based International Wildlife Consultants, said the school link program was about ensuring

some of the benefits of the trade trickled down to the local community.

―At the moment communities aren't benefiting at all from the trade in falcons,‖ she said. ―For

them to benefits, we need to link schools up through the program.‖

She said that a pilot study this year with a school in Bayan of Tuv Aimag and one in Cardiff, Wales

had already paid dividends. Children at Glyncoed Junior School had already raised DH 6,000 of the

DH 16,000 (USD 58,773) they needed to provide Internet access at a school in Bayan.

The schools are communicating with each other, sharing ideas about falcon conservation and

learning about falconry in both Mongolian and the United Arab Emirates. The eventual goal is to

have schools in each of the 20 areas in Mongolia where artificial nests are installed participating in

the program.

Source: The National

MACHETE ARMED GANG ROBS CREWMEN OF MONGOLIAN VESSEL

Eight men, armed with machetes and a gun, robbed the crew of a commercial vessel registered in

Ulaanbaatar in the waters of Tanjung Piai, about 0.1 nautical mile from the Malaysia-Singapore

border waters last night.

The Malaysian Maritime Enforcement Agency (MMEA) Southern Region enforcement chief First

Admiral Adon Shalan said the agency was in the midst of tracking down the eight robbers who

escaped in a wooden boat. In a statement, he said the group was also linked to an attempted

robbery on 13 September, also in the Tanjung Piai waters, involving commercial vessel MT Scorpio.

Source: New Straits Times

CHINA CUTS COAL, RARE EARTH PRODUCTION

China autonomous region Inner Mongolia has shut down nearly 900 coal mines and 2,000 other

mines as part of a seven-year effort to better manage resources, protected the environment and

curb illegal resource extraction. The cut in China's domestic production means much for demand

from Mongolia's raw resources.

The traditional coal mining region where output reached close to a billion tons last year has

reduced the number coal mines to roughly 500 from more than 1,300 in 2005 reported China Daily.

All coal mines with an annual capacity of less than 300,000 tons have been ordered to shut down,

according to the regional department of land and resources.

Inner Mongolia is also an important center for the country's rare earth's industry, a commodity that

some developers are looking to Mongolia as a new source. China—responsible for more than 90

percent of the global supply of the 17 elements used in a variety of industries including green

technology, defense systems and consumer electronics—a few years ago embarked on a crack down

on illegal rare earth mines and consolidation of the industry under a few large producers.

Source: Mining.com

POLITICS

PARLIAMENT PASSES ITS 2013 LEGISLATIVE SCHEDULE

Parliament passed a resolution on 18 september that adopted the following schedule for bill review

during its autumn session:

1. Draft law on the mongolian state budget for 2013;

2. Draft law on human development fund budget for 2013;

3. Draft law on social insurance fund budget for 2013;

4. Draft resolution of parliament for ―The concept of state currency policy for 2013‖.

5. Budget utilization review from 2011, government consolidated financial report of 2011;

6. Draft resolution of parliament on ―the concept of improving the legislation of Mongolia

for 2013‖

7. Draft law on savings insurance.

8. Draft law on securities

9. Draft law on mongolian parliament and parliamentary procedure.

10. Draft law on the freedom of the press.

11. Draft law on food and food safety.

Source: BCM

DEPUTY MINISTER RECOMMENDS MAINTAINING OT INVESTMENT AGREEMENT

Newly installed Deputy Minister of Economic Development O. Chuluunbat set out his plans for the

next four years, expressing an interest of utilizing funds attained from the Development Bank of

Mongolia‘s bond offering this year and maintaining the current Oyu Tolgoi investment agreement.

Batbayar said his ministry currently has a number of projects to choose from, including the

construction of railway lines, and the main objective now is to choose which would be of the

greatest benefit to the country. He said the last government failed to decide on how to spend the

USD 600 million earned by the Development Bank in its debt offering because of disagreements

between the various ministries. While it is the Ministry of Economic Development‘s (MED's)

responsibility to choose which projects will take priority, it will not be leading any, said

Chuluunbat, due to possible conflicts of interest.

In regard to the Oyu Tolgoi investment agreement, the deputy minister said more time would have

to pass to see how well Mongolia benefits from the current agreement before any decisions should

be made on whether or not it should be renegotiated.

―...I was not among the 20 members of Parliament that signed the petition [for renegotiations] to

government,‖ he said.

Chuluunbat said the government should use Erdenet Mining Corp., which pays USD 50 billion to

Russian investors while USD 950 billion stays within Mongolia via transportation fees, worker

salaries, and payments for electricity, heating and other services, should be used as a point of

reference to measure the benefits.

―Similarly, Oyu Tolgoi will bring many such benefits to the domestic economy,‖ he said.

Source: Undesnii Shuudan

VICE MINISTERS APPOINTED

The Cabinet of Ministers has appointed its vice ministers. As per the agreement for the coalition

government, 11 positions have been allocated to the Democratic Party (DP), three to the Mongolian

People‘s Revolutionary Party (MPRP), two to the Mongolian National Democratic Party (MNDP), and

two to the Civil Will-Green Party (CW-GP).

The following is the complete list of vice minsters:

Ministry of Green Development: B. Tulga (MPRP)

Ministry of Foreign Affairs: D. Gankhuyag (DP)

Ministry of Finance: S. Purev (DP)

Ministry of Justice: E. Erdenjamyan (MPRP)

Ministry of Construction and Urban Development: G. Baigalmaa

Ministry of Defense: A. Battur (DP)

Ministry of Education and Science: B. Urgamaltsetseg (DP)

Ministry of Roads and Transportation: Ch. Erjan (DP)

Ministry of Culture, Sport and Tourism: M. Tumenjargal (CW-GP)

Ministry of Mining: O. Erdenbulgan

Ministry of Labour: J. Batkhuyag (MNDP)

Ministry of Social Welfare: E. Tamir (DP)

Ministry of Economic Development: O. Chuluunbat (MPRP)

Ministry of Energy: D. Dorjpurev (DP)

Ministry of Health: J. Amarsanaa

Ministry of Industry and Agriculture: B. Tsogtgerel (MNDP)

Source: Undesnii Shuudan

BUDGET CUTS EFFECT MASS LAYOFFS WITHIN GOVERNMENT

The head of the Standing Committee on Budget said budget cuts would result in the layoff of 500

government workers.

Committee head Ts. Davaasuren said eight projects to be funded by the state budget as well as

resolutions had been approved by the standing committee. However, if the government is to keep

state spending below 4.9 percent of the country‘s gross domestic product (GDP), as mandated by

the Law on Fiscal Stability, it would have to lay off civil servants.

2013 will be the first year for the budgetary law to take effect.

Source: Udriin Sonin

MPP LOSES MEMBERSHIP TO RIVAL MPRP

The Mongolian People‘s Party (MPP) is losing many within its ranks to the Mongolian People‘s

Revolutionary Party.

Thus far, 250 members have abandoned the MPP to join the MPRP, the party now working within

the Democratic Party (DP)-led grand coalition. The MPRP has called the migration a return to its old

ranks, as it is an offshoot of the MPP. The party formed after its current party leader N. Enkhbayar,

who is now serving four years in prison for graft, left the party because he felt it had compromised

its ideals.

MPRP Secretary General G. Shilegdamba greeted the new party members with party credentials and

wishes that they restore justice to Mongolian government. Party members commented that another

549 members of the MPP also wished to join the MPRP but could not do so at that time.

Source: Udriin Sonin

MONGOLIA'S GREAT OPPORTUNITIES MUST BE SHARED BY THE NATION, SAYS ELBEGDORJ

Mongolia is quickly becoming a geopolitical leader that Western democracies are looking to for trust

in the Northeast Asian region. President Ts. Elbegdorj spoke about Mongolia's great opportunities

for growth, stimulated by its vibrant mineral resources sector, and the wave of change flooding

Mongolia's democratic society.

―This is a great opportunity,‖ said President Ts. Elbegdorj, speaking on Mongolia's 17 percent

growth—the highest in the world. ―But we have to manage that. We have to share the great

opportunity with all our people.‖

Despite the huge wealth, there is growing inequality and worry that it will not be spread around.

There are also concerns about corruption, which Elbegdorj calls ―a mortal enemy for young

democracies.‖ He believes the zero-tolerance policies the country is attempting to implement can

help shield the country.

Its neighbor China is a natural trading partner, but Elbegdorj believes the country must build more

infrastructure to create gateways between both China and Russia. He also believes the United

States has a common strategic interest with Mongolia.

―Our men and women in uniform actually serve together in Iraq, now we're serving in Afghanistan,

and other hot spots.‖

Elbegdorj was recently in Iran for the Non-Aligned Movement (NAM) meeting, believing it to be an

opportunity for Mongolia's diplomatic exposure. He said Mongolia's position is that Iran should

comply with the U.N. Security Council resolution. He is also optimistic on North Korea and the

possibility for reform under its new young leader, Kim Jong Un. He said Mongolia is ―uniquely

positioned‖ in regard to its relationship with North Korea, while noting that Mongolia has an

embassy in Seoul, South Korea. North Korea needs economic reform foremost, he said, and that

Mongolia would be willing to help guide it through shared experience.

Source: CNN

ELBEGDORJ RETURNS TO HIS ALMA MATER

President Ts. Elbegdorj gave a public address about Mongolia's peaceful transition into capitalism

and democracy at the John F. Kennedy Jr. Forum this month. Elbegdorj spoke on corruption, human

rights and his success in revitalizing his home country at the Institute of Politics.

Championing the cause of the peaceful democratic revolution he launched to overthrown the long-

standing communist regime in Mongolia, Elbegdorj offered a forceful diatribe against the

widespread corruption in government that he successfully fought against, twice as prime minister

and now as president. Speaking to a packed audience in the John F. Kennedy Jr. Forum, Elbegdorj

dubbed Mongolia as the current world leader in freedom, referring to it as the ―democratic anchor

of the east.

Having graduated from the Harvard Kennedy School with a Master in Public Administration in 2002,

Elbegdorj called it a ―high honor to return to Harvard‖ after ten years. He stated that he ―still ran

on Harvard fuel‖ even now as a head of state.

Elbegdorj also noted the strong diplomatic ties between the United States and Mongolia. He

mentioned one incident in which he had to write a letter to prevent a stolen Mongolian dinosaur

fossil from being auctioned off in the United States. Upon recounting this incident to Secretary of

State Hillary Clinton, he said to her, ―Now, in this age, we only have one dinosaur—called

corruption.‖

Source: The Crimson

RUSSIAN-MONGOLIAN MILITARY EXERCISE BEGINS TODAY

The Russian-Mongolian military exercise codenamed Selenga 2012 begins 28 September at the

training range Burduny near the city of Kyakhta in Russia's Buryatia.

The Mongolian side will be represented by motorized infantry and tank units as well as an AD and a

mortar battery. Russia will be represented similarly but with batteries of the Grad multiple-launch

rocket system and Gvozdika self-propelled gun mounts. The Russian-Mongolian combined force

created for the period of the exercise will carry out an imaginary anti-terrorist operation in an

underpopulated mountain-woody area and work out methods to settle a crisis situation to ensure

security in the region.

It will plan an anti-terrorist operation, block and destroy imaginary illegal armed groups as well as

ensure the withdrawal of refugees from the conflict zone. A military contingent of the Mongolian

Armed Forces arrived in Burduny yesterday. The joint military exercise Selenga has been held

regularly for the past five years. Russia has hosted the exercise four times, while last year it was

held in Mongolia. The Selenga 2012 exercise involves about 250 military, as well as about 300

military of the Russian Eastern Military District. All in all, about 100 units of military hardware will

be involved on both sides. The military exercise will continue until 29 September.

Source: Zee News

CHINA PLEDGES FOR STRENGTHENED MILITARY TIES

China Defense Minister Lian Guanglie last Friday pledged to seek stronger defense ties with

Mongolia.

Liang made the pledge in a meeting with Choijamts, a senior official of the Mongolian Defense

Ministry, who is leading the Mongolian delegation to Beijing for the sixth defense and security

consultations between the two countries. Liang reviewed China-Mongolia relations in recent years,

saying political trust has deepened, economic cooperation has developed, and people-to-people

exchanges have flourished.

―Our defense relations have been smooth,‖ Liang said highlighting the high-level visits, defense

consultations, personnel training, and border defense cooperation.

Liang said China would like to work with Mongolia to expand areas of communication and deepened

pragmatic cooperation to ensure the long-term steady growth of bilateral relations. Choijamts said

Mongolia expected to step up defense cooperation with China and boost the growth of military

relations.

Earlier Friday, Ma Xiaotian, deputy chief of general staff of the People's Liberation Army (PLA), and

Choijamts attended the sixth defense and security consultations between China and Mongolia. Both

sides maintained that it was in the common interests of both countries to maintain regional peace

and stability, which defense departments of both countries would make positive efforts to work for.

Source: China Daily

BRAZIL TO HELP DEVELOP FOOTBALL IN MONGOLIA

Non-resident ambassador of Brazil to Mongolia Clodoaldo Hugueney said in Ulaanbaatar on

Wednesday his country was ready to help Mongolia develop football.

Hugueney made the remarks at a meeting with the director of the Implementation and

Coordination Department for the sport policy of culture, sport and tourism ministry, D.

Jargalsaikhan. During the meeting the two sides discussed collaborations in sports and agreed to

sign a memorandum to bring Brazil's experiences in football development to Mongolia.

The ambassador also said Brazil holds superiority in team sports including football, basketball and

volleyball, while Mongolia enjoys advantages in individual sports such as boxing, judo, freestyle

wrestling among others. He said he hoped the two countries can cooperate and exchange

experiences in those sporting events.

In recent years the Mongolian government has intensified its efforts to promote the popularization

of youth football and since 2000 the Mongolian Football Confederation has implemented many

programs together with the Asian Football Confederation (AFC) and International Federation of

Football Association (FIFA) to help Mongolia develop the sport.

Source: First Post

ACTION PLAN SHOWS MORE INTENDED INFLUENCE FROM GOVERNMENT

The Mongolian government's Action Plan will have implications for Mongolia's development over the

next four years, particularly its ability to continue to attract foreign investment.

Mongolia's economic and social development featured prominently in the lead-up to the recent

parliamentary elections, held on 28 June, and the role of foreign investment was one of the

contentious issues. The release of the action plan for the period 2012 to 2016 will be the newly

formed coalition government's first significant policy pronouncement regarding its term in office.

The plan is understood to include reform of the taxation system, establishment of a home loan

assistance program, programs for new jobs creation, promotion of infrastructure and development

projects, policies to control inflation, regular forums for cooperation with the private sector, and

reforms of the Mongolian Stock Exchange (MSE). The proposed reforms illustrate the new

government's commitment to ongoing development of Mongolia's institutions and regulatory

framework, while ensuring that more of its citizens enjoy the benefits of economic growth.

In regard to the mining sector, the plan is expected to promote local participation, review double

tax treaties, limit the number of mineral resource licenses that may be held by an individual or

entity, promote value-adding activities within Mongolia, and promote increased exploration and

development of petroleum reserves.

These activities suggest that the new government intends to exert more influence in the mining

sector than previous governments. The proposed restrictions do not, however, appear to extend as

far as some may have been expected. For example, the idea that the plan would set out to amend

the Mongolian legal framework to ensure that Mongolian interests own no less than 51 percent of a

company holding a mining deposit was apparently unrealized.

However, the fact that the action plan omits any regulatory change as well as guidance on the Law

on the Regulation of Foreign Investment in Business Entities Operation in Sectors of Strategic

Importance does leave some room for concern.

Source: Allens Arthur Robinson TSMP

MONGOLIA'S NEXT CHALLENGE

American commentators have the unfortunate tendency to view democratizing countries, even

those emerging from decades of repression and dictatorship, through an idealized lens that would

leave even the United States out of focus. Mongolia is a case in point.

The country has been in the news lately with the conviction of former Prime Minister and President

N. Enkhbayar for corruption, a development that has led some to worry that mineral-rich Mongolia

is already succumbing to the ―resource curse.‖ But some perspective is necessary. Freedom House

has consistently ranked Mongolia as a ―free‖ country—the only former Communist country outside

of Europe to have done so since 1999.

The public trial of Enkhbayar bitterly divided the country. Opposing perspectives on the trial and

conviction were evident in the many conversations had during a recent trip. Most people in and out

of politics supported the conviction when interviewed. Many—most compellingly, a group of

Western-educated Mongolians in the private sector—believed that Enkhbayar was guilty of crimes

more serious than these he was convicted of.

Enkhbayar's trial and conviction have been roundly criticized internationally, including by California

Senator Dianne Feinstein and John Thornton, chairman of the board of the Brookings Institution.

Members of Enkhbayar's Mongolian People's Revolutionary Party (MPRP) insist he has been wronged.

A recent Brookings Institution commentary noted that corruption began to spiral out of control

during Enkhbayar's time in office. A 2005 report for the U.S. Agency for International Development

condemned ―the blurring of the line between the public and private sector brought about by an

endemic and systemic conflict of interests at nearly all levels.‖ The author noted, ―Politics was

allowed to be dominated by interests seeking to attain personal gains, and the culture of

permissiveness toward corruption became the hallmark of the 2000s.‖

All this shows that Mongolia should vigorously prosecute grave acts of corruption by leaders from all

political parties, while strengthening guarantees for due process. Given the current controversy

about judicial independence, now would also be a good time for constitutional reforms that would

increase the independence of the courts.

Authors Larry Diamond is a professor of political science, and Francis Fukuyama and Stephen

Krasner are fellows at Stanford University. All three recently spoke on democracy at the

Government Palace, at the invitation of President Ts. Elbegdorj.

Source: Wall Street Journal

_______________________________________________________________________________________________ ANNOUNCEMENTS

GIANT STEPPES JAZZ FESTIVAL VI: ―THE JAZZ PARTY IS BACK!‖ 2-6 OCTOBER, ULAANBAATAR

The Sixth Giant Steppes Jazz Festival will run in Ulaanbaatar from 2 to 6 October 2012.

Thanks to the support of several international embassies and arts programs, we are set to enjoy the

music of Eliane Amherd from Switzerland via New York City (http://www.elianeperforms.com),

Bonnie J Jensen from Australia (http://www.bonniejjensen.com), Laurent Moore from France, the

Martin Jacobsen Quartet from Denmark (http://www.martinjacobsen.com) and Zeki Caglar Namli

from Turkey. Events will include concerts, jams and workshops.

For more information, check out Giant Steppes Jazz on Facebook or jazzmongolia.com

USAID/BPI QUALITY ASSURANCE LEAD AUDITOR TRAINING SERIES 8-15 OCTOBER

The USAID/BPI project, in collaboration with the Mongolian Quality Management Center of

Excellence (QMCE), plans to offer a first 5-day Lead Auditor training series in Mongolia from 8 to 15

October 2012.

The intent of the Lead Audit training series is to build awareness and capacity of professionals

seeking to become quality assurance managers, auditors or those persons responsible for quality,

environment or food safety conformity across respective businesses or associations.

Upon completion, trainees will have understanding in principles and practices of executing

management system audits. Global Certi Co., a fully accredited and licensed South Korean

training/certification provider registered with global training body RAB-QSA,will facilitate courses.

Cost per trainee delegate is MNT 800,000.

For information or to secure a reservation, contact Khaliun at BPI offices at +976 11 32 13 75;

Khaliun@bpi-chemonics.biz.

MONGOLIA INVESTMENT SUMMIT 2012, HONG KONG, OCTOBER 30-31

The Mongolia Investment Summit 2012 will be held from 29 to 30 October at the Four Seasons Hotel

in Hong Kong to once again bring the best of Mongolia's investment opportunities to Asia's leading

investment hub.

Now in its third year, the summit has strongly cemented its position as the largest Mongolian

investment event outside of Ulaanbaatar, providing foreign investors with the most comprehensive

overview of Mongolia's key economic growth sectors all under one roof.

Speakers to the event include Altai Khangai, Chief Executive Officer of the Mongolian Stock

Exchange (MSE), Cameron McRae, President and Chief Executive Officer of Oyu Tolgoi LLC, and

James Passin, Co-founder and Manager of Firebird Mongolia Fund.

BCM is again a Supporting Organization for the event. BCM members will get a 15% discount. Jim

Dwyer, Executive Director of BCM, will chair both morning sessions. For more information, find a

brochure to the event by logging on to the website: mongoliainvestmentsummit.com.

_____________________________________________________________________________________

REGISTER NOW FOR MONGOLIAN MINING DIRECTORY-2013

Mongolian Mining Directory-2013 which provides information database for Mining companies,

investors, suppliers, service companies, government and non government organizations will be

published for the fourth year to commemorate the 90th anniversary of the Mongolian mining

industry. The MMD is distributed free of charge to international and domestic mining companies,

international conferences and exhibition, embassy offices in Mongolia and foreign countries to

investors.

BCM is a Supporting Organization of the MMD and welcomes Mongolian mining industry participants

who are interested in advertising their products and services in Mongolian Mining Directory-2013.

For more information please visit: www.mining.mn, www.mongolianminingdirectory.mn or call

+976-7011 5590.

____________________________________________________________________________________________________

REGISTER FOR BCM‘S MINING SUPPLY CHAIN DATABASE AT NO COST

The new version of BCM‘s Mining Supply Chain Database is ready for use. Following the initiative of

Oyu Tolgoi LLC, the BCM has maintained the Mining supply chain database since March 2009. It is

honor to introduce you to the new version of the database which is totally upgraded as to its

content and use of information technology opportunities.

We are inviting all Mongolian mining suppliers and buyer companies to join the Mining Supply Chain

Database. Please visit here for registration.

If you have any questions regarding the database, please contact Undral

at undral@bcmongolia.org or 317027.

____________________________________________________________________________________________________

―MM TODAY‖ on MNB-TV, Friday‘s at 19:00

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 for 19:00 tonight. Tune in to watch this program that reports stories from today‘s BCM

NewsWire.

BCM WEBSITES

MONGOLIAN WEBSITE ‗PRESENTATIONS‘ AND ‗NEWS‘ SECTIONS

The new ‗Presentations‘ section on BCM‘s Mongolian website can be reached via bcm.mn/itgeluud.

Several presentations already posted include the World Bank‘s Mongolia Quarterly Economic

Update–June 2012 and 11 speeches from the 2nd Coaltrans forum, held on 23 to 24 May in

Ulaanbaatar.

As a key component of BCM‘s Mongolian website articles from the ‗News‘ section, and the

government website Open-Government.mn are regularly updated.

___________________________________________________________

ENGLISH WEBSITE 'PRESENTATIONS', 'MONGOLIA REPORTS' AND ‗MONGOLIAN BUSINESS NEWS‘

On BCM‘s English website, the ―Resources‖ and ―Presentations‖ sections are available to find

recent postings from BCM‘s 24 September monthly meeting and 9 presentations from Discover

Mongolia 2012. The ―Mongolia Reports‖ section includes Taxes for Expatriates in Mongolia from

PricewaterhouseCoopers and the 2012 Mongolia Investment Climate Statement by the Economic and

Commercial Section of the U.S. Embassy.

BCM's 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 Friday's weekly NewsWire.

NewsWire will continue to be issued each Friday, incorporating items already on the home page for

a consolidated account of the week‘s events.

____________________________________

MONGOLIAN WEBSITE ‗PRESENTATIONS‘ AND ‗NEWS‘ SECTIONS

The new ‗Presentations‘ section on BCM‘s Mongolian website can be reached via link to

bcm.mn/itgeluud. Several presentations already posted include World Bank‘s Mongolia Quarterly

Economic Update–June 2012; 11 speeches from the 2nd Coaltrans on May 23-24 in UB.

As a key component of BCM‘s Mongolian website ‗News‘ section, articles from the Government‘s

―Open-Government.mn‖ site are regularly posted.

___________________________________________________________

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.

Connect with BCM on Linked-in to join the diverse group of professional contacts creating a better

business environment in Mongolia today.

Add BCM on Facebook at http://www.facebook.com/pages/THE-BUSINESS-COUNCIL-OF-

MONGOLIA/129826330435540 to read the latest announcements and comment on events carried in

the NewsWire with the community. Recently posted are BCM football cup pictures.

Hear breaking news and announcements as they happen when you follow BCM on Twitter at

http://twitter.com/#!/bcMongolia.

Of course for news information, interviews, and announcements regarding our organization, visit

the official BCM website at www.bcmongolia.org and www.bcm.mn.

______________________________________________________________________________________ ECONOMIC INDICATORS

AUGUST MACROECONOMIC OVERVIEW

SUPERMARKET PRICE COMPARISON-SEPTEMBER 2012

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] July 31, 2012 *14.5% [source: NSOM] *Year-over-year (y-o-y), nationwide Note: 14.9% y-o-y, Ulaanbaatar city, July 31, 2012 CENTRAL BANK POLICY 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] CURRENCY RATES – August 30, 2012 Currency Name Currency Rate U.S. dollar USD 1,395.08 Euro EUR 1,797.70 Japanese yen JPY 18.02 British pound GBP 2,259.82 Hong Kong dollar HKD 180.59 Chinese yuan CNY 221.38 South Korean won KRW 1.25 Russian ruble RUB 44.71 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.